Pens. Plan Guide P 23884y Jan C. Harms, Plaintiffs-Appellees-Crossappellants v. Cavenham Forest Industries, Inc., Defendants-Appellants-Cross

considering forego- Accordingly, and

ing, Eq-

IT AJ IS ORDERED defendant motion to dismiss is GRANTED and

uities

plaintiffs complaint is HEREBY DIS-

MISSED. to enter a

The Clerk of Court is directed

judgment in accordance herewith. al., HARMS,

Jan C. et Plaintiffs- Appellees-Cross Appellants, INDUSTRIES,

CAVENHAM FOREST INC., al., Defendants-Appellants- et Appellees. Cross

No. 92-3321. Appeals,

United States Court of Fifth Circuit.

March 1993.

As Rehearing Amended on Denial of Although representative give bankruptcy subject Creditor's was also the 524 did not President of the Unsecured Creditors’ Commit- jurisdiction guaranty matter issue, to release the tee, objected provision he neither to the release judicata the doctrine of res barred credi- appealed nor its confirmation. The guaranty.). tor's suit to enforce the assuming Fifth Circuit held that even

687' Richard- Knight, Richard A. F. Richard Knight, Hughes & son, Anthony, Talley, defen- LA, for all Cavenham Bogalusa, appellees. cross dants-appellants, McCalla, Thompson, Shapiro, Howard Orleans, LA, for Ridley, New Pyburn & defendants-appellants, River Crown/James cross appellees. Mendelson, Littler, Mott, III, A. Norman Orleans, LA, for Tichy, New Fastiff & appellants. cross plaintiffs-appellees, SMITH, REAVLEY, and Before DeMOSS, Judges. Circuit SMITH, Judge: E. Circuit JERRY under the claims presenting case In this Security Act Income Employee 1001 et (“ERISA”), 29 U.S.C. §§ district appeal the (1985), defendants seq. in fa- summary judgment grant of court’s employees’ entitlement plaintiff vor benefits. pension and severance certain to The asserting as cross-appeal, employees them against summary judgment error toas to severance claims their on one of dis- and defendants the named preempt- law claims their state missal ed their pursuing award ERISA, seeking an and attorney’s fees incurred costs and agree Although we appeal. disposition ultimate court’s the district with reasoning is different. case, our I. E. Harms, Robert C. Jan Plaintiffs Rush, Timothy H. Magee,

