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. e du/thir dc ir c uit_1998/94Filed April 29, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NO. 97-5497

FRANK C. SCHOONEJONGEN; WESLEY L. LOSSON; JOHN S. DUNNING; WILLIAM MARTONE; WILLIAM V. HANZALEK; EDWARD F. ZIEK; MELVIN DEBLOCK; JOSEPH COLQUHOUN; JOSEPH MAJERSCAK; GERARD ABBAMONT; and OLGA WOLSEY, on behalf of themselves and all others similarly situated,

Appellants

v.

CURTISS-WRIGHT CORPORATION

ON APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY (D.C. No. 84-cv-04542)

Argued March 17, 1998

Before: SLOVITER, RENDELL and SEITZ, Circuit Judges

.

(Opinion Filed: April 29, 1998)

Nicholas F. Lewis, Esquire (Argued) Everett E. Lewis, Esquire Shirely Fingerhood, Esquire Lewis, Greenwald, Clifton & Lewis

2l8 West 40th Street New York, New York l0018 Attorneys for AppellantsStephen F. Payerle, Esquire (Argued)

Laurence Reich, Esquire Carpenter, Bennett & Morrissey 100 Mulberry Street Newark, New Jersey 07102-4079 Attorneys for Appellee

OPINION OF THE COURT

SEITZ, Circuit Judge.

The sole but important issue in this appeal, which stems from an action alleging a violation of section 402( b)(3) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. S 1102(b)(3) ("ERISA"), has already been fra med for us by the Supreme Court in its mandate to our court on remand.1 In particular, we will address the questio n directly posed by the Supreme Court: "[W]hether Curtiss-Wrig ht's valid amendment procedure -- amendment `by the company' -- was complied with in this case." Curtis s-Wright Corp. v. Schoonejongen, 514 U.S. 73, 85 (1995). The parties agree that we should apply principles of Delaware c orporate law to resolve that question. See Schoonejongen v. CurtissWright Corp., Nos. 92-5695, 92-5710 (3d Cir. Aug. 3 0, 1995) (unpublished opinion).

I. Factual Background

A. Procedural History

The long and contentious history of this case, whic h spans over fourteen years of litigation, is set for th in Schoonejongen v. Curtiss-Wright Corp., 18 F.3d 1034 (3d Cir. 1994), when this court first considered the ma tter. To summarize, the Curtiss-Wright Corporation ("CW") ac tively maintained a retirement health benefits plan ("the Plan") for

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1. The district court asserted subject matter juris diction pursuant to the civil enforcement provisions in ERISA, 29 U.S.C. S 1132. Jurisdiction of

this court arises out of 28 U.S.C. S 1291 to review the district court's final order granting summary judgment.

2all non-bargaining unit employees who worked at its

production facilities, including one such plant in Wood Ridge, New Jersey. These retirement health benefits

, granted in 1966, were governed by two principal documents: the Plan Constitution and the Summary Pl an Description ("SPD"). In early 1983, CW purportedly issued an amended SPD providing that upon the closure of a CW plant, health benefits for that facility's retirees would be terminated.2 Later that year, CW closed its Wood Ri dge plant and accordingly notified the plant's retirees of the termination of health benefits. Mr. Richard Sprigle , who was the Executive Vice President in charge of the f acility's operations, informed Wood Ridge retirees of this termination under the amended SPD by a letter dated November 4, 1983.

In 1984, the affected retirees instituted a class a ction in the district court, alleging that CW had wrongfully

terminated their retirement health benefits and tha t they had a vested right to these benefits for life. Afte r six years of litigation and a bench trial, the district court in 1990 dismissed most of the plaintiffs' claims, including one contention that CW had contractually bound itself t o provide retirement health benefits for life. The di strict court found, however, that the revised SPD language conce rning

the termination of benefits constituted an "amendme nt" to

the Plan and therefore fell within ERISA's section 402(b)(3), which requires that every employee benefit plan mus t "provide a procedure for amending such plan, and fo r identifying the persons who have authority to amend the plan." 29 U.S.C. S 1102(b)(3). The district court t hen held that, as an amendment, the relevant SPD language wa s not adopted under an amendment procedure as required by ERISA. Therefore, the district court concluded that the

terminations of health benefits under the amended P lan were void ab initio and ordered CW to pay a signifi cant

amount in retroactive benefits.

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2. This addition to the SPD, found under the headin g "Termination of Health Care Benefits," reads: "Coverage under this Plan will cease for retirees and their dependents upon the termination of business operations of the facility from which they retired. " App. at 334.

