Wozniak v. S.T.A. of Baltimore -- I.L.A. Container Royalty Fund
Filing
16
MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 10/31/12. (jnls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
RONALD WOZNIAK,
:
Plaintiff,
:
v.
:
Civil Action No. GLR-12-1540
S.T.A. OF BALTIMORE – I.L.A.
CONTAINER ROYALTY FUND,
:
:
Defendant.
:
MEMORANDUM OPINION
Pending
before
this
Court
is
Defendant
Steamship
Trade
Association of Baltimore, Inc. – International Longshoremen’s
Association
(AFL-CIO)
Container
Royalty
Fund’s
(the
“CRF”)
Motion to Dismiss Plaintiff Ronald Wozniak’s Amended Complaint,
filed pursuant to Rule 12(b)(6)of the Federal Rules of Civil
Procedure.
Security
(ECF No. 11).
Act
of
1974
This is an Employee Retirement Income
(“ERISA”)
case
in
which
the
Plaintiff
alleges improper denial of an ERISA-regulated plan and seeks
recovery of those plan benefits.
The issues before the Court are (1) whether a common law
breach of contract claim is permitted under ERISA’s statutory
enforcement scheme; and (2) whether breach of fiduciary duty is
available as a cause of action if it relates to the denial of
ERISA benefits.
is necessary.
The issues have been fully briefed no hearing
See Local Rule 105.6 (D.Md. 2011).
1
For the
reasons that follow, the CRF’s Motion to Dismiss the Amended
Complaint will be granted.
I.
BACKGROUND1
This matter concerns Mr. Wozniak, a participant in the CRF.
The CRF is an ERISA-regulated employee welfare plan in which
eligible longshoremen are paid a one-time, yearly benefit.
If a
worker under the plan gets injured, the CRF extends disability
credit
toward
eligibility
only
disabled during the plan year.
if
a
participant
is
totally
(Def.’s Mot. to Dismiss at 2,
ECF No. 11).
Mr. Wozniak was employed as a longshoreman in the Port of
Baltimore.
On February 20, 2009, Mr. Wozniak was injured and
unable to return to work.
workman’s
compensation
claim
Mr. Wozniak subsequently filed a
pursuant
to
the
Longshore
and
Harbor Workers Compensation Act 33 U.S.C. § 908 et seq.
After the accident, Mr. Wozniak’s employer, Ports America,
filed a Department of Labor LS-208 Form on November 11, 2010.
The LS-208 Form indicated that Mr. Wozniak was on temporary
partial
disability
from
February
21,
2009,
through
July
14,
2010, and on temporary total disability from July 15, 2010 and
continuing.
Mr. Wozniak’s employer filed an amended LS-208 Form
on March 29, 2011, stating that Mr. Wozniak was on temporary
1
Unless otherwise noted, the following facts are taken from
the Amended Complaint.
2
total disability from March 24, 2009, to March 23, 2011.2
On April 7, 2011, Mr. Wozniak applied for CRF benefits for
calendar year 2010.
CRF
benefits,
requirements
The CRF denied Mr. Wozniak’s request for
stating
for
a
that
he
benefit
did
not
since
the
meet
the
original
eligibility
LS-208
Form
reported that Mr. Wozniak was on temporary partial disability,
and not temporary total disability, from October 1, 2009, to
September 20, 2010.
The CRF determined that the contradictory
LS-208 Form was not evidence of total disability because the
employer identified a change to the “payment type” and not to
the nature of the disability.
The
CRF
evidence
requested
that
that
would
Mr.
support
(Def.’s Mot. to Dismiss at 2).
Wozniak
Mr.
submit
Wozniak’s
medical
benefits
or
other
request.
(Pl.’s Resp. to Def.’s Mot. to Dismiss at 3, ECF No. 14).
Mr.
Wozniak did not submit any medical documentation, however, and
contends that he is not required to present medical evidence to
the CRF.
Mr. Wozniak seeks CRF benefits for calendar year 2010.