Heinz, C. Sue (the the enhanced Quitta, Eddie Welch James T. “beneficiaries”) properly benefits ployee fits, were classified as em- are former benefits, (“CZ”) pension welfare and Cavenham not Zellerbach Crown (“CFI”). Industries, Attempt- subject therefore were not Inc. Forest bid, accrual, vesting, CZ ERISA’s takeover nonforfeita- ing to fend off hostile bility provisions. such, con- As CFI’s modifica- developed for its —who outstanding employee tion of its clude largest plan of CZ severance to ex- bloc trolled employ- of both these benefits did not enhanced severance violate stock—an Change the CZ of ERISA. program ment known Program, Control/Restructuring Severance By Memorandum and Order dated De- Salaried addition to the CZ which is an Employees- 16, 1991, cember again the district court Separation Salary Involuntary granted partial summary judgment, time in favor of the Plan”) (“Continuation Plan Continuation beneficiaries, holding plan. to its III Also of and constitutes at this rate Retirement ment entitled tive date they were entitled to both Paid Termi- time, sepa- added benefits CZ nal Leave under Involuntary Sepa- the CZ of a docu- The effec- by Plan means Supplement ration Plan and benefits un- “Supplement C.” der the CZ Retirement Plan. The court’s 1, of both additions was leavened, ruling of however, was by grant its 1985; employed by were the beneficiaries partial CFI, summary judgmént to to the Employees became as of that date. CZ eligible effect that the beneficiaries could not col- only in additional benefits for these lect the full amount of der owing benefits un- “change in of a control” CZ. event plans. both the CZ and the CFI While 1985, legitimately CZ anticipated change of could transfer its July severance CFI, obligation cancel or long place, opera- various so as it did control took CZ’s not off, modify benefits, appar- split up, sold or taken over tions were by reasoned, ently companies. CZ’s Timber and beneficiaries were not other by double-recovery entitled to a way operation acquired windfall Wood Products CFI, employment collecting to the payments which extended from 5,May By plans an Em- both beneficiaries on for their term combined of ser- (“EBA”) dated vice with Agreement CZ/CFI. ployee Benefits 1986, 28, previously had relin- CZ March assumed, liability for had quished, and CFI II. relating personnel who were to CZ benefits appeal On of a district court’s May shortly 6, 1986, immediately transferred to CFI. On to be grant summary judgment, we review de the sale of the after novo the court’s of the law to the transfer to it of to CFI and business the evidence adduced before it. v. Samaad employees, amended its former CZ CZ’s Dallas, City 925, (5th 940 F.2d Cir. Supplement eliminate Plan to Retirement 1991). In cases involving interpretation C. plan, an ERISA-covered we likewise con time, year’s each of the bene- Within one novo, strue the plan terms of the de “un involuntarily separated from ficiaries was plan gives less the benefit the administra to the pursuant and received benefits CFI CFI severance fiduciary tor or discretionary authority to Collectively, plan. eligibility determine strue the terms oí the for benefits or to con a total of already have received ficiaries plan.” Firestone pay- $334,457.75 lump-sum from CFI Bruch, 101, Tire & Rubber Co. v. 489 U.S. Terminal to the Paid equivalent ments 115, 948, 956, 109 S.Ct. 103 L.Ed.2d 80 original CZ to them under Leave owed Involuntary Separation (1989). parties agree that the instant par- Program. The plans language contain according any no also are agree that the beneficiaries ties authority such plan to the fiduciaries. retirement and accrued entitled to vested Plan, to under the CFI benefits which, Accordingly, we must look to the CFI, pen- CZ’s according to CZ plan language guide as a to our de novo obligations were transferred. sion interpretation, only by buttressed admissi beneficiaries’ dispute centers on the ble evidence as to the Our the settlor’s intent where owing to 112, are also ambiguous. contention that benefits terms are Id. at Program (quoting under the CZ Severance 109 S.Ct. at 954 them (Sec Restatement (1959)). were and that these claims Supplement C cmt. d We must ond) of Trusts defer, however, wrongly plan fiduciary’s denied. On October to the fac par- granted motion for district court CFI’s tual determinations made in the course of concluding that summary judgment, determining eligibility, tial unless those reflect abuse determinations B. Gen. discretion. Pierre Connecticut Cir.), Co., 1552, 1562(5th 932 F.2d Ins. lump payment equivalent 4. A sum Life cert. — denied, U.S. -, S.Ct. provided Paid Terminal Leave above (1991). 