Opinion
No. 02-CV-6510T.
September 28, 2004
DECISION ORDER and REPORT RECOMMENDATION
PRELIMINARY STATEMENT
By order dated April 14, 2003, the above-captioned matter has been referred to the undersigned for the supervision of pre-trial discovery and the hearing and disposition of all non-dispositive motions, pursuant to 28 U.S.C. §§ 636(b)(A) and (B). (Docket # 11). Plaintiff, William Bolia (hereinafter "Bolia"), has filed suit against defendant, Mercury Print Productions, Inc. (hereinafter "Mercury Print"), under the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Employee Retirement Income Security Act (ERISA), the Congressional Omnibus Budget Reconciliation Act (COBRA) and the New York Human Rights Law. (Docket # 1). Currently pending is Bolia's motion for leave to amend his Complaint. (Docket # 53).
The April 14, 2003 Order reassigned this case, as well as other cases, to the undersigned consistent with the terms of the original referral order to former United States Magistrate Judge William G. Bauer. (Docket # 11). On December 13, 2002, Judge Telesca had referred this case to former Magistrate Judge William G. Bauer for the purposes designated above. (Docket # 5).
FACTUAL BACKGROUND
Bolia was formerly employed by Mercury Print, a printing company, in its Pre-Press Department. On April 13, 2001, Mercury Print terminated Bolia's employment, an action that forms the heart of Bolia's discrimination claims. (Docket # 1). Following such termination, Bolia elected and received medical and dental insurance coverage pursuant to COBRA. Without notification to him, Bolia alleges, Mercury Print changed dental coverage from Blue Cross and Blue Shield to Guardian Group, effective January 1, 2002. On March 18, 2002, Bolia was informed by Blue Cross and Blue Shield that his COBRA dental benefits had been terminated. Although Bolia's dental insurance was subsequently reinstated by Mercury Print, Bolia claims that his rights under COBRA were violated due to a purported lapse in coverage. (Docket # 1).Count Five of the Complaint alleges that Mercury Print failed to supply ERISA plan information pursuant to a request Bolia made on March 22, 2002, in violation of 29 U.S.C. § 1132(c)(1). (Docket # 1). He now seeks to amend Count Five to add as a defendant John C. Place, the administrator of the welfare benefit plan. (Docket # 53). In addition, Bolia seeks to amend that count to add a claim that Mercury Print and Place further violated 29 U.S.C. § 1132(c)(1) by failing to supply plan information in response to Plaintiff's First Request for Production of Documents, served in this litigation on March 13, 2003. ( Id.).
DISCUSSION
Rule 15(a) of the Federal Rules of Civil Procedure provides that once the time for amending a pleading as of right has expired, a party may request leave of the court to amend, which "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). If the underlying facts or circumstances relied upon by the party seeking leave to amend may be a proper subject of relief, the party should be afforded the opportunity to test the claim on its merits. See United States ex rel. Maritime Admin. v. Continental Illinois Nat. Bank and Trust Co. of Chicago, 889 F.2d 1248, 1254 (2d Cir. 1989). "In the absence of any apparent or declared reason — such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. — the leave sought should, as the rules require, be `freely given.'" Foman v. Davis, 371 U.S. 178, 182 (1962).
While the court retains discretion to grant or deny leave to amend under Rule 15(a), "[the] outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules." Id. at 182; Ruffolo v. Oppenheimer Co., 987 F.2d 129, 131 (2d Cir. 1993); Evans v. Syracuse City School Dist., 704 F.2d 44, 46 (2d Cir. 1983).
A. Motion To Join Additional Party : Bolia seeks to amend his Complaint to add John Place as a defendant in Count Five. Mercury Print objects on the grounds that Bolia unduly delayed in seeking such leave and that such amendment would be futile. (Docket # 71).
