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LEGAL ACTIONS

AETNA MEDICAL/DENTAL CLASS ACTION SUIT SETTLEMENT

Members (includes some retirees) and out-of-network providers are beginning to receive notices from a settlement administrator about a settlement under which Aetna agreed to pay up to $120 million. This settlement relates to class action litigation that began in 2007 over UIT payments for out-of-network benefits. It has been given preliminary approval by the New Jersey District Court.

Members and providers may submit claims to the administrator for consideration to share in distribution of the settlement.

On December 7, 2012, Aetna filed a proposed settlement for preliminary approval by the New Jersey District Court related to class action litigation that began in 2007 over payments for out-of-network benefits. The settlement has received preliminary approval, and the settlement administrator, Berdon Claims Administration, has begun mailing notices.

Notices are going to:

  • All Aetna subscribers, members and beneficiaries who were in medical or dental plans that included out-of-network benefits and received out-of-network services, from March 2001 through August 2013.
  • Out-of-network providers that submitted claims to Aetna for any of these members.

    NOTE: ALU offered Aetna medical plans to some retirees through 2011 and continues to offer retirees Aetna dental plans.

For more and contact info, click here.

Aetna is not changing its business practices in any respect as a result of the settlement. They will continue to pay out-of-network claims for covered services based on "allowed amounts" under the terms of a member's dental plan.

Members (retirees) may submit claims if they paid balance bills for out-of-network services during the prescribed period. Members will be able to submit claims to the settlement administrator from 2001 to August 2013 for "balance bills" they paid to out-of-network providers. A member may have been balance-billed by a provider if Aetna reimbursed for less than the provider billed on a medical claim. If a health plan member can provide documentation, they may receive payment from the settlement fund of up to an additional 3 percent to 5 percent of the allowed amount paid by Aetna on that claim.

If members have questions about the settlement or how to file a claim, they should contact the settlement administrator using the information in the notice they receive. '

AETNA CONTACT INFORMATION
Aetna UCR Litigation
c/o Berdon Claims Administration LLC
P.O. Box 15000
Jericho, NY 11853-0001
Phone: 800-600-3079
Fax: 516-393-0031
E-mail: aetna@berdonclaims.com
www.berdonclaims.com


LUCENT RETIREE MEDICAL SETTLEMENT – Update January 18, 2013

On Friday, January 18, 2013, the attorneys for the retirees filed a Seventh and Final Status Report Re: Settlement Distribution and Conclusion of Settlement Administration, to update the Court on the progress of the final phases of the settlement distribution and the completion of settlement administration.

The Seventh and Final Report provides a complete review of all efforts to distribute the settlement fund in both the initial and supplemental distributions. In these distributions, a total of $ 25.355 million was distributed to over 50,000 eligible households. The settlement funds reached approximately 95% of the intended recipients, after repeated efforts to locate and encourage settlement check recipients to cash their checks.

As of December 31, 2012, only about $ 24,000 of settlement funds had not been disbursed, and this money was distributed to two charitable organizations assisting employees and retirees about their retirement benefits, as specified in paragraph 4.4(c) of the Settlement Agreement. The two organizations are (a) Pension Help America and (b) Women’s Institute for a Secure Retirement.

The administration of the settlement is now complete. Class Counsel and the Settlement Administrator, Heffler Radetich & Saitta, LLP, appreciate very much your patience as we worked to make sure that all funds were distributed correctly and that as large a portion of the funds as possible reached the intended beneficiaries.


LUCENT RETIREE MEDICAL SETTLEMENT - Update as of 11/19/12

On Monday, November 19, 2012, the Court entered an Order approving the Proposal for Conclusion of Settlement Administration by the end of 2012. The Proposal was made in the Sixth Status Report, filed November 9, 2012 (that report is posted in the update item immediately below).

Under the Court’s Order, settlement checks will continue to be valid and payable only until December 7, 2012. All settlement administration activities, including payment of remaining administrative expenses and payment of the balance of settlement funds to two charitable organizations involved in pension education and advocacy, will be completed by December 31, 2012.

A final Status Report confirming the completion of all remaining steps in settlement administration will be filed with the Court on January 15, 2013 and posted on this website.

