Opinion
CIVIL NO. 00-1489 (JP)
October 27, 2000
OPINION AND ORDER
I. Introduction
The Court has before it Defendant Phillips Puerto Rico Core Inc.'s ("Phillips") Motion to Dismiss Complaint ( docket No. 23). Six days after the deadline to file an opposition, Plaintiff requested an extension of time of twenty (20) days in which to oppose Defendant's Motion to Dismiss (docket No. 24). The undersigned Judge denied said motion in a previous Order (docket No. 26). On March 27, 2000, Plaintiff Miguel Vaquer-Riera ("Vaquer-Riera") filed a vaguely worded complaint in the Commonwealth of Puerto Rico Court of First Instance, Superior Court, Guayama section ("state court") alleging pension plan violations. In the Complaint, Plaintiff alleged that Defendant wrongfully reduced his benefits package under Phillips Puerto Rico's Pension Plan ("the Plan"), and that Defendant breached its fiduciary duty to him by not keeping him informed, oriented and/or notified of intonation regarding his Plan benefits.
On April 20, 2000, Defendant Phillips filed a Notice of Removal, stating that this Court has original subject matter jurisdiction over the Complaint pursuant to 28 U.S.C. § 1331, because it is a civil action arising under" the laws of the United States, specifically the Employment Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001-1461 ("ERISA"). On May 23, 2000, Defendant filed a motion, which this Court granted, requesting that Plaintiff submit a more definite statement as to the allegations of the Complaint (docket No. 10). Plaintiff submitted said statement on August 31, 2000 (docket No. 20).
Phillips then moved to dismiss the above-captioned Complaint. In its motion, Phillips challenges this Court's subject matter jurisdiction, alleging that (a) Plaintiff has failed to exhaust administrative remedies with respect to his claim for benefits; (b) Plaintiff's allegations are time-barred; and (c) Plaintiff filed the present action against an improper defendant. Phillips argued each defense in the alternative. As previously stated, Plaintiff has filed no opposition.
II. Legal Standard
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may, in response to an initial pleading, file a motion to dismiss the complaint for failure to state a claim upon which relief can be granted. It is well-settled, however, that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed. 2d 80 (1957); see also Miranda v. Ponce Fed. Bank, 948 F.2d 41 (1st Cir. 1991). The Court must accept as true "all well-pleaded factual averments and indulg[e] all reasonable inferences in the plaintiff's favor." Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir. 1996) (citations omitted); see also Berrios v. Bristol Myers Squibb Caribbean Corp., 51 F. Supp.2d 61 (D. Puerto Rico 1999) (Pieras, J.). A complaint must set forth "factual allegations, either direct or inferential, regarding each material element necessary to sustain recovery under some actionable theory." Romero-Barcelo v. Hernandez-Aposto, 75 F.3d 23, 28 n. 2 (1st Cir. 1996) (quoting Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir. 1988)). The Court, however, need not accept a complaint's "`bald assertions' or legal conclusions" when assessing a motion to dismiss. Abbott, III v. United States, 144 F.3d 1, 2 (1st Cir. 1998) (citing Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1216 (1st Cir. 1996)). It is with this framework in mind that this Court will assess the instant motion.
III. Discussion
The Employment Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001-1461 ("ERISA"), allows a civil action to be brought by a participant or beneficiary of a plan "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B).
ERISA section 503 requires employee benefit plans to afford plan subscribers a reasonable opportunity to obtain review, by a plan fiduciary, of decisions denying claims for benefits. See id., § 1133(2). In this way, all employee benefit plans are required to contain provisions describing avenues whereby plan beneficiaries can appeal denials of benefits and/or contest the withholding of benefits. While the ERISA statute itself does not contain any express statements that a plaintiff must exhaust all of an employee benefits plan's administrative remedies before bringing suit, Drinkwater v. Metropolitan Life Ins. Co., 846 F.2d 821, 825 (1st Cir.), cert. denied, 488 U.S. 909, 109 S.Ct. 261, 102 L.Ed.2d 249 (1988), courts have repeatedly held that plan beneficiaries are required to exhaust all of an employee benefits plan's administrative procedures before commencing suit based upon a denial of benefits because "[i]t would be `anomalous' if the same reasons which led Congress to require plans to provide remedies for ERISA claimants did not lead courts to see that those remedies are regularly utilized." Makar v. Health Care Corp., 872 F.2d 80, 83 (4th Cir. 1989); see also Glover v. St. Louis-San Francisco Railway Co., 393 U.S. 324, 330, 89 S.Ct. 548, 551, 21 L.Ed.2d 519 (1969); Wilczynski v. Lumbermens Mutual Cas. Co., 93 F.3d 397, 404 (7th Cir. 1996); Kennedy v. Empire Blue Cross and Blue Shield, 989 F.2d 588, 594 (2nd Cir. 1993). Moreover, this Circuit has stated that exhausting the administrative procedures outlined in an employee benefit plan is a condition precedent to bringing suit for ERISA benefits in a federal court. See Drinkwater, 846 F.2d at 826. The only exception to the exhaustion requirement for plan-based claims exists where it is alleged in the complaint that resort to administrative remedies would be futile, or the remedy inadequate. Id. at p. 826 n. 21 (citing Amato v. Bernard, 618 F.2d 559, 568 (9th Cir. 1980)).
