Bellas v. Cbs, Inc.

• Decision Date: 29 June 1999
• Docket Number: No. CIV. A. 98-1455.,CIV. A. 98-1455.
• Parties: Harry BELLAS, Plaintiff, v. CBS, INC. and Westinghouse Pension Plan, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

73 F.Supp.2d 500

Harry BELLAS, Plaintiff, v. CBS, INC. and Westinghouse Pension Plan, Defendants.

No. CIV. A. 98-1455.

United States District Court, W.D. Pennsylvania.

June 29, 1999.

Goldberg, Persky, Jennings & White, John T. Tierney, Schwartz, Steinsapir, Dohrmann & Sommers, William T. Payne, Pittsburgh, PA, for Plaintiff.

Pepper, Hamilton, Henry W. Ewalt, CBS Corp., Dennis Derr, Pittsburgh, PA, Jones, Day, Reavis & Pogue, Andrew Kramer, Washington DC, for Defendants.

OPINION and ORDER OF COURT

AMBROSE, District Judge.

Pending before the Court is the Motion for Partial Summary Judgment of Plaintiff Harry Bellas ("Bellas" or "Plaintiff"). Plaintiff's Complaint alleges a violation of ERISA § 204(g), 29 U.S.C. § 1054(g) both by Defendants CBS, Inc. ("CBS") and the Westinghouse Pension Plan ("the Plan") (collectively "Defendants") and an ERISA breach of fiduciary duty claim by Defendant CBS. For the reasons set forth below, the Plaintiff's Motion for Partial Summary Judgment is granted.

STANDARD OF REVIEW

Summary judgment may only be granted 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 judgment as a matter of law. Fed. R.Civ.P. 56(c). Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion against the party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In considering a motion for summary judgment, this Court must examine the facts in a light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir.1990). The burden is on the moving party to demonstrate that the evidence creates no genuine issue of material fact. Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir.1987). The dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is material when it might affect the outcome of the suit under the governing law. Id. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex, 477 U.S. at 322, 106 S.Ct. 2548.

FACTS

Viewed in a light most favorable to Defendants, following are the material facts of record.¹

Plaintiff alleges that Westinghouse Electric Corporation ("Westinghouse"), the predecessor by name change to Defendant CBS, impermissibly amended the Westinghouse Pension Plan ("the Plan") by first narrowing and then eliminating entirely a "Special Retirement Provision" applicable when a senior employee is terminated as a result of a "Permanent Job Separation." Plaintiff contends that said amendment has the effect of eliminating or reducing an early retirement benefit or an early retirement-type subsidy in contravention of the Retirement Equity Act ("REA") Amendments to ERISA, 29 U.S.C. § 1054(g) and § 411(d)(6) of the Internal Revenue Code, 26 U.S.C. § 411(d)(6). Plaintiff further claims that in adopting and implementing said amendment, CBS violated its fiduciary duties of acting solely in the interest of plan participants and beneficiaries, of administering the Plan in accordance with both the governing documents and instruments and ERISA, and of exercising care, prudence, and diligence in the performance of its responsibilities and thereby violated ERISA and the IRC.

The pre-1994 version of the Plan provided in Section 20 of the Plan a Special Retirement Provision for employees of CBS meeting stated age and service requirements who were terminated as a result of a "Permanent Job Separation" (the "PJS benefit"). More specifically, in Section 20 of the pre-1994 version of the Plan, which is entitled, "Special Retirement Provisions," the Plan provided in relevant part:

B. 1. An Employee whose employment is terminated as a result of a Permanent Job Separation, who at the time of such Permanent Job Separation does not satisfy any of the requirements for retirement pursuant to Section 2 of the Plan, may retire on his Special Retirement Date or on the first day of any month following his Special Retirement Date if, by the end of the calendar year in which he is separated, he would have satisfied one of the age-and-service combinations set forth below had he remained continuously employed to the end of such year:

— Age 50 or over with twenty-five (25) or more years of Eligibility Service,

— Age 51 or over with twenty-two (22) or more years of Eligibility Service — Age 52 or over with nineteen (19) or more years of Eligibility Service,

— Age 53 or over with sixteen (16) or more years of Eligibility Service,

— Age 54 or over with thirteen (13) or more years of Eligibility Service,

— Age 55 or over with ten (10) or more years of Eligibility Service,

2. The amount of monthly pension payable to an Employee who satisfies the requirements set forth in Subsection 20.B.1 above shall be the sum of (a), (b) and (c) below:

(a) Any amounts computed pursuant to Section 4 of the Plan [Section 4 is entitled "Normal Retirement Pension"].

