The opinion of the court was delivered by: Hurley, Senior District Judge
Plaintiffs Peter Meehan, Robert Bell, Diane Judkins, Michael McCorry, Stephen Mercurio, Richard Meyer, and Judy Young ("Plaintiffs") bring this action seeking to recover payment of a "Social Security Supplement" ("Supplement") benefit under their employer's benefit plan. They argue, inter alia, that the plan was improperly amended to eliminate the Supplement. Both Plaintiffs and defendants Atlantic Mutual Insurance Company (the "Company") and Atlantic Mutual Insurance Company Retirement Plan (the "Plan") (collectively, "Defendants") have moved for summary judgment pursuant to Federal Rule of Civil Procedure ("Rule") 56. For the reasons stated below, both motions are granted in part and denied in part.
The material facts, drawn from the Complaint and the parties' Local 56.1 Statements, are undisputed unless otherwise noted.
Plaintiffs were employees of the Company until March 31, 2004. According to Defendants, the Company sold the business unit in which Plaintiffs worked to OneBeacon Insurance Group, Ltd. ("OneBeacon") on April 1, 2004. Before the sale, to prevent the loss of employment for its employees, including Plaintiffs, the Company negotiated agreements with OneBeacon to hire Company employees displaced by the sale. When the Company's operations were sold to OneBeacon, Plaintiffs began employment with OneBeacon.*fn1
The Company established and maintained the Plan to provide retirement benefits to its eligible employees. The Plan is a defined benefit pension plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq. At retirement, participants in the Plan are entitled to receive a regular retirement benefit based on specified formulas in the Plan. In addition to the normal retirement benefit, certain participants who retire at or after age 55, but before age 62 are entitled to receive the Supplement. The Supplement is an estimate of the Social Security benefit a retired participant could receive beginning at age 62, and is paid to eligible retirees from the date of retirement until the month prior to attaining age 62. According to Defendants, the purpose of the Supplement is to provide a retiree with additional retirement income during the period between the date the participant retires and the date he or she becomes eligible to receive a Social Security benefit.
The Plan gives the plan administrator, the Employee Benefit Committee, "full and absolute discretion and authority, to take all action and to make all decisions that shall be necessary or proper in order to interpret and carry out the provisions of the Plan" and "to construe the Plan and to determine all questions of fact that may arise . . . including the discretionary authority to interpret the terms of the Plan and to decide all questions concerning the eligibility of any person to participate in the Plan." (R. Doc. 1 at 125-26.)*fn2
On November 3, 2003, the Company sent all employees a document entitled "Notice of Retirement Plan Changes/Summary of Material Modifications." (R. Doc. 23 at 275.) This document provided that
Effective January 1, 2004, the Plan will be amended to . . . (2) eliminate the Social Security supplement, except for participants who are eligible for the benefit on 12/31/2003. Eligible participants are those who had five years of vesting service as of June 30, 1997 (i.e., who were hired prior to July, 1992) and who are at least age 55 as of 12/31/2003 (i.e., whose birthdate is 12/31/1948 or earlier). (Id.) It further provided that "[f]or those who remain eligible, more information regarding the Social Security supplement is contained in the Plan's SPD [Summary Plan Description]." (Id. at 279.) As of the date of this notice, all Plaintiffs met the requirements for receipt of the Supplement as stated in the SPD referenced above.
On February 9, 2004, the Employee Benefits Committee considered whether employees who were being "transferred" from the Company to OneBeacon or a private law firm should be eligible for the Supplement. According to the minutes of the meeting, the Committee determined that
Because these employees have continuing employment as a result of [the Company's] efforts to place [its] business and the employees with continuing entities, it was determined that these employees were not retiring as intended under the terms of the Plan. It was recommended and approved that those employees whose employment continues as a result of the transfer to OneBeacon or to a law firm would not be eligible for the Social Security Supplement. The Plan will be amended to this effect with an effective date of February 1, 2004.
(R. Doc. 4.) (emphasis added).
