Court Opinion

ID: 3023727
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:29:36.59544+00
Date Added: 2024-06-11T11:47:38.348542
License: Public Domain

United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                   ___________

                                Nos. 98-3191/3970
                                  ___________

Charles E. Emmenegger; Robert F.         *
Ritzie; James E. Riley,                  *
                                         *
            Appellees,                   *
                                         *   Appeals from the United States
      v.                                 *   District Court for the
                                         *   Eastern District of Missouri.
Bull Moose Tube Company;                 *
Caparo, Inc.; Bull Moose Tube, Ltd.;     *
Swraj Paul,                              *
                                         *
            Appellants.                  *

                                   ___________

                             Submitted: June 17, 1999
                                 Filed: November 24, 1999
                                  ___________

Before BOWMAN and HEANEY, Circuit Judges, and LONGSTAFF,1 District Judge.
                          ___________

BOWMAN, Circuit Judge.

      Bull Moose Tube Company; Caparo, Inc.; Bull Moose Tube, Ltd.; and Swraj
Paul (collectively, the Company), appeal from the judgment of the District Court
entered in favor of Charles E. Emmenegger, Robert F. Ritzie, and James E. Riley on

      1
        The Honorable R. E. Longstaff, United States District Judge for the Southern
District of Iowa, sitting by designation.
their claims for damages under ERISA.2 We affirm in part, vacate in part, and remand
for further proceedings.

                                            I.

       We sketch the facts only briefly here, and refer the reader to the District Court's
opinion in Emmenegger v. Bull Moose Tube Co., 13 F. Supp. 2d 980 (E.D. Mo. 1998),
for the detailed factual findings of that court, which, to the extent such findings are
relevant to our decision today, are not clearly erroneous.

        Emmenegger, Ritzie, and Riley all were senior executives with Bull Moose Tube
Company (BMT), a steel tube manufacturer and Missouri corporation, when BMT was
acquired by Caparo, Inc., in 1988.3 This case concerns two BMT employee plans
under which the plaintiffs claim benefits. The first is a phantom stock plan (PSP)
created around the time Caparo acquired BMT in order to give seven members of
BMT's management, including the three plaintiffs, a financial interest in BMT without
giving them an equity interest in the closely-held company. As we will explain in more
detail infra, the PSP provides that the shares of phantom stock shall be redeemed either
for book value or for the higher redemption value, the amount to be determined by the
circumstances and timing of the redemption. The other plan at issue in this case is the

      2
        Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88
Stat. 829 (codified as amended at 29 U.S.C. §§ 1001-1461 (1994 & Supp. III 1997)
and in scattered sections of 26 U.S.C.).
      3
        At the time of his termination in 1996, Riley was a vice-president of the newly-
formed Caparo Steel Company, a related corporation. Emmenegger and Ritzie also had
management responsibilities at Caparo Steel up until the very end of their employment
with BMT, even while continuing as executives at BMT. The defendant companies
and a number of other companies, many of them interrelated, are essentially controlled
by Swraj Paul, the individual defendant. For more detail on these companies, see the
District Court's comprehensive opinion.
                                           -2-
BMT severance plan, which since 1984 has provided for the payment of benefits to
employees terminated in certain circumstances.

       Over the years following the 1988 acquisition of BMT by Caparo, Inc., BMT
enjoyed strong earnings. Notwithstanding this success, Emmenegger, Ritzie, and Riley
all were terminated in March 1996. None received payment for any of his phantom
stock, including the so-called Lichtfuss shares, stock that the plaintiffs allege was
redistributed to them after it was redeemed by another original PSP participant.4
Moreover, Emmenegger and Ritzie never received any severance benefits under the
BMT severance plan. (Riley received benefits under the Caparo Steel severance plan,
which is essentially identical to the BMT plan.) All three filed suit alleging various
violations of ERISA and state law.5 After a nine-day bench trial, the District Court
entered judgment for the plaintiffs, awarding damages, with interest, to Emmenegger,
Ritzie, and Riley on their ERISA claims relating to the redemption of their phantom
stock shares (including the Lichtfuss shares) and to retaliatory discharge, and awarding
damages, with interest, to Emmenegger and Ritzie on their ERISA claims for severance
pay. The court also awarded costs and attorney fees to the plaintiffs. See Emmenegger
v. Bull Moose Tube Co., 33 F. Supp. 2d 1127 (E.D. Mo. 1998). The Company
appeals.

