Davis v. Pension Benefit Guaranty Corp.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 10, 2013 Decided November 1, 2013

No. 12-5274

THOMAS G. DAVIS, ET AL.,

APPELLANTS

v.

PENSION BENEFIT GUARANTY CORPORATION,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 1:08-cv-01064)

Anthony F. Shelley argued the cause for appellants. With

him on the briefs were Timothy P. O’Toole and Michael N.

Khalil.

James J. Armbruster, Assistant Chief Counsel, Pension

Benefit Guaranty Corporation, argued the cause for appellee.

With him on the briefs were Judith R. Starr, General Counsel,

Kenneth J. Cooper, Assistant General Counsel, Kimberly J.

Duplechain, Attorney, Israel Goldowitz, Chief Counsel, Charles

L. Finke, Deputy Chief Counsel, Paula J. Connelly and Garth D.

Wilson, Assistant Chief Counsel, and Joseph Krettek, Attorney.

Before: GARLAND, Chief Judge, ROGERS, Circuit Judge,

and WILLIAMS, Senior Circuit Judge.

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Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Appellants are approximately 1,700

retired U.S. Airways pilots and their beneficiaries (“the Pilots”).

They appeal the grant of summary judgment to the Pension

Benefit Guarantee Corporation (“PBGC”) on their claims

regarding pension benefits payable under the terminated

Retirement Income Plan for U.S. Airways Pilots (“the Plan”).

Of the Pilots’ twelve claims, three claims are not appealed and

four claims that are appealed but were not briefed are forfeited.

For the following reasons, upon de novo review, see Stephens v.

U.S. Airways Grp., Inc., 644 F.3d 437, 439 (D.C. Cir. 2011), we

affirm as to the five remaining claims.

I.

We begin with an overview of the statutory and regulatory

scheme and then summarize the factual background and

procedural history before turning, in Part II, to the merits of the

Pilots’ five claims.

A.

Congress enacted the Employee Retirement Income

Security Act of 1974 (“ERISA”) to establish “minimum

standards . . . assuring the equitable character of [employee

benefit] plans and their financial soundness.” Pub. L. No. 93-

406, § 2(a), 88 Stat. 829, 833 (codified at 29 U.S.C. § 1001(a)).

Title IV of ERISA created the PBGC, a “U.S. government

corporation within the Department of Labor that insures private-

sector defined-benefit pension plans.” Boivin v. U.S. Airways,

446 F.3d 148, 150 (D.C. Cir. 2006); 29 U.S.C. § 1302. This

“mandatory Government insurance program . . . protects the

pension benefits” of participants in or beneficiaries of qualified

plans. PBGC v. LTV Corp., 496 U.S. 633, 637 (1990) (“LTV

Corp.”). It does so by guaranteeing a class of “nonforfeitable

3

benefits,” 29 U.S.C. § 1322(a), reimbursing eligible participants

or beneficiaries when a guaranteed plan terminates without

sufficient funds.

If a qualified plan has insufficient assets to satisfy its

pension obligations the employer can terminate the plan

voluntarily or the PBGC can terminate it involuntarily. See LTV

Corp., 496 U.S. at 638; 29 U.S.C. §§ 1341(c), 1342(a). When

termination proceedings have begun, as occurred here, the

PBGC can request that the district court appoint it as trustee of

the plan. See Boivin, 446 F.3d at 150; 29 U.S.C. § 1342(b).

When a district court grants the request, the PBGC remains the

guarantor of the plan, see Boivin, 446 F.3d at 150, and therefore

has two roles: As guarantor, the PBGC is responsible for

covering the gap between the assets of the plan and the amount

guaranteed to the plan’s beneficiaries, see LTV Corp., 496 U.S.

at 637–38; 29 U.S.C. §§ 1301(a)(8), 1322(a). As trustee, the

PBGC administers the plan – i.e., determines who is entitled to

benefits, see 29 U.S.C. § 1342(d), and acts as a fiduciary with

respect to the plan, see id. §§ 1342(d)(3), 1002(21).

The administrator of a terminated plan distributes assets in

accordance with the six tier priority scheme set forth in 29

U.S.C. § 1344. The Pilots’ claims relate to priority category

three, which includes allocations

in the case of benefits payable as an annuity—

(A) in the case of the benefit of a participant or

beneficiary which was in pay status as of the beginning

of the 3-year period ending on the termination date of

the plan, to each such benefit, based on the provisions

of the plan (as in effect during the 5-year period ending

on such date) under which such benefit would be the

least,

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(B) in the case of a participant’s or beneficiary’s

benefit (other than a benefit described in subparagraph

(A)) which would have been in pay status as of the

beginning of such 3-year period if the participant had

retired prior to the beginning of the 3-year period and

if his benefits had commenced (in the normal form of

annuity under the plan) as of the beginning of such

period, to each such benefit based on the provisions of

the plan (as in effect during the 5-year period ending

on such date) under which such benefit would be the

least.

