Muto v. CBS Corp.

• Decision Date: 01 February 2012
• Docket Number: Docket No. 10–3038–cv.
• Citation: 668 F.3d 53,52 Employee Benefits Cas. 1202
• Parties: Joseph G. MUTO, Kevin Beam, Plaintiffs–Appellants, v. CBS CORPORATION, f/k/a Westinghouse Electric Corporation, the CBS Combined Pension Plan,1 Defendants–Appellees.
• Court: U.S. Court of Appeals — Second Circuit

52 Employee Benefits Cas. 1202

668 F.3d 53

Joseph G. MUTO, Kevin Beam, Plaintiffs–Appellants,

v.CBS CORPORATION, f/k/a Westinghouse Electric Corporation, the CBS Combined Pension Plan,1 Defendants–Appellees.

Docket No. 10–3038–cv.

United States Court of Appeals, Second Circuit.

Argued: Aug. 31, 2011.Decided: Feb. 1, 2012.

Jeffrey V. Mansell (David B. Rodes, John T. Tierney, on the brief), Goldberg, Persky & White, P.C., Pittsburgh, PA, for Plaintiffs–Appellants.

Shay Dvoretzky (Glen D. Nager, David J. Strandness, on the brief), Jones Day, Washington, DC, for Defendants–Appellees.

Before: LIVINGSTON, LOHIER, and CARNEY, Circuit Judges.

SUSAN L. CARNEY, Circuit Judge:

Plaintiffs–Appellants Joseph G. Muto and Kevin Beam appeal from the judgment of the U.S. District Court for the Southern District of New York (Barbara S. Jones, Judge ) dismissing as time-barred their putative class action complaint against their former employer and the employer's pension plan for benefits alleged to be due under the Employee Retirement Income Security Act of 1974 (“ERISA”). Plaintiffs agree that since ERISA contains no express limitations period for claims brought pursuant to 29 U.S.C. § 1132, the district court correctly looked to New York law to determine the applicable period. They assert that the court erred, however, when it looked past the six-year New York limitations period for contract actions; applied part of the New York regime known as the “borrowing statute,” which directed it to Pennsylvania law; and ruled that Pennsylvania's four-year limitations period barred plaintiffs' claims.

We conclude that the district court was correct in applying New York's borrowing statute and that plaintiffs' claims are untimely under Pennsylvania law. Accordingly, we affirm the judgment of the district court.

BACKGROUND

The relevant facts, as alleged in the complaint, are as follows. Plaintiffs, residents of Pennsylvania, are former employees of Westinghouse Electric Corp. (“Westinghouse”) who worked for the company in Pittsburgh in the 1990s. During that time, the company offered its employees a pension plan (the “Westinghouse Plan”) defined and regulated by ERISA. See 29 U.S.C. § 1002(2). The Westinghouse Plan entitled participants to accrue pension benefits, but provided that the accrued benefits were vulnerable to forfeiture until the participants had achieved five years of “credited service.” Neither Muto nor Beam had accrued five years of credited service before December 1998, when their employment with Westinghouse ended.

Plaintiffs' terminations occurred during a series of layoffs and business divestitures implemented by Westinghouse from 1994 through 2000. According to plaintiffs, Westinghouse's elimination of a significant number of Westinghouse Plan participants created a substantial funding surplus that only increased after the Westinghouse Plan's merger in 2000 with the CBS Combined Pension Plan (the “Plan”), reaching a level that would have been sufficient to fund the pensions of all those whose employment was terminated between 1994 and 2000. Plaintiffs contend that “[t]he elimination of a significant number or percentage of Westinghouse Plan participants through layoffs and/or divestitures ... constituted a partial termination” of the Plan under both the terms of the Plan and ERISA and, accordingly, that their accrued benefits became nonforfeitable to the extent funded by Westinghouse. See Compl. ¶ 17; 26 U.S.C. § 411(d)(3). Defendants deny this characterization of their actions and reject plaintiffs' claims for accrued benefits.

Plaintiffs first sued CBS, as successor to Westinghouse, and the successor Plan for benefits under the partial termination theory in a putative class action in 2000 in the U.S. District Court for the Western District of Pennsylvania. In 2001, that court awarded summary judgment to defendants on the ground that plaintiffs had failed to exhaust their Plan remedies before bringing suit. D'Amico v. CBS Corp., No. 00–2495, slip op. at 28 (W.D.Pa. Oct. 1, 2001). In 2002, the Third Circuit affirmed. 297 F.3d 287 (3d Cir.2002).

In 2003, plaintiffs sought to exhaust their administrative remedies, sending correspondence regarding their claims in April and September of that year. These two pieces of correspondence were each addressed to the Plan Administrator at a CBS broadcast center in New York City, even though the Summary Plan Description identified postal addresses for Plan administrative offices only in Pennsylvania (for the Plan Administrator) and Florida (for the Plan Benefits Access Center) and directed that appeals be addressed to the Plan Administrator in Pittsburgh.

