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Frommert v. Conkright

United States Court of Appeals, Second Circuit

January 14, 2019

PAUL J. FROMMERT, DONALD S. FOOTE, THOMAS I. BARNES, RONALD J. CAMPBELL, FRANK D. COMMESSO, WILLIAM F. COONS, JAMES D. GAGNIER, BRIAN L. GAITA, WILLIAM J. LADUE, GERALD A. LEONARDO, JR., FRANK MAWDESLEY, HAROLD S. MITCHELL, WALTER J. PETROFF, RICHARD C. SPRING, PATRICIA M. JOHNSON, F. PATRICIA M. TOBIN, NANCY A. REVELLA, ANATOLI G. PUSCHKIN, WILLIAM R. PLUMMER, MICHAEL J. MCCOY, ALAN H. CLAIR, LARRY J. GALLAGHER, NAPOLEON B. BARBOSA, ALEXANDRA SPEARMAN HARRICK, JANIS A. EDELMAN, PATRICIA H. JOHNSTON, KENNETH P. PARNETT, JOYCE D. CATHCART, FLOYD SWAIM, JULIE A. MCMILLIAN, DENNIS E. BAINES, RUBY JEAN MURPHY, MATTHEW D. ALFIERI, IRSHAD QURESHI, RICHARD C. CRATER, GAIL J. LEVY, JOHN A. WILLIAMS, CRYSTAL THORTON, CHARLES R. DRANNBAUER, WILLIAM M. BURRITT, JANICE ROSS HEILER, JOSEPH MCNEIL, THOMAS F. MCGEE, VINCENT G. JOHNSON, F. COLT HITCHCOCK, RONNIE TABAK, MARTHA LEE TAYLOR, KATHY FAY THOMPSON, MARY BETH ALLEN, CRAIG SPENCER, LINDA S. BOURQUE, THOMAS MICHAEL VASTA, FRANK C. DARLING, CLARK C. DINGMAN, CAROL E. GANNON, JOSEPH E. WRIGHT, DAVID M. ROHAN, DAVID B. RUDDOCK, CHARLES HOBBS, CHARLES ZABINSKI, CHARLES J. MADDALOZZO, JOYCE M. PRUETT, WILLIAM A. CRAVEN, MAUREEN A. LOUGHLIN JONES, KENNETH W. PIETROWSKI, BONNIE COHEN, LAWRENCE R. HOLLAND, GAIL A. NASMAN, STEVEN D. BARLEY, DONNA S. LIPARI, ANDREW C. MATTELIANO, MICHAEL HORROCKS, CANDICE J. WHITE, KATHLEEN E. HUNTER, JOHN L. CRISAFULLI, DEBORAH J. DAVIS, BRENDA H. MCCONNELL, KATHLEEN A. BOWEN, ROBERT P. CARANDDO, TERENCE J. KURTZ, WILLIAM J. CHESLOCK, THOMAS E. DALTON, LYNN BARNSDALE, BRUCE D. CRAIG, GARY P. HARDIN, CLAUDETTE M. LONG, DALE PLATTETER, MARY ANN SERGEANT, MOLLY WHITE KEHOE, DAVID K. YOUNG, LESLIE ANN WUNSCH, RICHARD J. GLIKIN, EUGENE H. UPDYKE, MICHAEL R. BENSON, ALVIN M. ADAMS, RONNIE KOLNIAK, JAMES J. FARRELL, ROBERT L. BRACKHAHN, BENJAMIN C. ROTH, CARMEN J. SOFIA, KATHLEEN W. LEVEA, FREDERICK SCACCHITTI, PAUL DEFINA, JAMES G. WALLS, Plaintiffs-Appellants,
v.
SALLY L. CONKRIGHT, XEROX CORPORATION PENSION PLAN ADMINISTRATOR, PATRICIA M. NAZEMENTZ, XEROX CORPORATION PENSION PLAN ADMINISTRATOR, XEROX CORPORATION, LAWRENCE M. BECKER, XEROX CORPORATION PLAN ADMINISTRATOR, XEROX CORPORATION RETIREMENT INCOME GUARANTEE PLAN, LAWRENCE BECKER, XEROX CORPORATION PLAN ADMINISTRATORS, Defendants-Appellees.

          Argued: April 18, 2018

         The plaintiffs, a group of current and former employees of Xerox Corporation, appeal the decisions of the United States District Court for the Western District of New York (Larimer, J.) ordering the defendants, Xerox and various parties tied to its retirement plan, to recalculate the plaintiffs' retirement benefits as a matter of equitable reformation and to pay prejudgment interest at the federal prime rate. The plaintiffs argue that both awards are inadequate. We AFFIRM.

          Elizabeth R. Brannen (Peter K. Stris, Brendan S. Maher, on the brief), Stris & Maher LLP, Los Angeles, CA; Shaun P. Martin, University of San Diego School of Law, San Diego, CA, for Plaintiffs- Appellants.

