                                                                                                                           Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-29-1995

Hennessy v FDIC
Precedential or Non-Precedential:

Docket 94-1857




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"Hennessy v FDIC" (1995). 1995 Decisions. Paper 178.
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             UNITED STATES COURT OF APPEALS
                 FOR THE THIRD CIRCUIT



                      No. 94-1857


           JOHN T. HENNESSY; MICHAEL B. HIGH;
            WILLIAM A. BRACKEN; LARRY GIBSON;
         MARTHA C. HITCHCOCK; LAURENCE A. LISS;
               KEN MANCINI; GEORGE S. RAPP;
        ROBERTA GRIFFIN TORIAN; FRANK J. SORIERO

                           v.

         FEDERAL DEPOSIT INSURANCE CORPORATION,
          AS RECEIVER FOR MERITOR SAVINGS BANK
              (D.C. Civil No. 93-cv-05589)

                    THOMAS CALLAHAN

                           v.

         FEDERAL DEPOSIT INSURANCE CORPORATION,
          AS RECEIVER FOR MERITOR SAVINGS BANK
              (D.C. Civil No. 94-cv-01949)

        John T. Hennessy, Roberta Griffin Torian,
    Michael B. High, William Bracken, Laurence Liss,
  Marty Hitchcock, George S. Rapp, Kenneth R. Mancini,
Lawrence J. Gibson, Frank J. Soriero and Thomas Callahan,

                                      Appellants



    On Appeal from the United States District Court
       for the Eastern District of Pennsylvania
                 (D.C. No. 93-cv-05589)



                      No. 94-1933


        DAVID A. CAMPBELL, JR.; ROBERT F. HANNA;
    LESLIE VOTH; HELEN T. DEMARCO, individually, and

    ROBERT F. HANNA; HELEN T. DEMARCO, on behalf of
    themselves and all others similarly situated,
            (SEPARATION PLAN CLASS), and

               DAVID A. CAMPBELL, JR.,
    on behalf of himself and all others similarly
        situated, (RETIREE HEALTH CLASS), and

      DAVID A. CAMPBELL, JR.; ROBERT F. HANNA,
       on behalf of themselves and all others
     similarly situated, (LIFE INSURANCE CLASS)

                         v.

        FEDERAL DEPOSIT INSURANCE CORPORATION
        AS RECEIVER FOR MERITOR SAVINGS BANK

      David A. Campbell, Jr., Robert F. Hanna,
         Helen T. DeMarco and Leslie Voth,

                                   Appellants



   On Appeal from the United States District Court
      for the Eastern District of Pennsylvania
                (D.C. No. 93-cv-03969)



                     No. 94-1934


          JOSEPH A. ADOLF, LAURENCE J. ARNOLD,
          CHRISTIAN F. AURIG, GEORGE W. BARBER,
    LINDA C. BARCH, RICHARD F. BATE, OWEN J. BEHEN,
        LAUREN BETHEA, ELIZABETH L. BLANKENHORN,
            ANNE MARIE BOBACK, SUSAN M. BROWN,
JOHN J. BUCZEK, GEORGE S. BUNTING, MARY ANN C. BURCH,
           EDITH BURKEITT, THOMAS P. CALLAHAN,
        DAVID A. CAMPBELL, JR., KARLA J. CARNEY,
      JOHN M. CASAMENTO, JR., WILLIAM J. CATHCART,
LISA CAVALLI, NANCY L. CEFFARATTI, JOSEPH D. CELLUCCI,
 ESTHER CERBO, CAROLE A. CIRCUCCI, ANTHONY R. COOGAN,
   LARRY A. COOK, SAMUEL J. COOK, WALLACE P. COONEY,
         PAUL L. COPPOLA, LORENE C. COQUILLETTE,
 BETTY R. CORLEY, HARRIET S. CORLEY, JOAN T. CORSON,
 DAVID E. COVERDALE, MARY C. CRAIGE, LOIUS T. CULLEN,
   JOHN F. CULP, EDWARD D. CUSTER, MICHAEL CZINCILA,
 JOAN E. DEBES, IRENE V. DELIZZIO, GAIL L. DELVISCIO,
          HAROLD L. DEMPSEY, HAROLD C. DENGEL,
            DEBRA ANNE DENIGHT, BEATRICE L. DESHER,
           JOSEPH H. DEVORE, JR., ANNA S. DIFELICE,
             MARIO DIFELICE, MARY ANN DIGREGORIO,
    LEONID A. DOBRININ, SARAH S. DOODY, JOSEPH M. DUFFY,
    LEONARD T. EBERT, JOHN A. FATULA, CHARLES J. FERRIE,
 GEORGE W. FETTERS, JR., LORE L. FISHER, JOHN P. FOGARTY,
    CYNTHIA M. FORD, DORIS GAGLIARDI, BARBARA A. GIBSON,
            FRANCES J. GILLEN, WILLIAM R. GOETTLE,
            CHARLES W. GRAY, III, EUGENE A. HEIWIG,
            WILLIAM H. HILLIARD, WILLIAM H.H. HSU,
               STANLEY E. HUNT, CHARLES C. JONES,
    THOMAS C. KEISER, KATHLEEN F. KELLY, LYNN M. KELLY,
            ETHEL S. KEOWEN, JOHN ANDREW KINNERMAN,
          PHILIP W. KLINGER, C. ANDREW KREPPS, JR.,
             JOHN DAVID LAMBERT, MICHAEL G. LEWIS,
    PATRICIA LEUTHY, SALVATORE LIZZIO, ALDO S. LOMBARDI,
   ELISABETH W. LORD, KATHLEEN LYNCH, E. DAVID MACNALLY,
       WILLIAM C. MACNEILL, JR., FRANK JOSEPH MARULLO,
            EDWARD M. MASON, JR., THOMAS G. MARVEL,
             RUTH A. MCALLISTER, JOSEPH F. MCCOLE,
         CHRISTINE D. MCCORMICK, PHILIP J. MCCORMICK,
   JANET B. MCCOURT, DAVID C. MELNICOFF, FREDA I. MILLAR,
            ANTHONY M. MINGARINO, JOSEPH J. MOFFA,
             LINDA LEE MONTANA, BARBARA L. MORGAN,
             MARION D. MORGAN, LEONARD V. MORRIS,
   DAVID D. MORRISON, MARY T. MURPHY, ANTHONY J. NOCELLA,
          WILLIAM A. NORRIS, III, MARTHA K. NYLUND,
      MARY E. ORR, JOHN T. OSMIAN, CHARLES E. PADGETT,
              PATRICIA PAWLING, HOWARD F. PEARCE,
        CATHERINE P. PICCONE, PETER P. PRYZBYLKOWSKI,
         DARLENE E. PURUGGANAN, ELIZABETH L. RAFETTO,
     EDWARD W. RAPP, LUBA K. REILLY, LOUISE M. REITANO,
          ANTOINETTE D. RENDINO, MS. JAMIE RINDOCK,
    JEAN DAVIS ROBINSON, RICHARD ROGERS, DIANE S. ROHR,
          HERBERT A. ROTH, ANTHONY J. SANTILLI, JR.,
           KATHLEEN M. SAWCHYNSKY, RUTH C. SCHMIDT,
    MICHAEL F. SCUTTI, MARTIN SELGRATH, JOHN W. SEMPLE,
JOSEPH F. SLANE, ROBERT A. SMALLEY, ELIZABETH K. SONNEBORN,
   FRED B. STAAS, WALTER R. STAPLES, ROBERT C. STEINMAN,
    ARTHUR W. STETTLER, JEAN J. STUBBS, ANTHONY TABASCO,
  ROBERT B. TAYLOR, ANNITA L. TEDESCO, KENNETH C. THOMAS,
           PATRICIA E. THOMPSON, DIANNE T. TINDALL,
    JAMES M. TOOLAN, MORRIS VARANO, STANLEY J. VERBEEK,
         DONNA VOLZ, LESLIE C. VOTH, THERESA M. WEBB,
  CYNTHIA WEST, ROBERT B. WHITELAW, ALTON T. WINNER, JR.,
   ANNE M. WISE, VERDELLA WRIGHT, ANTHONY J. ZONGARO AND
                        LINA G. ZANONI,

