Gibbs v. Bank of America Corporation et al
Filing
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MEMORANDUM AND ORDER: Magistrate Judge Azracks discovery order denying in part plaintiffs motion to compel is affirmed. The discovery order was neither clearly erroneous nor contrary to law. In addition, the Court adopts the magistrate judges recommendation that plaintiff be denied leave to amend his complaint because plaintiffs proposed amendment is futile. See attached memorandum and order for details. Ordered by Senior Judge Frederic Block on 11/28/2011. (Innelli, Michael)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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FRANKLIN GIBBS,
Plaintiff,
MEMORANDUM AND ORDER
Case No. 10-CV-1778 (FB) (JMA)
-againstBANK OF AMERICA CORP.,
Defendant.
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Appearances:
For Plaintiff:
VINCENT I. EKE-NWEKE, ESQ.
Law Office of Vincent I. Eke-Nweke, P.C.
498 Atlantic Avenue
Brooklyn, NY 11217
For Defendant:
SIOBHAN M. SWEENEY, ESQ.
STEPHANIE BRUCE, ESQ.
Edwards Angell Palmer & Dodge LLP
111 Huntington Avenue
Boston, MA 02199
BLOCK, Senior District Judge:
Plaintiff Franklin Gibbs appeals from the discovery order of Magistrate Judge
Joan Azrack denying in part his motion to compel discovery. Gibbs also objects to the
magistrate judge’s recommendation that the Court deny his motion for leave to file an
amended complaint.
Plaintiff brought this action against defendant Bank of America Corporation
alleging that a Corporate Severance Program Agreement (“CSP Agreement”) he signed
after being laid off was retaliatory and unenforceable because the release was not
supported by valid consideration.1 Plaintiff was laid off less than a year after he filed a
discrimination charge against defendant with the Equal Employment Opportunity
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Plaintiff commenced this action in New York Supreme Court, Kings County.
Defendant properly removed the lawsuit to federal court on the basis of federal
question jurisdiction under 28 U.S.C. § 1331.
Commission. The CSP Agreement conditioned his receipt of a severance package on the
waiver of his claims against defendant. On July 8, 2011 plaintiff submitted a letter
requesting a pre motion conference regarding an anticipated motion for leave to amend his
complaint, attaching his proposed amended complaint. The Court referred that motion to
Magistrate Judge Azrack. On July 19, plaintiff filed a motion to compel defendants to
produce requested documents. On August 30 the magistrate judge issued her Discovery
Order, granting in part and denying in part plaintiff’s motion to compel. The magistrate
judge also recommended that the Court deny plaintiff leave to file his motion to amend the
complaint on the grounds of futility. The Court considers each of the magistrate judge’s
determinations in turn.
I
A discovery ruling by a magistrate judge is a non-dispositive matter, and as
such the Court will only set aside an order “that is clearly erroneous or is contrary to law.”
28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); see also Thomas E. Hoar, Inc. v. Sara Lee Corp.,
900 F.2d 522, 525 (2d Cir. 1990). This is a highly deferential standard. Magistrate judges
have broad discretion in resolving discovery matters, and a party seeking to overturn a
discovery order “generally bears a heavy burden.” Mental Disability Law Clinic v. Hogan,
739 F. Supp. 2d 201, 203-04 (E.D.N.Y. 2010).
Magistrate Judge Azrack denied two of plaintiff’s six discovery requests on
the basis of relevancy: (1) the identity of defendant’s personnel who participated in the
administration, implementation or determination of severance paid to employees, and (2)
the identity of each person whose position was eliminated under the severance plan, the
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amount paid to each person and the basis for computation. The magistrate judge reasoned
that defendant’s “standardized policies speak for themselves, and it is of no relevance who
drafted them, who implemented them, or who computed the severance packages,” and
because defendant’s “standardized” policies were “the same for each terminated employee,
it bears no relevance to plaintiff how much each individual specifically received or what
position they were in before their termination.” Discovery Order at 3-5. Plaintiff argues
that the requested discovery is relevant because it is necessary to identify personnel with
“personal knowledge” of the severance program and because the computation of severance
pay received by other employees “would be probative of Gibbs’s position that he was
already entitled to the severance package he allegedly received.” Pl’s Objection at 13.
First, defendant has already provided plaintiff with documents explaining
how to determine employee eligibility for the severance plan, how the plan is implemented
and how severance is calculated. These documents contain all of the relevant information
on how defendant managed the standardized severance policy. Plaintiff submits no
argument that personnel involved in the administration, development or implementation
of the severance could provide additional insight, aside from a vague assertion that people
with “personal knowledge” of the severance program might provide useful information.
Second, defendant’s standardized policy on severance pay eligibility and
computation was identical for every terminated employee. All employees who were laid
off received the same standardized severance plan forms. This is evident from plan
documents that defendant has already provided to plaintiff– primarily the CSP Agreement,
which plaintiff signed, and the CSP Severance Pay Computation Sheet. Plaintiff fails to
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show how the identities of other employees who received severance pay, and details of the
amount paid to them, would shed any light on whether or not the release he signed was
supported by consideration.
Accordingly, plaintiff has provided no reason to conclude that the magistrate
judge’s discovery order was clearly erroneous or contrary to law.
II
Plaintiff objects to Magistrate Judge Azrack’s recommendation that the Court
deny his motion for leave to amend his complaint. The Court reviews plaintiff’s objections
de novo. See 28 U.S.C. § 636(b)(1).
The magistrate judge interpreted plaintiff’s proposed amended complaint as
alleging that defendant breached its disclosure and notification obligations under ERISA.
