Deleon v. U.S. Airways, Inc. ( 2013 )

SU|\/||\/|ARY MEMORANDUM AND OPIN|ON;
NOT |NTENDED FOR PUBL|CAT|ON |N THE OFF|C|AL REPORTERS.
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
Minerva DeLeon, )
)
Plaintiff, )
)
v. ) Civil Action No. l2-cv-0503 (RLW)
)
)
U.S. Airways, Inc. et al., )
)
Defendants. )
MEMORANDUM OPINI0N1
Plaintiff Minerva DeLeon, a retiree of US Air, Inc., brought this action to challenge
defendant Pension Benefit Guaranty Corporation’s ("PBGC") determination that she is entitled
to only $79.67 in monthly retirement benefits after 20 years of service. Plaintiff sues PBGC in
Count l of the Second Amended Complaint [Dkt. # 60] ("Am. Compl.") for "Failure to Properly
Calculate Monthly Retirement Benef\ts," and in Count ll for "Breach of Fiduciary Duty." Am.
Compl. at 6, 8. PBGC moves pursuant to Fed. R. Civ. P. l2(b)(6) to dismiss Count II ofthe
amended complaint and to strike Plaintiff’ s request for attorney’s fees. Def. PBGC’s Mot. to
' This unpublished memorandum opinion is intended solely to inform the parties and any
reviewing court of the basis for the instant ruling, or alternatively, to assist in any potential future
analysis of the res judicata, law of the case, or preclusive effect of the ruling. The Court has
designated this opinion as "not intended for publication," but this Court cannot prevent or
prohibit the publication of this opinion in the various and sundry electronic and legal databases
(as it is a public document), and this Court cannot prevent or prohibit the citation ofthis opinion
by counsel. Cf Fed. R. App. P. 32.l. Nonetheless, as stated in the operational handbook adopted
by our Court of Appeals, "counsel are reminded that the Court's decision to issue an unpublished
disposition means that the Court sees no precedential value in that disposition." D.C. Circuit
Handbook of Practice and internal Procedures 43 (2011).
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Dismiss Count ll ofthe Second Am. Compl. and to Strike Pl.’s Request for Att0rney’s Fees
[Dkt. # 62]. Upon consideration of the parties’ submissions, the Court will grant Defendant’s
motion in its entirety.
BACKGROUND
The basic facts are as follows. Plaintiff worked actively at US Air from July 13, 1987
until February 25, l994, when she was placed on medical leave because of a work-related back
injury she suffered on July 7, 1993. Am. Compl. 1111 6-13. On january 5, l995, Plaintiff’s work
status was changed to "medical leave due to Social Security disability," and Plaintiff was found
disabled by the Social Security Administration as ofNovember l, 1995. Ia'. 1[1] 14-l5. From the
beginning of her employment, Plaintiff participated in the Retirement Plan for Certain
Employees of US Airways, lnc. ("the Plan"). "On August l l, 2002, U.S. Airways Group, lnc.
and seven subsidiaries (collectively, "U.S. Airways") filed voluntary petitions in the Bankruptcy
Court for the Eastern District of Virginia . . . .," which were subsequently approved. Boz``vin v.
U.S. Airways, Inc., 446 F.3d l48, 150 (D.C. Cir. 2006). The Plan in which Plaintiff participated
was terminated on January l7, 2005, "and PBGC became trustee of the Plan on February l,
2005, pursuant to an agreement between PBGC and US Airways."z Def.’s Mem. of P. & A.
[Dkt. # 62-l] at 2; see Boivin, 446 F.3d at 150 (recounting US Airways’ termination of its Pilots’
Retirement lncome Plan under Title lV of the Employee Retirement lncome Security Act of
1974 (“ERisA")).
2 As Defendant explains: "When a pension plan terminates with insufficient assets to pay all
benefits earned by participants, PBGC becomes trustee of the plan [and] pays benefits to
participants and beneficiaries, subject to statutory limitations . . . . PBGC determines
participants’ benefits in accordance with the terms of the pension plan, Title lV of ERISA, and
PBGC’s regulations." Def.’s Mem. of P. & A. at 2. PBGC is a wholly owned United States
corporation "established within the Department of Labor." 29 U.S.C. § l302(a).
