Diana Bell v. Pfizer, Inc. Stock, No. 07-5390 (2d Cir. 2010)

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07-5390-cv Diana Bell v. Pfizer, Inc. Stock and Incentive Plan et al. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2008 4 5 (Argued: March 10, 2009 6 Decided: August 30, 2010) Docket No. 07-5390-cv 7 8 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9 10 11 DIANA BELL, Plaintiff-Appellant, 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 v. PFIZER, INC., PFIZER, INC. STOCK AND INCENTIVE PLAN, PFIZER EMPLOYEE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE, PFIZER, INC. RETIREMENT ANNUITY PLAN, PFIZER, INC. RETIREMENT COMMITTEE, Defendants-Appellees. - - - - - - - - - - - - - - - - - - - - - - - - - - - - B e f o r e: WINTER and SACK, Circuit Judges, and COGAN, District Judge.* _________ *The Hon. Brian M. Cogan of the United States District Court for the Eastern District of New York, sitting by designation. 1 1 Appeal from a verdict in a bench trial in the United 2 States District Court for the Southern District of New York 3 (Samuel Conti, Judge), finding that appellees had not breached 4 any fiduciary duties owed to appellant under ERISA. 5 on the ground that any misstatement did not relate to an ERISA 6 plan. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 We affirm Judge Cogan dissents in a separate opinion. ROBERT D. KRAUS (Geoffrey A. Mort, on the brief) Kraus & Zuchlewski LLP, New York, New York, for Plaintiff-Appellant. ROBERT P. LEWIS (Peter J. Engstrom, Nancy Chung Allred, Vasilia F.L. Pappas, on the brief), Baker & McKenzie LLP, New York, New York, for DefendantsAppellees. WINTER, Circuit Judge: Diana Bell, M.D., appeals from Judge Conti s bench trial 23 verdict that appellees had not breached any fiduciary duties 24 owed to her under the Employee Retirement Income Security Act 25 of 1974 ( ERISA ), 29 U.S.C. § 1001 et seq. 26 On May 31, 2003, Bell terminated her employment with 27 Pfizer, Inc. Before leaving Pfizer, Bell made various 28 inquiries of Pfizer Human Resources ( HR ) personnel and 29 Benefits administrators regarding her eligibility for, and the 2 1 terms of, retirement1 under the Pfizer Retirement Annuity Plan 2 (the PRAP or the Plan ), including the treatment of her 3 stock options if she left Pfizer s employ. 4 she received various writings and oral advice assuring her that 5 her stock options would remain exercisable for the remainder of 6 the grant period if she left Pfizer. 7 August 15, 2003, Bell was informed by Pfizer that certain of 8 her stock options had been cancelled and that others would be 9 cancelled on September 1, 2003. 10 She alleges that However, on or about Bell commenced the instant action in December 2003. After 11 a bench trial, the district court held that any 12 misrepresentation concerned only appellant s stock benefits 13 under a non-ERISA plan and, therefore, did not violate any 14 fiduciary obligations under ERISA. Bell appeals. 15 We affirm on the ground that the only misinformation 16 conveyed did not relate to appellant s status under the ERISA 17 plan. 18 19 20 21 BACKGROUND a) Pfizer s Retirement Annuity and Stock Incentive Plans At all relevant times, employees at Pfizer were eligible for various retirement benefits under the Pfizer Retirement 1 In this opinion, we use the terms retire and retirement to refer only to an employee leaving Pfizer s employment under Sections 4a, b, or d of Pfizer s ERISA plan. The parties and main participants in the case used the term colloquially to refer to employees who leave and cease work. Moreover, Pfizer s stock option plan also uses the broader meaning. 3 1 Annuity Plan, an employee retirement plan governed by ERISA and 2 administered by Pfizer through the Pfizer, Inc. Retirement 3 Committee. 4 retirement: 5 PRAP retirement benefits are available to members when they 6 reach age 65; (ii) late retirement under Section 4b, in which 7 PRAP retirement benefits are available to members who remain in 8 service after age 65; and (iii) early retirement under Section 9 4d, in which PRAP retirement benefits are available to 10 11 The PRAP provides for three categories of (i) normal retirement under Section 4a, in which qualifying members who have reached age 55. The PRAP specifically defines retire or retirement for 12 purposes of the Plan as to terminate or the termination of 13 service . . . after meeting the requirements of Sections 4a, b, 14 or d. . . . 15 retirement under Sections 4a, b or d of the PRAP. 16 It is undisputed that Bell did not qualify for The PRAP also provides benefits for a narrow class of 17 employees who wish to cease working but are not eligible to 18 retire under Sections 4a, b or d. 19 pursuant to Section 4k of the PRAP, which is entitled Special 20 Rules for Certain Members Who Are Not Eligible to Retire Under 21 Sections 4a or 4d and is known by Pfizer employees as the 22 Pre-1994 benefit. 23 upon termination to employees who have completed at least 24 five years of creditable service prior to January 1, 1994 and 25 meet certain other conditions. These benefits are paid Section 4k provides an annuity benefit As elaborated infra, Bell 4 1 understood at all relevant times that she was eligible for, but 2 only for, the Pre-1994 benefit. 3 In addition to the PRAP, Pfizer also offers its employees 4 a Stock and Incentive Plan ( SIP ), a non-ERISA plan managed by 5 appellee Pfizer Employee Compensation and Management 6 Development Committee. 7 employee s stock options terminate when the employee ceases to 8 be an employee for any reason including retirement, unless 9 (in pertinent part) the optionee has retired or is eligible 10 for retirement under Sections 4a., b., or d. of the [PRAP]. 11 The SIP thus uses the term retirement more broadly than the 12 PRAP. 13 eligible to retire, under Sections 4a, b, or d of the PRAP, the 14 employee s stock options remain exercisable for the remainder 15 of the ten-year life of the option grant, except for options 16 that had been granted within one year of retirement. 17 under Section 4k, therefore, falls within the terminate for 18 any reason clause of 6(f) of the SIP and causes the employee s 19 stock options to terminate. See supra Note 1. Pursuant to Section 6(f) of the SIP, an If the employee retires, or is Leaving 20 While employed at Pfizer, Bell participated in the SIP, 21 and on various occasions received and exercised Pfizer stock 22 options. 23 prior to commencing her lawsuit, she, along with her lawyer Although Bell never read the SIP in its entirety 5 1 husband Wesley Light,2 had read various documents entitled 2 Points of Interest that accompanied each of her stock option 3 grant letters. 4 terms, the salient features of the SIP, including the treatment 5 of stock options upon the employee s retirement or other 6 termination of employment with Pfizer. 7 The Points of Interest describe, in layman s For example, the Points of Interest that were mailed with 8 Bell s 1993 stock option grant specifically addressed the 9 question, What happens if I retire under the Company s 10 11 12 13 14 15 16 17 18 19 20 retirement plan? as follows: If you retire from the Company on or before August 25, 1994, your options will terminate on the date of your retirement. Thereafter, if you retire under Section 4, parts a. (normal retirement), b. (late retirement), or d. (early retirement) of the [PRAP] . . . you will have the remainder of the option term to exercise the options that were exercisable on the date of your retirement. . . . 