Bublitz v. E.I. Du Pont De Nemours & Co.

202 F.R.D. 251, 2001 U.S. Dist. LEXIS 15515, 2001 WL 902367
CourtDistrict Court, S.D. Iowa
DecidedJuly 25, 2001
DocketNo. 4-00-CV-90247, 4-00-CV-90286, 4-00-CV-90375
StatusPublished
Cited by14 cases

This text of 202 F.R.D. 251 (Bublitz v. E.I. Du Pont De Nemours & Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bublitz v. E.I. Du Pont De Nemours & Co., 202 F.R.D. 251, 2001 U.S. Dist. LEXIS 15515, 2001 WL 902367 (S.D. Iowa 2001).

Opinion

MEMORANDUM OPINION AND ORDER

PRATT, District Judge.

This matter is before the Court on Plaintiffs’ Motion for Class Certification in the lead case. For the reasons that follow, the Court grants Plaintiffs’ motion in part and denies it in part.

I. BACKGROUND

Originally, the Plaintiffs in this case were Ann Bublitz (“Bublitz”) and Dorothy Pierce (“Pierce”). They sought to represent themselves, as well as all those similarly situated with respect to the benefit plan at issue, against the Defendants, Pioneer Hi-Bred International, Inc. (“Pioneer”) and E.I. duPont de Nemours and Company (“DuPont”). In their Complaint, filed April 21, 2000, Plaintiffs alleged four counts under the Employee [253]*253Retirement Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.: Count I was a claim for enforcement and declaration of plan benefits against Pioneer and DuPont; Count II was a breach of fiduciary duty claim against Pioneer and DuPont; Count III was a claim against DuPont for interference with protected rights; and Count IV was an equitable relief claim against Pioneer and DuPont asking the Court to toll the three-year period during which participants are entitled to exercise their rights under the plan for the pendency of this action.

The benefit plan at issue in this case is called the Change in Control Severance Compensation Plan for Management Employees (“Change in Control Plan”). This plan was created by Pioneer at least in part to protect itself from the adverse effects of attempted takeovers. To that end, the plan provides generous severance benefits in the event of a takeover in order to encourage people to work in an environment where takeover threats were real.

More than just a takeover, or “Change in Control,” is necessary to entitle an employee to benefits under the plan though. The employee must be subject to an involuntary termination, which the plan defines as a termination other than a termination for cause or the participant’s resignation or retirement for a “Stated Good Reason.” Under Section 2.1(t) of the plan, a “Stated Good Reason” is “a written determination by a participant that he [or she] reasonably and in good faith cannot continue to fulfill the responsibilities for which he [or she] was employed.” Plaintiffs refer to this as a “subjective” trigger. The plan also identifies a number of specific actions by Pioneer that give rise to a conclusive presumption that the participant’s determination is reasonable and in good faith, which Plaintiffs refer to as “objective” triggers. These objective triggers include the following: (a) a reduction in the participant’s base salary; (b) a failure to continue in effect any bonus plan; (c) a failure to continue any benefit or compensation plan; (d) an assignment to the participant of any duties inconsistent with the participant’s duties, responsibilities, or status immediately prior to the Change in Control, or changes in the participant’s reporting responsibilities, title, or office; and (e) a requirement that the participant change the location of his or her job or office, so that the participant will be based more than 30 miles away from where he or she was based.1

Claims for severance benefits must be made in writing to the “Severance Committee” within three years of the Change in Control. An eligible participant is then entitled to receive a lump-sum cash payment equal to three times his or her compensation, plus health, dental, and life insurance coverage for twelve months. In October of 1999, DuPont purchased the remaining 80% of Pioneer that it did not already own and effected a Change in Control within the meaning of the plan.

Plaintiffs filed their Motion for Class Certification on August 8, 2000. Defendants requested additional time to conduct discovery on the named Plaintiffs, Bublitz and Pierce. Defendants finally filed their resistance brief on December 22. Plaintiffs filed their reply brief on February 1, 2001. In their reply brief, Plaintiffs stated that Bublitz had resigned and would no longer seek to serve as a class representative. Then, in a letter dated March 14, Defendants notified the Court that Pierce had also resigned. Plaintiffs then amended their Complaint to add Robert York (“York”) as a named Plaintiff. Defendants then requested time to conduct discovery on York.

In the meantime, Defendants had filed separate motions to dismiss and submitted a “Retention Proposal” to the proposed class members. As indicated by its name, the Retention Proposal was designed to provide participants with an incentive to remain at Pioneer. It offered each participant a stock option grant valued at three times the employee’s total compensation as of October 1, 1999. The options would then become vested on October 1, 2002, if the employee was still employed by Pioneer. In' exchange for these [254]*254stock options, participants had to waive then-rights under the Change in Control Plan, accept a new Transitional Severance Plan (which provided benefits in certain circumstances when an employee suffers an involuntary termination before his or her stock options vest wherein the definition of “involuntary termination” is narrower than that in the Change in Control Plan), and agree not to participate in litigation regarding the Change in Control Plan. Although there was some dispute regarding the manner in which Defendants could communicate such an offer, the Court eventually allowed Defendants to present the Retention Proposal directly to the proposed class members, but only in writing. Defendants presented the Retention Proposal to the putative class members on September 29, 2000 and gave them until October 18, 2000 to accept it.

In their motions to dismiss, Pioneer and Dupont argued that the claims against them were not ripe. Dupont further argued that even if the claims are ripe, it is not a proper party. With no conclusion to the class certification issue in sight, the Court went ahead and ruled on Defendants’ motions on March 26, 2001. The Court held that Dupont was not a proper party to Counts I, III, and IV, but that it was a proper party to Count II. As to Counts I, II, and IV against both Defendants, the Court held the claims of those who signed the Retention Proposal and those who received benefits were not ripe, but that the claims of those who refused to sign the Retention Proposal or who were denied benefits were ripe.

Finally, on May 14, 2001, the Court issued an Order requesting that the parties inform the Court what else was needed before the Court ruled on Plaintiffs’ Motion for Class Certification and approximately how long it would take to accomplish it. In response, Defendants filed a supplemental brief. Plaintiffs, in response, requested additional time to provide the Court with information and argument regarding the impact of the “Shaw Pittman Opinion” and the “Blue Book,” which Magistrate Judge Shields had just recently ruled was discoverable. The Court granted Plaintiffs’ request and the Plaintiffs filed their supplemental brief on June 18. Defendants, in turn, filed a response brief. The matter is now fully submitted.

II. DISCUSSION

Plaintiffs present two separate issues. First, Plaintiffs request that the Court reconsider its ruling on the claims of the Retention Proposal signers in light of recently discovered evidence.

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Bluebook (online)
202 F.R.D. 251, 2001 U.S. Dist. LEXIS 15515, 2001 WL 902367, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bublitz-v-ei-du-pont-de-nemours-co-iasd-2001.