DOMINIC CATALDO, et al., Plaintiffs-Appellants, v. UNITED STATES STEEL CORPORATION; UNITED STATES STEEL AND CARNEGIE PENSION FUND; UNITED STEELWORKERS OF AMERICA, a.k.a. United Steelworkers; and USX CORPORATION, et al., Defendants-Appellees.
No. 10-3583
United States Court of Appeals for the Sixth Circuit
April 13, 2012
RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206. File Name: 12a0103p.06. Argued: October 6, 2011. Before: MARTIN and GRIFFIN, Circuit Judges; ANDERSON, District Judge.*
COUNSEL
ARGUED: Mark W. Biggerman, Pepper Pike, Ohio, for Appellants. Rodney M. Torbic, UNITED STATES STEEL CORPORATION, Pittsburgh, Pennsylvania, David M. Fusco, SCHWARZWALD, McNAIR & FUSCO, Cleveland, Ohio, for Appellees. ON BRIEF: Mark W. Biggerman, Pepper Pike, Ohio, William A. Carlin, CARLIN & CARLIN, Pepper Pike, Ohio, for Appellants. Rodney M. Torbic, UNITED STATES STEEL CORPORATION, Pittsburgh, Pennsylvania, David M. Fusco, SCHWARZWALD, McNAIR & FUSCO, Cleveland, Ohio, Stanley Weiner, Johanna Fabrizio Parker, Michael M. Michetti, JONES DAY, Cleveland, Ohio, Sasha Shapiro, UNITED STEELWORKERS INTERNATIONAL UNION, Pittsburgh, Pennsylvania, for Appellees.
GRIFFIN, Circuit Judge. Plaintiffs are 225 individuals currently or formerly employed at steel mills located in Lorain, Ohio. They claim that their union, employer, and plan administratоr violated provisions of the Employee Retirement Income Security Act (“ERISA“),
I.
The following facts are accepted as true for purposes of this appeal. See Bennett v. MIS Corp., 607 F.3d 1076, 1091 (6th Cir. 2010).
Plaintiffs work or used to work at steel mills located in Lorain, Ohio (the “mills” or the “Lorain Works“). At all times relevant here, they were represented in their collective bargaining efforts by the United Steelworkers of America (“USW“). They are eligible participants in an employer-sponsored pension plan governed by ERISA.
The mills have changed ownership many times in the last two decades. Before 1989, defendant U.S. Steel Corporation (“U.S. Steel“) owned them, and plaintiffs’ pension plan was administered by defendant United States Steel & Carnegie Pension Fund (the “Fund“). U.S. Steel sold the mills in 1989 to Kobe Steel, Ltd., at which time Kobe Pension Fund began administering the plan. The mills were sold again in 1999, this time to Lorain Tubular Company, LLC, and the Fund resumed administration of plaintiffs’ pension plan.
While U.S. Steel and (later) Kobe Steel owned the mills, plaintiffs’ pension benefits were determined in the same way benefits were determined for employees
In 2001, Lorain Tubular merged into U.S. Steel, and plaintiffs once again became employees of U.S. Steel. Based upon promises made in 2003 by persons or entities plaintiffs do not specifically identify in the complaint, рlaintiffs became “hopeful” that, as employees again of U.S. Steel, they would be treated like all other U.S. Steel employees with respect to their pension benefits, meaning that their “best five years” would no longer be limited to the years before 2000. Plaintiffs were later told, however, that the current formula for calculating pension benefits would remain in place. At no time was the pension plan amended to reflect the alleged promises.
Around this time, U.S. Steel offered its employees the opportunity for early retirement through its “USS Transition Assistance Program for [USW] Represented Employees,” or “TAP.” Employees who chose to participate in TAP would receive a lump sum payment and “a significantly more favorable pension calculation” thаn under the then-current regime. Plaintiffs sought assurances from U.S. Steel, the Fund, and USW that Lorain Works employees who chose to participate would receive the same TAP benefits as U.S. Steel employees in other mills who retired under TAP. “[O]ne or more” defendants promised they would.
