RUIZ v. CAMPBELL SOUP COMPANY et al

Filing 34

OPINION. Signed by Judge Noel L. Hillman on 12/4/2014. (drw)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

JOE RUIZ,
Plaintiff,

CIVIL NO. 13-2634(NLH)(JS)

v.
CAMPBELL SOUP COMPANY, and
CAMPBELL SOUP COMPANY
SEVERANCE PAY PLAN FOR
SALARIED EMPLOYEES

OPINION

Defendants.

APPEARANCES:
MARC A. WEINBERG
SAFFERN & WEINBERG
815 GREENWOOD AVE.
SUITE 22
JENKINTOWN, PA 19046
On behalf of plaintiff
ALISON CHRISTINA MORRIS
JONATHAN D. WETCHLER (pro hac vice)
DUANE MORRIS LLP
30 SOUTH 17th STREET
PHILADELPHIA, PA 19103
On behalf of defendants
HILLMAN, District Judge
Presently before the Court is the motion of defendants
for summary judgment, previously a motion to dismiss converted
to a summary judgment motion by the Court in a prior Opinion, on
plaintiff’s ERISA violation claims against it.

Defendants

contend that plaintiff’s ERISA claims must be dismissed for

failure to exhaust his administrative remedies.

For the reasons

expressed below, defendants’ motion will be denied.
I.

BACKGROUND

According to his complaint, plaintiff, Joe Ruiz, began
working for defendant Campbell Soup Company in October 1984.
Plaintiff became eligible for severance benefits under the
Campbell Soup Company Severance Pay Plan for Salaried Employees
(the “Plan”) in the event he was discharged.
plaintiff was terminated.

On March 22, 2011,

Plaintiff claims that although he was

eligible for benefits, he was denied severance benefits.
Plaintiff claims that defendants violated the Employee
Retirement Income Security Act (ERISA) by wrongfully excluding
him from the Plan, by violating their fiduciary duties, and by
unlawfully interfering with his ability to receive ERISA
benefits.

Plaintiff also claims, conditionally, for retroactive

benefits under ERISA.

Defendants argue that because plaintiff

failed to appeal the denial of his benefits in the time provided
under the Plan, his claims are barred for his failure to first
exhaust his administrative remedies.

Plaintiff has opposed

defendants’ motion, arguing that he did properly comply with the
administrative procedures for submitting his claim and appealing
the denial of his claim.

Plaintiff also argues that some

discovery must be conducted in order for him to support his
contention that if it is determined that he did not technically

comply with the administrative procedures, it would nonetheless
have been futile to do so because of defendants’ routine
practice of denying severance benefits to entitled participants.
II.

JURISDICTION

This Court has federal question jurisdiction over this
matter pursuant to Sections 404, 405, 502(a) and 510 of the
Employee Retirement Income Security Act of 1974 (ERISA), 29
U.S.C. §§ 1104, 1105, 1132(a), and 1140.
III. DISCUSSION
A.

Standard for Summary Judgment

Summary judgment is appropriate where the Court is
satisfied that the materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations, admissions, or
interrogatory answers, demonstrate that there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.

Celotex Corp. v.

Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ. P. 56(a).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor.
248 (1986).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

A fact is “material” if, under the governing

substantive law, a dispute about the fact might affect the
outcome of the suit.

Id.

In considering a motion for summary

judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party's evidence “is to be believed and
all justifiable inferences are to be drawn in his favor.”
Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir.
2004)(quoting Anderson, 477 U.S. at 255).

Initially, the

moving party has the burden of demonstrating the absence of a
genuine issue of material fact.
U.S. 317, 323 (1986).

Celotex Corp. v. Catrett, 477

Once the moving party has met this

burden, the nonmoving party must identify, by affidavits or
otherwise, specific facts showing that there is a genuine issue
for trial.

Id.

Thus, to withstand a properly supported motion

for summary judgment, the nonmoving party must identify specific
facts and affirmative evidence that contradict those offered by
the moving party.

Anderson, 477 U.S. at 256-57.

