UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Civil Action No. 16-2428 (TJK) JOSEPH SELLERS, JR., et al. , Plaintiffs , v. ANTHEM LIFE INSURANCE COMPANY, Defendant

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MEMORANDUM OPINION AND ORDER Plaintiffs Joseph Sellers, Jr., a nd Richard McClees serve as tr ustees of the SMART Voluntary Short Term Disability P lan (the “VSTD Plan” or “Plan” ). The VSTD Plan is an employee welfare benefit plan r egulated under the Employee Reti rement Income Security Act of 1974 (“ERISA”), Pub. L. No. 93-406, 88 Stat. 829. The Plan off ers short-term disability benefits to certain rail and bus worke rs. From January 2010 through Mar ch 2016, Defendant Anthem Life Insurance Company (“Anthem”) underwrote disability insuran ce that the VSTD Plan provided, and processed claims for benefits. Plaintiffs contend that Anthem ove rcharged the VSTD Plan for th ose insurance services. In the instant lawsuit, they bri ng claims against Anthem for vi olations of ERISA’s prohibitedtransaction provision s, as well as claims for breach of contrac t and unjust enrichment. Anthem has moved to dismiss under Federa l Rules of Civil Procedure 12( b)(1) and 12(b)(6). ECF No. 15; see also ECF No. 15-1 (“Def.’s Br.”); E CF No. 17 (“Pls.’ Opp’n”); ECF N o. 18 (“Def.’s Reply”). For the reasons set f orth below, the motion will be GRANTED IN PART and
DENIED IN PART . Plaintiffs’ ERISA claims will be dismissed for failure to st ate a claim. Plaintiffs’ claims for breach of contract and unjust enrichment , however, will be allowed to proceed.2 Factual and Procedural Background The VSTD Plan was founded in October 2009 and was originally sp onsored by the United Transportation Union (“UTU”). ECF No. 14 (“Am. Compl.”) ¶¶ 5, 7. In 2012, UTU merged into another union, the I nternational Association of She et Metal, Air, Rail, and Transportation Workers (“SMART”). Id. ¶ 8. In 2014, Plaintiffs Sellers and McClees were appointed by SMART as trustees of the VSTD Plan, taking the sea ts formerly held by two UTUappointed trustees, Malcolm Futhey (UTU’s former president) and John Lesniewski. Id. ¶¶ 10,
74. Under both UTU and SMART, the VSTD Plan has provided short-term disability benefits to plan participants, w ho work for railroad and commut er-bus companies. Id. ¶ 12. The schedule of benefits differs for rail and bus employees. Id. ¶ 13. Nonetheless, the essential features of the benefits are the same: the Plan offers short-te rm disability insurance to eligible employees, and premiums are automatically deducted from plan pa rticipants’ paychecks unless they affirmatively opt out of coverage. See id. ¶¶ 14-15. The Plan engaged Anthem to provide short-term disability insura nce to participating rail employees starting on January 1, 2010. Id. ¶ 18. The Plan paid Anthem the premiums deducted from participants’ paychecks, and Anthem underwrote the benefit s and processed claims. Id. ¶¶ 18, 22. Anthem offered its services through a series of one -year contracts. Id. ¶ 45. In 2011, Anthem, arguing that it was not being adequately compensated, s uccessfully negotiated with the Plan for higher premiums starting in 2012. Id. ¶ 31. Anthem also “separately negotiated premiums to provide [short-term disability] benefits to bus industry participants” starting in
2012. Id. ¶ 32. Plaintiffs allege that Anthem “ knowingly receiv[ed] excessive c ompensation” during the period from 2012 through 2014. Id. ¶¶ 44-45. Specifically, they a llege that the difference3 between the premiums Anthem received and the claims it paid ran ged from $3.7 million to $7.1 million during those three years, r epresenting “profit margins” of 26.2% to 49.8%. Id. ¶¶ 34-43. Plaintiffs also complain that, w hile Anthem was all too eager t o seek premium increases when its profits were supposedly low, Ant hem did not offer lower premium s when its profits were high.
Id. ¶ 44. Plaintiffs allege that Anthe m, in addition to charging unreason able premiums, also engaged in another form of misc onduct. Specifically, they alle ge that Anthem paid “kickbacks,” disguised as commissions, to a f ormer UTU employee named Edward Carney from 2010 through
2013. See id. ¶¶ 61-81. During the period i n question, Carney allegedly had “no business relationship with Anthe m or the VSTD Plan.” Id. ¶ 61. Nonetheless, Anthem allegedly paid Carney hundreds of thousands of dollars per year from the premi ums it received. Id. ¶¶ 62-65. Plaintiffs claim that Anthony Martella, who worked for a compan y that sold insurance to SMART members and “was in the p osition to steer the commission business to Carney,” helped “to orchestrate the payments fro m Anthem to Carney” (although h ow, exactly, is unclear). Id. ¶¶ 71-72. In return, Carney alleg edly passed on tens of thousa nds of dollars from the “kickbacks” he received to Martella. Id. ¶¶ 66-70, 73. Plaintiffs also allege that, in 2011, Carney “slipped $2,000 into the coa t pocket of then president o f the UTU, Malcolm Futhey,” who was also a trustee of the Plan at the time. Id. ¶ 74. Plaintiffs allege that the payments from Anthem to Carney “were not reaso nable commissions” and “increas ed, dollar for dollar, the amount of the premiums paid by VSTD.” Id. ¶¶ 77-78. After taking office as trust ees of the Plan in 2014, Plaintiffs sought to negotiate better

