Central States, Southeast & Southwest Areas Health & Welfare Fund Ex Rel. Bunte v. American International Group, Inc.
840 F.3d 448
| 7th Cir. | 2016Background
- Central States is a self-funded ERISA health plan that paid ~$343,000 in medical expenses for student-athletes who also had coverage under independent insurers' policies.
- The plan's trustee sued the insurers in federal court under ERISA §502(a)(3) seeking: declarations that insurers are primarily liable for past and future medical claims; an equitable lien on insurers' funds; and reimbursement via restitution/unjust enrichment/subrogation.
- The insurers moved to dismiss; the district court dismissed the claim for future medical expenses as unripe and the remaining claims for failure to state a claim, reasoning the relief sought was legal, not equitable, under §502(a)(3).
- The Seventh Circuit affirmed: (1) declaratory relief as to hypothetical future injuries/claims is unripe; and (2) restitutionary relief seeking reimbursement from insurers’ general assets is legal relief and therefore not available under §502(a)(3).
- The court relied on Supreme Court precedents (Mertens, Great‑West, Sereboff, McCutchen, Montanile) limiting “appropriate equitable relief” to traditional equitable remedies tied to specifically identifiable or traceable funds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ripeness of declaratory relief for "current unpaid and future medical expenses" | Trustee: declaratory relief about prospective claims is appropriate to fix primary liability. | Insurers: future claims are hypothetical; no immediate controversy. | Future-claims declaration is unripe; dismissed for lack of subject-matter jurisdiction. |
| Whether §502(a)(3) authorizes reimbursement from insurers | Trustee: relief is equitable (restitution, equitable lien, subrogation) to enforce plan terms. | Insurers: trustee seeks money from insurers' general assets — legal relief not equitable. | Relief sought is legal (monetary reimbursement from general assets); §502(a)(3) does not authorize it. |
| Whether framing relief as equitable suffices | Trustee: labels (restitution/unjust enrichment) make relief equitable. | Insurers: Supreme Court requires specifically identifiable/traceable funds in defendant's possession. | Labels insufficient; must identify specific funds or traceable property—trustee did not. |
| Applicability of precedent/ERISA purpose argument | Trustee: ERISA’s purposes (protect plan assets/enforce terms) justify allowing suit. | Insurers: textual and Supreme Court precedent control; policy arguments cannot override text. | Court refused to expand §502(a)(3) based on purpose; followed controlling Supreme Court precedent. |
Key Cases Cited
- Mertens v. Hewitt Assocs., 508 U.S. 248 (1993) (equitable relief under §502(a)(3) limited to remedies traditionally available in equity)
- Great‑West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) (recovery from defendant's general assets is legal, not equitable)
- Sereboff v. Mid Atlantic Med. Servs., Inc., 547 U.S. 356 (2006) (equitable lien appropriate when plaintiff can identify particular funds held by defendant)
- US Airways, Inc. v. McCutchen, 569 U.S. 88 (2013) (clarifies interplay of equitable remedies and plan terms/limitations)
- Montanile v. Bd. of Trs. of Nat’l Elevator Indus. Health Benefit Plan, 577 U.S. 136 (2016) (recovery against general assets is legal; plaintiff must show funds remain traceable in defendant's possession)
- Solo Cup Co. v. Fed. Ins. Co., 619 F.2d 1178 (7th Cir. 1980) (declaratory relief concerning speculative future claims is unripe)