Ferro et al v. Metropolitan Center for Mental Health et al

Filing 29

MEMORANDUM AND ORDER granting in part and denying in part 13 Motion to Dismiss. For the foregoing reasons, MCMH's motion to dismiss (Docket # l3) is GRANTED with respect to plaintiffs' claims under RICO and FICA. MCMH's motion to dis miss is GRANTED with respect to plaintiffs' claims under ERISA against defendants Pardo, Yellin, Belgray, Benjamin, Diaz, Goudie, Janssen, Katz, Rabinove, Bird, and Stem, and DENIED with respect to plaintiffs' claims under ERISA against defendant Metropolitan Center for Mental Health. SO ORDERED. (Signed by Judge P. Kevin Castel on 3/26/2014) (ajs)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------------------------------J{
MARIA GONZALEZ FERRO, ALEXANDRA
CATTARUZZA, MARA OLIVA, SILVANA
BONIL, CATALINA ANGEL, LUMA RIVERA,
MARIA PAZ CUEVAS, MARCIA ZORRILLA,
EULALIA PEREZ, DANIEL CRIADO, ERIC
LOSADA, RICARDO VACCA, and HEYDI DE
LA CRUZ on their own behalf and on behalf of a
class similarly situated,
Plaintiffs,
-against-

USDSSDNY
DOCUMENT
ELECTRONICALLY FILED

__ I

DOC #: =--_~~
DATE FILED: 3-;" 7-ltj

13 Civ. 2347 (PKC)
MEMORANDUM
AND ORDER

METROPOLITAN CENTER FOR MENTAL
HEALTH, ANDREW PARDO, GENE YELLIN,
DAVID BELGRAY, RUBY BENJAMIN,
JOSEPHINE DIAZ, TERESA GOUDIE,
YVETTE JANSSEN, HOWARD KATZ, BETH
RABINOVE, SHARLENE BIRD and JUSTIN
STERN,
Defendants.
-----------------------------------------------------------J{
CASTEL, U.S.D.J.
Plaintiffs Maria Gonzalez Ferro, AleJ{andra Catlaruzza, Mara Oliva, Silvana
Boni!, Catalina Angel, Luma Rivera, Maria Paz Cuevas, Marcia Zorrilla, Eulalia Perez, Daniel
Criado, Eric Losada, Ricardo Vacca, and Heydi de la Cruz bring this putative class action against
defendants Metropolitan Center for Mental Health, its eJ{ecutive director, Andrew Pardo, and
directors Gene Yellin, David Belgray, Ruby Benjamin, Josephine Diaz, Teresa Goudi, Yvette
Janssen, Howard Katz, Beth Rabinove, Sharlene Bird, and Justin Stem (collectively, "MCMH")
alleging claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18

U.S.C. § 1964(c), the Federal Insurance Contributions Act ("FICA"), 26 U.S.C. § 3111, and the
Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(B).
Plaintiffs allege that MCMH has engaged in a pattern of employing foreign
workers as full-time employees, but internally classifying them as independent contractors in
order to avoid paying taxes and providing employee benefits. MCMH now moves to dismiss all
claims for failure to state a claim pursuant to Rule 12(b)(6), Fed. R. Civ. P. (Docket # 13.)
The Court concludes that the First Amended Complaint (Docket # 10) fails to
state a claim under RICO or FICA, but does state a claim under ERISA against the Metropolitan
Center for Mental Health. For reasons further explained, MCMH's motion is granted with
respect to plaintiffs' claims under RICO and FICA. MCMH's motion to dismiss is granted with
respect to plaintiffs' claims under ERISA against defendants Pardo, Yellin, Belgray, Benjamin,
Diaz, Goudie, Janssen, Katz, Rabinove, Bird, and Stem, and denied with respect to plaintiffs'
claims under ERISA against defendant Metropolitan Center for Mental Health.
BACKGROUND
The following facts are taken from the First Amended Complaint (the "FAC"),
and matters of which judicial notice may appropriately be taken. See Chambers v. Time Warner,
Inc., 282 F.3d 147, 152-53 (2d Cir. 2002). All facts are assumed to be tme for the purpose of
deciding defendants' motion to dismiss. All reasonable inferences are drawn in favor of the
plaintiffs as non-movants. See Inre Elevator Antitmst Litig., 502 F.3d 47,50-51 (2d Cir. 2007)
(per curiam).
Plaintiffs are foreign-educated mental health therapists who are or were employed
by MCMH between 1998 and 2012. (First Am. Compl. ("FAC")

