Ocean Breeze Festival Park, Inc. v. Reich

Decision Date27 May 1994
Docket NumberAction No. 2:93cv1170.
Citation853 F. Supp. 906
CourtU.S. District Court — Eastern District of Virginia
PartiesOCEAN BREEZE FESTIVAL PARK, INC., Virginia Beach Policemen's Benevolent Association, Centurion Health and Welfare Benefit Plan, Plaintiffs, v. Robert B. REICH, Secretary of Labor, United States Department of Labor, Defendants.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Wyatt B. Durrette, Jr., Stephen Gregory Reardon, Durrette, Irvin & Lemons, P.C., Richmond, VA, Michael T. Leibig, Zwerdling, Paul, Leibig, Kahn, Thompson & Driesen, P.C., Fairfax, VA, for plaintiffs.

Michael A. Rhine, Asst. U.S. Atty., Norfolk, VA, Robin A. Rosenbluth, U.S. Dept. of Labor, Office of Sol., Plan Benefits Sec. Div., Washington, DC, for defendants.

OPINION AND ORDER

REBECCA BEACH SMITH, District Judge.

This matter is before the court on defendants' motion to dismiss plaintiffs' complaint for lack of subject matter jurisdiction and because it fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(1), (6). Additionally, plaintiffs have submitted a motion requesting leave to amend their complaint, together with a copy of the proposed amended complaint.

I. Facts and Procedural History

Plaintiff Ocean Breeze Festival Park, Inc. ("Ocean Breeze"), a corporation organized under the laws of Virginia, employs off duty Virginia Beach police officers as security personnel at Ocean Breeze Festival Park, an amusement park. Plaintiff Virginia Beach Policemen's Benevolent Association ("PBA") is a labor organization established to support Virginia Beach police officers and is the recognized collective bargaining representative of all security employees of Ocean Breeze, under an Agreement of Voluntary Recognition executed on October 20, 1992, pursuant to the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151, et seq. The Centurion Health and Welfare Benefit Plan ("Centurion Plan") is an employee health benefit plan established by Ocean Breeze and PBA. The Amended Complaint proposes as plaintiffs Robert Matthison and Michael F. Gelardi, who are joint trustees of the Plan and fiduciaries of the Plan under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 301, et seq.

On October 28, 1992, Ocean Breeze and the PBA entered into a valid collective bargaining agreement under the NLRA, 29 U.S.C. § 159(a). As of March 22, 1994, the negotiations for renewal and extension of the contract were complete. The agreement provides that, for the purpose of providing health care coverage, Ocean Breeze will make monthly payments to the Centurion Health Trust on behalf of security employees of Ocean Breeze. The PBA sought the health care benefits to offer a less expensive alternative to the health program currently available to Virginia Beach police officers through the City of Virginia Beach.

The Centurion Plan is an ERISA plan, and meets all the requirements for an employee benefit plan under 29 U.S.C. §§ 1002-1003 ERISA §§ 3-4. ERISA contains a broad preemption provision, found in section 514(a), which provides that the statute "shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a). Thus, employee benefit plans, qualifying under ERISA, are subject exclusively to federal regulation. However, the statute provides a "savings clause" which states that nothing in ERISA "shall be construed to exempt or relieve any person from any law of any state which regulates insurance." Id. § 1144(b)(2)(A). ERISA specifically provides that multiple employer welfare arrangements (MEWAs) are subject to state laws which regulate insurance. Id. § 1144(b)(6)(A)(ii). A MEWA is defined as

an employee welfare benefit plan, or any other arrangement (other than an employee welfare benefit plan) which is established or maintained for the purpose of offering or providing any benefit described in paragraph (1) to the employees of two or more employers or to their beneficiaries, except that such term does not include any such plan or other arrangement which is established or maintained—
(i) under or pursuant to one or more agreements which the Secretary finds to be collective bargaining agreements ....

Id. § 1002(40)(A)(i) (emphasis added).

Seeking to escape state regulation, plaintiffs have written to the Secretary of Labor, requesting that he issue a determination letter stating that the Centurion Plan was established pursuant to a collective bargaining agreement. Despite repeated requests, the Secretary has not issued a letter regarding the status of the Centurion Plan. Plaintiffs claim that, based on defendants' refusal to issue an opinion letter, the Bureau of Insurance of the Commonwealth of Virginia has interfered with the Centurion Plan's issuance of coverage in Virginia. An April 20, 1993 consent decree from the Virginia State Corporation Commission prevents the Centurion Plan from enrolling any new participants who are residents of Virginia, unless and until the Plan obtains a definitive advisory opinion from the Department of Labor on the question of whether it is maintained pursuant to a collective bargaining agreement.

After attempting one last time to obtain a letter from defendants, plaintiffs filed this suit, asserting jurisdiction under 29 U.S.C. § 1132(k) and 28 U.S.C. § 1331, and seeking one of the following forms of relief: (1) a declaratory judgment that the Centurion Plan was established pursuant to a collective bargaining agreement, (2) a writ of mandamus ordering the Secretary to make a determination that the Centurion Plan was established pursuant to such an agreement, or (3) an injunction requiring the Secretary to issue a letter stating the above conclusion. In addition, plaintiffs seek reimbursement of costs and attorneys' fees incurred in pursuing this action. Defendants filed a motion to dismiss on the grounds that this court does not have subject matter jurisdiction over plaintiffs' action and that the complaint fails to state a claim upon which relief can be granted.

