COMMUNICATIONS WORKERS OF AMERICA et al v. ALCATEL-LUCENT USA INC. et al
Filing
35
OPINION. Signed by Judge Claire C. Cecchi on 11/30/2016. (ld, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
COMMUNICATIONS WORKERS OF
AMERICA, etal.,
Civil Action No.: 15-cv-8 143
Plaintiffs,
OPINION
V.
ALCATEL-LUCENT USA iNC., et a!.,
Defendants.
CECCHI, District Judge.
I.
INTRODUCTION
This matter comes before the Court on the motion of Defendants Alcatel-Lucent USA Inc.
(“Alcatel”), Susan Lear, Phillipe Camus, Michel Combes, and Jean C. Monty (collectively,
“Defendants”) to dismiss the First Amended Complaint {ECF No.
15] of Plaintiffs
Communications Workers of America (“CWA”), International Brotherhood of Electrical Workers
(“IBEW”), Brian P. Reilly, Thomas Galvin, Greg Gehrke, and Roland J. Brofford (collectively,
“Plaintiffs”). [ECF No. 18.] The Court has considered the submissions made in support of and in
opposition to the instant motion. The Court has also considered the arguments made on the record
during oral argument held on April 18, 2016. for the reasons set forth below, Defendants’ motion
is GRANTED.
II.
BACKGROUND
CWA and IBEW (the “Union Plaintiffs”) are the collective bargaining representatives for
various bargaining units of employees of Alcatel. First Amended Complaint (“Compl.”), ECF No.
15
¶J 5-6.
Plaintiffs Brian P. Reilly, Thomas Galvin, Greg Gehrke, and Roland J. Brofford (the
1
“Individual Plaintiffs”) are former members of either CWA or IBEW who retired from active
employment and have been receiving pension benefits from one of Alcatel’s pension benefit plans
since their retirement. Id.
¶J 7-10.
Defendant Alcatel, and its predecessor company Lucent Technologies, Inc. (“Lucent”),
employs, and has for many years employed, persons represented by and subject to collective
bargaining agreements with CWA and IBEW. Id.
¶ 11.
According to Plaintiffs, Defendant Susan
Lear is the Director of Pension Plan Operations for Alcatel and, together with Alcatel, exercises
control over the management and administration of Alcatel’s pension benefit plans. Id.
¶J 11,
16.
Defendants Philippe Camus, Michel Combes, and Jean C. Monty (the “Individual Defendants”)
are allegedly members of Alcatel’s Board of Directors.
allegedly serves as Alcatel’s Chief Executive Officer.1 Id.
¶J 13-15.
Defendant Combes also
¶ 14.
Alcatel maintains three defined pension benefit plans: (1) the Alcatel Lucent Retirement
Income Plan (“ALRIP”), which provides retirement benefits to active and retired management
employees and deferred vested former employees; (2) the Lucent Technologies Pension Plan
(“LTPP”), which provides retirement benefits to former occupational employees who were
covered by collective bargaining agreements between Alcatel and various labor organizations,
including CWA and IBEW; and (3) the Lucent Technologies, Inc. Retirement Plan (“LTRP”),
which provides retirement benefits to present occupational employees who are covered by
collective bargaining agreements between Alcatel and various labor organizations, including CWA
and IBEW.
Id.
¶ 19.
¶J 17-18.
LTRP participants who retire are transferred immediately to the LTPP.
Since its inception, Alcatel has been obligated by various labor agreements to maintain
Defendants contest this, claiming Camus, Combes, and Monty are not on Alcatel’s
board but rather are or were executives for Alcatel’ s French parent company, Alcatel Lucent,
S.A. {Defs.’ Br. at 19, 21.]
2
a retiree health plan and pay, at least in part, for the post-retirement health benefits of formerly
represented occupational employees.
¶ 20.2
On September 14, 2015, Alcatel notified CWA and IBEW of two separate transfers of
participants and assets, including approximately $1.2 billion in excess assets3 from the LTPP to
the two other plans, the ALRIP and the LTRP, effective December 1, 2015 (the “transfers”). Id.
¶ 29.
Plaintiffs claim that, by making the transfers, Alcatel (1) violated the exclusive benefit rule
and fiduciary provisions of Sections 403(c)(1) and 404(a) of the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C.
