Pickering v. USX Corp.

• Decision Date: 03 November 1992
• Docket Number: Civ. No. 87-C-838J,88-C-763J and 91-C-636J.
• Citation: 809 F. Supp. 1501
• Parties: Tony PICKERING, et al., Plaintiffs, v. USX CORPORATION, Defendant. Lynn A. BARNEY, et al., Plaintiffs, v. USX CORPORATION, Defendant. Reldon C. KENNEY, et al., Plaintiffs, v. USX CORPORATION, Defendant.
• Court: U.S. District Court — District of Utah

809 F. Supp. 1501

Tony PICKERING, et al., Plaintiffs, v. USX CORPORATION, Defendant.

Lynn A. BARNEY, et al., Plaintiffs, v. USX CORPORATION, Defendant.

Reldon C. KENNEY, et al., Plaintiffs, v. USX CORPORATION, Defendant.

Civ. Nos. 87-C-838J, 88-C-763J and 91-C-636J.

United States District Court, D. Utah, C.D.

November 3, 1992.

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Lynn C. Harris, Provo, UT, Edward Moriarity, Robert P. Schuster, Gerry Spence, Spence, Moriarity & Schuster, Jackson, WY, Allen K. Young, Young & Kester, Springville, UT, and Jonah Orlofsky, Plotkin & Jacobs, Chicago, IL, for plaintiffs.

Dawne S. Hickton, D.B. King, Pittsburgh, PA, David A. Anderson, Michael L. Larsen, Gordon L. Roberts, Keith E. Taylor, Parsons, Behld & Latimer, Salt Lake City, UT, and Peter Post, Reed, Smith, Shaw & McClay, Pittsburgh, PA, for defendant.

MEMORANDUM OPINION AND ORDER

JENKINS, Chief Judge.

                                           TABLE OF CONTENTS
                I. INTRODUCTION
                A. Jurisdiction .......................................................1509
                B. Nature of the Claims ...............................................1509
                C. Parties ............................................................1510
                    1. Defendant ......................................................1510
                    2. Plaintiffs .....................................................1511
                       a. Layoffs .....................................................1511
                

                       b. Actives .....................................................1511
                       c. Managements .................................................1511
                       d. Retireds ....................................................1512
                       e. LaRoches ....................................................1512
                   D. Trial ...........................................................1512
                II. CASE SUMMARY
                   A. Pre-Work Stoppage ...............................................1513
                   B. LaRoche Sale ....................................................1513
                   C. Work Stoppage ...................................................1513
                   D. Geneva Closure ..................................................1514
                   E. June Agreement and Sale to BM & T ...............................1514
                   F. Affirmative Defenses ............................................1514
                III. GENERAL FACTUAL BACKGROUND
                   A. Geneva ..........................................................1514
                   B. United Steel Workers of America .................................1515
                   C. USX Benefit Plans ...............................................1515
                   D. Rule of 65 and 70/80 Retirement Benefits ........................1516
                   E. USX's Recent Restructurings .....................................1517
                IV. STATUS OF GENEVA ON DECEMBER 31, 1986
                   A. Introduction ....................................................1518
                   B. Facts ...........................................................1519
                       1. USX-POSCO Joint Venture .....................................1519
                       2. June and November 1985 Studies ..............................1520
                       3. 1986 Discussions as to the Sale of Geneva ...................1521
                       4. Work Stoppage ...............................................1521
                       5. Facility Rationalization and Related Studies ................1522
                       6. Steel Division Business Plan ................................1522
                       7. USX Board of Directors Authorization Request ................1522
                       8. Accounting Treatment of the Restructuring ...................1523
                       9. Settlement of the 1986 Labor Negotiations ...................1524
                   C. Analysis ........................................................1524
                       1. "Decision" Under Section 16(A) Requires Express Board Action.1525
                       2. "Decision" Under Section 16(A) Without Express Board Action..1527
                          a. Plaintiffs' Shutdown Theory ..............................1528
                          b. Analysis..................................................1528
                V. SECTION 510 OF ERISA
                   A. Introduction ....................................................1531
                   B. Layoffs .........................................................1534
                       1. Introduction ................................................1534
                       2. Facts .......................................................1534
                       3. Analysis ....................................................1535
                          a. Section 510 of ERISA......................................1535
                              1. Prima Facie Case .....................................1536
                              2. Nondiscriminatory Reasons.............................1537
                              3. Evidence of Pretext ..................................1538
                          b. The Statute of Limitations ...............................1540
                   C. Retireds ........................................................1541
                       1. Introduction ................................................1541
                       2. Facts .......................................................1541
                       3. Analysis ....................................................1543
                          a. Lump-Sum Retirement Benefits .............................1543
                          b. Retirement Medical Benefits ..............................1544
                          c. Misrepresentations .......................................1545
                   D. Actives and Managements/Indefinite Idling .......................1545
                      1. Introduction .................................................1545
                      2. Facts ........................................................1546
                      3. Analysis .....................................................1547
                         a. Prima Facie Case ..........................................1548
                         b. Nondiscriminatory Reasons .................................1550
                

