Filed: Feb. 26, 1998
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 97-1783 _ Union Pacific Railroad Company; * Missouri Pacific Railroad Company; * Union Pacific Corporation; Missouri- * Kansas-Texas System Pension Plan For * Non-Agreement Employees, by Ursula * Fairbairn, Barbara Schaefer, and James * Young, in their capacity as the pension * committee, * * Appellants, * * v. * * Appeal and Cross-Appeal from the B r y a n L. Beckham; Gary K. Bradshaw; * United States District Court W i l l i a m E. Di
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 97-1783 _ Union Pacific Railroad Company; * Missouri Pacific Railroad Company; * Union Pacific Corporation; Missouri- * Kansas-Texas System Pension Plan For * Non-Agreement Employees, by Ursula * Fairbairn, Barbara Schaefer, and James * Young, in their capacity as the pension * committee, * * Appellants, * * v. * * Appeal and Cross-Appeal from the B r y a n L. Beckham; Gary K. Bradshaw; * United States District Court W i l l i a m E. Dix..
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 97-1783
___________
Union Pacific Railroad Company; *
Missouri Pacific Railroad Company; *
Union Pacific Corporation; Missouri- *
Kansas-Texas System Pension Plan For *
Non-Agreement Employees, by Ursula *
Fairbairn, Barbara Schaefer, and James *
Young, in their capacity as the pension *
committee, *
*
Appellants, *
*
v. *
* Appeal and Cross-Appeal
from the
B r y a n L. Beckham; Gary K. Bradshaw; *
United States District Court
W i l l i a m E. Dixon; Mike L. Eudy; *
for the District of Nebraska.
M a r s h a l l W. Hales; Billy Joe Harmon; *
James M. Hentschel; Carl W. Holem; *
James D. Miller; Cecil Rhodes, Jr.; Paul *
J. Richter; Daniel A. Witte, *
*
Appellees, *
_______________ *
*
Wyatt Company, The; Towers Perrin, *
*
Interested Parties, *
_______________ *
*
Pension Plan For Salaried Employees of *
Union Pacific Corporation and *
Affiliates, *
*
Defendant, *
*
Secretary of Labor, *
*
Amicus Curiae, *
*
Bryan L. Beckham; Gary K. Bradshaw; *
William E. Dixon; Mike L. Eudy; *
Marshall W. Hales; Billy Joe Harmon; *
James M. Hentschel; Carl W. Holem; *
James D. Miller; Cecil Rhodes, Jr.; Paul *
J. Richter; Daniel A. Witte, *
*
Appellees, *
*
Union Pacific Corporation; Missouri- *
Kansas-Texas System Pension Plan For *
Non-Agreement Employees; Pension *
Committee of the MKT Plan; Named *
Fiduciary-Plan Administration of the UP *
Plan (The "UP Plan Administrator"), *
*
Appellants. *
___________
No. 97-1791
___________
Union Pacific Railroad Company; *
Missouri Pacific Railroad Company; *
Union Pacific Corporation; Missouri- *
Kansas-Texas System Pension Plan For *
Non-Agreement Employees, by Ursula *
Fairbairn, Barbara Schaefer, and James *
-2-
Young, in their capacity as the pension *
committee, *
*
Appellees, *
*
v. *
*
B r y a n L. Beckham; Gary K. Bradshaw; *
W i l l i a m E. Dixon; Mike L. Eudy; *
M a r s h a l l W. Hales; Billy Joe Harmon; *
James M. Hentschel; Carl W. Holem; *
James D. Miller; Cecil Rhodes, Jr.; Paul *
J. Richter; Daniel A. Witte, *
*
Appellants, *
_______________ *
*
Wyatt Company, The; Towers Perrin, *
*
Interested Parties, *
_______________ *
*
Pension Plan For Salaried Employees of *
Union Pacific Corporation and *
Affiliates, for Salaried Employees of *
Union Pacific Corporation and Affiliates, *
*
Defendant, *
*
Secretary of Labor, *
*
Amicus Curiae, *
*
Bryan L. Beckham; Gary K. Bradshaw; *
William E. Dixon; Mike L. Eudy; *
Marshall W. Hales; Billy Joe Harmon; *
James M. Hentschel; Carl W. Holem; *
-3-
James D. Miller; Cecil Rhodes, Jr.; Paul *
J. Richter; Daniel A. Witte, *
*
Appellants, *
*
Union Pacific Corporation; Missouri- *
Kansas-Texas System Pension Plan For *
Non-Agreement Employees; Pension *
Committee of the MKT Plan; Named *
Fiduciary-Plan Administration of the UP *
Plan (The "UP Plan Administrator"), *
*
Appellees. *
___________
Submitted: December 8, 1997
Filed: February 26, 1998
___________
Before McMILLIAN, MAGILL, and MURPHY, Circuit Judges.