§
1 103(c)(1), 1104(a) (the “ERISA Claim”); and (2) breached
two of its labor agreements—the 2004 National Memorandum of Understanding (the “MOU”),
which requires Alcatel to provide certain benefits to former occupational employees through 2019,
and the collective bargaining agreement between Alcatel and CWA covering Alcatel installer
employees through 201$ (the “CBA”), which precludes Alcatel from taking any action with
respect to any “existing Employee Benefit” that “would reduce or diminish the benefits or
privileges provided thereunder without the Union’s consent”—in violation of Section 301 of the
Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C.
§
185 (the “LMRA Claim”). Id.
¶J24-2$, 34-42.
On January 4, 2016, Defendants filed this motion to dismiss the Individual Plaintiffs’
ERISA claim for lack of Article III standing pursuant to Fed. R. Civ. P. 12(b)(l), and to dismiss
both the LMRA claim and the ERISA claim for lack of statutory standing and/or failure to state a
2
The Individual Plaintiffs in this action are former occupational employees of Alcatel
and have been receiving pension benefits from the LTPP or LTRP since their retirement. Id.
¶J 7-10.
“Excess assets” refers to assets greater than would be necessary to pay the benefit
obligations owed to all plan participants. j4 ¶ 29.
3
claim pursuant to Fed. R. Civ. P. 12(b)(6). [ECF No. 18.] Plaintiffs opposed the motion on
february 2, 2016. [ECF No. 21.] Defendants submitted a reply on February 26, 2016. [ECF No.
28.] Plaintiffs submitted a sur-reply on March 14, 2016. [ECF No. 30.] Defendants submitted a
sur-sur-reply on March 28, 2016. [ECF No. 31.] The Court held oral argument on April 18, 2016.
After oral argument, both parties filed supplemental submissions. [ECF Nos. 33, 34.]
III.
LEGAL STANDARD
A.
Rule 12(b)(1)
A motion to dismiss for lack of standing is properly brought pursuant to federal Rule of
Civil Procedure 12(b)(1), because standing is a matter ofjurisdiction. Ballentine v. United
States, 486 F.3d 806, 810 (3d Cir. 2007).
“Article III of the Constitution limits the jurisdiction of federal courts to ‘Cases’ and
‘Controversies.” Lance v. Coffman, 549 U.s. 437, 439 (2007). One key aspect of this case-or
controversy requirement is standing.
at 439. “The standing inquiry focuses on whether the
party invoking jurisdiction had the requisite stake in the outcome when the suit was filed.”
Constitution Party of Pa. v. Aichele, 757 f.3d 347, 360 (3d Cir. 2014) (citing Davis v. FEC, 554
U.S. 724, 734 (2008)).
To establish standing, a plaintiff must satisfy a three-part test, showing: (1) an ‘injury in
fact,’ i.e., an actual or imminently threatened injury that is ‘concrete and particularized’ to the
plaintiff; (2) causation, i.e., traceability of the injury to the actions of the defendant; and (3)
redressability of the injury by a favorable decision by the Court. Nat’l Collegiate Athletic Ass’n
v. Gov. of N.J., 730 f.3d 208, 218 (3d Cir. 2013) (citing Summers v. Earth Island Inst., 555 U.S.
488, 493 (2009)). “The party invoking federal jurisdiction bears the burden of establishing these
elements.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Although a plaintiff bears
4
the burden of establishing the elements of standing, at the motion to dismiss stage, the Court “must
accept as true all material allegations set forth in the complaint, and must construe those facts in
favor of the nonmoving party.”4 Ballentine, 486 F.3d at 810.
B.
Rule 12(b)(6)
For a complaint to survive dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6),
it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.” Ashcrofi v. Igbal, 556 U.S. 662 (2009) (quoting Bell Ati. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). In evaluating the sufficiency of a complaint, the Court must accept all wellpleaded factual allegations in the complaint as true and draw all reasonable inferences in favor of
the non-moving party. See Phillips v. Cty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008).
“Factual allegations must be enough to raise a right to relief above the speculative level.”
Twombly, 550 U.S. at 555. “A pleading that offers labels and conclusions will not do. Nor does
a complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement.” Iqbal,
556 U.S. at 678 (internal citations omitted). However, “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. Thus, when reviewing complaints for failure to state a claim, district courts should
engage in a two-part analysis: “First, the factual and legal elements of a claim should be
separated.... Second, a District Court must then determine whether the facts alleged in the
Defendants purport to bring a factual, rather than facial challenge to jurisdiction.
