# Supplemental Brief — Pietrowski v. Conkright (No. 08-826)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Supplemental Brief
- **Published:** January 1, 2008

## Text

| “Stipreme Court U.S]

FILED

MAY 1 2 2009

OFFICE OF THE CLERK

Nos.

Supreme Court of the Anited States

MATTHEW D. ALFIERI, ET AL.,
Petitioners,
AND

KENNETH PIETROWSKI, ET AL.,
Petitioners,

SALLY CONKRIGHT, ET AL.,
Respondents.

On Petition for a Writ of Certiorari
to the United States Court of Appeals
for the Second Circuit

SUPPLEMENTAL BRIEF FOR PETITIONERS

BRENDAN S. MAHER

PETER K. STRIS

STRIS & MAHER LLP

1920 Abrams Parkway, #430
Dallas, Texas 75214

(214) 224-0091

SHAUN P. MARTIN
UNIVERSITY OF SAN DIEGO
SCHOOL OF LAW

5998 Alcala Park

San Diego, California 92110
(619) 260-2347

: , ,
Counsel for Pretrowski, etal

MICHAEL K. KELLOGG
Counsel of Record
GREGORY G. RAPAWY

KELLOGG, HUBER, HANSEN,

TODD, EVANS & FIGEL,
P.L.L.C
1615 M Street. N.W., Suite
Washington, D.C. 20036

(292) 326-7900

ROBERT H. JAFFE

MARK B. WATSON

ROBERT H. JAFFE &
ASSOCIATES, PLA

& Mountain Avenui

Soringfield, New Jersey O07

465

Alft

(973) 467-:

(Counse for

OS |]

AMENDED LIST OF
PARTIES TO THE PROCEEDINGS BELOW

The petition for a writ of certiorari in No. 08-803
correctly identified all the parties that participated
in the proceedings below but did not separately set
forth those specific individuals who are petitioners
here and who are seeking relief from the Second
Circuit’s decision below. Those 14 individuals are:

Matthew D. Alfieri
Lynn Barnsdale

Bruce D. Craig
Richard C. Crater
John L. Crisafulli
Charles R. Drannbauer
James D. Gagnier
Carol E. Gannon
Janice R. Heiler
Gerald A. Leonardo, Jr.
Andrew C. Matteliano
Walter J. Petroff
Irshad Quershi

Joseph E. Wright

In all other respects, the lst of parties

certiorari petition Is correct

i

TABLE OF CONTENTS

Page
AMENDED LIST OF PARTIES TO THE
ew ORD ES | ree 1
eg 8s) ree ll
ARGUMENT:
I. KENNEDY UNDERMINES THE DECI-
SION OF THE COURT OF APPEALS .......... 3

Il. KENNEDY PROVIDES AN_ ADDI-
TIONAL REASON FOR PLENARY
REVIEW ...........- pee cian rieiniicah den le wencuaboumboacconsines 9

ide eco Navseed <vervecaduvweaeevevasieusi 10

lll
TABLE OF AUTHORITIES

CASES
Bormann v. AT&T Communications, Inc.,

875 F.2d 399 (2d Cir. 1989)

Brandon v. Travelers Ins. Co., 18 F.3d 1321
A at cs |

Cuyler v. Sullivan, 446 U.S. 335 (1980)..................... 8
Egelhoff v. Egelhoff, 532 U.S. 141 (2001)
Finz v. Schlesinger, 957 F.2d 78 (2d Cir. 1992).........6

Kennedy v. Plan Administrator for DuPont
Sav. & Inv. Plan, 129 S. Ct. 865 (2009)....1, 2, 3, 4,
5, 6, 7, 8, 9, 10
Laniok v. Advisory Comm. of Brainerd Mfg.
Co. Pension Plan, 935 F.2d 1360 (2d Cir.

Lawrence v. Chater, 516 U.S. 163 (1996)

Lebron v. National R.R. Passenger
513 U.S. 374 (1995)

STATUTES AND RULES

Emplovee Retirement Income Security /
1974, 29 U.S.C. 1001 et seq.:

29 U.S.C. § 1056(d)(3)............
29 U.S.C. § 1102(a)(1)

29 U.S.C. § 1102(b)(4)

29 U.S.C. § 1104(a)(1)(D)

29 U.S.C. § 1132(a)(1)(B).....

Sup. Ct. R.

