Opposition Brief — Houdek v. Mobil Oil Corp.

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IN THE

Supreme Court of the nied States

OCTUBER TERM, 1994

HAROLD A. HOUDEK, ef al., Petitioners,

MOBIL OIL CORPORATION, Respondent.

On Petition for a Writ of Certiorari to the

Colorado Court ot Appeals

RESPONDENT'S BRIEF IN OPPOSITION

MICHAEL E. TIGAR

(Counsel of Record)

727 E. 26th Street

Austin, Texas 78705-3299

(512) 471-6319

HAROLD A. HADDON

RACHEL A. BELLIS

HADDON, MORGAN & FOREMAN, PC.

150 E. Tenth Avenue

Denver. Colorado 80203

(303) 831-7364

BRUCE E. YANNETT

DEBEVOISE & PLIMPTON

875 Third Avenue

New York, New York 10022

(212) 909-6000

Counsel for Respondent

January 13, 1995

COUNTERSTATEMENT OF QUESTIONS

PRESENTED

l. Whether the Petition for Certiorari is

jurisdictionally out of time because it was not

filed within 90 days of the Colorado Supreme

Court's denial of Certiorari, the final and last

available remedy under Colorado's rules and

procedures?

A If not, whether the Colorado Court of Appeals

correctly held that Petitioners’ claims against

their former employer are pre-empted by

ERISA because, on its face, Petitioners’

complaint seeks to recover (a) for their

employer's alleged failure to make additional

disclosures about its pension plan beyond those

required by ERISA, (b) for their employer's

alleged failure to comply with ERISA and (c)

their lost pension benefits and other damages

flowing from these alleged failures?

PARTIES TO THIS PROCEEDING

Petitioners are as listed in the Petition for Certiorari ["Pet."},

at il.

Respondent is Mobil Oil Corporation ["Mobil"]. Mobil states

pursuant to S. Ct. R. 29.1, that it has interests in the

following publicly traded subsidiaries:

Mobil Oil Ghana Limited

Mobil Oil Nigeria Public Limited Company

The Retirement Plan of Mobil Oil Corporation, itself and by

the Trustees thereof [the "Plan"], was a defendant below.

The claims against it were dismissed by the trial court, and

that dismissal was affirmed by the Colorado Court of Appeals

in the opinion of which Petitioners seek review. Petitioners

have neither named the Plan in this Court, listed the Plan as

required by S. Ct. R. 14.1(b), nor filed and served the

statement required by S. Ct. R. 12.4. This omission is

discussed below.

iil

TABLE OF CONTENTS

COUNTERSTATEMENT OF

QUESTIONS PRESENTED ............ i

PARTIES TO THIS PROCEEDING ........... li

STATEMENT OF THE CASE ............... 2

REASONS THE PETITION SHOULD BE

DISMISSED OR DENIED ............. 6

i. The Petition is untimely ............... 6

2. Petitioners have pleaded a case that

"relate[s} to," and challenges’ the

administration of, the Mobil Plan in dozens

of ways. The Colorado Court of Appeals

correctly applied ERISA pre-emption law to

these allegations, in a manner consistent

with the law of every federal circuit ....... 9

a. Petitioners' complaint ....... 9

b. The Colorado Court of

Appeals correctly applied

ERISA pre-emption law to

these allegations, in a manner

consistent with the law of

every federal circuit ....... 12

e. Plaintiffs have not identified

any significant issue

warranting certiorari....... 17

a The Colorado Court of Appeals neither

created a "safe harbor" for employer fraud

nor federalized employment law; to the

contrary, its decision respects and is

independently justified by Colorado's

employment-at-will doctrine ........... 19

CTE ka 4 5 ks eee eee) 21

APPENDIX

Complaint, Houdek et al. v. Mobil Oil

Corporation, the Retirement Plan of Mobil Oil

Corporation, et al., Denver District Court

Rn Ss Gee Pe a cae so eee os Al

TABLE OF AUTHORITIES

Cases

Berger v. Edgewater Steel Co..,

911 F.2d 911 (3d Cir. 1990),

cert. denied, 499 U.S. 920 (1991) ........ 15, 20, 21

Christopher v. Mobil Oil Corp..,

950 F.2d 1209 (Sth Cir.),

cert. denied, 113 S. Ct. 68 (1992) .... 4, 11, 13-15, 19

Colorado Ass'n of Public Emp. v. Department of Highways,

oe ae fe | re er ee ae 8

Continental Airlines v. Keenan,

pRB & F&O >) err 20

Cromwell vy. Equicor-Equitable HCA Corp..,

944 F.2d 1272 (6th Cir. 1991),

cert. Gisméssed, 1133. Ct. Z (ISSZ) . ww cc ee ee 20

Cutler v. Phillips Petroleum Co..,

859 P.2d 1251 (Wash. App. 1993),

rev'd, 881 P.2d 216 (Wash. 1994) ............ 16

Fladung v. City of Boulder,

165 Colo. 244, 438 P.2d 688 (1968) ........... 11

Franchise Tax Bd. v. Construction Laborers

Vacation Trust for S. Cal.,

rca a a a os oe Ge ee oo ES 13

Harris v. Provident Life & Acc. Ins. Co.,

pw a a eee ee 17

HealthAmerica v. Menton,

551 So.2d 235 (Ala. 1989),

ceit. denied, 493 U.S. 1093 (1990) ............ 17

Hermann Hospital v. MEBA Medical & Benefits Plan,

gg Be Ee | ee a rare 20

Houdek v. Mobil Oil Corp.,

879 P.2d 417 (Colo. App. 1994), cert. denied, (Colo.,

I s'o a 5G wi ee oo ewe we 8 7, 11-16

Howard v. Gleason Corp.,

ee Bo ge oe A) a re 15

Hunter v. Up-Right, Inc..,

8 we eee ee eee 21

Ingersoll-Rand v. McClendon,

498 U.S. 133 (1990) ...... 11, 13-15, 17, 18, 20, 21

Kelso v. Gen. Am. Life Ins. Co..,

Sr Fae Fee Ce CM. PPPS) 2 we ce cece 13

Vil

Lee v. E.I. DuPont,

894 F.2d 755 (Sth Cir. 1990) ............. 15, 16

Levine v. Empire Sav. & Loan, Ass'n,

579 P.2d 642 (Colo. App. 1977), aff'd, 197 Colo.

re & oe Ts, ee 11

Madonia v. Blue Cross & Blue Shield of Virginia,

11 F.3d 444 (4th Cir. 1993), cert. denied,

oR We Be 8 er ree 17

Massachusetts Mutual Life Ins. Co. v. Russell,

ip © Sf Ee ee rr 20

Metropolitan Life Ins. Co. v. Taylor,

ee a oes be oe + eR ses 20

Missouri v. Jenkins,

eo es Bie 6 bs 8 ees 7, 8

Mitchell v. Mobil Oil Corp.,

896 F.2d 463 (10th Cir.),

cert. denied, 498 U.S. 898 (1990) ............ 3, 19

Monarch Cement Co. v. Lone Star Indus. ,

982 F.2d 1448 (10th Cir. 1992) .............. 13

Morales v. Trans World Airlines, Inc.,

fog Boh of re eee 13

Vili

National Elevator Industry, Inc. v. Calhoon,

957 F.2d 1555 (10th Cir. 1991),

cert. denied, 113 S. Ct. 406 (1992) ........... 9, 15

Pace v. Signal Technology Corp.,

628 N.E.2d 20 (Mass. 1994) ................ 17

Phillips v. Amoco Oil Co.,

799 F.2d 1464 (11th Cir, 1986) .............. 15

Pilot Life Ins. Co. v. Dedeaux,

Sk ee re 13, 20

Raymond v. Mobil Oil Corp..,

7 F.3d 184 (10th Cir. 1993), cert. denied sub nom.

Morrison v. Mobil Oil Corp., 114 S. Ct. 1070 (1994) . 4

Raymond v. Mobil Oil Corp.,

983 F.2d 1528 (10th Cir.), cert. denied, 114 S. Ct. 81

(1993), leave to file petition for rehearing denied,

L5G D. Gs Cat CH 6 on so eee 4, 16, 19, 20

Robinson v. Fikes of Alabama, Inc.,

804 F. Supp. 277 (M.D. Ala. 1992) ........... 17

Sanson v. General Motors Corp..,

966 F.2d 618 (11th Cir. 1992),

curt. Gameed, 119 S. CA. SFB CIS) «cbc ec wes 15, 20

Settles v. Golden Rule Insurance Co.,

S27 F260 SUS (1G Cie. TSS) ow cc cw cc cen 13

Shaw v. Delta Air Lines, Inc.,

ae 13, 14

Travelers Ins. Co. v. Cuomo,

14 F.3d 708 (2d Cir. 1993), cert. granted sub nom.

New York State Conference of Blue Cross & Blue

Shield Plans v. Travelers Ins. Co.,

OR Se we 8 re 18

Tri-State Generation & Transmission Co. v. City of Thornton,

ee Cg eR + a 12

Statutes, Rules and Regulations

a ae CN he v5 9s a eR Ree 6

St ae ee 6 a enon baw ee 4

Ems, Se ae U.o.U. TOU), O. SOR... cc ces l

BeisA § Hs), 22 U.3.C. GGG) 26 ccc cee 2

ERISA § 3(5), 29 U.S.C. § 1002(5) ............. 2

nA © Ply AP Ue: § EE cc ce eens 14

ERIaA. © 108, 29 U.S.C. § 1086 nce cen 14

ERISA § 204(g), 29 U.S.C. § 1104(g) ........... 3

ERISA § 502(a)(5), 29 U.S.C. § 1132(a)(5) ....... 19

ERISA § 514(a), 29 U.S.C. § 1144(a) ... 1, 12, 13, 15

ERISA § 514(d), 29 U.S.C. § 1144(d) .......... 19

Retirement Equity Act, Pub. L. 98-397,

title III, 301(a)(1), 98 Stat. 1450 ............... 5

Federal Rule of Civil Procedure 19............. 12

pete A ee 2 er ere re err 14

Fee | rr 14

poe Oe ee ee eer a ear 14

supreme Cowt Rule 13.1... wc ces eceeas 6

eg err eee 8

wanmmomie Comet Hate 29.1 oo cc eee ees ii

Colorado Appeliate RuleZ .. ww. cc ee 7,8

Colorado Appellate Rule 40 .................. 7

Colorado Appellate Rule 54(b) ................ 7

Colorado Rule of Civil Procedure 19 ........... 12

No. 94-1049

IN THE

Supreme Court of the Huited States

OCTOBER TERM, 1994

HAROLD A. HOUDEK, et al., Petitioners,

MOBIL OIL CORPORATION, Respondent.

RESPONDENT'S BRIEF IN OPPOSITION

Respondent Mobil Oil Corporation |"Mobil"], a

defendant below, respectfully requests that the Petition for

Certiorari be dismissed as untimely, or, in the alternative, that

it be denied.

We demonstrate below that the Petition is

jurisdictionally untimely. We also show that Petitioners’

prolix complaint alleges in essence that they were driven to

retire because their employer, Mobil, amended Mobil's

pension Plan [the "Plan"] in violation of the Employment

Retirement Income Security Act ["ERISA"], 29 U.S.C. §§

1001, et. seq., and without making disciosures that Petitioners

claim state law should add to the disclosure requirements

mandated by ERISA. Such claims "relate to" an ERISA

Plan, ERISA § 514(a), 29 U.S.C. § 1144(a), and are

therefore pre-empted. The Colorado Court of Appeals’

decision is consistent with that of every federal court of

appeals that has considered whether there is pre-emption of a

state law claim alleging that an employee retired based on a

misrepresentation concerning pension rights and benefits.

