Free Reply in Support of Motion - District Court of Arizona - Arizona

O SBORN MALEDON
A P ROF E SS IO NA L A S S OC IA T I O N A T T OR NEY S A T LA W

1 2
______________________

3
The Phoenix Plaza 21st Floor 2929 North Central Avenue Phoenix, Arizona 85012-2794 P.O. Box 36379 Phoenix, Arizona 85067-6379 Telephone Facsimile 602.640.9000 602.640.9050

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

David B. Rosenbaum, Atty. No. 009819 Dawn L. Dauphine, Atty. No. 010833 OSBORN MALEDON, P.A. 2929 North Central Avenue, Suite 2100 Phoenix, AZ 85012-2794 Telephone: (602) 640-9000 [email protected] [email protected] Michael L. Banks, Pro Hac Vice William J. Delany, Pro Hac Vice Azeez Hayne, Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5000 [email protected] [email protected] [email protected] Howard Shapiro, Pro Hac Vice PROSKAUER ROSE LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112-4017 Telephone: (504) 310-4088 [email protected] Attorneys for Defendants IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF Arizona Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates and Walter G. West, individually and on behalf of all others similarly situated, Plaintiffs, vs. Honeywell Retirement Earnings Plan, Honeywell Secured Benefit Plan, Plan Administrator of Honeywell Retirement Earnings Plan, and Plan Administrator of Honeywell Secured Benefit Plan, Defendants. No. CV04-0424 PHX ROS REPLY IN SUPPORT OF DEFENDANTS' MOTION FOR LEAVE TO FILE AMENDED ANSWER

Case 2:04-cv-00424-ROS

Document 263

Filed 01/05/2007

Page 1 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

I.

INTRODUCTION In October 2006, the parties jointly submitted a proposed scheduling order

setting December 11, 2006 as the deadline for filing "procedural motions including Motions to Amend the Complaint or Answer." (Doc. # 246.) Plaintiffs also proposed an additional five months for discovery. (Id.) On November 11, 2006 ­ one month before the jointly proposed deadline ­ Defendants filed a motion for leave to file an Amended Answer and Affirmative Defenses to clarify their existing defenses and add several new defenses following the Court's decision to grant Plaintiffs' motion for class certification. After receiving this motion, Plaintiffs filed a Second Revised Proposed Scheduling Order that continued to propose a deadline of December 11 for filing motions to amend. (Doc. # 258.) Nevertheless, Plaintiffs now argue that the Court should deny Defendants' motion to amend for undue delay, prejudice, and futility. As discussed in more detail below, Plaintiffs' arguments are mistaken. Defendants did not delay unreasonably in filing their motion. Moreover, Plaintiffs failed to adduce any evidence that they will suffer prejudice if Defendants are allowed to amend their pleading, and their complaints about the timing of the motion, therefore, have no force. Defendants filed their motion within the time-limits Plaintiffs proposed and while discovery is ongoing. In fact, Plaintiffs did not notice any depositions until after Defendants filed their motion. Finally, Plaintiffs cannot establish that the proposed new defenses are futile. Thus, for the reasons set forth below, and in Defendants' opening brief, Defendants respectfully request that the Court grant Defendants leave to file their proposed Amended Answer and Affirmative Defenses.

Case 2:04-cv-00424-ROS

Document 263

Filed 01/05/2007

Page 2 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

II.

ARGUMENT A. Defendants' Proposed New Affirmative Defenses Do Not Seek To Re-Litigate Issues The Court Already Decided.

