Amicus Curiae Brief — Mobil Oil Corp. v. Christopher

| Suorame Court, U.S.

| it.ED

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No. 91-1881 JUN 29 1962 |

IN THI FICE UF Tat iS |

Supreme Court of the {United States

OcTOBER TERM. 199]

MOBIL OIL CORPORATION, THE RETIREMENT PLAN

OF MOBIL OIL CORPORATION, and REX ADAMS.

Petitioners.

VS.

GERALD W. CHRISTOPHER, CHARLES L. PRUNTY. and

BILLY G. TURNER.

Respondents

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF AMICUS CURIAE OF THE ERISA

INDUSTRY COMMITTEE IN SUPPORT OF THE

PETITION FOR A WRIT OF CERTIORARI

MARVIN E. FRANKEL

(Counsel of Record

MICHAEL J. NASSAU

MicHAEL J. De.

KRAMER, LEVIN. NESSEN.

KAMIN & FRANKEI

919 Third Avenue

New York, New York 10022

(212) 715-9100

Counsel for Amicus Curiae

The ERISA Industry Committee

BEST AVAILABLE COPY

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TABLE OF CONTENTS

TABLE OF AUTHORITIES...................

THE INTEREST OF THE AMICUS CURIAE ...

REASONS FOR GRANTING THE WRIT.......

MONA Sn ere ee tae

|

TABLE OF AUTHORITIES

Cases:

Atlantic Cleaners & Dyers, Inc. v. United States,

moe U.S. 437 (1038)... ... cae.

Bruch v. Firestone Tire & Rubber Co., 828 F.2d

es a er

Christopher v. Mobil Oil Corp., 950 F.2d 1209

(Sth Cir. 1992), petition for cert. filed, No.

91-1881 (May 26, 1992).....................

Conkwright v. Westinghouse Electric Corp., 933

F.2d 231 (4th Cir. 1991) ....................

Firestone Tire & Rubber Co. v. Bruch, 489 U.S.

Re ee

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1

Ee a a wba dana kame

Freeman v. Jacques Orthopaedic & Joint Implant

Surgery Medical Group, Inc., 721 F.2d 654

OU ON ce ccc cccuceccccceee

Harsch v. Eisenberg, 956 F.2d 651 (7th Cir.

1992), petition for cert. filed No. 91-1835 (May

ee aah bak ik dee wake ccna,

Helvering v. Stockholms Enskilda Bank, 293 U.S.

Se els

icc ecanccnn.y

Kuntz v. Reese, 785 F.2d 1410 (9th Cir.) (per

curiam), cert. denied, 479 U.S. 916 (1986) ....

McRae v. Seafarers’ Welfare Plan, 920 F.2d 819

cu oo kb wdc wee

Mitchell v. Mobil Oil Corp., 896 F.2d 463 (10th

Cir.), cert. denied, 111 S.Ct. 252 (1990) ......

Page

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iv

Cases:

Novak v. Andersen Corp., No. 91-1957MN, 1992

U.S. App. LEXIS 6463 (8th Cir. Apr. 9, 1992) .

Patterson v. Shumate, 60 U.S.L.W. 4550 (U.S.

Se Peer ret eer reser ey eo er ere

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41

4) PUN IDES Gaye eogrt Veer gy a arr ine rn

Roberts v. Thorn Apple Valley, Inc., 784 F.Supp.

Ree Cay SN OU See hers eae ess os

Saladino v. I.L.G.W.U. National Retirement

Fund, 754 F.2d 473 (2d Cir. 1985) ...........

Sierra Club v. Clark, 755 F.2d 608 (8th Cir.

aa aR Pde Tee Woe hom a Anse oy aa eer

Sorenson v. Secretary of the Treasury, 475 U.S.

RE a metre ee rr SS eae

Stanton v. Gulf Oil Corp., 792 F.2d 432 (4th Cir.

EE ee ee eS ee re Oren are

Winchester v. Pension Committee of Michael

Reese, 942 F.2d 1190 (7th Cir. 1991) .........

Statutes and Other Authorities:

ERISA § 3(7), 29 U.S.C. § 1002(7) ...... eee

ERISA § 203(e), 29 U.S.C. § 1053(e) ...........

ERISA § 502(a)(1), 29 U.S.C. § 1132(a)(1) ......

