NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 14a0494n.06

                                       Case No. 10-6131

                         UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT

                                                                                FILED
                                                                           Jul 09, 2014
WILLIAM R. CANADA, JR.,                              )
                                                                      DEBORAH S. HUNT, Clerk
                                                     )
       Plaintiff-Appellant,                          )
                                                     )        ON APPEAL FROM THE
v.                                                   )        UNITED STATES DISTRICT
                                                     )        COURT FOR THE MIDDLE
AMERICAN AIRLINES, INC. PILOT                        )        DISTRICT OF TENNESSEE
RETIREMENT BENEFIT PROGRAM;                          )
AMERICAN AIRLINES, INC., as Administrator            )
of the Pilot Retirement Benefit Program,             )
                                                     )                   OPINION
       Defendants-Appellees.                         )


BEFORE:       BOGGS, COLE, and McKEAGUE, Circuit Judges.

       COLE, Circuit Judge.      William Canada, Jr. appeals from a judgment in favor of

American Airlines, Inc. Pilot Retirement Benefit Program (“the Plan”) and American Airlines,

Inc. (“American”), the Plan administrator, in this ERISA action to clarify his rights to future

pension benefits. We must determine whether American properly deferred Canada’s pension-

benefit payments (after Canada elected to keep flying past the normal retirement age) without

compensating him for the deferral with an actuarial increase in the benefits ultimately paid.

Because federal law does not require an actuarial adjustment under these circumstances, and

because American did not interpret the Plan’s provisions in an arbitrary or capricious manner, we

affirm the entry of judgment in favor of American and the Plan on all claims.
Case No. 10-6131
Canada v. Am. Airlines, Inc. Pilot Ret. Benefit Program, et al.

                                      I. BACKGROUND

       Federal law permits qualified retirement plans such as the one at issue here to suspend the

payment of accrued pension benefits during periods of continued qualifying employment. See

29 U.S.C. § 1053(a)(3)(B); I.R.C. § 411(a)(3)(B). ERISA § 203(a)(3)(B) and a corresponding

provision in the Internal Revenue Code contemplate that individuals may, for a host of reasons,

wish to defer retirement by continuing to work past the normal retirement age identified in their

retirement plans.   See 29 U.S.C. § 1053(a)(3)(B); I.R.C. § 411(a)(3)(B).        Employees who

continue working past their normal retirement age (i.e., the age when their pension benefits vest)

are commonly referred to as being in “Section 203(a)(3)(B) service.”

       Ordinarily, federal law requires qualified retirement plans to compensate retirees for any

deferral of pension payments by way of an actuarial adjustment—or increase in payments—to

account for the lost time-value of money. Treas. Reg. §§ 1.411(a)-7(a)(1)(ii), 1.411(c)-1(e)(1).

Nevertheless, federal law permits retirement plans to forego making actuarial adjustments for

employees who remain in Section 203(a)(3)(B) service. Contilli v. Local 705 Int’l Bhd. of

Teamsters Pension Fund, 

, 722 (7th Cir. 2009) (citing 29 U.S.C. § 1053(a)(3)(B))

(“There is an exception to the actuarial-adjustment requirement for a participant who puts off

retirement while continuing to work.”); Atkins v. Nw. Airlines, Inc., 

, 1201

(8th Cir. 1992) (same). As the relevant Treasury Regulation succinctly explains:

       (2) Employment after Retirement. No actuarial adjustment to an accrued
       benefit is required on account of employment after normal retirement age. For
       example, if a plan with a normal retirement age of 65 provides a benefit of $400 a
       month payable at age 65[,] the same $400 benefit (with no upward adjustment)
       could be paid to an employee who retires at age 68.

Treas. Reg. § 1.411(c)-1(f)(2).



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Case No. 10-6131
Canada v. Am. Airlines, Inc. Pilot Ret. Benefit Program, et al.

       That federal law permits the suspension of benefits without actuarial adjustments during

periods of continued qualifying employment tells only half the story. To fully comply with

ERISA, retirement plans must actually “provide” that payments will be suspended, and plans

must provide for the suspension before plan participants accrue the benefits at issue.

29 U.S.C. § 1053(a)(3)(B); see Cent. Laborers’ Pension Fund v. Heinz, 

, 745–46,

750 n.5 (2004). Ultimately, this case boils down to a straight-forward contract dispute. We must

determine whether American, as plan administrator, interpreted the Plan in an arbitrary and

capricious manner when it concluded that (1) the Plan provided for the suspension of benefits for

pilots who continue flying after reaching age sixty and (2) the Plan provided for this suspension

before Canada began accruing benefits in 1989.

