Brown et al v. Merck Sharp & Dohme Corporation et al

Filing 23

ORDER granting 11 Motion to Dismiss. Signed by Judge Jon Phipps McCalla on 3/26/2015. (McCalla, Jon)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
JESSIE BROWN and CHARLES
MALONE,
Plaintiffs,
v.
MERCK SHARP & DOHME
CORPORATION F/K/A MERCK & CO.,
INC. AND SCHERING-PLOUGH
CORPORATION RETIREMENT PLAN,
Defendants.

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No. 2:14-cv-02724-JPM-cgc

ORDER GRANTING MERCK SHARP’S MOTION TO DISMISS
Before the court is Defendant Merck Sharp & Dohme
Corporation’s (“Merck Sharp”) Motion to Dismiss, filed November
20, 2014.

(ECF No. 11.)

Plaintiffs timely responded in

opposition on December 11, 2014.

(ECF No. 19.)

The Court held

a motion hearing on the Motion to Dismiss on December 22, 2014,
at which both parties were represented.

(ECF No. 22.)

For the

reasons stated below, Merck Sharp’s Motion to Dismiss is
GRANTED.
I.

BACKGROUND
A.

Factual Background

Plaintiffs Jessie Brown and Charles Malone are former
employees of the Schering-Plough Corporation.
¶¶ 8–9.)

(Amend. Compl.

Both Plaintiffs retired or terminated their employment

from Schering-Plough before the corporation merged with Merck
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Sharp in 2009.

(Id.)

While the Plaintiffs worked for Schering-

Plough, both they and the company made payments to pension and
retirement plans for Plaintiffs’ benefit.

(Id. at ¶ 10.)

Since his retirement, Mr. Brown has received monthly
retirement payments.

(Id. at ¶ 8.)

In March 2014, Mr. Brown

received a brochure for his retirement policy that allegedly
contained a lump sum payment option.

(Id. at ¶ 14.)

Based on the brochure, Plaintiffs submitted multiple
requests to Merck Sharp to obtain a lump sum payment of their
pension and retirement benefits from the Schering-Plough
Corporation Retirement Plan 1 (the “Plan”).

(Id. at ¶¶ 16–17.)

Merck Sharp, as Plan Administrator of the Plan, denied
Plaintiffs’ request for a lump sum payment, stating that the
Plaintiffs were not entitled to the lump sum payment option.
(Id. at ¶ 19; Memo. of Law in Support of Motion to Dismiss at 2,
3.)
B.

Procedural Background

Plaintiffs filed a Complaint against Merck Sharp and MSD
Consumer Care, Inc. on September 17, 2014.

(Compl., ECF No. 1.)

The Complaint alleged that Merck Sharp and MSD Consumer Care
violated the Employee Retirement Income Security Act (“ERISA”)
and asserted three other state law claims.

(Id.)

The Complaint

sought the following relief: (1) judgment requiring the
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Since January 1, 2013, the Plan is now known as the Legacy Schering-Plough
Retirement Plan. (Memo. of Law in Support of Motion to Dismiss p. 1.)

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Defendants to pay Plaintiffs a lump sum payment of all benefits
due under the Plan; (2) awarding Plaintiffs prejudgment
interest; (3) awarding Plaintiffs their attorneys’ fees, costs,
and expenses; and (4) awarding Plaintiffs three times their
compensatory damages pursuant to the Tennessee Consumer
Protection Act.

(Id.)

Merck Sharp and MSD Consumer Care filed a Motion to Dismiss
Plaintiffs’ Complaint pursuant to Rules 12(b)(6) and 12(b)(7)
the Federal Rules of Civil Procedure.

(ECF No. 11.)

The Motion

to Dismiss stated that, under Rule 12(b)(6), the Plaintiffs’
ERISA claim failed because the terms of the Plan stated that the
Plaintiffs did not qualify for the lump sum option and that
Plaintiffs failed to exhaust their administrative remedies.
(Id.)

The Motion to Dismiss also stated that MSD Consumer Care

was not a proper party to the suit, as it was neither the
applicable ERISA plan nor an administrator of the applicable
ERISA plan.

(Id.)