21 In addition, the 2003 Points of Interest that was mailed 22 with Bell s 2003 stock option grant stated: 23 24 25 26 27 28 29 For any and all purposes with respect to this 2003 key employee stock option grant, retirement is defined as having attained a minimum age of 55 and ten years of service at the time of your separation from the company. 2 While it is not a dispositive fact, we note that throughout her planning for leaving Pfizer, Bell was assisted by her lawyer husband who prepared detailed financial analyses of the consequences of her proposed leaving of Pfizer s employ. 6 1 2 b) Bell s 2001 Retirement Plans In 2001, when Bell was 49 years old, she received a booklet 3 from Pfizer regarding retirement, which explained the Pre-1994 4 benefit, i.e., Section 4k. 5 Pfizer distributed to its legacy employees -- those who had 6 always been directly employed by Pfizer -- which stated that 7 [if] you re a legacy Pfizer [] Colleague age 50 or older, 8 [Pfizer s] retirement counselor can answer all your retirement 9 questions. Bell also received a pamphlet that According to this pamphlet, [t]he retirement 10 counselor is now your primary source for information about 11 eligibility and participation [and] provisions of the [PRAP], 12 and will provide, inter alia, one-on-one counseling; a 13 comprehensive, personalized summary of impact of retirement on 14 benefits; [and] a summary of outstanding stock options. 15 Id. After reading these materials, Bell concluded that she could 16 leave Pfizer under the Pre-1994 benefit provision; however, she 17 desired clarification as to the extent of her benefits under this 18 provision, including the treatment of her stock options. 19 then contacted Leighton Gleicher in Pfizer s HR department, who 20 referred Bell to Payal Sahni, a Pfizer HR Specialist. 21 February or March 2001, Bell and Sahni met in person, and later 22 continued their dialog via email. 23 Bell In Sahni ultimately referred Bell s benefits questions to 24 Kimberly Malik in Pfizer s pension benefits administration 25 department. Sanhi forwarded to Malik an email from Bell with the 7 1 subject line, Info on Pre- 94 benefits w/ retirement at age 50. 2 Malik originally responded to Bell s inquiries with a preliminary 3 pension estimate based on a projected retirement date of 4 February 1, 2007" (after Bell s 55th birthday). 5 estimate referred to Bell as a retiree and her employment 6 termination as retirement. 7 The pension On receipt of her pension estimate, Bell noticed that it 8 assumed a termination date of February 1, 2007, whereas the 9 information she sought from Sahni was what her pension benefits 10 would be if she left in 2002, at age 50. Bell explained this to 11 Sahni, who then requested an additional preliminary estimate from 12 Malik that assumed Bell terminated employment at age 50. 13 With respect to Bell s stock option questions, Sahni 14 directed Bell to Jacqueline Gomez, a stock options analyst at 15 Pfizer. 16 her stock options; the two continued their discussion via email. 17 In an email dated May 10, 2001, Bell asked Gomez to confirm the 18 following: 19 20 21 22 23 24 25 26 27 28 29 30 In May 2001, Bell contacted Gomez by phone to discuss As I understand it, if I retire under the [PRAP], I would retain all of my options (even those that were not vested) provided I remain employed at Pfizer for at least one year after the grant date. I would be able to exercise these options at any time during the life of the option. . . . Would you please confirm that my understanding is correct and if this information can be found in some publication, can you direct me to it? In her reply email to Bell, Gomez stated: 8 1 2 3 4 5 6 7 Yes, those are the general guidelines for retirement under the [PRAP]. That information is documented in the Points of Interest which is sent to you along with the grant letter you receive when stock options are granted to you. In June 2001, Malik sent Sahni a memorandum describing 8 Bell s estimated benefits based upon a projected termination 9 date of April 1, 2002. Malik s memorandum stated that [a]s a 10 vested annuitant, Bell would be eligible to receive early 11 payment of her accrued benefit upon obtaining age 50, or anytime 12 thereafter. 13 memorandum did not refer to Bell as a retiree or to her 14 employment termination as retirement. 15 Unlike the March 27 memorandum, Malik s June In April 2002, Bell sent a letter to her supervisor, Gary 16 Jortner, designating July 19, 2002 as her final day of 17 employment. 18 On July 15, 2002, four days before Bell s scheduled final 19 day at Pfizer, the company announced plans to acquire Pharmacia- 20 Upjohn. 21 plans: 22 the acquisition, which left many of Bell s stock options 23 underwater; second, Bell viewed the acquisition and 24 reorganization of certain departments as providing her new 25 opportunities to advance in her career within Pfizer. 26 decided not to retire, and so informed the relevant HR staff 27 members. 28 c) The proposed merger had two effects on Bell s retirement first, Pfizer s stock fell nearly 20 percent on news of Bell s 2003 Termination Plans 9 Thus, Bell 1 When the Pharmacia-Upjohn acquisition did not enhance Bell s 2 advancement prospects, she again decided to leave Pfizer in 3 Spring 2003. 4 resignation letter, stating This letter is notice that I will be 5 taking retirement under the [PRAP] for pre-1993 employees, 6 effective June 1, 2003. 7 Bell wrote I will be taking an early retirement, effective June 8 1, 2003. 9 that she change the words taking an early retirement and On April 24, 2003, Bell sent Jortner a second In her original draft of this letter, However, her husband recommended, and Bell agreed, 10 replace it with retiring under the Company s Retirement Annuity 11 Plan. 12 accurate statement ambiguous, she knew at the time that she was 13 not eligible for retirement within the meaning of Sections 4a, b, 14 or d of the PRAP. 15 Although Bell accepted this advice, which rendered an After mailing her letter to Jortner, Bell called Pfizer s 16 then-new Retirement Hotline and spoke with retirement counselor 17 Peggy McGee. 18 Kit, which referred to Bell as an employee who is eligible to 19 retire under the [PRAP]. 20 Thereafter, McGee sent Bell a Pfizer Retirement McGee also contacted Gomez in the SIP office and asked her 21 to prepare a stock option summary for Bell. 22 the summary on the assumption that Bell was retiring under 23 Sections 4a, b, or d of the PRAP. 24 Gomez assumed that she would not have been asked by McGee to 25 prepare a summary for someone who was not retiring under the 10 Gomez then prepared This error occurred because 1 2 3 PRAP, i.e., under Sections 4a, b, or d. After receiving and reviewing the Retirement Kit, Bell wrote an email to McGee that stated in relevant part: 4 5 6 7 8 9 10 11 12 13 Many of the documents I have state that retirement is defined by the rule of 90" or by age > 55 + 15 years of credible service. However, we know that under the older, but still honored rule, there is the option to retire at age > 50 w/ receipt of pre-93 pension. I hope I m correct that this applies to retention of previously granted stock options. Can you please confirm this as this is key to my decision to retire. 