116 L.Ed.2d 470 paid eligible employee will be who, to an Change Control, after ac- cepts employment with a successor em- III. ployer in connection with the of an sale The first issue address concerns operation Involuntarily Separat- and is granting par the district court’s 1991 order tial employer ed the successor within summary judgment in favor the ben years Change two of the of Control or claim. eficiaries on their year one sale order, contending disputes that the CFI the operation, whichever first occurs. eligible Sup are not to receive beneficiaries Salary at 7.1 Continuation Plan plement C benefits. Leave, eligible To be for Paid Terminal to the provisions, Pursuant the above employee eligibility an requirements first had to meet the lump payment received a sum beneficiaries to, in III. the of, set out section A. of equivalent Leave and in lieu Paid Terminal Intro, Salary Continuation to Program. CZ Plan. See the Severance from CFI Description. undisput- contends, however, is Summary excerpted Plan It the CFI that III.A.5, III.B.4, provisions Program óf the un- ed that sections of that and IV.D. Severance beneficiaries, ambiguously Supplement C plan apply to the exclude bene- range fits from the former beneficiaries. CFI in provide to argues interpretation CFI that the these benefits available employees position in the of the provisions governs bility eligi- the CZ beneficiaries’ points language to the Supplement C for benefits as well. C, Supplement stating sec- “to purpose its the Plan’s paragraphs of The relevant special Early in lieu of benefits that provide tion III Retirement Benefits and Vested Benefits to ly of Crown employees salaried active [a]ll Zellerbach eligible Participants who are involuntari- as of its U.S. subsidiaries separated Pro- under the Severance Sepa- Involuntarily are who (Supple- Plan gram.” Retirement at C-l eligible are Zellerbach Crown rated from C). special These benefits set forth ment under Leave Terminal for Paid C, Supplement argues, logically are in CFI Pro- Control/Restructuring Change of by entailed section III.A.5’s reference except: gram similarly situat- “benefits” that to the “shall not receive”— ed beneficiaries who, with in connection Employees 5. lump exception being the sum Sala- the sole are offered operation, of an sale specified in section ry Continuation benefit employer a successor with employment Accordingly, urges, CFI the bene- III.B.4. not shall acquires operation, lump pay- which entitled to sum ficiaries are event except precluded receiving Sup- benefits receive that ment plement are from but Involuntarily employees are such C benefits. employer the successor Separated of the various docu- Our review the.Change of from years two Sup- interpretation. ments refutes CFI’s year one or within Control adopted an amendment plement C of the subsid- disposition or other sale Plan, Salary Retirement not to the CZ ends period division, whichever or iary being In Plan. addition Continuation will employee case the first, in which Retirement physically to the appended Plan, Continuation Salary be entitled provide is to purpose C’s Supplement III. Section in this provided retirement in lieu of certain special benefits C Although Supplement benefits.2 merely "involuntary sep- involuntarily purposes separated 1. Section IV.D. defines been states, pertinent part, aration.” In it severance. Involuntary Separa- As herein the term used involuntary Moreover, tion means Supplement termination of em- C that 1 of states ployment Crown U.S. part Zellerbach its “Supplement is be C a the Plan shall subsidiaries, and, provisions in the case described administered in accordance with thereof_” IIIB4, by employers. IIIA5 successor Retirement Plan C-l. positions Employees offered with Crown Zel- phrase "part to the of the Plan” we believe refers company Plan, or a Supplement lerbach new formed under the C is a to which Retirement Restructuring will not deemed be to have Supplement eliminate admittedly “eligible are limited to Par on May fits ticipants benefits involuntarily 1986. The district separated rejected are who CFI’s reli- ance Program,” see Re amendment under the Severance because of the added), wording of section (emphasis Salary tirement