rates. See id. ¶ 51. Anthem responded by proposing w hat Plaintiffs character ize as a risksharing arrangement. Id. ¶ 53. Until that point, Anthem had borne the risk of loss in the event4 that claims exceeded premiums. Id. Anthem offered a deal under which Plaintiffs would pay higher premiums but receive quart erly refunds of 50% of the dif ference between premiums received and claims paid. Id. Plaintiffs evidently dislike d this proposal but claim that, s ince it was too late to consider other o ffers, they accepted it by lett er dated January 30, 2015. See id. ¶ 55 & Ex. A. Plaintiffs allege that Anthem nonetheless failed to make any of the refund payments required under the agreement. Id. ¶ 60. According to Plaintiffs, Anthem su bsequently took the view that the January 2015 letter had not caused a binding contract to form. See id. ¶ 92. Anthem sought to continue negotiating, proposing an agreement under which the refunds for 2015 and 201 6 would not be paid quarterly, but in a lump sum in 2017. See id. ¶ 57. Anthem, for its part, claims that the parties ultimatel y did reach an agreement providing for a lump sum. See Def.’s Br. at 27. Anthem has provided what it asserts is the bindi ng agreement, although it is signed only by the Plan and not by Anthem. See Def.’s Br. Ex. B (ECF No 15-3). Plaintiffs assert five counts a gainst Anthem. The first three arise under Section 406(a)(1) of ERISA, 29 U.S.C. § 1106(a)(1), a nd allege that the payments Anthem received from the Plan constituted unlawful “prohibite d transactions.” Am. Compl. ¶¶ 82-102. Count IV alleges that Anthem breached its contract with the Plan by failing to make t he quarterly refund payments that Plaintiffs claim are owed for 2015. Id. ¶¶ 103-109. Count V alleges in t he alternative that, even if there was no written contract , Anthem was obligated to make the quarterly refund payments under a theory of unjust enrichment. Id. ¶¶ 110-114. Anthem has moved to dismiss the ERISA claims under Rule 12(b)(6 ). Those claims, Anthem argues, are improper be cause they seek legal (as opposed to equitable) re lief that ERISA does not afford in this context . Def.’s Br. at 9-12. Anthem a lso argues that Plaintiffs fail to state5 a prohibited-transaction claim, and that two of the three claim s are time-barred. Id. at 12-26, 28- 30. Anthem has also moved to dismiss the two common law claims under Rule 12(b)(1). Anthem argues that it did not owe any payments until 2017, afte r this case was filed, and that as a result these claims are not ripe. See Def.’s Br. at 26-28. Legal Standard “A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of a plaintiff’s complaint; it does not require a court to ‘asse ss the truth of what is assert ed or determine whether a plaintiff has any evidence to back up what is in the complaint.’” Herron v. Fannie Mae , 861 F.3d 160, 173 (D.C. Cir. 2017) (quoting Browning v. Clinton , 292 F.3d 235, 242 (D.C. Cir. 2002)). “In evaluating a Rule 12(b)(6) motion, the Court must construe the complaint ‘in favor of the plaintiff, who must be granted the benefit of all inferences th at can be derived from the facts alleged.’” Hettinga v. United States , 677 F.3d 471, 476 (D.C. Cir. 2012) (quoting Schuler v.
United States , 617 F.2d 605, 608 (D.C. Cir. 1979)). “But the Court need not accept inferences drawn by plaintiff if those infe rences are not supported by the facts set out in the complaint, nor must the court accept legal conclusions cast as factual allegat ions.” Id. “To survive a motion to dismiss, a complaint must have ‘ facial plausibility,’ meaning i t must ‘plead[] factual content that allows the court to draw the reasonable inference that the defe ndant is liable for the misconduct alleged.’” Id. (alteration in original) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009)). On a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), “plaintiffs bear the burden of establishing jurisdiction.” Knapp Med. Ctr. v. Hargan , 875 F.3d 1125, 1128 (D.C. Cir. 2017). District courts “may in appropria te cases dispose of a motion to dismiss for lack of subject matter jurisdiction under [Rule] 12 (b)(1) on the complaint standing alone.” Herbert v. Nat’l Acad. of Scis. , 974 F.2d 192, 197 (D.C. Cir. 1992). In such cases courts must, as when reviewing a Rule 12(b)(6) motion, “accept[] as tr ue all of the factual allegations6 contained in the complaint.” KiSKA Constr. Corp. v. WMATA , 321 F.3d 1151, 1157 (D.C. Cir. 2003). The Court may also rely, “where necessary,” on “undispu ted facts evidenced in the record.” Id. at 1157 n.7. But where the Court seeks to rely “upon its own resolution of disputed facts,” it must provide an “expl icit explanation of its finding s” after affording appropriate “procedural protections” to the parties. Herbert , 974 F.2d at 197-98. While district courts “must go beyond the pleadings and resolv e any disputed issues of fact the resolution of which is necessary to a ruling upon the motion to dismiss,” Feldman v. FDIC , 879 F.3d 347, 351 (D.C. Cir. 2018) (quoting Phoenix Consulting, Inc. v. Republic of Angola , 216 F.3d 36, 40 (D.C. Cir. 2000)), the district court “should usually defer its jurisdicti onal decision until the merits are heard” if the jurisdictional facts “are inextricably intertwine d with the merits of the case.”
Herbert , 974 F.2d at 198. Analysis As explained below, the Court ag rees with Anthem that Plaintiff s fail to state a prohibited-transaction claim unde r ERISA. Therefore, the firstthree counts of the Amended Complaint will be dismissed. How ever, the Court concludes that Plaintiffs’ contract and unjust enrichment claims, as pleaded, are ripe and may proceed.
A. Prohibited-Transaction Claims The Court will examine each of Plaintiffs’ prohibited-transacti on claims (Counts I, II, and III) in turn, concluding that each should be dismissed.
