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Zupa v. General Electric Co.

United States District Court, D. Connecticut

July 22, 2016

ANTHONY M. ZUPA, Plaintiff,


          CHARLES S. HAIGHT, JR. Senior United States District Judge.

         Plaintiff Anthony Zupa brings this action, principally under § 502(a)(1)(B) of the Employee Retirement Income Security Act ("ERISA"), against his former employer, Defendant General Electric Company ("GE"). Through this action, Plaintiff seeks to receive benefits under GE's Supplemental Pension Plan ("SPP") to which he alleges he is entitled. Pending before the Court is Defendant's motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, as well cross-motions pertaining to discovery. This Ruling resolves those motions.

         I. Background

         Plaintiff commenced employment with Defendant on April 14, 1997. Amended Complaint ("AC") ¶ 3. In 2007, he was promoted to a position in the "executive band, " which potentially made him eligible for Defendant's SPP. AC ¶¶ 3-4. The SPP is a "supplemental" plan because it provides pension benefits to company executives in addition to those offered to what Plaintiff refers to as "regular employees."[1] AC ¶ 4. Plaintiff alleges that, in the event of the elimination of a particular employment position, executive plan employees are entitled to benefits under the SPP if the following three conditions are met: (i) the employee "had a minimum of five (5) years of pension quality years"; (ii) the employee served "three (3) years as an executive in a role that is being eliminated"; and (iii) "the executive was within fifteen (15) years of retirement age (60)." AC ¶ 4.

         In 2014, Plaintiff's position was eliminated by GE for reasons unrelated to Plaintiff's job performance. AC ¶¶ 6-8. At that point, Plaintiff "had accrued seventeen (17) years of pension quality years with the Defendant; seven (7) years as an executive in the role that was being eliminated; and was within fifteen (15) years of retirement at age 60." AC ¶ 9. Plaintiff thereby alleges that as of his termination, he was entitled to benefits under the SPP. AC ¶ 10. However, Plaintiff was allegedly "advised that the Defendant was not providing the Plaintiff with the supplemental pension." AC ¶ 11. In response, Plaintiff "filed an appeal of the denial to provide a supplemental pension with the Defendant's Pension Center, case number CNF 509636 and case number CNF 5096720, " which Defendant "failed or refused to process." AC ¶¶ 12-13. Plaintiff also alleges that Defendant refused to provide Plaintiff with information regarding the pension plan and benefits package, despite Plaintiff's requests therefor. AC ¶ 14.

         On January 13, 2016, in light of the above allegations, Plaintiff brought a one-count complaint against Defendant in Connecticut Superior Court. Doc.1-2. Defendant removed the action to this Court on February 9, 2016, on the basis of federal question jurisdiction pursuant to 28 U.S.C. § 1331. Doc. 1. Defendant argued that the federal question arises from its argument that Plaintiff's claim is barred pursuant to ERISA. Doc. 1 ¶¶ 8-19. On March 14, 2016, Plaintiff filed the Amended Complaint, the operative pleading in this case, proffering two cause of action: (i) violation of ERISA; and (ii) breach of contract. On March 31, 2016, Defendant moved to dismiss the Amended Complaint under Fed.R.Civ.P. 12(b)(6). On June 14, 2016, after the motion to dismiss was fully briefed, Plaintiff filed a motion to compel discovery. In response, Defendant filed a cross-motion for a protective order against any discovery. On July 8, 2016, the Court heard oral argument on the pending motions and reserved judgment thereon.

         II. Motion to Dismiss

         A. Count One (ERISA)

         Defendant moved to dismiss Count I of the Amended Complaint on two grounds: (i) failure to exhaust administrative remedies; and (ii) Plaintiff is not entitled to benefits under the SPP. For reasons to be made clear, the Court begins with the exhaustion argument.

         The Second Circuit has "consistently recognized 'the firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases.'" Diamond v. Local 807 Labor Mgmt. Pens. Fund, 595 F.App'x 22, 24 (2d Cir. 2014) (quoting Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594 (2d Cir. 1993)). In Kennedy, the Second Circuit explained the rationale for the exhaustion requirement:

The primary purposes of the exhaustion requirement are to: (1) uphold Congress' desire that ERISA trustees be responsible for their actions, not the federal courts; (2) provide a sufficiently clear record of administrative action if litigation should ensue; and (3) assure that any judicial review of fiduciary action (or inaction) is made under the arbitrary and capricious standard, not de novo.

989 F.2d at 594.

         Plaintiff does not dispute Defendant's assertion that he did not exhaust the administrative procedure called for by the SPP. Rather, Plaintiff argues instead that he is excepted from ERISA's exhaustion requirement. During the course of his briefing, Plaintiff has ultimately suggested two separate exceptions that obviated his need to exhaust his administrative remedies. First, he argues that exhaustion was made futile pursuant to Defendant's failure to process his alleged "appeals." Second, he argues that he should be "deemed to have exhausted his administrative remedies" pursuant to 29 C.F.R. § 2560.503-1(l). The Court considers these arguments in turn.

         1.Futility Exception

         In Kennedy, the Second Circuit explained that an ERISA claimant may be excused from exhaustion where the administrative process would be "futile." However, that futility exception is not applied lightly. "[F]utility . . . excuse[s] an ERISA plaintiff's failure to exhaust only '[w]here claimants make a clear and positive showing that pursuing available administrative remedies would be futile.'" Davenport v. Harry N. Abrams, Inc., 249 F.3d 130, 133 (2d Cir. 2001) (quoting Kennedy, 989 F.2d at 594); see also MacLennan v. Providen Life & Accident Ins. Co., 676 F.Supp.2d 57, 66 (D. Conn. Dec. 15, 2009) (a "'plaintiff invoking this [futility] doctrine has a heavy burden'" (quoting Cole v. Travelers Ins. Co., 208 F.Supp.2d 248, 262 (D. Conn. 2002)). Davenport held that such a "clear and positive showing" requires an "unambiguous application for ...

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