UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF ILLINOIS ROCK ISLAND DIVISION
November 16, 2009
DONALD J. TOMPKINS, PLAINTIFF,
CENTRAL LABORERS' PENSION FUND, DEFENDANT.
The opinion of the court was delivered by: Joe Billy McDADE United States District Judge
ORDER & OPINION
Before the Court is Magistrate Judge Cudmore's Report and Recommendation ("R&R") (Doc. 12) addressing Defendant's Motion to Dismiss (Doc. 8). The R&R recommends denial of the Motion to Dismiss. Defendant has filed Objections (Doc. 13) to the R&R and Plaintiffs have responded to these Objections (Doc. 15). For the reasons that follow, the R&R is adopted, and Defendant's Motion to Dismiss is denied.
Plaintiff filed this complaint on February 12, 2009, alleging that Defendant had violated the Employee Retirement Income Security Act ("ERISA") in its termination of disability benefits paid to him. In 1999, after working as a laborer in Laborers' Local 309, Rock Island, Illinois for over twenty years, Plaintiff applied for disability benefits pursuant to Defendant's Pension Fund Plan ("Plan").*fn1 Plaintiff's application for benefits was approved, and he received disability benefits beginning in August of 1999, retroactive to January 1999. During this period, Plaintiff engaged in work as a non-laborer, which he argues was not prohibited by the Plan's disability benefits rules.*fn2 In June of 2007, Defendant informed Plaintiff that an audit had revealed that his current employment disqualified him from continuing to receive disability payments under the Plan's terms. This lawsuit alleges that this decision by Defendant, as well as Defendant's alleged failure to properly notify Plaintiff of the Plan's terms, violated the Plan, and thus, ERISA.
On March 9, 2009, Defendant filed a Motion to Dismiss Plaintiff's Complaint, alleging that the Complaint as filed violated Federal Rule of Civil Procedure 10(b). (Doc. 8). Plaintiff responded to this Motion to Dismiss (Doc. 11), and on June 1, 2009, Magistrate Judge Cudmore issued an R&R recommending that the Motion to Dismiss be denied (Doc. 12). Defendant Objected to the R&R on June 17, 2009 (Doc. 13), and Plaintiff, in support of the R&R, filed a Memorandum of Law in Opposition to Defendant's Objection (Doc. 15).
In its Motion to Dismiss, Defendant argued that Plaintiff's Complaint should be dismissed pursuant to Federal Rule of Civil Procedure 10(b). Federal Rule of Civil Procedure 10(b) provides, in pertinent part, that "[a] party must state its claims.in numbered paragraphs, each limited as far as practicable to a single set of circumstances..If doing so would promote clarity, each claim founded on a separate transaction or occurrence.must be stated in a separate count." The Rule does not indicate what penalty attaches to violation of the Rule, but courts have held that dismissal of the complaint, or dismissal with leave to file an amended complaint, is appropriate.*fn3 See, e.g., Three D Dep't, Inc. v. K Mart Corp., 670 F.Supp. 1404, 1409 (N.D. Ill.1987) (dismissal of complaint for repleading where count combined three separate factual occurrences) (citing United States v. American Linen Supply Co., 141 F.Supp. 105, 116 (C.D. Ill.1956)) ("courts retain the inherent power to order compliance with the rule").
Plaintiff's Complaint asserts two "causes of action" as alternatives to one another.*fn4 The first cause of action is based on Defendant's allegedly wrongful suspension of his benefits in June 2007, and asserts a right to relief under two clauses of ERISA: 29 U.S.C. § 1132(a)(1)(B) and 29 U.S.C. § 1132(a)(3)(B)(ii). 29 U.S.C. § 1132(a)(1)(B) allows a beneficiary to bring an action to recover benefits or enforce his rights under a plan; 29 U.S.C. § 1132(a)(3)(B)(ii) allows equitable relief to enforce a provision of ERISA or of a plan. The second "cause of action" seeks relief under both of these provisions because of Defendant's allegedly deficient notice to Plaintiff of the Plan's rules governing suspension of benefits.
Defendant asserted in its Motion to Dismiss that, because each cause of action alleges the violation of two sections of ERISA, the Complaint "confusingly and improperly commingles separate and distinct statutory causes of action in such a way that will only serve to unnecessarily complicate this Honorable Court's review of the Plaintiff's claims." (Doc. 9 at 2). In support of this argument, Defendant cites several District Court cases from the Northern District of Illinois, the Northern District of Iowa, and the Northern District of Ohio; it alleges that these courts have held that commingling legal theories in violation of Rule 10(b) requires dismissal or amendment of the complaint. (Doc. 9 at 5).
