In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 03-4023 & 04-1375
RICHARD HERMAN, DANIEL PAULE,
LARRY ARWOOD, et al.,
Plaintiffs-Appellants,
Cross-Appellees,
v.
CENTRAL STATES, SOUTHEAST
AND SOUTHWEST AREAS
PENSION FUND, FRED GEGARE,
JERRY YOUNGER, et al.,
Defendants-Appellees,
Cross-Appellants.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 03 C 1010—Suzanne B. Conlon, Judge.
____________
ARGUED APRIL 6, 2005—DECIDED SEPTEMBER 8, 2005
____________
Before BAUER, RIPPLE and WOOD, Circuit Judges.
RIPPLE, Circuit Judge. Richard Herman, Daniel Paule,
Larry Arwood, Dennis Helvey, William Rose, Michael
Krucker, Larry Whitmyer and William Bohan (the “plain-
tiffs”) brought this action against the Central States South-
east and Southwest Areas Pension Fund (the “Pension
2 Nos. 03-4023 & 04-1375
Fund”) and several trustees of the Pension Fund (the
“Trustees”) for violations of the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001
et seq. They believe that their pension payments were
reduced in a manner that violates the anti-cutback provi-
sions of the statute. The district court granted the defen-
dants’ motion for summary judgment, but denied the
defendants’ motion for attorneys’ fees. See 29 U.S.C.
§ 1132(g)(1). The plaintiffs appeal the district court’s
grant of summary judgment, and the defendants cross-
appeal the denial of attorneys’ fees. For the reasons set forth
in the following opinion, we affirm the district court in all
respects.
I
BACKGROUND
A. Facts
The Pension Fund is a multiemployer pension plan within
the meaning of ERISA. The Trustees have discretionary and
final authority with respect to the administration of the
Pension Fund and the construction of its terms.
This case involves the application of the anti-cutback
provisions of ERISA to certain provisions of the plan
governing the Pension Fund that deal with prohibited
unemployment. The plaintiffs are participants of the plan
who believe that their pensions were reduced by application
of the reemployment provisions of the plan in a manner that
violates the anti-cutback provisions. At the outset, therefore,
we shall set forth the provisions involved.
On March 13, 2002, the Trustees amended the terms of the
plan (the “March 2002 amendments”). These amendments
became effective on July 1, 2002. For ease of reference, we
Nos. 03-4023 & 04-1375 3
shall refer to the plan as it existed before the March 2002
amendments as the “Old Pension Plan” and to the plan as
modified by the March 2002 amendments as the “New
Pension Plan.”
1. Prohibited Reemployment
At all relevant times, the plan has prohibited pensioners
from working in prohibited reemployment. The plan defines
“Prohibited Reemployment” as:
(1) Employment in any position, including a manage-
rial or supervisory position, by a Contributing
Employer . . .; or
(2) Employment by an employer, other than a govern-
mental agency, in any position covered by a Team-
ster Contract between that employer and any affili-
ate of the International Brotherhood of Teamsters;
or
(3) Employment in any position, including a manage-
rial or supervisory position and including self-
employment, but not including government em-
ployment, either in the same industry in which
the Participant or Pensioner earned any Contribu-
tory Service Credit while covered by the Pension
Fund, or in any other industry if the Participant or
Pensioner is in the same job classification as are
other Participants then employed by a Contributing
Employer located within the same standard metro-
politan statistical area [(“SMA”)].
4 Nos. 03-4023 & 04-1375
1
R.68, Ex.D at 58-59. The New Pension Plan employs the
term “Teamster Industry Reemployment,” R.68, Ex.H at 65,
to cover the same activities that were termed “Prohibited
Reemployment” under the Old Pension Plan, R.68, Ex.D
at 58-59.
2. Reimbursement of Benefits Paid During
Prohibited Reemployment
a. Under the Old Pension Plan
Under the Old Pension Plan, pensioners were penalized
for working in prohibited reemployment. The following
provisions governed:
(1) Section 4.13(a) of the Old Pension Plan provided: “A
Pensioner shall have his benefit payments suspended for
any calendar month in which he works in ‘Prohibited
Reemployment’ . . . . A Pensioner shall permanently lose his
rights to any benefit payments which are suspended
because of his work in Prohibited Reemployment.” Id. at 57.
