Perroti-Johns v . Wal-Mart et a l . CV-05-243-PB 07/11/06 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Lori Perrotti-Johns
v. Case No. 05-cv-243-PB Opinion No. 2006 DNH 079 Wal-Mart Stores, Inc. and John Does One through Five
MEMORANDUM AND ORDER
Lori Perrotti-Johns, a former management-level employee of
Wal-Mart Stores, Inc. (“Wal-Mart”) alleges that Wal-Mart
wrongfully allowed her health insurance to be cancelled and
wrongfully terminated her employment. Wal-Mart has filed a
motion to dismiss for failure to state a claim upon which relief
can be granted (Doc. N o . 2 4 ) . For the reasons set forth below, I
grant Wal-Mart’s motion in part and deny it in part.
I. BACKGROUND1
Perrotti-Johns held a management-level position at Wal-Mart.
Am. Compl. ¶ 6. She was eligible for and participated in Wal-
Mart’s Associates’ Health and Welfare Plan (the “Plan”), which
1 I describe the facts in the light most favorable to Perrotti-Johns. provided health and dental insurance. Id. ¶¶ 6, 8-9.
On September 2 7 , 1999, Perrotti-Johns suffered an injury at
work and became disabled. Id. ¶ 1 3 . She stopped working and
commenced a workers’ compensation proceeding. Id. Shortly
thereafter, she testified against Wal-Mart in an employment
discrimination lawsuit. Id. ¶ 3 0 .
Although she was no longer working, Perrotti-Johns remained
eligible to participate in the Plan so long as she paid the
applicable premiums. Id. ¶ 4 . Wal-Mart instructed her to pay
the premiums by sending checks to an address that the company
provided. Id. ¶ 1 6 . Perrotti-Johns mailed all of her premiums
in a timely fashion. Id. ¶¶ 1 6 , 1 9 . Nevertheless, the Plan
notified her that her benefits had been cancelled for nonpayment
of premiums. Id. ¶ 1 8 .
Perrotti-Johns contacted Wal-Mart about the cancellation of
her benefits and the company repeatedly promised that her
coverage would be reinstated. Id. ¶ 2 9 . Perrotti-Johns
eventually received a “refund” from Wal-Mart, although she had
not requested a refund and the amount she received was not equal
to the amount she had paid in premiums. Id. ¶¶ 21-23. Wal-Mart
ultimately informed Perrotti-Johns that it had accidentally
-2- applied her premium payments to the purchase of Wal-Mart stock.
Id. ¶ 2 4 .
On May 2 5 , 2005, Perrotti-Johns sued Wal-Mart in Rockingham
County Superior Court. See State Court Writ of Summons. Wal-
Mart timely removed the action to this court, see Notice of
Removal (Doc. N o . 1 ) , and filed a motion to dismiss (Doc. N o . 6 ) .
On January 1 9 , 2006, I granted the motion to dismiss. I held
that Perrotti-Johns’ negligence, breach of contract, and breach
of fiduciary duty claims were preempted by the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §
1001, et seq., and that Perrotti-Johns had failed to state a
claim for wrongful discharge because her complaint did not allege
that Wal-Mart fired her or that she resigned because of
intolerable working conditions. See Order on Wal-Mart’s First
Motion to Dismiss (“First Order”) (Doc. N o . 1 9 ) , 2006 DNH 5 , at
7 , 9. Perrotti subsequently amended her complaint. The amended
complaint (Doc. N o . 22) consists of ERISA claims for benefits due
and breach of fiduciary duty, two state statutory claims, and a
common law claim for wrongful discharge.
-3- II. STANDARD OF REVIEW
In considering a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6), 2 I “accept as true the well-pleaded
factual allegations of the complaint, draw all reasonable
inferences therefrom in the plaintiff’s favor and determine
whether the complaint, so read, sets forth facts sufficient to
justify recovery on any cognizable theory.” Martin v . Applied
Cellular Tech., 284 F.3d 1 , 6 (1st Cir. 2002). An action should
be dismissed “only if the plaintiff’s factual averments hold out
no hope of recovery on any theory adumbrated in its complaint.”