She stated that the proposed amendment would be futile because: (1) “a plaintiff seeking
relief for failure to disclose documents under ERISA must first assert a claim under ERISA
§ 502(a)(1)(A)” and plaintiff did not affirmatively assert a claim under ERISA; (2) the
remedy for a violation of ERISA’s disclosure obligations is statutory penalties, not the
declaratory relief requested by plaintiff; (3) plaintiff received the severance Summary Plan
Description (“SPD”) and the CSP Agreement and therefore had constructive notice of the
CSP Agreement’s contents prior to signing it; (4) defendant provided plaintiff with the CSP
Guide, the CSP Severance Pay Computation and the CSP Agreement more than a month
before plaintiff signed the CSP Agreement; and (5) it is irrelevant whether plaintiff’s
managers misled him about whether he would have to execute a waiver, because oral
promises are unenforceable and cannot vary the terms of an ERISA plan.
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Plaintiff objects to the magistrate judge’s recommendation because: (1) the
recommendation converted plaintiff’s request for a pre-motion conference into a motion
for leave to amend the complaint, thereby depriving plaintiff of the opportunity to seek
leave to amend his pleadings and to address defendant’s arguments on futility; (2) the
magistrate judge mistakenly assumed plaintiff’s amended complaint sought relief for
breach of disclosure and notification obligations, when in fact the amendment contended
that defendant “misinformed, misled and/or failed to give Gibbs notice”; (3) the magistrate
judge incorrectly adopted defendant’s assertion that plaintiff had access to the SPD and
CSP documents; (4) a “My Benefits & Pay” document received misinformed plaintiff to
believe that severance benefits were not conditioned on the signing of a waiver; and (5) the
magistrate judge made “crucial findings of fact. . . based upon self serving papers or
baseless contentions submitted by defendants.” Pl’s Objection at 2-3. Plaintiff also
submitted a Second Proposed Amended Complaint.
As a preliminary matter, the magistrate judge did not deprive plaintiff of an
opportunity to seek leave to amend his pleadings: plaintiff’s letter requesting a pre-motion
conference presented arguments in support of the proposed amendment and attached a
copy of his proposed amended complaint. The magistrate judge never prevented plaintiff
from responding to defendant’s letter in opposition to his motion, and plaintiff had ample
time to do so. In addition, the magistrate judge’s interpretation of plaintiff’s proposed
amended complaint– that plaintiff alleged a breach of ERISA’s disclosure and notification
obligations– was reasonable. The proposed amended complaint alleges, for example, that
defendant “failed to give Gibbs notice” that severance benefits would be conditioned upon
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his signing a waiver. Proposed Amended Compl. ¶ 45.
Plaintiff raises no objection to the law applied by Magistrate Judge Azrack.
The recommendation correctly states that ERISA only provides statutory remedies for
violations of the disclosure and notification obligations. See Schlenger v. Fidelity Employer
Services Co., LLC, 785 F. Supp. 2d 317, 337 (S.D.N.Y. 2011) (citing Varity Corp. v. Howe, 516
U.S. 489, 515 (1996)). Plaintiff’s claim for declaratory relief would therefore be futile.
Further, plaintiff’s allegation that his managers misled him when they explicitly promised
he would not have to sign a waiver could not support a claim that defendant violated
ERISA notice requirements. As the magistrate judge correctly noted, oral promises are
“unenforceable under ERISA and therefore cannot vary the terms of an ERISA plan.”
Perreca v. Gluck, 295 F.3d 215, 225 (2d Cir. 2002). Accordingly, plaintiff’s proposed
amended complaint is futile.
In the alternative, the Second Proposed Amended Complaint that plaintiff
attaches to his objection in order to clarify “in more specific terms, the basis of the proposed
claim or causes of action alleged pursuant to ERISA § 502(a)(3)” is still futile. Pl’s Objection
at 10. Plaintiff now claims that he has presented a viable claim for declaratory relief under
ERISA because defendant “breached [its] fiduciary duty to provide complete and accurate
information to plan participants with the care, skill, prudence and diligence. . . in violation
of ERISA § 404(a)(1)(A) and (B).” Pl’s Objection at 9. Plaintiff correctly states that a plan
participant may bring an individual action for equitable relief for a breach of fiduciary
duty. See Varity Corp., 516 U.S. at 507-15. A defendant may breach its fiduciary duty
through “affirmative misrepresentations” or “failure to provide completely accurate plan
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information.” Devlin v. Empire Blue Cross and Blue Shield, 274 F.3d 76, 89 (2d Cir. 2001). As
the magistrate judge already observed based upon plan documents and the statement of
facts in plaintiff’s Proposed Amended Complaint, however, plaintiff received documents
that accurately explained that receipt of a severance package would be conditioned upon
signing a waiver. See Discovery Order at 8; Prop. Am. Compl. ¶ 22. Plaintiff alleges that
the informal “My Benefits and Pay” document was misleading and inaccurate because it
did not mention that the waiver was a condition of receiving severance benefits. Pl’s
Objection at 11. This does not amount to an affirmative misrepresentation, nor does it
create any inconsistency with the terms of the severance plan. Even accepting all of the
factual allegations in plaintiff’s Second Proposed Amended Complaint as true, there is
nothing to support a claim that defendant breached its fiduciary duties under ERISA.
III
For the foregoing reasons, Magistrate Judge Azrack’s discovery order
denying in part plaintiff’s motion to compel is affirmed. The discovery order was neither
clearly erroneous nor contrary to law. In addition, the Court adopts the magistrate judge’s
recommendation that plaintiff be denied leave to amend his complaint because plaintiff’s
proposed amendment is futile.
SO ORDERED.
____________________________
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
November 28, 2011
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