Petition for Writ of Certiorari — Houdek v. Mobil Oil Corp.
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FILED ws
(") 941 049 Ec 1 5 1994
No. 94- orrice
In THE
Supreme Court of the United States
OCTOBER TERM, 1994
HAROLD A. HOUDEK, et al.,
Petitioners,
Vv.
MoBIL O1L CORPORATION,
Respondent.
Petition for a Writ of Certiorari to the
Colorado Court of Appeals
PETITION FOR A WRIT OF CERTIORARI
RODNEY R. PATULA
(Counsel of Record)
THOMAS L. ROBERTS
RICARDO M. BARRERA
PRYOR, CARNEY & JOHNSON, P.C.
6200 S. Syracuse Way, Suite 400
Englewood, Colorado 80111
(303) 771-6200
Counsel for Petitioners
WILSON - Eras Printine Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001
QUESTIONS PRESENTED
1. Did the Colorado Court of Appeals correctly hold
that petitioners’ common law claims for alleged fraud are
preempted by the Employee Retirement Income Security
Act (ERISA) when the Tenth Circuit Court of Appeals
previously determined that they lack standing to bring
ERISA claims to redress the same alleged fraud?
2. Did the Colorado Court of Appeals correctly hold
that petitioners’ common law claims for fraudulent dis-
charge “relate to” their ERISA covered pension plan, and
are thus preempted, when the sole “connection” between
the state claims and the pension plan is that respondent
employer allegedly misrepresented proposed amendments
to the plan as the “means” to procure petitioners’ dis-
charges?
3. Did Congress intend to grant employers a safe
harbor for misconduct in the employment relationship—
between the whirlpool of ERISA preemption and the rock
of ERISA standing?
(i)
ii
LIST OF PARTIES
Petitioners, plaintiffs-appellants, below:
Harold A. Houdek, Frederic J. Raymond, J.A.
Morrison, George H. Liveris, Robert A. Irwin, Cecil
J. Allmon, Jose Augusto, Jr., R.S. Banner, Jr., A.D.
Bond, Clemont H. Bruce, Harvey A. Carson, Jr., Billy
Jack Dunn, Virginia Howard, Sylvester J. Jaye, T.L.
Martin, Ira S. Reavis, E. Shepard, Herman B.
Thomason, Marion Leon Thompson, Billy Rhea
Sargent, and Clarence E. White, for themselves and
on behalf of others similarly situated.
Respondent, defendant-appellees below:
Mobil Oil Corporation.
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ...020222.2.2.2.....scssesssesseseseseeee i
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STATEMENT OF THE CASE .0020.00.0...0.....cccceeceeeeeeeee 3
FACTUAL AND PROCEDURAL BACKGROUND ..... 5
REASONS FOR GRANTING THE WRIT ................ 8
I. THE COLORADO COURT OF APPEALS
ERRED IN HOLDING THAT COMMON LAW
CLAIMS FOR ALLEGED TORTIOUS DIS-
CHARGE ARE PREEMPTED BY ERISA
EVEN WHEN PLAINTIFFS LACK STAND-
ING TO BRING ERISA CLAIMS FOR THE
SAME ALLEGED MISCONDUCT .................... 11
Il. THE COLORADO COURT OF APPEALS
ERRED IN HOLDING THAT STATE LAW
CLAIMS FOR ALLEGED FRAUDULENT IN-
DUCEMENT TO RETIRE EARLY “RELATE
TO” THE ERISA PLAN, AND ARE THUS
PREEMPTED, WHEN THE SOLE “CONNEC-
TION” BETWEEN THE STATE CLAIMS
AND THE PLAN IS THAT INFORMATION
ABOUT PROPOSED PLAN AMENDMENTS
WAS USED AS THE “MEANS” TO INDUCE
THE INVOLUNTARY RETIREMENTS ...........
(iii)
iv
TABLE OF CONTENTS—Continued
III. CONGRESS DID NOT INTEND TO CREATE
A SAFE HARBOR FOR UNLAWFUL EM-
PLOYER CONDUCT THROUGH A CONJUNC-
TION OF BROAD ERISA PREEMPTION AND
NARROW ERISA STANDING .....................---..-
SRR RN eck an Pee LANE ACA TE DOR TN Te
APPENDIX A
Opinion of the Colorado Court of Appeals (Hou-
I I Te ND ia ocinctnccincienscendonmasaquarmaaiond
APPENDIX B
Opinion of the United States Court of Appeals for
the Tenth Circuit (Raymond) (January 20, 1993) ..
APPENDIX C
Opinion of the United States Court of Appeals for
the Fifth Circuit (Christopher) (January 24,
CET RINE SoC Re MIO Ae Lae ic TN NATE OD
APPENDIX D
Order of the Court of Appeals, State of Colorado
Denying Petition For Rehearing (Houdek) (Feb-
SUR Tis THN eciccasckteceenteches eae aietche leet.
APPENDIX E
Order of the Colorado Supreme Court Denying
Certiorari (Houdek) (August 29, 1994) _............
APPENDIX F
Order of the Colorado Supreme Court Denying
Petition For Rehearing (Houdek) (September 16,
NOE): gcse ak seabed ae
Page
17
18
la
17a
40a
65a
66a
Vv
TABLE OF AUTHORITIES
CASES: Page
Berger v. Security Pacific Information Systems,
Inc., 795 P.2d 13880 (Colo. App. 1990) ................. 9
Caterpillar Inc. v. Williams, 482 U.S. 386, 107 S.Ct.
, RT Bs! BO 5 nena 12, 17
Christopher v. Mobil Ow Corp., 950 F.2d 1209 (5th
Cir.), cert. denied, U.S. ——, 118 S.Ct. 68,
RE I FD cinssitsicsctniensoteennecticesnntitnmnsi 2, 3, 5, 6, 7
Christopher v. Mobil Oil Corp., 149 F.R.D. 539
ee CE I « dlicnisitisctincovainuanincinssbtinaniirniesivianiians 6
Corcoran v. United Healthcare, Inc., 965 F.2d 1321
I ii ses hialeicccliaastoaee sendawaress 12
Cutler v. Phillips Petroleum Co., 881 P.2d 216
i i lal a edt 10
District of Columbia v. Greater Washington Bd. of
Trade, US. ,112S.Ct. 580, 121 L.Ed.2d
een 3, 5, 15
Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101, 117 S.Ct. 948, 103 L.Ed.2d 80 (1989) _......... 3
Harris v. Provident Life and Acc. Ins. Co., 26 F.3d
, EF FR | | Rane eas ane eeene 13
Hawaiian Airlines, Inc. v. Finazzo, U.S. —,
114 S.Ct. 2239, 129 L.Ed.2d 203 (1994) ............. 8
HeathAmerica v. Menton, 551 So.2d 235 (Ala.
1989), cert. denied, 493 U.S. 1093, 110 S.Ct. 1166,
Sb 8 Bk. _, ea eee ene ene 10
Houdek v. Mobil Oil Corp., 879 P.2d 417 (Colo.
I i 4,6, 10, 11, 12, 15
Ingersoll-Rand v. McClendon, 498 U.S. 113, 111
S.Ct. 478, 112 L.Ed.2d 356 (1990) ............ 3, 4, 15, 16, 17
Ingram v. American Chambers Ins. Co., 643 So.2d
BS ONG. |. Saree ee 10
Lister v. Stark, 890 F.2d 941 (7th Cir. 1989) -........ 12
Madonia v. Blue Cross & Blue Shield of Virginia,
11 F.3d 444 (4th Cir. 1993), cert. denied,
U.S. ——, 114 S.Ct. 1401, 128 L.Ed.2d 74
NRO SARASOTA Re 13
Mitchell v. Mobil Oil Corp., 896 F.2d 468 (10th
Cir.), cert. denied, 498 U.S. 898, 111 S.Ct. 252,
oe ae Bee 42080) .................................. 2
Mullins v. Pfizer, Inc., 23 F.8d 663 (2nd Cir.
1994) 8
vi
TABLE OF AUTHORITIES—Continued
Page
Pace v. Signal Technology Corp., 628 N.E.2d 20
i | PE Leth 2.0 ok Ee a a ee 10
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107
S.Ct. 1549, 95 L.Ed.2d 89 (1987) ......................... 12
Raymond v. Mobil Oil Corp., 983 F.2d 1528 (10th
Cir.), cert. denied, —— U.S. ——, 114 S.Ct.
i, PS FG Be ere passim
Raymond v. Mobil Oil Corp., 7 F.3d 184 (10th Cir.
1993), cert. denied, sub nom. Morrison v. Mo-
bil Oil Corporation, —— U.S. ——, 114 S.Ct.
ROTO, TT Rice Ge COED <cecectenpercrceneesceteeees 5
Sanson v. General Motors Corp., 966 F.2d 618
(11th Cir. 1992), cert. denied, —— U.S. ——,
113 S.Ct. 1578, 1238 L.Ed.2d 146 (1998) ............. 9,10
Shaw v. Delta Airlines, Inc., 463 U.S. 85, 103 S.Ct.
y Bem t F Fs: eee 4
Travelers Ins. Co. v. Cuomo, 14 F.3d 708 (2nd Cir.
1993), cert. granted, United States Supreme
Court, Nos. 93-1408, 93-1414 and 93-1415 (Oc-
BD RRR et ie 4,15
Vartanian v. Monsanto Co., 14 F.8d 697 (ist Cir.
MOTE <cessnsesiricitieamuniaincasesnciskaconbideamiacaneaten inne inet aes 8
CONSTITUTION, STATUTES AND OTHER
AUTHORITIES:
i TIS Ee ce career ee
SE IEIED sccmnvvsinicndinnvnauanedionnaipaininaieivat
CTI TIIIIITsissnscscovnscccnsidnsteciaghasibenitenepeuaibaandagaalaidiaialiton
os ) ans ee
8 A ar AR ST eS
| ek Sh Ares manne ‘“
ee ECE coe ressorspssnsnasoenssieaiienapempionioteetanneiian
PIII TD senteinsinsnsisisinbasicnineinctiinesdgancaitccanaaea laleinean
ERISA § 502 ...............
ERISA § 510.
ERISA § 514 (a)
A
_
A
_
NONNNONN OTD
Webster’s Ninth New Collegiate Dictionary
8 REPRINT ,
_
oo
In THE
Supreme Curt of the Wuited States
OCTOBER TERM, 1994
No. 94———
HAROLD A. HOUDEK, et al.,
¥ Petitioners,
MosBIL OIL CORPORATION,
Respondent.
Petition for a Writ of Certiorari to the
Colorado Court of Appeals
PETITION FOR A WRIT OF CERTIORARI
Petitioners, plaintiffs below, petition for a writ of cer-
tiorari to review the judgment of the Colorado Court of
Appeals.
OPINION BELOW
The opinion of the Colorado Court of Appeals is re-
ported at 879 P.2d 417, cert. denied (1994) and is
reprinted in the Appendix hereto at 1la-16a.
RELATED CASES
Raymond v. Mobil Oil Corp., 983 F.2d 1528 (10th
Cir.), cert. denied, U.S. ——, 114 S.Ct. 81, 126
L.Ed.2d 49 (1993) (reprinted in the Appendix hereto
at 17a-39a).
2
Christopher v. Mobil Oil Corp., 950 F.2d 1209 (Sth
Cir.), cert. denied, Us , 113 S.Ct. 68, 121
L.Ed.2d 35 (1992) (reprinted in the Appendix hereto
at 40a-64a).
Mitchell v. Mobil Oil Corp., 896 F.2d 463 (10th Cir.),
cert. denied, 498 U.S. 898, 111 S.Ct. 252, 112 L.Ed.2d
210 (1990).
JURISDICTION
The judgment of the Colorado Court of Appeals in this
case was entered on January 13, 1994. A petition for
rehearing in the Colorado Court of Appeals was denied
on February 10, 1994. (See Appendix D at 65a.) A
timely petition for a writ of certiorari to the Colorado
Supreme Court to review the opinion of the Colorado
Court of Appeals was denied on August 29, 1994, over
a dissent. (See Appendix E at 66a.) Pursuant to Colo-
rado Appellate Rules 40 and 54(b) governing discretion-
ary rehearing, petitioners timely filed a petition for rehear-
ing with the Colorado Supreme Court, urging reconsidera-
tion of its denial of a writ of certiorari. The Colorado
Supreme Court allowed the petition, and “[u]pon consid-
eration” and “being sufficiently advised in the premises”
thereof, denied the petition for rehearing on September 16,
1994. See Order of Court, Colorado Supreme Court
(Appendix F at 68a). This petition is filed within 90
days of the Colorado Supreme Court’s order of denial of
rehearing. This Court has jurisdiction by virtue of 28
U.S.C. § 1257.
STATUTES INVOLVED
This petition involves the preemptive scope of Section
514(a) of the Employee Retirement Income Security Act
(ERISA), 29 U.S.C. §1144(a). Section 514(a) of
ERISA supersedes “any and all State laws insofar as they
may now or hereafter relate to any employee benefit plan.
. .” (emphasis added). Other relevant sections of
ERISA includes Sections 3(7), 502, and 510, 29 U.S.C.
§§ 1002(7), 1132 and 1140, respectively.
Cag NOE i AC 9 x 8
3
STATEMENT OF THE CASE
This case presents the question of whether ERISA pre-
empts petitioners’ common law claims against respondent
Mobil Oil Corporation (Mobil) for alleged fraudulent in-
ducement to take “early retirement,” when the Tenth Cir-
cuit Court of Appeals previously held on the same facts
that petitioners, members of the plaintiff class certified in
the federal action, lack standing to bring any ERISA
claims because:
(a) they are no longer “participants” in the pension
plan within the meaning of ERISA, having taken
the “full extent” of their vested pension benefits in
a lump sum upon their early retirements; and thus
(b) their claims “do not seek ‘vested benefits improp-
erly withheld.’ ”
Raymond v. Mobil Oil Corp., 983 F.2d 1528, 1532-37,
cert. denied, US. , 114 S.Ct. 81, 126 L.Ed.2d
49 (1993) (Appendix at 24a-33a). According to the
Tenth Circuit, when (a) and (b) above are found, the
“existence of fraud is irrelevant” to the issue of standing
under ERISA. Raymond, 983 F.2d at 1536 (Appendix
at 32a).
While acknowledging that ERISA preemption was not
an issue in the petitioners’ federal action, the Tenth Cir-
cuit in Raymond construed this Court’s ERISA preemp-
tion holdings in District of Columbia v. Greater Washing-
ton Bd. of Trade, US. , 113 S.Ct. 580, 121
L.Ed.2d 513 (1992), and Ingersoll-Rand v. McClendon,
498 U.S. 113, 111 S.Ct. 478, 112 L.Ed.2d 356 (1990):
Thus, this is not a case where the state law “spe-
cifically refers’ to an ERISA plan, as in Greater
1The Tenth Circuit’s ruling was based on a construction of this
Court’s analysis of “participant” status under ERISA in Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117 S.Ct. 948, 958, 103
L.Ed.2d 80 (1989). But see and compare, Christopher v. Mobil Oil
Corp., 950 F.2d 1209, 1220 (5th Cir.), cert. denied, —— U.S. ——,
113 S.Ct. 68, 121 L.Ed.2d 85 (1992) (Appendix at 40a, 58a).
Washington Bd. of Trade, USS. at , Tas
S.Ct. at 585, nor even where the preempted claim
is “premised on” the existence of an ERISA plan, as
in Ingersoll-Rand, 498 U.S. at 140, 111 S.Ct. at
483. The state law claim in Jngersoll-Rand was a
common law claim for wrongful discharge based
upon the employer’s desire to prevent the employee
from vesting in his benefit plan. There is no such
claim here. Rather, plaintiffs here simply allege a
wrongful discharge, achieved through fraud. The
fact that an ERISA plan was merely part of the
means by which Mobil allegedly fraudulently pro-
cured plaintiffs’ dismissal does not necessarily compel
the conclusion under Ingersoll-Rand that the state
law claim is “premised on” the existence of an
ERISA-covered plan.
Raymond, 983 F.2d at 1539 n.14 (Appendix at 38a,
n.14). The Tenth Circuit’s “footnote 14” was to cited
cases which represent the notorious “gap in remedies”
supposedly created by ERISA preemption. 7d. at 1538
(Appendix at 35a-36a). Although dicta, footnote 14 was
offered to the state courts in this case as a principled
theory to avoid the “gap in remedies” in wrongful dis-
charge cases and to draw some limits of ERISA preemp-
tion in cases which assert neither claims for ERISA bene-
fits nor claims for retaliation for exercising a plan right.
Rather than applying the Tenth Circuit’s more acute
analysis of ERISA preemption, however, the Colorado
appellate court opted to embrace the more diffuse and “less
Stringent test [which] requires only that the state law
claim have a connection with an ERISA plan.” Houdek,
879 P.2d at 422 (Appendix at 8a) (emphasis added)
(citing Travelers Ins. Co. v. Cuomo, 14 F.3d 708, 718
(2nd Cir. 1993), cert. granted, United States Supreme
Court, Nos. 93-1408, 93-1414 and 93-1415 (Order, Octo-
ber 11, 1994).?
2The “connection with” test for ERISA preemption developed
from Shaw v. Delta Airlines, Inc., 468 U.S. 85, 97, 103 S.Ct. 2890,
FACTUAL AND PROCEDURAL BACKGROUND
Petitioners, named plaintiffs below, are members of the
plaintiff class certified in Raymond, who originally asserted
in Raymond both state law and ERISA claims seeking
redress for the same alleged fraudulent transaction. The
particulars as to how Mobil used information about pro-
posed amendments to petitioners’ ERISA pension plan as
the “means” to effect their involuntary retirements are
succinctly presented by the Raymond court, 983 F.2d at
1529-32 (Appendix at 18a-24a).
After their state-law claims in Raymond were dismissed
without prejudice for lack of pendent jurisdiction (before
28 U.S.C. § 1367 became effective), plaintiffs reasserted
six common law tort claims against Mobil in the District
Court for the City and County of Denver. The crux of
the claims is that Mobil fraudulently induced petitioners
to take early retirement—to quit their jobs—on average,
seven years before normal retirement age. Petitioners
allege that Mobil misrepresented and concealed informa-
tion about proposed amendments to their pension plan
which confronted petitioners with a Hobson’s choice:
either retire now and take all of your vested pension
benefits in one lump sum, or, remain employed but risk
failing to meet new and more stringent eligibility require-
ments to qualify for the lump sum option.*
Because Mobil allegedly used information about plan
amendments as the “means” to induce petitioners to quit
77 L.Ed.2d 490 (1983), and was reiterated in both Ingersoll-Rand,
498 U.S. at 139, and Greater Wash. Bd. of Trade, —— USS. ’
113 S.Ct. at 583, 121 L.Ed.2d at 520. See and compare, Raymond,
983 F.2d at 1538 n.14 (Appendix at 36a) (citing and construing
the “connection with” test); with Christopher, 950 F.2d at 1220
(Appendix at 58a) (applying a “connection to” standard).
