Alexander v. Primerica Holdings, Inc.

• Decision Date: 29 November 1993
• Docket Number: No. 93-5433,93-5433
• Citation: 10 F.3d 155
• Parties: 17 Employee Benefits Cas. 1955 Judd ALEXANDER; and Richard Edwards, on behalf of themselves and as representatives of a class of persons similarly situated, Petitioners, v. PRIMERICA HOLDINGS, INC., formerly known as Primerica Corporation; The Board of Directors of Primerica Holdings, Inc.; James Dimon; Irwin Ettinger; John Fowler; John Doe 1-10 (being individual members of the Primerica Holdings, Inc. Board of Directors); ABC (being the administrator of the American Can Salaried Retirees Group Insurance Plan); and John Doe 15-25 (being the individual members of the board, group or committee functioning as the administrator of the American Can Salaried Retirees Group Insurance Plan), Respondents, Honorable Alfred J. Lechner, Jr., United States District Judge for the District of New Jersey, Nominal Respondent.
• Court: U.S. Court of Appeals — Third Circuit

Page 155

10 F.3d 155

17 Employee Benefits Cas. 1955

Judd ALEXANDER; and Richard Edwards, on behalf of

themselves and as representatives of a class of

persons similarly situated, Petitioners, v. PRIMERICA HOLDINGS, INC., formerly known as Primerica

Corporation; The Board of Directors of Primerica Holdings,

Inc.; James Dimon; Irwin Ettinger; John Fowler; John Doe

1-10 (being individual members of the Primerica Holdings,

Inc. Board of Directors); ABC (being the administrator of

the American Can Salaried Retirees Group Insurance Plan);

and John Doe 15-25 (being the individual members of the

board, group or committee functioning as the administrator

of the American Can Salaried Retirees Group Insurance Plan),

Respondents,

Honorable Alfred J. Lechner, Jr., United States District

Judge for the District of New Jersey, Nominal Respondent.

No. 93-5433.

United States Court of Appeals, Third Circuit.

Argued Oct. 28, 1993.

Decided Nov. 29, 1993.

Nicholas deB. Katzenbach (argued), Stuart Peim, Riker, Danzig, Scherer, Hyland & Perretti, Morristown, NJ, for petitioners.

Harvey Kurzweil (argued), Saul P. Morgenstern, Jacob S. Pultman, John J. Blood, Dewey Ballantine, Jonathan R. Morris, Richard M. Green, Primerica Corp., New York City, Donald A. Robinson, Robinson, St. John & Wayne, Newark, NJ, for respondents Primerica Holdings, Inc., James Dimon, Irwin Ettinger and John Fowler.

Before: ROTH, LEWIS, and GARTH, Circuit Judges.

OPINION OF THE COURT

GARTH, Circuit Judge.

This case has been before us on several occasions. Its appearance before us at this time requires us to review the record of prior proceedings to determine whether the district court judge who has been presiding over this case, through his actions and conduct, has given the appearance of partiality such that all proceedings in this case should henceforth be reassigned to another judge in the District of New Jersey.

Accordingly, the plaintiffs-petitioners, Judd Alexander and Richard Edwards (hereinafter, "petitioners"), on behalf of themselves and as representatives of a plaintiff class now in litigation in United States District Court for the District of New Jersey, seek a writ of mandamus ordering District Court Judge Alfred J. Lechner, Jr. to disqualify himself from hearing their case pursuant to 28 U.S.C. Sec. 455(a). ¹ While we do not hold that the petitioners have demonstrated that Judge Lechner has exhibited bias, we are persuaded that the record to date discloses that Judge Lechner's impartiality could be reasonably questioned such that Sec. 455(a) and our precedents ² require his disqualification and the reassignment of this case.

Because public confidence in the judicial system mandates, at a minimum, the appearance of neutrality and impartiality in the administration of justice, we will issue a writ of mandamus, in the exercise of our supervision over the district court, see Haines v. Liggett Group Inc., 975 F.2d 81, 97-98 (3d Cir.1992), directing: (1) no further proceedings in this case take place before Judge Lechner; and (2) that the Chief Judge order the Clerk of the District Court of the District of New Jersey to reassign this case to another district court judge.

I.

This case has been assigned to Judge Lechner since its inception as a class action in December 1989. By consent order filed May 13, 1991, the class was certified to include approximately 2500 retired salaried employees of American Can Company. The petitioners are seeking a declaratory action and enforcement of certain claimed rights to various welfare benefits which they receive from the American Can Salaried Retirees Group Insurance Plan.

The central issue in the case before Judge Lechner is whether American Can promised employees and retirees that their welfare benefits were irrevocable upon retirement and that retiree contribution amounts could not be unilaterally changed. The petitioners allege that Primerica Holdings, Inc., a successor in interest to American Can, the Board of Directors of Primerica, individual members of the board and the administrator of the Plan breached their contractual obligations and violated the provisions of the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Sec. 1001, by unilaterally modifying the Plan. Specifically, the petitioners contend that American Can Company made oral and written representations to them that lifetime life and medical insurance benefits would be provided upon retirement, and that medical insurance benefits would be irrevocable upon retirement and would be provided at nominal cost to retirees.

