United States District Court, D. Idaho
DONNIE ELY, a Participant in the PACE Industry Union-Management Pension Fund, Plaintiff,
BOARD OF TRUSTEES OF THE PACE INDUSTRY UNION-MANAGEMENT PENSION FUND, Defendant.
MEMORANDUM DECISION AND ORDER
Honorable Candy W. Dale, United States Magistrate Judge.
the Court is Plaintiff Donnie Ely's motion to compel
production of documents, filed on October 21, 2019. (Dkt.
68.) Ely seeks to compel responses to Request Nos. 13, 14,
and 15, which documents the Board of Trustees has withheld
based on a claim of attorney-client privilege. Ely argues
assertion of the attorney-client privilege is not
appropriate, and also that the privilege log is inadequate
because the descriptions of the documents withheld and
explanations for redactions do not provide sufficient
information to enable him to evaluate whether a privilege or
protection from disclosure exists. Ely requests relief in the
alternative, asking the Court to either: (1) order the Board
of Trustees to produce documents responsive to the requests;
(2) order the Board of Trustees to amend its privilege log;
or (3) order the Board of Trustees to submit all materials to
which a privilege is claimed to the Court for an in camera
Court has carefully considered the parties' arguments and
cited authorities, and will grant the motion in part, as
seeks to compel responses to Document Request Nos. 13, 14,
and 15, which ask for the following documents:
• Document Request No. 13: ALL COMMUNICATIONS OR
DOCUMENTS between the TRUSTEES AND its attorneys CONCERNING
the REHABILITATION PLAN OR the AMENDED REHABILITATION PLAN.
• Document Request No. 14: To the extent not already
produced in response to other requests, all COMMUNICATIONS OR
DOCUMENTS received by the TRUSTEES CONCERNING the
REHABILITATION PLAN OR the AMENDED REHABILITATION PLAN.
• Document Request No. 15: All COMMUNICATIONS OR
DOCUMENTS between the TRUSTEES AND the FUND actuary
CONCERNING the REHABILITATION PLAN OR the AMENDED
Board of Trustees contends that communications involving Fund
counsel regarding adoption of and amendment to the
Rehabilitation Plan are protected from disclosure by the
attorney-client privilege, because the Board of Trustees was
performing a settlor function when it initially adopted and
later amended the Rehabilitation Plan. Ely argues the
communications are not protected from disclosure, because the
advice was prepared for the benefit of the Plan's
beneficiaries, not for the trustees exclusively, and
therefore the fiduciary exception to the attorney-client
Pension Protection Act of 2006 (“PPA”) was
enacted to address problems associated with underfunded
pension plans and introduced “a number of mechanisms
aimed at stabilizing pension plans and ensuring they remain
solvent.” Trustees of Local 138 Pension Trust Fund
v. F.W. Honerkamp Co., 692 F.3d 127, 130 (2nd Cir.
2012). Among the PPA's provisions are “measures
designed to protect and restore multiemployer pension plans
in danger of being unable to meet their pension distribution
obligations in the near future.” Id. Funds
designated as being in “critical status” require
the plan sponsor to adopt a rehabilitation plan. 29 U.S.C.
§ 1085(e)(1), ERISA § 305(e)(1).
case of a plan in critical status, see 29 U.S.C.
§ 1085(b)(2), ERISA § 305(b)(2), the Plan Sponsor
must adopt a rehabilitation plan which imposes revised
benefit structures, revised contribution structures, or both
which “may reasonably be expected” to enable the
plan to emerge from critical status in accordance with the
rehabilitation plan. 29 U.S.C. § 1085(e)(1)(B)(i), ERISA
§ 305(e)(1)(B)(i). If the Plan Sponsor determines that,
“based on reasonable actuarial assumptions and upon
exhaustion of all reasonable measures, the plan cannot
reasonably be expected to emerge from critical status”
by the end of the ten-year rehabilitation period, the Plan
Sponsor must adopt “reasonable measures” that
would allow the plan “to emerge from critical status at
a later time or to forestall possible
insolvency….” 29 U.S.C. §
1085(e)(3)(A)(ii), ERISA § 305(e)(3)(A)(ii). Stated
differently, the Plan Sponsor is required to act reasonably,
and choose from various options those that will either
restore the plan's financial health within a specified
period of time, or delay eventual insolvency.
was designed to: (1) impose tougher funding rules upon
employers to ensure the money workers earned for retirement
would be there, as promised by their employer; (2) prevent
plan terminations and bankruptcies; and (3) shore up the
finances of the Pension Benefit Guarantee Corporation so as
to avoid a taxpayer bailout of the agency. 152 Cong. Rec.
S8747-01, 152 Cong. Rec. S8747-01, S8747, 2006 WL 2224796.
The overriding purpose of the PPA was to ensure
“promises made to workers for their retirement will be
promises kept by assuring the money needed is in the fund and
by appropriately limiting when benefits may be increased,
freezing future accruals, and restricting the rapid out-flow
of lump sums and shutdown benefits when the plan gets into
serious trouble.” 152 Cong. Rec. S8747-01, 152 Cong.
Rec. S8747-01, S8747, 2006 WL 2224796.
the PPA's drafters recognized that some multiemployer
plans will not avoid collapse but, at the very least, the
statutory changes effected by the PPA “will
postpone” the possible collapse of some of those plans.
152 Cong. Rec. S8747-01, 152 Cong. Rec. S8747-01, S8749, 2006
WL 2224796; see also 29 U.S.C. §
1085(e)(3)(A)(ii), ERISA § 305(e)(3)(A)(ii) (defining a
rehabilitation plan as one that consists of “reasonable
measures to emerge from critical status at a later time or to
forestall possible insolvency (within the meaning of section
4245).”). The PPA was enacted for the benefit of
workers, to “strengthen the financial health of pension
plans by doing as much as we can to guarantee that funds will
be there to pay for employees hard-earned retirement
benefits.” 152 Cong. Rec. S8747-01, 152 Cong. Rec.
S8747-01, S8754, 2006 WL ...