For purposes of subparagraph (A), the lowest benefit in

pay status during a 3-year period shall be considered

the benefit in pay status for such period.

29 U.S.C. § 1344(a)(3). These provisions exclude certain

benefits from priority category three based on whether (1) they

were in pay status (i.e., actually being paid) or could have been

in pay status (if an individual had retired) within three years of

the date of plan termination and (2) the provisions of the plan

creating them were “in effect” within the five-year period prior

to plan termination.

By regulation, 29 C.F.R. § 4044.13, the PBGC has

interpreted the limitations on inclusion in priority category three.

Section § 4044.13(a), “Definition,” provides that “[b]enefit

increases, as defined in [29 C.F.R.] § 4022.2, that were in effect

throughout the 5-year period ending on the termination date,

including automatic benefit increases during that period to the

extent provided in paragraph (b)(5) of this section, shall be

included in determining the priority category 3 benefit.” And

§ 4044.13(b)(5) provides that “automatic increases in the benefit

formula” provided for in “plan provisions” that were “adopted

and effective on or before the first day of the 5-year period

5

ending on the termination date” will be included in priority

category three if the increases were scheduled to occur during

the fourth and fifth years preceding termination. The PBGC

interprets “benefit increases” to include increases in benefits due

to cost-of-living adjustments (“COLAs”) arising out of increases

in the Internal Revenue Code’s § 415(b) dollar limits on annual

benefits, 26 U.S.C. § 415(b), which were incorporated into the

Plan. As such, the PBGC honored such increases if they

occurred in the fourth and fifth years prior to Plan termination

but not those occurring within the three years prior to

termination. The Pilots regard § 4044.13(b)(5) as irrelevant to

the status of the COLAs, which they claim are not benefit

increases but limitation adjustments. Instead they maintain that

the Plan provisions recognized such COLAs more than five

years before termination, and, under ERISA, the fact that the

provision was in place more than five years prior to Plan

termination is enough for the PBGC to honor all § 415(b)

increases during the entire five-year period before termination.

See infra Part II, Claim Two.

Section 4044.13(b), “Assigning benefits,” provides that “a

plan or amendment is ‘in effect’ on the later of the date on

which it is adopted or the date it becomes effective.” 29 C.F.R.

§ 4044.13(b)(6). As discussed in Part II, such a construction

implies that an amendment could be effective before it has been

adopted — e.g., when a benefit payment is made retroactive to

a date prior to the adoption of the amendment that created it.

The Pilots contend that the PBGC Appeals Board decision as to

the effective date of a Plan amendment conflicts with this

regulation. See infra Part II, Claim One.

The PBGC also has promulgated regulations regarding how

it handles benefit determinations. The PBGC makes initial

determinations “with respect to allocation of assets under section

4044 of ERISA [(29 U.S.C. § 1344)].” 29 C.F.R.

6

§ 4003.1(b)(4). They are issued in writing and must “state the

reason for the determination.” Id. § 4003.21. “Any person

aggrieved by an initial determination . . . may file an appeal,” id.

§ 4003.51, to be considered by the PBGC Appeals Board, which

is composed of three PBGC officials, id. § 4003.2. In a written

appeal, appellants can request to appear before the Board and

present witnesses to testify before the Board. Id. § 4003.54.

The Board has discretion to reject such requests. Id.

§ 4003.55(b). A decision issued by the Appeals Board

“constitutes the final agency action by the PBGC with respect to

the determination which was the subject of the appeal.” Id.

§ 4003.59(b).

B.

In 2002, U.S. Airways filed for bankruptcy and requested

that its pilots’ benefits plan be terminated pursuant to ERISA’s

“distress” termination procedures. See 29 U.S.C. § 1341(c).

The Plan terminated on March 31, 2003. The PBGC became

trustee and began making estimated payments to the retired

pilots pending its initial determinations on proper asset

allocation.

The Pilots first brought suit in November 2003, challenging

the PBGC’s calculation of estimated benefits. On appeal, this

court rejected the Pilots’ claims for failure to exhaust

administrative remedies. See Boivin, 446 F.3d at 158–59. Later

the PBGC issued initial determinations, and the Pilots appealed

to the PBGC Appeals Board, which issued the first of several

decisions on February 29, 2008. The Pilots challenged the

PBGC’s final determinations in the district court in June 2008

on the grounds that the PBGC has misapplied ERISA,

misinterpreted the Plan itself, and breached its fiduciary duties

to Plan participants and beneficiaries. The Pilots moved for a

preliminary injunction in August 2008. In September 2008, the

PBGC issued a decision related to some of the Pilots’ disability

7

claims. The district court denied the motion for a preliminary

injunction in December 2008, see Davis v. PBGC, 596 F. Supp.

