cause of action, instead listing only "breach of contract," "promissory
estoppel," and "fraud" on the complaint, as required by New York Law.
N.Y. City Civ. Ct. Act § 903 (McKinney 1989). On February 14, 2002,
Nielsen removed the case, involving the Court's federal question
jurisdiction, pursuant to 28 U.S.C. § 1331, because Nelson's claims
necessarily involve ERISA. Nielsen then moved for a dismissal of Nelson's
complaint, pursuant to Rule 12(b)(6), on February 22, 2002, arguing that
Nelson's claims are preempted by ERISA because his departure from the
company, as well as his later request for-severance pay, indicate that
this action was brought to recover benefits solely under the terms of the
A. STANDARD OF REVIEW
Under Rule 12(b)(6), a party may challenge a complaint for failure to
state a claim upon which relief can be granted. Dismissal for failure to
state a claim is proper where "it appears beyond doubt that the plaintiff
can prove no set of facts in support of his claim which would entitle him
to relief." Harris v. City of New York, 186 F.3d 243, 247 (2d Cir. 1999)
(internal citation and quotation marks omitted); see Tarshis v. Riese
Org., 211 F.3d 30, 35 (2d Cir. 2000). Courts thus presume all
well-pleaded factual allegations in the complaint to be true, and draw
all reasonable inferences in favor of the plaintiff. See Fed. R. Civ. P.
12(b)(6); Zinermon v. Burch, 494 U.S. 113, 118 (1990); Charles W. v.
Maul, 214 F.3d 350, 356 (2d Cir. 2000); EEOC v. Staten Island Sav. Bank,
207 F.3d 144, 148 (2d Cir. 2000). However, "[c]onclusory allegations or
legal conclusions masquerading as factual conclusions will not suffice to
prevent a motion to dismiss." Gebhardt v. Allspect, Inc., 96 F. Supp.2d 331,
333 (S.D.N.Y. 2000).
B. DISCUSSION OF PREEMPTION
Congress enacted ERISA to ensure that employers could rely on a
"single, uniform system of regulation" for employee benefit plans. Yoran
v. Bronx-Lebanon Hospital Center, No. 96 Civ. 2179, 1999 WL 378350, at *4
(S.D.N.Y. June 10, 1999). Congress deemed such a federal scheme necessary
to combat variances and conflicts among state laws, to which employers
had been subjected in administering their plans. See New York State
Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,
514 U.S. 645, 656-57 (1995). To facilitate uniformity, ERISA contains a
preemption clause, mandating that "the provisions of [ERISA] shall
supercede any and all State laws insofar as they may now or hereafter
relate to any employee benefit plan . . ." 29 U.S.C. § 1144(a).
In order to determine whether Nelson's claims are preempted by ERISA,
the Court must determine if the claims themselves are "related to an
employee benefit plan." Devlin v. Transportation Communications Int'l
Union, 173 F.3d 94, 101 (2d Cir. 1999). Congress intended ERISA to
"occupy fully the field of employee benefit plans," and to establish the
field as" "exclusively a federal concern. Reichelt v. Emhart Corp.,
921 F.2d 425, 431 (2d Cir. 1990) (citation omitted).
Courts have "virtually taken it for granted" that state laws which are
"specifically designed to affect employee benefit plans" are pre-empted
under ERISA. Mackey v. Lanier Collection Agency & Service, Inc.,
486 U.S. 825, 829 (1990). "State law" is defined broadly in the statute
as including all "laws, decisions, rules, regulations, or other State
the effect of law." 29 U.S.C. § 1144(c)(1). A state
law "relates to" an employee benefit plan if the law has a "connection
with or reference" to the plan, regardless of the state law's underlying
intent. Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990). Thus,
a state law that "only indirectly affects a plan may nevertheless `relate
to' that plan for preemption purposes." Keiser v. CDC Investment Mgmt.
Corp., 160 F. Supp.2d 512, 517 (S.D.N.Y. 2001). Nelson asserts three
claims arising from the Plan and Nielsen's denial of his request for
severance benefits. Thus, his claims' legal bases would fall into the
category of state law, implicating preemption.
Nelson seeks to recover only the severance benefits described in the
Plan, to which he was denied by Nielsen's Employee Benefits Committee.
(See Farrell Decl., at ¶ 3.) Thus, though the claims are presented as
arising under New York State law, their purpose is to recover benefits
due under the terms of the Plan. See 29 U.S.C. § 1132(a)(1)(B). A
"state common law action which merely amounts to an alternative theory of
recovery for conduct actionable under ERISA is preempted." Diduck v.
Kaszycki & Sons Contractors, Inc., 974 F.2d 270, 288 (2d Cir. 1992).
State law claims seeking severance pay are preempted in situations in
which they are in direct relation to a severance plan. Indeed, ERISA
"preempts civil actions against employers for severance pay predicated on
common law contract principles." Reichelt, 921 F.2d at 431.
Furthermore, courts have established that the state law claims of fraud
and promissory estoppel seeking employment benefits including severance
pay are preempted. See, e.g., Diduck, 974 F.2d at 288 (holding that ERISA
is the exclusive remedy for a fraud claim which meets the relation
requirement to an employee benefit plan governed by ERISA); Snyder v.
Elliot W. Dann Co., 854 F. Supp. 264, 273 (S.D.N.Y. 1994) (holding that
all state common law claims of promissory estoppel, breach of contract,
or fraud are as a matter of law preempted by ERISA).
Finally, the Plan indicates on its face that it is governed by ERISA.
In sections such as those entitled "Administration of the Plan" and
"Severance Benefits," the text describes in detail the Employee Benefits
Committee's authority under ERISA. (See Farrell Decl., at ¶ 2, Ex.
A); see also Tischmann v. ITT/Sheraton Corp.,