Romero v. Allstate Insurance

271 F.R.D. 96, 2010 U.S. Dist. LEXIS 111985, 2010 WL 4138693
CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 21, 2010
DocketCivil Action No. 01-3894
StatusPublished
Cited by22 cases

This text of 271 F.R.D. 96 (Romero v. Allstate Insurance) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Romero v. Allstate Insurance, 271 F.R.D. 96, 2010 U.S. Dist. LEXIS 111985, 2010 WL 4138693 (E.D. Pa. 2010).

Opinion

MEMORANDUM

BUCKWALTER, Senior District Judge.

Currently pending before the Court is the Motion by Plaintiffs Gene R. Romero, et al. to Compel Documents Related to the Release in Accordance with the Court’s April 7, 2010 Case Management Order. For the following reasons, the Motion is granted in part and denied in part.

I. FACTUAL BACKGROUND

The core of Plaintiffs’ putative class action, which has been pending since August 1, 2001, alleges that Allstate had originally employed a substantial number of insurance sales agents with the promise that they would have a “guaranteed income” and lifetime “financial security” through a compensation package that included a pension, profit sharing, and other employee benefit plans. (Sec. Am. Compl. ¶ 1.) In the 1990s, Allstate sought to get out from under the financial burden of this promise by attempting to persuade these employee agents to convert to independent contractor status, under the pretext that this status would give them more “entrepreneurial freedom” and a capacity for greater earning power. (Id. ¶ 2.) When only a few of the employee agents voluntarily relinquished their benefits, Allstate’s President and Chief Executive Officer, Edward M. Liddy, announced, in November 1999, that Allstate was instituting a “group reorganization program,” under which approximately 6,300 employee agents would have their employment contracts terminated by June 30, 2000. (Id. ¶ 3.) These employee agents would be permitted to remain with Allstate as independent contractors only if they signed a release waiving their statutory and common law rights (the “Mass Termination Program”). (Id.) Allstate also imposed a moratorium on rehiring the employee agents to fill sales and customer service positions for the company. (Id.) This Mass Termination Program, either intentionally or in effect, allowed Allstate to replace older employee agents with younger hires. (Id. ¶ 6.) To further evade legal accountability, Allstate presented the employee agents with a choice: (a) sign a prepared General Release and Waiver Agreement (“Release”) that waived the employee agents’ right to challenge the legality of Allstate’s conduct, and be permitted to either remain with Allstate as an independent contractor or leave Allstate and receive certain specified payments; or (b) not sign the Release and have their long-term relationship with Allstate severed entirely with none of the specified payments. (Id. ¶ 11.) Given these limited alternatives, over ninety-nine percent of the 6,300 employee agents signed the Release. (Id. ¶¶ 11-12.)

Several hundred of these employee agents, however, subsequently put Allstate on notice of allegations of class-wide age discrimination and/or retaliation by filing timely charges with the Equal Employment Opportunity Commission (“EEOC”) and equivalent state agencies. (Id. ¶ 20.) The EEOC issued a ruling in which it characterized Allstate’s conduct as “threats, coercion, and intimidation” and concluded that the Release was in violation of the ADEA. (Id. ¶ 12.) In light of the EEOC’s finding, Plaintiffs initiated the action in federal court on August 1, 2001, and, on October 18, 2001, Plaintiffs filed their First Amended Complaint, which set forth seven Counts, as follows: (1) a declaratory judgment deeming the Release invalid under Section 510 of the Employee Retirement and Income Security Act (“ERISA”), 29 U.S.C. § 1140, the Age Discrimination in Employment Act, 29 U.S.C. § 623, and common law; (2) individual and class claims of interference with employment and retaliation in violation of Section 510 of ERISA with respect to the Plaintiffs’ attainment and receipt of pensions and benefits under various employee benefit plans; (3) individual and class claims for retaliation in violation of Section 510 of ERISA; (4) “Discriminatory Termination and Retaliation in Violation of 29 U.S.C. § 623(a) and (d)” for both individuals and the [100]*100class; (5) individual and class claims for breach of the R830 contract, which governed the employment relationship between Allstate and a subclass of Plaintiffs; (6) individual and class claims for breach of the R1500 contract, which governed the employment relationship between Allstate and a different subclass of Plaintiffs; and (7) individual and class claims for breach of fiduciary duty. (First Am. Compl. ¶¶ 132-189.)

Discovery began in April 2002 and, over the course of the next several years, the parties engaged in extensive motion practice, including the filing of cross-motions for summary judgment and the debate over class certification issues. On March 30, 2004, the Honorable John Fullam, of the United States District Court for the Eastern District of Pennsylvania, entered a Declaratory Judgment holding, in part, that the Releases signed by the employee agents were voidable so long as the employee agents tendered back all benefits received in connection with signing those Releases (the “tender back” requirement). Romero v. Allstate Ins. Co., Nos. CIV.A.01-3 894, 01-6764, 01-7042, 2004 WL 692231, at *3-4 (E.D.Pa. Mar. 30, 2004). On June 20, 2007, however, Judge Fullam determined that he erred in his 2004 Declaratory Judgment and, as a result, vacated that decision. Romero v. Allstate Ins. Co., Nos. CIV.A.01-3894, 01-6764, 01-7042, 2007 WL 1811197, at *1 (E.D.Pa. Jun. 20, 2007). He further granted summary judgment in Allstate’s favor on the entirety of Plaintiffs’ Amended Complaint. Id.

On November 26, 2007, Plaintiffs appealed this ruling to the United States Court of Appeals for the Third Circuit. Reviewing the history of this case, the Third Circuit noted that Plaintiff had not received the benefit of full discovery as to issues regarding the validity of the Releases, and noted that these issues were dispositive as to the rest of Plaintiffs’ claims. Romero v. Allstate Ins. Co., 344 Fed.Appx. 785, 793 (3d Cir.2009) (“plaintiffs had a relatively short period of class discovery, and ... are entitled to discovery that is responsive to their requests related to the specific release-related issues the plaintiffs raised with the district court in their response to its March 21, 2007 Order.”). The court went on to order that the District Court allow additional discovery and briefing, fully address whether the Releases are valid, and if necessary, decide all of the underlying claims and issues. Id. at 794.

On January 29, 2010, after remand from the Court of Appeals, this case was reassigned to the docket of the undersigned. In accordance with this remand, the Court entered a new Case Management Order, dated April 7, 2010, setting forth both discovery and motion deadlines. Plaintiffs then filed a Motion to Amend the Complaint. On July 28, 2010, this Court permitted the filing of a Second Amended Complaint, which made three distinct changes, including: (1) the substitution of Joseph L. Benoit for “holdout” plaintiff Douglas F.

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271 F.R.D. 96, 2010 U.S. Dist. LEXIS 111985, 2010 WL 4138693, Counsel Stack Legal Research, https://law.counselstack.com/opinion/romero-v-allstate-insurance-paed-2010.