On May 23, 2012, Mr. Wozniak filed a Complaint against the
CRF, alleging a breach of contract for CRF’s failure to pay an
annual container royalty payment.
2
(ECF No. 1).
On June 22,
The CRF alleges that the amended LS-208 Form received from
Mr. Wozniak’s employer stated, “[a]s [Mr. Wozniak’s employer]
realize[s] that Container Royalty only considers only [sic] the
[temporary total disability] TTD payments, [Mr. Wozniak’s
employer] did agree to reconsider the payment type and have
determined that these would be paid as TTD.”
(Def.’s Mot. to
Dismiss at 2).
3
2012, CRF filed a Motion for Summary Judgment and/or to Dismiss
the Complaint pursuant to Rule 56 and/or Rule 12(b)(6) of the
Federal Rules of Civil Procedure.
2012,
Mr.
Wozniak
filed
an
(ECF No. 8).
Amended
On June 28,
Complaint
additional count for breach of fiduciary duty.3
adding
an
(ECF No. 10).
On July 12, 2012, the CRF filed the pending Motion to Dismiss
the Amended Complaint.
(ECF No. 11).
On July 25, 2012, Mr.
Wozniak, filed an opposition to the CRF’s Motion to Dismiss.
(ECF No. 15).
As to the breach of contract count, the CRF argues that the
ERISA preemption clause supersedes all other state laws insofar
as they relate to an employee benefit plan.
Dismiss
at
4—6).
Specifically,
the
CRF
(Def.’s Mot. to
contends
that
Mr.
Wozniak is attempting to circumvent ERISA’s statutory remedial
provisions.
(Id.)
The CRF asserts that ERISA does not provide
a federal common law breach of contract remedy, and that it is
impermissible for Mr. Wozniak to seek ERISA plan benefits by
bringing a state law claim for breach of contract in federal
court.
(Id.)
Lastly, the CRF concludes that ERISA’s civil
enforcement remedies are exclusive.
(Id.)
As to the breach of fiduciary duty claim, the CRF argues
that individualized claims for breach of fiduciary duty are not
3
The June 22, 2012 Motion to Dismiss and/or for Summary
Judgment (ECF No. 8) will be denied as moot.
4
authorized where ERISA provides adequate relief for an injured
plaintiff. (Id. at 7—9).
The CRF contends that Mr. Wozniak
cannot “repackage” his denial of benefits claim as a breach of
fiduciary claim because ERISA affords other avenues of relief
for the denial of benefits.
(Id.)
The CRF further asserts that
the Supreme Court has rejected plaintiffs’ attempts to expand
ERISA to include remedies not provided by the statute. (Id.)
In
response,
Wozniak
first
argues
that
there
is
an
independent cause of action for breach of contract arising out
of a denial of workers compensation benefits. (Pl.’s Resp. to
Def.’s
asserts
Mot.
to
that
Dismiss
federal
at
5—6).
courts
have
Specifically,
been
charged
Mr.
with
Wozniak
creating
federal common law to deal with issues involving ERISA-regulated
plans.
(Id.)
Thus, Mr. Wozniak argues that federal common law
provides a breach of contract claim under ERISA.
(Id.).
Second, Mr. Wozniak asserts that his breach of fiduciary
claim is proper under precedent established by ERISA and the
U.S. Court of Appeals for the Fourth Circuit because the CRF did
not have a factual basis for the denial of benefits and the
CRF’s denial was arbitrary and capricious.
(Id. at 6—8).
Mr.
Wozniak argues that ERISA explicitly authorizes suits against
fiduciaries
violations
Wozniak
and
such
posits
plan
as
that
administrators
breach
of
denying
fiduciary
benefits,
5
to
remedy
duty.
to
which
statutory
(Id.).
Mr.
Mr.
Wozniak
asserts he is legally entitled, is a breach of fiduciary duty.
(Id.).
II.
A.
