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DISHINGER v. SUN PROCESS CONVERTING

September 30, 1994

CONRAD DISHINGER, Plaintiff
v.
SUN PROCESS CONVERTING, INC., Defendant.


MORAN


The opinion of the court was delivered by: JAMES B. MORAN

Plaintiff Conrad Dishinger (Dishinger) was employed by defendant Sun Process Converting, Inc. (Sun) for eight years as its shipping manager. In September 1990, Dishinger was terminated by Sun ostensibly because an important shipment was delivered three days late. While at Sun, Dishinger was covered under the employee group medical plan which paid for his cancer treatments during the summer of 1988. Dishinger's cancer was in remission for two years prior to his discharge. In 1992 Dishinger filed this ERISA action, 29 U.S.C. § 1001 et seq., alleging that the real reason behind his discharge was Sun's desire to eliminate his potentially large medical claims on their partially self-insured employee medical insurance. Sun filed this motion for summary judgment claiming that Dishinger has failed to make out a prima facie case under ERISA, or in the alternative, claiming that they have articulated a non-pretextual justification for the discharge. For the following reasons, Sun's motion is granted.

 The factual background is taken from the pleadings and the parties' Local Rule 12 statement of facts. Dishinger came to Sun in January 1982, to work as its shipping manager. His immediate supervisor was Ronald Weingardt, vice-president and part owner of Sun. In June 1988, Dishinger was diagnosed as having throat cancer and subsequently received 37 radiation treatments costing a total of $ 3700, which was covered under Sun's employee group medical plan. By September 1988, Dishinger's doctors advised him that his cancer was in remission. In 1989 Sun switched to a partially self-insured employee medical plan, which meant that Sun would be liable for the first $ 25,000 of an employee's medical bills, after which amount a reinsurer (paid for by Sun) would cover any excess.

 On September 17, 1990, Sun needed to send a shipment to its biggest client, Anchor Continental (Anchor), who was particularly insistent on receiving shipments in a timely manner. Dishinger shipped this delivery through Golden Transportation Systems (Golden), a shipper never used before by Dishinger or Sun, instead of Consolidated Freightways, a major national shipper used most frequently by Sun. The shipment to Anchor was temporarily lost by Golden and delivered three days late, much to the dismay of Anchor who threatened to take their business elsewhere. While the shipment was missing, those at Anchor and the Sun sales staff were very confused as to where the shipment actually was. Weingardt blamed Dishinger for the tardy shipment and fired him immediately.

 Following his discharge, Dishinger filed a claim for unemployment insurance benefits, which was denied by the Illinois Department of Employment Security (IDES) on the grounds that Dishinger willfully disobeyed his supervisor (Weingardt). In 1992 Dishinger filed this present action alleging that Sun's decision to terminate his employment was actually motivated by its desire to limit its potential liability under its partially self-insured employee group medical plan and therefore violated § 510 of the Employee Retirement Income Security Act (ERISA). *fn1"

 In its motion for summary judgement Sun claims, first, that Dishinger cannot make out a prima facie case for discrimination, and, second, even if a prima facie case is established it has articulated a non-pretextual reason for the discharge.

 DISCUSSION

 Our first task is to determine what legal framework governs § 510 discrimination claims. Neither the Seventh Circuit nor the Supreme Court have had much of an opportunity to comment on § 510. Both parties before us have argued this case using the McDonnell Douglas/Burdine framework used in Title VII and ADEA cases. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973); Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981). We are inclined to use that formulation as well, on the strength of Meredith v. Navistar Int'l Transportation Corp., 935 F.2d 124 (7th Cir. 1991). In Meredith, also a § 510 ERISA case, the court held that "if [the plaintiff] had made a prima facie showing that [the defendant] discharged or harassed him, and that the desire to reduce his [medical] benefits was a 'determinative factor' in that action, the burden would have shifted to [the defendant] to articulate a permissible reason for its action." Id. at 127. This analysis seems to invoke the McDonnell Douglas/Burdine framework. Furthermore, Judges Marovich and Plunkett have also found the McDonnell Douglas/Burdine scheme to be appropriate in § 510 cases. See Szymanska v. Abbott Laboratories, 1994 U.S. Dist. LEXIS 3830, 1994 WL 118154 at *14 (N.D. Ill. Mar. 29, 1994); Teumer v. General Motors, 840 F. Supp. 538, 548 (N.D. Ill. 1993) (aff'd on other grounds, 34 F.3d 542, 1994 WL 484401 (7th Cir. 1994)).

