Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-93-01184/USCOURTS-ca10-93-01184-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF 

TENTH CIRCUIT 

REUBEN A. MAEZ, LINNEA K. MAESTAS, 

JANET M. COWDREY, PAUL SPIEKER, 

Individually and as Representatives 

of a Class, 

Plaintiffs-Appellants, 

v. 

MOUNTAIN STATES TELEPHONE AND 

TELEGRAPH, INC. d/b/a U.S. WEST 

COMMUNICATIONS, INC., a Colorado 

corporation; ENHANCED MANAGEMENT 

TRANSITION PROGRAM; ENHANCED 

MANAGEMENT TRANSITION PROGRAM REVIEW 

COMMITTEE; NEAL GREENHALGH; FRED L. 

COOK; A. GARY AMES; U.S. WEST, INC., 

a Colorado corporation; u.s. WEST 

MANAGEMENT PENSION PLAN EMPLOYEE 

BENEFIT COMMITTEE; JOHN G. SHEA, 

Defendants-Appellees. 

FILED . UIIIMd StaCII Coart of Apptau Tenth Circuit 

APPEALS 

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APR 19 1995 

PATRICK FISHER 

Clerk 

No. 93-1184 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. Nos. 91-S-2095, 92-S-0009 (consolidated)) 

Andrew T. Brake of Andrew T. Brake, P.C., Denver, Colorado (Lee 

Thomas Judd (with him on the brief) of Andrew T. Brake, P.C.; 

Eugene Deikman (with him on the brief) of Eugene Deikman, P.C., 

Denver, Colorado; and William D. Peterson (with him on the brief) 

of William D. Peterson, P.C., Denver, Colorado) for PlaintiffsAppellants. 

D. Ward Kallstrom of Lillick & Charles, San Francisco, California 

(Dirk W. de Roos (with him on the brief) of Faegre & Benson, 

Denver, Colorado; and Leon Marks (with him on the brief) of U.S. 

WEST, Inc., Denver, Colorado), for Defendants-Appellees. 

Appellate Case: 93-1184 Document: 01019282375 Date Filed: 04/19/1995 Page: 1 
.. Before SEYMOUR, Chief Judge, McKAY, Circuit Judge, and BELOT, * 

District Judge. 

BELOT, District Judge. 

Plaintiffs/appellants appeal the dismissal of state law and 

ERISA claims by Judge Daniel B. Sparr of the United States District 

Court for the District of Colorado. The claims and allegations in 

these consolidated cases are similar to those made against 

defendants/appellees US WEST Management Pension Plan and John G. 

Shea in Averhart v. US WEST Management Pension Plan (No. 92-1317), 

Sandgyist v. US WEST Management Pension Plan (No. 92-1321), and 

Sabell v. US WEST Management Pension Plan (No. 92-1375), three 

cases which were also decided by Judge Sparr. A separate panel of 

this court recently affirmed Judge Sparr's grant of summary 

judgment for the defendants in those cases. Averhart v. US WEST 

Management Pension Plan, Nos. 92-1317, 92-1321, 92-1375, 1994 WL 

588622 (lOth Cir. Oct. 28, 1994), reh'g denied, 1995 WL 77167 (lOth 

Cir. Feb. 21, 1995). 

I 

Defendant Mountain States Telephone & Telegraph, Inc. 

( "Mountain Bell") is a former subsidiary of defendant US WEST 

Communications, Inc. ("US WEST") , a regional holding company formed 

after the court-ordered divestiture of AT&T. Plaintiffs were 

formerly employed as managers at Mountain Bell and participated in 

US WEST's Management Pension Plan. 

* Honorable Monti L. Belot, United States District Judge for the 

District of Kansas, sitting by designation. 

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In January 1987, US WEST sought to reduce its work force by 

offering its managers a severance pay plan called the "Enhanced 

Management Transition Program" or EMTP. EMTP was designed to 

encourage voluntary termination or early retirement and operated as 

an unfunded welfare benefit plan subject to the Employee Retirement 

Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seg:. 

An Employee Benefits Committee ( "EBC") was established to 

administer the program. 

The EMTP offer consisted of two options: (1) immediate 

separation and one year's salary in severance pay; or (2) a three 

year leave of absence, with employee benefits, followed by 

separation and severance pay equal to fifty percent of one year's 

salary. On February 12, 1987, defendant A. Gary Ames, Mountain 

Bell' s executive vice president, issued a "management bulletin" 

urging Mountain Bell managers to "consider our incentive offer 

carefully." Plaintiffs' App. at 9. Ames stated that Mountain Bell 

would be "lean, effective and market-driven" in the future and that 

anyone uncertain about being a part of that future should 

carefully consider accepting termination under EMTP. Id. Ames 

further stated that, in the future, "[i] f we have more employees 

than we need to staff the market units, and if normal attrition 

won't correct this force imbalance, we may offer incentives for 

people to leave voluntarily. But those payments will amount to no 

more than six months ' salary. " Id. Portions of Ames ' s comments 

were published in an article in the February 18, 1987 issue of the 

MB Times, an. in-house newsletter distributed to Mountain Bell 

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Appellate Case: 93-1184 Document: 01019282375 Date Filed: 04/19/1995 Page: 3 
employees. Plaintiffs' App. at 11. Plaintiffs Maez, Maestas, and 

Spieker eventually decided to accept inmediate separation from 

service under EMTP option (1) . Plaintiff Cowdrey took a leave of 

absence under option (2) . 

In April 1989, US WEST implemented a voluntary severance 

program to reduce the number of director-level employees in the 

company. This program, called the Director's Program, offered 

certain director-level employees a choice of various severance pay 

options if they elected to retire or resign during 1989. This 

program was not available to managers like plaintiffs. Averhart v. 

US WEST Management Pension Plan, slip op. at 3, 1994 WL 588622 at 

*1 (lOth Cir. Oct. 28, 1994). 

On November 29, 1989, after plaintiffs had accepted 

termination under EMTP, the US WEST Board of Directors adopted a 

resolution authorizing the EBC to amend the Pension Plan, effective 

January 1, 1990, to provide certain special pension benefits to 

eligible employees who would elect between January 2 and January 

31, 1990, to retire as of February 28, 1990. This amendment to the 

Pension Plan, known as the "5+5 amendment," provided for a "Minimum 

Benefit" of adding five years of age and five years of service to 

participants with five or more years of employment as of February 

28, 1990 for purposes of calculating their pension benefits. 

Eligibility was generally limited to "active employee [s] on the 

payroll as of February 28, 1990, with five or more years of term of 

employment as of February 28, 1990." However, director-level 

employees who terminated during 1989 pursuant to the Director's 

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Program also were permitted to take advantage of the 5+5 amendment. 

Averhart, slip op. at 3-4, 1994 WL 588622 at *1. 

Although plaintiffs had already accepted termination under 

EMTP, they submitted claims for benefits under the 5+5 amendment. 

Their claims were denied. The Secretary of the EBC, defendant John 

G. Shea, determined that plaintiffs were ineligible for the 

benefits of the 5+5 amendment because they were not "active 

employees." 

II 

A somewhat detailed explanation of the tortured history of 

this case is necessary to place the issues in proper focus. 

On April 9, 1990, plaintiffs filed a class action lawsuit 

against Mountain Bell in Colorado state court, specifically, the 

District Court for the City and County of Denver. Plaintiffs' App. 

at 1-8. Plaintiffs' complaint set forth state law claims of 

promissory estoppel predicated on allegations that plaintiffs were 

wrongfully induced to participate in EMTP and wrongfully denied 5+5 

benefits. On May 3, Mountain Bell removed the state court action 

to federal court, asserting that plaintiffs' state law claims were 

preempted by the Employment Retirement Income Security Act of 1974 

("ERISA"), 29 U.S.C. §§ 1001 et seg:. Plaintiffs' App. at 12-15. 

The case was assigned to Judge Matsch of the United States District 

Court for the District of Colorado. 

On May 21, 1990, Mountain Bell moved to dismiss the removed 

action on Rule 12(b) (6) grounds. Plaintiffs' App. at 28-31. 

Plaintiffs in turn moved to remand the action back to state court, 

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contending that there was no ERISA preerrption. Plaintiffs' App. at 

32-35. Without undertaking to decide the preerrption issues or the 

propriety of removal jurisdiction himself, Judge Matsch ordered 

that the case be remanded because the preerrption issue was "not 

free from doubt" and needed to be addressed "as an affirmative 

defense to plaintiffs' corrplaint." Plaintiffs' App. at 78-79. 

Mountain Bell then petitioned this court for a writ of mandamus 

directing Judge Matsch to vacate his order of remand. Plaintiffs' 

App. at 81-103. This court dismissed Mountain Bell's petition on 

June 28, 1991, concluding that Judge Matsch's remand decision was 

not reviewable and that Judge Matsch had appropriately remanded the 

case pursuant to 28 U.S.C. § 1447(c): "If at any time before final 

judgment it appears that the district court lacks subject matter 

jurisdiction, the case shall be remanded." Plaintiffs' App. at 

104-05. 

Following remand to state court, plaintiffs moved for leave to 

file a "first amended corrplaint, " and the state court granted the 

motion. Defendants' Supp. App. at 1-13; Plaintiffs' App. at 106-

113. Mountain Bell moved to dismiss the "first amended corrplaint," 

asking the state court to decide the issue of ERISA preerrption. 

Plaintiffs' App. at 114-17. On November 29, 1991, while 

defendants' motion to dismiss was still under advisement, 

plaintiffs filed a motion to further amend their first amended 

corrplaint. Plaintiffs' App. at 159-61. On the same day, 

plaintiffs also filed a second, entirely separate lawsuit in 

federal court against Mountain Bell, US WEST, US WEST Management 

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Pension Plan and the other defendants listed in the caption above. 

