Opposition Brief — Edwards v. A.H. Cornell & Son, Inc.

3 ‘, eee

No. 10-732 | n

Sn The

Supreme Court of the Anited States

SHIRLEY EDWARDS,

Petitioner.

A.H. CORNELL AND SON, INC.,

D/B/A AH CORNELLS AND MELISSA

CLOSTERMAN AND SCOTT A. CORNELL,

Respondents.

o-

On Petition For A Writ Of Ce: tiorari

To The United States Court Of Appeals

For The Third Circuit

——___——__--@-

BRIEF FOR RESPONDENT IN OPPOSITION

-——_—_—————_ 4 —_--——_— —

WALTER H. FLAMM, JR.

ROBERT J. KRANDEL

Counsel of Record

FLAMM WALTON PC

794 Penllyn Pike

Blue Bell, PA 19422

(267) 419-1500

rjkrandel@fiammlaw.com

Counsel for Respondents

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

1. Whether the Court of Appeals for the Third

Circuit correctly affirmed the District Court’s dismis-

sal of Petitioner’s complaint, which failed to allege

that Petitioner was terminated because she gave

information or testified, or was about to testify, in any

inquiry or proceeding relating to Section 510 of the

Employee Retirement Income Security Act (“ERISA”),

29 U.S.C. § 1140.

2. Whether a conclusory allegation, with no factual

support, that Petitioner “objected and/or complained

to” management about possible violations of ERISA is

a sufficient pleading stating a plausible claim for

relief under Section 510 of ERISA.

OBJECTION TO PETITIONER’S

QUESTION PRESENTED

In addition to Petitioner's question presented

to the Court, Respondents present the question of

whether Petitioner's Complaint is sufficient as a

matter of law when it fails to plead any facts that

Petitioner “objected and/or complained to” manage-

ment about possible violations of ERISA. Respon-

dents raised this issue in the District Court and

before the Court of Appeals for the Third Circuit.

11]

CORPORATE DISCLOSURE STATEMENT

Respondent A.H. Cornell and Son, Inc. is a family-

owned company. It is not owned by any parent corpo-

ration or any publicly-held company owning 10% or

more of Respondent A.H. Cornell and Son, Inc.'s

stock.

1V

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ...................000. eee. 1

OBJECTION TO PETITIONER’S QUESTION

IN Wiss ccs ca cs Snes tanen sien coewaaiee cana il

CORPORATE DISCLOSURE STATEMENT....... ill

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TAs OF BUTTE Lido onescccescensyscncovssnconcninss vi

Ree ME ecco chs beededa nendraauarenscsen SARA ies ee Na 1

PRR GR PIM BOD sins snecnectesansedcuneontvenceves 3

WRT TRU oasis nesses cndesesencnescderacces K

Course of Proceedings Below ........................... 3

Objections to Petitioner’s Statement of Facts..... 5

REASONS FOR DENYING THE PETITION ..... 6

A. A writ of certiorari is not warranted in

this case because there is no significant

dispute between the Circuit Courts of

Appeals which have analyzed the mean-

ing of Section 510 of ERISA .............0........ 6

1. The plain language of ERISA Section

510 supports a simple conclusion and

the Circuit Courts of Appeals that

have analyzed this language in detail

(the Second, Third, and Fourth) are

all in agreement about the meaning

OE Re cose stee cee ees 6

TABLE OF CONTENTS -— Continued

Page

2. Petitioner overstates the analysis by

the Fifth and the Ninth Circuit

Courts of Appeals of Section 510 be-

cause those Circuit Courts have only

analyzed Section 510 in the context of

whether that Section preempts state

law retaliation ClatM~s.......2....4.0000 21

B. Even if there is a true split between the

Circuits, this is a poor vehicle for analyz-

ing Section 510 given Petitioner’s skele-

tal allegations about unsolicited, internal

PU CRRIIIG 6. 0ssniisnsltexsccssstacesneeeoeeee 26

COR PUGE RFOIR REN cnn snieiccus sinnvsccenscieviccessenanee eee 29

APPENDIX

First Amended Civil Action Complaint.............. App. 1

v1

TABLE OF AUTHORITIES

Page

CASES

Anderson v. Electronic Data Systems, 11 F.3d

1311 (5th Cir. 1994).........00.0000 2, 21, 24, 25, 26

Ashcroft v. Iqbal, __ ~ U.S 129 S.Ct. 1937

i ccirercecnsitececsevcsoresevsecerecsssenenesssnsans 27, 28

Bell Atlantic Corp. v. Twombly, 550 U.S. 544

No cssanescenaseensesesenrercsevessonsdegeces 27

Cipollone v. Liggett Group, Inc., 505 U.S. 504

i scnennnenscnnctecannonatseccneesdacseeness 23

Consumer Product Safety Comm’n v. GTE

Sylvania, Inc., 447 U.S. 102 (1980).......0.0.0 2. 7

Corcoran v. United Healthcare, Inc., 965 F.2d

1321, (5th Cir.), cert. denied, 505 U.S. 1033

ee CS 25

Garcia v. United States, 469 U.S. 70 (1984) ..0000 00. 13

Good v. Altria Group, Inc., 501 F.3d 29 (1st Cir.

oe cceccankexpncnndcernecncateninncenssered 23

Hashimoto v. Bank of Hawaii, 999 F.2d 408

ois cctacnovesasnkwkienenccrseens passim

Idahoan Fresh v. Advantage Produce, Inc., 157

a I on cave nnn ewoeadoverssewnensnsnss 7

Ingersoll-Rand Company v. McClendon, 498

Tee ndacarciemswnsurinnwanaentnse 7

Kaiser Aluminum & Chemical Corp. v.

ree Wee 01.05. Ol (1900)............00020c0ccs.ceceresesnes 7

King v. Marriott Intern. Inc., 337 F.3d 421 (4th

Sn ET 9, 10, 11, 23

Vil

TABLE OF AUTHORITIES — Continued

Page

Mulford v. Altria Group, Inc., 506 F.Supp.2d

733 (D.N.M. 2007)....... cue erner ada tara taegE erase 23

Nicolaou v. Horizon Media, Inc., 402 F.3d 325

CE SA, PD ooicskcenicence edacoeeeaceae ype: Ree.

Price v. Phillip Morris, Inc., 219 Ill.2d 182, 848

Pee ee oC onc ec 23

Shaw v. Delta Air Lines, Inc., 463 U.S. 85

CEE ociiscsnseccnecresanour trretncvetes parte eam dee ee 14

TRW v. Andrews, 534 U.S. 19 (2001)................... i, is

STATUTES

Be Gr es Oe eek eas ee ee 17

BUS. tee a Scenic tere erate eaaceilaes 19

TP Tr ee eee 4

BO TU ee; Se OO oon ee 4

Tear Sy ear. aos as ceca eee 14,15

29 U.S.C. § 1105(a)(B) .ccecesecceccececseceseseesseeceses eeeees 14, 15

Be tae A os hose eee 14,15

BAB Xo Dt. RUIN Nee prnE Err EED 1, 6, 7, 14, 20

Fe EPs SP nance cece see 4

ee vk corecscenccg ee es oats 18

Be UF Fe, BF voiced sc scese v ocap nny sasctcnsecemmeenaee 11,15

0 59 NE ees 17

Vill

TABLE OF AUTHORITIES — Continued

Page

a) WE Cec nies as ae scission 16

eee cs oo ae oe 16

Haw. Rev. Stat. $ 378-61, ef 96@..........060.c00c.0+snecepecessees 21

MISCELLANEOUS

Black’s Law Dictionary, 9th Edition ..............00.c0cce0eeee 8

Webster’s Third New International Dictionary

SET CEB? vce ssviccserveesivesanes Seer eer aE RRSPT Te 12

STATEMENT

Petitioner does not state any compelling reasons

to support a writ of certiorari in this case. Petitioner

alleges that A.H. Cornell administered a group health

plan on a discriminatory basis, withheld group plan

information from employees, and enrolled non-

citizens in the health plan. Resp. App. 7-8. Petitioner

alleges that she “objected and/or complained to [Re-

spondents’] management” about Respondents’ con-

duct. Jd. Petitioner contends that these scarce facts

constitute protected activity under Section 510 of

ERISA, 29 U.S.C. § 1140.

