Opposition Brief — Wright v. AMF Corp.

No. 94-289

In The

Supreme Court of the United States

October Term 1994

DONALD W. WRIGHT, JACK W. BELL,

KENNETH A. BRAUN, HILDEGARDE E. CUTTS,

J. E. DUNN, and RALPH STROHMAIER,

Fotehsnvor

Petitions

AMF CORPORATION, and AMF VOIT, INC.,

Respondents.

~

On Petition For Writ Of Certiorari

To The Supreme Court Of California

—~---@

BRIEF IN OPPOSITION

—_—¢

LATHAM & WATKINS

WittiAM C. Bortcer, JR.

JoserpH B. Farrett

ANDREW M. PALEY

633 West Fifth Street, Suite 4000

Los Angeles, California 90071

(213) 485-1234

*

Attorneys for Respondents AMF

Corporation and AMF Voit, Inc.

* Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

R CALL COLLECT (402) 342-2831

BEST AVAILABLE COPY

QUESTION PRESENTED

Whether the Employment Retirement Income Secu-

rity Act of 1974 (“ERISA”), 29 U.S.C. § 1144(a), preempts

common law claims for allegedly failing to pay severance

benefits pursuant to a severance benefit plan in effect at

the time of the sale of the assets of a corporate employer.

ii

PARTIES

Petitioners Donald W. Wright, Jack W. Bell, Kenneth

A. Braun, Hildegarde E. Cutts, J.E. Dunn and Ralph

Strohmaier are individuals and were the Plaintiffs -

Appellees below. Respondents are informed and believe

that petitioner Ralph Strohmaier is deceased. Respon-

dents AMF Corporation (“AMF”) and AMF Voit, Inc.

(“Voit”) are corporations and were Defendants - Appel-

lants below. AMF and Voit’s parent company is Minstar,

Inc. Voit is a wholly-owned subsidiary of AMF. Neither

Voit nor AMF have any non-wholly owned subsidiaries.

ili

TABLE OF CONTENTS

Page

8 8 8 ss i

NEN UA ae wes e So one ec cvenccs vase e's ii

wamamemeys OF TME CASE...............0cc scene 1

suremememe OP ARGUMENT.................00000. 2

REASONS FOR DENYING THE WRIT............. 2

I. THE CALIFORNIA COURT OF APPEAL’S

DECISION IS IN CONFORMITY WITH THIS

COURT’S HOLDING IN MASSACHUSETTS v.

EE ee ee 3

II. THIS COURT’S DECISIONS SUBSEQUENT TO

MORASH HAVE REAFFIRMED THE BROAD

SCOPE OF ERISA PREEMPTION ............ 5

lil. THE COURT OF APPEAL’S HOLDING THAT

AMF’S CORPORATE POLICY 3-17 CONSTI-

TUTES AN ERISA PLAN IS IN CONFORMITY

WITH UNITED STATES AND CALIFORNIA

SUPREME COURT CASE LAW .............. 8

IV. THE COURT OF APPEAL PROPERLY RECOG-

NIZED THAT AN EMPLOYER’S UNDER-

STANDING OF THE APPLICABILITY OF

ERISA DOES NOT AFFECT THE OPERATION

OF ERISA AS A MATTER OF LAW.......... 9

V. PETITIONERS’ RELIANCE ON CHAPIN uv.

FAIRCHILD CAMERA AND INSTRUMENT

CORPORATION IS MISPLACED............. 10

ao dah Sago vy Wako vob ence neces sec 12

iv

TABLE OF AUTHORITIES

Page(s)

CASES

Adams v. AMPCO-Pittsburgh Corporation, 733

F.Supp. 998 (W.D. Pa. 1989) aff'd. without op., 961

eB ge ee ey | ere rer ee ceT Te ee 11

Adams v. Avondale Industries, Inc., 905 F.2d 943 (6th

Cir. 1990) cert. denied, 498 U.S. 984 (1990)....... 6, 11

Allen v. Adage, 967 F.2d 695 (1st Cir. 1992) .......... 11

Awbrey v. Pennzoil Co., 961 F.2d 928 (10th Cir. 1992) .... 11

Bowman v. Firestone Tire & Rubber Co., 724 F.Supp.