2
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Plaintiff alleges the following. ln l994, "US Air issued to [her] a Corporate Policy
Manual stating ‘[e]mployees awarded Social Security Disability Benefits are eligible to continue
to accrue retirement plan credited service[;] [t]hus, retirement benefits continued to accrue to
disabled employees through at least l994." Am. Compl. 1 l6. "As early as 1996, [Plaintiff] was
in communication with US Air about her disability status and how it would affect her retirement
options," but received no response. Id. 111 19-20. Plaintiff "had numerous exchanges with the
Defendant and her former employer through which she received incorrect and conflicting
information concerning her benefits in the months and years leading up to her retirement in
2008." Am Compl. 11 18. Plaintiff"submitted to Defendant an informational report which
informed Defendant of her age, 63 at the time, and the fact that she was on a medical leave of
absence from US Air." Id. 11 21. ln December 2005, Plaintiff contacted PBGC "about the
possibility of retiring and drawing on her benefits under the CE Plan." Ia’. 11 22. On January 25,
2006, plaintiff applied with PBGC for benefits but withdrew her application "[d]ue to confusion
over the effect of pending related litigation on her retirement benefits." Id. 11 23. ln 2007,
plaintiff "made multiple phone calls to Defendant, questioning specifically the impact of her
disability status on her eligibility to obtain retirement benef``its." Id. 11 24. She received
"additional forms." la’. 11 25.
Plaintiff further alleges that her “attempts to comply with Defendant’s processes were
met with additional information requests," that her "monthly benefits were ‘estimated’ no less
than ten times, producing ten different benefit estimates," and that she "was variously told that
she either retired or was terminated from US Air on at least four different dates between l99l
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and 2005." Id. 11 21-28. Plaintiff "was also advised that her status as an active employee in
2007 made [her] ineligible for retroactive retirement benefits." Id. 1 28.
On February 26, 2008, Plaintiff reapplied for benefits and included a letter questioning
the accuracy of PBGC’s "most recent benefit estimate." Id. 1 30. "ln the ensuing months,"
Plaintiff "received multiple form letters and solicitations for documents already in Defendant’s
possession, but no response to her real concern, the incorrect computation of her benef``its." Id. 1
31.
PBGC eventually paid P1aintiff$7l.2l per month, see Def.’s Mem. ofP. & A. at 2, but
increased that amount to the current monthly payment of $79.67. Am. Compl. 1 34. Plaintiff
alleges that she waited "over a year and a half and subsist[ed] on dramatically reduced benef``its"
only to be advised in September 2009 "that Defendant’s final computation of her benefit was
$79.67 per month." Id. "As part of its determination, PBGC included a statement that ‘the Date
of Benefit Freeze is the date the plan ceased accruals, for this plan, 12/31/1991." Ia’. 1 35. "On
that basis," Plaintiff alleges, Defendant "incorrectly credited [Plaintiff] with only 4 years of
service and calculated her Final Average Monthly Earnings as $l,455.74." Id.
On December 18, 2009, Plaintiff appealed PBGC’s determination to the Appeals Board,
claiming that PBGC failed to credit her with 20 years’ service and improperly calculated her
average earnings. Id. 1 36. The Appeals Board upheld PBGC’s determination on December 8,
2010. Ia’. 1 37. Plaintiff filed suit on March 24, 2011, in the Western District of Texas, which
transferred the case here on March 29, 2012.
SU|V|MARY MEMORANDUM AND OP|N|ON;
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LEGAL STANDARD
"To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient
factual matter, acceptable as true, to state a claim to relief that is plausible on its face." Anderson
v, Hola’er, 691 F. Supp. 2d 57, 61 (D.D.C. 2010) (brackets omitted) (quoting Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)) (other citation and internal quotation marks omitted). A court
considering a Rule 12(b)(6) motion must construe the complaint in the light most favorable to
the plaintiff and must accept as true all reasonable factual inferences drawn from well-pleaded
factual allegations. In re United Mz``ne Workers of Am. Employee Benefit Plans Litz``g., 854 F.
Supp. 914, 915 (D.D.C. l994). However, where the well-pleaded facts in the complaint do not
permit a court, drawing on its judicial experience and common sense, to infer more than the
"mere possibility of misconduct, the complaint has alleged -- but [ ] has not shown -- that the
pleader is entitled to relief." Iqbal, 556 U.S. at 679 (citation and internal quotation marks
omitted).
ln ruling on a Rule 12(b)(6) motion to dismiss, the Court may consider "any documents
either attached to or incorporated in the complaint . . . without converting the motion to dismiss
into one for summaryjudgment." Baker v. Henderson, 150 F. Supp. 2d l3, 15 (D.D.C. 2001)
(citations omitted). This includes documents that are "referred to in the complaint and [ ] central
to the plaintiffs claim." Solomon v. Off ofthe Architect ofthe Capitol, 539 F. Supp. 2d 347,
349-50 (D.D.C. 2008) (citing Vanover v. Hantman, 77 F. Supp. 2d 91, 98 (D.D.C. 1999), aff'd,
38 Fed. Appx. 4 (D.C. Cir. 2002)) (internal citations omitted). "lt is well understood in this
Circuit that when a plaintiff files an opposition to a dispositive motion and addresses only certain
arguments raised by the defendant, a court may treat those arguments that the plaintiff failed to
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address as conceded." Hopkins v. Women's Dz'v., General Ba’. of Global Ministries, 284 F. Supp.