No Circuit Courts of Appeals have held that

unsolicited, internal complaints constitute protected

activity under Section 510 of ERISA, 29 U.S.C.

§ 1140. All of the Courts of Appeals which have ana-

lyzed Section 510 of ERISA unanimously agree that a

complainant must do more than unilaterally voice

concerns to an employer. Section 510 contains a

specific requirement that the complainant “has given

information or has testified or is about to testify in

any inquiry or proceeding” 29 U.S.C. § 1140. These

cases are discussed at length, infra. Simply put,

Section 510 clearly means what it says. Section 510’s

use of the words “inquiry” and “proceeding” means

that the complaining employee must be engaged in an

interactive investigation process. The complaining

employee must voice concerns in response to a re-

quest, whether from the employer or an investigating

agency. Section 510 does not protect an employee for

2

unilaterally stating an opinion about possible ERISA

violations outside the confines of a formal process.

Further, there is no conflict between the Courts

of Appeals which have considered the issue. Petitioner

cites to two cases, Anderson v. Electronic Data Sys-

tems, 11 F.3d 1311 (5th Cir. 1994) and Hashimoto v.

Bank of Hawau, 999 F.2d 408 (9th Cir. 1993) and

argues that the holdings from these cases support a

conclusion that Section 510 protects unsolicited

internal complaints about ERISA violations. These

cases support no such conclusion. Both cases ad-

dressed only whether ERISA preempts analogous

state law whistleblower complaints. Neither case

examined whether the claimants in those cases had

any protection under Section 510 for unsolicited,

internal complaints. Given that both cases addressed

preemption, it would have been impossible and

illogical for either of the Courts of Appeals to make

any such pronouncement in those cases.

Finally, Petitioner’s complaint pleads absolutely

no facts about how she voiced her supposed concerns.

Not only is the complaint deficient as a matter of law,

but it leaves it impossible for this Court to make any

important pronouncement of federal law. The mystery

surrounding the facts of Petitioner’s important whistle-

blowing conduct creates a factual void. Granting a

writ of certiorari in this case would be unproductive

since subsequent litigants and Courts that address

Section 510 »»ould not be able to compare their facts

to this case. 1. sum, this is a poor vehicle for certio-

rari.

3

Accordingly, this Court should deny the petition

for a writ of certiorari.

STATEMENT OF FACTS

Factual Background

Respondent A.H. Cornell & Son, Inc. (“A.H.

Cornell”), is a family-owned construction company.

Pet. App. 2a. It provides commercial and residential

construction services such as paving, snow removal,

and recycling. Pet. App. 3a. A.H. Cornell hired Peti-

tioner in March, 2006, to establish a human resources

department. /d. A.H. Cornell had a group health plan

that was governed by ERISA. Petitioner alleges that

A.H. Cornell administered the group health plan on a

discriminatory basis, withheld group plan _infor-

mation from employees, and enrolled non-citizens in

the health plan. Jd. Petitioner alleges that she “ob-

jected and/or complained to [Respondents’] manage-

ment” about Respondents’ conduct. Jd. Petitioner

further claims that she was terminated for the “afore-

said inquiries, objections, opposition and/or com-

plaints about ERISA violations.” Id. No other

specifics about Petitioner’s protests are set forth in

her complaint. Resp. App. 7-8.

Course of Proceedings Below

On March 18, 2009, Petitioner filed a complaint

against Respondents A.H. Cornell, Scott A. Cornell,

4

and Melissa Closterman. /d. Scott Cornell is one of

the owners and President of A.H. Cornell; Melissa is

his sister, who is also employed by the Company.

Resp. App. 3. Petitioner initiated this action under

ERISA, 29 U.S.C. § 1001, et seq. Pet. App. 4a. On May

18, 2009, Respondents filed a motion to dismiss that

complaint because the complaint was insufficient as a

matter of law. Id.

On July 23, 2009, the District Court granted

Respondents’ Motion to Dismiss because Petitioner

failed to allege any conduct which would bring her

within the ambit of Section 510 of ERISA. /d. The

District Court declined to exercise supplemental

jurisdiction over Petitioner’s state law claim and

consequently dismissed the entire case. Id.

Petitioner appealed to the United States Court of

Appeals for the Third Circuit. The sole issue facing

the Court of Appeals was whether the District Court

erred in finding that “unsolicited internal complaints

are not protected activities under the anti-retaliation

provisions of Section 510 of ERISA... .” Pet. App. 5a.

The Court of Appeals analyzed (a) the plain language

of Section 510 of ERISA; (b) the decisions of the

Courts of Appeals for the Second, Fourth, Fifth, and

Ninth Circuits which discuss Section 510 of ERISA;

(c) the background of ERISA; and (d) analogous Third

Circuit precedent analyzing the whistleblower provi-

sions of Section 15(a)(3) of the Fair Labor Standards

Act (29 U.S.C. § 215(a)(3)) and Section 507(a) of the

Clean Water Act (33 U.S.C. § 1867(a)). Pet. App. 5a-

18a. The thorough analysis of the Third Circuit Court

5

of Appeals led to the conclusion that unsolicited

internal complaints are not protected under Section

510 of ERISA. Pet. App. 19a. The Court correctly

noted that there is no disagreement between the

Circuits on the substance of Section 510. Pet. App. 7a-

10a. The Court observed that while some Circuits like

the Fifth and the Ninth have dealt with cases involv-

ing Section 510, those cases were faced with the issue

of whether Section 510 preempted other claims, and

they did not involve a substantive analysis of the

issue raised in this case. The Court of Appeals noted

that the Circuits which have actually analyzed Sec-

tion 510’s language on a substantive basis, including

the Fourth and the Second Circuits, reached the

conclusion that Section 510’s plain language did not

protect unsolicited internal complaints. Pet. App. 10a-

lla.

Objections to Petitioner’s Statement of Facts

This matter comes before the Court on a Motion

to Dismiss pursuant to Federal Rule of Civil Proce-

dure 12(b)(6). Thus, while Respondents dispute the

accuracy of the minimal facts put forth by Petitioner,

for the purposes of this Appeal, Respondents assume

that they are true as pled in the Complaint.

