Robles v. Lowe's Home Centers, LLC

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

MILTON ROBLES and DAYRA

RIVERA, individually and on

Behalf of all others similarly situated,

Plaintiffs,

v. Case No. 8:19-cv-2713-T-02AAS

LOWE’S HOME CENTERS, LLC,

Defendant.

_____________________________/

ORDER

This matter comes to the Court on a Motion to Dismiss filed by the

Defendant, Lowe’s Home Centers, LLC. Dkt. 22. Plaintiffs, Milton Robles and

Dayra Rivera, responded to this motion, Dkt. 26, to which Defendant replied, Dkt.

27. The Court denies the Defendants’ Motion to Dismiss. Dkt. 22. The Court

permits discovery to proceed on the two individual plaintiffs’ cases, but not class

discovery at this time. Class issues will be addressed on a later schedule set by the

Court. The individual cases must be adjudicated and pass the summary judgment

stage before class matters are taken up.

BACKGROUND

On October 31, 2019, Plaintiffs filed a Complaint against Defendant for

violating the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001

et seq (“ERISA”), as amended by the Consolidated Omnibus Budget

Reconciliation Act of 1985 (“COBRA”). Dkt. 1. Plaintiffs later amended their

complaint. Dkt. 19. In the Amended Complaint, Plaintiffs contend that Defendant

violated ERISA by failing to provide them with a sufficient COBRA notice,

causing Plaintiffs to lose insurance coverage and incur significant medical bills.

Dkt. 19. Defendant moves to dismiss the Amended Complaint, contending that

Plaintiffs lack standing and have failed to state a plausible claim under ERISA.

Dkt. 22.

LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead

sufficient facts to state a claim that is “plausible on its face.” Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009) (citation omitted). When considering a Rule 12(b)(6) motion,

the Court accepts all factual allegations of the complaint as true and construes them

in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282,

1284 (11th Cir. 2008) (citation omitted). Courts should limit their “consideration to

the well-pleaded factual allegations, documents central to or referenced in the

complaint, and matters judicially noticed.” La Grasta v. First Union Sec., Inc., 358

F.3d 840, 845 (11th Cir. 2004) (citations omitted).

DISCUSSION

Defendant offers two arguments for dismissing the Amended Complaint.

First, Defendant argues that Plaintiffs lack standing by alleging a purely

information injury and an injury not fairly traceable to Defendant’s conduct.

Defendant further argues that Plaintiffs fail to state a plausible claim because the

COBRA notice complies with the requirements of ERISA, COBRA, and relevant

regulations. The Court will address each of these concerns in turn.

1. Standing

To begin with, Plaintiffs have the burden of proving that they have Article

III standing. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). To do that,

Plaintiffs must allege sufficient facts to establish that they “(1) suffered an injury in

fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3)

that is likely to be redressed by a favorable judicial decision.” Id. (citation

omitted). “[A]t the pleading stage, [Plaintiffs] must ‘clearly . . . allege facts

demonstrating’ each element.” Id. (quoting Warth v. Seldin, 422 U.S. 490, 518

(1975)).

Plaintiffs base their case on allegations of deprivation of information

required under COBRA (an informational injury) and “lost insurance benefits and

medical bills” (an economic injury). Defendant argues that an information injury is

insufficient to allege an injury in fact and that Plaintiffs’ economic injury is not

fairly traceable to any alleged defects in the COBRA notice.

For an informational injury, “a plaintiff must [still] show that he or she

suffered ‘an invasion of a legally protected interest’ that is ‘concrete and

particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Spokeo,

136 S. Ct. at 1548 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560

(1992)). “[A] plaintiff who alleges a violation of a statutory right to receive

information alleges a concrete injury.” Nicklaw v. Citimortgage, Inc., 839 F.3d

998, 1002 (11th Cir. 2016) (citing to Fed. Election Comm’n v. Akins, 524 U.S. 11,

20–25 (1998)). That said, the statutory right must concern something more than “a

bare procedural violation, divorced from any concrete harm[.]” Spokeo, 136 S. Ct.

at 1549; see, e.g., Havens Realty Corp. v. Coleman, 455 U.S. 363, 373 (1982)

(finding standing under the Fair Housing Act for a plaintiff who did not receive

required disclosures by the defendant because the statute “establishes an

enforceable right to truthful information concerning the availability of housing”).

Plaintiffs avoid entirely relying on the somewhat ephemeral notion of

“informational injury.” They also allege facts showing they suffered a specific

economic injury fairly traceable to Defendant’s allegedly deficient COBRA notice.

Plaintiffs allege that the deficient notice caused “economic injuries in the form of

lost health insurance and unpaid medical bills[.]” Dkt. 19 ¶ 4. This is plainly an

injury in fact. But Defendant argues that this injury is not fairly traceable to the

allegedly deficient COBRA notice. That remains to be seen in discovery, which

should go forward on the two individual plaintiffs’ claims.

