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


11-17-1995

Kemmerer v ICI Americas Inc.
Precedential or Non-Precedential:

Docket 95-1071




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            UNITED STATES COURT OF APPEALS
                FOR THE THIRD CIRCUIT
                   _________________

               Nos. 95-1071 and 95-1098
                  _________________

          JOHN L. KEMMERER; JAMES H. JORDAN,

                                  Appellants in No. 95-1071
                          v.

                   ICI AMERICAS INC.



          JOHN L. KEMMERER; JAMES H. JORDAN

                          v.

                  ICI AMERICAS INC.,

                                   Appellant in No. 95-1098
                   _________________

   On Appeal from the United States District Court
      for the Eastern District of Pennsylvania
                 (D.C. No. 92-5986)
                   _______________

               Argued October 11, 1995

BEFORE:   GREENBERG, LEWIS, and ROSENN, Circuit Judges

              (Filed: November 17, 1995)
                    ______________

                           Theodore R. Mann (argued)
                           Carol J. Sulcoski
                           Sharon C. Weinman
                           Mann, Ungar & Spector, P.A.
                           1709 Spruce Street
                           Philadelphia, PA 19103

                                  Attorneys for
                                  John L. Kemmerer
                                  and John H. Jordan


                           Michael L. Banks (argued)


                          1
                                  Morgan, Lewis & Bockius
                                  2000 One Logan Square
                                  Philadelphia, PA 19103
                                          Attorneys for
                                          ICI Americas Inc.


                     _______________________

                       OPINION OF THE COURT
                     _______________________


GREENBERG, Circuit Judge.


          In this case, arising under the Employee Retirement

Income Security Act (ERISA), the district court held that the

defendant company breached the terms of the executive deferred

compensation plan that it offered to its highly compensated

employees.   Yet it also held that the appellants -- participants

in that plan -- failed to prove they suffered any damages as a

result of the breach.   We hold that the district court correctly

decided both issues and therefore we will affirm its judgments.


                         I.   Introduction

          Appellants John L. Kemmerer and James H. Jordan were

high level executives of the defendant, ICI Americas Inc.0     ICI

offered its employees the opportunity to participate in a number

of benefit plans.   The dispute on appeal centers around its

executive deferred compensation plan (the DEC plan), which like

0
ICI Americas Inc. explains in its brief that it has changed its
name to Zeneca Inc. and that the company now known as ICI
Americas Inc. is an entirely different corporation which came
into existence as a result of a reorganization of the business
that began in late 1992. Nevertheless, as a matter of
convenience, we refer to the defendant as ICI.

                                 2
all such plans is commonly referred to as a "top hat" plan.

Specifically, ICI encouraged its high level executives to

participate in the DEC plan, under which participants deferred

receipt of a percentage of their income, and thus initially

reduced their annual taxable income.   Although the DEC plan was

unfunded, its participants were allowed to track or shadow

investment portfolios available to participants of an ICI

deferred contribution plan.    ICI would credit the participants'

balances in the DEC plan as though the hypothetical investments

actually had been made.   Appellants participated in the DEC plan.

          An executive's account balance in the DEC plan became

payable after the executive left ICI's employ.   The DEC plan

permitted participants to elect the method of payment by which

distributions would be made.   In this regard, the plan was

amended on February 1, 1985, to state:
          Amounts deferred under this agreement shall
          be paid to Optionee commencing January 15 of
          the year following the year of his separation
          from service in five percentage installments
          . . . unless, prior to separation from
          service the Optionee files a written notice
          with the Secretary of Company, ('Secretary')
          requesting a different form of distribution.
          Such notice shall be treated as an election
          by the Optionee to receive payment by the
          method requested. The method of distribution
          requested shall be irrevocable after the
          close of business on the date of Optionee's
          separation from service.