A party

opposing summary judgment must do more than just rest upon mere
allegations, general denials, or vague statements.

Saldana v.

Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).
B.

Exhaustion of Administrative Remedies

“ERISA itself does not contain an exhaustion requirement,
but it does require covered benefit plans to provide
administrative remedies for persons whose claims for benefits
have been denied.”

Karpiel v. Ogg, Cordes, Murphy & Ignelzi,
4

LLP, 297 Fed. App’x 192, 193 (3d Cir. 2008) (citing 29 U.S.C. §
1133; Metropolitan Life Ins. Co. v. Price, 501 F.3d 271, 279 (3d
Cir. 2007).

“Accordingly, courts have long held that an ERISA

plan participant must exhaust the administrative remedies
available under the plan before seeking relief in federal court
unless the participant can demonstrate that resort to the plan
remedies would be futile.”

Id. (citing Harrow v. Prudential

Ins. Co. of Am., 279 F.3d 244, 249-51 (3d Cir. 2002); Weldon v.
Kraft, 896 F.2d 793, 800 (3d Cir. 1990)).
jurisdictional affirmative defense.

Exhaustion is a non-

Metropolitan Life Ins. Co.

v. Price, 501 F.3d 271, 279 (3d Cir. 2007).

Therefore,

defendants must demonstrate the plaintiff failed to exhaust his
administrative remedies.
C.

Analysis

Defendants argue that all or part (Counts I, II and IV) of
plaintiff’s complaint should be dismissed because he failed to
exhaust in a timely manner his administrative remedies when he
failed to file an appeal of denial of benefits within 60 days of
receipt of the denial pursuant to Section 9.2(c) of the Plan.
From the materials provided as part of the parties’ briefing, a
timeline of correspondence between the parties is as follows:
•

March 22, 2011 - Plaintiff was terminated

5

•

April 5, 2011 – Plaintiff writes a letter to Tim Hassett
and Rebecca Bagin, classified as “management” for Campbell,
with copies purportedly sent to “Bob Morrissey,” Campbell’s
Vice President – Human Resources North America, and Nancy
Reardon. 1

Plaintiff states that he is “writing to you both

asking for consideration for my severance after 26 years
and 7 months of employment with Campbell Soup Company,” and
“I am hoping that you will reconsider my severance in an
effort to help my family and me to move on.” 2
•

April 27, 2011 - Donald B. Shanin, Vice President –
Corporate Compliance and Deputy General Counsel for
Campbell Soup Company, writes an email to plaintiff,
stating that he is “writing in response to your e-mail to
Tim and Rebecca,” and asking plaintiff to call him in the

1

The record does not indicate what position Nancy Reardon holds
at Campbell.
2

Defendants challenge plaintiff’s proffer of the email chain
between Campbell employees and plaintiff because it was
submitted without an affidavit by plaintiff verifying its
veracity. Plaintiff attempts to cure this procedural defect in
a sur-reply, and the Court notes that defendants do not
challenge the authenticity of the email communication between
plaintiff and the Campbell employees. Regardless of this
procedural misstep, the Court includes the email chain in the
chronology of events in this case in order to provide the proper
context of all the communications between plaintiff and
defendants and in view of all the likely admissible evidence.
6

office.

The subject line of the email is “Severance

Consideration.”
•

May 4, 2011 – Plaintiff sends an email to Shanin in the
“Severance Consideration” email chain, stating that it has
been a week since they spoke on the phone, and he “just
wanted to see if you had a chance to meet with the team.”

•

May 5, 2011 – Shanin replies to plaintiff’s May 4, 2011
email in the same email chain:
Thanks for your patience.
As we discussed, your termination does not qualify you
for severance pay under the terms of Campbell's
Severance Pay Plan for Salaried Employees which, by
its terms, limits eligibility to terminations
resulting from "economic or organizational changes
resulting in job elimination or consolidation" or a
"reduction in force."
Nevertheless, despite the underlying reasons for your
termination, we decided to offer you a lump sum
separation payment, taking your long tenure with the
Company into account, in order to assist in your
transition to your next employment opportunity. As I
told you, out of respect, I did not start off low in
order to make you negotiate up to an agreeable amount.
Instead, from the start, I offered you the total
amount that we were willing to pay. Frankly, this
amount (6 months of pay equivalent to between $80,000
and $90,000) exceeds any amount, outside of severance,
that we have paid to a departing employee in my years
with the Company. We are not willing to increase this
offer and hope that you give it serious consideration.

