UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

ASSOCIATED INSDUSTRIES Case No. 3:14-cv-01711-AA 

MAGNAGEMENT SERVICES, in its 

fiduciary capacity as OPINION AND ORDER 

administrator for an 

association or membergoverned group plans; THE 

ASSOCIATION OR MEMBER GROUPGOVERNED PLANS; and JAMES 

DeWALT, in his capacity as a 

participant in one of the 

above-referenced plans, 

Plaintiffs, 

v. 

MODA HEALTH PLAN, INC., dba 

MODA HEALTH INSURANCE, an 

Oregon Corporation, 

Defendant. 

AIKEN, Chief Judge: 

Plaintiffs filed suit pursuant to the Employee Retirement 

Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001, et seq, 

seeking declaratory and injunctive relief. On behalf of 

themselves and participating associations, plaintiffs seek a 

1 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 1 of 13
declaration that the Association or Member-Group Governed Plans 

(the Health Benefit Trusts) are each sponsored by an , "employer" 

within the meaning of ERISA. 29 U.S.C. § 1002(5) Plaintiffs also 

seek injunctive relief enjoining defendant Moda Health Plans, Inc. 

(Moda) from terminating group insurance contracts issued through 

the Health Benefit Trusts, solely on the basis that the Health 

Benefit Trusts are not sponsored by "employers" under ERISA. 

Plaintiffs move for summary judgment on whether the Health 

Benefit Trusts are sponsored by "employers" as defined by ERISA. 

The motion is denied. 

BACKGROUND 

Plaintiff Associated Industries Management Services (AIMS)-

is the third-party administrator of the relevant Health Benefit 

Trusts. The Health Benefit Trusts are sponsored by the following 

industry associations: the ALLtech Information Technology Group, 

the Greater Columbia Manufacturing Industry Group, the Columbia 

Retail Industry Group, the Greater Northwest Health Industry 

Group, the Pacific Business Resource Industry Group, and 

Associated Industries of the Inland Northwest, Inc. 

(collectively, the Industry Groups) 

Moda is an insurance carrier; since 2011, has it partnered 

with each of the Industry Groups to offer large group medical 

coverage for each group's members. 

2 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 2 of 13
Prior to January 1, 2014, employers purchasing health plans 

through an association were exempt from the Washington State 

small group community rating requirements. See Rev. C. Wash. §§ 

48.44.024, 48.46.068, 48.21.047. According to the parties, as of 

January 1, 2014, the federal community rating requirements under 

the Affordable Care Act became applicable to all nongrandfathered group health plans, unless the health plan is 

sponsored by an "employer" within the meaning of ERISA. As a 

result, Moda is prohibited from issuing insured large group 

contracts through the Health Benefit Trusts in Washington State, 

unless each Trust is sponsored by an "employer" within the 

meaning of ERISA. See 29 U.S.C. § 1002(5); Wash. Admin. C. 284-

170-958. 

Further, Washington law requires Moda to make a good faith 

effort to ensure that each Health Benefit Trust is sponsored by an 

"employer" and thus eligible to obtain large group insurance 

contracts. Moda' s Response to Pl.'s Motion for Summ. J. at 2. 

Significantly, the State of Washington Insurance Commissioner has 

apparently determined that the Health Benefit Trusts are not 

sponsored by "employers" within the meaning of ERISA and 

ineligible to purchase large group insurance for their members. 

See id. at 3 ("[T]he Insurance Commissioner stated that the Trusts 

3 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 3 of 13
at issue in this case did not meet the 'Employer' definition under 

ERISA") . 1 

· Accordingly, plaintiffs filed this action and now move for 

summary judgment. Moda does not oppose plaintiffs' motion and 

instead seeks clarification as to its obligations; Moda will not 

offer group insurance contracts to the Health Benefit Trusts 

absent a court ruling o~ other verification that they are 

sponsored by "employers." 

