Opposition Brief — AK Steel Steel Corp. Retirement Accumulation Pension Pension Plan v. West (No. 07-663)

FILED —

> DEC 2 0 2007

No. 07-663 L_OPFICE OF THE CLERK |

In The

Supreme Court of the United States

AK STEEL CORPORATION RETIREMENT

ACCUMULATION PENSION PLAN AND

AK STEEL CORPORATION BENEFIT PLANS

ADMINISTRATIVE COMMITTEE,

Petitioners,

Vv.

JOHN D. WEST, INDIVIDUALLY AND ON

BEHALF OF HIMSELF AND ALL OTHERS

SIMILARLY SITUATED,

Respondents.

On Petition for Writ of Certiorari to the United

States Court of Appeals for the Sixth Circuit

BRIEF IN OPPOSITION

ALLEN C. ENGERMAN THOMAS R. THEADO

LAw OFFICES OF ALLEN C. Rosert D. Gary

ENGERMAN, P.C. JORI BLOOM NAEGELE

666 DUNDEE Roab, Surre 1200 THomas A. DOWNIE

NORTHBROOK, IL. 60062 Gary, NAEGELE & THEapo, LLC

(847) 564-5555 446 Broapway AVENUE

Lorain, OH 44052-1740

(440) 244-4809

Counsel for Respondents

December 20, 2007

Becker Gallagher - Cincinnati, OH - Washington, D.C. - 800.890.5001

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES .................. ili

RESPONSE TO PETITIONER’S STATEMENT

OF THE CASE AND OF THE ISSUES .........

I. THE DECISION BELOW INVOLVED A

Il.

CLAIM FOR BENEFITS DUE UNDER THE

NT a hae k 65 ka e's oh Oe keds oe eo ens

A. ERISA Protects the “Accrued Benefit”

rr ae

B. Benefits Paid in the Lump Sum Form Must

Be Actuarially Equivalent to the Plan’s

; = ERE SR rare

C. Cash Balance Plans Must Comply With the

Actuarial Equivalence and Nonforfeiture

ee fe. bs Ca eee e's

D. The Courts Below Found That AK Steel’s

Retirees Did Not Receive the “Accrued

Benefit” Defined inthe Plan ...........

NO CONFLICT IS PRESENTED ON THE

SCOPE OF ERISA § 502(a)(1)(B), 29 U.S.C.

Pe cs xweks Kactenk theese eihenss

A. The Decision Below Is in Accord With

Holdings of This Court on the Scope of

Bean § GOMANIMD) .... 1... cee cece

10

12

13

ii

B. The Decision Below Does Not Conflict With

Decisions of Other Circuits ............ 17

C. The Decision Below Does Not Conflict With

ERISA’s Regulatory Scheme ........... 18

Il. NO BONA FIDE ISSUE IS PRESENTED ON

THE DOCTRINE OF CONTRA PROFER-

SP ADO abbas obs ca cekwen OOO REE Oe 20

A. Consideration of the Contra Proferentum

Doctrine Would Not Affect The Outcome of

REMI een’ g Ca Mere wey Pes ory Lamy nee 20

B. There is No “Circuit Split” on Contra

OPO FF CCC ECE RTC OT 23

eR SR Re na Mes EBs Aim 27

iil

TABLE OF AUTHORITIES

CASES

Belluardo v. Cox Enterprises, Inc. Pension Plan,

157 Fed. Appx. 823,

2005 U.S. App. LEXIS 24975

oe ere 26

Berger v. Xerox Ret. Income Guar. Plan,

157 F. Supp. 2d 998, affd sub nom.,

Berger v. Xerox Corp. Retirement Income

Guarantee Plan, 338 F.3d 755

ae VERE say 6 bo 4 06 485 passim

Board of Trustees of Laborers Pension Trust Fund uv.

