Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-02237/USCOURTS-ca7-15-02237-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 15-2237

CENTRAL STATES, SOUTHEAST AND SOUTHWEST 

AREAS HEALTH AND WELFARE FUND,

an Employee Welfare Benefit Plan, by

ARTHUR H. BUNTE, JR., Trustee, in his 

representative capacity,

Plaintiffs-Appellants,

v.

AMERICAN INTERNATIONAL GROUP, INC., et al.,

Defendants-Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 14 C 5195 — John Z. Lee, Judge.

____________________

ARGUED DECEMBER 7, 2015 — DECIDED OCTOBER 24, 2016

____________________

Before FLAUM, WILLIAMS, and SYKES, Circuit Judges.

SYKES, Circuit Judge. A self-funded ERISA plan has sued 

several independent health insurers seeking reimbursement 

for medical expenses it paid on behalf of beneficiaries who 

were covered under both the plan and the insurers’ policies. 

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We’re asked to decide whether a lawsuit like this one—a 

“coordination of benefits” dispute—seeks “appropriate 

equitable relief” under section 502(a)(3) of ERISA, 29 U.S.C. 

§ 1132(a)(3). Six circuits have held that section 502(a)(3) does 

not authorize suits of this type because the relief sought is 

legal, not equitable. We join this consensus and affirm the 

dismissal of the ERISA plan’s suit.

I. Background

Central States, Southeast and Southwest Areas Health 

and Welfare Fund (“Central States” or “the plan”) is a selffunded ERISA plan that provides health coverage to participating Teamsters and their dependents. The plan’s trustee 

filed suit on the plan’s behalf seeking a declaratory judgment enforcing the plan’s terms and awarding restitution on 

various theories. The defendants are insurance companies

that underwrite and administer insurance policies for 

schools and youth sports leagues; their policies cover injuries sustained by young athletes while participating in 

athletic activities sponsored by these schools and leagues. 

The case arises from injuries sustained by student athletes

who had medical coverage under both the Central States 

plan and the independent insurers’ policies. The trustee 

alleges that the plan paid the beneficiaries’ medical bills in 

full, in the total amount of about $343,000, and the insurers 

owe reimbursement.

The plan and the insurers’ policies have competing coordination-of-benefits clauses, and each side claims that its 

respective provision makes the other primarily liable for the

beneficiaries’ medical expenses. Coordination-of-benefits

disputes like this one are often resolved in state court in a 

declaratory-judgment action on an equitable-contribution 

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No. 15-2237 3

theory.1 See 16 LEE R. RUSS & THOMAS F. SEGALLA, COUCH 

ON INSURANCE § 232:71 (3d ed. 2000).

But the trustee sued in federal court under section

502(a)(3) of ERISA (the Employee Retirement Income Security Act of 1974), which provides in relevant part that a participant, beneficiary, or fiduciary of an employee-benefits plan 

may bring a civil action “to obtain ... appropriate equitable 

relief ... to enforce any provisions of this subchapter or the 

terms of the plan.” 29 U.S.C. § 1132(a)(3)(B) (emphasis 

added). The trustee contends that the suit seeks “appropriate 

equitable relief” to enforce the plan’s coordination-ofbenefits provision.

More specifically, the trustee seeks: (1) a declaratory 

judgment that the insurers are primarily liable for “current 

unpaid and future medical expenses” incurred by athletes 

who are covered by both the plan and one of the insurers; 

(2) a declaratory judgment that the insurers are primarily 

liable for medical expenses for injuries already incurred and 

treated; (3) the imposition of an equitable lien on sums held 

by the insurers in the amount of the benefits paid by the 

plan; and (4) an order that the insurers must reimburse the 

plan, variously justified on restitution, unjust enrichment, 

and subrogation theories.

 1 These suits also may be brought on equitable-subrogation or equitableindemnification theories. For a discussion of the distinction between 

equitable contribution on the one hand and equitable subrogation or 

equitable indemnification on the other, see Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307 (Ill. 2004), and 15 LEE R. RUSS &

THOMAS F. SEGALLA, COUCH ON INSURANCE § 217:5 (3d ed. 1999).

