2002 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-5-2002

Chichelo v. Hoffmann-La Roche

Precedential or Non-Precedential:

Docket 1-2055

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Recommended Citation

"Chichelo v. Hoffmann-La Roche" (2002). 2002 Decisions. Paper 100.

http://digitalcommons.law.villanova.edu/thirdcircuit_2002/100
 

NOT PRECEDENTIAL 

 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT 

 

 No. 01-2055 

 

 JOSEPH CHICHELO, 

 Appellant 

 v. 

 HOFFMANN-LA ROCHE INC., 

 a member of the Roche Group 

 

 

 On Appeal from the United States District Court 

 for the District of New Jersey 

 (D.C. Civil No. 97-cv-05344) 

 District Judge: Hon. William G. Bassler 

 

 Submitted Under Third Circuit LAR 34.1(a) 

 February 4, 2002 

 Before: SLOVITER, AMBRO, Circuit Judges, and POLLAK, District 

Judge 

 

 (Filed February 5, 2002) 

 

 MEMORANDUM OPINION OF THE COURT 

SLOVITER, Circuit Judge. 

 Appellant Joseph Chichelo, who had been employed by Hoffman-La Roche 

Inc. 

("Roche") for twenty-seven years, advised his supervisor in writing on May 

23, 1994 that 

he intended to voluntarily retire on June 10, 1994. That was his last day 

of work, and his 

retirement became effective as of July 1, 1994. Later that year, Roche 

announced a 

voluntary early retirement program (a "VERP"). Chichelo sued Roche under 

the 

Employee Retirement Income Security Act of 1974 ("ERISA"), Pub. L. No. 93-

406, 88 
Stat. 829 (codified as amended in 29 U.S.C. 1001-1461 and in scattered 

sections of 26 

U.S.C. (2001)), claiming Roche violated its fiduciary duty as an ERISA 

plan 

administrator by failing to disclose the VERP to him in response to his 

specific inquiries. 

Determining that Roche was not "seriously considering" a VERP when 

Chichelo inquired 

about that possibility, the District Court entered summary judgment for 

Roche. 

 On appeal, Chichelo argues the District Court's application and 

interpretation of 

"serious consideration" were erroneous as a matter of law, and that 

genuine issues of 

material fact were still in dispute on that issue. 

 This court has jurisdiction pursuant to 28 U.S.C.  1291. We will 

affirm. 

 I. 

 Because we write solely for the parties, we need not set forth a 

detailed recitation 

of the background for this appeal and will limit our discussion to 

resolution of the issues 

presented. 

 This court gives plenary review to a district court's grant of 

summary judgment, 

reviewing the facts in the light most favorable to the party against whom 

judgment was 

entered. Beers-Capital v. Whetzel, 256 F.3d 120, 130 n.6 (3d Cir. 2001). 

"[S]ummary 

judgment will not lie if the dispute about a material fact is 'genuine,' 

that is, if the 

evidence is such that a reasonable jury could return a verdict for the 

nonmoving party." 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

 Under ERISA, employers who administer their employees' retirement 

plans breach 

their fiduciary duty if they materially mislead employees who inquire 

regarding possible 

changes in those plans. Fischer v. Phila. Elec. Co., 96 F.3d 1533, 1538 

(3d Cir. 1996) 

("Fischer II"). An employer makes a material misrepresentation when it 

responds to 

employee inquiries by representing it is not considering a change to its 

pension plan, if it 

is in fact giving "serious consideration" to a change. Id. 

 Chichelo made numerous inquiries of Roche executives asking whether 

Roche 

planned to implement a VERP. All of the executives responded that they 

knew of no 

such plans. Chichelo's last such inquiry was made on May 10, 1994. 

 The District Court construed a statement in Chichelo's May 23, 1994 

resignation 

letter that "[i]f Roche should prefer to elect that I retire early, 

perhaps there could be some 
compensatory program," as a last inquiry whether a VERP was being 

considered. App. at 

16. Roche argues that "in his resignation letter Chichelo did not inquire 

about whether 

the company might offer a VERP. What he did do was to ask for an 

individualized 

'compensatory package.'" Br. of Appellee at 33 n.20. Although on a 

motion for 

summary judgment the District Court was obligated to consider the evidence 

in the light 

most favorable to the nonmovant, see, e.g., Meyer v. Riegel Prods. Corp., 

720 F.2d 303, 

307 n.2 (3d Cir. 1983), we believe the District Court adopted an 

unnecessarily generous 

view of what constitutes an employee inquiry. The "serious consideration" 

standard is 

designed to protect an employee by ensuring she has "material information 

on which 

[she] can rely in making employment decisions." Fischer II, 96 F.3d at 

1539. By sending 

a resignation letter, Chichelo had already made his employment decision. 