Levingston,

816 F. Supp. 1496 (N.D. Cal. 1993)......... 19

Carolina Care Plan, Inc. v. McKenzie,

467 F.3d 383 (4th Cir. 2006), cert. dismissed,

| yg ED = bs 66 sce wacns 26

Carrabba v. Randalls Food Markets, Inc.,

145 F. Supp. 2d 763 (D. Tex. 2000), affd

without opinion, 252 F.3d 721 (Sth Cir. 2001),

cert. denied, 534 U.S. 995 (2001) ........... 18

Central Laborers’ Pension Fund v. Heinz,

RB eer passim

Charles Dowd Box Co., Inc. v. Courtney,

De ee bee’ ars 19

iv

Cooper v. IBM Personal Pension Plan,

457 F.3d 636 (7th Cir. 2006), cert. denied,

pe Se BOD. ee 6

Copeland Oaks v. Haupt,

209 F.3d 811 (6th Cir. 2000) .............. 25

Costantino v. TRW, Inc.,

13 F.3d 969 (6th Cir. 1994) ................ 6

Cotter v. Eastern Conference of Teamsters Retirement

Plan,

898 F.2d 424 (4th Cir. 1990) .............. 22

Esden v. Bank of Boston,

229 F.3d 154 (2d Cir. 2000), cert. dism’d,

eee I ED Soe cece secede passim

Fagan v. National Stabilization Agreement of the Sheet

Metal Industry Trust Fund,

60 F.3d 175 (4th Cir. 1995) ............... 22

Firestone Tire & Rubber Co. v. Bruch,

BR 16, 23, 24

Gismondi v. United Technologies Corp.,

408 F.3d 295 (6th Cir. 2005) .............. 26

Graham v. Western Kentucky Navigation, Inc.,

No. 99-5708, 2000 U.S. App. LEXIS 22250

ee ee Pee eee 24, 26

Great West Life & Annuity Ins. Co. v. Knudson,

gS on ke pap ee aeea see 15

Vv

Hein v. Federal Deposit Insurance Corp.,

88 F.3d 210 (3d Cir. 1996), cert. denied,

See ee hii eve ee wivetesee ct 16

Hughes Aircraft Co. v. Jacobson,

ee ee ae 5, 7

In Re Marriage of Oddino,

16 Cal.4th 67, 939 P.2d 1266 (1997),

cert. denied, 523 U.S. 1021 (1998) ........... 19

Janssen v. Minneapolis Auto Dealers Benefit Fund,

447 F.3d 1109 (8th Cir. 2006) ............. 21

Kimber v. Thiokoi Corp.,

196 F.3d 1092 (10th Cir. 1999) ............ 24

Lennon v. Metropolitan Life Ins. Co.,

504 F.3d 617 (6th Cir. 2007) .............. 26

Lyons v. Georgia Pacific Corp. Salaried Employees

Retirement Plan,

221 F.3d 1235 (11th Cir. 2000), cert. denied,

PCE, hss ok ccs ev cece weee webs 6

Marquette General Hosp. v. Goodman Forest

Industries,

315 F.3d 629 (6th Cir. 2003) .............. 26

May Dept. Stores Co. v. Federal Insurance Co.,

9065 F.3d S67 (7th Cir. 2002) ..........2.6. 16

McKeldin v. Reliance Standard Life Ins. Co.,

No. 06-1743, 2007 U.S. App. LEXIS 24289

ft Re Be Be 26, 27

vi

Miller v. Xerox Corp. Retirement Income Guarantee

Plan,

464 F.3d 871 (9th Cir. 2006), cert. denied sub.

nom., Xerox Corp. Retirement Income

Guarantee Plan v. Miller, U.S. _,

127 S. Ct. 1829 (2007) ............... 6, 7, 10

Mitchell v. Dialysis Clinic, Inc.,

18 Fed. Appx. 349, 2001 U.S. App. LEXIS

19439 (6th Cir. Aug. 24,2001) ......... 25, 26

Osborne v. Hartford Life and Accident Ins. Co.,

465 F.3d 296 (6th Cir. 2006), cert. denied,

MS ee 5 Ee 26

Page v. Pension Ben. Guaranty Corp.,

968 F.2d 1310 (D.C. Cir. 1992) ............ 16

Perez v. Aetna Life Ins. Co.,

150 F.3d 550 (6th Cir. 1998) (en banc) ...... 25

Rhorer v. Raytheon Engineers & Constructors, Inc.,

181 F.3d 634 (5th Cir. 1999) .............. 24

Ross v. Rail Car America Group Disability Income

Plan,

285 F.3d 735 (8th Cir. 2002), cert. denied sub

nom., Ross v. Rail Car America, Inc.,

tt ecco cee wees 17

Rybarczyk v. TRW Inc.,

235 F.3d 975 (6th Cir. 2001) ............... 6

Spacek v. Maritime Assoc.,

134 F.3d 283 (5th Cir. 1998) ........... 23, 24

vil

Stephens v. Retirement Income Plan for Pilots of U.S.

Air, Inc.,

464 F.3d 606 (6th Cir. 2006) ............... 6

Todisco v. Verizon Communications, Inc.,

497 F.3d 95 (1st Cir. 2007) ............ 17, 18

University Hospitals of Cleveland v. Emerson Elec. Co.,

202 F.3d 839 (6th Cir. 2000) .............. 25

Varity Corp. v. Howe, 516 U.S. 489 (1996) ...... 15

Wagener v. SBC Pension Benefit Plan,

407 F.3d 395 (D.C. Cir. 2005) ............. 22

West v. AK Steel Corp. Retirement Accumulation

Pension Plan,

484 F.3d 395 (6th Cir. 2007), rehearing en

banc denied, No. 06-3442, 2007 U.S. App. LEXIS

20447 (6th Cir. Aug. 8, 2007) .......... passim

Ziegler v. HRB Management, Inc.,

182 Fed. Appx. 405, 2006 U.S. App. LEXIS

11905 (6th Cir. May 9, 2006).............. 26

STATUTES

ie ono A ne o-9 60 0 be spies 4

Re RR eee ee 4,5, 16

es Sic eioe rn bb ee ee SbawS 22

SP Pa ID oc tcc eeteeees 5, 16

29 U.S.C. § 1054(c)(3)

29 U.S.C. § 1104(a)(1)(D)

29 U.S.C. § 1132(a)(1)(B)

I.R.C. § 411(aX(7) and § 411(c)(3)

1

RESPONSE TO PETITIONER’S STATEMENT

OF THE CASE AND OF THE ISSUES

Respondents respectfully submit that AK Steel has

not accurately stated the facts, the issues decided

below, and the lower courts’ conclusions on those

issues.

AK Steel repeatedly asserts that this case involves

a claim for “statutory violation of ERISA,” and not a

claim for benefits due under the terms of the AK Steel

Pension Plan. See Petition at 1, 7, 10. AK Steel thus

mischaracterizes the decision below as holding that “a

pension plan participant may seek relief for a

statutory violation of ERISA under ERISA

§ 502(a)(1)(B)[, 29 U.S.C. § 1132(a)(1\(B)].” Petition at

Questions Presented. On these assertions, AK Steel

builds its argument that the Sixth Circuit’s opinion in

this case is in conflict with decisions of other circuits

on the scope of ERISA § 502(a)(1(B). But the

assertions are false. To the Sixth Circuit, the “key

issue” was “whether West was paid less than the full

accrued benefit due him under the AK Steel Plan.”

West v. AK Steel Corp. Retirement Accumulation

Pension Plan, 484 F.3d 395, 405 (6th Cir. 2007),

rehearing en banc denied, No. 06-3442, 2007 U.S. App.

LEXIS 20447 (6th Cir. Aug. 8, 2007) [Petitioner's

Appendix at 17a].

AK Steel further asserts that its plan administrator

had a “reasonable interpretation” of the Plan’s

“accrued benefit” provision, see Petition at 22, and

characterizes the Sixth Circuit’s decision as holding

that “a court may apply the rule of contra proferentem

to override a plan administrator's reasonable

2

interpretation.” Petition at Questions Presented.

These assertions are the premise for AK Steel’s

argument that this case presents a “circuit split” on

the use of contra profereatum in interpreting ERISA

plans. In fact, the plan administrator testified he had

never considered the “accrued benefit” definition for

any purpose, and didn’t even know why it was in the

Plan:

Q. ... Do you know of any purpose that this

Section 1.2 accrued benefit definition is

actually used for by the plan?

A. I don’t — I don’t even see it mentioned in the

rest of the plan. The only reason I can guess

at is that there is some statutory reason,

some type of testing that’s done within the

framework of the IRS that requires this

definition to be _ defined. But in

administration of the plan, we don’t turn to

this definition for any reason.

Deposition of Richard Ford, AK Steel’s Corporate

Manager of Benefits, at 83, C.A. App. 170.

Other inaccurate statements in AK Steel’s Petition

are addressed in the Argument below.

ARGUMENT

This is an action brought by plan participants to

recover benefits due under the terms of the AK Steel

Pension Plan. The retirees received lump-sum

distributions of their pension benefits between 1995

and 2005. The chief judge of the district court, and a

3

unanimous panel of the Sixth Circuit, found the

distributions were less than the retirees’ “accrued

benefit” as defined in the Plan, and ordered relief in

the amount of the underpayments. Petitioner’s

Appendix at la—33a and 36a-7la. On AK Steel’s

motion for rehearing en banc, no appellate judge voted

to grant rehearing. Petitioner’s Appendix at 34a-35a.

The Sixth Circuit’s decision is in accord with the

decisions of this Court and of the other circuits. There

are no conflicts, nor any other reason for review by this

Court.

I. THE DECISION BELOW INVOLVED A CLAIM

FOR BENEFITS DUE UNDER THE PLAN

This case does not involve a claim for “statutory

violation of ERISA,” as AK Steel contends. See

Petition at 1. Rather, as the district court and the

Sixth Circuit both found, this case involves a claim for

benefits due under the terms of the AK Steel

Plan—specifically, the “accrued benefit” defined in

Section 1.2 of the Plan. See Petitioners’ Appendix at

76a. The decision below—finding that the benefits

paid were less than the retirees’ Plan-defined “accrued

benefit”—-was based on core principles of ERISA

recognized by this Court, and uniformly applied by the

circuit courts.

A. ERISA Protects the “Accrued Benefit”

Defined by the Plan

As this Court discussed in Central Laborers’

Pension Fund v. Heinz, 541 U.S. 739 (2004), “[njothing

in ERISA requires employers to establish employee

4

benefits plans. Nor does ERISA mandate what kind of

benefits employers must provide if they choose to have

such a plan. ERISA does, however, seek to ensure that

employees will not be left empty-handed once

employers have guaranteed them certain benefits . . . .

[W]hen Congress enacted ERISA, it ‘wanted to...

mak[e] sure that if a worker has been promised a

defined pension benefit upon retirement—and ifhe has

fulfilled whatever conditions are required to obtain a

vested benefit—he actually will receive it.” Heinz, 541

US. at 743 (quoting Lockheed Corp. v. Spink, 517 US.

882, 887 (1996) (quoting Nachman Corp. v. Pension

Benefit Guaranty Corp., 446 U.S. 359, 375 (1980))).

ERISA permits a defined benefit plan, such as the

AK Steel Plan, to define the “accrued benefit”

employees will receive, but then requires the plan to

pay the full value of that benefit at retirement. Thus,

ERISA § 3(23)(A), 29 U.S.C. § 1002(23)(A), “rather

circularly defines ‘accrued benefit’ as ‘the individual’s

accrued benefit determined under the plan,” Heinz,

541 U.S. at 744, while ERISA § 203(a)(2)(A), 29 U.S.C.

' Technically two terms come into play, the “normal benefit” and

the “accrued benefit.” The “normal benefit” is “the greater of the

early retirement benefit under the plan, or the benefit under the

plan commencing at normal retirement age [i.e., 65]." ERISA

§ 3(22), 29 U.S.C. § 1002(22). The “accrued benefit” is defined in

terms of the “normal benefit.” It is “the portion of the normal

retirement benefit which the participant has earned at any point

while participating in a defined benefit plan.” Berger v. Xerox Ret.

Income Guar. Plan, 157 F. Supp. 2d 998, 1006 (S.D. Ill. 2001),

affd sub nom. Berger v. Xerox Corp. Retirement Income Guarantee

Plan, 338 F.3d 755 (7th Cir. 2003) (citing ERISA §§ 3(23)(A),

3(35), 29 U.S.C. § 1002(23) A), (35)).

5

§ 1053(a)(2)(A), requires that the “accrued benefit” be

“nonforfeitable” so “an employce who.has completed at

least 5 years of service has a nonforfeitable right to

100 percent of the employee’s accrued benefit derived

from employer contributions.” In Heinz, this Court

held that the nonforfeitability requirement of ERISA

§ 203(a) is “a global directive that regulates the

substantive content of pension plans; it adds a

mandatory term to all retirement packages that a

company might offer.” Heinz, 541 U.S. at 750.

B. Benefits Paid in the Lump Sum Form Must

Be Actuarially Equivalent to the Plan’s

“Accrued Benefit”

The “accrued benefit” in a defined benefit plan

means “the individual’s accrued benefit determined

under the plan and, except as provided in scction

204(c)(3), expressed in the form of an annual benefit

li.e., an annuity] commencing at normal retirement

age l[i.e., age 65).”. ERISA § 3(23)(A), 29 U.S.C.

§ 1002(23)(A). See Hughes Aircraft Co. v. Jacobson,

525 U.S. 432, 440 (1999) (the “accrued benefit”

“(ordinarily is] expressed in the form of an annual

benefit commencing at normal retirement age”)

(quoting ERISA § 3(23)(A), 29 U.S.C. § 1002(23)(A)).

Section 204(c\3), in turn, provides that “if an

employee’s accrued benefit is to be determined as an

amount other than an annual benefit commencing at

normal retirement age, ... [then] the employee’s

accrued benefit ... shall be the actuarial equivalent” of

the annuity commencing at normal! retirement age.

6

ERISA § 204(c)(3), 29 U.S.C. § 1054(c)(3) (emphasis

added).”

In Esden v. Bank of Boston, 229 F.3d 154 (2d Cir.

2000), cert. dism’d, 531 U.S. 1061 (2001), the Second

Circuit explained this statutory mechanism for

protecting the value of participants’ accrued benefits:

What these provisions mean in less technical

language is that: (1) the accrued benefit under

a defined benefit plan must be valued in terms

of the annuity that it will yield at normal

retirement age; and (2) if the benefit is paid at

any other time (e.g., on termination rather than

retirement) or in any other form (e.g., a lump

sum distribution, instead of annuity) it must be

worth at least as much as that annuity.

Esden, 229 F.3d at 163. Accord, Costantino v. TRW,

Inc., 13 F.3d 969, 977-80 (6th Cir. 1994); Lyons uv.

Georgia Pacific Corp. Salaried Employees Retirement

Plan, 221 F.3d 1235, 1242-52 (11th Cir. 2000), cert.

denied, 532 U.S. 967 (2001); Rybarczyk v. TRW Inc.,

235 F.3d 975, 978-84 (6th Cir. 2001); Berger v. Xerox

Corp. Retirement Income Guarantee Plan, 338 F.3d

755, 769-62 (7th Cir. 2003). See Stephens uv.

Retirement Income Plan for Pilots of U.S. Air, Inc., 464

F.3d 606, 614 (6th Cir. 2006); Cooper v. IBM Personal

Pension Plan, 457 F.3d 636, 640 (7th Cir. 2006), cert.

denied, _ U.S. _., 127 S. Ct. 1143 (2007); Miller v.

Xerox Corp. Retirement Income Guarantee Plan, 464

* These rules are mirrored in parallel provisions of the Internal

Revenue Code, I.R.C. § 411(a)7) and § 411(c)(3).

7

F.3d 871, 874-76 (9th Cir. 2006), cert. denied sub. nom.

Xerox Corp. Retirement Income Guarantee Plan uv.

Miller, __ U.S. __, 127 S. Ct. 1829 (2007).