Petitioners in Alfiert v. Conkright, No. 08-803,
and Pietrowski v. Conkright, No. 08-826 (collectively,
“the Participants”), a group of current and former
employees in the Xerox Corporation Retirement
Income Guarantee Plan (“the Plan,” a respondent),
submit this supplemental brief! to present arguments
based on this Court’s recent decision in Kennedy v.
Plan Administrator for DuPont Savings and Invest-
ment Plan, 129 S. Ct. 865 (2009). In light of Ken-
nedy, it is now clear that the court of appeals labored
under a basic misunderstanding of the appropriate
relationship between the terms of an ERISA plan
and an agreement that purports to waive rights
to receive benefits under the terms of the plan. In
Kennedy, this Court held that such a waiver cannot
be given effect when doing so would contravene
ERISA’s several textual directives that benefits be
paid according to the documents that comprise the
plan. The Court's reasoning further relied on the
policy concern those directives embody: a strong fed-
eral interest in uniform and efficient plan interpreta-
tion without reference to extraneous documentation
that must be evaluated under contestable standards.

ERISA’s text is equally controlling in this case. As
challenged here, the judgment of the court of appeals
rests on its conclusion (contrary to that of the district
court) that certain reduction-in-force agreements
signed by the Participants waived all claims that
they held against the Plan and its administrators
(“the Plan Administrators,’ respondents). Because
of those waivers, the court of appeals held that,

|! Supplemental briefing is appropriate under this Court's

Rule 15.8 because Kennedy was handed down on January 26
2004, and therefore was not available at the time of the Partic-
pants’ last filing ix. this docket on December 23, 2008

~~

2

even though the Plan Administrators had previously
violated ERISA by paying lower benefits than the
controlling plan documents require (a violation that
respondents do not now dispute), the Participants
now have no remedy for that violation, and the Plan
and its Administrators may continue to pay the Par-
ticipants lower benefits than the applicable documents
specify. That is just the opposite of what ERISA, as
interpreted in Kennedy, requires.

The rule adopted by the court of appeals also runs
contrary to ERISA’s policies as explained in Kennedy.
That rule contemplates that, before determining
what benefits to pay a plan participant or benefici-
ary, plan administrators will not only seek out and
construe termination agreements between participants
and their employers for waivers of ERISA rights, but
also determine whether those waivers were knowing
and voluntary. Such a lengthy and uncertain process
will impede the timely collection of benefits — or,
alternately, will result in arbitrary enforcement of
walvers in a limited set of cases against only some
participants and beneficiaries.

This Court should grant the petitions for a writ
of certiorari, vacate the decision below insofar as
the court of appeals held that the Participants had
waived their claims, and remand that aspect of the
case for reconsideration in light of Kennedy. In the
alternative, Kennedy provides an additional reason for
plenary review of the decision below, as the decision
of the court of appeals now conflicts with a recent
decision of this Court on a question of nationwide
importance.

3

I. KENNEDY UNDERMINES THE DECISION
OF THE COURT OF APPEALS

In Kennedy, this Court confronted the question
whether a plan administrator should give effect toa
waiver of rights to receive pension benefits under
an ERISA plan as a beneficiary when that waiver is
not a qualified domestic relations order of the kind
described in 29 U.S.C. § 1056(d)(3). Before the Court
granted review on that question, the majority view
among the circuits had been that such waivers
should be given effect if the waiver had been volun-
tary as evaluated under federal common law. See,
e.g., Brandon v. Travelers Ins. Co., 18 F.3d 1321,
1326-27 (5th Cir. 1994), cited in Kennedy, 129 S. Ct.
at 870 n.5. In Kennedy, however, the Court rejected
that view and held that a plan administrator must
instead pay benefits according to the terms of the
plan itself, regardless of whether the person seeking
payment has previously signed a waiver that pur-
ports to waive the right to receive those benefits. See
129 S. Ct. at 874-78.

