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Knowlton v. Anheuser-Busch Companies, LLC

United States District Court, E.D. Missouri, Eastern Division

July 8, 2015

BRIAN KNOWLTON, et al., individually, and on behalf of all others similarly situated, Plaintiffs,
v.
ANHEUSER-BUSCH COMPANIES, LLC, et al., Defendants.

MEMORANDUM AND ORDER

STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE.

This matter is before the Court on plaintiffs’ motion for judgment on the pleadings (#89) pursuant to Federal Rule of Civil Procedure 12(c). After an extended briefing schedule, the motion has been fully briefed and is ready for disposition.

I. Background

Plaintiff class members are former employees of Busch Entertainment Corporation (“BEC”), which was a member of the “Controlled Group” of Anheuser-Busch Companies, LLC (“ABC”). Plaintiffs further allege they are salaried participants in the Anheuser-Busch Companies Pension Plan (“Plan” or “Pension Plan”).

The Pension Plan at the heart of this dispute provides, at Section 19.11(f), for certain enhanced retirement benefits in case of a “change of control.” That Section states that a salaried participant “whose employment with the Controlled Group is involuntarily terminated within three (3) years after the Change in Control” is entitled to an enhanced pension benefit that adds “an additional five (5) years of Credited Service” and “an additional five (5) years of age” to the benefit calculation, an enhanced amount that “shall in any event be at least fifteen percent (15%) larger” than the benefit to which the participant would have otherwise been entitled (“ benefits” or “enhanced benefits”).

In July 2008, Anheuser-Busch InBev, N.V. (“InBev”) announced that it was acquiring ABC in November 2008 (the “Acquisition”). Plaintiffs allege that the transaction was a “Change in Control” under the Plan. ABC stated to all salaried employees in a memorandum that “if a participant in the [Plan] is involuntarily terminated within three years after a change in control, the participant’s benefits will be determined based on five additional years of age and credited service or by increasing the benefits by 15 percent, whichever provides the larger benefit.”

Sometime prior to November 2009, InBev announced that it was selling BEC to the Blackstone Group and that the transaction (the “BEC Sale”) would be finalized on December 1, 2009. Plaintiffs assert that, as a result of the BEC Sale, they and all other similarly situated salaried employees of BEC had their employment with the Controlled Group involuntarily terminated within three years of the Change of Control. However, in November 2009 ABC informed the salaried employees of BEC that they “will not be eligible for the  enhancement upon the date of your termination of employment with BEC after the sale is finalized.” Plaintiffs allege that when they filed a claim for the enhanced benefits, the Plan Administrator denied the claim. Plaintiffs filed this lawsuit to obtain the enhanced benefits through this ERISA action, and they have moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) regarding Count I.

II. Legal Standard

“Judgment on the pleadings is appropriate where no material issue of fact remains to be resolved and the movant is entitled to judgment as a matter of law.” Faibisch v. Univ. of Minnesota, 304 F.3d 797, 803 (8th Cir. 2002). When considering a motion for judgment on the pleadings, the Court may consider the pleadings themselves, materials embraced by the pleadings, exhibits attached to the pleadings, and matters of public record. Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).

III. Discussion

Plaintiffs rely on and urge this Court to adopt the judgment of the United States Court of Appeals for the Sixth Circuit in Adams v. Anheuser-Busch Companies, Inc., 758 F.3d 743 (6th Cir. 2014). That case presented the identical issue presented by plaintiffs here --- plaintiffs in Adams were employed by a different ABC subsidiary, the Metal Container Corporation, but were participants in the same Pension Plan as plaintiffs here. After InBev acquired ABC, InBev spun off four of the Metal Container plants in a sale to the Ball Corporation with the agreement that the Metal Container employees would become employees of Ball and cease to be participants in the Pension Plan. Id. at 746. As a result of that change in employment, the Adams plaintiffs made claims to the Pension Plan administrator for recalculation of their future retirement benefits under Section 19.11(f) of the Plan. Id. “They contended that because their employment with an Anheuser-Busch-affiliated Controlled Group company ended within three years of a change in control, they were entitled to enhanced benefits from Anheuser-Busch at the time of their retirement.” Id. ABC, of course, denied the claims because it said the plaintiffs had accepted employment with Ball and so had never experienced a period of unemployment. Id. The plaintiffs filed suit in the Southern District of Ohio, which dismissed the plaintiffs’ claims for breach of fiduciary duty and for benefits and ultimately upheld the administrator’s decision denying plaintiff’s claims. Id. The District Court there held that the plan language was ambiguous and ruled that the Plan Administrator’s decision was reasonable. On appeal, however, the Sixth Circuit reversed. Id. at 748.

Plaintiffs in this case urge this Court to follow the Sixth Circuit’s reasoning, and, based solely on the pleadings, to grant partial judgment leaving only the matter of benefits calculations left for disposition. In support, the plaintiffs state that this Court may apply the doctrine of non-mutual collateral estoppel to prevent the defendants from further defending this matter in light of the Adams decision. Naturally, the parties disagree regarding whether applying such estoppel is appropriate here, and they devote most of the briefing on this motion to debating it.

However, the Court need not engage in a complicated collateral estoppel analysis nor need it wait for the submission of the administrative record. Although this is an unusual case, the Court may resolve this issue on the pleadings. Defendants’ primary objection to making a determination on the pleadings is that they insist on a full review of the administrative record. That record, they say, includes the Plan, the employment circumstances of the claimants, the relevant terms of the stock sale of BEC to the Blackstone Group, past applications of Section 19.11(f), and the available evidence of the Plan drafter’s original intent when drafting Section 19.11(f).

But defendants do not dispute that the sole issue is simply the meaning of Section 19.11(f), which states that individuals “whose employment with the Controlled Group is involuntarily terminated within three (3) years after the Change in Control” would be entitled to certain enhanced benefits. As explained in the pleadings, the Plan Administrator believed that “involuntarily terminated” meant to have actually been terminated or lost employment. The plaintiffs argue that “involuntarily terminated” must be read in the context of their “employment with the Controlled Group” and does not require an actual loss of employment. See ...


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