Court Opinion

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Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

3-9-1995

Taylor v Peoples Nat Gas Co
Precedential or Non-Precedential:

Docket 94-3109

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                 UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT

                       ___________________

                           NO. 94-3109
                       ___________________

                        THOMAS H. TAYLOR,

                                 Appellant

                               v.

                THE PEOPLES NATURAL GAS COMPANY,
        a subsidiary of Consolidated Natural Gas Company;
    SYSTEM PENSION PLAN OF CONSOLIDATED NATURAL GAS COMPANY,
        Number 001; THE ANNUITIES AND BENEFITS COMMITTEE,
                     the plan administrator,

                                 Appellees

             ______________________________________

         On Appeal From the United States District Court
            For the Western District of Pennsylvania
                   (D.C. Civ. No. 92-cv-00394)
             _______________________________________

                   Argued: September 19, l994

           Before: BECKER, COWEN, Circuit Judges, and
                    POLLAK, District Judge.*

                (Filed: March 9, l995)

                        THOMAS P. COLE, II, ESQUIRE (ARGUED)
                        15 East Otterman Street
                        Greensburg, PA 15601-2591

                        Attorney for Appellant

                        P. JEROME RICHEY, ESQUIRE (ARGUED)
                        PHILIP J. WEIS, ESQUIRE
                        MARK T. PHILLIS, ESQUIRE

     * Honorable Louis H. Pollak, United States District Judge
for the Eastern District of Pennsylvania, sitting by designation.
                         Buchanan Ingersoll
                         Professional              Corporation
                         58th Floor, USX Tower
                         600 Grant Street
                         Pittsburgh, PA 15219

                         JOYCE C. DAILEY, ESQUIRE
                         Peoples Natural Gas Company
                         625 Liberty Avenue
                         Pittsburgh, PA 15222

                         Attorneys for Appellees

                         ROBERT E. WILLIAMS, ESQUIRE
                         DOUGLAS S. McDOWELL, ESQUIRE
                         McGuiness & Williams
                         1015 Fifteenth Street, N.W.
                         Washington, DC 20005

                         Attorneys for Amicus Curiae
                         Equal Employment Advisory Council

                 ______________________________

                      OPINION OF THE COURT
                _______________________________

BECKER, Circuit Judge.

          This appeal arises out of an ERISA action brought by

Thomas H. Taylor, a former employee of Peoples Natural Gas

Company ("PNG"), against the members of the Annuities and

Benefits Committee ("the defendants"), which is the plan

administrator of PNG's pension plan.   The district court granted

summary judgment for the defendants.   The gravamen of Taylor's

claim is that statements regarding the retroactivity of the

pension plan's early retirement incentive program, made to him by

PNG's Supervisor of Employee Benefits, John Burgunder, who was

not a member of the Annuities and Benefits Committee, constituted
a breach of the defendants' fiduciary obligation to communicate

complete and correct material information to plan participants

regarding their status and options under an employee benefit

plan.   The Equal Employment Advisory Council has filed an amicus

curiae brief in support of the defendants.

          Because Burgunder's statements form the basis of

Taylor's suit against the defendants and Taylor has not sued

Burgunder, we first, as a matter of logic, address the important

question presented -- whether a plan administrator is liable for

statements made by individuals who have been selected as non-

fiduciary agents by the plan administrator to assist it in

discharging its fiduciary obligation to administer a plan, even

though such individuals are formally employees of the plan

sponsor, who is not a fiduciary.     We answer this question in the

affirmative, and conclude that the defendants are responsible for

any material misstatements made by Burgunder to Taylor regarding

possible changes in PNG's pension plan since, in counseling

Taylor, Burgunder was acting, at a minimum, within his apparent

authority as an agent of the defendants.     We will, however,

affirm the judgment because the statements allegedly made by

Burgunder do not, as a matter of law, constitute a

misrepresentation of a material fact.

                                I.

          PNG sponsors a pension plan along with its parent

corporation, Consolidated Natural Gas Company ("CNG").     The named

fiduciary and plan administrator of the pension plan is the

Annuities and Benefits Committee, which is made up of employees
of both CNG and PNG.   The members of this committee are the

relevant defendants in this action.1   Burgunder was not a member

of the Annuities and Benefits Committee.

