Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-00418/USCOURTS-azd-2_09-cv-00418-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1132 E.R.I.S.A.

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Warren N. Richards, IV, 

Plaintiff, 

vs.

Holsum Bakery, Inc.; Flower Foods, Inc.,

Defendants. 

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No. CV 09-00418-PHX-MHM

ORDER

Currently before this Court is Plaintiff Warren N. Richards’ Motion to Remand.

(Dkt. #66). After reviewing the pleadings, and determining that oral argument is

unnecessary, the Court issues the following Order.

I. BACKGROUND

On February 9. 2009, Plaintiff Warren N. Richards, IV, filed suit against Defendants

in Superior Court of Arizona, Maricopa County, alleging breach of contract, violation of

Arizona Revised Statutes (“A.R.S.”) § 23-355, and the breach of the covenant of good faith.

(Dkt. #1). On March 02, 2009, Defendants’ filed their Joint Notice of Removal, invoking

this Court’s federal-question jurisdiction based on their belief that Plaintiff’s contract claim

was predicated on Holsum’s 2007 employee severance-benefit plan (“2007 Plan”), which

they claimed was governed by the Employee Retirement Income Security Act (ERISA). 

Plaintiff filed a Motion to Remand to State Court on April 01, 2009, asserting that his claim

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was not predicated on the 2007 Plan, but on a retention-benefits memorandum (“Memo”)

sent to him by Holsum Bakery’s President Ed Eisele. (Dkt. #16). Two days before

Plaintiff’s remand motion was due, on March 30, 2009, Defendants filed a Supplement to

Joint Notice of Removal, informing the Court of a First Amendment (“Amendment”) to the

2007 Plan, which was inadvertently not included in its original removal filing. (Dkt. #15).

In response, on April 01, 2009, Plaintiff filed a Motion to Strike Defendants’ supplemental

motion, arguing, pursuant to 28 U.S.C §1446, that it was untimely. On April 02, 2009, the

Court granted Plaintiff’s Motion to Strike and vacated the Rule 16 scheduling conference

pending its decision on the Motion to Remand. (Dkt. #20). In the same order, the Court

allowed for limited discovery concerning subject matter jurisdiction—i.e. whether the

Amendment was authentic or a fabrication—to be completed within twenty days, and

directed that any request for an evidentiary hearing by Plaintiff should be made no later than

ten days thereafter. (Id.). 

On July 8, 2009, Plaintiff filed his Request for Evidentiary Hearing, in which he

acknowledged the existence of the Amendment, but argued that it had never been adopted.

(Dkt. #47). Having determined that whether or not the Amendment was adopted might well

be determinative as to the remand question, this Court withdrew its previous Order granting

Plaintiff’s Motion to Strike, denying that motion instead, and granted Plaintiff’s Request for

Evidentiary Hearing concerning whether or not Defendants implemented or adopted the

Amendment. (Dkt. #49) The evidentiary hearing was held on November 23, 2009. On

December 10, 2009, this Court issued an Order denying Plaintiff’s Motion to Remand,

finding that the Memo was not a freestanding offer of change of control benefits, but instead

was a summary of an amendment to Defendants’ 2007 ERISA Plan, and that the Amendment

had been adopted in compliance with applicable ERISA law. (Dkt. #59). As a result, the

Court held that Plaintiff’s contract claim was predicated by ERISA and removal was proper.

(Id.).

On January 25, 2010, the Court held a Rule 16 Scheduling Conference. At the

scheduling conference the Court learned that Plaintiff, that same day, had filed a second

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Motion for Remand. (Dkt. # 66–67). The Court ordered expedited response and reply

concerning the new Motion for Remand. (Dkt. #67). In addition, the Court directed Plaintiff

to file an amended complaint, if he so desired, within sixty days. (Id.). On March 26, 2010,

Plaintiff filed his First Amended Complaint, (Dkt. #72), which Defendants answered on April

9, 2010. (Dkt. #73). In his First Amended Complaint, Plaintiff makes claims for wrongful

termination pursuant to A.R.S. § 23-1501 and for failure to pay wages under A.R.S. § 23-

350 et seq.. (Id.). Plaintiff no longer asserts breach of contract, the claim upon which this

Court rested its finding that federal court jurisdiction was proper. 

