489 F.3d 293 (6th Cir. 2007), 05-2404, Thomas v. Miller

Docket Nº:05-2404.
Citation:489 F.3d 293
Party Name:Silvia J. THOMAS, Plaintiff-Appellant, v. Chancey MILLER and Elmwood Cemetery, Defendants-Appellees.
Case Date:June 27, 2007
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 293

489 F.3d 293 (6th Cir. 2007)

Silvia J. THOMAS, Plaintiff-Appellant,

v.

Chancey MILLER and Elmwood Cemetery, Defendants-Appellees.

No. 05-2404.

United States Court of Appeals, Sixth Circuit.

June 27, 2007

Submitted: January 24, 2007

Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 05-70473-Julian A. Cook, Jr., District Judge.

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ON BRIEF:

Benjamin Whitfield, Jr., Benjamin Whitfield, Jr. & Associates, Detroit, Michigan, for Appellant.

James F. Hermon, Dykema Gossett, Detroit, Michigan, for Appellees.

Before: BOGGS, Chief Judge; and MERRITT and MOORE, Circuit Judges.

OPINION

BOGGS, Chief Judge.

Silvia Thomas sued Elmwood Cemetery and Chancey Miller, her former employer and supervisor, respectively, for health benefits under the Consolidated Omnibus Reconciliation Act ("COBRA"). Both parties agreed that Elmwood falls below the statute's application threshold of twenty or more employees, which is codified at 29 U.S.C. § 1161(b). Thomas argued, however, that the doctrine of equitable estoppel should bar the defendants from claiming that they fall below the statutory threshold. The district court granted summary judgment to Elmwood and Miller, holding as a matter of law that estoppel could not be applied to excuse the failure to meet the numerical threshold.

This case presents two questions in the context of an action under COBRA. First, can the doctrine of equitable estoppel bar an employer, who employs fewer than the

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statute's threshold of twenty employees, from defending an action on that basis? Second, if equitable estoppel can so apply, can Thomas satisfy the doctrine's requirements in this case?

As we explain more fully below, the Supreme Court's decision last term in Arbaugh v. Y & H Corp., 546 U.S. 500, 516, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006), which held that such an application threshold is an element of a claim rather than a jurisdictional bar, renders this an open question in our circuit. There is no principled reason we can see, in Arbaugh's wake, to set such a threshold apart from other elements of claims, which parties generally may concede, be ordered by a court to admit (as in a discovery sanction), or be equitably estopped from contesting. Thus, we hold that equitable estoppel may, in appropriate cases, bar an employer from arguing that it does not satisfy a statute's numerical application threshold. Nevertheless, Thomas cannot satisfy the estoppel doctrine's requirements in this case. Her claim cannot withstand summary judgment. We affirm the judgment of the district court.1

I

Thomas was employed by Elmwood Cemetery from 1993 through January 16, 2004. The parties agree that Elmwood consistently employed fewer than twenty people during that period. Thomas had health insurance coverage provided by Elmwood while she was employed there, although she was not formally notified of that coverage's termination until two months after Elmwood fired her. That notification took place during a phone call in the first week of March 2004. During that call, her provider informed her that "Elmwood Cemetery had notified them, in a letter signed by Mr. Miller, to cancel [her] health insurance coverage, retroactive to January 16, 2004, the date of [her] termination."

During Thomas's employment, Elmwood offered COBRA benefits to another employee, John Winn.2 Thomas became aware of Elmwood's provision of those benefits to Winn from "conversations overheard within the very small office in which [she] formerly worked." Those conversations involved Winn's failure to pay his COBRA premiums on time, which resulted in "trouble" between Miller and Elmwood's board of directors.

Since her termination, Thomas has suffered a series of strokes, which she believes were caused by her inability to obtain medical care after her termination. Thomas also developed serious cardiac and respiratory problems. Due to those maladies,

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Thomas incurred substantial medical expenses, portions of which remain outstanding or were paid using borrowed funds.

