484 F.3d 644 (3rd Cir. 2007), 05-5461, Eichorn v. AT&T Corp.

Docket Nº:05-5461.
Citation:484 F.3d 644
Party Name:Kurt H. EICHORN; William J. Huckins; T. Roger Kiang; Edward W. Landis; Orlando Napolitano, Individually and on Behalf of all others Similarly Situated; Gilbert G. Daley; Susan H. Dibona; Beth King; Michael S. Oratowski; Thomas L. Salisbury; Lawrence Walsh, Individually and on Behalf of all Others Similarly Situated; William Lawless; Russell Leppala
Case Date:May 02, 2007
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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484 F.3d 644 (3rd Cir. 2007)

Kurt H. EICHORN; William J. Huckins; T. Roger Kiang; Edward W. Landis; Orlando Napolitano, Individually and on Behalf of all others Similarly Situated; Gilbert G. Daley; Susan H. Dibona; Beth King; Michael S. Oratowski; Thomas L. Salisbury; Lawrence Walsh, Individually and on Behalf of all Others Similarly Situated; William Lawless; Russell Leppala; Gabe P. Torok; Judith B. Brugner; Kate Harris; Carole T. Johnson; Charles O. Laughlin, II; Michael A. McFarland; Barbara Oliver; Gary Patterson; Robert Prouix; William J. Schrott; Robert Michael Shepherd; Ronals A. Sokol; Joseph T. Szlasa; Diane F. Taylor; Lorraine J. Welch; Marie Zeits, Appellants


AT&T CORP.; Lucent Technologies Inc.; Texas Pacific Group; NCR Corporation; The CIT Group, Inc.; John Doe Corporations 1-10.

No. 05-5461.

United States Court of Appeals, Third Circuit.

May 2, 2007

Submitted Under Third Circuit LAR 34.1(a) March 27, 2007.

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[Copyrighted Material Omitted]

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Noel C. Crowley, Crowley & Crowley, Morristown, NJ, Counsel for Appellants.

Carmine A. Iannaccone, James P. Flynn, Lauren D. Daloisio, Epstein, Becker & Green, Newark, NJ, Counsel for Appellees AT&T Corp., Lucent Technologies, Inc. and NCR Corp.

David M. Fabian, Christine M. Gurry, Traflet & Fabian, Morristown, NJ, Counsel for Appellee, TX PAC Group.

Robert M. Leonard, Drinker, Biddle & Reath, Florham Park, NJ, Counsel for Appellee, CIT Group, Inc.

Before: FISHER, JORDAN and ROTH, Circuit Judges.


JORDAN, Circuit Judge.

This case is before us for the second time on appeal. In the previous appeal, Eichorn v. AT&T Corp., 248 F.3d 131 (3d Cir.), cert. denied, 534 U.S. 1014, 122 S.Ct. 506, 151 L.Ed.2d 415 (2001), we held that the plaintiffs had presented sufficient evidence of the defendants' specific intent to interfere with their pension rights to survive summary judgment on their claims under § 510 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1140. Id. at 150. We reversed the District Court's order granting summary judgment to the defendants and remanded for further proceedings. Id. After nearly three years of additional proceedings on remand, the District Court again granted summary judgment to the defendants, holding that the relief the plaintiffs sought was not available to them. The plaintiffs appeal from that order and challenge several of the District Court's interlocutory orders. We will affirm.


We have previously set forth the basic facts in this litigation, Eichorn, 248 F.3d at 136-37, and we recite only the facts relevant to the present decision.


The plaintiffs are former employees of Paradyne Corporation ("Paradyne"). In 1995, Paradyne was part of AT&T Corp. ("AT&T"). AT&T reorganized that year, splitting into three parts: AT&T, Lucent Technologies, Inc. ("Lucent"), and NCR Corporation. In the course of the reorganization, AT&T transferred Paradyne to Lucent. In 1996, Lucent sold Paradyne to a business called Texas Pacific Group ("Texas Pacific"). Before that sale, the plaintiffs in this case had pension plans

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that included certain "bridging rights." If an employee left Lucent or another of the former AT&T companies and returned within six months, either to the company the employee had left or to another of the former AT&T companies, the employee could "bridge" the two terms of employment, receive pension credit for all prior service, and continue to accrue pension benefits as if he had never left. If the employee left and did not return until after the six-month "bridging period" had expired, the employee would need to work for an additional five years to regain his previous level of pension benefits.

