Miller v. Rite Aid Corp.

• Decision Date: 30 June 2003
• Docket Number: No. 02-2464.,02-2464.
• Citation: 334 F.3d 335
• Parties: Anthony MILLER, Appellant v. RITE AID CORPORATION.
• Court: U.S. Court of Appeals — Third Circuit

334 F.3d 335

Anthony MILLER, Appellant v. RITE AID CORPORATION.

No. 02-2464.

United States Court of Appeals, Third Circuit.

Argued April 3, 2003.

Filed June 30, 2003.

COPYRIGHT MATERIAL OMITTED

Gerald S. Berkowitz, (argued), Malvern, Robert A. Klein, Conrad, O'Brien, Gellman & Rohn, Philadelphia, PA, for Appellant.

A. James Johnston, Jonathan B. Spraque, (argued), Post & Schell, P.C., Philadelphia, PA, for Appellee.

Before MCKEE, SMITH, Circuit Judges, and HOCHBERG, District Judge.^*

OPINION OF THE COURT

SMITH, Circuit Judge.

Anthony Miller, formerly an executive for the Rite Aid Corporation ("Rite Aid"), appeals the District Court's decision, after a non-jury trial, that Miller lacked standing to bring a claim against Rite Aid pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Because Miller was never laid off, the District Court found that Miller: (1) is not, and never was, eligible to receive the severance benefits he sought through his civil suit; and (2) is no longer employed by Rite Aid and therefore has no prospect of becoming eligible to receive those severance benefits. Accordingly, the District Court concluded that Miller was not a "participant" authorized to bring a civil action pursuant to § 502(a)(1) of ERISA. We agree, in substance, with the District Court, but will remand the matter to the District Court to enter an order consistent with Miller's lack of standing.

I.

In September of 1999, the Rite Aid Corporation began experiencing financial difficulties. As a result, Rite Aid began to lay off employees at its corporate headquarters. In the reshuffling of personnel which accompanied these lay offs, Miller, then a senior executive at Rite Aid, became the Corporate Director of Store Planning and began reporting directly to Mark White, Rite Aid's Vice-President of Store Development. Later that fall, a new management team decided to further restructure Rite Aid's operations. Thus, in March of 2000, White, then Miller's boss and friend, submitted to Rite Aid's senior management a proposal to restructure his department. As part of the restructuring, the plan included a list of additional employees that White proposed to lay off. The plan provided that laid off employees would receive a severance package. That initial plan did not include Miller.

Later that March, Miller discussed with White the possibility of being added to the list of employees whose severances White would be proposing to management. Miller had begun negotiations to join a company in Arizona called U.S. GlobalNet, an internet start-up which was developing certain software products. Pursuant to Miller's request, White added Miller to the list of employees proposed to be severed. Senior Rite Aid management gave final approval to White's restructuring plan in late May of 2000. As part of that plan, White had complete discretion "as to the timing and order of the lay off of each individual whose severance was approved by senior Rite Aid management."

On June 1, 2000, Miller and GlobalNet orally agreed to employment terms, later entering into a written agreement at the end of that month. On June 6, White told Miller that management had agreed to include Miller in the restructuring plan and informed coworkers that Miller would be leaving. White did not, however, provide Miller with any official severance date. White did begin to otherwise implement the restructuring plan, and some, but not all, of the employees listed in the plan were, in fact, laid off that first week in June.

The next day, June 7, 2000, Larry Haller, the Director of Retail Facilities, who reported directly to Miller, tendered his written resignation effective June 23, 2000. Although White and Miller expected this resignation eventually, it occurred earlier than both anticipated. Thus, in response to the short-staffing that Haller's resignation caused White in Miller's area, White had to suspend plans to sever Miller. When White explained to Miller what had happened, Miller "volunteered" to stay on at Rite Aid to manage Rite Aid's facilities department during the restructuring period. White did not provide Miller with any affirmative date or estimate as to when he might be severed. Nonetheless, Miller contacted his new prospective employer, GlobalNet, and arranged to start with that company on July 31, 2000.

From June 9, 2000 through July 2, 2000, Miller and White exchanged e-mails regarding Miller's departure and his entitlement to severance. On June 14, 2000, in response to an e-mail from Miller, White told Miller that he would receive his severance package when he was laid off. However, because of staffing shortages, White explained that he could neither afford to lay Miller off at that time nor commit to an affirmative date as to when he could let Miller go. White wrote, "As soon as I can let you go, I will. And you will get a handsome package to take with you (assuming you stay around long enough to get it of course)!"