3On appeal to our court, CW argued that the revised SPD

language was in fact adopted under an amendment procedure contained in a standard reservation claus e which provided that "[t]he Company reserves the right at any time and from time to time to modify or amend, in whole or in part, any or all of the provisions of the Plan." CW contended that this procedure was valid under secti on 402(b)(3) because it identified "the Company" with the authority to amend the retirement benefits plan. Th is court rejected that argument, reasoning that the purpose behind the section 402(b)(3) requirement was to "ensure th at all interested parties will know how a plan may be alte red and who may make such alternations. Only if they know t his information will they be able to determine with cer tainty at any given time exactly what the plan provides." Schoonejongen v. Curtiss-Wright Corp., 18 F.3d 1034 , 1038 (3d Cir. 1994). As a result, our court reasoned tha t section 402(b)(3) requires enumeration with specificity "wh at individuals or bodies within the Company could prom ulgate an effective amendment." Id. at 1039. Because simpl y identifying "the Company" did not explicitly identi fy such individuals or bodies, the court affirmed the distr ict court, holding that CW adopted the revised SPD under an amendment procedure that failed to comply with ERIS A section 402(b)(3).

The Supreme Court granted CW's petition for certior ari and reversed in a unanimous opinion. The Court obse rved that the text of section 402(b)(3) contains only tw o requirements: "a `procedure for amending [the] plan ' and `[a procedure] for identifying the persons who have aut hority to amend the plan.' " Curtiss-Wright Corp. v. Schoonej ongen, 514 U.S. 73, 78 (1995) (quoting 29 U.S.C. S 1102(b) (3)) (alteration and emphasis in original). Next, the Co urt held that merely identifying "the Company" with the auth ority to amend the plan comports with a literal reading of t he section, as nothing in the statute required an iden tification with any more particularity. The Court noted, howev er, that for "the Company" language to make sense, there mus t be some reference to principles of corporate law in or der to determine who has authority to make decisions on be half of a company.3 Id. at 80-81. As to whether CW's reserv ation

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3. The Supreme Court cited Judge Roth's concurring reasoning on this point. See Curtiss-Wright, 514 U.S. at 80 (citing S choonejongen, 18 F.3d at 1039 n.3).

4clause constituted a procedure for amending the pla n, the

Court once again reasoned that the literal terms of section 402(b)(3) are ultimately indifferent as to the leve l of detail in an amendment procedure or in an identification proc edure. Because the unilateral authority to terminate a pla n is still a "procedure" nonetheless, the reservation clause, in the Court's view, satisfied this prong of section 402(b )(3).

The Court then remanded the case to our court to determine "whether Curtiss-Wright's valid amendment procedure -- amendment `by the Company' -- was comp lied with in this case." Id. at 85. The Supreme Court in structed us that "[t]he answer will depend on a fact-intensi ve inquiry, under applicable corporate law principles, into what persons or committees within Curtiss-Wright possessed plan amendment authority, either by expre ss delegation or impliedly, and whether those persons or committees actually approved the new plan provision contained in the revised SPD." Id. If, the Court co ntinued, the revised plan is found not to have been properly authorized when issued, the question would then ari se whether any subsequent actions attributable to CW c ould serve to ratify the amendment ex post. The Court specifically identified as a possible basis for rat ification the November 4, 1983 letter under Mr. Sprigle's name informing individual retirees of the termination. I d.

On remand from the Supreme Court, both parties argu ed before us that it was possible to decide the case o n the existing record. The panel, however, decided that a remand to the district court was appropriate because of a factual dispute -- namely, whether anyone at CW possessed t he actual or implied authority to amend the plan. See Schoonejongen v. Curtiss-Wright Corp., Nos 92-5695, 92- 5710 (3d Cir. Aug. 30, 1995) (unpublished opinion). In remanding, we rejected the argument raised by CW th at the Board in 1990 had retroactively ratified the Plan b y resolution so that there was no need to consider qu estions of authority. We held that under Delaware corporate law a "[r]atification cannot relate back so as to defeat intervening rights of strangers to the transactions." Id. at 4 (quoting 2A William M. Fletcher, Fletcher Cyclopedia of the Law of Private Corporations S 782, at 647-48 (perm. rev. e d. 1992))

5(alteration in original); see also Essential Enterp rises Corp.

v. Automatic Steel Prods., Inc., 164 A.2d 437 (Del. Ch. 1960). Because the ex post ratification of the amen ded SPD would defeat the rights of third parties, this cour t rejected the 1990 attempted ratification by the board and accordingly remanded the matter to the district cou rt for further proceedings with respect to the actual or i mplied authority of CW to adopt the 1983 amendment or to r atify

it.

B. Facts Discovered on Remand

Renewed discovery by the parties in the district co urt revealed the following undisputed facts. CW is a De laware corporation and has adopted by-laws applicable at a ll times here pertinent which gives the Chairman of the Boar d of Directors, as Chief Executive Officer ("CEO"), "gen eral and active control of [the corporation's] business and affairs." App. at 441. They expressly include the authority t o sign all contracts, obligations, and other instruments on be half of the corporation. Id. The by-laws further designate the President as the Chief Operating Officer and bestow "general and active control of [the corporation's] operations," including the authority to execute con tracts, fix employee compensation other than primary office rs, and "all other duties and powers usually appertaining t o the office of president of a corporation," except as ot herwise stated in the by-laws. Id. at 441-43. Finally, the by-laws provide that the Vice-Presidents "shall perform all such duties and exercise all such powers as may be provi ded by these by-laws or as may from time to time be determ ined by the Board of Directors, ... the Chairman, or the Pr esident."

