Larsen v. State Employees' Retirement System

• Decision Date: 15 May 2008
• Docket Number: No. 4:07-cv-1838.,4:07-cv-1838.
• Citation: 553 F.Supp.2d 403
• Parties: Rolf LARSEN, Plaintiff v. STATE EMPLOYEES' RETIREMENT SYSTEM ("SERS"), et al., Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

553 F.Supp.2d 403

Rolf LARSEN, Plaintiff v. STATE EMPLOYEES' RETIREMENT SYSTEM ("SERS"), et al., Defendants.

No. 4:07-cv-1838.

United States District Court, M.D. Pennsylvania.

May 15, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Lawrence H. Fisher, Cohen & Willwerth PC, Pittsburgh, PA, for Plaintiff.

Susan J. Forney, Office of Attorney General, Harrisburg, PA, A. Taylor Williams, Administrative Office of PA Courts, Philadelphia, PA, for Defendants.

MEMORANDUM AND ORDER

JOHN E. JONES III, District Judge.

This matter is before the Court on the motions to dismiss of the State Employees' Retirement System ("SERS"), the State Employees' Retirement Board ("SERB") and related individual defendants (collectively "the SERS defendants") (Doc. 10) and the Administrative Office of Pennsylvania Courts ("AOPC") and David Frankforter (collectively "the AOPC defendants") (Doc. 11). For the reasons set forth below, the motion of the SERS defendants will be granted in part and denied in part. The motion of the AOPC defendants will be granted, and the claims against these defendants dismissed in their entirety.

I. STANDARDS OF REVIEW

A. Rule 12(b)(1)

The defendants' motions argue, in part, that they are immune from the plaintiffs claims under the Eleventh Amendment, and therefore, that the Court lacks subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). See Blanciak v. Allegheny Ludlum Corp., 77 F.3d 690, 694 n. 2 (3d Cir.1996). When considering a motion to dismiss under Rule 12(b)(1), a court must distinguish between facial and factual challenges to its subject matter jurisdiction. See Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977). A facial attack challenges whether the plaintiff has properly pled jurisdiction. Id. "In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Gould Elecs., Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000) (citing Mortensen, 549 F.2d at 891). A factual attack, in contrast, challenges jurisdiction based on facts apart from the pleadings. Mortensen, 549 F.2d at 891. "When a defendant attacks subject matter jurisdiction `in fact,' ... the Court is free to weigh the evidence and satisfy itself whether it has power to hear the case. In such a situation,`no presumptive truthfulness attaches to plaintiffs allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.'" Carpet Group Int'l v. Oriental Rug Importers Ass'n, 227 F.3d 62, 69 (3d Cir.2000) (quoting Mortensen, 549 F.2d at 891). In this case, the defendants do not rely on any facts beyond the pleadings in support of their jurisdictional argument, and their Eleventh Amendment defenses raise a facial challenge to jurisdiction. See Smolow v. Hafer, 353 F.Supp.2d 561, 566 (E.D.Pa.2005); Bell Atl-Pa., Inc. v. Pa. Public Utility Comm'n, 107 F.Supp.2d 653, 659 (E.D.Pa.2000).

B. Rule 12(b)(6)

The defendants' motions also challenge the legal sufficiency of the plaintiffs complaint under Federal Rule of Civil Procedure 12(b)(6). In considering a motion to dismiss pursuant to Rule 12(b)(6), courts "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir.2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir.2002)).

A Rule 12(b)(6) motion tests the sufficiency of the complaint against the pleading requirements of Rule 8(a). Rule 8(a)(2) requires that a complaint contain a short and plain statement of the claim showing that the pleader is entitled to relief, "in order to give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 1965. A plaintiff must make "a`showing' rather than a blanket assertion of an entitlement to relief', and "without some factual allegation in the complaint, a claimant cannot satisfy the requirement that he or she provide not only`fair notice,' but also the`grounds' on which the claim rests." Phillips, 515 F.3d at 232 (citing Twombly, 127 S.Ct. at 1965 n. 3). "[A] complaint must allege facts suggestive of [the proscribed] conduct", and the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 127 S.Ct. at 1965, 1969 n. 8. Therefore, "stating a claim requires a complaint with enough factual matter (taken as true) to suggest the required element." Phillips, 515 F.3d at 234 (quoting Twombly, 127 S.Ct. at 1965 n. 3).

