Kurt H. EICHORN; Williаm J. Huckins; T. Roger Kiang; Edward W. Landis; Orlando Napolitano, Individually and on Behalf of all others Similarly Situated; Gilbert G. Daley; Susan H. Dibona; Beth King; Michael S. Oratowski; Thomas L. Salisbury; Lawrence Walsh, Individually and on Behalf of all Others Similarly Situated; William Lawless; Russell Leppala; Gabe P. Torok; Judith B. Brugner; Kate Harris; Carole T. Johnson; Charles O. Laughlin, II; Michael A. McFarland; Barbara Oliver; Gary Patterson; Robert Prouix; William J. Schrott; Robert Michael Shepherd; Ronals A. Sokol; Joseph T. Szlasa; Diane F. Taylor; Lorraine J. Welch; Marie Zeits, Appellants v. AT&T CORP.; Lucent Technologies Inc.; Texas Pacific Group; NCR Corporation; The CIT Group, Inc.; John Doe Corporations 1-10.
No. 05-5461
United States Court of Appeals, Third Circuit
May 2, 2007
484 F.3d 644
Carmine A. Iannaccone, James P. Flynn, Lauren D. Daloisio, Epstein, Becker & Green, Newark, NJ, Counsel for Appellees AT&T Corp., Lucent Technologies, Inc. and NCR Corp.
David M. Fabian, Christine M. Gurry, Traflet & Fabian, Morristown, NJ, Counsel for Appellee, TX PAC Group.
Robert M. Leonard, Drinker, Biddle & Reath, Florham Park, NJ, Counsel for Appellee, CIT Group, Inc.
Before: FISHER, JORDAN and ROTH, Circuit Judges.
JORDAN, Circuit Judge.
This cаse is before us for the second time on appeal. In the previous appeal, Eichorn v. AT&T Corp., 248 F.3d 131 (3d Cir.), cert. denied, 534 U.S. 1014, 122 S.Ct. 506, 151 L.Ed.2d 415 (2001), we held that the plaintiffs had presented sufficient evidence of the defendants’ specific intent to interfere with their pension rights to survive summary judgment on their claims under § 510 of the Employee Retirement Income Security Act (ERISA),
I
We have previously set forth the bаsic facts in this litigation, Eichorn, 248 F.3d at 136-37, and we recite only the facts relevant to the present decision.
A
The plaintiffs are former employees of Paradyne Corporation (“Paradyne“). In 1995, Paradyne was part of AT&T Corp. (“AT&T“). AT&T reorganized that year, splitting into three parts: AT&T, Lucent Technologies, Inc. (“Lucent“), and NCR Corporation. In the course of the reorganization, AT&T transferred Paradyne to Lucent. In 1996, Lucent sold Paradyne to a business called Texas Pacific Group (“Texas Pacific“). Before that sale, the plaintiffs in this case had pension plans
The alleged basis for the plaintiffs’ ERISA claims is that the defendants entered into agreements as part of the sale of Paradyne that had the effect of canceling the plaintiffs’ bridging rights. In 1995, when Paradyne was part of AT&T, AT&T announced its intent to sell Paradyne. Recognizing the value of Paradyne‘s work force, and wanting to make Paradyne more attractive to potential buyers, AT&T announcеd a policy precluding any employee who voluntarily left Paradyne from being hired by any other division of AT&T. On June 18, 1996, Lucent and Texas Pacific signed a purchase agreement for the sale of Paradyne, and on July 31, 1996, the sale closed. The June 18 purchase agreement included a provision—referred to in this litigation as the “Pre Closing Net“—whereby Lucent promised that neither it nor any of the other former AT&T companies would hire any Paradyne employees who left Paradyne voluntarily before the sale closed and whose annual salaries were more than $50,000. On the date of the closing, Lucent signed an “employee matters agreement,” which included a paragraph—referred to in this litigation as the “Post Closing Net“—extending the provisions of the Pre Closing Net for 245 days (eight months) after the closing.