The alleged basis for the plaintiffs' ERISA claims is that the defendants entered into agreements as part of the sale of Paradyne that had the effect of canceling the plaintiffs' bridging rights. In 1995, when Paradyne was part of AT&T, AT&T announced its intent to sell Paradyne. Recognizing the value of Paradyne's work force, and wanting to make Paradyne more attractive to potential buyers, AT&T announced a policy precluding any employee who voluntarily left Paradyne from being hired by any other division of AT&T. On June 18, 1996, Lucent and Texas Pacific signed a purchase agreement for the sale of Paradyne, and on July 31, 1996, the sale closed. The June 18 purchase agreement included a provision--referred to in this litigation as the "Pre Closing Net"--whereby Lucent promised that neither it nor any of the other former AT&T companies would hire any Paradyne employees who left Paradyne voluntarily before the sale closed and whose annual salaries were more than $50,000. On the date of the closing, Lucent signed an "employee matters agreement," which included a paragraph--referred to in this litigation as the "Post Closing Net"--extending the provisions of the Pre Closing Net for 245 days (eight months) after the closing.

Once the sale closed, the Paradyne employees' employment with Lucent terminated, and the "bridging period" began. Because the no-hire agreement embodied in the Pre Closing Net and Post Closing Net lasted for eight months, the Paradyne employees who made more than $50,000 annually were prevented from exercising their bridging rights. 1


Near the time of the Paradyne sale, Kurt Eichorn and Gilbert Daley filed substantially identical class action complaints in the United States District Court for the District of New Jersey, naming AT&T, Lucent, and Texas Pacific as defendants, and asserting, inter alia, that the Pre Closing Net and Post Closing Net violated § 510 of ERISA. The actions were consolidated and, after discovery, the District Court granted the defendants' motion for summary judgment, holding that the plaintiffs had not put forth sufficient evidence to create a triable issue of fact as to whether the defendants had the required intent to interfere with the plaintiffs' bridging rights. Eichorn v. AT&T Corp., No. 96-3587, 1999 WL 33471890, at **2-6 (D.N.J. Aug. 23, 1999). On appeal, this court reversed and remanded that holding because we determined that the plaintiffs had presented sufficient circumstantial evidence to create a genuine issue of material fact regarding the defendants' intent. Eichorn, 248 F.3d at 149-50. The panel also directed the District Court on remand to address the plaintiffs' motions for additional discovery and for class certification. Id. at 150.

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On remand, the District Court reopened discovery and allowed the plaintiffs to file a motion for class certification. The parties appear to have proceeded after remand on the assumption that the plaintiffs would be entitled to some form of compensatory damages if they succeeded in proving their ERISA claims. On May 27, 2003, over three months after the close of reopened discovery and some seven years from the start of the case, the plaintiffs submitted spreadsheets to the District Court, offering their damage calculations for the first time. The spreadsheets were prepared by plaintiffs' counsel's son, Stephen Crowley, who was not offered as an expert and has no training or experience with the economics of employment benefits.

Mr. Crowley's calculations purported to quantify what each plaintiff would have earned in pension benefits, had he or she remained employed at an AT&T company after the sale of Paradyne. In performing the calculations, Mr. Crowley made various assumptions about such future events as when the plaintiffs would have retired, how their salaries would have increased had Paradyne remained part of Lucent, what choices the plaintiffs would have made with respect to their pension benefits, and what each plaintiff's life expectancy was. With his calculations, Mr. Crowley submitted a life expectancy chart from the "Foundation for Infinite Survival" and various statistical tables from the United States Department of Labor which, he asserted, provided part of the basis for his calculations.

The District Court accepted the plaintiffs' belated submissions and reopened discovery again to allow the defendants to depose Mr. Crowley. After deposing Mr. Crowley, the defendants made a motion to strike his calculations and to preclude him from testifying at trial. The plaintiffs opposed the motion and argued that, if the District Court were to grant the defendants' motion, the plaintiffs should be allowed to engage a damages expert. On November 10, 2004, the District Court granted the defendants' motion and denied as untimely the plaintiffs' request for leave to engage an expert.

In the course of making his initial ruling from the bench, which was later reduced to a written order, the District Judge explained that he did not believe his order would effectively end the case for the plaintiffs, because the plaintiffs might still be entitled to seek back pay and would not need the assistance of an expert to establish their entitlement to that relief. The Judge said,

at a minimum, it would appear that a back pay case can in some manner or other go to the jury. Indeed, in this type of ERISA claim, a back pay claim is normally one of the court claims which go. In short, the theory of the case is that the plaintiffs were precluded from employment because of and based upon a desire to deny them ... rights which they have under ERISA....

And therefore, in the Court's view, what could and would go to the jury would indeed be claims predicated upon the denial of their employment and potential back pay claims.

Further, the District Judge noted that the plaintiffs sought injunctive relief, and the Judge agreed that there was "at least a possibility" that such relief was available. Even so, he did not definitively rule...

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