McCarthy v. Dun & Bradstreet Corp., Docket No. 05-3828-cv.

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtStanceu
Citation482 F.3d 184
PartiesMary McCARTHY, Clayton Borowski, on behalf of others similarly situated, and individually, Gail Adams, Donald Bakert, RoseMarie Black, Albin Blom, Mike Blount, William Brady, Donna Cochran, Steve Crowther, Michael Coughlin, Delia Coy, Paul Crowe, Cary Elbaum, Lisa Farnsworth, Jack Finley, James Gabrys, Gregory Gopodarek, Laura Gue, James Hadley, Gerald Hillard, Carl Langbein, Thomas Majka, Frederick Markt, Doris Megesi, Steve Miholics, Marleen Miller, Lewis Moore Jr., Philip Moscato, Brian Neary, Karl Nicosia, Barry O'Neill, Roger Ruggieri, Philip Salamone, Robert Short Jr., Ruth Stewart, Charles Szymanski, Billie Thomas, Frank Tricoli, Bill Tuohy, Jerry Vincent, Walter Waitz, Mark Weiss, Donald Wickersham, John Zimmer and Debbie K. Lubonski, Exec. of the Est. of Katherine J. Lubonski, Plaintiffs-Appellants, v. The DUN & BRADSTREET CORPORATION, The Dun & Bradstreet Corporation Retirement Account, and The Dun & Bradstreet Career Transition Plan, Defendants-Appellees, Aldo Camerin, Terri Carpenter, Denise Cyphers and Katherine Lubonski, Plaintiffs.
Decision Date29 March 2007
Docket NumberDocket No. 05-3828-cv.
482 F.3d 184
Mary McCARTHY, Clayton Borowski, on behalf of others similarly situated, and individually, Gail Adams, Donald Bakert, RoseMarie Black, Albin Blom, Mike Blount, William Brady, Donna Cochran, Steve Crowther, Michael Coughlin, Delia Coy, Paul Crowe, Cary Elbaum, Lisa Farnsworth, Jack Finley, James Gabrys, Gregory Gopodarek, Laura Gue, James Hadley, Gerald Hillard, Carl Langbein, Thomas Majka, Frederick Markt, Doris Megesi, Steve Miholics, Marleen Miller, Lewis Moore Jr., Philip Moscato, Brian Neary, Karl Nicosia, Barry O'Neill, Roger Ruggieri, Philip Salamone, Robert Short Jr., Ruth Stewart, Charles Szymanski, Billie Thomas, Frank Tricoli, Bill Tuohy, Jerry Vincent, Walter Waitz, Mark Weiss, Donald Wickersham, John Zimmer and Debbie K. Lubonski, Exec. of the Est. of Katherine J. Lubonski, Plaintiffs-Appellants,
v.
The DUN & BRADSTREET CORPORATION, The Dun & Bradstreet Corporation Retirement Account, and The Dun & Bradstreet Career Transition Plan, Defendants-Appellees,
Aldo Camerin, Terri Carpenter, Denise Cyphers and Katherine Lubonski, Plaintiffs.
Docket No. 05-3828-cv.
United States Court of Appeals, Second Circuit.
Argued February 15, 2006.
Decided March 29, 2007.

[482 F.3d 188]

Thomas G. Moukawsher, Esq. Moukawsher & Walsh, LLC, Hartford, CT, for Plaintiffs-Appellants.

Patrick W. Shea, Esq., Paul, Hastings, Janofsky & Walker LLP, Christine Button, of counsel, Stamford, CT, for Defendants-Appellees.

Before KEARSE and SACK, Circuit Judges, and STANCEU, Judge.*

STANCEU, Judge.


Plaintiffs-appellants are former employees of the Dun & Bradstreet Corporation ("Dun & Bradstreet") who were terminated from the company when Dun & Bradstreet sold its "Receivables Management Services" operations, conducted in the United States, Canada, and Hong Kong, on April 30, 2001. Upon the sale, plaintiffs-appellants became employees of a new corporation, "Dun & Bradstreet Receivables Management Services," which resulted from the sale. Their change in employment did not qualify them to receive severance benefits under the "Career Transition Plan," a Dun & Bradstreet benefit plan. It also affected the retirement benefits that they could receive under another benefit plan, the "Master Retirement Plan," which on December 31, 2001 was replaced by the "Dun & Bradstreet Corporation Retirement Account Plan." The new pension plan established as the Dun & Bradstreet Corporation Retirement Account Plan created different retirement benefits but assumed the vested obligations of the superseded Master Retirement Plan, which is at issue in this appeal.

Plaintiffs-appellants, many of whom had nearly attained the age of 55 at the time of the sale of the Receivables Management Services operations, sued Dun & Bradstreet, the Dun & Bradstreet Corporation Retirement Account Plan, and the Dun & Bradstreet Career Transition Plan in the United States District Court for the District of Connecticut, seeking individual and class action relief. They alleged that they were wrongfully denied benefits under the Dun & Bradstreet Corporation Retirement Account Plan and the Dun & Bradstreet Career Transition Plan, contrary to the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. The district court ruled against plaintiffs with respect to both benefit plans. McCarthy v. Dun & Bradstreet Corp., 372 F.Supp.2d 694 (D.Conn.2005) (McCarthy II); McCarthy v. Dun & Bradstreet Corp., No. 03CV431, 2004 WL 2743569, 2004 U.S. Dist. LEXIS 23996 (D.Conn. Nov. 30, 2004) (McCarthy I).

