Arivella v. Lucent Technologies, Inc.
| Decision Date | 08 June 2009 |
| Docket Number | Civil Action No. 08-cv-10398-RCL. |
| Citation | 623 F.Supp.2d 164 |
| Parties | William F. ARIVELLA, Lucien F. Carrier, Elnora M. Curran, William K. Dehart, Jr., Sebastian Distefano, Sharon C. Donovan, Shirley Easter, Albert R. Gauvin, William Higgins, Charlotte R. Johnston, Shay Kennedy, Kent D. Klueber, Lucille P. Lacroix, Beverly J. Leveille, Della Marrone, Ida R. McCarthy, Maria Murphy, Manual A. Neves, Lewis G. Parham, Joanne R. Payson, Patricia A. Picard, Dorothy Porter, Carol A. Ross, Marguerite Santo, Administratrix of the Estate of Michael D. Santo, Roberta A. Simmons, Leonard Speigel, and Theresa Staples, Plaintiff v. LUCENT TECHNOLOGIES, INC., Lucent Technologies Pension Plan, Lucent Technologies Inc. Life Insurance Plans, Lucent Technologies Inc. Long Term Care Insurance Plan, Lucent Technologies Inc. Medical Expense Plan, Lucent Technologies Inc. Dental Expense Plan, and Lucent Technologies Long Term Savings and Security Plan, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Terence H. McGuire, John Houston Pope, Evan J. Spelfogel, Epstein, Becker & Green, PC, New York, NY, for Defendants.
Dale James Morgado, Thomas G. Moukawsher, Ian O. Smith, Moukawsher & Walsh, LLC, Hartford, CT, Mala M. Rafik, Rosenfeld & Rafik, PC, Boston, MA, for Plaintiff.
The above-listed plaintiffs ("plaintiffs"), all former employees of defendant Lucent Technologies, Inc., who were also members of the Communications Workers of America union ("CWA" or "Union"), sued the above-listed defendants ("Lucent") on March 11, 2008, alleging breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 ("ERISA") §§ 404 and 502(a)(3) (Count I), breach of ERISA § 502(a)(1)(B) (Count II), and common law fraud and misrepresentation (Count III). In either April or July 2001, each of the plaintiffs accepted a benefits package from Lucent in exchange for voluntarily ceasing their employment with the company. The plaintiffs claim, however, that at the time they agreed voluntarily to terminate their employment, Lucent and the Union failed to disclose the contents of a prior agreement whereby Union-member Lucent employees involuntarily laid off would be entitled to a significantly more generous benefits package. Each of the plaintiffs in this case assert that had they been aware of the potential to receive more generous benefits, they would not have accepted the voluntary termination offer.
The plaintiffs in the instant case only filed suit in their individual capacities after Judge Reginald C. Lindsay denied class certification and the instant plaintiffs' motion to intervene in a different case, Fici v. Lucent Technologies, Civil Action No. 02-10536-RCL (hereinafter Fici). The Fici class representatives brought suit on behalf of all Union-member Lucent employees who accepted the April and July offers of voluntary separation, including all of the plaintiffs in the case at bar.
Lucent now moves to dismiss the individual plaintiffs' claims, arguing that their suits are barred by the relevant three-year statute of limitations or six-year statute of repose in ERISA § 413. Because the durational limitations in section 413 were tolled during the pendency of the Fici class action pursuant to the Supreme Court's decision in American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), the Court DENIES Lucent's motion to dismiss the plaintiffs' ERISA claims (Counts I and II) and GRANTS Lucent's motion to dismiss the misrepresentation and fraud claims (Count III).
Lucent operated a manufacturing facility, the Merrimack Valley Works ("Merrimack") in North Andover, Massachusetts, which is now closed. (Pls.' Am. Cmplt. ("Cmplt.") ¶ 37, Doc. No. 6.)1 As of January 2001, more than 5,000 individuals worked at the plant. (Id.) Many of the workers employed at the plant and all of the plaintiffs in this case were members of a union, the CWA. (Id. ¶¶ 3-29.)
In April 2000 Lucent announced that it was seeking to outsource many of the manufacturing functions undertaken at Merrimack, and by early-2001, it was commonly known among the workforce that Lucent intended to sell or close Merrimack. (Id. 139.) To facilitate this course of action, in early-2001, Lucent management engaged the CWA in negotiations to modify the Collective Bargaining Agreement. In particular, the parties focused on the provisions of the Collective Bargaining Agreement that comprised the Lucent Career Transition Option Program ("LCTOP"), which governed the amount of money Union employees could receive if they accepted an offer voluntarily to cease employment with Lucent.
