Taylor v. Peoples Natural Gas Co.

n precept jurispru- adopt as a of constitutional

dence, deeply TAYLOR, Appellant, I am trou- lies its breadth. Thomas H. necessary implication of the ma- bled statement, jority’s which is that the Constitu- The preclude per- PEOPLES NATURAL GAS COMPA-

tion does not that which is subsidiary NY, necessary Natu- expedient or of Consolidated ceived enforce Company; System public maintain I hold a ral Pension Plan the law and- order. Gas Company, beyond I it to different believe be of Consolidated Natural Gas view. 001; precludes many dispute that the Constitution Number and Bene- Annuities might, reasonably, Committee, which even acts fits “necessary” Appellees. deemed for the enforcement public order. law and the maintenance No. 94-3109. determining pre- what does and does not clude, engraft upon we cannot the Constitu- Appeals, United States Court of predilections tion our own as to what that Third Circuit. document, perceived as a matter of social March necessity, ought ought permit or law officials to do in the name of law enforcement

and order.

CONCLUSION reasons, respectfully

For the above con-

cur and dissent. PETITION FOR

SUR REHEARING

April SLOVITER, Judge,

Before:' Chief

BECKER, MANSMANN, GREENBERG,

HUTCHINSON, SCIRICA, COWEN,

NYGAARD, ALITO, ROTH, LEWIS,

McKEE, SAROKIN, Judges. Circuit petition rehearing filed James,

appellant-appellee, Louise captioned having

above matter been submit- judges participated

ted to the in the

decision of this court and to all the other judges regu- circuit

available of the court in service, judge

lar active and no who con- having

curred in the decision asked for re-

hearing, judges and a circuit regular

of the circuit in active service not

having rehearing by voted for the court

banc, petition rehearing is denied.

Judge Judge grant Lewis and McKee would

rehearing by the c'ourt in banc. Cole, (argued), Greensburg, P. II

Thomas PA, appellant. for Weis, Richey (argued), Philip P. Jerome J. Phillis, Ingersoll, Profes- Mark T. Buchanan Joyce Corp., Dailey, Peoples Natu- sional C. PA, appellees. Pittsburgh, ral Gas Williams, McDowell, Douglas E. S. Robert Williams, DC, Washington, & McGuiness Equal Advisory Employment amicus curiae Council. BECKER, COWEN,

Before: Circuit POLLAK, Judge.* Judges, and District THE COURT OPINION OF BECKER, Judge. Circuit appeal action This arises out of an ERISA Taylor, brought by Thomas H. a former em- * Poliak, sitting by designation. Honorable Louis H. United States District Pennsylvania, Judge for the Eastern District of allegedly judgment the statements Company because

ployee Peoples Natural Gas not, (“PNG”), by Burgunder Annui- do as a matter of against the members (“the law, misrepresentation defen- of a ma- Benefits Committee constitute a ties and dants”), plan administrator of which is the terial fact. plan. The district court summary judgment for the defen- granted I. gravamen of F.Supp. 51. The dants 843 along sponsors pension plan a PNG Taylor’s claim is parent corporation, Natural its Consolidated early retroactivity pension plan’s of the (“CNG”). named fiducia- Company Gas program, made to him incentive