While plaintiffs' motion was pending, the court learned that 

a similar case had been filed in the Western District of Washington 

where the underlying basis of plaintiffs' claims undeniably 

arises - and plaintiffs were ordered to show cause why this action 

should not be transferred. Plaintiffs strenuously oppose trans fer; 

plaintiffs argue that their complaint raises a purely federal 

question under ERISA, that their choice of forum is entitled to 

deference, and that venue is appropriate in the District of Oregon. 

Plaintiffs also emphasize the factual distinctions between this 

case and the Washington case and claim they will suffer irreparable 

harm from a transfer. 

I remain unconvinced that this District is the most 

appropriate forum; plaintiffs' underlying purpose in this case is 

1 Plaintiffs dispute that the Washington Insurance Commissioner 

conclusively determined that the sponsors of the Health Benefit 

Trusts are not "employers." However, Moda represents that the 

Commissioner has so found. Regardless, the parties' divergence 

is not material to the court's ruling. 

4 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 4 of 13
to obtain an order rendering the Industry Groups eligible for large 

group insurance contracts in the State of Washington. However, 

given plaintiffs' choice of forum and the narrow federal question 

presented, I do not find sufficient justification to transfer this 

case sua sponte. 

DISCUSSION 

The question presented by plaintiffs' motion for summary 

judgment is whether each of the Industry Groups qualifies as an 

"employer" within the meaning of ERISA. 

Under § 3 ( 5) of ERISA, the term "employer" is defined as 

"any person acting directly as an employer, or indirectly in the 

interest of an employer, in relation to an employee benefit 

plan; and includes a group or association of employers acting 

for an employer in such capacity." 29 U.S.C. § 1002(5). However, 

a "group of employers that establishes and maintains [a health 

benefits] plan must be a 'bona fide' association of employers 

'tied by a common economic or representation interest, unrelated 

to the provision of benefits.'" Gruber v. Hubbard Bert Karle 

Weber, Inc., 159 F.3d 780, 787 (3d Cir. 1998) (quoting Wis. 

Educ. Ass'n Trust v. Iowa State Bd., 804 F.2d 1059, 1063 (8th 

Cir. 1986)). Further, "the employer-members of the organization 

that sponsors the plan must exercise control, either directly or 

indirectly, both in form and in substance, over the plan." Id. 

5 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 5 of 13
(citing Dep't of Labor (DOL) Op. No. 96-15A). These factors are 

known generally as the commonality and control requirements. 

The DOL has further advised: 

[W]here several unrelated employers merely execute 

identically worded trust agreements or similar 

documents as a means to fund or provide benefits, in 

the absence of any genuine organizational relationship 

between the employers, no employer group or 

association exists for purposes of ERISA section 3(5). 

See/ e. g., Advisory Opinion 96-25A. Similarly, where 

membership in a group or association is open to anyone 

engaged in a particular trade or profession regardless 

of their status as employer, and where control of the 

group or association is not vested solely in employer 

members, the group or association is not a bona fide 

group or association of employers for purposes of 

ERISA section 3 (5). See/ e. g./ id.; Advisory Opinion 

2003-13A. 

DOL Op. No. 2005-24A. 

Factors the court may consider in determining whether an 

association is a "bona fide" employer association include: 1) 

how members are solicited; 2) who is entitled to participate and 

who actually participates in the association; 3) the process by 

which the association was formed; 4) the purposes for which it 

was formed and the preexisting relationships of its members, if 

any; 5) the powers, rights, and privileges of employer-members; 

·and 6) who actually controls and directs the activities and 

operations of the benefit program. See DOL Op. No. 2008-07A. "A 

determination whether there is a bona fide employer group or 

association for this ERISA purpose must be made on the basis of 

all the facts and circumstances involved." Id. 

6 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 6 of 13
Plaintiffs assert that the Industry· Groups are "voluntary, 

membership-based organizations'' and that each sponsors "a Health 

Benefit Trust as an ERISA employer." Pls.' Mem. at 5-6. 

Plaintiffs maintain that participation in each Industry Group is 

limited to Washington State employers within specific, primary 

business categories, thus meeting the commonality requirement. 

