                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-29-2004

EEOC v. Bessemer Grp
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-4049




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                                                                 NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                      No. 03-4049
                                      ___________

              EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

                                            v.

                              BESSEMER GROUP INC.;
                              BESSEMER TRUST CO.,

                                                    Appellants

                                      ___________

                    On Appeal from the United States District Court
                           for the District of New Jersey

                District Court Judge: The Honorable Katharine S. Hayden
                               (D.C. Civil No. 03-cv-04006)
                                      ___________

                      Submitted Under Third Circuit L.A.R. 34.1(a)
                                     May 6, 2004

      Before: SLOVITER, FUENTES, Circuit Judges, and POLLAK,* District Judge.

                             (Opinion Filed: July 29, 2004)
                             ________________________

                               OPINION OF THE COURT
                              ________________________




  *
   The Honorable Louis H. Pollak, U.S. District Judge for the Eastern District of
Pennsylvania, sitting by designation.
FUENTES, Circuit Judge:

       This is a subpoena enforcement action under the Age Discrimination in

Employment Act of 1967 (ADEA). Petitioners, The Bessemer Group, Inc. and Bessemer

Trust Company (collectively “Bessemer”) were served with a subpoena to produce

documents relevant to an investigation being conducted by the Equal Employment

Opportunity Commission (“EEOC”). After Bessemer failed to comply, the EEOC

initiated an action to enforce the subpoena in the District Court for the District of New

Jersey. The matter was referred to a Magistrate Judge, who ordered the subpoena to be

enforced. Subsequently, the District Court affirmed the Magistrate Judge’s order and

Bessemer now appeals from that decision. Because we find that the subpoena was issued

in the course of an investigation pursuant to a legitimate purpose, we will affirm.

                                          I. Facts

       This case arises out of an employment discrimination claim filed against Bessemer

by a former employee, Florina Gualberto, in which she alleged that Bessemer

discriminates on the basis of age in the severance packages offered to terminated

employees in violation of the ADEA. Bessemer denies that it engages in any such

practice.

       Because the nature of the severance package is relevant in part to the current

appeal, we briefly summarize it here. Gualberto was terminated four months before she

turned 65, the age at which she would have retired and received retiree pension benefits

from Bessemer. In an affidavit submitted to the EEOC, Gualberto stated that Bessemer



                                             2
has a regular policy of offering severance benefits to employees upon termination. App.

at 45. Gualberto also stated, however, that when an employee facing retirement is

terminated, as she was, the amount of severance benefits is offset by the amount of retiree

pension benefits to which the employee is entitled. This was the severance package

Bessemer offered Gualberto upon her termination. She alleges this practice is

discriminatory because younger employees who are terminated receive full severance

benefits without any offset, and still receive retiree pension benefits when they reach the

age of 65. Bessemer, on the other hand, asserts that the described offset practice is

expressly permitted by the ADEA and therefore no discrimination occurs.

       Upon receipt of Gualberto’s complaint, the EEOC commenced an investigation

into Bessemer’s practices concerning severance benefits. On May 7, 2003 an EEOC

investigator sent Bessemer a Request for Information, seeking information about other

former employees and their severance packages. In response, Bessemer produced

Gualberto’s personnel file but refused to produce any other documents, claiming they

were confidential. Subsequently, the EEOC issued an administrative subpoena on July 7,

2003, ordering production of the requested documents by July 21, 2003.

       Bessemer refused to comply with the administrative subpoena, at which point the

EEOC initiated an action to have the subpoena enforced in the District Court for the

District of New Jersey. The District Judge referred the matter to a Magistrate Judge, who

issued an order enforcing the subpoena on September 12, 2003.1


  1
   The Magistrate Judge also issued two subsequent orders which are not relevant to the
current appeal.

                                             3
       Bessemer appealed the Magistrate Judge’s order to the District Court. After

reviewing the Magistrate Judge’s determination, the District Court affirmed the order

enforcing the subpoena, finding that the EEOC had the authority to subpoena the

documents pursuant to its investigation of unlawful employment practices. Bessemer

now appeals the district court’s affirmance of the Magistrate Judge’s order.

                          II. Jurisdiction and Standard of Review

       We have jurisdiction to review the order of the district court pursuant to 28 U.S.C.

§ 1291. Orders enforcing administrative subpoenas are considered “final” for purposes of

this section because there is no ongoing judicial proceeding that would be delayed by an

appeal. Univ. of Med. & Dentistry v. Corrigan, 347 F.3d 57, 63 (3d Cir. 2003).

       There is disagreement between the parties as to which standard of review we

should employ in our analysis. The EEOC argues that the appropriate standard is abuse

of discretion, which is generally applied to review a district court’s order enforcing an

administrative subpoena.2 N.L.R.B. v. Frazier, 966 F.2d 812, 815 (3d Cir. 1992).

Bessemer argues, however, that we should review the District Court’s order de novo

because the district court improperly reviewed the Magistrate Judge’s order. We find it

unnecessary to resolve this dispute because, even if we accept Bessemer’s proposal and

review the record de novo, we would nevertheless affirm the District Court’s order to

enforce the subpoena.