3 The federal complaint also asserted (unsuccessfully) violations
of the Age Discrimination in Employment Act (ADEA). See
Raymond v. Mobil Oil Corporation, 7 F.3d 184 (10th Cir. 1993),
cert. denied, sub nom. Morrison v. Mobil Oil Corporation, ——
U.S. ——, 114 S.Ct. 1070, 127 L.Ed.2d 388 (1994).
6
their jobs, the state law complaint is “replete” with refer-
ences to the plan and ERISA. See Houdek, 879 P.2d
at 419 (Appendix at 2a). Those references also related
to a claim for civil conspiracy between Mobil and the
Mobil Retirement Plan, which petitioners conceded below
might well be preempted. However, any judgment upon the
other claims would be against Mobil, not the Retirement
Plan, and would not implicate any conduct of the Plan.
Because Mobil’s alleged motive was to reduce its work-
force, by wrongful means, and since petitioners took the
full extent of their vested pension benefits upon their early
departures, there is no allegation in the complaint that
Mobil had a pension-defeating or retaliatory motive for its
conduct.
This case was stayed by the Colorado state court while
litigation proceeded in Raymond and in a Texas case
brought by “opt-outs” from the Raymond class. The
Texas case was Christopher. In Christopher, both the
state law claims and the ERISA claims on the same
alleged fraudulent transaction were considered by the
federal courts. While the Fifth Circuit held the state law
claims preempted because the “underlying conduct at
issue here cannot be divorced from its connection to the
employee benefit plan,” 950 F.2d at 1220 (Appendix
at 58a), the Fifth Circuit also determined that the
plaintiffs could establish standing under ERISA if they
proved Mobil’s misconduct, because an employer “should
not be able through its own malfeasance to defeat the
employee’s standing.” 950 F.2d at 1221 (Appendix at
60a).*
Before Christopher, the jurisprudence of ERISA stand-
ing and ERISA preemption was uncertain. Petitioners
recognized that the federal court in Raymond might follow
4 After remand and rulings on several issues (see Christopher,
149 F.R.D. 539 and 149 F.R.D. 549 (E.D. Tex. 1993), Mobil settled
with the plaintiffs in the Fifth Circuit litigation.
~ on eel
Preeti O 0 y a
7
the Fifth Circuit’s decision on ERISA standing in Christo-
pher, thus giving petitioners an ERISA cause of action.
That would necessarily mean their state law claims would
be preempted by implied or direct conflict preemption
under ERISA.
Mobil, however, argued to the federal district court in
Raymond that it should not follow the Fifth Circuit’s
reasoning on ERISA standing in Christopher. At the same
time, Mobil argued to the state district court in this case
that it should follow Christopher on ERISA preemption.
The district court in Raymond followed Christopher on
ERISA standing but certified the ruling for interlocutory
review by the Tenth Circuit under 28 U.S.C. § 1292(b).
Before the appeal was briefed in the Tenth Circuit, how-
ever, the state district court in this case, citing Christopher,
granted Mobil’s motion to dismiss the state law claims on
grounds of ERISA preemption. The Tenth Circuit sub-
sequently declined to follow Christopher on ERISA stand-
ing and reversed the federal district court.
As noted, however, the Tenth Circuit also offered its
studied analysis in footnote 14 of ERISA preemption.
The Colorado Court of Appeals rejected both the Tenth
Circuit’s conclusion that the petitioners’ state law claims
“simply allege a wrongful discharge, achieved through
fraud,” and its observation that when an ERISA plan
is “merely part of the means” by which an employer
fraudulently procures an employee’s discharge, the con-
sequent state law claims do not have a “connection with”
the ERISA plan nor are they “premised on” the plan.
The Colorado Supreme Court denied a petition for a
writ of certiorari, with a dissent.°
5 See Order Of Court, Supreme Court, State of Colorado, Houdek
v. Mobil Oil Corp., No. 94SC149 (August 29, 1994) (Muilarkey,
J., dissenting, would grant on the following issue: ‘Whether the
court of appeals erred in holding that plaintiffs state law claim
alleging fraudulent inducement to quit employment is preempted
8
Petitioners realize that review in this case might result
in the Court’s determination that Raymond, and not this
case, was wrongly decided. The Court might conclude
that petitioners do have standing under ERISA and there-
fore the state-law claims in this case are directly pre-
empted.®° Thus, as members of the plaintiff class in Ray-
mond, petitioners respectfully inform the Court that they
are prepared to file a motion for leave to request rehear-
ing of this Court’s order denying the writ of certiorari to
review Raymond.
REASONS FOR GRANTING THE WRIT
Petitioners have been denied their day in court, in any
court—state or federal. All legal avenues to redress their
alleged wrongful discharges have been closed without
consideration of the merits. Assuming Congress intended
to enumerate carefully the remedies available under
ERISA, Congress by so doing did not intend to eliminate
state law actions for fraud by aggrieved employees seek-
ing damages from their former employer for wrongful
termination. For such plaintiffs, ERISA does not “create
a federal cause of action for wrongful discharge.” Ray-
mond, 983 F.2d at 1539 (Appendix at 38a). Neither
should ERISA be construed to abolish their state cause
of action for wrongful discharge. See and compare, Ha-
waiian Airlines, Inc. v. Finazzo, US. , 114
S.Ct. 2239, 2246, 129 L.Ed.2d 203 (1994) (federal
Railway Labor Act does not preempt employee’s claim
for wrongful discharge when “the ‘only source’ of the
right [plaintiff] asserts in this action is state tort law’).
by ERISA when the same plaintiffs lack standing to sue under
ERISA and when their state law claim does not relate to an ERISA
benefit plan.”) (Appendix at 66a).
6 See Vartanian v. Monsanto Co., 14 F.3d 697, 702-03 and n.4
(Ist Cir. 1994) (expressly rejecting Raymond); Mullins v. Pfizer,
Inc., 23 F.3d 663, 667-68 (2nd Cir. 1994) (expressly rejecting
Raymond).
11 A nk a TA Dm aol a
9
Between implied or direct conflict preemption of state
law claims—because a plaintiff is entitled to bring an
action under ERISA on the same facts—and express pre-
emption of state law claims—because they “relate to”
benefit plans—Congress did not intend to grant employers
immunity from state law actions for wrongful discharge
in which there are no allegations of pension-defeating or
retaliatory motives. Congress did not intend to ensure
the formation of benefit plans and the uniformity of bene-
fit law at the expense of the states’ common law at-will
employment doctrines and the various exceptions thereto.
See e.g., Berger v. Security Pacific Information Systems,
Inc., 795 P.2d 1380, 1383-84 (Colo. App. 1990) (“em-
ployer’s right to terminate an at-will employee without
cause does not protect the employer from liability for
fraud” in an inducement impacting the employment rela-
tionship). The balance of interests struck by ERISA did
not include the legitimation of tortious deception by
employers.
Here, however, the Colorado Court of Appeals in effect
has ruled that employers can dupe their employees out
ot their jobs simply by using an employee’s ERISA plan
as the efficient means to procure the “retirement.” The
employer can claim preemption to defeat the ensuing
common law wrongful discharge claims and, under Ray-
mond, avoid all possible claims under ERISA.
This is not an isolated scenario. In addition to states
within the Tenth Circuit, all states within the Eleventh
Circuit are now potential safe harbors for employer fraud.
See Sanson v. General Motors Corp., 966 F.2d 618, 623
(11th Cir. 1992), cert. denied, US. ——, 113
S.Ct. 1578, 123 L.Ed.2d 146 (1993) (ERISA pre-
emption of fraud claims and no ERISA standing) (Birch,
J., dissenting) (“An employer in this circuit can now
hoodwink a long time employee and leave him stranded
without any recourse whatsoever.”). Sanson was cited
by the court below for the proposition that “the unavail-
10
ability of an ERISA cause of action does not necessitate
the creation of a federal common law fraud claim in order
to provide the plaintiff with a remedy.” Houdek, 879
P.2d at 420 (Appendix at 4a-5a).”
This is the so-called “gap in remedies,” which courts
have created by narrowly construing ERISA’s civil en-
forcement provisions while expansively construing ERISA’s
“relate[s] to” preemption. And the phenomenon is
spreading. See, e.g., Cutler v. Phillips Petroleum Co.,
881 P.2d 216, 225 (Wash. 1994); but see Menton, 551
So.2d at 238; see also, n.7, supra; see Pace v. Signal
Technology Corp., 628 N.E.2d 20, (Mass. 1994)
(“That a statute [ERISA] whose clear purpose was to
benefit employees has become widely used as a shield to
protect employers [from redress] for any deceptive and
wrongful acts they may have committed against their
employees is an irony we find unacceptable as a governing
principle of law.”) (no ERISA preemption of state law
fraud claims against former employer who misrepresented
plan benefits). Pace cannot be squared with the Colo-
rado court’s opinion here.
The opinion below also demonstrates how ERISA pre-
emption is inexorably federalizing all employment law.
Some state courts, in the absence of this Court’s guidance,
will foreseeably restrict the traditional avenues of redress
for torts in the employment context, by increasing appli-
7™To its credit, Alabama, a constituent state of the Fourth Cir-
cuit, is resisting the Sanson court’s construction of ERISA. See
HeathAmerica v. Menton, 551 So.2d 235, 238 (Ala. 1989), cert.
denied, 493 U.S. 1093, 110 S.Ct. 1166, 107 L.Ed.2d 1069 (1990)
(“We hold that a claim for fraud in the inducement [to drop one
and enroll in another ERISA benefit plan] does not ‘relate to’ an
employee benefit plan and is therefore not preempted by ERISA.”) ;
confirmed, Ingram v. American Chambers Ins. Co., 643 So.2d 575,
577-78 (Ala. 1994) (noting that “the Third, Fourth, Fifth, Sixth,
Ninth, Tenth, and Eleventh Circuits . .. do not agree about
whether ERISA preempts a state law claim of fraud in the induce-
ment”) (collecting cases).
De AAA RENT a cre ANS 8 BA te et eB Sh thal Pm we
11
cation of federal preemption doctrine that lacks principled
limitation. Review here would be the Court’s opportunity
to reverse this unintended displacement of state common
law.
I. THE COLORADO COURT OF APPEALS ERRED
IN HOLDING THAT COMMON LAW CLAIMS FOR
ALLEGED TORTIOUS DISCHARGE ARE PRE-
EMPTED BY ERISA EVEN WHEN PLAINTIFFS
LACK STANDING TO BRING ERISA CLAIMS FOR
THE SAME ALLEGED MISCONDUCT.
The Colorado Court of Appeals missed the significance
of the Tenth Circuit’s standing analysis between invoca-
tions of the “gap in remedies” doctrine:
Plaintiffs first argue that because the federal court
has determined that they do not have a viable claim
for relief under ERISA, their state law claims cannot
be preempted. The United States Court of Appeals
for the Tenth Circuit found that the definition of a
participant entitled to bring a cause of action under
ERISA excludes former employees, such as plaintiffs
here, who have received the full extent of their bene-
fits in a lump sum payment and who do not have
either a colorable claim to further benefits or a rea-
sonable expectation of returning to employment cov-
ered by the retirement plan. We do not agree that
the existence of a viable ERISA claim is a prerequi-
site to preemption.
Houdek, 879 P.2d at 420 (Appendix at 4a) (citations
omitted). The first sentence attributes to petitioners an
argument they did not make. The third sentence is there-
fore beside the point. The second sentence is the point:
plaintiffs had no standing to bring any claims under
ERISA because the wrong they allege is a discharge that
itself defeats their standing under ERISA (at least in the
Tenth Circuit). Why should the discharge be immunized
by ERISA from any claims under state law when it
was achieved by misconduct with no attendant pension-
defeating or retaliatory motives?
12
This Court’s decision in Pilot Life Ins. Co. v. Dedeaux,
481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987),
is the first case invoked by the court below, 879 P.2d at
420 (Appendix at 4a), but Pilot Life does not support
the preemption of petitioners’ state law claims in this
case. In Pilot Life, the plaintiff was a current beneficiary
who brought common law claims “asserting improper
processing of a claim for benefits under an insured em-
ployee benefit plan.” 481 U.S. at 43. The plaintiff sought
not only recovery of benefits, but also damages for emo-
tional distress and punitive damages. This Court, while
holding that claims for such damages were preempted by
ERISA, also noted that ERISA claims were available to
the plaintiff. 7d. at 44. Unlike the petitioners here, who
lack ERISA standing and who are not seeking benefits,
the plaintiff in Pilot Life had standing under ERISA to
recover lost benefits, and the fact that ERISA does not
provide a remedy for infliction of emotional distress or
allow punitive damages for improper processing of bene-
fits, was irrelevant to the preemption of those “extra”
claims.*
8 See Caterpillar Inc. v. Williams, 482 U.S. 386, 391 n.4, 107 S.Ct.
2425, 96 L.Ed.2d 318 (1987) (‘ ‘The nature of the relief available
after jurisdiction attaches is, of course, different from whether
there is jurisdiction to adjudicate the controversy.’ ’’).
The court below also relied on Corcoran v. United Healthcare,
Inc., 965 F.2d 1321 (5th Cir. 1992). There, defendants removed
the action from state court. The Fifth Circuit found that because
the alleged misconduct by defendant plan administrator “involv[ed]
benefit determinations,” id. at 1332, state law claims for that mis-
conduct were preempted. Standing was not an issue. The “gap
in remedies” noted by the Fifth Circuit should not occur in cases
where alleged misconduct by a defendant employer is limited to
wrongful discharge and does not require a determination of bene-
fits. Similarly, in Lister v. Stark, 890 F.2d 941 (7th Cir. 1989),
also cited by the court below, the plaintiff originally sued in state
court, seeking state law remedies for an alleged improper calcula-
tion of benefits. Again, standing was not an issue. The state
claims were found to be preempted by ERISA upon defendant’s
13
Here, in contrast, petitioners seek to recover damages
from their former employer for fraudulently inducing
them to quit their jobs. ERISA is not a “federal job pro-
tection scheme.” Raymond, 983 F.2d at 1539 (Appendix
at 38a), and because petitioners have received the full
extent of their plan benefits and do not have a colorable
claim for further benefits, their consequent lack of stand-
ing under ERISA is highly significant to the preemption
question. Where, as here, plaintiffs lack standing to sue
under ERISA because the defendant’s conduct is entirely
outside ERISA (i.e., is not sufficiently “related to” the
plan), thoughtlessly extending the “gap in remedies” by
preempting state law claims serves none of the purposes
of preemption. There is no legitimate and certainly no
congressionally intended purpose served by the “gap”
in this context.
The Fourth Circuit Court of Appeals recognized the
significance of lack of standing to preemption. In Madonia
v. Blue Cross & Blue Shield of Virginia, 11 F.3d 444,
446 (4th Cir. 1993), cert. denied, US. , 114
S.Ct. 1401, 128 L.Ed.2d 74 (1994), the court held
that in order for state law claims to be preempted, a plain-
tiff “must have standing to sue” under ERISA. The court
below cited Madonia, but inexplicably ignored the Fourth
Circuit’s test for preemption in the “no standing” con-
text. See also, Harris v. Provident Life and Acc. Ins. Co.,
26 F.3d 930, 934 (9th Cir. 1994) (“It would be con-
tradictory to rule that state law claims are preempted
where the court has already held that the same plaintiffs
may not assert a claim under ERISA because they are
not ‘participants’ in the ERISA plan.”).
While Raymond acknowledges that a “gap in remedies”
could occur in some circumstances, it took great pains to
explain why no “gap” should occur here. The court
below simply did not appreciate the significance of the
removal to federal court. The reason that plaintiff there was left
without a remedy was that “no federal cause of action explicitly
appear[ed] on the face of his complaint.” Id. at 944.
14
explanation: standing to bring any ERISA claim for a
wrongful discharge and ERISA preemption of all common
law claims for the same discharge are mutually exclusive
determinations. Either the discharge and the plaintiff's
means to remedy it are within ERISA, or they are beyond
ERISA’s preemptive reach. The “gap in remedies” may
be a “necessary evil” in some cases, but that does not
justify a gap in cases where it is not necessary. This
Court should decide whether the relation between ERISA
standing and ERISA preemption deserves a more princi-
pled treatment than it received by the court below.
II. THE COLORADO COURT OF APPEALS ERRED IN
HOLDING THAT STATE LAW CLAIMS FOR AL-
LEGED FRAUDULENT INDUCEMENT TO RE-
TIRE EARLY “RELATE TO” THE ERISA PLAN,
AND ARE THUS PREEMPTED, WHEN THE SOLE
“CONNECTION” BETWEEN THE STATE CLAIMS
AND THE PLAN IS THAT INFORMATION ABOUT
PROPOSED PLAN AMENDMENTS WAS USED AS
THE “MEANS” TO INDUCE THE INVOLUNTARY
RETIREMENTS.
Colorado’s common law of fraud does not purport to
regulate the terms and conditions of ERISA benefit plans.
It does not refer to plans or plan benefits. The common
law of fraud predated ERISA and obviously is not prem-
ised on the existence of ERISA plans. By the state law
fraud claims brought below, petitioners seek relief for
wrongful discharge. Petitioners do not seek pension ben-
efits withheld, nor do they allege that plan benefits were
erroneously calculated, nor that the plan amendments
were improper under ERISA. Contrary to the holdings
below, the only command which would have been im-
posed on Mobil by the operation of the common law here
would be to not use information about pension plans to
deceive employees into quitting their jobs. Such a com-
mand leaves undisturbed the full operation of all the
statutory policies and regulatory purposes of ERISA and
does not, contrary to the lower court’s decision here,
implicate any disclosure requirements under ERISA.
1 Mabe dae satee et ctaet SD Sa iti
15
Petitioners contend that apart from the link between
standing and preemption, when an employer uses com-
munications to its employees about pending plan amend-
ments to induce them to quit their jobs, taking their
vested pension benefits in a lump sum, the state law claim
consequent upon discovery of the alleged misconduct
cannot “relate to” the benefit plan within the meaning of
ERISA. When information about an ERISA plan is used
as the “means” to effectuate an injury to which ERISA is
not addressed, the “connection with” the plan is neither
the kind nor the degree of connection which warrants
preemption. That is, the state law claims have at most “a
‘tenuous, remote, or peripheral’ conection” with the plan.