The causation element of Article III standing requires “a causal connection

between the injury and the conduct complained of—the injury has to be fairly

traceable to the challenged action of the defendant, and not the result of the

independent action of some third party not before the court.” Hollywood Mobile

Estates Ltd. v. Seminole Tribe of Fla., 641 F.3d 1259, 1265 (11th Cir. 2011)

(quoting Lujan, 504 U.S. at 560). Defendant argues that while Plaintiffs allege

deficiencies in the COBRA notice, they fail to allege how those deficiencies

caused Plaintiffs to “not understand the notice” in a way that caused them to be

“unable to elect COBRA.” Dkt. 19 ¶ 32. “This argument confuses weakness on the

merits with absence of Article III standing.” Davis v. United States, 564 U.S. 229,

249 n.10 (2011). As noted below, whether the COBRA notice was deficient in a

way that impacted Plaintiffs’ ability to get health insurance is an issue

inappropriate for resolution at this stage of the litigation.

Much like the Plaintiff in Delaughter v. ESA Mgmt., LLC, Plaintiffs allege

deficiencies in the COBRA notice prevented them from being able to access

COBRA coverage. 2018 WL 7349251, at *2 (holding that allegations of loss of

COBRA coverage were “sufficient to state a plausible claim of injury in fact

traceable to the allegedly defective COBRA notice as required to confer standing

upon the Plaintiff”). Plaintiffs allege that “the notice itself never actually explains

how to enroll in COBRA, nor does it bother including a physical election form”

and that the COBRA noticed lacked information like the “explanation that a

qualified beneficiary’s decision whether to elect continuation coverage will affect

the future rights of qualified beneficiaries to portability of group health coverage,

guaranteed access to individual health coverage, and special enrollment under part

7 of title I of the Act[.]” Dkt. 19 ¶¶ 31a & e. These are more than conclusory

allegations and are sufficient to allege causation for standing and Rule 12(b)(6)

purposes. See Jones v. Salvation Army, No. 3:18-CV-804-J-32JRK, 2019 WL

6051437, at *8 (M.D. Fla. Nov. 15, 2019) (finding no standing when the plaintiff

“merely relies on conclusory and contradictory allegations that she was confused”).

Since Plaintiffs have adequately alleged injury-in-fact, causation, and

redressability (uncontested by the parties), there is standing to proceed to the

merits of the individual claims.

2. Merits

Defendant argues that Plaintiffs’ Amended Complaint fails to state a claim

because the COBRA notice sent to Plaintiffs “includes all of the information

required by the Regulation” and any missing information is a de minimis “technical

deficienc[y].” Dkt. 22 at 10–11. Plaintiffs point to many perceived problems with

Defendant’s COBRA notice and argue that the notice “resulted in their inability to

make an informed decision as to electing COBRA continuation coverage.” Dkt. 26

at 2. However, any determination of the sufficiency of the notice is inappropriate at

this stage of the proceedings.

The plan administrator of an employer health plan must provide former

employees with “written notice … of [their COBRA] rights.” 29 U.S.C. §

1166(a)(1). Notice must be provided in accordance with regulations promulgated

by the Secretary of Labor. 29 U.S.C. § 1166(a). Chief among those regulations, the

notice must “be written in a manner calculated to be understood by the average

plan participant” and contain certain specific information. 29 C.F.R. § 2590.606-

4(b)(4). The Eleventh Circuit has “not directly addressed what an employer must

do to satisfy its notification obligations under COBRA[.]” DeBene v. BayCare

Health Sys., 688 F. App’x 831, 839 (11th Cir. 2017). But the notice must be

sufficient to permit the discharged employee to make an informed decision

whether to elect COBRA coverage. See Meadows v. Cagle’s, Inc., 954 F.2d 686,

692 (11th Cir. 1992).

Defendant’s argument is a denial of Plaintiffs’ allegation that the notice was

deficient enough to prevent the Plaintiffs from making an informed decision about

COBRA election—in short, a challenge addressing the merits of Plaintiffs’ case.

Whether the COBRA notice here was deficient is a question that is premature for

disposition. See, e.g., Delaughter, 2018 WL 7349251, at *3 (“[T]he Court reserves

ruling on the issue of whether ESA’s COBRA notice was deficient, in fact, and

will consider any such argument in a motion for summary judgment.”). So the

Defendant’s Motion to Dismiss must be denied.

CONCLUSION

For the reasons stated above, this Court denies Defendant’s Motion to

Dismiss. Dkt. 22. Defendant must file their answer and defenses within fourteen

(14) days. No class discovery or consideration of class action issues shall proceed

until resolution of the individual claims on summary judgment (or waiver of same

by Defendant).

DONE AND ORDERED at Tampa, Florida, on March 3, 2020.

/s/ William F. Jung

WILLIAM F. JUNG

UNITED STATES DISTRICT JUDGE

COPIES FURNISHED TO:

Counsel of Record