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Procedural Aspects of Litigating ERISA Claims American Bar Association http://www.bna.com/bnabooks/ababna/annual/2000/wahle.pdf PROCEDURAL ASPECTS OF LITIGATING ERISA CLAIMS David M. Cook Karen M. Wahle Cincinnati, Ohio O’Melveny & Myers LLP Washington, DC Copyright 1995; Copyright 1999; Copyright 2000 — All Rights Reserved Connerton, Ray & Simon; David M. Cook Law Office

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Page 1: PROCEDURAL ASPECTS OF LITIGATING ERISA CLAIMS

Procedural Aspects of Litigating ERISA Claims

American Bar Association http://www.bna.com/bnabooks/ababna/annual/2000/wahle.pdf

PROCEDURAL ASPECTS OF LITIGATING ERISA CLAIMS

David M. Cook Karen M. Wahle Cincinnati, Ohio O’Melveny & Myers LLP

Washington, DC

Copyright 1995; Copyright 1999; Copyright 2000 — All Rights Reserved Connerton, Ray & Simon; David M. Cook Law Office

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1 American Bar Association http://www.bna.com/bnabooks/ababna/annual/2000/wahle.pdf

A. ERISA CAUSES OF ACTION ......................................................................................... 1

1. Overview................................................................................................................ 1

2. ERISA §502(a) - Authorized Causes of Action..................................................... 2

B. STANDING ..................................................................................................................... 21

C. SUBJECT MATTER JURISDICTION ........................................................................... 30

D. REMOVAL FROM STATE TO FEDERAL COURT .................................................... 33

E. VENUE............................................................................................................................ 39

F. PERSONAL JURISDICTION AND SERVICE OF PROCESS..................................... 41

G. EXHAUSTION OF ADMINISTRATIVE REMEDIES ................................................. 42

H. STATUTE OF LIMITATIONS....................................................................................... 42

I. JURY VERSUS BENCH TRIAL.................................................................................... 48

J. REMEDIES...................................................................................................................... 51

K. ATTORNEYS FEES ....................................................................................................... 56

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2 American Bar Association http://www.bna.com/bnabooks/ababna/annual/2000/wahle.pdf

PROCEDURAL ASPECTS OF LITIGATING ERISA CLAIMS

David M. Cook Karen M. Wahle Cincinnati, Ohio O’Melveny & Myers LLP

Washington, DC

Copyright 1995; Copyright 2000—All Rights Reserved Connerton, Ray & Simon; David M. Cook Law Office

ERISA CAUSES OF ACTION

Overview

ERISA §502(a) [29 U.S.C. §1132(a)] expressly authorizes several causes of action. Several procedural, as well as substantive, aspects of the litigation vary according to the specific cause(s) of action alleged in the complaint: e.g., subject matter jurisdiction, standing, statute of limitations, standard of court review, relief available, obligation to exhaust plan appeals procedures, who can be liable, and the availability of a jury trial. Following the lead of the Supreme Court, the federal courts now look closely at the particular §502(a) cause of action being alleged. Courts are extremely reluctant to improvise or alter these forms of action. See Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985); Jordan v. Federal Express Corp. 116 F.3d 1005 (3d Cir. 1997)(claim for benefits based upon failure to disclose is not proper where separate ERISA section covers remedies for disclosure violations). The best pleading practice is to allege a specific cause of action in the complaint.

These causes of action all relate to “employee benefit plans” covered by ERISA. [See ERISA §§3(1), (2), (3), 4; 29 U.S.C. §1002(1), (2), (3), 1003]. No cause of action lies unless the claim relates to such a plan. [See, e.g., Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318 (1992), on remand, 969 F.2d 76 (4th Cir. 1992); Henglein v. Informal Plan, 974 F.2d 391 (3d Cir. 1992); Fugarino v. Hartford Life & Accident Ins. Co., 969 F.2d 178 (6th Cir. 1992), cert. denied, 507 U.S. 966 (1993); Jader v. Principal Mutual Life Ins. Co., 925 F.2d 1075 (8th Cir. 1991); Williams v. Wright, 927 F.2d 1540 (11th Cir. 1991); Kidder v. H&B Marine, Inc., 925 F.2d 857 (5th Cir. 1991); Bellino v. Schlumberger Tech., Inc., 944 F.2d 26 (1st Cir. 1991); Hamilton v. Air Jamaica, Ltd., 945 F.2d 74 (3d Cir. 1991)].

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ERISA §502(a) - Authorized Causes of Action

A participant or beneficiary in a pension or welfare plan may bring a civil action against a plan administrator under ERISA §502(a)(1)(A) to obtain relief provided in §502(c).

ERISA §502(c)(1) vests the courts with discretion to hold a plan administrator personally liable for up to $100 per day for failure to provide a participant or beneficiary with certain plan information upon request, for failure to provide a notice of transfer of excess pension assets to a health benefit account under ERISA §101(e)(1), or for failure to comply with certain “COBRA” health care coverage continuation requirements of ERISA §606. [See, e.g., Sedlack v. Braswell Services Group, Inc., 134 F.3d 219 (4th Cir 1998) (upholding award of $20 per day against administrator for failing to respond to written request for a copy of plan); Hunt v. Hawthorne Assocs., Inc., 119 F.3d 888 (11th Cir. 1997), cert. denied, 523 U.S. 1120 (1998); Tait v. Barbknecht & Tait Profit Sharing Plan, 997 F. Supp. 763 (N.D. Tex. 1997); Bartling v. Fruehauf Corp., 29 F.3d 1062 (6th Cir. 1994); Winchester v. Michael Reese Health Plan Cmte., 942 F.2d 1190 (7th Cir. 1991); Kidder v. H & B Marine, Inc., 932 F.2d 347 (5th Cir. 1991); Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073 (5th Cir. 1990); Ziaee v. Vest, 916 F.2d 1204 (7th Cir. 1990), cert. denied, 499 U.S. 959 (1991); Boyadjian v. CIGNA, 973 F. Supp. 500 (D.N.J. 1997); Doe v. Travelers Insurance, 971 F. Supp.623 (D.Mass. 1997), aff’d in part, rev’d in part, 167 F.3d 53 (1st Cir. 1999); The penalty provision provides incentives for plan administrators to supply information in a timely manner. Davis v. Featherstone, 97 F.3d 734 (6th Cir. 1996). The request for plan information must be made to the plan administrator as identified in plan documents. See Van Hoey v. Baxter International, Inc., 1997 U.S. Dist. LEXIS 16540 (N.D. Ill. Oct. 21, 1997); Devlin v. Transportation Communications Int’l Union, 1997 U.S. Dist. LEXIS 13916 (S.D.N.Y. Sep. 15, 1997); Smith v. Prudential Health Care Plan, Inc., 1997 U.S. Dist. LEXIS 14216 (E.D.Pa. Sept. 9, 1997).

The imposition of the penalty and the amount (up to $100 per day) is discretionary with the courts and most courts have not imposed the penalty absent bad faith on the part of the plan administrator or actual harm to the participant or beneficiary. [See, e.g., Ames v. American Int’l Can, 170 F.3d 751 (7th Cir. 1999) (no abuse of discretion in not

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imposing penalty where participants already had alternative access to information contained in requested plan documents); Bartling v. Fruehauf Corp., 29 F.3d 1062 (6th Cir. 1994) (district court did not abuse discretion by considering defendant’s good faith and lack of prejudice in not imposing penalty); Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580 (1st Cir. 1993); Osimowicz v. Ford Motor Co., 1993 U.S. App. LEXIS 28682 (6th Cir. 1993); Godwin v. Sun Life Assurance Co. of Canada, 980 F.2d 323 (5th Cir. 1992); Harsch v. Eisenberg, 956 F.2d 651 (7th Cir.), cert. denied, 506 U.S. 818 (1992); Curry v. Contract Fabricators, Inc. Profit Sharing Plan, 891 F.2d 842 (11th Cir. 1990); Daniel v. Eaton Corp., 839 F.2d 263 (6th Cir.), cert. denied, 488 U.S. 826 (1988); Dooley v. General Motors, 1997 U.S. Dist. LEXIS 13168 (E.D. Mich. 1997); Almonte v. General Motors, 1997 U.S. Dist. LEXIS 9271 (S.D.N.Y. 1997); Burgess v. Adams Tool & Eng’g, 908 F. Supp. 473 (W.D. Mich. 1995); In Re Unisys Corp. Long-Term Disability Plan ERISA Litig., 1994 U.S. Dist. LEXIS 11368 (E.D. Pa. 1994); Bouteiller v. Vulcan Iron Works, 834 F. Supp. 207 (E.D. Mich. 1993); Larson v. Northrop Corp., 15 E.B.C. 2107 (D.D.C. 1992), aff’d, 21 F.3d 1164 (D.C. Cir. 1994); Rosile v. Aetna Life Ins. Co., 777 F. Supp. 862 (D. Kan. 1991), affd. without op., 972 F.2d 357 (10th Cir. 1992); Gillis v. Hoechst Celanese Corp., 818 F. Supp. 805 (E.D. Pa. 1992), aff’d in part and vacated in part, 4 F.3d 1137 (3d Cir. 1993), cert. denied, 511 U.S. 1004 (1994); Algie v. RCA Global Communications, Inc., 891 F. Supp. 839 (S.D.N.Y. 1994); Maiuro v. Federal Express Corp., 843 F. Supp. 935 (D.N.J.), aff’d without op., 43 F.3d 1461 (3d Cir. 1994); Kascewicz v. Citibank, N.A., 837 F. Supp. 1312 (S.D.N.Y. 1993); Wasielewski v. Kirberg Roofing, Inc., 821 F. Supp. 1303 (E.D. Mo. 1993); Plotkin v. Bearings, Ltd., 791 F. Supp. 383 (E.D.N.Y. 1992); First Atlantic Leasing Corp. v. Tracey, 738 F. Supp. 863 (D.N.J. 1990); Paris v. F. Korbel & Bros., Inc., 751 F. Supp. 834 (N.D. Cal. 1990); Wright v. Nimmons, 641 F. Supp. 1391 (S.D. Tex. 1986); Chambers v. Kaleidoscope, Inc. Profit Sharing Plan, 650 F. Supp. 359 (N.D. Ga. 1986); Abbot v. Drs. Ridgik Steinberg & Assoc., 609 F. Supp. 1216 (D.N.J. 1985). But see Faircloth v. Lundy Packing Co., 91 F.3d 648 (4th Cir. 1996), cert denied, 117 S. Ct. 738 (1997) (bad faith and prejudice are factors a court may consider in imposing a penalty but are not prerequisites); Kincaid v. Harcourt Brace Jovanovich, Inc., 863 F. Supp. 1471

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(D.C.Kansas, 1994) (bad faith and prejudice not required for penalties to be assessed; Law v. Ernst & Young, 956 F.2d 364 (1st Cir. 1992) (affirming $100 per day penalty totalling $12,600, without discussion of bad faith or prejudice); Garred v. General American Life Insurance Co., 774 F. Supp. 1190 (W.D. Ark. 1991) (held prejudice unnecessary for imposition of penalty); Phillips v. Riverside, Inc., 796 F. Supp. 403 (E.D. Ark. 1992) (imposed $5 per day penalty without mentioning bad faith)]; Tucker v. General Motors Retirement Program, 949 F. Supp. 47 (D. Mass. 1996) (broad discretion afforded to the court under §1132, no penalty imposed where no evidence of bad faith exists.). Davis v. Featherstone, 97 F.3d 734 (6th Cir. 1996) (Prejudice to the plaintiff and nature of administrator’s conduct to be taken into consideration in decision on penalties.)

It is necessary that a request for information as opposed to a demand of coverage or benefits be made. The request need not be in writing if it involves information which should have been provided automatically, without request. See Krohn v. Huron Memorial Hospital, 173 F.3d 542 (6th Cir. 1999) (Hospital liable as fiduciary to respond to plaintiff-beneficiary’s husband’s request for benefits, and to alert LTD insurer that plaintiff had made an application for benefits); Verkuilen v. South Shore Building and Mortgage Co., 122 F.3d 410 (7th Cir. 1997); Crotty v. Cook, 121 F.3d 541 (9th Cir. 1997); Moothart v. Bell, 21 F.3d 1499 (10th Cir. 1994) (attorney’s request for information on behalf of participant is sufficient); Pane v. RCA, 868 F.2d 631 (3d Cir. 1989); Kleinhans v. Lisle Savings Profit Sharing Trust, 810 F.2d 618 (7th Cir. 1987); Pehr v. University of Chicago, 799 F. Supp. 862 (N.D. Ill. 1992)]. Moreover, even if certain information is required to be furnished to participants, it is necessary that an actual request for such information be made. [See Vartanian v. Monsanto Co., et al, 131 F.3d 264 (1st Cir. 1997) (Defendant fiduciary had not made “serious consideration” of retirement incentive benefits adopted on 6/28/91, when Plaintiff retired on 5/1/98, and thus, had no duty to disclose incentives); Poccia v. NYNEX Corp., 81 F.3d 275 (2nd Cir.), cert. denied, 519 U.S. 931 (1996) (fiduciary not required to disclose benefit plan changes before they are adopted); Fischer v. Philadelphia Elect. Co., 96 F.3d 1533 (3d Cir. 1996), cert. denied, 520 U.S. 1116 (fiduciary commits breach of duty by making material

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misrepresentations to beneficiaries regarding potential plan changes only if changes are under serious consideration); Haberern v. Kaupp Vascular Surgeons Ltd. Defined Benefit Pension Plan, 24 F.3d 1491 (3d Cir. 1994), cert. denied, 513 U.S. 1149 (1995) (letter from attorney complaining that certain information had not been supplied, but never requesting that it be supplied is insufficient); Aquilio v. Police Benevolent Ass’n of the New York State Troopers, 857 F. Supp. 190 (N.D.N.Y. 1994); Hughes v. K Mart Corp., 1993 U.S. App. LEXIS 1333 (6th Cir. 1993); Williams v. Caterpillar, Inc., 702 F. Supp. 148 (N.D. Cal. 1989)].