Id. at 443.

Mr. T. Roland Berner, who died in the spring of 199 0, long before remand to the district court, was CW's Chairman of the Board, CEO, and President. Mr. Char les Ehinger and Mr. Richard Sprigle, both now retired, were CW's two Executive Vice Presidents. While the preci se responsibilities of Mr. Ehinger and Mr. Sprigle are the subject of some disagreement between the parties to this action, although not between the two Vice President s themselves, it is not disputed that Mr. Ehinger gen erally

6handled corporate staff issues for all CW employees and

Mr. Sprigle was essentially in charge of operations at the Wood Ridge facility in New Jersey. App. at 181, 247

.

Discovery before the district court also yielded th e following undisputed facts relating to the Plan's h istory. CW's post-retirement and health benefits plan was established, implemented, and administered without any formal board action other than a 1976 authorization of an undertaking to self-insure its health insurance pla ns and an adoption of a Trust Agreement in connection with that self-insurance. There is no written delegation of a uthority over Plan matters to any particular corporate offic er, either by name or by title. On September 1, 1976, Mr. Ehin ger executed a Plan Constitution as the general instrum ent governing welfare benefits, and thereby purported t o create a CW retirement benefits Plan that complied with ER ISA. The board took no part in this action, and its minu tes are completely silent as to Plan matters until November 8, 1990, when it sought to retroactively ratify the 19 83 SPD amendment at issue. In 1978 and 1981, Plan amendmen ts providing for an adjustment of health benefits had been made by certain managers working under Mr. Ehinger' s direction. App. at 337-39. Again, corporate records do not show formal involvement by either the board or Mr. Berner with respect to these amendments.

It is undisputed that Mr. Richard A. DuBois, the Corporate Manager for Benefits, and Mr. Aaron J. Ca rr, CW's labor counsel, initially drafted the 1983 SPD amendment providing for the termination of health b enefits for a closed plant's retirees. Here the parties' ac counts begin to diverge. CW contends, based on the deposit ion testimony of Mr. Ehinger and Mr. Sprigle, that Mr. Berner, the President, orally delegated the authority to de al with Plan matters to Mr. Ehinger. It further argues that Mr. Ehinger explicitly authorized Mr. DuBois and Mr. Ca rr to draft the necessary language in the SPD amendment w hich would provide for a termination of health benefits upon the closing of a CW plant. CW points to Mr. Ehinger's assertions in his deposition that he read the provi sion at issue and approved it pursuant to his authority ove r Plan administration. App. at 195-97. Plaintiffs, on the other

7hand, strenuously dispute in their briefs the testi mony of

Mr. Ehinger that he had intentionally amended the S PD based on an oral delegation of authority by Mr. Ber ner. Pointing to various alleged inconsistencies in Mr. Ehinger's deposition, plaintiffs emphasize that CW issued the SPD amendment without ever intending it to be a substan tive change in policy.

C. The District Court's Disposition on Remand

Based on the record developed on remand, the distri ct court considered the motions for summary judgment submitted by the plaintiffs and by CW. In initially addressing the issue of authority, the court found, relying on its earlier opinion, that CW intended to amend t he Plan in 1983 and did not, as plaintiffs argued, merely s eek to clarify existing coverage.4 Second, the district co urt identified Mr. Berner as one who possessed the expr ess authority to amend the SPD in 1983 based on its rea ding of the corporate by-laws. The court further observe d that the corporation vested Mr. Ehinger with an implied authority to undertake such action because he had originally executed the Plan Constitution with the board's knowledge. Notably, however, the district court ref used to find that Mr. Berner orally delegated authority to Mr. Ehinger, despite Mr. Ehinger's deposition to that e ffect, because there were "issues of credibility" which th e court considered inappropriate for resolution at the summ ary judgment stage. Nevertheless, having concluded that Mr. Ehinger possessed the necessary authority to amend the SPD in 1983 based on the board's silence, the distr ict court held that a genuine issue of material fact existed as to whether Mr. Ehinger actually approved the revised S PD provisions under his authority. Here, the court onc e again observed that the only support for Mr. Ehinger's ac tual

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4. Plaintiffs on appeal continue to press their arg ument that CW never intended to "amend" the Plan, but only sought to in clude this language as a "clarification" of existing coverage. We agree with the district

court and find this issue settled by its initial finding, after a bench trial,

that "the language ... providing for a termination of be nefits in the event of

a plant closing constituted an amendment of the plan, not a clarification of existing terms...." App. at 34.

8approval was his own testimony at deposition, which it also

concluded would not constitute an appropriate basis for summary judgment because issues of credibility rema ined.

