Opinion
Civil Action No. 99-3595
August 28, 2001
ORDER AND REASONS
Before the Court is defendant Project Consulting Services, Inc.'s ("PCS") Motion for Partial Dismissal Pursuant to Rule 12(b)(1), 12 (b)(6) and 56. For the following reasons, defendant's Motion for Partial Dismissal is GRANTED in part and DENIED in part.
I. BACKGROUND
Densel M. Stewart, a Mississippi resident, signed a consultant agreement with Project Consulting Services, Inc. ("PCS") on April 24, 1997 to work as a pipeline inspector. He worked for PCS until December 3, 1997. During that time, Stewart claims he was an employee and worked more than forty hours a week but received no compensation for overtime, sickness, holidays, vacation, or medical and dental expenses. Stewart now seeks various benefits available to employees of PCS including benefits related to healthcare, time for leave, and pension and insurance plans.
Stewart contends that he served as an employee of PCS because he was under its supervision, direction, and control. Accordingly, Stewart claims that he and other similarly situated workers are entitled to participate in the various benefits programs offered by PCS to its employees. These programs include benefits for medical, insurance, unemployment, and workers compensation plans. PCS maintains that it hired Stewart as an independent contractor and at no time did he qualify as a employee entitled to employee benefits.
On March 30, 1998, PCS responded to inquiries from the Mississippi Employment Security Commission ("MIESC") and the Louisiana Department of Labor, Office of Employment Security ("OES"), concerning Stewart's employment status. PCS explained that "Stewart was hired as an independent contractor to provide visual inspection of oil and gas pipeline related material for a specific job." Def.'s Mot. Dismiss. Moreover, PCS communicated this information to a tax auditor of OES in April or May of 1998. Following these correspondences, PCS indicates that it has not received any further communications from MESC or OES regarding Stewart's employment status.
Stewart raises several causes of action in his complaint. He brings federal claims under the Employment Retirement Insurance Security Act ("ERISA"), 29 U.S.C. § 1132, the Consolidated Omnibus Budget reconciliation Act ("COBRA"), 29 U.S.C. § 1161, the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, and 26 U.S.C. § 6051 (a) concerning the Social Security Administration. In addition, Stewart raises pendant state law claims for unemployment benefits, workers compensation benefits, and fraud. Stewart also amended his complaint to bring each of his complaints on behalf of a purported class of similarly situated workers who were allegedly wrongly classified as independent contractors. PCS moves for partial dismissal of plaintiff's claims pursuant to Rules 12(b)(1), 12(b)(6), and 56 of the Federal Rules of Civil Procedure.
II. ANALYSIS
PCS moves to dismiss Stewart's claims brought under ERISA, COBRA, social security, unemployment compensation, workers compensation and fraud related statutes. PCS contends that Stewart's claims are brought untimely and therefore should be dismissed.
PCS does not seek to dismiss Stewart's claims under the ELSA.
The Federal Rules of Civil Procedure permit a defendant to seek dismissal of a complaint based on the "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). When considering a motion to dismiss under Rule 12(b)(6), a district court should construe the complaint liberally in favor of the plaintiff, assuming all factual allegations to be true. See Leleux v. United States, 178 F.3d 750, 754 (5th Cir. 1999). A complaint may not be dismissed "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." Id. (quoting Lowrey v. Texas A M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997)).
To the extent the defendant also raises a motion for summary judgment, it will be granted only if the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits show that there is no genuine issue as to any material fact and that the defendant is entitled to a judgment as a matter of law. Fed.R.Civ. p. 56.
A. ERISA
PCS argues that Stewart's ERISA claim should be dismissed because it is prescribed. PCS characterizes Stewart's claim as a cause of action under 29 U.S.C. § 1140 for discrimination or interference with rights and benefits afforded by an ERISA plan. PCS further explains that § 1140 lacks .a prescriptive period and therefore should be governed by the most analogous state statute of limitations governing torts, wrongful discharge, and/or employment discrimination. Because Louisiana provides a one year prescriptive period for all delictual actions, PCS insists that Stewart's ERISA claims is prescribed. See Def.'s Mot. to Dismiss at 5-6.
PCS contends that Stewart disputes his right to participate in an ERISA plan rather than the failure of PCS to pay specific benefits.
Stewart responds that his ERISA claim arises under both § 1132 and § 1140 because PCS misclassified him as an independent contractor to prevent him from taking advantage of the benefits of its ERISA plan. Stewart, therefore, explains his cause of action as a denial of benefits under § 1132 which is subject to a ten year prescriptive period. See Kennedy v. Electricians Pension Plan, 954 F.2d 1116, 1120 (5th Cir. 1992) (classifying § I 132(a)(1)(B) claim for ERISA benefits as a personal action subject to a ten year prescriptive period). To the extent Stewart also raises a claim under § 1140, however, that claim is subject to a one-year prescriptive period and is prescribed. See Nelson v. Shoney's Inc., No. Civ.A. 96-2199, 1997 WL 567957, at *3 (E.D. La. Sept. 10, 1997) (holding that a one-year prescriptive period applies to § 1140 claims in Louisiana).