Plaintiffs' App. at 175-84. As a preface to their complaint in 

this second lawsuit, plaintiffs stated: 

This action is being filed for purposes of setting forth 

Plaintiffs' alternative claims, based upon the Employee Retirement Income Security Act of 1974 . . . as 

alternative claims to Plaintiffs' state law claims, as 

postured in Civil Action No. 90 CV 3927, District Court 

for the City and County of Denver, which the Defendant 

therein is alleging are preempted by ERISA. 

Id. at 175. The federal case was assigned to Judge Sparr. 

On December 26, 1991, the state court held that plaintiffs' 

state law claims were preempted by ERISA (Plaintiffs' App. at 185-

87) , and, on January 2, 1992, Mountain Bell filed another notice of 

removal to federal court (Plaintiffs' App. at 188-92). Upon 

removal, plaintiffs' initial lawsuit was also assigned to Judge 

Sparr. 

Plaintiffs filed motions in both state and federal court 

requesting reconsideration of the state court's ERISA preemption 

decision. Plaintiffs' App. at 209-232. The state court found that 

the case had already been removed to federal court and that it 

would be inappropriate to entertain plaintiffs' motion to 

reconsider without a remand order from the federal court. 

Plaintiffs' App. at 283. 

advisement. 

Judge Sparr took the matter under 

After removal, defendants requested that the two cases filed 

by plaintiffs -- the first lawsuit initiated in state court (case 

number 92-S-0009) and the second lawsuit initiated in federal court 

{case number 91-S-2095) -- be consolidated. Defendants' Supp. App. 

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at 13-18. On Febn.ta:ry 6, 1992, Judge Sparr held a status 

conference regarding the two cases and ordered that the actions 

would be "consolidated subject to plaintiff filing [a] first 

amended COTT'!Plaint in 91-2095 and defendants answering." 

Plaintiffs' App. at 284-87. Judge Sparr also denied plaintiffs' 

motion to reconsider the state court's ERISA preeTT'!Ption decision. 

Id. at 287. 

During the Febn.ta:ry 6 status conference, Judge Sparr also 

"disclosed [his] acquaintance w/ [defendant] Fred Cook & other 

[Mountain Bell] eTT'!Ployees." Id. at 285. Judge Sparr indicated 

that he had been an eTT'!Ployee of defendant Mountain Bell from 1955 

through the early 1960s, prior to Mountain Bell's becoming a 

subsidia:ry of US WEST, and that, after becoming an attorney, he had 

served one year as part of Mountain Bell's in-house legal staff. 

Defendants' Supp. App. at 200-01. Judge Sparr stated that he was 

familiar with Fred Cook and his wife through business associations 

dating back twenty years and that he had a professional 

acquaintance with Mountain Bell's general counsel. See id. at 212. 

On Febn.ta:ry 26, plaintiffs in the present case filed a motion 

to recuse based on Judge Sparr' s revelations during the Febn.tary 6 

status conference. Plaintiffs' App. at 464-69. Judge Sparr made 

similar revelations to the plaintiffs in Averhart, Sandquist, and 

Sabell, but those plaintiffs did not request recusal. Defendants' 

Supp. App. at 207. Judge Sparr held a hearing on the recusal issue 

on March 17. Defendants' Supp. App. at 197-221; Plaintiffs' App. 

at 474. Counsel for plaintiffs in Averhart, Sandquist, and Sabell 

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appeared and stated that "we do not see under the disclosures made 

. . . any sort of an appearance of impartiality." Defendants' 

Supp. App. at 210. After "very carefully consider [ing]" 

plaintiffs' motion in the present case, Judge Sparr found "that 

there would not be sufficient indication here of any potential bias 

or prejudice to give a reasonable person a concern that this judge 

might be biased or prejudiced with respect to claims of any of the 

parties or counsel." Id. at 218, 220. 

On March 24, 1992, plaintiffs filed their amended complaint in 

case number 91-S-2095 (Plaintiffs' App. at 308-22) and sought leave 

to file a "third amended complaint" in case number 92-S-0009 

(Plaintiffs' App. at 294-307). On April 15, defendants filed a 

motion to dismiss, to strike, and for a more definite statement, 

arguing inter alia that plaintiffs had ignored Judge Sparr' s 

consolidation order and submitted two new complaints in an attempt 

to recast the litigation as two expanded lawsuits. Plaintiffs' 

App. at 323-34. On May 21, Judge Sparr issued an order (1) 

officially granting defendants' motion to consolidate cases 91-S2095 and 92-S-0009; (2) denying plaintiffs' motion to amend their 

complaint in 92-S-0009 because it sought "to relitigate claims 

already found to be preempted by ERISA"; (3) declaring the amended 

complaint filed in 91-S-2095 "the controlling document in this 

matter"; and ( 4) setting a date for a hearing on defendants' April 

15 motion to dismiss. Plaintiffs' App. at 335-37. Plaintiffs 

attempted to appeal Judge Sparr's denial of their motion to amend, 

filing a "protective notice of appeal" with this court on June 19. 

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Defendants' Supp. App. at 45-46. This court found that Judge 

Sparr's May 21 order was "not immediately appealable under 28 

U.S.C. § 1291." Defendants' Supp. App. at 77-78. 

On September 4, 1992, plaintiffs moved for leave to file yet 

another amended complaint entitled "first amended complaint after 

consolidation" in Civil Action No. 91-S-2095 (Consolidated with 92-

S-0009). Defendants' Supp. App. at 73-76; Plaintiffs' App. at 401-

36. This proposed amended complaint set forth ten different claims 

for relief under ERISA. 1 Plaintiffs alleged that their acceptance 

of EMTP was predicated on defendants ' representations that EMTP was 

the best severance package that would be offered and that, if they 

did not accept it, changes in operations could result in lack of 

promotions, demotions, pay-cuts, transfers and terminations. 

Plaintiffs' App. at 405-06, ~ 11. Plaintiffs claimed, inter alia, 

that defendants' misrepresentations constituted a breach of 

fiducia:ry duty in violation of section 404 of ERISA and resulted in 

a constructive termination in violation of ERISA section 510. 

Plaintiffs' App. at 424-428. 

Counsel appeared before Judge Sparr on September 9 to argue 

defendants ' April 15 motion to dismiss, but Judge Sparr was forced 

to focus instead on plaintiffs' newly proposed amended complaint. 

Plaintiffs' App. at 365-87. After considerable discussion, Judge 

Sparr granted plaintiffs' leave to file their "first amended 

1 Actually, as shall be discussed infra, the tenth claim for 

relief was that there was no adequate remedy "under ERISA" and that 

plaintiffs should therefore be entitled to "the remedies available 

to them under any other law." Plaintiffs' App. at 433-34. 

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complaint after consolidation" and directed counsel to proceed with 

the case based on the claims articulated therein. Id. at 384. 

On September 17, 1992, Judge Sparr granted a motion for 

surnnary judgment for defendants US WEST Management Pension Plan and 

John G. Shea in Averhart and Sandcmist. Among other things, Judge 

Sparr held that ERISA preempted the plaintiffs' state law claims of 

promissory estoppel. Plaintiffs' App. at 388-400; Sandcmist, 

CIV.A. Nos. 91-S-0028, 91-S-0727, 1992 WL 469739 at *3 (D. Colo. 

Sept. 17, 1992). Judge Sparr relied upon this court's previous 

rulings that "'ERISA' s express requirement that the written terms 

of a benefit plan shall govern forecloses the argument that 

Congress intended for ERISA to incorporate state law notions of 

promissory estoppel.'" Id. (quoting Peckham v. Gem State Mut. of 

Utah, 964 F.2d 1043, 1050 (lOth Cir. 1991), which cites Straub v. 

Western Union Telegraph Co., 851 F.2d 1262, 1265-66 (lOth Cir. 

1988) ) . For similar reasons, Judge Sparr also granted defendant US 

WEST Management Pension Plan' s motion for su.rrnna.ry judgment in 

Sabell. Defendants' Supp. App. at 107-20; Sabell, CIV.A. No. 91-S2086, 1992 WL 469776 at *3 (D. Colo. Nov. 9, 1992). 

On October 2, 1992, defendants in the present case filed a 

motion to dismiss the "first amended complaint after consolidation" 

in Civil Action No. 91-S-2095 (Consolidated with 92-S-0009) . 2 

Plaintiffs' App. at 338-64. Plaintiffs filed a response on October 

23. Defendants' Supp. App. at 284-324. The motion to dismiss was 

2 Henceforth, unless otherwise noted, the "first amended 

complaint after consolidation" will be referred to as the complaint 

or final amended complaint. 

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referred to Magistrate Judge Donald Abram pursuant to 28 U.S.C. § 

636(b) (1) (B), and, on March 15, 1993, he issued a recommendation 

that the motion be granted. Plaintiffs' App. at 437-58. Judge 

Abram separately examined each of plaintiffs' ten claims for relief 

and found that each of them was subject to dismissal. Judge Abram 

noted that plaintiffs' co~laint was "poorly plead by intermixing 

legal theories and claims within separate claims for relief," that 

it "fail[ed] to specify what legal theories or claims apply as to 

each defendant, " and that some of the claims for relief were 

"contradictory." Plaintiffs' App. at 439. 

Plaintiffs filed objections to Judge Abram's recommendation on 

March 25, 1993, and defendants responded. Defendants' Supp. App. 

at 126-60. In an order dated April 26, 1993, Judge Sparr dismissed 

the case with prejudice. Plaintiffs' App. at 459-63. Judge Sparr 

agreed with Judge Abram's analysis of plaintiffs' ten claims for 

relief and chastised plaintiffs for "continually fail [ing] to 

address the ubiquitous deficiencies in their co~laint" and 

"continually atte~t[ing] to assert state law claims despite the 

fact that ERISA has been determined to pree~t their state law 

claims." Id. at 461. 

In this appeal, plaintiffs challenge Judge Abram' s 

recommendation and Judge Sparr's order regarding dismissal. 

Plaintiffs also challenge Judge Sparr's denial of their recusal 

request. Finally, plaintiffs challenge the Colorado state court' s 

December 1991 ruling that plaintiffs' state law claims are 

pree~ted by ERISA as well as Judge Sparr' s denial of their motion 

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to reconsider that order and to amend their complaint in case 

number 92-S-0009. See Plaintiffs' Notice of Appeal. 