                                    Appellants
                                v.

             FEDERAL DEPOSIT INSURANCE CORPORATION,
              AS RECEIVER FOR MERITOR SAVINGS BANK



         On Appeal from the United States District Court
            for the Eastern District of Pennsylvania
                      (D.C. No. 94-cv-01499)



                        Argued May 16, 1995

         Before:   COWEN, LEWIS and GARTH, Circuit Judges

                     (Filed   June 29, l995 )

Alice W. Ballard (argued)
Samuel & Ballard
225 South 15th Street
Suite 1700
Philadelphia, PA 19102

     COUNSEL FOR APPELLANTS
     in No. 94-1857

Harry C. Barbin (argued)
Barbin, Lauffer & O'Connell
608 Huntingdon Pike
Rockledge, PA 19046

     COUNSEL FOR APPELLANTS
     in No. 94-1933

Harry C. Barbin (argued)
William M. O'Connell
Barbin, Lauffer & O'Connell
608 Huntingdon Pike
Rockledge, PA 19046

     COUNSEL FOR APPELLANTS
     in No. 94-1934

Jaclyn C. Taner (argued)
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429
     COUNSEL FOR APPELLEE
     Federal Deposit Insurance Corporation
     as Receiver for Meritor Savings Bank




                              OPINION



COWEN, Circuit Judge:
     Plaintiffs in these related cases, former employees and

managers of Meritor Savings Bank, appeal from three orders of the

district court that granted summary judgment in favor of the

defendant, the Federal Deposit Insurance Corporation ("FDIC"), on

their claims to recover severance pay, medical benefits, and life

insurance benefits pursuant to the terms of their employee

welfare benefit plans.   The issues raised in these appeals are

whether the district court erred in determining that: (1) the

FDIC's takeover and sale of Meritor was not a reorganization for

purposes of the plaintiffs' separation pay plan; (2) the

discharge of Meritor employees did not constitute "job

elimination" or "lack of work" triggering severance payments; (3)

the plaintiffs had no vested right to severance pay; (4) the FDIC

properly exercised its repudiation powers; (5) the plaintiffs did

not incur "actual direct compensatory damages" as provided in 12

U.S.C. § 1821(e)(3); (6) the FDIC properly terminated life and

health insurance benefits pursuant to the termination provisions

in these employee welfare benefit plans; (7) the FDIC was not

liable for a statutory penalty under 29 U.S.C. § 1132(c)(1) as a

result of its failure to respond in a timely manner to
plaintiffs' request for plan documents; and (8) the certification

of three plaintiff classes was inappropriate.    Because we

conclude that the district court did not err in granting summary

judgment to the FDIC on plaintiffs' claims for separation pay,

health insurance benefits, and life insurance benefits, we will

affirm the orders of the district court.   Further, because we

conclude that the district court did not abuse its discretion in

finding that the FDIC is not liable for the statutory penalty

prescribed by 29 U.S.C. § 1132(c), we will affirm the order of

the district court pertaining to this issue.    Finally, because of

our conclusion on the merits, that the district court did not err

in granting summary judgment for the FDIC, we need not reach the

class certification issues.



                  I.   FACTS & PROCEDURAL HISTORY

     On December 11, 1992, the Secretary of Banking of the

Commonwealth of Pennsylvania issued an order declaring Meritor

Savings Bank ("Meritor") insolvent and directing that the bank be

closed.   On the same day, the FDIC was appointed as receiver for

the insolvent bank.    As receiver, the FDIC executed a Purchase

and Assumption Agreement with Mellon Bank ("Mellon") transferring

a portion of Meritor's assets and liabilities to Mellon.      The

FDIC retained the liabilities not assumed by Mellon, along with

the unpurchased Meritor assets, which the FDIC proceeded to

liquidate for the benefit of Meritor's approved creditors.

     The record demonstrates that until the Secretary of Banking

declared the bank insolvent, Meritor maintained a separation pay
plan ("SPP"), a retiree health insurance plan (the Meritor

Medical Plan 65 Special Option or "65 Special"), and a retiree

life insurance plan (the Meritor Group Life Insurance Plan or

"MGLIP").1   Under the SPP, eligible employees were entitled to

severance pay based on their years of service and salary, up to a

maximum benefit of twenty-six weeks.        Benefits were payable for

involuntary termination due to "lack of work, job elimination,

reorganization or reduction-in-force."          Campbell App. at 139a.

No benefits would be paid if separation resulted from sale or

disposition of a portion of Meritor's assets and the employee was

employed by the successor entity.        Id.

     The SPP was "unfunded," meaning all benefits were paid from

the general assets of Meritor.       Id. at 141a.      Meritor retained

sole authority to determine whether a separation entitled an

employee to benefits.       Id.   Moreover, Meritor expressly reserved

the right to modify or discontinue the SPP in whole or in part at

any time.    Id. at 137a.

     Under the 65 Special, Meritor provided group health

insurance coverage for its retirees.           Id. at 406a.   The 65

Special was a self-insured plan that qualified as an employee

welfare benefit plan under the Employee Retirement Income

Security Act of 1974, as amended, 29 U.S.C. §§ 1001-1461


1
 . The parties stipulated to the material facts in these cases.
Statement of Undisputed Facts, Hennessy App. at 187-95; Joint
Statement of Undisputed and Disputed Facts Regarding Motions for
Summary Judgment, Campbell App. at 403a-70a; Joint Statement and
Joint Supplemental Statement of Disputed and Undisputed Facts,
Adolph App. at 367a-437a.
("ERISA").    The MGLIP, also an employee welfare benefit plan

under ERISA, provided retirees with death benefit coverage equal

to the lesser of $50,000 or 25% of the amount of death benefit

coverage for which they were insured immediately prior to

retirement.    Id. at 405a-06a.

     Meritor explicitly reserved the right to terminate the 65

Special and the MGLIP at any time. The health plan provided:
     Meritor intends the plan to be permanent, but since future
     conditions affecting your employer cannot be anticipated or
     foreseen, Meritor reserves the right to amend, modify or
     terminate the plan at any time, which may result in the
     termination or modification of your coverage. Expenses
     incurred prior to the plan termination will be paid as
     provided under the terms of the plan prior to its
     termination.