2d 15, 25 (D.D.C. 2003), ajj"d 98 Fed.Appx. 8 (D.C. Cir. 2004).
ANALYSIS
"To state a claim under ERlSA § 502(a)(3), Plaintiff must demonstrate that Defendant
acted in a fiduciary capacity." Soland v. Ge0. Wash. Um``v., Civ. No. 10-2034, --- F. Supp. 2d ---,
2013 WL 66219, at *2 (D.D.C. Jan. 7, 2013). The ERlSA statute states that "a person is a
fiduciary with respect to a plan to the extent he exercises any discretionary authority or
discretionary control respecting management of such plan . . . or he has any discretionary
authority or discretionary responsibility in the administration of such plan." 29 U.S.C. §
1002(21)(A). "The Supreme Court has recognized that breach of fiduciary duty under ERISA
can be an actionable claim." Soland, 2013 WL 66219, at *2 (citing Varity Corp, v. Howe, 516
U.S. 489 (1996)). Furthermore, Defendant acknowledges that PBGC, as trustee of a pension
plan, may be sued "for ‘appropriate equitable relief pursuant to 29 U.S.C. § 1303(f)(1)," but it
"reserves the right to argue . . . that it is not a fiduciary within the meaning of the statute." Def.’s
Mem. ofP. & A. at 6-7, nn. 4, 5. For purposes of resolving the instant motion to dismiss, the
Court accepts as true Plaintiff’s allegation that PBGC is a fiduciary.
"ERISA requires a ‘fiduciary’ to ‘discharge his duties with respect to a plan solely in the
interest ofthe participants and beneficiaries.’ " Varz'ly Corp., 516 U.S. at 506 (quoting 29 U.S.C.
§ 1104(a)(1)). A claim of breach of such duties typically depends on some form of deception or
material misrepresentation by the fiduciary. See z'a’. (posing the "question [as] whether Varity's
deception violated ERlSA-imposed fiduciary obligations . . . . As other courts have held, lying is
inconsistent with the duty of loyalty owed by all fiduciaries and codified in [§ l104(a)(l)] of
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ERlSA.") (citations, internal quotation marks, and alterations omitted). Furthermore, there is "a
line of cases holding that . . . in the ERlSA context, the breach must be willful or involve bad
faith conduct," Boivin v. USAirways, Inc., 297 F. Supp. 2d l10, 117 (D.D.C. 2003) (citations
omitted), neither of which is pled here.
Under Count ll of the Amended Complaint, Plaintiff alleges the following:
0 [Her] Normal Retirement Date, after which participants are entitled to full
retirement benefits, was May 1, 2007. Am. Compl. 1 54.
0 [T]he CE Plan provides a number of early retirement options, including
provisions for early unreduced benefits options starting at age 62. Id. 1 55.
0 [She] did not begin receiving retirement benefits under the plan until February 1,
2008. Id. 1 56
0 Despite her numerous communications with US Air and Defendant concerning
her eligibility to retire and benefit options, no representative of either . . . clearly
communicated . . . when she would be entitled to retire or that early retirement
options could be available to her that would not reduce her benefit. Am. Compl.
1 57.
0 Defendant and US Air provided [Plaintiff] a stream of incorrect and conflicting
information, over a period of years which served only to further complicate her
task of making reasoned decisions [about] her retirement options. Id. 1 58.
0 Defendant breached its fiduciary duties to [Plaintiff] by responding to her
inquiries with material misrepresentations on which [she] relied in making
retirement decisions. Ia’. 1 60.
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Plaintiff then concludes that because her options were not "clearly explained," she "lost the
opportunity to elect early retirement or even standard retirement at her ‘Normal Retirement
Date,’ " which costs her "economic loss of manylmonths of retirement benefits." Ia'. 11 61-62.
ln her opposition to the instant motion, Plaintiff recounts specific questions she directed
to US Air before defendant became trustee of the Plan, her "contact[]" generally with PBGC in
December 2005, and her "multiple phone calls" to PBGC in 2007 "questioning specifically the
impact of her disability status on her eligibility to obtain retirement benefits." See Pl’s Opp’n at
4 (citing Second Am. Compl. 11 19, 22, 24). Plaintiff reiterates that "PBGC either failed to
respond to [her] inquiries or responded with incorrect information . . . .," but she does not specify
the "incorrect information" PBGC supplied and points only to the unhelpful allegation in the
complaint that "[t]o the extent [ ] Defendant responded to [her] inquiries, it was by mailing Ms.
