Bobbie Adams v. Sun Company, Inc., Sun Coal Company, Whitaker Coal Corporation

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 01-3762
___________
BOBBIE ADAMS; BOBBY LYNN ADAMS; CARLOS ADAMS; DAVID
C. ADAMS; JOHN ADAMS, LONNIE ADAMS; LONNIE GLENN
ADAMS; ROGER ADAMS; VAN ADAMS; CURTIS ASHER; GARY
ASHER; JOE ASHER; KERMIT DOUGLAS ASHER; LARRY ASHER;
MICHAEL F. ASHER; ROBERT E. LEE ASHER; DONALD RAY
BAILEY; JOHN M. BAILEY; BERT BAKER; DAVID L. BAKER;
PRENTISS DARRELL BAKER; RICHARD BAKER; RICHARD LEE
BAKER; ROBERT W. BAKER; DAVID WEBB BOWLING; ERNIE
RAY BOWLING; MICHAEL J. BOWLING; RODNEY BOWLING;
RONALD BOWLING; VERNON E. BOWLING; DAVID K.
BRASHEAR; RONALD K. BROWNING; ROBERT D. BURNS;
BANDON BUSH; ASBERY CALDWELL; JAMES E. CALDWELL;
JERRY CALDWELL; CHESTER CALLAHAN; DARRELL
CALLAHAN; KELLY A. CAMPBELL; KELLY CAMPBELL; JOHN E.
CAUDILL; HARVEY CHAPPELL, JR.; ROSS E. COLE; ELDON
COLLETT; HAROLD COLLETT; RICKY COLLETT; ROBIN
COLLETT; DOUGLAS W. COLLINS; HAROLD COLWELL; CECIL
COMBS; EARL COMBS; EMERSON EUGENE COMBS; JACK K.
COMBS; LARRY COMBS; LESLIE H. COMBS; MICHAEL G. COMBS;
RANDY COMBS; TROY P. COMBS; BOBBY COOTS; WADE COOTS;
JAMES A. CORNETT; ROBERT CORNETT; JAMES COUCH;
KENNETH COUCH; MICHAEL W. COUCH; PAUL W. COUCH;
TOMMY COUCH; TOMMY DWAYNE COUCH; WILLIAM COUCH;
KENNETH CRAWFORD; EARL DAVIDSON; JERRY DAVIDSON;
BOB DIXON; JAMES R. ENGLISH; EDDIE DWAYNE EVERSOLE;
MICHAEL PRAH EVERSOLE; MICHAEL T. EVERSOLE; VIRGIL
EVERSOLE; CLINTON FARMER; BRUCE FELTNER; DANNY
FELTNER; EDDIE BRUCE FELTNER; EUGENE FELTNER; JOHN C.
FELTNER; LONNIE FELTNER; PAUL ANTHONY FELTNER; RANDY
FELTNER; RODERICK D. FELTNER; RONALD FELTNER;
SYLVESTER FELTNER; IAM HERMAN FELTNER, JR.; RAY LEE
FLETCHER; HARRY JR. FRANCIS; JAMES FRILEY; GARY R.
FUGATE; LARRY FUGATE; ANTHONY GIBSON; JOHN GOINS;
RONALD W. GRIFFIE; FREDDIE GRIGSBY; LARRY GROSS;
RUSSELL GROSS; FLOYD HENRY HACKER; SHELBY P. HAGANS;
CHARLES HARRIS; LARRY HENDRIX, JR.; JERRY HENSLEY;
TIMMIE HENSLEY; KENNETH HOLLAND; MORGAN LEE HOLMES;
IRA HUFF; CLAYTON M. JACKSON; PHILLIP JACKSON; PAUL E.