III 

A 

Appellate Jurisdiction Issues 

Defendants contend that this court does not have jurisdiction 

to review the state court's ERISA preemption decision which led to 

the removal of this case to federal court. 3 We disagree. 

First, as a general rule, the prejudgment findings of a state 

court made prior to removal are merged into the final judgment and 

may be reviewed on appeal irrespective of whether the federal 

district court reexamined the decision after removal. Resolution 

Trust CokP. v. Nernberg, 3 F.3d 62, 67-68 (3d Cir. 1993); Reillyv. 

Waukesha County, Wisconsin, 993 F.2d 1284, 1287 (7th Cir. 1993). 

Second, the state court was not the only court to make rulings 

concerning the preemption and removal issues. Judge Sparr 

reexamined the issues in denying plaintiffs' motion to reconsider. 

Plaintiffs' App. at 287. The ERISA preemption matter also arose in 

connection with plaintiffs' motion to amend their complaint and 

defendants' motion to dismiss. 

3 By correspondence dated June 9, 1993, we ordered the parties 

to brief the following jurisdictional issue: "Whether the [Tenth 

Circuit] has jurisdiction to review the December 1991 Order of the 

District Court for the City and County of Denver entered in case 

No. 90-CV-3927" which held that plaintiffs' state law claims were 

preempted by ERISA? The parties filed separate briefs limited to 

this issue. By order of October 19, 1993, this court reserved 

judgment 0:1 the jurisdictional issue and directed that the parties' 

briefs on the jurisdictional issue be submitted to the panel assigned to handle the appeal. 

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Third, the federal district court's subject matter 

jurisdiction over plaintiffs' original action, and hence our 

jurisdiction, depended upon whether there was preemption under 

ERISA. As previously noted in connection with this case, 28 U.S.C. 

§ 1447(c) provides that "[i]f at any time before final judgment it 

appears that the district court lacks subject matter jurisdiction, 

the case shall be remanded." (emphasis added). Federal Rule of 

Civil Procedure 12 (h) (3) further directs that "[w] henever it 

appears . . that the court lacks jurisdiction of the subject 

matter, the court shall dismiss the action." (emphasis added) . 

The ERISA preemption matter is clearly, therefore, a matter with 

which we should be concerned. 

Finally, this court recently reversed the denial of a motion 

to remand because the denial was predicated on an erroneous ERISA 

preemption finding in Joos v. Intermountain Health care, Inc., 25 

F.3d 915, 917 (lOth Cir. 1994). Although the ERISA preemption 

issue in that case was decided solely by the federal district 

court, this case should not be treated differently simply because 

the federal district court relied on the findings of the state 

court. 

Having concluded that we have reviewing authority, we now turn 

to the question of whether the lower courts ' ERISA preemption 

findings should be overturned. Congress "expressly included a 

broadly worded pre-emption provision" in ERISA. Ingersoll-Rand Co. 

v. McClendon, 498 U.S. 133, 138, 111 S. Ct. 478, 482, 112 L. Ed. 2d 

474 (1990). Section 514 (a) of ERISA, 29 U.S.C. § 1144 (a), provides 

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in pertinent part that ERISA "shall supersede any and all State 

laws insofar as they may now or hereafter relate to any employee 

benefit plan described in section 1003(a) ... and not exempt 

under section 1003 (b) . " (emphasis added) . "The key to § 514 (a) is 

found in the words ' relate to. ' Congress used those words in their 

broad sense, rejecting more limited pre-emption language 

Ingersoll-Rand, 498 U.S. at 138, 111 S. Ct. at 482. 

II 

The state court found that plaintiffs' claims "relate to" an 

ERISA plan within the meaning of 29 U.S.C. § 1144(a), rendering 

them preempted. Plaintiffs' App. at 187. The court relied 

substantially on similarities it perceived between the present case 

and Lee v. E.I. DuPont de Nemours and Co., 894 F.2d 755 (5th Cir. 

1990), in which state law claims of fraud and misrepresentation 

were also found to be preempted under 29 U.S.C. § 1144 (a). Id. at 

756. Having reviewed Lee, this court finds that it does indeed 

support the state court's holding that plaintiffs' state law claims 

are preempted. 

In recommending dismissal of plaintiffs' final amended 

complaint, Magistrate Judge Abram found that plaintiffs' claims 

"relate to an employee benefit plan and are preempted by ERISA. 11 

Plaintiffs' App. at 455. Judge Abram cited Judge Sparr's ERISA 

preemption findings in Sandc;ruist/Averhart and Sabell. Id. On 

October 28, 1994, a separate panel of this court affirmed those 

findings. In Averhart v. US WEST Management Pension Plan, slip op. 

at 8-13, 1994 WL 588622 at *3-5, this court held that ERISA 

preempts state law promissory estoppel claims virtually identical 

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to the promissory estoppel claims made by plaintiffs in the present 

case. 

We likewise hold in the present case that plaintiffs' state 

law claims are preempted by ERISA and affi:rm the removal of 

plaintiffs' first action to federal court and the denial of 

plaintiffs' motion to amend their complaint. 

B 

Standard of Review for Rule 12 (b) (6) Dismissals 

Judge Sparr ordered that plaintiffs' action be dismissed 

pursuant to Federal Rule of Civil Procedure 12(b) (6) because of 

deficiencies in their final amended complaint. " [T] he sufficiency 

of a complaint is a question of law which we review de novo. " 

Ayala v. Joy Mfg. Co., 877 F.2d 846, 847 (lOth Cir. 1989) (quoting 

Morgan v. City of Rawlins, 792 F.2d 975, 978 (lOth Cir. 1986)). 

"We will uphold a dismissal [under Federal Rule of Civil Procedure 

12(b) (6)] only when it appears that the plaintiff can prove no set 

of facts in support of the claims that would entitle the plaintiff 

to relief." Jacobs, Visconsi & Jacobs, Co. v. City of Lawrence, 

927 F.2d 1111, 1115 (lOth Cir. 1991). In performing our review, we 

accept all well-pleaded allegations as true and construe them in 

the light most favorable to plaintiffs. Williams v. Meese, 926 

F.2d 994, 997 (lOth Cir. 1991) (citation omitted). We note that 

"' [t]he Federal Rules of Civil Procedure erect a powerful 

presumption against rejecting pleadings for failure to state a 

claim. '" Morgan, 792 F. 2d at 978 (quoting Auster Oil & Gas Inc. v. 

Stream, 764 F.2d 381 (5th Cir. 1985)). 

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We proceed to review each of plaintiffs' claims for relief in 

the order that seems most sensible to us. 

1. Inadequate remedy under ERISA 

In their tenth claim for relief, plaintiffs contend that 

"ERISA preemption only applies where ERISA has provided an adequate 

remedy." Plaintiffs' App. at 433, ~ 68. Plaintiffs maintain that 

if they are not deemed entitled to relief under ERISA, then they 

may pursue recovery "under any other law. " Id. As support for 

this proposition, plaintiffs rely upon three cases: Hospice of 

Metro Denver, Inc. v. Group Health Insurance of Oklahoma, Inc., 944 

F.2d 752 (lOth Cir. 1991); Uselton v. Commercial Lovelace Motor 

Freight, Inc., 940 F.2d 564 (lOth Cir. 1991); and Perry v. P*I*E 

Nationwide, Inc., 872 F.2d 157 (6th Cir. 1989), cert. denied, 493 

U.S. 1093, 110 S. Ct. 1166, 107 L. Ed. 2d 1068 (1990). Id. 

In recommending that plaintiffs' tenth claim for relief be 

dismissed, Judge Abram found that plaintiffs' pursuit of relief 

"under any other law" was simply another attempt to relitigate the 

issue of ERISA preemption. Plaintiffs' App. at 453. Judge Abram 

relied in part on Judge Sparr's ERISA preemption findings in 

Sand@ist/Averhart and Sabell, which, as noted supra, have since 

been appealed to this court and affirmed. Judge Abram also 

analyzed each of the three cases relied upon by plaintiffs, Hospice 

of Denver, Uselton, and P*I*E, and distinguished them on the basis 

that the plaintiffs therein, unlike plaintiffs in the present case, 

were not seeking benefits under an ERISA plan. Id. at 453-55. In 

his order of dismissal, Judge Sparr agreed with Judge Abram's 

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analysis and added, in a rather proficient use of common sense, 

that "just because Plaintiffs are not entitled to relief under 

ERISA does not mean that they are therefore entitled to relief 

under state law." Id. at 461. 

We agree with the rationales set forth by Judges Abram and 

Sparr and affi:rm the dismissal of plaintiffs' tenth claim for 

relief "under any other law. " 

2. Breach of fiduciary duties 

In their second and third claims for relief, plaintiffs 

attempt to set forth a cause of action for breach of fiduciary 

duties under section 404(a) (1) (A) and (B) of ERISA, 29 U.S.C. § 

1104(a) (1) (A) and (B), which provides: 

(a) Prudent man standard of care 

(1) Subject to sections 1103(c) and (d), 1342, and 

1344 of this title, a fiduciary shall discharge his 

duties with respect to a plan solely in the interest of 

the participants and beneficiaries and--

(A) for the exclusive purpose of: 

(i) providing benefits to participants and 

their beneficiaries; and 

(ii) defraying reasonable expenses of 

administering the plan; 

(B) with the care, skill, prudence, and 

diligence under the circumstances then prevailing that a prudent man acting in a like capacity and 

familiar with such matters would use in the conduct 

of an enterprise of a like character and with like 

aims . . . . 

Plaintiffs allege that defendants US WEST, Cook, Greenhalgh, 

Ames, EMTP, the EMTP Review Committee, and Mountain Bell breached 

fiduciary duties and duties of loyalty with respect to EMTP, and 

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that US WEST, the EBC, and Shea breached fiduciary duties or duties 

of loyalty with respect to the Pension Plan. Plaintiffs' App. at 

424-27, ~~45-48. As support for these claims, plaintiffs rely on 

several paragraphs of allegations in the body of their complaint. 

