UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

SECRETARY OF LABOR,

Plaintiff, 

v.

MACY’S, INC., et al.,

Defendants.

Case No. 1:17-cv-541

JUDGE DOUGLAS R. COLE

OPINION AND ORDER

This matter comes before the Court on Plaintiff Secretary of Labor’s (the 

“Secretary”) Motion for Reconsideration (the “Motion”) (Doc. 52). For the reasons 

discussed below, the Court DENIES the Motion. 

BACKGROUND1

This is an ERISA action. On August 16, 2017, the Secretary sued Macy’s, Inc. 

and the Macy’s, Inc. Welfare Benefits Plan (together “Macy’s,” except where 

addressed separately), along with two third-party administrators of the benefits plan.

(See Compl., Doc. 1). Two weeks later, the Secretary filed his Amended Complaint 

(Doc. 4), the currently operative complaint. The allegations at issue here concern 

Macy’s Tobacco Surcharge Wellness Program (TSWP), which is an aspect of the 

benefits plan. Under the terms of the TWSP, employees who used tobacco products 

were required to pay a surcharge (the “tobacco surcharge”) for their health benefits 

1 The Court has extensively summarized the factual allegations and procedural background 

of this case in its previous Opinion (Doc. 47). The factual background discussion here is thus

limited to the relatively narrow issue before the Court now.

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under the plan. In relevant part, the Amended Complaint alleges that, during Health 

Plan Years 2011–2013, Macy’s failed to include a reasonable alternative standard for 

employees who could not meet the primary requirements to avoid the tobacco 

surcharge (for example, by being tobacco-free). (See Am. Compl., Doc. 4, #65).

According to the Amended Complaint, the lack of such an alternative meant that 

Macy’s operated a discriminatory wellness program, which violates 29 U.S.C. § 1182

and the applicable implementing regulation 29 C.F.R. § 2590.702(f)(2). (See id.).

Relatedly, and more importantly for present purposes, the Secretary also alleged that 

Macy’s breached its fiduciary duties under 29 U.S.C. § 1104(a)(1)(D), along with other 

provisions not at issue here.2 Macy’s moved to dismiss (see Doc. 37) the Amended 

Complaint (Doc. 4) on October 1, 2018. (Other defendants likewise moved to dismiss, 

but those defendants are not relevant to the issues addressed in this Opinion.)

On November 17, 2021, the Court issued its Opinion and Order (the “Opinion” 

or “Court’s Opinion”) (Doc. 47) on the motions to dismiss. As relevant here, the Court

denied Macy’s Motion to Dismiss (Doc. 37) in part. In particular, the Court concluded 

that the Secretary had alleged a plausible claim that the TSWP violated ERISA’s 

statutory and regulatory requirements for wellness programs for Plan Years 2011–

2013. (See Op., Doc. 47, #479, 485). But the Court granted Macy’s Motion to Dismiss 

with respect to the claims for breach of fiduciary duty in connection with the TSWP

2 The Secretary’s Amended Complaint originally also included claims for breach of ERISA’s 

fiduciary duty of loyalty, 29 U.S.C. § 1104(a)(1)(A)(i), and for prohibited transactions by a 

fiduciary, 29 U.S.C. § 1106. (See, e.g., Am. Compl, Doc. 4, #65–66). The Secretary’s Motion for 

Reconsideration does not ask the Court to alter or amend its judgment as to those other

fiduciary claims. (See Op., Doc. 47, #491 (dismissing with prejudice all claims for breach of 

fiduciary duty in connection with the TSWP for Plan Years 2011–2013)). 

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for those same plan years. (See id. at #488–91). More specifically, the Court concluded 

that, under applicable Supreme Court precedent, Macy’s had acted in its capacity as 

a settlor rather than as a fiduciary when it created the allegedly-offending terms of 

the TSWP, and thus its act of creating those terms could not violate a fiduciary duty. 

(Id. at #488–90). The Court also rejected the Secretary’s argument that Macy’s could 

face fiduciary liability for its “implementation” of the allegedly discriminatory TSWP. 

In particular, the Court concluded that the Secretary’s allegations were not directed 

at any discretionary conduct that Macy’s undertook in implementing the TSWP. 

Rather, the Secretary alleged only that Macy’s administered the TSWP as its terms 

required—terms that the Secretary claims are impermissibly discriminatory. (Id. at 

#490–91). 

On December 15, 2021, the Secretary filed a Motion for Reconsideration (Doc. 

52) asking the Court to revisit its dismissal of the claims under § 1104(a)(1)(D) for 

breach of fiduciary duty relating to the TSWP during Plan Years 2011–2013. The 

Secretary argues that the Court’s decision as to those claims reflects a clear error of 

law. Macy’s filed a Response in Opposition (Doc. 53) on January 5, 2022, and the 

Secretary filed a Reply in Support (Doc. 55) on January 20, 2022. The Court heard 

telephonic argument on the motions on January 27, 2022. The matter is now fully 

briefed and before the Court.

LEGAL STANDARD

The Secretary seeks relief under Federal Rule of Civil Procedure 59(e), which 

allows a “Motion to Alter or Amend a Judgment.” Because such requests for do-overs 

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impact scarce judicial resources and undercut the finality of judgments, they are 

disfavored. Accordingly, a party seeking such relief must satisfy a higher standard 

than would apply on the party’s first go-around. Generally, the party must show “(1) a 

clear error of law; (2) newly discovered evidence that was not previously available to 

the parties; or (3) an intervening change in controlling law.” See Duggan v. Towne 

Properties Grp. Health Plan, Case No. 1:15-cv-623, 2019 WL 1439936, at *2 (S.D. Ohio 

Mar. 31, 2019) (citation omitted). A court makes a clear error of law under “unique 

circumstances,” such as a “complete failure to address an issue or claim,” Byrd v. 

