Chester C. Sanson v. General Motors Corporation

Camilla, vessel, against the un- action however, B; chose to

der Trinidad Rule Although the

proceed Sem- under Rule C. analogous reasoning is

bawang court’s respects,12 reasoning in all we

our almost of its allow-

disagree part with that proceed under Rule B

ing repairer that the Camilla would

because of our view allowed Trinidad to prejudiced if we stage B at this late

proceed Rule litigation.

III. CONCLUSION reasons, agree foregoing we

For the rights that Trinidad’s

the district court are insufficient and

against the Camilla type requisite

of the to establish in rem

jurisdiction under Rule C. Since the dis- properly

trict court dismissed the action Camilla,

against judgment

district court is affirmed.

AFFIRMED. SANSON, Plaintiff-Appellant,

Chester C. CORPORATION,

GENERAL MOTORS

Defendant-Appellee.

No. 91-8528. Appeals,

United States Court of

Eleventh Circuit.

July 1992.

Rehearing Rehearing En Banc Sept.

Denied reasoning. Sembawang, Sembawang F.2d at 12. The court notes that the district line of case, opinion published court’s in this at 776 988 n. 5. (S.D.Fla.1991), F.Supp. 1558 follows the same preempted by ERISA. Since there is no pled, ERISA claim that could be denying court did not abuse its discretion in complaint allege leave to amend the We, therefore, claim under ERISA. affirm judgment. the district court alleges Chester Sanson that General (GM) Corporation fraudulently rep Motors spe resented to him that benefits under a program cial retirement would not be of assembly plant employ fered to Lakewood Relying upon representation, ees. he voluntarily pro retired under the standard early program. visions of GM’s retirement representa Sanson claims that for but tion, employ he would have continued his ment until it would have clearer been program whether the employees. would be offered to Lakewood retirement, Shortly after Sanson’s GM special program eligi- offered the to certain employees. immediately con- ble tacted and demanded that his retire- GM Parks, Goger Le- Kirwan Chesin & Allan to the level that ment benefits increased Jr., Chesin, Atlanta, Parks, roy Larry H. special program provided. GM denied Ga., plaintiff-appellant. for request, his and this action commenced. Royer, King Spalding, M. & Wil- Susan sought to recover the enhanced Jr., Atlanta, Ga., Clineburg, for liam A. compensatory retirement benefits and and defendant-appellee. punitive damages. for sum- GM moved

mary judgment, asserting that ERISA preempts Initial- Sanson’s state law claim. motion, ly, the district court denied GM’s TJOFLAT, BIRCH, Judge, Before Chief was not the state law claim RONEY, Judge, and Senior Circuit Circuit preempted. Judge. pre- expressly provides for inso- emption “any and all State RONEY, Judge: Senior Circuit relate hereafter they may far as now or. question whether presents This case plan....” any employee benefit Security Retirement Income Employee however, laws, 1144(a). U.S.C. State (ERISA), 88 Stat. Act of 1974 em- effect on that have a tenuous amended, seq., 29 U.S.C. et preempt- not ployee plans benefit are preempts Georgia state law fraudulent ed_ misrepresenta- The fact that on reason misrepresentation claim based availability an em- tions concerned the person that causes a a loss of able reliance only incidental ployee plan is benefit received benefits which would have been claim_ plain- plaintiff’s [Therefore] special early retirement program. under a misrepresenta- claim tiff’s for intentional light Ingersoll-Rand Co. v. (cita- tion is omitted). tions (1990), plaintiffs we hold the L.Ed.2d l:88-cv-827-RCF, (June 28, Dist.Ct.Order, to a law fraud claims that relate 1989). plan are qualified

