Caufield et al v. Colgate-Palmolive Co et al

Filing 35

OPINION AND ORDER re: 25 MOTION to Dismiss Plaintiffs' Complaint. filed by Employee Relations Committee of Colgate-Palmolive Co., Colgate-Palmolive Co., Daniel Marsili, Colgate-Palmolive Co. Employee's Ret. Income Plan , Laura Flavin. For the foregoing reasons, Defendants Colgate-Palmolive Co., Colgate-Palmolive Co. Employees' Retirement Income Plan, Laura Flavin, Daniel Marsili and the Employee Relations Committee of Colgate-Palmolive Co.'s motion to dismiss is DENIED. The Clerk of Court is directed to close the motion at Docket No. 25. (Signed by Judge Lorna G. Schofield on 2/24/2017) (kgo) Modified on 2/24/2017 (kgo).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
PAUL CAUFIELD, et al.,
:
Plaintiffs, :
:
-against:
:
COLGATE-PALMOLIVE CO., et al.,
:
:
Defendants. :
------------------------------------------------------------ X

2/24/2017

16 Civ. 4170 (LGS)
OPINION AND ORDER

LORNA G. SCHOFIELD, District Judge:
This is a continuation of the litigation in In re Colgate-Palmolive Co. ERISA Litigation,
Master File No. 07 Civ. 9515 (“Colgate I”). Plaintiffs Paul Caufield and Rebecca Staley allege
that Defendants Colgate-Palmolive Co. (“Colgate”), Colgate-Palmolive Co. Employees’
Retirement Income Plan (the “Plan”), Laura Flavin, Daniel Marsili and the Employee Relations
Committee of Colgate-Palmolive Co. (the “Committee”) denied certain Residual Annuity
benefits to which Plaintiffs are entitled under the Plan. They assert claims against Defendants
for violations of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et
seq. (“ERISA”), and for contempt of the Court’s Final Order and Judgment in Colgate I.
Defendants move to dismiss Plaintiffs’ claims pursuant to Federal Rule of Civil Procedure
12(b)(6) on the grounds that the claims were released in the settlement agreement from Colgate
I, are time barred and fail to state a claim. For the following reasons, the motion is denied.
BACKGROUND
For purposes of Defendants’ motion, the following facts are drawn from the Complaint
and documents integral to the Complaint. The facts are construed in the light most favorable to

Plaintiffs as the non-moving party. See Littlejohn v. City of New York, 795 F.3d 297, 306 (2d
Cir. 2015).
Plaintiffs are former employees of Colgate. Plaintiff Paul Caufield was employed by
Colgate from 1977 to 1999. Plaintiff Rebecca Staley was employed by Colgate from 1979 to
1994. Both Plaintiffs were and are participants in the Plan, which is sponsored by Colgate and
administered by the Committee. The Committee is comprised of selected Colgate officials,
including Defendants Laura Flavin and Daniel Marsili.
The Plan is a defined benefit pension plan. As such, the Plan guarantees that each
participant will receive a certain level of benefits, known as accrued benefits, expressed as the
amount the participant would receive annually as an annuity upon reaching normal retirement
age, here, age 65. A participant’s accrued benefit is determined under the terms of the Plan.
Prior to July 1, 1989, the Plan used a final average pay formula, meaning in simplest terms that
the level of benefits was based on the participant’s length of service and average salary during
her final years of service. Effective July 1, 1989, the Plan became a cash balance plan, which
essentially uses a career average pay formula. Specifically, the new plan formula defines a
participant’s benefits in terms of a Personal Retirement Account (“PRA”) balance, which reflects
accumulated monthly pay-based credits and interest. Upon retirement, the PRA balance is
converted into an annuity or, if preferred, paid as a lump sum.
Because the benefits provided under the new formula would in some circumstances be
less valuable than the benefits provided under the old formula, Colgate enacted protective Plan
provisions and offered enhanced benefits for participants with pre-July 1989 benefits. These
provisions and benefits are set forth in Plan Appendices B, C and D. First, all such participants
were to receive the larger of the annuity calculated under (1) the Plan’s pre-July 1989 final
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average pay formula, or (2) the Plan’s new PRA formula. Second, these participants had the
option to continue earning benefits under the pre-July 1989 final average pay formula by making
employee contributions to the Plan. Participants who selected this option were to receive the
larger of the annuity calculated under (1) the Plan’s pre-July 1989 final average pay formula as
continued in effect post-July 1, 1989, or (2) the Plan’s new PRA formula plus an annuity based
on the employee’s contributions.
Caufield and Staley had pre-July 1989 benefits and opted to make employee
contributions. When they retired from Colgate in 1999 and 1994, respectively, they each elected
to receive their benefits under the Plan in the form of a lump sum. Colgate paid Caufield
$104,386.00 and Staley $22,425.64.
In 2005, Colgate acknowledged that the lump sums the Plan had been paying to
participants with pre-July 1989 benefits were less than the lump sums to which they were
statutorily entitled. The deficiency in the lump sum payments meant that Defendants had
deprived Plan participants of some of their non-forfeitable pension benefits. To correct this
problem, Colgate enacted the Residual Annuity Amendment (“RAA”) in 2005. The RAA
amended the Plan and granted an additional annuity benefit to any participant with pre-July 1989
benefits who elected a lump sum and whose benefit under Appendices B, C or D was greater
than her benefit under the PRA formula. The RAA was effective retroactively to July 1, 1989.
Defendants did not implement the RAA until 2014 and have never provided Plan participants an
updated summary plan description (“SPD”) or summary of material modifications (“SMM”)
disclosing the RAA.
In 2007, three lawsuits were filed against the Plan alleging that it had miscalculated the
pension benefits of several thousand participants since July 1, 1989. The cases were
3

