Finch v. The Hillshire Brands Company et al

Filing 15

MEMORANDUM OPINION AND ORDER that the 11 MOTION to Dismiss is DENIED and this case will proceed to discovery against all defendants named in plaintiff's complaint as more fully set out in order. Signed by Judge C Lynwood Smith, Jr on 1/6/2014. (AHI )

FILED
2014 Jan-06 AM 09:09
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
NORTHWESTERN DIVISION
STEPHEN FINCH,
Plaintiff,
vs.
THE HILLSHIRE BRANDS
COMPANY, HILLSHIRE
BRANDS SEVERANCE PAY
PLAN, and THE HILLSHIRE
BRANDS EMPLOYEE
BENEFITS ADMINISTRATIVE,
COMMITTEE,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

Civil Action No. CV-13-S-2037-NW

MEMORANDUM OPINION AND ORDER
Plaintiff, Stephen Finch, filed a complaint on November 6, 2013, asserting a
single claim for payment of severance benefits pursuant to the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.1 He named the
following defendants: (1) The Hillshire Brands Company (“the Company”), his
former employer; (2) Hillshire Brands Severance Pay Plan (“the Plan”), an employee
welfare benefit plan established by the Company to provide, among other things,
severance benefits to terminated employees; and (3) The Hillshire Brands Company
Employee Benefits Administrative Committee (“the Committee”), the Plan
1

Doc. no. 1 (Complaint).

Administrator.2 The case presently is before the court on a motion to dismiss, filed
jointly by the Company and the Plan, for failure to state a claim upon which relief can
be granted.3 Upon consideration of the motion, pleadings, and briefs, the court
concludes that the motion should be denied.
I. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b) permits a party to move to dismiss a
complaint for, among other reasons, “failure to state a claim upon which relief can be
granted.” Fed. R. Civ. P. 12(b)(6). This rule must be read together with Rule 8(a),
which requires that a pleading contain only a “short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While that
pleading standard does not require “detailed factual allegations,” Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 550 (2007), it does demand “more than an unadorned, thedefendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citations omitted). The Supreme Court explicated that standard in Iqbal,
saying that:
A pleading that offers “labels and conclusions” or “a formulaic recitation
of the elements of a cause of action will not do.” [Twombly, 550 U.S.,
at 555]. Nor does a complaint suffice if it tenders “naked assertion[s]”
devoid of “further factual enhancement.” Id., at 557.

2

Id. ¶¶ 2-4.

3

Doc. no. 11.
-2-

To survive a motion to dismiss founded upon Federal Rule of
Civil Procedure 12(b)(6), [for failure to state a claim upon which relief
can be granted], a complaint must contain sufficient factual matter,
accepted as true, to “state a claim for relief that is plausible on its face.”
Id., at 570. A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged. Id., at 556. The
plausibility standard is not akin to a “probability requirement,” but it
asks for more than a sheer possibility that a defendant has acted
unlawfully. Ibid. Where a complaint pleads facts that are “merely
consistent with” a defendant’s liability, it “stops short of the line between
possibility and plausibility of ‘entitlement to relief.’” Id., at 557
(brackets omitted).
Two working principles underlie our decision in Twombly. First,
the tenet that a court must accept as true all of the allegations contained
in a complaint is inapplicable to legal conclusions. Threadbare recitals
of the elements of a cause of action, supported by mere conclusory
statements, do not suffice. Id., at 555 (Although for the purposes of a
motion to dismiss we must take all of the factual allegations in the
complaint as true, we “are not bound to accept as true a legal conclusion
couched as a factual allegation” (internal quotation marks omitted)).
Rule 8 marks a notable and generous departure from the hyper-technical,
code-pleading regime of a prior era, but it does not unlock the doors of
discovery for a plaintiff armed with nothing more than conclusions.
Second, only a complaint that states a plausible claim for relief survives
a motion to dismiss. Id., at 556. Determining whether a complaint states
a plausible claim for relief will, as the Court of Appeals observed, be a
context-specific task that requires the reviewing court to draw on its
judicial experience and common sense. 490 F.3d, at 157-158. But
where the well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has alleged — but it
has not “show[n]” — “that the pleader is entitled to relief.” Fed. Rule
Civ. Proc. 8(a)(2).
In keeping with these principles a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because they
are no more than conclusions, are not entitled to the assumption of truth.
-3-

