Opinion
CIVIL ACTION NO. 03-2944
September 22, 2003
MEMORANDUM
Gerald E. Kollman (herein "Plaintiff") has filed a Complaint against Hewitt Associates, LLC ("Defendant"), alleging four causes of action under state law, including negligent misrepresentation, negligence, promissory estoppel and breach of contract. Jurisdiction is premised upon diversity of citizenship, pursuant to 28 U.S.C. § 1332(a)(1). Complaint ¶ 3. Presently before this Court is Defendant's Motion to Dismiss Plaintiffs claims pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons which follow, Defendant's Motion will be granted, but with leave to Plaintiff to amend.
I. Legal Standard
When deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court may look only to the facts alleged in the complaint and its attachments. Jordan v. Fox. Rothschild. O'Brien Frankel, 20 F.3d 1251, 1261 (3d Cir. 1994). The court must accept as true all well pleaded allegations in the complaint and view them in the light most favorable to the plaintiff. Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir. 1985). A Rule 12(b)(6) motion will be granted only when it is certain that no relief could be granted under any set of facts that could be proved by the plaintiff. Ransom v. Marrazzo, 848 F.2d 398, 401 (3d Cir. 1988).
II. Allegations of the Complaint
Plaintiff alleges the following facts, which, for the purpose of deciding the instant motion, will be read in the light most favorable to Plaintiff. According to the Complaint, Plaintiff was previously an employee of the Rohm and Haas Company ("Rohm and Haas") and, at all times relevant, has been a participant in the Rohm and Haas Health Group Benefits and Pension Plan. Complaint TAG At all relevant times, Defendant, a global outsourcing firm, provided administrative services pursuant to a contract for the Rohm and Haas Health Group Benefits and Pension Plan. Complaint ¶ 7. Among the services provided by Defendant was the creation and maintenance of an internet website ("Website") that allowed employees of Rohm and Haas to view calculations of their pension benefits under the Rohm and Haas Pension Plan. Complaint ¶ 8.
On or about October 31, 2002, Plaintiff, in considering whether to accept an early retirement Separation Benefits Package ("SBP"), obtained a statement of his pension benefits calculation from the Website showing that Plaintiff would receive a lump sum payout of $522,043.30 ("Lump Sum Payout") if he chose to accept the Separation Benefits Package. Complaint ¶¶ 10-11. Pursuant to a divorce settlement, Plaintiff is required to share a portion of the Lump Sum Payout on his pension with his ex-wife, an arrangement referred to in the Rohm and Haas Pension Plan as a Qualified Domestic Relations Order ("QDRO"). Complaint ¶ 12. The benefits calculation Plaintiff received from the Website maintained by Defendant indicated that the Lump Sum Payout had already been adjusted for this QDRO, so that the Lump Sum Payout amount listed was the amount that Plaintiff would personally receive. Complaint If 13. After receiving this benefits calculation from the Website, Plaintiff consulted with a financial planner regarding a retirement plan based on this calculation. Complaint ¶ 14.
On or about December 16, 2002, Plaintiff again used the Website to verify his pension benefits calculation and the amount of the Lump Sum Payout. Complaint If 15. After reviewing this information on the Website, Plaintiff contacted Defendant by telephone to confirm that the Lump Sum Payout included the QDRO. Complaint ¶ 16. During the December phone conversation, an employee of Defendant confirmed that the Lump Sum Payout did include the appropriate adjustment for the QDRO. Complaint ¶ 17.
Relying on the calculation of the Lump Sum Payout from the Website and the December 2002 phone conversation, Plaintiff elected to take the SBP and retire from Rohm and Haas as of December 31, 2002. Complaint ¶ 18. Plaintiff also signed an Agreement and Release waiving a 45 day review period and asked Defendant to immediately prepare his pension papers. Complaint ¶ 19.
