DocketNumber: Case No.16–cv–05544–HSG
Citation Numbers: 302 F. Supp. 3d 1101
Filed Date: 2/6/2018
Status: Precedential
Modified Date: 7/25/2022
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS
Re: Dkt. No. 33
HAYWOOD S. GILLIAM, JR., United States District Judge *1107Pending before the Court is a motion to dismiss by Defendants Microchip Technology, Inc. ("Microchip"), Atmel Corp. ("Atmel"), and Atmel Corp. U.S. Severance Guarantee Benefit Program ("the Atmel Plan" or "the Plan"). Dkt. No. 33. For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART the motion.
I. BACKGROUND
A. Factual Allegations
Plaintiffs Peter Schuman and William Coplin are former employees of Atmel and Microchip, as well as participants in the Atmel Plan. Dkt. No. 29 ("First Amended Complaint" or "FAC") ¶¶ 13-14. They bring this putative class action under the Employee Retirement Income Security Act of 1974,
1. The Atmel Plan
Atmel, a supplier of "general purpose microcontrollers," created the Atmel Plan in July 2015 in response to market speculation regarding the company's future and the resulting uncertainty among its approximately 1,800 U.S. employees. See FAC ¶¶ 18-19. The company confirmed to employees "that it was seeking a merger partner" and notified them "that it was rolling out the [Atmel] Plan to encourage all employees to continue working for Atmel and any successor entity despite the uncertainty surrounding Atmel's corporate future."
Atmel informed its employees of the specifics of the Plan in documents it delivered on July 9, 2015. See Dkt. No. 33-1, Ex. 1. In a letter, Atmel detailed the three primary severance benefits of the Plan: (1) a cash payment of between 25 percent and 50 percent of annual base salary, depending on the class of employee; (2) paid health insurance premiums for between three to six months, again depending on the class of employee; and (3) a prorated portion of the employee's annual incentive bonus for director-level and professional exempt employees. FAC ¶ 21; see also Dkt. No. 33-1, Ex. 1, at 2 (letter from Atmel describing severance benefits) (ECF pagination).
In an addendum to the letter, Atmel set forth the terms of the Plan. First, it would "terminate" on November 1, 2015, "unless an Initial Triggering Event...occurred prior to November 1, 2015, in which event the [Atmel Plan] will remain in effect for 18 (eighteen) months following that Initial Triggering Event." Dkt. No. 33-1, Ex. 1, at 3 (ECF pagination). The addendum defined the "Initial Triggering Event" as the *1108company's "enter[ing] into a definitive agreement...on or before November 1, 2015, that will result in a Change of Control of the Company."
The addendum also stated:
The [Atmel Plan] will be administered and interpreted by the Company. Any decision made or other action taken by the Company prior to a Change of Control with respect to the [Atmel Plan], and any interpretation by the Company prior to a Change of Control of any term or condition of the [Atmel Plan], or any related document, will be conclusive and binding on all persons and be given the maximum possible deference allowed by law.
Dkt. No. 33-1, Ex. 1, at 4 (ECF pagination); see also FAC ¶ 24.
2. Atmel's Merger with Microchip and Defendants' Pre-Merger Conduct
On September 19, 2015, Atmel and a company named Dialog Semiconductor plc ("Dialog") executed and publicly announced a formal merger agreement. FAC ¶ 28. Afterward Microchip, with whom Atmel had also been in discussions about a potential merger, continued to express interest in a merger or acquisition.
Meanwhile, Plaintiffs and other Atmel employees became aware of Microchip's attempt to replace Dialog as Atmel's merger partner in mid-January 2016.
repeatedly assured its employees orally and in writing in January 2016 and thereafter that, even if Microchip replaced Dialog as the acquiring company, any employee terminated without cause after that acquisition and prior to March 19, 2017 [i.e. , 18 months after Atmel and Dialog entered a definitive agreement on September 19, 2015] would still be entitled to receive the severance benefits provided by the [Atmel] Plan, just as if Dialog were the acquiring company, because an Initial Triggering Event had occurred prior to November 1, 2015.