~

9.) Defendant Metropolitan

Center for Mental Health is a not-for-profit corporation incorporated in New York with its
principal place of business in Manhattan.

M

~

4.) It functions as a licensed psychiatric clinic

-2-

under the supervision of the New York State Department of Health. (Id.) At all relevant times,
defendant Andrew Pardo was employed as its Executive Director, and the other named
defendants were members ofthe Board of Directors. (hl, ~~ 5-6.)
In order to hire plaintiffs, MCMH sponsored their immigration and represented,
by mail, to the United States Immigration and Naturalization Service (the "INS") that they would
be hired as salaried employees. (hl, ~~ 3, 12.) After being hired, plaintiffs were treated no
differently than other furi~time employees. (Id.

~ 9.) MCMH controlled most aspects of their

work, including, inter alia, their hours, their clients, their offices, and their attire. (Id.)
Despite their treatment as full-time employees, plaintiffs were classified as
"independent contractors" in MCMH's filings with the Internal Revenue Service (the "IRS"), the
New York State Department of Labor, and the New York State Income Tax Depmtment. (hl,
~

11.) As a consequence of this classification, plaintiffs were responsible for paying their own

Social Security tax payments, were not given access to employee benefits plans maintained by
MCMH, such as health and retirement, and were not provided other employee benefits described
in MCMH's "Personnel Policies and Procedures Manual," including oveltime pay, vacation
time, or sick leave. (Id.

~~

10, 19.)

Plaintiffs allege that each mailing to the INS regarding a plaintiff's future
employment with MCMH constituted an instance of mail fraud. (Id.

~

14.) Plaintiffs further

allege that when all the mailings are taken as a whole, they constitute a pattern of racketeering
activity causing the loss of plaintiffs' beneficial working conditions in violation of RICO, 18
U.S.C. § 1964(c). (Id. ~ 15-17, ~ 24.)' Plaintiffs also allege that, due to their rnisclassification,

I The fifth and final cause of action in the FAC states, in its entirety, that "[b]y acting as aforedescribed and
committing fraud in order to bring plaintiffs to the United States, defendants acted fraudulently, and violated 18

-3-

they were required to pay the full Social Security tax on their earnings and MCMH did not pay
the employer's share oftaxes in violation of is duties under FICA, 26 U.S.C. § 3111. (IQ, 'If'lf 1819.) Finally, plaintiffs allege that, due to their misclassification, they did not receive employee
benefits, or employee retirement benefits, which MCMH provided to other full-time employees
and seekreliefunder ERISA, 29 U.S.C. § 1132(a)(I)(B). (Id. 'If'lf 20-23.)
This COUlt has jurisdiction because federal questions are presented. 28 U.S.C.
§ 1331.
LEGAL STANDARD
To survive a motion to dismiss for failure to state a claim upon which relief can
be granted, "a complaint must contain ... sufficient factual matter, accepted as hue, to 'state a
claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662,678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007». In assessing a complaint,
COUlts draw all reasonable inferences in favor ofthe non-movant. See Elevator Antitrust Litig.,
502 F.3d at 50. Legal conclusions, however, are not entitled to any presumption of truth, and a
COUlt assessing the sufficiency of a complaint disregards them. Iqbal, 556 U.S. at 678. Instead,
the comt must examine only the well-pleaded factual allegations, if any, "and then determine
whether they plausibly give rise to an entitlement to relief." Id. at 679.
The Supreme COUlt has stated that "RICO is to be read broadly," because of both
"Congress's self-consciously expansive language and overall approach" and the statute's
"express admonition that RICO is to be liberally construed to effectuate its remedial purposes."
Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479,497-98 (1985) (internal citations and
quotation marks omitted). Notwithstanding this interpretive directive, because the "mere
U.S.C. § 1964(c), to plaintiffs' injury." (FAC ~ 24.) The Court interprets this claim to be identical to the FAC's
earlier RlCO claim. (See id. ~~ 15-17.)