      4
        It is not clear to this Court why the Company has not yet paid the plaintiffs at
least part of what they claim they are owed. In its brief, the Company acknowledges
obligations due the plaintiffs under the PSP: "Note that defendants do not dispute that
Emmenegger and Ritzie are entitled to book value for their phantom shares or that
Riley is entitled to redemption value for his phantom shares." Brief of Appellants at
64 n.34. As far as we know, these admitted obligations remain unpaid.
      5
        In their complaint, the plaintiffs included state-law counts alleging breach of the
PSP by the Company. After the District Court determined that it had jurisdiction over
the plaintiffs' ERISA claims, the Company sought dismissal of the state-law counts,
arguing that they were preempted by ERISA. The District Court granted the
Company's motion in a Memorandum and Order dated November 18, 1997.
                                            -3-
                                           II.

       Initially, we must address the subject matter jurisdiction of the federal courts in
this case. The Company argues, as it did in the District Court, that neither the PSP nor
the BMT severance plan is an ERISA plan. Therefore, the Company contends, the
plaintiffs' claims raise no federal questions and hence there is no federal subject matter
jurisdiction.

       The plaintiffs sought relief in federal court under 29 U.S.C. § 1132(a)(1)(B)
(1994), which empowers "a participant or beneficiary" of an ERISA plan to bring a
civil action "to recover benefits due to him under the terms of his plan." A "plan" is
defined as "an employee welfare benefit plan or an employee pension benefit plan or
a plan which is both." 29 U.S.C. § 1002(3) (1994). In ruling on the Company's pretrial
motion to dismiss for lack of federal subject matter jurisdiction, the District Court
concluded that the PSP is an employee pension benefit plan under ERISA and that the
severance plan is an ERISA employee welfare benefit plan. See Emmenegger v. Bull
Moose Tube Co., 953 F. Supp. 292 (E.D. Mo. 1997). The Company again raises the
issue of subject matter jurisdiction on appeal. If the Company is correct, and the plans
are not ERISA plans, there is no federal jurisdiction. See Kulinski v. Medtronic Bio-
Medicus, Inc., 21 F.3d 254, 256 (8th Cir. 1994). We review these mixed questions of
law and fact de novo. See id.

                             A. The Phantom Stock Plan

      By its own terms, the PSP's purpose

      is to promote the interests of the Corporations and their stockholder by
      aligning the interests of senior management of the Corporations with those
      of the stockholder, encouraging them to be employed by and to remain in
      the employ of the Corporations, providing them with additional incentives

                                           -4-
      for industry and efficiency and compensating them for services rendered
      to the Corporations.

Bull Moose Tube Co. Phantom Stock Plan (revised Feb. 21, 1991) (hereinafter
Phantom Stock Plan) § 1.1. The redemption value of the phantom shares reflects the
earnings performance of BMT, and the managers who received shares when the PSP
was established were those responsible for such performance. By establishing a nexus
between the shares' redemption value and management's achievements, the PSP gave
the participants "a stake in the performance of the Corporations." Id. § 1.2.

       The shares vested as to the original participants who were continuously
employed by BMT (all three plaintiffs here) one-third at a time, on the first, second,
and third anniversaries of the Award Date (October 18, 1988). See id. § 5.1. Once
vested, shares became payable at "redemption value" (as modified in the case of a
takeover) upon the happening of certain triggering events, such as retirement, disability,
death, termination without cause, or takeover. See id. §§ 1.4, 3.1, 8.1, 8.3. In addition,
original participants were permitted by the terms of the PSP to redeem their vested
shares, at their option, anytime after October 19, 1993 (five years after implementation
of the program), even if they were still employed by BMT. See id. § 8.3. If a
participant were to be terminated for cause or to resign voluntarily, his shares would
be redeemed only for "book value," an amount that was substantially less than
redemption value at the time the plaintiffs left employment with BMT. See id. § 8.2.