Plan at it is III.D. of the C-1 Con- Plan, tinuation Program prohibits forth which not the Severance sets the cancella- Supplement requirements for eligibility Program tion or modification of Severance following change benefits; rather, specifies a of control.4 Supplement C criteria.3 its own light of our conclusion above that Supplement C benefits are not to be meet CFI concedes that the beneficiaries part Program deemed for cannot section III.D. of the Severance criteria. Given the literal terms of these purposes determining eligibility, we C is a our conclusion agree with the district court that Salary Plan, and not amending Supple- bars the Plan, argument that the Continuation CFI’s ment Section III.D. does not ment C change C benefits after a of control. contained in section limitation of benefits III.A.5 incorporate Supple- Salary Continuation by reference; indeed, by its own Supple- Program includes Plan/Severance ment terms its ,“[t]he is limited to analysis. does not survive C benefits Change Control/Restructuring Sever- above_” Leave that the Sever- The Paid Terminal Program ance Sup- described employees involun- Program ance accords C, reiterate, plement appended to the textually tarily separated is neither nor Plan; Retirement it is not included in the Supplement Spe- logically exclusive of C’s Salary Continuation Plan of which section Early part. cial Retirement Benefit. We find III.D. is a struction of the It would be an odd con- plans at plain language the various issue in this case that the Supplement part to deem aC of the Sever- eligi- supports the beneficiaries’ documents Program purposes applying ance for sec- bility Supplement to receive C benefits. tion III.D.’s not when provision, non-cancellation but applying section III.A.5’s limita- conclusion, however, That does not tion of benefits. necessarily compel finding our that- the beneficiaries are entitled to Supple receive though Even po section III.D. thus benefits, ment C that inasmuch as CFI contends ses no post-change-of-con obstacle to CZ’s C, CZ modified Program Supplement the Severance trol cancellation of that can- (i) Participant five-year The has a formal amendment. But Wallace v. Caven Period of cf. Indus., Service age and has (D.Or. attained F.Supp. ham 55 at the Forest 707 time 459 Involuntary his or her 1989) Separation; (interpreting plans, or identical but constru (ii) Participant The five-year has a ing Supplement Period part Salary C as Continua age Service and during attains Plan). his or tion (as her Paid Terminal Leave defined in the acknowledge parties’ stipulation While we Program). Severance "Supplement that C to the Retirement Plan C/Z (b) Vested Participant A who in- Benefit. adopted was pro- of the C/Z Involuntary curs Separation an on or after gram,” see Uncontested Material Facts at 1 1, 1985, April eligible and who is not for the (number 4), compels we do not believe it Special Early Retirement Benefit shall be eligibility Supplement conclusion that for Special 100% vested in the Vested Benefit should be determined with reference to the Sev- 4(b) under Section below in lieu of his or her Rather, Program. stipula- erance we view the (if any). Vested Benefit merely Sup- tion as a reflection of the fact that C-l, Retirement Plan at C-2. plement provided only employ- C benefits are CZ, involuntarily separated ees and that it Program 4. Section III.D. of the CZ Severance adopted contemporaneously with the Sever- provides, Program. ance Right Modify Change D. to Cancel or Con- trol/Restructuring Program Severance Supplement eligibility C's terms are as follows: Control/Restructuring Change of Sev- may Program SECTION 3. be ELIGIBILITY FOR described above SPECIAL erance prior BENEFITS. cancelled at time to a modified or (a) Early Participant Change Retirement. A who The benefits will be of Control. Involuntary Separation Change incurs an provided of Con- on or after in the event of a 1, 1985, Special restructuring, they shall be entitled to the unless are modi- trol or Early 4(a) Change prior Retirement Benefit under to a of Con- Section fied or cancelled Early below in lieu of his or her Retirement trol. Benefit if: Salary Plan at 8. Continuation Nonetheless, court in the in- the district oper- barred may yet have been cellation ation Supplement ERISA, determined that 29 stant case 204(g)(2) of of section contingent, prohibits were best viewed 1054(g)(2), which benefits unaccrued welfare U.S.C. § unprotected by of