Garcia-Tatupu v. Bert Bell/Peter Rozelle NFL Player Retirement Plan
Docket: CIVIL ACTION NO. 16-11131-DPW
Court: District Court, D. Massachusetts; April 18, 2017; Federal District Court
The court has denied the Defendants' motion to dismiss an ERISA case involving Linnea Garcia-Tatupu's claim for pension benefits following her divorce from Mosiula F. Tatupu. The complaint asserts that a state court judgment entitles her to these benefits, which were denied by the Bert Bell/Pete Rozelle NFL Player Retirement Plan and the NFL Supplemental Disability Plan. The denial was upheld after an appeal. The Defendants argue that the case should be dismissed due to improper venue and failure to state a claim. However, the court finds venue in Massachusetts appropriate, as issues regarding where the plan is administered and where the Defendants can be found are contested. The court acknowledges that a breach may have occurred in California where the Plaintiff resides but also considers Massachusetts as a potential venue. Further record development is necessary for potential dispositive judgment motions.
The term "where the defendant may be found" is interpreted broadly, as established in Varsic v. U.S. Dist. Court for Cent. Dist. of California, where the Ninth Circuit applied a liberal standard similar to that seen in antitrust and copyright cases. The court utilized the minimum contacts test from International Shoe Co. v. Washington to assess jurisdiction. A fund can be considered "found" in a judicial district if it has minimum contacts sufficient to establish personal jurisdiction. The Varsic decision clarifies that a defendant does not have to be located where a plan is administered, and subsequent cases have upheld this interpretation.
Key criteria for determining a defendant's location include whether the defendant has certain minimum contacts with the district that align with fair play and substantial justice principles. A defendant's reasonable anticipation of being brought to court in that district is paramount. If a defendant lacks continuous and systematic contacts, the litigation must stem from injuries related to those activities. The plaintiff argues that the Plan has adequate contacts with Massachusetts due to its provision of benefits to players of the New England Patriots, which supports its jurisdictional claim.
In Varsic, jurisdiction was confirmed when the defendant accepted contributions in the district and provided benefits to residents there. Similarly, in the current case, the plaintiff's denied benefits are linked to the fund's activities in Massachusetts, as the plaintiff accrued pension rights while residing there. Notably, the defendants did not contest the court's jurisdiction, suggesting acknowledgment of their minimum contacts with Massachusetts. In contrast, Waeltz dismissed a case for improper venue due to insufficient contacts between the plan and the jurisdiction.
Plaintiffs Waeltz and Johnson, residing in Florida and the Southern District of Illinois respectively, did not receive benefits in Illinois, as Johnson had not retired and neither had worked there. Unlike them, Tatupu earned benefits in Massachusetts while working with the New England Patriots but had not yet begun receiving payments. The court finds that venue is proper in Massachusetts under ERISA, despite the Defendants' request to transfer the case to Maryland. Under 29 U.S.C. § 1404(a), transfer is permissible for convenience and justice, but the court emphasizes that mere propriety of venue does not necessitate transfer.
The court must consider both private interests (e.g., access to evidence, trial costs) and public interests (e.g., court efficiency, familiarity with law). Expected witness convenience is a significant factor, but in this case, the decision will be made based on the administrative record, limiting the relevance of witness location. The Defendants argue that transferring to Maryland would reduce travel burden, but the Plaintiff's counsel is in Massachusetts, and the Plaintiff's choice of forum carries a strong presumption. The Defendants must demonstrate that the balance of justice and convenience favors transfer, which they have failed to do. The court notes that travel inconvenience to Boston does not outweigh the Plaintiff's choice of venue. Additionally, the Defendants seek to dismiss the complaint for lack of sufficient factual basis to state a claim.
A complaint may not be dismissed under Rule 12(b)(6) if it includes a "short and plain statement" demonstrating entitlement to relief, as established by the First Circuit. This statement must provide sufficient detail to give the defendant fair notice of the claims and their grounds while raising the right to relief above mere speculation. Complaints are adequate if they provide fair notice and state a plausible legal claim.
When defendants submit supplemental documents with a motion to dismiss, it is generally treated as a motion for summary judgment, unless the documents are undisputed, official public records, central to the plaintiff’s claim, or sufficiently referenced in the complaint. The documents submitted, including the Plan and the Retirement Board’s decision, are relevant as they are referenced in the complaint and central to the case.
The Defendants argue that the Plaintiff's complaint lacks factual support for her entitlement to relief. The First Circuit mandates that when an ERISA plan grants discretion to plan administrators, their decisions are upheld unless found to be arbitrary, capricious, or abusive of discretion. The review focuses on whether substantial evidence supports the administrator's decision. In ERISA cases, judicial review typically relies on the record before the plan administrator, while a domestic relations order's interpretation by a retirement plan is subject to de novo review.
In this instance, the Retirement Plan's construction of the Plaintiff's domestic relations order is reviewed de novo. The Defendants contend that the Plaintiff did not adequately plead the elements for a claim under the abuse of discretion standard; her complaint only states that the defendant wrongfully denied her pension benefits. Given that the decision will likely be reviewed de novo, the Plaintiff may not need to demonstrate that the Retirement Board's decision was an abuse of discretion or arbitrary and capricious.
Plaintiff's pleadings, while lacking specific details, sufficiently present a plausible claim for relief under ERISA, leading to the denial of the motion to dismiss. The court applies an abuse of discretion standard for reviewing the Retirement Board's decisions on the Plan, which requires the administrator's decisions to be plausible and supported by evidence. Conflicts of interest are a factor in this standard. However, the court will review de novo the plan administrator's determinations regarding whether a domestic relations order qualifies as a Qualified Domestic Relations Order (QDRO) under ERISA, particularly since the decision involves interpreting court orders rather than the Plan itself.