DISCUSSION
Standard of Review
A Federal Rule of Civil Procedure 12(b)(6) motion should be
granted
unless
an
adequately
stated
claim
is
“supported
by
showing any set of facts consistent with the allegations in the
complaint.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 561
(2007) (internal citations omitted); see Fed.R.Civ.P. 12(b)(6).
“A pleading that offers labels and conclusions or a formulaic
recitation of the elements of a cause of action will not do.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Twombly, 550 U.S.
at 555.
“naked
A complaint is also insufficient if it relies upon
assertions
devoid
of
further
factual
enhancement.”
Iqbal, 556 U.S. at 678 (internal citations omitted).
In order to survive a Rule 12(b)(6) motion to dismiss, a
complaint must set forth “a claim for relief that is plausible
on
its
face.”
Id.;
Twombly,
550
U.S.
at
570.
A
claim
is
facially plausible “when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Iqbal, 556
U.S. at 678; Twombly, 555 U.S. at 556.
In
construe
considering
the
a
complaint
Rule
in
12(b)(6)
the
6
light
motion,
most
the
Court
favorable
to
must
the
plaintiff, read the complaint as a whole, and take the facts
asserted therein as true.
Mylan Labs., Inc. v. Matkari, 7 F.3d
1130, 1134 (4th Cir. 1993).
court
may
also
examine
In addition to the complaint, the
“documents
incorporated
into
the
complaint by reference, and matters of which a court may take
judicial notice.”
Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007).
“Conclusory allegations regarding the
legal effect of the facts alleged” need not be accepted.
v. Havel, 43 F.3d 918, 921 (4th Cir. 1995).
purpose
of
the
complaint
is
to
provide
Labram
Because the central
the
defendant
“fair
notice of what the plaintiff’s claim is and the grounds upon
which
it
supported
rests,”
by
some
the
plaintiff’s
factual
legal
basis
defendant to prepare a fair response.
allegations
sufficient
to
must
allow
be
the
Twombly, 550 U.S. at 556
n.3.
B.
Analysis
1.
Breach of Contract Claim
The
Court
grants
CRF’s
Motion
to
Dismiss
the
Amended
Complaint because (1) ERISA preempts Mr. Wozniak’s claim, and
(2) the Fourth Circuit has refused to create federal common law
for a breach of contract claim for plan benefits where, as here,
ERISA has already provided a statutory remedy.
ERISA’s
preemption
provision
is
broad.
Holland
v.
Burlington Indus., Inc., 772 F.2d 1140, 1147 (1985), abrogated on
7
other grounds by Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101 (1989).
Section 514(a) of ERISA provides preemption to “any
and all State laws insofar as they now or hereafter relate to
any employee benefit plan.”
29 U.S.C.A. § 1144(a) (West 2012).
“State laws” include common law causes of action “relating to”
employee benefit plans.
Holland, 772 F.2d at 1147.
In Shaw v.
Delta Air Lines, Inc., the Supreme Court held that “[a] law
‘relates to’ an employee benefit plan, in the normal sense of
the phrase, if it has a connection with or reference to such a
plan.”
463 U.S. 85, 96—97 (1983).
The Supreme Court has also
held that claims for breach of contract based on the denial of
benefits, pursuant to the terms in an employee benefits plan, or
the
administration
of
such
a
plan,
are
preempted
plaintiff is seeking payment of benefits or damages.
when
a
Pilot Life
Ins. Co. v. Dedeaux, 481 U.S. 41, 45 (1987); Metro. Life Ins.
Co. v. Taylor, 471 U.S. 725, 739 (1985).
Likewise, in Holland,
the Fourth Circuit held that claims seeking ERISA-plan benefits
based upon breach of contract are preempted because they “relate
to” employee benefit plans.
772 F.2d 1140, 1146—47 (4th Cir.
1985).
Further, while federal common law under ERISA can exist4,
4
Federal courts are allowed to create federal common law
“based on a federal statute's preemption of an area only where
the federal statute does not expressly address the issue before
the court.”