There is no occasion for review in this Court.

STATEMENT OF THE CASE

The case involves Mobil's pension plan, which is

covered by ERISA. The Plan is administered by Mobil

through trustees who are the Plan fiduciaries, and it covers

some 50,000 current and former employees who reside

throughout the United States and in several foreign countries.

The Plan is a separate legal entity under ERISA.' It is an

employer-contribution fixed-benefit plan; that is, it is

actuarially designed by Mobil so that employees will receive

on their retirement a sum of money that is guaranteed to them

under the Plan's terms.

The normal form of benefit under the Plan has always

been a lifetime annuity. Beginning in 1977, however, Mobil,

like several other major corporations, provided an optional

form of benefit to retiring employees. If the value of an

employee's total accrued pension was at least $250,000, or if

the employee had a net worth of at least $250,000, he or she

could receive retirement benefits in a single lump sum. This

"threshold" was also a device commonly used to ensure that

employees had the financial strength to survive adverse

| Compare ERISA § 3(3), 29 U.S.C. § 1002(3) (defining “plan” and

“employee benefit plan” for purposes of ERISA) with ERISA § 3(5), 29

U.S.C. § 1002(5) (defining “employer”).

Siatnlee, chabetiers.

eau) Aaah Owe

investment experience.

Between 1977 and 1984, inflation eroded the value of

$250,000. Mobil amended the Plan to raise the threshold to

$450,000 and thereafter to index it to the cost of living.

Other Plan changes also made the annuity option more

attractive. Mobil announced these changes in July 1984, but

permitted employees who had reached the $250,000 accrued

benefit or net worth thresholds to take the lump sum,

provided that (a) they were already retirement-eligible in

terms of age and years of service, (b) they retired on or

before January 1, 1985 [the "window period"], and (c) they

certified that they had obtained independent professional

advice about the consequences of taking a lump sum

distribution. .

Petitioners are former Mobil employees who met the

accrued pension value or net worth standards (principally the

former), and who retired on or before January 1, 1985 and

received all their benefits in a single lump sum.

Petitioners and their counsel have conducted litigation

centering on these basic transactions in several forums and

under several theories. These cases have produced tens of

thousands of pages of discovery from Mobil and the Plan,

dozens of depositions, countless trial court appearances, one

full merits trial, four United States Court of Appeals

arguments, a state appellate court argument, and several

certiorari petitions. The relevant highlights of Petitioners’

"day[s] in court”, compare Pet., at 8, are:

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

Cir.), cert. denied, 498 U.S. 898 (1990), the Tenth

Circuit held in a case involving just one plaintiff that

Mobil did not violate the Age Discrimination in

Employment Act ["ADEA"], 29 U.S.C. §§ 621-634,

and that the plaintiff lacked ERISA standing. The

District Court had found Mitchell's state law claims

were pre-empted by ERISA, and that ruling was not

appealed.

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

(Sth Cir.), cert. denied, 113 S. Ct. 68 (1992)

(Petitioners' Appendix ["Pet. App."] at 40a), the Fifth

Circuit dealt with the claims of three "window period"

retirees, holding their ADEA claims time-barred and

their state law claims pre-empted by ERISA, and

remanding with leave to replead their ERISA claims.

In Raymond v. Mobil Oil Corp., 983 F.2d 1528 (10th

Cir.), cert. denied, 114 S. Ct. 81 (1993), leave to file

petition for rehearing denied, 114 S. Ct. 1391 (1994)

(Pet. App. at 17a), the Tenth Circuit held in a class

action suit in which Petitioners here were plaintiffs,

that since plaintiffs voluntarily took all their benefits

out of the Plan, did not quarrel that the computation

of amounts was correct, and had no meaningful

expectation of returning to covered employment, they

had no standing to sue under ERISA. The Court

therefore directed summary judgment for Mobil on the

ERISA claims.

In Raymond v. Mobil Oil Corp., 7 F.3d 184 (10th

Cir. 1993), cert. denied sub nom. Morrison v. Mobil

Oil Corp., 114 S. Ct. 1070 (1994), the Tenth Circuit

eet DN COLNE IE 7 Raa

held that plaintiffs' ADEA claims had not been timely

filed. It therefore directed summary judgment for

Mobil on these claims, holding that plaintiffs’

counsel's efforts to keep the claims alive were no

more than “artful pleading." 7 F.3d at 186.

This Colorado state court case rests on a 117-

paragraph complaint, which shows on its face that the

Colorado Court of Appeals was right to find Petitioners’

claims pre-empted.” We have included the complaint as an

Appendix, because there is a gap between the case Petitioners

Say exists and that framed by the allegations they filed.

Petitioners complaint alleges that Mobil failed to

disclose that the Plan amendment changing the lump-sum

eligibility requirement was invalid because (1) it violated

ERISA § 204(g), 29 U.S.C. § 1104(g), as interpreted by the

Internal Revenue Service and as amended by the 1984

Retirement Equity Act ["REA"} and (2) would "be viewed as

an ‘impermissible preference’ under Title | of ERISA"

[complaint {4 21-29, 32-33, 38, 47-49, 52, 67]. Petitioners

also allege that Mobil failed to make timely disclosure of an

additional amendment to the Plan allowing for discretionary

waivers of the lump-sum eligibility requirements or to

disclose discussions with the Internal Revenue Service

concerning that amendment [id. {4 57, 60-65, 68, 75, 89-91].

2 This case comes up on dismissal of the complaint as pre-empted.

Therefore, the well-pleaded facts provide the “factual” record.

> Pub. L. 98-397, title I, 301(a)(1), 98 Stat. 1450. The effective

date of REA was after Mobil announced the amendment changing the

lump-sum eligibility requirement (complaint, { 67].

The complaint, thus, is premised on two core theories:

2 first, that Mobil's pension plan was amended in

violation of ERISA and a 1984 ERISA amendment,

REA, which Petitioners claim should be interpreted to

void "cutbacks" in this plan;

* second, that although Mobil complied with ERISA

disclosure requirements in amending its Plan and

announcing those amendments, Colorado common law

should require additional and earlier disclosures.

The first theory cloaks an alleged ERISA violation as

a State law tort action. The second theory invites a Colorado

state court to impose pension plan disclosure obligations that

are not required by the complex and detailed federal ERISA

Statutes and regulations. Both theories "relate to” an ERISA-

governed plan and are therefore pre-empted.*

REASONS THE PETITION SHOULD BE

DISMISSED OR DENIED

1. The Petition is untimely.

28 U.S.C. § 2101(c) requires that a petition for

certiorari to review a civil case judgment be filed "within

ninety days after the entry of such judgment or decree."

Supreme Court Rule 13.1, governing review of the judgment

* Even the definition of the putative class is in terms of Mobil

employment, Plan participant status, and entitlement to Plan benefits [id. $9].

RE LEAN OEE NDB AOTE DAES Rll ca EMC

of a lower state court, applies this statute. The ninety day

limit is "mandatory and jurisdictional." Missouri v. Jenkins,

495 U.S. 33, 45 (1990).

The Colorado Court of Appeals entered its judgment

January 13, 1994. Petitioners’ rehearing petition in that

court, filed pursuant to Colorado Appellate Rule ["CAR"] 40,

was denied. Petitioners then sought discretionary review in

the Colorado Supreme Court, which denied the writ of

certiorari on August 29, 1994. Houdek v. Mobil Oil Corp.,

879 P.2d 417 (Colo. App. 1994), cert. denied (August 29,

1994) (Pet. App. at la). Ninety days from August 29, 1994

-ran out on November 29, 1994. The present Petition was

filed December 13, 1994.

Petitioners premise their claim of timeliness, and

jurisdiction, on their "timely" filing of a petition for rehearing

from the Colorado Supreme Court's denial of certiorari.

Pet., at 2. However, contrary to Petitioners’ assertion, the

Colorado Appellate Rules do not permit the filing of petitions

for rehearing from denial of certiorari. Neither CAR 54(b),

on which Petitioners rely, nor any other statute or rule of

Colorado appellate procedure, authorizes the Colorado

Supreme Court to rehear its denial of a petition for

discretionary review. CAR 54(b) authorizes rehearing only

in cases where certiorari has been granted.* CAR 2 permits

the court to suspend procedural prerequisites in a particular

case where it has jurisdiction, but it does not allow the court

The only provision for rehearing in the Colorado Supreme Court

reads: "If, after granting the writ, the court later denies the same as having

been improvidently granted or renders decision by opinion of the court on the

merits of the writ, petition for rehearing may be filed in accordance with the

provisions of CAR 40." CAR 54(b) (emphasis added).

to expand its jurisdiction where, as here, none otherwise

exists under Colorado statutes and rules.° The court could

not, and did not, suspend its rules in this case.

Petitioners’ statement that the Colorado Supreme

Court "allowed" their unauthorized petition, and their

quotation of boilerplate language in the order denying their

pleading, is of no significance to their jurisdictional analysis.

Filing an unauthorized pleading does not toll the time for

petitioning for certiorari in this Court,’ and the Colorado

courts are powerless to invent a means for conferring

jurisdiction when Congress and this Court's rules deny it.*

Because Colorado does not permit filing petitions for

rehearing of certiorari denials, such a filing could never be

"timely" under S. Ct. Rule 13.4. This Petition is not timely

and must be dismissed.

6 See, e.g., Colorado Ass'n of Public Emp. v. Department Of

Highways, 809 P.2d 988, 990 n.1 (Colo. 1991) (Colorado Supreme Court

Can suspend procedural rules under CAR 2 only where case is otherwise

“within [its] jurisdiction”).

7 Petitioners’ unauthorized rehearing petition is charged with

invective and concludes with this concession: "If the Court of Appeals saw

no injustice in denying petitioners their day in court, the injustice should not

be compounded by leaving them merely with an intermediate appellate

opinion whose lack of express holdings will most likely not interest the

supervisory powers of the United States Supreme Court." Petition for

Rehearing, at 5.

8 See Missouri v. Jenkins, 495 U.S. at 49 ("the time for applying for

certiorari will not be tolled when it appears that.the lower court granted

rehearing or amended its order solely for the purpose of extending that

time”).

ye Petitioners have pleaded a case that "relate[s] to,"

and challenges the administration of, the Mobil

Plan in dozens of ways. The Colorado Court of

Appeals correctly applied ERISA pre-emption law

to these allegations, in a manner consistent with the

law of every federal circuit.

a. Petitioners’ complaint.

The complaint named Mobil and the Retirement Plan

of Mobil Oil Corporation, “itself and by the Trustees

thereof.” The employer, the Plan and the Plan fiduciaries, as

well as the Plan participants and beneficiaries, are the basic

ERISA entities for which ERISA creates a detailed and

interrelated set of duties.’

The complaint presents six claims, all variations on a

single theme. The first and second are for "common law

fraud." The third and fourth are for “negligent

misrepresentation.” The fifth claim alleges a "civil

conspiracy." The sixth claim is for "interference with

contractual rights." In { 14, Petitioners allege that Mobil

planned to rid itself of senior employees and save $75 million

per year, and in { 15, that Mobil chose "its retirement plan as

the vehicle for ridding itself of such employees."

Petitioners go on to allege that in order to achieve

these goals, Mobil and the Plan

* prevented them from obtaining a waiver of the

See, e.g., National Elevator Industry, Inc. v. Calhoon, 957 F.2d

1555 (10th Cir.), cert. denied, 113 S. Ct. 406 (1992).

threshold for receiving their pension benefits as a

lump sum [complaint {{ 57, 60, 61, 81, 89],

e cut back on their ERISA Plan rights in violation of the

1984 ERISA amendments contained in REA [id. 44

67, 81, 91],

e failed to make disclosures about Plan amendments and

Plan status [id. 4 52, 60, 61, 64, 81, 89, 91, 97],

and by these actions

» proximately caused Petitioners to retire from Mobil by

January 1, 1985 in order to be assured of getting their

pension benefits in the sizable lump sum they all admit

receiving, and therefore wrongfully discharged them.