Id. at 165a (emphasis omitted).    The life insurance

plan provided:

     Meritor reserves the right to terminate the group life
     insurance policy for its employees and retirees at any time,
     if Meritor determines that such termination is in its best
     interests. If Meritor terminates its group life insurance
     policy, employees and retirees who die after the effective
     date of the termination . . . will not have any life
     insurance.


Id. at 152a.

     On the day the Secretary declared Meritor insolvent, a

meeting was held to discuss the status of Meritor's employees.

At that meeting, Jack Goodner, the FDIC's closing manager, made a

brief presentation.    When he finished his remarks, an employee

asked him whether severance benefits would be paid.     Goodner

thought not, but was not sure.    After looking towards two other

FDIC officials for guidance, Goodner responded "no."     At the
close of business on December 11, 1992, the former Meritor

employees became employees of Keytech Resources, Inc., a firm

established to provide staffing for the former Meritor offices

purchased by Mellon.   Mellon paid severance benefits to the

employees who were subsequently laid off based on their years of

service to Meritor, up to a maximum of four weeks salary.

     On the Monday following the events of Friday, December 11,

1992, the former branches of Meritor opened for business as usual

under the name of Mellon-PSFS without interruption of business to

regular customers.   The FDIC subsequently repudiated the SPP

pursuant to its powers under 12 U.S.C. § 1821(e).   The FDIC did

not repudiate either the 65 Special or the MGLIP plans.   Instead,

the FDIC sent letters to the former employees and retirees of

Meritor notifying them that their health and life insurance plans

were terminated effective December 31, 1992 pursuant to the terms

of each plan.2   Those letters advised the employees about the

availability of FDIC-sponsored continuing medical coverage, and

also provided specific instructions for filing claims for

benefits under the FDIC's statutory claims process, alerting the

employees and retirees to a March 19, 1993 bar date for filing

claims against the assets of the receivership.



                     A. The Hennessy Plaintiffs

2
 . Consistent with the above facts, when we use the term
"repudiation," we are referring to the statutory power of a
receiver under 12 U.S.C. § 1821(e) to refuse to recognize a
contract. "Termination," by contrast, refers to the
discontinuing of a plan pursuant to the plan's own terms.
       The Hennessy plaintiffs are former managers of Meritor.

They filed suit in the Eastern District of Pennsylvania alleging

the right to recover severance pay pursuant to the terms of the

SPP.    In support of their claim, they rely on the above-stated

facts and the fact that, prior to the FDIC's takeover of Meritor,

each of them received a letter from Meritor's Chairman, Roger

Hillas, stating:

            Meritor senior management is acutely aware that [it] is
       essential to retain motivated employees such as you in key
       positions.

            As evidence of this awareness, Meritor is extending the
       severance benefit provided to you under the Separation Pay
       Program to a total of 52 weeks pay. This enhanced benefit
       will be payable under the same terms and conditions as
       provided for in the Separation Pay Program if you are
       separated from employment by Meritor anytime on or before
       December 31, 1992.


Letter from Hillas to John Hennessy (October 3, 1990); Hennessy

App. at 68.    The Hennessy plaintiffs argued before the district

court that their severance rights under the SPP were activated

when "they were terminated as part of a reorganization."
Hennessy v. FDIC, 858 F. Supp. 483, 487 (E.D. Pa. 1994).

       The district court rejected the Hennessy plaintiffs'

argument.    The court explained that the FDIC sold Meritor to

Mellon and was in the process of liquidating the rest of

Meritor's assets.    Id.   The court reasoned that because the FDIC

was involved with the termination of Meritor, rather than the

continuation of its business, there was no reorganization.     Id.

       In the alternative, the Hennessy plaintiffs argued before

the district court that given the FDIC's repudiation of the SPP,
the plaintiffs should be able to recover severance pay pursuant

to 12 U.S.C. § 1821(e)(3) which provides for compensation for

actual direct compensatory damages attributable to a repudiation.

Id. at 488-89.    The district court disagreed.    Relying on the

decision of the Court of Appeals for the First Circuit in Howell

v. FDIC, 986 F.2d 569 (1st Cir. 1993), the district court

determined that severance payments are not actual direct

compensatory damages under § 1821(e)(3).      Id. at 489.

Accordingly, the district court granted summary judgment in favor

of the FDIC.     Id. at 485.   This appeal followed.



                      B. The Campbell Plaintiffs

     The Campbell plaintiffs include: (1) David Campbell, Jr., an

employee who retired from Meritor effective December 1, 1987; (2)

Robert Hanna, Helen DeMarco, and Leslie Voth, employees who were

employed by Meritor on December 11, 1992; and (3) potential

plaintiff classes comprised of the above named plaintiffs and

those similarly situated.      The Campbell plaintiffs filed claims

for benefits with the FDIC.      The FDIC, however, rejected these

claims.

     Subsequent to the FDIC's denial of their claims, the

Campbell plaintiffs filed suit in the United States District

Court for the Eastern District of Pennsylvania.        In their

complaint, plaintiffs Hanna and DeMarco sought severance payment

pursuant to the SPP.     Plaintiff Campbell sought a declaration

that he and other similarly situated persons are entitled to

health insurance coverage under the 65 Special.        Campbell also
sought reimbursement with interest for health insurance premiums

paid since December 11, 1992.      In addition to these claims,

plaintiffs Campbell and Hanna sought a declaration that they and

other similarly situated persons are entitled to life insurance

under the MGLIP.      They also sought reimbursement with interest

for life insurance premiums paid since December 11, 1992.

Finally, plaintiffs Campbell, Hanna, Voth and DeMarco sought a

monetary penalty under ERISA for the FDIC's failure to provide in

a timely manner information requested by their counsel.3

     The district court denied Hanna and DeMarco's claims for

severance pay under the SPP for the reasons set forth in its

decision in Hennessy.      Campbell v. FDIC, No. CIV.A.93-3969, 1994

WL 475067, at *4 (E.D. Pa. Aug. 29, 1994).      In addition, the

court found that it did not have jurisdiction to hear the claims

brought by Campbell or Voth because these claims were filed

prematurely.4   Id.    Nevertheless, the court concluded that even

if it had jurisdiction to hear Campbell's claims for health and

life insurance benefits, these claims would fail because the FDIC

terminated both the 65 Special and the MGLIP pursuant to its
3
 . Plaintiffs' counsel sent an ERISA document request to the
FDIC on March 16, 1993. The FDIC did not respond to the ERISA
document request until September 21, 1993, 189 days after the
initial request.
4
 . The court concluded that Campbell's and Voth's claims were
premature because these plaintiffs did not wait the requisite 180
days after filing their claims with the FDIC before filing their
actions in district court. Campbell, 1994 WL 475067, at *4. The
court noted, however, that Campbell and Voth were added as
individual plaintiffs in the Adolph case by the filing of the
First Amended Complaint in that case and thus these plaintiffs
asserted a timely filing in Adolph. Id. at *7 n.7.
contractual rights.   Id.     Finally, the district court granted

summary judgment in favor of the FDIC on the plaintiffs' claims

for a statutory penalty because it concluded that: (1) the

statutory penalty should not apply to the FDIC, an agency of the

federal government; or (2) even if the statutory requirement does

apply to the FDIC, the court would exercise its discretion under

29 U.S.C. § 1132(c) and award no penalty in this case.        Id. at

*7.