14 sending the email quoted above, Bell received the Stock Option 15 Summary Sheet prepared by Gomez, which designated Bell as 16 retirement eligible and listed the majority of her options as 17 exercisable for life. 18 interpreted the letter as an answer to her question to McGee 19 regarding her options. 20 sent a day prior to Bell s email to McGee. 21 Bell left Pfizer on May 31, 2003. McGee never responded to Bell s inquiry. However, after At trial, Bell testified that she However, the letter had actually been Since that date, Bell has 22 been regularly receiving the pre-1994 pension benefit under 23 Section 4k of the PRAP. 24 Pfizer SIP status report, which stated that some of her stock 25 options had expired, and the balance would expire in several 26 weeks. 27 been incorrectly treated as a retiree with respect to her stock 28 options when she left Pfizer. 29 the SIP Administration office sent Bell a letter stating: However, in August 2003, Bell received a Bell inquired about the report and was told that she had On August 22, 2003, the manager of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 [A]t the time of your termination from Pfizer on May 31, 2003, you did not meet the retirement eligibility criteria under the [PRAP] . . . . With regard to your stock options, while you did receive a statement indicating the treatment of stock options at Pfizer if you were retirement eligible, further investigation provided that you did not separate as a retirement but as a termination. . . . As we discussed you had outstanding 1995 and 1996 options that lapsed on May 31, 2003. . . . Your grants made in 1997 and later will lapse on September 1, 2003 and will no longer be available for exercise after that date. Bell exercised the remainder of her stock options on or 17 around August 28, 2003. 18 e) District Court Proceedings 19 Bell filed the present action asserting a host of state and 20 federal claims for, inter alia, promissory estoppel, conversion, 21 breach of contract, negligent misrepresentation, and a breach of 22 fiduciary duty under ERISA. 23 declaratory judgment that she was retirement eligible when she 24 ended her employment with Pfizer, reinstatement of her employment 25 at Pfizer, reinstatement of her stock options or issuance of 26 comparable options, or monetary damages estimated to exceed $3 27 million. 28 Her complaint sought, inter alia, a Before appellees moved for summary judgment, appellant 29 withdrew all claims based on state law, leaving only her ERISA 30 claims. 31 breach of fiduciary duty claim. 32 Pfizer acted in a fiduciary capacity in making statements to Judge Wood denied appellees motion as to the ERISA Judge Wood concluded that 12 1 [Bell] about her eligibility or ineligibility for early 2 retirement under the PRAP, and in answering [Bell s] questions on 3 the same subject. 4 2007). 5 material fact existed as to whether Pfizer made material 6 misrepresentations or omissions and whether Bell relied upon 7 these misrepresentations or omissions to her detriment. 8 9 Bell v. Pfizer, 499 F.2d 404, 410 (S.D.N.Y. Judge Wood further concluded that genuine issues of The case was then reassigned to visiting Judge Conti, who held a bench trial on the remaining claim in October 2007. Prior 10 to the parties summations, Judge Conti expressed concern with 11 Judge Wood s summary judgment ruling. 12 had possibly conflated the SIP and PRAP in finding that Pfizer 13 employees acted in a fiduciary capacity when they advised Bell 14 about her retirement eligibility and treatment of her stock 15 options. He thought that Judge Wood 16 On November 8, 2007, the district court concluded that 17 Pfizer had not breached its ERISA fiduciary duties because [t]he 18 misrepresentations at the center of this dispute are not about 19 whether or not Dr. Bell was eligible for PRAP benefits. 20 was no point at which a Pfizer employee led Bell to believe that 21 she was eligible for early, normal, or late retirement under 22 sections 4d, 4a, or 4b of the PRAP. 23 contrary. . . . 24 SIP, which is not an ERISA plan and thus does not give rise to 25 any fiduciary duties. There Dr. Bell does not allege the Rather, the misrepresentations relate to the Bell v. Pfizer, No. 03-CV-9945 2007 WL 13 1 3355386 at *9 (S.D.N.Y. Nov. 8, 2007). 2 that even if Bell had somehow persuaded it that the fiduciary 3 duty from the PRAP extended to the SIP, she had still failed to 4 prove that the alleged misrepresentations were made in the course 5 of the fiduciary relationship because the statements were largely 6 made in the performance of ministerial functions, including the 7 application of rules determining eligibility for participation 8 or benefits, calculation of services and compensation credits for 9 benefits and calculation of benefits. 10 The court also concluded Id. at 11. This appeal followed. 11 DISCUSSION 12 As noted, appellant withdrew the various state law claims 13 against Pfizer. 14 district court decision violated the law of the case doctrine 15 because Judge Conti did not follow Judge Wood s earlier decision. 16 However, Judge Wood s decision does not bind us as to any issue, 17 and we are free, indeed obligated, to apply our own views as to 18 governing law. 19 351 (2d Cir. 1996). 20 a) 21 We also note appellant s argument that the Steinborn v. Daiwa Sec. Am., Inc., 104 F.3d 351, ERISA s Fiduciary Duty Section 404 of ERISA imposes fiduciary duties on 22 administrators of ERISA retirement plans that, in pertinent part, 23 require a fiduciary to discharge his duties with respect to a 24 plan solely in the interest of the participants and beneficiaries 25 . . . for the exclusive purpose of: 14 (i) providing benefits to 1 participants and their beneficiaries; and (ii) defraying 2 reasonable expenses of administering the plan. 3 § 1104(a)(1). 4 discharge their duties with the care, skill, prudence, and 5 diligence under the circumstances then prevailing that a prudent 6 man acting in a like capacity and familiar with such matters 7 would use . . . . 8 9 29 U.S.C. The statute also mandates that fiduciaries Id. Section 502 of ERISA sets forth a civil enforcement scheme, defining the types of civil actions that can be brought and the 10 parties entitled to seek relief under the Act. 11 § 1132. 12 action: 13 14 15 16 17 18 19 20 See 29 U.S.C. In particular, Section 502(a)(3) authorizes a civil by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates . . . the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of . . . the terms of the plan. Id. § 1132(a)(3). 21 Section 502(a)(3) has been held to allow plan beneficiaries 22 to bring individual actions arising from an employer s fiduciary 23 breach, see Varity Corp. v. Howe, 516 U.S. 489, 507-15 (1996), 24 but is restricted in the kinds of relief available. 25 West Life Annuity Ins. Co. v. Knudson, 534 U.S. 204, 209-20 26 (2002) (strictly limiting relief under Section 502(a)(3) to 27 equitable relief); Mertens v. Hewitt Assoc., 508 U.S. 248, 256 28 (1993) (limiting relief under Section 502(a)(3) to those 15 See Great- 1 categories of relief that [are] typically available in equity. 2 . . . ). 