Hitchcock v. Cumberland University 403(b) DC Plan, 851 F.3d 552

Background

Plaintiffs Eloise Hitchcock and Sheryl Kae were participants in Cumberland University’s 403(b) defined-contribution plan; the Plan previously promised a 5% employer match but was amended to make matching discretionary effective January 1, 2013.
The University announced zero employer matching for 2013–14 and 2014–15 and did not produce an updated Summary Plan Description nor provide formal written notice of the amendment as Plaintiffs requested.
Plaintiffs filed a putative class action alleging (1) wrongful denial of benefits (ERISA § 502(a)(1)(B)), (2) anti-cutback violation (ERISA § 1054(g)), (3) failure to provide notice (ERISA § 502(a)(3)), and (4) breach of fiduciary duty (ERISA § 1104).
The district court treated defendants’ post-answer Rule 12 motion as a Rule 12(c) motion and dismissed the entire case without prejudice so Plaintiffs could administratively exhaust; it also dismissed the notice claim for failure to state a claim.
The Sixth Circuit reversed: it held it had jurisdiction over the appeal, concluded statutory ERISA claims (like anti-cutback and fiduciary-duty claims) do not require administrative exhaustion, and found dismissal of the notice claim premature given lack of discovery and Plaintiffs’ opposition.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Appellate jurisdiction over dismissal without prejudice plus final judgment	District court dismissed entire action and Plaintiffs intended to stand on the complaint; appeal permissible under § 1291	Dismissal without prejudice is non-final and not appealable	Court held jurisdiction existed because the district court dismissed the entire action and entered final judgment, making the order appealable
Whether statutory ERISA claims (anti-cutback, fiduciary duty) require administrative exhaustion	No exhaustion required; these claims challenge plan legality and invoke statutory rights under ERISA	Exhaustion required; defendants urged adopting a nuanced or Third Circuit approach	Court held exhaustion is not required for statutory ERISA claims and Counts II and IV were statutory, not plan-based, claims
Standing to sue under ERISA	Hitchcock and Kae were participants during the amendment period and thus have standing	Plaintiffs did not plead they made contributions during the relevant period so standing lacking	Court held Plaintiffs were participants under ERISA and have standing because employment overlapped the amendment period
Dismissal of notice claim (Count III) for failure to state a claim	Plaintiffs argued dismissal premature because they lacked discovery needed to plead notice details	Defendants argued Plaintiffs failed to plead with particularity and did not respond to dismissal motion	Court held dismissal was erroneous: Plaintiffs opposed the motion and sought discovery; district court should have allowed discovery or amendment rather than dismissing

Key Cases Cited

Central Laborers’ Pension Fund v. Heinz, 541 U.S. 739 (Sup. Ct. 2004) (ERISA’s protection of participants’ reasonable expectations regarding promised benefits)
Costantino v. TRW, Inc., 13 F.3d 969 (6th Cir. 1994) (exhaustion futile where suit challenges legality of retroactive plan amendment)
Durand v. Hanover Ins. Group, Inc., 560 F.3d 436 (6th Cir. 2009) (no exhaustion required when suit challenges legality of plan methodology rather than its interpretation)
Fallick v. Nationwide Mutual Ins. Co., 162 F.3d 410 (6th Cir. 1998) (ERISA has an implied exhaustion requirement for benefits claims)
Stephens v. Pension Benefit Guar. Corp., 755 F.3d 959 (D.C. Cir. 2014) (exhaustion not required for statutory fiduciary claims; judicial expertise in statutory interpretation)
Zipf v. AT & T, 799 F.2d 889 (3d Cir. 1986) (distinguishing plan-based claims from statutory claims; Section 503 applies to benefit claims)
Thornton v. Graphic Commc’ns Conference, 566 F.3d 597 (6th Cir. 2009) (anti-cutback rule protects accrued benefits)
Semerenko v. Cendant Corp., 223 F.3d 165 (3d Cir. 2000) (finality principles for appealability)
Clemens Tr. v. Morgan Stanley DW, Inc., 485 F.3d 840 (6th Cir. 2007) (when dismissal of entire action without prejudice may be treated as final for appeal)
Yeager v. United States, 303 F.3d 661 (6th Cir. 2002) (court of appeals independently evaluates appellate jurisdiction)
Mason v. Continental Group, 763 F.2d 1219 (11th Cir. 1985) (discussing exhaustion requirement for statutory claims)