Opinion
Civil Action No. 03-CV-05701.
June 25, 2004
KENNETH A. JACOBSEN, ESQUIRE, JOSEPH A. O'KEEFE, ESQUIRE, On behalf of Plaintiffs.
RICHARD L. ORWIG, ESQUIRE, JILL E. NAGY, ESQUIRE, STEPHEN J. ALEXANDER, ESQUIRE, On behalf of Defendants.
ORDER
NOW, this 25th day of June, 2004, upon consideration of Defendants BARTA and Louwerse's Motion to Dismiss Pursuant to F.R.C.P. No. 12(b)(1), which motion was filed December 24, 2003; upon consideration of Plaintiff's Response to Defendants' BARTA and Louwerse, Motion to Dismiss Pursuant to F.R.C.P. No. 12(b)(1) filed January 9, 2004; upon consideration of Defendants BARTA and Louwerse's Rebuttal Brief to Plaintiff's Reply to Motion to Dismiss filed January 20, 2004; upon consideration of the briefs of the parties; after oral argument conducted before the undersigned March 11, 2004; and for the reasons expressed in the accompanying Memorandum,
IT IS ORDERED that Defendants BARTA and Louwerse's Rebuttal Brief to Plaintiff's Reply to Motion to Dismiss filed January 20, 2004 is stricken. IT IS FURTHER ORDERED that defendant's motion to dismiss based upon a lack of subject matter jurisdiction is granted in part and denied as moot in part.
Pursuant to provisions of Rule 7.1(c) of the Rules of Civil Procedure for the United States District Court for the Eastern District of Pennsylvania "[t]he Court may require or permit further briefs if appropriate." Therefore, there is no absolute right to a reply brief and a party must seek leave of court for permission to file one. It is the general policy of the undersigned that, if appropriate, any reply brief is limited to seven pages.
In this case, without leave of court, defendants filed a proposed reply brief that is thirteen pages in length. Defendant's proposed reply brief is in excess of our usual page limit for reply briefs. In addition, it is the policy of the undersigned that a brief in support of any motion should not exceed twenty-five pages, without prior leave of court. We note that defendant's original brief is thirty-four pages long. Moreover, much of defendants' proposed reply brief is simply a rehashing of subjects already covered by their original brief.
Accordingly, because defendant did not seek permission to file its original brief in excess of our twenty-five page limit, did not seek leave to file its proposed reply brief in excess of our seven-page limit and because we conclude that for the most part defendant's proposed reply brief is simply an attempt to cover subjects already covered in its original brief, we strike defendant's reply brief.
IT IS FURTHER ORDERED that defendants' motion to dismiss plaintiffs' Complaint for a lack of subject matter jurisdiction based upon plaintiffs' failure to exhaust administrative remedies is granted. IT IS FURTHER ORDERED that plaintiffs' Complaint filed October 14, 2003 is dismissed without prejudice to refile a complaint after exhaustion of administrative remedies.
IT IS FURTHER ORDERED that in all other respects, defendants' motion to dismiss is denied as moot. IT IS FURTHER ORDERED that defendants' counterclaims against Joyce Austin are dismissed.
It is the sense of the within Order and the accompanying Memorandum that because plaintiffs have not exhausted their administrative remedies we grant defendants' motion to dismiss based upon a lack of subject matter jurisdiction. Hence, it is unnecessary for the court to rule upon the two other bases for defendants' motion, namely, sovereign immunity based upon the Eleventh Amendment of the United States Constitution and whether the employee benefit plans in question are exempt from the requirements of ERISA based upon the government plan exclusion. Accordingly, we deny as moot defendants' motion to dismiss on these two additional bases.
IT IS FURTHER ORDERED that defendant's third-party Complaint against T. David Berry is dismissed.
IT IS FURTHER ORDERED that defendants' request for attorneys' fees, costs and sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure is denied.
MEMORANDUM
INTRODUCTION
This matter is before the court on Defendants BARTA and Louwerse's Motion to Dismiss Pursuant to F.R.C.P. No. 12(b)(1) filed December 24, 2003. Plaintiffs' Response to Defendants' BARTA and Louwerse, Motion to Dismiss Pursuant to F.R.C.P. No. (12)(b)(1) was filed January 9, 2004. For the reasons expressed below, we grant in part and deny in part defendants' motion to dismiss.
Specifically, we grant defendants' motion to dismiss for lack of subject matter jurisdiction based upon plaintiffs' failure to exhaust their administrative remedies. We deny as moot defendants' motion to dismiss for lack of subject matter jurisdiction based upon alleged sovereign immunity pursuant to the Eleventh Amendment of the United States Constitution and defendants' assertion that the employee benefit plans in question are exempt from the requirements of ERISA based upon the government plan exclusion.
