Petitioners Brief — Inter-Modal Rail Employees Ass'n v. Atchison, Topeka & Santa Fe Railway Co.

FILED

JAN 13 1997

No. 96-491

a

In The

Supreme Court of the United States

eT

October Term, 1996

INTER-MODAL RAIL EMPLOYEES ASSOCIATION,

THOMAS FRANKS, CHARLES JONES, TOMMY MARTIN,

HOYT JARRARD, and ROBERT STEIN,

Petitioners.

vs.

THE ATCHISON, TOPEKA AND SANTA FE RAILWAY

COMPANY, SANTA FE TERMINAL SERVICES, INC.,

and

IN-TERMINAL SERVICES, DIVISION OF MI-JACK

PRODUCTS, INC..

Respondents

On Writ Of Certiorari To The United States Court

Of Appeals For The Ninth Circuit

BRIEF FOR PETITIONER

Richard E. Schwartz

Lead Counsel

James E. Parrot

RICHARD SCHWARTZ

& ASSOCIATES, LTD.

Attorneys for Petitioners

393 N. Euclid Ave., Ste. 300

St. Louis, Missouri 63108

(314) 454-0022

et

QUESTION PRESENTED FOR REVIEW

Do allegations by employee-beneficiaries of a health and

welfare benefit plan that their employer's parent company

forced their employer to discharge them and to contract out

their jobs to another employer in furtherance of a conspiracy to

interfere with their right to receive health and welfare benefits,

state a cognizable cause of action under §510 of ERISA?

il

LIST OF PARTIES TO PROCEEDING

Inter-Modal Rail Employees Association, and, in the

alternative, Thomas Franks, Charles Jones, Tommy Martin,

Hoyt Jarrard, and Robert Stein, filed this action against The

Atchison, Topeka and Santa Fe Railway Company; Santa Fe

Terminal Services, Inc.; Santa Fe Pacific Corporation; and In-

Terminal Services Division of Mi-Jack Products, Inc.

TABLE OF CONTENTS

QUESTION PRESENTED FOR REVIEW .............. i

LIST OF PARTIES TO PROCEEDING ............... il

CITATION TO LOWER

COURT OPINIONS AND ORDERS ................ I

NEE GE DEE GOUEED ccc ccccrevcescececeies 2

EES ee 5

I. THE APPLICABLE STANDARD OF REVIEW

FAVORS PETITIONER’S PLEADING ........ 11

Il. THE COURT’S PRECEDENTS ON

STATUTORY INTERPRETATION AND THE

CONSTITUTIONAL LIMITS ON A COURT

IN CONSTRUING THE INTENT OF

CONGRESS MANDATE REVERSAL OF

THE NINTH CIRCUIT’S OPINION ........... 12

IV.

IV

Contents

THE LANGUAGE OF THE STATUTE-IS

UNAMBIGUOUS AND PETITIONER’S

CLAIM IS AN UNEMBELLISHED

APPLICATION OF THE STATUTE’S PLAIN

WEED Sa Setcececcccedeccebescueeséonn

A. The Clear Language Of §510 Shows

That It Prohibits Discharges From

Employment For The Purpose Of

Interfering With Health And Welfare

ES ee ory ee ye ee eae

B. The Interpretations Of The

Congressional Intent Underlying §510

Found By Several Other Circuit Courts

Of Appeals In Construing §510

Likewise Support Reversal .............

THE COURT’S PRECEDENTS

INTERPRETING CONGRESS’

PROHIBITIONS AGAINST UNLAWFUL

EMPLOYMENT PRACTICES UNDER

OTHER STATUTES GOVERNING LABOR

AND EMPLOYMENT RELATIONS

COUNSEL REVERSAL OF THE DECISION

DIE cvivvdcccccscdvcccepecsbéuevess

Page

Vv

Contents

Page

V. THE RELIEF PROVIDED TO PETITIONER’S

MEMBERS IN THIS ACTION UNDER

ERISA FOR WRONGFUL DISCHARGE

MUST AFFORD COMPLETE RESTITUTION

TO QUALIFY AS THE “APPROPRIATE

EQUITABLE RELIEF” REQUIRED BY THE

eee er ae er eee 36

VI. THE DECISION BELOW AT ITS CRUX

DENIES ACCESS TO JUSTICE ............. 40

EY Snbeneeaeesndaudenadvsedesadecces 41

TABLE OF CITATIONS

Cases Cited:

Adcox v. Teledyne, Inc.,

21 F.3d 1381 (6th Cir.), cert. denied,

115 S.Ct. 193, 130 L.Ed.2d 126 (1995) .......... 27, 28

Albemarle Paper Co. v. Moody,

422 U.S. 405, 95 S.Ct. 2362,

EE 39

Allied Chemical Workers v. Pittsburg Plate & Glass Co.,

404 U.S. 157, 92 S.Ct. 383,

eee oi ocean deb deweas 34

vi

Contents

Page

Anderson v. Alpha Portland Indust.,

836 F.2d 1512 (8th Cir.), cert. denied,

489 U.S. 1051, 109 S.Ct. 1310,

Oy a ae Va deasetcetdeseees 20

Cannon v. Univ. of Chicago,

441 U.S. 677, 99 S.Ct. 1946,

Se EE Sab bck sade cewecccdcewsacss 34

Conkwright v. Westinghouse Elec. Corp.,

ie > fs 3 Beerrrrrrrr TTT TTT 32

Connecticut Nat. Bank v. Germain,

503 U.S. 249, 112 S.Ct. 1146,

Se IEE no nc inh beccecsccesin 13

Curtiss-Wright Corp. v. Schoonejongen,

115 S.Ct. 1223, 131 L.Ed.2d 94 (1995) ............. 20

Deeming v. American Standard, Inc.,

Sa Fae CaP GED Sich ccowdcnsccansaes 32

Dister v. Continental Group, Inc.,

oe fk RE ee er eye 11

Dole v. United Steelworkers,

494 U.S. 26, 110 S.Ct. 929,

a oe ea fide aus 12, 13

Fitzgerald v. Codex Corp.,

Be ee EE SUD oc ccccvbcendivecsocsens 31

vil

Contents

Fleming v. Ayers & Assoc.,

ee en edn cv cldecusecbabens 30

Gavalik v. Continental Can Co.,

812 F.2d 834, (3d. Cir.), cert. denied,

484 U.S. 979, 108 S.Ct. 495,

a ae wet we cauts 11,19

Golden v. Kelsey-Hayes Co.,

73 F.3d 648 (6th Cir.), cert. denied,

117 S.Ct. 49, 136 L.Ed.2d 13 (1996) ............... 20

Harsch v. Eisenberg,

956 F.2d 651 (7th Cir.), cert. denied,

506 U.S. 818, 113 S.Ct. 61,

i ek Ses wb eekues 37

Hazen Paper Co. v. Biggins,

507 U.S. 604, 113 S.Ct. 1701,

i aa SUSU knees cote eenede< 18

Heath v. Varity Corp.,

EE BOUED: Snccccsccvctvcccce. 21, 32

Howard Johnson's, Inc. v. Hotel & Rest.

