Free Respone to Objections - District Court of Delaware - Delaware

Case 1:07—cv—00674-SLR-LPS Document 67 Filed 07/24/2008 Paget of4
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
J OHN J. DOUGHERTY )
Plaintiff} i -
v. i Civil Action No. 07»674·-SLR/LPS
ALAN BLIZE and ASDI i
INCORPORATED, ) JURY TRIAL DEMANDED
a Delaware Corporation, )
Defendants. i
PLAINTIFIPS RESPONSE IN OPPOSITION TO l)EFENDANTS" PARTIAL
OBJECTIONS TO PROPOSED REPORT AND RECOMMENDATIONS
Pursuant to Fed. R. Civ. P. 72, plaintiff John J. Dougherty (‘°Dougherty") hereby
responds to Defendants Alan Blize and ASDI, Inc.’s (collectively "Defendants") partial
objection to the Report and Recommendation of the Honorable Leonard P. Stark, U.S.
Magistrate Judge, dated June 25, 2008 (the "Report"). Contrary to Defendants claims,
Dougherty’s Complaint (D.l. i) alleges facts sufficient to state a claim for relief under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. § 1161 et seq., for
Defendants’ provision of a COBRA notice that included "false and/or deceptive inf`onnation."
A. The Court Correctly Held That The Complaint Sufiiciently Pleads a COBRA
Claim.
1. The Court correctly held that Dougherty’s Complaint alleges facts sufficient to
state a claim for violation of § II66 of COBRA. Specifically, the Court held that "Dougherty’s
allegations that the COBRA notice he received was false and/or deceptive and incomplete do
state claims on which relief may be granted? Report at ll. In doing so, the Court properly
accepted as true Dougherty’s allegation that the COBRA notice included false and/or deceptive
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infomation. See id at 11·—l2; see also D.I. 1, 11 Sl; Spruill v. Gillis, 372 F.3d 218, 223 (3d Cir.
2004). Specifically, the Court held that Dot1gherty’s allegation, among others, that Defendants
failed to identify the qualifying event on the COBRA notice stated a claim that the notice was
inadequate under COBRA in that it included false and/or deceptive infomation.
2. The Court’s holding with respect to Dougherty’s COBRA claim is wholly
consistent with Third Circuit case law. Employers or plan administrators must make a "good
t"aith” attempt to comply with COBRA and provide proper notification. Williams v. New Castle
County, 970 F.2d 1260, 1265 (3d Cir. 1992); see also Kane v. United Indep. Union Wehictre
Fund, 1998 WL 78795, at *5 (ED. Pa.), This "good faith" standard "require[s] that no part of
the notice be false or deceptive[.]" Hummer v. Sears, Roebuck & Co., 1994 WL 1l61l7, at *6
(E.D.Pa.).1
3. Based on that standard, Dougherty sufficiently alleged in his Complaint that
information in the notice was false and/or deceptive. Sec D.I. l at tl 52. Moreover, it is clear
from the other facts alleged that there is some question as to the propriety of the use of May 3,
2007, as the "qualifying event." See D1. 1 at 'll 29 (describing January 2, 2007, meeting where
Dougherty was placed on a "leave of absence"); il 32 (alleging that Defendants ignored
Dougherty’s requests for clarification of his employment status); {[1] 33-34 (same regarding
Dougherty’s payment status); ‘[l 36 (describing Doughe1ty’s uncertainty regarding his
employment status). This iive—month period of uncertainty culminated in Defendants
unexpectedly providing the false and/or deceptive COBRA notice on May 18, 2007. See BI. 1
at 1[‘\l 40-41. Given the animosity between the parties on January 2, 2007, the Defendants’
i Defendants continue to rely on cases that were decided at the summaiy judgment stage,
after the parties had the benefit of full discovery. See Hummer, 1994 WL 116117, at *l. Such
cases that would require Dougherty to satisfy a burden of proof are inapposite at this stage ofthe
proceedings.
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subsequent refusal to communicate with Dougherty, and Dougherty’s sudden "terrnination,”
Dougherty’s Complaint sufficiently states a violation of COBRA. With additional discovery,
Dougherty expects that he will be able to more fully develop these claims. See Wilkerson v. New
Media Tech. Charter Sch., [nc., 522 F.3d 315, 32l-22 (3d Cir. 2008) (holding that a complaint
will survive a motion for judgment on the pleadings in the Third Circuit where it “state[s]
enough facts to raise a reasonable expectation that discovery will reveal evidence of the
necessary element"). Thus, taking the allegations as true, the Court properly held that Dougherty
adequately pled a COBRA violation under applicable Third Circuit law.
4. Despite the Court’s clear holding and adherence to the applicable standard of
review, Defendants make several strained arguments. Defendants’ claims that Dougherty did not
assert the false or deceptive nature of the COBRA notice in his Complaint and that such an
assertion is inconsistent with his Complaint are meritless. See Defsf Part. Obj. at lll] 8——9 (DJ.
65). As shown above, the allegations in Dougherty’s Complaint, taken as true,2 adequately and
consistently plead that the COBRA notice was false and/or deceptive. Defendants’ remaining
arguments regarding the COBRA notice are equally meritless based on the Court’s finding that
the deficiencies of the COBRA notice must, at this stage, be taken as true. Such issues are
factual and require development through discovery.
5. EDougherty’s Complaint adequately pleads a violation under COBRA.
Specifically, Defendants failed to provide a notice free of any false and/or deceptive information.
Thus, Defendants did not, in good faith, attempt to comply with the statutory provisions of
COBRA. Through discovery, Dougherty will have a chance to further develop the precise
contours of Defendants false and deceptive notice. At this stage, however, the Court correctly
2 Moreover, if the allegations inthe Complaint are somewhat unclear, the "brief may help
explain a legal theory advanced in the complaint[.]" Vldlliams, 970 F.2d at 1266 n.4.
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held that Dougherty adequately stated a claim under COBRA for a notice that included false
and/or deceptive infomation. Therefore, the Report, as to Dougherty’s remaining COBRA
claim, should be affirmed.
Respectfully Submitted,
CONNOLLY BOVE LODGE & HUTZ LLP
Matthew F. Boyer (Del. §ar Nc. 25 64)
Email: [email protected]
Timothy M. Holly (Del. Bar Nc. 4106)
Email: '1`[email protected]
Josiah R. Wolcott (Del. Bar No. 4796)
Email: [email protected]
The Nemours Building
1007 North Orange Street
P.O. Box 2207
Date: July 24, 2008 Wilmington, Delaware 19899
(302) 658~9l4l
Attorneys for John J Dougherty
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