*

6

REASONS FOR DENYING THE PETITION

A. A writ of certiorari is not warranted in

this case because there is no significant

dispute between the Circuit Courts of

Appeals which have analyzed the mean-

ing of Section 510 of ERISA.

1. The plain language of ERISA Section

510 supports a simple conclusion and

the Circuit Courts of Appeals that

have analyzed this language in detail

(the Second, Third, and Fourth) are

all in agreement about the meaning of

that language.

In relevant part, ERISA Section 510, entitled

“Interference with Protected Rights” provides that

[i]t shall be unlawful for any person to dis-

charge, fine, suspend, expel, discipline, or

discriminate against a participant or benefi-

ciary for exercising any right to which he is

entitled under the provisions of an employee

benefit plan [or] this subchapter ... or for

the purpose of interfering with the attain-

ment of any right to which such participant

may become entitled under the plan [or] this

subchapter. ... /t shall be unlawful for any

person to discharge, fine, suspend, expel, or

discriminate against any person because he

has given information or has testified or is

about to testify in any inquiry or proceeding

relating to this chapter. ...

29 U.S.C. § 1140 (emphasis added).

The prototypical Section 510 claim arises when a

termination is motivated by an employer’s desire to

prevent a petitioning employee’s pension from vest-

ing. Ingersoll-Rand Company v. McClendon, 498 U.S.

133, 143 (1990). This type of claim is often referred to

as an interference claim. Additionally, Section 510

provides a remedy for individuals discriminated

against because they have given information or

testified in an inquiry or proceeding related to

ERISA. E.g., Nicolaou v. Horizon Media, Inc., 402

F.3d 325 (2d Cir. 2005).

In her complaint, Petitioner does not allege that

she was terminated for attempting to exercise her

own rights under any ERISA-governed plan. See

generally, Resp. App. 3-8. Nor does she claim that she

was denied any benefits for which she was eligible.

Id. The only part of Section 510 that could conceiva-

bly apply to Petitioner is the sentence barring the

discharge of an employee for giving information or

testifying in an inquiry or proceeding.

By its terms, Section 510 requires that an indi-

vidual must have “given information” or “testified” (or

is about to testify) in “any inquiry or proceeding

relating to this chapter.” 29 U.S.C. § 1140. Absent a

clearly expressed legislative intention to the contrary,

ERISA’s statutory language must ordinarily be re-

garded as conclusive. Kaiser Aluminum & Chemical

Corp. v. Bonjorno, 494 U.S. 827, 835 (1990) (quoting

Consumer Product Safety Comm’n v. GTE Sylvania,

Inc., 447 U.S. 102, 108 (1980)); see also Idahoan Fresh

v. Advantage Produce, Inc., 157 F.3d 197, 202 (3d Cir.

8

1998) (“[w]here the statutory language is plain and

unambiguous, further inquiry is not required, except

in the extraordinary case where a literal reading of

the language produces an absurd result.”).

The Court of Appeals for the Third Circuit recog-

nized the plain and unambiguous meaning of Section

510. The Court considered the term, “inquiry” to

mean exactly what the term is commonly understood

to mean. As that Court observed, “inquiry” is most

easily defined as “(a] request for information,” based

on the definition of that word in Black’s Law Diction-

ary, 9th Edition. Pet. App. 12a. The Court rejected

Petitioner’s argument that the interrogative word

“Inquiry” could be twisted in some way to mean the

same as the declarative word, “statement.” Pet. App.

12a. The Court of Appeals recognized that the word

“inquiry” naturally encompassed only situations where

one party makes a request for information from

another party. Pet. App. 12a-13a.

The Court of Appeals for the Third Circuit also

performed the same analysis with the meaning of the

word “proceeding.” Again, the Court recognized that

“proceeding” is generally used in the English lan-

guage to describe a formal process ~— initiated either

through a lawsuit or an agency. Pet. App. 13a. To

confirm the meaning of this common and basic word,

the Court again turned to the same dictionary that

lawyers and judges have used for years. Pet. App.

13a. The Court did not have to make any great leaps

of logic, nor did it employ any kind of legal mysticism.

The meaning of the words “proceeding” and “inquiry”

9

can be found in everyday use, and are not arcane

relics from a dead langnage.

While recognizing that Petitioner and the Secre-

tary of Labor wanted these words to have broader

meaning in order to aid in the “liberal construction”

of ERISA, the Third Circuit Court of Appeals recog-

nized its Constitutional duty to stay within the

parameters of Congress’ choice of words. Pet. App.

14a. The Court did not ignore the recognized intent of

ERISA to protect plan participants and, in fact,

acknowledged ERISA’s intent. Pet. App. 14a. However,

the Court also recognized that. Congress’ choice of

words left absolutely no uncertainty about Congress’

intent. Pet. App. 14a. Had Congress intended Section

510 to encompass unsolicited, internal “statements”

to management, Congress would have used appropri-

ate words to manifest this desire. Pet. App. 14a-15.

Because Congress left no ambiguity in its choice of

words, the Court took Congress at its word (or choice

of words in this case). Pet. App. 14a-15a.

By giving these words their usual and customary

meaning, the Court of Appeals for the Third Circuit

agreed with the holdings of the Courts of Appeals for

the Fourth and Second Circuits. These two appellate

courts are the only other Circuit Courts of Appeals to

have analyzed the meaning of Section 510’s anti-

retaliation provision. In King v. Marrvott Intern. Inc.,

337 F.3d 421, 428 (4th Cir. 2003), the Court of Ap-

peals for the Fourth Circuit held that purely intra-

company complaints did not bring a plaintiff within

the ambit of Section 510 because such complaints did

10

not involve an official proceeding. Jd. at 427-28. In

King, the employee had worked in Marriott’s benefits

department for many years when she learned of

Marriott’s intent to transfer millions of dollars from

its medical plan into its general corporate reserve. /d.

at 423. King believed the transfer violated ERISA and

expressed her concerns to co-workers, her supervisor

(verbally and in writing) and to in-house attorneys.

Id. She even went so far as to request an opinion

letter from one of the in-house attorneys. /d.

Analyzing the facts of King in the context of

Section 510, the Court of Appeals for the Fourth

Circuit explained that the use of the word “testify”

suggests that “inquiry or proceeding” requires some-

thing more than complaints to a supervisor. Id. at

427. The phrase “given information” is merely to

protect a person’s providing of non-testimonial infor-

mation, but still in the context of an inquiry or pro-

ceeding. Id. at 427.

Like the Court of Appeals for the Third Circuit,

the Fourth Circuit Court of Appeals reached this

conclusion by looking at the plain meaning of the

words contained in Section 510. Further, the Court of

Appeals for the Fourth Circuit compared Section

510’s language to other anti-retaliation provisions to

highlight the dramatic difference between Congress’

use of the words “inquiry” and “proceeding” in Section

510 as opposed to the anti-retaliation provisions in

other statutes. As correctly recognized by the Fourth

Circuit, the anti-retaliation provision in Section 510

is much narrower than the equivalent anti-retaliation

1]

provision in Title VII. /d. at 427. Title VII broadly

protects employees that have “opposed any practice

made an unlawful employment practice by [Title

VIII.” 42 U.S.C. § 2000e-3(a). The Courts of Appeals

for the Third and Fourth Circuits considered it signif-

icant that Congress would choose a much narrower

wording for Section 510’s anti-retaliation provision.