2d 1, 5 (D.D.C. 2008), and this court affirmed, see Davis v.

PBGC, 571 F.3d 1288, 1295 (D.C. Cir. 2009). Thereafter the

district court granted summary judgment to the PBGC on all but

one claim. See Davis v. PBGC, 864 F. Supp. 2d 148, 172

(D.D.C. 2012); see also Davis v. PBGC, 815 F. Supp. 2d 283

(D.D.C. 2011).

II.

The Pilots now appeal nine of the claims stated in their

second amended complaint. They have, however, only provided

argument in support of five claims. In this circuit, “[i]t is not

enough merely to mention a possible argument in the most

skeletal way, leaving the court to do counsel’s work, create the

ossature for the argument, and put flesh on its bones.’” Consol.

Edison Co. of N.Y., Inc. v. FERC, 510 F.3d 333, 340 (D.C. Cir.

2007) (quoting Schneider v. Kissinger, 412 F.3d 190, 200 n.1

(D.C. Cir. 2005)). As more recently explained, “by failing to

include any relevant arguments in their appellate briefs, . . .

appellants fail to show that the district court’s determination”

was erroneous. Gerlich v. U.S. Dep’t of Justice, 711 F.3d 161,

173 (D.C. Cir. 2013). The Pilots may not attempt to do so by

incorporating argument presented in the district court, see

Appellants’ Br. 56 n.12, as this would circumvent the court’s

rules, see D.C. CIR. R. 32(a), regarding the length of briefs,

where they fail, as here, to persuade the court that they could not

have presented their challenge within the word limits for their

briefs. See Gerlich, 711 F.3d at 173. According to the docket,

the Pilots never sought an extension of the length of their

opening brief. We have no basis not to presume that the Pilots’

counsel have briefed the claims determined to be most important

and with the greatest chance of success on appeal.

8

Turning to the Pilots’ five claims, the court need not resolve

the parties’ contentions regarding whether the PBGC is entitled

to deference pursuant to Chevron, U.S.A., Inc. v. NRDC, 467

U.S. 837 (1984), when it acts as the trustee in an involuntary

retirement plan termination. Regardless of the standard of

deference, the Pilots’ claims relating to the PBGC’s

interpretation of the statute and regulations must fail. Similarly,

the court need not decide the level of deference due to the

PBGC’s interpretation of Plan provisions because the Pilots

have not demonstrated Article III standing for part of one claim

and their other claims fail regardless of the standard. For these

reasons we also need not decide whether the decision in Davis

v. PBGC, 571 F.3d 1288, regarding the Pilots’ request for a

preliminary injunction, is the law of the case on the standard of

review, see Sherley v. Sebelius, 689 F.3d 776, 783 (D.C. Cir.

2012).

Claim One concerns whether the benefit increase under

U.S. Airways’ Early Retirement Incentive Program (“ERIP”)

should be placed in priority category three. This designation is

significant because the PBGC has determined that the Plan’s

assets cover all Plan benefits through priority category three.

The ERIP was adopted on December 4, 1997, had an “effective

date” of January 1, 1998, and allowed pilots on a seniority list

who would turn forty-five on or before May 1, 2000 to elect to

receive the benefit between March 1, 1998 and April 30, 1998.

Those who elected to receive the benefit could not receive it

before May 1, 2000, less than five years prior to the Plan’s date

of termination.

The Board determined that because the earliest date the

benefit could be paid was one month after the beginning of the

five-year period preceding the date of Plan termination, the

ERIP benefit could not be included in priority category three.

This is because during that one month period, those pilots who

9

had elected the benefit received a lesser benefit, and 29 C.F.R.

§ 4044.13(b)(3)(i) provides that benefits in priority category

three are limited to “the lesser of the lowest annuity benefit in

pay status during the 3-year period ending on the termination

date and the lowest annuity benefit payable under the plan

provisions at any time during the 5-year period ending on the

termination date.” According to the Board, the lesser amount

was the amount payable during the first month of the five-year

period preceding termination. So understood, it would be

improper to place the ERIP benefits in priority category three.

The Pilots contend that the regulation on which the Board

relied, 29 C.F.R. § 4044.13(b)(3)(i), imposes a cap “on the

overall amount of [priority category three] benefits” and is not

relevant. Appellants’ Br. 36. Instead, they maintain that the

relevant regulation is § 4044.13(b)(2), which refers to an

effective date while § 4044.13(b)(3)(i) refers to a date when the

benefit was payable. According to the Pilots, the effective date

was January 1, 1998, before the five-year period prior to the

Plan termination date. Under this interpretation, the court

should conclude the ERIP benefit is in priority category three

because there would be no lesser benefit under the Plan

provisions in effect during the first month of the five-year period

preceding termination; the ERIP benefit would have been in

place throughout that period.