Raymond, 983 F.2d at 1538 n.14 (Appendix at 37a-38a
n.14) (citing Greater Washington Bd. of Trade,
USS. n.l, 113 S.Ct. at 583 n.1).
The court below, citing Ingersoll-Rand and Travelers
Insurance Co. v. Cuomo, 14 F.3d 708 (2d Cir. 1993),
in the same breath, construed both cases to stand for “a
less stringent test” for state courts exercising “even com-
mon law powers of general application.” Houdek, 879
P.2d at 422 (Appendix at 7a-8a). That test, of course,
is none other than the “connection with” standard, which
alone offers no greater direction to the courts than the
original “relate[s] to” language of the statute. Petitioners
urge that it is the “quality” of the connection which should
be considered. When the sole “connection” is that plan
information was used only as the means to cause a harm
not cognized by ERISA, then the requisite quality of the
connection warranting preemption is missing.
In applying its “less stringent” version of the “connec-
tion with” standard, the court below distorted the analysis
of preemption in Ingersoll-Rand itself. There, in Part
II A, this Court had no difficulty in concluding that “a
claim that the employer wrongfully terminated plaintiff
primarily because of the employer’s desire to avoid con-
tributing to, or paying benefits under, the employee’s pen-
16
sion fund” “relate[s] to” the pension plan and is there-
fore preempted. Ingersoll-Rand, 498 U.S. at 140. Thus,
the sine qua non of express preemption of the wrongful
discharge claim was the employer’s motive to prevent
pension benefits from vesting and/or to cease contributing
to the pension plan. Plaintiff had to plead that “an ERISA
plan exists and the employer had a _pension-defeating
motive.” Jd. (emphasis added).
The teaching of Ingersoll-Rand is that it is the em-
ployer’s pension-defeating motives which “connect” the
ensuing discharge claim with the plan. It is not the choice
of “means” used by the employer to effect the discharge
nor the remedies sought by the discharged employee which
determines the “connection” to the plan. This is con-
firmed by the analysis of implied or direct conflict pre-
emption in Part II B of Ingersoll-Rand. The Court there
held that the plaintiff's claim was also preempted because
“it conflicts directly with an ERISA cause of action.” 498
U.S. at 142. That is, the plaintiff's claim fell “squarely
within the ambit of ERISA § 510” [29 U.S.C. § 1140],
which among other things prohibits an employer from
discharging an employee/participant “ ‘for the purposes of
interfering with the attainment of any right to which the
participant may become entitled under the plan.’” Jd.
That is not this case at all.
This Court concluded Ingersoll-Rand by holding that
“it is no answer to a pre-emption argument that a
particular plaintiff is not seeking recovery of pension
benefits.” Jd. at 145. It is no answer to a “direct con-
flict” preemption argument. That is, if a state law claim
is bottomed on the fact that the employer interfered with
the attainment of a right under the plan—e.g., preventing
pension benefits from vesting—then it makes no difference
whether the discharged employee elects to recover pension
benefits. The claim is preempted, regardless of the reme-
dies sought, because the employee has a direct cause of
action under ERISA. Thus, on a claim for wrongful dis-
17
charge, the fact that the plaintiff does not seek to recover
benefits is irrelevant to the operation of “direct conflict”
preemption. However, on a claim for wrongful discharge
where the plaintiff does not seek benefits and makes no
allegations of pension-defeating motives on the part of the
employer, there is no basis or reason for “relate[s] to”
preemption.°
Here, petitioners neither seek benefits nor allege that
Mobil had any pension-defeating motives. Those facts
were found by the Tenth Circuit in its determination that
petitioners lack standing under ERISA. Thus, petitioners’
claims for fraudulent discharge do not “relate to” the
pension plan under the principles established by Ingersoll-
Rand in cases of wrongful discharge. The court below,
however, obscured the rationales of /ngersoll-Rand with
an easy “connection with” treatment of petitioners’ case
that left them without any legal recourse whatsoever.
This case is not, then, just another example of the neces-
sary “gap in remedies” under ERISA. Rather, according
to the court below, it is an example of a gap with no
purpose or rationale. It is a gap which this Court should
close.
III. CONGRESS DID NOT INTEND TO CREATE A
SAFE HARBOR FOR UNLAWFUL EMPLOYER
CONDUCT THROUGH A CONJUNCTION OF
BROAD ERISA PREEMPTION AND NARROW
ERISA STANDING.
“The question of whether a certain state action is
preempted by federal law is one of congressional intent.
The purpose of Congress is the ultimate touchstone.”
Ingersoll-Rand, 498 U.S. at 137-38 (internal quotations
omitted). These precepts have been reiterated by this
® Compare Caterpillar, 482 U.S. at 396 n.10 (1987) (no federal
preemption under the Labor Management Relations Act, for ex-
ample, of “a state battery suit growing out of a violent strike...
simply because the strike may have been a violation of an employer-
union contract”).
18
Court and other courts. Those precepts are conspicuous
by their absence in the court’s opinion below. A touch-
stone is a “test or criterion for determining the quality or
genuineness of a thing.” Webster’s Ninth New Collegiate
Dictionary (1991). If the intent of Congress is the “ulti-
mate touchstone,” then it is the “last test” for determin-
ing the propriety of preemption.
Petitioners contend that the “last test” should not be
given mere lip service at the beginning of a preemption
analysis, but should be applied, as its name suggests, at
the end of the analysis. Upon reaching a tentative result
in a preemption case, here the preemption of petitioners’
state law claims for fraudulent discharge, the court should
measure that result against the intent of Congress. More
importantly, this Court should measure the real conse-
quence of the court’s holding below. Petitioners respect-
fully submit that no reasoning, even that which begins
with the text of the statute, can square this total denial
of legal process with the intent of Congress.
CONCLUSION
For these reasons, the Court should grant this Petition
for a Writ of Certiorari.
Respectfully submitted,
RODNEY R. PATULA
(Counsel of Record)
THOMAS L. ROBERTS
RICARDO M. BARRERA
PRYOR, CARNEY & JOHNSON, P.C.
6200 S. Syracuse Way, Suite 400
Englewood, Colorado 80111
(303) 771-6200
December 13, 1994 Counsel for Petitioners
APPENDICES
la
APPENDIX A
COLORADO COURT OF APPEALS
DIV. V
Nos. 92CA1395, 93CA0062
HAROLD A. HOUDEK, FREDERIC J. RAYMOND, J.A. MorRRI-
SON, GEORGE H. LIVERIS, ROBERT A. IRWIN, CECIL J.
ALLMON, JosE AUGUSTO, JR., R.S. BANNER, JR., A.D.
BOND, CLEMONT H. Bruce, HARVEY A. CARSON, JR.,
BILLY JACK DUNN, VIRGINIA HOWARD, SYLVESTER J.
JAYE, T.L. MARTIN, IRA S. REAvis, E. SHEPARD, HER-
MAN B. THOMASON, MARION LEON THOMPSON, BILLY
RHEA SARGENT, and CLARENCE E. WHITE, for them-
selves and on behalf of others similarly situated,
Plaintiffs-A ppellants,
V.
Mosit O1L CORPORATION, a New York Corporation, the
RETIREMENT PLAN OF MosiL OIL CoRPoRATION, itself
and by the Trustees thereof, and one or more JOHN
and/or JANE Dogs and/or DoE ENTITIES,
Defendants-A ppellees.
Jan. 13, 1994
Rehearing Denied Feb. 10, 1994
Certiorari Denied Aug. 29, 1994
Opinion by Judge DAVIDSON.
In this action to recover damages for common law
fraud, negligent misrepresentation, civil conspiracy, and
2a
interference with contract, plaintiffs, Harold A. Houdek,
Frederic J. Raymond, J.A. Morrison, George H. Liveris,
Robert A. Irwin, Cecil J. Allmon, Jose Augusto, Jr., R.S.
Banner, Jr., A.D. Bond, Clemont H. Bruce, Harvey A.
Carson, Jr., Billy Jack Dunn, Virginia Howard, Sylvester
J. Jaye, T.L. Martin, Ira S. Reavis, E. Shepard, Herman
B. Thomason, Marion Leon Thompson, Billy Rhea Sar-
~ gent, and Clarence E. White, appeal from the judgment
dismissing, pursuant to C.R.C.P. 12(b)(5), their com-
plaint against defendants, Mobil Oil Corporation (Mobil),
the Retirement Plan of Mobil Oil Corporation, and the
trustees thereof. We affirm.
Plaintiffs are former employees of defendant Mobil.
All plaintiffs were participants in a retirement plan gov-
erned by the federal Employee Retirement Income Se-
curity Act, 29 U.S.C. §§ 1001, et seq. (1988) (ERISA).
According to the complaint, which is comprised of
twenty-two pages replete with references to ERISA regu-
lations and allegations regarding the administration of
the retirement plan, beginning in 1977, Mobil made
available a retirement plan option known as the “lump
sum” under which eligible employees could elect to re-
ceive retirement account funds in a single payment rather
than in monthly annuity payments. The complaint al-
leged that, in mid-1984, Mobil announced to its employees
that the eligibility threshold for the lump sum option,
which was based upon an employee’s total net worth or
total accrued pension, would be raised and that in order
to take advantage of the lump sum option at the lower
threshold, they must retire before January 1, 1985. Plain-
tiffs are all employees who chose to retire before Janu-
ary 1, 1985, and who selected the lump sum option.
The complaint further alleges that Mobil knew before
January 1, 1985, but did not inform its employees that,
because of certain federal tax considerations, it would not
be able to implement the higher eligibility threshold with-
out also implementing a waiver provision for that thresh-
3a
old and that, because of then recent amendments to
ERISA (known as ihe Retirement Equity Act), plaintiffs
would have been entitled to the lump sum option under
the lower threshold even if they had retired after January 1,
1985. Plaintiffs aver that they would not have retired be-
fore January 1, 1985, but for Mobil’s representations that
their entitlement to the lump sum option under the lower
threshold would be foreclosed after that date and that
they could not have qualified for the lump sum option
under the higher threshold.
Plaintiffs filed suit in federal district court for the Dis-
trict of Colorado asserting claims under the federal Age
Discrimination in Employment Act (ADEA) and ERISA
as well as various state law claims. The federal court
declined to exercise pendent jurisdiction over the state
law claims and dismissed those claims without prejudice.
Plaintiffs then refiled the state law claims by way of this
action in the trial court.
Defendants moved for dismissal under C.R.C.P. 12(b)
(5) on the grounds that plaintiffs’ state law claims were
preempted by the federal ERISA legislation. The trial court
granted defendants’ motion and subsequently awarded at-
torney fees to defendants pursuant to § 13-17-201, C.R.S.
(1987 Repl. Vol.6A).
The federal district court held that plaintiffs had viable
ERISA claims. That determination was reversed on ap-
peal by the Tenth Circuit Court of Appeals on the grounds
that plaintiffs were no longer participants in an ERISA
plan. The Tenth Circuit opinion did not address plaintiffs’
ADEA claims. See Raymond v. Mobil Oil Corp., 983
F.2d 1528 (10th Cir.1993).
I.
Plaintiffs contend that the trial court erred in determin-
ing that their state law claims were preempted by federal
ERISA legislation. We disagree.
4a
A
Plaintiffs first argue that because the federal appeals
court has determined that they do not have any claim
for relief under ERISA, their state law claims cannot be
preempted. The United States Court of Appeals for the
Tenth Circuit found that the definition of a participant
entitled to bring a cause of action under ERISA excludes
former employees, such as plaintiffs here, who have re-
ceived the full extent of their benefit in a lump sum pay-
ment and who do not have either a colorable claim to
further benefits or a reasonable expectation of returning
to employment covered by the retirement plan. Raymond
v. Mobil Oil Corp., supra; see also Mitchell v. Mobil Oil
Corp., 896 F.2d 463 (10th Cir.1990). We do not agree
that the existence of a viable ERISA claim is a prerequisite
to preempton.
According to federal and United States Supreme Court
cases interpreting the scope of ERISA preemption, state
law tort claims which conflict directly with a viable
ERISA cause of action are preempted by ERISA. See
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111
S.Ct. 478, 112 L.Ed.2d 474 (1990). The converse, how-
ever, that a viable ERISA claim is necessary in order for
preemption to apply, has been expressly and uniformly
rejected by the federal appellate courts. See Pilot Life
Insurance Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549,
95 L.Ed.2d 39 (1987) (Congress did not intend for rem-
edies which it had rejected in ERISA to become available
under state law claims); Corcoran v. United Healthcare,
Inc., 965 F.2d 1321, 1333 (Sth Cir.1992) (“While we
are not unmindful of the fact that our interpretation of
the preemption clause leaves a gap in remedies within a
statute intended to protect participants in employee bene-
fit plans, the lack of an ERISA remedy does not affect
a preemption analysis.”); cf. Sanson v. General Motors
Corp., 966 F.2d 618 (11th Cir.1992) (the unavailability
of an ERISA cause of action does not necessitate the
MDa ARAM 0 dat Re te Pit tb BONA
Sa
creation of a federal common law fraud claim in order
to provide the plaintiff with a remedy).
Nonetheless, plaintiffs contend that under Colorado law
their claims cannot be preempted. They base this conten-
tion on the statement by this court in Pierce v. Capitol
Life Insurance Co., 806 P.2d 388, 390 (Colo.App. 1990)
that “[i]n order for a plaintiffs state law [tort] claim to
be preempted, he or she must be entitled to bring an
ERISA claim.” Plaintiffs misapprehend the significance
of this phrase.
Contrary to plaintiffs’ contentions, Pierce does not hold
that the lack of an ERISA claim prevents preemption of
state law claims. The issue before the court in Pierce
was whether the plan covering plaintiffs, the husband
and wife owners of a small business, was an employee
benefit plan covered by ERISA in the first instance pur-
suant to federal regulations, codified at 29 C.F.R.
§ 2510.3-3 (1989), which define “employee” to exclude
such husband and wife owners. The court thus con-
cluded that “the plaintiff must have been a ‘participant’
or ‘beneficiary’ of [an ERISA] plan” before ERISA is
even applicable. Pierce v. Capitol Life Insurance Co.,
supra, at 390; see Madonia v. Shield of Virginia, 11 F.3d
444 (4th Cir.1993) (29 C.F.R. § 2510.3-3 applies only to
the initial determination that an employee plan exists
and does not govern whether a person is a plan partici-
pant once the existence of an ERISA plan has been estab-
lished as it would be anomalous to allow two disparate
sets of legal obligations to pertain to persons covered by
the same ERISA plan).
Thus, the holding in Pierce is limited to situations in
which ERISA is not applicable because the plaintiffs
never participated in an ERISA covered plan. Unlike the
plaintiffs in Pierce, plaintiffs here were at one time par-
ticipants in the ERISA covered Mobil retirement plan.
Plaintiffs urge this court to adopt the reasoning of
Cutler v. Phillips Petroleum Co., 71 Wash.App. 511, 859
6a
P.2d 1251 (1993), in which the court commented in
dicta that if a party has no ERISA claims, state law
claims must be available in order to ensure a forum in
which to air grievances. We do not find that reasoning
persuasive in light of express determination by the fed-
eral appellate courts that, absent a clear directive to the
contrary from the United States Supreme Court, the
existence of an ERISA remedy is not a prerequisite for
ERISA preemption. See Lister v. Stark, 890 F.2d 941
(7th Cir.1989); see also Pilot Life Insurance Co. v.
Dedeaux, supra; cf. Caterpillar Inc. v. Williams, 482 U.S.
386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (rejecting
the notion that a federal remedy is a prerequisite to com-
plete preemption under the federal Labor Management
Relations Act of 1947).
B.
Plaintiffs next argue that ERISA does not preempt
their state law claims because these claims do not relate
to the ERISA plan. Again, we disagree.
ERISA expressly preempts any and all state laws in-
sofar as they relate to any employee benefit plan covered
by ERISA. Fort Halifax Packing Co. v. Coyne, 482 US.
1, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987); 29 U.S.C.
§ 1144(a) (1988). This is so even if the state law was
not specifically designed to affect employee benefit plans.
Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct.
2890, 77 L.Ed.2d 490 (1983); see also Belgard v. United
Airlines, 857 P.2d 467 (Colo.App. 1992) (The term
“relate to” as used in several federal statutes, including
ERISA, was intended to be broadly construed).
The preemptive power of ERISA is broad enough to
displace all state laws within its sphere, even those which
are consistent with ERISA’s substantive guidelines, be-
cause cven indirect state action may encroach upon the
area of exclusive federal concern. Metropolitan Life In-
surance Co. v. Massachusetts, 471 U.S. 724, 105 S.Ct.
2380, 85 L.Ed.2d 728 (1985). Therefore, if a state
pote
Ta
law cause of action makes specific reference to, or is
premised upon, the existence of an ERISA covered plan,
it is preempted. Ingersoll-Rand Co. v. McClendon, supra.
Likewise, if, in order to prevail, the plaintiff has to prove
the existence of an ERISA plan and misrepresentations
by the employer as to the plaintiff’s eligibility for benefits,
state law claims are preempted. See Sanson v. General
Motors Corp., supra.
Although interpreted broadly, this preemption clause
does have recognized limits. Ingersoll-Rand Co. v. Mc-
Clendon, supra. Some state actions affect employee bene-
fits plans too tenuously, remotely, or peripherally to war-
rant preemption of those actions. Shaw v. Delta Air
Lines, Inc., supra. If there is no impact, directly or in-
directly upon an ERISA plan, the state law cause of
action does not “relate to” the plan. See Cutler v. Phillips
Petroleum Co., supra.
State law claims which provide an alternative cause
of action for the collection of ERISA benefits, refer spe-
cifically and apply solely to ERISA plans, or interfere
with the calculation of ERISA benefits, have been pre-
empted. See Monarch Cement Co. v. Lone Star Indus-
tries, Inc., 982 F.2d 1448 (10th Cir.1992). Plaintiffs
correctly point out that, conversely, state laws of general
application representing traditional exercises of state
power or regulatory authority previously often have es-
caped preemption if their effect on the structure, admin-
istration, or type of benefits provided by an ERISA plan
was merely incidental. See Aetna Life Insurance Co. v.
Borges, 869 F.2d 142 (2d Cir.1989).
The United States Supreme Court, however, has re-
jected the argument that only state laws affecting plan
terms, conditions, or administration are preempted. The
Court reasoned that state courts, implementing even com-
mon law powers of general application, might develop
dissimilar standards regarding the same conduct which
would require multi-state employers to tailor retirement
8a
plans to the peculiarities of each jurisdiction. Ingersoll-
Rand Co. v. McClendon, supra. This less stringent test
requries only that the state law claim have a connection
with an ERISA plan. See Travelers Insurance Co. v.