Plaintiff responded to Defendant's Motion to Dismiss, relying on the "separate transaction or occurrence" language of Rule 10(b) to argue that the Complaint was properly framed, since each "cause of action" addresses a separate action by Defendant that allegedly violated ERISA. In addition, Plaintiff cites Wright & Miller's Federal Practice and Procedure's explanation that Rule 10(b) requires separate counts only for "separate transactions or occurrences," not for separate legal theories based on a single event. See 5A FED. PRAC. & PROC. CIV. §§ 1324 & 1325 (3d ed.).
Magistrate Judge Cudmore's R&R recommended that Defendant's Motion to Dismiss be denied, as Plaintiff's Complaint did not violate Rule 10(b), though "it would have been clearer for Plaintiff to set out each statutory subsection into separate counts." (Doc. 12 at 8). After reviewing the differing legal standards under 29 U.S.C. § 1132(a)(1)(B) and 29 U.S.C. § 1132(a)(3)(B)(ii), he noted that the language of Rule 10(b) "literally applies to separate 'transactions or occurrences,' not to separate statutory remedies based on the same transaction." (Doc. 12 at 8). In addition, he found that "requiring Plaintiff to replead is not necessary to promote clarity," and that any uncertainty about the relief that Plaintiff seeks is best resolved by discovery and dispositive motions, not by dismissal under Rule 10(b). (Doc. 12 at 10).
Defendant objected to the R&R's conclusion that dismissal is not required by Rule 10(b) by arguing that "the purpose of Rule 10(b) is to facilitate a clear presentation of the issues, which will permit the court to rule on an entire count." (Doc. 14 at 3 (emphasis in original)). In addition, Defendant argued that the Complaint's length and complexity "prejudices the Defendant in formulating its responsive pleading." (Doc. 14 at 4). Plaintiff responded to these Objections primarily by noting again that the two counts are based on "separate transactions or occurrences," and thus are in compliance with Rule 10(b), and that the fact that they each contain two legal theories does not violate Rule 10(b). (Doc. 15).
STANDARD OF REVIEW
A district court reviews de novo any portion of a Magistrate Judge's Report and Recommendation to which a "specific written objection has been made." FED. R. CIV. P. 72(b)(3). "The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions." Id.
In its Motion to Dismiss and its Objection to Magistrate Judge Cudmore's R&R, Defendant argues that Rule 10(b) "requires" separate counts for each legal theory, and that Plaintiff's Complaint thus violates Rule 10(b) and must be dismissed or amended. The Court disagrees. As noted above, the language of Rule 10(b) clearly requires only that claims under "separate transactions or occurrences" be set forth in separate counts.
In addition, as pointed out by Magistrate Judge Cudmore, the Seventh Circuit has stated that "[a]lthough it is common to draft complaints with multiple counts, each of which specifies a single statute or legal rule, nothing in the Rules of Civil Procedure requires this. To the contrary, the rules discourage it." Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073, 1078 (7th Cir. 1992).*fn5 Further, in N.A.A.C.P. v. American Family Mutual Insurance Co., the Seventh Circuit noted that "[o]ne set of facts producing one injury creates one claim for relief, no matter how many laws the deeds violate."*fn6 978 F.2d 287, 292 (7th Cir. 1992). Citing Bartholet, the court found that
Putting each legal theory in a separate count is a throwback to code pleading, perhaps all the way back to the forms of action; in both, legal theory and facts together created a "cause of action." The Rules of Civil Procedure divorced factual from legal aspects of the claim and replaced "cause of action" with "claim for relief" to signify the difference.
Id. (citing 953 F.2d at 1078).
On the other hand, it is true that several District Court cases from this Circuit have indicated a preference for separate counts for each legal theory.*fn7 In Demes v. ABN Amro Services Co., Inc., the Northern District of Illinois noted that Rule 10(b) "has been interpreted to require separate counts for each distinctive statutory and constitutional claim." 01-c-0967, 2001 WL 563813, *2 (N.D. Ill. May 23, 2001). The court in Casler v. Janus also used this interpretation of Rule 10(b), and dismissed a count that confusingly "combin[ed] potential federal and state causes of action for both false arrest and extended detention." 97-c-5049, 1998 WL 151811, *1 (N.D. Ill. Mar. 26, 1998). See also Republic Tobacco, L.P. v. North Atlantic Trading Co., 254 F.Supp.2d 985, 1005 fn. 18 (N.D. Ill. 2002) (noting separate-counts-for-each-theory interpretation, but not dismissing complaint); Craig v. Dabrowski, 08-c-405, 1999 WL 412581, *1 fn. 3 (N.D. Ill. June 8, 1999) (noting this interpretation, but requiring amendment of complaint that mingled claims regarding two different events in single counts); Goerlich v. Davis, 91-c-1743, 1991 WL 195772, *2 (N.D. Ill. 1991).
