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DOWNES v. JP MORGAN CHASE & CO.

June 3, 2004.

SUE DOWNES, Plaintiff, -V.- JP MORGAN CHASE & CO., EMPLOYEE WELFARE BENEFIT PLANS, EMPLOYEE BENEFIT PLANS, 401K SAVINGS PLAN AND EMPLOYEE STOCK OPTION PROGRAM, Defendants. Shira J. Rosenfeld, New York, NY, for Plaintiff. Mark G. Cunha, Simpson Thacher & Bartlett LLP, New York, N.Y. (Vincent R. FitzPatrick III, on the brief), for Defendants


The opinion of the court was delivered by: GERARD E. LYNCH, District Judge

OPINION AND ORDER

Sue Downes brought this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., the Equal Pay Act, 29 U.S.C. § 206(d)(1), and New York State law to recover certain employee benefits. Downes alleges that defendant J.P. Morgan Chase & Co.*fn1 wrongfully classified her as an independent contractor rather than as an employee and on that basis denied her, among other benefits, health care, bonuses, vacation, and severance pay. She also alleges that J.P. Morgan discriminated against her by paying similarly-situated male employees more than she received. J.P. Morgan moves to dismiss, arguing that Downes's complaint is largely time-barred and, as to most counts, fails to state a claim on the merits. For the reasons that follow, the motion will be granted in part and denied in part.

  BACKGROUND

  The following facts, drawn from the complaint, must be accepted as true for purposes of this motion to dismiss. See Bolt Elec., Inc. v. City of New York, 53 F.3d 465, 469 (2d Cir. 1995). J.P. Morgan maintains and administers various benefits plans for its employees, which entitle them to health care, vacation, paid sick and holiday leave, severance, and a pension plan. (Compl. ¶ 10.) In June 1993, Downes began to perform work for Chase Manhattan Banking Corporation, J.P. Morgan's predecessor.*fn2 (Id. ¶ 14.)

  In February 2003, Downes and J.P. Morgan entered into a one-year employment contract. In May 2003, Downes stopped working for J.P. Morgan because, she alleges, it discharged her. (Id. ¶ 15.) At no time did J.P. Morgan or its predecessor provide her employee benefits of any kind. (Id. ¶¶ 10, 21, 35, 48.) Nor, after she ceased to perform work for J.P. Morgan, did it provide her severance pay or continuing healthcare coverage. (Id. ¶¶ 27, 41.)

  Downes alleges that J.P. Morgan deliberately "misclassif[ied] her as a consultant and/or independent contractor with the specific intent to deny her benefits." (Id. ¶ 38.) She also alleges that J.P. Morgan paid similarly-situated male employees, "who had jobs that required equal skill, effort and responsibility and were performed under similar working conditions," higher wages than she received. (Id. ¶ 57.) DISCUSSION

 I. Standard on a Motion to Dismiss

  On a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the Court must accept as true all well-pleaded factual allegations in the complaint and view them in the light most favorable to the plaintiff, drawing all reasonable inferences in her favor. Leeds v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996). The Court will not dismiss a complaint for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of h[er] claim that would entitle h[er] to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

 II. ERISA Claims

  The gravamen of the complaint is that J.P. Morgan misclassified Downes with the intent to deny her various benefits enjoyed by J.P. Morgan employees under ERISA-governed plans that it maintains and administers. Downes brings her first three claims under ERISA §§ 404, 502(a)(1)(B), and 510, codified, respectively, at 29 U.S.C §§ 1104, 1132(a)(1)(B), and 1140. J.P. Morgan argues that the statute of limitations bars all of these claims, and that each in any event fails on the merits.

