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BOCK v. ALLIED WASTE INDUSTRIES

April 14, 2003

NORMAN R. BOCK, JR., PLAINTIFF, VS. ALLIED WASTE INDUSTRIES, INC., INDIVIDUALLY AND AS PLAN ADMINISTRATOR AND FIDUCIARY, AND ALLIED WASTE INDUSTRIES, INC. SEPARATION BENEFITS PLAN, ITS PLAN ADMINISTRATOR AND COMMITTEE, DEFENDANTS.


The opinion of the court was delivered by: John T. Elfvin, Senior District Judge.

MEMORANDUM and ORDER*fn1

Plaintiff commenced this action against his former employer, Allied Waste Industries, Inc. ("Allied"), pursuant to section 502 of the Employee Income Retirement Security Act ("ERISA"), 29 U.S.C. § 1132, seeking payment of benefits that he alleges have been denied to him by Allied's Benefits Administrator.*fn2 Presently before the Court is Allied's motion for summary judgment. For the reasons stated hereinbelow, defendant's motion will be granted.

The facts in this case are largely undisputed.*fn3 Bock was an employee of Browning-Ferris Industries, Inc. ("BFI") when it was acquired by Allied on July 31, 1999. At the time of the acquisition, BFI had been providing waste management services to Ford Motor Company ("Ford") pursuant to a three-year "Total Waste Management" ("TWM") contract — effective from May 1, 1997 to April 30, 2000. Pursuant to such contract, certain BFI employees — including Bock — worked at various Ford facilities providing on-site waste management supervision. Bock, an Integrated Waste Supervisor, performed such services at a Ford facility in the Buffalo, N.Y. area. Bock's position and job duties were not immediately affected by Allied's acquisition of BFI and he continued thereafter to work as an Integrated Waste Supervisor at the Ford facility. However, Bock subsequently learned, in February of 2000, that Allied and Ford would not be renewing the TWM contract that was to expire on April 30, 2000.*fn4 On April 6, 2000 Allied convened a company meeting among those employees who were working pursuant to the TWM contract in order to inform them of the status of such contract and to offer them a retention bonus to remain with the company. According to a memorandum that was issued at the meeting, Ford had requested that Allied provide "transition assistance" to it in conjunction with the expiration of the TWM contract in order to help Ford "prepare, issue and award competitive bids." Bock Decl., Ex. A. Accordingly, employees were offered a retention bonus by Allied to "remain with BFI until the facilities for which [they were] responsible [were] no longer the responsibility of BFI." Ibid.*fn5 Bock accepted the retention bonus and continued to work thereafter as an Integrated Waste Supervisor until he was terminated by Allied on November 30, 2000. Following his termination, Bock made a formal request for severance benefits via a January 30, 2001 letter from his attorney, Robert F. LaDuca, Jr., Esq.

According to LaDuca's letter, Bock had claimed that he was eligible to receive benefits pursuant to the provisions of Allied's Separation Benefits Plan (the "Plan"). Allied had established such in conjunction with its acquisition of BFI to, inter alia, "provide separation benefits to certain Allied and Browning-Ferris Industries, Inc. ("BFI") employees whose employment may [have been] adversely affected by the acquisition of BFI by Allied." Compl., Ex. A. The Plan's eligibility requirements are found in Article 3, which reads, in pertinent part:

"Eligibility. All employees of BFI or Allied *** shall be eligible to participate in the Plan and to receive Benefits *** if they meet the following criteria:
(c) The employee's employment is terminated during the time period beginning at the Effective Time and ending twelve months after the Effective Time by either:
(i) BFI or Allied, but only if the termination is Without Cause, or
"Additionally, all employees of BFI *** who meet the following criteria shall be eligible to participate in the Plan and to receive Benefits ***:
(a) In conjunction with the acquisition of BFI by Allied, the employee continues employment in a transitional position with BFI or Allied;
(c) The employee's employment is terminated by either:
(i) BFI or Allied, but only if the termination is Without Cause, ***." Declaration of Donna Marquette, Ex. B, § 3.01.
Thus, an employee is eligible to receive benefits under the Plan if he either (1) was terminated within twelve months of the date of the acquisition or (2) continued employment in a transitional position in conjunction with the acquisition.*fn6

