76 F.4th 487
6th Cir.2023Background
- Eric Patterson and his wife were enrolled in an ERISA-governed medical plan administered by United; Patterson received a summary plan description (SPD) but not the full plan document initially.
- The SPD stated the plan had a reimbursement right for third-party recoveries; United (through its subsidiary Optum) paid medical bills after Patterson’s accident and later sought reimbursement when Patterson recovered from the tortfeasor.
- Patterson settled the state-court dispute with the plan and paid Optum $25,000, later obtaining the plan document which lacked any reimbursement provision that appeared in the SPD.
- Patterson sued United, Optum, Swagelok, and the plan’s attorneys under ERISA seeking return of his $25,000, injunctive relief, and broader relief alleging a scheme to extract third-party recoveries from beneficiaries.
- The district court dismissed most claims for lack of standing or failure to state a claim and denied leave to amend; the Sixth Circuit reversed in part, holding Patterson has standing to recover the $25,000 and allowing equitable ERISA claims against United and Optum to proceed, while affirming dismissal of other claims and defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue for return of $25,000 and for broader prospective/class relief | Patterson: he suffered concrete injury when he paid $25,000; he also alleged systemic harm to other beneficiaries and the plan supporting broader relief | Defendants: Patterson lacks standing for injuries to other beneficiaries or speculative future injury; only his $25,000 payment is concrete | Court: Patterson has standing only to recover his $25,000; he lacks standing for prospective relief or generalized claims about other beneficiaries or plan underfunding |
| Applicability of Rooker–Feldman | Patterson: his ERISA claims challenge defendants’ conduct and duties, not the state-court judgment | Defendants: this suit improperly attacks state-court proceedings/settlement | Court: Rooker–Feldman does not apply—this is an independent federal ERISA action, not an attempt to reverse a state judgment |
| Availability of equitable relief under 29 U.S.C. § 1132(a)(3) (breach of fiduciary duty and prohibited transactions) and tracing/disgorgement | Patterson: breach of fiduciary duty and improper self-dealing (Optum retained $25,000) support equitable relief (disgorgement/equitable restitution); he adequately pleaded tracing (fund specifically identified) | Defendants: relief is contractual or legal, not equitable; funds are held by the plan, so Patterson cannot trace or obtain equitable restitution/disgorgement from defendants | Court: Both claim bases are equitable; Patterson plausibly alleged Optum retained the $25,000 (a specifically identified fund) so §1132(a)(3) disgorgement/disgorgement-style relief survives dismissal against United and Optum, subject to tracing development on remand |
| Viability of §1132(a)(2) claim and claims against Swagelok/plan attorneys (class amendment) | Patterson: fiduciary breaches impaired plan assets, so §1132(a)(2) and claims against other defendants/co‑fiduciaries are proper; seeks class relief | Defendants: Patterson alleges only personal loss, not plan harm; allegations against Swagelok and attorneys are conclusory and speculative | Court: §1132(a)(2) fails because Patterson alleged no plausible plan-wide injury; claims against Swagelok and attorneys and class amendment were implausible and dismissed for failure to plead factual support |
Key Cases Cited
- CIGNA Corp. v. Amara, 563 U.S. 421 (U.S. 2011) (distinguishes SPD from plan document and explains plan-document rules)
- Varity Corp. v. Howe, 516 U.S. 489 (U.S. 1996) (§ 1132(a)(3) is a vehicle for equitable relief for beneficiaries)
- Sereboff v. Mid Atl. Med. Servs., 547 U.S. 356 (U.S. 2006) (equitable lien and nature-of-remedy framework under ERISA)
- Montanile v. Bd. of Trs. of Nat’l Elevator Indus. Health Benefit Plan, 577 U.S. 136 (U.S. 2016) (tracing requirement for equitable remedies)
- Great–West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (U.S. 2002) (limits on equitable restitution and tracing)
- LaRue v. DeWolff, Boberg & Assocs., 552 U.S. 248 (U.S. 2008) (§ 1132(a)(2) remedies address plan, not merely individual injuries)
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (U.S. 2021) (monetary loss as a concrete injury for standing)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard—plausibility requirement)
- Zirbel v. Ford Motor Co., 980 F.3d 520 (6th Cir. 2020) (identifying a specifically identified fund for tracing under § 1132(a)(3))
- Pipefitters Loc. 636 Ins. Fund v. Blue Cross & Blue Shield of Mich., 722 F.3d 861 (6th Cir. 2013) (fiduciary use of plan funds for own purposes violates ERISA duties)