Id. The most significant of these is paragraph 16, in which 

plaintiffs specifically mention defendants' fiduciary duties and 

duties of loyalty. Id. at 408-09, ~ 16. Plaintiffs allege that 

the following acts by defendants induced plaintiffs to accept EMTP: 

(a) They failed to disclose the fact and scope of Pension 

Plan overfunding which rendered future enhanced benefits 

eminently foreseeable for those not accepting EMTP; 

(b) They failed to disclose U.S. West, Inc. intended to 

reserve the Pension Plan surplus to finance its own 

future force reduction objectives rather than to inure to 

the present benefit of the plan participants; 

(c) They forestalled written and published force 

imbalance guidelines which accurately disclosed 

anticipated force requirements until after Plaintiffs 

accepted EMTP; 

(d) They falsely represented that, contrary to 

traditional policy, te:rmination unrelated to performance could occur unless EMTP was accepted; upon information 

and belief, no such te:rminations occurred; 

(e) They withheld from the Plaintiffs awareness that 

EMTP's affect on U.S. West, Inc. ['s] long term force 

reduction and staffing goals would probably be 

insufficient and, therefore, future better force 

reduction offers would probably be required; 

(f) That the Defendants had given serious consideration 

of future better force reduction offers, including utilization of Pension Plan assets for such purposes; 

(g) They falsely or recklessly represented that no better 

early separation incentive offer would follow EMTP and 

the best future offer would not exceed six month's salary 

as severance pay; and 

(h) They falsely represented EMTP was separate from the 

Pension Plan when it constituted a de facto amendment to 

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the Pension Plan. 

Id. Plaintiffs assert that by making such misrepresentations and 

omissions of material facts defendants violated the fiduciary 

standards in 29 U.S.C. § 1104(a) (1) (A) and (B). 

Judge Abram recormnended that plaintiffs' breach of fiduciary 

duties claims be dismissed, and Judge Sparr agreed. Judge Abram 

found that plaintiffs failed to properly allege that defendants 

were fiduciaries and failed to allege conduct that amounted to a 

breach of fiduciary duty. Plaintiffs' App. at 441-48. 

a. Identification of fiduciaries 

29 U.S.C. § 1002(21) (A) provides in pertinent part: 

[A] person is a fiduciary with respect to a plan to the 

extent (i) he exercises any discretionary authority or 

discretionary control respecting management of such plan 

or exercises any authority or control respecting 

management or disposition of its assets, (ii) he renders 

investment advice for a fee or other corrpensation, direct 

or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to 

do so, or (iii) he has any discretionary authority or 

discretionary responsibility in the administration of 

such plan. 

ERISA conterrplates the existence of both named and unnamed 

fiduciaries. A "named fiduciary" is "a fiduciary who is named in 

the plan inst:rument, or who . . . is identified as a fiduciary (A) 

by a person who is an errployer or errployee organization with 

respect to the plan or (B) by such an errployer and such an errployee 

organization acting jointly." 29 U.S.C. § 1102 (a) (2). 

Plaintiffs' allegations with respect to the identification of 

the defendants as fiduciaries are found at paragraphs 34 through 40 

of the complaint. Plaintiffs' App. at 416-18, ~~ 34-40. 

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Plaintiffs allege that Greenhalgh and Cook were "named fiduciaries" 

and that Greenhalgh, Cook, and Ames were all three "fiduciaries" 

because they "exercised discretionary authority or control with 

respect to the management of EMTP." Id. at ~~ 35 (b) & (c) , and 40. 

Plaintiffs also allege that the EMTP Plan Review Committee and all 

its members were both "named fiduciaries" and "fiduciaries." Id. 

at ~ 36. We must accept these allegations as true and construe 

them in the light most favorable to plaintiffs. So doing, we find 

plaintiffs' allegations of defendants' fiduciary status sufficient. 

b. Conduct amounting to breach of fiduciary duty 

Judge Abram analyzed each of the paragraphs of allegations in 

plaintiffs' complaint and concluded that none of the allegations 

stated a claim for breach of fiduciary duties under 29 U.S.C. § 

1132(a) (1) (A) and (B). Judge Abram paid close attention to the 

allegations of misrepresentations and failures to disclose in 

paragraph 16 of plaintiffs' complaint, set forth above. 

Plaintiffs' App. at 443-47. In considering those allegations, 

Judge Abram examined a number of cases, including Berlin v. 

Michigan Bell Telephone Co., 858 F.2d 1154 (6th Cir. 1988), 

plaintiffs' primary case authority in support of their breach of 

fiduciary duties claims. Plaintiffs' App. at 445. 

The factual scenario and breach of fiduciary duties claims in 

Berlin are remarkably similar to those in the present case. The 

plaintiffs were managers at Michigan Bell, another former AT&T 

subsidiary which was seeking to reduce its number of managementlevel employees. 858 F .2d at 1156-57. Like Mountain Bell, 

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Michigan . ~11 developed a severance incentive package designed to 

encourage voluntary tennination or early retirement. Id. at 1157. 

This package was called the Management Income Protection Plan or 

"MIPP" and, like EMTP, operated as an unfunded employee welfare 

benefit plan subject to ERISA. Id. MIPP could be offered to a 

specific individual or offered generally to a certain category of 

management-level employees, depending upon where the need for 

downsizing arose. Id. 

Michigan Bell made its first general MIPP offering from 

October 1, 1980 to December 1, 1980. Id. at 1158. Following this 

offering, there was considerable interest among managers nearing 

retirement in the possibility of future general MIPP offerings. 

Id. Because it appeared that some managers were delaying 

retirement decisions in the hopes of such an offering, Michigan 

Bell officials made several communications (alleged by plaintiffs 

to be misrepresentations) regarding the future possibility of an 

MIPP extension. Id. In a "News for Management Bulletin," Michigan 

Bell's Vice President of Personnel went so far as to indicate that 

managers considering retirement should not delay plans in 

anticipation of another MIPP offering. Subsequently, Michigan Bell 

extended a second general MIPP offering for those managers retiring 

between June 1, 1982, and July 31, 1982. Id. at 1159. The 

plaintiffs, who had retired between the first and second offerings, 

believed that Michigan Bell had intentionally misled them and 

induced them into retiring too early by indicating that the 

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original MIPP offering had been a one-time application. 4 !d. at 

1158. The plaintiffs filed a class action lawsuit against Michigan 

Bell and the Vice President of Personnel alleging, inter alia, 

breach of fiduciary duties under 29 U.S. C. § 1104 (a) (1) (A) and (B) . 

Id. at 1160. 

The district court granted summary judgment in favor of 

defendants on the breach of fiduciary duties claim. The court 

found that the decision to offer MIPP benefits a second time was a 

business decision (i.e., a decision made by Michigan Bell and its 

Vice President while wearing the businessman' s hat, not the 

fiduciary's hat) and, therefore, that conmmications or 

representations relating to that decision were nonfiduciary. Id. 

at 1162. 

The Sixth Circuit reversed the district court, finding as 

follows: 

Under the exclusion from fiduciary standards for 

business decisions, corporate actions by plan 

administrators seeking to reduce the amount of unaccrued 

plan benefits, West v. Greyhound Co:r:p., 813 F .2d 951, 

955-56 (9th Cir. 1987), terminating a pension plan, Cunha 

v. Ward Foods, Inc., 804 F.2d 1418, 1432 (9th Cir. 1986), 

and deciding whether or not to establish a plan, Moore v. 

4 Lead plaintiff Berlin's allegations in this respect were 

particularly compelling. 

Berlin alleges that he initially notified MBT that he 

would retire effective June 7, 1982, which would have 

enabled him to elect MIPP severance benefits. However, 

he was urged by a district manager for MBT to change his 

effective retirement date to May 31, 1982, for 

administrative accounting convenience. Berlin agreed and 

retired effective May 31, 1982, which placed him one day 

outside the MIPP offering in question. 

Id. at 1156. 

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Reynolds Metals Co., 740 F.2d 454, 456 (6th Cir. 1984), 

cert. denied, 469 u.s. 1109, 105 s. Ct. 786, 83 L. Ed. 2d 

780 (1985), have all been found nonfiduciary. 

Several courts have, however, held that misleading communications to plan participants regarding plan administration (for example, eligibility under a plan, 

the extent of benefits under a plan) will support a claim 

for breach of fiduciary duty. Local Union 2134, United 

Mine Workers of America v. Powhatan Fuel, Inc., 828 F.2d 

710, 713 (11th Cir. 1987); Peoria Union Stock Yards Co. 

Retirement Plan v. Penn Mut. Life Ins. Co., 698 F. 2d 320, 

326 (7th Cir. 1983) ("Lying is inconsistent with the duty of loyalty owed by all fiduciaries and codified in [29 

U.S.C. § 1104]. "); Muenchow v. Parker Pen Co., 615 

F.Supp. 1405, 1417 (W.D. Wis. 1985) ("ERISA supplies a 

remedy for the wrong [of misrepresentation by 

fiduciaries] alleged in [plaintiff's] complaint."); see 

also Rosen v. Hotel & Restaurant Employees & Bartenders 

Union of Philadelphia, 637 F.2d 592, 600 n. 11 (3d Cir. 

1981) (holding a fiduciary is under a duty to communicate 

material facts to a plan beneficiary) , cert. denied, 454 

U.S. 898, 102 S. Ct. 398, 70 L. Ed. 2d 213 (1981); District 65, UAW v. Ha{Per & Row Publishers, Inc., 576 

F.Supp. 1468, 1480 (S.D.N.Y. 1983). Although these cases 

deal primarily with misrepresentations concerning the 

terms of an ERISA plan, their supporting rationale 

applies with equal force to this case--a fiduciary may 

not materially mislead those to whom the duties of 

loyalty and prudence described in 29 U.S.C. § 1104 are 

owed. 