retirement benefits or reduction elimination or accrued.5 already vested Although acknowledging have 204(g).6 fits that section éarly aspects Supple- type of the retirement-like C contains Supplement If benefits, ultimately pro- the court found retirement-type benefits ment C as contingent upon retirement tected ERISA, 204(g) may eligibility the fact dispositive then cancellation, involuntary tbe ex- employee’s least to prevent its may Admitting be the ab- Supplement separation C’s benefits from CZ.7 tent point, the beneficia- directly accrued to on to have sence of caselaw court relied deemed October argu- district court’s Because the two cases which ries. order held 26, 1988, summary judgment deemed retirement-type benefits were ably welfare-type, provided a Supplement C benefits because welfare-type severance benefit, and retirement-type, and not plant occurrence of a upon conditioned shutdown. See by section protected not be therefore could Plan Ross v. Pension the correctness 204(g), must review we Indus., 847 Employees SKF Hourly finally deciding before determination (6th Cir.1988); Flinch 332-34 entitled to are the beneficiaries Co., whether Chicago Pneumatic Tool baugh v. C benefits. Supplement receive (W.D.Pa.1982). Analogiz F.Supp. takeover to the hostile ing plant shutdowns here, IV. operations at issue spin-off of and court its tion attached to supported the caselaw concluded that an amendment its status as In addition to condi severance-based emphasis on the Plan, Supplement C Retirement to the CZ - C benefits. Early “in lieu of a benefit itself as bills Benefits.” Vested Retirement Benefits and Moreover, its upon by the district Plan at C-l. The cases relied believe, discharged employ- are, distinguishable from are offered Flinchbaugh, bene- the instant case. ple, for exam- of a normal retirement in lieu of their ees fits and are involving interpretation plan the life. a ease involved payable for granted discretion to that the broad of the identical the expressly circumstances, eligibili- to pension an trustees determine set of plans to a similar plan provides, so ty. Where an ERISA ben- noted that Oregon district court “[t]he reviewing permits court to sus- a Supplement Firestone to provided efits fiduciary’s plan tain the administrator’s or essentially the same retirement areC long so as it was not arbi- determination retire- original Crown fits offered ment capricious. precisely It is trary or ap- paid without plan, are to but be ap- Flinchbaugh court standard that the early retire- factor for plying a discount plan trustees’ plied upholding in the Wallace, F.Supp. at 460. 707 ment.” charac: — denied, Cir.1990) 204(g)), (applying cert. part § 204(g) provides pertinent in as 5.Section 1310, -, 244 113 L.Ed.2d U.S. 111 S.Ct. follows: 6,May (1991). argue that CZ’s CFI does not (1) participant The accrued benefit of a un- 1986, complied with ERISA amendment may plan an der a not be decreased 1082(c)(8), nullify the would which otherwise § plan, other than an amend- amendment of the 204(g). application of § 1082(c)(8) of this ment described in section title. (1), (2) paragraph plan purposes of a For 1051(1), 6. Pursuant to 29 U.S.C. ERISA’svest § accrual, has the effect of— amendment which ing, non-forfeitability provisions (A) eliminating reducing early or an retire- ERISA) (contained apply 2 of do not in (as subsidy retirement-type or a ment benefit plan. employer employee An benefit an welfare regulations), or defined in may modify benefits with or cancel such thus benefit, (B) eliminating optional form of falling See Sutton v. Weir afoul of ERISA. out respect to benefits attributable to service with 406, Corp., Steel 724 F.2d Steel Div. Nat’l ton before the amendment shall be treated re- denied, (4th Cir.1983), 467 U.S. cert. 410 ducing accrued benefits. In the case of a (1984). L.Ed.2d 345 104 S.Ct. 81 subsidy, preceding retirement-type sen- only partic- apply respect tence shall with to a 1002(2)(B)(i), U.S.C. § 7. Under 29 (either ipant who satisfies or after the before employee arrangements to be pay are deemed amendment) preamendment conditions purposes plans of ERISA. See also welfare subsidy. for the 2510.3-1(a)(3). § C.F.R. 29 (1985). Berger generally 1054(g) See § 29 U.S.C. (3d Co., 918 Edgewater Steel vice) substantially Compare the same. are plant terization of the shut-down benefits Plan at 7 with id. at C-1. Retirement at issue there as a severance allowance. (“If F.Supp. Flinchbaugh, See