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[W] Walling v. Brady

July 25, 1997

JOSEPH R. WALLING, AND OTHER INDIVIDUALS SIMILARLY SITUATED

v.

EDWARD J. BRADY; HAROLD R. BROHAWN; JOHN D. DANIELLO; WILLIAM R. HICKMAN; TERRANCE M. SHANNON; JOHN W. STEWART; JAMES R. WAHL; ALFRED C. WILSON, JR., AS TRUSTEES OF THE PLUMBERS AND PIPE FITTERS LOCAL UNION NO. 74 PENSION FUND; PLUMBERS AND PIPE FITTERS LOCAL UNION NO. 74 PENSION FUND, APPELLANTS



On Appeal from the United States District Court for the District of Delaware

(D.C. No. 94-cv-00410)

COWEN, Circuit Judge.

OPINION WITHDRAWN

JOSEPH R. WALLING, AND OTHER INDIVIDUALS SIMILARLY SITUATED

v.

EDWARD J. BRADY; HAROLD R. BROHAWN; JOHN D. DANIELLO; WILLIAM R. HICKMAN; TERRANCE M. SHANNON; JOHN W. STEWART; JAMES R. WAHL; ALFRED C. WILSON, JR., AS TRUSTEES OF THE PLUMBERS AND PIPE FITTERS LOCAL UNION NO. 74 PENSION FUND; PLUMBERS AND PIPE FITTERS LOCAL UNION NO. 74 PENSION FUND, APPELLANTS

On Appeal from the United States District Court for the District of Delaware

(D.C. No. 94-cv-00410)

Argued June 16, 1997

BEFORE: COWEN, ALITO and SEITZ, Circuit Judges Richard L. Abbott, Esq. (argued) Theisen, Lank, Mulford & Goldberg P.O. Box 1470 1201 Orange Street One Commerce Center, Ninth Floor Wilmington, DE 19899 COUNSEL FOR APPELLEE Joseph R. Walling, and other individuals similarly situated Kent Cprek, Esq. (argued) Richard B. Sigmond, Esq. Sagot, Jennings & Sigmond 510 Walnut Street The Penn Mutual Towers, 16th Floor Philadelphia, PA 19106-3683 COUNSEL FOR APPELLANTS Edward J. Brady Harold R. Brohawn John D. Daniello William R. Hickman Terrance M. Shannon John W. Stewart James R. Wahl Alfred C. Wilson, Jr., as Trustees of the Plumbers And Pipe Fitters Local Union No. 74 Pension Fund Plumbers and Pipe Fitters Local Union No. 74 Pension Fund Susan K. Hoffman, Esq. Pepper, Hamilton & Scheetz 18th & Arch Streets 3000 Two Logan Square Philadelphia, PA 19103-2799 COUNSEL FOR AMICUS-APPELLEES Local Union No. 626, United Brotherhood of Carpenters & Joiners of America Pension Fund, as Plan Sponsor of Carpenters Local No. 626 Pension & Annuity Plan Teamsters Pension Trust Fund of Philadelphia and Vicinity Teamsters Health and Welfare Fund of Philadelphia and Vicinity Carpenters Pension and Annuity Fund of Philadelphia and Vicinity Carpenters Health and Welfare Fund of Philadelphia and Vicinity Steamfitters Local Union No. 420 Pension Fund Steamfitters Local Union No. 420 Welfare Fund

COWEN, Circuit Judge.

Filed July 25, 1997

OPINION OF THE COURT

Appellants appeal from the February 9, 1996, order of the district court granting summary judgment to plaintiff-appellee Joseph R. Walling and a class of persons he represents, and denying appellants' cross motion for summary judgment. Walling v. Brady, 917 F. Supp. 313 (Del. 1996). The district court held that the Board of Trustees ("Trustees") of an ERISA-qualified multi-employer pension fund had abused its discretion when it amended its pension plan to authorize the payment of an additional $100 per month to only 85% of the fund participants rather than the full membership. We will reverse.

I.

The Plumbers and Pipefitters Local Union No. 74 Pension Fund ("Pension Fund") and the Trustees were sued by a class of 54 participants in the Pension Fund, with Walling appointed as the designated class representative. The plaintiffs asserted that the Trustees unlawfully diverted pension funds in violation of 29 U.S.C. Section(s) 1103(c)(1) (1985 and Supp. 1997) and breached their fiduciary duty under 29 U.S.C. Section(s) 1104. The eight individuals serving as trustees of the Pension Fund (four are appointed from the union, four from management) are the same eight people who serve as the trustees of the Plumbers and Pipefitters Local Union No. 74 Welfare Fund ("Welfare Fund"). The management representatives to the boards of trustees are appointed by the Delaware Mechanical Contractors' Association, Inc., which represents the multiple employers who support the Pension Fund and the Welfare Fund.

The Pension Fund is a defined-benefit plan. It does not have a "finite asset pool" and is able to incur unfunded liabilities. The employers and the Pension Fund jointly share liability for the fund's obligations. The provisions of the Pension Fund give the Trustees, collectively as plan administrator, wide latitude to

[d]ecide all questions relating to the interpretation of the Trust Agreement and Plan. The exercise of discretion or determination of questions arising in the administration, interpretation and application of the Trust Agreement or Plan shall be final and binding except as otherwise provided by law.

Pension Plan Article V, App. at 349-50. The plan administrator also may "[a]mend, alter or otherwise change the pension plan in any way not inconsistent with applicable laws or regulations of ...


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