Luciano v. Teachers Ins. & Annuity Ass'n of Am. Coll. Ret. Equities Fund
| Decision Date | 29 July 2016 |
| Docket Number | Civil Action No. 15-6726 (MAS) (DEA) |
| Parties | LORRAINE H. LUCIANO, on behalf of herself and all others similarly situated, Plaintiff, v. TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA - COLLEGE RETIREMENT EQUITIES FUND (TIAA-CREF), et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
This matter comes before the Court on several motions. Defendants Educational Testing Service ("ETS") and Educational Testing Service Employee Benefits Administration Committee ("EBAC") (collectively, with ETS, "ETS Defendants") and Defendants Teachers Insurance and Annuity Association of America - College Retirement Equities Fund, Teachers Insurance and Annuity Association of America, and College Retirement Equities Fund ("TIAA-CREF Defendants") (collectively, with ETS Defendants, "Defendants") move to dismiss Plaintiff Lorraine H. Luciano's ("Plaintiff") First Amended Complaint pursuant to Rule 12(b)(1), (6), and (7) of the Federal Rules of Civil Procedure.1 (ECF Nos. 27-1, 302.) In response, Plaintiff cross-moves for partial summary judgment against Defendants and Intervener Defendant Lucille Rosso("Intervenor"). (ECF Nos. 41, 45.) Additionally, Plaintiff appeals the Honorable Douglas E. Arpert, U.S.M.J.'s January 15, 2016 Memorandum Order (the "January 15 Order") (ECF No. 34), granting Intervener's motion to intervene. (ECF No. 37.) The Court has carefully considered the parties' submissions and decides the matter without oral argument pursuant to Local Civil Rule 78.1. For the reasons stated below, Plaintiff's appeal of the January 15 Order is denied, Defendants' motions to dismiss are granted in part, and Plaintiff's cross-motions for summary judgment are terminated as moot.
This is a putative class action brought by Plaintiff against Defendants concerning Defendants' treatment of defined-contribution pension benefits allegedly payable to Plaintiff. TIAA-CREF Defendants provide retirement and savings plan design, consultation, and administration for employee benefit plans governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). (Pl.'s Statement of Undisputed Material Facts ("SUMF") ¶ 1, ECF No. 40-4.) ETS Defendants sponsor certain employee benefit plans and have selected TIAA-CREF as an annuity provider for their plans. (TIAA-CREF Defs.' Resp. SUMF ¶ 4, ECF No. 51-7.)
Plaintiff's husband, James Rosso ("Mr. Rosso"), was employed by ETS and was a participant in two of ETS's plans: (1) the ETS Retirement Plan (the "401(a) Plan"); and (2) the ETS 403(b) Match Plan (the "403(b) Plan"). (Pl.'s SUMF ¶ 6.) Mr. Rosso originally designated his parents and sister, Intervenor Lucille Rosso, as his beneficiaries under the Plans. (Id. ¶ 35.) Later, Mr. Russo changed his designated beneficiary to only his sister. (Am. Compl. ¶ 52, ECF No. 3.) Thereafter, Plaintiff and Mr. Rosso married in February 2004, and Mr. Rosso passed away in April 2014. (Pl.'s SUMF ¶ 25.)
After her husband's death, Plaintiff informed TIAA-CREF Defendants that she was his surviving spouse. (Am. Compl. ¶¶ 55-56.) TIAA-CREF Defendants informed Plaintiff that as the surviving spouse she was entitled to a death benefit of $119,253.33, one half of Mr. Rosso's account balance. (Id. ¶¶ 57-58.) TIAA-CREF Defendants informed Plaintiff that the other one half benefit would be paid to Intervenor. (Id. ¶ 59.) Plaintiff first filed an injunction application in the New Jersey Superior Court to prevent TIAA-CREF Defendants from paying out any of the funds to Intervenor. (Id.) The state court action was voluntarily dismissed following an agreement that no funds would be disbursed until the outcome of the formal plan procedures and any related litigation. (Id.) Thereafter, Plaintiff filed a claim for benefits with TIAA-CREF Defendants, which was denied by written decision on March 13, 2015. (Pl.'s SUMF ¶ 32.) Plaintiff appealed the denial, which ETS Defendants affirmed on July 8, 2015. (Id. ¶¶ 36-39.) Defendants have interpreted Section 7.3 of the 401(a) Plan and Section 8.4 of the 403(b) Plan to entitle a surviving spouse to a qualified preretirement survivor annuity ("QPSA") of fifty percent of the Participant's account balance. (Pl.'s SUMF ¶¶ 13-14, 22-23.)