Both Circuits easily reasoned that Congress did not

wish to protect employees that simply stated their

opinions about possible ERISA violations without

being prompted by some form of formal inquiry or

proceeding.

The Court of Appeals for the Second Circuit

performed a similar analysis of the word, “inquiry.”

Nicolaou v. Horizon Media, Inc., 402 F.3d 325, 330 (2d

Cir. 2005). In that case, Chrystina Nicolaou worked

as director of human resources and served as the

fiduciary of Horizon’s 401K plan. When Nicolaou

discovered that the plan was underfunded, she im-

mediately raised her concerns to the CFO, and on two

later occasions with the Controller, neither of whom

took any action in response. /d. at 326. Nicolaou then

contacted the company’s attorney. Subsequently, the

company’s attorney and Nicolaou bought the issue to

the Company’s president. /d.

The Court of Appeals for the Second Circuit.

analyzed whether these facts would qualify as an

“inquiry” within the meaning of Section 510. /d. at

330. That Court, like the Courts of Appeals for the

Third and Fourth Circuits, observed that the term,

12

“inquiry” as used in Section 510 of ERISA, contem-

plated some predicate request by another party. Jd. at

329. The Second Circuit observed that the customary

usage of the word “inquiry” is “the act or an instance

of seeking truth, information, or knowledge about

something” or “a request for information.” Jd. quoting,

Webster’s Third New International Dictionary 1167

(1993). This led the Court to conclude that,

“(cJertainly if Nicoiaou can demonstrate that she was

contacted to meet with [the President] in order to give

information about the alleged underfunding of the

Plan, her actions would fall within the protection of

Section 510.” Id. at 330. The Court noted that in

Nicolaou’s case, the meeting was initiated at the

attorney's behest, therefore satisfying the plain

language of Section 510’s use of the term, “inquiry.”

Id.

Similar to the Courts of Appeals for the Third

and Fourth Circuits, the Second Circuit also did not

consider Congress’ use of the terms, “inquiry” and

“proceeding” to be superfluous. Jd. citing, TRW v.

Andrews, 534 U.S. 19, 31 (2001). The Court of Ap-

peals for the Second Circuit considered it important

that Congress inserted the term, “inquiry” into Sec-

tion 510, but that term did not appear in the anti-

retaliation provisions of the Fair Labor Standards

Act. Id. at 329. Rather than overlook this important

term as Petitioner would, the Second Circuit consid-

ered Congress’ use of the term, “inquiry” in conjunction

with the word, “proceeding” a strong indication to

“ac ,”

vive the nouns the separate, normal meanings. . . .

13

Id. citing, Garcia v. United States, 469 U.S. 70, 73

(1984).

Based on the foregoing, there is no doubt that the

Circuit Courts of Appeals which have analyzed the

language of Section 510 have concluded that the

customary definitions of the terms, “inquiry” and

“proceeding” require something more than unsolicited,

internal grievances in order to be protected under

ERISA. The Courts of Appeals for the Fourth, Second,

and now the Third Circuit simply looked at Congress’

choice of words and applied those words. These

Circuit Courts did not engage in unnecessary analy-

sis or speculation over the meaning of the words

because they are everyday words. Moreover, the

Court of Appeals for the Third Circuit specifically

gave consideration to ERISA’s intent to protect em-

ployee benefit plans and whistleblowers, but noted

that Congress’ choice of words left virtually no room

for doubt as to what Congress intended.

Here, the Petitioner desperately strives to urge

interpretations that go beyond the meaning of the

words Congress used in order to make the statute

seem more reasonable and protective. As a result, she

substitutes her judgment and reasoning for that of

Congress. Even assuming arguendo that Petitioner

has a noble and righteous view of how Section 510

should work, ERISA is a highly complex statute that

is part of an intricate body of law. ERISA “imposes

participation, funding, and vesting requirements” on

pension plans, and sets uniform standards for “re-

porting, disclosure, and fiduciary responsibility” for

14

pension plans and employee benefit plans. Shaw ov.

Delta Atr Lines, Inc. , 463 U.S. 85, 90 (1983). Fiduciaries

have an obligation under ERISA to monitor plan

compliance, investigate possible violations, and take

remedial action. 29 U.S.C. §§ 1104(a)(L), 1105(a)(3),

1109(a). Even experienced labor attorneys and ac-

countants struggle to understand these requirements.

As a result, it makes perfect sense that Congress did

not want to make individual employees, acting by

themselves, the enforcement arm of such a complex

statutory scheme. Giving special attention to every

employee’s personal interpretation of ERISA without

help from others would lead to a plethora of suits for

“enforcement of ERISA rights.” Without some sort of

formal investigation or proceeding by a plan fiduciary,

a controller, or the Labor Department to determine

the merits of the complainant’s statement, this would

make virtually every employee a purported expert on

plan requirements at the complaint’s outset. Given

the complexities of ERISA it therefore makes perfect

sense that Congress sought to limit ERISA’s whistle-

blower protection to more formal instances where the

employee has “testified or is about to testify in any

inquiry or proceeding.” 29 U.S.C. § 1140.

Petitioner also relies heavily on the argument

that Section 510 must protect unsolicited internal

complaints because a narrow interpretation would

permit and encourage retaliatory terminations and

discourage employees from reporting ERISA viola-

tions. Pet. Br. pp. 23-25. This argument works both

ways because inquires and investigations are two-way

15

streets. Section 510’s use of the words “inquiry” and

“proceeding” shows that Cungress envisioned situa-

tions whereby more than one party is at the table. In

other words, Congress was not just thinking about

complaining employees, but also the employer or plan

fiduciaries. As stated, supra, fiduciaries have an

obligation under ERISA to monitor plan compliance,

investigate possible violations, and take remedial

action. 29 U.S.C. §§ 1104(a)(1), 1105(a)(3), 1109(a).

While Petitioner speculates that unscrupulous em-

ployers might short-circuit the investigation process

by silencing complaints, equally unscrupulous em-

ployees might also cut off a fiduciary’s investigation if

every unsolicited gripe was protected. An employee

could thwart the investigation process by filing a

claim asserting whistleblower protection for simply

raising a grievance. The employee would then have

an incentive to refuse to participate in the investiga-

tion. Congress’ use of the words, “inquiry” and “pro-

ceeding” manifests a desire for an employer to utilize

investigations to determine potential ERISA viola-

tions. Had Congress intended to give only one party

to that investigation protection, it would have used a

phrase similar to what appears in Title VII — protect-

ing only the employee who “opposes” discrimination,

not the employer. 42 U.S.C. § 2000e-3(a). Petitioner's

idea that Section 510 is designed to protect only

employees at the expense of employers and plan

fiduciaries is consequently without any merit.

further, Congress is the only authority on draft-

ing the complex body of anti-retaliation provisions.

16

This is not Congress’ first anti-retaliation provision.

Whistleblower provisions are not new legal concepts.