       The plaintiffs contend, and the District Court held, that the PSP is a pension plan
within the meaning of ERISA. An employee pension benefit plan is defined by ERISA
as "any plan, fund, or program . . . to the extent that by its express terms or as a result
of surrounding circumstances such plan, fund, or program -- (i) provides retirement
income to employees, or (ii) results in a deferral of income by employees for periods
extending to the termination of covered employment or beyond." 29 U.S.C. §
1002(2)(a) (1994). The Company argues that, because the PSP does not condition

                                            -5-
redemption of PSP shares upon an employee's termination and because its purpose is
not the deferral of income, it is not an ERISA plan but instead is properly characterized
as a non-ERISA bonus program. By regulation, the Secretary of Labor has specifically
excluded bonus programs from the definition of an employee pension benefit plan under
ERISA. See 29 C.F.R. § 2510.3-2(c). The regulation provides that "payments made
by an employer to some or all of its employees as bonuses for work performed" will not
come within the definition of an ERISA plan "unless such payments are systematically
deferred to the termination of covered employment or beyond, or so as to provide
retirement income to employees." Upon examination of the record, and applying the
law to the facts in this case, we hold that the PSP is not a pension plan within the
meaning of ERISA, but an excepted bonus program.6

       The PSP's statement of purpose describes an incentive plan, which also has the
objectives of furthering the interests of BMT and its owner, encouraging selected
managers to stay with BMT, and "compensating [those managers] for services rendered
to" BMT. Phantom Stock Plan § 1.1. Under the rather complicated formulas used to

      6
         The District Court's opinion answering the jurisdictional question and the
plaintiffs' brief on appeal deal at length with the question of whether the PSP is a "top
hat" plan. See Emmenegger v. Bull Moose Tube Co., 953 F. Supp. 292, 293-95 (E.D.
Mo. 1997); Brief of Appellees at 38-44. A so-called "top hat" plan is unfunded,
provides "deferred compensation for a select group of management or highly
compensated employees," and is exempted from certain ERISA requirements. 29
U.S.C. §§ 1051(2) (participation and vesting), 1081(a)(3) (funding), 1101(a) (fiduciary
responsibility) (1994). But a "top hat" plan must be an ERISA "plan" in the first
instance. (In Dep't of Labor Op. No. 98-02A (Mar. 6, 1998), a representative of the
Department of Labor agrees with that conclusion, noting that it is unnecessary to
determine if an incentive plan is a top-hat plan, because the incentive plan is not a
pension plan in the first instance.) We therefore focus our analysis on the broader
question, which is determinative of the jurisdictional issue: is the PSP a pension plan
within the meaning of ERISA? (There is no suggestion from either the parties or the
District Court that the PSP might be a welfare plan, and our research convinces us that
this is not a possibility.)
                                           -6-
calculate the dollar value of a participant's shares at any given time, the redemption
value of the phantom stock is tied inextricably to BMT's current performance.7 The
redemption value formula presupposes that, if the managers have done their jobs well,
BMT's earnings will have been enhanced. In that situation, the shares will be more
valuable to the managers. The PSP thus sets up a classic "bonus" situation: reward
(higher cash value) for superior performance (higher corporate earnings).