In reliance on defendants’ assurances, some of the plaintiffs chose to retire under TAP. But after doing so, they immediately began to receive significantly less than they expected and less than TAP retirees from other steel mills were receiving. Meanwhile,
Plaintiffs who are still employed at the Lorain Works have inquired with defendants regarding the benefits they are to receivе upon retirement and have asked for assurances that there is adequate capital in the plan to “ensure proper benefits upon retirement.” “Yet, they consistently receive incorrect benefit determinations and vague and inadequate responses.”
Plaintiffs filed the instant action on June 1, 2009, and asserted the following claims: (1) breach of ERISA fiduciary duty; (2) ERISA equitable accounting, restitution, and other equitable relief; (3) equitable estoppel; (4) failure to furnish requested plan documents; (5) common-law fraud; (6) common-law negligence; (7) common-law breach of fiduciary duty; and (8) common-law promissory estoppel. Defendants moved to dismiss plaintiffs’ claims for failure to state a claim. See
II.
“We give fresh review to a district court‘s order to dismiss a claim under Civil Rule 12(b)(6). In doing so, we accept all allegations in the complaint as true and determine whether the allegations plausibly state a claim for relief.” Roberts ex rel. Wipfel v. Hamer, 655 F.3d 578, 581 (6th Cir. 2011) (internal citation and quotation marks omitted).
III.
The district court concluded that plaintiffs’ claims against U.S. Steel and the Fund for breach of ERISA fiduciary duty were time-barred. We review that conclusion de novo. Friends of Tims Ford v. Tenn. Valley Auth., 585 F.3d 955, 964 (6th Cir. 2009).
ERISA contains a statute of limitations that governs “action[s] . . . with respect to a fiduciary‘s breach of any responsibility, duty, or obligation under this part [
Plaintiffs contend that the district court applied the wrong limitations period – that it should have applied a six-year period instead of a three-year period because they assert fraud in count one. The final clause of the statute of limitations provides: “except that in the case of frаud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.”
The parties’ disagreement concerns a question of statutory interpretation. U.S. Steel and the Fund contend that the fraud-or-concealment exception applies only in situations where the fiduciary has attempted to hide its breach from the injured party, i.e., only where there has been “fraudulent concealment,” and not simply where the underlying breach sounds in fraud. Plaintiffs, by contrast, take a literal approach and read the exception to apply exactly when it says so: in cases of fraud or concealment,
We have not squarely considered this issue before. The parties say otherwise, but we disagree with their characterization of our precedent. Plaintiffs, for their part, rely primarily on our statement in Tassinare v. American National Insurance Co., 32 F.3d 220 (6th Cir. 1994), repeated in Wright, 349 F.3d at 327, that a “plaintiff with actual knowledge of a non-fraudulent breach of ERISA fiduciary duties must file suit within three years.” Tassinare, 32 F.3d at 223 (emphasis added). By implication, plaintiffs reason, a fraudulent breach would be subject to a six-year limitations period. Although we agree with the logic of that position, we cannot agree that this one statement in Tassinare, a case that involved no allegatiоns of fraud or concealment, represents our considered view on the matter. Nor did we address the issue in Rogers v. Millan, 902 F.2d 34, 1990 WL 61120 (6th Cir. May 8, 1990) (per curiam) (unpublished table decision), when we said “the six-year period can be reduced to three years if there is no fraud or concealment and the defendant can show that the plaintiff had actual knowledge of the breach or violation.” Id. at *2. That statement merely summarizes the statute; it provides no analysis of the fraud-or-concealment clause.
