MENDENHALL v. OUT OF STATE INFRASTRUCTURE, INC. RETIREMENT PLAN et al

Filing 71

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE JOEL H. SLOMSKY ON 8/4/17. 8/7/17 ENTERED AND COPIES MAILED TO PRO SE AND E-MAILED.(mbh, )

IN THE UNITED STATES DISTRJCT COURT
FOR THE EASTERN DISTRJCT OF PENNSYLVANIA
JASON MENDENHALL,
Plaintiff,
CIVIL ACTION
NO. 14-4996

v.
OUT OF SITE INFRASTRUCTURE, INC., et
al.,
Defendants.
OPINION
Slomsky, J.
I.

August 4, 2017

INTRODUCTION

Before the Court are two Motions for Judgment on the Pleadings filed by Out of Site
Infrastructure, Inc. ("Out of Site") (Doc. No. 66) and Out of Site Infrastructure Inc., Retirement
Plan (the "Plan") (Doc. No. 68) (collectively "Defendants"). Defendants request relief pursuant
to Fed. R. Civ. P. 12(c). 1 On August 27, 2014, Plaintiff instituted this action against Defendants
Out of Site Infrastructure, Inc., Out of Site Infrastructure Inc., Retirement Plan, John Taddei, and
Paul Verna. (Doc. No. 1.) In his Complaint, Plaintiff alleges that all Defendants breached their
fiduciary duty to him and to his retirement savings plan by failing to pay money into his account.
An Answer to the Complaint was filed on September 23, 2014. (Doc. No. 8.)
During the next two years, the parties exchanged electronic and paper discovery and
attempted to settle the case through mediation before Chief Magistrate Judge Emeritus Carol
Sandra Moore Wells. At the close of fact discovery and during mediation with Judge Wells,
Plaintiff sought to expand the scope of this litigation to include all Plan members. (Doc. No. 66
1

Rule12(c) states in relevant part: "[a]fter the pleadings are closed--but early enough not to
delay trial--a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c).
1

at 3.) As a result, on January 20, 2017, Out of Site Infrastructure, Inc. filed a Motion for
Judgment on the Pleadings. (Doc. No. 66.) On January 23, 2017, Out of Site Infrastructure Inc.,
Retirement Plan requested to join in that Motion.

(Doc. No. 68.) On February 21, 2017,

Plaintiff responded in opposition to the Motions.

(Doc. No. 69.)

On February 28, 2017,

Defendants replied. (Doc. No. 70.) For reasons that follow, the Court will grant Out of Site
Infrastructure, Inc. (Doc. No. 66) and Out of Site Infrastructure Inc., Retirement Plan's (Doc. No.
68) Motions for Judgment on the Pleadings.

II.

BACKGROUND
Plaintiff was employed at Out of Site from May 2010 through May 2013. (Doc. No. 1 at

iii! 4-6.) During that time, he participated in Defendants' defined contribution 401(k) plan. 2 (Id.)
The Plan was governed by the Employee Retirement Income Security Act of 1974 ("ERISA").
(Id. at

if 21-22.)

John Taddei was the manager of Out of Site and made decisions regarding

employee wages and benefits. @at if 10.) Paul Verna was the trustee of the Plan. (Id. at if 14.)
The Plan required Out of Site to pay twenty-five percent of the employee's prevailing
wage compensation into the Plan for each year the employee worked at Out of Site. (Id. at if 32.)
Under the Plan, participants did not contribute any money and were 100% vested in the Plan at
all times.

