# Opposition Brief — Mobil Oil Corp. v. Christopher > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0705%3A4 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1992 - **Citation:** 506 U.S. 820 ## Text No. 91-1881 IN THE * {HE Cirp, | Supreme Court of the Wuited States ine OCTOBER TERM, 1992 MoBIL OIL CORPORATION, THE RETIREMENT PLAN OF MosiL OIL CORPORATION, and REX ADAMS, Petitioners, v. GERALD W. CHRISTOPHER, CHARLES L. PRUNTY, and BILLY G. TURNER, Re spond NTS. On Petition for Writ of Certiorari to the United States Court of Appeals for the Fifth Circuit RESPONDENTS’ BRIEF IN OPPOSITION WILLIAM E. TOWNSLEY RODNEY R. PATULA TOWNSLEY, HANKS & (Counsel of Record TOWNSLEY, P.C. [ELIZABETH C. MORAN 3550 Fannin Street MICHAEL G. BOHN Beaumont, Texas 77701 BRADFORD J. LAM (409) 832-3453 PRYOR, CARNEY & JOHNSON A Professional Corporation 6200 South Svracuse Way, #400 Englewood, Colorado 80111 (303) 771-6200 July 27, 1992 Counsel for Respondents WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 COUNTERSTATEMENT OF QUESTION PRESENTED Was the Court of Appeals correct in holding that for- mer employees may establish standing to sue for being involuntarily discharged in violation of $510 of the Employee Retirement Income Security Act of 1974 (“RISA”) by proving, not merely alleging, that but for the violation of § 510, they would be current employees with a reasonable expectation of receiving benefits? (i) li LIST OF PARTIES Petitioners: (Defendants-Appellees below) : Mobil Oil Corporation, a subsidiary of Mobil Corpor- ation (a publicly held corporation). A list of Mobil Oil Corporation’s non-wholly-owned subsidiaries has been included in the Appendix to their petition [46a]. Retirement Plan of Mobil Oil Corporation Rex D. Adams (a Vice President of Mobil Corporation) Respondents: ( Plaintiffs-Appellants below) : Gerald W. Christopher Charles L. Prunty Billy G. Turner TABLE OF CONTENTS Page QUESTIONS PRESENTED .__. ee Bratton o- i a ccs hacvantucawennasvsesevsunpanebunvacnds il MI I RR I ose nc cnncncsncsnsnsanonaneccoceces V COUNTERSTATEMENT OF THE CASE ....... 1 I. COUNTERSTATEMENT OF THE FACTS...... 2 A. The July 1984 Plan Amendment ...._...__.. 2 B. The Six-Month “Window” Retirement Pro- Teen ee ai cnCecasebnloss C. The Seiten 1984 Plan Amendment . 4 D. Mobil’s Misrepresentations and Conceal- ee ae ls as ogucnseveasaabsaabenion 5 E. Mobil’s Violations of ERISA § 510.0000... 6 II. COUNTERSTATEMENT OF PROCEED- a cas is cai cuthnseandivanans 7 REASONS FOR DENYING THE WRIT..................... ‘ 8 I. THE CONTROLLING STATUTORY PROVI- EE RE DD ea OE 9 II. THE FIFTH CIRCUIT’S DECISION IS CON- SISTENT WITH FIRESTONE AND THE ONLY INTERPRETATION OF FIRESTONE CONSISTENT WITH SECTION 510 Bs 11 Ill. THE FIFTH CIRCUIT’S OPINION DOES NOT CREATE STANDING BY A MERE ALLEGATION OR CLAIM OF STANDING... 13 IV. THE FIFTH CIRCUIT’S OPINION DOES NOT ALTER THE STATUTORY DEFINI- TION OF “PARTICIPANT,” BUT DOES REC- OGNIZE THAT THE PROOF REQUIRED TO MEET THE DEFINITION DIFFERS DE- PENDING UPON THE NATURE OF THE ERISA CLAIM ASSERTED ........................ an 15 (iil) a ee iv TABLE OF CONTENTS—Continued Page V. THE FIFTH CIRCUIT’S DECISION IS NOT INCONSISTENT WITH PRECEDENT IN OTHER CIRCUITS 20 VI. THE CIRCUIT COURTS HAVE ONLY RE- CENTLY BEGUN TO ADDRESS THE ISSUE PRESENTED HERE fate 22 Vil. THE FIFTH CIRCUIT’S OPINION DOES NOT CREATE “UNCERTAINTY” OR “IN- CONSISTENCY” IN THE ADMINISTRA- TION OF ERISA PLANS 24 MIN a cok cieies we ale ndce accussAs nur sewua der iacebearaweasaay 26 APPENDIX Christopher v. Mobil Oil Corp., 950 F.2d 1209 (5th Rees crs. h Fh ccna dons paapcealiness eka aceastaiains la Order Granting Motion for Judgment on the Pleadings and Motion to Dismiss, Christopher v. Mobil Oil Corp., Civ. No. B-89-0653-CA (E.D. Tex. Tt ER ecsaer it chnncmaaandat cee Order Granting Motion for Summary Judgment, Christopher v. Mobil Oil Corp., Civ. No. B-89- 0653-CA (E.D. Tex. June 22, 1990) ..........00000000000... 28a Order Denying Appellants’ Petition for Rehearing, Christopher v. Mobil Oil Corp., No. 90-4562 (5th os gree ees Re tee 30a Reporter’s Transcript of Order Denying Motion for Summary Judgment, Raymond v. Mobil Oil Corp., No. 88-Z-2112 (United States District Court, District of Colorado, June 25, 1992) ........... 32a ERISA § 3(7), 29 U.S.C. § 1002 (7) ................2....2--- 38a ERISA § 602, 29 U.S.C. § 1132 .................... lei-nertinpans 38a ERISA § 610, 29 U.S.C. § 1260... sc ccccccccccrensesnese 45a v TABLE OF AUTHORITIES CASES Page Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) 19 Amalgamated Clothing & Textile Workers Union, AFL-CIO v. Murdock, 861 F.2d 1406 (9th Cir. 1988) 15 Barrett Computer Services, Inc. v. PDA, Inc., 884 F.2d 214 (5th Cir. 1989) in 14 Berger v. Edgewater Steel Co., 911 F.2d 911 (3rd Cir. 1990), cert. denied, 111 S. Ct. 1310 (1991) 18, 22 Bittner v. Sadoff & Rudoy, 490 F. Supp. 534 (E.D. Wis. 1980) . 18, 19, 20 Boren v. Southwestern Bell Telephone Co., Ince., 933 F.2d 891 (10th Cir. 1991) 15 Buchanan v. Foster Elec. Co., 1989 WL 157340 (N.D. Ill. 1989) 15 Calhoun v. Falstaff Brewing Corp., 478 F. Supp. 357 (E.D. Mo. 1979) 18 Christopher v. Mobil Oil Corp., 950 F. 2d 1209 (5th Cir. 1992) ates passim Conkwright v. Westinghouse Elec. Corp., 739 F. Supp. 1006 (D. Md. 1990), aff’d, 933 F.2d 231 (4th Cir. 1991) pecuit ye ees Deller v. Portland General Elec. Co., 727 F. Supp. 1369 (D. Or. 1989) LAY PEt) he Deeming v. American Standard, Inc., 905 F.2d 1124 (7th Cir. 1990) 24 Donahue v. Custom Management Corp., 634 F. Supp. 1190 (W.D. Pa. 1986) sss 24 Fischer v. Philadelphia Elec. Co., 1991 WL 36215 (ieee Dek Wee cca fe . 18,28 Firestone Tire and Rubber Co. : v. Bruch, 489 U.S. 101 (1989) _. __... passim Fleming v. Ayers & Associates, 948 F. 2d 993 (6th > | PE rt a A Ae SE 19 Flick v. Borg-Warner Corp., 392 F.2d 285 (3rd RA SIO iovcccesscone tostueks ee eee ee 15 Folz v. Marriott Corp., 594 F . Supp. 1007 (W.D. Bn, TO i a eee 18, 19, 20 vi TABLE OF AUTHORITIES—Continued Page Freeman v. Jacques Orthopaedic & Joint Implant Surgery Medical Group, Inc., 721 F.2d 654 (9th CO ROI asec vecccccvccccncectoteee ee ee . 15, 21 Garry v. TRW, Inc., 603 F. Supp. 157 (N.D. Ohio WE hiiscseivessisenevssncsaccecaccasavinhcis cea 18, 24 Gavalik v. Continental Can Co., 812 F.2d 834 (3rd CSU ROM I AD scnvcnesscgnccsesssscocsccionsbeech eee eee 16, 24 Gilquist v. Becklin, 675 F. Supp. 1168 (D. Minn. 1987), aff'd mem., 871 F.2d 1093 (8th Cir. RN escecscsenccosineesnscecdcouasceatees eee 15 Gladstone, Realtors v. Bellwood, 441 U. S. 91 6) ) Reena (iiavaxaccss¢heeedesieat oaeeeren eaten eat 14 Hager v. Veco Corp., 1 Employee Benefits Cas. (BA) UGBT CRD, TE. RGR) xc ncviccccccsscccckccccensssss 15 Healy v. Axelrod Const. Co, Pension Plan & Trust, 787 F. Supp. 888 (N.D. Il. 1092) ....................:.... 24 Henry v. Black & Decker Inc., 779 F. Supp. 778 CTD, Fabs. OAD akcctontstcese eee eee 14 Ingersoll-Rand Co. v. McClendon, 111 S.Ct. 478 EEE sicrcicccescccnsncckescebcucrbreeb ae acai eaneee passim Jones v. AT & T Co., 1992 WL 68266 (E. D. Pa. ROE Sos icccscdtnn. ccna ee 23 Joseph v. New Orleans Elec. Pension & Retirement Plan, 754 F.2d 628 (5th Cir. 1985) 2.0... 15 Kuntz v. Reese, 785 F.2d 1410, (9th Cir. 1986) (per curiam), cert. denied, 479 U.S. 916 CIE vo cecdcsgicnccesdcacevccavesonntansnnceumeen ass ee 10, 15 Massachusetts Mut. Life Ins. Co. v. Russell, 473 Seis RI SID i sescncnre occsccecctoe ee sada 16,17 Mitchell v. Mobil Oil Corp., 896 F.2d 463 (10th Cir.), cert. denied, 111 S.Ct. 252 (1990) .......... 7, 17, 20, 21, 23 Nemeth v. Clark Equipment Co., 677 F. Supp. 899 COR A BN BID hore sed eee 18 Nugent v. Jesuit High School of New Orleans, 625 je 8: Fi ee | ne. os ee 15 Raymond v. Mobil Oil Corp., Civil Action No. 88- Z-2112 (D. Colo. June 25, 1992) .......................... 23 Saladino v. I.L.G.W.U. Nat’l Retirement Fund, 754 PBe Gre COR Gar BE wiisnews 15 Vii TABLE OF AUTHORITIES—Continued Page Saporito v. Combustion Enginering, Inc., 843 F.2d 666 (2d Cir. 1988), vacated and remanded, 489 U.S. 1049 (1989), on remand No. 87-5144, slip. op. (3d Cir. June 29, 1989) ........................ 18, 20, 22, 23 Sommers Drug Stores Co. Employee Profit Sharing Trust v. Corrigan, 883 F.2d 345 (5th Cir. i Re SIRNA a SAA as SENNA TE alse SSS EUR 15 Stanton v. Gulf Oil Corp., 792 F.2d 482 (4th Cir. 1) RUA a Ree eR a la Ce ROCIO PENS TRA SN Sp ecED ST EOS 15, 21 Teagardener v. ' Republic- Franklin Incorporated Pension Plan, 909 F.2d 947 (6th Cir. 1990) ...... . 16,22 Vogel v Independence Federal Savings Bank, 692 F. Supp. 587 (D. Md. 1988), aff’d, 728 F. Supp. po I Re eee Se ta ee ea ae | | | West v. Butler, 621 F.2d 240 (6th Cir. 1980)... 24, 25 Winchester v. Pension Committee, 942 F.2d 1190 (7th Cir. 1991) - tia : yeas | Woolsey v. Marion , Laboratories, “Inc., 934 F.2d 1452 (10th Cir. 1991) __.... pT IN PNM NRA ES 16 Yancy v. American Petrofina, Inc., 768 F.2d 107 See nn ne oe ee ee ee 15, 21 Young v. AT & T Transition Protection Payment Plan, 1989 WL 675 (D. N.J. 1989)... 23 Zipf v. American Tel. & Tel. Co., 799 F.2d 889 pe a A eee ed AM Pe 16, 18, 25 STATUTES AND RULES 26 U.S.C. § 401 (a) (4)...... iA Sn nen DT AE HEM Sd oN 4 EE | Tete arbor Sanne nen nea en Senna onan 9,23 , Rik Fe Ft Se eae Pe sence 10 Be re eT onic ovo ees ssc siniscnesnnannee ae ie erence 15, 16 os ce caudbi cneinesunondavneaiente 7 pee FM 8D 5 2 ee anne eeee ee enenen 10 Be Meas Oe UO OF GORD oon case cecesenceececcsevencasnsccses 15 20 U.5.C. § 1132 (a) (i) (C) ...................... Pedra hes 15 29 U.S.C. § 1183 (a@) (2).......................... Sh aaa 15, 16 Bk Tee Be a } oars 10 Rte Som Bee fh Te 8 et | cnn nn nae 15 Viii TABLE OF AUTHORITIES—Continued Page ee I ee eee 10 ED coc ce ea 2,9, 10, 20 ae sn ae 7 ERISA § 502 (a) ............ pee RAR AAP ISSR case NT INTO 19 I oan case cece eaves 10 SMA We UF oe accesso iccenccecncaeesevscsennevornvecncecs 8 Ue re 2 es ee passim OTHER AUTHORITIES 2 Legislative History of the Employee Retirement Income Security Act of 1974, 1641-42 (1976)... 18 Retirement Equity Act of 1984, Pub. L. No. 98- 397, § 302(d) (1), 98 Stat. 1426, 1451-52, (codi- fied, as amended, 29 U.S.C. § 1001, Historical and Statutory Notes) $ S. Rep. No. 93-127, 93d Cong., 2d Sess., Reprinted in 1974 U.S. Code Cong. and Ad. News at 4871.. 