      With respect to the potential class claims, the district

court denied plaintiffs' motion to certify a separation pay plan

class, a retiree health class, and a life insurance class.

Campbell v. FDIC, No. 93-3969 (E.D. Pa. June 30, 1994) (order

denying class certification).      The court determined that the

plaintiffs could not satisfy all four of the threshold

requirements of Rule 23(a) of the Federal Rules of Civil

Procedure for certifying a plaintiff class.         Id. at 5, 7, 8.    In

addition, the district court found that class certification under

Rule 23(b)(1) or Rule 23(b)(2) would be inappropriate.        Id. at 9.

This appeal followed.



                      C.    The Adolph Plaintiffs
      The Adolph plaintiffs are a group of 161 former Meritor

employees and retirees.5     In their complaint, also filed in the

United States District Court for the Eastern District of

5
 . On July 22, 1994 the district court entered an order granting
the plaintiffs' unopposed motion to amend the complaint in this
matter to add David Campbell and Leslie Voth as plaintiffs.
Pennsylvania, the employee plaintiffs challenged the repudiation

of the SPP by the FDIC.    The retiree plaintiffs challenged the

termination of their medical benefits under the 65 Special.       In

addition, both the employee and retiree plaintiffs challenged the

termination of the MGLIP.    The FDIC and the Adolph plaintiffs

filed motions for summary judgment on July 26, 1994.    The

district court granted summary judgment for the FDIC for the

reasons detailed in Hennessy and Campbell.     Adolph v. FDIC, No.

94-1499 (E.D. Pa. Aug. 29, 1994) (order granting summary

judgment).   This appeal followed.



                           II. JURISDICTION

     These cases commenced under the Financial Institutions

Reform, Recovery and Relief Act of 1989 ("FIRREA") and ERISA.

The district court's jurisdiction was predicated upon 28 U.S.C. §

1331.   We have jurisdiction over the instant appeals pursuant to

28 U.S.C. § 1291.    We exercise plenary review over a grant of

summary judgment.    Because the material facts in this matter are

not in dispute, we review only for errors of law.    As to the

Campbell plaintiffs' argument that an ERISA penalty should be

assessed pursuant to 29 U.S.C. § 1132(c)(1), our review is for

abuse of discretion.



                          III. SEVERANCE PAY

                    A. Was there a Reorganization?

     The Hennessy plaintiffs' first contention is that Meritor

was "reorganized," triggering a right to severance payments under
the terms of the SPP.   According to these plaintiffs, Mellon Bank

acquired Meritor as a going concern following the FDIC's takeover

of Meritor.   The Hennessy plaintiffs point out that Meritor's

offices opened for business as usual on the next business day

after the takeover under the trademark "Mellon-PSFS."   They

assert that because Meritor continued as a going concern without

interruption of business, they have a right to severance payments

under the terms of the SPP.

     We are unpersuaded by this argument.    The written terms of

the SPP provide that:

     If the Employee is involuntarily terminated for
     organizational reasons associated with lack of work, job
     elimination, reorganization, or reduction in force . . .
     he/she will be eligible to receive bi-weekly separation
     payments and benefit continuation as outlined in Section IV
     of the Plan Document.


Meritor Separation Pay Program (effective November 1, 1989);

Campbell App. at 129a (emphasis added).   The district court

determined that both the facts and the law in this case did not

support the conclusion that the Hennessy plaintiffs were
terminated as part of a reorganization.   Hennessy, 858 F. Supp.

at 487.   It reasoned that the FDIC's takeover and sale of a

bank's assets constituted a termination of the bank's business,

not a continuation of this business.   Id.   We agree with the

determination of the district court.

     A receiver, unlike a conservator, does not have as its

purpose the preservation of an institution as a going concern.

Resolution Trust Corp. v. CedarMinn Bldg. Ltd. Partnership, 956
F.2d 1446, 1454 (8th Cir.), cert. denied,        U.S.   , 113 S.

Ct. 94 (1992).   Receivers have the power to liquidate and wind up

the affairs of an institution.   Id. (citing FDIC v. Grella, 553

F.2d 258, 261 (2d Cir. 1977)).   As the Court of Appeals for the

Eighth Circuit has recognized, this distinction was emphasized in

the Conference Report accompanying FIRREA, which stated:

     The title . . . distinguishes between the powers of a
     conservator and receiver, making clear that a conservator
     operates or disposes of an institution as a going concern
     while a receiver has the power to liquidate and wind up the
     affairs of an institution.


Id. (quoting H.R. Conf. Rep. No. 209, 101st Cong., 1st Sess. 398

(1989)).

     The Secretary of Banking for the Commonwealth of

Pennsylvania closed Meritor Savings Bank.   The FDIC was appointed

receiver and it sold some of Meritor's assets to Mellon.    As part

of this transaction, Mellon agreed to assume some of Meritor's

liabilities.   The FDIC proceeded to liquidate the remaining

assets of Meritor for the benefit of Meritor's creditors.     These
actions are commensurate with the winding up of a failed bank's

affairs and the proper function of a receiver.    To suggest that

these actions constituted a reorganization of Meritor is to turn

a blind eye to the dispositive facts.   We therefore cannot

conclude that the district court erred in its determination that

Meritor did not undergo a reorganization that would trigger

plaintiffs' rights to severance pay.



               B. "Job Elimination" or "Lack of Work"
     Rather than arguing that Meritor was reorganized, the Adolph

and Campbell plaintiffs suggest that under the terms of the SPP,

"job elimination" or "lack of work" triggered the receiver's

obligation to pay severance benefits.    According to these

plaintiffs, the district court failed to adequately consider this

argument when it simply relied on its discussion in Hennessy to

grant summary judgment in favor of the FDIC in the Campbell and

Adolph cases.6   The Adolph and Campbell plaintiffs assert that

because the FDIC, as receiver, stands in the shoes of Meritor, it

must provide separation benefits pursuant to the written terms of

the SPP.

     This argument also misses the mark.   As stated above, the

written terms of the SPP provide:

     IF the Employee is involuntarily terminated for
     organizational reasons associated with lack of work, job
     elimination, reorganization, or reduction in force . . .
     he/she will be eligible to receive bi-weekly separation
     payments and benefit continuation as outlined in Section IV
     of the Plan Document.


Meritor Separation Pay Program (effective November 1, 1989);
Campbell App. 129a (emphasis added).    Job elimination, however,

is defined by the plan to be if "as a result of a reorganization,

changing business needs, or the sale, closure or relocation of an

office, a specific position is determined to be unnecessary to

the company for an indefinite period of time."    Id. at 128a.    The

Secretary of Banking's shutdown of Meritor and the appointment of


6
 . The district court's discussion in Hennessy did not
specifically address this argument.
the FDIC as receiver was not "reorganization, changing business

needs, or the sale, closure or relocation of an office."      It was

the shutdown of the entire bank.     Further, no specific position

was "determined to be unnecessary to the company for an

indefinite period of time."     Rather, Meritor ceased to exist, and

the employment of all employees (not specific positions) was

terminated permanently.     We therefore cannot conclude that "job

elimination" triggered a right to severance pay.

