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Beesley v. International Paper Co.

February 4, 2009

PAT BEESLEY, ET AL., AS REPRESENTATIVE OF A CLASS OF SIMILARLY SITUATED PERSONS, AND ON BEHALF OF THE INTERNATIONAL PAPER COMPANY SALARIED AND HOURLY SAVINGS PLANS, PLAINTIFFS,
v.
INTERNATIONAL PAPER COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Herndon, Chief Judge

MEMORANDUM AND ORDER

I. INTRODUCTION

This case is a class action for breach of fiduciary duty brought pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461. On April 30, 2008, Plaintiffs were granted leave to file an amended complaint. (Doc. 168). The next day, May 1, 2008, Plaintiffs filed a first amended complaint (Doc. 169), which revised certain allegations and added/terminated certain parties in response to discovery. Essentially, however, Plaintiffs claims remain the same. Plaintiffs allege that they are participants in employee benefit plans of which Defendants are fiduciaries, all within the meaning of ERISA. See 29 U.S.C. § 1002(2)(A), (3), (7), (21)(A). Plaintiffs allege that Defendants have breached their fiduciary duties under ERISA. See 29 U.S.C. § 1104; 29 U.S.C. § 1109. Plaintiffs assert claims under ERISA § 502(a)(2) and (a)(3), 29 U.S.C. § 1132(a)(2) and (a)(3), and were granted certification of a class of similarly-situated persons (Doc. 240).

Now before the Court is Defendants' motion for more definite statement and to strike jury demand. (Doc. 177). The present motion for more definite statements and to strike jury demand has been fully briefed (see Docs. 188, 195, and 197). Having fully considered the facts and arguments presented by both sides, the Court DENIES Defendants' motion for more definite statement and GRANTS Defendants motion to strike jury demand. (Doc. 177).

II. Motion for a More Definite Statement

Defendants have moved to require Plaintiffs to provide a more definite statement under Rule 12(e) of the FEDERAL RULES OF CIVIL PROCEDURE alleging that (among other things): Plaintiffs plead no new facts to support their "stock drop" claim, and no facts from which Defendants could reasonably infer the basis for the claim; Plaintiffs fail to allege when the IP stock allegedly became imprudent, i.e., the date upon which the Defendants allegedly had a duty to remove the IP stock from the Plans by selling if off; and Plaintiffs fail to plead their accusations of fraud and concealment with particularity .

Rule 12(e) permits a filing of a motion for more definite statement when a pleading "is so vague or ambiguous that the party cannot reasonably prepare a response." FED.R.CIV.P.12(e). Such relief applies to a small class of pleadings that, though "sufficiently intelligible for the court to be able to make out one or more potentially viable legal theories on which the claimant might proceed," nonetheless are "so vague or ambiguous that the opposing party cannot respond, even with a simple denial, in good faith or without prejudice to himself." Vician v. Wells Fargo Home Mortgage, No. 05-cv-144, 2006 WL 694740, at *9 (N.D. Ind. Mar. 16, 2006). See also Metso Paper, Inc. v. Enerquin Air Inc., No. 06-C-1170, 2007 WL 486635, at *5 (E.D. Wis. Feb. 12, 2007) (noting that "Rule 12(e) motions...are generally disfavored and are not intended as a substitute for the...normal discovery process."); Parus v. Cator, No. 05-C-0063-C, 2005 WL 1458770, at *3 (W.D. Wis. June 17, 2005) ("Rule 12(e) motions are rarely granted...; indeed, ...judges are admonished to exercise their discretion sparingly in ordering more definite statements."). The rule is aimed at unintelligibility rather than lack of detail. Jones v. Dave Miller Buick, No. 98-C-5666, 1999 WL 116217, at *1 (N.D. Ill. Mar. 2, 1999). If the plaintiff's complaint is sufficiently definite to enable the defendants to know what is charged, it is sufficiently definite to overcome a Rule 12(e) motion. Id.

Also worth noting is that claims of breach of fiduciary duty under ERISA are subject to no pleading standard more stringent than Rule 8 of the FEDERAL RULES OF CIVIL PROCEDURE, which requires a plaintiff to present only "a short and plain statement of the claim showing that the pleader is entitled to relief" and states that "[e]ach averment of a pleading shall be simple, concise, and direct." FED.R.CIV. P.8(a)(2), (e)(1). See also In re Enron Corp. Sec., Derivative & ERISA Litig., 284 F. Supp. 2d 511, 652 (S. D. Tex. 2003) ("ERISA does not have heightened pleading requirements but is subject to the notice pleading standard of [Rule 8], i.e., ...a short and plain statement of the claim showing that the pleader is entitled to relief...and that provides a defendant with fair notice of the claim against him."). Although Defendants suggest that Plaintiffs must meet FEDERAL RULE OF CIVIL PROCEDURE 9(b)'s heightened "particularity pleading" standard, Courts generally hold that a claim for breach of fiduciary duty under ERISA are not subject to the heightened pleading requirements eventhough some of the allegations of breach of fiduciary duty under ERISA are arguably sound in fraud or deceit.Spano v. Boeing Company, No. 06-cv-743-DRH, 2007 WL 1149192, at *2 (S.D. Ill. April 18, 2007). See also In re AEP ERISA Litig., 327 F. Supp. 2d 812, 822 (S. D. Ohio 2004) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002) (holding that plan participants were not required to satisfy heightened pleading requirements for alleged material misstatements or omissions by plan fiduciaries); Rankin v. Rots, 278 F. Supp. 2d 853, 866 (E.D. Mich. 2003) ("While some of the allegations in support of [the ERISA] claim are similar to fraud allegations,...the gravamen of [the plaintiff's] claim is grounded in ERISA.