          During 1988, PNG hired several outside consulting firms

to conduct efficiency studies to examine ways to decrease costs

and increase the efficiency of the company's operations.    In

connection with these studies, PNG considered several downsizing

options, including the offer of an early retirement incentive

program through the company's pension plan.   Taylor, who was

employed during this period as a general manager in PNG's

Information System department, participated in the efficiency

studies and submitted a report to his boss, Scotty Amos, in which

he concluded that, if certain changes were implemented, Taylor's

department could operate with six fewer employees.   In his report

     1
          Taylor also has brought a claim against PNG, alleging a
breach of its fiduciary obligations under ERISA. The Magistrate
Judge granted PNG's motion for summary judgment on this claim,
concluding that, under the circumstances, PNG was not subject, in
its capacity as plan sponsor, to ERISA's fiduciary obligations.
We agree.   While "ERISA allows employers to wear two hats" and
act both as plan sponsor and plan administrator, an employer can
elect to wear only its plan sponsor "hat" and may designate,
pursuant to ERISA § 402(a)(1), 29 U.S.C.A. § 1102(a)(1) (1985), a
separate entity as plan administrator.    Fischer v. Philadelphia
Electric Co., 994 F.2d 130, 133 (3d Cir.), cert. denied 114 S.
Ct. 622 (1993) (internal quotation marks omitted). PNG has made
such an election and has designated the Annuities and Benefits
Committee as plan administrator. Given this election, PNG is not
subject, in its capacity as employer/plan sponsor, to ERISA's
fiduciary obligations.     See id., 994 F.2d at 133 ("As an
employer, neither [the plan sponsor] nor its business decision to
offer an early retirement program were subject to ERISA's
fiduciary duties."). Thus, Taylor's claim of fiduciary breach is
properly limited in this case to the plan administrator, the
Annuities and Benefits Committee.
Taylor suggested an early retirement incentive plan as a possible

method to reduce his department's manpower.   During the latter

portion of 1988, Taylor, who started work at PNG in 1959, began

to consider retirement, while he was aware that PNG was,

consistent with his suggestion, considering an early retirement

incentive program as a downsizing option.

          During the first two months of 1989, Taylor spoke to

Burgunder about whether PNG would adopt an early retirement

incentive program and, if such a plan were enacted, whether it

would be made retroactive to encompass employees retiring before

the announcement of the program.   While, as we have noted,

Burgunder was not a member of the Annuities and Benefits

Committee, the defendants concede that he was authorized "to

advise employees of their rights and options under the Pension

Plan." Appellees Br. at 21.   Moreover, it was generally

understood by PNG employees that Burgunder was the person with

whom plan participants should speak regarding possible changes to

the pension plan.   Taylor represents that during one particular

discussion, Burgunder told him that he believed that, should an

early retirement program be offered, it might apply

retroactively. More specifically, Taylor stated:
          During and prior to the March 1st date I had
          had discussions with Mr. Burgunder relative
          to rumors and possible studies that may have
          been going on that could lead to an early
          retirement program, and it was during one of
          those discussion points where I talked with
          Mr. Burgunder about other people that were
          retiring, and he gave me the -- he told me at
          that time that he believed that if there
          would be any early retirement programs
          offered in 1989, that they would make it
           retroactive to people retired from January
           1st, until such time as they might offer the
           program.

App. at 8b-9b.    Taylor continued:

           I can't recall exactly what his conversations
           were about the retroactivity other than he
           believed that if an early retirement program
           was announced or it was offered -- that might
           be a better word -- it might be retroactive
           to these people that we were talking about.

App. at 33b.

           Following these conversations, on November 30, 1988,

Taylor tendered a written announcement of his intention to

retire:
           Please accept my request for permission to
           retire from active employment effective March
           1, 1989. . . . I would also like to change my
           retirement date should a special retirement
           package be proposed or planned on or before
           3-1-89.

App. at 34a.     Taylor in fact retired on March 1, 1989.   On August

10, roughly five months later, the Annuities and Benefits

Committee announced that an early retirement program had been
adopted by PNG's Board of Directors and would be available for

employees retiring between September 1, 1989 and November 1,

1989.   This program was not made retroactive to employees -- such

as Taylor -- retiring prior to September 1, 1989.

           Following this announcement, Taylor brought suit

against the plan administrator contending that the statements

made to him by Burgunder regarding the possible retroactive

application of the early retirement program constituted a
misrepresentation by an ERISA plan fiduciary.     The parties

consented to have this case adjudicated by a Magistrate Judge, 28

U.S.C.A. § 636(c) (1993), who concluded that the statements made

by Burgunder to Taylor did not constitute a misrepresentation,

and hence the defendants had not breached their fiduciary

obligation.   He therefore granted the defendants' motion for

summary judgment.

          On this appeal of the Magistrate Judge's order,

authorized by 28 U.S.C.A. § 636(c)(3) (1993), the defendants ask

us to affirm on the ground that Burgunder was not acting on

behalf of the plan administrator when speaking with Taylor about

possible changes in the pension plan or, alternatively, on the

basis of the Magistrate Judge's reasoning that there was no

misrepresentation as a matter of law.     In reviewing an order

granting summary judgment we exercise plenary review, applying

the same standard that governed the district court.     That

standard provides that summary judgment should be rendered if the

evidence is such that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment

as a matter of law.   Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248, 106 S. Ct. 2505, 2510 (1986).

                               II.

                                A.

          The members of the Annuities and Benefits Committee,

the plan administrator of PNG's pension plan, are fiduciaries,

required to "discharge [their] duties with respect to [the] plan
solely in the interest of the participants and beneficiaries."2

ERISA § 404(a)(1), 29 U.S.C.A. § 1104(a)(1) (1986).   We addressed

the scope of this fiduciary obligation under a similar set of

circumstances in Fischer v. Philadelphia Electric Co., 994 F.2d

at 130.   There, employees of the Philadelphia Electric Company

("PECO") had approached PECO's benefits counselors and questioned

them about whether any early retirement incentive plan was being

considered.   Although PECO was considering an early retirement

incentive plan, the benefits counselors, acting pursuant to

explicit instructions from PECO's senior management, informed the

plan participants that they had no knowledge of any such plan.

