On December 29, 2004, employees of El Paso Corporation filed a lawsuit under ERISA and the ADEA against their employer in the United States District Court for the District of Colorado. The plaintiffs, represented by private counsel, asked the court for declaratory, injunctive, and compensatory relief, claiming that changes made to their pension plans violated federal law. Specifically, the plaintiffs claimed that their pension plans were negatively impacted when El Paso Corporation changed to a cash balance formula for determining pension benefits.

On March 22, 2007, the court (Judge Walker Miller) dismissed one of the plaintiffs' claims under ERISA (Claim III) but denied the defendant's motion to dismiss on all other claims. The Court found that the statute of limitations did not bar the remaining claims from proceeding. 2007 WL 891378 (D. Colo. Mar. 22, 2007).

On March 19, 2008, the court granted the defendant's motion for judgments on the pleadings, and granted in part and denied in part Plaintiffs' motion for class certification. The court dismissed Claims II and IV; as a result, only Claims I and V remained. Claim I alleged that the "wear-away period" in the pension plan violated the ADEA. Claim V alleged that the Summary Plan Description violated ERISA section 102 (29 U.S.C. § 1022). The court granted the plaintiffs' motion for class certification and conditionally approved the ADEA collective action on the condition that they resubmit a class definition in accord with the Court's dismissal of some of their claims. 2008 WL 762456 (D. Colo. Mar. 19, 2008).

On January 21, 2009, the court denied the plaintiffs' motion to reconsider the dismissal of Claims II and IV. The court also granted the defendant's motions for summary judgment on the ADEA claim, holding that it was time-barred because the conversion to a cash balance formula was a "discrete act" under Ledbetter v. Goodyear. Further, the court dismissed the plaintiffs' remaining ERISA (alleging inadequate notice in the Summary Plan Description) claim because there was no evidence that the plaintiffs relied on the Summary Plan Description or that they suffered prejudice because of it. After this decision, Plaintiffs had no remaining claims. 2009 WL 151532 (D. Colo. Jan. 21, 2009).

The court granted plaintiffs' motion to alter or amend judgment on August 28, 2009. As a result of the Ledbetter Legislation, the court decided that the plaintiffs' ADEA claim (Claim I) was not time-barred. 2009 WL 2766718 (D. Colo. Aug. 28, 2009).

On September 17, 2009, the defendants filed a renewed motion for summary judgment on the merits of ADEA claim. On July 26, 2010, the court found for the defendants and granted summary judgment, finding that the pension transition did not violate ADEA.

On August 6, 2010, the court entered its judgment against the plaintiffs and in favor of defendants on claim 1.

On August 19, 2010, the defendants filed a motion to bifurcate attorneys' fees. On August 25, the court granted the motion upon the condition that their motion included a good faith estimate of the dollar amount of their claim.

On August 20, 2010, the defendants submitted a motion seeking $141,423.03 in costs; approximately $98,000.00 of that amount was attributable to “Mercer electronic discovery ordered by Court.” After a hearing, the court awarded the defendants $5220.25, representing $4,086.35 for the costs of transcripts, witness fees of $1,021.00, and copying charges of $120.90.

On August 24, 2010, the plaintiffs filed an appeal to the United States Court of Appeals for the Tenth Circuit.

On August 27, 2010, the defendants filed a motion for attorneys' fees under ERISA for fees incurred in defending against the plaintiffs’ ERISA claims up until the January 21, 2009 order dismissing the plaintiffs’ final ERISA claim. The plaintiffs opposed the motion, arguing that attorneys’ fees should not be awarded.

On March 30, 2011, the court denied the defendant's motion for attorneys' fees.

On June 9, 2011, the court granted in part and denied in part the defendant's motion for taxation of costs. The court increased its award from $5,220.25 to $7,995.90, but denied the other motions.

On August 11, 2011, the Court of Appeals affirmed the district court's decision. In its opinion, the court explained that “wear-away” periods were caused by giving a transition period that employers were not obligated by law to give. The court refused to punish the defendants for giving a benefit it was not obligated to give in the first place. Second, the court recognized that the cash balance benefit continued to grow equally for everyone, irrespective of the age of the employee. Finally, the court noted that older workers had the option of choosing the “frozen” final average pay benefit rather than the cash balance benefit, if any employee found that to be more valuable.

The court also made clear that when employers make major changes to their pension plans they must give notice of those changes to employees. The court analyzed and approved the notices that the defendants sent out to its employees, making specific and detailed findings regarding what employers must include in Summary Plan Descriptions – and what they need not include – when changes are made to pension plans.

On December 22, 2011, the plaintiffs filed Petition for Writ of Certiorari, but it was denied on February 28, 2012.

This case is now closed.

Haley Waller - 08/18/2010
Ginny Lee - 04/10/2017


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