consolidated into Colgate I. In May 2010, after three years of litigation, the parties reached an
agreement in principle to settle the case. Up to that point, Defendants had not produced a copy
of the RAA in response to discovery requests, and counsel for the plaintiffs in Colgate I were not
aware of the RAA. Once plaintiffs’ counsel received a copy of the RAA in July 2011, they
insisted that all RAA claims be carved out of the settlement agreement. Colgate and the Plan
eventually agreed, and on October 9, 2013, the parties executed a settlement agreement. The
settlement agreement excluded any claims “that are based upon, or arise under” the RAA and
prohibited the Plan or Colgate from asserting in any future administrative or legal proceeding
that claims under the RAA were released under the settlement agreement. The Court approved
the settlement agreement and noted that “certain claims known as the Residual Annuity Claims
were excluded from the scope of the settlement.” In re Colgate-Palmolive Co. ERISA Litig., 36
F. Supp. 3d 344, 346–47 (S.D.N.Y. 2014).
In August 2014, Defendants granted additional benefits under the RAA to a few hundred
Plan participants. Caufield received a Residual Annuity of $57.94 per month plus a gross
payment of $16,262.54, representing missed payments of his Residual Annuity from the date his
lump sum pension benefit was paid, accumulated with interest. Staley received no Residual
Annuity.
In a letter to the Plan Administrator dated July 30, 2014, Staley stated that it had come to
her attention that she should be receiving an annuity benefit in addition to her original lump sum
benefit. She requested that the Plan provide her the annuity benefit and an explanation of how it
was calculated. By letter dated November 4, 2014, Flavin, Colgate’s Vice President for Global
Compensation and Benefits, responded on behalf of the Committee and denied Staley’s claim for
an annuity benefit.
4

Counsel for Plaintiffs subsequently requested additional documents, records and
information from Defendants and, by letter dated April 6, 2015, appealed both (1) the denial of
Staley’s claim for an annuity benefit, and (2) the determination of the amount of Caufield’s
Residual Annuity.1 Marsili, Colgate’s Senior Vice President, Global Human Resources, denied
Staley’s claims appeal by letter dated June 4, 2015. Marsili asserts in the letter that Staley’s
claims were released as part of the settlement agreement in Colgate I. On June 3, 2016,
Plaintiffs filed this putative class action lawsuit.
STANDARD
“On a motion to dismiss, all factual allegations in the complaint are accepted as true and
all inferences are drawn in the plaintiff’s favor.” Littlejohn, 795 F.3d at 306. “In determining
the adequacy of the complaint, the court may consider any written instrument attached to the
complaint as an exhibit or incorporated in the complaint by reference, as well as documents upon
which the complaint relies and which are integral to the complaint.” Subaru Distribs. Corp. v.
Subaru of Am., Inc., 425 F.3d 119, 122 (2d Cir. 2015) (citation omitted); see also Beauvoir v.
Israel, 794 F.3d 244, 248 n.4 (2d Cir. 2015).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, 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)).
“Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. “[W]hatever documents may properly be considered in
connection with the Rule 12(b)(6) motion, the bottom-line principle is that ‘once a claim has
1

Plaintiffs are beneficiaries of each other and assert claims in that capacity in addition to the
claims they assert as participants in the Plan.
5

been stated adequately, it may be supported by showing any set of facts consistent with the
allegations in the complaint.’” Roth v. Jennings, 489 F.3d 499, 510 (2d Cir. 2007) (quoting
Twombly, 550 U.S. at 563).
DISCUSSION
A.