PCS further argues that Stewart's claim under § 1132(a)(1)(B) should be dismissed because it is derivative of the § 1140 claim. PCS cites Morris v. Winnebago Industries, Inc., 950 F. Supp. 918 (N.D. Ia. 1996), to support the proposition that Stewart must establish a § 1140 claim before raising a claim pursuant to § 1132(a)(1)(B). In Morris, the plaintiff's employee status was not disputed. The issue in the present case, however, concerns whether Stewart was an employee entitled to any ERISA. Therefore, dismissal of his § 1132(a)(1)(B) claim is not yet appropriate.
B. COBRA
PCS similarly argues that Stewart's ERISA claim should be dismissed because it is prescribed. COBRA does not contain a statute of limitations, and therefore courts are required to borrow the most applicable statute of limitations. See Myers v. King's Daughters Clinic, 912 F. Supp. 233, 237 (W.D. Tex. 1996). Because COBRA provides a right to the continuation of ERISA coverage after termination, Stewart's COBRA claim is derivative of his ERISA claim. See Wolf v. Coca-Cola Co., 200 F.3d 1337, 1342 (1th Cir. 2000). Accordingly, the statute of limitations that permits Stewart's § 1132 ERISA claim also permits his claim for benefits under COBRA. See Allen v. Loyola University, 1996 U.S. Dist. LEXIS 2433 (E.D. La. 1996) (applying statute of limitations period for ERISA to COBRA claim).
C. Social Security/FICA
Defendant also seeks dismissal of plaintiff's claims for failing to make proper social security and Federal Insurance Contributions Act ("FICA") withholdings. As a taxing statute, FICA is designed to fund the Social Security program established by Congress. See Salazar v. Brown, 940 F. Supp. 160, 162 (W.D. Mich. 1996). Although employers must collect FICA tax on an employee's wages, a worker's entitlement to social security benefits does not depend on the actual payment of FICA taxes. See id. PICA does not contain an express right of action upon which an employee may sue his employer. See id. at 164.
FICA, however, is designed to provide benefits to workers in relationship to their salaries. See Sanchez v. Overmyer, 845 F. Supp. 1178, 1181 (N.D. Ohio 1993). The Sanchez court, examining the factors established by the Supreme Court in Cort v. Ash, found that an implied private right under FICA exists to require an employer to correct its share of FICA contributions. See id. In Ford v. Troyer, this Court found the Sanchez analysis applicable for an employee's claim that he was improperly classified as an independent contractor. See 25 F. Supp.2d 723, 726 (E.D. La. 1998). Because the plaintiff in the present case presents factual and legal claims substantially similar to Ford, this Court finds no reason to divert from the conclusion in Ford that he may raise an implied right of action under PICA.
D. Unemployment and Worker's Compensation Benefits
PCS argues that Stewart's unemployment and worker's compensation benefits claims should be dismissed because Stewart has failed to pursue the proper state administrative remedies. Stewart does not oppose defendant's assertion and fails to explain whether he in fact has made or pursued such claims. Because this Court is not in a position to review possible unemployment and worker's compensation benefits claims made by plaintiff before they proceed through the state's administrative procedures, these claims are appropriate for dismissal. See La . Rev. Stat. § 23:1622 et seq.; § 23:1301.
E. Fraud
PCS explains that Stewart's claim of fraud should be dismissed because it is prescribed. Plaintiff claims that he unknowingly relied upon defendant's fraudulent and negligent misrepresentations in accepting its employment contract. Claims of fraud and negligent misrepresentation, however, are restricted to a one year prescriptive period. See La. Civ. C. art. 3492; National Council on Compensation Ins. v, Quixx Temp. Services, Inc., 665 So.2d 120 (La.App. 4 Cir. 1995). Stewart contends that the one year prescriptive period should be tolled because he was prevented from raising his cause of action and because issues of fact exist as to whether defendant acted fraudulently. The crux of this dispute, however, is whether plaintiff may be characterized under the law as an employee rather than an independent contractor. Whether or not defendant made misrepresentations to plaintiff is irrelevant to the facts of plaintiff's actual status in working for defendant. If the facts support a view that plaintiff served as an employee rather than an independent contractor, then plaintiff will be entitled to relief regardless of defendant's earlier characterizations to plaintiff.
III. CONCLUSION
For the foregoing reasons, defendant's motion to dismiss is GRANTED in part and DENIED in part. Defendant's motion to dismiss is GRANTED with respect to plaintiff's claims for unemployment compensation, worker's compensation, and fraud. Defendant's motion to dismiss is DENIED with respect to plaintiff's claims under ERISA, COBRA, and PICA.