The PBGC concluded that the relevant regulation

interpreting the phrase “in effect” in 29 U.S.C. § 1344(a)(3)(A)

is 29 C.F.R. § 4044.13(b)(3)(i). This choice is the better

interpretation of the regulatory scheme and there is no question

that the court defers to the regulation’s interpretation of the

statute because the regulation was issued in the PBCG’s role as

an agency (and not as a fiduciary), see PBGC v. LTV Corp., 496

U.S. 638, 648 (1990). The statutory phrase “in effect” in

§ 1344(a)(3)(A) is ambiguous, and the PBGC has interpreted it

10

in 29 C.F.R. § 4044.13(b)(3)(i) to mean “payable.” The Pilots

erroneously suggest such an interpretation erases the distinction

in 29 U.S.C. § 1344(a)(3)(A) between the benefits “in pay

status” and those “provisions . . . in effect.” Section

§ 4044.13(b)(3)(i) retains the distinction by referring to benefits

that were in “pay status” and those that were “payable.” As the

PBGC explains, there is no inconsistency between the

regulations in § 4044.13(b)(3)(i), interpreting “in effect” in 29

U.S.C. § 1344(a)(3)(A) to mean “payable,” and § 4044.13(b)(6),

which interprets “in effect” in 29 U.S.C. § 1344(a)(3)(A) as “the

later of the date on which [a plan or amendment] is adopted or

the date it becomes effective”: a plan amendment could have,

for example, an adoption date of March 25, 1998, a date when

payments begin to be made of May 1, 1998, and an effective

date of January 1, 1998 (i.e., a retroactive payment date). Under

this scenario, the benefit would be “payable” as of the effective

date (January 1, 1998) but would not be “paid” until May 1,

1998. The “in effect” date would therefore be March 25, 1998,

the later of the January 1, 1998 effective date and the March 25,

1998 adoption date.

Claim Two relates to § 7 of the Plan, which caps maximum

yearly retirement income by incorporating the annual benefit

limit in the Internal Revenue Code, 26 U.S.C. § 415(b). This

provision was adopted well before the five-year period prior to

Plan termination. Subsection (d) of § 415, however, allows for

COLAs to increase the limits set in § 415(b). The Appeals

Board determined that only COLAs that came into effect during

the fourth and fifth years prior to Plan termination should be

included in priority category three. The Board reasoned that

incorporation of the § 415(b) limits into the Plan effectively

made those limits provisions of the Plan. A default rule —

priority category three includes the “lesser of the lowest annuity

benefit in pay status during the 3-year period ending on the

termination date and the lowest annuity benefit payable under

11

the plan provisions at any time during the 5-year period ending

on the termination date,” 29 C.F.R. § 4044.13(b)(3)(i) —

includes an exception for automatic benefit increases “effective

on or before the first day of the 5-year period ending on the

termination date,” id. § 4044.13(b)(5). If plan provisions

providing for such “automatic increases in the benefit formula

for both active participants and those in pay status or for

participants in pay status only” are adopted and effective before

the five-year period, then “automatic increases scheduled during

the fourth and fifth years preceding termination” are also

included in priority category three. Id. § 4044.13(b)(5). The

Board included scheduled COLA increases during the fourth and

fifth years prior to Plan termination in priority category three,

but not those during the following three years.

The Pilots contend that the Appeals Board’s conclusion

conflicts with 29 U.S.C. § 1344(a)(3), which, they maintain,

refers “to the ‘provisions’ ‘in effect’ during the five-year pre-

termination period . . . not [to] whether a particular ‘benefit

increase’ was payable five years before plan termination.”

Appellants’ Br. 38. Because § 7 of the Plan incorporated the

§ 415(b) limits and the § 415(d) COLAs before the five-year

period, the Pilots maintain, the “provision” was “in effect” prior

to the five-year period, and the increases that become effective

within the five-year period as a result of that provision should all

be included in priority category three. They further maintain

that the automatic benefit increase regulation, 29 C.F.R.

§ 4044.13(b)(5), cannot “save the PBGC’s position,” because

the COLAs are not benefit increase provisions but increases in

a benefit limitation. Appellants’ Br. 38.

The PBGC’s analysis tracks the statute. As it explains, the

incorporation of the COLAs in § 7.2 of the Plan makes them

benefit increases. The “lowest annuity” rule, 29 U.S.C.

§ 1344(a)(3); 29 C.F.R. § 4044.13(b)(3)(i), favors the PBGC’s

12

view because the COLAs were not payable throughout the five-

year period prior to Plan termination. Under PBGC regulations,

29 C.F.R. § 4044.13(b)(3)(i), priority category three includes the

“lesser of the lowest annuity benefit in pay status during the 3-

year period ending on the termination date and the lowest

annuity benefit payable under the plan provisions at any time

during the 5-year period ending on the termination date.”

