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Strauch v. Exelon Corp.

United States District Court, Fourth Circuit

November 18, 2013

JOHN L. STRAUCH, , Plaintiffs


James K. Bredar United States District Judge

John J. Strauch and Jason Endlich (“Plaintiffs”) brought this suit against Exelon Corporation (“Exelon”) and the Constellation Energy Group’s Service Plan (“Service Plan”) for unpaid wages and benefits due under the Service Plan, in accordance with the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B) and (a)(3). (Compl. ¶ 18, ECF No. 1.) Now pending before the Court is Defendants’ converted motion for summary judgment.[1] (ECF No. 25.) The matter has been thoroughly briefed (ECF Nos. 13, 17, 22, 24, 25), and no hearing is required, Local Rule No. 105.6 (D. Md. 2011). The motion will be GRANTED.

I. Background

Plaintiffs were each employed by Constellation Energy Group, Inc. (“Constellation”), a subsidiary of Exelon, until November 2012, when Constellation sold three power plants, including the facilities and assets Plaintiffs supported, to Raven Power Holdings, LLC (“Raven Power”). (Pls.’ Opp’n Mot. Dismiss 2, ECF No. 17; Defs.’ Mot. Dismiss 4, ECF No. 14.) In September 2012, both Plaintiffs were offered positions with Topaz Power Management (“Topaz”), an affiliate of Raven Power, contingent upon the closing of the sale between Constellation and Raven Power. (Defs.’ Mot. Dismiss, Ex. 4, 11; Id. Ex. 5, 10.) On November 30, 2012, Plaintiffs’ employment with Exelon ceased and Plaintiffs immediately began working for Topaz. (Id. Ex. 4, 2; Id. Ex. 5, 2.)

While employed by Exelon, Plaintiffs were covered by the Constellation Energy Group’s Service Plan. (Id. Ex. 1, Service Plan, ECF No. 14-2.) Under the Service Plan, employees are entitled to severance benefits in the event of a “change of control, ” unless the employees meet certain ineligibility criteria, including “[e]mployees who are offered any position with a Successor.” (Id. Ex. 1, Service Plan 5-6.) The term “Successor” is defined under the Service Plan as “any employer who purchases an Employer subsidiary/affiliate either through a stock or asset purchase.” (Id. Ex. 1, Service Plan 5.) Plaintiffs were not offered positions with Raven Power, the only successor by their reading of the Service Plan, and accordingly, filed claims with the Plan Administrator seeking severance benefits under the Service Plan. (Id. Ex. 4, 6-7, ECF No. 14-5; id. Ex. 5, 6-7, ECF No. 14-6.) The Administrator denied both Plaintiffs’ claims for benefits, finding that the Plaintiffs were offered and accepted positions with a “Successor.” (Id. Ex. 4, 6-7; id. Ex. 5, 6-7.) Both Plaintiffs timely filed written appeals of the Administrator’s decision, where again the Plan Administrator denied the Plaintiffs’ claims for benefits under the Service Plan. (Id. Ex. 4, 2-5; id. Ex. 5, 6-7.) As a result, Plaintiffs filed a complaint with this Court to challenge the Plan Administrator’s decisions and to request declaratory, injunctive, and monetary relief. (Compl. ¶ 18.)

II. Standard for Summary Judgment

“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to current Rule 56(a)). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing the motion, then a genuine dispute of material fact is presented and summary judgment should be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the “mere existence of a scintilla of evidence in support of the [opposing party’s] position” is insufficient to defeat a motion for summary judgment. Id. at 252. The facts themselves, and the inferences to be drawn from the underlying facts, must be viewed in the light most favorable to the opposing party, Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008), who may not rest upon the mere allegations or denials of his pleading but instead must, by affidavit or other evidentiary showing, set out specific facts showing a genuine dispute for trial, Fed.R.Civ.P. 56(c)(1). Supporting and opposing affidavits are to be made on personal knowledge, contain such facts as would be admissible in evidence, and show affirmatively the competence of the affiant to testify to the matters stated in the affidavit. Rule 56(c)(4).

III. Analysis

The Court will turn first to the proper standard for judicial review of a plan administrator’s decision to grant or deny benefits under an employee benefits plan regulated by ERISA. In reviewing the denial of benefits under an ERISA plan, a court must first consider de novo whether the relevant plan confers discretionary authority upon the plan fiduciary or administrator to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); DuPerry v. Life Ins. Co. of North America, 632 F.3d 860, 869 (4th Cir. 2011). If the plan does not give the administrator or fiduciary discretionary or final authority to determine eligibility or construe uncertain terms, then courts review employees’ claims de novo without deferring to either party’s interpretation.

Firestone, 489 U.S. at 112; Booth v. Wal-Mart Stores, Inc. Associates Health and Welfare Plan, 201 F.3d 335, 340 (4th Cir. 2000). If the plan does confer such discretion, however, the plan administrator’s or fiduciary’s discretionary decision must be reviewed for an “abuse of discretion.” Booth, 201 F.3d at 341. Under the abuse of discretion standard, an administrator’s or fiduciary’s decision will not be disturbed if reasonable, even if the court itself would have reached a different conclusion. Id. In determining whether the exercise of discretion was reasonable, numerous factors are relevant, including, but not limited to the following:

(1) the language of the plan; (2) the purposes and goals of the plan; (3) the adequacy of the materials considered to make the decision and the degree to which they support it; (4) whether the fiduciary’s interpretation was consistent with other provisions in the plan and with earlier interpretations of the plan; (5) whether the decisionmaking process was reasoned and principled; (6) whether the decision was consistent with the procedural and substantive requirements of ERISA; (7) any external standard relevant to the exercise of discretion; and (8) the fiduciary’s motives and any conflict of interest it may have.

Id. at 342-43. With these principles in hand, the Court now turns to consider the Service Plan at issue and the Plan Administrator’s denial of benefits.

An ERISA plan may confer discretion upon its administrator or fiduciary in two ways:

(1) with language expressly creating “discretionary authority, ” or (2) with words creating “discretion by implication.” Woods v. Prudential Life Ins. Co. of America, 528 F.3d 320, 322 (4th Cir. 2008) (citing Feder v. ...

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