Sirva Relocation, LLC et al v. Tynes et al

Filing 55

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER: "In accordance with the foregoing, plaintiffs' motion for a preliminary injunction (Docket No. 2 ) is DENIED, defendants' motions to dismiss (Docket Nos. 24 & 26 ) are ALLOWED and the case is DISMISSED. So ordered. "(Moore, Kellyann)

United States District Court
District of Massachusetts
)
SIRVA RELOCATION, LLC and AETNA )
LIFE INSURANCE COMPANY,
)
)
Plaintiffs,
)
)
v.
)
)
JULIAN T. TYNES, SUNILA THOMAS- )
GEORGE and JAMIE R. WILLIAMSON, )
in their official capacities as )
COMMISSIONERS OF THE
)
MASSACHUSETTS COMMISSION AGAINST )
DISCRIMINATION, MASSACHUSETTS
)
COMMISSION AGAINST
)
DISCRIMINATION, COMMONWEALTH OF )
MASSACHUSETTS and DAVID KNIGHT, )
)
Defendants.
)
)

Civil Action No.
13-12530-NMG

MEMORANDUM & ORDER
GORTON, J.
In this case, the Court is asked to decide a long-running
dispute in which employee David Knight (“Knight”) alleges
disability discrimination by his employer Sirva Relocation, LLC
(“Sirva”) and its insurance provider Aetna Life Insurance
Company (“Aetna”) (collectively, “plaintiffs”).

Knight filed

his original complaint against Sirva with the Massachusetts
Commission Against Discrimination (“MCAD”) in 2007, alleging
discrimination on the basis of the termination of benefits for
his claimed mental disability.

Since then, MCAD has

intermittently investigated Knight’s case.
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Plaintiffs, in

their initial response and ever since, maintain that Knight’s
claim is preempted by the federal Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., and,
accordingly, does not belong in a Massachusetts state
administrative tribunal.
In October, 2013, troubled by the MCAD’s prolonged failure
to address what it sees as a clear case of statutory preemption,
plaintiffs filed a complaint and motion for preliminary
injunction in this federal court seeking redress.

Pending

before the Court are plaintiffs’ motion for a preliminary
injunction declaring that Knight’s claims are preempted and a
permanent injunction barring MCAD from any further investigation
or proceedings and the defendants’ motions to dismiss
plaintiffs’ claims.
I.

Background
A.

Factual Background

Plaintiff Sirva is a company that provides a range of
services related to moving and housing.

It provides various

benefits to its employees, including long-term disability
benefits through a policy issued and administered by Aetna.
Relevant here, the policy had no time limits for physical
disabilities but provided for only 24 months of benefits for
certain mental disorders, namely any disability caused by a

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condition that is not a medically determinable physical
impairment.
Knight was a Sirva employee who, in November, 2004, stopped
working at Sirva because of a mental disorder and began
receiving long-term disability benefits.

In December, 2006,

after 24 months, Aetna informed Knight that his disability
benefits had terminated effective November 30, 2006, pursuant to
the terms of Aetna's plan.
B.

Procedural History

In September, 2007, Knight filed a Charge of Discrimination
with MCAD alleging that Aetna’s plan violates M.G.L., c. 151B,
§ 4, and the Americans with Disabilities Act (“ADA”), 42 U.S.C.
§ 12101 et seq., by unlawfully differentiating between mental
and physical disabilities.

Shortly thereafter, plaintiffs moved

to dismiss, arguing that any claim related to Knight’s benefits
plan while working at Sirva was preempted by ERISA.

In April,

2010, more than two years later, MCAD Commissioner Sunila
Thomas-George (“Commissioner Thomas-George”) issued a short
ruling denying plaintiffs’ motion without prejudice.

The ruling

acknowledged that any determination of the legality of an
employee benefit plan would be preempted by ERISA but denied the
motion on the grounds that MCAD could not yet determine whether
the subject plan is, in fact, an “employee benefit plan” under
ERISA.
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MCAD took no further action until April, 2012, when an MCAD
investigator issued Requests for Information to Aetna and Sirva
focusing on all of the factual allegations at issue in Knight’s
complaint.