Employees and Bartenders Union,

417 U.S. 249, 94 S.Ct. 2236,

ERIS Ne OS a 34

vill

Contents

Page

Ingersoll-Rand v. McClendon,

498 U.S. 133, 111 S.Ct. 478, 6, 9, 10, 18,

112 L.Ed.2d 474 (1990) ............. 25, 26, 33, 37, 40, 41

Inter-Modal Rail Emp. Ass'n v. Atchison, Topeka,

80 F.3d 348 (9th Cir.), cert. granted,

Se See SED wo wanda scene 1, 5-7, 15, 18, 19, 27

Kross v. Western Electric Co.,

701 F.2d 1238 (7th Cir. 1983) .............005. 29, 30

Lingle v. Norge Division of Magic Chef,

486 U.S. 399, 108 S.Ct. 1877,

EN EL dyin pes anaes 04 ee veaees 35

Local 391 v. Terry,

494 U.S. 558, 110 S.Ct. 1339,

EEE iu. o Vania dene ice Seen neues 39

MLB v. SLJ,

No. 95-853, 65 U.S.L.W. 4035

8 ROK 0 Eero ty 40

Marbury v. Madison,

5 U.S. (1 Cranch) 137, 2 L.Ed. 60 (1803) ............ 40

Massachusetts Mutual v. Russell,

473 U.S. 134, 105 S.Ct. 3085,

Oe ee OEE ae Gibb etbewncadas 7, 13, 16, 24

ix

Contents

Page

McDonnell Douglas Corp. v. Green,

411 U.S. 792, 93 S.Ct. 1817,

i ia Coa ws ccs Seba dgseeseses 12

Mertens v. Hewitt Associates,

508 U.S. 248, 113 S.Ct. 2063,

et cet eoenesea 37, 38

Mitchell v. Robert DeMario Jewelry, Inc.,

361 U.S. 288, 80 S.Ct. 332,

I fo ls ann eve ae'es eects’ 39

Moskal v. United States,

498 U.S. 103, 111 S.Ct. 461,

ak we wb wulae'et (ae bacens 12

Owens v. Storehouse, Inc.,

984 F.2d 394 (11th Cir. 1993) .............25.. 17, 28

Pa. Dept. of Pub. Welfare v. Davenport,

495 U.S. 552, 110 S.Ct. 2126,

ED SW Noe seen eceveccenvess 12

Pilot Life v. Dedeaux,

481 U.S. 41, 107 S.Ct. 1549,

IR ee ee 26

Rodriguez v. Taylor,

569 F.2d 1231 (3d. Cir.), cert. denied,

436 U.S. 913, 98 S.Ct. 2254,

RE ee nny <a ee 39

x

Contents

Page

Romer v. Evans,

116 S.Ct. 1620, 134 L.Ed.2d 855 (1996) ............ 40

Scheuer v. Rhodes,

416 U.S. 232, 94 S.Ct. 1683,

SED 6. 60s situ vecsaadanvaccasné 11,12

Schwartz v. Gregori,

45 F.3d 1017 (6th Cir.), cert. denied,

116 S.Ct. 77, 133 L.Ed.2d 36 (1995) ............ 37, 39

Seaman vy. Arvida Realty Sales,

985 F.2d 543 (11th Cir.), cert. denied,

510 U.S. 916, 114 S.Ct. 308,

ry [Rm & >. 7) EPPPTTerrTerrrTreeree ey 30, 31

Shaw v. Delta Airlines, Inc.,

463 U.S. 85, 103 S.Ct. 2890,

TF ESO EROED cc ccnccecsiscccecesecss 16, 24

Stiltner v. Beretta USA Corp.,

74 F.3d 1473 (4th Cir. en banc), cert. denied,

117 S.Ct. 54, 136 L.Ed.2d 18 (1996) ............ 31, 34

Tameny v. Atlantic Richfield Co.,

27 Cal.3d 167, 175, 610 P.2d 1330,

SE EE Si Ws cus vdsnntcas <vccveds

Texas Dept. of Com. Affairs v. Burdine,

450 U.S. 248, 101 S.Ct. 1089,

SUE ¥snad cccancdissuiedasedase

a“

xi

Contents

Page

Textile Workers v. Darlington Manufacturing Co.,

380 U.S. 263, 85 S.Ct. 994,

SPT IEEE de edecdvccevsnecene

U.S. v. Lexington Mill,

232 U.S. 399, 34 S.Ct. 337,

EE Pawo Gedaecvesvsescesss

UFCW vy. Brown Group,

116 S.Ct. 1529, 134 L.Ed.2d 758 (1996) .....

United States v. Ron Pair Enterprises, Inc.,

489 U.S. 235, 109 S.Ct. 1026,

FP UNOEED pecetedéccesecudss

Varity Corp. v. Howe,

116 S.Ct. 1065,

7, 10, 12, 13, 21,

BPO Ree CP ONPTED soc cccccesceccs 25, 33, 36, 38, 40

West v. Greyhound Corp.,

813 F.2d 951 (9th Cir. 1987) ..............

West Virginia Univ. Hosp. v. Casey,

499 U.S. 83, 111 S.Ct. 1138,

PT TTT Te

xi

Contents

Page

Statutes Cited:

SRE, OD ows aina sod eeqdiactavetesseenddeeden l

Be ee EE oe Sen ee ceeKeecddenceteesesvbaenans 2

PN Mn wo 84 dad eens céadesni 1,2, 9, 15, 16, 21

29 U.S.C. §1104,

ND os '4-b od oon credo audnds be eds a 7,21, 24

29 U.S.C. §1132

ERISA §502(a)(3)(B) ............. 7, 10, 22, 31, 37, 38

29 U.S.C. §1140,

EY cnc os ek edsddetceeNak costes ees 1 ef seq.

29 U.S.C. §1144,

REE 6 Guu deeds peed cakeeewenes beueeetns 37

29 U.S.C. §158,

National Labor Relations Act §8(a) .............. 9, 34

29 U.S.C. §160,

PE Peak eoenieerendskchvessndsddeacneees 39

EE Gs es ae en Cava dev dade kaek aaa 1]

BP es EEE cn b cebu d cess vescvetdencenens 39

xiii

Contents

Page

PN ila ces geen ibdsbavic dues 11,39

ee aes 4

45 U.S.C. §§231, et seq.,

Railroad Retirement Act of 1974 ............... 3,4,7

Railroad Retirement Act of 1935 1937 .............. 7

Conf. Rep. No. 93-1280, p.330-31,

93d Cong., 2d Sess., 3 Leg. Hist. 4597 .............. 19

H. Rep. No. 93-533, p.17, 93d. Cong.,

SPs eID ccc ccecccevavccccsccces 19

H.Rep. No. 533, p.9-10, 93d Cong.,

2d Sess., reprinted in 2 Leg. Hist. 2356-75 .......... 30

S. Rep. No. 127, 93d Cong.,

Ist Sess. at p.35 (1973), reprinted in

ES he ee a 19

Senate and House Reports on ERISA, reprinted at,

1 Leg. Hist. 621 and 2 Leg. Hist. 2364 (1976) ........ 25

Senate Floor Debates,

2 Leg. Hist. 1641, 1811,

ES EE SE Re er a 19

XIV

Contents

Senate Report No. 93-127,

p.14, 93d Cong., Ist Sess.,

PR 5 RPT OTOTTT STITT Lies

Other Authorities Cited:

Federal Rules of Civil Procedure, Rule 12(b)(6) ....

Webster's New Universal Unabridged Dictionary

i I OE ot ree sul esa at,

Page

CITATION TO LOWER

COURT OPINIONS AND ORDERS

Court of Appeals: J/nter-Modal Rail Emp. Ass'n v.

Atchison, Topeka, 80 F.3d 348 (9th Cir. 1996), Case No. 93-

56400.

District Court: no citations, Central District of

California Case No. CV-92-06623-WJR.

STATEMENT OF BASIS FOR JURISDICTION

The Court of Appeals entered its decision on March 27,

1996. A timely Petition for Rehearing and Suggestion for

Hearing En Banc was filed. The Court of Appeals ordered

Defendants to respond to that Petition. On June 24, 1996, the

Court of Appeals denied the Petition and rejected the

Suggestion for Rehearing En Banc.

Petitioners believe that 28 U.S.C. §1254(1) confers on

this Court jurisdiction to review on a writ of certiorari the

judgment of the Ninth Circuit.

STATUTES INVOLVED IN THE CASE

29 U.S.C. §1002(1): The terms “employee welfare

benefit plan” and “welfare plan” mean any plan, fund, or

program ... established or is maintained for the purpose of

providing for its participants or their beneficiaries, through the

purchase of insurance or otherwise, (A) medical, surgical, or

hospital care or benefits, or benefits in the event of sickness,

accident, disability, death or unemployment, or vacation

benefits.

,

-

29 U.S.C. §1002(3): The term “employee benefit plan”

or “plan” means an employee welfare benefit plan or an

employee pension benefit plan or a plan which is both an

employee welfare benefit plan and an employee pension benefit

plan.

29 U.S.C. §1140: It shall be unlawful for any person to

discharge, fine, suspend, expel, discipline, or discriminate

against a participant or beneficiary for exercising any right to

which he is entitled under the provisions of an employee benefit

plan, this subchapter, section 1201 of this title, or the Welfare

and Pension Plans Disclosure Act, or for the purpose of

interfering with the attainment of any right to which such

participant may become entitled under the plan, this subchapter,

or the Welfare and Pension Plans Disclosure Act.

STATEMENT OF THE CASE

This case presents first a constitutional issue of access

to the Federal courts in the face of ERISA’s comprehensive,

reticulated scheme which has preempted all the relevant

California state remedies; together with the issues of the proper

construction of ERISA §510, the statute which created a Federal

right to a remedy to replace those preempted, and the proper

role of the Federal courts in statutory interpretation. Suit was

filed by Inter-Modal Rail Employees Association (“IMREA”)

in the district court under federal question jurisdiction,

28 U.S.C. §1331. IMREA is a nonprofit mutual benefit

corporation organized under California law by over 200 former

employees. Its primary purposes are concerted political

advocacy for workers’ rights and the conduct of this litigation

to advance such goals while seeking to recover lost pension and

health and welfare benefits and other damages due to its

members. IMREA holds the claims of its members pursuant to

—————

3

assignments and powers of attorney (App. 3).' Once it has

concluded the litigation IMREA is required by its by-laws and

under the assignments and powers of attorney given to

Petitioner Association by all of its members to pay over to them

all benefits recovered, less stipulated attorneys’ fees and

litigation costs incurred.

Alternatively, the board of directors of Petitioner

Association, comprised of five of these former employees,

sought to be certified as class representatives of the

Association's members in the event that any court might find it

was not a proper party (App. 4-5). The directors and all other

members of IMREA were Santa Fe Teamsters, specifically

truck drivers, crane operators and cargo handlers who were

involved in loading and unloading containers and trailers

between railcars and trucks.

IMREA’s first cause of action is under §510 of ERISA,

29 U.S.C. §1140. It alleged on behalf of its members that

Respondent Atchison, Topeka & Santa Fe Railway (hereinafter

“AT&SF” or “Santa Fe”), acting through its wholly owned

subsidiary Respondent Santa Fe Terminal Services (hereinafter

“SFTS” or collectively with AT&SF as “Respondents Santa

Fe’) and in conspiracy with Respondent In-Terminal Services

Division (hereinafter “ITS”), interfered with these employees’

rights to receive benefits under the Railroad Retirement Act

(RRA) of 1974, 45 U.S.C. §§231, et seg., and under the

Teamsters Union pension and health and welfare plans

(App. 10-13). IMREA also filed a claim on behalf of its

members for damages under the Federal Employers Liability

‘All citations to the record before the appeals court

are made as “App.” Petitioner attached its Complaint to the

petition for certiorari at Appendix IV.

4

Act (FELA), 45 U.S.C. §51, et seg. (App. 13-17). The court of

appeals remanded this claim for further consideration on its

suitability for class-action treatment.

Petitioner alleged that Respondents Santa Fe developed

a scheme whereby AT&SF withdrew its so-called “contract” to

perform inter-modal services at its Los Angeles railyard from its

wholly owned subsidiary, Respondent SFTS which had been

found to be a “railroad” employer under the RRA of 1974. In

fact, AT&SF never before had used a contract between itself as

parent and any subsidiary for performance of the inter-modal

work. Less than two months after making this “new” contract,

AT&SF canceled the contract and opened the work for

“competitive bidding.” Petitioner alleged that prior to its

members’ discharge Respondents conspired to “award” the

contract to ITS with the understanding that ITS would reduce

the amount of employee benefits payable for the railyard work

(App. 9-11).