___________
MAGILL, Circuit Judge.
Employers and their employees have brought this
interlocutory appeal and cross-appeal of the district
court's grant of partial summary judgment on claims and
cross-claims for declaratory relief regarding the
employers' interpretations of their ERISA pension plans.
The district court held that the employees' cross-claim
challenges, filed in 1994, to the employers' 1988
interpretations of their plans were time-barred, but that
the cross-claim challenge to a 1992 amendment to one of
the employer's plans, which relied on the 1988
interpretation of its plan, was not time-barred. Because
we find that all of the cross-claims in this matter are
time-barred, we affirm in part and reverse in part.
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I.
Prior to 1988, the Missouri-Kansas-Texas Railroad
Company (MKT) maintained a pension plan (the MKT Plan)
for its employees. The MKT Plan provided for the payment
of benefits to eligible MKT employees in accordance with
the amount of "Credited Service" they accrued while
employed by MKT. Under the MKT Plan, an eligible
employee accrued "Credited Service" in accordance with
the number of hours that the employee worked with MKT
during a plan year.
In 1986, the Missouri Pacific Railroad Company
(MPRR), a subsidiary of Union Pacific Company (UP),
negotiated to acquire substantially all shares of stock
in MKT. The Interstate Commerce Commission (ICC)
approved the acquisition in May 1988, and on August 12,
1988, MPRR acquired substantially all shares of stock in
MKT and assumed direct control over MKT's assets. Prior
to the acquisition, UP maintained a pension plan (the UP
Plan) for its employees which, like the MKT Plan,
provided for the payment of benefits to eligible
employees in accordance with the amount of "Credited
Service" they accrued while employed by UP. Under the UP
Plan, an employee accrued "Credited Service" in
accordance with the number of hours that the employee
worked with UP during a plan year.
After the ICC approved the acquisition, but before
MPRR's direct control, MKT and UP provided the MKT
employees with the option either to accept a voluntary
severance package from MKT and terminate their employment
prior to the acquisition date or to become employed, as
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of the acquisition date, by UP. UP explained in explicit
terms to the MKT employees that if they opted to become
UP employees, then they would cease to accumulate
"Credited Service" under the MKT Plan as of the
acquisition date. UP also clearly explained that once
the MKT employees commenced working for UP, they would
begin accumulating "Credited Service" under the UP Plan
but would not receive any "Credited Service" under the UP
Plan for their pre-acquisition MKT service.
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To specifically demonstrate the effects of the
acquisition on the MKT employees' pension benefits under
the MKT Plan and the UP Plan, UP distributed "fact
sheets" to the MKT employees and held three open meetings
where the employees were permitted to ask questions about
the effect of the acquisition on the various plan
benefits. Each fact sheet asserted that prior MKT
service would not be used to determine a former MKT
employee's accrual of "Credited Service" under the UP
Plan. In addition, each fact sheet provided an example
illustrating that post-acquisition UP service would not
be used to determine an employee's accrual of "Credited
Service" under the MKT Plan.
