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Perry v. International Brotherhood of Teamsters

United States District Court, District of Columbia

March 24, 2017

HENRY PERRY, Plaintiff,


          TANYA S. CHUTKAN United States District Judge

         This case arises out of Plaintiff Henry Perry's inability to obtain lifetime retiree health benefits after working for the International Brotherhood of Teamsters (IBT) for seventeen years. Defendants IBT and the Teamsters Benefit Trust (TBT) maintain that Plaintiff was not eligible for lifetime retiree health benefits because he did not meet the required term or age criteria. Plaintiff maintains that Defendants discriminated against him in violation of federal and state law and improperly denied him benefits. For the reasons stated below, the court will GRANT both Defendants' motions to dismiss. The court will DENY IBT's motion for sanctions.

         I. BACKGROUND

         Plaintiff Henry Perry, an African-American man, worked for the International Brotherhood of Teamsters (IBT) from 1995 to 2012; first as a project organizer, then as an officer of a local union in Memphis, Tennessee, and finally as an International Trustee. (Am. Compl. ¶ 14). He was appointed Trustee to complete the term of a previous Trustee who had retired. (Id. ¶ 22). After that term ended, Perry was re-elected to a second term as Trustee, which ended on March 21, 2012. (Id. ¶ 28). Perry ran unsuccessfully for re-election again in the summer of 2011. (Id. ¶ 41).

         After losing the 2011 election, Perry applied for pension and lifetime retiree health benefits at IBT Headquarters in Washington, D.C. (Id. ¶ 43). He alleges that John Slatery, Director of the Benefit Trust Administration, informed him that at the end of his term he would be six days short for eligibility for lifetime health benefits. (Id. ¶ 44). Perry claims that he subsequently spoke with the IBT's General Secretary-Treasurer, Thomas Keegel, who assured him he would be retained for an additional six days in order to “bridge his time” so that he would be employed until age sixty-five and qualify for retiree health benefits. (Id. ¶ 46, 49).

         Perry states that, after several months, and believing he had been denied the health benefits, he sent a letter to IBT on April 6, 2012, asking for an explanation of the denial. (Id. ¶ 47). Three days later, he spoke to Slatery and IBT's General Counsel and Assistant to the General President about his benefits situation, and expressed his desire to appeal the denial of benefits. (Id. ¶ 48). According to Perry, Slatery told him that he would “forward” his appeal to the Health and Welfare Board of IBT's Benefit Trust. (Id. ¶ 50). Several days later, Perry received a letter dated April 11, 2012 from an IBT Benefits Manager informing him that he was ineligible for retiree health benefits because he had neither reached age sixty-five nor completed fifteen or more years of service. (Id. ¶ 52; IBT Mot. to Dismiss Ex. 3). The letter stated that he could contest the determination by bringing the issue to the “Administrative Committee of the International Union's health and welfare plan” by “inform[ing] the Administrative Committee, in writing, of [his] intentions and present[ing], in detail, all of the arguments and all of the evidence which [he] believe[d] supports [his] position on this issue.” (IBT Mot. to Dismiss Ex. 3). The letter included the writer's phone number and email address in case of questions. (Id.).

         Perry then sent a letter to Slatery on August 1, 2012, describing his belief that Slatery intended to submit his appeal to the Health and Welfare Board. (IBT Mot. to Dismiss Ex. 5). The next day, Perry's then-lawyer Neil Bruntrager sent a letter to Slatery stating that he had advised Perry that “the Teamsters ha[d] arbitrarily denied him a bridge of 15 days” in an apparently “discriminatory and retaliatory” manner and “because he has taken positions contrary to leadership.” (IBT Mot. to Dismiss Ex. 6). Bruntrager stated that his “research and past dealings with the Teamsters have demonstrated that there have been several instances where an individual's employment has been bridged in order to meet [the] gap period” and obtain health coverage. (Id.).

