Summary
denying application for stay because movants did not satisfy "high burden" placed upon them
Summary of this case from In re AlbicoccoOpinion
00 CV 2013 (SJ)
June 4, 2003
Gary Steven Stone, Esq., Ann Pegg Biddle, Esq., LEGAL SERVICES FOR THE ELDERLY, New York, New York, Attorneys for Plaintiff.
Martin M. Ween, Esq., WILSON, ELSER, MOSKOWITZ, EDELMAN DICKER LLP, New York, New York, Attorneys for Defendants.
MEMORANDUM AND ORDER
Plaintiff Rosa Neely ("Plaintiff") brought this action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"), challenging the denial of long-term disability benefits under her employer's benefit plan. Defendants Pension Trust Fund of the Pension, Hospitalization and Benefit Plan of the Electrical Industry, and the Trustees of the Pension Trust Fund of the Pension, Hospitalization and Benefit Plan of the Electrical Industry ("Defendants" or "the Plan") brought a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56(c) ("Rule 56"). Plaintiff cross-moved for summary judgment. In a decision dated January 16, 2003 ("January 16 Order"), this Court denied Defendants' motion in part, and granted Plaintiff's cross-motion for summary judgment, remanding the matter to Defendants' Pension Committee ("Pension Committee") for reconsideration. See Neely v. Pension Trust Fund, No. 00 CV 2013, 2003 WL 21143087 (E.D.N.Y. Jan. 16, 2003).
This Court granted Defendants' motion to the extent of dismissing Plaintiff's duplicative claims under different provisions of the ERISA statute. See Neely v. Pension Trust Fund, No. 00 CV 2013, 2003 WL 21143087 (E.D.N.Y. Jan. 16, 2003).
On April 14, 2003, Defendants filed a motion for stay pending appeal and clarification of this Court's January 16 Order. Plaintiff opposed Defendants' motion.
DISCUSSION
I. Stay Pending Appeal
This Court analyzes motions for stay pending appeal pursuant to Rule 62 of the Federal Rules of Civil Procedure ("Rule 62"). See Fed.R.Civ.P. 62. Pursuant to Rule 62, issuance of a stay is discretionary with the court, requiring the balancing of four factors: (1) whether the movant will suffer irreparable injury absent a stay; (2) whether the prevailing party will suffer substantial injury if a stay is issued; (3) whether the movant has demonstrated a substantial possibility, although less than a likelihood, of success on appeal; and (4) the public interests that may be affected. Hirschfeld v. Board of Elections, 984 F.2d 35, 39 (2d Cir. 1993) (citations omitted); see also Rodriguez v. Debuono, 175 F.3d 227, 234 (2d Cir. 1999) (citing Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). "A party seeking a stay of a lower court's order bears a difficult burden." United States v. Private Sanitation Indus. Assoc. of Nassau/Suffolk, Inc., 44 F.3d 1082, 1084 (2d Cir. 1994). Because Defendant has not satisfied the high burden placed on them in this circumstance, this Court denies Defendants' motion for stay pending appeal.
Defendants' purport to bring the motion pursuant to Federal Rules of Appellate Procedure 8(a)(1)(A). The Federal Rules of Appellate Procedure, however, do not apply in the district courts. See New Pacific Overseas Group (USA) Inc. v. Excal Internat'l Develop. Corp., No. 99 CV 2436, 2000 WL 802907, at * 1, n. 1 (S.D.N.Y. June 21, 2000) ("[Movant] has characterized this motion as one pursuant to Rule 8(a), Fed.R.App.P. The Federal Rules of Appellate Procedure govern procedure in the United States courts of appeals. See Rule 1(a), Fed.R.App.P. The standard applied under Rule 8(a), Fed.R.App.P., and Rule 62(d), Fed.R.Civ.P., however, is the same. See Hilton v. Braunskill, 481 U.S. 770, 776 (1987)."). Accordingly, this Court will examine the motion under the relevant district court rule, Rule 62.
The first factor the Court considers is whether Defendants would suffer irreparable injury absent a stay. Defendants argue that, if they are not granted a stay, the Pension Committee will be forced to reconsider Plaintiff's application for disability benefits as required by this Court's January 16 Order. This, Defendants argue, would cause them irreparable injury for the following reason: in the event that Plaintiff were to receive a favorable decision by the Pension Committee, and receive her pension dating back to 1994, and then the Second Circuit were to review the January 16 Order and reverse, Defendants would not be able to recover Plaintiff's award because she would have no assets from which to refund Defendants. The injury described is particularly speculative, and thus is not sufficient to satisfy the legal standard of irreparable injury. See Equal Employment Opportunity Commission v. Local 638, No. 71 CV 2877, 1995 WL 355589, at *2 (S.D.N.Y. June 7, 1995) ("To establish irreparable harm, [parties] must demonstrate an injury that is neither remote nor speculative, but actual and imminent." (internal citations omitted) (quoting Consolidated Brands, Inc. v. Mondi, 638 F. Supp. 152, 155 (E.D.N.Y. 1986)). The injury Defendants describe is "remote and speculative," and this Court fails to see a "threat of serious harm" that is "actual, viable, [or] presently existing." See City of New York v. Angelbrook Ltd. Partnership, 891 F. Supp. 908, 925 (S.D.N.Y. 1995).