Because the COLAs were not “payable” until after the five-year

period began, a lesser annuity benefit was payable during that

time period, and it is that lesser benefit that should be included

in priority category three. The Board’s is the better

interpretation of the statute.

Claim Seven involves the calculation of benefits for pilots

who could have retired three years before Plan termination but

did not. See 29 U.S.C. § 1344(a)(3)(B). The Pilots maintain

that their benefits should not have been fixed as of the date they

could have taken retirement but instead should be increased

under principles of “actuarial equivalence” to compensate for

the value they lost by not having their benefits commence

earlier. The Appeals Board concluded that the statute and the

relevant regulations do not allow for an adjustment but fix the

benefit no later than the beginning of the three-year period

before termination.

The Pilots rely primarily on a reference to “actuarial

equivalen[ce]” elsewhere in ERISA, 29 U.S.C. § 1054(c)(3),

which provides:

For purposes of this section, in the case of any defined

benefit plan, if an employee’s accrued benefit is to be

determined as an amount other than an annual benefit

commencing at normal retirement age, or if the accrued

benefit derived from contributions made by an

employee is to be determined with respect to a benefit

13

other than an annual benefit in the form of a single life

annuity . . . commencing at normal retirement age, the

employee’s accrued benefit . . . shall be the actuarial

equivalent of such benefit or amount determined under

paragraph (1) or (2).

According to the Pilots, this means that the actuarial equivalent

of the accrued benefit is nonforfeitable and belongs in priority

category three. As support, however, they point to two

inapposite cases, Contilli v. Local 705 International

Brotherhood of Teamsters Pension Fund, 559 F.3d 720 (7th Cir.

2009), and Stephens v. U.S. Airways Group, Inc., 644 F.3d 437

(D.C. Cir. 2011). Neither case addresses distress terminations,

priority category three, or Title IV of ERISA. Contilli, 559 F.3d

at 722, dealt with an employee whose retirement payments,

which began several months after he retired, were not increased

so that his pension would have the same value as if payments

had begun at his retirement. Stephens, 644 F.3d at 438, dealt

with a similar issue; plaintiffs opted to receive their pension

benefits in a lump sum, but wanted interest on the sum in view

of the forty-five-day delays from the dates they would have

received the first annuity payments and the dates the plan

disbursed their lump sum payments.

The Pilots fail to show that the PBGC has not adopted the

better interpretation of 29 U.S.C. § 1344 (a)(3)(B), quoted

supra. First, the ERISA provisions on which they rely are not

relevant to priority category three determinations. The reference

to actuarial equivalence in 29 U.S.C. § 1054(c)(3) relates more

generally to benefit accrual requirements rather than which

benefits fit into priority category three after a distress

termination, and § 1054(c)(3) limits the actuarial equivalence

requirement to the “purposes of this section.” Second, the overt

reference to an actuarial equivalence calculation in 29 U.S.C.

§ 1054(c)(3) undermines the Pilots’ position because it

14

demonstrates that when Congress intended such a requirement

it was explicit and it was not in the context of priority category

three. Congress included references to actuarial equivalence

elsewhere in ERISA, see, e.g., 29 U.S.C. § 1054(c)(3). In

contrast, § 1344(a)(3)(B) provides that the relevant benefit is

that which “would have been in pay status” at the beginning of

the three-year period preceding termination if the participant’s

benefits had commenced at that time. There is no mention of

adjusting that benefit under principles of actuarial equivalence.

“Where Congress includes particular language in one section of

a statute but omits it in another section of the same Act, it is

generally presumed that Congress acts intentionally and

purposely in the disparate inclusion or exclusion.” Russello v.

United States, 464 U.S. 16, 23 (1983) (internal quotation

omitted). Finally, the PBGC regulations cited by the Appeals

Board that interpret § 1344(a)(3)(B) are consistent with this

instruction. Neither § 4044.13(b)(2)(ii) nor § 4044.13(b)(3)(ii)

of PBGC’s regulations provides for actuarial equivalence.

Rather the phrase “as if the benefit had commenced at that time”

in 29 C.F.R. § 4044.13(b)(2)(ii) (emphasis added) fixes the

benefit at the beginning of the three-year period preceding plan

termination — i.e., actuarial equivalence adjustments are not

permitted.

Claim Eight involves a dispute over § 4.1(E) of the Plan,

which the Pilots refer to as the “minimum benefit provision.”

