Memorandum and Order
I. Pending Matters
Pending for decision are matters related to the followingfilings:
(1) Defendants' Motion to Dismiss and for Summary Judgment(Docket No. 30, filed December 13, 2004);
(2) Defendants' Memorandum of Law in Support of Motion toDismiss and Motion for Summary Judgment (Docket No. 31, filedDecember 13, 2004);
(3) Defendants' Local Rule 56.1 Statement of Material Fact asto Which There is No Genuine Issue to be Tried (Docket No. 32,filed December 13, 2004);
(4) Appendix to Defendants' Motion to Dismiss and for SummaryJudgment (Docket No. 33, filed December 13, 2004);
(5) Plaintiff's, Gerald Walsh, Response to Defendants' Rule56.1 Statement (Docket No. 37, filed February 3, 2005);
(6) Plaintiff's, Gerald Walsh, Rule 56.1 Statement (Docket No.38, filed February 3, 2005);
(7) Plaintiff's Gerald Walsh, Opposition to Defendants' Motionto Dismiss and Motion for Summary Judgment (Docket No. 39, filedFebruary 3, 2005);
(8) Appendix to Plaintiff's Opposition to Defendants' Motion toDismiss and Motion for Summary Judgment (Docket No. 40, filedFebruary 4, 2005);
(9) Defendants' Reply Memorandum to Plaintiff's Opposition toDefendants' Motion to Dismiss and Motion for Summary Judgment(Docket No. 41, filed February 25, 2005);
(10) Motion to Strike Plaintiff's Rule 56.1 Statement andPlaintiff's Response to Defendants' Rule 56.1 Statement (DocketNo. 42, filed March 9, 2005);
(11) Memorandum of Law in Support of Defendants' Motion toStrike Plaintiff's Rule 56.1 Statement and Plaintiff's Responseto Defendants' Rule 56.1 Statement (Docket No. 43, filed March 9,2005);
(12) Affidavit of Gail A. Goolkasian, Esq., in Connection withMotion to Strike Plaintiff's Rule 56.1 Statement (Docket No. 44,filed March 9, 2005); and
(13) Plaintiff's, Gerald Walsh, Opposition to Defendants'Motion to Strike Plaintiff's Rule 56.1 Statement and Plaintiff'sResponse to Defendants' Rule 56.1 Statement (Docket No. 45, filedMarch 18, 2005).
II. Factual and Procedural Background
Mr. Walsh began working for The Gillette Company (collectivelywith The Gillette Company Retirement Plan, "Gillette") in 1974,providing training and training materials. Amended Complaint andJury Demand, ¶ 7. He continued to work for the company until1998. Id. at ¶ 17. During this time, Gillette served as the plan sponsor, planadministrator, and named fiduciary of the Gillette RetirementPlan ("Plan"). Id. at ¶ 18. Throughout Mr. Walsh's time workingfor Gillette, Gillette classified Mr. Walsh as an independentcontractor, not classifying him as an employee for tax purposesor benefit programs. Id. at ¶ 21. Mr. Walsh declared his incomefrom Gillette as business income from a sole proprietorship,rather than wages, on his tax returns during this period, andsubmitted statements to Gillette for business expenses and"professional services." Tax returns and statements, attached asExhibits 3 and 4 to Appendix to Defendants' Motion to Dismiss andfor Summary Judgment.
Several times from October 1999 through 2000, Mr. Walsh'scounsel requested information from Gillette concerningdescriptions of the Plan. Amended Complaint and Jury Demand, ¶22-25. Mr. Walsh then presented a claim for ERISA benefits, whichthe Administrator of Gillette's Retirement, Savings and StockOwnership Plans denied on April 10, 2002. Id. at ¶ 26-27. Mr.Walsh appealed this decision to the Gillette Company RetirementPlan Committee and Savings Plan Committee ("Appeal Committees").Id. at ¶ 28. On December 3, 2002, the Appeal Committees deniedMr. Walsh's claim for benefits. Id. at ¶ 29.
Mr. Walsh filed a complaint in the United States District Courtfor the District of Massachusetts on August 14, 2003. Thiscomplaint raises four separate counts. In Count I, Mr. Walshalleges that Gillette failed to provide him with the benefits dueto him under the Plan pursuant to 11 U.S.C. § 1132(a)(1)(B),ERISA § 502(a)(1)(B). In Count II, Mr. Walsh alleges thatGillette discriminated against him for the purpose of interferingwith the attainment of the rights to which he is entitled underERISA, in violation of 29 U.S.C. § 1140, ERISA § 510. In CountIII, Mr. Walsh alleges that he was at all relevant times a commonlaw employee and is thus entitled to benefits such as life, health and disability insurance benefits,vacation pay, performance bonuses, social security payments, anda reduced withholding of FICA taxes. In Count IV, Mr. Walshalleges that Gillette violated its duties pursuant to29 U.S.C. §§ 1021 and 1024 and 29 U.S.C. § 1132(c)(1)(B) by failing toprovide him with the information he requested concerning thePlan.