The speculative nature of the potential injury to Defendants also undermines Defendants' argument that the Second Circuit will find the matter moot if the Pension Committee grants Plaintiff her benefits, and thus causes Defendants "irreparable injury." As noted by Plaintiffs in opposition, should the Pension Committee reach a different result pursuant to this Court's January 16 Order — which required the Pension Committee to grant Plaintiff's application a full and fair review according to the laws of this Circuit — Defendants would presumably fully support the Pension Committee's determination that Plaintiff deserved the benefits eventually granted. This Court is perplexed by the suggestion that an ERISA fiduciary could suffer irreparable injury simply by fulfilling its obligations under Federal law.
The second factor the Court must consider is whether a party will suffer substantial injury if a stay is issued. Defendants assert that, if even after a stay the Plaintiff is awarded her benefits, she will suffer no harm because she would receive all of the benefits she would have received dating from February 1994. Plaintiff asserts that she will suffer substantial injury if the stay is granted, because any potential relief to which she is entitled will be further delayed. The Court finds that this factor does not weigh strongly in favor of either party.
Defendants argue strenuously that the third factor — whether movant has demonstrated a substantial possibility, although less than a likelihood, of success on appeal — weighs strongly in their favor, as this Court misunderstood the Pension Committee's procedures, and therefore misapplied the law to the facts. (See Defs.' Mem. of Law, at 6.) This Court, however, does not see its January 16 Order as flawed, and relies on the reasoning in that order in finding that Defendants have not demonstrated a substantial possibility of success on appeal. See Neely, 2003 WL 21143087, at *7-12.
Finally, Defendants argue that the public interest would be negatively affected absent a stay of the January 16 Order, because the decision "has the potential to have an adverse and harmful impact on the way many employee benefits plans conduct business." (Defs.' Mem. of Law, at 8.) Defendants misunderstand the scope and mandate of this Court's January 16 Order if they understand it to suggest that any plan fiduciary should "refrain from seeking expert medical advice." (Id.) This Court's decision only required the plan fiduciaries to grant the potential beneficiary's application a full and fair review, and when the fiduciaries rely on an expert, the plan fiduciaries should still make a full inquiry of the supporting documents provided by the applicant. See Neely, 2003 WL 21143087, at *9-11. To the extent there still remains a question as to whether Defendants actually followed that standard is a matter for the Second Circuit; that it is the law binding all ERISA fiduciaries is a point previously decided by this Court, and the Second Circuit. See id. (discussing the law articulating the standard).
Having analyzed Defendants' arguments under the four controlling factors, this Court finds that Defendants have not met their high burden of demonstrating a need for a stay pending appeal of this Court's January 16 Order. The Court will grant a temporary stay, however, so that Defendants may seek a stay pending appeal from the Second Circuit, pursuant to Rule 8(a) of the Federal Rules of Appellate Procedure. See LNC Investments, Inc. v. The Republic of Nicaragua, No. 96 CV 6360, 2000 WL 729216, at * 2 (S.D.N.Y. June 6, 2000).
II. Clarification of January 16 Order
Defendants' motion also seeks a clarification of this Court's January 16 Order, insofar as the Order required a remand to the Pension Committee to reconsider Plaintiff's application for disability benefits. It seems both parties misconstrue this Court's objectives, and the law. Defendants claim that, because this Court was bound to apply the arbitrary and capricious standard when faced with Plaintiff's lawsuit, any further proceedings pursuant to that lawsuit should similarly be bound to the arbitrary and capricious standard. This is simply incorrect.
The arbitrary and capricious standard binds the review posture of the district court, not the posture of a pension committee upon reconsideration. A proper remand to the Pension Committee should not be one wherein the Committee is restricted to an arbitrary and capricious review of the materials presented to it; rather, the Committee must consider the application placed before it as if it were a new application. It is not a de novo review, nor one limited to the arbitrary and capricious standard, because it is not an appellate analysis. Appellate review postures do not restrict deliberations of administrative bodies on remand. Accordingly, the administrative record available to this Court, and to which this Court was bound in considering the facts necessary for deciding this case, is irrelevant going forward on remand.See Miller v. United Welfare Fund, 72 F.3d 1066, 1071-72, 1073-74 (2d Cir. 1995) (describing the restrictions on various courts in determining standards of review and the scope of evidentiary materials).
According to Miller, upon remand a pension committee is not restricted to the administrative record available to the district court. See id. at 1074. Moreover, both the applicant and the various administrators of the relevant pension committee are allowed to produce evidence to contradict their respective opinions. Id. To interpret these instructions as allowing a prospective application, on remand, to introduce evidence extending beyond the appealed application by up to nine years misunderstands Miller's mandate. The evidence that the parties are invited to introduce in Miller's instructions is the evidence which the appealing party believes was not considered, but was available to the Pension Committee at the time, and which contradicts that evidence the Pension Committee relied upon in making its decision.
Finally, Plaintiff argue that this Court's January 16 Order should be construed as allowing Plaintiff's attorney to be present at the Pension Committee's determinations on remand. This Court is not in a position, however, to dictate Defendants' procedures for carrying out the mandates of the Fund, including how it conducts its hearings regarding an applicant's submissions. If the Pension Committee determines that Plaintiff's legal representative is not welcome, this Court will not require Plaintiff's attorney's presence.
CONCLUSION
For the foregoing reasons, Defendant's motion for a stay pending appeal is DENIED, and a temporary stay is GRANTED.