Johnson v. AT&T, Inc. et al
MEMORANDUM OPINION as more fully set out in order. Signed by Magistrate Judge Harwell G Davis, III on 11/10/16. (SPT )
2016 Nov-10 AM 09:18
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
AT&T, Inc., et al.,
) Case No. 2:15-cv-01074-HGD
This case comes before the Court on a motion to dismiss filed by Defendant
AT&T, Inc. (AT&T) pursuant to Federal Rule of Civil Procedure 12. (Doc. 14).
AT&T argues this case should be dismissed for lack of personal jurisdiction,
insufficiency of service, and failure to state a claim upon which relief can be granted.
The parties fully briefed the motion. (Docs. 15, 19, 20). After reviewing the
pleadings and the parties’ submissions, the Court concludes that the motion (Doc. 14)
is due to be GRANTED, as set forth more fully below.
STANDARDS OF REVIEW
A Rule 12(b)(6) motion to dismiss for failure to state a claim attacks the legal
sufficiency of the complaint. Generally, the Federal Rules of Civil Procedure require
only that the complaint provide “‘a short and plain statement of the claim’ that will
give the defendant fair notice of what the plaintiff’s claim is and the grounds upon
which in rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957) (quoting Fed.R.Civ.P.
8(a)). A plaintiff must provide the grounds of his entitlement, but Rule 8 generally
does not require “detailed factual allegations.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007). Rule 8 does, however, “demand more than an unadorned, thedefendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). “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.’” Iqbal,
556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). If the court determines that
well-pleaded facts, accepted as true, do not state a claim that is plausible, the claim
must be dismissed. Id.
On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, “the
district court must accept the facts alleged in the complaint as true, to the extent they
are uncontroverted by the defendant’s affidavits.” Madara v. Hall, 916 F.2d 1510,
1514 (11th Cir. 1990). The plaintiff has the burden of establishing a prima facie case
of personal jurisdiction over a non-resident defendant. See Morris v. SSE, Inc., 843
F.2d 489, 492 (11th Cir. 1988). Where, as here, the defendant submits affidavits to
the contrary, the burden shifts back to the plaintiff to produce evidence supporting
jurisdiction unless those affidavits contain only conclusory assertions that the
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defendant is not subject to jurisdiction. See Posner v. Essex Ins. Co., 178 F.3d 1209,
1215 (11th Cir. 1999). Where the plaintiff’s complaint and supporting evidence
conflict with the defendant’s affidavits, the court must construe all reasonable
inferences in favor of the plaintiff. Meier v. Sun Int’l Hotels, Ltd., 288 F.3d 1264,
1269 (11th Cir. 2002).
A motion to dismiss brought pursuant to Rule 12(b)(5) tests the sufficiency of
the service of process. When a defendant contests the sufficiency of service, the
plaintiff bears the burden of proving proper service. James v. City of Huntsville, Ala.,
No. 5:14-cv-02267-SGC, 2015 WL 3397054, at *1 (N.D.Ala. May 26, 2015).
PROCEDURAL AND FACTUAL BACKGROUND
Plaintiff D’Anza Johnson filed suit against AT&T and AT&T Umbrella Benefit
Plan No. 1 (Plan No. 1) on June 25, 2015, seeking benefits under the Employee
Retirement Income Security Act, 29 U.S.C. § 1001, et seq. (ERISA). (Doc. 1).
Johnson amended her complaint three days later, substituting as a defendant AT&T
Umbrella Benefit Plan No. 3 (Plan No. 3) for Plan No. 1. (Doc. 3).
Plan No. 3 is an employee welfare benefit plan sponsored by AT&T. (Doc. 152 at 34-35). The plan administrator is AT&T Services, Inc. (Id. at 34). The claims
administrator is Sedgwick Claims Management Services, Inc. (Sedgwick), which
operates the AT&T Integrated Disability Service Center. (Id. at 32). Plan No. 3 is
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funded by a trust, and the trustee is AT&T Voluntary Employee Beneficiary
Association Trust (AT&T Trust) with Frost National Bank. (Id. at 35-36).