This characterization of Petitioners’ case is true of all six

claims pleaded in their complaint; all their claims "relate to"

the Plan in every one of these ways.

Petitioners are wrong in saying that their wrongful

discharge claims "would not implicate any conduct of the

Plan” and that "there is no allegation in the complaint that

Mobil had a pension-defeating or retaliatory motive for its

conduct." Pet., at 6. Indeed, the complaint alleges that

"[t]he Plan, acting through its trustees, fiduciaries and agents,

aided, abetted and ratified Mobil's misconduct as alleged

herein and conspired with Mobil and others to violate

plaintiff's [sic] rights, as alleged herein" [complaint { 73].

Furthermore, as the Court of Appeals recognized, Petitioners

themselves allege that Mobil was acting in its capacity as

set ie

fiduciary and Plan administrator [id. | 4]."° The "rights"

purportedly violated by Mobil and the Plan were rights to

receive a lump-sum pension under the Plan.

Petitioners’ argument against pre-emption stands or

falls on the allegations of their complaint and not those

suggested by their petition. Ingersoll-Rand v. McClendon,

498 U.S. 133 (1990) rules this case and mandates pre-

emption, for "[h]Jere, the existence of a pension plan is a

critical factor in establishing liability under the State's

wrongful discharge law. As a result, this cause of action

relates not merely to pension benefits, but to the essence of

the plan itself."'' Indeed, as Christopher held, "the basis of

the claims themselves is the operation of the pension plan; if

appellants’ claims were stripped of their link to the pension

plans, they would cease to exist."!”

As a matter of Colorado procedural law, Petitioners

are barred from recasting their case at this late hour.’ They

did not seek leave to amend their complaint in the trial court,

either before or after the order of dismissal. They elected

10 Houdek, 879 P.2d at 423 (Pet. App. at 10-1 1a).

11 498 U.S. at 139-140 (emphasis added).

12 950 F.2d at 1220 (Pet. App. at 57a), quoted with approval in

Houdek, 879 P.2d at 423 (Pet. App. at 9a).

13 See Fladung v. City of Boulder, 165 Colo. 244, 438 P.2d 688,

690 (1968) (precluding plaintiff who fails to seek timely amendment of

complaint in trial court from asserting right to amend on appeal); Levine

v. Empire Sav. & Loan Ass'n, 579 P.2d 642, 646 (Colo. App. 1977),

aff'd, 197 Colo. 293, 592 P.2d 410 (1979) (citing Fladung to reject claim

that complaint was dismissed prematurely).

instead to stand on these clearly pre-empted allegations and

take an appeal. Colorado law limits them to the case made by

their complaint, not the imaginary case conjured by their

presentation of alleged issues in this Court. '*

b. The Colorado Court of Appeals correctly

applied ERISA pre-emption law to these

allegations, in a manner consistent with the

law of every federal circuit.

The Colorado Court of Appeals’ opinion is well-

reasoned, pays careful attention to the prolix and detailed

allegations of the complaint,’* and thoroughly canvasses the

relevant law.

ERISA § 514(a), 29 U.S.C. § 1144(a), provides that

the statute "supersede[s] any and all State laws insofar as they

may now or hereafter relate to any employee benefit

plan... ." This Court has held that this "virtually unique

'4 Petitioners’ failure to make the Plan a party in this Court is curious

and probably fatal to their claims. Their complaint seeks relief against the

Plan, and the Plan's conduct is at the heart of their case. Under C.R.C.P.

19, the Colorado equivalent of Fed. R. Civ. P. 19, the Plan would be an

indispensable party. See Tri-State Generation & Transmission Co. v. City

of Thornton, 647 P.2d 670 (Colo. 1982). Because they do not challenge the

portion of the judgment below dismissing the Plan, the relief they seek

against Mobil is purely advisory. That is, if their claims against the Plan in

the portions of the complaint that they do not challenge are pre-empted, all

of their claims are pre-empted.

"[TJhe complaint . . . is comprised of twenty-two pages replete with

references to ERISA regulations and allegations regarding the administration

of the retirement plan... ." Houdek, 879 P.2d at 419 (Pet. App. at 2a).

od ide aon

an hate,

stata oti aida oe. PMV it RC

pre-emption provision,"’® is "'conspicuous for its breadth'"

and was "designed to ‘establish pension plan regulation as

exclusively a federal concern.'"'’ "The key to § 514(a) is

found in the words 'relate to'" and those words must be given

their "'broad common-sense meaning.'"'* Under the "relate

to" test, "[p]re-emption applies to common law contract and

tort claims if the factual basis of the cause of action involves

an employee benefit plan."'®

The Colorado Court of Appeals, applying this test,

carefully reviewed the factual allegations of Petitioners’

complaint and agreed with the Fifth Circuit in Christopher

that Petitioners claims are pre-empted because "the existence

and administration of the retirement plan . . . form[] the core

of [Petitioners'] claims for relief."” Moreover, "adjudication

of [Petitioners'] claims . . . would involve examining, at a

minimum, the operation and funding of the retirement plan

16 Franchise Tax Bd. v. Construction Laborers Vacation Trust for

S. Cal., 463 U.S. 1, 24 0.26 (1983).

17 Ingersoll-Rand, 498 U.S. at 138 (citations omitted); see also

Morales v. Trans World Airlines, Inc., 112 S. Ct. 2031, 2037 (1992)

(quoting many pronouncements concerning breadth of ERISA pre-emption).

18 Ingersoll-Rand, 498 U.S. at 138-39 (citation omitted); accord Pilot

Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47 (1987); Shaw v. Delta Air Lines,

Inc., 463 U.S. 85, 98 (1983).

19 Kelso v. Gen. Am. Life Ins. Co., 967 F.2d 388, 390 (10th Cir.

1992) (emphasis added); accord Monarch Cement Co. v. Lone Star Indus..,

982 F.2d 1448, 1452 (10th Cir. 1992); Settles v. Golden Rule Insurance Co..,

927 F.2d 505, 509 (10th Cir. 1991).

20 Houdek, 879 P.2d at 422 (Pet. App. at 8-9a).

prior to the eligibility changes, the language of the

amendments to the retirement plan, and Mobil's

communications to [Petitioners] concerning the terms of the

retirement plan amendments."”! No case cited by Petitioners

in support of any of their arguments authorizes, much less

requires, a state court to conduct such a detailed analysis of

ERISA and an ERISA-governed pension plan.

The Court of Appeals also correctly found that pre-

emption was necessary to satisfy ERISA's purpose of ensuring

that plans and plan sponsors would be subject to a "uniform

body of federal regulation” and to minimize the administrative

and financial burden of complying with conflicting directives

among states or between states and the federal government.”

ERISA "sets various uniform standards, including rules

concerning reporting, disclosure, and fiduciary

responsibility,” and it contains express provisions governing

the content and timing of the disclosure of plan amendments

by employers and plan administrators.”

Petitioners concede that Mobil complied with its

disclosure obligations under ERISA, yet they nevertheless

contend that the many states in which Petitioners and putative

21 Houdek, 879 P.2d at 423 (Pet. App. at 9a); see Christopher, 950

F.2d at 1218 (Pet. App. at 53a); see also Ingersoll-Rand, 498 U.S. at 140

(claims pre-empted as relating to a plan where "the court's inquiry must be

directed to the plan").

= Houdek, 879 P.2d at 423 (Pet. App. at 10a); see Ingersoll-Rand,

498 U.S. at 142.

23 Ingersoll-Rand, 498 U.S. at 137 (quoting Shaw, 463 U.S. at 91)

(emphasis added); see ERISA §§ 102 and 104, 29 U.S.C. §§ 1022 and 1024;

29 C.F.R. § 2520.104b-1, § 2520.104b-3, § 2520.104b-4.

class members were employed by Mobil should be free to

impose additional duties to disclose information about Plan

amendments. See Houdek, 879 P.2d at 424 (Pet. App. at

12a). But as the Christopher court explained:

Superimposing state law fraud standards on the

elaborate ERISA provisions gdverning the

content and timing of notice of plan provision

and amendments . . . would undercut the goal

of uniform national regulation in the manner

that section 514(a) seeks to prevent.” :

The Court of Appeals' decision was consistent with

Christopher and many other federal decisions applying

Ingersoll-Rand's "relate to" test and holding that ERISA pre-

empts state law claims alleging that an employee retired in

reliance on an employer's purported misrepresentation of

pension rights or benefits.

Indeed, every federal circuit that has considered the

issues presented in this case has reached a result consistent

with Christopher and the Colorado Court of Appeals. See

Sanson vy. General Motors Corp., 966 F.2d 618, 621 (11th

Cir. 1992), cert. denied, 113 S. Ct. 1578 (1993) (applying

Ingersoll-Rand to pre-empt state law claim for fraudulent

misrepresentation purportedly causing plaintiffs’ early

retirement); Berger v. Edgewater Steel Co., 911 F.2d 911,

74 950 F.2d at 1219 (Pet. App. at 55a); see also Howard v. Gleason

Corp., 901 F.2d 1154 (2d Cir. 1990); Lee v. E.J. DuPont, 894 F.2d 755,

758 (Sth Cir. 1990); Phillips v. Amoco Oil Co., 799 F.2d 1464, 1469-70

(11th Cir. 1986), cert. denied, 481 U.S. 1016 (1987); accord National

Elevator Industry, Inc. v. Calhoon, 957 F.2d at 1558 ("'laws that create

reporting [or] disclosure . . . requirements for ERISA plans,'” are pre-

empted because they “relate to” plans).

os a

921-923 (3d Cir. 1990), cert. denied, 499 U.S. 920 (1991)

(ERISA pre-empts state law claims of retirees who allege that

former employer misrepresented eligibility for lump-sum

retirement benefit, even though plaintiffs lack ERISA

standing); Lee, 894 F.2d at 758 (state law fraud and negligent

misrepresentation claims "relate to” employee benefit plan

and are pre-empted without regard to whether ERISA

provides any remedy for wrongs alleged).

Petitioners overstate the significance of the Tenth

Circuit's single footnote of dicta in the Raymond case. There

were no state law claims in Raymond, and as the Tenth

Circuit said, "[p]re-emption is not at issue in this case, and

we do not address it." Furthermore, that court did not have

before it the present complaint, which -- as the Colorado

Court of Appeals recognized -- requires a state court to parse

Plan terms, Plan administration and ERISA itself. See

Houdek, 879 P.2d at 422-424 (Pet. App. at 9-11a).”°

25 983 F.2d at 1538 (Pet. App. at 35a).

26 In the Colorado Court of Appeals, Petitioners also relied heavily on

Cutler v. Phillips Petroleum Co., 859 P.2d 1251 (Wash. App. 1993), rev'd,

881 P.2d 216 (Wash. 1994). The Court of Appeals declined to follow

Cutler, saying “we do not find that reasoning persuasive.” The Washington

Supreme Court has reversed the intermediate appellate court, finding that

plaintiff's express references to the ERISA plan required holding the claims

pre-empted. 881 P.2d 216.

he 10 ee.

c. Plaintiffs have not identified any significant

issue warranting certiorari.