On the-other hand, "a complaint may not be dismissed merely because it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits." Id. at 231 (citing Twombly, 127 S.Ct. at 1964-65, 1969 n. 8). Rule 8 "does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Id. at 234.

II. BACKGROUND

With these standards of review in mind, the following are the facts derived from the complaint for the purposes of the current motions, accepting as true all factual allegations and construing the complaint in the light most favorable to the plaintiff. Phillips, 515 F.3d at 231; Gould Elecs., 220 F.3d at 176.

This action concerns the calculation and administration of Plaintiff Rolf Larsen's retirement benefits. Larsen is a former justice of the Pennsylvania Supreme Court. (Complaint, Doc. 1, ¶ 25.) He won election to the Allegheny County Court of Common Pleas in 1973 and then to the Pennsylvania Supreme Court in 1977. (Id. at ¶¶ 24-25.) From January 1, 1978 through September 1993, in addition to his base salary, Larsen received additional compensation in the form of a monthly unvouchered expense account. (Id. at ¶ 27.) Further, while Larsen served in these positions, his benefits plan provided for lifetime retirement benefits for retired judges with ten or more years of judicial service. (Id. at ¶ 28.)

Larsen was "terminated" from his position as a Supreme Court justice at various times, by various entities: on June 3, 1994 by Deputy Court Administrator David Frankforter; on June 13, 1994 by the Allegheny County Court of Common Pleas; on October 4, 1994 by the Pennsylvania Senate; and on February 4, 2000 by the Pennsylvania Court of Judicial Discipline. (Id. at 1126.)

Larsen appealed all of his terminations (id. at ¶ 33), which were upheld (see id. at ¶¶ 34-42). After the Third Circuit's October 29, 2001 decision rejecting one of his challenges to his termination, Larsen applied to SERS for his retirement benefits on November 19, 2001. (Id. at ¶¶ 42-43, 46.) Larsen began collecting his pension in February 2002. (Id. at ¶ 46.)

On February 1, 2002, Linda Miller, director of the benefits determination division of SERS, issued a letter to Larsen, determining that the effective date of his retirement was November 19, 2001, the date of his benefits application, and that unvouchered expense payments were not included in the calculation of his final average salary. (Id. at 47.) On February 28, 2002, Larsen appealed these determinations, arguing that his retirement date should be June 3, 1994, the date of his first "termination", and further arguing that the calculation of his final average salary should include unvouchered expenses. (Id. at ¶ 48.) On June 17, 2002, SERS Executive Director John Brosius notified Larsen that the Appeals Committee had denied his appeal. (Id. at ¶ 49.) On July 17, 2002, Larsen filed another appeal to SERB. (Id. at 1151.) In response, SERS filed an answer, new matter, and counterclaim on August 6, 2002. (Id. at ¶ 52.)

Larsen states that SERS' August 6, 2002 response to his appeal was the first time he became aware of Management Directive 570.8, a "secret" management directive enacted by SERS on October 10, 1989.¹ (Id. at 29, 52; see also id. at Ex. A.) This directive "provides guidelines for employes who have been dismissed or furloughed and subsequently reinstated as a result of arbitration awards, civil service adjudications, court orders, or grievance settlements." (Id. Ex. A at 1.) After setting out specific procedures, the directive concludes:

The information detailed above is to be provided by agency retirement counselors to any dismissed or furloughed employee. Employes are to be informed of their rights and obligations regarding actions they may take which affect their retirement accounts. For example, an employe may file a conditional retirement application if he or she wishes to appeal a dismissal or furlough. If the employe wins his or her appeal and is reinstated, the conditional application becomes void. No payments would be made, and no repayments would be necessary. If the employe loses the appeal, the application for retirement becomes effective the day specified on the application.

(Id., Ex. A. at 2.)

Larsen states that at no time after his first termination on June 3, 1994 did any of the defendants inform him of the possibility of filing a conditional application for retirement benefits. (Id. at ¶ 32.) Larsen alleges that Frankforter was AOPC's retirement counselor, under 71...