Michael D. Martin; Sunder Malkani; Vinod D. Patel v. Public Service Electric & Gas Co., Inc.

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 07-1353
MICHAEL D. MARTIN; SUNDER MALKANI; VINOD D. PATEL,
Appellants
v.
PUBLIC SERVICE ELECTRIC & GAS CO., INC.;
EMPLOYEE BENEFITS COMMITTEE OF PUBLIC
SERVICE ENTERPRISE GROUP, INC.;
ABC CORPORATIONS 1-30 fictitious corporate defendants
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
(D.C. Civil No. 05-cv-05801)
District Judge: The Honorable Dennis M. Cavanaugh
Argued: March 5, 2008
Before: BARRY, JORDAN and HARDIMAN, Circuit Judges
(Opinion Filed: March 31, 2008 )
Neil M. Mullin, Esq. (Argued)
Smith Mullin
240 Claremont Avenue
Montclair, NJ 07042
-AND-

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As the District Court noted, the complaint apparently misidentified the defendant as1
“Public Service Electric & Gas Co., Inc.” The parties and the District Court have referred
to the defendant as PSEG and we will do so as well.
2
Matthew J. Vance, Esq.
Niedweske Barber
98 Washington Street
Morristown, NJ 07960
Counsel for Appellants
Brian T. Ortelere, Esq. (Argued)
Jonathan S. Krause, Esq.
Morgan, Lewis & Bockius
1701 Market Street
Philadelphia, PA 19103
-AND-
Richard G. Rosenblatt, Esq.
Morgan, Lewis & Bockius
502 Carnegie Center
Princeton, NJ 08540
Counsel for Appellees
OPINION
BARRY, Circuit Judge
Appellants, Michael Martin, Sunder Malkani, and Vinod Patel (collectively,
“appellants”) appeal the orders of the District Court granting the motion to dismiss of
appellee Public Service Enterprise Group (“PSEG”), and denying appellants’ motion for1

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Appellants also alleged, in Count II, unlawful interference with the attainment of ERISA2
benefits under ERISA § 510, 29 U.S.C. § 1140, and Martin alleged, in Count IV, that
PSEG failed to disclose plan documents in violation of ERISA § 502(c)(1)(B), 29 U.S.C.
§ 1132(c)(1)(B). The unlawful interference claim was withdrawn and the failure to
disclose claim is not raised on appeal. And, we note, we need not consider appellants’
Count III “conditional claim” for back benefits under ERISA § 502(a)(1)(B), 29 U.S.C. §
1132(a)(1)(B). That claim was pled hypothetically in the event the District Court
determined that appellants were entitled to retroactively obtain benefits under the plans
which, of course, it did not.
3
reconsideration and for leave to amend their complaint. We have reviewed the record and
the submissions of the parties and have heard oral argument. We have jurisdiction under
28 U.S.C. § 1291, and will affirm.
I.
On December 13, 2005, appellants filed a class action complaint alleging, in
Count I and as relevant here, that PSEG breached its fiduciary duties in violation of §
404(a) of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §
1104(a), by misrepresenting to them that they were not entitled to participate in pension
and employee welfare plans, when, in fact, they were entitled to participate in those
plans. PSEG moved to dismiss, claiming, among other things, that appellants, as2
independent contractors, lacked standing to bring their claims because they were
expressly excluded from coverage under the plans from which they were seeking benefits
and that, even if they had standing, their claims were time-barred. Appellants responded
to each of the grounds on which dismissal was sought, including timeliness, and argued
that even if they were ineligible to participate in the most recent plans, they were eligible