On December 13, 2004, pursuant to Fed.R.Civ.P. 12(b)(1) and12(b)(6) and Fed.R.Civ.P. 56, defendants filed a Motion toDismiss and for Summary Judgment.
A. Standard of Review
In deciding a motion to dismiss, this court must accept as trueall well-pleaded factual assertions in the complaint and draw allreasonable inferences from those assertions in the plaintiff'sfavor. Aybar v. Crispin-Reyes, 118 F.3d 10, 13 (1st Cir.1997). At a minimum, the plaintiff is "obliged to set forthfactual allegations, either direct or inferential, respectingeach material element necessary to sustain recovery under someactionable legal theory." Roth v. United States,952 F.2d 611, 613 (1st Cir. 1991). The court may dismiss a claim only ifit appears beyond doubt that the claimant can prove no set offacts that could support a recovery. Tamburello v. Comm-TractCorp., 67 F.3d 973, 975 (1st Cir. 1995).
As outlined below, this court did not need to addressdefendants' motion for summary judgment. The different standardof review for motions for summary judgment is thereforeinapplicable.
B. Subject Matter Jurisdiction Pursuant to Fed.R.Civ.P. 12(b)(1), Gillette argues that thiscourt does not have subject matter jurisdiction over Mr. Walsh'sclaims under ERISA § 502(a)(1)(B) and ERISA § 510 (Counts I andII). ERISA provides "a panoply of remedial devices" forparticipants and beneficiaries of benefit plans. Firestone Tire& Rubber Co. v. Bruch, 489 U.S. 101, 108 (1989) (quotingMass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146(1985)). In order to provide these federal remedies, ERISAsupersedes all state laws that relate to any employee benefitplan covered by ERISA. See 29 U.S.C. § 1144(a). Thissupersedure does not, however, apply to state law "with respectto any cause of action which arose, or any act or omission whichoccurred, before January 1, 1975." 29 U.S.C. § 1144(b)(1).Instead, claims arising from events that occurred before January1, 1975 are not covered by ERISA, and this court thus lackssubject matter jurisdiction over them.
This court has held that a cause of action for recovery ofbenefits under ERISA accrues when a claimant's appeal forbenefits is denied. Salcedo v. John Hancock Mut. Life Ins.Co., 38 F. Supp.2d 37, 43-44 (D. Mass. 1998). In this case, theGillette Appeal Committees formally denied Mr. Walsh's requestfor ERISA benefits on December 3, 2002. Using this date as thedate when the cause of action arose means that ERISA doessupersede all relevant state laws and that this court doestherefore have subject matter jurisdiction under29 U.S.C. § 1144(b)(1).
Gillette contends, however, that federal courts do not havejurisdiction over this case pursuant to ERISA's supersedureprovisions because 29 U.S.C. § 1144(b)(1) refers to acts oromissions as well as causes of action. As the First Circuit foundin Quinn v. Country Club Soda Co., Inc., 639 F.2d 838, 840-41(1st Cir. 1981), the phrase "act or omission" refers tosignificant facts that give rise to a claim but that fall shortof establishing a cause of action. Defendants argue that, under this clause of 29 U.S.C. § 1144(b)(1), the relevantact or omission was Gillette's characterization of Mr. Walsh asan independent contractor when he was first hired in 1974. Sincethis act occurred before January 1, 1975, defendants contend thatthis court does not have jurisdiction over Mr. Walsh's claims.