Because the district court did not find that anyone at CW with authority to amend the Plan actually approved the SPD amendment, it addressed whether the doctrine of ratification provided an appropriate alternative ba sis to hold the 1983 Plan amendment as a valid corporate a ct. Here, the district court concluded that the 1983 le tter bearing Mr. Sprigle's name and on CW letter head se rved to ratify the revised SPD. Reasoning that Mr. Sprigle possessed the authority to act on behalf of the Woo d Ridge facility, the letter to that plant's retirees advis ing them of

the health benefits termination could be considered an authorized act on behalf of CW. Thus, the district court

concluded that even if Mr. Carr and Mr. DuBois had revised the SPD without authority from Mr. Ehinger, Mr. Spr igle's subsequent actions constituted a valid corporate ac t ratifying the Plan amendment.

Plaintiffs now appeal the district court's grant of summary judgment in favor of CW. Our standard of re view is plenary. Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1158 (3d Cir. 1990).

II. Authority

As we have noted, the district court refused tofind , at the summary judgment stage, that any corporate offi cer with the appropriate authority actually authorized the 1983 SPD amendment, despite CW's argument to the contrar y. CW renews that same contention before us, which the plaintiffs again oppose.

In considering the issue of a valid amendment proce dure under ERISA section 402(b)(3) -- amendment by "the Company" -- the Supreme Court held that principles of corporate law provide a ready-made set of rules for identifying the natural persons authorized to make decisions on behalf of a company. Curtiss-Wright, 5 14 U.S. at 80. Thus, the Court's mandate requires us to det ermine whether there was compliance with Curtiss-Wright's valid amendment procedure, which necessarily entails a fa ct-

9intensive inquiry into "what persons or committees within

Curtiss-Wright possessed plan amendment authority, either by express delegation or impliedly, and whether tho se persons or committees actually approved the new pla n provision contained in the revised SPD." Id. at 85 (citing 2 William M. Fletcher, Fletcher Cyclopedia of the Law of Private Corporations S 444, at 397-98 (perm. rev. e d. 1992)). Indeed, as the Supreme Court emphasized, on ly natural persons make decisions and the issue now be fore us is whether, on the record, those persons who ame nded the SPD in 1983 acted with corporate authority so t hat the Plan's amendment is properly characterized as a val id corporate act or, to use the parlance of ERISA sect ion 402(b)(3), was an amendment by "the Company."

A. Who Possessed the Authority to Amend the Plan?

1. The Board's Authority to Amend the Plan and Delegate Plan Matters

Because it is tacitly conceded that the board posse ssed the authority to amend the Plan, see Del. Code Ann. S 141(a), but never actually undertook such an amen dment, we pause to address the plaintiffs' argument that o nly the board of directors had authority to adopt amendment s to

the Plan in this case. The answer must be that unle ss otherwise provided by the certificate of corporatio n and subject to the limitations set forth in 8 Del. Code Ann. S 141(c), the board may freely delegate the authori ty to manage the business and affairs of the corporation. See 1 R. Franklin Balotti & Jesse A. Finkelstein, The Del aware Law of Corporations & Business Organizations S 4.17 , at 32 (collecting cases). Indeed, the ability to delegate is the essence of corporate management, as the law does no t expect the board to fully immerse itself in the dai ly complexities of corporate operation. See Grimes v. Donald, 673 A.2d 1207, 1215 (Del. 1996) (The board "retains the ultimate freedom to direct the strategy and affairs of the Company."); Cahall v. Lofland, 114 A. 224, 229 (Del . Ch. 1921) ("The duties of directors are administrative, and relate to supervision, direction and control, the d etails of the business being delegated to inferior officers, agents and

10employees. This is what is meant by management."); 1

Balotti & Finkelstein, supra, S 4.17. The record do es not suggest that the board's delegation of the administ ration or

amendment of the Plan would violate CW's certificat e of corporation or the specific prohibitions embodied i n section 141(c) of the Delaware code.

Nor do we agree with the plaintiffs' assertion that the delegation of Plan matters, including its amendment , to a corporate officer or agent would necessarily consti tute an abdication of managerial duties. The business decis ion of appointing a corporate officer to manage retirement health benefits for the corporation does not have the effe ct of "removing from directors in a very substantial way their duty to use their own best judgment on management matters." Abercrombie v. Davies, 123 A.2d 893, 899 (Del. Ch. 1956), rev'd on other grounds, 130 A.2d 338 (De l. Super. Ct. 1957). Moreover, nothing in the record demonstrates that a delegation of authority in this context would "formally preclude the ... board from exercis ing its statutory powers and fulfilling its fiduciary duty. " Grimes, 673 A.2d at 1214 (citation omitted). The board's 19 76 resolution with respect to the Plan's self-insuranc e illustrates this conclusion. Therefore, contrary to the plaintiffs' contentions, the board could freely del egate its authority to administer and amend CW's retirement benefits plan appropriately.