retirement plan ry plan of the Benefits, Employee Supervisor of PNG’s Committee, Annuities and Benefits is the a Burgunder, who was not member John up employees of both CNG which is made Committee, Annuities and Benefits con- members of this committee and PNG. The a breach of the defendants’ stituted defendants in this action.1 are the relevant complete and cor- obligation to communicate Annui- not a member of the was to rect material information ties and Benefits Committee. options under an regarding their status and Equal Employ- employee plan. benefit 1988, During hired several outside PNG Advisory an amicus Council has filed efficiency consulting to conduct studies firms support in curiae brief of the defendants. ways to decrease costs and in- examine efficiency company’s opera- crease the Because statements form the studies, with these Taylor’s against the defendants tions. connection basis of suit first, downsizing options, in- Burgunder, considered has not sued several early cluding of an retirement in- logic, the offer as a matter address company’s pen- plan program through the question presented a adminis- centive —whether Taylor, employed during sion who was trator is liable for statements made indi- manager in period general as a have been selected as non-fidu- this PNG’s viduals who System department, participated ciary agents by plan administrator Information fiduciary obligation efficiency studies and discharging it in its -submitted assist boss, Amos, though report Scotty in which he to administer a even such indi- to his that, changes im- formally plan concluded if certain were viduals are fiduciary. Taylor’s department oper- sponsor, plemented, could who is not a We answer affirmative, employees. report In his question in the and conclude ate with six fewer this early responsible any Taylor suggested an retirement incen- that the defendants are by Burgunder plan tive method to reduce his material misstatements made as department’s manpower. During the latter Taylor regarding possible since, 1988, Taylor, counseling Tay- portion started work at pension plan retirement, minimum, 1959, lor, began acting, at a PNG in to consider was, apparent authority an of while he was aware that PNG consistent within his as will, however, considering early suggestion, an re- the defendants. We affirm the with U.S.-, 622, brought against 114 S.Ct. 126 L.Ed.2d 586 also has a claim alleging fiduciary obligations (internal omitted). un quotation a breach of its marks PNG has Magistrate Judge granted der ERISA. The designated such an election and has summary judgment PNG's on this motion for plan as Annuities and Benefits Committee circumstances, claim, concluding under the election, ministrator. Given this PNG is not subject, capacity PNG was not sponsor, in its as sponsor, subject, capacity employer/plan in its fiduciary obligations. We ERISA's id., fiduciary obligations. See ERISA's agree. employers While “ERISA allows to wear ("As employer, [the an F.2d at 133 neither plan'sponsor two and act both as hats” sponsor] an nor its business decision to offer administrator, employer can elect to wear subject early program retirement were only sponsor may designate, “hat” and Thus, duties.”). Taylor's ERISA's 402(a)(1), pursuant to' ERISA 29 U.S.C.A. properly limited in claim of breach is 1102(a)(1) (1985), separate entity case to the Annuities v, Philadelphia administrator. Fischer Electric and Benefits Committee. 130, Cir.), (3d cert. denied- 1, downsizing as a March 1989.... program incentive would also like to tirement option. my change retirement date spe- should a package proposed cial retirement or 1989, Tay- During the first two months planned on or before 3-1-89. Burgunder about whether PNG spoke lor adopt would App. Taylor in at 34a. fact retired on March enacted, and, program if such a were August roughly 1989. On five months made retroactive to en- whether it would be later, the Annuities and Benefits Committee retiring compass employees before the an- announced that an While, program. nouncement of the as we adopted by had been PNG’s Board Di noted, Burgunder not a have member rectors and would be available for Committee, the Annuities and Benefits retiring September between 1989 and November was authorized defendants concede that he 1, program 19 This was not made 89. rights employees op- their and “to advise Taylor— retroactive to —such Appellees tions under the Pension Plan.” 1, retiring prior September to Moreover, generally Br. at 21. it was under- Burgunder that stood announcement, Following Taylor this person was the with whom brought against suit speak regarding possible should contending that the statements made to him plan. Taylor represents pension that by Burgunder regarding possible retro- discussion, during particular Burgunder one application early pro- active retirement told him that he believed should an gram misrepresentation by constituted a offered, early program retirement it plan fiduciary. parties ERISA The consent- might apply retroactively. specifically, More adjudicated by Magis- ed to have this case a Taylor stated: 636(c) (1993), Judge, § trate 28 U.S.C.A. During prior I and to the March 1st date concluded that the statements made Bur- had had discussions with Mr. gunder Taylor misrep- did not constitute possible rumors relative to and studies resentation, and hence the defendants had may going that have been on that could fiduciary obligation. not breached their He early program, lead to an retirement and it granted therefore the defendants’ motion for during points one of discussion those summary judgment. where talked with Mr. about people retiring, other that were and he

gave me the —he told me at that time that appeal Magistrate On this any if believed that there would be order, Judge’s authorized 28 U.S.C.A. programs retirement offered 636(c)(3) (1993), § the defendants ask us to that it would make retroactive t to. ground affirm on the was no 1st, people January retired from until such plan administrator on behalf of the they might program. time as offer the speaking possible when App. at 8b-9b. continued: or, pension plan alternatively, changes in the exactly

I can’t recall what conversa- Magistrate Judge’s on the basis of the rea retroactivity tions were about the other soning misrepresentation was no there if than he believed reviewing as a matter of law. an order was announced or was of- granting summary judgment ple we exercise might fered —that be a better word —it- review, nary applying the same standard that might people be retroactive to these governed That the district court. standard talking we were about. summary judgment provides that should be (cid:127) App. at 33b. rendered if the evidence is such that there is conversations, Following genuine no issue as to material fact and these on Novem- 30, 1988, Taylor judgment ber an- moving party tendered written that the is entitled to nouncement of Liberty his intention retire: as a matter of law. Anderson v. Inc., 242, 248, 106 Lobby, 477 S.Ct. accept my request permission U.S.

