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Case Updates

IMPORTANT NEW DEVELOPMENTS

January 23, 2012

Last week, Judge Buckwalter issued Orders on both of the pending discovery motions, which were described in the update of December 12, 2011.

In one of the pending motions, we asked Judge Buckwalter to order Allstate to answer properly our requests for admission concerning its preservation of email and other electronic documents. Allstate refused to answer most of the requests on a variety of bases, two of which were primary. First, it objected to many of the requests on the ground that they related to the Mass Termination Program instead of only to the validity of the Release, the issue that is the focus of the current round of discovery. Second, it objected to our request that it address the company's efforts to preserve the documents of each custodian (the person to whose account an electronic document was stored), contending that it should have to respond only as to the custodian's efforts to preserve his or her own documents.

As you will see, the judge agreed with us completely on the first issue, stating that our document preservation requests properly related to documents concerning the entire Program, not just the Release. On the second issue, the judge reached a compromise. Allstate needs to answer as to the efforts of the IT and Legal Departments, but not necessarily all of Allstate. The judge gave Allstate 20 days in which to answer the requests for admission properly. Click here (Order on Motion to Compel) to review Judge Buckwalter's Order on the requests to admit.

In the other pending motion, Allstate asked the judge for a protective order to limit the scope of a deposition that we intend to take. Again, the principal dispute was over whether topics had to be limited to "the Release," or whether they could concern "the Program." Judge Buckwalter looked at each topic individually. On the great majority of topics, he agreed with us; on a few, he thought our topics went too far and addressed the merits rather than the validity of the Release. In a few instances, he limited the temporal scope of the topics. Click here (Order on Motion for Protective Order) to review Judge Buckwalter's Order on the deposition.

We are gratified by both of these Orders, and hope that these two rulings will cause Allstate to alter its position on other pending disputes, allowing our discovery to move forward with fewer objections.

In the meantime, Allstate is deposing our plaintiffs. We expect that the next two months will be filled with discovery from both sides concerning the validity of the Release. We will update this site again when we have additional information to share about the progress of the discovery.

December 12, 2011

For the past year, the parties have been engaged in vigorous "discovery" concerning the validity of the Release. Discovery is the process by which each side in a civil lawsuit obtains information from the other. In response to Plaintiffs' discovery, Allstate has produced thousands of pages of documents to Plaintiffs (although Plaintiffs believe the production to be grossly inadequate), answered written questions, and responded to Plaintiffs' requests for admission. Similarly, Plaintiffs have produced many thousands of pages of documents to Allstate, answered Allstate's written questions, and responded to Allstate's requests for admission.

Of course, Allstate has resisted a substantial portion of Plaintiffs' discovery. There are two motions pending before the Court concerning Plaintiffs' discovery: Plaintiffs' motion challenging the adequacy of Allstate's responses to Plaintiffs' discovery, and Allstate's motion for a protective order to limit the topics about which Plaintiffs may inquire during an upcoming deposition. Click here for the Plaintiffs' Challenging Sufficiency of Allstate's Responses. Click here for Allstate's Motion for a Protective Order. It seems unlikely that Judge Buckwalter will decide the motions until early 2012.

While the parties wait for those decisions, they will move forward with depositions. During depositions, the parties can question the opposing parties or other witnesses outside the presence of the judge. The questions and answers are transcribed by a court reporter, and can in appropriate circumstances be used as evidence in subsequent proceedings in the case. We expect the depositions to last into early 2012 as well.

The discovery process, including the resolution of the parties' disputes, is taking longer than we had anticipated when the process started. Our best estimate now is that our motion challenging the validity of the Release will not be filed until late spring of 2012.

Although this delay is frustrating to Plaintiffs, we wish to assure everyone that the Plaintiffs and their lawyers are working as hard as they can to achieve a successful result in the case as quickly as possible.

April 5, 2010

As directed by the United States Court of Appeals for the Third Circuit, the matters pending before Judge Fullam since 2001 were reassigned to the Honorable Ronald Buckwalter in January 2010. This includes the following cases:

Romero I, No 01-CV-3894, which challenges certain aspects of the Preparing for the Future Group Reorganization Program (Program) announced in November 1999, including (a) the validity of the General Release and Waiver Agreement (Release), (b) the termination of the R830 and R1500 contracts under which employee agents were hired and worked, and (c) Allstate's interference with pension and other employee benefits;

Romero II, No. 01-CV-6764, which challenges certain amendments to the Agents Pension Plan and alleged misrepresentations relating to eligibility for early retirement and other pension benefits; and

EEOC v. Allstate Insurance Company, No. 01-CV-7042, which challenges the validity of the Release under the Age Discrimination in Employment Act (ADEA), the Civil Rights Act of 1964 (Title VII), and the Americans with Disabilities Act (ADA).