Respondents Santa Fe thus replaced themselves with

Respondent ITS, a non-railroad employer, which then

performed the same exact inter-modal work at the Santa Fe

railyard using the same Santa Fe equipment and vehicles after

hiring former Santa Fe employees who had been terminated the

day before. Under their scheme, Respondents Santa Fe

discharged all of the subsidiary’s “railroad” employees,

including the members of IMREA. The Association alleged

that the purpose of this plan was illegal and violated ERISA

since it was formulated and implemented with the specific

intent to interfere with and deprive IMREA’s members of their

rights to receive pension benefits under the RRA of 1974 and to

receive ERISA-protected retirement and health and welfare

benefits under multi-employer plans of the Teamsters’ Union

(App. 6-13). Santa Fe’s intent to escape payment of employee

benefits, including contributions required by the Railroad

5

Retirement Board for “railroad” employees, was explicitly

documented in a sworn declaration made by the president of the

Santa Fe subsidiary (App. 59-62) (also attached to the petition

for certiorari at Appendix V).

After AT&SF and SFTS discharged Petitioner's

members for the purpose of interfering inter alia with their

rights to receive health and welfare and retirement benefits, ITS

rehired many but not all of the Santa Fe employees to do the

same work at the same place with the same equipment, but

those who remained were required to work for far lesser levels

of employment benefits (App. 9-11).

PROCEEDINGS BELOW

The district court granted Respondents’ motion to

dismiss Petitioner’s complaint under Rule 12(b)(6) against each

and every claim under §510 of ERISA for interference with the

various employee benefits (App. 28-29). No Respondent filed

an answer in the district court, and no party conducted

discovery.

The per curiam opinion of a panel of the court of

appeals first held that IMREA lacked standing to bring suit on

the ERISA and FELA claims on its members’ behalf. The court

reasoned that “to establish the individualized damages sought

in both the ERISA and FELA claims, each employee member

would have to participate in the lawsuit.” 80 F.3d 348, 350

(9th Cir.), cert. granted, 117 S.Ct. 504 (1996). This decision,

of course, was made without the benefit of the Court's

magisterial decision on associational standing, UFCW v. Brown

Group, 116 S.Ct. 1529, 134 L.Ed.2d 758 (1996), entered shortly

afterwards. The appeals court sua sponte had raised for the first

time in its opinion any issue about the associational standing of

IMREA. No Respondent had argued in the district court or at

6

the court of appeals that IMREA lacked associational standing.

Thus, Petitioner never had an opportunity to present its

constitutional views about the standing determination, i.e., that

denying IMREA associational standing infringed on the

members’ rights of free association, speech, and petition, or

about the other considerations which favored standing. This

Court did not grant certiorari to examine this issue.

The appeals court reversed the district court’s dismissal

of the §510 claim against each Defendant for conspiracy to

interfere with the employees’ Teamster pension benefits. The

Ninth Circuit found that “Plaintiffs clearly stated a claim under

section 510 of ERISA, which ‘protects plan participants from

termination motivated by an employer’s desire to prevent a

pension from vesting.”” 80 F.3d at 350-51, quoting /ngersoll-

Rand v. McClendon, 498 U.S. 133, 143, 111 S.Ct. 478,

112 L.Ed.2d 474 (1990). The Ninth Circuit also rejected

Respondent In-Terminal Services’ “argument that §510 does

not support a cause of action against a non-employer for

conspiring with an employer to interfere with ERISA-protected

benefits.” 80 F.3d at 350 n.5. No Respondent filed a cross-

petition for certiorari on either of these issues.

The Ninth Circuit did, however, uphold the dismissal of

the claims for interference with RRA pension benefits and with

Teamster welfare health insurance benefits. /d. at 351-52. The

appeals court found that, under its own decisions, claims under

§510 for interference with the right to receive health and

welfare benefits were not cognizable under ERISA since those

benefits did not vest. /d. at 351. This was the point upon which

the Court granted IMREA’s petition for certiorari. Employees,

it was rationalized, thus have no present right to receive such

benefits. /d. The panel also rationalized that an employer may

unilaterally amend or eliminate health and welfare insurance

plans. Jd The appeals court recognized that its holding

7

conflicted with decisions of the Seventh and Eleventh Circuits.

Id. at 351, n.6. Furthermore, the appeals court's opinion on this

issue failed to consider this Court’s decision in Varity Corp. v.

Howe, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), rendered

shortly before this decision was announced. Varity upheld a

claim under §404 of ERISA, 29 U.S.C. §1104, for breach of

fiduciary duties by an employer who devised and implemented

a scheme whereby its employees would transfer their

employment to a new corporation, based on the employer's

promises that the transfer would not affect their insurance

benefits. In fact, that employer knew its new corporation would

not remain in business because it was saddled with debt. The

new corporation failed and the transferring employees lost all

their health and welfare benefits. The Court held that

§502(a)(3) of ERISA, 29 U.S.C. §1132(a)(3), authorized suits

for equitable relief by each individual affected by the breaches

of fiduciary duties. /d. at 1075-79.

In rejecting this Petitioner’s claim under ERISA for

interference with the right to receive benefits mandated by the

RRA of 1974, the Ninth Circuit held that Congress

“inadvertent[ly] fail[ed]” to include the 1974 RRA within the

exemption from regulation for any “government plan.”

Id. at 351. Congress defined “government plan” in §3(32) of

ERISA “to include any plan to which the Railroad Retirement

Act of 1935 or 1937 applies”. Thus, the appeals court's

decision conflicted squarely with the plain language of the

Statute. Petitioner argued that the lower court ignored

controlling precedents of the Court on legislative interpretation,

such as West Virginia Univ. Hosp. v. Casey, 499 U.S. 83,

111 S.Ct. 1138, 113 L.Ed.2d 68 (1991) and Massachusetts

Mutual v. Russell, 473 U.S. 134, 105 S.Ct. 3085, 87 L.Ed.2d 96

(1985). But the Court also declined to accept certiorari on this

issue.

The Court granted certiorari only on Question Number

Three raised by this Association’s petition for writ of certiorari.

The question specifically presented was,

Do allegations by employee-beneficiaries of a

health av’ welfare benefit plan that their

employer's parent company forced their

employer to discharge them and to contract out

their jobs to another employer in furtherance of

a conspiracy to interfere with their right to

receive health and welfare benefits, state a

cognizable cause of action under §510 of

ERISA?’

SUMMARY OF ARGUMENT

Petitioner Association has pleaded a cause of action

under §510 of ERISA for interference with its members’ right

to receive health and welfare benefits under an employee

benefit plan established as part of the collective bargaining

agreement (CBA) between the Teamsters Union and various

employers. Petitioner alleges that its members were wrongfully

discharged from their employment with Respondents Santa Fe

for the purpose of interfering with their right to receive health

and welfare benefits under the CBA. Under the plain language

of the statute and the persuasive Circuit court decisions, these

allegations properly state a cause of action under §510 of

ERISA.

*Although the main focus of this brief is upon the

specific language of the statute and the particulars of the

ERISA jurisprudence, Petitioner contends that this case is

fundamentally about access to the courts. See infra

Argument at VI.

9 -

The clear language of §510 of ERISA prohibits

discharges or other interferences with an employee's exercise of

any right or with the attainment of any right under an “employee

benefit plan.” Congress defined the terms plan or employee

benefit plan to include both pensions and health and welfare

plans. 29 U.S.C. §1002(3). Therefore, no basis exists in the

statutory language for the Ninth Circuit's interpretation of §510

to not protect employees from interferences with their right to

receive health and welfare benefits, as well as pension benefits.

Congress repeatedly emphasized the broad remedial

purposes of ERISA. The Ninth Circuit's interpretative

shrinking of the protections afforded by §510 not only ignores

the plain language of the statute but also contradicts Congress’

intent behind ERISA.

In Ingersoll-Rand v. McClendon this Court recognized

that an employee fired to prevent him from vesting in a pension

had a claim under §510. Employees covered by a health and

welfare plan have a present “right” to receive benefits provided

they are employed and suffer a loss covered by the plan.

Throughout the duration of their employment under the CBA

those employees have a right to make claims for health

insurance benefits. Respondents can cite to nothing in the

record to support a claim that they legally could have modified

or terminated health and welfare coverage for the members of

Petitioner Association. The other Circuits uniformly hold that

adverse employment actions which have the purpose of

interfering with the right to receive non-vested health and

welfare benefits are actionable under §510.

This Court’s cases interpreting §8(a)(3) of the National

Labor Relations Act (after which Congress modeled §510 of

ERISA) establish that employers cannot subcontract out work

for the purpose of interfering with employees’ rights to

10

collectively bargain and organize. That is, an employer may not

subcontract out work to a nonunion employer as soon as it

learns that its employees intend to unionize. Likewise,

employers like the Santa Fe Respondents cannot subcontract out

the work performed by the members of Petitioner Association

for the purpose of denying those employees benefits payable

under the CBA and federal laws (including the Railroad

Retirement Act).

Employees wrongfully discharged in violation of §510

may recover not only lost plan benefits but also back pay and

front pay. Those latter items of recovery qualify as “other

appropriate equitable relief” under §502(a)(3)(B) of ERISA.

Under all other statutes prohibiting wrongful employment

actions, Congress and this Court have recognized a right to

recover back and front pay. This Court in /ngersoll-Rand v.

McClendon stated that in a §510 action for interference with the

employee's ability to vest in his pension, the relief requested --

damages for future lost wages, mental anguish and punitive

damages -- was “well within the power of federal courts to

provide.”

The broad remedial purposes of ERISA recently

confirmed by the Court in Varity Corp. v. Howe strongly

counsel in favor of recognizing that wrongfully discharged

employees should, at the very least, recover their lost wages. A

court cannot make whole a terminated employee merely with an

award of unpaid plan benefits under §510. Such a limited view

of Congress’ remedial intent does injustice to the statute and the

employees it was intended to protect. Full restitution must be

the proper measure of damages.

At the most fundamental level this case is about the

denial of access to justice. The state-law remedies of the

Petitioner's members were stripped from them by Congress in

its enactments of §510. The Court’s preemption decisions have

confirmed that involuntary, mandatory substitution of the

Federal remedy. The per curiam decision of a panel of the

court of appeals does violence to the ancient yet still vigorous

doctrine that there exists a right to a remedy for every wrong.

