2014 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-28-2014

Allen Boyle v. International Brotherhood of T

Precedential or Non-Precedential: Non-Precedential

Docket No. 12-4578

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 NOT PRECEDENTIAL 

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 12-4578

____________

ALLEN BOYLE; 

MICHAEL LUONGO,

 Appellants

v. 

INTERNATIONAL BROTHERHOOD OF TEAMSTERS 

LOCAL 863 WELFARE FUND; ADMINISTRATORS INTERNATIONAL 

BROTHERHOOD OF TEAMSTERS LOCAL 863 WELFARE FUND; 

ALPHONSE RISPOLI; BRUCE VIVADELLI; LOUIS SANCHEZ; 

DEWEY CANELLA; JOHN O'RIORDAN; DAVID MARKOWITZ

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 2-11-cv-03202)

District Judge: Honorable Stanley R. Chesler

Submitted under Third Circuit LAR 34.1(a)

on November 7, 2013

Before: GREENAWAY, JR., VANASKIE and ROTH, Circuit Judges

(Opinion filed: August 28, 2014)

O P I N I O N 

ROTH, Circuit Judge:
2

Plaintiffs Allen Boyle and Michael Luongo appeal the District Court’s denial of 

their motions for summary judgment, class certification, and attorneys’ fees, and the 

District Court’s grant of summary judgment to defendants International Brotherhood of 

Teamsters Local 863 Welfare Fund, Administrator(s) International Brotherhood of 

Teamsters Local 863 Welfare Fund, Alphonse Rispoli, Bruce Vivadelli, Louis Sanchez, 

Dewey Canella, John O’Riordan, and David Markowitz. For the reasons discussed 

below, we will affirm the District Court’s decision in part and vacate and remand in part.

I. Background

Boyle and Luongo are among a group of sixty-seven former employees (Early 

Retirees) of C&S Whole Grocers and its subsidiary Woodbridge Logistics LLP 

(collectively, C&S). The Early Retirees participated in an early retirement option, which 

included medical coverage, pursuant to a collective bargaining agreement (CBA) 

between C&S and the International Brotherhood of Teamsters Local 863. Under the 

terms of the CBA, C&S submitted payments to the Fund, which, in turn, provided the 

Early Retirees with health benefits. In February 2011, the CBA between C&S and Local 

863 expired and C&S closed all of its warehouses in New Jersey and fired 1,000 

employees. After the closing, C&S briefly ceased payments to the Fund to cover medical 

expenses for both active and former employees, including the Early Retirees. Although 

C&S resumed payments to the Fund in March 2011, the Fund did not restore health 

benefits to the Early Retirees until June 13, 2011. 

On June 3, 2011, Boyle filed suit in the United States District Court for the 

District of New Jersey on behalf of himself and similarly situated individuals, alleging 
3

that the Fund breached its fiduciary duties under the Employment Retirement Income and 

Security Act (ERISA), 29 U.S.C. § 1104, for unlawfully withholding benefits to the Early 

Retirees.1 On June 13, 2011, the Fund reinstated the benefits retroactively and later 

offered to reimburse, with interest, the Early Retirees for any substitute insurance policies 

or uncovered medical expenses. 

II. Discussion

A. Jurisdiction2

As a preliminary issue, defendants contend that Boyle and Luongo lack standing 

under Article III of the U.S. Constitution. “Constitutional standing has three elements, all 

of which must be met: (1) the plaintiff must have suffered an injury in fact; (2) there 

must be a causal nexus between that injury and the conduct complained of; and (3) it 

must be likely that the injury will be redressed by a favorable judicial decision.” Joint 

Stock Soc’y v. UDV N. Am., Inc., 266 F.3d 164, 175 (3d Cir. 2001). 

We agree with the District Court that this argument is better understood as 

invoking the mootness doctrine. After Boyle initiated suit, the Fund resumed health 

insurance for the Early Retirees and offered to reimburse the cost of any alternative 

insurance coverage and out-of-pocket medical expenses. While the doctrine of standing 

concerns whether a plaintiff is permitted to bring suit at the pleading stage, “the central 

question of all mootness problems is whether changes in circumstances that prevailed at 

 

1 On November 29, 2011, Luongo joined the case as a named plaintiff in the Amended 

Complaint.