As to the information that must be disclosed, see, Ames v. American Nat’l Can Co., 170 F.3d 751 (7th Cir. 1999) (participants entitled to documents under which plan administered, not to every document that contains information about plan and how it is administered); Doe v. Travelers Insur. Co., 167 F.3d 53 (1st Cir. 1999) (“mental health guidelines” used by insurer not type of information plan administrator is required to provide); Jackson v. E.J. Brach Corp., 937 F. Supp 735 (N.D. Ill. 1996) (penalty imposed for failure to produce documents that never existed); Board of Trustees of CWA/ITU Negotiated Pension Plan...v. Melvin Weinstein, 107 F.3d 139 (2d Cir. 1997) (Administrator not required to disclose actuarial valuation reports); Bartling v. Fruehauf Corp., 29 F.3d 1062 (6th Cir. 1994) (actuarial reports and calculation procedures, but not purchase agreement, must be disclosed as “instruments under which the plan is operated”); Goldstein v. Group Ins. Plan for Administrative and Management Employees of Fairchild Republic Co., Farmingdale Facility, 940 F. Supp. 474 (E.D. N.Y. 1995, aff’d. 99 F.3d 101 (former employee entitled to plan info which was in effect during term of employment, not plan in effect post-termination); Shemerdiak v. UFCW, 1993 U.S. App. LEXIS 8775 (9th Cir. 1993); Maiuro v. Federal Express Corp., 843 F. Supp. 935 (D.N.J.), aff’d without op., 43 F.3d 1461 (3d Cir. 1994); Werner v. Morgan Equipment Co., 15 E.B.C. 2295 (N.D. Ca. 1992);

Courts have held that this cause of action lies only against the person or entity who is the plan “administrator” under ERISA §3(16)(A) [(29 U.S.C. §1002(16)(A)]. [See, e.g., Thorpe v. Retirement Plans of Pillsbury Co., 80 F.3d 439 (10th Cir. 1996); Lee v. Burkhart, 991 F.2d 1004 (2d Cir.

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1993); Jones v. UOP, 16 F.3d 141 (7th Cir. 1994); McKinsey v. Sentry Ins., 986 F.2d 401 (10th Cir. 1993); Vanderklok v. Provident Life and Accident Insurance Co., 956 F.2d 610 (6th Cir. 1992); Moran v. Aetna Life Insurance Co., 872 F.2d 296 (9th Cir. 1989); Turner v. CF&I Steel Corp., 770 F.2d 43 (3d Cir. 1985), cert. denied, 474 U.S. 1058 (1986); Van Hoey v. Baxter International, Inc., 1997 U.S. Dist. LEXIS 16540 (N.D. Ill. 10/21/97) (plan administrator must be named defendant); Devlin v. Transportation Communications Int’l Union, 1997 U.S. Dist. LEXIS 13916 (S.D.N.Y. 9/15/97) (union not proper defendant); Smith v. Prudential Health Care Plan, Inc., 1997 U.S. Dist. LEXIS 14216 (E.D. Pa. 9/9/97) (claims administrator not proper defendant); Reinert v. Giorgio Foods, Inc., 1997 U.S. Dist. LEXIS 9090 (E.D. Pa. 6/25/97); Farris v. Century Planners, Ltd., 858 F. Supp. 150 (D. Kan. 1994); Motley v. Metropolitan Life Ins. Co., 834 F. Supp. 1272 (D. Kan. 1993); Boone v. Leavenworth Anesthesia, Inc., 1992 U.S. Dist. LEXIS 13895 (D. Kan. 1992) (request must be submitted to “plan administrator”, not “claims administrator”); Crawford v. Armour & Co. Salaried Pension Plan, 3 E.B.C. 2335 (W.D. Pa. 1982). But see Kidder v. H&B Marine, Inc., 734 F. Supp. 724 (E.D. La. 1990), aff’d in part and rev’d in part, 925 F.2d 857 (5th Cir. 1991) (held employer sponsor, plus trustees of multiple trust, responsible for failing to provide COBRA notice under §606(1))].

Several courts though have ruled that, in certain circumstances, a plan sponsor will be deemed the “de facto administrator” even though another entity is actually designated the administrator under the plan. [See Law v. Ernst & Young, 956 F.2d 364 (1st Cir. 1992) (court imposed §502(c) penalties on employer who was acting as plan administrator); Rosen v. TRW, Inc., 979 F.2d 191 (11th Cir. 1992) (same); Krawczyk v. Harnischfeger Corp., 869 F. Supp. 613 (E.D. Wis.), aff’d, 41 F.3d 276 (7th Cir. 1994); Lawrence v. Jackson Mack Sales, Inc., 837 F. Supp. 771 (S.D. Miss. 1992), aff’d. w/o op., 42 F.3d 642 (5th Cir. 1994) (even though defendants were not designated in plan as administrators, they may have acted as plan administrator at times and assumed some administrative duties); but see, Crocco v. Xerox, 137 F.3d 105 (2d Cir. 1998) (employer who was neither designated plan administrator, nor a plan trustee, could not be a “de facto co-administrator” for purposes of §502(a)(1); Lee v.

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Burkhart, 991 F.2d 1004 (2d Cir. 1993)(precludes employer liability as “de facto co-administrator” under §502(a)(1)(B) where employer has named an administrator in accordance with 29 U.S.C. §1002(16)(A)].

§502(c)(3) vests the courts with discretion to assess up to $100 per day in personal liability, and to grant such other relief as it deems proper, against an employer maintaining a plan who fails to provide the notice of failure to meet minimum funding standards (under ERISA §101(d)) or the notice of transfer of excess pension assets (under ERISA §101(e)(2)).

A plan participant or beneficiary may bring a civil action under ERISA §502(a)(1)(B):

* to recover benefits due him under the terms of his plan;

* to enforce his rights under the terms of his plan; or

* to clarify his right to future benefits under the terms of the plan.

Note that this cause of action does not require a plaintiff to allege statutory violations of ERISA’s substantive provisions (e.g., minimum vesting standards). The nature of this cause of action is to enforce personal rights under the terms of the plan, not the provisions of ERISA. A separate cause of action to redress statutory violations generally is provided by ERISA §502(a)(3) [29 U.S.C. §1132(a)(3)]. [See, e.g., Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101 (1989); Haberern v. Kaupp Vascular Surgeons Ltd. Defined Benefit Pension Plan, 24 F.3d 1491 (3d Cir. 1994), cert. denied, 115 S.Ct. 1099 (1995) (plaintiff may not recover damages from fiduciary for a breach of fiduciary duty under §502(a)(1)(B)); Wilkins v. Baptist Healthcare Systems, Inc. et al, 150 F.3d 609 (6th Cir. 1998) (plaintiff may not recover damages from fiduciary for a breach under §502(a)(3), when provided remedy under §502(a)(1)(B)); Jordan v. Federal Express Corp., 21 E.B.C. 1209 (3d Cir., 1997) (No 502(a)(1)(B) liability for ERISA disclosure violations); Harsch v. Eisenberg, 956 F.2d 651 (7th Cir.), cert. denied, 113 S.Ct. 61 (1992); Meade v. Pension Appeals & Review Cmte., 966 F.2d 190 (6th Cir. 1992); Hozier v. Midwest Fastners, Inc., 908 F.2d 1155 (3d Cir. 1990); Gridley v. Cleveland

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Pneumatic Co., 924 F.2d 1310 (3d Cir.), cert. denied, 501 U.S. 1232 (1991)].

Cause of action does not require a plaintiff to allege breaches of ERISA’s fiduciary standards or prohibited transaction provisions. A separate cause of action is provided by ERISA §502(a)(2)[29 U.S.C. §1132(a)(2)] for relief under ERISA §409 [29 U.S.C. §1109] to redress breaches of the fiduciary provisions of ERISA on behalf of a plan.

Benefit claims litigation under §502(a)(1)(B) is in the nature of an action to enforce beneficial rights under a trust. Principles of the common law of trusts are incorporated into the federal common law of employee benefits to guide the courts in the absence of express ERISA rules. [See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989); Barker v. Ceridian Corp., 122 F.3d 628 (8th Cir. 1997) (when interpreting ERISA plan documents, courts should look to the law of trusts); Ream v. Frey, 107 F.3d 147 (3rd Cir. 1997). But see Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580 (1st Cir. 1993) (trust and contract principles are adopted into federal substantive law interpreting ERISA plans); Novak v. Andersen Corp., 962 F.2d 757 (8th Cir. 1992), cert. denied, 508 U.S. 959 (1993) (§502(a)(1)(B) provides “legal relief” in the form of benefits); Tolle v. Carroll Touch, Inc., 977 F.2d 1129 (7th Cir. 1992) (§502(a)(1)(B) claims are creatures of contract law)].

The employee benefit plan itself, rather than the plan’s fiduciaries, is primarily liable for benefits payable under the terms of the plan. See Crocco v. Xerox Corp., 1998 U.S. 137 F.3d 105 (2d Cir. 1998)(employer-sponsor not proper defendant); Sahlie v. Nolen, 1997 U.S. Dist. LEXIS 18112 (M.D. Ala. 1997); Smith v. Prudential Health Care Plan, 1997 U.S. Dist. LEXIS 14216 (E.D.Pa. 1997). The employer is a proper defendant only if it controls administration of the plan. Best v. Nissan Motor Corp., 973 F. Supp. 770 (M.D. Tenn., 1997). Where a third party is named as plan administrator, the employer is a proper defendant only if the employer actually controls or influences the administration of the plan. Beegan v. Associated press, 43 F.Supp.2d 70 (D.Me. 1999). The plan should always be named as a defendant in a claim for benefits. But see Hunt v. Hawthorne Associates, 119 F.3d 888 (11th Cir. 1997) (Relief must consist of an order

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directing the Plan Administrator to pay benefits). See also HealthSouth Rehab. Hospital v. American Nat. Red Cross, 101 F.3d 1005 (4th Cir. 1996), cert. denied, 520 U.S. 1264 (1997) (Healthcare provider may not bring ERISA action against company providing administrative and ministerial services to plan. Service provider was not a fiduciary or administrator of the plan and had no authority to bestow beneficiary status.); Riordan v. Commonwealth Edison Co., 953 F. Supp. 952 (N.D. Ill. 1996), aff’d, 128 F.3d 549 (7th Cir. 1997) (must bring action for benefits against plan as an entity, not against administrator);

Where the plan administrator performs only ministerial functions, it is not necessary or proper to name the administrator in a claim for benefits. But if the administrator is responsible for plan interpretation and decisions regarding payment of benefits, then the administrator should be named in addition to the plan itself. [See e.g., Garren v. John Hancock Mutual Life Insurance Co., 114 F.3d 186 (11th Cir. 1997) (The proper party defendant in an action concerning ERISA benefits is the party that controls administration of the plan.) See also Pecor v. Northwestern National Ins. Co., 869 F. Supp. 651 (W.D. Wis. 1994) (a suit for benefits should not be a judgment against the general assets of the employer); Raeder v. Chemrex Inc., 863 F. Supp. 817 (E.D. Wis. 1994) (same)]. ERISA §502(d) [29 U.S.C. §1132(d)] changes common law to make plans suable legal entities and to make plans responsible for judgments against them. [See, Mackey v. Lanier Collections Agency & Service Inc., 486 U.S. 825 (1988); Madden v. ITT Long Term Disability Plan, 914 F.2d 1279 (9th Cir. 1990), cert. denied, 498 U.S. 1087 (1991)].

A plan participant, a plan beneficiary, a plan fiduciary, or the Secretary of Labor may bring a civil action under ERISA §502(a)(2) for relief under ERISA §409 (29 U.S.C. §1109) to redress violations of ERISA’s fiduciary responsibility provisions.

