United States District Court, N.D. Alabama, Northeastern Division
MEMORANDUM OPINION AND ORDER
C. BURKE UNITED STATES DISTRICT JUDGE.
Northrop Grumman Corporation (“NGC”), the
Northrop Grumman Benefits Plan Administrative Committee (the
“Committee”), and the Northrup Grumman Electronic
Systems Executive Pension Plan (“ESEPP”)
(collectively, “defendants”) have filed a partial
motion to dismiss (doc. 10) pursuant to Rule 12(b)(6) and
12(c) of the Federal Rules of Civil Procedure. Plaintiff
filed a response (doc. 17), and defendants filed a reply
(doc. 18). Therefore, this matter is ready for review. For
the reasons stated herein, the partial motion to dismiss is
brought this action pursuant to the Employment Retirement
Income Security Act of 1974, 29 U.S.C. § 1001, et
seq. (“ERISA”). Plaintiff avers that he was
employed by NGC from April 30, 1993, to October 2, 2009.
(Doc. 1, p. 1). During his employment, plaintiff became
vested in two pension plans, the ESEPP, as well as the
Northrop Grumman Electronic Systems Pension Plan
(“ESPP”). (Id.). Plaintiff states that
he has been receiving his vested pension benefit pursuant to
the ESPP in accordance with its terms. However, on April 26,
2018, plaintiff applied for benefits pursuant to the ESEPP.
(Id. at 2). Plaintiff alleges that, on July 26,
2018, he was been denied ESEPP benefits. (Id. at 2).
The ESEPP is subject to ERISA. Plaintiff asserts that he
timely made an administrative appeal of the decision with
respect to the denial of ESEPP benefits, and that, on
November 19, 2018, the Committee - the body that
administrates and operates the ESEPP - denied his
administrative appeal. (Id. at 2-3).
respect to the ESEPP specifically, plaintiff alleges that he
enrolled in the ESEPP plan on January 1, 2003, and became
vested in same on January 1, 2008. (Id. at 4).
Although it is not entirely clear to the Court, it appears
that plaintiff alleges that one or all defendants amended or
“aligned” its pension plans in July 2009, and it
is not clear whether a “special layoff provision”
was included in the ESEPP. (Id. at 5). Plaintiff
contends that the “now current” ESEPP, as updated
in 2012, supersedes all prior versions and does not preclude
plaintiff from receiving ESEPP benefits. (Id. at
5-6). Plaintiff also asserts that he is eligible for benefits
pursuant to the 2009 version of the ESEPP as well.
(Id. at 7). Plaintiff also alleges that he was fully
vested in the ESEPP at the time of his layoff in October
2009, and that, as part of his negotiated severance, he was
guaranteed that he would receive the benefit of all pensions
in which he was vested, including the ESEPP. (Id. at
6). Plaintiff claims that, to the extent any discrepancies
exist, they must be resolved in his favor.
therefore asserts the following claims. First, in Count
plaintiff asserts a claim under Section 502(a)(3) of
ERISA for the denial of benefits under the ESEPP
plan. Although the title of Count I requests both declaratory
and injunctive relief, the body of Count I only requests
injunctive relief. Therefore, the Court will assume that
Count I requests injunctive relief, including payment of
benefits, an accounting of all prior benefits due,
disgorgement of profits earned on amounts wrongfully
withheld, and injunction against further violations, among
Count II, plaintiff asserts a claim under Sections 502(a)(1)
and (3) of ERISA for the recovery, or payment, of past and
future actuarially equivalent benefits under the ESEPP.
Count III, plaintiff asserts a claim under Sections 502(a)(3)
and 1104 of ERISA for breach of fiduciary duty. In
the body of Count III, plaintiff seeks declaratory relief,
namely that the Court declare that “the Plan's
established methodologies for calculating actuarial
equivalence of Alternate Annuity Benefits violate ERISA
because they do not provide an actuarially equivalent
benefit.” (Doc. 1, p. 10). Plaintiff also seeks the
same equitable relief requested in Count I, including payment
of benefits, an accounting of all prior benefits due,
disgorgement of profits earned on amounts wrongfully
withheld, and an injunction against further violations, among
Count IV, plaintiff asserts a claim under 29 U.S.C. §
1132(a)(3), i.e., Section 502(a)(3) of ERISA, for
equitable reformation. It appears that plaintiff is alleging
that defendants did not disclose to plaintiff that he was not
vested in the ESEPP and/or continued to inform plaintiff that
he was vested; however, plaintiff also alleges a breach of
fiduciary duty by “failing to properly implement
harmonization among plans.” (Doc. 1, p. 12). Plaintiff
requests that the Court “equitably reform the ESEPP to
reflect the material terms as disclosed to the participant
and as participant reasonably understood those terms based on
the Defendants' disclosures.” (Doc. 1, p. 12).
filed the partial motion to dismiss, requesting that the
Court dismiss Counts I, III, and IV of the complaint, as well
as plaintiff's claim in Count II under Section 502(a)(3).
In other words, defendants move to dismiss all claims under
Section 502(a)(3), the catchall provision, leaving only one
claim under Section 502(a)(1)(b) to be considered in this
action. Alternatively, defendants argue that, even if the
breach of fiduciary claim in Count III was actionable under
Section 502(a)(3), it should still be dismissed because the
ESEPP is exempted from the fiduciary liability provisions
because it is a “top hat” plan. Defendants also
argue that, even if the claim for equitable reformation in
Count IV was actionable under Section 502(a)(3), it should be
dismissed because it fails to state a claim for relief. The
Court will address, as necessary, these arguments in more
detail in the discussion section of this memorandum opinion.
response, plaintiff recites the standard for a motion to
dismiss and claims that he has made a prima facie
case for each count of the complaint, namely that he has pled
his status as an employee, participant, and beneficiary, and
that he is entitled to benefits or equitable reformation.
Plaintiff does not, however, directly address the substance
of defendants' arguments.
their reply, in addition to pointing out plaintiff's
failure to address the substance of their arguments,
defendants argue that plaintiff admits that what he is
actually pursuing is a claim for benefits.
STANDARD OF REVIEW
12(b)(6) permits a party to move to dismiss a complaint for,
among other things, “failure to state a claim upon
which relief can be granted.” Fed.R.Civ.P. 12(b)(6).
When considering a motion to dismiss, the Court must
“accept the allegations in the complaint as true and
constru[e] them in the light most favorable to the
plaintiff.” Mills v. Foremost Ins. Co., 511
F.3d 1300, 1303 (11th Cir. 2008) (quoting Castro v.
Sec'y of Homeland Sec., 472 F.3d 1334, 1336 (11th
Cir. 2006)). To survive a motion to dismiss, “a
complaint must contain sufficient factual matter . . . to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). A claim is facially plausible when “the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. at 679.
“When there are well-pleaded factual allegations, a
court should assume their veracity and then determine whether
they plausibly give rise to an entitlement to relief.”