This provision sets a minimum retirement income for pilots who

were on a seniority list under the pre-December 1, 1972 plan

(the “Prior Plan”) based on benefits they would have received

had that plan continued in effect without change. The Pilots

contend that the plain meaning of § 4.1(E) confirms that all Prior

Plan benefits should be included in the minimum benefit

calculation, while the PBGC determined that some should and

others should not.

15

First, the Pilots’ objection that the district court erred in not

considering additional documents is of no moment inasmuch as

the court’s review is de novo and the decisions under review are

those of the PBGC Appeals Board. The Pilots fail to show that

the Board abused its discretion in refusing to consider evidence

that was not submitted to it. The evidence relates to a lawsuit,

Everett v. USAir Group, Inc., 927 F. Supp. 478 (D.D.C. 1996),

aff’d sub nom. Everett v. U.S. Airways Group, Inc., 194 F.3d 173

(D.C. Cir. 1999), regarding the minimum benefit provision. In

the consolidated appeal before the PBGC Appeals Board, the

Pilots submitted some documents from the Everett litigation and

implicitly offered to submit more at an evidentiary hearing, but

the Board declined to hold a hearing. The Pilots blame the

Board for not accepting the additional evidence they offered to

submit at a hearing if the Board was inclined to rule against

them. The Pilots also introduced in the district court a

declaration from Seth Schofield, a former U.S. Airways CEO

and witness to the 1972 Plan negotiations. The Pilots claim that

they obtained the Schofield declaration only after the Board

issued its decision, in response to the Board’s reference to an

absence of documentation from U.S. Airways employees who

negotiated the minimum benefit provision.

The Pilots’ first point barely merits consideration. If the

Pilots wanted the Board to consider the additional documents

they should have submitted them. The documents in the Everett

case and their relevance were known to the Pilots. The Pilots

were represented by counsel throughout the Board proceedings.

As to the timing of the Schofield declaration, the Pilots rely on

Esch v. Yeutter, 876 F.2d 976, 991 (D.C. Cir. 1989), which

allows parties to supplement the administrative record “where

evidence arising after the agency action shows whether the

decision was correct or not.” But, as the district court noted, see

Davis, 815 F. Supp. 2d at 291, the Schofield declaration did not

arise after the Board’s decision. The Pilots informed the Board

16

that they had declarations from all the U.S. Airways negotiators

who recalled the bargaining over the minimum benefit

provision. Even if they did not have a version of the Schofield

declaration at the time of the appeal, they knew that declarations

of this type would be relevant and they offer no reason why they

could not have obtained the Schofield declaration in time to

submit it with their appeal to the Board. Hence, it is properly

disregarded by this court. As the district court observed in

denying the Pilots’ request that it consider documents that were

not part of the administrative record before the Appeals Board:

[F]or whatever reason, [the Pilots] did not provide all

of the evidence supporting their position with their

appeal. The Board . . . chose to act on the evidence

before it and not to hold a hearing. The Board did not

contravene any regulations by doing so. [The Pilots]

may have been legitimately surprised by the Board’s

course of action, but [the Pilots’] own choice to

withhold evidence at the agency level — whether

tactical, labor-saving, or otherwise — does not provide

a basis to allow the introduction of extra-record

evidence during judicial review.

Davis v. PBGC, 815 F. Supp. 2d at 292. The Pilots criticize the

Board for concluding that the additional evidence “could not

possibly make a difference,” Reply Br. 20 (emphasis in

original), but the Board’s conclusion was more nuanced,

explaining that the statements in the affidavit provided to it, and

any similar statements in additional affidavits, were insufficient

to establish the Pilots’ claims because they conflicted with the

provisions of the Plan.

The Pilots’ attempt to rely on the administrative record in

the Jerome Peterman case is unavailing. They appear to attempt

to make an end run around the district court’s September 30,

17

2011, ruling declining to supplement the record, Davis, 815 F.

Supp. 2d at 292. In any event, Peterman was listed as one of the

plaintiffs although the Board did not resolve his appeal until

May 9, 2012, twenty-one days before the district court granted

summary judgment to the PBGC and more than six months after

the district court declined to supplement the record. It is unclear

whether Peterman was ever properly a plaintiff given that the

Board decision in his case was never under review.

In addressing the Pilots’ four Claim Eight arguments, we

therefore look to the Plan and confine our review to the evidence

in the administrative record. The Pilots offer the barest of

arguments based on the text of the Plan, arguing only that “as a

matter of common sense and sound linguistic construction, a

Plan provision that promises a benefit ‘no less’ than the benefit

provided by the Prior Plan necessarily includes everything that

was included in the Prior Plan and does not need to specifically

delineate each component.” Appellants’ Br. 51. The PBGC

maintains that other language in the Plan reveals that the Plan

was not to continue exactly as before.