(Id. at

iii! 27-28.) The Plan, however, permitted participants to self-direct the

investments in their account. (Id. at iii! 29.)
2

The retirement plan is named Defendant Out of Site Infrastructure, Inc., Retirement Plan. It is
a 401(k) plan which is defined as:
[a] retirement and savings plan that allows an employee to elect to have a portion
of his or her pretax salary contributed to a defined-contribution plan. Employers
often match all or part of the employee's contributions. Employees can choose
investments from a list of options.
Employee Benefit Plan, Black's Law Dictionary (10th ed. 2010) (citing 26 U.S.C. § 40l(k)
(2012)).
2

Plan assets were managed by Out of Site's Plan Administrator and MandMarblestone
Group, LLC. 3 (Id. at if 38.) In his Complaint, Plaintiff alleges that Out of Site did not make any
contributions "on behalf of Plaintiff and other Plan participants to their accounts for prevailing
wage compensation in 2010, 2011, 2012, and 2013." (Id. at

if 33.)

Plaintiff does not name or

identify the "other Plan participants." (See generally Doc. No. 1.) Plaintiff further alleges that
Defendants retained monies that should have been contributed into the Plan on behalf of the
employees for their own personal use; did not provide quarterly pension benefit statements to
Plaintiff or other Plan participants; and did not have a fiduciary bond4 in place for the Plan. (Ml
at iii! 34-37.)
On August 27, 2014, Plaintiff filed a Complaint alleging in five counts: (I) failure to
supply information about the Plan under 29 U.S.C. § 1132(c)(l) against the Plan; 5 (II) breach of
fiduciary duty against Out of Site in violation of 29 U.S.C. § 1109(a); (III) breach of fiduciary
duty against the Plan in violation of 29 U.S.C. § 1109(a); (IV) breach of fiduciary duty against
Paul Verna in violation of 29 U.S.C. § 1109(a); and (V) breach of fiduciary duty against John
Taddei in violation of29 U.S.C. § 1109(a). 6 On September 23, 2014, Out of Site filed an Answer
with affirmative defenses. (Doc. No 8.)

3

MandMarblestone Group, LLC is not a party to this action.

4

A fiduciary bond is defined as: "[a] type of performance bond required of a trustee,
administrator, executor, guardian, conservator, or other fiduciary to ensure the proper
performance of duties. -Also termed administrator's bond." Fiduciary Bond, Black's Law
Dictionary (10th ed. 2010).

5

The claim in Count I is not pertinent to the current Motions and therefore will not be further
discussed.

6

The claims in Counts IV and V are also not pertinent to the current Motions and will not be
discussed.
3

Thereafter, the parties engaged in discovery, but reached an impasse regarding the scope
of Plaintiff's discovery requests and numerous notices of depositions. (Doc. No. 66 at 7.) On
November 26, 2014, Out of Site and the Plan filed a Motion for [a] Protective Order to prevent
Plaintiff from obtaining discovery on other Plan participants. (Doc. No. 17.) On January 12,
2015, a hearing was held and the Court denied Defendant's Motion finding that Plaintiff could
discover information relating to all Plan participants. (Doc. No. 25, 26.)
On February 20, 2015, the parties appeared for mediation before Chief Magistrate Judge
Carol Sandra Moore Wells. (See generally Doc. No. 31.) Mediation efforts were delayed due to
matters involving Out of Site, Paul Verna, and John Taddei's retention of counsel. 7 (Doc. No. 57
at 1.) Ultimately, mediation was unsuccessful. The parties could not agree on settlement terms,
or even on whether the litigation should be limited only to the claims of Plaintiff. (Doc. No. 50
at 1.)
On January 6, 2017, a pretrial conference was held to assess the status of the litigation.
(Doc. No. 65 at 1.) At the hearing, Out of Site argued that Plaintiff's case should be limited in
scope to claims that affect only his individual retirement account. At the hearing, the Court
ordered both parties to file motions on this issue.
On January 20, 2017, Out of Site filed its Motion for Judgment on the Pleadings. (Doc.
No. 66.) As noted, on January 23, 2017, the Plan joined Out of Site in its Motion. (Doc. No.
68.) Plaintiff responded in opposition to Out of Site and the Retirement Plan's motion. (Doc.
No. 69.)

Defendants replied to Plaintiff.

(Doc. No. 70.)

