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Hecht v. United Jewish Federation of Tidewater, Inc.

United States District Court, E.D. Virginia, Norfolk Division

January 16, 2019

MARK HECHT, Plaintiff,


          Raymond A. Jackson United States District Judge

         Before the Court is United Jewish Federation of Tidewater's ("Defendant") Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).[1] Having reviewed the parties' filings, the Court finds that a hearing is not necessary. For the reasons set forth below, this case is REMANDED to the Circuit Court for the City of Virginia Beach, Virginia. As such, Defendant's Motion to Dismiss is MOOT.


         Mark Hecht ("Plaintiff) and Defendant are citizens of Virginia. ECF No. 1-1 at 2. The parties executed a Consulting Agreement with Defendant whereby the parties contracted for the provision of Plaintiff s services on November 23, 2011. Id. at 15-16. Defendant classified Plaintiff as an independent contractor per the Consulting Agreement. Id. Plaintiff received no Defendant Employee Benefits during this period of employment. Id. at 5. However, the Virginia Employment Commission separately classified Plaintiff as an employee in 2013 and 2015 audits. Id. at 6. However, Defendant did not inform Plaintiff of the results of the audits. Id. at 6. Defendant terminated Plaintiffs independent contractor relationship on April 28, 2017. Id. at 7. Defendant then filed for unemployment compensation with Defendant, which it denied because he was an independent contractor, not an employee. Id. During these proceedings, Defendant first learned about the Virginia Employment Commission's 2013 and 2015 audits. Id.

         On June 13, 2018, Plaintiff filed a six count Complaint against Defendant in the Circuit Court of the City of Virginia Beach, Virginia and alleged that he was denied benefits because he was miscategorized as an independent contractor rather than an employee. Id. at 8. According to Plaintiff, Defendant misrepresented Plaintiffs status as an independent contractor so that Defendant would not have to provide Plaintiff with employee benefits, including health, life, and disability insurance. Id. at 5. Plaintiff brings claims for breach of contract (Count II), unjust enrichment (Count III), actual fraud (Count IV), constructive fraud (Count V), and statutory claim under the Virginia Unemployment Compensation Act, Va. Code. § 60.2-100, et seq. ("VUCA") (Count VI). ECF No. 1-1 at 8-13. Defendant also sought a declaratory judgment (Count I) but then later voluntarily dismissed this count. ECF No. 12 at 9.

         Defendant removed this action to this Court on federal question jurisdiction grounds on October 8, 2018. ECF No. 1 at 3. On October 10, 2018, Defendant moved to dismiss the remaining five counts of Plaintiff s Complaint pursuant to Rule 12(b)(6). ECF Nos. 5-6. Plaintiff filed a corrected response on November 2, 2018. ECF No. 11. Defendant replied on November 7, 2018. ECF No. 12. The Court allowed Plaintiff to file a sur-reply on December 14, 2018. ECF No. 13. Plaintiff filed its sur-reply on January 5, 2019. ECF No. 15. Defendant argues that Counts II, III, IV, and V are (1) completely preempted under the Employment Retirement Income Security Act of 1974 ("ERISA"); (2) barred by ERISA's statute of limitations; (3) barred due to failure to exhaust administrative remedies; and (4) barred by Virginia's statute of limitations. See ECF No. 6 at 4-13; ECF No. 12 at 5-7. Defendant also argues that Count VI is barred due to failure to allege sufficient facts. ECF No. 6 at 13-18.


         Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of actions that fail to state a claim upon which relief can be granted. The United States Supreme Court has stated that in order "[t]o 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) (quoting Bell Atl Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Specifically, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw trie reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678. Moreover, at the motion to dismiss stage, the court is bound to accept all of the factual allegations in the complaint as true. Id. However, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Assessing the claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679.

         In considering a Rule 12(b)(6) motion to dismiss, the Court cannot consider "matters outside the pleadings" without converting the motion to a summary judgment. Fed.R.Civ.P. 12(d). Nonetheless, the Court may still "consider documents attached to the complaint, ... as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Sec'y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007); see also Fed. R. Civ. P. 10(c); Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir. 2008) ("When a court is presented with a Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein.").


         A. ERISA Preemption

         "ERISA comprehensively regulates, among other things, employee welfare benefit plans that, 'through the purchase of insurance or otherwise,' provide medical, surgical, or hospital care, or benefits in the event of sickness, accident, disability, or death." Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44 (1987) (citing 29 U.S.C. § 1002(1)). Congress designed ERISA to ultimately "protect ... the interests of participants in employee benefit plans and their beneficiaries" by establishing a set of regulatory requirements that "provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts." 29 U.S.C. § 1001(b). Furthermore, ERISA maintains distinct preemption provisions over state law that ensure that employee benefit plan regulation is "exclusively a federal concern." Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523 (1981); see 29 U.S.C. § 1144. ERISA completely preempts any state law claim or remedy based on any wrongful withholding of benefits promised under an employee benefit plan. See Aetna Health, Inc. v. Davila, 542 U.S. 200, 220 (2004).

         ERISA completely preempts any state law claim or remedy based on wrongful withholding of benefits promised under an employee benefit plan. See, e.g., Aetna Health, Inc. v. Davila,542 U.S. 200, 220 (2004). The United States Court of Appeals for the Fourth Circuit ("Fourth Circuit") has recognized three elements for complete preemption: (1) Plaintiff must have standing under § 502(a); (2) Plaintiffs claims must be within the scope of § 5O2(a)[, 29 U.S.C. § 1132(a), known as the civil enforcement provision, ]; and (3) Plaintiffs claims "must not be capable of resolution 'without an interpretation of the contract governed by federal law,' i.e., an ERISA-governed employee benefit plan." Sonoco Prods. Co. v. ...

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