Plaintiffs argue that Defendants' proposed new Eighth, Ninth, and Tenth affirmative defenses1 improperly seek to re-litigate issues that this Court already decided on Plaintiffs' motion for partial summary judgment. (Doc. # 262 at 4-9.) Contrary to Plaintiffs' contention, however, the proposed new defenses do not seek to re-litigate the partial summary judgment motion. Indeed, this Court has clarified that its partial summary judgment rulings did not preclude Defendants from presenting affirmative defenses. Plaintiffs moved for partial summary judgment on certain legal issues. In their motion, they contended that the Plan Administrator incorrectly applied a Secured Benefit Account ("SBA") offset to the Retirement Plan's "minimum benefit" formula. In opposition, Defendants argued that the plan was ambiguous regarding the application of an SBA offset to the "minimum benefit" provision, and that the Plan Administrator's interpretation was entitled to deference. The Court rejected Defendants' arguments and ruled that the plan was unambiguous, and did not allow for an SBA offset to the "minimum benefit" formula. Allen v. Honeywell Ret. Earnings Plan, 382 F. Supp. 2d 1139, 1162-63 (D. Ariz. 2005). Although this Order decided certain narrow legal issues, it did not render any final judgment for Plaintiffs (and, in fact, the Court certified the legal issues it decided for interlocutory appeal to the Ninth Circuit). Significantly, moreover, the Court did not determine the remedy, if any, to which Plaintiffs may be entitled based on its July 19 rulings. Indeed, the Court already rejected Plaintiffs' previous attempt to strike the affirmative defenses Defendants raised in their Answer. (Doc. # 138 at 14.)

1

Plaintiffs concede that they oppose only Defendants' proposed Eighth, Ninth, and Tenth affirmative defenses because "the original answer suffices to allege the matters asserted in the balance of the proposed changes." (Doc. # 262 at 5 n. 4.)
Case 2:04-cv-00424-ROS 2 Document 263 Filed 01/05/2007 Page 3 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Against this back-drop, it is clear that Defendants' proposed new defenses do not seek to re-litigate any issue already decided by the Court. For example, the proposed Eighth and Ninth affirmative defenses do not seek to re-litigate whether the Retirement Plan provided for a Secured Benefit Account offset to the minimum benefit formula. On the contrary, the proposed new defenses acknowledge the Court's ruling and address possible remedies in light of that ruling. If the construction of these plan terms were found to create a scrivener's error or a plan term that is ultra vires, plan reformation would be a permitted or mandatory remedy. See Int'l Union of Elec., Elec., Salaried, Mach. & Furniture Workers v. Murata Erie N. Am., 980 F.2d 889, 907 (3d Cir. 1992) (reformation is a permitted to remedy a scrivener's error); Air Line Pilots Ass'n v. Shuttle, Inc., 55 F. Supp. 2d 47, 53-54 (D.D.C. 1999) (same); Winterrowd v. Am. Gen. Annuity Ins. Co., 321 F.3d 933, 93738 (9th Cir. 2003) (purported amendment that did not comply with the plan's amendment procedure is rendered invalid). Similarly, Defendants' claim that Plaintiffs must prove prejudice to recover under ERISA § 204(h) does not seek to re-litigate the partial summary judgment. The Court decided only that the 1993 amendments caused a significant reduction in future benefit accruals and that Defendants did not provide Plaintiffs with a section 204(h) notice. Allen, 382 F. Supp. 2d at 1166-67. The Court, however, has not yet decided whether individual Plaintiffs and class members are required to show prejudice to obtain a remedy under section 204(h), and if so, whether these individuals have demonstrated that they were prejudiced or harmed. The proposed amendments, therefore, do not seek to re-litigate any issue already decided by the Court, but rather, address additional issues that were not decided by the Court in its grant of partial summary judgment.

Case 2:04-cv-00424-ROS

3 Document 263

Filed 01/05/2007

Page 4 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

B.

Plaintiffs Did Not Demonstrate Any Undue Delay That Would Justify Denying Defendants' Motion For Leave To Amend.

Plaintiffs argue that the Court should deny Defendants' motion for leave to amend because Defendants allegedly delayed unduly before filing the motion. Specifically, Plaintiffs argue that: Defendants did not move to amend their answer until four and a half years after notice of Plaintiff's claims, over two and a half years after filing of the complaint, over two years after briefing on summary judgment was concluded, 16 months after the Court's ruling on these claims and 15 months after Defendants filed their post-summary judgment answer. (Doc. # 262 at 7.) Contrary to Plaintiffs' arguments, Defendants did not unduly delay in filing their motion. Defendants filed within the time period the parties jointly proposed for filing such motions. In addition, notwithstanding Plaintiffs' attempt to calculate the "delay" starting before they even filed suit, Defendants sought leave to amend only fifteen months after filing their original Answer to the Amended Complaint. Notably, moreover, during much of that fifteen month period, this case was on reconsideration or stayed. Specifically, on August 10, 2005, at the same time that Defendants filed their original Answer, Defendants sought reconsideration or interlocutory review of the Court's partial summary judgment ruling. (Doc. #s 78, 79.) On November 21, 2005, the Court granted Defendants' motion for interlocutory review and stayed all proceedings in this action until March, 2006 pending the Ninth Circuit's ruling. (Doc. #s 138, 139). Since the Court lifted the stay in 2006, Defendants have been vigorously investigating the factual underpinnings of the proposed defenses as required by Fed. R. Civ. P. 11(b). Not surprisingly, Defendants' investigation has been frustrated, and in some respects thwarted, by both the age of the case and complex legal issues surrounding Defendants' ability (or inability) to contact relevant witnesses who fall within Plaintiffs' proposed class definition. For example, the scrivener's error and ultra vires defenses implicate the Garrett and Signal Board of Directors' intent
4 Document 263