(b) Ten ($10.00) dollars multiplied by his Credited Service.

(c) If the Employee had twenty-five (25) years of eligibility Service and his Special Retirement Date is on or before September 1, 1994, an additional $100.

The amounts calculated in accordance with Subsection 20.B.2 above shall be based on the provisions of the Plan in effect on the Employee's Special Retirement Date.

3. The amount calculated in accordance with Subsection 20.B.2 (a) shall be payable for the lifetime of the Employee and shall be subject to all of the optional forms of payments described in Section 10.

4. The amounts calculated in accordance with Subsections 20.B.2 (b) and 20.B.2 (c) shall be payable up to and including the month in which the Employee attains his 62nd birthday. These amounts shall not be subject to any of the optional forms of payment described in Section 10, except the Lump Sum form described in Subsection 10.C.5.

Pre-1994 version of the Plan, Section 20, pp. 43-44. The term "Permanent Job Separation" was defined in the pre-1994 version of the Plan in pertinent part as meaning "the termination of the employment of an Employee ... through no fault of his own through lack of work for reasons associated with the business for whom [the employer] determines there is no reasonable expectation of recall." Id. at Section 1, p. 7. Further, the Summary Plan Description with respect to this provision explains:

[t]he amount of your special retirement pension is the full amount you have earned to the date you are permanently separated. There are no reductions applied to your pension, even though you are retiring early. If you are under age 62, you receive a monthly early retirement supplement of $10 for each year of credited service. This supplement stops when you turn age 62.

If you have at least 25 years of eligibility service, you receive an additional $100 per month until you turn age 62. This additional $100 per month is available only if your special retirement pension begins on or before September 1, 1994.

Pre-1994 version of the Plan Summary Plan Description, p. 14.

An amendment to the Plan, adopted by CBS on January 1, 1994 ("the Amendment"), altered participants' entitlement to the PJS benefit under the Plan in two respects: (1) the Amendment made it harder to qualify for the PJS benefit after January 1, 1997, by narrowing the definition of "Permanent Job Separation" to apply only if an employee's employment termination was due to a job movement, product line relocation, or location closedown and (2) the Amendment eliminated the PJS benefit in toto for terminations on or after September 1, 1998.² More specifically the definition of the term "Permanent Job Separation" was defined in the 1994 version of the Plan, in relevant part, as follows:

Permanent Job Separation means, for periods prior to January 1, 1997, the termination of the employment of an Employee with an Employer ... through no fault of his own for lack of work for reasons associated with the business for whom such Employer ... determines, on a uniform and nondiscriminatory basis, that there is no reasonable expectation of recall.

. . . . .

For periods on or after January 1, 1997 and before September 1, 1998, a Permanent Job Separation means solely the termination of the employment of an Employee with an Employer ... because of job movement or product-line relocation, or location closedown, as those terms are defined below.... Layoffs due to adjustments in the workforce caused by changes in production requirements, manufacturing processes, sales volume, inventory levels, make or buy decisions, decisions to discontinue a product line, or any other reasons associated with the business shall not be a job movement or product-line relocation. ... In no event shall a Permanent Job Separation occur after August 31, 1998.

1994 version of the Plan, pp. 12-13.

Plaintiff was employed by CBS in the nuclear division of CBS from 1964 until December 31, 1997. He was a participant in the Plan at all relevant times prior thereto, including at the time of the adoption of the Amendment. Plaintiff was notified of the Amendment either in late 1994 or when the January 1, 1995 Summary Plan Description of the Plan was distributed.

Plaintiffs employment was terminated by CBS on December 31, 1997, through no fault of his own, through lack...