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Appellants claimed that under ERISA § 204(g), 29 U.S.C. § 1054(g), the anti-cutback3
rule, PSEG was prohibited from decreasing benefits accrued under prior versions of the
plans. The District Court found that appellants had not pled an anti-cutback claim and,
citing undue delay, denied their motion for leave to amend the complaint to add the claim.
Appellants maintained from the outset that an anti-cutback claim had been properly pled,
only seeking to amend the complaint after the complaint had been dismissed. The District
Court did not abuse its discretion in denying the motion for leave to amend. We note that
it was not until their reply brief on appeal that appellants raised the denial of the motion
for leave to amend. See In re Suprema Specialties, Inc. Sec. Litig., 438 F.3d 256, 286
n.17 (3d Cir. 2006) (the failure to identify or argue an issue in the opening brief
constitutes a waiver of the issue on appeal).
4
under prior versions of those plans. On December 4, 2006, the District Court granted
PSEG’s motion to dismiss, concluding that appellants lacked standing to bring the claims
asserted in the complaint and on January 9, 2007, denied appellants’ motions for
reconsideration and for leave to amend the complaint.3
PSEG’s primary argument on appeal is that appellants’ claims are time-barred, an
argument not ruled on by the District Court once it found that appellants lacked standing
and dismissed on that ground. We can affirm for any reason that finds support in the
record. Francis v. Mineta, 505 F.3d 266, 267 (3d Cir. 2007). The record supports the
conclusion that this case is time-barred, and we will affirm on that ground.
II.
When deciding a motion under Federal Rule of Civil Procedure 12(b)(6), a district
court must “‘accept all factual allegations as true, construe the complaint in the light most
favorable to the plaintiff, and determine whether, under any reasonable reading of the
complaint, the plaintiff may be entitled to relief.’” Phillips v. County of Allegheny, 515

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5
F.3d 224, 233 (3d Cir. 2008) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374
n.7 (3d Cir. 2002)). Our review is plenary. Leveto v. Lapina, 258 F.3d 156, 161 (3d Cir.
2001).
III.
ERISA bars actions for breach of fiduciary duty “after the earlier of -- (1) six years
after . . . the date of the last action which constituted a part of the breach or violation . . .
or (2) three years after the earliest date on which the plaintiff had actual knowledge of the
breach or violation.” ERISA § 413, 29 U.S.C. § 1113. We will assume for purposes of
our analysis that the longer six-year statute of limitations period applies, and thus that
because the complaint was filed in December 2005, December 1999 is the last date on
which a breach sufficient to serve as a basis for the complaint could have occurred.
The heart of appellants’ breach of fiduciary duty claim is the purported intentional
and wrongful misclassification of them at the outset of, and throughout, their employment
as independent contractors, a misclassification that denied them participation in plans in
which they were otherwise entitled to participate. PSEG argues that the “date of the last
action” was the date appellants were allegedly misclassified, i.e. the date in the 1980’s
when each appellant was hired, and cites Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197,
202-03 (3d Cir. 2006), a case in which we held that the “date of the last action” was the
date the alleged misrepresentations about the pension plans were made, not the last date
on which the plaintiffs detrimentally relied on the misrepresentations. See also Keen v.

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A continuing violation theory is foreclosed, at least in the context of non-fiduciary4
ERISA claims. See Miller v. Fortis Benefits Ins. Co., 475 F.3d 516, 522 (3d Cir. 2007)
(declining to adopt a continuing violation theory whereby a new cause of action would
accrue upon each underpayment of benefits owed).
6
Lockheed Martin Corp., 486 F. Supp. 2d 481, 492-93 (E.D. Pa. 2007).4
We are not as certain as PSEG that the “date of the last action” was the date on
which each of the appellants was hired, i.e., the date on which PSEG allegedly
misclassified each appellant thereby representing to him that he was not eligible for
benefits. The reason we are not as certain is because when appellants were hired, and for
some years thereafter, independent contractors were not expressly excluded from the
definition of “Employee.” We are certain, however, that at least as early as January 1,
1998 (and likely as early as October 17, 1994), the amendments to that definition carved
out independent contractors, and that that date was the “date of the last action.” Indeed,
appellants have not even alleged any part of a breach of fiduciary duty within the six-year
statute of limitations that is independent of or other than a mere continuation of what
occurred in 1998 – or 1994. See Ranke, 436 F.3d at 203. The complaint, therefore, is
time-barred.
We will affirm the December 4, 2006 and January 9, 2007 orders of the District
Court.

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