         Perry obtained new counsel at some point between 2012 and 2013, who filed a Complaint on Perry's behalf in this court on March 21, 2014. (ECF No. 1 in Perry I, No. 14-cv-484 (TSC)). The Complaint sought equitable relief under the Employee Retirement Income Security Act (ERISA) section 502(a)(1)(B), “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” (Id.). The Complaint also alleged violations of the District of Columbia Wage Payment and Collection Law (DCWPCL). (Id.). Perry then filed an Amended Complaint alleging violations of the D.C. Human Rights Act and interference with benefits in violation of ERISA, as well as the original D.C. wage claims. (ECF No. 5 in 14-cv-484; IBT Mot. to Dismiss Ex. 12). In a second Amended Complaint, Perry alleged a count pursuant to ERISA section 502(a)(3) for failure to make plan disclosures, sought “reformation of the eligibility rule to set the lowest number of years of service of any employee similarly situated to Plaintiff to whom Defendant has awarded eligibility for retiree health care benefits, ” alleged breach of fiduciary duty, and alleged D.C. wage law violations. (ECF No. 18 in 14-cv-484; id. Ex. 18).

         On July 15, 2015, this court issued a memorandum opinion in Perry I addressing IBT's motion to dismiss the second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted. The court concluded that the obligation to disclose plan documents and to provide information about review of benefits determinations lies with the Plan, not the employer, and therefore Perry could not state a claim against IBT for failure to provide information, and that Perry was not entitled to reformation in order to “share in the benefit of [] violations” of the Plan terms that he alleged other “bridged” employees had received. The court also declined to exercise supplemental jurisdiction over any D.C. claims. Perry v. Int'l Bhd. of Teamsters, 118 F.Supp.3d 1, *7 (D.D.C. 2015). The court's accompanying order stated, “For the reasons set forth in the accompanying Memorandum Opinion, it is hereby ORDERED that Defendant the International Brother of Teamsters' motion (ECF No. 19) to dismiss the Second Amended Complaint is GRANTED; and it is further ORDERED that this case is dismissed without prejudice.” (14-cv-484, ECF No. 24).[1]

         Approximately one month after this court issued its opinion in Perry I, Plaintiff's counsel sent another letter regarding Perry's benefits eligibility to the Teamsters Benefit Trust (TBT), the administrator of the IBT's employee benefit plan. (Am. Compl. ¶ 67). Two days later, on August 14, 2015, Plaintiff filed the instant suit (Perry II). Plaintiff received a response from TBT on November 25, 2015, informing him that he was sixteen days short of reaching age sixty five when his employment terminated, and that he was not eligible for vacation days to reach age sixty five because he was a Class III employee who was not eligible, without written authorization, to accrue vacation. (Id. ¶ 68-69).[2] The letter stated: “If you disagree with the Trustees' decision, you have the right to bring suit in federal court under 29 U.S.C. Section 1132(a) to challenge the Trustees' decision. Please be advised that the International Plan provides that any lawsuit brought based on a claims or appeal denial will be untimely if filed more than twelve months after the date of this letter.” (TBT Mot. to Dismiss, ECF No. 21, Paterson Decl. Ex. C).

         Perry's Amended Complaint names both IBT and TBT as Defendants, seeks benefits under ERISA section 502(a)(1)(B), alleges unlawful interference and “discrimination” under ERISA section 510 and requests relief under section 502(a)(3), and includes a count for violation of the DCWPCL. (Id. ¶ 73-92). Defendants have moved separately to dismiss the complaint, and IBT has moved for sanctions against Plaintiff for filing a suit which IBT claims is precluded and time-barred.