Case 2:04-cv-00424-ROS

Filed 01/05/2007

Page 5 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

regarding the challenged amendments considered and adopted in 1983, over twentythree years ago. Obtaining evidence relating to events that occurred more than two decades ago from a company that has undergone several mergers and acquisitions during that time period has been complicated because many relevant documents have been misplaced or destroyed during the intervening decades. Additionally, many of those documents that were not destroyed were sent to off-site storage sites along with millions of pages of other documents. The recovery and review of relevant documents has been a painstaking and time consuming process, which is still ongoing. Similarly, in the intervening years, witness memories have faded, and individuals with knowledge have left the Company, retired, and, in some cases, died. Moreover, many of the former Garrett officers and directors whose intent would be relevant to the proposed defenses, or who may have knowledge of evidence regarding the relevant intent, are members of Plaintiffs' proposed class (e.g. John A. Teske, the former Senior Vice President of Garrett who executed Amendment IX to the Garrett Retirement Plan). Plaintiffs have refused to allow Defendants to contact such individuals without Plaintiffs' consent or Court order. The parties have been negotiating and continue to negotiate the extent to which Defendants can contact these individuals. In the meantime, however, Defendants have been hampered in their effort to investigate the factual basis for the proposed defenses. Despite these difficulties, as noted above, Defendants sought leave to amend their Answer well within the time period proposed by Plaintiffs for filing such motions. Additionally, Defendants notified Plaintiffs and the Court of these proposed defenses well before the close of fact discovery precisely to avoid charges of undue delay or prejudice. Any arguable delay has not been "undue," and does not justify denial of Defendants' motion. See Hurn v. Ret. Fund Trust of the Plumbing, Heating and Piping Indus. of S. Cal., 648 F.2d 1252, 1254 (9th Cir. 1981) (two year delay did

Case 2:04-cv-00424-ROS

5 Document 263

Filed 01/05/2007

Page 6 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

not justify denial of motion); Howey v. U.S., 481 F.2d 1187, 1190-91 (9th Cir. 1973) (five year delay insufficient to justify denial of motion for leave to amend). 2 C. Plaintiffs Failed To Present Evidence That They Would Be Prejudiced If Defendants Are Allowed To Amend Their Pleading.

The Court should grant Defendants' motion for leave to amend, even assuming that Defendants delayed unduly in filing their motion, because Plaintiffs cannot demonstrate that they will be prejudiced if Defendants are allowed to amend their pleading. The Ninth Circuit has consistently ruled that delay alone, without evidence of prejudice to the non-moving party or bad faith motive, is insufficient to justify denial of leave to amend. See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) ("Absent prejudice, or a strong showing of any of the remaining Foman factors, there exists a presumption under Rule 15(a) in favor of granting leave to amend."); DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987)