Thus, while the parties do not dispute the district 

court's holding that the decision to offer MIPP benefits 

was a nonfiduciary business decision, we do not agree with the district court's conclusion that it logically follows that any communications or representations made 

prior to such a decision were also nonfiduciary. On the 

contrary, we hold that when serious consideration was 

given by MBT to implementing MIPP by making a second 

offering (a question of material fact), then MBT as the 

plan administrator and/or its Vice President of Personnel 

Grady, the plan fiduciary, had a fiduciary duty not to 

make misrepresentations, either negligently or 

intentionally, to potential plan participants concerning the second offering. Accordingly, any misrepresentations made to the potential plan participants after serious 

consideration was given to a second offering could 

constitute a breach of a fiduciary duty. Therefore, 

since genuine issues. of material fact exist as to (1) 

when serious consideration of the second offering took 

place, and (2) whether or not any material 

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misrepresentations were made to potential plan 

participants concerning the second offering, summa:ry 

judgment was not proper. 

Id. at 1163-64. The Sixth Circuit emphasized that it was not 

holding that the defendants (or any fiducia:ry) had an affirmative 

duty "to say anything at all or to conmunicate with potential plan 

participants about the future availability of MIPP. " Id. at 1164. 

The court simply held that "if the plan administrator and/or plan 

fiducia:ry does conmunicate with potential plan participants after 

serious consideration has been given concerning a future 

implementation or offering under the plan, then any material 

misrepresentations may constitute a breach of their fiduciary 

duties." Id.; see Drennan v. General Motors Com., 977 F.2d 246, 

250-52 (6th Cir. 1992), cert. denied, 113 S. Ct. 2416, 124 L. Ed. 

2d 639 (1993) ("As observed by the Berlin court, the duty to avoid 

material misrepresentations does not require the employer to 

predict an ultimate decision to offer a plan so long as it fairly 

discloses the progress of its serious considerations to make a plan 

available to affected employees."). 

Judge Abram distinguished Berlin from the present case, 

finding that "[t]here are no allegations that US West was giving 

serious consideration to a modification of the EMTP at the time of 

their retirement in 1987 11 and, therefore, that " [e] ven under the 

Berlin decision, the plaintiffs have not stated a claim." 

Plaintiffs' App. at 44 7. Judge Abram apparently overlooked 

paragraph 16 (f) and (g) of the complaint wherein plaintiffs 

specifically alleged "[t] hat the Defendants had given serious 

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Appellate Case: 93-1184 Document: 01019282375 Date Filed: 04/19/1995 Page: 25 
consideration of future better force reduction offers" and "falsely 

or recklessly represented that no better early separation incentive 

offer would follow EMTP. " Plaintiffs' App. at 409 (errphasis 

added) . As with all motions to dismiss, Judge Abram was required 

to accept these allegations as true and to construe them in the 

light most favorable to plaintiffs. See Williams, 926 F.2d at 997 

(citation omitted). It appears that he did not. Judge Sparr's 

short dismissal order fails to mention this apparent error in Judge 

Abram's analysis. 5 • 

The Sixth Circuit is not the only circuit court that has 

concluded that ERISA prohibits material misrepresentations by 

fiduciaries. Many other circuits have followed the Sixth Circuit's 

lead and held that ERISA irrposes a duty on plan fiduciaries not to 

affi:r:matively mislead plan participants. Howe v. Varity Co:r::g., 36 

F.3d 746, 753-54 (8th Cir. 1994); Mullins v. Pfizer, Inc., 23 F.3d 

663, 668-69 (2d Cir. 1994); Vartanian v. Monsanto Co:r::g., 14 F. 3d 

697, 702 (1st Cir. 1994); Fischer v. Philadelphia Elec. Co., 994 

F.2d 130, 133-35 (3d Cir.), cert. denied, 114 S. Ct. 622, 126 L. 

Ed. 2d 586 (1993); Anweiler v. American Elec. Power Serv. Co:r::g., 3 

F.3d 986, 991 (7th Cir. 1993); Barnes v. Lacy, 927 F.2d 539, 543-44 

(11th Cir.) , cert. denied, 112 S. Ct. 372, 116 L. Ed. 2d 324 

(1991); Eddy v. Colonial Life Ins. Co. of America, 919 F.2d 747, 

5 As we have noted, this case was a procedural nightmare by 

the time defendants' motion to dismiss was referred to Judge Abram. 

The so-called "First Amended Corrplaint After Consolidation" is 

hardly a model of clarity and conciseness. The law pertaining to 

ERISA is corrplex, to say the least. It is quite understandable 

that Judges Abram and Sparr overlooked these allegations. 

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Appellate Case: 93-1184 Document: 01019282375 Date Filed: 04/19/1995 Page: 26 
750 (D.C. Cir. 1990) . 6 

Accepting as true and construing in plaintiffs' favor 

plaintiffs' allegations of affirmative misrepresentations with 

respect to future force reduction offers, we find those allegations 

sufficient to state a claim for breach of fiduciary duties under 

Berlin. We accordingly reverse Judge Sparr's order of dismissal of 

plaintiffs' second and third claims for relief insofar as they 

purport to assert breach of fiduciary duties claims predicated on 

the allegations of material misrepresentations in paragraph 16 of 

the complaint. However, to the extent that plaintiffs seek to base 

a cause of action for breach of fiduciary duties on some other type 

of allegation or theory (e.g., failures to disclose, arbitrary and 

capricious denial of 5+5 benefits, discrimination between 

plaintiffs and other Pension Plan participants, or adding an 

"active employee" eligibility requirement to EMTP without Board 

approval) , the dismissal of plaintiffs' second and third claims for 

6 Since Berlin, the Sixth Circuit has gone further and found 

that ERISA may impose on fiduciaries a duty to disclose material 

matters, though such a duty does not require the fiduciary "to 

disclose its internal deliberations nor interfere with the 

substantive aspects of the bargaining process. " Drennan, 977 F. 2d 

at 251. Some other circuits agree. Howe, 36 F.3d at 754 ("[I]n 

some instances a fiduciary's duty goes beyond merely refraining from making affirmative misrepresentations. ") ; Anweiler, 3 F. 3d at 

991 ("Fiduciaries trn.lSt also corrmmicate material facts affecting the interests of beneficiaries. This duty exists when a 

beneficiary asks fiduciaries for information, and even when he or 

she does not.") (citations omitted) ; Eddy, 919 F. 2d at 750 ("A 

fiduciary has a duty not only to inform a beneficiary of new and 

relevant information as it arises, but also to advise him of 

circumstances that threaten interests relevant to the 

relationship. ") . Because we hold that plaintiffs failed to state a claim for 

failure to disclose, we need not decide whether a duty to disclose 

exists. 

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Appellate Case: 93-1184 Document: 01019282375 Date Filed: 04/19/1995 Page: 27 
relief is affirmed. See our discussion of such claims infra and 

this court' s decision in Averhart, slip op. at 13-18, 1994 WL 

588622 at *6-8. 7 

3. Interference with plaintiffs • attainment of pension rights 

In their fifth claim for relief, plaintiffs assert a cause of 

action under ERISA§ 510, 29 U.S.C. § 1140. That section provides 

in pertinent part: 

discharge 

beneficiary 

"It shall be unlawful for any person to 

or discriminate against a participant or 

for the purpose of interfering with the 

attainment of any right to which such participant may become 

entitled under the plan . 118 

7 Defendants also contend that "[r]egardless of whether the 

District Court ' s reasons for dismissing the Second and Third Claims 

were valid, those claims were properly dismissed because they seek 

relief that is personal to the Plaintiffs, rather than planwide." Defendants' Opening Brief at 24. Actually, plaintiffs seek both 

planwide and individual forms of relief in connection with their 

breach of fiduciary duties claims. In paragraph 28 of their 

complaint, plaintiffs seek planwide relief pursuant to 29 U.S.C. § 

1109(a). Plaintiffs' App. at 414, ~ 28. In paragraphs 25 and 26 

of their complaint, plaintiffs allege that "[a] s a proximate result 

of the breaches of fiducia:ry duty" they have suffered other 

individual damages. No specific statute authorizing individual 

forms of relief is mentioned, although plaintiffs do generally cite 

section 502(a) of ERISA, 29 U.S.C. § 1132, in the opening paragraph of their complaint. We decline to decide whether the individual relief sought in 

paragraphs 25 and 26 may be available. Should that issue arise in 

the district court, we direct the court's attention to the 

following cases: Massachusetts Mutual Life Ins. Co. v. Russell, 

473 U.S. 134, 105 S. Ct. 3085, 87 L. Ed. 2d 96 (1985); Howe v. 

Vari ty Com. , 3 6 F. 3d 7 4 6 (8th Cir. 19 94) ; and Anweiler v. American 

Elec. Power Serv. Com., 3 F.3d 986 (7th Cir. 1993). 

8 We note that Judge Abram found that ERISA § 510 "applies to 

the employer only, and not the pension trustees or administrators. " 

Plaintiffs' App. at 443. We disagree. 

29 U.S.C. § 1140 states that the proscribed actions are 

unlawful "for any person. " (Emphasis added) . Since both 

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Plaintiffs allege that defendants "discharged (constiUctively 

terminated) or discriminated against [them] as participants in the 

Pension Plan for the purpose of interfering with the attainment of 

rights to which plaintiffs might become entitled under the Pension 

Plan, including enhanced pension benefits or more favorable early 

retirement incentive plans." Plaintiffs' App. at 427-28, , 50. 

a. Constructive discharge 

Plaintiffs allege that defendants "constiUctively terminated" 

them by directing a campaign of misrepresentations calculated to 

coerce acceptance of EMTP, including representations that EMTP 

would be better than any future force reduction offer and that 

future changes in company operations could result in lack of 

promotions, demotions, pay-cuts, transfers and even termination. 

Plaintiffs' App. at 405-09, ,, 11-12 and 16-17. Plaintiffs contend 

that these allegations are sufficient to support a claim of 

constn1ctive discharge in violation of 29 U.S.C. § 1140. 