ERISA § 205 (a) & (g), 29 U.S.C. § 1055(a) & (g)

ERISA § 510, 29 U.S.C. § 1140................

ERISA § 104(b)(4), 29 U.S.C. § 1024(b)(4) ......

Page

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to

Page

ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3) ...... 5

Joseph S. Piacentina, Employee Benefit Research

Institute Issue Brief No. 98, Preservation of

Pension Benefits (Jan. 1990) ................. 3, 4

No. 91-188]

IN THE

Supreme Court of the United States

Ocroser Term, 199]

MOBIL OIL CORPORATION, THE RETIREMENT PLAN

OF MOBIL OIL CORPORATION, and REX ADAMS,

Petitioners,

a

VS.

GERALD W. CHRISTOPHER, CHARLES L. PRUNTY, and

BILLY G. TURNER,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF AMICUS CURIAE OF THE ERISA

INDUSTRY COMMITTEE IN SUPPORT OF THE

PETITION FOR A WRIT OF CERTIORARI

With the consent of the parties, The ERISA Industry Committee

(“ERIC”) respectfully submits this brief amicus curiae in support of

the petition for writ of certiorari of Mobil Oil Corporation, the Retire-

ment Plan of Mobil Oil Corporation, and Rex Adams.

THE INTEREST OF THE AMICUS CURIAE

ERIC is a nonprofit association of more than one hundred com-

panies doing business in a wide variety of United States industries.

A list of ERIC’s members is set forth in the Appendix to this brief.

ERIC’s membership comprises a broad cross-section of major firms

that maintain employee pension and welfare plans covered under

the Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. § 1001 et seq. All of ERIC’s members do

business in more than one state, and some members maintain

pension and welfare plans that provide benefits to employees

in all fifty states. Like the plan in this case, many of the pen-

sion plans sponsored by ERIC’s members provide that employees

who retire or otherwise terminate employment may select an

immediate lump-sum distribution in lieu of such alternatives

as a lifetime monthly pension or deferred distributions.

ERIC and its members accordingly have a substantial interest

in seeking 2 sound and uniform interpretation of ERISA in cases,

such as this one, that include issues of great importance in the

application of ERISA to pension plans.

REASONS FOR GRANTING THE WRIT

Because of the breadth of ERISA’s regulation of pension and

other employee benefit plans, ERISA’s statutory definition of

who is a “participant” with standing to sue in federal court to

remedy alleged violations is of fundamental importance. The

decision of the Fifth Circuit on this issue in this case is in con-

flict with the Tenth Circuit’s decision in Mitchell v. Mobil Oil

Corp., 896 F.2d 463 (10th Cir.), cert. denied, 111 S. Ct. 252

(1990), and appears to conflict with both the Court’s ruling in

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), and

decisions in other Circuits following Firestone. In Mitchell,

which involved the same nucleus of operative facts as this case,

a former employee who had received all his accrued plan benefits

was held not to be a “participant” with standing. By contrast,

the Fifth Circuit in this case has held that employees who have

similarly received all their accrued benefits may establish stand-

ing under certain circumstances:

' In addition to Mitchell, the Fifth Circuit’s decision is in direct conflict with

decisions of the Fourth Circuit, Stanton v. Gulf Oil Corp., 792 F.2d 432, 435

(4th Cir. 1986) (rejecting “but for” test for standing), and the Ninth Circuit,

Freeman v. Jacques Orthopaedic & Joint Implant Surgery Medical Group,

Inc., 721 F.2d 654, 655-56 (9th Cir. 1983) (same), and conflicts with the reason-

ing of the Seventh Circuit in Winchester v. Pension Committee of Michael

Reese, 942 F.2d 1190, 1192-93 (7th Cir. 1991) (plaintiff not a “participant” by

virtue of separate discrimination suit seeking reinstatement).

distributions, can know whether the distribution will end the

employee's status as a plan “participant” to whom the employer

and plan have continuing obligations under ERISA.

An employer must weigh the value of a benefit plan to the

employees against the costs of establishing and maintaining it,

including potential legal liability. Before ERISA, many plans

were subject to different — and often conflicting — state statutes

and regulations. The inherent difficulties and uncertainties acted

as disincentives for employers to provide the best forms of

employee benefits. See Fort Halifax Packing Co. v. Coyne, 482

U.S. 1, 9-11 (1987).

