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Young v. Verizon's Bell Atlantic Cash Balance Plan

December 3, 2007

CYNTHIA N. YOUNG, ON BEHALF OF HERSELF AND OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
VERIZON'S BELL ATLANTIC CASH BALANCE PLAN, FORMERLY KNOWN AS BELL ATLANTIC CASH BALANCE PLAN, FORMERLY KNOWN AS BELL ATLANTIC MANAGEMENT PENSION PLAN, AND VERIZON COMMUNICATIONS, INC., AS SUCCESSOR IN INTEREST TO BELL ATLANTIC CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Morton Denlow

MEMORANDUM OPINION AND ORDER

Plaintiff Cynthia N. Young ("Plaintiff"), in an ERISA class action suit, alleges that Defendants Verizon's Bell Atlantic Cash Balance Plan and Verizon Communications Inc. (collectively "Defendants") calculated her pension benefits, and those of others similarly situated, using an improper formula. Before the Court is Plaintiff's motion to compel discovery. The discovery relates to Defendants' affirmative and equitable defenses, as well as Plaintiff's allegations set forth in her complaint. The Court held oral argument on November 28, 2007. For the following reasons and as stated in open court, the Court denies in part and grants in part Plaintiff's motion.

I. BACKGROUND FACTS

The history and facts of this case are extensive and, given the current procedural posture of the case, not yet fully before the Court. The Court provides as background only what is necessary to decide the present motion.

A. Plan History

Plaintiff represents a class of former Bell Atlantic and Verizon employees suing Defendants for their pension benefits, pursuant to the Bell Atlantic Cash Balance Plan, which later became the Verizon Cash Balance Plan ("Plan"). The Plan began as a "traditional" defined-benefit pension plan known as the Bell Atlantic Management Pension Plan ("BAMPP"). On December 31, 1995, Bell Atlantic converted the BAMPP into the Plan. To implement the transition to the new Plan, Bell Atlantic converted each Management Pension Plan participant's accrued benefit - expressed as a monthly annuity commencing at age 65 -to a lump sum "opening balance" in the Plan. Bell Atlantic accomplished this conversion by 1) calculating the lump-sum "cashout value" of each participant's Management Pension Plan benefit, and 2) multiplying that lump sum by a "transition factor" specified in the Plan.

Plaintiff asserts that the terms of Section 16.5.1(a)(2) of two versions of the Plan (adopted in 1996 and 1997) required Bell Atlantic to multiply the cashout value by the square of her "transition factor" multiplier to calculate her "opening balance." Defendants, however, have used the transition factor only once in all pension calculations.*fn1

Plaintiff initially sought additional benefits based on her transition factor claim, but the Verizon Claims Review Committee denied her claim. The Committee determined that although Section 16.5.1(a)(2) provides for application of the transition factor twice, this reference is a drafting error. It concluded that Bell Atlantic properly calculated Plaintiff's "opening balance" using a single application of her "transition factor" multiplier. Plaintiff objects to this application, along with other issues in her complaint. Among affirmative and equitable defenses, Defendants assert scrivener's error and request the equitable relief of reformation.

B. Discovery History

The Court previously considered the scope of discovery. In its July 30, 2007 Order, the Court held that Plaintiff could conduct limited discovery into the drafting history and facts directly related to the transition factor provision to properly assess Defendants' argument that the provision contained a scrivener's error. Young v. Verizon's Bell Atlantic Cash Balance Plan, 498 F. Supp. 2d 1101, 1107 (N.D. Ill. 2007). The Court also denied Defendants' request to delay discovery on the scrivener's error defense. Id. at 1108. The Court denied this request "so that all aspects of the merits of the case [would] be before the Court at one time for decision." Id. Although the Court denied Plaintiff's request for certain information regarding Defendants' defense of equitable reformation, the Court did so based on the fact that the issue was not fully presented by the parties. Id. The Court stated it would consider the issue once a fuller presentation by the parties was brought forth. Id.

Since the Court's Order, Plaintiff served Defendants with a second request for production of documents and interrogatories. In her requests and interrogatories, Plaintiff seeks discovery on Defendants' defenses of reformation, unilateral mistake and lack of authority, in addition to issues regarding insurance and damages, Defendants' retention and destruction policies, and Defendants' fact witnesses. On September 10, 2007, Defendants answered and objected to all of Plaintiff's requests and interrogatories. As a result, Plaintiff has now filed a motion to compel Defendants to produce all of the requested documents and to meaningfully answer its interrogatories.

II. LEGAL STANDARD

The Federal Rules of Civil Procedure allow broad discovery. Fed. R. Civ. P. 26(b)(1). Rule 26(b)(1) states that the "[p]arties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party . . . [and is of] discoverable matter." Id. Relevant information encompasses "any matter that bears on, or that reasonably could lead to other matters that could bear on, any issue that is or may be in the case." Greater Rockford Energy & Tech. Corp. v. Shell Oil Co., 138 F.R.D. 530, 534 (C.D. Ill. 1991)(quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)). The information sought "need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. 26(b)(1). Even if relevant, discovery will not be allowed if the ...


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