1. Count I Section 406(a)(1) of ERISA prohi bits certain transactions betwe en benefit plans and “parties in interest,” a term de fined to include plan fiduciari es and persons “providing services to such plan.” See 29 U.S.C. §§ 1002(14)(A)-(B), 1106(a)(1). This provision “sup plements the fiduciary’s general duty of l oyalty . . . by categorically barr ing certain transactions deemed7 ‘likely to injure the pension plan.’” Harris Tr. & Sav. Bank v. Salomon Smith Barney Inc. , 530 U.S. 238, 241-42 (2000) (quoting Comm’r v. Keystone Consol. Indus., Inc. , 508 U.S. 152, 160 (1993)). Among the transactions pr ohibited are “furnishing of goods, services, or facilities between the plan and a party i n interest” and “transfer to . . . a party in interest, of any assets of the plan.” 29 U.S.C. § 1106(a )(1)(C)-(D). S ection 408 of ERIS A provides various exemptions to the transactions prohib ited by Section 406, and authorizes t he Secretary of Labor to institute further exemptions by regulation. See id. § 1108. Plaintiffs allege that Anthe m—merely by underwriting the insura nce that the VSTD Plan provided, processing claims for benefits, and being paid for th ese services—engaged in prohibited transactions. As neith er party disputes, those tran sactions caused Anthem to become a “party in interest,” because it was “providing services” to t he Plan. Am. Compl. ¶ 85 (citing 29 U.S.C. § 1002(14)). But under Plai ntiffs’ interpretation, thes e transactions were also prohibited because, absent an exemption, the statute prohibits “parties in interest” from either furnishing services to the Plan or receivi ng payments for those services. See id. ¶ 84 (citing 29 U.S.C. § 1106(a)(1)(C)-(D)). That is, Plaintiffs claim, the very tran sactions that caused Anthem to be a “party in interest” were prohibited because Anthem was a “party in interest.” As such, under Plaintiffs’ interpretation of the statute, ERISA categorically prohibits the provi sion of services to employee benefit plans in excha nge for compensation, absent an exemption. Anthem argues that Plaintiffs’ al legations are legally insuffic ient. In Anthem’s view, the transactions at issue—its provi sion of services to the Plan in exchange for compensation—cannot both have caused Anthem to become a party in interest and const ituted a prohibited transaction with a party in interest. See Def.’s Br. at 12-17. Rather, unde r its interpretation, “there must be a preexisting relationship betwee n the entity and plan that arose outside of the allegedly prohibited8 transactions.” Id. at 13. Plaintiffs reject that reading of the statute, and als o argue that, even if Anthem’s initialcontract with the Plan was not pr ohibited, then Anthem’s renew al of that contract was, because Anthem was already a party in interest by that point. See Pls.’ Opp’n at
15. The Court agrees with Anthem a nd concludes that Plaintiffs’ all egations are insufficient to state a claim under the stat ute. The Court will begin by ex amining Plaintiffs’ theory that ERISA prohibits all furnishing of services in exchange for comp ensation. The Court will then examine Plaintiffs’ alternative argument that ERISA prohibits t he Plan’s renewal of its contract with Anthem.

a. Whether ERISA Prohibits All Furnishing of Services in Exchange for Payment The core of the parties’ dispute is whether ERISA categoricallyprohibits all provision of services to plans in ex change for compensa tion absent an exempt ion. Section 3, the definitional section of ERISA, defines a “party in interest” as including “a ny fiduciary” of a plan and any “person providing services t o such plan.” 29 U.S.C. § 1002(14) (A)-(B). Secti on 406 prohibits “furnishing of goods, services, or facilities between the plan and a party in interest” and “transfer to, or use by or for the benefit of a party in interest, of any assets of the plan.” Id. § 1106(a)(1)(C)-(D). Neither party disputes that Anthem, by pr oviding services to the Plan (some of which also caused Anthe m to take on fiduciary responsi bilities), became a “party in interest” under Sect ion 3. Viewed in isola tion, as Plaintiffs urge, these subsections of Section 3 and Section 406 could be read to pr ohibit Anthem, a “party in i nterest,” from providing services to the Plan or being paid for those services. But the flawed nature of Plainti ffs’ interpretation becomes app arent when the Court looks—as it must—beyond the partic ular subsections they cite to the overarching text, structure9 and purpose of the statute. “[T] o prevent statutory interpreta tion from degenerating into an exercise in solipsism, [courts ] must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law.” Hearth, Patio & Barbecue Ass’n v. U.S. Dep’t of Energy , 706 F.3d 499, 504 (D.C. Cir. 2013) (first alteration in origi nal) (quoting Cty. of L.A. v.
Shalala , 192 F.3d 1005, 1014 (D.C. Cir. 1999)). The Court starts with the text of Section 406(a)(1), which cate gorically pr ohibits five types of transactions: A fiduciary with respect to a pl an shall not cause the plan to engage in a transaction, if he knows or should know that such transaction constitutes a direct or indirect— (A) sale or exchange, or l easing, of any property between the plan and a party in interest; (B) lending of money or other extension of credit between the plan and a party in interest; (C) furnishing of goods, services, or facilities between the plan and a party in interest; (D) transfer to, or use by or for the benefit of a party in interest, of any assets of the plan; or (E) acquisition, on behalf of the plan, of any employer security or employer real pr operty in violation of section 1107(a) of this title. 