1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
SUSAN MARTIN (AZ#014226) DANIEL L. BONNETT (AZ#014127) JENNIFER KROLL (AZ#019859) MARTIN & BONNETT, P.L.L.C. 3300 N. Central Avenue, Suite 1720 Phoenix, Arizona 85012-2517 Telephone: (602) 240-6900 Attorneys for Plaintiffs
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
Plaintiffs Response to Defendants Proposed Surreply on Plaintiffs Motion to Compel
Contrary to Mr. Chapman s declaration, the October 2001 newsletter, (Supplemental
20
Declaration of Craig Chapman, Doc. 239, Exhibit A), makes no reference to litigation.
21
Instead it discusses the Retirees desire to find out with some degree of assurance whether
22
or not the offsets applied to our retirement benefits were proper. The newsletter states that
23
an attorney has been retained to render a legal opinion regarding application of the offsets.
24
(Id.) Contrary to Mr. Chapman s declaration, (¶ 5), the newsletter nowhere refers to a
25
challenge. The other documents submitted by Mr. Chapman, with two exceptions, are not
26
from Plaintiffs or their counsel and are not probative. The document dated March 15, 2002
27
from the Garrett Retirees Action Committee, (id. Exhibit C), likewise makes no mention of
28
Case 2:04-cv-00424-ROS
Document 240-2
Filed 10/03/2006
Page 1 of 4
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
any lawsuit, but instead talks about a claim clearly referring to the administrative claims that were submitted to the Plan several months later. The April 2002 email, (id. Exhibit B), advertising a meeting by the Retirees Action Committee, is likewise not probative of a divergence of interests because Plaintiffs filed administrative claims and submitted all of their claims to the Plan in July 2002, several months after that document was created. Other unknown persons descriptions of Retiree communications are not relevant to the issue at hand, namely: whether the fiduciary exception should somehow not apply because, prior to even considering Plaintiffs claims or even knowing what they were, Defendants professed to have determined that the interests had diverged and that litigation was inevitable. In Defendants proposed surreply brief (erroneously denominated a reply), Defendants incorrectly characterize Plaintiffs position as arguing that the fiduciary exception can never give way prior to a decision on an appeal. As United States v. Mett, 178 F.3d 1058, 1063-65 (9th Cir. 1999) makes clear, the exception can give way when the advice rendered is directed to the fiduciary s own personal liability, a matter not at issue here, or when there has been a legitimate divergence of interests.1 As Plaintiffs pointed out in their brief, there could be no divergence of interests here prior to the decision on the administrative appeal because there was no ruling indicating that the interests of the Plan and the interests of the Retirees were diverse.2 See Gwen Thayer Handelman et. al., Corporate Counsel's Guide to ERISA
For this latter point, the Mett court cites Talbot v. Marshfield , 12 L.T.R. 761, 762 (CH. 1865) to distinguish between advice dispensed prior to the threat of suit and advice dispensed after commencement of suit, ruling that the former was subject to disclosure but the latter was not. 178 F.3d at 1063. The court in Mett, a case involving a criminal prosecution for embezzlement, distinguished other cases and ruled that the documents were protected from disclosure because they were devoted entirely to advising Mett and Wiesman regarding their own personal and civil criminal exposure... and the advice ...was not prepared for the benefit of the plan or the beneficiaries nor was it advice regarding administration of the plan. Id. at 1064.
1
Defendants, in apparent recognition that their opposition to Plaintiffs motion to compel paints a vivid portrait of conflicted decision-making, now belatedly attempt to
2
2
Case 2:04-cv-00424-ROS
Document 240-2
Filed 10/03/2006
Page 2 of 4
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
§ 25:45 (2006) ( In claims litigation, several courts applying the Mett analysis have ordered pre-decisonal advice disclosed, whereas post-decisional advice remains protected. ). In the absence of personal liability issues like in Mett or evidence that the interests of the parties had diverged, the fiduciary exception applies. Contrary to Defendants assertion, merely because the Retirees had no duty to exhaust their administrative remedies with respect to their claims regarding violations of ERISA, does not establish that the resolution of those claims are unrelated to plan administration. Defendants were obliged to respond to the claims that the Plan was being administered in violation of legal requirements and they did so. Plaintiffs went the extra mile to avoid litigation by submitting all of their claims to the Administrator. Litigation was not made inevitable by the steps taken to avoid it. Advice rendered on a question presented to the trustees regarding the trust fund s obligations to its participants either under the plan terms or under the law is advice rendered for the benefit of all participants and therefore discoverable. In the absence of any evidence that the claimants were bent on filing suit regardless of the outcome of the administrative process, it is only when a plan administrator makes a final decision to reject a claim that the fiduciary exception ceases to apply. Respectfully submitted this 4th of October 2006.
MARTIN & BONNETT, P.L.L.C.
rehabilitate themselves by endeavoring to isolate former in house counsel Mr. O Neill. (Doc. 239 p. 6 n.2.) Defendants efforts are unavailing. Mr. O Neill stated in his declaration that he provided advice to the Plan Administrator regarding its responses to the administrative claims and appeals Ms. Martin submitted on behalf of several hundred retirees. (O Neill Decl. ¶ 4.) Defendants brief relied heavily on Mr. O Neill s declaration as the basis for claiming that the documents he prepared, requested or reviewed for the Plan Administrator should not be produced on the alleged basis of his conclusion that litigation was inevitable. (See, e.g., Defs Br, Doc. 225, containing at least 18 references to O Neill Decl.)
3
Case 2:04-cv-00424-ROS
Document 240-2
Filed 10/03/2006
Page 3 of 4
1 2 3 4 5 6 7 8 9 10 11 12 13
By: s/ Susan Martin Susan Martin Daniel L. Bonnett Jennifer L. Kroll 3300 North Central Avenue, Suite 1720 Phoenix, AZ 85012-2517 (602) 240-6900 Attorneys for Plaintiffs
CERTIFICATE OF SERVICE I hereby certify that on October 4, 2006, 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: David B. Rosenbaum Dawn L. Dauphine Osborn Maledon, P.A. 2929 North Central Ave., Suite 2100 Phoenix, AZ 85012-2794 and
14 15 16 17 18 19 20 21 22 s/T. Mahabir 23 24 25 26 27 28 4
Michael Banks William Delaney John G. Ferreira. Azeez Hayne. Morgan Lewis & Bockius LLP 1701 Market Street Philadelphia, PA 19103 Amy Covert Proskauer Rose LLP One Newark Center, 18th Floor Newark , NJ 07102-5211 Attorneys for the Defendants
Case 2:04-cv-00424-ROS
Document 240-2
Filed 10/03/2006
Page 4 of 4