In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 04-3193

BARBARA CLER,

Plaintiff-Appellant,

v.

ILLINOIS EDUCATION ASSOCIATION,

NATIONAL EDUCATION ASSOCIATION,

IEA UNIFIED LEGAL SERVICES

PLAN, and KATE FRANK/DUSHANE

UNIFIED LEGAL SERVICES PROGRAM,

Defendants-Appellees.

____________

Appeal from the United States District Court

for the Central District of Illinois.

No. 04 C 2011—David G. Bernthal, Magistrate Judge.

____________

ARGUED FEBRUARY 7, 2005—DECIDED SEPTEMBER 9, 2005

____________

Before ROVNER, WILLIAMS, and SYKES, Circuit Judges.

SYKES, Circuit Judge. When Barbara Cler was terminated

from her job as a schoolteacher, she asked her union’s legal

services plan to provide her with an attorney for purposes

of pursuing an employment action against her former

employer. When the union refused her request, Cler hired

an attorney at her own expense and was ultimately successful in her case. In the present action, Cler contends that the

defendants wrongfully denied her request for legal services
2 No. 04-3193

1 In documents filed with the district court, the IEA plan asserted

that there is no entity properly known as the “IEA Unified

Services Plan” and that the organization’s proper name is the

“IEA-NEA Legal Services Program.”

and seeks to recoup the approximately $25,000 she was

forced to spend in retaining an attorney on her own. The

district court dismissed the case on the defendants’ motion

pursuant to FED. R. CIV. P. 12(b)(6), holding that the only

claim providing a basis for federal jurisdiction—specifically,

under the Employee Retirement Income Security Act of

1974, 29 U.S.C. §§ 1001 et seq. (“ERISA”)—failed to state a

claim upon which relief could be granted. We reverse.

I. Background

The first task in resolving this appeal is identifying

the defendant(s) against whom the various claims in the

complaint are asserted, an inquiry that should be straightforward but has been complicated by the complaint’s

confusing structure and cavalier approach to grammatical

usage. The caption and opening paragraph of the complaint

identify four separate entities as defendants, two of which

are labor unions—the Illinois Education Association (“IEA”)

and the National Education Association (“NEA”). The

remaining two defendants are alleged to be welfare benefit

plans sponsored by the defendant unions—the IEA Unified

Legal Services Plan (“IEA plan”) and the Kate

Frank/DuShane Unified Legal Services Program (“DuShane

plan”).1

After asserting the separate existence of these four

defendants, the complaint immediately becomes subsumed

in confusion as to whether, and to what extent, the two

labor unions and two legal services plans are considered

separate and distinct entities for purposes of the claims
No. 04-3193 3

2 The other two counts in the complaint are state law claims for

breach of contract. 

in the lawsuit. Paragraph two of the complaint reads in

part: “The Defendants [IEA] and [NEA] are a labor

union . . . .” Paragraph three reads in part: “The plans,

[DuShane plan] and [IEA plan], is an employee benefit plan

. . . .” There is an obvious disconnect between the plural

subjects of these sentences and their corresponding singular

objects or verb tenses. The confusion generated by this

careless usage is exacerbated by subsequent factual allegations referring only to “the Defendant” or “the

Defendant union,” without specifying which of the two

unions or four defendants is intended. For example, the

complaint alleges that “the Plaintiff made several requests

of the Defendant that an attorney be appointed on her

behalf” and “Plaintiff went to the Defendant union and

requested that they provide legal representation for

her . . . .” In short, it is difficult to assay the complaint

and come away confident as to which defendant is being referenced at any given point.

This lack of clarity spills over into the third and final

count of the complaint, in which it is alleged that the

defendant(s)’ failure to provide Cler with legal representation constituted a denial of benefits to which she was

entitled under the terms of a welfare benefit plan, in

violation of ERISA. This claim, by virtue of its invocation of

ERISA, provides the sole basis for Cler’s assertion of federal

jurisdiction.2

 The DuShane plan is mentioned by name in

Count III, but there is no overt mention of the IEA plan.

However, in the five paragraphs comprising Count III, the

words “defendant” and “defendants” are used. For example,

paragraph twenty of the complaint alleges that “the

defendants failed to provide benefits to her which she was

entitled [sic] under the plan in violation of the provisions of

ERISA.” As in other parts of the complaint, this allegation
4 No. 04-3193

refers to plural defendants but a singular “plan.” Count III

of the complaint also references an exhibit described as an

excerpt from “the Defendant unions’ booklet relating to

providing legal representation.” This allegation uses the

plural “unions” and the exhibit appears to be two pages

taken from an overview of services provided jointly by the

NEA and IEA to its members.

All four defendants moved to dismiss. The district

court construed Count III as leveled only against the

DuShane plan. The court then held that the DuShane

plan was not a “welfare benefit plan” for purposes of ERISA

because the scope of legal services it provided to members

was limited to employment-related matters. This limitation,

in the district court’s view, took the DuShane plan outside

ERISA’s definition of a welfare benefit plan. That definition

includes plans that provide “prepaid legal services,” which

the court construed as meaning “personal legal services”

only, not legal services relating to employment matters. The

court also held that the DuShane plan did not qualify as

a welfare benefit plan because it did not provide benefits directly to participants such as Cler and instead only

reimbursed state affiliates (such as the IEA) for legal

expenses incurred “under delineated circumstances.”