Release of Claims

Plaintiffs’ claims for benefits under the RAA (Count Two) are not barred by the release
in the Colgate I settlement agreement.
“A release is a species of contract and is governed by principles of contract law.” Golden
Pac. Bancorp v. F.D.I.C., 273 F.3d 509, 514 (2d Cir. 2001). The settlement agreement in
Colgate I includes a New York choice-of-law provision. See Olin Corp. v. Consol. Aluminum
Corp., 5 F.3d 10, 15 (2d Cir. 1993) (stating that even for federal causes of action, courts should
look to state law in interpreting contractual indemnity provisions). Under New York law, the
threshold question in a dispute over the meaning of a contract -- including a release -- is whether
its terms are ambiguous. VKK Corp. v. Nat’l Football League, 244 F.3d 114, 129 (2d Cir. 2001)
(applying New York law). “If the contract is capable of only one reasonable interpretation, i.e.,
is unambiguous, we are required to give effect to the contract as written.” Id. Where a contract
is ambiguous, a court may look to extrinsic evidence to determine the parties’ intent. Golden
Pac. Bancorp, 273 F.3d at 517. “[A] release may not be read to cover matters which the parties
did not desire or intend to dispose of.” Cahill v. Regan, 157 N.E.2d 505, 510 (N.Y. 1959).
The release contained in the Colgate I settlement agreement unambiguously excludes
Plaintiffs’ claims for benefits under the RAA. Three provisions within § 12 of the settlement
agreement make clear that the release does not apply to any claims under the RAA. First, the
definition of “Plaintiffs’ Released Claims” set forth in § 12(A)(1) states that “[f]or avoidance of
6

doubt, the foregoing does not include any claims arising under the Residual Annuity
Amendment.” Second, the “Residual Annuity Amendment Exclusion” described in § 12(D)(1)
states, “Notwithstanding anything else herein that could potentially be construed to the contrary,”
Plaintiffs retain all claims that “are based upon, or arise under the Residual Annuity
Amendment.” Third, § 12(D)(2) provides that “Defendant [Plan] and/or Colgate may not assert
in any future administrative or legal proceeding that the release set forth in this Agreement
releases, bars, or precludes any claims under the Residual Annuity Amendment.” These
provisions unambiguously exclude from the release any and all claims under the RAA.
Plaintiffs’ claims for benefits clearly “are based upon, or arise under” the RAA. The
RAA provides that “a Member who, under any of Appendices B, C or D, is entitled to a greater
benefit than his Accrued Benefit . . . and who chooses to receive his benefit under this Lump
Sum Payment Option . . . shall receive . . . an additional benefit.” In Count Two, Plaintiffs seek
this “additional benefit” -- a Residual Annuity for Staley and a larger Residual Annuity for
Caufield. Because the additional benefit was established by and exists only due to the RAA,
Plaintiffs’ claim for the additional benefit by definition arises under the RAA.
Defendants unpersuasively argue that Plaintiffs’ claims for benefits under the RAA are
covered by the release because they depend on arguments made in Colgate I. First, the release
by its terms prevents Plaintiffs from bringing claims that were or could have been raised in
Colgate I, not from making the same arguments in support of other, non-released claims.
Second, the RAA uses terms, such as Accrued Benefit, that are defined elsewhere in the Plan.
Deciding Plaintiffs’ claims for benefits under the RAA inevitably will involve reference to
provisions elsewhere in the Plan, but that does not change the fact that the claim arises under the
RAA.
7

The release in the Colgate I settlement agreement unambiguously excludes Plaintiffs’
claims for benefits under the RAA. Defendants’ motion to dismiss Plaintiffs’ claims for benefits
as barred by the release is therefore denied.
B.