The plaintiffs, plan participants who retired before the

announcement of the early retirement incentive pension plan,

alleged that PECO had breached its fiduciary duties under ERISA

by making affirmative material misrepresentations regarding

PECO's pension plan.   The action against PECO was grounded on its

alleged violation of fiduciary obligations in its capacity as

     2
        As noted above, the members of the Annuities and Benefits
Committee are the relevant defendants in this action, and Taylor
has alleged a fiduciary breach on the part of that Committee for
statements made by Burgunder, PNG's Supervisor of Employee
Benefits. It is therefore necessary to analyze accurately under
appropriate legal doctrine Taylor's appeal of the magistrate
judge's dismissal of this action. We acknowledge that Taylor has
also alleged a fiduciary breach on the part of PNG, a claim upon
which the magistrate judge chose to focus in his memorandum
opinion and which this court has disposed of in note 1.       The
disposition of this claim does not, however, obviate the need to
properly address Taylor's parallel claim of fiduciary breach on
the part of the Annuities and Benefits Committee.
plan administrator.3      The district court granted summary judgment

for PECO and the plaintiffs appealed.

            The Fischer panel began its analysis by recognizing

that well established case law provides that plan administrators

have a fiduciary obligation not to affirmatively misrepresent

material facts to plan participants.      Fischer, 994 F.2d at 135

(citing Eddy v. Colonial Life Ins. Co., 919 F.2d 747, 751 (D.C.

Cir. 1990) ("This duty to communicate complete and correct

material information about a beneficiary's status and options is

not a novel idea.")); see also Bixler v. Central Penn. Teamsters

Health-Welfare Program, 12 F.3d 1292, 1300 (3d Cir. 1993)

(recognizing that plan administrators have "an obligation to

convey complete and accurate information material to the

beneficiary's circumstances").      The panel restated this

obligation in the context of fiduciaries who counsel plan

participants regarding the possible adoption of amendments to a

plan:
            we hasten to add that ERISA does not impose a
            "duty of clairvoyance" on fiduciaries.        An
            ERISA fiduciary is under no obligation to
            offer    precise    predictions   about   future
            changes to its plan. Rather, its obligation
            is    to    answer    participants'    questions
            forthrightly, a duty that does not require
            the fiduciary to disclose its internal
            deliberations     nor    interfere   with    the
            substantive     aspects    of   the   collective
            bargaining process. A plan administrator may
            not        make       affirmative       material
            misrepresentations to plan participants about
            changes to an employee pension benefits plan.

     3
         See supra n.1.
            Put simply, when a plan administrator speaks,
            it must speak truthfully.

Fischer, 994 F.2d at 135 (internal quotation marks and citations
omitted).

            Given this obligation, PECO contended that the

statements made by the benefits counselors were not affirmative

misrepresentations, since company officials had not told them of

the discussions taking place among senior management regarding

the contemplated adoption of an early retirement incentive

program.    The Fischer panel rejected this argument and reversed

the district court's grant of summary judgment, concluding that,

given the facts alleged, the plan administrator was responsible

for statements made by the benefits counselors, and that PECO,

which was plan administrator as well as plan sponsor, had

therefore breached its fiduciary obligation to not affirmatively

misrepresent material information to plan participants:
          PECO argues that these communications cannot
          be     characterized      as     "affirmative
          misrepresentations"    because   "when    the
          benefits counselors . . . stated that they
          knew of no [early retirement] plan, their
          representations were correct." . . . This
          explanation will not do, for the fiduciary
          obligations owed to the plan participants
          were owed by PECo as plan administrator.
          These obligations cannot be circumvented by
          building a "Chinese wall" around those
          employees    on   whom    plan   participants
          reasonably rely for important information and
          guidance about retirement.

Fischer, 994 F.2d at 135 (emphasis omitted).

                                 B.
          While acknowledging that they had a fiduciary

obligation as plan administrator not to materially misrepresent

information regarding possible changes in PNG's pension plan, the

present defendants contend that they have not violated this

obligation since Burgunder was not a member of the Annuities and

Benefits Committee and was not otherwise a fiduciary.     The

defendants attempt to distinguish this case from Fischer, where

the misrepresentations were allegedly made by benefits counselors

who were the employees of the plan administrator, PECO.     In this

action, the Annuities and Benefits Committee, and not PNG, is the

named fiduciary, and hence, the defendants assert, they cannot be

liable for any affirmative misrepresentations made to plan

participants by Burgunder, PNG's employee, about possible changes

to PNG's pension plan.   While we agree that Burgunder was not a

member of the Annuities and Benefit Committee, and otherwise not

a fiduciary of the plan, we cannot agree with the defendants that

Burgunder was not acting on their behalf when speaking with

Taylor.