 


LUCENT RETIREE MEDICAL SETTLEMENT - Update as of 11/9/12

On Friday, November 9, 2012, the attorneys for the retirees filed a Sixth Status Report Re: Settlement Distribution and Proposal for Conclusion of Settlement Administration, to update the Court on the progress of the settlement distribution and to propose a timeline for the completion of all settlement administration activities in this case.

As stated in the last Update, in August the Court approved a second distribution of unclaimed settlement funds to confirmed payees from the first settlement distribution. This will distribute an additional $ 1.265 million to certain confirmed payees, based on a rule that the minimum check amount must be at least $ 10.00. This second distribution was mailed on September 11, 2012 to 39,289 eligible households.

As of November 6, 2012, checks totaling approximately $ 100,000 remained outstanding. Under the proposal to complete settlement administration, checks would continue to be valid and payable only until December 7, 2012. After that date, the settlement administration would be completed, with payment of remaining administrative expenses and the balance paid to two charitable organizations involved in pension education and advocacy.

All retirees who are holding uncashed checks from either the first or second settlement distribution should immediately cash or deposit their checks. Checks will not be valid after December 7, 2012.

The Sixth Status Report and Proposal for Conclusion of Settlement Administration will be reviewed with the Court on November 15, 2012. Additional information will be posted after that conference.



LUCENT RETIREE MEDICAL SETTLEMENT- August 7, 2012

On Wednesday, August 1, 2012, the Court conducted a telephone status conference with the attorneys in the case to review the status of the settlement distribution.

During the conference, the Court reviewed the information presented in the Fifth Status Report Re: Settlement Distribution and orally approved the Proposal for Second Distribution of Remaining Funds.

On August 3, 2012, the Court entered an Order formally approving the Proposal for Second Distribution.  As stated in the Order, there will be a second distribution of undisbursed settlement funds to confirmed payees from the first settlement distribution.  The additional amount of $ 1.265 million will be distributed to previously confirmed payees on or before September 15, 2012.  The second distribution will be subject to a rule that the minimum check amount must be at least $ 10.37.  Each person receiving a second payment will receive a check equal to about 5% of the amount he or she received in the first distribution.

The status of settlement administration will next be reported to the Court in the Sixth Status Report, which will be filed with the Court on November 10, 2012.  The Court will hold a telephone conference on November 15, 2012.  It is expected that all settlement administration activities will be completed by the end of 2012
.


Health Care suit: LUCENT RETIREE MEDICAL SETTLEMENT -- UPDATE- July 25, 2012

On Wednesday, July 25, 2012, the attorneys for the retirees filed a Fifth Status Report Re: Settlement Distribution and Proposal for Second Distribution of Remaining Funds to update the Court on the progress of the settlement distribution and to propose a second distribution of settlement funds that remain available due to the uncashed settlement checks.

 

As detailed in the Report, as of July 16, 2012 class members have cashed settlement checks representing 94.81% of the funds being distributed. This very high level of check redemption follows four months of effort by the Settlement Administrator to locate and communicate with class members or next of kin to maximize the number of settlement checks that are cashed. The Settlement Administrator has completed these efforts. It is not expected that there will be any significant progress in the future on the remaining uncashed checks.

 

The court filing also includes a proposal by class counsel to make a second distribution of settlement funds to confirmed payees from the first settlement distribution. The proposal is to distribute an additional $ 1.265 million to certain confirmed payees, based on a rule that the minimum check amount must be at least $ 10.00. This minimum payment rule would avoid small checks under $ 10 that are likely to be ignored, lost, or thrown away. If the Court adopts this proposal, the second payments will be made to 39,275 confirmed payees who cashed checks previously. This is about 79% of the total number of people who received and cashed the first settlement checks. Each person receiving a second payment would receive a check equal to about 5% of the amount he or she received in the first distribution.

 

The Report and proposal for a second distribution will be reviewed with the Court on August 1, 2012. Additional information will be posted after that conference.

 


LUMP SUM PENSION OPTION OFFERED TO FORMER LUCENT EMPLOYEES WHO EARNED A DEFERRED VESTED PENSION

The Lucent Retirees Organization (LRO) has recently learned that Alcatel-Lucent has mailed to eligible former employees information that will allow them to choose a lump sum payment option for their deferred vested pension.

The only persons receiving this offer are certain former employees who did not elect to or were not eligible to receive a deferred vested pension under the plan at the time of separation from Lucent. If you are currently retired and receiving a pension you are NOT eligible for this offer. more here...


