Rob Hoskins
02-02-2012, 11:07 AM
In Muto, et. al. v. CBS Corporation, f/k/a Westinghouse Electric Corporation, et. al., the plaintiffs allege that they are due benefits from a pension plan sponsored by their former employer. The District Court dismissed the putative class action finding that it was time barred. Both parties agree that New York law applies. Plaintiffs contended that New York’s six year statute of limitations should govern. However, defendants contend and the District Court held that New York’s “borrowing statute” applied, instead, which required that the court look to Pennsylvania law for the statute of limitations. Pennsylvania’s statute of limitations is four years and plaintiffs’ claim would be time barred if Pennsylvania’s four year statute applied. The Second Circuit affirms the dismissal of the complaint as being untimely. The court begins by generally stating the law.
When a federal statute does not establish a period of limitations for actions brought to enforce it, the district court’s task is “to ‘borrow’ the most suitable statute or other rule of timeliness from some other source.” DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 158 (1983). In doing so, the courts “have generally concluded that Congress intended that the courts apply the most closely analogous statute of limitations under state law.” Id. Determining which state statute to apply and how to apply it is a process with which federal courts are well acquainted: “The implied absorption of State statutes of limitation within the interstices of the federal enactments is a phase of fashioning remedial details where Congress has not spoken but left matters for judicial determination within the general framework of familiar legal principles.” Holmberg v. Armbrecht, 327 U.S. 392, 395 (1946). See generally Bd. of Regents v. Tomanio, 446 U.S. 478, 483-84 (1980); UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 701-05 (1966); Phelan v. Local 305 of United Ass’n of Journeyman, 973 F.2d 1050, 1058 (2d Cir. 1992).
ERISA does not establish a limitations period for actions like this, in which former Plan participants seek benefits under § 1132(a)(1)(B) and (a)(3). Therefore, absent significant reasons to depart from the ordinary practice, see United Paperworkers Int’l Union v. Specialty Paperboard, Inc., 999 F.2d 51, 53-54 (2d Cir. 1993), the applicable limitations period in this § 1132 action is “that specified in the most nearly analogous . . . limitations statute” of the forum state. Miles v. N.Y. State Teamsters Conf. Pension & Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir. 1983) (looking to New York statute of limitations in suit for ERISA benefits); accord Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 572 F.3d 76, 78 (2d Cir. 2009) (per curiam). Here, plaintiffs chose New York as the forum state.
The court then focuses on the specific issue finding that even state’s borrowing statutes must be recognized.
We have previously analogized claims seeking benefits under § 1132 to state law breach of contract claims. See Burke, 572 F.3d at 78; see also Larsen v. NMU Pension Trust of the NMU Pension & Welfare Plan, 902 F.2d 1069, 1073 (2d Cir. 1990). Under New York law, a claim for breach of contract must be filed within six years of when the claim accrues. N.Y. C.P.L.R. § 213(2). Under the six-year rule, plaintiffs’ claims would be timely. But in its borrowing statute, § 202, New York law also provides that “when a nonresident plaintiff sues upon a cause of action that arose outside of New York, the court must apply the shorter limitations period . . . of either: (1) New York; or (2) the state where the cause of action accrued.” Stuart v. Am. Cyanamid Co., 158 F.3d 622, 627 (2d Cir. 1998) (citing N.Y. C.P.L.R. § 202).
We have held that “in determining whether a suit is timely brought . . . courts should refer to the statute of limitations of the forum state, including any ‘borrowing statute’ of the forum.” Robertson v. Seidman & Seidman, 609 F.2d 583, 586 (2d Cir. 1979). See, e.g., McDonald v. Piedmont Aviation Inc., 930 F.2d 220, 224-25 (2d Cir. 1991) (applying New York borrowing statute to claim brought under the Airline Deregulation Act); Arneil v. Ramsey, 550 F.2d 774, 779-80 (2d Cir. 1977) (applying New York borrowing statute in securities law context), overruled on other grounds by Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983). At least one other district court in our Circuit (in addition to the district court in this case) has applied this principle to an action brought under § 1132 of ERISA. See Barnett v. IBM Corp., 885 F. Supp. 581, 589-90 (S.D.N.Y. 1995).