Please (1986). 2510, 91 employment retire from active effective L.Ed.2d 202 986 material complete and correct

II. beneficiary’s options and is not status about a A- idea.”)); Bixler v. Central see also a novel members of the Annuities Program, Penn. Teamsters Health-Welfare Committee, plan administrator Cir.1993) Benefits (3d (recognizing F.3d fiduciaries, re plan, are of PNG’s obligation have “an administrators with re “discharge quired [their] duties complete accurate information convey solely in interest of spect [the] circumstances”). beneficiary’s material to the and beneficiaries.”2 obligation in the con- this panel restated 1104(a)(1) (1986). 404(a)(1), 29 U.S.C.A. partici- counsel plan fiduciaries who text of scope of We addressed adoption of pants regarding the circum obligation under a similar set plan: amendments to Philadelphia Electric stances Fischer not that ERISA does to add we hasten There, employees at 130. F.2d “duty clairvoyance” on fiducia- impose a (“PECO”) Company Philadelphia Electric no is under An ERISA ries. counselors benefits had PECO’s approached precise predictions offer obligation to any ear questioned them about whether Rather, changes to its about future being plan was con ly participants’ answer obligation is to considering Although PECO was sidered. forthrightly, a that does questions plan, bene incentive fiduciary to its internal require the disclose counselors, pursuant explicit fits sub- interfere with the deliberations nor manage senior from PECO’s instructions bargain- aspects of the collective stantive ment, plan participants informed the may plan ing process. A administrator knowledge such they no had misrepresenta- material make affirmative participants who retired plaintiffs, plan plan tions to early retire announcement of before the plan. Put pension benefits employee plan, alleged that speaks, simply, plan administrator when fiduciary un its duties had breached PECO truthfully. speak it must making material by affirmative der ERISA (internal Fischer, quotation F.2d at 135 pen misrepresentations PECO’s omitted). citations marks and against action PECO plan. The sion alleged grounded violation on obligation, contended this' PECO Given capacity plan as administrat obligations in its made benefits statements summary granted district court or.3 The misrepresen- not affirmative counselors were plaintiffs ap judgment for PECO and the tations, company officials not told since had pealed. taking among place the discussions them of management regarding contem- senior analysis by panel began its The Fischer incen- adoption of an plated case law recognizing that well established rejected panel program. The Fischer tive a fi- plan have provides administrators district this and reversed argument affirmatively obligation not to misre- duciary summary judgment, conclud- grant court’s plan participants. present facts to material alleged, given facts Fischer, ing (citing Eddy v. F.2d at 135 responsible for statements 751 administrator Ins. Colonial Life counselors, (“This and that (D.C.Cir.1990) the benefits communicate made above, magistrate judge in his chose focus which the Annuities 2. As members of noted has are the relevant defen- and which court Committee Benefits memorandum action, alleged has disposition dants in this of this disposed of in note 1. part however, not, breach on the that Committee the need claim does obviate by Burgunder, Su- made Taylor's parallel fidu- properly address claim pervisor Employee therefore Benefits. It is part ciary on the breach Annuities appropri- necessary analyze accurately under Committee. Benefits appeal magis- legal Taylor's ate doctrine judge’s of this We ac- trate knowledge dismissal action. supra n. 1. See alleged has also a fiducia- upon part ry a claim on the breach PECO, pare reports concerning as participants’ which was well bene- fits, sponsor, had therefore breached its as and calculate the costs of alternative fiduciary obligation affirmatively mis- plan to not amendments on behalf of the plan partic- represent material information Appellees ministrator. Br. at 21. Given that ipants: Burgunder’s activities are limited to these functions, ministerial argues agree