Prior to the closing of the merger, Atmel provided Microchip with documentation relating to the Atmel Plan, including summaries and estimates of how much would be owed to Atmel employees under the Plan.
On February 29, 2016, three senior members of Microchip's finance team, including Chief Financial Officer Eric Bjornholt, met with senior members of Atmel's finance team.
3. Microchip's Post-Merger Conduct
In the week following the merger's closing, Microchip terminated several Atmel employees without cause, including plaintiff Schuman,
*1110On September 29, 2016, Schuman submitted a claim for benefits under the Atmel Plan to the plan administrator.
B. Procedural Posture
Plaintiffs filed the FAC on March 31, 2017. Dkt. No. 29. Defendants filed this motion on April 28, 2017. Dkt. No. 33 ("Mot."). Plaintiffs filed their opposition on May 31, 2017, Dkt. No. 38 ("Opp."), and Defendants replied on June 7, 2017, Dkt. No. 39 ("Reply"). On May 1, 2017, this case was related to Berman v. Microchip Technology Inc. , No. 17-cv-01864-HSG, which is brought by former Atmel employees who did not sign the post-merger releases but otherwise allege similar facts and bring similar claims against Defendants. Dkt. No. 34
II. LEGAL STANDARD
"To survive a motion to dismiss for failure to state a claim under [Federal] Rule [of Civil Procedure] 12(b)(6), a complaint generally must satisfy only the minimal notice pleading requirements of Rule 8(a)(2)." Porter v. Jones ,
*1111In reviewing the plausibility of a complaint, courts "accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co. ,
III. DISCUSSION
Plaintiffs allege "three independent class action claims for relief." See Opp. at 1. In their First Cause of Action, they seek equitable relief for Defendants' alleged breaches of their fiduciary duty under section 502(a)(3) of ERISA.
Defendants seek dismissal of the FAC in its entirety on the grounds that it fails to provide a "short and plain statement showing that Plaintiffs are entitled to relief." Mot. at 10. Alternatively, Defendants move to dismiss the First and Third Causes of Action for failure to state a claim. See id. at 10-23. The Court considers each argument in turn.
A. Defendants' Contention That the FAC Does Not Comply with Rule 8(a) Is Unsupported.
Defendants first argue that Plaintiffs' FAC "is a convoluted amalgam of facts that does not meet Rule 8(a)'s fundamental pleading requirement"-one that includes "pages of irrelevant facts." Mot. at 10. The Court disagrees.
Defendants cite a sole source of authority in support of their argument: Cafasso ex rel. U.S. v. Gen. Dynamics C4 Sys., Inc. ,
All that remains of Defendants' argument on Rule 8(a) grounds is conclusory. They contend that because "Plaintiffs repeatedly claim the Atmel Plan's language is 'plain' and 'clear'," their claim is one for "a simple denial of benefits"-and that everything else in the FAC is irrelevant and contravenes Rule 8(a). See Mot. at 10. But Defendants' attempt to recharacterize Plaintiffs' claims for breach of fiduciary duty, see FAC ¶¶ 82-97, and interference with the exercise of ERISA rights, see id. ¶¶ 101-111, does not dispose of those *1112claims. Moreover, Defendants fail to ground their Rule 8 argument in what the rule actually requires: "fair notice" of the claim "and the grounds upon which it rests." See Erickson ,
B. The First Cause of Action States a Claim for Breach of Fiduciary Duty as to Microchip, but Only Partially States a Claim for Equitable Relief.
In the First Cause of Action, Plaintiffs allege a breach of the fiduciary duties set forth in section 404(a) of ERISA
1. The Atmel Plan is not a proper defendant as to the First Cause of Action.
First, while not dispositive of the First Cause of Action in its entirety, Defendants contend that the Atmel Plan is an improperly-named defendant because "an ERISA claim for breach of fiduciary duty cannot be maintained against an ERISA plan." See Mot. at 25. The Court agrees.
An ERISA plan generally may be sued as an entity in a civil enforcement suit.
The propriety of naming the Atmel Plan as a defendant in the First Cause of Action is easily resolved by Acosta . Because an ERISA plan cannot be sued for breach of fiduciary duty, see Acosta ,
*11132. In their claim for breach of fiduciary duty, Plaintiffs are not required to seek relief on behalf of the Atmel Plan.