In evaluating a motion to amend, the court should carefully consider whether the non-moving party will be prejudiced by such amendment. According to the Second Circuit, a court must consider "whether the assertion of the new claim would: (i) require the opponent to expend significant additional resources to conduct discovery and prepare for trial; (ii) significantly delay the resolution of the dispute; or (iii) prevent the plaintiff from bringing a timely action in another jurisdiction." Block v. First Blood Associates, 988 F.2d 344, 350 (2d Cir. 1993) (citations omitted).
"One of the most important considerations in determining whether amendment would be prejudicial is the degree to which it would delay the final disposition of the action." Krumme v. WestPoint Stevens Inc., 143 F.3d 71, 88 (2d Cir.), cert. denied, 525 U.S. 1041 (1998) (internal quotation omitted). Mere delay, however, unaccompanied by either bad faith or undue prejudice, does not warrant denial of leave to amend. Block v. First Blood Associates, 988 F.2d at 350 (citing State Teachers Retirement Bd. v. Fluor Corp., 654 F.2d 843, 856 (2d Cir. 1981)).
Under the original scheduling order in this case, all motions to join additional parties and to amend the pleadings were to have been filed by May 1, 2003. While other deadlines in the scheduling order subsequently were amended, that deadline was not. Thus, because Bolia's pending motion, filed on March 23, 2004, was not filed until almost eleven months after the filing deadline, Mercury Print argues that the "delay" factor counsels strongly against amendment at this date.
By contrast, Bolia contends that he was not in a position to file such a motion until he did, in March 2004, because Mercury Print had withheld until that time information requested by Bolia concerning the identity of the plan administrator. Specifically, Bolia alleges that he was unable to identify Place as the plan administrator until February 27, 2004, when he received a copy of a 2002 Annual Return for the welfare benefit plan bearing Place's signature as the plan administrator. This document, as Mercury Print admits, indicates that it was signed on October 30, 2003, and Mercury Print has offered no explanation for its tardy disclosure.
Mercury Print counters that Bolia could have learned this information sooner by serving interrogatory requests seeking the identification of the plan administrator. Moreover, Mercury Print notes, in September 2003, in response to document requests, it did provide copies of plan documents that contained an unsigned signature line identifying John Place as the plan administrator. Thus, according to Mercury Print, by no later that September 2003, Bolia possessed sufficient information on which to base his motion, and he has offered no reasonable explanation for his failure to have moved at that time.
Irrespective of which party bears principal responsibility for the delay, delay alone does not warrant denial of leave to amend. Instead, the delay must be accompanied by either bad faith or undue prejudice. See Block v. First Blood Associates, 988 F.2d at 350. Here, Mercury Print has failed to adduce, and this Court cannot find, evidence of either. See Liegey v. Ellen Figg. Inc., 2003 WL 21361724 (S.D.N.Y. 2003) (leave to amend complaint to add co-defendant granted where plaintiff did not learn of such party's involvement until deposition discovery). Place is the President of Mercury Print and has been involved in this lawsuit since its inception. He has already been deposed, and, more importantly, Bolia has represented that Place's addition will not result in any further discovery beyond that which is the subject of a pending motion (Docket # 55 at 3) — a representation to which this Court intends to hold Bolia. Accordingly, I do not find that amendment of Count Five to add Place as a defendant will result in undue prejudice to Mercury Print.
Having determined that Bolia's motion will not cause undue delay, this Court must now consider whether Place, as plan administrator, is a proper party in this action. Rule 20(a) of the Federal Rules of Civil Procedure provides:
All persons . . . may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all defendants will arise in the action.