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The insurers moved to dismiss all claims. The district 

judge granted the motion on two different grounds. To the 

extent that the suit sought a declaratory judgment regarding

future medical expenses, the judge held that it did not raise a 

controversy sufficient to invoke the court’s power to award 

declaratory relief and dismissed that claim for lack of subject-matter jurisdiction. See FED. R. CIV. P. 12(b)(1). The

remaining claims were dismissed under Rule 12(b)(6) for 

failure to state a claim. The judge reasoned that the relief 

sought, though phrased in equitable terms, was not equitable relief within the meaning of section 502(a)(3).

II. Discussion

A. Jurisdiction 

As always, our first question is subject-matter jurisdiction. We’re satisfied that jurisdiction is secure over most of 

this case. The Central States plan has clearly been injured by 

the independent insurers’ failure to reimburse it for the 

medical expenses it has paid, and its claim arises under a 

federal statute, section 502(a)(3) of ERISA. But the request 

for a declaratory judgment regarding the insurers’ liability

for “current unpaid and future medical expenses” is jurisdictionally problematic. For starters, the trustee’s use of the 

phrase “current unpaid and future medical expenses” is 

odd. The amended complaint alleges that Central States paid 

the injured students’ medical expenses in full. Accepting that 

as true, there are no “current unpaid” medical expenses at 

all. The trustee explains in his briefs that this request for 

relief relates to “prospective claims”—that is, claims that 

Teamsters’ dependents might make for injuries sustained in 

the future.

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This clearly raises ripeness concerns, as the district judge 

recognized.2 The Declaratory Judgment Act permits a federal court to award a declaratory judgment only in “a case of 

actual controversy.” 28 U.S.C. § 2201(a). This limitation is 

equivalent to the Constitution’s general limitation on the 

jurisdiction of the federal courts. U.S. CONST. art. III, § 2, 

cl. 1; § 2201(a); Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 

270, 272 (1941). Maryland Casualty remains the leading 

statement on ripeness questions in the context of

declaratory-judgment actions: A suit is ripe when “the facts 

alleged, under all the circumstances, show that there is a 

substantial controversy, between parties having adverse 

legal interests, of sufficient immediacy and reality to warrant 

the issuance of a declaratory judgment.” 312 U.S. at 273. The 

question is “necessarily one of degree,” id., and it “must be 

worked out on a case-by-case basis,” 10B CHARLES ALAN 

WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL

PRACTICE AND PROCEDURE § 2757 (3d ed. 1998).

The trustee’s request for a declaratory judgment regarding expenses the plan has already paid is plainly ripe for 

adjudication; that claim involves a definite injury between 

parties with adverse legal interests. The declaratoryjudgment request regarding future claims, however, is 

unripe. That request for relief arises from hypothetical 

benefits claims that have yet to be filed—indeed from injuries that have not yet occurred—so the controversy between 

 2 The Supreme Court has held that ripeness is a jurisdictional question. 

See, e.g, Metro. Wash. Airports Auth. v. Citizens for Abatement of Aircraft 

Noise, Inc., 501 U.S. 252, 265 n.13 (1991) (“[Ripeness] concerns our 

jurisdiction under Article III, so we must consider the question on our 

own initiative.”).

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the plan and the insurers is not of “sufficient immediacy” to

invoke a federal court’s jurisdiction.

Our decision in Solo Cup Co. v. Federal Insurance Co., 

619 F.2d 1178 (7th Cir. 1980), is instructive on this point. In 

Solo Cup we dismissed as unripe an employer’s request for a 

declaration that its insurer must indemnify it for yet-to-befiled lawsuits. The employer had settled one plaintiff’s 

discrimination claim and sought indemnification for the

settlement; that claim was clearly justiciable. Id. at 1183. In 

the meantime, the federal government had issued a report 

finding that the employer had discriminated against some 

70 additional employees; the employer sought a judgment 

declaring that any sums it might have to pay on these potential discrimination claims would be within the indemnity 

coverage of the insurer’s policy. Id. at 1188–89. That claim 

was unripe because “[t]he mere possibility that proceedings 

might be commenced against an insured ... is not sufficient 

to create a controversy within the meaning of either the 

Declaratory Judgment Act or Article III of the Constitution.” 