Next, Defendants argue that Plaintiffs' claim for breach of fiduciary duty fails because they "fail to allege any loss the Atmel Plan suffered, or any misuse of plan funds, as a result" of such a breach. See Mot. at 18. Defendants also point to Plaintiffs' failure to "seek relief on behalf of the Atmel Plan." See
Section 502(a)(2) of ERISA permits a plan participant to bring a civil action under section 409. See
Section 502(a)(2) is not at issue in this case. Plaintiffs, rather, seek relief for Defendants' alleged breach of fiduciary duty under section 502(a)(3), which is plainly permitted. Plaintiffs' failure to seek relief on behalf of the Atmel Plan therefore does not preclude their First Cause of Action.
3. Plaintiffs adequately allege that Microchip was a fiduciary in breach of its duties under ERISA.
Defendants next turn to the substance of Plaintiffs' claim for breach of fiduciary duty, contending that the FAC "contains no factual allegations supporting the bare legal conclusion that Microchip was a fiduciary of the Atmel Plan," thus *1114precluding a cause of action for breach of fiduciary duty. See Mot. at 24. "To establish an action for equitable relief under ERISA section 502(a)(3) [for breach of fiduciary duty], the defendant must be an ERISA fiduciary acting in its fiduciary capacity, and must violate [ ] ERISA-imposed fiduciary obligations." See Mathews v. Chevron Corp. ,
a. Plaintiffs sufficiently plead Microchip's fiduciary status.
Plaintiffs assert that "Atmel and Microchip, as Atmel's successor, are named fiduciaries and are therefore fiduciaries 'for all purposes of the plan.' " Opp. at 16 (citation omitted). Defendants, for their part, attempt to assert the merger's closing date as a sort of dividing line. They argue that before the merger's closing date, the FAC refers to Microchip as the "post-merger Plan Administrator" in the conditional tense, amounting to an admission by Plaintiffs that Microchip was not a fiduciary prior to the merger's closing. See Mot. at 24 (quoting FAC ¶ 38). And, after the merger's closing, Defendants argue that it was acting as an employer, not a fiduciary, "when it interacted with Plaintiffs in the context of an employment termination." See id. at 20-21. The Court finds that Plaintiffs have pled sufficient facts to establish Microchip as a fiduciary.
"To determine whether one qualifies as a fiduciary, courts ask whether one exercises discretionary authority or control respecting management over the plan...or has discretionary authority or responsibility in the administration of the plan." Brown v. Cal. Law Enforcement Ass'n, Long-Term Disability Plan ,
Under the test set forth in Brown , Plaintiffs have pled sufficient facts to allege Microchip's fiduciary status.
Defendants' arguments to the contrary are unavailing. In arguing that Microchip "was acting as an employer and not acting in an ERISA fiduciary capacity when it interacted with Plaintiffs in the context of an employment termination," see Mot. at 20-21, Defendants fail to properly consider the legal effect of an employer-fiduciary making representations about the future of plan benefits. "[The Supreme Court's opinion in] Varity holds that a firm which has dual roles as both plan administrator and employer is acting in its administrator-fiduciary capacity when people within the firm 'who had authority to communicate as fiduciaries' make representations to beneficiaries about future plan benefits." See Brown ,
Defendants also argue that "Microchip could not act in a fiduciary manner in making [pre-merger] statements when the Complaint admits it was not the fiduciary at that time." Mot. at 24. Specifically, Defendants cite the FAC's characterization of Microchip as the plan administrator-to-be prior to the closing of the merger, which they argue amounts to a concession that Microchip did not become a fiduciary until the merger closed. See FAC ¶ 39 ("Microchip repeatedly, affirmatively, and deliberately caused Atmel management and Atmel employees to believe that Microchip, as the post-merger Plan Administrator, recognized the continued existence of the [Atmel] Plan, intended to honor the [Atmel] Plan, and would pay all severance benefits provided by the Plan...."). While it is true that Plaintiffs fail to allege facts showing that Microchip exercised or had "discretionary authority or responsibility in the administration of the plan" prior to the merger, see Brown ,
b. Plaintiffs allege sufficient facts supporting their allegation that Microchip breached its fiduciary duties.
