United States Court of Appeals
For the First Circuit
No. 06-2493
EMORY ZIPPERER,
Plaintiff, Appellant,
v.
RAYTHEON COMPANY, INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Mark L. Wolf, U.S. District Judge]
Before
Lynch, Circuit Judge,
Cyr, Senior Circuit Judge,
and Howard, Circuit Judge.
Joseph P. Dever, with whom Theresa Finn Dever and Riley &
Dever, P.C. were on brief, for appellant.
Constance M. McGrane, with whom James F. Kavanaugh, Jr. and
Conn Kavanaugh Rosenthal Peisch & Ford, LLP were on brief, for
appellee.
July 12, 2007
HOWARD, Circuit Judge. In this appeal, Plaintiff Emory
Zipperer seeks reversal of the district court's grant of judgment
on the pleadings in favor of his former employer, Raytheon Company,
Inc. ("Raytheon"). Zipperer asserted Massachusetts state law
claims of negligence, equitable estoppel and negligent
misrepresentation against Raytheon after Raytheon provided him with
an erroneous estimate of his retirement benefits which, he claims,
led to his voluntary early retirement. The district court,
essentially adopting a magistrate judge's report and
recommendation, ruled that Zipperer's claims are preempted by the
Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001
et seq. We affirm.
I. FACTUAL BACKGROUND
We state the facts as pleaded in the complaint. See
Mass. Nurses Ass'n v. N. Adams State Reg'l Hosp., 467 F.3d 27, 31
(1st Cir. 2006). In November 1972, Zipperer began working for
United Engineers & Constructors, Inc. ("UEC"), a Raytheon
subsidiary, as a field engineer in UEC's nuclear power division.
Zipperer began participating in the UEC retirement plan in January
1975.
At Raytheon's request, in November 1990 Zipperer began
working for another Raytheon subsidiary, Raytheon Services, Nevada
("RSN"), a specialty company used by Raytheon solely for the
purpose of administering work for the United States Department of
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Energy ("DOE"). While working at RSN, Zipperer remained a Raytheon
employee, and no funds were transferred from the UEC retirement
plan to the RSN pension plan. However, the Raytheon Benefit
Center, which administered both plans, adjusted Zipperer's service
date for the RSN plan to reflect his previous service at UEC.
Zipperer's employment at RSN ended in October 1993. The
next month, Zipperer began working for Raytheon Engineers &
Constructors, ("REC"), a successor to UEC. Upon his hiring,
although no trust funds were transferred, REC credited Zipperer for
his prior years of service with UEC for purposes of calculating his
pension benefits. As with the Raytheon-affiliated UEC and RSN
plans, the REC benefit plan was also administered by the Raytheon
Benefit Center. On December 30, 1995, according to the Raytheon
Benefit Center, RSN's pension trust funds were transferred to the
Bechtel Nevada Employee Retirement Plan when Bechtel Nevada
replaced RSN as a DOE contractor. Neither Raytheon nor RSN
notified Zipperer's then-current employer, REC, that the RSN trust
fund monies attributable to Zipperer's vested RSN benefit, which
also included his prior service at UEC, had been transferred to
Bechtel. None of the Raytheon pension plans was amended to reflect
the transfer. Thus, when REC was purchased by Washington Group
International ("WGI") in July 2000, Raytheon calculated an
overstated benefit amount attributable to Zipperer, erroneously
including amounts attributable to his original UEC service, which
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had already been subsumed into the RSN plan eventually transferred
to Bechtel. In other words, both Bechtel and Raytheon were
including Zipperer's original UEC service time in their respective
pension calculations.
In late 1999, at age 55, Zipperer requested from REC an
estimate of his pension benefit, noting his prior service with UEC
and "Raytheon Company(s)." According to the benefit computation
subsequently provided to him by REC, Zipperer could expect to
receive a monthly benefit of $1,100.17 if he chose a single life
annuity with no right of survivorship, $1,063.11 if he chose a ten
year "certain and continuous option," and $980.55 if he chose a
joint and survivor annuity. Basing their decision on the benefit
estimate provided by Raytheon, Zipperer and his wife decided to
retire, shortly after the sale of REC to WGI. At the time of his
retirement, in September 2000, Zipperer was 56 years old and was
earning $107,484 annually as a Project Control Manager.