In April 2009, more than a decade after Westinghouse terminated their employment and more than five years after they sent their 2003 letters, plaintiffs filed this putative class action in the U.S. District Court for the Southern District of New York. They again sought a judgment declaring that CBS effected a partial termination of the Plan and awarding plaintiffs accrued benefits on that basis. See 29 U.S.C. § 1132(a)(1)(B), (a)(3). Defendants moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, for summary judgment pursuant to Federal Rule of Civil Procedure 56, arguing that plaintiffs' claims were barred by the applicable statute of limitations.

The district court granted defendants' motion to dismiss. Looking to New York's borrowing statute, the district court applied the four-year Pennsylvania statute of limitations for contract claims and ruled that suit was filed too late. Plaintiffs timely appealed.

DISCUSSION

A.

We review de novo a district court's grant of a motion to dismiss, accepting as true all factual allegations in the complaint and drawing all reasonable inferences in favor of the plaintiffs. City of Pontiac Gen. Emps.' Ret. Sys. v. MBIA, Inc., 637 F.3d 169, 173 (2d Cir.2011). A district court's interpretation and application of a statute of limitations are also subject to our de novo review. Id.

B.

When a federal statute does not establish a period of limitations for actions brought to enforce it, the district court's task is “to ‘borrow’ the most suitable statute or other rule of timeliness from some other source.” DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151, 158, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). In doing so, the courts “have generally concluded that Congress intended that the courts apply the most closely analogous statute of limitations under state law.” Id. Determining which state statute to apply and how to apply it is a process with which federal courts are well acquainted: “The implied absorption of State statutes of limitation within the interstices of the federal enactments is a phase of fashioning remedial details where Congress has not spoken but left matters for judicial determination within the general framework of familiar legal principles.” Holmberg v. Armbrecht, 327 U.S. 392, 395, 66 S.Ct. 582, 90 L.Ed. 743 (1946). See generally Bd. of Regents v. Tomanio, 446 U.S. 478, 483–84, 100 S.Ct. 1790, 64 L.Ed.2d 440 (1980); UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 701–05, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966); Phelan v. Local 305 of United Ass'n of Journeymen, 973 F.2d 1050, 1058 (2d Cir.1992).

ERISA does not establish a limitations period for actions like this, in which former Plan participants seek benefits under § 1132(a)(1)(B) and (a)(3). Therefore, absent significant reasons to depart from the ordinary practice, see United Paperworkers Int'l Union v. Specialty Paperboard, Inc., 999 F.2d 51, 53–54 (2d Cir.1993), the applicable limitations period in this § 1132 action is “that specified in the most nearly analogous ... limitations statute” of the forum state. Miles v. N.Y. State Teamsters Conf. Pension & Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir.1983) (looking to New York statute of limitations in suit for ERISA benefits); accord Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 572 F.3d 76, 78 (2d Cir.2009) (per curiam). Here, plaintiffs chose New York as the forum state.

We have previously analogized claims seeking benefits under § 1132 to state law breach of contract claims. See Burke, 572 F.3d at 78; see also Larsen v. NMU Pension Trust of the NMU Pension & Welfare Plan, 902 F.2d 1069, 1073 (2d Cir.1990). Under New York law, a claim for breach of contract must be filed within six years of when the claim accrues. N.Y. C.P.L.R. § 213(2). Under the six-year rule, plaintiffs' claims would be timely. But in its borrowing statute, § 202, New York law also provides that “when a nonresident plaintiff sues upon a cause of action that arose outside of New York, the court must apply the shorter limitations period ... of either: (1) New York; or (2) the state where the cause of action accrued.” Stuart v. Am. Cyanamid Co., 158 F.3d 622, 627 (2d Cir.1998) (citing N.Y. C.P.L.R. § 202).²

We have held that “in determining whether a suit is timely brought ... courts should refer to the statute of limitations of the forum state, including any ‘borrowing statute’ of the forum.” Robertson v. Seidman & Seidman, 609 F.2d 583, 586 (2d Cir.1979). See, e.g., McDonald v. Piedmont Aviation Inc., 930 F.2d 220, 224–25 (2d Cir.1991) (applying New York borrowing statute to claim brought under the Airline Deregulation Act); Arneil v. Ramsey, 550 F.2d 774, 779–80 (2d Cir.1977) (applying New York borrowing statute in securities law context), overruled on other grounds by Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983). At least one other district court in our Circuit (in addition to the district court in this case) has applied this principle to an action brought under § 1132 of ERISA. See Barnett v. IBM Corp., 885 F.Supp. 581, 589–90 (S.D.N.Y.1995).

Our presumption that we apply the forum state's borrowing statute as a part of the limitations regime governing federal...