Se SP I a ee ies Fhe ae as ese Heuer nes 11

Bradwell v. GAF Corp., 954 F.2d 798 (2nd Cir. 1992).... 11

Carpenters So. Cal. Admin. Corp. v. El Capitan Devel-

opment Co., 53 Cal. 3d 1041, 282 Cal. Rptr. 277

(1991), cert. denied, _. U.S. __, 112 S.Ct. 430

COE as hain ek Rw K ONS kn edd ORANGE MEGA RR ONES 5408 « 7

Chapin v. Fairchild Camera and Instrument Corpora-

tion, 31 Cal. App. 3d 192, 107 Cal. Rptr. 111

CUPS is hs ches canes whae hokey eRe ar wee NIRA a8 4 10, 11

Commercial Life Ins. Co. v. Superior Court, 47 Cal. 3d

473, 253 Cal. Rptr. 682 (1988), cert. denied, 490

be ge) ere ere pe fe Ors Pee 7

District of Columbia v. Greater Washington Board of

Freee)... Gh. 3 BAS A, ee CR see esd ws oes 6

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,

Be due, WE EE aa Ne ub ade res Ladecne denn tndc 10

FMC Corp. v. Holliday, 498 U.S. 52, 111 S.Ct. 403

(LOPE) Keen Rika Aah ee ass CMe Rane cape ans oe 5, 6

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 107

Pes SEG SEOUMDR 0 5SAs i bes skakedaweteeeceedenees 8, 9

Vv

TABLE OF AUTHORITIES - Continued

Page(s)

Franklin v. Pitney Bowes Inc., 919 F.2d 45 (6th Cir.

Sc as 6 add Sad Oh 6 WER ee 11

Gilbert v. Burlington Industries, Inc., 765 F.2d 320

(2nd Cir. 1985), summarily aff'd, 477 U.S. 901, 106

SAS. SaOe, OE LOO Boe COPMG). occ ces cccccvcvnes y

Gray v. Quaker Fabric Corporation of Fall River, 809

F.Supp. 163 (D. Mass. 1992), aff’d., 6 F.3d 849

CRE Te re a a ae en ek ae ee eee ke vas 6

Holland v. Burlington Industries, Inc., 772 F.2d 1140

(4th Cir. 1985), summarily aff'd, 477 U.S. 901, 106

DC4. S267, FE LOO Soe (I9GE). 2. oe cc ccccneees 9

Ingersoll-Rand v. McClendon, 498 U.S. 133, 111 S.Ct.

Se CE ES o ORR ESR TRE hs 6

Lakey v. Remington Arms Co., Inc., 874 F.2d 541 (8th

a I SES Banco na bbs k RR AE ek il

Lesman v. Ransburg Corp., 719 F.Supp. 619 (W.D.

eee eee er re ere ae ene 11

Marshall v. Bankers Life & Casualty Co., 2 Cal. 4th

1045, 10 Cal. Rptr.2d 72 (1992), cert. denied, __

BP os ee Mie WEE CRUNED e nedondccskedes nade 7, 10

Massachusetts v. Morash, 490 U.S. 107, 109 S.Ct.

I kee hue Geeta ie soe ae y Tay. a

Morishige v. Spencecliff Corp., 720 F.Supp. 829 (D.

I los eek adn d ae due da Lele deni eas’ 6

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct.

Ce , ort oe er er ry anne 2

Scott v. Gulf Oil Corp., 754 F.2d 1499 (9th Cir. 1985) ..... 6

vi

TABLE OF AUTHORITIES - Continued

Sejman v. Warner-Lambert Co., Inc., 889 F.2d 1346

(4th Cir. 1989), cert. denied, 498 U.S. 810 (1990)....