3 The threshold question in every case charging breach of 4 ERISA fiduciary duty is not whether the actions of some person 5 employed to provide services under a plan adversely affected a 6 plan beneficiary s interest, but whether that person was acting 7 as a fiduciary (that is, was performing a fiduciary function) 8 when taking the action subject to complaint. 9 Herdrich, 530 U.S. 211, 226 (2000). 10 Pegram v. The statute generally provides that a person is a 11 fiduciary with respect to a plan, and therefore subject to ERISA 12 fiduciary duties, to the extent that he or she exercises any 13 discretionary authority or discretionary control respecting 14 management of the plan, or has any discretionary authority or 15 discretionary responsibility in the administration of the plan. 16 Varity, 516 U.S. at 498 (quoting 29 U.S.C. § 1002(21)(A)). 17 Under this definition, a person . . . has [fiduciary] status 18 only to the extent that he has or exercises the described 19 authority or responsibility. 20 F.3d 78, 87 (2d Cir. 2001) (alterations in original) (quoting 21 F.H. Krear & Co. v. Nineteen Named Trs., 810 F.2d 1250, 1259 (2d 22 Cir. 1987)). Flanigan v. Gen. Elec. Co., 242 23 In addition, although Congress intended the term fiduciary 24 to be broadly construed, Frommert v. Conkright, 433 F.3d 254, 271 25 (2d Cir. 2006), even [this] broad construction has limits. 16 1 Chapman v. Klemick, 3 F.3d 1508, 1512 (11th Cir. 1993). 2 outside these limits are plan employees who perform ministerial 3 tasks with respect to the plan, such as the application of rules 4 determining eligibility for participation, preparation of plan 5 communication materials, the calculation of benefits, and the 6 maintenance of employee records. 7 (1995); Blatt v. Marshall & Lassman, 812 F.2d 810, 812 (2d Cir. 8 1987). 9 discretionary authority and do not, therefore, implicate any 10 11 Falling See 29 C.F.R. § 2509.75-8 These tasks have been held not to require the exercise of fiduciary duty. Moreover, because employers often act as both plan 12 administrators and employers, ERISA permits employers to wear 13 two hats, and not all actions by an employer fall under its 14 fiduciary role. 15 1402, 1416-17 (2d Cir. 1985) (internal quotation marks omitted), 16 abrogated on other grounds by Mead Corp. v. Tilley, 490 U.S. 714, 17 721 (1989). 18 and to the extent that they function in their capacity as plan 19 administrators, not when they conduct business that is not 20 regulated by ERISA. 21 omitted). 22 Amato v. Western Union Int l, Inc., 773 F.2d Rather, employers assume fiduciary status only when Id. (internal citations and quotation marks Once a defendant s fiduciary status has been determined, the 23 next issue to be resolved is whether the defendant s conduct 24 breached a fiduciary duty. 25 fiduciary duties that relate principally to the management of The statute imposes a number of 17 1 plan assets, the maintenance of records, disclosure of specified 2 information, and avoidance of conflicts of interest. 3 Varity, 516 U.S. at 526 n.5 (Thomas, J. dissenting) (citing 4 Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 142-43 5 (1985)). 6 See ERISA contains an elaborate scheme of disclosure 7 requirements, none of which are pertinent to the instant matter.3 8 In addition, courts, drawing from the common law of trusts, have 9 interpreted the scope of ERISA fiduciary duties to include a duty 10 to avoid intentional material misrepresentations in plan 11 administrators communications with plan beneficiaries about the 12 contents of a plan. 13 held that fiduciaries may not knowingly or intentionally mislead 14 plan beneficiaries as to changes -- whether effective or under 15 consideration -- to employee benefit plans. 16 F.3d at 84 ( Fiduciaries may be held liable for statements 17 pertaining to future benefits if the fiduciary knows those 18 statements are false or lack a reasonable basis in fact. ); 19 Ballone v. Eastman Kodak Co., 109 F.3d 117, 126 (2d Cir. 1997); 20 Pocchia v. NYNEX Corp., 81 F.3d 275, 278 (2d Cir. 1996); Mullins See, e.g., id. at 506. 3 For example, we have See Flanigan, 242 With respect to disclosure requirements, the statute imposes a comprehensive set of reporting and disclosure requirements, which comprises part of an elaborate scheme . . . for enabling beneficiaries to learn their rights and obligations at any time. Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 83 (1995) (citing 29 U.S.C. §§ 1021-31). 18 1 v. Pfizer, Inc., 23 F.3d 663, 669 (2d Cir. 1994).4 2 Finally, where a plaintiff asserts a breach of fiduciary 3 claim based on a material misrepresentation or omission, the 4 plaintiff must establish detrimental reliance. 5 Trust Fund of the Pension Hospitalization & Benefit Plan of the 6 Elec. Indus., 131 F. App x 740 (2d Cir. 2005) (no breach of 7 fiduciary duty where participant did not rely on administrator s 8 alleged misrepresentation). 9 fiduciary s misrepresentation must be material. King v. Pension A related concept is that the That is, there 10 must be a substantial likelihood that the misrepresentation 11 would mislead a reasonable employee in making an adequately 12 informed decision about if and when to retire. 13 Pfizer, 267 F.3d 181, 192 (2d Cir. 2001) (quoting Ballone, 109 14 F.3d at 123). 15 b) 16 Caputo v. Bell s Breach of Fiduciary Duty Claim The district court concluded that misrepresentations or 17 omissions relied upon by Bell related solely to the SIP, and, 18 consequently, could not support an ERISA breach of fiduciary duty 4 Fiduciary liability may also arise from a fiduciary s material omissions, or failure to speak. See Pocchia, 81 F.3d at 279. However, our decisions have narrowed a fiduciary s affirmative duty of disclosure to a limited number of circumstances. See, e.g., Board of Trustees of the CWA/ITU Negotiated Pension Plan v. Weinstein, 107 F.3d 139, 146-47 (2d Cir. 1997) (holding that plan administrator has no affirmative duty to disclose actuarial valuation reports because it is inappropriate to infer an unlimited disclosure obligation [under ERISA] on the basis of general provisions that say nothing about disclosure ); Weiss v. Cigna Healthcare, 972 F. Supp. 748, 754 (S.D.N.Y. 1997) (ruling that plan fiduciary not required to disclose physician compensation arrangements because such disclosure is not required by ERISA); In re Polaroid ERISA Litigation, 362 F. Supp. 2d 461, 478 (S.D.N.Y. 2005) (same). 19 1 claim. 2 We agree. Nothing in the record supports Bell s claim on appeal that, 3 in 2001 or in 2003, she was misled into believing that she was 4 eligible to retire under Sections 4a, b, or d of the PRAP. 5 true that the terms retire or retirement were 6 indiscriminately used by PRAP representatives to refer to Bell s 7 intentions and ultimate act of leaving the company, while the 8 PRAP used those words only in connection with Sections 4a, b, and 9 d. It is However, the use of retire and retirement was 10 colloquially correct. 11 used the terms in the broader sense also. 12 Bell used it herself. Moreover, the SIP Most significantly, however, Bell clearly understood that 13 Sections 4a, b, and d did not apply to her. 14 inquired about leaving Pfizer and Malik sent Bell benefit 15 projections based on a retirement age of 55, Bell s emails and 16 phone conversations with Sahni clearly stated that Bell sought 17 information regarding benefits only under the special Pre-1994 18 benefits plan. 19 reads: 20 district court found as a fact that pre-1994 benefits was the 21 term used to refer to the Special Rules under Section 4k.) 22 Bell v. Pfizer, 2007 WL 3355386 at *2. 