The heightened pleading requirement under Rule 9(b) will not be imposed where the claim is for a breach of fiduciary duty under ERISA).

Defendants further argue that Rule 12(e) should not be read literally citing Teradyne v. Clear Communications Corp., 707 F. Supp. 353, 354 (N.D. ill 1989) (noting that "[t]he rule that a more definite statement should not be granted unless response is impossible or unintelligible to the point of incomprehensibility is found in the cases, but taken literally, cannot be the law."). As the Plaintiffs' correctly point out "incomprehensibility" is not an element of the rule and Teradyne's finding that it should not be part of the analysis does not affect the Court's analysis. Further, Teradyne noted that when determining whether a more definite statement should be required, the Court must look at what sort of answer would be submitted by the defendants to the complaint and "if, after complaint and answer are filed, the court would have no clear notion of the essence of the case, then a more definite statement is probably needed." Id. at 354. As Plaintiffs allege, the amended complaint is essentially the same as the original pleading previously answered by Defendants.

Defendants' primarily complaint is that the first amended complaint lacks detail supporting its claim, including specific dates on which the Plan's investment options became imprudent and facts to support their "stock drop" claim. The first amended complaint alleges claims under ERISA § 502(a)(2) and (a)(3) based on Defendants' alleged breaches of fiduciary duty. Essentially, Plaintiffs' claims remain the same although the first amended complaint revises certain allegations and adds/terminates certain parties in response to discovery. From a reading of the Complaint, it is obvious to the Court that this is not one of the unusual cases in which purported violations of Rule 8 warrant a more definite statement. It is possible for persons of reasonable intelligence to discern from a reading of the Complaint, the nature of Plaintiff's claims.

While Defendants assert that Plaintiffs' failure to allege a "date of imprudence" prevents Defendants from developing defenses based upon conditions prevailing at various times within International Paper and precludes Defendants' experts from determining what losses would be incurred by Plaintiffs over the unspecified time period, Defendants fail to cite a relevant case supporting their proposition that a more definite statement is warranted when Plaintiffs omit the "date of imprudence" in a ERISA case. Plaintiffs, however, argue that their case is more analogous to those types of cases where courts have not required specific dates, because the events occurred over an extended period of time or the dates were uncertain. See Doe v. Bayer Corp, 367 F. Supp. 2d 904, 916-17 (M.D.N.C. 2005) (finding that plaintiff's history of vaccinations and symptoms is the type of information "that discovery procedures are designed to manage"); Geir v. Educational Serv. Unit No. 16, 144 F.R.D. 680, 685-86 (D. Nev. 1992) (denying request for specific date of instances of abuse because those dates were properly left for discovery). The Court agrees. A plaintiff is not required to set out all of the details of his claim as such details "are available to the defendant through the utilization of...pretrial discovery techniques."Garza v. Chicago Health Clubs, Inc., 329 F. Supp 936, 942 (N.D. Ill. 1971). See also George v. Kraft Foods Global, Inc., Case No. 06-cv-798-DRH, 2007 WL 853998, at *2 (S.D. Ill. Mar. 16, 2007) (noting that motions for more definite statement are not intended as a substitute for obtaining factual details through the normal discovery process). As plaintiffs argue, the "date of imprudence" is an extended period of time. The alleged breaches occurred and the investment options were imprudent over a long period of time and the precise date of that imprudence is available through discovery.

Further, Defendants' discovery demonstrates their ability to obtain that information. While Defendants claim that Plaintiffs fail to allege specific dates or what options were imprudent and are unable to engage in meaningful discovery because of the insufficiency of the first amended complaint, Defendants interrogatories seek that exact information as well as other information Defendants claim is lacking from the first amended complaint. (See Doc. 188, Ex. 1, pp. 4-7). Defendants interrogatories demonstrate that Defendants have an understanding of Plaintiffs' claims. Therefore, the first amended complaint is not so unintelligible that Defendants cannot frame an answer, thus warranting a more definite statement under Rule ...


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