931 F.3d 269
4th Cir.2019Background
- NCG offered a group life insurance Plan administered by insurer Unum; NCG was identified in the SPD as the Plan administrator and named fiduciary.
- Wayne Murdock, an NCG employee, elected $150,000 life coverage and paid premiums through NCG; he moved from full-time to part-time status and may have become ineligible.
- NCG allegedly failed to inform or misinformed Wayne about continued eligibility and did not notify him of conversion/port options; Wayne continued paying premiums and died.
- Unum denied the beneficiary claim because Wayne was ineligible and failed to convert/port; NCG VP Baham repeatedly told beneficiary Rema the claim would be paid and later advised her not to appeal.
- Rema sued NCG under ERISA § 502(a)(3) alleging breaches of fiduciary duty (failure to inform Wayne; advising Rema not to appeal). District court dismissed under Rule 12(b)(6), finding NCG and Baham were not fiduciaries for the challenged acts. Fourth Circuit vacated and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NCG is a fiduciary because it is named fiduciary and plan administrator | Dawson-Murdock: naming and administrator role suffices to allege fiduciary status | NCG: despite titles, its acts were merely administrative and Unum made benefit decisions, so no fiduciary status | Court: being named fiduciary and plan administrator generally supports pleading fiduciary status; dismissal for failure to allege fiduciary status was erroneous |
| Whether NCG’s failure to inform/misinform Wayne about eligibility and conversion/port was fiduciary activity | Dawson-Murdock: verifying eligibility and correcting misinformation are fiduciary duties; silence or misinformation can breach fiduciary duty | NCG: such activities are ministerial and do not create fiduciary obligations here | Court: allegations plausibly show fiduciary activity (verifying eligibility and advising participants), so claim survives pleading stage |
| Whether Baham’s advice to beneficiary not to appeal Unum’s denial was fiduciary activity | Dawson-Murdock: tailored, repeated advice about appeals is fiduciary communications affecting administration | NCG: statements were administrative or repetitions, not discretionary fiduciary acts | Court: individualized, authoritative advice by a plan administrator’s employee can be fiduciary activity; claim plausibly alleged |
| Proper standard at Rule 12(b)(6) stage for pleading ERISA fiduciary breach | Dawson-Murdock: pleadings should be construed favorably; naming and alleged conduct suffice | NCG: must allege discretionary control under §1002(21)(A) to show fiduciary status | Court: accept factual allegations; named fiduciary/administrator status and pleaded conduct can plausibly establish fiduciary status without separate §1002(21)(A) showing at pleading stage |
Key Cases Cited
- Mertens v. Hewitt Assocs., 508 U.S. 248 (recognizes a named fiduciary is an ERISA fiduciary)
- Varity Corp. v. Howe, 516 U.S. 489 (conveying information about plan benefits can be fiduciary activity)
- Tibble v. Edison Int’l, 135 S. Ct. 1823 (ERISA fiduciary duties derive from trust law; duty standards)
- Griggs v. E.I. DuPont de Nemours & Co., 237 F.3d 371 (plan administrator may have duty to correct participant misunderstandings; silence can be breach)
- Gordon v. CIGNA Corp., 890 F.3d 463 (employer as plan administrator can be fiduciary for eligibility/administration-related duties)
- Tatum v. RJR Pension Inv. Comm., 761 F.3d 346 (named fiduciaries are proper defendants for fiduciary breach suits)
- Coleman v. Nationwide Life Ins. Co., 969 F.2d 54 (must establish fiduciary status before alleging breach)
- Eddy v. Colonial Life Ins. Co. of Am., 919 F.2d 747 (failure to inform an ineligible contributor of ineligibility can state a fiduciary claim)