9 IN THE Supreme Court of the United States OCTOBER TERM, 1992 No. 91-1881 MoBIL OIL CORPORATION, THE RETIREMENT PLAN OF MoBIL OIL CORPORATION, and REx ADAMS, ‘ Petitioners, GERALD W. CHRISTOPHER, CHARLES L. PRUNTY, and BILLY G. TURNER, Respondents. On Petition for Writ of Certiorari to the United States Court of Appeals for the Fifth Circuit RESPONDENTS’ BRIEF IN OPPOSITION COUNTERSTATEMENT OF THE CASE At issue here is whether the Court of Appeals correctly held that standing to sue under ERISA $510 may be established by former employees, notwithstanding their receipt of a lump sum payment of all their accrued pen- sion benefits, if they prove: (1) that their employer’s misrepresentations and concealment of certain material facts prior to the empolyees’ “retirement” decision caused the retirements and rendered them involuntary in the Same sense that an outright firing is an involuntary dis- 92 ee charge; and (2) that but for the violation of § 510, the respondents would in fact be current employees “eligible to receive a benefit-of any type from an employee benefit plan.” ERISA § 3(7). I. COUNTERSTATEMENT OF THE FACTS. Plaintiffs were each employed by Petitioner Mobil Oil Corporation (“Mobil”) for more than 35 years. As par of their compensation, they earned retirement benefits, including a pension under a defined-benefit Retirement Plan (the “Plan”). For many years, such pensions were paid in the form of monthly annuities. But in 1977, Mobil amended the Plan to allow retiring employees to take their pensions in a lump sum, reduced to present value using a 5% discount rate. To qualify for this lump sum option, the retiring employee had to have $250,000 in acerued pension or had to show a personal net worth, exclusive of his Mobil pension, exceeding that figure. A. The July 1984 Plan Amendment. In late 1983 and early 1984, Mobil’s Executive Com- mittee began consideration of changes to the lump sum benefit. The 5% discount factor had made the lump sum far more valuable—approximately 40% more valuable— than the annuity benefit. The intervening years of in- flation, including salary inflation, had made a majority of Mobil’s employees eligible for the lump sum under the $250,000 test. Utilization of the lump sum option was becoming virtually universal. The Executive Committee wanted to increase the discount factor and the eligi- bility test or “threshold.” By May 1984, however, Mobil knew that Congress was likely to pass an amendment to ERISA that would pre- vent “cutbacks” in defined benefits, including “optional” forms of benefits such as Mobil’s lump sum option. The proposed amendment, eventually enacted as part of the 3 Retirement Equity Act (“REA”), would not prohibit such “cutbacks,” however, if made before July 30, 1984. Re- tirement Equity Act of 1984, Pub. L. No. 98-397, § 302 (d) (1), 98 Stat. 1426, 1451-52 (codified, as amended, 29 U.S.C. § 1001, Historical and Statutory Notes). Mobil’s Executive Committee acted quickly. On June 13, 1984, it adopted and on July 2, 1984, it announced a Plan amendment: (a) increasing the discount factor from 5% to 9.5° for benefits accrued after February 1, 1985; and (b) increasing the lump-sum eligibility threshold from $250,000 to $450,000, also effective February 1, 1985, to be increased thereafter by the consumer price index. The change in the threshold eligibility requirement was not made prospectively. That is, once the Plan amend- ment became effective, the new eligibility test would apply to all retirees and with respect to the entirety of their pension. B. The Sixth-Month “Window” Retirement Program. Ostensibly as a matter of fairness, Mobil also announced on July 2 1984, a special, six-month “window” retire- ment program for those employees who were 55 or older before the new Plan amendment became effective. They could take their pension in a lump sum under the old $250,000 test—but only if they retired by January 1, 1985. As part of this window “program,” Mobil waived certain advance notice requirements for electing the lump sum. For more than 1,000 Mobil employees, the Plan amend- ment and the six-month window operated as an “early retirement” program—and an inexpensive one for Mobil, since it was not required to pay any “incentives” to en- courage the early retirements. Indeed, Mobil’s net sav- ings for this “early retirement” program were nearly $300 million. At the time it announced the Plan amendment and the “window” retirement program, Mobil informed its em- 4 ployees that the amendment was “subject to IRS approval” —j.e. an IRS determination that the Plan, as amended, would continue to meet the IRS’ criteria for ‘favorable tax treatment.’’ The plaintiffs and their fellow ‘window retirees’”” were led to believe that such IRS approval would be routine. After all, Mobil had the right to adopt the Plan amendment when it did. In fact, Mobil could have abolished the lump sum benefit altogether—so long as it did so before July 30, 1984, the effective date of the REA’s “anti-cutback” provision. To this point in events, Mobil’s conduct did not violate ERISA. In particular, as to $510 of ERISA, if retire- ment-eligible employees chose to “opt” for the lump sum benefit and to give up their jobs to get the lump sum, their retirements would not constitute unlawful discharges in violation of $510. Instead, they would be making a conscious, albeit unwanted, decision to retire and to re- ceive all their retirement benefits earned through the date of retirement. C. The September 1984 Plan Amendment. On July 16, 1984, Mobil submitted its application for a determination letter to the IRS. The chief concern was whether the new $450,000 threshold would “discriminate in favor of highly compensated employees,” in violation of 26 U.S.C. § 401(a) (4). In September, the IRS agent reviewing the Plan amendment informed Mobil that he would not approve it, because it would indeed favor Mobil’s “highly paid executives.” Although Mobil informed its Executive Committee of the IRS’ rejection of the Plan amendment, it did not in- form_its rank and file. Instead, in late September 1984, it made a new amendment, incorporating into the amend- ment proposed in July, a right of each employee to apply for a waiver of the $450,000 threshold. This new Plan amendment reserved to Mobil “sole discretion” to grant such waivers “in individual cases for valid cause shown.” 5 However, Mobil has admitted that the purpose and in- tended operation of the waiver clause was to prevent “statistical” discrimination in favor of highly compen- sated employees. Since eligibility for the lump sum option among Mobil’s highly paid employees would be virtually universal even under the $450,000 test—a fact Mobil knew from internal and outside actuarial studies—-the prac- tical effect of the waiver clause was inescapable: it would negate the $450,000 threshold amendment. D. Mobil’s Misrepresentations and Concealments. The IRS informally approved the new amendment in October. However, Mobil again made no announcement to its rank and file. It did not inform the employees that the IRS had rejected the originally proposed Plan amend- ment, that a new amendment had been adopted—after the July 30, 1984 effective date of the REA—or that employees now had a right to apply for a waiver of the $450,000 requirement. To the contrary, Mobil actively concealed these facts from employees considering retirement under the “win- dow” program. For example, in October 1984, Mobil pre- pared two memoranda concerning the IRS’ approval of the new Plan amendment. One was sent to Mobil’s Ex- ecutive Committee and correctly described the amendment as adopted the previous month, including the new waiver clause. The second memorandum, addressed to Mobil’s employee relations managers throughout the country— who referred only to the Plan amendment in the form announced on July 2, 1984. Several employees, including plaintiffs, who were con- sidering retirement under the window program asked their respective employee relations departments about possible exceptions to the $450,000 requirement. They were consistently told that no exceptions were possible. On November 12, 1984, one of Mobil’s executives pre- pared a “confidential memorandum” concerning plans for ee 6 administering the waiver clause. This document discusses “adverse comments” made to the IRS about the July 2, 1984 version of the Plan amendment by employees who were considering retirement under the window program. The IRS had responded to the employees, explaining only that the amendment “did not adversely affect the qualifi- cation of the Plan.” This internal Mobil memorandum then expresses relief that the IRS had made “no mention of the additional amendment required by the IRS [i.e., the waiver clause].” Mobil announced the IRS’ approval of the Plan amend- ment to its employees on December 21, 1984—just ten days before the end of the “window” program. This an- nouncement specifically referred to the July 2, 1984 announcement and implied that the IRS had approved the Plan amendment as announced in July. This Decem- ber announcement also did not disclose the waiver amend- ment or the date of its adoption. E. Mobil’s Violations of ERISA § 510. Plaintiffs and their fellow “window retirees” left Mobil on January 1, 1985, believing that the Plan amendment announced by Mobil the previous July had been approved by the IRS and without knowing that the true Plan amendment had been made in September 1984. Plaintiffs also retired not knowing of their right under the Plan amendment to apply for a waiver of the $450,000 re- quirement. Had plaintiffs known of the IRS rejection, they, through their unions and attorneys, would have learned that their rights to the lump sum benefit under the $250,000 test had been “grandfathered in” by the REA. Similarly, had plaintiffs known of the right to apply for a waiver, each would have done so, instead of forfeiting his job—especially if provided information about the purpose and intended operation of the waiver clause. | 7 Mobil never did announce the true Plan amendment in the form adopted in September 1984. Instead, in October 1985, Mobil announced the “‘waiver clause,” without spec- ifying when it had been adopted and without explaining that it was part of the threshold amendment. Mobil made this announcement only to then-current employees. Plain- tiffs did not discover Mobil’s fraudulent conduct until late 1988, as a result of discovery and trial in a case brought by one of the “window retirees” in Colorado." Il. COUNTERSTATEMENT OF PROCEEDINGS. Plaintiffs brought this action on July 7, 1989, alleging that Mobil’s conduct violated the Age Discrimination in Employment Act (“ADEA”) and state law. Plaintiffs also asserted that if their state law claims were pre- empted by ERISA, then Mobil’s conduct constituted a violation of ERISA, specifically § 510. Mobil filed dispositive motions on all claims, including a motion to dismiss plaintiffs’ ERISA claims on grounds that plaintiffs were not “participants” seeking to recover benefits under ERISA § 502, 29 U.S.C. § 1132, and they therefore lacked standing to sue under ERISA. On June 22, 1990, the District Court granted summary judgment for Mobil on the ADEA claims, finding those claims barred by statutes of limitations. The trial court dis- missed the state law claims based on ERISA preemption, 1 The Colorado action, denominated Mitchell v. Mobil Ow Corp., Civil Action No. 86-Z-585, asserted claims for violation of the Age Discrimination in Employment Act, of ERISA, and of state law. Mitchell’s theory was that Mobil’s July 2, 1984 announcement itself worked a “constructive discharge” of Mitchell. Although Mitchell also offered evidence of Mobil’s fraudulent conduct after the July 2, 1984 announcement—solely as a means of showing that the an- nouncement was willful and intentional—he did not claim at trial that his retirement had been fraudulently procured. Ultimately, his “constructive discharge” theory failed under both ADEA and ERISA. Mitchell v. Mobil Oil Corp., 896 F.2d 463 (10th Cir.), cert. denied, 111 S.Ct. 252 (1990). 