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April 12, 1994



The opinion of the court was delivered by: MICHAEL H. DOLINGER



 This lawsuit is being prosecuted by twenty-three former employees of RCA Global Communications, Inc. ("RCAG"). All were terminated, effective May 30, 1988, following the stock purchase of RCAG by MCI Communications Corporation ("MCIC") on May 16, 1988. *fn1" Asserting four claims under the Employee Retirement and Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"), plaintiffs complain principally that they were entitled to severance benefits under the RCAG severance benefits plan, and they seek the difference between those benefits and the payments that were in fact made to them under the less generous severance plan of MCIC. In addition, thirteen plaintiffs assert a claim under section 104 of ERISA based on defendants' alleged failure to provide requested plan documents and information in a timely fashion.

 Following the completion of discovery in this case, plaintiffs have moved for summary judgment on three of their four claims. In their turn, defendants seek summary judgment with respect to each of plaintiffs' four claims.

 A. Plaintiffs' Claims

 Plaintiffs were all long-term non-unionized employees of RCAG. They allege that RCAG was the sponsor and administrator of a severance benefits plan that was in effect at the time that the stock of RCAG was sold to MCIC. According to plaintiffs, they were informed within one to three days after the May 16, 1988 closing that they were being terminated effective May 30, 1988, and in fact they were so terminated, assertedly without ever having been called upon to perform any services for the purchasing corporation or its subsidiaries. Claiming that they were therefore entitled to benefits under the RCAG severance plan, plaintiffs allege that they were paid substantially less, on the purported basis that only the MCIC severance plan applied to them.

 Based on these events, the "Third Amended Complaint" *fn2" asserts three claims for denial of benefits. The first claim is asserted under 29 U.S.C. § 1132 (a)(1)(B) and is premised on the contention that, at the time of termination, plaintiffs were still participants in the RCAG severance plan and entitled to be paid under its terms rather than at the lower level authorized by the MCIC plan. (See Third Amended Complaint at PP 23-25) (Pltffs' Exh. 1). The second claim, based on the same denial of benefits, asserts that defendants breached their fiduciary duties under 29 U.S.C. § 1104. The remaining claim devoted to the denial of severance benefits is the fourth claim, which alleges that defendants conspired to deny plaintiffs their benefits under the RCAG plan by deliberately withholding the announcement of their termination until after the closing of the stock sale of RCAG. Based on their contention that they were, in effect, "hired to be fired," plaintiffs asserted a claim under 29 U.S.C. § 1140 for unlawful discharge or discrimination intended to interfere with their right to benefits. (See Third Amended Complaint at P 48.) In response to defendants' summary judgment motion, however, plaintiffs concede that this claim should be dismissed for lack of proof of intent. (Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment at pp. 2-3) ("Pltffs' Memo. Opp.").

 The remaining claim, asserted by thirteen of the plaintiffs, is premised on the alleged failure of RCAG to comply with a request for information made on those plaintiffs' behalf by their attorney. Plaintiffs allege that RCAG failed to turn over a number of plan documents, including "the terminal report and a board of directors' resolution of defendant RCA Globcom purporting to terminate the RCA Globcom Severance Plan" (Third Amended Complaint at P 38), in violation of 29 U.S.C. § 1024(b)(4). They therefore seek a statutory penalty of $ 100.00 per day for each day of delay in providing the requested items.

 B. The Factual Record

 Since both sides have moved for summary judgment, our principal focus must be on the extent of the undisputed factual record. The following summary reflects, in principal part, those purportedly material facts that are not in genuine dispute. To the extent that any potentially significant facts are not conceded, I will note the nature of the dispute.

 1. The Events Leading to Termination

 Until the May 16, 1988 stock purchase by MCIC, RCAG was a wholly-owned subsidiary of GE Subsidiary 21, Inc., which was in turn a wholly-owned subsidiary of General Electric Company ("GE"). (See Pltffs' Exh. 5; Defts' Exh. 2.) RCAG was thus separate and distinct from RCA Corporation -- apparently another subsidiary of GE -- although the precise relationship between the two is not specified in the record.