JOHNSON, WILLIE JOHNSON; CHESTER JONES; LARRY JOSEPH;
RAYMOND JOSEPH, ROBERT JOSEPH, III; CLETIS WELLS, JR.;
HERSHEL DIXON, JR.; PEARL PENNINGTON, JR.; RICHARD
YOUNG, JR; DAVID KILBOURNE; J. B. KILBOURNE; FRED
KILBURN; JOHNNY RAY KILBURN; KENNETH LAWSON; EARL
LEWIS; DENVER LEWIS; HOBERT LEWIS; ALLEN WAYNE
MADDEN; COVA MAGGARD; JAMES C. MAGGARD; COLEMAN
MCDANIEL; CARTER ALLEN MELTON; DOUGLAS K. MELTON;
MICHAEL W. MELTON; RANDALL KENT MELTON; WILLIAM
CRAIG MELTON; MANUEL MILLER; DON MORGAN; RUSSELL
DOUGLAS MORGAN; EDMON MORROW; DONNIE MOSLEY;
ARTHUR MULLINS; CECIL MURRAY; CLARENCE PATRICK
NAPIER; DANIEL NAPIER; HAROLD D. NEACE; EDDIE NEAL;

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CHARLIE NORTH; JERRY OLIVER; BOBBY JOE OSBORNE; JAMES
J. OSBORNE; MARCUS OSBORNE; OTIS OSBORNE; PAUL R.
OSBORNE; SHERMAN OSBORNE; TIMOTHY OTIS OSBORNE;
LLOYD PENCE; GILLIS GLEN PENNINGTON; JESSE PENNINGTON;
JIMMIE PENNINGTON; THOMAS WADE PENNINGTON; WILLIAM
I. PENNINGTON; EUGENE PENNINGTON, JR.; CHARLES E.
PHILPOT; BILLY RADFORD; WILLARD RADFORD; RHONDA REID;
HAROLD ROBERTS; KENNETH ROBERTS; LARRY ROBERTS;
RANDY ROBERTS; WAYNE ROBINSON; RICHARD SALYERS;
BURNIS SHEPHERD; LEONARD SHEPHERD WENDALL SHERMAN,
OKIE SHORT; GARLAND SIZEMORE; JOHNNY E. SIZEMORE;
ALFRED SMITH; CHARLES EDWARD SMITH; CHARLES W. SMITH;
HURLEN L. SMITH; JIMMIE SOUTHWOOD; ORVILLE SPARKS; D.J.
STEPHENS; DAVID STIDHAM; BUFORD O. STONIC; NORMAN
JEROME STUNK; BILL THOMAS; RODNEY THOMPSON; BOBBY J.
TRAMMELL; HAROLD TURNER; STEVE WALKER; WALLACE
WARFIELD; CHARLES C. WELLS; CLETIS JR. WELLS; GARY
WELLS; JOHN W. WELLS; RONALD W. WELLS; EDDIE WHITAKER;
EVERETT EARL WHITAKER; JACK E. WHITAKER; JAMES
WHITAKER; SHELVIN WHITE; HAROLD WILLIAMS; HERSHEL
WILLIAMS; KELVIN L. WILLIAMS; MARCUS WILLIAMS; RONALD
LEE WILLIAMS; WOODROW WILLIAMS; DAVID WAYNE WOODS;
DENVER D. WOODS; OPHA WOODS; RONALD WOODS; ANTHONY
WAYNE WOOTON; THOMAS H. WRIGHT; JOHN DOE(S); JANE
DOE(S),
Appellants
v.
SUN COMPANY, INC., SUN COAL COMPANY, WHITAKER COAL
CORPORATION AND BANKERS TRUST COMPANY
___________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 98-cv-3572)
District Judge: Hon. Thomas N. O’Neill, Jr.
___________
Submitted Under Third Circuit LAR 34.1(a)
September 12, 2002
Before: SLOVITER and RENDELL Circuit Judges,
and McCLURE, District Judge.
(Filed: September 12, 2002)
___________
OPINION OF THE COURT SLOVITER, Circuit Judge.
The appellants (hereafter "Employees"), over 200 former employees of Whitaker
Coal Corporation ("Whitaker"), a mining corporation owned by Sunoco, Inc. ("Sunoco"),
brought this action under the Employee Retirement Income Security Act (ERISA) of
1974, 29 U.S.C. 1001 et seq., asserting that Defendants violated their fiduciary duties
by representing the lump sum payment option selected by these employees in late 1995 to
be a "one-time" offer and then extending a second offer to other employees the following
year. After determining that Whitaker was not "seriously considering" a second lump
sum payment option when the Employees were offered and selected such an option in late

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1995, the District Court entered summary judgment for the Defendants. The District
Court also denied the Employees’ Motion for Reconsideration.