DETAILS OF THE OFFER

  1. 1) To participate in the program you must request a pension benefit commencement package during the window noted in your letter.
  2. 2) The letter you received provides full details about how you should make this request either online or by telephone to the Alcatel-Lucent Pension Service Center.
  3. 3) If you elect to commence your pension benefit under this offer your properly completed election forms and supporting documentation must be returned to the Alcatel-Lucent Service Center postmarked no later than the last day of the 45 day election period shown on the Election Form.
  4. 4) You are not required to elect the lump sum option unless your lump sum is less than $5000. You can also elect any of the other monthly annuity pensions that are available to you under the plan.
  5. 5) If you previously were not eligible to receive your deferred vested pension due to age or service criteria, you may now be eligible under this program for either the lump sum or one of the other monthly annuity payment options that are currently provided under their Plan. If your properly completed election forms and supporting documentation are not postmarked by the end of your 45 day election period, your eligibility for participation in the Program will end and your ability to elect the lump sum payment option and commence your pension benefit prior to meeting the plan’s age and service criteria will no longer be available.
  6. 6) You are not required to begin your deferred vested pension under this program. If you do not wish to participate simply do not return your election forms. You can continue deferral of your vested pension until you are 70 ½.

The LRO cannot give you any financial advice as to what action you should take. You are, however, urged to consult with a financial advisor prior to making your decision. Also, you should consult your personal tax advisor to be sure you understand the tax implications before you elect your pension benefit.

You should pay particular attention to the TWO variables that can have a major impact on the amount you receive which are (1) life expectancy (mortality) tables and (2) the discount rate used. The LRO ( Frank Minter the LRO Pension Director at fcminter@aol.com) will be available to our members or others but suggest that you wait until you have received your package and have reviewed it.



Update as of June 1, 2012

On Friday, June 1, 2012, the Court conducted an informal telephone status conference with the attorneys in the case to review the status of the settlement distribution.

As stated in the Fourth Status Report filed on April 20, 2012 (available in the previous posting below), all individuals who are eligible to receive a settlement payment have now been identified and checks have been issued to them. The only activities ongoing at this time are efforts by the Settlement Administrator to locate recipients of uncashed checks or their next of kin, in order to increase the percentage of settlement checks which are actually cashed.

Since the last Status Report, the settlement administrator has succeeded in distributing additional cashed checks in the total amount of $ 100,686 and is in the process of re-issuing other checks having a total value of $ 112,850. These efforts have increased the percentage of funds actually distributed from the main November 2011 settlement distribution to 94.5% of the total. These efforts to locate and re-issue checks to additional recipients will continue during the next eight weeks.

Based on current information including projected administrative expenses, it is estimated that approximately $ 1.3 million will remain available for a second distribution to class members. The attorneys for the retirees will file a new Status Report and a specific proposal for a second distribution on July 25, 2012, which will be posted on this website. The Court will review this information in a status conference set for August 1, 2012.

The proposal for a second distribution will include a minimum amount requirement, so that checks in small amounts will not be issued. This will have the effect of eliminating some class members from the second distribution. In addition, the second distribution will be pro-rated in the same way as the original distribution and will result in payments that are only 5% to 10% of the amount that was received by class members in the original distribution.



Update as of April 20, 2012

On Friday, April 20, 2012, the attorneys for the retirees filed a Fourth Status Report Re: Settlement Distribution to update the Court on the progress of the settlement distribution and the ongoing investigation of the eligibility of approximately 450 additional households to receive settlement payments.

As detailed in the Report, as of April 18, 2012 class members have cashed settlement checks representing 93.67% of the funds being distributed. The Report provides additional information about (1) the steps being taken for the remaining uncashed checks, including robocalls and mailings to households that were issued the checks, (2) additional payments mailed out on April 18, 2012 to 15 households which previously had been under investigation, and (3) the completion of the review and payment to the approximately 450 households which have been under investigation for eligibility.

 

 


On Wednesday, November 30, 2011, settlement payment checks were mailed to 53,046 eligible class member households, This distribution, in the amount of $ 25,252,625, follows the Court’s November 15, 2011 Order formally approving the proposal to distribute settlement funds with two reserves.


 

I can provide you with the following information about the disbursements from the $36 million settlement fund.

A recap of the deductions from the settlement fund is attached.