Rather than accepting the severance offer, several
former MKT employees, including Bryan L. Beckham, Gary K.
Bradshaw, William E. Dixon, Mike L. Eudy, Marshall W.
Hales, Billy Joe Harmon, James M. Hentschel, Carl W.
Holem, James D. Miller, Cecil Rhodes, Jr., Paul J.
Richter, and Daniel A. Witte (collectively, the
claimants), ceased employment with MKT and accepted
employment with UP. The claimants concede that they
received the UP fact sheets and that, as of August 1988,
they were aware that "after the UP/MKT merger, [they]
would cease earning Credited Service under the MKT Plan,
and that [they] would not receive Credited Service under
the UP Plan for [their] MKT employment." Witte Aff. ¶ 3,
reprinted in III J.A. at 849-50.
On September 24, 1992, the UP Plan was amended to
offer a voluntary early retirement incentive program
(VERIP) to UP employees who had acquired at least four
years of continuous "Credited Service" with UP as of
December 31, 1992. Consistent with its benefits accrual
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policy adopted and explained to the claimants in 1988, UP
refused to consider former MKT employees' pre-acquisition
service with MKT when determining their eligibility for
the VERIP. The VERIP expired in December 1992.
In 1993, the claimants sought legal advice concerning
UP's refusal to count pre-acquisition MKT service as
"Credited Service" under the UP Plan and post-acquisition
UP service as "Credited Service" under the MKT Plan.
Prior to this time, the claimants
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assumed either that UP's determinations concerning
"Credited Service" were proper interpretations of the
plans or that UP intended to change the plans to bring
about this result. See id. ¶ 4, reprinted in III J.A. at
850. In March 1994, however, the claimants wrote a
letter to UP threatening litigation concerning the
refusal to consider post-acquisition UP service when
calculating benefits under the MKT Plan. UP referred the
letter to the Pension Committee of the MKT Plan (MKT Plan
Committee), which deemed the claimants' letter to be a
request for benefits. On March 31, 1994, the MKT Plan
Committee denied the claimants' request for benefits,
asserting that UP service did not count as "Credited
Service" under the MKT Plan.
On April 1, 1994, UP, Union Pacific Railroad Company,
MPRR, and the MKT Plan filed a class action complaint for
declaratory judgment under the Employee Retirement Income
Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461,
against the claimants. In their complaint, plaintiffs
sought a determination that their construction of the MKT
Plan and their refusal to count post-acquisition UP
employment as "Credited Service" under the MKT Plan was
neither arbitrary, capricious, nor an abuse of
discretion. The claimants counterclaimed pursuant to 29
U.S.C. § 1132(a)(1)(B) and (3), naming UP, the MKT Plan,
the MKT Plan Committee, the UP Plan, and the UP Plan
Administrator as counterclaim defendants (collectively,
the UP Parties). In their counterclaim, the claimants
sought remedies under ERISA relating to the UP Parties'
construction and implementation of the UP Plan, the MKT
Plan, and the VERIP. After amending their counterclaim,
the claimants alleged four causes of action (counts I-IV)
against the UP Parties relating to their refusal to count
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post-acquisition UP service as "Credited Service" under
the MKT Plan, one cause of action (count V) against the
UP Parties relating to their refusal to count pre-
acquisition MKT service as "Credited Service" under the
UP Plan, and one cause of action (count VI) against the
UP Parties relating to their refusal to count pre-
acquisition MKT service
-10-
as "Credited Service" when determining eligibility for
the VERIP.1
The UP Parties moved to dismiss or stay the
counterclaims because the claimants had failed to exhaust
available administrative remedies under the UP Plan and
the MKT Plan. The UP Parties argued that the claimants
never appealed the MKT Plan Committee's denial of
benefits and that the claimants never attempted to seek
benefits under the UP Plan or the VERIP before filing
their counterclaim. The claimants contended that
exhaustion of administrative remedies would be futile and
inappropriate because their claims were asserted as
compulsory counterclaims to the UP Parties' Complaint.
