Clark v. Janssen Pharmaceuticals, Inc.

Not for Publication in West's Federal Reporter
United States Court of Appeals
For the First Circuit
No. 14-1701
MICHELE CLARK,
Plaintiff-Appellant,
v.
JANSSEN PHARMACEUTICALS, INC,
JOHNSON & JOHNSON,
THE REED GROUP,
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
Defendant-Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Nancy Torresen, U.S. District Judge]
Before
Barron, Circuit Judge,
Souter,* Associate Justice,
and Lipez, Circuit Judge.
Julie D. Farr, with whom Arthur J. Greif and GILBERT & GREIF,
P.A. were on brief, for appellant.
David C. Henderson, with whom Rebecca H. Gallup and Nutter
McClennen & Fish LLP were on brief, for appellees Janssen
Pharmaceuticals, Johnson & Johnson, and Reed Group.
Amanda A. Sonneborn, with whom Samuel M. Schwartz-Fenwick,
SEYFARTH SHAW LLP, Byrne Joseph Decker, and PIERCE ATWOOD LLP were
on brief, for appellee Prudential.
*
Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
April 8, 2015
SOUTER, Associate Justice. Michele Clark claims short and
long term disability benefits under plans provided by her employer,
Janssen Pharmaceuticals, Inc. Janssen is wholly owned by Johnson
& Johnson, and Reed Group is their agent for responding to short
term disability claims under Janssen's self-funded plan. The long
term disability plan is both underwritten and administered by
Prudential Insurance Company. Reed and Prudential rejected Clark's
benefit claims, which were denied as well through her successive
administrative appeals. Clark then brought this action for
benefits under Maine law of contract against Janssen, Johnson &
Johnson, and Reed, and under the Employee Retirement Income
Security Act of 1974 (ERISA) against Prudential. The district
court dismissed under Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim subject to relief, and we affirm.
The complaint is fairly read to allege these facts. On July
29, 2011, Janssen terminated Clark's employment; Clark makes no
claim that the termination was wrongful. On the same day, Clark
requested disability benefits based on an inability to do her work
owing to narcolepsy cataplexy syndrome. The sequence is unclear,
and although the parties argue about it, the merits of her claim
and this appeal do not turn on the timing, because the district
court dismissed on the independent ground that Clark's complaint
failed to address the crucial plan condition that eligibility for
a disability benefit requires a minimum of seven consecutive days
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of disability during the period of employment.
The district court relied principally on the following
provision in the short term plan:
If Reed Group approves your disability, [short term]
benefits begin on your first full day of absence due to
a disability if you are unable to work according to your
regularly scheduled hours for more than seven consecutive
calendar days.
Clark contends that this language "merely governs the timing of
commencement of" benefit payments. Appellant's Br. 10. She
concludes that the seven-day period is not a "condition precedent
to whether benefits were paid." Id. at 11.
Clark's take on the provision is correct inasmuch as it does
impose at least a seven-day wait if it turns out that a benefit is
due, but her reading of the language is crucially incomplete.
Without manifesting a disability in the manner required for seven
consecutive days, no benefit will ever become payable. Only if it
does will the language also answer the timing question, by the
provision that the benefit will be paid retroactively to the first
day of inability to work at the regular schedule.
Thus, timing and eligibility are both governed by the same
language. By providing, without more, that benefits will be paid
retroactively after seven consecutive days of inability to work at
the regular schedule, the plan language necessarily entails that no
benefits will actually be paid unless the employee manifests a
disability in the manner required for at least seven days. And in
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so governing eligibility as well as timing, the terms of the plan
are unambiguous.1 See Barr v. Dyke, 49 A.3d 1280, 1286 (Me. 2012)
("We interpret the unambiguous terms of a contract according to
their ordinary meaning . . . .").
Clark appears to argue in the alternative that, even if the
plan language does create a seven-day eligibility condition, the
continuous seven-day period may run, or continue to run, after
employment by Janssen is over. See Appellants' Br. 10 ("[The plan
language] does not require [her] to plead or prove that she
remained disabled for 7 days while she was employed by Janssen.").
We express no opinion on whether such a reading would be persuasive
in a case in which the running of the seven-day period was affected
by a wrongful termination, for Clark makes no such claim in this
case. Absent wrongful termination, however, it would require very
clear language to provide for benefits accruing after the end of
employment and untethered to some cause for which the employer was
responsible.2 Not surprisingly, then, Johnson & Johnson's Pension
1
The parties argue about the significance of shifting
administrative rationales for denial, and air charges of estoppel
and waiver. But the failure here was Clark's pleading. A claim
for federal judicial relief must state a plausible basis for
entitlement, which is wanting in a complaint that relies on a
benefit plan placed before the court but that fails to address
dispositive conditions contained in the plan's terms. The district
court was thus free to dismiss the defective complaint, just as
Clark herself acknowledges this court is, as well.
2
It is no answer to point out, as Clark does, that accrued
vacation time may be counted as active employment; she does not
allege that she was on vacation at any point relevant to her claim.
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Committee, which is given interpretive authority over the Plan, has
apparently rejected Clark's reading. In its appellate review of
Clark's claim, it took the position that inability to work
scheduled hours meant absence from her work at Janssen, for which
at best July 29 could be counted the first day but with no further
days of countable absence accruing after she left.
We accordingly need go no further to reach the same conclusion
drawn by the district court, that Clark has failed to state a claim
for short term disability benefits as to Janssen, Johnson &
Johnson, and Reed. And because the long term disability plan
conditions eligibility on an employee's prior receipt of twenty-six
continuous weeks of benefits under the short term plan, the ERISA
claim against Prudential must be dismissed as well.
The judgment of the district court is affirmed.
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