Plaintiffs' citations regarding delay are easily distinguishable from this case. See AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 953 (9th Cir. 2006) (motion seeking to reverse without explanation a critical admission made three months earlier); Bonin v. Calderon, 59 F.3d 815 (9th Cir. 1995) (motion to amend habeas corpus petition filed by convicted serial killer); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604 (9th Cir. 1992) (motion filed after Rule 16 cutoff and, therefore, gauged by stricter Rule 16 standard rather than Rule 15 standard); Jackson v. Bank of Haw., 902 F.2d 1385 (9th Cir. 1990) (motion filed less than 30 days before discovery cutoff and more than one year after plaintiff announced its intention to amend); Schlacter-Jones v. Gen. Tel. of Cal., 936 F.2d 435 (9th Cir. 1991) (motion made after close of discovery, where three of four proposed new claims would have been futile) abrogated on other grounds 255 F.3d 683; Acri v. Int'l Ass'n of Mach. & Aerospace Workers, 781 F.2d 1393 (9th Cir. 1986) (motion filed in response to motion for summary judgment where plaintiff admitted choice not to file earlier was tactical); USX Corp. v. Barnhart, 395 F.3d 161 (3d Cir. 2004) (motion to file third amended complaint after delay of over three years); Steir v. Girl Scouts of Am., 383 F.3d 7 (1st Cir. 2004) (motion filed after close of discovery, and noting district court would have been "well within" its discretion in granting the motion); Diersen v. Chicago Car Exch., 110 F.3d 481 (7th Cir. 1997) (motion filed after the entry of final judgment); McDaniel v. City of Griffin, 636 S.E. 2d 62 (Ga. Ct. App. 2006) (motion filed after final judgment while appeal pending).
Case 2:04-cv-00424-ROS 6 Document 263 Filed 01/05/2007 Page 7 of 13

2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

("delay, by itself, is insufficient to justify denial of leave to amend"); Hurn, 648 F.2d at 1254; Howey, 481 F.2d at 1190-91. Plaintiffs argue that permitting Defendants to amend their answer will "severely" prejudice Plaintiffs. (Doc. # 262 at 9.) Specifically, Plaintiffs argue that they will be prejudiced because: Plaintiffs have already won these claims and should not be required to take additional discovery on matters of alleged intent raised by the Eighth through Tenth Affirmative Defenses. . . . Defendants' proposed amended answer would also upset Plaintiffs' legitimate expectations (and work to thwart the Court's directive) that this case be concluded by October 2007. (Id. at 10.) As discussed above, however, Plaintiffs have not "already won these claims." Although Plaintiffs prevailed on certain legal issues, they still must litigate Defendants' affirmative defenses and, as this Court noted, the issues surrounding the remedies (if any) to which Plaintiffs may be entitled. (Doc. # 226 at 2 fn. 1.) Requiring Plaintiffs to address these defenses is not a source of undue prejudice, but rather the necessary result of any motion seeking leave to add an affirmative defense. Plaintiffs' argument of prejudice, therefore, cannot be accepted, for it would eliminate the ability to amend pleadings to add new claims or defenses ­ a result that is clearly at odds with the Ninth Circuit's instruction that amendments should be allowed with "extreme liberality." DCD Programs, 833 F.2d at 186. Nor will the proposed amendments upset Plaintiffs' "legitimate expectations." Defendants filed their motion one month before the parties' joint proposed deadline for filing "Motions to Amend the Complaint or Answer." (Doc. # 246.) Indeed, Plaintiffs filed a Second Revised Proposed Scheduling Order proposing the same deadline after Defendants filed their motion to amend. (Doc. # 258.) It is hard to imagine, therefore, how Plaintiffs can argue that Defendants' proposed amendments would "upset Plaintiffs' legitimate expectations." (Doc. # 262 at 10.)

Case 2:04-cv-00424-ROS

7 Document 263

Filed 01/05/2007

Page 8 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
3

In actuality, allowing Defendants to amend their answer will not prejudice Plaintiffs in any way. Discovery is still ongoing. In fact, the Court has not yet issued a scheduling order setting a discovery cutoff. Moreover, Plaintiffs' proposed discovery cutoff (filed after Defendants filed their motion to amend) would allow for discovery until May 30, 2007, or more than 6 months from the filing of Defendants' motion, in which to take discovery regarding the proposed new defenses. (Doc. # 258.) Nor will the proposed new defenses obviate or require duplication of any of Plaintiffs' previous discovery. Indeed, Plaintiffs did not even notice any depositions until after Defendants filed their motion for leave to amend. (Doc. # 254.) Thus, there is simply no evidence that Plaintiffs will be prejudiced if Defendants are permitted to amend their pleading. See DCD Programs, 833 F.2d at 187-88 (no evidence of prejudice because discovery had not closed). D. Defendants' Proposed Amendments Are Not Futile.