•

May 17, 2011 – Shanin sends plaintiff an email with the
subject line “Proposal Deadline.”
7

Shanin writes, “Just a

quick follow-up since I have not heard from you since my
May 5 e-mail. Our offer stands as stated and will remain
until May 23, 2011. If I have not heard from you by that
date, the offer will be rescinded. It remains my hope that
we can resolve this matter amicably, respectfully and
confidentially.”
•

August 24, 2011 – Letter from Shanin to plaintiff’s
counsel:
As we discussed last week, since Mr. Ruiz is
contesting his entitlement to benefits under the
Campbell Soup Company Severance Pay Policy for
Salaried Employees (the "Plan"), a written claim for
benefits must be filed with the Plan Administrator
setting forth the details of the claim. For everyone’s
convenience, I will accept the claim on behalf of the
Plan Administrator or her delegate. As I believe you
indicated that you have a copy of the governing Plan
document, I have enclosed for your information a copy
of the Summary Plan Description for the Plan.

•

September 22, 2011 – Letter from plaintiff’s counsel to
Shanin, stating, in relevant part, “Please accept this
correspondence as a formal request for all relevant
severance benefits which were made due and payable to plan
participant, Joseph Ruiz.

This correspondence should be

construed as a formal written notification as outlined in
the Campbell Soup Summary Plan Description.

Specifically,

Mr. Ruiz is seeking all relevant severance benefits for

8

which remains due based upon his 26.5 years of service.”
Counsel’s letter also details the reasons he feels that
plaintiff is entitled to severance benefits under the Plan.
•

October 11, 2011 – Letter from Robert Morrissey, Campbell’s
Vice President – Human Resources North America, to
plaintiff’s counsel:
I am writing in response to the severance claim for
benefits that you have made on behalf of your client,
Joseph Ruiz. Section 3.l(a) of the Campbell Soup
Company Severance Pay Plan for Salaried Employees (the
"Severance Plan") provides that a salaried employee
whose separation from employment by Campbell is due to
one of the following events shall be eligible for
severance pay: (1) economic or organizational changes
resulting in job e1imination or consolidation or (2)
reduction in work force. Since Mr. Ruiz's separation
from employment was not due to either of the
aforementioned events, he is not eligible for
severance under the terms of the Severance Plan.
Enclosed for your reference is a copy of the Severance
Plan document, as well as a summary plan description
of the Severance Plan, which includes a statement of
rights under the Employee Retirement Income Security
Act of 1974, as amended.
If Mr. Ruiz chooses to pursue an appeal of this
decision, please refer to the section of the summary
plan description entitled "Plan Administration and
Claims Procedures" and send a written appeal to the
Plan Administrator. Donald B. Shanin, Campbell's Vice
President ­ Corporate Compliance and Deputy General
Counsel, will accept the appeal on behalf of the Plan
Administrator. The appeal must include the specific
reasons that Mr. Ruiz believes his termination from
employment is eligible for severance under the
Severance Plan and provide evidence, if any,
supporting such reasons, so that the Plan
Administrator can undertake a full review of the
9

matter.
•

December 22, 2011 – Letter from plaintiff’s counsel to
Shanin:
As you are aware, I have been retained to represent
the interests of Joseph Ruiz with regard to an ongoing
claim for severance benefits . . . Mr. Ruiz has
rejected your initial offer to resolve this matter and
has sought to appropriately appeal the denial of
benefits through the Campbell Soup Health and Welfare
Plan administration process.
Currently, we are seeking status on Mr. Ruiz's appeal
of the denial of the above­referenced claims and wish
to formally exhaust all administrative remedies prior
to the initiation of any lawsuit (if necessary). Mr.
Ruiz is anxious to move this process forward and,
therefore, requests all necessary information from you
as to the next step associated with this appeal.
Would you please be so kind as to contact me directly
to discuss when we may expect a formal response from
the benefit committee with regard to these claims. I
look forward to hearing from you in the near future.