Petitioners cite several state”’ and federal”* cases that

they say conflict with the Court of Appeals’ analysis. These

cases are inapposite, for they all involve claims that could be

resolved without reference to the terms, conditions or

administration of an ERISA pension plan, or that were

cognizable under ERISA because the plaintiff was a

"participant. ”

Petitioners claim that the Colorado Court of Appeals

applied a test "less stringent” than the statutory standard

27 The plaintiff in Pace v. Signal Technology Corp., 628 N.E.2d 20

(Mass. 1994) conceded he was not covered by an ERISA health plan, but

sought a remedy for his employer's alleged misrepresentation concerning

coverage; he made no claim as to improper plan administration. The

Massachusetts court recognized that there is no bright-line test for ERISA

pre-emption and that each case must be decided on its particular facts. 628

N.E.2d at 160 0.5. In HealthAmerica v. Menton, 551 So.2d 235 (Ala.

1989), cert. denied, 493 U.S. 1093 (1990), the insurance company and the

employer had misrepresented the terms of a health plan that the plaintiff was

invited to join; the claims had nothing to do with plan administration.

Moreover, it is doubtful that Menton is the law even in Alabama. See

Robinson v. Fikes of Alabama, Inc. , 804 F. Supp. 277, 283 n.4 (M.D. Ala.

1992) (noting Menton is contrary to Ingersoll-Rand and to a later Alabama

supreme court case).

28 Madonia v. Blue Cross & Blue Shield of Virginia, 11 F.3d 444 (4th

Cir. 1993), cert. denied, 114 S. Ct. 1401 (1994) held that a sole shareholder

of a corporation was a plan “participant” whose relation to the plan, and

whose beneficiaries’ relation, was governed by ERISA and not state law;

similarly, petitioners here were plan “participants” at the time of the

misconduct alleged in their complaint and their relation to Mobil and the Plan

is governed exclusively by ERISA. Harris v. Provident Life & Acc. Ins.

Co., 26 F.3d 930 (9th Cir. 1994) simply holds that a federal court does not

have jurisdiction to rule on ERISA pre-emption if there is no ERISA cause

of action.

"relate to." Pet., at 4. This claim misstates the Court of

Appeals’ holding and the applicable law. In fact, the Court

of Appeals’ test, which Petitioners attack as "diffuse," is

taken directly from this Court's opinion in /ngersoll-Rand.”°

The Court of Appeals correctly pointed out, 879 P.2d at 422

(Pet. App. at 7-8a), that ERISA pre-empts not only state laws

that facially affect plan terms and administration, but also

state law claims under facially neutral provisions, provided

the claim in question affects the terms, conditions, or

administration of an ERISA plan.

Petitioners’ implicit reliance on the certiorari grant in

Travelers Ins. Co. v. Cuomo, 14 F.3d 708 (2d Cir. 1993),

cert. granted sub nom. New York State Conference of Blue

Cross & Blue Shield Plans v. Travelers Ins. Co., 115 S. Ct.

305 (1994), is entirely misplaced. Travelers presents a circuit

conflict as to the validity and application of state statutes and

regulations imposing surcharges or taxes on some ERISA-

based health plans and not on others. The alleged ERISA

connection is the indirect economic impact of such charges on

levels of premiums and benefits.

In this case, by contrast, Petitioners are seeking a rule

that states may directly regulate Plan administration

inconsistently with ERISA. This subject was conclusively and

recently canvassed in /ngersoll-Rand, whose teaching -- as we

show above -- has been consistently applied by the federal

appellate courts.

29 "A law ‘relates to’ an employee benefit plan, in the normal sense

of the phrase, if it has a connection with or reference to such a plan.” 498

U-S. at 139 (citation omitted).

a es ea ee

De The Colorado Court of Appeals neither created a

"safe harbor" for employer fraud nor federalized

employment law; to the contrary, its decision

respects and is independently justified by

Colorado's employment-at-will doctrine.

Petitioners cannot make a principled claim that they

are hamstrung by a gap in remedies, nor that employer fraud

finds a safe harbor in ERISA. For ERISA-based claims,

Congress has provided several remedies. For example, the

Secretary of Labor possesses enforcement powers to remedy

ERISA violations even where individuals have no standing to

sue.*° ADEA provides a remedy for pension plan changes

that result in age discrimination if an action is timely filed and

supported by evidence. ADEA claims are exempted from

ERISA pre-emption. See ERISA § 514(d), 29 U.S.C. §

1144(d).

Petitioners aggressively, although unsuccessfully,

pursued all available remedies. They wrote and asked the

Secretary of Labor to act. ADEA claims based on the facts

in issue here were timely litigated by one retiree and the

Tenth Circuit held that "Mobil did not violate the ADEA."

Mitchell, 896 F.2d at 473. Represented by the saine lawyers,

retirees pressed their ADEA claims in two federal circuits,

both of which found them time-barred. Christopher, 950

F.2d at 1217 (Pet. App. at 5la); Raymond, 7 F.3d at 186.

The "gap" has been one not of remedies, but of proof and

diligence.

Petitioners are mistaken in contending that there can

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

be no ERISA pre-emption if a plaintiff lacks standing to bring

an ERISA cause of action. This Court has repeatedly stressed

that Congress intended to pre-empt state law even where a

plaintiff has no ERISA cause of action.*' Thus, it is well-

established that ERISA standing is not a prerequisite to

ERISA pre-emption.” And, as Raymond held, these

Petitioners had ERISA standing to challenge the lump sum

changes that Mobil announced on July 2, 1984,” but in effect

elected their remedy by retiring and taking a sizable lump

sum.

Petitioners’ dire warning, Pet., at 10-11, that ERISA

pre-emption "is inexorably federalizing” state employment

law is unfounded. Colorado employment law is alive, well,

and independent. Indeed, Petitioners have conceded in the

courts below that they were employees-at-will under Colorado

law, without any right to their jobs. That is, even if these

claims were not pre-empted by ERISA, they would not

survive under state law. Once again, "there simply is no

3! See Ingersoll-Rand, 498 U.S. at 144; Metropolitan Life Ins. Co. v.

Taylor, 481 U.S. 58, 64-65 (1987); Pilot Life, 481 U.S. at 54; Massachusetts

Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 146 (1985).

32 See, e.g., Sanson, ¥6 F.2d at 921-23; Berger, 911 F.2d at 619-22;

Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991),

cert. dismissed, 113 S. Ct. 2 (1992); Hermann Hospital v. MEBA Medical

& Benefits Plan, 845 F.2d 1286, 1290-91 (Sth Cir. 1988).

*3 Raymond, 983 F.2d at 1533 n.9 (Pet. App. at 27a).

*4 Regardless of ERISA pre-emption, the pleaded tort claims are

barred by the employment-at-will doctrine. See Continental Airlines v.

Keenan, 731 P.2d 708 (Colo. 1987). Petitioners’ citation, Pet., at 9, of

Berger v. Security Pacific Information Systems, Inc., 795 P.2d 1380 (Colo.

Pee ee Te TTY

cause of action if there is no plan." Ingersoll-Rand, 498 U.S.

at 140.

CONCLUSION

For the foregoing reasons, it is respectfully prayed that

the Court dismiss the petition as untimely, or in the

alternative that the petition be denied.

App. 1990), to suggest otherwise is misplaced, since Berger states that an

"employer's right to terminate an at-will employee without cause does not

protect the employer from liability for fraud in inducing the employee to

: accept employment." 795 P.2d at 1384 (emphasis added); see also Hunter

v. Up-Right, Inc., 864 P.2d 88, 89 (Cal. 1993) ("wrongful termination of

employment ordinarily does not give rise to a cause of action for fraud or

deceit, even if some misrepresentation is made in the course of the

employee's dismissal”).

Respectfully submitted,

MICHAEL E. TIGAR

(Counsel of Record)

727 E. 26th Street

Austin, Texas 78705-3299

(512) 471-6319

HAROLD A. HADDON

RACHEL A. BELLIS

HADDON, MORGAN & FOREMAN, P.C.

150 E. Tenth Avenue

Denver, Colorado 80203

(303) 831-7364

BRUCE E, YANNETT

DEBEVOISE & PLIMPTON

875 Third Avenue

New York, New York 10022

(212) 909-6000

Counsel for Respondent

January 13, 1995

Oe a eT Bi sit Te ns

a Ge neath Rachel ds ck Seal oa Sana

APPENDIX

DISTRICT COURT, CITY AND COUNTY OF DENVER,

STATE OF COLORADO

Case No. 89 CV 14357, Courtroom 8

CLASS ACTION COMPLAINT AND JURY DEMAND

HAROLD A. HOUDEK, FREDERIC J. RAYMOND, J. A.

MORRISON, GEORGE H. LIVERIS, ROBERT A. IRWIN,

CECIL J. ALLMON, JOSE AUGUSTO, JR., RS.

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,

Plaintiffs,

VS.

MOBIL OIL CORPORATION, a New York Corporation, the

RETIREMENT PLAN OF MOBIL OIL CORPORATION,

itself and by the Trustees thereof, and one or more JOHN

and/or JANE DOES and/or DOE ENTITIES,

Defendants.

COME NOW the plaintiffs above-named, individually

and on behalf of others similarly situated, by and through

their attorneys, Pryor, Carney and Johnson, A Professional

Corporation, and for their claims against defendants, allege,

aver, and state as follows:

GENERAL ALLEGATIONS

l. This Complaint asserts claims for civil frauds,

negligent misrepresentation, civil conspiracy, and interference

with contractual rights and business relationships.

Compensatory and punitive damages as well as other relief

are sought.

& Plaintiffs are all citizens of the United States

and are citizens of the states of their respective domiciles,

specifically as follows: (a) New York -- Harold A. Houdek;

(b) Colorado -- J.A. Morrison, George H. Liveris, and

Robert A. Irwin; (c) Texas -- Cecil J. Allmon, R.S. Banner,

Jr., A.D. Bond, Clemont H. Bruce, Harvey A. Carson, Jr.,

Billy Jack Dunn, Virginia B. Howard, T. L. Martin, Ira S.

Reavis, E. Shepard, Herman B. Thomason, Marion Leon

Thompson, Billy Rhea Sargent and Clarence E. White; (d)

New Jersey -- Jose Augusto, Jr; (e) Michigan -- Sylvester J.

Jaye; and (f) Ohio -- Frederic J. Raymond. The term

"plaintiffs" hereinafter refers to the named plaintiff and all

those similarly situated.

. Defendant Mobil Oil Corporation ("Mobil") is

a New York corporation licensed to do business in Colorado.

Mobil is engaged in the business of oil and gas exploration,

production and sales with offices located in Denver,

Colorado, and throughout the United States.

4. Defendant Retirement Plan of Mobil Oil

Corporation ("Plan") is a defined benefit plan sponsored by

Mobil with a number of Plan participants residing in and

working for Mobil in Colorado. Per Article 16, Section 1 of

the Plan, the Vice-President of Employee Relations and the

Treasurer of Mobil are named fiduciaries charged with the

operation and administration of the Plan. As such, Mobil,

individually and through its Board of Directors, Executive

Committee and designated fiduciaries, was at times itself a

fiduciary and owed fiduciary duties to plaintiffs. The

Trustees of the Plan are named herein as nominal defendants

solely in respect to the claims for relief asserted against the

Plan.

5. There are other persons and/or entities who

and/or which, upon information and belief, are liable upon

one or more of the claims asserted herein. The identity of

those persons and/or entities are unknown to plaintiffs at this

time, and they are identified herein as John and/or Jane Does

and/or Doe Entities. If and as the identity of such additional

defendants becomes known to plaintiffs they may seek to

amend their pleadings accordingly.

6. Both defendants are found in the state of

Colorado, and this Court has jurisdiction over all defendants

as well as jurisdiction over the subject matter of all claims

asserted herein. Further, venue is properly laid in this

judicial district, since Mobil has an office and place of

business within this county, and the torts alleged herein were

committed, inter alia, in this county.

y Plaintiffs, at all times material hereto, were

employees of Mobil.

