Mcdowell v. Mercedes-Benz USA Llc Pension PlanBrief/Memorandum in SupportN.D. Tex.August 22, 2016{99963/A0222704.1} UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION ANTOINETTE MCDOWELL, Plaintiff v. MERCEDES-BENZ USA, LLC PENSION PLAN, Defendant. CIVIL ACTION NO.: 3:16-CV-02096 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) I. INTRODUCTION Plaintiff Antoinette McDowell (“McDowell”) filed a single count complaint against Defendant Mercedes-Benz USA, LLC Pension Plan (“Mercedes Plan”), seeking an award of benefits under a pension plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). In her Complaint, even assuming the truth of her allegations, McDowell has failed to allege an actionable claim, and her Complaint is subject to dismissal under Federal Rule of Civil Procedure 12(b)(6). McDowell has not alleged a breach of any plan terms, nor has she alleged facts that would allow her to recover on her claim. Her Complaint should therefore be dismissed.1 1 Contrary to the allegations of the Complaint, the terms of the Mercedes Plan do not entitle McDowell to the benefits that she seeks. It is not necessary to address this issue at this stage as her Complaint should be dismissed outright for failure to allege an actionable claim, preventing any need to reach the merits of her action. Defendant reserves the right to address the merits as and when appropriate during the course Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 1 of 13 PageID 25 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 2 {99963/A0222704.1} II. THE COMPLAINT In her Complaint, McDowell asks this Court to order payment to her of pension benefits under the Mercedes Plan, which she claims were denied to her after she left employment with Mercedes-Benz USA (“MBUSA”) to take a position with Daimler Trucks North American (“DTNA”). Complaint at pars. 5, 7, 11, 13. McDowell alleges that she sought pension benefits after leaving employment with MBUSA and beginning employment with DTNA, but that her claim for pension benefits was denied. Id. at pars. 11, 13. More specifically, McDowell alleges that she was an employee of MBUSA for approximately 29 years, and that in September 2015, she accepted a position with DTNA. Id. at par. 5. Although McDowell never expressly alleges it in the Complaint, she implies that, as an employee of MBUSA, she was a participant in the Mercedes Plan. According to McDowell’s Complaint, she believed that, if she accepted a position with DTNA, she could “begin collecting her retirement benefits under the [Mercedes] Plan.” Id. McDowell alleges that she believed this based on conversations she claims to have had with a coordinator for employee benefits at MBUSA, Lucy Marrero. Id. at pars 6-7. According to McDowell, she was told in December 2014 by Ms. Marrero that accepting employment with DTNA would not “impact” her benefits under the Mercedes Plan, id. at par. 6, and later, after taking the position with DTNA, was told that Ms. Marrero did not see any reason why McDowell could not collect a benefit under the Mercedes Plan and work for DTNA at the same time, id. at par. 7. However, McDowell admits in her Complaint that she was subsequently advised by both the legal department of MBUSA and the Manager of Compensation and Benefits for MBUSA of this litigation, and to establish at that time that McDowell’s claim fails under the terms of the Mercedes Plan. Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 2 of 13 PageID 26 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 3 {99963/A0222704.1} that, under the terms of the Mercedes Plan, McDowell could not collect benefits under the Mercedes Plan while employed in a new position with DTNA. Id. at pars. 8-9.2 McDowell alleges that this constituted a “re-interpretation” of the Mercedes Plan, id. at par. 10, but she does not allege that the operative terms of the Mercedes Plan in fact granted her benefits while employed by DTNA. In her Complaint, McDowell never alleges the terms of the Mercedes Plan, nor how such terms entitle her to the pension benefits that she seeks. With regard to the question of whether the terms of the Mercedes Plan entitled her to collect pension benefits while employed by DTNA, she alleges only that the Manager of Compensation and Benefits for MBUSA had “directed” her to a page in the Mercedes Plan that contained the definition of the phrase “Termination of Employment,” but that this definition allegedly “has no impact on Plaintiff’s situation because she retired.” Id. at par. 16. Other than that allegation, McDowell makes no allegations in her Complaint as to the terms of the Mercedes Plan and does not allege that the terms included in the Mercedes Plan, in fact, granted her the right to the pension benefits she seeks. Instead, she essentially alleges only two factual bases for her claim. First, she alleges that MBUSA changed its interpretation of the Mercedes Plan after advising her that she could collect pension benefits while employed by DTNA. Id. at par. 14. Second, she alleges that the denial of her claim for pension benefits was inconsistent with how her move from MBUSA to DTNA otherwise affected her employment status. Id. at par. 15. 