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Deluca v. Northrop Grumman Corporation

United States District Court, N.D. Illinois, Eastern Division

March 31, 2014

ALAN CARLSON and PETER DELUCA, Plaintiffs,
v.
NORTHROP GRUMMAN CORPORATION and the NORTHROP GRUMMAN SEVERANCE PLAN, Defendants.

MEMORANDUM OPINION AND ORDER

MARIA VALDEZ, Magistrate Judge.

This matter is before the Court on Defendants' Motion to Dismiss Plaintiffs' Complaint for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure [Doc. No. 11]. For the reasons that follow, Defendants' Motion to Dismiss is granted in part and denied in part.

FACTUAL BACKGROUND

When considering a motion to dismiss, the Court accepts all well-pled facts as true and draws all reasonable inferences in favor of the plaintiff. Alicia-Hernandez v. Catholic Bishop of Chi., 320 F.3d 698, 701 (7th Cir. 2003).

On July 1, 2012 the Northrop Grumman Corporation ("Northrop") adopted and began administering the Northrop Grumman Severance Plan ("the Plan"). The Plan's stated purpose is to provide benefits to Northrop employees who are "laid off by the Company due to lack of work." (Compl. Ex. 1, at 10.) The Plan is divided into two parts: (1) a cash payment based on accrued years of service, and (2) an extension of medical, dental, and vision benefits. To be eligible for benefits, Northrop employees must be "regularly scheduled to work at least 20 hours per week" and be "notified in writing by [management] that [the employee is] covered by [the] Plan." ( Id. at 3.) The Plan excludes some classes of employees based on their positions in specific sectors and cities, and based on union representation. The Plan further states "conditions for receiving benefits, " which require that employees remain in their position until they are laid off, sign a separation agreement and release, and receive a memo from Northrop's Vice President of Human Resources stating their eligibility (the "Eligibility Memo"). ( Id. )

Plaintiffs Alan Carlson and Peter DeLuca are two former employees of Northrop. Both had positions in the Technical Services Sector, where Carlson worked as a Program Manager of Threat Simulation Systems and DeLuca was an Engineering Manager. On July 12, 2013, Carlson and DeLuca were notified that they were being laid off. Their last day of work for Northrop was August 3, 2012.

Carlson and DeLuca received continued health benefits, but did not receive the cash payment described in the Plan. They filed claims for severance benefits pursuant to the Plan on August 23, 2012 and August 27, 2012, respectively. On November 9, 2012, Carlson and DeLuca each received an adverse benefit determination pursuant to 29 C.F.R. § 2560.503-1, informing them that they would not receive the cash payment as a part of their severance package. The stated reason for the denial was that Carlson and DeLuca did not receive the Eligibility Memo. Deluca appealed the adverse benefit determination on December 3, 2012. Carlson filed his appeal on January 3, 2013. Their appeals were both denied on February 1, 2013.

On April 9, 2013, Plaintiffs filed a complaint seeking severance benefits from the Plan pursuant to two provisions of the Employee Retirement Income Security Act ("ERISA"): Section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), which governs suits for payments owed under the terms of an employee benefit plan, and Section 510, 29 U.S.C. § 1140, based on alleged interference with ERISA-protected rights. Plaintiffs also filed a state law claim for breach of contract against Northrop. Defendants seek dismissal of Plaintiffs' Section 502 claim, arguing that Plaintiffs are ineligible for benefits under the terms of the Plan. Furthermore, Defendants argue that Plaintiffs do not identify an "adverse employment action" or an entitlement to benefits, both of which are required in order to bring suit under Section 510. Finally, Defendants argue that Plaintiffs' state law claims are preempted by ERISA and therefore must be dismissed. The Court will grant the motion to dismiss as to the state law claims, but denies the remainder of the motion.

DISCUSSION

This Court has jurisdiction pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132(a)(3). By reason of the parties' consent under 28 U.S.C. § 636(c)(1), this Court has authority to enter final orders on the motion presented.

I. MOTION TO DISMISS STANDARD OF REVIEW

Federal Rule of Civil Procedure ("Rule") 12(b)(6) requires a court to accept all of a plaintiff's well-pled facts as true, as well as reasonable inferences drawn therefrom. Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of a complaint, not to decide the merits of a case. Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990). A plaintiff must provide only a "short and plain statement of the claim showing that the pleader is entitled to relief" in order to defeat a motion to dismiss. Fed.R.Civ.P. 8(a)(2); Bell Atl. v. Twombly, 550 U.S. 544, 555 (2007). The complaint must also "suggest that the plaintiff has a right to relief, raising that possibility above a speculative level.'" E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555).

II. ANALYSIS

A. Failure to State a Claim ...


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