Constantine v. American Airlines Pension Ben. Plan

• Decision Date: 05 July 2001
• Docket Number: No. 4:01-CV-108-E.,4:01-CV-108-E.
• Citation: 162 F.Supp.2d 552
• Parties: Barbara CONSTANTINE, v. AMERICAN AIRLINES PENSION BENEFIT PLAN, et al.
• Court: U.S. District Court — Northern District of Texas

Page 552

162 F.Supp.2d 552

Barbara CONSTANTINE, v. AMERICAN AIRLINES PENSION BENEFIT PLAN, et al.

No. 4:01-CV-108-E.

United States District Court, N.D. Texas, Fort Worth Division.

July 5, 2001.

Joan M. Durkin, Attorney at Law, Law Office of J M Durkin & Associates, Hurst, TX, for plaintiff.

Suzanne H. Stenson, Attorney at Law, Fort Worth, TX, for defendants.

MEMORANDUM OPINION AND ORDER

MAHON, District Judge.

Now before the Court is a "Motion to Dismiss" pursuant to Fed.R.Civ.P. 12(b)(6) filed by Defendants American Airlines Pension Benefit Plan ("the Plan"), American Airlines, Inc. ("American Airlines") and AMR Corporation ("AMR") (collectively referred to herein as "Defendants"). Evidencing a somewhat careless attitude, Plaintiff's counsel did not file an opposition response to Defendants' Motion to Dismiss until 24 days after it was due, in violation of Local Rule 7.1(e). In addition, after filing the tardy opposition response, Plaintiff's counsel submitted a "Motion to Correct Response to Defendants' Motion to Dismiss," which although granted by the Court, violated Local Rules 7.1(b) & (c). Thereafter, Defendants filed reply briefing to the Plaintiff's opposition response. This matter is finally ripe for the Court's consideration. After considering the record in this matter, along with the applicable law, the Court determines that the Motion to Dismiss should be GRANTED in part and DENIED in part for the reasons set forth below.

I. BACKGROUND¹

Plaintiff was employed as a ticket agent for Defendant American Airlines from June 15, 1974 through February 2, 1999. See Pl.'s Compl. at ¶ 8. Plaintiff alleges that in December 1998, she was accused of wrongdoing, which resulted in her placement on administrative leave for an unspecified amount of time. Id. at ¶¶ 12 & 14. After completing an investigation regarding Plaintiff's alleged wrongdoing, American Airlines terminated Plaintiff on February 2, 1999. See id.

Plaintiff alleges that from September 11, 1974 through February 2, 1999, she was credited by the Plan with "continuous service," and at her termination, her individual Plan account was seven months short of vesting for 25 years of service. See Pl.'s Compl. at ¶ 13. The Plan provides that upon 25 years of company service, employees become fully vested entitling them to a pension, health insurance benefits, and lifetime flight benefits. Id. at ¶ 11. Plaintiff asserts that she was wrongfully terminated, "for the sole reason of depriving [Plaintiff] the future [Plan] benefits that were to fully vest to [Plaintiff] and would have amounted to a substantial value." Id. at 13. Plaintiff, alleging causes of action under the Employment Retirement Income Security Act of 1974, 29 U.S.C. §§ 101 et seq. ("ERISA") and Texas common-law, brings this lawsuit against Defendants, seeking to recover the value of the lifetime benefits she would have received had she fully vested under the Plan. Defendants argue that Plaintiff has failed to state a claim upon which relief may be granted, and that this lawsuit should be dismissed.

II. ANALYSIS

A. Dismissal Standards Under Federal Rule 12(b)(6)

In evaluating a motion to dismiss under Rule 12(b)(6), this Court must construe a plaintiff's complaint in the light most favorable to a plaintiff and take the factual allegations contained in the complaint as true. Mitchell v. McBryde, 944 F.2d 229, 230 (5th Cir.1991); Mann v. Adams Realty Co., Inc., 556 F.2d 288 (5th Cir.1977). A motion to dismiss should only be granted when a plaintiff could not prove any set of facts, under any reasonable reading of the complaint, which would entitle them to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); see also Hitt v. City of Pasadena, 561 F.2d 606, 607 (5th Cir.1977). "In order to avoid dismissal for failure to state a claim, a plaintiff must plead specific facts, not mere allegations." Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir.1989).

While a complaint need not outline all the elements of a claim, the complaint must be comprehensible and specific enough to draw the inference that the elements exist. Walker v. South Cent. Bell Telephone Co., 904 F.2d 275, 277 (5th Cir.1990); Ledesma v. Dillard Dept. Stores, Inc., 818 F.Supp. 983, 984 (N.D.Tex.1993) (Belew, J.). "Conclusory allegations and unwarranted deductions of fact are not admitted as true by a motion to dismiss." Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir.1992). Moreover, the Court is under no obligation to "conjure up unplead allegations or construe elaborately arcane scripts to save a complaint." Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir.1995).

