The opinion of the court was delivered by: McMAHON, District Judge.
MEMORANDUM ORDER DENYING PLAINTIFFS' MOTION TO AMEND THE
In their original complaint filed on March 7, 1997,
Plaintiffs, former driver-distributors for Defendants' baked
goods, alleged a variety of state and federal claims, including
three separate fiduciary duty breaches under ERISA. Plaintiffs
alleged that pursuant to § 502(a) of ERISA, 29 U.S.C. § 1132(a),
they were beneficiaries of Bestfoods' ERISA plans, and that
Bestfoods breached its duty to them through its failure to allow
the Plaintiffs to participate and receive benefits from those
plans, as written. Specifically, the complaint alleged that
Bestfoods: (1) failed to discharge its duties with respect to
the plans solely in the interest of Plaintiffs as required under
ERISA § 404(a)(1)(A); (2) failed to discharge its duties in a
prudent manner as required under ERISA § 404(a)(1)(B); (3)
engaged in self-dealing, in violation of ERISA § 406(b)(1); and,
(4) used plan assets for its own benefit, in violation of ERISA
§ 406(a)(1)(D). (Cplt. ¶¶ 35-39.) Further, Plaintiffs alleged
that Bestfoods violated the provisions of ERISA § 510 by
deliberately interfering with Plaintiffs' attainment of benefits
under its ERISA plans. (Id. at ¶ 39.)
In two separate opinions, Judge Jones of this Court dismissed
all the state and federal claims, including the ERISA claims and
a common law claim of negligent misrepresentation, and granted
Defendants summary judgment on three breach of contract claims.
See Smith, et al. v. CPC Int'l Inc., et al., 1998 WL 50204
(S.D.N.Y. Feb. 6, 1998); Smith, et al v. CPC Int'l Inc., et
al., 1998 WL 85863 (S.D.N.Y. Feb. 27, 1998). Plaintiffs
appealed. The Second Circuit affirmed all of Judge Jones'
rulings but dismissal of the breach of contract claims. Thus, on
remand to this Court, the sole issue to be decided is whether
Defendant has shown "good cause" to terminate Plaintiffs'
distributorships. See Smith, et al. v. CPC Int'l et al.,
177 F.3d 110 (2d Cir. 1999).
Plaintiffs now move to amend the complaint to include claims
brought under ERISA § 502(a)(1) for benefits they allege are
owed them under the following plans administered by the
Defendants: the Bestfoods Savings/Retirement Plan for Salaried
Employees (the "Savings Plan"); the Bestfoods Non-Contributory
Retirement Income Plan for Salaried Employees (the "Pension
Plan"); and the Bestfoods Salaried Employees Health Care Plan
("Health Plan") (collectively, the "Plans"). Plaintiffs argue
that the § 502(a)(1) claim they propose now is distinct from the
earlier ERISA claims disposed of by Judge Jones because it
simply alleges that Plaintiffs, as former "employees" of
Bestfoods, are entitled to benefits under the Plans. Plaintiffs
did not include this claim in the original complaint because (1)
the Plans were not made available to the Plaintiffs at the time
of the initial complaint and (2) Plaintiffs had not claimed any
benefits administratively through the plans themselves. Since
the filing of the initial complaint, Plaintiffs filed for
administrative review of their entitlement claim and were denied
by the Bestfoods Plan Administrator. (See Patterson letter to
Thornton, Dec. 19, 1997, attached to Defs Mem. at Ex. D).
Plaintiffs' appeal was also denied. (See Bergeman letter to
Thornton, May, 28, 1998 and Patterson letter to Thornton, May
29, 1998, id, at Exs. E, F.)
Defendants oppose the instant motion on the ground that any
amendment would be futile because Plaintiffs fail to state a
claim under ERISA.*fn2
Under Rule 15 of the Fed.R.Civ.P., leave to amend a complaint
"shall be freely given when justice so requires." Fed.R.Civ.P.
15(a). Amendment may be denied if the amended claim would be
futile. In this circuit, an amendment to a pleading is deemed
futile "if a proposed claim could not withstand a motion to
dismiss pursuant to Rule 12(b)(6)." Barrett v. United States
Banknote Corp., 806 F. Supp. 1094, 1098 (S.D.N.Y. 1992).
Rule 12(b)(6) motions may only be granted where "it appears beyond
doubt that plaintiff can prove no set of facts in support of his
claim that would entitle him to relief." Citibank, N.A. v. K-H
Corp., 968 F.2d 1489, 1494 (2d Cir. 1992).
In deciding whether Plaintiffs should be granted leave to
amend, this Court must determine whether Plaintiffs state a
claim under ERISA. And when reviewing a Plan Administrator's
denial of eligibility for an ERISA plan, a district court may
review the decision de novo. See Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). I
find that, because Plaintiffs are precluded from relitigating
the issue of whether they are employees within the meaning of
ERISA, they fail to state a claim upon which relief may granted.
Plaintiffs Are Precluded from Relitigating the Question of
Employee Status under ERISA
Each of the ERISA Plans at issue covers only Bestfoods
"employees." (See Defendant's Ex. A. §§ 1.13, 21.; Ex. B §§
1.15,2.1; Ex. C §§ 1.17,2.1.)*fn3 Defendants argue that
amendment is futile because this Court has already determined
that Plaintiffs are not "employees" within the meaning of ERISA
and therefore are precluded from bringing the proposed claims.
In the alternative, Defendants argue that Plaintiffs are not
eligible for the Plans. Plaintiffs argue that amendment is not
futile because (1) plaintiffs are employees within the meaning
of ERISA and (2) their ERISA benefits were denied in violation
of the Plans.
Defendants are correct. This Court has already determined
that, as a matter of law, Plaintiffs were not employees of
Defendants, and the Second Circuit upheld that determination.
Plaintiffs are ...