OPINION AND ORDER
The plaintiffs, Frederick L. Winfield, Zulma G. Muniz, James Steffensen, and Adoram Shen (“the plaintiffs”), bring this purported class action on behalf of themselves and all others similarly situated against the defendant, Citibank, N.A. (“the defendant”). The plaintiffs are personal bankers who were previously employed by the defendant. They were classified as “non-exempt” employees and therefore eligible for overtime payments under federal and state laws but claim that they were not paid overtime for which they should have been paid. The plaintiffs bring claims under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and various state laws. The defendant now moves to dismiss the plaintiffs’ ERISA claims; to dismiss plaintiff Shen’s claim under California law and to strike the allegations asserted in that claim; and to strike the plaintiffs’ claims for injunctive relief.
In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in the plaintiffs favor. McCarthy v. Dun & Bradstreet Corp.,
When presented with a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that are either in the plaintiffs possession or that the plaintiff knew of when bringing suit, or matters of which judicial notice may be taken. See Chambers v. Time Warner, Inc.,
II.
The following facts alleged in the Amended Complaint are accepted as true for the purposes of this motion to dismiss, unless otherwise indicated. The plaintiffs are personal bankers who were previously employed by the defendant. (Am. Compl. ¶ 12.) Their primary job responsibility was to sell the defendant’s financial products and services to the general public in Citibank branches throughout the United States. (Am. Compl. ¶21.) They bring this purported class action on behalf of themselves and other future, current and former employees of Citibank who are similarly situated, asserting claims under ERISA and the FLSA (“the purported ERISA class” or “the purported FLSA class”). Plaintiffs Winfield, Muniz and Shen also bring purported class claims on behalf of District of Columbia, Illinois, and California subclasses, respectively, alleging violations of those states’ laws. (Am. Compl. ¶¶ 14-16.)
The plaintiffs allege that, during their employment with the defendant, they and members of the purported FLSA class were classified as “non-exempt” employees and therefore eligible for overtime payments under federal and state laws. (Am. Compl. ¶ 22.) The plaintiffs claim, however, that the defendant has failed to pay them and the purported FLSA class the overtime compensation to which they were entitled and has thereby violated the FLSA and the laws of the District of Columbia, Illinois, and California. (Am. Compl. ¶¶ 84-120.)
The plaintiffs also allege that the defendant was a plan sponsor and fiduciary of the Citigroup 401(K) Plan (“the Plan”), an employee pension benefit plan within the meaning of § 3(2) of ERISA and an em
The plaintiffs also allege that the defendant has failed to maintain records indicating the hours that they and all members of the purported ERISA class have worked in excess of forty hours per week. (Am. Compl. ¶¶ 69, 74,) The plaintiffs claim that, by failing to do so, the defendant has violated the record-keeping requirement set forth in section 209(a)(1) of ERISA. (Am. Compl. ¶¶ 68-76.) The plaintiffs seek injunctive and equitable relief to remedy this alleged violation of ERISA. (Am. Compl. ¶¶ 75-76.)
The defendant now brings this motion seeking dismissal of the plaintiffs’ record-keeping and breach of fiduciary duty claims under ERISA. The defendant also moves to dismiss plaintiff Shen’s claim under California state law, which he seeks to bring on behalf of a California subclass, and to strike the class allegations asserted in that claim. Finally, the defendant moves to strike the plaintiffs’ claims for injunctive relief.
III.
The defendant first moves to dismiss the plaintiffs’ First Claim for Relief, namely the claim for failure to maintain accurate records. The defendant contends that the plaintiffs cannot bring this claim under either section 209(a)(1) or section 502(a)(3) of ERISA. The defendant also asserts that the plaintiffs have failed to state a claim for violation of the ERISA record-keeping requirement.
A.
Section 209(a)(1) of ERISA requires that “every employer shall ... maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees.” 29 U.S.C. § 1059(a)(1). Section 209(b) provides that “[i]f any person who is required ... to furnish information or maintain records for any plan year fails to comply with such requirement, he shall pay to the Secretary a civil penalty of $10 for each employee with respect to whom such failure occurs.... ” 29 U.S.C. § 1059(b).
Courts have interpreted this language to mean that section 209 does not create a private right of action but instead affords the remedy of a civil penalty to be
The plaintiffs do not dispute that a private right of action is unavailable under section 209(a) of ERISA.
[a] civil action may be brought—
by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan[.]