8. Plaintiffs, at all times material hereto, were

and/or are participants in the Plan who have earned and

previously did earn accrued and vested benefits pursuant to

the provisions of the Plan.

9. All claims for relief asserted in this Complaint

are brought by the named plaintiffs as representative parties

pursuant to Colo. R. Civ. P. 23. Such claims are brought by

each of the named plaintiffs on behalf of himself or herself as

well as on behalf of the class of all others similarly situated.

Said class is defined as follows, subject to modifications by

subsequent motions and orders under Rule 23:

All persons who, as of January 1, 1985: (i)

were participants in the Retirement Plan of

Mobil Oil Corporation; (ii) were eligible to

retire under the policies of Mobil Oil

Corporation, and to receive retirement benefits

in the form of a lump sum settlement from and

under the terms of the Retirement Plan of

Mobil Oil Corporation; (iii) were informed of

proposed changes to the Plan's lump sum

option, as described hereinbelow, and who

believed, as of January 1, 1985, that the

changes in the Plan would become effective on

February 1, 1985; (iv) retired on or before

January 1, 1985, in order to preserve their

then-existing entitlement to the lump sum

option from loss due to the proposed changes

or who retired out of fear of additional such

changes in the future that might vitiate their

entitlement to the lump sum option; and (v)

retired without knowledge of certain facts

a ee ee ete ee

alleged hereinbelow which Mobil concealed

from them and which were material to their

decision to retire from Mobil.

10.‘ The class of such similarly situated persons

referred to hereinabove is so numerous that joinder of all

members of the class is impracticable. Additionally, there are

questions of law or fact common to members of the class, and

the claims of the representative plaintiffs are typical of the

claims of all members of the class.

11. The named plaintiffs, as representative parties,

will fairly and adequately protect the interests of the class and

all members thereof.

12. The questions of law and/or of fact common

to members of the class predominate over any questions

affecting only individual members of the class, and litigation

of the claims herein as a class action is a method of

adjudication superior to any other method available for the

fair and efficient adjudication of the controversies at issue

here.

13. Named plaintiffs will move as soon as

practicable for an order certifying this as a class action with

respect to all claims requiring such certification.

14. Beginning in 1984 and continuing through the

present, Mobil consciously and in reckless and wanton

disregard of the rights and feelings of plaintiffs, willfully and

deceitfully devised a means to rid itself of 1,000 or more

highly compensated senior employees, ages 55 and over,

including the plaintiffs, knowing that their departure would

save Mobil as much as $75,000,000 per year.

; 15. Mobil chose the fraudulent and otherwise

unlawful manipulation of its retirement plan as the vehicle for

ridding itself of such employees.

16. Beginning in 1977, Mobil made available to

eligible employees a Plan benefit, known as the “lump sum

option,” allowing an eligible employee to elect to receive the

funds in his retirement account in a single lump sum payment

rather than in the form of periodic annuity payments. Only

retirement eligible employees with a pension account of

$250,000 or more or with personal net worth, exclusive of

pension plan entitlements, of $250,000 or more, were entitled

to avail themselves of the lump sum option.

17. The acts, omissions and conduct of Mobil

employees, agents, officers, attorneys, directors, and of the

Executive Committee complained of herein were within the

scope and course of their employment by Mobil, were

approved and/or ratified by Mobil and are thus imputed to

Mobil as its acts and for which it is liable.

18. During the period 1977 to 1984, as a result of

the required contributions to the Plan by Mobil and the fact

that a 5% discount rate was used in determining the present

value of each eligible employee's lump sum benefit, the lump

sum option became substantially more valuable than the

annuity option, and an increasing percentage of Mobil retirees

entitled to the lump sum elected the lump sum over the

annuity.

19, From 1977 until July 1, 1984, all retirement-

eligible employees of Mobil meeting the $250,000 threshold

at the time of retirement were entitled, subject to certain

conditions which are not material here, to elect the lump sum,

and during this period, nearly 1,700 Mobil employees retired

and elected the lump sum option. As to each of those

individuals, forced retirement before his or her desired date

of retirement was not a condition of the right to elect the lump

sum option.

20. Beginning in or about June 1982, Mobil's

Executive Committee, purportedly out of concern for the

increasing election of the lump sum option, began

consideration of Plan changes to decrease utilization of the

option by retiring employees.

21. From a time no later than early 1983, Mobil

was aware: (a) of an Advisory Opinion of the National

Office of the Internal Revenue Service ("IRS") interpreting

the federal Empioyee Retirement Income Security Act of

1979, as amended (29 U.S.C. §§ 1101 et. seq..) (hereinafter

"ERISA") to prohibit an employer from amending a qualified

benefit plan to reduce a participant's "accrued benefit” (the

"anti-cutback” rule); and (b) that the IRS interpreted the anti-

cutback rule to prohibit reductions in any form of any benefit

available under a plan, including a lump sum payment option.

22. In October 1983, an attorney from Mobil's

Office of General Counsel wrote a memo advising caution

concerning attempts to further restrict eligibility for the lump

sum because such action might be viewed as an "imper-

missible preference” under Title I of ERISA.

23. Also in October 1983, an attorney in Mobil's

Office of Tax Counsel expressed pessimism as to the

likelihood of IRS approval of an increase in the eligibility

threshold for the lump sum option of the Plan.

24. Notwithstanding the foregoing, Mobil's

Executive Committee, by no later than December 1983, was

giving serious consideration to changing the eligibility

requirements for the lump sum option.

25. Following receipt of the attorney opinions from

both its Tax and General Counsel offices expressing concern

about any attempt to raise the threshold eligibility requirement

for the lump sum option, Mobil retained the services of a

former Commissioner of the Internal Revenue Service as a

consultant to assist the company in its plan to raise the

threshold requirement.

26. In late 1983, at Mobil's request, that consultant

spoke with high ranking officials in the National Office of the

IRS on a "no names" basis (Mobil's name not being

identified) concerning the likely reaction of the IRS to a

request to raise the threshold for the lump sum option.

27. As a result of this contact, Mobil learned that

under IRS policy then in effect: (a) lump sums options were

viewed as a valuable right which should be available to all

plan participants; (b) restriction of lump sum eligibility in

order to protect rank-and-file employees from their own

improvidence was not favored; (c) the IRS perceived

restrictive lump sum provisions as "sown with the seeds of

discrimination”; (d) any attempt to amend Mobil's Plan to

increase the lump sum eligibility requirement would not only

likely result in disapproval, but might well result in IRS

insistence that the existing $250,000 threshold be removed;

and (e) prospectively raising the 5% interest assumption rate

used to calculate the present value of lump sum option

settlements would likely be acceptable to the IRS.

28. On information and belief, plaintiffs allege

that, also in December 1983, Mobil's Office of General

Counsel expressed a second legal opinion, this time to the

manager of Corporate Benefits in response to a request for an

analysis of the legal implications of lump sum eligibility

changes, advising Mobil that the proposed changes were

discriminatory and would likely be disapproved by the IRS.

Upon information and belief, that opinion was reiterated in

a meeting held later that month among Mobil's in-house

counsel.

29. Well in advance of January 1, 1984, Mobil

knew that an IRS ruling required any retirement plan text to

State the basis for-calculating an optional form of retirement

benefit such as the lump sum and that effective January |,

1984, the IRS would prohibit any retroactive reduction of any

accrued optional benefit calculated on the basis described in

the text.

30. | By December 1983, Mobil was also aware that

the competitive trend among the major oil companies was

toward broader, and, in most cases, universal eligibility for

a lump sum option. By that time six of the 11 major

American oil companies with lump sum options in their

pension plans had no restrictions whatever on eligibility.

Al0

31. | By December 1983, Mobil knew that to reduce

its annual contributions to the Plan, it was unnecessary to

raise the threshold if Mobil increased the actuarial assumption

(the 5% discount rate). The latter was a step Mobil had

planned to take for quite some time consistent with industry

practice to utilize a higher discount rate. Mobil also knew

that raising the interest assumption would likely be favorably

received by the IRS so long as the interest assumption was

raised prospectively, did not deprive Plan participants of

accrued benefits, and was in line with interest rate assumption

figures being used by competitors.

32. In December 1983 the Vice President of

Employee Relations, who was also a named fiduciary of the

Plan and a member of Mobil's Executive Committee, wrote

Mobil's Board of Directors a memorandum enclosing a

discussion paper concerning an upcoming Executive

Committee Meeting. The paper acknowledged Mobil's

awareness that the IRS had changed its views on lump sums,

now favored liberal eligibility and might not approve

restrictive eligibility provisions.

33. Thus, by the time of the December 20, 1983

Executive Committee meeting, Mobil knew that any effort to

further restrict eligibility for the lump sum option by raising

the threshold: (a) would likely be met with IRS disapproval

on the basis that further restricting eligibility would be

discriminatory in favor of highly compensated employees; (b)

would be contrary to the competitive trend within the oil

industry toward broader eligibility; (c) would cause employee

morale problems and would likely result in complaints and

lawsuits; (d) would require notice to the employees and would

necessitate a transition plan to minimize accelerated

All

retirements; and (e) would result in an unlawful decrease in

accrued benefits unless the employees’ pre-amendment

entitlements to the option were preserved and protected from

cutback. At this time, Mobil also knew that in terms of

savings to Mobil with respect to its annual cash contributions

to the Plan, essentially equivalent savings could be

accomplished by changing only the 5% assumption rate

prospectively, a Plan amendment Mobil already knew would

likely receive [RS approval. With such knowledge, Mobil

decided in December 1983 to defer further consideration of

changing the lump sum option pending informal contacts with

the IRS.

34. At a January 1984 meeting of the Mobil

Executive Committee even though the Committee had just

deferred acting on changing the threshold the month before,

pending discussion with the IRS and even though no such

discussions had yet taken place -- the Committee once again

discussed changes in the threshold requirement and the

discount factor used to calculate lump sum settlements. At

that meeting, Mobil considered "grandfathering” (i.e.

applying prospectively) the 5% discount factor in calculating

the present value of any lump sum benefits earned prior to

any change in the Plan and establishing a "transition" plan

(i.e. a grace period or window) whereby employees who had

not previously elected the lump sum option in a timely fashion

could do so under the $250,000 eligibility requirement by

announcing their retirement from the company.

35. By January 1984, the Executive Committee

knew that it would ultimately approve an increase in the

threshold requirement and undertook a detailed analysis of the

precise number of senior, highly paid Mobil employees who

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would be forced to retire as a result of the change in the

threshold requirement. Mobil knew by early 1984 that the

total of all lump sum payments that would be required by any

additional forced retirements could easily be absorbed by the

current assets of the Plan.

36. | On information and belief, Mobil began also in

early 1984 to consider a possible acquisition of Superior Oil

Company ("Superior"), an investment opportunity initially

described within the Mobil hierarchy as "Project Styx."

Discussion with and ultimate acquisition of Superior raised

issues of employee surplusage for Mobil, as well as potential

dilution in Mobil's earnings projected for five years after the

acquisition.

37. Rather than choosing a reasonable alternative --

such as applying the amended threshold eligibility

requirement prospectively, as it did with respect to the

increase in the interest assumption -- Mobil chose to propose

a Plan amendment that would impose the higher eligibility

requirements on all employees -- even those who had already

qualified under the $250,000 threshold -- and to establish the

grace period or "retirement window” described hereinabove.

Mobil took this action with full knowledge and the intent that

senior, highly paid employees of Mobil facing the choice of

continuing their employment with an attendant loss of a

valuable right in the lump sum option would, in substantial

numbers, be forced to elect early retirement.

