LOUISE C. ROMERO, Appellant v. SMITHKLINE BEECHAM, a Delaware Corporation; SMITHKLINE BEECHAM PENSION PLAN; VINCENT C. BRUETT; STANLEY J. SEROCCA, JR.
No. 01-3273
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
October 30, 2002
2002 Decisions, Paper 680
ALITO and FUENTES, Circuit Judges, and OBERDORFER, District Judge
Precedential. Argued: September 12, 2002. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY. District Court Judge: Honorable Dickinson R. Debevoise. (D.C. No. 99-1308).
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Recommended Citation
“Romero v. SmithKline Beecham” (2002). 2002 Decisions. Paper 680.
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(ROBERT H. JAFFE (Argued)
Robert H. Jaffe & Associates, P.A.
8 Mountain Avenue
Springfield, NJ 07081
Counsel for Appellant
JACQUELINE V. GUYNN
BRIAN T. ORTELERE (Argued)
JEFFREY K. TECHENTIN
Pepper Hamilton, L.L.P.
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103-2799
Counsel for Appellees
OPINION OF THE COURT
ALITO, Circuit Judge:
I.
Romero began working for SmithKline in 1973. In 1995, the company announced a “Voluntary Reduction in Force” (VRIF) plan promising enhanced severance paсkages to employees retiring early. Romero agreed to a package conditioned on satisfactory completion of her work assignments and a departure date during the fourth quarter of 1997. She intended to retire on December 31, 1997, but SmithKline scheduled her last day as October 3, 1997. Since October falls during the fоurth quarter of the calendar year, this date preserved Romero‘s eligibility for all the benefits that she would have received by leaving in December, but she evidently did not understand this and became deeply angered.
Romero made several remarks that some employees construed as threats against Human Resоurces Director Vincent Bruett, who had helped Romero arrange her resignation. She canceled her plate at a company dinner that Bruett planned to attend, explaining to Human Resources employee Betzaida Boynton:
My spouse doesn‘t want to have to see that man‘s face after everything he has done to me. . . . I can‘t say how he might react when he sees that man. . . . I hope someday somebody puts a bullet in that man. . . . I won‘t do it because I [am] not going to jail for that man, but I would love to see the day when someone does get him.
When Boynton questioned whether Romero really meant what she had said, Romero replied, “Yes, I do.” Romero then left Boynton a voice-mail message stating:
I want to correct things, if anything happened to that mean, soulless man that you work for, if somebody get [sic] him, I don‘t want anyone to think that it is me, but I sure would shed no tear and I will be happy, so it ain‘t going to be me if anything does happen. If hapрen [sic], I don‘t know, but anyhow, my hands are clean. My mind isn‘t, but my hands are.
Boynton was noticeably unsettled and shaken by the incidents.
Boynton reported the matter to SmithKline‘s security department, which contacted the police. The company summoned Romero to a disciplinary proceeding, but she refused to speak without counsel. SmithKline then suspended her and converted the suspension to a termination a week later, on April 29, 1997, citing a company policy prohibiting “[d]eliberate or reckless action that causes either actual or potential loss to the company or employees, damages to company or employee property, or physical injury to employees.” Because Romero did not remain in SmithKline‘s employment in the fourth quarter of the year or satisfactorily complete her work, the termination disqualified her from receiving the enhanced severance package.
Romero, bоth personally and through her attorney, attempted to negotiate for the enhanced benefits with SmithKline‘s retiree benefits coordinators. On January 2, 1999, she wrote to Kim Nelson, a Retiree Benefits Representative at SmithKline, requesting copies of the company‘s amended pension plan and employeе handbooks. Two weeks later, Romero‘s attorney wrote to another benefits representative, Gwen Ubil, to discuss reinstatement of benefits. SmithKline did not respond to the letters until shortly after Romero commenced litigation in March 1999, when plan administrator Stanley Serocca provided a copy of the plаn description and reiterated SmithKline‘s justifications for denying her claim.
Romero commenced this action in District Court, but since she had never filed an administrative appeal, her action was stayed pending exhaustion of administrative remedies. On November 29, 1999, Serocca denied Romero‘s appeal, citing her termination prior to 1997‘s fourth quarter and her consequent failure satisfactorily to complete her work. Responding to Romero‘s efforts to contest the propriety of her termination, Serocca later explained: “Death threats in the workplace constitute a more than sufficient basis for firing.” When Romero resumed the litigation in District Court, she asked for de novo review of SmithKline‘s decision or review under a modified arbitrary-and-capricious standard. She also asked the court to impose personal liability on Serocca for his tardiness in supplying the plan materials. The District Court granted summary judgment for all defendants on all claims. This appeal followed.
