Opinion
Case No. 00-1518 CM (BQRx)
February 15, 2001
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT BROUGHT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 56(b)
Presently before the Court is Defendants Texaco Inc. and Equilon Enterprises LLC's Motion for Summary Judgment or in the alternative Summary Adjudication brought pursuant to Federal Rule of Civil Procedure 56(b). Having read the moving papers, the opposition, and the reply, as well as the admissible evidence in support thereof, the Court hereby grants Defendants' Motion for the following reasons.
Pursuant to Central District Local Rule 7.11, the Court hereby dispenses with oral argument.
Factual and Procedural Background
This is Defendants' second Summary Judgment Motion in this action. Defendants filed their previous motion on November 18, 2000, and oral argument was heard on December 18. In its December 20 order, the Court granted Defendants' Motion as to all of Plaintiff's claims but one, the claim brought under ERISA Section 202. Defendants' present motion seeks to dismiss this final claim. The background facts are restated from the Court's last order.Between 1993 and 1994, Plaintiffs Michael Moxley, Richard Cumplido, and Gerald Hackworth began employment as truck drivers delivering gasoline to Texaco branded gasoline stations. Plaintiffs worked out of an oil refinery located in Wilmington, California. Texaco or its subsidiaries maintain numerous ERISA employee welfare and pension plans, including a medical plan; a dental plan; permanent total disability plan; and a severance pay plan for the benefit of its employees. Plaintiffs claim to be Texaco employees who were allegedly the victims of "intentional misclassification" as nonemployee temporary workers. Thus, although Plaintiffs were hired through a third-party temporary service company, namely Consolidated Personnel Services ("CPC"), they maintain that they were actually Texaco common-law employees.
As support, Plaintiffs argue inter alia that they were in constant contact with Texaco, provided equipment by Texaco, were trained by Texaco, integrated into the Texaco workforce, had their schedules set by Texaco, and wore Texaco-like uniforms. Plaintiffs further argue that they were hired after interviewing with Texaco employees and at that time they were told within two years of working as a driver, they would be converted to Texaco drivers.
II. Applicable Standard
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). In a trilogy of 1986 cases, the Supreme Court clarified the applicable standards for summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986).
The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Anderson, 477 U.S. at 256. Whether a fact is material is determined by looking to the governing substantive law; if the fact may affect the outcome, it is material. Id. at 248. If the moving party seeks summary adjudication with respect to a claim or defense upon which it bears the burden of proof at trial, its burden must be satisfied by affirmative, admissible evidence. By contrast, when the non-moving party bears the burden of proving the claim or defense, the moving party can meet its burden by pointing out the absence of evidence submitted by the non-moving party. The moving party need not disprove the other party's case. See Celotex, 477 U.S. at 325.
If the moving party meets its initial burden, the "adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e).
In assessing whether the non-moving party has raised a genuine issue, its evidence is to be believed, and all justifiable inferences are to be drawn in its favor. Anderson, 477 U.S. at 255 (citing Adickes v. S. H. Kress and Co., 398 U.S. 144 (1970)). Nonetheless, "the mere existence of a scintilla of evidence" is insufficient to create a genuine issue of material fact. Id. at 252. As the Supreme Court explained in Matsushita,
When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial.
Id., 475 U.S. at 586-87.