-4-

assertion of a RICO claim ... has an almost inevitable stigmatizing effect on those named as
defendants ... COUIts should strive to flush out frivolous RICO allegations at an early stage of
the litigation." Katzman v. Victoria's Secret Catalogue, 167 F.R.D. 649, 655 (S.D.N.Y. 1996)
(quoting Figueroa Ruiz v. Alegria, 896 F.2d 645, 650 (1st Cir. 1990)), affd sub nom. Katzman v.
Victoria's Secret Catalogue, Div. of The Ltd., Inc., 113 FJd 1229 (2d Cir. 1997).
In addition to the pleading requirements of Rule 12(b)(6), a complaint alleging
fraud must satisfy the heightened pleading requirements of Rule 9(b), Fed. R. Civ. P., that
requires a party alleging fraud to "state with particularity the circumstances constituting fraud."
Requiring patticularity serves to give a defendant notice of the plaintiffs claim and safeguards a
defendant's reputation from "improvident" charges. See ATSI Comm" Inc. v. Shaar Fund, Ltd.,
493 F.3d 87, 99 (2d Cir. 2007). To satisfy this pleading threshold, the complaint must '''(1)
specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3)
state where and when the statements were made, and (4) explain why the statements were
fi"audulent.'" Novak v. Kasaks, 216 F.3d 300, 306 (2d Cir. 2000) (quoting Shields v. Citvtrust
Bancorp, Inc., 25 FJd 1124, 1128 (2d Cir. 1994)).
"[T]he complaint is deemed to include any written instrument attached to it as an
exhibit or any statements or documents incorporated in it by reference." Chambers v. Time
Warner, Inc., 282 FJd 147, 152 (2d Cir. 2002) (quoting Int'! AudiotextNetwork, Inc. v. Am.
Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995) (per curiatn)). "Where a document is not
incorporated by reference, the COUIt may nevertheless consider it where the complaint 'relies
heavily upon its terms and effect,' thereby rendering the document 'integral' to the complaint."
DiFolco v. MSNBC Cable L.L.C., 622 FJd 104, 111 (2d Cir. 2010) (quoting Mangiafico v.
Blumenthal, 471 FJd 391, 398 (2d Cir. 2006) (quoting Chambers, 282 FJd at 152-53)). "[A]

-5-

plaintiffs reliance on the terms and effect of a document in drafting the complaint is a necessary
prerequisite to the COUIt'S consideration of the document on a dismissal motion; mere notice or
possession is not enough." Chambers, 282 F.3d at 153. "[E]ven if a document is integral to the
complaint, it must be clear on the record that no dispute exists regarding the authenticity or
accuracy of the document.'; DiFolco, 622 F.3d at 111 (intemal quotation marks and citation
omitted).
DISCUSSION
1. MCMH's Motion to Dismiss Plaintiffs' Claims under RICO Is Granted.
Plaintiffs allege that, in order to secure their services, MCMH represented to the
INS that they would be salaried employees. According to the FAC, these communications were
fraudulent because plaintiffs were classified as independent contractors, rather than full-time
employees. (FAC

~~

11-12.) plaintiffs further allege that these allegedly fraudulent mailings to

the INS constitute a "pattem of racketeering activity" in violation of RICO.
RICO provides a private cause of action to any person injured by a criminal RICO
violation. Hemi Grp., LLC v. City of New York, 559 U.S. 1,5 (2010) (citing 18 U.S.C.