For their part, U.S. Steel and the Fund cite Browning v. Levy, 283 F.3d 761 (6th Cir. 2002), as directly supporting their proposition that “the three-year limitations period is not circumvented by allegations of fraud that support a breach of fiduciary duty claim . . . but rather by allegations that the fiduciary has attempted to hide the alleged breach from the party bringing the action.” The citation is completely off the mark and slightly misleading. The relevant line from Browning is: “In order to invoke the doctrine of fraudulent concealment, affirmative concealment must be shown; mere silence or unwillingness to divulge wrongful activities is not sufficient.” Id. at 770 (citation, internal quotation marks, and alterations omitted). By citing Browning for the proposition they do, U.S. Steel and the Fund have merely assumed the point they must
One week after briefing in this case was complete, we issued Brown v. Owens Corning Investment Review Committee, 622 F.3d 564 (6th Cir. 2010). U.S. Steel and the Fund promptly brought the case to our attention, claiming that it definitively answers the question we consider today. In their
We disagree with the parties’ reading of Brown. U.S. Steel and the Fund seize upon the following line in Brown: “ERISA‘s fraud exception to the statute of limitations ‘requires the plaintiffs to show (1) that defendants engaged in a course of conduct designed to conceal evidence of their alleged wrong-doing and that (2) [the plaintiffs] were not on actual or constructive notice of that evidence, (3) despite their exercise of diligence.‘” 622 F.3d at 573 (quoting Larson v. Northrop Corp., 21 F.3d 1164, 1172 (D.C. Cir. 1994)) (alteration in original).
Insofar as this line purports to set forth the entire set of circumstances in which the clause can apply, it is dictum because doing so was not necessary to our holding in Brown. Cf. United States v. Stevenson, 676 F.3d 557, 2012 WL 573326, at *3 (6th Cir. Feb. 23, 2012) (concluding that a passage in an earlier published decision unequivocally answering the issue presented was dictum because it was unnecessary to the holding). The precise issue considered in Brown was when the plaintiffs obtained actual knowledge of the facts that gave rise tо the fiduciary‘s alleged breach of duty. We agreed with the district court that the plaintiffs learned of the facts more than three years prior to filing suit, rendering their claim time-barred. Brown, 622 F.3d at 570-73. We further agreed that the plaintiffs’ request to amend their complaint to allege that the fiduciary took steps to hide or conceal their earlier breach was futile. Id. at 573-74. It was during this discussion that we articulated the above test for the fraud-or-concealment clause. We found the proposed allegations foreclosed a claim of fraudulent concealment
Nor do we agree with the conclusion other circuits have ascribed to our earlier cases, indicating that we have interpreted the statute in the way U.S. Steel and the Fund would have us do. Specifically, our decision in Farrell v. Automobile Club of Michigan, 870 F.2d 1129 (6th Cir. 1989), has been cited by both the District of Columbia and Seventh Circuits as indicating that we have taken sides on a circuit split on the issue and favor the position taken by U.S. Steel and the Fund. See Larson, 21 F.3d at 1172 n.15; Radiology Ctr., S.C. v. Stifel, Nicolaus & Co., 919 F.2d 1216, 1220 (7th Cir. 1990). It is unclear which passage in Farrell these courts rely upon. Regardless, Farrell does not answer the question here.5 The plaintiffs there did not assert that the six-year period apрlied, even though their claim sounded in fraud. See id. at 1130-31. They instead argued that they obtained actual knowledge of the violation within three years of filing. We found that the evidence showed the contrary – that the plaintiffs learned of the breach more than three years before filing. Id. at 1131-32. Yet we held that, because plaintiffs had filed an identical claim in state court within three years of learning of the alleged violation, the limitations period was equitably tolled while the state claim remained pending. Id. at 1134 (applying Burnett v. New York Cent. R.R. Co., 380 U.S. 424 (1965)). Farrell, too, does not bind us here.