at 113 - calculating Sup- Lastly, when one is determining in the actions of the trustees pension eligibility benefits, Participant’s plement “a Period arbitrary are not or ca- Benefit shall not include Service pricious tions.”). confirm then we must those ac- Participant re- period during which the ceives Paid Terminal Leave.” Plan at from the calculation of fits of the nal Leave is erance exclusion, C-2, 4(a), 4(b). This §§ persuasive more presents a rather Ross Supplement C bene- case, vested no dis- inasmuch period during which Paid Termi- administrator, eligi- and the cretion in the pursuant provided to the Sev- at issue bility requirements for the benefits Program, confirms our conclusion Supple- out in closely those set resembled duplicate does not sev- (de- Ross, 847 F.2d at 333 ment C. See is, fact, obligations in a retire- erance but scribing payable benefit plant shut-down ment-type subsidy protected by ERISA sec- years’ participant with fifteen service in 204(g). tion by We are bolstered this result permanent whose service ceases because plant reached in the the identical conclusion shutdown, is at least provided that he reviewing only published opinion previously age years his combined fifty-five service old or Wallace, eighty). plans. F.Supp. Ross re- these 460. equal or exceed See jected the contention that such benefit retirement-type subsidy with- constitutes a in the above, prohibits 204(g) noted As 204(g). meaning of section Supple- the elimination or reduction of the ment by plan amendment C benefits “with predicated, in conclusion Ross (ei- participant respect to a who satisfies amendment) however, express statement ther before after amendment legislative history of the 1984 preamendment subsidy.” conditions for the 204(g)(2) the effect that “a to section added). 1054(g)(2)(emphasis 29 U.S.C. It (that plant does not con- shutdown benefit undisputed is age that the beneficiaries.met age) tinue after retirement will not be con- requirements imposed by and service retirement-type subsidy.” 847 sidered a Supplement C at the time of their termi- history additionally F.2d at 334. The empts qualified disability, ex- remaining eligibility re- nation. The sole medical, quirement is incur an beneficiaries benefits, security supple- death and social involuntary separation meaning within the ments from the definition type subsidy,” “retirement- general Salary sections and III.B.4 of the III.A.5 stating as the while Continuation Plan.8 intends that un- rule that Committee “[t]he eventually The did fulfill beneficiaries regulations, subsidy a that con- der these requirement but, points this final as CFI generally tinues after retirement is to be out, 6, 1986, May not before CZ’s amend- retirement-type subsidy.” considered a Id. Supplement ment of its Plan to eliminate benefits. have met all the for at Nevertheless, the beneficiaries Significantly enough for the preamendment conditions rule, general Supplement of this C bene- benefits; Supplement the fact that Special Early Retirement fits—both the they only the have satisfied them after 4(a) Spe- set in section and the Benefit cial Vested Benefit out is, 204(g), amendment irrelevant. These as we read section 4(b), provided in section were, short, in vested payable Retirement Plan C-2—are see pension and benefits that had accrued Moreover, benefits are cal- for life. culated these by could not be reduced or eliminated sequent plan sub- similarly to in retirement subsidies Although amendment. we general by multiplying participant’s the analy- reach our conclusion based — (the average pay figure “Dollar 'employed by final the sis different from that Amount”) by years court, of the agree his service—and with it that sum- district age eligibility requirements and in of mary judgment service favor the beneficiaries (age fifty-five years’ proper. and minimum ser- on this was five issue position of the employees in the Salary the case of Beneficiaries, Plan IV.D. of the Continuation 8. Section pur- provides the stric- "Involuntary Separation" that for the IV.D. § defines pose (separation C. must applying and of the Plan III.B.4 III.A.5 and §§ tures of ("Capitalized terms Plan at C-l Change See Retirement one Control or years two be within Supplement C and not defined here- used in this subsidiary, is date year whichever sale of meanings in the [Re- in shall have the same as earliest) eligibility. determine Program.”). Plan or the Severance tirement]