The Requests were not limited to the ERISA

preemption issue.

In October, 2012, five years after Knight

filed his initial complaint with MCAD, Commissioner ThomasGeorge issued a Probable Cause Finding indicating that MCAD
found probable cause to credit Knight’s allegations.

Because

the finding did not squarely address the ERISA preemption issue,
plaintiffs moved for reconsideration which was denied.
MCAD subsequently issued a discovery order and set a
“public hearing,” MCAD’s version of a trial, for January, 2014.
At the public hearing, MCAD’s commissioners planned to hear
evidence on all material issues of fact, including the issue of
ERISA preemption.
On October 8, 2013, frustrated with the pace of the
proceedings and doubtful that they would receive a full and fair
opportunity to assert their ERISA preemption argument in the
MCAD proceeding, plaintiffs filed a complaint and motion for
preliminary injunction in this Court. 1

Because of plaintiffs’

complaint, the January, 2014, MCAD public hearing was stayed.
After a brief extension of time, MCAD and Knight each separately

1

Knight is named as an “interested party” only and plaintiffs
seek no relief from him.
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filed motions to dismiss and oppositions to plaintiffs’ motion,
both arguing that the Court should abstain from hearing
plaintiffs’ claim under Younger v. Harris. 401 U.S. 37 (1971).
On December 10, 2013, in an unrelated but significant
development, the Supreme Court issued a unanimous opinion in
Sprint Communications, Inc. v. Jacobs, 134 S. Ct. 584 (2013),
which addressed the scope of Younger abstention.

Perceiving the

potential impact of this late development, the Court directed
both parties to file supplemental briefs with respect to the
impact of the Sprint decision on the subject motions prior to
the motion hearing.
On December 19, 2013, the Court held a hearing on the
pending motions.

Thereafter, first in February and then in

March, 2014, plaintiffs filed notices to alert the Court to
recent judicial opinions relevant to the issues raised in this
case.

Defendants filed memoranda in opposition in both

instances.
II.

Legal Analysis
This case turns on two issues: (1) whether the Court must

abstain under the newly clarified Younger doctrine and (2)
whether, even if Younger abstention applies to the subject MCAD
proceeding, the Court can nevertheless exercise jurisdiction
because it is “facially conclusive” that defendants’ claims are
preempted by ERISA.
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A.

Younger Abstention
1.

Legal Standard

Recognizing the tensions inherent in parallel judicial
processes at the state and federal levels, the Supreme Court has
outlined situations where the possibility of “undue
interference” with state judicial proceedings cautions restraint
by federal courts. Sprint, 134 S. Ct. at 588.

Younger initially

invoked this rationale to abstain from enjoining an ongoing
state criminal prosecution. 401 U.S. at 43-44.

The Court

subsequently extended Younger’s logic to those state civil
proceedings that are akin to criminal prosecutions in “important
respects,” see Huffman v. Pursue, Ltd., 420 U.S. 592 (1975), and
those that concern the orders and judgments of state courts, see
Pennzoil Co. v. Texaco Inc., 481 U.S. 1 (1987) (enforcing
requirement to post bond pending appeal); Juidice v. Vail, 430
U.S. 327 (1977) (enforcing civil contempt order).

The high

Court later described those categories as the three “exceptional
circumstances [that] justify a federal court’s refusal to decide
a case in deference to the States.” New Orleans Pub. Serv., Inc.
v. City of New Orleans (“NOPSI”), 491 U.S. 350, 368 (1989).
Other language from the Supreme Court, however, has
indicated that Younger reaches somewhat farther than NOPSI would
suggest.

In 1982, the Court noted that the question of

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abstention under Younger for quasi-judicial proceedings should
focus on
whether important state interests are implicated so as
to warrant federal-court abstention and whether the
federal plaintiff has an adequate opportunity to
present the federal challenge.
Middlesex County Ethics Comm. v. Garden State Bar Assn., 457
U.S. 423, 434 (1982).