In reaching that conclusion, the Court rehed pri-
marily on the text and structure of ERISA. It found
controlling the statute’s instructions that a plan
must be “established and maintained pursuant to a
written instrument,” 29 U.S.C. § 1102(a)(1), which
must “specify the basis on which payments are made

from the plan,” id. § 1102(b)(4), and that the
plan administrator must act “in accordance with the
documents and instruments governing the plan,” 7d.
§ 1104(a)(1)(D), save where those documents conflict
with ERISA itself. Kennedy, 129 S. Ct. at 875. The
Court also rehed upon ERISA’s policy of creating
“a uniform administrative scheme, {with] a set of
standard procedures to guide processing of claims

4

and disbursement of benefits.” /d. (quoting Egelhoff
v. Egelhoff, 5382 U.S. 141, 148 (2001)) (internal
quotation marks omitted, alteration in original). That
policy disfavors “enquiries into nice expressions of
intent” and protects the processing of claims from
invasion by “a multitude of external documents” or
htigation “over the meaning and enforceability of
purported waivers.” /d. at 875, 876 (internal quota-
tion marks omitted).

The court of appeals decided this case without
the benefit of Kennedy's exposition of the controlling
principles. Had it given those principles proper
weight, it would not have reached the same result.
Here, just as in Kennedy, a purported waiver un-
moored in the statute or the plan itself has been in-
terposed as a barrier to the payment of benefits that
would otherwise be required under the terms of the
plan (and that other plan participants will receive).
The court of appeals held that the waiver was en-
forceable because it was knowing and voluntary —
in that court’s view, the waiver was clear on its face,
the plaintiffs who signed had had time to consider
their decision and the opportunity to consult with an
attorney, and they received consideration for the
waiver. See Pet. App. 19a-20a.- The court reached
that conclusion despite its prior holding (unchallenged
in this Court) that the Plan Administrators had badly
misread the terms of the pre-1998 plan and had
failed to pay the Participants the benefits to which,
under the Plan documents, they were entitled. See
id. at Oa.

Citations to “Pet. App. refer to the appendix to the petition
in Ne

» OCOS-MOD

5

The decision below thus recognizes the purported
waivers signed by the Participants as a “basis on
which payments [may be] made ... from” — or not
made from, which amounts to the same thing — “the
plan,” 29 U.S.C. § 1102(b)(4), and as an unwritten
exception to the respondent Administrators’ obliga-
tien to act “in accordance with the documents and
instruments governing the plan,” rd. § 1104(a)(1)(D).
It therefore cannot be reconciled with a “straight-
forward rule of hewing to the directives of the plan
documents,” Kennedy, 129 S. Ct. at 875, to determine
what benefits to pay to whom. Further, this case,
like the one in Kennedy, is an “action ... to recover
benefits due ... under the terms of |the] plan,” 29
U.S.C. § 1132(a)(1)(B), a cause of action that “rein-
forces the directive” that a plan administrator must
determine the benefits that are due by reference to
the plan itself, Kennedy, 129 8S. Ct. at 875. The court
of appeals has held, and the Plan Administrators do
not now dispute, that they have failed to pay benefits
due under the Plan. See Pet. App. 6a.

Moreover, the rule applied by the court of appeals
creates just the same impediments to smooth and
efficient plan administration that this Court found
unacceptable in Kennedy. Consider the case of a
former Xerox emplovee who was not a plaintiff in
this case, but to whom the Plan Administrators have
applied their phantom-account offset. The district
court expressed the belief that the offset could not
lawfully be applied to such an individual, calling it
“beyond dispute ... that use of a ‘phantom account’
in the manner found unlawful by the Second Circuit
decision violates ERISA and cannot be used by any
plan.” and observing that “fijt is presumed that no
plan administrator would knowingly violate ERISA.”