Subsequently, Plaintiff filed this putative class action challenging Defendants' fifty-percent benefit determination and the 401(a) Plan's mandatory arbitration provision through six counts: (1) failure to make payments pursuant to 29 U.S.C. § 1132(a)(1) and (3); (2) declaratory judgment regarding payments pursuant to 28 U.S.C. § 2201 and 29 U.S.C. § 1132(a)(3); (3) breach of fiduciary duty pursuant to 29 U.S.C. § 1104; (4) declaratory judgment regarding the arbitration clause pursuant to 28 U.S.C. § 2201, 29 U.S.C. §§ 1132(a)(3), 1133(2), and 29 C.F.R. § 2560.503-1; (5) enjoinment of the arbitration clause pursuant to 29 U.S.C. § 1132(a)(3); and (6) breach of fiduciary duty regarding the arbitration clause pursuant to 29 U.S.C. §1104. (See generally Am. Compl., ECF No. 3.)
Plaintiff argues that the Magistrate Judge's January 15 Order finding that "'the interests of Defendants and [Intervenor] could diverge' . . . . was an error of law because the relevant inquiry is whether the proposed intervener's interests are not currently adequately represented." (Pl.'s Appeal Moving Br. 1, ECF No. 37-1 (quoting Order, Jan. 15, 2016, ECF No. 34).) Plaintiff, thus, argues that Intervenor's motion to intervene should be denied because there is no current divergence of interests and her interests are adequately represented. (Id. at 2.)
A magistrate judge is authorized to determine non-dispositive motions, which include "any pretrial motion or other pretrial matter." L. Civ. R. 72.1(a)(1). A magistrate judge is "accorded wide discretion in addressing non-dispositive motions." Marks v. Struble, 347 F. Supp. 2d 136, 149 (D.N.J. 2004). A magistrate judge's resolution of non-dispositive matters may only be set aside if the order is clearly erroneous or contrary to law. Fed. R. Civ. P. 72(a); Loc. Civ. R. 72.1(c)(1); Gunter v. Ridgewood Energy Corp., 32 F. Supp. 2d 162, 164 (D.N.J. 1998) (citing 28 U.S.C. § 636(b)(1)(A)). "[A] finding is clearly erroneous only 'when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'" Lo Bosco v. Kure Eng'g Ltd., 891 F. Supp. 1035, 1037 (D.N.J. 1995) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)). For a magistrate judge's decision to be contrary to law, the Court must find that the magistrate judge misapplied or misinterpreted the applicable law. See Gunter, 32 F. Supp. 2d at 164.
The party filing the appeal has the burden of showing that a magistrate judge's ruling is clearly erroneous or contrary to law. See Travelers Indemn. Co. v. Dammann & Co., 592 F. Supp. 2d 752, 758-59 (D.N.J. 2008), aff'd, 594 F.3d 238 (3d Cir. 2010). When a non-dispositive matterhas been decided by a magistrate judge, the ruling "is entitled to great deference and is reversible only for abuse of discretion." Kresefsky v. Panasonic Commc'ns. Sys. Co., 169 F.R.D. 54, 64 (D.N.J. 1996). "It follows that a 'magistrate judge's findings should not be rejected even if a reviewing court could have decided the issue differently.'" Costa v. Cty. of Burlington, 584 F. Supp. 2d 681, 684 (D.N.J. 2008) (quoting Toth v. Alice Pearl, Inc., 158 F.R.D. 47, 50 (D.N.J. 1994)).
In the January 15 Order, Judge Arpert found that intervention as of right was appropriate4, stating that:
Rule 24(a)(2) is directed to intervention of right, and provides that the Court must permit anyone to intervene who "claims an interest relating to the property or transaction that is the subject of the action, is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest." Fed. R. Civ. P. 24(a)(2). A litigant seeking intervention as of right must establish the following: "(1) a timley application for leave to intervene; (2) a sufficient interest in the underlying litigation; (3) a threat that the interest will be impaired or affected by the disposition of the underlying action; and (4) that the existing parties to the action do not adequately represent the prospective intervener's interests." Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005) (citing Kleissler v. United States Forest Service, 157 F.3d 964, 969 (3d Cir. 1998)). Having considered all of these factors, the Court finds that intervention under Rule 24(a)(2) is appropriate here.
(Order, Jan. 15, 2016, 2-3.) Specifically, Judge Arpert held that "contrary to the contentions of Plaintiff, [Intervener's] interests are not adequately represented by any of the present Defendants" because although "Defendants and [Intervenor] both have an interest in seeing Defendants'interpretation of the relevant plan upheld, Defendants, unlike [Intervenor], have an interest in limiting their overall liability." (Id. at 3.)
On appeal, Plaintiff challenges Judge Arpert's finding as to the fourth factor for mandatory intervention pursuant to Rule 24(a)(2), adequate representation.5 Specifically, Plaintiff argues that Judge Arpert incorrectly looked to the "potential divergence" of Defendants and Intervener's interests instead of their current interests, which are identical. (Pl.'s Appeal Moving Br. 11-16 () In opposition, Defendants and Intervenor argue that "Judge Arpert did indeed find a present divergence of interest, as he noted that Defendants have an interest in limiting their overall...
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