(2) Section 4.13(c) of the Old Pension Plan required a
1
The March 2002 amendments implemented some changes to
the definition of prohibited reemployment; for instance, the
requirement that a prohibited Teamster-covered job classification
had to be in the same statistical metropolitan area was removed,
and the government employment exception to prohibited
reemployment was eliminated. The changes affected participants
who retired on or after July 1, 2002. However, following our
decision in Heinz v. Central Laborers’ Pension Fund, 303 F.3d 802
(7th Cir. 2002), aff’d, 541 U.S. 739 (2004), the Trustees in January
2003 retroactively reinstated the prior definition of prohibited
reemployment found in the Old Pension Plan. Therefore, the
definition of prohibited reemployment has been the same at all
times relevant to this action.
Nos. 03-4023 & 04-1375 5
pensioner to notify the Pension Fund if he returned to work
in any capacity and to inform the Pension Fund of informa-
tion related to the pensioner’s work (including the pen-
sioner’s specific job duties) so that the Pension Fund could
determine whether the reemployment constituted prohib-
ited reemployment. Furthermore, a pensioner could be
requested “to certify, in writing, that he has not been
working in any capacity which would result in the suspen-
sion of his benefit payments.” Id. at 58. If a pensioner failed
to furnish information related to his work, Old Pension Plan
Section 4.13(c) also provided for benefits to be suspended
until the required information was supplied.
(3) Under Section 4.13(m) of the Old Pension Plan, “[a]
Pensioner who fail[ed] to notify the Pension Fund that he
has returned to work in Prohibited Reemployment shall
be obligated to reimburse the Pension Fund for all retire-
ment pension benefit payments he received for any
month, or part of a month, in which he was reemployed.”
Id. at 60.
(4) Old Pension Plan Section 7.05(a) made any misrepre-
sentation in a claim for pension or other benefits grounds
for recovery by the Pension Fund of any benefit payments
made in reliance on the misrepresentation. Section 7.05(b) of
the Old Pension Plan gave the Board the right to recover
excess payments that had been made “due to a mistake.” Id.
at 69.
(5) Section 4.13(e) of the Old Pension Plan permitted a
pensioner to request from the Pension Fund “a determina-
tion on whether the work he is contemplating shall result in
the suspension of his benefit payments.” Id. at 58.
6 Nos. 03-4023 & 04-1375
b. Under the New Pension Plan
The following provisions govern the same area under the
New Pension Plan:
(1) Section 4.13(a) of the New Pension Plan provides:
The Pension Fund shall permanently suspend all
Periodic Benefit Payments of a Pensioner . . . during
Periods of his Reemployment to the following extent:
....
(2) all Periodic Benefit Payments to a Pensioner shall
be permanently suspended during all periods of
[prohibited reemployment] . . . .
R.68, Ex.H at 62.
(2) Section 4.13(b) of the New Pension Plan requires
Pension Fund participants, “as a prerequisite to any receipt
of Periodic Benefit Payments, to keep the Pension Fund fully
and promptly informed of any employment . . . in which he
was or is engaged during any time period for which he
claims or has received Periodic Benefit Payments.” Id. at 63.
New Pension Plan Section 4.13(b) also notes that the Pension
Fund could require pensioners to provide information about
past and present employment and could require signed
responses from pensioners regarding whether a pensioner
was engaged in prohibited reemployment.
Under the New Pension Plan, failure to comply with these
disclosure obligations would result in temporary suspen-
sion of benefits. In such a case, however, the New Pension
Plan states that, upon the pensioner’s compliance with the
disclosure obligations, “his Periodic Benefit Payments will
be resumed (including full restoration of all payments that
had been temporarily suspended) unless there is then in
effect a permanent suspension of his Periodic Benefit
Payments . . . .” Id.