Chichelo's last 

explicit inquiry was May 10, but even if it was May 23, as the District 

Court found, the 

result would not be different. 

 II. 

 The appropriateness of summary judgment for Roche turns on whether 

there is a 

genuine issue of material fact whether Roche gave "serious consideration" 

to 

implementing a VERP prior to May 23. An employer gives "serious 

consideration" to 

changing its plan "when (1) a specific proposal (2) is being discussed for 

purposes of 

implementation (3) by senior management with the authority to implement 

the change." 

Fischer II, 96 F.3d at 1539. 

 A specific proposal follows the preliminary steps of "gathering 

information, 

developing strategies, and analyzing options." Id. at 1539-40. At best, 

Roche may have 

been involved in these preliminary steps sometime after May 10. On May 1, 

1994, Roche 

had signed a merger agreement with Syntex, another drug manufacturer. In 

preparing to 

consummate that agreement, Roche had begun to plan for the integration of 

the two 

companies. Roche executives contemplated that integration would entail 

dislocating 

some employees. 

 The earliest evidence Chichelo provided is that Patrick Zenner, 

Roche's President 

and CEO, appointed a task force in "late spring" to study the integration 

of the Roche and 
Syntex workforces. No evidence supports Chichelo's contention that one of 

this task 

force's mandates was to implement a VERP. It is only sheer speculation by 

Chichelo, 

and as such it is insufficient to create a genuine issue of fact whether a 

specific proposal 

existed. 

 Chichelo points to a number of documents as circumstantial evidence 

that Roche 

seriously considered a VERP prior to his last inquiry. First, Chichelo 

points to two 

memos from Zenner. The first memo, dated May 13, 1994, contained a 

"breakdown of 

the number of Syntex employees by business and function units." App. at 

377. The 

second memo, dated May 26, 1994, recounts advice from competitors' CEOs 

regarding 

post-merger management, such as that one should "make decisions as quickly 

as you 

can." App. at 379. Neither of these memos create a genuine issue whether 

a specific 

proposal for a VERP existed at Roche prior to May 23. 

 The other evidence is equally unavailing. On June 9, 1994, the 

consultants Roche 

had retained the preceding year forwarded a brief summary of recent early 

retirement 

windows for other pharmaceutical companies to a manager in Roche's trust 

funds 

department. In mid-June, Roche sent a survey regarding VERPs to a number 

of other 

pharmaceutical companies. On July 20, Roche retained new consultants to 

assist in its 

integration with Syntex. On July 21, Roche's General Counsel, "[i]n 

response to 

[Zenner's] request," provided Zenner with a memorandum outlining legal 

risks 

surrounding employment issues associated with the Roche/Syntex 

integration. That 

memo focused primarily on VERPs. App. at 382. 

 All of this suggests there was growing momentum at Roche in favor of 

implementing a VERP. None of this evidence, however, creates a genuine 

issue of fact 

that a specific plan to implement a VERP existed at Roche prior to May 23, 

1994. 

 Nor does the evidence create a material issue of fact that a VERP was 

being 

considered by decision makers at Roche for purposes of implementation 

prior to May 23. 

The discussion-for-implementation factor "recognizes that a corporate 

executive can 

order an analysis of benefits alternatives or commission a comparative 

study without 

seriously considering implementing a change in benefits. Preliminary 

stages may also 
require interaction among upper level management, company personnel, and 

outside 

consultants." Fischer II, 96 F.3d at 1540. At best, the evidence 

discussed above suggests 

that sometime in June Roche entered this preliminary stage of evaluating a 

VERP. 

 We can understand the disappointment and frustration of a twentyseven year 

employee who could have a much more favorable pension had he delayed his 

retirement 

by several months. But Chichelo was aware that there was talk about a 

possible merger 

and could have decided to delay his retirement while the internal changes 

that merger 

caused had been fully worked out. Under the law enunciated by this court, 

the employee 

cannot recover under ERISA for failure of the employer-plan administrator 

to give notice 

of impending changes unless the changes were under "serious 

consideration." Chichelo 

has not produced evidence that the early retirement program was under 

serious 

consideration at the time of his inquiries. 

 III. 

 Because no evidence supports a determination that a specific proposal 

for the 

purposes of implementation existed prior to the time Chichelo made his 

final inquiry, 

Roche cannot have "seriously considered" a VERP at that time. 

Accordingly, Chichelo 

has presented no genuine issue of material fact that Roche made material 

misrepresentations to him in violation of its fiduciary duty under ERISA. 

 For the reasons set forth, we will affirm the order of the District 

Court. 

__________________________ 

TO THE CLERK: 

 Please 

file the foregoing opinion. 

 

/s/ Dolores K. Sloviter 

 

Circuit Judge