Virtue v. International Brotherhood of Teamsters Retirement and Family Protection Plan ( 2012 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
DANIEL A. VIRTUE,
Plaintiff,
v. Civil Action No. 12-516 (JEB)
INTERNATIONAL BROTHERHOOD OF
TEAMSTERS RETIREMENT & FAMILY
PROTECTION PLAN, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff Daniel Virtue has brought this action against the International Brotherhood of
Teamsters Retirement and Family Protection Plan and the IBT itself relating to his pension
eligibility. He now moves to amend the Complaint to join members of the Administrative
Committee of the Plan as additional defendants. Current Defendants argue that the proposed
amended Complaint is futile both because it fails to allege precisely what the Administrative
Committee has done wrong and because the Committee is not a necessary party. Believing the
proposed Amended Complaint is not futile, the Court will grant the Motion.
I. Legal Standard
The proper procedural vehicle for adding defendants is by seeking leave to file an
amended complaint under Federal Rule of Civil Procedure 15. See United States ex rel.
Precision Co. v. Koch Indus., Inc., 31 F.3d 1015, 1018–19 (10th Cir. 1994) (“A motion to add a
party is governed by Fed. R. Civ. P. 15(a).”). A plaintiff may amend his complaint once as a
matter of course within 21 days of serving it or within 21 days of the filing of a responsive
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pleading. Fed. R. Civ. P. 15(a)(1). Otherwise, a plaintiff must seek consent from the defendant
or leave from the Court. The latter “should [be] freely give[n] . . . when justice so requires.”
Fed. R. Civ. P. 15(a)(2). In deciding whether to grant leave to file an amended complaint, courts
may consider “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, futility of amendment, etc.” Foman v. Davis,
371 U.S. 178, 182 (1962). In this Circuit, “it is an abuse of discretion to deny leave to amend
unless there is sufficient reason.” Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996).
Furthermore, under Rule 15, “the non-movant generally carries the burden in persuading the
court to deny leave to amend.” Nwachukwu v. Karl, 222 F.R.D. 208, 211 (D.D.C. 2004).
It is clear, however, that amendment should not be permitted if it would be futile. In
other words, if the proposed amendment would still render the complaint deficient, courts need
not grant leave. See In re Interbank Funding Corp. Securities Litigation, 629 F.3d 213, 218
(D.C. Cir. 2010) (“[A] district court may properly deny a motion to amend if the amended
pleading would not survive a motion to dismiss.”) (citing Foman, 371 U.S. at 182, for
proposition that “‘futility of amendment’ is permissible justification for denying Rule 15(a)
motion”); James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C. Cir. 1996) (“Courts may
deny a motion to amend a complaint as futile . . . if the proposed claim would not survive a
motion to dismiss.”).
II. Analysis
Defendants contend that Plaintiff’s Motion to Amend is futile and should thus be denied
for three reasons. The Court will discuss each in turn. First, Defendants claim that Plaintiff has
failed to allege how the members of the Administrative Committee are liable. Although the
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proposed amended Complaint could have been worded more precisely so as to make clear what
the Administrative Committee members themselves have done, the Court finds the pleading
sufficient to give notice to those members of the claims made against them.
Title 29 U.S.C. § 1054(h) states that “[a]n applicable pension plan may not be amended
so as to provide for a significant reduction in the rate of future benefit accrual unless the plan
administrator provides the notice described in paragraph (2) to each applicable individual . . . .”
(emphasis added). This section thus sets forth what Plaintiff must allege in order to state a claim
against the Administrative Committee – namely, that the Administrative Committee or its
members failed to provide the required notice.
Plaintiff’s proposed amended Complaint alleges that “[n]either the IBT nor the Plan sent
any notice of the reduction of benefits to such affected employees as, at a minimum, would be
required under ERISA section 204(h), 29 U.S.C. § 1054(h).” See Mot., Attach. 2 (proposed
amended Complaint), ¶ 18. Although Plaintiff does not specifically allege that the members of
the Administrative Committee failed to provide notice, the allegation against those members is
implied in the language of his proposed amended Complaint. In addition to naming the members
of the Administrative Committee, Plaintiff defines the Committee as “the administrator [of the
Plan] within the meaning of ERISA section 3(16)(A), 29 U.S.C. § 1002(16)(A).” Id., ¶ 5. As a
result, the Court agrees with Plaintiff’s contention that “the Plan can only operate through
individuals and the members of the Administrative Committee are the individuals vested with
that authority.” Reply at 3. Because the Administrative Committee, as the plan administrator,
failed to provide notice of the Amendment, as required by § 1054(h), Plaintiff has sufficiently
alleged how the Administrative Committee is liable.
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Second, Defendants claim that the amended Complaint is defective because it fails to
establish that the Administrative Committee is subject to a cause of action. See Opp. at 4.
Plaintiff, however, asserts his claims against Defendants pursuant to § 1132(a)(3), which
provides for a cause of action for any ERISA violation, including violations of § 1054(h). See
Proposed Amended Complaint, ¶¶ 16, 20, 22. As noted above, the Administrative Committee, as
the plan administrator, is the specific body capable of violating § 1054(h). In addition,
Defendants provide no authority that members of the Administrative Committee are not properly
named as defendants in such a suit. Plaintiff has, as a result, sufficiently established that the
Administrative Committee is subject to a cause of action.
Finally, Defendants argue that amending the Complaint is unnecessary because Plaintiff
already has a claim against existing parties that would afford him complete relief if he prevails.
See Opp. at 5. The standard for assessing whether amendment would be futile, however, is
whether it would survive a motion to dismiss, not whether Plaintiff could obtain complete relief
without it. See Interbank Funding Corp., 629 F.3d at 218 (“[A] district court may properly deny
a motion to amend if the amended pleading would not survive a motion to dismiss.”); James
Madison Ltd, 82 F.3d at 1099 (“Courts may deny a motion to amend a complaint as futile . . . if
the proposed claim would not survive a motion to dismiss.”).
As noted above, Plaintiff has sufficiently alleged how the members of the Administrative
Committee are liable and that those members are subject to a cause of action. As such, the
proposed amended Complaint states a claim to relief “that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (internal quotation omitted). Defendants’ argument that existing
parties could afford Plaintiff complete relief if he prevails may have merit, but it is not
dispositive at this juncture. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) (“a
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well-pleaded complaint may proceed even if it appears that … recovery is very remote and
unlikely”) (internal quotation omitted). At this early stage, therefore, Defendants have not met
their burden in persuading the Court to deny leave because they have not established that
amendment would be futile.
III. Conclusion
For the foregoing reasons, the Court ORDERS that:
1. Plaintiff’s Motion is GRANTED;
2. The proposed amended Complaint is deemed FILED; and
3. Defendants shall file a responsive pleading after service has been effected.
IT IS SO ORDERED.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: September 27, 2012
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