Therefore, whether a six-year limitations period applies in instances where the claim is based upon fraud and there are no allegations of separate conduct undertaken
We need not takes sides on the split at this time, however, for even were we to conclude that the exception applies in such situations, plaintiffs have failed to sufficiently plead fraud in this case. Any discussion on the matter therefore would be dictum, and we decline to opine unnecessarily. See United States v. Hardin, 539 F.3d 404, 415 (6th Cir. 2008) (noting that “when the facts of the instant case do not require resolution of the question[,] any statement regarding the issue is simply dicta” (citation and internal quotation marks omitted)); cf. Souter v. Jones, 395 F.3d 577, 589 (6th Cir. 2005) (reserving the determination of whether an actual innocence exception to the federal habeas statute of limitations exists until finding thаt the petitioner could satisfy the exception if it did). Abstaining is particularly prudent here because the allegations of fraud are woefully inadequate (as we discuss below), the briefing on the question was minimal, the issue was not litigated vigorously below, and the question is a rather complicated one. Therefore, we assume, but do not decide, that a claim of fiduciary fraud not involving separate acts of concealment is subject to a six-year limitations period that begins to run when the plaintiff discovered or with due diligence should have discovered the fraud.
Plaintiffs have not adequately alleged any underlying fraud. To be sure, the primary theory of liability contained in plaintiffs’ fiduciary-duty claims does sound in fraud.6 Specifically, plaintiffs allege that those who retired under the TAP program did so in reliance upon defendants’ false representations that plaintiffs’ retirement benefits would be calculated the way other U.S. Steel employees’ benefits were calculated.7 See
“We interpret
The complaint avers in relevant part that “[n]umerous Plaintiffs specifically asked (orally and in writing) [defendants] for assurances that they would receive the same T.A.P. benefits as all other . . . U.S. Steel employees. In response, one or more of [defendants] promised the Plaintiffs that they would receive the same such benefits, made representations, and provided false, inaccurate, and/or misleading information to the Plaintiffs.” This allegation omits entirely the time and place of the alleged statements. It also fails to allege the speaker of the alleged statements, instead referring vaguely only to “defendants,” of which there are many in this case.8 See Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 404 (6th Cir. 2012) (noting that
IV.
Even though the above analysis applies with equal force to plaintiffs’ ERISA fiduciary-duty claim against USW, USW never argued below that the claim was time-barred. It has therefore forfeited that basis for dismissal for purposes of this appeal. See Poplar Creek Dev. Co. v. Chesapeake Appalachia, L.L.C., 636 F.3d 235, 242 n.5 (6th Cir. 2011). Nevertheless, plaintiffs’ claim against USW fails because plaintiffs have not plausibly alleged that USW is an ERISA fiduciary.
The threshold question in all cases charging breach of ERISA fiduciary duty is whether the defendant was “acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint.” Pegram v. Herdrich, 530 U.S. 211, 226 (2000). “[F]or purposes of ERISA, a ‘fiduciary’ not only includes persons specifically named as fiduciaries by the benefit plan, but also anyone else who exercises discretionary control or authority over a plan‘s management, administration, or assets.” Moore v. LaFayette Ins. Co., 458 F.3d 416, 438 (6th Cir. 2006); see
The complaint fails to plausibly allege that USW is an ERISA fiduciary. First of all, USW is not named in plan documents as a fiduciary. Plan documents demonstrate, rather, that U.S. Steel has delegated to the Fund the fiduciary function of administering plan benefits to participants. Moreover, the complaint contains only the most conclusory of allegations that USW exercises discretionary control or authority over plan administration, management, or assets, so it cannot be considered a de facto fiduciary under ERISA.
V.
In count three of their complaint, plaintiffs assert a claim for equitable estoppel. The district court dismissed this claim on the ground that this court had yet to recognize such a theory of liability in the context of a pension plan (as opposed to a welfare benefit plan). After the district court entered judgment, however, we recognized a claim for equitable estoppel in the context of a pension plan. See Bloemker v. Laborers’ Local 265 Pension Fund, 605 F.3d 436 (6th Cir. 2010). Unfortunately for plaintiffs, the special facts that gave rise to liability in Bloemker are absent here.