The Motions are now ripe for

disposition.

7

Out of Site, Paul Verna, and John Taddei had difficulty paying counsels' required fees.
Ultimately on May 20, 2016, their counsel filed a Motion to Withdraw. (Doc. No. 53.) As of
the date of this Opinion, Paul Verna and John Taddei are proceeding prose. (See Doc. No. 60.)
4

III.

STANDARD OF REVIEW
"After the pleadings are closed-but early enough not to delay trial-a party may move

for judgment on the pleadings." Fed. R. Civ. P. 12(c). In deciding a motion for judgment on the
pleadings, a court must consider only those documents contained in the pleadings. See Moco
Invs., Inc. v. United States, 362 F. App'x 305, 307 n.4 (3d Cir. 2010) (explaining that the district
court's consideration of documents outside the pleadings converted the motion for judgment on
the pleadings into a motion for summary judgment).
A motion for judgment on the pleadings is analyzed under the same standard as a motion
to dismiss under Fed. R. Civ. P. 12(b)(6). See Spruill v. Gillis, 372 F.3d 218, 223 n.2 (3d Cir.
2004) (explaining that "there is no material difference in the applicable legal standards" for Rule
12(b)(6) and Rule 12(c) motions). Like a motion to dismiss, under Rule 12(c), ''the trial court
must view the facts in the pleadings in the light most favorable to plaintiff and must grant the
motion only if the moving party establishes that no material issues of fact remains and that it is
entitled to judgment as a matter of law." Shelly v. Johns-Manville Corp., 798 F.2d 93, 97 n.4
(3d Cir. 1986); see also Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008). A motion
for judgment on the pleadings will only be granted where "the plaintiffs would not be entitled to
relief under any set of facts that could be proved." Green v. Fund Asset Mgmt., L.P., 245 F.3d
214, 220 (3d Cir. 2001).

IV.

ANALYSIS
The issue before the Court is one of frrst impression in the Third Circuit. Defendants

argue that Plaintiff's claims under ERISA Section 502(a)(2), 29 U.S.C. § 1132, cannot be
brought on behalf of the Plan because Plaintiff failed to comply with Federal Rule Civil
Procedure 23 ("Rule 23"). Defendants assert that Plaintiff has only pled a claim for individual
relief and therefore cannot proceed on behalf of the Plan. (Doc. No. 66 at 2.) Plaintiff claims
5

that he is not required to comply with Rule 23 and that he may proceed on behalf of the Plan.
Plaintiff contends that because Section 502(a)(2) allows a litigant to assert claims on behalf of
the entire plan or individually, he can move forward with a claim for all Plan members.
Section 502(a)(2) provides that a civil action may be brought "by the Secretary [of
Labor], or by a participant, beneficiary or fiduciary for appropriate relief under Section 1109 of
this title." 29 U.S.C. § 1132. In relevant part, 29 U.S.C. § 1109(a) provides:
Any person who is a fiduciary with respect to a plan who breaches any of the
responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter
shall be personally liable to make good to such plan any losses to the plan
resulting from each such breach, and to restore to such plan any profits of such
fiduciary which have been made through use of assets of the plan by the fiduciary,
and shall be subject to such other equitable or remedial relief as the court may
deem appropriate, including removal of such fiduciary. A fiduciary may also be
removed for a violation of section 1111 of this title.
29 U.S.C. § 1109(a). In cases where a plan participant asserts a Section 502(a)(2) claim against a
fiduciary of a defined contribution plan, "participants can assert claims on behalf of the entire
plan or on behalf of their individual plan accounts." Stanford v. Foamex L.P., 263 F.R.D. 156,
164 (E.D. Pa. 2009) (citing LaRue v. De Wolff, Boberg & Assocs., 552 U.S. 248, 251 (2008)). If
properly pled, any recoupment oflost profits under a Section 502(a)(2) claim "would inure to the
benefit of the plan." Id. (citing Mass. Mut. Life Ins. Co. v. Russel, 473 U.S. 134, 140 (1985)).
The statutory language, however, does not provide procedural guidelines that a plaintiff must
follow in order to bring a claim on behalf of a plan. Further, there is no definitive guidance from
the Third Circuit Court of Appeals or the United States Supreme Court regarding claims of this
nature.