38. In February 1984, Mobil, through its Executive

Committee, knowing full well of the anti-cutback and anti-

discriminatory policies of the IRS relating to optional forms

of benefits and that any attempt to increase the threshold

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would certainly result in numerous accelerated retirements,

elected to propose a Plan amendment raising the lump sum

eligibility requirement to $450,000, effective February 1,

1985. In doing so, Mobil expressly rejected other alternatives

brought to its attention which would accomplish substantial

and similar plan economies and other objectives of the

Executive Committee with respect to the Plan and be received

favorably by the IRS and Mobil's employees. The only

Executive Committee memorialized justification for this

increase was that the lump sum option had increased from 5%

of retiree liability ($3,500,000) paid in 1971 to 71% of retiree

liability ($149,000,000) paid in 1983. At the same meeting,

the 5% interest rate used to determine Mobil's annual

financial obligation to the Plan and to calculate the present

value of the lump sum option was raised to 9 1/2%

prospectively for service after January 1, 1985.

39. In late March 1984 Mobil's Board of Directors

approved the issuance of debt securities of up to

$2,500,000,000 to finance the acquisition of Superior and was

aware that the annual interest expense on those debt securities

alone would be between $100,000,000 and $200,000,000.

40. On information and belief, before voting to

propose an increase in the threshold, members of the

Executive Committee reviewed the status of their personal

entitlements under the Plan, and upon being assured that each

of them could easily meet the $450,000 threshold, in turn

entitling them to a lump sum worth considerably more than

the annuity, voted unanimously in favor of proposing an

increase in the threshold.

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41. By late February 1984, Mobil was aware,

through analyses performed by its own actuaries, that an

increase in the threshold would likely result in as many as

1,300 additional early retirements at a projected expense to

the Plan of as much as $350,000,000, while Mobil itself

would realize a savings in payroll and cost of future benefits

of not jess than $75,000,000 per year.

42. — Inthe spring of 1984, Mobil retained a second

outside consulting firm to study the implications of an early

retirement program and to offer potential "solutions" to

certain perceived "problems". As a result of this study,

Mobil was advised that it was exposed to certain "risks" if the

threshold requirements were increased: (a) extremely high

turnover (accelerated retirements in the age 55 plus category)

in the last half of 1984; (b) excessive cash flow demands on

the Plan by reason of an increased number of empioyees

leaving Mobil and electing the lump sum option; and (c)

employee intervention in the amendment approval process or

litigation.

43. In April 1984, the Mobil Vice President for

Employee Relations wrote the members of the Mobil Board

of Directors predicting that the change in eligibility for the

lump sum would cause an additional 1,330 employees (i.e.,

those who would not otherwise retire) to retire in the six

months following announcement of the proposed amendment.

44. _ An outside consulting firm retained by Mobil

predicted in April 1984, on a "most-likely-case” scenario

basis, that as many as 2,405 additional retirement-eligible

employees would retire in 1984, most as a result of the

change in the lump sum option eligibility requirements. This

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actuarial firm projected an expense to the Plan of as much as

$622,000,000. Mobil was told that retirement-eligible

employees who would no longer be eligible for lump sum

retirement effective February 1, 1985, were “extremely

vulnerable” to, in effect, involuntary retirement because of

the uncertainties that would result from the proposed change

in the threshold requirement.

45. Although Mobil originally expressed concern

that increased utilization of the lump sum option might

become a financial drain on the Plan as a factor in its decision

to seek even more restricted eligibility requirements, Mobil

knew, before raising the threshold, that even a 100 percent

utilization of the lump sum option posed no financial threat

whatsoever to the substantially over-funded Plan. As of

December 1983, the market value of Plan assets was

approaching $1.9 billion. The Plan was then 144 percent

funded in terms of vested liabilities and 140 percent funded in

terms of accumulated liabilities. By the spring of 1984, the

sole purpose of the proposed amendment was to force the

early retirement of more than 1,300 senior, highly-paid

employees who could be replaced by younger, lower-paid

employees already within Mobil or joining the company from

Superior.

46. Atall times material hereto, Mobil also knew

that the lump sum option was worth approximately 40% more

to its employees than the annuity, and that was solely a

consequence of the 5% interest rate assumption.

47. By early 1984, Mobil was aware that passage

of the Retirement Equity Act (informally known as the

Women's Equity Act) would codify the existing IRS policy

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which applied the IRS's anti-cutback rule to optional forms of

benefits such as the lump sum option, causing Mobil to

acknowledge in May and June 1984 that this would probably

preclude raising the lump sum threshold as to all employees

for whom the benefit had already accrued.

48. In June 1984 members of Mobil's Board of

Directors were informed by memorandum that passage of the

Retirement Equity Act was likely and would further diminish

an already unlikely chance of IRS approval of the threshold

increase and that announcement of a proposed increase in the

threshold would trigger about 1,000 additional retirements

and would result in additional 1984 Plan lump sum payments

of as much as $350,000,000.

49. _ Plaintiffs further allege, on information and

belief, that immediately prior to the Executive Committee

Meeting when the increased threshold was formally though

conditionally approved, in-house counsel again advised Mobil

that the proposed threshold changes would likely be viewed

as discriminatory and in violation of existing IRS policy

regarding cutbacks in accrued rights to optional forms of

benefits. In light of this fact, among others, Mobil's conduct

in proceeding with the amendment was willful.

50. On June 13,. 1984 Mobil's Executive

Committee voted unanimously to seek approval of a Plan

amendment increasing the lump sum threshold from $250,000

to $450,000, indexed to the Consumer Price Index, applicable

to retirements on February 1, 1985 and thereafter. The

Executive Committee further determined that the $250,000

threshold would remain available to any retirement-eligible

employee who retired on or before January 1, 1985. The

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Executive Committee increased the interest rate from 5% to

9 1/2% with a pro-rata grandfather clause, also effective

February 1, 1985.

S51. On July 2, 1984, Mobil employees were

informed in writing of the proposed change in the eligibility

for the lump sum option, disclosing as a basis for the

proposed change only that eligibility standards were to be

updated to reflect inflation and/or to make the Plan cost

competitive. The employees were also informed at that time

that they could preserve their rights to the lump sum option

under the $250,000 requirement only by retiring before

January 1, 1985.

52. In making this announcement, Mobil

deliberately failed to disclose and affirmatively concealed,

inter alia, the following from its employees: (a) the current

position of the IRS relative to restrictive eligibility; (b) the

likelihood of IRS disapproval of the proposed increase; (c)

Mobil's knowledge and rejection of various feasible

alternatives to the increase in the threshold which could have

avoided a large number of -accelerated retirements; (d)

Mobil's knowledge, through analysis by its and the Plan's

actuarial staff and at least two outside actuaries, that the

number of forced retirements upon announcement of a

threshold increase could be predicted within a small

percentage of error and would be substantially greater than

the normal level of retirements; and (e) Mobil's true purpose

for proposing the Plan amendments.

S3. From and after June 13, 1984, Mobil's course

of conduct was directed toward an undisclosed scheme to

encourage employees to leave the company through forced

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early retirements by, inter alia, threatening the loss of a

vested, accrued and valuable retirement benefit while seeking

to make the change appear lawful and proper.

54. Literature disseminated to employees

concerning the lump sum option after the announcement of

the threshold increases was calculated to and did exert

pressure upon eligible employees to take early retirement, but

such literature contained the same misrepresentations and

omissions alleged hereinabove.

55. In its submission to the IRS in connection with

the proposed threshold increase, Mobil willfully withheld and

concealed from the IRS Mobil's knowledge that IRS approval

of the threshold would cause an additional 1000 to 1330

retirements in 1984.

56. In October 1984, the Chairman of the Board of

Mobil was advised that the Texas IRS agent reviewing

Mobil's proposed Retirement Plan amendments had agreed to

the increase in the threshold, expressly subject however to the

inclusion of the "waiver clause,” allowing Mobil's employees

to seek exemption from the new threshold requirement in

individual cases for valid cause shown.

57. In October 1984, Mobil's Board of Directors

was advised in writing, not only of verbal approval by the

IRS Dallas office, but of the IRS insistence upon the waiver

clause and Mobil's agreement to the clause. But on October

25, 1984 Mobil advised its divisional employee relations

managers and numerous other individuals in writing that the

IRS had approved the "lump sum option” amendments to the

Plan, but concealed from them the highly material waiver

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clause insisted upon by the IRS. This materially misleading

information was, in turn, conveyed to plaintiffs.

58. On November 12, 1984 Mobil's manager of

corporate benefits, by interoffice correspondence, enclosed

the proposed policy for administration of the Plan amendment

and the new lump sum amendment language, including the

employees’ right to seek exemption from the $450,000

threshold. Thus, even before Mobil's receipt of formal IRS

approval of the Plan amendment, Mobil had implemented a

policy for administration of the amendment which meant

departing employees could have been immediately notified of

formal IRS approval and the waiver clause.

59. On November 23, 1984, the IRS Dallas

Regional Office issued Mobil a favorable determination letter

concerning the Plan amendments related only to the status of

the Plan under the Internal Revenue Code.

60. It was not until December 21, 1984, just days

before the exodus of the forced retirees, that correspondence

was sent to employees advising them that the IRS had

approved the "package of changes” scheduled to take effect

on February 1, 1985. This announcement not only failed to ©

disclose, but willfully concealed the waiver clause insisted

upon by the IRS. Thereafter, Mobil never informed and

willfully and deliberately concealed the existence of the

waiver clause from the 1,000 or more employees affected by

the threshold increase which was to go into effect on February

1, 1985.

61. Between October 25, 1984 and October 29,

1985, Mobil sent numerous employee benefit newsletters to

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participants in Mobil's benefits programs, but not one of

those mentioned the waiver clause.

62. As early as July 1985, outside counsel for

Mobil had written a memorandum concerning the Plan,

Revenue Ruling 85-59 and the lump sum benefit, noting that

there had been no general announcement to employees about

the existence of the waiver from the new threshold under the

claims and appeals procedures of the Plan for "valid cause

shown,” concluding that it would be "prudent" for Mobil to

announce the existence of the appeal right and suggested that

the company be liberal in determining appeals.

63. It was not until August 1985, based on

discussions with in-house counsel, that Mobil decided that it

would thereafter "disclose" the waiver clause by burying it in

the text of the company's benefit payment claims and appeals

procedure. This decision was made by Mobil with the

avowed intent of minimizing appeals brought pursuant to the

waiver Clause.

64. On October 29, 1985, Mobil finally did

disclose the waiver in a mailing to still-employed participants

in the corporate benefits program but elected not to so inform

the 1,000 or so retirees (i.e., plaintiffs herein) who had

already retired because of the threshold increase. The waiver

was announced in such a way to draw as little attention to its

existence as possible.

65. Not only did Mobil knowingly elect a course

of action with respect to increasing the threshold with the

intended and predicted result of forcing the retirement of

approximately 1,000 highly compensated, senior Mobil

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employees, age 55 or older, Mobil thereafter deliberately,

deceitfully and fraudulently concealed its misconduct from

plaintiffs.

66. Mobil's conduct constituted fraudulent

concealment.

67. Defendants also fraudulently concealed and

continue to fraudulently conceal, inter alia, the material fact

that the Plan amendment proposed in June 1984 was itself

amended after July 31, 1984 and that the amendment, as

actually approved by the IRS, was therefore made after the

effective date of the Retirement Equity Act, under which the

illegality of Mobil's "cutback" on the lump sum option was

confirmed.

