Opinion ID: 1372750
Heading Depth: 1
Heading Rank: 3

Heading: B.2.c. Sufficiency of Pleadings under ERISA 502(a)(3) Claim for Violation of Fiduciary Duties and Violation of Benefit Plan

Text: ERISA § 502(a)(3) allows a plan participant, beneficiary, or fiduciary to bring a civil action: (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan. 29 U.S.C. § 1132(a)(3). Section 502(a)(3) is a catchall for ERISA violations, Varity Corp. v. Howe, 516 U.S. 489, 511, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), that allows courts to provide appropriate equitable relief. 29 U.S.C. § 1132(a)(3). But § 502(a)(3) is not an appropriate means to relief when a plaintiff merely repackage[s] a § 502(a)(1)(B) claim: Where Congress has elsewhere provided means to adequate relief for a beneficiary's injury, there will likely be no need for further equitable relief, in which case [§ 502(a)(3)] relief normally would not be appropriate. Varity, 516 U.S. at 515, 116 S.Ct. 1065. In Varity, the Supreme Court allowed a plaintiff's fiduciary claims based on alleged employer misrepresentations to go forward when the plaintiff lacked a remedy under § 502(a)(1)(B). Id. Although the Varity Court, in allowing the § 502(a)(3) claim, emphasized that the plaintiff could not have brought a § 502(a)(1)(B) claim, the Sixth Circuit sometimes allows a plaintiff to bring claims under both §§ 502(a)(3) and 502(a)(1)(B). Hill v. Blue Cross & Blue Shield of Mich., 409 F.3d 710, 718 (6th Cir.2005). The Hill Court allowed a plaintiff to bring claims under both sections when § 502(a)(1)(B) would not provide the complete relief the plaintiff sought. There the plaintiff complained of an improper methodology for handling all of the ... claims. Hill, 409 F.3d at 718. The Court held that the plaintiff had pleaded sufficient facts to support a § 502(a)(1)(B) for unpaid benefits. But the plaintiff in Hill also brought a claim for injunctive relief under § 502(a)(3) to require the defendant to alter the manner in which it administers all of the ... claims. Id. The Court noted that this § 502(a)(3) claim was for plan-wide injunctive relief, not [for] individual-benefit payments. Id. Although the plaintiff had the ability to seek damages for improperly denied benefits, the Court allowed the plaintiff to proceed on both claims because [o]nly injunctive relief of the type available under § [502(a)(3)] will provide the complete relief sought. Id. Relevant to a § 502(a)(3) claim, the Retiree Plaintiffs sought an injunction to prevent Defendant M & G from terminating their vested benefits in the future. Additionally, the Retiree Plaintiffs sought equitable relief to return them to their position before the Defendants' breach. [9] In appealing the district court's dismissal of their § 502(a)(3) claim, the Retiree Plaintiffs note that they claim allegations of plan-wide breaches of fiduciary duty. The mere recitation of the plan-wide language lifted from Hill will not justify a claim under § 502(a)(3) when § 502(a)(1)(B) relief is available. Hill involved an improper denial of benefits in the past and a current improper methodology for calculating benefits. 409 F.3d at 718. The Retiree Plaintiffs do not present an allegation of a flawed, systemic plan-wide methodology of calculating benefits. [10] Instead, the Retiree Plaintiffs asked the district court for recovery of health benefits due under the plan (including monetary damages), a declaration of their rights to health benefits under the plan, and an injunction prohibiting the plan administrator from modifying or terminating retiree health benefits in the future. All of these remedies are cognizable under § 502(a)(1)(B). See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) (explaining that there are three distinct remedies available under § 502(a)(1)(B): an action ... [1] to recover accrued benefits, [2] to obtain a declaratory judgment that [a participant or beneficiary] is entitled to benefits under the provisions of the plan contracts, and [3] to enjoin the plan administrator from improperly refusing to pay benefits in the future). The Retiree Plaintiffs' additional claims for equitable relief pursuant to § 502(a)(3) are simply repackaged claims for benefits. Because § 502(a)(1)(B) fully provides a means for the relief sought by the Retiree Plaintiffs, further equitable relief pursuant to § 502(a)(3) is unavailable. Accordingly, we affirm the district court's dismissal for the Retiree Plaintiffs' § 502(a)(3) claims for failure to state a claim under Rule 12(b)(6). Before concluding, we also note that, in briefings before the district court, the Retiree Plaintiffs submitted extrinsic evidence alleging that the Defendants made misrepresentations about the Plan. The Retiree Plaintiffs proffered the declaration of a former Plant employee, Rodric R. Ball II, who retired in 1999 when M & G owned the plant. Ball stated that, during a 1998 meeting concerning retirement benefits, employees were promise[d] ... health coverage ... at `no cost.' Declarant Ball provided a two-page document that reads under the heading MEDICAL: Continued coverage at no cost under the current P & I Agreement. Because the Retiree Plaintiffs included none of the facts or allegations Ball described in their Amended Complaint, we decline to consider the declaration. We note, however, that the district court has discretion to permit a second amendment to the complaint when justice so requires. Fed.R.Civ.P. 15(a)(2). [11]
We hold that the district court erred in treating a violation as a jurisdictional prerequisite and that it therefore erred in granting the Defendants' 12(b)(1) motion on the Plaintiffs' § 301 claim. We additionally hold that the district court erred in concluding that the Plaintiffs had failed to state a claim for relief in their Amended Complaint, thereby erring in granting the Defendants' 12(b)(6) motion on the § 301 and ERISA claims. Finally, we affirm the district court's dismissal of the Plaintiffs' § 502(a)(3) claim. Accordingly, we REVERSE and REMAND.