23 When Bell first For example, the subject matter of these emails Info on pre- 94 benefits w/ retirement at age 50. (The After losing and then regaining interest in leaving Pfizer 24 in 2003, and when McGee sent Bell a Retirement Kit that 25 referred to Bell as an employee who is eligible to retire under 20 1 [the Plan], Bell emailed McGee that she was retiring under the 2 special plan, i.e., Section 4k. 3 was clear she was not leaving Pfizer under Sections 4a, b, or d 4 of the PRAP and that she and her advisor husband knew that she 5 did not fit within those categories.5 6 claim, therefore, that Bell was misled as to her status under the 7 PRAP. 8 9 Finally, Bell testified that she There is no sustainable The only misstatement that could have misled Bell was made by Gomez, but only in 2003. When Bell first contacted Gomez in 10 2001, Bell asked Gomez whether she could retain her stock options 11 if I retire under the Pfizer retirement annuity plan, and asked 12 further for direction to a publication in which this 13 information can be found. 14 general guidelines under the Pfizer annuity plan and, with 15 regard to the inquiry as to publication, referred Bell to the 16 Points of Interest that accompanied every stock option grant. Gomez replied: yes, those are the 17 Gomez s response was accurate given the question posed: 18 continuation of stock options does generally occur under the 19 retirement options offered under the PRAP. 20 Bell s request for a reference to relevant documents, Gomez 21 referred Bell to the Points of Interest, which both Bell and 22 her husband reviewed prior to Bell s departure from Pfizer. 5 the In response to Some of the confusion may have been caused by Bell s following the recommendation of her husband to replace early retirement to retiring under the company s Retirement Annuity Plan in the April 2003 letter to Jortner. The replacement phrasing was less accurate than the original and more likely to be understood to qualify Bell under the SIP. 21 1 These expressly stated that a departing employee s options would 2 expire unless the employee retired under Sections 4a, b, or d 3 of the Plan. 4 this point, but Bell had been provided accurate and dispositive 5 information on her stock option rights if she left Pfizer. 6 Thus, not only was there no misrepresentation at The misstatement as to the status of Bell s stock options 7 came in May 2003, when Gomez mailed Bell a Stock Option Summary 8 Sheet that mistakenly designated her as Retirement Eligible 9 and indicated that her options would be valid for the life of 10 11 their respective grants. As described earlier, this document was prepared and sent as 12 a result of a misunderstanding between McGee and Gomez. When 13 McGee sent the Retirement Kit to Bell, McGee also asked Gomez 14 to prepare a summary of Bell s stock options. 15 the assumption that McGee would have made such a request only if 16 the particular employee was eligible to retire under Sections 4a, 17 b, or d. 18 would last for the life of the grant and was promptly mailed. 19 The day after the summary was mailed, Bell responded to the 20 Retirement Kit by noting that she was actually leaving under 21 the Special Plan and by asking for information about the status 22 of the stock options. 23 the summary mailed by Gomez, Bell claims to have assumed that it Gomez did so on The summary thus indicated that Bell s stock options McGee did not respond. 22 When Bell received 1 was a response to Bell s email to McGee.6 2 asserts, therefore, that a Plan employee, McGee, was a cause in 3 fact of Bell s claimed loss because McGee caused Gomez to act on 4 an incorrect assumption about Bell s status and to send out an 5 incorrect summary regarding Bell s stock options. 6 Bell correctly The only issue before us is whether these facts constitute a 7 breach of the fiduciary duty imposed on an ERISA fiduciary. 8 various state law claims concerning the incorrect information 9 conveyed about Bell s stock options have been withdrawn. The That 10 withdrawal limits Bell to the relief authorized under Section 11 502(a)(3), which is limited to equitable relief, Knudson, 534 12 U.S. at 207-20, and does not include monetary damages, Coan v. 13 Kaufman, 457 F.3d 250, 264 (2d Cir. 2006). 14 could be ordered to give Bell stock options equivalent to those 15 lost, which would require a purchase, is a question that we do 16 not decide. 17 issues that we also do not decide. 18 may be liable for unintentional misunderstandings among, or 19 innocent mistakes by, Plan or company employees involving details 20 and calculations concerning termination benefits. Whether appellees Also, Bell s ERISA claim raises a host of liability 6 These include whether a Plan Another issue There are no district court findings as to Bell s reliance on the summary. While her version of events is certainly plausible, there is a countercase to be made. The Points of Interest, which accurately described the effect of early termination on stock options, were received and read by Bell and her husband. Also, although Bell s email to McGee emphasized the importance of the stock options to her retirement decision, she had set a retirement date of June 1, 2003 before receiving Gomez s misleading summary. 23 1 we need not reach is a Plan s liability for such errors when 2 fully accurate documents describing those details and 3 calculations have been provided to the beneficiary. 4 here debate that issue in arguing whether Bell s asserted 5 reliance on Gomez s summary was reasonable. 6 The parties We do not reach these issues because Bell was 7 unintentionally misled, if at all, only as to matters other than 8 the terms of the Plan itself and her status under those terms. 9 While numerous factors other than ERISA pension benefits are 10 critical to a person s retirement decision, advice or 11 misstatements regarding them goes well beyond any duty imposed by 12 ERISA. 13 eligible to retain their stock options after employment 14 termination, used the employees status under the PRAP s 15 provisions. 16 PRAP provisions. 17 continuation of her stock options under the SIP. To be sure, the SIP, in designating those employees But Bell was not misled as to her status under those Rather, she was misled, if at all, as to the 18 As Bell concedes, the SIP is not an ERISA plan, but is 19 rather a distinct employment benefit not governed by ERISA. 20 SIP is: 21 PRAP; (ii) overseen by a Pfizer committee (i.e., the Pfizer 22 Compensation Committee) that has no authority or responsibility 23 concerning the PRAP or Plan benefits; and (iii) administered by 24 non-Plan employees who bear no responsibility for administering 25 ERISA Plan benefits. The (i) governed by a written document separate from the The PRAP itself contains no provision 24 1 providing for employee stock options, save for a provision that 2 excludes stock options from the definition of Earnings. 3 In essence, Bell seeks to extend the ERISA fiduciary duty to 4 unintentional misstatements regarding collateral, non-ERISA plan 5 consequences of a retirement decision.7 6 statute weighs against such an extension. 7 a fiduciary shall discharge his duties with respect to a plan 8 solely in the interest of participants and beneficiaries. 