8 and it ruled that plaintiffs did not have standing to sue as “participants” under ERISA § 502(a). The Fifth Circuit affirmed the ADEA ruling and the ERISA preemption ruling, but reversed and remanded the district court’s dismissal of plaintiffs’ ERISA claims. Christopher v. Mobil Oil Corp., 950 F.2d 1209 (5th Cir. 1992). The Court found that dismissal on the pleadings of the contingent ERISA claims. was premature, as plaintiffs’ allegations indicated that they may have been discharged in violation of § 510 and that, but for Mobil’s nondisclosures, they would be covered employees with standing to sue under § 510. The Fifth Circuit observed that it was possible plaintiffs could prove facts that would establish standing under ERISA § 510. The Fifth Circuit also noted that plaintiffs had sought reinstate- ment on their ADEA claims, and did not affirmatively in- dicate that reinstatement was not also sought under their ERISA claims. Upon remand, plaintiffs have amended their Complaint, asserting claims under § 510 of ERISA. They allege that Mobil fraudulently procured their involuntary discharges, by interfering with their ERISA-protected right to re- ceive the lump sum benefit under the $250,000 test, by inducing them to believe that they could exercise their right to the lump sum only by giving up their jobs, and by concealing from them and thus preventing them from exercising their right under the Plan to apply for a waiver of the $450,000 requirement. Plaintiffs seek equitable relief pursuant to ERISA § 502(a)(3) in the form of a “make whole” remedy. The case is now pro- ceeding in the District Court for the Eastern District of Texas. REASONS FOR DENYING THE WRIT (1) The means by which a former employee may estab- lish or prove his standing, as articulated by the Fifth Circuit’s decision in this case, are consistent with the 9 statutory definition of “participant” under ERISA § 3(7) and are not inconsistent with any applications of that definition by this Court or any of the other circuits. (2) The Fifth Circuit’s decisien on standing does not threaten the certainty or uniformity of ERISA plan administration. (3) Review of the Fifth Circuit’s decision would be premature. The grounds for standing recognized by the Fifth Circuit require proeef of an ERISA § 510 claim that in and of itself caused plaintiffs to cease being “current employees.” Standing here is not based on a mere claim or allegation of standing. Ultimately, plaintiffs may or may not establish standing in the District Court, but in any event the proper time for review by this Court would be after the lower courts have fully adjudicated the issue. (4) If the Court were to review the Fifth Circuit’s decision on standing purely as a legal formulation, it would find, again, that the formulation is not inconsist- ent with any prior decisions of this Court or of the other circuits; however, the principles articulated by the Fifth Circuit have not been significantly developed by the lower courts. In fact, in related litigation, the District Court for the District of Colorado on July 21, 1992 certified the very issue presented here for interlocutory review by the Tenth Cireuit Court of Appeals under 28 U.S.C. § 1292(b). [32a.] I. THE CONTROLLING STATUTORY PROVISIONS. ERISA is comprehensive remedial legislation intended to provide the full range of legal and equitable remedies to redress and prevent violation of its provisions. S.Rep. No. 93-127, 93d Cong., 2d Sess., Reprinted in 1974 U.S. Code Cong. and Ad. News at 4871. As pertinent here, standing to bring civil actions to enforce ERISA rights and to redress violations is afforded to a “participant” of an employee benefit plan. ERISA § 502(a) (1) & (3), lle 10 29 U.S.C. § 1182(a) (1) & (3). A participant, as defined by ERISA § 3(7), is “any employee or former employee . who is or may become eligible to receive a benefit of any type from an employee benefit plan.” (emphasis added). 29 U.S.C. § 1002(7). Under § 3/7), current employees who are eligible or who in the future may become eligible for plan benefits are “participants” for standing purposes. A former em- ployee “may become eligible for benefits,” and is therefore a “participant,” if he has a “reasonable expectation of returning to covered employment” or a “colorable claim to vested benefits.” Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 117 (1989); Kuntz v. Reese, 785 F.2d 1410, 1411 (9th Cir. 1986). In relevant part, ERISA § 510 provides: It shall be unlawful for any person to discharge... a participant . . . for exercising any right to which he is entitled under the provisions of an employee benefit plan [or] this Subchapter... or for the pur- pose of interfering with the attainment of any right to which such participant may become entitled under the plan [or] this Subchapter. . . . 29 U.S.C. § 1140. Mobil contends that a former employee cannot be a “participant” under this or any other provision of ERISA if he has received all the benefits he earned through the date he left “covered employment”—regardless of whether his departure was caused by his employer’s violation of $510. Mobil asserts that the only “exception” to this “rule” is where the former employee asks his employer to reinstate him before he sues under ERISA. Under that “exception,” the presuit request for reinstatement, ac- cording to Mobil, may represent a “reasonable expecta- tion of returning to covered employment,” but only if the reinstatement would allow the employee to “satisfy eligibility requirements” for a benefit not satisfied before his wrongful discharge. ! | 11 These are the “rule” and the “exception”? Mobil urged below and which it advances on its Petition. But neither the decisions of this Court nor of the circuits support the “rule” or the “exception.” Il. THE FIFTH CIRCUIT’S DECISION IS CONSIST- ENT WITH FIRESTONE AND THE ONLY INTER- PRETATION OF FIRESTONE CONSISTENT WITH SECTION 510. Under Mobil’s argument, many persons who might be harmed by conduct proscribed by § 510 would lack stand- ing to sue under that section. Any employee discharged for exercising his right to a fully vested ERISA benefit necessarily would have already received the vested bene- fit. He would no longer have a “colorable claim for vested benefits.”” He would not have a “reasonable expec- tation of returning to covered employment” to “attain eligibility for the benefit’”’ because he had already obtained eligibility. Also, his expectation of returning to covered employment could be defeated by the employer or by cir- cumstances entirely beyond the participant’s control (e.g. if the employer goes out of business), making his request for reinstatement “unreasonable.” To illustrate, an employer offering a health plan and maternity leave as its only ERISA benefits might inten- tionally discharge a female worker immediately after her return from maternity leave, for exercising her ERISA rights. At the time of her discharge, she had received all earned and vested benefits, yet her discharge is obviously violative of § 510. She would lack standing, according to Mobil, however, because she would have no claim, color- able or otherwise, for ‘“‘vested benefits’ and no expecta- tion of attaining eligibility for a vested benefit in the future. Additionally, if the circumstances of her dis- charge or events subsequent to the discharge made her reinstatement unlikely or an “unreasonable expectation,” then she would lack standing on this ground as well. Such a construction of Firestone would vitiate § 510 and allow the employer, through his own conduct viola- 12 tive of § 510, to defeat the employees’ standing to remedy the violation. The Fifth Circuit recognized this, and thus rejected Mobil’s restrictive interpretation of Firestone— the same interpretation advanced in its petition here. In doing so, the court used the plaintiff in /ngersoll-Rand Co. v. McClendon, 111 8.Ct. 478 (1990), as an example, not unlike the female employee discharged after return- ing from maternity leave: The Supreme Court’s recent McClendon decision held that |Section 510] would foreclose the development of any state law cause of action for wrongful termina- tion to prevent vesting of pension benefits. ... The implication of the Court’s holding that the discharged employee must look solely to ERISA for his remedy is that he would have standing to do so. Neverthe- loss, it is not readily apparent that he would have standing under the construction of /irestone urged by Mobil; he would be a former employee lacking both a claim for vested benefits and (unless he re- cuested reinstatement) a reasonable expectation of returring to covered employment. It would be un- usual if in that situation his ability to assert a claim at all turned on whether or not his requested relief included reinstatement; it would seem more logical to say that but for the employer’s conduct alleged to be in violation of ERISA, the employee would be a current employee with a reasonable expectation of receiving benefits, and the employer should not be able through its own malfeasance to defeat the employee’s standing. 950 F.2d at 1221 (citations omitted). The Fifth Circuit recognized that, at the time of the alleged $ 510 violation, each of these plaintiffs were “par- ticipants” in Mobil’s Retirement Plan, and their standing to sue for that alleged violation cannot be defeated by the violation itself. Either their standing is to be deter- mined as of time of the wrongful acts, i.e. when they were still “current employees” and thus “participants,” or they must be treated in law as if they had never left covered employment. i3 Stated another way, if plaintiffs can prove the § 510 claims they allege, then they—as a matter of law—aave continued to earn or accrue vested benefits, i.e., addi- tional pension accumulations, which were not paid to them. Accordingly, they would then have claims for vested benefits not paid. Also, plaintiffs would then have more than merely a “reasonable expectation of returning to covered employment.” They would have proven that they never should have lost their jobs in the first place. II]. THE FIFTH CIRCUIT’S OPINION DOES NOT CRE- ATE STANDING BY A MERE ALLEGATION OR CLAIM OF STANDING. Mobil’s petition misapprehends an important aspect of the Fifth Circuit’s decision in this case. The Fifth Cir- cuit held that plaintiffs may establish standing to sue under § 510 only if they prove that their status as “for- mer employees” was the result of a § 510 violation and not the result of their own actions. See especially, 950 F.2d at 1222. In other words, plaintiffs are required to show that their apparently conscious decision to take early retirement was in fact a fraudulently procured discharge in which plaintiffs’ “conscious choice” was effectively negated by fraud. Proof of such fraud is required to render the “early retirements” truly involuntary in the same sense that the outright firing in McClendon was involuntary. Thus, plaintiffs’ standing is not established by a mere claim of fraudulent discharge. It requires proof of the violation : i'T\ be standing question and the merits of an em- ployee’s claim are unavoidably intertwined to some degree; whether a plaintiff has standing to assert ERISA viehts may depend upon whether he can es ublish a discharge or some other conduct in viola- ion yf “RISA, but for which he would have standing. 959 ¥.2d at 1222 (emphasis added). 14 Thus, the Fifth Circuit did not run afoul of the princi- ples in Firestone that plaintiffs either are or are not “par- ticipants” and that they cannot establish their status as “participants” by merely alleging or claiming that status. Here, the plaintiffs either are or are not participants— depending upon whether they actually prove that they would not have left covered employment but for Mobil’s fraud in violation of § 510. Requiring proof of an underlying violation as a pre- requisite to standing, so that standing cannot be deter- mined except upon the merits of the case, is not foreign to the law. Gladstone, Realtors v. Bellwood, 441 U.S. 91, n.31 (1979) (“it sometimes remains to be seen whether the factual allegations of the complaint necessary for standing will be supported adequately by the evidence at trial.”) ; Barrett Computer Services, Inc. v. PDA, Ine., 884 F.2d 214, 218-19 (5th Cir. 1989) (“... in cases in which the merits of the claims asserted are intertwined with the jurisdictional issue of standing challenges to standing are frequently resolved in summary judgment proceedings . . . or at a trial on the merits.” ) See also, Henry v. Black & Decker Inc., 779 F. Supp. 778, 784, n.4 (D.N.J. 1991). In this case, the merits of respondents’ ERISA claim are inextricably intertwined with the question of stand- ing. The Fifth Circuit, in fact, held that: “[wle em- phasize that we have not determined that appellants will be able to establish a violation of $510, only that they should be allowed to do so.” [25a.] 15 IV. THE FIFTH CIRCUIT’S OPINION DOES NOT ALTER THE STATUTORY DEFINITION OF “PAR- TICIPANT,” BUT DOES RECOGNIZE THAT THE PROOF REQUIRED TO MEET THE DEFINITION DIFFERS DEPENDING UPON THE NATURE OF THE ERISA CLAIM ASSERTED. Judicial interpretation of ERISA standing has devel- oped, not under § 510, but in the context of claims for breach of plan obligations—failure to provide plan docu- ments,” denial of benefits,* or failure to meet fiduciary obligations. Unlike § 510 claims, such claims arise from the contractual rights created by benefit plans and have their genesis in pre-ERISA jurisprudence: prior to ERISA, actions challenging denial of benefits and other 2 29 U.S.C. §§ 1182(a)(1)(A) and (C); see, e.g., Firestone Tire and Rubber Company v. Bruch, 489 U.S. 101; Winchester v. Pension Committee, 942 F.2d 1190 (7th Cir. 1991); Flick v. Borg-Warner Corp., 892 F.2d 285 (3d Cir. 1989); Kuntz v. Reese, 785 F.2d 1410 (9th Cir. 1986); Saladino v. 1.L.G.W.U. Nat'l Retirement Fund, 754 F.2d 473 (2d Cir. 1985) ; Nugent v. Jesuit High School of New Orleans, 625 F.2d 1285 (5th Cir. 1980); Buchanan v. Foster Elec. Co., 1989 WL 157340 (N.D. Ill. 1989); Hager v. Veco Corp., 1 Employee Benefits Cas. (BNA) 1827 (N.D. Il. 1979). $29 U.S.C. § 11382(a)(1)(B); see, e.g., Firestone v. Bruch; Boren v. Southwestern Bell Telephone Co., Inc., 933 F.2d 891 (10th Cir. 1991); Teagardner v. Republic-Franklin, Inc. Pension Plan, 909 F.2d 947 (6th Cir. 1990); Flick v. Borg-Warner Corp., 892 F.2d 285; Yancey v. American Petrofina, Inc., 768 F.2d 707 (5th Cir. 1985) ; Freeman v. Jacques Orthopaedic and Joint Implant Surgery, 721 F.2d 654 (9th Cir. 1983); Deller v. Portland General Elec. Co., 727 F. Supp. 1369 (D. Or. 1989). #29 U.S.C. §§ 1109, 1132(a)(2); see, e.g., Flick v. Borg-Warner Corp., Sommers Drug Stores Co. Employee Profit Sharing Trust v. Corrigan, 883 F.2d 345 (5th Cir. 1989); Amalgamated Clothing & Textile Workers Union, AFL-CIO v. Murdock, 861 F.2d 1406 (9th Cir. 1988) ; Stanton v. Gulf Oil Corp., 792 F.2d 432 (4th Cir. 1986) ; Kuntz v. Reese; Joseph v. New Orleans Elec. Pension & Retirement Plan, 754 F.2d 628 (5th Cir. 1985) ; Gilquist v. Becklin, 675 F. Supp. 1168 (D. Minn. 1987). 