Cuomo, 14 F.3d 708 (2d Cir.1993).
As we read Ingersoll-Rand, in order to determine if
plaintiffs’ state law claims are preempted here, we must
focus not only on the effect, or potential effect on plan
terms, conditions, or administration, but also must con-
sider whether allowing the state law claims to proceed
would be likely to result in the creation of variable stand-
ards for employer conduct. See Madonia v. Shield of
Virginia, supra (The statutory purpose of ERISA’s pre-
emption provision is to ensure similar treatment for all
claims relating to employee benefit plans).
Under the proper analysis, we must consider whether
the claim arises under a law representing a traditional
exercise of state authority, whether invoking the state law
would affect relations between the principal ERISA en-
tities involved, and whether the state law claims would
have only an incidental effect on the ERISA plan. But,
these factors are not exhaustive and no one factor is dis-
positive. See Van Camp v. AT & T Information Systems,
963 F.2d 119 (6th Cir. 1992).
Thus, on the one hand, for example, state law claims
for fraud have not been preempted if the fact that the
subject of the alleged deception is pension plan benefits
was not essential to the cause of action. See Greenblatt
v. Budd Co., 666 F.Supp. 735 (E.D.Pa.1987); Cutler
v. Phillips Petroleum Co., supra (The gravamen of the
plaintiffs’ claim was that Phillips Petroleum misrepre-
sented an agreement with successor company to maintain
plaintiffs’ salary and benefits, and therefore, the claim
did not depend upon the existence of the ERISA plan
and its effect upon the plan would be incidental).
Here, on the other hand, the existence and administra-
tion of the retirement plan do not bear merely an inci-
9a
dental relationship to the allegations forming the core of
plaintiffs’ claims for relief. In their lengthy complaint,
plaintiffs charge, inter alia, that Mobil represented that
the change in eligibility requirements for the lump sum
benefit was necessary to make the retirement plan cost
competitive and to update the eligibility threshold to ad-
just for inflation when in actuality the changes would
not make the retirement plan more cost competitive, the
changes were not necessary since the retirement plan was
already overfunded, and Mobil knew that the changes
would probably violate existing Internal Revenue Service
policy.
From these allegations, we conclude that the adjudica-
tion of plaintiffs’ claims that they were fraudulently in-
duced to take early retirement would involve examining,
at a minimum, the operation and funding of the retire-
ment plan prior to the eligibility changes, the language
of the amendments to the retirement plan, and Mobil’s
communication to plaintiffs concerning the terms of the
retirement plan amendments. We are unable to discern
how a court could determine the merits of these claims
without engaging in a close analysis of the details of the
operation of the Mobil retirement plan. See Berger v.
Edgewater Steel Co., 911 F.2d 911 (3d Cir. 1990);
Anglund v. American Telephone & Telegraph Co., 828
F.Supp. 809 (D.Colo. 1993).
In a case filed in federal district court for the Eastern
District of Texas by other Mobil employees alleging the
same facts and the same misrepresentations by Mobil
concerning the same retirement plan, the United States
Court of Appeals for the Fifth Circuit determined that
plaintiffs’ identical state law claims were preempted in
their entirety because “the basis of the claims themselves
is the operation of the pension plan; if [the] claims were
stripped of their link to the pension plans, they would
cease to exist.” Christopher v. Mobil Oil Corp., 950 F.2d
1209, 1220 (Sth Cir.1992). Thus, the court concluded,
10a
under Ingersoll-Rand, the plaintiffs claims were premised
upon an ERISA plan and were preempted. See Christo-
pher v. Mobil Oil Corp., supra.
Specifically, of particular importance to plaintiffs’ state
law claims is the timing of notice to Mobil employees of
the amendments to the retirement plan. As defendants
point out, ERISA prescribes the period in which the plan
administrator must disclose retirement plan amendments
to affected employees. See 29 C.F.R. $§ 2520.104b-1,
2520.104b-3, and 2520.104b-4 (1992). ERISA also
governs the adequacy of disclosures. See 29 C.F.R.
§ 2520.101-1, et seq. (1992); 29 US.C. § 1024(b)
(1988); see also Lee v. E.I. DuPont de Nemours & Co.,
894 F.2d 755, 758 (Sth Cir.1990) (“[T]he plaintiffs’
action would impose a state-created duty on the part of
pension fund administrators to disclose plan amendments
before they are put into effect, a duty which at least one
other circuit has said ERISA specifically does not im-
pose.”).
We agree with defendants that this aspect of plain-
tiffs’ claims would have a more than incidental effect
upon the manner in which the ERISA plan is adminis-
tered in terms of disclosure requirements which could po-
tentially interfere with the maintenance of a uniform
body of federal regulation. See Ingersoll-Rand v. Mc-
Clendon, supra; Van Camp v. AT & T Information Sys-
tems, supra.
Plaintiffs argue that the actions complained of were
taken by Mobil as an employer only, and therefore, none
of these ERISA regulations applies. In their complaint,
however, plaintiffs allege, inter alia, that: “Per Article
16, Section 1 of the Plan, the Vice-President of Employee
‘Relations and the Treasurer of Mobil are named fiduci-
aries charged with the operation and administration of the
Plan (emphasis added).” From their allegations we must
infer that Mobil, acting through certain of its officers
and employees, is the “plan administrator” for purposes
nha ben ses pi
lla
of compliance with ERISA’s disclosure requirements. See
29 U.S.C. § 1002(16) (1988).
Even if we assume that Mobil was acting solely in its
capacity as employer when the alleged tortious conduct
occurred, determinations concerning the propriety of the
disclosures made by Mobil could be made only with ref-
erence to ERISA and would affect the relations among
plaintiffs, Mobil, and the Mobil retirement plan as the
principal ERISA entities involved. See Van Camp v. AT
& T Information Systems, supra.
Plaintiffs rely upon Raymond v. Mobil Oil Corp., supra,
in support of their argument to the contrary. In a foot-
note, the Raymond court opined that, arguably, plain-
tiffs’ state law fraud claims allege simply a wrongful dis-
charge achieved by the employer through fraud and are
not premised upon the existence of an ERISA plan. This
statement, however, was based upon a perfunctory eval-
uation of whether the claims would have an effect on the
structure, administration, or type of benefits provided by
the Mobil retirement plan. As we have noted, this type
of inquiry is, at best, incomplete. See Ingersoll-Rand Co.
v. McClendon, supra.
Additionally, the court there acknowledged that pre-
emption was not an issue in the case; therefore, there
is no basis for us to presume that the preemption ques-
tion was thoroughly argued by the parties or analyzed
by the court. See Petrafeck v. Industrial Commission,
191 Colo. 566, 554 P.2d 1097 (1976); Dunbar v. Board
of Trustees, 170 Colo. 327, 461 P.2d 28 (1969).
In further support of their argument against preemp-
tion, plaintiffs contend that, the above analysis notwith-
standing, the issue here is simply whether, once having
communicated to its employees concerning the proposed
amendments, Mobil had common law obligations as an
employer to provide additional information to avoid mis-
leading its employees. Mobil’s compliance with ERISA
12a
in making plan amendment disclosures, they maintain, is
not in question. It is not difficult to see, however, that
individual states could impose individual common law
disclosure requirements as to the timing and content of
plan related announcements which would quickly erode
the intended comprehensive uniformity of applicable fed-
eral law. See Ingersoll-Rand v. McClendon, supra; Chris-
topher v. Mobil Oil Corp., supra; see also Cefalu v. B.F.
Goodrich Co., 871 F.2d 1290 (Sth Cir.1989) (ERISA
preemption was intended to eliminate the threat of poten-
tially conflicting and inconsistent state and local regula-
tion of pension plans).
In addition, as plaintiffs conceded at oral argument,
under the civil conspiracy claim, the Mobil plan is joined
as a defendant and for this reason alone we must find
that claim is preempted. The interference with contract
claim also depends entirely for its existence upon the
retirement plan as it is the employees’ rights under the
plan which they allege have been tortiously obstructed
by the conduct of Mobil, a principal actor in the admin-
istration of the plan.
Therefore, although the state law claims asserted here
represent typically significant functions of state law not
designed specifically to affect pension plans, see Provience
v. Valley Clerks Trust Fund, 509 F.Supp. 388 (E.D.Cal.
1981), the claims are nonetheless preempted because
they would have more than an incidental effect upon
the ERISA plan or upon relations among the principal
ERISA entities involved. See Van Camp v. AT & T
Information Systems, supra.
II.
Plaintiffs also contend that the trial court erred in
awarding defendants attorney fees under § 13-17-201.
We perceive no error in either the award or in the amount
awarded.
Ae
13a
A.
Plaintiffs assert that § 13-17-201 does not apply to
their state law claims because they do not allege any
death or injury to person or property. We disagree.
Section 13-17-201 provides for an award of reasonable
attorney fees:
In all actions brought as a result of a death or an
injury to person or property occasioned by the tort
of any person, where any such action is dismissed
on motion of the defendant prior to trial under rule
12(b) of the Colorado rules of civil procedure... .
By enacting § 13-17-201, the General Assembly in-
tended to discourage unnecessary litigation of tort claims;
therefore, this statute applies whenever a tort action is
dismissed prior to trial pursuant to a motion under
C.R.C.P. 12(b). First Interstate Bank vy. Berenbaum,
872 P.2d 1297 (Colo.App.1993); Employers Insurance
of Wausau v. RREEF USA Fund-II (Colorado), Inc.,
805 P.2d 1186 (Colo.App.1991).
Contrary to plaintiffs’ contentions, the statute neither
explicitly nor implicitly contemplates the existence of
some manner or degree of physical harm to a person or
to property. We are not persuaded that the statute is
limited in applicability to a “species” of tort claims and
is inapplicable to a tort claim which alleges only economic
injury.
B.
Plaintiffs also argue that § 13-17-201 does not apply
to their claims which they contend were brought in a
good faith attempt to establish new. law in Colorado.
We do not agree that the applicability of § 13-17-201
is so limited.
Plaintiffs assert that § 13-17-201 creates disharmony
with § 13-17-102(7), C.R.S. (1987 Repl.Vol. 6A) which
provides that:
14a
No attorney or party shall be assessed attorney fees
as to any claim or defense which the court deter-
mines was asserted by said attorney or party in a
good faith attempt to establish a new theory of law
in Colorado.
If two statutes conflict, the provisions of the specific
statute will control over the general, and the provisions
of the statute enacted last in time will control over one
enacted earlier. L.D.G. v. E.R., 723 P.2d 746 (Colo.
App.1986). Section 13-17-201 is more specific as it ap-
plies only to tort actions which are dismissed pursuant
to C.R.C.P. 12(b). Section 13-17-201 was enacted in
1987, see Colo. Sess.Laws 1987, ch. 100 at 547, later
in time than § 13-17-102(7) which was enacted in 1977.
See Colo.Sess.Laws 1977, ch. 107 at 460.
The mandatory attorney fees award provision of
§ 13-17-201 contains no express exclusion for claims
brought in a good faith attempt to establish a new rule
of law in Colorado. Thus, to the extent that § 13-17-201
and § 13-17-102(7), are in conflict, we conclude that
§ 13-17-201 controls, and the trial court did not err in
awarding defendants their fees on that basis. Cf. Shaw
v. Baesemann, 773 P.2d 609 (Colo.App.1988).
Cc.
Alternatively, plaintiffs argue that § 13-17-201 should
not have been applied to their claims because they con-
ditionally offered to confess defendants’ motion to dis-
miss. Because the record does not support this conten-
tion, we disagree.
In response to defendants’ motion to dismiss, plaintiffs
filed a pleading with the trial court captioned “Plaintiffs’
Partial Opposition to and Partial Conditional Confession
of Defendants’ Motion to Dismiss and Plaintiffs’ Cross
Motion for Stay of Procedeings until Conditions for Dis-
missal may be Satisfied.” In that pleading they conceded
15a
that, if they had a claim for relief in federal court under
ERISA, their state court claims would be preempted as
directly conflicting with that cause of action. As to ex-
press preemption under the terms of the federal ERISA
legislation, however, plaintiffs maintained throughout this
litigation that preemption on those grounds did not apply.
By implication, § 13-17-201 allows a plaintiff to escape
liability for attorney fees by seeking a voluntary dismissal
or by filing a stipulation of dismissal, or by confessing to
a defendant’s motion to dismiss under C.R.C.P. 12(b).
Employers Insurance of Wausau v. RREEF USA Fund-
II (Colorado), Inc., supra.
Plaintiffs here, in contrast, sought to maintain their
state law claims unless and until the federal court reached
a determination that they had a federal ERISA cause of
action. In an attempt specifically to preserve the state
court litigation, they argued that express statutory pre-
emption did not apply. This is quite distinct from a con-
fession to a C.R.C.P. 12(b) dismissal motion which would
have ended the state court lawsuit entirely. Cf. First In-
terstate Bank v. Berenbaum, supra (Section 13-17-201
operates only when an entire action has been dismissed).
D.
Lastly, plaintiffs contend that the trial court awarded
an excessive amount of attorney fees to defendants be- -
cause much of the briefs filed in the motion to dismiss
were redundant of briefs filed in federal cases concerning
the same set of facts and issues. We perceive no abuse
of discretion.
If an award of attorney fees is supported by the record,
it will not be disturbed on appeal. In re Conservatorship
of Roth, 804 P.2d 265 (Colo.App.1990); see also In re
Marriage of Hahn, 628 P.2d 175 (Colo. App.1981). A
determination that the amount requested for such an
award is reasonable is a question of fact for the trial
16a
court and will be upheld on appeal unless patently erron-
eous. Spensieri v. Farmers Alliance Mutual Insurance
Co., 804 P.2d 268 (Colo.App.1990).
Here, the trial court held a hearing on the attorney
fees request and took testimony to the effect that defend-
ants had requested fees representing half of the total
amount of time spent on the motion to dismiss. Finding
that this was reasonable under the circumstances because
it took into account any duplication of work, the trial
court awarded the amount requested. The trial court
also found that the time expended was equivalent to the
time expended in resisting the motion to dismiss by plain-
tiffs’ attorneys, who also were familiar with the facts and
issues from their participation in the other cases.
These findings are supported by the record, and we
decline to disturb them on appeal. See Williams v.
Farmers Insurance Group, Inc., 781 P.2d 156 (Colo.
App.1989), aff'd, 805 P.2d 419 (Colo.1991).
The judgment is affirmed.
MARQUEZ and BRIGGS, JJ., concur.
So Seine fap We eae
17a
APPENDIX B
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
No. 92-1298
FREDERIC J. RAYMOND, J.A. MORRISON, ROBERT G.
JACOBSEN, DONALD F. HILL, GeorGe H. LIVERISs,
ROBERT A. IRWIN, A.D. BOND, VIRGINIA HOWARD, IRA
S. REAvis, and BILLY RHEA SARGENT, for themselves
and on behalf of others similarly situated, and others
as opt in or consent plaintiffs pursuant to applicable
federal law, Plaintiffs-A ppellees,
V.
MoBIL Ort CORPORATION,
Defendant-A ppellant.
Jan. 20, 1993
Before LOGAN, ANDERSON, and BALDOCK, Cir-
cuit Judge.
STEPHEN H. ANDERSON, Circuit Judge.
In this class action involving the Employee Retirement
Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461,
defendant/appellant Mobil Oil Corporation appeals under
28 U.S.C. § 1292(b) from an interlocutory order of the
district court denying Mobil’s motion for summary judg-
ment on certain claims of plaintiffs, former employees of
Mobil.’ Plaintiffs’ action arose out of the same pension
128 U.S.C. § 1292(b) permits interlocutory appeals from orders
involving “a controlling question of law as to which there is sub-
stantial ground for difference of opinion. . . .” By order dated
September 30, 1992, a panel of this court granted Mobil’s petition
to bring this interlocutory appeal, and ordered the appeal expedited.
18a
plan amendment involved in a previous decision of this
court, Mitchell v. Mobil Oil Corp., 896 F.2d 463 (10th
Cir.), cert. denied, 498 U.S. 898, 111 S.Ct. 252, 112
L.Ed.2d 210 (1990), as well as a recent decision of the
Fifth Circuit, Christopher v. Mobil Oil Corp., 950 F.2d
1209 (Sth Cir.), cert. denied, U.S. , 113 S.Ct.
68, 121 L.Ed.2d 35 (1992). Because we conclude that
plaintiffs are not “participants” in an ERISA plan, and
therefore lack standing to sue under ERISA, we reverse.
the district court’s denial of Mobil’s motion for summary
judgment and remand for entry of summary judgment in
favor of Mobil.
BACKGROUND
The essential undisputed facts relevant to this appeal
are set forth in the Mitchell and Christopher opinions.
We quote at some length from each:
Until 1977, Mobil provided retirement benefits
only in the form of an annuity. In 1977, Mobil
added a “lump-sum option” to its retirement plan,
the terms of which, for the purposes of this case,
appear in the Retirement Plan of Mobil Oil Corpora-
tion as of January 1, 1984 (the Plan). Under the
Plan, an employee could elect to receive a lump-sum
payment which had the same equivalent actuarial
value, discounted at 5%, as the annuity. In the case
of early retirement, the Plan reduced the lump-sum
payment by 5% for each year of retirement prior to
the age of sixty. To qualify for the lump-sum op-
tion, an employee had to elect this option prior to
retirement; had to be over fifty-five; and, at the date
of his retirement, had to have a net worth of at least
$250,000 or an accumulated lump sum in excess of
$250,000.
In February 1984, Mobil amended the lump-sum
option. It raised the discount rate prospectively from
5% to 9.5% and increased the eligibility threshold
from $250,000 to $450,000. It also linked the new
19a
threshold to the Consumer Price Index (CPI), pro-
jecting a rise in the threshold to correlate with a rise
in the CPI. These changes, however, would not
take effect until at least six months after Mobil an-
nounced them, pending approval by the IRS. The
delayed effective date gave employees who were elig-
ible for the lump-sum payment under the old criteria,
but who might not meet the new threshold, the op-
portunity to decide whether to retire and take the
lump sum or to continue working and accumulating
more pension benefits with the possibility that they
might not accumulate sufficient additional benefits
to meet the new threshold requirement at the date
of their retirement.
Mitchell, 896 F.2d at 466.
On July 16, 1984, Mobil sought a determination
from the IRS that the plan as amended continued to
meet the Internal Revenue Code’s requirements for
favorable tax treatment, including the requirement
that pension plans not “discriminate in favor of
highly compensated employees.” 26 U.S.C. § 401
(a)(4). In meetings in late September 1984, the
IRS reviewing agent expressed concern that the
amended plan could result in benefits favoring highly
compensated employees, and indicated that he might
need to seek technical advice from Washington. In
response, Mobil adopted another plan amendment al-
lowing Mobil, in its sole discretion, to waive the
eligibility threshold in individual cases for valid cause
shown. After insertion of this provision, the IRS
issued to Mobil a favorable determination letter on
November 23, 1984, noting that continued qualifi-
cation of the plan would depend upon its effect in
operation.
