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JACKSON v. E. J. BRACH CORP.

August 14, 1996

ROY A. JACKSON and CARLOS E. SERMENT, Plaintiffs,
v.
E. J. BRACH CORPORATION, a Delaware corporation, Defendant.



The opinion of the court was delivered by: MORAN

 Plaintiffs Roy Jackson and Carlos Serment brought this action against E.J. Brach Corporation (Brach), their former employer. Brach denied plaintiffs severance benefits after they refused to sign a general release waiving all potential claims against Brach, including claims of discrimination based on age, race, or national origin. In count II of the second amended complaint, plaintiffs allege that defendant refused or failed to provide them with information which they requested in writing regarding the severance plan. They claim that this refusal or failure gives rise to penalties under section 502 of the Employee Retirement Income Security Act of 1974 (ERISA). 29 U.S.C. 1132(c)(1). The parties have filed cross motions for summary judgment on count II. We grant plaintiffs' motion and deny defendant's.

 FACTS

 In July, 1994, Brach terminated Serment and Jackson, employees who had worked for the company since 1965 and 1967 respectively. Upon terminating them, the company offered plaintiffs severance benefits on the condition that they sign a release form. Neither plaintiff signed the release nor received any benefits under the plan, and Brach has since withdrawn its offer.

 Count II of the complaint is premised on defendant's alleged delay and ultimate failure in providing plaintiffs with certain documents which they had requested in order to determine their rights under defendant's severance plan. It is undisputed that shortly after terminating plaintiffs in July, 1994, defendant, upon receiving a written request from plaintiffs' counsel for copies of Brach's employment policies relating, inter alia, to severance benefits, forwarded to plaintiffs a copy of the then-current version of its severance policy. On August 23, 1994, however, plaintiffs' counsel submitted a second written request to Henry M. Wells (Wells), Brach's senior vice president of human resources, for copies of a number of additional documents related to Brach's severance policy, including past versions of the policy and "... all filings made by Brach and all communications to Brach's employees required under ... ERISA" (def. exh. 3). On August 26, Wells responded, noting that plaintiffs had already been provided with "copies of the relevant policies" (pl. exh. 2). He declined to provide plaintiffs with any additional documents (id.).

 When Brach announced on October 18, 1994, that it would withdraw its offer of severance benefits to plaintiffs in less than a week, plaintiffs filed with this court a motion for a temporary restraining order, or in the alternative, a preliminary injunction, to compel defendant to produce the requested information. At the hearing on this motion, we declined to rule, but ordered defendant to produce at least those public documents which it had filed with the Department of Labor (see Report of Proceedings, 10/21/94, p.22). It is undisputed that after the hearing defendant in fact did forward certain documents to plaintiffs, including a 1993 version of the severance plan and two IRS Form 5500s (annual reports) which had been filed for the years 1992 and 1993. After receiving this material, however, plaintiffs continued to assert that the document production was insufficient, and again moved for a preliminary injunction. We denied that motion.

 Finally, on November 4, 1994, plaintiffs filed an amended complaint adding count II, a claim premised on defendant's alleged violations of § 502(c) of ERISA. *fn1" Count II of plaintiffs' second amended complaint realleges the same claim. We denied defendant's motion to dismiss this count in our May 1995 memorandum and order, ruling that plaintiffs had stated a claim under § 502. Prior to filing its motion to dismiss, defendant sent plaintiffs several additional out-dated versions of the policy. Defendant asserts that plaintiffs now possess all of the documents in Brach's possession that relate to the company's severance policy (def. memo, p. 6; Orozco dep., pp. 2,3). Both parties now move for summary judgment on count II.

 DISCUSSION

 A motion for summary judgment may be granted when there are no genuine issues of material fact and the movant is entitled to a judgment as a matter of law. Fed. Rule Civ. Pro. 56(c); Renovitch v. Kaufman, 905 F.2d 1040, 1044 (7th Cir. 1990). The movant must point to those portions of the record which demonstrate the absence of any genuine issue of material fact, Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986), and the reviewing court must draw all reasonable inferences in favor of the non-movant. See e.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970); Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991). When it is clear that the plaintiff cannot carry her burden of persuasion at trial on one or more elements, summary judgment is appropriate for the defendant. See generally Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Conversely, summary judgment for the plaintiff is warranted when it is clear that a reasonably jury could only find that the plaintiff has met her burden as to all the elements of her claim. See generally id.

 Under section 104(b)(4) of Title I of ERISA, the administrator of a welfare benefit plan, such as a severance plan, is required upon written request to furnish to any participant or beneficiary "a copy of the latest summary plan description [SPD], plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated." 29 U.S.C. § 1024(b)(4). Section 502(c) of ERISA vests a reviewing court with the discretion to impose a penalty of up to $ 100 a day on a plan administrator -- payable to the participant or beneficiary who submitted a written request to the administrator -- when it finds that the administrator "fail[ed] or refuse[d] to comply with a request for any information which such administrator [was] required by this subchapter to furnish ... (unless such failure or refusal result[ed] from matters reasonably beyond the contro of the administrator) ... ." Id. at § 1132(c).

 A violation of section 104(b)(4)'s production requirements gives rise to a reviewing court's discretion to impose section 502(c) penalties. See, e.g., Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115-18, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989); Jones v. UOP, 16 F.3d 141, 144 (7th Cir. 1994) (violations of § 1024(b)(4) requirements are punishable under § 1132(c)); Kascewicz v. Citibank, N.A., 837 F. Supp. 1312, 1320 (S.D.N.Y. 1993) (awarding § 1132(b) penalty to plaintiff for plan administrator's failure to distribute SPDs as mandated by § 104(b)). The issue presented in this case is whether a penalty is appropriate where an administrator fails to provide a participant with a document mandated by ERISA because the document no longer exists or was never created.

 As stated supra, defendant claims that it has provided plaintiff with every document in its possession related to its severance policy. Plaintiffs contend that even if this is true defendant would be in violation of section 502(c), since its "failure" to provide mandated information upon request is a de facto violation. Specifically, plaintiffs contend that defendant has failed to provide any SPDs, since the documents which it has produced disclose insufficient information to constitute SPDs under the requirements of 29 U.S.C. § 1022(b). They also argue that at least one of the annual reports defendant provided was an insufficient annual summary, that defendant failed to produce an annual report for 1991, and that defendant has produced no versions of modifications or amendments, even though it admits to amending the plan at least once (to add the release requirement).

 A. Out-dated documents

 We begin with plaintiffs' requests for out-dated documents, such as old SPDs, annual reports and modifications. We are not convinced that section 502(c) requires a plan administrator to provide such documents. Administrators are instructed, upon written request, to furnish "a copy of the latest [SPD] ... and the latest annual report." Id. at 1024(b)(4) (emphasis added). They are also required to provide any "instrument under which the plan is established or operated." Id. Outdated reports, summaries and modifications, whether or not they were ever created, do not fall into either category. It is true, of course, that the administrator's failure to produce these documents may have been at one time an ERISA violation that could have given rise to § 502(c) liability if a participant had requested them promptly (i.e. when they were the "latest" version of the plan). *fn2" ...


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