Thereafter, seeking Court held don’s claims because he was “not McClendon, supra, Ingersoll-Rand Co. lost benefits but instead [was] explicit language and its seeking anguish that ERISA’s wages, future lost mental purpose and demonstrate a con- structure punitive damages as a result of the preempt a state gressional intent to com- wrongful discharge.” prevail, Id. To how- employee that an was un- mon law claim ever, plead had to and the court McClendon lawfully discharged prevent to his attain- plan had to find that an ERISA existed and ment of under an ERISA-covered benefits pension-defeating the had mo- a plan. requested the district court GM then terminating employment. the tive Be- application of to consider the McClendon inquiry cause the court’s was directed to ruling. ordering to to its earlier After GM plan, Supreme held the the the Court subsequent summary judgment mo- file a plan to cause action related an ERISA tion, prior its the district court reversed was, therefore, preempted. and “a faithful ruling based on the belief that case, In this claims that GM’s reasoning of application of the McClendon misrepresentations were made further- requires finding case a to facts this objective achieving twenty- ance of an of action under that Plaintiffs cause Geor- percent employ- five reduction salaried ERISA,” gia under and expense ees the added associated without request denied Sanson’s to amend his com- employees with financial incentive to Dist.Ct.Order, plaint “futile.” l:88-cv- as special targeted (e.g., for removal re- 827-RCF, 24, 1991). (May program). tirement The measure of dam- that the district court Sanson contends ages sought against would be GM and not read too much into the deci- McClendon against pension plan. prevail To on his argues that ad- sion. Sanson claims, state law Sanson would have to preempts dresses whether ERISA a claim prove plan. the existence of an ERISA He law, pension-based under a state but that intentionally establish that GM mis- would this case involves whether ERISA represented ineligibility his for the general preempts a fraud claim under a program plan knew and non-pension-based state He claims law. be available at the time it told him would dividing purposes that the line for of deter- misrepre- He otherwise. relied mining preemption ERISA in this context is damaged by misrep- sentation and was tha,t employ- claims to” an between “relate Sanders, resentation. See Allen v. 176 plan ee and claims that “affect em- benefit 647, 648, 428, Ga.App. 337 S.E.2d 429 ployee plans tenuously benefit too to be (1985). It can assumed here that he fairly relating employee characterized as to prevail claims to on his factual Parisian, plans.” benefit Howard v. 807 law. 1560, (11th Cir.1987). Contrary F.2d 1564 preempts Whether federal law a state argument, to the facts of this Sanson’s intent, question congressional is a a tenuous rela- action case demonstrate more than employee plan. Congress’ discern intent we must tionship to an benefit and “[t]o language explicit statutory examine the McClendon, the United States Su purpose and the structure and of the stat preme Supreme the Texas Court reversed at -, McClendon, ute.” employee that an could re Court’s 482, 483; S.Ct. at L.Ed.2d at see also wrongful discharge if he cover in a action Lueck, 471 U.S. Corp. v. Allis-Chalmers reason for “principal established that the 1909-10, employer’s desire his termination was the 514(a) (1985). pro L.Ed.2d 206 ERISA § contributing paying benefits to avoid vides: employee’s pension fund.” (b) Except provided in subsection at -, 111 S.Ct. at section, of this sub- provisions though 112 L.Ed.2d at 482. Even oth chap- chapter subehapter and III of this er federal courts had held similar claims all supersede ter shall and State preempted by the Texas they may now or hereaf- attempted distinguish insofar as McClen- laws Court plan the existence of any employee ter relate statute benefit 1003(a) apply of this title would not described section to this case without the 1003(b) exempt under section existence of the retirement See also this title. First Nat’l Ins. v. Sunshine-Jr. Food Life Stores, (11th 1549-50 Cir. in, 514(a), as codified U.S.C. § 1992). added). 1144(a) (emphasis Under the 514(a), language only state plain correctly The district court held that plans preempted. relate to benefit are McClendon mandates plaintiff’s state law claim. 483, 112 L.Ed.2d at A law “relates alternately contends that if plan to” an when the law law, preempts the state or reference such “has connection with to a refusing court abused its discretion in to Id.; Lines, plan.” a v. Delta Air Shaw grant complaint him leave to amend to Inc., 96-97, 2890, 85, 463 U.S. 103 S.Ct. state a claim under ERISA. The essential 2899-2900, (1983). Thus, 77 L.Ed.2d 490 “a problem Sanson faces is that he does not may plan, ‘relate to’ a and state law benefit satisfy the “participant” definition of or if is thereby preempted, be even the law “beneficiary” 1132 of under ERISA. 29 § specifically designed such to affect 1002(7)-(8). Only participant U.S.C. a §§ plans, effect is indirect.” or the beneficiary or can file a civil action under 111 1132(a)(3)provides per ERISA. Section 483, 112 L.Ed.2d at 484. part tinent Supreme inter- Based Court’s A brought— civil action be pretation application and of ERISA in (3) by participant, a beneficiary, or fi- properly ap- the district court (A) duciary enjoin any practice to act or plied to hold that federal law which, any provision violates of this sub- claims. The preempts Sanson’s state law (B) chapter or the terms of the to pension plan subject of to existence a appropriate equitable other obtain relief is a critical factor in both cases. It (i) (ii) to redress such violations or establishing liability was critical under any provisions enforce of this title or the wrongful discharge the state’s law plan; terms case, misrepresen- In this McClendon. retirement bene- tation relates to Sanson’s (e)(1) Except for actions under subsec- special fits available under GM’s retire- (a)(1)(B) section, tion of this damages plan. ment The measure of of the United States shall have courts would be the amount of benefits Sanson jurisdiction actions un- exclusive of civil have under the retirement would received subchapter brought ... a der plan. damages a determination of Such beneficiary, fiduciary. participant, relationship demonstrates the between plan. and amended, lawsuit 502, 29 U.S.C. the. § recognized certain lim McClendone inability acknowledges his preemption clause: that a its to ERISA’s for maintain normally express statutory if basis would not be ERISA, ing present action under but require did not the establishment or statute there must some avenue ongoing plan, or if a contends that be maintenance defrauded out whereby an individual who is statute makes no reference or functions of, remedy. Mackey benefits can obtain irrespective Serv., Inc., argues the court should create Agency & Lanier Collection 825, 841, 2182, 2192-93, fraud claim under a federal common law 486 Georgia state law as (1988); suggests Pack 100 L.Ed.2d 836 Fort Halifax com for this federal 107 the reasonable source Coyne, 482 U.S. S.Ct. ing Co. v. recovery limited in 2211, 2217-18, (1987). 1 Al mon law with accord 96 L.Ed.2d by ERISA: policies dictated though does not involve ance with the fraud statute 622 Co., DuPont de Nemours previously 755, con- &