Summary judgment is appropriate when the record discloses no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
Decisions of ERISA fiduciaries generally merit deference from courts. De novo review of a denial of benefits is appropriate only when a plan administrator has no “discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Romero argues that Serocca had no “real discretiоn” to review her case because he believed that he could not overturn SmithKline‘s decision to terminate her.1 Since Romero plainly could not satisfy the conditions precedent to enhanced benefits under the VRIF after being fired, Serocca was, she submits, “fatally inhibited from exercising discretion.” We disagree and decline to hold that an ERISA fiduciary exercises no “discretionary authority to determine eligibility for benefits” simply because a particular case‘s facts are so unfavorable to a claimant that a denial seems virtually obligatory. A contrary rule would yield the absurd result of reserving the least deferential standаrd of review for the least meritorious appeals.
Romero asks alternatively for review under an arbitrary-and-capricious standard that retains the deference accorded to administrative decisions but appraises a fiduciary‘s “conflict of interest” as a “factor in determining whether there is an аbuse of discretion.” Firestone, 489 U.S. at 115 (citation omitted); see also Pinto v. Reliance Std. Life Ins. Co., 214 F.3d 377, 382-86 (3d Cir. 2000) (recounting efforts by the Courts of Appeals to resolve ambiguity in Firestone‘s conflict-of-interest standard). Romero argues that a conflict of interest tainted Serocca‘s review because she sought $50,000 in benefits from her employer and because Seroccа supervised Bruett. The District Court found neither argument convincing because Romero “failed to adduce evidence that a potential payout of approximately $50,000 in benefits by SmithKline, a company with $12.5 billion in revenues in 1999, created a conflict” and because the District Court saw “no support in the record for Romero‘s contention that Serocca was conflicted by the fact that he was Bruett‘s supervisor.” The District Court properly applied the reasoning of our decisions in Pinto, 214 F.3d at 388, and Kotrosits v. GATX Non-Contributory Pension Plan for Salaried Employees, 970 F.2d 1165, 1173-74 (3d Cir. 1992), in holding that the potential payout to Romero under the benefits plan was insuffiсient to establish a conflict of interest. We also agree that Serocca‘s supervision of Bruett establishes no such conflict.
The District Court also held that Romero did not state a claim under section 510 of ERISA,
Finally, the District Court declined to impose personal liability on Serocca for delays in responding to Romero‘s information requests. Under ERISA section 502(c)(1),
[a]ny administrator . . . who fails or refuses to comply with a request for any information which such аdministrator is required by this title to furnish to a participant . . . may in the court‘s discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper.
We believe that the District Court‘s reading of section 502(c)(1),
At the same time, however, we agree with the District Court‘s general view that section 502(c)(1) must not be read too loosely. First, we believe that section 502(c)(1) requires actual receipt by the administrator. This interpretation is supported by the statute‘s reference to an administrator “who . . . fails or refuses to comply with a request for . . . information.” It is not customary to refer to a person‘s failure or refusal to comply with a request that has never been received. Furthermore, it is unlikely that Congress wanted to impose a сivil penalty on a person who has not engaged in any wrongful conduct.
Second, because section 502(c)(1) requires a response within a rather short time (30 days) “after [the] request,” the statute appears to contemplate that the request will be delivered in a manner that permits the administrator or the appropriate subordinates to work on the matter soon after the request is made. Accordingly, we believe that the 30-day period should not begin to run until the request is actually received either by the administrator or those under the administrator‘s supervision. This requirement, we conclude, provides adequate protection for an administrator in a situation in which a request for information is not delivered or sent directly to the administrator.
Appropriate factors to be considered in making these decisions include “bad faith or intentional conduct on the part of the administrator, the length of the delay, the number of requests made and documents withheld, and the existence of any prejudice to the participant or beneficiary.” Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76, 90 (2d Cir. 2001) (citation omitted). Other circuits have studied the role of prejudice or damages in the inquiry and have concluded that although they are often factors, neither is a sine qua non to a valid claim under section 502(c)(1). See Bannistor v. Ullman, 287 F.3d 394, 407 (5th Cir. 2002); Yoon v. Fordham Univ. Faculty & Admin. Ret. Plan, 263 F.3d 196, 204 n.11 (2d Cir. 2001); Faircloth v. Lundy Packing Co., 91 F.3d 648, 659 (4th Cir. 1996); Moothart v. Bell, 21 F.3d 1499, 1506 (10th Cir. 1994); Daughtrey v. Honeywell, Inc., 3 F.3d 1488, 1494 (11th Cir. 1993).
III.
We affirm the District Court‘s grant of summary judgment to the defendants on Romero‘s claims under sections 502(a)(1)(B) and 510 of ERISA. We reverse the District Court‘s grant of summary judgment to defendant Serocca on Romero‘s section 502(c)(1) claim and remand for further proceedings related to that claim.
A True Copy:
Teste:
Clerk of the United States Court of Appeals for the Third Circuit