          The defendants concede that Burgunder had actual

authority, as Supervisor of Employee Benefits, to advise

employees of their rights and options under the plan, prepare

reports concerning participants' benefits, and calculate the

costs of alternative plan amendments on behalf of the plan

administrator.   Appellees Br. at 21.   Given that Burgunder's

activities are limited to these administrative ministerial

functions, we agree with the defendants that Burgunder is not a

fiduciary.   Department of Labor Regulation § 2509.75-8, 29 C.F.R.
§ 2509.75-8, Q & A D-2 provides that such individuals, whose

activities are limited "within a framework of policies,

interpretations, rules, practices, and procedures made by other

persons, fiduciaries with respect to the plan," cannot be

individually liable as fiduciaries under ERISA, since they fail

to exercise "the discretionary authority or discretionary

control" over the plan required for the direct imposition of

fiduciary liability.   See ERISA § 3(21)(A), 29 U.S.C.A.

§ 1002(21)(A) (West Supp. 1993).

          While Burgunder is not himself a fiduciary with respect

to the plan (and he is not a defendant in this action), he did

function, under the regulations, as a non-fiduciary agent of the

defendants, assisting them in discharging their authority and

responsibility, as plan administrator, to "control and manage the

operation and administration of the plan."     ERISA § 402(a)(1), 29

U.S.C.A. § 1102(a)(1) (1986).    While Burgunder is formally the

employee of plan sponsor PNG, he performed his activities for the

plan on behalf of the plan administrator defendants, and not on

behalf of the plan sponsor.     The conclusion that Burgunder

performed these tasks on behalf of the plan administrator, the

named fiduciary with respect to the plan, is clear from the

regulations.   These provide that "[i]n discharging fiduciary

responsibilities, a fiduciary with respect to a plan may rely on

. . . persons who perform purely ministerial functions for such

plan," such as "advising participants of their rights and options

under the plan."   DOL Reg. § 2509.75-8, 29 C.F.R. § 2509.75-8, Q

& A D-2 & FR-11 (emphasis added); see also 2 JEFFREY D. MAMORSKY,
EMPLOYEE BENEFITS LAW: ERISA   AND   BEYOND § 12.06[4] (1993) (recognizing

that, pursuant to DOL Reg. § 2509.75-8, a committee, acting as

plan administrator, can "select[] agents to perform ministerial

functions").

           The defendants concede, as we have noted, that

Burgunder is governed by this regulation, and that he had actual

authority as the Supervisor of Employee Benefits to "advise

employees of their rights and options under the Pension Plan."

Appellees Br. at 21.     This authority originates from the

defendants, the plan administrator, and not from the plan

sponsor, for the plan administrator is the entity with the

fiduciary obligation to "control and manage the operation and

administration of the plan."           ERISA § 402(a)(1), 29 U.S.C.A. §

1102(a)(1) (1986).     In contrast, PNG, the plan sponsor, is not a

fiduciary and correspondingly has no duty to administer the plan.

Thus, under the applicable regulations, Burgunder was acting as a

non-fiduciary agent of the defendants (the plan administrator)

and not PNG (the plan sponsor) in "advising participants of their

rights and options under the plan."           Department of Labor

Regulation § 2509.75-8, 29 C.F.R. § 2509.75-8, Q & A D-2.

           This conclusion is consistent with our reasoning in

Fischer, where we held that a plan administrator violates its

"fiduciary obligations owed to the plan participants" when "those

employees on whom plan participants reasonably rely for important

information and guidance about retirement" make material

misstatements regarding possible changes to a company's pension

plan.   Fischer, 994 F.2d at 135.          The fact that the benefits
counselors who made the misrepresentation in Fischer were the

employees of PECO does not distinguish that case from ours.     The

employees in Fischer were acting as the agents of PECO in its

capacity as plan administrator, not as employer/plan sponsor.

See id. at 133 ("As an employer, neither PECo nor its business

decision to offer an early retirement program were subject to

ERISA's fiduciary duties." (internal quotation marks omitted)).

Like the benefits counselors in Fischer, Burgunder was acting to

assist the plan administrator, not the plan sponsor, in

discharging its fiduciary obligation to "control and manage the

operation and administration of the plan."   ERISA § 402(a)(1), 29

U.S.C.A. § 1102(a)(1) (1986).

                                C.

          Having concluded that Burgunder was acting on behalf of

the defendants, and not PNG, in performing the functions outlined

above, we must consider whether Burgunder was acting within the

scope of his authority as an agent of the defendants in making

representations to Taylor regarding the possible retroactive

application of plan amendments under consideration by PNG, the

plan sponsor.   In making this determination, we are governed by

the law of agency, as developed and interpreted as a matter of

federal common law.   See Firestone Tire and Rubber Co. v. Bruch,

489 U.S. 99, 110, 109 S. Ct. 948, 954 (1989) ("[C]ourts are to

develop a federal common law of rights and obligations under

ERISA-regulated plans."); Franchise Tax Board v. Construction
Laborers Vacation Trust, 463 U.S. 1, 25, 103 S. Ct. 2841, 2854,

n.26 (1983) ("`[A] body of Federal substantive law will be
developed by the courts to deal with issues involving rights and

obligations under private welfare and pension plans.'" (quoting

remarks of Sen. Javits at 129 CONG. REC. 29942)); National

Football Scouting, Inc. v. Continental Assurance Co., 931 F.2d
646, 648 (10th Cir. 1991) (examining whether "under the federal

common law of agency" an agent of a plan fiduciary was acting

within his actual or apparent authority).