Having established that Plaintiffs have sufficiently pled Microchip's fiduciary status, the Court turns to whether Plaintiffs have sufficiently pled the element of breach. "In general terms, fiduciary responsibility under ERISA is simply stated." Pegram v. Herdrich ,
Plaintiffs sufficiently allege that Microchip breached its fiduciary duties. For example, they allege that Microchip misled employees in telling them that the Atmel Plan "had 'expired' on November 1, 2015 and that consequently, it had no obligation to pay, and would not pay, the severance benefits provided by the Plan" to the employees Microchip terminated without cause. FAC ¶¶ 53-54; see also id. ¶ 58 (alleging coercion due, in part, to Microchip's false statements). Plaintiffs also allege that Microchip "failed to inform" those terminated employees that "the Plan was still in existence and in effect," providing those employees with rights under ERISA. See id. ¶ 54; see also id. ¶¶ 56, 61.
Defendants' argument to the contrary again fails. They contend that the fact that Plaintiffs still filed for benefits under the Atmel Plan, even after Microchip "expressed its opinion" that the Plan had expired and that employees were not entitled to benefits, "negat[es] any suggestion that [Plaintiffs] felt Microchip's statements were made as a plan fiduciary exercising discretionary authority or control over the management or administration of the Atmel Plan at that time."See Reply at 10. This argument amounts to the assertion that because Plaintiffs filed for benefits under the Atmel Plan-despite Defendants' alleged misrepresentations meant to discourage them from doing just that-there is no cause of action for breach of fiduciary duty. The Court disagrees.
As mentioned above, however, Plaintiffs' failure to allege facts showing that Microchip was a fiduciary before the closing of the merger does preclude it from arguing that conduct that took place before the merger was a breach of fiduciary duty. See
4. Plaintiffs have stated a claim to some equitable relief under section 502(a)(3).
In their final argument against Plaintiffs' claim for breach of fiduciary duty, Defendants contend that even assuming Plaintiffs did state a claim, they fail to allege facts showing they are entitled to the specific forms of equitable relief they seek. See generally Mot. at 11-22. Before turning to that argument, the Court addresses the threshold question of whether Plaintiffs may simultaneously bring a claim for benefits under section 502(a)(1)(B) and a claim for equitable relief under section 502(a)(3).
a. Plaintiffs may seek equitable relief under section 502(a)(3) in addition to their claims under section 502(a)(1)(B) to the extent that relief obtained under the latter provision does not negate the need for equitable relief.
Defendants argue that because Plaintiffs' claims "amount[ ] to nothing *1117more than a claim for benefits," ERISA provides them adequate relief under section 502(a)(1)(B), precluding equitable relief under section 502(a)(3) as a matter of law. See Mot. at 10. Unlike section 502(a)(1)(B), which permits an ERISA participant or beneficiary to bring an action to recover benefits, to enforce his rights under the plan, or to clarify his rights to future benefits under the plan,
b. Plaintiffs have stated a claim to limited injunctive relief, surcharge, and equitable estoppel under section 502(a)(3), but fail to state a claim for rescission.
With that principle in mind, the Court turns to Plaintiffs' specific claims under section 502(a)(3) for injunctive relief, surcharge, equitable estoppel, and rescission.
i. Two of Plaintiffs' claims for injunctive relief under section 502(a)(3) survive.
Plaintiffs seek injunctive relief (1) prohibiting Defendants from "continuing to deny Plan benefits to eligible employees"; (2) prohibiting Defendants "from continuing to make false and fraudulent statements" about the existence of the Atmel Plan or any employee's right to benefits under the Plan; (3) prohibiting Defendants "from continuing to delay the processing of any Plan member's claim for ERISA benefits"; (4) prohibiting Defendants from enforcing existing or soliciting new releases (i.e. , like the 50 Percent Offer or the Continuing Employee Offer); and (5) "requiring defendants to pay the full amounts and benefits" promised under the Atmel Plan. See FAC ¶ 9; see also id. ¶ 93.