Nos. 03-4023 & 04-1375 7
On the other hand, with respect to the “permanent
suspension” just mentioned, the New Pension Plan provides
that:
[a]ny failure . . . to comply with any disclosure obliga-
tion described in [Section 4.13(b)], or with any related
disclosure request by the Pension Fund, shall, if the
Pensioner has been or is engaged in any Reemployment,
create a rebuttable presumption of an existing factual
basis . . . for a permanent suspension of the Pensioner’s
Periodic Benefit Payments during all periods of his
Reemployment, provided that such presumption will
become inoperative if and to the extent the presumption
is rebutted by clear and convincing evidence or is
otherwise shown to be unreasonable under the circum-
stances. . . . Each such permanent suspension of the
Periodic Benefit Payments shall continue in effect and
until the Pension Fund has received what it determines
to be both notice and clear and convincing evidence that
the basis for the permanent suspension is no longer
applicable, at which time the suspension will be ended
and the Periodic Benefit Payments will be resumed on
a prospective basis only (without any restoration of
payments for the period prior to that end of the suspen-
sion), subject to possible offset pursuant to [Section
4.13(e)].
Id. at 62-63.
(3) Section 4.13(e) of the New Pension Plan states that
“[t]he Pension Fund is entitled to restitution of all Periodic
Benefit Payments that are distributed to a Pensioner . . .
for any period . . . for which the Pensioner . . . was not
entitled to receive such payments.” Id. at 64. Section 4.13(e)
allows the Pension Fund to obtain restitution by making an
“offset or deduction” consisting of one hundred percent of the
gross amount of the first three benefit payments following the end
8 Nos. 03-4023 & 04-1375
of a suspension, and twenty five percent of the gross amount of
each benefit payment thereafter. Id.
According to New Pension Plan Section 4.13(f), a pen-
sioner can “submit a written request to the Pension Fund at
any time for a determination whether or not specific
employment” constitutes prohibited reemployment. Id.
B. District Court Proceedings
The plaintiffs filed this action on February 11, 2003, based
on the March 2002 amendments to the plan and on the
termination of individual plaintiffs’ benefits (claims which
we discuss in further detail below). The plaintiffs’ first
amended complaint advanced seven counts. Against
the Trustees, the plaintiffs alleged breach of fiduciary
duty; violation of ERISA’s anti-cutback rule, see 29 U.S.C. §
1054(g)(1); and violation of ERISA’s offset rules, see 29
C.F.R. § 2530.203-3(b)(2)-(3). Against the Pension Fund,
the plaintiffs sought injunctive and declaratory relief
based on the plaintiffs’ individual benefit determinations,
see 29 U.S.C. §§ 1132(a)(1)(b), 1132(a)(3), and sought dam-
ages for violation of ERISA notice provisions, see id.
§ 1054(h)(1)-(2), and violation of ERISA claims procedures,
see 29 C.F.R. §§ 2530.203-3(b)(6), 2530.503-1(b). The first
amended complaint also alleged that the Trustees interfered
with the plaintiffs’ rights protected under ERISA in order to
improve its financial condition, see 29 U.S.C. § 1140; the
district court dismissed this count with prejudice before the
case reached the summary judgment stage.
The Pension Fund moved for summary judgment, and the
district court granted its motion. The district court deemed
the claims related to ERISA’s offset rules and claims proce-
dures to have been abandoned, on the ground that the
plaintiffs failed to address either claim in their response
Nos. 03-4023 & 04-1375 9
brief. See Palmer v. Marion County, 327 F.3d 588, 597-98 (7th
Cir. 2002).
The district court then turned to the plaintiffs’ claims,
based on the March 2002 amendments, concerning the
Pension Fund’s ability to obtain reimbursement of benefits
paid to a pensioner while he was engaged in prohibited
2
reemployment. The court determined that the amendment
was entirely consistent with earlier summary plan descrip-
tions (“SPDs”) allowing for reimbursement from future
benefits. Therefore, the court reasoned, the anti-cutback rule
was not implicated. Furthermore, because the March 2002
amendments did not violate the anti-cutback rule, the court
also determined that the plaintiffs’ claim for breach of
fiduciary duty, as well as their claim that ERISA’s notice
requirements had been violated, failed as well.
