February 27, 2006

 

Mimi Hull, President 

ASSOCIATION OF U S WEST RETIREES (AUSWR)

AUSWR Board Members and General Members

 

 

This update concern the Phelps v. Qwest Employees Benefit Committee case pending in Denver Federal Court  (the ERISA Disclosure case).  The last update was sent on December 6, 2005.  As you know, AUSWR Executive Director Nelson Phelps formally demanded Qwest make disclosure of the "investment policy guidelines" and "proxy voting guidelines" in order to help him and the retiree association police the goings on with the Qwest Pension Plan.  Mr. Phelps was particularly concerned about a complete loss of a $67 million "put option" investment made with pension fund monies in late 2001.

 

 

On December 2, 2005, Chief Judge Babcock entered a ruling deciding the central dispute between the parties and he ordered Defendant Qwest to turn over the several investment policies/guidelines that are portfolio specific for the pension plan.  However, when Qwest subsequently sent the papers to me, someone redacted certain information including the identity of the investment managers. You can see the redacted documents at this URL at the AUSWR website: http://www.uswestretiree.org/TOC.pdf  Therefore, we filed a motion to compel discovery responses.  Also, since Qwest withheld the requested papers since February 9, 2004 we asked the Denver Federal Court to impose a daily penalty pursuant to federal law ERISA.

 

 

On February 23, 2006, Federal Magistrate Judge Michael Hegarty issued an order granting our motion to compel.  Qwest must give us the requested information no later than March 6, 2006.  Also, Judge Hegarty said he was "troubled by Defendant's conduct in two respects" and he decided to make a recommendation that Chief Judge Babcock order Qwest to pay an ERISA penalty of $25 per day since February 9, 2004.  Chief Judge Babcock is likely to accept that recommendation and order Qwest to pay the penalty, which is more than $18,000 by now.  You can read Judge Hegarty's February 23, 2006 Order and Recommendation at this URL at the AUSWR website: http://www.uswestretiree.org/Docket25-OrderGrantingMotiiontoCompel.pdf

 

The next step is to either reach an agreement with Qwest or pursue another request in court for an order requiring Qwest to pay reasonable attorney's fees and costs, so as to deter obstinate behavior in the future when we make reasonable requests for other disclosures and information about the Qwest Pension Plan. 

 

 

Meanwhile, to learn more, you should visit the "Legal Developments" page at the AUSWR  website http://www.uswestretiree.org/legal2.htm and under the heading "ERISA Disclosure - Phelps v. Qwest" view all of the updates, the Complaint and other legal papers that have been posted.