Coggins v. Keystone Foods, LLC
111 F. Supp. 3d 630
| E.D. Pa. | 2015Background
- Plaintiffs are former Keystone Foods executives who signed individual Retirement Agreements after Marfrig acquired Keystone; the Agreements promised lifetime continuation of then-existing health benefits and reimbursement of out-of-pocket medical costs.
- Plaintiffs retired and met service requirements; Keystone informed them it would stop honoring the Agreements and stop reimbursements effective January 1, 2015.
- Plaintiffs sued in Pennsylvania state court for breach of contract and violation of the Pennsylvania Wage Payment and Collection Law; Keystone removed, asserting ERISA complete preemption and federal jurisdiction.
- Central factual dispute: whether the Retirement Agreements themselves constitute ERISA employee welfare benefit "plans" (entitling enforcement under ERISA §502(a)(1)(B)) or are separate contracts that merely continue benefits under an existing ERISA-governed benefits plan.
- The Court considered whether the Agreements created a separate, ongoing administrative scheme (necessary for ERISA plan status under Fort Halifax and later Third Circuit decisions).
- Court concluded the Agreements only continued benefits under the existing administrative scheme (no new scheme or discretion), so they are not ERISA plans and state-law claims are not completely preempted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs' state-law claims are completely preempted by ERISA §502(a)(1)(B) | Claims enforce only contractual reimbursement obligations separate from ERISA plan remedies | Claims seek enforcement/benefits tied to employee welfare plans and thus fall under ERISA §502(a)(1)(B) | Not preempted; no §502(a)(1)(B) claim exists because Agreements are not ERISA plans |
| Whether the Retirement Agreements are ERISA "plans" | Agreements are separate contracts continuing existing benefits, not new ERISA plans | Agreements establish employer-funded lifetime benefits and thus satisfy Donovan factors for a plan | Not plans: they merely continue benefits under existing plan and create no new administrative scheme |
| Whether a one-person or single-employee promise can be an ERISA plan here | Even if one-employee, these Agreements do not create ongoing administrative framework required for ERISA plan | Employer points to authority that single-employee promises can be plans when they create administration | Held that single-employee/one-person-plan doctrine does not apply because no new administrative scheme was created |
| Jurisdiction and remedy (remand/dismiss) | State claims should be remanded if not preempted; contract forum-selection language supports remand | Removal proper if ERISA completely preempts claims | Court remanded to state court; denied defendant's motion to dismiss as moot |
Key Cases Cited
- Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (recognition of complete preemption by ERISA §502)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (state-law claims are completely preempted when they duplicate or supplement ERISA §502 remedies)
- Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (one-time lump-sum obligations do not create ERISA plans; administrative-scheme requirement)
- Donovan v. Dillingham, 688 F.2d 1367 (Eleventh Circuit four-part test for when a plan, fund, or program exists)
- Menkes v. Prudential Ins. Co., 762 F.3d 285 (Third Circuit describing administrative-scheme touchstone for ERISA plan status)
- Angst v. Mack Trucks, Inc., 969 F.2d 1530 (Third Circuit: continuation of existing benefits without new administration falls outside ERISA)
- Deibler v. United Food & Commercial Workers' Local Union 23, 973 F.2d 206 (Third Circuit endorsement of Donovan factors)
- Gruber v. Hubbard Bert Karle Weber, Inc., 159 F.3d 780 (employer payment of premiums as evidence of ERISA plan existence)