C. Cash Balance Plans Must Comply With the

Actuarial Equivalence and Nonforfeiture

Requirements

A “cash balance plan” is a defined benefit plan® in.

which the pension benefit is calculated in reference to

a hypothetical “account balance” that increases over

time as a result of employer contributions and interest

credits at a rate specified by the plan. West v. AK Steel

Corp. Retirement Accumulation Pension Plan, 484 F.3d

395, 399 (6th Cir. 2007), rehearing en banc denied, No.

06-3442, 2007 U.S. App. LEXIS 20447 (6th Cir. Aug. 8,

2007) [Petitioner’s Appendix at 3a—4a].

* See Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 (1999).

Discussing “the difference between defined contribution plans and

defined benefit plans,” the Court observed that “|a] defined benefit

plan ... consists of a general pool of assets rather than individual

dedicated accounts.” Hughes Aircraft, 525 U.S. at 439 (quoting

Commissioner v. Keystone Consol. Industries, Inc., 508 U.S. 152,

154 (1993)). Thus, “no plan member has a claim to any particular

asset that composes a part of the plan’s general asset pool.

Instead, members have a right to a certain defined level of

benefits, known as ‘accrued benefits.” Jd. The AK Steel Plan is a

pension plan in which “no plan member has a claim to any

particular asset that composes a part of the plan’s gencral asset

pool.” The Plan expressly provides that participants’ accounts are

hypothetical and do not create property rights to certain funds or

assets. Plan § 1.1. See Petitioners’ Appendix at 75a 76a.

8

Because they are defined benefit plans, cash

balance plans’ “accrued benefit” is never the account

balance as such, but rather the annuity commencing at

age 65 to which the participant is entitled under the

plan. Any lump sum distribution must be the

actuarial equivalent of that “accrued benefit.” West,

484 F.3d at 407-08 (citing Esden, 229 F.3d at 163;

Berger, 338 F.3d at 757-58; ERISA § 204(c)(3), 29

U.S.C. § 1054(c)(3)) [Petitioners’ Appendix at

22a—24a].

In 1996, the Internal Revenue Service instructed

cash balance plans that they must use a two-step

process in issuing lump sum distributions, first

determining the annuity payable at age 65 to which

the participant is entitled under the plan, and then

calculating the actuarial equivalent of that annuity in

current dollars. Thus, “the balance of the employee’s

hypothetical account must be projected to normal

retirement age [and converted into an annuity] and

then the employee must be paid at least the present

value” of that projected age-65 annuity. Notice 96-8,

1996-1 C.B. at 360 (Part III. A), quoted in Esden, 229

F.3d at 166-67.

To satisfy the actuarial equivalence requirement

and avoid forfeitures of plan benefits, the “projection-

forward” step must take into account the interest

credits on the participant’s account to age 65, using

the plan’s stated interest credit rate. The reason can

be illustrated in practical terms. A participant retires

at age 55 with $50,000 in her hypothetical account.

The annuity to which she is entitled commencing at

age 65 is calculated, not from her $50,000 current

balance, but rather from the much larger balance she

9

will have at age 65, after an additional 10 years of

interest has accrued at the interest credit rate

specified in the plan. If the plan provides participants

with a favorable interest credit rate (AK Steel’s plan

provides a minimum of 7.5% per year on participants’

Opening Accounts), then the age-65 annuity that is her

“accrued benefit” is more valuable in current dollars

than simply the current balance of her account.

Esden, 229 F.3d at 159 (“If the plan’s projection rate

exceeds the statutory discount rate, then the present

value of the accrued benefit will exceed the

participant’s account balance”).

Notice 96-8 requires that this value be taken into

account. “(ijn determining the amount of an

employee’s accrued benefit, a forfeiture, within the

meaning of [Treas. Reg. §] 1.411(a)-4T, will result if

the value of future interest credits is projected using a

rate that understates the value of those credits or if

the plan by its terms reduces the interest rate or rate

of return used for projecting future interest credits.”

Notice 96-8, 1996-1 C.B. at 360 (Part III. A), quoted in

Esden, 229 F.3d at 166-67. A more recent IRS notice,

issued after the enactment of the Pension Protection

Act of 2006, reaffirms the authority of Notice 96-8 for

pre-Act distributions, and reiterates the IRS’s

admonition against forfeiture. Notice 2007-6, Part II,

Para. 12 (I.R.B. 2007-3).

Every circuit to have considered the question has

ruled that making retirees forgo interest credits to

receive lump sum distributions violates the actuarial

equivalence and nonforfeitability requirements:

10

Xerox tells its employees who leave the

company before they reach [normal retirement

age] that if they leave their money with the

company they will obtain a pension beginning at

age 65 that will reflect future interest credits.

They are offered the alternative of taking a

lump sum now in lieu of a pension later, but the

lump sum is not the prescribed actuarial

equivalent of the pension that they are invited

to surrender by accepting the lump sum because

it excludes those credits.

Berger, 338 F.3d at 761-762. Accord, Esden, 229 F.2d

at 167; Miller, 464 F.3d at 874-76.

D. The Courts Below Found That AK Steel’s

Retirees Did Not Receive the “Accrued

Benefit” Defined in the Plan

The court of appeals found that this case is

“ijndistinguishable from Esden and Berger” because the

Plan failed to pay the “accrued benefit” defined in

Section 1.2 of the Plan. West, 484 F.3d at 409

[Petitioner’s Appendix at 26a]. Section 1.2 defines the

“accrued benefit” as the “single life annuity

commencing on a Participant’s Normal Retirement

Date ... that is the Actuarial Equivalent of the

Participant’s current Account,” and provides that “the

Account is projected to Normal Retirement Date and

converted to a single life annuity.” See Petitioners’

Appendix at 76a. If performed in accordance with

ERISA, these required calculations would have taken

into account the interest credits to age 65, which the

Plan sets at a minimum 7.5% per year on participants’

Opening Accounts. West, 484 F.3d at 399, 400

11

[Petitioners’ Appendix at 4a, 7a]. However, AK Steel

failed to make any of the required calculations.

Instead, pursuant to Section 4.1 of the Plan, a

participant who elected a lump sum distribution

received an amount “equal to his Accounts.” West, 484

F.3d at 409 (citing Section 4.1 of the Plan) [Petitioners’

Appendix at 26a]. Thus, the lump sum distributions

were not actuarially equivalent to the participants’

“accrued benefit,” and the retirees forfeited the value

of their interest credit rights under the Plan in order

to receive the distributions. The Sixth Circuit found

that:

What happened here is exactly what happened

in Berger—West was required to “sell” his

pension entitlement back to AK Steel at a

discount in order to receive his lump-sum

payout.

