Grywczynski v. Shasta Beverages, Inc.

• Decision Date: 23 October 1984
• Docket Number: No. C-83-5717 SAW.,C-83-5717 SAW.
• Citation: 606 F. Supp. 61
• Parties: Chester G. GRYWCZYNSKI and Frederick J. Ralston, Plaintiffs, v. SHASTA BEVERAGES, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of California

606 F. Supp. 61

Chester G. GRYWCZYNSKI and Frederick J. Ralston, Plaintiffs, v. SHASTA BEVERAGES, INC., et al., Defendants.

No. C-83-5717 SAW.

United States District Court, N.D. California.

October 23, 1984.

COPYRIGHT MATERIAL OMITTED

Steven C. Wolan, King, Johnson & Shapiro, Oakland, Cal., for plaintiffs.

Robert J. Smith, Morgan, Lewis & Bockius, Washington, D.C., Michael L. Wolfram, Morgan, Lewis & Bockius, Los Angeles, Cal., for defendants.

MEMORANDUM AND ORDER RE MOTIONS FOR SUMMARY JUDGMENT

WEIGEL, Senior District Judge.

BACKGROUND

Plaintiffs Chester G. Grywzcynski and Frederick J. Ralston brought this action against their former employer, Shasta Beverages, Inc. ("Shasta"), its parent corporation, Consolidated Foods Corporation ("Consolidated"), and the Consolidated Foods Pension Plan ("Plan"), alleging, inter alia, that they were discharged wrongfully and in violation of both Section 510 of the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1140, and the California Fair Employment and Housing Act, Cal. Gov't Code § 12941 (West 1980). Plaintiffs have also sued for intentional and negligent infliction of emotional distress arising from their discharge. Defendants now move for summary judgment with regard to the claims of: violation of Section 510 of ERISA; violation of the California Fair Employment and Housing Act; intentional infliction of emotional distress; and negligent infliction of emotional distress. Defendant Consolidated also seeks summary judgment with respect to all of the plaintiffs' claims.

I. THE ERISA CLAIM

Defendants have moved for summary judgment on the ERISA claim on the grounds that the plaintiffs are barred from suing for interference with pension rights because they failed to exhaust the remedies available through the Plan's Pension and Employee Benefits Committee ("Committee") prior to bringing this action. This motion is denied on the grounds that (1) the administrative relief available through the Committee would have been inadequate to satisfy the plaintiffs' claim and (2) to require exhaustion of such procedures would unnecessarily burden the exercise and protection of pension plan participants' rights under Section 510.

Plaintiffs have alleged that they were fired as part of a "deliberate nationwide purge of long-term employees" (Plaintiffs Memorandum in Opposition to Motion for Summary Judgment) in order to deprive them of pension benefits which would necessarily have accrued to them in the future. This is a properly pleaded claim under Section 510 of ERISA, which provides in relevant part, "it shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary ... for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, or this subchapter." 29 U.S.C. § 1140; see Titsch v. Reliance Group, Inc., 548 F.Supp. 983 (S.D. N.Y.1982) (allegations of interference with future vesting of benefits sufficient for complaint under Section 510).

In their motion for summary judgment and supporting memoranda, defendants contend that the plaintiffs are estopped from pursuing judicial redress of their grievances because they have failed to exhaust internal plan procedures for benefit claims. Specifically, they contend that plaintiffs should have submitted applications for benefits to the Committee, which would have ruled on them. If the Committee's decision had been unfavorable, plaintiffs could also have applied to the Committee for a full review of the claims.

Defendants offer the affidavit of Mr. Leo Contois, Chairman of the Committee, in which he states that Section 13.01 of the Plan gives the Committee "not only the power, right and authority, but also the fiduciary responsibility to fully investigate the factual basis underlying any claim." Contois Affidavit ¶ 6. This, they contend, demonstrates that intra-plan remedies were available to the plaintiffs and should have been pursued. The plain language of the Plan document contradicts this contention. Section 13.05 of the Plan expressly states, "the Committee may rely upon data furnished by authorized officers of any Employer ... as to any ... information pertinent to any calculations or determinations to be made under the provisions of the Plan and the Committee shall have no duty to inquire into the correctness thereof." Defendants Exhibit C.

Not only is it doubtful whether the Committee has a duty to investigate the circumstances underlying a claim, it is also unlikely that the plaintiffs' claim falls within the purview of the Committee. Plaintiffs' claim is that Shasta violated Section 510 of ERISA itself while the Committee's authority is limited to deciding questions "arising under the Plan." Defendants Exhibit C § 13.01(b). Nor does it appear that the Committee could have provided any remedies for the plaintiffs; there is no sign that the Committee has the power to bind participating employers, whether to impose penalties or to otherwise enforce its decisions, find an employer violation. Even if "claims for unfair interference would have been and would be treated and processed as claims under the procedures and guidelines of the Plan" (Contois Affidavit ¶ 9) the Committee is nonetheless powerless to grant any significant measure of relief on the plaintiffs' claims.