 The plaintiffs all worked for RCAG for many years as non-union employees in various departments of the company. *fn3" By no later than 1984 RCAG had adopted an employee severance benefit plan for non-represented salaried employees. (See Defts' Answers to Pltffs' Second Set of Interrogatories # 19.) The plan was both sponsored and administered by RCAG. (See Pltffs' Exh. 3.) Under its terms, an eligible employee would be entitled to payments measured in terms of years of service and salary, with a maximum cap on benefits of 52 weeks of pay. (Pltffs' Exh. 4 at p. 3.) According to the "Procedure" that described the RCAG "Severance Allowance for Non-Represented Employees," the benefits would be paid if the employee's "active employment" were "terminated" in any of the following circumstances:

a. Reduction in force.
b. Organizational realignment.
c. Discontinuance of an operation.
d. Loss of contract or sale of an operation to another company.
e. Lack of work.
f. Location closing.

 (Pltffs' Exh. 4 at p. 1.) *fn4" The plan also specified several situations in which benefits would not be paid to laid-off employees. As summarized by the SPD, it provided for no benefits

* * *
if you: are offered a job by a company to which RCA Global Communications, Inc. has lost a contract or sold a business operation in which you have been working at substantially [the] same or higher level of work and at a level of compensation and benefits which RCA Global Communications, Inc. deems to be substantially the same or better than you are receiving.

 (Defts' Exh. 17 at p. 2.)

 As for the amount of severance benefits payable under the plan, employees with a total service credit of two to fifteen years would be paid two weeks of base salary "for each completed year of service." (Id.) Employees with a service credit of sixteen to twenty-one years were entitled to receive three weeks of salary "for each completed year of service over 15 years up to and including 21 years." (Id.) For employees with a service credit of twenty-two or more years, the specified benefits were "52 weeks (Maximum)." (Id.)

 The plan provided that "RCA Globcom may amend or terminate this Policy at any time." (Pltffs' Exh. 4 at p. 4.) It did not, however, specify any procedure for such amendment or termination.

 On September 3, 1987 it was announced that GE and MCIC had signed a letter of intent for the sale of a GE subsidiary to MCIC. (See Defts' Exh. 1.) On October 29, 1987, GE and MCIC signed a Stock Purchase Agreement under which, subject to approval by the Federal Communications Commission, GE agreed to sell to MCIC all outstanding capital stock in a wholly-owned subsidiary identified as GE Subsidiary, Inc. 21 or "Globcom Prime." (Defts' Exh. 2 & Pltffs' Exh. 5 at P 1.1.) Globcom Prime was the parent of RCAG, which was its only subsidiary. (Id. at PP 1.1, 3.1(e).)

 The agreement specifically referred to, and included as a schedule, a list of "all Current Benefit Plans" for which any "member of the Globcom Group" was a sponsor. (Id. at P 3.1(o) & Sch. F.) Among the plans so listed was the severance benefits plan sponsored and administered by RCAG.

 In its specification of covenants, the agreement obligated the seller to accept certain undertakings with respect to some of the listed plans. Thus, section 4.3(h) stated as follows:

Globcom [RCAG] and certain other members of the Globcom Group are employers included and participating in the RCA Retirement Plan for Employees of RCA Corporation and Subsidiary Companies ("RCA Retirement Plan"), RCA Income Savings Plan ("RCA Savings Plan"), Retirement Plan for Certain International Employees of Certain Subsidiaries of RCA ("Offshore Plan"), and welfare benefit plans for employees of RCA Corporation and its present or former subsidiary companies ("RCA Welfare Benefit Plans").

 Apart from noting that Schedule F contained a listing of all of these RCA Corporation plans, section 4.3(h) specified the agreed-upon resolution of the Globcom Group's participation in those plans.

 With respect to the RCA Retirement Plan, the contract provided that, "effective at or immediately prior to the Closing Date, employee-members of the Globcom Group will no longer be eligible to participate in the RCA Retirement Plan because the Globcom Group will no longer be subsidiaries of Seller and the Seller will cause each member of the Globcom Group included in the RCA Retirement Plan to terminate the Plan as to its respective employees." (Id. § 4.3(h)(i).) *fn5" The contract addressed the RCA Savings Plan in similar terms, stating that "effective at or immediately prior to the Closing Date, employee-members of the Globcom Group will no longer be eligible to participate in the RCA Savings Plan because the Globcom Group will no longer be subsidiaries of Seller and Seller will cause each member of the Globcom Group that has adopted the RCA Savings Plan for their respective employees to terminate the Plan as to its respective employees." (Id. at P 4.3(h)(ii).)