     Similarly, we cannot conclude that a "lack of work," as

defined by the plan, triggered the right to severance benefits.

Lack of work is defined by the plan to be if "as a result of a

decrease in volume of work to be done, a position is temporarily

not needed."     Id. at 128a (emphasis added).   The facts of this

case do not support the view that a position was "temporarily not

needed."     The Secretary of Banking closed the entire bank and

declared Meritor insolvent.     We therefore fail to see how the

Campbell and Adolph plaintiffs have demonstrated a "lack of work"

as the plan defines that phrase.     Accordingly, we are unpersuaded

that the district court erred in failing to find this argument a

sufficient basis upon which to ground a claim for severance

benefits.7


7
 . The Hennessy plaintiffs did not rely on "job elimination" or
"lack of work" as a basis for recovery in their briefs before
this Court. At oral argument, however, counsel for the Hennessy
plaintiffs stated that she believed that "job elimination" or
"lack of work" would be an alternative grounds of recovery for
her clients. Further, she stated that the plan document
containing the definitions of "job elimination" and "lack of
work" received by the Campbell and Adolph plaintiffs was not
received by the Hennessy plaintiffs.
           C. Did plaintiffs' right to severance pay vest?

     Using slightly different approaches, the Hennessy

plaintiffs, and the Campbell and Adolph plaintiffs, next argue

that their rights to severance pay were "fixed and unconditional"

when the receiver was appointed.   Based on certain language in

the Court of Appeals for the First Circuit's opinion in Kennedy

v. Boston-Continental National Bank, 84 F.2d 592 (1st Cir. 1936),

the Hennessy plaintiffs argue that their rights to severance

benefits vested on the day that Meritor closed its doors and went

into receivership.   The Campbell and Adolph plaintiffs, by

contrast, assert that the Meritor employees had fixed,

enforceable contract rights to severance pay throughout the term

of their employment as the result of their total compensation

package.   According to the Campbell and Adolph plaintiffs, the

only contingent aspect of their right to severance pay was the

amount of the benefits to be paid, an amount that was tied to

each employee's salary and years of service.   These plaintiffs

cite Citizens State Bank of Lometa v. FDIC., 946 F.2d 408, 415
(5th Cir. 1991), and that case's analysis of a standby letter of

credit, to support their argument.
(..continued)
     While the Hennessy plaintiffs' argument along these lines
raises certain questions about which plan documents are
applicable to them, we need not decide these questions because of
our determination, see infra part III.D., that the FDIC
repudiated the SPP.
     We find these arguments unconvincing.    The rights and

liabilities of a bank and the bank's debtors and creditors are

fixed as of the date of the declaration of a bank's insolvency.

American Nat'l Bank of Jacksonville v. FDIC, 710 F.2d 1528, 1540

(11th Cir. 1983) (citing First Empire Bank v. FDIC, 572 F.2d

1361, 1367-68 (9th Cir.), cert. denied, 439 U.S. 919, 99 S. Ct.

293 (1978); FDIC v. Grella, 553 F.2d 258, 262 (2d Cir. 1977);

Kennedy, 84 F.2d at 597).    To establish a claim against an

insolvent bank in receivership, the liability of the bank must

have accrued and become unconditionally fixed on or before the

time it is declared insolvent.    Kennedy, 84 F.2d at 597

(citations omitted).   As the Court of Appeals for the First

Circuit has stated:
     The amount of a claim may be later established, but it
     must be the amount due and owing at the time of the
     declaration of insolvency . . . . If nothing is due at
     the time of insolvency, the claim should not be allowed
     . . . .


Id.; see also Dababneh v. FDIC, 971 F.2d 428, 434 (10th Cir.
1992) (courts analyze "provability" of claims and creditors

possess "provable" claims only if claims are "in existence before

insolvency") (quoting FDIC v. Liberty Nat'l Bank, 806 F.2d 961,

965 (10th Cir. 1986)).

     The language that the Hennessy plaintiffs cite in Kennedy is

not to the contrary.     To support their argument, the Hennessy

plaintiffs point to language in Kennedy that states:

     Had the lease contained a covenant that insolvency shall be
     breach of the lease and thereupon, without any further
     action by the lessor, the lease shall terminate and the
     lessor shall be entitled forthwith to damages measured as
     provided in the covenant of the lease for liquidated
     damages, then, on the declaration of insolvency, no doubt a
     claim would arise and be matured by the agreement for
     liquidated damages . . . so that the claim would be provable
     in bankruptcy.


Kennedy, 84 F.2d at 597 (citations omitted).    Aside from the fact

that the Hennessy plaintiffs' position ignores the holding of

Kennedy -- that the claim for failure to rent in that case was

too contingent and uncertain to support liability -- these

plaintiffs have made no showing that insolvency itself triggered

their rights under the SPP.    The terms of the SPP do not provide

that a declaration of insolvency triggers payment of severance

benefits.    Accordingly, their right to severance benefits was

still contingent at the time of the appointment of the receiver.

     The Campbell and Adolph plaintiffs' right to severance pay

was likewise contingent, and their reliance on Citizens State

Bank of Lometa is unavailing.    In Lometa, the Court of Appeals

for the Fifth Circuit held that claims that "originated" from

standby letters of credit issued before the bank became insolvent

passed the "provability test" even though the triggering event

obligating the bank to pay did not occur until after the bank

became insolvent.    Lometa, 946 F.2d at 415.   The court in Lometa,

however, explained that standby letters of credit are not

contingent liabilities; they are loans.    Id. at 414.   Therefore,

such letters are not directly comparable to a severance pay plan

under which no vested benefits accrue until a contingency is

fulfilled.    Accordingly, we remain unconvinced that the
plaintiffs had a vested right to benefits prior to, or at the

time of, the appointment of the receiver.



                          D. Repudiation

     Having determined that there was no event that triggered the

payment of severance benefits, it would ordinarily be unnecessary

to dispose of the other issues raised by the parties regarding

their entitlement to severance pay, i.e., repudiation and whether

the failure to pay severance benefits constituted actual direct

compensatory damages under FIRREA.   However, the parties have

forcefully argued their positions regarding the various

"triggering" provisions, and have at least implied that they are

susceptible to more than one reasonable interpretation.    We would

normally commit the task of construing ambiguous contract terms

to the fact finder after extrinsic evidence has been adduced.    We

do not do so here because even if we were to assume a triggering

event had occurred, we would nonetheless affirm the district

court's grant of summary judgment in favor of the FDIC because

the FDIC repudiated the SPP pursuant to its statutory authority

under 12 U.S.C. § 1821.   See PACC v. Rizzo, 502 F.2d 306, 308 n.1

(3d Cir. 1974), cert. denied, 419 U.S. 1108, 95 S. Ct. 780 (1975)

(we can affirm the district court on any ground).