2

The District Court had jurisdiction under 28 U.S.C. § 1132. We have jurisdiction 

pursuant to 28 U.S.C. § 1291.
4

the beginning of the litigation have forestalled any occasion for meaningful relief.” 

Jersey Cent. Power & Light Co. v. New Jersey, 772 F.2d 35, 39 (3d Cir. 1985) (internal 

citation omitted). We agree with the District Court that Boyle’s claim for breach of 

fiduciary duty is now moot. After the Fund terminated the Early Retirees’ benefits, 

Boyle purchased alternative COBRA insurance. Boyle has since accepted full 

reimbursement, with interest, from the Fund. Boyle’s claim for attorneys’ fees, however, 

is not rendered moot by the reimbursement and still stands. 

Luongo, on the other hand, has repeatedly refused the Fund’s offers of 

reimbursement. The defendants argue that the Fund’s mere offer of reimbursement is 

sufficient to moot Luongo’s claim because the Supreme Court has recently held that an 

offer of complete relief moots the claim. Genesis Healthcare Corp. v. Symczyk, 133 S.

Ct. 1523 (2013). Defendants contend that Weiss v. Regal Collections, 385 F.3d 337 (3d 

Cir. 2004), which the District Court cites to support the proposition that a full offer of 

settlement does not render moot a plaintiff’s claim, is no longer good law. Even if 

defendants are correct, the named plaintiffs in Symczyk and Weiss, unlike Luongo, were 

offered attorneys’ fees and costs, which is a disputed issue in this case. The Fund has 

made no such offer to cover attorneys’ fees. We believe that a unilateral offer of relief 

that fails to cover the entire claim does not render moot a plaintiff’s claim.

 Accordingly, we conclude that a justiciable controversy remains between Luongo 

and the defendants as to the breach of fiduciary duty claim, because of the failure to offer 

attorneys’ fees. If an offer of attorneys’ fees is made, Luongo’s whole claim will become 

moot since an offer of relief has already been made on the remainder of the claim. For 
5

the above reasons, resolution of these claims requires only an offer of reasonable 

attorneys’ fees.

B. Class Certification

Luongo argues that the District Court abused its discretion in denying his motion 

to certify a class of the sixty-seven Early Retirees deprived of health insurance from 

February 2011 until June 2011. The District Court found that class certification was 

improper because the claims did not seek declaratory or injunctive relief under Fed. R. 

Civ. P. 23(b)(2).3 We review the District Court’s denial of class certification for abuse of 

discretion. Gates v. Rohm & Haas Co., 655 F.3d 255, 262 (3d Cir. 2011). 

We hold that the District Court did not abuse its discretion in denying class 

certification. Under Rule 23(b)(2), class certification is proper if “the party opposing the 

class has acted or refused to act on grounds that apply generally to the class, so that final 

injunctive relief or corresponding declaratory relief is appropriate respecting the class as 

a whole.” Fed R. Civ. P. 23(b)(2). In Wal-Mart Stores, Inc. v. Dukes, the Supreme Court 

elucidated the application of Rule 23(b)(2), noting that it “does not authorize class 

certification when each class member would be entitled to an individualized award of 

monetary damages.” 131 S. Ct. 2541, 2557 (2011). Claims for monetary relief may not 

be certified under Rule 23(b)(2) where “the monetary relief is not incidental to the 

injunctive or declaratory relief.” Id.

 

3 Because we are persuaded that Luongo does not properly seek injunctive or declaratory 

relief as required by Fed. R. Civ. P. 23(b)(2), we do not address whether he has satisfied 

the typicality requirements under Fed. R. Civ. P. 23(a).
6

The Amended Complaint seeks the reinstatement of medical benefits and various 

forms of monetary relief, but the medical benefits have been restored. The forms of relief 

– repayment of health insurance, reimbursement of medical expenses, liquidated 

damages, compensation for unjust enrichment, interest, reasonable attorneys’ fees, and 

costs of suit – are predominantly forms of monetary damages. In addition, the monetary 

relief for each Early Retiree is individualized, based on the specific alleged harms caused 

by the lapse in health benefits. Accordingly, we will affirm the District Court’s denial of 

class certification. 