Shaw v. Delta Air Lines, 463 U.S. 85, 103 S.Ct. 2890

ee ns as,

Silvera v. Mutual Life Ins. Co. of New York, 884 F.2d

CS Ee or er eT Ter er

Southern California Chapter of Associated Builders

and Contractors, Ins., Joint Apprenticeship Com-

mittee v. California Apprenticeship Council, 4 Cal.

4th 422, 14 Cal. Rptr. 2d 491 (1992)...........

STATUTES AND OTHER AUTHORITIES

Se

icc nccccarcccscvcccersens:

ee |

NE ia nk bse d sed adeeeeevanseaesess

Employee Retirement Income Security Act § 3(1)

Employee Retirement Income Security Act

ea sa Gry aos betwee

Employee Retirement Income Security Act

eas 6554 kos 48 HOO ao ude aH AS44808

Page(s)

STATEMENT OF THE CASE

This is an action for severance benefits. Petitioners,

former employees of AMF Voit, Inc. (“Voit”), a wholly

owned subsidiary of AMF Corporation (“AME”) (collec-

tively “Respondents”), seek review of the California

Court of Appeal’s unpublished and unanimous decision

affirming the trial court’s judgment in favor of Respon-

dents. The underlying action arose out of the sale of the

assets of Voit to Reltron Corporation (“Reltron”). Follow-

ing Reltron’s purchase of the assets of Voit as an ongoing

business, Reltron offered employment to Petitioners at

their previous salaries and Petitioners did not miss any

days of work. Each of these Petitioners who, at a later

date, were involuntarily terminated from their employ-

ment at Reltron received severance benefits which were

calculated based upon the entire period of time that those

Petitioners were employed at Voit as well as Reltron.

Nevertheless, at trial Petitioners claimed that they were

entitled to severance benefits from AMF and Voit.

The trial court found as a matter of law and fact that

under the provisions of the Employee Retirement Income

Security Act, 29 U.S.C. § 1101 et seq. (“ERISA”), Peti-

tioners were ineligible for severance benefits under the

terms of AMF Corporate Policy 3-17 (as modified by the

Voit General Statement) — the severance benefit plan in

effect at the time of the sale of the assets of Voit. Peti-

tioners appealed the trial court’s judgment and attempted

to challenge the California Court of Appeal’s previous

determination that Petitioners’ claims for severance bene-

fits are governed exclusively by ERISA. The California

Court of Appeal again held that Petitioners’ state law

claims are preempted by ERISA and affirmed in full the

Superior Court’s judgment in favor of Respondents. The

California Supreme Court denied Petitioners’ Petition for

Review of the Court of Appeal’s decision.

e

SUMMARY OF ARGUMENT

This case presents no issue appropriate for the

Court’s exercise of its discretionary jurisdiction. The deci-

sion below is correct. In this routine ERISA preemption

case, the courts below simply followed this Court’s deci-

sions in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct.

1549 (1987), Massachusetts v. Morash, 490 U.S. 107, 109

S.Ct. 1668 (1989), and other similar ERISA preemption

cases decided by this Court, the California Supreme

Court, and other federal circuit courts regarding the wide

breadth of ERISA preemption. Review is not needed

either to secure uniformity of decision or to settle impor-

tant questions of law not previously addressed by this

Court. The petition for writ of certiorari should be

denied.

REASONS FOR DENYING THE WRIT

This case presents no novel question of law. Instead,

Petitioners proffer for review the well established propo-

sition that state law claims for severance benefits are

preempted by ERISA. The decision of the California

Court of Appeal is in complete harmony with this Court’s

ERISA preemption decisions, as well as California

Supreme Court and other federal circuit court decisions

holding that all state law claims under a plan for sever-

ance benefits are preempted by ERISA. Further action by

this Court is not necessary. There is simply no important

question of law to be settled. Moreover, because the

Court of Appeal applied the proper rule of law in decid-

ing this case, review of the Court of Appeal’s decision is

not required to secure uniformity of decision. Petitioners

simply seek an opportunity to restate the same factual

arguments which have been repeatedly rejected by the

courts below.

ik.