Counsel for Plan No. 3 waived service on August 27, 2015; counsel also
suggested that plaintiff’s counsel dismiss AT&T and substitute AT&T Services, Inc.
as the proper defendant. (Doc. 15-3 at 3). The waiver of service for Plan No. 3 was
filed on September 9, 2015, and Plan No. 3 answered the amended complaint on
September 28, 2015. (Docs. 4, 7).
On October 21, 2015, plaintiff filed a request for service by certified mail on
AT&T. (Doc. 8). The clerk issued a summons and mailed it to AT&T the following
day. (Doc. 9). The return of service indicates service on AT&T on November 12,
2015. (Doc. 12). AT&T filed its motion to dismiss on December 3, 2015. (Doc. 14).
AT&T first argues that dismissal is warranted because plaintiff failed to state
a claim against it.1 (Doc. 15 at 4). AT&T argues that the plan administrator for Plan
No. 3—AT&T Services, Inc.—is the proper defendant, not AT&T. “The proper party
As a threshold matter, the Court concludes that it has personal jurisdiction over AT&T.
Cf. Caudle v. Life Ins. Co. of N. Am., 33 F.Supp.3d 1288, 1298 (N.D.Ala. 2014) (setting forth the
test for personal jurisdiction over a holding company in an ERISA case where a federal question
forms the basis for the court’s jurisdiction). Though the Court rejects AT&T’s argument for
dismissal based upon personal jurisdiction grounds, the Court dismisses on other grounds asserted
pursuant to Rule 12(b)(6).
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defendant in an action concerning ERISA benefits is the party that controls the
administration of the plan.” Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d
186, 187 (11th Cir. 1997). “Proof of who is the plan administrator may come from
the plan document, but can also come from the factual circumstances surrounding the
administration of the plan, even if these factual circumstances contradict the
designation in the plan document.” Hamilton v. Allen-Bradley Co., 244 F.3d 819,
824 (11th Cir. 2001).
ERISA imposes liability only on “fiduciaries.” A “‘person or entity becomes
an ERISA fiduciary either by being named as a fiduciary in written instruments that
govern how an employee benefit plan is established or maintained, or by exercising
discretionary authority or control over the management, administration, or assets of
a plan.’” Woods v. Southern Co., 396 F.Supp.2d 1351, 1364 (N.D.Ga. 2005) (quoting
In re Dynegy, Inc. ERISA Litig., 309 F.Supp.2d 861, 872 (S.D.Tex. 2004)).
Plaintiff’s amended complaint has the following allegations regarding AT&T
and AT&T Services, Inc.:
AT&T Services, Inc., is a wholly owned subsidiary of AT&T,
Inc., is the Plan Administrator of The Plan, and directly decides claims
under The Plan.
AT&T, Inc. has refused to pay the benefits due under The Plan as
a consequence of the arbitrary and capricious denial of the claim by its
subsidiary AT&T Services, Inc. . . . .
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AT&T, Inc. and its subsidiaries pay the benefits for short term
disability under The Plan directly from their payroll and are financially
obligated to pay the benefits to any disabled employee.
Annually, AT&T, Inc. calculates the anticipated amounts of
money it and its subsidiaries will need to pay long term disability benefit
claims under The Plan for the next year.
10. The amount AT&T, Inc. calculated that is needed to pay long term
disability claims is divided by 12 and paid monthly into a bank account
at Frost National Bank in the name of AT&T Voluntary Employee
Beneficiary Association Trust . . . .
13. AT&T, Inc. and subsidiary companies pay funds from their
operating expenses to the trust bank account and the operating fund
payments are spent on claims for long term disability by paying the
funds out of the trust bank account to long term disability beneficiaries.
16. AT&T, Inc. and its subsidiaries are financially obligated to pay
the long term disability benefits under the Plan whether or not there are
assets in the trust bank account to pay such claims.