Nachwalter v. Christie, 805 F.2d 956, 959 (11th
8
the Fourth Circuit has refused to create a federal common law
estoppel
remedy
benefits
under
because
ERISA
ERISA
where
an
specifically
employee
addresses
seeks
this
plan
issue.
Singer v. Black & Decker Corp., 769 F.Supp 911, 916—17 (D.Md.
1991).
Here, Mr. Wozniak has no breach of contract cause of action
for two reasons: (1) ERISA preempts this claim; and (2) the
Fourth Circuit has refused to create federal common law for a
breach
of
contract
claim
for
plan
benefits
where,
ERISA has already provided a statutory remedy.
as
here,
Therefore, Mr.
Wozniak’s breach of contract claim is preempted by ERISA and the
Court finds that he is unable to sustain this claim.
2.
Breach of Fiduciary Duty Claim
The Court also grants CRF’s Motion to Dismiss the Amended
Complaint
because
Mr.
Wozniak
seeks
individual
plan
benefits
that are redressable elsewhere in ERISA.
Individualized claims for breach of fiduciary duty are not
authorized
where
ERISA
provides
adequate
relief
for
a
plaintiff’s injury in another part of ERISA’s statutory scheme.
Varity Corp. v. Howe, 516 U.S. 489, 512, 515 (1996).
Section
1132(a)(1)(B) of ERISA provides individualized review to plan
participants for an allegedly wrongful denial of plan benefits.
Cir. 1986) (citing See C. Wright, Law of Federal Courts § 60, at
283-84 (3d. ed. 1976); see also Textile Workers Union of Am. v.
Lincoln Mills of Ala., 353 U.S. 448, 456-57 (1957)).
9
29 U.S.C. § 1132(a)(1)(B).
The
Fourth
Circuit
has
expressly
rejected
a
denial
of
benefits claim being “repackaged” as a breach of fiduciary duty
claim.
Korotynska v. Metro. Life Insurance Co., 474 F.3d 101,
106—107 (4th Cir. 2006).
A claim for breach of fiduciary duty
is “repackaged” as a claim for benefits “where the resolution of
the claim rests upon an interpretation and application of an
ERISA-regulated
plan
rather
application of ERISA.”
than
upon
held
that
in
interpretation
cases
In Korotynska, the Fourth
seeking
relief
for
benefits, § 1132(a)(1)(B) provides adequate relief.
107.
of
and
Smith v. Syndor, 184 F.3d 356, 362 (4th
Cir. 1999)(emphasis in original).
Circuit
an
denial
of
474 F.3d at
Thus, the Fourth Circuit in Korotynska held that a cause
action
injury
is
under
§
1132(a)(3)
redressable
was
elsewhere
inappropriate
in
ERISA’a
because
scheme.
the
Id.
Moreover, the Court has noted that “[t]o permit [a suit for
denial of plan benefits] to proceed as a breach of fiduciary
action
would
encourage
parties
to
avoid
the
implications
of
section 502(a)(1)(B) by artful pleading; indeed every wrongful
denial
of
benefits
fiduciary duty
Blue
Shield,
would
. . . .”
102
F.3d
be
characterized
as
a
breach
of
Coyne & Delaney Co. v. Blue Cross &
712,
714
(4th
Cir.
1996)(emphasis
in
original).
Here, Mr. Wozniak has no breach of fiduciary duty cause of
10
action
because
he
seeks
individual
plan
redressable elsewhere in ERISA’s scheme.
benefits
that
are
Mr. Wozniak complains
that the CRF breached its fiduciary duty by improperly denying
him container royalty benefits under an ERISA plan.
ERISA,
however, has provided an adequate remedy under § 1132(a)(1)(B).
Accordingly, Plaintiff cannot sustain his breach of fiduciary
duty claim.
III. CONCLUSION
For
the
foregoing
reasons,
the
Court
will,
by
separate
order, GRANT Defendant’s Motion to Dismiss the Amended Complaint
(ECF No. 11).
Entered this 31st day of October, 2012
/s/
____________________________
George L. Russell, III
United States District Judge
11
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