68. On information and belief, plaintiffs allege that

Mobil also deliberately concealed from the IRS Mobil's

intention not to use the exemption for the purpose intended by

the IRS, Mobil's intention not to disclose the existence of the

waiver Clause to affected retirees, and its plan to allow 1,000

or more retirees to leave Mobil with no knowledge whatever

of the existence of the waiver clause.

69. On information and belief, as a result of the

changes to the Plan and the misrepresentations and

concealment of Mobil concerning the changes, certain assets

of the Plan were used for the benefit of Mobil.

70. | Mobil's conduct in electing to raise the

threshold, although incidentally involving the Plan to the

extent that Mobil manipulated accrued benefits and rights

under the Plan, was, in reality, a scheme and willful plan

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designed to force plaintiffs into early retirement, and if

litigation ensued, Mobil would be in a position to claim that

plaintiffs’ common law claims were preempted by ERISA.

Plaintiffs’ involuntary retirements proximately resulted from

Mobil's deceit only indirectly related to the Plan, the

manipulation of which was used as a means to ends unlawful

under law independent of ERISA and causing injury

independent of those remedied under ERISA.

71. ~~ Plaintiffs allege that their pursuit of any

remedy under the Mobil Retirement Plan for the injuries

alleged herein would be futile.

72. Plaintiffs have exhausted or will by operation

of law have exhausted their administrative remedies.

73. The Plan, acting through its trustees,

fiduciaries and agents, aided, abetted and ratified Mobil's

misconduct as alleged herein and conspired with Mobil and

others to violate plaintiff's rights, as alleged herein.

74. ~All defendants fraudulently concealed the

existence of the factual basis for some or all of the claims

asserted herein, such factual basis having been learned only

through discovery in an action filed against defendants herein

by one Porter Mitchell, a Mobil retiree adversely affected by

the same misconduct alleged herein. That action was filed in

federal district court in Colorado and was denominated

Mitchell v. Mobil Oil Corp., Civil Action No. 86-Z-585 (D.

Colo.). The case ended in a Jury verdict and judgment in

favor of Mitchell, and the case is now on appeal.

A23

Ta. Defendants’ efforts to conceal, inter alia, the

"waiver Clause" and other material facts alleged hereinabove

from Mr. Mitchell continued until at least May 1988, and

continued thereafter as to the plaintiffs in this action until at

least November 1988.

76. The claims asserted herein were first asserted

on December 30, 1988, as part of a class action -- also filed

in federal district court in Colorado, which action was

denominated Raymond v. Mobil Oil Corp., Civil Action

No. 88-Z-2112 (D. Colo.). The Complaint and Amended

Complaint in that action asserted claims under the Age

Discrimination in Employment Act ("ADEA"), under ERISA

and under applicable state law. By order of the court

presiding over that action, as amended on August 15, 1989,

the state-law claims were dismissed without prejudice,

because the federal district court chose not to exercise pendent

jurisdiction over those claims. Those state-law claims are

refiled in state court by way of this Complaint and in

accordance with applicable statutory and common law.

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FIRST CLAIM FOR RELIEF

(Common Law Fraud Against

Mobil Oil Corporation Only)

77. Paragraphs 1 through 54 and 65 through 76 of

the General Allegations are incorporated herein by this

reference and are made a part hereof as though fully set forth.

78. This Claim for Relief as well as the Second,

Third, Fourth and Sixth Claims for Relief are directed only

against Mobil and not against the Plan or Plan fiduciaries and

seeks damages, both compensatory and exemplary, only from

Mobil.

79. | Mobil's conduct in July, 1984 and thereafter in

affirmatively misrepresenting and concealing material facts

concerning the specific purpose for raising the Plan threshold

to $450,000, while knowing that the increase would, in fact,

force the retirement of as many as 1,000 or more

retirement-eligible Mobil employees, constitutes the tort of

fraud and deceit.

80. Specifically, Mobil misrepresented that the

change in eligibility standards for the lump sum option

effective for retirements beginning February 1, 1985 was to

make the Plan more "cost competitive” and that the increase

in the threshold was to "update" the threshold to reflect

inflation since the present eligibility standards were

established. Mobil's real intent was to force the retirement of

1,000 or more highly paid employees.

81. Further, Mobil misrepresented and/or

concealed, inter alia, the following material facts:

A25

(a) That the change in the threshold,

coupled with the increase in the discount rate to 9 1/2 percent

discount rate, would not make the Plan more "cost

competitive” as this would only result in an additional savings

to Mobil in terms of cash contributions to the Plan of

approximately $4,000,000 per year, when Mobil knew it

would cost more than that to exit these additional retirees

from Mobil.

(b) That the Plan was already over-funded

and that Mobil’s annual contribution to the Plan had

decreased substantially from the preceding year, and that

there was no need to "update" the threshold to reflect inflation

since “updating” amounted to nothing more than an attempt

to further limit the number of rank and file employees who

could exercise the option.

right to a lump sum option and to cut back already accrued

rights to the option by raising the threshold violated then-

existing IRS policy, a fact that had been called to Mobil's

attention by in-house and outside counsel for Mobil both

before and after the proposed amendment had been

conditionally approved by Mobil's Executive Committee.

(d) That Mobil knew the proposed

threshold increase would effectively close an early retirement

window for an additional 1,000 plus Mobil employees who

were almost certain to retire with the announcement of the

proposed threshold increase.

(e) That the real purpose for the

"retirement window,” the six month period between July 1984

A26

and January 1, 1985, during which retirement-eligible

employees who could meet the existing $250,000 threshold

could retire with the lump sum, was to force the retirement of

those employees.

(f) That on June 13, 1984, the Executive

Committee voted to grandfather or exempt employees from

the new threshold providing they met the old threshold, had

elected prior to July 2, 1984 to retire and who would retire

prior to July 2, 1985.

(g) | That Mobil was selectively and secretly

granting certain employees positive incentives to retire, while

not offering such to the others, including the plaintiffs herein.

(h) That Mobil had no intention of

informing the IRS in connection with its application for

approval of the threshold increase of the fact that the

threshold increase would accelerate the retirement of at least

an additional 1,000 Mobil employees.

82. | Mobil made such misrepresentations knowing

them to be false and omitted to state material facts necessary

to avoid deceiving and misleading plaintiffs in respect to their

decision to retire from Mobil.

83. Mobil made such _ representations and

committed such omissions intending that plaintiffs act and rely

upon the representations and upon the impressions created by

the omissions.

84. Plaintiffs justifiably relied on _ those

representations and impressions.

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85. Mobil was aided and abetted by one or more

John and/or Jane Does and/or Doe entities in the fraud alleged

herein, in that such persons and/or entities knew or were

reckless in not knowing of the false representations of Mobil

and that Mobil had concealed material facts from plaintiffs,

and such persons and entities gave substantial assistance or

encouragement to Mobil in connection with its fraud upon

plaintiffs.

86. The fraud of Mobil proximately caused damage

to each of the plaintiffs, in amounts to be proven at trial.

87. | The conduct of Mobil described herein was

attended by circumstances of fraud, malice and/or constituted

misconduct purposely or heedlessly and recklessly committed

without regard to its consequences or to the rights, interests,

and feelings of plaintiffs.

WHEREFORE, each plaintiff on behalf of himself,

herself, and all others whom he or she represents herein prays

for judgment in favor of the named plaintiffs and the plaintiff

class and against Mobil Oil Corporation upon this First Claim

for Relief, awarding each plaintiff such damages as are shown

hereafter to have been proximately and directly caused by the

fraudulent conduct of Mobil Oil Corporation; awarding each

plaintiff exemplary damages against Mobil Oil Corporation in

an amount sufficient to punish Mobil Oil Corporation and

deter it and others from similar wrongful conduct in the

future; awarding each plaintiff such equitable and/or

declaratory relief as may be necessary to restore each to his

or her rightful employment status and all other attendant

rights and interests or their equivalent; awarding plaintiffs

their costs incurred in the course of this action, including

A28

expert witness and attorney fees in accordance with applicable

law, together with prejudgment, moratory, and postjudgment

interest in accordance with applicable law; and awarding such

other relief as is necessary and appropriate to remedy the

harms inflicted by defendant Mobil Oil Corporation upon

plaintiffs.

SECOND CLAIM FOR RELIEF

(Common Law Fraud Against

Mobil Oil Corporation Only)

88. Paragraphs 1 through 76 of the General

Allegations and paragraphs 78 through 84 of the First Claim

for Relief are incorporated herein by this reference and are

made a part hereof as though fully set forth.

89. Mobil's conduct alleged herein, in willfully

concealing from November, 1984 to the present, from

affected Mobil retirees including plaintiffs, the existence of

the "waiver clause” required by the Internal Revenue Service

as a condition of IRS approval of the threshold increase,

constituted the tort of fraud of deceit.

90. Specifically, Mobil misrepresented that the IRS

had approved the threshold without changes. In announcing

the IRS approval of the threshold increase to Mobil employees

in December 1984, Mobil announced approval of the

"package of changes" scheduled to take effect on February 1,

1985. Mobil's intent by this announcement was to cozen,

trick and deceive retirement-eligible employees into leaving

without knowledge of their rights under the waiver clause and

into believing that they had no right or way to challenge the

threshold increase in light of its approval by the IRS.

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91. Specifically, Mobil concealed the following

material facts:

(a) That as an express condition of IRS

approval of the threshold increase, the IRS insisted and Mobil

agreed to add to the threshold amendment the waiver clause;

(b) That after agreeing to include a waiver

clause in the Plan amendment ultimately approved by the IRS

in late November, 1984, it had no intention of granting any

waivers from the $450,000 threshold requirement to any

retirement-eligible employees who had or would have

qualified under the existing $250,000 threshold; and

approved by the IRS was necessarily made after the federal

Retirement Equity Act had become effective, which rendered

the threshold charge itself unlawful under federal law.

. 92. Mobil made such misrepresentations knowing

them to be false and omitted to state material facts necessary

to avoid deceiving and misleading plaintiffs in respect to their

decision to retire from Mobil.

93. Mobil made such misrepresentations and

committed such omissions intending that plaintiffs act and rely

upon the misrepresentations and upon the impressions created

by the omissions.

94. Plaintiffs justifiably relied on _ those

misrepresentations and impressions.

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95. | Mobil concealed the existence of the waiver

clause not only from Mobil retirees who were forced to retire

because of the threshold increase, but as well all active Mobil

employees and did so in numerous communications

concerning the Plan between late October 1984 and late

October 1985.

96. Even when Mobil finally did partially disclose

the waiver clause to existing employees in late October, 1985,

it failed intentionally to inform the retirees directly affected

by the threshold increase, i.e., those employees, including

plaintiffs, who had already been forced to retire to protect

their lump sum option rights. :

97. Even upon disclosing the existence of a waiver

avenue in late October, 1985, Mobil, knowing that the

intended disclosure still did not meet ERISA disclosure

requirements, announced the existence of Mobil’s power to

waive the new threshold requirement and described this in

such a fashion as to conceal its meaning and true purpose.

The ruse was committed by Mobil with the intent of

minimizing claims and appeals concerning the threshold

increase.

98. | Mobil's pattern of concealment continued in

the case of Mitchell v.Mobil Oil Corp., et al., U.S. District

Court, District of Colorado, 86-Z-5855, as Mobil deliberately

concealed from Mr. Mitchell, inter alia, the existence of the

waiver until May, 1988. 5

99. Mobil was aided and abetted by one or more

John and/or Jane Does and/or Doe entities in the fraud alleged

herein, in that such persons and/or entities knew or were

A31

reckless in not knowing of the false representations of Mobil

and that it had concealed material facts from plaintiffs, and

such persons and entities gave substantial assistance and/or

encouragement to Mobil in connection with its fraud upon

plaintiffs.

