Fox v. General Motors Corp., Civ. A. No. 2:94-0060.

• Decision Date: 20 September 1994
• Docket Number: Civ. A. No. 2:94-0060.
• Citation: 863 F. Supp. 302
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Robert J. FOX, Plaintiff, v. GENERAL MOTORS CORPORATION, Defendant.

863 F. Supp. 302

Robert J. FOX, Plaintiff, v. GENERAL MOTORS CORPORATION, Defendant.

Civ. A. No. 2:94-0060.

United States District Court, S.D. West Virginia, Charleston Division.

September 20, 1994.

Richard A. Robb, Charleston, WV, for plaintiff.

Susan R. Snowden, Martin & Seibert, Martinsburg, WV, for defendant.

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending is the Defendant's motion for summary judgment pursuant to Rule 56, Federal Rules of Civil Procedure. For reasons that follow, Defendant's motion for summary judgment is DENIED.

I.

A principal purpose of summary judgment is to isolate and dispose of meritless litigation. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The standard used to determine whether a motion for summary judgment should be granted or denied was stated recently by our Court of Appeals:

A moving party is entitled to summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.Pro. 56(c). See Charbonnages de France v. Smith, 597 F.2d 406 (4th Cir.1979).

A genuine issue exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). In considering a motion for summary judgment, the court is required to view the facts and draw reasonable inferences in a light most favorable to the nonmoving party. Id. at 255, 106 S.Ct. at 2514. The plaintiff is entitled to have the credibility of all his evidence presumed. Miller v. Leathers, 913 F.2d 1085, 1087 (4th Cir.1990), cert. denied, 498 U.S. 1109, 111 S.Ct. 1018, 112 L.Ed.2d 1100 (1991). The party seeking summary judgment has the initial burden to show absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). The opposing party must demonstrate that a triable issue of fact exists; he may not rest upon mere allegations or denials. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. A mere scintilla of evidence supporting the case is insufficient. Id.

Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir. 1994), petition for cert. filed, 63 USLW 3064 (June 30, 1994). Accord Riffe v. Magushi, 859 F.Supp. 220, 227 (S.D.W.Va.1994); Cornell v. General Electric Plastics, 853 F.Supp. 221, 225-26 (S.D.W.Va.1994); Thomas v. Shoney's, Inc., 845 F.Supp. 388, 389-90 (S.D.W.Va.1994) (Haden, C.J.).

II.

The material facts are undisputed. Plaintiff commenced this action in the Circuit Court of Kanawha County on December 13, 1993, alleging the Defendant violated the West Virginia Wage Payment and Collection Act. W.Va.Code § 21-5-1 et seq. Specifically, the Plaintiff alleged a violation of W.Va. Code § 21-5-3 (1979)¹ by deducting from the Plaintiff's wages overpayments of benefits previously paid to Plaintiff while he was on sick leave.

The Plaintiff was paid Social Security disability benefits concurrently with sick leave benefits payable under the Defendant's benefit plan. The Defendant eventually became aware of the dual payments and ceased payment from its welfare plan. Subsequent to the Plaintiff's return to work, the Defendant began deducting a portion of the Plaintiff's wages in order to recover the benefit overpayment made by the Defendant's employee benefit plan. The Plaintiff has not consented to the assignment of his wages and contends the deductions are prohibited by W.Va.Code § 21-5-3 without his permission.

The Defendant removed the case to this Court contending the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., preempted W.Va.Code § 21-5-3, and this Court had original jurisdiction over this case. Plaintiff moved to remand asserting his claim is one for a "wage assignment" and, as such, is not preempted by ERISA because it does not involve an "employee benefit plan." In a memorandum opinion of March 14, 1994, this Court concluded the case had been removed properly and that it has original jurisdiction. 1994 WL 409495 (1994).

The Defendant then moved to dismiss arguing the Plaintiff's cause of action under W.Va.Code § 21-5-3 is void through preemption under ERISA. 29 U.S.C. § 1144. The Plaintiff responded contending that W.Va. Code § 21-5-3 is not preempted by ERISA and that the West Virginia statute expressly prohibits the Defendant's wage withholding. Both parties filed supplemental memoranda thereafter.

III.