Judge Abram addressed plaintiffs' constn1ctive discharge claim 

in discussing plaintiffs' second and fifth claims for relief. 

terms, "employer" and "person," are defined by ERISA, see 

29 U.S.C. § 1002 (5) and (9), we must assume that Congress 

used the term "person" deliberately. Although the verbs 

used in § 1140, such as "discharge," "suspend," or 

"discipline," may suggest action by an employer, Congress 

also used broader verbs, such as "discriminate," and the 

much broader term "person," in stating by whom such 

actions would be illegal. In light of the plain language 

of the section, we cannot agree with the defendants that 

Congress intended to limit those who could violate § 1140 

to employers. See Tingey v. Pixley-Richards West, Inc. , 953 F.2d 1124, 1132 n. 4 (9th Cir.1992). 

Custer v. Pan American Life Ins. Co., 12 F.3d 410, 421 (4th Cir. 

1993). 

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Judge Abram recommended that the claim be dismissed, finding as 

follows: 

The purpose of § 1140 is to prevent unscrupulous employers from discharging or harassing employees in 

order to prevent them from obtaining vested rights. Conkwright v. Westinghouse Electric Co:t::g., 933 F .2d 231, 

233 (4th Cir. 1991); Varhola v. Doe, 820 F.2d 809, 816 

(6th Cir. 1987). In discussing the legislative history of § 1140, the courts have found that the section applies when the employee is terminated or is harassed causing the employee to quit before vesting in a pension. West 

v. Butler, 621 F.2d 240, 245-46 (6th Cir. 1980); [United 

Auto Workers] v. Park-Ohio Industries, Inc. , 661 F. Supp. 1281, 1304 (N.D. Ohio 1987); Rollo v. Maxicare of 

louisiana, 698 F. Supp. 111, 113-14 (E.D. La. 1988). 

None of the plaintiffs were terminated. There is no 

allegation that while they were employed, the defendants 

attempted to harass them to prevent them from receiving 

a pension. 

Where constructive discharge is claimed, the Court 

must establish whether the plaintiff has made a prima facie case based upon an objective, reasonable person 

test. Berger v. Edgewater Steel Co., 911 F.2d 911, 922 

(3d Cir. 1990) [, cert. denied, 499 U.S. 920, 111 S. Ct. 

1310, 113 L. Ed. 2d 244 (1991)]. The plaintiffs must 

show that they would have been fired if they did not 

accept the early retirement offer. Id. at 923. The 

plaintiffs must show that the conditions were intolerable 

so as to cause the plaintiffs to give up ERISA rights. I.ojek v. Thomas, 716 F.2d 675, 680-81 (9th Cir. 1983). 

There are no factual allegations in the complaint that 

support a claim that US West in November, 1989 adopted the "5+5" plan with the intent to interfere with a 

welfare benefit plan to which the plaintiffs were 

entitled. Where a company has made a statement that it 

was going to eliminate special benefits sometime in the 

future, thereby causing an employee to retire in order to 

not lose a benefit, the Court has held that there is no 

constructive discharge of the employee. Berger, supra, 

at 922-23; Adams v. LTV Steel Mining Co., 936 F.2d 368, 

370 (8th Cir. 1991) [, cert. denied, 112 S. Ct. 968, 117 

L. Ed. 2d 134 (1992)]. 

Plaintiffs' App. at 442, 450. 

Judge Abram essentially found that the conduct alleged by 

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plaintiffs was simply insufficient to support a claim under section 

510 of ERISA. Judge Abram's analysis suggests that anything short 

of firing an employee, threatening to fire him, or harassing him 

until he's forced to quit or othe:rwise cease employment carmot 

constitute a constructive discharge. We think this too narrowly 

construes the concept of constructive discharge. 

In this case, plaintiffs claim that defendants fraudulently 

induced or tricked them into quitting by deceiving them into 

thinking that EMTP was the best offer that would be made and that 

if they didn't accept EMTP, they would risk being demoted, 

transferred, or terminated. Plaintiffs' App. at 406, 409, ~~ 11 (b) 

and 16(g). At what point, if any, does such trickery, if proved, 

amount to a constructive discharge? As of yet, this court has not 

had occasion to address that particular issue. 9 

The three cases relied upon by Judge Abram in discussing 

9 In two cases arising out of an amendment to Mobil Oil 

Corporation' s pension plan, this court considered allegations that 

Mobil had fraudulently induced its employees to accept early 

retirement in violation of ERISA § 510. Raymond v. Mobil Oil 

CokQ., 983 F.2d 1528, 1532-37 (lOth Cir.), cert. denied, 114 S. Ct. 

81, 126 L. Ed. 2d 49 (1993); Mitchell v. Mobil Oil Co6P., 896 F.2d 

463, 473-74 (lOth Cir.), cert. denied, 498 U.S. 898, 111 S. ct. 

252, 112 L. Ed. 2d 210 (1990). However, the court never determined 

whether a fraudulent inducement could constitute a constructive 

discharge because the plaintiff employees did not meet the 

definition of "participants" in 29 U.S.C. § 1002(7) and therefore 

did not have standing to seek enforcement of their ERISA rights 

under 29 U.S.C. § 1132(a). Raymond, 983 F.2d at 1534-35; Mitchell, 

896 F .2d at 474. The plaintiffs did not qualify as "participants" 

because, under Mobil's early retirement offer, they had received a 

lump sum payment of all of their vested pension benefits and 

because they did not allege (in Mitchell) or present any evidence 

(in Raymond) that they should be reinstated. Raymond, 983 F .2d at 

1537; Mitchell, 896 F.2d at 474. 

In the present case, plaintiffs are still receiving benefits 

and therefore have standing. 

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plaintiffs' constructive discharge claim, Berger, I..ojek, and Adams, 

were decided on motions for su.rrmacy judgment, not motions to 

dismiss, and did not involve the sort of "trickery" alleged to have 

occurred in the present case. Adams, 936 F.2d at 370 (affirming 

summary judgment on ERISA § 510 discrimination claim where 

plaintiffs alleged employer had discriminated between salary and 

hourly employees with respect to allowing early retirement); 

Berger, 911 F.2d at 922-23 (affirming summary judgment on 

plaintiff's claim that employer constructively discharged him by 

simply informing hi~ of a proposed Pension Plan amendment that 

would eliminate his special benefits); Lojek, 716 F.2d at 680-83 

(affirming summary judgment on plaintiffs' claim that his former 

law firm constructively discharged him by changing its stock 

purchase and redemption agreements) ; see also Gray v. York 

Newspapers, Inc., 957 F.2d 1070, 1080-83 (3d Cir. 1992) (affirming 

summary judgment because evidence was insufficient to support 

plaintiff's alleged belief that if she refused early retirement, 

she would be harassed and forced out of her job) . 

In Devine v. Combustion Engineering, Inc., 760 F. Supp. 989 

(D. Conn. 1991), the plaintiffs claimed that their former employer 

had violated ERISA § 510 by "tricking them 'into leaving their 

employment early in order to save money. '" Id. at 993 (quoting the 

plaintiffs' complaint). The plaintiffs alleged that their employer 

had offered them a retirement incentive program including free 

lifetime medical and dental benefits and then, when plaintiffs 

accepted, broke their promise to provide such benefits. Id. at 

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990-91. With regard to the plaintiffs' claim under section 510 of 

ERISA, the court found: "Assuming plaintiffs' allegations to be 

true for purposes of the motion to dismiss, I believe that they 

have stated a cause of action for which relief may be granted. 

'Ihey are certainly entitled to offer evidence to support this 

claim." Id. at 993. 

We believe that plaintiffs are equally entitled to develop and 

offer evidence of constructive discharge under ERISA § 510 in the 

present case. 'Ihe alternative is to hold that an employer who (as 

alleged in this case) intentionally lies to his employees about the 

costs and benefits of accepting an early retirement offer in order 

to induce them to take the offer and prevent them from attaining 

additional pension rights does not violate ERISA § 510. 'Ihat seems 

incongruous with both the letter and the spirit of section 510. 

We must accept as true and construe in plaintiffs' favor 

plaintiffs' allegations that defendants purposely deceived them. 

If proven, such deception could be found to vitiate the 

voluntariness of plaintiffs' decision to accept termination under 

EMTP and could support an inference of constructive discharge. See 

Christopher v. Mobil Oil Com., 950 F. 2d 1209, 1223 (5th Cir.) 

(holding that alleged deceptive conduct by Mobil might be found to 

vitiate the voluntariness of plaintiffs' decision to retire) , cert. 

denied, 113 S. Ct. 68, 121 L. Ed. 2d 35 (1992); Henn v. National 

Geographic Soc., 819 F.2d 824, 828-29 (7th Cir.), (holding that 

"voluntariness" question in constructive discharge case depends in 

part on whether plaintiff's choice was "free from fraud or other 

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Appellate Case: 93-1184 Document: 01019282375 Date Filed: 04/19/1995 Page: 33 
misconduct"), cert. denied, 484 U.S. 964, 108 S. Ct. 454, 98 L. Ed. 

2d 394 (1987); see also Mullins v. Pfizer, Inc., 828 F. Supp. 139, 

148 (D. Conn. 1993) (discussing but not deciding whether fraudulent 

inducements which go beyond mere failures to disclose constitute 

constructive discharges), aff 1 d in part and rev1 d in part, 23 F .3d 

663, 668-69 (2d Cir. 1994). 

We emphasize that we make no evaluation of the factual or 

legal sufficiency of any evidence that plaintiffs may seek to 

present in the district court, such as the aforementioned 

management bulletin and the article in the MB Times. We simply 

hold that plaintiffs have stated a claim for constructive discharge 

by alleging that defendants purposely deceived them into accepting 

EMTP in order to prevent them from attaining greater pension 

rights. Whether plaintiffs can actually find and present evidence 

to this effect sufficient to establish a "prima facie case" under 

ERISA § 510 is another matter altogether. See Gavalik v. 