Gwin, No. 2:17-cv-981, 2019 WL 3804525, at *1 (S.D. Ohio Aug. 13, 2019) (citation 

omitted), or where the court either “‘overlooked or disregarded’ some ‘argument or 

controlling authority’ or where the moving party ‘successfully points out a manifest 

error.’” Myers v. Am. Educ. Servs., Case No. 1:18-cv-144, 2021 WL 4381315, at *3 

(S.D. Ohio Sept. 24, 2021) (citation omitted). “A party should not use a motion for 

reconsideration as a vehicle to re-hash old arguments that could have been argued 

previously.” Gaiser v. Am.’s Floor Source, Case No. 2:18-cv-1071, 2020 WL 1233770, 

at *1 (S.D. Ohio Mar. 13, 2020) (citation omitted). Nor should a party use such 

motions as a vehicle to raise case law that the party could have raised, but elected 

not to, in connection with its earlier briefing.

Because the Secretary is asking the Court to alter or amend its Opinion 

concerning Macy’s Motion to Dismiss (Doc. 37), the legal standards that apply to such 

motions are also relevant here. As the Court noted in its previous Opinion, at the 

motion to dismiss stage, a complaint must “state[] a claim for relief that is plausible, 

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when measured against the elements” of a claim. Darby v. Childvine, Inc., 964 F.3d 

440, 444 (6th Cir. 2020) (citing Binno v. Am. Bar Ass’n, 826 F.3d 338, 345–46 (6th 

Cir. 2016)). “To survive a motion to dismiss, in other words, [plaintiffs] must make 

sufficient factual allegations that, taken as true, raise the likelihood of a legal claim 

that is more than possible, but indeed plausible.” Id. (citations omitted). In making 

that determination, the Court must “construe the complaint in the light most 

favorable to the plaintiff, accept its allegations as true, and draw all reasonable 

inferences in favor of the plaintiff.” Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 

426, 430 (6th Cir. 2008) (internal quotation omitted). That is so, however, only as to 

factual allegations. The Court need not accept as true a plaintiff’s legal conclusions. 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 

U.S. 544, 555 (2007)).

LAW AND ANALYSIS

The Secretary’s request for reconsideration suffers from two related defects, 

one procedural and one substantive. As to the former, a motion to alter or amend the 

judgment is not a vehicle for a party to bring to the Court’s attention cases that the 

party wishes it had cited, but that it did not, in connection with its original motion. 

Yet that is, at least in part, what the Secretary seeks to do here. More specifically, in 

arguing that the Court committed a “clear error of law” in dismissing the Secretary’s

claims against Macy’s for breach of fiduciary duty in connection with the 2011–13 

Plan Years, the Secretary relies heavily on (1) rehashing arguments already pressed, 

and (2) pressing case law that existed at the time the Secretary filed his original brief 

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in opposition to the motion to dismiss, but that he chose not to offer the Court in 

connection with that briefing. That is a problem. 

The Court will not belabor that point, though, as the Secretary’s arguments 

also fall short in terms of substance. That is, even given these additional cases, and

the arguments that the Secretary advances based on them, the Court concludes that 

it did not commit “clear error” in dismissing the fiduciary duty claims associated with 

the TWSP in the 2011–13 Plan Years. 

As the Supreme Court has explained, “[i]n every case charging breach of 

ERISA fiduciary duty ... the threshold question is ... whether [the defendant] was 

acting as a fiduciary ... when taking the action subject to complaint.” Pegram v. 

Herdrich, 530 U.S. 211, 226 (2000). This question arises because ERISA adopts 

fiduciary duties from the common law of trusts and transplants them to the context 

of benefits provided by an employer who also, naturally, “may have financial interests 

adverse to beneficiaries.” Id. at 225. Thus, the fact that employers sometimes act as 

fiduciaries with respect to employee benefits does not prevent them from also 

“tak[ing] actions to the disadvantage of employee beneficiaries, when they act as ... 

plan sponsors (e.g., modifying the terms of a plan as allowed by ERISA to provide less 

generous benefits).” Id. When the employer alters the terms of a plan, for example, 

the employer is acting as a settlor rather than a fiduciary. Lockheed Corp. v. Spink, 

517 U.S. 882, 890 (1996). Accordingly, fiduciary duties simply do not attach in that 

setting. After all, ERISA normally does not require the employer to provide particular 

benefits, nor does it ordinarily prevent the employer from changing the benefits it 

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provides, including in ways that are detrimental to employees. See Curtiss-Wright 

Corp. v. Schoonejongen, 514 U.S. 73, 78 (1995). 

As a given party can wear different hats (i.e., either settlor of fiduciary) at 

different times, the key question is the capacity in which the party was acting with 

respect to the challenged conduct. And in considering that conduct, a person acts as 

a fiduciary “to the extent ... he exercises any discretionary authority or discretionary 

control respecting management of such plan or exercises any authority or control 

respecting management or disposition of its assets ..., or ... he has any discretionary 

authority or discretionary responsibility in the administration of such plan.” 29 

U.S.C. § 1002(21)(A)(i), (iii). 

In its Opinion, the Court concluded that the allegedly violative conduct that 

Macy’s engaged in here consisted of creating the terms of the TWSP, terms that the 

Secretary contends are discriminatory in light of the failure to include a reasonable 

alternative standard. But drafting plan terms is a settlor function. Thus, the Court 

concluded that this conduct could not give rise to a breach of fiduciary duty claim. 

