Opinion
No. 99-1344
January 13, 2000
REPORT AND RECOMMENDATION
Before the Court is Defendant Advanced Technology Services' ("ATS") Motion to Dismiss Count II of the original complaint, and Plaintiff James Bond's ("Bond") Motion for Leave to File an Amended Complaint adding Count III. Bond filed this suit alleging violations of the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq. ("FMLA") and a supplemental state-law intentional infliction of emotional claim.
I. FACTS ALLEGED IN THE COMPLAINT
Bond was employed with ATS as a computer technician from July 1998 to July 30, 1999. During his employment, Bond sustained a work related abdominal hernia which required surgery. On July 19, 1999, Bond noted the time he needed as medical leave on the employee sign-up calendar and notified his Team Leader on July 20, 1999, that he would need a surgical procedure which would take place on July 26, 1999.
Several weeks before Bond arranged to have the surgical procedure, his direct supervisor, Ken Ehresman, told him that he could not take 4-6 weeks off, the time needed for recuperation. On July 27, 1999, Bond had the operation and two days later, he informed his team leader that the doctor said "no" to Bond returning to work prior to 4-5 weeks rest.
On July 30, 1999 his employer dropped a "thunderball" on Bond by firing him from his job, and canceling his medical insurance on the same day. Ehresman also drafted a memo on that date which allegedly outlined Bond's performance problems and the reasons why Bond was fired.
Bond was shaken but not stirred. Bond filed this suit and alleges that his employer's actions were in retaliation of him giving notice that he needed to take time off for medical leave, in violation of the FMLA. Moreover, Bond alleges that ATS canceled his medical insurance and fired him to intentionally inflict severe emotional distress on Bond.
ATS moves to dismiss the intentional infliction of emotional distress claim (Count II).
II. LEGAL STANDARD FOR MOTION TO DISMISS
In ruling on a motion to dismiss, the Court must accept well pleaded allegations of the complaint as true. See Hishon v. King Spalding, 467 U.S. 69, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984); Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1104 (7th Cir. 1984), cert. denied, 470 U.S. 1054, 105 S.Ct. 1758, 84 L.Ed.2d 821 (1985). Although a complaint is not required to contain a detailed outline of the claim's basis, it nevertheless must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory. Car Carriers, 745 F.2d at 1106. Mere conclusions, without supporting factual allegations, are insufficient to support a claim for relief. Cohen v. Illinois Inst. of Tech., 581 F.2d 658, 663 (7th Cir. 1978). Dismissal should not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45 (1957).
III. DISCUSSION
A. Motion to Dismiss
Defendant's main argument relating to the state-law intentional infliction of emotional distress claim is based on Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., preempting related state law claims. It argues that Plaintiff's state-law claim is "related to" the employee benefits plan, and hence preempted, since he alleges that the emotional distress was caused by Defendant cancelling Plaintiff's insurance coverage. In contrast, Plaintiff argues that the claim is not preempted by ERISA since he is alleging that the emotional distress was caused by the wrongful termination of employment.
Generally, ERISA preempts state law claims which relate to the employee benefit plan. See, e.g., 29 U.S.C. § 1144(a). The term "relates to" has been given a broad meaning by the Supreme Court, such that a state law relates to a benefit plan "in the normal sense of the phrase, if it has connection with or reference to such a plan." See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47 (1987) (quotation omitted). In this case, the parties do not dispute that the health insurance provided by Defendant was covered by ERISA. Thus, the only disputed issue is the scope of the preemption.
When given its broadest meaning, the Court finds that a claim for intentional infliction of emotional distress which stems from the denial of coverage of such a plan is "connected with" the benefit plan. See, e.g., Maciosek v. Blue Cross Blue Shield United of Wisconsin, 930 F.2d 536, 540 (7th Cir. 1991) (approving district court dismissal of a plaintiff's intentional infliction of emotional distress claim based on ERISA preemption); Kuhl v. Lincoln Nat'l Health Plan, 999 F.2d 298, 304 (8th Cir. 1993) (emotional stress claim stemming from insurance company's failure to expedite payment preempted by ERISA). Consequently, the Court concludes that Plaintiff's claim that he suffered emotional distress as a result of Defendant cancelling coverage of Plaintiff under an ERISA regulated plan is "related to" the benefit plan and is thus preempted.