Pursuant to Rule 12(b)(7), the Motion to

Dismiss stated that the claim should be dismissed because the
Plaintiffs failed to name the Plan as a party; Merck Sharp and
MSD Consumer Care argued that the Plan is a necessary and
indispensable party to the litigation.

(Id.)

Finally, the

Motion to Dismiss stated that all of Plaintiffs’ state law
claims failed because they were preempted by ERISA.

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(Id.)

Plaintiffs responded to the Motion to Dismiss on December
11, 2014.

(ECF No. 19.)

Plaintiffs’ response reasserted its

argument that Merck Sharp and MSD Consumer Care violated ERISA
and that Plaintiffs agreed to dismiss all of its state law
claims.

(Id.)

Also on December 11, 2014, Plaintiffs filed a Motion to
Amend Complaint (ECF No. 18), which the Court granted on
December 19, 2014.

(ECF No. 20).

In the Amended Complaint,

Plaintiffs added the Plan as a defendant and dropped MSD
Consumer Care as a defendant.

(ECF No. 21.)

The Amended

Complaint includes claims solely for violations of ERISA.

(Id.)

The Court held a Motion Hearing on December 22, 2014,
regarding Defendants’ Motion to Dismiss.

(ECF No. 22.)

The

parties agreed to rely on their previous filings with respect to
Defendants’ Motion to Dismiss.

(Id.)

Defendants reasserted

their arguments that Plaintiffs’ Amended Complaint should be
dismissed because (1) Plaintiffs were not eligible for the lump
sum payment option under the plan, and (2) Plaintiffs failed to
exhaust their administrative remedies.
II.

(ECF No. 11, 22.)

Legal Standard
Rule 12(b)(6), a court can dismiss a complaint for “failure

to state a claim upon which relief can be granted.”
Civ. P. 12(b)(6).

Fed. R.

“A pleading that states a claim for relief

must contain . . . a short and plain statement of the claim
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showing that the pleader is entitled to relief.”

Fed. R. Civ.

P. 8(a)(2).
In assessing a complaint for failure to state a claim,
[a court] must construe the complaint in the light
most favorable to the plaintiff, accept all well-pled
factual allegations as true, and determine whether the
complaint “contain[s] sufficient factual matter,
accepted as true, to state a claim to relief that is
plausible on its face.”
Ouwinga v. Benistar 419 Plan Servs., Inc., 694 F.3d 783, 790
(6th Cir. 2012) (second alteration in original) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

“This standard is

not akin to a probability requirement, but it asks for more than
a sheer possibility that defendant has acted unlawfully.”
Williams v. Duke Energy Int’l, 681 F.3d 788, 799 (6th Cir. 2012)
(quoting Iqbal, 556 U.S. at 678) (internal quotation marks
omitted).
The Court, however, “need not accept as true legal
conclusions or unwarranted factual inferences, and [c]onclusory
allegations or legal conclusions masquerading as factual
allegations will not suffice.”

In re Travel Agent Comm’n

Antitrust Litig., 583 F.3d 896, 903 (6th Cir. 2009) (alteration
in original) (citation omitted) (internal quotation marks
omitted); see also Mik v. Fed. Home Loan Mortg. Corp., 743 F.3d
149, 157 (6th Cir. 2014) (“[A] complaint must contain ‘more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.’”) (quoting Bell Atl.
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Corp. v. Twombly, 550 U.S. 544, 555 (2007))).

“Issues adverted

to in a perfunctory manner, unaccompanied by some effort at
developed argumentation, are deemed waived.

It is not

sufficient for a party to mention a possible argument in [a]
skeletal way, leaving the court to put flesh on its bones.”

El-

Moussa v. Holder, 569 F.3d 250, 257 (6th Cir. 2009) (alteration
in original) (internal quotation marks omitted).
III. Analysis
The issue before the Court is whether Plaintiffs
sufficiently pled that they exhausted their administrative
remedies before filing their complaint. 2
below, the Court finds that they did not.

For the reasons stated
Section 502(a) of

ERISA allows a “participant or beneficiary” of a plan to
“recover benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify
his rights to future benefits under the terms of the plan.”
U.S.C. § 1132(a)(1)(B).