In contrast to §502(a)(1)(B), this cause of action is not intended to vindicate individual benefit rights, but rather to obtain plan-wide relief (e.g., restitution to the plan for imprudent investment losses). [See Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134 (1985); Corcoran v. United Healthcare, Inc., 965 F.2d 1321 (5th Cir.), cert. denied, 506 U.S. 1033 (1992); Walter v. International Ass’n of Machinists Pension Fund, 949 F.2d 310 (10th Cir.

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1991); Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155 (3d Cir. 1990); Farrell v. Automobile Club of Michigan, 870 F.2d 1129 (6th Cir. 1989); McMahon v. McDowell, 794 F.2d 100 (3d Cir.), cert denied, 479 U.S. 971 (1986)]. Where relief sought is not on behalf of the plan, §502(a)(2) claims will be struck. [See Watkins v. Westinghouse Hanford Co., 12 F.3d 1517 (9th Cir. 1993); Tregoning v. American Community Mut. Ins. Co., 12 F.3d 79 (6th Cir. 1993), cert. denied, 114 S.Ct. 1832 (1994); Anweiler v. American Elec. Power Service Corp., 3 F.3d 986 (7th Cir. 1993); Richards v. General Motors Corp., 991 F.2d 1227 (6th Cir. 1993); Horan v. Kaiser Steel Retirement Plan, 947 F.2d 1412 (9th Cir. 1991); Farris v. Century Planners, Ltd., 858 F. Supp. 150 (D. Kan. 1994); Cairns v. Bridgestone/Firestone, Inc., 802 F. Supp. 152 (N.D. Ohio 1992), aff’d, 995 F.2d 1066 (6th Cir. 1993); Rosile v. Aetna Life Ins. Co., 777 F. Supp. 862 (D. Kan. 1991), aff’d without op., 972 F.2d 357 (10th Cir. 1992)].

Whereas only plan participants and beneficiaries are specifically identified in §502(a)(1)(B) as being authorized to bring such a cause of action, §502(a)(2) provides that its cause of action may be brought by one or more of a plan’s fiduciaries and by the Secretary of Labor as well as by one or more of the plan’s participants and beneficiaries. A participant, beneficiary, or fiduciary who brings a §502(a)(2) action does so, in effect, as a representative of the plan and its participants and beneficiaries as a whole. [See Russell, 473 U.S. 134; Bryant v. International Fruit Product, Inc., 886 F.2d 132 (6th Cir. 1989)]. Similarly, the Secretary of Labor stands in the shoes of the plan’s participants and beneficiaries as a whole in bringing a §502(a)(2) action, but it also acts to vindicate the public interest. [See Secretary of Labor v. Fitzsimmons, 805 F.2d 682 (7th Cir. 1986).

While a systematic failure to properly pay benefit claims may rise to the level of a fiduciary breach [see Russell, 473 U.S. 134], a fiduciary breach claim under 502(a)(2) is not normally the proper cause of action for individual benefit claims. [See Simmons v. Southwestern Bell T&T Co., 940 F.2d 614 (11th Cir. 1991)]. However, where a plan’s benefit programs are designed by the plan’s fiduciaries (e.g., multiemployer plan board of trustees), rather than by the plan’s sponsor, the lower federal courts continue to review the benefit design decisions under fiduciary

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standards to determine if plan participants or beneficiaries are “arbitrarily” or “capriciously” excluded from benefit eligibility. [See, e.g., Phillips v. Alaska Hotel and Restaurant Pension Fund, 944 F.2d 509, as amended, 1991 U.S. App. Lexis 28491 (9th Cir. 1991), cert. denied, 504 U.S. 911 (1992); Caterino v. Barry, 8 F.3d 878 (1st Cir. 1993) (trustees’ decision to maintain rule prohibiting asset transfers reviewed under arbitrary and capricious standard); Ganton Technologies v. National Industry Group Pension Plan, 865 F. Supp. 201 (S.D.N.Y. 1994). But see Mine Workers Retirement and Health Funds v. Robinson, 455 U.S. 562 (1982)].

The Supreme Court has granted certiori on the issue of whether a health maintenance organization may be liable for breach of fiduciary duty under ERISA for refusing treatment. In Herdrich v. Pegram, 154 F.3d 362 (7th Cir. 1998), cert. granted, 120 S. Ct 10 (1999), the Seventh Circuit ruled that where defendant physicians managed the plan, including the doctor referral process, the nature and duration of treatment and every aspect of the HMO’s governance, and resolved disputed claims, they are plan fiduciaries. Monetary incentives offered to physicians to limit treatment can rise to the level of a breach of fiduciary duty.

Several courts have recognized §502(a)(2) claims against sponsor fiduciaries for failure to disclose certain information to plan participants, outside the disclosure requirements of ERISA, or for affirmatively misleading participants. It may not even be necessary for the beneficiary to request specific information in order to hold the fiduciary liable for nondisclosure of important information. See Jordan v. Federal Express Corp., 116 F.3d 1005 (3d Cir. 1997); Ream v. Frey, 107 F.3d 147 (3d Cir. 1997) (Trustee liable for resigning and transferring funds back to employer without notifying plan beneficiaries); Joyce v. RJR Nabisco Holdings corp., 126 F.3d 166 (3d Cir. 1997); Borowski v. IBM Corp., 978 F. Supp. 550 (D.Vt. 1997). For a case involving a duty to disclose referral incentives with respect to HMO operations see Shea v. Esensten, 107 F.3d 625 (8th Cir.), cert. denied, 522 U.S. 914 (1997) (duty to disclose). See also Weiss v. Cigna Healthcare, Inc., 972 F. Supp. 748 (S.D.N.Y. 1997) (Plan acts as fiduciary when controlling flow of participant

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medical information, but no fiduciary breach in offering incentive referral arrangements among physicians).

Courts have made a distinction between affirmative misrepresentations and less culpable negligent dissemination of inaccruate information. The 7th Circuit recently noted that ERISA’s fiduciary duty provisions are based upon a “prudent man” standard which does not impose strict liability for inaccurate information. While the giving of inaccurate information may be a form of negligence and a breach of the duty of care, it does not necessarily amount to a breach of fiduciary duty in terms of loyalty to plan participants addressed in ERISA 1104. The “prudent man” standard in ERISA addresses overall operation of the plan and does not create strict liability for staff errors. See Frahm v. Equitable Life Assurance, 137 F.3d 955 (7th Cir.), cert. denied, 119 S.Ct. 55 (1998); Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir.), cert. denied, 118 S.Ct. 2312 (1998) (holding that summary plan description need not mention that the plan is subject to modification); Chojnacki v. Georgia Pacific Corp., 108 F.3d 810 (7th Cir. 1997); Manning v. Niagra Mohawk Power, 1997 WL 216214 (N.D.N.Y. 1997). This is in accord with the 7th Circuit’s holding that there can be no breach of fiduciary duty for oral dissemination of wrong advice where the written terms of the plan provide accurate information. See Schmidt v. Sheet Metal Workers’ Pension Fund, 128 F.3d 541 (7th Cir. 1997), cert. denied, 523 U.S. 1073 (1998).

Affirmative misrepresentations are a different story. See Ballone v. Eastman Kodak, 109 F.3d 117 (2nd Cir. 1997) (employer may not actively misinform its plan beneficiaries about availablity of future benefits to induce them to retire early, regardless of whether it is seriously considering changes to the plan.). Other courts impose fiduciary liability for negligent dissemination of inaccurate information or dissemination of incomplete information. Estate of Becker v. Eastman Kodak, 120 F.3d 5 (2d Cir. 1997). Some courts have imposed fiduciary liability for unintentional misrepresentations. Glaziers & Glassworkers Union Local No. 252 Annuity Fund v. Newbridge Securities, 93 F.3d 1171 (3rd Cir. 1996) (unnamed fiduciary had duty to disclose suspected forgery by investment advisor because misconduct was fact beneficiary needed to know to protect itself); Curcio v.

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John Hancock Mut. Life Ins. Co., 33 F.3d 226 (3d Cir. 1994) (employer breached fiduciary duty by materially misrepresenting coverage under the plan); Mullins v. Pfizer, Inc., 23 F.3d 663 (2d Cir. 1994) (fiduciary will breach his duties if he makes affirmative misrepresentations about changes to plan); Vartanian v. Monsanto Co., 131 F.3d 264 (1st Cir. 1997) (administrators had a fiduciary duty not to mislead participants as to the prospective adoption of a plan under serious consideration); Hockett v. Sun Company, Inc., 109 F.3d 1515 (10th Cir. 1997) (same); Lenz v. Milwaukee County, 961 F. Supp. 1268 (E.D. Wis. 1997) (same); Bixler v. Central Pennsylvania Teamsters Health & Welfare Fund, 12 F.3d 1292 (3d Cir. 1993) (fiduciary obligated to remind beneficiary who inquired only about death benefits of COBRA rights if fiduciary knew of unpaid medical expenses that would be paid if COBRA election returned); Smith v. Hartford Ins. Group, 6 F.3d 131 (3d Cir. 1993) (employer misrepresented coverage under new plan thereby preventing disabled employee from electing conversion coverage under old plan); Fischer v. Philadelphia Elec. Co., 994 F.2d 130 (3d Cir.), cert. denied, 510 U.S. 1020 (1993); (employer may be subject to fiduciary liability if it fails to inform plan participants of contemplated changes in the terms of the plan); Drennan v. General Motors Corp., 977 F.2d 246 (6th Cir. 1992), cert. denied, 508 U.S. 940 (1993) (fiduciary’s failure to disclose its consideration to permit plaintiffs’ participation in the plan); Wilhett v. Blue Shield of Alabama, 953 F.2d 1335 (11th Cir. 1992) (fiduciary may not mispresent benefit eligibility); Eddy v. Colonial Life Ins. Co., 919 F.2d 747 (D.C. Cir. 1990) (fiduciary has affirmative duty on inquiry to convey correct and complete information about beneficiary’s options); Berlin v. Michigan Bell Tel. Co., 858 F.2d 1154 (6th Cir. 1988) (misleading communications to participants constitute breaches of fiduciary duty); Cerasoli v. Xomed, Inc., 972 F. Supp. 175 (W.D.N.Y. 1997); Center v. first International Life Ins. Co., 1997 WL 136473 (D.Mass. 1997); Professional Helicopter Pilots Ass’n. v. Denison, 804 F. Supp. 1447 (M.D. Ala. 1992) (sponsor fiduciary’s failure to notify employees that it did not contribute to the pension fund as required by the trust and collective bargaining agreements); Rucker v. Pacific FM, Inc., 806 F. Supp. 1453 (N.D. Cal. 1992) (sponsor fiduciary’s failure to provide notice of the termination of the disability plan). But see Sprague v. General Motors Corp.,133 F.3d 388 (6th Cir.

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1998) (holding that summary plan description need not mention that the plan is subject to modification); Bollenbacher v. Helena Chemical Co., 934 F. Supp. 1015 (N.D. Ind. 1996) (fiduciary status not imposed on employer when none previously exists simply because employer made representations about a benefit plan); Maxa v. John Alden Life Insurance Co., 972 F.2d 980 (8th Cir. 1992), cert. denied, 113 S.Ct. 1048 (1993); Kytler v. Stewart Title Co., 788 F. Supp. 321 (S.D. Ten. 1992)].

Also in contrast to 502(a)(1)(B) actions, the relief available in a 502(a)(2) action runs against the individual fiduciaries and in favor of the plan, rather than against the plan in favor of individual participants or beneficiaries. [See, e.g, Blue Cross and Blue Shield of Ala v. Weitz, 913 F.2d 1544 (11th Cir. 1990) (recovery of erroneous plan payments); ILGWU Health and Welfare Fund v. Teamsters Local 229 Welfare Trust, 764 F.2d 147, 154 (3d Cir. 1985); Martin v. Walton, 773 F. Supp. 1524 (S.D. Fla. 1991); Reid v. Gruntal & Co., Inc., 760 F. Supp. 945 (D. Me. 1991)]. That is, plan assets can be used to pay benefit claims to participants and beneficiaries. But, plan assets cannot be used to make restitution (to the plan) for fiduciary breaches by plan officials. [See ERISA §§406, 410; 29 U.S.C. §§1106, 1110].

ERISA §410 (a) generally prohibits agreements which relieve plan fiduciaries of responsibility for breaches of their plan duties. [See Martin, 773 F. Supp. 1524]. But, §410(b) allows plans (using plan assets) to obtain insurance protecting plan fiduciaries against liability for their acts or omissions provided that the insurance policy permits recourse by the insurer against the breaching fiduciary. Fiduciaries can obtain insurance against such insurer recourse, but the plan’s assets cannot be used to obtain this non-recourse insurance. Such fiduciary errors and omissions insurance is most appropriately invoked when the cause of action arises under ERISA §502(a)(2), and is directed against the plan fiduciary’s personal pocket, in contrast to a §502(a)(1)(B) action by a participant to recover benefits from the plan’s corpus.