Once the sale closed, the Paradyne employees’ employment with Lucent terminated, and the “bridging period” began. Because the no-hire agreement embodied in the Pre Closing Net and Post Closing Net lasted for eight months, the Paradyne employees who made more than $50,000 annually were prevented from exercising their bridging rights.1
B
Near the time of the Paradyne sale, Kurt Eichorn and Gilbert Daley filed substantially identical class action complaints in the United States District Court for the District of New Jersey, naming AT&T, Lucent, and Texas Pacific as defendants, and asserting, inter alia, that the Pre Closing Net and Post Closing Net violated § 510 of ERISA. The actions were consolidated and, after discovery, the District Court granted the defendants’ motiоn for summary judgment, holding that the plaintiffs had not put forth sufficient evidence to create a triable issue of fact as to whether the defendants had the required intent to interfere with the plaintiffs’ bridging rights. Eichorn v. AT&T Corp., No. 96-3587, 1999 WL 33471890, at **2-6 (D.N.J. Aug. 23, 1999). On appeal, this court reversed and remanded that holding because we determined that the plaintiffs had presented sufficient circumstantial evidence to create a genuine issue of material fact regarding the defendants’ intent. Eichorn, 248 F.3d at 149-50. The panel also directed the District Court on remand to address the plaintiffs’ motions for additional discovery and for class certification. Id. at 150.
On remand, the District Court reopened discovery and allowed the plaintiffs to file a motion for class certification. The parties appear to have proceeded after remand on the assumption that the plaintiffs would be entitled to some form of compensatory damages if they succeeded in proving their ERISA claims. On May 27, 2003, over three months after the close of reopened discovery and some seven years from the start of the case, the plaintiffs submitted spreadsheets to the District Court, offering their damage calculations for the first time. The spreadsheets were prepared by plaintiffs’ counsel‘s son, Stephen Crowley, who was not offered as an expert and has no training or experience with the economics of employment benefits.
Mr. Crowley‘s calculations purported to quantify what each plaintiff would have earned in pension benefits, had he or she remainеd employed at an AT&T company after the sale of Paradyne. In performing the calculations, Mr. Crowley made various assumptions about such future events as when the plaintiffs would have retired, how their salaries would have increased had Paradyne remained part of Lucent, what choices the plaintiffs would have made with respect to their pension benefits, and what each plaintiff‘s life expectancy was. With his calculations, Mr. Crowley submitted a life expectancy chart from the “Foundation for Infinite Survival” and various statistical tables from the United States Department of Labor which, he asserted, provided part of the basis for his calculations.
The District Court accepted the plaintiffs’ belated submissions and reopened discovery again to allow the defendants to depose Mr. Crowley. After deposing Mr. Crowley, the defendants made a motion to strike his calculations and to preclude him from testifying at trial. The plaintiffs opposed the motion and argued that, if the District Court were to grant the defendants’ motion, the plaintiffs should be allowed to engage a damages expert. On November 10, 2004, the District Court granted the defendants’ motion and denied as untimely the plaintiffs’ request for leave to engage an expert.
In the course of making his initial ruling from the bench, which was later reduced to a written order, the District Judge explained that he did not believe his order would effectively end the case for the plaintiffs, because the plaintiffs might still be entitled to seek back pay and would not need the assistance of an expert to establish their entitlement to that relief. The Judge said,
at a minimum, it would appear that a back pay case can in some manner or other go to the jury. Indeed, in this type of ERISA claim, a back pay claim is normally one of the court claims which go. In short, the theory of the case is that the plaintiffs were precluded from employment because of and based upon a desire to deny them ... rights which they have under ERISA.... And therefore, in the Court‘s view, what could and would go to the jury would indeed be claims predicated upon the denial of their employment and potential back pay claims.
Further, the District Judge noted that the plaintiffs sought injunctive relief, and the Judge agreed that there was “at least а possibility” that such relief was available. Even so, he did not definitively rule on the issue, and the written order stated that “the Court does not reach the issue whether plaintiffs can quantify or establish any right to ‘back pay’ and/or equitable relief increasing plaintiff[s‘] pension benefits and reserves such issue for resolution at or before trial.” After he granted the defen-
After the reopened discovery closed, the defendants moved for summary judgment. They argued that the only relief available to the plaintiffs on their claim under
II
The plaintiffs argue that the District Court erred both in ruling that Mr. Crowley‘s proposed evidence was inadmissible and in denying them leave to present an expert in lieu of Mr. Crowley. More specifically, though the plaintiffs concede that Mr. Crowley was not qualified as an expert, they argue that no special qualifications were necessary to testify regarding future damages in this case and that Mr. Crowley‘s testimony and spreadsheets were admissible under Federal Rule of Evidence 1006 as summaries of the contents of the statistical tables he submitted. The plaintiffs also argue that the District Court‘s order denying them leave to retain an expert witness after Mr. Crowley was excluded was an abuse of discretion. Those arguments are without merit.