In re Colonial Mortgage Bankers Corp., 324 F.3d 1 2 , 15 (1st Cir.
2003).
III. ANALYSIS
A. ERISA Claim to Recover Benefits Due
In Count I , Perrotti-Johns seeks to recover Plan benefits
that she alleges have been wrongfully withheld. A claim to
recover benefits due arises under 29 U.S.C. § 1132(a)(1)(B),
2 Wal-Mart states that its motion is pursuant to Rule 12(b)(6) and Rule 12(b)(1). Rule 12(b)(1) authorizes dismissal for lack of subject matter jurisdiction. I cannot discern a subject matter jurisdiction argument in Wal-Mart’s briefs. Thus, I analyze Wal-Mart’s motion under Rule 12(b)(6).
-4- which provides that a participant in an employee benefit plan may
bring a civil action “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.” Wal-Mart argues that Perrotti-Johns has failed to
state a claim to recover benefits due because (1) Wal-Mart is not
a proper defendant in an action to recover benefits due; and (2)
Perrotti-Johns has failed to exhaust the Plan’s internal
administrative remedies.
Ordinarily, the proper defendants in an action for benefits
due under 29 U.S.C. § 1132(a)(1)(B) are the employee benefit plan
itself and the named plan administrator. Thiffault v . Butler
Home Prods., Inc., N o . 05-4001 1-FDS, 2006 U.S. Dist. LEXIS 6236,
at *4 (D. Mass. Jan. 5 , 2006); see also Terry v . Bayer Corp., 145
F.3d 2 8 , 36 (1st Cir. 1998). Wal-Mart has submitted a portion of
the applicable summary plan description, the authenticity of
which Perrotti-Johns does not contest, demonstrating that it
appointed a plan administrator. If an employer has appointed a
plan administrator, the employer is not a proper defendant unless
it “controlled or somehow influenced the administration of the
plan.” Id. There is very little in Perrotti-Johns’ amended
-5- complaint to support an argument that Wal-Mart controlled or
otherwise influenced plan administration. However, even if I
assume that Perrotti-Johns’ factual allegations are sufficient to
support a claim that Wal-Mart can be named as a defendant in a
claim for benefits due because it influenced the administration
of the plan, her claim is premature because she has failed to
exhaust the internal administrative remedies available to her.
Exhaustion of internal administrative remedies is a
necessary prerequisite to judicial review under § 1132(a)(1)(B).
Terry, 145 F.3d at 3 6 . Perrotti-Johns concedes that she did not
avail herself of the Plan’s internal administrative remedies,
which required her to file an appeal within 60 days of receiving
a written notice denying her benefits claim. Pl.’s O b j . at 3 .
Instead, she argues that her failure to exhaust should be excused
by the equitable estoppel exception to the exhaustion
requirement.3
3 Perrotti-Johns also contends that her failure to exhaust is excused because exhaustion would be futile and because the remedies available to her in the administrative process are inadequate. She bases her futility argument on allegations that Wal-Mart repeatedly told her it would reinstate her health coverage. This amounts to a restatement of her equitable estoppel argument. In support of her inadequacy argument, Perrotti-Johns states that the internal administrative remedies
-6- In order for equitable estoppel to prevent dismissal of a
claim to recover benefits due based on failure to exhaust, a plan
participant must show “(1) a promise, (2) reasonable reliance on
the promise, (3) injury caused by the reliance, (4) an injustice
if the promise is not enforced, and (5) extraordinary
circumstances . . . . tantamount to fraud.” Greifenberger v .
Hartford Life Ins. Co., 131 Fed. Appx. 756, 758-59 (2d Cir. 2005)
(unpublished); see also Bourgeois v . Pension Plan for the Emples.
of Santa Fe Int’l Corps., 215 F.3d 475, 481-82 (5th Cir. 2000). 4
Here, the doctrine of equitable estoppel cannot save
Perrotti-Johns’ claim to recover benefits due. Although Wal-Mart
allegedly promised Perrotti-Johns that it would reinstate her
health insurance, it eventually informed her that it did not
are inadequate because the only relief they offer is reinstatement of her health benefits. This argument is unavailing because compensatory and punitive damages are not recoverable on a claim for benefits due regardless of the forum. See Turner v . Fallon Community Health Plan, 127 F.3d 196, 198 (1st Cir. 1997). 4 Wal-Mart cites Mauser v . Raytheon C o . Pension Plan for Salaried Emples., 239 F.3d 5 1 , 57 (1st Cir. 2001) for the proposition that “[t]his circuit has not recognized the doctrine of estoppel to excuse failure to exhaust administrative remedies.” Def.’s Reply at 5 . Wal-Mart’s reliance on Mauser is misplaced. Mauser did not discuss equitable estoppel in the context of administrative exhaustion.