II. DISCUSSION

Subsequent to filing the instant Motion for Remand (“Plaintiff’s Second Motion for

Remand”), Plaintiff filed his First Amended Complaint. The First Amended Complaint no

longer contains the contract claim which this Court found was preempted by ERISA or a

claim to stock benefits—a claim which Defendants have argued would provide an

independent basis for federal question jurisdiction. All that remains in Plaintiff’s First

Amended Complaint, then, are two state-law claims: (1) wrongful termination pursuant to

A.R.S. § 23-1501 and (2) failure to pay wages under A.R.S. § 23-350 et seq.. (Id.).

Plaintiff’s Second Motion to Remand, however, was filed and fully briefed by both Parties

prior to Plaintiff’s filing of his First Amended Complaint. In the Second Motion for Remand,

Plaintiff treats the Court’s Order concerning his original Motion for Remand (“First Motion

for Remand”) as effectively having dismissed his contract claim. In their response to

Plaintiff’s Second Motion to Remand, Defendants are rightfully confused by Plaintiff’s

position, as this Court’s previous Order did not dismiss Plaintiff’s claim, but merely held that

it was preempted by ERISA. Consequently, in their response brief, Defendants primarily

argue that Plaintiff’s new bases for remand are besides the point, as the contract claim is still

in this case and it alone establishes federal jurisdiction.

Defendants did not thoroughly address Plaintiff’s contention that a wrongful

termination claim is only preempted if the employer had a benefits defeating motive in

terminating the employee. Without deciding the merits of this argument, the Court notes that

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Plaintiff’s position appears plausible. See Campbell v. Aerospace, 123 F.3d 1308 (9th Cir.

1997). In light of Plaintiff’s First Amended Complaint and the confusion caused by

Plaintiff’s Second Motion for Remand, this Court will deny Plaintiff’s Second Motion for

Remand, but with leave to refile as to this particular issue; whether a wrongful termination

claim is only preempted if the employer had a benefits defeating motive in terminating the

employee. The Court finds that denial of Plaintiff’s motion with leave to refile is proper

because any motion to remand should be addressed to the most current complaint, which is

the First Amended Complaint. 

Also in his Second Motion for Remand, Plaintiff argues in the alternative that even

if his wrongful termination and wage claims relate to the Holsum’s 2007 Plan as amended,

ERISA is not implicated because the 2007 Plan was not an ERISA plan. This issue,

however, has already been settled. In its remand Order, the Court found that the Amendment

had been adopted and was part of Holsum’s 2007 ERISA Plan. (Dkt. #59). It is true that the

Court’s Order did not conduct an analysis of whether the 2007 Plan, prior to amendment,

implicated an ongoing administrative scheme, and was, therefore, and ERISA plan. The

reason no such analysis occurred is that the issue did not appear to be in dispute.

 In Plaintiff’s Motion for an Evidentiary Hearing, Plaintiff conceded the existence of

the Amendment, but argued that an evidentiary hearing was necessary to determine if the

Amendment had been adopted by Holsum and added to the 2007 Plan. In arguing that the

Amendment had not been formally adopted, Plaintiff cited to case law concerning how a

company formally adopts an amendment to a pre-existing ERISA plan, alleging Defendant

Holsum had not followed the necessary procedures. The clear implication of this argument

was that Plaintiff conceded that the 2007 Plan was an ERISA plan. Had Plaintiff believed

that the Court erred in its first remand Order or not addressed this issue, the proper course

of action would have been to file a Motion for Reconsideration explaining its position.

Plaintiff, however, did no such thing and the time has since passed to do so. See LRCiv

7.2(g)(1) (stating that any motion for reconsideration should be filed no later than ten days

after the date of the filing of the Order that is the subject of the motion). As a result, Plaintiff

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may no longer argue that the 2007 Plan as amended is not an ERISA Plan.

Accordingly,

IT IS HEREBY ORDERED denying Plaintiff’s Motion for Remand with leave to

re-file within 15 days of the filing date of this Order. In any subsequent Motion for Remand,

Plaintiff is directed to address only his argument that remand is proper because a wrongful

termination claim is only preempted if the employer had a benefits defeating motive in

terminating the employee. (Dkt. #66). 

DATED this 6th day of June, 2010.

 

 

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