A.

The Parties' Arguments

Defendants argue that Plaintiff must comply with Rule 23 to maintain this action on
behalf of all Plan members. (Doc. No. 66 at 8.) Defendants assert that Plaintiff must comply
6

with the class action procedural safeguards set forth in the Rule because adjudication for the
entire Plan also would adjudicate the rights of other absent Plan participants. (Id.) Defendants
further claim that "the only proper way to ensure that the rights of . . . third parties would be
adequately protected would be for Plaintiff to satisfy the stringent procedural requirements and
protections set forth in Rule 23 .... " (Id.)
In support of their argument, Defendants rely on the Second Circuit's decision in Coan v.
Kaufman, 457 F.3d 250 (2d Cir. 2006). In Coan, a former employee brought suit against plan
fiduciaries individually and on behalf of the employer's 40l(k) plan under Section 502(a)(2) of
ERISA. Id. at 254. The Second Circuit began its analysis by noting that ERISA does not specify
the procedures that a plan participant must follow when bringing a claim in a representative
capacity.

Id. at 259.

The Second Circuit further noted that prior to enactment of Section

502(a)(2), the United States House of Representatives and United States Senate's version of the
bill differed with respect to procedural safeguards for representative actions. Id. at 259-60. The
Senate's bill provided that a participant may satisfy Rule 23, while the House's bill provided that
a participant must satisfy Rule 23. Id. Ultimately, neither requirement appears in the final
version of Section 502(a)(2). Id.
The Second Circuit opined that the lack of procedural requirements in the final bill did
not mean that a participant could bring a suit on behalf of an employee benefit plan "without
observing any procedural safeguards for other interested parties."

Id.

Analogizing to the

common law of trusts, the Second Circuit held that Congress intended to leave the "procedures
necessary to protect absent parties, and to prevent redundant suits, to ... [the] parties and judges
according to the circumstances on a case by case basis." Id. The court held that a plaintiff need
not always comply with Rule 23 to bring suit in a representative capacity, but must take adequate

7

steps under the circumstances to properly act in a representative capacity. Id. at 261. The court
further noted that this duty may be discharged if "a plan participant joins or makes a good-faith
effort to join other participants as parties pursuant to Rule 19 .... " Id. Affirming the district
court's grant of the defendant's motion for summary judgment, the Second Circuit stated that
"[a]llowing [the plaintiff] to bring this action without notifying or otherwise involving other plan
participants would, it seems to us, create significant practical difficulties and opportunities." Id.
Additionally, the Court of Appeals stated that if the plaintiff prevailed, the district court would
face a difficult task in ensuring that recovery "inures to the benefit of the plan as a whole" and
would complicate any subsequent litigation. Id. at 261-62.
Defendants also rely on Third Circuit law and cases from other jurisdictions requiring
class certification for a representative suit under Rule 23. The Third Circuit has previously
stated that "[i]n light of the derivative nature of ERISA § 502(a)(2) claims, breach of fiduciary
duty claims brought under § 502(a)(2) are paradigmatic examples of claims appropriate for
certification as a Rule 23(b)(l) class, as numerous courts have held." In re Schering Plough
Corp. ERISA Litig., 589 F.3d 585, 604 (3d Cir 2009). Likewise, numerous courts discuss or
require Section 502(a)(2) litigation in the context of Rule 23. See Stanford v. Foamex L.P., 263
F.R.D. 156, 164 (E.D. Pa. 2009) (discussing Rule 23 requirements for the plaintiff's Section
502(a) claim brought in a representative capacity and ultimately certifying a class of plan
participants for absent members); Moore v. Comcast Corp., 268 F.R.D. 530, 535-38 (E.D. Pa.
2010) (certifying a class and appointing class counsel for a representative Section 502(a)(2)
claim); George v. Kraft Foods Global Inc., No. 08-3799, 2011WL5118815, at *10-11 (N.D. Ill.
Oct. 25, 2011) (dismissing a Section 502(a)(2) claim brought by one individual on behalf of a
plan, because permitting such an action to proceed without the protections of Rule 23 or Rule