Although §502(a)(2) on its face appears to relate only to the enforcement of ERISA’s fiduciary responsibility provisions (29 U.S.C. §§1101-1113), some courts have allowed this cause of action to redress violations of other ERISA statutory provisions. [See, e.g., Hughes Salaried Retirees

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Action Comm. v. Administrator of Hughes Non-Bargaining Retirement Plan, 39 F.3d 1002 (9th Cir. 1994) (disclosure provisions); Carland v. Metropolitan Life Ins. Co., 935 F.2d 1114 (10th Cir.), cert. denied, 502 U.S. 1020 (1991) (QDRO provisions); Larsen v. NMU Pension Plan, 767 F. Supp. 554 (S.D.N.Y. 1991) (joint and survivor provisions)].

A plan participant, a plan beneficiary, or a plan fiduciary may bring a civil action under ERISA §502(a)(3):

* to enjoin any act or practice which violates any provision of ERISA Title I;

* to enjoin any act or practice which violates the terms of the plan;

* to obtain other appropriate equitable relief to redress such violations;

* to obtain other appropriate equitable relief to enforce any provision of Title I; or

* to obtain other appropriate equitable relief to enforce the terms of the plan.

This cause of action encompasses claims to enforce rights (including benefit rights) under the terms of the plan as well as claims to enforce statutory rights. [See Patterson v. Shumate, 504 U.S. 753 (1992); Corcoran v. United Health Care, Inc., 965 F.2d 1321 (5th Cir.), cert. denied, 113 S.Ct. 812 (1992) (502(a)(1)(B) is for benefits only; 502(a)(3) is for additional relief)]. However, the Seventh and Third Circuits have held that substantive remedies are not available for violations of ERISA’s reporting and disclosure requirements except in extraordinary circumstances. See Jordan v. Federal Express Corp., 116 F.3d 1005 (3rd Cir. 1997) and Panaras v. Liquid Carbonic Indus. Corp. 74 F.3d 786,791 (7th Cir. 1996). Reflecting that the scope of this cause of action is broader than the personal benefit and other plan-based rights vindicated through §502(a)(1)(B), this cause of action can be brought by a plan fiduciary as well as by participants and beneficiaries. So, for example, a 502(a)(3) cause of action might be brought by a plan participant to compel a pension plan and its sponsor to grant vesting credit to which he is entitled under ERISA’s standards, or to compel a health plan to provide continuation coverage under ERISA’s

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“COBRA” provisions [e.g., National Companies Health Plan v. St. Joseph’s Hospital, 929 F.2d 1558 (11th Cir. 1991), abrogated on other grounds by Geissal v. Moore Medical Corp., 524 U.S. 74 (1998)], or for relief against an employer for violating ERISA §510 [e.g., Held v. Manufacturers Hanover Leasing Corp., 912 F.2d 1197 (10th Cir. 1990); Molina v. Mallah Organization, Inc., 804 F. Supp. 504 (S.D.N.Y. 1992)], or for relief against a fiduciary for failure to provide §503 notice and review [e.g., Tolle v. Carroll Touch, Inc., 977 F.2d 1129 (7th Cir. 1992)], or by a plan fiduciary to enforce an employer’s contribution obligation under ERISA [e.g., Connors v. Hallmark & Son Coal Co., 935 F.2d 336 (D.C. Cir. 1991); Central States Pension Fund v. Independent Fruit & Produce Co., 919 F.2d 1343 (8th Cir. 1990), cert. denied, 502 U.S. 811 (1991)], or by a plan fiduciary to enforce the rules of the plan [e.g., Chitkin v. Lincoln Nat’l Life Ins. Co., 1993 U.S. App. LEXIS 31024 (9th Cir. 1993); Winstead v. J.C. Penney Co., Inc., VEBA, 933 F.2d 576 (7th Cir. 1991)], or by a plan fiduciary to interplead competing benefit claims under the plan [e.g., Central States Plan v. Boyd, 762 F. Supp. 1263 (S.D. Miss. 1991)], or by a plan fiduciary to obtain an offset against benefits of an unscrupulous former trustee [e.g., Friedlander v. Doherty, 851 F. Supp. 515 (N.D.N.Y. 1994)]. A claim to enforce statutory rights may be combined with a claim under 502(a)(1)(B) and 502(a)(3) to collect benefits from the plan.

The §502(a)(3) cause of action is an alternative avenue to relief where the plaintiff cannot prevail under §502(a)(1)(B). The United States Supreme Court has stated: “The words of [section 502(a)(3)] ‘appropriate equitable relief to redress any act or practice which violates any provision of this title’ are broad enough to cover individual relief for breach of a fiduciary obligation.” “This structure suggests that these catchall provisions act as a safety net, offering appropriate equitable relief for injuries caused by violations that section 502 does not elswehere adequately remedy.” Varity Corp. v. Howe, 516 U.S. 489 (1996). Accordingly, relief has not been allowed under both sections at the same time. See Turner v. Fallon Community Health Plan, 127 F.3d 196 (1st Cir. 1997); Weiner v. Klais & Co, 108 F.3d 86 (6th Cir. 1997); Forsyth v. Humana, 114 F.3d 1467 (9th Cir. 1997), aff’d, 525 U.S. 299 (1999).

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The relief available in a §502(a)(3) cause of action may be broader than the relief available under §502(a)(2) (limited to §409 relief) or under §502(a)(1)(B) (recovery of benefits, enforcement or clarification of rights). §502(a)(3) provides for injunctions and “other appropriate equitable relief.” [See Lee v. Burkhart, 991 F.2d 1004 (2d Cir. 1993); Lafoy v. HMO Colo., 988 F.2d 97 (10th Cir. 1993); Harsch v. Eisenberg, 956 F.2d 651 (7th Cir.), cert. denied, 113 S.Ct. 61 (1992); Novak v. Anderson Corp., 962 F.2d 757 (8th Cir. 1992), cert. denied, 113 S.Ct. 2928 (1993); Ward v. Bethenergy Mines, Inc., 851 F. Supp. 235 (S.D. W.Va. 1994) (under (a)(3), court ordered defendant to redress plaintiff’s bad credit rating by informing health care creditors that bills did not get paid as a result of legitimate contract dispute)]. Some courts have held that this equitable relief may include monetary relief akin to compensatory damages. [See Meade v. Pension Appeals and Review Cmte., 966 F.2d 190 (6th Cir. 1992) (a fiduciary can be held liable to a participant under §502(a)(3) for contract violations where the injuries alleged are direct injuries resulting from ERISA violation); Reid v. Gruntal & Co., Inc., 763 F. Supp. 672 (D. Me. 1991). See also Corcoran v. United Health Care, Inc., 965 F.2d 1321 (5th Cir.), cert. denied, 113 S.Ct. 812 (1992) (damages for tort-style emotional injuries not available, but equitable remedies under trust and contract law may include monetary relief); and Lawrence v. Jackson Mack Sales, Inc., 837 F. Supp. 771 (S.D. Miss. 1992) (damages for loss of credit may be recoverable if it results in a pecuniary loss, the amount of which is reasonably ascertainable). Compare First National Life Ins. Co. v. Sunshine-Jr. Food Stores, 960 F.2d 1546 (11th Cir. 1992), cert. denied, 113 S.Ct. 1045 (1993) (no compensatory or punitive damages available to an insurer against an employer under (a)(3), but equitable relief may include money), with Sanson v. General Motors Corp., 966 F.2d 618 (11th Cir. 1992), cert. denied, 113 S.Ct. 1578 (1993) (no (a)(3) cause of action for damages for fraud). See also Novak, supra (no damages available); Harsch, supra (same)].

The Supreme Court in Mertens v. Hewitt Associates, 508 U.S. 248 (1993), has warned against expanding the available remedies under ERISA and has construed the term “appropriate equitable relief” under §502(a)(3) to mean traditional remedies, such as injunction, mandamus and restitution. In Youngberg v. Bekins Co., 930 F. Supp.

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1396 (E.D. Cal. 1996), the court held that indemnity is a traditional equitable remedy and available under ERISA. The restitution that the Court deemed appropriate under (a)(3) is that of disgorgement of profits, not the award of compensatory damages to restore losses to the plan or to place the parties in a position they would have been if there had been no breaches of fiduciary duty. In Russell v. Northrop Grumman Corp., 921 F. Supp. 143 (E.D.N.Y. 1996), the plaintiff was permitted to recover lost wages from his termination to the date of the court’s judgment because the court determined that such action was necessary to restore him to the dinancial position he would have been in had he not been illegally discharged, and the claim for lost wages was so intertwined with the injunctive relief of reinstatement.

The U.S. Supreme Court in Varity Corp. v. Howe, 516 U.S. 489 (1996), held that ERISA §502(a)(3) provides equitable relief that includes reinstatement to a plan to individual beneficiaries for breach of fiduciary duty. See also Ream v. Frey, 107 F.3d 147 (3d Cir. 1997) Jordan v. Federal Express Corp., 116 F.3d 1005 (3d Cir. 1997); Gabner v. Metropolitan Life Ins. Co., 938 F. Supp. 1295 (E.D. Tex. 1996); Izzarelli v. Rexene Products, 24 F.3d 1506 (5th Cir. 1994); Roth v. Sawyer-Cleator Lumber Co., 16 F.3d 915 (8th Cir. 1994); Waller v. Blue Cross, 32 F.3d 1337 (9th Cir. 1994); Bixler v. Central Pa. Teamsters Health & Welfare Fund, 12 F.3d 1292 (3d Cir. 1993). But see Watkins v. Westinghouse Hanford Co., 12 F.3d 1517 (9th Cir. 1993); Anweiler v. American Elec. Power Serv. Corp., 3 F.3d 986 (7th Cir. 1993); Richards v. General Motors Corp., 850 F. Supp. 1325 (E.D. Mich. 1994); Kaiser Permanente Employees Pension Plan v. Bertozzi, 849 F. Supp. 692 (N.D. Cal. 1994); But see Forsyth v. Humana Inc., 99 F.3d 1504 (9th Cir. 1996), aff’d on other grounds, Humana, Inc. v. Forsyth, 525 U.S. 299 (1999) (though Varity expands scope of equitable relief, such relief not available where § 1132(a)(3) provides an adequate remedy)].

Several courts have recognized promissory estoppel as a viable claim under §502(a)(3) under the federal common law of ERISA to recover benefits. Courts have generally relied on three theories of estoppel. Estoppel may be based on inconsistent statements or omissions in summary plan descriptions. [See, e.g., Barker v. Ceridian Corp., 193

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F.3d 976 (8th Cir. 1999); Coker v. TransWorld Airlines, Inc., 165 F.3d 579 (7th Cir. 1999); Stiltner v. Beretta U.S.A. Corp., 74 F.3d 1473 (4th Cir.) cert. denied 519 U.S. 810 (1996) (statements in summary plan description control over conflicting statements in plan documents, but only where beneficiary has relied upon such statements); Jensen v. SIPCO, Inc., 38 F.3d 945 (8th Cir. 1994); Aiken v. Policy Mgmnt. Systems Corp., 13 F.3d 138 (4th Cir. 1993); Hansen v. Continental Ins. Co., 940 F.2d 971 (5th Cir. 1991); Heidgerd v. Olin Corp., 906 F.2d 903 (2d Cir. 1990); Edwards v. State Farm Mut., Auto Ins. Co., 851 F.2d 134 (6th Cir. 1988); Genter v. ACME Scale & Supply Co., 776 F.2d 1180 (3d Cir. 1985); McKnight v. So. Life & Health Ins. Co., 758 F.2d 1566 (11th Cir. 1985). But see Sprague v. General Motor Corp., 133 F.3d 388 (6th Cir. 1998) (written representations presented to employees at time of retirement do not amend unambiguous plan document or provide basis for estoppel claim); Gridley v. Cleveland Pneumatic Co., 924 F.2d 1310 (3rd Cir.), cert. denied, 501 U.S. 1232 (1991) (SPD does not fall within definition of “plan” as contemplated by §502(a)(1)(B)); Branch v. G. Bernd Co., 955 F.2d 1574 (11th Cir. 1991) (no evidence of participant’s reliance on SPD); Bachelder v. Communications Satellite Corp., 837 F.2d 519 (1st Cir. 1988) (same)]. Estoppel may also be based on oral or written statements that interpret ambiguous plan provisions. [See, e.g., Greany v. Western Farm Bureau Life Ins. Co., 973 F.2d 812 (9th Cir. 1992); National Companies Health Benefit Plan v. St. Joseph’s Hosp., 929 F.2d 1558 (11th Cir. 1991); Kane v. Aetna Life Ins., 893 F.2d 1283 (11th Cir.), cert. denied, 498 U.S. 890 (1990)]. Some courts have applied estoppel based on oral or written statements that contradict unambiguous plan language. The application of the doctrine in these cases has been limited to welfare plans. [See, e.g., Armistead v. Vernitron Corp., 944 F.2d 1287 (6th Cir. 1991); Black v. TIC Investment Corp., 900 F.2d 112 (7th Cir. 1990). See also Smith v. Hartford Insur. Group, 6 F.3d 131 (3d Cir. 1993); Slice v. Sons of Norway, 978 F.2d 1045 (8th Cir. 1992) (noting circuits differing treatment of the issue); Landro v. Glendenning Motorways, Inc., 625 F.2d 1344 (8th Cir. 1980). Contra Sprague v. General Motors, 133 F.3d 388 (6th Cir. 1998) (no estoppel claim where written plan language is unambiguous); Anderson v. Resolution Trust Corp., 66 F.3d 956 (8th Cir. 1995) (rejected argument that oral or informal communications by an employer can modify the provisions