Zipperer, who chose the joint and survivor annuity,
subsequently began receiving monthly pension payments from Raytheon
of $840.64, approximately $140 less than the previous estimate. In
June 2001, the Raytheon Benefit Center advised Zipperer in writing
that his pension benefits had been overstated and that he was
entitled to a monthly benefit of only $400.06. Zipperer, who
concedes that he is currently receiving a pension from Bechtel, the
amount of which takes into consideration his service time at RSN
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and UEC, was unsuccessful in his internal appeals of the benefit
determination. After exhausting the internal appeals process,
Zipperer filed a complaint against Raytheon in Massachusetts
Superior Court alleging negligence, equitable estoppel and
negligent misrepresentation. Raytheon timely removed the case to
federal court, and subsequently moved for judgment on the pleadings
on the ground that Zipperer's claims were preempted by ERISA.
After a hearing, a magistrate judge recommended allowing the
motion. The magistrate judge concluded that:
Allowing a cause of action to proceed for the
negligence in making the representation or the
negligence in maintaining and transferring the
pertinent records amounts to an alternative
enforcement mechanism to enforce (or estop the
employer from denying) extra-contractual
benefits. Such claims inevitably and directly
conflict with the carefully chosen and
carefully limited remedies provided under
ERISA . . . . Regardless of the label of the
state law claims, in essence they seek extra-
contractual benefits not authorized by the
terms of the Plan. Such an end run around the
carefully crafted benefits Raytheon chose to
provide amounts to an attempt to authorize
remedies beyond those provided by the Plan.
Report and Recommendation at 10.
Zipperer objected to the magistrate judge's
recommendation, see Fed. R. Civ. P. 72, but the district court
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adopted the recommendations in all material respects.1 This appeal
followed.
II. DISCUSSION
We review de novo the district court's grant of judgment
on the pleadings. Mass. Nurses Ass'n, 467 F.3d at 31. We view the
facts contained in the pleadings in the light most favorable to the
nonmovant and draw all reasonable inferences in his favor. Aponte-
Torres v. Univ. of P.R., 445 F.3d 50, 54 (1st Cir. 2006). Judgment
on the pleadings is proper "only if the uncontested and properly
considered facts conclusively establish the movant's entitlement to
a favorable judgment. Id.
Zipperer advances several theories on appeal. First, he
argues that his claims do not relate to Raytheon's retirement plan,
and do not duplicate, supplement or supplant ERISA's civil
enforcement provisions. Instead, he says, his claims relate only
to Raytheon's "independent legal obligation" to keep proper
records. He further argues that his claims do not relate to the
retirement plan, because he is seeking only negligence damages and
not reinstatement of promised benefits. Finally, Zipperer
maintains that even if preemption would otherwise be appropriate,
the district court erroneously concluded that Raytheon was acting
as "an ERISA employer" during the relevant time period.
1
Both the magistrate judge and the district court provided Zipperer
with opportunities to amend his Complaint. He did not accept
either invitation.
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Our analysis begins with § 514 of ERISA, which provides
that ERISA preempts "any and all State laws insofar as they may now
or hereafter relate to any employee benefit plan . . . ."2 29
U.S.C. § 1144(a). "The term 'State law' includes all laws,
decisions, rules, regulations, or other State action having the
effect of law, of any State." 29 U.S.C. § 1144(c)(1). A law
"relates to" an employee benefit plan "if it has a connection with
or reference to such a plan." Ingersoll-Rand Co. v. McClendon, 498
U.S. 133, 139 (1990) (quoting Shaw v. Delta Air Lines, Inc., 463
U.S. 85, 96-97 (1983)). A state law can be considered "related to"
a benefit plan--and thus preempted--"even if the law is not
specifically designed to affect such plans, or the effect is only
indirect." Id. (quoting Pilot Life Insurance Co. v. Dedeaux, 481
U.S. 41, 47 (1987)).
While ERISA's preemption is not boundless, it is far
reaching. In determining the reach of ERISA preemption, the
Supreme Court has cautioned against a literal reading of ERISA
§514(a)'s "relate to" standard, and ruled that courts must "'look
instead to the objectives of the ERISA statute as a guide to the
scope of the state law that Congress understood would survive.'"
Hampers v. W.R. Grace & Co., 202 F.3d 44, 51 (1st Cir. 2000)
(quoting N.Y. State Conference of Blue Cross & Blue Shield Plans v.
2
There is no dispute that the Plan at issue in this case is an
"employee benefit plan," within the meaning of ERISA.
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Travelers Ins. Co., 514 U.S. 645, 656 (1995)). ERISA's objectives
include providing a "uniform national administration of ERISA
plans" and avoiding inconsistent state regulation of such plans.
Danca v. Private Health Care Sys., Inc.,185 F.3d 1, 7 (1st Cir.