Our presumption that we apply the forum state’s borrowing statute as a part of the limitations regime governing federal claims derives from Cope v. Anderson, 331 U.S. 461 (1947). In Cope, the Supreme Court applied the forum states’ borrowing statutes to determine limitations periods for actions brought under federal banking laws. Id. at 464-68. It rejected the notion that the forum states’ borrowing rules “should be given such a sterilizing interpretation” as to prevent their application in suits enforcing federal rights in state or in federal courts. Id. at 466. In Johnson v. Railway Express Agency, Inc., 421 U.S. 454 (1975), the Supreme Court explained its rejection of piecemeal application of state statutes of limitations:
In virtually all statutes of limitations the chronological length of the limitation period is interrelated with provisions regarding tolling, revival, and questions of application. In borrowing a state period of limitation for application to a federal cause of action, a federal court is relying on the State’s wisdom in setting a limit, and exceptions thereto, on the prosecution of a closely analogous claim.
Id. at 464.
Therefore, although rebuttable, the presumption is strong that federal courts should apply state statutes of limitations, including their borrowing statutes, as integrated wholes: “Courts . . . should not unravel state limitations rules unless their full application would defeat the goals of the federal statute at issue.” Hardin v. Straub, 490 U.S. 536, 539 (1989).
The court also addresses an issue that has always interested me. For years, the Supreme Court has stressed the desire to establish national uniformity for employers and plan participants through its interpretation of ERISA. However, ERISA’s failure to incorporate a statute of limitations and the court’s practice of adopting state statutes is very inconsistent with a goal of national uniformity. The court recognizes as much, but finds that plaintiffs’ argument is not the solution.
With regard to plaintiffs’ § 1132 claims for benefits under ERISA, we perceive no untoward consequences of applying our precedent and embracing the whole of New York’s statute of limitations instead of only the portion of the state limitations regime that plaintiffs find attractive. ERISA may have been designed, as plaintiffs note, with a goal of promoting uniformity of pension plan administration in the “processing of claims and disbursement of benefits.” Egelhoff v. Egelhoff, 532 U.S. 141, 148 (2001) (quotation marks omitted). But by its silence on limitations under § 1132, Congress permitted (and perhaps even invited) the judicial development of various state-law based limitations periods for these actions, to be determined in accordance with long-established principles for adjudicating federal claims. See DelCostello, 462 U.S. at 159-60 & n.12. We fail to see how plaintiffs’ position—whereby plaintiffs choose governing limitations periods by deciding where among plausible jurisdictions to file suit—would result in application of a more uniform limitations period in ERISA benefits actions nationwide. Neither plaintiffs’ analysis nor this Court’s ruling in accordance with its established precedents will result in uniform limitations periods nationally or for individual plans. And that is a tolerable and appropriate result. Cf. UAW, 383 U.S. at 701-05 (adopting forum states’ statutes of limitation for actions under § 301 of the Labor Management Relations Act despite strong policy of uniformity in that act).
A copy of the decision is attached.
When a federal statute does not establish a period of limitations for actions brought to enforce it, the district court’s task is “to ‘borrow’ the most suitable statute or other rule of timeliness from some other source.” DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 158 (1983). In doing so, the courts “have generally concluded that Congress intended that the courts apply the most closely analogous statute of limitations under state law.” Id. Determining which state statute to apply and how to apply it is a process with which federal courts are well acquainted: “The implied absorption of State statutes of limitation within the interstices of the federal enactments is a phase of fashioning remedial details where Congress has not spoken but left matters for judicial determination within the general framework of familiar legal principles.” Holmberg v. Armbrecht, 327 U.S. 392, 395 (1946). See generally Bd. of Regents v. Tomanio, 446 U.S. 478, 483-84 (1980); UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 701-05 (1966); Phelan v. Local 305 of United Ass’n of Journeyman, 973 F.2d 1050, 1058 (2d Cir. 1992).
ERISA does not establish a limitations period for actions like this, in which former Plan participants seek benefits under § 1132(a)(1)(B) and (a)(3). Therefore, absent significant reasons to depart from the ordinary practice, see United Paperworkers Int’l Union v. Specialty Paperboard, Inc., 999 F.2d 51, 53-54 (2d Cir. 1993), the applicable limitations period in this § 1132 action is “that specified in the most nearly analogous . . . limitations statute” of the forum state. Miles v. N.Y. State Teamsters Conf. Pension & Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir. 1983) (looking to New York statute of limitations in suit for ERISA benefits); accord Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 572 F.3d 76, 78 (2d Cir. 2009) (per curiam). Here, plaintiffs chose New York as the forum state.
The court then focuses on the specific issue finding that even state’s borrowing statutes must be recognized.