Mobil announced the IRS approval to its employ-
ees on December 21, 1984, but did not notify its
20a
employees of the waiver provision until well after
expiration of the six-month window—October 1985.
Christopher, 950 F.2d at 1213.’
Porter Mitchell, the plaintiff in Mitchell, was a fifty-
six year old Mobil employee who retired during the six-
month window period, and took his retirement benefits
under the lump-sum $250,000 option, for which he quali-
fied. He brought suit, claiming that, by amending its re-
tirement plan, Mobil had willfully violated the Age Dis-
crimination in Employment Act (ADEA), 29 U.S.C.
§§ 621-634, by constructively discharging him because
of his age, had “breached its fiduciary duties under
ERISA and had violated ERISA’s anti-cutback provision,
29 U.S.C. § 1054(g), by retroactively limiting his right
to the lump-sum benefit, an accrued benefit.” Mitchell,
896 F.2d at 466. He also claimed that Mobil violated
§ 510 of ERISA, 29 U.S.C. § 1140, which prohibits dis-
crimination against or discharge of a participant in an
ERISA-covered benefit plan “for the purpose of interfer-
ing with the attainment of any right to which such par-
ticipant may become entitled under the plan.”
After receiving a favorable jury verdict awarding him
substantial damages, this court reversed the award on
appeal. We held that Mitchell had established that he had
been constructively discharged because of his age, but
that he had failed to prove that Mobil’s proffered justifi-
2 The existence of the waiver provision was not discovered by
Mitchell in his case until trial was underway. Our decision in
Mitchell makes no mention of the waiver provision. The plaintiffs
in Christopher argued that the concealment of the waiver option
was fraudulent, and the plaintiffs in this case have, following
Christopher, made the same fraud argument concerning the waiver
option.
8 As we noted in our decision, the availability of the lump-sum
option “was important to Mr. Mitchell because at the time he
was making [his choice], the market interest rate was over 9%.
As a result, his lump sum, discounted at 5%, was worth approxi-
mately 140% more than his annuity.” Mitchell, 896 F.2d at 466.
2la
cation for its plan amendment was a mere pretext for
discrimination.* Accordingly, his ADEA claim failed.
We held that Mitchell lacked standing under ERISA to
challenge the plan amendment, and therefore reversed the
award. We observed that the definition of “participant”
under ERISA “excludes . . . former employees who have
received a lump-sum payment of all their vested benefits
because ‘these erstwhile participants have already received
the full extent of their benefits and are no longer eligible
to receive future payments.’” Mitchell, 896 F.2d at 474
(quoting Joseph v. New Orleans Elec. Pension & Retire-
ment Plan, 754 F.2d 628, 630 (Sth Cir.), cert. denied,
474 U.S. 1006, 106 S.Ct. 526, 88 L.Ed.2d 458 (1985)).
And we held Mitchell lacked standing as a former em-
ployee with a “reasonable expectation of returning to
covered employment,” Firestone Tire and Rubber Co. v.
Bruch, 489 U.S. 101, 117, 109 S.Ct. 948, 958, 103
L.Ed.2d 80 (1989), because he had never sought rein-
statement.
The Christopher plaintiffs also elected to retire during
the six-month window period, opting for the lump-sum
benefit under the old $250,000 criteria. They similarly
filed suit, claiming that Mobil’s conduct surrounding the
plan amendment constituted age discrimination in viola-
tion of the ADEA, as well as “common-law fraud, civil
4 We observed that “[t]he relevant question [in a constructive
discharge case] is whether Mobil’s amendment of the Plan forced
Mr. Mitchell, and similarly situated employees, to choose between
two options both of which would leave him worse off than the
status quo.” Mitchell, 896 F.2d at 467. We held that it did, because
Mitchell was forced to choose between (1) retiring during the
six-month window period, as he in fact did, and receiving the
lump-sum option under the old ($250,000) eligibility requirement,
and (2) continuing to work, but having to requalify for the lump-
sum option under the new ($450,000/linked to the CPI) criteria,
and being uncertain if he ever would in fact so qualify. Either
option was less desirable than the status quo—continuing to work,
knowing that he was qualified for a lump-sum retirement when
he decided to retire.
22a
conspiracy, unlawful interference with contract rights,
breach of the employment contract, negligence, and gross
negligence.” Christopher, 950 F.2d at 1213. The plain-
tiffs’ complaint also alleged “in brief and conclusory fash-
ion” that Mobil’s conduct violated ERISA. /d.°
The district court granted Mobil’s motion for summary
judgment on the ADEA claims, holding that they were
time-barred and granted Mobil’s motion for judgment on
the pleadings on the state law claims, holding that they
were preempted by ERISA. It granted Mobil’s Fed.R.
Civ.P. 12(b)(1) and (6) motion to dismiss the contingent
ERISA claim on the ground that plaintiffs were not “par-
ticipants” under ERISA. On appeal, the Fifth Circuit
affirmed the grant of summary judgment on the ADEA
claims because they were time-barred, affirmed the dis-
missal of the state law claims as preempted by ERISA,
but reversed the dismissal of plaintiffs’ ERISA claims and
remanded the matter to permit plaintiffs to plead their
ERISA claims with greater specificity. The court spe-
cifically noted that it had “not determined that appellants
[plaintiffs] will be able to establish a violation of section
510, only that they should be allowed to attempt to do
so.” Christopher, 950 F.2d at 1223.
Plaintiffs in this case are a class of former employees
who retired on or before January 1, 1985, who were not
told of the waiver option, and who assert that they would
not have lost their jobs had they known of their right to
apply for a waiver. They also allege that they were
unaware of the fact that the $250,000 threshold could
be “grandfathered” for each of them, by virtue of the
enactment of the Retirement Equity Act (“REA”), effec-
tive July 31, 1984.° Specifically, they argue that:
5The brevity of plaintiffs’ ERISA allegations was apparently
the result of their desire to preserve the ERISA claims in the
event their state law claims were held preempted by ERISA.
* Section 301 of the REA prohibits the retroactive elimination
of “an optional form of benefit” by means of a plan amendment.
23a
Mobil interfered with their right to the lump sum
benefit under the $250,000 test by fraudulently lead-
ing plaintiffs to believe that that right was condi-
tioned on an additional requirement, namely that
plaintiffs retire early, when in fact that additional
condition did not really exist. Plaintiffs were also
discharged for the exercise of their right to the lump
sum benefit under the $250,000 test and the right
to be free from the cutback of that benefit. And
Mobil fraudulently caused plaintiffs’ discharges so
that they could not attain the right under the Plan
to apply for a waiver of the $450,000 requirement,
and thereby keep both their jubs and the lump sum
benefit.
Brief of Appellees at 24-25.
They filed suit, alleging that Mobil’s conduct consti-
tuted a willful violation of the ADEA, as well as a viola-
tion of section 510 of ERISA.’ Plaintiffs amended their
29 U.S.C. §1054(g). However, the REA specifically states that
section 301’s prohibition applies only to plan amendments made
after July 30, 1984. 29 U.S.C. § 1001, Historical Note (Pub.L.
98-397, Title III, §§ 302, 303, Aug. 23, 1984, 98 Stat. 1451 § 302(d)
(1)). Mobil formally adopted the plan amendment on June 13,
1984, prior to the effective date of the REA. However, because
it did not receive IRS approval at that time for the entire amend-
ment, it did not in fact adopt the plan with the waiver provision
until September, 1984. Thus, plaintiffs argue that the entire plan
amendment was subject to the REA, so that the right to retire
under the $250,000 lump sum was “grandfathered”. While they do
not suggest that Mobil can be charged with concealing the existence
and effect of the REA, they do claim that Mobil concealed the
facts (i.e. the true date of the plan amendment) bearing upon
their rights under the REA.
7ERISA § 510, 29 U.S.C. § 1140, provides in pertinent part:
It shall be unlawful for any person to discharge, fine, suspend,
expel, discipline, or discriminate against a participant .. .
for exercising any right to which he is entitled under the pro-
visions of an employee benefit plan .. . or for the purpose of
24a
complaint twice, ultimately deleting all of their ERISA
claims except those based on a fraudulent discharge in
violation of section 510. As a result of the alleged
ERISA violations, plaintiffs seek
all equitable and other relief as may be necessary to
redress plaintiffs’ rights asserted under those claims
and to redress the violations of law alleged in those
claims, including an order compelling reinstatement
or equitable reinstatement of each plaintiffs’ employ-
ment at a status and salary commensurate with his
tenure as though his employment with Mobil were
uninterrupted and with all previously elected retire-
ment benefits, as well as accounts benefits, both past
and future, as well as all other compensatory, con-
sequential, and incidental measures of restitution, to-
gether with interest, attorneys’ fees, costs, expert wit-
ness fees, punitive and exemplary damages.
Third Amended Complaint at 22, Appellant’s Appendix
Vol. I at A000022.
DISCUSSION
Under ERISA § 502, 29 U.S.C. § 1132, “participants”
have standing to bring civil actions to enforce their
rights under the terms of an ERISA-covered benefit plan
or to enforce ERISA’s provisions.* The term “partici-
interfering with the attainment of any right to which such
participant may become entitled under the plan. ...
8 Section 502 provides in pertinent part:
(a) Persons empowered to bring a civil action
A civil action may be brought—
(1) by a participant or 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
plea, to enforce his rights under the terms of the plan, or to
clarify his rights to future benefits under the terms of the
plan ;
ERISA § 502, 29 U.S.C. § 1132.
25a
pant” is statutorily defined as “any employee or former
employee of an employer, . . . who is or may become
eligible to receive a benefit of any type from an employee
benefit plan. . . .” ERISA § 3(7), 29 U.S.C. § 1002(7).
In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
117, 109 S.Ct. 948, 958, 103 L.Ed.2d 80 (1989) the
Supreme Court further defined the term “participant,”
holding that it “is naturally read to mean either ‘em-
ployees in, or reasonably expected to be in, currently
covered employment,’ or former employees who ‘have
. a reasonable expectation of returning to covered
employment’ or who have ‘a colorable claim’ to vested
benefits.” (quoting Saladino v. 1.L.G.W.U. Nat'l Retire-
ment Fund, 754 F.2d 473, 476 (2d Cir.1985), and
Kuntz v. Reese, 785 F.2d 1410, 1411 (9th Cir.) (per
curiam), cert. denied, 479 U.S. 916, 107 S.Ct. 318, 93
L.Ed.2d 291 (1986)). The Court has defined the statu-
tory term “may become eligible” as requiring proof that
the claimant has “a colorable claim that (1) he or she
will prevail in a suit for benefits, or that (2) eligibility
requirements will be fulfilled in the future.” Firestone,
489 US. at 117-18, 109 S.Ct. at 958; see also Uselton v.
Commercial Lovelace Motor Freight, Inc., 940 F.2d 564,
581 n. 16 (10th Cir.), cert. denied, US. , 392
S.Ct. 589, 116 L.Ed.2d 614 (1991). Thus, to have
standing to bring an ERISA action, plaintiffs must either
be employees in or reasonably expected to be in cur-
rently covered employment, or former employees with a
reasonable expectation of returning to covered employ-
ment or a colorable claim to vested benefits. Employees
or former employees seeking to show they “may become
eligible” for a benefit must prove that they have a color-
able claim that they will prevail in a suit for benefits, or
that eligibility requirements will be fulfilled in the future.
Plaintiffs argue that this case is like Christopher and,
more importantly, is distinguishable from Mitchell. They
therefore claim they should be afforded standing as par-
ticipants, as the Christopher plaintiffs provisionally were,
26a
and not be bound by our finding of no standing in
Mitchell. ?
The crucial difference they assert exists between this
case and Mitchell is that the entire case in Mitchell pro-
ceeded on the theory that Porter Mitchell was presented
with a choice between retiring under the $250,000 lump
sum option and continuing to work with the uncertainty
of ever qualifying for the $450,000 lump sum. Thus,
they characterize our Mitchell opinion as holding that
“an employee faced with a difficult choice between pre-
serving a valuable retirement benefit but giving up his job
versus foregoing the benefit and keeping his job generally
cannot choose the former, leave his job with all earned
wages and benefits paid, and then later sue under ERISA
for wages and benefits not earned.” Brief of Appellees at
2. They assert that the choice Mr. Mitchell made was a
“conscious one” even if “coercive” and amounting to a
“constructive discharge.” Because Mr. Mitchell’s choice
was conscious, plaintiffs argue, he could only establish
ERISA standing by meeting one of the tests for “former
employees” under Firestone—either a colorable claim to
vested benefits or a reasonable expectation of returning
to covered employment.
By contrast, they assert that plaintiffs’ choices here
were not conscious, because they were fraudulently pro-
cured and were therefore “no different from outright
firings under ERISA §510.” Jd. at 3. Relying on
Christopher, they argue that Mobil’s deceptive and fraud-
ulent conduct, in violation of ERISA, vitiated the volun-
tariness of their decisions to retire. They therefore assert
that, unlike Porter Mitchell, they need not establish stand-
ing as “former employees.” While plaintiffs are obviously
in fact former employees, they argue they are to be
viewed: legally as current employees, with clear partici-
pant status because they were current employees at the
time of the ERISA violation which effectively involun-
S tlihctorsr NirscdRei ai nine aes 4 a9
27a
tarily discharged them.? Even if they have to establish
standing as former employees, plaintiffs argue they have
demonstrated the existence of a genuine factual issue as
to whether they have a reasonable expectation of return-
ing to covered employment, such that Mobil’s motion for
summary judgment was properly denied.
Mobil responds that this case “is Mitchell redux.” Brief
of Appellant Mobil Oil Corporation at 17. It contends
both that Mr. Mitchell clearly argued and the Mitchell
opinion clearly held that an employee who retires, even
if fraudulently induced to do so, and takes all the vested
benefits to which he is entitled and does not ask his em-
ployer for reinstatement and has no reasonable expecta-
tion, based on custom or practice, that he will be re-
instated, lacks standing to bring an ERISA action. He
is clearly a former employee, who has no colorable claim
to vested benefits (he has received them all already and
cannot show that he will fulfill eligibility requirements
in the future) and has no reasonable expectation of re-
turning to covered employment (he has not sought re-
instatement from his employer, and has no factual basis
for believing that he will be reinstated).’? He is merely
seeking damages, not ERISA-protected benefits.
Thus, Mobil asserts that Mitchell correctly established
a bright-line test that ERISA protects only benefits, and
an employee who leaves his employment, under any cir-
cumstance, and receives all his benefits, cannot sue under
®They alternatively argue that their standing as participants
must be determined as of the time of the ERISA violation, and not
at the time of their lawsuit. Under that theory too they would have
participant status because they were clearly participants at the
time of the alleged ERISA violation, and they would not have to
meet the former employee tests for standing.
10 Mobil argues that plaintiffs have failed to show either that
they have a reasonable expectation of returning to covered employ-
ment or a colorable claim to vested benefits by showing that eligi-
bility requirements will be fulfilled in the future.
£3,
28a
ERISA. Moreover, Mitchell established that a request for
judicial reinstatement is per se insufficient to establish a
reasonable expectation of returning to covered employ-
ment. “Thus, ERISA does not provide a cause of action
for former employees who have fulfilled all their eligi-
bility requirements, received the full amount of their
vested benefits, and seek only (a) reinstatement to accrue
further benefits or (b) damages based on years they never
worked.” Brief of Appellant Mobil Oil Corporation at
28-29.
We review the denial of a motion for summary judg-
ment de novo, applying the same standard as did the dis-
trict court. Miller v. Coastal Corp., 978 F.2d 622 (10th
Cir.1992). Summary judgment will only be granted if
“viewing the facts in the light most favorable to the
opposing party, there is no genuine issue of material fact
in dispute and the moving party should prevail as a mat-
ter of law.” Méillensifer v. Retirement Plan for Salaried
Employees of Cotter Corp., 968 F.2d 1005, 1007 (10th
Cir.1992) (quoting Woolsey v. Marion Lab., Inc., 934
F.2d 1452, 1456 (10th Cir.1991)); Boren v. Southwest-
ern Bell Tel. Co., Inc., 933 F.2d 891, 892 (10th Cir.
1991).
We begin by rejecting plaintiffs’ rather novel argument
that they really are, legally, current employees. As indi-
cated, ERISA provides a remedy for “participants.” “Par-
ticipants” include “ ‘employees in, or reasonably expected
to be in, currently covered employment.’” Firestone, 489
U.S. at 117, 109 S.Ct. at 957-58 (quoting Saladino, 754
F.2d at 476), or certain “former employees.” Attributing
“ ‘conventional meanings to the statutory language,’ ” id.,
as we must, it defies common sense to conclude that
employees who retired some seven years ago are anything
other than “former employees.” Thus, plaintiffs are, in
fact and in law, “former employees.” See Katzoff v. East-
ern Wire Prod. Co., 808 F.Supp. 96, 98 (D.R.I., 1992)
(rejecting argument that plaintiff was a current employee
29a
and therefore an ERISA participant even though he was
“not currently working.”); Andre v. Salem Technical
Serv., 797 F.Supp. 1416, 1421 (N.D.Ill. 1992) (“Be-
cause [plaintiff] no longer works for [employer], he does
not fall within the statutory provision for suits by current
‘employees.’ ”).
In reaching this conclusion, we similarly reject plain-
tiffs’ related argument that their standing as participants
should be judged as of the time of the ERISA violation
and not as of the time of their lawsuit. Such an interpre-
tation runs counter to the natural meaning of ERISA
itself. Section 502 provides that “[a] civil action may
be brought . . . by a participant . . . 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.” ERISA
§ 502, 29 U.S.C. § 1132 (emphasis added). The statute
by its terms does not permit 2 civil action by someone
who was a participant at the time of the alleged ERISA
violation. Cf. Teagardener v. Republic-Franklin Inc. Pen-
sion Plan, 909 F.2d 947, 951 n.2 (6th Cir.1990) (“The
Plan provides benefits for a ‘Former Participant,” a term
that is not defined or mentioned in ERISA.”), cert. de-
nied, 498 U.S. 1027, 111 S.Ct. 678, 112 L.Ed.2d 670
(1991). Rather, it is written in the present tense, indi-
cating that current participant status is the relevant test.
See Winchester v. Pension Comm. of Michael Reese
Health Plan, Inc., 942 F.2d 1190, 1194 (7th Cir.1991)
(“[Plaintiff] was not a plan participant at the time the
action was filed and thus has no standing.”); Yancy v.
