Opinion ID: 2795463
Heading Depth: 2
Heading Rank: 3

Heading: Claimed procedural errors

Text: We next turn to Niebauer's contention that the compensation committee's decision was procedurally flawed. He raises two arguments to buttress this claim: first, that the decision relied on an incomplete factual record, and second, that the committee's transmission of its decision to Niebauer failed to comply with ERISA's notice requirements, 29 U.S.C. § 1133. We address each in turn.
incomplete factual record Niebauer faults the committee for relying on an inaccurate and incomplete record in rendering its decision. He points to two categories of errors that, in his view, undermine the legitimacy of the committee's final decision: first, he argues that the committee inappropriately relied on the one-sided timeline of events prepared by Hackett, the general counsel. He goes on to contend that Hackett withheld certain documents from the committee that supported Niebauer's position, such as various emails and personnel files. -20- We do not agree that there was anything improper in the content or scope of the materials that the committee considered. As an initial matter, it was entirely appropriate for the committee to rely on materials submitted by Crane; indeed, the plan contemplates that the committee will do just that, by making eligibility determinations on the basis of information supplied to it by the Employer. And while a plan administrator may not rely on evidence that it knows or has reason to know is misleading, Buffonge v. Prudential Ins. Co. of Am., 426 F.3d 20, 30 (1st Cir. 2005), that is not what happened here. The timeline, far from being undisputedly false, as Niebauer asserts, was a reasonable synthesis of a convoluted series of events, which hewed to the available evidence. For example, although Niebauer claims that the timeline falsely represented that he agreed to a February 1, 2012 retirement date, that representation is a fair reading of a December 8, 2011 email to Rick Kendall on the topic of retirement calculations in which Niebauer wrote, [I] think February 1st will work. We also resist Niebauer's imputation of bad faith to Hackett in his management of the investigation. Niebauer argues that Hackett kept certain records from the committee because they supported Niebauer's position. In particular, Niebauer points to emails between him and Kendall about retirement calculations; emails between him and coworker Chris Duquette in which Niebauer -21- rebuffed congratulations on his retirement, stating that he had not actually retired; as well as a document in his personnel file which listed the reason for Niebauer's departure as Retired — Involuntary.12 Hackett testified at his deposition that, in assembling materials for the committee to review, he look[ed] for any e-mails that were relevant on the topic [of Niebauer's departure] in either direction, mindful of the committee's fiduciary duties to get all the facts and to look at this thing in good faith. Hackett stated that he turned over to the committee all emails, sent during the relevant time period, that he deemed relevant to Niebauer's claim. Niebauer does not offer any reason to discredit this testimony. Niebauer argues that, as a result of these supposed inaccuracies and omissions, the committee was under the mistaken impression that he had at least at one point decided to retire, before ultimately changing his mind. But deposition testimony makes clear that the committee members understood that Niebauer's position was that he had not announced an intent to retire during the initial December 5 call with Stephen DeFalco. In other words, 12 An affidavit from the Crane benefits specialist who prepared the form, Gail Rondeau, demonstrates that the designation Retired — Involuntary was not intended to be an official pronouncement on the reason for Niebauer's departure from the company. Rondeau averred that, in filling out the electronic form, she simply used the reason that Niebauer had provided, and that she understood that the designation in the computer program was irrelevant for any purpose besides the Human Resources Department's administrative termination of Niebauer's enrollment in various benefits programs. -22- they understood that Hackett's timeline did not align with Niebauer's stance. Certainly, if they were not aware of Niebauer's position when the issue was considered at the first meeting, they were by the time they decided his appeal, which offered a pointby-point refutation of the timeline, Niebauer, 44 F. Supp. 3d at 158, and also provided copies of the allegedly withheld Kendall emails. It is this final decision that carries weight. Terry v. Bayer Corp., 145 F.3d 28, 35 (1st Cir. 1998). Although Niebauer now argues that the appeal was necessarily incomplete because it was prepared once he no longer had access to his Crane email account, he noted at the time that he had intentionally presented his version of events in exhaustive detail so as to give the committee full context for his arguments. He does not now explain how the handful of documents that were unavailable to him at the time he filed his appeal would have materially strengthened his presentation of his position to the committee. As the district court concluded, [t]he appeals process protected against potential bias on the part of Hackett by allowing [Niebauer] to present his unfiltered perspective to the Compensation Committee. Niebauer, 44 F. Supp. 3d at 165. Thus, even if the factual record undergirding the committee's initial decision was incomplete in some way, it was adequately supplemented by Niebauer's appeal. -23-