       Further, the shares, or more accurately the redemption thereof, cannot be
characterized as "payments [that] are systematically deferred" to termination or "so as
to provide retirement income." 29 C.F.R. § 2510.3-2(c). This is true whether one
looks to the express language of the PSP or to the circumstances surrounding the
program. It may be that the stock provides post-employment income for some eligible
participants, especially if they do not opt to redeem their shares during their tenure with
BMT. Nevertheless, the PSP has allowed vested participants, such as the plaintiffs, at
their option, to redeem their shares -- for full redemption value -- at any time since
October 1993 and for any reason. See McKinsey v. Sentry Ins., 986 F.2d 401, 406
(10th Cir. 1993) ("The plan permits a sales representative to withdraw the vested
portion of her/his allocations at any time during the course of her/his employment; it
does not provide for the systematic deferral of payment."). In this case, the record
demonstrates that certain participants in the program redeemed shares while still
employed by BMT, providing present income to those participants. There is no
indication in the record that PSP redemptions were regularly deferred or that the
program's purpose was to provide retirement income to the participants. Clearly, the
PSP was designed with the hope that it would provide income to the participants, but
it was not designed "systematically" to provide retirement income rather than present
income.

      7
        For details on the calculation of share value, see the Phantom Stock Plan's
definitions of "Redemption Value" and "Book Value Per Share."
                                            -7-
       Though the PSP's vesting requirement could result in the deferral of a portion of
any earned incentive until a participant's termination or retirement (as did the initial
five-year delay in payout for original participants), such a deferral would only occur by
happenstance. In fact, the stated purpose of the vesting requirement reinforces our
conclusion that the PSP is a non-ERISA bonus plan. According to the PSP, "[t]he
vesting schedule for awards, by conditioning awards upon continued service with the
Corporations, seeks to insure continuity of management of the Corporations and further
relates awards to service to the Corporations." Phantom Stock Plan at § 1.3 (emphasis
added). The purpose of the vesting provision is to strengthen the connection between
service and reward. The goal is not to defer payment to the participant until
termination or retirement, and the record indicates that the vesting requirement in fact
did not have that result. See Dep't of Labor Op. No. 84-12A (Feb. 23, 1984)
("[B]ecause the Plan does not condition distribution of the amount deferred [into
phantom stock shares] upon termination of employment, retirement, or any other
circumstances other than the passage of a fixed period of time, the Plan is not by its
express terms an employee pension benefit plan within the meaning of . . . ERISA.")
(emphasis added).8

        While a participant may postpone his redemption of PSP shares until termination
or retirement, this is strictly at the option of the participant, and there is nothing in the
terms of the program that would result in such deferral with the purposeful consistency
required to make deferral systematic. See Dep't of Labor Op. No. 98-02A (Mar. 6,
1998) (noting "surrounding circumstances" that may convert a plan that is a "bonus
program" on its face into an ERISA pension plan, none of which are found in BMT's
PSP). There are, for example, neither requirements set nor penalties threatened or

       8
        In this opinion, we do not cite Department of Labor opinion letters as
controlling authority. Nevertheless, we conclude that those portions of the letters to
which we refer reflect a correct understanding of the law in this area. To that extent,
they provide useful illustrations of the application of that law.
                                             -8-
imposed for a participant's redemption of PSP shares before his termination or
retirement, once the shares have vested (and after the initial five-year start-up period
expired in 1993). Nothing in the terms of the PSP will regularly compel participants
to wait until they leave BMT to cash in their shares. The most profitable moment for
PSP participants to redeem their phantom shares does not depend upon when they end
employment with BMT, but upon when BMT's earnings are at their highest point. Just
as with the stock market, a participant might find it to his greater benefit to cash out his
shares, at least in part, when he believes BMT's earnings may have peaked, rather than
to hold on to them until he leaves BMT.

       On these facts, we must hold that the PSP is not a pension plan within the
meaning of ERISA. Therefore, there is no federal question jurisdiction under ERISA
for the plaintiffs' claims for failure to pay benefits under the program. Likewise there
is no federal question jurisdiction for the plaintiffs' ERISA claims under 29 U.S.C.
§ 1140 (1994) alleging retaliation for exercising rights under the PSP. Accordingly, we
vacate the PSP portion of the District Court's judgment, dismiss the PSP portion of the
appeal for lack of subject matter jurisdiction, and remand. The purposes of the remand
are discussed in part IV of this opinion.