Prior to the completion of the April 2001 negotiations, upon acceptance of a voluntary termination offer, employees could receive only "Standard LCTOP" benefits, which allowed for a maximum, lump-sum payment of $30,500 (dependent on the employee's salary and seniority). (Id. ¶ 42.) On April 19, 2001, the Union and Lucent formalized a Memorandum of Agreement ("April 2001 Agreement") modifying the Collective Bargaining Agreement to provide for two new levels of benefits. (Id. ¶ 41.) Under the April 2001 Agreement, employees who voluntarily terminated employment were entitled to "Enhanced LCTOP" benefits, which increased the maximum lump-sum payment to $40,000, and also allowed employees within one year of pension eligibility to receive a leave of absence so that their pension benefits could vest. (Id.) The second type of benefits, delineated in Paragraph 5 of the April 2001 Agreement ("Paragraph 5" benefits), would be available only to individuals involuntarily laid off by Lucent; Paragraph 5 benefits were undisputedly more generous than the Enhanced LCTOP benefits.2
On April 2, 2001, prior to the completion of the April 2001 Agreement, Lucent informed Merrimack employees that it was going to reduce the workforce by approximately 700 CWA members, either through involuntary layoffs or voluntary separations. In accordance with this downsizing effort, Lucent explained to CWA members that they had the option to voluntarily leave the company by April 21, 2001, and receive Standard LCTOP benefits. (Id. ¶¶ 46-47.) On April 12, however, Lucent management informed affected employees that the deadline for accepting LCTOP would be extended until May 2, 2001. (Id.) As is discussed above, on April 19, Lucent and the CWA completed the April 2001 Agreement. Pursuant to the Agreement, on April 26, 2001, Lucent informed Union employees by letter that those who elected to leave the company voluntarily would be eligible for the Enhanced, as opposed to Standard, LCTOP benefits. (Id. ¶ 50.) The letter did not, however, explain or mention that individuals involuntarily dismissed would receive the more generous Paragraph 5 benefits. (Id.) Ultimately, more than 470 individuals, including the majority of plaintiffs in this case, accepted the April offer and resigned their employment by June 2001. (Id. ¶ 51.)
On July 12, 2001, Lucent sent another letter to Union employees, explaining the need for additional reductions and offering Enhanced LCTOP benefits to those who chose voluntarily to cease employment by July 27, 2001. (Id. ¶ 52.) This letter also made no mention of the Paragraph 5 benefits that laid-off Union employees would receive. (Id.) Approximately 30 people, including at least one of the plaintiffs in this case, elected voluntarily to terminate their employment pursuant to the July offer.3 (Id. ¶ 53.)
On September 25, 2001, still needing to eliminate additional positions, Lucent offered the more generous Paragraph 5 benefits to employees who would voluntarily sever their employment with the company. Approximately 1,200 employees accepted the offer of Paragraph 5 benefits. (Id.) ¶ 54.
The instant case is the offshoot of a prior class action lawsuit, Fici v. Lucent Technologies, Inc., 02-10536-RCL (hereinafter Fici). In that case, two Union-member Lucent employees, serving as class representatives, filed suit on behalf of all CWA-member Lucent employees who worked at Merrimack and who accepted either the April or July 2001 offers of Enhanced LCTOP benefits. ( The Fici plaintiffs filed their initial complaint on March 22, 2002 (Fici, Doc. No. 1); the plaintiffs filed a first amended complaint on June 5, 2002, (Fici, Doc. No. 6), and finally filed their second and final amended complaint on November 4, 2004, (Fici, Doc. No. 117). As in the instant case, the gravamen of the Fici claims was that Lucent breached its fiduciary duty to CWA members by entering into the April 2001 Agreement, offering Enhanced LCTOP benefits to employees who agreed voluntarily to terminate their employment in April and July 2001, and failing to inform those same employees that individuals terminated involuntarily would be entitled to the more generous Paragraph 5 benefits. All 28 plaintiffs in the instant case met the proposed class definition in Fici.
The Fici plaintiffs moved to certify their proposed class on November 5, 2004. (Fici, Doc. No. 118.) After a hearing on May 16, 2005, Judge Lindsay denied the plaintiffs' motion on September 29, 2005. Fici, Doc. No. 135. Judge Lindsay's Memorandum and Order explained that the Fici plaintiffs could not satisfy Federal Rule of Civil Procedure 23(b)(2), because they sought money damages as their primary remedy, or Rule 23(b)(3), because questions affecting how individual plaintiffs would have responded to the full disclosure of the April 2001 Agreement would have predominated over questions common to the entire class. Id. at 15 (...
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