8

23.1 would be "overly myopic"); Wagner v. Stiefel Labs., Inc., No. 12-3234, 2015 WL 4557686,
at *12-13 (N.D. Ga. June 18, 2015) (granting summary judgment for the defendants on a Section
502(a)(2) claim because the plaintiffs had waived their right to sue, and even assuming a right,
the plaintiffs failed to notify or otherwise involve other plan participants).
Conversely, Plaintiff relies on two district court cases which declined to follow the test
set forth in Coan. Huizinga v. Genzink Steel Supply & Welding Co., No. 10-223, 2013 WL
4511291, at *8 (N.D. Ill. Aug. 23, 2013); Perez v. Bruister, 54 F. Supp. 3d 629, 650 (S.D. Miss.
2014) (adopting the analysis provided in Huizinga). In Huizinga, the plaintiff brought suit in a
representative capacity against the defendant company for a breach of fiduciary duty regarding
the management of an ERISA governed 401(k) Plan. Huizinga, 2013 WL 4511291, at *4-5. The
court held that the plaintiff did not have to satisfy any procedural safeguards in order to bring a
claim on behalf of the plan. Id. at *8. Further, the court expressly rejected the reasoning set
forth Coan because it determined that the plaintiff was only seeking recovery for the plan as a
whole. Id.
The Huizinga court began its analysis by noting that the Sixth Circuit had not yet ruled on
the issue, but other district courts have declined to follow the Coan decision.

Id. (citing

Blankenship v. Chamberlain, 695 F. Supp. 2d 996, 972 (E.D. Mo. 2010); Waldron v. Dugan, No.
07-286, 2007 WL 4365358, at *6 (N.D. Ill. Dec. 13, 2007)). The court focused on the statutory
language of Section 502(a)(2), reasoning that the statute only requires that a plaintiff be a plan
participant in order to seek recovery for the plan as a whole. Id. The court concluded that the
plaintiff satisfied both requisite elements and the statute required nothing further.
rejecting the Coan reasoning, the court stated the following:
Because of the Court's ruling limiting any recovery in this case to the time [the
plaintiff] himself was a participant, individuals with claims stretching back farther
9

Id.

In

than Huizinga's unquestionably remain free to bring suit to recover for any earlier
losses they sustained as a result of the [defendant's] breach of fiduciary duty.
Furthermore, none of the concerns from Coan are present here. There is no risk of
a self-serving settlement because, in his breach of fiduciary duty claim, Huizinga
seeks to recover only on behalf of the Plan as a whole. Because the Plan is still in
existence, it is not likely there will be any serious problems disbursing the money
back into the Plan and among its participants according to the Plan's terms. And
as for the possibility of preclusion in future litigation, the preclusion doctrines
themselves contain adequate safeguards-for example, the requirement of privity
in some cases, and the requirement that a particular issue have been fully and
fairly litigated before issue preclusion applies.
Id. Ultimately, the court determined that the plaintiff was an adequate representative of the plan
and could proceed on behalf of the class. Id.
B.