1d pension plan rights were governed by principles of con- tract law. Firestone, 489 U.S. at 112. The conduct prohibited by § 510 is not merely the fail- ure to meet plan obligations; a § 510 claim requires in- terference with the employment relationship, with a spe- cific intent to prevent attainment or to interfere with the exercise of a right under ERISA or an ERISA-governed plan. Gavalik v. Continental Can Co., 812 F.2d 834, 851- 52 (3rd Cir. 1987); Zipf v. American Tel. & Tel. Co., 799 F.2d 889, 893 (3rd Cir. 1986). Thus, claims alleging violation of $510 are more akin to common law actions in tort for wrongs to the employment relationship. See, Woolsey ». Marion Laboratories, Inc., 934 F.2d 1452, 1461 (10th Cir. 1991) (recognizing that § 510 “was de- signed to protect the employment relationship which gives rise to an individual’s pension rights.”); Vogel v. Inde- pendeiice Federal Savings Bank, 692 F.Supp. 587, 595 (D.Md. 1988) (§ 510 creates the statutory equivalent of tortious interference claim) ; see also, Vogel, 728 F. Supp. 1210, 1218 n.18 «(D. Md. 1990). Section 510 was enacted to prevent interference with the attainment or exercise of any right or benefit to which a participant may become entitled, including the opportunity to accrue additional benefits through contin- ued employment. See, e.g., Conkwright v. Westinghouse Elec. Corp., 933 F.2d 231, 236 (4th Cir.-1991). And since the prohibitions of § 510 are not limited to conduct that result in deprivation of benefits, but reaches as well conduct that harms the employment relationship, a § 510 plaintiff need not present a claim for benefits at all. Zipf, 799 F.2d at 898; see also, McClendon, 111 S.Ct. at 486.° 5 Mobil cites Massachusetts Mut. Life Ins. Co. v. Russell, 473 US. 134 (1985) for the proposition that only “benefits” are recoverable on a claim under ERISA. Petition at 16. Russell held that under § 1132(a) (2), an individual may bring a § 1109 suit for breach of fiduciary duty to recover on behalf of the plan, but not for losses he RP oA 17. It is therefore not surprising that a wrongfully dis- charged employee may prove that he has a “colorable claim for vested benefits” and thus standing by a showing that is different from the showing required a plaintiff suing for the denial of benefits or for plan information. The § 510 plaintiff may be considered a “current em- ployee,” as a matter of law, or his standing as a “partici- pant” may be determined as of the time the tort was committed. He may prove that he should never have lost his job, and upon such proof, establish a claim for vested benefits he has earned in law though not in fact. This does not mean that the statutory definition of “narticipant” is different in a § 510 case, but it does mean that the proof required to meet the definition may indeed be different in a § 510 context than in a benefits denial context. The same result obtains under the other prong of the Firestone formulation, i.e., whether the “former” em- ployee has a “reasonable expectation of returning to cov- ered employment.” The fact that a § 510 plaintiff does not precede his suit by asking his employer to rehire him cannot defeat his standing to bring an ERISA § 510 claim.® Reinstatement, whether through an informal, pre- suit request for reemployment or otherwise, is nota pre- has personally incurred. The majority opinion in Russell states that the Court was not considering whether any other ERISA provision —such as § 510-—-authorized recovery of extracontractual relief. Vogel, 692 F. Supp. at 595, citing Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. at 139, n.5, 105 S.Ct. at 3088 n.5; see also, Vogel, 728 F. Supp. at 1218. ® Here, as the Fifth Circuit noted, respondents did request reinstatement in connection with their age discrimination claim, indicating that respondents “do desire court-ordered reinstatement.” [2la.] On remand, they have also requested reinstatment on their ERISA §510 claims—-which defeats Mobil’s argument against standing in this case in any event. See, Mitchell, 896 F.2d at 474; Christopher, 950 F 2d at 1223. 18 requisite to a cause of action under § 510.7. And the rem- edies provided by $ 510 were designed to be administered by the courts, not by the employer or the plan adminis- trator. Zipf v. American T & T, 799 F.2d at 892, citing 2 Legislative History of the Employee Retirement Income Security Act of 1974, 1641-42 (1976).° Indeed; given the nature of the conduct actionable under § 510, a pre-suit request to be rehired is likely an exer- cise in futility.’ Where employment has terminated be- - cause of conduct in violation of § 510, reinstatement may be a practical impossibility due to the former employee’s age, illness or injury (whether related to the prohibited conduct or not), hostility, or dissolution of the employer’s business. If the employee asks the employer for reinstate- ment, and the employer rejects the request, saying there is “no chance” of reinstatement, then can the employee ever prove a “reasonable expectation of returning to cov- ered employment?” The Fifth Circuit’s opinion in this case recognizes, in effect, that “equitable” or constructive reinstatement is the only realistic alternative in such cases. Section 510 7 See, e.g., Berger v. Edgewater Steel Co., 911 F.2d 911, 922 (3rd Cir. 1990), cert. denied, 111 S. Ct. 1310 (1991); Saporito v. Com- bustion Engineering, Inc., 843 F.2d 666, 672 (3rd Cir. 1988), vacated and remanded, 489 U.S. 1049, on remand, No. 87-5144, slip op. (3rd Cir. June 29, 1989); Fischer v. Philadelphia Electric Co., 1991 WL 36215, at p. 5; Conkwright, 739 F. Supp. 1006, aff’d, 933 F.2d 231 (4th Cir. 1991); Nemeth v. Clark Equipment Co., 677 F. Supp. 899, 908 (W.D. Mich. 1987); Garry v. TRW, Inc., 603 F. Supp. 157, 164 (N.D. Ohio 1985); Folz v. Marriott Corp., 594 F. Supp. 1007, 1016 (W.D. Mo. 1984); Bittner v. Sadoff & Rudoy, 490 F. Supp. 534, 536 (E.D. Wis. 1980) ; Calhoun v. Falstaff Brewing Corp., 478 F. Supp. 357, 360 (E.D. Mo. 1979). ‘In Zipf, the Third Circuit held that the plaintiff was not required to submit her § 510 claim (which included a request for reinstate- ment, back pay and other restitutionary relief) to the plan for administrative determination. In so holding, the court drew a dis- tinction between a claim under §510 and contractual claims for yenefits or other contract-based rights under other provisions of ERISA. 799 F.2d at 892. 19 contemplates that federal courts will fashion equitable, “make whole’ remedies—in effect treating the wrong- fully discharged employee as though he had never been terminated. See, Folz v. Marriott, 594 F.Supp. at 1015; Bittner v. Sadoff & Rudoy Industries, 490 F.Supp. at 536 (under the equitable power afforded the courts by ERISA, the court is not limited in its ability to award relief to mere restoration of pension plan benefits, but has equitable power to put plaintiff “back into the posi- tion he enjoyed before the discharge.”) ; accord, Fleming v. Ayers & Associates, 948 F.2d 993, 998 (6th Cir. 1991), citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 418-19. This Court’s decision in McClendon reaffirms the avail- ability of the full panoply of equitable remedies to redress $510 violations. Although McClendon did not address the question of standing, this Court held that where a former employee has been discharged in order to defeat pension rights and he seeks—not benefits—but lost wages and other compensatory relief, his remedy is not under state law but under ERISA § 510: There is no basis in § 502(a)’s language for lim- iting ERISA actions to only those which seek “pen- sion benefits.” It is clear that the relief requested here [including loss wage» and other “extracontrac- tual” relief] is well within the power of the federal courts to provide. 111 S.Ct. at 486.° McClendon requested neither an award of unpaid, vested benefits nor reinstatement of his employment. He 9 The Fifth Circuit did not hold or even imply that McClendon overruled or “superseded sub silentio” Firestone. The Fifth Circuit merely reasoned that Mr. McClendon would have standing to sue under the ERISA claim this Court said he possessed—under § 510. That conclusion merely buttressed the circuit court’s construction of Firestone in the context of a $510 claim. The Fifth Circuit's opinion is consistent with both McClendon and Firestone, and these two opinions are consistent with each other. thes the ve 20 had neither a colorable claim for vested benefits nor a reasonable expectation of returning to covered employ- ment, but he nonetheless had suffered an injury for which $ 510 provided a remedy. McClendon, like the plaintiffs here, could establish his standing if he proved his § 510 claim. Either his stand- ing was to be determined at the time the tort (i.e., the $510 violation) occurred, or, upon proof of the violation, he could demonstrate his status in law as a “current employee.” And even as a former employee in fact, upon proof of the violation, he could establish a claim for un- paid benefits and far more than a mere “expectation of returning to covered employment.” '° In sum however the Fifth Circuit’s standing decision is analyzed, it is consistent with the definition of ‘“partici- pant” under ERISA § 3(7), and it is not inconsistent with Firestone or, as demonstrated in the next section, any of Firestone’s progeny in the other circuits. V. THE FIFTH CIRCUIT’S DECISION IS NOT INCON- SISTENT WITH PRECEDENT IN OTHER CIR- CUITS. The Fifth Circuit’s analysis of standing in this case is not inconsistent with Mitchell v. Mobil Oil Corp., 896 F.2d 463 (10th Cir.), cert. denied, 111 S.Ct. 252 (1990). or With the decisions of other circuits on ERISA standing. The requirement that plaintiffs here prove they were involuntarily discharged as a result of fraudulent misrep- resentations distinguish the cases Mobil cites. As the Fifth Circuit observed: |Plaintiffs’} allegations do at least suggest an assertion that they were constructively discharged in violation of section 510 and that but for Mobil’s non- See, e.g., Folz v. Marriott, 594 F. Supp. at 1016; Saporito v. Combustion Engineering, Inc., 843 F.2d at 672: Bittner v. Sadoff & Rudoy Industries, 490 F. Supp. at 536. an VAR cal lay A PE i Dar ORE 21 disclosure they would