Jones v. AT & T CO., Civ. A. No. 91-CV-6070.
| Citation | 798 F. Supp. 1137 |
| Decision Date | 20 March 1992 |
| Docket Number | Civ. A. No. 91-CV-6070. |
| Parties | R.C. JONES, John J. Birkmire, J.R. Blasch, H.J. Bollenbach, S.E. Campbell, A. Cartacki, L. Spearman-Coleman, J.P. DiDonato, J.E. Dougherty, C.J. Durnin, F.M. Eldridge, G.F. Gooch, G.F. Good, R. Herrmann, E.F. Kiely, M.M. Lamelza, P.D. McKay, R.J. Morrison, R.R. Muschert, F.G. Rupple, A. Sessoms, D.D. Slemmer, L.L. Stickler, R.L. Taylor, J.E. Vasas, D.T. White and F.T. Wojcik, Plaintiffs, v. AT & T COMPANY, AT & T Employees' Benefit Committee, J.R. Burlingame, Robert Allen, and D.P. Harrington, Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
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Ronald Wolf, Philadelphia, Pa., for the plaintiffs.
David Pittinsky, Philadelphia, Pa., for the defendants.
This is an action for injunctive and equitable relief under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiffs, twenty-seven (27) former management employees of the American Telephone and Telegraph Company ("AT & T") have filed a five-count complaint against the Defendants, AT & T, the AT & T Employees' Benefit Committee, and certain corporate personnel,1 seeking to recover severance benefits allegedly due them under the terms of the AT & T Transition Protection Payment Plan. Before us now is Defendants' Motion to Dismiss all counts of the complaint for lack of jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), and, in the alternative, for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), as well as Defendants' Motion to Strike Plaintiffs' demand for a jury trial and for punitive and delay damages.
At oral argument on February 6, 1992, in Easton, Pennsylvania, the parties agreed that there were no material facts in dispute, no further discovery would be required, and the question of whether Plaintiffs may recover under the terms of the AT & T Transition Protection Payment Plan should be decided by this Court as a matter of law. We agree. However, since the Defendants submitted the only copy of the AT & T Transition Protection Payment Plan to the court by way of attachment to their Motion to Dismiss, we will treat Defendants' Motion to Dismiss for failure to state a claim as one for summary judgment, in accordance with Fed.R.Civ.P. 12(b)(6) and the parties' Joint Stipulation of March 16, 1992.2
Fed.R.Civ.P. 12(b)(1) allows a court to dismiss a complaint for lack of subject matter jurisdiction, while Fed.R.Civ.P. 12(b)(6) allows a court to treat a motion to dismiss for failure to state a claim as one for summary judgment and to dismiss on the merits in accordance with the procedures of Fed.R.Civ.P. 65. Defendants base their motion on both grounds.
Fed.R.Civ.P. 12(b)(1) enables a defendant to "attack the substance of a complaint's jurisdictional allegations despite their formal sufficiency, and in so doing rely on affidavits or any other evidence properly before the court." St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir.), cert. denied, 493 U.S. 993, 110 S.Ct. 541, 107 L.Ed.2d 539 (1989). It is then up to the plaintiff to respond with facts3 supporting a finding of federal jurisdiction, and the burden of demonstrating jurisdiction is on the plaintiff. Id.; see also Kulick v. Pocono Downs Racing Ass'n, 816 F.2d 895, 898 (3d Cir.1987) ().
The court shall render summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is "genuine" only if there is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). A factual dispute is "material" only if it might affect the outcome of the suit under governing law. Id., 477 U.S. at 248, 106 S.Ct. at 2510. All inferences must be drawn and all doubts resolved in favor of the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Gans v. Mundy, 762 F.2d 338, 341 (3d Cir.1985), cert. denied, 474 U.S. 1010, 106 S.Ct. 537, 88 L.Ed.2d 467 (1985).
On motion for summary judgment, the moving party bears the initial burden of identifying for the court those portions of the record that it believes demonstrate the absence of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). To defeat summary judgment, the non-moving party must respond with facts of record that contradict the facts identified by the movant and may not rest on mere denials. Id. 477 U.S. at 321 n. 3, 106 S.Ct. at 2552 n. 3 (quoting Fed.R.Civ.P. 56(e)); see First Nat'l Bank of Pennsylvania v. Lincoln Nat'l Life Ins. Co., 824 F.2d 277, 282 (3d Cir.1987). The non-moving party must demonstrate the existence of evidence that would support a jury finding in its favor. See Anderson, 477 U.S. at 248-49, 106 S.Ct. at 2510-11.
