2002 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-30-2002

Romero v. SmithKline Beecham

Precedential or Non-Precedential: Precedential

Docket No. 01-3273

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Recommended Citation

"Romero v. SmithKline Beecham" (2002). 2002 Decisions. Paper 680.

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PRECEDENTIAL 

 Filed October 30, 2002 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 01-3273 

LOUISE C. ROMERO 

Appellant 

v. 

SMITHKLINE BEECHAM, 

a Delaware Corporation; 

SMITHKLINE BEECHAM PENSION PLAN; 

VINCENT C. BRUETT; 

STANLEY J. SEROCCA, JR. 

ON APPEAL FROM THE 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW JERSEY 

District Court Judge: Honorable Dickinson R. Debevoise 

(D.C. No. 99-1308) 

Argued: September 12, 2002 

Before: ALITO and FUENTES, Circuit Judges, 

and OBERDORFER,* District Judge 

(Opinion Filed: October 30, 2002) 

_________________________________________________________________ 

* The Honorable Louis F. Oberdorfer, Senior District Judge for the 

District of Columbia, sitting by designation. 

 

 (ROBERT H. JAFFE (Argued) 

 Robert H. Jaffe & Associates, P.A. 

 8 Mountain Avenue 

 Springfield, NJ 07081 

 Counsel for Appellant 

 JACQUELINE V. GUYNN 

 BRIAN T. ORTELERE (Argued) 

 JEFFREY K. TECHENTIN 

 Pepper Hamilton, L.L.P. 

 3000 Two Logan Square 

 Eighteenth & Arch Streets 

 Philadelphia, PA 19103-2799 

 Counsel for Appellees 

OPINION OF THE COURT 

ALITO, Circuit Judge: 
Plaintiff Louise Romero brought this action under ERISA 

sections 502(a)(1)(B), 502(c)(1), and 510, 29 U.S.C. 

SS 1132(a)(1)(B), 1132(c)(1), and 1140, claiming that she 

was wrongfully denied ERISA benefits, was terminated for 

the purpose of interfering with her attainment of ERISA 

rights, and was entitled to a civil penalty because the 

administrator of her employer’s plan did not provide 

requested plan documents within the time specified by 

statute. The District Court granted summary judgment in 

favor of the defendants, holding that (1) defendant 

SmithKline Beecham did not abuse its discretion when it 

declared Romero ineligible for enhanced retirement benefits, 

(2) SmithKline did not terminate Romero in order to 

sabotage her benefits package, and (3) Romero was not 

entitled to a civil penalty from defendant Serocca, 

SmithKline’s ERISA plan administrator. We affirm the 

judgment of the District Court with respect to the first two 

issues, but we hold that the District Court misconstrued 

ERISA section 502(c)(1), which governs the civil-penalty 

issue, and we therefore reverse and remand for further 

proceedings regarding that issue. 

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I. 

Romero began working for SmithKline in 1973. In 1995, 

the company announced a "Voluntary Reduction in Force" 

(VRIF) plan promising enhanced severance packages to 

employees retiring early. Romero agreed to a package 

conditioned on satisfactory completion of her work 

assignments and a departure date during the fourth 

quarter of 1997. She intended to retire on December 31, 

1997, but SmithKline scheduled her last day as October 3, 

1997. Since October falls during the fourth quarter of the 

calendar year, this date preserved Romero’s eligibility for all 

the benefits that she would have received by leaving in 

December, but she evidently did not understand this and 

became deeply angered. 

Romero made several remarks that some employees 

construed as threats against Human Resources Director 

Vincent Bruett, who had helped Romero arrange her 

resignation. She canceled her plate at a company dinner 

that Bruett planned to attend, explaining to Human 

Resources employee Betzaida Boynton: 

 My spouse doesn’t want to have to see that man’s face 

 after everything he has done to me. . . . I can’t say how 

 he might react when he sees that man. . . . I hope 

 someday somebody puts a bullet in that man. . . . I 

 won’t do it because I [am] not going to jail for that 

 man, but I would love to see the day when someone 

 does get him. 

