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Johnson v. Retirement Plan of General Mills, Inc.

United States District Court, S.D. Indiana, New Albany Division

July 31, 2018




         This matter is before the Court on the Plaintiff Deborah Johnson's (“Johnson”) Motion to Lift the Stay and Allow Her Vested ERISA Pension Claims to Proceed against Defendant Retirement Plan of General Mills Inc. and the Bakery, Confectionary, Tobacco and Grain Millers International Union (BCTGM) (“the Plan”) (Filing No. 41). For the reasons that follow, the Motion is GRANTED.

         I. BACKGROUND

         Johnson is a vested participant in the Plan. On October 29, 2015, Johnson received notice that her claim to commence her Plan benefits for Disability Retirement had been denied after review of her Application for Disability Retirement and Physician's Report of Disability, because the findings indicate that Johnson is not totally and permanently disabled and is able to engage in substantial gainful activity and could return to work with medical restrictions[1]. (Filing No. 32-2.)

         On August 19, 2016, Johnson filed this lawsuit seeking to recover her vested ERISA pension benefits payable as a Disability Retirement. (Filing No. 1.) On January 6, 2017, the Plan filed a Motion to Stay Litigation and Compel Arbitration. (Filing No. 27.) The Magistrate Judge granted the stay on March 29, 2017, and Johnson objected. (Filing No. 36.) The Court issued the stay to compel arbitration between the two parties because Johnson consented to arbitration through a signed Release Agreement included in her severance package (“the Release”) (Filing No. 23-1 at 1). On August 25, 2017, the Court adopted the Magistrate Judge's order and overruled Johnson's objection. (Filing No. 40.)

         On October 25, 2017, Administrative Law Judge D. Lyndell Pickett approved Johnson's claim for Social Security disability benefits. (Filing No. 41-1.) On October 31, 2017, Johnson advised the Plan of her approval for Social Security disability benefits and requested it remit her Disability Retirement benefits. (Filing No. 41-2.) To date the Plan has failed to comply. Johnson contends the award of Social Security disability established her right to receive Disability Retirement benefits under the terms the retirement plan of General Mills, Inc. (formerly, The Pillsbury Co.) and the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union (AFL-CIO-CLC) (“the Retirement Plan”). (Filing No. 32-1 at 11). The Retirement Plan includes a Disability Retirement Age. Id. at 12.

         Pursuant to the terms of the Release the Plan relied on for compelling arbitration, the Plan was required to pay the full cost of the arbitration-specifically the American Arbitration Fee (the “AAA Fee”) (“GMI will pay the AAA Fee, as well as the Arbitrator's fees and expenses, for any arbitration proceeding under this provision.”) (Filing No. 31-3 at 3). If Johnson initiates the arbitration process, she is required to pay a filing fee of no less than $300.00. The balance of any fees are required to be paid by the employer/company. (Filing No. 41-3.)

         To date, the Plan has made no effort to initiate the arbitration process. On November 15, 2017, the Plan refused to provide Disability Retirement benefits to Johnson, following its receipt of notice of Johnson's favorable Social Security disability award. (Filing No. 42-1 at 3-4.) Johnson reminded the Plan of its obligation to pay the AAA Fee-to initiate the arbitration so she could quickly resolve her claims. On December 8, 2017, Johnson filed her Motion to Lift Stay (Filing No. 41).


         A district court “has broad discretion to stay proceedings as an incident to its power to control its own docket.” Simon v. Muschell, No. 1:09-CV-301-JTM, 2014 WL 1651975, at *1 (N.D. Ind. Apr. 18, 2014) (quoting Clinton v. Jones, 117 S.Ct. 1636, 1650 (1997)). “The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. North American Co., 299 U.S. 284, 254 (1936). The ability to lift a stay previously enforced is included in this power.


         Johnson requests that the Court lift the stay in this proceeding and allow her vested ERISA pension claims to proceed. Johnson contends that: (1) the Plan's refusal to pay the AAA Fee and thereby initiate the arbitration process, a process that it requested, is inconsistent with its right to arbitrate; (2) is in breach of the Release terms (a condition precedent); and (3) is prejudicial to Johnson given the delayed payment of her Disability Retirement benefits which have been clearly established by the favorable Social Security disability award. (Filing No. 41 at 3.) The Plan responds that the stay should not be lifted, due to this Court's prior orders granting the stay and that Johnson is not entitled to litigate her claims pursuant to the Federal Arbitration Act (“FAA”).[2] (Filing No. 42 at 1.)

         The FAA permits a district court to stay litigation and refer the case to arbitration.

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the ...

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