1

United States Court of Appeals,

Fifth Circuit.

No. 94-50089

Summary Calendar.

SELF-INSURANCE INSTITUTE OF AMERICA, INC., Plaintiff-Appellee,

v.

Claire KORIOTH, et al., Defendants-Appellants.

Sept. 15, 1994.

Appeal from the United States District Court for the Western

District of Texas.

Before SMITH, EMILIO M. GARZA and PARKER, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Claire Korioth, on behalf of the State of Texas, appeals an

award of back taxes and attorneys' fees and costs to Self-Insurance

Institute of America, Inc. ("SIIA"), stemming from the district

court's holding that TEX.INS.CODE art. 21.07-6 was preempted by the

Employee Retirement and Income Security Act of 1974, 29 U.S.C. §§

1001-1461 ("ERISA"). Concluding that the court correctly awarded

the back taxes but incorrectly assessed attorneys' fees and costs,

we affirm in part, reverse in part, and remand in part.

I.

The district court originally dismissed the case for want of

jurisdiction, but this court reversed and remanded for a review on

the merits. SIIA v. Korioth, 993 F.2d 479 (5th Cir.1993). On

remand, the district court granted SIIA's motion for summary

judgment as to the preemption issue and awarded SIIA back taxes and

attorneys' fees and costs. This appeal, as to the award only,
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follows.

II.

We review a grant of summary judgment de novo. Thomas v.

Price, 975 F.2d 231, 235 (5th Cir.1992). Summary judgment is

appropriate where the record discloses "that there is no genuine

issue as to any material fact and that the moving party is entitled

to judgment as a matter of law." FED.R.CIV.P. 56(c). In reviewing

the summary judgment, we apply the same standard as did the

district court. Waltman v. International Paper Co., 875 F.2d 468,

474 (5th Cir.1989).

A.

Korioth first asserts that the Eleventh Amendment bars SIIA's

recovery for past taxes collected by the state under art. 21.07-6.

Without reaching the issue of whether the Eleventh Amendment is

applicable to an ERISA action, we assume arguendo that it is and

conclude that the recovery of back taxes is not a retrospective

monetary award and thus is not barred by the doctrine of Ex parte

Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908).

The Young fiction—that acts of state officials that are

contrary to federal law cannot have been authorized by the state

and therefore are not subject to Eleventh Amendment immunity—has

been interpreted by the Supreme Court so as not to allow

retroactive monetary relief against a state. See Pennhurst State

Sch. & Hosp. v. Halderman, 465 U.S. 89, 102-03, 104 S.Ct. 900, 909,

79 L.Ed.2d 67 (1984). The crucial inquiry is not the magnitude of

the impact of the ruling on the state's treasury, but whether the
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impact is a "necessary result of compliance with decrees which by

their terms were prospective in nature." Edelman v. Jordan, 415

U.S. 651, 668, 94 S.Ct. 1347, 1358, 39 L.Ed.2d 662 (1974); see

also Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287

(1970) (holding that where the termination of benefits paid to

welfare recipients without a hearing violated due process, the

ancillary effect of retrospective reimbursement was a necessary

result of compliance with a prospective decree).

The Court in Edelman reversed the award of retrospective

payments because it was a form of compensation for the slower

processing of public aid applications, amounting to an award of

damages against the state. Edelman, 415 U.S. at 668, 94 S.Ct. at

1358. "It is measured in terms of a monetary loss resulting from

a past breach of a legal duty on the part of the defendant state

officials"; equitable restitution of this sort is barred expressly

by the Eleventh Amendment. Id. Payment of funds "as a necessary

consequence of compliance in the future with a substantive

federal-question determination" is constitutional. Id.

We conclude that the refund of wrongly withheld tax dollars is

not an unconstitutional award of compensatory damages, but rather

a restoration of monies that is ancillary to the prospective relief

ordered by the court. See Association of Surrogates v. New York,

940 F.2d 766, 774 (2d Cir.1991), cert. denied, --- U.S. ----, 112

S.Ct. 936, 117 L.Ed.2d 107 (1992). "The State received monies from

the ERISA plans to which it was not entitled. The funds must be

returned." E-Systems, Inc. v. Pogue, 929 F.2d 1100, 1104 (5th
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Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 585, 116 L.Ed.2d

610 (1991).

