White v. Coca-Cola Co.
| Decision Date | 02 August 2007 |
| Docket Number | CIV. A. No. 1:06-CV-1118-ODE. |
| Citation | 514 F.Supp.2d 1353 |
| Parties | Frankie WHITE and Leon Warner, individually and on behalf of all others similarly situated, Plaintiffs, v. THE COCA-COLA COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Georgia |
Kenneth Behrman, Lenner, Schatten & Behrman, LLC, Atlanta, GA, for Plaintiffs.
Darren A. Shuler, David Tetrick, Jr., Joseph P. Rockers, King & Spalding, LLP, Atlanta, GA, for Defendant.
This putative class action has been brought by individual Plaintiffs, Frankie White and Leon Warner, against The Coca-Cola Company ("Coca-Cola"). White and Warner seek to recover long term disability benefits under an employee welfare benefit plan, sponsored by their employer, Coca-Cola, and governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). The case is presently before the Court on Plaintiff White's Motion for Partial Summary Judgment [Doc. 17], Defendant the Coca-Cola Company's Cross Motion for Summary Judgment on All of Plaintiffs' Claims [Doc. 20], Plaintiffs' Motion and Brief to Compel Discovery [Doc. 23], Plaintiffs' Motion and Brief in Support of Class Certification [Doc. 24], and Defendant the Coca-Cola Company's Motion for Leave to File Supplemental Motion for Summary Judgment on Plaintiff Leon Warner's Claims [Doc. 34].
For the following reasons, Plaintiff White's Motion for Partial Summary Judgment [Doc. 17] is DENIED, Defendant's Motion for Summary Judgment [Doc. 20] is GRANTED, Plaintiff's Motion to Compel [Doc. 23] is DENIED, Plaintiffs' Motion for Class Certification [Doc. 24] is DISMISSED AS MOOT, and Defendant's Motion for Leave [Doc. 34] is DISMISSED AS MOOT.
Unless otherwise noted, the following facts are undisputed.
Coca-Cola is the Sponsor and Administrator of the Long Term Disability Plan of The Coca-Cola Company ("Plan"). Pursuant to the Plan document, Coca-Cola delegated certain of its powers as Plan Administrator to the Long Term Disability Income Plan Committee, which was dissolved effective January 1, 2003, and replaced by The Coca-Cola Company Benefits Committee ("Committee"). The Plan document grants the Committee exclusive responsibility and final discretionary authority "to construe the Plan and decide all questions arising under the Plan." [Plan Doc. § 7.2(b)(2)]. Specifically, the Committee is given the authority "to determine the eligibility of Participants to receive benefits and the amount of benefits to which any Participant may be entitled under the Plan." Id. at § 7.2(b)(3).
According to Coca-Cola, plan participants with Disability Dates prior to January 1, 2003 are paid from the Trust Forming a Part of the Coca-Cola Company Long Term Disability Income Plan ("Trust"), which is funded by periodic, irrevocable payments. Coca-Cola claims that these plan participants are not, and have never been, paid from Coca-Cola's general assets. The Trust qualifies as a Voluntary Employees' Beneficiary Association ("VEBA") under Internal Revenue Code § 501(c)(9). However, filings with the IRS from 2003 and 2004 reflect that funds for disability claims are also paid out of general assets.
Pursuant to the Plan, the default monthly benefit is equal to 60% of the participant's Average Compensation, which is defined by the Plan. The Plan provides an offset for participants who also receive Social Security disability insurance ("SSDI") benefits. Specifically, § 4.2 of the Plan document, entitled "Offset for Other Disability Benefits" ("Offset Provision") states that:
The monthly Disability benefit payable from this Plan to the Participant who receives disability benefits from any source described in Subsection (b) [including Social Security disability benefits] will be reduced as necessary so that the total of his monthly Disability Benefit from this Plan equals no more than the following amount:
(1) 70 percent of his Average Compensation .. ., minus
(2) the amount of his monthly disability benefits payable from all other sources;
provided that the difference will not exceed 60 percent of his Average Compensation as limited by the $200,000 (indexed) limitation described in Section 1.4; and provided further that the offset for other disability benefits will not serve to reduce the Disability Benefit under this Plan to an amount less than 60 percent of the Participant's Average Compensation as limited.
