The opinion of the court was delivered by: GAGLIARDI
Plaintiff John B. Molyneux commenced this action seeking damages for severance pay which allegedly became due and was wrongfully withheld when defendant sold its interest in a wholly-owned subsidiary to an unrelated corporation. The complaint sets forth two causes of action -- one for violation of the provisions of ERISA, 29 U.S.C. §§ 1001 et seq. and the other for breach of contract. Defendant Arthur Guinness and Sons, P.L.C. ("AGS"), has moved pursuant to Rule 12(b), Fed. R. Civ. P., to dismiss the complaint on the grounds that (1) plaintiff has failed to establish in personam jurisdiction under New Yorkis "long arm" statute and (2) the complaint fails to state a claim upon which relief can be granted. Both parties have submitted affidavits and legal memoranda addressing the pending motion.
AGS is a British corporation with a number of wholly-owned subsidiaries in Britain and elsewhere. AGS does no direct business in New York. Certain of its subsidiaries, however, have done or transacted business within the state. Among those which apparently have transacted business in New York are Callard and Bowser, Nuttall Limited ("CBN"), at one time a wholly-owned subsidiary of AGS, and Callard and Bowser (USA), Inc. ("CB/USA"), at one time a subsidiary of Guinness-Harp Corporation ("Guinness-Harp"), itself a wholly-owned subsidary of AGS through an entity called Guinness Overseas, Ltd. In 1982, AGS sold all of its holdings in CBN and CB/USA to Beatrice Foods (U.K.) Limited and Beatrice Foods Co. (jointly "Beatrice").
Molyneux is a businessman who from 1957 until 1982 was directly employed by various AGS subsidiaries. In 1964, Molyneux relocated from Britain to the United States. Since that time, Molyneux's work has been centered in the U.S. In 1978, under circumstances which are disputed, he moved from employment with Guinness-Harp to employment with CBN. Then, in 1980, he moved from CBN to CB/USA. He remained with CB/USA as its President through the time of the sale of AGS's holdings in CBN and CB/USA to Beatrice. Molyneux's position was unaffected by the sale; he continued to work for Beatrice.
The dispute in this case concerns an alleged policy (or contract) of AGS itself to pay severance benefits to employees of AGS and AGS subsidiaries when they are terminated for reasons beyond their control, benefits which are based on an employee's total length of service with AGS and AGS subsidiaries. Molyneux claims that he is entitled to such benefits, as a matter of federal law under ERISA and as a matter of contract, because the sale of stock to Beatrice effectively concluded Molyneux's association with AGS, and "triggered" the severance pay provisions. AGS claims that at the relevant times any severance pay policies were maintained not by AGS but by the subsidiaries themselves, that AGS exercised at most a general guidance over such policies, that divestiture or transfer of ownership would not trigger any severance pay policy, and that no payments have ever been made by AGS or AGS subsidiaries to an AGS subsidiary employee where the subsidiary has been divested and the employee has retained his job under the new ownership.
AGS was served with process by mail to its corporate operation in London, apparently pursuant to Rule 4 (i), Fed. R. Civ. P. Defendant contests personal jurisdiction, however, on the ground that AGS exercises insufficient control over its subsidiaries to justify application of New York's "long arm" statute. AGS has not raised the question of subject matter jurisdiction. The complaint grounds federal jurisdiction on the provisions of 28 U.S.C. § 1331 ("federal question") and 29 U.S.C. § 1132 (ERISA), and on the principle of pendent jurisdiction.
Based on the present record, the court does not find subject matter jurisdiction to decide the claims raised by the complaint.
The complaint does not state a cause of action under ERISA. No reason appears why the court should exercise pendent jurisdiction over the contract claim. Accordingly, the complaint is dismissed without consideration of the issue of personal Jurisdiction.
I. Federal Question Jurisdiction
To maintain an action in federal court, the plaintiff must allege facts which, if taken as true, are sufficient to support federal jurisdiction over the claims. It is the duty of the court to consider the issue of subject matter jurisdiction, even if not raised by the parties.
In this case, plaintiff asserts that federal question jurisdiction exists based on the ERISA claim. Disputes concerning severance pay may, but do not necessarily, implicate ERISA and support federal jurisdiction. To establish federal jurisdiction, the complaint must allege such facts as will show the establishment or maintenance of a "plan, fund, or program" of the type covered by ERISA. See Donovan v. Dillingham, 688 F.2d 1367, 1369-70 (11th Cir. 1982) (en banc) (health insurance benefits).
The complaint places the conclusory label of "policy or plan" on prior payments of severance benefits by AGS, but does not state facts which would justify a court in concluding that a "plan, fund, or program" exists. Although One need not allege the existence of a formal written plan to establish federal question jurisdiction, the fact that in the past severance benefits may have been extended, or that there have been decisions to extend such benefits, is not sufficient to show establishment of a plan or program. See Donovan v. Dillingham, supra, 688 F.2d at 1373 (informal "plan" providing health benefits established where employer obtained group health insurance policy "to furnish specified insurance benefits" to class of employees). To show "establishment," the surrounding circumstances must be such that "a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits." Donovan v. Dillingham, supra, 688 F.2d at 1373; see also Roe v. General American Life Ins. Co., 712 F.2d 450 (10th Cir. 1983); Blue Cross v. Peacock's Apothecary, Inc., 567 F. Supp. 1258, 1267 (N.D. Ala. 1983) (citing Donovan); California Hosp. Assn. v. Henning, 569 F. Supp. 1544 (C.D. Cal. 1983) (citing Donovan). In this case, the complaint alleges little more than that "plaintiff was aware of the company's benefit plans," that Molyneux was offered a choice of severance payment or transfer to CBN in 1978 when his position at Guinness-Harp became redundant, and that the possibility of a termination payment was mentioned in the letter agreement under which he accepted employment with CBN and was "not denied" when later raised with the managing director of CBN and a personnel director affiliated with AGS.