Continental Can Co., 812 F.2d 834, 852 (3d Cir.) (holding that in 

order to establish a "prima facie case" under section 510 of ERISA, 

a plaintiff must show "(1) prohibited employer conduct (2) taken 

for the purpose of interfering (3) with the attainment of any right 

to which the employee may become entitled") cert. denied, 484 U.S. 

979, 108 S. Ct. 495, 98 L. Ed. 2d 492 (1987) . 10 

10 We note that Judge Abram found that the "evidence of active 

misrepresentations" presented to him was insufficient. Plaintiffs 1 

App. at 447. We do not express any agreement or disagreement with 

this finding, and we acknowledge that such a finding in the future 

may be grounds for surrmary judgment on both plaintiffs 1 breach of 

fiduciary duties and ERISA § 510 claims. At the dismissal stage, however, evaluating plaintiffs 1 evidence is not appropriate. The 

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b. Discrimination 

As support for their discrimination claim under ERISA § 510, 

plaintiffs allege that defendants discriminated between managers 

and directors at Mountain Bell by making the "active employee" 

eligibility requirement to the 5+5 amendment applicable only to 

managers. Plaintiffs' App. at 409-12, ~~ 18-21. Plaintiffs 

contend that this "discrimination" violates ERISA § 510. 

Judge Abram addressed plaintiffs' discrimination claim in 

discussing plaintiffs' second and third claims for relief. He 

found that the allegations of discrimination did not set forth a 

claim cognizable under 29 U.S.C. § 1140. Plaintiffs' App. at 442, 

448. Judge Abram cited Judge Sparr's decision in Sabell, 1992 WL 

469776 at *7, finding that "there were legitimate reasons for the 

Defendant to differentiate between the Directors' Program group and 

the Plaintiffs [managers] for purposes of eligibility for 5+5 

benefits. 11 This court has since affii:med that decision, noting 

that 11 'ERISA does not mandate that employers provide any particular 

benefits, and does not itself proscribe discrimination in the 

provision of employee benefits.'" Averhart, slip op. at 17, 1994 

WL 588622 at *7 (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 

85, 91 (1983) and citing Owens v. Storehouse, Inc., 984 F.2d 394, 

398 (11th Cir. 1993) and McGann v. H & H Music Co., 946 F.2d 401, 

408 (5th Cir. 1991), cert. denied sub nom., Greenberg v. H & H 

Music Co., 113 S. Ct. 482 (1992)). 

For the same reasons noted in Averhart, we affii:m the 

focus must be on plaintiffs' complaint and the allegations therein. 

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dismissal of plaintiffs• cause of action for discrimination under 

ERISA § 510, 29 U.S.C. § 1140, in the present case. 

4. Void and/or arbitrary and capricious denial of 5+5 benefits to 

those who had accepted early retirement under EMTP option 2 

As discussed supra, plaintiff Cowdrey accepted termination 

under EMTP option 2 . Under option 2, Cowdrey was to take a three 

year leave of absence, get credit for three more years of service, 

and receive one-half of his annual salary as severance pay at the 

end of those three years. During the three year leave of absence, 

Cowdrey was to continue to receive employee benefits and 

participate in the US WEST Employee Stock Ownership Plan. 

In the eighth claim for relief, plaintiff Cowdrey alleges that 

the EBC and John G. Shea's decision to deny 5+5 benefits to those 

employees who were on leave of absence under EMTP option 2 is 11Void 

and/or arbitrary and capricious ... Plaintiffs• App. at 432, ~ 64; 

see also~ 50(e). Judges Abram and Sparr found this claim subject 

to dismissal, and we agree. 

Plaintiff Cowdrey alleges that the EBC's decision to deny 5+5 

benefits to EMTP option 2 retirees is void because 11 the EBC has not 

acted in accordance with §11 of the Pension Plan. 11 Id. at ~ 64 (a) . 

This court considered the same claim in reviewing Sabell and 

affirmed sumnary judgment, stating as follows: 

The Sabell plaintiffs contend that the 11 active 

employee [s] on the payroll 11 requirement in the 5+5 

amendment was invalid and should not have been applied to 

them because the requirement was not contained in the 

November 29, 1989, Board of Directors• resolution 

authorizing the EBC to adopt the proposed amendment. 

Plaintiffs • argument assumes that only the Board of 

Directors, not the EBC, had the authority to amend the 

Pension Plan. We disagree. 

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The Pension Plan expressly provides for amendments by the EBC itself "subject to the approval of the Board of 

Directors[.]" Averhart App. at 306. In this case, 

plaintiffs do not dispute that the EBC had Board approval 

to adopt the 5+5 amendment, albeit without specific reference to the "active employee [s] on the payroll" requirement. Because plaintiffs have thus failed to show 

that the adoption of the 5+5 amendment was procedurally flawed, we must reject their claim that the EBC was 

precluded from relying thereon in denying their benefit 

claims. 

Averhart, slip op. at 18, 1994 WL 588622 at *8. Given this finding 

in Sabell and the fact that plaintiffs in the present case also 

concede that the EBC had Board approval to adopt the 5+5 amendment, 

we must affirm the dismissal of plaintiff Cowdrey's claim that the 

"active employee" eligibility requirement is void. 

Cowdrey also alleges that the EBC's denial of 5+5 benefits is 

arbitra:ry and capricious because it "impair [ed] the rights of 

participants granted under the initial 5+5 Amendment" and "violated 

the ERISA provisions as set forth in the Second, Third, Fourth and 

Fifth Claims for Relief." Plaintiffs' App. at 432, ~ 64 (b) and 

(c). The "arbitrary and capricious" standard is applicable 

whenever an administrator or fiduciary has been given 

"discretionary authority to determine eligibility for benefits or 

to construe the terms of the plan. " Firestone Tire and Rubber Co. 

v. Bruch, 489 U.S. 101, 115, 109 S. Ct. 956-57, 103 L. Ed. 2d 80 

(1989); see, e.g., Rademacher v. Colorado Ass'n of Soil 

Conservation Districts Medical Benefit Plan, 11 F.3d 1567, 1569 

(lOth Cir. 1993); Sandoval v. Aetna Life and casualty Ins. Co., 967 

F.2d 377, 379-80 (lOth Cir. 1992). "An administrator's action is 

arbitrary and capricious if it is based on a 'lack of substantial 

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Appellate Case: 93-1184 Document: 01019282375 Date Filed: 04/19/1995 Page: 37 
evidence, mistake of law, bad faith, [or] conflict of interest.'" 

Counts v. Kissack Water and Oil Serv .. Inc., 986 F.2d 1322, 1324 

(lOth Cir. 1993) (quoting Winchester v. Prudential Life Ins. Co., 

975 F.2d 1479, 1483 (lOth Cir.l992)). 

Here, there is no allegation that the denial was based on a 

lack of substantial evidence, mistake of law, bad faith, and/or 

conflict of interest, or anything arguably akin to the above. The 

denial was simply based on the "active employee on the payroll" 

eligibility requirement. Accordingly, we affirm the dismissal of 

the eighth claim for relief. See Sandmt-ist/Averhart, 1992 WL 

469739 at *3-4 (granting surrmary judgment for defendants on 

"arbitrary and capricious" issue); Sabell, 1992 WL 469776 at *3-7 

(same); Averhart, slip op. at 13-18, 1994 WL 588622 at *5-8 

(affirming surrmary judgment on "arbitrary and capricious" issues in 

Sandmt-ist, Averhart, and Sabell). 

5. Using Pension Plan assets to benefit plan sponsor 

In their fourth claim for relief, plaintiffs allege that 

defendants "used surplus assets of the Pension Plan in a manner 

which inured to the benefit of the Plaintiffs' employer, [Mountain 

Bell] and [US WEST, ] and failed to hold the Pension Plan assets for 

the exclusive purposes of providing benefits to participants in the 

Pension Plan and their beneficiaries, in violation of ERISA § 

[ 4] 03 (c) . " Plaintiffs' App. at 427, ~ 49. Section 403 (c) of ERISA 

provides in pertinent part that "the assets of a plan shall never 

inure to the benefit of any employer and shall be held for the 

exclusive purpose of providing benefits to participants in the plan 

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and their beneficiaries and defraying reasonable expenses of 

administering the plan." 29 U.S.C. § 1103(c). 

Judge Abram recommended dismissal of plaintiffs' fourth claim 

for relief, and Judge Sparr agreed. Judge Abram fonnd that the 

plaintiffs had merely made a "conclusory allegation" and had failed 

to set forth any facts or law that supported their section 403(c) 

claim. Plaintiffs' App. at 448-49. Judge Abram also relied on 

Holliday v. Xerox Com., 732 F.2d 548, 551 (6th Cir.), cert. 

denied, 469 U.S. 917, 105 S. Ct. 294, 83 L. Ed. 2d 229 (1984), in 

which the Sixth Circuit stated: 

The language of ERISA stating that "the assets of a plan shall never inure to the benefit of any employer" cannot 

be read as a prohibition against any decisions of an 

employer with respect to a pension plan which have the 

obvious primary purpose and effect of benefitting the 

employees, and in addition the incidental side effect of 

being prudent from the employer's economic perspective. 

We agree with Judge Abram's analysis and affirm the dismissal 

of plaintiffs' fourth claim for relief. The anti-inurement or 

"exclusive benefit" policy of section 403(c) of ERISA is intended 

to "protect participants ' expected payments" by preventing 

employers from diverting funds to themselves. OUtzen v. FDIC ex 

rel. State Examiner of Banks, 948 F.2d 1184, 1188 (lOth Cir. 1991). 

An alleged violation of section 403(c) might, for example, involve 

a reversion of surplus assets to an employer at a plan' s 

termination pursuant to a plan provision. See, e.g., Borst v. 

Chevron Com., 36 F.3d 1308, 1320-21 (5th Cir. 1994); Holland v. 

Valhi Inc., 22 F.3d 968 (lOth Cir. 1994); OUtzen, 948 F.2d at 1185-

88. 