While legal conclusions can provide the framework of a complaint, they
must be supported by factual allegations. When there are well-pleaded
factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.
Iqbal, 556 U.S. at 678-79 (emphasis added).
II. ALLEGATIONS OF PLAINTIFF’S COMPLAINT4
As the factual allegations of plaintiff’s complaint are relatively brief, it will be
helpful to set them forth in full for purposes of discussing the motion to dismiss.
Plaintiff alleges:
7. Plaintiff was an employee of the Company from March 1, 2004
through August 3, 2013.
8. Plaintiff served the Company as a loyal, honest and dedicated
employee. Plaintiff was appointed to the position of Manager, Plant
Operations II on July 1, 2007 and remained in this capacity until
termination.
9. On or about May 15, 2012, the Company provided Plaintiff with
a Performance Improvement Plan, notwithstanding a February 17, 2012
mid-year job evaluation wherein it was stated: “Steve has had a good
start for [Fiscal Year] 12. The facility is on track to meet all KPI’s[5] and
that could not have happened without the influence that Steve has had on
the operations group.” Prior to this date, Plaintiff had not been the
subject of a Performance Improvement Plan.
10. On August 3, 2013, and within a matter of weeks of the
Performance Improvement Plan being developed for Plaintiff, the
Company terminated Plaintiff’s employment.
4

All allegations of plaintiff’s complaint have been taken as true for purposes of ruling on the
motion to dismiss.
5

The term “KPI’s” is not defined in the complaint or in the parties’ briefs.
-4-

11. The Company did not provide Plaintiff with written notice of
termination. The Company did not provide Plaintiff with written notice
of what severance benefits he was or was not entitled to. The Company
never provided Plaintiff with a copy of the Plan nor a summary
description of the Plan.
12. After a number of weeks, Plaintiff was finally required to
retain the assistance of an attorney to determine what severance benefits
were available to a terminated employee and the process required to
obtain the benefits.
13. Plaintiff has exhausted the administrative process required
under the Plan to obtain the severance benefits he is lawfully entitled to.
14. Defendants have denied payment of severance benefits due to
Plaintiff.
15. Although Plaintiff was an “at will” employee of the Company
and exercised its right to terminate Plaintiff’s employment [sic],
Defendants have taken the position that the employment decision was due
to the “unsatisfactory performance” of Plaintiff. Plaintiff alleges that the
reason given is a subterfuge and intended solely to avoid Defendants’
obligation to pay Plaintiff, a long-time valued employee of the Company,
the severance benefits he is lawfully entitled to.6
Plaintiff requests to be awarded all benefits due under the Plan, plus interest, attorney’s
fees, and costs.7
III. DISCUSSION
The Company and the Plan argue that plaintiff’s claims against them should be
dismissed because they are not the proper defendants. In the Eleventh Circuit, actions

6

Complaint ¶¶ 7-15 (alterations and footnote supplied).

7

Id. at 4.
-5-

to recover ERISA benefits are considered equitable in nature. Hunt v. Hawthorne
Associates, Inc., 119 F.3d 888, 907-08 (11th Cir. 1997). As such,
an in personam order enjoining the payment of benefits under section
502(a)(1)(B) must be directed to a person or entity other than the plan
itself. While ERISA § 502(d)(1), 29 U.S.C. § 1132(d)(1), does state that
“[a]n employee benefit plan may sue or be sued . . . as an entity,” nothing
in ERISA permits the district court to issue an injunctive order solely
against the plan. Rather, the case law of this circuit demonstrates that an
order enjoining the payment of benefits from an ERISA plan must issue
against a party capable of providing the relief requested. See, e.g.,
Shannon[ v. Jack Eckerd Corp.], 113 F.3d [208, 209-10 (11th Cir. 1997)];
Godfrey[ v. BellSouth Telecommunications, Inc.], 89 F.3d [755, 756-57
(11th Cir. 1996)]; cf. Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073,
1074 (5th Cir. 1990) (affirming district court’s dismissal of plaintiff’s
second amended complaint in part for failure to name the plan
administrator as an “indispensable party”). We therefore reject the notion
that an injunctive order to pay benefits under section 502(a)(1)(B) of
ERISA can issue solely against an ERISA plan as an entity.
Hunt, 119 F.3d at 908 (emphasis and alterations supplied).