C. Summary Judgment

Next, Luongo argues that the District Court erred in granting defendants’ crossmotion for summary judgment. The District Court determined that there was no genuine 

dispute as to any material fact concerning whether the Fund breached its fiduciary duties 

under ERISA. A district court “shall grant summary judgment if the movant shows that 

there is no genuine dispute as to any material fact and the movant is entitled to judgment 

as a matter of law.” Fed. R. Civ. P. 56(a). “We exercise plenary review over a district 

court’s grant of summary judgment, applying the same standard that the district court 

should have applied.” Klein v. Weidner, 729 F.3d 280, 283 (3d Cir. 2013). 

Luongo argues that defendants breached their fiduciary duties by failing to provide 

him with health insurance or accurate information pertaining to the status of his health 

insurance. Our analysis focuses on the “prudent man” standard of care set forth under the 

fiduciary responsibility provision in ERISA. 29 U.S.C. § 1104(a). Under this provision, 

a fiduciary must discharge his duties “with the care, skill, prudence, and diligence under 
7

the circumstances then prevailing that a prudent man acting in a like capacity and familiar 

with such matters would use.” 29 U.S.C. § 1104(a)(1)(B). 

The record is undisputed that C&S ceased payments to the Fund for health 

insurance only from February 7, 2011, to March 1, 2011, but that the Fund failed to 

reinstate health insurance coverage until June 13, 2011. Luongo argues that the Fund 

refused to restore health benefits immediately because doing so would have required “a 

lot of work.” Applying the ERISA standard, we must determine whether defendants, in 

light of the circumstances then prevailing, acted “with the care, skill, prudence, and 

diligence” of a prudent man in delaying health benefits. We find that they did. 

In February 2011, the Fund was responsible for providing health benefits and 

other benefits for not only the Early Retirees, but also nearly 1,000 former C&S 

employees. After C&S’s shutdown and its initial cessation of payments to the Fund, the 

Fund struggled to sort out and allocate the various payments. The record indicates that, 

after a lapse in payment, C&S submitted five checks, many without proper identification, 

for the amounts of $330,590 on March 1, $404,340 on March 10, $75,040 on April 7, 

$75,040 on May 4, and $93,800 on June 3. When the documentation did arrive, the 

format was in a mess, and C&S used its own self-created forms that were “not 

understandable to the Fund, were not in any decipherable order, and were not compatible 

with the Fund’s systems.” The Fund was unable to determine, despite multiple inquiries 

to C&S, whether the payments were intended for the Early Retirees or for the other 1,000 

former employees of C&S or for what time period. Moreover, the timing and intervals in 

which the Fund received these payments departed drastically from prior procedure. 
8

Although C&S labeled the later checks for Early Retiree “report[s],” the Fund’s efforts to 

confirm with C&S whether the payments were for current or past amounts, or whether 

payments would continue beyond that period were unanswered.

Given the confusion and uncertainty, we agree with the District Court that the 

Fund’s decision to reinstate benefits once it could receive clarification was consistent 

with ERISA’s prudent person standard. There is no genuine dispute as to any material 

fact regarding whether the Fund breached its fiduciary duties under ERISA. Except for 

the resolution of an amount of reasonable attorneys’ fees, the District Court’s grant of 

summary judgment in favor of the defendants will be affirmed.

4

D. Attorneys’ Fees 

Finally, Luongo and Boyle appeal the District Court’s denial of their motion for an 

award of attorneys’ fees. “An award of ... attorneys’ fees to a prevailing plaintiff in an 

ERISA case is within the discretion of the district court and may only be reversed for 

abuse of discretion.” Hahnemann Univ. Hosp. v. All Shore, Inc., 514 F.3d 300, 305 (3d 

 

4 We will also affirm the District Court’s finding that the defendants did not engage in 

misrepresentations. Luongo alleges that the defendants lied to the Early Retirees. “To 

allege and prove a breach of fiduciary duty for misrepresentations, a plaintiff must 

establish each of the following elements: (1) the defendant’s status as an ERISA 

fiduciary acting as a fiduciary; (2) a misrepresentation on the part of the defendant; (3) 

the materiality of that misrepresentation; and (4) detrimental reliance by the plaintiff on 

the misrepresentation.” Burstein v. Ret. Account Plan for Empls. of Allegheny Health 

