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Puerto Rico Telephone Company, et al v. Sistema De Retiro De Los Empleados

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Before Torruella, Leval *fn1 and Thompson, Circuit Judges.

This is an appeal by putative intervenors – twenty current and former employees of The Puerto Rico Telephone Company (“PRTC”) – from an order of the United States District Court for the District of Puerto Rico denying their motion to intervene in a suit brought by PRTC and its affiliates (“Plaintiffs”) against Sistema de Retiro de los Empleados del Gobierno y la Judicatura (the “Commonwealth Retirement System” or “Sistema de Retiro”) and its administrator (collectively, “Defendants”). The intervenor-appellants (hereinafter, “Intervenors” or “Appellants”) sought to set aside a judgment declaring that Puerto Rico Act No. 234 of August 9, 2008 (“Act 234″), P.R. Laws Ann. tit. 3 § 764, is ineffective because it is preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002 et seq. Act 234 provides essentially that certain PRTC employees, including Appellants, may withdraw from coverage by PRTC’s private retirement plans and instead enroll in the Sistema de Retiro government-administered plan.

PRTC brought the action against Sistema de Retiro seeking a declaratory judgment that Act 234 is preempted by ERISA and therefore void. Early in the litigation – indeed, at the first scheduling conference – Defendants informed the district court that they would consent to a judgment that Act 234 was a nullity because it was preempted by ERISA. Shortly thereafter, and with the written consent of Defendants, the district court issued an opinion proclaiming that conclusion and entered a declaratory judgment to that effect. See Puerto Rico Tel. Co. v. Sistema de Retiro, No. 09-1085, 2009 WL 2366706 (D.P.R. July 29, 2009). Appellants moved to intervene, but their motion was denied without explanation. This appeal contests that ruling. Appellants also brought a separate action against PRTC seeking to enforce their rights under Act 234, which suit is being held in abeyance in the district court pending the decision of this appeal.

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