Smith v. Coca Cola Bottling Co. United
| Decision Date | 14 April 2022 |
| Docket Number | 3:21-CV-03939 |
| Parties | COURTNEY SMITH v. COCA COLA BOTTLING CO. UNITED, INC., ET AL. |
| Court | U.S. District Court — Western District of Louisiana |
MEMORANDUM ORDER
Before the undersigned is a motion to dismiss for failure to state a claim filed by Defendants Coca Cola Bottling Company United Inc. (“Coca Cola”) and ReliaStar Life Insurance Company (“Reliastar”) (together “Defendants”). Plaintiff Courtney Smith (“Plaintiff”) did not file an opposition, and thus, Defendants' motion to dismiss is unopposed.[1]For the reasons assigned below, it is recommended that Defendants' motion be granted in part and denied in part.
On October 11, 2020, Plaintiff's spouse, James Smith (the “Decedent”), was killed in an automobile accident. [doc. #2-2, p. 1]. At the time of his death, the Decedent was employed by Coca Cola and, through his employment, had a group life insurance plan (the Coca Cola Plan”) which named Plaintiff as the beneficiary. Id. Plaintiff alleges that, “upon information and belief, ” the Decedent also purchased an individual policy from ReliaStar (the “ReliaStar Plan”) which also named Plaintiff as the beneficiary. Id. According to Plaintiff, each policy included $50, 000 of basic benefit plus $50, 000 of accidental death benefit, as well as interest from the date of the Decedent's death. Id. at 2.
Plaintiff claims that after the Decedent's death, Defendants paid one of the policies, but not the other.[2] Id. at 2. Accordingly, on October 11, 2021, Plaintiff filed suit against Defendants in the Fourth Judicial District Court for the Parish of Ouachita to recover the remaining benefits Plaintiff claims she is owed. [doc. #2-2]. In her state court Petition, Plaintiff asserts claims for breach of insurance contract, breach of employment contract, and breach of duty to take the steps necessary to enable Plaintiff to secure payment under the policies. Id. at 2-3.
On November 11, 2021, ReliaStar removed the suit to this Court on the basis of diversity jurisdiction, as well as federal question jurisdiction. [doc. #2, p. 2].
On December 9, 2021, Defendants filed the instant motion to dismiss in which they claim that the Decedent had only one life insurance policy - the Coca Cola Plan. [doc. #11-1, p. 2]. Defendants argue that Plaintiff's claims should be dismissed because they are preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”). Id. at 3. Alternatively, Defendant Coca Cola argues that, although it is the policyholder under the Coca Cola Plan, it plays no role in the revision or payment of life insurance claims, and, thus, all claims against it should be dismissed with prejudice.[3] [doc. #11-1, p. 6].
Plaintiff did not file an opposition to the instant motion, despite having the opportunity to do so. Accordingly, this matter is ripe.
The Federal Rules of Civil Procedure allow dismissal for “failure to state a claim upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). To state a claim, the pleading must contain a “short and plain statement . . . showing that the pleader is entitled to relief . . .” FED. R. CIV. P. 8(a)(2). While the pleading need not assert detailed factual allegations, it must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A claim is plausible on its face “when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 663 (2009). To determine whether the plaintiff has stated a claim, the court is “limited to the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced in the complaint.”[4] Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010).
In deciding a motion to dismiss, the Court must accept as true all of the plaintiff's allegations, unless the allegation is a “threadbare recital[] of a cause of action's elements, supported by mere conclusory statements.” Id. Although legal conclusions may be asserted, “they must be supported by factual allegations” to gain the assumption of truth. Id. at 664. A well-pleaded complaint may proceed even if it strikes the Court that actual proof of the asserted facts is improbable and that recovery is unlikely. Twombly, 550 U.S. at 556. Nevertheless, the Court may dismiss a complaint “if it clearly lacks merit - for example, where there is an absence of law to support a claim of the sort made.” Thurman v. Med. Transp. Mgmt., Inc., 982 F.3d 953, 956 (5th Cir. 2020) (citations and internal quotation omitted).
Although Plaintiff failed to file an opposition to the instant motion, “[t]he mere failure to respond to a motion is not sufficient to justify a dismissal with prejudice.” Watson v. U.S. ex rel. Lerma, 285 Fed. App'x 140, 143 (5th Cir. 2008). Instead, the Fifth Circuit has held that a proper sanction for a failure to respond to a dispositive motion is for the Court to decide the motion on the papers before it. Ramsay v. Bailey, 531 F.2d 706, 709 n. 2 (5th Cir. 1976), cert denied, 429 U.S. 1107 (1977).