‘

ERISA resolved this problem by establishing uniform nation-

wide standards. In addition, Congress included a broad pre-

emption provision that has been interpreted consistently in ac-

cordance with this purpose.

* Joseph S. Piacentina, Employee Benefit Research Institute Issue Brief No.

It is ... clear that ERISA’s pre-emption provision

was prompted by recognition that employers

establishing and maintaining employee benefit plans

are faced with the task of coordinating complex ad-

ministrative activities. A patchwork scheme of regula-

tion would introduce considerable inefficiencies in

benefit plan operation, which might lead those

employers with existing plans to reduce benefits, and

these without such plans to refrain from adopting

them.

. Fort Halifax, 482 U.S. at 11. This Court “ha[s] not hesitated to

enforce ERISA’s pre-emption provision where state law created

the prospect that an employer’s administrative scheme would

be subject to conflicting requirements.” Jd. at 10. The conflict

resulting from the Fifth Circuit’s decision similarly thwarts Con-

gressional intent by restoring inconsistency and by adding vast,

unquantifiable potential grounds for liability for damages and

litigation costs.

Roughly a million or more employees terminate employment

each year and receive all the plan benefits to which they are

entitled.’ Some of them may have grievances they wish to pur-

sue through a claim for wrongful discharge. Under the Fifth

Circuit’s holding in this case, these employees may now have

standing to bring their claims in federal courts in the Fifth Cir-

cuit, while they do not have standing to do so in other Circuits.

It is essential for employers and employees alike that the law

on such a fundamental issue be consistent in all the Circuits.

2. The issue here — whether former employees who have re-

ceived all the accrued plan benefits to which they are entitled

have standing under ERISA — has important implications for

the volume of litigation in the federal courts. Under the Fifth

Circuit’s standard, almost any employee who has participated

in an ERISA plan and received all his or her accrued plan

* See Joseph S. Piacentina, supra, at 15, 19 (Jan. 1990) (3.4 million employees

received lump sum distributions between 1985 and May 1988).

benefits can now convert a garden-variety state-law cause of ac-

tion for wrongful discharge into an ERISA case by including

a claim for violation of ERISA § 510, 29 U.S.C. § 1140. This

claim can then be filed in federal district court, creating new

possibilities for forum-shopping. The numerous multi-state

plans, including those of ERIC’s members, are particular-

ly vulnerable in this regard. See Patterson v. Shumate, 60

U.S.L.W. 4550, 4553 (U.S. June 15, 1992) (an “important policy

underlying ERISA [is] uniform national treatment of pension

benefits.”).*

3. The Fifth Circuit’s decision is wrong on the merits.

Firestone resolved the question whether former employees who

claimed they were improperly denied severance benefits were

nonetheless “participants” entitled to receive plan information

pursuant to ERISA § 104(b)(4), 29 U.S.C. § 1024(b)(4), one of

ERISA’s disclosure provisions. The Court found that the Third

Circuit had strayed too far from the language of ERISA § 3(7),

29 U.S.C § 1002(7), in holding that anyone who “claims to be

a participant or beneficiary” is entitled to such disclosure, Bruch

v. Firestone Tire & Rubber Co., 828 F.2d 134, 152 (3d Cir. 1987).

Instead, the Court held that

the term “participant” is naturally read to mean either

“employees in, or reasonably expected to be in, cur-

rently covered employment,” Saladino v. I.L.G.W.U.

National Retirement Fund, 754 F.2d 473, 476 (2d

Cir. 1985), or former employees who “have ... a

*

* Under the Fifth Circuit's holding former employees who have received all

their accrued benefits can now challenge the employer's conduct in funding

the plan or investing plan assets by alleging a wrongful discharge or other

discriminatory action in violation of § 510 of ERISA, even though these former

employees are not affected by funding or investment decisions. See ERISA

§ 502(a)(3), 29 U.S.C. § 1132(a)(3) (authorizing “participants” to “enforce any

provisions of” ERISA Title I, including funding and fiduciary requirements).

While it may be appropriate for former employees who have not yet received

all their vested benefits to have standing to enforce ERISA’s funding and

fiduciary requirements, those who have already received all their benefits have

no legitimate interest in maintaining such actions.

reasonable expectation of returning to covered employ-

ment” or who have “a colorable claim” to vested

benefits, Kuntz v. Reese, 785 F.2d 1410, 1411 (9th Cir.)