be covered employees with standing to challenge the plan amendment. They allege deceptive conduct by Mobil that might be found to vitiate the voluntariness of their decision to retire and that might distinguish the present case from both Yancy and Mitchell. Christopher, 950 F.2d at 1223. As the court adduced, it is the involuntariness of plaintiffs’ termination that may and, with proof, will distinguish this case from those which Mobil claims are inconsistent with the Fifth Cir- cuit’s opinion. See and compare, Yancy v. American Petrofina, Inc., 768 F.2d 707, 709 (5th Cir. 1985). The Mitchell and Yancy plaintiffs exercised a knowing and legally voluntary (albeit unwanted! choice to retire and accept.a lump-sum payment of their vested benefits in lieu of continuing employment and later challenging their employer’s conduct. See especially, 950 F.2d at 1227. That defeated their standing. Here, the plaintiffs made no such knowing choice. They were defrauded out of their jobs—the legal equivalent of an outright firing. But that is what they must prove in order to have standing. Similarly, in Stanton v. Gulf Oil Corp., 792 F.2d 432 (4th Cir. 1986) and in Freeman v. Jacques Orthopaedic & Joint Implant Surgery Medical Group, Inc., T24 F.2d 654 (9th Cir. 1983)—both pre-Firestone cases—the issue was whether an employee who had never been a “partici- pant” in the ERISA plan from which he was claiming benefits could be treated as one if he claimed that he would have become a “participant” but for the employer’s alleged fraud. Aside from the fact that neither case is a $510 discharge case, both make the very point articu- lated in Firestone and followed by the Fifth Circuit in this case: a person either is or is not a “participant.” A mere allegation or claim that he would have had such status but for his employer’s actions (or any other cir- eumstance for that matter) does not establish standing. Proof of the actual status is required. See also and com- 22 pare, Winchester v. Pension Committee, 942 F.2d 1190, 1193 (7th Cir. 1991) (mere assertion of claim to re- instatement is not sufficient to establish a “reasonable ex- pectation of returning to covered employment” and thus standing) ; Teagardener v. Republic-Franklin ] ncorporated Pension Plan, 909 F.2d 947, 949-50 (6th Cir. 1990) (for- mer employees not entitled to additional benefits accruing from termination of retirement plan after they voluntarily retired and ceased to be “participants” ), None of the cases cited by Mobil are inconsistent with the Fifth Cireuit’s decision in this case. VI. THE CIRCUIT COURTS HAVE ONLY RECENTLY BEGUN TO ADDRESS THE ISSUE PRESENTED HERE. As the Fifth Circuit’s decision reveals, the circuits have only begun to articulate the principles of standing applied below. In Berger v. Edgewater Steel Co., 911 F.2d 911, 922 (3rd Cir. 1990), cert. denied, 111 S. Ct. 1310 (1991), the Court followed prior law in holding that the former employees did not have Standing to sue for the denial of additiona! benefits where they had retired and accepted all their earned benefits in a lump sum and had not asked for reinstatement. But on the $ 510 claim, the court held: Of course, we recognize that if the employees were constructively discharged ‘as they do claim, they would not necessarily have to return to work in order to have standing to claim a make whole remedy. The Third Circuit has voiced similar concepts in Saporito v. Combustion Engineering, Inc., No. 87-5144, slip op. at 5 (3rd Cir. June 29, 1989), on remand, 489 U.S. 1049 (1989), after remand from this Court to reconsider stand- ing in light of Firestone. On remand, the court reaffirmed an even broader principle than that applied by the Fifth Circuit in this case: By its very nature a $510 claim will often involve employees who claim that they did not receive benefits 23 because of the employer’s actions, and thus were de- nied an opportunity to become participants in the benefits. To require that the employees have the status of participants where they allege that the em- ployers’ acts effectively deprived them of such status would undercut the provision |[i.e., § 510] and can- not have been intended by Congress. Other courts have reached the same result, but without necessarily articulating the means of establishing stand- ing in the same terms used as the Fifth and Third Cir- cuits. See, e.g., Jones v. AT & T Co., 1992 WL 68266, at 5 (E.D. Pa. 1992); Fischer v. Philadelphia Elec. Co., 1991 WL 36215 (E.D. Pa. 1991); Young v. AT & T Transition Protecton Payment Plan, 1989 WL 675, at 1 (D.N.J. 1989) (former employee may maintain § 510 action where employer made false representations induc- ing employee’s involuntary resignation and thereby de- priving him of early retirement benefits available in plan which was announced the day after his separation from employment); Deller v. Portland General Elec. Co., 727 F.Supp. 1369, 13871 (D. Or. 1989) (plaintiffs who received lump sum payment of vested retirement benefits upon termination may state claim under § 510 by showing that but for employer’s discriminatory conduct in calculating termination dates they would have been employed and eligible on date improved retirement benefits were made available). As mentioned earlier, the issue presented here has re- cently been certified for interlocutory appeal under 28 U.S.C. § 1292(b)—at Mobil’s request—in the related case of Raymond v. Mobil Oil Corp., Civil Action No. 88-Z- 2112, pending in the U.S. District Court for the District of Colorado. In Raymond, a certified class action of “window” retirees, the District Court ruled that the Fifth Circuit’s decision in this case is not inconsistent with Mitchell. If the Tenth Circuit grants Mobil’s petition for immediate review, it will then rule on the issue. If the Tenth Circuit were to reverse the District Court’s ruling, then a conflict would exist between the circuits. 24 In the meantime, the ERISA $510 claims in this case are now before the District Court and should be resolved on their merits in due course. If plaintiffs establish their Standing to the District Court’s satisfaction, the issue in this case may return to the appellate courts—by which time the Tenth Circuit and perhaps other circuits will have also decided the issue. The lower courts should be permitted to more fully develop the law on this issue before this Court exercises its discretionary review juris- diction. See also, Deeming v. American Standard, Ine., 905 F.2d 1124, 1127 (7th Cir. 1990); Healy v. Axelrod Const. Co. Pension Plan & Trust, 787 F. Supp. 838, 844- 45 (N.D. Ill. 1992) (noting that the “exact perimeters of [Section 510] have not been fully developed judicially.” | VII. THE FIFTH CIRCUIT’S OPINION DOES NOT CRE- ATE “UNCERTAINTY” OR “INCONSISTENCY” IN THE ADMINISTRATION OF ERISA PLANS. Mobil contends that the Fifth Circuit’s standing analy- sis will impair the “delicate balance” between the pro- tection of employee benefits and the costs of administering benefit plans. Mobil’s argument emphasizes only one purpose of ERISA—to protect benefits—to the exclusion of the purpose for which § 510 was enacted: protection of the employment relationship that gives rise to the bene- fits. West v. Butler, 621 F.2d 240, 245 (6th Cir. 1980) ; Gavalik v, Continental Can Co., 812 F.2d 834, 851 (3rd Cir. 1987); Garry v. TRW, Inc., 603 F.Supp. 157, 162 (N.D. Ohio 1985); Donahue v. Custom Management Corp., 634 F.Supp. 1190, 1197 (W.D. Pa. 1986). Congress viewed $510 as a crucial part of ERISA because without it employers would be able to “circum- vent the provision of promised benefits.” Ingersoll-Rand Co. v. McClendon, 111 S.Ct. at 485 (1990). Section 510 was enacted “to prevent unscrupulous employers from discharging or harassing their employees in order to prevent them from obtaining their statutory or plan-based ee we Dee Onn ee ee ee he eR ile ae > | : i : ‘ : i 502, 29 U.S.C. $1132. The district court granted Mobil’s motion to dismiss appellants’ ERISA claims on the ground that appellants were not “participants” within the meaning of that section and therefore were not empowered to sue. See Nugent v. Jesuit High School of New Orleans, 625 F.2d 1285, 1286 & n. 8 (5th Cir. 1980). ERISA defines the term “participant” to include “any employee or former employee . . . who is or may be- come eligible to receive a benefit of any type from an employee benefit plan.” ERISA §3(7), 29 U.S.C. $ 1002(7). The Supreme Court recently addressed the meaning of the “former employee” component of that definition. In Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Court observed that the definition referred to “former employees who ‘have . . . a reasonable expectation of returning to covered employment’ or who have ‘a color- able claim’ to vested benefits.” Jd. 109 S.Ct. at 958 (quoting Auntz v. Reese, 785 F.2d 1410, 1411 (9th Cir.) 20a (per curiam), cert. denied, 479 U.S. 916, 107 S.Ct. 318, 93 L.Ed.2d 291 (1986)). The Court also construed the “may become eligible” language of section 3(7) to mean that “a claimant must have a colorable claim that (1) he or she will prevail in a suit for benefits, or that (2) eligi- bility requirements will be fulfilled in the future.” Jd. Mobil argues that appellants do not have standing because they have neither a colorable claim for vested benefits nor a reasonable expectation of returning to covered employment. In Mitchell’s suit against Mobil, the Tenth Circuit denied ERISA standing to the plain- tiffs on the ground here urged by Mobil. Mitchell v. Mobil Oil Corp., 896 F.2d 468, 474 (10th Cir.), cert. denied, —— USS. , 111 S.Ct. 252, 112 L.Ed.2d 210 (1990). The first part of this conclusion finds support in the decisions of this Circuit. We have held that where, as here, retired employees received in a lump sum benefits that were concededly all to which they were entitled under a plan as it existed at their retirement, their claim is for damages, not vested benefits. Yancy v. American Petrofina, Inc., 768 F.2d 707, 708-09 (5th Cir.1985) (per curiam); Joseph v. New Orleans Electrical Pension & Retirement Plan, 754 F.2d 628, 630 (5th Cir.), cert. denied, 474 U.S. 1006, 106 S.Ct. 526, 88 L.Ed.2d 458 (1985); accord Kuntz, 785 F.2d at 1411. In Yancy, the employer announced its intention to modify the interest rate factor used to calculate lump sum retirement bene- fits, but gave employees approximately three months in which to retire under the older, more generous discount rate. We denied standing to an employee who took early retirement during the three months, received his lump sum payment, then sued alleging that the amendment of the plan violated fiduciary duties imposed by ERISA. We held that, lacking a claim for vested benefits, he could not be deemed a plan “participant.” Yancy, 768 F.2d at 709. 