                                 B. The Severance Plan

       The BMT severance plan, dated April 1, 1984, revised February 18, 1987, and
attached as an exhibit to the plaintiffs' complaint, reads as follows:

       It is the Company's policy to provide severance pay to employees who are
       terminated for reasons other than disciplinary and who have given the
       Company excellent service during their employment at Bull Moose Tube.

       This policy is to serve as a guide to determine severance pay and provide
       consistency in the treatment of those good employees that deserve special
       attnetion [sic] at their termination of service.
                                            -9-
These statements are followed by a table setting out "the maximum amount of
severance pay to be granted," based on years of service. For those who qualify, the
payment is to be made in a lump sum upon termination. The plaintiffs argue, and the
District Court concluded, that the BMT severance plan is an employee welfare benefit
plan governed by ERISA. After de novo review, we agree.

       An "employee welfare benefit plan" is "any plan, fund, or program . . . to the
extent that such plan, fund, or program was established or is maintained for the purpose
of providing for its participants," inter alia, severance benefits. 29 U.S.C. § 1002(1)(B)
(1994); see also Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 7 n.5 (1987)
(explaining how severance benefits come within the definition of an employee welfare
benefit plan). But not every policy that provides for the payment of severance benefits
is necessarily an ERISA plan. As the Supreme Court has noted, ERISA was intended
to provide for the federal regulation of plans, not merely benefits. See Fort Halifax,
482 U.S. at 11 (discussing ERISA preemption of state law). ERISA will be implicated,
then, only if the benefits involved are administered according to a plan of some sort.
In other words, ERISA regulates only those "benefits whose provision by nature
requires an ongoing administrative program to meet the employer's obligation." Id.
The parties disagree as to whether Emmenegger and Ritzie have made an adequate
showing of an "ongoing administrative program" to implicate ERISA and thus to invoke
the jurisdiction of the federal courts on their claims for severance benefits.

         Fort Halifax is the seminal Supreme Court case on whether a severance plan
is an ERISA-governed welfare benefit plan. The "plan" at issue in that case was a state
statute that required employers to make severance-type payments to employees who
lost their jobs as the result of a company's shutdown of a facility. A company would
make payment -- if at all -- only once, on the occasion of a shutdown. The Court held
that the state statute did not "relate to" an employee benefit plan because there was no
ERISA "plan," and therefore the state law was not preempted by ERISA. Under the
                                           -10-
BMT severance plan, however, no single event triggers a one-time payment of benefits
to all participants. Employees eligible for benefits under BMT's plan might be
terminated singly or in groups of indeterminate size. Terminations that qualify
employees for severance benefits could take place at any time, and such terminations
are likely to recur for as long as BMT has employees. See Tischmann v. ITT/Sheraton
Corp., 145 F.3d 561, 566 (2d Cir.), cert. denied, 119 S. Ct. 406 (1998). The severance
plan as written contemplates a continuing, albeit possibly sporadic, need for processing
requests for benefits and making payments.

       Further, benefits are to be paid only to those employees who are not terminated
for disciplinary reasons and who also have given excellent service to BMT during their
employment. Inquiry obviously is required into both the reason for the discharge and
the history of the employee's service to BMT, and then judgments must be made. Were
there not some discretion to be exercised, it would be unnecessary for the written
policy "to serve as a guide to determine severance pay." Severance benefits are not to
be awarded automatically and mechanically upon termination; the decision to pay
benefits is made on an individual, ongoing basis, after exercising the discretion
described in the plan. See Fontenot v. NL Indus., Inc., 953 F.2d 960, 963 (5th Cir.
1992) (noting that "severance plan requires no administrative scheme because those
employees included in the plan were to receive benefits upon termination regardless of
the reason for termination").