Kemmerer v. ICI Americas, Inc., 

, 139-40 (E.D.
Pa. 1994).0   Pursuant to this provision, "Jordan elected to have

0
We simplify our discussion of ICI's plans to encompass only what
is relevant on appeal. The district court's opinion discusses


                                 3
his DEC benefits paid in specific annual amounts until the year

2007.   Kemmerer elected to have his plan balance distributed in

fixed annual amounts until such time as his account balance would

be exhausted."   

  After Kemmerer and Jordan retired

(in 1986 and 1989 respectively), ICI began distributing their

benefits in accordance with their respective elections.    In 1991,

however, ICI unilaterally decided to terminate the DEC plan.    At

that point, rather than complying with its retired executives'

elections, ICI decided to distribute their accumulated account

balances in three annual installments, with 10% interest on the

unpaid balances, to be paid in January 1992, January 1993, and

January 1994.    ICI advised appellants of this change by letters

dated November 29, 1991.

            On October 16, 1992, after ICI made one payment on the

new distribution schedule, appellants filed this action in the

district court contending that, by terminating the DEC plan after

their rights in it had vested, ICI breached its contractual

obligations and thereby violated ERISA.    They requested monetary

damages for the benefits lost as a consequence of ICI's breach of

the plan.   In this litigation, they contend that the early

termination of the plan had adverse tax consequences to them and

required them to incur fees for financial management they

otherwise would not have incurred.   They do not contend, however,

that ICI did not pay them the full amount of their account

balances.   Consequently, they are in the position, unusual if not

the various plans in greater detail.    See 

.


                                 4
unprecedented for plaintiffs, of suing for damages because they

were paid money owed to them.    Eventually appellants and ICI

filed cross-motions for summary judgment on liability, and ICI

filed a motion for summary judgment on damages.    In an opinion

filed on January 4, 1994, reported at 

, the

district court granted appellants' motion for summary judgment on

liability, and denied ICI's motions on both liability and

damages.    The court entered an order on January 5, 1994, in

accordance with its opinion.

            The district court held a nonjury damages trial in

October 1994.    In an unreported memorandum opinion filed on

December 22, 1994, the court rejected appellants' argument that

ICI had the burden of proof and held that appellants had failed

to prove that they suffered damages as a result of ICI's conduct.

Accordingly, it entered a judgment in favor of ICI on December

23, 1994.    On January 19, 1995, the parties stipulated, and the

court ordered, that all claims except those for attorneys' fees

and costs had been resolved.    The court stayed proceedings as to

those items pending the completion of this appeal.    Both parties

then filed appeals, appellants from the order of December 23,

1994, and ICI from the order of January 5, 1994.

            Arguably, we should dismiss ICI's appeal, as ICI could

challenge the district court's finding of liability in this court

as an alternative ground for us to affirm.    See Armotek Indus.,

Inc. v. Employers Ins. of Wausau, 

, 759 n.3 (3d Cir.

1991).   But we will not do so because appellants have filed a fee

petition which, as we have indicated, the district court has


                                 5
stayed pending disposition of this appeal.    Thus, even though we

affirm on the damages issue, ICI may be aggrieved by the judgment

on liability, because the district court may conclude that, on

the basis of that judgment alone, it can award the appellants

counsel fees.0   Of course, we express no opinion on this point.

However, in view of ICI's success at trial on the damages issue,

its appeal from the denial of its motion for summary judgment on

damages is moot and we will not consider it.   See McDaniels v.

Flick, 

, 448 n.1 (3d Cir. 1995).    We have jurisdiction

over appellants' appeal pursuant to 28 U.S.C. § 1291.     The

district court exercised diversity of citizenship and federal

question jurisdiction under 28 U.S.C. § 1332(a) and 29 U.S.C.

§1132(e).


                           II.   Discussion

                           A.    Liability

            We first consider whether the district court erred in

concluding that ICI breached the terms of the DEC plan.    We

exercise plenary review on this issue as the district court

granted the appellants' motion for summary judgment.    See
0
In theory, we could conclude that until such time as the
district court enters an award of fees against ICI, if it does
so, ICI has not been aggrieved by the liability judgment and that
we therefore should dismiss its appeal. However, we will not
take that approach, as the liability issue has been briefed fully
and, in any event, we can consider ICI's challenge on that issue
as an alternative basis to affirm. Furthermore, we think that
resolution of the liability issue at this time may aid in
concluding this case. Of course, there is no doubt but that we
have the power to consider the issue. See United States v. Tabor
Court Realty Corp., 

, 342-44 (3d Cir. 1991), cert.
denied, 

, 

(1992).