Although the First Circuit has held that some acts or omissionsoccurring before January 1, 1975, are sufficient to deny federalsubject matter jurisdiction over a claim arising from a benefitsplan, see Quinn, 639 F.2d at 841 (finding the relevant act tobe the benefit plan's classification of plaintiff as anon-participant in 1960); Cowan v. Keystone Employee ProfitSharing Fund, 586 F.2d 888, 894-95 (1st Cir. 1978) (finding therelevant act to be the benefit plan's adopting of an amendment in1974), these qualifying acts or omissions have been "independent,actionable event[s]." Cowan, 586 F.2d at 894. In Cowan, thebasic wrong of which the plaintiff complained was his exclusionfrom benefits due to a 1974 amendment to the earlier-establishedbenefits plan. In Quinn, the basic wrong of which the plaintiffcomplained was his exclusion from benefits due to "a positionconsistently taken and communicated to plaintiff from the timethe Plan was established." 639 F.2d at 841. In the instant case,however, the basic wrong of which Mr. Walsh complains is hisexclusion from benefits plans that were not yet in existence atthe time he commenced work for Gillette. Although hisclassification as an independent contractor may have occurredbefore January 1, 1975, the effect of this classification on hisbenefits could not have arisen until the benefits plansthemselves had been established. Mr. Walsh's claim for benefitswas denied with reference to the Retirement Plan as revised in1976, and neither party has produced any evidence that theSavings Plan and Stock Plan that also underlie his claims wereestablished prior to January 1, 1975. Since no relevant act or omission occurred before January 1,1975, 29 U.S.C. § 1144(b)(1) does not prevent this court fromexercising federal subject matter jurisdiction over Mr. Walsh'sclaims pursuant to ERISA.
C. Statute of Limitation
Pursuant to Fed.R.Civ.P. 12(b)(6), Gillette next argues thatMr. Walsh's claims under ERISA § 502(a)(1)(B) and ERISA § 510(Counts I and II, respectively) are time-barred.
When no shorter statute of limitation is provided within theplan, a claim for benefits under an ERISA plan is governed by thestatute of limitation prescribed for contract actions in thestate in which the claim is brought. Alcorn v. Raytheon Co.,175 F.Supp.2d 117, 120 (D. Mass. 2001) (citing Salcedo,38 F.Supp.2d at 40). Massachusetts has a six-year statute oflimitation for actions in contract. The question at issue is whenthe statute of limitation began to run. Defendants contend thatplaintiff's claim accrued when he first discovered that he wasclassified as an independent contractor. Plaintiff argues thathis claim did not accrue until his request for benefits wasformally denied.
Although other courts have interpreted the "discovery rule,"under which the plaintiff's claim accrues as soon as he discoversor should have discovered the injury that is the basis of thelitigation, to find that the period of limitation began to runbefore the plaintiff was formally denied benefits, this earlieraccrual date only applies when the earlier action was a"repudiation of the employee's claim for benefits by thefiduciary which is clear and made known to the beneficiary."Bolduc v. National Semiconductor Corp., 35 F. Supp.2d 106,119 (D. Me. 1998). When the consequences of an earlier action onthe plaintiff's benefits are not explicitly made clear to theplaintiff, this court finds that a cause of action for recoveryof benefits under ERISA accrues when an application for benefits is formallydenied. See Salcedo, 38 F.Supp.2d at 42. In the instant case,although Mr. Walsh was classified as an independent contractor atthe time of his original hiring in 1974, Gillette did not notifyhim of the impact of this classification on his benefits to asufficient extent to qualify as a clear repudiation of his claimfor benefits. Mr. Walsh's cause of action did not begin to accrueuntil December 3, 2002, when the Gillette Appeal Committeeformally denied his request for ERISA benefits. His ERISA §502(a)(1)(B) claim thus falls well within the six-year statute oflimitation and is not time-barred.
Mr. Walsh's second claim arises under ERISA § 510. The FirstCircuit has held that § 510 claims for benefits are mostanalogous to claims for wrongful termination or retaliatorydischarge, and therefore that the Massachusetts three-yearstatute of limitation for tort, provided in Mass. Gen. Lawsch. 260, § 2A, applies. See Muldoon v. C.J. Muldoon & Sons,278 F.3d 31, 32 (1st Cir. 2002). The question is again when thestatute of limitation began for Mr. Walsh's claim.
This court has held in Ede v. Verizon Communications, Inc.,288 F.Supp.2d 55, 59 (D. Mass. 2003), that the statute oflimitation clock for an ERISA § 510 claim begins when plaintiffswere hired and classified as workers not eligible for employeebenefits. This determination of when the cause of action accruesfor statute of limitation purposes is again based on thediscovery rule, however. See id. (citing cases referring toplaintiff's discovery of the employment decision). Therefore,although Gillette classified Mr. Walsh as an independentcontractor at the time of his hiring in 1974, this act did notalert Mr. Walsh of the fact that he would not be eligible forbenefits under the Retirement Plan, the Savings Plan, or theStock Plan since none of the three was yet providing the benefitsto which he now claims a right. The time at which Mr. Walsh was explicitly made aware that he would notreceive benefits was on December 3, 2002, when the GilletteAppeal Committees formally denied his request for benefits. Thisis the date from which the three-year statute of limitation forplaintiff's § 510 claim runs, and Count II is therefore nottime-barred.