Korioth's citations to Milliken v. Bradley, 433 U.S. 267, 97

S.Ct. 2749, 53 L.Ed.2d 745 (1977), and Ford Motor Co. v. Department

of Treas., 323 U.S. 459, 65 S.Ct. 347, 89 L.Ed. 389 (1945), are

inapposite. First, the footnote from Milliken that Korioth quotes

does not support his analogy to Edelman. See Milliken, 433 U.S. at

290 n. 22, 97 S.Ct. at 2762 n. 22 ("In contrast to Edelman, there

was no money award here.... This case simply does not involve

individual citizens' conducting a raid on the state treasury for an

accrued liability."). We do not believe that the refund of

wrongfully held monies is tantamount to "a raid on the state

treasury"; rather, the injunction entered in this case "could not

instantaneously restore the victims of unlawful conduct to their

rightful condition." Milliken, 433 U.S. at 290 n. 21, 97 S.Ct. at

2762 n. 21. As such, the award of back taxes is appropriate.

Ford Motor Co. is inapplicable on procedural grounds. There,

the Court held the suit to be an action against the State of

Indiana, not against the collecting official as an individual. As

such, no Young question was involved, and the Court correctly

determined that the only litigable issue was whether the State had

consented to the suit. Ford Motor Co., 323 U.S. at 464, 65 S.Ct.

at 350-51. In contrast, Korioth has not contended that this is a

suit against the state; rather, the claim is "for the imposition

of personal liability on individual defendants for sums illegally

exacted." Id.
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In summary, assuming arguendo that the Eleventh Amendment

applies, we therefore hold that the district court's award of back

taxes to SIIA is not an unconstitutional retroactive monetary

damage assessed against the State of Texas. The action SIIA has

brought is an Ex parte Young action seeking the refund of

wrongfully withheld tax monies from the responsible individuals.

The refund of tax dollars is ancillary to the court's prospective

injunctive relief against the enforcement of TEX.INS.CODE art.

21.07-6 and thus is constitutional as assessed against the named

defendants.

B.

Korioth next contends that SIIA failed to offer any evidence

that its members administer only ERISA-governed plans, and the

court's order is, therefore, too broad. We agree with Korioth that

the Texas Commissioner of Insurance may enforce art. 21.07-6

"against third party administrators of non-ERISA governed insurance

plans, or against third party administrators of both ERISA and

non-ERISA governed plans in their capacity as administrators of

non-ERISA governed plans." NGS Am., Inc. v. Barnes, 998 F.2d 296,

300 (5th Cir.1993). Because the district court did not elicit this

information from SIIA and thus was unable to determine to what

extent any particular administrator would be exempt from state

regulation, we remand to the district court for further inquiry.

C.

Korioth also takes issue with SIIA's status as an

associational fiduciary under ERISA, 29 U.S.C. § 1132, and under
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Texas law. This issue was addressed previously by this court, and

we refuse to revisit it in this appeal. See SIIA, 993 F.2d at 484-

85 ("This finding is buttressed by that fact that under Texas state

law SIIA's members are considered fiduciaries and, thus, expressly

enumerated under § 1132.... Therefore, SIIA is properly in a

position to represent its members in a representative capacity and

has standing to do so.").

 Korioth's motion for reconsideration is not properly before

us in this appeal. As such, our prior holding that SIIA is an

associational fiduciary and has standing to sue on behalf of its

fiduciary members is binding on this appeal. To the extent,

however, that SIIA represents insurance plans that NGS Am., Inc. v.

Barnes does not exempt expressly from the auspices of art. 21.07-6,

SIIA does not have associational status to sue on behalf of those

plans.

III.

Korioth next challenges the district court's order requiring

him to pay SIIA's attorneys' fees and costs. Although Korioth does

not contest that 29 U.S.C. § 1132(g)(1) authorizes the district

court to assess attorneys' fees in ERISA actions brought by a

participant, beneficiary, or fiduciary, he alleges that SIIA is not

a fiduciary and thus is not one of the enumerated parties. We

agree and therefore reverse the award.

As Korioth points out, this court, in the previous appeal of

the jurisdictional and standing questions, held that SIIA could

maintain this suit under 28 U.S.C. § 1331 (original jurisdiction
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for district courts where actions arise under the Constitution,

laws, or treatises of the United States), notwithstanding the fact

that the suit was not authorized expressly by 29 U.S.C. § 1132 (an

ERISA provision conferring standing for participants,

beneficiaries, and fiduciaries only). SIIA, 993 F.2d at 481-84.

