Russell v. Harman International Industries, Inc.
773 F.3d 253
D.C. Cir.2014Background
- Patrick Russell, a former Harman employee, participated in Harman’s 401(k) plan predominantly invested in Harman stock.
- In 2007 Harman announced a proposed acquisition; the deal fell through and Harman stock declined.
- Russell alleged ERISA fiduciary breaches due to Harman agents' statements to investment firms.
- Russell sued Harman and related individuals in December 2007; he had signed a severance agreement six months earlier releasing ERISA claims.
- The severance agreement released claims arising on or before its effective date and suggested he understood and signed knowingly and voluntarily; Harman attached it to a Rule 12(b)(6) motion.
- The district court, after supplemental briefing, converted the motion to summary judgment under Rule 12(d) and granted summary judgment for Harman.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 12(d) conversion was prejudicial | Russell argues the district court violated Rule 12(d) by not allowing discovery before summary judgment. | Harman contends any error was harmless given lack of prejudice and absence of disputed material facts. | Harmless error; no prejudice shown. |
| Whether ERISA waivering is knowing and voluntary | Russell contends discovery needed to show lack of knowing/voluntary consent to waiver. | Harman asserts waiver was knowing and voluntary based on the agreement's terms and surrounding circumstances. | Assumed knowng-and-voluntary standard applies; record supports knowing and voluntary waiver; discovery futile. |
| Whether the totality-of-the-circumstances factors establish knowing/voluntary consent | Russell seeks discovery on multiple listed factors to prove lack of consent. | Most factors are apparent on the face of the agreement; others are within Russell's knowledge and context. | Court assumes standard; factors present show knowing and voluntary waiver. |
| Whether Russell could show a genuine issue of material fact absent discovery | Discovery would create a fact dispute on knowing consent. | No credible evidence suggested coercion; discovery would be futile. | No genuine issue of material fact; summary judgment appropriate. |
Key Cases Cited
- Holy Land Found. for Relief & Development v. Ashcroft, 333 F.3d 156 (D.C. Cir. 2003) (harmless error where 12(d) violation not prejudicial)
- Colbert v. Potter, 471 F.3d 158 (D.C. Cir. 2006) (harmless error analysis for 12(d) violations; prejudice required)
- Laniok v. Advisory Comm. of Brainerd Mfg. Co. Pension Plan, 935 F.2d 1360 (2d Cir. 1991) (knowing-and-voluntary ERISA waiver factors (non-exhaustive))
- Trucking Employers, Inc. v. United States, 561 F.2d 313 (D.C. Cir. 1977) (recognizes knowing-and-voluntary standard in some contexts)
- Brown v. Brody, 199 F.3d 446 (D.C. Cir. 1999) (Title VII waiver guidance informatively applied to ERISA context)