Carroll v. Los Alamos Nat'l Sec.

• Decision Date: 20 March 2010
• Docket Number: No. CIV 08-0959 JB/ACT.,CIV 08-0959 JB/ACT.
• Citation: 704 F.Supp.2d 1200
• Parties: David CARROLL, Plaintiff,v.LOS ALAMOS NATIONAL SECURITY, LLC and The Lans Benefit and Investment Committee, Defendant.
• Court: U.S. District Court — District of New Mexico

704 F.Supp.2d 1200

David CARROLL, Plaintiff,v.LOS ALAMOS NATIONAL SECURITY, LLC and The Lans Benefit and Investment Committee, Defendant.

No. CIV 08-0959 JB/ACT.

United States District Court,

D. New Mexico.

March 20, 2010.

Michael E. Mozes, Law Offices of Michael E. Mozes, P.C., Albuquerque, NM, for Plaintiff.

Scott D. Gordon, Julie P. Neerken, Rodey, Dickason, Sloan, Akin & Robb, P.A., Albuquerque, NM, for Defendant.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Defendant's Motion for Summary Judgment, filed December 14, 2009 (Doc. 55). The Court held a hearing on January 28, 2010. The primary issues are: (i) whether Plaintiff David Carroll's can bring a claim for civil penalties under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 through 1461, for the misconduct he alleges; (ii) whether Carroll's cause of action for negligent misrepresentation is ripe for adjudication; and (iii) whether Carroll has provided some evidence of reliance, causation, and harm related to misrepresentations by Defendant Los Alamos National Security, LLC (“LANS”) and the LANS Benefits and Investment Committee (“BIC”). Because ERISA does not provide the penalty Carroll seeks for the conduct he alleges and because the Defendants' conduct has not and will not harm Carroll, the Court will grant the motion.

FACTUAL BACKGROUND

Many of the material facts are undisputed. Carroll has worked at Los Alamos National Laboratory (“LANL”) from January 19, 1970, until December of 1974, and from November 1975 to the present. See Deposition of David Carroll at 15:19-16:7 (taken August 11, 2009), filed December 14, 2009 (Doc. 55-2)(“Carroll Depo.”); Affidavit of Louis Polito ¶ 4, at 2 (taken December 10, 2009), filed December 12, 2009 (Doc. 55-2). When LANL hired Carroll, he elected not to make Social Security and Medicare contributions. See Second Am. Compl. ¶ 18, at 4.

On June 1, 2006, LANS took over operation of LANL from the University of California. The Defendants contend that LANS gave Carroll the choice of participating in either Total Compensation Package 1 (“TCP1”) or Total Compensation Package 2 (“TCP2”). Second Am. Compl. ¶¶ 13 -16, at 3. Both TCP1 and TCP2 are benefit plans. See Response Exhibit 6, at §§ 2.48-2.49. LANS, through BIC was the plan administrator of both TCP1 and TCP2. See Plaintiff's Response to Defendant's Motion for Summary Judgment Exhibit 6, at § 2.36, filed January 5, 2010 (Doc. 57-8)(“Response”). Carroll disputes the timing of the choices, and disputes that he did not have a choice between TCP1 and TCP2 until June 1, 2006. Carroll's choice to participate in either TCP1 or TCP2 was made before June 1, 2006. See Election Form at 1 (dated May 2, 2006), Exhibit to Carroll Depo., filed December 14, 2009 (Doc. 55-2).

Under TCP1, Carroll would receive a defined-benefit pension and a 401(k) savings plan without employer-matching contributions. See Carroll Depo. at 84:6-15. Under TCP2, Carroll's 401(k) plan would include employer-match contributions of 11.5% of Carroll's annual salary. See id. at 84:16-85:24; Polito Aff. ¶ 7, 10, at 2, 3. Furthermore, because Carroll selected TCP2, Carroll began drawing his pension from the University of California Retirement Plan (“UCRP”) in July of 2006 while still earning his full salary from LANS, and the UCRP pays Carroll over $6,500.00 per month. See Carroll Depo. at 24:6-25:5; Polito Aff. ¶¶ 7-9, at 2-3. Under either plan, the participant would have Social Security/Medicare tax deducted from each paycheck. See Carroll Depo. at 82:10-84:1, Exhibit 17. Neither the summary plan descriptions nor the plan documents for TCP1 and TCP2 described the reimbursement policy with respect to Social Security/Medicare contributions. See Affidavit of David Carroll ¶ 6, at 2 (dated January 5, 2010), filed January 5, 2010 (Doc. 57-7)(“Carroll Aff.”). If LANS was to reimburse Carroll for his Social Security/Medicare contributions, that reimbursement would occur after Carroll retires. See Carroll Depo. Exhibit 17 (specifying that only retirees are eligible for Social Security/Medicare reimbursement).