II. Standard of Review

On a motion to dismiss pursuant to Rule 12(b)(6), the court considers plaintiffs' allegations as true, and views the record as a whole in the light most favorable to them. Schatz v. Rosenberg, 943 F.2d 485, 489 (4th Cir.1991), cert. denied, ___ U.S. ___, 117 L.Ed.2d 619 (1992). The court should not grant a motion to dismiss for failure to state a claim upon which relief can be granted, unless it appears "`beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir.) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)), cert. denied, 439 U.S. 970, 99 S.Ct. 464, 58 L.Ed.2d 431 (1978).

Federal courts are courts of limited jurisdiction, Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 433, 109 S.Ct. 683, 687-88, 102 L.Ed.2d 818 (1989), and the plaintiffs, the parties asserting jurisdiction, bear the burden of proving that federal jurisdiction is proper. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). A Rule 12(b)(1) motion may attack subject matter jurisdiction in two different ways. First, a Rule 12(b)(1) motion may attack the complaint on its face, asserting simply that the complaint "fails to allege facts upon which subject matter jurisdiction can be based." Adams, 697 F.2d at 1219. If such is the case, "the facts alleged in the complaint are assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he would receive under a rule 12(b)(6) consideration." Id.

On the other hand, a Rule 12(b)(1) motion may attack "the existence of subject matter jurisdiction in fact, quite apart from any pleadings." Mortensen v. First Fed. Sav. & Loan Ass'n., 549 F.2d 884, 891 (3d Cir.1977); see Adams, 697 F.2d at 1219. In the case sub judice, defendants claim that Congress, in section 1132(k) of the statute, limited the subject matter jurisdiction of district courts to actions brought by certain enumerated parties. Clearly, the facts tending to prove this allegation are unrelated to the allegations set forth in plaintiffs' complaint.1 Because the trial court's jurisdiction, "its very power to hear the case," Mortensen, 549 F.2d at 891, is at issue in this 12(b)(1) motion, the trial court is free to weigh the evidence to determine the existence of its jurisdiction. Adams, 697 F.2d at 1219; Mortensen, 549 F.2d at 891. "In short, no presumptive truthfulness attaches to the plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Mortensen, 549 F.2d at 891.

III. Subject Matter Jurisdiction
A. ERISA's Grant of Jurisdiction

It is beyond dispute that the federal courts, as courts of limited jurisdiction, do not have subject matter jurisdiction over any cause of action except as conferred by an act of Congress. Rice v. Minnesota & Northwestern R.R. Co., 66 U.S. (1 Black) 358, 374, 17 L.Ed. 147 (1861); see Giardono v. Jones, 867 F.2d 409, 413 (7th Cir.1989); Pressroom Unions-Printers League Income Secur. Fund v. Continental Assur. Co., 700 F.2d 889, 892 (2d Cir.), cert. dismissed, 463 U.S. 1233, 104 S.Ct. 26, 77 L.Ed.2d 1449, cert. denied, 464 U.S. 845, 104 S.Ct. 148, 78 L.Ed.2d 138 (1983). Defendants claim that ERISA's grant of subject matter jurisdiction is exclusive and precludes suit by these plaintiffs against the Secretary of Labor. The relevant section of the statute reads as follows:

Suits by an administrator, fiduciary, participant, or beneficiary of an employee benefit plan to ... compel the Secretary to take action required under this subchapter may be brought in the district court of the United States for the district
...

To continue reading

Request your trial
50 cases
  • Rumfelt v. Jazzie Pools Inc., 1:11cv217 (JCC/TCB)
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • May 31, 2011
    ...Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1993)); see also Adams, 697 F.2d at 1219; Ocean Breeze Festival Park, Inc. v. Reich, 853 F. Supp. 906, 911 (E.D. Va. 1994); Velasco v. Gov't of Indonesia, 370 F.3d 393, 398 (4th Cir. 2004) (holding that "the district court may regard ......
  • Virginia Beach Policemen's Benev. Ass'n v. Reich, Civ. A. No. 2:93cv1170.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • March 22, 1995
    ...and failure to state a claim under Fed.R.Civ.P. 12(b)(6). This Court addressed and granted that motion in Ocean Breeze Festival Park, Inc. v. Reich, 853 F.Supp. 906 (E.D.Va.1994). Proper Plaintiffs PBA, Mathieson, and Gelardi subsequently filed an Amended Complaint in which they seek (1) a ......
  • Wollman v. Geren, 1:08cv1130 (JCC).
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • March 17, 2009
    ...Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir.1993)); see also Adams, 697 F.2d at 1219; Ocean Breeze Festival Park, Inc. v. Reich, 853 F.Supp. 906, 911 (E.D.Va.1994). In either case, the burden of proving subject matter jurisdiction falls on the plaintiff. McNutt v. General Motors......
  • Circuit City Stores, Inc. v. E.E.O.C.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • August 12, 1999
    ...Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188, 191 (7th Cir.1993)); see also, Adams, 697 F.2d at 1219; Ocean Breeze Festival Park, Inc. v. Reich, 853 F.Supp. 906, 911 (E.D.Va.1994) affirmed by Virginia Beach Policemen's Benev. Ass'n v. Reich, 96 F.3d 1440, 1996 WL 511426 (4th Cir.1996). Tha......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT