United States District Court, S.D. New York
OPINION AND ORDER
G. Schofield United States District Judge.
a continuation of the litigation in In re
Colgate-Palmolive Co. ERISA Litigation, Master File No.
07 Civ. 9515 (“Colgate I ”). Plaintiffs
Paul Caufield and Rebecca Staley allege that Defendants
Colgate-Palmolive Co. (“Colgate”),
Colgate-Palmolive Co. Employees' Retirement Income Plan
(the “Plan”), Laura Flavin, Daniel Marsili and
the Employee Relations Committee of Colgate-Palmolive Co.
(the “Committee”) denied certain Residual Annuity
benefits to which Plaintiffs are entitled under the Plan.
They assert claims against Defendants for violations of the
Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1001 et seq. (“ERISA”), and for contempt
of the Court's Final Order and Judgment in Colgate
I Defendants move to dismiss Plaintiffs' claims
pursuant to Federal Rule of Civil Procedure 12(b)(6) on the
grounds that the claims were released in the settlement
agreement from Colgate I, are time barred and fail
to state a claim. For the following reasons, the motion is
purposes of Defendants' motion, the following facts are
drawn from the Complaint and documents integral to the
Complaint. The facts are construed in the light most
favorable to Plaintiffs as the non-moving party. See
Littlejohn v. City of New York, 795 F.3d 297, 306 (2d
are former employees of Colgate. Plaintiff Paul Caufield was
employed by Colgate from 1977 to 1999. Plaintiff Rebecca
Staley was employed by Colgate from 1979 to 1994. Both
Plaintiffs were and are participants in the Plan, which is
sponsored by Colgate and administered by the Committee. The
Committee is comprised of selected Colgate officials,
including Defendants Laura Flavin and Daniel Marsili.
Plan is a defined benefit pension plan. As such, the Plan
guarantees that each participant will receive a certain level
of benefits, known as accrued benefits, expressed as the
amount the participant would receive annually as an annuity
upon reaching normal retirement age, here, age 65. A
participant's accrued benefit is determined under the
terms of the Plan. Prior to July 1, 1989, the Plan used a
final average pay formula, meaning in simplest terms that the
level of benefits was based on the participant's length
of service and average salary during her final years of
service. Effective July 1, 1989, the Plan became a cash
balance plan, which essentially uses a career average pay
formula. Specifically, the new plan formula defines a
participant's benefits in terms of a Personal Retirement
Account (“PRA”) balance, which reflects
accumulated monthly pay-based credits and interest. Upon
retirement, the PRA balance is converted into an annuity or,
if preferred, paid as a lump sum.
the benefits provided under the new formula would in some
circumstances be less valuable than the benefits provided
under the old formula, Colgate enacted protective Plan
provisions and offered enhanced benefits for participants
with pre-July 1989 benefits. These provisions and benefits
are set forth in Plan Appendices B, C and D. First, all such
participants were to receive the larger of the annuity
calculated under (1) the Plan's pre-July 1989 final
average pay formula, or (2) the Plan's new PRA formula.
Second, these participants had the option to continue earning
benefits under the pre-July 1989 final average pay formula by
making employee contributions to the Plan. Participants who
selected this option were to receive the larger of the
annuity calculated under (1) the Plan's pre-July 1989
final average pay formula as continued in effect post-July 1,
1989, or (2) the Plan's new PRA formula plus an annuity
based on the employee's contributions.
and Staley had pre-July 1989 benefits and opted to make
employee contributions. When they retired from Colgate in
1999 and 1994, respectively, they each elected to receive
their benefits under the Plan in the form of a lump sum.
Colgate paid Caufield $104, 386.00 and Staley $22, 425.64.