29 U.S.C. § 1106(a)(1). As the text of Section 406(a)(1) shows, Congress drew a distinc tion between prohibiting certain transactions with anyone , and prohibiting those transactions with a party in interest. Subsection (E) is the first ki nd of prohibition: it prohibits p lans from acquiring employer securities (that is, securities “issued by an employer of emplo yees covered by the plan,” 29 U.S.C. § 1107(d)(1)), under certain conditions, from anyone . Subsections (A) through (D), by contrast, are more limited. The y do not categorically prohibit plans from engaging in certain10 types of transactions wit h any person or entity. They do not, for example, prohibit the “furnishing of services to the pl an in exchange for compensatio n,” full stop. Rather, they only prohibit such transactions with “a party in interest.” If this limitation is to be given any meaning, Subsections (A) through (D) cannotbe read to categorically pro hibit the very transactions that cause a person to obtain the status of a party in interest. Ot herwise, Subsecti ons (A) through (D) would be just like Subsection (E) : they would prohibit plans fr om engaging in certain forms of economic activity with anyone , regardless of that person or e ntity’s relationship to the plan. Therefore, Section 406(a)(1) does not admit of Plaintiffs’ inte rpretation, which is, as another court has observed, grounde d in circular reasoning: the transactions were prohibited because Anthem was a party in i nterest, and Anthem was a party in interest because it engaged in the prohibited transactions. See Sacerdote v. N.Y. Univ. , No. 16-cv-6284 (KBF), 2017 WL 3701482, at *13 (S.D.N.Y. Aug. 25, 2017). R ather, the statute only prohibits such service relationships with persons who a re “parties in interest” by vir tue of some other relationship—for example, with the employer who sponsors the plan. It does not prohibit a plan from paying an unrelated party, dealt with at ar m’s length, for services rende red. A close reading of ERISA’s exemp tions from these prohibitions f urther confirms that Plaintiffs’ reading of Section 406(a)(1) is untenable. For example, Plaintiffs’ reading fits poorly with the exemption codified by S ection 408(b)(5). That exempti on provides that plans may purchase life insurance, health i nsurance, and annuities from alicensed insurer if (i) “no more than adequate consideration” is paid and (ii) the insurer is th e employer sponsoring the plan (or one of certain other intere sted entities). 29 U.S.C. § 1108(b) (5). If all furnishing of insurance services in exchange for payme nt were prohibited, as Plaintiffs claim, then prong (ii) of this exemption would make no sense: why exempt only insurers that have a cl ear conflict of interest,11 allowing them to sell insurance for “no more than adequate cons ideration,” while completely prohibiting contracts with other , disinterested insurers? This exemption makes perfect sense, however, if Congress was specifi cally concerned that Section 40 6(a)(1) might steer plans away from prohibited (but potentially e fficient) transactions with i nterested insurers, particularly employers that are insurers, a nd toward nonprohibited (but pote ntially less effici ent) transactions with insurers that are no t parties in interest. 1 Accordingly, Congress authorized the otherwise prohibited dealings with those in terested insurers, provided th at plans pay “no more than adequate consideration”—a saf eguard plans do not need when contracting with disinterested insurers. Similarly, Section 408(b)(6)’s ex emption underscores the conclu sion that Plaintiffs’ reading is not sustainable. Tha t exemption covers “any ancillary service by a bank,” but only if that bank is a fiduciary. 29 U.S .C. § 1108(b)(6). Such “ancil lary services” may be offered only for reasonable compensation and if accompanied by certain other safeguards. See id. Under Plaintiffs’ reading, this exem ption would be meaningless becaus e the core service provided by the bank—that is, the service th at caused the bank to become a fiduciary—would remain prohibited. Banks would never have occasion to provide “ancill ary” services, because they would be prohibited from providing the antecedent core service. But Section 408(b)(6) makes perfect sense if Section 406(a)(1 ) allows the fiduciary to prov ide one service to the plan (and

1 This reading is confirmed by ERI SA’s legislative history. The conference report explains that, “if the employer is an insure r qualified to do business in a St ate (or the District of Columbia),” then “it would be contrary to norma l business practice to requi re the plan of an insurance company to purchase its insurance from another insurance compan y.” H.R. Rep. No. 93-1280, at 314 (1974) (Conf. Rep.), as reprinted in 1974 U.S.C.C.A.N. 5038, 5094.12 thereby to become a party in i nterest) and prohibits only the f urnishing of other, additional services. 2 Plaintiffs’ reading also frustrates the well-accepted purpose o f both Section 406(a)(1) and the statute as a whole. Secti on 406(a)(1) is intended to “proh ibit certain transactions that ‘generally involve uses of pla n assets that are potentially har mful to the plan.’” Danza v. Fidelity Mgmt. Trust Co. , 533 F. App’x 120, 125 (3d Cir. 2013) (quoting Lockheed Corp. v. Spink , 517 U.S. 882, 893 (1996)). That is, it prohibits “commercial barga ins that present a special risk of plan underfunding because they are struck with plan insiders, p resumably not at arm’s length.”
Lockheed , 517 U.S. at 893. And the Supreme C ourt has cautioned againstextending Section 406(a)(1) to prohibit transactions that “cannot reasonably be s aid to share that characteristic.” Id. Contracting at arm’s length with unrelated service providers pl ainly does not share that characteristic: it is not a deal struck with “plan insiders.” And prohibiting such contracts would make little sense, as it would turn Section 406(a)(1) into “a s tatutory provision that proscribes [a] retirement pension plan’s most basic operations.” Sacerdote , 2017 WL 3701482, at *14. Indeed, Plaintiffs’ interpretati on is “potentially harmful” to plans because it discourages service providers from contracting with them in the first place. A cha nge of heart (or leadership) could easily inspire plans to claim tha t the service provider’s barga ined-for compensation was unreasonable, and because the Section 408 exemptions are genera lly considered to be affirmative

2 Here too, the legislative histor y confirms this reading of the statute. In dis cussing this exemption, the conference report not es that “generally a fiduci ary is not to be able to provide

‘ multiple services ’ to a plan” absent an exe mption. H.R. Rep. No. 93-1280, at 31 4 (1974) (Conf. Rep.) (emphasis added), as reprinted in 1974 U.S.C.C.A.N. 5038, 5095; see also 120 Cong. Rec. 29,932 (1974) (statement of Sen. Harrison A. Williams) (explaining the need f or exemptions where “a fiduciary also provides other services to a plan” (emphasis added)), as reprinted in 1974 U.S.C.C.A.N. 5038, 5187. As this implies, ERISA does not prohibit a fiduciary from providing a single service.13 defenses, service providers woul d be unable to ward off such la wsuits until after costly discovery, at the earliest. See id. at *13. The potential for stri ke suits would serve only to narrow the pool of available se rvice providers, ultimately to t he detriment of ERISA plans. These considerations confirm wha t the entire text and structure of the statute compel: that a plaintiff cannot allege a prohi bited transaction merely by clai ming that the defendant provided services to an ERISA plan in excha nge for bargained-for conside ration. 3 The reading proposed by Plainti ffs would also create a conflictbetween ERISA’s prohibited-transaction provisions and widely accepted law conce rning the setting of fiduciary compensation. While the D.C. Cir cuit has not yet addressed the issue, other circuits have concluded that ERISA does not generally impose a duty on plan f iduciaries relating to the setting of their compensation. See Abraha v. Colonial Parking, Inc. , 243 F. Supp. 3d 179, 185-86 (D.D.C. 2017) (collecting cases) . That is, if a plan fiduciarynegotiates the terms of its compensation with the plan at arm’s length, and then adheres to those terms, its receipt of that compensation is unrelated to its f iduciary role and thus cannotbe in breach any of its fiduciary