                                  6
Petruzzi's IGA Supermarket, Inc. v. Darling-Delaware Co., 

, 1230 (3d Cir.), cert. denied, 

(1993).

            With the passage of ERISA, Congress set out to "assure

the equitable character of employee benefit plans and their

financial soundness."    Moench v. Robertson, 62 F.2d, 553, 560 (3d

Cir. 1995) (citing Central States, Southeast and Southwest Areas

Pension Fund v. Central Transp., Inc., 

, 570, 

, 2840 (1985)) (internal quotations and alterations

omitted).   ERISA broadly defines the terms "employee pension

benefit plan" and "pension plan" to include any plan established

or maintained by an employer that, by its express terms:
          results in a deferral of income by employees
          for periods extending to the termination of
          covered employment or beyond, regardless of
          the method of calculating the contributions
          made to the plan, the method of calculating
          the benefits under the plan or the method of
          distributing benefits from the plan.


29 U.S.C. § 1002(2)(A)(ii).   Thus, top hat plans clearly are

subject to ERISA.   Nonetheless, not every type of pension plan is

subject to all of ERISA's stringent requirements.    Congress

imposed strict regulations over plans whose participants and

beneficiaries it most desired to protect -- employer-funded plans

designed to secure employees' financial security upon retirement.

ERISA imposes upon the trustees and sponsors of such plans strict

fiduciary duties and standards of care and further provides for

detailed disclosure and vesting requirements.    Top hat plans,

however, which benefit only highly compensated executives, and

largely exist as devices to defer taxes, do not require such



                                 7
scrutiny and are exempted from much of ERISA's regulatory scheme.

See Barrowclough v. Kidder, Peabody & Co., 

, 930 n.7

(3d Cir. 1985).0    In particular, top hat plans are not subject to

certain vesting, participation, and fiduciary requirements.        

   But despite the exemption of top hat plans from many

of ERISA's regulations, ERISA's enforcement provision clearly

permits participants in top hat plans, as well as other covered

plans, to bring civil actions "to enforce the substantive

provisions of the Act or to recover benefits due or otherwise

enforce the terms of the plan."       

see 29 U.S.C.

§1132(1)(B) ("A civil action may be brought by a participant or

beneficiary to recover benefits due to him under the terms of his

plan, to enforce his rights under the terms of the plan, or to

clarify his rights to future benefits under the terms of the

plan.").

             Contrary to ICI's intimations, then, Congress' decision

to exempt top hat plans from certain fiduciary standards does not

mean that courts may not review their trustees' and sponsors'

actions.     Rather, the exemption means only that they are not held

to the strict fiduciary standards of loyalty and care otherwise
applicable to ERISA fiduciaries.

             In holding that ICI breached the terms of the plan, the

district court appropriately applied contract principles.         As we


0
We overruled Barrowclough insofar as it held that arbitration of
statutory ERISA claims is precluded in Pritzker v. Merrill Lynch,
Pierce, Fenner & Smith, Inc., 

(3d Cir. 1993), but
Barrowclough remains good law on the points for which we cite it
here.


                                  8
pointed out in Barrowclough, "this court has repeatedly

considered claims for benefits by participants . . . that are

based on the terms of or rights under a plan" even though such

claims are based not on fiduciary duties but on "breach[es] of

contract of an employee benefit plan."     

  Thus, in

such instances, breach of contract principles, applied as a

matter of federal common law, govern disputes arising out of the

plan documents.     In determining how to apply these principles,

the district court followed the analysis in Carr v. First

Nationwide Bank, 

(N.D. Cal. 1993), which held

that top hat plans should be interpreted in keeping with the

principles that govern unilateral contracts.

          Applying those principles to ICI's DEC plan, the

district court noted that the plan provides that "amounts

deferred . . . shall be paid . . . in five percentage

installments unless . . . the Optionee files a written notice

with the Secretary of Company . . . , requesting a different form

of distribution."     

.   Therefore, the

court reasoned, when appellants complied with all the

prerequisites to vesting they accepted the ICI's offer.      The plan

terms then required ICI to fulfill its end of the bargain by

making payments consistent with appellants' respective elections.

          We agree.     "A pension plan is a unilateral contract

which creates a vested right in those employees who accept the

offer it contains by continuing in employment for the requisite

number of years."     Pratt v. Petroleum Prod. Management Employee
Sav. Plan, 

, 661 (10th Cir. 1990) (internal quotation


                                  9
marks omitted); 

("[P]ension benefit

plans are unilateral contracts which employees accept by

appropriate performance.").   Thus, the plan constitutes an offer

that the employee, by participating in the plan, electing a

distributive scheme, and serving the employer for the requisite

number of years, accepts by performance.     Under unilateral

contract principles, once the employee performs, the offer

becomes irrevocable, the contract is completed, and the employer

is required to comply with its side of the bargain.     Accordingly,

when a participant leaves the employ of the company, the trustee

is "required to determine benefits in accordance with the plan

then in effect."   

.    As a corollary,

"[s]ubsequent unilateral adoption of an amendment which is then

used to defeat or diminish the [employee's] fully vested rights

under the governing plan document is . . . ineffective."        

district court correctly concluded that after the

appellants' rights had vested when they completed performance,

ICI could not terminate the plan in the absence of a specific

provision in the plan authorizing it to do so.

          ICI seeks to avoid this result by arguing that the plan

terms do not impede its ability to terminate the plan.

Specifically, ICI objects to what it perceives to be the district

court's overbroad holding -- that in order to retain the power to

terminate a top hat plan a company explicitly must reserve the

right to do so in the plan documents.   In the first place, ICI's

argument is simply wrong after Barrowclough because it has no
basis in contract law.   In addition, we find ICI's argument more


                                10
than minimally unfair.    As the Carr court recognized, even when a

plan reserves to the sponsor an explicit right to terminate the

plan, acceptance by performance closes that door under unilateral

contract principles (unless an explicit right to terminate or

amend after the participants' performance is reserved).      "Any

other interpretation . . . would make the Plan's several specific

and mandatory provisions ineffective, rendering the promises

embodied therein completely illusory."    

.   Thus, there is no presumption that an employer may

terminate a top hat plan.    Rather, the plan should be interpreted

under principles of contract law.      Consequently, a court must

determine whether an employer has a right to terminate a plan by

construing the terms of the plan itself.

           ICI also contends that our result is incongruous

because in its view we accord participants in unfunded plans more

protection than participants in funded plans.     Although the cases

applying unilateral contract principles generally involve funded

rather than unfunded plans, we agree with the Carr court that the

cases' "holdings . . . did not rely on ERISA's provisions," 

but rather on principles of contract law.    

.     Indeed, any other result would

eviscerate our holding in Barrowclough that participants in

unfunded deferred compensation plans may sue to enforce the terms

of the plan under contract principles.

           In this regard, ICI's reliance on Hozier v. Midwest
Fasteners, Inc., 

(3d Cir. 1990), is misplaced.        In

that case, we pointed out that "virtually every circuit has


                                  11
rejected the proposition that ERISA's fiduciary duties attach to

an employer's decision whether or not to amend an employee

benefit plan."   

   Of course, that only means that

ERISA's fiduciary duties themselves do not per se "prohibit a

company from eliminating previously offered benefits."      (Phillips

v. Amoco Oil Co., 

, 1471 (11th Cir. 1986), cert.

denied, 

, 

(1987).    As one court has

explained, "when an employer decides to establish, amend, or

terminate a benefits plan, as opposed to managing any assets of

the plan and administering the plan in accordance with its terms,

its actions are not to be judged by fiduciary standards."      Musto

v. American Gen. Corp., 

, 912 (6th Cir. 1988), cert.

denied, 

, 

(1989); see also 

("[T]he rule that [funded] welfare benefit plans

are freely amendable means that the amendment or termination of

such plans is not governed by the fiduciary duty provisions of

ERISA.").