§ 1964(c». Under section 1962(c) of RICO's criminal provisions, it is "unlawful for any person
employed by or associated with any enterprise engaged in, or the activities of which affect,
interstate or foreign commerce, to conduct or pmticipate, directly or indirectly, in the conduct of
such enterprise's affairs through a pattem ofracketeering activity or collection of unlawful debt."
18 U.S.C. § 1962(c). '''Racketeering activity' is defined to include a number of so-called
predicate acts," including mail fraud. Hemi Gill., LLC, 559 U.S. at 6 (citing 18 U.S.C.

§ 1961(1».

In order to state a RICO "pmticipation" claim, a plaintiff must adequately "allege
the existence of seven constituent elements: (1) that the defendant (2) through the commission of
-6-

two or more acts (3) constituting a 'pattern' (4) of 'racketeering activity' (5) directly or indirectly
... participates in (6) an 'enterprise' (7) the activities of which affect interstate or foreign
commerce. Moss v. Morgan Stanley Inc., 719 F.2d 5,17 (2d Cir. 1983) (citing 18 U.S.C.

§ 1962). In addition, a civil RICO plaintiff must demonstrate that he or she "was injured in his
business or propelty Qy reason of a violation of section 1962." Id. (emphasis in original) (citing
18 U.S.C. § 1964(c)).
The Court assumes, without deciding, that MCMH's allegedly fraudulent
mailings to the INS are sufficiently pleaded to constitute a pattern of racketeering activity
sufficient for RICO liability.
The RICO statute defines an "enterprise" as "any individual, partnership,
corporation, association, or other legal entity, and any ... group of individuals associated in fact
although not a legal entity." 18 U.S.C. § 1961(4). In order to sufficiently allege the existence of
an enterprise, a party must plead "the existence of two distinct entities: (1) a "person"; and (2) an
"enterprise" that is not simply the same "person" referred to by a different name." Cedric
Kushner Promotions, Inc. v. King, 533 U.S. 158, 161 (2001). "[Bly viltue of the distinctness
requirement, a corporate entity may not be both the RICO person and the RICO enterprise under
section 1962(c)." Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339,
344 (2d Cir. 1994). Because a corporation may only function through the actions of its
employees and agents, a corporation's employees, together with the corporation, do not fOlm an
enterprise distinct from the corporation itself. Id.
The FAC alleges that the Metropolitan Center for Mental Health is an enterprise
under RICO and the other named defendants conducted its affairs. (See FAC ~ 17.) However,
the Metropolitan Center for Mental Health is also joined as a defendant. As such, the FAC does

-7-

not allege an enterprise distinct from the defendants under RICO and plaintiffs' claim must be
dismissed.
Had the Metropolitan Center for Mental Health not been joined as a defendant,
and merely been alleged as an enterprise under RICO, the distinctness requirement would have
been met, as corporate employees and directors are legally distinct from a corporation and have a
different legal status. See Cedric Kushner Promotions, Inc., 533 U.S. at 163-64. Because the
defect in the pleading may be cOlTected through amendment, see Rule 15, Fed. R. Civ. P., in the
interests of judicial economy, the Comt addresses whether plaintiffs' RICO claim states a claim
for relief apart from this deficiency.
In order to recover under RICO, a plaintiffs injuries must have been proximately
caused by the defendant's conduct. Hemi Orp., LLC 559 U.S. at 9. Thus, "the compensable
injury flowing from a violation of [section 1962(c)1'necessarily is the harm caused by predicate
acts sufficiently related to constitute a pattern, for the essence of the violation is the commission
of those acts in connection with the conduct of an enterprise. '" Anza v. Ideal Steel Supply
Corp., 547 U.S. 451,457 (2006) (quoting Sedima, S.P.R.L., 473 U.S. at 497).
According to plaintiffs, MCMH's allegedly fraudulent mailings to the INS caused
their ultimate halTll. (FAC

~~

14-16, 24.) The FAC does not explain how these communications

hatTlled plaintiffs. The F AC only alleges that the communications were made in order to secure
plaintiffs' services. (See id.