ERISA governs employee benefit plans and mandates compliance with various reporting, disclosure, and fiduciary standards. Generally, pension plans cannot be assigned or alienated, with QDROs being a notable exception. The Retirement Equity Act of 1984 expanded ERISA protections to ensure surviving spouses receive pension income when a vested participant dies before the annuity start date. A QDRO is defined as a domestic relations order that recognizes an alternate payee's right to benefits under the plan, contingent on meeting specific ERISA requirements.
In this case, the Plaintiff claims entitlement to pension benefits based on a divorce judgment, which has not been provided in the record. She has submitted a QDRO dated December 29, 2011, applied retroactively to October 5, 2012, corresponding to her September 24, 1997 divorce date. A QDRO serves as an exception to ERISA's anti-alienation rule, allowing recognition of a nonparticipant spouse's community property interest in pension plans under certain conditions.
The Retirement Plan denied benefits to Tatupu for three primary reasons:
1. Benefits are not payable if a player dies before electing to receive retirement benefits, as they only continue post-death for those who properly elected a form that includes such payments. Although Tatupu received a partial lump-sum retirement payment while alive, he had not made an election regarding the remainder of his pension.
2. There must be a surviving spouse at the time of death for benefits to be paid. Tatupu had no surviving spouse at his death.
3. Although Qualified Domestic Relations Orders (QDROs) may have retroactive effects, Tatupu's lack of a surviving spouse or minor children means no new benefits can be created that are otherwise not payable.
Tatupu was considered a “vested” player due to his lengthy NFL career, allowing him to elect to receive benefits from his Normal Retirement Date with a written election. He was 54 at his death and could have elected benefits starting at age 45. The plan specifies that unmarried Vested Players receive a “life only pension,” payable only during their lifetime, while married players receive a “Qualified Joint and Survivor Annuity.”
The Retirement Plan outlines two death benefit options: the Widow’s and Surviving Children’s Benefit for Vested Inactive Players and the Spouse’s Pre-Retirement Death Benefit for married Vested Players dying before retirement benefits begin. A “Spouse” is defined as a lawful spouse or a former spouse under a QDRO, which must meet specific requirements to be valid and must not alter the benefits. While ERISA generally prohibits benefit assignment, it mandates compliance with QDRO requirements, allowing pension plans to establish reasonable procedures for validating QDROs.
The Retirement Board highlights that the court order dated December 29, 2011, was issued over 18 months after Tatupu's death, which is significant because any court order deemed a Qualified Domestic Relations Order (QDRO) after this period can only take effect prospectively, as per 29 U.S.C. § 1056(d)(3)(H)(i). While this means the Plaintiff cannot receive retroactive payments, it does not prevent her from pursuing prospective benefits under 29 U.S.C. § 1056(d)(3)(H)(iv). The Plaintiff asserts entitlement to benefits under her 1997 divorce decree and a nunc pro tunc order recognizing her as a “surviving spouse” for Tatupu’s pension benefits. However, the divorce decree has not been submitted. The Retirement Board argues that the domestic relations order cannot be a QDRO because it grants "increased benefits" not available under the Retirement Plan.
Citing a Tenth Circuit case, it is noted that a nunc pro tunc order is recognized as effective before the participant's death and does not increase benefits. Additionally, the Second Circuit has determined that a QDRO issued posthumously can still be valid. However, other cases stress that an interest in pension benefits must be established prior to the participant’s death. A divorce decree can suffice to establish such interest, allowing for a later QDRO meeting the necessary criteria. In the case of Samaroo v. Samaroo, the court ruled that a nunc pro tunc amendment to a divorce decree, which did not originally establish entitlement to a pre-retirement survivor annuity, could not retroactively create benefits. The entitlement was determined at the time of the ex-husband’s death, and since there was no obligation for the plan to pay benefits at that time, the domestic relations order increased the plan's liabilities and did not qualify as a QDRO.
The majority's holding is confined to the specific circumstances of the Samaroo case and does not address whether a Qualified Domestic Relations Order (QDRO) can be modified posthumously. In Files v. ExxonMobil Pension Plan, the Third Circuit further clarified that in Samaroo, the divorce decree was silent regarding the pre-retirement survivor’s annuity, whereas in Files, the decree specifically awarded part of the deceased’s pension, thus establishing an interest before the participant's death, independent of QDRO statutory requirements. The Files court allowed the wife to secure a revised order compliant with QDRO standards to enforce her property interest. The Retirement Board's reasoning seems to align with the Samaroo decision, asserting that no benefits were payable at the time of Tatupu’s death and that the posthumous order created a new, invalid benefit. However, if the Plaintiff’s divorce decree included rights to Tatupu's pension, the Board’s analysis overlooked her pre-existing rights. A compliant postmortem order would not create new benefits but would recognize existing rights. The absence of the divorce decree prevents a definitive ruling on the Plaintiff's interest in the pension, but the case is likely resolvable through motion practice. The Court denies the Defendants' motions to dismiss for improper venue, to transfer venue, and for failure to state a claim. A joint scheduling proposal is due by April 28, 2017, with a scheduling conference set for May 3, 2017. The Defendants argue the Disability Plan has been renamed, but its relevance to the case remains unclear, and its status as a defendant will be addressed in future scheduling orders.