29 U.S.C. § 1132(a)(3). The relief available under this provision is limited to equitable relief: monetary damages are generally unavailable. See Lee v. Burkhart,
District courts in this Circuit that have confronted ERISA record-keeping claims brought under section 502(a)(3) have deemed such claims to be disguised claims for benefits properly brought under section 502(a)(1)(B) of ERISA rather than claims for equitable relief which may permissibly be brought under section 502(a)(3). For example, in DeSilva v. North Shore-Long Island Jewish Health System, Inc.,
plaintiffs cannot avoid the fact that, ultimately, their claim is one for monetary relief.... [I]f plaintiffs are successful on their claim to be credited for all hours worked (assuming arguendo that the plan requires such crediting) this crediting of hours will result in a recalculation of plaintiffs’ benefits, which, in turn, will result in a monetary gain to plaintiffs.
Id. at 537. The court thus found that “[s]uch a claim should be brought under Section 502(a)(1)(B), not Section 502(a)(3), and cannot be brought before plaintiffs have exhausted their administrative remedies.” Id. at 537-38; see also Barrus v. Dick’s Sporting Goods, Inc.,
In this case, like in DeSilva and Barrus, the plaintiffs purportedly seek injunctive relief requiring the defendant to credit the plaintiffs and members of the purported ERISA class for hours worked but not recorded. The logical result of such crediting of hours would be a recalculation of the plaintiffs’ benefits, which, in turn, would result in monetary relief. Thus, the “plaintiffs’ claim is inextricably intertwined with the benefits that they will
Thus, the plaintiffs’ record-keeping claim cannot be brought under section 502(a)(3) or section 209(a)(1), and the First Claim for Relief must be dismissed.
B. The First Claim for Relief should also be dismissed because the plaintiffs have failed to state a claim for a violation of section 209(a)(1) of ERISA. Under section 209(a)(1), an .employer is only required to maintain those records “sufficient to determine the benefits due or which may become due to such employees.” 29 U.S.C. § 1059(a). In order to assess what records are “sufficient to determine the benefits due” to employees, a court must “evaluate] how contributions are allocated under the pension plan.” Henderson v. UPMC,
Here, the only records the plaintiffs claim the defendant failed to maintain are those indicating the number of hours the plaintiffs worked. However, under the Plan at issue in this case, it is the compensation actually paid to employees, rather than the number of hours worked, which is relevant to allocating contributions. See Plan at 6 (stating that eligible pay for the purposes of Plan contributions includes “the regular base salary and wages paid in cash, including overtime and shift differentials, paid by an Employer during such Plan Year”); Summary Plan Description at 6 (stating that eligible pay for the purposes of Plan contributions includes “base pay, plus overtime and shift differential paid to you during the calendar year”).
The plaintiffs urge the Court to reach a contrary conclusion, pointing to the Plan’s definition of “hours of service.” This definition does account for not only the number of hours for which an employee is actually paid but also the number of hours for which the employee is entitled to payment. (Plan at 11.) However, the number of “hours of service” an employee performs is only relevant to determining whether certain part-time or temporary employees are eligible to participate in the Plan in the first instance,
The plaintiffs also refer to a provision in the Summary Plan Description which requires that eligible pay be “earned and paid” while the employee is an eligible employee of the company. (Summary Plan Description at 6.) The plaintiffs interpret this provision to mean that compensation that is earned but not paid is relevant to calculation of benefits under the Plan. (Tr. at 19-21.) However, this interpretation is not persuasive. The provision makes clear that, to constitute eligible pay under the Plan, the compensation must be both “earned” and “paid.” (Summary Plan Description at 6.) Accordingly, compensation that is earned but not actually paid does not constitute eligible pay under the Plan.
Thus, because the Plan at issue here determines benefits based on the compensation paid to employees rather than the number of hours worked, any alleged failure by the defendant to maintain records of hours worked does not constitute an ERISA record-keeping violation. See, e.g., Henderson,
IV.
The defendant next moves to dismiss the plaintiffs’ Second Claim for Relief for breach of fiduciary duty under ERISA.