Reinvested dividends. The Prior Plan included a variable

component based on the performance of a group of stocks held

by the Prior Plan. The valuation of these stocks included

dividends. The new Plan, which did not include this variable

component, provided that for purposes of “determining the

retirement income to which the Participant would have been

entitled” under the Prior Plan, the calculation should assume that

if the variable component had survived, its performance would

have been “equal to the investment performance of the Standard

and Poor’s 500 stock index (unadjusted for dividends).” The

Pilots’ position would require the court to ignore this phrase and

include dividends in the minimum benefit calculation. To

ignore the plain text would clearly be improper, particularly

18

because it appears in the same sentence that preserves the

minimum benefits of the pre-1972 plan.

Twice-yearly adjustments. The Pilots maintain that Prior

Plan pilots are entitled to twice-yearly adjustments incorporated

in the pre-1972 plan to reflect changes in the value of the

variable component of that plan. The PBGC determined that the

new Plan fixed the minimum benefit amount at a Prior Plan

pilot’s benefit commencement date or termination of

employment. The minimum benefit provision of the new Plan

does not mention twice-yearly adjustments, but instead states

that a Prior Plan pilot’s retirement income “shall not be less than

the amount to which he would have been entitled at his Benefit

Commencement date or Termination of Employment had the

Plan continued in effect.” Although “amount to which he would

have been entitled” could mean the amount at the time of

retirement plus future adjustments, the Plan’s text indicates a

fixed amount was intended, stating that the relevant figure is the

amount to which one was entitled at a particular moment in

time. This limitation appears in the same sentence as text

preserving the Prior Plan pilots’ minimum benefits and is a

qualification of that statement.

1% termination credit. The Pilots maintain that they are

entitled to an “upward adjustment to account for forfeitures to

the Plan caused by the termination of service of unvested

participants.” Second Am. Cmplt. at 185, Davis v. PBGC, 864

F. Supp. 2d 148 (D.D.C. 2012) (No. 1:08-cv-1064). The

Appeals Board found this “1% termination credit,” as the Pilots

call it, nowhere appeared in the new Plan, was never applied by

the airlines after the new Plan took effect, and, most

significantly, was not necessary because the new Plan

eliminated the possibility of the type of forfeiture that had given

rise to the need for the credit. The Pilots do not contest the

finding that the airlines had never applied this credit, and

19

accordingly the PBGC does not run afoul of Section 4.1(E)’s

requirement that Plan benefits for qualified Pilots “not be less

than the amount to which [they] would have been entitled . . .

had the [Prior] Plan continued in effect without change.”

Indeed, under the new Plan, there is no need to allocate forfeited

benefits and therefore no need to award the Prior Plan’s 1%

termination credit.

50% income supplement for totally and permanently

disabled pilots. Here, the Pilots maintain that the PBGC has

failed to provide those qualified participants in the pre-1972

plan who became “‘totally and permanently’ disabled” with the

Prior Plan’s “50% retirement income supplement.” The Appeals

Board found that the new Plan explicitly set forth two formulae

for assessing benefits for individuals who were totally and

permanently disabled – one for those who began receiving

disability benefits on or after December 1, 1974 and one for

those who began receiving disability benefits prior to December

1, 1974.

The court does not address this part of Claim Eight because

the Pilots have failed to demonstrate Article III standing by

showing at least one of them was on the relevant seniority list as

of December 1, 1972, and had become totally and permanently

disabled within two years after retiring due to a related

disability. See Plan § 4.1(E); Prior Plan § 4. In a supplemental

brief the Pilots stated that “[a]t least four such Appellants” were

“entitled to the 50% disability retirement supplement,” and

identified the four by name, but failed to identify the relevant

criteria, both eliding the difference between “normal” and

“disability” retirement and failing to state that the total and

permanent disability must be related to the earlier disability. See

Appellants’ Supp. Br. 3 (Sept. 19, 2013); see id. 2. Given the

misstatement of the criteria, the Pilots’ identification of “four

such [Pilots]” fails to show any Pilot suffered an injury in fact

20

as a result of the PBGC’s determination on the 50% supplement.

See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61

(1992). The exhibit to which the Pilots point on the question of

whether the Pilots’ disabilities entitled them to the 50%

supplement at issue is unhelpful because it lists only the names

of “Disability Pilots” without indicating whether these Pilots’

disabilities meet the Prior Plan’s criteria. See Appellants’ Supp.

Br. 3 (citing Ex. 3 to Decl. of Ronald B. Natalie). In any event,

the PBGC responded that the four identified Pilots could not

benefit from a favorable ruling on this part of Claim Eight

because their current benefits are equal to the Internal Revenue

Code § 415(b) cap at issue in Claim Two. See Appellee’s

Response to Appellants’ Supp. Br. 2-4. The Pilots

acknowledged in their supplemental brief that avoidance of the

§ 415(b) cap depended on their prevailing on Claim Two, see

Appellants’ Supp. Br. 3, which they do not.

