Opinion ID: 3030887
Heading Depth: 2
Heading Rank: 4

Heading: Appellants Fail to State a Claim With Respect

Text: to the Insufficiency of the Summary Plan Description. Appellants allege in Count IV of their amended complaint that the summary plan description is insufficient under 29 U.S.C. § 1022(a), because it fails to disclose (1) that the cash balance plan reduces accrual rates based on a participant’s age, and (2) that the cash balance plan does not retain the early retirement subsidy available under the old plan. 29 U.S.C. § 1022(a) provides, [t]he summary plan description . . . shall be written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan. A summary of any material modification in the terms of the plan and any change in the information required under subsection (b) of this section shall be written in a manner calculated to be understood by the average plan participant and shall be furnished in accordance with section 15 We express no opinion on whether the notice would satisfy current law. 24 1024(b)(1) of this title.16 With respect to appellants’ first contention set forth above, PNC’s allocations to participants under the cash balance plan are not reduced on account of age, and thus it hardly would have been appropriate to say that they were. The district court dismissed appellant’s second contention as it concluded that the average plan participant would recognize that the early retirement subsidy, by its omission from the summary plan description, was being terminated. This conclusion gives rise to the single factual matter in dispute in this litigation to which we made reference at the outset of this opinion. But even assuming that appellants are correct that this conclusion required factual findings the making of which was inappropriate at the motion to dismiss stage of the litigation, appellants nevertheless fail to state a claim upon which relief may be granted with respect to nondisclosure of the termination of the early retirement subsidy because there would not be a remedy available under ERISA to them even if the district court’s conclusion with respect to the plan participants’ perception was incorrect. Indeed, at oral argument before us appellants could not identify with specificity the appropriate relief for this violation if there was one. In the “Prayer for Relief” section of their amended complaint, appellants seek relief under 29 U.S.C. §§ 1132(a)(2) and (a)(3). However, section 1132(a)(2) is not applicable to the summary plan description allegations in Count IV because (a)(2) applies only to liability for breach of fiduciary duty, a matter not at issue on this appeal.17 Under section (a)(3), participants may seek “(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.” While (A) does not apply as there is no act or practice to enjoin with respect to the allegedly misleading summary plan description, appellants arguably can ask for “appropriate equitable relief . . . to redress [the disclosure] violations,” 16 Subsection (b) requires that the summary plan description contain certain categories of information, all of which the PNC summary plan description included. 29 U.S.C. § 1022(b). 17 The district court dismissed appellants’ breach of fiduciary duty claims and they have not raised the dismissal of the claims as an issue on this appeal. 25 under section 1132(a)(3)(B)(i). However, we have indicated that “substantive remedies are generally not available for violations of ERISA’s reporting and disclosure requirements” except “where the plaintiff can demonstrate the presence of extraordinary circumstances.” Jordan v. Fed. Express Corp., 116 F.3d 1005, 1011 (3d Cir. 1997) (quoting Ackerman v. Warnaco, Inc., 55 F.3d 117, 124 (3d Cir. 1995)). While we “have not provided a rigid definition of ‘extraordinary circumstances,’” such circumstances “generally involve acts of bad faith on the part of the employer, attempts to actively conceal a significant change in the plan, or commission of fraud.” Id. In this case, viewing the allegations in the light most favorable to appellants, Count IV of the amended complaint is devoid of any allegation that even approaches “extraordinary circumstances” as we defined it in Jordan. Rather, paragraph 67 of the amended complaint states, “On information and belief, Defendants distributed to participants a Summary Plan Description (“SPD”) of the Plan, as amended by the new Cash Balance Formula. The SPD, however, fails to disclose the Cash Balance Formula’s failure to include the protected early retirement subsidy . . . .” The allegation does not assert that PNC acted in bad faith, nor does it allege that PNC attempted to “actively conceal” the termination of the early retirement subsidy or that PNC committed fraud. Instead, according to the amended complaint, PNC merely “fail[ed] to disclose” the termination of the subsidy and the alleged reduction of future benefit accruals. Thus, appellants have not set forth an “extraordinary circumstance” that triggers equitable remedies under section 1132(a)(3)(B)(i). Accordingly, we will affirm the order dismissing Count IV.