A
In excluding Mr. Crowley‘s evidence, the District Court was within the broad discretion afforded it under Federal Rules of Evidence 701 аnd 702 to act as a gatekeeper charged with preventing unreliable opinion testimony. Although this court has recognized that lay opinion as to technical matters may sometimes be appropriate, Asplundh Mfg. Div. v. Benton Harbor Eng‘g, 57 F.3d 1190, 1200-01 (3d Cir. 1995), we have cautioned that “Rule 701 requires that a lay opinion witness have a reasonable basis grounded either in experience or specialized knowledge for arriving at the opinion that he or she expresses.... In order to satisfy these requirements, the trial judge should rigorously examine the reliability of the lay opinion by ensuring that the witness possesses sufficient special knowledge or experience which is germane to the lay opinion of-
We also reject the plaintiffs’ argument that Mr. Crowley‘s submissions were admissible under Rule 1006. That Rule provides that “[t]he contents of voluminous writings, recordings, or photographs which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation.” Courts have cautioned that Rule 1006 is “not a backdoor vehicle for the introduction of evidence which is otherwise inadmissible,” and that the voluminous evidence that is the subjeсt of the summary must be independently admissible. Peat, Inc. v. Vanguard Research, Inc., 378 F.3d 1154, 1160 (11th Cir. 2004); see also United States v. Pelullo, 964 F.2d 193, 204-05 (3d Cir. 1992). The plaintiffs’ proffered calculations are better described as a synthesis rather than a summary of the charts and other evidence on which Mr. Crowley relied. The calculations went beyond the data they summarized and included several assumptions, inferences, and projections about future events, which represent Mr. Crowley‘s opinion, rather than the underlying information. The proposed evidence is thus subject to the rules governing opinion testimony and was properly held inadmissible. See Fed. R. Evid. 701, 702; Gomez v. Great Lakes Steel Div. Nat‘l Steel Corp., 803 F.2d 250, 258 (6th Cir. 1986) (proposed exhibit was improperly admitted because, despite being labeled “Summary of Actual Damages,” it “projected future events and economic losses, and was therefore not a simple cоmpilation of voluminous records.“); State Office Sys., Inc. v. Olivetti Corp., 762 F.2d 843, 845-46 (10th Cir. 1985) (projections of future lost profits set forth in a summary “are not legitimately admissible as summaries under Rule 1006, since they are interpretations of past data and projections of future events, not a simple compilation of voluminous records.“).
B
In denying the plaintiffs leave to engage an expert to replace Mr. Crowley, the District Court was within its power under
In this case, the reopened discovery on remand closed in January of 2003. As the defendants note, the plaintiffs were obligated under
III
Section 510 of ERISA,
Though the parties dispute the scope and application of subsections (a)(1)(B) and (a)(3), they do not suggest that any other portions of
A
The District Court held that the plaintiffs could not seek relief under
1
Subsection (a)(1)(B) provides that “[a] civil action may be brought by a par-
[T]o enforce the terms of a plan under Section 502, the participant must first qualify for the benefits provided in that plan. Rather than concerning itself with these qualifications, one of the actions which Seсtion 510 makes unlawful is the interference with a participant‘s ability to meet these qualifications in the first instance.
Tolle v. Carroll Touch, Inc., 977 F.2d 1129, 1134 (7th Cir. 1992) (citation omitted). This appears to be the view of the few courts that have squarely confronted the issue. See Strom v. Goldman, Sachs & Co., 202 F.3d 138, 142 (2d Cir. 1999) (citing Tolle); Russell v. Northrop Grumman Corp., 921 F.Supp. 143, 150 (E.D.N.Y. 1996) (citing Tolle). Other courts have implicitly taken this view by indicating in dicta that § 502(a)(3) is the provision available for enforcing a § 510 interference claim. See Millsap v. McDonnell Douglas Corp., 368 F.3d 1246, 1247 (10th Cir. 2004) (“Section 502(a)(3) of ERISA provides the plan participant with his exclusive remedies for a § 510 violation.“); Spinelli v. Gaughan, 12 F.3d 853, 856 (9th Cir. 1993) (quoting § 502(a)(3) as the enforcement mechanism for rights under § 510); Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 421 (4th Cir. 1993) (Section 510, “enforced through § 1132(a)(3) [i.e., § 502(a)(3)], provides a companion to § 1132(a)(1), which provides actions to recover benefits or clarify rights.“); Held v. Mfrs. Hanover Leasing Corp., 912 F.2d 1197, 1203 (10th Cir. 1990) (“If discharging [the plaintiff] was ‘unlawful’ under § 1140 [i.e., § 510], plaintiff was entitled to bring (and did bring) an action for declaratory and injunctive relief under
We agree with the Seventh Circuit‘s reasoning in Tolle, which follows from a straightforward reading of the statute. Subsection (a)(1)(B) provides remedies only against a defendant who has failed to comply with the terms of a benefits plan. It allows plaintiffs to collect benefits “due under the terms of the plan” or to enforce “rights under the terms of the plan.” Here, the plaintiffs have alleged that the defendants interfered with their ability to become eligible for further benefits, not that the defendants have breached the terms of the plan itself. We therefore agree with the District Court that subsection (a)(1)(B) does not provide relief for the violation of ERISA that the plaintiffs have alleged, and, accordingly, summary judgment on the issue was proper.
