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Communication Workers of America, AFL-CIO v. Comcast Cable Communications

March 12, 2008


The opinion of the court was delivered by: David Stewart Cercone United States District Judge

Electronic Filing


Plaintiffs commenced this action seeking redress pursuant to the Employee Retirement Income Security Act ("ERISA") in conjunction with a decision to freeze participation in a defined contribution pension plan and thereafter cease future benefit accruals under the plan. Plaintiffs claim that they did not receive notice of defendants' amendments as required by ERISA and the adopted resolution eliminated benefits expressly protected under the plan. Presently before the court are cross motions for summary judgment. For the reasons set forth below, plaintiffs' motion for partial summary judgment will be denied, defendants' motion for summary judgment will be granted, and final judgment will be entered pursuant to Rule 58 against plaintiffs and in favor of defendants on all counts.

Federal Rule of Civil Procedure 56(c) provides that summary judgment may be granted if, drawing all inferences in favor of the non-moving party, "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Summary judgment may be granted against a party who fails to adduce facts sufficient to establish the existence of any element essential to that party's claim, and upon which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317 (1986). The moving party bears the initial burden of identifying evidence which demonstrates the absence of a genuine issue of material fact. When the movant does not bear the burden of proof on the claim, the movant's initial burden may be met by demonstrating the lack of record evidence to support the opponent's claim. National State Bank v. National Reserve Bank, 979 F.2d 1579, 1582 (3d Cir. 1992). Once that burden has been met, the non-moving party must set forth "specific facts showing that there is a genuine issue for trial," or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law. Matsushita Electric Industrial Corp. v. Zenith Radio Corp., 475 U.S. 574 (1986) (quoting Fed.R.Civ.P. 56 (a), (e)) (emphasis in Matsushita). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).

In meeting its burden of proof, the "opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. The non-moving party "must present affirmative evidence in order to defeat a properly supported motion" and cannot "simply reassert factually unsupported allegations." Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989). Nor can the opponent "merely rely upon conclusory allegations in [its] pleadings or in memoranda and briefs." Harter v. GAF Corp., 967 F.2d 846 (3d Cir. 1992). Likewise, mere conjecture or speculation by the party resisting summary judgment will not provide a basis upon which to deny the motion. Robertson v. Allied Signal, Inc., 914 F.2d 360, 382-83 n.12 (3d Cir. 1990). If the non-moving party's evidence merely is colorable or lacks sufficient probative force summary judgment must be granted. Anderson, 477 U.S. at 249-50; see also Big Apple BMW, Inc. v. BMW of North America, 974 F.2d 1358, 1362 (3d Cir. 1992), cert. denied, 113 S.Ct. 1262 (1993) (although the court is not permitted to weigh facts or competing inferences, it is no longer required to "turn a blind eye" to the weight of the evidence).

Plaintiffs essentially contend defendants failed to take sufficient steps to provide them with actual notice of the freeze and cessation of benefits as required by ERISA and as a result the freeze and cessation does not apply to them. They argue defendants have produced insufficient evidence to establish that notice to each of the individually-named plaintiffs was placed in the mail and as a result material issues of fact remain for trial.

The record does not reflect material issues of fact at Count One. To the contrary, it is clear that defendants sufficiently complied with the notification requirements under ERISA when participation in the Broadband Pension Plan ("the plan") was closed and all future benefit accruals were eliminated as of December 3, 2002. Defendants timely provided sufficient notice of the cessation of future benefit accruals as a matter of law.

ERISA imposes upon plan administrators an obligation to notify participants of material changes in benefit plans. With regard to pension plans, ERISA provides:

An applicable pension plan may not be amended so as to provide for a significant reduction in the rate of future benefit accrual unless the plan administrator provides the [described] notice ... to each applicable individual ....

29 U.S.C. §§ 1054(h). Defendants were obligated to provide notice of the cessation of future benefit accruals in accordance with § 1054(h).*fn1

Pursuant to statutory authority, the Secretary of Labor has "further amplified" ERISA's notice requirements through the promulgation of a regulation that provides: "the plan administrator shall use measures reasonably calculated to ensure actual receipt of material by plan participants, beneficiaries and other specified individuals." 29 C.F.R. § 2520.104b-1(b) (1). Although no particular method of disclosure is mandated, the administrator must choose a method "of delivery that is likely to result in full distribution." Id. Acceptable methods include in-hand delivery, a special insert placed in a periodical distributed to employees, such as union newspapers or company publications, and material distributed through the mail. Id. In certain circumstances an administrator may be obligated to use a combination of methods that when "taken together are reasonably calculated to ensure actual receipt." Id.