-7- intend to make good on its promise. At that juncture, Perrotti-
Johns elected to seek judicial review immediately rather than to
pursue an administrative appeal. Although the doctrine of
equitable estoppel may excuse Perrotti-Johns’ failure to comply
with an administrative deadline, it does not allow her to
circumvent the administrative process altogether. Accordingly,
Wal-Mart’s motion to dismiss Count I is granted without prejudice
to Perrotti-Johns’ right to seek administrative review of her
claim.
B. ERISA Claim for Breach of Fiduciary Duty
In Count I I , Perrotti-Johns argues that Wal-Mart violated
fiduciary duties it owed to her as a Plan participant. Count II
arises pursuant to 29 U.S.C. § 1132(a)(3), which is known as
ERISA’s “catch all” provision.5 Watson v . Deaconess Waltham
5 29 U.S.C. § 1132(a)(2) authorizes civil actions by participants for “appropriate relief under section 1109,” which imposes liability on plan fiduciaries for breach of fiduciary duty. See 29 U.S.C. § 1109(a). However, the Supreme Court has held that § 1109 “provides relief only for a plan and not for individual participants.” Tregoning v . Am. Community Mut. Ins. Co., 12 F.3d 7 9 , 83 (6th Cir. 1993); see also Miller v . Nortel Networks Long Term Dis. Plan, N o . 03-258-PB, 2005 U.S. Dist. LEXIS 1161, at *43-44 (D.N.H. Jan. 2 5 , 2005). Perrotti-Johns does not seek relief on behalf of the plan. Thus, she may not maintain an action under 29 U.S.C. § 1132(a)(2).
-8- Hosp., 298 F.3d 1 0 2 , 109 (1st Cir. 2002). Section 1132(a)(3)
provides that
[a] civil action may be brought . . . by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan.
Wal-Mart argues that Perrotti-Johns’ claim should be dismissed
because she seeks money damages rather than equitable relief. I
agree.
The Supreme Court has explained “that the term ‘equitable
relief’ in [§ 1132(a)(3)] must refer to ‘those categories of
relief that were typically available in equity.’” Great-West
Life & Annuity Ins. C o . v . Knudson, 534 U.S. 2 0 4 , 210 (2002)
(quoting Mertens v . Hewitt Assocs., 508 U.S. 2 4 8 , 256 (1993)).
If a plaintiff seeks legal relief rather than equitable relief, §
1132(a)(3) does not authorize her lawsuit. Id. at 221.
Generally, money damages are “‘the classic form of legal
relief.’” Id. (quoting Mertens, 508 U.S. at 2 5 5 ) .
Perrotti-Johns seeks only money damages.6 See Am. Compl. ¶
6 Perrotti-Johns has not requested a refund of any monies she allegedly paid to Wal-Mart for health insurance benefits. Damages of that variety might amount to equitable restitution
-9- 68 (“plaintiff demands judgment against the defendants in an
amount sufficient to fully compensate her for her losses, plus
interest, costs and attorneys’ fees”). Because money damages are
not an equitable form of relief, Count II fails to state a claim
under 29 U.S.C. § 1132(a)(3). Accordingly, Wal-Mart’s motion to
dismiss Count II is granted.
C. State Statutory Claims
1. RSA § 275:48, II
In Count IV, Perrotti-Johns alleges that Wal-Mart violated
RSA § 275:48, I I , which provides as follows:
If an employer making a deduction of an employee’s wages . . . fails to make any payment relative to such deduction on the employee’s behalf, and such employee loses any benefit or fails to meet an obligation caused by such failure, the employer shall be liable for such lost benefit or failed obligation.