Furthermore, SIIA had sufficient associational standing to bring

suit because its members were expressly enumerated fiduciaries

under § 1132. Id. at 484-85. We did not say that SIIA itself was

an enumerated fiduciary, but only that its standing to sue derived

from its representative and associational capacity in relation to

its fiduciary members. Id.

Because the plain language of § 1132 authorizes the district

court to award attorneys' fees only where the suit is maintained by

a participant, beneficiary, or fiduciary, we refuse to expand the

plain meaning of § 1132 to include parties with associational

standing. We are particularly hesitant to read beyond the plain

language of a statute where the matter at issue is in direct

conflict with the prevailing common law—absent statutory language

to the contrary, the American Rule provides that each party is

responsible for its own attorneys' fees and costs. See Alyeska

Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S.Ct.

1612, 1616-17, 44 L.Ed.2d 141 (1975). Although we are aware that

each individual member could have brought suit on its own behalf

and that associational standing confers benefits by facilitating

joint action, we decline to read into § 1132 a provision that
 

1See also, AIRCO Indus. Gases, Inc. v. Teamsters Pension

Trust Fund, 668 F.Supp. 893, 905 (D.Del.1987) (refusing to extend

§ 1132 to a plaintiff suing in its capacity as an employer, not

as a fiduciary), rev'd in part on other grounds, 850 F.2d 1028

(3d Cir.1988). 

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Congress did not see fit to express.1

We are not convinced by SIIA's argument in the alternative

that the Federal Declaratory Judgment Act, 28 U.S.C. § 2201,

authorizes the award of attorneys' fees. Although we agree that

the Act authorizes fees where applicable state law would otherwise

allow them, see Mercantile Nat'l Bank v. Bradford Trust Co., 850

F.2d 215, 218 (5th Cir.1988), we disagree with SIIA that Texas

Educ. Agency v. Leeper, 1994 WL 264969, --- S.W.2d ---- (Tex. June

15, 1994), authorizes the assessment of fees against the State.

See TEX.CIV.PRAC. & REM.CODE §§ 37.001, 37.009.

In Leeper, the court authorized the award of attorneys' fees

against municipalities,

insofar as [the Texas Uniform Declaratory Judgments Act

("DJA") ] defines "person" as including municipalities,

requires municipalities to be joined in actions involving the

validity of ordinances, and allows awards of attorneys fees

and costs without any indication of an intent to exempt

municipalities.... We conclude that by authorizing

declaratory judgment actions to construe the legislative

enactments of governmental entities and authorizing awards of

attorney fees, the DJA necessarily waives governmental

immunity for such awards.

1994 WL 264969, at *12-*13, --- S.W.2d at ---- - ----.

The Texas Supreme Court's decision to hold municipalities

liable for attorneys' fees apparently stems in part from the

specific enumeration of municipalities under § 37.001. Although

the Attorney General is required to be joined in actions that
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challenge the constitutionality of statutes, TEX.CIV.PRAC. & REM.CODE

§§ 37.006, the state is not an enumerated party under § 37.001.

Furthermore, "[t]here is in § 37.009 nothing that even remotely

suggests a waiver of governmental immunity in suits brought under

the [DJA].... When such waivers are made, the Legislature does so

in relatively explicit terms." Texas Empl. Comm'n v. Camarena, 710

S.W.2d 665, 671 (Tex.App.—Austin 1986), rev'd on other grounds, 754

S.W.2d 149 (Tex.1988); see also Rodeheaver v. Steigerwald, 807

S.W.2d 790, 793 (Tex.App.—Houston [14th Dist.] 1991, writ denied)

("Attorney's fees are not recoverable against a governmental entity

under the [DJA]."), cert. denied, --- U.S. ----, 112 S.Ct. 1167,

117 L.Ed.2d 414 (1992).

Because the plain language of §§ 37.001 and 37.009 does not

include the state as a party against which attorneys' fees may be

levied, the Leeper court's decision does not extend to the state in

this action. We therefore reverse the award of attorneys' fees and

costs to SIIA.

IV.

We AFFIRM the district court's award of back taxes to SIIA but

REMAND for further consideration of the fiduciary status of SIIA's

associational members. We also REVERSE the assessment of

attorneys' fees and costs against Korioth.