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Nardello v. Boehringer Ingelheim USA Corp.

United States District Court, D. Maryland

October 13, 2016



          James K. Bredar United States District Judge.

         This case arises from Plaintiff Jennifer Nardello's four-count complaint against her employer, Boehringer Ingelheim Pharmaceuticals, Inc. (“BIPI”), [1] and against the claims administrator of its short-term disability program, Aetna Life Insurance Company (“Aetna”), alleging wrongful denial of short- and long-term disability benefits. (Complaint, ECF No. 1.) Previously, the Court dismissed without prejudice Counts I and II, which alleged violations of the Americans with Disabilities Act, after the parties stipulated that those counts were subject to an arbitration agreement between Plaintiff and BIPI. (Order Approving Joint Stipulation of Dismissal, ECF No. 14.) Count III alleges that BIPI and Aetna wrongly denied Plaintiff benefits to which she was entitled by BIPI's short-term disability (“STD”) plan, and seeks redress under the Employee Retirement Income Security Act of 1974 (“ERISA”) or, alternatively, under contract law. (Complaint ¶ 89.) Count IV alleges that that BIPI and Aetna's administration of BIPI's long-term disability (“LTD”) plan violates both Defendants' fiduciary duties under ERISA. (Id. at ¶ 93.)

         Currently before the Court are Defendant Aetna's motion to dismiss or, in the alternative, motion for summary judgment (ECF No. 17) and Defendant BIPI's motion to compel arbitration and to stay or dismiss further litigation (ECF No. 16). Both motions have been fully briefed and no hearing is necessary. See Local Rule 105.6 (D. Md. 2016). For the reasons detailed below, the Court will grant Aetna's motion in part as a motion to dismiss and grant it in part as a motion for summary judgment. The Court will grant BIPI's motion to compel arbitration, and will stay the case.[2]

         I. Standard for Dismissal for Failure to State a Claim

         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 Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. An inference of a mere possibility of misconduct is not sufficient to support a plausible claim. Id. at 679. As the Twombly opinion stated, “Factual allegations must be enough to raise a right to relief above the speculative level.” 550 U.S. at 555. “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.' . . . Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555, 557). Although when considering a motion to dismiss a court must accept as true all factual allegations in the complaint, this principle does not apply to legal conclusions couched as factual allegations. Twombly, 550 U.S. at 555.

         II. Standard for Summary Judgment

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to current Rule 56(a)). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing the motion, then a genuine dispute of material fact is presented and summary judgment should be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the “mere existence of a scintilla of evidence in support of the [opposing party's] position” is insufficient to defeat a motion for summary judgment. Id. at 252. The facts themselves, and the inferences to be drawn from the underlying facts, must be viewed in the light most favorable to the opposing party, Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008), who may not rest upon the mere allegations or denials of his pleading but instead must, by affidavit or other evidentiary showing, set out specific facts showing a genuine dispute for trial, Fed.R.Civ.P. 56(c). Supporting and opposing affidavits are to be made on personal knowledge, contain such facts as would be admissible in evidence, and show affirmatively the competence of the affiant to testify to the matters stated in the affidavit. Id.

         III. Allegations of the Complaint[3]

         Plaintiff is employed by BIPI as a primary care sales representative. (Complaint ¶ 24.) Plaintiff alleges that Aetna is the plan administrator of BIPI's STD plan (Id. at ¶ 6.) Beginning in March of 2015, Plaintiff began experiencing symptoms of severe gastro-intestinal discomfort, nausea, and dizziness, resulting in a significant amount of time in which she was unable to work. (Id. at ¶¶ 25-30, 59.) It took several months for doctors to diagnose these symptoms as stemming from endometriosis, to perform surgery and other corrective treatments, and for Plaintiff to recover sufficiently so as to resume a normal work schedule. (Id. at ¶¶ 27, 33, 53, 56.) In April of 2015, Plaintiff exhausted her paid leave and applied for BIPI's STD plan. (Id. at ¶¶ 34-35.) Aetna, the plan's claims administrator, denied this application on April 21 (Id. at ¶ 38), Plaintiff appealed this decision on April 24 (Id. at ¶ 41), and her appeal was denied on June 5 (Id. at ¶ 50). Plaintiff was ultimately approved for STD coverage from June 19 through July 2 (Id. at ¶ 52), but was denied coverage from July 3 forward (Id. at ¶ 57). Plaintiff also alleges that she was only paid for six of the thirteen days for which she was approved for STD coverage. (Id. at ¶ 54.)

         IV. Analysis

         A. Aetna's Motion to Dismiss / Motion for Summary Judgment

         Plaintiff's claims against Aetna include separate arguments and theories justifying the payment of benefits, first, under the STD plan pursuant to ERISA and, second, pursuant to contract law (Count III), as well as for benefits under the LTD plan pursuant to ERISA (Count IV). (Complaint ¶¶ 82-93.) Aetna has moved to dismiss all of Plaintiff's claims against it or, alternatively, for summary judgment. (Aetna's Mot. to Dismiss.) Accordingly, the Court will address Aetna's motion with respect to each of Plaintiff's theories, in turn.

         1. The Applicability of ERISA to the Short-Term Disability Plan

         Plaintiff's primary argument under Count III is based on the premise that the STD plan is an “employee welfare benefit plan” as defined by ERISA and that the statute imposes a fiduciary obligation on Aetna with respect to Plaintiff. (Complaint ¶¶ 82-89.) However, the STD plan properly falls under the “payroll practice” exception to ERISA, rendering Plaintiff's arguments fruitless.

         Congress passed ERISA in 1974 in order to protect employees from mismanagement of funds created by employers to support employee benefit programs. Massachusetts v. Morash, 490 U.S. 107, 112 (1989). ERISA defines an “employee welfare benefit plan” or “welfare plan” to include any plan, fund, or program “established or maintained by an employer . . . for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, . . . benefits in the event of sickness, accident, disability, death or unemployment, ” among other things. 29 U.S.C. § 1002(1).[4] However, the Department of Labor has published a regulation excluding what it calls “payroll practices” from consideration as employee welfare benefit programs. 29 C.F.R. § 2510.3-1(b). It defines payroll practices to include, among other things, programs involving “payment of an employee's normal compensation, out of the employer's general assets, on account of periods of time during which the employee is physically or mentally unable to perform his or her duties or is otherwise absent for medical reasons.” § 2510.3-1(b)(2) (emphasis added). This regulation has been consistently upheld in the courts. See Stern v. Int'l Bus. Machines Corp., 326 F.3d 1367, 1372 (11th ...

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