The Secretary contended, however, and now re-contends, that he plausibly 

alleged that Macy’s breached a fiduciary duty in violation of 29 U.S.C. § 1104(a)(1)(D) 

when it “implemented” the violative TSWP. The particular conduct to which he points 

consists of acts such as 

determining which participants were charged the Tobacco Surcharge; 

determining which participants (if any) were reimbursed the Tobacco 

Surcharge; withholding the Tobacco Surcharge from participants’ 

paychecks; selecting [Cigna] and [Anthem] as the service providers to 

provide tobacco cessation programs; and directing Cigna and Anthem on 

how to report completions of the tobacco cessation programs.

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(Mot. for Reconsideration (“Mot.”), Doc. 52, #534). According to the Secretary, such 

conduct shows both that Macy’s acted in a fiduciary capacity, and that it breached a 

fiduciary duty. 

To expand on that a bit, the Secretary claims Macy’s was acting as a fiduciary 

when it performed these acts because it was exercising discretionary authority over 

the management and administration of the plan and its assets, in satisfaction of the 

statutory definition of fiduciary action. (See id. at #532 (citing 29 U.S.C. 

§ 1002(21)(a)(i), (iii))). Second, and relatedly, the Secretary contends that Macy’s acts 

of implementation violated § 1104(a)(1)(D), which provides that “a fiduciary shall 

discharge his duties with respect to a plan ... in accordance with the documents and 

instruments governing the plan insofar as such documents and instruments are 

consistent with the provisions of [ERISA’s Subchapter I ...].” 29 U.S.C. § 1104(a)(1)(D)

((cited in Mot., Doc. 52, #538 (emphasis in original))). 

The problem for the Secretary is that, because the definition of a fiduciary is 

functional, the acts that Macy’s allegedly undertook in a fiduciary capacity must be 

the same acts out of which the claim for breach of fiduciary duty arises. See Pegram, 

530 U.S. at 226 (“the threshold question is ... whether [the defendant] was acting as 

a fiduciary ... when taking the action subject to complaint”) (emphasis added). But

here, as Macy’s points out, there is an apparent mismatch between the various acts 

of TSWP implementation that the Secretary argues Macy’s undertook in a fiduciary 

capacity and the Secretary’s core factual allegation relating to the ERISA 

wrongdoing—that the TSWP’s terms failed to include a reasonable alternative 

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standard in violation of ERISA. (See Resp. in Opp’n to Mot. (“Opp’n”), Doc. 53, #548 

(“The flaw in the Secretary’s argument is that even if the Secretary were correct that 

Macy’s acted in some respects as a fiduciary, none of the alleged fiduciary functions 

have any relationship at all to the failure to provide a reasonable alternative.”)).

Take for example the Secretary’s allegation that Macy’s “select[ed] [Cigna] and 

[Anthem] as the service providers to provide tobacco cessation programs.” (Mot., Doc. 

52, #534). So what? Even assuming that Macy’s exercised discretion in making this 

selection, how does the selection of these two third-party administrators in any way 

relate to the claimed violation here? Indeed, when asked that question during 

argument, the Secretary conceded that no such relationship existed. But that is the 

point. It is not enough to allege conduct that may be discretionary. Rather, the 

Secretary must allege discretionary conduct that is part of the alleged violation. Here, 

the sole alleged shortcoming is the failure to include a reasonable alternative 

standard, and the Secretary offers no more than conclusory allegations that the 

absence of such a standard in the TSWP’s terms resulted from any discretionary 

decision pursuant to plan documents by Macy’s. (See id. at #547 (“Plaintiff never 

specifically provides a basis for how Macy’s exercised discretionary authority or 

responsibility in administering the TSWP with respect to the reasonable 

alternative.”)). 

Perhaps sensing this difficulty, the Secretary works backward from his theory 

of how Macy’s breached a fiduciary duty to the conclusion that Macy’s acted in a 

fiduciary capacity when it implemented a wellness program that lacked a reasonable 

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alternative standard, even though the absence of that reasonable alternative 

standard merely followed from the terms of the plan Macy’s adopted. To get there,

the Secretary starts with the language of § 1104(a)(1)(D), which requires fiduciaries 

to follow plan terms “insofar as such [terms] are consistent with the provisions of 

[ERISA].” From that language, the Secretary posits a corollary—fiduciaries have a 

“duty to disregard illegal plan terms.” (Id. at #539 (emphasis added)). Because the 

Secretary has adequately alleged that the Macy’s, Inc. Welfare Benefits Plan has one 

or more terms that violate an ERISA provision (i.e., has “illegal plan terms”), the 

Secretary then relies on that corollary to conclude that Macy’s, Inc., necessarily 

violated its fiduciary duties by following that unlawful plan. Stated slightly 

differently, the Secretary contends that “ERISA fiduciaries always have the 

discretion to disregard illegal plan terms,” and thus they are in fact acting in a 

fiduciary capacity whenever they fail to do so. (Reply in Supp. of Mot. (“Reply”), Doc. 

55, #576).3

3 At this point, the Court notes that the Secretary’s presentation of this theory of breach of 

fiduciary duty in his original briefing on Macy’s Motion to Dismiss (Doc. 37) was sketchy at 

best, consisting largely of broad conclusory statements with limited citation to legal support. 

(See generally Resp. in Opp’n to Macy’s Mot. to Dismiss (“Sec’y Opp’n”), Doc. 41, #361–64). 

On the other hand, the Secretary now cites an array of case law that he claims supports this

same theory, all of which would have been available to the Secretary the first time around.

(See, e.g., Mot., Doc. 52, #539). Thus, the Court has some concern that the Secretary is 

inappropriately using a motion to alter or amend the judgment “as a vehicle to re-hash old 

arguments that could have been argued previously.” See Gaiser, 2020 WL 1233770, at *1. 