2
The plaintiffs argue that this Court‘s decisions in Cox v. Keystone Carbon Co., 861 F.2d 390 (3d Cir. 1988) (“Cox I“) and Cox v. Keystone Carbon Co., 894 F.2d 647 (3d Cir. 1990) (“Cox II“), and the Tenth Circuit‘s decision in Adams v. Cyprus Amax Minerals Co., 149 F.3d 1156 (10th Cir. 1998), support a different result. In this they are mistaken.
The plaintiffs’ principal argument appears to be that, although they have not alleged that the defendants violated the terms of the benefits plan, the District Court could nevertheless effectively create a violation of the plan through a decree ordering Lucent to adjust its pension records to treat the plaintiffs as if they had remained at Lucent until retirement. The plaintiffs contend that such an ordеr would result in an immediate obligation on the part of the defendants to pay the plaintiffs money that was rendered “past due” by operation of the court‘s decree, thus entitling the plaintiffs to seek relief under subsection (a)(1)(B). This bootstrap approach finds no support in the decisions the plaintiffs cite.
The Tenth Circuit‘s opinion in Adams is inapposite, as the plaintiffs in that case alleged violations of the terms of a plan rather than interference with the attainment of benefits. The court in Adams was not asked to construct a violation of an order and then treat that violation as if it were a violation of the terms of a benefit plan. The court was simply asked to construe the terms of the plan itself to determine whether the plaintiffs were eligible for the benefits they sought. Id. at 1158-62. Unlike the plaintiffs in this case, the plaintiffs in Adams alleged a violation of the terms of their former employer‘s plan and were thus clearly entitled to seek relief under
On remand, the district court held that Cox had stated a § 510 claim enforceable under
B
The District Court held that the plaintiffs were not entitled to “appropriate equitable relief” under
1
Section 502(a)(3) of ERISA,
A civil action may be brought—
(3) by a participant, beneficiary, or fiduciary
(A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or
(B) to obtain other appropriate equitable relief
(i) to redress such violations or
(ii) to enforce any provisions of this subchapter or the terms of the plan;
(emphasis added). The Supreme Court has held that the phrase “appropriate equitable relief” means only “those categories of relief that were typically available in equity” in the days of the divided bench, Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002) (quoting Mertens v. Hewitt Assocs., 508 U.S. 248, 256, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993) (original emphasis)). According to the Supreme Court, such relief includes “injunction, mandamus, and restitution, but not com-
As earlier noted, the plaintiffs sought a decree from the District Court requiring Lucent to adjust its pension records retroactively to create an obligation to pay the plaintiffs more money, both in the past and going forward. The District Court rightly saw this as being, in essence, a request for compensatory damages merely framed as an “equitable” injunction. The Court thus rightly concluded that the requested relief is not available under
2
The plaintiffs argue that the relief they seek is indistinguishable from the relief approved by the Supreme Court in Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), and, therefore, Varity and this Court‘s decisions in Cox I and Cox II, as well as the Tenth Circuit‘s decision in Adams, compel a different result. Once again, we disagree.
In Varity, the defendant corporation deceived several of its employees into transferring their jobs and their benefit plans from a profitable subsidiary to another subsidiary that had been set up to fail. Id. at 493-94. The trial court found that the defendant had violated its obligation as a fiduciary to operate its benefits plan “solely in the interest of the participants and beneficiaries” of the plan, and issued an order—citing
Second, the Court in Varity did not rule on the question of whether the relief sought was “equitable” within the meaning of the statute, because the defendants stipulated that it was. 516 U.S. at 508 (“Varity concedes that the plaintiffs satisfy most of this provision‘s requirements, namely, that the plaintiffs are plan ‘рarticipants’ or ‘beneficiaries,’ and that they are suing for ‘equitable’ relief to ‘redress’ a violation of § 404(a), which is a ‘provision of this title.‘” (emphasis added)); see also Great-West, 534 U.S. at 221 n. 5 (“In Varity ... it was undisputed that the respondents were seeking equitable relief ...” (emphasis omitted)).