The court next considered the claim that individual
plaintiffs’ benefits wrongfully had been denied. The court
reviewed the denial of benefits according to an arbitrary
and capricious standard because the plan governing the
Pension Fund gave discretionary authority to the adminis-
trator in making benefit determinations. The court deter-
mined that none of the benefit denials had been arbitrary or
2
With respect to the plaintiffs’ claims based on the March 2002
amendments as they related to the definition of prohibited
reemployment (amendments that were nullified when the
definition of prohibited reemployment contained in the Old
Pension Plan retroactively was reinstated), the district court
determined that all the plaintiffs except one lacked standing to
mount a challenge to the amendments. The court further found
that the sole plaintiff with standing had failed to exhaust
available administrative remedies. Therefore, the court did not
discuss further the claims based on the repealed amendments
to the definition of prohibited reemployment.
10 Nos. 03-4023 & 04-1375
capricious because there was no evidence that the defen-
dants’ stated reasons for denying benefits were false and no
evidence that the trustees had interpreted plan terms in
contravention of the plan’s plain meaning.
After the district court’s summary judgment decision, the
Trustees and the Pension Fund sought an award of attor-
neys’ fees. See 29 U.S.C. § 1132(g)(1). The district court
denied the motion. The district court determined that the
plaintiffs had brought their claims in good faith. The court
refused to infer bad faith from the defendants’ allegations
that the plaintiffs’ claims had been brought for political
reasons because, although the litigation was contentious, the
plaintiffs made consistent arguments throughout the case
and “did not stubbornly attempt to relitigate failed claims.”
R.109 at 1.
Furthermore, the court concluded that the plaintiffs’ suit
was “neither frivolous nor vexatious”; rather, it was sub-
stantially justified. Id. The court reasoned that the plaintiffs’
“lack of success does not suggest [their] claims had no basis
in law or fact.” Id. Indeed, in the court’s view, the challenge
to the amended reimbursement provisions was based on a
plausible construction of ERISA.
II
DISCUSSION
A. Claims Based on the March 2002 Amendments
1. Standard of Review
We review de novo the district court’s grant of summary
judgment. Ruttenberg v. United States Life Ins. Co., 413 F.3d
652, 658-59 (7th Cir. 2005).
Nos. 03-4023 & 04-1375 11
2. ERISA’s Anti-Cutback Rule
According to ERISA’s so-called “anti-cutback rule,”
“[p]lan amendments are permitted . . . , but an amendment
may not decrease benefits that have already accrued.” Heinz
v. Cent. Laborers’ Pension Fund, 303 F.3d 802, 804 (7th Cir.
2002). The rule derives from 29 U.S.C. § 1054(g)(1), which
provides that “[t]he accrued benefit of a participant under
a plan may not be decreased by an amendment of the plan.”
“Accrued benefit” means, “in the case of a defined benefit
plan, the individual’s accrued benefit determined under the
plan and . . . expressed in the form of an annual benefit
commencing at normal retirement age.” Id. § 1002(23).
Furthermore, the statute provides that “a plan amendment
which has the effect of . . . eliminating or reducing an early
retirement benefit or a retirement-type subsidy . . . with
respect to benefits attributable to service before the amend-
ment shall be treated as reducing accrued benefits.” Id. §
1054(g)(2); see also Ahng v. Allsteel, Inc., 96 F.3d 1033, 1034
(7th Cir. 1996) (determining that early retirement benefits
are “accrued benefits” within the meaning of ERISA).
The plaintiffs argue that the March 2002 amendments
violate the anti-cutback rule because Section 4.13(e) of the
New Pension Plan allows the Pension Fund to recover a
greater amount of benefits paid in error than was allowed
under Section 4.13(a) of the Old Pension Plan. Specifically,
they argue that their accrued benefits are being reduced
because the offset allowed by New Pension Plan Section
4.13(e) makes it more difficult to receive the payments. The
Pension Fund, on the other hand, contends that the Old
Pension Plan permitted precisely the same recovery of
wrongfully paid benefits that is allowed under the New
Pension Plan.
In our view, the March 2002 amendments did not change
a participant’s entitlement to benefits under the plan. Both
12 Nos. 03-4023 & 04-1375
the Old Pension Plan and the New Pension Plan suspend a
pensioner’s benefits in any month in which he engages
in prohibited reemployment. As well, both Old Pension
Plan Section 4.13(c) and New Pension Plan Section 4.13(b)
allow the Pension Fund to suspend benefits payments when
a pensioner fails to certify that he has not been working in
prohibited reemployment or when he fails to provide
requested information about his employment activities.