9 U.S.C. § 1104 (emphasis added). The language of the The statute states: 29 This language imposes no duties 10 on ERISA fiduciaries with regard to all information relevant to 11 retirement. 12 confines the fiduciary obligation of an employer to actions in 13 its capacity as administrator of the ERISA plan. 14 F.3d at 1416-17. 15 concededly separate from the PRAP, and Gomez was not acting in 16 any way for Pfizer in its capacity as Plan administrator. 17 Whether Pfizer might be liable for Gomez s actions under a state 18 law tort or contract theory is not before us. 19 Further, the two-hats doctrine described earlier See Amato, 773 In the present case, as noted, the SIP is Even where non-ERISA benefits (or exclusion therefrom) turn 7 The issues that arise with regard to intentional misstatements regarding non-ERISA collateral consequences of retirement are quite different from those before us. Intentional misstatements are apt to be self-serving and designed to induce employees to take or forgo some action with respect to plan options. See Varity, 516 U.S. at 506 (Employer breached ERISA fiduciary duty by knowingly and significantly [] deceiving a plan s beneficiaries in order to save the employer money at the beneficiaries expense ). No such issues arise here because the record shows at most simple misunderstandings resulting in a non-intentional misstatement. 25 1 on a person s status under an ERISA plan, the ERISA fiduciary 2 duty cannot extend to more than the person s qualification for 3 that status. 4 search out and master all collateral programs relevant to 5 employment termination, e.g. private medical plans administered 6 by insurance companies and long-term care plans, determine 7 whether they are in any way related to the ERISA plan, and 8 monitor their administration, while often having no power over 9 them. If it did, Plan administrators would be forced to Beneficiaries might seek (and actually have sought)8 10 recovery for misstatements regarding tax consequences, the likely 11 rate of inflation, future interest rates, and the availability of 12 public medical benefits. 13 material to retirement decisions would expand -- particularly in 14 an age of notice pleading -- the potential costs of ERISA plans, 15 thereby reducing the number created and the benefits provided in 16 those that are created. 17 The extension of liability to all facts Congress was concerned about the role costs play in 18 determining the creation of plans and the level of benefits 19 provided and wanted to control these costs. 20 stated: 8 As the Senate Report One court has stated that a failure to advise a potential retiree of the tax consequences of an early retirement plan violated ERISA s fiduciary duty. Farr v. U.S. West Comm., Inc., 151 F.3d 908, 914-15 (9th Cir. 1998), amended by 179 F.3d 1252 (9th Cir. 1999). However, it is unclear whether the failure to provide the relevant information in Farr was deliberate and intended to induce the taking of early retirement, facts that would take the decision out of the rule we establish here. 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 S. Rep. No. 93-383 at 14 (1974) reprinted in 1974 U.S.C.C.A.N. 16 4889, 4904. 17 charges plan fiduciaries is defraying reasonable expenses of 18 administration. 19 1001a(c)(2) & 1001b(b)(3). 20 At the same time, the committee is aware that under our voluntary pension system, the cost of financing pension plans is an important factor in determining whether any particular retirement plan will be adopted and in determining the benefit levels if a plan is adopted, and that unduly large increases in costs could impede the growth and improvement of the private retirement system. For this reason, in the case of those requirements that add to the cost of financing retirement plans, the committee has sought to adopt provisions which strike a balance between providing meaningful reform and keeping costs within reasonable limits. Indeed, among the explicit duties the statute 29 U.S.C. § 1104(a)(1)(A)(ii); see also, id. §§ That increased plan costs are borne by employers, and may 21 dissuade them from creating plans, is a concern that has been 22 recognized by academic commentators and courts alike. 23 A. Zelinsky, The Defined Contribution Paradigm, 114 Yale L. J. 24 451, 476 (2004) ( Compliance with ERISA s [regulations] also 25 entails significant administrative costs for defined benefit 26 arrangements, i.e., actuarial, accounting, and legal fees, costs 27 to which many employers, particularly smaller ones, are quite 28 sensitive. . . . To the extent employers must absorb these extra 29 costs, those costs deter the creation and continuation of defined 30 benefit plans. ); Phillip R. Lochner, Jr., Economic Regulation 27 See Edward 1 and Democratic Government, 25 J. Corp. L. 831, 834 (2000) 2 (commenting on the disappearance of defined benefit plans post- 3 ERISA: 4 having to hire numerous lawyers, benefits consultants, 5 accountants, and actuaries, just to be able to tell whether its 6 defined-benefit plan is complying with ERISA? ). Why should an employer put itself in the position of 7 Courts have also noted the concern expressed by Congress in 8 enacting ERISA that these costs would provide a disincentive for 9 employers to create pension benefit plans: 10 11 12 13 14 15 16 17 18 A-T-O, Inc. v. Pension Benefit Guarantee Corp., 634 F.2d 19 1013, 1021 (6th Cir. 1980) (citing S. Rep. No. 94-383 20 (1974), reprinted in 1974 U.S.C.C.A.N. 5166, 5167). 21 Though Congress was concerned chiefly with protecting the employees expectations of pension benefits, it also realized that employers would not create, maintain, or expand pension plans if ERISA imposed too much cost. Consequently, the entire statute is a finely tuned balance between protecting benefits for employees while limiting the costs to employers. More recently, in Conkright v. Frommert, 130 S. Ct. 22 1640 (2010), the Supreme Court reiterated its longstanding 23 concern with ERISA litigation expenses. 24 Court addressed the deference that courts should accord to a 25 plan administrator s interpretation of an ERISA plan. 26 Central to the Court s holding was the increased litigation 27 costs associated with de novo review of a plan 28 administrator s decisions as to plan benefits. 29 explained: 28 In Frommert, the As the Court 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Congress enacted ERISA to ensure that employees would receive the benefits they had earned, but Congress did not require employers to establish benefit plans in the first place. We have therefore recognized that ERISA represents a careful balancing between ensuring fair and prompt enforcement of rights under a plan and the encouragement of the creation of such plans. Congress sought to create a system that is not so complex that administrative costs, or litigation expenses, truly discourage employers from offering [ERISA] plans in the first place. ERISA induc[es] employers to offer benefits by assuring a predictable set of liabilities, under uniform standards of primary conduct and a uniform regime of ultimate remedial orders and awards when a violation has occurred. Id. at 1648-49 (internal quotation marks and citations omitted). 18 Extending ERISA liability to unintentional misstatements 19 regarding non-plan consequences of retirement decisions would run 20 counter to these goals. 