21a For the second part of its conclusion—that the plain- tiff lacked a reasonable expectation of returning to cov- ered employment—the Mitchell court relied on the fact that the plaintiff had not sought reinstatement. Mitchell, 896 F.2d at 474; see also Berger v. Edgewater Steel Co., Y1l F.2d 911, 922 (3d Cir.1990), cert. denied, U.S. » 111 S.Ct. 1810, 113 L.Ed.2d 244 (1991); Kuntz, 785 t'.2d at 1411. In the present case, the only request for reinstatement in appellants’ original complaint is in the ADEA claim, which we have held to be barred by the statute of limitations. See section I, supra. However, this request does indicate that appellants do desire court- ordered reinstatement. We are not convinced that Firestone can be read to reduce the standing question to a straightforward for- mula applicable in all cases. This seems particularly so in cases involving allegations of discharge. ERISA $510, 29 U.S.C. § 1140, makes it unlawful for an employer to “discharge, fine, suspend, expel, discipline, or discriminate against a participant” for exercising a right provided by ERISA or “for the purpose of inter- fering with the attainment” of a right provided by ERISA. The Supreme Court’s recent McClendon deci- sion held that this provision would foreclose the devel- opment of any state law cause of action for wrongful termination to prevent vesting of pension benefits. Ingersoll-Rand Co. v. McClendon, USS. , lll S.Ct. 478, 485, 112 L.Ed.2d 474 (1990). The implication of the Court’s holding that the discharged employee must look solely to ERISA for his remedy is that he would have standing to do so. Nevertheless, it is not readily apparent that he would have standing under the construction of Firestone urged by Mobil: he would be a former employee lacking both a claim for vested bene- fits and (unless he requested reinstatement) a reasonable expectation of returning to covered employment. It would be unusual if in that situation his ability to assert a claim at all turned on whether or not his requested relief included reinstatement; it would seem more logical to say that but for the employer’s conduct alleged to be in violation of ERISA, the employee mould be a current employee with a reasonable expectation of receiving ben- efits. and the employer should not be able through its own malfeasance to defeat the employee's standing. Cf. Amalgamated Clothing and Textile Workers v. Mur- dock, 861 F.2d 1406, 1418 (9th Cir.1988) (“Tt would be ironie if the very acts of benefit payment and plan ter- mination that allegedly resulted in a fiduciary personally obtaining ill-gotten profits should also. serve to deny plan beneficiaries standing . . . to redress the fiducia- ries’ alleged breach of the duty of loyalty.” ).* Therefore, recognizing that we are anchored at one end by Yancy, we also believe that Yancey does not extend so far as to encompass situations such as the one at issue in McClendon. The question then hecomes where on that axis the present case falls. A few per- tinent distinctions between the two cases bear emphasis. Yancy’s position as a retired employee who had received lump sum benefits was largely of his own making. He was informed of the plan amendment and of the effects of each option open to him. Our holding in the case amounts to a decision that he could not both accept the offered inducement for early retirement and then later complain of the choice to which he had been put, if he felt that he was entitled to continue to work and then retire at the time of his choice with a lump sum calcu- lated at the old rate, he was obligated to act consistently with his desired relief by remaining a covered employee 4We do not mean to imply that an employee’s entitlement to certain remedies might not turn on whether or not he was willing to return to work. If, for example, he claimed entitlement to the fully vested pension as damages, it might be perfectly reasonable to re- quire that he return to work at least for the additional length of time required for the pension to vest. However, a wrongful discharge might give rise to other damages as well, for which reinstatement would not seem to be a logical prerequisite. 23a and challenging the plan amendment. The violation he alleged—an amendment of the retirement plan that amounted to a breach of fiduciary duty under ERISA § 409, 29 U.S.C. §1109—was not one that in and of itself divested aggrieved parties of their status as cov- ered employees able to sue. McClendon, on the other hand, had no such choice. A discharge to prevent vesting of benefits in violation of section 510 by definition must be challenged by someone other than a current employee or someone with a claim to vested benefits. Thus, the standing question and the merits of an employee’s claim are unavoidably intertwined to some degree; whether a plaintiff has standing to assert ERISA rights may depend upon whether he can establish a discharge or some other conduct in violation of ERISA, but for which he would have standing. See Amalgamated Cloth- ing, 861 F.2d at 1410. The Third Circuit alluded to this problem in its recent Berger decision. There, Edgewater Steel amended its retirement plan to eliminate two benefits: a lump sum payment in place of the first three months of pension benefits, and a supplemental payment given as an early retirement benefit to employees whose retirement was in the mutual interests of the company and the retiree and was approved by the company. Upon announcement of these changes, Berger and the other plaintiffs chose to retire before the amendments became effective. They each received the three-month lump sum provided auto- matically to all retirees, but none were approved for the supplemental payment. Among the plaintiffs’ allegations were a charge that the elimination of the three-month lump sum amounted to the elimination ef an accrued benefit in violation of ERISA § 204(g), 29 U.S.C. §1054(¢), and a charge that the amendment constituted an intentional interference with their right to both bene- fits, in violation of ERISA § 510, 29 U.S.C. $1140. The court, citing Aunt: and Yancy, held that the plaintiffs 24a did not have standing to assert their section 204(g) claim because they had retired and accepted the benefits in a lump sum, and had not asked for reinstatement. Berger, 911 F.2d at 921-22. However, the court noted the contingency of this conelusion on the denial of the plaintiffs’ section 510 claim. /d. at 922. It stated: “Of course, we recognize that if the Employees were con- structively discharged as they do claim, they would not necessarily have to return to work in order to have standing to claim a make whole remedy.” /d.° On the record before us, we cannot say where on the spectrum between Yancy and McClendon this case falls. Because appellants pleaded their ERISA claims only as contingent on preemption of their state law claims, and because the district court did not rule on the merits of the ERISA claims, appellants have not fleshed out their IK RISA claims and theories, or even identified with pre- 5A Third Circuit decision in a pre-Firestone case provides an even more direct illustration of the contingency of standing on the nature of the ERISA violation alleged. In Saporito v. Combustion Engineering Inc,, 843 F.2d 666 (3d Cir.1988), vacated, 489 U.S. 1049, 109 S.Ct. 1306, 103 L.Ed.2d 576 (1989), the plaintiffs claimed that they had been induced to retire under one retirement. plan While the employer concealed the development of a second plan with more favorable terms. The court held that they did not have standing as participants in the first plan to sue for breach of fiduciary duties because they had retired and received all of the benefit to which they were entitled in a lump sum. 7d. at 671. However, the court did hold that they had standing as participants in the second plan to argue that they had been tricked into retiring in violation of section 510, because they alleged that “but for the selective divulgence of in- formation, they would have been members of [the second plan], and, for the purposes of standing to bring an action under ERISA, should be considered as such.” Jd. at 672; see also id. at 672 n. 7 (distinguishing Stanton v. Gulf Oil Corp., 792 F.2d 482 (4th Cir. 1986), in which the plaintiff urged “but for” participant standing, but his claim was rejected because the events precluding standing were under his control). Saporito was vacated and remanded by the Supreme Court for further consideration in light of Firestone, 489 U.S. 1049, 109 S.Ct. 1306, 103 L.Ed.2d 576 (1989). 25a cision which sections of ERISA they claim were vio- lated. However, their allegations do at least suggest an assertion that they were constructively discharged in vio- lation of section 510 and that but for Mobil’s nondisclo- sure they would be covered employees with standing to challenge the plan amendment. They allege deceptive conduct by Mobil that might be found to vitiate the vol- untariness of their decision to retire and that might dis- tinguish the present case from both Yancy and Mitchell. Appellants also sought reinstatement in their ADEA action, and did not affirmatively indicate that reinstate- ment was not sought under their ERISA claims. For these reasons, we cannot now foreclose the possibility that they could prove facts that would create standing for them, and we believe that the trial court’s dismissal on the pleadings of the ERISA claims was premature. Of course, appellants can, and doubtless should, be required to plead their ERISA claims with greater speci- ficity. We emphasize that we have not determined that appellants will be able to establish a violation of section 510, only that they should be allowed to attempt to do so, We reverse the trial court’s dismissal of appellants’ ERISA claims and remand for further proceedings con- sistent with this opinion. Conclusion lor the reasons stated above, we affirm the district court’s grant of summary judgment to Mobil on the ADEA claims and its grant of judgment on the plead- _ings for Mobil on all of appellants’ state law claims. However, we reverse and remand the district court’s dis- missal of appellants’ ERISA claims. AFFIRMED In Part; ReverseED And REMANDED In Part. linen 26a Order of the United States District Court for the Eastern District of Texas granting Motion for Judgment on the Pleadings and Motion to Dismiss, June 22, 1990 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS BEAUMONT DIVISION Civ. No. B-89-0653-CA June 22, 1990 GERALD W. CHRISTOPHER, et al., Plaintiffs, | MosBIL OIL CORPORATION, eft al., Defendants. ORDER 1. CAME ON to be considered the Motion for Judg- ment on the Pleadings and Motion to Dismiss filed by defendants Mobil Oil Corporation, the Retirement Plan of Mobil Oil Corporation and Rex Adams (collectively, “Mobil’’) ; and the Court, having considered such Motion, the supporting memorandum, and plaintiffs’ opposition thereto, finds: A. Plaintiffs’ state-law claims are preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”) because those claims relate to Mobil’s Retirement Plan, which is governed by ERISA, and directly overlap with provisions of ERISA; 27a B. Plaintiffs are not participants seeking to re- cover benefits under Mobil’s Retirement Plan and therefore have no cause of action under ERISA § 502; and C. The Court lacks jurisdiction over plaintiffs’ ERISA claim because plaintiffs do not have a cause of action under ERISA. 2. Based on these findings, the Court is of the opinion ] that said motion should be in all things GRANTED. 3. It is therefore OrDERED, ADJUDGED and DECREED by the Court that defendants’ Motion for Judgment on the Pleadings and Motion to Dismiss be, and the same hereby is, GRANTED and the case dismissed in its entirety with prejudice, at plaintiffs’ cost. SIGNED THIS 22nd DAY oF JUNE, 1989 [sic]. S/ Richard A. Schell United States District Judge 28a Order of the United States District Court for the Eastern District of Texas granting Motion for Summary Judgment, June 22, 1990 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS BEAUMONT DIVISION Civ. No. B-89-0653-CA June 22, 1990 GERALD W. CHRISTOPHER, et al., Plaintiffs, | MosIL OIL CORPORATION, ef al.. Defendants. ORDER 1. CAME ON to be considered the Motion for Sum- mary Judgment filed by defendants Mobil Oil Corpora- tion, the Retirement Plan of Mobil Oil Corporation and Rex Adams (collectively, “Mobil”): and the Court, hav- ing considered such Motion, the supporting memoran- dum, statement of undisputed facts, declaration and affidavit, and plaintiffs’ opposition thereto, finds: A. Plaintiffs’ Age Discrimination in Employment Act (“ADEA”) claims are time-barred because (7) plaintiffs did not file an age-discrimination charge with the Equal Employment Opportunity Commis- sion within 300 days after the alleged discrimination occurred (29 U.S.C. §$ 626(d)(2)), and (ii) plain- 29a tiffs did not file a lawsuit under ADEA within three years after the alleged discrimination occurred (29 U.S.C. $$ 255(a), 626(e)): B. Plaintiffs’ state-law claims are time-barred by applicable statutes of limitations; C. Plaintiffs were not constructively discharged in violation of ADEA; and D. Plaintiffs’ claims of discrimination arise from changes in the fringe benefits available under Mobil’s bona fide Retirement Plan, not from any conduct related to the nonfringe-benefit aspects of plaintiffs’ employment, and are therefore not within the scope of ADEA pursuant to 29 U.S.C. § 623(f) 2). 