Slipchenko v. Brunel Energy, Inc.
| Decision Date | 30 August 2013 |
| Docket Number | CIVIL ACTION NO. H-11-1465 |
| Parties | TAMARA SLIPCHENKO, on behalf of herself and all other persons similarly situated, Plaintiffs, v. BRUNEL ENERGY, INC., et al, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
The plaintiffs, Tamara Slipchenko, David R. Boswell, and Valorie Barton,1 worked for Brunel Energy, Inc., a Houston-based energy company that is a subsidiary of Brunel International N.V. (together, "Brunel"). The plaintiffs sued Brunel on behalf of themselves and similarly situated present and former employees, alleging that Brunel failed to provide required notices of their right to continued health care coverage under the Consolidated Omnibus Budget Reconciliation Act of ("COBRA") and to premium reduction under the American Recovery and Reinvestment Act of 2009 ("ARRA"). In their second amended complaint, the plaintiffs allege violations of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1166(a)(1), (a)(2), and (a)(4), and of the ARRA, Pub. L. No. 111-5, § 3001(a)(1)(A), (a)(7)(A), (B), (C), 123 Stat. 115, 455, 458-60 (codified as amended at 26 U.S.C. § 6432).
The plaintiffs moved for class certification under Rule 23. (Docket Entries No. 54, 55).They defined the proposed class as Brunel employees "who elected coverage provided by British United Provident Association Limited ("BUPA"), together with their spouses and other covered dependents who were participants or beneficiaries in the Brunel Group Health Plan at any time from April 15, 2009 until the present." (Docket Entry No. 55, at 1). Three categories of claims are at issue. The first is claims based on Brunel's alleged failure to provide the initial COBRA notice. The second is claims based on Brunel's alleged failure to provide notice and benefits after an employee has a "qualifying event." The third is claims based on Brunel's alleged failure to provide notice of rights and payment-reduction benefits under the ARRA.
Brunel responded opposing certification. (Docket Entries No. 60, 61, 65). After the discovery deadline, the plaintiffs also moved for summary judgment, which Brunel opposed. (Docket Entries No. 71, 72, 78, 80).
Based on the pleadings; the motions, responses, replies, and surreplies; the records; and the applicable law, the plaintiffs' motion for summary judgment is granted in part and denied in part. Specifically, the plaintiffs' motion for summary judgment is:
The plaintiffs' motion for class certification is granted in part and denied in part. The following class is certified under Rule 23(b)(3): All employees of Brunel who elected coverageprovided by British United Provident Association Limited ("BUPA"), together with their spouses and other covered dependents who were participants or beneficiaries in the Brunel Group Health Plan at any time from April 15, 2009 until the present. The following issues are certified for class treatment:
The named plaintiffs are appointed as class representatives. A status and scheduling conference is set for September 16, 2013, at 10:00 a.m. in Courtroom 11-B.
The reasons for these rulings are explained below.
Brunel's clients are companies that have projects requiring individuals with specialized knowledge for relatively short periods. Brunel places such individuals with its client companies to work on specific projects. Brunel enters into short-term employment contracts with the individuals it hires for its clients' projects, but the employees work directly with the clients. When the project is finished, the individual's employment with Brunel is usually terminated. If the same individual is hired to work on another project, Brunel and the individual enter into a new employment contract. (Docket Entry No. 83, at 9-10).
During their employment with Brunel, the plaintiffs were insured under the Brunel GroupHealth Plan (the "Plan") and elected coverage under BUPA. (Id. at 5). They allege that Brunel failed to provide them and other similarly situated employees with notice of their right to elect COBRA coverage when they first began participating in the Plan; failed to provide notice of their right to continue coverage when their employment was terminated, which the plaintiffs argue was an event qualifying them for continued COBRA coverage; failed to offer a premium reduction to eligible individuals; and failed to notify employees of their eligibility for premium reduction. (Id. at 15-19).
