United States District Court, D. Nebraska
FINDINGS RECOMMENDATION AND ORDER
R. ZWART, Magistrate Judge.
defendant has moved for partial dismissal and to compel
arbitration of certain claims. (Filing No. 12). For the
reasons stated below, Defendant's motion to dismiss
should be granted in part and denied in part, and
Defendant's motion to compel arbitration is denied.
worked as independent sales representatives for Defendant
from 2012 to 2015. Prior to beginning the position, each
plaintiff signed the "Big Iron Independent Sales
Representative Agreement" (the "Agreement")
which outlined the terms and conditions of their position
with Big Iron. Plaintiffs allege that throughout their
employment they worked over 40 hours a week, did not receive
compensation for overtime or expenses, and were unable to
receive employee benefits including pension or welfare
benefits and health insurance. Instead, Plaintiffs were
compensated based on commissions from their sales.
filed their Complaint asserting that they, and others
similarly situated, were Big Iron employees as that term is
defined under Nebraska law and the Fair Labor Standards Act.
(Filing No. 8 at CM/ECF p. 3). They raise several claims in
their complaint. The second claim seeks employment benefits,
including a claim under the Employment Retirement Insurance
Security Act ("ERISA), 29 U.S.C. Â§ 1132. (Id. at CM/ECF
p. 4). Plaintiffs' third claim alleges Defendant either
miscalculated or manipulated Plaintiffs' sales
commissions. (Id. at CM/ECF pp. 4-5). For relief, Plaintiffs
request compensation for the wages owed, employment-related
expenses, and payment of proper contributions owed to the
government under the Federal Insurance Contributions Act
("FICA"), 26 U.S.C. Â§ 1301 et seq., and the Federal
Unemployment Tax Act ("FUTA"), 26 U.S.C. Â§ 3301, et
seq. (Id. at CM/ECF pp. 6-7).
Motion to Dismiss
survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a
complaint must contain sufficient factual matter which, if
accepted as true, states a plausible claim for relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim
is facially plausible when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Id . While the Court must accept as true
all facts pleaded by the nonmoving party and interpret all
reasonable inferences from the pleadings in favor of the
nonmoving party, Gallagher v. City of Clayton, 699
F.3d 1013, 1016 (8th Cir. 2012), a pleading that offers
labels and conclusions or a formulaic recitation of the
elements of a claim will not do. Iqbal, 556 U.S. at
678. Determining whether a complaint states a plausible claim
for relief requires the reviewing court to draw on its
judicial experience and common sense. Id. at 679.
moves to dismiss Plaintiffs' second claim requesting
employee benefits, arguing Plaintiffs have failed to exhaust
administrative remedies under the ERISA.
requires that every employee benefit plan provide "a
reasonable opportunity to any participant whose claim for
benefits has been denied for full and fair review[.]" 29
U.S.C. Â§ 1133(2). The purpose of allowing administrative
review of denied claims is to provide claim administrators
the opportunity to correct errors, decrease claim cost and
time, and promote the consistent treatment of claims.
Wert v. Liberty Life Assur. Co. of Boston, 447 F.3d
1060, 1066 (8th Cir. 2006). As such, the Eighth Circuit has
generally maintained that claimants must first exhaust the
benefit appeals procedure before presenting a claim for
wrongful denial of ERISA to the court. Midgett v. Wash.
Group Int'l Disability Plan, 561 F.3d 887, 898 (8th
Cir. 2009) (citations omitted). A claimant who "fails to
pursue and exhaust administrative remedies that are clearly
required under a particular ERISA plan" will have his
claim barred Id . But if seeking an administrative
remedy would be futile, the party may be excused from this
usual requirement. Id . The exhaustion requirement
may also be excused where the claimant is denied
"meaningful access" to the administrative review
system in place. Boyan v. Coventry Healthcare of Neb. Inc.,
2007 WL 119163 (D. Neb. Jan. 10, 2007); Ruttenberg v.
United States Life Ins. Co., 413 F.3d 652, 662 (7th Cir.