           In this regard, we recognize that implicit in our

holding in Fischer is the assumption that in counseling the plan

participants about possible amendments to the plan, the PECO

benefits counselors were acting within their authority as agents

of the plan administrator.   In particular, we read our limitation

of fiduciary liability to "those employees on whom plan

participants reasonably rely for important information and

guidance about retirement" as a legal conclusion that such

individuals operate, at a minimum, within their apparent

authority to provide such information and guidance to plan

participants, on behalf of the plan administrator.    The

defendants here admit that Burgunder had actual authority to

"advise[] employees of their rights and options under the Pension

Plan."   Appellees Br. at 21.   Moreover, it is uncontested that

plan participants reasonably relied on Burgunder for important

information and guidance about retirement.    Considering these

facts in light of the entire record, we conclude that, like the

benefits counselors in Fischer, Burgunder was acting within his
authority as an agent of the plan administrator, the members of
the Annuities and Benefits Committee, in counseling plan

participants regarding possible changes in the plan.

          Our conclusion also accords with established principles

of apparent authority.    It is well settled that apparent

authority (1) "results from a manifestation by a person that

another is his agent" and (2) "exists only to the extent that it

is reasonable for the third person dealing with the agent to

believe that the agent is authorized."    RESTATEMENT (SECOND)   OF   AGENCY

§ 8 cmts. a & c (1958).    In our recent opinion in American

Telephone & Telegraph v. Winback & Conserve Program, ___ F.3d

___, 1994 U.S. App. LEXIS 34398, 1994 WL 685911 (3d Cir. Dec. 9,

1994), applying the concept of apparent authority under the

federal common law of agency, we held that "[a]pparent authority

arises in those situations where the principal causes persons

with whom the agent deals to reasonably believe that the agent

has authority. . . ."     Id. at *64, 1994 WL 685911 at *18

(internal quotation marks omitted).

           It is uncontroverted that both elements necessary for

the existence of apparent authority are present in this case.

First, the defendants' undisputed vesting of Burgunder with the

authority to "advise employees of their rights and options under

the Pension Plan" clearly constitutes a manifestation that he was

their agent.

           Second, the plan participants, such as Taylor,

reasonably believed that Burgunder specifically had the authority

to counsel plan participants about possible amendments to the

plan.   Taylor actually believed that Burgunder had the authority
to counsel plan participants about possible changes in the plan.

App. at 41b ("I accepted his comments because he's the key person

in the retirement process at Peoples Natural Gas at the time I

retired.").    Moreover, this belief was reasonable in that the

evidence demonstrates that plan participants generally considered

Burgunder the person to speak with regarding possible changes in

retirement benefits.    In light of this reasonable belief about

what information Burgunder was able to provide, the defendants'

authorization of Burgunder to be their representative to plan

participants, and the defendants' lack of effort to announce any

limits to the scope of Burgunder's authority, it was a short and

reasonable step for plan participants, such as Taylor, to believe

that Burgunder not only was able, but indeed possessed the

specific authority, to counsel them about possible amendments to

the plan.

            We conclude, therefore, that Burgunder was acting, at a

minimum, with apparent authority as agent of the defendants in

counseling Taylor regarding possible changes in the company's

pension plan.    Given this authority, the defendants will be

liable for any affirmative material misrepresentations made by

Burgunder concerning the possible retroactive application of the

plan's early retirement incentive plan.

                                 D.

            We therefore are presented with the question whether

Burgunder's alleged statement to Taylor that "he believed that if

an early retirement program was . . . offered . . . it might be
retroactive," app. at 33b (emphasis supplied), constituted a
material misrepresentation.   We agree with the Magistrate Judge

that, as a matter of law, no reasonable fact-finder could

conclude that Burgunder's statement constituted a

misrepresentation.4

          It is uncontested that at the time of Burgunder's

statement to Taylor, the questions whether PNG would enact an

early retirement incentive plan, and whether it would apply

retroactively, were both yet undecided by PNG.   Given that the

plan sponsor, PNG, had yet to make a final decision regarding the

prospective amendment, we conclude that the defendants did not

violate their fiduciary obligation by merely confirming to Taylor

that the adoption of such an amendment was under consideration

     4
           In  addition   to   alleging   that   the   defendants
misrepresented material facts regarding the proposed amendment's
retroactivity, Taylor contends that they breached an affirmative
fiduciary duty to inform plan participants when possible
amendments to an employee benefit plan are under serious
consideration by the plan sponsor.    While we recognize that in
certain instances a fiduciary has an affirmative obligation to
disclose relevant material information to plan participants
"about which the beneficiary has not specifically inquired,"
Bixler, 12 F.3d at 1300, we do not believe that the facts of this
case present this issue, and therefore we will not address it.
During the time that Taylor made his decision regarding the
effective date of his retirement, he was not ignorant of the fact
that PNG was seriously considering an early retirement incentive
plan. Indeed, Taylor suggested in his own efficiency report that
an early retirement incentive plan be instituted as a way to
reduce his department's manpower, and he was aware through his
discussions with the upper management of PNG that such a plan was
under consideration. Moreover, Taylor discussed with Burgunder,
on multiple occasions, the likelihood of the company's enacting
such an amendment to the plan, and he specifically reserved the
right, in his letter of resignation, to change his retirement
date from March 1, 1989 if such an amendment were enacted before
that time.
and by expressing a reasonable opinion as to the scope of the