In Bloemker, the plaintiff decided to retire early after he was told by the plan administrator in a certified letter that he would receive a certain amount in pension benefits each month during retirement. Id. at 439. After rеceiving benefits for more than a year in an amount consistent with what he was initially told, the plaintiff was advised that, due to a computer programming error, the administrator had been overpaying him approximately $500 per month. The administrator asked the plaintiff to return more than
The only plaintiffs in any position to assert a claim of equitable estoppel here are those who participated in the TAP retirement program, because it is only they who allegedly relied to their detriment on the alleged representations by the Fund. See id. at 442 (stating that reliance is an element of traditional estoppel). Moreover, only the Fund can potentially be estopped from doing anything, because it is the only defendant that pays pension benefits in accordance with plan documents. See generally Armistead v. Vernitron Corp., 944 F.2d 1287, 1299 (6th Cir. 1991) (“Equitable estoppel . . . precludes a party from exercising contractual rights because of his own inequitable conduct toward the party asserting the estoppel.“).
These plaintiffs cannot state a claim for equitable estoppel against the Fund for two reasons. First, plaintiffs have not adequately pleaded a claim of traditional equitable estoppel, which requires that the defendant‘s actions “contain an element of fraud, either intended deception or such gross negligence as to amount to constructive fraud.” Bloemker, 605 F.3d at 443 (citation, internal quotation marks, and alteration omitted). As explained above, plaintiffs have not satisfied their burden to plead fraud with particularity.
Second, plaintiffs cannot satisfy the justifiable-reliance requirement of an estoppel claim. A reason we initially hesitated to recognize an estoppel theory when the terms of the plan are unambiguous is because a participant‘s reliance on a representation regarding the plan “‘can seldom, if ever, be reasonable or justifiable if it is inconsistent with the clear and unambiguous terms of plan documents.‘” Id. at 443 (quoting Sprague
Here, by contrast, plaintiffs do not allege that the plan documents are ambiguous on the point at issue here – which years can be included under the best five years method. Nor do they allege that the documents prevent them from calculating their own benefits. Indeed, plaintiffs were admittedly aware of precisely how their benefits would be calculated under the plan: by using the annual income from the participant‘s best five years up to and including 1999. They simply contend that pension benefits should be calculated in a way different from what is called for in plan documents. Such allegations cannot form a basis for an ERISA estoppеl claim. Therefore, plaintiffs’ reliance on alleged statements that contradict plan documents (which are unambiguous on the point) was not justifiable as a matter of law. Plaintiffs have failed to state a claim for equitable estoppel.
VI.
In count four, plaintiffs claim that the Fund failed to furnish plan documents upon request. The district court concluded, based upon a review of letters attached to the Fund‘s motion to dismiss, that this claim was baseless.
ERISA provides that an “administrator shall, upon written request of any participant or beneficiary, furnish a copy [of certain specific plan documents] or other instruments under which the plan is established or operated.”
On or about March 11, 2009, the Plaintiffs sent written requests to all of the Defendants9 for several Plan and Fund-related Documents including, but not limited to, Summary annual reports, Summary Plan descriptions, Form 5500s, Trust Agreement, Rules and Regulations of the Pension Fund, individual Participant benefit calculations, and 204(h) notices. However, as of the date this complaint was filed, each Defendant has either failed to respond or provided inadequate responses to those requests.