Bock claimed that he was eligible to receive benefits under section 3.01 because (1) he was a "transitional employee" for nine months and (2) "prior to his termination he was advised that his position was being eliminated, and that there was no other position available for him." LaDuca Decl., Ex. A. Allied subsequently denied Bock's claim — in a March 27, 2001 letter — because, according to Allied, he had not met the eligibility requirements of the Plan. Specifically, Allied found that Bock was ineligible for benefits because (1) the date upon which he was terminated — November 30, 2000 — was not within twelve months of the effective date of the Plan and (2) he was not specifically identified as a transitional employee by Allied.*fn7 LaDuca Decl., Ex. B. Bock subsequently commenced this action against Allied in New York Supreme Court, County of Niagara. Allied removed such to this Court on September 6, 2001.

In bringing this ERISA claim, pursuant to 29 U.S.C. § 1132(a)(1)(B),*fn8 plaintiff asserts that he is entitled to benefits under the Plan because he meets the eligibility requirements of section 3.01. Specifically, he claims — as he did to Allied's Plan Administrator — that he is eligible (1) because he was "effectively terminated" prior to July 30, 2000 and (2) because he was a transitional employee. Plaintiff has also asserted a separate cause of action claiming that his denial of benefits was discriminatory and that Allied has not administered the Plan in a uniform manner as required by ERISA.

Rule 56(c) of the Federal Rules of Civil Procedure ("FRCvP") provides that summary judgment shall be entered where the movant demonstrates that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." A genuine issue of fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding whether summary judgment is appropriate this Court must take all factual inferences in favor of the non-moving party.*fn9 Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).

In support of its motion for summary judgment, Allied first argues that its decision regarding Bock's eligibility under the Plan is entitled to a deferential standard of review because the Plan gives discretionary authority to its Administrator. Allied further asserts that such review is limited in this case to one of arbitrariness and caprice. The Court agrees.

"[A] denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Thus, if the Plan confers upon the administrator the "discretionary authority to determine eligibility," the administrator's ultimate decision regarding such eligibility will not be disturbed unless it is arbitrary and capricious. Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995).

Defendant's Plan confers such discretionary authority upon its Administrator. Section 5.03 provides:

"The Administrator shall have the following rights, powers and duties:
(a) The decision of the Administrator in matters within its jurisdiction shall be final, binding, and conclusive upon Allied and upon any other person affected by such decision, subject to the claims procedure hereinafter set forth.
(b) The Administrator shall have the duty and authority to interpret and construe the terms and provisions of the Plan, to decide any question which may arise regarding the rights of employees, participants, and beneficiaries, and the amounts of their respective interests, to adopt such rules and to exercise such powers as the Administrator may deem necessary for the administration of the Plan, and to exercise any other rights, powers or privileges granted to the Administrator by the terms of the Plan." Marquette Decl., Ex. B, § 5.03 (emphasis added).
Such a clause — which confers discretion upon the Administrator to interpret and construe the provisions of the Plan — leads this Court to proceed under the highly deferential arbitrary and capricious scope of review. See Jordan v. Retirement Committee of Rensselaer Polytechnic Inst., 46 F.3d 1264, 1270-1271 (2d Cir. 1995) (citing several court decisions where language similar to that found in section 5.03 of the Plan has led courts to apply the arbitrary and capricious standard of review to administrators' decisions). Consequently, this Court shall not disturb Allied's decision regarding plaintiff's eligibility under the Plan unless it is "without reason, unsupported by substantial evidence or erroneous as a matter of law."*fn10 Boesel v. Chase Manhattan Bank, N.A., 62 F. Supp.2d 1015, 1031 (W.D.N.Y. 1999) (citation and quotation omitted). In other words, the issue for the Court is "whether [Allied's] decision was based on consideration of the relevant factors and whether there has been a clear error of judgment." Jordan, at 1271.

Applying the foregoing principles of law to the facts of this case, the Court finds that Allied's determination regarding Bock's eligibility under the Plan was not arbitrary or capricious. Plaintiff first argues that he is entitled to separation benefits because he was "effectively terminated" within twelve months after the date of the acquisition. While he admits that he was actually terminated on November 30, 2000, plaintiff contends that was effectively terminated "by virtue of the loss of the [Ford Contract] on ...


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