[Defs.’ Br. at 2]. However, the essence of their Rule 12(b)(1) motion is that the Individual
Plaintiffs have not pleaded a concrete or particularized injury.
In re Schering Plough Corp.
IntronlTemodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012) (“The Defendants’
Rule 12(b)(1) motions are properly understood as facial attacks because they contend that the
Amended Complaints lack sufficient factual allegations to establish standing.”). Therefore, the
Court treats this motion as a facial challenge.
5
complaint are sufficient to show that the plaintiff has a ‘plausible claim for relief.” See Fowler
v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (citations omitted).
The Court may also consider “a document integral to or explicitly relied upon in the
complaint.
.
.
without converting the motion to dismiss into one for summary judgment.” Inre
Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997). Here, the First Amended
Complaint relies on the MOU, the CBA, and the plan document governing the LTPP. Accordingly,
the Court relies on these three documents in deciding the present motion.
IV.
DISCUSSION
A.
LMRA Claim
1.
Applicable Law
Section 301 of the LMRA provides in pertinent part:
(a) Suits for violation of contracts between an employer and a labor
organization representing employees in an industry affecting
commerce as defined in this chapter, or between any such labor
organizations, may be brought in any district court of the United
States having jurisdiction of the parties, without respect to the
amount in controversy or without regard to the citizenship of the
parties.
29 U.S.C.
§
185(a).
Plaintiffs argue the decision of Defendants to transfer participants and assets from the
LTPP to the LTRP and the ALRIP constitutes a breach of two collective bargaining agreements:
the MOU and the CBA. Plaintiffs allege the MOU requires that excess LTPP assets remain in that
plan for the purpose of ensuring that post-retirement health benefits will be subsidized through
Internal Revenue Code (“IRC”) Sections 40 1(h) and 420 transfers.5 Compi.
¶ 35.
Notably, the
IRC Sections 401(h) and 420 authorize pension plans with excess assets, i.e., a funding
level in excess of 120 percent, to transfer those assets to a special plan account established for
the purpose of providing retiree medical benefits.
6
First Amended Complaint cites no particular section of the MOU that creates this requirement.6
Plaintiffs also cite to Article 17, Section 3 in the CBA, which precludes Alcatel from taking
any action with respect to any “existing Employee Benefit” that “would reduce or diminish the
benefits or privileges provided thereunder without [CWA’s] consent.” Id.
¶ 28.
Plaintiffs allege
the transfers violate this provision because Alcatel’s actions effectively diminish the “benefits and
privileges” of represented employees.7 Id.
2.
¶ 36.
Enforceable Rights8
1.
The MOU
Defendants argue the transfers violated none of Plaintiffs’ enforceable rights under the
MOU. The Court agrees.
Plaintiffs claim the MOU prohibits using excess assets in the LTPP for any purpose besides
funding the LTPP’s Section 401(h) account to subsidize retiree participants’ medical and ancillary
benefits. [Pls.’ Opp. Br. at 21.] In support of this proposition, Plaintiffs’ briefing cites Section
6.E of the MOU, titled “Company Healthcare Funding for 2007 and Later’:
[Lucent] agrees that it shall cause the accumulated postretirement
6
Rather, Plaintiffs cite to the MOU only in their opposition to the present motion. [$ç
çg, Pls.’ Opp. Br. at 24-25].
7Additionally, Plaintiffs point to a recently adopted Amendment 3 to the LTPP by Alcatel,
allegedly designed to effectuate the transfers, which makes surviving spouses of former members
of CWA eligible for participation in the LTRP, and argue this change constitutes a material
modification in a term and condition of employment that may not be made mid-contract without
the consent of CWA and IBEW. Compi. ¶ 37. The First Amended Complaint does not specify
what provision of what agreement this violates or how this constitutes a material modification, and
none of Plaintiffs’ opposition briefing or oral argument addresses this aspect of the LMRA Claim.
Accordingly, Plaintiffs have not stated a claim regarding the adoption of Amendment 3.
8
Defendants also claim the Individual plaintiffs lack statutory standing to bring the LMRA
claim. Statutory standing is a question of merits, not jurisdiction. North Jersey Brain & Spine Ctr.
v. Aetna, Inc., 801 F.3d 369, 371 n.3 (3d Cir. 2015). Thus, the Court need not decide whether the
Individual Plaintiffs have standing before reaching the ultimate merits of the LMRA Claim.