(per curiam), cert. denied, 479 U.S. 916 (1986).

Firestone, 489 U.S. at 117.

ERISA allows civil suits only “by a participant or beneficiary.”

ERISA § 502(a)(1), 29 U.S.C. § 1132(a)(1). To find possible stand-

ing for the plaintiffs in this case, the Fifth Circuit therefore found

it necessary to hold that the term “participant,” which has only

a single statutory definition, actually has different meanings for

different parts of ERISA, and that Firestone defined “partici-

pant” for only one purpose. Christopher v. Mobil Oil Corp.,

950 F.2d 1209, 1221 (5th Cir. 1992), petition for cert. filed, No.

91-1881 (May 26, 1992). But § 510, which the Fifth Circuit in-

terpreted, expressly provides that “[t]he provisions of section 502”

—which the Court applied in Firestone, 489 U.S. at 116-118 —

“shall be applicable in the enforcement of this section.” The Fifth

Circuit erred in ignoring this Congressional mandate.

While the Fifth Circuit apparently believed that its position

was necessary to avoid a “gap” in the enforceability of § 510,

there is no such gap.‘ As the Court made clear in /ngersoll-Rand

Co. v. McClendon, 111 S. Ct. 478, 486 (1990), the “prototypical”

§ 510 case is one where the plaintiff has been fired before he

or she would meet the final requirement for vesting in benefits

already accrued. In-such-a case, the plaintiff meets the Firestone

standard because there is a colorable claim to those accrued

benefits.°

‘ If there were any enforceability gap it would of course be the province of

Congress, not the courts, to address the situation. See Pilot Life Ins. Co. v.

Dedeaux, 481 U.S. 41, 54 (1987) (ERISA creates a “comprehensive civil en-

forcement scheme that represents a careful balancing” and provides “ ‘strong

evidence that Congress did not intend to authorize other remedies that it simply

forgot to incorporate expressly. ”) (citation omitted).

* By contrast, the only claim former employees who have already vested and

received all their accrued benefits could bring under § 510 would be

(Footnote continued)

In finding that “participant” has multiple and inherently in-

consistent meanings within ERISA, the Fifth Circuit’s holding

also violates the “normal rule of statutory construction that ‘iden-

tical words used in different parts of the same act are intended

to have the same meaning. ” Sorenson v. Secretary of the

Treasury, 475 U.S. 851, 860 (1986) (quoting Helvering v.

Stockholms Enskilda Bank, 293 U.S. 84, 87 (1934) (quoting

Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427,

433 (1932))); see also Patterson, 60 U.S.L.W. at 4553-54, (Scalia,

J., concurring) (“consistency of usage within the same statute

is to be presumed”). This rule is all the more forceful when the

word in question has been given a single statutory definition.

See, e.g., Sierra Club v. Clark, 755 F.2d 608, 613-14 (8th Cir.

1985) (defined term “conservation” must have same meaning

throughout Endangered Species Act).

The Court of Appeals apparently believed that its departure

from the holding in Firestone was called for by the subsequent

decision in McClendon, 111 S. Ct. at 486. McClendon, however,

was an action under ERISA § 510 by an individual who alleg-

ed that he had not received all his accrued plan benefits; it does

not provide any support for authorizing actions by former

employees who have received all their accrued plan benefits.’

premised on the argument that they were terminated to prevent them from

continuing to earn additional vested benefits. Such a claim is essentially in-

distinguishable from a claim that an employee was “wrongfully” terminated

for the purpose of saving the employee's salary — a perfectly legitimate ground

for making an employment decision.

While several Courts of Appeals have indicated that under some circumstances

such a claim might be brought, e.g., Conkwright v. Westinghouse Electric

Corp., 933 F.2d 231, 236-37 (4th Cir. 1991) (stating § 510 provides such a cause

of action, but plaintiff failed to meet burden of showing employer's intent),

we respectfully submit that Congress never intended to create such an extraor-

dinary cause of action, which would open the gates of the federal courts to

any discharged employee who happened, at some point, to have had some

relationship to an ERISA plan. It is therefore not surprising that Congress

did not provide standing for former employees to bring such claims in federal

court.

’ The suggestion that McClendon expanded ERISA’s remedial scheme by allow-

ing suits for damages has been rejected by every appellate court that has

(Footnote continued)

CONCLUSION

ERIC on behalf of its members respectfully urges that the

petition for writ of certiorari should be granted.