Because the Plan

Administrator generally has the authority to administer benefits under an ERISA plan,
the Administrator generally is a proper defendant to a claim for ERISA benefits.
Hamilton v. Allen-Bradley Co., Inc., 244 F.3d 819, 824 (11th Cir. 2001).
Here, the Company and the Plan assert that the Committee is the only proper
defendant, because the Committee is designated as the Plan Administrator, and it has
full discretionary authority to make benefit determinations under the Plan.8 It is true
8

See doc. no. 11, Exhibit A (Copy of the Severance Pay Plan), Summary Plan Description,
at 6 (“The Employee Benefits Administrative Committee of the Company (the ‘Committee’) is the
Plan Administrator . . . . The Committee, as the Plan Administrator, shall have the sole authority
-6-

that the Committee is the sole Administrator explicitly designated in the Plan itself.9
Even so, as plaintiff points out, an employer can also serve as a de facto Plan
Administrator, even if a different entity or individual is designated as the Plan
Administrator in the Plan document. See Hamilton, 244 F.3d at 824 (“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
in the exercise of its discretion to interpret, apply, and administer the terms of the Plan and to
determine eligibility for benefits of the Plan and the amount of any benefits under the Plan, and its
determination of any such matters shall be final and binding. Benefits under the Plan will be paid
only if the Committee determines in its discretion that a participant or beneficiary is entitled to them.
The Committee may designate one or more individuals to carry out its function as Plan
Administrator.”).
The copy of the Plan submitted by defendants bears the title “Sara Lee Corporation
Severance Pay Plan (As Amended and Restated Effective as of January 1, 2009).” See doc no. 11,
Exhibit A, at 1. Defendants explain in their brief that the Sara Lee Corporation was renamed the
Hillshire Brands Company on June 29, 2012. Doc. no. 11, at 4-5 n.1. Plaintiff did not dispute this
statement, and the court accepts it as true for purposes of ruling on the present motion to dismiss.
Considering the language of the Plan and Summary Plan Description does not require
conversion of defendants’ motion to dismiss into a motion for summary judgment under Federal
Rule of Civil Procedure 56. Rule 12(d) states:
If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings
are presented to and not excluded by the court, the motion must be treated as one for
summary judgment under Rule 56. All parties must be given a reasonable
opportunity to present all the material that is pertinent to the motion.
Fed. R. Civ. P. 12(d). However, the Eleventh Circuit “has recognized an important qualification to
this rule where certain documents and their contents are undisputed: ‘In ruling upon a motion to
dismiss, the district court may consider an extrinsic document if it is (1) central to the plaintiff’s
claim, and (2) its authenticity is not challenged.’” Speaker v. U.S. Dept. of Health and Human
Services Centers for Disease Control and Prevention, 623 F.3d 1379 (11th Cir. 2010) (citations
omitted). There is no question as to the authenticity of the Plan documents, or their centrality to
plaintiff’s claim. Therefore, the documents may be considered without converting the motion to
dismiss into a motion for summary judgment.
9

See Plan language quoted in the preceding footnote.
-7-

factual circumstances contradict the designation in the plan document.”) (emphasis
supplied) (citing Rosen v. TRW, Inc., 979 F.2d 191, 193 (11th Cir.1992)). The court
agrees with plaintiff that discovery should be conducted to determine what role, if any,
the Company played in the administration of the Plan.10
The court also concludes that the Plan should not be dismissed at this stage of
the litigation. The ERISA statute explicitly states that “[a]n employee benefit plan may
sue or be sued under this subchapter as an entity.” 29 U.S.C. § 1132(d)(1). Defendant
has not cited any contrary authority indicating that the Plan cannot be sued. The Hunt
opinion, interpreting § 1132(d)(1), held that an injunctive order requiring the payment
of benefits could not be issued solely against the Plan; it did not hold that the Plan is
not a proper defendant. See Hunt, 119 F.3d at 908. Similarly, the Hamilton case held
that the ERISA statute conferred “a right to sue the plan administrator for recovery of
benefits.” Hamilton, 244 F.3d at 824. It did not hold that the Plan Administrator was
the only proper defendant.
IV. CONCLUSION AND ORDER
In accordance with the foregoing, it is ORDERED that the motion to dismiss
filed by the Company and the Plan is DENIED. The case will proceed to discovery
10

See doc. no. 13 (plaintiff’s response brief), at 2 (“Plaintiff submits that it is premature to
dismiss the Company as a party defendant. Discovery will further establish what part the Company
has in administration of The Hillshire Company Severance Pay Plan (the ‘Plan’) and in
determination of who is entitled to receive severance benefits under the Plan.”).
-8-

against all defendants named in plaintiff’s complaint. If discovery produces evidence
to support defendants’ dismissal arguments, they may re-assert those arguments in a
motion for summary judgment.
DONE this 6th day of January, 2014.

______________________________
United States District Judge

-9-