Plaintiffs-appellants appeal the district court's rulings on three motions in favor of defendants-appellees: (1) the district court's grant of defendants' motion to dismiss, under Fed.R.Civ.P. 12(b)(6), plaintiffs-appellants'

482 F.3d 189

claim that the "Summary Plan Description" for the Master Retirement Plan violated ERISA by inadequately disclosing the method by which a benefit of the Master Retirement Plan (the "deferred vested retirement benefit") is reduced actuarially when paid to former employees of Dun & Bradstreet, such as plaintiffs-appellants, who elected to receive payments before reaching age 65; (2) the district court's grant of defendants-appellees' summary judgment motion to deny relief on plaintiffs-appellants' claim that the Master Retirement Plan used an unreasonably high discount rate of 6.75 percent to reduce actuarially the deferred vested retirement benefit that the Master Retirement Plan paid to such former employees; and (3) the district court's denial in part of plaintiffs-appellants' motion to amend their complaint to challenge as unlawful under ERISA the mortality table that the Master Retirement Plan used in the actuarial reduction. For the reasons discussed in this opinion, we affirm all three rulings of the district court.

I. BACKGROUND

The facts underlying this appeal, as summarized below, are undisputed. Plaintiffs-appellants ceased being employees of Dun & Bradstreet on April 30, 2001, the date on which the company sold its Receivables Management Services operations. As former employees of Dun & Bradstreet who were terminated before reaching the minimum early retirement age of 55, plaintiffs-appellants no longer qualified for the early retirement benefit that was available under the Master Retirement Plan to employees retiring directly from Dun & Bradstreet. As former employees whose pension benefits had vested by the accrual of a minimum of five years of credited service with Dun & Bradstreet, but who were separated from Dun & Bradstreet before reaching the age of 55, plaintiffs-appellants remained eligible to receive a deferred vested retirement benefit under the Master Retirement Plan. Under the terms of this deferred vested retirement benefit, pension-vested former employees such as plaintiffs-appellants could receive, upon reaching the normal retirement age of 65, the full retirement benefit for which they qualified under the plan.

The Master Retirement Plan calculated the full retirement benefit according to a formula based on a participant's years of credited service and earnings with Dun & Bradstreet, with a reduction designed to compensate for Dun & Bradstreet's contribution to the participant's Social Security retirement benefit (the "Social Security Offset"). The Social Security Offset is based on a percentage of the estimated annual retirement benefit the participant would be entitled to receive at age 65 under the Social Security program.

The Master Retirement Plan provided that former employees, i.e., employees who terminated their employment before reaching the age of 55, instead of receiving their deferred vested retirement benefit upon their reaching the age of 65, could choose to receive payments as early as age 55. Under this early payment option, a former employee's deferred vested retirement benefit was actuarially reduced from the amount that would have been paid at age 65 in two respects. First, to reflect the time value of money, the Master Retirement Plan reduced the benefit by a 6.75 percent discount rate for each year prior to the age of 65 that payments began. Second, the benefit was reduced by a mortality factor to adjust actuarially for the possibility that a participant might not live to the age of 65.

Unlike former employees such as plaintiffs-appellants who were eligible only for deferred vested retirement benefits, employees

482 F.3d 190

retiring directly from Dun & Bradstreet were eligible to receive an early retirement benefit under the Master Retirement Plan. The Master Retirement Plan provided this early retirement benefit to employees who accrued ten years of credited service with Dun & Bradstreet, retired directly from Dun & Bradstreet after reaching the age of 55, and chose to receive payments before reaching the age of 65. This early retirement benefit was a more desirable benefit than the deferred vested retirement benefit as actuarially reduced under the early payment option. Under the early retirement benefit, the accrued pension was reduced by only three percent for each year that payments began before the retiree reached the age of 65.

To apprise plan participants of the benefits available under the Master Retirement Plan, Dun & Bradstreet, as required by ERISA, provided plan participants with a summary plan description ("Summary Plan Description"). The Summary Plan Description contains both a "Vesting" section that explains the deferred vested retirement benefits available to pension-vested former employees and an "Early Retirement Benefit" section that discusses the early retirement benefits available to directly-retiring Dun & Bradstreet employees. Included in the Early Retirement Benefit section is a reduction table that illustrates the percentage of accrued retirement benefits a direct retiree would receive for each year that payments begin before age 65, based on the three percent annual reduction. There is no table or discussion in the Vesting section of the Summary Plan Description that sets forth the percentage by which the actuarial reduction will reduce the benefit of a pension-vested former employee who is terminated from employment with Dun & Bradstreet before reaching the age of 55 but elects to receive payments before the age of 65.

On March 12, 2003, plaintiffs sued in district court, claiming that the provision of the Master Retirement Plan that actuarially reduced benefits of former employees who elected to receive payments prior to attaining the age of 65 could not be enforced against them because, in their view, the Summary Plan Description was inadequate under ERISA. They maintained that, as a result of the deficiencies in the Summary Plan Description, they should be held to qualify for unreduced benefits or, alternatively, for the early retirement benefits they would have received had they retired directly from Dun & Bradstreet. The district court dismissed this count of plaintiffs' complaint under...

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  • Seggos v. Next Millennium Realty, LLC, 06-CV-1133 (SJF)(AYS)
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • February 9, 2016
    ..."determine whether there is a genuine dispute as to a material fact, raising an issue for trial." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202 (2d Cir. 2007) (internal quotations and citations omitted); see Ricci v. DeStefano, 557 U.S. 557, 129 S. Ct. 2658, 2677, 174 L. Ed. 2d 490 ......
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