Nevertheless, the Court acknowledges the complexity and apparent novelty of this case in 

certain respects, and prefers to decide the merits of the Secretary’s theory of breach, in part 

to provide clarity as the Secretary prepares to submit his Second Amended Complaint. (See

12/13/21 Notation Order). 

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The Court is not convinced. To start, the Secretary’s interpretation of 

§ 1104(a)(1)(D) rests on a logical fallacy. By its plain language, that statutory 

provision imposes a fiduciary duty to follow plan documents that are consistent with 

ERISA. But from that, the Secretary asks the Court to infer a fiduciary duty not to 

follow plan documents that are not consistent with ERISA. As a matter of logic, the 

latter simply does not follow from the former. Indeed, the fallacy even has a name—

“denying the antecedent” or “the fallacy of the inverse.” Thus, from the outset, the 

Secretary’s theory of violation of § 1104(a)(1)(D) appears to suffer from the fatal flaw 

that the plain text of the statute does not support it. See, e.g., United States v. 

Edington, 992 F.3d 554, 556 (6th Cir. 2021) (“The plain language of a statute is the 

starting point for its interpretation ... [and] should also be the ending point if the 

plain meaning of that language is clear.”) (citations and internal quotation marks 

omitted).

Perhaps not surprisingly, then, the Secretary does not fare much better with 

case law. Although the Secretary insists that the Court committed a clear error of law 

in dismissing his claims for breach of fiduciary duty based on the TSWP for Plan 

years 2011–2013 under § 1104(a)(1)(D), the Secretary does not point to any

controlling (Supreme Court or Sixth Circuit) precedent that adopts either the 

Secretary’s interpretation of § 1104(a)(1)(D) or the Secretary’s theory of breach of 

fiduciary duty based solely on implementation of plan terms that violate another 

provision of ERISA.4 Indeed, so far as the Court can tell, only a few out-of-circuit 

4 The Court discusses the case law the Secretary does cite in more detail below. 

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district court cases have addressed claims for breach of fiduciary duty under

§ 1104(a)(1)(D) based solely on allegations that a party implemented a plan whose 

terms allegedly violated another provision of ERISA. And the weight of that 

persuasive authority rejects the Secretary’s arguments.

For example, in Cement and Concrete Workers District Council Pension Fund 

v. Ulico Casualty Company, 387 F. Supp. 2d 175 (E.D.N.Y. 2005), the trustees of a 

pension plan amended the plan in a manner that the plaintiffs argued violated 

ERISA’s “minimum benefit accrual standards,” set forth in 29 U.S.C. § 1054. Ulico, 

387 F. Supp. 2d at 179. More importantly for present purposes, though, the plaintiffs 

there also separately argued that implementing that plan according to those allegedly 

violative terms violated a fiduciary duty under § 1104(a)(1)(D). See id. at 182.

The Ulico court disagreed. The court started by observing that “the inquiry 

into whether a plan trustee has breached a fiduciary duty must be squarely directed 

at determining whether any of the trustees’ actions or omissions in managing and 

administering the plan breached an ERISA fiduciary duty, rather than on whether 

the terms of the plan administered by the trustee violated ERISA in some respect.” 

Id. at 185. Next, the court addressed, and roundly rejected, the very interpretation of 

§ 1104(a)(1)(D) that the Secretary advances here:

The proposition that “a trustee who administers a pension plan knowing 

it to be in violation of ERISA acts in violation of his fiduciary duties 

under ERISA,” while perhaps facially attractive, is based on an overly 

broad reading of [29 U.S.C. § 1104(a)], and comes to this court 

conspicuously unsupported by caselaw. ... [Section 1104(a)] provides, in 

relevant part, that “a fiduciary shall discharge his duties with respect to 

a plan solely in the interest of the participants and beneficiaries and ... 

in accordance with the documents and instruments governing the plan 

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insofar as such documents and instruments are consistent with the 

provisions of [ERISA].” ... The plain meaning of this provision is that if 

the terms of the plan documents and instruments are consistent with 

ERISA, a plan trustee has a fiduciary duty to adhere to those terms. ... 

And as elementary logic teaches, the contrapositive of this statement is 

equally true: a plan trustee does not have a fiduciary duty to comply 

with any term of the plan documents which is not consistent with 

ERISA's requirements. ... However, the plaintiffs’ proposed construction 

of this statutory provision—that a plan trustee owes a fiduciary duty to 

depart from any provision of the plan documents which he knows to 

violate ERISA and/or to amend that provision—goes significantly 

beyond the plain command of the statute. It therefore comes as no 

surprise that the plaintiffs are unable to identify a single case holding 

that a plan trustee necessarily breaches a fiduciary obligation by 

complying with any provision of the plan which he knows to violate 

ERISA.

Id. (emphasis added) (internal citations omitted). Accordingly, the Ulico court 

concluded that “[t]rustees do not breach their fiduciary duties under ERISA simply 

by presiding over a plan which fails in some respect to conform to one of ERISA's 

myriad provisions.” Id. at 184. Several other district courts have cited this holding

approvingly. See Laurent v. PricewaterhouseCoopers LLP, 06-CV-2280, 2018 WL 

502239, at *3 (S.D.N.Y. Jan. 19, 2018) (“The Court disagrees with the notion that 

ERISA imposes a general fiduciary duty on a plan administrator to comply with each 

and every provision in the statute.”); Roe v. Empire Blue Cross Blue Shield, No. 12-

cv-04788 (NSR), 2014 WL 1760343, at *8 (S.D.N.Y. May 1, 2014); Agway, Inc., 

Employees’ 401(k) Thrift Inv. Plan v. Magnuson, Civil Action No. 5:03-CV-1060 

(HGM/DEP), 2006 WL 2934391, at *10–11 (N.D.N.Y. Oct. 12, 2006). 