The district court agreed that requiring the claimants to
exhaust their administrative remedies was futile because
"[t]here is no indication that the position taken by the
[UP Parties] since 1988 and in their complaint would be
subject to change if the [claimants] initiated or
participated in an optional administrative review
process." Mem. and Order at 5 (D. Neb. June 2, 1995),
reprinted in Appellants’ Add. at 5.
The UP Parties subsequently filed a motion for
summary judgment on the grounds that the claimants failed
to state claims upon which relief could be granted and,
alternatively, that their claims were time-barred. The
district court dismissed counterclaim counts II and V
(breach of fiduciary duty claims) for failure to state a
1
The amended counterclaim also included a seventh count relating to UP's
alleged failure to comply with various ERISA disclosure requirements. However, that
count was not certified as a class claim and was not a subject of the underlying motions
for summary judgment and, thus, is not before this Court on appeal.
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claim. The district court also dismissed counterclaim
counts I, III, IV, and V as time-barred by the applicable
Nebraska statute of limitations. The district court
refused, however, to dismiss counterclaim count VI
(relating to the VERIP).
The UP Parties, after conducting a sua sponte
administrative appeal of the
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claimants' claims,2 also submitted a motion for summary
judgment on the merits, arguing that the district court
must review the UP Parties' "Credited Service"
interpretation under an abuse of discretion standard.
The district court denied the motion, reasoning that
deferential review was inappropriate here, where
exhaustion was not required.
The district court, in accordance with 28 U.S.C. §
1292(b), certified each of its orders for appeal. The UP
Parties appeal the district court's refusal to dismiss
counterclaim count VI, the district court's refusal to
require the claimants to exhaust their administrative
remedies, and the district court's refusal to review
their final administrative decision under a deferential
standard. The claimants appeal the district court's
dismissal of counterclaim counts I, III, IV, and V as
time-barred. 3
II.
We review the district court's grant of summary
judgment de novo, applying the same standards as the
district court. See Mayard v. Hopwood, 105 F.3d 1226,
1227 (8th Cir. 1997). Summary judgment is appropriate
only if, after viewing the facts and the inferences to be
2
The UP Parties conducted the review on their own initiative and "invited" the
claimants to submit documents for consideration. Only a few of the claimants accepted
this offer, however, because the district court had already ruled that requiring the
claimants to exhaust the administrative procedure would be futile.
3
None of the parties' briefs address the district court's dismissal of counterclaim
counts II and V for failure to state a claim. Accordingly, we will not address the
district court's dismissal of these counts on this ground.
-13-
drawn from them in the light most favorable to the
nonmoving party, the record shows that there is no
genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law. See
Fed. R. Civ. P. 56(c); Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
-14-
After reviewing the record, we find that each of the
claimants' claims is time-barred. Because ERISA does not
contain a statute of limitations for actions seeking to
recover plan benefits or to clarify rights to future plan
benefits under § 1132(a)(1)(B), or for actions alleging
violations of 29 U.S.C. § 1054(g) and (h), this Court
looks to state law for the most analogous statute of
limitations. See Adamson v. Armco, Inc., 44 F.3d 650,
652 (8th Cir. 1995). In this case, the parties agree
that the most analogous state statute of limitations for
counterclaim counts I, III, IV, V, and VI is Nebraska's
five-year statute of limitations for actions on written
contracts. See Neb. Rev. Stat. Ann. 25-205(1) (Michie
1995); Johnson v. State Mut. Life Assurance Co. of Am.,
942 F.2d 1260, 1263 (8th Cir. 1991) (en banc) (suit
brought under § 1132(a)(1)(B) "should be characterized as
a contract action for statute of limitations purposes").