ARGUMENT

1.

THE APPLICABLE STANDARD OF REVIEW

FAVORS PETITIONER’S PLEADING

The district court granted Respondents’ motion to

dismiss for failure to state a claim. The standard of review to

determine the legal adequacy of the Complaint is familiar. The

Court gives the Complaint its broadest intendment, and

construes the allegations favorably to the pleader. The Court

will not uphold a dismissal for failure to state a claim unless it

determines with certainty that plaintiff cannot prove any set of

facts to support the claim. Scheuer v. Rhodes, 416 U.S. 232,

236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). The principle

question before the Court is whether Petitioner alleged a prima

facie claim for wrongful discharge under §510 of ERISA. To

reach this issue the circuit courts generally have analogized to

claims under Title VII, 42 U.S.C. §2000e-2, and the Age

Discrimination in Employment Act (ADEA), 29 U.S.C. §623.

The circuit courts have_held that “to establish a prima facie case

under ERISA §510, an employee must demonstrate

(1) prohibited employer conduct (2) taken for the purpose of

interfering (3) with the attainment of any right to which an

employee may become entitled.” Gavalik v. Continental Can

Co., 812 F.2d 834, 852 (3d. Cir.), cert. denied, 484 U.S. 979,

108 S.Ct. 495, 98 L.Ed.2d 492 (1987). See, generally, Dister v.

Continental Group, Inc., 859 F.2d 1108, 1112 (2d Cir. 1988).

12

At the pleading stage the other two steps in the Court’s three-

step analytical framework of shifting burdens and presumptions

for wrongful discharge cases, see McDonnell Douglas Corp. v.

Green, 411 U.S. 792, 802-05, 93 S.Ct. 1817, 36 L.Ed.2d 668

(1973) and Texas Dept. of Com. Affairs v. Burdine, 450 U.S.

248, 252-53, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), are not

implicated. See, e.g., Scheuer v. Rhodes, supra.

THE COURT'S PRECEDENTS ON STATUTORY

INTERPRETATION AND THE CONSTITUTIONAL

LIMITS ON A COURT IN CONSTRUING THE INTENT

OF CONGRESS MANDATE REVERSAL OF THE

NINTH CIRCUIT’S OPINION

To resolve the question here on review, the Court must

interpret §510 of ERISA and discern the intent of Congress.

Dole v. United Steelworkers, 494 U.S. 26, 35, 110 S.Ct. 929,

108 L.Ed.2d 23 (1990). To do so, the Court begins by looking

at the language of the statute. /d., and Varity, 116 S.Ct. at 1085

(Thomas, J., dissenting) (“in every case involving construction

of a statute, the starting point is the language itself”) (internal

quotations omitted). If Congress plainly and unambiguously

has drafted a statute, the Court need look no further. United

States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 240-41,

109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) (“where, as here, the

statute’s language is plain, ‘the sole function of the court is to

enforce it according to its terms’”). The courts have a duty to

“give effect, if possible, to every clause and word of a statute.”

Moskal v. United States, 498 U.S. 103, 109-10, 111 S.Ct. 461,

112 L.Ed.2d 449 (1990). The Court’s cases “express a deep

reluctance to interpret a statutory provision so as to render

superfluous other provisions of the same enactment.” Pa. Dept.

of Pub. Welfare v. Davenport, 495 U.S. 552, 562, 110 S.Ct.

13

2126, 109 L.Ed.2d 588 (1990) and Varity, 116 S.Ct. at 1082

(Thomas, J., dissenting) (“courts should disfavor interpretations

of statutes that render language superfluous”).

Only if the statutory phrase is ambiguous should the

Court look beyond the statute’s language and examine the

legislative history. Ron Pair Enterprises, 489 U.S. at 242. If

the Court cannot determine Congress’ intent from the legislative

history, then the Court employs traditional rules of statutory

construction. Dole, 494 U.S. at 36.

The Court is bound to recognize and effectuate

Congress’ intent where it is clear from the words of the statute.

Courts must presume that “a legislature says in a statute what it

means and means in a statute what it says there.” Connecticut

Nat. Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146,

117 L.Ed.2d 391 (1990). Such is the case here. Congress spoke

plainly, but the opinion below turned a deaf ear to its plain

language.

The courts are not permitted to assume that Congress

inadvertently omitted a particular portion of a statute.

Massachusetts Mutual, 473 U.S. at 143 (finding the

“assumption of an inadvertent omission” in ERISA “especially

suspect”), cited in Varity, 116 S.Ct. at 1082 (Thomas, J.,

dissenting). And courts may not interfere with the language

Congress chose by supplying omitted phrases. West Virg. Univ.

Hosp., 499 U.S. at 101 (“what [respondent] asks is not a

construction of a statute, but, in effect, an enlargement of it by

the court, so that what was omitted, presumably by

inadvertence, may be included within its scope. To supply

omissions [in a statute] transcends the judicial function”)

(quoting Brandeis, J.).

14

THE LANGUAGE OF THE STATUTE IS

UNAMBIGUOUS AND PETITIONER’S CLAIM IS AN

UNEMBELLISHED APPLICATION OF THE

STATUTE’S PLAIN TERMS

Section 510 of ERISA, 29 U.S.C. §1140, reads exactly

as follows:

It shall be unlawful for any person to discharge,

fine, suspend, expel, discipline, or discriminate

against a participant or beneficiary for

exercising any right to which he is entitled under

the provisions of an employee benefit plan, this

subchapter, section 1201 of this title, or the

Welfare and Pension Plans Disclosure Act, or

for the purpose of interfering with the

attainment of any right to which such participant

may become entitled under the plan, this

subchapter, or the Welfare and Pension Plans

Disclosure Act.

29 U.S.C. §1140. In light of the Congressional definitions of

the terms “employee benefit plan” and “plan” to include health

and welfare plans, discussed infra, the conduct prohibited by

the terms of §510 seems quite obvious, or, at a minimum, not

so murky as to serve as a breeding ground for any mysteries

about intent.

Petitioner submits that its claims and those of its

members present a straightforward application of §510. By its

own terms the statute prohibits firing employees for exercising

plan rights or to prevent employees from “attain[ing]” rights

under a plan. In its Complaint, Petitioner alleges that

15

Respondents conspired to discharge its members from the

employment with Respondent SFTS for the purpose of lowering

the amount of health and welfare and retirement benefits that

they would receive. By its clear terms set out above §510 of

ERISA prohibits —

“any person” from taking various actions,

including the “discharge” of a “participant,”

either for “exercising any right under the

provision of an employee benefit plan,” or

“for the purpose of interfering with the

attainment of any right to which such participant

may become entitled under the plan.”

A. The Clear Language Of §510 Shows That It Prohibits

Discharges From Employment For The Purpose Of

Interfering With Health And Welfare Benefits

The Ninth Circuit found that despite the broad wording of

§510 it did not apply to discharging employees for the purpose

of interfering with the attainment of benefits under a health and

welfare insurance plan since those benefits are not vested.

80 F.3d at 351. The statute does not contain any such

limitation. Should it have desired to do so, Congress could

have limited §510 to interferences with benefits that had vested

or would vest, such as pension plans.’ Instead, Congress chose

to draft §510 with specific words to prohibit interferences with

*Congress defined in §3(A) of ERISA, 29 U.S.C.

§1002(2)(A), the terms “employee pension plans” and

“pension plans”.

16

any “employee benefit plan” or “plan.” Congress defined

employee benefit plan and plan to include:

an employee welfare plan or an employee pension

benefit plan or a plan which is both an employee

welfare benefit plan and an employee pension benefit

plan.

ERISA §3(3), 29 U.S.C. §1002(3). Shaw v. Delta Airlines, Inc.,

463 U.S. 85, 90, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983).* To

rationalize the Ninth Circuit’s conclusion, this Court would

have to decide to supply an “omission” into the statute. L.e., the

Court would have to legislate in the missing language limiting

interference actions to employers’ interferences with pension

benefits only. Courts do injustice to the separation of powers

set out in Articles I and III of the Constitution by impermissibly

acting as a super-legislature when supplying terms to limit the

reach or scope of a broadly worded remedial statute. This Court

has never done so. Indeed, the Court has stated that it is

“reluctant to tamper with an enforcement scheme crafted with

such evident care as the one in ERISA.” Massachusetts Mutual,

473 U.S. at 147.

Moreover, the language of §510 makes clear that Congress

intended to prohibit interferences with vested and non-vested

‘In pertinent part, Congress defined the terms

“employee welfare benefit plan” and “welfare plan” to

include “any plan, fund, or program ... established or is

maintained for the purpose of providing for its participants

or their beneficiaries, through the purchase of insurance or

otherwise, (A) medical, surgical, or hospital care or benefits,

or benefits in the event of sickness, accident, disability,

death or unemployment, or vacation benefits.” ERISA

§3(1), 29 U.S.C. §1002(1).

17

benefits. The statute first proscribes actions against a

participant or beneficiary “for exercising any right to which he

is entitled” under a plan. The plain language of that phrase

means rights which the participant presently enjoys. For

example, injured employees have a present contractual right to

make claims for health insurance benefits under their employee

welfare benefit plan. See Owens v. Storehouse, Inc., 984 F.2d

394, 398 (11th Cir. 1993) (“employer may contractually bind

itself to provide fixed medical benefits”). Likewise,

participants presently vested in a pension plan have a right to

claim pension benefits provided they meet the eligibility

requirements. By virtue of their status as employees under their

union contract up till the day of their discharge, Petitioner’s

members had the right to make hospital and other healthcare

benefits claims under the Teamsters’ health and welfare plan to

which their employer was a signatory.