~

12.) For MCMH's allegedly fraudulent statements to have caused

plaintiffs' harm, it must be plausible that the misrepresentations caused plaintiffs' presence in the
United States, which, in turn, caused them to be classified by MCMH as independent contractors,
which caused the loss of wages and benefits. Though it is plausible that absent MCMH's
representations, plaintiffs would not have gained entty to the United States, it does not

-8-

necessarily follow that their mere presence here caused their alleged ultimate harm, namely their
loss of wages and benefits. The Court concludes that plaintiffs' alleged harm is too attenuated
from the alleged fraud to have been proximately caused by it.
As such, the Court concludes that the FAC fails to plausibly allege that plaintiffs'
alleged harm was proximately caused by MCMH's statements to the INS.
II. MCMH's Motion to Dismiss Plaintiff's Claims under FICA Is Granted.
Plaintiffs allege that they paid excess Social Security tax on their eamings
because MCMH did not pay its required share under the FICA provisions of the Intemal
Revenue Code (the "IRC"), 26 U.S.c. § 3111. Though plaintiffs invoke the IRC as providing a
basis for their claim, the IRC does not explicitly create a private cause of action whereby an
employee may sue an employer for a failure to make a required contribution. Spilky v.
Helphand, No. 91 CIV. 3045 (PKL), 1993 WL 159944, at *2 (S.D.N.Y. May 11, 1993).
When a private cause of action does not appear on the face of a statute, one may
be implied when (1) the plaintiff is one of a class for whose benefit the statute was enacted, (2)
there is an indication of legislative intent to either provide or deny one, (3) a private right of
action would be consistent with the "underlying purpose of the legislative scheme," and (4) the
cause of action is not one traditionally relegated to state law. Lindsay v. Ass'n ofProfl Flight
Attendants, 581 F.3d 47, 52 (2d Cir. 2009) (quoting COlt v. Ash, 422 U.S. 66, 78 (1975».
The Second Circuit has not decided whether an implied cause of action exists
under the IRC, though, finding that the tax provisions were enacted for the benefit of the federal
govemment as a revenue collection measure, and finding no legislative intent to create one,
COUltS in this District have consistently held that there is no private cause of action for alleged
violations. Reynolds v. de Silva, No. 09 Civ. 9218(CM), 2010 WL 743510, at *7 (S.D.N.Y. Feb.
24,2010) (collecting cases); Spilky, 1993 WL 159944, at *3-4.
-9-

The Court agrees that FICA was enacted for the benefit of the federal
govemment. Under the Social Security Act, taxes collected through FICA must be used to fund
Social Security. 42 U.S.C. § 911. Thus, FICA was enacted to facilitate the government's
funding of Social Security, and not for the benefit of the program's beneficiaries. See Spilky,
1993 WL 149944, at *3-4; see also McDonald v. S. Farm Bureau Life Ins. Co., 291 F.3d 718,
724 (11th Cir. 2002). Furthermore, there is no indication, either in the statutory text or the
legislative history, that Congress intended for there to be a private cause of action under FICA.
fuillky, 1993 WL 149944, at *4; DiGiovanni v. City of Rochester, 680 F. Supp. 80, 83

(W.D.N.Y. 1988); see also McDonald, 291 F.3d at 724.
Therefore, the Court concludes there is no private cause of action under FICA and
plaintiffs' claims must be dismissed.

