Cotten v. Altice USA, Inc.
1:19-cv-01534
E.D.N.YJan 2, 2020Background
- Plaintiffs Dan Andrew Cotten and Andrew Horlick were Altice employees (sales directors) terminated in mid‑2018 and allege they were denied severance pay.
- Altice maintained an Altice Severance Benefits Policy (published on the company intranet, Jan 1, 2017) that references being governed by the "Company's ERISA‑covered severance pay plan and the associated plan document/SPD."
- Plaintiffs sued in state court for breach of contract and promissory estoppel, and (after removal) pleaded alternative ERISA claims: failure to pay benefits (§502(a)(1)(B)), failure to furnish plan documents (§502(a)(1)(A)), and breach of fiduciary duty (§502(a)(3)).
- At removal Altice submitted a Cablevision Severance Pay Plan and a company declaration asserting that plan governs the Altice Policy; Plaintiffs dispute receiving or being told they were Cablevision employees.
- Altice moved to dismiss arguing ERISA preemption of state claims, lack of ERISA standing, failure to exhaust administrative remedies, and that the §502(a)(3) claim is duplicative; the court refused to consider the Cablevision Plan at the pleading stage.
- The court denied dismissal as to ERISA preemption, standing, and exhaustion, and reserved decision on whether the §502(a)(3) claim is duplicative, allowing limited discovery on what ERISA plan (if any) applied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state‑law claims are preempted by ERISA | State claims pled in the alternative because existence/identity of an ERISA plan is disputed | ERISA preempts any state cause of action that duplicates or supplants ERISA remedies | Denied dismissal — court declines to dismiss state claims at pleading stage given factual uncertainty about the governing ERISA plan |
| Whether Plaintiffs have ERISA standing as participants or beneficiaries | Plaintiffs contend the Altice Policy and practice made them beneficiaries and they were entitled to severance | Altice contends Plaintiffs lack standing under the applicable ERISA plan (and questions which plan applies) | Denied dismissal — standing cannot be resolved before identifying the applicable plan and factual record |
| Whether Plaintiffs failed to exhaust administrative remedies | Plaintiffs argue exhaustion is excused because plan identity/documents were not provided and exhaustion may be futile or unnecessary for statutory violations | Altice contends plaintiffs must follow plan appeal procedures before suing | Denied dismissal — factual questions about the relevant plan and futility make exhaustion inappropriate to resolve now |
| Whether the §502(a)(3) fiduciary claim is duplicative of §502(a)(1) benefits claims | Plaintiffs say Count V seeks equitable relief for failure to provide plan documents and timely benefits (distinct relief) | Altice says §502(a)(3) relief is duplicative because §502(a)(1) already provides adequate remedies | Deferred — court skeptical but reserves ruling pending limited discovery and further briefing |
Key Cases Cited
- Aetna Health Inc. v. Davila, 542 U.S. 200 (U.S. 2004) (ERISA preemption: state causes duplicative of ERISA remedies are preempted)
- Varity Corp. v. Howe, 516 U.S. 489 (U.S. 1996) (§502(a)(3) functions as an equitable "safety net" when other ERISA remedies are inadequate)
- Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76 (2d Cir. 2001) (interpreting §502(a)(3) as equitable relief where other remedies are lacking)
- LaFaro v. N.Y. Cardiothoracic Grp., PLLC, 570 F.3d 471 (2d Cir. 2009) (pleading standard: accept complaint allegations and draw inferences for non‑movant)
- Kramer v. Time Warner Inc., 937 F.2d 767 (2d Cir. 1991) (court may consider documents attached to or incorporated in complaint)
- Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir. 2002) (documents integral to the complaint may be considered on a motion to dismiss)
- Chemung Canal Trust Co. v. Sovran Bank/Maryland, 939 F.2d 12 (2d Cir. 1991) (ERISA standing limited to participants, beneficiaries, fiduciaries)
- Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588 (2d Cir. 1993) (exhaustion of administrative remedies may be excused where pursuit would be futile)
- Babino v. Gesualdi, 278 F. Supp. 3d 562 (E.D.N.Y. 2017) (§502(a)(3) claim that merely duplicates §502(a)(1) is improper)