  • First, certain expenses to prepare the mailing lists for the class notice and to mail the notice, and for the fees of the Independent Fiduciary who had to approve the settlement on behalf of the plans, were payable from the settlement fund before it became final. These expenses totaled $ 202,451.85.
  • Second, other incurred but unpaid expenses relating to the notice and settlement administration also were deducted. These expenses totaled $ 85,412.89.
  • Third, the Court awarded attorneys' fees in the amount of $ 9,720,000 (the firms requested that amount, equal to 27% of the settlement) and approved the attorneys' litigation expenses in the amount of $164,207.90.
  • Finally, the Court approved special payments of $ 7,500 to each of the seven Named Plaintiffs, for a total deduction of $ 52,500.

The starting invested balance of the settlement fund therefore was $25,775,427.36. As of August 31, 2011, the total balance was $25,805,035.36. Since the receipt of the settlement money in December 2010, the settlement fund has been invested in an interest-bearing escrow account, and the interest earned will be included in the amounts available to be distributed to class members. Unfortunately, the interest rates that can be obtained this year for risk-free short-term investments of settlement funds are terribly low.

There have been no subsequent payments from the settlement fund, although there will be deductions for the additional fees and expenses of the accounting firm and actuarial firm which have been incurred since November 2010. Under the settlement approved by the Court, the fees and expenses charged by these firms to identify all eligible class members and to calculate the payments due to them are proper administrative expenses that are paid from the settlement fund.

 

None of the law firms will request or receive any additional legal fees or expenses from the settlement fund for any of this work relating to settlement administration or for any other reason, because the fees awarded by the Court in November 2010 cover all future work by the legal team to complete the settlement administration.

 

If you have any other questions, please let me know. In the meantime, thank you again for your patience as we work to finalize the list of people who are eligible for settlement payments. Please continue to visit the "Latest News" of the settlement website ( www.lucentretireemedicalsettlement.com) for detailed updates on the status of settlement administration.

 

Sincerely,

Alan Sandals


Death Benefit Appeal – Rehearing Denied

On September 22, 2008, just days after class action counsel filed a Request for Rehearing, the U.S. Third Circuit Court of Appeals denied the Request. Class action counsel had asked that the full court review the decision of a 3-Judge Panel which upheld dismissal by the U.S. District Court in Newark, NJ of Lucent retirees’ lawsuit against Lucent Technologies over the company’s elimination of the Death Benefit in 2003.

The retiree plaintiffs had argued that the Pensioner Death Benefit was a vested pension benefit. In contrast to Lucent’s arguments that the Death Benefit was a mere “welfare” benefit not required to vest, the retirees’ arguments were well-grounded in fact and law; and ought to have persuaded the Third Circuit to at least re-hear the matter.

The LRO deplores this unfortunate result. Appealing the Third Circuit decision to the Supreme Court is one option of class action counsel. Meanwhile, the Third Circuit decision which strips the Death Benefit from about 35,000 beneficiaries of Lucent retirees, could have far reaching impact on other retirees who have a Death Benefit that mirrors the Death Benefit that Lucent eliminated and the courts have upheld the company’s action.

This concern will now be raised by the LRO’s Representatives to the National Retiree Legislative Network whose members include several former Bell System retiree groups. We will explore whether the NRLN can help us seek legislative relief in Congress as a recourse to what Lucent retirees and their surviving spouses have suffered.


Court of Appeals Affirms Dismissal of Death Benefits Lawsuit

The LRO learned on August 28, 2008, that the U.S. Third Circuit Court of Appeals in Philadelphia, PA has affirmed the decision of the U.S. District Court in Newark, NJ to dismiss the Lucent retirees’ lawsuit against Lucent Technologies over the company’s elimination of the Death Benefit on February 3, 2003.

In the appeal of the District Courts’ November 26, 2006 summary judgment dismissal of the lawsuit, attorneys for the retirees contended that the pensioner death benefit is an accrued and vested pension benefit that is protect by ERISA from unilateral termination. Lucent, on the other hand, had argued that the pensioner death benefit was an unvested welfare benefit that it could terminate unilaterally.

The three-judge panel concluded that, “The pensioner death benefit, a lump-sum payment made in the event of a pensioner’s death, was an unvested welfare benefit that Lucent could terminate without violating ERISA [Employee Retirement Income Security Act] or unilateral contract principles.”