In making his decision between TCP1 and TCP2, Carroll repeatedly communicated with LANS' transition team to discover whether employees would be reimbursed under TCP2 for Social Security/Medicare contributions. See Carroll Depo. at 47:4-53:22.¹ The Defendants assert that Carroll was leaning toward choosing TCP2 before receiving any information about whether TCP2 participants would receive Social Security/Medicare reimbursements. See Motion at 2; Carroll Depo. at 67:24-68:1. Carroll contests this characterization of his deposition statement, clarifying that Carroll was asked whether he was leaning toward TCP2 before receiving the final answer regarding reimbursements and that he merely responded “Yes.” Response at 1-2; Carroll Depo. at 67:24-68:1. The Defendants also assert as fact that Carroll cannot testify that he would have selected TCP1 over TCP2 even if he had known LANS would not reimburse TCP2 participants' Social Security/Medicare contributions. See Motion at 3; Carroll Depo. at 86:23-87:18. Carroll contests this fact, stating that he testified that he would not have chosen TCP2 if he had known that Social Security/Medicare contributions would not be reimbursed. See Response at 2; Carroll Depo. at 86:8-14. He argues that the inference to be gleaned from the series of hypothetical questions posed by the Defendants' counsel is that Carroll's decision whether to select TCP 1 or TCP2 turned on whether TCP2 participants would receive reimbursements.

Prior to making his election, Carroll was told that he would be reimbursed for his Social Security/Medicare contributions under TCP2. See Motion at 2; Second Amended Compl. ¶¶ 22, 24, at 4, 5. Carroll disputes the Defendants' characterization of this fact. He asserts that LANS' transition team communicated to employees, such as Carroll, that, as a TCP2 participant, his Social Security/Medicare contributions would be reimbursed. See Response at 2; Electronic-Mail String between Lori Greening and Ramiro Pereyra, filed January 5, 2010 (Doc. 57-5).

In April or May of 2006, Carroll received the reimbursement information related to Social Security/Medicare contributions. See Carroll Depo. at 56:7-22; Second Amended Compl. ¶ 24, at 5. Carroll elected TCP2 on May 2, 2006. See Carroll Depo. at 78:6-14. Thereafter, Carroll learned that only TCP1 participants, not TCP2 participants, would be eligible to receive reimbursement of their Social Security/Medicare contributions. See id. at 93:23-94:15; id. Exhibit 17. Before May 2, 2006, LANS communicated to some individuals, including Carroll, that TCP2 participants would be reimbursed for Social Security/Medicare contributions. See id. at 47:4-53:21.

Carroll did not ask LANS or the BIC for: (i) a summary plan description of the savings/retirement plans included in TCP1 or TCP2; (ii) the plan documents regarding the savings/retirement plans included in TCP1 or TCP2; (iii) the latest annual report for the savings/retirement plans included in TCP 1 or TCP2; or (iv) any instruments under which the savings/retirement plans in TCP1 or TCP2 were established or operated. See Carroll Depo. at 89:13-91:11. ² On the other hand, Carroll contacted the “transition hotline” approximately fifty times before making his plan election to try to confirm whether TCP2 participants would be reimbursed for Social Security/Medicare contributions. See Carroll Depo. at 49:14-19 (Doc. 57-3). In June and July of 2006, Carroll requested in writing information regarding how TCP2 participants would be reimbursed for Social Security/Medicare contributions. See id. at 45:4-48:17. Also in June and July of 2006, Carroll sent an electronic-mail transmission requesting a reimbursement policy that described the accounting and procedures related to reimbursement. See Response Exhibit 7.

LANS knew that TCP2 participants would not be reimbursed for their Social Security/Medicare contributions as early as July of 2006. See Response Exhibit 8 (electronic-mail string including an electronic mail transmission from Ben Glover, stating: “This section implies that Social Security Tax Reimbursement is available only for TCP1 participants.”). Thus, by August 2006, Glover knew that TCP2 participants would not be reimbursed for Social Security/Medicare contributions. See id. Nevertheless, Glover did not inform Carroll of this information until January of 2007. See Response Exhibit 9.

Carroll currently receives about $98,000.00 per year from LANS, plus benefits, in addition to his pension of over $6,500.00 per month from UCRP. See Carroll Depo. at 12:14-14:3, 24:6-25:5. Carroll's pension from UCRP will continue to pay until he dies and then pay at fifty percent for the remainder of the life of Carroll's wife. See id. at 26:8-17. Carroll had contributed to Social Security for thirteen quarters before his employment by the University of California see Exhibit B, Interrogatory No. 2, filed December 12, 2009 (Doc. 55-2), and has contributed for an additional fourteen quarters since becoming a LANS employee on June 1, 2006 see Carroll Depo. at 83:5-8. Carroll was aware that he must contribute to Social Security for forty quarters to be eligible for Social Security benefits, which would require him to work until March of 2013. See Carroll Depo. at 43:13-44:13.

Nevertheless, Carroll stated in deposition that he has no retirement plans, no set retirement date, and that any estimate he could give regarding his retirement would be guesswork. See Carroll Depo. at 37:1-38:3. Carroll responds with an affidavit, stating that, because of a change in his financial circumstances, he now anticipates retiring by December 31, 2011. See Carroll Aff. ¶¶ 2-5, at 1. He further alleges that he told the Defendants this same information orally in November of 2009, though he cites no evidence to that effect. S...