Section 404(a)(1) of ERISA provides that an employee benefit plan fiduciary shall, among other obligations, “discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries....” 29 U.S.C. § 1104. ERISA defines a plan fiduciary as a person who, among other functions, “exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets” or “has any discretionary authority or discretionary responsibility in the administration of such plan.” 29 U.S.C. § 1002(21)(A). To qualify as a fidu
Here, the plaintiffs allege that the defendant breached its fiduciary duties under ERISA by “failing to credit and/or pay compensation due for overtime performed by Plaintiffs and the members of the ERISA Class as Eligible Compensation under the Citigroup Plan.” (Am. Compl. ¶ 81.) However, the crediting of hours worked is not a fiduciary function where, as here, the number of hours worked does not factor into the calculation of benefits under the plan in question. “[W]here an ERISA plan defines benefits in terms of compensation, and where compensation is tied to wages actually paid, employers are not obligated to credit employees for ‘all hours worked,’ and thus, the failure to credit those hours does not constitute a breach of fiduciary duty under ERISA.” De Silva,
The plaintiffs cite a line of cases holding that claims for breach of fiduciary duty premised on a failure to credit hours worked could not be dismissed at the pleading stage. See Stickle,
Indeed, there are sound policy reasons for rejecting this line of cases. If ERISA imposed a fiduciary duty to ensure that all overtime hours worked were properly recorded and compensated, irrespective of how benefits are calculated under the applicable plan, then every violation of the FLSA would give rise to a violation of ERISA.
In enacting ERISA, Congress’ primary concern was with the mismanagement of funds accumulated to finance employee benefits and the failure to pay employees benefits from accumulated funds.... [T]he danger of defeated expectations of wages for services performed [is] a danger Congress chose not to regulate in ERISA.
Massachusetts v. Morash,
Moreover; treating a failure to credit overtime hours worked as a fiduciary duty under ERISA would allow future plaintiffs to circumvent the opt-in requirement for FLSA collective actions by instead bringing claims for unpaid overtime as opt-out class actions under ERISA, effectuating an immense sub rosa expansion of the FLSA.
Accordingly, the sweeping definition of fiduciary duties under ERISA that the plaintiffs urge the Court to adopt is not
V.
The defendant next moves to dismiss the Sixth Claim for Relief, namely plaintiff Shen’s claim under California law, which he seeks to bring on behalf of a California sub-class. The defendant argues that the claim should be dismissed under the abstention doctrine set forth in Colorado River Conservation Dist. v. United States,
A.
Colorado River abstention arises in limited “situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal courts or by state and federal courts.” Colorado River,
The defendant argues that Colorado River abstention is appropriate here because plaintiff Shen’s California class claim is parallel to an action brought in California state court two years prior to this ease (“the Davis case”). The Davis case, in which Citibank is the only defendant, is a purported California class action that is premised on the same California statutes and similar factual allegations of unpaid overtime. The defendant contends that proceeding with plaintiff Shen’s later-filed, duplicative California state law claims in federal court would be an inefficient use of limited judicial resources.
The defendant has not established a basis for Colorado River abstention at this stage of the litigation. The Court is not yet being asked to decide whether it is appropriate to certify the California subclass on whose behalf plaintiff Shen seeks to bring his claim, such that there would be a class action in New York which is potentially duplicative of the Davis case
The defendant argues that plaintiff Shen’s claim should nonetheless be dismissed at this stage because the class-related discovery pending a class certification decision would be burdensome and costly. However, there is nothing in the defendant’s papers in connection with this motion indicating that any such discovery would be unduly burdensome. Moreover, because discovery will proceed in any event on the plaintiffs’ FLSA claims, which have significant factual overlap with the California state law claims, the burden associated with discovery will likely be reduced. In addition, any arguments with respect to the burdensome nature of discovery should be directed at imposing appropriate limits on discovery rather than dismissing possibly meritorious claims. See Fed.R.CivJP. 26(b)(2)(C)(iii) (requirement of proportionality in discovery).
The Colorado River doctrine does not require abstention merely because parallel federal and state court actions are proceeding simultaneously. To the contrary, abstention is only appropriate where extraordinary circumstances weighing against the exercise of jurisdiction are present. The defendant has not demonstrated that such extraordinary circumstances exist here. Thus, the defendant’s motion to dismiss plaintiff Shen’s California law claim is denied. The denial is without prejudice to reassertion at a subsequent time, if class-related discovery with respect to plaintiff Shen’s claim becomes burdensome or duplicative, or at the class certification stage.
B.
The defendant also moves to strike plaintiff Shen’s class allegations, asserting that the adequacy and superiority requirements of Rule 23 are not satisfied.