THE CALIFORNIA COURT OF APPEAL’S DECISION

IS INCONFORMITY WITH THIS COURT’S HOLDING

IN MASSACHUSETTS v. MORASH

Petitioners mistakenly contend that the Court of

Appeal’s decision is in conflict with this Court’s holding

in Massachusetts v. Morash, 490 U.S. 107, 109 S.Ct. 1668

(1989). Petitioners erroneously rely on Morash for the

proposition that severance benefits paid out of the gen-

eral funds of an employer are not governed by ERISA. In

Morash, the Court held that ERISA did not preempt a

Massachusetts criminal statute concerning a defendant

employer’s failure to pay accumulated vacation benefits

to employees who were terminated. Id. at 120, 121. The

Court explicitly distinguished severance benefit plans

which consiitute employee welfare benefit plans under

ERISA § 3(1), 29 U.S.C. § 1002(1), from unfunded vacation

plans. The Court stated “plans to pay employees sever-

ance benefits, which are payable only upon termination of

employment, are employee welfare benefit plans within

the meaning of the Act.” Id. at 116 (emphasis in original).

Petitioners fundamentally misunderstand the hold-

ing and rationale of Morash. Petitioners attempt to

explain away the language which explicitly contradicts

their theory by arguing that this language is mere “dic-

tum.” (Petition at 13). Petitioners argue that the rationale

underlying the decision in Morash is “whether or not the

benefit was paid from the general assets of the

employer.” (Petition at 14). This is simply not so. As the

Court of Appeal recognized, this Court’s decision is pred-

icated on the fact that, unlike employee welfare benefits

governed by ERISA, such as severance benefits, vacation

benefits are vested, non-contingent benefits.

“Because ordinary vacation payments are typ-

ically fixed, due at known times, and do not

depend on contingencies outside the employee’s

control, they present none of the risks that

ERISA is intended to address. . . . This conclu-

sion is supported by viewing the reference to

vacation benefits not in isolation but in light of

the words that accompany it and give the provi-

sion meaning... . The distinguishing feature [of

the benefits which constitute employee welfare

benefits under ERISA] is that they accumulate

over a period of time and are payable only upon

the occurrence of a contingency outside of the

control of the employee. Thus, for example,

plans to pay employees severance benefits,

which are payable only upon termination of

employment, are employee welfare benefit plans

within the meaning of the Act.” (Citations omit-

ted, emphasis in original).

Morash, 409 U.S. at 115, 116. Additionally, the Court

stated “[u]nlike normal severance pay, the employee’s

right to compensation for accrued vacation time is not

contingent upon the termination of their employment.”

Id. at 119.

The Court’s discussion of funded and unfunded

vacation benefits arises solely to the extent that the Court

holds that only unfunded vacation benefit plans are

excluded from ERISA because “beneficiaries of [a funded

vacation plan] face far different risks and have far greater

need for the reporting and disclosure requirements that

the federal law imposes than those whose vacation bene-

fits come from the same fund from which they receive

their paychecks.” Id. at 120. This distinction is inapplica-

ble to severance benefit plans since ERISA’s “funding

requirements do not apply to welfare benefit plans.” Id. at

119 (citing ERISA §§ 201(1), 301(a), as amended, 29 U.S.C.

§§ 1051(1), 1081(a)).

Il.

THIS COURT’S DECISIONS SUBSEQUENT TO MOR-

ASH HAVE REAFFIRMED THE BROAD SCOPE OF

ERISA PREEMPTION

If the Morash decision created any doubt as to

ERISA’s broad preemption of state law related to

employee welfare benefit plans, the Court’s decision in

FMC Corp. v. Holliday, 498 U.S. 52, 111 S.Ct. 403 (1990),

removed all doubt. In Holliday, the Court was asked to

decide whether ERISA preempts a Pennsylvania law pre-

cluding employee welfare benefit plans from exercising

subrogation rights on a claimant’s tort recovery. Id. at 54,

111 S.Ct. at 405. As in the present case, the ERISA plan

involved in the litigation was not insured. Id.