6

Id. at 47a n.9. Yet, under the rule applied by
the Second Circuit, the Plan Administrators could
still apply their unlawful offset if (but only if) the
employee had knowingly and voluntarily waived his
or her rights in the interim. To make that deter-
mination, the Plan Administrators would need to
determine that the waiver had been made in the
first place; determine whether by its terms it encom-
passed the claim that they had violated ERISA by
applying the phantom-account offset contrary to the
plan documents; and apply a nonexhaustive multi-
factor test to determine whether the waiver had been
knowing and voluntary. See td. at 15a-16a (the court
of appeals, citing Finz v. Schlesinger, 957 F.2d 78,
82 (2d Cir. 1992), which applied six factors); id. at
35a-36a (the district court, citing Bormann v. AT&T
Communications, Inc., 875 F.2d 399, 402-03 (2d Cir.
1989), which applied eight factors).*

Doing these things is not straightforward, as the
history of this case demonstrates. The language of
the waivers provided that the “consideration set forth
in this Release [was] in addition to anything of value
to which [a Participant is] entitled by law or Xerox
policy.” /d. at 80a (internal quotation marks omit-
ted). The district court and the court of appeals dis-
agreed about whether this language made the waiv-
ers ambiguous. The district court correctly observed

’ As set forth in the petitions (No. O&8-803, at 8-11; No. 08-826,
at L&), the court of appeals departed trom yvoverning principles
of federal common law tn its application of the factors set forth
in Fkinz. in Laniok v. Advisory Commuttee of Brainerd Manufac
turing Co Pension Plan, 935 F.2d 1360 (24 Cir 1991), and in
other cases. Clanfication of these principles remains of sutfi-
cient national importance to warrant plenary review. Aennedy,
however, calls sharply into question whether those principles

were even properly invoked in this cass

-~]

‘

that this language “suggests that [the Participants]
did not waive any then-pending claims alleging an
entitlement to some particular benefits,” id. at 40a,
and that, in light of the court of appeals’ earlier
holding, the Participants “were ‘entitled by law’ not
simply to receive some pension benefits, but to have
their benefits calculated without any reduction at-
tributable to a ‘phantom’ account,” id. at 38a. The
court then applied the established rule that “any
ambiguity [in the waivers] should be resolved against
Xerox, which drafted” them. id. at 39a, and held that
they did not bar the Participants’ claims.

The court of appeals, however, disagreed, reasoning
that the language on which the district court relied
dealt only with “the existence of consideration ade-
quate to render a release enforceable,” and not to “the
scope of claims thereby released.” J/d. at 17a-18a. It
apparently believed that, so long as the Plan Admin-
istrators had not “denfied] [the Participants] any
and all pension benefits,” id. at 18a, they had yiven
the Participants what they were entitled by law to
receive under the terms of the waiver. This Court
need not address the merits of that implausible con-
clusion in order to observe that federal judges dis-
agree over the proper reading of the waivers’ terms.
That disagreement is potent evidence that the court
of appeals’ rule, lke the one rejected in Kennedy,
would “destroy a plan administrator's ability to look
at the plan documents and records contorming to
them to get clear distribution instructions, without
going into court.” 129 S. Ct. at 876.

In sum, the rule apphed by the Second Circuit is
Incompatible with this Court’s intervening decision

8

in Kennedy.1 That decision is therefore an “interven-
ing development[] ... [that] reveal[s] a reasonable
probability that the decision below rests upon a
premise that the lower court would reject if given the
opportunity for further consideration”; further, “such
a redetermination may determine the ultimate out-
come of the litigation.” Lawrence v. Chater, 516 U.S.
163, 167 (1996) (per curiam). Indeed, the stark con-
trast between Kennedy's model of ERISA litigation
and the proceedings in this case demonstrates that
there is more than a “reasonable” probability of a
different result after remand. The conditions under
which this Court will vacate a decision and remand
for further consideration are thus fully met.®

4 The Participants’ argument based on Kennedy 1s properly
before this Court. The court of appeals held that the Partici-
pants’ purported waiver of their claims was knowing and volun-
tary and therefore that “the releases signed by [the Partici-
pants} are enforceable.” Pet. App. 20a. This reasoning endorsed
the proposition that the knowing-and-voluntary standard prop-
erly applies to this case under federal common law. “|Rleview
of an issue not pressed” below is consistent with this Court's
practice “so long as {that issue] has been passed upon.” Lebron
vu. National R.R. Passenger Corp., 513 U.S. 374, 379 (1995)
(internal quotation marks omitted, third alteration in original).
Similarly. the petitions for certiorari (filed before Kennedy was
decided) raise the question of the appropriate federal common
law principles that apply here. Whether any such principles
properly apply is a “predicate to an intelligent resolution” of
that question. Cuvler v. Sullivan, 446 U.S. 335, 342 n.6 (1980)
(internal quotation marks omitted)

