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Jackson v. A T & T Retirement Savings Plan

United States District Court, W.D. Louisiana, Lafayette Division

September 17, 2019

SAMANTHA J JACKSON
v.
A T & T RETIREMENT SAVINGS PLAN ET AL

          JUNEAU, JUDGE

          REPORT AND RECOMMENDATION

          PATRICK J. HANNA, UNITED STATE MAGISTRATE JUDGE

         Before the Court are four Motions to Dismiss pursuant to F.R.C.P. Rule 12(b)(6) filed on behalf of Defendants, AT&T Retirement Savings Plan, Mobility Program of the AT&T Benefit Plan, AT&T Inc., AT&T Services, Inc., Fidelity Workplace Services LLC, and AT&T Mobility Services, LLC.[1] (Rec. Doc. 6; 23; 30; 35). Plaintiff, Samantha Jackson, proceeding pro se, opposed. (Rec. Doc. 33 and 40). Defendants replied. (Rec. Doc. 37 and 43). The Motions were referred to the undersigned magistrate judge for review, report, and recommendation in accordance with the provisions of 28 U.S.C. §636 and the standing orders of this Court. Considering the evidence, the law, and the arguments of the parties, and for the reasons fully explained below, it is recommended that Defendants' Motions at Rec. Doc. 6 and 23 be DENIED AS MOOT and that Defendants' Motion to Dismiss at Rec. Doc. 30 and 35 be GRANTED IN PART AND DENIED IN PART.

         Factual and Procedural History

         Plaintiff, a pro se litigant, filed this lawsuit on January 29, 2019 alleging various transgressions against Defendants related to her employment with AT&T. (Rec. Doc. 1). Before Defendants answered the suit, Plaintiff filed a First Amended Complaint in which she clarified her claims to include thirteen counts for alleged violations of the Employment Retirement Income Security Program (ERISA), Fair Labor Standards Act (FLSA), fraud, harassment and retaliation, inter alia. (Rec. Doc. 3). In response, Defendants filed their first Motion to Dismiss Plaintiff's First Amended Complaint. (Rec. Doc. 6). Without opposing that Motion, Plaintiff filed her Second Amended Complaint wherein she added additional defendants, Fidelity Investments and AT&T Mobility Services, LLC and additional claims for fraudulent Statements made to Government and State Agency and Theft by Deception. (Rec. Doc. 17). Defendants then filed their next Motion to Dismiss the Second Amended Complaint. (Rec. Doc. 23). Again, Plaintiff did not oppose this Motion but instead filed a Third Amended Complaint. (Rec. Doc. 22).

         Review of the Third Amended Complaint clarifies that Plaintiff began her employment with AT&T Mobility Services, LLC (previously Cingular Wireless) in July 2003. (Rec. Doc. 28, ¶28). During her employment, she participated in the Cingular Wireless 401(k) Savings Plan, which was transferred to the AT&T Retirement Savings Plan in December 2008. (Rec. Doc. 28, ¶28-29). Plaintiff alleged that the contribution amounts deposited into the Savings Plan were incorrect and that there were inconsistencies with the way incentives were coded on her payroll check. (Rec. Doc. 28, ¶30-31). When she attempted to address these issues with AT&T, she alleged that she encountered roadblocks from within the payroll department and management. (Rec. Doc. 28, ¶32). She further claims that incentive payouts were incorrectly coded on paychecks and improperly taxed, resulting in losses, which have not been refunded. (Rec. Doc. 28, ¶33-40). In addition, Plaintiff asserts that Kathy Vallot created a hostile work environment from mid-2016 through mid-2017, with the most recent encounter in 2018, by making sarcastic remarks, insulting, threatening, ostracizing, withholding or supplying incorrect work-related information, sabotaging projects, passive-aggressive behavior, providing contradictory instructions, making false statements, intimidating, defaming, and the like. (Rec. Doc. 28, ¶41-49). Plaintiff asserts the following Counts:

• Count I: Breach of Fiduciary Responsibility, arising out of her claims vis-à-vis the retirement savings plans and contributions. (Rec. Doc. 28, ¶50-57).
• Count II and Count III: Fraud and Tortious Interference, respectively, arising out the transfer of the Cingular Wireless 401(k) Savings Plan to the AT&T Savings Plan. (Rec. Doc. 28, ¶58-69).
• Count IV: Workplace Violation and Retaliation, arising out of her dealings with Kathy Vallot. (Rec. Doc. 28, ¶70-71).
• Count V: Defamation, arising out of her dealings with Kathy Vallot. (Rec. Doc. 28, ¶72-73).
• Count VI: Intentional Infliction of Emotional Distress (IIED), arising out of her dealings with Kathy Vallot. (Rec. Doc. 28, ¶74-5).
• Count VII: Negligent Infliction of Emotional Distress (NIED) arising out of her dealings with Kathy Vallot. (Rec. Doc. 28, ¶76-78).
• Count VIII: Negligent Retention, Training and Supervision, arising out of her dealings with Kathy Vallot. (Rec. Doc. 28, ¶79-80).
• Count VIII: Fair Labor Standards Act (FLSA) Violations, arising out of an alleged delay in AT&T's timekeeping system, resulting in time worked but not paid. (Rec. Doc. 28, ¶81-82).

         Defendants filed a Motion to Dismiss Plaintiff's Third Amended Complaint on July 10, 2019. (Rec. Doc. 30). The Court subsequently consolidated Defendants' first three pending Motions to Dismiss for hearing on September 12, 2019. Given the procedural history of this case and the fact that Defendants' two most recent Motions to Dismiss (Rec. Doc. 30 and 35) incorporate the arguments set forth in the two prior Motions to Dismiss, the Court recommends that Defendants' Motions to Dismiss Plaintiff's First and Second Amended Complaints (Rec. Doc. 6 and 23) be denied as moot. The Court will therefore address Defendants' most recent Motions to Dismiss Plaintiff's Third Amended Complaint. (Rec. Doc. 30 and 35). As Defendants point out, the latter Motion (Rec. Doc. 35) tracks the arguments made in the former (Rec. Doc. 30). (See Rec. Doc. 35-1).

         Applicable Law

         I. Law applicable to Rule 12(b)(6)

         When considering a motion to dismiss for failure to state a claim under F.R.C.P. Rule 12(b)(6), the district court must limit itself to the contents of the pleadings, including any attachments and exhibits thereto. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.2000); U.S. ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370, 375 (5th Cir.2004). The court must accept all well-pleaded facts as true and view them in the light most favorable to the plaintiff. In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir.2007) (internal quotations omitted) (quoting Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir.2004)); Baker v. Putnal, 75 F.3d 190, 196 (5thCir.1996). However, conclusory allegations and unwarranted deductions of fact are not accepted as true, Kaiser Aluminum & Chemical Sales v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982) (citing Associated Builders, Inc. v. Alabama Power Company, 505 F.2d 97, 100 (5th Cir. 1974)); Collins v. Morgan Stanley, 224 F.3d at 498. Courts “are not bound to accept as true a legal conclusion couched as a factual allegation.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

         To survive a Rule 12(b)(6) motion, the plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic, 127 U.S. at 570. The allegations must be sufficient “to raise a right to relief above the speculative level, ” and “the pleading must contain something more . . . than . . . a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.” Id. at 555 (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004)). “While a complaint . . . does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. (citations, quotation marks, and brackets omitted; emphasis added). See also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). If the plaintiff fails to allege facts sufficient to “nudge[ ][his] claims across the line from conceivable to plausible, [his] complaint must be dismissed.” Bell Atlantic v. Twombly, 127 U.S. at 570.

         A claim meets the test for facial plausibility “when the plaintiff pleads the factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678. “[D]etermining whether a complaint states a plausible claim for relief . . . [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. Therefore, “[t]he complaint (1) on its face (2) must contain enough factual matter (taken as true) (3) to raise a reasonable hope or expectation (4) that discovery will reveal relevant evidence of each element of a claim.” Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir.2009) (quoting Bell Atlantic v. Twombly, 127 U.S. at 556). See also In Re Southern Scrap, 541 F.3d 584, 587 (5th Cir.2008). With these precepts in mind, the Court considers the Plaintiff's Complaints, including the exhibits attached thereto.