7
benefit obligation for [Lucent] -provided postretirement medical and
dental plans for Eligible Participants, as determined by [Lucent] in
accordance with Financial Accounting Standard 106, to be funded
commencing in 2007 by contributions to a section 40 1(h) account in
the [LTTP] in accordance with [ERISA]. Such contributions shall
be made either from transfers of pension assets in excess of 125%
of plan liabilities (as determined under [ERISA]) or from [Lucent’s]
contributions, in either case as contemplated by [ERISA]. [Lucent]
shall determine, in its sole discretion, for each year whether it shall
fund such amount from [Lucent’sl contributions or from excess
pension assets.
[MOU, Declaration of Ralph V. Maly, Jr. (“Maly Decl.”), Ex. A at 272 (emphasis added).]
Plaintiffs also cite to Section 6.B of the MOU. [Pls.’ Opp. Br. at 24.] This section provides
that Lucent’s obligation under the MOU to fund healthcare benefits is contingent on successfully
lobbying to change IRC Section 420 to include a number of provisions, including:
An employer may. fund in a section 401(h) account collectively
bargained retiree healthcare benefits
by in its discretion either
transferring to such account excess pension assets. or by making
supplemental contributions from operating cash as may be required
to fund those benefits even if otherwise limited by the full funding
limitation.
.
.
.
.
.
.
2.
.
To take advantage of the provisions of the Act, an employer must
make an enforceable commitment to fund or prefund retiree
healthcare benefits, or set aside excess pension assets to fund or
prefund retiree healthcare benefits, as described above, at a level of
cost or subsidy negotiated with a union or unions.
[MOU at 269.] Plaintiffs cite no other sections of the MOU in support of the LMRA claim.
Plaintiffs’ briefing also cites the LTPP plan document as relevant to interpreting the MOU.
First, Section 6.1 of the plan document provides that:
[T]he separate accounts established by this Article 6 are to be used
to fund, reimburse, and pay for, respectively: (1) a portion of the
postretirement health benefits for employees of [Lucent] who
participate in the Plan and who currently or in the future qualify or
may qualify for. postretirement health benefits under the medical
and dental plans sponsored by [Lucent] for retired employees and
their eligible Lawful Spouses and dependents....
.
.
8
[Maly Deci. Ex. C at 120.] Second, in their briefing, Plaintiffs cite the “no-reversion rule” in
Section 4.11 of the LTPP plan document for the proposition that “excess LTPP plan assets are to
be used solely for retiree health and ancillary benefit purposes.” [Pls.’
Opp. Br. at 27.]
Section
4.11 is not cited in the First Amended Complaint and is not among the sections of the LTPP plan
document Plaintiffs submitted in support of their opposition, so the full text of this section is not
before the Court. [$ç Maly Deci. Ex. C.] According to Plaintiffs, however, Section 4.11 provides
that “afler all benefit obligations to participants and beneficiaries have been satisfied,
‘.
.
.
any
remaining balance in the [LTPP] shall be applied solely for pension purposes in an equitable
manner consistent with the purposes of the Plan.” [Pls.’ Opp. Br. at 36-3 7.]
The Court must interpret collective-bargaining agreements establishing ERISA plans
“according to ordinary principles of contract law, at least when those principles are not inconsistent
with federal labor policy.” M&G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015).
Accordingly, “[w]here the words of a contract in writing are clear and unambiguous, its meaning
is to be ascertained in accordance with its plainly expressed intent.” Id. (quoting 11 R. Lord,
Williston on Contracts
§ 30:6 at 108 (4th ed. 2012)).
Here, even when read together with the LTPP plan document, the sections of the MOU
Plaintiffs have cited neither prohibit the transfers at issue nor create an ambiguity as to whether
the transfers are prohibited, because they do not require Alcatel to use the excess pension assets
exclusively to fund retiree health benefits through the plan’s Section 401(h) account. Rather,
Section 6.E of the MOU obligates Alcatel to fund the Section 401(h) account using either excess
pension assets
direct contributions, and grants Alcatel “sole discretion” to decide which of the
two funding sources to use. [MOU at 272.] Additionally, the proposed amendments to IRC
Section 420, set forth in Section 6.B of the MOU, support this reading because they, too,
9
contemplate the employer using “its discretion” to decide whether to fund the 401(h) account
through excess pension assets or direct contribution. [MOU at 269.]
