863 F.2d 279 (3rd Cir. 1988), 88-1347, Hlinka v. Bethlehem Steel Corp.
|Citation:||863 F.2d 279|
|Party Name:||Joseph W. HLINKA, Appellant, v. BETHLEHEM STEEL CORPORATION and General Pension Board of the Bethlehem Steel Corporation and Subsidiary Companies, and M.P. Dopera, Plan Administrator, Appellees.|
|Case Date:||December 08, 1988|
|Court:||United States Courts of Appeals, Court of Appeals for the Third Circuit|
Argued Oct. 31, 1988.
Rehearing and Rehearing In Banc Denied Jan. 9, 1989.
Dona S. Kahn (argued), Alison Pease, Harris and Kahn, Philadelphia, Pa., for appellees.
Harry A. Dower (argued), Dower & Co., P.C., Allentown, Pa., for appellant.
Before GIBBONS, Chief Judge, and BECKER and WEIS, Circuit Judges.
GIBBONS, Chief Judge.
Joseph W. Hlinka appeals from a summary judgment in favor of the defendants, Bethlehem Steel Corporation (BSC), the Bethlehem Pension Board, and the Bethlehem Plan Administrator in Hlinka's suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Sec. 1001 et seq. (1982). When reviewing grants of summary judgment, our scope of review is plenary. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). We will affirm.
Hlinka was hired by BSC on April 2, 1962. He is presently a salaried senior research fellow, and is a participant in the BSC pension plan. 1 In January 1986, after twenty-four years of continuous service with the company, fifty-six year old Hlinka applied for a 70/80 retirement pension. 2
The plan administrator determined that Hlinka was not entitled to a 70/80 retirement pension because he did "not satisfy the eligibility requirements of subparagraphs (a), (b), or (c) of paragraph 2.6 of the plan [and] with respect to paragraph 2.6(d), [the] employing company Bethlehem Steel Corporation, has not indicated that it considers [his] retirement to be in its interest...." Letter dated July 15, 1986. Hlinka was provided with a description of the review procedure and was invited to submit additional information he considered relevant to his case along with a request for review. On September 15, 1986, in a meeting that Hlinka was not permitted to attend, the pension board reviewed Hlinka's claim and upheld the plan administrator's decision that Hlinka was ineligible for a 70/80 retirement pension.
Hlinka then brought this action. He alleges violations of sections 403, 404, and 503 of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Secs. 1103, 1104, and 1133 (1982).
Hlinka contends that there are genuine issues of material fact which precluded the issuance of summary judgment in favor of the defendants. Summary judgment is merited when the moving party is entitled to a judgment as a matter of law because there is no genuine issue of material fact. Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir.1980). The Supreme Court in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986), defined a material fact as one which "might affect the outcome of the suit under governing law...." A determination of materiality is contingent upon the substantive law as it determines the factual disputes crucial to the establishment of the legal elements of the claim at issue. Id.
The first "factual dispute" identified by Hlinka is the district court's description of the 70/80 pension provision as an "early" retirement plan. The statutory language of ERISA and BSC's pension plan stipulate that the age of "normal retirement" is sixty-five. 3 Thus, allowance in the 70/80 provision for retirement at an earlier age legally creates an "early" retirement benefit. The fact that the plan does not expressly use the word "early" is not consequential.
Secondly, Hlinka challenges the district court's finding that BSC had only twice previously used the 70/80 retirement provision. He refers to his affidavit where in paragraph six he states: "I believe and therefore aver that hundreds of persons like me, eligible for a 70/80 Retirement, were granted such benefits and that the
situation of such persons was no different than mine." Additionally, paragraphs seventeen and eighteen contain statements that Hlinka "believe[s] and therefore aver[s]" that two high level officials are currently receiving pensions to which they are ineligible. This court in Maldonado v. Ramirez, 757 F.2d 48, 50 (3d Cir.1985), indicated that Federal Rule of Civil Procedure 56(e) requires that an affidavit in opposition to a motion for summary judgment must be based "on personal knowledge," must establish "such facts which would be admissible" and must "show affirmatively that the affiant is competent to testify in all matters stated therein." See also 6 J. Moore, W. Taggert & J. Wicker Moore's Federal Practice Sec. 56.22 (2d ed. 1985). The quoted assertions by Hlinka fail any of the criteria set forth in Rule 56(e).
