Summary
holding that federal district court, rather than state court, had exclusive jurisdiction under ERISA to impose section 1132(c) penalties
Summary of this case from Ozcelebi v. ChowdaryOpinion
2012-07-9
Michelle YATES, Plaintiff, v. NYC HEALTH & HOSPITALS CORPORATION, Office of Legal Affairs, Claims Division, Defendant.
Michelle Yates, Plaintiff, pro se. Corporation Counsel, City of New York, Attorneys for Defendant.
Michelle Yates, Plaintiff, pro se. Corporation Counsel, City of New York, Attorneys for Defendant.
DEVIN P. COHEN, J.
Upon review of the foregoing papers, defendant's motion to dismiss pursuant to CPLR 3211(a)(2), CPLR 3211(a)(7) is granted in its entirety for the following reasons:
Plaintiff, Michelle Yates, commenced this action, pro se, by service of a summons and endorsed complaint dated October 28, 2011. In the complaint, plaintiff seeks to recover damages in the amount of $18,645.00 plus interest from February 11, 2011 for defendant's “failure to return money.” Specifically, plaintiff contends (in her notice of claim) that she is owed $2,200.00 in accrued annual leave, which defendant failed to pay upon her termination. Plaintiff also seeks to recover $15,950.00 in penalties, due to defendant's alleged failure to properly provide plaintiff with notice of her rights under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) upon her termination. It is unclear from where plaintiff derives her claim for the additional $495.00 demanded in the complaint. Defendant now moves to dismiss pursuant to CPLR 3211(a)(2) for lack of subject matter jurisdiction and CPLR 3211(a)(7) for failure to state a cause of action.
On January 31, 2012 the parties appeared in court for argument on the defendant's motion. After hearing oral argument, the court set a briefing schedule to permit the pro se plaintiff an opportunity to submit opposition and for defendant to submit reply. The court indicated that the matter would be deemed submitted upon the anticipated receipt of defendant's reply on February 29, 2012. Plaintiff's opposition papers were not received by the court until several weeks after the deadline for submission of both her opposition and defendant's reply papers. However, defendant appears to have received plaintiff's opposition papers and submitted a timely reply without objection. Given that the plaintiff is pro se and that there appears to have been no prejudice to the defendant, the court accepted plaintiff's late filing. Accordingly, the matter was deemed submitted upon the court's receipt of all papers and both parties' full submissions have been considered in deciding this motion.
Plaintiff was employed by defendant, New York City Health and Hospital Corporation, as an Executive Secretary from January 20, 2009 until her termination on February 11, 2011. On or around February 28, 2011, defendant claims to have mailed plaintiff information regarding her benefits, as well as instructions on how to receive payment for accrued annual sick leave. Within this information, according to defendant, was a lump sum payment form. Defendant contends that this form must be completed before an individual is able to receive their accrued leave. Plaintiff denies receiving these forms.
On or around July 1, 2011, defendant re-sent the lump sum payment forms to plaintiff. Plaintiff acknowledges receiving the form, but refused to sign until she was informed of the amount she would be receiving. Defendant contends that it is standard policy not to conduct an audit until the lump sum paperwork is completed.
Plaintiff denies ever receiving any information regarding her benefits and seeks to recover penalties for defendant's alleged failure to send her proper notice pursuant to COBRA.
CPLR 3211(a)(7) provides that “a party may move for judgment dismissing one or more causes of action asserted against him on the ground that the pleading fails to state a cause of action.” CPLR 3211(a)(2) provides for dismissal where “the court has not jurisdiction of the subject matter of the cause of action.”
Plaintiff's Accrued Leave Claim
The parties appeared in court on January 31, 2012 for argument on this motion. On that date, in court, plaintiff accepted a check in the amount of $1,274.02 from the defendant in satisfaction of her accrued vacation leave claims. Accordingly, that claim is dismissed at this time as moot. Plaintiff's COBRA Claim
Plaintiff seeks to recover $15,950.00 for defendant's alleged failure to provide her with timely and proper notice of her COBRA rights. Defendant moves to dismiss for lack of subject matter jurisdiction on the grounds that federal courts have exclusive jurisdiction over COBRA actions to enforce late-notice penalties.
Only a few published New York decisions discuss the jurisdictional question raised by this case. Further, there does not appear to be a published New York case on this issue as it relates to COBRA. Thus, the court looked to the relevant statutory provisions as well as authority from the federal courts and other state courts for guidance on this issue.
In 1974, Congress enacted the Employment Retirement Income Security Act (ERISA) to protect working men and women from abuses in the administration and investment of private retirement plans and employee welfare plans ( see Donovan v. Dillingham, 688 F.2d 1367, 1370 [11th Cir.1982]; see also Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 77 L.Ed.2d 490 [1983] [“ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans”] ). In 1986, Congress enacted the Consolidated Omnibus Reconciliation Act, (COBRA) which, in relevant part, amended ERISA by providing for limited continuation coverage rights under employer-provided group health insurance plans ( Swint v. Protective Life Ins. Co., 779 F.Supp. 532, 552 [S.D.Ala.1991] ). The COBRA provisions of ERISA are codified at 29 USC §§ 1161–68.
With limited exceptions, federal courts have exclusive jurisdiction over civil actions arising under ERISA including the subsequent COBRA amendments ( see29 USC § 1132[e] ). 29 USC § 1132(e), provides:
“Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, fiduciary, or any person referred to in section 102(f)(1) of this title. State courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction of actions under paragraphs (1)(B) and (7) of subsection (a) of this section.”
