828 F. Supp. 2d 765
E.D. Pa.2011Background
- Decedent employed by Defendant and participated in Defendant’s ERISA plans (401(k), ESPP, and Pension) before his death in 2008.
- Beneficiaries (the Plaintiffs) were named to receive one-third of 401(k) and ESPP assets; distributions were delayed and ultimately split into three Defendant-held accounts with passwords provided by Defendant.
- Pension benefit was estimated at $135,322.01 and later disbursed after initial miss-amounts; Executor Daniel Markert handled the disbursement.
- Plaintiffs filed a six-count state-law complaint in state court in 2010; Defendant removed claiming ERISA preemption and other defenses.
- Plaintiffs moved for leave to amend in 2011; Defendant argued amendments would be futile; court granted in part and denied in part, with instructions to further amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ERISA preempts state-law claims | Plaintiffs allege fiduciary breaches under ERISA; state claims may proceed where independent of benefits. | State claims are preempted by ERISA and ESPP may be non-ERISA. | Plaintiffs’ state claims effectively abandoned; preemption not resolved as to ESPP but state claims waived. |
| Whether the proposed amended claims under ERISA § 1132(a)(2) are viable | LaRue permits individual recovery for fiduciary breaches reducing plan assets in an individual account. | Russell controls; recovery limited to plan benefits, not individuals. | Amendment to assert § 1132(a)(2) claims is viable; individualized relief recognized under LaRue. |
| Whether § 1132(a)(1)(B) claims are cognizable here | Plaintiffs seek to enforce plan terms and their rights under the plan. | Breach is fiduciary duty, not benefits recovery; § 1132(a)(1)(B) inapplicable for fiduciary breach. | Claims cannot be brought under § 1132(a)(1)(B); dismissed as to Count I and II. |
| Whether § 1132(c) claim for information disclosure is viable | Defendant failed to provide passwords and related information timely. | Information requested must relate to ERISA subchapter provisions; passwords lack a specific provision. | Count III as amended is futile; claim dismissed for lack of statutory basis linking passwords to ERISA provisions. |
| Whether leave to amend should be granted | Amendment would cure deficiencies and state valid ERISA claims. | Any amendment would be futile. | Leave to amend granted to allow proper pleading of § 1132(a)(2) claims; other amendments denied as futile. |
Key Cases Cited
- LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248 (U.S. 2008) (defines remedy under § 1132(a)(2) for defined contribution plans to individual accounts)
- Zipf v. AT&T Co., 799 F.2d 889 (3d Cir. 1986) (exhaustion doctrine does not apply to ERISA substantive claims)
- Haberern v. Kaupp Vascular Surgeons Ltd. Defined Ben. Pension Plan, 24 F.3d 1491 (3d Cir. 1994) (1132(a)(1)(B) unavailable for breach of fiduciary duty claims)
- D’Amico v. CBS Corp., 297 F.3d 287 (3d Cir. 2002) (breach of fiduciary duty claims may be independent of benefits claims under ERISA)
- D’Amico v. CBS Corp., 297 F.3d 287 (3d Cir. 2002) (explanation of independence of fiduciary-duty claims from benefits claims)
- Graden v. Conexant Sys. Inc., 496 F.3d 291 (3d Cir. 2007) (interpretation of § 1132(a) claims and ERISA preemption principles)
- Eichorn v. AT&T Corp., 484 F.3d 644 (3d Cir. 2007) (statutory interpretation under ERISA § 1132(a))
- Harrow v. Prudential Ins. Co. of America, 279 F.3d 241 (3d Cir. 2002) (Zipf exception and exhaustion considerations for fiduciary-duty claims)
- Manning v. Haggerty, 2011 WL 4527818 (M.D. Pa. 2011) (standard equating amendment futility with motion to dismiss standard)