Satisfaction of the first criteria fails because Hlinka did not establish that his affidavit was based on personal knowledge. He merely used the word "believe." Hlinka asserts that the word "believe" was needlessly and unfairly underscored because the defendants frustrated and impeded his discovery efforts. He maintains that under the circumstances all he could do was to aver what he believed to be correct.
In response to his interrogatories, Hlinka was provided with facts concerning 70/80 retirements of all non-represented salaried employees from 1983 through 1986. He requested information including the retirement circumstances of various individuals as well as the salaries of certain former and present employees. The defendants sought an order pursuant to Federal Rule of Civil Procedure 26(c) that the circumstances of retirement and salaries of these individuals be kept confidential. It was felt that disclosure of such information would be an invasion of privacy. The Supreme Court in Seattle Times Co. v. Rhinehart, 467 U.S. 20, 104 S.Ct. 2199, 81 L.Ed.2d 17 (1984), noted that:
It is clear from experience that pretrial discovery by depositions and interrogatories has a significant potential for abuse. This abuse is not limited to matters of delay and expense, discovery also may seriously implicate privacy interests of litigants and third parties. The Rules do not distinguish between public and private information. Nor do they apply only to parties to the litigation, as relevant information in the hands of third parties may be subject to discovery.
467 U.S. at 34-35, 104 S.Ct. at 2208-09. The district court in an order denying plaintiff's motion for reconsideration of the order of confidentiality found that the defendants had satisfied Rule 26(c) by demonstrating a "particular need for protection" from harm that was "significant, [and] not a mere trifle." 4 Cippolone v. Liggett Group, Inc., 785 F.2d 1108, 1122 (3d Cir.1986). Furthermore, the court in the same order stated that if Hlinka deemed the requested information vital to discovery he could move to have the information classified as nonconfidential. Hlinka did not so move.
Hlinka's affidavit also fails the second and third criteria of Rule 56(e). Hlinka never established that he was competent to testify about other employees' BSC pensions. Furthermore, many of the statements within the affidavit were hearsay and would be inadmissible unless they qualified as hearsay exceptions. Because the affidavit did not meet the requirements of
Rule 56(e), it may not be considered in deciding defendants' motion for summary judgment. Hlinka failed to identify any material disputed facts which could defeat the motion for summary judgment on other than legal grounds. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. at 2510-11 (citations omitted). Thus we turn our attention to the legal merits of the case.
Hlinka begins with the premise that paragraph 2.6(d) of the BSC plan is invalid as a matter of law because it violates section 403(c)(1) of ERISA, 29 U.S.C. Sec. 1103(c)(1) (1982). That paragraph allows employees who meet the age and service requirements, to retire under the 70/80 pension provision so long as the company deems such retirement to be in "its interest." Hlinka contends that paragraph 2.6(d) directly conflicts with the requirement that "the assets of a plan shall never inure to the benefit of any employer and shall be held for the exclusive purposes of providing benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of administering the plan." 29 U.S.C. Sec. 1103(c)(1) (1982).
The broad grant of discretion provided by paragraph 2.6(d) of BSC's plan is not prohibited by ERISA. 5 In Holliday v. Xerox Corp., 732 F.2d 548 (6th Cir.1984), cert. denied, 469 U.S. 917, 105 S.Ct. 294, 83 L.Ed.2d 229 (1985), the Sixth Circuit Court of Appeals rejected the argument that ERISA precludes all pension activity which inures to an employer's benefit. The court posited that ERISA was not intended to preclude employers from exercising their business and economic savvy for the interests of the pension plan as well as the interests of the employer. 6 The district court, citing Petrella v. NL Industries, Inc., 529 F.Supp. 1357, 1365 (D.N.J.1982), noted that Congress left employers much discretion in designing their plans, and thereby the ability to determine the benefits to be provided in the plans. The pension scheme as originally conceived by Congress and enforced by ERISA is essentially voluntary. ERISA nowhere mandates the institution of a pension program or the right to a pension. ERISA is not a direction to employers as to what benefits to grant their employees. Rather, ERISA is concerned with the administration of an established plan and its elements. Viggiano v. Shenango China Division of Anchor Hocking, 750 F.2d 276, 279 (3d Cir.1984) (emphasis added)....
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