West, 484 F.3d at 409 (citing Berger, 338 F.3d at 762)

[Petitioners’ Appendix at 26a—27a].*

Stating that “we agree with the analysis of our

sister circuits and with that of the district court

below,” the Sixth Circuit concluded that:

* AK Steel now contends that its plan administrator had a

“reasonable interpretation” of Section 1.2, but the plan

administrator admitted he had never considered the Plan's

“accrued benefit” definition for any purpose, and didn’t know why

it was there. Deposition of Richard Ford, AK Steel's Corporate

Manager of Benefits, at 83, C.A. App. 170 (“in administration of

the plan, we don't turn to this definition for any reason”).

12

“Any distribution in optional form (such as a

lump sum) must be no less than the actuarial

equivalent of [the normal retirement] benefit.”

Esden, 229 F.3d at 159. And as discussed

above, the normal retirement benefit [under the

AK Steel Plan] is “a single-life annuity payable

at normal retirement age.” Id.; see also AK

Steel Plan § 1.2. AK Steel’s complicated

interpretations of the relevant statutes and

regulations do not, in our view, refute these

basic legal principles.

West, 484 F.3d at 409 [Petitioners’ Appendix at 27a].

II. NO CONFLICT IS PRESENTED ON THE

SCOPE OF ERISA § 502(a)(1)(B), 29 U.S.C.

§ 1132(a)(1)(B)

AK Steel contends that the Sixth Circuit’s opinion

is in conflict with other decisions involving the scope of

one of ERISA’s enforcement sections, ERISA

§ 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). This alleged

conflict is premised on AK Steel’s mischaracterization

of this case as involving a “statutory violation of

ERISA.” See Petition at 1. In fact, the courts below

properly found that this case involves a claim for

“benefits due under the plan,” actionable under

§ 502(a)(1)(B). That finding is in accord with decisions

of this Court, and no conflict *s presented.

13

A. The Decision Below Is in Accord With

Holdings of This Court on the Scope of

ERISA § 502(a)(1)(B)

To the Sixth Circuit, the “key issue” was “whether

West was paid less than the full accrued benefit due

him under the AK Steel Plan.” West, 484 F.3d at 405

[Petitioners’ Appendix at 17a]. The court of appeals

answered that question in the negative, affirming the

finding of the district court that the retirees’ lump sum

distributions did not equal the “accrued benefit”

defined in Section 1.2 of the Plan.

It necessarily followed that AK Steel’s failure to

distribute the “accrued benefit” defined in the Plan

was actionable under ERISA § 502(a)(1)(B), 29 U.S.C.

§ 1132(a)(1)(B). See West, 484 F.3d at 404-05

[Petitioners’ Appendix at 14a—-18a]. Indeed,

§ 502(a)(1B) expressly authorizes such a claim,

stating that a plan participant may bring a civil action

“to recover benefits due to him under the terms of his

plan, to enforce his rights under the terms of the plan,

or to clarify his rights to future benefits under the

terms of the plan.”

AK Steel relies on Section 4.1 of the Plan, which

provides that a retiree who elects the lump sum form

of payment will receive only an amount “equal to his

Account” (instead of the full “accrued benefit” defined

in Section 1.2 of the Plan). See Petitioners’ Appendix

at 90a. Section 4.1 violates the core principle of ERISA

that a lump sum distribution of pension benefits must

equal the participant’s “accrued benefit” as defined in

the plan—-a requirement “repeatedly recognized by

courts.” Esden, 229 F.3d at 162-65. Yet AK Steel

14

contends that, because of the illegal provision in

Section 4.1, this case cannot proceed as a claim for

“benefits due under the plan” pursuant to ERISA

§ 502(a)(1)(B). Of course, if that were true, any plan

could deprive its participants of § 502(a)(1\B)’s

remedy for “benefits due” simply by stating that the

plan’s “accrued benefit” will not be paid.

In both the district court and the Sixth Circuit, “AK

Steel argueld] that neither prong of the ERISA

enforcement scheme authorizes the relief that the

plaintiffs seek,” West, 484 F.3d at 402-03 [Petitioners’

Appendix at 12a) (referring to § 502(a)(1)(B) and

§ 502(a)(3), the latter of which allows participants to

bring a civil action “to enjoin any act or practice which

violates” ERISA or “obtain other appropriate equitable

relief’) (emphasis added). AK Steel has now

abandoned that position, allowing that there was “a

potential avenue of relief.” Petition at 18 n.7.

According to AK Steel, the retirees “could have (1)

sought an equitable reformation of the Plan under

§ 502(a)(3) to conform the Plan to the provisions of

ERISA, and then (2) invoked § 502(a)(1)(B) to seek

benefits due under the terms of the Plan as reformed.”

Id.

In the instant case, the retirees pleaded their claim

under both § 502(a)\(1)(B) and § 502(a\(3). West, 484

F.3d at 403 [Petitioners’ Appendix at lla] (“West’s

complaint tracks the language of both § 502(a)(1)(B)

and § 502(a)(3)”). The district court considered both

sections but found the retirees’ claim for benefits could

be determined under § 502(a)(1)(B)—a conclusion

affirmed by the court of appeals. Order dated

November 22, 2004 [Petitioner’s Appendix at 65a-66a],

15

affd, West, 484 F.3d at 405 [Petitioner’s Appendix at

17a].

The Sixth Circuit’s holding that “§ 502(a)(1)(B)

provides an appropriate remedy,” id. [Petitioner’s

Appendix at 17a], is in accordance with this Court’s

opinion in Great-West Life & Annuity Ins. Co. v.

Knudson, 534 U.S. 204 (2002). In Knudson, this Court

emphasized that, while plan fiduciaries are limited to

certain equitable remedies under § 502(a)(3),

“Congress authorized ‘a participant or beneficiary’ to

bring a civil action ‘to enforce his rights under the

terms of the plan’ [pursuant to § 502(a)(1)(B)], without

reference to whether the relief sought is legal or

equitable.” Id. at 221 (emphasis added).

Section 502(a)(1)(B), the Court has observed,

“specifically provides a remedy for breaches of

fiduciary duty with respect to the interpretation of

plan documents and the payment of claims, ... one that

runs directly to the injured beneficiary.” Varity Corp.

v. Howe, 516 U.S. 489, 512 (1996). Those breaches of

duty are not limited to violations of plan terms, as AK

Steel contends, but include the requirements imposed

on plans by ERISA. ERISA’s fiduciary duty section,

§ 404(aX(1D), 29 U.S.C. § 1104(aX1)(D), expressly

subordinates plan provisions to ERISA’s requirements,

providing that the plan administrator “shall discharge

his duties with respect to a plan ... in accordance with

the documents and instruments governing the plan

insofar as such documents and instruments are

consistent with the provisions of this title and title IV.”