Statute of Limitations

Because the statute of limitations is an affirmative defense, Defendants carry the burden
of showing that Plaintiffs failed to plead timely claims. See Staehr v. Hartford Fin. Servs. Grp.,
Inc., 547 F.3d 406, 425 (2d Cir. 2008) (“The lapse of a limitations period is an affirmative
defense that a defendant must plead and prove.” (citing Fed. R. Civ. P. 8(c)(1))). Dismissal
based on an affirmative defense at the complaint stage is warranted only if “it is clear from the
face of the complaint, and matters of which the court may take judicial notice, that the plaintiff’s
claims are barred as a matter of law.” Staehr, 547 F.3d at 426 (emphasis omitted) (quoting
Conopco, Inc. v. Roll Int’l, 231 F.3d 82, 86 (2d Cir. 2000)).
1. Claim for Benefits - Count II
Plaintiffs’ claims for benefits under the RAA are timely.
ERISA does not prescribe a statute of limitations period for actions to recover benefits
under ERISA § 502(a), 29 U.S.C. § 1132(a). Muto v. CBS Corp., 668 F.3d 53, 57 (2d Cir. 2012).
“Therefore . . . the applicable limitations period in this § 1132 action is ‘that specified in the
most nearly analogous state limitations statute’ of the forum state.” Id. Here, New York’s sixyear limitations period for contract actions, N.Y. C.P.L.R. § 213, applies as it is most analogous
to § 1132 actions. Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 572 F.3d
76, 78 (2d Cir. 2009). “[W]hen a federal court determines the limitations period by applying an
analogous state statute of limitations, the court nevertheless looks to federal common law to
determine the time at which the plaintiff’s federal claim accrues.” Guilbert v. Gardner, 480 F.3d
8

140, 149 (2d Cir. 2007) (discussing accrual of ERISA cause of action). Under federal common
law, a court “generally employs the discovery rule, under which a plaintiff’s cause of action
accrues when he discovers, or with due diligence should have discovered, the injury that is the
basis of the litigation.” Guilbert, 480 at 149.
Plaintiffs’ claim for benefits under the RAA could not have accrued earlier than 2011,
when Plaintiffs first learned of the RAA’s existence. Because Plaintiffs filed the Complaint in
June 2016 -- within six years of the earliest possible accrual date -- their claims for benefits are
timely, and nothing on the face of the Complaint suggests otherwise.
Defendants’ contrary arguments fail. First, Defendants argue that Plaintiffs’ claims for
benefits accrued when they elected to receive their benefits in the form of a lump sum in the
1990s because the forms provided in conjunction with that election clearly repudiated any notion
that they would receive an annuity in addition to a lump sum benefit. This argument assumes
that Plaintiffs’ claims are based on alleged miscalculations made at the time they received their
lump sums. As explained above, Plaintiffs’ claims arise under the RAA. The RAA was not
enacted until 2005; so Plaintiffs’ rights under the RAA could not possibly have accrued in the
1990s. See Bilello v. JPMorgan Chase Ret. Plan, 607 F. Supp. 2d 586, 593 (S.D.N.Y. 2009) (“A
claim addressed to the amendment of an ERISA plan accrues ‘at the earliest, on the date of the
plan amendment.’” (quoting Romero v. Allstate Corp., 404 F.3d 212, 222 (3d Cir. 2005))).
Second, Defendants rely on Ruppert v. Alliant Energy Cash Balance Pension Plan, 726
F.3d 936, 941–42 (7th Cir. 2013), to argue that the RAA did not cause a new injury to Plaintiffs
and therefore did not restart the limitations period. In addition to being non-binding in the
Second Circuit, Ruppert is factually distinguishable. In Ruppert, the plan participants challenged
the “projection rate” the defendant used to estimate the interest credits that would have accrued
9