Such relief is clearly encompassed by section 502(a)(3). See Mertens v. Hewitt Assocs. ,
Only two of Plaintiffs' claims for injunctive relief remain: that the Court prohibit Defendants from enforcing existing releases or soliciting new ones, and "from continuing to delay the processing of any Plan member's claim for ERISA benefits." See FAC ¶ 9. For a plaintiff to establish that it is entitled to an injunction, it "must satisfy a four-factor test," and show
(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
Ctr. for Biological Diversity v. Mattis ,
First, in support of their claim for injunctive relief relating to the releases, Plaintiffs allege that Microchip effectively misled terminated employees into believing that the releases were the "only severance benefits available," in an effort to coerce those employees to forego the more substantial benefits to which they were lawfully entitled under the Atmel Plan. See FAC ¶¶ 57, 61. At this stage of the litigation, Plaintiffs have adequately pled irreparable harm, as the consequences of losing job benefits are not always "merely monetary," and can "carr[y] emotional damages and stress, which cannot be compensated by mere back payment of wages." See Collins v. Brewer ,
*1119See Westech Roofing ,
Second, in support of their claim for injunctive relief relating to Defendants' alleged delay in processing benefits, Plaintiffs contend that Defendants, "[d]espite having no justification for doing so...deliberately and repeatedly delayed giving responses to these claims," even though they knew "from the outset that they intended to deny those claims," based on their position that the Atmel Plan no longer existed. See FAC ¶ 65. Plaintiffs further allege that when they appealed those denials, Defendants "delayed responding until virtually the last possible day for a response and then denied their appeals on the identical erroneous and wrongful grounds." Id. ¶ 66. Delay in paying out ERISA benefits is grounds for a finding of irreparable harm. See Westech Roofing ,
Accordingly, Plaintiffs have pled sufficient facts to state a claim for an injunction enjoining Defendants from (1) enforcing and soliciting releases and (2) continuing to delay the processing of any Plan participant's benefits. The Court dismisses Plaintiffs' remaining claims for injunctive relief under section 502(a)(3). Moreover, because the Court is satisfied that there are no additional facts that Plaintiffs could plead that would render this relief non-duplicative, the remaining claims are dismissed without leave to amend. See Foman v. Davis ,
ii. Plaintiffs have pled sufficient facts to state a claim for surcharge.
Plaintiffs next seek to "recover as an equitable surcharge the difference between what defendants paid them in severance benefits and what defendants should have paid them in severance benefits, disgorgement of profits gained as a result of defendants' breaches, plus interest and attorneys' fees." FAC ¶ 97.
The remedy of surcharge provides an ERISA beneficiary with "monetary 'compensation' for a loss resulting from a [fiduciary's] breach of duty, or to prevent the [fiduciary's] unjust enrichment." See CIGNA Corp. v. Amara ,
"[T]o obtain relief by surcharge for a breach of the ERISA trustee's duties, a plan participant or beneficiary must show that the violation injured him or her, but need only show harm and causation, not detrimental reliance." Gabriel ,
Plaintiffs sufficiently allege that they are entitled to surcharge on a theory of unjust enrichment. See FAC ¶ 97. For example, they allege that Microchip "intimidated and coerced Atmel employees...into waiving statutory rights and benefits and accepting significant 'discounts' on the severance benefits those employees were legally owed and guaranteed under the [Atmel] Plan, in order to save Microchip money." Id. ¶ 52; see also id. ¶ 57 (alleging that Microchip misled employees into accepting a smaller severance package "as part of a calculated plan by Microchip to save itself money"); id. ¶ 61 (same). Additionally, the Court rejects Defendants' argument that Plaintiffs' request for prejudgment interest on the surcharge amount is duplicative of their claim for benefits under section 502(a)(1)(B) because "Plaintiffs have the opportunity to request prejudgment benefits if they are successful in their Section 502(a)(1)(B) claim." Mot. at 15. As discussed above, surcharge provides relief beyond and distinct from that provided for in section 502(a)(1)(B), so the interest on the surcharge amount cannot be duplicative of any interest awarded on their claim for benefits.