            But these cases do not say anything about the

application of unilateral contract principles to an employer's

actions in terminating a plan.    The fact that fiduciary standards

are inapplicable "does not give employers carte blanche to amend

welfare benefit plans where the plans themselves may be

interpreted to provide that benefits are contractually vested or

accrued."   

.   And, as we discussed

above, those principles clearly apply after performance is

complete and the participant's rights have vested.    Moreover,

nothing in ERISA prohibits the parties from contracting to limit


                                  12
the employer's right to amend or terminate a plan.    Indeed, the

point of our holding in Barrowclough was to ensure that

participants in ERISA plans have an ERISA-based right to sue

under contract principles to enforce the terms of the plan.      As

the district court reasoned, Congress exempted top hat plans from

ERISA's vesting requirements in large part because it recognized

that high level executives retain sufficient bargaining power to

negotiate particular terms and rights under the plan and

therefore do not need ERISA's substantive rights and protections.

Kemmerer v. 

.     This being so, "'it would

be absurd to deny such individuals the ability to enforce the

terms of their plans in contract. . . .     [I]t would be difficult

to imagine what Top Hat participants would have the power to

obtain through negotiation or otherwise -- apparently not much

more than illusory promises.'"    

816 F. Supp.

at 1492).

            In this regard, ICI concedes that a plan provision that

the plan's terms cannot be revoked is controlling.    See br. at 23

("Ordinarily, plan sponsors have unfettered discretion to

terminate pension plans, unless the plan documents provide to the
contrary.").    This is just such a case.   In determining the

actual terms of the plan, "ERISA plans, like contracts, are to be

construed as a whole."    Alexander v. Primerica Holdings, Inc.,

, 93 (3d Cir. 1992).    If the plan document is

unambiguous, it can be construed as a matter of law.

            The February 1, 1985 amendment to the plan, which we

quote above, in no uncertain terms provides that a participant's


                                  13
election of a particular method of payment is binding and

irrevocable, and that it shall be complied with.       To conclude in

the face of such language that ICI had unfettered discretion to

disregard a participant's election would violate the plain

meaning rule of contract interpretation.       See Duquesne Light Co.

v. Westinghouse Elec. Corp., 

, 613-16 (3d Cir. 1995)

(discussing Pennsylvania common law rules of contract

interpretation).   ICI contends that the language is at the very

least ambiguous, and it points to extrinsic evidence tending to

show that "the purpose of the amendment was to avoid the

constructive receipt [tax] problem."       Reply br. at 4.0

Furthermore, ICI contends that it terminated the plan because of

its desire to protect the participants' unfunded balances and

because of its concern that the tax deferral aspects of the plan

might not survive the scrutiny of the Internal Revenue Service.

Yet these circumstances in no way can alter the contractual

principles that lead to our conclusion that the terms of the plan

bound ICI so that, in the absence of appellants' consent, ICI

could not change its method of payment.       The district court,

therefore, correctly held that ICI violated the terms of the

plan.


                            B.   Damages


0
Constructive receipt in this context refers to a situation in
which participants exercise such a degree of control over plan
assets so as to be deemed to have received the deferred income.
In such cases, the income deferred could be considered taxable
immediately.

                                 14
           After granting summary judgment to the appellants on

liability, the district court found that appellants had failed to

prove that ICI's termination of the plan damaged them. Appellants

characterized their claim for damages as falling under 29 U.S.C.

§ 1132(a)(1)(B), which permits plan participants to sue to

recover benefits due them under the plan, and 29 U.S.C.

§1132(a)(3), which permits a participant to bring a civil action

"to obtain . . . appropriate equitable relief . . . to enforce

any provisions of this subchapter or the terms of the plan."