The Court has 894 F.2d (5th Cir.1990) (ERISA rejected preempts such an extension of 757 sidered and misrepresentation law claims of fraud and guaranteed the remedies ERISA: regard provided without to whether ERISA 502(a) provisions set detailed [T]he Lister v. any remedy wrong); for claimed comprehensive civil enforcement forth a Stark, 941, (7th Cir.1989), 890 F.2d 946 represents careful scheme that bal- denied, U.S.-, 579, cert. 111 S.Ct. prompt for ancing the need and fair (1990) L.Ed.2d L.Ed.2d 584 procedures against the claims settlement (“[w]hile [plaintiff] our will leave encouraging public interest forma- availability remedy, without a of a fed plans. poli- tion remedy prerequisite eral anot for feder reflected in the inclusion cy choices Co., preemption”); Degan v. Ford Motor al and the remedies exclusion of certain (5th Cir.1989).(preempt 869 F.2d the federal scheme others under ing plaintiffs despite state law claims rec if completely ERISA-plan undermined ognition employer’s misrepresentation participants and beneficiaries were free But “betrayal remedy”). was a without a remedies under state law that obtain see Provident & Accident Ins. Co. v. Life Congress rejected in ERISA. “The six denied, Waller, (4th Cir.), cert. carefully integrated civil enforcement S.Ct. 502(a) provisions found in of the stat- § (1990) (court L.Ed.2d 524 created féderal finally provide strong ute as enacted ... unjust common law rule of enrichment not intend to Congress that did evidence plan partici recover monies advanced simply authorize other remedies that it Storage Whitworth Bros. Co. v. pant); forgot incorporate decided ex- [or not] States, Central & Southeast Southwest pressly.” (Emphasis original). in Fund, Areas Pension (6th 794 F.2d 221 Dedeaux, 41, Pilot Ins. Co. v. 481 U.S. Life denied, Cir.), 1007, cert. 479 U.S. 107 S.Ct. 1549, 1556, 54, 107 S.Ct. 95 L.Ed.2d 39 645, (1986) (finding 93 L.Ed.2d 701 no cause (1987) (quoting Massachusetts Mutual Life ERISA, provided of action under court fed Russell, 134, 146, Ins. Co. v. 473 105 eral common law to find cause of action for (1985) (cited 87 L.Ed.2d S.Ct. 96 payments mistakenly to recover McClendon, approval in U.S. at pension plan). made to 485, 487)). -, 111 112 L.Ed.2d at support As further for the creation of a Plan, In McRae v. Seafarers’ Welfare law, federal common Sanson contends that (11th Cir.1991), holding 920 F.2d 819 “Congress specifically contemplated that damages extra-contractual under a federal courts, justice, federal the interests of common law claim were not available under engage lawmaking in interstitial 502(a)(3), we reaffirmed the inter- § way ERISA cases in much the same as the pretation specific 502 defines the § courts fashioned a federal common law of circumstances which one be labor the LMRA.” relations under 301 of Id. legal granted equitable relief. Employ Kwatcher v. Massachusetts Serv. Fund, 957, (1st ees Pension F.2d 966 879 , courts, recognizing Some while the ab held, however, Cir.1989). We have “[i]n implied right express sence of an contrary to the precedent the face of clear ERISA, action have allowed for under Court, Supreme the Eleventh Cir from the creation of a federal law in certain common Circuits, cuit, and this Court cannot other courts, A instances. number how law of remedies create a federal common ever, interpretation follow the restrictive plaintiff on the sole for the benefit of Life, supra. 502(a) as set forth in Pilot congressional report].” authority [a McRae, First Nat’l Ins. v. Sunshine- generally see 823; F.2d at 920 Life Stores, Aerovox, 1546, Inc., Food (11th F.2d.835, Jr. v. 1550 841 Conner denied, Cir.1992) Cir.1984), cert. (argument provides (1st that ERISA 470 U.S. (1985) (“once inadequate remedy is insufficient reason to 84 L.Ed.2d 812 concern, statute); Lee v. E.I. language Congress has a national overcome addressed separa- preemption language. fundamental commitment to ERISA’s court’s Under powers precludes it from scrutiniz- are preempted tion of laws to the solution”). ing sufficiency of extent that the “relate to” an ERISA [that] McClendon, 1144(a) plan.3 (1988); 29 U.S.C. § foregoing precedent, the In view of the 111 S.Ct. at district court did not abuse its discretion In 482-83. the “law” found to denying the motion for leave to amend the judicially was a created complaint. against cause of employers action whofire AFFIRMED. employees in order to avoid paying pen sion Court found benefits. BIRCH, dissenting: Judge, Circuit very specific that this cause of action was At respectfully dissent. the outset I preempted by ERISA because law cre acknowledge must direction de ating the cause of action courts, particularly cision in the in the specific makes and indeed reference Ingersoll-Rand wake of Co. v. on, premised pen existence aof S.Ct. sion the words of the Texas (1990), finding pre favors a L.Ed.2d court, the cause of action recov “allows However, given emption. the acknowl ery plaintiff proves when the that the edged, underlying purpose of ERISA to principal reason for his termination was protect employees and beneficiaries em employer’s desire to avoid contribu ployee plans,1 represents this case ting paying to or benefits the em point preemption at which the tide ployee’s pension fund.” [McClendon stayed. finding should be A Ingersoll-Rand ], [69], at Co. 779 S.W.2d in this case not fails to further (Tex.1989) Thus, in pre order to [ ]. protective policy, conceivably it such offers vail, plead, plaintiff must and the unscrupulous employer an a method of plan court must an find, that ERISA avoiding employee An benefit “burdens.” pension- exists and the had a employer in this circuit can now hoodwink defeating terminating motive in the long a time and leave him strand employment. Because the court’s in any ed without recourse whatsoever. This quiry plan, must to the this be directed statutory result stands the entire scheme judicially created cause of action “re proverbial on its head.2 plan. to” an ERISA late[s] McClendon,