Congress enacted ERISA to ‘“protect . . . the interests of participants in employee benefit plans and their beneficiaries.'” Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004) (quoting 29 U.S.C. § 1001(b)). ERISA provides “a uniform regulatory regime over employee benefit plans.” Aetna, 542 U.S. at 208. This regime “includes expansive pre-emption provisions . . . which are intended to ensure that employee benefit plan regulation [is] ‘exclusively a federal concern.'” Id. (quoting Alessi v. Raybestos-Manhattan, 451 U.S. 504, 523 (1981)).
There are two types of ERISA preemption: complete preemption under ERISA § 502, 29 U.S.C. 1332 and conflict preemption under ERISA § 514, 29 U.S.C. § 1144(a). Haynes v. Prudential Health Care, 313 F.3d 330, 333 (5th Cir. 2002). In this case, Defendants assert conflict preemption, which requires the Court to determine whether the Coca Cola Plan is governed by ERISA and if it is, whether Plaintiff's state law claims “relate to” the Coca Cola Plan. Woods v. Tex. Aggregates, LLC, 459 F.3d 600, 602 (5th Cir. 2006). Because ERISA preemption is an affirmative defense, the defendant bears the burden of proof on all elements. Bank of La. v. Aetna U.S. Healthcare, Inc., 468 F.3d 237, 242 (5th Cir. 2006). If the defendant successfully shows conflict preemption, the Court should dismiss the state law claims. See Cardona v. Life Ins. Co. of N. Am., 09-CV-0833, 2009 WL 3199217, at *4 (N.D. Tex. Oct. 7, 2009).
As an initial matter, the undersigned need only determine whether the Coca Cola Plan is preempted by ERISA. In their motion to dismiss, Defendants attach what they contend is the only insurance policy issued to the Decedent. Although Plaintiff alleges “upon information and belief” that there is a second policy, she did not attach any such policy, identify it in any way, and failed to respond to Defendants' assertion that she is mistaken about the existence of a second policy. Because of her failure to respond, the undersigned finds that Plaintiff does not contest that she was mistaken as to the ReliaStar Plan and that the only policy at issue is the Coca Cola Plan. If Plaintiff does maintain the existence of the “individual” ReliaStar Plan, she will have the opportunity to file objections to this Report and Recommendation.
The first determination the Court must make is whether the plan at issue is an ERISA “employee welfare benefit plan.” See McNeil v. Time Ins. Co., 205 F.3d 179, 189 (5th Cir. 2000). A plan is an employee welfare benefit plan if it (1) exists; (2) does not fall within the safe-harbor exclusion; and (3) is established and maintained by an employer who intends to benefit employees. Id. (citing Meredith v. Time Ins. Co., 980 F.2d 352, 355 (5th Cir. 1993)).
First, a plan exists if “a reasonable person could ascertain the intended benefits, beneficiaries, source of financing, and procedures for receiving benefits.” Meredith, 980 F.2d at 355 (citing Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982)). Here, the Coca Cola Plan clearly states that the benefit is that of life insurance, and that the intended beneficiary is whomever the employee with the life insurance designated. [doc. #11-2, p. 12]. Moreover, the Coca Cola Plan sets out a clear procedure for enrolling, naming a beneficiary, and making a claim. It also sets out the amount provided in benefits and explains what additional benefits employees may elect to add. Id. at 14. Thus, the Coca Cola Plan exists.
Second a plan is not governed by ERISA if it falls under the safe-harbor exception promulgated by the Department of Labor. This exception applies if all four of the following criteria are met: (1) the employer does not contribute to the plan; (2) the participation is voluntary; (3) the employer's role is limited to collecting premiums and remitting them to the insurer; and (4) the employer receives no profit from the plan. 29 C.F.R. §§ 2510.3-1(j)(1)-(4) (1992). Here, the safe-harbor exception does not apply. While it is not entirely clear whether the second or fourth prongs apply to the Coca Cola Plan, the first and third prongs do not apply. With regard to the first prong, the Coca Cola Plan is clear that Coca Cola contributes to the plan. Part of the Decedent's benefits were basic, noncontributory benefits, which were paid for by the employer. With regard to the third...
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