Judge Buckwalter is an experienced jurist who has sat on the District Court for two decades.

At the Court's request, the attorneys for the respective parties met for a status conference on February 14, 2010, at which time Judge Buckwalter made clear that he would follow the mandate of the Court of Appeals and limit "merits" discovery to issues relating to the validity of the Release executed by nearly all of the 6,200 employee agents whose employment contracts were terminated as part of the Program. The parties subsequently were able to negotiate a proposed form of case management protocol under which certain issues relating to the validity and applicability of the Release can be decided by the Court. This will be presented to Judge Buckwalter so that it can be entered as an order of the Court. Plaintiffs already have provided Allstate with a copy of the discovery requests that will be served upon entry of the order.

We are pleased Judge Buckwalter has indicated a willingness to meet with the parties as frequently as necessary to ensure that progress can be made in these long-delayed cases.

We will continue to update this website as developments occur.

June 2, 2008

On June 2, 2008, the Romero plaintiffs filed their opening brief with the United States Court of Appeals for the Circuit seeking reversal of Judge Fullam's ruling from June 2007, which dismissed the three claims the Romero plaintiffs asserted with respect to the early retirement and other benefits they lost as a result of various amendments and other changes Allstate attempted to make to the Agents Pension Plan since 1991. A copy of the opening brief may be downloaded in PDF format by clicking here.

The proposed class action lawsuit known as "Romero II" was filed by 32 individuals who had been employed by Allstate Insurance Company ("Allstate") under R830 Agent Compensation Agreement and R1500 Agent Employment Agreement and who remain participants in and/or beneficiaries of the Agents Pension Plan. The plaintiffs allege that the Allstate defendants sought to amend the Plan throughout the 1990's for the purpose of unlawfully "cutting back" accrued retirement benefits. The lawsuit also alleges that Allstate knowingly misrepresented that agents who continued in the service of the company as so-called "independent contractors" could not accrue additional retirement benefits or become entitled to early retirement.

Court I of the Complaint alleges that certain amendments to the Pension Plan that purportedly were adopted in 1994 and 1996 (relating to "credited service" and defining the term "employee") violated section 204(g) of the Employee Retirement Income Security Act or "ERISA." Count II alleges that Allstate and the plan administrator violated their fiduciary duties under section 404 of ERISA by falsely representing that service to Allstate as a so-called "independent contractor" would not count as "credited service" under the Pension Plan. Count III alleges that certain amendments which Allstate attempted to adopt in an effort to phase-out "beefed up" early retirement benefits also violated section 204(g) because they had the effect of eliminating or reducing an early retirement benefit. Plaintiffs dismissed Court IV of the Complaint in 2005.

By Order dated March 30, 2004, the Honorable John P. Fullam, Senior U.S. District Judge, dismissed all four claims asserted by plaintiffs on the ground that they are time-barred and, in any event, the plaintiffs would be able to recover their lost benefits through the companion Romero I and EEOC cases. Additional information about Romero I and the two lawsuits the EEOC has brought against Allstate can be found at www.allstatecase.com. Plaintiffs thereafter appealed the dismissal.

In 2005, the United States Court of Appeals for the Third Circuit reversed Judge Fullam's ruling. The Court of Appeals found that it was premature to dismiss plaintiffs' claims as time-barred, holding that no claim accrues under section 204(g) until there has been a "clear repudiation" of retirement benefits. As to Count II, the Court of Appeals held that the fiduciary duty claim was not duplicative of the claims that remain pending in the Romero I litigation, therefore, is deserving of consideration in its own right and solely in the context of section 404 of ERISA.

After the case was remanded back to Judge Fullam for further proceedings consistent with the Court of Appeal's opinion, Allstate renewed a motion seeking dismissal of the remaining claims on the ground that they were duplicative of claims that had been adjudicated in two earlier decisions known as "Scott" and "Swain." Plaintiffs thereafter renewed their motion for class certification.

In a ruling dated March 21, 2007, Judge Fullam advised the parties that he has reached a number of tentative conclusions in this case, as well as in the pending Romero I and EEOC cases. As set forth in the memorandum opinion issued by the Court, Judge Fullam stated that he had concluded that challenged amendments to the Agents Pension Plan were "validly adopted and became effective." In reaching this conclusion, it appears that Judge Fullam relied exclusively on Scott and Swain, despite the fact that the claims in those two cases were brought in connection with different amendments to the Plan that were adopted by Allstate in November 1991, and made retroactive to January 1, 1989. Judge Fullam has invited the parties to submit additional briefs that bring to the Court's attention any issues that he may have overlooked, as well as any argument or "other factor" that impugns the decisions in Scott and Swain. Plaintiffs believe that the tentative conclusion reached by Judge Fullam is not correct and will file a brief that attempts to explain why he is in error. We will keep you advised of any further rulings from the Court.