Lower courts subsequently used this

language as the test for Younger abstention, broadening the
scope of the doctrine. See, e.g., Brooks v. New Hampshire
Supreme Court, 80 F.3d 633, 638-39 (1st Cir. 1996).
In Sprint, however, the high Court dispelled any notion of
a broader Younger abstention doctrine.

Rejecting a lower

court’s abstention in a dispute involving utility rates, the
Court expressly clarified that “Younger extends to the three
‘exceptional circumstances’ identified in NOPSI, but no
further.” Sprint, 134 S. Ct. at 594.
While the categories of criminal prosecutions and
proceedings to enforce a state court judgment are
straightforward, civil enforcement proceedings under Younger
abstention are less clear, defined by whether they are “akin to”
criminal prosecutions in “important respects.” See Huffman, 420
U.S. at 604.

A civil enforcement proceeding

initiated to sanction the federal plaintiff, i.e., the
party challenging the state action, for some wrongful
act,

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warrants abstention under Younger. Sprint, 134 S. Ct. at 592.
In such cases, a state actor is “routinely” a party to the
proceedings, investigations are “commonly involved” and formal
charges are often filed. Id.
Although the Sprint Court rejected a central role for the
three Middlesex factors because they “would extend Younger to
virtually all parallel state and federal proceedings,” it noted
that, in the context of determining whether abstention was
warranted in a civil enforcement proceeding, they were
“additional factors appropriately considered by the federal
court before invoking Younger.” Id. at 593.

Accordingly, in

determining whether abstention is warranted for a civil
enforcement proceeding, a court should also consider (1) whether
there is an ongoing state proceeding that is judicial in nature,
(2) the importance of the state interest involved and (3)
whether the federal plaintiff has an adequate opportunity to
raise the federal issue in the state proceeding. See Gonzalez v.
Waterfront Comm’n of New York Harbor, No. 13-2023, 2014 WL
2724127, at *6-7 (3d Cir. June 17, 2014) (“The fact that the
state proceeding was quasi-criminal in nature, however, does not
end our inquiry, as we must also consider whether the three
Middlesex factors are satisfied.”).

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2.

Application

With the scope of Younger abstention thus clarified, the
Court can now address the facts at hand.

The subject MCAD

proceeding is not a criminal prosecution or a proceeding to
effectuate the work of state courts.

It is an open question,

however, whether it qualifies as a civil enforcement proceeding.
Plaintiffs label the MCAD proceeding “a private action
brought by an allegedly aggrieved private citizen in an
administrative proceeding” and argue that Younger abstention
would be inappropriate.

Defendants respond that while defendant

Knight filed the initial complaint, MCAD has subsequently
investigated plaintiffs under its own authority and the state
proceeding is a civil enforcement proceeding under Younger.
The Court concludes that the subject proceeding is a civil
enforcement proceeding under Younger akin to a criminal
prosecution in important respects.

Although Knight initiated

the action by filing a complaint with MCAD, initiation by a
private party is not a per se rule rendering the action a
private dispute. See Sprint, 134 S. Ct. at 592 (noting that a
state actor “often initiates the action”) (emphasis added).
Here, MCAD is a party to the state proceedings and is named as a
defendant in plaintiffs’ federal complaint. See id. (emphasizing
that in civil enforcement proceedings a “state actor is
routinely a party to the state proceedings”); see also Joule,
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Inc. v. Simmons, 459 N.E.2d 143, 148 (Mass. 2011) (noting that
regardless of how a proceeding is initiated, MCAD “proceeds in
its own name”).
MCAD has also conducted an independent investigation into
the facts of this case and filed a formal complaint on its own
behalf. Cf. Sprint, 134 S. Ct. at 592 (describing how Younger’s
second category is not met where “[n]o state authority conducted
an investigation...and no state actor lodged a formal
complaint”); see also Joule, 459 N.E.2d at 148 (“MCAD has the
power to investigate claims of discrimination on its own, but
also has the authority – and generally follows this course – to
investigate and pursue complaints filed by individuals.”).
Moreover, the Supreme Court has previously addressed a
situation quite similar to that presently before this Court in
Ohio Civil Rights Commission v. Dayton Christian Schools, Inc.,
where it found an administrative proceeding to enforce state
civil rights laws warranted abstention under Younger. 477 U.S.
619, 628 (1986).

