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Page v. Pension Benefit Guaranty Corp.

July 31, 2007


The opinion of the court was delivered by: Richard W. Roberts United States District Judge


Plaintiffs, class representatives, brought this action against defendant Pension Benefit Guaranty Corporation ("PBGC") claiming that PBGC failed to provide benefits to participants in terminated pension plans as was required under the Employee Retirement Income Security Act ("ERISA"). After the parties reached a settlement, PBGC moved to end the implementation of that settlement and, in response, plaintiffs moved for the referral of outstanding administrative issues to a jointly created settlement board. PBGC seeks reconsideration of the magistrate judge's decision to grant plaintiffs' motion and deny without prejudice PBGC's motion. Because referral of the pending administrative issues to the jointly established settlement board is appropriate and is neither clearly erroneous nor contrary to law, PBGC's motion for reconsideration will be denied.


This case involves the settlement of two class action lawsuits filed in 1988 and 1989 concerning termination of pension plans. (See Mot. for Recons. 3.) In 1996, after litigation and negotiation, the parties entered into a Settlement Agreement. (See id.) The Settlement Agreement provided for a Settlement Director to implement and manage certain aspects of the settlement, as well as a Class Action Settlement Board ("CASB") -- composed of two counsel for plaintiffs, two PBGC representatives, and one lawyer in private practice -- to oversee the work of the Settlement Director. (See id.) The Settlement Director was to locate, process, and pay as many eligible class members as possible during a 36-month implementation period. (See Mot. for Recons., Ex. 2, Settlement Agreement § 18.2.) After twice extending the implementation period, the implementation period ended August 31, 2002. (See Mot. for Recons. 3-4 n.2.)

As the end of the settlement implementation period approached, the parties executed a Wrap Up Agreement which set terms for ending the settlement and made several changes to the Settlement Agreement. (See id.) The Wrap Up Agreement provided for "shut down of the substantive work of the Settlement Director by August 31, 2002, and for the CASB to disband by December 31, 2002." (See id. at 5 (citing Mot. for Recons., Ex. 3, Wrap Up Agreement ("Wrap Up Agreement") at 1, 2).) PBGC claims that during this four-month period, the CASB was limited to "conducting a final audit of the CASB's operations, reconciliation of trust and checking accounts, transfer of files and documents, and the submission of a final report to the U.S. District Court." (Mot. for Recons. 5; see Wrap Up Agreement at 10-11.)

On December 16, 2002, in accordance with the Wrap Up Agreement, the parties submitted their Final Report to the Court. (See Cross Mot. to Enforce Settlement Agreement, Ex. 1, Joint Notice of Filing of Final Report for Order of Discharge ("Final Report").) During this time, the Settlement Director ceased work and remaining claims were being processed through the PBGC's Pension Search Program ("PSP"). According to PBGC, all that remained for the parties was to "dismantle the administrative machinery."*fn1 (Mot. for Recons. at 6.) The CASB was to complete its tasks and cease operations by March 31, 2003. (See Final Report at 16-17.)

Although the completion of the tasks proceeded in a timely manner, PBGC alleges that plaintiffs' counsel "subsequently refused to work on the final close out tasks." (Mot. for Recons. at 6.) Thereafter, PBGC contacted plaintiffs' counsel "seeking their agreement to execute five concrete tasks necessary for close out." (Id. at 7.) PBGC alleges that plaintiffs responded, but "fail[ed] to address the specifics of a close out at all." (Id.)

As a result, PBGC filed a motion to close out the settlement. In response, plaintiffs filed a cross-motion to refer administrative issues to the joint settlement board. The magistrate judge granted plaintiffs' motion for referral of issues to the CASB and denied PBGC's motion without prejudice. (See Mem. Order. of Feb. 25, 2005.) PBGC now moves for reconsideration of that order.


Fed. R. Civ. P. 72(a) and LCvR 72.2(b) allow a party to seek reconsideration of a magistrate judge's decision on a nondispositive matter. "On review, the magistrate judge's decision is entitled to great deference unless it is clearly erroneous or contrary to law, that is, if on the entire evidence the court is left with the definite and firm conviction that a mistake has been committed." Pulliam v. Cont'l Cas. Co., Civil Action No. 02-370 (RWR), 2006 WL 3003977, at *2 (D.D.C. Oct. 20, 2006) (citing Virtual Def. & Dev. Int'l, Inc. v. Rep. of Mold., 133 F. Supp. 2d 9, 20 (D.D.C. 2001) (quoting Neuder v. Battelle Pac. Nw. Nat. Lab., 194 F.R.D. 289, 292 (D.D.C. 2000))) (internal quotations omitted); see also LCvR 72.2(c) ("Upon a motion for reconsideration . . . a judge may modify or set aside any portion of a magistrate judge's order . . . found to be clearly erroneous or contrary to law."). By contrast, a magistrate judge's opinion in a dispositive matter is reviewed de novo. See Fed. R. Civ. P. 72(b).

PBGC argues that its motion to close out settlement should be considered a dispositive motion under 28 U.S.C. § 636(b)(1)(A), thereby warranting de novo review of the magistrate judge's decision. While some courts have held that § 636(b)(1)(A) enumerates a non-exhaustive list of dispositive motions for which a magistrate judge may not issue rulings, see, e.g., Vogel v. U.S. Office Products Co., 258 F.3d 509, 515 (6th Cir. 2001) (explaining that "unlisted motions that are functionally equivalent to those listed . . . are also considered dispositive"), PBGC cites to no authority stating that a motion of the sort decided by the magistrate judge here is one that should be included under § 636(b)(1)(A) and the District of Columbia Circuit has not indicated what motions, if any, beyond those enumerated should be considered dispositive. However, PBGC contends that the standard of review relied upon is not critical because the magistrate judge's decision should be overturned as it is also clearly erroneous and contrary to law. Under either standard, the plaintiffs prevail, as is discussed below.


PBGC claims that the magistrate judge granted the CASB jurisdiction over the PSP under the Wrap Up Agreement, to PBGC's prejudice. PBGC argues that this was error and that the magistrate judge misunderstood the plain language of the Wrap Up Agreement, ignored the remedy the parties chose and substituted CASB review in ...

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