Plaintiff Cannot Proceed in a Representative Capacity on Behalf of the Plan
Here Because He Fails to Allege that He is an Adequate Representative of
Absent Plan Participants

Regardless of whether the provisions of Federal Rule of Civil Procedure 23 are required
to be applied to an action brought pursuant to Section 502(a)(2) on behalf of a plan, at the very
least, the Third Circuit has noted that a litigant must make an attempt to comply with some form
of the Rule 23 mandates. In considering this notion here, Plaintiff simply has failed to allege that
he is an adequate representative of absent Plan participants. As the Court will note, Plaintiff has
failed to take any action that would indicate that any of the precepts found in Rule 23 applies to

him in his representative capacity, and for this reason he cannot proceed on behalf of the Plan.
Plaintiff cannot take action on behalf of absent members because he does not allege that
he is an adequate representative of the absent Plan participants. 8 Although "it is not necessary to
bring an ERISA action as a class action," a plaintiff cannot proceed to protect the interests of
absent plan participants without first taking adequate steps under the circumstances to

8

Plaintiff is attempting to represent not only Plan participants, but also the Plan itself. But he
has filed this action against the Plan, among other Defendants. Plaintiff cannot represent the
interests of the party he is suing and is seeking to recover from in the same suit.
10

demonstrate that he is an adequate representative. 9 Coan v. Kaufman, 457 F.3d 250, 261 (2d Cir.
2006).
In this regard, Plaintiff has failed to take steps to properly act in a representative capacity.
Initially, the Complaint identifies Plaintiff as the sole party bringing this action, and does not
~

38.)

Specifically, the Complaint states that Defendants "breached [their] duty to Plaintiff." (Id.

at~~

allege that he is bringing any claims in a representative capacity.

(Doc. No. 1 at

46, 52, 58, 64, 70.) The Complaint does not contain any allegation that Plaintiff is seeking relief
on behalf of the Plan or in a representative capacity, or that he is seeking contributions for any
other Plan participant. While the Complaint states that Out of Site and the Plan failed to deposit
money into Plaintiff's and "other Plan participants . . . accounts," the reference to other
participants does not override the Complaint's naming of Jason Mendenhall as the sole plaintiff
and that he seeks relief as an individual. (Id.

at~~

33-34, 36.)

In addition, Plaintiff has not undertaken any procedural precautions to ensure the
protection of other Plan participants. Based on the filings in the two years this litigation has been
outstanding, Plaintiff has not made any colorable attempt to notify other Plan participants of this
lawsuit, to amend the Complaint to reflect that he is proceeding in a representative capacity, or to
set forth facts demonstrating that he is the proper party to represent the other Plan participants. 10
Moreover, the instant case substantially differs from the Huizinga case on which Plaintiff
relies on. 2013 WL 4511291, at *8. First, in Huizinga, the plaintiff's recovery was limited only
9

(Doc. No. 69-1 at 26); Stanford v. Foamex L.P., 263 F.R.D. 156, 164 (E.D. Pa. 2009); Moore v.
Comcast Com., 268 F.R.D. 530, 535-38 (E.D. Pa. 2010); Huizinga, 2013 WL 4511291, at *8.

10

There are very limited circumstances where a plaintiff may proceed without first taking
adequate steps. Specifically, a plaintiff's duty may be discharged if "a plan participant joins or
makes a good-faith effort to join other participants as parties pursuant to Rule 19 .... " Coan
v. Kaufman, 457 F.3d 250, 261 (2d Cir. 2006).
11

