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Timestamp: 2019-04-23 15:04:57+00:00

Document:
FindACase | Carlson v. Northrop Grumman Corp.
Carlson v. Northrop Grumman Corp.
NORTHROP GRUMMAN CORPORATION and the NORTHROP GRUMMAN SEVERANCE PLAN, Defendants.
Andrea R. Wood United States District Judge.
Plaintiffs Alan Carlson and Peter DeLuca have sued Defendants Northrop Grumman Corporation and the Northrop Grumman Severance Plan, challenging Defendants' failure to pay cash severance benefits to which Plaintiffs allege they were entitled pursuant to Defendants' ERISA-governed severance plan (“ERISA Plan”). Now before this Court is Defendants' motion for summary judgment on the standard of review for the denial of Plaintiffs' claims for benefits under the ERISA Plan. (Dkt. No. 167.) For the reasons discussed below, the Court concludes that the deferential, arbitrary and capricious standard of review applies.
The circumstances surrounding Plaintiffs' layoffs are described in the Court's prior opinions for this case and thus will not be repeated here. See Carlson v. Northrop Grumman Corporation, et al., 196 F.Supp.3d 830, 833-34 (N.D. Ill. 2016); Carlson v. Northrop Grumman Corp., No. 13 C 2635, 2014 WL 5334038, at *1 (N.D. Ill. Oct. 20, 2014); Carlson v. Northrop Grumman Corp., No. 13 C 2635, 2014 WL 1299000, at *1 (N.D. Ill. Mar. 31, 2014). The crux of the dispute between the parties at this stage of the case is whether the ERISA Plan documents confer discretionary authority on the Plan Administrator and the Corporate Severance Plan Review Committee (“Committee') so as to warrant an arbitrary and capricious standard of review here. In particular, the interpretation of the Northrop Grumman Service Plan adopted on December 15, 2011 (“Wrap Document”) (Dkt. No. 171) and the Northrop Grumman Service Plan adopted on January 27, 2012 (“Component Document”) (Dkt. Nos. 166-5, 177-2) is at issue.
[A]ll of the terms and provisions of each of the Component Plans, as the same may be modified from time to time as provided for each of the Component Plans, are incorporated herein by reference and shall be of the same force and effect under this document as if they were fully set forth herein.
Defendants argue that the Court should grant their motion for summary judgment and find that the Committee's interpretation of the ERISA Plan and its denial of Plaintiffs' claim are entitled to deference-in other words, that the “arbitrary and capricious” standard of review applies.
Summary judgment is appropriate when the record, viewed in the light most favorable to the non-moving party, reveals that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Smith v. Hope School, 560 F.3d 694, 699 (7th Cir. 2009). A genuine issue of material fact exists if a reasonable jury could find in favor of the nonmoving party. Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000). In deciding a summary judgment motion, the court must consider the record as a whole, in the light most favorable to the non-moving party, and draw all reasonable inferences in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Bay v. Cassens Transp. Co., 212 F.3d 969, 972 (7th Cir. 2000).
Benefit determinations under ERISA are reviewed by federal courts de novo “unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Sperandeo v. Lorillard Tobacco Co., 460 F.3d 866, 870 (7th Cir. 2006) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). If such discretionary authority is given, an arbitrary and capricious standard of review applies. Id. The party asserting that the arbitrary and capricious standard applies bears the burden of establishing that the plan confers discretionary authority. Id. The default standard of review is de novo and in order to alter this default standard, the stipulation for deferential review must be clear. Id.
The interpretation of an ERISA-governed plan is controlled by federal common law, which draws on general principles of contract interpretation, at least to the extent those principles are consistent with ERISA. Schultz v. Aviall, Inc. Long Term Disability Plan, 670 F.3d 834, 838 (7th Cir. 2012). Plan language is given its plain and ordinary meaning. Id. Courts must read the plan as a whole, considering separate provisions in light of one another and in the context of the entire agreement. Id. All language of a plan should be given effect without rendering any term superfluous. Id.

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