When analyzing the effects of statutes of
limitations, the Supreme Court has stated that "the
length of the [limitations] period allowed for
instituting suit inevitably reflects a value judgment
concerning the point at which the interests in favor of
protecting valid claims are outweighed by the interests
in prohibiting the prosecution of stale ones." Johnson
v. Railway Express Agency, Inc., 421 U.S. 454, 463-64
(1975). Important policies, such as rapid resolution of
disputes, repose for those against whom a claim could be
brought, and avoidance of litigation involving lost
evidence or distorted testimony of witnesses, underlie
statutes of limitations. See Wilson v. Garcia,
471 U.S.
261, 271 (1985). Accordingly, statutes of limitations
"for gaining access to the federal courts are not to be
disregarded by courts out of a vague sympathy for
-15-
particular litigants," Baldwin County Welcome Ctr. v.
Brown, 466 U.S. 147, 152 (1984) (per curiam), and strict
adherence to such limitations periods "is the best
guarantee of evenhanded administration of the law."
Mohasco Corp. v. Silver,
447 U.S. 807, 826 (1980).
In this case, and despite determining the limitations
period by analyzing state law, this Court looks to
federal common law to determine the time at which a
plaintiff's
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federal claim accrues. See Cada v. Baxter Healthcare
Corp., 920 F.2d 446, 450 (7th Cir. 1990); see also
Connors v. Hallmark & Son Coal Co.,
935 F.2d 336, 341
(D.C. Cir. 1991) (citing cases). In a federal question
case, and in the absence of a contrary directive from
Congress, the "discovery rule," according to which a
plaintiff's cause of action accrues when he discovers, or
with due diligence should have discovered, the injury
that is the basis of the litigation, is used to determine
when a plaintiff's federal claim accrues. See Alcorn v.
Burlington N. R.R.,
878 F.2d 1105, 1108 (8th Cir. 1989)
(cause of action accrues "when a claimant knows, or
should know through an exercise of reasonable diligence,
of the acts constituting the alleged violation"); see
also
Connors, 935 F.2d at 342 (citing eight circuits
holding that "the discovery rule is the general accrual
rule in federal courts . . . [and] is to be applied in
all federal question cases");
Cada, 920 F.2d at 450
(holding that the discovery rule is "read into statutes
of limitations in federal-question cases (even when those
statutes of limitations are borrowed from state law)").
Consistent with the discovery rule, the general rule
in an ERISA action is that a cause of action accrues
after a claim for benefits has been made and has been
formally denied. See Cotter v. Eastern Conf. of
Teamsters Retirement Plan, 898 F.2d 424, 428-29 (4th Cir.
1990). Thus, a beneficiary cannot successfully argue
that he was unaware of an injury after a claim for
benefits has been formally denied. Nonetheless, and
still consistent with the discovery rule, an ERISA
beneficiary's cause of action accrues before a formal
denial, and even before a claim for benefits is filed,
"when there has been a repudiation by the fiduciary which
-17-
is clear and made known to the beneficiar[y]." Miles v.
New York State Teamsters Conf. Pension & Retirement Fund
Employee Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir.
1983) (quotations and citations omitted); see also Daill
v. Sheet Metal Workers' Local 73 Pension Fund,
100 F.3d
62, 66 (7th Cir. 1996) ("a cause of action accrues upon
a clear and unequivocal repudiation of rights under the
pension plan which has been made known to the
beneficiary," even if such repudiation occurs prior to
the beneficiary's submission of a formal claim);
Schroeder v. Phillips Petroleum Co., 970 F.2d 419, 420
(8th Cir. 1992)
-18-
(per curiam) (agreeing with district court that cause of
action accrued in 1986, when beneficiaries were clearly
aware that they would not receive benefits, despite fact
that beneficiaries had not yet filed applications for
benefits); Martin v. Construction Laborer's Pension
Trust, 947 F.2d 1381, 1385 (9th Cir. 1991) (cause of
action accrues upon a "clear and continuing repudiation
of [the beneficiary's] claim");
Cotter, 898 F.2d at 429
(absent a formal claim and a formal denial of the claim,
a beneficiary's cause of action accrues at "the time at
which some event other than a denial of a claim should
have alerted [the beneficiary] to his entitlement to the
benefits he did not receive").