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of written plan); Watkins v. Westinghouse Hanford Co., 12 F.3d 1517 (9th Cir. 1993); Vershaw v. Northwestern Nat’l Life Ins. Co., 979 F.2d 557 (7th Cir. 1992); Miller v. Coastal Corp., 978 F.2d 622 (10th Cir. 1992), cert. denied, 507 U.S. 987 (1993); Coleman v. Nationwide Life Ins. Co., 969 F.2d 54 (4th Cir. 1992), cert. denied, 506 U.S. 1081 (1993); Degan v. Ford Motor Co., 869 F.2d 889 (5th Cir. 1989); Moore v. Metropolitan Life, 856 F.2d 488 (2d Cir. 1988); Natchwalter v. Christie, 805 F.2d 956 (11th Cir. 1986)]. Other recent estoppel cases include Librizzi v. Children’s Memorial Medical Center, 1997 WL 27073 (N.D. Ill. 1997); Gramm v. Bell Atlantic Mgmt., 983 F. Supp. 585 (D.N.J. 1997); O’Rourke v. Pitney Bowes, 1997 WL 431091 (S.D.N.Y. 1997); Pugh v. Metropolitan Life Insurance, 968 F. Supp. 178 (D.Del 1997); In Re Unisys Corp. Retiree Medical Benefits ERISA Litigation, 957 F. Supp. 628 (E.D.Pa. 1997).

A separate cause of action for the Labor Department to enforce the statutory provisions of ERISA, with certain limitations, is provided by ERISA §502(a)(5)[29 U.S.C. §1132(a)(5)].

The range of potential defendants in a §502(a)(3) cause of action may be wider than under a §502(a)(2) or §502(a)(1)(B) cause of action. For example, whereas the reach of a §502(a)(2) action may be limited to fiduciaries against whom the §409 remedies are directed, 502(a)(3) actions may reach nonfiduciary parties-in-interest who may be held liable for participating in prohibited transactions. Smith v. Provident Bank, 170 F.3d 609 (6th Cir. 1999); Herman v. South Carolina Nat’l Bank, 140 F.3d 1413 (11th Cir. 1998); Reich v. Stangl, 73 F.3d 1027 (10th Cir. 1996); Landwehr v. DuPree, 72 F.3d 726 (9th Cir. 1995); Reich v. Compton, 57 F.3d 270 (3d Cir. 1995).

Even though the majority of the Court in Mertens did not directly rule on the issue of liability of nonfiduciaries under §502(a)(3), there was skepticism expressed regarding the viability of such a claim against nonfiduciaries knowingly participating in a breach of fiduciary duty. Some courts relying on Mertens have expressly ruled that ERISA does not provide relief against nonfiduciaries who knowingly participate in a fiduciary breach. [See Harris Trust and Savings Bank v. Salomon Bros., Inc., 184 F.3d 646 (7th Cir. 1999), cert. granted, 68 U.S.L.W. 3252 (2000); Reich

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v. Rowe, 20 F.3d 25 (1st Cir. 1994) (addressing relief under §502(a)(2) and (a)(5)].

The issue of whether nonfiduciaries may be held liable for breaches of fiduciary duty is currently before the Supreme Court in Harris Savings Bank. In Harris Savings Bank, the Seventh Circuit ruled that a nonfiduciary, even if a party-in-interest, cannot be held liable for engaging in a §406 prohibited transaction. Relying on the language of §406, which states that “fiduciaries shall not . . .,” the Seventh Circuit held that a nonfiduciary cannot violate §406 and therefore cannot be liable under §502(a)(3) for a §406 violation.

Also, a government agency may be a defendant in a 502(a)(3) action to enforce ERISA. [See Nichols v. Asbestos Workers Pension Plan Trustees, 835 F.2d 881 (D.C. Cir. 1987)].

A plan fiduciary who exercises discretion in approving or denying claims for benefits (such as an insurance company) has §502(a)(3) standing to bring an interpleader action to determine who is entitled to benefits under a plan. An interpleader action to ascertain the proper recipient of benefits has been held to be an appropriate equitable action under Section 502(a)(3). This holds true even where one of the adverse potential recipients may not otherwise have standing to bring the dispute as a formal ERISA beneficiary. See Metropolitan Life Insurance Co. v. Pettit, 164 F.3d 857 (4th Cir. 1998) (Ins. Co. brings interpleader action to determine whether wife or ex-wife of deceased beneficiary is entitled to benefits); Metropolitan Life Insurance Co. v. Marsh, 119 F.3d 415 (6th Cir. 1997); Merchants Trust Co. v. Batchelder, 957 F. Supp. 532 (D.Vt. 1997).

A plan participant, a plan beneficiary, or the Secretary of Labor may bring a civil action under ERISA §502(a)(4) for appropriate relief in the case of a violation of ERISA §105(c) relating to individual benefit statements.

The Secretary of Labor, under certain conditions, may bring a civil action under ERISA 502(a)(5):

* to enjoin any act or practice which violates any provision of ERISA Title I; or

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* to obtain other appropriate equitable relief to redress such violation or to enforce any provision of ERISA Title I.

Conditions limiting the Secretary’s enforcement activity with respect to the statutory minimum standards (vesting, participation, funding, etc.) and with respect to the collection of multiemployer plan contributions from employers are set forth in ERISA §502(b).

The Secretary of Labor may bring a civil action under ERISA §502(a)(6) to collect any civil penalty due under §502(c)(2), §502(i) or §502(l).

ERISA §502(c)(2) authorizes the Secretary of Labor to assess a civil penalty against any plan administrator (of up to $1,000 per day) for failure or refusal to file a required annual financial report (i.e., Form 5500 Series). [See generally Northwestern Inst. of Psychiatry v. Martin, 16 E.B.C. 2066 (E.D. Pa. 1993) (action filed against the Secretary of Labor to prevent enforcement of a §502(c)(2) penalty)].

§502(i) authorizes the Secretary of Labor to assess a civil penalty against parties in interest who engage in prohibited transactions with welfare plans or non-qualified pension plans.

§502(l) requires the Labor Department to impose a 20% civil penalty in certain cases where a breaching fiduciary or a person who knowingly participates in the breach is required by litigation or settlement with the government to make restitution to a plan, subject to a limited authority to waive or reduce the penalty. [See generally, Mertens v. Hewitt Assoc., 508 U.S. 248 (1993) (§502(1) does not establish the existence of a damages remedy against non-fiduciaries under §502(a)(5); rather it assesses the penalty on an equitable award of restitution of ill-gotten plan assets or profits); Reich v. Rowe, 20 F.3d 25 (1st Cir. 1994) (same); followed Terry v. Bayer Corp., et al., 145 F.3d 28 (1st Cir. 1998)].

In addition to these 502(a) causes of action, ERISA 502(k) authorizes suits by a plan administrator, fiduciary, participant or beneficiary against the Secretary of Labor for judicial review of actions or inaction by the Secretary. Recourse against the Secretary is also provided under the Administrative Procedure Act which is incorporated by reference in ERISA §507, 29 U.S.C.

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§1137. [See Fernandez v. Brock, 840 F.2d 622 (9th Cir. 1987), reh’g denied 1988 U.S. App. LEXIS 6577 (9th Cir. 1988); Cutaiar v. Marshall, 590 F.2d 523 (3d Cir. 1979); Ocean Breeze Festival Park, Inc. v. Reich, 853 F. Supp. 906 (E.D. Va. 1994); Dillon v. Dole, 11 E.B.C. 2185 (E.D. Ark. 1989)].

Also, the Secretary of Labor is authorized by ERISA §502(b) to intervene in any private suit filed under §502(a), as is the Secretary of the Treasury except with respect to suits involving the fiduciary responsibility provision of ERISA Title I. [Bird v. Shearson Lehman/American Express, 926 F.2d 116 (2d Cir.), cert. denied, 501 U.S. 1251 (1991)].

Standing

Each §502(a) cause of action describes who can bring the action. Only four classes of potential plaintiffs are expressly described in these causes of action — plan participants, plan beneficiaries, plan fiduciaries, and the Secretary of Labor. Further, §502(e)(1) provides for jurisdiction only over the §502(a) causes of action "brought by the Secretary [of Labor], or by a participant, beneficiary, or fiduciary." All courts have held that standing to bring a §502(a) cause of action is strictly limited to these four classes. [McBride v. PLM Int’l, Inc., 179 F.3d 737 (9th Cir. 1999); Coleman v. Champion Int'l Corp., 992 F.2d 530 (5th Cir. 1993) (son of participant was not a beneficiary and, thus, has no standing); Jamail, Inc. v. Carpenters District Council, 954 F.2d 299 (5th Cir. 1992); Cripps v. Life Ins. Co. of North America, 980 F.2d 1261 (9th Cir. 1992); Sanson v. General Motors Corp., 966 F.2d 618 (11th Cir. 1991); Chemung Canal Trust Co. v. Sovran Bank, 939 F.2d 12 (2d Cir. 1991), cert. denied, 505 U.S. 1212 (1992) (former fiduciary lacks standing); McKinnon v. Blue Cross & Blue Shield, 13 E.B.C. 2611 (11th Cir. 1991); Sladek v. Bell System Mgt. Plan, 880 F.2d 972 (7th Cir. 1989); Giardano v. Jones, 867 F.2d 409, 413 (7th Cir. 1989); Gulf Life Ins. Co. v. Arnold, 809 F.2d 1520 (11th Cir. 1987); Provident Life & Accident Ins. Co. v. Waller, 906 F.2d 985 (4th Cir.), cert. denied, 498 U.S. 982 (1990); Pressroom Unions_Printers League Income Security Fund v. Continental Assurance Company, 700 F.2d 889 (2d Cir.), cert. denied, 464 U.S. 845 (1983) (plan does not have standing); ILGWU Fund v. Teamsters Health & Welfare Fund, 764 F.2d 147 (3d Cir. 1985) (same); Winstead v. J.C. Penney Co., Inc. VEBA, 933 F.2d 576 (7th Cir. 1991) (same, at least where cause of action is for fiduciary); U.S. Steel Mining Inc. v. Mineworkers, 897 F.2d 149 (4th Cir. 1990) (fund and employer as fiduciaries); Tuvia Convalescent Center, Inc. v. Hospital Employees, 717 F.2d 726 (2d Cir. 1983) (employer does not have standing); Dime Coal Company, Inc. v. Combs, 796 F.2d 394 (11th Cir. 1986) (same); Grand Union Company v. Food Employers Labor Relations, 808 F.2d 66 (D.C. Cir. 1987) (same); Whitworth Bros. Storage Company v. Central States Pension Fund, 794 F.2d 221 (6th Cir.), cert.

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denied, 479 U.S. 1007 (1986); New Jersey AFL_CIO v. New Jersey, 747 F.2d 891 (3d Cir. 1984) (union lacks standing); C.C. Mid West Inc. v. McDougall, 990 F. Supp. 914 (E.D. Mich. 1998) (plaintiff falls under none of the categories of parties eligible for relief); Schrader, et al. v. Hamilton, et al., 959 F. Supp. 1205 (C.D. Cal. 1997) (Plaintiff in capacity as shareholder in derivative suit does not fall within categories); Roncone v. Ligurotis, 1993 U.S. Dist. LEXIS 11640 (N.D. Ill. 1993) (former trustee does not have standing); Commonwealth Dept. of Pub. Welfare v. Lubrizol Retiree Health Care Plan, 1993 U.S. Dist. LEXIS 17329 (W.D. Pa. 1993) (state entity as assignee of participant's rights under the plan do not have ERISA standing); Carpenters Fringe Benefit Fund of Ill. v. Bi_State Loading Dock Specialists, Inc., 790 F. Supp. 1410 (S.D. Ill. 1992) (fund does not have standing); Buttram v. Central States Health and Welfare Fund, 781 F. Supp. 1429 (E.D. Mo. 1992) (same); Carpenters District Council v. Bowlus School Supply, Inc., 716 F. Supp. 1232 (W.D. Mo. 1989) (and the cases collected therein); UAW District 65 v. Harper & Row, Inc., 576 F. Supp. 1468 (S.D. N.Y. 1983) (union lacks standing); Anoka v. Orthopedic Assoc. P.A. v. Mutschler, 773 F. Supp. 158 (D. Minn. 1991) (plan does not have standing to assert ERISA claims itself); Psychiatric Institute v. Connecticut General Life Ins. Co., 780 F. Supp. 24 (D.D.C. 1992) (health care provider lacks independent standing); Jones v. Trevor Stewart, Burton and Jacobsen, Inc., 15 E.B.C. 2573 (N.D. Ga. 1992) (former fiduciary does not have standing); Richmond v. American Systems Corp., 792 F. Supp. 449 (E.D. Va. 1992) (minority shareholders themselves or derivatively lack standing); Martin v. Lundberg, 13 E.B.C. 1713 (N.D. Tex. 1991) (PBGC has standing as trustee to bring §502(a)(2), (a)(3) causes of action); IUE v. Murata Erie N.A., Inc., 13 E.B.C. 2022 (W.D. Pa. 1990). See also Franchise Tax Board of California v. Construction Laborers Vacation Trust, 463 U.S. 1 (1983) (suggesting that the §502(a) enumuation of potential plaintiffs is exclusive); Mackey v. Lanier Collections Agency & Service, Inc., 486 U.S. 825, 832 (1988) ("ERISA §502 provides that civil enforcement actions may be brought by particular persons...."); Patterson v. Shumate, 504 U.S. 753 (1992); Ocean Breeze Festival Park, Inc. v. Reich, 853 F. Supp. 906 (E.D. Va. 1994) (list of parties who can bring §502(k) action against Secretary of Labor is exclusive)].