2. Mr. Berner's Authority to Amend the Plan Pursuan t to Board Delegation

Beyond the board of directors, the corporation may validly act through its directors and officers as a uthorized corporate agents. In general, an officer's powers s tem from the organic law of the corporation, or a board dele gation of authority which may be express or implied. 2 Willia m M. Fletcher, Fletcher Cyclopedia of the Law of Private Corporations S 434, at 339 (perm. rev. ed. 1992). E xpress authority to act on behalf of the corporation is us ually manifested through a statute, the certificate of co rporation, the by-laws, or a board or shareholder action. Id. S 434, at 339-40; Petition of Mulco Prods., 123 A.2d 95, 103 (Del. Super. Ct.), aff'd sub nom., Mulco Prods., Inc. v. Black, 127

11A.2d 851 (1956). Implied actual authority, which is express

authority circumstantially proved, may be found thr ough

evidence as to the manner in which the business has operated in the past, the facts attending the trans action in question, circumstantial evidence of board declarat ions surrounding the given transaction, or the habitual usage or course of dealing common to the company. 2 Fletcher

, supra, S 437.2, at 353; Mulco, 123 A.2d at 103. Sim ilarly, authority will be implied when it is reasonably nec essary and proper to effectuate the purpose of the office or the main authority conferred.2 Fletcher, supra, S 434, at 340.

Pursuant to these principles of corporate law, the undisputed facts show that Mr. Berner, the CEO and President of CW possessed the express authority to amend the Plan without the board's prior approval. The co rporate by-laws, adopted by the board, affirmatively bestow on the CEO the authority to take "general and active contr ol of [the corporation's] business and affairs," which sp ecifically includes the power to fix employee compensation. Ap p. at

441-43. Delaware courts have held that attendant to this unqualified grant of authority, the president as ge neral manager commands the power to "do anything the corporation could do in the general scope and opera tion of its business." Phoenix Finance Corp. v. Iowa-Wiscon sin Bridge Co., 16 A.2d 789, 793 (Del. Super. Ct. 1940) ; see also Mulco, 123 A.2d at 104. It certainly follows t hat the broad power to fix employee compensation subsumes t he authority to amend a specific type of compensation- - retirement health benefits governed by ERISA -- and logic would consequently dictate that the board expressly approved the CEO's authority to create, administer, or amend CW's retirement plan. Indeed, Delaware courts have been receptive to this line of reasoning, and have generally upheld a general manager's action on behalf of the corporation unless it is "unusual" or "extraordinar y." See 1 Ernest L. Folk, Folk on the Delaware General Corpor ation Law S142.6, at 6-7 (3d ed. 1997).

We once again pause to address plaintiffs' argument s against finding express authority vested in Mr. Ber ner pursuant to an express delegation by the board. Pla intiffs assert that although Mr. Berner expressly commands the

12authority to "fix employee compensation," the termi nation

of medical benefits would be an "extraordinary" exe rcise of authority that would require explicit board approva l. Plaintiffs do not point to any record support for t his contention other than the allegation that it would be "outside the ordinary course of business" for the C EO to undertake such an action. This argument is unavaili ng particularly in view of the board mandate allowing the CEO to fix employee compensation and the complete absen ce of any suggestion that the board intended Plan amendme nts to be subject to its prior approval. In fact, the b oard adopted the by-laws well before the Plan's creation and acted in a manner perfectly consistent with the ass umption

that the Plan was valid. If the board had considere d the Plan's creation as a reasonable act without its pri or authorization, then surely the board would not have

considered the Plan's amendment to be so "extraordi nary" that it was outside Mr. Berner's authority.

3. Mr. Berner's Delegation Under His Authority

As the record demonstrates, however, Mr. Berner did not amend the Plan, which leaves us with the necessity to decide whether another corporate officer or agent p ossessed the requisite amendatory authority. It is, of cours e, firmly established that an officer broadly charged with ma naging the affairs of a corporation impliedly possesses th e authority to appoint subordinate agents under his c ontrol to act on behalf of the corporation. See 2 Fletcher , supra, S 503, at 598. Delaware is no stranger to this rule . See 8 Del. Code S 122(5); 1 Balotti & Finkelstein, supra, S 4.17. Nevertheless, the power of delegation is not withou t limits, and the language of case law generally focuses on w hether the delegated authority involves "ministerial" func tions or acts that require "the exercise of discretion" by t he subagent. See 2 Fletcher, supra, S 503, at 598. As the very term "management" connotes, however, corporate offi cers and subordinate agents must be afforded some level of discretion when faced with the demands of supervisi ng a modern corporation. Thus, given the "necessities of the case and usage," corporate law recognizes that many "discretionary" acts will be carried out by officer s and other

13subordinates. 1 Balotti & Finkelstein, supra, S 4.1 7, at 35

(citing 2 Fletcher, supra, S 495, at 580); see also Kelly v. Bell, 254 A.2d 62, 72 (Del. Ch. 1969), aff'd, 266 A .2d 878 (Del. 1970). The critical factors are often the com plexity of the corporation, see Kelly, 254 A.2d at 72, the int ent of the board, and the corporation's implied course of cond uct. See 1 Balotti & Finkelstein, supra, S 4.17, at 35 (citi ng 2 William F. Fletcher, supra, SS 494-95).

