Court: District Court, D. Minnesota; May 15, 2014; Federal District Court
Defendants' Motions to Dismiss are partially granted and partially denied in this case involving Plaintiff Stewart Jump, a former employee of Speedway LLC. Jump worked at SuperAmerica stores until the transition to Northern Tier Energy in December 2011. He faced a decision to retire from Speedway or move to Northern Tier. Under the Speedway Health Plan, he was eligible for a subsidy covering up to 80% of premiums upon retirement. In contrast, the Northern Tier Plan provides coverage for retirees aged 55 to 65 with ten years of service but does not guarantee a subsidy.
Jump alleges he was misled about the subsidy situation, asserting he would have chosen to retire if informed correctly. His claims of misrepresentation stem from two key incidents:
1. A December 2010 meeting where a document regarding employee benefits was distributed. This document indicated that employees retiring after age 55 with sufficient service would qualify for the Retiree and Survivor Health Plan, including a subsidy for those hired before 2004. The Northern Tier section suggested a similar plan would be implemented.
2. A September 2011 informational meeting where a document stated that Northern Tier would recognize Speedway service but did not address premium subsidies.
Jump did not inquire further during or after these meetings regarding the subsidy details. The court's decision on the motions reflects the complexity of the claims regarding potential misrepresentation and the nuances of the benefits plans involved.
Jump did not inquire about premium subsidies before or after a meeting but claims that presenters stated Northern Tier Defendants would provide the same benefits to SuperAmerica employees, particularly regarding vesting in benefits plans. He interpreted these statements to mean he would be eligible for subsidized retirement benefits even if he did not retire in November 2011. Based on this information, he transitioned to Northern Tier at the end of 2011 and officially retired in February 2012 at age 59 after over 21 years of service; his official retirement date was March 28, 2012, due to unused vacation hours. Upon contacting Northern Tier about his benefits, he learned he was not eligible for a subsidy and would have to pay premiums himself. After this, he sought benefits from Speedway but was informed that he was ineligible due to his employment termination.
On March 29, one day after his official retirement, Northern Tier adopted 'Amendment Number One' to the Plan, which stipulated that Category A Eligible Retirees would receive an 80% subsidy for medical coverage, while Category B Eligible Employees would bear the full cost. Jump is uncertain of his classification as either Category A or B. He claims to have lost health insurance due to the alleged misrepresentations regarding subsidy eligibility and is unable to afford other insurance. He filed a lawsuit in Hennepin County Conciliation Court for $10,000 in damages, which was subsequently removed to federal court.
Jump's lawsuit includes eleven claims: breaches of fiduciary duty, wrongful denial of benefits, equitable estoppel, interference with rights, common-law fraud, negligent misrepresentation, and tortious interference with contract, all under ERISA or common law. The defendants have moved to dismiss all claims. Under Federal Rule of Civil Procedure 12(b)(6), the court will consider all alleged facts as true and grant a dismissal only if it is clear that no set of facts exists that could entitle Jump to relief, requiring the complaint to present plausible claims.
State-law claims for fraud, misrepresentation, and tortious interference (Counts VII to XI) are dismissed due to ERISA preemption, as ERISA supersedes state laws related to employee benefit plans. The Eighth Circuit's two-part test determines that a state law "relates to" an ERISA-covered plan if it has a "connection with" or "reference to" such a plan. Jump's claims directly pertain to the administration of benefits under the Northern Tier and Speedway Plans, specifically alleging misleading information about his health benefits. Despite Jump's argument that his state-law claims are alternative remedies if the Defendants are not fiduciaries under ERISA, the court holds that preemption applies regardless of fiduciary status.
In Counts I, II, IV, and V, Jump asserts breaches of fiduciary duty and equitable estoppel against Northern Tier and Speedway under ERISA’s 29 U.S.C. § 1132(a)(3). He claims Northern Tier failed to provide adequate information about benefits and made misrepresentations regarding the Northern Tier Plan. Jump argues that both companies should be estopped from denying the benefits he believed he was entitled to. Northern Tier contends that it should not be held liable for statements made before the completion of its acquisition of Speedway’s stores in November 2011, asserting that it did not owe a fiduciary duty at that time. However, Jump maintains that he sufficiently alleged Northern Tier's fiduciary status when the misleading statements occurred, and the court agrees, noting that Jump relied on these misstatements to his detriment by accepting employment with Northern Tier and forfeiting his rights to benefits under the Speedway Plan.
Determining a defendant’s fiduciary status at the motion to dismiss stage is premature, as it involves a 'mixed question of law and fact.' Under ERISA, fiduciary status should be interpreted broadly to align with the statute's goals. Jump has sufficiently alleged Northern Tier’s fiduciary status and a claim of equitable estoppel under § 1132(a)(3). Equitable estoppel applies when a party misleads another, who then reasonably relies on that misrepresentation to their detriment, but cannot be used to alter unambiguous plan terms. Jump claims Northern Tier misled him about eligibility for subsidized health benefits starting in December 2010 and further misled him in September 2011, leading him to leave his job at Speedway under the false belief he would receive a subsidy. Northern Tier contests that Jump does not meet the criteria of a 'Category A Eligible Retiree' for benefits; however, the Court finds it too early to resolve whether he qualifies or if ambiguity exists regarding his benefits.
Speedway argues that Jump's claims against it should be dismissed, asserting he did not show that it provided misleading information about its plan. Nonetheless, Jump alleges collaboration between Speedway and Northern Tier in communicating benefits to employees, and it is acknowledged that Speedway had a fiduciary duty at the time of the statements. Consequently, Jump’s allegations allow him to continue pursuing fiduciary duty and equitable estoppel claims against Speedway, leading to the denial of Speedway’s motion to dismiss these claims under § 1132(a)(3).
Jump alleges wrongful denial of benefits by Northern Tier under the Northern Tier Plan, referencing 29 U.S.C. § 1132(a)(1)(B), which allows suits to recover benefits or enforce rights under a plan. Northern Tier seeks dismissal on the grounds that Jump did not exhaust administrative remedies, which Jump concedes but claims would have been futile. The court finds that Jump has not demonstrated that his claim would have necessarily been denied on appeal, rendering the futility exception inapplicable, and thus dismisses the claim without prejudice to allow for administrative remedy exhaustion.
In a separate claim against Speedway, Jump alleges interference with his ERISA-protected rights due to his termination before he could transition to employment with Northern Tier, aimed at avoiding subsidized benefits. Under ERISA, to plead a violation, a plaintiff must show participation in a protected activity, an adverse employment action, and a causal link. Jump does not allege that Speedway unilaterally terminated him to evade ERISA responsibilities, failing to establish an adverse employment action. Therefore, this claim is also dismissed.
The court grants in part and denies in part motions to dismiss from both Northern Tier and Speedway, dismissing Count III without prejudice and Counts VI, VII, VIII, IX, X, and XI with prejudice. Northern Tier's argument for dismissal based on misidentification of the defendant is noted, but both entities are treated collectively until further clarity is provided. The issue of whether SuperAmerica can be sued remains unresolved, and both SuperAmerica and Speedway will be referred to collectively unless a distinction is necessary. Lastly, a clerical error regarding the legal basis of Counts I and II is acknowledged, with all parties agreeing they fall under 29 U.S.C. § 1132(a)(3).