PECO that these communications administrative cannot be as “affirmative with the defendants that characterized is not a misrepresentations” fiduciary. because “when the Department Regulation of Labor they 2509.75-8, 2509.75-8, benefits counselors ... stated that § Q 29 C.F.R. A& [early no retirement] knew of their individuals, provides D-2 that -such whose representations ... This were correct.” activities are limited “within framework of do, will not for the explanation policies, interpretations, rules, practice's, and obligations owed to the procedures persons, other fiducia- as were owed PECO administra- respect plan,” ries with to the cannot be obligations tor. circum- These cannot be individually liable fiduciaries under by building a wall” vented “Chinese around ERISA, they since fail to exercise “the dis- plan partici- those on whom cretionary authority discretionary or control” pants reasonably rely infor- plan required over the imposi- for the direct guidance mation and about retirement. fiduciary liability. tion of See ERISA omitted). Fischer, 3(21)(A), 1002(21)(A)(West (emphasis 994 F.2d at 135 29 U.S.C.A. .§ Supp.1993). B. acknowledging that had a fidu- While While is not himself a fi ciary obligation administrator not to (and duciary respect to the he is materially misrepresent regard- action), not a defendant in this he did func ing possible changes pension plan, in PNG’s tion, regulations, non-fiduciary under the as a present the defendants contend defendants, agent of assisting the them in obligation have not violated this Bur- since discharging authority responsibili their and gunder was not a member of the Annuities administrator, ty, plan as to “control and and Benefits Committee and was not other- manage operation the and administration of fiduciary. attempt wise a defendants 402(a)(1), § plan.” the 29 ERISA U.S.C.A. Fischer, distinguish this case from the where 1102(a)(1) (1986). § While is for misrepresentations allegedly by. were mally employee PNG, plan sponsor the employees benefits counselors who were the performed plan his activities for the on be administrator, plan of the PECO. In this defendants, plan half of the administrator action, the Annuities and Benefits Commit- sponsor. plan and not on behalf of the tee, PNG, fiduciary, and not is. the named Burgunder performed conclusion that these hence, assert, they and the defendants can- administrator, plan tasks on behalf of the the misrepresen- not be liable for affirmative fiduciary respect plan, named with the plan participants by Burgun- tations made to regulations. provide from clear the These der, employee, possible changes about discharging fiduciary responsibili “[i]n pension plan. agree to PNG’s While we ties, respect plan may with to a Burgunder was not a member' of Annui- rely persons perform purely on ... min Committee,' ties and Benefit and otherwise plan,” isterial functions for such such as “ad agree not we cannot vising participants rights options of their and

with the defendants that was not 2509.75-8, plan.” Reg. § under the DOL 29 acting speaking on their behalf when with 2509.75-8, Q § D-2 C.F.R. & A & FR-11 Taylor. (emphasis added); 2 see also JEFFREYD. Employee MAMORSKY, Burgun The defendants concede that Benefits Law: Beyond (1993) authority, (recog § Supervisor 12.06[4] der had actual as of ERISA and Benefits, Employee pursuant Reg. nizing to advise to DOL 2509.75-8, rights options committee, plan, pre- acting plan § their and under the as 988 perform C.