In this case, the claimants were unequivocally
informed by August 12, 1988, that their pre-acquisition
MKT service would not be used to determine "Credited
Service" under the UP Plan and that their post-
acquisition UP service would not be used to determine
"Credited Service" under the MKT Plan. The claimants
have averred that
[s]ince 1986 . . . [the claimants] repeatedly
have been informed by numerous individuals,
including employee benefit department employees
and the Chairman and Chief Executive Officer of
the Union Pacific Railroad, that they would not
receive any benefit credit under the UP Plan for
their MKT service. At no time has any corporate
or UP Plan official indicated that this position
would be changed, or even that it was under
review.
Mem. of Law in Opp’n to Mot. to Dismiss or to Stay Defs.'
Am. Countercl., Apr. 14, 1995 at 15-16 (footnote
omitted). One of the claimants submitted an affidavit
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to the district court, asserting that
[i]n or about August 1988, various corporate
representatives of the Union Pacific Railroad
informed me and other class members that after
the UP/MKT merger, we would cease earning
Credited Service under the MKT Plan, and that we
would not receive Credited Service under the UP
Plan for our MKT employment.
-20-
Witte Aff. ¶ 3, reprinted in III J.A. at 849-50. Witte
also asserted that at that time, "we thought we were being
treated unfairly." Id. ¶ 4, reprinted in III J.A. at 850.
Prior to the August 1988 acquisition, UP held several
open meetings and distributed literature to explain to MKT
employees that pre-acquisition MKT service would not be
used to determine "Credited Service" under the UP Plan and
that post-acquisition UP service would not be used to
determine "Credited Service" under the MKT Plan. The fact
sheets distributed by UP stated that "UP service after the
merger date will be used for the accrual of pension
benefits only under the UP Plan." Fact Sheet C, Question
11 and Answer, reprinted in Appellants’ Add. at 74. The
fact sheets also announced that "[p]rior [MKT] service
will not be used to determine accrual under the UP Plan
for pension benefits." Id., Question 9 and Answer,
reprinted in Appellants’ Add. at 73. The fact sheets also
provided the following example to demonstrate how MKT
service and UP service would be allocated when determining
pension benefits under the different pension plans at
retirement:
Employee "C" has six years creditable service
with MKT, joins UP and works four years before
deciding to retire. . . . [Upon retiring,]
Employee "C" will receive a pension benefit
calculated on six years of service under the MKT
pension plan and four years under the UP pension
plan.
Id.
As of August 1988, the UP Parties had clearly and
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unequivocally informed the claimants that their pre-
acquisition MKT service would not count as "Credited
Service" under the UP Plan and that their post-acquisition
UP service would not count as "Credited Service" under the
MKT Plan. The claimants, at that time, believed that this
allocation scheme was "unfair" and improper, and could
have filed a cause of action challenging the UP Parties'
interpretation of "Credited Service" under either of the
plans. Accordingly, we hold that the claimants' causes of
action, as alleged in amended
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counterclaim counts I, III, IV, and V, accrued in August
1988.4 Because the claimants did not file their
counterclaim until 1994, these counts are time-barred
under the applicable five-year statute of limitations.
The claimants argue that even if counterclaim counts
I, III, IV, and V are time-barred, counterclaim count VI
cannot be time-barred because the VERIP was not offered
until 1992. We disagree.
To prevail under counterclaim count VI, the claimants
must establish that the UP Parties' interpretation of
"Credited Service" under the UP Plan when determining
eligibility for the VERIP is incorrect. See First Am.