2005); Curry v. Contract Fabricators, Inc. Profit
Sharing, Plan, 891 F.2d 842, 846 (11th Cir. 1990);
Baker v. Universal Die Casting, Inc., 725 F.Supp.
416, 420 (W.D. Ark. 1989).
argues Plaintiffs were not employees and plan beneficiaries.
But it also argues Plaintiffs must exhaust the administrative
remedies available only to plan beneficiaries. Defendant
cannot have it both ways. Plaintiffs were not members of any
benefit plan. The Agreement stated they were not allowed to
be part of any employee benefit plan. (See Filing No. 14-3 at
CM/ECF p. 1). Since they were not plan beneficiaries,
Plaintiffs did not have meaningful access to any of the
documentation or information necessary to file an appeal for
administrative review. Even if Plaintiffs had the information
required and had attempted to make an appeal, the ERISA
appeals process is designed to provide plan beneficiaries
with a full and fair review of their denied claims.
Plaintiffs could not appeal a denied claim: Since they are
not plan beneficiaries, they could not make a claim much less
have one denied. Any attempt to seek administrative remedies
by the plaintiffs would have been futile. Accepting the facts
presented by Plaintiffs as true, they have stated a plausible
claim for relief and Defendant's motion to dismiss
Plaintiffs' second claim should be denied.
defendant also moves to dismiss that portion of
Plaintiffs' prayer for relief which requests recovery of
all FICA and FUTA contributions. Defendant argues no private
right of action exists under FICA and FUTA and
Plaintiffs' claim must be dismissed.
numerous courts have weighed on the issue, the Eighth Circuit
has not addressed whether FICA and FUTA create private rights
of action. Regardless, the majority of courts which have
addressed the issue have held there is no private right,
implied or otherwise, in the payment of FICA or FUTA
contributions. Umland v. Planco Fin. Servs., 542
F.3d 59 (3d Cir 2008); McDonald v. S. Farm Bureau Life
Ins. Co., 291 F.3d 718 (11th Cir. 2002); Glanville
v. Dupar, Inc., 727 F.Supp.2d 596 (S.D. Tex. 2010);
Gifford v. Meda, 2010 WL 1875096 (E.D. Mich. May 10,
2010); Bendsen v. George Weston Bakeries Distrib.,
2008 WL 4449435 (E.D. Mo. Sept. 26, 2008); Westfall v.
Kendle Intern., CPU, LLC, 2007 WL 486606 (N.D. W.Va.
Feb. 15, 2007); but see Stewart v. Project Consulting Servs.,
2001 WL 1000732 (E.D. La. Aug. 29, 2001); Sanchez v.
Overmeyer, 845 F.Supp. 1178 (N.D. Ohio 1993).
Cort v. Ash, 422 U.S. 66 (1975) outlines the factors
a court must consider in determining whether a federal
statute creates a private right of action. These factors
include (1) whether plaintiff belonged to "the class for
whose especial benefit the statute was enacted, " (2)
whether there is "any indication of legislative intent,
explicit or implicit, either to create such a remedy or to
deny one, " (3) whether implying such a remedy is
"consistent with the underlying purposes of the
legislative scheme, " and (4) whether the cause of
action is one "traditionally relegated to state
law" such that "it would be inappropriate to infer
a cause of action based solely on federal law."
Cort, 422 U.S. at 78. The Supreme Court has
clarified that the "central inquiry" is
"whether Congress intended to create, either expressly
or by implication, a private cause of action."
McDonald, 291 F.3d at 723 (citation omitted).
McDonald, the Eleventh Circuit analyzed the Cort factors and
determined FICA provides no private right of action. McDonald
explained that FICA's legislative history is
"completely devoid" of any evidence that Congress
intended to create a private right of action, (id. at 724),
and FICA is a tax-raising statute rather than a
benefit-conferring statute. Id. at
724. McDonald further reasoned that a
private right of action would undermine the ...