100. The fraud of Mobil proximately caused damage

to each of the plaintiffs, in amounts to be proven at trial.

101. The conduct of Mobil described herein was

attended by circumstances of fraud, malice and/or constituted

misconduct purposely or heedlessly and recklessly committed

without regard to its consequences or to the rights, interests,

and feelings of plaintiffs.

WHEREFORE, each plaintiff on behalf of himself,

herself, and all others whom he or she represents herein prays

for judgment in favor of the named plaintiffs and the plaintiff

Class and against Mobil Oil Corporation upon this Second

Claim for Relief, awarding each plaintiff such damages as are

shown hereafter to have been proximately and directly caused

by the fraudulent conduct of Mobil Oil Corporation; awarding

each plaintiff exemplary damages as against Mobil Oil

Corporation in an amount sufficient to punish Mobil Oil

Corporation and deter it and others from similar wrongful

conduct in the future; awarding each plaintiff such equitable

and/or declaratory relief as may be necessary to restore each

to his or her rightful employment status and all other

attendant rights and interests or their equivalent; awarding

plaintiffs their costs incurred in the course of this action,

including expert witness and attorney fees in accordance with

applicable law together with prejudgment, moratory, and

postjudgment interest in accordance with applicable law; and

A32

awarding such other relief as is necessary and appropriate to

remedy the harms inflicted by defendant Mobil Oil

Corporation upon plaintiffs and all others similarly situated.

THIRD CLAIM FOR RELIEF

(Negligent Misrepresentation Against

Mobil Oil Corporation Only)

102. Paragraphs | through 54 and 65 through 76 of

the General Allegations and paragraphs 78, 80 and 81 of the

First Claim for Relief are incorporated herein by this

reference and are made a part hereof as though fully set forth.

103. In accordance with Colo. R. Civ. P. 8(e)(2),

and in the alternative to the allegations contained in

paragraphs 82 and 83 of the First Claim for Relief, plaintiffs

allege as follows:

(a) Mobil gave false information and

created in plaintiffs false impressions

concerning plaintiffs’ employment and

retirement rights;

(b) Mobil gave such false information and

created such false impressions in the

course of Mobil's activities as an

employer of plaintiffs;

plaintiffs and created the impressions

in plaintiffs for the guidance and use of

plaintiffs in making decisions regarding

their employment and retirement;

A33

(d) Mobil was negligent in_ the

communications alleged herein;

(e) Mobil gave the information and created

the impressions with the intent or

knowing that plaintiffs would act or

decide not to act in reliance on such

information and impressions;

(f) Plaintiffs did rely on the information

supplied and impression created by

Mobil; and

(g) Such reliance caused damage to each of

the plaintiffs, in amounts to be proven

at trial.

104. The conduct of Mobil described herein was

attended by circumstances of fraud, malice and/or constituted

misconduct purposely or heedlessly and recklessly committed

without regard to its consequences or (0 the rights, interests,

and feelings of plaintiffs.

WHEREFORE, each plaintiff on behalf of himself,

herself, and all others whom he or she represents herein prays

for judgment in favor of the named plaintiffs and the plaintiff

class and against Mobil Oil Corporation upon this Third

Claim for Relief, awarding each plaintiff such damages as are

shown hereafter to have been proximately and directly caused

by the negligent misrepresentations of Mobil Oil Corporation;

awarding each plaintiff exemplary damages as against Mobil

Oil Corporation in an amount sufficient to punish Mobil Oil

Corporation and deter it and others_fiom similar wrongful

A34

conduct in the future-awarding each plaintiff such equitable

and/or declaratory relief as may be necessary to restore each

to his or her rightful employment status and all other

attendant rights and interests or their equivalent; awarding

plaintiffs their costs incurred in the course of this action,

including expert witness and attorneys’ fees in accordance

with applicable law together with prejudgment, moratory, and

postjudgment interest in accordance with applicable law; and

awarding such other reiief as is necessary and appropriate to

remedy the harms inflicted by defendant Mobil Oil

Corporation upon plaintiffs.

FOURTH CLAIM FOR RELIEF

(Negligent Misrepresentation Against

Mobil Oil Corporation Only)

105. Paragraphs 1 through 76 of the General

Allegations and paragraphs 88, 90 and 91 of the Second

Claim for Relief are incorporated herein by this reference and

are made a part hereof as though fully set forth.

106. In accordance with Colo. R. Civ. P. 8(e)(2),

and in the alternative to the allegations contained in

paragraphs 92 and 93 of the Second Claim for Relief,

plaintiffs allege as follows:

(a) Mobil gave false information and

created in plaintiffs false impressions

concerning plaintiffs’ employment and

retirement rights;

(b) Mobil gave such false information and

created such false impressions in the

(c)

(d)

(e)

(f)

(g)

A35

course of Mobil's activities as an

employer of plaintiffs;

Mobil gave the information to

plaintiffs and created the impressions

in plaintiffs for the guidance and use of

plaintiffs in making decisions regarding

their employment and retirement;

Mobil was negligent in the

communications alleged herein;

Mobil gave the information and created

the impressions with the intent or

knowing that plaintiffs would act or

decide not to act in reliance on such

information and impressions;

Plaintiffs did rely on the information

supplied and impressions created by

Mobil; and

Such reliance caused damage to each of

the plaintiffs, in amounts to be proven

at trial.

107. The conduct of Mobil described herein was

attended by circumstances of fraud, malice and/or constituted

misconduct purposely or heedlessly and recklessly committed

without regard to its consequences or to the rights, interests,

and feelings of plaintiffs.

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WHEREFORE, each plaintiff on behalf of himself,

herself, and all others whom he or she represents herein prays

for judgment in favor of the named plaintiffs and the plaintiff

class and against Mobil Oil Corporation upon this Fourth

Claim for Relief, awarding each plaintiff such damages as are

shown hereafter to have been proximately and directly caused

by the negligent misrepresentations of Mobil Oil Corporation;

awarding each plaintiff exemplary damages as against Mobil

Oil Corporation in an amount sufficient to punish Mobil Oil

Corporation and deter it and others from similar wrongful

conduct in the future; awarding each plaintiff such equitable

and/or declaratory relief as may be necessary to restore each

to his or her rightful employment status and all other

attendant rights and interests or their equivalent; awarding

plaintiffs their costs incurred in the course of this action,

including expert witness and attorneys’ fees in accordance

with applicable law together with prejudgment, moratory, and

postjudgment interest in accordance with applicable law; and

awarding such other relief as is necessary and appropriate to

remedy the harms inflicted by defendant Mobil Oil

Corporation upon plaintiffs.

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FIFTH CLAIM FOR RELIEF

(Civil Conspiracy Against Mobil and Plan)

108. Paragraphs | through 107 of the General

Allegations are incorporated herein by this reference and are

made a part hereof as though fully set forth.

109. With the intent of promoting or facilitating the

commission of various unlawful and wrongful acts --

including those alleged hereinabove, specifically including but

not limited to acts of fraud and deceit and violation of

plaintiffs’ federal statutory and state common law rights --

defendants agreed with each other and/or with other persons,

including John and/or Jane Does and Doe Entities, that they,

or one or more of them, would engage in such unlawful and

wrongful acts.

110. In the pursuit of such agreement, defendants

and others engaged in a civil conspiracy and, in pursuit of that

conspiracy, Mobil or one or more other persons and/or

entities with whom it conspired, performed overt acts.

including but not limited to the acts of fraud and deceit

alleged hereinabove.

L111. This civil conspiracy has proximately caused

damages to each of the plaintiffs, the amounts of which

damages will be proven at trial.

112. The formation and execution of this civil

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and each of them to an award of punitive damages against

each of the defendants.

WHEREFORE, each plaintiff on behalf of himself,

herself, and all others whom he or she repregents herein prays

for judgment in favor of the named plaintiff and the plaintiff

class and against Mobil Oil Corporation and the Retirement

Plan of Mobil Oil Corporation upon this Fifth Claim for

Relief, awarding each plaintiff such damages as are shown

hereafter to have been proximately and directly caused by the

tortious conduct of defendants; awarding each plaintiff

exemplary damages against defendants in amounts sufficient

to punish defendants and deter them and others from similar

wrongful conduct in the future; awarding each plaintiff such

equitable and/or declaratory relief as may be necessary to

restore each to his or her rightful employment status and all

other attendant rights and interests or their equivalent;

awarding plaintiffs their costs incurred in the course of this

action, including expert witness and attorney fees in

accordance with applicable law, together with prejudgment,

moratory, and postjudgment interest in accordance with

applicable law; and awarding such other relief as is necessary

and appropriate to remedy the harms inflicted by defendants

upon plaintiffs.

SIXTH CLAIM FOR RELIEF

(Interference with Contractual

Rights Against Mobil)

113. Paragraphs 1 through 76 of the General

Allegations are incorporated herein by this reference and are

made a part hereof as though fully set forth.

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114. Mobil had actual knowledge of plaintiffs’

contractual rights and rights in the nature of contractual rights

in respect to the Plan. Mobil had such knowledge during all

times material to this Claim for Relief.

115. By its conduct, as alleged hereinabove, Mobil

intentionally and willfully interfered with plaintiffs'

contractual rights, their rights in the nature of contractual

rights, and their relationship with the Plan, and Mobil

intentionally and willfully defeated and diminished plaintiffs’

rights in the Plan and benefits attendant thereto. Mobil's

conduct constitutes the tort of intentional interference with

contractual rights and business relationships in that, inter

alia, Mobil induced and/or manipulated the Plan to defeat or

diminish the rights of the plaintiffs in the Plan.

116. As a direct and proximate result of Mobil's

intentional interference with plaintiffs’ contractual and

business rights and relationships, plaintiffs have suffered

damages each in an amount to be determined at trial.

117. The conduct of Mobil described herein was

attended by circumstances of fraud and/or malice, and/or

constituted misconduct purposely or heedlessly and recklessly

committed without regard to its consequences or to the rights

and interests of plaintiffs.

WHEREFORE: each plaintiff on behalf of himself,

herself, and all others whom he or che represents herein prays

for judgment in favor of the named plaintiffs and the plaintiff

Class and against Mobil Oil Corporation upon this Sixth Claim

for Relief, awarding each plaintiff such damages as are shown

hereafter to have been proximately and directly caused by the

A40

tortious conduct of Mobil Oil Corporation; awarding each

plaintiff exemplary damages against Mobil Oil Corporation in

an amount sufficient to punish Mobil Oil Corporation and

deter it and others from similar wrongful conduct in the

future; awarding each plaintiff such equitable and/or

declaratory relief as may be necessary to restore each to his

or her rightful employment status and all other attendant

rights and interests or their equivalent; awarding plaintiffs

their costs incurred in the course of this action, including

expert witness and attorney fees in accordance with applicable

law, together with prejudgment, moratory, and postjudginent

interest in accordance with applicable law; and awarding such

other relief as is necessary and appropriate to remedy the

harms inflicted by defendant upon plaintiffs.

PLAINTIFFS HEREBY DEMAND

TRIAL TO A JURY OF SIX

ON ALL CLAIMS SO TRIABLE.

A4l

DATED this 18th day of October, 1989.

Respectfully submitted,

PRYOR, CARNEY AND JOHNSON, A

Professional Corporation

By:/s/ Rodney R. Patula

Peter W. Pryor, #1583

W. Randolph Barnhart, #5186

Thomas L. Roberts, #5304

Rodney R. Patula, #5872

Peter H. Zlemke, #16274

6200 S. Syracuse Way, #400

Englewood, CO 80111

(303) 771-6200

Attorneys for Plaintiffs

Plaintiffs’ Addresses:

c/o Their Counsel Of Record

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.