OCTOBER TERM, 1994
CURTISS-WRIGHT CORP. v. SCHOONEJONGEN ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 93-1935. Argued January 17, 1995-Decided March 6,1995
Petitioner Curtiss-Wright Corp. amended its employee benefit plan to provide that the postretirement health care coverage it had maintained for many years would cease for retirees upon the termination of business operations in the facility from which they retired. In ruling for respondent retirees in their ensuing suit, the District Court found, among other things, that the new provision constituted an "amendment" to the plan; that the plan documents nowhere contained a valid "procedure for amending [the] plan, and for identifying the persons who have authority to amend the plan," as required by § 402(b)(3) of the Employee Retirement Income Security Act of 1974 (ERISA); and that the proper remedy for this violation was to declare the provision void ab initio. The Court of Appeals affirmed, holding that the standard reservation clause contained in Curtiss-Wright's plan constitution-which states that "[t]he Company reserves the right ... to modify or amend" the plan-is too vague to be an amendment procedure under § 402(b)(3).
1. Curtiss-Wright's reservation clause sets forth a valid amendment procedure. Pp. 78-86.
(a) The clause satisfies the plain text of § 402(b)(3)'s two requirements. Since ERISA's general definitions section makes quite clear that the term "person," wherever it appears in the statute, includes companies, the clause appears to satisfy § 402(b)(3)'s identification requirement by naming "[t]he Company" as "the perso[n]" with amendment authority. This outright identification necessarily indicates a procedure for identifying the person as well, since the plan, in effect, says that the procedure is to look always to the company rather than to any other party. The reservation clause also contains a "procedure for amending [the] plan." Section 402(b)(3) requires only that there be an amendment procedure, and its literal terms are indifferent to the procedure's level of detail. As commonly understood, a procedure is a "particular way" of doing something, and a plan that says in effect it may be amended only by "[t]he Company" adequately sets forth a particular way of making an amendment. Principles of corporate law provide a ready-made set of rules for deciding who has authority to act on behalf of the company. But to read § 402(b)(3) as requiring a plan to specifycralaw
on its face who has authority to act on the company's behalf might lead to the invalidation of myriad amendment procedures that no one would think violate the statute. Pp. 78-81.
(b) There is no support for respondents' argument that Congress intended amendment procedures to convey enough detail to serve beneficiaries' interest in knowing their plans' terms. Section 402(b)(3)'s primary purpose is to ensure that every plan has a workable amendment procedure, while ERISA's goal of enabling plan beneficiaries to learn their rights and obligations under the plan at any time is served by an elaborate scheme, detailed elsewhere in the statute, which specifies that a plan must be written, meet certain reporting and disclosure requirements, and be made available for inspection at the plan administrator's office. Pp.81-85.
2. On remand, the Court of Appeals must decide whether CurtissWright's valid amendment procedure was complied with in this case. The answer will depend on a fact-intensive inquiry, under applicable corporate law principles, into who at Curtiss-Wright had plan amendment authority and whether they approved the new provision. If the new provision was not properly authorized when issued, the question would arise whether any subsequent actions served to ratify it ex post. Pp.85-86.
18 F.3d 1034, reversed and remanded.
O'CONNOR, J., delivered the opinion for a unanimous Court.
Laurence Reich argued the cause for petitioner. With him on the briefs were Stephen F. Payerle and Aaron J. Carr.
Richard P. Bress argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Days, Deputy Solicitor General Kneedler, Allen H. Feldman, and Ellen L. Beard.
Thomas M. Kennedy argued the cause for respondents.
With him on the brief were Everett E. Lewis, Nicholas F. Lewis, Daniel Clifton, Ira Cure, and Shirley Fingerhood.*
*Briefs of amici curiae urging reversal were filed for the Chamber of Commerce of the United States by Hollis T. Hurd, Stephen A. Bokat, Robin S. Conrad, and Mona C. Zeiberg; for the ERISA Industry Committee et al. by Steven J. Sacher and Susan A. Cahoon; for the Manufacturers Alliance for Productivity and Innovation, Inc., by Peter Buscemi and Nealcralaw