Fed.R.Civ.P. 20(a). Courts have interpreted the requirements of Rule 20(a) liberally so as to promote judicial economy and to allow related claims to be tried within a single proceeding. See, e.g., Barr Rubber Products Co. v. Sun Rubber Co., 425 F.2d 1114, 1127 (2d Cir.) (Rule 20 "specifically vests in the district court the discretionary power to make such orders as may be required to prevent delay or prejudice"), cert. denied, 400 U.S. 878 (1970); Liegey v. Ellen Figg, Inc., 2003 WL 21361724 at *3 ("requirements of Rule 20(a) should be interpreted liberally"); Kovian v. Fulton County Nat. Bank and Trust Co., 1990 WL 36809, *9 (N.D.N.Y. 1990) ("there is no rigid rule as to what constitutes the same series of transactions or occurrences"); City of New York v. Joseph L. Balkan, Inc., 656 F. Supp. 536, 549 (E.D.N.Y. 1987) (requirements of Rule 20 are to be "liberally interpreted") (citations omitted).
Here, the party Bolia seeks to add, Place, is the plan administrator of Mercury Print's ERISA welfare benefit plan. As such, his potential liability to Bolia arises out of the same series of occurrences alleged in Bolia's pending Complaint and as to which he has been deposed in his capacity as President of Mercury Print, namely, his claim in Count Five that Mercury Print, as the plan's sponsor, violated 29 U.S.C. § 1132(c)(1). See Randolph-Rand Corp. of New York v. Tidy Handbags, Inc., 2001 WL 1286989, *4 (S.D.N.Y. 2001) (granting plaintiff's motion to join co-defendant because separate actions "would run counter to the interests of judicial economy" and "might well require the repetition of many of the same efforts expended in the [pending] case").
Mercury Print argues that even if this Court finds that Place is a proper party and that the amendment would not result in undue prejudice, the motion should nonetheless be denied because the amendment is futile. The gist of Mercury Print's argument is this: Bolia has no standing to sue either Place or Mercury Print because he is not an employee, has no reasonable expectation of returning to employment and has no colorable claim to vested benefits in the plan at issue, the disability plan. (Docket # 71 at 2-4).
Although defendant has cited authority from other circuits supporting his argument, the question whether Bolia's discrimination complaint constitutes a reasonable expectation of returning to covered employment is an open question in this Circuit. Morelli v. Cedel, 141 F.3d 39, 46 n. 2 (2d Cir. 1998) ("we need not now consider whether the filing of an antidiscrimination suit, in itself, would provide a plaintiff with `a reasonable expectation of returning to covered employment'") (citing Mullins v. Pfizer, Inc., 23 F.3d 663, 667 (2d Cir. 1994)). In the interests of judicial economy, I decline to resolve whether such a defense ultimately will prevail. This very argument is currently before United States District Judge Michael A. Telesca in a pending summary judgment motion filed by Mercury Print seeking, inter alia, dismissal of Count Five. (Docket # 63). Mercury Print's prospect of success on this argument is the same regardless of whether the defendant is the plan sponsor, Mercury Print, or the plan administrator, John Place. See 29 U.S.C. § 1002(16)(A) (the term "administrator," as defined in the ERISA statute means the "person specifically so designated by the terms of the . . . plan" or the "plan sponsor," if the administrator is not so designated). Recognizing this, the most appropriate and efficient course of action is to permit Bolia to amend Count Five to add Place, as plan administrator, as a defendant and thereafter permit the parties to supplement their summary judgment motions to include the ERISA claim against Place. Accordingly, Bolia's motion to amend Count Five to add John Place as a defendant is granted.
Bolia has cross-moved for summary judgment on Count Five. (Docket # 75).
B. Additional Claim Under ERISA : Bolia also seeks to amend Count Five to include a claim that Mercury Print failed to provide plan documents relating to its welfare benefit plan in response to his document requests served in this litigation. (Docket # 53). Mercury Print objects, contending that Bolia's proposed amendment should be denied on the grounds of futility. (Docket # 71). This Court agrees that such an amendment would be futile, and thus recommends denial of the motion.
