Balt. Cnty. v. Buck Consultants, LLC
| Decision Date | 29 March 2016 |
| Docket Number | Civil Action No. RDB-15-0089 |
| Parties | BALTIMORE COUNTY, MARYLAND, Plaintiff, v. BUCK CONSULTANTS, LLC, Defendant. |
| Court | U.S. District Court — District of Maryland |
Plaintiff Baltimore County, Maryland ("Plaintiff" or "the County") has brought this action against Defendant Buck Consultants, LLC ("Defendant" or "Buck") seeking 1) a Declaratory Judgment, pursuant to 28 U.S.C. § 2201, that Defendant "has a contractual duty to defend, indemnify and hold harmless the Plaintiff in a separate civil action also pending in this Court1 and 2) "an Order requiring the Defendant to defend, indemnify and hold harmless the Plaintiff in the underlying litigation." First Am. Compl. at ¶ 1, 31, ECF No. 15. Currently pending before this Court is Defendant's Motion to Dismiss (ECF No. 19). The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons set forth herein, Defendant's Motion to Dismiss (ECF No.19) is GRANTED IN PART and DENIED IN PART. Specifically, it is GRANTED with respect to Plaintiff's request for a Declaratory Judgment and Order requiring Buck to "indemnify and hold harmless the Plaintiff." As explained infra, the Age Discrimination in Employment Act preempts a claim for indemnification. Accordingly, that claim is DISMISSED. However, Defendant's Motion to Dismiss is DENIED with respect to Plaintiff's request for a Declaratory Judgment and Order requiring Buck to "defend . . . the Plaintiff" during the damages phase of the EEOC lawsuit, in accordance with their contractual agreement.2 That claim survives Defendant's Motion to Dismiss.
In ruling on a motion to dismiss, this Court must accept the factual allegations in the plaintiff's complaint as true and construe those facts in the light most favorable to the plaintiff. See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011). The relevant facts of this case, construed in Plaintiff's favor, are as follows.
Since the creation of Baltimore County's ("Plaintiff" or "the County") Employees' Retirement System ("ERS") in 1945, Buck Consultants, LLC ("Defendant" or "Buck") has served as its principal actuarial consulting firm. First Am. Compl. at ¶ 6, ECF No. 15. On July 1, 1999, the County entered into a contract for actuarial services for the ERS with Buck's predecessor, Buck Consultants, Inc. Id. at 13. That contract provided the following:
The Contractor shall indemnify and hold harmless the County, its employees, agents and officials from any and all claims, suits, or demands includingattorney fees which may be made against the County, its employees, agents or officials resulting from any act or omission committed in the performance of the duties imposed by and performed under the terms of this Agreement by the Contractor or anyone under agreement with the Contractor to perform duties under this Agreement. The Contractor shall not be responsible for acts of gross negligence or willful misconduct committed by the County. Id.
On June 19, 2006, the County and Buck entered into an additional contract for actuarial services primarily for the ERS. Id. at 14. That contract provided the following:
The Contractor shall defend, indemnify and hold harmless the County, its employees, agents and officials from any and all liabilities, claims, suits, or demands including attorney fees which may be incurred or made against the County, its employees, agents or officials resulting from any act or omission committed in the performance of the duties imposed by and performed under the terms of this Agreement by the Contractor or anyone under agreement with the Contractor to perform duties under this Agreement. The Contractor shall not be responsible for acts of gross negligence or willful misconduct committed by the County . . . Contractor shall provide defense for County, its employees, agents and in accordance with this Article 14 and in doing so Contractor shall allow County to participate in said defense of County, its employees, agents and officials, to the extent and as may be required by the County and the Contractor shall cooperate with County in all aspects in connection therewith. Id.
In the 1999 contract, Buck's services were defined to include "interpretations of the benefit provisions of the Retirement Code, advice as to the implication of federal legislation, and advice on legal implementations of proposed legislation. . . ." Id. at 16. Additionally, the bid request underlying the 2006 contract, which was incorporated into that contract, stated that Buck would "provide actuarial consultation and advisory services on any technical, policy, legal or administrative problems arising during the course of operations" and "keep [the County] advised on developments in federal legislation and regulations regarding financing, benefits, vesting, fiduciary responsibility, disclosure, etc." Id. at 18.
