Plan Board of Sunkist Retirement Plan v. Harding & Leggett, Inc.

This disposition is not appropriate for publication and is not precedent*
except as provided by 9th Cir. R. 36-3.
The Honorable James P. Jones, United States District Judge for the**
Western District of Virginia, sitting by designation.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PLAN BOARD OF SUNKIST
RETIREMENT PLAN,
Plaintiff-Counter-Defendant -
Appellee,
v.
HARDING & LEGGETT, INC.,
Defendant-Counter-Claimant
-Appellant.
No. 10-55745
D.C. No. CV-05-8659-AG(RCx)
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Andrew J. Guilford, District Judge, Presiding
Argued and submitted December 9, 2011
Pasadena, California
Before: PREGERSON and PAEZ, Circuit Judges, and JONES, District Judge.**
FILED
DEC 23 2011
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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Defendant-Appellant Harding & Leggett, Inc. (“H&L”) appeals the judgment
of the district court. The court found in favor of Plaintiff-Appellee Plan Board of
Sunkist Retirement Plan (the “Plan Board”) in regard to H&L’s liability as a result of
its withdrawal from a multiple-employer pension plan. H&L argues that the Plan
Board abused its discretion in calculating the withdrawal liability amount. H&L
principally argues that the interest rate assumption utilized to calculate its withdrawal
liability was unreasonably low and selected for the purpose of exaggerating its
liability. In related arguments, H&L contends that the Plan Board improperly
included a job elimination benefit in its calculation, as well as missing and deceased
participants. We review the district court’s judgment for clear error, and we affirm.
The interest rate assumption used to calculate H&L’s withdrawal liability was
not unreasonably low. The record supports the district court’s finding that in this case,
the combination of the Pension Benefit Guaranty Corporation’s (“PBGC”) interest
rate assumptions with its mortality rate assumptions approximates insurance annuity
market pricing. The district court therefore did not err in upholding the Plan Board’s
chosen interest rate assumptions.
Furthermore, we do not accept H&L’s argument that the Plan Board improperly
included the job elimination benefit in its calculation. Testimony at trial established
that the omission of the job elimination benefit was simply a clerical error, and that
the benefit was received by at least one H&L employee during the time the language

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was missing from the Plan document. Thus, the district court’s factual finding that
the benefit was added to the Plan through an amendment in 1997 and was included in
the Plan at the time of H&L’s withdrawal was not clearly erroneous.
Similarly, the Plan Board did not improperly include missing and deceased
participants in its calculation. The regulations issued under ERISA require that, “[i]n
the absence of proof of death, individuals not located are presumed living.” 29 C.F.R.
§ 4050.2 (definition of “missing participant”). This refutes H&L’s assertion that
certain missing participants should be presumed dead. Moreover, the Plan Board
regularly conducted mortality audits and utilized a commercial locator service to
search for missing participants as required by 29 C.F.R. § 4050.4(b)(3). Accordingly,
the district court did not err in concluding that the Plan Board did not abuse its
discretion in calculating H&L’s withdrawal liability.
AFFIRMED.

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