•

February 8, 2012 – Letter from Shanin to plaintiff’s
counsel in response to counsel’s December 22, 2011 letter.
Shanin writes, “The fact of the matter is that there is no
current pending appeal related to Mr. Riuz's severance
claim.

On October 11, 2011, Robert Morrissey, Campbell's

Vice President – Human Resources, North America wrote to
you (copy enclosed) denying Mr. Ruiz's claim for severance
benefits.

In his letter, Mr. Morrissey included copies of

the Severance Plan and the Summary Plan Description and

10

directed your attention to the claims and appeals
procedure.

Since that date, we have received no appeal and

no supporting rationale and documents.”
•

February 28, 2012 – Letter from plaintiff’s counsel to
Shanin, wherein plaintiff’s counsel writes, “You reference
that there is no current pending appeal related to Mr.
Ruiz' [sic] severance claim.

To the contrary, on September

22, 2011, I wrote to you and advised that my letter
constituted "formal written notification" as outlined in
the Campbell Soup Summary Plan Description.

My September

22, 2011 letter (copy enclosed), contained details of Mr.
Ruiz' [sic] claim as well as the rationale for same.
Moreover, my September 22, 2011 letter was issued in
response to your correspondence of August 24, 2011 which
directed claimant to file in accordance with Campbell Soup
Summary Plan Description.”
•

March 22, 2012 – Letter from Shanin to plaintiff’s counsel:
Please be advised that we are treating your February
28, 2012 letter as an appeal of the October 11, 2011
denial by Robert Morrissey, Campbell's Vice President
-Human Resources, North America, of Mr. Ruiz's claim
for severance benefits.
Pursuant to Article IX of the Campbell Soup Company
Severance Pay Plan for Salaried Employees ("the
Plan"), the Plan Administrator or her delegate will
decide the appeal and provide you a written decision
11

within the time limits set forth in Section 9.2(d) of
the Plan.
•

March April 25, 2012, from Robert J. Centonze, Vice
President – Global Compensation & Benefits for Campbell
Soup Company, to plaintiff’s counsel.

Centonze notes that

Section 9.2 of the Plan outlines the procedure for a review
of a denial of a severance benefits claim, and provides,
Upon denial of a claim, in whole or in part, a
claimant or his duly authorized representative will
have the right to submit a written request to the Plan
Administrator for a full and fair review of the denied
claim by filing a written notice of appeal with the
Plan Administrator within 60 days of the receipt by
the claimant of written notice of the denial of the
claim. If the claimant fails to file a request for
review within 60 days of the denial notification, the
claim will be deemed abandoned and the claimant
precluded from reasserting it.

Centonze states that despite the specific instructions from
Morrissey to plaintiff’s counsel in the October 11, 2011
letter regarding the appeals process, plaintiff’s counsel
did not respond for more than 60 days.

Centonze continues,

In accordance with Section 9.2(c) of the Plan, a
request for a full and fair review of the denied claim
should have been provided to the Plan Administrator by
the second week in December 2011 - within 60 days of
the receipt by the claimant of written notice of the
denial of the claim. As your appeal was not made
until December 22, 2011, at the earliest, or more
likely February 28, 2012, it was untimely. The
specific language in Section 9.2(c) ("If the claimant
fails to file a request for review within 60 days of
12

the denial notification, the claim will be deemed
abandoned and the claimant precluded from reasserting
it.") governs.
Second, and independently, even if the appeal was
deemed timely, I find that it is without merit.
Section 3.l(a) of the Plan provides that a salaried
employee whose separation from employment by Campbell
is due to one of the following events shall be
eligible for severance pay: (1) economic or
organizational changes resulting in job elimination or
consolidation or (2) reduction in work force. . . . My
review of Mr. Ruiz's separation from employment
confirmed that his termination was not due to either
of the aforementioned events.
Mr. Centonze concludes,
You have completed the administrative appeal process
authorized by the Plan. If you disagree with my
determination of your appeal, you have the right to
file an action in the United States District Court
challenging this determination.
Defendants argue that plaintiff’s claims are barred because
a plan beneficiary’s failure to timely appeal at the plan level
constitutes a failure to exhaust his administrative remedies,
which compels the dismissal of his complaint filed in federal
court.

