Daniel Soehnlen v. Fleet Owners Ins. Fund
844 F.3d 576
| 6th Cir. | 2016Background
- Superior Dairy (employer), its CEO Daniel Soehnlen, and employee/union steward Bill Reeves sued Fleet Owners Insurance Fund (a multi-employer welfare/health plan) and three trustees, alleging violations of ERISA, the ACA, the Taft‑Hartley Act, and breach of contract/other state claims arising from the Plan’s use of annual/lifetime benefit caps.
- Superior Dairy signed a Participation Agreement referencing the Plan’s Trust Agreement; plaintiffs allege trustees assured compliance with federal law but the Plan retained pecuniary caps contrary to the ACA.
- Plaintiffs sought class relief and individual relief: benefits, injunctive/declaratory relief, fiduciary‑duty remedies, statutory fraud under 29 U.S.C. § 1149, Taft‑Hartley relief under 29 U.S.C. § 186, and breach of contract claims tied to the Participation and Trust Agreements.
- The district court dismissed all counts for lack of standing and failure to state claims; plaintiffs appealed each dismissal.
- The Sixth Circuit affirmed: it held plaintiffs lacked Article III standing for their ERISA benefit and monetary claims, found the § 1149 fraud allegations insufficiently particular under Rule 9(b), held the Taft‑Hartley claim foreclosed by Demisay, and found state contract claims preempted by ERISA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for § 1132(a)(1)(B) benefit/monetary claims | Alleged deprivation of ERISA/ACA rights (caps), purchase of supplemental insurance, and risk of incurring benefits beyond caps suffice for injury‑in‑fact | No individualized, concrete injury; paying premiums into a noncompliant plan is not a concrete Article III injury | Dismissed for lack of Article III standing; statutory cause of action alone insufficient (Spokeo/Lujan) |
| Scope of § 1132(a)(3) — injunctive vs monetary relief | Seek injunction and monetary/declaratory relief to compel Plan compliance | Monetary equitable relief under § 1132(a)(3) requires individualized financial harm; injunction still needs concrete injury where relief would change individualized benefits/admin | Monetary claims dismissed for lack of standing; injunction cannot proceed absent showing of concrete/individualized injury tied to alleged violations |
| Fiduciary duty claims under §§ 1132(a)(2)/(3) | Plaintiffs may seek injunctive relief for fiduciary breaches without individualized harm | Injunctive relief under fiduciary theories requires showing of particularized concrete injury or a non‑speculative risk to the plan | Dismissed for lack of standing: plaintiffs failed to show actual or imminent injury to plan or concrete risk of enforcement penalties |
| Claim under 29 U.S.C. § 1149 (fraud in sale/marketing of MEWA) | Trustees made false promises that the Plan complied with ERISA/ACA, inducing Superior Dairy to join | Section 1149 claims (fraud‑based) must be pleaded with Rule 9(b) particularity; complaint lacks time, place, speaker, and content details | Dismissed for failure to plead with required particularity under Rule 9(b) |
| Taft‑Hartley § 186(c)(5) challenge | Plan fails to identify neutral third party for deadlocks; seek relief under § 186 provisions | Demisay bars § 186 jurisdiction over claims that challenge plan administration/operation rather than the purpose for which the trust was established | Dismissed: Demisay precludes § 186 claims that merely challenge plan administration; plaintiffs alleged no unlawful purpose at establishment |
| State law breach of contract claims | Superior Dairy (party to agreements) alleges breaches of Participation/Trust Agreements independent of ERISA | Contract claims necessarily require adjudication of ERISA rights/obligations and thus are preempted | Preempted by ERISA § 514; state contract claims duplicate/supplement ERISA remedies and were dismissed |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (an injury‑in‑fact must be both particularized and concrete; statutory violation alone does not automatically satisfy Article III)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requires concrete and particularized injury that is actual or imminent)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading under Rule 12(b)(6))
- CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (ERISA § 1132(a)(1)(B) enforces plan terms; courts cannot rewrite plan terms under that provision)
- Varity Corp. v. Howe, 516 U.S. 489 (1996) (ERISA § 1132(a)(3) is a ‘‘catch‑all’’ equitable provision for violations not remedied elsewhere)
- Demisay v. Local 144 Nursing Home Pension Fund, 508 U.S. 581 (1993) (§ 186 jurisdiction does not extend to claims challenging administration/operation inconsistent with § 186(c)(5))
- Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) (ERISA preempts state laws that provide alternative enforcement mechanisms inconsistent with ERISA)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) (state law claims that duplicate, supplement, or supplant ERISA civil enforcement are preempted)
- Loren v. Blue Cross & Blue Shield of Mich., 505 F.3d 598 (6th Cir. 2007) (ERISA standing requires Article III injury; distinguishes fiduciary‑duty injunctive claims from individual benefit claims)