United States Court of Appeals, District of Columbia Circuit
K. Wendell Lewis, et al., Appellees
Pension Benefit Guaranty Corporation, Appellant
November 16, 2017
Reissued December 21, 2018
from the United States District Court for the District of
Columbia (No. 1:15-cv-01328)
Charles L. Finke, Deputy Chief Counsel, pro hac vice, argued
the cause for appellant. With him on the briefs were Judith
R. Starr, General Counsel, Kenneth J. Cooper, Assistant
General Counsel, Paula J. Connelly, Assistant Chief Counsel,
and Mark R. Snyder, Attorney.
Anthony F. Shelley argued the cause for appellees. With him
on the brief were Timothy P. O'Toole and Michael N.
Before: Griffith and Pillard, Circuit Judges, and Williams,
Senior Circuit Judge.
Griffith, Circuit Judge.
interlocutory appeal, we reverse the district court's
decision allowing participants in a pension plan to seek
recovery of an increase in the value of plan assets that took
place after the plan had been terminated.
2005, Delta Airlines, Inc. ("Delta") filed for
bankruptcy and stopped contributing to the pension plan it
sponsored for its pilots. That plan was called the Delta
Pilots Retirement Plan (the "Delta Plan"). The
following year, Delta and the Pension Benefit Guaranty
Corporation (the "Corporation") agreed to terminate
the Delta Plan because it had insufficient assets to support
the benefit payments it promised to the pilots.
IV of the Employee Retirement Income Security Act (ERISA), 29
U.S.C. §§ 1301-1461, created the Corporation
"to ensure that employees and their beneficiaries would
not be completely deprived of anticipated retirement benefits
by the termination of pension plans before sufficient funds
have been accumulated in the plans." PBGC v. LTV
Corp., 496 U.S. 633, 637 (1990) (internal quotation
marks omitted). To that end, the Corporation collects
premiums from plan sponsors like Delta and guarantees certain
benefits to plan participants even if a plan terminates
without enough money to pay its ongoing obligations.
See 29 U.S.C. §§ 1306-1307, 1322, 1361;
LTV Corp., 496 U.S. at 636-38; Davis v.
PBGC ("Davis II"), 734 F.3d 1161,
1164-65 (D.C. Cir. 2013). Importantly, guaranteed benefits
are subject to limitations outlined in Title IV. See
29 U.S.C. §§ 1322(b), 1361; LTV Corp., 496
U.S. at 638.
plan terminates without enough funding to provide even the
guaranteed benefits established by Title IV, a statutory
trustee collects the plan's remaining assets and begins
making promised payments according to a list of statutory
priorities. See 29 U.S.C. §§
1341(c)(iii)(B)(3), 1342(b)-(d), 1344; 29 C.F.R. pt. 4044.
The Corporation then provides additional money from its own
funds to make up the difference between those payments and
the guaranteed benefits. See 29 U.S.C. § 1322;
29 C.F.R. pt. 4022; LTV Corp., 496 U.S. at 637-38;
Davis II, 734 F.3d at 1164-65. Although not
required, the Corporation is almost always appointed as the
statutory trustee who administers terminated plans, assuming
this responsibility in addition to its role as guarantor.
See Boivin v. U.S. Airways, Inc., 446 F.3d 148, 150
(D.C. Cir. 2006). When Delta and the Corporation agreed to
terminate the Delta Plan, they agreed the Corporation would
become the statutory trustee.
Corporation determined the Delta Plan had a deficit of over
$2.5 billion in unfunded benefits when it terminated, almost
$800 million of which were guaranteed under Title IV.
Actuarial Case Memo for Delta Pilots Retirement Plan (Mar.
24, 2010), J.A. 201-03. Based on this information, the
Corporation began paying estimated post-termination benefits
to the pilots. It took six years, however, to finish making
final benefit determinations. Administrative appeals filed by
the pilots to challenge their benefit determinations
concluded the following year, in 2013. See 29 C.F.R.
pt. 4003 (explaining the process for determining
post-termination benefits); Davis v. PBGC
("Davis I"), 571 F.3d 1288, 1291 (D.C.
Cir. 2009) (same); Boivin, 446 F.3d at 151 (same).
If the Corporation found that participants were entitled to
larger benefit payments than they were ...