Johnson v. Enron Corp.

• Citation: 906 F.2d 1234
• Decision Date: 21 June 1990
• Docket Number: No. 89-2242,89-2242
• Parties: Glenn W. JOHNSON, Appellant, v. ENRON CORP., Enron Gas Processing Company, d/b/a Enron Liquid Fuels, Co., InterNorth, Inc. Retirement Income Plan, Enron Corp. Merger Severance Plan (f/k/a HNG/InterNorth Merger Severance Plan), Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 1234

906 F.2d 1234

Glenn W. JOHNSON, Appellant, v. ENRON CORP., Enron Gas Processing Company, d/b/a Enron Liquid Fuels, Co., InterNorth, Inc. Retirement Income Plan Enron Corp. Merger Severance Plan (f/k/a HNG/InterNorth Merger Severance Plan), Appellees.

No. 89-2242.

United States Court of Appeals Eighth Circuit.

Submitted Feb. 15, 1990.

Decided June 21, 1990.

Paul D. Kratz, Omaha, Neb., for appellant.

Robert F. Rossiter, Jr., C. Robert Vote, Omaha, Neb., for appellees.

Before LAY, Chief Judge, BEAM, Circuit Judge and WOODS, ^* District Judge.

BEAM, Circuit Judge.

Plaintiff Glenn W. Johnson and defendants Enron Corporation, Enron Gas Processing Company, d/b/a Enron Liquid Fuels, Co., InterNorth, Inc. Retirement Income Plan, and Enron Corporation Merger Severance Plan (f/k/a HNG/InterNorth Merger Severance Plan) filed cross-motions for summary judgment pursuant to an action for benefits under the Enron Corporation Merger Severance Plan. The district court, ¹ finding that the action arose under the Employee Retirement Income Security Act of 1974, 29 U.S.C. Secs. 1001-1461 (1982 & Supp.1987) (ERISA), denied Johnson's motion for partial summary judgment, granted the defendants' motion for summary judgment, and dismissed Johnson's complaint. We affirm.

I. BACKGROUND

In 1947, Johnson was hired by Northern Natural Gas, where he eventually became the director of finance and credit for the Liquid Fuels subsidiary in Omaha, Nebraska. Northern Natural Gas subsequently became InterNorth, Inc., and InterNorth acquired the issued and outstanding stock of the Houston Natural Gas Corporation. On July 16, 1985, InterNorth and the Houston Natural Gas Corporation merged, and the two became Enron Corporation. Johnson continued in his position as the director of finance and credit with Enron Liquid Fuels, Co., a subsidiary of Enron Corporation.

Pursuant to the merger, Enron Corporation reduced the number of its employees and relocated its staff to meet business goals. To aid in this process, Enron Corporation established the Merger Retirement Program for HNG-InterNorth Merger/Consolidation (Merger Retirement Program) by amending the InterNorth, Inc. Retirement Income Plan. See exhibit 10C, InterNorth, Inc. Retirement Income Plan, amended through Jan. 1, 1985, jt. app. at 163, 253-55. The Merger Retirement Program provided that if a qualified employee voluntarily retired prior to his retirement date, the employee would be eligible for enhanced benefits. The Merger Retirement Program, which was adopted in 1985, limited the time in which employees could elect to receive the enhanced retirement benefits. A qualified employee was required to choose the program before December 1, 1985. Once the employee opted for early retirement, the employee could retire on either December 1, 1985, or January 1, 1986. The retirement date, however, could be postponed by mutual agreement between the employer and employee, if "necessary to avoid undue disruption to the business." Id., amendment no. 1, Sec. 18.2(a), jt. app. at 254. Enron Corporation held a meeting for interested employees on October 2, 1985, to explain how the Merger Retirement Program would operate and to answer employees' questions. ² Johnson attended the meeting, and on November 4, 1985, he elected to take early retirement under the Merger Retirement Program. By mutual agreement between Johnson and Enron Liquid Fuels, Johnson's retirement date was extended to October 1, 1986.

Enron Corporation also implemented the Enron Corporation Merger Severance Plan (Merger Severance Plan) to assist employees who were involuntarily terminated as a result of the merger. The Merger Severance Plan provided for enhanced severance benefits for employees who had been notified that their position would be terminated or relocated to a city more than thirty miles away from the employee's primary place of work. See exhibit 10B, Enron Corporation Merger Severance Plan, jt. app. at 143-62. The Merger Severance Plan became effective on January 1, 1986. Id. at 160. Employees who elected to retire under the Merger Retirement Program on either December 1, 1985, or January 1, 1986, therefore, were not eligible for severance benefits because they had already retired, unless they postponed their retirement and were involuntarily terminated before their retirement date.