I. added). (emphasis passage that majority The holds that the culmination This demonstrates McClen- govern case. The fraud —the creation of an ERISA don does not this law GM’s very creating cause of action is not a plan also the insulation of that Sanson’s —is remedy majority judicially specific created that ex- fraud. The vehicle the uses to encompasses pension plans. In- surprising plicitly reach this result is an overbroad stead, upon Georgia’s reading precedent construing the Sanson relies basic at-, struction, See, way interpret into a court could its 1. 111 S.Ct. 482; Lines, Inc., branch, legislative province Delta Air 463 U.S. and in so at Shaw v. Congress 103 S.Ct. 77 L.Ed.2d 490 doing set out to accom- thwart what Christie, (1983); Nachwalter v. place. plish in the first (11th Cir.1986). 960-61 by majority apparently confused this 3.The every that for I do not subscribe to the view analysis, support point. of its In necessarily remedy. wrong there must be a majority misrepresentation "the states that However, (here remedy where there is a a state plan and that there is relates to” the retirement action), comprehend, fraud I find it difficult to spe- "relationship and the between the lawsuit a way, in a common sense how a law enacted to course, Ante, plan.” at 621. Of cial retirement protect very class of individuals into which misrepresentation and therefore that appellant squarely the deny fits can construed to prove plan remedy. does not that preexisting lawsuit relates to the I am him such a plan. judicial adopting con- the law relates to the concerned that such a cording majority, plaintiff’s if a law- to the of fraud —a law very general law pension a re- suit would not exist “but-for” just not fraud encompasses any fraud, preempted by ERISA. plan, that lawsuit is em- deceive senior lating employers who ante, (“[T]he statute would not E.g., at 621 future benefits. potential ployees about the existence of apply to this case without reason, Georgia fraud law For plan.”). indirectly the retirement directly nor manifestly neither plan, and is therefore any affects ERISA a test for ERISA disagree I with such an- preempted law distinguishable from the action, a cause of preemption. preempt To alyzed in McClendon. enough particular that the facts it is not fortuitously concedes, Georgia happen to plaintiff’s a claim majority As the plan. the em- pension existence a Consider involve the involve fraud law “does not Ante, sexually the female ployer 621. Nor harasses plan_” at who aof company’s pension plan. specific manager ref of a Georgia law does the “make[ ] claim Her state law harassment would ob- pension plan. See erence to” a simply viously preempted by at 483. not be might “not existence the harassment statute “premised on” the because Nor is the law Finally, the existence of apply the law ease without pension plan. a id. See [her] ante, plan.” neces- at 621. relies does not upon which Sanson retirement. Instead, pursued her claim could be be- sarily require plead him to the existence not neces- necessarily require a court cause the harassment law would pension plan, pension plan, sarily require prove her to the existence existence of a to find the require em- if did her to require finding that the even the law necessarily provided her prove plan from his that the is what to cheat Sanson ployer wanted employment company. All at the id. Sanson’s with pension benefits.4 See fraud, prove he what- requires is that law is true in this case. Geor- The same that fraud be. submit ever proof gia only requires of fraud govern this therefore does not McClendon necessarily misrepresentation,5 and not fact, explicitly stated case. misrepresentation proof of a about dealing a case like it not was majority Apparently, dealing here with a “We are not Sanson’s: difficulty if the had have applicable statute that makes no generally misrepresented had been the avail- irrespec- indeed functions reference in- automobile ability of a new Oldsmobile of, plan.” the existence of an ERISA tive special retire- availability of a stead Id. why should the sub- program. ment But matter? misrepresentation