                         c. Evidence of Pretext ........................................1550
                   E. Actives and Managements/June Agreement and Sale ..................1552
                      1. Facts .........................................................1553
                      2. Analysis ......................................................1555
                         a. Prima Facie Case............................................1556
                VI. SECTION 204(g) OF ERISA
                   A. Introduction .....................................................1559
                   B. Analysis .........................................................1559
                VII. SECTION 204(h) OF ERISA
                   A. Introduction .....................................................1560
                       1. June Agreement ...............................................1561
                       2. Proper Notice and the June Agreement .........................1563
                       3. LaRoche Sales Agreement ......................................1564
                       4. Proper Notice and the LaRoche Sales Agreement ................1564
                   B. Effect of USX's Failure to Give Notice Under Section 204(h).......1564
                VIII. SECTION 404(a) OF ERISA
                   A. Introduction .....................................................1566
                   B. USX as a Fiduciary ...............................................1567
                   C. Fiduciary Duties .................................................1568
                IX. CONCLUSION ..............................................1569
                

I. INTRODUCTION

A. Jurisdiction

Jurisdiction of this matter, brought under section 502(a), 29 U.S.C. § 1132(a) (1988), of the Employee Retirement Income Security Act of 1974 ("ERISA"), is footed on subsection (e) of section 502, 29 U.S.C. § 1132(e).¹ Because defendant, a Delaware corporation, was doing business in the State of Utah during the time of the acts complained of in this lawsuit, venue is proper under 28 U.S.C. § 1391(c) (1990 & Supp.1992).

The action was tried to the court without jury pursuant to section 502(a)(3) of ERISA, which empowers benefit plan participants or beneficiaries "to obtain ... appropriate equitable relief...." 29 U.S.C. § 1132(a)(3). Because section 502(a)(3) provides only equitable relief, there is no right to a jury trial. See Cox v. Keystone Carbon Co., 861 F.2d 390, 393 (3d Cir.1988) (citing Great American Fed. Sav. and Loan Assoc. v. Novotny, 442 U.S. 366, 375, 99 S.Ct. 2345, 2350, 60 L.Ed.2d 957 (1979)).

B. Nature of the Claims

Plaintiffs assert five general claims for relief. First, plaintiffs allege that defendant USX Corporation ("USX") interfered with plaintiffs' employment, thereby depriving them of identified and vested employee benefits, and did so in violation of section 510 of ERISA, 29 U.S.C. § 1140 (1988). Section 510 provides in pertinent part:

It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, ... or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan....

Id.

Second, plaintiffs assert the USX decreased plaintiffs' accrued benefits by amending a defined benefit plan without obtaining appropriate approval for such an amendment in violation of section 204(g) of ERISA, 29 U.S.C. § 1054(g) (1988). Section 204(g) provides in pertinent part: "The accrued benefit of a participant under a plan may not be decreased by an amendment of the plan, other than an amendment described in section 1082(c)(8) ... of this title...." Id.

Third, plaintiffs assert that USX significantly reduced the rate of plaintiffs' future benefit accrual by amending a defined benefit plan without giving appropriate notice in violation of section 204(h) of ERISA, 29 U.S.C. § 1054(h) (1990). Section 204(h) provides in pertinent part:

A defined benefit plan may not be amended so as to provide for a significant reduction in the rate of future benefit accrual, unless, after adoption of the plan amendment and not less than 15 days before the effective date of the plan amendment, the plan administrator provides a written notice, setting forth the plan amendment and its effective

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