2 McDowell, as discussed infra, never alleges that the terms of the Mercedes Plan actually granted her benefits while employed by DTNA, nor does she even allege the operative terms of the Mercedes Plan in her Complaint. However, those terms do not, in fact, allow McDowell to collect pension benefits under the Mercedes Plan while employed by DTNA and after leaving employment at MBUSA to accept employment at DTNA. Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 3 of 13 PageID 27 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 4 {99963/A0222704.1} III. The Complaint Should Be Dismissed Because McDowell Fails to Plead the Elements of a Claim Under ERISA for Denial of Benefits A. McDowell Fails to Plead the Necessary Elements of a Claim under ERISA §502(a)(1)(B) 1. McDowell Must Prove the Elements of a Claim Under ERISA §502(a)(1)(B) McDowell’s sole claim for relief in her Complaint seeks the award of retirement benefits under the Mercedes Plan. Complaint at pars. 13, 20. Although McDowell never clearly alleges the legal grounds for the claim, it can only be a claim under ERISA §502(a)(1)(B), which authorizes a participant to bring an action “to recover benefits due to him under the terms of his plan.” 29 U.S. C. § 1132. This section of ERISA “provides a contract based cause of action to participants and beneficiaries to recover benefits,” Estate of Bratton v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 215 F.3d 516, 523 (5th Cir. 2000), but only where a plaintiff establishes the existence of an ERISA governed plan, that the terms of the plan required payment of benefits, and that the failure to pay the benefits contradicted those terms, e.g. Singletary v. United Parcel Serv., Inc., 2016 WL 3629029, at *3 (5th Cir. July 6, 2016)(“to succeed under Section 1132(a)(1)(B), the claimant must show that he or she ‘qualif[ies] for the benefits provided in that plan.’”). At the outset of a case, a plaintiff must plead these necessary elements and, if a plaintiff fails to allege all of these elements of a claim for benefits under ERISA, the complaint is properly subject to dismissal. E.g. Mora v. Albertson's, L.L.C., 2015 WL 3447963, at *2–3 (W.D. Tex. May 28, 2015). Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 4 of 13 PageID 28 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 5 {99963/A0222704.1} 2. McDowell Fails to Sufficiently Allege that Plan Terms Were Violated The terms of a plan are of central importance to a claim for benefits under ERISA §502(a)(1)(B), and a plaintiff must therefore allege “what Plan terms were violated” to set forth a viable cause of action. Id. Merely alleging that benefits were denied is insufficient: instead, a plaintiff must explain as well “how she was entitled to those benefits under the Plan's terms” to allege a facially valid cause of action. Id. If a plaintiff fails to allege these facts in a complaint seeking benefits under an ERISA governed plan, the complaint must be dismissed. Id.; see also Barnette v. Sun Life Assurance Co. of Canada, 2016 WL 1384688, at *4 (S.D. Tex. Apr. 7, 2016)(“A plaintiff proceeding under §502(a)(1)(B) must identify the provision of the underlying ERISA plan on which it is based”)(collecting cases). Dismissal of a claim for benefits under ERISA in cases where a participant does not allege the relevant plan terms or explain how they were breached is effectively mandated by the United States Supreme Court’s holding in Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009), where the Court explained that: A complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. Id., 556 U.S at 678-79; see also, e.g., Int'l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 204 (5th Cir. 2016)(“only a complaint that states a plausible claim for relief [under Rule 8] survives a motion to dismiss [under Rule 12(b)(6)]”). Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 5 of 13 PageID 29 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 6 {99963/A0222704.1} When a plaintiff seeking benefits under ERISA §502(a)(1)(B) alleges only that benefits were denied, but not the reasons that they were instead allegedly owed under the terms of the plan at issue, the complaint demonstrates merely a “sheer possibility that the defendant has acted unlawfully” by denying benefits without establishing the facts necessary for a court to decide whether it is plausible that the plaintiff was entitled to the benefits. Under Ashcroft and its progeny, a complaint that seeks benefits but fails to allege the manner in which the plan terms were violated does not demonstrate that the plaintiff’s claim is plausible and must, therefore, be dismissed. In her Complaint in the instant action, McDowell does not refer to any plan terms at all, beyond alleging that the provision in the Mercedes Plan defining the phrase “Termination of Employment” does not, standing alone, preclude her claim for benefits under the Mercedes Plan. Complaint at par. 16. McDowell never alleges the terms in the Mercedes Plan that she claims entitled her to the benefits that she seeks, nor how or why they were violated. McDowell leaves entirely to speculation the question of what terms in the Mercedes Plan actually governed her claim for benefits, whether they entitled her to the benefits that she seeks in the Complaint, and whether the administrator of the Mercedes Plan violated the terms by denying her claim for benefits under the circumstances of the present matter. Under these circumstances, McDowell’s Complaint must be dismissed because it leaves the question of whether the terms of the Mercedes Plan were violated solely to the realm of conjecture. In Mora v. Albertson's, L.L.C., the United States District Court for the Western District of Texas dismissed a complaint seeking the recovery of benefits under ERISA §502(a)(1)(B) that, like McDowell’s Complaint, failed to allege the plan terms at issue or explain how those terms were violated. Mora v. Albertson's, L.L.C, 2015 WL 3447963, at *2–3 (W.D. Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 6 of 13 PageID 30 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 7 {99963/A0222704.1} Tex. May 28, 2015). The Court explained that because the plaintiff had “fail[ed] [in her complaint] to indicate what Plan terms were violated” and, despite identifying the benefits that were denied, “fail[ed] to indicate [in the complaint] how she was entitled to those benefits under the Plan's terms,” the complaint was “inadequate to state a claim for denial of benefits” and must be dismissed pursuant to Rule 12(b)(6). Id. at *2–3. The same is true of McDowell’s Complaint, and it should be dismissed as a result. 3. McDowell’s Complaint Is Not Saved From Dismissal By the Fact that She Pursued an Administrative Claim Before the Plan Administrator McDowell has failed to allege the relevant terms of the Mercedes Plan and also failed to explain in her Complaint how those plan terms were violated. Thus, McDowell’s claim does not satisfy the pleading standards under the Federal Rules of Civil Procedure and must be dismissed. This outcome is not altered by the fact that McDowell had pursued her claim through an internal claim process with the plan administrator prior to filing suit because the pleading requirements of the federal rules exist for the independent purpose of allowing her claim to be tested for plausibility before this Court at the outset of the litigation. As the Court in Mora v. Albertson's, L.L.C explained: Plaintiff contends Defendants have sufficient notice of her claim's content through Plaintiff's exercise of administrative remedies. This argument is not persuasive, as federal pleading standards require complaints to be facially sufficient. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” When a complaint contains insufficient facts to state a plausible claim to relief, it is irrelevant whether the parties have knowledge of unstated facts that would cure the defect. Even if Defendants are aware of the basis of Plaintiff's claim for denial of benefits, Plaintiff is still required to plead sufficient facts to make the claim plausible. Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 7 of 13 PageID 31 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 8 {99963/A0222704.1} Id. The Court, therefore, held that the “[p]laintiff ha[d] failed to adequately plead a claim for denial of benefits pursuant to section 1132(a)(1)(B),” regardless of the prior history of the claim before the plan administrator. Id. McDowell simply failed to plead the necessary elements of a cause of action for benefits under ERISA, and her Complaint must therefore be dismissed. The fact that she also presented her claim to the administrator prior to filing suit does not change this outcome. B. McDowell’s Complaint Is Not Saved From Dismissal By Her Allegations of Alleged Conflicting Statements About the Plan While McDowell fails to allege that the terms of the Mercedes Plan entitled her to retirement benefits or the manner in which such terms were violated, she does allege that Lucy Marrero made certain representations to her related to the question of whether retirement benefits would be available to her under the Mercedes Plan if she accepted a position with DTNA. Complaint at pars. 6-7. As the Complaint acknowledges, however, MBUSA, thereafter, provided McDowell with more specific information concerning her benefits under the Mercedes Plan and advised McDowell that “she was not eligible to collect benefits.” Id. at par. 9. McDowell alleges that, after these various conversations, she pursued a claim for benefits under the Mercedes Plan to the Pension Plan Committee,3 which was denied. Id. at par. 11. McDowell’s allegations of preliminary conversations with Ms. Marrero prior to the administrator denying her claim for retirement benefits does not rescue her Complaint from dismissal, nor is it a sufficient basis for her claim for benefits. The United States Court of Appeals for the Fifth Circuit has recognized “ERISA-estoppel” claims under certain circumstances, whereby statements about benefits can be relied upon in a claim brought to 3 The proper name of the administrator that considered McDowell’s claim for benefits is actually the Pension, Savings, and VEBA Plan Committee. Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 8 of 13 PageID 32 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 9 {99963/A0222704.1} recover plan benefits. See e.g. Nichols v. Alcatel USA, Inc., 532 F.3d 364, 374–75 (5th Cir. 2008).4 McDowell does not allege sufficient facts in her Complaint to sustain a theory of recovery based on the doctrine of “ERISA-estoppel.” Under the law of this Circuit, “[i]n order to establish an ERISA-estoppel claim, a plaintiff must prove: (1) a material misrepresentation, (2) reasonable and detrimental reliance upon that representation, and (3) extraordinary circumstances.” Nichols, 532 F.3d at 374–75. McDowell’s Complaint fails to allege facts sufficient to demonstrate the existence of any of these three elements. Initially, the Complaint lacks any factual allegations from which it can be inferred that any statements to McDowell were material misrepresentations for these purposes. A material misrepresentation is, by definition, one that contradicts a relevant term in the Mercedes Plan. As discussed above, the Complaint never sets forth the terms of the Mercedes Plan under which McDowell claims to be entitled to benefits. In addition, the Complaint never alleges that any such terms in the Mercedes Plan are contradicted by any of the statements depicted in the Complaint. As a result, there is no basis at all in the allegations of the Complaint for finding that any statements made to McDowell and alleged in her Complaint misrepresented the terms of the 4 McDowell is not clear in her Complaint whether she seeks to recover on a theory of “ERISA-estoppel” and, if so, whether under ERISA §502(a)(1)(B) or instead under the equitable relief provisions of the statute, ERISA §502(a)(3). Depending on the answers to these questions, McDowell may not be able to allege an actionable claim of “ERISA-estoppel” as a matter of law, no matter what facts she alleges. See, e.g., Singletary v. United Parcel Serv., Inc., 2016 WL 3629029, at *3 - 4 (5th Cir. July 6, 2016); Briscoe v. Energy Transfer Partners, LP, 2016 WL 1126494, at *8 (M.D. La. Mar. 18, 2016)(“Plaintiff is prohibited from asserting duplicative claims under section 1132(a)(3), because she had ‘adequate redress for disavowed claims through [her] right to bring suit pursuant to section 1132(a)(1)’”). For present purposes, the resolution of these issues is irrelevant, unnecessary and premature. McDowell fails to allege any of the factual elements necessary to make out a claim for “ERISA-estoppel” under any circumstances, and thus her Complaint is subject to dismissal. Mercedes Plan reserves the right to challenge at a later time the legal sufficiency of any such claim if and when Plaintiff properly pleads the factual foundation for a claim of “ERISA-estoppel.” Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 9 of 13 PageID 33 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 10 {99963/A0222704.1} Mercedes Plan. The Complaint, therefore, cannot plausibly be read as alleging material misrepresentations by the Defendant, which is an essential element of a claim seeking recovery based on “ERISA-estoppel.” Likewise, the Complaint fails to plausibly depict any reasonable, detrimental reliance by McDowell on any of the verbal statements alleged in the Complaint. As a matter of law, McDowell can only establish reasonable reliance by proving that the relevant terms in the Mercedes Plan were ambiguous because “there can be no ‘reasonable reliance on informal” statements made to her if those statements were contradicted by “unambiguous Plan terms.’” Id.; see also e.g. High v. E–Systems, Inc., 459 F.3d 573, 580 (5th Cir.2006) (“a ‘party's reliance can seldom, if ever, be reasonable or justifiable if it is inconsistent with the clear and unambiguous terms of plan documents.’”) To sustain a claim for benefits on a theory of “ERISA-estoppel,” McDowell must, therefore, prove that relevant terms of the Mercedes Plan were ambiguous and that she relied on statements that contradicted the administrator’s application of those ambiguous terms to her claim for benefits. E.g. Johnson v. United Healthcare of Texas, Inc., 2016 WL 929324, at *6 (W.D. Tex. Mar. 10, 2016). The Complaint does not identify any ambiguous terms in the Mercedes Plan, nor does the Complaint allege that McDowell relied upon any representations that contradicted any ambiguous terms in the Mercedes Plan. The Complaint, therefore, cannot be plausibly read as satisfying the element of reasonable reliance. Finally, the Complaint, as a matter of law, utterly fails to allege the type of “extraordinary circumstances” necessary to sustain a claim of “ERISA-estoppel.” As a matter of law, “[t]he mere failure to abide by plan terms or to fulfill written or oral assurances does not constitute extraordinary circumstances” for these purposes. Brown v. Aetna Life Ins. Co., 975 F. Supp. 2d 610, 626 (W.D. Tex. 2013). This, however, is all that McDowell alleges in the Complaint. She Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 10 of 13 PageID 34 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 11 {99963/A0222704.1} alleges only that benefits were denied her under the Mercedes Plan, and that she was under the impression from certain statements made by Lucy Marrero that she would receive pension benefits under the Mercedes Plan after starting employment with DTNA. Even if these allegations are all taken as true, they do not constitute the type of “extraordinary circumstances” necessary to sustain a claim for “ERISA-estoppel.” This element of such a cause of action is entirely absent from the Complaint. Accordingly, even if the Complaint is interpreted as seeking recovery not just under the express terms of the Mercedes Plan but also under the theory of “ERISA-estoppel,” it would still fail. The Complaint cannot be interpreted as alleging a plausible claim for recovery on this theory. IV. CONCLUSION McDowell fails to allege the necessary elements of a claim for benefits under ERISA. She fails to allege the textual support under the terms of the Mercedes Plan necessary to recover under the express terms of the plan document, and she fails to allege the elements necessary to recover benefits under the doctrine of “ERISA-estoppel” as an alternative means of recovery. This Court should, therefore, dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 11 of 13 PageID 35 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 12 {99963/A0222704.1} Respectfully submitted, /s/ Tate Hemingson Tate L. Hemingson State Bar No. 24064370 tate.hemingson@strasburger.com Strasburger & Price, LLP 901 Main Street, Suite 4400 Dallas, TX 75202-3794 (214) 651-4300 (214) 651-4330 Fax Of Counsel (Pro Hac Vice Admission To Be Sought) /s/ Stephen D. Rosenberg Stephen D. Rosenberg srosenberg@wagnerlawgroup.com Caroline M. Fiore cfiore@wagnerlawgroup.com The Wagner Law Group 99 Summer Street Boston, Massachusetts 02110 (617) 357-5200 ATTORNEYS FOR DEFENDANT MERCEDES-BENZ USA, LLC PENSION PLAN Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 12 of 13 PageID 36 DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COMPLAINT PURSUANT TO F.R.C.P. 12(b)(6) Page 13 {99963/A0222704.1} CERTIFICATE OF SERVICE This is to certify that on August 22, 2016, a true and correct copy of the foregoing was electronically served on the following parties receiving notice through the Court’s ECF system: Rob Ghio Law Office of R.S. Ghio, P.C. The Curtis Building 318 West Main St., Suite 100 Arlington, Texas 76010 rghio.rhinolaw@gmail.com /s/ Tate L. Hemingson Tate L. Hemingson Case 3:16-cv-02096-L Document 10 Filed 08/22/16 Page 13 of 13 PageID 37