The administrative exhaustion requirement does not bar actions brought in federal court based on a violation of terms of the ERISA statute itself (statute-based claims). See Cotte v. Cooperativa de Ahorro Y Credito Yabucoena, 73 F. Supp.2d 153, 158 (D. Puerto Rico 1999) (Pieras, J.), (providing an informative discussion of the differences between plan-based and statute-based claims, and adopt[ing] the position that the exhaustion of administrative remedies is not required when a plaintiff's claim is based on a statutory violation of ERISA"). Id. at 60.
It is undisputed that the ERISA claim at issue here is planbased, as opposed to statute-based, in that Plaintiff Vaquer-Riera is suing for benefits guaranteed to him under the provisions of Phillips's Pension Plan. In order to determine whether the Plaintiff has satisfied the exhaustion requirement, the terms of the Plan and Plaintiff's allegations in his Complaint must be examined. Section 4 of the Plan, which addresses the Claims Procedure states:
(a) The Committee shall prepare such forms as shall be by it required for securing benefits or perfecting claims under the Plan. Such forms shall be available to Participants on request, and information relating to an application or claim for benefits may be obtained by a Participant from the Plan Administrator on request. Any claim for benefits provided by this Plan shall be presented in writing in the appropriate form to the Plan Administrator for consideration, grant or denial. In the event that a claim is denied, in whole or in part, by the Plan Administrator, the claimant, within sixty days of receipt of said claim by the Plan Administrator, shall receive written notice of denial. Such notice shall contain:
(1) a statement of the specific reason or reasons for denial;
(2) specific reference(s) to the pertinent Plan provision(s) on which such denial is based;
(3) a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and
(4) an explanation of the Plan's claim procedure.
(b) Any claimant who feels that a claim has been improperly denied, in whole or in part, by the plan Administrator may request a review of the denial by making written application to the Committee. The claimant shall have the right to review all pertinent Plan documents relating to said claim and to submit issues and comments in writing to the Committee. Any person filing an appeal from the denial of a claim must do so in writing within sixty days after receipt of written notice of denial. The Committee shall render a decision regarding the claim within sixty days after receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered within a reasonable time, but not later than 120 days after receipt of a request for review. The decision of the Committee shall be in writing and, in the case of a denial of a claim, in whole or in part, shall set forth the same information as is required in an initial notice of denial by the Plan Administrator, other than an explanation of the Plan's claim review procedure.
The Plan itself was submitted separately to the Court on October 26, 2000, as docket No. 27.
In this case, Plaintiff has not alleged in his Complaint that he presented his claim to the Retirement Plan Committee charged with evaluating the Plan's benefit claims. Plaintiff's Complaint only alleges that he "has exhausted the administrative remedies at his disposal, having attempted on multiple occasions to contact by telephone and in writing, the Federal Department of Labor and the Plan Administrator, or Phillips, the Defendant." (Plf's. More Defin. Stmt., ¶ 32). His statement that he exhausted administrative remedies is conclusory, and as such, this Court is not required to accept it as true. See Abbott, III, 144 F.3d at 2. Administrative remedies will be exhausted and an ERISA claim will accrue when a claim for benefits is made pursuant to the procedures established by the plan and said claim has been formally denied. See Union Pacific R.R. Co. v. Beckman, 138 F.3d 325, 330 (8th Cir.), cert. denied, Beckham v. Union Pacific R. Co., 525 U.S. 817, 119 S.Ct. 56, 142 L.Ed.2d 43 (1998). Under this analysis, it is clear that Plaintiff has not filed an administrative claim with the Retirement Plan Committee to inform that agency of the facts at issue in this case. Plaintiff has also not alleged that seeking administrative remedies would be futile. Because Plaintiff has not availed himself of the administrative claims procedure set forth in the Plan, and because exhausting such administrative remedies is a condition precedent to federal court jurisdiction over plan-based ERISA claims, this Court concludes that it does not possess subject matter jurisdiction over the instant dispute. See Drinkwater, 846 F.2d at 826.
IV. Conclusion
Due to Plaintiff's failure to exhaust administrative remedies, this Court hereby GRANTS Defendant Philips' Motion to Dismiss the Complaint, and hereby DISMISSES WITHOUT PREJUDICE Plaintiff' s claims against Defendant Phillips.
IT IS SO ORDERED.