  A. Denial of Benefits

  As a threshold issue, the Court notes that while Downes brings her first two claims under distinct statutory sections, each seeks substantially the same relief: damages for benefits that Downes alleges J.P. Morgan wrongfully withheld from her. J.P. Morgan correctly argues that insofar as Downes purports to bring her first claim pursuant to ERISA § 409, 29 U.S.C. § 1109 (Compl. ¶ 32), she fails to state a claim. ERISA § 409 makes fiduciaries liable for breaches of the standard of care set forth in § 404.*fn3 But it makes them liable to the plan, not to individuals. Section 409(a) provides in relevant part that a fiduciary "shall be personally liable to make good to [an ERISA] plan any losses to the plan resulting from [his or her] breach, and to restore to such plan any [wrongful] profits of such fiduciary." 29 U.S.C. § 1109(a). ERISA § 409 therefore does not provide a private right of action for individual damages; suits under § 409 must seek recovery on behalf of the plan as a whole. See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140 (1985); Rudolph v. Joint Indus. Bd. of the Elec. Indus., 137 F. Supp.2d 291, 297 (S.D.N.Y. 2001). To the extent that Downes purports to bring her first claim for breach of fiduciary duty "[p]ursuant to ERISA § 409" (Compl. ¶ 32), she therefore fails to state a cognizable claim.

  But Downes may, and does in her second claim (Compl. ¶¶ 33-36), seek essentially the same relief under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), which gives participants in or beneficiaries of plans a right of action "to recover benefits due to [them] under the terms of the plan[s], or to clarify [their] rights to future benefits." Id.; see Rudolph, 137 F. Supp.2d at 297. Furthermore, while the complaint does not cite ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), Downes argues in her brief that she also can bring a cause of action for breach of fiduciary duty under that subsection, which provides a right of action to a "participant, beneficiary or fiduciary" seeking to enjoin violations of an ERISA plan or "(B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan." Id. (P. Br. 4-5.) While Devlin v. Empire Blue Cross and Blue Shield, 274 F.3d 76, 89 (2d Cir. 2001), cited by Downes, arguably supports that argument, it is questionable (1) whether Downes seeks "other appropriate equitable relief within the meaning of § 502(a)(3), see Bona v. Barasch, No. 01 Civ. 2289, 2003 WL 1395932, at *10-*12 (S.D.N.Y. Mar. 20, 2003), and (2) whether an action pursuant to § 502(a)(3) can seek "appropriate equitable relief where, as here, another ERISA provision (here, § 502(a)(1)(B)) offers the plaintiff adequate relief. See Varity Corp. v. Howe, 516 U.S. 489, 515 (1996) ("[W]e should expect that where Congress elsewhere provided adequate relief for a beneficiary's injury, there will likely be no need for further equitable relief, in which case such relief normally would not be `appropriate.'"); Mead v. Arthur Andersen, LLP, 309 F. Supp.2d 596, 598 (S.D.N.Y. 2004) (distinguishing Devlin on this ground).

  The Court need not delve further into these issues, however, because the applicable statutes of limitations bar Downes's benefits claims whether she brings them pursuant to § 502(a)(3), that is, under the rubric of a breach of fiduciary duty, or pursuant to § 502(a)(1)(B), which explicitly authorizes actions to recover allegedly due ERISA benefits. First, insofar as Downes properly alleges an ERISA § 502(a)(3) claim, ERISA § 413, 29 U.S.C. § 1113, sets forth the applicable statute of limitations. Caputo v. Pfizer, Inc., 267 F.3d 181, 188 (2d Cir. 2001). ERISA § 413 provides:
No action may be commenced under this subchapter with respect to a fiduciary's breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of —
(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have cured the breach or violation, or (2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation[.]
29 U.S.C. § 1113 (emphasis added.) A plaintiff has "actual knowledge," and hence the claim accrues, "when [s]he has knowledge of all material facts necessary to understand that an ERISA fiduciary has breached his or her duty or otherwise violated the Act." Caputo, 267 F.3d at 193. Second, insofar as Downes brings her benefits claims pursuant to ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), the statute of limitations is six years, corresponding to "the controlling limitations period . . . specified in the most nearly analogous state limitations statute." Miles v. N.Y.S. Teamsters Conference Pension and Ret. Fund, 698 F.2d 593, 598 (2d Cir. 1983). A claim under ...

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