Thereafter, on February 25, 2004, the Company notified Plaintiffs via e-mail that by accepting a job offer from OneBeacon, they would "not be eligible to receive the Social Security Supplement" from the Plan. (Id. Docs. 5-11.) In response to the February 25, 2004 e-mail, one of the Plaintiffs, Rick Meyer, asked for clarification stating "I understand [the Company's] position is that I and others who move to OneBeacon are not eligible for the social security supplement. If we were not going to OneBeacon, but rather quit [the Company] and went to work elsewhere, would we be eligible for the supplement?" (Id. Doc. 12.) A Company representative responded "Yes, that is correct. If you were to quit [the Company] and then go to work for another company, you would be eligible to receive the Supplement." (Id.)
The Company formally documented and signed the 2004 amendment on May 12, 2004, effective retroactively as of February 1, 2004. Plaintiffs were not notified of the May 12th adoption because "[t]he Plan administrator considered the February 25, 2004 notice to the Plaintiffs regarding the amendment of the Supplement to satisfy the requirement to provide notice of such amendment . . . ." (Second Decl. of Martha Van Hise, dated June 13, 2007, ¶ 3.)
Subsequent to termination of their employment with the Company, Plaintiffs requested payment of the Supplement. The Plan denied their requests. On August 30, 2004, Plaintiffs appealed. This appeal was denied by the Company's Employee Benefit Committee on October 29, 2004. Having exhausted their administrative remedies, Plaintiffs initiated the instant lawsuit on July 5, 2006.
I. Summary Judgment Standard
Summary judgment pursuant to Federal Rule of Civil Procedure 56 is only appropriate where admissible evidence in the form of affidavits, deposition transcripts, or other documentation demonstrates the absence of a genuine issue of material fact, and one party's entitlement to judgment as a matter of law. See Viola v. Philips Med. Sys. of N. Am., 42 F.3d 712, 716 (2d Cir. 1994). The relevant governing law in each case determines which facts are material; "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). No genuinely triable factual issue exists when the moving party demonstrates, on the basis of the pleadings and submitted evidence, and after drawing all inferences and resolving all ambiguities in favor of the non-movant, that no rational jury could find in the non-movant's favor. Chertkova v. Conn. Gen'l Life Ins. Co., 92 F.3d 81, 86 (2d Cir. 1996) (citing Fed. R. Civ. P. 56(c)).
To defeat a summary judgment motion properly supported by affidavits, depositions, or other documentation, the non-movant must offer similar materials setting forth specific facts that show that there is a genuine issue of material fact to be tried. Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996). The non-movant must present more than a "scintilla of evidence," Delaware & Hudson Ry. Co. v. Consolidated Rail Corp., 902 F.2d 174, 178 (2d Cir. 1990) (quoting Anderson, 477 U.S. at 252), or "some metaphysical doubt as to the material facts," Aslanidis v. U.S. Lines, Inc., 7 F.3d 1067, 1072 (2d Cir. 1993) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)), and cannot rely on the allegations in his or her pleadings, conclusory statements, or on "mere assertions that affidavits supporting the motion are not credible." Gottlieb v. County of Orange, 84 F.3d 511, 518 (2d Cir. 1996) (internal citations omitted).
The district court considering a summary judgment motion must also be "mindful of the underlying standards and burdens of proof," Pickett v. RTS Helicopter, 128 F.3d 925, 928 (5th Cir. 1997) (citing Anderson, 477 U.S. at 252), because the evidentiary burdens that the respective parties will bear at trial guide district courts in their determination of summary judgment motions. Brady v. Town of Colchester, 863 F.2d 205, 211 (2d Cir. 1988). Where the non-moving party will bear the ultimate burden of proof on an issue at trial, the moving party's burden under Rule 56 will be satisfied if he can point to an absence of evidence to support an essential element of the non-movant's claim. Id. at 210-11. Where a movant without the underlying burden of proof offers evidence that the non-movant has failed to establish her claim, the burden shifts to the non-movant to offer "persuasive evidence that [her] claim is not 'implausible.' " Id. at 211 (citing Matsushita, 475 U.S. at 587).