Wal-Mart contends that this claim is preempted by ERISA. I
ERISA’s preemption clause, 29 U.S.C. § 1144, provides that
ERISA preempts state laws that “relate to any employee benefit
available under 29 U.S.C. § 1132(a)(3). See Great-West, 534 U.S. at 214 (restitution is a form of equitable relief if the plaintiff asks the court “to restore to the plaintiff particular funds or property in the defendant’s possession”).
-10- plan.” 29 U.S.C. § 1144(a); see also Hampers v . W.R. Grace &
Co., 202 F.3d 4 4 , 49 (1st Cir. 2000). The parties agree that the
Plan was an “employee benefit plan” within the meaning of ERISA.
Am. Compl. ¶ 9. Their only dispute is whether RSA § 275:48, II
relates to the plan within the meaning of § 1144.
A state law relates to an employee benefit plan “‘if it has
a connection with or reference to such a plan.’” Hampers, 202
F.3d at 49 (quoting Shaw v . Delta Air Lines, Inc., 463 U.S. 8 5 ,
98 (1983)). In particular, “a cause of action ‘relates to’ an
ERISA plan when a court must evaluate or interpret the terms of
the ERISA-regulated plan to determine liability under the state
law cause of action.” Id. at 5 2 . In order to evaluate Wal-
Mart’s potential liability for lost benefits, I would be required
to interpret the terms of the Plan. Therefore, I conclude that
RSA § 275:48, II relates to employee benefit plans and is
preempted by ERISA. See Ball v . Ripley, N o . 04-cv-183-PB, 2006
U.S. Dist. LEXIS 4346, at *3 (Jan. 2 5 , 2006) (claim under RSA §
275:48, II preempted by ERISA); c f . Jackson v . Wal-Mart Stores,
Inc., 24 Fed. Appx. 1 3 2 , 133 (4th Cir. 2001) (unpublished) (claim
under South Carolina Payment of Wages Act for alleged excessive
deductions from wages for employee benefit plan premiums was
-11- preempted by ERISA). In fact, Perrotti-Johns’ claim under RSA §
275:48, II is preempted by the very ERISA claims she asserts in
Counts I and I I . See Lamberty v . Premier Millwork & Lumber Co.,
329 F. Supp. 2d 7 3 7 , 742 (E.D. V a . 2004) (plaintiff’s state law
claim is preempted where it “alleges the same conduct comprising”
plaintiff’s ERISA claims). Accordingly, Wal-Mart’s motion to
dismiss Count IV is granted.
2. RSA §§ 275:48, I I I , 415:18, VII(g)(4)
In Count VI, 7 Perrotti-Johns alleges that Wal-Mart violated
RSA § 275:48, III and § 415:18, VII(g)(4). RSA § 275:48, III
requires insurers and plan administrators to “notify an employee
in writing of termination of an employee benefit plan pursuant to
the notification requirements of RSA § 415:18, VII(g)(4) or
[ERISA], as applicable.” In addition to setting out notification
requirements, RSA § 415:18, VII(g)(4) provides that participants
in health insurance plans are eligible for a 39-week extension of
benefits after their coverage terminates. Perrotti-Johns
contends that Wal-Mart violated these statutes by (1) failing to
provide her with proper notice of its intent to terminate her
There is no Count V in the amended complaint.
-12- health insurance benefits; and (2) failing to notify her that she
was eligible for a 39-week extension of her health insurance
benefits. Wal-Mart responds that RSA § 275:48, III and RSA §
415:18, VII(g)(4) are preempted by ERISA. Once again, I agree.
Perrotti-Johns does not have a colorable argument that these
two statutes do not relate to employee benefit plans. See Dawson
v . Whaland, 529 F. Supp. 626, 632-33 (D.N.H. 1982) (RSA § 415:18,
VII(g) is preempted by ERISA). Instead, she argues that ERISA’s
so-called “savings clause,” 29 U.S.C. § 1144(b)(2)(A), exempts
the statutes from preemption. The savings clause provides that
ERISA does not preempt “any law of any State which regulates
insurance, banking, or securities.” 29 U.S.C. § 1144(b)(2)(A).