In January of 2003, Plaintiff, who had not yet received his pension papers, contacted Defendant and was told that his papers had been mailed on December 17, 2002. Complaint ¶ 21. Plaintiff again contacted Defendant about his pension papers on or about January 8, 2003. During the January 8 phone call, a Hewitt employee told Plaintiff that his benefits calculation had been "revised" because the prior benefits calculation had not been properly adjusted for the QDRO. Complaint ¶ 21. The revised benefits calculation showed that Plaintiff was entitled to a lump sum payout of $419,917.72, approximately $103,000 less than the calculation obtained from the Website. Complaint ¶ 22. In another telephone call on or about January 9, 2003, one of Defendant's employees told Plaintiff that the revised benefits calculation had not been made until January 6, 2003, but could provide no explanation as to why Plaintiff had been assured in December that the calculation provided by Defendant was correct. Instead, Defendant's employee recommended that Plaintiff file an appeal with Rohm and Haas. Complaint ¶ 23.
On or about February 13, 2003, Plaintiff filed a "Rohm and Haas Health Group Benefits Claim Initiation Form" disputing Rohm and Haas's failure to provide Plaintiff with an accurate benefits calculation, including the amount of his Lump Sum Payout. Complaint ¶ 24. In response, in a letter dated March 5, 2003, Rohm and Haas stated that the Lump Sum Payout calculation originally provided by Defendant did not comply with the Rohm and Haas Pension Plan, in that it did not account for Plaintiffs QDRO. Complaint ¶ 25.
III. Discussion
The issue presented is whether Plaintiffs state law claims filed in this Court are preempted by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq (2003). There is no dispute that Plaintiffs pension plan is an employee pension benefit plan governed by ERISA. See 29 U.S.C. § 1002(2) (2003). As detailed above, Plaintiffs claims are to recover benefits due under this ERISA plan.
ERISA provides:
Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter HI of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan . . .
§ 514(a), 29 U.S.C. § 1144(a) (2003). In Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 1, 107 S.Ct.
1549, 95 L.Ed.2d 39 (1987), the Court interpreted the preemption provision broadly.
The phrase "relate to" [is] given its broadest common-sense meaning, such that a state law "relate[s] to" a benefit plan "in the normal sense of the phrase, if it has a connection with or reference to such apian."Pilot Life, 481 U.S. at 47 quoting Shaw v. Delta Air Lines, 463 U.S. 85, 97 (1983). The Court found that defendant's tort and breach of contract claims "each based on alleged improper processing of a claim for benefits under an employee benefit plan, undoubtedly meet the criteria for preemption under § 514(a)." Pilot Life, 481 U.S. at 48. The Third Circuit in Pryzbowski v. U.S. Healthcare, clarified the approach in Pilot Life, saying that a decision regarding benefits "falls within the scope of the administrative responsibilities of the HMO or insurance company, and therefore `relates to' the employee benefit plan." Pryzbowski v. U.S. Healthcare, 245 F.3d 266, 278 (2001). This Court has also found that ERISA preempts state law claims regarding improper processing of benefits. Bell v. UNUMProvident Corp., 222 F. Supp.2d 692, 696 (2002) (Baylson, J.).
Here, Plaintiff alleges four state law causes of action arising out of the administration of his pension benefits under the Rohm and Haas employee benefit plan. Plaintiffs claims are each based on alleged improper processing of Plaintiff s claim for pension benefits under the Rohm and Haas Pension Plan, an employee benefit plan governed by ERISA. Thus, Plaintiffs claims are related to the employee benefit plan and meet the criteria for preemption under § 514(a).
Plaintiff does not raise a claim under Pennsylvania's bad faith statute, 42 Pa. Cons. Stat. § 8371 (2003), thus, this Court need not address whether Plaintiffs claims are exempted from preemption by ERISA's "savings" clause. See, generally, the recent Supreme Court decision inKentucky Assoc. of Health Plans. Inc. v. Miller, 155 L.Ed. 2d468, 123 S.Ct. 1471 (2003). As to whether bad faith claims are preempted by ERISA, see Rosenbaum v. Unum Life Ins. Co. of Am., 2003 U.S. Dist. LEXIS 15652 (E.D. Pa., Sept. 8, 2003).