COBRA gives workers who lose health coverage due to a qualifying event the opportunity to elect continued coverage from their group health plan for a limited time. See 29 U.S.C. §§ 1161, 1166. COBRA requires an employer to notify an eligible employee twice: first, when the employee begins participating in a group health plan; and second, when the employee notifies the employer that a qualifying event has occurred. Id. The ARRA provides eligible individuals with a right to reduced premium payments for healthcare coverage they receive through COBRA. See Pub. L. No. 111-5, § 3001(a)(1)(A), 123 Stat. 115, 455 (codified as amended at 26 U.S.C. § 6432).2 The ARRA also requires an employer to notify an eligible employee of this right when he or she is notified of the right to elect continued coverage under COBRA after a qualifying event. See Pub. L. No. 111-5, § 3001(a)(7)(A)(I), 123 Stat. 115, 458-59 (codified as amended at 26 U.S.C. § 6432).
In their second amended complaint, (Docket Entry No. 83), the plaintiffs sought class certification to obtain the following relief:
(1) an injunction requiring Brunel to allow qualified beneficiaries to elect COBRA coverage in the Brunel Health Plan; (2) an injunction appointing an independent administrator to bring the Brunel Group Health Plan into compliance with COBRA and ARRA and providing them with the ARRA subsidy where appropriate; (3) a declaration that Plaintiffs and the Class are entitled to the benefits they would have received had they been provided the opportunity to elect COBRA continuation coverage during the Class period; and (4) statutory penalties against Brunel and the Brunel Group Health Plan for the failure to provide the statutory notices required by COBRA and ARRA.
(Docket Entry No. 83, at 4). The plaintiffs also sought attorneys' fees and prejudgment and postjudgment interest. (Id. at 20).
Brunel employed Tamara Slipchenko from August 2008 until March 2010. She worked as an Environmental and Regulatory Advisor at Exxon/Mobil Development Company. During her Brunel employment, she received health coverage under the Plan. (Id. at 10). Brunel alleges that it fired Slipchenko based on its belief that she had received reimbursements she was not entitled to and then refused to return the overpaid amount. When Slipchenko's employment was terminated, she asked Brunel for information about COBRA. In response, Brunel told her that employees who elected coverage under BUPA were not eligible for COBRA coverage. (Id. at 11-12).
In December 2010, Slipchenko was diagnosed with Hodgkin's lymphoma requiring medical treatment. (Id. at 12). At some point after Brunel fired her, Slipchenko was able to get health coverage from another insurance company, Health Net. (Id.). In February 2011, Slipchenko contacted the Department of Labor about her COBRA eligibility and was told that because Brunel had terminated her employment, she was eligible for both continued coverage and for premium reduction under the ARRA. (Id. at 12-13). The Department of Labor sent Brunel a letter datedMarch 3, 2011 directing it to provide Slipchenko with a COBRA package within 10 days. (Id. at 13). Brunel initially failed to comply. Approximately three months later, with one month of eligibility left, Brunel offered Slipchenko COBRA coverage. (Id. at 14).
In this lawsuit, Slipchenko alleges that Brunel failed to provide her initial notice of her COBRA rights when she began participating in the Plan in August 2008 and failed to give her notice of her COBRA and ARRA rights when her employment ended in March 2010. (Id. at 10-11).
David R. Boswell was employed by Brunel from March 2007 to July 2010 as an Offshore Installation Technical Foreman. He received health coverage under BUPA. (Id. at 14). Boswell was apparently insured under a different plan than the other potential class members. He was covered by the BUPA Gold Plan, and was the only Brunel-employed American citizen covered by that plan. (Docket Entry No. 60, at 7 ). Boswell alleges that Brunel failed to provide him with an initial notice of his COBRA rights and with a notice of his right to continued coverage under COBRA once his employment was terminated. (Docket Entry No. 83, at 14). Boswell's employment was terminated after the May 31, 2010 deadline for ARRA coverage.3
Valorie Barton was employed by Brunel from November 2009 to November 2010 as a Contract Administrator at Exxon/Mobil Global Services Company. She received health coverage under BUPA. (Id.). Barton alleges that Brunel failed to provide her with an initial notice of her COBRA rights and with notice of her right to continued coverage once her employment wasterminated. (Id. at 14-15). She alleges that Brunel did not offer her a COBRA package until over nine months after it...
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