It is well-settled that if the amendment proposed by the moving party is futile, "it is not an abuse of discretion to deny leave to amend." Ruffolo v. Oppenheimer Co., 987 F.2d 129, 131 (2d Cir. 1993). The determination whether a proposed amendment is futile is made under the same standard as that used to consider whether a claim would be subject to a motion to dismiss. See Hampton Bays Connections, Inc. v. Duffy, 212 F.R.D. 119, 123 (E.D.N.Y. 2003) (citing A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 160 F. Supp. 2d 657, 666 (S.D.N.Y. 2001)). Thus, the court "must view the claim in the light most favorable to the moving party and determine whether there is a colorable claim for relief." Santiago v. Steinhart, 1993 WL 410402, *2 (S.D.N.Y. 1993).
Here, Bolia served his First Request for Production of Documents, which included his requests for Summary Plan Descriptions and Annual Reports of any ERISA plans that covered Bolia during his employment, on March 14, 2003. (Docket # 71). According to the proposed Amended Complaint, while Bolia received some requested documents, he did not receive a copy of the disability plan's Annual Report for 2001.
Under ERISA, "the [plan] administrator shall upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated." 29 U.S.C. § 1024(b)(4). A civil action may be brought by a plan participant when a plan administrator fails to supply requested plan information. 29 U.S.C. § 1132(a)(1)(A). In such a suit, the participant must establish that: (1) ERISA required the administrator to make available to the participant the information requested; and (2) the participant requested the information and the administrator refused to provide it. McFaul v. Loews Corp., 1993 WL 541778, *2 (S.D.N.Y. 1993) ( citing Kleinhans v. Lisle Sav. Profit Sharing Trust, 810 F.2d 618, 622 (7th Cir. 1987)).
In the instant matter, regardless of whether Bolia can satisfy the first element, he plainly cannot satisfy the second because he did not submit a written request for plan information to the plan administrator. Instead, Bolia's counsel served upon counsel for Mercury Print a request for documents in the course of an ongoing litigation. For the reasons discussed below, I find that such a request fails to comply with the plain language of ERISA. See 29 U.S.C. § 1024(b)(4).
Defendant asserts the same standing defense discussed supra to this proposed amendment as well. For the reasons discussed above, as well as because this Court finds that Bolia cannot establish the second element of a § 1132(a)(1)(A) claim, this Court does not reach the standing challenge.
In support of his claim, Bolia has cited authority finding that requests made to counsel are adequate to satisfy the ERISA requirements. See, e.g., Sunderlin v. First Reliance Standard Life Ins. Co., 235 F. Supp. 2d 222 (W.D.N.Y. 2002) ( 29 U.S.C. § 1132 violated by plan sponsor's inadequate response to request for ERISA document made by plaintiff to plan sponsor's insurance carrier); see also Boone v. Leavenworth Anesthesia, Inc., 20 F.3d 1108 (10th Cir. 1994) (letter request for summary plan description sent to defendant's counsel constituted proper request under ERISA). The proposed new claim, however, is premised not simply on a request made through counsel, but on a request in the form of a document demand served in a legal action. It is this latter fact that distinguishes the above-cited authority from the case at bar.
Here, Bolia's counsel served on counsel for Mercury Print a discovery request for documents, one of which requested copies of ERISA summary plan descriptions and annual reports. On facts strikingly similar to those presented here, the Seventh Circuit Court of Appeals dismissed a plaintiff's ERISA claims. See Verkuilen v. South Shore Bldg. and Mortg. Co., 122 F.3d 410 (7th Cir. 1997). In Verkuilen, the plaintiff argued that interrogatories served in the course of a litigation should be construed as a written request for plan information under ERISA. The Seventh Circuit rejected such claim, stating that "[a]n interrogatory is a lawyer-to-lawyer device, rather than a participant-to-administrator device." Id. at 411. According to the court:
The procedure for requesting information [under ERISA] is so simple, and the statutory rules for response so explicit, that we have insisted on strict compliance by both participant and administrator. Jones v. UOP, 16 F.3d 141 (7th Cir. 1994); Kleinhans v. Lisle Savings Profit Sharing Trust, 810 F.2d 618 (7th Cir. 1987). Nothing but confusion could come from treating complaints and interrogatories as ERISA demands, and replacing Rules 11 and 37 with the penalty provisions of § 1132(c).Id. at 412.