In support of their claims, the petitioners relied on Summary Plan Descriptions in ERISA booklets distributed by American Can to its employees and retirees. These Summary Plan Descriptions included the following clause:

The Company expects to continue this Plan indefinitely, but necessarily reserves the right to amend, modify, or discontinue the Plan in the future in conformity with applicable legislation. ³

The petitioners interpreted this clause to mean that American Can would only modify the Plan if it became necessary to conform the Plan with applicable legislation. Primerica argued that this clause gave American Can the right to amend or modify the Plan unilaterally. Neither side produced a formal Plan document to support its position.

On July 25, 1991, Judge Lechner granted summary judgment in favor of Primerica. Judge Lechner determined that the disputed summary plan description clause unambiguously reserved the company's right to reduce employee welfare benefits, and that the retirees' construction of this same clause as a promise of irreducible benefits was "unreasonable." Alexander v. Primerica Holdings, Inc., No. 89-5151 (D.N.J. July 25, 1991).

On appeal, we reversed. Alexander v. Primerica Holdings, Inc., 967 F.2d 90 (3d Cir.1992). We held that the Summary Plan Descriptions were, in fact, ambiguous, and stated

[b]ecause a plan document does not exist and because the summary plan descriptions are ambiguous, the district court, as the trier of fact, must determine whether the Plan provided lifetime benefits upon retirement. See Taylor v. Continental Group, 933 F.2d 1227, 1232 (3d Cir.1991) (interpretation of ambiguity is question of fact). In interpreting an ambiguous ERISA plan, a court may consider the intent of the plan's sponsor, the reasonable understanding of the beneficiaries, and past practice, among other things.

Id. at 96.

II.

The petitioners claim that Judge Lechner has prejudged their case because of "his pique at having been reversed" by this court, and because of his alleged animus towards their counsel, Gerald Liloia of Riker, Danzig, Scherer, Hyland & Perretti ("Riker, Danzig"). The record reveals the following events culminating with the filing of this petition for writ of mandamus:

After remand, Judge Lechner set a scheduling, status and settlement conference for September 22, 1992. In anticipation of that meeting, Primerica's counsel, Harvey Kurzweil of the Dewey Ballantine law firm, supplied petitioners' counsel with two documents designated Forms A and B (S.A. 160 and 161) which had been unearthed during Primerica's document search. The forms--purportedly signed by class members and allegedly acknowledging the company's right to increase the medical insurance contributions made by the retirees--were submitted to the district court at the September 22, 1992 conference. When questioned about the forms by Judge Lechner, petitioners' counsel Liloia apparently claimed that he did not understand what the forms meant. The district court judge then insisted that the proceedings be put on the record, and explained that:

Mr. Liloia wants to make a motion for my recusal. He can do so in a moment.

First, the reason we're on the record, we started to have a conference in a case entitled Alexander v. Primerica. I issued a summary judgment opinion, which was reversed by the circuit and we are now here discussing what will happen in the future procedures [sic] in this.

A document [Forms A and B] has been presented by Primerica which has some pretty significant language.

* * * * * *

Now, we were discussing that and I asked Mr. Liloia what his reaction was to that and he said he didn't know what it meant. I read that first sentence to him, the sentence indicating that the signatory of that document understands the charge for the coverage could be changed.

He said he did not understand it.

I indicated to Mr. Liloia that I would appreciate candor from him and that in the past I've had difficulty with him.

At that point, Mr. Liloia became very exercised and said he resented it. I, frankly, don't care what you resent, Mr. Liloia.

* * * The reason I said that before is because I've had experience with you where I relied on things you've told me on the record and you later recanted them. I published an opinion on that and it went to the Circuit where I was affirmed.

That, to your benefit, is Mutual Benefit v. Zimmerman, 787 Fed.Supp. 71, a 1992 case.

When attorney Liloia repeated for the record that he was considering asking the judge to recuse himself for bias against petitioners, Judge Lechner responded:

The correct term is whether I have a prejudice against you, I would have a prejudice against you. But the fact of the matter is I stand by that Mutual opinion where you lost in the Circuit. I relied on words you told me and you tried to recant those words at a subsequent motion.

* * * * * *

I have no bias in favor of the other side or prejudice against your clients. As far as you're concerned personally, I don't know, I don't think I've ever spoken with you socially. My only intercourse with you have [sic] been in open court on the record and on that one occasion where I cited, I could not rely on it. That is what I'm referring to.

In a subsequent proceeding, petitioners sought a preliminary injunction to enjoin Primerica from again modifying the retirement plan by...