American Petrofina, Inc., 768 F.2d 707, 708 (Sth Cir.
1985) (“[Q]uestions of standing must be resolved on
the facts existing when the challenge is raised.”); Mc-
Kinnon vy. Cairns, 698 F.Supp. 852, 858 (W.D.Okla.
1988). Furthermore, there would be little need for the
widely-invoked category of “former employees” if partici-
30a
pant status was based upon status at the time of the
alleged ERISA violation.”
Having concluded that plaintiffs must meet the re-
quirements for former employees in order to satisfy
ERISA’s “participant” requirement, we conclude that,
despite plaintiffs’ artful attempts to fit within Christo-
pher, Mitchell compels the conclusion that plaintiffs
lack standing.
As indicated, only former employees who are or “may
become eligible to receive a benefit of any type from an
employee benefit plan” satisfy the participant require-
ment of ERISA. That definition includes “former em-
ployees who ‘have a reasonable expectation of
returning to covered employment’ or who have ‘a color-
able claim’ to vested benefits.” Firestone, 489 U.S. at
117, 109 S.Ct. at 958 (quoting Kuntz v. Reese, 785 F.2d
1410, 1411 (9th Cir.) per curiam), cert. denied, 479
U.S. 916, 107 S.Ct. 318, 93 L.Ed.2d 291 (1986)). A
former employee may further prove that he or she “may
become eligible” to receive a benefit by showing he or
she has “a colorable claim that (1) he or she will prevail
in a suit for benefits, or that (2) eligibility requirements
will be fulfilled in the future.” 7d.
We held in Mitchell that that definition simply “ex-
cludes . . . former employees who have received a lump-
11 We disagree with plaintiffs’ assertion that Drennan v. General
Motors Corp., 977 F.2d 246 (6th Cir.1992), “held that an employee
who has lost his status as a current employee and thus as an ERISA
‘participant’ as a result of his employer’s deceit has standing to sue
under ERISA because he had such standing at the time of the
ERISA violation.” Brief of Appellees at 5. In Drennan, the Sixth
Circuit held that employees who were eligible for a certain benefit
payout were participants for ERISA purposes, even though they
had already received their benefits under another, less favorable,
benefits plan. By contrast, plaintiffs here in fact received all bene-
fits for which they were eligible. They cannot claim participant
status based on eligibility for benefits not received.
Raimond > taaMisdaek Sta a Pe
31a
sum payment of all their vested benefits because ‘these
erstwhile participants have already received the full extent
of their benefits and are no longer eligible to receive
future payments.’” Mitchell, 896 F.2d at 474 (quoting
Joseph, 754 F.2d at 630); see also Sanson v. General
Motors Corp., 966 F.2d 618, 621 (11th Cir.1992) (re-
tiree claiming he was fraudulently induced to retire early
is not an ERISA participant); Boren, 933 F.2d at 893-94;
Teagardener, 909 F.2d at 952 (“Explicit in the Supreme
Court’s definition of ‘participant’ in Bruch is a require-
ment that the plaintiffs prove either that their right to
assets has ‘vested’ or will ‘vest.’”); Nishimoto v. Feder-
man-Bachrach & Assocs., 903 F.2d 709, 714 (9th Cir.
1990) (“former employees whose vested benefits under
a plan have already been distributed in a lump sum at
the time they file suit are not ‘participants’ within the
meaning of section 1002(7)”). They therefore seek “a
damage award, not vested benefits improperly withheld.”
Mitchell, 896 F.2d at 474; Boren, 933 F.2d at 893-94;
Saporito v. Combustion Eng’g, Inc., 843 F.2d 666, 671
(3rd Cir.1988) (“As a general rule, employees who take
early retirement and elect to receive lump sum retirement
benefits do not have standing to seek the increased pay-
ment later made to retirees or to challenge changes in
the retirement plan.”), vacated, 489 U.S. 1049, 109 S.Ct.
1306, 103 L.Ed.2d 576 (1989); Kuntz, 785 F.2d at
1411 (“plaintiffs are not participants because, as former
employees whose vested benefits under the plan have al-
ready been distributed in a lump sum, [they] were not
‘eligible to receive a benefit’ and were not likely to be-
come eligible to receive a benefit, at the time they filed
the suit.”); Yancy v. American Petrofina, Inc., 768 F.2d
707 (5th Cir.1985) (per curiam); cf. Sommers Drug
Stores Co. Employee Profit Sharing Trust v. Corrigan,
883 F.2d 345, 350 (Sth Cir.1989) (plaintiffs are ERISA
participants because they claimed “that the amount re-
ceived was not the full amount of vested benefits due
under the terms of the profit sharing plan... .”). The
32a
crucial point is the receipt of the “full extent” of their
vested benefits. That is equally true of plaintiffs in this
case. They too seek a damage award based upon their
allegedly fraudulent discharge from their jobs; they do
not seek “vested benefits improperly withheld.”
Plaintiffs invoke the Christopher court’s analysis in an
attempt to avoid the breadth of that holding in Mitchell.
Thus, they argue that the fact that Mobil fraudulently
induced them to retire by hiding from them the existence
of the waiver provision and certain facts which they needed
to be able to properly evaluate the impact of the REA
on their pension rights, somehow renders our Mitchell
holding inapplicable to them. We disagree. The existence
of fraud is irrelevant to the linchpin of our Mitchell hold-
ing—the receipt of all benefits to which the employee is
entitled under the plan.
Furthermore, the Christopher court itself acknowledged,
in its discussion of plaintiffs’ ADEA claims, that the al-
leged fraud made no legal or conceptual difference con-
cerning the voluntariness of plaintiffs’ decision:
[A]ppellants allege a constructive discharge arising
from the choice to which they were put by the plan
amendment. To further argue that the actual elec-
tion made was involuntary because it was based on
incomplete information would be superfiuous;. invol-
untariness is implicit in appellants’ argument that
they were coerced into early retirement by the threat-
ened removal of the lump sum option.
Christopher, 950 F.2d at 1215. Similarly, plaintiffs here
cannot say that the constructive discharge in Mitchell
was actually a conscious choice whereas the equally com-
pelled discharge here was completely involuntary simply
because plaintiffs here acted on incomplete information.
Moreover, the Christopher court’s “but for” standing
analysis—‘“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 bene-
33a
fits”, Christopher, 950 F.2d at 1221—amounts to the
kind of analysis rejected by the Supreme Court in Fire-.
stone: “[t]o say that a ‘participant’ is any person who
claims to be one begs the question of who is a ‘partici-
pant’ and renders the definition set forth in § 1002(7)
superfluous.” 489 U.S. at 117, 109 S.Ct. at 957. To
say that but for Mobil’s conduct, plaintiffs would have
standing is to admit that they lack standing and to allow
those who merely claim to be participants to be deemed
as such. See Stanton v. Gulf Oil Corp., 792 F.2d 432,
435 (4th Cir. 1986) (“The effect of reading a ‘but for’
test is to impose participant status on every single em-
ployee who but for some future contingency may become
eligible. Neither caselaw nor other provisions of ERISA
supports such a reading of ‘participant.’”). Plaintiffs
therefore cannot, under Firestone, Mitchell, and Boren,
show that they are former employees with a colorable
claim to vested benefits.”
Plaintiffs also assert that they satisfy the “participant”
requirement as former employees with “a reasonable ex-
pectation of returning to covered employment.” More
specifically, they argue that there is a genuine factual dis-
pute as to that issue, such that summary judgment for
Mobil on their ERISA claims would be improper.
In Mitchell, we agreed with Mobil that Mr. Mitchell
“has never had a reasonable expectation of returning to
covered employment.” In so doing, we observed that Mr.
Mitchell “did not claim that Mobil had improperly with-
held vested benefits. He also did not make such a claim
12 We also note, as have several other courts, that Department of
Labor regulations interpreting ERISA specifically exclude from the
definition of participant “an individual to whom an insurer has
made an irrevocable commitment to pay all the benefits to which
the individual is entitled under the plan.” 29 C.F.R. § 2610.2. See,
e.g., Teagardener, 909 F.2d at 952; Kuntz, 785 F.2d at 1412; Joseph,
754 F.2d at 630; Saladino v. I1.L.G.W.U. Nat’l Retirement Fund,
754 F.2d 473, 476-77 (2d Cir.1985); see also 29 C.F.R. § 2510.3-
3(d) (2) (ii) (B).
34a
in his complaint, nor did he seek reinstatement.” Mitchell,
896 F.2d at 474 (emphasis added).
Mobil argues we established a clear rule that a request
for judicial reinstatement is per se insufficient to establish
a “reasonable expectation of returning to covered employ-
ment,” because Mitchell made it clear to this court in his
briefs and his petition for rehearing that he had sought
judicial reinstatement. Thus, Mobil argues that our rejec-
tion of his argument must be viewed in that context and
must be read as implying that a request for judicial rein-
statement alone is insufficient.
We are reluctant to read anything more into a judicial
opinion, even one of our own, than what the plain words
of the opinion state. Viewing the actual language of our
Mitchell opinion alone, without any background informa-
tion to which we may be privy but which others lack, we
must conclude that the opinion does not establish any
per se rule concerning the effect of a request for judicial
reinstatement. The opinion simply observes that Mr.
Mitchell did not “seek reinstatement,” and that was one
reason why he did not have a reasonable expectation of
returning to covered employment. Mitchell is unclear as
to what kind of request for reinstatement was insufficient
to establish a reasonable expectation of returning to cov-
ered employment.
We agree with Mobil, however, that plaintiffs here can-
not satisfy ERISA’s participant requirement by claiming
to be former employees with a reasonable expectation of
returning to covered employment. Few cases have ex-
amined carefully what constitutes such a reasonable ex-
pectation. We agree with the analysis in Shawley v.
Bethlehem Steel Corp., 784 F.Supp. 1200, 1205 (W.D.Pa.
1992):
Plaintiffs had no statutory right to be rehired, nor
any contractual right to be rehired. ... It would be
paradoxical to hold that the pension plan provisions
gave them more. For a reasonable expectation of
7 ata hat nae th
‘atetalam tae tear pese
35a
returning to employment to exist, there must be a
claim of right on the part of the former employee to
return to work.
See also Winchester v. Pension Comm. of Michael Reese
Health Plan, Inc., 942 F.2d 1190, 1193 (7th Cir. 1991)
(refusing to hold that “by filing a discrimination suit,
[after being dismissed for cause], plaintiff may harbor a
‘reasonable expectation of returning to covered employ-
ment.’”); Zydel v. Dresser Indus., Inc., 764 F.Supp. 277,
280-81 (W.D.N.Y. 1991) (reasonable expectation of re-
turning to covered employment evaluated with reference
to four specific pieces of evidence); Rhee v. Witco Corp.,
762 F.Supp. 211, 213 (N.D.Ill. 1991) (ERISA plaintiff
had no reasonable expectation of returning to covered em-
ployment because he “does not seek to return to work
. . .; he wants only to obtain the benefits he would have
accrued had he continued to work.”); Deller v. Portland
Gen. Elec. Co., 727 F.Supp. 1369, 1370 (D.Ore. 1989)
(former employees terminated pursuant to a reduction in
force “are clearly not employees . . . who have a reason-
able expectation of returning to covered employment.”).
We hold as a matter of law that a reasonable expectation
of returning to covered employment cannot encompass the
undisputed situation here, where plaintiffs retired, received
all their vested benefits, did not ask their employer for
reinstatement and can point to nothing suggesting that
Mobil will, should or must reinstate them, but instead
filed suit seeking reinstatement to commence accruing
benefits anew.
Finally, plaintiffs suggest that a definition of “partici-
pant” which excludes them will leave them without a
remedy, inasmuch as their state law claims were held
preempted by ERISA.” Preemption is not at issue in this
case, and we do not address it. However, we note that
the fact that a state law claim may be preempted does
18 Counsel for plaintiffs stated at oral argument that they have
appealed the state court decision finding preemption.
36a
not necessarily mandate that there be an ERISA remedy.
See Corcoran v. United Healthcare, Inc., 965 F.2d 1321,
1333 (Sth Cir.) (“While we are not unmindful of the
fact that our interpretation of the preemption clause leaves
a gap in remedies within a statute intended to protect
participants in employee benefits plans, the lack of an
ERISA remedy does not affect a pre-emption analysis.”),
cert. denied, USS. , 113 S.Ct. 812, 121 L.Ed.2d
684 (1992); Cromwell v. Equicor HCE Corp., 944 F.2d
1272, 1276 (6th Cir. 1991) (“Nor is it relevant to an
analysis of the scope of federal preemption that appellants
may be left without a remedy.”), cert. denied, US.
, 113 S.Ct. 2, 120 L.Ed.2d 931 (1992); Hospice of
Metro Denver, Inc. v. Group Health Ins., 944 F.2d 752,
755 (10th Cir. 1991) (“We are aware that preemption
normally is not dependent upon the availability of ERISA
remedies.”) (citing Pilot Life Ins. Co. v. Dedeaux, 481
U.S. 41, 54, 107 S.Ct. 1549, 1556, 95 L.Ed.2d 39
(1987); Lister v. Stark, 890 F.2d 941, 946 (7th Cir.
1989) ).*
14 Furthermore, ERISA preemption extends to “any and all State
laws insofar as they may now or hereafter relate to any employee
benefit plan.” ERISA § 514(a), 29 U.S.C. § 1144(a). The Supreme
Court has “repeatedly stated that a law ‘relates to’ a covered em-
ployee benefit plan for purposes of § 514(a) ‘if it has a connection
with or reference to such a plan.’” District of Columbia v. Greater
Washington Bd. of Trade, —— USS. . , 113 S.Ct. 580,
583, 121 L.Ed.2d 513 (Dec. 14, 1992) (quoting Shaw v. Delta
Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d
490 (1983)); see also Ingersoll-Rand Co. v. McClendon, 498 U.S.
133, 111 S.Ct. 478, 482-88, 112 L.Ed.2d 474 (1990); FMC Corp.
v. Holliday, 498 U.S. 52, 58-59, 111 S.Ct. 403, 407-08, 112
L.Ed.2d 356 (1990); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41,
47, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39 (1987); Monarch Cement
Co. v. Lone Star Indus., Inc., 982 F.2d 1448, 1451-52, (10th
Cir.1992).
While ERISA’s preemption clause is “conspicuous for its breadth,”
Ingersoll-Rand, 498 U.S. at 138, 111 S.Ct. at 482 (quoting FMC
ne rely Peet
“Ae os oa Lata led
37a
Furthermore, while pension and other benefits are un-
deniably an important part of an employee’s compensation
package, they are nonetheless an adjunct to the primary
item which the employee has—his or her job. And,
Corp. v. Holliday, 498 U.S. at 58, 111 S.Ct. at 407), we recently
observed in Monarch Cement Co., that the:
purpose of ERISA preemption is twofold. First, preemption
“protect[s] the interests of employees and their beneficiaries in
employee benefit plans.” Second, preemption “ensure[s] that
plans and plan sponsors are subject to a uniform body of benefit
law ... [by] minimizing the administrative and financial
burden of complying with conflicting directives among States
or between States and the Federal Government.”
982 F.2d at 1453-54 (quoting Straub v. Western Union Tel. Co.,
851 F.2d 1262, 1265 (10th Cir. 1988) (quoting Nachwalter v.
Christie, 805 F.2d 956, 960 (11th Cir.1986)) and Ingersoll-Rand,
111 S.Ct. at 484). “ ‘What triggers ERISA preemption is not just
any indirect effect on administrative procedures but rather an
effect on the primary administrative function of benefit plans, such
as determining an employee’s eligibility for a benefit and the
amount of that benefit.’” Monarch Cement Co., 982 F.2d at 1452
(quoting Aetna Life Ins. Co. v. Borges, 869 F.2d 142, 146-47 (2d
Cir.), cert. denied, 493 U.S. 811, 110 S.Ct. 57, 107 L.Ed.2d 25
(1989) ); see also National Elevator Indus., Inc. v. Calhoon, 957
F.2d 1555, 1558-59 (10th Cir.), cert. denied, U.S. , 113
S.Ct. 406, 121 L.Ed.2d 331 (1992).
ERISA’s preemptive reach, although broad, is not unlimited.
Monarch Cement Co., 982 F.2d at 1452; Hospice of Metro Denver
v. Group Health Ins., 944 F.2d 752, 755 (10th Cir.1991). In
Monarch Cement Co., we tried to define the parameters of ERISA
preemption, noting that the case law in the area is far from
uniform:
Laws that have been ruled preempted are those that provide an
alternative cause of action to employees to collect benefits pro-
tected by ERISA, refer specifically to ERISA plans and apply solely
to them, or interfere with the calculation of benefits owed to an
employee. Those that have not been preempted are laws of general
application—often traditional exercises of state power or regulatory
authority—whose effect on ERISA plans is incidental.
Id. at 1452, (quoting Aetna Life Ins. Co., 869 F.2d at 146); see
also National Elevator Indus., Inc., 957 F.2d at 1558-59; Hospice
of Metro Denver, 944 F.2d at 755. Thus, ERISA does not preempt
“if the state law has only a ‘tenuous, remote, or peripheral’ con-
38a
ERISA’s goal of protecting those benefits from interfer-
ence does not transform ERISA’s statutory scheme into a
federal job protection scheme where those benefits are
fully paid out, or create a federal cause of action for
wrongful discharge.” To do so would, as Mobil argues,
transform traditional employment law in the fifty states.”
We cannot believe Congress intended such a result when
nection with covered plans, as is the case with many laws of
general applicability.” Greater Washington Bd. of Trade, —— U.S.
at n. 1, 113 S.Ct. at 583 n. 1 (quoting Shaw, 463 U.S. at 100
n. 21, 103 S.Ct. at 2901 n. 21)). An argument could certainly be
made that the fraud claims plaintiffs have made in this case are
such “laws of general applicability.”
Thus, this is not a case where the state law “specifically refers”
to an ERISA plan, as in Greater Washington Bd. of Trade,
U.S. at , 113 S.Ct. at 585, nor even where the preempted claim
is “premised on” the existence of an ERISA plan, as in Ingersoll-
Rand, 498 U.S. at 140, 111 S.Ct. at 483. The state law claim in
Ingersoll-Rand was a common law claim for wrongful discharge
based upon the employer’s desire to prevent the employee from
vesting in his benefit plan. There is no such claim here. Rather,
plaintiffs here simply allege a wrongful discharge, achieved through
fraud. The fact that an ERISA plan was merely part of the means
by which Mobil allegedly fraudulently procured plaintiffs’ dismissal
does not necessarily compel the conclusion under Ingersoll-Rand
that that state law claim is “premised on” the existence of an
ERISA-covered plan. Cf. Tolle v. Carroll Touch, Inc., 977 F.2d
1129 (7th Cir.1992) (state law wrongful discharge claim pre-
empted because claim was that plaintiff was discharged in order
to avoid payment of benefits under ERISA plan); but see Sanson
v. General Motors Corp., 966 F.2d 618, 621 (11th Cir.1992) (plain-
tiffs’ state law fraud claim for fraudulently induced retirement is
preempted) .