 The contract also referred to the "RCA Welfare Benefit Plans." (Id. at § 4.3(h)(iii).) With respect to these plans, it provided that "effective at or immediately prior to the Closing Date, employee-members of the Globcom Group will no longer be eligible to participate in RCA Welfare Benefit Plans because the Globcom Group will no longer be subsidiaries of Seller and the Seller will cause each member of the Globcom Group with employees covered by RCA Welfare Benefit Plans to withdraw and terminate participation in those plans as to its respective employees." (Id.)

 Section 4.3(h) of the contract made similar reference to the so-called Offshore Plan and to certain Foreign Benefit Plans. (See id. at §§ 4.3(h)(iv) & (v).) The contract did not, however, explicitly address plans sponsored and administered by RCAG or other members of Globcom.

 In fulfillment of the requirements of section 4.3(h) of the Stock Purchase Agreement, the Board of Directors of RCAG approved a resolution dated January 21, 1988. The resolution provided that,

effective the Closing pursuant to the Stock Purchase Agreement, dated October 29, 1987, between General Electric Company and MCI Communications Corporation, this Corporation hereby withdraws from participation in and terminates as to its employees the Retirement Plan for the Employees of RCA Corporation and Subsidiary Companies, the RCA Income Savings Plan, the Retirement Plan for Certain International Employees of Certain Subsidiaries of RCA ("the Offshore Plan") and all employee welfare benefit plans administered by RCA Corporation for employees of its present or former subsidiary companies.

 (RCAG Consent of Directors, Defts' Exh. 3.) Consistent with the limited scope of section 4.3(h) of the Stock Purchase Agreement, this resolution made no reference to and did not purport to terminate or otherwise affect any plan sponsored and administered by RCAG itself. (See also Dep. of Valerian Podmolik at 105.) Moreover, prior to issuance of this resolution, the President and CEO of RCAG had advised all RCAG employees in writing that the stock purchase would require termination of participation in all RCA Corporation benefit plans, but he made no reference to terminating the RCAG plans. (See Defts' Exh. 5.)

 While the parties were waiting for FCC approval, MCIC was prohibited from exerting any direct control over RCAG. (See 47 U.S.C. § 310(d).) Nonetheless, during the interim period MCIC began to plan for the eventual takeover of RCAG. One form of planning involved decisions as to how to merge the various departments of RCAG into the pre-existing structure of defendant MCI International, Inc. ("MCII"), a subsidiary of MCIC. As part of this process, in the early Spring of 1988, MCI officials obtained lists of RCAG employees by department and, after consulting with RCAG supervisors, began to make decisions as to which of the RCAG employees would be hired by MCII and which would be let go. (See Dep. of Robert Ottman at 30; Dep. of Nicholas Marano at 59; Dep. of Jeffrey Previte at 19-20, 45-47, 54; Dep. of William Pacquin at 49, 51. See also Pltffs' Exhs. 10, 13, 14, 16-18.) It is not genuinely disputed that most of these decisions as to personnel had been finalized by the time of the closing on May 16, 1988. (See, e.g., Pltffs' Exh. 12; Marano Dep. at 25-26, 44; Ottman Dep. at 25-26; Previte Dep. at 24-25, 30; Dep. of Fred Briggs at 12, 105.) Defendants do insist that final decisions had not been made prior to the closing as to most, if not all, of the plaintiffs. (See Defts' Response to Pltffs' Request to Admit # 75; Answer to Third Amended Complaint at P 44.)