The LRO vigorously disagrees with this conclusion. Unfortunately, the Appeals Court adopted virtually all of the fallacious reasoning of the District Court while essentially ignoring class action counsel’s arguments that the Death Benefit was vested. LRO will urge that counsel file a request for reconsideration which if granted would allow the full Third Circuit Court of Appeals to reconsider the 3-Judge panel’s decision.

The attorneys for the Lucent retiree plaintiffs, who argued the case before the three judges on April 16, 2008 will be meeting next week to discuss their course of action. We will follow up with further announcements as we get word. The LRO will assist them in every way possible.

“This is a sad day for Lucent retirees who had counted on a vested death benefit to help provide for the financial security of surviving spouses,” said Andy Guarriello, President of the Lucent Retirees Organization. “The LRO is certainly disappointed in the Court of Appeals’ decision and believes an incorrect judgment has been made.

“Our retirees had every right to believe the Death Benefit was a vested benefit within the Pension Plan. It therefore will come as a surprise to our retirees that according to the Appeals Court ‘Nothing in the (Lucent) Plan documents suggests that the pensioner death benefit vests during the life of the pensioner and the Plan documents certainly do not state such vesting in clear and express language’.

“The LRO wants to hear from you in two regards. We need to learn the reaction of its members to this legal conclusion that Lucent was within its rights to terminate the Death Benefit. LRO also wants to hear from you about instances of particular hardship that this ruling will cause our families if left standing. Email us at lro_message@lucentretirees.com .

Click here to read the entire opinion issued by the Court.


Federal Judge Rules Lucent Technologies Violated Law By Failing To Maintain Medical Benefits For Retirees

A news release was issued on June 12, 2008 announcing that a federal district court judge in Newark, N.J. has ruled that Lucent Technologies, now known as Alcatel-Lucent, violated the requirements of Section 420 of the Internal Revenue Code in administering its health care plan for management retirees during the period 1999-2006.

Lucent retiree plaintiffs had charged in a lawsuit filed on October 24, 2005 that, following several transfers beginning in September 1999 of excess pension assets to a retiree health care trust, Lucent failed to meet its "benefit maintenance" obligations for the years 1999 through 2003 and its "cost maintenance" obligation for the years 2004 through 2006, as mandated by plan provisions incorporating these requirements of Internal Revenue Code Section 420.

In a 40-page opinion released the morning of June 12, 2008, U.S. District Judge Peter G. Sheridan ruled that the federal Employee Retirement Income Security Act (ERISA) statute and the intent of Congress were very clear. Companies that take advantage of the special provision permitting transfers of excess pension funds to fund retiree health care benefits must comply with strict requirements that for a period of five years benefits be maintained at the same level as in the year preceding the first transfer. This "maintenance of benefit" rule was triggered by Lucent's first transfer of approximately $183 million on September 29, 1999.

The court ruled before trial on motions for summary judgment that the evidence at least established that Lucent breached its obligations to maintain benefits for the year 2003. Regarding the other years in the period 1999-2003 that are in dispute, the court ruled that the evidence did not permit a determination one way or the other and ordered discovery to continue as to Lucent's liability for years 1999 through 2002 under the "maintenance of benefit "rule as well as Lucent's liability for "maintenance of cost" for the years 2004 to 2006.

"This is a significant victory for Lucent retirees who have seen the cost of their company-sponsored health care insurance increase substantially since 2000," said Alan Sandals, lead attorney for the Lucent retirees. "While the court believed that the evidence assembled so far only permits a determination of a violation during the year 2003, we believe that further discovery and analysis will lead to findings of violations during other years as well."

The lawsuit challenged Lucent's reductions and terminations of retiree medical and prescription drug benefits, as well as increased co-pays and increased contribution requirements after the company made transfers from the management pension trust fund totaling $ 888.2 million to offset Lucent's obligations to pay for retiree medical benefits. Congress enacted strict conditions to ensure that participants did not experience benefits reductions at the same time the funding of their pension plan was being tapped by the employer.

The lead plaintiffs in the proposed class action lawsuit are Peter and Geraldine Raetsch of Reading, Pa. and Curtis Shiflett of Macungie, Pa.

