Thompson v. Oracle Corp.
| Decision Date | 10 December 2021 |
| Docket Number | Case No. 4:21-cv-00026-YGR |
| Parties | Elisa THOMPSON, Plaintiff, v. ORACLE CORPORATION, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Glenn R. Kantor, Anna M. Martin, Kantor & Kantor, LLP, Northridge, CA, for Plaintiff.
Timothy James Nally, Lewis Brisbois Bisgaard and Smith, Sacramento, CA, for Defendants Oracle Corporation, Oracle America, Inc., Oracle Corporation Long Term Disability Plan.
Jordan S. Altura, Rebecca A. Hull, Gordon Rees Scully Mansukhani, LLP, San Francisco, CA, for Defendant Hartford Life and Accident Insurance Company.
Yvonne Gonzalez Rogers, United States District Judge Plaintiff Elisa Thompson brings this action against defendants Oracle Corporation, Oracle America, Inc., Oracle Corporation Long Term Disability Plan (collectively, "Oracle defendants"), and Hartford Life & Accident Insurance Company. Plaintiff asserts seven causes of action: (1) breach of employment contract, (2) promissory estoppel, (3) fraudulent misrepresentation, (4) negligent misrepresentation, (5) elder abuse, (6) benefits and enforcement and clarification of rights under the Employee Retirement Income Security Act ("ERISA"), and (7) breach of fiduciary duty. (See Dkt. No. 39) ("Complaint" or "Compl.").
Now before the Court is Oracle defendants’ motion to dismiss all causes of action. (See Dkt. No. 43-1.) Having carefully reviewed the record, the papers submitted on the motion, and for the reasons set forth more fully below, the Court GRANTS IN PART AND DENIES IN PART the motion to dismiss.
Plaintiff was hired in 2000 by Sun Microsystems, Inc. During that time, plaintiff negotiated her job offer and received a letter from Sun Microsystems that reflected that Sun Microsystems was offering "a long term disability benefit with a lifetime benefit period." (Compl., Ex. 1.) This concern for lifetime long term disability benefit came from a concern over a childhood disability resurfacing later in life. Plaintiff chose Sun Microsystems over Intel specifically in part because of this offer letter and the guarantee of a lifetime benefit period for long term disability insurance. Effective 2001, however, the long term disability plan ("LTD plan" or "the plan") that Sun Microsystems enrolled into changed its policies to one where an individual who is disabled before age 60 will have long term disability insurance terminate at age 65. In summer 2001, plaintiff was involved in an accident where she became permanently disabled. Later, Oracle Corporation acquired Sun Microsystems (as well as its obligations). Plaintiff received benefits until she turned 65 in 2020, at which point she was denied claims under the plan.
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the claims alleged in the complaint. Ileto v. Glock Inc. , 349 F.3d 1191, 1199–1200 (9th Cir. 2003). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't , 901 F.2d 696, 699 (9th Cir. 1988). All allegations of material fact are taken as true and construed in the light most favorable to the plaintiffs. Johnson v. Lucent Techs. , Inc., 653 F.3d 1000, 1010 (9th Cir. 2011). To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). This "facial plausibility" standard requires the plaintiffs to allege facts that add up to "more than a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. While courts do not require "heightened fact pleading of specifics," plaintiffs must allege facts sufficient to "raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. "[A] plaintiff's obligation to provide the ‘grounds’ of this ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id.
In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court must assume that the plaintiff's allegations are true and must draw all reasonable inferences in the plaintiff's favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court is not required to accept as true "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
The Oracle defendants argue that the Court should dismiss plaintiff's breach of contract and promissory estoppel claims because: (1) the claims are preempted under ERISA; (2) they are time-barred under the statute of limitations; (3) the alleged promise to pay lifetime disability benefits was too indefinite to be the basis of a binding contract; and (4) the promise was too unclear and ambiguous to be the basis of a promissory estoppel claim. The Court discusses each.
The Court first considers whether plaintiff's breach of contract and promissory estoppel claims are preempted under ERISA. ERISA Section 514(a) expressly preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan[.]" 29 U.S.C. § 1144(a). "While this section suggests that the phrase ‘relate to’ should be read broadly, the Supreme Court has recently admonished that the term is to be read practically, with an eye toward the action's actual relationship to the subject plan." Providence Health Plan v. McDowell , 385 F.3d 1168, 1172 (9th Cir. 2004) (citing New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. , 514 U.S. 645, 655-56, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995) ). However, although ERISA preemption is broad, the Supreme Court has cautioned that courts "must go beyond the unhelpful text and the frustrating difficulty of defining its key term, and look instead to the objectives of the ERISA statute as a guide to the scope of [preemption]." New York State Conference of Blue Cross & Blue Shield Plans , 514 U.S. at 645, 115 S.Ct. 1671. "Generally speaking, a common law claim ‘relates to’ an employee benefit plan governed by ERISA ‘if it has a connection with or reference to such a plan.’ " Id. (citation omitted). Id. (citations omitted).
Here, the Oracle defendants rely on Devoll v. Burdick Painting , 35 F.3d 408, 412 (9th Cir. 1994) to argue that ERISA's preemptive sweep includes state law claims based on an employer's breach of an alleged promise to provide certain benefits. However, Devoll was decided a year before the Supreme Court's decision in New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995), which the Ninth Circuit later described as a move "away from a literal reading of ‘relate to,’ towards a more narrow interpretation of the phrase and its preemptive scope." Graham v. Balcor Co. , 146 F.3d 1052, 1054 (9th Cir. 1998). The Ninth Circuit's decision in Graham is instructive.
In Graham , an employee received an unfavorable performance review and faced termination. Id. at 1054–55. After contesting the review and threatening litigation, the employee entered into an agreement with her employer whereby the employee promised not to pursue litigation in exchange for continued health care benefits through the employer's plan. Id. Five years after the parties entered in the agreement, the employer terminated the plaintiff's benefits. Id. at 1055. Plaintiff sued for breach of contract, breach of the covenant of good faith and fair dealing, and intentional infliction of emotional distress. Id. The Ninth Circuit held that the plaintiff's state law claims were not preempted because the agreement "was a settlement of legal claims which does not relate to an employee benefit plan." Id. The court further found that the agreement "did not arise in the course of [defendant's] administration of its employee benefit plan" and Id.
As in Graham , plaintiff's breach of contract and promissory estoppel claims are based on plaintiff's separate employment contract and does not depend on the existence or terms of an ERISA plan. The complaint alleges that plaintiff entered into an employment agreement that promised plaintiff lifetime disability benefits. (Compl. ¶¶ 26-30, Ex. 1.) Thus, the representations made in plaintiff's offer letter regarding lifetime benefits are independent and distinct from the ERISA policy and administration of the plan. Thus, the Court finds that plaintiff's claims for breach of contract and promissory estoppel are not preempted under ERISA.
Accordingly, the Court DENIES the motion on this ground.
Having concluded that plaintiff's breach of contract and promissory estoppel claims are not preempted under ERISA, the Court now considers whether the claims are timely.
Under California law, the statute of limitations for breach of a written contract is four years. Cal. Civ. Proc. Code § 337(1). A breach of contract claim generally accrues at the time...
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