     The Hennessy, Campbell, and Adolph plaintiffs all allege

that following the FDIC's appointment as receiver, the FDIC did

not properly repudiate the SPP pursuant to the statutory

requirements found at 12 U.S.C. § 1821(e)(1).   According to the

plaintiffs, 12 U.S.C. § 1821(e)(1) requires the FDIC to make
formal findings that the terms of the SPP were "burdensome" and

that repudiation is necessary in order to "promote the orderly

administration of the institution's affairs."   The plaintiffs

argue that the FDIC made no such formal findings in this case and

therefore any repudiation of the SPP was ineffective.   Further,

the Hennessy plaintiffs argue that the FDIC improperly relied on

an undisclosed policy of denying all claims for severance

benefits in repudiating the SPP.8




8
 . In addition to this procedural argument, the Hennessy
plaintiffs suggest that the FDIC's repudiation power is limited
to executory contracts. These plaintiffs cite LaMagna v. FDIC,
828 F. Supp. 1 (D.D.C. 1993) in support of their position.
     In LaMagna, the district court determined that an employment
agreement which provided for severance pay was nonexecutory once
the employee had rendered his services by working for one year.
Id. at 2-3. The court concluded that such nonexecutory contracts
may not be repudiated by the FDIC pursuant to FIRREA. Id.
     We are unpersuaded by the district court's reasoning in
LaMagna. The district court's conclusory holding that § 1821(e)
does not permit the receiver to repudiate a "nonexecutory"
contract lacks support in both the statutory language and the
case law. As many courts have noted, the statute explicitly
provides that a conservator or receiver "may disaffirm any
contract or lease," not just executory contracts. E.g.,
Employees' Retirement System of Alabama v. Resolution Trust
Corp., 840 F. Supp. 972, 984 (S.D.N.Y. 1993) (quoting §
1821(e)(1)(A)) (emphasis in original). This provision is in
sharp contrast to the Bankruptcy Code which specifically refers
only to the trustee's power to reject executory contracts. See
Morton v. Arlington Heights Fed. Sav. & Loan Ass'n, 836 F. Supp.
477, 481-82 (N.D. Ill. 1993); Employees' Retirement System of
Alabama, 840 F. Supp. at 984 (noting marked contrast with the
Bankruptcy Code which gives a trustee in bankruptcy the power to
"assume or reject any executory contract." (quoting 11 U.S.C. §
365(a))). Because Congress provided no such limitation here, we
are unable to conclude that the FDIC's power of repudiation is
limited only to executory contracts.
     The provisions governing a receiver's authority to repudiate

contracts can be found at 12 U.S.C. § 1821(e).   Section 1821(e)

states, in pertinent part:

     (1) Authority to repudiate contracts

          In addition to any other rights a conservator or
     receiver may have, the conservator or receiver for any
     insured depository institution may disaffirm or repudiate
     any contract or lease--

          (A) to which the institution is a party;
          (B) the performance of which the conservator or
          receiver, in the conservator's or receiver's
          discretion, determines to be burdensome; and
          (C) the disaffirmance or repudiation of which the
          conservator or receiver determines, in the
          conservator's or receiver's discretion, will promote
          the orderly administration of the institution's
          affairs.


12 U.S.C. § 1821(e)(1) (Supp. V 1993).   Section 1821(e) does not

set forth a specific procedure for a receiver to follow in

repudiating a contract.   Indeed, section 1821(e) leaves the

decision as to whether repudiation is "burdensome" and "necessary

to promote the orderly administration of the institution" to the

receiver's discretion so long as repudiation is accomplished

within "a reasonable period" following the receiver's

appointment.   12 U.S.C. § 1821(e)(2).

     Courts have refused to read into this statutory language any

requirement for formal findings in support of a decision to

repudiate.   In addressing this precise issue in a case involving

a receiver's obligation to pay rent, the Court of Appeals for the

Second Circuit recently stated:
     First, there is no requirement that the conservator or
     receiver make a formal finding that a lease or contract is
     burdensome. Second, it can hardly be said that it was not
     reasonable for the [receiver] to find that it would be
     burdensome for it to assume a $7 million obligation to pay
     rent on premises for which it no longer had use, at a time
     when the real estate market was declining. Third, whether
     the lease is burdensome is to be decided at the discretion
     of the conservator or receiver. 12 U.S.C. § 1821(e)(1)(B).


1185 Avenue of the Americas Assocs. v. Resolution Trust Corp., 22
F.3d 494, 498 (2d Cir. 1994).   The court went on to uphold the

district court's grant of summary judgment in favor of a receiver

that claimed that it had repudiated a lease.   Id.; see also

Morton, 836 F. Supp. at 485 ("The statute does not require that

the receiver give reasons for repudiating a contract . . . . ");

Jenkins-Petre Partnership One v. Resolution Trust Corp., No.

Civ.A.91-A-637, 1991 WL 160317, at *5 (D. Col. Aug. 13, 1991)

("The FIRREA statute does not provide that the [receiver] explain

its actions or that a court may review the basis for that

decision.").

     We see no reason to depart from this line of cases.    The

claimants have failed to demonstrate that the SPP, which provided
no benefit to the receivership, but which called for millions of

dollars in payments, should not be considered "burdensome."       In

addition, we conclude that there is no basis in the statute or in

the case law for requiring the FDIC, which has discretion in

making the decision concerning whether to repudiate, to produce

written findings.

     Nor do we find merit in the Hennessy plaintiffs' argument

that the FDIC's repudiation is invalid because it was carried out
pursuant to an undisclosed policy.   We fail to comprehend how a

consistent denial of the same type of claim constitutes an abuse

of the FDIC's discretion.   If anything, such a longstanding

policy demonstrates a conscious decision to promote uniform

treatment of similar claims.   Accordingly, we cannot conclude

that the district court erred in determining that the FDIC's

repudiation was not procedurally defective.




              E. Actual Direct Compensatory Damages

     The three sets of plaintiffs next argue that even if the

FDIC did properly repudiate the SPP, they are entitled to

severance benefits as actual direct compensatory damages under 12

U.S.C. § 1821(e)(3).    The plaintiffs assert that severance pay in

the context of at will employment represents additional

compensation for entering into such a relationship and is

therefore a compensable loss if not paid.   The plaintiffs rely on

the decision of the Court of Appeals for the District of Columbia

Circuit in Office and Professional Employees Int'l Union, Local 2

v. FDIC, as Receiver of Nat'l Bank of Washington ("NBW"), 27 F.3d

598 (D.C. Cir. 1994), to support their position.

     While the question is close, we remain unconvinced by the

plaintiffs' argument.   FIRREA provides, in pertinent part, that:

     the liability of the conservator or receiver for the
     disaffirmance or repudiation of any contract pursuant to
     paragraph (1) shall be--
          (i) limited to actual direct compensatory damages; and
          (ii) determined as of--
               (I) the date of the appointment of the conservator
               or receiver; . . . .


12 U.S.C. § 1821(e)(3)(A) (Supp. V 1993).    The statute states,

however, that the term "actual direct compensatory damages" does

not include:

     (i) punitive or exemplary damages;
     (ii) damages for lost profits or opportunity; or
     (iii) damages for pain and suffering.