Similarly, in Paul v. RBC Capital Markets LLC, No. C16-5616 RBL, 2018 WL 

3630290 (W.D. Wash. July 31, 2018), the court dismissed a claim for breach of 

fiduciary duty based on implementation of a retirement plan whose terms allegedly

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violated certain substantive provisions of ERISA. The court rejected an argument 

strikingly similar to the Secretary’s here:

[p]laintiffs argue that “administering” and “managing” a plan, and 

disposition of “plan assets” in violation of ERISA ... implicate fiduciary 

conduct. ... Even construing “fiduciary duties” liberally, ... in the 

absence of some articulable conduct that violates a fiduciary duty, 

correctly enforcing a flawed plan does not support a breach of fiduciary 

duty claim as a matter of law.

Id. at *7 (emphasis added) (internal citations omitted). 

On the other hand, the Court notes that there is one, also out-of-circuit, case 

(to the Court’s knowledge the only one) that arguably comes out differently. In Pender 

v. Bank of America, 756 F. Supp. 2d 694 (W.D.N.C. 2010),5 the defendants sought 

dismissal of the plaintiffs’ claims for breach of fiduciary duty based on another alleged 

ERISA violation, this time involving calculation of lump-sum retirement benefits 

under 29 U.S.C. § 1053 et seq. Id. at 704. The Pender court acknowledged Ulico, but 

purported to distinguish it, with limited discussion, as follows: “Ulico simply states 

that a Plan fiduciary does not necessarily breach his duty by complying with a plan 

provision that he knows violates ERISA. ... Here, however, the Plans’ fiduciaries 

might have breached their duties because implementing the transfers deprived 

participants of an important protection under ERISA—the separate account feature.” 

Id. (internal citations omitted). So Pender could be read to suggest that some, but not 

all, implementations of plan terms that violate ERISA may constitute a breach of 

fiduciary duty for that reason. However, it is not entirely clear whether the Pender

5 Notably, the Secretary never cited Pender anywhere in either his original Response (Doc. 

41) to Macy’s Motion to Dismiss (Doc. 37), nor in his briefing regarding the instant Motion 

(Doc. 52). 

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court adopted a theory of breach of fiduciary duty based on § 1104(a)(1)(D), like the 

Secretary’s, or instead based on §§ 1104(a)(1)(A) or (B), which claims were also 

present in Pender, but are not at issue here. See Pender, 756 F. Supp. 2d at 704. Also 

unclear is how the Pender court determined that the question turns on whether the 

act at issue “deprived participants of an important protection under ERISA,” and the 

Pender court offers no general guidance on where to draw this particular line of 

“importance.” See id. 

Putting Pender aside, the weight of applicable case law—while limited, see 

Paul, 2018 WL 3630290, at *6 (noting “there is not a lot of on point authority either 

way”)—supports the Court’s previous dismissal of the Secretary’s claims for breach 

of fiduciary duty under § 1104(a)(1)(D) based on Macy’s implementation of the TSWP 

in Plan Years 2011–2013. As in Ulico and Paul, the Secretary’s relevant allegations 

here suggest that Macy’s merely “presid[ed] over a plan which fail[ed] in some respect 

to conform to one of ERISA's myriad provisions,” Ulico, 387 F. Supp. 2d at 184, and 

“correctly enforc[ed] a flawed plan,” Paul, 2018 WL 3630290, at *7. Accordingly, the 

Court did not commit a clear error of law in concluding that “the Secretary’s only 

apparent allegation about implementation,” which was that “Macy’s implemented a 

discriminatory wellness program in accordance with the impermissibly 

discriminatory terms it established when it created the program,” was insufficient to 

state a claim for breach of fiduciary duty for Plan Years 2011–2013. (See Op., Doc. 47, 

#490 (emphasis in original)). To the extent that Pender might provide some support 

for a different result, which is not entirely clear, the Court declines to follow Pender.

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The Pender court provides limited explanation for its conclusion on this issue, and 

the other cases the Court cited above seem to the Court to adopt the more logically 

sound interpretation of § 1104(a)(1)(D). 

While the Secretary did not discuss any of the above cases in his Motion, the 

Secretary has cited a broad array of other cases from disparate ERISA and even nonERISA contexts that he claims support his contrary position. Surprisingly, though, 

so far as the Court can tell, none of those cases decides or even addresses the issue of 

whether implementation of a plan whose terms violate ERISA also thereby violates 

§ 1104(a)(1)(D), as the cases the Court cited above do. Instead, the Secretary argues 

at a high level of generality, citing the Court to abstract snippets that sound 

superficially applicable, but in fact pertain to legal contexts inapposite to the issue

before the Court here.

For example, the Secretary argues that the following quotation from a 

published Sixth Circuit decision requires this Court to accept his arguments 

concerning the claims at issue here:

The administrators’ authority to disregard unlawful Plan provisions, 

therefore, can only be derived from their own duty to comply with the 

law. That duty does not await the filing of administrative claims, but 

has been there all along. And at no point have the administrators done 

anything other than apply the methodology set forth in the Plan itself. 

Thus, as one district court recently observed in rejecting this same 

argument, “since [the administrators] did not alter the formula, they 

[must] implicitly conclude that the Plan['s] method of calculation is not 

illegal.”

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Durand v. Hanover Ins. Group, Inc., 560 F.3d 436, 442 (6th Cir. 2009) (quoting 

Thompson v. Ret. Plan for Employees of S.C. Johnson & Sons, Inc., No. 07-1047, 2008 

WL 4964714, at *6 (E.D. Wis. Nov. 14, 2008)). 