D. Plaintiff's Standing Under 29 U.S.C. § 1132(a)(1)
Mr. Walsh brings Counts I, II, and IV pursuant to ERISA's civilenforcement provision, which provides that a "participant orbeneficiary" may bring suit under ERISA to enforce the disclosurerequirements or "to recover benefits due to him under the termsof his plan, to enforce his rights under the terms of the plan,or to clarify his rights to future benefits under the terms ofthe plan." 29 U.S.C. § 1132(a)(1). Defendants move pursuant toFed.R.Civ.P. 12(b)(6) to dismiss on the basis that plaintifflacks standing under this provision since he is not aparticipant, beneficiary, or fiduciary.
In this case, no doubt exists that Mr. Walsh is not afiduciary. There is a question, however, as to whether he is abeneficiary or a participant. In Firestone, the Supreme Courtdefined a "participant" for these purposes to include twodistinct categories: (1) "employees in, or reasonably expected tobe in, currently covered employment," or (2) "former employeeswho have a reasonable expectation of returning to coveredemployment and/or a colorable claim to vested benefits."Crawford v. Lamantia, 34 F.3d 28, 32 (1st Cir. 1994) (citing489 U.S. 101, 117, 109 (1989)). Mr. Walsh is unquestionably not acurrent employee of Gillette. Mr. Walsh is also not a formeremployee with a reasonable expectation of returning toemployment. Mr. Walsh will also not be able to prove factsshowing that he is a former employee with a colorable claim tovested benefits. Although Mr. Walsh contends that he was anemployee of Gillette, the Plan Administrator and the Appeal Committees have found that he doesnot fit the Plan definition of an eligible employee, and thusthat he does not have a colorable claim to vested benefits. Dueto the deference that a court must show to that determination,that finding prevents Mr. Walsh from having the colorable claimnecessary to be a "participant" for purposes of ERISA.
The First Circuit has recently held that, when a benefits planreserves interpretive discretion to its administrator, judicialreview of the administrator's eligibility determination islimited to ascertaining whether the administrator actedarbitrarily and capriciously. Kolling v. Am. Power ConversionCorp., 347 F.3d 11, 13 (1st Cir. 2003). Application of thearbitrary and capricious standard will affirm the factfinder'sdecision whenever the decision is plausible in light of therecord as a whole. See Leahy v. Raytheon, 315 F.3d 11, 17(1st Cir. 2002). Even when judicial review occurs as part of theanalysis of another motion, the First Circuit applies thearbitrary and capricious standard, rather than the more stringentstandard for the motion. See id. (applying the arbitrary andcapricious standard when reviewing a determination by a planadministrator as part of the analysis of a motion for summaryjudgment).
The Retirement Plan gives the Retirement Plan Committee solediscretion over all determinations of any benefits payable underthe Retirement Plan. This grant of interpretive discretion to theadministrator exists in all versions of the Retirement Planprovided by the plaintiff and the defendant. See, e.g., TheGillette Company Retirement Plan Effective January 1, 1976, atpage 24, attached as Exhibit D to the Appendix to Plaintiff'sOpposition to Defendant's Motion to Dismiss and Motion forSummary Judgment ("The [Retirement Plan] Committee shall make alldeterminations as to the right to amount and level of any benefitpayable under the Plan"), The Gillette Company Retirement PlanEffective September 21, 2000, at page 38, attached as Exhibit D to the Appendix to Defendants' Motion toDismiss and for Summary Judgment ("The [Retirement Plan]Committee shall have such discretionary powers and authority asmay be necessary or appropriate to . . . construe and interpretthe Plan, decide all questions of eligibility, and determine theamount, manner and timing of payment of all benefits hereunder").In reviewing the Appeal Committees' determination of Mr. Walsh'seligibility for benefits under the Retirement Plan, the courtmust therefore apply the arbitrary and capricious standard.