Section 510 in its second clause expressly prohibits acts

undertaken “for the purpose of interfering with the attainment

of any right to which such participant may become entitled

under the plan” (emphasis added) as well as the acts prohibited

by the first clause. The highlighted portions of the second

clause permit no reasonable inference other than that the statute

prohibits interference with the attainment of future employee

benefits, particularly when read together with the first clause

which speaks of benefits in the present tense.’ Employees

‘In another context, this Court has indicated that the

word “may” means “contingency or liability, or possibility

or probability”. U.S. v. Lexington Mill, 232 U.S. 399, 411,

34 S.Ct. 337, 58 L.Ed. 658 (1914). Webster's defines the

word “become”, in one of its meanings, as “to pass from one

state to another, to enter into some state or condition, by a

change from another state or condition, or by assuming or

receiving new properties or qualities, additional matter, or a

covered by a collective bargaining agreement (“CBA”) which

has a specific termination date possess an expectancy

(contractual right) to make claims for health and welfare

benefits, at least for the duration of their employment under the

CBA, when they or their family members suffer a covered

injury. Here, the CBA would not have expired for another full

year, until March 31, 1991. Petitioner's members were

discharged on March 31, 1990. Prior to their discharge, these

employees had a future right to “attain” health and welfare

benefits, that is, to make claims under those plans if they or

their family suffered a covered injury, at least until March 31,

1991. Moreover, the Ninth Circuit's focus upon “vested”

benefits as the only ones protected, 80 F.3d at 350-51, is

patently contradicted by the plain language of the second clause

of §510 with its usage of such future-oriented words as

“attainment” and “may become entitled”.

Neither elemental logic nor the history of this legislation nor

the experience of 20-plus years of employers and employees

operating under this law permits a distinction between

discharges which prevent pension benefits from vesting and

discharges that prevent employees from making claims for

health and welfare benefits under a CBA. An employee who

does not yet qualify because of years of service and age for

vested status in his/her pension does not have a present “right”

to make a claim for pension benefits. In /ngersoll-Rand this

Court found that “[b]y its terms, §510 protects plan participants

from termination motivated by an employer’s desire to prevent

a pension from vesting.” 498 U.S. at 143. See also Hazen

Paper Co. v. Biggins, 507 U.S. 604, 612, 113 S.Ct. 1701,

123 L.Ed.2d 338 (1993) (same). As best we can discern,

new character... to come into being”. Webster's New

Universal Unabridged Dictionary p. 164 (2d ed. 1983).

19

nowhere in the legislative history of ERISA did Congress

indicate that it desired to limit the remedial scope of §510 to

interferences with the night to receive or attain pension benefits

that will vest at some date, but simultaneously to exclude future

health benefits. But our National legislature did specifically

state that §510 will prevent an employer from discharging an

employee “to interfere with attainment of vested benefits or

other rights under the bill....”. See Gavalik, 812 F.2d at 852,

n.32, citing S. Rep. No. 127, 93d Cong., Ist Sess. at p.35

(1973), reprinted in | Legislative History of the Employment

Retirement Income Security Act of 1974 (Senate Committee

Print, hereinafter “Leg. Hist.”) at 621-22, and Senate Floor

Debates, 2 Leg. Hist. at 1641 and 1811, 3 Leg. Hist. at 4745.

Chief Judge Higginbotham in Gavalik wrote that a broad

protective purpose for §510 “is supported by the legislative

history which envisions preventive, as well as corrective,

purposes of the provision.” /d at 856. Absolutely nothing in

the legislative record suggests that Congress intended the

language of §510 to permit an employer to discharge employees

who enjoyed a contractual right to obtain health and welfare

benefits for a defined period in order to force them to accept

lower levels of health and welfare benefits.° So the Ninth

Circuit’s artificial distinction between health and welfare

benefits and pensions, 80 F.3d at 350-51, is a judicially-created

anomaly at variance with the plain language of the statute and

the obvious intent of Congress.

“Senate Report No. 93-127, p.14, 93d Cong.

I st Sess., broadly states that “no person can interfere with or

discriminate against a participant with respect to rights and

privileges which such person is entitled to under the plan,

Act or the WPPDA.” | Leg. Hist. at 600. See also H. Rep.

No. 93-533, p.17, 93d. Cong., Ist Sess., 2 Leg. Hist. at 2364

and Conf. Rep. No. 93-1280, p.330-31, 93d Cong., 2d Sess.,

3 Leg. Hist. at 4597.

20

Respondents may answer that because ERISA does not

“generally” limit an employer’s ability to modify or terminate

employee health insurance benefits, see Curtiss-Wright Corp.

v. Schoonejongen, 115 S.Ct. 1223, 1228, 131 L.Ed.2d 94

(1995), an employer can fire its employees to achieve the same

result. If one were to suppose that the Ninth Circuit tacitly has

adopted the automaticity of this misleading syllogism, at least

one could discern some intellectual principle underlying its

decision. Petitioner respectfully contends that the panel’s logic

was flawed. Congress has spoken cogently and plainly to the

contrary. Petitioner recognizes that ERISA does not limit an

employer's s ability to modify or terminate employee health

insurance.’ But in light of Congress’ clear prohibition in §510

against an employer terminating its employees to achieve a

different level of health and welfare benefits, the inescapable

resolution of the seeming paradox must be that the right to

change (or even to end) benefits does not extend to the freedom

to engage in prohibited employment practices against

Curtiss-Wright does not hold that employers may

ignore contractual limitations on their ability to modify or

terminate health and welfare benefits. Indeed, some of the

circuit courts of appeal have recognized that employers and

employees, usually through union representation, may agree

that the employer cannot modify health and welfare benefits

for the duration of the CBA, thus “vesting” such benefits for

that time period. Golden v. Kelsey-Hayes Co., 73 F.3d 648,

655 (6th Cir.), cert. denied, 117 S.Ct. 49, 136 L.Ed.2d 13

(1996) and Anderson v. Alpha Portland Indust., 836 F.2d

1512, 1546-17 (8th Cir.), cert. denied, 489 U.S. 1051, 109

S.Ct. 1310, 103 L.Ed.2d 579 (1989) (noting that Congress

took a “neutral position” on the issue of welfare benefit

vesting, and that “we must determine whether ‘the parties

intended [that] retirees’ benefits would be vested and not

tied to the agreement which created them’”).

21

employees to achieve such a change. It is one thing to say an

employer can modify or terminate an employee health insurance

plan. But it would be wholly an unprincipled excursion to find

that Congress intended that employers have freedom to

terminate employees in order to achieve lower health and

welfare benefits.*

This Court has had little occasion to interpret §510.

Petitioner submits the /eitmotif must be access to the courts to

remedy unjust employment actions taken to interfere with plan

benefits. In the context of a breach of fiduciary duty claim

under §404, the Court held last term that an employer and its

controlling parent corporation violated fiduciary duties by lying

to their employees about the financial health of a new

corporation and the safety of their health insurance benefits for

the purpose of inducing the employees to transfer to the new

corporation. Varity Corp., 116 S.Ct. at 1068-69. At the time

they made those misrepresentations, the employer there knew

that the new corporation would fail and that its employees

"In Heath v. Varity Corp., 71 F.3d 256, 258 (7th Cir.

1995), the court found no real contradiction between an

employer’s freedom to modify health and welfare benefits

not contractually guaranteed for a specific term and §510's

prohibition against discharges to effectuate that end: “That

employers won a battle and secured the right to modify

plans, while employees prevailed in a different skirmish and

secured the right to qualify for benefits under existing plans,

shows no more than that each side could claim some

victories. It upsets the legislative balance to push the

outcome farther in either direction.” The circuit court held -

that an employee, already vested for future retirement

benefits, could sue under §510 for his employer having

discharged him to prevent him from obtaining eligibility for

early retirement benefits (nonvested).

22

would lose both their jobs and their health insurance benefits.

Just one year after the employer had fraudulently induced its

employees’ transfer, the new company failed and the employees

lost their health insurance benefits and jobs. /d. See also id. at

1074: “[t]o participate knowingly and significantly in deceiving

a plan’s beneficiaries in order to save the employer money at the

beneficiaries’ expense, is not to act solely in the interest of the

participants and beneficiaries”. The majority of the Justices of

this Court in Varity broadly interpreted ERISA’s remedial

section to provide wronged employees with a direct remedy

under that statute when their employer bilked them of welfare

and health benefits. The Court found that

ERISA’s basic purposes favor a reading of the third

subsection [§1132(a)(3)] that provides the plaintiffs

with a remedy. The statute itself says that it seeks “to

protect ... the interests of participants .. and .

beneficiaries ... by establishing standards of conduct,

responsibility, and obligation for fiduciaries ... and ...

providing for appropriate remedies ... and ready access

to the Federal courts”.

Id. at 1078 (emphasis added). The Court held that the

employees’ claim for individual relief existed by virtue of

§502(a)(3) of ERISA, providing for the recovery of “other

appropriate equitable relief,” 29 U.S.C. §1132(a)(3).’ But under

the circuit court’s per curiam interpretation of ERISA,

employees have no access to a Federal court to obtain a remedy

*The district court in Varity had ordered that the

employees be reinstated into the Massey Ferguson health and

welfare plan, and ordered payment of “certain monetary

relief” that was not at issue before the Court. 116 S.Ct. at

1069.

23

~__

for any wrongful interference, no matter how intentional in its

origin or malicious in its impact, with their contractual right to

receive health and welfare benefits set out ina CBA. That

conflicts with the specific intent of ERISA as interpreted by the

majority of this Court in Varity. Paradoxically, the circuit

court’s decision here also clashes with the motivating principles

of the dissenting justices in Varity who adhered to the

magisterial principles of Justice Scalia in West Virginia

University Hospitals concerning “plain language” interpretation

of Congressional intent. 116 S.Ct. at 1081-82, 1085-86

(Thomas, J., dissenting). Varity stands for the rule that

employees may sue under ERISA for wrongful interference with

the right to receive health and welfare benefits, although the

Court did not precisely address there the question presented

here. But the court of appeals held that such benefits are

beyond the reach of an ERISA §510 interference action. The

opinion below reached a perverse result as a matter of

responsible public policy, and it did so for a perverse reason

under principles of statutory construction. The circuit court’s

scanty reasoning and cavalier approach simultaneously offend

the holdings and the motivating principles of both the majority

and the dissent in Varity.