2. Based on these findings, the Court is of the opinion that said motion should be in all things GRANTED. 3. It is therefore ORDERED, ADJUDGED and DECREED by the Court that defendants’ Motion for Summary Judgment be, and the same hereby is, GRANTED and the case dismissed in its entirety with prejudice, at plain- tiffs’ cost. SIGNED THIS 22nd DAy OF JUNE, 1989 [sic]. s/ Richard A. Schell United States District Judge 80a Order of the United States Court of Appeals for the Fifth Circuit denying appellants’ petition for rehearing, February 24, 1992 is COURT OF APPEALS IN THE UNITED STATE FIFTH CIRCUIT FOR THE FI No. 90-4562 Filed: Feb. 24, 1992 GERALD W. CHRISTOPHER, CHARLES L. PRUNTY and BILLY G. TURNER, Plaintiffs-A ppellants, versus Mori OL CORPORATION, RETIREMENT PLAN OF MosBIL OIL CORPORATION AND REX ADAMS, Defendants-A ppellees. Appeal from the United States District Court for the Eastern District of Texas ON PETITION FOR REHEARING Before: HFENLEY*, KING, and GARWoop, Circuit Judges. * Circuit Judge of the Eighth Circuit, sitting by designation. 3la PER CURIAM: IT IS ORDERED that appellants’ petition for rehearing filed in the above entitled and numbered cause be and the same is hereby DENIED. ENTERED FOR THE COURT: s/ Will Garwood United States Circuit Judge 32a Denial of Motion for Summary Judgment of the United States District Court for the District of Colorado, dated June 25, 1992 11] IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action Ne, 88-Z-2112 FREDERIC J. RAYMOND, et al., Plaintiffs, VS. Monit OU. CORPORATION, et al., Defendants, REPORTER’S TRANSCRIPT (Hearing on Motion for Summary Judgment) Proceedings before the HONORABLE ZITA L. WEIN- SHIENK, Judge, United States District Court for the District of Colorado, commencing at 9:50 a.m., on the 25th day of June, 1992, Courtroom C-502, United States Courthouse, Denver, Colorado. APPEARANCES PryorR, CARNEY, and JOHNSON, P.C., by RopNey R. PATULA and ELIZABETH MORAN, Attorneys at Law, 6200 South Svracuse Way, Suite 400, Englewood, Colorado, 80155, appearing for the plaintiffs. HADDON, MorRGAN & FOREMAN, P.C., by HARoLp A. HADDON and MAUREEN A. CAIN, Attorneys at Law, 150 East Tenth Avenue, Denver, Colorado, 80203; LoREN 33a KIEve, Attorney at Law, Debevoise & Plimpton, 555 13th N.W., Washineten, D.C., [2] 20004, and MICHAEL FE. TiGAr, Attorney at Law, 727 East 26th Street, Austin, Texas, 78705, appearing for the defendant. St reet * * * * THE COURT: Thank you. [ think perhaps we should start, if you want to just have a seat for a moment— MR. TIGAR: Yes, your Honor. THE COURT: —by my telling you how this looks to me on the briefing and on the paper. This is a motion for summary judgment on the ERISA claims, and it appears to me from looking at the briefs, from looking at the claims, from reviewing the Christopher v. Mobil Ov! case in the Fifth Cireuit and the [3] Mitchell v. Mobil Oil case in this circuit and all of the other cases that have been decided, including Firestone, that what Plaintiff has done in pleading this ERISA or these ERISA claims is to fit them as closely as possible under the rulings of Christopher and trying to avoid in the pleading the ad- verse effects of rulings of Mitchell. And it appears to me also that reading Christopher carefully, there are factual issues which were left open under Christopher, which were not discussed in Mitchell, which probably this court is going to have to try. Now, that’s how it looks on paper; and I’m certainly going to listen to the arguments of the defendants as to why this is not the case. But I think we have some pri- mary cases here to consider. Well, the two core cases that were argued in the briefs were the Chinstopher case and the Mitchell case. But if this case is fit very care- fully under the ruling in Christopher and does not appear to be covered by the ruling in Mitchell, then the motion will have to be denied. 7 * 7 aa 34a [38] RULING THE COURT: Well, let me address Boren. Mr. Boren was not an employee within the meaning of ERISA; and when he asked to be treated as if he were a former employee, he is asking for a determination that he was at one time an employee, as opposed to the position of the plaintiffs. As I understand Plaintiffs’ theory is saying that but for the actions of Defendant, they still would be employees of Defendant; and this case is predicated on the fact that they were employees at one time, unlike Boren. I realize that Judge McKay, who this court has the most high respect for—and I do for Judge Moore, too, and all the Tenth Circuit judges—made some statements in Boren which appear to be fairly broad statements. But indeed, in looking at the facts of Boren, they were talking about a factual situation which does not appear to me, at least, to apply in this case. There are many rules and many cases about granting motions for summary judgment, and I think judges some- times overlay on this law their own experiences with sum- mary judgment. Having been a judge for a long time, I have an overlay; and that is, it’s sort of like the old “T know it when I see it,’ which used to be the rule in pornography cases. When I am [39] comfortable that there are no factual issues and when I can grant some- thing as a matter of law, when I have that feeling that there are no factual issues, when I have to decide the case on summary judgment and all the facts and the arguments convince me of that, then I grant the motion for summary judgment—yvou know—considering all of the other cases that are there on summary judgment. But when I have this lingering feeling that there may be factual issues, even though I think probably there is going to be a difficult time, there is going to be a difficult effort of plaintiff to prove these factual issues—-I don’t 35a think it’s going to be easy; I think it’s going to be most difficult—when I have this nagging feeling that well, I’m not sure as a matter of law that we've really taken care of all factual issues, then I simply have to resolve it by denying the motion for summary judgment. Now, what we have here are two very important cases, one in the Tenth Circuit and one in the Fifth Circuit. And the question is, can they be distinguished? Does the Fifth Cireuit carve out an area which was not considered by the Tenth Circuit and which has to be considered by this court, even in view of the strong ruling of the Tenth Circuit? And I will admit, as much respect as I do have for the judges that decided Mitchell v. Mobil, I really do wonder if they read my opinion carefully on the ERISA claims in finding [40] that he didn’t seek reinstatement—that Mr. Mitchell didn’t. Be that as it may, that’s the rule. I’m bound by that decision. I have no intent to be overruled in the Tenth Circuit, if I can uphold it; and what we have, then, is the Fifth Circuit carving out a little area from Mobil and saying, if I can just paraphrase what they say on 1223 of their opinion—and maybe I better put this on the record. For the record, Christopher v. Mobil is 950 F.2d 1209, Fifth Circuit, 1992. What they say is here’s an area that might—might; it isn’t for sure—might distin- guish this case from Mitchell, and that is if a plaintiff is alleging deceptive conduct which vitiates the voluntariness of the decision to retire, the “but for” test, that might distineuish this case from Mitchell. Plaintiffs have fit in this case right to that exception; and they say, We are alleging and we intend to prove— now, I don’t know if they’re going to be able to prove it; it’s going to be tough—but we are alleging and we intend to prove deceptive conduct which will show that none of these plaintiffs would have retired, had they not been deceived, had they not been defrauded. We're talk- ing about fraud here. iii 36a Maybe it was hinted at in Mi/chell, and I don’t know what you folks argued; but it really didn’t come out that way, it seems to me, in the trial that strongly. So here’s an area: Mitchell (sic), they’re arguing, we're alleging, committed fraud on us, deceived us. We would [41] not have retired had we known the truth, had we not been deceived, had we not been defrauded. The Fifth Circuit, good judges, say this distinguishes or this might distinguish this case from Mitchell. All these circuit judges are supposed to be really experts in the law, may be experts in the law more than the trial judges. At least they have the last word. So here are the judges, the three judges on the Fifth Circuit saying, Here’s an area that’s different, might be distinguished. I’m not going to say it can’t be distinguished. I’ve got that feeling that boy, I’m not sure. I’m not sure that they can't prove it. And if they can they can prove it, they have to have the chance to prove it. I think one must read the law also with good common sense and good judgment; and if, indeed, hypothetically an employee has been deceived by an employer—I’m not talking about Mobil now, but just what is the policy, what should be the law. If an employee has been deceived, de- frauded by the employer, and retires because of that de- ceit when they never would have retired, does that mean they can’t sue under 510, just because they’ve taken bene- fits? And common sense tells us there have to be—there has to be an exception to the flat rule stated in Mitchell, and this deceptive conduct certainly from a matter of policy, from a matter of good common sense, seems to be that area. [42] So even though there might be a bright line rule in Mitchell, there appears to this court that there might very well be, as stated by the Christopher court, a way of distinguishing that; and that is if there is deceptive conduct. Now, if the plaintiffs can prove it—I don’t know if they can prove it sufficiently—but if they can prove it, ee a 37a then I think we do have a distinguishing feature and I think they have brought their case in an area that fits under—fits under the Christopher case and may very well be an area which would cause the Tenth Circuit to Say, You know, we didn’t really mean that. We really didn’t mean that if there is something promised the following year and then they're defrauded and they’re retiring be- cause they're defrauded that the ERISA—that they’re foreclosed from suing under ERISA. So looking at the statute with good judgment and what the policy should be, which is to protect the employees, looking at the fact that these were employees, their alle- gation is that they would not have retired. They have brought this case under the very narrow confines of Christopher. I don’t feel I can grant the motion for summary judg- ment; and accordingly, the motion for summary judgment on the ERISA claims will be denied and we'll have to hear what the facts are. Now, one more thing: We now no longer have motions for directed verdict in Federal Court. We have motions for [43] judgment on the law. The rules have been changed. So if, indeed, this proof does not come forward, I’ll be hearing your argument, maybe not even at the end of the plaintiffs’ case maybe in the middle of the plain- tiffs’ case, when they have a chance to go through ERISA, whichever one they’re going to prove first. But this is something that I’m sure that will come'up for argument in the trial case—in the trial. * * * * 88a STATUTORY PROVISIONS ERISA § 3(7), 29 U.S.C. § 1002(7) For purposes of this subchapter: (7) The term “participant” means any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose bene- ficiaries may be eligible to receive any such benefit. ERISA § 502, 29 U.S.C. § 1132 (a) Persons empowered to bring a civil action