Perrotti-Johns’ argument is without merit. Although ERISA’s
savings clause exempts from preemption any state laws that
regulate insurance, the statute’s “deemer clause” specifies that
“an employee benefit plan . . . shall [not] be deemed to be an
insurance company or other insurer . . . for purposes of any law
of any State purporting to regulate insurance companies,
insurance contracts, banks, trust companies, or investment
companies.” 29 U.S.C. § 1144(b)(2)(B); see also FMC Corp. v .
Holliday, 498 U.S. 5 2 , 58 (1990). The two statutes at issue in
-13- Count VI address employee benefit plans. The deemer clause
therefore precludes application of the savings clause and the
statutes are preempted by ERISA. Wal-Mart’s motion to dismiss
Count VI is granted.
D. Common Law Wrongful Discharge
After Perrotti-Johns stopped working, she testified in an
employment discrimination action against Wal-Mart. She also
pursued a workers’ compensation claim. In Count I I I , she alleges
that Wal-Mart retaliated against her for these activities by
firing her. Wal-Mart responds that Perrotti-Johns’ common law
wrongful discharge claim is barred by the applicable state and
federal statutory remedies.8
8 Wal-Mart also argues (1) that Perrotti-Johns’ wrongful discharge claim is preempted by ERISA; and (2) that I should ignore her wrongful discharge allegations because they “contradict the allegations in her original pleading.” Def.’s Br. at 6; see Reddy v . Litton Indus., 912 F.2d 2 9 1 , 296 (9th Cir. 1990) (amendments to a complaint must be consistent with the original pleading). I disagree on both counts. As to Wal-Mart’s preemption argument, Perrotti-Johns’ wrongful discharge claim is premised on Wal-Mart’s alleged retaliation for her testimony in an employment discrimination lawsuit and her prosecution of a workers’ compensation claim. It is independent of her claims regarding the cancellation of her health insurance benefits and therefore does not relate to an employee benefit plan. Compare Woodcock v . Bristol-Myers Squibb Co., N o . CV-03-168-PB, 2005 U.S. Dist. LEXIS 12633, at *9 (D.N.H. Jun. 2 7 , 2005) (ERISA preempted a wrongful discharge claim where
-14- Under the First Circuit’s binding interpretation of New
Hampshire common law, an employee may not assert a wrongful
discharge claim if she has a statutory cause of action based on
the same conduct. Smith v . F.W. Morse & Co., 76 F.3d 413, 429
(1st Cir. 1996); see also Parker v . MVM, Inc., N o . 05-cv-380-SM,
2006 U.S. Dist. LEXIS 41447, at *7 (D.N.H. Jun. 2 0 , 2006) (“[T]he
Court of Appeals for the First Circuit has interpreted New
Hampshire common law to preclude a cause of action for wrongful
termination when the aggrieved employee has a statutory cause of
action arising out of the same conduct.”). Here, Wal-Mart argues
that Perrotti-Johns may avail herself of (1) Title VII of the
Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e, et
facts connected with an ERISA plan were “at the heart of” the dispute). As to Wal-Mart’s argument that Perrotti-Johns has pled contradictory allegations, I disagree that the original complaint and the amended complaint contradict one another. Perrotti- Johns’ allegation in her original complaint that she stopped working because she became disabled does not contradict her current position, which is that “while she was out due to her work related injury, she was terminated.” Pl.’s O b j . at 7 . Nor is Perrotti-Johns’ allegation that Wal-Mart terminated her employment in retaliation for her participation in the employment discrimination lawsuit and her pursuit of workers’ compensation benefits inconsistent with her earlier allegation that the retaliation was based only on the employment discrimination lawsuit.
-15- seq., and the New Hampshire Law Against Discrimination (“LAD”),
N.H. Rev. Stat. Ann. (“RSA”) § 354-A:1, et seq.; and (2) the New
Hampshire Workers’ Compensation Law (“WCL”), RSA § 281-A:1, et
seq.