                                      III. Discussion


  2
   District courts review a magistrate judge’s order de novo. See N.L.R.B., 966 F.2d at
815.

                                              4
       An administrative subpoena should be enforced if the agency can show “that the

investigation will be conducted pursuant to a legitimate purpose, that the inquiry is

relevant, that the information demanded is not already within the agency’s possession,

and that the administrative steps required by the statute have been followed.” Univ. of

Med. & Dentistry, 347 F.3d at 64 (quoting F.D.I.C. v. Wentz, 55 F.3d 905, 908 (3d Cir.

1995)). Furthermore, the request for information may not be overbroad or burdensome.

Id.

       Bessemer does not dispute that the subpoena itself is procedurally valid, that the

information sought by the EEOC is generally relevant to investigating the charge of age

discrimination, or that the EEOC does not already possess the requested information.

Rather, Bessemer argues that the subpoena should be quashed because there is no

legitimate purpose behind the EEOC’s investigation. Specifically, Bessemer asserts that

the practice of offsetting severance pay by the amount of pension benefits is expressly

permitted by the ADEA, and thus the absence of a statutory violation renders the purpose

of the investigation illegitimate. We disagree.

       Bessemer’s contention that its offset practice does not violate the ADEA is

premised on section 623(l)(2)(A)(ii) of the Act, which states “[i]t shall not be a violation .

. . of this section solely because following a contingent event unrelated to age the value of

any additional pension benefits that are made available solely as a result of the contingent

event unrelated to age . . . are deducted from severance pay made available as a result of

the contingent event unrelated to age.” 29 U.S.C. § 623(l)(2)(A)(ii) (2000). Bessemer



                                              5
argues that this section specifically permits severance offset, and thus the EEOC has no

legitimate purpose because it cannot ultimately prevail against Bessemer on the merits.

       To bolster its argument, Bessemer attempts to analogize this case to other

subpoena enforcement proceedings in which subpoenas were not enforced because courts

found that the EEOC ultimately could not prevail in the underlying case as a matter of

law. See E.E.O.C. v. Ocean City Police Department, 820 F.2d 1378 (4th Cir. 1987) (en

banc) (quashing subpoena relating to Title VII charge because the charge was untimely),

vacated on other grounds, 486 U.S. 1019 (1988); E.E.OC. v. Group Health Plan, 212 F.

Supp. 2d 1094 (E.D. Mo. 2002) (quashing subpoena because the charge against the

employer did not involve practices covered by the Americans with Disabilities Act).

       Bessemer urges us to consider McCambridge v. Bethlehem Steel Corp., 873 F.

Supp. 919 (E.D. Pa. 1994), in which the district court ruled on a summary judgment

motion that an employer’s policy of reducing employees’ severance allowances based on

their eligibility for retiree health benefits did not violate the ADEA as a matter of law, in

order to find similarly that the practice at issue in this case does not violate the ADEA.

       First, we observe that retiree health benefits are addressed separately from retiree

pension benefits in 29 U.S.C. § 623(l)(2)(A)(i). Second, we believe it is inappropriate to

extend any analysis from McCambridge at this stage of the proceedings with the limited

record before us. The EEOC responds that § 623(l)(2)(A)(ii) does not broadly permit

severance pay to be offset by pension benefits, but rather, it narrowly permits offsets in

very specific instances. In its brief, the EEOC states that “at this stage we know virtually



                                              6
nothing about Bessemer’s severance practices . . . and therefore we are not able to make

any assessment about the company’s compliance with the ADEA.” Resp. Brief at 15.

For example, the EEOC points out that when it first attempted to solicit information

regarding these practices, Bessemer maintained that it does not even have a formal

severance pay program. Distinguishing the cases cited by Bessemer in support of its

proposition, the EEOC points out that in this case there is no way to determine at this

point that any charge brought by the EEOC would ultimately fail as a matter of law.

       We agree with the EEOC that more information is necessary before a dispositive

legal determination can be made. At this point, it is not clear whether Bessemer is in

compliance with the ADEA. As the Supreme Court stated in Oklahoma Press Publishing

Co. v. Walling, “[t]he very purpose of the [administrative] subpoena and of the order . . .

is to discover and procure evidence, not to prove a pending charge or complaint, but upon

which to make one if . . . the facts thus discovered should justify doing so.” 327 U.S. 186,

201 (1946).

       Traditionally, administrative agencies are granted broad investigatory powers to

enforce the laws within their purview. See U.S. v. Powell, 379 U.S. 48, 57 (1964); U.S. v.

Morton Salt Co., 338 U.S. 632, 642 (1950). Unlike the judiciary, an agency is not bound

by the case or controversy requirement, and “can investigate merely on suspicion that the

law is being violated, or even just because it wants assurance that it is not.” Morton, 338

U.S. at 642-43. The District Court correctly enforced the subpoena to allow the EEOC to




                                             7
investigate whether Bessemer’s severance pay program violates the ADEA. We therefore

affirm the District Court’s enforcement of the subpoena.




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