1999) (citing Travelers, 514 U.S. at 656-58). Three categories of
state regulation that have been identified as conflicting with
these objectives are: 1) those that mandate employee benefit
structures or their administration; 2) those that bind plan
administrators to a particular choice; and 3) causes of action that
provide alternative enforcement mechanisms to ERISA's own
enforcement scheme. Travelers, 514 U.S. at 658-59; Hampers, 202
F.3d at 44. Looking to the real nature of the plaintiff's claims,
regardless of how they are characterized in his complaint,
Hampers, 202 F.3d at 51, we conclude that the first and third
categories of conflicting state regulation are implicated here.
As mentioned, Zipperer first argues that his suit does
not relate to Raytheon's retirement plan, and does not duplicate,
supplement or supplant ERISA's civil enforcement provisions. We
disagree. The complaint's three counts rely on the common claim
that Raytheon's negligent recordkeeping led to his reliance on an
erroneous estimate of his retirement benefits. In our view, even
a narrow reading of section 514(a)'s "related to" provision yields
a conclusion that Zipperer's claims are preempted, and that is
because the claims can only be evaluated with respect to Raytheon's
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recordkeeping responsibilities for the plan. Such responsibilities
were part and parcel of Raytheon's plan administration. Subjecting
Raytheon's plan administration to the state law scrutiny Zipperer
seeks would conflict with ERISA's proscription against state law
"mandat[ing] plan administration" and would also impermissibly
create "an alternative enforcement scheme" to ERISA's own
recordkeeping and reporting requirements. Travelers, 514 U.S. at
658-59; Hampers, 202 F.3d at 51. Moreover, allowing a claim to
proceed under Massachusetts law would inexorably--and
impermissibly--lead to inconsistent state regulations, as state
courts "develop different substantive standards applicable to the
same employer conduct, requiring the tailoring of plans and
employer conduct to the peculiarities of the law of each
jurisdiction. Such an outcome is fundamentally at odds" with
ERISA's goal of uniformity. McClendon, 489 U.S. at 142.
If we had any doubt about whether Zipperer's claims are
preempted, we note that we faced a nearly identical situation in
Carlo v. Reed Rolled Thread Die Co., 49 F.3d 790 (1st Cir 1995).
There, the plaintiff filed state law misrepresentation claims
against his employer after he accepted an early retirement offer
which, it turns out, was based on inaccurate information provided
by the employer. Id. at 792. We affirmed the dismissal of the
complaint on preemption grounds, noting that an analysis of
plaintiff's claims would "ultimately depend on an analysis" of the
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ERISA plan at issue, to which the claims were thus "inseparably
connected." Id. at 795. Similarly, Zipperer's claims are
"inseparably connected" to the Raytheon plan and its
administration. See also Degnan v. Publicker Indus., Inc., 83 F.3d
27 (1st Cir. 1996) (affirming dismissal, on preemption grounds, of
plaintiff's state law misrepresentation claims against a former
employer who allegedly reneged on certain promises it made
regarding plaintiff's retirement benefits).
Also instructive is Danca. In that case, the plaintiff
and her family members sued an ERISA health insurer and utilization
review firm for alleged negligence in the course of treatment
precertification. Danca, 185 F.3d at 2. We affirmed the dismissal
of claims based on negligent supervision and training of
precertification personnel because such claims would "indisputably
create a threat of conflicting and inconsistent state and local
regulation of the administration of ERISA plans." Id. at 7. Our
decision in Danca reflected the concern that "[d]ifferent states
could apply different standards for what constitutes a negligent
precertification training or practice," a result ERISA's
preemption clause was designed to avoid. Id.
Our concern here is no different. As we see it, Zipperer
is asking that Massachusetts state law obligations be engrafted
onto ERISA. Such claims, if allowed, would lead to the "different
administrative procedures in different jurisdictions" that ERISA is
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designed to avoid. As such, they are preempted. The fact that
Zipperer is seeking negligence damages and not reinstatement of
benefits does not alter this result, as any determination of
negligence, in the present context, necessarily "relates to" the
ERISA plan.
Zipperer also argues that it is unclear from the
complaint whether Raytheon is either an ERISA employer or plan
administrator, and thus whether it is entitled to preemption. We
disagree. In our view the district court correctly concluded that
Zipperer's claims only exist by virtue of Raytheon's status as an
ERISA employer and its administration of the ERISA plan at issue.
Hampers, 202 F.3d at 53.
We have reviewed the other issues Zipperer raised, and
find them without merit.
III. CONCLUSION
We conclude that Zipperer's claims for negligence,
equitable estoppel and negligent misrepresentation are preempted by
ERISA.
Affirmed.
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