When Boynton questioned whether Romero really meant 

what she had said, Romero replied, "Yes, I do." Romero 

then left Boynton a voice-mail message stating: 
 I want to correct things, if anything happened to that 

 mean, soulless man that you work for, if somebody get 

 [sic] him, I don’t want anyone to think that it is me, 

 but I sure would shed no tear and I will be happy, so 

 it ain’t going to be me if anything does happen. If 

 happen [sic], I don’t know, but anyhow, my hands are 

 clean. My mind isn’t, but my hands are. 

Boynton was noticeably unsettled and shaken by the 

incidents. 

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Boynton reported the matter to SmithKline’s security 

department, which contacted the police. The company 

summoned Romero to a disciplinary proceeding, but she 

refused to speak without counsel. SmithKline then 

suspended her and converted the suspension to a 

termination a week later, on April 29, 1997, citing a 

company policy prohibiting "[d]eliberate or reckless action 

that causes either actual or potential loss to the company 

or employees, damages to company or employee property, 

or physical injury to employees." Because Romero did not 

remain in SmithKline’s employment in the fourth quarter of 

the year or satisfactorily complete her work, the 

termination disqualified her from receiving the enhanced 

severance package. 

Romero, both personally and through her attorney, 

attempted to negotiate for the enhanced benefits with 

SmithKline’s retiree benefits coordinators. On January 2, 

1999, she wrote to Kim Nelson, a Retiree Benefits 

Representative at SmithKline, requesting copies of the 

company’s amended pension plan and employee 

handbooks. Two weeks later, Romero’s attorney wrote to 

another benefits representative, Gwen Ubil, to discuss 

reinstatement of benefits. SmithKline did not respond to 

the letters until shortly after Romero commenced litigation 

in March 1999, when plan administrator Stanley Serocca 

provided a copy of the plan description and reiterated 

SmithKline’s justifications for denying her claim. 

Romero commenced this action in District Court, but 

since she had never filed an administrative appeal, her 

action was stayed pending exhaustion of administrative 

remedies. On November 29, 1999, Serocca denied Romero’s 

appeal, citing her termination prior to 1997’s fourth quarter 

and her consequent failure satisfactorily to complete her 

work. Responding to Romero’s efforts to contest the 

propriety of her termination, Serocca later explained: 

"Death threats in the workplace constitute a more than 

sufficient basis for firing." When Romero resumed the 

litigation in District Court, she asked for de novo review of 

SmithKline’s decision or review under a modified arbitraryand-capricious standard. She also asked the court to 

impose personal liability on Serocca for his tardiness in 

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supplying the plan materials. The District Court granted 

summary judgment for all defendants on all claims. This 

appeal followed. 

II. 

Summary judgment is appropriate when the record 

discloses no genuine issue of material fact and the moving 

party is entitled to judgment as a matter of law. F ED. R. CIV. 

P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 

242, 247-48 (1986). Appellate review of a grant of summary 

judgment is plenary. City of Erie v. Guaranty Nat’l Ins. Co., 

109 F.3d 156, 159 (3d Cir. 1997). 

Decisions of ERISA fiduciaries generally merit deference 

from courts. De novo review of a denial of benefits is 

appropriate only when a plan administrator has no 

"discretionary authority to determine eligibility for benefits 

or to construe the terms of the plan." Firestone Tire & 

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Romero 

argues that Serocca had no "real discretion" to review her 

case because he believed that he could not overturn 

SmithKline’s decision to terminate her.1 Since Romero 

plainly could not satisfy the conditions precedent to 

enhanced benefits under the VRIF after being fired, Serocca 

was, she submits, "fatally inhibited from exercising 

discretion." We disagree and decline to hold that an ERISA 

fiduciary exercises no "discretionary authority to determine 

eligibility for benefits" simply because a particular case’s 

facts are so unfavorable to a claimant that a denial seems 

virtually obligatory. A contrary rule would yield the absurd 

result of reserving the least deferential standard of review 

for the least meritorious appeals. 