Accordingly, Defendants' motion is denied as to Plaintiffs' claim for surcharge.
iii. Plaintiffs have pled sufficient facts to state a claim for equitable estoppel.
Plaintiffs also seek, "[t]o the extent that any Plan language is found to be ambiguous...an order equitably estopping defendants from disputing the Plan participants' entitlement to the full amount of severance benefits" provided by the Atmel Plan to employees terminated without cause after the merger. See FAC at 37 (ECF pagination).
The remedy of equitable estoppel "holds the fiduciary to what it had promised and operates to place the person entitled to its benefit in the same position he would have been in had the representations been true." Gabriel ,
Under this theory of relief[,] "(1) the party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended; (3) the [party asserting the estoppel] must *1121be ignorant of the true facts; and (4) he must rely on the former's conduct to his injury."
Gabriel ,
At first, Defendants challenged Plaintiffs' allegations as to two of the six prongs of the equitable estoppel standard. They suggested that because "Plaintiffs' case rests on the argument that the 'plain language' of the Atmel Plan unambiguously entitles them to benefits and it breached a fiduciary duty to tell them otherwise," they cannot plead facts showing that the Plan was ambiguous without undermining their case. See Mot. at 17. Defendants also argue that Plaintiffs fail to allege the requisite extraordinary circumstances. See
Viewing the facts in Plaintiffs' favor, the Court finds that Plaintiffs have sufficiently pled their claim for equitable estoppel. First, the Court is satisfied, notwithstanding Plaintiffs' assertions that the provisions of the Atmel Plan are unambiguous, that reasonable parties could disagree as to whether the Plan required the Initial Triggering Event and the Change of Control to involve the same merger partner-particularly at the motion to dismiss stage, and particularly since that interpretation is one of the primary disputes in this case.
Defendants' motion is therefore denied as to Plaintiffs' claim for equitable estoppel.
*1122iv. Plaintiffs fail to state a claim for rescission.
The last form of relief Plaintiffs seek under section 502(a)(3) is "to void the releases... obtained by defendants through the misrepresentations, breaches of fiduciary duty, and other wrongful conduct alleged herein, and restitution of the full amount of benefits to which they would otherwise be entitled under the Plan." FAC ¶ 95. Defendants style this as a request for rescission, see Mot. at 18-20, while Plaintiffs characterize it as a request for "an order declaring voidable the wrongfully obtained releases (and not rescission per se)," Opp. at 21.
As a preliminary matter, the Court agrees with Defendants that Plaintiffs' claim is for rescission, despite the latter's contention that they do not seek "rescission per se." In Miniace v. Pacific Maritime Association , the court dealt with a breach of fiduciary duty claim under ERISA in which a corporation sought under section 503(a)(3)"an equitable decree rescinding," inter alia , certain amendments to a benefits plan. No. C 04-3506 SI,
Under California law, a party to a contract may unilaterally rescind a contract if her consent "was given by mistake, or obtained through duress, menace, fraud, or undue influence."
Plaintiffs appear to concede that they fail to allege tender, arguing that even if such an allegation were required, they "have effectively pleaded as much by requesting that they recover only 'the difference between what defendants paid them in severance benefits and what defendants should have paid them in severance benefits.' " Opp. at 21 (quoting FAC ¶¶ 97, 111). But Plaintiffs cite no authority in support of their argument, and the law is clear: a plaintiff seeking rescission must allege tender. Because Plaintiffs have failed to do so, they are precluded from seeking rescission.
Defendants' motion is therefore granted as to this claim to relief. In keeping with federal courts' policy of "freely" giving leave to amend "when justice so requires," Fed. R. Civ. P. 15(a)(2), Plaintiffs are granted leave to amend.
C. Plaintiffs Fail to State a Claim for ERISA Interference.
Last, Defendants argue that Plaintiffs have failed to plead facts sufficient to establish a prima facie case of ERISA interference. See Mot. at 23. Section *1123510 of ERISA, in relevant part, makes it
unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan...or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan....
Plaintiffs neither allege specific facts that satisfy this standard nor cite to the correct standard.
