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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0053%3A3

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2009

## Text

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0053%3A3. Public record. Not legal advice.