Vacatur and remand are appropriate only in Nos. 08-803

and 08-826, and the Participants urging: vacatur include only
those individuals whom the court of appeals held had waived

their claims and who are petitioners under those two docket
numbers. Aennedy has no relevance to the questions presented
in No. O8-810 The former and current employees who are

respondents there and whose claims have not been held waived

9

ll, KENNEDY PROVIDES AN ADDITIONAL
REASON FOR PLENARY REVIEW

In the alternative, this case is an excellent vehicle
for this Court to clarify immediately that its holding
in Kennedy prohibits the federal courts from giving
effect to putative federal common law waivers not
merely in the specific context of domestic relations,
but whenever such a waiver is interposed as a bar-
rier to the payment of benefits according to the terms
of ERISA plan documents. The principles set forth in
Kennedy apply to both contexts, but it would blink
reality to suggest that employers and plans around
the country will accept Kennedy in cases unrelated to
domestic relations without further litigation.

This case presents that broadly significant ques-
tion in a particularly important fact pattern. Layoffs
of the kind that occurred here are regrettably com-
mon in today’s economic environment, as are term1-
nation agreements that purport to waive all claims
an employee may have against a former employer in
exchange for a severance package, salary continu-
ance, or other financial relief to soften the blow of the
lavoff. The question whether workers who are laid
off and who sign (as practically all do) a standard-
form release should obtain the benefit of a judicial
determination of the meaning of their pension plan
— or, instead, be bound by common law waiver to
a plan administrator's erroneous and unlawful con-
struction — is therefore of importance beyond the
facts of this case. See Pet. 9-11.

For the reasons set forth above, the decision of
the court of appeals conflicts with Kennedy, a recent

certainly do not seek vacatur but rather have explained in
detail why the petition tn No. O8-S10 should be denied

10

decision of this Court. Further, the appropriate ap-
plication of Kennedy to these facts is an important
question of federal law that has not been, but should
be, decided by this Court. That 1s particularly so
because of the strong federal! interest in the “nation-
ally uniform ... administration” of ERISA plans,
Egelhoff, 532 U.S. at 148. Accordingly, if this Court
chooses not to vacate and remand for further consid-
eration in light of Kennedy, plenary review is appro-
priate.

CONCLUSION

This Court should grant the petitions for a writ
of certiorari! in Nos. 08-803 and 08-826, vacate the
decision below insofar as the court of appeals held
that the Participants had waived their claims, and
remand that aspect of the case for further considera-
tion in light of Kennedy. In the alternative, those
two petitions for a writ of certiorari should be
eranted and the case should be set for argument on
the merits.

BRENDAN S. MAHER

PETER K. STRIS

STRIS & MAHER LLP

1920 Abrams Parkway, #430
Dallas, Texas 75214

(214) 224-0091

SHAUN P. MARTIN
UNIVERSITY OF SAN DIEGO
SCHOOL OF LAW

5998 Alcala Park

San Diego, California 92110
(619) 260-2347

Counsel for Pietrowski, et al.

11

Respectfully submitted.

MICHAEL K. KELLOGG
Counsel of Record

GREGORY G. RAPAWY

KELLOGG, HUBER, HANSEN,
TODD, EVANS & FIGEL,
P.L.L.C.

1615 M Street, N.W.,

Washington, D.C. 20036

(202) 326-7900

ROBERT H. JAFFE
MARK B. WATSON
ROBERT H. JAFFE &
ASSOCIATES, P.A.
8 Mountain Avenue

Springfield, New Jersev 07081

(973) 467-2246
Counsel for Alfieri, et al.

Suite 400

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386020_0949%3A4. Public record. Not legal advice.