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Bopp v. Idaho National Laboratory Employee Retirement Plan

May 7, 2010

RON BOPP, ET AL., PLAINTIFFS,
v.
IDAHO NATIONAL LABORATORY EMPLOYEE RETIREMENT PLAN, BATTELLE ENERGY ALLIANCE, LLC, A DELAWARE LIMITED LIABILITY COMPANY, BECHTEL BWXT IDAHO, LLC, A DELAWARE LIMITED LIABILITY COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Honorable Mikel H. Williams United States Magistrate Judge

AMENDED MEMORANDUM DECISION and ORDER

Currently pending before the Court is the Defendants' Motion to Dismiss the First Amended Complaint (Docket No. 29), filed February 1, 2010.*fn1

I.

Background In this lawsuit, thirteen individuals*fn2 who have worked at the Idaho National Laboratory ("INL") for more than fifteen years seek benefits from the Idaho National Laboratory Employee Retirement Plan ("the Plan"). The individuals are currently working for Bechtel BWXT Idaho, LLC ("Bechtel") at the site.

Over the years, the Department of Energy ("DOE") had various contracts for work to be done at INL with different contractors, including Bechtel, Battelle Energy Alliance, LLC ("Batelle"), CH2M WG Idaho LLC, and Lockheed Martin Idaho Technologies Company. These contractors typically operated under management and operating contracts and participated in the INL Employee Retirement Plan. Plaintiffs allege that when employees moved from one DOE contractor to another, their rights and benefits under the INL Retirement Plan normally traveled with them. First Amended Complaint ("FAC"), Docket No. 27, ¶ 22.

While not entirely clear from the First Amended Complaint and the parties' briefing, it is the Court's understanding that prior to 2001, Bechtel had a management and operating agreement with the DOE and all of the Plaintiffs were Bechtel employees performing work under that contract and were participating in the Plan. At some point the DOE determined that a new contract would be created for certain work to be done at INL. This contract was to be known as the Advanced Mixed Waste Treatment Project Contract ("the Contract"). Whether the Contract was put out for competitive bid is not clear, but in any event British Nuclear Fuels, Ltd. ("British Nuclear") became DOE's contractor for the Contract. This Contract was different than past contracts that the DOE had with other contractors in that it was not a management and operating contract and British Nuclear did not become a sponsor of the INL Retirement Plan like the other INL contractors had been in the past. FAC ¶ 23.

As was customary, after British Nuclear took over, the Plaintiffs immediately stopped being employees of Bechtel and now became employees of British Nuclear doing the same type of work that they had done in the past. As employees of British Nuclear they did not accrue any benefits under the INL Plan since British Nuclear was not a Plan sponsor; however, they did participate in British Nuclear's 401(k) plan. Twelve of the Plaintiffs worked directly for British Nuclear while one worked for a British Nuclear subcontractor. Even though British Nuclear was not a sponsor of the Plan, Plaintiffs allege they were told that they would be able to rejoin the Plan if they ever returned to work for one of the Plan employers/sponsors, such as Bechtel. Plaintiffs also allege they were informed that as vested beneficiaries in the Plan, "they would be treated as if they had never left as long as they returned to employment with Bechtel or one of the other INL contractors." FAC ¶ 24.

The Plan is a defined benefit plan, meaning each beneficiary will receive a monthly payment based upon their years of employment as part of the Plan. Bechtel and Batelle are both sponsors of the Plan and Batelle serves as the Plan Administrator. All of the Plaintiffs were vested under the INL Plan prior to the events germane to this lawsuit. Throughout the time that they worked for British Nuclear, Plaintiffs allege they not only maintained their status as vested beneficiaries in the Plan, but they also maintained their status as "participants" under the terms of the Plan. The Plan defines "Participant," in part, as follows:

2.42.3 A former Employee with a Vested Right to immediate or deferred benefits, and an Employee who transfers to Contiguous Non-Covered Service after he has commenced participation in the Plan.

Declaration of James P. Baker in Support of Motion to Dismiss First Amended Complaint, Docket No. 31, Ex. A, Idaho National Engineering and Environmental Laboratory Employee Retirement Plan, at BBWI 000022.

Eventually, the DOE decided to replace British Nuclear and had extended discussions with Bechtel about replacing British Nuclear under the Contract. An agreement was reached and on May 1, 2005, Bechtel took over the work that British Nuclear had been performing. All of the Plaintiffs, except one,*fn3 again became Bechtel employees on May 1, 2005.

Two days before Bechtel took over from British Nuclear, on April 29, 2005, Batelle and Bechtel executed a written amendment to the Plan ("the 2005 Amendment"). The 2005 Amendment provides, in relevant part, that any employee that is hired or rehired by Bechtel on or after May 1, 2005 is not an "Eligible Employee" under the Plan unless the employee "is hired as a transfer employee directly from another Plan Sponsor and is actively accruing service in the Plan on the date of hire." Baker Decl., Ex. B at BBWI 000125-000126. It is a requirement under the Plan that an employee be an "Eligible Employee" before they could be an "Active Participant" and receive benefits under the Plan. Baker Decl., Ex. A at BBWI 000010. The Plaintiffs did not fall under the exception that would have allowed them to become active participants in the Plan on the date of hire by Bechtel, since they were not "transfer employees" from another Plan Sponsor who were "actively accruing service in the Plan on the date of hire."

As noted earlier, Plaintiffs did not become employees of Bechtel until May 1, 2005 and at the time of the 2005 Amendment, they were still employees of British Nuclear. In December 2005, Defendants sent a letter to Plaintiffs telling them that they would not be allowed to participate and acquire additional credit in the INL Employee Retirement Plan. This followed a series of meetings in which the Plaintiffs allege they were told that the Defendants were in the process of obtaining DOE approval to allow Plaintiffs to rejoin the Plan. Plaintiffs allege that they have lost "thousands of dollars in future retirement benefits" by virtue of the 2005 Amendment.

In accordance with the Plan's claims procedures, Plaintiffs filed a claim dated August 13, 2005 for reinstatement and benefits under the Plan. On September 8, 2008, Batelle informed Plaintiffs in writing that their claim was denied based on the plain language of the April 29, 2005 Amendment. Plaintiffs duly appealed the denial of their claim for benefits. On January 8, 2009, Plaintiffs were informed in writing that the Plan's Administrative Committee had denied their appeal. Plaintiffs filed suit on August 14, 2009, alleging the following four causes of action against Defendants under the Employee Retirement Income Security Act ("ERISA"): (1) failure to provide notice of amendment; (2) estoppel; (3) interference with protected rights under ERISA; and (4) breach of fiduciary duty.

II.

Standard A motion to dismiss under Rule 12(b)(6) will be granted when the complaint fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). In a reviewing a complaint under this Rule, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002). However, a complaint, or portions thereof, will be dismissed if the plaintiff cannot establish "any set of facts consistent with the allegations in the complaint." Bell Atlantic Corp. v. Twombly, 550 U.S. 533, 563 (2007).

A complaint attacked by a Rule 12(b)(6) motion to dismiss "does not need detailed factual allegations... but requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555 (internal citations omitted). "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. This tenet that allegations must be taken as true does not extend to legal conclusions contained in the complaint. Ashcroft v. Iqbal, -- U.S. --, 129 S.Ct. 1937, 1949 (2009). The complaint must plead "enough facts to state a claim of relief that is plausible on its face." Twombly, 550 U.S. at 570. "Determining ...


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