ministrator, agents to “select[ ] can functions”). ministerial Having concluded noted, concede, have as we The defendants defendants, and acting on behalf regula- governed by this Burgunder is PNG, performing the functions out authority tion, had actual and that he above, Bur consider whether lined we must Employee Benefits “advise Supervisor of acting scope of his gunder was within rights under options their and employees of authority agent the defendants in as an Appellees Br. at Pension Plan.” making representations to authority originates from the defen- This plan application of possible retroactive dants, from and not consideration amendments under sponsor, for the administrator making In this determina plan sponsor. fiduciary obligation to entity is the agency, tion, governed by the law of we are operation and ad- manage the- “control and developed interpreted and as a matter plan.” ministration and law. Firestone Tire federal common See 1102(a)(1) (1986). 402(a)(1), § 29 U.S.C.A. Bruch, 101, 110, 489 109 Rubber Co. v. U.S. contrast, PNG, á plan sponsor, is not 948, 954, 103 L.Ed.2d 80 S.Ct. correspondingly has no and (“[C]ourts common develop are to a federal Thus, appli- under the administer the rights obligations under ERISA law of and acting as a regulations, Burgunder was cable regulated plans.”); Franchise Tax Board (the non-fiduciary agent, of the defendants Trust, 463 Laborers Vacation Construction (the administrator) and not PNG 2841, 2854, 1, 25, n. n. 108 S.Ct. U.S. participants of their sponsor) “advising (1983) (“ body of 77 L.Ed.2d 420 Federal ‘[A] plan.” Depart- rights options under the developed by the law will substantive 2509.75-8, Regulation § of Labor involving rights courts to deal with issues 2509.75-8, Q A & D-2. C.F.R. obligations private under welfare and rea- is consistent with our This conclusion plans.’” (quoting remarks of Sen. Fischer, that a soning in where we held Cong.Reo. 29942)); National Javits “fiduciary obli- violates its Scouting, Assur Football Inc. v. Continental plan participants” when gations owed to Cir.1991) (10th ance “those on whom (examining “under the federal com whether reasonably rely agency” of a fidu mon law of guidance retirement” make mate- apparent ciary within his actual or possible rial misstatements authority). company’s pension plan. changes to a Fisch- implicit regard, recognize In that we er, at 135. The fact that the bene- 994 F.2d assumption holding in in is the our Fischer misrepresenta- who made the fits counselors counseling participants about that in the employees of tion in Fischer were the PECO possible amendments to the the PECO ours. distinguish does not that case from acting were within their benefits counselors employees acting in as the Fischer were authority agents as of the administrator. agents capacity of in its PECO limitation of fidu- particular, In we read our ministrator, sponsor. employer/plan not as ,to liability employees (“As ciary “those on whom employer, id. at 133 neither See reasonably rely impor- plan participants for PE nor its business decision to offer Co guidance about retire- tant information' and program subject to were (internal legal that individ- quota- ment” as a conclusion such duties.” ERISA’s omitted)). minimum, ap- operate, uals at a within their Like the benefits tion marks Fischer, authority provide information Burgunder acting parent to such counselors in was guidance plan participants, to on behalf to the not the and assist defendants sponsor, discharging in obli- of the administrator. The au- manage operation Burgunder admit that had actual gation to “control and the here rights thority of their plan.” “advise[ ] and administration of the 1102(a)(1) (1986). Appel- 402(a)(1), options § and under the Pension Plan.” 29 U.S.C.A. Moreover, possible it uneontested Br. at 21. is in lees the (“I reasonably plan. App. accepted relied on at 41b that his comments key person because he’s the in Burgunder information the retire- Considering process Peoples guidance about retirement. Natural atGas retired.”).. record, Moreover, light in time I these facts of the entire this belief was in in that like the benefits counselors reasonable the' evidence conclude demonstrates Fischer, plan participants generally that Burgunder was within his considered agent Burgunder authority person speak regard-. as an administra- with tor, ing possible changes the members of the Annuities and Bene- in retirement benefits. Committee, counseling plan partici- light in of this reasonable fits belief about what pants regarding possible changes plan. Burgunder provide, was able to defendants’ authorization of Our also accords with estab conclusion representative plan partici- be their apparent authority. It is principles lished pants, and the defendants’ lack of effort to (1) apparent authority well settled “re that limits, any scope Burgun- announce to the person sults from manifestation authority, der’s it was a short and reasonable agent” only another “exists step plan participants, Taylor, such as the extent that it is reasonable for the third able, only believe that person dealing agent with the to believe that possessed specific authority, but indeed agent is authorized.” Restatement possible to counsel them about amendments Agency (1958). (Second) 8 cmts. a & c plan. to the Telephone In our recent in American Telegraph conclude, therefore, & & Pro Conserve We Winback (3d Cir.1994), gram, applying minimum, acting, at a apparent with concept authority apparent authority under the agent the defendants coun- agency, seling Taylor federal common law of we held that regarding possible changes in authority “[ajpparent arises in those situa company’s pension plan. Given this au- principal persons tions where the causes thority, the defendants will be liable for agent reasonably whom the deals believe misrepresentations affirmative material authority....” by Burgunder has Id. at concerning (internal omitted). quotation marks application plan’s early retroactive re- tirement'incentive It is uncontroverted both elements necessary apparent for the existence of au- D. First,

thority present are this case. undisputed vesting Burgunder defendants’ presented We therefore are with the authority with the to “advise question alleged whether state rights options their under the Pension ment to that “he believed that if an clearly Plan” constitutes a manifestation was ... offered agent. he was their retroactive,” might ... app. at 33b Second, plan participants, Tay- (emphasis supplied), such as constituted a material lor, reasonably Burgunder spe- misrepresentation. agree Mag that We with the believed cifically authority law, Judge had the to counsel istrate as a matter of no possible about amendments to reasonable fact-finder conclude that could plan. Taylor actually Burgunder’s misrepr that Bur- believed statement constituted a gunder authority had the to counsel esentation.4 alleging plan partici- In addition to that the defendants mis- relevant material information to represented regarding pro- pants beneficiary spe- material facts "about which the has not Bixler, posed Taylor retroactivity, cifically inquired,” amendment's con- 12 F.3d at we do present tends that breached an affirmative not believe that the facts of this case issue, possible to inform when and therefore we will not it. Dur- address employee ing Taylor amendments to an benefit are that re- the time made his decision retirement, by plan sponsor. garding under serious consideration the effective date of his he recognize ignorant While we that in certain instances a was not of the fact that PNG was seri- obligation ously considering early has an affirmative disclose retirement incentive disappointed.” expectation has been of Bur- when that at the time uncontested It is 107, 148 Mass. Darling, 20 N.E. Taylor, questions Deming

gunder’s statement (1889). early retire- would enact PNG whether it would plan, and whether incentive ment yet undecided retroactively, were both apply III. plan sponsor,