It is well settled that the statute and it's accompanying regulations are satisfied by an administrator's selection of a method or methods "reasonably calculated" to reach participants and proof of "actual receipt" is not required. See Custer v. Murphy Oil U.S.A., Inc., 503 F.3d 415, 418-19 (5th Cir. 2007) (the proper focus under ERISA's disclosure requirements is not whether the participant actually received notice, but instead is whether the administrator employed a method of distribution that was reasonably calculated to ensure actual receipt); Crotty v. Dakotacare Administrative Services, Inc., 455 F.3d 828, 830 (8th Cir. 2006) (adopting standard followed by numerous courts that ERISA "does not require proof of actual notice, so long as the administrator has sent the notice by means reasonably calculated to reach the recipient.") (collecting cases in support ); Lettrich, 213 F.3d at 770 ("a plan administrator must notify participants and beneficiaries of material reductions in covered services or benefits by using measures reasonably calculated to ensure actual receipt of material by the plan participants.") (citing 29 C.F.R. § 2520.104b1(b) (1)); Leyda v. Alliedsignal, Inc., 322 F.3d 199, 208 (2nd Cir. 2003) ("the district court properly concluded that this regulation means that the plan administrator must make reasonable efforts to ensure each plan participant's actual receipt of the plan documents.").

The following measures were taken by defendants to send notice to the plan participants of the cessation of all future benefit accruals. Comcast hired AON Consulting to assist in communications with AT&T Broadband employees in conjunction with the merger of Comcast and AT&T Broadband. AON helped develop the notice and brochure to be sent to participants regarding the freeze of participation and cessation of future benefit accruals. AON contracted with ANRO, Inc., to print and send the notices. Comcast obtained a mailing list of the 41,000 (plus) employees of AT&T Broadband that were plan participants, which contained the most current mailing addresses available. ANRO then received the names and addresses of the plan participants in an excel spreadsheet. There were three separate mailing lists within the spreadsheet. The mailing list for the Communication Workers of America, AFL-CIO ("CWA"), contained the names and addresses of 2,643 individuals, and included the names and addresses of each individual plaintiff. ANRO processed the information on the excel spreadsheet to conform with U.S. Postal Service standards, added the four digit extension zip code where possible, and sorted the addresses in zip code order. ANRO did not remove any addresses from the data base it derived from the excel spreadsheet and mailed the information to every mailing address given to it. ANRO's database for the CWA employees contained the names and addresses of the 2,643 individuals that appeared on the excel spreadsheet, and included specifically the names and addresses of each individual plaintiff. ANRO printed the notice and a "summary of material modifications," printed the names and addresses on the envelopes in zip code order, stuffed and sealed the envelopes by machine, and metered the envelopes for first-class mail. After being stuffed and metered, ANRO placed the envelopes in mail trays supplied by the United States Post Office, tagged them as a specific mailing, filled out the appropriate postal paperwork, and delivered the mailings to a United States Post Office. The notice materials were mailed on November 18, 2002, to each individual listed in ANRO's electronic database. No significant problems were encountered during the course of the mailing nor were there any reports of abnormalities made by Comcast, AON, or the United States Post Office. In total, 40,538 mailings were placed into the United States Postal Service by ANRO , which corresponds with the number of first class mailings billed to and paid by Comcast.

In addition to the above, defendants point to the following additional information to support their contention that ERISA's notice and disclosure requirements were fully satisfied: each individual plaintiff conceded they had no personal knowledge as to whether Comcast actually sent the notice on November 18, 2002, with the exception of Don Mochan, who testified that he knew the notice had been sent because he had the original brochure in his files and had probably received it in or around November of 2002. In addition, two other individual plaintiffs, Daniel Sistek and Jamie Fetterman, stipulated they had received the notices mailed to them on November 18, 2002. Two other employees who worked at the Westmorland location where the individual plaintiffs worked and were members of Local 13000 of the CWA received the notices shortly after they were mailed on November 18, 2002. Finally, another individual plaintiff, John McAninch, admitted that although he did not receive the notice, he thought Comcast had sent it.

Plaintiffs' contention that "defendants [have] submitted no evidence that the notices addressed to the individually named plaintiffs were placed in the mail" is unavailing. Proof of actual notice is not required. Defendants merely were required to employ methods reasonably calculated to ensure actual receipt of the notice. The customer service representative employed by ANRO who coordinated the printing and mailing of the notice testified to the correlating accuracy of the names and addresses on the excel spreadsheet, the ANRO database derived therefrom and the process by which the envelopes were created, stuffed, metered, placed in mail trays, tagged and ultimately mailed through the United States Postal Service. This testimony more than sufficiently establishes defendants' compliance with ERISA's notice requirements. See 29 C.F.R. § 2520.104b-1(b) (1) (" material distributed through the mail may be sent by first, second, or third-class mail."); Crotty, 455 F.3d at 830-31 (surveying cases where summary judgment was granted in favor of a plan administrator because some evidence had been presented tending to show "not only that the employer had a system for sending out the required notices, but also that the system was in fact followed with respect to the person in question."); Degruise v. Sprint Corp., 279 F.3d 333, 337 (5th Cir. 2002) (holding that sending a letter via first class mail satisfies an employer's COBRA notification requirement under ERISA"); Custer, 503 F.3d at 419 ("the regulations indicate that distribution through first-class mail fulfills the disclosure obligation."); Williams v. Plumbers & Steamfitters Local 60 Pension Plan, 48 F.3d 923, 926 ( 5th Cir. 1995) (recognizing that circumstantial evidence of ...

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