Raymond v. Mobil Oil Corp.

983 F.2d 1528, 1993 WL 7953
CourtCourt of Appeals for the Tenth Circuit
DecidedJanuary 20, 1993
DocketNo. 92-1298
StatusPublished
Cited by65 cases

This text of 983 F.2d 1528 (Raymond v. Mobil Oil Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Raymond v. Mobil Oil Corp., 983 F.2d 1528, 1993 WL 7953 (10th Cir. 1993).

Opinion

STEPHEN H. ANDERSON, Circuit Judge.

In this class action involving the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461, defendant/appellant Mobil Oil Corporation appeals under 28 U.S.C. § 1292(b) from an interlocutory order of the district court denying Mobil’s motion for summary judgment on certain claims of plaintiffs, former employees of Mobil.1 Plaintiffs’ action arose out of the same pension plan amendment involved in a previous decision of this court, Mitchell v. Mobil Oil Corp., 896 F.2d 463 (10th Cir.), cert. denied, 498 U.S. 898, 111 S.Ct. 252, 112 L.Ed.2d 210 (1990), as well as a recent decision of the Fifth Circuit, Christopher v. Mobil Oil Corp., 950 F.2d 1209 (5th Cir.), cert. denied, — U.S. -, 113 S.Ct. 68, 121 L.Ed.2d 35 (1992). Because we conclude that plaintiffs are not “participants” in an ERISA plan, and therefore lack standing to sue under ERISA, we reverse the district court’s denial of Mobil’s motion for summary judgment and remand for entry of summary judgment in favor of Mobil.

BACKGROUND

The essential undisputed facts relevant to this appeal are set forth in the Mitchell and Christopher opinions. We quote at some length from each:

Until 1977, Mobil provided retirement benefits only in the form of an annuity. In 1977, Mobil added a “lump-sum option” to its retirement plan, the terms of which, for the purposes of this case, appear in the Retirement Plan of Mobil Oil Corporation as of January 1, 1984 (the Plan). Under the Plan, an employee could elect to receive a lump-sum payment which had the same equivalent actuarial value, discounted at 5%, as the annuity. In the case of early retirement, [1530]*1530the Plan reduced the lump-sum payment by 5% for each year of retirement prior to the age of sixty. To qualify for the lump-sum- option, an employee had to elect this option prior to retirement; had to be over fifty-five; and, at the date of his retirement, had to have a net worth of at least $250,000 or an accumulated lump sum in excess of $250,000.
In February 1984, Mobil amended the lump-sum option. It raised the discount rate prospectively from 5% to 9.5% and increased the eligibility threshold from $250,000 to $450,000. It also linked the new threshold to the Consumer Price Index (CPI), projecting a rise in the threshold to correlate with a rise in the CPI. These changes, however, would not take effect until at least six months after Mobil announced them, pending approval by the IRS. The delayed effective date gave employees who were eligible for the lump-sum payment under the old criteria, but who might not meet the new thresh-
old, the opportunity to decide whether to retire and take the lump sum or to continue working and accumulating more pension benefits with the possibility that they might not accumulate sufficient additional benefits to meet the new threshold requirement at the date of their retirement.

Mitchell, 896 F.2d at 466.

On July 16, 1984, Mobil sought a determination from the IRS that the plan as amended continued to meet the Internal Revenue Code’s requirements for favorable tax treatment, including the requirement that pension plans not “discriminate in favor of highly compensated employees.” 26 U.S.C. § 401(a)(4). In meetings in late September 1984, the IRS reviewing agent expressed concern that the amended plan could result in benefits favoring highly compensated employees, and indicated that he might need to seek technical advice from Washington. In response, Mobil adopted another plan amendment allowing Mobil, in its sole discretion, to waive the eligibility threshold in individual cases for valid cause shown. After insertion of this provision, the IRS issued to Mobil a favorable determination letter on November 23, 1984, noting that continued qualification of the plan would depend upon its effect in operation.
Mobil announced the IRS approval to its employees on December 21, 1984, but did not notify its employees of the waiver provision until well after expiration of the six-month window — October 1985.

Christopher, 950 F.2d at 1213.2

Porter Mitchell, the plaintiff in Mitchell, was a fifty-six year old Mobil employee who retired during the six-month window period, and took his retirement benefits under the lump-sum $250,000 option, for which he qualified.3 He brought suit, claiming that, by amending its retirement plan, Mobil had willfully violated the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634, by constructively discharging him because of his age, had “breached its fiduciary duties under ERISA and had violated ERISA’s anti-cutback provision, 29 U.S.C. § 1054(g), by retroactively limiting his right to the lump-sum benefit, an accrued benefit.” Mitchell, 896 F.2d at 466. He also claimed that Mobil violated § 510 of ERISA, 29 U.S.C. § 1140, which prohibits discrimination against or discharge of a participant in an ERISA-covered benefit plan “for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.”

After receiving a favorable jury verdict awarding him substantial damages, this [1531]*1531court reversed the award on appeal. We held that Mitchell had established that he had been constructively discharged because of his age, but that he had failed to prove that Mobil’s proffered justification for its plan amendment was a mere pretext for discrimination.4 Accordingly, his ADEA claim failed.

We held that Mitchell lacked standing under ERISA to challenge the plan amendment, and therefore reversed the award. We observed that the definition of “participant” under ERISA “excludes ... former employees who have received a lump-sum payment of all their vested benefits because ‘these erstwhile participants have already received the full extent of their benefits and are no longer eligible to receive future payments.’ ” Mitchell, 896 F.2d at 474 (quoting Joseph v. New Orleans Elec. Pension & Retirement Plan, 754 F.2d 628, 630 (5th Cir.), cert. denied, 474 U.S. 1006, 106 S.Ct. 526, 88 L.Ed.2d 458 (1985)). And we held Mitchell lacked standing as a former employee with a “reasonable expectation of returning to covered employment,” Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 117, 109 S.Ct. 948, 958, 103 L.Ed.2d 80 (1989), because he had never sought reinstatement.

The Christopher

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Bluebook (online)
983 F.2d 1528, 1993 WL 7953, Counsel Stack Legal Research, https://law.counselstack.com/opinion/raymond-v-mobil-oil-corp-ca10-1993.