 Apart from these hiring and firing decisions, during the waiting period MCIC also decided to take certain preliminary steps to integrate the RCAG staff into its workforce structure. Thus, in evident anticipation of its acquisition of RCAG, MCIC arranged for a series of meetings by its human resources officers with RCAG employees for the purpose of explaining to them the basic terms of the various MCI employee benefit plans. (E.g., Defts' Exhs. 6-8; Pltffs' Exh. 20; EEOC Dep. of Nicholas Marano at 18-22; Marano Dep. at 20-22; Dep. of Dennis Helper at 26.) Plaintiffs all attended these meetings, which were conducted in mid-December 1987 at the RCAG offices in Piscataway, New Jersey. (Dep. of Joseph Coppolla at 5-8.) The presentations at these meetings were oral, although the MCIC representatives apparently supplemented their statements with the projection of some transparencies. Apart from summarizing the basic terms of the various MCI plans, including the MCIC severance plan, it is not clear what the MCI speakers said to the RCAG employees. In particular, there is no evidence to suggest that they advised those employees that some would be laid off after the closing or that they referred in any specific way to what benefits would be made available to those employees terminated right after the closing of the stock purchase. (See Previte Dep. at 79; Marano EEOC Dep. at 19-20.)

 In addition, during the waiting period MCIC modified its severance benefits plan in one respect. Unlike the RCAG plan, the MCIC plan calculated benefits of all employees at two weeks of pay for each completed year of service and capped benefits at 30 weeks of pay. (See Defts' Exh. 8 at p. 50.) To accommodate its anticipated acquisition of RCAG, however, MCIC amended the plan to give RCAG employees credit for time worked at RCAG. MCIC did not, however, lift the 30-week cap on benefits. (See Defts' Exh. 37 at p. 2.)

 In March 1988, apparently as a follow-up to the prior meetings with RCAG employees, MCIC sent to all RCAG employees various forms to be filled out for the purpose of enrolling, after the projected closing, in the MCIC benefit plans, as well as W-4 forms to facilitate inclusion in the MCII payroll system. (See Pltffs' Exhs. 21-22; Defts' Exh. 10.) As with other RCAG employees, the plaintiffs in this case apparently filled out the necessary forms and returned them to MCII. (E.g., Pltffs' Exh. 23.)

 The Federal Communications Commission approved the proposed stock purchase on May 6, 1988. (Pltffs' Exh. 24.) On May 16, 1988 the stock purchase closed without the need for a formal closing meeting.

 The other type of letter, the so-called termination letter, was delivered to those RCAG employees who were not to be retained by MCII. Each of the plaintiffs was given a termination letter dated either May 17 or May 18, 1988. (See Pltffs' Exh. 27.) They received those letters either on the date of the letter or within a day of two thereafter. The letters, all of which were on MCII letterhead and signed by Nicholas A. Marano, MCII's Director of Human Resources, stated: "I regret to inform you that the Company will be experiencing a reduction in staff in the next few days. As a result of the reduction, your employment with MCI International will be terminated effective May 30, 1988." The letters went on to state that the employees would receive severance benefits calculated under the MCIC severance benefits plan and would also receive extended health and life insurance coverage under the MCI plans. (Id.)

 In each instance the individual was instructed that he or she should report for career counselling starting either on May 17 or on May 19, 1988. It is undisputed that none of the plaintiffs was ever classified under the MCII job classification system, and that all were promptly funnelled to the career counselling program. It is also clear that all, with the possible exception of one or two (see Dep. of Wallace Carnegie at 59), were instructed not to report to their regular job stations and never performed any work for MCII or, indeed, for any other entity within the MCI family. There is equally no dispute that none was assigned a new salary or advised of any work station to which to report or given a job supervisor.

 As for RCAG itself, it was not dissolved. Rather, it was assigned as a subsidiary of Western Union International, itself a subsidiary of MCII. (See Defts' Reply to Pltffs' Rule 3(g) Statement at P 21.) Indeed, as recently as 1990, RCAG filed at least one corporate document with the New York Secretary of State indicating its continued existence. (Pltffs' Exh. 25.) In addition, it is apparent that as of the closing RCAG and its Board had taken no steps to terminate its own severance benefits plan. (Podmolik Dep. at 118.) There is also no evidence that after the closing either RCAG or anyone on its behalf took any action to terminate the plan.