                                          II. ANALYSIS

       In support of its judgment in favor of American, the district court issued a well-reasoned

and thorough opinion that examined the relevant Plan documents and traced their evolution from

the 1976 Plan Restatement, which was in effect when Canada began accruing benefits, to the

most recent 2009 Plan Restatement. See Canada v. Am. Airlines, Inc. Pilot Ret. Program,

No. 3:09-0127, 

(M.D. Tenn. Aug. 10, 2010). The court concluded that

because the Plan always prohibited participants from receiving pension benefits while actively

employed at American, the Plan provided for the “suspension” of retirement benefits during

Section 203(a)(3)(B) service, even if the Plan did not label its late-retirement provisions in so

many words. 

Accordingly, the district court granted summary judgment to American

and the Plan on all claims. 

Having reviewed the record and arguments made by the

parties, we conclude that we could add little to disposition of this matter and adopt the analysis

and conclusions of the district court, with the following points of clarification.


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Case No. 10-6131
Canada v. Am. Airlines, Inc. Pilot Ret. Benefit Program, et al.

A. Standard of Review

       Because the administrator of the ERISA plan in this case has been granted discretionary

authority to determine eligibility for benefits and to construe the terms of the Plan, the district

court correctly applied the highly deferential arbitrary-and-capricious standard of review.

Kovach v. Zurich Am. Ins. Co., 

, 328 (6th Cir. 2009) (citing Firestone Tire &

Rubber Co. v. Bruch, 

, 115 (1989)). Moreover, although American both funds the

Plan and determines Plan eligibility, the district court properly factored the airline’s dual role and

inherent conflict of interest into its application of the arbitrary-and-capricious standard rather

than imposing a heightened standard of review altogether.          Metro. Life Ins. Co. v. Glenn,

, 115–19 (2008) (adhering to the arbitrary-and-capricious standard of review while

eschewing “de novo review” or “special burden-of-proof rules” for ERISA conflict-of-interest

cases); Cox v. Standard Ins. Co., 

, 299 (6th Cir. 2009) (same). We typically review

de novo the district court’s disposition of an ERISA action, applying the same legal standard as

the district court, based only on the administrative record available at the time the plan

administrator rendered a final decision. 

(citing Wilkins v. Baptist

Healthcare Sys., Inc., 

, 617–19 (6th Cir. 1998)).

       Canada goes to great lengths to suggest that American’s defense, which relies upon the

Plan’s late-retirement provisions, is nothing more than a post-hoc litigation rationale that we

should view skeptically, or as fatal, to American’s decision to suspend his benefits. Ordinarily,

we might agree and look more suspiciously upon the decision of a plan administrator who offers

one justification to a claimant for a suspension of benefits, only to turn around and offer a

different justification to a reviewing court. See, e.g., Univ. Hospitals of Cleveland v. Emerson

Elec. Co., 

, 848 n.7 (6th Cir. 2000). But this is no ordinary case.


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Case No. 10-6131
Canada v. Am. Airlines, Inc. Pilot Ret. Benefit Program, et al.

         Here, Canada short-circuited the normal benefits-review process by proceeding directly

to federal court. He did not present his individual claims to the Pension Benefit Administration

Committee, the Plan’s named fiduciary for deciding benefits appeals. Although the district court

excused Canada’s failure to exhaust the Plan’s administrative remedies on the grounds of futility,

we cannot punish American for relying on a “new” defense that the airline may well have raised

in the course of an ordinary administrative appeal if Canada had been required to exhaust.

Moreover, the Supreme Court recently held that reviewing courts must afford deference to the

discretionary acts of plan administrators not only in their “first efforts to construe the Plan,” but

also in their second efforts, so long as those efforts are not taken in bad faith. See Conkright v.

Frommert, 

, 513–514 (2010) (rejecting a “one-strike-and-you’re-out” approach to

ERISA plan-administrator deference). Finally, even if we were to agree with Canada and review

American’s Plan interpretation with “exacting scrutiny,” we would reach the same conclusion as

the district court and reject his claims for an actuarial adjustment. Canada simply has not shown

that American’s Plan interpretation was wrong, even under a de novo standard of review.

B. Framework for ERISA Cases

         The district court referred to the traditional summary-judgment framework in evaluating

Canada’s claims. See Canada, 

, at *7. As we explained in Wilkins v. Baptist

Healthcare Systems, Inc., traditional summary-judgment concepts generally play no role in the

adjudication of an ERISA action for benefits brought under 29 U.S.C. § 1132(a)(1)(B) because

the district court is limited to the evidence before the plan administrator at the time of its

decision (i.e., the administrative 

–19 (Gilman, J., concurring).1 As we

observed above, however, this is no ordinary ERISA action.
1
  In Wilkins, Judge Gilman delivered a separate opinion, in which Judge Ryan concurred, which constitutes the
opinion of the court with respect to this issue. See 

. All citations to Wilkins in Section II.B.
of this opinion refer exclusively to Judge Gilman’s controlling opinion therein.