The “accrued benefit” protected by ERISA is always

“determined under the plan.” ERISA § 3(23)(A), 29

16

U.S.C. § 1002(23)A), discussed in Heinz, 541 U.S. at

744. Because “ERISA [does not] mandate what kind of

benefits employers must provide,” Heinz, 541 U.S. at

743, “lo]nly the words of the Plan itself can create an

entitlement to benefits.” Hein v. Federal Deposit

Insurance Corp., 88 F.3d 210, 215 (3d Cir. 1996), cert.

denied, 519 U.S. 1056 (1997). Once a plan defines its

“accrued benefit,” however, ERISA prescribes

regulatory requirements “to protect contractually

defined benefits.” Firestone Tire & Rubber Co. v.

Bruch, 489 U.S. 101, 113 (1989). One such protection

is ERISA § 203(a)(2\A), 29 U.S.C. § 1053(a)(2)(A),

which requires that the “accrued benefit” defined by

the plan be “nonforfeitable.” This statutory

requirement “adds a mandatory term to all retirement

packages that a company might offer.” Heinz, 541 U.S.

at 750. Accord, Page v. Pension Ben. Guaranty Corp.,

968 F.2d 1310, 1314 (D.C. Cir. 1992) (opinion by

Ginsburg, J.) (minimum vesting standards established

by ERISA must either be immediately adopted by

pension plans or become “implied ‘terms of the plan”

for purposes of ERISA’s nonforfeitability provision)

(quoting Rettig v. Pension Ben. Guaranty Corp., 744

F.2d 133, 143 (D.C. Cir. 1984)); May Dept. Stores Co.

v. Federal Insurance Co., 305 F.3d 597, 602 (7th Cir.

2002) (ERISA’s statutory requirements constitute

terms of the plan implied by law).

Thus, under decisions of this Court, a claim for the

“accrued benefit” defined in a plan, calculated in

accordance with the requirements of ERISA, is a claim

for “benefits due under the terms of the plan” within

the scope of ERISA § 502(a)(1)(B). The decision below

faithfully adheres to this Court’s holdings.

17

B. The Decision Below Does Not Conflict With

Decisions of Other Circuits

The decision below is not in conflict with decisions

of other circuits. The Eighth Circuit case of Ross v.

Rail Car America Group Disability Income Plan, 285

F.3d 735 (8th Cir. 2002), cert. denied sub nom. Ross v.

Rail Car America, Inc., 537 U.S. 885 (2002), did not

involve a claim for benefits due under the terms of the

plan or the requirements of ERISA. Indeed, the plan

itself, which “is ordinarily liable for benefits payable

under the terms of the plan and is thus the primary

defendant in a section 502(a)(1)B) action,” was “merely

a nominal defendant.” Ross, 285 F.3d at 740 (internal

quotation marks omitted). The case actually involved

an employee’s attempt to set aside two amendments of

the plan that “shortened the duration of his benefits”

and “reduced the amount of his monthly payment,”on

the ground that the amendments were not signed by

the plan administrator. The Eighth Circuit affirmed

the grant of summary judgment against the employee

“because the 1990 and 1991 amendments were validly

enacted.” Ross, 285 F.3d at 743.

The First Circuit case of Todisco v. Verizon

Communications, Inc. , 497 F.3d 95 (1st Cir. 2007), was

not a claim for benefits at all. Rather, the plaintiff, a

widowed spouse, sought “compensatory monetary

damages, because of Verizon’s failure to honor the oral

representation it made to her husband that he did not

need to submit a statement of current health in order

to obtain supplemental life insurance.” Todisco, 497

F.3d at 100.

18

In Carrabba v. Randalls Food Markets, Inc., 252

F.3d 721 (5th Cir. 2001), cert. denied, 534 U.S. 995

(2001), the Fifth Circuit merely affirmed the district

court’s decision without opinion. The district court

_ had awarded “underpayments” to plan participants so

they would be “placed in basically the same financial

position” they would have been in if the plan “had

complied with ... the accrual and vesting provisions of

ERISA.” Carrabba v. Randalls Food Markets, Inc.,

145 F. Supp. 2d 763, 770-71 (D. Tex. 2000), affd

without opinion, 252 F.3d 721 (5th Cir. 2001), cert.

denied, 534 U.S. 995 (2001).

None of these cases conflict with the Sixth Circuit’s

decision in the instant case, or present a “circuit split”

on the scope of ERISA § 502(a)(1)(B).

C. The Decision Below Does Not Conflict With

ERISA’s Regulatory Scheme

Nor does the decision below conflict with ERISA’s

“uniform regulatory scheme.” Petition at 19 (quoting

Aetna Health, Inc. v. Davila, 542 U.S. 200, 208 (2004)).

AK Steel contends that ERISA provisions cannot be

considered in deciding claims for benefits under

§ 502(a)(1)(B), because then state courts, which have

concurrent jurisdiction in such cases, could apply

federal law. AK Steel’s argument is based solely on a

statement in a 1974 Congressional report suggesting

that claims for benefits “do not involve application” of

ERISA’s provisions. Petition at 6. However, that

statement “does not mesh with the plain language” of

§ 502(a)(1)(B), inasmuch as the statute, “(bly its own

terms, ... broadly covers any action to recover, enforce,

or clarify benefits, without regard to which ERISA

19

provisions must be applied during the action.” Board

of Trustees of Laborers Pension Trust Fund v.

Levingston, 816 F. Supp. 1496, 1500 (N.D. Cal. 1993).

Accord, In Re Marriage of Oddino, 16 Cal.4th 67, 78,

939 P.2d 1266, 1273 (1997), cert. denied, 523 U.S. 1021

(1998) (“Congress did not in ERISA limit state court

jurisdiction to actions in which the provisions of title

I of ERISA have no application”).

Both federal and state courts properly consider

ERISA requirements in deciding benefit claims under

§ 502(a)(1)(B). “(Nothing in the concept of our federal

system prevents state courts from enforcing rights

created by federal law.” Charles Dowd Box Co., Inc. v.

Courtney, 368 U.S. 502, 507 (1962). In Oddino, supra,

the Plan contended that a divorced spouse’s claim for

benefits would involve “interpretation of ERISA’s

QDRO provisions” and so could not be decided by a

state court pursuant to § 502(a)(1)(B). Oddino, 16

Cal.4th at 77, 939 P.2d at 1272. Like AK Steel, the

plan argued that “exclusive federal jurisdiction is

necessary to allow development of a consistent federal

common law of rights and obligations under

ERISA-regulated plans.” Jd. at 79-80, 939 P.2d at

1274. Quoting federal authority, the California

Supreme Court disagreed: “Congress’s choice to vest

jurisdiction over one class of ERISA civil actions in

both the state and federal courts is in no way

inconsistent with its intent to create a comprehensive

scheme of federal common law in the area. State as

well as federal courts may be expositors of federal

law.” Id. at 80, 939 P.2d at 1274 (quoting Menhorn v.