A closer look at Durand, though, undercuts the Secretary’s reliance on this 

language. There, the plaintiff alleged that the formula used to calculate her 

retirement benefits violated certain provisions of ERISA, and the issue before the 

Sixth Circuit was whether it would be futile to require her to exhaust her 

administrative remedies by submitting her claim for recalculation before suit. 

Durand, 560 F.3d at 439. The Sixth Circuit considered that there was no such 

requirement where the claim was not that the plan had incorrectly calculated the 

benefits, but rather that the plan had correctly calculated the benefits according to 

an unlawful formula. See id. at 439–40. Thus, the Sixth Circuit in Durand was not 

confronted with the issue of whether implementation of plan terms that violate a 

statute also necessarily breaches a fiduciary duty under § 1104(a)(1)(D), nor, 

apparently, was a claim for breach of fiduciary duty even at issue in the case. See 

Durand v. Hanover Life Ins. Co., Civil Action No. 3:07-CV-130-S, 2007 WL 3342370, 

at *2 (W.D. Ky. Nov. 9, 2007) (noting plaintiff’s claims arose under 29 U.S.C. 

§ 1132(a)(1)(B), allowing employees to sue for benefits under the terms of a plan), 

rev’d on other grounds by Durand, 560 F.3d 436. 

But even considering the Secretary’s selected passage in isolation, nothing 

about that quote should come as a surprise. The plan administrators had the 

“authority to disregard unlawful Plan provisions.” Durand, 560 F.3d at 442. 

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Assuming they were acting in a fiduciary capacity with respect to the relevant 

conduct, whatever it was—another issue that was not before the Sixth Circuit in 

Durand—that authority follows from § 1104(a)(1)(D), which does not require 

fiduciaries to follow plan terms that violate ERISA. Naturally, whether acting in a 

fiduciary capacity or not, the plan administrators also had a “duty to comply with the 

law.” Id. Everyone does. Moreover, if they do violate some other ERISA provision, 

§ 1104(a)(1)(D) does not relieve them from liability merely because they were 

following plan terms. But none of that is the same as saying that implementing terms 

in a plan that violates ERISA, in and of itself, also violates § 1104(a)(1)(D), an issue 

on which, again, Durand has nothing to say.

The Secretary’s reliance on Supreme Court cases that he says support his 

argument similarly comes up short. The Secretary cites Fifth Third Bancorp. v. 

Dudenhoeffer, 573 U.S. 409, 420 (2014), for the proposition that § 1104(a)(1)(D) 

“makes clear that the duty of prudence trumps the instructions of a plan document.” 

But the duty of prudence, § 1104(a)(1)(B), is not at issue in this case. On the other 

hand, the duty to follow plan documents insofar as they are consistent with ERISA

under § 1104(a)(1)(D), which the Secretary insists is at issue here, was not any part 

of the basis for the plaintiffs’ claims in Dudenhoeffer. See id. at 411–12 (claims arose 

under § 1104(a)(1)(B), the duty of prudence). Instead, § 1104(a)(1)(D) played only a 

limited role in Dudenhoeffer, as an interpretive aid to resolving the sole issue actually 

before the Supreme Court, which concerned the proper interpretation of 

§ 1104(a)(1)(B). See id. at 420. 

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But again, to the extent that Dudenhoeffer refers to § 1104(a)(1)(D), that 

reference is consistent with this Court’s interpretation of that statutory provision. 

Because § 1104(a)(1)(D) does not require a fiduciary to follow plan documents that 

are inconsistent with ERISA, a fiduciary may not use unlawful plan terms as a shield 

from liability for their violations of other ERISA provisions (such as § 1104(a)(1)(B), 

which imposes a duty of prudence). But as before, that just isn’t the same as saying 

that § 1104(a)(1)(D) itself imposes a fiduciary duty to disregard plan terms that 

violate ERISA, an argument that the Supreme Court did not accept or even consider 

in Dudenhoeffer. In other words, saying that a fiduciary cannot use unlawful plan 

terms as a shield for other violations does not mean that the Secretary can use 

§ 1104(a)(1)(D) as a sword to attack anyone who acts as a fiduciary under a plan in 

any capacity merely because a plan contains unlawful terms.

Similarly, the Secretary cites Central States, Southeast and Southwest Areas 

Pension Fund v. Central Transport, Inc., 472 U.S. 559, 568 (1985), which notes in 

passing that “trust documents cannot excuse trustees from their duties under 

ERISA.” By now, the Court’s response should be apparent. The mere fact that 

§ 1104(a)(1)(D) does not “excuse” a fiduciary from compliance with another provision 

of ERISA does not mean that § 1104(a)(1)(D) itself requires a fiduciary, as a matter of 

fiduciary duty, to disregard plan terms that conflict with ERISA. 

And it bears noting that the Court’s Opinion (Doc. 47) in no way “excused” 

Macy’s for the alleged violation of § 1182. Indeed, the Court determined that the 

Secretary’s Amended Complaint (Doc. 4) stated a viable claim that Macy’s, whether 

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acting as a fiduciary or not, could face liability for creating a wellness program whose 

terms did not comply with § 1182 and implementing regulation 29 C.F.R. 

§ 2590.702(f)(2)—assuming, of course, that the Secretary can prove that was the 

case.6 (See Op., Doc. 47, #473). But none of that is at issue here. Instead, the only

question currently before the Court is whether those allegations also state a claim 

that Macy’s violated § 1104(a)(1)(D). Central States does not support the Secretary’s 

argument that they do.