possible amendment.   The record clearly reflects that Burgunder's

prediction was by all accounts reasonable.   Burgunder based his

prediction on two grounds: (1) an outside consultant had

suggested a retroactive early retirement program; and (2) a

member of PNG's board of directors, Mr. Flinn, to whom Burgunder

had talked about the amendment's possible scope, had stated that

he supported making the program retroactive.

          Burgunder's alleged statement is a far cry from the

statements made by the benefits counselors in Fischer that "there

was definitely nothing in the planning," when in fact such an

amendment was under serious consideration by company officials.

In contrast, Burgunder's attempt to counsel Taylor by offering

his prediction based on his discussions with a member of PNG's

board of directors was not a misrepresentation.

          Taylor conceded that Burgunder's statement was nothing

more than his "best guess as to what may occur should an early

retirement package be adopted."   App. at 13a.   An honest

statement of belief reasonably grounded in fact does not

constitute a misrepresentation.   As Justice Holmes recognized in

another context, "[t]he rule of law is hardly to be regretted,

when it is considered how easily and insensibly word of hope or

expectation are converted by an interested memory into statements

of quality or value when the expectation has been disappointed."

Deming v. Darling, 20 N.E. 107, 148 Mass. 504, 506 (1889).
                               III.
           In sum, we conclude that although the defendants are

responsible for any material misstatements made by Burgunder to

Taylor regarding possible changes in PNG's pension plan, the

statements allegedly made by Burgunder do not, as a matter of

law, constitute a misrepresentation.   We will, therefore, affirm

the order of the Magistrate Judge granting the defendants'

request for summary judgment.

                    __________________________

Thomas H. Taylor v. The Peoples Natural Gas Company
No. 94-3109

Cowen, Circuit Judge, concurring.
           I join in Parts I and IID of the majority opinion and

therefore concur as to the judgment in this case.   I am unable to

join in Parts IIA-C, however, because I believe that the

majority's opinion sweeps more broadly than is justified under

the facts presented here.

           At issue in this case is a statement made by John

Burgunder, The Peoples National Gas Company's Supervisor of

Employee Benefits, to Thomas Taylor, a former employee of The

Peoples National Gas Company ("PNG"), concerning the

retroactivity of a potential amendment to PNG's pension plan.

According to Taylor, Burgunder misrepresented to him that if PNG

offered an early retirement incentive plan, Taylor would get its

benefits even if Burgunder retired before the incentive plan was

enacted.   Specifically, Taylor alleged that:
           During and prior to the March 1st date, I had had
           discussions with Mr. Burgunder relative to rumors and
           possible studies that may have been going on that could
           lead to an early retirement program, and it was during
           one of those discussion points where I talked with Mr.
           Burgunder about other people that were retiring, and he
           gave me the -- he told me at that time that he believed
           that if there would be any early retirement programs
           offered in 1989, that they would make it retroactive to
           people retired from January 1st, until such time as
           they might offer the program.

App. at 8b-9b (emphasis added).    He continued:

           I can't recall exactly what his conversations were
           about the retroactivity other than he believed that if
           an early retirement program was announced or it was
           offered -- that might be a better word -- it might be
           retroactive to these people that we were talking about.

App. at 33b (emphasis added).

       As the majority correctly recognizes, the magistrate judge

who adjudicated this case concluded that the statement made by

Burgunder to Taylor that he believed the early retirement program
would be retroactive did not constitute misrepresentation.

Taylor v. Peoples Natural Gas Co., No. 92-394, slip op. at 4-5

(W.D. Pa. January 27, 1994).    Agreeing with the magistrate judge,

the majority holds in Part IID that as a matter of law, no
reasonable fact-finder could conclude that Burgunder's statement

constituted a misrepresentation.    Maj. Op. at     [typescript at

18].   Inexplicably, however, before disposing of this case on the

unassailable grounds aptly set out by the magistrate judge, the

majority chooses in Parts IIA-C to pose and answer its own

questions about the relationship between ERISA fiduciaries and

their agents in cases, unlike the case at hand, where a party
demonstrates a misrepresentation.   The majority concludes that a

plan administrator can be held liable for a breach of a fiduciary

duty for misrepresentations by the plan administrator's non-

fiduciary agents.   Because the majority reaches out to decide an

issue that is not squarely before us, I am unable to join in

Parts IIA-C of the majority opinion.