“Motions to strike are generally disfavored, and should be granted only when there is a strong reason for doing so.” In re Tronox Sec. Litig., No. 09 Civ. 6220,
VI.
Finally, the defendant moves to strike the plaintiffs’ claims for injunctive relief. The defendant, relying on the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, — U.S. -,
It is appropriate to defer standing objections until after class certification where certification issues are “ ‘logically antecedent’ to Article III concerns.” Ortiz v. Fibreboard Corp.,
In this case, it is undisputed that each of the named plaintiffs has standing to bring at least some claims. Moreover, the class certification process is “logically antecedent” to Article III concerns in this case. If any proposed class includes plaintiffs who are current employees of the defendant and thus have standing to bring claims for injunctive relief, the only relevant question will be whether the injuries of the named plaintiffs are “sufficiently similar to those of the purported Class to justify the prosecution” of such a class action. In re Grand Theft Auto Video Game Consumer Litig. (No. II), No. 06 MD 1739,
The defendant, however, argues that any addition of current employees into the prospective class would not cure the standing problems raised here, contending that the Supreme Court in Dukes held that the proper remedy when faced with a prospective Rule 23(b)(2) class consisting of both
Accordingly, it is appropriate to defer the defendant’s standing objections to the claims for injunctive relief until after the class certification determination. The defendant’s motion to strike the plaintiffs’ claims for injunctive relief is therefore denied without prejudice.
CONCLUSION
The Court has considered all of the arguments of the parties. To the extent not specifically addressed above, the remaining arguments are either moot or without merit. For the foregoing reasons, the defendant’s motion is granted in part and denied in part. The Clerk is directed to close Docket No. 33.
SO ORDERED.
Notes
. Hr’g Tr., 24-25, Dec. 20, 2011 ("Tr.”).
. The plaintiffs contend that they should not be required to exhaust administrative remedies before bringing this action because doing so would be futile and inadequate. See, e.g., Kennedy v. Empire Blue Cross & Blue Shield,
. The Court can properly consider the Plan and the Summary Plan Description on this motion to dismiss because they are essential to the plaintiffs' ERISA claims and incorporated by reference into their complaint. See Chambers,
. It is undisputed that the plaintiffs here were full-time employees who were automatically eligible to participate in the Plan without any preliminary calculation of the hours of service they had performed.
. The plaintiffs seek leave to amend the complaint in the event the Court deems the defendant's motion to have merit. However, the plaintiffs were already given an opportunity to amend the complaint in response to a prior motion to dismiss by the defendant-and were put on notice that, if any claims in the amended complaint were dismissed, such dismissal would be with prejudice. Memorandum Opinion and Order, Winfield v. Citibank, N.A., 10 Civ. 7304 (S.D.N.Y. Apr. 13, 2011); see also Abu Dhabi Commercial Bank v. Morgan Stanley & Co., No. 08 Civ. 7508,
. The defendant also asserts that it cannot be characterized as a plan fiduciary because it has no discretion or authority over crediting compensation under the Plan. However, the Court need not reach this argument because, regardless of whether the defendant qualifies as a plan fiduciary, the crediting of hours worked is not a fiduciary function under the Plan at issue in this case.
. At oral argument, counsel for the plaintiffs suggested that a breach of fiduciary duty claim could also arise from the defendant's failure to ascertain the accuracy of contributions under the Plan and failure to ensure that compensation earned was in fact paid. (Tr. at 21.) However, it is clear that ”[w]here the Plan itself imposes no obligation to credit for such hours or to base benefits determinations on compensation that might be owing to employees, plan administrators do not have an obligation to double-check whether employers are fulfilling their statutory and contractual payment obligations to employees.” De Silva,
. At oral argument, plaintiffs’ counsel agreed that this would be the logical result of the argument advanced by the plaintiffs. See Tr. at 21 ("[The Court:] If you say there’s a fiduciary obligation on the part of the administrator to assure that all overtime is in fact paid so that ERISA benefits are triggered then, of necessity, every violation of the Fair Labor Standards Act is a violation of ERISA, right? [Plaintiffs’ counsel:] Yes, your Honor.”)
. These six factors are: "(1) assumption of jurisdiction over a res; (2) inconvenience of the forum; (3) avoidance of piecemeal litigation; (4) order in which the actions were filed; (5) the law that provides the rule of decision; and (6) protection of the federal plaintiff's rights.” Mouchantaf,