II. The Arbitrary and Capricious Standard of Review Applies to the Company's Denial of Plaintiffs' Claim for Payment of the Supplement
Before reaching the merits of the parties' arguments regarding the Company's decision to deny Plaintiffs the Supplement, the Court must first address the threshold issue of what standard of review applies to the Company's determination. In Firestone Tire and Rubber Co. v. Bruch, the Supreme Court held that "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." 489 U.S. 101, 115 (1989); see also Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d Cir. 1999). If such discretion is given, a district court must review the administrator's denial of benefits deferentially, and may reverse only if the arbitrator's decision was arbitrary and capricious. See Kinstler, 181 F.3d at 249.
Plaintiffs concede that the Plan grants the Company "discretionary authority to interpret the terms of the Plan and to decide all questions concerning the eligibility of any person to participate in the Plan." (R. Doc. 1 at 125-26.) Nevertheless, they argue that de novo review is appropriate under an exception to the arbitrary and capricious rule which applies when a plaintiff demonstrates that that administrator had an actual conflict of interest and that such conflict in fact "affected the reasonableness of the administrator's decision." Whitney v. Empire Blue Cross & Blue Shield, 106 F.3d 475, 477 (2d Cir. 1997) (citations and internal quotation marks omitted). The burden of proof on these two requirements falls to the plaintiff. See Pulvers v. First UNUM Life Ins. Co., 210 F.3d 89, 92 (2d Cir. 2000). "If the court finds that the administrator was in fact influenced by the conflict of interest, the deference otherwise accorded the administrator's decision drops away and the court interprets the plan de novo." Sullivan v. LTV Aerospace & Defense Co., 82 F.3d 1251, 1256 (2d Cir. 1996). If the plaintiff cannot carry this burden, any conflict the administrator has is simply one more factor to be considered in determining whether the challenged decision was arbitrary and capricious. Pulvers, 210 F.3d at 92.
Here, Plaintiffs argue that the Company operated under an inherent conflict of interest in making its determination because: (1) it had a financial interest in the outcome of the Supplement decision as "the Plan funds the Supplement from its own revenues" (Pls.' Mem. in Supp. at 4), and (2) "the Plan was in fact influenced by the conflict of interest." (Id.) With respect to the latter, Plaintiffs contend that such influence can be inferred from the Plan's conduct which included a blatantly incorrect reading of § 15.1 [of the Plan], the failure to amend the Plan in a timely manner so that any amendment would be in effect when Plaintiffs accepted employment from OneBeacon, the Plan's documents indicating Plaintiffs were eligible for the Supplement, and the Plan's failure to provide any notification of the change in Plan benefits in violation of ERISA regulations. (Id. at 4-5.) The Court finds Plaintiffs' arguments to be without merit.
The Second Circuit has repeatedly held that the fact that a defendant "served as both plan administrator and plan insurer, although a factor to be weighed in determining whether there has been an abuse of discretion, is alone insufficient as a matter of law to trigger stricter review." Pulvers, 210 F.2d at 92 (citation and internal quotation marks omitted). Therefore, Plaintiffs' allegations that the Company had a conflict of interest solely because of its financial interest does not justify application of a de novo standard of review.
As for Plaintiffs' claims of actual bias, Plaintiffs mistakenly conflate the Company's denial of their claims with actual evidence of bias. In other words, Plaintiffs' argument is that because the Company's decision was unreasonable, it must have been influenced by a conflict of interest. The Second Circuit, however, requires a plaintiff to show that "the administrator was in fact influenced by the conflict of interest." Id. (emphasis in original) (citation and internal quotation marks omitted). Aside from speculation, Plaintiffs point to no evidence that the conflict of interest in fact affected the Company's decision. Accordingly, the Court finds that the arbitrary and capricious standard of review applies.
Under the arbitrary and capricious standard of review, the Court may overturn a decision to deny benefits only if it is "'without reason, unsupported by substantial evidence or erroneous as a matter of law.'" Kinstler, 181 F.3d at 249 (quoting Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir. 1995)). This scope of review is narrow and the Court is not permitted to substitute its own judgment for that of the decision maker. Pagan, 52 F.3d at 442.
III. Whether the Company's Denial of Benefits was Arbitrary and Capricious
Plaintiffs present several arguments in support of their motion and in opposition to Defendants' motion. The Court ...