"We commend the Lucent retirees and their attorneys for standing up for the rights of all Lucent retirees," said Andy Guarriello, President of the Lucent Retirees Organization. "Although the LRO couldn't be a plaintiff in this type of lawsuit, we have closely followed the case and provided the plaintiffs' attorneys with documents relating to the company's benefit plans."

Click here to read the entire news release.
Click here to read the court's order.
Click here to read the court's decision.


Three-Judge Panel Hears Oral Arguments In Death Benefit Case Appeal

A 1-hour oral argument was held April 16, 2008 before a three-judge Panel in the Third Circuit Court of Appeals in Philadelphia on the appeal from summary judgment and dismissal in favor of Lucent in the Death Benefit lawsuit brought by Lucent retirees. Chuck Graves, LRO Legal Team Director, and several LRO members attended the hearing. Click here to read Chuck's summary of the hearing.


LRO Supporting Retirees' Death Benefits and Health Care Lawsuits

The LRO is monitoring and supporting two class action litigations against Lucent Technologies. These class action lawsuits seek redresses for reductions and terminations of certain retiree benefits by Lucent Technologies.

Click here to read about the lawsuit to redress the termination of the retiree death benefit.


Click here to read about the lawsuit to redress the reduction and elimination of certain health care benefits.


Federal Judge Hears Arguments in Lucent Retirees' Health Care Lawsuit

A hearing on the Section 420 health benefits class action suit against Lucent Technologies took place on February 28, 2008.

Presiding was U. S. District Judge Peter Sheridan, the Judge in the case. Presenting for Plaintiffs was Alan Sandals of the firm of Sandals and Associates of Philadelphia; and for defendant Lucent, Howard Shapiro. Eleven retirees and three spouses were in the courtroom audience to hear the proceedings, having traveled from Pennsylvania, New York, and various parts of New Jersey.

The Judge heard arguments from each party on their motions for partial Summary Judgment. The issue is whether, following a transfer of money by Lucent in September 1999 from the Management Pension Trust to a Section 420 health care account within the Pension Trust, Lucent used the correct rule to set the level of health benefits over the next several years.

Click here to read the LRO's report on the hearing.


 

Lawsuit To Redress Reduction And Elimination Of Certain Health Care Benefits

In October 2005, a class action lawsuit was filed in U.S. District Court in Newark, N.J. against Lucent Technologies Inc., Lucent’s Employee Benefits Committee and Lucent’s Medical Expense Plan for Retired Employees. The suit claims that following transfers, beginning in 1999, of nearly $900 million of Lucent Management Pension Plan “surplus” assets to a health care trust to fund retiree medical benefits, Lucent violated a requirement to maintain the retiree benefits and in so doing cost retirees dearly.

Specifically, the suit alleges that beginning in 2001 and thereafter Lucent made impermissible cuts in retiree medical benefits by terminating coverage for some spouses, reducing levels of coverage and raising deductible levels and co-payment requirements. Retirees affected by Lucent’s decisions have suffered severe losses.

The LRO has fully supported the legal effort to have benefits restored or/and monetary restitution awarded. Click here to read the complaint on the lawsuit resulting from Lucent's reductions and terminations of retiree medical benefits coverage.

  Click here  to read the LRO's news release issued when this lawsuit was filed.

In February 2006, defendants filed a motion to dismiss the complaint. On March 10, 2006, plaintiffs filed an opposition to the motion to dismiss the complaint. In August 2006, this lawsuit was reassigned to a new judge. 

On September 28, 2006, the judge conducted a hearing with the attorneys for Lucent and the plaintiffs. The judge’s questions to the two sides were focused on clarifying the positions in the attorneys’ briefs on the case.  Lucent’s position was that the case does not belong in U.S. District court but in the realm of the Internal Revenue Service and/or the “exhaustion process” as defined within the Lucent benefits plan.  The attorney for the retirees argued that Lucent violated ERISA law and the court should enforce the law.

In an opinion issued October 27. 2006, the judge denied Lucent’s motion to dismiss the case. The judge ruled that Lucent must provide the Court with its input on the “substantive matters presented by the plaintiffs in this case,” including but not limited to “the timeliness of such claims [and] whether deductibles and co-pays were charged in violation of Plan terms, and the impact, if any, on Plan participants.”

While the Court’s Order and Opinion allowing the case to proceed does not necessarily translate to any particular outcome for the plaintiffs, Lucent will be required to confront the consequences of its conduct in a legal setting and turn over documents and submit to oral questioning of company witnesses.