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ERISA also provides that every employee

benefit plan “shall . . . afford a reasonable opportunity to any
participant whose claim for benefits has been denied for a full

2

Although Defendants assert that Plaintiffs’ claims should be dismissed
because the Plaintiffs are not eligible for the lump sum payment option under
the Plan, neither party attached the terms of the Plan. A court may review
the applicable plan when attached by a defendant in a motion to dismiss, see
Teagardener v. Republic-Franklin Inc. Pension Plan, 909 F.2d 947, 949 (6th
Cir. 1990), and interpret terms of an ERISA plan when such a plan is
submitted to the Court, see Butler v. Aetna U.S. Healthcare Inc., 109 F.
Supp. 2d 856, 859 (S.D. Ohio 2000). Because the parties have not submitted
the Plan to the Court, the Court can neither review nor interpret the Plan’s
terms in this case.

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and fair review by the appropriate named fiduciary of the
decision denying the claim.”

Id. at § 1133; Weiner v. Klais &

Co., 108 F.3d 86, 90 (6th Cir. 1997) (“[ERISA] does require
benefit plans to provide internal dispute resolution
procedures.”).

Despite the absence of an explicit requirement

in ERISA, the Sixth Circuit generally requires that “a
participant . . . exhaust his or her administrative remedies
prior to commencing suit in federal court.”

Constantino v. TRW,

Inc., 13 F.3d 969, 974 (6th Cir. 1994) (quoting Miller v. Metro.
Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991)).
Exhaustion of administrative remedies to bring an ERISA
claim, however, is not always required.

A court may decline to

apply the administrative exhaustion requirement when a party
demonstrates that “resorting to a plan’s administrative
procedure would simply be futile or the remedy inadequate.”
Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 419 (6th Cir.
1998).

“Generally speaking, [a court applies] the

administrative-futility doctrine in two scenarios: when the
Plaintiffs’ suit [is] directed to the legality of [the plan],
not to a mere interpretation of it, and (2) when the defendant
lacks the authority to institute the [decision] sought by
Plaintiffs.”

Dozier v. Sun Life Assurance Co. of Can., 466 F.3d

532, 535 (6th Cir. 2006) (alterations in original) (citations
and internal quotation marks omitted).
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“To meet the ‘quite

restricted’ standard for establishing administrative futility,
[a court] require[s] a litigant to ‘make a clear and positive
indication’ that further administrative review would have come
to naught.”

Id. (quoting Fallick, 162 F.3d at 419).

The Court finds that the Plaintiffs did not sufficiently
plead either administrative exhaustion or administrative
futility.

“A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.”

Hensley Mfg., Inc. v. ProPride, Inc., 579

F.3d 603, 609 (6th Cir. 2009) (quoting Iqbal, 556 U.S. at 678).
The Amended Complaint includes insufficient factual content to
meet this threshold for three reasons: (1) it includes no facts
describing Plaintiffs’ efforts to exhaust their administrative
remedies and instead only states in conclusory fashion that
“Plaintiffs have exhausted all administrative remedies to their
knowledge” (Am. Compl. ¶ 19); (2) it includes no facts that
suggest that the Plan did not contain an administrative review
process; and (3) it includes no facts indicating seeking
administrative exhaustion under the Plan would be futile.
Plaintiff’s Amended Complaint merely “allege[s] — but . . . has
not ‘show[n]’ — ‘that the pleader is entitled to relief.’”
Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. Proc. 8(a)(2)).
Because Plaintiffs failed to adequately plead facts amounting to
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administrative exhaustion or demonstrating the existence of an
exception to that requirement in this case, Plaintiffs have
failed to state a claim under Rule 12(b)(6) of the Federal Rules
of Civil Procedure.
IV.

CONCLUSION
For the reasons stated above, Merck Sharp’s Motion to

Dismiss Plaintiff’s Complaint (ECF No. 11) is GRANTED.
Accordingly, all claims by Plaintiffs against Defendant Merck
Sharp are DISMISSED WITHOUT PREJUDICE.
IT IS SO ORDERED, this 26th day of March, 2015.

/s/ Jon P. McCalla
JON P. McCALLA
UNITED STATES DISTRICT JUDGE

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