III. MCMH's Motion to Dismiss Plaintiffs Claims under ERISA Is Denied.
Plaintiffs allege that, because they were inconectly classified as independent
contractors, MCMH did not provide them with benefits that it provided to other employees and
seek relief under ERISA.
"ERISA's central purpose is to protect beneficiaries of employee benefit plans."
In re Citigroup ERISA Litig., 662 F.3d 128, 135 (2d Cir. 2011) (intemal quotation marks and
citation omitted). Under ERISA, a patticipant or beneficiary may bring a civil action in federal
comt "to recover benefits due to him under the terms of his plan, to enforce his rights under the
tenns of the plan, or to clarify his rights to future benefits under the Mms of the plan." 29
U.S.C. § 1132(a)(I)(B). To sustain an ERISA claim, a plaintiff must allege (1) that he or she
was an employee, and (2) eligible to receive a benefit under a plan. See Karagozian v. Cotv US,
LLC, No. 10 Civ. 5482(RMB), 2011 WL 536423, at *3 (S.D.N.Y. Feb. 10,2011); Cannon v.

- 10 -

Douglas Elliman, LLC, No. 06 Civ. 7092(NRB), 2007 WL 4358456, at *7 (S.D.N.Y. Dec. 10,
2007).
Plaintiffs have alleged both that they were employees at MCMH, and, but for
their misclassification, would have received benefits as described in MCMH's "Personnel
Policies and Procedures Manual." (FAC ~~ 9-lO.)
MCMH argues that plaintiffs' ERISA claims should be dismissed because (1)
they did not exhaust ERISA's administrative remedies, (2) the statute of limitations bars
recovery for some individual plaintiffs, and (3) they failed to name the employee benefit plan as
a defendant and failed to allege that any defendants were trustees or administrators of the plan.
Failure to exhaust administrative remedies and statute of limitations are
affirmative defenses, and neither party has submitted the benefits plan at issue. See Rule 8(c),
Fed. R. Civ. P.; Pease v. Harford Life & Accident Ins. Co., 449 F.3d 435, 446 (2d Cir. 2006).
Each argument raised by MCMH potentially requires consideration of facts outside the FAC and
parties'submissions. In general, when a defense requires consideration of facts outside of the
complaint, it is inappropriate to consider it on a motion to dismiss, unless "the facts necessary to
establish the defense are evident on the face of the complaint." See Kelly-Brown v. Winfrey,
717 F.3d 295,308 (2d Cir. 2013).
First, there is a "firmly established federal policy favoring exhaustion of
administrative remedies in ERISA cases." Pease, 449 F.3d at 443 (internal quotation marks and
citation omitted). Because failure to exhaust is an affirmative defense, MCMH, as its proponent,
has the burden of proof. Garanti Finansal Kiralama A.S. v. Aqua Marine & Trading Inc., 697
F.3d 59, 72 (2d Cir. 2012) (citing Sad Louis Feraud Int'! v. Viewfinder, Inc., 489 F.3d 474,484

- 11 -

n.7 (2d Cir. 2007». Consequently, there is no requirement that a plaintiff plead exhaustion in a
complaint under ERISA. See Grullon v. City of New Haven, 720 F.3d 133, 141 (2d Cir. 2013).
Here, the F AC is silent as to whether plaintiffs exhausted their administrative
remedies. (See FAC ~~ 10, 20-23.) As such, it may not be said that the affirmative defense of
failure to exhaust appears on the face of the complaint and the COUIt will not consider it at this
time.
Second, in actions brought in this District under section 1132(a)(1 )(B) of ERISA,
the statute of limitations is six years from the time there has been a repudiation by a defendant
which is clear and a plan beneficiary has actual or constructive knowledge of it. Carey v. Int'l
Bhd. ofElec. Workers Local 363 Pension Plan, 201 F.3d 44, 48 (2d Cir. 1999); Miles v. N.Y.
State Teamsters Conference Pension & Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 598
(2d Cir. 1983). Thus, a claim will accrue when a plaintiff "discovers, or with due diligence
should have discovered, the injury that is the basis of the litigation." Carey, 201 F.3d at 48
(internal quotation marks and citation omitted).
MCMH argues that plaintiffs' claims accrued at the time of their hire and alleged
misclassification as independent contractors. According to the F AC, plaintiffs were classified as
independent contractors at all times until 2012, though they were treated as full-time employees.
(FAC