693 re- plan, V. and that no adopting its own benefit had been intended. dundant dis the whether next consider We 16, December in its was correct court trict correctly The district court resolved this the ruling that 1991, judgment summary provision Plan no issue. There is CZ to severance not entitled were obligation pay beneficiaries to transfer of its prohibiting un It is Zellerbach. from Crown entity. benefits another Nor severance benefits to invol were beneficiaries that the disputed necessarily is modifica- such transfer period by CFI untarily separated benefits, long so as the CFI tion of such III.B.4, and III.A.5. sections under required already reduce the benefits plan does not intended Program was the Severance their to beneficiaries virtue of accrued in the bene did, to, apply to CZ.10 What the beneficiaries service seek, nor neither CZ and that position, ficiaries’ oral they forthrightly conceded at paid Plan has Salary Continuation CZ double-recovery merely a argument, benefits. any severance beneficiaries result windfall—a abhorred ERISA. are entitled they contend beneficiaries See, Co., e.g., Lakey Remington v. Arms in addition Leave CZ Terminal 541, (8th to Paid Cir.1989) 874 cases). 545 (citing under they have received that which to CFI’s district plan and that severance separate holding otherwise. court erred VI. expressly assumed that it counters CFI 11, 1988, Entry, In its March Minute Employee Bene- in the 1986 obligation CZ’s dismissed, preempted the district court by EBA, as- CFI Under Agreement. fits sumes ERISA, pendent the beneficiaries’ state benefits liability for severance duty, fiduciary law claims of breach term employees,” which to “CFI payable good duty faith and fair deal breach it CFI states that beneficiaries. includes misrepre ing, negligent and intentional Leave Terminal CZ Paid incorporated the sentation of the terms and conditions of employment. that, by plan and into its severance 514(a) pro ERISA plan, pursuant to paying beneficiaries subchap- provisions vides that “the obligation.9 CZ’s it satisfied supersede any shall and all State ter ... they may Plan laws insofar as now hereafter the CZ Severance III.D. of Section ” plan.... any employee benefit or cancella- relate to attempted modifications forbids tions has occurred. this 1144(a) (1985). change of control 29 U.S.C. Because after a of benefits upon Supreme has rely Court declined to extend this The beneficiaries contours, language that CFI’s to its outermost proposition broad see Shaw provision for Lines, 85, plan for CZ’s v. Delta Air U.S. its own attempt to substitute 2890, 2900-01, 97-99, 77 L.Ed.2d Although the EBA 103 S.Ct. impermissible. (1983), af- “whether the state created we must ask program were CFI’s principal control, among the district law affects relations change of ter on argument Drug Stores ERISA entities.” Sommers the beneficiaries’ dismissed Enters., sought 793 F.2d merely Corrigan had that CFI grounds (5th Cir.1986), denied, EBA cert. U.S. under the obligations fulfill its accordingly 884, 93 479 U.S. the beneficiaries 107 1089, L.Ed.2d compensate S.Ct. (1987). 1298, 154 means 94 L.Ed.2d them CZ 107 S.Ct. owed for the benefits liability any employee- The 9. EBA CFI the sets out the assumes for assump- terms of CFI’s respect Employ- pension related CFI obligations tion liabilities with to of CZ’s as follows: dependents payable and ees their that are on that, 2. Employees. CFI agrees CFI as of Date, regard or after the Effective without to the sale], subsidiary's Effective Date the [of arose, including, the when liabilities without responsible CFI wages, will be salaries benefits_ limitation ... severance employee and other benefits in accordance provisions Agreement with the of this for the Dougherty Chrysler Corp., 10. See Motor 840 following employees ... 2, (6th Cir.1988) (upholding 4 transfer (c) any employee of Crown or an affiliated prior employer plain- from to successor where company employed by who is not inor tiff would have received same bene- connection with the CFI Businesses or the plan day fits on under successor after transfer Energy Properties as of they plan the Effective Date predecessor as were under entitled to who, CFI, but business); with the day consent of becomes on before sale of ERISA cf. employee an (including of employment (permitting CFI § 29 U.S.C. transfer of § 1058 in Energy pro- connection Properties) with the in connection assets with sale of business days 60 within after the vided accrued retirement benefits after transfer Effective Date.... before). EBA at 2-3. See also are same better than id. at 5: they concerns that a applying are the nuclei of may scope thus be preemptive ERISA’s in court should section address Sommers, however, we In considerable. found no claim 502(g). state law preemption of a duty where the fiduciary Bowen, of for breach No. 272 v. Iron Workers Local an corporate director was Cir.1980) (footnotes (5th facts that the F.2d and citations fiduciary the share- and that plan ERISA holder was and fortuitous omitted). incidental the ERISA were Despite the beneficiaries’ citation to entirely