Amara v. Cigna Corp.

• Decision Date: 13 June 2008
• Docket Number: No. 3:01CV2361(MRK).,3:01CV2361(MRK).
• Citation: 559 F.Supp.2d 192
• Court: U.S. District Court — District of Connecticut
• Parties: Janice C. AMARA, individually and on behalf of others similarly situated, Plaintiff, v. CIGNA CORPORATION and CIGNA Pension Plan, Defendants.

Page 192

559 F.Supp.2d 192

Janice C. AMARA, individually and on behalf of others similarly situated, Plaintiff, v. CIGNA CORPORATION and CIGNA Pension Plan, Defendants.

No. 3:01CV2361(MRK).

United States District Court, D. Connecticut.

June 13, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Allison C. Caalim, Stephen R. Bruce, Law Offices of Stephen R. Bruce, Washington, DC, Thomas G. Moukawsher, Moukawsher & Walsh, Hartford, CT, for Plaintiff.

Bradford S. Babbitt, James A. Wade, Brett J. Boskiewicz, Robinson & Cole, Hartford, CT, Christopher A. Parlo, Morgan, Lewis & Bockius, New York, NY, Jamie M. Kohen, Jeremy P. Blumenfeld, Joseph J. Costello, Morgan, Lewis & Bockius LLP, Philadelphia, PA, for Defendants.

MEMORANDUM OF DECISION

MARK R. KRAVITZ, District Judge.

The Court previously issued an opinion in this case regarding liability. See Memorandum of Decision ("Liability Decision") [doc. # 269]. The Court will assume that the reader is familiar with its Liability Decision and will not repeat at length the numerous findings of fact and conclusions of law determined in that opinion. Here, the Court decides what relief is appropriate in light of the statutory violations determined in its Liability Decision. Those violations related primarily to certain notices and disclosures CIGNA Corporation and the CIGNA Plan (collectively, "CIGNA") were required to provide to CIGNA employees in connection with the transition from a defined benefit pension plan to a cash balance plan. Additional issues, including the specific mechanisms for implementing the relief provided, will be addressed in a later decision.

The remedy issues addressed in this decision are complex, difficult, and enormously important to employers and employees alike. Unfortunately, the relevant statutory provisions and existing case law do not provide clear guidance. Moreover, the remedy choices available to the Court are not ideal, for either CIGNA or Plaintiffs. Therefore, the Court candidly acknowledges at the outset considerable uncertainty regarding the proper resolution of many of the issues addressed below. For that reason, the Court has decided sua sponte to stay its judgment so that the parties can proceed to the Second Circuit for further guidance before the Court and the parties seek to implement the Court's judgment. The stakes are far too high—for both CIGNA and its employees—to implement the Court's judgment in the face of such substantial uncertainty.

I.

Before turning to the substance of the appropriate relief, the Court will address two preliminary procedural questions: (1) which issues are appropriate for class treatment and which should be considered individual issues; and (2) what remedies are available in an ERISA class action certified under Rule 23(b)(2) of the Federal Rules of Civil Procedure.

A.

Plaintiffs argue that there are no remaining individual issues in light of the Court's Liability Decision. CIGNA, on the other hand, claims that several important individual issues remain. CIGNA identifies four issues it considers appropriate for individual treatment following the Court's Liability Decision: whether any individual employee suffered likely prejudice and/or whether the violations constituted harmless error for that employee; whether and when an employee gained actual knowledge of the true facts regarding the transition to Part B; whether an employee individually faced a significant reduction in the rate of future benefit accrual such that a § 204(h) notice was required for that particular employee; and whether certain waivers signed by retiring employees beginning in 2004 make those employees ineligible for any relief. As a result, CIGNA asks the Court to decertify the Class or to commence individual discovery and hold Teamsters hearings (named for International Brotherhood of Teamsters v. United States, 431 U.S. 324, 360-61, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977)) on the remaining individual issues. Indeed, CIGNA asks for permission to begin depositions of each of the approximately 25,000 members of the Class. See Defendants' Memorandum on Individual Issues and Class Relief [doc. # 276] at 9 n. 10. The Court agrees with Plaintiffs.