The undisputed facts are as follows. On September 28, 1989, AT & T announced that its service center located at King of Prussia, Pennsylvania would be closed. On October 13, 1989, AT & T informed each of the Plaintiffs by letter that, unless otherwise notified, they would be terminated sometime between February 1, 1990 and October 1, 1990. The letters stated in relevant part:
Terminations under the permanent plant closing order for the King of Prussia service center will begin on February 1, 1990 and will be completed by October 1, 1990. Unless you are notified otherwise, your employment will be terminated during this time period. Your termination will be without expectation of recall.
(Complaint, Exhibit C (emphasis added)).
On October 19, 1989, AT & T announced that, effective that day, the AT & T Transition Protection Payment Plan had been terminated by action of the Board of Directors. This was after Plaintiffs had received the termination notices of October 13, 1989, but before Plaintiffs actual terminations took place. Prior to October 19, 1989, the AT & T Transition Protection Payment Plan had provided severance benefits, amounting to approximately one year's salary, to management personnel, like Plaintiffs, whose employment was terminated pursuant to the AT & T Force Management Guidelines. Also on October 19, 1989, AT & T announced enhancements to its management pension plan, effective December 30, 1989, and a one-time special retirement option available to all service pension eligible management employees who elected to retire on December 30, 1989.
On December 7, 1989, AT & T advised the Plaintiffs that they were not eligible for severance benefits4 under the AT & T Transition Protection Payment Plan, and therefore, could elect either to retire from AT & T on December 30, 1989 with entitlement to both the pension enhancements and the special retirement option or remain employed into 1990. Plaintiffs all chose to accept the one-time incentive payment and to retire on December 30, 1989 rather than face possible involuntary termination sometime after February 1, 1990.
Plaintiffs allege that they were participants in the AT & T Transition Protection Payment Plan, and that, by retroactively terminating the Plan while making separation payments to certain non-management employees, Defendants discriminated against the Plaintiffs, breached their fiduciary duties to Plaintiffs, wrongfully denied benefits due under the Plan, and withdrew accrued benefits in violation of ERISA, 29 U.S.C. §§ 1140, 1109, 1132(a)(1)(B), and 1054(g). (Counts I, II, III, and IV). Plaintiffs also claim that, Defendants should be estopped under the federal common law from denying severance benefits to Plaintiffs. (Count V).
Defendants have moved to dismiss all counts of Plaintiffs' complaint for lack of standing and for failure to state a claim. Defendants have also moved to strike Plaintiffs' demand for a jury trial and for punitive and delay damages. Since Plaintiffs have agreed to withdraw Count IV of the complaint which sought accrued benefits under 29 U.S.C. § 1054(g), we proceed on Plaintiffs' remaining claims.
ERISA governs two types of employee benefits plans — those that provide for "pension" benefits, see 29 U.S.C. § 1002(2) and those that provide for "welfare" benefits, see 29 U.S.C. § 1002(1). There is no dispute that, under 29 U.S.C. § 1002(1), an unfunded severance plan, like the AT & T Transition Protection Payment Plan, is an "employee welfare benefit plan." See, e.g. Massachusetts v. Morash, 490 U.S. 107, 116, 109 S.Ct. 1668, 1673, 104 L.Ed.2d 98 (1989); Reichelt v. Emhart Corp., 921 F.2d 425, 430 (2d Cir.), cert. denied, ___ U.S. ___, 111 S.Ct. 2854, 115 L.Ed.2d 1022 (1991); Pane v. RCA Corp., 868 F.2d 631, 635 (3d Cir.1989).
While pension plans are subject to ERISA's elaborate accrual, vesting, and funding requirements, see 29 U.S.C. §§ 1051-1085, Congress chose to provide employers with considerable flexibility with respect to unaccrued and nonvested welfare plans. Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1160 (3d Cir.1990); Reichelt, 921 F.2d at 429. Although ERISA does not require employers to provide welfare benefits of any kind, ERISA does require that if welfare benefits are provided, they should be maintained in accordance with certain minimal disclosure and fiduciary requirements. See 29 U.S.C. §§ 1021-1031, 1101-1114. These requirements serve "two salutary purposes ... — to ensure that `the individual participant knows exactly where he stands with respect to the plan' and `to enable employees to police their plans.'" Hozier, 908 F.2d at 1170 (citations omitted). Moreover, employer disclosures will permit employees who...
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