Plaintiff's entire claim, however, might not be preempted. He also alleges an alternative theory of the cause of emotional distress that may not be "related to" the plan. In the complaint, Plaintiff also alleges that "Defendant company's conduct . . . in terminating Plaintiff led to emotional distress by Plaintiff." Complaint, ¶ 23. This theory does not appear to be related in any way to the ERISA covered plan. The termination has no connection with (at least in the way Plaintiff has pleaded the complaint) or reference to, the benefit plan. Moreover, assuming that the firing of Plaintiff was "outrageous," the Court cannot find that no jury can find in favor of Plaintiff. Therefore, as pled, this claim cannot be dismissed under preemption. See also, Clark v. Coats Clark Inc., 865 F.2d 1237, 1244 (11th Cir. 1989)
Accordingly, the Court recommends that the motion to dismiss be allowed in part and denied in part. To the extent that Plaintiff seeks to base his intentional infliction of emotional distress claim on the fact that Defendant denied insurance coverage, the Court should dismiss the claim on grounds of ERISA preemption. However, to the extent Plaintiff's intentional infliction of emotional distress claim is based on the termination of employment, Plaintiff's state-law claim should not be dismissed because it is not preempted by ERISA.
Lastly, Defendant asks for attorney's fees incurred to file this motion. Although Defendant does not specify what authority the Court may use to impose sanctions, the Court presumes that it seeks sanctions under Fed.R.Civ.P. 11 since Defendant citesSmith v. Blue Cross Blue Shield, 724 F. Supp. 618 (E.D. Wis. 1989), a Rule 11 case.
As noted above, Plaintiff's position has some merit as evidenced by the recommended partial victory on the motion to dismiss. Thus, the Court cannot find that Plaintiff's position is frivolous. The Court recommends that sanctions not be imposed.
The Court notes that Plaintiff moved to amend complaint prior to Defendant filing a responsive pleading (an answer). A "responsive pleading", however, does not include a motion to dismiss. AMP v. Gregory,.3d 1286, 1289 (7th Cir. 1995). As such, Plaintiff could have amended his complaint as a "matter of course," ed.iv. P. 15(a) without asking the Court for leave.
Plaintiff seeks to amend his complaint in order to add Count III, an ERISA claim. Defendant resists and argues that the new claim is without merit.
Fed.R.Civ.P. 15 requires that a leave to amend be "freely given if justice so requires." However, the Supreme Court has stated that leave to amend need not be given if there is an apparent reason not to do so, such as "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment." Foman v. Davis, 371 U.S. 178, 182 (1962); Payne v. Churchich, 161 F.3d 1030, 1036 (7th Cir. 1998).
Defendant argues that Plaintiff's proposed ERISA claim has no "legal sufficiency" because Plaintiff's Motion for Leave "fails to cite any authority that a claim of the type alleged is a valid ERISA claim." Defendant's Reply to Plaintiff's Motion for Leave to Amend, p. 2. Moreover, Defendant argues that the leave should not be granted because the amended claim fails to state a claim upon which relief can be granted. Specifically, Defendant argues that although the Plaintiff alleges that his termination was "unlawful," he fails to allege how it was unlawful. Id.
Although Defendant's argument might have some merit, the Court cannot find that the claim which Plaintiff seeks to add contains insufficient allegations to support an ERISA violation. Moreover, contrary to Defendant's argument, the Court does not find that Plaintiff is required to allege how his termination was unlawful. Under the notice pleading rules, the Court doubts whether such specificity is needed. Furthermore, the Court cannot find that the amendment is brought in bad faith to harass or annoy Defendant, nor can the Court find that Defendant is significantly prejudiced by the amendment.
Accordingly, the Court recommends that Plaintiff's Motion for Leave to Amend Complaint be allowed.
Wherefore, the Court recommends that Defendant's Motion to Dismiss (d/e 5) be allowed in part and denied in part as specified in this report and recommendation. Sanctions should not be imposed. Also, the Court recommends that Plaintiff's Motion for Leave to Amend Complaint (d/e 9) be allowed.
The parties are advised that any objection to this Report and Recommendation must be filed in writing with the Clerk of the Court within ten working days after being served with a copy of this Report and Recommendation. See 28 U.S.C. § 636(b)(1). Failure to file a timely objection will constitute a waiver of objections on appeal. Video Views, Inc. v. Studio 21, Ltd., 797 F.2d 538, 539 (7th Cir. 1986). See also Local Rule 72.2.