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In the present case, no such reversion, diversion, or any 

other sort of payment of surplus assets to Mountain Bell or US WEST 

is alleged. Plaintiffs simply claim that defendants should have 

used the sw:plus plan assets to benefit plaintiffs instead of using 

them to fund a second early retirement offer which furthered 

defendants ' desired reductions in force. It is undisputed that the 

sw:plus funds which plaintiffs wish had passed to them under EMTP 

remained with the Pension Plan and were still held in trust for 

participants in the plan and their beneficiaries. There is no 

allegation that the assets were used in any way other than to pay 

benefits to participants and beneficiaries and to pay reasonable 

administrative expenses. Hence, there are no allegations which 

would support the return of any assets to the Pension Plan under 

section 403(c) of ERISA. See Aldridge v. Lily-Tulip, Inc. Sala~ 

Retirement Plan Benefits Committee, 953 F.2d 587, 592 n. 6 (11th 

Cir. 1992) ("The exclusive benefit rule can only be violated if 

there has been a removal of plan assets for the benefit of the plan 

sponsor or anyone other than the plan participants. ") (citing 

Holliday, 732 F.2d at 551-52). 

6. Partial termination of Pension Plan 

In their seventh claim for relief, plaintiffs claim that the 

initial force reduction in which they and approximately 6, 000 other 

US WEST employees accepted termination under EMTP "constituted a 

partial termination of the Pension Plan under 29 U.S.C. § 1344." 

Plaintiffs' App. at 429, ~ 54. Plaintiffs allege that the force 

reduction was connected with "a major corporate event" and 

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Appellate Case: 93-1184 Document: 01019282375 Date Filed: 04/19/1995 Page: 40 
"involved a significant number of employees. "11 Id. at ~~ 54-55. 

Plaintiffs claim that they are entitled to a "distribution of 

Pension Plan assets, particularly surplus assets," as a result of 

this partial termination. Id. at ~ 57 . 

Judge Abram recommended that plaintiffs' seventh claim for 

relief be dismissed, and Judge Sparr agreed. Judge Abram based his 

recommendation on Sage v. Automation, Inc. Pension Plan and Trust, 

845 F.2d 885, 891 (lOth Cir. 1988) and Anderson v. Emergency 

Medicine Assocs., 860 F.2d 987, 990-91 (lOth Cir. 1988), in which 

this court held that voluntary employee decisions to leave the 

employer do not constitute employee terminations which can trigger 

a partial termination. Plaintiffs' App. at 451. 

As discussed supra in connection with the claims for 

constructive discharge under section 510 of ERISA, plaintiffs have 

alleged that their decision to accept termination under EMTP was 

fraudulently induced and therefore not voluntary. Given this 

allegation, neither Sage nor Anderson would appear to be 

applicable. The court must accordingly reverse the dismissal of 

11 Plaintiffs use the terms "major corporate event" and 

"significant number" to solidify their reliance on In re Gulf 

Pension Litigation, 764 F. Supp. 1149 (S.D. Tex. 1991), aff'd sub 

nom., Borst v. Chevron Corp., 36 F.3d 1308, 1314 n.ll (5th Cir. 

1994) (declining to consider on appeal whether partial termination 

had occurred) . In that case, the district court found that "IRS 

revenue rulings suggest that an employer-initiated pennanent reduction of either a significant number or a significant percent of employees from a plan as part of a major corporate event may constitute a partial termination." Id. at 1163 (citing Rev. Rul. 

81-27 1981-1 C.B. 228; Rev. Rul. 73-284, 1973-2 C.B. 139; and Rev. 

Rul. 72-439, 1972-2 C.B. 223) (emphasis added). 

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plaintiffs 1 partial tennination claim. 12 

7. Civil penalties for failure to supply requested infor.matian 

In their ninth claim for relief, plaintiffs sought the 

imposition of civil penalties against "the Defendant 

administrators" under 29 U.S.C. § 1132 (c), which provides in 

pertinent part: 

(1) Any administrator . . . (B) who fails or refuses 

to comply with a request for any information which such 

administrator is required by this subchapter to furnish 

to a participant or beneficiary . . . may in the court 1 s 

discretion be personally liable to such participant or 

beneficiary in the amount of up to $100 a day from the 

date of such failure or refusal, and the court may in its 

discretion order such other relief as it deems proper. 

Plaintiffs alleged that they "requested certain information" from 

"the Defendant administrators," but "the Defendant administrators" 

failed or refused to comply with that request. Plaintiffs 1 App. at 

432-33, ~~ 65-67. Plaintiffs did not specify what the "certain 

information" was nor identify the particular "Defendant 

administrators" to whom their requests were addressed. 

Judge Abram, noting that "thousands of doClllllents ha [d] been 

produced" and that the assessment of civil penalties under section 

1132 (c) was "for the court's discretion," reconmended dismissal of 

plaintiffs' ninth claim for relief because it simply "fail[ed] to 

state a claim." Plaintiffs 1 App. at 453. Judge Abram found that 

12 We note that partial termination claims are often 

exceedingly complex and that some courts, in sorting out such 

claims, have sought guidance from the Internal Revenue Service 

which is responsible for administering the partial termination 

statute. See, e.g., Weil v. Retirement Plan Admin. Conm., 933 F .2d 

106, 107 (2d Cir. 1991) (inviting the IRS to participate as an 

amicus on rehearing) . On remand, the district court may want to 

consider doing likewise. 

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plaintiffs had not alleged what documents were requested, what 

documents were received, and how plaintiffs had been harmed. Judge 

Sparr agreed with Judge Abram' s findings. We too agree with Judge 

Abram's analysis and affirm the dismissal of plaintiffs' ninth 

claim for relief . 13 

8. Other •claims for relief• 

Plaintiffs' remaining claims, the first and sixth "claims for 

relief, " are actually not claims at all. The first claim for 

relief is a laundry list of declarations plaintiffs wish the court 

to make with respect to "the rights and the legal relationships 

between the parties." Plaintiffs' App. at 422-24. All of the 

declarations sought are, in one way or another, subsumed into the 

other claims for relief. We therefore affirm the dismissal of 

plaintiffs' first claim for relief. 

In the sixth claim for relief, plaintiffs seek to invoke the 

contractual remedy of rescission. Plaintiffs claim that they 

accepted EMTP "through mistake, undue influence, coercion or fraud" 

and state that they now wish to rescind their acceptance and 

receive instead the benefits of the 5+5 amendment. Id. at 428. 

Plaintiffs fail, however, to cite any ERISA provision that 

authorizes the use of rescission as a remedy. We therefore affirm 

the dismissal of plaintiffs' sixth claim for relief. 

u The plaintiffs in Sandgyist asserted a similar claim for 

civil penalties against defendant John G. Shea. This court 

affirmed summary judgment for Shea because he was not an 

"administrator" within the meaning of the statute and thus could 

not be subject to the penalties authorized by 29 U.S.C. § 1132{c). 

Averhart, slip op. at 19, 1994 WL 588622 at *8. 

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c 

Recusal 

'Ihe standards for recusal are well established. 28 U.S.C. § 

455 (a) provides that a judge "shall disqualify himself in any 

proceeding in which his impartiality might reasonably be 

questioned." Subsection (b) (1) further provides for mandatory 

recusal where the judge "has personal bias or prejudice concerning 

a party, or personal knowledge of disputed evidentiary facts. " 'Ihe 

basic test is whether a reasonable person armed with the relevant 

facts would harbor doubts about the judge's impartiality. United 

States v. Cooley, 1 F.3d 985, 993 (lOth Cir. 1993); United States 

v. Burger, 964 F.2d 1065, 1070 (lOth Cir. 1992); Hinman v. Rogers, 

831 F.2d 937, 939 (lOth Cir. 1987). "'!here is as much obligation 

for a judge not to recuse when there is no occasion for him to do 

so as there is for him to do so when there is." Hinman, 831 F. 2d 

at 939. We review a recusal decision on an abuse of discretion 

standard. Willner v. University of Kansas, 848 F.2d 1020, 1023 

(lOth Cir. 1988), cert. denied, 488 U.S. 1011, 109 S. Ct. 797, 102 

L. Ed. 2d 788 (1989) . 

Plaintiffs assert that Judge Sparr should have recused himself 

for the following reasons: (1) he had formerly worked for and 

represented Mountain Bell; (2) he had special knowledge of the 

internal workings of Mountain Bell; and ( 3) he knew Fred Cook and 

was acquainted with other individuals at US WEST. Defendants 

counter that (1) Judge Sparr terminated his employment with 

Mountain Bell more than twenty years ago and has not seen Mr. Cook 

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and other witnesses or family members since then, and (2) in any 

event, mere familiarity is not enough to mandate a recusal. 

We find that Judge Sparr 1 s denial of plaintiffs 1 motion to 

recuse was not an abuse of discretion. A reasonable person would 

not harbor doubts about Judge Sparr 1 s impartiality in the present 

case. Counsel in Averhart, Sandgyist, and Sabell perceived no 

"appearance of impartiality," (Defendants 1 Supp. App. at 210), and 

doubts were not raised simply because Judge Sparr worked for or 

even represented Mountain Bell some twenty to thirty years ago and 

may have socialized with fellow Mountain Bell employees. See 

United States v. Lovaglia, 954 F.2d 811, 815-17 (2d Cir. 1992) 

(affirming denial of recusal where judge 1 s business or social 

relationship ceased seven or eight years prior to proceedings); 

Sierra Club v. Simkins Indus .. Inc., 847 F.2d 1109, 1116-18 (4th 

Cir. 1988) (affirming denial of recusal where judge had been member 

of Sierra Club fourteen years ago), cert. denied, 491 U.S. 904, 109 

S. Ct. 3185, 105 L. Ed. 2d 694 (1989) .· Moreover, there is nothing 

in the record to suggest that Judge Sparr was biased in favor of 

defendants. Judge Sparr appears to have been more than fair in his 

treatment of plaintiffs, giving them numerous opportunities to 

replead their case. 

Accordingly, the judgment of the United States District Court 

for the District of Colorado is AFFIRMED IN PART AND REVERSED IN 

PART. The case is remanded to the district court for proceedings 

consistent with this opinion. 

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