3 Plaintiffs argue that the Depa rtment of Labor has taken a diff erent view, quoting the following language from a Department of La bor regulation: “[A] service re lationship between a plan and a service provider would constitute a prohibited transaction, bec ause any person providing services to the plan is defined by ERISA t o be a ‘party in interest’ to the plan.” Reasonable Contract or Arrangement Under Secti on 408(b)(2), 77 Fed. Reg. 5632, 5632 (F eb. 3, 2012). As an initial matter, it is not at all clea r that this passing comment, found in a regulation relating to the exemption for service contract s in Section 408(b)(2) of ERISA, represents the Department of Labor’s considered interpretati on of the prohibited-transactionprovisions of Sec tion 406(a)(1). Even if it did, however, the Court would not defer to the Department’s interpretation, because— as explained above—no ambiguity on this point remains after con sidering ERISA’s “text, structure, purpose, and legislative history.” Loving v. IRS , 742 F.3d 1013, 1016 (D.C. Cir. 2014) (quoting Pharm. Research & Mfrs. of Am. v. Thompson , 251 F.3d 219, 224 (D.C. Cir. 2001)).14 duties. See id. 4 Plaintiffs’ theory would eff ectively unravel this rule: becau se fiduciaries are “parties in interest,” plans could always seek to claw back fid uciaries’ compensation under Section 406(a)(1). Finally, it bears noting that the Court’s reading of the statut e does not render toothless ERISA’s inclusion of service prov iders as parties in interest. For example, a prohibited transaction does occur when a service provider receives payments beyond its bargained-for compensation with the plan. In particular, a plan’s fiduciarie s may not improperly benefit a service provider with unauthorized or sham payments. See Lockheed , 517 U.S. at 895 n.8. Courts have thus found that attorn eys engage in prohibited tran sactions when they obtain loans from ERISA plans they represent, Nieto v. Ecker , 845 F.2d 868, 873 (9th Cir. 1988) , or are “paid for services they did not render,” Concha v. London , 62 F.3d 1493, 1503-04 (9th Cir. 1995) (citing Nieto ). See also Braden v. Wal-Mart Stores, Inc. , 588 F.3d 585, 590, 600-01 (8th Cir. 2009) (plan trustee allegedly recei ved “kickbacks” from mutual funds in exchange for their inclusion in plan ’s 401(k) program). 5 But Count I is not based on any s uch allegation—rather, it is based purely on Anthem’s receipt of bargained-for considerat ion as a service provider. See

4 Of course, if a fiduciary has the ability to change its own co mpensation, its exercise of that ability does implicate its fiduciary duties. See Abraha , 243 F. Supp. 3d at 186. That nuance, however, is not relev ant to this case.

5 Some language in Braden provides support to Plaintiffs ’ reading of the statute. See 588 F.3d at 600-01. Nonetheless, the Court interprets Braden to stand for the less sweeping proposition for which it is cited above. Braden involved “kickback” payments alleged not to have been bona fide compensation for services rendered. See id. at 590. Indeed, the implication in that case was that the trustee had, in its fiduc iary capacity, exercised control over its own compensation through the alleged kickback scheme. See Laboy v. Bd. of Trs. of Bldg. Serv. 32 BJ SRSP , 513 F. App’x 78, 80 (2d Cir. 2013) (interpreting Braden as based on the plan tru stee’s alleged selfdealing); Sacerdote , 2017 WL 3701482, at *14 (similar). Moreover, Braden only addressed fiduciary liability, not the circumstances under which a servic e provider could be held liable in a nonfiduciary capacity. See 588 F.3d at 600-01.15 Am. Compl. ¶¶ 85-87. Plaintiffs do make such allegations in Co unt III, which concerns the alleged payments to Carney and is discussed below. Although few courts have analyzed this interpretive question indepth, the Court’s conclusion is in accord with the weight of the authority on poi nt. Indeed, the Court has identified only one circuit-level decision that squarely addres ses this issue, an unpublished Third Circuit decision that similarly accepts Anthem’s interpretation of the statute. Danza , 533 F. App’x at 125-26. There is also a published Eighth Circuit deci sion that offers some support for Plaintiffs’ interpretation, a lthough, as explained above, that case is distinguishable. Braden , 588 F.3d at 600-01; see supra note 5. In addition, there are afew unpublished district cou rt opinions that support Plaintiffs’ interpretation. Divane v. Nw. Univ. , No. 16-cv-8157, 2018 WL 2388118, at *10 (N.D. Ill. May 25, 2018); Comerica Bank for DALRC Retir ee Benefit Tr. v. Voluntary Emp. Benefits Assocs., Inc. , No. 1:09-cv-1164 (WSD), 2012 WL 12948705, at *18 & n.27 (N.D. Ga. Jan. 11, 2012); Ronches v. Dickerson Emp. Benefits, Inc. , No. 2:09-cv-4279 (MMM) (PJWx), 2009 WL 10669571, at *17- 18 (C.D. Cal. Oct. 30, 2009). The weight of authority, however, appears to support Anthem’s reading. Patrico v. Voya Fin., Inc. , No. 16-cv-7070 (LGS), 2018 WL 1319028, at *7 (S.D.N.Y. Mar. 13, 2018); Cunningham v. Cornell Univ. , No. 16-cv-6525 (PKC), 2017 WL 4358769, a t *10 (S.D.N.Y. Sept. 29, 2 017); Sweda v. Univ. of Pa. , No. 16-cv-4329, 2017 WL 4179752, at *11 (E.D. Pa. Sept. 21, 201 7); Sacerdote , 2017 WL 3701482, at *13-14; Fite v. Merrill Lynch & Co , No. 8:10-cv-008 (DOC) (ANx), 2010 WL 11556808, at *7 (C.D. Cal. Nov. 2, 2010); UFCW Local 56 Health & Welfare Fund v. Brandywine Operating P’ship, L.P. , No. 05-cv-2435 (JEI), 2005 WL 3555390, at *2-4 (D.N.J. Oct. 28, 2005).16 For these reasons, the prohibite d-transaction claim in Count I must be dismissed. The only “transaction” alleged is th at Anthem insured the short-ter m disability benefits for the Plan’s participants. And Ant hem, like all insurers, made money by col lecting more in premiums than it paid in claims. That is not aprohibited transaction under ERI SA.