Congress has drafted anti-retaliation provisions for

over 40 years. Anti-retaliation provisions are often

part of a more comprehensive and complex piece of

legislation. Some brief examples of the many anti-

retaliation provisions which Congress inserted into

legislation over the years include:

The Clean Air Act, 42 U.S.C. § 7622, grant-

ing protection to an employee that has:

(1) commenced, caused to be com-

menced, or is about to commence or

cause to be commenced a proceeding un-

der this chapter or a proceeding for the

administration or enforcement of any

requirement imposed under this chapter

or under any applicable implementation

plan,

(2) testified or is about to testify in any

such proceeding, or

(3) assisted or participated or is about

to assist or participate in any manner in

such a proceeding or in any other action

to carry out the purposes of this Act.

The Comprehensive Environmental Re-

sponse, Compensation and Liability Act of

1980, 42 U.S.C. § 9610, which protects an

employee that:

has provided information to a State or to

the Federal Government, filed, instituted,

or caused to be filed or instituted any

17

proceeding under this chapter, or has

testified or is about to testify in any pro-

ceeding resulting from the administra-

tion or enforcement of the provisions of

this chapter.

¢ The Consumer Product Safety Improvement

Act of 2008, 15 U.S.C. § 219, which prevents

an employer from taking action against an

employee because the employee:

(1) provided, caused to be provided, or

is about to provide or cause to be provid-

ed to the employer, the Federal Govern-

ment, or the attorney general of a State

information relating to any violation of,

or any act or omission the employee rea-

sonably believes to be a violation of any

provision of this Act or any other Act en-

forced by the Commission, or any order,

rule, regulation, standard, or ban under

any such Acts;

(2) testified or is about to testify in a

proceeding concerning such violation.

e The Energy Reorganization Act, 42 U.S.C.

§ 5851, protecting an employee that has:

(A) notified his employer of an alleged

violation of this chapter or the Atomic

Energy Act of 1954 (42 U.S.C. § 2011, et

seq.);

(B) refused to engage in any practice

made unlawful by this chapter or the

Atomic Energy Act of 1954, if the

18

employee has identified the alleged ille-

gality to the employer;

(C) testified before Congress or at any

Federal or State proceeding regarding

any provision (or proposed provision) of

this chapter or the Atomic Energy Act of

1954;

(D) commenced, caused to be com-

menced, or is about to commence or

cause to be commenced a proceeding un-

der this chapter or the Atomic Energy

Act of 1954, as amended, or a proceeding

for the administration or enforcement of

any requirement imposed under this

chapter or the Atomic Energy Act of 1954,

as amended;

(E) testified or is about to testify in any

such proceeding or;

(F) assisted or participated or is about

to assist or participate in any manner in

such a proceeding or in any other man-

ner in such a proceeding or in any other

action to carry out the purposes of this

chapter or the Atomic Energy Act of

1954, as amended.

¢ The Safe Water Drinking Act, 42 U.S.C.

§ 300j-9, which protects an employee that

has:

(A) commenced, caused to be com-

menced, or is about to commence or

cause to be commenced a proceeding un-

der this subchapter or a proceeding for

19

the administration or enforcement of

drinking water reguiations or under-

ground injection control programs of a

State,

(B) testified or is about to testify in any

such proceeding, or

(C) assisted or participated or is about

to assist or participate in any manner in

such a proceeding or in any other action

to carry out the purposes of this sub-

chapter.

¢ The Toxic Substances Control Act, 15 U.S.C.

§ 2622, preventing an employer from retali-

ating against an employee that has:

(1) commenced, caused to be com-

menced, or is about to commence or

cause to be commenced a proceeding un-

der this chapter;

(2) testified or is about to testify in any

such proceeding; or

(3) assisted or participated or is about

to assist or participate in any manner in

such a proceeding or in any other action

to carry out the purposes of this chapter.

With each of these aforementioned Acts, we must

presume that Congress made careful and deliberate

considerations about how these anti-retaliation

provisions fit within the broader purpose of each of

these Acts. Not all of these Acts give blanket protection

to every internal grievance or voluntary complaint to

20

an employer. Some are broad while others are narrow.

As with Section 510 of ERISA, Congress selected

certain words in each of these statutes. For the

Petitioner to assume that she is a better legislator

than Congress ignores the long history and vast

experience of Congress in implementing anti-

retaliation provisions to further specific legislative

goals. Even if Petitioner’s desired statutory protection

makes sense — even more sense than that chosen by

Congress — only Congress, and not the courts or

individual! plaintiffs, formulate the law. Clearly, when

Congress intends to protect unsolicited, internal

complaints to further a piece of legislation, Congress

knows what language to use. Given the many exam-

ples of anti-retaliation provisions in other statutes,

Congress has many models to choose from.

As a result, the plain language of ERISA Section

510 can only be read to protect whistleblowers who

have given information or have testified or are about

to testify in any inquiry or proceeding. 29 U.S.C.

§ 1140. ERISA Section 510 cannot be read to protect

an employee who submits a unilateral, unsolicited

complaint or “opposes” an unlawful practice.

21

2. Petitioner overstates the analysis by

the Fifth and the Ninth Circuit Courts

of Appeals of Section 510 because

those Circuit Courts have only ana-

lyzed Section 510 in the context of

whether that Section preempts state

law retaliation clairns.

Petitioner argues that there is a split among the

Circuits over the meaning of Section 510. She cites

only two cases, and those cases have no real in-depth

explication of Section 510, but rather have treated it

only in a cursory manner: Anderson v. Electronic

Data Systems, 11 F.3d 1311, 1314 (5th Cir. 1994) and

Hashimoto v. Bank of Hawaii, 999 F.2d 408, 411 (9th

Cir. 1993). Petitioner greatly overstates the holdings

of these cases. Contrary to what Petitioner contends,

the holdings of Anderson and Hashimoto do not

present an analytical divide because neither the

Anderson Court nor the Hashimoto Court addressed

the meaning of Section 510’s language in question

here.

In 1993, the Ninth Circuit Court of Appeals

addressed whether Section 510 of ERISA preempted

plaintiff Jessica Hashimoto’s claims of retaliation in

violetion of Hawaii’s Whistle Blower’s Protection Act

(Haw. Rev. Stat. §§ 378-61, et seq.). Hashimoto v.

Bank of Hawaii, 999 F.2d 408, 409 (9th Cir. 1993). In

that case, Hashimoto claimed that she complained to

two employees about an improper reimbursement

from a profit-sharing plan and an improper benefit

calculation. Jd. Hashimoto alleged that several times

22

over an 18-month period she complained about these

actions, which she considered to be potential or actual

ERISA violations. /d. Hashimoto contended that she

would not have been fired “but for” her complaints.

Id.

The Court of Appeals for the Ninth Circuit sur-

veyed the state of the law. Contrary to Petitioner’s

contention, the body of law that the Court addressed

was not ERISA, but preemption. /d. at 411. The Court

simply concluded that because ERISA contained the

anti-retaliation provision set forth in Section 510,

Hashimoto’s claims under Hawaii’s Whistle Blower’s

Protection Act were totally preempted. /d. at 411-12.

Importantly, the Ninth Circuit did not examine

whether Hashimoto's facts set forth a plausible claim

for relief under Section 510 — only the extent of

whether Section 510 preempted a state whistleblower

cause of action. Jd. The Court specifically avoided the

analysis of the words, “inquiry,” and “proceeding,” to

conclude in a perfunctory fashion that Section 510

was “meant to protect whistleblowers.” Jd. All that it

did was determine whether a claim of the nature of

Hashimoto’s was contemplated by Section 510; it

specifically did not determine whether her particular

facts stated a claim under Section 510. The Ninth

Circuit Court of Appeals most likely decided not to

focus much attention on the actual language of Sec-

tion 510, because that issue was not before the Court.

