Bafford v. Northrop Grumman Corp.

• Decision Date: 04 April 2022
• Docket Number: 2:18-cv-10219-ODW (Ex)
• Parties: STEPHEN H. BAFFORD, et al., Plaintiffs, v. NORTHROP GRUMMAN CORPORATION, et al., Defendants.
• Court: U.S. District Court — Central District of California

STEPHEN H. BAFFORD, et al., Plaintiffs,
v.
NORTHROP GRUMMAN CORPORATION, et al., Defendants.

No. 2:18-cv-10219-ODW (Ex)

United States District Court, C.D. California

April 4, 2022

ORDER DECLINING SUPPLEMENTAL JURISDICTION AND DISMISSING WITHOUT PREJUDICE CLAIMS AGAINST ALIGHT; ORDER DENYING AS MOOT ALIGHT'S MOTION TO DISMISS [85]

OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

Plaintiffs Stephen H. Bafford, Laura Bafford, and Evelyn L. Wilson bring a putative class action against Defendants Northrop Grumman Corporation; Administrative Committee of the Northrop Grumman Pension Plan; and Alight Solutions LLC for damages arising from miscalculation of Plaintiffs' retirement benefits. The operative Third Amended Complaint, filed February 22, 2022, sets forth a claim against the Administrative Committee for violations of the Employee Retirement Income Security Act (“ERISA”) and state-law claims for negligence and negligent misrepresentation against Alight. (Third Am. Compl. (“TAC”), ECF No. 101.)

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The Court ordered the parties to show cause regarding supplemental jurisdiction, and then regarding diversity jurisdiction, over the claims against Alight. (Order, ECF No. 100; Order to Show Further Cause, ECF No. 109.) The Court has reviewed Plaintiffs' and Alight's responses to these two Orders. (Suppl. Jurisdiction Mem., ECF No. 102; Notice Non-Opp'n, ECF No. 103; Diversity Resp., ECF No. 110.)

As discussed below, the Court lacks subject matter jurisdiction over the claims against Alight and accordingly dismisses those claims without prejudice. As a result, Alight's currently pending Motion to Dismiss, (ECF No. 85), is moot.

II. FACTUAL AND PROCEDURAL BACKGROUND

The Court recited the facts of this case in detail in its February 1, 2022 Order dismissing the claims against the Administrative Committee. The Court incorporates those facts herein by reference. (Order 2-4.) In brief, Plaintiffs are participants in retirement plans sponsored by Northrop Grumman, their employer. An error on the part of Alight, a servicer the Administrative Committee hired to assist with plan administration, caused the estimates in Plaintiffs' pension benefit statements in the years leading up to their retirement to be significantly overstated. Both Mr. Bafford and Ms. Wilson in fact received improperly inflated payments for several months of their retirement before the Administrative Committee discovered the error and contacted them about it.

On December 7, 2018, Plaintiffs sued Defendants in federal court. Plaintiffs asserted the Court has federal question jurisdiction over the ERISA claims and supplemental jurisdiction over the remaining claims, or, in the alternative, diversity jurisdiction over the entire matter. (Compl. ¶ 1, ECF No. 1.)

In the Second Amended Complaint, Bafford had alleged that both the Administrative Committee and Alight were liable for the estimation error under various theories. (See Second Am. Compl., ECF No. 83.) The Administrative Committee

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moved to dismiss.^[1] (Admin. Comm. Mot., ECF No. 84.) The takeaway from the Court's Order granting the Administrative Committee's motion was that, to whatever extent the Administrative Committee was responsible for the above-described error, the Administrative Committee nevertheless could not be held liable for damages arising from the errors in the benefit estimates and payments. The Court's disposition was as follows:

Plaintiffs' ERISA claim is DISMISSED WITH PREJUDICE AND WITHOUT LEAVE TO AMEND to the extent Plaintiffs seek relief for inaccuracies in their pension benefit statements. The ERISA claim is otherwise DISMISSED WITH LEAVE TO AMEND to assert (1) a claim for failure to provide an automatic triennial statement or an automatic annual notice of how to obtain a statement, as required by 29 U.S.C. §§ 1025(a)(1)(B)(i) and 1025(a)(3)(A); and/or (2) a claim for failure to provide any benefit statement at all in response to Plaintiffs' written requests, as required by § 1025(a)(1)(B)(ii)

(Order 15.) Plaintiffs availed themselves of the first prong of this leave to amend, and in the now-operative Third Amended Complaint, they assert a single claim against the Administrative Committee under 29 U.S.C. §§ 1025(a)(1)(B)(i) and 1025(a)(3)(A). (See TAC ¶ 115 (“The Administrative Committee did not furnish Mr. Bafford with a pension benefit statement every three years or an annual notice of the availability of a pension benefit statement and how to obtain one.”).

In the TAC, Plaintiffs maintain their two claims for negligence and negligent misrepresentation against Alight alone. The gravamen of these claims is that Alight either committed negligence or made a negligent misrepresentation in miscalculating Plaintiffs' pension benefits in estimates before retirement and payments during retirement. (See TAC ¶ 91 (alleging, for negligence, that Alight “breached its professional duties by providing grossly inaccurate information to Plaintiffs and Class

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members regarding the amount of their benefits under the Northrop Plan on numerous occasions over at least a six-year period”); id. ¶ 97 (alleging, for negligent misrepresentation, that Alight “intended that Plaintiffs and the Class members act in reliance on its statements of their pension benefit for purposes of financial planning, including because there is no purpose for a pension benefit statement other than to assess the value of the pension benefits”).)

No single claim is asserted against both Defendants.

III. LEGAL STANDARD

Federal courts have subject matter jurisdiction only as authorized by the Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; see also Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Federal district courts have original jurisdiction where an action arises under federal law, or where each plaintiff's citizenship is diverse from each defendant's citizenship (the “complete diversity” requirement) and the amount in controversy exceeds $75, 000. 28 U.S.C. §§ 1331, 1332(a).

A complaint filed in federal court must contain only “a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014); cf. Bey v. Geiser, No. EDCV 19-844 JGB (SHKx), 2019 WL 4422678, at *2 (C.D. Cal. July 24, 2019) (same, as to complete diversity of citizenship). But where a party contests, or the court questions, another party's allegations concerning the diversity requirements, both sides submit proof, and the court decides whether the party claiming jurisdiction has proven complete diversity or the amount in controversy by a preponderance of the...