Still, the Court cannot be certain that amendment of the Complaint as to this cause of action is futile. See Fed. R. Civ. P. 15(a)(2). Accordingly, Plaintiffs' Third Cause of Action is dismissed with leave to amend.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Defendants' motion as follows:
1. Plaintiffs' claims for injunctive relief under section 502(a)(3) of ERISA (1) prohibiting Defendants from "continuing *1124to deny Plan benefits to eligible employees"; (2) prohibiting Defendants "from continuing to make false and fraudulent statements" about the existence of the Atmel Plan or any employee's right to benefits under the Plan; and (3) "requiring defendants to pay the full amounts and benefits" promised under the Atmel Plan are DISMISSED WITHOUT LEAVE TO AMEND .
2. Plaintiffs' claim for rescission under section 502(a)(3) of ERISA is DISMISSED WITH LEAVE TO AMEND .
3. Plaintiffs' Third Cause of Action under section 510 of ERISA is DISMISSED WITH LEAVE TO AMEND .
4. The remainder of Defendants' motion is DENIED .
Should Plaintiffs choose to amend the FAC, they are directed to do so in accordance with the discussion above no later than 28 days from the date of this Order.
IT IS SO ORDERED.
The Court finds this matter appropriate for disposition without oral argument and the matter is deemed submitted. See Civil L.R. 7-1(b).
Defendants suggest in a footnote that Plaintiffs are required to plead with the particularity required by Federal Rule of Civil Procedure 9(b). See Mot. at 22 n.6. But because they fail to develop that argument anywhere else in their briefing, the Court applies the pleading requirements of Rule 8.
Defendants "do[ ] not argue that the [Atmel] Plan is not a proper defendant" as to the Second Cause of Action, through which Plaintiffs seek to recover severance benefits. Reply at 11. This is consistent with the law. See Acosta ,
Defendants devote their briefing to arguments regarding Microchip's fiduciary status, and do not appear to dispute Atmel's fiduciary status prior to the merger's closing date. The Court accordingly declines to reach the question of Atmel's fiduciary status at this stage of the litigation.
But see Steen v. John Hancock Mut. Life Ins. Co. ,
In their opposition, Plaintiffs elect to cite non-binding case authority in support of their argument that Microchip is a fiduciary to the Atmel Plan because Microchip is a "named fiduciar[y]" of the Plan within the meaning of
Plaintiffs also seek "removal and replacement of Microchip as Plan Administrator with a new and different Plan Administrator that complies with its fiduciary obligations to Plan participants." FAC ¶ 96. Defendants list this claim for relief as an issue to be decided, see Mot. at 4, but fail to address it specifically. Additionally, Plaintiffs seek several types of declaratory relief under the Declaratory Judgment Act,
The Court does, however, agree with Defendants that Plaintiffs' allegation that Defendants "delayed responding until virtually the last possible day for a response and then denied their appeals" comes close to an admission that Defendants' denial on appeal was, in fact, timely. See Mot. at 13 n.4; Reply at 5. But Plaintiffs also make broader allegations that Defendants "deliberately and repeatedly delayed" responding to their claims for benefits. See FAC ¶ 65. Because the facts must be construed in Plaintiffs' favor at the motion to dismiss stage, the Court finds that such allegations sufficiently plead irreparable harm.
Defendants suggest that Plaintiffs' request for attorneys' fees is also duplicative, see Mot. at 14-15, but section 502 expressly provides for such relief, see
It is beyond dispute that Plaintiffs are permitted to plead that the relevant terms of the Atmel Plan were unambiguous or, in the alternative, that the ambiguity of the Plan supports a claim for equitable estoppel. See Fed. R. Civ. P. 8(d)(3) ("A party may state as many separate claims or defenses as it has, regardless of consistency."); Summit Estate, Inc. v. Cigna Healthcare of Cal., Inc. , No. 17-cv-03871-LHK,
Instead, Plaintiffs cite to a case from the Northern District of Illinois for the proposition that "fraudulent activity excluding an employee from participation in a benefit plan can constitute an act of discrimination." See Opp. at 23-24 (quoting Healy v. Axelrod Constr. Co. Defined Benefit Pension Plan & Trust ,