We have previously analogized claims seeking benefits under § 1132 to state law breach of contract claims. See Burke, 572 F.3d at 78; see also Larsen v. NMU Pension Trust of the NMU Pension & Welfare Plan, 902 F.2d 1069, 1073 (2d Cir. 1990). Under New York law, a claim for breach of contract must be filed within six years of when the claim accrues. N.Y. C.P.L.R. § 213(2). Under the six-year rule, plaintiffs’ claims would be timely. But in its borrowing statute, § 202, New York law also provides that “when a nonresident plaintiff sues upon a cause of action that arose outside of New York, the court must apply the shorter limitations period . . . of either: (1) New York; or (2) the state where the cause of action accrued.” Stuart v. Am. Cyanamid Co., 158 F.3d 622, 627 (2d Cir. 1998) (citing N.Y. C.P.L.R. § 202).
We have held that “in determining whether a suit is timely brought . . . courts should refer to the statute of limitations of the forum state, including any ‘borrowing statute’ of the forum.” Robertson v. Seidman & Seidman, 609 F.2d 583, 586 (2d Cir. 1979). See, e.g., McDonald v. Piedmont Aviation Inc., 930 F.2d 220, 224-25 (2d Cir. 1991) (applying New York borrowing statute to claim brought under the Airline Deregulation Act); Arneil v. Ramsey, 550 F.2d 774, 779-80 (2d Cir. 1977) (applying New York borrowing statute in securities law context), overruled on other grounds by Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983). At least one other district court in our Circuit (in addition to the district court in this case) has applied this principle to an action brought under § 1132 of ERISA. See Barnett v. IBM Corp., 885 F. Supp. 581, 589-90 (S.D.N.Y. 1995).
Our presumption that we apply the forum state’s borrowing statute as a part of the limitations regime governing federal claims derives from Cope v. Anderson, 331 U.S. 461 (1947). In Cope, the Supreme Court applied the forum states’ borrowing statutes to determine limitations periods for actions brought under federal banking laws. Id. at 464-68. It rejected the notion that the forum states’ borrowing rules “should be given such a sterilizing interpretation” as to prevent their application in suits enforcing federal rights in state or in federal courts. Id. at 466. In Johnson v. Railway Express Agency, Inc., 421 U.S. 454 (1975), the Supreme Court explained its rejection of piecemeal application of state statutes of limitations:
In virtually all statutes of limitations the chronological length of the limitation period is interrelated with provisions regarding tolling, revival, and questions of application. In borrowing a state period of limitation for application to a federal cause of action, a federal court is relying on the State’s wisdom in setting a limit, and exceptions thereto, on the prosecution of a closely analogous claim.
Id. at 464.
Therefore, although rebuttable, the presumption is strong that federal courts should apply state statutes of limitations, including their borrowing statutes, as integrated wholes: “Courts . . . should not unravel state limitations rules unless their full application would defeat the goals of the federal statute at issue.” Hardin v. Straub, 490 U.S. 536, 539 (1989).
The court also addresses an issue that has always interested me. For years, the Supreme Court has stressed the desire to establish national uniformity for employers and plan participants through its interpretation of ERISA. However, ERISA’s failure to incorporate a statute of limitations and the court’s practice of adopting state statutes is very inconsistent with a goal of national uniformity. The court recognizes as much, but finds that plaintiffs’ argument is not the solution.
With regard to plaintiffs’ § 1132 claims for benefits under ERISA, we perceive no untoward consequences of applying our precedent and embracing the whole of New York’s statute of limitations instead of only the portion of the state limitations regime that plaintiffs find attractive. ERISA may have been designed, as plaintiffs note, with a goal of promoting uniformity of pension plan administration in the “processing of claims and disbursement of benefits.” Egelhoff v. Egelhoff, 532 U.S. 141, 148 (2001) (quotation marks omitted). But by its silence on limitations under § 1132, Congress permitted (and perhaps even invited) the judicial development of various state-law based limitations periods for these actions, to be determined in accordance with long-established principles for adjudicating federal claims. See DelCostello, 462 U.S. at 159-60 & n.12. We fail to see how plaintiffs’ position—whereby plaintiffs choose governing limitations periods by deciding where among plausible jurisdictions to file suit—would result in application of a more uniform limitations period in ERISA benefits actions nationwide. Neither plaintiffs’ analysis nor this Court’s ruling in accordance with its established precedents will result in uniform limitations periods nationally or for individual plans. And that is a tolerable and appropriate result. Cf. UAW, 383 U.S. at 701-05 (adopting forum states’ statutes of limitation for actions under § 301 of the Labor Management Relations Act despite strong policy of uniformity in that act).
A copy of the decision is attached.