Moreover, both before and after the March 2002 amend-
ments, the plan permitted the Pension Fund to recover any
benefits that had been paid in error. The result—that the
Pension Fund can recover benefits paid in error—is the
same despite the fact that the Old Pension Plan simply
stated that the Trustees had “the right to recover” “benefit
payments exceeding the amount determined by the provi-
sions of [the] Pension Plan” that were “made . . . due to
mistake,” R.68, Ex.D at 69, whereas the New Pension Plan
authorizes “restitution” of payments that the pensioner
“was not entitled to receive,” according to the schedule set
forth in Section 4.13(e), R.68, Ex.H at 64. The March 2002
amendments do not make ineligible for benefits any person
who would have been eligible prior to the changes. The
amendments simply prevent a pensioner from receiving a
windfall to which he has no right.
This reading is consistent with pre-2002 Pension Fund
SPDs that emphasized recoupment as a possibility if
benefits are paid in error. For instance, an SPD issued in
2000 and provided to participants in the Pension Fund
stated: “If you are working in Prohibited Reemployment
your pension benefits will be suspended until you stop
working. Additionally, your future benefits may be reduced
to reimburse the Plan for any benefits improperly paid to
you while you worked in Prohibited Reemployment.” R.98,
Ex.C at 28 (emphasis in original). In light of all the evidence
Nos. 03-4023 & 04-1375 13
which we have reviewed, we conclude that the March 2002
amendments, as they relate to recoupment of wrongfully
paid benefits, violate neither the plain wording nor the
3
purpose of the anti-cutback rule.
B. The Individual Plaintiffs’ Claims
Four of the plaintiffs—Mr. Helvey, Mr. Paule, Mr.
Arwood and Mr. Rose, all retirees—have had their bene-
fits terminated and seek to recover the benefits lost. We
shall review the circumstances surrounding the termination
of each man’s benefits in greater detail below.
1. Standard of Review
If, as was the case here, the administrator of a pension
fund is granted discretion in making benefit determinations,
3
ERISA provides that a pension plan “may not be amended so
as to provide for a significant reduction in the rate of future
benefit accrual unless . . . the plan administrator provides . . .
notice.” 29 U.S.C. § 1054(h)(1). The notice must meet the follow-
ing requirements: It must “be written in a manner calculated to
be understood by the average plan participant and shall provide
sufficient information . . . to allow applicable individuals to
understand the effect of the plan amendment.” Id. § 1054(h)(2).
The plaintiffs submit that the notice provided to them of the
March 2002 amendments—in this case, several pages in a
newsletter that was distributed by bulk mail—was not sufficient
to satisfy ERISA’s requirements.
Because we hold that the March 2002 amendments did not
reduce participants’ benefits, let alone work “a significant
reduction in the rate of future benefit accrual,” id. § 1054(h)(1),
the notice requirements laid out in § 1054(h)(2) are not implicated
in this case, and we need not reach this question.
14 Nos. 03-4023 & 04-1375
then a reviewing court is limited to asking whether the
decision to deny benefits was arbitrary or capricious. See
Fenster v. Tepfer & Spitz, Ltd., 301 F.3d 851, 856 (7th Cir.
2002). Under the arbitrary and capricious standard, we
will overturn a plan administrator’s decision “only . . . if it is
downright unreasonable.” Carr v. Gates Health Care Plan, 195
F.3d 292, 294 (7th Cir. 1999) (internal quotation omitted),
cert. denied, 529 U.S. 1068 (2000). That is, this court will not
substitute the conclusion it would have reached for the
decision of the administrator, as long as “the administrator
makes an informed judgment and articulates an explanation
for it that is satisfactory in light of the relevant facts.” Id.