Having determined that the DuShane plan was not a

welfare benefit plan within the meaning of ERISA, the

district court held that Count III failed to state an ERISA

claim, and also declined to exercise supplemental jurisdiction over the state law contract claims. Accordingly, the

court dismissed the action in its entirety.

II. Discussion

A. Construction of Count III of the Complaint

Cler argues on appeal that she intended to bring Count

III, the ERISA claim, against both the IEA plan and the
No. 04-3193 5

DuShane plan and that her failure to specifically name the

IEA plan in Count III was an obvious oversight that

was improperly seized upon by the district court as a

basis to dismiss her complaint. She argues that her intention to bring Count III against more than one defendant

was clear enough under the liberal rules of notice pleading

and that the district court erred when it analyzed only

whether the DuShane plan was a welfare benefit plan for

purposes of ERISA. Cler points to the fact that earlier in

the complaint she clearly alleged that both the IEA and

DuShane plans are welfare benefit plans for purposes of

ERISA, thereby putting the defendants on notice that she

was pursuing ERISA claims against both entities.

A motion under Rule 12(b)(6) challenges the sufficiency of

the complaint, and dismissal of an action under the rule is

warranted only if “no relief could be granted under any set

of facts that could be proved consistent with the allegations.” DeWalt v. Carter, 224 F.3d 607, 612 (7th Cir. 2000).

We review a district court’s grant of a 12(b)(6) motion de

novo, accepting the well-pleaded allegations in the complaint as true and drawing all reasonable inferences in

favor of the plaintiff. Gen. Elec. Capital Corp. v. Lease

Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997).

Working hand in glove with Rule 12(b)(6) is FED. R. CIV.

P. 8, subsection (a) of which requires a plaintiff’s complaint

to contain a “short and plain statement” of his claim and

the basis for federal jurisdiction, and subsection (f) of which

instructs the courts that “[a]ll pleadings shall be so construed as to do substantial justice.” Rule 8(a) thus requires

only a “short and plain statement of the claim that will give

the defendant fair notice of what the plaintiff’s claim is and

the grounds upon which it rests.” DeWalt, 224 F.3d at 612.

In this regard, the Supreme Court has cautioned that “[t]he

Federal Rules reject the approach that pleading is a game

of skill in which one misstep by counsel may be decisive to

the outcome and accept the principle that the purpose of
6 No. 04-3193

pleading is to facilitate a proper decision on the merits.”

Conley v. Gibson, 355 U.S. 41, 48 (1957); see also Luckett v.

Rent-A-Center, Inc., 53 F.3d 871, 873 (7th Cir. 1995)

(“District judges must heed the message of Rule 8: the

pleading stage is not the occasion for technicalities.”).

The liberal construction given to a complaint, combined

with the minimal notice pleading requirements of Rule 8

and our obligation to draw all reasonable inferences in

Cler’s favor, persuade us that the district court read the

complaint too narrowly in determining that the DuShane

plan was the only defendant alleged to have violated

ERISA. As we have noted, the complaint is anything but

a model of clarity, but neither absolute clarity nor proper

attention to grammatical norms is a necessary prerequisite

to surviving a Rule 12(b)(6) motion. The inexact wording of

the complaint is undeniably confounding; the motion to

dismiss presented the district court with the option of either

construing Count III broadly and liberally so as to include

both the DuShane and IEA plans or narrowly so as to

exclude the IEA plan from consideration. The court’s

decision to construe Count III narrowly is inconsistent with

Rule 8 and with the obligation to draw all inferences in

favor of the nonmoving party when resolving a motion to

dismiss. The dismissal order must therefore be reversed.

B. “Prepaid Legal Services” under ERISA

Because of its erroneously narrow reading of the complaint, the district court did not consider whether the IEA

plan was a welfare benefit plan under ERISA. The court did

conclude, however, that the DuShane plan was not

a welfare benefit plan because it did not offer “prepaid legal

services.” Under the definition of “welfare benefit plan”

contained in 29 U.S.C. § 1002(1), the plans at issue in this

suit would fall under the auspices of ERISA if they satisfied

each of the following five elements: “(1) a plan, fund, or
No. 04-3193 7

3 The unedited version of the definition provides that a welfare

benefit plan “requires five elements: (1) a plan, fund or program,

(2) established or maintained, (3) by an employer or by an

employee organization, or by both, (4) for the purpose of providing

medical, surgical, hospital care, sickness, accident, disability,

death, unemployment or vacation benefits, apprenticeship or other

training programs, day care centers, scholarship funds, prepaid

legal services or severance benefits, (5) to participants or their

beneficiaries.” Ed Miniat, 805 F.2d at 738. 

