Osberg v. Foot Locker, Inc.
907 F. Supp. 2d 527
S.D.N.Y.2012Background
- Foot Locker converted its defined benefit pension to a cash balance plan in 1996 during financial difficulties; Osberg was a store manager affected by the change.
- The cash balance opening balances were calculated by discounting future values at 9% and applying mortality adjustments, creating wear-away where pre-1996 benefits exceeded cash balance value for years.
- Participants could choose either a lump sum or an annuity at retirement; Osberg ultimately elected a lump sum based on the pre-1996 plan.
- The SPD stated the accrued benefit was the greater of the pre-1996 amount or the cash balance, but Osberg’s lump sum was smaller than the pre-1996 entitlement.
- Some board members were unaware of wear-away and had considered but rejected plans that would overtly freeze benefits; there is no evidence of a viable alternative plan that would have favored Osberg.
- Amara clarified that SPD claims are not contracts and that equitable relief requires a showing of actual harm; the court applied this framework in ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Count Three time-barred? | Osberg alleges ERISA SPD misstatement; Amara does not convert SPD into a contract. | SPD claims treated as contract claims; statute of limitations longer than three years. | Count Three time-barred |
| Whether actual harm is shown for equitable relief | Harm from wear-away and misrepresentation justifies equitable relief. | Harm is speculative; no proven economic harm from the change. | No triable evidence of actual harm; relief denied |
| Whether surcharge or reformation are appropriate | Surcharge/reformation possible due to fiduciary breach or contract error. | No actual harm shown; remedies unactionable without harm. | Not supported by record; not awarded |
| Impact of spoliation evidence on summary judgment | Missing benefits department files could reveal alternative plan impacts. | Spoliation does not establish harm or causation; not needed for judgment. | Spoliation outcome moot; judgment unaffected |
Key Cases Cited
- Amara, Cigna Corp. v. Amara, 131 S. Ct. 1866 (U.S. 2011) (equitable relief requires showing of harm; SPD not a contract)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden on movant to show absence of genuine issues)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (genuine disputes over material facts necessary to defeat summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (non-movant must present more than speculative doubt to survive summary judgment)
- Romero v. Allstate Corp., 404 F.3d 212 (3d Cir. 2005) (limits on limitations analysis under ERISA-related claims)
- Pearson v. Voith Paper Rolls, Inc., 656 F.3d 504 (7th Cir. 2011) (harm requirement; speculative damages not enough for relief)