Respondents can present no principled argument for

denying access to the courts for employees who sue directly

under §510 for their wrongful discharge motivated by an intent

to interfere with their health and welfare benefits. Under the

Court’s finding in Varity employees have a claim for breach of

fiduciary duties for inducing them to transfer to a failing

company when their employers’ preordained benefits loss

occurs a year later. Here, the employer and its co-conspirators

did not even reach for the fig leaf of delaying the loss of

benefits. The point is access to justice whether the affected

employees seek to redeem the preempted state rights that would

have been available to them under common-law trust or tort

24

theories. The Varity majority found that Congress intended to

prohibit employer conduct that wrongfully interferes with the

right to receive health and welfare benefits. Petitioner submits

that in drafting §510 (“it shall be unlawful for any person to

discharge ... a participant for exercising any right ... or for the

purpose of interfering with the attainment of any right to which

such participant may become entitled under the plan’) Congress

plainly intended to more forcefully state its opposition to such

interference than in the more generally worded prohibition

against breaches of fiduciary duties in §404(a) (requiring a

fiduciary to “discharge his duties with respect to a plan solely

in the interests of the participants”).

It requires little effort to discern valid policy reasons why

Congress preferred to require that employers negotiate with

their employees (or representatives) about reductions in health

and welfare benefits (where a CBA guarantees payment of

benefits for a specific time), or simply unilaterally reduce their

workers’ benefits (if no contract guaranteeing nonmodifiable

benefits is in force), rather than to promote mass discharges or

employers resorting to termination of their employees to

achieve that result. Promoting workplace stability and job

security is such a valid policy goal. So is stability in the

personal lives of workers who labor for such benefits. So are,

most especially, the avoidance of labor unrest and labor-market

disruptions.

This Court has noted that in drafting ERISA, Congress

“repeatedly emphasized [its] purpose [was] to protect

contractually defined benefits.” Massachusetts Mutual,

473 U.S. at 148 and n.16. In Shaw, 463 U.S. at 90, this Court

described ERISA as “a comprehensive statute designed to

promote the interests of employees and their beneficiaries in

employee benefit plans.” It would hardly serve Congress’

purpose and design to permit employers — such as Respondents

25

Santa Fe — to engage in mass discharges of their employees

through sham “contracts” to force upon them lesser health and

welfare benefits than those required under an existing contract.

Central to the Court's decision in Varity was the recognition

that Congress intended ERISA to “provide both the Secretary

and participants and beneficiaries with broad remedies for

redressing or preventing violations of [ERISA].’” 116 S.Ct. at

1078, citing Senate and House Reports on ERISA, reprinted at,

1 Leg. Hist. at 621 and 2 Leg. Hist. at 2364 (1976) (emphasis

added). In Varity Justice Breyer posed magisterially rhetorical

questions focusing on why and how the Court might find, in

light of the legislative history and the language of the statute,

that Congress intended to restrict access to justice or to deny to

employees a remedy for employers’ actions that wrongfully

deprive health insurance benefits. 116 S.Ct. at 1077. The Court

resoundingly found that no such limitation existed. “We are not

aware of any ERISA-related purpose that denial of a remedy

would serve.” /d. at 1079. Even more so in this case, there can

be found no teneble ground to hold that Congress intended to

deny access to justice.

In /ngersoll-Rand the Court noted that ERISA

sets various uniform standards, including rules

concerning reporting, disclosure, and fiduciary

responsibility, for both pension and welfare plans. As

part of this closely integrated regulatory system

Congress included various safeguards to preclude abuse

and “to completely secure the rights and expectations

brought into being by this landmark reform legislation”

Prominent among these safeguards are three provisions

of particular relevance to this case: ... §510, which

proscribes interference with rights protected by ERISA.

26

498 U.S. at 137 (emphasis added, citations omitted). If the

Court had believed that §510 did not apply to interference with

health and welfare benefits it presumably would not have

employed such sweeping preemption language with any

qualification or reservation. /d. at 138-40. The Court there

appropriately could have noted the existence of such a

distinction limiting access in the statute. But the Court cited to

the broad range of its ERISA-preemption jurisprudence,

including Pilot Life v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549,

95 L.Ed.2d 39 (1987) without distinction as to type of benefits

sought. The Court in /ngersoll-Rand went on to note the

importance to Congress of §510: “Congress viewed this section

as a crucial part of ERISA because, without it, employers would

be able to circumvent the provision of promised benefits.”

498 U.S. at 143 (citations omitted).

Here Petitioner alleged that, at least through the duration of

the National Master Freight Agreement (NMFA), its members’

employer had promised to make contributions to the Teamsters

Health and Welfare Fund at certain levels (Writ Pet. App. IV at

p.26a, 419 and p.29a, 435). Petitioner further alleged that, as

part of their scheme to deprive the members of health and

welfare (and retirement benefits), Respondents conspired to

deprive them of those benefits by discharging Petitioner's

members from their employment and entering a sham contract

with Respondent ITS to hire the same employees to do the same

work at the same location with the same equipment, but at

lesser benefits levels (id at p.26a-30a)."° Thus, Petitioner

‘Although the question of legitimate reason for the

mass discharge of Petitioner's members is not before the

Court at the pleading stage, the facts that Respondent ITS

hired the employees of Respondents Santa Fe to do the same

work at the same place with the same equipment but with

27

alleged that this conspiracy was formulated and implemented

for the purpose of, and did in fact circumvent the provision of

promised benefits. Its allegations clearly fall under the intent of

§510 as expressed by Congress and this Court.

B. The Interpretations Of The Congressional Intent

Underlying §510 Found By Several Other Circuit

Courts Of Appeals In Cozxstruing §510 Likewise

Support Reversal

The Ninth Circuit appears to be the only court of appeals to

have held that a discharge for the purpose of interfering with the

right to receive what the court of appeals deemed “non-vested”

health and welfare benefits is not actionable under §510.'' The

Ninth Circuit noted that its ruling conflicted with at least two

other circuits, 80 F.3d at 350 n.6. No other circuit court of

appeal has arrogated to itself so much legislative power, nor

significantly lesser health and welfare and pension benefits

strongly suggests an illegal motive for the discharge from

employment with Respondents Santa Fe.

"Petitioner does not concede that their right to

receive health and welfare benefits was unvested. It strongly

contests the relevance of the Ninth Circuit’s “vesting”

inquiry. It contends that “vesting” in this context is an

analytically unsound method of inquiry. The evidence may

prove that SFTS and AT&SF had no right under the

applicable CBA’s to modify or terminate contributions to

the health and welfare benefits enjoyed by Petitioner. In that

event, the health and welfare benefits probably could be

considered to have vested for the term of the CBA’s. See

Adcox v. Teledyne, Inc., 2\ F.3d 1381, 1389 (6th Cir.), cert.

denied, 115 S.Ct. 193, 130 L.Ed.2d 126 (1995) (“‘under

certain circumstances,’ employee welfare plan benefits may

vest contractually”) .

28

gone as far as to wholly deny access to the Federal courts to a

major category of §510 litigants. One can read all the circuit

court decisions interpreting §510 but this one in harmony,

provided one focuses on their holdings concerning access under

aiid the intended function of §510 without addressing collateral

issues. The holding of this panel is the irredeemable anomaly

which must be overruled to expunge its potentially corrosive

effect upon the courts, not to speak of its impact upon the

general public.

The question in a §510 action is not whether the employer

has a right to modify benefits levels or wholly eliminate a health

and welfare plan. Rather, the proper inquiry must be, did the

employer discriminate against or otherwise alter the

employment relationship for the purpose of interfering with

ERISA-protected employment benefits? Thus, where a

legitimately motivated employer sells its business to an

unrelated company, or closes its plant for bona fide business

reasons, or modifies its health and welfare plan for legitimate

economic reasons with no intent to discriminate, the

prohibitions of §510 are not implicated.'?, When, however, an

'2See West v. Greyhound Corp., $13 F.2d 951 (9th

Cir. 1987) (sale of business), Adcox v. Teledyne, supra,

21 F.3d 1381 (plant closing), and Owens v. Storehouse, Inc.,

supra, 984 +. 4 394 (plan modification). The holding in

West that the seller of a business was not liable under §510

for interfering with health and welfare benefits because up

to the date of employment termination the employer had paid

all benefits claims, 813 F.2d at 955, ignores the second part

of §510, which prohibits discharges “for the purpose of

interfering with the attainment or any right to which such

participant may become entitled under the plan...” (emphasis

added). The second holding in West -- that the purchaser of

the business was free not to hire the former employees at the

eee

29

employer discharges its employees for the purpose of interfering

with health and welfare benefits, the employees may bring suit

under §510. In this case, Petitioner alleged not a plan

termination or modification, but rather that Respondents

conspired to discharge them to avoid paying health and welfare

and pension benefits at the higher level. This important

distinction is crucial to construing §510 as valid in its plain

terms within the context of a comprehensive, reticulated statute.

Access to justice in the case of the illegally motivated

conspiracy pleaded by Petitioner should be redeemed by the

Court.

In Kross v. Western Electric Co., 701 F.2d 1238 (7th Cir.

1983), the former employees brought a class action under §510

alleging that their employer discharged them “to avoid

continuing to make payment for [their] company-provided life

and medical insurance.” The employer responded that it

discharged the class members as part of a workforce reduction

due to reduced demand for its products. /d. at 1239. Finding

that insurance coverage for medical expenses incurred was a

“right” under the insurance plans, the Seventh Circuit upheld

access to the Federal courts for the employees. The Kross court

found “no support” in the case law or ERISA’s legislative

history for narrowly reading §510 so that it did not cover a

discharge for the purpose of interfering with insurance benefits:

prior level of benefits -- does not control the allegations in

this case of an illegal conspiracy between the “new

subcontractor” employer, Respondent ITS, and the

contracting company, Respondent AT&SF. No actual

statutory “conflict” is presented by the distinction between

a legitimate purchaser’s right to hire whomever it pleases

and holding liable under §510 co-conspirators motivated by

an illegal motive to reduce ERISA-protected employment

benefits guaranteed under ar existing CBA.

