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Berman v. Microchip Technology Inc.

United States District Court, N.D. California

September 3, 2019

ROBIN BERMAN, et al., Plaintiffs,
v.
MICROCHIP TECHNOLOGY INCORPORATED, et al., Defendants. Plaintiff Termination Date Stipulated Severance Benefits

          ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT RE: DKT. NO. 99

          HAYWOOD S. GILLIAM, JR. United States District Judge.

         Plaintiffs Robin Berman, Bo Kang, Khashayar Mirfakhraei, Thang Van Vu, Donna Viera-Castillo, Girish Ramesh, Patrick Hanley, Ilana Shternshain, and Mandy Schwarz are former employees of Microchip Technology, Inc. and Atmel Corp., as well as participants in the Atmel U.S. Severance Guarantee Benefit Program (“Atmel Plan”). Plaintiffs brought this action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. (“ERISA”). Dkt. No. 1 ¶ 13.

         On March 22, 2019, the Court granted Plaintiffs' motion for partial summary judgment. See Dkt. No. 95. The Court concluded that (1) Plaintiffs were entitled to severance benefits under ERISA § 502(a)(1)(B); and (2) Defendants were liable for breach of fiduciary duty under ERISA § 502(a)(3). See Id. at 9-13. The Court did not, however, assess what damages Plaintiffs may be entitled to as a result of its ruling regarding liability. Id. at 14.

         Now pending before the Court is Plaintiffs' motion for summary judgment related to the amount of damages and prejudgment interest Plaintiffs are owed. See Dkt. No. 99. For the reasons detailed below, the Court DENIES Plaintiffs' motion for summary judgment.

         I.BACKGROUND

         Following the Court's order granting Plaintiffs' partial motion for summary judgment, the parties have agreed on the total dollar amount Defendants owe to each Plaintiff under the terms of the Atmel Plan, for a total of $629, 061.36. See Dkt. No. 100 at 3.

Plaintiff
Termination Date
Stipulated Severance Benefits

Robin Berman

April 6, 2016

$57, 984.94

Tom Vu

April 6, 2016

$63, 390.59

Donna Vierra-Castillo

April 6, 2016

$67, 177.98

Khashayar Mirfakhraei

April 6, 2016

$79, 591.28

Bo Kang

April 12, 2016

$76, 454.88

Girish Ramesh

May 20, 2016

$84, 349.18

Patrick Hanley

June 10, 2016

$63, 658.35

Mandy Schwarz

June 28, 2016

$72, 286.25

liana Shternshain

July 12, 2016

$59, 167.91

         Based on Defendants' breach of fiduciary duty, Plaintiffs also seek a ten percent per annum equitable surcharge on top of these stipulated benefit amounts to make Plaintiffs whole. See Id. at 4-6. Alternatively, Plaintiffs seek an award of prejudgment interest at the same ten percent annual rate, again as a “make-whole remedy.” Id. at 8.

         II. LEGAL STANDARD

         Under ERISA § 502(a)(3), a plan participant or beneficiary may bring a civil action “(A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.” 29 U.S.C. § 1132(a)(3) (emphasis added). Appropriate equitable relief under ERISA may include reformation of the terms of the plan, equitable estoppel, or surcharge. See Gabriel v. Alaska Elec. Pension Fund, 773 F.3d 945, 955-58 (9th Cir. 2014). Although plaintiffs may pursue simultaneous claims under both Sections 502(a)(1)(B) and 502(a)(3), they may not obtain double recovery. See Moyle v. Liberty Mut. Ret. Ben. Plan, 823 F.3d 948, 961-62 (9th Cir. 2016).

         Additionally, “[a] district court may award prejudgment interest on an award of ERISA benefits at its discretion.” Blankenship v. Liberty Life Assurance Co., 486 F.3d 620, 627-28 (9th Cir. 2007). In these circumstances, “[p]rejudgment interest is an element of compensation, not a penalty.” Dishman v. UNUM Life Ins. Co. of Am., 269 F.3d 974, 988 (9th Cir. 2001). Thus, prejudgment interest should compensate plaintiffs for the losses incurred as a result of the nonpayment of benefits. Id. “[P]re-judgment interest is intended to cover the lost investment potential of funds to which the plaintiff was entitled, from the time of entitlement to the date of judgment.” Nelson v. EG & G Energy Measurements Grp., Inc., 37 F.3d 1384, 1391 (9th Cir. 1994).

         III. DISCUSSION

         Following the Court's March 2019 order finding Defendants liable for the unpaid severance benefits, Plaintiffs now seek summary judgment as to their request for an additional ten percent per annum, calculated from their dates of termination, on top of the stipulated unpaid severance benefits. See Dkt. Nos. 99, 100. Plaintiffs cast this additional ten percent as either (1) an equitable surcharge; or (2) prejudgment interest for the lost value of their benefits. See Dkt. No. 100 at 4-13.

         A. ...


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