(Def. Br., Docket No. 16 at 14, citing Conrad v.

Wachovia Group Long Term Disability Plan, 2010 WL 3810198
(D.N.J. 2010) and other cases).
The Court does not dispute the general rule that a
beneficiary who does not fully and timely engage in the
administrative review process provided by an employee benefits

13

plan may be barred from bringing suit in federal court.

The

requirement of exhausting plan remedies “helps to reduce the
number of frivolous lawsuits under ERISA; to promote the
consistent treatment of claims for benefits; to provide a
nonadversarial method of claim settlement; and to minimize the
costs of claims settlement for all concerned.”

Metropolitan

Life Ins. Co. v. Price, 501 F.3d 271, 278-79 (3d Cir. 2007)
(citing Harrow v. Prudential Ins. Co. of Am., 279 F.3d 244, 249
(3d Cir. 2002)) (other citations and quotations omitted).
Additionally, “exhaustion enhances the ability of fiduciaries to
expertly and efficiently manage their funds by preventing
premature judicial intervention in their decision-making
processes.”

Id.

As the Third Circuit observed, however, “as important as
the exhaustion rule may be, ERISA nowhere mentions the
exhaustion doctrine.”

Id.

The “judicially-crafted doctrine

[of] exhaustion places no limits on a court's adjudicatory
power,” and “[u]nlike a rigid jurisdictional rule, prudential
exhaustion provides flexible exceptions for waiver, estoppel,
tolling or futility.”

Id. (citations omitted) (explaining that

“ERISA's exhaustion requirement bears all the hallmarks of a
nonjurisdictional prudential rule,” and that in “addition to

14

being judge-made, the doctrine's futility exception involves a
discretionary balancing of interests[;] [j]udicial prudence, not
power, governs its application in a given case”).
In this case, plaintiff has satisfied the purposes of the
exhaustion doctrine in ERISA cases.

Even though it is evident

that plaintiff did not submit a formal appeal within 60 days (by
December 10, 2011) of the denial of benefits as directed by
Robert Morrissey in his October 11, 2011 initial denial letter,
defendants chose to construe plaintiff’s counsel’s February 28,
2012 letter as his appeal.

The appeal was denied as untimely,

but it was also substantively denied because the Plan found that
plaintiff’s termination did not qualify for severance under the
terms of the Plan, which was the same basis for denying
plaintiff’s original claim for severance benefits.

Presumably,

if plaintiff had properly filed his appeal by December 10, 2011,
the Plan would have upheld the denial of benefits for the same
reason – i.e., plaintiff’s separation from employment was not
due to economic or organizational changes resulting in job
elimination or consolidation, or a reduction in work force.
The Plan provides that the review of the denial of benefits
“will take into account all information submitted by you
relating to the claim, without regard to whether such

15

information was submitted or considered in the initial benefits
determination.” 3
29.)

(Summary Plan Description, Docket No. 16-2 at

It could be argued that if plaintiff followed the rules of

the Plan and properly and timely provided the specific reasons
and evidence to support plaintiff’s contention that his
termination from employment was eligible for severance under the
Plan, the Plan Administrator could have undertaken a full review
of the matter on appeal rather than relying on the prior record.
Plaintiff’s counsel’s February 28, 2012 letter, which the Plan
construed as plaintiff’s appeal, makes clear, however, that
plaintiff’s appeal intended to rely on the same reasons as those
proffered to support his original claim as set forth in
counsel’s September 22, 2011 letter to Shanin.