B. Travel Benefits are not Recoverable Under ERISA

Plaintiff alleges that as an American Airlines employee with 25 years of company seniority, she is entitled to "lifetime flight benefits" or travel benefits under the Plan. See Pl.'s Comp. at ¶¶ 9, 11. Plaintiff prays that "Defendants be ordered to provide [her with the] lifetime flight benefits" she would have received had she fully vested under the Plan. See Pl.'s Comp. at p. 6. However, as Defendant correctly asserts, travel benefits are not recoverable in an ERISA cause of action.

It is well-settled that ERISA does not regulate all employee benefits, but rather, only employee benefit plans. Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 11-12, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987). ERISA recognizes two types of benefit plans: "employee welfare benefit plans" and "employee pension benefit plans." 29 U.S.C. 1002(3). ERISA itself does not define "plan," and courts have looked to the purposes and policies of the statutory scheme in order to determine whether an employee benefit, or group of benefits, constitutes a benefit plan under ERISA. See Massachusetts v. Morash, 490 U.S. 107, 115, 109 S.Ct. 1668, 104 L.Ed.2d 98 (1989). The Administrator of Pension and Welfare Benefits Programs for the United States Department of Labor ("DOL") and several federal district courts have held that travel benefits are not considered pension benefit plans or welfare benefit plans under ERISA.

In 1981, the DOL issued an ERISA opinion letter dealing with the issue of whether an Eastern Airlines travel benefit program, offering space-available flight passes and reduced-rate travel benefits to employees, was an ERISA benefit. See DOL Opinion Letter 81-39A, 1981 ERISA LEXIS 48 (1981). The DOL concluded that because reduced travel rates are not one of the benefits enumerated in § 3(1) of ERISA, they were not part of an employee welfare benefit plan. Id. at *3. The DOL also found that because travel benefits do not provide retirement or deferral income to employees, they cannot be considered a pension benefit plan under § 3(2) of ERISA. Id. at *4. Accordingly, the DOL held that reduced-rate travel benefits were not part of an employee benefit plan as defined by ERISA.

On March 26, 1999, the DOL revisited the issue of whether travel benefits are part of an employee benefit plan under ERISA when it issued an information letter addressing whether ERISA applied to the free or reduced cost travel passes offered to eligible former employees of Continental Air Micronesia, Inc. See DOL March 26, 1999 Information Letter, 1999 ERISA LEXIS 11 (1999) ("DOL Information Letter"). The DOL Information Letter recognized that

individuals who leave airline employment may consider their former employer's free or reduced cost travel passes to constitute a valuable benefit that allows them to travel without having to use wages or other income to purchase an airline ticket. However, in the [DOL's] view, an airline's free or reduced cost travel passes for its employees that are non-transferable and cannot be exchanged for cash do not provide former employee with the temporary source of income replacement covered by Title I as "severance" or "unemployment" benefits.

The [DOL's] conclusion concerning the non-covered status of an airline's free or reduced cost travel passes for former employees would remain unaffected even if an airline provides them through a plan that is otherwise covered by ERISA.

Id. at 8-9.

Several federal courts have also recognized that travel benefits are not covered under ERISA. For instance, in Eaton v. Delta Airlines, 1988 U.S. Dist. LEXIS 15986 (D.Wash.1988), a Washington federal court considered whether an ERISA claim could be maintained by former Western Airlines employees, who were given reduced rate travel passes by Western, but whose travel passes were modified when the company was taken over by Delta Airlines. In response to the employees' argument that Delta's modification violated ERISA, the Court granted summary judgment in Delta's favor, holding "travel benefits do not qualify as retirement income or as a deferral of income." Id. at * 7-8 (emphasis added).

Likewise, in Preuc v. Continental Micronesia, Inc., 1997 WL 538933 (D.Guam 1997), a Guam federal court held that free travel benefits offered as part of an airline's retirement plan was not part of a "welfare benefit plan" for the purposes of ERISA. Id. at *4-5. The Guam court based its decision on the fact that the employer provided the free travel benefits out of its own general assets, and did not create a separate fund to finance the benefits. Id. at *3. The Guam court found that the elimination of benefits paid out of an employer's general assets presented only a danger of defeated expectations, and ERISA is not concerned with such a danger. Id. at *4.

Finally, in Prince v. American Airlines, 1999 WL 796178 (S.D.N.Y.1999), a New York federal court dismissed a claim for reinstatement of travel privileges by a former American Airlines flight attendant. Id. at *6. Relying on the DOL advisory letters and cases set forth above, the New York Court found that

airline sponsored reduced-rate travel privileges are not covered under Title I of ERISA. Accordingly, [the plaintiff's] claim regarding her Travel Card as an ERISA...