to an early retiree’s account had he not left until normal retirement age. Id. at 939. To moot the
lawsuit, the defendant amended the plan to adjust the projection rate retroactively. Id. at 940.
The district court ruled that the amendment was a further violation of ERISA and restarted the
limitations period for participants whose claims otherwise would have been untimely. Id. at 941.
The Seventh Circuit reversed, explaining that “[i]t was indeed a fresh violation, but it did not
revive claims, based on the projection rate, extinguished by the statute of limitations because
they had accrued when the claimants had received their lump sum payouts more than six years
before suit was filed.” Id. at 941–42. Here, the RAA did not adjust a rate used to determine
benefits but rather created an entirely new benefit. Plaintiffs’ current claims were not
extinguished and revived by the RAA; they arose for the first time after the RAA was enacted.
Ruppert’s holding is therefore inapposite in this case.
Defendants’ motion to dismiss Plaintiffs’ claims for benefits as untimely is denied.
2. Plan Document Violations - Count IV
In Count Four, Plaintiffs allege that Defendants violated ERISA § 102, 29 U.S.C. § 1022,
by failing to disclose and describe the RAA or the Residual Annuity benefit in an SPD or SMM.
This claim is timely.
ERISA does not prescribe a statute of limitations for disclosure claims under § 102. See
Osberg v. Foot Locker, Inc., 656 F. Supp. 2d 361, 369–70 (S.D.N.Y. 2009) (“Osberg I”) (noting
in case with a § 102 claim that “ERISA provides no statute of limitations for civil enforcement
actions other than breach of fiduciary duty claims under ERISA § 413”), aff’d in part and
vacated in part on other grounds, 555 F. App’x 77 (2d Cir. 2014). As stated above, in this
situation courts apply the most similar state statute of limitations and look to federal common
law to determine when the cause of action accrued. Guilbert, 480 F.3d at 148–49.
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The New York statute of limitations applicable to Plaintiffs’ disclosure claims is the
three-year period governing statutory violations, C.P.L.R. § 214. Osberg v. Foot Locker, Inc.,
907 F. Supp. 2d 527, 533 (S.D.N.Y. 2012) (“Osberg II”), aff’d in part and vacated in part on
other grounds, 555 F. App’x 77 (2d Cir. 2014) (“[W]e need not conclusively decide whether
[plaintiff’s] § 102(a) claim is subject to a three- or six-year statute of limitations.”). In Osberg I,
the court initially determined that a six-year limitations period applies to disclosure claims
because “the judicially inferred statute of limitations for ERISA actions in New York State is six
years, based on the statute of limitations for contract actions.” 656 F. Supp. 2d at 370 (citing
Slupinski v. First Unum Life Ins. Co., 554 F.3d 38, 55 (2d Cir. 2009)). After the Supreme Court
decided CIGNA Corp. v. Amara, 563 U.S. 421 (2011), the court in Osberg held that the
appropriate limitations period for disclosure claims is three years. Osberg II, 907 F. Supp. 2d at
533. “Amara has now clarified that an SPD is not a contract -- its terms are not subject to
enforcement,” so the most similar New York statute of limitations is not the six-year period
governing contract claims but the three-year period governing statutory violations. Id.; see
Amara, 563 U.S. at 436 (referring to both SPDs and SSMs, “we cannot agree that the terms of
statutorily required plan summaries (or summaries of plan modifications) necessarily may be
enforced . . . as the terms of the plan itself”).
Under the discovery rule, Plaintiffs’ disclosure claims accrued when Plaintiffs
discovered, or with due diligence should have discovered, the injury that is the basis of the
litigation. Guilbert, 480 F.3d at 149. Caufield, who was a named plaintiff in Colgate I,
discovered or should have discovered the failure to disclose the RAA no later than July 2011,
when Defendants provided a copy of the RAA to his attorney. See Veal v. Geraci, 23 F.3d 722,
725 (2d Cir. 1994) (imputing attorney’s knowledge to the client for purposes of determining
11