The Court will not belabor the point by illustrating the shortcomings of every 

case that the Secretary cites in support of his arguments in the Motion for 

Reconsideration. Suffice to say that the Court does not find these cases to 

demonstrate a “clear error” in the Court’s previous Opinion.

To be fair, though, the Secretary does cite a pair of cases that arguably come 

closer to the mark. While they are out-of-circuit cases (both from the Second Circuit)

they might be read to suggest, albeit very much in passing, that § 1104(a)(1)(D) 

“imposes a general fiduciary duty to comply with ERISA.” See New York State 

Psychiatric Ass’n, Inc. v. UnitedHealth Grp., 798 F.3d 125, 131 (2d Cir. 2015) (citing 

Kendall v. Emps. Ret. Plan of Avon Prods., 561 F.3d 112, 120 (2d Cir. 2009)). To the 

extent that these two cases could be understood to endorse the Secretary’s 

interpretation of § 1104(a)(1)(D), though, they are of minimal persuasiveness. The 

cases offer no discussion or reasoning to support the reading of § 1104(a)(1)(D) that 

6 This differs from the question of what relief would be available against Macy’s, and 

particularly against which of Macy’s, Inc., or the Macy’s, Inc. Welfare Benefits Plan, should 

the Secretary prove a violation occurred. The Court returns to that question below. 

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the Secretary urges here, nor was the interpretive question regarding the scope of 

that statutory provision necessary, or even relevant, to the issues decided in each of 

those two cases. See id. (“The only question as to these claims is whether United may 

be held liable under [ERISA civil enforcement provisions] [29 U.S.C. §§ 1132(a)(1)(B)] 

or [1132(a)(3)].”); Kendall, 561 F.3d at 120 (issue of standing to pursue claims for 

breach of fiduciary duty). 

Highlighting the point, district courts in the Second Circuit have not adopted 

the Secretary’s interpretation of § 1104(a)(1)(D), nor, apparently, do they interpret

UnitedHealth or Kendall to require them to do so. For example, the Southern District 

of New York in Laurent, 2018 WL 502239, at *3, addressed the issue as follows:

The Court disagrees with the notion that ERISA imposes a general 

fiduciary duty on a plan administrator to comply with each and every 

provision in the statute. First, the Kendall quote is taken out of context.

Kendall is about Article III standing .... In the course of concluding that 

the plaintiff lacked standing to bring certain ERISA claims, the Second 

Circuit explained that “[t]he statute does impose a general fiduciary 

duty to comply with ERISA, but it does not confer a right to every plan 

participant to sue the plan fiduciary for alleged ERISA violations 

without a showing that they were injured by the alleged breach of the 

duty.” The Court does not read Kendall to hold that a plan administrator 

breaches his fiduciary duty whenever he fails to depart from a term of 

the plan ... which conflict [sic] with an ERISA provision.

(citation omitted); see also Roe, 2014 WL 1760343, at *8 (“Trustees do not breach 

their fiduciary duties under ERISA simply by presiding over a plan which fails in 

some respect to conform to one of ERISA's myriad provisions ....”) (quoting Ulico, 387 

F. Supp. 2d at 184). It is difficult to conceive how it would be clear error for this Court, 

which is not in the Second Circuit, to decide the issue before it in a manner consistent 

with the well-reasoned district court opinions that the Court has discussed at length 

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above, rather than in accordance with isolated dicta from Second Circuit cases whose 

holdings did not address the issue presented here.

Finally, although peripheral to the Court’s present decision, the Court notes 

that the legal issue that the Secretary raises may not matter much to the ultimate 

outcome in this case. Remember, the Court has already determined that the 

Secretary did state a claim against Macy’s for allegedly violating both § 1182 and 

implementing regulation 29 C.F.R. § 2590.702(f)(2) for Plan Years 2011–2013. (See

Op., Doc. 47, #473). The Court has also determined that the Secretary has the 

authority to seek redress for that alleged violation under 29 U.S.C. § 1132(a)(5), 

which authorizes the Secretary to seek “other appropriate equitable relief ... to 

redress” a violation of ERISA Subchapter 1, which includes § 1182. (See id. at #479 

n.3). But that same enforcement provision, § 1132(a)(5), is one of the two statutory 

enforcement provisions (the Court addresses the other one immediately below) on 

which the Secretary could rely for relief if Macy’s in fact had violated a fiduciary duty. 

Stated alternatively, both § 1104(a)(1)(D) and § 1182 are “provision[s] of this 

subchapter” under § 1132(a)(5), and are thus equally enforceable under that latter

section. Accordingly, to the extent that the Secretary relies on § 1132(a)(5) as the 

basis for relief, nothing that has happened so far in this case suggests that the scope 

of relief available to him if he proves that Macy’s violated § 1182 would necessarily 

be any different from the relief available to redress a breach of fiduciary duty under 

§ 1104(a)(1)(D). 

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True, if the conduct here also constituted a breach of fiduciary duty, the 

Secretary could perhaps also pursue enforcement under § 1132(a)(2), rather than

merely (a)(5). And as the former provision is limited to enforcement of fiduciary 

duties, it does not apply directly to violations of § 1182. So, if the two enforcement 

sections give rise to different potential remedies, it may matter whether the § 1182 

violation (enforceable under § 1132(a)(5)) is also a breach of fiduciary duty 

(enforceable under both § 1132(a)(5) and (a)(2)). 

But it is not at all clear that the relief available under the two would vary here. 