The sections of the LTPP plan document Plaintiffs cite do not change this reading. first,
although Section 6.1 requires the Section 401(h) account to be used for health benefits, it does not
require the account to be funded by excess pension assets. [Maly Deci. Ex. C at 120.] Second,
Plaintiffs have not articulated how Section 4.11, the full text of which is not before the Court,
changes the reading of any part of the MOU to prohibit the transfers. Plaintiffs do not appear to
seek to enforce LTPP Section 4.11 itself as prohibiting the transfers.
In short, under the MOU, Alcatel must fund the 401(h) account in accordance with Section
6.E, but need not use excess pension assets to do so. For this reason, the MOU does not require
using the excess pension assets to fund the 401(h) account, and thus Plaintiffs have not adequately
pleaded that the transfers of these excess assets out of the LTPP breached the MOU.9
ii.
Article 17 of the CBA
Defendants further argue nothing in Article 17 of the CBA prohibits the transfers. The
Court agrees.
Paragraph 1 of Article 17 of the CBA between CWA and Alcatel lists the benefit plans to
which Article 17 applies. Notably, the LTRP is listed, but the LTPP is not. Nevertheless, Plaintiffs
argue Article 17 prevents Alcatel from “using excess LTPP assets for its own purposes.” [Pls.’
Opp.
Br. at 28-29.] Plaintiffs cite the following language from paragraph 3 in support of this
contention:
Because the MOU is not ambiguous as to whether the transfers are prohibited, the Court
need not consider Plaintiffs’ extrinsic evidence of the parties’ intent during the negotiation of the
MOU. See Int’l Union, UAW v. Skinner Engine Co., 188 f.3d 130, 145 (3d Cir. 1999)
(“Extrinsic evidence [J may not be used to create an ambiguity where none exists.” (emphasis
omitted)).
10
In the event, during the life of this Agreement, [Alcatel] proposes to
exercise any right provided in any of the existing Employee Benefit
Plans or their successors, by taking action affecting the benefits or
privileges of Employees represented by the Union, it will before
doing so, notify the Union of its proposal and afford the Union a
period of sixty (60) calendar days for bargaining on said proposal;
provided, however, that no change may be made in the Plan which
would reduce or diminish the benefits or privileges provided
thereunder as they apply to Employees represented by the Union
without its consent.
[Maly Deci. Ex. B (“Article 17”) at 61 (emphasis added).]
Plaintiffs claim the transfers reduced or diminished the privileges of the LTRP participants
because they diminished the funding in the LTPP available to pay for the health subsidies to which
LTRP participants will be entitled after they retire and are transferred to the LTPP. Compi.
¶ 36.
Plaintiffs argue the compound phrase “benefits and privileges” implies that “privileges” means
something different than the “benefits” provided by the LTRP; thus, “privileges” means the health
subsidies current LTRP participants can expect to receive when they become LTPP participants.
[Pis.’ Opp. Br. at 29-30.]
Plaintiffs’ argument is unpersuasive. Under paragraph 3 of Article 17, the “benefits and
privileges” that cannot be “reduce[d] or diminish[ed]” by a “change.
.
.
in the Plan” are those that
are “provided thereunder.” [Article 17 at 61 (emphasis added).] Here, “the Plan” is the LTRP,
because Article 17 does not cover the LTPP. Whatever “privileges” are, they must be provided
under the LTRP, not the LTPP. Therefore, future benefits provided under the LTPP are not
“privileges” under the LTRP protected by Article 17. Moreover, if the word “privileges” referred
to health subsidies or other benefits under the LTPP merely because LTRP participants will
someday become LTPP participants, it would effectively add the LTPP to the list of plans covered
under Article 17. Had the parties intended to prevent Alcatel from reducing or diminishing benefits
under the LTPP, they would have put the LTPP on the list explicitly.
11
Accordingly, the Court finds that Plaintiffs have not adequately pleaded that the transfers
were prohibited under Article 17, and thus have failed to state a claim for breach of the CBA.
Dismissal of the LMRA claim as to all Plaintiffs against all Defendants is warranted.
ERISA Claim
B.
1.