In reviewing the administrator's determination of eligibility,courts must determine only whether the administrator's action onthe record before her was reasonable. See Liston v. UnumCorp. Officer Severance Plan, 330 F.3d 19, 23 (1st Cir. 2003).Here, the Retirement Plan Committee reviewed all correspondenceprovided by Mr. Walsh, as well as copies of Mr. Walsh's taxreturns, invoices, and contracts. The decision that Mr. Walsh wasnot eligible for benefits was based on the Committee'sinterpretation of the Retirement Plan's definition of an eligibleemployee, which they deemed to be one who "(1) was subject to allGillette personnel policies, practices and procedures, includingthose set forth in the Gillette Employee Handbook, and (2) wascarried on and paid from the Gillette employee payroll for whichincome was reported on a Form W-2." Letter to Gerald F. Mr.Walsh, December 3, 2002, at page 7, attached as Exhibit 2 to theAppendix to Defendants' Motion to Dismiss and for SummaryJudgment. Given the record before the Retirement Plan Committee,including Mr. Walsh's tax returns dating from 1976 through 1999in which he reported his income from Gillette as profit from asole proprietorship on Schedule C, rather than wages reported ona W-2, the finding that Mr. Walsh did not fall into this categorydoes not strike me as unreasonable. Mr. Walsh's contention that the Committee's denial of benefitsto him was unreasonable because he fit the definition of a commonlaw employee is insufficient to overturn the Committee'sdetermination. Even if Mr. Walsh were to fit the definition of acommon law employee, nothing in ERISA requires that a plan extendbenefits to every common law employee. See Kolling,347 F.3d at 14 (noting that this is true so long as the plan does notdiscriminate based on age or length of service). The language ofthe benefits plan, not common law status, controls who can bedeemed eligible. Id. Here, the Committee reasonably interpretedthe term "regular employee" as intending not to include thoseemployees who were not receiving income in the form of wagesrequired to be reported on a W-2 form.
Due to the Committees' determination that Mr. Walsh was noteligible for benefits, and thus cannot be considered a formeremployee with a colorable claim to vested benefits, Mr. Walshdoes not meet the definition of a "participant." He thus only hasstanding if he meets the ERISA definition of a "beneficiary."
Section 1002(8) of Title 29 of the United States Code defines a"beneficiary" for ERISA purposes to be "a person designated by aparticipant, or by the terms of an employee benefit plan, who isor may become entitled to a benefit thereunder."29 U.S.C. § 1002(8). Mr. Walsh was not designated by a participant, nor is heentitled to a benefit under the terms of the employee benefitplan due to the aforementioned determination by the AppealCommittees. Mr. Walsh therefore lacks standing under29 U.S.C. § 1132 to bring his claims under ERISA, and I will grant thedefendants summary judgment for Counts I, II, and IV.
D. Plaintiff's Claim for Other Benefits as a Common LawEmployee Along with his claims pursuant to ERISA, Mr. Walsh also claimsthat he was a common law employee of Gillette and was thusentitled to benefits other than those provided in the Gillettebenefits plans. These alleged benefits include life, health anddisability insurance benefits, vacation pay, performance bonuses,social security payments, and a reduced withholding of FICA taxespursuant to 26 U.S.C. § 3100, et seq. Defendants have movedpursuant to Fed.R.Civ.P. 12(b)(6) to dismiss this complaint forfailure to state a claim upon which relief can be granted.
Despite the favorable standard of review for plaintiff,plaintiff has not stated a claim on which relief can be granted.Even if plaintiff does meet the definitions of common lawemployees as outlined in Nationwide Mut. Ins. Co. v. Darden,503 U.S. 318 (1992), which I do not address here, plaintiff doesnot cite any common law right to the benefits to which he claimshe is entitled. Common law employees do not have any right tobenefits that are extended to other employees, Kolling,347 F.3d at 14, and common law employees do not have any generalright to the benefits claimed by Mr. Walsh. I thus grantdefendants' motion to dismiss Count III.
E. Defendants' Motion to Strike
The Motion to Strike requests that the court strike certainparagraphs of Plaintiff's, Gerald Walsh, Rule 56.1 Statement andPlaintiff's, Gerald Walsh, Response to Defendants' Rule 56.1Statement for failure to comply with Fed.R.Civ.P. 56(e) andLocal Rule 56.1. Both Fed.R.Civ.P. 56(e) and Local Rule 56.1are limited to the context of summary judgment. My decision todismiss all of plaintiff's claims has rendered defendants' Motionfor Summary Judgment immaterial and has thereby made itinappropriate to strike the plaintiff's statements in response tothe Motion for Summary Judgment. ORDER
For the foregoing reasons, it is ORDERED:
(1) Defendants' Motion to Dismiss (Docket No. 30, filedDecember 13, 2004) is GRANTED; and
(2) Defendants' Motion to Strike Plaintiff's Rule 56.1Statement and Plaintiff's Response to Defendant's Rule 56.1Statement (Docket No. 42, filed March 9, 2005) is DISMISSEDWITHOUT PREJUDICE; and
(3) The Clerk is directed to enter forthwith on a separatedocument a Final Judgment accordingly. Publisher Information
Note* This page is not part of the opinion as entered by the court. The docket information provided on this page is for the benefit of publishers of these opinions.