In June of 1986, Johnson received information that Enron Liquid Fuels would be transferred to Houston, Texas. ³ As a result of this transfer, Johnson believed that he would be eligible for the increased benefits offered under the Merger Severance Plan and, thus, on June 18, 1986, Johnson attempted to rescind his prior decision to receive benefits under the Merger Retirement Program. Johnson was informed that he could not rescind his election to retire early. On June 24, 1986, Johnson filed a written request for rescission with his supervisor, Bill Matheson. Johnson subsequently approached Mike Moran, Enron Liquid Fuels' corporate counsel, who told Johnson that he could not rescind his earlier decision to retire. On August 6, 1986, Matheson submitted a written response rejecting Johnson's request to rescind. Johnson appealed this denial to Enron Liquid Fuels' president, Mike Muckleroy, on September 23, 1986. Muckleroy issued a written memorandum rejecting Johnson's request on September 30, 1986.

On February 2, 1987, Johnson filed this lawsuit against Enron Corporation in the district court of Douglas County, Nebraska. Enron Corporation successfully petitioned for removal of the action on March 4, 1987. On March 13, 1987, Johnson filed a motion to remand the action to the Douglas County District Court. The United States Magistrate issued a recommendation which denied Johnson's motion to remand because the magistrate found that Johnson's claims involved ERISA provisions. The magistrate also granted Enron Corporation's motion to strike Johnson's demand for a jury trial. The district court adopted the magistrate's recommendations in an August 21, 1987, order. On August 15, 1988, the district court granted Johnson's motion for leave to amend his petition to name as parties defendant each of the plans at issue in this lawsuit. The parties then filed their respective motions for summary judgment. On June 21, 1989, the district court granted Johnson's motion to file a brief out of time in opposition to Enron Corporation's motion for summary judgment. As indicated, the district court denied Johnson's motion for partial summary judgment, granted Enron Corporation's motion for summary judgment, and dismissed Johnson's complaint. On appeal, Johnson argues that: (1) Enron Corporation should not have denied Johnson's request to rescind his election of early retirement benefits, and this court must review the denial under a de novo standard of review; (2) Enron Corporation accorded Johnson disparate treatment because it allowed another employee, Robert Kroeger, to rescind his election of early retirement benefits and to elect benefits under the Merger Severance Plan; and (3) Enron Corporation violated ERISA by denying Johnson's request to elect benefits under the Merger Severance Plan, and this court must review the denial under a de novo standard.

II. DISCUSSION

A. Summary Judgment

In reviewing a district court's grant of summary judgment, this court applies the same standard as the district court applied, without giving deference to the court below. Osborn v. E.F. Hutton & Co., 853 F.2d 616, 618 (8th Cir.1988). A court should grant a summary judgment motion if the full record discloses that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Osborn, 853 F.2d at 618. The non-moving party must establish significant probative evidence to prevent summary judgment. Id. In addition, the court must give the benefit of all favorable factual inferences to the party opposing summary judgment. Simmons v. Diamond Shamrock Corp., 844 F.2d 517, 519 (8th Cir.1988). In a trilogy of cases, the Supreme Court established that the Rule 56 motion should be interpreted to accomplish its purpose of disposing of factually unsupported claims. Also, the trial judge's function is not to weigh the evidence and determine the truth of the matter, but rather, the judge must determine whether there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986).

B. Standard of Review

The district court held that Johnson's cause of action arose under ERISA. Before Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), a court reviewing a denial of ERISA benefits employed the arbitrary and capricious standard. See Simmons, 844 F.2d at 522. In Firestone, however, the Supreme Court altered the standard of review to the de novo standard, unless the plan at issue provided discretionary authority to the plan's administrator for determining eligibility or for interpreting the plan's terms. Firestone, 109 S.Ct. at 956. In this case, the district court found that the plan's administrator was not given discretionary authority and, thus, the de novo standard was proper on review. Johnson v. Enron Corp., No. 87-0-177, slip op. at 7 (D.C.Neb. June 21, 1989).

Enron Corporation argues that this court must apply two different standards of review for two of the questions before us. As to whether Johnson can rescind his election of early retirement benefits, Enron Corporation asserts that the arbitrary and capricious standard of review is proper because the Merger Retirement Program gives discretionary authority to the plan's administrator. ⁴ Thus, the denial of Johnson's request to rescind his...