In this appeal, the employees assert that the District Court erred as a matter of law
in its application and interpretation of the "serious consideration" test enunciated in
Fischer v. Philadelphia Electric Co., 96 F.3d 1533 (3d Cir. 1996) (Fischer II). Because
we conclude that the District Court correctly applied the law, and that there are no
genuine issues of material fact, we will affirm.
I.
The Employees were participants in the Whitaker Coal Corporation and Affiliates
Defined Benefit Pension Plan (the "Plan"), and were laid off in 1995 by Whitaker when
its parent company, Sunoco, decided to exit the coal business. At that time, the Plan had
no lump sum payment option, but required participants to wait until at least age 55 before
receiving retirement benefits. In mid-1995, in response to requests from former
employees, Whitaker and Sun Coke Corporation (later Sun Coal) (hereafter "Sun"), the
Plan administrator, began to consider the possibility of a lump sum payment to the
former employees, along with other options for the Plan, including termination.
On September 25, 1995, the Plan actuary, an employee of Pricewaterhouse
Coopers (hereafter "PwC"), corresponded with Jack Allison, Vice President of Finance
and Administration for Sun, setting forth three Plan options: (1) terminating the Plan
(paying everyone out) on or before December 31, 1995; (2) terminating the Plan (paying
everyone out) on January 1, 1996; or (3) making lump sum payments only to vested
terminees and layoffs on or before December 31, 1995 (with possible later Plan
termination). The Allison Letter went on to state that when the Plan was terminated
"annuities would be purchased at prices available in the annuity market as of the date of
purchase for retirees and beneficiaries currently receiving benefits." It concluded that
because it was unlikely that Plan termination could be effectuated by year-end, Whitaker
should amend to allow lump sum distributions to laid off employees and vested terminees
with payment by December 31, 1995. Whitaker elected the third option, deciding not to
terminate the Plan at that time, and in November 1995 the Plan was amended to allow for
lump sum payments to the Employees. The Employees were notified of this "one-time"
opportunity and permitted to elect among (1) a lump sum distribution on or before
December 31, 1995; (2) an immediate 50% joint and survivor annuity to commence
December 1, 1995 (for married participants); (3) an immediate straight life annuity to
commence on the same date; or (4) status quo retaining the right to a deferred annuity at
retirement date. The Employees each elected to receive a lump sum distribution on or
before year end.
In February 1996, Whitaker was contracted for sale and, as part of the transaction,
Sunoco was to become the Plan sponsor. It was announced that the remaining plan
participants would be given another opportunity to receive a lump sum payment, with the
option window scheduled from the presumed date of closing, in June 1996, until August
31, 1996. Defendants assert this option was added to reduce the administrative burdens
of plan merger on Sunoco; the Employees assert that it was actually planned at the time of
the first. The business transaction was delayed, and the second lump sum payment
window opened November 15, 1996. In the approximate one-year interval between the
two windows, interest rates fell, as a result of which the lump sum payments made to the
comparatively small group of remaining participants were significant larger than those
made to the Employees.
The Employees filed suit in the District Court, alleging that the Defendants
violated their fiduciary duties under ERISA by making a misleading representation as to
the "one-time" opportunity and failing to disclose at the time of the first lump sum
payment option that a second window for lump sum payments would occur. On June 12,
2001, the District Court, having considered the parties’ respective motions for summary
judgment, entered summary judgment for the Defendants. The District Court determined
that the Employees "produced no evidence from which a [factfinder] reasonably could
conclude that a second window for lump sum payments was under serious consideration
at the time of the first." June 12, 2001 Memorandum at 9. This appeal timely followed.
II.
The District Court had jurisdiction pursuant to 29 U.S.C. 1132(e)-(f), and we
exercise jurisdiction under 28 U.S.C. 1291. Our review of the District Court’s grant of
summary judgment is plenary and we must "affirm summary judgment ’if there is no

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genuine issue of material fact and the moving party is entitled to judgment as a matter of
law.’" Walling v. Brady, 125 F.3d 114, 116 (3d Cir. 1997) (quoting Smith v. Hartford Ins.