Cox I and Cox II are also unavailing as support for the plaintiffs’ position. It is true that those decisions addressed whether there is a right to a jury trial in actions under
Neither does Adams require a result contrary to our decision here. In the context of determining whether the plaintiffs in that case were entitled to a jury trial on their claims, the Tenth Circuit explained that the recovery of benefits due under the terms of a plan is analogous to equitable restitution. 149 F.3d at 1162. As discussed above, however, the plaintiffs are not seeking benefits that were wrongly withheld for work they performed for the defendants. Rather, they are seeking an award of benefits as an approximation of the loss they suffered as a result of what they say is the defendants’ violation of § 510 of ERISA. As the Supreme Court explained in Great-West, this amounts to a claim for legal damages, not equitable restitution, and thus is relief not available to the plaintiffs in this case. 534 U.S. at 213-14; Skretvedt v. E.I. DuPont De Nemours, 372 F.3d 193, 210-12 (3d Cir. 2004) (same).
We therefore agree with the District Court that the relief the plaintiffs sought is not “equitable” within the meaning of
C
Finally, the plaintiffs argue that the District Court‘s grant of summary judgment is contrary to the mandate of this Court, and that its reading of § 502 would render § 510 of ERISA without effect. Both of those arguments are without merit.
A district court must “implement both the letter and spirit of the mandate” it receives from this Court, but district courts are free to “consider, as a matter of first impression, those issues not expressly or implicitly disposed of by the appellate decision.” Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943, 949–50 (3d Cir. 1985) (citing cases). We held in the previous appeal that the plaintiffs had presented sufficient evidence to survive a summary judgment motion that argued the defendаnts lacked any intent to interfere with the plaintiffs’ pension benefits. We neither explicitly nor implicitly ruled on the question of whether any of the relief the plaintiffs sought was available under § 502, and that issue was therefore open for the District Court to address on remand.
The plaintiffs argue, however, that the defendants’ failure to raise the issue of whether § 502 afforded the plaintiffs any relief resulted in a waiver of that issue. For that proposition, they rely on our decision in Skretvedt. In Skretvedt, the plaintiff filed an eight-count complaint, the District Court granted summary judgment to the defendants on all eight counts, and the plaintiff only appealed as to two of the eight counts. 372 F.3d at 197-99. The plaintiff won a remand on appeal and then sought to relitigate on remand some of the remaining six counts for which he had not secured a remand. Id. at 199. We held that the plaintiff had waived any right to recover on those claims by not challenging the District Court‘s grant of summary judgment on those claims in the first appeal. The panel stated that “[w]e have consistently rejected such attempts to litigate on remand issues that were not raised in a party‘s prior appeal and that were not explicitly or implicitly remanded for further proceedings.” Id. at 203 (emphasis added); see also Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 88 (3d Cir. 1987) (“An issue that is not addressed in an appellant‘s brief is deemed waived on appeal.“) (emphasis added).
Here, however, the defendants were the appellees in the previous appeal. As such, they were not required to raise all possible
We also reject the plaintiffs’ argument that the District Court‘s construction of § 502(a) renders § 510 ineffective. As the Supreme Court has noted, the “prototypical” claim under § 510 of ERISA is when an employer terminates an employee to prevent his pension rights from vesting. 498 U.S. at 143. Under such circumstances, the typical remedy is reinstatement, which is an equitable remedy within the terms of the statute. 2 Dobbs § 6.10(5) at 226. It may be that § 502(a) restricts the scope of § 510 as a practical matter by leaving without remedy some violations of § 510 that differ from the “prototypical” case. That the plaintiffs are without a remedy in this case, however, does not rеnder § 510 ineffective in all cases, and thus does not implicate the canon of statutory interpretation that cautions against interpreting a statute so as to render one part inoperative. See generally United States v. Menasche, 348 U.S. 528, 538, 75 S.Ct. 513, 99 L.Ed. 615 (1955).
IV
For the foregoing reasons, we will affirm the judgment of the District Court.
KENT A. JORDAN
UNITED STATES CIRCUIT JUDGE