15 Indeed, Congress knows perfectly well how to create a federal
cause of action for wrongful discharge when it wants to. See, e.g.,
the ADEA, 29 U.S.C. §§ 621-634; Title VII, 42 U.S.C. § 2000e et seq.
16 Under plaintiffs’ theory, to the extent that the employer-
employee relationship allows termination at-will under state law,
employers would, in some instances, no longer be able to exercise
that right whenever an ERISA-covered plan is part of an employ-
ee’s compensation package.
39a
it enacted ERISA. Cf. Patterson v. Shumate, USS.
‘ , 112 S.Ct. 2242, 2250, 119 L.Ed.2d 519
(1992) (“ERISA’s goal . . . [is to] protect[] pension
benefits.”) (emphasis added); Massachusetts Mut. Life
Ins. Co. v. Russell, 473 U.S. 134, 148, 105 S.Ct. 3085,
3093, 87 L.Ed.2d 96 (1985) (purpose of ERISA is “to
protect contractually defined benefits.”); Hospice of Metro
Denver, 944 F.2d at 755-56; Gavalik v. Continental Can
Co., 812 F.2d 834, 851 (3rd Cir.) (“Proof of incidental
loss of benefits as a result of a termination will not con-
stitute a violation of § 510.”), cert. denied, 484 U.S. 979,
108 S.Ct. 495, 98 L.Ed.2d 492 (1987); Stanton v. Gulf
Oil Corp., 792 F.2d 432, 435 (4th Cir. 1986) (“the leg-
islative intent of ERISA was not to assure the sanctity
of early retirement expectations, but to safeguard accrued
retirement benefits.” ) .””
For the foregoing reasons, we REVERSE the district
court’s denial of Mobil’s motion for summary judgment on
plaintiffs’) ERISA claims and REMAND for entry of
summary judgment in favor of Mobil.
17 The appellees’ “Request For Leave to File Limited Sur-Reply
in Opposition to Motion to Strike Appellees’ Supplemental Appendix
and Portions of Appellees’ Brief” is granted. Appellant’s “Motion
to Strike Appellees’ Supplemental Appendix and Portions of Brief
Relying on Supplemental Appendix” is granted insofar as it relates
to materials which were not before the district court in this case.
40a
APPENDIX C
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT
No. 90-4562
GERALD W. CHRISTOPHER, CHARLES L. PRUNTY,
and BILLY G. TURNER,
Plaintiffs-A ppellants,
Vv.
MosBiL_ Ort CORPORATION, RETIREMENT PLAN OF MOBIL
O1L CORPORATION and REx ADAMS,
Defendants-A ppellees.
Appeal from the United States District Court
for the Eastern District of Texas
Jan. 24, 1992
Rehearing Denied Feb. 24, 1992
Before HENLEY *, KING, and GARWOOD, Circuit
Judges.
GARWOOD, Circuit Judge:
Appellants brought claims under the Age Discrimina-
tion in Employment Act (ADEA) and the Employee Re-
* Circuit Judge of the Eighth Circuit, sitting by designation.
4la
tirement Income Security Act (ERISA), as well as
various common-law claims including fraud, civil con-
spiracy, and breach of the employment contract, against
their former employer Mobil Oil Corporation, based on
Mobil’s 1984 amendment of its employee benefit plan
and alleged failure to disclose to appellants all of the
options available under the amended plan. The district
court granted Mobil’s motion for summary judgment on
the ADEA claims on the grounds that the claims were
time-barred and that as a matter of law appellants were
not constructively discharged in violation of ADEA. The
district court also granted Mobil’s request for judg-
ment on the pleadings on appellants’ state law claims on
the ground that they were preempted by ERISA, and
dismissed the ERISA claims on the ground that because
appellants were not participants seeking to recover ben-
efits from a retirement plan, the court lacked jurisdiction
over their ERISA claims. We affirm in part and reverse
and remand in part.
Facts and Proceedings Below
The following facts are drawn from the parties’ sub-
missions of undisputed facts in connection with Mobil’s
motions for summary judgment, judgment on the plead-
ings, and dismissal.
Mobil provides retirement benefits for its employees
through a defined benefit plan, under which employees
receive a pension based on years of service, salary history,
and life expectancy. Until 1977, the standard method of
receiving these pensions was in the form of an annuity.
- In that year, however, Mobil added a lump sum option,
enabling certain employees to receive the actuarial equiv-
alent of their annuity, discounted at five percent, in one
payment following retirement. To be eligible for the
lump sum option, an employee had to have either an
accrued lump sum pension benefit, or a net worth inde-
pendent of the pension, equal to at least $250,000. Also,
42a
the employee was required to be at least fifty-five years
old.
On July 2, 1984, Mobil announced changes to the
lump sum option of the retirement plan, including (1) an
increase in the discount rate from 5% to 9.5%, to oper-
ate prospectively, i.e., to be applied to all earnings after
January 31, 1985; (2) an increase in the eligibility
threshold from $250,000 to $450,000; and (3) a linking
of the new threshold to the Consumer Price Index. These
changes, which were announced as subject to Internal
Revenue Service (IRS) approval, would apply to all
employees retiring after January 31, 1985; thus, em-
ployees otherwise eligible to retire had a six-month win-
dow in which they could retire subject to the lower
threshold and lower discount rate. The choice was a
significant one for employees who met the $250,000
threshold but who were uncertain ever to meet the in-
dexed $450,000 threshold because, with market interest
rates well above 5%, the lump sum pensions were worth
40% more than the annuities. Appellants, Gerald Chris-
topher, Charles Prunty, and Billy Turner, were among
the approximately 1,100 Mobil employees who elected to
take early retirement during the 6-month window. All
three submitted their retirement notices between August
and October 1984, and retired as of January 1, 1985.
_On July 16, 1984, Mobil sought a determination from
the IRS that the plan as amended continued to meet the
Internal Revenue Code’s requirements for favorable tax
treatment, including the requirement that pension plans
not “discriminate in favor of highly compensated employ-
ees.” 26 U.S.C. § 401(a)(4). In meetings in late Sep-
tember 1984, the IRS reviewing agent expressed concern
that the amended plan could result in benefits favoring
highly compensated employees, and indicated that he
might need to seek technical advice from Washington. In
response, Mobil adopted another plan amendment allow-
ing Mobil, in its sole discretion, to waive the eligibility
43a
threshold in individual cases for valid cause shown. After
insertion of this provision, the IRS issued to Mobil a
favorable determination letter on November 23, 1984,
noting that continued qualification of the plan would de-
pend upon its effect in operation.
Mobil announced the IRS approval to its employees on ©
December 21, 1984, but did not notify its employees of
the waiver provision until well after expiration of the six-
month window—October 1985. Because of a 1985 IRS
revenue ruling and subsequent pronouncements, Mobil
eventually entirely deleted the lump sum eligibility thresh-
old in 1986.
Appellants filed age discrimination charges against
Mobil with the Equal Employment Opportunity Commis-
sion (EEOC) on March 1, 1989. They alleged that Mo-
bil’s conduct in amending the plan and concealing the
waiver provision was a concerted scheme to reduce its
work force. By purporting to increase the lump sum
threshold and concealing its awareness that applicable tax
law precluded that action, appellants charged, Mobil in-
duced hundreds of older employees into retirement without
the need to pay them an early retirement bonus. The
EEOC dismissed the charges as untimely filed. Appellants
then commenced this suit on July 7, 1989. They alleged
that Mobil’s conduct constituted age discrimination in vio-
lation of ADEA, 29 U.S.C. §§ 621 et seg., as well as
common-law fraud, civil conspiracy, unlawful interference
with contract rights, breach of the employment contract,
negligence, and gross negligence. In the event that appel-
lants’ state law claims were held to be preempted by
ERISA, the complaint alleged in brief and conclusory
fashion that Mobil’s conduct violated ERISA, apparently
ERISA § 510, 29 U.S.C. § 1140, prohibiting interference
with an employee’s attainment of a right under ERISA.
For all claims, appellants sought the wages and employ-
ment benefits they would have received had they continued
working until normal retirement age. On the ADEA
claims, appellants also requested reinstatement.
44a
Mobil moved for summary judgment on the ADEA and
state law claims. The district court granted the motion,
finding that the ADEA and state law claims were time-
barred, that appellants had not been constructively dis-
charged in violation of the ADEA, and that appellants’
claims of discrimination arose from changes in fringe bene-
fits available under a bona fide retirement plan, not from
discrimination in nonfringe aspects of employment, and
thus were not within the purview of the ADEA according
to ADEA § 4(f)(2), 29 U.S.C. § 623(f)(2). Simultane-
ously, Mobil moved for judgment on the pleadings under
Federal Rule of Civil Procedure 12(c) on the state law
claims on the ground that they were preempted by ERISA,
and dismissal under Federal Rules of Civil Procedure
12(b)(1) & (6) of the contingent ERISA claim on the
ground that appellants were not “participants” seeking to
recover benefits under ERISA § 502, 29 U.S.C. § 1132,
depriving the court of jurisdiction. The district court
granted this motion as well.
Discussion
I. ADEA Claims
We first examine the district court’s grant of summary
judgment on the ADEA claims on the ground that they
were time-barred. In reviewing a grant of summary judg-
ment, all legitimate factual inferences presented by the
record are drawn in favor of the party opposing the mo-
tion. Bozé v. Branstetter, 912 F.2d 801, 804 (Sth Cir.
1990) (per curiam). We can uphold the summary judg-
ment only if our review demonstrates that no genuine issue
of material fact remains and that the moving party is
entitled to judgment as a matter of law. Id.
It is not disputed that the applicable statutes of limita-
tions require an employee to file an age discrimination
charge with the EEOC within 300 days after the alleged
unlawful practice occurred, 29 U.S.C. § 626(d)(2), and
to file a lawsuit within 3 years after the alleged unlawful
practice occurred, 29 U.S.C. §§ 255(a), 626(e). Appel-
45a
lants argue, however, that a genuine issue of material fact
exists as to when their awareness of the facts constituting
the alleged age discrimination was sufficient to commence
the running of the limitations period. See Pruet Produc-
tion Co. v. Ayles, 784 F.2d 1275, 1279 (5th Cir. 1986)
(“{T]he statute does not begin to run until the facts which
would support a cause of action are apparent or should
be apparent to a person with reasonably prudent regard
for his rights.” (quoting Reeb v. Economic Opportunity
Atlanta, Inc., 516 F.2d 924, 930 (Sth Cir. 1975))).
Specifically, they argue that Mobil’s negotiation of a re-
vised plan in October 1984 only came to light in 1988
when counsel for another former employee, Porter Mitchell
(Mitchell), suing Mobil in federal district court in Colo-
rado, discovered the correspondence between Mobil and
the IRS. It was only when this fact became publicly
known at the trial of Mitchell v. Mobil Oil Corp. in De-
cember 1988,’ appellants argue, that they had any reason
to know of Mobil’s concealment of the waiver option.
Appellants’ EEOC filing in March 1989 and their com-
mencement of this suit in July 1989 would both have been
timely if the statute of iimitations had commenced run-
ning in December 1988.
1The alleged fraud was not part of Mitchell’s claims against
Mobil. He argued, rather, that the plan amendment itself consti-
tuted a constructive discharge and was a willful violation of the
ADEA. He also argued that Mobil had breached its fiduciary
duties under ERISA § 404, 29 U.S.C. §1104, and had violated
ERISA’s anti-cutback provision, ERISA §%204(g), 29 U.S.C.
§ 1054(g), by retroactively limiting his right to the lump sum
option, an accrued benefit. The jury found in favor of Mitchell on
his ADEA claim and awarded him damages for back pay, front pay,
and lost benefits. The district court held in favor of Mitchell on the
ERISA claims as well, awarding him compensatory and liquidated
damages. On appeal, the Tenth Circuit reversed, holding that
Mitchell had failed to prove that Mobil’s proffered justification
for the plan amendment was a mere pretext for discrimination,
and that Mitchell was not a participant with standing to assert
ERISA claims, Mitchell v. Mobil Oil Corp., 896 F.2d 463, 471-74
(10th Cir.), cert. denied, _—- U.S. —~, 111 S.Ct. 252, 112 L.Ed.2d
210 (1990). “4
46a
Evaluating the appellants’ claim that the statute of limi-
tations did not commence until December 1988 requires
an analysis of the nature of their ADEA claim. The
ADEA forbids an employer to “discharge any individual
or otherwise discriminate against any individual with re-
spect to his compensation, terms, conditions, or privileges
of employment, because of such individual’s age.” 29
U.S.C. § 623(a)(1). A “discharge” within the meaning
of this section may be constructive if a reasonable person
in the employee’s position would have felt compelled to
resign under the circumstances. Bodnar v. Synpol, Inc.,
843 F.2d 190, 192 (Sth Cir.), cert. denied, 488 U.S. 908,
109 S.Ct. 260, 102 L.Ed.2d 248 (1988). An attractive
early retirement offer, however, is not a constructive dis-
charge merely because it creates a strong incentive to
retire; an early retirement option can constitute a con-
structive discharge only if the employee shows that it
sufficiently alters the status quo that each choice facing
the employee makes him worse off. Mitchell v. Mobil Oil
Corp., 896 F.2d 463, 467 (10th Cir.), cert. denied,
USS. , 111 S.Ct. 252, 112 L.Ed.2d 210 (1990);
Bodnar, 843 F.2d at 193.
The gist of appellants’ prima facie ADEA claim is as
follows. The adoption of the 1984 plan amendment pre-
sented appellants with a choice between unfavorable op-
tions; they faced the choice of retiring within the six-month
window or staying on at Mobil but possibly forgoing eligi-
bility for the lump sum payout. Either could be regarded
as less favorable than staying on at Mobil until normal
retirement age with the assurance of eligibility for the
lump sum payout, which was the “status quo” when the
amendment was adopted. The asserted discriminatory
character of the amendment to the plan arises from the
fact that only employees over the age of fifty-five were put
to that choice. Employees under fifty-five did not presently
qualify for retirement, so although the plan amendment
may have defeated an expectation for them, they were
not confronted with the possibility of losing a benefit for
Ree cata oedian betakte hoeein ota conch emer
on toren as
47a
which they were then qualified. See Mitchell, 896 F.2d
at 496.
This much of the ADEA theory was evident in July
1984 upon the initial announcement of the plan. The
unfavorable choice to which it put “window” employees
and its particular impact on employees over fifty-five were
both apparent on the face of the plan amendment. Indeed,
the theory outlined above was precisely Mitchell’s claim
against Mobil, accepted by the Tenth Circuit. Mitchell
filed a complaint with the EEOC on April 25, 1985, with
no knowledge of Mobil’s alleged concealment of the
waiver provision. Moreover, another employee, Frederic
J. Raymond (Raymond), filed a similar charge with the
Ohio Civil Rights Commission and the EEOC on May
10, 1985. Therefore, unless appellants can show that
Mobil’s alleged concealment adds a material element to
their ADEA claim, the statute of limitations should have
commenced running in July 1984.
Appellants have offered no theory under which the
alleged nondisclosure is a necessary element. They refer
us to the Fourth Circuit case of Stone v. University of
Maryland Medical System Corp., 855 F.2d 167 (4th Cir.
1988), for their argument that “where, as here, the em-
ployee surrenders his job as a proximate result of fraud
and deceit by the employer, the voluntariness of the re-
tirement or resignation is fundamentally vitiated.” Stone
is one of a series of cases where resignations have been
held to be involuntary based on an employer’s misrepre-
sentations about or nondisclosure of an employee’s rights.
Others include Covington v. Department of Heaith and
Human Services, 750 F.2d 937 (Fed.Cir.1984), and
Scharf v. Department of the Air Force, 710 F.2d 1572
(Fed.Cir.1983).
We do not believe that these cases avail appellants,
however. As appellants’ phrasing of their argument re-
flects, the effect of a showing of fraud in these cases is to
render an otherwise voluntary choice involuntary. Stone
48a
and related cases involve disputes in which public em-
ployees were entitled to certain procedural protections if
they were to be terminated involuntarily; they were re-
quired to show that their retirement was involuntary to
invoke the jurisdiction of the Merit Systems Protection
Board or to establish a “deprivation” under the due proc-
ess clause. Here, by contrast, appellants allege a con-
structive discharge arising from the choice to which they
were put by the plan amendment. To further argue that
the actual election made was involuntary because it was
based on incomplete information would be superfluous;
involuntariness is implicit in appellants’ argument that
they were coerced into early retirement by the threatened
removal of the lump sum option. Assuming, arguendo
only, that appellants’ allegation of non-disclosure would
serve to estop Mobil from raising in defense the claim
that appellants’ retirement was voluntary, nevertheless the
asserted nondisclosure does not form a material part of
appellants’ constructive discharge theory that would pre-
vent the statute of limitations from commencing.
Appellants’ arguments that this Court should apply
equitable tolling or equitable estoppel fail for similar rea-
sons. These doctrines provide for tolling of the statute of
limitations when a plaintiff's unawareness of his ability to
bring a claim—either unawareness of the facts necessary
to support a discrimination charge or unawareness of his
legal rights—is due to defendant’s misconduct. See Rhodes
v. Guiberson Oil Tools Division, 927 F.2d 876, 878-79
(5th Cir.), cert. denied, US. , 112 S.Ct. 198,
116 L.Ed.2d 158 (1991); Kale v. Combined Insurance
Co., 861 F.2d 746, 752 (1st Cir.1988). Here, the knowl-
edge allegedly concealed from the employees was that they
had a third option—to continue their employment and
apply for a waiver from the higher lump sum requirement.
Therefore, the facts as known to the employees in 1984
actually gave them a better ADEA claim than they would
have had with full knowledge. Whatever nondisclosures
Mobil-is guilty of would not have lulled appellants into
49a
postponing assertion of their rights; if anything, it would
have made them more likely to assert that they were con-
structively discharged.
Finally, appellants argue that although they knew in
1984 of the plan amendment and retirement window, they
were misled into believing that they had no cause of action
by Mobil’s plausible justifications for its amendment of
the plan, i.e., that the threshold was changed to adjust for
intervening inflation and that the discount rate was raised
to align Mobil’s practice with that of its competitors and
to more realistically reflect current interest rates. In other
words, appellants contend that although the discriminatory
effect of the amendment was apparent in 1984, it was only
upon learning of the concealment of the waiver option
that they had reason to believe the plan amendment was
actuated by age bias and that the alleged concerted scheme
to reduce the work force began to take shape.