However, a number of District Court cases from this Circuit have not used this interpretation of Rule 10(b).*fn8 Given the language of Rule 10(b) and the Seventh Circuit's statements in Bartholet and NAACP, the Court finds persuasive the cases cited at footnote 8, and holds that Plaintiff's Complaint need not be dismissed under Rule 10(b). Though some District Courts have interpreted Rule 10(b) as suggested by Defendant, the Court does not find dismissal here to be necessary under the Rule, as Plaintiff asserts separate counts for each transaction. The fact that he combines two legal theories for each transaction is not fatal to the Complaint, as Defendant can understand the claims that are made against it. As noted by the ("Rule 10(b) requires dismissal and repleading only where the complaint is not clear and understandable."); Federal Deposit Ins. Corp. v. Miller, 781 F.Supp. 1271, 1278 fn. 5 (N.D. Ill. 1991) ("plaintiffs may plead counts which rely on different theories of recovery, if the theories are based on the same facts"); Mathes v. Nugent, 411 F.Supp. 968, 972 (N.D. Ill.1976)) ("All [Rule 10(b)] requires is that each claim founded on a separate transaction or occurrence be stated in a separate count 'whenever a separation facilitates the clear presentation of the matters set forth.'"); American Linen Supply Co., 141 F.Supp. at 117 ("If a single transaction or occurrence gives rise to several claims, they may properly be pleaded in a single count.").
In other cases not directly addressing Rule 10(b), courts have also agreed that different legal theories pertaining to the same facts need not be set forth in separate counts. See Rossario's Fine Jewelry, Inc. v. Paddock Publications, Inc., 443 F.Supp.2d 976, 977-78 (N.D. Ill. 2006) (discussing "mistaken practice of carving up a single claim (which is the relevant concept in federal pleading) by setting out different theories of recovery in different counts"); Orthodontic Centers of Illinois v. Michaels, 407 F.Supp.2d 934, 935 (N.D. Ill. 2005) ("concept of a separate count thus does not properly encompass the statement of what is no more than a different theory of recovery on the same claim"); P.M.C., Inc. v. Ekstein, 91-c-3709, 1992 WL 114945, *2 (N.D. Ill. May 14, 1992) ("It is not necessary to separate each distinct legal theory into a separate count so long as the pleadings afford the opposing party fair notice of its claims."); Verlan, Ltd. v. John L. Armitage & Co., 695 F.Supp. 955, 957 (N.D. Ill. 1988) ("It is unnecessary.to separate each distinct legal theory into a separate count.").
Seventh Circuit, Plaintiff was not even necessarily required to specify any legal basis for his claims. Bartholet, 953 F.2d at 1078.*fn9
Defendant's claim that it will be prejudiced by the combined legal claims of Plaintiff's Complaint is rejected. Defendant obviously can understand which of its actions Plaintiff complains of, as it discusses them clearly in its Motion to Dismiss.*fn10
In addition, the fact that there are two legal bases for relief underlying each assertedly wrongful action by Defendant does not prejudice it, either, as, even if the two counts were split into four, Defendant would still have to respond to each of them.*fn11
The Court finds that Rule 10(b)'s terms require only that "separate transactions or occurrences" be pled in separate counts, and that Plaintiff's Complaint is thus in compliance with the Rule. This conclusion is further supported by the Seventh Circuit's statements as to the nature of federal pleading in Bartholet and NAACP, and by a wealth of District Court precedent from this Circuit. The Court respectfully disagrees with the handful of District Court cases that follow the interpretation that each legal theory must be set forth in a separate count. Finally, the Court finds that there is no prejudice to Defendant in allowing Plaintiff's Complaint to stand. Therefore, Magistrate Judge Cudmore's R&R (Doc. 12) is ADOPTED, Defendant's Objections to the R&R (Doc. 13) are OVERRULED, and Defendant's Motion to Dismiss (Doc. 8) is DENIED. This matter is REFERRED to Magistrate Judge Cudmore for further pretrial matters.
Entered this 16th day of November, 2009.