Firestone Tire & Rubber Co., 738 F.2d 1496, 1500, n.2

(9th Cir. 1983)).

20

IIL NO BONA FIDE ISSUE IS PRESENTED ON

THE DOCTRINE OF CONTRA

PROFERENTUM

A. Consideration of the Contra Proferentum

Doctrine Would Not Affect The Outcome of

This Case

The decision below turned on Section 1.2 of the AK

Steel Plan, which defined the Plan’s “accrued benefit”

as “a single life annuity commencing on a Participant’s

Normal Retirement Date” and triggered ERISA’s

requirement that “[a]ny distribution in optional form

(such as a lump sum) must be no less than the

actuarial equivalent” of the Plan’s “accrued benefit.”

West, 484 F.3d at 409 (quoting Esden, 229 F.3d at 159)

(parenthetical phrase by the Esden court) (Petitioner’s

Appendix at 27a]. What remained was to address the

lump sum provision in Section 4.1 of the Plan, which

said that a participant who elected a lump sum

distribution received an amount “equal to his

Accounts.” See Petitioners’ Appendix at 90a. As AK

Steel concedes in its Petition, this provision “expressly

states that lump sum payments shall not be calculated

as the actuarial equivalent of an employee’s age-65

annuity.” Petition at 8 (emphasis by AK Steel).

The Sixth Circuit dealt with Section 4.1 by invoking

the contra proferentum doctrine: “To the extent that

the Plan’s language with respect to lump-sum

distributions is ambiguous in that it conflicts with the

definition of ‘accrued benefit’ in another section of the

Plan, the ambiguity must be resolved in the plaintiffs’

favor.” West, 484 F.3d at 409 [Petitioners’ Appendix at

27a]. The court could simply have said that Section

21

4.1 is void for illegality. But either way, no

“reasonable interpretation” by AK Steel could white-

wash a plan provision which “expressly states that

lump sum payments shall not be calculated as the

actuarial equivalent of an employee’s age-65 annuity”

as ERISA requires.® Petition at 8 (emphasis by AK

Steel). See West, 484 F.3d at 409 ([Petitioners’

Appendix at 26a-27a] (“AK Steel’s complicated

interpretations of the relevant statutes and

regulations do not, in our view, refute these basic legal

principles”).

No plan administrator has discretion to interpret

the terms of the plan in a way that violates the

requirements of ERISA. See, e.g., Janssen v.

° AK Steel’s claim that its plan administrator had a “reasonable

interpretation” of the Plan is belied by the evidence. The plan

administrator admitted he had never considered the

“accrued benefit” definition for any purpose and didn’t even know

why it was there:

Q. ... Do you know of any purpose that this Section 1.2

accrued benefit definition is actually used for by the

plan?

A. I don’t — I don’t even see it mentioned in the rest of

the plan. The only reason I can guess at is that there

is some statutory reason, some type of testing that’s

done within the framework of the IRS that requires

this definition to be defined. But in administration of

the plan, we don’t turn to this definition for any

reason.

Deposition of Richard Ford, AK Steel's Corporate Manager of

Benefits, at 83, C.A. App. 170.

22

Minneapolis Auto Dealers Benefit Fund, 447 F.3d 1109,

1114 (8th Cir. 2006) (one factor “[t]o determine if a

plan administrators interpretation of a plan is

reasonable” is “whether the interpretation conflicts

with the substantive or procedural requirements of

ERISA”) (citing Finley v. Special Agents Mut. Benefit

Ass’n, 957 F.2d 617, 621 (8th Cir. 1992)); Fagan v.

National Stabilization Agreement of the Sheet Metal

Industry Trust Fund, 60 F.3d 175, 180 (4th Cir. 1995)

(one factor in determining reasonableness of

administrators interpretation of plan terms is

“whether the challenged interpretation is at odds with

the procedural and substantive requirements of ERISA

itself”) (quoting De Nobel v. Vitro Corp., 885 F.2d 1180,

1188 (4th Cir. 1989)); Cotter v. Eastern Conference of

Teamsters Retirement Plan, 898 F.2d 424, 428 (4th Cir.

1990) (rejecting plan administrator’s interpretation of

plan terms because “(the administrator’s]

interpretation of the Plan might lead to forfeiture of

vested rights to retirement benefits” in violation of

ERISA § 203(a), 29 U.S.C. § 1053(a)). Cf. Wagener v.

SBC Pension Benefit Plan, 407 F.3d 395, 403 (D.C. Cir.

2005) (“An interpretation of the Plan that rests on

impermissible discrimination is clearly unreasonable

and, therefore, it fails whether we apply de novo

review or a deferential standard of review”).

Thus, even if the Sixth Circuit’s discussion of

contra proferentum in reference to Section 4.1 of the

Plan were misplaced, it would not affect the conclusion

of the court of appeals that plaintiffs’ lump sum

distributions had to be actuarially equivalent to the

“accrued benefit” defined by the Plan in Section 1.2.

Indeed, the outcome would not have changed one whit

if contra proferentum had never been mentioned.

23

B. There is No “Circuit Split” on Contra

Proferentum

In Firestone Tire & Rubber Co. v. Bruch, 489 U.S.

101 (1989), this Court held that a denial of benefits

claim under ERISA § 502(a)(1)(B), 29 U.S.C.

§ 1132(a)(1)\(B), “is to be reviewed under a de novo

standard unless the benefit plan gives the

administrator or fiduciary discretionary authority to

determine eligibility for benefits or to construe the

terms of the plan,” in which case an abuse of discretion

standard applies. 489 U.S. at 115. The Court added

that, “if a benefit plan gives discretion to an

administrator or fiduciary who is operating under a

conflict of interest, that conflict must be weighed as a

‘facto[r] in determining whether there is an abuse of

discretion.” Id. (quoting Restatement (Second) of

Trusts § 187, Comment d (1959)).

AK Steel contends there is a “circuit split” on the

application of Firestone’s holdings by the circuit courts,

involving the use of the contra proferentum doctrine in

abuse of discretion cases. Petition at 23-27. According

to AK Steel, tour circuits reject any use of contra

proferentum in such cases, while two circuits permit

the doctrine to be used and two other circuits adopt a

hybrid approach. Jd. Contrary to AK Steel’s

contention, however, there is no conflict warranting

review by this Court.