17. AT&T, Inc. and AT&T Services, Inc. have a structural conflict of
interest1 because AT&T Services, Inc., is deciding claims that AT&T,
At this point it is worth noting that in a similar case, the Eleventh Circuit stated that a
conflict of interest almost certainly did not exist where BellSouth (the employer/sponsor of an
employee benefits plan) had not retained the ability to control all aspects of claims dispositions,
where authority and discretion to handle claims had been delegated to another entity, and where a
trust provided the funding for the plan benefits. Echols v. Bellsouth Telecommunications, Inc., 385
Fed.Appx. 959, 961 n.1 (11th Cir. 2010) (“Although we need not so decide, the use of the trust likely
further insulates BellSouth from any conflict of interest pursuant to the authority of Gilley v.
Monsanto Co., 490 F.3d 848 (11th Cir. 2007); Turner v. Delta Family-Care Disability and
Survivorship Plan, 291 F.3d 1270 (11th Cir. 2002); and Buckley v. Metropolitan Life, 115 F.3d 936
(11th Cir. 1997).”).
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Inc. and other AT&T subsidiaries must pay from operating expenses that
are passed through the trust bank account.
(Doc. 3). According to the plan documents, relied upon and cited by both parties,
Plan No. 3 is an employee welfare benefit plan sponsored by AT&T. (Doc. 15-2 at
34-35). The plan administrator is AT&T Services, Inc. (Id. at 34). The claims
administrator is Sedgwick, which operates the AT&T Integrated Disability Service
Center. (Id. at 32). Plan No. 3 is funded by a trust, and the trustee AT&T Trust with
Frost National Bank. (Id. at 35-36).
When resolving a motion to dismiss under Rule 12(b)(6), the Court is typically
constrained to look only to the allegations of the complaint. See, e.g., Murphy v.
FDIC, 208 F.3d 959, 962 (11th Cir. 2000). However, the Eleventh Circuit permits
reference to a document attached to a motion to dismiss where the document is
“central to the plaintiff’s claim” and is “undisputed” in the sense that “the authenticity
of the document is not challenged.” Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir.
2002); Saunders v. Liberty Life Assur. Co. of Boston, No. 5:14-cv-1181-JHE, 2014
WL 6773252, at *2 (N.D.Ala. Dec. 2, 2014) (noting that consideration of the plan
document did not require conversion of the defendant employer’s motion to dismiss
into a motion for summary judgment); see also Woods v. Southern Co., 396
F.Supp.2d 1351, 1359 (N.D.Ga. 2005).
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The plan documents make clear that AT&T is the plan sponsor, but that AT&T
Services, Inc., is the plan administrator, Sedgwick is the claims administrator, and the
AT&T Trust pays any benefits due under the plan. The allegations in the amended
complaint acknowledge that AT&T Services, Inc. is the plan administrator (Doc. 3,
¶5) and that benefits due under Plan No. 3 are paid by the AT&T Trust (Doc. 3, ¶¶913). The plan administrator, claims administrator, trustee and Plan No. 3 itself are all
entities separate from AT&T that can be sued in their own right. Saunders, 2014 WL
6773252, at *3; 29 U.S.C. § 1132(d)(1) (“An employee benefit plan may sue or be
sued under this subchapter as an entity.”); Rosen v. TRW, Inc., 979 F.2d 191, 192-93
& 194 n.2 (11th Cir. 1992) (finding a company properly dismissed where the plan
designated an unincorporated committee as administrator under ERISA and the
complaint did not allege the committee and company were alter egos); Boyer v. J.A.
Majors Co. Emp. Profit Sharing Plan, 481 F.Supp. 454, 458 (N.D.Ga. 1979) (“[T]he
Committee was an entity separate from the Company.”). Just as in Saunders, the
employer/plan sponsor AT&T is due to be dismissed as a named defendant to this
action. 2014 WL 6773252, at *2.
Because the Court dismisses the claims against AT&T on Rule 12(b)(6)
grounds, it need not consider AT&T’s other arguments for dismissal.
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Based on the foregoing, the Court concludes that AT&T’s motion to dismiss
(Doc. 14) is due to be GRANTED and that the claims against AT&T are due to be
DISMISSED. A separate order in conformity with this Memorandum Opinion will
be entered contemporaneously herewith.
DONE and ORDERED this 10th day of November, 2016.
HARWELL G. DAVIS, III
UNITED STATES MAGISTRATE JUDGE
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