Click here to read the judge’s opinion and click here to read the judge’s order.


 

Plaintiffs’ Attorneys File For Partial Summary Judgment In Healthcare Lawsuit

The LRO continues to support and track the status of the Lucent retirees’ lawsuit charging that the company failed to maintain health care benefits for retirees as required by Section 420 of the Internal Revenue Code and by Lucent’s medical plan and pension plan. Plaintiffs’ attorneys have filed a Motion for Partial Summary Judgment.

In these pleadings plaintiffs argue that as matters stand plaintiffs are entitled to have the trial court rule that the Report of a Special Committee appointed by Alcatel-Lucent is entitled to no credence for any of five reasons. (The Special Committee of former Lucent executives concluded that Lucent had not violated IRS regulations in transferring excess pension assets while cutting benefits.)

Further, plaintiffs attorneys have asked the U. S. Federal District Court to rule that as a matter of law Lucent failed to maintain benefits and thereafter further failed to maintain costs as required by law following the transfer of the excess pension assets. Defendant Lucent has been granted an extension of time in which to reply.

Click here to read the Plaintiffs’ Memorandum In Support Of Motion For Partial Summary Judgment.

Click here to read the Plaintiffs’ Statement Pursuant To Local Rule 56.1 In Support Of Motion For Partial Summary Judgment.


LRO Asks Alcatel-Lucent For Specific Information On 2008 Benefits

The LRO Board shares the views stated in messages from many LRO members that Alcatel-Lucent's June 30, 2007 letter to management retirees about 2008 healthcare and prescription drug benefits provided little specific information. LRO Vice President Andy Guarriello has sent a letter to John Hickey, Alcatel-Lucent Vice President, Human Resources, requesting that the company provide specific information soon so management retirees can make informed decisions about the future of healthcare and prescription drug coverage for themselves and their dependents. Click here to read Alcatel-Lucent's letter. Click here to read Andy Guarriello's letter.


Transcript of Oral Arguments In The Death Benefit Lawsuit Appeal

Click here to read the transcript of the April 16, 2008 oral arguments in the appeal of the dismissal of the lawsuit brought by Lucent retirees as the result of the Death Benefit being eliminated by Lucent Technologies on February 1, 2003. The oral arguments were before a three-judge panel in the United States Court of Appeal for the Third Circuit in Philadelphia, PA.


Lawsuit To Redress Termination of Retiree Death Benefit

In October 2003, a class action suit was filed in U.S. District Court in Newark, NJ against Lucent Technologies to redress the unlawful termination effective February 3, 2003 of death benefits owed under the pension plan sponsored by Lucent Technologies. An amended complaint was filed on November 10, 2005 adding further grounds for redress. Click here  to read the amended complaint on the death benefits lawsuit.

In December 2005, defendants filed a motion for summary judgment and a brief in support, plus a statement of material facts. On March 8, 2006, plaintiffs filed their brief in opposition to defendants’ motion for summary judgment.

A new judge was appointed in August 2006 to take over the Death Benefits lawsuit following the retirement of the previous judge. On November 9, 2006, the judge held oral argument on Lucent's motion for summary judgment in the death benefit case.

On November 28, 2006, the LRO received word from Alan Sandals, class action co-counsel for plaintiffs in the Death Benefit litigation against Lucent, that the U.S. District Court judge awarded “summary judgment” in the case in favor of the company and dismissed the case.

On first reading the judge appears to have ignored several of plaintiffs’ strongest arguments, deciding the case instead on provisions in ERISA (Employee Retirement Income Security Act) which generally (but not always) define a death benefit as a “welfare” benefit instead of a “pension” benefit. Welfare benefits have much less protection under ERISA, so this characterization was critical to the outcome. (Rights to pension payments are required to vest under ERISA.) In the court’s view, therefore, the Lucent pension plan death benefit can be terminated since it is not actually a pension benefit, just a “welfare” benefit hiding in a pension plan.

The Judge did not find any available exceptions to his interpretations of ERISA, that all death benefits are “welfare” benefits. This part of the Court’s decision appears either to misread or ignore provisions and assurances found in the AT&T Pension, Death and Disability Benefits Plan inherited in 1996 by Lucent. The Plan covers both the pension and the death benefit; and states that no changes in the Plan (either to pension or death benefit) may be made that “affect the rights of any employee to any benefit …to which he may have previously become entitled hereunder.” The question whether under the AT&T plan beneficiaries of employees and retirees become irrevocably entitled to receive the death benefit at some point, appears to have been left unanswered by the Court.

