This case is before the court pursuant to defendant’s motion to dismiss for failure to state a claim upon which relief can be granted filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. When a Rule 12(b)(6) motion is filed, the court tests the sufficiency of the allegations in the complaint. The “complaint must contain sufficient factual matter, accepted as true, to ’state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)).
Put another way, granting the motion to dismiss is appropriate if plaintiff has not “nudged [her] claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570. The Third Circuit interprets Twombly to require the plaintiff to describe “enough facts to raise a reasonable expectation that discovery will reveal evidence of” each necessary element of the claims alleged in the complaint. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556). Moreover, the plaintiff must allege facts that “justify moving the case beyond the pleadings to the next stage of litigation.” Id. at 234-35.
Manning v. Sanofi-Aventis, U.S. Inc., 2012 U.S. Dist. LEXIS 114129 (M.D. Pa. Aug. 14, 2012)
The important semantics of stating a “plausible” claim with sufficient particularity came before the district court in this case. The requirements of ERISA Section 510 and 502(a)(1)(B) set the bar for the ERISA claimant.
The Plaintiff claimed benefits under the Defendant’s Employee Retirement Income Security Act (”ERISA”) Separation Plan. The Plaintiff had been terminated for disputed reasons and her position filled by an employee with less experience and at a lower salary. (The Court’s ample citations to authority are omitted but are indicated by quotations below.)
ERISA Section 510 Prohibition
Section 510 prohibits the “discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary . . . for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.” 29 U.S.C. § 1140.
Proof of a Section 510 violation is not easy. To state a claim under § 510, plaintiff must show that her employer had “’specific intent” to violate ERISA.
Denial of ERISA benefits “alone is not probative of intent.” Of course, it is possible that the plaintiff could show direct evidence of intent. In most cases, however, the question will require an examination of circumstantial evidence.
The Court notes that “[w]here no direct evidence of intent to violate ERISA exists, the Third Circuit implements a burden-shifting analysis to determine if specific intent exists.
Elements of A Prima Facie Section 510 Case
At the motion to dismiss stage, plaintiff has the initial burden to plead a prima facie case. To do so, plaintiff must show:
(1) prohibited employer conduct;
(2) taken for the purpose of interfering;
(3) with the attainment of any right to which the employee may become entitled.
The Shifting Burdens Of Assertions & Explanations
Plaintiff may allege circumstantial evidence that, taken as true, provides “evidence of the employer’s specific intent to interfere with the ERISA plan.”
If plaintiff presents a prima facie violation of § 510, the burden shifts to the employer to “articulate a legitimate, nondiscriminatory reason for its actions”
If defendant can do this, the burden shifts back to plaintiff, who must present evidence that the employer’s reason for terminating plaintiff is pretextual or “unworthy of credence.”
A Plausible Case
On the alleged facts, the Court concludes that the plaintiff established a plausible case under Section 510.
Plaintiff alleged that defendant terminated her under the false pretense of “misconduct” in order to interfere with her right to the Plan’s benefits. These allegations “are sufficient to show a plausible claim and to thus unlock the doors of discovery.”
Effect of Discretionary Clause
As noted above, the Plaintiff also asserted a claim for benefits. Under Section 502(a)(1)(B), a participant in an ERISA plan may bring a civil action “to recover benefits due to [her] under the terms of [her] plan, to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future benefits under the terms of the plan.”
To state a claim under § 502(a)(1)(B), plaintiff must allege that:
(1) she was eligible for benefits under the Plan,
(2) that defendant wrongfully denied her benefits and
(3) that in doing so, defendant violated § 502(a)(1)(B).
The Defendant contended that the plaintiff could not state a viable Section 502 claim because the court must defer to the final and binding decision of the Plan Administrator, who had determined that she did not qualify for the Plan’s benefits.
On the contrary, the Court held that that it owed no deference to a plan administrator at the motion to dismiss stage, regardless of the level of deference provided as the litigation progresses. The Court distinguished cases cited by the Defendant as involving motions for summary judgment, motions for entry of judgment or bench trials rather than a motion to dismiss.
Note: The Defendant also argued that the Plaintiff’s Section 510 claim must be dismissed as duplicative of her claim for benefits because she seeks the same damages in both counts. The Court concluded that it “would be premature to dismiss one of the counts at this point without allowing the parties to proceed through discovery.”