Romero asks alternatively for review under an arbitraryand-capricious standard that retains the deference 

_________________________________________________________________ 

1. Romero challenges this belief as mistaken and maintains she was 

entitled to contest her termination during ERISA review. That is 

obviously incorrect. "It defies common sense to suggest that a 

corporation must allow a retirement board to make personnel decisions 

such as determining which plants need fewer employees." Trenton v. 

Scott Paper Co., 832 F.2d 806, 809 (3d Cir. 1987). 

 5 

 

accorded to administrative decisions but appraises a 

fiduciary’s "conflict of interest" as a "factor in determining 

whether there is an abuse of discretion." Firestone, 489 

U.S. at 115 (citation omitted); see also Pinto v. Reliance Std. 

Life Ins. Co., 214 F.3d 377, 382-86 (3d Cir. 2000) 

(recounting efforts by the Courts of Appeals to resolve 

ambiguity in Firestone’s conflict-of-interest standard). 

Romero argues that a conflict of interest tainted Serocca’s 

review because she sought $50,000 in benefits from her 

employer and because Serocca supervised Bruett. The 
District Court found neither argument convincing because 

Romero "failed to adduce evidence that a potential payout 

of approximately $50,000 in benefits by SmithKline, a 

company with $12.5 billion in revenues in 1999, created a 

conflict" and because the District Court saw"no support in 

the record for Romero’s contention that Serocca was 

conflicted by the fact that he was Bruett’s supervisor." The 

District Court properly applied the reasoning of our 

decisions in Pinto, 214 F.3d at 388, and Kotrosits v. GATX 

Non-Contributory Pension Plan for Salaried Employees , 970 

F.2d 1165, 1173-74 (3d Cir. 1992), in holding that the 

potential payout to Romero under the benefits plan was 

insufficient to establish a conflict of interest. We also agree 

that Serocca’s supervision of Bruett establishes no such 

conflict. 

Reviewing Serocca’s decision under the arbitrary and 

capricious standard, the District Court found it within 

reason and supported by substantial evidence. We agree.2 

Moreover, because Romero does not dispute that " ‘there is 

sufficient evidence for a reasonable person to agree with the 

[administrator’s] decision,’ " Courson v. Bert Bell NFL Player 

Retirement Plan, 214 F.3d 136, 142 (3d Cir. 2000) (citation 

omitted), the District Court plainly had no basis for 

overturning Serocca’s decision as an abuse of discretion. 

Summary judgment in favor of SmithKline on Romero’s 

section 502(a)(1)(B) claim was therefore proper. 

The District Court also held that Romero did not state a 

claim under section 510 of ERISA, 29 U.S.C. S 1140, which 

_________________________________________________________________ 

2. Indeed, we would sustain the decision even under a less deferential 

standard. 

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prohibits terminations "for the purpose of interfering with 

the attainment of any right to which [a] participant may 

become entitled under the plan . . . ." 29 U.S.C.S 1140 

(2002). In order to state a section 510 claim a plaintiff must 

allege: "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." Dewitt v. 

Penn-Del Directory Corp., 106 F.3d 514, 522 (3d Cir. 1997). 

Here, Romero alleges a "conspiracy" to deny her benefits, 

but she does not identify any facts in the record that would 

establish either prohibited conduct or the requisite"specific 

intent" to interfere with benefits. Id. A party opposing a 

motion for summary judgment must "go beyond the 

pleadings" and demonstrate that a reasonable factfinder 

could return a favorable verdict. Celotex Corp. v. Catrett, 

477 U.S. 317, 324 (1986). Romero’s vague allegations of 

malicious termination, unsupported by any facts, are 

insufficient. 

Finally, the District Court declined to impose personal 

liability on Serocca for delays in responding to Romero’s 

information requests. Under ERISA section 502(c)(1), 
 [a]ny administrator . . . who fails or refuses to comply 

 with a request for any information which such 

 administrator is required by this title to furnish to a 

 participant . . . may in the court’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. 

29 U.S.C. S 1132(c)(1) (2002). Citing authority cautioning 

that section 502(c)(1) must be strictly construed, see 

Haberern v. Kaupp Vascular Surgeons Ltd., 24 F.3d 1491, 

1505 (3d Cir. 1994), the District Court held that because 

Romero addressed her requests for information to Nelson 

and Ubil, not Serocca, she could not recover the civil 

penalty. 

