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Snead v. Severance Pay Plan of Johnson & Johnson

October 1, 2010

DAVID B. SNEAD, PLAINTIFF,
v.
SEVERANCE PAY PLAN OF JOHNSON & JOHNSON AND AFFILIATED COMPANIES, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Robert F. Kelly, Sr. J.

MEMORANDUM

Plaintiff David B. Snead ("Snead") brought this action against Severance Pay Plan of Johnson & Johnson and Affiliated Companies, Johnson & Johnson, and Pension Committee of Johnson & Johnson (collectively "J&J") for severance benefits under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"). Presently before this Court is Snead's Motion for Summary Judgment and J&J's Cross-Motion for Summary Judgment. For the following reasons, we will grant Snead's Motion, deny J&J's Motion, and remand this matter.

I. BACKGROUND

Snead was employed as an Associate Director of Biostatistics by Centocor Research & Development, Inc. ("Centocor"), a subsidiary of J&J, beginning in May 2007. (Compl. ¶ 9.) Snead was previously employed for fifteen years as a Principal Biostatistican and in other statistical positions by another J&J subsidiary. (AR at D0062.)*fn1 As part of a reorganization in late 2008 and early 2009, Snead's Associate Director of Biostatistics position was eliminated. (Compl. ¶¶ 10-11.) Elimination of his position at that time resulted in Snead possibly being eligible for benefits under Article 4.1(a)(i) of the Severance Pay Plan of J&J (the "Plan") (AR at D0049.) Snead was informed by management that he would be required to interview for open Clinical Team Statistical Leader ("CTSL") positions. (Id. at D0002.) Snead interviewed for several of these CTSL positions within fifty miles of the Chesterbrook, Pennsylvania facility at which he was employed, but was not selected. (Id.) On February 18, 2009, Snead was offered a new position that was being created in the reorganized structure, titled "Project Leader" or "Project Statistician." (Compl. ¶ 14.) According to J&J, Snead's salary would have remained the same. (AR at D0061.) Snead asserts that he met with Judy Cooper ("Cooper"), a supervisor, on February 19, 2009 to express his appreciation for the position, but to decline it because he believed it to be not comparable in terms of responsibilities to his current position. Snead apparently was told at that time that Human Resources informed Cooper that he would not qualify for a severance package.*fn2 (Id. at D0003.) On February 24, 2009, Snead met with J&J's "Pharma R&D HR Manager," Jackie Marchitell ("Marchitell), and Marchitell informed him that the new Project Statistician position was comparable to his Associate Director position. (Id. at D003). Snead disagreed with her and explained his reasons, including his belief that his present position was essentially a people management position and not primarily technical as the new position seemed to be. On March 3, 2009, Snead met with Marchitell again who provided him with a list of duties for the proposed new job titled "2009 Responsibilities." (Id. at D0009.) Snead was later informed by Marchitell that the new proposed position was more than a 70% match to his Associate Director position, and that she would not be recommending severance benefits.*fn3 (Id. at D007.) Snead disagreed, and on March 7, 2009, he informed Marchitell by e-mail of his decision to take early retirement and again requested severance benefits under the Plan. (Id. at D0009.) Snead last worked on March 13, 2009, and began retirement on March 15, 2009.

By letter dated March 31, 2009 to the Benefit Claims Committee ("BCC"), the delegee of the Pension Committee of J&J, Snead appealed the denial of severance benefits. (Id. at D0001.) By written decision dated August 19, 2009, the BCC determined that the denial of Snead's request for severance benefits was appropriate under the terms of the Plan. (Id. at D0064.)

II. STANDARD OF REVIEW

Deciding the parties' Motions for Summary Judgment requires this Court to consider two standards of review: the summary judgment standard pursuant to Federal Rule of Civil Procedure 56 and the arbitrary and capricious standard under ERISA. Byrd v. Reliance Std. Life Ins. Co., 2004 U.S. Dist. LEXIS 24682, at *6 (E.D. Pa. Dec. 7, 2004).

A. Summary Judgment Standard

Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper "if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The moving party has the initial burden of informing the court of the basis for the motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). An issue is genuine only if there is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party. Anderson, 477 U.S. at 249. A factual dispute is material only if it might affect the outcome of the suit under governing law. Id. at 248.

To defeat summary judgment, the non-moving party cannot rest on the pleadings, but rather that party must go beyond the pleadings and present "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(c). Similarly, the non-moving party cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir. 1989)(citing Celotex, 477 U.S. at 325 (1986)). Further, the non-moving party has the burden of producing evidence to establish prima facie each element of its claim. Celotex, 477 U.S. at 322-23. If the court, in viewing all reasonable inferences in favor of the non-moving party, determines that there is no genuine issue of material fact, then summary judgment is proper. Id. at 322; Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 83 (3d Cir. 1987).

B. ERISA Standard

Both parties agree that where, as here, a plan governed under ERISA provides the administrator with discretionary authority to determine benefit eligibility, this Court must review the determination under an arbitrary and capricious standard. See e.g., Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111-12 (1989).

Under the arbitrary and capricious standard, we may not reverse the administrator's decision denying disability benefits unless that decision was "without reason, unsupported by substantial evidence[,] or erroneous as a matter of law." Abnathya v. Hoffmann-LaRoche, Inc., 2 F.3d 40, 45 (3d Cir. 1993). The scope of this review is narrow and this Court is not free to substitute its own judgment for that of the Plan's administrator in determining eligibility for benefits under the Plan. Mitchell v. Eastman Kodak Co., 113 F.3d 433, 439 (3d Cir. 1997). In short, the arbitrary and capricious standard of review provides an "uncommon privilege in the American legal system -- a ...


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