 For the period from May 16 to 30, 1988, all of the plaintiffs were paid at their prior RCAG salary levels. For the week from May 16 through 20, each was paid by check issued by RCAG. (Pltffs' Exh. 33.) For the succeeding time period, through May 30, 1988, they were paid by checks issued by MCII. (Pltffs' Exh. 34.) Corresponding to these payments, the plaintiffs later received W-2 forms from RCAG and from MCIC for the two respective time periods between May 16 and 30, 1988. (Pltffs' Exhs. 33, 35.) As for the corporate documentation of plaintiffs' termination, these entries were made on RCAG forms, although plaintiffs' names also appear on computer printouts reflecting the MCII personnel data base. (Pltffs' Exh. 32 & Defts' Exh. 12.)

 Defendants insist that, as of May 16, 1988, plaintiffs ceased to be employed by RCAG and became instead employees of MCII. In explanation of the apparent anomalies in the method of payment and recordkeeping, defendants assert in their reply papers that RCAG paid plaintiffs for the week of May 16 because it was the middle of the MCII pay period and that MCII later reimbursed GE for these payments. (See Affidavit of Jeffrey A. Previte, sworn to April 13, 1993, at P 4; Defts' Reply to Pltffs' Rule 3(g) Statement at P 26) As for the personnel files, MCII asserts that it chose, "as a matter of convenience," to use RCAG forms to record personnel decisions concerning plaintiffs, even though, as of May 16, 1988, plaintiffs were no longer RCAG employees. (Previte Aff. at P 3.)

 2. Post-Termination Events

 Although plaintiffs ultimately received various MCI benefits, they did not obtain the more lucrative severance payments to which they claimed entitlement under the RCAG severance plan. Accordingly, twelve of them initially hired John Lankenau, Esq. to represent them in dealing with RCAG and MCI. By letter dated November 23, 1988, and addressed to RCAG, Mr. Lankenau requested, on behalf of the twelve individuals that they be paid severance benefits in accordance with the RCAG plan. By the same letter he requested provision "of all plan documents and other plan information." (Pltffs' Exh. 36 at p. 3.) In response, MCII sent counsel a letter dated January 13, 1989 and RCAG responded by letter dated January 16, 1989. (Defts' Exhs. 37, 38.) The January 13 letter, signed on behalf of the MCII Severance Pay Plan Committee, *fn6" treated the November 23 letter as a request for additional benefits from MCII and declined the request. In so doing MCII stated that the claimants' "employment with RCA Global Communications, Inc. was terminated" on May 30, 1988, and that they had received all the benefits due under the MCII plan. As for possible entitlement to RCAG benefits, the letter referred claimants to RCAG. MCII also enclosed copies of the MCII Plan and its Summary Plan Description. The January 16 letter, written on RCAG letterhead and on behalf of the RCAG Severance Allowance for Non-Represented Salaried Employees, denied plaintiffs' request for benefits under the RCAG plan. In explanation, RCAG stated that the plan "and claimants' participation in that Policy were terminated on May 16, 1988." Accordingly, it concluded, "at the time of claimants' termination of employment on about May 30, 1988, they were no longer participants in the RCA Severance Policy and had no entitlement to a benefit under that policy." (Pltffs' Exh. 38.) In addition, RCAG enclosed a copy of the RCAG "Procedure" for its severance plan, and requested Mr. Lankenau to specify whether he was seeking any additional documents.

 In response to this letter, Mr. Lankenau again wrote to RCAG, on January 25, 1989, seeking a variety of documents for the twelve original claimants and for a thirteenth claimant. (Pltffs' Exh. 44.) These included all documents relating to the claimants' termination and to the termination, if any, of the RCAG severance plan, all filings with the Department of Labor concerning the severance policy and documents reflecting the service credit of each claimant. (Id.)

 This letter provoked two responding communications, both dated February 16, 1989, one from MCII and the other from RCAG. The MCII letter (Pltffs' Exh. 39) treated counsel's earlier letter as a request for additional MCII severance benefits for the thirteenth claimant and denied the request without commenting on any possible entitlement to RCAG severance benefits. As for the RCAG letter, it too addressed the request for benefits by the thirteenth claimant and denied it on the basis that the severance plan had been terminated on May 16, 1988 and, hence, the claimant was not a participant as of May 30, 1988, when he was terminated. (Pltffs' Exh. 40.)