30

In light of the fact that ERISA is a remedial statute to be

liberally construed in favor of employee benefit fund

participants, we find no support for the district court's

conclusion that since [the employees] “[were] already ...

participant[s] in the insurance plans, [they were] not

prevented from attaining rights under the plan”.

Id. at 1242. The Kross court supported its interpretation of the

Congressional intent with a quote from a House Report which

declared that underlying ERISA was a

recognition of the necessity for a comprehensive

legislative program dealing not only with malfeasance

and maladministration in the plans, ... but also with the

broad spectrum of questions such as ... plant shut downs

Id, quoting H.Rep. No. 533, p.9-10, 93d Cong, 2d Sess.,

reprinted in 2 Leg. Hist. at 2356-75.

In Seaman v. Arvida Realty Sales, 985 F.2d 543 (1 1th Cir.),

cert. denied, 510 U.S. 916, 114 S.Ct. 308, 126 L.Ed.2d 255

(1993), the employer had first requested that the employee

convert her job status to that of an independent contractor so

that the employer could thus eliminate the cost of providing her

non-vested health insurance and contributions to a 401(k) plan.

When she refused to change her status, she was fired. That

court held that the employee stated a claim under §510 of

ERISA.” The Eleventh Circuit found that

Other circuits have upheld §510 wrongful

discharge claims where the employee alleges that the

termination was to prevent accrual and assertion of claims

unde: employee health insurance plans. Fleming v. Ayers &

31

[t}he validity of a §510 claim does not hinge upon

whether the benefits involved are vested but upon the

purpose of the discharge. ... [Section] 510 prohibits

employers from preventing an employee from taking

advantage of a plan or from applying a plan in a

discriminatory manner.

Id. at 546-47."* The Seaman court noted that although it “may

appear anoma’ous” to permit an employer to reduce or

terminate non-vested benefits while prohibiting an employment

termination to avoid paying benefits, the structure of ERISA

and its history “reveals that it is the result intended by

Congress.” /d at 546. The court reasoned that by providing

participants with the right to recover “benefits due to him under

the terms of the plan,” §502(a)(1)(B), “Congress intended for

the employer to be bound by the terms of its plan.” /d at 547.

See also Stiltner, 74 F 3d at 1484 (“Congress has determined,

by enacting ERISA §510, that once an employer elects to

include certain benefits within its employment package, it

cannot revoke them with the intent to deter employees from

asserting their rights under ERISA”).

Assoc., 948 F.2d 993, 998 (6th Cir. 1991) and Fitzgerald v.

Codex Corp., 882 F.2d 586, 589 (ist Cir. 1989).

‘“(T}he legislative history ... indicates that the

purpose of §510's anti-retaliation provision was to prevent

employers who maintain ERISA plans from using economic

leverage to intimidate participants and beneficiaries under

those plans from exercising their ERISA given rights to

enforce the plans’ terms.” Stilmer v. Beretta USA Corp.,

74 F.3d 1473, 1489 (4th Cir. en banc), cert. denied,

117 S.Ct. 54, 136 L.Ed.2d 18 (1996) (Phillips, J., concurring

and dissenting with four other judges).

32

In Deeming v. American Standard, Inc., 905 F.2d 1124,

1127 (7th Cir. 1990), the court found that an employer's

decision to officially terminate its employees at a plant closing

rather than permitting them to remain on “layoff status” and

thereby to accrue time to qualify for pension benefits, violated

§510: “It is clear from the text of the statute, however, that §510

was designed to protect the employment relationship against

actions designed to interfere with, or discriminate against, the

attainment of a pension right.” See also Heath v. Varity Corp.,

supra, 7\ F.3d 256, where the Seventh Circuit found actionable

under §510 interference with non-vested benefits (early

retirement for employees already vested in the pension plan)

through discharge from employment.

In Conkwright v. Westinghouse Elec. Corp., 933 F.2d 231,

236 (4th Cir. 1991), the court held that §510 prohibits an

employer acting to preyent the accrual of additional benefits by

an employee already vested. That court notably and properly

rejected the vested-nonvested benefits dichotomy favored by

Respondents and the Ninth Circuit:

Surely, Congress was not limiting §510 only to those

rights which a participant acquires upon vesting, or it

easily could have referred to “vested rights”. Similarly,

the statute refers to rights to which a participant “may

become entitled”, which is to say that §5/0 permits suits

for interfering with rights not yet earned

Id. at 237 (emphasis supplied).

If Congress had enacted ERISA with any intent to exclude

from actions under §510 some or any types of interference with

the right to receive health and welfare benefits, or for that

matter any other non-vested benefits, it could have so stated so

in the comprehensive, reticulated language of the statute, or at

33

least in the legislative history. If this Court had believed that

there was any likelihood at all that health and welfare benefits

were intended by Congress to be excluded from the sweep of

§510, then it would appear only reasonable that the Court for

Ninth or Tenth Amendment reasons would not have applied its

complete preemption analysis in /ngersoll-Rand, supra,

498 U.S. at 138-40. Neither the circuit court below nor

Respondents cited any provision of the statute or its history

which compels such a narrow reading of its broad language.

Indeed, by its plain language §510 expressly prohibits

employers from discharging employees

for exercising any right to which he is entitled under the

provisions of an employee benefit plan ... or for the

purpose of interfering with the attainment of any right

to which such participant may become entitled under the

plan.

(emphasis added). The Ninth Circuit's per curiam opinion thus

conflicts with the clear language of the statute, the teachings of

Casey and Varity, and the holdings of at least six of the other

circuit courts of appeal - the First, Third, Fourth, Sixth, Seventh

and Eleventh Circuits.

IV.

THE COURT’S PRECEDENTS INTERPRETING

CONGRESS’ PROHIBITIONS AGAINST UNLAWFUL

EMPLOYMENT PRACTICES UNDER OTHER

STATUTES GOVERNING LABOR AND EMPLOYMENT

RELATIONS COUNSEL REVERSAL OF THE

DECISION BELOW

In a broader labor relations context, the Court has declared

the illegality of an employer subcontracting out parts of its work

34

Or moving its business to another location (“runaway shop’”’) for

the purpose of discriminating against its employees or

interfering with their rights to organize and collectively

bargain.’ Such otherwise arguably legal conduct becomes

illegal because of the employer’s improper motive, and such

actions violate §8(a)(1) and (3) of the National Labor Relations

Act (NLRA), 29 U.S.C. §158. See Textile Workers v.

Darlington Manufacturing Co., 380 U.S. 263, 274, 85 S.Ct.

994, 13 L.Ed.2d 827 (1965). An employer violates §8(a) of the

NLRA by unilaterally changing the terms and conditions of

employment, including health insurance benefits governed by

existing CBA’s. See Allied Chemical Workers v. Pittsburg

Plate & Glass Co., 404 U.S. 157, 159, 92 S.Ct. 383, 30 L.Ed.2d

341 (1971): It appears likely that such a concern may have

motivated Respondents Santa Fe to construct their sham

arrangement with Respondent ITS which gave rise to this case.

Finally, a successor employer (even a new owner) cannot refuse

to hire a predecessor’s employees solely because they belonged

to a union or to avoid recognition of the union. See Howard

Johnson's, Inc. v. Hotel & Rest. Employees and Bartenders

Union, 417 U.S. 249, 262 n.8, 94 S.Ct. 2236, 41 L.Ed.2d 46

(1974).

The cases cited above are all examples of how otherwise

proper actions by an employer have been declared illegal by

Congress, and found by the Court to result in liability because

'“The legislative history of ERISA §510 does make

clear, however, that the statute was modeled on §8(a\(3) of

the National Labor Relations Act (NLRA).” Stiltner,

74 F.3d at 1483 (citing 2 Legis. Hist. at 1775). The NLRA

and cases construing it thus may guide the Court in its

interpretation of §510 of ERISA. See generally Cannon v.

Univ. of Chicago, 441 U.S. 677, 694-701, 99 S.Ct. 1946,

60 L.Ed.2d 560 (1979).

35

of illegality of the underlying motivations for those employer

behaviors. The analogy of such holdings to the litigation

brought by Petitioner IMREA is virtually perfect. Indeed, this

Petitioner’s case is more compelling than one involving only an

illegal motive. Respondents Santa Fe subjected these

employees to the most drastic of personnel practices —

discharge. Respondents because of their illegal benefit-

defeating motive have chosen to engage in prohibited

employment practices against this entire group of discharged

employees in order to obtain quickly a result they might

otherwise have achieved more slowly but legally. This focus

upon an employer’s conduct and motivation pervades the

jurisprudence of labor relations. See, for example, Lingle v.

Norge Division of Magic Chef, 486 U.S. 399, 108 S.Ct. 1877,

100 L.Ed.2d 410 (1988). The specifics of this employer

conduct and motivation compel liability against the

Respondents.

Petitioner alleged that “[a}t all times relevant hereto,

defendant AT&SF exercised day-to-day management and

control over the affairs of its wholly owned subsidiary,

defendant SFTS” (Writ. App. IV at p.22a, 98). Petitioner

further alleged that its members’ nominal employer, SFTS,

“was formed for and its sole purpose was to do the loading and

unloading work” at Respondent AT&SF’s Los Angeles railyard

(id. at p.25a, 415). For two decades no contract existed between

Respondents AT&SF and SFTS to do that work. But in an

effort to “legitimize” this unlawful conspiracy a sham contract

was formed between the parent and its subsidiary. Less than

two months later, AT&SF “terminated” the SFTS contract and

opened the work for “competitive” bidding. Respondent ITS

then “underbid” SFTS by agreeing with AT&SF to substantially

reduce all employment benefits, including health and welfare

36

and retirement benefits (id. at p.27a-30a).'"° After AT&SF and

SFTS fired all the members of Petitioner Association, ITS

rehired most of them to do the same work in the same place

with the same equipment but at lower benefit levels (id at

p.28a, 429). Thus, if Petitioner can establish that AT&SF’s

contract with ITS was motivated by an intent to interfere with

ERISA-protected benefits set out in the applicable CBA’s, then

its members should be held to have stated a viable claim under

§510. In contrast, if the Court should fail to reverse here, the

Ninth Circuit opinion will create major dissonance with the

Court’s precedents mentioned herein and Congress’ overall

scheme for labor relations conducted through collective

bargaining.