stance of GM’s II. does by utilized The state fraud law according the portend to operate not to correctly acknowledges majority fraud; instead, all material content of the recognized certain limits that “McClendon equally Whether frauds are actionable. that a law preemption clause: to ERISA’s plan special GM lies about a retirement preempted if the normally not be would automobile bene- benefit or an Oldsmobile require not the establishment statute did fit, provides still the state law at issue ongoing plan, if a of an maintenance cause action. no reference or functions makes statute to of, Ante, the law found plan.” at 621. To This was not true about irrespective If the em- Georgia’s that fraud law in McClendon. my position refute employee plans in fired the irrespective” ployer of ERISA McClendon “functions Oldsmobile, majori- company him the preempted, giving avoid is therefore not not a lawsuit relationship test. Ac- would have adopts ty a “but-for” Columbia, Moore, See, course, might Eckerd's Inc. in case Sanson in fact 4. Of (1980). employer’s pension plead plan. that, Ga.App. existence of his 270 S.Ed.2d require of his case him to do But the facts Georgia's law of fraud. judicial under the cause of action created that in affirming fact by the Texas Court. Unlike this court’s refusal to allow Sanson leave to case, complaint. Ante, McClendon analyzed the law in amend his at 621. against employers allowed suits who fired Thus, policy advanced in McClendon employees paying pension to avoid bene- and served preemptive ERISA’s force— fits; general- specifically, it did not or even forcing plaintiffs to assert federal causes ly, encompass firing employees of action in order to ensure pen- uniform reason, giving them cars. For this avoid sion law and in adequately order to notify operate in the fraud law this case does employers pension obligations about en-—is irrespective pension of the existence of a tirely Allowing absent in this case.- San- wrongful discharge plan, even if the cause (or son’s claim would not conflict with even action McClendon in does not. duplicate) federal parallel because no Accordingly, I believe that the mere fact federal lawsuit And the only exists. notifi- plaintiffs proof misrep- that a of a material cation employers offered to they is that may availability resentation involve the lie to potential future retirees about (and happens plans that benefit to be a future benefit without fear of reper- cussions, special than long retirement rather as the fraud at issue Oldsmobile) enough not be misrepresentations should involves very as to the preempt putative his fraud claim. Just as existence of a plan such a sexual discriminatee would not her lose that the fraud occurs in any advance of solely might plan’s harassment claim because she existence. way, In this the combina- prove employed by pension plan, she was tion of majority’s holdings San- —that should not lose his claim fraud sole- son’s state cause of action preempted by is ly might prove manag- he his because that ERISA even while ERISA denies him remedy ers lied about future ERISA benefits. alternative disappointingly per- —is pension very goals Both claims not exist if a nicious to the and desires that me, plan Congress did not exist. But for that kind of motivated to enact relationship place. “but-for” factual is too tenu- the first properly preemptive ous to invoke the ef- concluding acknowledge sage fect of ERISA. Gon observation of the Fifth Circuit Co., zales v. Prudential Insurance