This court has noted that “[r]eview under the deferential
arbitrary and capricious standard is not a rubber stamp,” so
that, “[e]ven under the deferential review we will not
uphold a termination where there is an absence of reasoning
in the record to support it.” Hackett v. Xerox Corp. Long-Term
Disab. Income, 315 F.3d 771, 774-75 (7th Cir. 2003). A satisfac-
tory explanation is one that gives “the specific reasons for
the denial,” but it need not explain “the reasoning behind
the reasons, . . . [that is,] the interpretive process that
generated the reason for the denial.” Gallo v. Amoco Corp.,
102 F.3d 918, 922 (7th Cir. 1996) (internal quotation omit-
ted), cert. denied, 521 U.S. 1129 (1997). The administrator of
a pension fund does not act arbitrarily and capriciously
when he changes a previous decision because the facts
known to the plan have changed; “[p]ut simply, a reversal
based on new information is not a non-uniform interpreta-
tion.” Militello v. Cent. States, Se. & Sw. Areas Pension Fund,
360 F.3d 681, 690 (7th Cir.), cert. denied, 125 S. Ct. 106 (2004).
Nos. 03-4023 & 04-1375 15
2. The Individual Plaintiffs
The plaintiffs challenge the denial of benefits to three
4
individuals: Mr. Helvey, Mr. Paule and Mr. Rose. Before
discussing the circumstances of each individual’s denial
of benefits, we briefly shall review the process by which
the Pension Fund determines that an individual is engaged
in prohibited reemployment.
Under both the Old Pension Plan and the New Pension
Plan, pensioners are required to notify the Pension Fund if
they become employed in any capacity. The Pension Fund
also monitors pensioners’ reemployment through its own
efforts. Prior to 2002, the Pension Fund sent what it calls
“standard screening cards,” R.68 at 9, to randomly selected
pensioners to determine whether the pensioner was
reemployed. However, beginning in 2002, the Pension Fund
began sending more detailed “questionnaires,” id., to
pensioners concerning reemployment. Mr. Herman, Mr.
Paule and Mr. Rose all suffered a termination of their
benefits based on their responses to the Pension Fund’s 2002
questionnaires.
a. Mr. Helvey and Mr. Paule
Mr. Helvey had worked as a dockworker when he earned
credit with the Pension Fund, and he became reemployed
with a building supply company. Based on Mr. Helvey’s
responses to a March 2002 questionnaire, the Pension Fund
notified him that he was engaged in prohibited reemploy-
4
In the section of their brief concerning the individual benefit
determinations, the plaintiffs also mention Mr. Arwood. How-
ever, neither party directs any arguments towards him. There-
fore, we shall not discuss him.
16 Nos. 03-4023 & 04-1375
ment because he was in the same job classification in
which other participants were employed by a contributing
employer in the same SMA. R.68, Ex.M at 6. Ultimately, Mr.
Helvey was given approval from the Pension Fund to
continue to work for the company with whom he had
sought reemployment, as long as he did not work with
stocking, repairing, or driving; he was limited to janitorial
duties.
Mr. Paule worked as a driver for a plumbing supply
company when he earned credit with the Pension Fund, and
he later became reemployed with a plumbing company. At
the plumbing company, he did “building maintenance,
inventory control, lawn and garden, and custodian/janitor
duties.” R.68, Ex.K at 1. Based on Mr. Paule’s responses to
a February 2002 questionnaire, the Pension Fund notified
him that he was engaged in prohibited reemployment
because he was working “in the same industry in which Mr.
Paule . . . earned any Contributory Service Credit.” Id. at 4
(alterations in original; internal quotations omitted).
The plaintiffs allege that it was inconsistent for the
Pension Fund to permit Mr. Helvey to continue working as
a janitor, while Mr. Paule, who also did work involving
custodial or janitorial duties, was deemed to be in prohib-
ited reemployment, when the two men worked in the same
SMA. The Trustees contend that the plaintiffs’ arguments
obscure the key differences between the terminations of
benefits for Mr. Helvey and Mr. Paule. Mr. Paule’s benefits
were terminated for prohibited reemployment because he
was working in the same industry in which he had worked
when he earned credit with the Pension Fund; Mr. Helvey,
on the other hand, had been subject to termination of
benefits for working in the same job classification as other
plan participants in the same SMA.
