Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 83-6006)
Before: SEITZ, WEIS, and ROSENN, Circuit Judges
ERISA has a non-retroactivity provision stating that the Act does not apply to causes of action as well as acts or omissions antedating January 1, 1975. In this case, although it acknowledged that the cause of action arose after that date, the district court nevertheless decided that it had no subject matter jurisdiction because relevant events giving rise to the plaintiff's claim of action occurred pre-ERISA. We disagree and conclude that jurisdiction derived by virtue of a qualifying cause of action is not defeated by the application of state law to events which occurred before ERISA's effective date. Consequently, we will vacate the order of dismissal and remand for a determination on the merits.
The plaintiff's complaint alleges that the defendant violated ERISA by failing to pay certain pension benefits. On the defendants' motion, the district court dismissed the suit.
There is no dispute about the salient facts. Plaintiff was employed from 1953 to 1970 by the Iron Mines Company of Venezuela, a subsidiary of the Bethlehem Steel Company. When that assignment terminated, Bethlehem paid plaintiff $56,492 as "Cesantia and Antiquedad" (C & A), a form of severance pay mandated by Venezuela law. One day later, on March 1, 1970, plaintiff began to work for Bethlehem Mines, a subsidiary in Spain. He was later employed by the parent Bethlehem Steel Company and resigned in 1980.
When plaintiff left Bethlehem's employ, the company's General Pension Board determined that he was entitled to a deferred pension, based on 10 years of service -- from March 1, 1970 to February 29, 1980. Plaintiff contended that he should also receive credit for the 17 years he spent in Venezuela. The General Pension Board, relying on the company policy in effect in 1970, denied credit for that period.
Bethlehem's practice in 1970 was that an employee who had received C & A and wished to continue working for the company was given a choice. He could either refund the C & A and apply the years of his Venezuelan service toward his pension eligibility or he could retain the money and be reemployed by the company as a "new hire" with no accumulated pension credit.
Because plaintiff did not refund the C & A, the Pension Board refused to include the Venezuelan years in computing his pension benefits. In his complaint, plaintiff alleged that the Pension Board's refusal was in violation of ERISA's provision barring forfeitures after 10 years of service, 29 U.S.C. § 1053(a)(2)(A). In addition, he asserted a breach of the company's 1977 Salaried Pension Plan.
The district court acknowledged that the cause of action arose in 1980 when plaintiff retired and requested pension benefits, but observed that the "pre-1975 'acts or omissions'" must also be examined. The court referred to § 514 which provides that "ERISA shall not apply with respect to any cause of action which arose, or any act or omission which occurred, before January 1, 1975." 29 U.S.C. § 1144(b)(1).
By denying plaintiff benefits, the court found that the defendants were simply following a position consistently taken and communicated to plaintiff beginning in 1970--i.e., that he was considered a new employee as of 1970 for all purposes, including the pension. Determining that the pre-1975 communications as well as the plaintiff's refusal to repay the C & A were significant "acts or omissions" which gave rise to the cause of action, the court concluded that state rather than federal law governed the pre-ERISA conduct. In the belief that ERISA did not give it jurisdiction to adjudicate the action under state law, the district court dismissed the complaint.
On appeal, the plaintiff argues that his rights are controlled by the Bethlehem 1977 Salaried Pension Plan and that the Board's action amounts to an impermissible forfeiture under ERISA. The defendant argues that since the plaintiff's break-in-service occurred before 1976, ERISA does not apply and the district court properly dismissed the suit.
ERISA provides that a civil action may be brought by a participant or beneficiary to recover benefits due him or to clarify his rights to future benefits under a plan. 29 U.S.C. § 1132(a)(1)(B). "State courts . . . and district courts of the United States shall have concurrent jurisdiction" under the preceding provision. 29 U.S.C. § 1132(e)(1).
Because plaintiff requested and was denied benefits in 1980, there is no doubt that his claims come within the scope of ERISA's jurisdictional provision. He is a beneficiary under an ERISA pension plan and seeks restoration of pension credits as well as injunctive relief requiring payment of future benefits. Consequently, while plaintiff could have brought his ...