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Garson v. Hvac Corp.

November 8, 2010

BARBARA GARSON, PLAINTIFF,
v.
HVAC CORPORATION, INC., STEPHEN FOX, AND YISHAI KEDAR, DEFENDANTS.



The opinion of the court was delivered by: DuBOIS, J.

MEMORANDUM

I. INTRODUCTION

Plaintiff Barbara Garson filed a Complaint under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. against HVAC Corporation, Inc., ("HVAC") and two managers, Stephen Fox and Yishai Kedar ("defendant managers"), employed by HVAC. Defendants have moved to dismiss the Complaint, arguing that plaintiff has not pled a violation of ERISA Section 510 and that defendants Fox and Kedar are not proper parties to this action. (Mot. to Dismiss at 4-6.) For the reasons that follow, defendants' Motion to Dismiss is denied.

II. BACKGROUND

Plaintiff was employed by HVAC for approximately seven years and for the relevant portions of her employment was insured under HVAC's group health insurance plan. (Pl.'s Compl. at ¶¶ 11-12, 14.) Towards the end of her employment with HVAC, plaintiff was undergoing treatment for high blood pressure and other medical conditions and began making more frequent use of her health care benefits. (Id. at ¶¶ 15-16.)

Plaintiff avers that, as a result of this increased use of her health care benefits, defendant managers initiated a discussion of her use of the group health plan, complained that she was costing the company too much money, and informed her that she was no longer eligible for health insurance through HVAC. (Id. at ¶¶ 17-18.) Plaintiff worked for a short period without health insurance, during which time she learned that other employees and even some non-employees were being offered access to HVAC's group health plan. (Id. at ¶ 19.) During this period and in response to defendants' inquiries regarding her use of benefits and cost to HVAC, plaintiff told defendant managers that she had discovered defendants were partaking in selective allocation of health insurance benefits amongst HVAC's employees and providing benefits to non-employees. (Id. at ¶ 20.) Shortly after this confrontation, defendants terminated plaintiff's employment. (Id. at ¶ 22.)

Plaintiff claims that defendant managers made both the decision to exclude plaintiff from HVAC's group health plan and the subsequent decision to terminate her employment. (Id. at ¶ 23.) She alleges further that defendants excluded her from health care coverage because of her use of those benefits and that both her use of benefits and her complaints about discriminatory treatment under ERISA were motivating factors in the decision to terminate her employment. (Id. at ¶¶ 26-30.)

Defendants have moved to dismiss plaintiff's complaint on two grounds. First, defendants contend that under the Third Circuit's decision in Edwards v. A.H. Cornell and Son, Inc., 610 F.3d 217 (3d Cir. 2010), plaintiff has not plead a cognizable violation of ERISA Section 510, 29 U.S.C. § 1140. (Mot. to Dismiss Pl.'s First Am. Compl. at 4-6.) Second, defendants argue that even if plaintiff has a cognizable claim under ERISA, defendants Fox and Kedar are not appropriate parties because Section 510 claims can only be brought against a person's employer. (Id. at 6.)

III. LEGAL STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides that, in response to a pleading, a defense of "failure to state a claim upon which relief can be granted" may be raised by motion. "To survive a motion to dismiss, a civil plaintiff must allege facts that 'raise a right to relief above the speculative level . . . .'" Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). 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. __, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). To satisfy the plausibility standard, a plaintiff's allegations must show that defendant's liability is more than "a sheer possibility." Id. "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557).

In Twombly, the Supreme Court utilized a "two-pronged approach" which it later formalized in Iqbal. Iqbal, 129 S.Ct. at 1950; Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Under this approach, a district court first identifies those factual allegations which constitute nothing more than "legal conclusions" or "naked assertions." Twombly, 550 U.S. at 555, 557. Such allegations are "not entitled to the assumption of truth" and must be disregarded. Iqbal, 129 S.Ct. at 1950. The court then assesses "the 'nub' of the plaintiff['s] complaint -- the well-pleaded, nonconclusory factual allegation[s] . . . to determine" whether it states a plausible claim for relief. Id.

IV. Section 510's Whistleblower Protection Provision and Internal Complaints

Defendants argue that under the Third Circuit's recent decision in Edwards, 610 F.3d 217, plaintiff has not plead a cognizable violation of ERISA Section 510, 29 U.S.C. ยง 1140. ...


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