Nos. 03-4023 & 04-1375 17
We must conclude that the Pension Fund has given a
specific reason for its denial, and one that is supported
reasonably by the evidence. See Gallo, 102 F.3d at 922.
b. Mr. Rose
In 2000, Mr. Rose notified the Pension Fund that he was
reemployed in building maintenance. Based on this repre-
sentation, the Pension Fund notified Mr. Rose that his
reemployment was not prohibited. The Pension Fund also
received one screening card from Mr. Rose indicating
that his job was in building maintenance. However, in April
2002, Mr. Rose filled out a questionnaire providing specific
details about his job duties and indicating that he was
working in plant maintenance, not building maintenance.
According to the information Mr. Rose provided, his job
duties included “service, repair and upkeep of . . . produc-
tion equipment, . . . participat[ion] in installation of all
equipment . . . , . . . upkeep and maintenance of the building
and the grounds, and . . . maint[enance of] inventories.”
R.68, Ex.J at 2. Based on Mr. Rose’s responses to the ques-
tionnaire, the Pension Fund determined that Mr. Rose was
engaged in prohibited reemployment because “plant
maintenance” is a job classification in which other partici-
pants were employed by a contributing employer in the
same SMA. See id. at 3 (noting that “Mr. Rose is working in
the same job classification as other Participants employed
by a Contributing Employer . . . in the same [SMA],” and
identifying collective bargaining agreement governing those
jobs).
Mr. Rose contends that the difference between “plant
maintenance” and “building maintenance” is ambiguous.
The Trustees contend, simply as a matter of fact, that “plant
maintenance” is covered by a participating employer, while
18 Nos. 03-4023 & 04-1375
“building maintenance” is not. They claim that Mr. Rose’s
failure to disclose that he worked in “plant maintenance” is
a misrepresentation and grounds for denial of benefit.
It is within the bounds of the arbitrary and capricious
standard for the Pension Fund to have changed from a
determination that Mr. Rose was permissibly reemployed in
“building maintenance,” to the determination that he was
engaged in prohibited reemployment in “plant mainte-
nance,” based on the more complete information provided
in response to the May 2002 questionnaire. See Militello, 360
F.3d at 690. Furthermore, the fact that other participants
were employed by a contributing employer in the same
SMA is a specific and reasonable ground on which to base
the denial of benefits. The Pension Fund need not explain
the reasoning behind their reason for denying Mr. Rose’s
benefits. See Gallo, 102 F.3d at 922. To the extent that the
Pension Fund seeks to recoup benefits paid to Mr. Rose
while he was engaged in prohibited reemployment, we note
that the Pension Fund consistently has maintained its right
to recover payments made based on a participant’s misrep-
resentation. See R.68, Ex.D at 69.
C. Violation of Fiduciary Duty
The plaintiffs submit, based both on the March 2002
amendments to the Plan and on the individual benefit
determinations just discussed, that the Trustees failed to
fulfill their duties as fiduciaries. “ERISA requires a trustee
or other fiduciary to administer a plan ‘solely in the interest
of the participants and beneficiaries’ of the plan.” Frahm
v. Equitable Life Assur. Soc. of the United States, 137 F.3d
955, 958 (7th Cir.) (quoting 29 U.S.C. § 1104(a)(1)), cert.
denied, 525 U.S. 817 (1998). The fiduciary duty of a plan
administrator “is to implement faithfully the provisions of
Nos. 03-4023 & 04-1375 19
the plan as written.” White v. Sundstrand Corp., 256 F.3d 580,
583 (7th Cir.), cert. denied, 534 U.S. 1066 (2001). This duty
also implicates “[c]onveying information about the likely
future of plan benefits, thereby permitting beneficiaries to
make an informed choice about continued participation.”
Varity Corp. v. Howe, 516 U.S. 489, 502 (1996). Cf. Frahm, 137
F.3d at 960 (“[C]laims that one or another bit of advice was
misleading do not violate [29 U.S.C. § 1104(a)(1)].”).
The plaintiffs submit that the Trustees violated their
fiduciary duties by failing to disclose key details about the
Plan, by leaving important terms undefined and by inter-
preting those terms inconsistently. They contend that
they were met with “a bewildering and forbidding
thicket” when they attempted to ascertain whether they
could enter re-employment. Appellants’ Br. at 38.
