Gale v. Eix Severance Plan for Nonrepresented Emps.
| Decision Date | 07 January 2015 |
| Docket Number | CASE NO.: SACV 14-00044-JLS (ANx) |
| Court | U.S. District Court — Central District of California |
| Parties | MARK GALE, Plaintiff, v. EIX SEVERANCE PLAN FOR NONREPRESENTED EMPLOYEES and CALIFORNIA EDISON COMPANY BENEFITS COMMITTEE, Defendants. |
This action is brought pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., by plaintiff Mark Gale against defendants EIX Severance Plan for Nonrepresented Employees (the "Plan") and California Edison Company Benefits Committee (the "Committee"). The Plan is an unfunded employee welfare benefit plan governed by ERISA. The Committee is the Plan's administrator. The Plan's sponsor is the Southern California Edison Company ("SCE"), Plaintiff'sformer employer. Plaintiff alleges that Defendants abused their discretion in denying him severance benefits under the Plan.
Defendants have moved for summary judgment seeking to dismiss Plaintiff's declaratory judgment action wherein Plaintiff claims he is entitled to Plan benefits under 29 U.S.C. § 1132(a)(1)(B). (Motion, Doc. 21.) Plaintiff has opposed the Motion (Opp., Doc. 26) and Defendants have replied. (Reply, Doc. 28.) Having reviewed the papers and supporting documentation submitted by the parties, and taken the matter under submission, Defendants' decision denying severance benefits to Plaintiff is AFFIRMED.
1. BACKGROUND1
SCE operates the San Onofre Nuclear Generating Station ("SONGS"), where Plaintiff previously worked. (DRSUF ¶ 1.) The SONGS 2012 Employee Requested Severance Program ("SERSP") provided severance benefits to eligible employees who were accepted for participation. (See id. ¶ 2.) SERSP was offered in the sole discretion of SCE, which administered theSERSP and interpreted its terms. (See id. ¶ 3.) SERSP was made available in accordance with the terms of the Plan and the severance benefits provided by SERSP were the same as those offered under the Plan. (See id. ¶¶ 4-5.) SCE appointed an internal Committee, made up of SCE employees, to administer the Plan at its sole discretion. (See id. ¶¶ 10-11.)
SCE, not the Committee, had the sole discretion whether to accept any employee's application to participate in the SERSP. To be eligible for benefits under the Plan through the SERSP, an individual had to be a SONGS employee at the time the SERSP was announced on September 24, 2012. (See id. ¶ 12.) In addition, an employee had to have been terminated from employment while the Plan was in effect. (See id. ¶ 20.) Employees also had to apply to participate in the SERSP within the application period of September 27, 2012 to October 12, 2012.
Another requirement for eligibility was that an employee had to be designated as "Surplus" by the Participating Employer, here SCE. (See id. ¶ 19.) To be designated as "Surplus," an employee must have been selected for termination by his Participating Employer as part of, inter alia, a reduction in force. (See id. ¶ 21.) Furthermore, the Plan allowed for the establishment of a "Window Program" where employees could apply for benefits conditioned on the employee's voluntary termination of employment by being designated as Surplus. (See id. ¶ 22.) SCE retained the sole discretion to designate any employee as Surplus and to determine any employee's eligibility to apply for benefits under the Window Program. Under the SERSP, employees who already announced their intended retirement date before theSERSP was announced on September 24, 2012, were ineligible to participate in the SERSP. (See id. ¶ 16.)
On August 20, 2012, SCE announced by email, and by posting on the internal SONGS portal, that it would be implementing a reduction-in-force in which approximately 730 SONGS employees would be laid off. Plaintiff subsequently attended an All-Hands-Meeting where SCE management announced that it would not be offering a severance package to those terminated employees. (See id. ¶ 85.) On September 4, 2012, when Plaintiff was off-site on unpaid leave, SCE announced that it was considering whether to offer a voluntary severance program. (See id. ¶¶ 94-95.) On September 24, 2012, SCE announced to all employees that it would indeed be offering a voluntary severance program. (See id. ¶ 99.) SCE pays the full cost of Plan benefits from operating income. (See id. ¶ 73.)