 The McDonnell Douglas/Burdine scheme for analyzing employment discrimination claims is well settled. The plaintiff has the burden of establishing a prima facie case of discrimination. Burdine, 450 U.S. at 252-53. If the plaintiff meets his burden, "the burden shifts to the [defendant] 'to articulate some legitimate nondiscriminatory reason'" for the discharge. Burdine, 450 U.S. at 253 (quoting McDonnell Douglas, 411 U.S. at 802). If the defendant satisfies its burden, the plaintiff can save his case only by demonstrating that the reason given by the defendant was a pretext for illegal discrimination. Burdine, 450 U.S. at 256. At this stage the plaintiff must demonstrate that the desire to deny benefits was a "determining factor" in the discharge. La Montagne v. American Convenience Products, Inc., 750 F.2d 1405, 1409 (7th Cir. 1984) (ADEA case).

 Under this framework Dishinger has the burden of showing a prima facie case for benefit-based discrimination. There is a split in this district as to what the elements of the prima facie case are. Judge Plunkett has required a "higher threshold" than that used under Burdine by requiring plaintiffs, as part of their prima facie case, to show that benefit discrimination was a determining factor. Teumer, 840 F. Supp. at 532. Judge Marovich, however, has specifically rejected that test in favor of a test adopted in the Third Circuit that is more consistent with Burdine. That test has three prongs: "the plaintiff must show that he (1) belongs to the protected class, (2) was qualified for the position involved, and (3) was discharged or denied employment under circumstances that provide some basis for believing that the prohibited intent was present.'" Turner v. Schering-Plough Corp., 901 F.2d 335, 347 (3d Cir. 1990) (citing Dister v. Continental Group Inc., 859 F.2d 1108, 1115 (2d Cir. 1988)); Szymanska, 1994 U.S. Dist. LEXIS 3830, 1994 WL 118154 at *15. *fn2" We align ourselves with Judge Marovich and use the Third Circuit test for two reasons. First, while Meredith does not specifically specify the elements of the prima facie case, it did cite Turner in its analysis, thus providing tacit approval. Second, we find no reason to deviate from the Burdine formulation of the plaintiff's prima facie case.

 Dishinger clearly can satisfy the first prong of the prima facie test -- prior to discharge he was covered under Sun's employee medical plan. In addition, we accept for the moment Dishinger's claim that he was qualified for the position and therefore can meet the second prong. However, Dishinger cannot satisfy the third prong of the test since he provides no evidence linking his discharge to Weingardt's specific intent to deny him medical benefits.

 Dishinger offers two theories to support his contention that his discharge was benefit-motivated. First, Dishinger claims that there is a general perception that cancer reoccurs and that a reoccurrence of cancer under Sun's self-insured medical plan would expose Sun to potentially significant liability. Unfortunately for Dishinger, there is nothing that links Weingardt to this alleged general perception. Even if we were to assume that Weingardt harbored this perception, Dishinger offers nothing that indicates that Weingardt thought that Dishinger's cancer might return (indeed, Weingardt claims he never even knew that Dishinger had cancer). Dishinger has failed to provide any evidence upon which a reasonable jury could find that Weingardt had the specific intent to deny him benefits.

 Moreover, to the extent that Dishinger's argument rests on the assumption that the mere fact that he was once sick and now does not receive benefits is enough to establish a prima facie case -- it runs directly counter to settled law on this issue. The Seventh Circuit has held that "no action lies where the alleged loss of rights is a mere consequence, as opposed to a determining factor behind the termination." Meredith, 935 F.2d at 127 (quoting Dytrt v. Mountain State Telephone and Telegraph Co., 921 F.2d 889, 896 (9th Cir. 1990). Dishinger ...


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