       The Company would have us conclude that Emmenegger and Ritzie have made
an insufficient showing of the required "ongoing administration" because they have
done little more to create a record than submit a copy of the one-page plan. But having
considered the plan, we do not see that any additional evidence is required,
notwithstanding the brevity of the document describing the plan. On its face, the plan
makes it clear that in each case someone must make an ad hoc judgment about the
reason for the employee's termination and evaluate the quality of that person's service
to BMT. We reject the suggestion that Emmenegger and Ritzie were required to show

                                          -11-
who made such decisions and the thought process involved in those decisions in order
to show the need for ongoing administration. Absent some indication in the record (and
there is none) that severance payments were virtually automatic or that the standards
set out in the plan for determining benefits were in practice disregarded, we cannot
conclude that the decisions regarding eligibility for severance benefits and the amount
of such benefits are made without the exercise of judgment as described in the plan.
The document speaks for itself, as do the facts of this case: someone had to decide that
Emmenegger and Ritzie were not eligible for severance benefits under BMT's plan, but
that Riley was eligible under the identical terms of Caparo Steel's severance plan.

       Although it is plain from the case law in this area that no single factor is
determinative on this issue, we conclude, considering all the relevant circumstances,
that Emmenegger and Ritzie have met their burden of proving that the severance plan
is an employee welfare benefit plan under ERISA. Accordingly, the District Court
properly exercised federal subject matter jurisdiction over the plaintiffs' ERISA claims
for severance plan benefits.

                                           III.

       The Company does not specifically challenge the merits of the District Court's
severance plan decision in its briefs on appeal, nor does it seek relief from that portion
of the judgment (aside from its argument that the court lacked federal subject matter
jurisdiction). See, e.g., Brief of Appellants at 82-83; Reply Brief of Appellants at 39
n.15. We now have determined that the District Court did not lack subject matter
jurisdiction with respect to the claims made under the severance plan. As a result, the
judgment for Emmenegger and Ritzie on their claims for severance benefits remains in
place and cannot be challenged by the Company at some later time.

                                           -12-
                                            IV.

       Anticipating our decision that the District Court had federal subject matter
jurisdiction over the plaintiffs' claims for severance benefits but not over the plaintiffs'
PSP claims, the parties have made suggestions to this Court regarding the course to be
followed either in concluding the case ourselves or in instructing the District Court as
to how it should go about disposing of the case on remand. Without exception, we
think the issues raised should be addressed by the District Court in the first instance.
But we do offer some observations, for whatever value they may have to that court and
to the parties.

       First, there is the question of whether the plaintiffs' ERISA claims for benefits
under the PSP and for damages for retaliatory discharge can be recast as state-law
claims. We note that the state-law claims originally in the plaintiffs' complaint were
dismissed not because they failed to state a claim but because the District Court held
that they were preempted by ERISA. Since the PSP is not an ERISA plan, there is no
ERISA preemption of state-law claims relating to that plan. It will be for the District
Court to decide, in its discretion (and upon the plaintiffs' motion), whether the
complaint may be amended to incorporate state-law claims for benefits under the PSP
and for damages for retaliatory discharge.

       Assuming the plaintiffs' PSP claims can be revived, in whole or in part, as state-
law counts, the question then becomes whether the District Court can exercise
supplemental jurisdiction over them. The Company suggests that our affirmance of the
District Court's exercise of federal subject matter jurisdiction over the severance-plan
claims means that those claims have been "finally adjudicated" and hence there is no
jurisdiction to supplement on remand. Reply Brief of Appellants at 39 n.15. We are
not at all sure that the suggestion is correct. For one thing, the District Court will have
before it the question of how much it should reduce the attorney fees it has awarded to
the plaintiffs under ERISA. These fees must be reduced on remand in light of our