           In addressing the parties' summary judgment motions,

the district court rejected ICI's argument that the damages

appellants sought constituted unrecoverable extracontractual

damages.   Kemmerer v. 

.   ICI contends

that the district court erred in that determination.    The

question ICI raises is difficult, requiring a close examination

of precisely what damages appellants seek.    In Massachusetts Mut.

Life Ins. Co. v. Russell, 

, 144, 

, 3091

(1985), the Court noted that "the statutory provision explicitly

authorizing a beneficiary to bring an action to enforce his

rights under the plan -- § [1132(a)(1)(B)] says nothing about the

recovery of extracontractual damages."    And in Mertens v. Hewitt
Assocs., 

, 2068 (1993), the Court held that the

provision for equitable relief in section 1132(a)(3) does not

allow the recovery of monetary damages.    In In re Unisys Corp.,

, 1267-68 (3d Cir. 1995), we held that an individual

participant may sue on his or her own behalf to recover equitable

relief under section 1132(a)(3), and characterized reimbursements


                                15
of back benefits as "remedies which are restitutionary in nature

and thus equitable."   

(citing Curcio v. John Hancock

Mut. Life Ins. Co., 

, 238-39 (3d Cir. 1994)).

           We are inclined to agree with ICI that appellants'

claims are for extracontractual damages for purposes of section

1132(a)(1)(B) and monetary damages for purposes of section

1132(a)(3) and thus are not cognizable claims under ERISA.    After

all, the possibly adverse tax ramifications of the plan

termination and the financial management fees which appellants

may incur are possible consequences of the breach.   On the other

hand, the plan required ICI to pay money, and by its payment of

their account balances to the appellants, ICI satisfied that

obligation, though it did so prematurely.   Further, it is

difficult for us to see how such damages can be regarded as

claims for equitable relief under section 1132(a)(3).   But be

that as it may, we decline to resolve such intricate issues of

ERISA law because appellants failed at trial to prove they were

damaged at all.0

           In the first instance, we reject appellants' argument

that the district court improperly placed the burden of proof on

them.   They rely on the proposition that when the existence of

damage is clear, damages should not be denied simply because it

is difficult to quantify the amount of loss.   As a corollary,

appellants argue that after they have proved they have been

damaged, the district court cannot rely on burden of proof

0
Appellants concede that they can advance damage claims only
under ERISA.


                                16
principles to reject their damages claims outright.      For this

proposition they rely on Anderson v. Mt. Clemens Pottery Co., 

, 

(1946).     But in that Fair Labor Standards

Act case, the Court assumed that "the employee has proved that he

has performed work and has not been paid in accordance with the

statute."    

66 S.Ct. at 1193.    As the Court noted,

"[t]he damage is therefore certain.      The uncertainty lies only in

the amount of damages arising from the statutory violation by the

employer."    

opposite is true -- the very existence

of damages is in dispute.     ICI presented persuasive evidence that

appellants had not suffered any damages.      When the very issue of

damages is the subject of a good faith dispute, the principle

that "'it would be a perversion of fundamental principles of

justice to deny all relief to the injured person, and thereby

relieve the wrongdoer from making any amend for his acts'" simply

does not apply.     

Parchment Co. v. Paterson

Parchment Co., 

, 563, 

, 250 (1931)).

             Nor are we moved by appellants' contention that the

burden should shift simply because this is an ERISA case.       To be

sure, courts have, in certain ERISA cases, placed the burden of

proof on the trustee of the plan.       But those cases involved

first, the trustee's breach of fiduciary duty, and second, a

definite loss.      For instance, in Martin v. Feilen, 

(8th Cir. 1992), cert. denied, 

(1993), the court

held that "once the ERISA plaintiff has proved a breach of

fiduciary duty and a prima facie case of loss to the plan or ill-

gotten profit to the fiduciary, the burden of persuasion shifts


                                   17
to the fiduciary to prove that the loss was not caused by, or his

profit was not attributable to, the breach of duty."     