          Margaret A. Clemens (Pamela S.C. Reynolds, on the brief), Littler Mendelson, P.C., Fairport, NY, for Defendants-Appellees.

          Before: KEARSE, CABRANES, and LOHIER, Circuit Judges.

          LOHIER, CIRCUIT JUDGE

         The principal issue in this appeal is whether the United States District Court for the Western District of New York (Larimer, J.) awarded an adequate equitable remedy for violations under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1101 et seq., related to Xerox Corporation's pension plan (the "Plan"). The plaintiffs-appellants ("Plaintiffs") "are Xerox employees who left the company in the 1980's, received lump-sum distributions of retirement benefits they had earned up to that point, and were later rehired." Conkright v. Frommert, 559 U.S. 506, 510 (2010). "The dispute giving rise to this case concerns how to account for [the Plaintiffs'] past distributions when calculating their current benefits-that is, how to avoid paying [the Plaintiffs] the same benefits twice." Id. The defendants-appellees are Xerox, the Plan, and individually named retirement plan administrators (individually and collectively, the "Plan Administrator"). In our most recent decision in this case we determined that the Plan Administrator's method of calculating the Plaintiffs' current benefits violated ERISA's notice requirements and therefore could not be applied to the Plaintiffs' benefits. Frommert v. Conkright, 738 F.3d 522, 531-34 (2d Cir. 2013) ("Frommert III"). We remanded to the District Court to fashion, in its discretion, an equitable remedy providing appropriate retirement benefits to the Plaintiffs (we refer to these benefits as "New Benefits"). Id. at 534.

         Selecting the equitable remedy of reformation, the District Court held that New Benefits should be calculated as if the Plaintiffs were newly hired on their return to Xerox. Frommert v. Becker, 153 F.Supp.3d 599, 605-07, 615- 17 (W.D.N.Y. 2016) ("January 2016 Decision"). In a separate decision and order, the District Court also determined that the Plaintiffs are entitled to prejudgment interest at the federal prime rate. Frommert v. Becker, 216 F.Supp.3d 309, 316 (W.D.N.Y. 2016) ("November 2016 Decision").

         We affirm.

         BACKGROUND

         We assume familiarity with our three prior decisions in this long- running case, as well as the Supreme Court's decision in Conkright. See Conkright, 559 U.S. 506; Frommert III, 738 F.3d 522; Frommert v. Conkright, 535 F.3d 111 (2d Cir. 2008) ("Frommert II"); Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006) ("Frommert I"); see also Testa v. Becker, 910 F.3d 677, 679- 81 (2d Cir. 2018) (describing litigation history). We refer to the facts, history, and record of these and other prior proceedings only as necessary to explain our decision to affirm.

         Throughout this litigation, the Plaintiffs have claimed that the Plan Administrator improperly calculated New Benefits under the Plan in violation of ERISA. See, e.g., Frommert v. Conkright, 328 F.Supp.2d 420, 423 (W.D.N.Y. 2004). The District Court initially granted summary judgment in favor of the Plan Administrator. Id. at 424, 439. We vacated, concluding that the Plan Administrator's method of accounting for distributions of prior benefits, and its resulting calculation of New Benefits, violated the Plaintiffs' rights under ERISA. Frommert I, 433 F.3d at 256-57.

         In a subsequent decision, we reviewed the District Court's method of calculating New Benefits as a matter of plan interpretation and concluded that the method was proper under the Plan. Frommert II, 535 F.3d at 117-18. We further held that the District Court could refuse to defer to the Plan Administrator's interpretation of the Plan. Id. at 119. The Supreme Court reversed the latter ruling, holding, as relevant here, that we had "erred in holding that the District Court could refuse to defer to the Plan Administrator's interpretation of the Plan . . . simply because [we] had found a previous related interpretation by the [Plan] Administrator to be invalid." Conkright, 559 U.S. at 522. On remand, the District Court held that the Plan Administrator's proposed method of calculating New Benefits by offsetting the lump sum distributions made to the Plaintiffs when they initially left Xerox reflected a reasonable interpretation of the Plan. Frommert v. Conkright, 825 F.Supp.2d 433, 438-43 (W.D.N.Y. 2011). It also concluded that the Plan adequately notified participants of the offset. See id. at 444-47.

         In our most recent decision, we disagreed with the District Court. Frommert III, 738 F.3d at 531-34. We held that the Plan Administrator's proposed offset approach was based on an unreasonable interpretation of the Plan and that the Plan and its related documents, as interpreted and applied by the Plan Administrator, violated ERISA's notice provisions. Id. at 529-34. We therefore instructed the District Court to first determine on remand whether there existed an "appropriate" equitable remedy available to resolve the Plaintiffs' claims without resorting to plan interpretation. Id. at 534. "If the district court holds that the Plan's notice violations justify the imposition of an equitable remedy," we explained, "such a remedy will provide the relief that [the] Plaintiffs seek." Id. We also instructed that "if [the District Court] finds that no equitable remedy is available, it should ...


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