Baeten v. Van Ess
| Decision Date | 10 August 1979 |
| Docket Number | No. 75-C-555.,75-C-555. |
| Citation | 474 F. Supp. 1324 |
| Parties | Clyde P. BAETEN, James R. Benson, Charles C. Bidwell, and others similarly situated, Plaintiffs, v. Anthony J. VAN ESS, Audrey R. Morgan, Leonard Anderson, Jane Hamilton, Daniel C. Beisel, Richard Timm, Green Bay Newspaper Company Profit Sharing Plan, and Green Bay Newspaper Company, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
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Goldberg, Previant & Uelmen by Richard M. Goldberg and Howard L. Janco, Milwaukee, Wis., for plaintiffs.
Welsh, Trowbridge, Planert & Shaefer by F. N. Trowbridge, Green Bay, Wis., for Newspaper.
Everson, Whitney, Everson, Brehm & Pfankuch by John C. Whitney, Green Bay, Wis., for individual defendants.
DECISION and ORDER
This matter is before me for resolution on its merits. The parties have submitted the case to the court in the form of a stipulated record which includes a statement of uncontested facts, a statement of contested facts, depositions and various documents and records. Briefs were also submitted.
In addition to the facts specifically mentioned below, I adopt the parties' stipulated statement of uncontested facts as part of the court's factual findings as required by Rule 52(a), Federal Rules of Civil Procedure.
The plaintiffs are forty-one former employees of the defendant Green Bay Newspaper Company. On January 25, 1972, each plaintiff was a member of a bargaining unit at the company represented by Local 23 of the International Typographical Union. As of that same date, each of the plaintiffs was a participant in the company's profit sharing plan which is an employee benefit plan as defined in the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1002.
The defendants include the company, six persons who were trustees for the plan between January 25, 1972, and January 1, 1975, and the plan itself.
A collective bargaining agreement was in effect between Local 23 and the company from July 1, 1968, through July 30, 1971. Subsequent to its expiration, the parties attempted to negotiate a new agreement. On January 25, 1972, members of the union, including the plaintiffs, walked off their jobs in a lawful economic strike.
Following commencement of the strike, on January 25, 1972, February 1, 1972, and February 7, 1972, the company sent letters to each plaintiff and to the other strikers requesting that they return to their jobs. With one exception which does not affect the resolution of this case, none of the plaintiffs returned to work for the company or received compensation from the company for work performed after January 25, 1972.
Under date of September 20, 1972, the company mailed a letter to each plaintiff stating that each plaintiff as well as the other strikers had been permanently replaced. From at least September 20, 1972, until 1977, no position was available for or offered to any of the plaintiffs.
The company's profit sharing plan provides deferred compensation to eligible company employees. Benefits under the plan are distributed to participants upon retirement, disability or sickness, voluntary termination, discharge, layoff, or death. On December 18, 1973, the trustees of the plan voted to sever the interest of Rudolph Boehm, Carlton Koch, and Norman Wirch in the plan. The trustees determined that all three of these plaintiffs had voluntarily terminated their employment. Under the terms of the plan, the three were thereby entitled to receive 5% of their severance interest multiplied by the number of completed years of employment they had with the company, not to exceed 80% of what would otherwise have been their full severance interest.
On April 11, 1974, the trustees of the plan voted to sever the interest of John Mumpy in the plan, after deciding that he had voluntarily terminated his employment. On July 18, 1974, the trustees voted to sever the interest of Lionel Bushey after making the same determination regarding his employment status.
On September 20, 1974, the trustees of the plan voted to sever the interest of all thirty-six of the remaining plaintiffs in the plan. Each plaintiff so severed on September 20, 1974, received the following letter, dated September 26, 1974, from the plan:
In determining the employment status of each respective plaintiff, the trustees did not have any information submitted by the plaintiffs. In gathering information regarding the plaintiffs' employment status, the trustees made no attempt to obtain information from the plaintiffs. Instead the trustees relied on reports supplied by the Retail Credit Company which were the results of investigations done by that company. Michael Gage, personnel director of the defendant company, directed the Retail Credit Company not to contact any of the plaintiffs in conducting its investigation.
Prior to the trustees' severing of the plaintiffs' interest in the plan, the plaintiffs were not notified that the trustees were contemplating such action. None of the plaintiffs were given the opportunity to be heard regarding such action before it was taken, and no opportunity to appeal was granted after it was taken.
Between November 21 and December 9, 1974, each plaintiff by letter notified the plan and the trustees as follows:
The protests of the trustees' actions and the requests for rescission of the severance ruling represented by the notices received between November 21 and December 9, 1974, were never presented to the board of trustees of the plan for their consideration in a meeting. No trustee or other representative of the plan has ever responded to the notices sent by the plaintiffs.
The plaintiffs have brought this action under ERISA, 29 U.S.C. §§ 1132 and 1140. Count I of the plaintiffs' complaint alleges that the actions of the trustees in severing the plaintiffs' interest in the plan were unlawful, and it thereby seeks as relief from the plan and the trustees the money withheld from the plaintiffs as a result of their employment status having been classified as voluntarily terminated. Count II alleges that the trustees and agents of the defendant company discriminated against the plaintiffs because of their involvement in a lawful economic strike, and it thereby seeks from all of the defendants punitive damages as well as the relief sought in count I.
In previous decisions dated May 6, 1976, and December 14, 1978, I held that the effective date of 29 U.S.C. § 1132, under which the plaintiffs are proceeding, was September 2, 1974. The court of appeals for this circuit reached the same conclusion in Reiherzer v. Shannon, 581 F.2d 1266, 1272 (7th Cir. 1978). The court of appeals also held in Reiherzer that "a cause of action under section 1132 arises at the time the trustees of the pension plan deny an application for benefits."
The interests of the five above-named plaintiffs in the plan were all severed prior to September 2, 1974. Nonetheless, the plaintiffs maintain that the trustees' failure to change their decision or to grant the plaintiffs a right to appeal subsequent to their severance creates a cause of action which accrued after September 2, 1974. The plaintiffs' contention is unimpressive. Any time a board of trustees denies pension benefits, the negative effect of that decision on the claimant continues for an indefinite period of time following the trustees' decision. Yet, the court of appeals has clearly stated that a cause of action under § 1132 arises at the time the trustees deny a claimant benefits. In the instant case, that time was when the plaintiffs were severed from the plan. Since the interests of the five above-named plaintiffs were severed prior to September 2, 1974, their claims in this action must be dismissed.
Remaining for disposition are the claims of the thirty-six plaintiffs whose interests in the plan were severed after September 2, 1974. In count I the plaintiffs maintain that the decision of the trustees to sever their interest was illegal under 29 U.S.C. § 1132.
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