On June 26, 2000, Miller asserted to White in an e-mail that his "final date is July 28th and my 9 months of severance needs to start from there." On July 2, White responded to Miller that he could not guarantee Miller a specific severance date, nor would he agree to a severance date just because Miller had unilaterally accepted another job. White wrote:

The idea that being laid off and getting a severance package is somehow a "right" that you have is preposterous. I have been telling you all along that your employment is still active and that I don't know when that situation will change. If you choose to take your family somewhere other than Harrisburg, it is your choice. If you leave on July 28, it will be because you resigned not because you were being laid off. You will leave without a severance package.

On August 7, 2000, Miller, still working for Rite Aid, sent White an e-mail asking, "Will I get a package if I stay until the end of August — whether there is a replacement or not?" White responded that Rite Aid only gives severance packages when an employee is laid off. In Miller's case, White stated that it was not only unnecessary to lay him off, it was "virtually impossible" given the staffing shortages in the department.

Finally, on August 18, 2000, Miller resigned from Rite Aid, effective immediately. The District Court found that "[a]t the time Miller resigned, he was aware that his severance benefits would not vest until his employment at Rite Aid was severed." The District Court found that "Rite Aid never severed Miller's employment," further noting that "[t]here are employees listed on the severance list approved in May 2000 that continue to be employed by Rite Aid."

On September 29, 2000, Miller filed a two-count complaint against Rite Aid in the United States District Court for the Eastern District of Pennsylvania. Miller asserted claims to the severance benefits he contends Rite Aid promised him based on state law breach of contract and wrongful denial of benefits pursuant to ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). In seeking summary judgment, Rite Aid admitted that its severance plan was a welfare benefit plan subject to the provisions of ERISA. Therefore, Rite Aid contended that ERISA would preempt Miller's contract claim. Nonetheless, Rite Aid also argued that because Miller was not an ERISA "participant," he had no standing to bring an ERISA claim. In opposition to summary judgment, Miller contended that he was an ERISA "participant," and therefore had standing to bring that claim; however, Miller agreed that his state law claim was preempted. On that basis, the District Court granted summary judgment to Rite Aid on the state law contract claim, but held the ERISA claim over for trial.

After a non-jury trial on the "merits" of the ERISA claim, the District Court concluded that Miller was not a "participant," as defined by 29 U.S.C. § 1002(7); therefore, "Miller lacks standing to bring an ERISA action for unpaid benefits under the severance plan." The District Court issued an Order of Judgment in favor of Rite Aid. Miller subsequently filed a notice of appeal with respect to "the final order entered in favor of the Defendant on May 21, 2002," but, notwithstanding the District Court's judgment against him on the ERISA claim, did not appeal the earlier grant of summary judgment on his state law contract claim.

The District Court asserted jurisdiction over this case pursuant to 28 U.S.C. §§ 1331, 1332(a)(1), and 1367. This Court has jurisdiction over the present appeal pursuant to 28 U.S.C. § 1291. When a district court conducts a non-jury trial, we "review the District Court's findings of facts for clear error. Application of legal precepts to historical facts receive plenary review." In re Unisys Sav. Plan Litig., 173 F.3d 145, 149 (3d Cir.1999). However, "[i]t is not for us to pass upon the numerous factual and legal issues as though we were trying the cases [d]e novo. `It is not enough to reverse the District Court that we might have appraised the facts somewhat differently. If there is warrant for the action of the District Court, our task on review is at an end.'" Matter of Penn Cent. Transp. Co., 596 F.2d 1127, 1140 (3d Cir.1979) (quoting Group of Inst'l Inv. v. Chicago, M., St. P. & P.R. Co., 318 U.S. 523, 564, 63 S.Ct. 727, 87 L.Ed. 959 (1943)). We have plenary review over questions of standing. AT & T Communications of New Jersey, Inc. v. Verizon New Jersey, Inc., 270 F.3d 162, 168 (3d Cir.2001).

II.

In granting judgment for Rite Aid, the District Court concluded that Miller lacked "standing" to bring an ERISA claim because he did not meet the definition of an ERISA "participant," as defined by 29 U.S.C. § 1002(7). At oral argument, the parties conceded that this case presents no issue of traditional Article III standing, U.S. Const. art. III, § 2 ("Cases" and "Controversies"), a contention with which we agree. However, the "question of...