Id. at 1189.

The trustee’s request here—for a declaration regarding

payment of future claims—is even more remote. In Solo Cup

the prospective claims against the insured were identifiable 

and had accrued but had not yet been filed. Here the trustee 

wants a declaration regarding hypothetical future medical 

claims arising from injuries that have not yet occurred. This

aspect of the trustee’s declaratory-judgment request is 

clearly unripe.

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B. Section 502(a)(3) and “Equitable Relief”

Turning now to the merits of the remaining claims, we 

agree with the district judge that the relief sought is legal, 

not equitable, so the trustee’s suit is not authorized under 

ERISA section 502(a)(3).

This is not the first time that Central States has sued insurers of schools and athletic leagues seeking reimbursement for medical expenses it paid on behalf of its beneficiaries. Six circuits have considered virtually identical claims by 

the plan. All have reached the same conclusion: The suit is 

not authorized under section 502(a)(3) because the relief 

sought is legal, not equitable. Cent. States, Se. & Sw. Areas 

Health & Welfare Fund v. Student Assurance Servs., Inc., 

797 F.3d 512 (8th Cir. 2015); Cent. States, Se. & Sw. Areas 

Health & Welfare Fund v. Gerber Life Ins. Co., 771 F.3d 150 (2d 

Cir. 2014); Cent. States, Se. & Sw. Areas Health & Welfare Fund

v. Bollinger, Inc., 573 F. App’x 197 (3d Cir. 2014); Cent. States, 

Se. & Sw. Areas Health & Welfare Fund v. First Agency, Inc., 

756 F.3d 954 (6th Cir. 2014); Cent. States, Se. & Sw. Areas 

Health & Welfare Fund v. Health Special Risk, Inc., 756 F.3d 356 

(5th Cir. 2014).

These circuits rest their decisions on a quartet of Supreme 

Court cases interpreting the phrase “appropriate equitable 

relief” in section 502(a)(3): Mertens v. Hewitt Associates, 

508 U.S. 248 (1993); Great-West Life & Annuity Insurance Co. v. 

Knudson, 534 U.S. 204 (2002); Sereboff v. Mid Atlantic Medical

Services, Inc., 547 U.S. 356 (2006); and US Airways, Inc. v. 

McCutchen, 133 S. Ct. 1537 (2013). The quartet has since 

become a quintet with the Court’s recent decision in 

Montanile v. Board of Trustees of the National Elevator Industry 

Health Benefit Plan, 136 S. Ct. 651 (2016).

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Mertens, the first in the series, involved a suit brought by 

ERISA beneficiaries against a nonfiduciary who participated 

in an alleged breach of fiduciary duty. The Court held that 

“appropriate equitable relief” is limited to “those categories 

of relief that were typically available in equity (such as 

injunction, mandamus, and restitution, but not compensatory damages).” Mertens, 508 U.S. at 256. The Court held that 

the relief the ERISA beneficiaries sought was compensatory 

damages, which is “the classic form of legal relief” and 

therefore unavailable under section 502(a)(3). Id. at 255.

The next four cases—Great-West, Sereboff, McCutchen, and 

Montanile—all involved disputes between ERISA plans and 

beneficiaries over the proceeds of auto-insurance settlements. The ERISA beneficiaries suffered injuries in car 

accidents; the ERISA plans paid for the medical care to treat 

these injuries. When the beneficiaries settled with the drivers 

who caused the accidents, the ERISA plans demanded 

reimbursement from the settlement proceeds. The beneficiaries refused, and the ERISA plans brought restitution claims

under section 502(a)(3) to enforce reimbursement provisions 

in their plan documents.