These principles of corporate law, when applied to the record before us, lead us to conclude that Mr. Bern er properly delegated to Mr. Ehinger, one of CW's Exec utive Vice Presidents, the authority to amend the Plan. I t is not disputed that CW is a large, complex corporation wi th operations well beyond its facilities in New Jersey . While plaintiffs assert that the power to amend the Plan was outside Mr. Berner's authority to delegate because it was not "routine," we do not find this to be the case. To be sure, the Plan's amendment required some level of discret ion on Mr. Ehinger's part, but this would not defeat a pro per delegation by Mr. Berner in view of his authority. The bylaws specifically vest Mr. Ehinger, as Executive Vi ce President, with the authority to "perform all such duties and exercise all such powers as may be provided by ... the President." App. at 443. Certainly, such a duty wou ld include significant changes to the Plan's retiremen t health

benefits and there is no indication on the record t hat the board limited the Vice President's authority to "ro utine" matters that would not include significant Plan amendments. Moreover, the prior course of dealings between Mr. Berner, Mr. Ehinger, and the board -- n one of which are disputed by the plaintiffs -- all show th at Mr. Berner and the board were well aware that Mr. Ehing er established and administered the current Plan. In l ight of these undisputed facts, we conclude that the validi ty of the Plan's amendment did not depend upon the prior expr ess approval of Mr. Berner in his capacity as CW's Pres ident

and CEO.

The district court refused to find such a delegatio n of authority to Mr. Ehinger in fact at the summary jud gment stage. It did so because, in its view, "issues of c redibility" remain as to Mr. Ehinger's deposition testimony tha t he

14had received an oral authorization by Mr. Berner to manage

employee benefits. We therefore face the inescapabl e issue of deciding whether there is a "genuine issue of ma terial fact" surrounding the delegation of amendatory auth ority from Mr. Berner to Mr. Ehinger. Fed. R. Civ. P. 56( c). A fact is "material" if, under the substantive law of the case, it is outcome determinative. See Anderson v. Liberty Lobb y, Inc., 477 U.S. 242, 247-48 (1986). A "genuine" issue is o ne where a reasonable jury, based on the evidence pres ented, could hold in the nonmovant's favor with regard to that

issue. Id. This formulation reflects the same stand ard as is applied in a directed verdict motion under Fed. R. Civ. P. 50(a), where the court inquires whether reasonable minds may differ as to the verdict. Id. at 250. Once the moving party has demonstrated that there is no genuine iss ue of material fact, the nonmoving party must come forwar d with "specific facts showing that there is a genuine iss ue for trial." Fed. R. Civ. P. 56(e); Matsushita Elec. Ind us. Co. v. Zenith Radio Co., 475 U.S. 574, 586 (1986). Where t he

record taken as a whole could not lead a rational t rier of fact to find for the nonmoving party, there is no"g enuine issue for trial." Id. (citation omitted).

Notwithstanding this well settled law, federal cour ts have found difficulty in applying the summary judgment standard when faced with certain questions of credi bility. See 10 Charles Alan Wright & Arthur R. Miller, Fede ral Practice and Procedure S 2726, at 115 (2d ed. 1983) . It is by now axiomatic that "a nonmoving party ... cannot defeat summary judgment simply by asserting that a jury mi ght disbelieve an opponent's affidavit to that effect." Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989) (citing Liberty Lobby, 477 U.S. at 256-57); see als o Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1165 (3d Cir. 1990). On the other hand, certain scenarios may ari se where a material fact cannot be resolved without we ighing the credibility of a particular witness or individu al -- such as when the defendant's liability turns on an indiv idual's state of mind and the plaintiff has presented circu mstantial evidence probative of intent. Williams, 901 F.2d at 460. In such a case, we have said that summary judgment is inappropriate because there is a sufficient quantum of

evidence on either side for reasonable minds to dif fer and

15therefore the issue is "genuine." Id. at 461; see a lso Hozier,

908 F.2d at 1165 ("[N]othing in Rule 56 prevents [t he nonmoving party] from creating a genuine issue of m aterial fact by pointing to sufficiently powerful counterva iling circumstantial evidence."). Indeed, the Advisory Co mmittee

notes to the federal rules mirror this result. See Advisory Committee Notes, 1963 Amendment to Fed. R. Civ. P. 56(e). But, as the Advisory Committee notes also indicate, it is important to emphasize that issues of credibility o nly defeat summary judgment "[w]here an issue of material fact

cannot be resolved without observation of the demea nor of witnesses in order to evaluate their credibility." Id. (emphasis added). By logical implication from this rule, if a moving party has demonstrated the absence of a genu ine issue of material fact -- meaning that no reasonabl e jury could find in the nonmoving party's favor based on the record as a whole -- concerns regarding the credibi lity of witnesses cannot defeat summary judgment. Instead, the nonmoving party must "present affirmative evidence in order to defeat a properly supported motion for sum mary judgment." Liberty Lobby, 477 U.S. at 256-57 (citat ion omitted). Thus, summary judgment is particularly appropriate where, notwithstanding issues of credib ility, the nonmoving party has presented no evidence or infere nces that would allow a reasonable mind to rule in its f avor. In this situation, it may be said that the record as a whole points in one direction and the dispute is not "gen uine." Matsushita, 475 U.S. at 586.