Further, only those classes of prospective plaintiffs specifically identified in a particular §502(a) cause of action can bring that action. [See, e.g., Coyne & Delaney Co. v. Blue Cross & Blue Shield of Virginia, Inc., 102 F.3d 712 (4th Cir. 1996) (employer cannot bring claim on behalf of employee in suit against insurance company); Allstate Insurance Co. v. The 65 Security Plan, 879 F.2d 90 (3d Cir. 1989) (only participants or beneficiaries can sue for benefits under §502(a)(1)(B); the Secretary of Labor cannot); Kennedy v. Connecticut General Life Ins. Co., 924 F.2d 698 (7th Cir. 1991)(same); Provident Life & Accident Ins. Co. v. Waller,

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906 F.2d 985 (4th Cir. 1990) (plan fiduciary cannot bring 502(a)(1)(B) suit); Teagardner v. Republic_Franklin, Inc. Plan, 909 F.2d 947 (6th Cir. 1990) (only current participants and beneficiaries can sue under 502(a)(1)(B)); Chemung, 939 F.2d 12 (2d Cir. 1991) (only current fiduciaries can sue); Jones v. Trevor, Stewart, Burton and Jacobsen, Inc., 15 E.B.C. 2573 (N.D. Ga. 1992) (same); Schrader v. Hamilton, 959 F. Supp. 1205, 1210_11 (C.D. Cal 1997); Slye v. Central States Southesast and Southwest Areas Health and Welfare Fund, 956 F. Supp. 1357 (S.D. Ohio 1997); Schrader v. Harman Min. Corp., 961 F. Supp. 137 (W.D. Va. 1997)].

Although a plaintiff would lack standing in one capacity (e.g., employer), it may have standing to bring a §502(a) action in another capacity (e.g., plan fiduciary). [See, e.g., Coyne & Delaney Co. v. Selman, 98 F.3d 1457 (Va. 1996) (employer's duty to monitor plan administration gives it standing as a fiduciary able to sue to challenge inappropriate administration); Licensed Div. Dist. No. 1 MEBA/NMU, AFL_CIO V. DeFries, 943 F.2d 474 (4th Cir. 1991), cert. denied, 502 U.S. 1074 (1992) (division of union with authority to appoint trustees has standing); Ed Miniat, Inc. v. Globe Life Ins. Group, Inc., 805 F.2d 732 (7th Cir. 1986), cert. denied, 482 U.S. 915 (1987); American Federation of Unions Health & Welfare Fund v. Equitable Life Assurance Society, 647 F. Supp. 947 (M.D. La. 1985), aff'd. in part, rev'd. in part, 841 F.2d 658 (5th Cir. 1988) (plan as fiduciary); Carl Colteryahn Dairy, Inc. v. Western Teamsters & Emp. Pension Fund, 847 F.2d 113 (3d Cir. 1988), cert. denied, 488 U.S. 1041 (1989) (only employers who are fiduciaries have standing); Salamar Alum. Co. v. Aluminum Ind. Pension Plan, 782 F.2d 577 (6th Cir. 1986) (same); Questech Inc. v. Hartford Accident & Indemnity Co., 713 F. Supp. 956 (E.D. Va. 1989) (employer as beneficiary of insurance policy); Martin v. Lundberg, 13 E.B.C. 1713 (N.D. Tex. 1991) (PBGC as plan fiduciary)].

BUT NOTE: An employer or other entity which alleges that it is a fiduciary for purposes of obtaining standing may find itself a counterclaim defendant for breach of fiduciary duty.

The cases holding that employee benefit plans lack standing to bring §502(a) causes of action have not adequately dealt with the fact that ERISA §502(d) makes a plan a legal entity which can sue and be sued and which is itself liable for judgments against it. [See Carpenters Fringe Benefit Fund of Ill. v. Bi_State Loading Dock Specialist, Inc., 790 F. Supp. 1410 (S.D. Ill. 1992) (denied standing to plans); Buttram v. Central States Health and Welfare Fund, 781 F. Supp. 1429 (E.D. Mo. 1992) (same); Anoka Orthopaedic Assocs. P.A. v. Mutschler, 773 F. Supp. 158 (D. Minn. 1991) (same); Contra Winstead v. J.C. Penney Co. Inc., 933 F.2d 576 (7th Cir. 1991); U.S. Steel Mining Co., Inc. v. District 17, UMW, 897 F.2d 149 (9th Cir. 1990); NGS American, Inc. v. Barnes, 805 F. Supp. 462 (W.D. Tx. 1992), aff'd, 998 F.2d 296 (5th Cir. 1993);

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Coleman Clinic, Ltd. v. Massachusetts Mutual Life Insur. Co., 698 F. Supp. 740 (C.D. Ill. 1988)]. §502(d) is modeled after §302(e) of the Labor Management Relations ("Taft_Hartley") Act which made unions separate legal entities. In any event, plans can usually avoid standing problems by naming a fiduciary as the plaintiff or, perhaps by pleading jurisdiction under 28 U.S.C. §1331 [see discussion below].

As to who is a "participant" for purposes of §502(a) standing, see ERISA §3(7), 29 U.S.C. §1002(7) (statutory definition). In Bruch, the Supreme Court interpreted this statutory definition to mean: (1) "either employees in, or reasonably expected to be in, currently covered employment," or (2) "former employees who have a reasonable expectation of returning to covered employment or who have a colorable claim to vested benefits." According to the Court, in order to establish that he may become eligible for benefits, "a claimant must have a colorable claim that (1) he will prevail in a suit for benefits, or that (2) eligibility requirements will be fulfilled in the future." As to post_Bruch treatment, see, e.g., Matassarin v. Lynch, 174 F.3d 549 (5th Cir. 1999) (plan participant’s ex-wife, who is recipient under QDRO, has standing to bring breach of fiduciary duty claim); McBride v. PLM Int’l, Inc., 179 F.3d 737 (9th Cir. 1999) (plaintiff not employed at time of litigation has standing to bring ERISA whistleblower claim because he was a plan participant when the alleged ERISA violation occurred); Hall v. LHACO, 140 F.3d 1190 (8th Cir. 1998) (plaintiff lacks standing to pursue §502(a)(1)(B) or §502(a)(3) claim where defendant no longer has any connection with plan); Crotty v. J. Gordon Cook, 121 F.3d 541 (9th Cir. 1997) (standing as plan participant unaffected by defendant's payment of all vested benefits in middle of trial); Abraham v. Exxon Corp., 85 F.3d 1126 (5th Cir. 1996) (though plaintiff ultimately found not entitled to benefits he sought, he could be considered a "participant"); Shahid v. Ford Motor Co., 76 F.3d 1404 (6th Cir. 1996)(plaintiff had standing if, but for the alleged breaches, she would have potentially been eligible to become a plan member); Panaras v. Liquid Carbonic Ind. Corp., 74 F.3d 786 (7th Cir. 1996) (former employee stated "colorable claim to vested benefits" to give him standing because his claim was "not frivolous"); Davis v. Featherstone, 97 F. 3d 734 (4th Cir. 1996)(if plaintiff's claim is colorable when made, he has standing even if his claim of eligibility is ultimately unsuccessful); McLeod v. Oregon Lithoprint Inc., 102 F.3d 376 (9th Cir. 1996), cert. denied, 520 U.S. 1230 (1997) (plaintiff had standing even though she was not a participant in the plan to sue for plan benefits because she would have been a participant "but for" the employer's alleged violation); Swinney v. General Motors Corp., 46 F.3d 512 (6th Cir. 1995) (if breach of fiduciary duty causes employee to give up his right to benefits or to fail to participate in plan, employee has standing to challenge that fiduciary breach); Adamson v. Armco, Inc., 44 F.3d 650 (8th Cir.), cert. denied, 516 U.S. 823 (1995) (plaintiffs lost their participant status when they

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allowed their benefit claims to be time_barred); Crawford v. Lamantia, 34 F.3d 28 (1st Cir. 1994), cert. denied, 115 S.Ct. 1994 (1995) (former employee who had collected all vested benefits from his ESOP account did not have standing to sue the plan's trustees for breach of fiduciary duty); Waller v. Blue Cross, 32 F.3d 1337 (9th Cir. 1994) (although plan terminated, former participants had standing to pursue the equitable remedy of a constructive trust to distribute ill_gotten profits to former participants); Mullins v. Pfizer, Inc., 23 F.3d 663 (2d Cir. 1994) (employee has standing to state ERISA misrepresentation claim against employer who induced him to retire); Vartanian v. Monsanto Co., 14 F.3d 697 (1st Cir. 1994) (the test is whether plaintiff is "within the zone of interests ERISA was intended to protect"); Astor v. International Business Machines Corp., 7 F.3d 533 (6th Cir. 1993) (former employees who received benefits have standing to seek additional benefits); Flanagan v. Inland Empire Elec. Workers Pension Plan & Trust, 3 F.3d 1246 (9th Cir. 1993) (former participants of a terminated plan whose benefits were not vested at the time they left the plan were "affected participants" permitted to bring action for accrued benefit); Alexander v. Anheuser_Busch Companies, Inc., 990 F.2d 536 (10th Cir. 1993) (former disabled employee has no reasonable expectation of returning to employment and no colorable claim for disability benefits is not a participant); Shawley v. Bethlehem Steel Corp., 989 F.2d 652 (3d Cir. 1993) (former employees lacked standing since they had no reasonable expectation of returning to covered employment); Sallee v. Rexnord Corp., 985 F.2d 927 (7th Cir. 1993) (same); Raymond v. Mobil Oil Corp., 983 F.2d 1528 (10th Cir.), cert. denied, 510 U.S. 822 (1993) (former employees who had retired and received a lump sum payment of vested benefits are not participants); Sanson v. GM, 966 F.2d 618 (11th Cir. 1992) (plaintiff who voluntarily retired after employer fraudulently represented to him that special retirements benefits would not be offered to his category of employee was not participant); Willett v. Blue Cross and Blue Shield of Alabama, 953 F.2d 1335 (11th Cir. 1992) (plaintiff found to have standing, even though never covered by plan, where he would have been covered if premiums paid and plan policy not cancelled); Christopher v. Mobil Oil Corp., 950 F.2d 1209 (5th Cir.), cert. denied, 506 U.S. 820 (1992) (former employee has standing where claim is he was fired in violation of ERISA §510); Werner v. Morgan Equipment Co., 15 E.B.C. 2295 (N.D. Cal. 1992) (plaintiffs whose benefits had already been distributed had standing to sue on issue of whether benefits were properly computed); Winchester v. Michael Reese Health Plan Pension Cmte., 942 F.2d 1190 (7th Cir. 1991) (former employee who accepted lump sum and did not assert claim for two years was no longer a participant); Teagardener v. Republic_Franklin, Inc. Pension Plan, 909 F.2d 947 (6th Cir. 1990), cert. denied, 498 U.S. 1027 (1991) (rejecting former employees' contention that they were terminated from the plan before the residual assets vested in the remaining plan participants); Morales v. Pan Am Life Ins. Co., 914 F.2d 83 (5th Cir.

