Opinion
21-cv-03941-JD
01-11-2023
TIMOTHY SMITH, Plaintiff, v. FIDELITY WORKPLACE SERVICES LLC, et al., Defendants.
ORDER RE MOTION TO DISMISS AND PARTIAL STAY
JAMES DONATO, DISTRICT JUDGE
The Court dismissed plaintiff Timothy Smith's original complaint on preemption grounds, with leave to amend. Dkt. No. 33. Smith filed a first amended complaint (FAC), which alleges claims under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001, et seq., against defendants AT&T Services, Inc., and Fidelity Workplace Services LLC. Dkt. No. 35. Defendants have asked to dismiss the claims under Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 39. The parties' familiarity with the record is assumed, and the FAC is dismissed with leave to amend.
The problem is that the FAC does not provide enough basic facts to plausibly allege an ERISA claim. Among other shortfalls, the FAC does not identify a plan that might be subject to ERISA, or provide any facts indicating that Smith was a designated beneficiary of his wife's contributions to a plan. See 29 U.S.C. §§ 1132(a)(1)(B), 1132(a)(3). The FAC does not allege facts indicating that Smith submitted a “claim for benefits” as a participant or beneficiary of an ERISA-governed plan. See 29 U.S.C. § 1133.
Overall, the FAC does not plausibly establish that Smith has a stake in the funds in question. It also does not plausibly allege that defendants did anything wrong. In effect, the FAC says only that approximately $21,318.43 was transferred out of Smith's wife's plan in 2008 for unknown reasons. Dkt. No. 35 at 2. Nothing in the FAC pushes this transfer into the realm of an ERISA violation, even assuming the statute applies, or any other wrongful conduct. As the FAC currently stands, it is equally probable that the transfer was proper, which is not enough for purposes of Rule 8. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'”) (quoting Bell Atl. Corp. v. Twombly, 550 U.S., 544, 557 (2007)).
It is also worth noting that, assuming ERISA applies, the FAC does not establish that Smith exhausted his administrative remedies. See Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 626 (9th Cir. 2008) (plaintiffs generally must exhaustive administrative remedies under the relevant benefit plan prior to bringing suit under ERISA). And while statute of limitations questions are typically not appropriate for resolution in a pleadings motion, see Dkt. No. 33 at 3, the FAC should offer some facts explaining why Smith had no reason to believe he was a beneficiary between his wife's death in 2007 and the notice he received from the Social Security Administration (SSA) in 2020. See N. Cal. Retail Clerks Unions & Food Emps. Joint Pension Tr. Fund v. Jumbo Mkts., Inc., 906 F.2d 1371, 1372 (9th Cir. 1990) (four-year statute of limitations applies to ERISA claims).
The Court is sympathetic to Smith's likely feelings of surprise and concern after getting the rather mysterious notice from the SSA. Even so, the FAC cannot go forward in its present posture, and so it is dismissed with leave to amend. This will be the final opportunity to amend. Alternatively, the parties may wish to put their pencils down and figure out a way to settle a claim of approximately $21,000 without incurring more fees and attorney time. A common-sense settlement seems eminently attainable here. Defendants should consider running Smith's wife's name through their benefit and contribution plan databases to determine whether she was a participant, and if so, what happened to her account. The Court is not ordering this step at this time, but it would seem to be a reasonable and humane thing to do in this situation.
Smith may file an amended complaint by January 31, 2023. The amended complaint must be consistent with this order and may not add any new claims or parties without the Court's prior approval. Failure to amend by the deadline will result in dismissal under Federal Rule of Civil Procedure 41(b). The case is stayed in all other respects pending further order.
IT IS SO ORDERED.