I agree with Wal-Mart that Title VII and the LAD preclude
Perrotti-Johns’ wrongful discharge claim insofar as it is
premised on Wal-Mart’s alleged retaliation for her testimony in
the employment discrimination lawsuit. Title VII prohibits
employers from discriminating against employees because they have
“testified, assisted, or participated in any manner in an
investigation, proceeding, or hearing under [Title VII].” 42
U.S.C. § 2000e-3(a). Similarly, the LAD prohibits retaliation or
discrimination against a person who has “testified or assisted in
any proceeding under [the LAD].” RSA § 354-A:19. Both statutes
authorize a private right of action for alleged violations. See
42 U.S.C. § 2000e-16(c); RSA § 354-A:21-a, I . The availability
of these statutory remedies bars Perrotti-Johns from pursuing a
common law wrongful discharge claim arising from her
participation in the employment discrimination action. Cf.
Smith, 76 F.3d at 429 (Title VII precludes wrongful discharge
claim based on pregnancy discrimination). Accordingly, Wal-
-16- Mart’s motion to dismiss is granted as to Perrotti-Johns’
wrongful discharge claim arising from her participation in an
employment discrimination lawsuit against Wal-Mart.
I reject Wal-Mart’s argument that the WCL precludes
Perrotti-Johns’ wrongful discharge claim arising from Wal-Mart’s
alleged retaliation against her for pursuing a workers’
compensation claim. Under the WCL, “[a]n employee is entitled to
compensation . . . for ‘accidental injury or death arising out of
and in the course of employment.’” Karch v . BayBank FSB, 147 N.H.
525, 530 (2002) (quoting RSA § 281-A:2, X I ) . Unlike Title VII
and the LAD, however, the statute does not provide a private
right of action for retaliation stemming from an employee’s
pursuit of a claim under the statute. Furthermore, the New
Hampshire Supreme Court has squarely held that the WCL does not
bar common law wrongful discharge claims. Id. at 537; see also
Bruning v . D.E. Salmon, Inc., N o . 03-352-JD, 2003 U.S. Dist.
LEXIS 22787, at *12 (D.N.H. Dec. 1 8 , 2003). Thus, I proceed to
the merits of Perrotti-Johns’ claim.
To make out a wrongful discharge claim in New Hampshire, “a
plaintiff must allege and prove that: (1) the termination of
employment was motivated by bad faith, retaliation, or malice;
-17- and (2) that she was terminated for performing an act that public
policy would encourage or for refusing to do something that
public policy would condemn.” Karch, 147 N.H. at 536. Wal-Mart
argues that Perrotti-Johns has once again failed to adequately
plead that Wal-Mart terminated her employment. See First Order
at 9 (dismissing Perrotti-Johns’ wrongful discharge claim because
she did not allege that she was fired or that she resigned). I
disagree. While Perrotti-Johns concedes that she “does not
recall getting any formal notice of termination,” Am. Compl. ¶
5 2 , she contends that Wal-Mart “conducted itself” as if it had
fired her “by requiring [her] to surrender her employee discount
card, by ceasing to offer her stock options and completely
excluding her from the normal ‘Wal-Mart Employee Loop.’” Id.
These factual allegations permit a reasonable inference that Wal-
Mart terminated Perrotti-Johns’ employment and therefore are
sufficient to survive a 12(b)(6) motion. Wal-Mart has not
advanced any additional arguments in support of its motion to
dismiss this claim. Accordingly, Wal-Mart’s motion to dismiss is
denied as to Perrotti-Johns’ wrongful discharge claim based on
her prosecution of a workers’ compensation claim.
-18- IV. CONCLUSION
For the reasons described above, Wal-Mart’s motion to
dismiss (Doc. N o . 24) is granted as to Perrotti-Johns’ ERISA
claims, her state statutory claims, and her wrongful discharge
claim premised on Wal-Mart’s alleged retaliation for her
participation in an employment discrimination lawsuit. Wal-
Mart’s motion is denied as to Perrotti-Johns’ wrongful discharge
claim premised on Wal-Mart’s alleged retaliation for Perrotti-
Johns’ prosecution of a workers’ compensation claim.
SO ORDERED.
/s/Paul Barbadoro Paul Barbadoro United States District Judge
July 1 1 , 2006
cc: John M . Clothier, Esq. Paul R. Cox, Esq. David McGrath, Esq. Christopher R. Hedican, Esq.
-19-