Attached to the Fund‘s motion to dismiss was plaintiffs’ letter request, as well as the Fund‘s response. In their opposition brief in the district court, plaintiffs only argued that the letters could not be considered without converting the motion into one for summary judgment. It recognized that matters referenced in the complaint and central to а plaintiff‘s claim can generally be considered on a motion to dismiss, but argued that they never referenced the letters in their complaint and that the genuineness and admissibility of the letters were issues of fact not appropriate for resolution under
The district court correctly concluded that both letters were sufficiently referenced in the complaint and central to plaintiffs’ claim so as to be properly considered on a motion to dismiss. See Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir. 1997). As noted above, paragraph 85 of the complaint expressly mentions plaintiffs’ March 11 request and alleges that “each Defendant has either failed to respond or providеd inadequate responses to those requests.” (Emphasis added.) That is a sufficient reference to the response, we believe, and the adequacy of the response is the entire claim, let alone central to it.
With respect to the actuarial valuation reports, plaintiffs concede that they never specifically requested them. Accordingly, the Fund had no legal duty to produce them. See
To be sure, we have held that actuarial valuation reports do fall under the residual clause of
Here, plaintiffs have pointed to no specific request in their March 11 letter that so obviously refers to the actuarial valuation reports. If they wish to take advantage of the leniency that Bartling prescribes, they must make a minimal effort on appeal to identify which of their specific requests reasonably embodies the actuarial valuation reports. Indeed, given that it has been the law in this circuit since 1994, when Bartling was decided, that such reports must be furnished upon request, the Fund reasonably could have concluded that, had plaintiffs wanted the reports, they would have clearly requested them.
With respect to the “procedures” and “calculations” plaintiffs apparently requested but never received, plaintiffs do not identify specifically what they are talking about or explain why the requests were not covered by the Fund‘s response. Their request sought “[a]ll documents . . . regarding . . . benefit calculations . . . .” The Fund‘s letter in response states: “[A]ttached are the following plan documents that are required to be provided under section 104(b)(4) of ERISA and copies of the most recent benefit calculations previously prepared for your clients.” (Emphasis added.) The response obviously covers the requested calculations. As for “procedures,” nowhere in plaintiffs’ request did they ask for “procedures” by itself, and they have not specifically identified what document they want. If they are referring tо the procedures for determining pension benefits, the furnished documents were responsive. See R.21-3 at 2 (“Accordingly, the documents provided should enable you to determine your clients’ eligibility for benefits, the amount of their benefits, and their rights under the Plan.“). If the response was insufficient, plaintiffs should have availed themselves of the Fund‘s offer to provide more documents upon a specific request. See
VII.
In count two, plaintiffs assert a claim for equitable accounting, restitution, and “other equitable relief.” The district court dismissed this count on the ground that it was entirely derivative of the fiduciary-duty claims the court had dismissed.
According to plaintiffs, count two is premised on
VIII.
Finally, counts five through eight in plaintiffs’ complaint assert claims under Ohio‘s common law for fraud, negligence, breach of fiduciary duty, and promissory estoppel. The district court concluded that ERISA preempted all of these claims.
ERISA preempts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.”
Plaintiffs anticipated ERISA-preemption by prefacing their allegations regarding the common-law claims with the following: “In the event that any of the Plaintiffs’ claims do not relate to the Pension Plans or any Defendant is not an ERISA fiduciary, the Plaintiffs assert the following common law cause of action for [fraud/negligence/breach of fiduciary duty/promissory estoppel].” The problem, however, is that each of plaintiffs’ common-law claims does relate to the pension plan. Plaintiffs seek to have their plan administered and their pension benefits calculated in a way that is different from what the plan documents expressly require, based upon alleged breaches of legal duties created and imposed by state law. ERISA‘s broad preemptive reach does not countenance this. Furthermore, these common-law claims would require the court to consider the plan documents to determine whether there had been any breaches of these state-law duties, a further indication that ERISA preempts these claims. The district court properly dismissed plaintiffs’ common-law claims.
IX.
For these reasons, we affirm the judgment of the district court.
Notes
No action may be commenced under this subchapter with respect to a fiduciary‘s breach of any responsibility, duty, or obligation under this рart, or with respect to a violation of this part, after the earlier of –
(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have cured the breach or violation, or
(2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation;
except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.