Van Natta v. Sara Lee Corp.
Decision Date | 29 June 2006 |
Docket Number | No. C05-4151-MWB.,C05-4151-MWB. |
Citation | 439 F.Supp.2d 911 |
Parties | David VAN NATTA and Jean Van Natta, f/k/a Jean McDonald, Plaintiffs, v. SARA LEE CORPORATION, Defendant. |
Court | U.S. District Court — Northern District of Iowa |
Ryan Russell Kolpin, Kolpin Law Firm PC, Aurelia, IA, for Plaintiffs.
Diane Kutzko, Shuttleworth & Ingersoll, Cedar Rapids, IA, Michael T. Graham, McDermott Will & Emery LLP, Chicago, IL, for Defendant.
This controversy requires this court to descend into the Serbonian bog1 that has been created by the Employee Retirement Income Security Act (ERISA)'s remedial scheme. In its motion to dismiss, the defendant-employer seeks to dismiss the plaintiffs' claims on the grounds that their state law causes of action are preempted by ERISA and the plaintiffs' purported failure to state a claim under such. The plaintiffs have resisted, not surprisingly, because if their state-law claims are preempted, they are entitled only to the meager, and often inadequate in the eyes of this court, compensation provided for under ERISA. Thus, this court is called upon to decide whether the plaintiffs' claims are governed by, what at least one Supreme Court Justice has described as, an "unjust and increasingly tangled ERISA regime," whereby " Tvlirtually all state law remedies are preempted but very few federal substitutes are provided.'"2
A. Procedural Background
On October 31, 2005, David Van Natta and Jean Van Natta (collectively, the "Van Nattas") filed a complaint against Sara Lee Corporation ("Sara Lee") in the Iowa District Court in and for Buena Vista County. In their complaint, the Van Nattas alleged Sara Lee wrongfully denied Mrs. Jean Van Natta eligibility for and coverage of certain health care benefits under the Sara Lee Corporation Employee Health Benefit Plan (the "Plan"). Specifically, the Van Nattas asserted causes of action under Iowa state common law for bad faith breach of contract and Iowa Code Chapter 507B, Iowa's statute regulating insurance trade practices. On December 16, 2005, Sara Lee removed this action to federal district court, asserting this court had federal question jurisdiction pursuant to 28 U.S.C. § 1331 because the Van Nattas' complaint implicated rights that arose exclusively under ERISA. Subsequent to the removal of this action, on December 22, 2005, Sara Lee filed a Motion To Dismiss the plaintiffs' complaint (Doc. No. 6). In its motion, Sara Lee alleged the Van Nattas' state law claims were completely preempted by ERISA, and that the Van Nattas had failed to state a claim upon which relief could be granted under ERISA. Specifically, Sara Lee argued the Van Nattas failed to plead that they exhausted the administrative claim remedies under the Plan. On February 28, 2006, the Van Nattas filed their Resistance To Defendant's Motion To Dismiss (Doc. No. 12). The Van Nattas argued their claims should not be dismissed for failure to exhaust administrative remedies under the Plan because questions of fact existed as to whether such remedies were properly exhausted. In addition, the Van Nattas averred Sara Lee waived its exhaustion defense by failing to notify the Van Nattas of the claims procedures. On this same day, however, the Van Nattas filed a Motion For Extension Of Time To Obtain New Counsel And Extension Of Time To File Motion To Dismiss (Doc. No. 13). In this motion, the Van Nattas requested additional time to file a response on the basis of their need to obtain new counsel because their original attorney lacked experience in federal court and did not wish to prejudice the Van Nattas by his continued representation. This court granted the Van Nattas' request on March 1, 2006 (Doc. No. 14). On April 3, 2006, the Van Nattas filed their Resistance To Motion To Dismiss Complaint (Doc. No. 15). However, the Van Nattas' April 3, 2006, resistance indicated they were unable to obtain new counsel and that they sought to stand on their original, February 28, 2006, resistance. The defendant thereafter filed its Reply Brief In Support Of Its Motion To Dismiss Complaint on April 7, 2006 (Doc. No. 16).
B. Factual Background
As will be discussed more fully below, on a motion to dismiss, the court must assume all facts alleged in the Van Nattas' complaint are true and must liberally construe the allegations encompassed therein. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Consequently, the following factual background is drawn from the Van Nattas' complaint in such a manner.
On September 20, 2004, David Van Natta commenced employment at Sara Lee Corporation's Storm Lake facility. On this same date, David Van Natta elected group health care coverage under the Sara Lee Corporation Employee Health Benefit Plan for himself and his common law spouse, Jean Van Natta, formerly known as Jean McDonald. At the time of his election, certain representatives of the defendant represented that Jean Van Natta, as a common law spouse, would be covered under the health insurance policy. Following the standard thirty-day waiting period, Sara Lee began deducting the costs of the family health insurance policy out of David Van Natta's paycheck. On November 4, 2004, Jean Van Natta sustained injuries in an accident, which required medical treatment. Sara Lee refused to pay for certain costs incurred by the Van Nattas as a result of Jean Van Natta's accident because she did not satisfy the definition of a "spouse" or "dependent" under the Plan.
The issue on a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted is not whether a plaintiff will ultimately prevail, but whether the plaintiff is entitled to offer evidence in support of his, her, or its claims. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), abrogated on other grounds by Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982); United States v. Aceto Agric. Chems. Corp., 872 F.2d 1373, 1376 (8th Cir.1989). As alluded to previously, in considering a motion to dismiss under Rule 12(b)(6), the court must assume that all facts alleged by the complaining party are true, and must liberally construe those allegations. See Conley, 355 U.S. at 45-46, 78 S.Ct. 99; Gross v. Weber, 186 F.3d 1089, 1090 (8th Cir.1999) (); St. Croix Waterway Ass'n v. Meyer, 178 F.3d 515, 519 (8th Cir.1999) (); Gordon v. Hansen, 168 F.3d 1109, 1113 (8th Cir.1999) (); Midwestern Mach., Inc. v. Northwest Airlines, Inc., 167 F.3d 439, 441 (8th Cir.1999) (); Wisdom v. First Midwest Bank, 167 F.3d 402, 405 (8th Cir. 1999) () (citing Duffy v. Landberg, 133 F.3d 1120, 1122 (8th Cir.1998)); Doe v. Norwest Bank Minn., N.A., 107 F.3d 1297, 1303-04 (8th Cir.1997) () (quoting Coleman v. Watt, 40 F.3d 255, 258 (8th Cir.1994)); WMX Techs., Inc. v. Gasconade County, Mo., 105 F.3d 1195, 1198 (8th Cir.1997) (). The court is mindful that, in treating the factual allegations of a complaint as true pursuant to Rule 12(b)(6), the court must "reject conclusory allegations of law and unwarranted inferences." Silver v. H & R Block, Inc., 105 F.3d 394, 397 (8th Cir.1997) (citing In re Syntex Corp. Sec. Litig., 95 F.3d 922, 926 (9th Cir.1996)); see Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir.1990) (...
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