To be admissible for purposes of summary judgment, declarations or affidavits must be based on personal knowledge, must set forth "such facts as would be admissible in evidence," and must show that the declarant or affiant is competent to testify concerning the facts at issue. Fed.R.Civ.P. 56(e). Declarations on information and belief are insufficient to establish a factual dispute for purposes of summary judgment. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989)
Summary judgment is not treated as "a disfavored procedural shortcut" but as "an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy and inexpensive determination of every action.'" Celotex, 477 U.S. at 327 (quoting Fed.R.Civ.P. 1)
Finally, Summary Adjudication differs only in that a Court may grant Summary Judgment as to one of some of the claims alleged in the Complaint. See Wang Laboratories, Inc. v. Mitsubishi Electronics, America, Inc., 860 F. Supp. 1448, 1450 (C.D. Cal. 1993)
III. Discussion
The issue presented by this Motion is a discrete one, namely, does excluding leased employees from participating in an employer's benefits plans violate ERISA Section 202? In short, Defendants argue summary judgment is appropriate because a) in accordance with the terms of the Plans, Plaintiffs are not entitled to benefits; and b) such exclusion does not violate ERISA Section 202. Unfortunately for the Plaintiffs, they cannot cite any cases to say such an exclusion violates Section 202. Rather, they proffer the following:
. . . allowing a company which has been determined to have used an artificial classification to label its employees to nevertheless contract itself out of having to provide benefits to those it would normally have to offer benefits is fundamentally unfair and inequitable.
See Opp'n at p. 14.
In their Opposition, Plaintiffs state they have "a right to have participated in the Employee Savings Plan, including the Employee Stock Option Plan." See Opp'n at p. 12. However, the Employee Savings Plan which was effective when Plaintiffs were hired states in relevant part that:
You are not eligible to join this plan if you provide your services under a leasing agreement between Texaco or a participating company and a third party.
See Kundert Decl. at Ex. D; Pl's Statement of Genuine Issues Fact No. 22. The Court finds that this language, if made effective, would exclude Plaintiffs from receiving Plan benefits.
The law in other circuits is clear, language in an employer's Plan excluding leased employees from coverage does not violate ERISA's minimum participation standards as encompassed in Section 202. In Abraham v. Exxon Corp., 85 F.3d 1126 (5th Cir. 1996) the Fifth Circuit rejected plaintiff's contention that Section 202 prohibited excluding leased employees from the Plan. Id. at 1130. The Tenth Circuit adopted Abraham's reasoning regarding Section 202 in Bronk v. Mountain States Telephone and Telegraph, Inc., 140 F.3d 1335, 1338 (10th Cir. 1998) ("an employer need not include in its pension plans all employees who meet the test of common law employees.") Recently, the Eleventh' Circuit has also followed. See Wolf v. Coca-Cola Co., 200 F.3d 1337, 1342 (11th Cir. 2000) ("her claim for ERISA benefits fails the second prong because she is specifically excluded from eligibility by the terms of Coca-Cola's ERISA plan.")
While no Ninth Circuit case has yet ruled on this question, recently Judge Baird concluded that to recover under ERISA Section 202 "plaintiff must be eligible for benefits under the terms of the plan itself. This requirement is necessary because companies are not required by ERISA to make their ERISA plans available to all common law employees." Casey v. Atlantic Richfield Co., 2000 WL 657397 at *4 (C.D. Cal. March 30, 2000). Casey looked to the language of Section 202 to support its reasoning. The only limitations imposed by Section 202 are the following:
No pension plan may require, as a condition of participation in the plan, that an employee complete a period of service with the employer or employers maintaining the plan extending beyond the later of the following dates —
(i) the date on which the employee attains the age of 21; or
(ii) the date on which he completes 1 year of service.
See 29 U.S.C. § 1052 (a)(1)(A). Because the only limitations imposed by the statute are as to age and term of service, "other grounds for exclusion from ERISA plans are permitted." Casey, 2000 WL 657397 at *4.
This Court finds Casey's reasoning persuasive. Accordingly, excluding Plaintiffs from benefits under the Plans does not violate Section 202. While this result may be "unfair and inequitable," it is nevertheless the prevailing interpretation, which this Court adopts as law.
The Court agrees with Plaintiffs that permitting employers to contract out of liability appears to permit them to circumvent the reasoning established by the Vizcaino v. Microsoft line of cases. Nevertheless, as discussed, the Court finds the prevailing law in other Circuits and set forth in Casey persuasive.
Conclusion
For all the above reasons, the Court hereby grants Texaco's Motion for Summary Adjudication as to Plaintiffs' claim under ERISA Section 202.IT IS SO ORDERED.