Girl Scouts of Middle Tennessee, Inc. v. Girl Scouts of the U.S.A.
770 F.3d 414
6th Cir.2014Background
- GSMT (Tennessee council) participated in GSUSA’s national defined‑benefit pension Plan via a 1974 Voluntary Participation Agreement that made GSUSA Plan administrator and authorized GSUSA to set contribution rates and amend the Plan, but stated GSUSA was "subject at all times to [GSMT’s] instructions."
- GSUSA reorganized council structure (Realignment) and amended the Plan (including VERIP and an arbitration provision), resulting in expanded benefit eligibility and, according to GSMT, substantially increased Plan liabilities.
- The Plan ran from a surplus in 2007 to a large deficit by 2011, and GSUSA raised councils’ contribution rates substantially; GSMT (one of the few councils still in surplus) sought to withdraw and form a spinoff but GSUSA refused.
- GSMT sued GSUSA alleging (1) declaratory relief that GSMT may withdraw and is not bound by GSUSA’s unilateral amendments, (2) breach of contract and fiduciary duty, (3) accounting and injunctive relief restraining contribution collection, and (4) alternatively that GSMT’s grant of authority was ultra vires under Tenn. Code Ann. § 48‑53‑104.
- The district court dismissed under Fed. R. Civ. P. 12(b)(6): ERISA and state common‑law claims were preempted; federal common law should not be created to provide GSMT a remedy; and the Tennessee ultra vires claim was insufficiently pleaded. The Sixth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GSMT may pursue ERISA remedies as an employer in a multiple‑employer (ERISA “single‑employer” catch‑all) plan | GSMT: ERISA is silent re: employers in this context, so it should be allowed to enforce contractual/fiduciary rights or federal common law should supply a remedy | GSUSA: ERISA’s civil enforcement scheme (§502 and related provisions) lists exclusive categories of plaintiffs and does not authorize employers like GSMT to sue here | Held: GSMT lacks an ERISA cause of action; dismissal affirmed — ERISA provides the enforcement scheme and did not grant GSMT §502 standing |
| Whether state common‑law contract/fiduciary claims are preempted by ERISA | GSMT: state remedies should remain available | GSUSA: state common‑law claims that duplicate/supplement ERISA remedies are preempted | Held: State common‑law breach and fiduciary claims are preempted because they relate to an ERISA plan and would duplicate ERISA remedies |
| Whether federal common law should be created to vindicate GSMT’s contract/fiduciary claims | GSMT: ERISA’s silence/ gaps and ERISA’s policies (encouraging benefits, preserving solvency) justify interstitial federal common law to allow employer suits | GSUSA: Courts may not use federal common law to add parties or remedies excluded by ERISA’s detailed enforcement scheme; Whitworth is narrow and not controlling here | Held: No new federal common law. ERISA is not silent in the relevant sense; Congress intentionally limited §502 claimants; creation of a federal cause would improperly rewrite ERISA |
| Whether GSMT pleaded an ultra vires claim under Tenn. Code Ann. § 48‑53‑104 (state statute) | GSMT: its delegation to GSUSA was ultra vires and void (alternative claim) | GSUSA: the complaint lacked factual allegations supporting an ultra vires claim; ERISA likely preempts anyway | Held: Dismissed for failure to plead facts showing ultra vires conduct; claim also preempted by ERISA |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (federal courts may develop federal common law to fill ERISA gaps where ERISA is silent or ambiguous)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) (state‑law causes of action that duplicate or supplement ERISA’s civil enforcement are preempted)
- Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985) (ERISA §502 provides the exclusive civil enforcement scheme for many ERISA claims)
- Whitworth Bros. Storage Co. v. Cent. States, Se. & Sw. Areas Pension Fund, 794 F.2d 221 (6th Cir. 1986) (limited recognition of federal common‑law restitution for mistaken contributions; holding narrowly construed)
- Local 6‑0682 Int’l Union v. Nat’l Indus. Grp. Pension Plan, 342 F.3d 606 (6th Cir. 2003) (limits on creating federal common law where ERISA provides a statutory remedy)
- Muse v. Int’l Bus. Machs. Corp., 103 F.3d 490 (6th Cir. 1996) (ERISA permits federal common law only where silent or ambiguous)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard requiring factual plausibility)
- Great‑West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) (courts should not rely on broad statutory purposes to override specific statutory text)