Cattarin v. Kraft Foods North America, Inc. TIP Plan

Filing 23

ORDER directing Clerk of Court to remand the case to New York State Supreme Court, Erie County and denying defendants' motions without prejudice to refile in state court. Signed by Hon. Richard J. Arcara on 10/19/2009. (JMB)

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF NEW YORK

M IC H A E L R. CATTARIN, P la in tiff, D E C IS IO N AND ORDER 0 9 -C V -5 3 4 A v.

KRAFT FOODS NORTH AMERICA, INC. T IP PLAN, D e fe n d a n t.

IN T R O D U C T IO N O n July 9, 2009, defendant filed twin motions1 to dismiss this case p u rs u a n t to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("FRCP"). Defendant asserts that plaintiff's claim about unauthorized pension withdrawals is n o t cognizable under either state or federal law. The Court's more immediate c o n c e rn , however--even in the absence of a motion to remand--is that d e fe n d a n t relied on too broad an interpretation of federal pension law to remove th is case from state court. Because plaintiff clarified at oral argument that his c la im relates only to possible forgery or similar fraud, the Court will deny the

T w o corporate entities have made these motions, claiming that the name o f the defendant appearing in the caption resembles but does not match their n a m e s , and that plaintiff might be referring to them. For reasons stated below, th e Court does not need to address this issue and will use the term "defendant" c o lle c tive ly for the sake of brevity.

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pending motion without prejudice and will remand the case, sua sponte, to state c o u rt. B AC K G R O U N D T h is case concerns allegations that person or persons unknown forged p la in tiff's signature to withdraw funds from his pension account without his p e rm is s io n . Plaintiff is a New York resident who has worked locally for defendant fo r over 17 years as a truck driver. Sometime after his employment began, p la in tiff became eligible to contribute to a retiree benefit plan known as the "TIP P la n ." The parties do not dispute that the TIP Plan generally is governed by the E m p lo ye e Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § § 1001­1461. The TIP Plan has a procedure, allegedly instituted in 2003, that allows e m p lo ye e s to make premature withdrawals to handle unexpected expenses that m a y arise in their lives. This procedure is called the "hardship withdrawal" p ro c e d u re . W h e th e r plaintiff himself ever planned to take advantage of the h a rd s h ip withdrawal procedure is not clear from the docket. Nonetheless, once th e procedure took effect, 10 hardship withdrawals from plaintiff's pension a c c o u n t allegedly occurred in 2003 and 2004, totaling $19,028.14. Plaintiff a lle g e s that he never authorized these withdrawals and seeks a restoration of th e s e funds.

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On March 10, 2009, plaintiff filed a complaint in New York State Supreme C o u rt, Erie County, seeking damages in the amount of the allegedly unauthorized w ith d ra w a ls . On June 5, 2009, defendant filed a notice of removal to this Court. The motions to dismiss followed. The essence of defendant's motions is that p la in tiff has not stated a cognizable claim under either state or federal law, b e c a u s e he has not alleged misconduct by defendant and because his claim d o e s not fall under ERISA's civil enforcement provision, 29 U.S.C. § 1132. In o p p o s in g the motions, plaintiff argues that the original complaint2 stated a claim s u ffic ie n tly under New York law, which governed this case prior to removal. T h e Court held oral argument on October 7, 2009. At oral argument, d e fe n d a n t mentioned that it possessed completed withdrawal forms signed by p la in tiff for all of the withdrawals in question. Plaintiff countered by suggesting th a t some or all of the forms in question do not bear plaintiff's genuine signature. The oral argument thus clarified that the principal, and perhaps only, issue in this c a s e is forgery--who signed the forms that defendant has on file, and whether d e fe n d a n t would have had any reason to detect the signatures on the forms as fo rg e d .
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P la in tiff filed an amended complaint on July 30, 2009. The Court will not a d d re s s any issues between the parties as to the amended complaint, except to n o te that defendant's motions to dismiss did not cut off plaintiff's rights under F R C P 15(a)(1)(A). See Kassner v. 2nd Ave. Delicatessen Inc., 496 F.3d 229, 2 4 2 (2d Cir. 2007) ("Defendants' motion to dismiss, because it was a motion, not a pleading, was not a `responsive pleading' within the meaning of Rule 15(a).") (c ita tio n omitted). 3

DISCUSSION "[I]n our federal system of limited jurisdiction any party or the court sua s p o n te , at any stage of the proceedings, may raise the question of whether the c o u rt has subject matter jurisdiction. W h e re jurisdiction is lacking, moreover, d is m is s a l is mandatory." United Food & Commercial Workers Union, Local 919, A F L -C IO v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1 9 9 4 ) (internal quotation marks and citations omitted). Because this case o rig in a te d in state court, this Court would remand rather than dismiss. See 28 U .S .C . § 1447(c) ("If at any time before final judgment it appears that the district c o u rt lacks subject matter jurisdiction, the case shall be remanded."); Citibank, N .A . v. Swiatkoski, 395 F. Supp. 2d 5, 10 (E.D.N.Y. 2005) (holding that a remand c a n occur sua sponte and without further notice) (citations omitted). Even without a motion from plaintiff, remand is appropriate here. The parties do not dispute p la in tiff's membership in the TIP Plan; the rules and procedures of the TIP Plan a s written; the amount of plaintiff's benefits aside from the withdrawals in dispute; o r plaintiff's rights under the hardship withdrawal procedure. Additionally, the p a rtie s do not appear to dispute the process, in itself, by which the withdrawals w e re made. The only dispute appears to be that someone other than plaintiff trig g e re d that withdrawal process 10 times in his name, without his knowledge. "The plaintiffs' common law fraud claim, which seeks to advance the rights and e xp e c ta tio n s created by ERISA, is not preempted simply because it may have a 4

tangential impact on employee benefit plans. W e are persuaded further in this c o n c lu s io n by the fact that although the defendants improperly administered the p la n , the essence of the plaintiffs' fraud claim does not rely on the pension plan's o p e ra tio n or management . . . . The plan was only the context in which this g a rd e n variety fraud occurred." Geller v. County Line Auto Sales, Inc., 86 F.3d 1 8 , 23 (2d Cir. 1996); cf. Caterpillar Inc. v. Williams, 482 U.S. 386, 394­95, (1 9 8 7 ) (ruling that employment claims "not substantially dependent upon in te rp re ta tio n of the collective-bargaining agreement" were not completely p re e m p te d by Labor Management Relations Act); Smith v. Texas Children's H o s p ., 84 F.3d 152, 155 (5th Cir. 1996) (rejecting complete preemption argument w h e re plaintiff's fraudulent misrepresentation claim did not depend on existence o f ERISA benefits plan). Under these circumstances, there is no reason to b e lie ve that federal law will prevent a state court from presiding over plaintiff's a tte m p t to regain money that he allegedly lost through forgery and not through th e operation of the TIP Plan in itself.

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CONCLUSION F o r all of the foregoing reasons, the Court concludes that it lacks subject m a tte r jurisdiction over this case. The Clerk of the Court is directed to take the s te p s necessary to remand this case to New York State Supreme Court, Erie C o u n ty. Defendant's motions are denied without prejudice to refile in state court a s it sees fit.

SO ORDERED.

s/ Richard J. Arcara
HONORABLE RICHARD J. ARCARA CHIEF JUDGE UNITED STATES DISTRICT COURT DATED: October 19, 2009

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