Opinion ID: 615296
Heading Depth: 3
Heading Rank: 3

Heading: Sterling's Arguments Are Unpersuasive

Text: Sterling's various arguments do not alter our analysis and conclusion. First, Sterling's argument regarding (and the district court's reliance on) testimony stating that Section 5.05(f) was never intended to amend the Sterling Plan or directly benefit the Acquired Employee retirees is unpersuasive. Sterling asserts that Section 5.05(f) was included in the APA primarily to benefit Cytec with respect to a separate contractual obligation Cytec had with Cyanamid, and that any benefit to Plaintiffs was incidental. However, when addressing the intent-to-amend issue, the Halliburton court only referenced the purpose and intent for including the retiree benefits provision in the merger agreement in the factual background section of its opinion. See Halliburton, 463 F.3d at 366. It did not include any reference or analysis of the parties' intent in its determination that the merger agreement provision constituted a valid plan amendment. See id. at 370-74. That the APA generally, and Section 5.05(f) in particular, did not expressly state an intention to effect a plan amendment is immaterial because such an additional formality is not required by law or by the Sterling Plan's terms. See id. at 372. In this context at least, whether the parties to a corporate agreement which contains a provision directed to an ERISA plan intend to amend the plan is irrelevant. Additionally, in its response to the petition for rehearing, the Halliburton court stated: This is not a case, for example, in which an acquiring company limited a benefit continuation covenant to a specified time period or included an express statement that the merger agreement was not intended to modify or amend any particular plan. We express no view on whether such language would successfully limit the application of ERISA or a plan participant's right to sue. Halliburton Co. Benefits Comm. v. Graves (Halliburton II), 479 F.3d 360, 361 (5th Cir.2007). Because the same is true in this case, we likewise express no view as to whether an additional provision in the APA stating that no plan amendment was intended could have effectively prevented Section 5.05(f) from being a valid plan amendment by operation of law. Second, Sterling argues that Section 5.05(f) was a contractual obligation owed by Sterling Fibers to Cytec and not an amendment. This argument is also unpersuasive and misses the point of this court's analysis to determine whether or not this contractual provision could constitute a valid plan amendment. Of course Section 5.05(f) was a contractual obligation upon which Sterling or Cytec could sue each other for breach. But that fact does not mean that it was only a contractual obligation and not also a plan amendment. The benefits provision in the Halliburton merger agreement was also a contractual obligation between the parties to the agreement. 463 F.3d at 378. But by being directed at the provisions of an ERISA plan and by satisfying the amendment formalities, such merger agreement provision became a valid plan amendment as well. Sterling cites no statute or case law that supports the idea that contractual obligations and plan amendments are mutually exclusive concepts. [2] Pursuant to the foregoing analysis, Section 5.05(f) is a valid plan amendment whose terms can be enforced by Plaintiffs under ERISA; whether it is (or was) also a contractual obligation between corporate parties is besides the point for these purposes. Third, Sterling argues that because it never included the Section 5.05(f) language in its formal plan documents or distributed it to plan participants, Section 5.05(f) could not be part of the plan. Sterling is incorrect. While case law does provide that ERISA plans include the documents distributed to the employees and participants, see, e.g., Curtiss-Wright, 514 U.S. at 83, 115 S.Ct. 1223, it does not automatically follow that what otherwise would constitute a plan document is not part of the plan if it has not been distributed to plan participants or if its terms have not otherwise been included in the formal plan documents. This is precisely the same situation faced by the Halliburton court, and that court was unconcerned with the fact that Halliburton had never included the merger agreement itself or the terms of the retiree benefits-related provision in its formal plan documents or distributed the agreement to the plan participants. Simply because Sterling failed to include the Section 5.05(f) language in its other plan documents and failed to distribute the APA to its plan participants does not mean Section 5.05(f) was not a valid plan amendment. Failure to include or distribute all plan documentsincluding valid amendmentsmay be a separate violation of Plaintiffs' rights under ERISA, but it does not change Section 5.05(f)'s status as a valid plan amendment. Fourth, Sterling's argument that Sterling Fibers, not Sterling Chemicals, had the obligation to maintain the Acquired Employee retirees' benefits under Section 5.05(f) changes nothing. In 1996, the boards of directors of each of the three Sterling companies approved the APA, and the chairman of each of the three Sterling companies signed the APA. [3] At all relevant times, Sterling Chemicals maintained each of Sterling's ERISA plans and provided benefits for all of the Sterling companies' employees and retirees, including those of its wholly-owned subsidiary Sterling Fibers. Immediately after the acquisition, Sterling Fibers placed Plaintiffs into the Sterling Plan maintained by Sterling Chemicals (as was its obligation under Section 5.05(f)) because Sterling Fibers had no plan of its own. Moreover, during the bankruptcy, Sterling Fibers was sold and withdrawn as a participating employer in the Sterling Plan, while Sterling Chemicals retained its obligations under the Sterling Plan to all of Sterling Fibers' retirees (including Plaintiffs). Even if Sterling Fibers was originally the sole contractual obligor under Section 5.05(f), a proposition that does not appear to be correct, Sterling Chemicals became the obligor during the bankruptcy and remained the obligor prior to the first premium increase in 2003. The inter-company organization of the various Sterling ERISA plans does not change Section 5.05(f)'s status as a valid plan amendment. Finally, Sterling's citation to the Halliburton court's response to the petition for rehearing stating that the court's decision results from and is limited to the specific language used in the corporate documents involved in the Halliburton-Dresser merger, does not change our analysis or conclusion. See Halliburton II, 479 F.3d at 361. Insofar as its rules and analysis are sound and its facts are analogous, Halliburton is controlling precedent that we must follow. See Rios v. City of Del Rio, Tex., 444 F.3d 417, 425 n. 8 (5th Cir.2006); FDIC v. Abraham, 137 F.3d 264, 268 (5th Cir.1998). As none of Sterling's arguments to the contrary are persuasive, we hold that Section 5.05(f) constituted a valid amendment to the Sterling Plan as of December 23, 1996, the date the APA was executed.