Indeed, despite the fact that, in Dayton, a

private party filed the initial complaint which led to a
subsequent investigation by the Ohio Civil Rights Commission,
id. at 623-24, the Sprint Court characterized Dayton as a
“state-initiated administrative proceeding[] to enforce state
civil rights laws.” Sprint, 134 S. Ct. at 592 (emphasis added).
The Supreme Court’s specific reference to Dayton makes clear
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that the mere fact that a private party brings a case of alleged
discrimination to the attention of state officials does not
render a subsequent state investigation and enforcement
proceeding a “private” action.

Accordingly, despite the absence

of an exact criminal law analogue, the Court finds that the
subject MCAD proceeding is “more akin to a criminal prosecution
than are most civil cases.” Id. (quoting Huffman, 420 U.S. at
604).
To the extent the Supreme Court intended the three
Middlesex factors to play a role in Younger abstention after
Sprint, those factors support the Court’s finding in this case.
The subject MCAD proceeding is undoubtedly a “quasi-judicial
proceeding” and eliminating discrimination is an important state
interest. See Dayton, 477 U.S. at 628.
With respect to the third Middlesex factor, plaintiffs
contend that this Court should refuse to abstain because MCAD
has shown that it will not allow their ERISA preemption claim to
be heard.

Plaintiffs’ impatience is understandable given the

significant and unexplained delays in this case, but there is a
difference, dispositive here, between failing to decide an issue
promptly and not giving a party an opportunity to raise a
defense. See Kelm v. Hyatt, 44 F.3d 415, 424-25 (6th Cir. 1995)
(rejecting claim that delay denies a plaintiff “an adequate

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opportunity for review and redress”).

In this case, the Court

finds only that the former has occurred.
Even assuming, contrary to the facts before the Court, that
plaintiffs will be unable to raise the defense of ERISA
preemption before MCAD, Middlesex established that it is
sufficient “that constitutional claims may be raised in statecourt judicial review of the administrative proceeding.” Dayton,
477 U.S. at 629.

Here, absent any evidence that the

Massachusetts judicial system is unfairly biased against the
plaintiffs or that MCAD is engaged in bad faith harassment,
Middlesex, 457 U.S. at 435, plaintiffs will have an adequate
opportunity to raise their ERISA defense in the state
proceeding. See Bd. of Locomotive Eng’rs v. Mass. Comm’n Against
Discrimination, 695 F. Supp. 1321, 1323 (D. Mass. 1988) (“[I]t
cannot be doubted that the courts of the Commonwealth, in
reviewing any decision of [MCAD], will give federal
constitutional issues, including preemption, the closest
scrutiny.”).
Accordingly, the Court finds that the subject MCAD
proceeding is a civil enforcement proceeding sufficiently akin
to a criminal prosecution in important respects such that
Younger abstention applies.

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B.

Facially Conclusive Preemption
1.

Legal Standard

Even when the prerequisites of Younger abstention are met,
the First Circuit has recognized an exception for cases where
preemption of state law by a federal statute is “facially
conclusive.” See Colonial Life & Acc. Ins. Co. v. Medley, 572
F.3d 22, 26 (1st Cir. 2009) (citing Chaulk Servs., Inc. v.
Massachusetts Comm’n Against Discrimination, 70 F.3d 1361, 1370
(1st Cir. 1995)).

Although the exception has not been

definitively outlined, “courts have largely defined the term
‘facially conclusive’ by rejecting that which it is not.” Id. at
27.