No breach of fiduciary duty occurred in this case. We
have just explained that the March 2002 amendments did
not violate ERISA’s anti-cutback or notice rules and that the
individual benefit determinations discussed above were not
arbitrary and capricious. Absent in this case is the sort of
“deliberate misleading” to which we referred, in Sprague v.
General Motors Corp., 133 F.3d 388, 405 (7th Cir.), cert. denied,
524 U.S. 923 (1998), as distinguishing a breach of fiduciary
duty. Thus, we can see no basis on which to conclude that
the Trustees breached their fiduciary duty.
We also note that the Supreme Court has cautioned
against using the action for breach of fiduciary duty under
ERISA to litigate “ordinary benefit claims”: “[W]e should
expect that where Congress elsewhere provided adequate
relief for a beneficiary’s injury, there will likely be no need
for further equitable relief, in which case such relief nor-
mally would not be ‘appropriate.’ ” Varity, 516 U.S. at 514-
15.
20 Nos. 03-4023 & 04-1375
D. Attorneys’ Fees
The Pension Fund and the Trustees contend that the
district court erred in denying their motion for attorneys’
fees. We review a district court’s decision to deny attorneys’
fees for an abuse of discretion. See Senese v. Chicago Area Int’l
Bhd. of Teamsters Pension Fund, 237 F.3d 819, 826 (7th Cir.
2001).
ERISA grants the district court discretion to award
attorneys’ fees to either party. See 29 U.S.C. § 1132(g)(1);
see also Senese, 237 F.3d at 826. This court has noted that
“[t]here is a ‘modest presumption’ in favor of awarding fees
to the prevailing party, but that presumption may
be rebutted.” Senese, 237 F.3d at 826 (quoting Harris Trust &
Sav. Bank v. Provident Life & Accident Ins. Co., 57 F.3d 608,
617 (7th Cir. 1995)).
This court has recognized two tests for whether attorneys’
fees should be awarded or denied. Under the first test,
which the district court applied in this case, “[a]n award of
fees to a successful defendant may be denied if the plain-
tiff’s position was both ‘substantially justified’—meaning
something more than non-frivolous, but something less than
meritorious—and taken in good faith, or if special circum-
stances make an award unjust.” Id. (quoting Harris, 57 F.3d
at 616-17 & n.4).
Under the second test, the court looks to five factors:
(1) the degree of the offending parties’ culpability or
bad faith; (2) the degree of the ability of the offending
parties to satisfy personally an award of attorneys’ fees;
(3) whether or not an award of attorneys’ fees would
deter other persons acting under similar circumstances;
(4) the amount of benefit conferred on members of the
pension plan as a whole; and (5) the relative merits of
the parties’ positions.
Nos. 03-4023 & 04-1375 21
Brewer v. Protexall, Inc., 50 F.3d 453, 458 (7th Cir. 1995)
(internal quotation omitted). “[B]oth tests . . . ask the same
question: was the losing party’s position substantially
justified and taken in good faith, or was that party simply
out to harass its opponent?” Quinn v. Blue Cross & Blue
Shield Ass’n, 161 F.3d 472, 478 (7th Cir. 1998) (internal
quotation omitted).
In addressing the motion for attorneys’ fees brought by
the Trustees and the Pension Fund, the district court
followed exactly that test; it looked at whether the plaintiffs’
position was substantially justified and whether it
was taken in good faith. The Trustees and the Pension Fund,
however, contend that the district court abused its discre-
tion by denying fees. The crux of the defendants’ position is
that the plaintiffs were motivated by political considerations
in bringing and pursuing the present case.
We shall defer to the district court’s exercise of its discre-
tion regarding attorneys’ fees. The district court had the
benefit of witnessing the development of the litigation and
the interaction between the parties, and it concluded that
the discovery disputes in the case did not evidence that the
lawsuit was brought merely as politically motivated
harassment. Furthermore, the district court concluded that
the lawsuit sought “resolution of a genuine dispute” and
had a reasonable basis in law and fact. R.109 at 1. That
conclusion was within the court’s discretion. Therefore, we
shall affirm the district court’s decision to deny attorneys’
fees.
Conclusion
For the foregoing reasons, we affirm the judgment of
the district court.
AFFIRMED
22 Nos. 03-4023 & 04-1375
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—9-8-05