The federal courts have the power to require exhaustion of intra-plan remedies in ERISA based disputes, and in most cases it is appropriate to do so. See Amato v. Bernard, 618 F.2d 559, 567-68 (9th Cir. 1980). However,

there are occasions when a court is obliged to exercise its jurisdiction and is guilty of an abuse of discretion if it does not, the most familiar examples perhaps being when resort to the administrative route is futile or the remedy inadequate.

Winterberger v. General Teamsters, Local Union 162, 558 F.2d 923, 925 (9th Cir. 1977).

This is just such an occasion. Our court of appeals has recognized that, in this regard, suits brought under Section 510 of ERISA differ fundamentally from other suits seeking declarations of the rights and duties of the parties to a pension plan. See Amaro v. Continental Can Co., 724 F.2d 747, 750-52 (9th Cir.1984). The rights protected by Section 510 derive directly from the ERISA statute itself, unlike the plan-based rights for which Congress has mandated the establishment of internal appeal procedures. See Section 503 of ERISA, 29 U.S.C. § 1133; id. In Section 510 suits:

We are faced solely with an alleged violation of a protection afforded by ERISA. There is no internal appeal procedure either mandated or recommended by ERISA to hear these claims. Furthermore, there is only a statute to interpret. That is a task for the judiciary, not an arbitrator.

Id. at 751.

The decisions relied upon by defendants, Kross v. Western Electric Co., Inc., 534 F.Supp. 251 (N.D.Ill.1982), affirmed in relevant part, 701 F.2d 1238 (7th Cir.1983), and Innocenti v. Shasta Beverages, Inc., No. Y-82-3370 (D.Md.1983) (slip op.), rest on very different reasoning and are in direct conflict with the law in this circuit. See Amaro, 724 F.2d at 752 ("We find Kross to be based on a flawed premise, and we refuse to follow it.").

II. THE AGE DISCRIMINATION CLAIM

Defendants have also moved for summary judgment on the plaintiffs' claim that they were terminated in violation of the California Fair Employment and Housing Act ("FEHA"), Cal. Gov't Code § 12941 (West 1980). Defendants argue that the plaintiffs failed to file their discrimination claims with the appropriate state or federal agencies within the time limits in that statute and are therefore barred from pressing their claims in this action. We agree and have granted defendants' motion.

Plaintiffs allege that Grywczynski was terminated as of September 21, 1979, and that Ralston was terminated as of November 30, 1979. On December 8, 1980, Grywczynski filed charges against Shasta with the federal Equal Employment Opportunity Commission ("EEOC") alleging that he had been terminated as a result of discriminatory practices. Ralston filed similar charges with the EEOC on June 27, 1981, almost a month after the commencement of this lawsuit. Thus, Grywczynski's EEOC charge came more than fourteen months, and Ralston's more than nineteen months, after they allege they were terminated.

Plaintiffs allege that they were fired in violation of the FEHA, Cal. Gov't Code § 12941 (West 1980). The FEHA is a comprehensive statutory scheme that encompasses various anti-discrimination statutes including the California Fair Employment Practices Act (former Labor Code §§ 1410 et seq.; see Stats.1959, ch. 121, § 1, p. 2000 et seq.). The FEHA not only designates illegal discriminatory conduct, it establishes specific procedures for enforcement of the rights it protects. Thus, California Government Code section 12965 provides that a person who believes himself aggrieved by discriminatory conduct in violation of the statute may file a complaint with the California Department of Fair Employment and Housing ("DFEH"). However, "no complaint may be filed after the expiration of one year from the date upon which the alleged unlawful practice or refusal to cooperate occurred" unless the aggrieved party learns of the alleged illegality "after one year has passed." Cal. Gov't Code § 12965 (West 1980).

Compliance with the administrative procedures set forth in the statute is a prerequisite for any private civil suit for age discrimination under California law. See Bennett v. Borden, Inc., 56 Cal.App.3d 706, 128 Cal.Rptr. 627 (1976); see also Commodore Home Systems, Inc. v. Superior Court, 32 Cal.3d 211, 185 Cal.Rptr. 270, 275, 649 P.2d 912 (1982) (right to sue under California discrimination statute "surely is `limited,' in the sense that extensive administrative procedures are a precondition to its accrual"). Compliance with the one year time limit of Section...