In Gardner v. Heartland Industrial Partners, L.P., No. 11-2327 (6th Cir. 2013), the Court faced the question of whether the plaintiff’s state-law claim of tortious interference with a contract, which happens to be a pension plan subject to ERISA, is “completely preempted” under ERISA § 1132(a)(1)(B).
In this case, one defendant, Heartland Industrial Partners, L.P. (“Heartland”), is a Delaware investment firm that formerly held an ownership interest in Metaldyne Corporation, an automotive supplier in Michigan. Defendant Timothy Leuliette is a co-founder of Heartland and was the CEO and Chairman of the Board of Metaldyne. Defendant Daniel Tredwell is likewise a Heartland co-founder and was a Metaldyne Board member.The plaintiffs are former Metaldyne executives.
In August 2006, Heartland agreed to sell its ownership interest in Metaldyne to another investment firm, Ripplewood Holdings. Less than two months later, Metaldyne submitted to the SEC a “Schedule 14A and 14C Information” report that detailed the terms of the acquisition. The report failed to mention, however, that Metaldyne would owe the plaintiffs approximately $13 million as a result of the sale to Ripplewood. That obligation arose under a change-of-control provision in Metaldyne’s “Supplemental Executive Retirement Plan” (“SERP”), in which the plaintiffs were participants. The SERP is a plan subject to ERISA. Ripplewood threatened to back out of the deal when it found out about the $13 million SERP obligation.
In response, Leuliette and Tredwell persuaded Metaldyne’s Board (of which they were Chairman and a Member, respectively) simply to declare the SERP invalid. The Board did so on December 18, 2006, though it did not notify the plaintiffs of that fact at the time. The Ripplewood deal closed less than a month later. Leuliette personally collected more than $10 million as a result of the deal. A month after the deal closed, Metaldyne notified the plaintiffs that it had invalidated the SERP. This suit ensued, with the plaintiffs pleading a single state-law claim against Heartland, Leuliette, and Tredwell, for tortious interference with contractual relations, due to their role in invalidating the SERP. The defendants removed the case to federal court, contending that the plaintiffs’ claim was “completely preempted” under ERISA. The defendants also filed a motion to dismiss the case on that ground. The district court granted the defendant’s motion to dismiss, and the plaintiffs appeal.
The specific issue before the Court is jurisdictional: whether the plaintiffs’ complaint stated a federal question, thereby allowing the defendants to remove the case from state to federal court. The Court noted that, when a federal statute-such as ERISA- wholly displaces the state-law cause of action through complete pre-emption, the state claim can be removed. Section 1132(a)(1)(B) of ERISA has this effect, and a claim within the scope of that section will be completely preempted. A claim is within this scope if two requirements are met: (1) the plaintiff complains about the denial of benefits to which he is entitled only because of the terms of an ERISA-regulated employee benefit plan and (2) the plaintiff does not allege the violation of any legal duty (state or federal) independent of ERISA or the plan terms. Here, the defendants’ duty not to interfere with the plaintiffs’SERP agreement with Metaldyne arises under Michigan tort law, not the terms of the SERP itself. Also, the defendants’ duty is not derived from, or conditioned upon, the terms of the SERP. Thus, prong (2) is not met, so that the plaintiffs’ claim is not completely preempted by ERISA. As such, the Court overturned the district court’s dismissal of the plaintiffs’ claim.