          It is well settled law that in general "[c]ases are to

be decided on the narrowest legal grounds available, and relief

is to be tailored carefully to the nature of the dispute before

the court."    United States v. Rias, 524 F.2d 118, 120 n.2 (5th

Cir. 1975) (quoting Korioth v. Briscoe, 523 F.2d 1271, 1275 (5th

Cir. 1975));   see also In re Chicago, Rock Island and Pac. R.R,

772 F.2d 299, 303 (7th Cir. 1985) (it is an "elementary maxim of

our legal system" that a court should decide "only the case

before it"), cert. denied, 475 U.S. 1047, 106 S. Ct. 1265;

Shamloo v. Mississippi State Bd. of Trustees of Insts. of Higher

Learning, 620 F.2d 516, 524 (5th Cir. 1980) (expressing concern

that cases be decided on the narrowest legal grounds available);

Finley v. Hampton, 473 F.2d 180, 189 (D.C. Cir. 1972) (explaining

that courts do not decide hypothetical controversies).    This

proposition is a corollary to the rule that federal courts are

not to render advisory opinions, but rather are to decide

specific issues for parties with real disputes.    See, e.g.,
Korioth, 523 F.2d at 1274-75; see also United States v. Leon, 468
U.S. 897, 963, 104 S. Ct. 3430, 3447 (1984) (Stevens, J.,
concurring) ("[W]hen the Court goes beyond what is necessary to

decide the case before it, it can only encourage the perception

that it is pursuing its own notions of wise social policy, rather

than adhering to its judicial role.").

          The statements the majority makes concerning the

possible liability of ERISA fiduciaries due to misrepresentations

of their non-fiduciary agents run afoul of this rule because the

majority's holding that there was no misrepresentation here is

sufficient to put this case to rest.   Moreover, the majority's

choice to explore agency law is particularly ill-advised because

(1) we have not had the benefit of the magistrate judge's

thinking and findings on these important matters, (2) these

issues were neither argued nor briefed by counsel, and (3) the

majority breaks considerable new ground in the area of ERISA

fiduciary liability.

          The majority's opinion states that the Annuities and

Benefits Committee of the System Pension Plan, the plan

administrator and co-defendant in this matter, can be held liable

for statements by Burgunder because Burgunder was acting within

the scope of his apparent authority as an agent of the plan

administrator in making representations to Taylor.   The opinion

of the magistrate judge disposing of this case, however, is

completely devoid of any references to the question of whether an

ERISA fiduciary can be held liable for statements of its non-

fiduciary agents acting within the scope of their apparent
authority.       Indeed, in his opinion, the magistrate judge reaches

only two conclusions of law.       First, he concludes that there is

no general duty on the part of an employer to inform its

employees of any action it is considering taking in the future.

As he states, "[t]he fact that PNG was considering an early

retirement package for 1989 is not information which ERISA

requires an employer to disclose."       Taylor, slip op. at 3

(emphasis added).       Second, he concludes that since "[p]laintiff

concedes that he was not informed that a decision had been made

to offer any early retirement program at all, and that this was

simply Mr. Burgunder's best guess as to what may occur should an

early retirement program be adopted," there was "no

misrepresentation, and thus no breach of fiduciary duty."          Id. at

4-5.       There is absolutely no discussion of the position now

advanced by the majority that the plan administrator could be

held liable for statements of the plan administrator's non-

fiduciary agents.5

       5
      Accordingly, footnote one of the majority opinion is
slightly misleading when it first states that "[t]he Magistrate
Judge granted PNG's motion for summary judgment on this claim
concluding that, under the circumstances, PNG was not subject, in
its capacity as plan sponsor, to ERISA's fiduciary obligations"
and then draws the conclusion that "Taylor's claim of fiduciary
breach   is  properly   limited  in   this   case  to  the   plan
administrator." Maj. Op. at       [typescript at 4]. While it is
certainly accurate to explain that PNG, the plan sponsor, is not
a fiduciary, the majority's footnote makes it appear as if the
magistrate judge drew the distinction between the duty of an
employer as a plan sponsor and the fiduciary duty of the
Annuities and Benefits Committee as a plan administrator.
Indeed, the magistrate judge did not even distinguish between the
          Even more importantly, the magistrate judge's factual

recitation and the record before us are insufficient to establish

the precise nature of the relationship between the System Pension

plan administrator and Burgunder, a failing that makes it

extremely difficult to perform a careful analysis of the possible

applicability of the apparent authority doctrine.    PNG asserts

that Burgunder was merely an employee of PNG and was not a member

of the "separate and distinct plan administrator."    Appellee's

Brief at 21.   The magistrate judge's factual recitation does not

even touch on the relationship between Burgunder and the plan

administrator.    As the majority recognizes, "apparent authority

arises in those situations where the principal causes persons

with whom the agent deals to reasonably believe that the agent

has authority."   Maj. Op. at     [typescript at 16] (citing

American Telephone & Telegraph v. Winback & Conserve Program, No.