The record here is replete with evidence showing th at Mr. Berner had in fact orally delegated the authority t o amend and administer the Plan to Mr. Ehinger, even apart from Mr. Ehinger's own testimony to that effect. Mr. Spr igle, CW's other Executive Vice President, testified unde r oath that based on his experience in the corporation Mr. Berner had divided responsibilities among Vice Presidents and that Mr. Ehinger was delegated matters relating to human resources and plan administration. App. at 249. Sim ilarly, Mr. Carr, the corporation's labor counsel, submitte d an affidavit showing that he always understood Mr. Ehi nger to command operating authority with respect to Plan amendments, based on a delegation from Mr. Berner. App. at 420. Moreover, it is undisputed that both the hu man

16resources department and welfare benefits group rep orted

directly to Mr. Ehinger and not to Mr. Berner. App. at 109- 10. It is also not disputed that Mr. Ehinger had pr eviously amended the Plan and reported to Mr. Berner about P lan administration. App. at 207.

Against all these affidavits, deposition testimony, and undisputed facts, the plaintiffs, who would bear th e burden of proof on this issue at trial,5 have not set fort h even the slightest quantum of evidence or reasonable factual inference to support a jury finding that Mr. Ehinge r had no authority to amend Plan benefits. Nor does the reco rd reflect any reasonable inference, whether through circumstantial evidence or otherwise, that Mr. Ehin ger did not act under Mr. Berner's oral delegation of autho rity. While the plaintiffs argue that the absence of a wr itten delegation creates an inference against authority, corporate law clearly allows for oral delegations of authorit y, see 2 Fletcher, supra, S 444, at 398 (citing Hessler, Inc . v. Farrell, 226 A.2d 708 (Del. 1967)), and the plaintiffs have offered no reason why this lack of writing would seem suspicio us. As a result, we conclude that plaintiffs did not raise a "genuine" issue as to the delegation of authority, even on an implied basis, to Mr. Ehinger regarding Plan

amendments.6 The district court's conclusion that t he

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5. As CW correctly points out, because plaintiffs s eek affirmative relief

in this action, they must establish the invalidity of the amendment in 1983 under both ERISA law, see Hozier, 908 F.2d at 1163, and under general corporate law. See 2 Fletcher, supra, S 437.3.

6. We recognize that in certain situations discover y for a nonmoving party may be particularly difficult where the party seeking summary judgment has exclusive possession of all the materi al facts, thereby diminishing the nonmovant's ability to show a genui ne issue. See, e.g., 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure S 2740, at 536-37 (2d ed. 1983); 6 James W. Moore, Moore's Federal Practice S 56.24, at 796 (2d ed. 1996). The plaintiffs have never contended, however, that they faced such a problem during any discovery phase of litigation. Cf. Fed. R. Civ. P. 56(f) (allowing a

district court to, among other things, "refuse application f or judgment" if it appears "from the affidavits of a party opposing th e motion that the party cannot for reasons stated present by affidavi t facts essential to justify the party's opposition"). Indeed, we note t hat the plaintiffs

17evidence of delegated authority to Mr. Ehinger by M r.

Berner consisted solely of Mr. Ehinger's testimony is too narrow a view, based not only on the evidence in th e record, but also on the realities of modern corpora tions and applicable corporate law.

B. Did the Persons with the Necessary Authority Actually Approve the Amended Plan?

Having identified the persons with the necessary authority to amend CW's retirement benefits Plan, w e must decide whether a person so situated actually exerci sed that authority in 1983. The record, as described above, shows that the analysis must focus on the authority deleg ated to Mr. Ehinger in his capacity as the corporation's Ex ecutive

Vice President. We now turn to that record.

It is not disputed that Mr. DuBois, the Corporate Manager for Benefits, and Mr. Carr, CW's labor coun sel, initially drafted the 1983 SPD amendment at issue providing for the termination of health benefits fo r a closed plant's retirees. As the parties agree, it is quite clear that if Mr. DuBois and Mr. Carr acted without the specific authorization of Mr. Ehinger, then the SPD amendmen t, without more, cannot be considered a valid corporat e act on any delegation theory. The question then is prim arily factual in nature -- did Mr. Ehinger actually autho rize the amendment to the Plan in 1983 terminating benefits? Once again, the district court denied summary judgment t o CW on this question because, in its view, "the only ev idence in the record on this issue is the deposition testimon y of Ehinger [and] questions of credibility remain."