V.

THE RELIEF PROVIDED TO PETITIONER’S

MEMBERS IN THIS ACTION UNDER ERISA FOR

WRONGFUL DISCHARGE MUST AFFORD

COMPLETE RESTITUTION TO QUALIFY AS THE

“APPROPRIATE EQUITABLE RELIEF” REQUIRED BY

THE STATUTE

Fairly within the scope of the question posed in the question

on which petition for certiorari was granted, and therefore

properly before the Court, Varity, 116 S.Ct. at 1070, is the issue

of the type of relief available in this action to enforce violations

"Because ITS was not a “railroad” employer, it did

not have to make contributions to the Railroad Retirement

Fund. That resulted in a savings to Respondent AT&SF of

over $6,000 per employee per year, representing the excess

amount a railroad employer contributed over a non-railroad

employer’s contributions to Social Security (Writ App. V at

p.38a-39a).

37

of §510. In /ngersoll-Rand the Court found that in light of the

broad pre-emptive force of §514 of ERISA, 29 U.S.C. §1144,

an employee wrongfully discharged for the purpose of

preventing him from attaining vested status for his pension

benefits could find his “exclusive remedy” only under §502(a)

of ERISA for violations of §510. 498 U.S. at 145. Regarding

the scope of the employee’s remedy, the Court held that

there is no basis in §502(a)’s language for limiting

ERISA actions to only those which seek “pension

benefits”. Jt is clear that the relief requested here is

well within the power of federal courts to provide.

Id. (emphasis added). The employee in that case did not seek

lost pension benefits “but [was] instead seeking future lost

wages, mental anguish and punitive damages as a result of

the wrongful discharge”. /d. at 136 (emphasis added).

Although the Court did not directly address there the issue of

available relief, its unanimous dictum persuaded many that a

wrongfully discharged employee might recover lost wages in

addition to plan benefits lost. Indeed, the availability of the six

enforcement provisions of §502(a) was central to the Court’s

finding of preemption. /d. at 143-44.

Part of this question is, did Congress mean to include front

pay or reinstatement and back pay within §502(a)(3)(B), which

allows a participant or beneficiary to bring a civil action “to

obtain other appropriate equitable relief?” The Circuits split on

this issue. Compare Schwartz v. Gregori, 45 F.3d 1017 (6th

Cir.), cert. denied, 116 §.Ct. 77, 133 L.Ed.2d 36 (1995)

(allowing recovery of front and back pay) with Harsch v.

Fisenberg, 956 F.2d 651 (7th Cir.), cert. denied, 506 U.S. 818,

113 S.Ct. 61, 121 L.Ed.2d 29 (1993). In the context of a claim

for breach of fiduciary duty against a nonfiduciary, this Court

held in Mertens v. Hewitt Associates, 508 U.S. 248, 255,

38

113 S.Ct. 2063, 124 L.Ed.2d 161 (1993), that losses resulting in

underfunding of a pension plan were compensatory damages,

the “classic form” of legal relief, and not recoverable under

§502(a)(3). Mertens did not address the issue at bar. Rather,

the Court there interpreted §502(a)(3) within the limited context

of a breach of fiduciary duty claim. Here, of course, Petitioner

has brought a claim for wrongful discharge under a different

statute of ERISA which Congress has deemed to be their

mandatory substitute for the entire panoply of their California

tort-law remedies. The four dissenting Justices in Mertens

noted that “we have elsewhere recognized the anomaly of

construing ERISA in a way that ‘would afford Jess protection to

employees and their beneficiaries than they enjoyed before

ERISA was enacted’”. 508 U.S. at 264 (White, J., dissenting).

The Mertens dissent went on to state that “[{t]he traditional

‘equitable remedies’ available to a trust beneficiary included

compensatory damages.... This included, where necessary, the

payment of a monetary award to make the victims of the breach

whole.” /d. at 266 (citations omitted).

Because §510 fundamentally prohibits discrimination in

employment status and preempts all state torts for wrongful

discharge related to pensions and benefits, it is only reasonable

that Congress intended to provide not only corresponding

Federal rights, but also analogous Federal remedies. At a

minimum lost employment damages such as back pay and front

pay (in lieu of reinstatement) are appropriate remedies along

with recovery of lost plan benefits. This Court recognized in

Varity that Congress intended ERISA to provide “broad

remedies” to redress violations of the statute. Thus, Varity

found §502(a)(3) to be a “catchall” relief provisiou that “act[{s]

as a safety net” for injured plan participants. 116 S.Ct. at 1078.

A court cannot make whole an employee wrongfully discharged

in violation of §510 by awarding only lost plan benefits. Broad

restitution for lost wages and similar losses must stand as a

39

fundamental part of the remedy for wrongful discharge or the

Federal right conferred under §510 will become a very meager

substitute for the preempted state tort claims.

This conclusion also is informed by Congress’ general

practice in every other Federal statute prohibiting employment

discrimination to provide back pay and reinstatement (or front

pay) as remedies. See, for example, Albemarle Paper Co. v.

Moody, 422 U.S. 405, 419 and n.11, 95 S.Ct. 2362, 45 L.Ed.2d

280 (1975) (interpreting §10 of the NLRA, 29 U.S.C. §160 and

Title VII, 42 U.S.C. §2000e-5(g)), the Court stated that “[wJe

can find here no intent to back away from the NLRA model or

to denigrate in any way the status of back pay relief”), and

Rodriguez v. Taylor, 569 F.2d 1231, 1242 (3d. Cir.), cert.

denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed.2d 414 (1978)

(interpreting the ADEA, 29 U.S.C. §626(c)(1)).

The Sixth Circuit in Schwartz relied on this Court’s

interpretation of Mitchell v. Robert DeMario Jewelry, Inc.,

361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960), as discussed

in Local 39] v. Terry, 494 U.S. 558, 571, 110 S.Ct. 1339,

108 L.Ed.2d 519 (1990), for the rule that back pay awarded

against an employer “to restore to the plaintiff that to which she

would have enjoyed but for the employer’s illegal retaliation”

is restitutionary. 45 F.3d at 1022. The Sixth Circuit found the

“question of front pay ... more straightforward” since “[f]ront

pay is awarded only when the preferred remedy of

reinstatement, indisputably an equitable remedy, is not

appropriate or feasible.” /d. at 1023, citing cases under Title

Vil and ADEA. Respondents here can be expected to argue that

reinstatement of the members of Petitioner Association to their

former positions is inappropriate. Therefore the Court needs to

make clear to the district court that “appropriate equitable

relief’ will require making whole the victims of Respondents’

ERISA-defeating conduct.

40

- Vi.

THE DECISION BELOW AT ITS CRUX DENIES

ACCESS TO JUSTICE

The decision below is fundamentally about access to justice

and its denial. In ruling out of existence a suit under

ERISA §510 for interference with health and welfare benefits,

the Ninth Circuit has done violence not only to the intent of

Congress and to the Court’s precedents, but also to the

Constitution and our founding notion of the rule of law. See,

for example, Romer v. Evans, 116 S.Ct. 1620, 1628,

134 L.Ed.2d 855 (1996). A central principle of our

constitutional tradition is the principle that the courts remain

open on impartial terms to those who seek its assistance.

Yet the per curiam opinion by the panel below disqualified

from proceeding under §510 the entire class of persons whose

health and welfare benefits motivated their discharges while it

conferred the right to proceed upon those fired because of their

pension benefits. This classification cannot withstand any level

of scrutiny. The panel totally lost sight of the point that

Petitioner Association’s members’ remedies under state law,

see, for example, Tameny v. Atlantic Richfield Co., 27 Cal.3d

167, 175, 610 P.2d 1330, 164 Cal.Rptr. 839 (1980), were

involuntarily exchanged for a federal remedy by Congress when

it enacted ERISA. Varity, 116 S.Ct. at 1078-1079; Jngersoll-

Rand, 498 U.S. at 133.

This right to a remedy for every wrong runs through the

Court’s jurisprudence as a brilliant, redeeming strand from the

earliest days of our republic, Marbury v. Madison, 5 U.S.

(1 Cranch) 137, 163, 2 L.Ed. 60 (1803), up till the present term,

4)

MLB. v. SL.J., No. 95-853, 65 U.S.L.W. 4035, 4040 and 4043

(U.S., Dec. 16, 1996) (Kennedy, J., concurring).

The panel below dealt with this constitutional concern in as

cavalier a fashion as it did with the related issue of associational

standing, Brown Group, 116 S.Ct. at 1536, and the other issues

present here.

CONCLUSION

Justice requires that this Court reverse the Ninth Circuit’s

crabbed interpretation of §510 of ERISA and find that the

statute prohibits interference with health and welfare benefits by

wrongful discharge from employment. The decision below

contravenes the language of the statute and Congress’ broad

remedial intent behind ERISA. Not only does it conflict with

all the other circuit courts which have addressed this issue, its

holding and rationale leave Petitioner and its members without

access to justice to enforce either their preempted state-law

rights or their ERISA-bestowed Federal rights which Congress

intended to substitute for the lost state tort remedies.

Petitioner also urges the Court to expand on its decision in

Ingersoll Rand v. McClendon to clarify that employees

wrongfully discharged in violation of §510 have a right to full

restitution, including front pay (or reinstatement) and back pay.

The case should be reversed and remanded with the mandate to

fashion broadly remedial relief to make whole the Respondents’

victims.

Respectfully submitted,

RICHARD E. SCHWARTZ

Counsel of Record

JAMES E. PARROT

RICHARD SCHWARTZ &

ASSOCIATES, LTD.

Attorneys for Petitioners

300 Euclid Hall

393 North Euclid Avenue

St. Louis, Missouri 63108-1288

(314)454-0022