                                                         -5-
Case No. 10-6131
Canada v. Am. Airlines, Inc. Pilot Ret. Benefit Program, et al.

       First, as we noted, Canada did not pursue an administrative appeal—an approach that the

Plan both permitted and encouraged. Thus, there was no true “administrative record” to which

the district court’s review was confined. Second, there is an exception to the rule against

receiving new evidence at the district-court level “when consideration of that evidence is

necessary to resolve an ERISA claimant’s procedural challenge to the administrator’s decision,

such as an alleged lack of due process afforded by the administrator or alleged bias on its part.”

(emphasis added).      Canada has alleged plan-administrator bias throughout these

proceedings. Under these circumstances, and considering that the parties presented their briefing

to the district court in the form of cross-motions for summary judgment, we find no error in the

district court’s reliance on the summary-judgment framework to guide its analysis.

C. Mixed Claims for a Determination of Benefits and Breach of Fiduciary Duty

       Canada filed suit under 29 U.S.C. § 1132(a)(1)(B) to clarify his rights to future benefits

under the terms of the Plan and under § 1132(a)(2) to correct an alleged breach of fiduciary duty.

Although Canada’s original complaint included a separate breach-of-fiduciary-duty claim under

the catch-all remedial provision of § 1132(a)(3), the district court dismissed that count as

duplicative of his claim under § 1132(a)(1)(B) for a clarification of his rights to future benefits.

See Varity Corp. v. Howe, 

, 515 (1996); 

–16.

       Thus, Canada’s amended complaint presents two claims: (1) a clarification-of-benefits

claim under § 1132(a)(1)(B), with any benefit inuring to Canada himself; and (2) a breach-of-

fiduciary-duty claim under § 1132(a)(2), with any benefit inuring to the Plan and to Canada.

Canada’s breach-of-fiduciary-duty claim is premised, in part, on the charge that American

interpreted the Plan language solely out of self-interest, to the detriment of the Plan, and in a

manner that deprives Canada and other pilots of benefits to which they are legally entitled.


                                               -6-
Case No. 10-6131
Canada v. Am. Airlines, Inc. Pilot Ret. Benefit Program, et al.

Without expressing any opinion on the support for Canada’s breach-of-fiduciary-duty claim on

behalf of the Plan, as distinct from the breach-of-fiduciary-duty claim on his own behalf, we

affirm the district court’s determination that Canada failed to show a cognizable breach of

fiduciary duty.

D. The Impact of American’s Summary Plan Descriptions

       Finally, we note that one of the rationales underlying the district court’s opinion denying

Canada’s claim for benefits has only grown stronger since originally issued. This is because an

intervening decision from the Supreme Court significantly undercuts Canada’s repeated reliance

on a series of summary plan descriptions (“SPDs”) that American furnished to its pilots.

       In CIGNA Corp. v. Amara, 

(2011), the Supreme Court considered

whether SPDs constitute legally binding terms of an ERISA plan. 

The Court

concluded that while SPDs provide “clear, simple communication” to beneficiaries about the

plan, their statements are not legally binding plan terms themselves. 

holding, the Court

noted that “[t]o make the language of a plan summary legally binding could well lead plan

administrators to sacrifice simplicity and comprehensibility in order to describe plan terms in the

language of lawyers.”     

   Thus, when a plan beneficiary brings suit under

29 U.S.C. § 1132(a)(1)(B) to clarify his rights to future benefits “under the plan,” as Canada did

here, he may not rely on the contents of SPDs to circumscribe or nullify the plain terms of the

plan itself. Id.; see Engleson v. Unum Life Ins. Co. of Am., 

, 620 (6th Cir. 2013)

(“Since Amara, we have observed that SPDs are not legally binding, nor parts of the benefit

plans themselves.” (internal quotation marks omitted)).




                                               -7-
Case No. 10-6131
Canada v. Am. Airlines, Inc. Pilot Ret. Benefit Program, et al.

       Although the district court determined that Canada’s reliance on the SPDs was

unpersuasive in the first instance, Amara makes clear that the court was not even required to

consider Canada’s arguments in light of the Plan’s otherwise unambiguous late-retirement

provisions. Amara thus further bolsters our adoption of the district court’s already well-reasoned

opinion.

                                       III. CONCLUSION

       Accordingly, with the foregoing clarifications, we affirm judgment in favor of American

and the Plan on the basis of the district court’s opinion.




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