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March 10, 2004.

LINDA CALL, Individually and On Behalf of All Others Similarly Situated, Plaintiff,

The opinion of the court was delivered by: G. PATRICK MURPHY, Chief Judge, District


This matter is before the Court on Defendant's motion to dismiss (Doc. 48), Defendant's motion for summary judgment (Doc. 52), and Plaintiffs motion for summary judgment (Doc. 56). The Court held a hearing on September 15, 2003, and took the motions under advisement. For the reasons set forth below, Plaintiff's motion for summary judgment is granted, and Defendant's motions are denied.


  This action involves a claim asserted under the Employee Retirement Income Security Act of 1974("ERISA"), 29 U.S.C. § 1001-1461. The class representative, Linda Call, was an employee of Ameritech Corporation from May 28, 1968, to November 30, 1999, and was a "participant" in the Ameritech Management Pension Plan ("the Plan") within the meaning of Section 3(7) of ERIS A. When Ms. Call terminated her employment in November 1999, she elected to receive her Plan benefit as a lump sum distribution. The terms and provisions of the Plan as adopted and amended Page 2 were set forth in an instrument captioned " Ameritech Management Pension Plan (As Amended and Restated Effective as of May 1, 1995)" (the "AMPP95"). (See Exhibit A to Doc. 55.) Ms. Call was a "transition participant" and, therefore, entitled to a transition benefit (as those terms are defined in Supplement B to the AMPP95), because on May 1, 1995, she was within five years of being eligible for a service pension. As a transition participant, Ms. Call was entitled to a benefit in an amount equal to the greater of her transition benefit and her defined lump sum (DLS) benefit. On or about December 12, 1999, the Plan paid Ms. Call $219,312.14, which was the actuarial equivalent, determined in accordance with the "Eleventh Amendment" to the AMPP95, of the immediate annuity to which she was entitled under Section B-4 of Supplement B to the AMPP95. The parties agree that as a matter of arithmetic, the amount of the lump sum paid to Ms. Call was correctly computed under the terms of the Eleventh Amendment. However, if Ms. Call had retired on the day before the Eleventh Amendment was effective, the actuarial value of the B-4 immediate annuity she would have received using the 1983 Group Annuity Mortality ("83 GAM") table and the applicable Pension Benefit Guaranty Corporation ("PBGC") interest rates was $255,088.45.

  The parties agree there is no statutory or regulatory impediment to what the Plan seeks — diminished lump sum transition benefit payouts — and that the contest turns on the Plan language. Excepted from this agreement is the effect of the May 1, 1995, amendment which the Court will take up first in its analysis. The destination is clear enough but the route is tortuous, so some background is required for sure navigation.

  Ms. Call was a member of a class originally defined by this Court in the case of Malloy v. Ameritech, No. 98-CV-488-GPM (S.D. Ill. July 21, 2000). She was excluded from that class, however, after the Court amended the class definition on July 12, 2001. The Court entered summary Page 3 judgment in favor of a class of plan participants in theMalloy case, holding, inter alia, that the plan was required by its terms to use the PBGC interest rates for valuing lump sums and the 83 GAM table to value lump sum distributions made after January 1, 1994. See Malloy v. Ameritech, No. 98-CV-488-GPM (S.D. Ill. February 7, 2000).

  On August 26, 2003, this Court certified a class pursuant to Rule 23(a)(b)(2) of the Federal Rules of Civil Procedure defined as:
All participants in the Ameritech Management Pension Plan who qualified for a Transition Benefit, received a lump sum distribution of that Transition Benefit after July 1, 1999, and whose lump sum distribution was less than it would have been had 1) the participant resigned on the day of the Eleventh Amendment, and 2) his or her lump sum had been computed utilizing the interest rate used by the PBGC to value lump sums as of the year in which they received their distribution and the mortality table set out in Revenue Ruling 95-6 which is a blended table derived from the mortality table used by the PBGC for valuing annuities.
The Court also at that time appointed Plaintiff Linda Call as class representative.
  Ms. Call claims that the Plan administrator's application of Section 12.1 of the Plan is unlawful. That section provides:
Amendment. While it is expected that the Plan will be continued, either the Company or the Committee may terminate the Plan or amend the Plan from time to time subject to Supplement C; provided, however, that no amendment will reduce a Participant's accrued benefit to less than the accrued benefit that he would have been entitled to receive if he had resigned from the employ of the Employers and Related Companies on the day of the amendment . . . and no amendment will eliminate an optional form of benefit with respect to a Participant or Beneficiary except as otherwise permitted by law and applicable regulation.
(AMPP95 — Exhibit A to Doc. 55, pp. 31-32.) This section was in effect before the adoption of the Page 4 Eleventh Amendment and the legislation which authorized the Eleventh Amendment. Specifically, Ms. Call argues that the Eleventh Amendment to the Plan, adopted July 1, 1999, cannot serve to provide her with a lump sum transition benefit less than what she would have received had she retired on the date the Eleventh Amendment became effective. Through this Amendment, the lump sum provisions of the Plan were amended. Lump sum distributions made after July 1, 1999, would be valued as the greater of the distribution produced by use of (1) the PBGC interest rates for valuing lump sums and the UP-1984 mortality table or (2) the interest rate on 3 0-year treasury bonds and the 83 GAM table. The Plan argues that the administrator's interpretation of Section 12.1 is not arbitrary and capricious and is, accordingly, lawful because the administrator is granted discretion to interpret the Plan language.

  Ms. Call asserts that she and the members of the class should have received the lump sum distributions they would have received had they resigned before the Eleventh Amendment took effect, utilizing the factors this Court found were required in the Malloy case, that is, the 83 GAM table and the PBGC interest rates structure. The Plan argues that Ms. Call's payment was properly computed, and she was paid all she was entitled to receive.


  Under the well-settled standard, summary judgment is proper "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. Civ. P. 56(c); Cox v. Acme Health Servs., Inc., 55 F.3d 1304, 1308 (7th Cir. 1995). A genuine issue of material fact exists for trial when, in viewing the record and all reasonable inferences drawn from it in a light most favorable to the nonmovant, a reasonable jury Page 5 could return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant bears the burden of establishing that there exists no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

  If the movant meets this burden, the nonmovant must set forth specific facts that demonstrate the existence of a genuine issue for trial. FED. R. CIV. P. 56(e); Celotex, 477 U.S. at 324. Rule 56(c) mandates the entry of summary judgment against the party "who fails to make a showing sufficient to establish the existence of an element essential to the party's case, and in which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. When, as here, cross-motions for summary judgment are filed, the Court looks to the burden of proof that each party would bear on an issue at trial and requires that party to go beyond the pleadings and affirmatively establish a genuine issue of material fact. See Santaella v. Metropolitan Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997). Interpretation of an ERISA plan "is a subject particularly suited to disposition by summary judgment." Grun v. Pneumo Abex Corp., 163 F.3d 411, 419 (7th Cir. 1998) (citing Metalex Corp. v. Uniden Corp., 863 F.2d 1331, 1333 (7th Cir. 1998)).

  With respect to the motion to dismiss, the Court must take all allegations in the complaint to be true and view them, along with all reasonable inferences to be drawn therefrom, in the light most favorable to the plaintiff. Powe v. City of Chicago, 664 F.2d 639, 642 (7th Cir. 1981). A motion to dismiss is properly granted only if it appears beyond doubt that a plaintiff is unable to prove any set of facts which would entitle him or her to relief. Benson v. Cady, 761 F.2d 335, 338 (7th Cir. 1985) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). When the issue is exhaustion of administrative remedies, the ...

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