Applicable Law
Section 403(c)(1) of ERISA, known as the “exclusive benefit rule,” provides that, except
in a few narrowly limited circumstances, “the assets of a plan [which must be held in trust] shall
never inure to the benefit of any employer and shall be held for the exclusive purposes of providing
benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of
administering the plan.” 29 U.S.C.
§
1103(c)(l). Section 404(a), governing the role of an ERISA
fiduciary, provides in pertinent part:
(1) Subject to [certain enumerated exceptions], a fiduciary shall
discharge his duties with respect to a plan solely in the interest of
the participants and beneficiaries and—
(A) for the exclusive purpose of providing benefits to participants
and their beneficiaries.
***
(D) in accordance with the documents and instruments governing
the plan.
29 U.S.C.
§
1104(a).
Plaintiffs claim the transfers in question violated the exclusive benefit rule in ERISA
Section 403(c)(1) and the fiduciary duties in ERISA Section 404(a) because they benefit both
Alcatel and persons who were never LTPP participants. Compl.
2.
¶ 40.
Individual Plaintiffs’ Article III Standing
The Individual Plaintiffs lack constitutional standing to bring the ERISA claim because
they have not suffered a concrete, particularized injury.
12
The LTPP is a defined benefit pension plan. Compi.
¶
17-18. The Supreme Court has
explained that, for defined benefit pension plans, because the employer has an obligation to make
up any shortfall, “no plan member has a claim to any particular asset that composes a part of the
plan’s general asset pool...
.
Since a decline in the value of a plan’s assets does not alter accrued
benefits, members similarly have no entitlement to share in a plan’s surplus.
.
.
.“
Hughes Aircraft
Co. v. Jacobsen, 525 U.S. 432, 440-41 (1999). In other words, a participant in a defined pension
plan possesses only a right to obtain benefits at a stated level; no participant possesses any interest
in the assets of the pension fund, only in the benefits promised at that level. For this reason,
“diminution in {p]lan assets” alone does not constitute an injury particularized enough to confer
Article III standing on an individual plan participant. Perelman v. Perelman, 793 F.3d 368, 374
(3d Cir. 2015). Instead, a participant must show “individualized harm,” i.e., failure to receive
distributions to which the participant is entitled, or an increased risk that the entire plan will default
and deprive the participant of distributions in the future. Id. But the “increased risk of default”
theory of harm fails as a matter of law when “a plan’s assets exceed its liabilities under a statutorily
accepted accounting method[.]” Id. at 375.
Here, Plaintiffs have not alleged that any medical benefits to which they are entitled have
gone unpaid. Nor have they adequately alleged the transfers increased the risk of default on those
medical benefits, because they have not alleged the LTPP has become underfunded as a result.
Therefore, the Individual Plaintiffs have shown no individualized injury, and lack standing.1°
‘°
Plaintiffs are incorrect that violation of ERISA automatically constitutes an injury-in
fact for the purposes of Article III standing.
Spokeo v. Robins, 136 S. Ct. 1540, 1549 (2016)
(“Article III standing requires a concrete injury even in the context of a statutory violation. For
that reason, [Plaintiff] could not, for example, allege a bare procedural violation, divorced from
any concrete harm, and satisfy the injury-in-fact requirement of Article III.”).
13
Plaintiffs invocation of Section 4.11 of the LTPP does not change this result. According
to Plaintiffs, Section 4.11 provides that “after all benefit obligations to participants and
beneficiaries have been satisfied,
‘..
.
any remaining balance in the [LTPP] shall be applied solely
for pension purposes in an equitable manner consistent with the purposes of the Plan.” [Pls.’
Opp.