94-5305, 1994 U.S. App. Lexis 34398, at *64, 1994 WL 685911, at

*18 (3d Cir. Dec. 9, 1994)).    The majority, however, fails to

adduce a single fact which convincingly demonstrates that the

plan administrator caused employees of PNG to conclude that

Burgunder was authorized to make representations to employees

concerning potential plan amendments.6   Accordingly, I am

plan sponsor and the plan administrator in the discussion section
of his opinion.
     6
      The majority states that Taylor's belief was reasonable
because "evidence demonstrates that plan participants generally
considered Burgunder the person to speak with regarding possible
changes in retirement benefits." Maj. Op. at      [typescript at
troubled by the majority's analysis and concerned with the logic

of deciding a question without relevant facts.

           Equally disturbing in this case is the majority's

willingness to advance arguments that were not put forward by the

appellant in the first instance and that were not briefed by the

parties.   We have repeatedly recognized the impropriety of

reaching issues that are not properly briefed before us.      United

States v. Martinez-Hidalgo, 993 F.2d 1052, 1057 n.10 (3d Cir.

1993), cert. denied,      U.S.    , 114 S. Ct. 699 (1994);

Francesconi v. Kardon Chevrolet, Inc., 888 F.2d 18, 19 n.1 (3d

Cir. 1989); H. Prang Trucking Co. v. Local Union No. 469, 613
F.2d 1235, 1239 (3d Cir. 1980); see also United States v.

17] (emphasis added).      In support of this proposition the
majority cites a portion of the deposition testimony of Taylor,
App. at 22a, and a portion of the deposition testimony of
Burgunder, App. at 39a-40a. In the portion of Taylor's testimony
that the majority cites, Taylor simply recounts his feeling that
most people "felt comfortable" dealing with Burgunder concerning
their retirement. Taylor never makes the claim that others felt
comfortable relying on Burgunder's statements about potential
plan amendments.      Further, in the portion of Burgunder's
testimony that the majority cites, Burgunder merely testifies
that he had discussed "rumors" of a new retirement program with
employees.
     As a preliminary matter, it is difficult to understand how a
discussion of "rumors" could give rise to a reasonable belief
that Burgunder could authoritatively speak to the issue of plan
amendments. Even more importantly, it is hard to comprehend how
the majority can rely on statements by Burgunder, the alleged
agent,   to  conclude   that  the   principal  (i.e.,   the  plan
administrator), made a representation to the employees that
Burgunder could speak authoritatively about possible amendments.
What the majority lacks is a statement by the plan administrator,
the principal, disclosing that Burgunder could give advice
concerning potential plan amendments.
Crawley, 837 F.2d 291, 293 (7th Cir. 1988) (expressing concern

over decisions based on issues not refined by the fires of

adversary presentation).   In his opening brief, Taylor simply

argued that a fiduciary may not materially mislead a plan

participant.   Appellant's Brief at 11.7   Moreover, in his reply

brief, Taylor makes it clear that his argument is that PNG is a

fiduciary and it owed the fiduciary duty of conveying complete

and accurate information to him.   Appellant's Reply Brief at 2.

Taylor states, "PNG continues to assert its status as employer

only, to which the Appellant disagrees. [sic]."    Id. at 1.   Since

the majority apparently agrees that PNG is not a fiduciary, see

Maj. Op. at      n.1 [typescript at 4 n.1], it is difficult to see

how Taylor's arguments make it necessary to discuss the plan

administrator's possible liability due to statements by non-

fiduciary agents.   Taylor never specifically pressed on appeal

the claim that because the plan administrator is a fiduciary, it

should be liable for statements of its non-fiduciary agents.

Accordingly, counsel for PNG and the Annuities and Benefits

Committee had no occasion to evaluate this issue in their

     7
      Taylor also argued that (1) an employer has an affirmative
duty to inform its employees of any action it is considering
taking in the future, and (2) that there are insufficient facts
in this record to resolve certain disputed issues.     The first
argument is disposed of by the majority opinion at footnote
three. The second argument becomes irrelevant once we conclude
that there was no misrepresentation.
briefs.8   Without proper argument and discussion of this issue,

it is ill-advised to reach such claims.

           Finally, the majority's decision to reach the issue of

a plan administrator's liability for non-fiduciary agents is ill-

advised because the majority's conclusion is not firmly dictated

by our previous precedents.   The majority states that the

conclusion it reaches is consistent with our reasoning in Fischer

v. Philadelphia Electric Co., 994 F.2d 130 (3d Cir.), cert.

denied,      U.S.     , 114 S. Ct. 622 (1993).   In Fischer,

however, we merely held that "[a] plan administrator may not make

affirmative material misrepresentations to plan participants

about changes to an employee pension benefits plan."     Fischer,
994 F.2d at 135.    We did not comment on the possible liability of

a plan administrator for statements by its non-fiduciary agents.

While the majority's position may be a logical extension of

Fischer, I would have left our decision as to whether such an

extension is justified to another day when the issue is more

squarely presented.   Accordingly, relying simply on the fact that

Taylor failed to demonstrate misrepresentation in this case, I

would affirm the decision of the magistrate.

     8
      PNG does argue, by way of an alternative grounds to affirm
the magistrate's decision, that PNG is not a fiduciary and that
Burgunder is not a fiduciary.   It does not, however, reach the
question of whether Burgunder could bind the plan administrator
as a non-fiduciary agent.