In Holliday, the Court reaffirmed its prior decision on

the breadth of preemption, and made clear that unin-

sured plans are subject to preemption. The Court stated

that a law is preempted if it has “a connection with or

reference to such a plan.” Id. at 58, 111 S.Ct. at 407

(quoting Shaw v. Delta Air Lines, 463 U.S. 85, 96-97, 103

S.Ct. 2890 (1983). Similarly, in Ingersoll-Rand v. McClendon,

498 U.S. 133, 111 S.Ct. 478 (1990), the Court had no

difficulty in concluding that a state law wrongful dis-

charge claim, based on the allegation that the discharge

was motivated by an employer’s desire to avoid making

contributions to an employee’s pension fund, was pre-

empted by the broad scope of ERISA. See also, District of

Columbia v. Greater Washington Board of Trade, ___ U.S. __,

113 S.Ct. 580 (1992) (“ERISA pre-empts any state law that

refers to or has a connection with covered benefit plans

. even if the law is not specifically designed to affect

such plans, or the effect is only indirect.”)!

1 That Petitioners misunderstand the Court’s holding in

Morash is clearly shown by Adams v. Avondale Industries, Inc., 905

F.2d 943 (6th Cir. 1990), cert. denied, 498 U.S. 984, 111 S.Ct. 517

(1990). In Adams, a suit to recover severance and vacation bene-

fits following the sale of a company, the Sixth Circuit explicitly

cited Morash for the proposition that “[i]t is now well estab-

lished that severance benefit plans, such as the one before us

here, are welfare benefit plans” under ERISA. Adams, 905 F.2d at

947. Similarly, in Silvera v. Mutual Life Ins. Co. of New York, 884

F.2d 423 (9th Cir. 1989), the Ninth Circuit reaffirmed that “pre-

emption ‘extends to state common-law causes of action as well

as regulatory laws.’” Silvera, 884 F.2d at 425 (quoting Scott v.

Gulf Oil Corp., 754 F.2d 1499, 1502 (9th Cir. 1985)). Like Adams,

Silvera was decided after and relied in part upon Morash. Accord,

Gray v. Quaker Fabric Corporation of Fall River, 809 F.Supp. 163 (D.

Mass. 1992), aff’d., 6 F.3d 849 (1st Cir. 1993); Morishige v. Spenc-

ecliff Corp., 720 F.Supp. 829, 383 (D. Hawaii 1989).

Moreover, no split of opinion exists between this

Court’s decisions and California courts’ holdings. The

California Supreme Court has repeatedly endorsed this

Court’s interpretation of the broad scope of ERISA pre-

emption. In the California Supreme Court’s most recent

ERISA preemption decision, Southern California Chapter of

Associated Builders and Contractors, Ins., Joint Apprentice-

ship Committee v. California Apprenticeship Council, 4 Cal.

4th 422, 14 Cal. Rptr. 2d 491 (1992) the court stated:

“ERISA’s preemption clause is to be applied

expansively . . . ERISA’s preemption clause is

conspicuous for its breadth establishing as an

area of exclusive federal concern the subject of

every state law that ‘relates to’ an employee

benefit plan governed by ERISA.” (citations

omitted)

California Apprenticeship Council, 4 Cal. 4th at 435. Accord,

Marshall v. Bankers Life & Casualty Co., 2 Cal. 4th 1045, 10

Cal. Rptr. 2d 72 (1992), cert. denied, __ U.S. __, 113 S.Ct.

601 (1992) (state law claim for improper denial of group

health insurance benefits preempted by ERISA despite

employer’s minimal involvement in plan administration);

see also, Carpenters So. Cal. Admin. Corp. v. El Capitan

Development Co., 53 Cal. 3d 1041, 282 Cal. Rptr. 277 (1991),

cert. denied, 112 S.Ct. 430 (1991) (California Civil Code

section 3111 which creates liens on real property in favor

of trust funds established pursuant to collective bargain-

ing agreements, is preempted by ERISA); Commercial Life

Ins. Co. v. Superior Court, 47 Cal. 3d 473, 253 Cal. Rptr. 682

(1988), cert. denied, 490 U.S. 1075 (1989) (claim for bad

faith rejection of insurance claim under California Insur-

ance Code section 790.03 preempted by ERISA).