b. Whether ERISA Prohibits the VSTD Plan’s Renewal of its Contract with Anthem Plaintiffs claim that, even if the foregoing analysis is true, it does not warrant dismissal of Count I because Anthem engaged in additional transactions with the Plan after becoming a party in interest that: (1) renewed t he contract at higher rates effe ctive on January 1, 2012, and (2) expanded its insurance coverage to include bus workers in addit ion to rail workers, also effective on January 1, 2012. See Pls.’ Opp’n at 11-13. But on exa mination, neither of these th eories alters the analysis set forth above. Plaintiffs’ first theory is that Anthem’s renewal of the contra ct is a prohibited transaction even if the original contract is not. See id. at 11. This theory, however , suffers from the same flaw discussed above. But for the renewal agreement, Anthem wo uld have ceased to be a party in interest at the end of the i nitial contract. Therefore, Pla intiffs seek, once again, to prohibit the same transactions that caused A nthem to be a party in interest. This theory appears to respond t o cases holding that the absenc e of a “prior relationship” meant there was no prohibited transaction. Fite , 2010 WL 11556808, at *7; see also Danza , 533 F. App’x at 125 (no prohibited tra nsaction where the defendant “was not a party in interest at the time the [relevant agreement] was signed”). But the “prior rel ationship” formulation is imprecise. ERISA does not necessarily prohibit plans from deal ing with persons they have dealt with previously. This is appare nt from the definition of “party in interest,” which includes persons “providing services” to the plan but not persons who “h ave provided” such services in17 the past. See 29 U.S.C. § 1002(14). Nor does S ection 406(a)(1) prohibit the plan from “negotiating” or “signing” servi ces contracts with parties in i nterest. Rather, what it prohibits is the performance of those contracts: the “ furnishing of goods, services, or facilities between the plan and a party in interest, ” 29 U.S.C. § 1106(a)(1)(C) (empha sis added), and the “transfer” of plan assets to pay for them, id. § 1106(a)(1)(D). 6 Because the performance of a renewal contract typically occurs after the initial contract ends, and thus after the service provider has ceased to be a party in interest by virtue of the initial contract, signing the renewal contract does not cause a prohibited transaction to occur. And neither does performance of the renewal contract, since (as explained above) the furnishi ng of services to a plan cannot bo th cause the service provider to be a party in interest and constitute a prohibited transaction und er Section 406(a)(1). Again, ERISA’s purpose and structure confirm what its text prov ides. Prohibiting the renewal of agreements with ser vice providers who have no other relationship to the plan would do nothing to prevent “sweetheart deals” of the type Congress s ought to avoid. Fite , 2010 WL 11556808, at *7. Such a rule would, however, encourage service providers to lock ERISA plans into long-term contracts, something that ERISA is generally und erstood to discourage. See
Comerica Bank , 2012 WL 12948705, at *18 n.27 (“[T]he l egislative history rev eals Congress was specifically concerned with the danger that a Plan would be come locked into a long-term, disadvantageous service contract , and thus the DOL regulations define such contracts as unreasonable.”). 7 In light of all of the above, Pla intiffs’ first theory does n ot save their claim.

6 For this reason, the Court disagr ees with a prior district court case that, failing to appreciate this nuance in the statutory text, he ld that renewals do constitute prohibited transactions. See Brock v. Gerace , 7 Empl. Benefits Cas . (BNA) 1713, 1715-16 (D.N.J. 1986).

7 Interpreting ERISA to prohibit contract renewals would also co nflict with widel y-accepted law concerning the setting of fiduciary compensation, which holds t hat plan fiduciaries may freely18 Plaintiffs’ second theory is t hat the Plan engaged in a prohibi ted transaction when it expanded the scope of Anthem’s se rvices to cover short-term dis ability insurance for bus workers in addition to rail workers. See Pls.’ Opp’n at 11. This theory also fails. Plaintiffs’ second theory effec tively posits that, even if Anth em’s initial provision of insurance to rail workers was not prohibited because that trans action was what caused Anthem to become a party in interest, Anthem’s provision of insurance to bus workers was a separate transaction, one prohibited by Sec tion 406(a) because Anthem wa s already a party in interest by virtue of the rail-worker insur ance. The Court has identified only one potential basis for this theory in the statute: a prohi bition, suggested by ERISA’s stru cture and legislative history, against providing “multiple serv ices” to a plan. As discussed above, the exemption in Section 408(b)(6) suggests th at, while fiduciary banks can provide one service to a plan, they cannot provide additional, ancillary services to that plan absent an e xemption. See supra pp. 11-12. ERISA’s legislative history sim ilarly suggests that fiduciaries cannot simultane ously provide “multiple services” that are qualitatively different. See supra note 2; see also H.R. Rep. No. 93- 1280, at 309 (1974) (Conf. Rep.), as reprinted in 1974 U.S.C.C.A.N. 5038, 5090 (stating that “brokerage houses” would be proh ibited from providing “both dis cretionary investment management and brokerage services to the same plan”). But even assuming that a “multiple services” claim is cognizabl e under Section 406(a)(1), it cannot be based on a c hange in the quantity of a single service provided. That would require interpreting Sec tion 406(a)(1) to mean that, beca use a service provider has furnished a certain amount of a service at a previous point in time, it cannot now furnish a

negotiate their compensation p rovided they do so at arm’s length. See supra pp. 13-14. Courts applying this law do not appear to treat renewals differently f rom initial agreements. See, e.g. , Schulist v. Blue Cross of Iowa , 717 F.2d 1127, 1129-30, 1132 (7th Cir. 1983).19 greater amount of that service . Nothing in ERISA’s text, struc ture, purpose, or legislative history suggests that result. To the contrary, as already explained, E RISA’s prohibition against transactions with service provi ders is not based on prior relat ionships. The fact that a service provider previously furnished adifferent amount of the service in question is simply not relevant under Section 406(a)(1). Rather , unless one accepts Plaintiffs ’ flawed and circu lar reading of the statute, what matters is whether the service provider, at the t ime it is furnishing t hat service, has a separate relationship with the pl an that makes it a party in in terest. Under the “multiple services” theory, such a separate relations hip would exist if the service provider were simultaneously furnishing a different service of a fiduciary nature. But it i s not enough to furnish a single service, even if the quantity changes over time. Plaintiffs’ second theory fails because it rests on just such a quantitative change, not any allegation that Anthem simultaneously provided two qualitativel y different services to the Plan. Plaintiffs claim that Anthem, wh en it renewed its contract withthe VSTD Plan for the 2012 calendar year, agreed t o provide the same type of insurance to a larger number of Plan participants. The only alleged di fference between the insuranc e offered to rail and bus employees is that each had a diffe rent “schedule of benefits” a nd different premiums. Am. Compl. ¶¶ 13, 32. The renewal thus left unchanged the nature o f the services furnished: insuring plan participants’ short-term disability benefits. Indeed, Pla intiffs themselves describe this change as merely having “increas e[d] the scope of [Anthem’s] se rvices.” Pls.’ Opp’n at 11. In sum, Plaintiffs’ two alternativ e theories cannot save their claim. These theories ultimately rest on the same flawe d interpretation of Section 40 6(a)(1): that Anthem, by providing disability insurance to the Plan, both became a service provide r to the plan and engaged in a prohibited transaction. Therefor e, Count I must be dismissed.20 2. Count II Count II alleges that Anthem’ s receipt of premiums for the 2015 calendar year was a prohibited transaction because it falls outside the scope of th e exemption in Section 408(b)(2), which covers “[c]ontracting or m aking reasonable arrangements” for necessary services “if no more than reasonable compensati on is paid therefor.” 29 U.S.C. § 1108(b)(2). Specifically, Count II asserts that Section 408(b) (2) “requires the existence of a contract or written agreement,” meaning that Anthem cannot rely on Section 408(b)(2 ) if it is right that there was no binding contract in place at the time. See Am. Compl. ¶¶ 92-93. This count appears to be pleaded in the alternative to Pla intiffs’ breach of contract cl aim (Count IV), which alleges that there was a binding contract in place at the time. See id. ¶ 106. Count II effectively relies on the same theory as Count I to ex plain why the payments to Anthem were prohibited under S ection 406(a)(1): that Anthem was a service provider and thus a party in interest. See id. ¶ 93. Count II simply offers adifferent reason why, in Plain tiffs’ view, those transactions fail to qua lify for the exemption in Section408(b)(2): while Count I asserts that Anthem cannot rely on the e xemption because its compensati on was unreasonably high, see id. ¶¶ 87-90, Count II asserts th at the exemption does not apply b ecause Anthem received its compensation outside the scope of a binding contract, see id. ¶¶ 92-95. But whether an exemption applies is irrelevant un less there is a prohibited tr ansaction. See, e.g. , Nat’l Sec. Sys.,
Inc. v. Iola , 700 F.3d 65, 98 (3d Cir. 2012) (explaining that ERISA’s exemp tions do “not create independent affirmative duties”) . Because Count II is entirely derivative of the prohibitedtransaction theory in Count I, i t must be dismissed for the sam e reasons set forth above.
3. Count III Count III is different from Counts I and II: it arises from the payments made through Anthem to Carney. The Court conc ludes that this claim fails as well, but for a different reason:21 assuming that Plaintiffs do properl y allege that prohibited tra nsactions occurred, they provide no basis for recovery from Anthem because it did not retain the pr oceeds of these transactions, nor have Plaintiffs sufficiently plead ed that Anthem otherwise prof ited from them. Plaintiffs allege that Anthem pa id “kickbacks” in the form of c ommission payments to Carney, who was not actually provi ding “broker services” as he apparently claimed. Am. Compl. ¶ 79. These payments may h ave constituted prohibited tr ansactions on the theory that they were “sham” compensation f or services not actually rendere d. See supra pp. 14-15. Moreover, Plaintiffs claim th at, on at least one occasion, Carn ey passed some of this money on to Futhey, the VSTD Plan trust ee who allegedly caused the trans actions to occur. See Am. Compl. ¶ 74. Thus, the transacti ons could also potentially con stitute prohibited fiduciary selfdealing. See 29 U.S.C. § 1106(b); Iola , 700 F.3d at 97. Plaintiffs assert t hat the transactions were in fact prohibited and that Anthem should be required to d isgorge the full amount of the Carney payments. Am. Compl. ¶ 100. In order to recover that amount , however, Plaintiffs must show that the payments to Carney—or profits or proceeds deriving from them—remain in Anth em’s possession. Plaintiffs seek to hold Anthem liable as a nonfiduciary participant in pro hibited transactions. See Am. Compl. ¶ 97; Pls.’ Opp’n at 7-9. S uch liability arises from Se ction 502(a)(3) of ERISA, which authorizes suits for “appropriate equitable relief.” 29 U.S.C. § 1132(a)(3). And such relief consists of “restitution of the [unlawfully obtained] property (if not already disposed of) or disgorgement of proceeds (if a lready disposed of), and disgorge ment of the third person’s profits derived therefrom.” Harris Trust , 530 U.S. at 250; see also Montanile v. Bd. of Trs. of Nat’l Elevator Indus. Health Benefit Plan , 136 S. Ct. 651, 658 (2016) (holding equitable recovery under ERISA extends only to funds in defendant’s possession and traceable to the unlawfully22 obtained assets); Great-West Life & Annuity Ins. Co. v. Knudson , 534 U.S. 204, 215 (2002) (explaining that Harris Trust established an equitable remedy for “specific property (or its proceeds) held by the defendant”). A t a minimum, Plaintiffs mu st allege that Anthem profited or earned some other benefit from t he Carney payments that it can be required to disgorge. See Spear v. Fenkell , No. 13-cv-2391, 2016 WL 5661720, at *31-34 (E.D. Pa. Sept. 30 , 2016) (discussing potential availability of accounting and disgorgeme nt as equitable remedies after
Montanile ). In this case, Anthem plainly ha s not retained the allegedly unl awful payments themselves—it passed them on t o Carney. Plaintiffs have in fac t affirmatively alleged that Anthem did not retain any porti on of the payments. They claim that the “payments to Carney increased, dollar for dollar, t he amount of premiums paid by VS TD,” and that Anthem’s premiums declined by the exact a mount of Carney’s commission wh en those payments ceased. Am. Compl. ¶ 78. And while Plainti ffs argue that profits can b e recovered in equity even if they are not directly traceable to the prohibited transactions, see Pls.’ Opp’n at 20, Plaintiffs have not provided any basis to conclude t hat Anthem’s profits resulted d irectly or indirectly from the Carney payments. Plaintiffs do allege, in conclus ory fashion, that Anthem benefi ted insofar as the “commission payments allowed Anthem to secure the business of p roviding [short-term disability] benefits to the Plan.” Am . Compl. ¶ 97. But the A mended Complaint is devoid of any concrete facts that explai n or support th is allegation. Ra ther, in Plaintiffs’ telling, Anthem served as nothing more than a middleman passing along payments orchestrated by others, including Futhey, who chose Carn ey to receive the payments. See id. ¶¶ 72, 74, 78. And Anthem continued to receive the VSTD Plan’s business long after the payments to Carney23 ended. See id. ¶¶ 59, 61. There are, of course, c ases where a kickback schem e draws the legitimacy of an entire c ontract into question. See, e.g. , Stuart Park Assocs. Ltd. P’ship v.