III. (5th Cir.1990), “any F.2d 446 court forced to enter note, important As a final it is to realize path.” thicket sets out on a treacherous the difference result between this Id. Perhaps I have entered 451-52. and McClendon particularly case is dis path my thicket and lost the brothers turbing. A careful review of However, have found and followed. if juxtaposition with the instant case dem nothing “path” else is clear it is that the judicially onstrates what troubles me. The not; obviously Court needs created cause of action in bushhogging do serious in the some preempted would have been without a tex preemption thicket. analysis tual of ERISA’s sec provided plaintiff' tion because ERISA I deter- would reverse the district court’s parallel federal cause of effective mination Sanson’s cause of action is action. U.S. at reason, For ERISA. see also 484-86; S.Ct. respectfully dissent. 1140, 1132(a)(3), 1132(e)(1) (1988) U.S.C. §§

(providing an ERISA cause of action for

participants alleging employment that their vesting of prevent

was terminated to benefits).

their That is not true parallel

this case. Sanson has no action; indeed, majority

cause of relies

Case Details

Case Name: Chester C. Sanson v. General Motors Corporation

Court Name: Court of Appeals for the Eleventh Circuit

Date Published: Sep 16, 1992

Citation: 966 F.2d 618

Docket Number: 91-8528

Court Abbreviation: 11th Cir.