Source: http://ny.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19910506_0000171.SNY.htm/qx
Timestamp: 2017-04-30 18:50:28
Document Index: 426508583

Matched Legal Cases: ['§ 409', '§ 1109', '§ 409', '§ 409', '§ 502', '§ 502', '§ 1132', '§ 510', '§ 1140', '§ 1140', '§ 510', '§ 510', '§ 502', '§ 510', '§ 510']

| O'NEIL v. GENCORP
O'NEIL v. GENCORP
SHANE O'NEIL AND ROBERT JOHNSON ON BEHALF OF THEMSELVES AND ALL THOSE SIMILARLY SITUATED, PLAINTIFFS,v.GENCORP, INC., RETIREMENT PLAN FOR SALARIED EMPLOYEES OF RKO GENERAL, INC. AND CERTAIN SUBSIDIARY COMPANIES; AND RKO BOTTLERS, INC., RETIREMENT PLAN FOR NON-UNION EMPLOYEES, DEFENDANTS.
The opinion of the court was delivered by: Martin, District Judge:
This matter is before the Court on defendant GenCorp's
motion to dismiss plaintiffs' claim for punitive damages and
defendant GenCorp, Inc. pursuant to Rule 12(b)(6).
GenCorp seeks dismissal from this action on two grounds: a)
it claims that since the only remedy sought from it is
punitive damages and this being unavailable to plaintiffs as
a matter of law, GenCorp should be dismissed; and b) the
Amended Complaint fails to allege a colorable claim for breach
of fiduciary duty against GenCorp. For the reasons set forth
below, the claims for punitive damages and against GenCorp are
be granted.*fn1
Plaintiffs' argue that punitive damages are an appropriate
remedy under ERISA for GenCorp's wilful misconduct. They hinge
this argument on what can be characterized as a very thin
In support of their proposition that punitive damages are
available as a remedy for breach of fiduciary duty under
ERISA, plaintiffs cite Massachusetts Mut. Life Ins. Co. v.
Russell, 473 U.S. 134, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985).
Russell held that recovery from a fiduciary for a violation of
§ 409(a) of ERISA, 29 U.S.C. § 1109(a), establishing liability
for breach of fiduciary duty, inures to the benefit of the Plan
whole. The Court stated that the drafters of that provision
were primarily concerned with possible misuse that would
protect the entire plan, rather than with rights of an
individual beneficiary. Russell, 105 S.Ct. at 3089.
In discussing § 409(a), the Supreme Court in footnote 5 at
3088, stated "[b]ecause respondent relies entirely on § 409(a),
and expressly disclaims reliance on § 502(a)(3), we have no
occasion to consider whether any other provision of ERISA
authorizes recovery of extracontractual damages." Plaintiffs
grasp onto this footnote and claim that based on this, they are
entitled to punitive damages under § 502(a)(3), 29 U.S.C. § 1132(a)
in this case. We disagree.
Plaintiffs also cite Ingersoll-Rand Co. v. McClendon, ___
U.S. ___, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990), in support of
their claim that punitive damages are available. They argue
that Justice O'Connor's concluding paragraph reverses the
existing case law that holds that punitive damages are not
available under ERISA. For the reasons set forth below,
Ingersoll-Rand is also inapposite to the case at bar.
In Ingersoll-Rand the Supreme Court had to decide whether
ERISA § 510, 29 U.S.C. § 1140, preempts a state cause of action
for wrongful discharge. The Court held that "ERISA's explicit
language and its structure and purpose demonstrate a
congressional intent to pre-empt a state common law claim that
an employee was unlawfully discharged to prevent his attainment
of benefits under an ERISA-covered plan." 111 S.Ct. at 480.
Section 510 prohibits the discharge, fine, suspension,
expulsion, discipline or discrimination of a plan participant
or beneficiary "for exercising any right to which he is
entitled under the provisions of an employee benefit plan . .
. or for the purpose of interfering with [his] attainment of
any right to which such participat may become entitled under
the plan. . . ." 29 U.S.C. § 1140.
Unlike the case at bar whereby plaintiffs claim entitlement
to additional pension benefits under the terms of their
pension plans, a § 510 plaintiff is usually not entitled to
receive benefits from the plan. The plan is usually not a party
in an action under § 510 because any recovery will not be from
the plan.*fn2
The Court noted in Ingersoll-Rand, that § 502(a) (ERISA's
civil enforcement mechanism), when invoked to enforce § 510,
permits recovery from a non-plan entity. 111 S.Ct. at 485. In
the last paragraph of the Court's opinion, Justice O'Connor
The preceding discussion also reponds to the
Texas court's attempt to distinguish this case as
not one within ERISA's purview. Not only is &sect;
502(a) the eclusive remedy for vindicating &sect;
510-protected rights, there is no basis in &sect;
502(a)'s language for limiting ERISA actions to
only those which seek "pension benefits." It is
clear that the relief requested here is well within
the power of federal courts to provide.
Consequently, it is no answer to a pre-emption
argument that a particular plaintiff is not seeking
recovery of pension benefits.
Had Justice O'Connor intended, as plaintiffs claim, that
this analysis of § 510 was overruling the considerable amount
of federal caselaw barring punitive and extra-contractual
damages under ERISA (particularly the cases which specify that
punitive damages are ...