         A. Rule 12(b)(6)

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim “tests the legal sufficiency of a complaint.” Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted). Although a plaintiff may survive a Rule 12(b)(6) motion even where “recovery is very remote and unlikely, ” the facts alleged in the complaint “must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007) (internal quotation marks and citation omitted). Moreover, a pleading must offer more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Iqbal, 556 U.S. at 678 (internal quotation marks omitted) (quoting Twombly, 550 U.S. at 555). If the facts as alleged, which must be taken as true, fail to establish that a plaintiff has stated a claim upon which relief can be granted, the Rule 12(b)(6) motion must be granted. See, e.g., Am. Chem. Council, Inc. v. U.S. Dep't of Health & Human Servs., 922 F.Supp.2d 56, 61 (D.D.C. 2013); Clay v. Howard Univ., 82 F.Supp.3d 426, 430 (D.D.C. 2015).

         B. Sanctions

         Federal Rule of Civil Procedure 11 requires that an attorney certify that any pleading or paper she files with the court is, “to the best of [her] knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:” (1) not intended to harass or cause delay or unnecessary expense; (2) “warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;” (3) contains factual contentions that are either already supported by evidence or will likely be supported by evidence after discovery; and (4) contains denials of facts that are either warranted by the evidence or, where explicitly indicated, “reasonably based on belief or a lack of information.” Fed. R. Civ. Proc. 11(b). The court may impose sanctions based on a violation of Rule 11(b) on its own accord or based on a motion by a party. Fed. R. Civ. Proc. (11)(c). But “once [a] district court finds that a pleading is not well grounded in fact, not warranted by existing law or a good faith argument for the extension, modification or reversal of existing law, or is interposed for any improper purpose, ‘Rule 11 requires that sanctions of some sort be imposed.'” Rafferty v. NYNEX Corp., 60 F.3d 844, 852 (D.C. Cir. 1995) (citing Westmoreland v. CBS, Inc., 770 F.2d 1168, 1174-75 (D.C.Cir.1985) (emphasis added)). Sanctions are not discretionary in this Circuit if a court finds an attorney has violated Rule 11.


         Defendants IBT and TBT have both moved for dismissal under Rule 12(b)(6). IBT contends that the suit is barred by res judicata, that it is untimely, that it fails to state a claim upon which relief can be granted, and that it fails to state a Wage Act claim under the DCWPCL.[3] IBT further contends that the court should impose sanctions on Plaintiff's counsel for filing the suit. TBT argues that it is not the right defendant for any of Plaintiff's claim, and that all claims against it should therefore be dismissed.

         A. Claims against IBT

         i. Res judicata

         The doctrine of res judicata comprises claim preclusion and issue preclusion, both of which IBT argues bar Perry's suit.

         a. Claim preclusion

         Claim preclusion “precludes the parties or their privies from relitigating issues that were or could have been raised” in a prior action that resulted in a final judgment on the merits. Drake v. F.A.A., 291 F.3d 59, 66 (D.C. Cir. 2002). The doctrine applies where there is (1) a final judgment on the merits, (2) a claim by the same parties or their privies, and (3) a subsequent suit based on the same cause of action. I.A.M. Nat. Pension Fund, Ben. Plan A v. Indus. Gear Mfg. Co., 723 F.2d 944, 946-47 (D.C. Cir. 1983). Claims are based on the same cause of action when they arise out of the same “nucleus of facts, ” Drake, 291 F.3d at 66, or involve any “rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.” Stanton v. D.C. Court of Appeals, 127 F.3d 72, 78 (D.C. Cir. 1997) (internal quotation marks and citation omitted). New legal theories based on the same facts as an otherwise precluded claim are also barred.

         For purposes of IBT's separate motion to dismiss, the parties, Perry and IBT, are the same as in Perry I. The cause of action is clearly the same: Plaintiff challenges IBT's failure to take action-such as “bridging” him with an additional short-term hire or vacation days-that would have made him eligible for retiree healthcare. Perry alleges a nearly identical series of facts in both cases, which differ only by the inclusion of counsel's letter to TBT in November 2015 after the court's memorandum opinion in Perry I, and TBT's subsequent response. Perry's Amended Complaint does not allege any new cause of action based explicitly on IBT's conduct after counsel sent the letter; rather, the claim is based on IBT's conduct prior ...

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