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1990) (former employees who had received their vested benefits lacked standing as participants to recover residual assets at the time of plan termination); Mitchell v. Mobil Oil Corp., 896 F.2d 463 (10th Cir.), cert. denied, 498 U.S. 898 (1990) (former employee who received all benefits no longer a participant); Acosta v. Pacific Enterprises, 950 F.2d 611 (9th Cir. 1991) (employee lacks standing in ERISA plan in which he did not participate); Borton v. Southwestern Bell Telephone Co., 933 F.2d 891 (10th Cir. 1991) (independent contractor not participant); McKinnon v. Blue Cross & Blue Shield, 935 F.2d 1187 (11th Cir. 1991) (estate representative not a participant or beneficiary for purposes of §510); Berger v. Edgewater Steel Co., 911 F.2d 911 (3d Cir. 1990), cert. denied, 499 U.S. 920 (1991) (former employees who received all benefits already and have no reasonable expectation of future covered employment are not participants); Nishimoto v. Federman_Bachrach & Assoc., 903 F.2d 709 (9th Cir. 1990) (former employee who did not receive benefits until after suit filed was participant); Drennan v. General Motors Corp., 977 F.2d 246 (6th Cir. 1992), cert. denied, 113 S.Ct. 2416 (1993); Ruocco v. Bateman, Eicker, Hill, Richards, Inc., 903 F.2d 1232 (9th Cir. 1990); Fleck v. Borg_Waarner, 892 F.2d 285 (3d Cir. 1989); Tait v. Barbknecht & Tait Profit Sharing Plan, 997 F. Supp. 763 (N.D. Tex. 1997) (participant need not be vested in the plan in order to be entitled to obtain plan documents); Katzoff v. Eastern Wire Products Co., 808 F. Supp. 96 (D.R.I. 1992) (addressing the "reasonable expectation of returning to covered employment" criterion); Zydel v. Dresser Industries, Inc., 764 F. Supp. 277 (W.D.N.Y. 1991) (same); Andre v. Salem Technical Services, 797 F. Supp. 1416 (N.D. Ill. 1992); Busacca v. EBMCD Union Local 436 Welfare Fund, 953 F. Supp. 867 (N.D. Ohio 1996) (former employee of the plan itself has no standing to bring action for civil enforcement); Pearson v. Prudential Health Care Plan of California, Inc., 942 F. Supp. 1284 (E.D.Cal. 1996) (employees do not have colorable claim to benefits from cancelled insurance policies for purposes of determining participant status.); Morris v. Winnebago Industries, Inc., 936 F. Supp. 1509 (N.D. Iowa 1996) (terminated employee has standing only if he also asserts colorable claim that his termination was meant to deprive him of plan benefits.)

As to who is an "employee" for purposes of the definition of "participant," see Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318 (1992), on remand, 969 F.2d 76 (4th Cir. 1992) (adopting common law definition of employee); Madonia v. Blue Cross & Blue Shield of Virginia, 11 F.3d 444 (4th Cir. 1993), cert. denied, 511 U.S. 1019 (1994); Trombetta v. Cragin Federal Bank for Savings ESOP, 102 F.3d 1435 (7th Cir. 1996) (administrator's classification of workers as independent contractors not arbitrary and capricious, discusses common law characteristics); Fugarino v. Hartford Life and Accident Ins. Co., 969 F.2d (6th Cir. 1992), cert. denied, 113 S.Ct. 1401 (1993) (sole proprietor or his dependents cannot

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qualify as participant or beneficiaries of ERISA plan); Roth v. American Hospital Supply Corp., 965 F.2d 862 (10th Cir. 1992); Mayeske v. Firefighters, 905 F.2d 1548 (D.C. Cir. 1990); Speen v. Crown Clothing Corp., 102 F.3d 625 (1st Cir. 1996), cert. denied, 520 U.S. 1276 (1997); Simpson v. Ernst & Young, 100 F.3d 436 (6th Cir. 1996), cert. denied, 520 U.S. 1248 (1997) (title of position not dispositive of employee status, partner showed signs of employee status rather than ownership status); Welsh v. Quabbin Timber, Inc., 943 F. Supp. 98 (D.Mass. 1996) (under either the economic reality test or common_law agency test, plaintiff showed characteristics of employer rather than employee and therefore lacked standing.); Dietz v. Cahill, 935 F. Supp. 223 (W.D.N.Y. 1996) (fund attorney not a salaried employee under terms of plan, although fund made contributions on his behalf).

As to who is a "beneficiary" for purposes of §502(a) standing, see ERISA §3(8), 29 U.S.C. §1002(8) (statutory definition). [See generally Brown v. Connecticut General Life Ins. Co., 934 F.2d 1193 (11th Cir. 1991) (ex_wife is a beneficiary); Kennedy v. Conn. Gen. Life Ins. Co., 924 F.2d 698 (7th Cir. 1991); McKinnon v. Blue Cross & Blue Shield of Alabama, 935 F.2d 1187 (11th Cir. 1991); Allen v. Western Conf. of Teamsters Fund, 788 F.2d 648 (9th Cir. 1986); Keys v. Eastman Kodak Co., 739 F. Supp. 135 (W.D. N.Y.), aff'd mem., 923 F. 2d 844 (2d Cir. 1990) (and cases collected therein)]. A beneficiary includes an "alternate payee" under a qualified domestic relations order involving a pension plan [see ERISA §206(d)(3)(J), 29 U.S.C. §1056(d)(3)(J); Stephen Allen Lynn, P.C. Profit Sharing Plan & Trust v. Stephen Allen Lynn, P.C., 25 F.3d 280, amended, on reh'g, in part, 1994 U.S. App. LEXIS 20219 (5th Cir. 1994); Munch v. ABC-NABET Retirement Plan Trust, 38 F. Supp.2d 270 (S.D.N.Y. 1999) (sufficiently colorable claim to establish standing for non-spouse named as beneficiary intended to receive benefits on participant’s death); Brotman v. Molitch, 1989 U.S. Dist. Lexis 9157 (E.D. Pa. 1989)], as well as a non_employee "qualified beneficiary" under the "COBRA" continuation coverage provisions of a health plan [see ERISA §607(3), 29 U.S.C. §1167(3)]. As to when a spouse may sue as a "beneficiary" to void her husband's benefit election, see Sladek v. Bell System Management Plan, 880 F.2d 972 (7th Cir. 1989); Bowman v. U.S. West, Inc., 1997 WL 118437 (D.Or. 1997) (No breach of fiduciary duty in stopping benefits to a plaintiff who was not entitled to benefits in the first place).

Most courts have held that a plaintiff whose claim is derivative through a person who himself is authorized to sue under §502(a) can have standing. Conversely, plaintiff lacks standing to sue on behalf of another where the other party was not a properly_enrolled beneficiary of the plan. See HealthSouth Rehabilitation Hospital v. American National Red Cross, 101 F.3d 1005 (4th Cir. 1996), cert. denied, 520 U.S. 1264 (1997). See also

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Texas Life, Acc. Health & Hosp. Service v. Gaylord Entertainment Co., 105 F.3d 210 (5th Cir. 1997) (assignment of fiduciary breach claim not prohibited); Reich v. Metrahealth Inc., 1996 U.S. App. LEXIS 16592 (9th Cir. June 18, 1996) (doctor as assignee of beneficiaries'/patients' rights does not have standing to sue for wrongful denial of benefits or breach of fiduciary duty); Lutheran Medical Ctr. v. Contractors, Laborers, Teamsters & Eng'rs Health & Welfare Plan, 25 F.3d 616 (8th Cir. 1994) (health care providers have standing as assignees); Kennedy v. Conn. Gen. Life Ins. Co., 924 F.2d 698 (7th Cir. 1991) (health care provider assigned benefits by participant is a "beneficiary"); Pitts v. American Sec. Life Ins. Co., 931 F.2d 351 (5th Cir. 1991) (father allowed to bring ERISA action on behalf of disabled son); Cromwell v. Equicor_Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991) (same); Memorial Hospital System v. Northbrook Life Ins. Co., 904 F.2d 236 (5th Cir. 1990); Hermann Hospital v. MEBA Medical & Benefits Plan, 845 F.2d 1286 (5th Cir. 1988); Misic v. Building Service Employees Health & Welfare Trust, 789 F.2d 1374 (9th Cir. 1986) (health service provider to whom plan participant has assigned benefit payments from plan had standing to sue plan); HCA_Health Services of New Hampshire v. Tennford Weaving Co., 1994 U.S. Dist. LEXIS 14844 (D.N.H. 1994); Protocare of Metropolitan New York, Inc. v. Mutual Ass'n Administrators, Inc., 866 F. Supp. 757 (S.D.N.Y. 1994); Hospital Group of Illinois v. Community Mutual Ins. Co., 1994 U.S. Dist. LEXIS 18206 (N.D. Ill. 1994); Northwestern Institute of Psychiatry, Inc. v. Travelers Ins. Co., 1992 U.S. Dist. LEXIS 13700 (E.D. Pa. 1992) (collecting Third Circuit cases); Randolph v. Prudential Health Care Plan, Inc., 1993 U.S. Dist. LEXIS 11715 (N.D. Ill. 1993) (administrator of estate of deceased plan participant has §502 standing); Cottle v. Metropolitan Life Ins. Co., 1993 U.S. Dist. LEXIS 150 (N.D. Ill. 1993) (trustee of testamentary trust established by beneficiary has derivative standing); James v. Louisiana Laborers Health & Welfare Fund, 766 F. Supp. 530 (E.P. La. 1991) (estate administrator has standing); Belmont Hospital v. IBEW Local 9 Health & Welfare Fund, 737 F. Supp. 1034 (N.D. Ill. 1990); Allstate Ins. Co. v. Operating Eng'rs Local 324 Health Care Plan, 742 F. Supp. 952 (E.D. Mich. 1990). But see Allstate Ins. Co. v. The 65 Security Plan, 879 F.2d 90 (3d Cir. 1989) (subrogated insurer lacks §502(a) standing); Northeast Dep't. ILGWU Health & Welfare Fund v. Teamsters Local Union No. 229 Welfare Fund, 764 F.2d 147 (3d Cir. 1985) (assignees lack standing); Parkside Lutheran Hospital v. Zeltner & Assoc., Inc., 788 F. Supp. 1002 (N.D. Ill. 1992) (health care provider denied standing because plan precluded assignment of benefits); Nationwide Mutual Ins. Co. v. Teamsters Health & Welfare Fund, 695 F. Supp. 181 (E.D. Pa. 1988) (subrogated car insurer lacks ERISA standing)].

Courts generally will enforce plan provisions invalidating assignments. [See Arkansas Blue Cross & Blue Shield v. St. Mary’s Hosp. Inc., 947 F.2d 1341 (8th Cir. 1991), cert. denied, 504 U.S. 957 (1992); Davidowitz

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v. Delta Dental Plan, Inc., 946 F.2d 1476 (9th Cir. 1991); Home Nutritional Services, Inc. v. Blue Cross & Blue Shield of Mass., 1993 U.S. Dist. LEXIS 12240 (D. Mass. 1993); Parkside Lutheran Hosp. v. Zeltner & Assoc., Inc., 788 F. Supp. 1002 (N.D. Ill. 1992); Washington Hosp. Center Corp. v. Group Hospitalization & Medical Servs., Inc., 758 F. Supp. 750 (D.D.C. 1991). But see Lutheran Medical Ctr. v. Contractors, Laborers, Teamsters & Eng’rs. Health & Welfare Plan, 25 F.3d 616 (8th Cir. 1994) (plan anti-assignment clause only prohibited assignment of rights and benefits, not assignment of causes of action); Hermann Hosp. v. MEBA Medical and Benefits Plan, 959 F.2d 569 (5th Cir. 1992) (refused to enforce plan’s anti-assignment provision because the plan failed to notify the assignee of prohibition)].

Although a union qua union may lack §502(a) standing, it may serve as a §502(a) plaintiff to the extent it can show that it represents plan participants who are members of the union. [See, e.g., Air Line Pilots Association v. Northwest Airlines, 627 F.2d 272 (D.C. Cir. 1982); Ironworkers Local 111 v. Douglas, 646 F.2d 1211 (7th Cir.), cert. denied, 454 U.S. 866 (1981); Walker v. Jaffee, 5 E.B.C. 2736 (W.D. Tex. 1983); Hawaii Teamsters Local 996 v. City Express, Inc., 751 F. Supp. 1426 (D. Ha. 1990); But see New Jersey State AFL_CIO v. New Jersey, 747 F.2d 891 (3d Cir. 1984) ("It is clear from the statute that labor unions are neither participants or beneficiaries"); International Union United Auto Aerospace & Agric. Implement Workers' v. Auto Glass Employees Fed. Credit Union, 858 F. Supp. 711 (M.D. Tenn. 1994). Cf. Asbestos Workers v. West Insulators Contractors Assn., 772 F. Supp. 493 (E.D. Ca. 1991). Of course, a union will have standing in its own right if it is a plan fiduciary. [See Licensed Div. Dist. 1 MEBA/NMU v. Defries, 943 F.2d 474 (4th Cir. 1991), cert. denied, 502 U.S. 1074 (1992) (union may be fiduciary if it has power to appoint and remove plan trustees)].