4 In United States v. Blood, 806 F.2d 1218, 1219 (4th Cir. 1986),

the defendant was convicted of embezzling from an ERISA

“prepaid legal services plan.” The Fourth Circuit did not have

occasion to specifically define “prepaid legal services” in a manner

that is instructive here, but the court did describe the program at

issue as one where participants were “entitled to certain limited

legal services from private attorneys who had contracted with

[defendant] to provide such services for a percentage of each

member’s dues.”

program[;] (2) established or maintained[;] (3) by an . . .

employee organization . . .[;] (4) for the purpose of providing

. . . prepaid legal services . . .[;] (5) to participants or their

beneficiaries.” See Ed Miniat, Inc. v. Globe Life Ins. Group,

805 F.2d 732, 738 (7th Cir. 1986); Postma v. Paul Revere

Life Ins. Co., 223 F.3d 533, 537 (7th Cir. 2000).3

ERISA does not define the phrase “prepaid legal services”

as used in § 1002(1), and apparently there is a dearth of

case law, in this circuit and elsewhere, that addresses the

scope of the term.4

 “It is a common rule of statutory construction that when the plain language of a statute is clear,

courts need look no farther than those words in interpreting

the statute.” Gildon v. Bowen, 384 F.3d 883, 886 (7th Cir.

2004) (quoting Estate of Cowser v. Commissioner, 736 F.2d

1168, 1171 (7th Cir. 1984)). The district court bypassed the

straightforward meaning of the phrase “prepaid legal

services” in favor of a strained analysis that relied upon

definitions of slightly different phrases found in the Inter-
8 No. 04-3193

5 The Attorney Referral Program offers NEA members in

participating states a 30% discount from the normal fees

charged by private attorneys providing legal services in the areas

of real estate, wills and estates, domestic relations, consumer

protection, and traffic violations. Using this list to define “personal legal services,” the district court concluded that an ERISA

prepaid legal services plan must offer legal representation to

participants in this particular array of subject matter areas. The

DuShane program, which offers legal services only in the area of

employment disputes (and not real estate, wills, traffic violations,

etc.) did not qualify as an ERISA plan under the district court’s

definition.

nal Revenue Code (“IRC”) and in an NEA publication. This

approach was unwarranted.

Specifically, the court turned to a provision in the IRC

that delineates the circumstances under which an individual’s gross income should include amounts contributed

by her employer to a “qualified group legal services plan.”

26 U.S.C. § 120(b). The district court stated that this

provision of the IRC “defines prepaid legal services,” when,

in fact, it defines a different phrase used in the IRC,

namely, “qualified group legal services plan.” The district

court then noted that the IRC definition included “personal

legal services,” and from this the court reasoned that “one

of the main elements of prepaid legal services is the

provision of ‘personal legal services.’ ” Now needing a

definition of “personal legal services,” the court inexplicably

turned to an NEA publication that used the phrase “personal legal services” in describing the types of legal assistance available under a union-sponsored program called the

“Attorney Referral Program.”5

 What relevance the “Attorney

Referral Program” has in this case escapes us. The district

court stated that the NEA publication “provide[s] additional

guidance as to what may be included in the category

of personal legal services.” The notion that the meaning

of a statutory phrase should be determined by reference
No. 04-3193 9

to a teacher’s union publication is mystifying, to say the

least.

In short, the district court’s construction of the phrase

“prepaid legal services” as used in ERISA was based on

an income tax statute defining a different phrase and a

list of examples of the types of legal assistance available

under an NEA program that apparently has nothing to do

with this lawsuit. The defendants rely on this same convoluted analysis on appeal. This mode of evaluating whether

the complaint states an ERISA claim is clearly flawed.

Our own research has disclosed no cases attempting to

define the phrase “prepaid legal services” as used in ERISA.

We again note that “the cardinal rule is that words used in

statutes must be given their ordinary and plain meaning”

and that we will “frequently look to dictionaries to determine the plain meaning of words.” Sanders v. Jackson, 209

F.3d 998, 1000 (7th Cir. 2000). Black’s Law Dictionary

contains an entry for “prepaid legal services” that reads as

follows: “An arrangement—usually serving as an employee

benefit—that enables a person to make advance payments

for future legal services.” Black’s Law Dictionary 1220 (8th

ed. 2004). For purposes of the present case, coming to us in

the posture of a motion to dismiss, this definition will

suffice. The meaning of the statutory phrase “prepaid legal

services” is not limited to “personal legal services,” whatever the scope of the latter phrase may be.

We express no opinion on the merits of this suit, and

indeed do not decide whether the DuShane plan and/or the

IEA plan are in fact prepaid legal services plans falling

within the scope of ERISA. These are questions the district court will have to answer on remand. Neither do

we find it necessary to attempt to articulate a more precise definition of the term “prepaid legal services,” beyond

what we have noted above, in order to resolve this appeal.

Given the preliminary stage of this litigation, we hold only
10 No. 04-3193

that (1) the district court erred in narrowly construing

Count III of the complaint as asserting a claim against the

DuShane plan only; and (2) the district court erred in

holding that the term “prepaid legal services” in § 1002(1)

is limited to “personal legal services,” and also erred

in determining that the DuShane plan was not an

ERISA welfare benefit plan on the basis of that erroneous

definition.

The judgment of the district court is REVERSED and the

case is REMANDED for proceedings consistent with this

opinion.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—9-9-05