by PNG. Given that sum, although that In we conclude regarding decision yet to make a had final responsible for material are defendants amendment, conclude that prospective Taylor by Burgunder to made misstatements not violate their did the defendants in possible PNG’s Taylor merely confirming to by obligation by Bur- allegedly made plan, the statements an amendment was adoption such that the law, not, as a matter of constitute gunder do by expressing a rea- under consideration therefore, will, af- misrepresentation. We scope possi- opinion as to the sonable Magistrate Judge firm the order clearly reflects The record amendment. ble request for sum- granting the defendants’ all ac- Burgunder’s prediction judgment. mary Burgunder based his reasonable. counts (1) an grounds: two outside prediction on COWEN, concurring. Judge, Circuit early a retroactive suggested had consultant join a member I program; and I in Parts retirement and.HD directors, Flinn, judg- concur as to the Mr. and therefore board of join I unable to in Burgunder had talked about in this case. am ment whom IIA-C, however, scope, had stated I believe possible Parts because amendment’s sweeps broadly making majority’s opinion retroac- more supported presented justified the facts under tive. than here. cry statement is a far Burgunder’s alleged the benefits the statements

from in this case is a made- At issue statement that “there was defi- counselors Fischer Burgunder, Peoples National John nitely nothing planning,” when fact in the Employee Ben- Company’s Supervisor of Gas under serious con- an amendment was efits, employee such Taylor, a former to Thomas contrast, by company officials. sideration Company Peoples Gas National Taylor Burgunder’s to counsel attempt (“PNG”), retroactivity of concerning the prediction on his offering his based discus- pension plan. potential amendment to PNG’s board a member of PNG’s misrepre- sions with Taylor, Burgunder According to misrepresentation. was not a directors early offered an to him that sented if get would conceded state- if retired its benefits even before nothing guess more than his “best ment was Specifically, plan was the incentive enacted. may should an retire- as to what occur Taylor alleged that: adopted.” App. at 13a. package be An date, reasonably During prior to the March 1st I honest statement belief had with Mr. constitute a had discussions grounded in fact mis- does to rumors and studies recog- Holmes relative representation. Justice As context, may going on that have could rule of law is been “[t]he nized another program, and to an hardly regretted, it is considered lead to be when points discussion hope during one of thosé easily insensibly word of or how with Mr. by an interested where talked expectation are converted retiring, people and he quality other -that were memory into or value occasions, compa- Indeed, multiple likelihood of the Taylor suggested the in his own effi- an, ciency report early enacting the ny's retirement such amendment way depart- right, to reduce his specifically be instituted as in his the letter and he reserved through manpower, he was aware his ment’s resignation, change retirement date management upper with of PNG discussions 1, if such an amendment were from March 1989 that such a was under consideration. enacted before that time. Moreover, Burgunder, on discussed

991 R.R, (7th gave 299, me the —he told me at that time that land and Pac. 772 F.2d 303 believed, Cir.1985) (it any early that if there would be “elementary is an maxim of our should, 1989, programs offered in legal system” retirement that a court decide people would make it retroactive to “only it”), denied, the case before cert. 475 1st, January 1047, retired from until such time 1265, 574; U.S. 106 S.Ct. 89 L.Ed.2d they might program. offer the Mississippi Shamloo v. State Bd. Trustees Higher Learning, 516, Insts. added). 620 F.2d App. (emphasis He contin- 8b-9b (5th Cir.1980) 524 (expressing concern that ued: cases be decided on the legal narrowest exactly I can’t recall what his conversa- available); grounds Finley Hampton, v. 473 retroactivity tions were about the other 180, (D.C.Cir.1972) F.2d 189 (explaining that than he believed that if an courts do not decide hypothetical controver program was announced or it was of- sies). proposition corollary This is a to the might fered —that better word —it rule that federal courts are not to render might people be retroactive to these advisory opinions, but rather are to decide talking about. were specific parties issues for disputes. with real added). App. (emphasis at 33b See, Korioth, e.g., 1274-75; 523 F.2d at see majority correctly recognizes, As the Leon, 897, 963, also United States v. 468 U.S. magistrate judge adjudicated this case 3430, 3447, (1984) 104 S.Ct. 82 L.Ed.2d 677 concluded that the Bur- statement (Stevens, J., (“[WJhen concurring) the Court gunder that he believed the goes beyond necessary what is to decide the would be retroactive did it, only case before encourage can misrepresentation. Taylor not constitute v. perception pursuing that it is its own notions Peoples F.Supp. Natural Gas 843 52- policy, of wise social adhering rather than (W.D.Pa.1994). Agreeing magis- 53 with the role.”). judicial judge, majority trate in IID holds Part majority The statements the law, makes con- that as a no matter reasonable fact- cerning possible liability of ERISA fidu- finder could conclude that state- ' misrepresentations ciaries due to of their misrepresentation. Maj. constituted non-fiduciary agents run afoul of this rule Op. however, Inexplicably, at 989. before majority’s holding because the that there was disposing of this ease on the unassailable misrepresentation no put here is sufficient to grounds aptly magistrate out set Moreover, majority’s this- case to rest. judge, majority in chooses Parts IIA-C explore agency particularly choice to law is pose questions and answer its own (1) ill-advised because we have not had the relationship between ERISA fiduciaries magistrate judge’s thinking benefit of the cases, agents and their unlike the case at (2) findings matters, on these hand, party misrep- where a demonstrates a argued these issues were neither nor briefed majority resentation. The concludes that a counsel, majority breaks con- plan administrator can be held liable for a ground siderable new in the area of ERISA fiduciary duty breach of a misrepresenta- fiduciary liability. tions administrator’s non-fiducia- n ry agents. Because the reaches out majority’s opinion states that the An- squarely to decide an issue that is not before Sys- nuities and Benefits Committee of the us, join I am unable to in Parts IIA-C of the Plan, tem Pension administrator and majority opinion. matter, co-defendant can be lia- held It is well general by Burgunder settled law that ble for statements because “[cjases are be decided on the scope narrowest within the of his legal available, grounds apparent authority and relief is to be as an of.the carefully dispute tailored to the making representations nature of the administrator in Rias, Taylor. before the court.” United v. magistrate judge States (5th Cir.1975) case, however, (quoting disposing completely 120 n. F.2d of this Briscoe, (5th question Korioth devoid of references to the Cir.1975)); Chicago, see also In re Rock Is- whether can be held extremely failing makes it non-fiduciary gunder, a that of its