Plaintiffs argue that Defendants should not be granted leave to amend their pleading because the amendments would be futile.3 A proposed amendment is futile "only if no set of facts can be proved under the amendment to the pleadings that would constitute a valid and sufficient claim or defense." Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). Here, Plaintiffs failed to demonstrate that Defendants can present no set of facts sufficient to establish their proposed new affirmative defenses. Plaintiffs argue that Cinelli v. Sec. Pacific Corp., 61 F.3d 1437, 1444-45 (9th Cir. 1995), bars Defendants' "mistake" or scrivener's error defense. In Cinelli, however, the Ninth Circuit did not categorically reject the doctrine of mistake. Instead, the Ninth Circuit acknowledged that other courts had applied the doctrine to ERISA plans, but declined to apply the doctrine to the facts at issue in Cinelli. 61

Plaintiffs argue that the proposed amendments to Defendants' Third Affirmative Defense would be futile. (Doc. # 262 at 11-15.) This argument is irrelevant because Plaintiffs admit that the original Answer sufficiently pled this defense.
Case 2:04-cv-00424-ROS 8 Document 263 Filed 01/05/2007 Page 9 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

F.3d at 1445 ("We conclude in this case . . . . We decline to apply the doctrine of mistake in this instance to consider the intent of the parties.") (emphasis added). Thus, because issues of fact must be decided to determine whether scrivener's error applies in this case, the proposed amendment to add the Eighth Affirmative Defense is not futile. See Murata, 980 F.2d 907 (finding that scrivener's error might apply to facts at issue, and noting that material disputes of fact must be decided to resolve the issue); Shuttle, 55 F. Supp. 2d at 53-54 (finding that the court has the power to reform an ERISA plan to correct a scrivener's error, and finding that dispute of fact must be resolved to decide the issue). Plaintiffs also contend that the ultra vires defense is futile because it conflicts with ERISA's writing requirement. (Doc. # 262 at 15-16 n. 10.) Again, Plaintiffs misstate the defense and fail to demonstrate that Defendants can prove no set of facts that would constitute a valid defense. ERISA requires every plan to specify an amendment procedure. Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995). However, not all "writings" become plan terms; rather, only amendments that comply with the plan's amendment procedure become effective. See Winterrowd, 321 F.3d at 937-38 (purported amendment that did not comply with the plan's amendment procedure was invalid). The Garrett and Signal Retirement Plans allowed for amendments only by resolution of the Board of Directors. (Doc. # 16, Promislo Decl. Ex. A at HW0000078, Ex. E at HW0000373.) Defendants contend that Garrett's Board of Directors intended that the merged Retirement Plan would provide for an SBA offset to the "minimum benefit" formula. For example, the amendment that merged the Garrett plan into the Signal plan, specified that: The benefits under the Garrett Plan (and the successor Signal Retirement Plan) shall be offset, using the assumptions set forth in the Signal Retirement Plan, by the value of each Participant's account in the Signal Savings and Stock Purchase plan derived from his former account in the Severance Plan.