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exercised their right to cross-examine most materia l witnesses during their depositions. Consequently, the defendant was entitled to summary judgment in its favor notwithstanding the "desire.. . for an opportunity to cross examine the [defendant's] witnesses in the hope of turning up something ..., at least in the absence of a showing , such as is contemplated by Rule 56(f), that all of the facts w ere necessarily within the exclusive knowledge of the plaintiffs and not a ccessible to the defendants." United States ex rel. Kolton v. Halper n, 260 F.2d 590, 591 (3d Cir. 1958) (Maris, J.).

18We reiterate at the outset that the burden of showi ng the

unauthorized nature of the SPD amendment falls squa rely on the plaintiffs. See Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1163 (3d Cir. 1990). In support of its m otion for summary judgment, CW points to Mr. Ehinger's testim ony that he approved the SPD termination language durin g its drafting. App. at 207-208. In addition to the depos ition testimony of Mr. Ehinger, Mr. Carr also submitted a n affidavit that Mr. Ehinger approved the decision to terminate benefits. App. at 421. Further, it is not disputed

that the decision to amend the Plan was the result of similar issues raised by litigation that occurred o ver the earlier closing of CW's Marquette facility in Cleve land. App. 35. Indeed, plaintiffs do not deny that Mr. Ehinger and the benefits group played a significant role in that li tigation and anticipated a change in the present Plan descriptio n to avoid future litigation. App. at 115.

Against this evidence, plaintiffs point to only two relevant instances in the record which they claim would allo w a reasonable jury to conclude in their favor and ther efore render the issue genuine. First, plaintiffs again e mphasize

that there is no documentation -- whether a memoran dum, resolution, or otherwise -- reflecting Mr. Ehinger' s actual exercise of authority. As we have stated before, ho wever, the law recognizes an oral delegation or exercise o f authority, which may be proved by parol evidence. S ee, e.g., 2 Fletcher, supra, S 444, at 398 (citing Hessler, I nc. v. Farrell, 226 A.2d 708 (Del. 1967)); Restatement (Se cond) of Agency SS 26, 33 (1958). Thus, while we agree that CW's record keeping is not a paragon of desirable corpor ate practice, the plaintiffs have offered no reason why the absence of documentation, when the law requires non e, should be subject to suspicion or provide a basis f or a reasonable inference in their favor, particularly i n view of the corporation's established practices to the cont rary. Cf. Ansin v. River Oaks Furniture, Inc., 105 F.3d 745, 755 (1st Cir. 1997) (where a transaction would ordinarily le ave a "heavy paper trial," an inference of fact arises fr om a "complete absence of contemporaneous documentation" ); Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1 165-66 (3d Cir. 1990) (where a memorandum written in contemplation of a merger does not include a new ER ISA

19benefits schedule, a factual inference is created b ecause the

author had personal knowledge of the transaction an d the

omission seemed "odd" from the circumstances of the case). But on the undisputed evidence of CW's corporate pr actice,

we conclude that the absence of record documentatio n reflecting the nature and exercise of Mr. Ehinger's authority is not sufficiently probative that it provides, wit hout more,

a basis for a reasonable inference in favor of the plaintiffs.

Plaintiffs also point to Mr. Ehinger's deposition t estimony

in 1986 where he stated:

It had been the policy of the Curtiss-Wrigh t Corporation, which was put in practice in cl osing the East Paterson facility in 1971 ... [and] the Marquette facility, that post-retirement insurance wou ld terminate at the closing of the facility.

I expected my personnel to reflect such pol icy in such documents. I did not myself read the in dividual policies or question them where does it say what in it.

App. at 136 (emphasis added by plaintiffs). Plainti ffs argue that Mr. Ehinger's admission of not having read the individual benefits policies supports their content ion that he did not specifically authorize the Plan amendmen t in 1983. We believe plaintiffs' conclusion is a non se quitur. Simply because Mr. Ehinger did not read the individ ual retirement health benefits policies does not mean t hat he did not authorize the change in the language of the amendment. In fact, Mr. Ehinger specifically states that he "expected [his] personnel to reflect such[a] policy in [the] documents," which at least raises an inference that he authorized any changes in the Plan that would confo rm to his expectations. Id. We therefore do notfind this deposition testimony to create a genuine issue of m aterial fact in the plaintiffs' favor.

Beyond these two arguments, which lack merit, plain tiffs do not identify any other instance in the record de veloped on remand that would render the question of Mr. Ehi nger's exercise of authority a "genuine" dispute. This is not a case

where a material issue of fact "cannot be resolved without

observation of the demeanor of witnesses in order t o evaluate their credibility." Advisory Committee Not es to Fed.

20R. Civ. P. 56(e). The record points in but one dire ction and,

as a result, summary judgment for CW was proper.

III. Ratification

In view of our conclusions, we need not address the

district court's reliance on the doctrine of ratifi cation and its application to this case.'

IV. Conclusion

For the aforementioned reasons, the judgment of the district court in Curtiss-Wright's favor will be af firmed.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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