Educ. & Research Found., 334 F.3d 365, 384 (3d Cir. 2003) (internal citation and 

quotation marks omitted). The record indicates that Luongo failed to demonstrate that he 

contacted the Fund and was personally provided misleading information, that the Fund 

affirmatively provided misleading information, or that Luongo detrimentally relied on a 

misrepresentation. Luongo’s only assertion is that he was told he had no medical 

coverage because the company closed its doors. J.A. 201. The record cannot support a 

claim for breach of fiduciary duty based on misrepresentations. 
9

Cir. 2008) (internal citation and quotation marks omitted). “Our review of the legal 

standards a district court applies in the exercise of its discretion is, however, plenary.” 

Ellison v. Shenango Inc. Pension Bd., 956 F.2d 1268, 1273 (3d Cir. 1992) (citing Student 

Pub. Interest Research Grp. v. AT&T Bell Lab., 842 F.2d 1436, 1442 n.3 (3d Cir. 1998)).

“Our basic point of reference when considering the award of attorney’s fees is the 

bedrock principle known as the American Rule: Each litigant pays his own attorney’s 

fees, win or lose, unless a statute or contract provides otherwise.” Hardt v. Reliance 

Standard Life Ins. Co., 560 U.S. 242, 252-53 (2010) (internal citations and quotation 

marks omitted). Attorneys’ fees, however, may be awarded in actions brought under the 

ERISA statute, which provides that “the court in its discretion may allow a reasonable 

attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). Luongo and 

Boyle argue that the District Court incorrectly concluded that ERISA does not permit fee 

shifting under the catalyst theory, under which a plaintiff may be awarded attorneys’ fees 

if the pressure of the lawsuit caused defendant’s voluntary change of conduct. See, e.g., 

Wheeler v. Towanda Area School Dist., 950 F.2d 128, 132 (3d Cir. 1991).

Defendants cite Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & 

Human Res., 532 U.S. 598 (2001), in which the Supreme Court narrowed the use of the 

catalyst theory, finding that the defendant’s voluntary change of conduct did not establish 

the plaintiff as the “prevailing party” required for an award of attorneys’ fees under the 

FHA and the ADA. In Hardt, however, the Supreme Court held that ERISA includes no 

“prevailing party” requirement and instead vests district courts with broader discretion to 

award attorneys’ fees. 560 U.S. at 252. Although the Supreme Court did not address the 
10

catalyst theory directly, it set forth the governing standard in which the plaintiff must 

show “some degree of success on the merits” beyond a “trivial success on the merits or 

purely procedural victory.” Id. at 255 (internal citations and quotation marks omitted). 

Luongo and Boyle argue that they have achieved “some success on the merits” 

under Hardt because defendants voluntarily reinstated benefits to the Early Retirees and 

reimbursed them for any alternative coverage only after Boyle filed suit. We agree. The 

District Court erred in holding that the ERISA statute does not permit an award of 

attorneys’ fees under the catalyst theory. We hold that in light of the Supreme Court’s 

clear rejection of the “prevailing party” standard in Hardt, the catalyst theory remains 

viable under ERISA. Hardt instructs us to analyze whether Luongo and Boyle have 

achieved “some degree of success on the merits.” We believe the record adequately 

demonstrates that Luongo and Boyle are eligible for attorneys’ fees because they

achieved “some degree of success on the merits” under Hardt. 

Accordingly, we will vacate the District Court’s denial of plaintiffs’ motion for 

attorneys’ fees and remand to the District Court for further proceedings to determine a 

reasonable amount of attorneys’ fees, if any, to be awarded. 

III. Conclusion

For the foregoing reasons, we will affirm the District Court’s denial of plaintiffs’ 

motions for class certification and summary judgment, affirm the District Court’s grant of 

defendants’ cross-motion for summary judgment, and vacate and remand the District 

Court’s denial of plaintiffs’ motion for attorneys’ fees as to both Luongo and Boyle.