IT.

THE COURT OF APPEAL’S HOLDING THAT AMF’S

CORPORATE POLICY 3-17 CONSTITUTES AN ERISA

PLAN IS IN CONFORMITY WITH UNITED STATES

AND CALIFORNIA SUPREME COURT CASE LAW

Petitioners’ assertion that the Court of Appeal’s deci-

sion that Petitioners’ state law claims are preempted by

ERISA is at odds with the holding of Fort Halifax Packing

Co. v. Coyne, 482 U.S. 1, 107 S.Ct. 2211 (1987), is also

unavailing. Fort Halifax was an action to enforce rights

under a Maine statute requiring employers to make a

one-time severance payment to employees in the event of

a plant closing. The Court held that the Maine statute was

not preempted by ERISA because the statute neither

establishes, nor requires an employer to maintain, an

employee welfare benefit plan. The Court reasoned that

“the requirement of a one-time, lump-sum payment trig-

gered by a single event requires no administrative

scheme whatsoever to meet the employer’s obliga-

tions .. . The theoretical possibility of a one-time obliga-

tion in the future simply creates no need for an ongoing

administrative program for processing claims and paying

benefits.” Fort Halifax, 482 U.S. at 12.

Contrary to Petitioners’ assertion, the Court in Fort

Halifax did not, however, hold that plans to pay severance

benefits out of the general assets of a company do not

constitute a “plan” under ERISA. (Petition at 19). Indeed,

such an argument runs counter to the language of the

statute and was explicitly rejected by the Court in Fort

Halifax:

“Appellant also argues that its contention that

the severance obligation under the Maine stat-

ute is an ERISA plan is supported by Holland v.

Burlington Industries, Inc., 772 F.2d 1140 (4th Cir.

1985), summarily aff'd, 477 U.S. 901, 106 S.Ct.

3267, 91 L.Ed.2d 559 (1986), and Gilbert v. Bur-

lington Industries, Inc., 765 F.2d 320 (2nd Cir.

1985), summarily aff'd, 477 U.S. 901, 106 S.Ct.

3267, 91 L.Ed.2d 558 (1986). We disagree. Those

cases hold that a plan that pays severance benefits

out of general assets is an ERISA plan. That holding

is completely consistent with our analysis above.”

(Emphasis added).

Fort Halifax, 482 U.S. at 16. The decision of the trial court

and the Court of Appeal that AMF’s Corporate Policy

3-17 (as modified by the Voit General Statement) constitu-

ted a severance plan under ERISA is unquestionably cor-

rect.

IV.

THE COURT OF APPEAL PROPERLY RECOGNIZED

THAT AN EMPLOYER’S UNDERSTANDING OF THE

APPLICABILITY OF ERISA DOES NOT AFFECT THE

OPERATION OF ERISA AS A MATTER OF LAW

Petitioners also argue that because a former AMF

employee was unaware that AMF’s severance policy was

governed by ERISA, the Court of Appeal erred in finding

Petitioners’ state law claims are preempted by ERISA.

(Petition at 9, 21). This “fact” is simply irrelevant. As the

Court of Appeal recognized, ERISA preempts severance

benefits plans as a matter of law. Laws apply to every

person whether or not they are aware of their provisions.

10

Moreover, with regard to ERISA, this Court and the Cali-

fornia Supreme Court have consistently held that what

any party understood with regard to the law under

ERISA is irrelevant to its applicability. For example, in

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct.

948 (1989), the Court stated that ERISA was applicable to

the interpretation of an unfunded severance plan even

though the employer was unaware of the dictates of

ERISA. Firestone, 489 U.S. at 105. Likewise, the California

Supreme Court has held that an employer’s knowledge of

ERISA is irrelevant to its operation as a matter of law.