With respect to CIGNA's claim that individual issues remain regarding likely prejudice/harmless error, CIGNA relies primarily on two documents—the parties' March 10, 2006 Stipulation and Joint Motion on Conduct of Discovery and Trial on "Likely Prejudice" and "Harmless Error" Issues Connected with Second and Fourth Claims for Relief ("Stipulation") [doc. # 167] and the Court's March 12, 2007 Order Under Federal Rule 23(c)(1)(B) ("Rule 23(c)(1)(B) Order") [doc. # 241]. In the Stipulation, the parties agreed to engage in limited discovery, involving eight class members chosen by Plaintiffs and eight chosen by CIGNA, regarding the likely prejudice/harmless error issue in order to determine whether a basis existed for expanding similar discovery to the entire Class. In the Rule 23(c)(1)(B) Order, the Court described the claims as articulated by Plaintiffs and the defenses as articulated by CIGNA. At the time, CIGNA opposed several of the claims described by Plaintiffs on the ground that the issues involved were individual, rather than class-wide.

CIGNA's arguments regarding likely prejudice/harmless error fail for several reasons. First, CIGNA's interpretation of the Stipulation and the Rule 23(c)(1)(B) Order is belied by the text of those two documents. The Stipulation expressly states, "The parties expect that the trial will result in a final judgment on the issues of likely prejudice and harmless error for all class members who testify. The Court will decide whether the trial results in a final judgment on these issues for all other class members." Stipulation [doc. # 167] at 4-5 (emphasis added). The Stipulation also notes that the parties would confer with the Court after the trial to determine "[t]he need for, and procedures for, any individualized hearings on likely prejudice or harmless error, and any related discovery." Id. at 5 (emphasis added). The Court's Rule 23(c)(1)(B) Order uses similar language:

In designating the class issues, the Court relies upon the Third Amended Complaint [doc. # 165], for which leave to amend was granted on February 15, 2006 [doc. #164]. In contesting the class claims, Defendants have identified class, sub-class, and individual defenses. The recitation below generally sets forth the claims of the parties as they have chosen to describe them, with such specificity as is required to understand the claim. The Court expresses no opinion on the merits of the claims or defenses of the parties, and therefore the parties should attach no significance to the particular phraseology chosen to describe any claim or defense....

Order Under Federal Rule 23(c)(1)(B) [doc. # 241] at 2-3 (emphasis added).

Thus, both the parties' Stipulation and the Court's Rule 23(c)(1)(B) Order contemplated the possibility that once the trial was complete, the Court would determine that no individual issues regarding likely prejudice/harmless error remained. And in fact that is exactly what the Court did when it held that "[a]pplying the Burke [v. Kodak Retirement Income Plan, 336 F.3d 103 (2d Cir.2003),] and Frommert [v. Conkright, 433 F.3d 254 (2d Cir.2006),] standard to the facts of this case, ... Plaintiffs have met their burden of showing likely harm and prejudice." Liability Decision [doc. #269] at 104. The Court did not distinguish the named Plaintiffs from the rest of the Class, nor did the Court require an individualized showing such as that requested by CIGNA, even from the named Plaintiffs themselves. Such an approach both mirrors the case law (Frommert, for example, which was not even certified as a class action, did not require individualized showings by each plaintiff) and reflects the group nature of the harm inflicted. For CIGNA issued the same misleading notices and disclosures to the Class as a whole, and thus all class members were affected equally and in a similar manner by those publications. As a consequence, the Court believes that its holding unambiguously applies to the entire Class, and that no individual issues remain with respect to likely prejudice/harmless error.

Even assuming that the Court's holding could be interpreted as leaving open the possibility that individual issues remained on this subject, the Court would nevertheless reject CIGNA's arguments. CIGNA "acknowledge^] that this Court has held that certain uniform written communications were insufficient to defeat a claim of likely prejudice, or demonstrate harmless error, on a classwide basis, and . .. do[es] not seek to relitigate those issues here." Defs.' Mem. [doc. # 276] at 3. Yet CIGNA then goes on to argue that

before an absent class member is entitled to a remedy, the Court must rule on whether that class member had "actual knowledge" of the information the Court held was not sufficiently disclosed, and whether that class member's particular claims otherwise succeed or fail under the likely prejudice/harmless error analysis.

Id. at 3-4.¹ In making this claim, CIGNA does not explain on what basis it expects to find that certain employees, despite having received the same disclosures CIGNA admits "were insufficient to defeat a claim of likely prejudice, or demonstrate harmless error," id. at 3, would have "actual knowledge" of the undisclosed information. The Court notes in this regard that Plaintiffs assert, see Plaintiffs' Reply Memorandum on Relief [doc. # 277] at 13, and CIGNA has not denied, that CIGNA failed to avail itself of the full scope of discovery permitted under the parties' Stipulation. Rather CIGNA limited its discovery to requesting documents from and deposing the eight class members chosen by Plaintiffs, and decided not to call any class members at all as witnesses at trial. Thus, CIGNA has not provided the Court with any evidence that even a...