         II. Whether Plaintiff has stated a claim for breach of fiduciary duty under ERISA.

         “Congress enacted ERISA to ‘protect ... the interests of participants in employee benefit plans and their beneficiaries' by setting out substantive regulatory requirements for employee benefit plans and to ‘provid [e] for appropriate remedies, sanctions, and ready access to the Federal courts.'” Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004), quoting 29 U.S.C. § 1001(b). Plaintiff has asserted breach of fiduciary duty claims pursuant to ERISA §502(A)(2) and (3), 29 U.S.C. §1132(a)(2) and ERISA §409, 29 U.S.C. §1109.

         A. Whether Plaintiff's allegations state a claim for breach of fiduciary duties or a disguised claim for benefits.

         Breach of fiduciary duty claims under ERISA must be distinguished from claims for benefits. “[A]lthough benefits claims require administrative exhaustion, fiduciary claims do not.Galvan v. SBC Pension Benefit Plan, 204 Fed.Appx. 335, 339 (5th Cir. 2006) (Emphasis in original.). “[T]he exhaustion requirement [also] applies to fiduciary claims that are [] disguised benefits claims, not to true breach-of-fiduciary-duty claims.” Id. citing Simmons v. Willcox, 911 F.2d 1077, 1081 (5th Cir.1990) (Emphasis in original.). The court in Haydel v. Dow Chem. Co., described the distinction between claims against fiduciaries and claims for benefits as follows:

Fiduciary claims amount to benefits claims when resolution of the claims rests upon an interpretation and application of an ERISA-regulated plan rather than on an interpretation and application of ERISA. Galvan v. SBC Pension Benefit Plan, 204 Fed.Appx. 335, 339 (5th Cir. 2006). A plaintiff that prevails on a fiduciary claim cannot recover benefits due only to that plaintiff; recovery on fiduciary claims must provide relief to the entire plan. Total Plan Servs., Inc. v. Tex. Retailers Ass'n, 932 F.2d 357, 358 (5th Cir. 1991); Plumb v. Fluid Pump Serv., Inc., 124 F.3d 849, 863 (7th Cir. 1997) (“Any recovery under [29 U.S.C. § 1132(a)(2) ] for breach of fiduciary duty must go to the plan as a whole rather than to individual beneficiaries.”).
Thus it is clear that a plaintiff cannot recover in her individual capacity as a plan participant under 29 U.S.C. § 1109, and its remedial provision, 29 U.S.C. § 1132(a)(2). Those sections provide relief only for a plan and not for individual participants. Therefore if a fiduciary breaches its duty, it owes the plan reimbursement, but it does not owe the individual participants any recovery. Mass. Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 140-44 (1985); see McDonald v. Provident Indem. Life Ins. Co., 60 F.3d 234, 237 (5th Cir. 1997). Accordingly, an individual has no private right of action for breach of fiduciary duty under ERISA. See Mass. Mutual Life Ins., 473 U.S. at 144; Weiner v. Klais & Co., Inc., 108 F.3d 86, 92 (6th Cir. 1997). The statutory provision explicitly authorizing a beneficiary to bring an action to enforce her rights under an ERISA plan is 29 U.S.C. § 1132(a)(1)(B). This section provides relief for a denial of benefits to an individual participant.

Haydel v. Dow Chem. Co., No. CV 07-71-JJB, 2007 WL 9706565, at *2-3 (M.D. La. July 19, 2007)

         See also Milofsky v. Am. Airlines, Inc., wherein the Fifth Circuit held that a claim by various plan participants seeking to recover losses to a benefits plan allegedly arising from the failure to effectuate the timely transfer of the plaintiffs' account balances from a prior plan to the new plan constituted a claim for breach of fiduciary duties, rather than a claim seeking distribution of benefits. Milofsky v. Am. Airlines, Inc., 442 F.3d 311, 313 (5th Cir.2006).