BACKGROUND
On October 14, 2003 plaintiffs Amalgamated Transit Union Local 1345 ("ATU") and Joyce Austin filed their class action Complaint. Plaintiffs' Complaint alleges violations of various sections of the Employee Retirement Income Security Act of 1974 ("ERISA"). Plaintiffs seek monetary damages, injunctive relief and declaratory relief for defendants' alleged failure to provide certain information regarding pension and health care benefits of the ATU members.
29 U.S.C. § 1001 to 1461.
Specifically, Count I of plaintiffs' Complaint avers violation of 29 U.S.C. § 1021; Count II avers violation of 29 U.S.C. § 1022; Count III alleges violation of 29 U.S.C. § 1024(b); Count IV alleges violation of 29 U.S.C. § 1104; Count V avers violation of 29 U.S.C. § 1166; Count VI avers violation of 29 U.S.C. § 158 (the only non-ERISA violation); and Count VII avers violation of 29 U.S.C. § 1132.
On November 17, 2003 defendants filed their answer to plaintiffs' Complaint, a counterclaim against plaintiff Austin in her capacity as President of ATU and filed a Third-party Complaint against T. David Berry in his capacity as a union representative and a member of the pension committee.
Facts
Based upon the pleadings, record papers, affidavits and exhibits, the operative facts are as follows. Defendant Berks Area Reading Transportation Authority ("BARTA") is the creation of the County of Berks and the City of Reading. It provides public bus services for the City and throughout the County. Defendant Dennis D. Louwerse is the Executive Director of BARTA. He has authority and responsibility for BARTA's business affairs and was appointed and reports to BARTA's Board of Directors. BARTA's Board of Directors is comprised of nine members (six members appointed by the County of Berks and three members appointed by the City of Reading).
Plaintiff Amalgamated Transit Union Local 1345 is one of two collective bargaining units that represent BARTA's drivers and mechanics. Plaintiff Joyce Austin is a member and President of ATU and an employee of BARTA.
Pursuant to the Collective Bargaining Agreement between BARTA and ATU a pension plan and health benefit plan were created to dictate the administration of benefits for ATU members. The pension plan created a Pension Committee composed of four members. The Pension Committee is designated as Plan Administrator for the pension plan.
Plaintiff Joyce Austin and third-party defendant T. David Berry, Vice-President of ATU, are the union members of the Pension Committee. Defendant Louwerse and BARTA financial officer Frank Huss are the employer members of the Pension Committee.
The Pension Committee is responsible for resolving disputes, affirming collective bargaining pension figures and all other aspects of administration of the Pension Plan. Moreover, Pension Committee members are responsible for knowledge of the pension plan's administrative criteria and plan regulations for document dissemination. All Pension Committee members share equal standing on the committee and power to call a meeting whenever the need arises. The plan prescribes alternative dispute resolution relief in the event the committee members cannot arrive on a decision on behalf of the committee by appointment of a third-party arbitrator.
The health plan for employees is administered by Blue Cross and Blue Shield.
Joyce Austin contends that she wrote a series of letters to Mr. Louwerse seeking information regarding the following: (1) BARTA's monthly budgets and contracts from January 1, 2002 through June 29, 2003; (2) copies of BARTA's annual filings with the Commonwealth of Pennsylvania regarding the pension plan; (3) a copy of the pension plan; (4) a summary plan description of the pension plan; (5) the summary plan description of the health benefits with Blue Cross and Blue Shield; and (6) a copy of any contract with BARTA's insurance providers, together with a list of all doctors available to members through the health insurance plan.
Plaintiffs allege that one month after Austin's inquiry, counsel for ATU wrote BARTA seeking the same information referenced above. BARTA allegedly responded that it simply did not have time to respond to the request for information and that the information is provided to the Pension Committee by a "standard procedure" and that there would be a presentation to the committee in the future when questions could be asked, but there would be no other disclosures or dissemination of information regarding the plans.
Neither plaintiff Austin, nor any individual member of ATU has requested the information about the pension and health plans from the plan administrator of either the pension plan or the health plan.
STANDARD OF REVIEW
Rule 12(b)(1) of the Federal Rules of Civil Procedure provides in pertinent part:
Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except the following defenses may at the option of the pleader be made by motion: (1) lack of jurisdiction over the subject matter. . . .
Fed.R.Civ.P. 12(b)(1). There are two types of challenges to subject matter jurisdiction pursuant to Rule 12(b)(1): (1) to the Complaint on its face; and (2) to the existence of subject matter jurisdiction in fact. Daliessio v. DePuy, Inc., No. Civ.A. 96-5295, 1998 WL 24330 at *2 (E.D. Pa. Jan. 23, 1998).
When a defendant attacks subject matter jurisdiction "in fact" as opposed to an attack on the allegations on the face of the complaint, the Court is free to weigh the evidence and satisfy itself whether it has power to hear the case. Mortenson v. First Fed. Sav. Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). In such a situation, `no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.' Id. In addition, the burden of proving the existence of subject matter jurisdiction lies with the plaintiff. Id.Carpet Group International v. Oriental Rug Importers Association, 227 F.3d 62, 69 (3d Cir. 2000).