Respectfully submitted,

MarVIN E. FRANKEL

(Counsel of Record)

MICHAEL J. NAssAU

MICHAEL J. DELL

KRAMER, LEvIN, NESSEN,

KAMIN & FRANKEL

919 Third Avenue

New York, New York 10022

Attorneys for Amicus Curiae

The ERISA Industry Committee

June 1992

considered it. Novak v. Andersen Corp., No. 91-1957MN, 1992 U.S. App. LEXIS

6463 (8th Cir. Apr. 9, 1992); Harsch v. Eisenberg, 956 F.2d 651, 659-60 (7th

Cir. 1992), petition for cert. filed, No. 91-1835 (May ll, 1992); McRae v.

Seafarers’ Welfare Plan, 920 F.2d 819, 821 n.7 (5th Cir. 1991); accord Roberts

v. Thorn Apple Valley. Inc., 784 F. Supp. 1538, 1541 (D. Utah 1992).

APPENDIX

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THE ERISA INDUSTRY COMMITTEE

MEMBER LIST

June 1992

Aetna Life & Casualty

Alexander & Alexander Inc.

Allied-Signal Inc.

Aluminum Company of America

AMAX Inc.

American Express Co.

American Home Products Corp.

American International Group

American National Can Co.

American Telephone & Telegraph Co.

Ameritech

Amoco Corp.

Ashland Oil Inc.

Atlantic Richfield Co.

Ball Corp.

Bankers Trust Co.

Becton Dickinson & Co.

Bell Atlantic Corp.

Bell Communications Research

BellSouth Corp.

Bethlehem Steel Corp.

The Boeing Co.

BP America Inc.

Bristol-Myers Squibb Co.

George B. Buck Consulting Actuaries

Caterpillar Inc.

Champion International Corp.

Chase Manhattan Bank N.A.

The Chevron Companies

Chrysler Corp.

CIBA-GEIGY Corp.

CIGNA Corp.

Citibank N.A.

Coopers & Lybrand

Dana Corp.

Deere & Co.

Delta Air Lines Inc.

Digital Equipment Corp.

Dow Chemical Co.

Dresser Industries Inc.

Du Pont Co.

Eastman Kodak Co.

Eli Lilly & Co.

Enron Corp.

Equitable Life Assurance Society of the U.S.

Exxon Corp.

Federated Department Stores Inc.

Ford Motor Co.

General Electric Co.

General Motors Corp.

W. R. Grace & Co.

Grand Metropolitan PLC

Grumman Corp.

GTE Corp.

Hazlehurst & Associates

The Hearst Corp.

Hewitt Associates

Hewlett-Packard Co.

Honeywell Inc.

IBM Corp.

ICI Americas Inc.

International Paper

ITT Corp.

John Hancock Mutual Life Ins. Co.

Johnson & Johnson

The LTV Corp.

A-3

Manufacturers Hanover Trust Co.

The Mead Corp.

William M. Mercer Inc.

Merck & Co. Inc.

Metropolitan Life Insurance Co.

Minnesota Mining & Manufacturing Co.

Mobil Corp.

J. P. Morgan & Co. Inc.

Motorola Inc.

Mutual of New York

Navistar International Corp.

NYNEX Corp.

Occidental Petroleum Corp.

Olin Corp.

Pacific Gas & Electric Co.

Pacific Telesis Group

J. C. Penney Co. Inc.

Pennzoil Co.

Pfizer Inc.

Philip Morris Inc.

PPG Industries Inc.

Price Waterhouse

The Procter & Gamble Co.

The Prudential Insurance Co.

Ralston Purina Co.

RJR Nabisco Inc.

Rockwell International Corp.

Schering-Plough Corp.

Scott Paper Co.

Sears Roebuck & Co.

Shell Oil Co.

Siemens Corp.

The Southland Corp.

Supermarkets General Corp.

A-4

Tenneco Inc.

Texaco Inc.

Texas Instruments Inc.

Textron Inc.

Time Warner Inc.

Towers Perrin Forster & Crosby

The Travelers

TRW Inc.

Unilever United States Inc.

Union Camp Corp.

Union Carbide Corp.

United Technologies Corp.

Unocal Corp.

U S West Inc.

USX Corp.

Westvaco Corp.

Whirlpool Corp.

The Wyatt Co.