Thomas filed suit in February 2005 against Elmwood and Miller. She alleged that they had a duty under 29 U.S.C. § 1162(a)(2), a provision of COBRA, to notify her "of her right to continue in force without interruption the health insurance that she had been provided as a perquisite of her employment." Thomas alleged that the defendants failed to meet that duty. As a consequence, she requested relief in the form of continued health coverage during the litigation, notification of her rights under COBRA, $100 per day as a penalty for failure to comply with the statute, and other appropriate remedies. She also sought attorney's fees and costs.

The defendants moved for summary judgment without filing an answer. They argued that COBRA did not apply to Elmwood because, at all times relevant to the litigation, Elmwood employed fewer than twenty people..3 COBRA applies only to employers with twenty or more employees. See 29 U.S.C. § 1161(b) ("Subsection (a) shall not apply to any group health plan for any calendar year if all employers maintaining such plan normally employed fewer than [twenty] employees on a typical business day during the preceding calendar year.").

Thomas conceded that Elmwood did not employ twenty or more people. Nevertheless, she claimed that the defendants offered continuing COBRA benefits to a white male employee and denied those benefits to her, a black female. She further claimed that Elmwood knowingly engaged in racist and sexist practices. She thus argued:

Plaintiff is entitled to the application of an equitable estoppel as to Defendants who, by their wholly voluntary conduct in (a) providing as [sic] BC/BS health insurance, a perquisite to all of its employees, which included COBRA coverage upon separation and (b) actually providing COBRA coverage to one John Winn, (apparently because he was a white male) after he left Elmwood, created a condition suitable for the application of the doctrine to bar them from raising § 1162(b) as a defense.

Defendants should be equitably estopped from asserting any rights or defenses which might otherwise be available to them under the so-called small business exemption set forth at 29 USC § 1161(b) against Plaintiff herein, who, in good faith relied upon the promises or offers of COBRA set forth in the manual, 4 and further relied upon COBRA

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being available to her, should she ever leave Elmwood's employ, because she knew that Winn got COBRA when he left.

The district court sought authority from Thomas supporting her contention that equitable estoppel should apply in this case, but she provided little other than generic cases discussing the doctrine itself. At the time, our precedent precluded the use of estoppel in the fashion sought by Thomas because we had deemed statutory thresholds, such as COBRA's, to be issues of subject matter jurisdiction. See, e.g., Douglas v. E.G. Baldwin & Assocs., Inc., 150 F.3d 604, 607 (6th Cir. 1998). Thus, the district court granted the defendants' motion for summary judgment because Thomas had not shown that COBRA applied to Elmwood.5 Thomas timely appealed and we have jurisdiction pursuant to 28 U.S.C. § 1291.

II

We review a district court's grant of summary judgment de novo. Trustees of the Mich. Laborers' Health Care Fund v. Gibbons, 209 F.3d 587, 590 (6th Cir. 2000). The decision below may be affirmed only if the pleadings, affidavits, and other submissions show "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). We must draw all reasonable inferences in the light most favorable to the non-movant. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

III

The first question for our decision is whether the doctrine of equitable estoppel can, in appropriate cases, bar an employer, concededly not meeting COBRA's numerical application threshold, from defending an action under that statute on that basis. We hold, in the wake of the Supreme Court's decision in Arbaugh, 546 U.S. at 515-16, 126 S.Ct. 1235, that it can.

COBRA is an amendment to the Employment Retirement Income Security Act ("ERISA"). See McDowell, 125 F.3d at 961. We already have held that the doctrine of equitable estoppel can apply in ERISA cases when welfare benefits plans, rather than pension plans, are at issue. See Armistead v. Vernitron Corp., 944 F.2d 1287, 1298-1300 (6th Cir. 1991). In Armistead, we wrote that ERISA authorizes the courts "to fashion a body of federal common law to enforce the agreement[s] that these statutes bring within their jurisdiction." Ibid. That body of federal common law includes equitable estoppel. Ibid.

Despite our application of estoppel in ERISA and other cases, we previously have refused to apply the doctrine when the issue was whether that party satisfied a statute's numerical threshold. See, e.g., Douglas, 150 F.3d at 607. Our precedent makes clear, however, that the basis for our earlier decisions was a view that...

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