A civil action may be brought— (1) by a participant of beneficiary— (A) for the relief provided for in subsection (c¢) of this section, or (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan; (2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1169 of this title; (3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief/7) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan; 39a (4) by the Secretary, or by a participant, or benefi- clary for appropriate relief in the case of a violation of [section] 1025(e) of this title; (5) except as otherwise provided in subsection (b) of this section, by the Secretary (A) to enjoin any act or practice which violates any provision of this subchapter, or (B) to obtain other approrpiate equitable relief (i) to redress such violation or (ii) to enforce any provision of this subchapter; or (6) by the Secretary to collect any civil penalty under subsection (¢) (2) or (i) or (1) of this section. (b) Plans qualified under Internal Revenue Code; main- tenance of actions involving delinquent contributions (1) In the case of a plan which is qualified under sec- tion 401(a), 403(a), or 405(a) of Title 26 (or with re- spect to which an application to so qualify has been filed and has not been finally determined) the Secretary may exercise his authority under subsection (a) (5) of this section with respect to a violation of, or the enforcement of, parts 2 and 3 of this subtitle (relating to participa- tion, vesting, and funding), only if— (A) requested by the Secretary of the Treasury, or (B) one or more participants, beneficiaries, or fiduciaries of such plan request in writing (in such manner as the Secretary shall prescribe by regula- tion) that he exercise such authority on their behalf. In the case of such a request under this paragraph he may exercise such authority only if he determines that such violation affects, or such enforcement is necessary to protect, claims of participants or bene- ficiaries to benefits under the plan. (2) The Secretary shall not initiate an action to en- force section 1145 of this title. 40a (c) Administrator's refusal to supply requested infor- mation; penalty for failure to provide annual report in complete form (1) Any administrator (4) who fails to meet the re- quirements of paragraph (1) or (4) of section 1166 of this title or section 1021(e) (1) of this title with respect to a participant or beneficiary, or (2) who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to fur- nish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the eontrol of the administrator) by mailing the material requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court’s discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper. (2) The Secretary may assess a civil penalty against any plan administrator of up to $1,000 a day from the date of such plan administrator’s failure or refusal to file the annual report required to be filed with the Secre- tary under section 1021(b) (4) of this title. For purposes of this paragraph, an annual report that has been re- jected under section 1024(a) (4) of this title for failure to provide material information shall not be treated as having been filed with the Secretary. (3) Any employer maintaining a plan who fails to meet the notice requirement of section 1021(d) of this title with respect to any participant or beneficiary or who fails to meet the requirements of section 1021(e) (2) of this title with respect to any person may in the court’s discretion be liable to such participant or beneficiary or te such person in the amount of up to $100 a day from the date of such failure, and the court may in its discre- tion order such other relief as it deems proper. 4la (d) Status of employee benefit plan as entity (1) An employee benefit plan may sue or be sued under this hea ea as an entity. Service of summons, subpoena, or other legal process of a court upon a trustee or an ne eS ine tor of an .employee benefit plan in his capacity as such shall constitute service upon the em- ployee benefit plan. In a case where a plan has not desig- nated in the summary plan description of the plan an individual as agent for the service of legal process, service upon the Secretary shall constitute such service. The Secretary, not later than 15 days efter receipt of service under the preceding sentence, shal] notify the adminis- trator or any trustee of the plan of receipt of such service, (2) Any money judgment under _ this subchapter against an employee benefit plan shall be enforceable only against the plan as an entity and~shall not be en- forceable against any other person unless liability against such person is established in his individual capacity under this sube hap ver, (e) Jurisdiction ii a (1) Except for actions under subsection (a) (1+(B) of this section, the district courts of the United States shall ] have exclusive jurisdiction Of ely ictions under this subchapter brought by the Secretary or by a participant beneficiary, or fiduciary. mane courts of competent juris- diction and district courts of the United States shall have concurrent jurisdiction of setines under subsection (ai {1l)'B) of this section. (2) Where an action under this subchapter is brought in a district court of the United States. it may be brought “4 +i sat 77 + rt] 5" + 1, , ]. , ‘ In : m + . ] * Re . i in the district where the pidal Is aAUCMINIstered, where tne 1 ? _ rin Le ‘ Fai ‘ + . ~ 7) breach took place, or where a defendant resides o1 e . 20% ’ _ re % ‘ rT ee be found, and process may be served in any 0 her district Where a defendant resides or may be found. ~ ~ tc ‘ 42: (f) Amount in controversy; citizenship of parties The district courts of the United States shall have ju- risdicion, without respeet to the amount in controversy or the citizenship of the parties, to grant the relief pro- vided for in subsection (a) of this section in any action. (xg) Attorney's fees and costs; awards in actions involv- ing delinquent contributions (1) In any action under this subchapter (other than an action described in paragraph (2)) by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party. (2) In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan— (A) the unpaid contributions, (B) interest on the unpaid contributions, (C) an amount equal to the greater of (1) interest on the unpaid contributions, or (ii) liquidated damages provided for under the plan in an amount not in excess of 20 per- cent (or such higher percentage as may be per- mitted under Federal or State law) of the amount determined by the court under subpara- graph (A), (I1)) reasonable attorney’s fees and costs of the action, to be paid by the defendant, and (Ig) such other legal or equitable relief as the court deems appropriate. For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate pro- vided under the plan, or, if none, the rate prescribed under section 6621 of Title 26. 43a (h) Service upon Secretary of Labor and Secretary of Treasury A copy of the complaint in any action under this sub- chapter by a participant, beneficiary, or fiduciary (other than an action brought by one or more participants or beneficiaries under subsection (a) (1)(B) of this section which is solely for the purpose of recovering benefits due such participants under the terms of the plan) shall be served upon the Secretary and the Secret: iry of the Treasury by certified mail. Either secretary shall have the right in his discretion to intervene in any action, except that the Secretary of the Treasury may not in- tervene in any action under part 4 of this subtitle. If the Secretary brings an action under subsection (a) of this section on behalf of a participant or benefici: iry, he shall notify the Secretary of the Treasury. (i) Administrative assessment of civil penalty In the case of a transaction prohibited by section 1106 of this title by a party in interest with respect to a plan to which this part applies, the Secretary may assess a civil penalty against such party in interest. The amount of such penalty may not exceed 5 percent of the amount involved in each such transaction (as defined in section 4975(f) (4) of Title 26) for each year or part thereof during which the prohibited transaction continues, ex- cept that, if the transaction is not corrected (in such manner as the Secretary shall prescribe in regulations which shall be consistent with section 4975(f) (5) of Title 26) within 90 days after notice from the secretary (or such longer period as the Secretary may permit), such penalty may be in an amount not more than 100 percent of the amount involved. This subsection shall not apply to a transaction with respect to a plan described in sec- tion 4975(e) (1) of Title 26. (j) Direction and control of litigation by Attorney General In all civil actions under this subchapter, attorneys appointed by the Secretary may represent the Secretary 44a (except as provided in section 518(a) of Title 28), but all such litigation shal! be subjeet to the direction and control of the Attorney General. (k) Jurisdiction of actions against the Secretary of Labor Suits by an administrator, fiduciary, participant, or beneficiary of an employee benefit plan to review a final order of the Secretary, to restrain the Secretary from taking any action contrary to the provisions of this chapter, or to compel him to take action required under this subchapter, may be brought in the district court of the United States for the district where the plan has its principal office, or in the United States District Court for the District of Columbia. (7) Civil penalties on violations by fiduciaries (1) In the case of— (A) any breach of fiduciary responsibility under (or other violation of) part 4 by a fiduciary, or (B) any knowing participation in such a breach or violation by any other person, the Secretary shall assess a civil penalty against such fiduciary or other person in an amount equal to 20 per- cent of the applicable recovery amount. (2) For purposes of paragraph (1), the term “appli- cable recovery amount” means any amount which is re- covered from a fiduciary or other person with respect to a breach or violation described in paragraph (1)— (A) pursuant to any settlement agreement with the Secretary, or (B) ordered by a court to be paid by such fi- duciary or other person to a plan or its participants and beneficiaries in a judicial proceeding instituted 45a by the Secretary under subsection (a) (2) or (a) (5) of this section. (3) The Secretary may, in the Secretary’s sole dis- cretion, waive or reduce the penalty under paragraph (1) if the Secretary determines in writing that— (A) the fiduciary or other person acted reasonably and in good faith, or (B) it is reasonable to expect that the fiduciary or other person will not be able to restore all losses to the plan without severe financial hardship unless such waiver or reduction is granted. (4° The penalty imposed on a fiduciary or other per- son under this subsection with respect to any transaction shall be reduced by the amount of any penalty or tax imposed on such fiduciary or other person with respect to such transaction under subsection (i) of this section and section 4975 of Title 26. ERISA § 510, 29 U.S.C. § 1140 It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a par- ticipant or beneficiary for exercising any right to which he is entitled under the provisions of an employee bene- fit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act [29 U.S.C. s 301 et seq.], or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act. It shall be unlawful for any person to discharge, fine, suspend, ex- pel, or discriminate against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this chapter or the Welfare and Pension Plans Disclosure Act. The pro- visions of section 1132 of this title shall be applicable in the enf«rcement of this section. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0705%3A4. Public record. Not legal advice.