State courts are subject to the jurisdictional requirements of 29 USC § 1132(e), when deciding actions under the COBRA provisions of ERISA ( see Thompson v. Bridgeport Hosp., 2001 WL 823130, *11–12, 2001 Conn.Super. LEXIS 1755, 43–44 [Conn.Super.Ct.2001] ).
29 USC § 1132(c)(1)provides for the imposition of penalties of up to $100.00 per day where an administrator fails to provide notice to qualified beneficiaries of their rights under COBRA within 14 days ( 29 USC § 1166) or where an administrator fails to respond to a proper request for information within 30 days. Pursuant to 29 USC § 1132(e), actions to recover late-notice penalties under 29 USC § 1132(c)(1) are within the exclusive jurisdiction of the United States District Courts ( see Stanford v. Paul W. Heard & Co., 240 Ga.App. 869, 871, 525 S.E.2d 419 [Ga.Ct.App.1999] [ 29 USC § 1132(e) grants federal courts exclusive jurisdiction over claims for statutory penalties under 29 USC § 1132(c)(1) ] ).
“Any administrator (A) who fails to meet the requirements of paragraph (1) or (4) of section 1166 of this title, section 102(e)(1) of this title or section 1021(f), or section 1025(a) of this title with respect to a participant or beneficiary, or (B) who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the control of the administrator) by mailing the material requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper. For purposes of this paragraph, each violation described in subparagraph (A) with respect to any single participant, and each violation described in subparagraph (B) with respect to any single participant or beneficiary, shall be treated as a separate violation” (29 USC § 1132[c][1] ).
29 USC § 1132(e) does provide for limited exceptions to the exclusive jurisdiction of federal courts in subsections (a)(1)(B) and (a)(7) ( see Montner v. Interfaith Med. Ctr., 157 Misc.2d 583, 591–92, 596 N.Y.S.2d 975 [Civ.Ct., N.Y. County 1993] ). 29 USC § 1132(e)(a)(7) authorizes concurrent jurisdiction of the state courts to enforce compliance with a qualified medical child support order. 29 USC § 1132(a)(1)(B) authorizes concurrent state court jurisdiction in “[c]ivil actions ... brought ... by a participant or beneficiary ... 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 ” (emphasis added) (29 USC § 1132[a][1][B]; see also Nichols v. Xerox Corp., 34 A.D.3d 1200, 825 N.Y.S.2d 847 [4th Dept.2006] ). The phrase “under the terms of the plan” has been given a restrictive interpretation ( see Thompson, 2001 Conn.Super LEXIS at 44, supra ). Concurrent jurisdiction is authorized under 29 USC § 1132(a)(1)(B) when the participant or beneficiary asks the court to construe or apply the terms of the plan to the facts of their particular issue ( Young v. Sheet Metal Workers' Intl. Assn. Prod. Workers Welfare Fund, 112 Misc.2d 692, 701, 447 N.Y.S.2d 798 [Sup. Ct., Nassau County 1981]; and see Dinnigan v. ABC Corp., 35 Misc.3d 1216[A], 2012 WL 1429243 [Sup. Ct., Suffolk County 2012]; Brown v. Group Health Inc., 17 Misc.3d 1113[A], 2007 WL 2984005 [Sup. Ct., N.Y. County 2007] ). Therefore, a state court only has concurrent jurisdiction when it is asked to interpret the terms of the participant or beneficiary's particular plan.
In this action, plaintiff is asking the court to impose statutory penalties pursuant to 29 USC § 1132(c)(1) for an alleged violation of the COBRA notification requirements of 29 USC § 1166. Plaintiff does not seek the continuation of her benefits under COBRA, nor does she contend she suffered specific consequential damages due to defendant's alleged failure to provide proper notice of her COBRA rights. Therefore, plaintiff's claim revolves solely around the enforcement of a statutory penalty and not the examination of the terms of a plan. Since the COBRA amendments to ERISA are subject to the general jurisdictional requirements of ERISA, the court is constrained by 29 USC § 1132(e). Accordingly, plaintiff's suit must be brought in federal court ( see Stanford, 240 Ga.App. 869, 871, 525 S.E.2d 419 [Ga.Ct.App.1999]; Johnson v. Colonial Life & Accident Ins. Co., 173 N.C.App. 365, 374, 618 S.E.2d 867 [NC.Ct.App.2005] [“[i]t is clear that except for subsections (a)(1)(B) and (a)(1)(7) the district courts of the United States have exclusive jurisdiction over civil actions brought under this section. Therefore the trial court lacked subject matter jurisdiction over the COBRA (late-notice penalties) claim”] ); Vulcan v. United of Omaha Life Ins. Co., 715 A.2d 1169, 1178 [Pa.Super.Ct. 1998]; Duncan v. Junior Achievement, 1997 WL 371204, *4, 1997 Conn.Super. LEXIS 1724, 9–11 [Conn.Super.Ct.1997]; Thompson, 2001 Conn.Super LEXIS at 44, supra ).
For the foregoing reasons, plaintiff's claim for accrued leave is dismissed as moot as she accepted $1,274.02 in court on January 31, 2012, in satisfaction of that claim. Defendant's motion to dismiss pursuant to CPLR 3211(a)(2) is granted in its entirety, and the matter is dismissed for lack of subject matter jurisdiction. This decision is not intended to preclude plaintiff from pursuing her remaining claims in the proper venue.
This constitutes the decision and order of the this court.