Group, 6 F.3d 131, 135 (3d Cir. 1993)); see also Fed. R. Civ. P. 56(c). We review the
facts in the light most favorable to the non-moving party. See Beers-Capital v. Whetzel,
256 F.3d 120, 130 n.6 (3d Cir. 2001). That party must, however, point to specific facts
demonstrating that a genuine issue exists for trial, and may not rest upon entirely
unsupported allegations. See Fed. R. Civ. P. 56(e); Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986).
III.
In accordance with its duties under ERISA, a plan fiduciary may not materially
mislead the plan participants and beneficiaries. See In re Unisys Corp, 57 F.3d 1255,
1261 (3d Cir. 1995). More specifically, "[a] plan administrator may not make affirmative
material misrepresentations to plan participants about changes to an employee pension
benefits plan." Fischer v. Philadelphia Electric Co., 994 F.2d 130, 135 (3d Cir. 1993)
("Fischer I"). A fiduciary may be liable for breach of fiduciary duty based upon
misrepresentations where it either misrepresents a material fact or fails to disclose a
potential change in the plan that is under "serious consideration." See Fischer II.
An ERISA fiduciary gives "serious consideration" to a plan modification when
"(1) a specific proposal (2) is being discussed for purposes of implementation (3) by
senior management with the authority to implement the change." Fischer II, 96 F.3d at
1539. "A specific proposal follows the preliminary steps of ’gathering information,
developing strategies, and analyzing options.’" Mushalla v. Teamsters Local No. 863
Pension Fund, 2002 WL 1835429, *6 (3d Cir. April 12, 2002) (quoting Fischer II, 96
F.3d at 1539-40). It must be "sufficiently concrete to support consideration by senior
management for the purpose of implementation." Fischer II, 96 F.3d at 1540. In
addition, the discussion for implementation element requires evidence of consideration of
"the practicalities of implementation." Id.
In support of their appeal, the Employees rely principally on the Allison Letter,
which they assert evinces the Defendants’ intent to make a second lump sum payout. But
as noted supra, that correspondence contains absolutely no reference whatever to a
second lump sum option. In essence, the Employees are attempting obliquely to infer this
intent based solely on considerations of Whitaker’s and Sunoco’s presumed desire to
finalize the Plan’s liabilities in connection with the Plan’s termination or merger. Of
course, neither termination nor merger requires offering a lump sum payment and,
indeed, the undated handwritten notes on the Allison Letter indicate consideration of an
annuity, apparently in lieu thereof. Moreover, even if the generalized alternatives in the
Allison Letter made reference to a second lump sum opportunity, which they do not,
correspondence reflecting the development of strategies and suggestion of options,
without more, would not rise to the level of a "specific proposal" as we have defined it.
To the contrary, as the District Court correctly observed, the Allison Letter "was merely
an ’antecedent step of gathering information.’" June 12, 2001 Memorandum at 8 (quoting
Fischer II at 1539-40).
In addition, even if a specific proposal for a second lump sum payment could be
gleaned from the Allison Letter, which it cannot, the Employees have presented no
evidence whatsoever of consideration during 1995 of "the practicalities of
implementation," such as how a second lump sum window would be communicated, to
whom it would available, under what terms, or when and for how long.
Similarly, the few additional handwritten notes submitted in support of the
Employees’ Motion for Reconsideration have, with perhaps one exception, no apparent
bearing at all on the allegations of a pre-1996 time frame for the Defendants’
consideration of a specific second lump sum payment option. The only document that
could possibly be interpreted to have some relevance is an undated note by a PwC
employee that includes a reference to "1996 purchasing annuity allowed to take lump
sum." Although these notations may be read to indicate that someone was, at some
time, considering allowing some group a second lump sum payment window in 1996, (1)
there is no indication of when this was being contemplated; (2) there is no evidence it was
discussed with anyone at Whitaker, Sun or Sunoco, or anyone with the authority to
implement it; (3) it clearly lacks any of the detail necessary to constitute a specific
proposal; and (4) it is not sufficiently formulated or finalized to amount to something
discussed for purposes of implementation.

