Evans, et al. v. TVA & TVARS
August 12, 2016 Litigation Update
Evans v. Tennessee Valley Authority Retirement System and Tennessee Valley Authority
On August 12, 2016, the United States Court of Appeals for the Sixth Circuit issued a decision holding that cost-of-living adjustments (“COLAs”) are not vested benefits and, therefore, the 2009 amendments did not violate the TVARS Rules and Regulations (Section 13), which prohibit amendments that reduce vested benefits. In addition, the Sixth Circuit reversed the District Court’s holding that there was no judicial review of the TVARS Board’s actions, and remanded all other issues to the District Court “for further proceeding consistent with [the Sixth Circuit’s] opinion.” See the Sixth Circuit’s opinion and judgment.
October 7, 2015 Litigation Update
Evans v. Tennessee Valley Authority Retirement System and Tennessee Valley Authority
On September 15, 2015, Plaintiffs filed a notice to appeal the final judgment in the case Evans v. Tennessee Valley Authority Retirement System and Tennessee Valley Authority to the United States Court of Appeals for the Sixth Circuit. The case will now be reviewed by the Court of Appeals. See the Notice of Appeal.
August 28, 2015 Litigation Update
Evans v. Tennessee Valley Authority Retirement System and Tennessee Valley Authority
On August 19, 2015, Judge Trauger of the United States District Court for the Middle District of Tennessee granted TVA’s motion for summary judgment and dismissed all of Plaintiffs’ claims against TVARS and TVA in the lawsuit Evans v. Tennessee Valley Authority Retirement System and Tennessee Valley Authority.
In their complaint, Plaintiffs challenged amendments adopted in 2009 to the TVARS Rules and Regulations (“TVARS Rules”). Under these amendments, TVA contributed $1 billion to TVARS in exchange for the suspension of annual contributions during a four-year period from 2010 to 2013; cost-of-living adjustments (“COLAs”) were reduced from 2010 to 2013; the age of eligibility for COLAs for certain participants was raised to 60; and the annual interest crediting rate for the Fixed Fund was reduced to 6%. In the lawsuit, Plaintiffs claimed that the TVARS Board of Directors and TVA violated fiduciary duties, federal constitutional law, and the federal Administrative Procedures Act.
One of the issues raised in the complaint was whether the amended benefits, specifically the COLAs, are vested benefits that could not be changed or reduced. In granting TVA’s motion for summary judgment, the Court did not specifically rule on the vested nature of COLAs. Rather, the Court focused on the nature of the TVARS Rules and the authority of the TVARS Board of Directors under the TVARS Rules in dismissing the claims against TVARS and TVA. Click here to see the Court’s opinion and order.
Plaintiffs have 60 days from August 19, 2015, to file an appeal to the United States Sixth Circuit Court of Appeals.
March 31, 2015 Litigation Update
Due to Mr. Duncan’s passing, the lawsuit is now named Evans v. Tennessee Valley Authority Retirement System and Tennessee Valley Authority. It is still before Judge Trauger in the United States District Court for the Middle District of Tennessee, Nashville Division.
Discovery has closed and the parties have filed and briefed potentially dispositive motions. Plaintiff and TVA each filed a motion for summary judgment. Plaintiffs opposed TVA’s motion and TVA opposed Plaintiffs’ motion. At a meeting, the TVARS Board approved a brief responding to these motions. TVARS opposed Plaintiffs’ motion on issues except on whether COLAs are a vested benefit. TVARS opposed TVA’s motion only on the issue of whether COLAs are a vested benefit. The TVARS response brief can be found here.
If Judge Trauger decides that these pending motions do not raise genuine issues of fact, the judge would then be expected to rule on the pending motions and enter judgment. A party dissatisfied with her ruling then could appeal it to the Court of Appeals for the Sixth Circuit. If Judge Trauger decides that the pending motions raise genuine issues of fact, she would then set the case for trial on those fact issues.
As background, in the complaint, Plaintiffs challenge amendments adopted in 2009 to the TVARS Rules and Regulations. These amendments accepted $1 billion in 2009 contributions from TVA instead of contributions in 2010, 2011, 2012 and 2013, and also sought to reduce pension liabilities by $300,000,000 through reducing cost-of-living adjustments (“COLAs”) from 2010 to 2013, raising the age of eligibility for COLAs for certain participants, and reducing the rate at which fixed funds earned interest. Plaintiffs claim that the amendments violated federal law, fiduciary duties, and the federal Administrative Procedures Act.
August 13, 2014 Litigation Update
The parties continue to conduct the discovery allowed by the Court. Working with Plaintiffs and TVA, TVARS has filed over 2,500 documents available to the TVARS Board at the time of the August 17, 2009 TVARS amendments at issue in this action. On August 25, 2014, Plaintiffs and TVA are to file motions to supplement or strike documents filed by TVARS. On September 4, 2014, Plaintiffs are to depose a TVARS representative on about 30 topics designated by Plaintiffs. Then, Plaintiffs may ask the Court for more discovery. The Court may allow more discovery or may set a deadline for the parties to file dispositive motions. If the Court grants a party’s dispositive motions, judgment would be probably entered and the other party then might appeal. If the Court does not grant a party’s dispositive motions, the action would be set for trial.
Based on Plaintiffs’ motion and Defendants’ not opposing the motion, the Court ordered on Monday, July 8, 2013, that this lawsuit be re-opened, after having administratively closed it for settlement negotiations. The TVARS board members want to make sure TVA employees and retirees are updated on this pending lawsuit concerning the retirement system.
Plaintiffs are a half dozen TVA employees and retirees, seeking to represent a class of TVARS plan participants. Defendants are TVA and TVARS.
Filed in 2010, the lawsuit is now named Jerry Duncan, et al. v. Tennessee Valley Authority Retirement System and Tennessee Valley Authority. It is pending before Judge Aleta A. Trauger in the United States District Court for the Middle District of Tennessee, Nashville Division.
In the complaint, Plaintiffs challenge amendments adopted in 2009 to the TVARS Rules and Regulations. These amendments accepted $1 billion in 2009 contributions from TVA instead of contributions in 2010, 2011, 2012 and 2013, and also sought to reduce pension liabilities by $300,000,000 through reducing cost-of-living adjustments (“COLAs”) from 2010 to 2013, raising the age of eligibility for COLAs for certain participants, and reducing the rate at which fixed funds earned interest. Plaintiffs claim that the amendments violated federal law, fiduciary duties, and the federal Administrative Procedures Act.
In May 2012, the parties moved the Court to allow the parties an extended time to attempt to negotiate a settlement. The Court granted that motion by dismissing the action, subject to the parties’ right to reopen the action.
On July 3, 2013, Plaintiffs’ moved to reopen the action. Defendants did not oppose the motion. Monday, July 8, 2013, the Court entered an order re-opening the action.
The parties are continuing to negotiate. A Case Management Conference is set for July 26, 2013. As there are further developments, additional updates will be made available.