Plaintiffs argue that the Industry Groups' ongoing participation 

"in industry-focused activities and the history of common 

economic interests prior to the establishment of the Health 

Benefit Trusts show that the relationship between the 

participating member-employers is not based exclusively on the 

provision of benefits." Pls.' Mem. at 15. Plaintiffs further 

contend that the employer members of each Industry Group 

exercise control over their respective Health Benefit Trust. 

Notably, the court is at a disadvantage in determining 

whether the Industry Groups qualify as "employers," as Moda 

presents no argument or evidence in opposition to plaintiffs' 

motion to allow the court to make a fully-informed decision 

based on the pertinent facts. Nonetheless, after review of the 

limited information provided by plaintiffs, I find that issues 

of material fact remain as to whether the Industry Groups 

constitute employers within the meaning of ERISA. 

For example, Associated Industries of the Inland Northwest 

(Associated Industries) 

7 - OPINION AND ORDER 

was purportedly founded in 1964 to 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 7 of 13
support the commercial construction industry. First DeWalt Decl. 

at 2. However, its membership is not limited to employers of a 

particular industry within a particular geographical area. 

Instead, the bylaws set forth the following qualifications for 

membership: 

Any corporation, limited liability company, 

partnership, sole proprietorship engaged in industry, 

manufacturing, merchandising, · service or other 

business activities is eligible for membership as an 

employer member of Associated Industries of the Inland 

Northwest. Any association, corporation or otherwise, 

whose members are similarly engaged, is likewise 

eligible for membership as an association member. 

Second DeWalt Decl. Ex. F at 1. Thus, by its terms, Associated 

Industries' bylaws impose no geographical or specific industry 

limitation on membership, and members need not be an employer to 

qualify for an "association" membership. Therefore, Associated 

Industries lacks the employer and commonality requirements to 

constitute an "employer" within the meaning of ERISA. Gruber, 

159 F.3d at 788; DOL Op. No. 2005-24A (an association is not a 

bona fide association of employers "where membership in a group 

or association is open to anyone engaged in a particular trade 

or profession regardless of their status as employer") . 

At the same time, participation in the sponsored Health 

Benefit Trust is limited to Associated Industries' members who 

have a "principal business purpose in the building and 

construction industry~" Second DeWalt Decl. Ex. L at 2. The DOL 

8 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 8 of 13
has advised that industry association "members who are 

participating employers in [a benefit plan] are, at least in 

form, a bona fide group or association of employers that can act 

as an 'employer' within the meaning of section 3(5) of ERISA for 

the purpose of establishing and maintaining the [benefit plan] 

as a single employee welfare benefit plan." DOL Op. No. 2003-

13A. Thus, even if Associated Industries cannot itself be 

considered an "employer," the Associated Industries members who 

participate in the relevant Health Benefit Trust could be 

considered an "employer" under ERISA. 

With that said, plaintiffs present insufficient information 

to establish that Associated Industries' employer members have a 

"history of organized cooperation on employment-related matters 

and a genuine organizational relationship through their 

membership" in Associated Industries. See id. Plaintiffs 

maintain that Associated Industries has a history of sponsoring 

organized activities, including economic activities, educational 

opportunities, industry training, business promotions, and other 

events and seminars relating to the commercial construction 

industry. First DeWalt Decl. at 2. However, plaintiffs do not 

clarify whether and to what degree Associated Industries' 

employer members participate in these activities, and plaintiffs 

provide no documentation of these events or activities. Further, 

plaintiffs provide limited information regarding the Associated 

9 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 9 of 13
Industries' employer members who participate in the Health 

Benefit Trust, and whether those members, in form and in 

substance, actually control the relevant Health Benefit Trust. 

Therefore, I find that questions of fact preclude summary 

judgment. DOL Op. No. 2003-13A ("The question of whether the 

Fund is subject, not only in form, but also in substance, to the 

control of the AICP producer members who are participating 

employers is an inherently factual issue on which the Department 

generally will not rule in an advisory opinion."). 

