Daniel v. Northrop Grumman Space & Mission Systems Corp.

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 05-10320 OCTOBER 14, 2005
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 03-00127-CV-CWH-5

STEVE DANIEL, On Behalf of
Themselves and All Other
Former Salaried Employees
of Defendants Macon Plant
Similarly Situated,
CAROL REAGAN, On Behalf of
Themselves and All Other
Former Salaried Employees
of Defendants and Macon
Plant Similarly Situated,

Plaintiffs-Appellants,

versus

NORTHROP GRUMMAN SPACE &
MISSION SYSTEMS CORPORATION,
f.k.a. TRW, Inc.,
LUCAS WESTERN, INC.,

Defendants-Appellees.
________________________

Appeal from the United States District Court
for the Middle District of Georgia
_________________________
(October 14, 2005)
Before BIRCH, HULL and BOWMAN *, Circuit Judges.

PER CURIAM:

Steve Daniel and Carol Reagan (collectively, "plaintiffs") brought this action

against Northrop Grumman Space & Mission Systems Corporation, which was

formerly known as TRW, Inc., and Northrop's wholly-owned subsidiary, Lucas

Western, Inc., (collectively, "defendants") seeking severance pay and accrued

vacation pay under an employee benefit plan governed by the Employee

Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001–1461

(2000). The district court entered summary judgment for defendants and dismissed

plaintiffs' claims. On appeal, plaintiffs assert that the district court erred when it

(1) failed to provide the notice required by Federal Rule of Civil Procedure 56(c)

before granting summary judgment; (2) granted summary judgment to defendants

rather than to plaintiffs; and (3) refused to certify the case as a class action. We

affirm.

Plaintiffs were salaried employees at TRW's Macon, Georgia, manufacturing

plant. The plant produced component parts for the aerospace industry. In March

2000, TRW announced plans to close the Macon plant due to market conditions.

Several months later, Alliance Aerospace LLC expressed an interest in purchasing

*
Honorable Pasco Bowman, II, United States Circuit Judge for the Eighth Circuit, sitting
by designation.

2
the plant as a going concern. Under the terms of the Asset Purchase Agreement

executed by Alliance and TRW, Alliance acquired ownership of the Macon plant

on January 1, 2001, and assumed TRW's remaining production contracts. The

agreement provided that Alliance would offer employment to salaried TRW

employees working at the plant. TRW also procured Alliance's assent to give

transferring employees credit for unused TRW vacation time and to pay severance

benefits to transferring employees that Alliance laid off on or before October 1,

2001.

After the sale, Alliance retained plaintiffs in their same positions at the same

rate of pay or better. Alliance was unable to generate new business, however, and

filed for bankruptcy on July 16, 2001. Plaintiffs were terminated and filed this suit

to recover severance and vacation benefits from TRW.

The first issue on appeal is whether the district court gave the parties

adequate notice that it might issue summary judgment. Contrary to plaintiffs'

assertions that they were sandbagged by the entry of judgment, we conclude that

the district court's intentions to make a dispositive ruling were apparent and

understood by all parties. At a status conference following the close of discovery,

the parties agreed that the most prudent course of action was for the district court

to decide the threshold question of defendants' ERISA liability before reaching the

3
procedural matter of class certification.1 The district court informed the parties that

it would "make a ruling on" the issue of liability, and it set forth a schedule for the

parties to brief the issue. Tr. of Status Conference at 19 (Feb. 19, 2004). In the six

months that followed, plaintiffs submitted lengthy briefs addressing liability, which

were supported by deposition transcripts, documentary evidence, and affidavits.

The submission of briefs and evidence consistent with Rule 56 confirms plaintiffs'

understanding of the district court's intention to make a dispositive ruling.2

Having concluded that the district court's notice of intent to enter summary

judgment was adequate, we turn to plaintiffs' second contention on appeal: that the

district court erred on the merits in entering summary judgment for defendants.

Plaintiffs seek benefits under the TRW/Lucas Termination Allowance Plan

(the "Allowance Plan"), an ERISA plan governing the payment of severance and

vacation benefits to salaried employees terminated due to a reduction in force. The

1
During the conference, counsel for plaintiffs asserted that no material facts were in
dispute and that the district court should "first determine[] . . . if these plaintiffs or the class have
a sustainable claim based on the plan documents" before addressing the question of class
certification. Tr. of Status Conference at 15 (Feb. 19, 2004).
2
While not a model of clarity for purposes of Rule 56(c), the district court's notice was
sufficient. Had the notice been insufficient, we nonetheless would have found the error harmless.
Plaintiffs suggested that the district court rule on the dispositive issue of liability, conceded that
the material facts were not in dispute, submitted evidence supporting their legal arguments, and,
although pressed to do so at oral argument, failed to identify any evidence supportive of their
claims that might have been produced by additional discovery. See Trustmark Ins. Co. v. ESLU,
Inc., 299 F.3d 1265, 1268–69 (11th Cir. 2002).

4
Allowance Plan states, however, that such termination benefits will not be paid in

the case of "[f]acility sale, where employees are offered and accept continued

employment." Allowance Plan § 3.2(G). Plaintiffs assert that the "facility sale"

provision should not prevent their receipt of benefits because the provision is

"ambiguous as to whether the [continued employment] will have to be with TRW

or Alliance to bring the employee under the exclusion." Appellants' Br. at 18. We

disagree. The only logical reading of this provision, which covers the specific

situation in which the plant is sold, precludes the payment of termination benefits

when an employee continues in employment with the purchaser, here Alliance.3

The alternate reading that plaintiffs suggest would result in "the equivalent of a

windfall recovery for the Plaintiffs, who never suffered a day of decreased pay or

unemployment" when they transitioned to employment with Alliance. Adams v.

Thiokol Corp., 231 F.3d 837, 846 (11th Cir. 2000). Because the Macon plant was

sold and plaintiffs were offered and accepted continued employment with the

purchasing entity, the plain language and evident intent of the Allowance Plan

precludes plaintiffs' claims for severance pay4 and vacation pay.5

3
Indeed, situations in which employees are offered continued employment with TRW are
governed by an earlier provision of the Allowance Plan. See Allowance Plan § 3.2(F)
(precluding severance pay to employees who "refuse[] reassignment within the organization").
4
The "Career Transitioning" memorandum issued by TWR in conjunction with its March
2000 closing announcement cannot save plaintiffs' claims. While the memorandum set forth a
severance pay plan for employees unsuccessful in procuring employment with another TRW

5
 Finally, because we conclude that the district court properly entered

summary judgment for defendants on plaintiffs' claims, we affirm the district

court's denial of class certification.

AFFIRMED.

facility, the first paragraph of the memorandum clearly states that the plan "will be made
available" only "[i]n the event a final decision is made to close the Macon facility." Because the
Macon facility was sold to Alliance and not closed, the severance plan discussed in the
memorandum was never implemented.
5
To the extent plaintiffs seek vacation benefits pursuant to a source other than the
Allowance Plan, we further conclude that there is no merit to their claims.

6