when the client’s claim accrued). Caufield was aware of the failure to disclose by July 2011.
Applying the three-year limitations period to the July 2011 accrual date, Caufield’s disclosure
claim ordinarily would be time barred.
The Complaint, however, makes allegations that support at least a colorable argument for
equitable tolling of the limitations period such that Caufield’s claim would be timely. See Veltri
v. Bldg. Serv. 32B-J Pension Fund, 393 F.3d 318, 324 (2d Cir. 2004) (“[W]e hold that failure to
comply with the regulatory obligation to disclose the existence of a cause of action to the plan
participant whose benefits have been denied is the type of concealment that entitles plaintiff to
equitable tolling of the statute of limitations.”). The Complaint alleges in substance that
Defendants hid the existence of the RAA from Plaintiffs, and entered into a settlement in
principle in May 2010 for the underpayment of benefits under the Plan. Although not explicitly
pleaded, the Complaint implies that the resulting settlement could have included a broad release
including Plaintiff’s as yet undiscovered RAA claims. After Plaintiffs became aware of the
RAA, they insisted that the ultimate October 9, 2013, settlement agreement exclude the RAA
claims. Because these alleged facts may provide a basis to toll the statute of limitations until
October 2013, Defendant has not shown that “it is clear from the face of the complaint, and
matters of which the court may take judicial notice, that the plaintiff’s claims are barred as a
matter of law.” Staehr, 547 F.3d at 426. Accordingly, Caufield’s disclosure claim survives
Defendants’ timeliness challenge, at least at this stage in the litigation.
Staley’s disclosure claim is also timely. She was a class member but not a named
plaintiff in Colgate I. The knowledge of class counsel in Colgate I cannot be imputed to
unnamed class members prior to December 16, 2013, when the Court preliminarily certified the
settlement class in Colgate I -- and perhaps not even then. See Schwab v. Philip Morris USA,
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Inc., No. 04 Civ. 1945, 2005 WL 2467766, at *3 (E.D.N.Y. Oct. 6, 2005) (“Unnamed class
members have not yet ‘consented’ to be represented by putative class counsel; these attorneys
cannot be their agent for purposes of imputing knowledge of danger. The role of class counsel is
akin to that of a judicially appointed fiduciary, not that of a privately retained attorney.” (citing
Restatement (Second) of Agency § 14F)). Applying the three-year limitations period to the
earliest possible accrual date in December 2013, Staley’s disclosure claim is timely. In sum,
Defendants’ motion to dismiss Count Four is denied.
3. Breach of Fiduciary Duty - Count V
Count Five alleges that Defendants breached their fiduciary duties under ERISA §
404(a), 29 U.S.C. § 1104(a), by (1) concealing the RAA’s existence and (2) willfully misreading
and misrepresenting the RAA in the course of determining Plaintiffs’ benefits under the RAA.
Count Five is timely as to both alleged breaches.
For breach of fiduciary duty claims, ERISA § 413, 29 U.S.C. § 1113, prescribes “three
alternative limitations periods” that “depend[] on the underlying factual circumstances.” Janese
v. Fay, 692 F.3d 221, 227–28 (2d Cir. 2012).
The first period, applicable in the absence of any special circumstances, is six
years from the date of the last action that was part of the breach. The second
period is three years, applicable and beginning when a putative plaintiff has
“actual knowledge” of the violation . . . . The third period is six years, applicable
where a complaint alleges fraud or concealment with the requisite particularity.
Id. at 228 (internal citations omitted); see 29 U.S.C. § 1113.
Plaintiffs’ breach of fiduciary duty claim based on concealment of the RAA is governed
by the third period -- six years -- prescribed by § 1113. To qualify for the third period, a plaintiff
must allege fraud or concealment in accordance with Federal Rule of Civil Procedure 9(b)’s
particularity requirement, which requires a plaintiff to “specify the time, place, speaker, and
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content of the alleged misrepresentations” or omissions. Caputo v. Pfizer, Inc., 267 F.3d 181,
191 (2d Cir. 2001); see Fin. Guar. Ins. Co. v. Putnam Advisory Co., LLC, 783 F.3d 395, 403 (2d
Cir. 2015) (the same pleading requirements apply whether the fraud is based on statements or
omissions). Here, the Complaint satisfies Rule 9(b) by alleging that (1) since the RAA was
enacted in 2005, (2) in whatever communications were or should have been provided to Plan
participants, (3) Defendants including the Plan’s sponsor and administrator, (4) failed to disclose
the existence of the RAA. Also, contrary to Defendants’ argument, failing to disclose the RAA
may be a breach of fiduciary duty. Although “the act of amending a pension plan does not
trigger ERISA’s fiduciary provisions,” the subsequent decision to conceal and delay
implementation of the RAA is a matter of plan administration, to which ERISA’s fiduciary
duties apply. Lockheed Corp. v. Spink, 517 U.S. 882, 890–91 (1996).
The third period prescribed by § 1113 “is tolled until the plaintiff discovers, or should
with reasonable diligence have discovered, the breach.” Janese, 692 F.3d at 228. Plaintiffs did
not know of and could not reasonably have discovered Defendants’ alleged concealment of the
RAA until July 2011, when Defendants first produced a copy of the RAA to Caufield’s attorney.
Applying the six-year limitations period to the July 2011 accrual date, Plaintiffs’ fiduciary duty
claim based on concealment of the RAA is timely.
Plaintiffs’ breach of fiduciary duty claim based on the alleged misreading and
misrepresentation of the RAA during Plaintiffs’ claims process is also timely, regardless of
which limitations period applies. The earliest date this claim could have accrued was in August
2014, when Defendants first informed Caufield of the amount they determined he was entitled to
under the RAA. Even applying the three-year period prescribed by § 1113, Plaintiffs’ claims are
timely. Defendants’ motion to dismiss Count Five is denied.
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C.