As to the remaining Industry Groups, their bylaws generally 

limit membership to specific industry employers within 

Washington State. See Second DeWalt Decl. Exs. A-E. While 

industry alignment may establish a bona fide employer 

association, a "genuine organizational relationship" must 

nonetheless exist between the members .. DOL Op. No. 2005-24A. As 

with Associated Industries, I find that plaintiffs present 

insufficient evidence to establish, as a matter of law, such a 

relationship between and amongst the employer members of each 

Industry Group. 

Plaintiffs assert that the Greater Columbia Manufacturing 

Industry Group (GCMIG) was founded in 1989 by "industry members 

in order to form a workers compensation retrospective rating 

group." Buffington Decl. at 2. Plaintiffs maintain that GCMIG 

"engages in workplace 

10 - OPINION AND ORDER 

safety training and health issues, 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 10 of 13
including hosting a monthly safety roundtable to address safety 

and process improvement for the manufacturing industry." Id. 

Apparently, GCMIG also participated in a September 2014 

convention. Id. 

Plaintiffs similarly assert that the Columbia Retail 

Industry Group (CRIG) was founded in 1991, for the same reasons 

as GCMIG. Poffenroth Decl. at 2. Apparently, CRIG "engages in 

safety training and education on health issues and also hosts 

safety trainings, seminars, trade shows and other industry 

events each year." Id. The CRIG also intends to participate in 

"an upcoming webcast related to data storage and record 

retention," as well as wage and hour issues in the retail 

industry. Id. 

The Pacific Business Resource Industry Group ( PBRIG) was 

purportedly founded in 1954 to support human resources and 

employment issues in the business services industry. Guarisco 

Decl. at 2. PBRIG "has had access to and has participated in a 

number of education programs of relevance to this group." Id. 

Plaintiffs assert that the Greater Northwest Health 

Industry Group (GNHIG) was founded in 1954 "to support human 

resources, labor and employment issues in the healthcare 

industry." McFaul Decl. at 2. Plaintiffs claim that GNHIG has 

"hosted healthcare industry education programs, including a 

seminar on tax and audit issues in health care" and "has 

11 - OPINION AND ORDER 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 11 of 13
upcoming web events related to wage and hour issues related to 

the industry." Id. 

Finally, plaintiffs assert that ALL tech Information 

Technology Group (ALLtech) ~was founded in 2008 by industry 

members to promote the technology industry in Washington State." 

Tanner Decl. at 2. Plaintiffs contend that ALLtech has sponsored 

annual achievement awards to recognize technology companies, a 

prediction event representing companies and technology trending 

in the industry, CEO roundtable training, and a human resources 

roundtable. Id. 

I do not find that these supporting declarations 

sufficiently establish a common economic or representative 

interest among each Industry Group's members, unrelated to the 

health plans. While the supporting declarations assert that the 

Industry Groups had access to, engaged in, participated in or 

sponsored certain educational and training programs, plaintiffs 

provide no documentation to establish who actually planned, 

attended or participated in the events. Further, the supporting 

declarations do not describe how employer members are solicited, 

who participates in each Industry Group, or how often the group 

meets or for what purpose. 

Likewise, plaintiffs present no evidence regarding the 

processes by which the 

plaintiffs give scant 

12 - OPINION AND ORDER 

Industry Groups were 

information regarding 

formed, and 

the powers, 

Case 3:14-cv-01711-AA Document 32 Filed 07/16/15 Page 12 of 13
privileges and rights of employer-members, aside from the right 

to participate in the sponsored health plan. Finally, as with 

Associated Industries, plaintiffs do not provide adequate 

evidence to show that the members of the Industry Groups control 

the Health Benefit Trusts, in form and in substance. 

In sum, the court is unable to declare that t.he Industry 

Groups meet the commonality or control requirements for bona 

fide employer a·ssociations based on the limited information 

provided by plaintiffs. Additional information and documentation 

is needed before the court may make such a determination as a 

matter of law. Accordingly, the motion for summary judgment is 

denied. 

CONCLUSION 

For the reasons set forth above, plaintiffs' Motion for 

Summary Judgment (doc. 8) is DENIED. 

IT IS SO ORDERED. 

DATED this of July, 2015. 

Ann Aiken 

United States District Court 

13 - OPINION AND ORDER 

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