Neither of the prerequisites to burden-shifting is present here.

           Turning to the evidence of damages, we are troubled by

the fact that appellants, though claiming they were aggrieved by

the plan termination, failed to request equitable relief

requiring ICI to comply with the plan terms.    Even though ICI

advised them in November 1991 that it was changing the

distribution schedule, they brought this action almost one year

later, and only after ICI made one payment to them, and they

filed a motion for summary judgment only after ICI made two of

the accelerated payments.   Yet section 1132(a)(3) explicitly

authorizes participants to bring civil actions "to enjoin any act

. . . which violates . . . the terms of the plan" and "to obtain

. . . equitable relief . . . to enforce . . . the terms of the

plan."   Surely, if appellants really felt that ICI had injured

them, they could have rejected the accelerated payments and

sought injunctive relief enforcing the terms of the plan.     Given

the circumstances, it seems obvious that appellants sought to

play a no-lose game -- trying to capitalize on the freed-up funds

but claiming damages based on utterly speculative projections as

to the financial consequences had the plan not been terminated.

           Indeed, appellants' projections of damages at the trial

were so speculative as to be unascertainable.   First, they

contended that they suffered tax-related losses because they were

forced immediately to pay taxes on the accelerated payments to

them and thereby forgo the benefits of tax deferral.     Standing


                                18
alone there would be force to this argument because ordinarily

from a taxpayer's viewpoint it is advantageous to defer the

payment of taxes.   Yet the existence of such damages depends in

part on what the tax rate will be at any given time and thus is

speculative.   And, as ICI properly points out, by virtue of the

plan termination the appellants' account balances were taxed at a

much lower rate than would have been the case had payments been

made several years later.    Furthermore the tax consequences of

the accelerated payments were simply part of a larger picture

including investment rates of return which the district court

concluded did not establish that appellants had suffered or would

suffer any financial loss as a result of the acceleration of

payments.

            Second, the appellants contended that they incurred

management fees and transactions costs as a result of the breach.

But ICI presented evidence that appellants "can replicate the

investment options under [the] DEC without incurring material

transaction costs."   Op. at 6.   The district court credited this

testimony and concluded that "I cannot find . . . that it is more

likely true than not that plaintiffs will now incur either

material transactions costs or management fees."    Op. at 6-7. The

district court's finding is certainly supported by the record.

            Most significantly, appellants' expert did not take

into account the risk involved in keeping money in an unfunded

plan.   The district court pointed out that "[a]ny evaluation of

one's interest in an unfunded plan must . . . give some

consideration to the fact that there is a risk to the participant


                                  19
that there will be no funds and the value of his interest in the

plan should be adjusted to reflect that risk."     Op. at 6.   The

failure to take the risk into account not only called all of

appellants' projections into question, but is itself a reason for

denying damages because a conclusion that they were damaged would

rest on insupportable speculation.0    In light of all of these

factors, we cannot say that the district court's conclusion that

appellants failed to prove that they were damaged was clearly

erroneous.     Oberti v. Board of Educ., 

, 1220 (3d

Cir. 1993).0    Thus, we cannot find that they were entitled to

relief in this case.0


                              Conclusion

          For the reasons detailed above, we will affirm the

district court's judgment of December 23, 1994, in favor of ICI

and its order of January 5, 1994, granting appellants summary

judgment on liability, and we will dismiss as moot ICI's appeal

from the order of January 5, 1994, to the extent that the order

denied ICI summary judgment on damages.


0
 Thus, we reject appellants' argument that the district court
failed to make adequate findings.
0
 The conclusion we expressed above that ICI's concern about the
security of the participants' accounts in the DEC plan did not
justify its termination of the plan, does not mean that the
security factor cannot be considered in a damages calculation.
0
 We realize that in some situations a wronged plaintiff may
recover nominal damages without proof of actual injury. See
e.g., Carey v. Piphus, 

, 266, 

, 1054
(1978). We see no reason, however, to apply that principle here
as we do not regard the right which appellants seek to vindicate
as worthy of such special protection.


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