was cancelling the contract between them, Schlumberger and NSC negotiated a deal under which Schlumberger's employees (whom it therefore had to terminate for lack of work) would be encouraged to go to work for NSC instead--indeed, the companies agreed that Schlumberger would get $ 5,000 for each of its employees who accepted NSC's offer and went to work for the latter (944 F.2d at 28).
What was at issue in Bellino was the "transferred" employees' right to contractual severance pay under Schlumberger's preexisting contractual commitment to make such payments. Understandably the Court of Appeals held that Schlumberger's denial of such severance benefits to departing employees who had received offers from NSC for comparable jobs--something that was "contrary to the plain language of [Schlumberger's] Plan" ( id. at 29)--could not be justified. So far as Schlumberger was concerned the employees were terminated because of "lack of work" (that was the language of the severance pay contract, id. at 30), so that the employees won and Schlumberger lost.
It takes only that recital of the facts to demonstrate Bellino's total inapplicability to the situation here--to University's purely internal restructuring. Just as Bellino described Schlumberger's attempted reading (or rather misreading) of its unambiguous ERISA plan documents as "tortured" ( id. at 32), so Pehr and his lawyers would inflict like torture on the unambiguous language of ERIP.
What has been said to this point is enough to dispatch Pehr's principal claim--that in which he seeks payment from the Plan. In what might be viewed as an attempt at overkill, however, University Mem. 10-11 also points out that the acceptance of Pehr's contention would have required it to treat every other transferred employee in the same way if it were to avoid a claim of discriminatory treatment (in that respect, Adams v. Ampco-Pittsburgh Corp., 733 F. Supp. 998, 1001 (W.D. Pa. 1989) holds that an employer's uniform denial of termination pay in earlier comparable situations would also lend support to its current interpretation of its ERISA plan provisions). That of course is somewhat of a bootstrap argument, so it will not be relied on by this Court--what controls here instead is the objective correctness of University's and Hospitals' treatment of Pehr, and thus of the other transferred employees as well. And that correctness is manifest.
Finally, Pehr's added claim that University and ERIP violated Plan § 12.3 by purportedly failing to give Pehr notice of their denial of his substantive claim, thus triggering their liability for payment of a statutory penalty under ERISA § 1132(c), falls of its own weight. It is defeated by the express holding in Kleinhans v. Lisle Sav. Profit Sharing Trust, 810 F.2d 618, 622-24 (7th Cir. 1987). Under Kleinhans, id. at 623 Pehr's demand for payment in his Complaint P 11 did not constitute a "request for information" so as to bring ERISA § 1132(c) into play.
Pehr also purports in his separate Count II--at the instance of his appointed counsel--to act on behalf of a class of University employees who underwent similar payroll transfers to Hospitals. This Court is of course well aware of the mandate of Rule 23(c)(1) that district courts are to determine the maintainability of putative class actions "as soon as practicable after [their] commencement. . . ." It normally conforms meticulously to that mandate and to the case-law-established corollary that a court's decision on what is commonly termed class certification should not address the merits of the litigation ( Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78, 40 L. Ed. 2d 732, 94 S. Ct. 2140 (1974)).
But there is something very disquieting about the notion that a court must always accord first priority to the issue of class action certification--at least no such treatment seems called for in situations where as here (1) the plaintiff's own individual claim appeared from the outset to be wholly without merit even in facial terms and (2) the defendant is not urging that it should get the benefit of a favorable determination on the merits against all members of the putative class (that would be the effect of a class-action certification followed by the court's ruling on the substantive claim). If the defendant is not concerned on that score--whether because it believes that it is unlikely to be the target of repetitive claims (probably because of the total lack of merit that it perceives in the claim) or otherwise--it is difficult to see any legitimate complaint about the court's prompt addressing of the merits (or far more likely the lack of merit) of the individual plaintiff's position.
On the other side of the coin, if the defendant wins on the merits against the original plaintiff without the benefit of a prior class certification, it cannot then urge defensive claim or issue preclusion against any other plaintiff who may sue on the same type of claim later.
In a sense the filing of a class action is something like forming a corporation. Tax and corporate practitioners know that the latter procedure is virtually costless, both because of the ease of corporate formation and because both the formation and the funding of the corporation are tax-free. But getting out of a corporate structure once it is in place can be painfully expensive in terms of the income tax consequences. Hence the knowledgeable practitioner approaches corporate formation gingerly and not as a casual and thoughtless decision.
Just so with the class action. It is all too easy to throw the necessary allegations, including those supporting the Rule 23 preconditions to certification, into a complaint. That too is a seemingly costless step. But once the class environment is created, extricating oneself from the resulting procedural entanglements can be most troublesome--consider, importantly, the mandate of Rule 23(e) that prohibits the dismissal or compromise of a class action without court approval and that requires that all class members must be given notice of the proposed dismissal or compromise in such a manner as the court may direct. Small wonder that Professor Arthur Miller some years ago uttered a kind of think-before-filing caution as to class actions (see his An Overview of Federal Class Actions: Past, Present & Future, 4 Just. Sys. J. 197, 208-09, 215 (1978)) that has since become a general principle embodied in Rule 11--this time on pain of suffering sanctions for not doing so.
In terms of the present case, it has made good sense for this Court to address Pehr's individual cause of action rather than embarking on the class certification issue. Indeed, Pehr's appointed counsel have indirectly confirmed that by not having devoted even a single sentence of their over-12-page responsive memorandum to the class-action claim, even though defendants had specifically addressed Part IV of their opening memorandum to that subject (D. Mem. 12-13).
To assure a final order terminating this litigation, this Court dismisses Complaint Count II, the prospective class-action count (see Glidden v. Chromalloy American Corp., 808 F.2d 621 (7th Cir. 1986)--but because there has been no certification of a class here, such dismissal is of course without prejudice to any other putative class member's future effort to assert any claim against University or ERIP.
There is no genuine issue of material fact, and University and ERIP are entitled to a judgment as a matter of law on Pehr's Count I. Pehr's individual claims are dismissed with prejudice. As for Count II, for the reasons already stated that Count is dismissed without prejudice to any future effort by a putative class member other than Pehr to assert any claim against University or ERIP.
Milton I. Shadur
Senior United States District Judge
Date: July 14, 1992