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Walter Nye, et al v. Ingersoll Rand Company

January 25, 2011

WALTER NYE, ET AL, PLAINTIFFS,
v.
INGERSOLL RAND COMPANY, DEFENDANT.



The opinion of the court was delivered by: Debevoise, Senior District Judge

NOT FOR PUBLICATION

Appearances by:

OPINION

This consolidated case originated as three separate cases: Nye, et. al. v. Ingersoll Rand Company, Civ. No. 08-3481, Brown, et. al. v. Ingersoll Rand Company, Civ. No. 08-4260, and Bond, et. al. v. Ingersoll Rand Company, Civ. No. 08-5371. Plaintiffs are each former employees of the Dresser-Rand company ("Dresser-Rand"), a former subsidiary of Defendant Ingersoll-Rand Company ("Ingersoll Rand"). Plaintiffs allege that Defendant breached the terms of a Sales Incentive Plan ("2000 SIP") when it failed to pay them benefits due upon the sale of Dresser-Rand. Defendant claims that the 2000 SIP expired prior to the sale and that by agreeing to a new incentive plan (the "2004 Plan") Plaintiffs acknowledged that the 2000 SIP had expired and was no longer valid. Plaintiffs contend, in part, that they were fraudulently induced into agreeing to the 2004 Plan.

Presently before the Court is Defendant's appeal from Magistrate Judge Shipp's November 19, 2010 Order modifying two subpoenas issued by the Defendant and clarifying the terms of his prior Orders with respect to two others. Defendant claims that Judge Shipp abused his discretion by refusing to permit them to depose two of Plaintiffs' former counsel to determine the extent to which Plaintiffs sought the advice of counsel before entering into the 2004 Plan. Defendant further contends that Judge Shipp's ruling concerning two subpoenas issued outside this district constituted an impermissible advisory opinion.

For the reasons set forth below, Magistrate Judge Shipp's November 19, 2010 order is AFFIRMED, except that it is REVERSED with respect to the depositions of Scott Steiner and Kevin Kostyn, which will be allowed to take place by telephone and limited to one hour.

I. BACKGROUND

The facts underlying this case stem from efforts by Defendant Ingersoll Rand-Company ("Ingersoll Rand") to sell Dresser-Rand Company ("Dresser-Rand"), a subsidiary corporation. The background of those efforts and procedural history of the ensuing litigation are discussed at length in this court's prior Opinions. See, e.g., Doc. No. 355. The relevant facts are as follows.

In early 2000, Ingersoll Rand began efforts to sell Dresser-Rand, a recently acquired subsidiary. To further that purpose and to achieve a desirable sale price for Dresser-Rand, Ingersoll Rand adopted the Sales Incentive Plan ("2000 SIP"). The 2000 SIP was meant "to reward key employees for their contributions toward maximizing [earnings] and consequently, a desirable sale price for Dresser-Rand Company." It did so by providing Sale Value Units ("SVU"s) to select employees that would trigger payments from Ingersoll Rand once Dresser-Rand was sold.

The 2000 SIP included sections governing its "effective date[s]" and awards grants to employees who were terminated before the closing of the sale. The former provided that "[t]he plan is effective September 1, 2000 and will remain in effect until Dresser-Rand Company is sold," while the termination provision stated:

An employee who voluntarily terminates or is involuntarily terminated by the Company for any reason before the closing date of the sale, with the sole exceptions of death, disability, or retirement shall not receive or be entitled to any award from this plan. For those employees [sic] who leave the Company for the reason of death, disability or retirement will receive a pro-rated award based on the time they were actively employed during the period from the effective date of this plan to December 31, 2002. Any payment due will be made within 90 days from December 31, 2002.

Additionally, the SIP contained a section on how the value of an SVU should be determined, which provided in part that "[a]ny award under this plan will be paid no later than 90 days following the closing date of the sale of Dresser-Rand Company."

When Dresser-Rand was not sold by December 31, 2002, Ingersoll Rand abandoned its efforts for a time and then, in 2004, initiated a new attempt to sell. In connection with its renewed sale efforts, Ingersoll Rand devised a new sale reward plan (the "2004 Plan"). In letters dated July 16, 2004 and August 26, 2004, Ingersoll Rand announced the terms of the new plan, noting that "the sale value units awarded for 2001, 2002 and 2003 have expired, as have all rights under that plan." (Def. Br. Ex. 1).

On October 31, 2004, Ingersoll Rand sold Dresser-Rand. In 2005 it entered into litigation with a number of employees who had left the company prior to the sale date (the "Antoun" and "Barnett" actions) (Ingersoll Rand Company v. Barnett, et.al., and Antoun, et. al. v. Ingersoll-Rand, Consol. Civ. No. 05-1636 (DRD)). The Antoun and Barnett plaintiffs claimed that the 2000 SIP had not terminated and that as retirees, they were entitled to pro-rated benefits under the 2000 SIP. On October 26, 2006, this Court ...


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