Answer and Countercl., Count VI, at 21-22, reprinted in I
J.A. at 100-01.5 The UP Parties' interpretation of
4
The claimants' argument that exhaustion of remedies would be futile in this case
supports this conclusion. When exhaustion is futile, an ERISA beneficiary's claim
"accrue[s] at the time at which it became futile to apply for benefits, because . . . at that
time there was a de facto denial of [the beneficiary's] claim." Barnett v. International
Bus. Machs. Corp., 885 F. Supp. 581, 591 (S.D.N.Y. 1995); see also Schroeder v.
Phillips Petroleum Co.,
970 F.2d 419, 420 (8th Cir. 1992) (agreeing with district court
that cause of action accrued in 1986 when facts demonstrated futility since 1986). The
claimants argue that requiring them to exhaust their administrative remedies has been
futile since August 1988, after the UP Parties had specifically informed them that they
would not receive any "Credited Service" under the UP Plan for pre-acquisition MKT
service and that they would not receive any "Credited Service" under the MKT Plan for
post-acquisition UP service. Taking these allegations as true, the claimants' causes of
action, as alleged in counterclaim counts I, III, IV, and V, accrued no later than August
1988--over five years before they filed their counterclaim.
5
Count VI, in relevant part, provides:
71. Because UPC [Union Pacific Corporation] and the Plan
-23-
"Credited
Administrator erroneously determined that Counterclaim Plaintiffs were
not entitled to any Credited Service under the UP Plan for their Credited
Service under the MKT Plan, UPC refused to allow Counterclaim
Plaintiffs to participate in the VERIP. The VERIP subsequently expired.
72. UPC and the Plan Administrator have denied Counterclaim Plaintiffs
a UP Plan benefit to which they are entitled, i.e., early retirement with an
enhanced pension . . . .
First Am. Answer and Countercl. at 22, ¶¶ 71-72.
-24-
Service" under the UP Plan when determining VERIP
eligibility, however, is the same as their interpretation
of "Credited Service" under the UP Plan when determining
benefits, which is the basis of counterclaim count V. As
we have held, the claimants are time-barred from
challenging this long-standing interpretation.
"Where a complaint based upon an earlier event is
time-barred, to permit the event itself to cloak with
illegality that which was otherwise lawful in effect
results in reviving a legally defunct" claim. Lorance v.
AT&T Techs., Inc., 490 U.S. 900, 911 (1988) (alterations,
quotations, and citation omitted).6 The claimants'
attempt to utilize the VERIP to challenge the UP Parties'
interpretation of "Credited Service" under the UP Plan is
nothing more than an attempt to revive their time-barred
claim concerning this interpretation. Because the
claimants cannot successfully challenge the interpretation
of "Credited Service" under the UP Plan, the claimants'
challenge to the UP Parties' eligibility determination
under the VERIP in counterclaim count VI must fail as a
matter of law. See Wilson v. International Bus. Machs.
Corp.,
62 F.3d 237, 240 (8th Cir. 1995) (defendant
entitled to summary judgment if plaintiff cannot establish
a factual dispute on an element of its cause of action
(citing Bialas v. Greyhound Lines, Inc.,
59 F.3d 759, 762
(8th Cir. 1995))). Accordingly, the district
6
Noting that Lorance's specific holding has been abrogated by statute--42 U.S.C.
§ 2000e-5(e)(2)--the Seventh Circuit recently held that Lorance's "reasoning remains
persuasive outside of the Title VII/intentionally discriminatory seniority system
context." Huels v. Exxon Coal USA, Inc., 121 F.3d 1047, 1050 n.1 (7th Cir. 1997)
(citation omitted).
-25-
court erred in failing to grant summary judgment to the UP
Parties on this count.
III.
For the foregoing reasons, we affirm the district
court order dismissing counterclaim counts I, III, IV, and
V as time-barred, we reverse the district court order
refusing to dismiss counterclaim count VI, and we remand
for further proceedings consistent with this opinion.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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