The only issue before the Court was whether ERISA’s

Section 510 preempted an identical state law claim.

Alternatively, as the Court of Appeals for the Fourth

Circuit observed, the dicta in the Ninth Circuit’s

decision about Section 5i6 could be resuits driven.

King, 337 F.3d at 428 fn 4. In fact, when reading the

Hashimoto decision, the Ninth Circuit’s holding that

Section 510 was simply, “meant to protect whistle-

blowers” 1s a truism that bears little weight.

The fact that Section 510 was designed to protect

whistleblowers and preempted a similar state law is a

long way from finding that Hashimoto herself was a

whistleblower. The fact that a claim is preempted by

federal law does not mean that the claim is a valid

one; it merely means that federal law regulates the

area of rights and remedies. E.g., Good v. Altria

Group, Inc., 501 F.3d 29, 46 (1st Cir. 2007) (explain-

ing that Courts do not examine the underlying merits

of a plaintiff’s claim in a preemption analysis) citing

Cipollone v. Liggett Group, Inc., 505 U.S. 504, 524

(1992); Price v. Phillip Morris, Inc., 219 Tll.2d 182,

848 N.E.2d 1, 36-37 (2005); Mulford v. Altria Group,

Inc., 506 FSupp.2d 733, 751-52 (D.N.M. 2007)

(“Courts do not determine whether a plaintiff can

succeed on the merits of the fraud claim before

determining whether the fraud claim itself is

preempted.”). By way of analogy, if federal speeding

laws preempted state speeding laws and the issue in

Hashimoto involved speeding, Hashimoto's case was

preempted because it dealt with speeding. The fact

that the case is subject to preemption does not an-

swer the question of whether Hashimoto was in fact

speeding. In Hashimoto, the question of whether an

accusation of retaliation for reporting an ERISA claim

24

was preempted by federal law does not answer the

substantive question of whether Petitioner Edwards’

particular conduct was protected by ERISA Section

910. In Hashimoto, the Court of Appeals for the Ninth

Circuit analyzed Section 510 only far enough to

determine whether Hashimoto's claim was the sort of

claim that the statute addressed; not whether she

stated a substantive claim upon which relief might be

pranted. Hashimoto, 999 F.2d at 411-12. Therefore,

when compared against the Courts of Appeals for the

Second, Third, and Fourth Circuits’ detailed analysis

of Section 510’s language, the Ninth Circuit’s conclu-

sion in Hashimoto bears little weight.

In 1994 the Court of Appeals for the Fifth Circuit

examined Section 510 to determine whether ERISA

preempted a state wrongful discharge claim. Ander-

son v. Electronic Data Systems, 11 F.3d 1311, 1314

(Sth Cir. 1994). In that case, plaintiff George Ray

mond Anderson claimed that he was terminated for

refusing to commit ERISA violations and for report-

ing potential ERISA violations to management. /d. at

1313. Anderson filed a claim for wrongful discharge

pursuant to Texas state law, not pursuant to Section

510 of ERISA. Jd. Defendant removed the claim to

Federal District Court. /d. After the District Court

dismissed Anderson’s claim, Anderson appealed and

asserted that the District Court lacked jurisdiction

over his state law wrongful discharge claim. /d. The

Fifth Circuit analyzed “whether the claims asserted

by Anderson are preempted by ERISA.” /d. After an

extensive review of this Court’s precedent, the Fifth

Circuit held that Anderson’s wrongful discharge claim

vas preempted by ERISA. /d. at 1314.

As with the Ninth Circuit’s Hashimoto decision,

the Court of Appeals for the Fifth Circuit did not

analyze the substantive language of Section 510 to

determine if Anderson had presented a viable claim.

/d. The Court did not address the facts of Anderson’s

claim. It did not hold that Anderson had shown that

his complaints were in response to an “inquiry” as

part of some “proceeding.” In fact, the Fifth Circuit

Court of Appeals specifically noted that its holding

“does not hinge on whether ERISA provides the

remedy the plaintiff seeks or any remedy at all for the

alleged wrong.” Id. In a footnote, the Court cited to

Corcoran v. United Healthcare, Inc., 965 F.2d 1321,

1333 (5th Cir. ), cert. dented, 505 U.S. 1033 (1992)

and explained that the lack of an ERISA remedy does

not affect a preemption analysis. /d. at fn 4. Clearly,

the Court’s holding in Anderson deliberately avoided

any analysis of whether unsolicited complaints are

covered by Section 510 of ERISA and instead focused

only on whether ERISA preempted a state law wrong

ful discharge claim.

Petitioner erroneously considers both Hashimoto

and Anderson to stand for the proposition that Sec

tion 510 of ERISA protects unsolicited internal com-

plaints. Pet. pp. 8-10. As shown, supra, there is no

basis for this conclusion. The cases provide no sub-

stantive analysis of Section 510. Petitioner avoids the

actual holdings of both Hashimoto and Anderson with

respect to the preemption issues and cites to these

26

cases as proof of a “longstanding and growing circuit

conflict,” that will produce inconsistent results and

forum shopping. Pet. pp. 14, 17. Yet neither of these

cases are evidence of a Circuit split because only the

Courts of Appeals for the Second, Third, and Fourth

Circuits have actually addressed the substance of

Section 510. Hashimoto and Anderson provide no

basis for Petitioner’s conclusion that the Ninth and

Fifth Circuits are split from the Second, Third and

Fourth Circuits. Indeed, the holdings from Hashimoto

and Anderson only go to preemption, not Section 510’s

substance.

Accordingly, there is no split between the Cir-

cuits. The only Circuits to have addressed the scope

of Section 510 are all in agreement. The holdings of

the Ninth and the Fifth Circuits in Hashimoto and

Anderson respectively, do not show a pervasive con-

flict between the Circuits.

b. Even if there is a true split between the

Circuits, this is a poor vehicle for ana-

lyzing Section 510 given Petitioner’s

skeletal allegations about unsolicited,

internal grievances.

A proper petition for certiorari should address

issues of important fact or critical concerns. However,

this case would not allow the Court to consider what

type of activity constitutes protected activity under

ERISA’s anti-retaliation provision. Petitioner has

barely alleged any facts about her protected conduct

21

for this Court to consider. Consequently, any decision

by this Court on the issue would be limited to such

nebulous and theoretical facts that this is not an ideal

case for examining the scope of ERISA Section 510’s

language.

Petitioner vaguely claims in her Complaint that

she objected to and/or complained to Respondent’s

management about violations of ERISA, including

but not limited to, the discriminatory basis in which

Respondents were awarding ERISA benefits and

Respondents’ action of permitting non-qualifying

ERISA applicants to participate in Respondent’s

group health plan. Resp. App. 7-8. Petitioner also

claims that she objected to and/or complained to

Respondents’ management and owners about inten-

tionally misleading employees about group health

plan information. Resp. App. 8. These are literally the

extent of the facts set forth in Petitioner's complaint

about Petitioner’s protected activity. Resp. App. 7-8.

This kind of pleading ts simply a formulaic

recitation of legal elements that does not meet the

basic fact-pleading standard set forth by this Court.

