FOURTH ISSUES ERISA, CRIMINAL RULINGS

The Fourth Circuit hands down two new published opinions today, November 28. In one, the court reverses a district court’s finding in an ERISA case, thus reinstating the plan’s determination of the benefits to be paid to an employee who had been laid off. The case is Colucci v. Agfa Corp .

With the exception of one three-month stretch, Colucci worked for Agfa for nineteen years, from 1983 to 2002, when he was terminated for economic reasons. (During one period in 2000, he had worked for Kodak, but left that position after only three months to return to Agfa.) He claimed benefits based on his nineteen-year tenure, but the plan administrator calculated his employment beginning with the date of his rehire, and calculated a far smaller benefit accordingly. In the district court, Colucci persuaded the judge to overturn the plan’s determination, on the basis that the plan’s language was unambiguous and allowed benefits to be calculated from Colucci’s “first day of employment.” Finding that one’s first day of employment is not altered by a temporary absence, the district court ruled in favor of Colucci and enhanced his benefits.

Today, the Fourth Circuit reverses, finding that the language of the plan is “at a minimum, ambiguous,” and requires the district court to defer to the administrator’s interpretation of it. The appellate court returns to the original determination and finds that it was within the plan’s discretion to determine that Colucci’s “first day of employment” refers to the date of his rehire in this context. Colucci had, perhaps improvidently, declined to address the plan’s arguments on the reasonableness of this finding, preferring to put all his eggs into what proved to be a losing basket.

The court also declines to find a conflict of interest where Agfa employees serve on the plan’s board, and its attorney, who advised the board in the original hearing, represented it in the trial court and on appeal. The Fourth Circuit finds no reason from this set of circumstances to determine that a conflict of interest exists. In doing so, it distinguishes the fact pattern here from that presented in Doe v. Group Hospitalization, 3 F.3d 80 (4th Cir. 1993). In Doe, the administrator was Blue Cross, which was thus put into the position of making decisions that directly affected its own bottom line. Here, Agfa had the right to end the plan completely if it wanted to; it was therefore not in the same position as the insurer in Doe.

The other case decided today is US v. Gilbert , in which Gilbert had been convicted of possession of firearms after having been convicted of a felony. He argued that his possession of the weapons was “both transitory and without illicit purpose”; the court calls this argument a theory of “innocent possession.”

When officers approached Gilbert on the Tenth Street Bridge in Roanoke, they found him carrying a bundle and a backpack that appeared to have the stock of a firearm sticking out of it. When they opened up the packs, they found two shotguns, a .22 gauge rifle, an air rifle, ammunition, eight knives, and for good measure, a set of brass knuckles. Gilbert readily admitted to being a convicted felon, but claimed that he had just happened upon the packs a few minutes earlier, and was planning to take them to, get this, the police station to claim a reward of $50 per gun that he had heard was offered. He had a convoluted story for why he was headed away from the police station when the officers met him.

If you think that’s a preposterous explanation, think again; the trial judge stated in the record that he believed the Gilbert was sincere when he reported having found the weapons, and when he stated that he was going to turn them in. But Gilbert was convicted anyway, as the trial court found that the claimed “innocent possession” was not a defense. The district court even stated, “. . . if the Fourth Circuit . . . adopted the innocent possession defense, then I would have found him not guilty.”

Bad news arrives today for Gilbert; the Fourth Circuit does not adopt the innocent possession defense. It notes that only three elements are required to establish this offense: Knowing possession, an effect on interstate commerce (at any time during the weapon’s existence), and a felony record. This case had all three. The court notes that to create such an exception would rewrite the statute, which currently excludes any consideration of the felon’s intention in possessing weapons. The Fourth thus joins the Seventh and Tenth Circuits in rejecting this defense to this charge (the D.C. Circuit has recognized it).

But the court doesn’t stop there; it goes on to show that even if the D.C. Circuit’s approach were applied, Gilbert still wouldn’t qualify for it. The court notes (as you no doubt already have) that if Gilbert really had just wanted to claim a reward, he could have left the weapons in their previously concealed location, or else picked them up and headed straight for the station. That he did neither undercut his claim to genuinely “innocent” possession. His conviction and his unspecified sentence are affirmed.