Alday v. Raytheon Co.

619 F. Supp. 2d 726, 43 Employee Benefits Cas. (BNA) 2330, 183 L.R.R.M. (BNA) 2537, 2008 U.S. Dist. LEXIS 3875, 2008 WL 65602
CourtDistrict Court, D. Arizona
DecidedJanuary 4, 2008
DocketCV 06-32 TUC DCB
StatusPublished
Cited by7 cases

This text of 619 F. Supp. 2d 726 (Alday v. Raytheon Co.) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alday v. Raytheon Co., 619 F. Supp. 2d 726, 43 Employee Benefits Cas. (BNA) 2330, 183 L.R.R.M. (BNA) 2537, 2008 U.S. Dist. LEXIS 3875, 2008 WL 65602 (D. Ariz. 2008).

Opinion

ORDER

DAVID C. BURY, District Judge.

Plaintiffs allege that “Defendant bargained with the Union Local Lodge No. 933 for four consecutive Collective Bargaining Agreements (CBAs) spanning a period of over fourteen years (beginning in 1990 and ending in 2004) that retirees and their spouses would have company-paid health care coverage until age 65.” 1 (P’s Response to Motion for Judgment on the Pleadings (Rule 12(c) Motion) at 6.) Plaintiffs sue Defendants under the Employee Retirement Income Security Act (ERISA) and the Labor Management Relations Act (LMRA), challenging Defendant’s decision that they must contribute toward the cost of their retirement healthcare benefits. Plaintiffs allege this breached the CBAs in violation of the LMRA and that correspondingly modifying the healthcare bene *729 fit plans violated ERISA. Plaintiffs seek reinstatement of their company-paid retirement benefits, damages for healthcare expenses they incurred, extra-contractual damages for mental and emotional distress, and punitive damages. Plaintiffs seek certification of this case as a class action.

Defendant argues for judgment on the pleadings, pursuant to Fed.R.Civ.P. 12(c), because extra-contractual damages and punitive damages cannot be recovered under either ERISA or LMRA. Defendant objects to the class definition proposed by the Plaintiffs, arguing that it must be narrowed to exclude individuals who released or waived any claims against Defendant and to exclude persons whose claims are based on retirement before July 1, 1994, and retirement after or on November 2, 2003. Furthermore, Defendant argues that membership in the class must be limited by express qualifying conditions in the CBAs for retirees, spouses, and dependants. Otherwise, there is no objection to certifying the class.

Extra-contractual and punitive damages are not available under ERISA or LMRA.

First, the Court notes that the First Amended Complaint seeks compensatory and punitive damages under ERISA, section 502(a)(1)(B), and LMRA, section 301(a), see (First Amended Complaint at ¶¶22 and 32), but does not allege mental or emotional distress. Plaintiffs, however, submit affidavits to support their Motion for Class Certification that allege in relation to each Plaintiff-representative that mental and emotional suffering was caused by the alleged breach of the CBAs and the ERISA violation. In response to Defendant’s Rule 12(c) Motion, Plaintiffs argue that ERISA and the LMRA provide for punitive damages and extra-contractual damages for mental and emotional distress. (P’s Response to D’s Rule 12(c) Motion; P’s Reply to D’s Opposition to P’s Motion for Class Certification at 10.)

Under ERISA, section 502(a)(1)(B), Plaintiffs may recover benefits due them and may sue to enforce their rights under a plan or to clarify their rights to future benefits under a plan. 29 U.S.C. § 1132(a)(1)(B). Extra-contractual damages are those that give a beneficiary more than he or she is entitled to receive under terms and provisions of the plan. Zielinski v. Pabst Brewing Comp., 360 F.Supp.2d 908, 923 n. 13 (E.D.Wis.2005). Such damages should not be confused with damages which are or are not recoverable in a contract action. Id.

There are six carefully integrated civil enforcement provisions found in section 502(a) of ERISA, which provide “strong evidence” that Congress did not intend to authorize other remedies. Congress has repeatedly emphasized that the purpose of ERISA is to protect contractually defined plan benefits. The stark absence in the statute itself and in its legislative history of any reference to recovery of extra-contractual damages led the Supreme Court to conclude that ERISA bars extra-contractual claims. Massachusetts Mut. Life Insurance Co. v. Russell, 473 U.S. 134, 146-148, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985).

The Supreme Court has repeatedly rejected claims for punitive and extra-contractual damages under ERISA. See Aetna Health Inc. v. Davila, 542 U.S. 200, 215, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (finding state tort claims preempted by ERISA because to find otherwise would be to allow parties to evade the pre-emptive scope of the narrowly tailored ERISA remedies). Supreme Court cases addressing the pre-emptive effect of ERISA are based on the limited remedies available *730 under ERISA, which are inherent in the “careful balancing” between ensuring fair and prompt enforcement of rights under a plan and encouraging the creation of such plans. Id. (citing Pilot Life Insur. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987) (finding ERISA preemption of tortious breach of contract claim seeking compensatory and punitive damages); Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) (finding ERISA preemption of breach of contract claim involving punitive damages and damages for mental anguish); Metropolitan Life Insur. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55, (1987) (finding ERISA preemption of claim for mental anguish caused by breach of contract)). The plaintiffs in all three cases sought remedies beyond those authorized under ERISA. Id.

In Bast v. Prudential Insur. Co., 150 F.3d 1003, 1009 (9th Cir.1998), the Ninth Circuit Court of Appeals held that loss of plaintiffs chance of survival, her suit for out of pocket costs, loss of income, loss of consortium, and emotional distress were not compensable under ERISA. See also, Elliot v. Fortis Benefits Ins. Co., 337 F.3d 1138, 1147 (9th Cir.2003) (an action “which seeks non-ERISA damages for what are essentially claim processing causes of action, clearly falls under the § 1132 preemption ...”); Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1034 (9th Cir.2000) (breach of contract, fraud, and tortious breach of the covenant of good faith and fair dealing preempted by ERISA).

In the ninth circuit, a participant may file a civil action “to recover benefits due him under the terms of his plan,” Bast, 150 F.3d at 1008 (quoting 29 U.S.C. 1132(a)(1)(B)), “[e]xtraeontractual, compensatory and punitive damages are not available under ERISA.”

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619 F. Supp. 2d 726, 43 Employee Benefits Cas. (BNA) 2330, 183 L.R.R.M. (BNA) 2537, 2008 U.S. Dist. LEXIS 3875, 2008 WL 65602, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alday-v-raytheon-co-azd-2008.