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Cruzeta v. Sony Electronics, Inc.

United States District Court, S.D. California

August 7, 2014

RAFAEL CRUZETA, an individual, Plaintiff,
v.
SONY ELECTRONICS, INC., a Delaware Corporation, and DOES 1 through 50, inclusive Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS WITHOUT LEAVE TO AMEND AS TO THE FEDERAL CLAIMS [doc #29.]

M. JAMES LORENZ, District Judge.

Pending before the Court is Defendant's motion to dismiss Plaintiff's Second Amended Complaint ("SAC") for failure to state a claim and for lack of subject matter jurisdiction. The motion is fully briefed and is decided on the papers submitted and without oral argument in accordance with Civil Local Rule 7.1(d.1). For the following reasons, the Court GRANTS Defendant's motion.

I. BACKGROUND

Plaintiff Rafael Cruzeta ("Cruzeta") is a "resident of the State of California, County of San Diego." (SAC ¶ 5.) Cruzeta was employed by the Defendant, Sony Electronics, Inc. ("Sony") for 30 years. ( Id. ) Sony is a "corporation duly organized and existing under and by virtue of the laws of the State of California with its principal place of business in San Diego, CA." ( Id. ¶ 6.) It is also the trustee of a retirement plan that provides Cruzeta and his fellow employees with various benefits. ( Id. ¶ 7.)

Cruzeta alleges that his "inclusion as a qualified participant within Sony's Standard Retirement Plan" ("SRP") was motivated by his continued employment at Sony. (SAC ¶ 13.) Further, Plaintiff alleges the SRP contains a severance provision that grants fired employees two-weeks pay for every year of employment. ( Id. ¶ 15.) Therefore, Plaintiff contends he is entitled to 60 weeks of severance pay, a total of at least $50, 000. ( Id. ¶ 40.) In addition, Sony contributed approximately $10, 000 a year into Cruzeta's pension fund which he should receive. ( Id. ¶ 17.) Finally, "in accordance with a standard formula, " Sony provided matching funds totaling $2, 800 per year into Cruzeta's 401K retirement plan. ( Id. ¶¶ 37, 38.) Plaintiff alleges these benefits were set to increase after Cruzeta had been employed with Sony for 30 years, and he was fired on November 9, 2010, "one single day short of his thirtieth anniversary with the company, thus depriving him of additional retirement and pension benefits." ( Id. at ¶ 42) However, the termination of employment letter expressly states November 10, 2010 was Cruzeta's last day of employment. (SAC, Ex. A.)

According to Cruzeta, Sony "trumped up a termination at the earliest practical opportunity in violation of ERISA [Employee Retirement Income Security Act] restrictions and solely as a measure to save costs." (SAC ¶ 46.) Sony further undertook a "covert investigation'" to determine the nature of his friendly encounters with female employees at Sony. ( Id. ¶ 25.) The findings of this investigation led Defendant to conclude Cruzeta had engaged in an act of sexual harassment.[1] ( Id. ¶ 26.) Cruzeta alleges that he "never committed actions which constitute sexual harassment and he certainly had no reason to believe that women were making allegations of sexual harassment against him." (SAC ¶ 34.) The investigation permitted Sony to terminate Cruzeta's employment and vested pension rights. ( Id. ¶ 29.)

The Senior Manager of Human Resources at Sony requested Cruzeta appear for an exit interview as well as for the "standard termination procedures." ( Id. ¶ 52.) Cruzeta inquired about the benefits due via the Standard Retirement Plan and was told that senior management would advise the Senior Manager of Human Resources of the benefits. ( Id. ) Cruzeta was then directed to pack up his belongings and was escorted off the premises of Sony. ( Id. ¶ 53.) He was advised that he was not welcome on company premises and would be denied entry if he returned. ( Id. ¶ 54.) As a result of his termination, Cruzeta alleges he was not "paid severance nor was he able to gain access to any of the listed benefits" outlined above. ( Id. ¶ 55.)