unre- circumstances cases from our asserting sister circuits that of underlying the cause to the facts lated presumption exists a under ERISA in favor court 1470. The district action. id. at See fees, attorney’s that and awarding of costs attempt to come rejected the beneficiaries’ Bowen, In law of this circuit. is not the cited to us denial the Sommers, asserting that petition for in beneficiaries’ and CFI’s CZ’s under of benefits 502(g) distinguished rehearing, we section representa- the and plans, retirement and in II of the analogous provisions Title un- available the benefits as to made tions 718 of of and Rights Civil Act of essence the constituted plans, the der of Emergency School Aid Act the The claims. law state the beneficiaries’ similar discretion- contained both which ary to undeniably relates claims of these heart the Supreme Court provisions that the fee relations to plan and employee benefit mandatory applied and as interpreted had entities. ERISA principal among the attorneys “private plaintiffs act where general.” holding that the in not err did court district Instead, “in- we concluded preempt- are law claims state beneficiaries’ are, attorneys’ fees in the form of centives on ed. whole, necessary to insure that less at 1265- statute is enforced.” 624 F.2d VII. assert beneficiaries Lastly, the costs of court to the Bowen]s to an award five factors Applying they are entitled successful their hand, persuaded fees on that the attorney’s we are not case and ERISA-based 502(g) Section par claims. all sought to benefit beneficiaries have ticipants plan, larly ciaries resolved a “in discre its a court instant provides of the ERISA tion and beneficiaries attorney’s fee reasonable a simi may only allow and those but themselves 1132(g)(1). 29 U.S.C. them, costs....” to nor have the benefi situated fees attorney’s award deciding legal question whether significant ERISA, party (factor 4).11 under to a while regarding ERISA And such factors as to the consider have few doubts abilities should we the (factor a court the posing op- (1) degree pay an award following: named defendants faith; or bad culpability 2), the absence parties’ we believe parties opposing ability of faith on the defendants’ (2) culpability or bad fees; (3) attorneys’ 1), (factor coupled award with the closeness satisfy fees attorneys’ presented an award the con legal whether of the issues —with deter would parties opposing against the of merit near-equivalence comitant parties’ cir- similar acting (factor under persons implies positions other that that re- parties cumstances; (4) whether an award conclusion that 5) supports our — sought to bene- fees attorneys’ questing attor of their costs and to the beneficiaries of an beneficiaries participants appeal fit all pursuit ney’s fees incurred significant to resolve plan or ERISA legal is unwarranted.12 itself; ERISA regarding question propri- as to opinion no venture parties’ We merits (5) relative court, which by the district ety of an award factors of these one No positions. reserved, expressly not may determination in its decisive, some necessarily completion until the judgment, final case, together but given in a apropos be Indeed, acting “pri- parties favors awards for brief seems to con- which 11. beneficiaries’ much, concluding general." attorneys this factor cede as on vate below, statu- ruling as well as Court’s this ”[t]he tory rulings, apply specifically benefit to and culpability any bad faith 12. Given the lack of many similarly De- situated beneficiaries. other case, prosecution of we in the this defendants’ not, future, deny may Plans fendants' purpose Bowen that the third find deterrent rejected upon here- the reasons based inapplicable to purports serve to be factor laudable, mainly these self-interest- in.” While analysis. our objectives the Bowen ed are not those we believe factor, to include this court intended this over Having presided appeal. of this being necessar- inception, and its since case posi- and their parties with ily familiar well-positioned is tions, court district handling of faith bad know opin- no express case, which we as to this ion.

AFFIRMED.

ON PETITION FOR REHEARING 1993. SMITH, REAYLEY, Before

DeMOSS, Judges. Circuit SMITH, Judge: E. Circuit

JERRY Rehearing is DENIED. for Petition opinion original panel errone- Because the standard Circuit the Seventh ously applied appropriateness of to determine attorney’s fees to costs and award of however, beneficiaries,1 the decision only the discus- revise

hereby amended to read attorney’s fees sion of costs

follows: CHAUVIN, Plaintiff-Appellant,

Art C. CORPORATION,

TANDY Radio d/b/a

Shack, Nichols, and James

Defendants-Appellees.

No. 92-3701

Summary Calendar. Appeals, States

United Court

Fifth Circuit.

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Case Details

Case Name: Pens. Plan Guide P 23884y Jan C. Harms, Plaintiffs-Appellees-Crossappellants v. Cavenham Forest Industries, Inc., Defendants-Appellants-Cross

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Apr 7, 1993

Citation: 984 F.2d 686

Docket Number: 92-3321

Court Abbreviation: 5th Cir.