Accordingly, courts deem insufficiently conclusive those

cases where a mere “substantial” claim of preemption is
demonstrated, where further factual inquiry is required or where
the preemption issue is a matter of first impression. See id. 2
Two preemption matters are potentially at issue here: (1)
the subject plan’s status as an “employee benefits plan” under
ERISA and (2) whether the ADA prohibits discrimination in the
provision of benefits to persons with mental disabilities.
While the parties dispute the status of the subject plan, the
Court need not decide whether that issue is facially conclusive
because it finds the latter inquiry dispositive.

2

The Court finds no indication that Sprint looked askance upon
this longstanding exception within the First Circuit.
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2.

Application

Plaintiffs assert that it is obvious that the subject
benefits plan does not discriminate under the ADA.
Specifically, they point to the nearly unanimous support among
Courts of Appeals for the proposition that it is valid under the
ADA for an employer to provide unlimited benefits for physical
disabilities but time-limited benefits for mental disabilities.
Defendants counter that the dispositive data point is the
division of authority within the First Circuit Court of Appeals,
in which several district courts have reached opposite
conclusions in the absence of definitive appellate guidance.
State anti-discrimination laws are only preempted insofar
as they prohibit conduct not prohibited under federal law. Shaw
v. Delta Air Lines, Inc., 463 U.S. 85, 102-03 (1983).

In other

words, if the ADA prohibits certain conduct, state law claims
based on that conduct are not preempted.

Accordingly, this

Court must determine whether it is “facially conclusive” that a
policy violates the ADA by providing unlimited benefits for
physical disabilities and time-limited benefits for mental
disabilities.
While plaintiffs persuasively point to the vast majority of
circuit courts which affirm that benefit plan distinctions
between mental and physical conditions are valid under the ADA,
they also acknowledge that
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[t]here is a division on this issue among the District
Court judges in this Circuit that have ruled on the
issue.
Compare Witham v. Brigham & Women’s Hosp., Inc., 2001 WL 586717
(D.N.H. May 31, 2001) (finding such distinctions valid), with
Iwata v. Intel Corp., 349 F. Supp. 2d 135 (D. Mass. 2004)
(“[T]he ADA prohibits discrimination amongst classes of the
disabled.”).

Moreover, although the First Circuit has

explicitly recognized this issue as an open question, it has
left the issue unresolved. See Colonial Life, 572 F.3d at 27
(“We have not had occasion to decide whether the ADA prohibits
as discriminatory an employer’s decision to provide short-term
disability benefits to individuals with physical disabilities,
but not to those with mental disabilities.”).
In the end, plaintiffs’ argument amounts to a dressed up
version of “everybody’s doing it”; perhaps persuasive authority
to some but far from rendering a determination of this issue
“facially conclusive.” See id. at 28-29 (stating that “the
existence of a question of first impression regarding the ADA’s
applicability...precludes preemption from being facially
conclusive”).

Accordingly, the Court finds no exception to

Younger abstention applicable to this case. 3

3

Because the Court concludes that it must abstain, it declines
to decide whether plaintiffs satisfy the requirements for a
preliminary injunction.
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III. Conclusion
Plaintiffs’ exasperation with MCAD is well-founded and
understandable based on the record before this Court.

Indeed,

it is hard to avoid the conclusion that MCAD could easily have
reached the ERISA preemption issue, almost certainly
dispositive, years ago, thus sparing everyone unnecessary
litigation and concomitant delay and expense.

Nonetheless, the

principles of comity and federalism undergirding Younger
abstention dictate that this Court tread carefully around the
MCAD proceedings.

Therefore, the Court will abstain from

exercising jurisdiction in this case.

ORDER
In accordance with the foregoing, plaintiffs’ motion for a
preliminary injunction (Docket No. 2) is DENIED, defendants’
motions to dismiss (Docket Nos. 24 & 26) are ALLOWED and the
case is DISMISSED.

So ordered.

/s/ Nathaniel M. Gorton______
Nathaniel M. Gorton
United States District Judge
Dated August 7, 2014

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