The ruling also does not discuss considerable evidence showing that both AT&T and Lucent historically understood this death benefit to be a pension benefit. To those retirees who worked at AT&T, this entitlement language was made so clear with respect to the death benefit as to be beyond question. Other parts of the Court’s one-sided reasoning are also challengeable.

This matter is by no means resolved. Retirees’ attorneys are appealing the decision to the U.S. Court of Appeals for the Third Circuit, based in Philadelphia. Click here to read the Judge’s Opinion.    Click here to read the Judge’s Order.
 


Retirees’ Attorneys File Reply Briefs In Death Benefits Lawsuit Appeal

The LRO continues to support and track the status of the lawsuit stemming from Lucent’s elimination of the Death Benefit. Further briefs (reply briefs to Lucent) have been filed with the U.S. Third Circuit Court of Appeals by plaintiffs’ class action attorneys in the appeal of the trial court’s dismissal of the retirees’ lawsuit challenging termination of the death benefit. Click here to read the reply brief by plaintiffs’ attorney Alan Sandals.

Click here to read the reply brief filed by plaintiffs’ attorney Jim Malone.


Attorneys For Lucent Retirees File Briefs In Appeal Of Death Benefit Lawsuit Dismissal

The attorneys for the Lucent retirees who are plaintiffs in the lawsuit against Lucent over the elimination of the Death Benefits filed on April 20, 2007 their appeals on the district court's dismissal of the lawsuit. The appeals were filed with the U.S. Court of Appeals for the Third Circuit in Philadelphia.

Alan Sandals, who also serves as the LRO’s attorney, and Victoria Quesada stated in the opening sentence of their brief’s “Summary of Argument” that the district court’s dismissal “is based on a fundamental error about the law governing pension plans under ERISA [Employee Retirement Income Security Act] and the Internal Revenue Code.

 Jim Malone, the attorney for other retiree plaintiffs, stated in the opening sentence of his “Summary of Argument” that “Pensioner Death Benefits were intended to be protected pension benefits under the plan documents.” To read the Sandals/Quesada 76-page brief, click here.

Malone’s 130-page brief can be accessed here.


NRLN Files Amicus Brief In Support Of Lucent Retirees

The National Retiree Legislative Network has filed an Amicus Brief in support of Lucent Retiree Plaintiffs-Appellants in the Lucent Death Benefits ERISA Litigation.

An Amicus Brief—often called a “friend of the court” brief—is a document filed in a legal proceeding by an interested party who is not directly part of the case, but who believes that the court’s decision may affect its interest.  

The brief was filed on April 26, 2007 with the U.S. Court of Appeals for the Third Circuit in Philadelphia and urges reversal of the U.S. District Court’s Order of Dismissal. The NRLN argues in the brief that the U.S. District Court erred by ruling the Pension Death Benefits were unprotected welfare benefits subject to post-retirement elimination, which Lucent did on February 1, 2003. Click here to read the 42-page Amicus Brief.


NRLN Issues News Release On Amicus Brief In Lucent Retirees’ Death Benefit Appeals Case

Jim Norby, President of the National Retiree Legislative Network, announced in an April 27, 2007 news release the NRLN's filing of an Amicus Brief with the U.S. Third Circuit Court of Appeals in Philadelphia in an effort to assist Lucent Technologies retirees regain the pensioner death benefit eliminated by the company in 2003.

“When an employer eliminates our members’ retirement benefit that should be protected by law, the NRLN has a duty to seek justice for the affected retirees,” Norby said. “We believe the U.S. District Court in Newark, N.J. erred in its November 2006 order of dismissal and judgment that the Pension Death Benefits were unprotected welfare benefits subject to post-retirement elimination.”

Norby said the NRLN is joining the Lucent retiree plaintiffs-appellants in asking that the case be remanded back to the U.S. District Court for further proceedings.

An Amicus Brief—often called a “friend of the court” brief—is a document filed in a legal proceeding by an interested party who is not directly part of the case, but who believes that the court’s decision may affect its interest.

Click here to read the NRLN News Release .