[Plan Doc. § 4.2(a)]. The Summary Plan Description ("SPD") for the Plan provides the following example of the operation of the Offset Provision:
LTD payment example
Suppose your basic monthly pay for disability
purposes is $3,000 and you do not receive benefits
from other sources
Here's how your LTD payment is figured
$ 3,000 Basic monthly pay before disability
× 60% Maximum LTD pay replacement
percentage
--------
$ 1,800 Maximum monthly benefit from the
LTD plan If you begin receiving a
$750 in monthly Social Security
disability payments, your LTD benefit
will be reduced as follows
$ 3,000 Basic monthly pay before disability
× 70% Maximum pay replacement percentage
from all sources
--------
$ 2,100 Total amount of your pay to be
replaced by all sources
- [$]750 Monthly Social Security disability
payment
$ 1,350 Actual monthly benefit from the LTD
plan
As the above example shows, the LTD Plan
works with Social Security disability payments to
bring your monthly income to 70% of your basic
monthly pay
***
Since the LTD Plan benefit combined with other
sources of LTD benefits cannot exceed 70% of
your basic monthly earnings, the LTD plan benefit
would be reduced as necessary
[Long Term Disability Summary Plan Description1 at 4].
With respect to SSDI benefits, § 3.4(d) of the Plan document provides that disability payments from the Plan will cease if the SSDI benefits "equal[] or exceed[] 70 percent of [the Participant's] Average Compensation." The SPD states, in a subsection titled "When benefits stop," that "[i]f the income you receive from Social Security ... or other sources of disability benefits is equal to or more than 70% of your basic monthly earnings, payments from the ... [P]lan will end." [SPD at 7].
The Plan document states that, "[i]f the Participant receives a retroactive payment of a disability benefit ..., the benefit will be considered to have been paid throughout the period for which it is payable." . Furthermore § 4.2(e) of the Plan ("Recoupment Provision") provides that, "[a]ny overpayment of Disability Benefits arising under Subsection ... (d) will be deducted from the Participant's future payments [from the Plan]." The SPD also addresses the issues of overpayment and retroactive benefits. First, [SPD at 5]. Finally, the SPD states that, "[i]f any other benefits coordinated with LTD benefits are awarded retroactively, they will be treated as having been received by you during the entire time period for which such benefits were payable and any overpayment of any program benefits will be calculated accordingly." Id. at 14.
White became disabled in 1999 and received long term disability benefits pursuant to the Plan from August 1999 through July 2004. White's benefits totaled $1720.15 per month, which equaled 60% of hiss Average Compensation. On July 31, 2004, Liberty Life Assurance Company of Boston ("Liberty Life"), the Plan's administrative services provider, terminated White's disability benefits. White disputed the termination of his benefits through the administrative appeals process and, in November 2005, White's benefits were reinstated retroactive to July 30, 2004 by the Committee.
In July 2005, while his administrative appeal was ongoing, White was approved for SSDI benefits by the Social Security Administration in an amount of $1442.10 per month, retroactive to November 2001. In order to pay his retroactive benefits, White was given a lump sum award of $38,124.90 in SSDI benefits. Coca-Cola learned of the Social Security benefits in August 2005.
Upon resuming monthly benefit payments to White, Liberty Life applied the Offset Provision and reduced his payments to 70% of his Average Compensation ($2,006.85) minus his monthly SSDI benefits ($1442.00). Accordingly, White's monthly benefit from the plan was $564.85. Liberty Life also applied the Recoupment Provision to recover what it claimed were overpayments of Plan benefits for the period of time during which White received 60% of his Average Compensation, instead of 70% of Average Compensation minus the retroactive SSDI benefits. These alleged overpayments equaled $1,155.30 per month, for a total of $38,124.90 over the 33-month period covered by the retroactive SSDI award. The amount was reduced by $5,300 in attorney's fees that White was awarded in his SSDI letter, leaving a total alleged overpayment of $32,824.90 in Plan benefits. Liberty Life began recovering the overpayment by reducing White's monthly benefits by approximately $500 per month, and planned to do so for approximately 60 months.
White submitted a written appeal of the application of the Offset Provision and the Recoupment Provision directly to the Committee. On appeal, White argued that the last clause ("Proviso Clause") at the end of Offset Provision, which states, "provided further that the offset for other disability benefits will not serve to reduce the Disability...
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..."Numerous courts have approved of the recoupment of retroactive [Social Security disability] awards." White v. Coca-Cola Co. , 514 F. Supp. 2d 1353, 1372 (N.D. Ga. 2007) (gathering cases), aff'd , 542 F.3d 848 (11th Cir. 2008). Nor has this practice been limited to the recoupment of Social ......
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...was neither the denial of a claim nor the termination of plan benefits. 109 F. Supp. 2d at 864. See also White v. Coca-Cola Co., 514 F. Supp. 2d 1353, 1366 (N.D. Ga. 2007) (same, citing Butler). Other courts, however, have found the reasoning in Butler and its progeny unpersuasive, noting t......