We believe that the District Court’s reading of section 

502(c)(1), 29 U.S.C. S 1132(c)(1), is not compelled by the 

statutory language and is unduly narrow. Although section 

502(c)(1) specifies the address to which a response to a 

 7 

 

request must be sent -- "the last known address of the 

requesting participant or beneficiary" -- it nowhere states 

that a request for covered information must be served upon 

or even mailed personally to the plan administrator. 

Moreover, such a requirement would in some 

circumstances unreasonably frustrate the evident purposes 

of the provision. For example, if the plan administrator is 

changed and a request for information is addressed to the 

previous administrator but actually reaches the current 

administrator, we see no reason why section 502(c)(1) 

should not apply. In addition, there may be other 

circumstances in which it is not easy for a participant or 

beneficiary to obtain the name of the administrator. We 

have no doubt that section 502(c)(1) was not meant to 

impose upon a plan participant or beneficiary seeking 

information the inflexible requirement of addressing the 

request to the current plan administrator. 

At the same time, however, we agree with the District 

Court’s general view that section 502(c)(1) must not be read 

too loosely. First, we believe that section 502(c)(1) requires 

actual receipt by the administrator. This interpretation is 

supported by the statute’s reference to an administrator 

"who . . . fails or refuses to comply with a request for . . . 

information." It is not customary to refer to a person’s 

failure or refusal to comply with a request that has never 

been received. Furthermore, it is unlikely that Congress 

wanted to impose a civil penalty on a person who has not 

engaged in any wrongful conduct. 

Second, because section 502(c)(1) requires a response 

within a rather short time (30 days) "after [the] request," 

the statute appears to contemplate that the request will be 

delivered in a manner that permits the administrator or the 
appropriate subordinates to work on the matter soon after 

the request is made. Accordingly, we believe that the 30- 

day period should not begin to run until the request is 

actually received either by the administrator or those under 

the administrator’s supervision. This requirement, we 

conclude, provides adequate protection for an administrator 

in a situation in which a request for information is not 

delivered or sent directly to the administrator. 

 8 

 

Because the District Court in the present case did not 

correctly interpret section 502(c)(1), we remand this case for 

further proceedings relating to Romero’s civil-penalty claim. 

We note that if an administrator does not comply with a 

request within the specified time, the District Court must 

make a discretionary decision as to whether a civil penalty 

should be assessed and as to the amount of any such 

penalty. Section 502(c)(1), as noted, provides that a penalty 

may be imposed "in the court’s discretion" and that any 

such penalty may be in any amount "up to $100 a day." 

Appropriate factors to be considered in making these 

decisions include "bad faith or intentional conduct on the 

part of the administrator, the length of the delay, the 

number of requests made and documents withheld, and the 

existence of any prejudice to the participant or beneficiary." 

Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76, 90 

(2d Cir. 2001) (citation omitted). Other circuits have studied 

the role of prejudice or damages in the inquiry and have 

concluded that although they are often factors, neither is a 

sine qua non to a valid claim under section 502(c)(1). See 

Bannistor v. Ullman, 287 F.3d 394, 407 (5th Cir. 2002); 

Yoon v. Fordham Univ. Faculty & Admin. Ret. Plan, 263 F.3d 

196, 204 n.11 (2d Cir. 2001); Faircloth v. Lundy Packing 

Co., 91 F.3d 648, 659 (4th Cir. 1996); Moothart v. Bell, 21 

F.3d 1499, 1506 (10th Cir. 1994); Daughtrey v. Honeywell, 

Inc., 3 F.3d 1488, 1494 (11th Cir. 1993). 

III. 

We affirm the District Court’s grant of summary 

judgment to the defendants on Romero’s claims under 

sections 502(a)(1)(B) and 510 of ERISA. We reverse the 

District Court’s grant of summary judgment to defendant 

Serocca on Romero’s section 502(c)(1) claim and remand for 

further proceedings related to that claim. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 9