21 22 CONCLUSION We therefore affirm. 23 24 25 29 1 2 3 4 5 07-5390-CV Bell v. Pfizer COGAN, District Judge, dissenting: This is a case about a company making multiple misrepresentations and omissions to 6 repeated inquiries by one of the plan s beneficiaries, Dr. Diana Bell, regarding its ERISA- 7 regulated retirement plan. Because I conclude that Pfizer was acting in a fiduciary capacity 8 when it made those misrepresentations and omissions, I dissent. I express no view on whether 9 Pfizer s misrepresentations and omissions were material, and whether Bell reasonably relied on 10 them to her detriment, as I believe the district court should address these issues in the first 11 instance. I would therefore remand to the district court for that purpose. 12 This is a unique case. Pfizer has a special provision in its Retirement Annuity Plan 13 ( PRAP ) Section 4k. This provision allows beneficiaries to end their employment before 14 attaining retirement status and still receive annuity benefits. For individuals like Dr. Bell, 15 understanding Section 4k is critical because in Pfizer s unusual scheme, it determines whether 16 one qualifies for the non-ERISA Stock Incentive Plan ( SIP ). That is, Bell had to understand 17 the difference between ending her employment under Sections 4a, 4b or 4d and ending it under 18 4k. What she sought to find out was whether Section 4k constituted a form of retirement. Pfizer, 19 mistakenly, led her to believe that it was. 20 The majority finds it significant indeed determinative that Bell asked Pfizer about 21 Section 4k not because she was confused about her eligibility, but because the meaning of this 22 provision bore on her rights under the SIP. The majority reasons that because Bell knew for 23 which PRAP section she qualified, Pfizer s fiduciary duty was at its end. It holds that an 24 unintentional misrepresentation made by a company interpreting a provision of its retirement 25 plan, is not a misrepresentation of the plan within the meaning of ERISA. In reaching this 1 1 conclusion, the majority adds a new layer of analysis to an ERISA challenge, which focuses on a 2 beneficiary s reasons for requesting information about a retirement plan. I find no support for 3 this reading of the statute. 4 To begin with, I disagree with the district court s finding, which the majority adopts, that 5 Pfizer s misrepresentations and omissions relied upon by Bell, related solely to the SIP, and, 6 consequently, could not support an ERISA breach of fiduciary duty. And I disagree with the 7 majority s related premise that only one misstatement could have misled Bell the one made by 8 Gomez in 2003 when she sent Bell the stock option summary, identifying Bell as retirement 9 eligible and discussing Bell s stock option rights based on this classification. That was 10 certainly one misrepresentation but there were others, including omissions regarding Bell s 11 eligibility to retire under the PRAP. For instance, the May 6, 2003 letter to Bell from Peggy 12 McGee, retirement counselor, enclosing her Retirement Kit, referred to Bell as an employee 13 eligible to retire under the [PRAP]. This statement was clearly incorrect; the PRAP itself 14 defines retire or retirement as the termination of service . . . after meeting the requirements 15 of Section 4a, b, or d, and there is no dispute that Bell did not meet the requirements of any of 16 these sections. 17 Additionally, the fact that the company s personnel database initially listed Bell as 18 retired, and that her status was not changed to terminated until after August 2003, further 19 demonstrates the initial confusion within the company as to Bell s retirement status. An August 20 19, 2003 email chain originating between Michaeline Von Drathen and McGee, flagging a 21 potential error by the retirement hotline in processing Bell s retirement inquiry, and culminating 22 in a Pfizer employee, Deb Alexander s clear statement to McGee and Geronimo Colon (Pfizer s 23 manager of PRAP Administration) that Bell was NOT eligible for retirement . . . the Retirement 2 1 status in PeopleSoft [is] not correct, further supports the conclusion that Pfizer s retirement 2 counselors misrepresented Bell s eligibility for retirement both internally and to Bell. 3 In addition to these affirmative misrepresentations, the record also contains evidence of 4 omissions regarding Bell s eligibility to retire under the PRAP, which the district court did not 5 address and the majority overlooks. For example, the record reflects that Sasni and Malik, 6 employees in Pfizer s HR and pension benefits administration departments, knew that Bell 7 planned to take retirement at age 50, but never told Bell that her plan was not actually 8 considered retirement under the PRAP. Likewise, Corbett, an HR manager, knew that Bell 9 intended to retire before age 55; while Corbett advised her that she was not eligible for medical 10 benefits prior to age 55, she did not advise her that neither was she eligible for retirement as 11 the PRAP defined it. Bell also explicitly told McGee, a person designated by Pfizer as a 12 retirement counselor whose job it was to field retirement questions for its employees, that she 13 intended to leave the company prior to age 55 and take the pre-1994 benefits. Not only did 14 McGee never advise Bell that she was not eligible to retire (as McGee testified was her normal 15 practice when an ineligible employee asked for retirement information), she entirely failed to 16 answer one of Bell s most specific questions about whether eligibility for the pre-1994 benefit 17 qualified her as retired under the PRAP in the sense that she could retain favorable treatment 18 of her stock options. These omissions all concern Bell s eligibility to retire under the PRAP; 19 their absence from the district court s factual analysis further demonstrates the insufficiency of 20 its analysis. 21 The majority s analysis begins by observing that Pfizer s employees use the terms 22 retire and retirement correctly in the colloquial sense (referring to Bell s leaving the 23 company), and that Bell used the words loosely herself. It also notes that Bell clearly 3 1 understood that Sections 4a, b, and d did not apply to her. I find these observations irrelevant 2 given the fiduciary s duty to provide full and accurate information . . . regarding the 3 administration of the plan, In re Long Island Lightning Co., 129 F.3d 268, 271 (2d Cir. 1997), 4 including complete and accurate information about . . . retirement options. Estate of Becker v. 5 Eastman Kodak Co., 120 F.3d 5, 10 (2d Cir. 1997); see also, Switzer v. Wal-Mart Stores, Inc., 52 6 F.3d 1294, 1299 (5th Cir. 1995); Electro-Mechanical Corp. v. Ogan, 9 F.3d 445, 451 (6th Cir. 7 1993); Anweiler v. American Elec. Power Serv. Corp., 3 F.3d 986, 991 (7th Cir. 1993); Bixler v. 8 Central Pennsylvania Teamsters Health & Welfare Fund, 12 F.3d 1292, 1300 (3d Cir. 1993); 9 Eddy v. Colonial Life Ins. Co., 919 F.2d 747, 750 (D.C. Cir. 1990). First, there is no safe harbor 10 under ERISA allowing for the ascription of colloquial meaning as opposed to proper definition 11 of plan terms. Second,there is nothing in the statute or the caselaw to suggest that a fiduciary s 12 level of accuracy should be calibrated to the beneficiary s remarks or knowledge; the meaning of 13 complete and accurate does not change based on the beneficiary s state of mind. Whether 14 Pfizer s statements were material or whether Bell relied on them to her detriment perhaps 15 because she had sufficient information, expertise, and opportunity to avoid the misunderstanding 16 are not questions before this court and are properly decided on remand. 