 On February 28, 1989, Mr. Lankenau again wrote to RCAG, appealing on behalf of the thirteenth claimant and asking for the same documents as previously requested on behalf of the first twelve claimants. (Pltffs' Exh. 43.) By letters dated May 5 and May 8, 1989, MCII and RCAG reiterated their denial of additional benefits to any of the thirteen claimants. (Pltffs' Exhs. 41 & 42.) The MCII letter again stated that claimants had been covered by the MCII plan and paid in accordance with its terms. As for RCAG, it reiterated that its plan had been terminated prior to the claimants' termination and that they were not entitled to any benefits under that plan. As for the document request, RCAG enclosed a copy of the SPD and another copy of the RCA Severance Policy "Procedure." (Pltffs' Exh. 42.)


 As noted, plaintiffs seek summary judgment on three of their claims, while defendants move for equivalent relief as to all four asserted claims. Before addressing the merits of those claims, we must first consider a defense -- or more precisely two versions of a defense -- proffered by defendants with respect to the three claims for denial of severance benefits. As argued by defendants, they are entitled to judgment on Counts I, II and IV by virtue of either claim or issue preclusion, an effect that is said to arise from a decision of the Ninth Circuit in a case entitled Pippin v. RCA Global Communications, 979 F.2d 855, No. 91-16282, unpublished Memorandum (9th Cir. Nov. 20, 1992) (text available on Westlaw, 1992 WL 344962). (See Defts' Exh. 25.)

 A. The Preclusion Defense

 To assess defendants' argument based on the Pippin decision, we must first summarize briefly the pertinent facts on which their analysis turns. As will be seen, their argument is unsupported by the facts and the law.

 In April 1989 five former employees of RCAG, all of whom resided in California, filed suit in the Northern District of California against both RCAG and MCII. Each had been terminated in the wake of the stock purchase closing under circumstances apparently comparable to those encountered by the plaintiffs in this case, and thus had been paid only under the less generous terms of the MCI severance plan.

 As reflected by the First Amended Complaint in Pippin (Pltffs' Exh. 58), the plaintiffs there asserted eight claims. The first two most closely resembled the issues involved in the Algie case. The first was based on allegations that MCII had determined prior to the closing which RCAG personnel it intended to terminate, and that MCII and RCAG had conspired to deny plaintiffs their benefits under the RCAG plan by the "purported" termination of the RCAG plan at the time of the closing. (First Amended Complaint at P 37.) In reliance on these allegations, the Pippin plaintiffs asserted that defendants had engaged in "an unlawful de facto revision to and unlawful termination of the Globcom plan for the bad faith purpose of denying specified benefits to plaintiffs, in violation of 29 U.S.C. § 1140." (Id. at P 38.) That section prohibits "any person [from] discharging, fining, suspending, expelling, disciplining or discriminating against a participant . . for exercising any right to which he is entitled under the provisions of an employee benefit plan . . . or for the purpose of interfering with the attainment of any right to which each participant may become entitled under the plan [or] this subchapter."

 In support of the plaintiffs' second claim, they asserted that they had been terminated by RCAG at the time of the closing and that each had been entitled to RCAG plan benefits. According to plaintiffs, defendants had denied them benefits on the asserted basis that they had been discharged after May 16, 1988, following the termination of the RCAG plan on May 16, 1988. Plaintiffs alleged that this stated "reason was arbitrary and capricious because Globcom knew before May 16, 1988 that plaintiffs' employment would be terminated in conjunction with the sale to MCI." (Id. at P 43.) Based on these allegations, plaintiffs asserted a separate claim for "bad faith" or "arbitrary and capricious" denial of benefits in violation of 29 U.S.C. § 1140. (Id. at P 44.)

 Plaintiffs' third claim was for age discrimination under 29 U.S.C. § 626 and California law. The fourth claim, asserted only by one plaintiff, charged discrimination on the basis of national origin, in violation of Title VII, 42 U.S.C. § 2000e-2, and California law. The balance of plaintiffs' complaint in Pippin invoked state law to assert claims of breach of contract (First Amended Complaint at PP 67-70, 72-76), breach of a covenant of good faith ...

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