Smith v. Fidelity Workplace Services LLC

• Court: District Court, N.D. California
• Decided: March 1, 2022
• Docket: 3:21-cv-03941
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 TIMOTHY SMITH, Case No. 21-cv-03941-JD

8 Plaintiff, ORDER RE MOTIONS TO DISMISS v. 9 Re: Dkt. Nos. 12, 13 10 FIDELITY WORKPLACE SERVICES LLC, et al., 11 Defendants.

12 13 This is a breach of contract case relating to a pension plan. Dkt. No. 1-1. Plaintiff 14 Timothy Smith originally filed the lawsuit in Alameda County Superior Court, and alleged claims 15 for breach of contract and common counts of money had and received, and “an open book account 16 for money due.” Id. Defendants AT&T Services, Inc. and Fidelity Workplace Service LLC 17 removed to this Court on the basis of complete preemption by the federal Employee Retirement 18 Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., see Dkt. No. 1 ¶¶ 7, 10. Smith 19 did not seek a remand. Defendants ask to dismiss the complaint for failure to state a claim under 20 Rule 12(b)(6) because the claims are preempted by ERISA, and barred by the statute of 21 limitations. Dkt. Nos. 12, 13.1 The parties’ familiarity with the record is assumed, and the motion 22 is granted with leave to amend. 23 DISCUSSION 24 The Court has detailed the standards for ERISA preemption in a recent case, Javier v. 25 Kaiser Found. Health Plan Inc., No. 20-CV-00725-JD, 2020 WL 5630020, at *2 (N.D. Cal. Sept. 26 1 Defendants are represented by the same counsel and filed separate but substantively identical 27 motions to dismiss and replies. See Dkt. Nos. 12, 13, 19, 20. For ease of citation, the Court refers 1 21, 2020), and that discussion is incorporated here. Under ERISA, “state law claims may be 2 ‘completely’ preempted, in which case they are treated as if brought under federal law, and so 3 there is federal subject matter jurisdiction over the claims.” Id. (citing Beneficial Nat. Bank v. 4 Anderson, 539 U.S. 1, 7-8 (2003) and Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 67 (1987)). 5 Complete preemption and ordinary defensive preemption are different: “complete preemption is 6 about the Court’s subject matter jurisdiction, while defensive preemption is about whether the 7 breach of contract claim is displaced by ERISA.” Javier, 2020 WL 5630020, at *2. 8 The Court has subject matter jurisdiction because Smith’s claims are completely 9 preempted in that they could have been brought under Section 502(a)(1)(B) of ERISA, and 10 defendants’ alleged actions “implicate ‘no other legal duty.’” Id. (citing Aetna Health Inc. v. 11 Davila, 542 U.S. 200, 210 (2004). Section 502(a)(1)(B) provides that a civil action may be 12 brought “by a participant or beneficiary . . . to recover benefits due to him under the terms of his 13 plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits 14 under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). The term “plan” means, among other 15 things, “an employee pension benefit plan.” 29 U.S.C. § 1002(3). Section 502(a)(1)(B) is 16 implicated here because Smith seeks to recover benefits allegedly due to him under the terms of 17 his wife’s employee pension benefit plan. Overall, “[t]here is also no duty implicated” by 18 defendants’ conduct “independent of its duties under the plan,” Javier, 2020 WL 5630020, at *2, 19 or a duty that might be said to have arisen “independently of ERISA or the plan terms,” Davila, 20 542 U.S. at 212, and the only contract identified in the complaint is the “agreement to contribute” 21 pursuant to the pension plan. See Dkt. No. 1-1, Ex. A. at 3. 22 The remaining question is whether the claims for breach of contract and common counts 23 are defensively preempted. “When a claim is removed to federal court, the state law claim is 24 reconfigured as a federal ERISA cause of action under § 502(a). Then, an analysis is undertaken 25 to examine whether the transformed cause of action conflicts with ERISA. If so, it is preempted. 26 If not, it remains viable as a federal ERISA cause of action.” Rudel v. Hawai’i Mgmt. All. Ass’n, 27 937 F.3d 1262, 1269 (9th Cir. 2019). Section 502 creates “a comprehensive scheme of civil 1 scope of this scheme of remedies is preempted as conflicting with the intended exclusivity of the 2 ERISA remedial scheme.” Cleghorn v. Blue Shield of Cal., 408 F.3d 1222, 1225 (9th Cir. 2005). 3 “Breach of contract claims arising out of the administration of an employee benefit plan,” 4 || like the contract claim alleged in the complaint, “are preempted by ERISA.” Javier, 2020 WL 5 5630020, at *2 (citing Bast vy. Prudential Ins. Co. of Am., 150 F.3d 1003, 1007-08 (9th Cir. 1998), 6 as amended (Aug. 3, 1998)). Smith’s “breach of contract claim concerns the administration of an 7 employee benefit plan, and does not fall within any exception.” /d. at *3. Consequently, it is 8 || preempted by ERISA, and dismissal is warranted. See Cleghorn, 408 F.3d at 1227. 9 For the common counts, they are in effect “an alternative way of seeking the same 10 recovery demanded” in the breach of contract claim on the same facts, and so they too must be 11 dismissed. See McBride v. Boughton, 123 Cal. App. 4th 379, 394 (2004). Smith offers no reason 12 || to conclude otherwise, and says only that “as a statutorily recognized beneficiary of his wife’s 5 13 ERISA plan, he has standing to make this claim.” Dkt. No. 16 at 7. That does not bear on the 14 || question of preemption for purposes of dismissal. 3 15 CONCLUSION a 16 The state law claims are dismissed as preempted by ERISA. Dismissal on statute of 3 17 limitations grounds is denied without prejudice to renewal as circumstances might warrant. See 18 Beier v. Int'l Bhd. of Teamsters, No. 18-CV-06632-JD, 2020 WL 1929225, at *3 n.1 (N.D. Cal. 19 || Apr. 21, 2020) dimitations arguments “are rarely appropriate for resolution at the motion to 20 || dismiss stage,” and “need not be reached based on the dismissal on other independent grounds.”’). 21 Smith may file by March 22, 2022, an amended complaint that is consistent with this order. A 22 || failure to meet this deadline may result in dismissal of the case with prejudice under Federal Rule 23 of Civil Procedure 41(b). 24 IT IS SO ORDERED. 25 Dated: March 1, 2022 26 27 JAMES ATO 28 United fates District Judge