To be sure, § 1132(a)(2) allows the Secretary to seek “appropriate relief under [29 

U.S.C. § 1109].” The latter section, in turn, requires “[a]ny person who is a fiduciary 

with respect to a plan who breaches [any fiduciary duty] ... to make good to [the] plan 

any losses to the plan resulting from each such breach, and to restore to such plan 

any profits of such fiduciary which have been made through use of assets of the plan 

by the fiduciary ....” 29 U.S.C. § 1109(a). And, given that statutory language, it is 

conceivable, although by no means certain, that the scope of relief under § 1132(a)(2) 

may be broader than that available under § 1132(a)(5). This might be true for at least 

two reasons. First, “appropriate relief” under § 1132(a)(2) might simply be a broader 

category of potential relief than “appropriate equitable relief” under § 1132(a)(5), for 

the relatively straightforward (by the standards of this case) reason that the former

phrase omits the latter’s limitation to “equitable” relief, thereby perhaps, for example, 

giving rise to an ability to seek monetary damages. 

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Second, and somewhat relatedly, § 1132(a)(2) might provide a vehicle for

holding Macy’s, Inc., liable for any losses to the Macy’s, Inc. Welfare Benefits Plan as 

a result of any ultimate liability for the § 1182 violation. That might matter because 

§ 1182, by its terms, imposes a requirement on the plan. See 29 U.S.C. § 1182(a)(1)(A).

If that means that the plan itself is the only entity that faces liability under § 1182 

(a topic to which the Court returns below), then it could be that the unavailability of 

a breach of fiduciary duty claim enforceable through § 1132(a)(2), as an alternative 

to an ERISA violation enforceable through § 1132(a)(5), would limit the Secretary’s 

ability to seek relief against Macy’s, Inc. (as opposed to the Macy’s, Inc. Welfare 

Benefits Plan). Under all those assumptions, the Court’s holding that Macy’s cannot 

be liable in a fiduciary capacity for the alleged TSWP violations for Plan Years 2011–

2013 might make a difference. 

On the other hand, even if the Court had held that, on the allegations here, 

Macy’s, Inc., had breached a fiduciary duty (which, to be clear, the Court did not, and 

does not, hold), the Court doubts that it would also have determined that the 

Secretary’s Amended Complaint (Doc. 4) alleged “losses to the plan.” As the Court 

noted in its previous Opinion, § 1132(a)(2), which incorporates § 1109, requires 

“losses to the plan” as a prerequisite for bringing suit. (Op., Doc. 47, #460). And, while 

the Court did not, and does not, reach the issue of whether the Secretary adequately 

alleged that Macy’s conduct as to the TSWP for Plan Years 2011–2013 led to “losses 

to the plan,” the Court notes that it decided a similar issue in Macy’s favor with 

respect to other claims based on the allegedly improper out-of-network 

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reimbursement methodology. (See generally id. at #458–66). Hypothetically, then, 

had the Court determined that the Secretary stated a claim for breach of fiduciary 

duty based on implementing the TWSP for Plan Years 2011–13, the Court may well 

have determined that the Secretary failed to allege losses to the plan resulting from 

that conduct. In that event, a claim under § 1132(a)(2) would not lie, which would 

again leave § 1132(a)(5) as the sole basis under which the Secretary could seek relief. 

The bottom line is that, to the extent that § 1132(a)(5) is the sole avenue under which 

the Secretary can seek relief, whether for a substantive ERISA violation under § 1182 

or a breach of fiduciary duty, then the Court’s holding that he can pursue the former 

theory, but not the latter, may well have no impact on the scope of relief available to 

the Secretary in this case. 

Nor is it at all clear that the Secretary needs § 1132(a)(2) (rather than the 

combination of § 1132(a)(5) and § 1182) to reach Macy’s, Inc. To be sure, the scope of 

liability under § 1182 is a thorny issue. As noted above, § 1182 by its terms says that 

“a group health plan ... may not” take certain actions that discriminate on the basis 

of health status, which might mean that the prohibition extends only to the plan 

itself, and thus is not enforceable (through § 1132(a)(5)) against Macy’s, Inc. See 29 

U.S.C. § 1182(a)(1)(A) (emphasis added). But it could be (again, the Court emphasizes 

that it has not yet, and does not now, reach this issue) that the statute also applies 

to any other entity, such as the settlor (i.e., Macy’s, Inc.), that causes a plan to include 

a forbidden term, in which case the availability of “appropriate equitable relief ... to 

redress such violation,” see § 1132(a)(5), might well extend to imposition of such relief 

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against the settlor. On a related front, the implementing regulation, 29 C.F.R. 

§ 2590.702(f)(2), which speaks of “a participatory wellness program,” likewise might 

apply to any defendant that causes a wellness program to have certain discriminatory 

terms, as the Secretary has alleged Macy’s, Inc., has done here. If either of those

propositions of law proves true, then dismissing the claim for breach of fiduciary duty 

against Macy’s, Inc., as the Court did in its previous Opinion and declines to change 

here, would not necessarily limit the Secretary’s ability to seek relief against Macy’s, 

Inc., under § 1132(a)(5), for the alleged violation of § 1182 or the implementing 

regulation. 

In short, a high degree of legal (not to mention factual) uncertainty remains at 

this stage of the case with respect to the claims that the Court’s previous Opinion did 

not dismiss, and the relief to which they may give rise. The Court emphasizes that 

both Macy’s, Inc., and the Macy’s, Inc. Welfare Benefits Plan remain defendants in 

this case. With respect to the TSWP for Plan Years 2011–2013, the only claims 

against those defendants that the Court has dismissed, in a judgment the Court 

declines to alter or amend today, are the Secretary’s claims for breach of fiduciary (as 

opposed to statutory and regulatory) duty. 

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CONCLUSION

For the foregoing reasons, the Court DENIES the Secretary’s Motion for 

Reconsideration (Doc. 52). 

SO ORDERED. 

February 10, 2022

DATE DOUGLAS R. COLE

 UNITED STATES DISTRICT JUDGE

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