Over the past seventy years that Buck has been an actuarial consultant for the County, Buck has "provided advice as to the legality of various aspects of the ERS." Id. at 19. "[W]hen the County agreed to provide the 20 year early retirement option to correctional officers this change in the ERS was specifically reviewed and approved by Buck as in conformance with all applicable laws." Id.
In 1999 and 2000, two correctional officers employed by the County filed charges of age discrimination against the County. Id. at 6. The United States Equal Employment Opportunity Commission ("EEOC") began an investigation and, on March 6, 2006, determined that the County "had committed age discrimination." Id. at 6-7. Subsequently, the EEOC commenced an action captioned EEOC v. Baltimore County, et al., L-07-25003, alleging that the County required older individuals "to pay higher contributions than those paid by younger individuals to [the County's] pension plan, in violation of Sections 4(a)(1) and 4(i)(1) of the [ADEA], 29 U.S.C. § 623(a)(1), (i)(1)." Am. Compl. at ¶ 14, ECF No. 57.
In the early stages of this litigation, the County claims that it asked Buck to review the ERS a second time and to explain to the EEOC why it was in compliance with the ADEA. First Am. Compl. at ¶ 20, ECF No. 15. Via letter dated August 16, 2000, Buck provided "actuarial and legal advice, maintaining its position that these provisions of the ERS were lawful." Id. In that letter, Buck communicated its "understanding that a bona-fide employee benefit plan does not discriminate against older employees, even if older employees must pay more for their benefit, so long as older employees do not have to bear a greater percentageof the cost of the benefit than a younger employee." Id. at Ex. C.4 The County alleges it reasonably relied on Buck's "advice" in retaining the early retirement option of the ERS and maintaining that the ERS was in compliance with the ADEA throughout the EEOC litigation. Id. at ¶ 21.
Via Order dated January 21, 2009, Judge Legg of this Court granted summary judgment for the County in the EEOC action. See Order, ECF No. 101. However, the United States Court of Appeals for the Fourth Circuit subsequently vacated Judge Legg's Order and remanded the case to this Court to determine whether, as a matter of law, the County's ERS contribution rates relied on age or were "justified by permissible financial considerations." See USCA Judgment, p. 7-8, ECF No. 109. On remand, Judge Legg found that age was the "but for" cause of disparate treatment under the ERS, ruled that "the ERS violate[d] the ADEA," and granted summary judgment in favor of the EEOC on the issue of liability. See Mem. Op., p. 9, ECF No. 196. The United States Court of Appeals for the Fourth Circuit has since affirmed that decision and remanded the case to this Court for consideration of damages. USCA Judgment, p. 2, ECF No. 210.
The County now alleges that "Buck breached its duty to provide competent actuarial and legal advice by failing to use due care when first reviewing and approving the earlyretirement revisions to the ERS, and then by affirmatively advising the County at the beginning of and throughout the pending litigation that these ERS revisions were in compliance with the ADEA." First Am. Compl. at 23, ECF No. 15. As a direct and proximate result of these breaches, the County claims it "has been found to be liable and is now subject to civil damages." Id. at 24.
Shortly after the underlying suit was initiated by the EEOC, the County claims that "Buck's counsel took the position that Buck was not obligated to defend, indemnify or hold the County harmless in the pending litigation." Id. at 27. However, Buck subsequently proposed that Buck and the County "work collaboratively with the goal of having the County prevail in the lawsuit." Id. at 28. Buck and the County worked collaboratively until this Court granted summary judgment in favor of the EEOC on the issue of liability. Id. at 29. The County claims it has once again called on Buck to defend, indemnify and hold harmless the County in collection with the damages phase, but that Buck has refused. Id. at 30. Therefore, the County now requests, inter alia, that this Court "stay the underlying litigation until the Court has made its declaration in this case," "render a declaratory judgment in Plaintiff's favor, [pursuant to 28 U.S.C. § 2201,] declaring that [Buck] is obligated to defend, indemnify and hold harmless the [County] in the underlying litigation," and "enter an Order requiring [Buck] to defend, indemnify and hold harmless the [County] in the underlying litigation." Id. at 31.
Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R. Civ. P. 8(a)(2). Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes the dismissal of a complaint if it fails to state a claim upon which relief can be granted. The purpose of Rule 12(...
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