In Sereboff and McCutchen, the defendant beneficiaries

held the settlement proceeds in segregated accounts or 

funds, and in each case the plans sought an equitable lien 

against the specifically identified account or fund; the Court 

held that this form of relief was properly regarded as equitable. In Great-West and Montanile, on the other hand, the 

defendant beneficiaries did not possess the settlement proceeds; the relief sought was money damages from the beneficiary’s general assets, a quintessentially legal remedy. More 

specifically, in Great-West the proceeds of the settlement 

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were allocated to a trust rather than directly to the beneficiary, who was the defendant in the plan’s suit; in Montanile

the settlement proceeds were paid directly to the defendant 

beneficiary, but the record suggested that the money may 

have been dissipated before the ERISA plan filed suit.3

In each of these cases, the Court explained that whether a 

remedy is available under section 502(a)(3) “depends on 

(1) the basis for the plaintiff’s claim and (2) the nature of the 

underlying remedies sought”; both must be equitable to

proceed under section 502(a)(3). Montanile, 136 S. Ct. at 657

(brackets and quotation marks omitted). The inquiry looks to 

“standard treatises on equity, which establish the basic 

contours of what equitable relief was typically available in 

premerger equity courts.” Id. (internal quotation marks 

omitted).4

 3 To be precise, in Montanile the lower courts had not had occasion to 

determine whether the defendant beneficiary had fully depleted the 

settlement fund on nontraceable assets. Applying its prior cases, the 

Court held that a recovery against a beneficiary’s general assets is legal

rather than equitable relief, reversing the lower courts’ decisions to the 

contrary, but remanded to permit the district court to determine whether 

the beneficiary had dissipated the entire settlement fund or comingled 

the fund with his general assets. Montanile v. Bd. of Trs. of the Nat’l 

Elevator Indus. Health Benefit Plan, 136 S. Ct. 651, 661–62 (2016).

4 But see RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST 

ENRICHMENT § 4 cmt. a (AM. LAW INST. 2011) (Some federal statutes 

“arguably necessitate[] an inquiry into the legal or equitable nature of 

the relief sought ... . Resolution of such problems turns on issues ... that 

are beyond the reach of legal history and outside the scope of this 

Restatement.”); RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST 

ENRICHMENT ch. 7, topic 2, intro. note (AM. LAW INST. 2011) (“Lingering 

effects of [the law/equity distinction] on the remedies available under 

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Importantly, the Court made it clear that simply phrasing 

the request for relief in equitable terms—e.g., restitution, 

unjust enrichment, an equitable lien—is not dispositive. The 

remedy is properly regarded as equitable only if the plaintiff 

seeks the return of “specifically identified funds that remain 

in the defendant’s possession or ... traceable items that the 

defendant purchased with the funds (e.g., identifiable property like a car).” Id. at 658. A section 502(a)(3) suit wasn’t 

available in either Great-West or Montanile because the 

plaintiffs hadn’t pointed to specifically identifiable funds in 

the defendant’s possession to which an equitable lien could 

attach.

The trustee hasn’t done so here either, so he cannot proceed under section 502(a)(3) on any of the theories he styles 

as “restitutionary.” He can’t point to specifically identifiable 

funds in the insurers’ possession because the insurers never 

received any funds at all. They may have avoided what the 

trustee claims are their contractual obligations to the insureds and in that sense realized a monetary benefit. But no 

matter what the trustee calls his claim, he is seeking a recovery from the insurers’ general assets. His request for declaratory relief seeks an order requiring the insurers to reimburse 

the plan—in other words, he asks for money damages, the 

epitome of legal relief. That kind of suit is unavailable under 

section 502(a)(3). Great-West, 534 U.S. at 210 (“Almost invariably ... suits seeking (whether by judgment, injunction, or 

declaration) to compel the defendant to pay a sum of money 

to the plaintiff are suits for ‘money damages,’ ... since they 

seek no more than compensation for loss resulting from the 

 

particular statutes or on the right to jury trial are outside the scope of this 

Restatement.”).