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Accordingly, we agree with the District Court that the evidence raises no disputed
issue of material fact as to the presence of serious consideration by the Defendants of a
second lump sum payment opportunity prior to December 31, 1995.
IV.
For the reasons set forth above, we will affirm the decision of the District Court.
________________________
TO THE CLERK:
Please file the foregoing opinion.
/s/ Dolores K. Sloviter
Circuit Judge UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 01-3762
BOBBIE ADAMS; BOBBY LYNN ADAMS; CARLOS ADAMS; DAVID
C. ADAMS; JOHN ADAMS, LONNIE ADAMS; LONNIE GLENN
ADAMS; ROGER ADAMS; VAN ADAMS; CURTIS ASHER; GARY
ASHER; JOE ASHER; KERMIT DOUGLAS ASHER; LARRY ASHER;
MICHAEL F. ASHER; ROBERT E. LEE ASHER; DONALD RAY
BAILEY; JOHN M. BAILEY; BERT BAKER; DAVID L. BAKER;
PRENTISS DARRELL BAKER; RICHARD BAKER; RICHARD LEE
BAKER; ROBERT W. BAKER; DAVID WEBB BOWLING; ERNIE
RAY BOWLING; MICHAEL J. BOWLING; RODNEY BOWLING;
RONALD BOWLING; VERNON E. BOWLING; DAVID K.
BRASHEAR; RONALD K. BROWNING; ROBERT D. BURNS;
BANDON BUSH; ASBERY CALDWELL; JAMES E. CALDWELL;
JERRY CALDWELL; CHESTER CALLAHAN; DARRELL
CALLAHAN; KELLY A. CAMPBELL; KELLY CAMPBELL; JOHN E.
CAUDILL; HARVEY CHAPPELL, JR.; ROSS E. COLE; ELDON
COLLETT; HAROLD COLLETT; RICKY COLLETT; ROBIN
COLLETT; DOUGLAS W. COLLINS; HAROLD COLWELL; CECIL
COMBS; EARL COMBS; EMERSON EUGENE COMBS; JACK K.
COMBS; LARRY COMBS; LESLIE H. COMBS; MICHAEL G. COMBS;
RANDY COMBS; TROY P. COMBS; BOBBY COOTS; WADE COOTS;
JAMES A. CORNETT; ROBERT CORNETT; JAMES COUCH;
KENNETH COUCH; MICHAEL W. COUCH; PAUL W. COUCH;
TOMMY COUCH; TOMMY DWAYNE COUCH; WILLIAM COUCH;
KENNETH CRAWFORD; EARL DAVIDSON; JERRY DAVIDSON;
BOB DIXON; JAMES R. ENGLISH; EDDIE DWAYNE EVERSOLE;
MICHAEL PRAH EVERSOLE; MICHAEL T. EVERSOLE; VIRGIL
EVERSOLE; CLINTON FARMER; BRUCE FELTNER; DANNY
FELTNER; EDDIE BRUCE FELTNER; EUGENE FELTNER; JOHN C.
FELTNER; LONNIE FELTNER; PAUL ANTHONY FELTNER; RANDY
FELTNER; RODERICK D. FELTNER; RONALD FELTNER;
SYLVESTER FELTNER; IAM HERMAN FELTNER, JR.; RAY LEE
FLETCHER; HARRY JR. FRANCIS; JAMES FRILEY; GARY R.
FUGATE; LARRY FUGATE; ANTHONY GIBSON; JOHN GOINS;
RONALD W. GRIFFIE; FREDDIE GRIGSBY; LARRY GROSS;
RUSSELL GROSS; FLOYD HENRY HACKER; SHELBY P. HAGANS;
CHARLES HARRIS; LARRY HENDRIX, JR.; JERRY HENSLEY;
TIMMIE HENSLEY; KENNETH HOLLAND; MORGAN LEE HOLMES;
IRA HUFF; CLAYTON M. JACKSON; PHILLIP JACKSON; PAUL E.