SCE utilizes a Benefits Commencement Package ("BCP") in which employees log on to the EIX Benefits Website and check a box to receive a retirement pension package. Employees can withdraw notice of retirement at any time prior to receiving benefits, without penalty, by logging into the BCP and un-checking the box. (See id. ¶ 78.) Under SCE guidelines, an employee's request to receive pension benefits will be revoked automatically unless the employee contacts the Employee Information Center ("EIC") and gives formal notice of retirement. (See id. ¶ 79.)
On July 18, 2012, Plaintiff logged into the BCP, checked the box, and indicated a benefits commencement date of October 1, 2012. (See id. ¶ 77.) On July 30, 2012, Plaintiff contacted the EIC and formally requested October1, 2012 as his benefits commencement date and September 30, 2012 as his last day of work. (See id. ¶ 83.) On or about September 2, 2012, Plaintiff contacted the EIC to change the last day of his employment from September 30, 2012 to September 4, 2012. Plaintiff could have rescinded his retirement election on September 4, 2012, but he chose not to do so. (See id. ¶ 38.)
The Plan confers discretionary authority on the Committee to determine eligibility for Plan benefits in accordance with the terms of the Plan. (See id. ¶ 72.) The Committee has delegated day-to-day administrative responsibilities, such as deciding claims at the initial level, to the Benefits Strategy and Operations segment of the SCE Human Resources Department ("HR Operations"). (See id. ¶ 29.) The Committee, however, reviews claims for benefits that are denied in whole or in part. (See id. ¶ 28.)
Between September 2012 and January 2013, Plaintiff repeatedly requested to be included in the SERSP. On March 11, 2013, Plaintiff's initial requests for SERSP benefits were denied in a letter from the EIC Supervisor. (See id. ¶ 42.) That letter explained that Plaintiff was denied participation in the SERSP because: (1) he was not a full-time employee and was not designated as Surplus by SCE; and (2) he did not meet the definition of Surplus as defined in the Plan. (See id. ¶ 43.)
On May 8, 2013, through counsel, Plaintiff appealed the denial of Plan benefits to the Committee. (See id. ¶ 45.) In a letter dated May 8, 2013 to the Committee (the "Appeal Letter"), Plaintiff argued that SCE management had asked him to accelerate his retirement date and use his accrued vacationtime for SCE's benefit. Plaintiff also argued that he relied on SCE's affirmative representations that it would not be offering a severance program when he moved up his retirement date. (See id. ¶ 107.) According to Plaintiff, SCE treated other employees more favorably than him by accepting them into the SERSP after they gave notice or otherwise announced their intention to retire. (See id. ¶ 112.) After holding a meeting on June 27, 2013, (see SCE 000154), the Committee denied Plaintiff's appeal in a four-page letter to his attorney, dated July 17, 2013 (the "Denial Letter"). (See SCE000001-SCE000004.)
II. LEGAL STANDARDS
The beneficiary of an ERISA plan may bring a civil action against a plan administrator "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). Thus, Plaintiff has standing as a plan beneficiary to bring this action to recover severance benefits under the Plan. The scope of judicial review of an ERISA benefits decision depends on whether the plan confers discretion to the plan administrator in determining benefits. See Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008). The Court reviews a denial of benefits de novo, unless "the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
Discretionary authority is unambiguously granted where a plan administrator has both the responsibility to interpret the terms of a plan anddetermine eligibility for benefits. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 965 (9th Cir. 2006) (). Thus, "[w]here an ERISA plan vests the administrator with discretionary authority to determine benefit eligibility, 'a district court may review the administrator's determinations only for an abuse of discretion.'" Winters v. Costco Wholesale Corp., 49 F.3d 550, 552 (9th Cir. 1995) (quoting Taft v. Equitable Life Assurance Soc'y, 9 F.3d 1469, 1471 (9th Cir. 1993) (citing Firestone, 489 U.S. at 115)).
The Ninth Circuit has held that an "ERISA administrator abuses its discretion only if it (1) renders a decision without explanation, (2) construes provisions of the plan in a way that conflicts with the plain language of the plan, or (3) relies on clearly erroneous findings of fact." Boyd v. Bert Bell/Pete Rozelle NFL Players Ret. Plan, 410 F.3d 1173, 1178 (9th Cir. 2005). "Under this deferential standard, a plan administrator's decision 'will not be disturbed...
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