Br. at 36-37.] Plaintiffs contend Section 4.11 creates a reversionary interest, that is, that LTPP
participants are entitled to the remaining balance in the LTPP in the form of pension benefits
beyond their defined pension benefits. But the language Plaintiffs quote merely requires Alcatel
to use any leftover assets “for pension purposes in an equitable manner” when the LTPP
terminates, not necessarily to distribute it to any of the Individual Plaintiffs or other LTPP
participants. [Id.] Thus, it is not clear that Section 4.11 gives any of the Individual Plaintiffs a
particular reversionary interest in any of the LTPP’s assets, the loss of which would cause any
Individual Plaintiff to suffer a particularized injury, and Plaintiffs have not adequately pleaded or
shown the Court any evidence to the contrary.1’
Plaintiffs also argue no injury-in-fact showing is necessary because they seek pure
injunctive relief. [Pls.’ Sur-Reply Letter at 2.] But the First Amended Complaint specifically
requests “an order directing Alcatel to restore to the LTPP the liabilities and assets transferred
from the LTPP on or about December 1, 2016 or, in the alternative, that Alcatel make the LTPP
whole by contributing to that Plan an amount equal to the excess assets transferred out of it on or
about December 1, 2015.” Compl. Prayer for Relief ¶ 3 (citing ERISA Sections 502(a)(2) and
(a)(3), 29 U.S.C. § 1 132(a)(2), (3)). This is the type of “make-whole’ equitable relief’ for
which the Third Circuit requires a showing of injury-in-fact specific to Plaintiffs. See Perelman,
793 F.3d at 37 1-72, 375 (without suffering injury-in-fact, plaintiff lacked standing to force
repayment of the pension plan’s losses allegedly attributable to defendants’ breach of fiduciary
duty).
To the extent Plaintiffs’ opposition briefing argues Section 4.11 grants the Individual
Plaintiffs a reversionary interest in the LTPP’s assets, the Court need not presume this allegation
is true, because it was not pleaded in the Amended Complaint. See Corn. of Pa. ex rel.
Zimmerman v. PepsiCo, Inc., $36 F.2d 173, 181 (3d Cir. 198$) (“It is axiomatic that the
complaint may not be amended by the briefs in opposition to a motion to dismiss” (internal
quotations and alterations omitted)).
14
Accordingly, dismissal for lack of standing of the Individual Plaintiffs’ ERISA claim
against all Defendants is warranted.
3.
Union Plaintiffs’ Statutory Standing’2
Defendants contend the Union Plaintiffs lack statutory standing to bring the ERISA claim.
The Court agrees.
ERISA provides a list of individuals and entities with statutory standing to bring civil
actions. See 29 U.S.C.
§ 1132(a). Labor unions are not explicitly included on the list.
Rather, the type of party with statutory standing to bring a civil action depends on the type of relief
sought. See id. Here, Plaintiffs allege statutory standing pursuant to Section 1 132(a)(2) and (3).
Compl.
¶ 42. Section 11 32(a)(2) and (3) both grant standing to plan participants, beneficiaries,
and fiduciaries, and Section 1132(a)(2) grants standing to the Secretary of Labor. 29 U.S.C.
113 2(a)(2), (3).
§
The Third Circuit has held that labor unions are “neither participants nor
beneficiaries.” N.J. State AFL-CIO v. New Jersey, 747 F.2d 891, 892-93 (3d Cir. 1984). Nor do
the Union Plaintiffs argue they are fiduciaries, or allege facts suggesting they are)3
Instead, the Union Plaintiffs contend they have associational standing on behalf of the
employees they represent. [PIs.’ Opp. Br. at 17-19.] However, even assuming labor unions can
sue under ERISA on behalf of employees, associational standing requires the association’s
12
Although Defendants briefly “question[]” the Union Plaintiffs’ Article III standing, the
main contention of their motion with respect to the Union Plaintiffs is that they lack statutory
standing. [Defs.’ Br. at 17-18.]
Under ERISA, with exceptions not relevant here, “a person is a fiduciary with respect to
a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting
management of such plan or exercises any authority or control respecting management or
disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct
or indirect, with respect to any moneys or other property of such plan, or has any authority or
responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in
the administration of such plan.” 29 U.S.C. § 1002(21).
15
members to have Article III standing. Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333,
343 (1977). As discussed above, the Individual Plaintiffs do not have Article III standing, and the
first Amended Complaint identifies no other individual with Article III standing whom the Union
Plaintiffs purport to represent. Therefore, the Union Plaintiffs lack associational standing under
ERISA, and dismissal of their ERISA claim against all Defendants is warranted.
Because no Plaintiff has standing to bring the ERISA claim, the Court need not consider
this claim on its merits.
V.
CONCLUSION
For the reasons above, Defendants’ motion to dismiss is GRANTED. However, the Court
grants Plaintiffs 30 days from the date of this Opinion to file a Second Amended Complaint to
attempt to address the pleading deficiencies described herein.
An appropriate order accompanies this Opinion.
Dated:
3c
CLAIRE C. CECCHI, U.S.D.J.
2_C)
.
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