This case presents the Court with the unique question of whether ERISA preempts the West Virginia Wage Payment and Collection Act when an employee's wage is reduced by his employer to recover past overpayments made to him by an ERISA-governed employee welfare plan.² Whether West Virginia's procedure for wage assignment is preempted by ERISA is a question of federal law. See Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 830, 108 S.Ct. 2182, 2186, 100 L.Ed.2d 836 (1988) (whether Georgia garnishment procedure is preempted by ERISA is a question of federal law).

ERISA's preemption provision, 29 U.S.C. § 1144, is very broad in scope. Section 1144 provides "the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title." Id. (emphasis added). "Congress used the words `relate to' in § 514(a) § 1144(a) in their broad sense." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 98, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983). "A law `relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan." Id. at 96-97, 103 S.Ct. at 2899-2900 (footnote omitted).

Through the breadth of the statute's language "ERISA makes clear that even indirect state action bearing on private pensions may encroach upon the area of exclusive federal concern." Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 525, 101 S.Ct. 1895, 1907, 68 L.Ed.2d 402 (1981). However, the Supreme Court has noted also that "some state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law `relates to' the plan." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 100, n. 21, 103 S.Ct. 2890, 2901, n. 21, 77 L.Ed.2d 490 (1983).³ Additionally, "if a State creates no prospect of conflict with a federal statute, there is no warrant for disabling it from attempting to address uniquely local social and economic problems." Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 19, 107 S.Ct. 2211, 2221, 96 L.Ed.2d 1 (1987) (footnote omitted).

Our Circuit Court of Appeals has employed several factors to determine whether a generally applicable state statute or common law "relates to" an ERISA-governed employee benefit plan. In Holland v. Burlington Industries, Inc., 772 F.2d 1140 (4th Cir.1985), aff'd sub nom., Brooks v. Burlington Industries, Inc., 477 U.S. 901, 106 S.Ct. 3267, 91 L.Ed.2d 559 (1986), cert. denied sub. nom, Slack v. Burlington Industries, Inc., 477 U.S. 903, 106 S.Ct. 3271, 91 L.Ed.2d 562 (1986), the Fourth Circuit held that ERISA preempted the North Carolina Wage and Hour Act as it applied to severance pay. In examining whether the North Carolina statute "relates to" ERISA benefit plans, the Court found that the state law claims potentially could impose "conflicting employer obligations and variable standards of recovery. As in Gilbert Gilbert v. Burlington Industries, Inc., 765 F.2d 320 (2nd Cir.1985), aff'd, 477 U.S. 901, 106 S.Ct. 3267, 91 L.Ed.2d 558 (1986), `the state law claims ... would determine whether any benefits are paid, and directly affect the administration of benefits under the plan.' 765 F.2d at 327." Holland, 772 F.2d at 1147 (footnote omitted).

The Fourth Circuit applied the Holland factors again in Pizlo v. Bethlehem Steel Corp., 884 F.2d 116 (4th Cir.1989). In Pizlo, the Court determined that state law claims for breach of contract of employment, promissory estoppel, and negligent misrepresentation were not preempted by ERISA. The Court stated "the claims here would not submit Bethlehem to `conflicting employer obligations and variable standards of recovery', `determine whether any benefits are paid' nor `directly affect the administration of benefits under the plan.'" Id. at 120 (quoting Holland v. Burlington Industries, Inc., 772 F.2d 1140, 1147 (4th Cir.1985).⁴

The West Virginia Wage Payment and Collection Act as applied in this case to an employee's wage does not "relate to" an employee welfare benefit plan. The statutory requirement that the Plaintiff agree to any assignment of his wages by the Defendant does not expose the Defendant to "conflicting employer obligations and variable standards of recovery" throughout the nation. Application of the statute to the Plaintiff's wage does not "determine whether any benefits are paid" or "directly affect the administration of benefits."⁵ The statute determines how the Defendant, as an employer, can pay and withhold from the Plaintiff's wage. Such regulation does not interfere with the governance of or benefit levels within the Defendant's employee welfare plan. Instead, the payment of wages is an area that the States have traditionally regulated. Massachusetts v. Morash, 490 U.S. 107, 119, 109 S.Ct. 1668, 1675, 104 L.Ed.2d 98 (1989).⁶

In support of its argument that application of W.Va.Code § 21-5-3 relates to the benefit plan, the Defendant relied on this Court's decision in Southern v. Emery Worldwide, 788 F.Supp. 894 (S.D.W.Va.1992) (Haden, C.J.), wherein a plaintiff's claim under the West Virginia Wage Payment and Collection Act to recover severance pay...