“Our conclusion that [defendant] established

and maintained a plan under ERISA is not

altered by the fact that [defendant] neither com-

plied with ERISA’s requirements nor intended

to create an ERISA plan. The test of whether a

benefit plan is exempt from ERISA is not one of

the employer’s motivation.”

Marshall, 2 Cal. 4th at 1058 (citing Firestone Tire & Rubber

Co. v. Bruch, 489 U.S. 101, 105, 109 S.Ct. 948; Shaw v. Delta

Air Lines, Inc., 463 U.S. 85, 107, 103 S.Ct. 2890 (1983)).

V.

PETITIONERS’ RELIANCE ON CHAPIN v. FAIRCHILD

CAMERA AND INSTRUMENT CORPORATION IS MIS-

PLACED

Finally, Petitioners assert that review is warranted

because the Court of Appeal’s decision is in conflict with

Chapin v. Fairchild Camera and Instrument Corporation, 31

Cal. App. 3d 192, 107 Cal. Rptr. 111 (1973). (Petition at 11,

29-35). Petitioners’ argument is without merit. Chapin was

decided before the enactment of ERISA and dealt with

11

state law claims for severance benefits. As the Court of

Appeal correctly held, such claims are preempted by

ERISA. Thus, Chapin is simply inapplicable. Moreover,

the Court of Appeal’s decision is in complete harmony

with the overwhelming majority of courts which have

held that under severance plans similar to AMF Corpo-

rate Policy 3-17, employees are not eligible for severance

benefits when the assets of a company are purchased by

another and the employees are retained by the purchas-

ing company.

2 For example in Lakey v. Remington Arms Co, Inc., 874 F.2d

541 (8th Cir. 1989), the Eighth Circuit held that terminated

employees, immediately rehired by a departing corporation’s

successor are not entitled to severance pay since the change in

employer “caused the employees no lack of work, [and] sever-

ance benefits, if granted would simply [be] a windfall...” Id. at

545. See also, Allen v. Adage, 967 F.2d 695-(1st Cir. 1992); Awbrey v.

Pennzoil Co., 961 F.2d 928 (10th Cir. 1992); Bradwell v. GAF Corp.,

954 F.2d 798 (2nd Cir. 1992); Franklin v. Pitney Bowes Inc., 919

F.2d 45 (6th Cir. 1990); Adams v. Avondale Industries, Inc., 905 F.2d

943 (6th Cir. 1990), cert. denied, 498 U.S. 984, 111 S.Ct. 517 (1990);

Sejman v. Warner-Lambert Co., Inc., 889 F.2d 1346 (4th Cir. 1989),

cert. denied, 498 U.S. 810 (1990); Adams v. AMPCO-Pittsburgh

Corporation, 733 F.Supp. 998 (W.D. Pa. 1989), aff'd. without op.,

961 F.2d 1566 (3rd Cir. 1992); Bowman v. Firestone Tire & Rubber

Co., 724 F.Supp. 493 (N.D. Ohio 1989); Lesman v. Ransburg Corp.,

719 F.Supp. 619 (W.D. Mich. 1989).

12

CONCLUSION

Review of the California Court of Appeal’s

unpublished decision is not appropriate. The Court of

Appeal’s decision that Petitioners’ state law claims are

preempted by ERISA is in complete conformity with

recent United States and California Supreme Court deci-

sions. Additionally, Petitioners raise no issues which this

Court has not already conclusively resolved. The petition

for writ of certiorari should be denied.

DATED: September 8, 1994

*Counsel of Record

Respectfully submitted,

LATHAM & WarKINS

WituiaM C. BortTcer, Jr.*

JosEPpH B. FARRELL

ANDREW M. PALEy

633 West Fifth Street, Suite 4000

Los Angeles, California 90017

(213) 485-1234

Attorneys for Respondents

AMF Corporation and

AMF Voit, Inc.