12 U.S.C. § 1821(e)(3)(B) (Supp. V 1993) (emphasis added).      The

courts are split over the proper interpretation of these

provisions.    The Court of Appeals for the First Circuit has

determined that the phrase "actual direct compensatory damages,"

does not include severance payments stipulated in advance.

Howell v. FDIC, 986 F.2d 569, 573 (1st Cir. 1993).    According to

that court, such payments are "at best an estimate of likely harm

made at a time when only prediction is possible" and are

analogous to "liquidated damages."   Id.    That court reasoned that

because those employees entitled to severance pay "may, or may

not, have suffered injury," depending on the employment options

they had in the past and the options available now, and because

"[c]onceivably," such employees could have suffered "no damage at

all," severance payments of this type do not fit within the

language of the statute.   Id.; see also Resolution Trust Corp. v.

Management, Inc., 25 F.3d 627, 632 (8th Cir. 1994) ("Neither

severance fees nor future lost profits are compensable under

FIRREA."); Westport Bank & Trust Co. v. Geraghty, 865 F. Supp.

83, 86 (D. Conn. 1994) ("Courts have found that damages resulting
from the repudiation of a severance package are not `actual

direct compensatory damages' within the meaning of § 1821 because

they are analogous to liquidated damages."); Aguilar v. FDIC, No.

92-4286 (RR), slip op. at 15-16 (E.D.N.Y. Oct. 4, 1993) (noting

that courts have been unwilling to permit plaintiffs to recover

amounts more akin to liquidated than compensatory damages);

Lanigan v. Resolution Trust Corp., No. 91-7216, slip op. at 5-7

(N.D. Ill. March 30, 1993) (relying on the reasoning in Howell).

     As the plaintiffs point out, however, the Court of Appeals

for the District of Columbia Circuit has taken a different view.

In NBW, a case involving a collective bargaining agreement

between the National Bank of Washington and its employees, the

court of appeals determined that in the context of an at will

employment relationship, severance payments are "properly

characterized as consideration for entering into (or continuing

under) the employment contract and therefore are compensable as

actual damages under FIRREA."   NBW, 27 F.3d at 604.    Rejecting

the "liquidated damages" analogy used by the Court of Appeals for

the First Circuit, the court determined that the FDIC was liable

for severance payments.   Id. at 604-05.
     In addition to being confronted with division amongst the

courts, we must contend with competing policy considerations.       On

the one hand, we have the concern raised in Howell that in

drafting FIRREA, "Congress, faced with mountainous bank

failures," was "determined to pare back damage claims founded on

repudiated contracts."    Howell, 986 F.2d at 572.   On the other

hand, we must address the point raised in NBW that the question
is not whether Congress meant to scale back damage claims, but

"which damage claims, however few, are preserved."     NBW, 27 F.3d

at 604.     Moreover, we are cognizant of the fact that disallowance

of promised severance pay may chill a troubled bank's ability to

effectively retain able employees.     See Howell, 986 F.2d at 573.

        We share the view of the Court of Appeals for the First

Circuit that these payments are analogous to "liquidated

damages."     We therefore agree with the position of the district

court in this case that these damages are not compensable as

"actual direct compensatory damages" under 12 U.S.C. § 1821.9

Accordingly, we will affirm the order of the district court

granting summary judgment to the FDIC on the issue of separation

pay.



         IV. TERMINATION OF HEALTH AND LIFE INSURANCE BENEFITS

        The Campbell and Adolph plaintiffs next allege that the

district court erred in granting summary judgment against them on

their claims for health and life insurance benefits pursuant to

the 65 Special and the MGLIP.10    According to these plaintiffs,
9
 . In reaching this decision, we are not unmindful of the
Hennessy plaintiffs' argument that under the terms of this
severance pay plan, benefits are actually accelerated if the
discharged employee finds other employment. Hennessy App. at 106
("If you are otherwise qualified for separation payments and then
become employed during the benefit payment period . . . [y]ou
will then receive a single-sum cash payment equal to the
remaining separation pay to which you would have been entitled
had you remained unemployed."). Nevertheless, we believe that
the function of these provisions is to articulate the timing of
the payment of benefits rather than to relate the purpose behind
the SPP.
10
    .   The Hennessy plaintiffs take no part in this argument.
the district court erred in determining that the provisions of §

402(b)(3) of ERISA, 29 U.S.C. § 1102(b)(3), requiring that every

employee benefit plan provide a "procedure for amending such

plan," apply only to plan amendments and not to plan

terminations.    These plaintiffs argue that because the FDIC did

not follow the proper "procedure" in terminating their life and

health insurance benefits, the FDIC should be responsible for

these benefits until such time as the FDIC complies with ERISA.

They suggest that a remand is appropriate to decide this

question.

     Relying on our previous decision in Schoonejongen v.

Curtiss-Wright Corp., 18 F.3d 1034 (3d Cir. 1994), the district

court held that when a party seeks to terminate an ERISA plan,

there is no requirement that the ERISA plan have a termination

procedure.   Campbell, 1994 WL 475067, at *5.   Subsequent to the

district court's opinion in this matter, however, the Supreme

Court reversed our panel's decision in Schoonejongen.    Curtiss-

Wright Corp v. Schoonejongen,       U.S.   , 115 S. Ct. 1223

(1995).    Following that reversal, we decided the case of Ackerman
v. Warnaco, Inc., No. 94-3527, 1995 WL 289682 (3d Cir. May 15,

1995).    In that case, we explicitly held that § 402(b)(3) of

ERISA applies to plan terminations as well as plan amendments.

Ackerman, 1995 WL 289682, at *3.    Accordingly, we conclude that

the district court erred in holding to the contrary.

     Nevertheless, we cannot agree that a remand is appropriate

or that the district court erred in granting summary judgment for

the FDIC.    Section 402(b)(3) of ERISA requires that every
employee benefit plan shall "provide a procedure for amending

such plan, and for identifying the persons who have authority to

amend the plan."    29 U.S.C. § 1102(b)(3) (1988).   The summary

plan booklet for the 65 Special states that:

     Meritor intends the plan to be permanent, but since future
     conditions affecting your employment cannot be anticipated
     or foreseen, Meritor reserves the right to amend, modify or
     terminate the plan at any time, which may result in the
     termination or modification of your coverage.


Campbell App. at 165a.    Similarly, the summary plan booklet for

the MGLIP states:

     Meritor reserves the right to terminate the group life
     insurance policy for its employees and retirees at any time,
     if Meritor determines that such termination is in its best
     interests. If Meritor terminates its group life insurance
     policy, employees and retirees who die after the effective
     date of the termination (other than those who are totally
     disabled and insured under the provision of "Continuation of
     Life Insurance During Disability") will not have any life
     insurance.