In response to his termination, Cruzeta sent a letter to the President of Sony, Phil Molyneaux ("Molyneaux"). ( Id. ¶ 32.) Plaintiff requested that Defendant give him the early retirement package that he had been offered in June 2009. ( Id., Ex. B.) Donna Kaplan ("Kaplan"), on behalf of Molyneaux, sent a response to Cruzeta's letter. ( Id., Ex. C.) Kaplan restated that, "[b]ased upon [his] prior record and continued violations of our anti-harassment policies, a decision was made to terminate your employment." ( Id. )

Cruzeta alleges that he filed a formal complaint on November 9, 2010, "to seek remedy with the administrative complaints department within Defendants' business." (SAC ¶ 51.) Throughout November and December of 2010, Cruzeta contacted Molyneaux "by telephone as he had been accustomed in the past." (SAC ¶ 57.) Cruzeta alleges that none of these calls were returned. ( Id. ) Cruzeta then flew to Las Vegas, Nevada on January 7, 2011, for a one-on-one meeting with Molyneaux. ( Id. ¶ 59.) He allegedly delivered "a listing of his grievances" to Molyneaux and "sought continuing opportunities of serving Sony." ( Id. ) Cruzeta then placed a call to Kaplan, the person to whom Molyneaux had directed him, in order to obtain severance pay and retirement benefits. ( Id. ¶ 60.) The call was not returned; instead, Plaintiff received a letter from Kaplan ( Id., Ex. C) informing him of "the finality of the termination decision." ( Id. ¶ 60.)

Cruzeta alleges that he was told to contact Sony's toll free Human Resources hotline if he wished to secure his benefits. (SAC ¶ 61.) He "called the number in February 2011, provided his social security number to the representative, and then proceeded to request his severance and benefits." ( Id. ) The only response Plaintiff allegedly received was that the decision would be left to Sony's senior management. ( Id. ) After selecting Eric Welch ("Welch") as his legal counsel in February of 2011, Cruzeta alleges that a representative from the same hotline informed him that Sony would no longer communicate with him "as he was a represented party'". ( Id. ¶ 62.) Throughout the Spring of 2011, Plaintiff's counsel proceeded to contact in-house counsel at Sony. ( Id. ¶ 64.) Cruzeta alleges that Welch "attempted to compel administrative remedy through multiple levels of telephonic and written correspondence, " but does not indicate what those attempts consisted of. ( Id. )

In the Fall of 2011, Sony's Vice President and Associate General Counsel allegedly advised Welch that "there was no merit in Plaintiff's claims for the severance and benefits, that his claims were refused by the Company." ( Id. ¶ 64.) Welch continued to reach out to Sony but his efforts to secure Cruzeta's severance and retirement benefits have been unsuccessful. ( Id. ¶ 65.)

On January 4, 2014, Cruzeta filed the SAC, asserting multiple causes of action. First, by "wrongfully terminating Plaintiff one single day short of 30 years, " Cruzeta alleges Sony violated his rights under § 502 of ERISA. (SAC ¶¶ 72, 79.) He alleges that it did so in order to avoid "paying him his full and earned retirement and pension entitlements." ( Id. ¶ 75.) Next, Plaintiff alleges that Defendant violated 29 U.S.C. § 1140 by interfering "with plaintiffs' employment relationship and legitimate expectation of continued employment for the express purpose of depriving plaintiff of most, if not all of the substantial protected fringe benefits, severance pay and other incidents." ( Id. ¶ 84.) Further, he alleges that Sony breached its Standard Retirement Plan and, as a result, he is entitled to severance pay totaling sixty weeks' worth of his standard salary. ( Id. ¶¶ 94, 100.) Plaintiff also alleges that because he "reasonably relied to his detriment for approximately 30 years on the terms and conditions set forth in [Sony's] policy regarding retirement, severance, pension and other incidents of the Standard Retirement Plan[, he] incurred substantial damages." ( Id. ¶ 110.) Finally, Cruzeta asserts that as a result of Sony's "negligence, carelessness, recklessness, and/or unlawfulness, [he] was injured in his business activities, and has sustained continuing financial damages" totaling no less than $1, 000, 000. ( Id. ¶¶ 115, 117.)

On January 24, 2014, Sony moved to dismiss the SAC for failure to state a claim and for lack of subject matter jurisdiction. (MTD at 13-14.) In arguing that the first four causes of action fail to state a claim upon which relief can be granted, Sony contends that the ERISA-based causes of action do not sufficiently allege a plausible causal connection between receipt of benefits under the Standard Retirement Plan and plaintiff's termination of employment. ( Id. at 5.) In addition, it asserts that Cruzeta's first four causes of actions must "be dismissed due to Plaintiff's failure to exhaust his administrative remedies." ( Id. at 13.) Finally, Sony argues that the Plaintiff's state law cause of action for negligence must be dismissed on the ground that the Court lacks subject matter jurisdiction over the claim. ( Id. at 14.) Cruzeta opposes the motion asserting that he "still maintains viable causes of action" and "has adequately alleged his pursuit of administrative relief." (Opp'n. at 5.) Further, he argues that the Court is the "only venue available for [him] to pursue his claims" due to ERISA preemption. ( Id. )

II. LEGAL STANDARDS

A. Motion to Dismiss for Failure to ...


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