We find this argument unpersuasive as well. First, we
fail to see how the deception alleged by appellants calls
into question Mobil’s proffered justifications for the plan
amendment. The evidence does not create a genuine dis-
pute as to the factual accuracy of Mobil’s proffered jus-
tifications. Even if appellants’ allegations are true re-
specting Mobil’s having deceived its employees about the
validity under applicable tax law of the plan amendment
and about the waiver provision, there is no evidence show-
ing that Mobil’s announced reasons for the plan amend-
ment were deceptive. This is an issue on which appellants
would have had the burden at trial, and they were hence
required to meet Mobil’s summary judgment motion with
summary judgment evidence that would sustain a jury
finding in their favor on the issue. See Celotex Corp. v.
Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265
(1986); Blumberg v. HCA Management Co., Inc., 848
F.2d 642, 644 (Sth Cir.1988), cert. denied, 488 U.S.
1007, 109 S.Ct. 789, 102 L.Ed.2d 781 (1989).
In any event, a showing of deception as to motive sup-
ports equitable estoppel only if it conceals the very fact
50a
of discrimination; equitable estoppel is not warranted
where an employee is aware of all of the facts constituting
discriminatory treatment but lacks direct knowledge of
the employer’s subjective discriminatory purpose. Thus,
where an employee was told that he was being discharged
because industry economic downturn required reduction
of the work force, and was told that he would be con-
sidered for re-hiring, we applied equitable estoppel to
hold that limitations on his ADEA claim did not com-
mence until he learned that he had been replaced by a
younger employee. Rhodes, 927 F.2d at 880-82; see also
Coke v. General Adjustment Bureau, Inc., 640 F.2d
584, 595 (5th Cir.1981) (en banc) (employer’s mis-
representation that employee would be reinstated induced
foreseeable forbearance in filing ADEA claim); Meyer v.
Riegel Products Corp., 720 F.2d 303, 307 (3d Cir.1983)
(employer’s explanation to employee that he was dis-
missed as part of a reorganization furnished grounds for
equitable tolling in an ADEA suit until discharged em-
ployee learned that a younger replacement had been
hired), cert. dismissed, 465 U.S. 1091, 104 S.Ct. 2144,
79 L.Ed.2d 910 (1984). By contrast, where an employee
knew that he was discharged and replaced by a younger
employee, his allegation that the company concealed from
him the true reason for his discharge and that it was not
until subsequent hirings that the “pattern of age discrim-
ination” became evidence was held insufficient to support
equitable estoppel. Pruet Production Co., 784 F.2d at
1279-80; accord Chapman v. Homco, Inc., 886 F.2d 756,
758 (5th Cir.1989), cert. denied, 494 U.S. 1067, 110
S.Ct. 1784, 108 L.Ed.2d 785 (1990); Blumberg, 848
F.2d at 645.2 The showing required for a prima facie
employment discrimination claim is minimal, see Pruet
2This view is consistent with this Circuit’s rule in Title VII
cases that the limitations period starts running when the plaintiff
knows of the discriminatory act, not when the plaintiff perceives a
discriminatory motive behind the act. See Merrill v. Southern
Methodist University, 806 F.2d 600, 605 (5th Cir.1986).
=
Sla
Production Co., 784 F.2d at 1279, and when “facts that
would support a cause of action are or should be appar-
ent” the statute commences even if the employee is not
aware of all the evidence that he will ultimately rely upon
at trial. Blumberg, 848 F.2d at 645 (emphasis added).
The showing required at the Stage of filing charges with
the EEOC is even more lenient, because the purpose of
the filing is only to initiate an EEOC investigation. Pruet
Production Co., 784 F.2d at 1279.
Applying those principles here, we conclude that
whatever concealment Mobil may have been guilty of did
not deceive appellants as to the facts of the alleged
discrimination. Rather, appellants were able to evaluate
the propriety of their alleged constructive discharge for
ADEA purposes immediately. Just as in individual dis-
charge cases the prima facie showing is only that the
employee has been discharged and replaced by a younger
worker, leaving exploration of an employer’s motives for
the EEOC investigation or pretrial discovery, here the
appellants’ prima facie case for constructive discharge
was that older employees alone were put to the unfavor-
able choice of early retirement or loss of the lump sum
option. This fact, apparent in July 1984, was sufficient
to put appellants on notice of possible age discrimination
(as it did other Mobil employees) and to require them to
assert their rights.
For these reasons, even accepting for purposes of our
review of the summary judgment appellants’ charges of
nondisclosure, we do not believe that a genuine issue of
material fact exists as to when the statute of limitations
on the ADEA claims commenced. Concluding that the
district court’s grant of summary judgment is supported
on that ground, we do not reach the district court’s fur-
ther holding that as a matter of law appellants were not
constructively discharged in violation of the ADEA.
52a
II. ERISA Preemption of State Law Claims
We next address the district court’s grant of judgment
on the pleadings on appellants’ state law claims. Appel-
lants charged that Mobil’s actions in amending the plan
and withholding information about the waiver provision
fraudulently induced them to surrender their jobs, were
taken pursuant to a plan to reduce Mobil’s work force,
and breached the duty of good faith and fair dealing owed
to appellants by Mobil under their employment contracts.
This conduct, appellants alleged, gave rise to claims for
fraud, civil conspiracy, breach of the employment con-
tract, unlawful interference with contract rights, negli-
gence, and gross negligence. The district court held these
claims were preempted because they “relate to Mobil’s
Retirement Plan, which is governed by ERISA, and
directly overlap with provisions of ERISA.”
We turn to the first ground relied upon by the district
court, namely that appellants’ claims “relate to” an
ERISA-governed retirement plan.
ERISA’s provisions “supersede any and all State laws
insofar as they may now or hereafter relate to any em-
ployee benefit plan.” ERISA §514(a), 29 U.S.C.
§ 1144(a). The Supreme Court has consistently empha-
sized the expansiveness of the “relate to” standard and
its purpose of establishing the regulation of pension plans
as an exclusively federal concern. See, e.g., Ingersoll-Rand
Co. v. McClendon, USS. , 111 S.Ct. 478, 482,
112 L.Ed.2d 474 (1990); FMC Corp. v. Holliday,
US. , 111 S.Ct. 403, 407, 112 L.Ed.2d 356 (1990);
Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 107
§.Ct. 1549, 1552-53, 95 L.Ed.2d 39 (1987); Shaw v.
Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 2899-
2901, 77 L.Ed.2d 490 (1983). The words “relate to”
are to be given their “broad common-sense meaning,”
Metropolitan Life Insurance Co. v. Massachusetts, 471
U.S. 724, 105 S.Ct. 2380, 2389, 85 L.Ed.2d 728 (1985),
and a state law will be pre-empted “if it has a connection
53a
with or reference to such a plan.” Shaw, 103 S.Ct. at
2900. This Circuit has held that the fact that a claim
sought damages measured by pension benefits sufficed as
the requisite “connection” to an employee benefit plan for
preemption purposes. Cefalu v. B.F. Goodrich Co., 871
F.2d 1290, 1294 (Sth Cir.1989). But see Memorial Hos-
pital System v. Northbrook Life Insurance Co., 904 F.2d
236, 247 (5th Cir.1990); Pizlo v. Bethlehem Steel Corp.,
884 F.2d 116, 120-21 (4th Cir.1989).
The complaints here focus on Mobil’s amendment of
an ERISA-governed employee benefit plan and Mobil’s
disclosure to its employees of the terms of the plan. In
addition to calculating their damages by computing lost
benefits under the plan, a court adjudicating appellants’
claims of a fraudulent scheme to reduce the work force
would have to examine, at a minimum, the operation of
the plan prior to the amendment, the language of the plan
amendments, and Mobil’s communication to its employees
about the terms of the plan amendments. Given the
breadth of the section 514(a) test, we find that these con-
nections are adequate to warrant preemption.
This conclusion is buttressed by decisions of this and
other courts addressing claims of fraudulently induced
retirement and wrongful termination, which are the crux
of appellants’ state law claims here. In the closely anal-
ogous case of Lee v. E.I. DuPont de Nemours and Co.,
894 F.2d 755 (5th Cir.1990), the plaintiffs alleged that
they had retired in reliance on their employer’s repre-
sentations that the company was not preparing to adopt
an early retirement incentive plan, and they sued their
former employer for fraud and negligent misrepresenta-
tion in that respect. We held that the claims were pre-
empted under section 514(a). Id. at 758; see also Cefalu,
871 F.2d at 1295 (breach-of-contract claim for oral mis-
representation that retirement options offered equivalent
benefits was preempted); Degan v. Ford Motor Co., 869
F.2d 889, 895 (5th Cir. 1989) (claim for breach of an
54a
oral agreement to pay early retirement benefits was pre-
empted). In a case almost identical to the present one,
the Third Circuit held that where employees alleged that
an employer’s notification of proposed plan amendments
misrepresented to them that they would lose a retirement
benefit if they did not retire in a window period before
the amendments became applicable, their claims were
preempted. Berger v. Edgewater Steel Co., 911 F.2d
911, 923 (3d Cir.1990), cert. denied, US. ——,
111 S.Ct. 1310, 113 L.Ed.2d 244 (1991).
In addition, the Supreme Court recently spoke de-
cisively to the question whether a tort claim premised
on wrongful discharge to prevent vesting of pension ben-
efits could survive independently of ERISA. In Ingersoll-
Rand Co. v. McClendon, USS. , 111 S.Ct. 478,
483, 112 L.Ed.2d 474 (1990), the Court found that the
claim “related to” an ERISA-covered plan under section
514(a). Appellants here seek to distinguish their “wrong-
ful discharge by fraud” claim from the tort claim at issue
in McClendon. They argue that whereas the existence of
a pension plan is a necessary element of the cause of
action considered in McClendon (discharge to prevent
vesting of pension benefits), here the pension plan was
merely the subject of Mobil’s fraud. The fraud claim
itself, they argue, is conceptually identical to a fraud
claim concerning any other subject matter, and ERISA
cannot generally preempt state laws prohibiting employers
from fraudulently inducing employees to give up their
jobs. Appellants rely on Mackey v. Lanier Collections
Agency and Service, 486 U.S. 825, 108 S.Ct. 2182, 100
L.Ed.2d 836 (1988), in which the Court noted that law-
suits based on “run-of-the-mill state-law claims such as
unpaid rent, failure to pay creditors, or even torts com-
mitted by an ERISA plan” are not preempted merely
because the suits are brought against an ERISA plan. /d.
108 S.Ct. at 2187.
We do not find this argument persuasive. We have
previously noted that preempted state law includes an)
55a
State law cause of action as it relates to an employee
benefit plan, even if it arises under a general law which
in and of itself has no connection to employee benefit
plans. Cefalu, 871 F.2d at 1292 n.5. Although there
would undoubtedly be cases of fraudulently induced re-
tirement that were not preempted, the specific conduct
here, as in Lee, Cefalu, and Degan, relates directly to the
operation of an ERISA plan. Superimposing state law
fraud standards on the elaborate ERISA provisions gov-
erning the content and timing of notice of plan provisions
and amendments, see ERISA §§ 102, 104(b)(1), 29
U.S.C. §§ 1022, 1024(b), would undercut the goal of
uniform national regulation in the manner that section
514(a) seeks to prevent. See Memorial Hospital System,
904 F.2d at 245 (observing that preemption is proper
where the state law claims address areas of exclusive
federal concern, and where they directly affect the rela-
tionship among the traditional ERISA entities). In our
view, this makes the conduct at issue here a far cry from
the “run-of-the-mill” claims alluded to in Mackey.*
For the same reason, appellants’ reliance on Hartle v.
Packard Electric, 877 F.2d 354 (Sth Cir.1989) (per
curiam) is misplaced. In Hartle, a discharged employee
brought suit for wrongful termination and civil con-
spiracy to unlawfully terminate his employment. Because
the general rule in Mississippi was employment at will, he
argued that his participation in an employee benefit plan
had removed his employment from employment-at-will
3 Appellants also cite Greenblatt v. Budd Co., 666 F.Supp. 735
(E.D.Pa.1987), which does provide more direct support for their
argument than the fact that the subject of the alleged fraud is
pension benefits is incidental and does not warrant preemption.
See id. at 742. However, we agree with the Seventh Circuit that
Greenblatt is not consistent with our Circuit’s holding in Cefalu.
See Lister v. Stark, 890 F.2d 941, 945 n. 10 (7th Cir.1989), cert.
denied, —— U.S. ——, 111 S.Ct. 579, 112 L.Ed.2d 584 (1990).
Therefore, we, like the Seventh Circuit, decline to follow Greenblatt.
See id. at 945.
56a
status and had effectively given him a tenured position.
However, because the employer’s complained-of-conduct
did not pertain to the operation of an ERISA plan, we
observed that Hartle’s claim did “not in any manner im-
plicate the federal regulation of employee benefit plans”
and held that preemption was not proper. Id. at 356.
Here, the employer’s conduct does relate to the pension
plan, and federal regulation of retirement plans is impli-
cated to a much greater degree.
Finally, appellants argue that even if their state law
claims are preempted to the extent that the damages
sought are deemed to be “benefits,” the preemption would
not bar the claims in their entirety, and that the claims for
lost wages, exemplary damages, and the like, would sur-
vive as state law claims. They rely on several cases find-
ing partial preemption only. One is Krause v. Dresser
Industries, Inc., 910 F.2d 674 (10th Cir.1990), in which
a terminated employee filed claims under the ADEA and
for breach of an implied contract for tenured job security.
The district court entered summary judgment for the
defendant on the breach-of-contract claim insofar as it
sought lost pension, health insurance, or life insurance
benefits, on the grounds of ERISA preemption. The.
Tenth Circuit upheld a verdict for the plaintiff on the
claim for lost salary, however, stating, “We are at a loss
to see how a breach of contract claim solely for lost
salary is at all related to an employee benefit plan,” and
holding that there was no preemption of that claim. /d.
at 680 (citing Hartle, supra). Likewise, in Sorasky v.
Burroughs Corp., 826 F.2d 794 (9th Cir.1987), the
Ninth Circuit held that an employee’s claim of breach of
contract and wrongful discharge in part relied on theories
independent of the benefit plan and thus was not entirely
preempted. Jd. at 800. Finally, appellants cite Clark v.
Coats & Clark, Inc., 865 F.2d 1237, 1245 (11th Cir.
1989), for the proposition that the same set of operative
facts can give rise to both preempted and unpreempted
causes of action.
57a
We conclude that this type of partial preemption is
inappropriate in the present case, however. Unlike Krause,
this case is not one where the main nexus to an employee
benefit plan is only the calculation of damages. Once
stripped of its link to the pension plan provided by the
measure of damages, the Krause plaintiff’s claim survived
as a suit for lost salary based upon breach of an implied
contract of continued employment. Here, by contrast, the
basis of the claims themselves is the operation of the pen-
sion plan; if appellants’ claims were stripped of their link
to the pension plans, they would cease to exist. The
Sorosky and Clark courts employed a similar analysis
which would support complete preemption in the present
case. In Sorosky, the court held that Sorosky’s claim that
Burroughs agreed to provide him with monthly retire-
ment benefits and then sought to prevent him from ac-
- quiring those benefits was preempted; it was only breach-
of-contract or wrongful discharge theories “that have no
relationship to the benefit plan” that survived as indepen-
dent state law claims. Sorosky, 826 F.2d at 800. The
Clark court confronted an employee’s claim that his termi-
nation, in addition to being effected for the purpose of
interfering with his attainment of pension benefits in vio-
lation of ERISA § 510, 29 U.S.C. § 1140, was carried
out in a malicious manner that inflicted severe emotional
distress upon him. The court held that the tort claim,
though it “allude[d] to conduct which was proximate (or
even concurrent) in time to the alleged ERISA violation,”
was “wholly remote in content”; the employee had “not
alleged any conduct on the part of Coats & Clark which
relates to the processing of any ERISA covered benefit or
claim.” Clark, 865 F.2d at 1243. However, Clark care-
fully distinguished the employee’s claim there from a
claim that a refusal to pay pension benefits was itself so
outrageous as to amount to intentional infliction of emo-
tional distress, which the court had found *> be preempted
in Howard v. Parisian, Inc., 807 F.2d 1560 (11th Cir.
1987).
58a
Because the underlying conduct at issue here cannot be
divorced from its connection to the employee benefit plan,
we uphold the district court’s judgment that the state law
claims are preempted in their entirevy.
Ill. ERISA Standing
ERISA grants standing to a “participant” to bring a
civil action to enforce his rights under the terms of a plan
or to enforce the provisions of ERISA. ERISA § 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 mean-
ing 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. 3 (Sth Cir.1980).
ERISA defines the term “participant” to include “any
employee or former employee . . . who is or may become
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 Fire-
stone 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 colorable claim’ to vested
benefits.” Id. 109 S.Ct. at 958 (quoting Kuntz v. Reese,
785 F.2d 1410, 1411 (9th Cir.) (per curiam), cert. de-
nied, 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 claim-
ant must have a colorable claim that (1) he or she will
prevail in a suit for benefits, or that (2) eligibility require-
ments will be fulfilled in the future.” /d.
Mobil argues that appellants do not have standing be-
cause they have neither a colorable claim for vested bene-
fits nor a reasonable expectation of returning to covered
59a
employment. In Mitchell’s suit against Mobil, the Tenth
Circuit denied ERISA standing to the plaintiffs on the
ground here urged by Mobil. Mitchell v. Mobil Oil Corp.,
896 F.2d 463, 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 (Sth Cir.1985)
(per curiam); Joseph v. New Orleans Electrical Pension
& Retirement Plan, 754 F.2d 628, 630 (Sth 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 benefits,
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, lack-
ing a claim for vested benefits, he could not be deemed a
plan “participant.” Yancy, 768 F.2d at 709.
For the second part of its conclusion—that the plaintiff
lacked a reasonable expectation of returning to covered
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., 911
F.2d 911, 922 (3d Cir.1990), cert. denied, USS.
——, 111 S.Ct. 1310, 113 L.Ed.2d 244 (1991); Kuntz,
785 F.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
60a
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 formula
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 interfering with the attain-
ment” of a right provided by ERISA. The Supreme
Court’s recent McClendon decision held that this provision
would foreclose the development of any state law cause
of action for wrongful termination to prevent vesting of
pension benefits. Jngersoll-Rand Co. v. McClendon,
US. , 111 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
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