Failure to State a Claim
1. Denial of Right to Documents - Count I

Count One adequately pleads a claim for relief under ERISA § 502(a), 29 U.S.C. §
1132(a), as result of Defendants’ denial of Plaintiffs’ requests for documents, records and
information. A plan’s claims procedure, in order to comply with the ERISA regulations, must
“[p]rovide that a claimant shall be provided, upon request and free of charge, reasonable access
to, and copies of, all documents, records, and other information relevant to the claimant’s claim
for benefits.” 29 C.F.R. § 2560.503-1(h)(2)(iii). The regulations also define relevance:
A document, record, or other information shall be considered “relevant” to a
claimant’s claim if such document, record, or other information: (i) Was relied
upon in making the benefit determination; (ii) Was submitted, considered, or
generated in the course of making the benefit determination, without regard to
whether such document, record, or other information was relied upon in making
the benefit determination; [or] (iii) Demonstrates compliance with the
administrative processes and safeguards required pursuant to paragraph (b)(5) of
this section in making the benefit determination.
29 C.F.R. § 2560.503-1(m)(8).
Following the denial of her claim for benefits under the RAA, Staley requested all
relevant documents, including “all documents (of any kind) and correspondence that you [the
Committee] and/or Ms. Flavin between yourselves and/or with other persons regarding the
November 4, 2014 denial letter and the calculations referenced in that letter.” Defendants argue
that everything relevant under the regulations was produced to Plaintiffs, as evidenced by the
documents attached to the Complaint. This argument is misplaced as it goes to the merits of the
claim, not the sufficiency of the pleading. Also, the inclusion of several versions of the Plan
document and SPD with the Complaint does not make it implausible that Defendants have
additional relevant material. For example, the Complaint alleges that Defendants possess but
15

failed to produce correspondence between Flavin, other members of the Committee and/or other
persons, including in-house lawyers, consultants, actuaries, outside benefits counsel and
litigation counsel in Colgate I. Such materials would be relevant to Plaintiffs’ claims if they
were “submitted, considered, or generated in the course of making the benefit determination,”
even if they ultimately were not relied upon. 29 C.F.R. § 2560.503-1(m)(8)(ii). Drawing all
inferences in Plaintiffs’ favor at this stage of the proceedings, the Complaint states a claim for
denial of the right to documents. Defendants’ motion to dismiss Count One is therefore denied.
2. Contempt of Court - Count III
Count Three adequately pleads contempt of court. A party moving for contempt “must
establish that (1) the order the contemnor failed to comply with is clear and unambiguous, (2) the
proof of noncompliance is clear and convincing, and (3) the contemnor has not diligently
attempted to comply in a reasonable manner.” Latino Officers Ass’n City of N.Y., Inc. v. City of
N.Y., 558 F.3d 159, 164 (2d Cir. 2009).
Here, the order Defendants allegedly failed to comply with is the Court’s July 8, 2014,
order approving the Colgate I settlement. That order incorporated by reference § 12 of the
settlement agreement, which states that “Defendant [Plan] and/or Colgate may not assert in any
future administrative or legal proceeding that the release set forth in this Agreement releases,
bars, or precludes any claims under the Residual Annuity Amendment.” The Complaint alleges
that Defendants repeatedly asserted in their denial of Staley’s claims appeal that the release
barred her claims, despite the language in the settlement agreement and incorporated in the
Court’s order that appears to prohibit them from doing so. As the Complaint pleads all the
elements required for a contempt motion, Defendants’ motion to dismiss Count Three is denied.

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CONCLUSION
For the foregoing reasons, Defendants Colgate-Palmolive Co., Colgate-Palmolive Co.
Employees’ Retirement Income Plan, Laura Flavin, Daniel Marsili and the Employee Relations
Committee of Colgate-Palmolive Co.’s motion to dismiss is DENIED.
The Clerk of Court is directed to close the motion at Docket No. 25.
Dated: February 24, 2017
New York, NY

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