The opinion of the court was delivered by: SHAPIRO
Plaintiffs, two hundred and sixteen former employees and current pensioners of CF&I Steel Corporation ("CF&I") bring this action against CF&I, the Non-Contributory Pension Plan of CF&I ("Non-Contributory Plan") and the Pension Plan of CF&I Steel Corporation ("Master Plan"), alleging in Counts One through Five various violations by one or more defendants of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and alleging in Count Six violations by all named defendants of Section 10(b) of the Securities and Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78j(b), Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. § 77q(a).
Plaintiffs are all former non-union employees of CF&I who had been employed at CF&I's facilities in Trenton and Roebling, New Jersey, or the widows of such former non-union employees, whose employment began on or before June 30, 1962. All of the plaintiffs are receiving benefits under the Non-Contributory Plan. (Stipulation, P 11). There are 216 named plaintiffs; 29 are now residents of the Eastern District of Pennsylvania, 169 are now residents of New Jersey, 5 are now residents of Florida, 2 are now residents of Colorado and 8 are now residents respectively of Arizona, Connecticut, Georgia, New York, North Carolina and Washington. Since the filing of the complaint, 3 named plaintiffs who were residents of New Jersey have died. (Stipulation, P 12).
CF&I is a Colorado Corporation, having its principal office in Pueblo, Colorado. CF&I is registered to do business in Pennsylvania, and was served with the summons and complaint in this action at its registered office in Philadelphia, Pennsylvania. Both the Non-Contributory Plan and the Master Plan are employee pension benefit plans maintained and sponsored by CF&I. (Stipulation, PP 2 and 3). The Non-Contributory Plan was established July 1, 1940 by John A. Roebling's Sons ("Roebling's"), a corporation acquired by CF& I in 1952. At that time, Roebling's owned and operated the manufacturing plants and offices in Trenton and Roebling, New Jersey. CF&I maintained the Non-Contributory Plan after acquiring Roebling's; the Plan was amended and restated many times thereafter. (Stipulation, P 5). CF&I established the Master Plan on March 1, 1950; the Plan was also amended and restated many times thereafter. (Stipulation, P 6).
CF&I has made and makes certain contributions to the trustee of the trusts forming part of the Plans to provide for the current and future costs of the pension benefits payable under the terms of each of those Plans.
Since October 1, 1967, Marine Midland Bank, which now has offices at New York, New York and Buffalo, New York, has been the trustee of each of the trusts forming a part of the Non-Contributory Plan and the Master Plan, respectively. From January 1, 1960 until September 30, 1967, the First Pennsylvania Banking and Trust Company, located in Philadelphia, Pennsylvania, had been the trustee of the trust forming part of the Non-Contributory Plan. (Stipulation, P 7).
Under each of these Plans, the trustee performed the following functions: received and deposited contributions to each Plan, invested the assets of each plan, paid expenses of the trust, and paid benefits under each Plan. (Stipulation, PP 37(a); 38(a)).
CF&I, as sponsor of the Plans, maintained records of the participants of each Plan, received claims for benefits, determined eligibility of claimants for benefits, determined benefit amounts, made determinations on appeals of claim denials, and authorized payment of benefits for each Plan. (Stipulation, PP 37(b); 38(b)).
Since 1969, when Crane Co. acquired more than 80% of the issued and outstanding stock of CF&I, CF&I has been a subsidiary of Crane Co. Crane Co., which has its executive offices at 300 Park Avenue, New York, New York, has plants, offices and facilities in King of Prussia, Montgomery County, Pennsylvania; Boyertown, Bucks County, Pennsylvania, and Ambridge, Beaver County, Pennsylvania. (Stipulation, PP 10, 50).
II. ALLEGATIONS OF THE COMPLAINT
Count One of plaintiffs' complaint alleges that the Non-Contributory Plan and the Master Plan were administered as one Plan, not as separate and distinct Plans, that all terms and conditions, all amendments made, and all increases in benefits were materially the same for both Plans, prior to August 1, 1975. On that date and thereafter, it is alleged that increases in pension benefits were granted those employees under the Master Plan, while plaintiffs, members of the Non-Contributory Plan, received no such increases. Plaintiffs aver that they are entitled to the same increases as the Master Plan retirees under the terms of the Plans and the provisions of ERISA.
Count Two, naming CF&I only, alleges that CF&I violated Sections 104 and 105 of ERISA, 29 U.S.C. §§ 1024, 1025, by failing to provide certain documents and information concerning the pension plans to plaintiff's attorney upon request. Plaintiffs seek the statutory penalty provided in Section 502(c) of ERISA, 29 U.S.C. § 1132(c).
In Count Three, naming CF&I only, plaintiffs allege that CF&I established a Hospital and Medical Insurance Plan and a Life Insurance Plan under which plaintiffs were entitled to certain benefits. Plaintiffs assert that CF&I granted increased benefits under those Plans to similarly situated retirees but not to them, in violation of ERISA.
In Count Four, naming all defendants, plaintiffs seek the award of reasonable attorney fees and costs of the action under Section 502(g) of ERISA, 29 U.S.C. § 1132(g).
In Count Five, plaintiffs allege that defendants CF&I and both Plans reduced the pension benefits of certain of the plaintiffs in retribution for the instant action. Plaintiffs claim this action constituted interference with their rights under Section 510 of ERISA, 29 U.S.C. § 1140.
Finally, in Count Six, plaintiffs allege that the three defendants violated Section 10b of the Exchange Act, 15 U.S.C. § 78j(b), Rule 10b-5 thereunder and Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a) by making misrepresentations and omissions of material facts concerning the increases in pension benefits to which plaintiffs would be entitled.
The defendants have denied the material allegations of each Count and asserted that plaintiffs received the benefits and the information to which they were entitled. Defendants also raise certain defenses by pretrial motion. The defendant Plans move to dismiss Counts One, Four, Five and Six of the complaint against them (the only Counts in which the Plans are named) for improper venue and lack of personal jurisdiction or, in the alternative, to transfer those Counts to the United States District Court for the Southern District of New York pursuant to 28 U.S.C. § 1406(a). The Plans further move to dismiss Counts One, Four, Five and Six of the complaint against them for improper service of process.
Defendant CF&I moves to dismiss Counts One, Four and Five of the complaint against it on the ground that venue is improper as to the Plans, that the Plans are indispensable parties to the claims asserted in those Counts or, in the alternative, to transfer those Counts to the United States District Court for the Southern District of New York pursuant to 28 U.S.C. § 1406(a). CF&I moves to dismiss Count Two for failure to state a claim against it under the applicable provisions of ERISA. CF&I moves to dismiss Count Three for failure to join indispensable parties, the Hospital and Medical Insurance Plan and Life Insurance Plan.
All defendants move to dismiss Count Six for failure to state a claim under the Securities laws.
In relation to the foregoing motions, the parties have entered into the following Stipulation:
It is hereby stipulated by counsel for plaintiffs and counsel for defendants that this action could have been brought against each of the three named defendants in the United States District Court for the Southern District of New York and that if the Court determines that venue as to any defendant is improper in the Eastern District of Pennsylvania, the action, except insofar as the Court may dismiss any count of the complaint on grounds ...