liable for analysis the a careful of perform appar- difficult scope of their aeting within the agents authori apparent of the Indeed, possible applicability opinion, the authority. in his ent Burgunder that' ty doctrine. PNG asserts only conclu- judge reaches two magistrate employee of PNG and was not merely an First, there was concludes that sions of law. plan “separate distinct a member of the part employer duty on the of general nois The Brief at 21. Appellee’s any it is administrator.” of action to inform its does not judge’s factual recitation magistrate future. As he considering taking in the Bur relationship between considering touch on the even states, that PNG was fact “[t]he plan As the gunder and the administrator. is not package for 1989 authority majority recognizes, “apparent requires an em- information which principal the in those situations where (emphasis arises Taylor, at 52 ployer to disclose.” agent whom the deals added). persons with Second, that since causes he concludes the has author reasonably believe that informed that he was not “[pjlaintiff concedes (citing Tele Maj.Op. at 989 American ity.” made to offer had been that a decision & Conserve all, phone Telegraph v. Winback that this & program at early retirement Cir.1994)). Mr, (3d 42 F.3d at 1439 guess Program, simply best however, majority, fails to adduce sin may occur should an what convincingly demonstrates misrep- gle fact which “no program adopted,” there was employ caused plan that the administrator resentation, thus no breach Burgunder conclude that absolutely no ees of PNG to There is duty.” Id. at 52-53. representations to em by make authorized to position now advanced discussion of the n plan concerning potential amendm ployees majority plan the that the Accordingly, I am troubled the of the ents.2 held liable for statements could be majority’s analysis and concerned with the non-fiduciary agents.1 plan administrator’s logic deciding question without relevant magistrate importantly, the Even more facts. record be- judge’s factual recitation and the ma- Equally disturbing in this case is the pre- insufficient to establish the fore us are arguments jority’s willingness to advance relationship of the between the cise nature put appellant forward the Bur- that were not System plan administrator and Pension 22a, Taylor, App. portion testimony at and a Accordingly, majority opin- the 1. footnote one of testimony Burgunder, App. deposition slightly misleading when it first states-that ion is Taylor's testimony Magistrate Judge granted portion PNG's 39a-40a. In the motion "[t]he cites, concluding judgment Taylor simply summary majority on claim recounts his for that, that circumstances, people was not sub- feeling under the "felt comfortable” deal- that most ject, capacity plan sponsor, concerning to ERISA’s ing Burgunder in its with their retirement. fiduciary obligations” the con- and then draws that others felt never makes the claim "Taylor's is that claim of breach clusion relying Burgunder’s statements comfortable on properly in this case to the adminis- Further, limited . potential plan about amendments. Maj.Op. certain- at 984 n. 1. While it is trator.” Burgunder's testimony portion that the explain plan spon- ly sor, accurate to cites, Burgunder merely majority that he testifies fiduciary, majority's not a footnote "rumors” of a new retirement had discussed magistrate judge appear drew makes it as if the employees. program with employer between the of an the distinction matter, preliminary it is difficult to under- As a sponsor fiduciary duty and the as a give of “rumors” could stand how a discussion as a and Benefits Committee Annuities Indeed, could to a reasonable belief that rise magistrate judge did ministrator. authoritatively speak amend- to the issue of plan sponsor distinguish not even between importantly, it is hard sec- ments. Even more administrator in the discussion and the majority rely opinion. comprehend can on state- how the tion of his Burgunder, alleged agent, to con- ments (i.e., principal administra- clude that the majority Taylor's belief was states tor), representation to the amade because "evidence demonstrates reasonable authoritatively speak could Burgun- plan participants generally considered majority What the lacks amendments. person speak regarding possible der the Maj.Op. is a statement at 989 in retirement benefits.” give added). disclosing could principal, support proposition (emphasis of this concerning potential plan deposition amendments. portion advice cites a-