I find persuasive the reasoning of the Verkuilen decision. In addition to the rationale provided in Verkuilen, another, more practical, concern militates against conflating discovery demands and ERISA requests. Suppose, for example, that a responding party has a legitimate objection to a document request made in the course of a litigation. If such a request were to be construed as a request under 29 U.S.C. § 1024(b)(4), the responding party would face the untenable choice of waiving proper discovery objections or risking a claim for damages under 29 U.S.C. § 1132 based upon his or her client's refusal to provide such documents. I decline to interpret the ERISA statute to require such a Hobson's choice.
While plaintiff cites the Sunderlin decision (Docket # 87 at 5), the court in Sunderlin did not directly address the issue presented here. Rather, in evaluating whether the defendant had acted in bad faith in failing to provide ERISA documentation requested under 29 U.S.C. § 1024(b)(4), the court noted that the defendant had also failed to produce the summary plan description in response to discovery requests in the course of the litigation. 235 F. Supp. 2d at 234. The decision does not indicate whether the court viewed defendant's refusal to turn over the document in the course of discovery as a separate violation of § 1132, in addition to a failure to comply with its independent discovery obligations.
Accordingly, I find that Bolia's motion to amend Count Five to include a claim that Mercury Print violated 29 U.S.C. § 1132 by not providing welfare benefit plan documents in response to discovery demands should be denied.
CONCLUSION
For the foregoing reasons, it is my Decision and Order that Bolia's motion to amend his complaint to add John Place, as plan administrator, as a defendant in Count Five (Docket # 53) is GRANTED. In addition, it is my recommendation that Bolia's motion to further amend Count Five by adding a claim under 29 U.S.C. § 1132 based upon defendant's alleged failure to provide ERISA plan documents in response to discovery requests (Docket # 53) be DENIED.
IT IS SO ORDERED.
Pursuant to 28 U.S.C. § 636(b)(1), it is hereby
ORDERED, that this Report and Recommendation be filed with the Clerk of the Court.
ANY OBJECTIONS to this Report and Recommendation must be filed with the Clerk of this Court within ten (10) days after receipt of a copy of this Report and Recommendation in accordance with the above statute, Fed.R.Civ.P. 72(b), 6(a) and 6(e) and Local Rule 72.3(a)(3).
The district court will ordinarily refuse to consider on de novo review arguments, case law and/or evidentiary material which could have been, but was not, presented to the magistrate judge in the first instance. See e.g. Patterson-Leitch Co., Inc. v. Massachusetts Municipal Wholesale Electric Co., 840 F.2d 985 (1st Cir. 1988).
Failure to file objections within the specified time or to request an extension of such time waives the right to appeal the District Court's Order. Thomas v. Arn, 474 U.S. 140 (1985); Small v. Secretary of Health and Human Services, 892 F.2d 15 (2d Cir. 1989); Wesolek v. Canadair Ltd., et al., 838 F.2d 55 (2d Cir. 1988).
The parties are reminded that, pursuant to Rule 72.3(a)(3) of the Local Rules for the Western District of New York, "written objections shall specifically identify the portions of the proposed findings and recommendations to which objection is made and the basis for such objection and shall be supported by legal authority." Failure to comply with the provisions of Rule 72.3(a)(3), or with the similar provisions of Rule 72.3(a)(2) (concerning objections to a Magistrate Judge's Decision and Order), may result in the District Court's refusal to consider the objection.
Let the Clerk send a copy of this Order and a copy of the Report and Recommendation to the attorneys for the Plaintiff and the Defendant.
IT IS SO ORDERED.