In Bell Atlantic Corp. v. Twombly, 550 U.S. 544

(2007), this Court held that a pleading which con-

tained only “labels and conclusions” or a “formulaic

recitation of the elements of a cause of action will not

do.” Twombly, 550 U.S. at 555. Subsequently, this

Court extended the reach of Twombly, instructing

that all civil complaints must contain “more than

an unadorned, the-defendant-unlawfully-harmed-me

accusation.” Ashcroft v. Iqbal, ~ U.S. ___, 129 S.Ct.

28

1937, 1949 (2009). Legal conclusions can provide the

framework of a complaint, but they must be supported

by factual allegations. Igbal, 129 S.Ct. at 1950. In

analyzing the sufficiency of any complaint, a District

Court must first separate the facts from the legal

conclusions and then determine whether the facts

alleged in the complaint are sufficient to show that

the plaintiff has a “plausible claim for relief.” /d.

1949-50. This “plausibility” determination will be a

“context-specific task that requires the reviewing

court to draw on its judicial experience and common

sense.” Id.

Using Iqbal as a guide, Petitioner’s Complaint

contains such a paucity of facts that not only is the

pleading insufficient as a matter of law; it is entirely

deficient for purposes of a writ of certiorari. Petitioner

did not allege when she voiced her concerns or to

whom. Petitioner has not provided the “who, what,

where, and when,” surrounding her complaints, let

alone give this Court something substantive to con-

sider in regards to certiorari. Did Petitioner leave a

note on a desk? Did Petitioner ask for a meeting?

Did Petitioner voice her concerns in an email or text

message? Did Petitioner leave a voice mail message

with Respondent Scott Cornell? Did the Petitioner

have a passing conversation about her concerns at an

office birthday party? Such omissions are telling,

especially in light of the fact that Petitioner did not

hesitate to name names when identifying Melissa

Closterman and Scott Cornell as individua! defendants

29

for their participation in communicating the fact of

her termination. Resp. App. 3.

If this Court were to grant a writ of certiorari,

there would be nothing for the Court or future liti-

gants to consider. The Court would be issuing a

decision with potentially broad implications, but with

absolutely no facts for future guidance. Certainly, if

Section 510’s language needs clarification from this

Court, even a case with a few bare facts about how

the Petitioner complained about ERISA violations

would be better than the instant case. Accordingly,

the Court should deny the petition for a writ of certio-

rari.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted,

WALTER H. FLAMM, JR.

ROBERT J. KRANDEL

Counsel of Record

FLAMM WALTON PC

794 Penllyn Pike

Blue Bell, PA 19422

(267) 419-1500

rjkrandel@flammlaw.com

Counsel for Respondents

App. l

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRiCT

OF PENNSYLVANIA

SHIRLEY EDWARDS

3100 Knights Way

Doylestown, PA 18902

Plaintiff,

Vv.

A.H. CORNELL AND

SON, INC., d/b/a

AH CORNELLS | CIVIL ACTION

2362 York Road | No. 09-1184

eae

— PA 18929 JURY TRIAL

DEMANDED

MELISSA J. CLOSTERMAN

2362 York Road

Jamison, PA 18929

and

SCOTT A. CORNELL

2362 York Road

Jamison, PA 18929

Defendants.

FIRST AMENDED CIVIL ACTION COMPLAINT

Plaintiff Shirley Edwards (hereinafter referred to

as “Plaintiff” unless otherwise indicated) hereby com-

plains as follows against Defendants:

App. 2

INTRODUCTION

1. Plaintiff has initiated this action to redress

violations by Defendants of the Employee Retirement

Income Security Act (“ERISA”) and various state

laws. As a result of Defendants’ unlawful actions,

Plaintiff suffered the damages set forth herein.

2. This Court, in accordance with 28 U.S.C.

1331, has jurisdiction over Plaintiff’s claims, which

assert violations of ERISA, as set forth herein, because

this civil action arises under a law of the United

States. This Court has supplemental jurisdiction over

Plaintiff’s state-law claims because they arise of the

same nucleus of operative facts as those set forth in

Plaintiff’s federal claims.

3. This Court may properly maintain personal

jurisdiction over Defendants because Defendants’

contacts with this state and this judicial district are

sufficient for the exercise of jurisdiction over Defen-

dants to comply with traditional notions of fair play

and substantial justice, satisfying the standard set

forth by the United States Supreme Court in /nterna-

tional Shoe Co. v. Washington, 326 U.S. 310 (1945)

and its progeny.

4. Pursuant to 28 U.S.C. § 1391(b)(1) and (b)(2),

venue is properly laid in this district because all of

the acts and/or omissions giving rise to the claims set

forth herein occurred in this judicial district and

App. 3

Defendants are deemed to reside where they are

subject to personal! jurisdiction, rendering Defendants

residents of the Eastern District of Pennsylvania.

PARTIES

5. The foregoing paragraphs are incorporated

herein in their entirety as if set forth in full.

6. Plaintiff is an adult individual, with an

address as set forth in the caption.

7. Defendant A.H. Cornell and Son, Inc. (here-

inafter “Defendant AHC”), upon information and

belief, is a Pennsylvania entity that engages in the

business of performing contracting and construction

services, such as excavation, paving, snow removal,

recycling, and other commercial and residential

construction projects.

8. Defendant Melissa J. Closterman (herein-

after “Defendant Closterman”) manages and/or over-

sees daily operations within Defendant AHC, and all

times relevant herein, directed Plaintiff in her em-

ployment and was directly responsible for terminat-

ing Plaintiff.

9. Defendant Scott A. Cornell (hereinafter “De-

fendant Cornell”) is an executive of Defendant AHC

and was responsible for overseeing the terms and

conditions of Plaintiff’s employment, and he partici-

pated in the termination of Plaintiff’s employment.

App. 4

10. At all times relevant herein, Defendants

acted by and through their agents, servants and

employees, all of whom acted at all times relevant

herein in the course and scope of their employment

with and for Defendants.

FACTUAL BACKGROUND

11. The foregoing paragraphs are incorporated

herein in their entirety as if set forth in full.

12. Defendant AHC is a company that consists

of approximately 55-65 employees.

13. Plaintiff was hired in or about March of

2006.

14. Before hiring Plaintiff, Defendants did not

have any full-time dedicated human resources per-

sonnel.

15. Defendants hired Plaintiff to establish a

human resources department.

16. Plaintiff had a very significant human

resources background and worked for Defendants for

approximately 3 years until in or about February 11,

2009.

17. During Plaintiff’s tenure with Defendants,

she learned that Defendant Closterman was engag-

ing in unlawful acts, and Defendant Closterman

requested that Plaintiff participate in acts that were

unlawful during Plaintiff’s employment with De-

fendants.

App. 5

18. In the last several weeks of her em-

ployment, Plaintiff iearned that Defendants were

committing fraud upon their worker’s compensation

insurance carrier and their disability insurance

carrier.

19. For example, Plaintiff learned that an

employee actually returned to work with Defendants

after sustaining a work-related injury; that while

the employee was working, he was still collecting

worker’s compensation insurance for being out of

work; and that this employee had used a false social

security number and information to obtain worker’s

compensation insurance in the first place.