§ 1133 Niebauer next argues that the committee failed to comply with ERISA's notice provision, which requires plan administrators to provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant. 29 U.S.C. § 1133(1); see 29 C.F.R. § 2560.503–1 (setting forth implementing regulations). Plan beneficiaries whose claims have been denied are further entitled to a reasonable opportunity . . . for a full and fair review by the appropriate named fiduciary of the decision denying the claim. 29 U.S.C. § 1133(2). Relying on these provisions — in particular § 1133(1) — Niebauer argues that the notice of the compensation committee's final decision on his appeal was inadequate. The notice requirements of ERISA are designed to insure that when a claimant appeals a denial to the plan administrator, [he] will be able to address the determinative issues and have a fair chance to present [his] case. DiGregorio v. Hartford Comprehensive Emp. Benefit Serv. Co., 423 F.3d 6, 14 (1st Cir. 2005) (quoting Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 689 (7th Cir. 1992)). This purpose is the lodestar in determining whether there has been substantial compliance with the notice provisions; strict compliance is not required. See Terry, 145 F.3d -24- at 39. In assessing a notice-based challenge, we ask whether the beneficiary [was] supplied with a statement of reasons that, under the circumstances of the case, permitted a sufficiently clear understanding of the administrator's position to permit effective review. Id. (internal quotation marks omitted). A claimant typically must demonstrate that he or she has been prejudiced as a result of the notice's inadequacy. Bard v. Bos. Shipping Ass'n, 471 F.3d 229, 240–41 (1st Cir. 2006). Here, Niebauer complains that notice of the committee's final decision was inadequate because it failed to provide specific reasons. But although Niebauer claims that [t]he entirety of the Committee's decision on the appeal [was] contained in two sentences, the two-page memorandum at issue in fact provided a procedural and factual background, in addition to a description of the relevant provisions of the plan and the information the committee considered in arriving at its decision, before summarizing its conclusion. At the end of the memo, the committee encapsulated its decision as follows: After considering and discussing the information presented, the Committee concluded that [Niebauer] had in fact elected to resign his employment rather than continue to work in support of the Crane & Co. project to which he had been assigned and further that his resignation was not for good reason as that term is described in the Severance Plan. See Article 2, Sections 2.10 and 2.16. Therefore [Niebauer's] appeal is denied. -25- This explanation, which clearly outlines the reason for the committee's decision, satisfies ERISA's notice requirements. See Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 526 (1st Cir. 2005) (The denial letter need not detail every bit of information in the record . . . .). In any event, the notice of the committee's initial decision, with which ERISA's notice provisions are primarily concerned, was adequate to permit effective review of Niebauer's claim. As Crane observes, it is undisputed that the key issue before the committee was whether Niebauer had resigned or instead had been involuntarily terminated. Niebauer was undeniably aware that this question was dispositive of his claim; indeed, after receiving notice of the committee's initial decision,13 he submitted an appeal with seventy pages of supporting documentation, addressed to the precise issue of whether he had retired, or whether, in his parlance, he was retired against his will. After considering the documents that he submitted, the committee upheld its earlier decision on the same grounds. As such, Niebauer has no credible claim that his understanding of the issues at stake was so muddled as to inhibit effective review.14 Compare Terry, 145 F.3d at 39 13 As discussed above, this notice advised Niebauer of the committee's conclusion that he, a valued senior executive, had voluntarily elected to resign his employment, and that therefore he was not eligible for a severance benefit pursuant to the Plan. 14 Niebauer also argues that the inadequacy of the notice is manifested in its incorrect reference to section 2.10 of the plan, -26- (where claimant submitted additional information to committee that directly addressed whether he was disabled from performing any job, [h]is actions demonstrate[d] that he was well aware of the reasons for the decision, and was submitting additional evidence on the crucial point), with Bard, 471 F.3d at 241 (where administrator provided no notice of denial, claimant was not informed that he needed to show that his total disability occurred prior to termination of his employment, [and accordingly] submitted medical documentation not meant to address that point . . . which ultimately proved quite harmful to his administrative appeal).