17 The thrust of the majority s holding is that the ERISA fiduciary duty does not extend to 18 unintentional misstatements regarding collateral, non-ERISA plan consequences of a retirement 19 decision. 1 In reaching this conclusion, the majority rests on the language of the statute and the 20 two-hats doctrine, which allows employers to escape fiduciary status when they are not acting 21 as PRAP administrators, and instead conduct business that is not regulated by ERISA. I do not see how a fiduciary is not discharging its duties with respect to a plan, 29 22 23 U.S.C. § 1104, when it is interpreting or misinterpreting key terms in its provisions. That 1 The opinion makes the point that intentional misstatements may be different. 4 1 those misrepresentations and omissions may have non-ERISA consequences does not foreclose 2 liability for breach of fiduciary duty. See e.g., Farr v. U.S. West Commc ns, Inc., 151 F.3d 908, 3 914-15 (9th Cir. 1998) (finding a violation of ERISA s fiduciary duty for failing to advise a 4 potential retiree of the tax consequences of an early retirement plan), amended, 179 F.3d 1252 5 (9th Cir. 1999). 6 Nor do I agree that the two-hats doctrine saves Pfizer from liability. The majority bases 7 this part of its holding on the finding that Gomez, whom McGee caused to act on an incorrect 8 assumption about Bell s [retirement] status, was not acting as a PRAP administrator. 9 Determining whether an employer acted as plan administrator requires a context-specific inquiry 10 into (1) the factual circumstances in which the employer was acting; (2) whether the activity in 11 which the employer engaged was plan-related; and (3) whether the activity was engaged in by 12 those who had plan-related authority to do so. Varity Corp. v. Howe, 516 U.S. 489, 503 (1996). 13 Plan-related activities that may give rise to an employer s ERISA fiduciary duty include 14 communicating to employees about future plan benefits, Flanigan v. Gen. Elec. Co., 242 F.3d 78, 15 84 (2d Cir. 2001), and answering beneficiaries questions about the meaning of the terms of a 16 plan so that those beneficiaries can more easily obtain the plan s benefits. Varity, 516 U.S. at 17 502-03. 18 If a reasonable employee could think that the employer was communicating with her in 19 both its capacity as an employer and its capacity as a plan administrator, the employer can be 20 found to be acting as an ERISA fiduciary. See e.g., Bouboulis v. Transp. Workers Union of 21 Am., 442 F.3d 55, 65 (2d Cir. 2006) (quoting Varity, 516 U.S. at 504-05). Thus, this court has 22 previously found that the communications between employees and benefits counselors 23 designated by the employer to give plan advice can give rise to an ERISA fiduciary duty. See 5 1 Becker, 120 F.3d at 10 (finding a breach of ERISA fiduciary duty based in part on 2 misrepresentations and omissions made by a benefits counselor); see also Fischer v. Philadelphia 3 Elec. Co., 994 F.2d 130, 135 (3d Cir. 1993) (noting an employer cannot avoid fiduciary liability 4 by walling off those employees on whom plan participants reasonably rely for important 5 information and guidance about retirement ). It seems to me that if a plan fiduciary wants to 6 wear two hats, it is incumbent upon him to make it clear to beneficiaries which hat he is wearing 7 when he gives advice, especially when both hats have common features. 8 9 Because Pfizer s misrepresentations and omissions concerned Bell s eligibility to retire under the ERISA-governed PRAP, the interactions between Bell and company employees 10 concerning the PRAP gave rise to a fiduciary duty if the Pfizer employees were acting as PRAP 11 administrators, or if Bell could reasonably have perceived them to be acting in such a capacity. 12 I would find that Pfizer employees acted as PRAP administrators for both reasons. In contrast to 13 the ministerial functions that do not implicate an entity s fiduciary duties under the statute and 14 that the district court in this case found Pfizer employees to have been performing, the majority 15 of the PRAP administrators and retirement counselors with whom Bell interacted gave detailed 16 advice in response to her specific benefits-related inquiries. The context-specific nature of these 17 interactions removes them from the realm of the mechanical or ministerial, and makes them 18 administrative in nature. See e.g., Varity, 516 U.S. at 502-03 (noting that answering 19 beneficiaries questions about the meaning of plan terms to help beneficiaries obtain plan 20 benefits is one of the functions of a fiduciary). 21 And Bell could reasonably have concluded that she was communicating with Pfizer-the- 22 PRAP-administrator, not Pfizer-the-employer, when she made her retirement eligibility inquiries. 23 She originally initiated contact with Pfizer s HR department after receiving a pamphlet from 6 1 Pfizer advising her that its retirement counselor can answer all your retirement questions. 2 Likewise, when Bell ultimately made her decision to retire, she called Pfizer s retirement hotline 3 at the direction of an HR supervisor. McGee, an individual specifically designated by Pfizer as 4 someone who could advise employees about the mechanics of retirement, interacted with Bell as 5 her retirement counselor, and answered Bell s questions about her specific retirement needs. 6 Indeed, the pamphlet Bell originally received in 2001 stated that the retirement counselor is 7 now your primary source for information about . . . provisions of the [PRAP] and could advise 8 her, among other things, of the impact of retirement on benefits. Bell could have reasonably 9 concluded that these employees had expert knowledge about how their plan worked, and 10 reasonably could have relied on them for their expertise. Varity, 516 U.S. at 503; Fischer, 994 11 F.3d at 535. The employees had the apparent authority to bind Pfizer as fiduciary. See Estate of 12 Dermady v. Eastman Kodak Co., 136 F. Supp. 2d 181, 188 89 (W.D.N.Y. 2001). 13 I share the majority s concern with extending potential liability for ERISA plans. But as 14 I noted earlier, this is a unique case Pfizer s stock option plan cross-references its retirement 15 plan, and the retirement plan in turn has an unusual provision that allows collection of benefits 16 without attaining retirement status. Nor am I ready to conclude whether Bell detrimentally relied 17 on material misrepresentations, which the majority correctly points out would be another bar to 18 liability. Thus this is not a case that will expand ERISA beyond congressional intent; it is a case 19 that squarely falls within the language of the statute. The employees who misrepresented parts 20 of the PRAP to Bell were the very ones responsible for discharging the plan. The facts may be 21 unusual, but the misrepresentations are unmistakable. I therefore respectfully dissent. 7

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