20. Plaintiff was specifically directed by De-

fendant Closterman to make false statements to

Defendants’ worker’s compensation carrier and to

give incorrect and false information about the partic-

ular employee who was working while collecting

benefits and who was also using a false social security

number.

21. Plaintiff was also directed in the last sev-

eral weeks of her employment by Defendant

Closterman to provide false information to a disabil-

ity insurance carrier for Defendants, including but

not limited to, providing the disability insurance

carrier with a false name for the disability insurance

applicant then residing in Mexico (who, upon infor-

mation and belief, was not a properly documented

non-citizen employee of Defendants).

App. 6

22. Plaintiff objected to committing criminal

fraud upon two (2) separate insurance carriers of

Defendant within the 2 weeks before she was termi-

nated from Defendants.

23. Defendants also had a group health insur-

ance plan, governed by ERISA, which Plaintiff

learned was being administered illegally within

Defendant and on a discriminatory basis.

24. Defendants were obligated to offer em-

ployees the benefits of its group health plan equally

and on a non-discriminatory basis.

25. Plaintiff learned however that many em-

ployees were being lied to about what their actual

contributions weuld be by Defendant Closterman in

an effort to dissuade employees from opting into the

benefits and that certain employees were not even

being offered health benefits at all — all in violation of

ERISA-qualifying group health plan requirements.

26. Defendants, through Defendant Closterman,

were also withholding and concealing required group

plan information from employees of Defendants.

27. Not only was Defendant Closterman unlaw-

fully discriminating against applicants in a group

health plan and making intentional misrepresenta-

tions to employees and applicants of Defendants,

Defendant Closterman was also unlawfully enrolling

non-citizens in the ERISA-qualifying life, disability

and/or group health plan.

App. 7

28. To accomplish Defendants’ unlawful objec-

tives of enrolling non-citizens falsely in Defendants’

ERISA health plan, Defendants terminated their

representation of an insurance broker and _ hired

someone whom Defendants’ knew personally, who in

turn, upon information and belief, enrolled non-

citizens through false and unlawful pretenses.

29. Plaintiff objected to participating in a

scheme to commit criminal fraud as to Defendants’

disability insurance carrier, worker’s compensation

insurance carrier, and health insurance carrier.

30. The fraud that Plaintiff was directed to

commit and/or to participate in as set forth herein all

occurred in close proximity to Plaintiff’s termination.

31. Plaintiff also learned of many other unlaw-

ful activities within Defendant, which were knowing

and intentional, all of which will demonstrate that

Defendant’s actions herein were willful and outra-

geous.

Count I

Violations of ERISA - Section 510,

29 U.S.C. § 1140

(Retaliation)

- Against All Defendants -

32. The foregoing paragraphs are incorporated

herein in their entirety as if set forth in full.

33. Plaintiff objected to and/or complained to

Defendants’ management about violations of ERISA,

App. 8

including but not limited to, the discriminatory basis

in which Defendants were awarding ERISA benefits

and Defendants’ actions of permitting non-qualifying

ERISA applicants to participate in Defendants group

health plan.

34. At the time of Plaintiff’s termination, she

was enrolled in Defendants’ group life insurance and

disability insurance plans, and therefore received

benefits and/or might have become eligible to receive

benefits under these plans.

35. In addition, at the time of her termination,

Plaintiff was eligible to enroll in Defendant’s group

health insurance plan, and thus may have become

eligible to receive benefits under this plan.

36. Defendants’ group health insurance plan,

life insurance plan, and disability insurance plan are

governed by ERISA.

37. Plaintiff is therefore a “participant” under

ERISA pursuant to 29 U.S.C. § 1002(7).

38. Plaintiff also objected to and/or complained

to Defendants’ management and owners about inten-

tionally misleading employees about group health

plan information.

39. Upon information and belief, a motivating

factor in Plaintiff’s termination was her aforesaid

inguires objections, opposition, and/or complaints

about ERISA violations.

App. 9

40. Plaintiff’s termination for engaging in

protected activity therefore constitutes a violation of

ERISA, Section 510.

Count IT

Common-Law Wrongful Discharge

(Against Defendant AHC Only)

41. The foregoing paragraphs are incorporated

herein in their entirety as if set forth in full.

42. Plaintiff was terminated for failing to com-

mit criminal acts, including but not limited to:

i. Insurance Fraud — 18 Pa.C.S. §4117;:

ii. Theft by Deception — 18 Pa.C.S.A. § 3922;

ii. Deceptive Business Practices - 18

Pa.C.S.A. § 4107;

iv. Criminal Conspiracy ~ 18 Pa.C.S.A. § 903;

v. Falsification of Social Security Infor-

mation — 42 U.S.C.A. § 408; and

vi. Use of and/or Harboring of Unauthorized

Employees — 8 U.S.C.A. § 1324

43. The above criminal actions are not intended

to be an all-inclusive list of crimes that Defendants

were engaged in and/or attempting to commit. Ra-

ther, they comprise only some of the crimes that

Defendants committed and some of the crimes that

Plaintiff objected to and/or refused to participate in

while in the employ of Defendants.

App. 10

44. Defendants’ termination of Plaintiff for

refusing to commit unlawful actions under state and

federal law(s) constitutes a violation of public policy

within Pennsylvania.

WHEREFORE, Plaintiff prays that this Court

enter an Order providing that:

A. Defendants are to be prohibited from contin-

uing to maintain their illegal policies, practices or

customs against employees or prospective employees

and are to be ordered to promulgate an effective

policy against such retaliation and discrimination

and to adhere thereto;

B. Defendants are to compensate Plaintiff,

reimburse Plaintiff and make Plaintiff whole for any

and all pay and benefits Plaintiff would have received

had it not been for Defendants’ illegal actions, includ-

ing but not limited to past lost earnings, future lost

earnings, salary, pay increases, bonuses, medical and

other benefits, training, promotions, pension, and

seniority. Plaintiff should be accorded those benefits

illegally withheld (if determined that there are such

benefits) from the date she first suffered retaliation

at the hands of Defendants until the date of verdict;

C. Plaintiffis to be awarded liquidated damages

or punitive damages as permitted by any of her

claims herein, in an amount believed by the Court or

trier of fact to be appropriate to punish Defendants

for their willful, deliberate, malicious and outrageous

conduct and to deter Defendants or other employers

from engaging in such misconduct in the future;

App. 11

D. Plaintiff is to be accorded any and all other

equitable and legal relief as the Court deems just,

proper and appropriate;

E. Plaintiff is to be awarded the costs and

expenses of this action and reasonable legal fees as

provided by applicable federal and state law;

F. Any verdict in favor of Plaintiff is to be

molded by the Court to maximize the financial recov-

ery available to Plaintiff in light of the caps on cer-

tain damages set forth in applicable federal law;

G. Plaintiff’s claims are to receive a trial by

jury to the extent allowed by applicable law. Plaintiff

has also endorsed this demand on the caption of this

Complaint in accordance with Federal Rule of Civil

Procedure 38(b).

Respectfully submitted,

KARPF, KARPF &

VIRANT, P.C.

/s/ Justin Swidler

Justin L. Swidler, Esq.

3070 Bristol Pike

Building 2, Suite 231

Bensalem, PA 19020

(215) 639-0801

Dated: June 1. 2009