                                            -13-
decision holding that the PSP claims are not ERISA claims. This fee-reducing exercise
surely will present a "live" federal question. In addition, on remand the District Court
will regain jurisdiction over its ERISA judgment for Emmenegger and Ritzie on their
severance-plan claims. Accordingly, it seems likely to us that the District Court can,
in its discretion, exercise supplemental jurisdiction over PSP-based state-law claims.
See 28 U.S.C. § 1367 (1994); see also Pioneer Hi-Bred Int'l v. Holden Found. Seeds,
Inc., 35 F.3d 1226, 1242 (8th Cir. 1994). Given the District Court's "vast expenditure
of resources" on this case to date, it is hard to fathom how the District Court would
abuse its "largely unrestricted" discretion by retaining jurisdiction over PSP-based
state-law claims. Pioneer Hi-Bred Int'l, 35 F.3d at 1242 (citation to quoted case
omitted). One needs only to read the District Court's detailed orders and opinions in
this case, published and unpublished, and to consider the care with which the court has
sorted out the complicated facts and reached its conclusions in order to know that it
would be a colossal waste of the court's -- and the parties' -- time and effort if the
District Court were unable to assume responsibility for the final disposition of any PSP-
based state-law claims the plaintiffs may assert. See Cossette v. Minnesota Power &
Light, 188 F.3d 964, 973 (8th Cir. 1999) (noting that discretion of district court in
deciding whether to exercise supplemental jurisdiction "should be guided by
considerations of judicial economy, convenience, and fairness to the litigants").

       The Company also contends that, in any event, any PSP-based state-law claims
asserted by Riley could not be adjudicated in federal court because he had no ERISA-
based severance claim, since he was paid severance benefits upon his termination under
the terms of the Caparo Steel severance plan. The Company cites Finley v. United
States, 490 U.S. 545 (1989), for the proposition that "pendent party jurisdiction over
parties as to which no basis for federal jurisdiction exists is improper." Reply Brief of
Appellants at 39 n.15 (emphasis added). Since the 1990 enactment of 28 U.S.C.
§ 1367, Finley's continued viability on this point is open to doubt in the situation where,
as here, the court's original jurisdiction is based on a federal question, not on the
diversity of the parties. See Kaiser v. Memorial Blood Ctr., 977 F.2d 1280, 1283 n.1

                                           -14-
(8th Cir. 1992); see also 28 U.S.C. § 1367(a) ("[S]upplemental jurisdiction shall
include claims that involve the joinder or intervention of additional parties.").
Moreover, we note that Riley's ability to pursue his claims in the District Court may not
turn on pendent party jurisdiction. If the court exercises supplemental jurisdiction over
PSP-based state-law claims made by Emmenegger and Ritzie, then the question to be
explored on remand likely would be intervention by Riley, either as of right or on a
permissive basis, under Federal Rule of Civil Procedure 24.

        The Company mentions that it would have a right to a jury trial on the state-law
claims, and that the rationale for the District Court's exercise of supplemental
jurisdiction would disappear if such a trial were held. The suggestion is that the goals
of judicial economy, convenience, and fairness would not be furthered by having a jury
trial in federal court on PSP-based state-law claims, as the litigation essentially would
go back to square one. We presume that asserting a right to a jury trial is not idle talk
and that the Company, having considered the wisdom of this strategy, really would
prefer to have the facts of this case decided by a jury. Being familiar with the record
created in the bench trial that already has occurred, we have doubts about the
advisability of this strategy. But in any event, if the state-law claims must go before
a jury, the District Court's intimate familiarity with this litigation almost certainly will
result in a more expeditious conclusion to the case than one following a trial process
begun anew in state court.

       This case already has consumed large amounts of public and private resources.
We have detected no apparent error in our review of the District Court's decision under
ERISA on the merits of the PSP claims. In these circumstances, the District Court
would appear to have a marked advantage in resolving PSP claims founded on state law
in a timely and efficient manner.

                                            -15-
                                           V.

       The District Court properly exercised federal subject matter jurisdiction over the
ERISA claims of Emmenegger and Ritzie for severance benefits. The merits of the
District Court's disposition of those claims have not been challenged in this appeal, and
so the judgment for severance benefits must stand.

       The judgment of the District Court as to all three plaintiffs' purported ERISA
claims for PSP benefits and for damages for retaliatory discharge is vacated. Those
purported ERISA claims and this appeal as to those claims are dismissed for lack of
federal subject matter jurisdiction. The case is remanded to the District Court for
further proceedings consistent with this opinion.

      A true copy.

             Attest:

                 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                          -16-