DeLeon additional forms."3 Ia’. at 4 (quoting Second Am. Compl. 1 25).
3 Plaintiff also alleges for the first time in her opposition that Defendant breached its fiduciary
duty by "failing to adequately investigate the basis for the alleged freeze of the CE Plan in
1991." Pl.’s Opp’n at 3. Since this theory ofPlaintiff``s breach claim is predicated on facts that
were not alleged in the amended complaint, it is "clearly impermissible" for Plaintiff to attempt
to amend the complaint by inserting a new claim at this juncture. Calvetli v. Antclw", 346 F.
Supp. 2d 92, 107 (D.D.C. 2004) (citing cases). Even ifconsidered, the claim would likely be
dismissed without prejudice because Plaintiff does not allege that she exhausted this claim
administratively by presenting it first to PBGC, See Boivz``n v. U.S. Airways, Inc,, 446 F.3d 148,
154 (D.C Cir. 2006) ("[B]arring exceptional circumstances, parties aggrieved by decisions of
pension plan administrators [here PBGC] must exhaust [their available] administrative remedies .
. . before challenging those decisions in court under ERlSA.") (citation and internal quotation
marks omitted). And "[t]he Court's review of a benefits determination ‘may only be based on the
record available to the administrator or fiduciary at the time the decision was made.’ " Marcin v.
Reli'ance StandardLzfe Ins. Co., Civ. No. 10-1816, --- F. Supp. 2d ---, 2012 WL 4466785, at *7
(D.D.C. Sept. 28, 2012) (quoting Crummett v. Metro. Lzfe Ins. C0., Civ. No. 06»01450, 2007 WL
2071704, at *3 (D.D.C. July 16, 2007)). Furthermore, while not yet decided by the District of
Columbia Circuit, "[c]ourts in this Circuit have generally followed the view of the majority of
circuits that a breach of fiduciary claim under 29 U.S.C. § 1l32(a)(3) cannot stand when a
plaintiff has an adequate remedy for her injuries under § 1132(a)(1)(B)" to recover benefits or
8
SUl\/|MARY MEMORANDUM AND OP|N|ON;
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The Court agrees that Plaintiff’s generalized allegations cannot sustain a fiduciary breach
claim against PBGC. See Def.’s P & A. at 7-8; cf Soland, 2013 WL 66219, at *3 (finding claim
stated where former employer allegedly failed to disclose to plaintiff information about a
Voluntary Separation lncentive Program under "serious consideration at the time of the parties’
ongoing [separation] discussions"). Plaintiff states that Defendant made "material
misrepresentations," but she has not provided any "factual enhancement" or elaboration. Iqbal,
556 U.S. at 678. Simply put, Plaintiff has not identified one statement allegedly made by PBGC
to begin the inquiry of whether a material misrepresentation occurred. Even at this pleading
stage, Plaintiff must offer more than "naked assertions" and "labels and conclusions" to survive a
motion to dismiss. Id. (citations and internal quotation marks omitted). Plaintiff’s allegations
convey nothing more than her frustration with obtaining a final decision about her retirement
benefits, the correctness of which is the subject of the remaining Count 1 of the amended
complaint. Hence, the motion to dismiss Count ll will be granted.
Plaintiff has not opposed and, thus, has conceded Defendant’s argument for striking
Plaintiff s request for attorney’s fees. See Def.’s Mem. of P. & A. at 10-1 l. Defendant correctly
asserts that attorney’s fees are not available in civil actions against PBGC. See Stephens v. U.S.
Airways Group, Inc., 644 F.3d 437, 441-42 (D.C. Cir. 2011) (ERISA "does not authorize
attorney's fees for actions against the PBGC . . . .") (citing 29 U.S.C. § 1303(f)).
enforce rights under the plan. Zalduondo v. Aetna Life Ins. Co., 845 F. Supp. 2d 146, 155
(D.D.C. 2012) (citing cases).
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For the foregoing reasons, defendant's motion to dismiss Count ll and to strike plaintiffs
request for attorney's fees is granted. A separate Order accompanies this Memorandum Opinion.
Digita||y signed by Judge
Robert L Wi|l