         Since the Middle District decided Haydel, the Supreme Court rendered LaRue v. DeWolff, Bobert & Associates, Inc., which held that “although § 502(a)(2) does not provide a remedy for individual injuries distinct from plan injuries, that provision does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant's individual account.” LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 256 (2008). The LaRue Court distinguished between defined benefit plans, consisting of plans offering a fixed benefit payment based on a percentage of the employee's salary (as adjudicated in its earlier opinion in Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985), upon which the Haydel court relied) and defined contribution plans, which are characterized by payouts based upon an individual's contributions and investment performance. Id. at 250; fn. 1; 254-55. Under a Russell and Haydel analysis, a plaintiff could not pursue a claim for breach of fiduciary duties for individual losses, but now, under LaRue, a plaintiff can assert claims for individual losses to defined contribution plans due to a fiduciary's breach. Ultimately, the LaRue Court held that the plaintiff could proceed with his individual fiduciary duty claims that the plan administrator failed to make requested changes to his individual investment account, resulting in a depleted interest in the plan. Id. at 256.

         Plaintiff's Complaint passes muster under either Russell/Haydel (upon which Defendants rely) or LaRue (upon which Plaintiff relies). In Haydel the court considered whether Plaintiff had stated a claim for breach of fiduciary duties which could proceed as a civil action under §502(a), 29 U.S.C. §1132(a), rather than a claim for benefits owed under the plan, in which case exhaustion of administrative remedies was required. In holding that the plaintiff had failed to state a claim for breach of fiduciary duties, the court reasoned as follows:

Although Plaintiff asserts that Defendants have breached their fiduciary duty, her fiduciary claim is in truth a denial of benefits claim under 29 U.S.C. § 1132(a)(1)(B). For example, Plaintiff claims that Defendants failed to pay amounts “owed to petitioner” pursuant to an ERISA plan. In paragraph six, Plaintiff claims that the benefits under the ERISA plan were “owed and despite the court's order, petitioner never received said sum....” In paragraph eight, Plaintiff avers that “[p]etitioner brings this civil action as an enforcement of her rights under 29 U.S.C. § 1132(a) as a beneficiary to recover for Defendants' breach of fiduciary duty....” Finally, in paragraph nine, Plaintiff alleges that “[p]etitioner was deprived of her right to earn interest on the full [amount of benefits] due” under the ERISA plan.
Plaintiff's allegations are telling. She is asserting an individual right to benefits under an ERISA plan. Recovery in this manner cannot be sought under a fiduciary duty claim. There is no averment that the plan as a whole was injured. As discussed supra, this is the essential allegation necessary to state a fiduciary duty claim.

Haydel, 07 WL 9706565 at *3.

         Haydel is distinguishable from the instant case. Rather than alleging that the plan administrators caused her individual losses, Plaintiff in this case specifically alleged, for instance, that Defendants failed to include supplemental compensation in calculating contribution amounts being remitted to the plans and that Defendants “have caused harm to the Plan and the Plan assets due to the losses it incurred.” (Rec. Doc. 28, ¶51; 54). Plaintiff's allegations are consistently couched in terms of the Plan(s) as a whole and the benefits of “participants” and “beneficiaries.” Plaintiff's prayer for relief requests that Defendants restore all losses to the Plans, among numerous other requests relative to the Plans in general. (Rec. Doc. 28, at 27-30). Plaintiff's claims are not focused on her individual losses resulting from the alleged breaches. Even had Plaintiff sought more individualized recovery, because she has alleged the Plans are defined contribution plans, [2] Plaintiff's claims would withstand Rule 12(b)(6) scrutiny under LaRue.

         Neither does this finding offend the Supreme Court's ruling in Varity Corp. v. Howe. In Varity, the Supreme Court held that the plaintiffs (plan participants and beneficiaries) could bring individual civil claims for equitable relief under §502(a)(3) for breach of fiduciary duties. Varity Corp. v. Howe, 516 U.S.C. 489, 515 (1996). The Court distinguished its ruling from its earlier holding in Russell, supra, which addressed an individual's right to bring a civil claim under §502(a)(2) for breach of fiduciary duties. Thus, to the extent Plaintiff asserts claims pursuant to §502(a)(3) in addition to her claims under §502(a)(2) (see e.g. Rec. Doc. 28, at ¶2; 16), the Court finds that she has stated a Varity claim in seeking equitable relief such ...


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