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defendant’s breach of legal duty.”) (quotation marks omitted).

The trustee offers several arguments to avoid this conclusion, but all fail. First, he invokes the equitable roots of his

various restitutionary theories. As we’ve noted, however, 

the Supreme Court has repeatedly held that even if the basis 

for a claim is equitable, the relief sought must be equitable as 

well and that requires identifying specific funds in the

defendant’s possession. Montanile, 136 S. Ct. at 657. The 

Court has given us no indication that this requirement 

applies to some but not all of the three traditionally equitable theories by which a plaintiff may obtain restitution: 

equitable lien, constructive trust, and subrogation. See 

RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST 

ENRICHMENT § 56 cmt. a (AM. LAW INST. 2011). And the 

Restatement makes clear that all of these remedies “confer 

either rights of ownership or a security interest in specifically identifiable property in the hands of the defendant.” 

RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST 

ENRICHMENT ch. 7, topic 2, intro. note (AM. LAW INST. 2011).

Regardless of how the trustee characterizes his claims, the 

relief he seeks isn’t equitable in nature, and a suit under 

section 502(a)(3) is therefore unavailable.

Second, the trustee argues that allowing his suit is consistent with ERISA’s “underlying purpose[s]” of protecting 

plan assets and enforcing plan terms. For support he relies

on the Supreme Court’s opinion in King v. Burwell, 135 S. Ct. 

2480 (2015). But the Court has heard this argument before in 

the context of section 502(a)(3) suits and has consistently 

rejected it. Montanile, 136 S. Ct. at 661 (“[V]ague notions of a 

statute’s ‘basic purpose’ are ... inadequate to overcome the 

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words of its text regarding the specific issue under consideration.” (quoting Mertens, 508 U.S. at 261)).

Finally, the trustee relies on two cases from this court in 

which we permitted ERISA plans to litigate coordination-ofbenefits disputes against other insurers: Winstead v. Indiana 

Insurance Co., 855 F.2d 430 (7th Cir. 1988), and Winstead v. 

J.C. Penney Co., 933 F.2d 576 (7th Cir. 1991). Both cases were

decided before Mertens, the Supreme Court’s first foray into 

the question of appropriate equitable relief under section 

502(a)(3). These two early cases in our circuit cannot be 

reconciled with the Court’s consistent instructions in 

Mertens, Great-West, Sereboff, McCutchen, and Montanile. 

In closing, we recognize the dilemma this outcome creates for the plan. An equitable-contribution suit under state 

law is probably foreclosed by ERISA’s broad preemption 

provision. See generally United of Omaha v. Bus. Men’s Assurance Co. of Am., 104 F.3d 1034 (8th Cir. 1997) (holding that 

ERISA preempts a state common-law subrogation claim in a 

dispute between two insurance companies over which 

company was responsible to pay for certain benefits). If 

ERISA plans can’t bring section 502(a)(3) suits or state-law 

claims to obtain reimbursement from other insurers with 

overlapping coverage obligations, then they’re left with just 

one way to ensure that they don’t pay claims for which other 

insurers are primarily liable: refuse to provide coverage to 

beneficiaries who have other insurance and sue for a declaratory judgment that the other insurer is primarily liable. This 

approach leaves the ERISA beneficiary, “through no fault of 

his own, ... considerably worse off for having two policies 

that coincidentally had conflicting language than he would 

be if he had only one.” Gerber Life Ins. Co., 771 F.3d at 159.

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The trustee asks us to resolve this regrettable dilemma in 

the plan’s favor. But that option is not open to us. It would

directly contravene clear instructions from the Supreme 

Court on the scope of section 502(a)(3) and create a circuit 

split to boot. Accordingly, we now join our sister circuits and 

hold that the trustee’s suit against the insurers to recoup 

amounts it paid for the beneficiaries’ medical care seeks 

legal relief, not equitable relief, and as such is not authorized 

by section 502(a)(3).

AFFIRMED.

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