Case 2:04-cv-00424-ROS

9 Document 263

Filed 01/05/2007

Page 10 of 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

(Doc. # 16, Promislo Decl. Ex. C at HW0000304 (emphasis added).) If the Board resolution that authorized the plan merger did call for such an offset, however, then any amendment or plan restatement failing to include the offset would be invalid and unenforceable. See Winterrowd, 321 F.3d at 937-38. Thus, Defendants' proposed amendment is not futile because fact issues must be resolved to determine if the defense is effective. Plaintiffs also argue that Defendants' proposed amendment adding a Tenth "affirmative defense" on prejudice is futile. (Doc. # 262 at 16.) Plaintiffs contend the amendment is futile because the Court already decided the ERISA § 204(h) claim in Plaintiffs' favor. As discussed above, Plaintiffs are wrong. They also claim that the amendment is futile because prejudice is not a "defense" to a section 204(h) claim. This argument, however, misses the point. Defendants are not arguing that prejudice is a defense to a section 204(h) claim. Rather, Defendants contend that prejudice is an element of the cause of action that Plaintiffs must prove to obtain a remedy under section 204(h). Defendants, therefore, were not required to plead this issue, but have sought leave to include it in their pleading anyway to notify Plaintiffs that this element of their claim must still be litigated and decided. Thus, the Court need not decide this issue now, and can decide it instead when determining the remedy (if any) to which Plaintiffs are entitled under section 204(h). Furthermore, Plaintiffs' argument is inconsistent with the law in the Ninth Circuit concerning alleged ERISA notice violations. Plaintiffs cite several cases that they claim demonstrate that prejudice is not an element of a section 204(h) claim. (Doc. # 262 at 16-17.) Yet none of these cases addressed this issue. Rather, Plaintiffs' cited cases deal with the amount and type of notice required to satisfy section 204(h). Contrary to Plaintiffs' argument, moreover, the Ninth Circuit has held that a plaintiff must demonstrate substantive harm to recover plan benefits based on an alleged failure to properly disclose plan provisions. See McKenzie v. Gen. Tel. Co. of Cal., 41 F.3d 1310, 1314-15 (9th Cir. 1994) (plaintiff could not recover plan
10 Document 263 Filed 01/05/2007 Page 11 of 13

Case 2:04-cv-00424-ROS

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

benefits based on alleged failure to properly disclose plan terms because plaintiff failed to demonstrate substantive harm flowing from the notice violation); Siles v. ILGWU Nat'l Ret. Fund, 783 F.2d 923, 930 (9th Cir. 1986) (rejecting plaintiff's argument that defendant could not "retroactively apply [plan provision] to her without giving her adequate notice of the [provision]," because plaintiff could not demonstrate harm from the lack of notice). Thus, to obtain additional benefits as a remedy for Defendants' alleged failure to supply adequate notice under § 204(h), Plaintiffs must prove that the notice violation caused them "substantive harm." McKenzie, 41 F.3d at 1314-15; Siles, 783 F.2d at 930. Defendants' proposed amendments, therefore, are not futile.4 III. CONCLUSION For the reasons set forth above and in Defendants' opening brief, Defendants respectfully request that the Court grant Defendants leave to file their proposed Amended Answer and Affirmative Defenses. /// /// ///

4

Plaintiffs also argue that Defendants waived any defenses not raised in the administrative process. (Doc. # 262 at 14-15.) As explained in Defendants' class certification briefing, (Doc. # 186 at 29), Plaintiffs' argument is mistaken and largely irrelevant. Even if Plaintiffs' argument were correct, only the plan administrators (and not the plans) could have waived any defense, and then only with respect to the individuals who joined Plaintiffs' administrative claims. Such a waiver could not preclude a defense against the claims of the thousands of absent class members who did not join Plaintiffs' administrative claims. Furthermore, nothing in Plaintiffs' citations suggests that legal defenses must be raised at the administrative stage. Finally, the appropriate remedy if Plaintiffs truly thought the Plan Administrator should have construed the matter at issue would be remand to the Plan Administrator. See Vizcaino v. Microsoft Corp., 120 F.3d 1006, 1013-14 (9th Cir. 1997) (en banc) (remanding to plan administrator to decide proper plan construction after determining that administrator's initial decision was incorrect).
11 Document 263 Filed 01/05/2007 Page 12 of 13

Case 2:04-cv-00424-ROS

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case 2:04-cv-00424-ROS 12 Document 263 Filed 01/05/2007 Page 13 of 13
1479358v1

DATED this 5th day of January, 2007. OSBORN MALEDON, P.A. By: s/Dawn L. Dauphine David B. Rosenbaum Dawn L. Dauphine Osborn Maledon, P.A. 2929 N. Central Ave., Suite 2100 Phoenix, AZ 85012-2794 Michael L. Banks (Pro Hac Vice) William J. Delany (Pro Hac Vice) Azeez Hayne (Pro Hac Vice) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Howard Shapiro, Pro Hac Vice PROSKAUER ROSE LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112-4017 Attorneys for Defendants

CERTIFICATE OF SERVICE I do certify that on January 5, 2007, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Susan Martin Martin & Bonnett P.L.L.C. 3300 N. Central Avenue, Suite 1720 Phoenix, Arizona 85012-2517 Attorney for Plaintiff s/Susanne Wedemeyer