The hybrid approach of the Fifth Circuit

determines “the legally correct interpretation under

the doctrine of contra proferentem,” Spacek v. Maritime

Assoc., 134 F.3d 283, 298 (5th Cir. 1998), and if it is

not, decides “whether the administrator's decision was

24

an abuse of discretion.” Spacek, 184 F.3d at 292, 298

n.14; Rhorer v. Raytheon Engineers & Constructors,

Inc., 181 F.3d 634, 642 (5th Cir. 1999). AK Steel

contends that this conflicts with decisions like Kimber

v. Thiokol Corp., 196 F.3d 1092, 1100 (10th Cir. 1999),

in which the Tenth Circuit held that “the doctrine of

contra proferentem is inapplicable” in abuse of

discretion cases. Yet the Tenth Circuit itself saw no

such conflict in Kimber. Discussing the Fifth Circuit’s

hybrid approach in Spacek and Rhorer, the Tenth

Circuit found that “[s]ince this approach merely melds

contra proferentem into the required discretionary

review, we do not view it as conflicting with our

decision today.” Kimber, 196 F. 3d at 1101.

AK Steel further errs when it contends that the

Sixth Circuit’s use of contra proferentum overrides

plan administrator discretion. Sixth Circuit

jurisprudence embraces Firestone’s requirement of

deference. In Graham v. Western Kentucky

Navigation, Inc., No. 99-5708, 2000 U.S. App. LEXIS

22250 (6th Cir. Aug. 23, 2000), Circuit Judge R. Guy

Cole, Jr., one of the pane] members in the instant case,

wrote that “[aJn arbitrary and capricious standard of

review is ‘highly deferential’ to the decision of the

party making the benefits determination. To meet this

standard, the reviewing court need only find that the

decision to deny benefits was ‘rational in light of the

plan’s provisions.” 2000 U.S. App. LEXIS 22250 at *4

(citation omitted) (quoting Yeager v. Reliance

Standard Life Ins. Co., 88 F.3d 376, 380 (6th Cir.

1996)).

The Sixth Circuit has never held that contra

proferentum can override a reasonable exercise of

25

administrator discretion. See Mitchell v. Dialysis

Clinic, Inc., 18 Fed. Appx. 349, 2001 U.S. App. LEXIS

19439 (6th Cir. Aug. 24, 2001). In Mitchell, the

plaintiffs cited “cases from this Circuit that they claim

have reduced the deference given to an administrator’s

decision through the use of state principles of contract

interpretation,” specifically contra proferentum.

Mitchell, 18 Fed. Appx. at 353. Dissecting the

references to contra proferentum in those cases, the

Sixth Circuit concluded that “[w]e do not believe that

through these statements this Circuit has established

a rule of interpretation that would completely

contradict the deference paid to an administrator’s

decision.” Mitchell, 18 Fed. Appx. at 352-54

(discussing Perez v. Aetna Life Ins. Co., 150 F.3d 550,

557 n.7 (6th Cir. 1998) (en banc); University Hospitals

of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 846-

47 (6th Cir. 2000); Copeland Oaks v. Haupt, 209 F.3d

811, 813 (6th Cir. 2000)).

For example, although Perez had referred t» the

contra proferentum doctrine, “that language does not

hold that the Perez court was suggesting that the rule

of interpretation is to be used in ERISA cases when

the standard of review is arbitrary and capricious.”

Mitchell, 18 Fed. Appx. at 353. Indeed, Perez

concluded that “[blecause the only reasonable

interpretation of the Pian concludes that it vests

discretion in Aetna to make benefit determinations,

Perez's contra proferentum argument lacks merit.” Jd.

(quoting Perez, 150 F.3d at 557 & n.7). Similarly,

contra proferentum was mentioned in University

Hospitals and Copeland Oaks, supra, but was not

dispositive in either case. See Mitchell, 18 Fed. Appx.

at 354.

26

Sixth Circuit decisions before and after Mitchell

have declined to apply contra proferentum where the

plan administrator was empowered to interpret plan

terms, and instead deferred to administrator

discretion. See Graham v. Western Kentucky

Navigation, Inc., No. 99-5708, 2000 U.S. App. LEXIS

22250 at *7-8 (6th Cir. Aug. 23, 2000); Marquette

General Hosp. v. Goodman Forest Industries, 315 F.3d

629, 632-33 (6th Cir. 2003); Ziegler v. HRB

Management, Inc., 182 Fed. Appx. 405, 408, 2006 U.S.

App. LEXIS 11905 at *9-10 (6th Cir. May 9, 2006).

Many other Sixth Circuit decisions defer to

administrator discretion without even considering

contra proferentum. Lennon v. Metropolitan Life Ins.

Co., 504 F.3d 617 (6th Cir. 2007); Osborne v. Hartford

Life and Accident Ins. Co., 465 F.3d 296 (6th Cir.

2006), cert. denied, ___ U.S. __, 128 S. Ct. 46 (2007);

Belluardo v. Cox Enterprises, Inc. Pension Plan, 157

Fed. Appx. 823, 2005 U.S. App. LEXIS 24975 (6th Cir.

Nov. 8, 2005); Gismondi v. United Technologies Corp.,

408 F.3d 295 (6th Cir. 2005).

The other circuit on which AK Steel relies for its

“circuit split” is the Fourth, but there, too, the cases

cited by AK Steel fail to exhibit the alleged conflict.

Carolina Care Plan, Inc. v. McKenzie, 467 F.3d 383

(4th Cir. 2006), cert. dismissed, _ U.S. __, 128 S.. Ct.

6 (2007); McKeldin v. Reliance Standard Life Ins. Co.,

No. 06-1743, 2007 U.S. App. LEXIS 24289 (4th Cir.

Oct. 17, 2007). In Carolina Care Plan, contra

proferentum was only the last of several factors

analyzed by the court, and it did not override any other

factor. Rather, it was only because the plan

administrator's interpretation failed under the factors

previously considered by the court that contra

27

proferentum was even reached. 467 F.3d at 387-89. In

McKeldin, the court mentioned contra proferentum but

never applied it, and ultimately upheld the plan

administrator's interpretation as a proper exercise of

discretion. 2007 U.S. App. LEXIS 24289 at *8-12.

CONCLUSION

The Sixth Circuit’s decision in the instant case is

not in conflict with decisions of other circuit courts of

appeals, either on the scope of relief afforded by ERISA

§§ 502(aX 1B), 29 U.S.C. § 1132(a)(1)(B), or on the

applicability of contra proferentum in interpreting a

pension plan. Therefore, AK Steel’s petition for a writ

of certiorari should be denied.

Respectfully Submitted,

Thomas R. Theado

Counsel of Record

Robert D. Gary

Jori Bloom Naegele

Thomas A. Downie

Gary, Naegele & Theado, LLC

446 Broadway Avenue

Lorain, Ohio 44052-1740

(440) 244-4809

Allen C. Engerman

Law Offices of Allen C.

Engerman, P.C.

666 Dundee Road, Suite 1200

Northbrook, Illinois 60062

(847) 564-5555