Court Opinion

ID: 2792494
Source: CourtListenerOpinion
Date Created: 2015-04-09 18:00:33.9145+00
Date Added: 2024-06-11T11:12:37.595451
License: Public Domain

Not for Publication in West's Federal Reporter

          United States Court of Appeals
                         For the First Circuit

No. 14-1701

                               MICHELE CLARK,

                           Plaintiff-Appellant,

                                       v.

                  JANSSEN PHARMACEUTICALS, INC,
                        JOHNSON & JOHNSON,
                          THE REED GROUP,
          THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,

                           Defendant-Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                    FOR THE DISTRICT OF MAINE

              [Hon. Nancy Torresen, U.S. District Judge]

                                 Before
                         Barron, Circuit Judge,
                      Souter,* Associate Justice,
                       and Lipez, Circuit Judge.

     Julie D. Farr, with whom Arthur J. Greif and GILBERT & GREIF,
P.A. were on brief, for appellant.
     David C. Henderson, with whom Rebecca H. Gallup and Nutter
McClennen & Fish LLP were on brief, for appellees Janssen
Pharmaceuticals, Johnson & Johnson, and Reed Group.
     Amanda A. Sonneborn, with whom Samuel M. Schwartz-Fenwick,
SEYFARTH SHAW LLP, Byrne Joseph Decker, and PIERCE ATWOOD LLP were
on brief, for appellee Prudential.

     *
          Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
April 8, 2015
     SOUTER, Associate Justice.              Michele Clark claims short and

long term disability benefits under plans provided by her employer,

Janssen Pharmaceuticals, Inc.      Janssen is wholly owned by Johnson

& Johnson, and Reed Group is their agent for responding to short

term disability claims under Janssen's self-funded plan.                The long

term disability plan is both underwritten and administered by

Prudential Insurance Company. Reed and Prudential rejected Clark's

benefit claims, which were denied as well through her successive

administrative    appeals.      Clark    then     brought    this    action   for

benefits under Maine law of contract against Janssen, Johnson &

Johnson,   and   Reed,   and   under    the     Employee    Retirement    Income

Security Act of 1974 (ERISA) against Prudential.                    The district

court dismissed under Federal Rule of Civil Procedure 12(b)(6) for

failure to state a claim subject to relief, and we affirm.

     The complaint is fairly read to allege these facts.                 On July

29, 2011, Janssen terminated Clark's employment; Clark makes no

claim that the termination was wrongful.             On the same day, Clark

requested disability benefits based on an inability to do her work

owing to narcolepsy cataplexy syndrome.            The sequence is unclear,

and although the parties argue about it, the merits of her claim

and this appeal do not turn on the timing, because the district

court dismissed on the independent ground that Clark's complaint

failed to address the crucial plan condition that eligibility for

a disability benefit requires a minimum of seven consecutive days

                                       -3-
of disability during the period of employment.

     The    district   court   relied    principally   on   the   following

provision in the short term plan:

     If Reed Group approves your disability, [short term]
     benefits begin on your first full day of absence due to
     a disability if you are unable to work according to your
     regularly scheduled hours for more than seven consecutive
     calendar days.

Clark contends that this language "merely governs the timing of

commencement of" benefit payments.           Appellant's Br. 10.        She

concludes that the seven-day period is not a "condition precedent

to whether benefits were paid."         Id. at 11.

     Clark's take on the provision is correct inasmuch as it does

impose at least a seven-day wait if it turns out that a benefit is

due, but her reading of the language is crucially incomplete.

Without manifesting a disability in the manner required for seven

consecutive days, no benefit will ever become payable.            Only if it

does will the language also answer the timing question, by the

provision that the benefit will be paid retroactively to the first

day of inability to work at the regular schedule.

     Thus, timing and eligibility are both governed by the same

language.    By providing, without more, that benefits will be paid

retroactively after seven consecutive days of inability to work at

the regular schedule, the plan language necessarily entails that no

benefits will actually be paid unless the employee manifests a

disability in the manner required for at least seven days.           And in

                                   -4-
so governing eligibility as well as timing, the terms of the plan

are unambiguous.1      See Barr v. Dyke, 49 A.3d 1280, 1286 (Me. 2012)

("We interpret the unambiguous terms of a contract according to

their ordinary meaning . . . .").

        Clark appears to argue in the alternative that, even if the

plan language does create a seven-day eligibility condition, the

continuous seven-day period may run, or continue to run, after

employment by Janssen is over.       See Appellants' Br. 10 ("[The plan

language] does not require [her] to plead or prove that she

remained disabled for 7 days while she was employed by Janssen.").

We express no opinion on whether such a reading would be persuasive

in a case in which the running of the seven-day period was affected

by a wrongful termination, for Clark makes no such claim in this

case.       Absent wrongful termination, however, it would require very

clear language to provide for benefits accruing after the end of

employment and untethered to some cause for which the employer was

responsible.2      Not surprisingly, then, Johnson & Johnson's Pension

        1
       The parties argue about the significance of shifting
administrative rationales for denial, and air charges of estoppel
and waiver. But the failure here was Clark's pleading. A claim
for federal judicial relief must state a plausible basis for
entitlement, which is wanting in a complaint that relies on a
benefit plan placed before the court but that fails to address
dispositive conditions contained in the plan's terms. The district
court was thus free to dismiss the defective complaint, just as
Clark herself acknowledges this court is, as well.
        2
       It is no answer to point out, as Clark does, that accrued
vacation time may be counted as active employment; she does not
allege that she was on vacation at any point relevant to her claim.

                                    -5-
Committee, which is given interpretive authority over the Plan, has

apparently rejected Clark's reading.        In its appellate review of

Clark's   claim,   it   took   the   position   that   inability   to   work

scheduled hours meant absence from her work at Janssen, for which

at best July 29 could be counted the first day but with no further

days of countable absence accruing after she left.

     We accordingly need go no further to reach the same conclusion

drawn by the district court, that Clark has failed to state a claim

for short term disability benefits as to Janssen, Johnson &

Johnson, and Reed.       And because the long term disability plan

conditions eligibility on an employee's prior receipt of twenty-six

continuous weeks of benefits under the short term plan, the ERISA

claim against Prudential must be dismissed as well.

     The judgment of the district court is affirmed.

                                     -6-