JOHNSON, WILLIE JOHNSON; CHESTER JONES; LARRY JOSEPH;

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RAYMOND JOSEPH, ROBERT JOSEPH, III; CLETIS WELLS, JR.;
HERSHEL DIXON, JR.; PEARL PENNINGTON, JR.; RICHARD
YOUNG, JR; DAVID KILBOURNE; J. B. KILBOURNE; FRED
KILBURN; JOHNNY RAY KILBURN; KENNETH LAWSON; EARL
LEWIS; DENVER LEWIS; HOBERT LEWIS; ALLEN WAYNE
MADDEN; COVA MAGGARD; JAMES C. MAGGARD; COLEMAN
MCDANIEL; CARTER ALLEN MELTON; DOUGLAS K. MELTON;
MICHAEL W. MELTON; RANDALL KENT MELTON; WILLIAM
CRAIG MELTON; MANUEL MILLER; DON MORGAN; RUSSELL
DOUGLAS MORGAN; EDMON MORROW; DONNIE MOSLEY;
ARTHUR MULLINS; CECIL MURRAY; CLARENCE PATRICK
NAPIER; DANIEL NAPIER; HAROLD D. NEACE; EDDIE NEAL;
CHARLIE NORTH; JERRY OLIVER; BOBBY JOE OSBORNE; JAMES
J. OSBORNE; MARCUS OSBORNE; OTIS OSBORNE; PAUL R.
OSBORNE; SHERMAN OSBORNE; TIMOTHY OTIS OSBORNE;
LLOYD PENCE; GILLIS GLEN PENNINGTON; JESSE PENNINGTON;
JIMMIE PENNINGTON; THOMAS WADE PENNINGTON; WILLIAM
I. PENNINGTON; EUGENE PENNINGTON, JR.; CHARLES E.
PHILPOT; BILLY RADFORD; WILLARD RADFORD; RHONDA REID;
HAROLD ROBERTS; KENNETH ROBERTS; LARRY ROBERTS;
RANDY ROBERTS; WAYNE ROBINSON; RICHARD SALYERS;
BURNIS SHEPHERD; LEONARD SHEPHERD WENDALL SHERMAN,
OKIE SHORT; GARLAND SIZEMORE; JOHNNY E. SIZEMORE;
ALFRED SMITH; CHARLES EDWARD SMITH; CHARLES W. SMITH;
HURLEN L. SMITH; JIMMIE SOUTHWOOD; ORVILLE SPARKS; D.J.
STEPHENS; DAVID STIDHAM; BUFORD O. STONIC; NORMAN
JEROME STUNK; BILL THOMAS; RODNEY THOMPSON; BOBBY J.
TRAMMELL; HAROLD TURNER; STEVE WALKER; WALLACE
WARFIELD; CHARLES C. WELLS; CLETIS JR. WELLS; GARY
WELLS; JOHN W. WELLS; RONALD W. WELLS; EDDIE WHITAKER;
EVERETT EARL WHITAKER; JACK E. WHITAKER; JAMES
WHITAKER; SHELVIN WHITE; HAROLD WILLIAMS; HERSHEL
WILLIAMS; KELVIN L. WILLIAMS; MARCUS WILLIAMS; RONALD
LEE WILLIAMS; WOODROW WILLIAMS; DAVID WAYNE WOODS;
DENVER D. WOODS; OPHA WOODS; RONALD WOODS; ANTHONY
WAYNE WOOTON; THOMAS H. WRIGHT; JOHN DOE(S); JANE
DOE(S),
Appellants
v.
SUN COMPANY, INC., SUN COAL COMPANY, WHITAKER COAL
CORPORATION AND BANKERS TRUST COMPANY
___________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 98-cv-3572)
District Judge: Hon. Thomas N. O’Neill, Jr.
___________
Before: SLOVITER and RENDELL, Circuit Judges,
and McCLURE, District Judge
JUDGMENT

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This cause came to be considered on the record from the United States District
Court for the Eastern District of Pennsylvania and was submitted under Third Circuit
LAR 34.1(a) on September 12, 2002.
On consideration‘ whereof, it is now here ordered and adjudged by this court that
the judgment of the District Court entered on June 12, 2001, be and the same is hereby
affirmed. Costs taxed against appellants. All of the above in accordance with the opinion
of this Court.
ATTEST:
Acting Clerk
Dated: 12 September 200

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