2005, Colgate acknowledged that the lump sums the Plan had
been paying to participants with pre-July 1989 benefits were
less than the lump sums to which they were statutorily
entitled. The deficiency in the lump sum payments meant that
Defendants had deprived Plan participants of some of their
non-forfeitable pension benefits. To correct this problem,
Colgate enacted the Residual Annuity Amendment
(“RAA”) in 2005. The RAA amended the Plan and
granted an additional annuity benefit to any participant with
pre-July 1989 benefits who elected a lump sum and whose
benefit under Appendices B, C or D was greater than her
benefit under the PRA formula. The RAA was effective
retroactively to July 1, 1989. Defendants did not implement
the RAA until 2014 and have never provided Plan participants
an updated summary plan description (“SPD”) or
summary of material modifications (“SMM”)
disclosing the RAA.
2007, three lawsuits were filed against the Plan alleging
that it had miscalculated the pension benefits of several
thousand participants since July 1, 1989. The cases were
consolidated into Colgate I. In May 2010, after
three years of litigation, the parties reached an agreement
in principle to settle the case. Up to that point, Defendants
had not produced a copy of the RAA in response to discovery
requests, and counsel for the plaintiffs in Colgate
I were not aware of the RAA. Once plaintiffs'
counsel received a copy of the RAA in July 2011, they
insisted that all RAA claims be carved out of the settlement
agreement. Colgate and the Plan eventually agreed, and on
October 9, 2013, the parties executed a settlement agreement.
The settlement agreement excluded any claims “that are
based upon, or arise under” the RAA and prohibited the
Plan or Colgate from asserting in any future administrative
or legal proceeding that claims under the RAA were released
under the settlement agreement. The Court approved the
settlement agreement and noted that “certain claims
known as the Residual Annuity Claims were excluded from the
scope of the settlement.” In re Colgate-Palmolive
Co. ERISA Litig., 36 F.Supp.3d 344, 346-47 (S.D.N.Y.
August 2014, Defendants granted additional benefits under the
RAA to a few hundred Plan participants. Caufield received a
Residual Annuity of $57.94 per month plus a gross payment of
$16, 262.54, representing missed payments of his Residual
Annuity from the date his lump sum pension benefit was paid,
accumulated with interest. Staley received no Residual
letter to the Plan Administrator dated July 30, 2014, Staley
stated that it had come to her attention that she should be
receiving an annuity benefit in addition to her original lump
sum benefit. She requested that the Plan provide her the
annuity benefit and an explanation of how it was calculated.
By letter dated November 4, 2014, Flavin, Colgate's Vice
President for Global Compensation and Benefits, responded on
behalf of the Committee and denied Staley's claim for an
for Plaintiffs subsequently requested additional documents,
records and information from Defendants and, by letter dated
April 6, 2015, appealed both (1) the denial of Staley's
claim for an annuity benefit, and (2) the determination of
the amount of Caufield's Residual Annuity. Marsili,
Colgate's Senior Vice President, Global Human Resources,
denied Staley's claims appeal by letter dated June 4,
2015. Marsili asserts in the letter that Staley's claims
were released as part of the settlement agreement in
Colgate I. On June 3, 2016, Plaintiffs filed this
putative class action lawsuit.
a motion to dismiss, all factual allegations in the complaint
are accepted as true and all inferences are drawn in the
plaintiffs favor.” Littlejohn, 795 F.3d at
306. “In determining the adequacy of the complaint, the
court may consider any written instrument attached to the
complaint as an exhibit or incorporated in the complaint by
reference, as well as documents upon which the complaint
relies and which are integral to the complaint.”
Subaru Distribs. Corp. v. Subaru of Am., Inc., 425
F.3d 119, 122 (2d Cir. 2015) (citation omitted); see also
Beauvoir v. Israel, 794 F.3d 244, 248 n.4 (2d Cir.
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to 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)). “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice.” Id. “[W]hatever documents
may properly be considered in connection with the Rule
12(b)(6) motion, the bottom-line principle is that
‘once a claim has been stated adequately, it may be
supported by showing any set of facts consistent with the
allegations in the complaint.'” Roth v.
Jennings, 489 F.3d 499, 510 (2d Cir. 2007) (quoting
Twombly, 550 U.S. at 563).
Release of Claims
claims for benefits under the RAA (Count Two) are not barred
by the release in the ...