993 by previous precedents. the first instance and that were not briefed our ed majority by parties. repeatedly recog We have states that the conclusion it reaches is consis impropriety reaching nized the issues that tent our reasoning in Fischer v. Phila properly (3d delphia are not briefed us. United Cir.), before Electric 994 F.2d 130. — 1052, denied, Martinez-Hidalgo, U-.S.-, v. 993 F.2d 622, 126 cert. 114 States S.Ct. — (3d Cir.1993), denied, (1993). n. 10 cert. Fischer, 1057 586 however, L.Ed.2d -, 699, 114 merely S.Ct. 126 L.Ed.2d U.S. held that may “[a] administrator (1994); Chevrolet, Francesconi v. Kardon make not affirmative misrepresenta material (3d Inc., 18, Cir.1989); 888 F.2d 19 n. 1 H. tions to an Prang 169, Trucking Co. v. employee pension Local Union No. Fischer, plan.” benefits (3d 1235, Cir.1980); F.2d see also 994 F.2d at 135. We did not comment on the 291, Crawley, United States v. liability 293 possible of a administrator for (7th Cir.1988) (expressing concern over deci non-fiduciary agents. sions based on issues not majority’s refined the fires position While the may logical be a adversary presentation). opening Fischer, In his extension of I would have left our brief, Taylor simply argued that a decision as to whether such an extension is may materially plan partici justified not mislead a day to another when the issue is pant. Appellant’s Moreover, Brief at 11.3 presented. more squarely Accordingly, rely brief, reply Taylor his ing makes it clear that simply on Taylor the fact that failed to argument is that PNG is a and it misrepresentation case, demonstrate in this fiduciary duty conveying owed the com would affirm the magistrate. decision of the plete Ap and accurate him.

pellant’s Reply Taylor states, Brief at 2.

“PNG continues to assert its status as em

ployer only, Appellant to which the dis

agrees. majority [sic].” Id. at 1. Since the agrees apparently is not a PNG fiducia BEATTY, Petitioner, Gene

ry, Maj.Op. see at 983-85 it is difficult n. Taylor’s arguments see how make it neces sary pos to discuss the administrator’s DANRI CORPORATION & TRIANGLE liability sible due to statements non-fidu ENTERPRISES; Director, Office of ciary agents. specifically never Compensation Programs, Workers’ Unit- pressed appeal on the claim that because the Department Labor, ed Respon- States fiduciary, is a it should dents. non-fiduciary be liable for statements of its agents. Accordingly, No. 94-3227. counsel PNG and the Annuities and Benefits had Committee Appeals, United States Court of no occasion to evaluate this issue in their Third Circuit. proper argument briefs.4 Without and dis issue, cussion it is ill-advised reach Argued Jan. 1995. such claims. Decided 1995. March Finally, majority’s decision to reach liability issue of a administrator’s non-fiduciary agents is ill-advised because majority’s firmly conclusion dictat- is argued employer also argue, by way has an 4. PNG does of an alternative affirmative to inform its decision, grounds to magistrate’s affirm the future, considering taking action it is in the is not a and not, however, is not (2) that there are facts insufficient in this record fiduciary. It does reach the disputed argu- resolve certain The first issues. question of whether could bind the disposed non-fiduciary agent. administrator as a argument three. The footnote second becomes irrelevant once we conclude that there was no misrepresentation.

Case Details

Case Name: Taylor v. Peoples Natural Gas Co.

Court Name: Court of Appeals for the Third Circuit

Date Published: Mar 9, 1995

Citation: 49 F.3d 982

Docket Number: 94-3109

Court Abbreviation: 3rd Cir.