Plaintiff argues that his claims are not subject to preemption by ERISA because Defendant is a non-fiduciary. For this argument, Plaintiff relies on Painters of Phila. Dist. Council No. 21 Welfare Fund v. Price Waterhouse, 879 F.2d 1146 (3d Cir. 1989), which found that the outside auditor of an employee fund is a non-fiduciary against whom plaintiffs have no implied ERISA cause of action, and thus plaintiffs were left with only their state court remedies. In dicta, the Painters court said that professional malpractice actions are distinct from other state law claims and would not be preempted by ERISA. Plaintiff also relies on Shofer v. Stuart Hack Co., 595 A.2d 1078 (Md. 1991), a Maryland Court of Appeals case that applied Painters to find that, because the state law professional malpractice claims against a nonfiduciary consultant did not turn on the application or interpretation of either the benefits plan or ERISA, plaintiffs state law claims were not related to the plan and thus not preempted. The cases Plaintiff relies upon are not persuasive because they address professional malpractice claims against non-fiduciaries, whereas in the instant case, the claims are based in common law tort and contract and are raised against a party who performed administrative services for the ERISA plan. In addition, the disposition of Plaintiff s claims would necessarily involve interpretation of the Rohm and Haas pension benefit plan and of ERISA.
While the Third Circuit has not directly addressed whether the fiduciary status of a defendant affects the preemption of state law claims, the circuits that have addressed this issue have found that state law claims are preempted regardless of whether the defendants are ERISA fiduciaries, so long as the state law claims relate to an ERISA plan.Smith v. Provident Bank, 170 F.3d 609, 615-16 (6th Cir. 1999): Custer v. Pan American Life Ins. Co., 12 F.3d 410, 419 (4th Cir. 1993); Corcoran v. United Healthcare. Inc., 965 F.2d 1321, 1334 (5th Cir. 1992);Consolidated Beef Indus., Inc. v. New York Life Ins. Co., 949 F.2d 960, 964 (8th Cir. 1991); Gibson v. The Prudential Ins. Co. of America 915 F.2d 414, 418 (9th Cir. 1990); Howard v. Parisian. Inc., 807 F.2d 1560, 1564-65 (11th Cir. 1987). As pointed out in Schiffli Embroidery Workers Pension Fund v. Ryan. Beck Co., 869 F. Supp. 278, 285 (D.N.J. 1994), these cases addressing defendant's non-fiduciary status involve disputes over the provision or calculation of benefits. The rationale for these holdings is that "allowing beneficiaries to bring wrongful denial of benefit claims against non-fiduciary administrators would upset the nationwide scheme of Congress." Howard v. Parisian. Inc., 807 F.2d 1560, 1565 (11th Cir. 1987). This rationale is consistent with the justification for ERISA preemption of state law claims, generally,
The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA-plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA.Pilot Life, 481 U.S. at 54.
Although there is no direct precedent in this Circuit, it is consistent both with the holdings of other circuits and the rationale of ERISA preemption articulated in Pilot Life to find that the state law preemption analysis is not affected by defendant's fiduciary status. Thus, Plaintiffs state law claims are preempted under ERISA.
IV. Conclusion
For the foregoing reasons, Defendant's Motion to Dismiss will be granted but without prejudice to Plaintiff to file an amended complaint raising a claim under ERISA, if he so chooses.
An appropriate Order follows.
ORDER
AND NOW, this ___ day of ___, 2003, it is hereby ORDERED that the Defendant's Motion to Dismiss is GRANTED without prejudice, with leave granted to Plaintiff to file an Amended Complaint raising a claim under ERISA, § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B) (2003), within twenty days of the date of this Order.
Defendants shall file a responsive pleading to any Amended Complaint within ten days after service of the Amended Complaint.