Ameritech Pension Tr. , 51 F.3d 1319, 1325-26 (7th Cir. 1995). B ut Plaintiffs have n ot adequately alleged Anthem’s partic ipation in a scheme that tain ted its entire contract with the Plan, such that it was not an a rm’s-length bargain. The Court notes that Carney (a former UTU employee) is not alleged to have be en a party in interest to th e VSTD Plan; nor is his alleged coconspirator, Martella (who sold i nsurance products to SMART mem bers). See Am. Compl. ¶¶ 61, 71. Plaintiffs thus fail to e xplain how the payments to Carney amounted to “kickbacks,” in the sense of corrupt payment s to Plan insiders. The one exc eption is the alleged $2,000 payment from Carney to Futhey, the only true “kickback” alleged in the complaint. See id. ¶ 74. However, there is no allegati on that Anthem caused, knew about, or had reason to know about the payment to Futhey. See id. Therefore, the allegations i n the complaint do not implicate any of the premiums that Anthem actually retained. Finally, Plaintiffs argue that th e availability of equitable re lief is often a factual issue not fit for resolution on a motion to dismiss. See Pls.’ Opp’n at 21-22. Buthere, Plaintiffs’ own pleadings establish that the f unds they seek are not recoverabl e from Anthem in equity; rather, Plaintiffs seek legal relief from Anthem’s general assets. The refore, Plaintiffs’ claim can be resolved on a motion to dismiss. See Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Gerber Life Ins. Co. , 771 F.3d 150, 159-60 (2d Cir. 2014). In short, while Plaintiffs have a lleged that Anthem served as aconduit for improper payments, they cannot recover thos e funds from Anthem because i t no longer has them or any proceeds or profits relating t o them. Therefore, Count III mus t be dismissed.24 B. Contract and Unjust Enrichment Claims The Court disagrees with Anthem , however, that Plaintiffs’ cont ract claims are unripe. “‘The ripeness doctrine generall y deals with when a federal court can or should decide a case,’ and has both constitutional and prudential facets.” Perry Capital LLC v. Mnuchin , 864 F.3d 591, 632 (D.C. Cir. 2017) (citation omitted) (quoting Am. Petrol. Inst. v. EPA , 683 F.3d 382, 386 (D.C. Cir. 2012)). “Ripeness ‘share s the constitutional requir ement of standing that an injury in fact be certainly impending.’” Id. (quoting Nat’l Treasury Emps. Union v. United States , 101 F.3d 1423, 1427 (D.C. Cir. 1996)). In gene ral, “claims for bre ach of contract ‘cannot be described as premature since th ey speak of damages that have al ready been suffered and are being suffered.’” RDP Techs., Inc. v. Cambi AS , 800 F. Supp. 2d 127, 135 (D.D.C. 2011) (quoting Casanova v. Marathon Corp. , 256 F.R.D. 11, 15 (D.D.C. 2009)). Here, Anthem claims that the Plan has not yet suffered any injury related to its contract claims, because the refund payments that Anthem owes the Plan h ave not yet come due. See Def.’s Br. at 27-28. In support of t his contention, Anthem att aches a contract executed by the Plan (but not by Anthem) under wh ich the refund payment would n ot be due until March 2017, after this lawsuit was filed, “at the earliest.” See id. & Ex. B. Anthem accuses Plaintiffs of mischaracterizing the agreemen t, and claims that the Court can properly consider the text of the contract in deciding th is motion to dismiss. See id. at 27 & n.8. Anthem’s argument fails because, under Plaintiffs’ theory, the alleged breach of contract has already occurred. Plaintiffs allege that, after months of negotiations, the Plan accepted Anthem’s terms for coverage in 2015 by a letter dated January 3 0, 2015, attached as Exhibit A to their complaint. See Am. Compl. ¶¶ 104-106 & Ex. A. The letter purports to memoria lize the “Trustees’ understanding tha t . . . the amount of the 50% shari ng would be transferred to [the Plan] quarterly.” See id. Ex. A. Plaintiffs further allege that Anthem failed to make these25 quarterly payments when required. See id. ¶ 108. And Plaintiffs speci fically dispute that the contract attached by Anthem to its motion to dismiss represents the binding agreement between the parties. See Pls.’ Opp’n at 27. Thus, Anthem has merely raised a factual d ispute over which document represents the parties’ binding agreement, and Plainti ffs have pleaded a claim for breach of contract that is ripe. Plaintiffs’ claim for unjust enrichment—which they plead in the alternative on the assumption that there was no binding contrac t—is ripe for similar reasons. Therefore, Anthem’s motion to dismiss Counts IV and V will be d enied.
Conclusion and Order For all of the above reasons, Anthem’s motion to dismiss (ECF N o. 15) is GRANTED
IN PART and DENIED IN PART . Counts I, II, and III of Plaintiffs’ Amended Complaint are
DISMISSED for failure to state a claim on wh ich relief can be granted. C ounts IV and V, however, may proceed.

SO ORDERED. /s/ Timothy J. Kelly TIMOTHY J. KELLY United States District Judge Date: June 6, 2018