Claim Eleven involves the Board’s September 11, 2008

decision concerning eligibility for and calculation of the Pilots’

disability retirement benefits. The Plan’s disability retirement

provision in § 4.1(E) guarantees a minimum amount of basic

retirement income to a pilot “who begins receiving disability

benefits under the Additional Benefit Programs on or after

December 1, 1974, and who is determined to be totally and

permanently disabled” (emphasis added). The “Additional

Benefit Programs” include the separately administered USAir,

Inc. Pilot Disability Plan (the “Disability Plan”).

The Pilots’ position here rests upon their views of the

procedures that must be in place to determine who is totally and

permanently disabled, and the participants or beneficiaries who

are covered by the disability provision in § 4.1(E). On

procedures, the Pilots describe (without providing a record

citation) a 1980 amendment to “the Plan” that fundamentally

changed the way disability determinations were made.

21

According to the Pilots, these changes meant that pilots were no

longer required to secure a formal Social Security

Administration (“SSA”) determination of total and permanent

disability but instead could seek an initial determination of total

and permanent disability from U.S. Airways and, if

unsuccessful, a new determination from either a medical

examiner or the U.S. Airways Retirement Board. Consequently,

the Pilots conclude that the PBGC must provide a similar

alternative mechanism for obtaining a determination of total and

permanent disability.

The PBGC points out that the changes to which the Pilots

refer are part of the Disability Plan, rather than the Retirement

Income Plan. The Disability Plan, not the Retirement Plan,

governs total and permanent disability determinations and it is

ongoing and administered by U.S. Airways. See Appellee’s Br.

56-57. The PBGC states that it is continuing U.S. Airways’

long-established practice of deferring to the plan administrator

of the Disability Plan for disability determinations. See id. 56.

More significantly for our purposes, the PBGC states that the

Pilots can demonstrate no legal basis for imposing obligations

on the PBGC based on provisions of the Disability Plan because

it administers only the Retirement Plan. In fact the Pilots fail to

cite a legal basis on which the court could conclude that the

PBGC was required to continue the pre-termination practice as

part of its responsibilities in administering the Retirement Plan.

Their assertion that “there is absolutely no evidence that the

Disability Plan is resolving or would resolve disputes involving

pre-termination disabilities,” Reply Br. 25, lacks support in the

record and in rebuttal oral argument they never challenged the

statement by PBGC’s counsel that before the Plan terminated,

all disability determinations were made under the separate

Disability Plan, which still exists today, see Oral Arg. at 53:02

(Sept. 10, 2013). By contrast, the PBGC’s argument, including

that the Pilots could have gone back to the Disability Plan to get

22

a determination, was met by the Pilots’ rebuttal acknowledging

that the Disability Plan still exists, but asserting that under prior

practice it was a gatekeeper and after going to the Disability

Plan pilots could go to the Retirement Board (which no longer

exists) or to a medical examiner (which the PBGC does not

allow). Therefore, they argued, their only option is an SSA

determination. Still, this response does not explain why it

should be up to the PBGC, rather than the Disability Plan

administrator, to permit a medical examiner to find total and

permanent disability, or why it is inappropriate for the PBGC to

defer to the Disability Plan administrator on this question

concerning interpretation of the Disability Plan.

With regard to the identification of which pilots are eligible

for the basic retirement income guarantee, § 4.1(E) provides that

it is available “to a Participant who begins receiving disability

benefits under the Additional Benefit Programs on or after

December 1, 1974, and who is determined to be totally and

permanently disabled” (emphasis added). The PBGC reads this

provision as a two part test: to qualify, the pilot must be

determined to be totally and permanently disabled and at the

time of retirement have received disability benefits under the

Additional Benefit Programs. The Pilots disagree, maintaining

the date makes the clause a timing requirement, indicating that

the formulae directly following in the Plan apply to those who

are totally and permanently disabled after December 1, 1974,

not those who were totally and permanently disabled before that

date. The Pilots provided no record citation to show that the

PBGC’s reading was inconsistent with other provisions of the

Plan or with the history of the provision and so failed to show

that the PBGC erred in relying on the Plan’s plain text. The

Pilots suggest that a requirement that a totally and permanently

disabled pilot receive disability benefits before retiring is

inconsistent with the text defining the retirement benefit as what

the participant was “entitled to receive under the Additional

23

Benefits Programs,” not what he was actually receiving. This

phrase relates, however, to benefit calculation, rather than the

antecedent eligibility question. In addition, the Pilots offer no

interpretation of the word “and” in the provision that identifies

which participants are eligible.

Accordingly, we affirm the judgment of the district court

granting summary judgment to the PBGC on the five claims

before this court.