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Dixon v. Washington

United States District Court, E.D. Pennsylvania

August 7, 2019



          Baylson, J.

         This is the second occasion this Court has had to evaluate the plausibility of the claim of Plaintiffs, congregants and former congregants, against their former pastor and others for breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 (“ERISA”). Defendants now move to dismiss Plaintiffs' Third Amended Complaint. Because the Court has previously outlined the factual background of this case in a prior memorandum (ECF 6), it refrains from doing so a second time. For the reasons that follow, Defendants' Motion is granted.

         I. Procedural History

         Plaintiffs filed their original complaint in July 2018. (ECF 1.) In October 2018, the Court granted without prejudice Defendants' Motion to Dismiss, permitting amendment solely with regard to Plaintiffs' ERISA claims. (ECF 7.) Plaintiffs filed an Amended Complaint on November 6, 2018 (ECF 9), and Defendants moved to dismiss, alleging that Plaintiffs do not have standing under ERISA to bring their claim. (ECF 10.) Plaintiffs filed a Motion for Leave to File a Second Amended Complaint on December 19, 2018 (ECF 13), which the Court granted (ECF 20), although the Court requested a supplemental brief explaining how Plaintiffs have standing to sue under ERISA. (ECF 15.)[1]

         On April 18, 2019, the Court ordered minimal discovery on the issue of whether Plaintiffs have standing to sue under ERISA. (ECF 20.) Five days later, Defendants filed a Motion to Dismiss the Second Amended Complaint. (Mot., ECF 21.) Plaintiffs responded on June 10, 2019. (Resp., ECF 22.)

         The Court held oral argument on June 11, 2019, and after it was apparent that Plaintiffs' counsel did not receive the limited ERISA standing-related discovery until the day before the hearing, the Court permitted Plaintiffs to file a supplemental legal memorandum in response to the Motion to Dismiss the Second Amended Complaint. (ECF 23.) Plaintiffs filed a supplemental response on July 3, 2019. (Suppl. Resp., ECF 26.) On the same day, Plaintiffs filed a Motion to Compel (ECF 27) and a Motion for Leave to File a Third Amended Complaint (ECF 28.) The Court granted Plaintiffs' Motion to Compel. (ECF 29.) On July 18, 2019 Defendants filed a reply brief to its Motion to Dismiss (Reply, ECF 30), and a day later filed a response in opposition to Plaintiffs' Motion for Leave to file a Third Amended Complaint (ECF 31).[2]

         II. Legal Standard

         In ruling on a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the Court must first determine whether the defendants allege a facial or factual deficiency. CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008). A facial attack “concerns ‘an alleged pleading deficiency,' whereas a factual attack concerns ‘the actual failure of a plaintiff's claim to comport factually with the jurisdictional prerequisites.'” Id. (citing U.S. ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir. 2007)). A facial attack looks to whether “the allegations on the face of the complaint, taken as true, allege facts sufficient to invoke the jurisdiction of the district court.” Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006) (quoting Turicentro, S.A. v. Am. Airlines Inc., 303 F.3d 293, 300 (3d Cir. 2002)). Conversely, a factual attack looks to whether the court “in fact lacks subject matter jurisdiction, no matter what the complaint alleges.” NE Hub Partners, L.P. v. CNG Transmission Corp., 239 F.3d 333, 341 n. 7 (3d Cir. 2001). Where a Rule 12(b)(1) motion alleges sufficient factual allegations to establish standing, it is “properly understood as [a] facial attack[].” In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012).

         Defendants' central argument here is that Plaintiffs lack statutory standing under the ERISA statute. “A motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter.” In re Schering, 678 F.3d at 243 (quoting Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007)). However, “[i]n evaluating whether a complaint adequately pleads the elements of standing, courts apply the standard of reviewing a complaint pursuant to a Rule 12(b)(6) motion to dismiss for failure to state a claim: ‘Courts must accept as true all material allegations set forth in the complaint, and must construe those facts in favor of the nonmoving party.'” Id. (quoting Ballentine, 486 F.3d at 810). Accordingly, the Court evaluates Defendants' standing arguments under the 12(b)(6) standard.

         In considering a motion to dismiss under Rule 12(b)(6), “we accept all factual allegations as true [and] construe the complaint in the light most favorable to the plaintiff.” Warren Gen. Hosp. v. Amgen, Inc., 643 F.3d 77, 84 (3d Cir. 2011) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir. 2002)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). However, the Court in Iqbal does explain that while factual allegations must be treated as true, legal conclusions must not. 556 U.S. at 678. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555).

         III. Discussion

         A. Plaintiffs have not alleged that there was an ERISA plan

         ERISA establishes standards that apply to retirement and health benefits plans. The ERISA statute defines “employee welfare plan” as

any plan, fund or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such a plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or training programs, or day care centers, scholarship funds, or prepaid legal services, ...

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