Campbell App. at 152a.    While section 402(b)(3) of ERISA requires

that every employee benefit plan have a procedure for amending or

terminating the plan, the Supreme Court has determined that

language such as that stated above reserving the right of "the

Company" to modify or amend a plan satisfies the requirements of

section 402(b)(3).    Curtiss-Wright,     U.S. at    , 115 S. Ct.

at 1228-29 ("Curtiss-Wright is correct, we think, that this

states an amendment procedure and one that, like the

identification procedure, is more substantial than might first

appear.").   The Court explained that "the literal terms of §

402(b)(3) are ultimately indifferent to the level of detail in an
amendment procedure, or in an identification procedure for that

matter."    Id. at     , 115 S. Ct. at 1229.   Further, the Court

explained that "principles of corporate law provide a ready-made

set of rules for determining, in whatever context, who has

authority to make decisions on behalf of the company."     Id.

Because the 65 Special and the MGLIP reserve to Meritor (the

Company) the right to terminate these plans, we find no violation

of the terms of section 402(b)(3).

     The question therefore becomes what "procedure" the FDIC

must follow when it is appointed receiver for Meritor and it

terminates an employee welfare benefit plan pursuant to such a

reservation clause.    Certainly, under such circumstances, it

would make little sense to require the FDIC to follow Meritor's

procedure for terminating these plans (i.e., calling a meeting of

the Board of Directors of Meritor or taking other corporate

action).     While the appropriate analog within the FDIC to

Meritor's Board of Directors is not immediately apparent, it is

clear that an official receiver has great discretion in taking

action that would previously have been handled through the normal

methods of corporate governance.     Thus, the receiver alone may

act in ways that might otherwise require Board action.     The

record reflects, and the plaintiffs concede, that on December 11,

1992, "the FDIC" sent the Campbell and Adolph plaintiffs mailings

notifying them of the termination of the 65 Special and the

MGLIP.     Joint Statement of Undisputed And Disputed Facts

Regarding Motions for Summary Judgment, Campbell App. at 416a-

17a; Joint Statement of Undisputed and Disputed Facts Regarding
Motions for Summary Judgment, Adolph App. at 368a (incorporating

statement of undisputed facts in Campbell case by reference).

Since the plaintiffs acknowledged that they received notice of

the plan terminations from "the FDIC," we decline to require

further investigation into the methods by which the FDIC makes

its decisions.   Accordingly, we will uphold the district court's

grant of summary judgment for the FDIC on plaintiffs' claims for

health and life insurance benefits.



        V. STATUTORY PENALTY UNDER 29 U.S.C. § 1132(c)(1)

     The Campbell plaintiffs next allege that the district court

erred in determining that the FDIC was not liable for the penalty

found at 29 U.S.C. § 1132(c)(1) for failure to respond in a

timely manner to a request for plan documents.   According to

these plaintiffs, their counsel sent an ERISA document request to

the FDIC as administrator of the Meritor Pension Plan and the

Meritor Savings Bank Savings Plan on March 16, 1993.   The FDIC

did not respond until September 21, 1993, 189 days after the

initial request.   Because ERISA provides that the plan

administrator must mail requested material within 30 days of such

a request, the Campbell plaintiffs assert that they are entitled

to the requisite statutory penalty of up to $100.00 a day for

each day the plan administrator failed to comply.

     We cannot agree.   ERISA provides that an administrator who

fails or refuses to mail requested documents within 30 days after

such request:
     may in the court's discretion be personally liable to such
     participant or beneficiary in the amount of up to $100 a day
     from the date of such failure or refusal, and the court may
     in its discretion order such other relief as it deems
     proper.


29 U.S.C. § 1132(c)(1)(B) (Supp. V 1993) (emphasis added).        The

district court in this case made two alternative findings.

First, it determined that while by its terms ERISA's requirements

and penalties apply to all administrators, "the requirement

should not apply to the FDIC since it is an agency of the federal

government."   Campbell, 1994 WL 475067, at *7.    Second, it

determined that even if the statutory penalty for failure to

provide requested information in a timely manner is applicable to

the FDIC, "the court shall exercise its discretion under 29

U.S.C. § 1132(c)(1) and award no penalty in this case."     Id.     The

court explained that any penalty applied "would be an

unjustifiable windfall to the plaintiffs and would hinder the

FDIC in achieving its public mission -- the orderly wrapping up

of Meritor's affairs."   Id.

     As the district court noted, the issue of whether the

penalty provision of § 1132(c)(1) applies to the FDIC when it

acts as receiver for a failed financial institution is one of

first impression.   Id. at *6.    We agree that nothing on the face

of § 1132(c) exempts the FDIC from the requirement of furnishing

requested documents in a timely manner.     We therefore see no

reason to adopt a rule categorically excluding the FDIC from this

important ERISA obligation.      The reasoning of the district court,

that the requirement should not apply to the FDIC since it is an
agency of the federal government, is unconvincing.   Employees'

need for access to significant information about plan coverage

does not diminish because the entity currently in charge of the

plan is an agency of the federal government.11

     Concerning the district court's alternative holding,

however, we have previously determined that whether a district

court awards a plaintiff monetary damages under 29 U.S.C. §

1132(c)(1) is a matter of discretion.    Gillis v. Hoechst Celanese

Corp., 4 F.3d 1137, 1148 (3d Cir. 1993), cert. denied,        U.S.

, 114 S. Ct. 1369 (1994).    Since the district court did determine

that any penalty in this case would be an "unjustifiable

windfall" and "would hinder" the FDIC in "the orderly wrapping up

of Meritor's affairs," we cannot conclude that the district court

abused its discretion in declining to award a statutory penalty.

Accordingly, we will affirm the order of the district court

denying the Campbell plaintiffs a § 1132(c)(1) penalty award.



                    VI.     CLASS ACTION ISSUES

     The Campbell plaintiffs also raise a number of issues

concerning the district court's decision to deny certification of

three plaintiff classes.    The district court determined that the

plaintiffs failed to establish the threshold requirements under

11
 . The FDIC suggests that 12 U.S.C. § 1825(b)(3), a FIRREA
provision, creates an exemption from the ERISA penalty
requirement. That provision states that the FDIC, when acting as
receiver, "shall not be liable for any amounts in the nature of
penalties or fines." 12 U.S.C. § 1825(b)(3). Read as a whole,
however, § 1825 appears to concern exemptions from taxes. We
therefore find this argument unconvincing.
Rule 23(a) of the Federal Rules of Civil Procedure.    Campbell,

No. 93-3969, at 5, 7, 9 (E.D. Pa. June 30, 1994) (order denying

class certification).   In addition, the district court found that

class certification under Rule 23(b)(1) or Rule 23(b)(2) would be

inappropriate.   Id. at 9.   Because of our decision on the merits

of the Campbell plaintiffs' claims, that these claims cannot

survive summary judgment, we need not address the propriety of

the district court's decision to deny class certification.    We

therefore take no position with respect to these issues.



                          VII. CONCLUSION

     The district court did not err in granting summary judgment

to the FDIC on the plaintiffs' claims for separation pay, health

insurance benefits, and life insurance benefits.   We will

therefore affirm the orders of the district court.    Further,

because the district court did not abuse its discretion in

declining to find the FDIC liable for the statutory penalty

prescribed by 29 U.S.C. § 1132(c)(1), we will affirm the order of

the district court pertaining to this issue.   Finally, because of

our conclusion on the merits of the Campbell plaintiffs' claims,

that the district court did not err in granting summary judgment

for the FDIC, we do not reach the class certification issues.

     Each party to bear its own costs.
