Weiss v. National Westminster Bank Corp.

923 F. Supp. 381, 1996 U.S. Dist. LEXIS 9029, 1996 WL 255314
CourtDistrict Court, E.D. New York
DecidedApril 25, 1996
DocketNo. CV 94-1161
StatusPublished

This text of 923 F. Supp. 381 (Weiss v. National Westminster Bank Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weiss v. National Westminster Bank Corp., 923 F. Supp. 381, 1996 U.S. Dist. LEXIS 9029, 1996 WL 255314 (E.D.N.Y. 1996).

Opinion

ORDER

SPATT, District Judge.

This action was commenced by the plaintiff Lu Ann Weiss on March 14, 1994 alleging violations of the Employment Retirement Security Act, 29 U.S.C. § 1001 et seq. (“ERISA”) for denial of severance benefits, as well as state law claims for breach of contract. The defendant National Westminster Bank Corporation (“NatWest”) moved the Court for an order dismissing the case for failure to state a cause of action, pursuant to Fed.R.Civ.P. 12(b)(6), and for lack of subject matter jurisdiction, pursuant to Federal Rule 12(b)(1). The federal jurisdictional basis of this action is ERISA. NatWest claimed that the severance benefits at issue here do not constitute an employee welfare benefit plan within the meaning of 29 U.S.C. § 1002, so that there is no federal subject matter jurisdiction and no cause of action is stated.

In an Order dated March 16, 1995, the Court denied the defendant’s motion to dismiss the action and stated that at that early stage of the proceedings, it was unable to determine whether the

facts of this case bring it within the holdings of Fort Halifax and James, so that the severance benefits at issue do not constitute an ERISA employee welfare benefit plan? Or are the facts of this case more analogous to those of Gilbert and its proge[382]*382ny so that the severance benefits in question are subject to ERISA regulations?

March 16, 1996 Memorandum Decision and Order at 9 (citing Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987) and James v. Fleet/Norstar Financial Group, Inc., 992 F.2d 463 (2d Cir.1993)). Finding this question a “critical threshold matter in this action,” the Court referred the issue to United States Magistrate Judge Viktor V. Pohorelsky to hold a hearing and prepare a report and recommendation.

On July 14, 1995 Judge Pohorelsky held a hearing at which one witness testified, namely, Richard Greco who serves in the position of vice president at NatWest’s human resources division. On September 26, 1995, Judge Pohorelsky issued a report and recommendation that the “defendant’s ‘bridging pay’ policy is an ‘employee welfare benefit plan’ within the meaning of the applicable sections of ERISA, and that the court accordingly has subject matter jurisdiction to determine this action.” The defendant filed timely objections to the September 26, 1995 Report and Recommendation.

DISCUSSION

A. Standard of review

28 U.S.C. § 636(b)(1) provides that upon timely objection to recommendations by a magistrate judge:

[a] judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate. The judge may also receive further evidence or remit the matter to the magistrate with instructions.

28 U.S.C. § 636(b)(1); see also Fed.R.Civ.P. 72(b). The Second Circuit has stated that

the statutory language of section 636(b)(1) affords the district court broad latitude in considering the magistrate’s recommendation. Moreover, the phrase de novo determination in section 636(b)(1), as opposed to de novo hearing, was selected by Congress “to permit whatever reliance a district judge, in the exercise of sound judicial discretion, chose to place on a magistrate’s proposed findings and recommendations.” United States v. Raddatz, 447 U.S. 667, 676, 100 S.Ct. 2406, 2412, 65 L.Ed.2d 424 (1980). Section 636 does not require the district court “to rehear the contested testimony in order to carry out the required ‘determination.’ ” Id. at 674, 100 S.Ct. at 2411.

Grassia v. Scully, 892 F.2d 16, 19 (2d Cir.1989). Furthermore, “the degree of deference given magistrate’s recommendations is subject to the district court’s discretion. Id. (citing Raddatz, 447 U.S. at 676, 100 S.Ct. at 2412).

Guided by these standards, the Court will conduct a de novo review of Judge Pohorel-sky’s report and recommendation.

B. NatWest’s “bridging pay" policy

The September 26, 1995 Report and Recommendation analyzed the facts and circumstances regarding the defendant’s ‘bridging pay’ policy under the relevant cases discussing the scope of ERISA, including, Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987) and James v. Fleet/Norstar Financial Group, Inc., 992 F.2d 463 (2d Cir.1993). Judge Pohorelsky wrote that

Both decisions [.Halifax and Fleet/Nors-tar ] turned on the fact that the severance pay programs under scrutiny were onetime payments provided to a circumscribed group of employees and triggered solely by the occurrence of a single, non-recurring event, as distinguished from an ongoing program of providing severance pay which is available generally to employees upon termination for a variety of reasons. As both decisions pointed out, in the former situation, “‘The employer assumes no responsibility to pay benefits on a regular basis and thus faces no periodic demands on its assets that create a need for financial coordination and control.’ ” Fleet/Norstar, 992 F.2d at 466, quoting Fort Halifax, [482 U.S. at 12] 107 S.Ct. at 2218. Thus, the focus on administrative [383]*383supervision in those eases was not on the quality or extent of such supervision, but rather on the fact that, because a plan covered by ERISA is ongoing, an employer has to establish some kind of administrative system to identify, on a recurring basis as employees are terminated, those who qualify for severance benefits and to keep track of the payment of those benefits. More importantly, the focus on administrative supervision in those cases was premised on the notion that the presence of such supervision is a bellwether for identifying a plan as an ongoing program in need of the protections of ERISA because it is likely to create “periodic demands on ... assets that create a need for financial coordination and control.” Id.

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Related

United States v. Raddatz
447 U.S. 667 (Supreme Court, 1980)
Fort Halifax Packing Co. v. Coyne
482 U.S. 1 (Supreme Court, 1987)
Massachusetts v. Morash
490 U.S. 107 (Supreme Court, 1989)
Gilbert v. Burlington Industries, Inc.
765 F.2d 320 (Second Circuit, 1985)
John E. Fontenot v. Nl Industries, Inc.
953 F.2d 960 (Fifth Circuit, 1992)
Floyd Frank v. Sally B. Johnson
968 F.2d 298 (Second Circuit, 1992)
Diane James v. Fleet/norstar Financial Group, Inc.
992 F.2d 463 (Second Circuit, 1993)
IUE AFL-CIO Pension Fund v. Herrmann
9 F.3d 1049 (Second Circuit, 1993)
Holland v. Burlington Industries, Inc.
772 F.2d 1140 (Fourth Circuit, 1985)
Roberts v. Burlington Industries, Inc.
477 U.S. 901 (Supreme Court, 1986)
Martin v. Haith
477 U.S. 901 (Supreme Court, 1986)
Mays v. Angelone
506 U.S. 1039 (Supreme Court, 1992)
National States Insurance v. Nassen
507 U.S. 1031 (Supreme Court, 1993)

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Bluebook (online)
923 F. Supp. 381, 1996 U.S. Dist. LEXIS 9029, 1996 WL 255314, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weiss-v-national-westminster-bank-corp-nyed-1996.