~~

9-10.) The FAC makes no mention of whether plaintiffs knew oftheir alleged

eligibility for any employee benefit plan. (See id.) FUither, the FAC alleges that plaintiffs were
foreign nationals who MCMH brought to the United States. (Id.

~

12.) Based on the facts

alleged, it is plausible that plaintiffs, as foreigners, would have no reason to either investigate, or
know of, MCMH's employee benefit plans. Cf. Schultz v. Texaco Inc., 127 F. Supp. 2d 443,
448 (S.D.N.Y. 2001) (fmding plaintiffs should have been aware of a change in status, and

- 12 -

conesponding loss of benefits, when the source of their paychecks changed). Consequently,
absent additional information, the COUlt cannot determine when plaintiffs reasonably should
have been aware of their claims and whether the claims are timely .
.Finally, '" [i]n a recovery of benefits Claim, only the plan and the administrators
and trustees of the plan in their capacity as such may be held liable.'" Crocco v. Xerox Corp.,
137 F.3d 105, 107 (2d Cir. 1998) (quoting Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d
Cir. 1989)). ERISA defines an "administrator" as "(i) the person specifically so designated by
the terms of the instrument under which the plan is operated; (ii) if an administrator is not so
designated, the plan sponsor, or; (iii) in the case of a plan for which an administrator is not
designated and a plan sponsor cannot be identified, such other person as the Secretary may by
regulation prescribe." 28 U.S.C. § 1002(16)(A). In the case of a plan maintained by a single
employer, a "plan sponsor" is defined as the "employer." 28 U.S.C. § 1002(16)(B)(i). "The
term 'employer' means any person acting directly as an employer, or indirectly in the interest of
an employer, in relation to an employee benefit plan." 28 U.S.C. § 1002(5).
No party has submitted any documentation regarding MCMH's employee benefits
plan or the plan administrators, and no information regarding the plan or its administrators
appears in the F AC, which describes the plan as being "maintained" by the Metropolitan Center
for Mental Health. (See FAC ~ 22.)
Absent any information to the contrary, it is plausible that, as an employer, the
Metropolitan Center for Mental Health acted as the plan administrator and sponsor. However,
. the other named defendants are not alleged to have acted "in relation to an employee benefit
plan" and are merely alleged to be directors and officers. (See id.

~~

5-6.) Individuals may not

be liable for corporate ERISA obligations solely by virtue of their status as directors or officers

- 13 -

of a corporation. Sasso v. Cervoni, 985 F.2d 49,50 (2d Cir. 1993). Without any information
alleged regarding an individual's relationship with a benefit plan, the FAC does not plausibly
allege that the other named defendants were plan administrators.
Accordingly, the Court concludes that the F AC plausibly alleges claims under
ERISA against the Metropolitan Center for Mental Health, but not the other named defendants.
CONCLUSION
For the foregoing reasons, MCMH's motion to dismiss (Docket # l3) is
GRANTED with respect to plaintiffs' claims under RICO and FICA. MCMH's motion to
dismiss is GRANTED with respect to plaintiffs' claims under ERISA against defendants Pardo,
Yellin, Belgray, Benjamin, Diaz, Goudie, Janssen, Katz, Rabinove, Bird, and Stem, and
DENIED with respect to plaintiffs' claims under ERISA against defendant Metropolitan Center
for Mental Health.

SO ORDERED.

P. evin Castel
United States District Judge
Dated: New York, New York
March 26, 2014

- 14 -