United States District Court, E.D. California
MEMORANDUM DECISION AND ORDER GRANTING
DEFENDANTS' MOTION TO DISMISS PLAINTIFF MAY FILE AN
AMENDED COMPLAINT WITHIN 14 DAYS (Doc. 7)
LAWRENCE J. O'NEILL UNITED STATES CHIEF DISTRICT JUDGE
the Court is Defendant American Transfer Company and American
Transfer Company Pension Plan's (collectively,
"Defendants" or "ATC") motion to dismiss
Plaintiff's complaint. (Doc. 7.) The complaint seeks
benefits pursuant to the Employee Retirement Security Act of
1974 ("ERISA") under a "de facto" pension
plan established by his former employer, ATC, in 2005.
Defendants contend Plaintiff has failed to allege the
existence of an ERISA plan that meets the necessary
prerequisites for a claim for benefits under 29 U.S.C. §
1132(a)(1)(B). The matter was found suitable for a decision
without oral argument, and the hearing on Defendants'
motion was vacated. For the reasons set forth below,
Defendants' motion to dismiss is granted; Plaintiff's
complaint is dismissed without prejudice and with 14-days
leave to amend.
complaint alleges that Plaintiff was employed by ATC from
1968 through 2004 where he worked full-time as a non-union
internal accountant and bookkeeper. On several occasions
during the 1980s, attempts or discussions were had about
trying to have the office employees become unionized.
Plaintiff had conversations with the owner and President of
ATC, Glenn Prickett, about whether ATC employees would become
unionized. Mr. Prickett proposed that, if Plaintiff would
continue to work at ATC and refrained from unionizing office
workers, ATC would "take care of providing a retirement
plan" for Plaintiff that would equal Plaintiff's
salary at the time of retirement, plus the amount paid
towards his health benefits.
refrained from unionizing activities and maintained his
employment with ATC until the end of 2004 when he retired. At
the time of his retirement, he was receiving a salary of $45,
000 per year and group medical benefits of 258.76 per month.
From January 2005 through 2010, ATC paid $45, 000 per year
plus $3, 105.12 for his medical benefits. As to the $45, 000
annual amount, ATC paid in bi-monthly installments through
its payroll system as though Plaintiff were still employed,
deducting federal taxes, social security, medical, state
taxes, and state disability from these payments. Starting in
January 2011, the $45, 000 yearly retirement amount was,
without any notice or explanation, reduced to $24, 000 per
year and paid at the amount of $2, 000 per month, although
payment of the medical benefit amount continued as before.
Upon inquiry, Plaintiff was not provided any information
about the reduction or any process how to appeal or purse a
claim for the unilateral reduction of his benefits.
January 2012, the retirement benefits were further reduced to
$12, 000 per year, paid monthly through ATC's payroll
system subject to all the payroll deductions, which continued
through 2015. The amount paid for medical benefits remained
unchanged. On December 29, 2015, Plaintiff received a
hand-written note from ATC indicating ATC would be closing
and his last check would be paid in June 2016. Upon inquiring
with John Moffatt, ATC's CPA, Plaintiff was told that the
lifetime payments promised to Plaintiff were for the life of
ATC, not for Plaintiff's life.
claims the representations made to him during his employment
that he would receive a retirement benefit if he refrained
from attempting to unionize office employees, in conjunction
with the last 11 years of payments since his retirement,
constitute a pension plan under ERISA. Plaintiff maintains
ATC improperly reduced the amount of his retirement benefits
in 2011 and 2012, and then improperly discontinued payments
filed a motion to dismiss arguing Plaintiff has failed to
adequately allege the existence of a de facto pension plan
under ERISA. According to Defendants, Plaintiff's
allegations of the details of a "plan" are vague
and conclusory. Moreover, an ERISA plan requires an
"administrative program, " which must involve an
ongoing, particularized, administrative discretionary
analysis. Defendants maintain Plaintiff's allegations do
not establish an administrative program, and no viable ERISA
plan is alleged.
LEGAL STANDARD - MOTION TO DISMISS
motion to dismiss pursuant to Rule 12(b)(6) is a challenge to
the sufficiency of the allegations set forth in the
complaint. Dismissal under Rule 12(b)(6) is proper where
there is either a "lack of a cognizable legal
theory" or "the absence of sufficient facts alleged
under a cognizable legal theory." Balisteri v.
Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir.
1990). In considering a motion to dismiss for failure to
state a claim, the court generally accepts as true the
allegations in the complaint, construes the pleading in the
light most favorable to the party opposing the motion, and
resolves all doubts in the pleader's favor. Lazy Y.
Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
survive a 12(b)(6) motion to dismiss, the plaintiff must
allege "enough facts to state a claim to relief that is
plausible on its face." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). "A claim has
facial plausibility when the Plaintiff pleads 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. 662, 678 (2009).
"The plausibility standard is not akin to a
'probability requirement, ' but it asks for more than
a sheer possibility that a defendant has acted
unlawfully." Id. (quoting Twombly, 550
U.S. at 556). "While a complaint attacked by a Rule
12(b)(6) motion to dismiss 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.”
Twombly, 550 U.S. at 555 (internal citations
omitted). Thus, "bare assertions . . . amount[ing] to
nothing more than a 'formulaic recitation of the
elements'. . . are not entitled to be assumed true."
Iqbal, 556 U.S. at 681. "[T]o be entitled to
the presumption of truth, allegations in a complaint . . .
must contain sufficient allegations of underlying facts to
give fair notice and to enable the opposing party to defend
itself effectively." Starr v. Baca, 652 F.3d
1202, 1216 (9th Cir. 2011). In practice, "a
complaint...must contain either direct or inferential
allegations respecting all the material elements necessary to
sustain recovery under some viable legal theory."
Twombly, 550 U.S. at 562. To the extent that the
pleadings can be cured by the allegation of additional facts,
a plaintiff should be afforded leave to amend. Cook,
Perkiss and Liehe, Inc. v. N. Cal. Collection Serv.,
Inc., 911 F.2d 242, 247 (9th Cir. 1990) (citations
parties dispute whether Plaintiff has adequately alleged a
"plan" that implicates ERISA. The existence of an
ERISA plan requires (1) a plan, fund, or program; (2)
established or maintained; (3) by an employer; (4) for the
purpose of providing benefits; (5) to its employees. See