Thus, when the

Plan considered plaintiff’s appeal, aside from its untimeliness,
plaintiff substantively satisfied the Plan’s requirements for
filing an appeal.

(See the Plan at 9.2, Docket No. 16-2 at 15.)

Moreover, when the Plan issued its decision on plaintiff’s
appeal, it followed the Plan’s requirement that the Plan

3

It is important to note that the Summary Plan Description
instructs a beneficiary, “If you do not raise issues or present
evidence on review, you will preclude those issues or evidence
from being presented in any subsequent proceeding or judicial
review of your claim.” (Summary Plan Description, Docket No.
16-2 at 29.)
16

Administrator issue a four-part decision detailing the specific
reasons for the adverse determination, the specific provisions
in the Plan upon which the decision is based, that the claimant
is entitled to records and information relevant to the decision,
and a statement of the claimant’s right to bring an action under
ERISA in federal court.

(Id.)

The circumstances of plaintiff’s claim for severance
benefits under the Plan can be succinctly summed up as follows:
Ten days after the 60-day appeal period expired, plaintiff’s
counsel contacted defendants to seek the status of the appeal of
the denial of plaintiff’s claim for severance benefits under the
Plan.

Even though he did not technically comply with the Plan-

mandated deadline, the Plan nonetheless deemed plaintiff’s
counsel’s letters to constitute an appeal, considered all of
plaintiff’s previous submissions to the Plan in support of his
claim, and determined that he did not meet the requirements to
obtain severance benefits under the Plan.

Plaintiff was also

instructed that he had “completed the administrative appeal
process authorized by the Plan,” and that if he disagreed with
the Plan Administrator’s determination of his appeal, plaintiff
had the right to file an action in the United States District
Court challenging this determination.

17

Under these circumstances, the dismissal of plaintiff’s
ERISA claims based on his untimely appeal would not satisfy the
purposes of the exhaustion doctrine.

Furthermore, the dismissal

of plaintiff’s ERISA claims would simply not be fair, especially
considering that the exhaustion requirement is a judicially
crafted doctrine, and that the Plan itself considered the
administrative procedures completed and directed plaintiff to
the federal court as his next step. 4

Therefore, defendants’

argument that plaintiff is barred from bringing such claims
because he did not exhaust his administrative remedies 5 is

The Court’s decision in this case is not intended to discourage
ERISA benefits plan administrators from considering the merit of
untimely appeals of decisions to deny benefits claims. Because
the exhaustion doctrine is a nonjurisdictional prudential rule,
there may be circumstances where the denial of an appeal based
on non-compliance with the plan-mandated timetable could be
sufficient to satisfy the exhaustion requirement and permit a
beneficiary to file a challenge to the denial of benefits in
federal court. In other words, the Court’s decision in this
case may have been the same if the Plan had just denied
plaintiff’s appeal as untimely, without considering its
substance.
4

5

The Court does not need to address plaintiff’s argument in his
opposition that discovery must be undertaken prior to the
resolution of defendants’ instant motion for summary judgment in
order for him to gather evidence to demonstrate that exhaustion
should be excused on futility grounds because defendants had a
fixed policy of denying benefits regardless of whether a
claimant properly pursued the administrative process provided by
the Plan. See Harrow v. Prudential Ins. Co. of America, 279
F.3d 244, 250 (3d Cir. 2002) (explaining that whether to excuse
exhaustion on futility grounds rests upon weighing several
18

unavailing.

Whether defendants move for summary judgment on

other bases is left to their determination.
CONCLUSION
For the foregoing reasons, defendants’ motion for summary
judgment must be denied.

Date: December 4, 2014
At Camden, New Jersey

An appropriate Order will be entered.

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

factors, including: (1) whether plaintiff diligently pursued
administrative relief; (2) whether plaintiff acted reasonably in
seeking immediate judicial review under the circumstances; (3)
existence of a fixed policy denying benefits; (4) failure of the
insurance company to comply with its own internal administrative
procedures; and (5) testimony of plan administrators that any
administrative appeal was futile).
19