to the time which the plaintiff was a part of the disputed plan. Id. Conversely, here, no time
limit has been placed on Plaintiff's recovery. Rather, based on the pleadings, Plaintiff states that
he is seeking a remedy for the breach of fiduciary duties individually and for all Plan
participants, former and current. (Doc. No. 69 at 7.) Thus, Plaintiff is seeking much broader
redress, including the adjudication of Plan participants' rights which may substantially differ
from his own and result in improper claim preclusion. The facts surrounding his employment
status, enrollment, disenrollment, and withdrawal of funds may differ substantially from others
who are currently enrolled, disenrolled, or have remained in the Plan.
Second, there are potential issues involving a self-serving settlement and disbursement of
a proper amount of funds due to the limited funds Defendants may have available in this case. In
Huizinga, the risk of limited funds and issues disbursing the funds back to the plan was not a
"serious issue" because the plan was still in existence. 2013 WL 4511291, at *8. While the Plan
here is still in existence, unlike in Huizinga, there are potential issues regarding a self-serving
settlement and fund disbursement due to limited funds. As Plaintiff concedes, "there may be
limited funds with which to make payments to the Plan." (Doc. No. 69 at 5-6). This creates a
high potential of precluding other individuals who have different rights from having them
properly adjudicated later on. If Plaintiff recovers or takes a settlement on behalf of the Plan
which uses all or even a majority of Defendants' limited funds, those with greater or different
rights may not have them vindicated through subsequent litigation due to the insolvency of the
Plan.
Likewise, if settlement occurs, the limited funding may not be adequate to satisfy the
total amount that each Plan participant is owed. In this scenario, the Court will face the difficult
task of apportioning the funds without guidance from absent Plan participants. Plaintiff would

12

gam a distinct advantage by being the only participant able to advocate for each parties'
disbursement. This would place absent Plan participants at the mercy of Plaintiff's counsel
without the ability to prevent impinging on their rights. Consequently, unlike Huizinga, the
potential limited funding available creates self-serving settlement issues and a fund disbursement
issue.
Accordingly, Plaintiff will not be permitted to proceed with a Section 502(a)(2) claim in
his representative capacity. Plaintiff has failed to make any showing that he is the proper
representative for the Plan. In addition, due to the limited funds available and the breadth of
recovery sought, Plaintiff's representative capacity claim creates serious issues of claim
preclusion, proper fund disbursement, and improper adjudication of absentee party rights.

V.

AMENDMENT WILL BE DENIED FOR UNDUE DELAY
In Plaintiff's Response to Defendants' Motion for Judgment on the Pleadings, Plaintiff

requests that the Court grant him leave to amend his Complaint. (Doc. No. 69 at 6.) Under
Federal Rule of Civil Procedure 15(a)(2), a court should freely give leave to amend when justice
requires. Dole v. Arco Chem. Co., 921 F.2d 484, 487 (3d Cir. 1990). This policy is not without
limits. Id. A court may deny amendments for an "apparent or declared reason-such as undue
delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies
by amendments previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, futility of amendment, etc." Bivings v. Wakefield, 316 F. App'x
177, 180 (3d Cir. 2009).
At this stage in the litigation, granting leave to amend would cause undue delay. As
noted above, this case has proceeded for two and a half years. During that time, Plaintiff has not
sought to amend the Complaint to reflect that he is proceeding in a representative capacity or to
notify absent Plan participants. To allow Plaintiff to amend the Complaint at this point in the
13

litigation would essentially set this case back to where it began, resulting in substantial and
undue delay, as well as increased cost for both parties. Rolo v. City Inv. Co., Liquidating Tr., 155
F.3d 644, 655 (3d Cir. 1998) (denying leave to amend due to the duration of the case and the
substantial effort and expense in resolving an underlying motion to dismiss; and amendment
would cause undue delay or prejudice defendants).
Moreover, Plaintiff has not pled or shown that he would be an adequate class
representative of absent persons who may or may not be Plan participants, nor has he pled or
shown how his individualized claims would by typical of the claims of absent persons. Plaintiff
is a former employee and his interests are different from current employees.
Additionally, denying leave to amend will not end this litigation. Plaintiff may pursue his
claims against Defendants in his individual capacity. Furthermore, any absent participants in the
Plan, whether current or past members, will not be prejudiced because they can bring their own
action against Defendants regarding their membership in the Plan. Therefore, Plaintiff's request
to amend the Complaint to reflect that he is proceeding in a representative capacity will be
denied.

VI.

CONCLUSION
For the foregoing reasons, the Court will grant the Motion[s] for Judgment on the

Pleadings of Out of Site Infrastructure, Inc. (Doc. No. 66) and Out of Site Infrastructure Inc.,
Retirement Plan. (Doc. No. 68).

14