Discussion
Defendants assert three bases for their motion to dismiss. Initially, defendants contend that plaintiffs fail to set forth proper subject matter jurisdiction pursuant to ERISA because the employee benefit plans at issue fall under an exclusion for government plans under ERISA. Next, BARTA asserts that it has sovereign immunity under the Eleventh Amendment of the United States Constitution because BARTA is a political subdivision of the Commonwealth of Pennsylvania. Finally, defendants assert that even if the pension and health plans are subject to ERISA, and even if BARTA enjoys no sovereign immunity, then plaintiffs' Complaint should be dismissed because plaintiffs failed to exhaust their administrative remedies pursuant to the pension and health plans required by ERISA.
For the following reasons, we agree with defendants that plaintiffs have not exhausted their administrative remedies. However, we decline to address the other two bases of defendants' motion.
Initially, we note that for purposes of this Memorandum and Order, we assume arguendo, that plaintiffs' pension and health care plans are covered by ERISA. Whenever a plaintiff has a claim under an ERISA-covered employee benefit plan, there is an initial requirement to exhaust all administrative remedies before filing suit in federal court. See Weldon v. Kraft, 896 F.2d 793 (3d Cir. 1990); DeLong v. Teacher's Insurance and Annuity Association, No. Civ.A. 99-1384, 2000 U.S. Dist. LEXIS 4759 (E.D. Pa. Mar. 29, 2000).
In this case, defendants contend that plaintiffs have not exhausted their administrative remedies regarding plaintiffs' request for certain information regarding the pension and health care plans. Specifically, defendants contend that plaintiff Joyce Austin requested certain information directly from BARTA Executive Director Dennis D. Louwerse. Defendant Louwerse contends that he is not the plan administrator for either the pension or health plans.
Rather, defendants contend that the plan administrator for the pension plan is the Administrative Committee (of which plaintiff Austin is a member) and the plan administrator for the health plan is Blue Cross/Blue Shield. On the other hand, plaintiffs contend that Mr. Louwerse is the plan administrator for both plans. We disagree with plaintiffs.
The term "administrator" is defined as "the person specifically so designated by the terms of the instrument under which the plan is operated." 29 U.S.C. § 1002(16)(A). Moreover, it is the plan administrator which is required by ERISA to disclose and report information required to be furnished to participants and beneficiaries. See 29 U.S.C. § 1021.
In this case, the plan administrator for the pension plan is the Administrative Committee. The plan administrator for the health plan is Blue Cross/Blue Shield. There is no evidence that plaintiffs have requested any information from the plan administrator of either the pension or health plans. Rather, the record indicates plaintiffs requested information from defendants. Defendants are not the plan administrator of either the pension or health plan.
See Exhibits for Brief in Support of Motion to Dismiss Pursuant to F.R.C.P. No. 12(b)(1) filed on behalf of defendants December 24, 2003, Exhibit F, page F-37.
See Exhibits for Brief in Support of Motion to Dismiss Pursuant to F.R.C.P. No. 12(b)(1) filed on behalf of defendants December 24, 2003, Exhibit D, page D-5.
Accordingly, we conclude that because plaintiffs have not requested the information they seek from the plan administrator of the respective plans, they have not exhausted their administrative remedies. Hence, we grant defendants' motion to dismiss for lack of subject matter jurisdiction and dismiss plaintiffs' Complaint without prejudice to refile a complaint after plaintiffs exhaust their administrative remedies.
Because we determine that if ERISA applies, plaintiffs cannot maintain a cause of action for failing to exhaust administrative remedies, we decline to address the remaining bases of defendants' motion to dismiss.
In addition, a review of defendants' counterclaims against Joyce Austin and defendants' third-party Complaint against third-party defendant T. David Berry reveals that all of the claims against Mr. Berry and all but a Rule 11 claim against Joyce Austin are contingent upon liability being found against defendants on a theory of joint and several liability. Thus, because we have dismissed plaintiffs' Complaint, we conclude that all defendants' joint and several liability claims against Joyce Austin and T. David Berry are moot.
Furthermore, regarding defendants' claims against Joyce Austin for Rule 11 sanctions, we conclude that dismissal of plaintiffs' Complaint is sufficient and we decline to further sanction plaintiffs. In addition, we decline to award defendants attorneys' fees and costs in this action.
We note that defendants did not file the within motion to dismiss until after an answer was filed in response to plaintiffs' Complaint. On January 22, 2004 the undersigned conducted a Rule 16 Telephone Status Conference. During the conference we denied defendants' request to stay this matter during the pendency of the within motion to dismiss because defendants chose to file the within motion after filing its answer and after we scheduled this case for further proceedings.
We conclude that any attorneys' fees and costs borne by defendants for discovery and other pre-trial matters could have been easily diminished if defendants had filed the within motion to dismiss prior to filing an answer to plaintiffs' Complaint. Accordingly, we deny defendants' request for attorneys' fees and costs requested in the prayer for relief in both their counterclaims and third-party Complaint.