Plan participants do not have standing to directly sue contributing employers or plan service providers on behalf of the plan; they can bring only a derivative action if the plan trustees breach their fiduciary duty by not suing the employer or service providers. [See Diduck v. Kaszycki & Sons Contractors,Inc., 974 F.2d 270 (2d Cir. 1992); Struble v. N.J. Brewery Employees Welfare Fund, 732 F.2d 325 (3d Cir. 1984); Molina v. Mallah Organization, Inc., 804 F. Supp. 504 (S.D.N.Y. 1992). See also Licensed Div. Dist. No. 1 MEBA/NMU v. Defries, 943 F.2d 474 (4th Cir. 1991), cert. denied, 502 U.S. 1074 (1992)].

Even though a plaintiff lacks §502(a) standing, he/she/it may be able to invoke a federal court's general federal question jurisdiction under 28 U.S.C. §1331 subject to satisfying the broader constitutional standing requirements. [See Self_Insurance Inst. of Am. v. Korioth, 993 F.2d 479 (5th Cir. 1993) (an association could maintain an action on behalf of its members to enjoin enforcement of state law); Jamail, Inc. v. Carpenters

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District Council, 954 F.2d 299 (5th Cir. 1992) (employer could maintain an action for restitution of overpayment to multiemployer plan); Provident Life & Accident Ins. Co. v. Waller, 906 F.2d 985 (4th Cir. 1990); Whitworth Bros. Storage v. Central States Pension Fund, 794 F.2d 221 (6th Cir. 1986); ILGWU Health & Welfare Fund v. Teamsters Welfare Fund, 764 F.2d 147 (3d Cir. 1985); Stone & Webster Eng. Corporation v. Ilsley, 690 F.2d 323 (2d Cir. 1982), sum. aff'd sub nom., Arcudi v. Stone & Webster Eng. Corporation, 463 U.S. 1220 (1983) (employer sued state agency for declaratory and injunctive relief from State law preempted by ERISA); Provident Life & Accident Ins. Co. v. Waller, 906 F.2d 985 (4th Cir.), cert. denied, 498 U.S. 982 (1990); Associated Builders and Contractors v. Perry, 1994 U.S. Dist. LEXIS 8437 (E.D. Mich. 1994) (association of employers has standing to pursue its claims that ERISA preempts state prevailing wage laws); NSG American, Inc. v. Barnes, 805 F. Supp. 462 (W.D. Tex. 1992), aff'd, 998 F.2d 296 (5th Cir. 1993) (plan's declaratory action against state law); Jones v. Sonat, Inc. Master Employee Benefit Plan, 1992 U.S. Dist. LEXIS 9911 (E.D. La. 1992) (action to determine if settlement award under Jones Act was properly offset against employee's disability payments); Dugan v. Nickla, 763 F. Supp. 981 (N.D. Ill. 1991); Alexander v. Lynch Corp., 12 E.B.C. 1822 (S.D. Ind. 1990). See also Winstead v. J.C. Penney Co. VEBA, 933 F.2d 576 (7th Cir. 1991)].

The Pension Annuitants Protection Act was signed into law in October 1995. This law amended ERISA to add §502(a)(7), providing standing to participants who have been "bought out" of their pension plan through the purchase of an insurance contract or annuity. The amendment was specifically designed to overturn court decisions holding that annuitants were not plan participants and therefore lack standing under ERISA to challenge the decision of the plan fiduciary to dispose of plan assets by purchasing annuities. Maher v. Strachan Shipping Co., 68 F.3d 951 (5th Cir. 1995). The amendment applies to any legal proceeding pending or brought or after May 31, 1993.

Courts are divided as to whether a participant loses standing if all benefits due are paid during the course of litigation. The Ninth Circuit has ruled that payment of benefits due does not remove plaintiff's standing to sue. "Requiring an ERISA plaintiff to be a "participant" at all times throughout a lawsuit would have the curious effect of forcing plaintiffs to choose between a defendant's offer of paying a plaintiff's vested benefits during an ERISA lawsuit or maintaining the lawsuit at the expense of foregoing vested benefits during the litigation." Crotty v. Cook, 121 F.3d 541 (9th Cir. 1997); Schultz v. PLM International, Inc., 127 F.3d 1139 (9th Cir. 1997). This was in accordance with its prior decision to the same effect in Harris v. Provident Life and Accident Ins. Co., 26 F.3d 930 (9th Cir. 1994). This is contrary to the holding of the First Circuit in Crawford v.

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Lamantia, 34 F.3d 28 (1st Cir. 1994) where an ERISA plaintiff lost his "participant" status when he stopped working for the defendant during the litigation.

Subject Matter Jurisdiction

Jurisdiction is a statutory creature. [See Winstead, 933 F.2d 576]. ERISA §502(e)(1) [29 U.S.C. §1132(e)(1)] generally vests the United States district courts with exclusive jurisdiction over all actions brought under ERISA Title I. [See generally Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 52 (1987); Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987); Bird v. Shearson Lehman/American Express, 926 F.2d 116 (2d Cir. 1991)]. The sole exception is that actions brought under §502(a)(1)(B) to recover benefits due under the terms of a plan may be filed in either a State court of competent jurisdiction or in Federal court, provided that the case does not require application of ERISA's terms but rather involves only interpretation or application of the terms of a plan. [See Healey v. Healey, 910 F. Supp. 249 (E.D.N.C. 1996) (plaintiff could not use ERISA as avenue to federal court to attack a state court judgment involving garnishment of his pension); Mackey v. Lanier Collections Agency & Service, Inc., 486 U.S. 825 (1988); Crucible, Inc. Plan v. Nobers, 968 F.2d 401 (3d Cir. 1992), cert. denied, 113 S.Ct. 1066 (1993); Shoefer v. Stuart Hack Co., 970 F.2d 1316 (4th Cir. 1992); Farrell v. Automobile Club of Michigan, 870 F.2d 1129 (6th Cir. 1989); Chilton v. Savannah Foods & Ind., Inc., 814 F.2d 620 (11th Cir. 1987); Levy v. Lewis, 635 F.2d 960 (2d Cir. 1980); In Re Marsh Estate, 12 E.B.C. 1966 (S.D. N.Y. 1990)]. Even if the case is appropriately before a State court, federal substantive law governs. [See Metropolitan Life Insurance Co. v. Taylor, supra].

It is necessary that an ERISA covered plan be involved; otherwise courts will decline to exercise federal jurisdiction. [See, e.g., Kenney v. Roland Parson Contracting Corp., 28 F.3d 1254 (D.C. Cir. 1994) (plan need not be formalized to be subject to ERISA and federal jurisdiction); Eatherton v. Jet Plastica Industries, 21 E.B.C. 2022 (3rd Cir. 1997) (short term disability payments made from employer’s general assets do not constitute an ERISA Plan, complaint therefore fails to vest the court with subject matter jurisdiction); MD Physician & Assoc., Inc. v. Texas Board of Insurance, 957 F. 2d 178 (5th Cir.), cert. denied, 506 U.S. 861 (1992) (MEWA was not ERISA-covered plan); State of Texas v. Alliance Leasing Corp., 797 F. Supp. 542 (N.D. Tx. 1992) (plans not subject to ERISA).

Claimants in §502(a)(1)(B) benefit cases may prefer State courts for various reasons, including familiarity with the court, length of the court's calendar relative to the Federal court, a more sympathetic forum and rules,

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preferences in State courts towards jury trials, unfamiliarity of the State courts with ERISA's technical issues, etc.

§502(f) provides that the Federal district courts have jurisdiction over §502(a) causes of action without regard to the amount in controversy.

The federal courts' exclusive jurisdiction over ERISA claims is such that some federal courts have enjoined State actions that violate ERISA. [See, e.g., Travelers Ins. Co. v. Cuomo, 14 F.3d 708 (2d Cir. 1993), rev'd and remanded on other grounds, 514 U.S. 645 (1995); Plumbing Ind. Retirement Trust Fund v. Franchise Tax Board, 909 F.2d 1266 (9th Cir. 1990); General Motors Corp. v. Buha, 623 F.2d 455 (6th Cir. 1980). But see Crucible, Inc. Plan v. Nobles, 968 F.2d 401 (3d Cir. 1992), cert. denied, 506 U.S. 1086 (1993) (ERISA does not authorize such relief); Total Plan Services, Inc. v. Texas Retailers Asn., Inc., 13 E.B.C. 1706 (5th Cir. 1991); U.S. Steel Plan v. Musisko, 885 F.2d 1170 (3d Cir. 1989), cert. denied, 493 U.S. 1074 (1990). See also E_Systems, Inc. v. Pogue, 929 F.2d 1100 (5th Cir. 1991) (state courts lack jurisdiction to decide issues of ERISA preemption)].

Federal courts have often asserted "pendant jurisdiction" over State law claims combined with ERISA claims. [See, e.g., Finz v. Schlesinger, 957 F.2d 78 (2d Cir.), cert. denied, 506 U.S. 822 (1992) (even after federal claim dismissed, court may still retain jurisdiction over the state claim); Nishimoto v. Federman_Bachrach & Assoc., 903 F.2d 709 (9th Cir. 1990); Sorosky v. Burroughs Corp., 826 F.2d 794 (9th Cir. 1987)]. However, if the State law claims "relate to" an employee benefit plan, they may be subject to dismissal on grounds that they are preempted by ERISA under §514, 29 U.S.C. §1144. [See, e.g., Pilot Life, 481 U.S. 52; Staub v. Western Union Telegraph Co., 851 F.2d 1262 (10th Cir. 1988)].

Federal courts have asserted "supplemental jurisdiction" over State law claims if the factual basis for the State and ERISA claims are sufficiently intertwined (even though each claim is against two different defendants). [See, e.g., Aetna Life Ins. Co. v. Hager, 930 F. Supp. 343 (E.D. Wis. 1996) (Aetna was an ERISA fiduciary, and interpleader is essentially an equitable action, so Aetna could maintain federal question jurisdiction); Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182 (2d Cir. 1996) (though supplemental jurisdiction over state claims is improper without existence of original federal subject matter jurisdiction, court affirmed exercise of supplemental jurisdiction when dismissal was construed as for failure to state a claim under Rule 12(b)(6) instead of 12(b)(1)); Rodriguez v. Pacificare of Texas, 980 F.2d 1014 (5th Cir.), cert. denied, 508 U.S. 956 (1993) (as part of Judicial Improvements Act of 1990, district courts are accorded "supplemental jurisdiction" over claims so related to a federal question" that they form part of the same case or controversy under Article III of the U.S. Constitution)].

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As discussed above, jurisdiction based on ERISA §502 has limitations (e.g., standing). Basing jurisdiction on 28 U.S.C. §1331 (federal question jurisdiction) may avoid some of these limitations and yet bring before the court ERISA_based issues. [See Stone & Webster Eng. Corp. v. Ilsley, 690 F.2d 323 (2d Cir. 1982), sum. aff'd sub nom., Arcudi v. Stone & Webster Eng. Corp., 463 U.S. 1220 (1983); Jamail, Inc. v. Carpenters District Council, 954 F.2d 299 (5th Cir. 1992); Whitworth Bros. Storage Co. v. Central States Pension Fund, 794 F.2d 221 (6th Cir. 1986); Dime Coal Co., Inc. v. Combs, 796 F.2d 394 (11th Cir. 1986); ILGWU Health & Welfare Fund v. Teamsters Welfare Fund, 764 F.2d 147 (3d Cir. 1985); Dugan v. Nickla, 763 F. Supp. 981 (N.D. Ill. 1991), and other cases cited above under "Standing". But see Albrado, Inc. v. Bevona, 982 F.2d 82 (2d Cir. 1992) (questioning the continuing validity of Stone & Webster)].

Federal court jurisdiction under ERISA is limited when it touches matters already designated by preexisting Federal law for non_judicial resolution. [See Laborers Health & Welfare Trust Fund v. Advanced Lightweight Concrete Company, 484 U.S. 539 (1988) (National Labor Relations Board's jurisdiction prevails over courts' on certain contribution collection cases); Bowe v. Northwest Airlines, Inc., 974 F.2d 101 (8th Cir. 1992), cert. denied, 113 S.Ct. 1602 (1993) (Railway Labor Act procedures deprive court of jurisdiction over contractual claims); Air Line Pilots Assn. v. Northwest Airlines, 627 F.2d 272 (D.C. Cir. 1982) (same). But see Scarfi v. Brightstar Industries, 779 F. Supp. 687 (E.D.N.Y. 1992) (federal jurisdiction under §502(e)(1) may be concurrent with that of the NLRB)].

Once the federal court has jurisdiction over an ERISA case, it may "issue all writs necessary or appropriate in aid of [its] ... jurisdiction and agreeable to the usuages and principles of law," in accorance with the All Writs Act, 29 U.S.C. §1651. [See, e.g., In re Consolidated Welfare Fund ERISA Litigation, 798 F. Supp. 125 (S.D.N.Y. 1992) (writ issued staying all litigation against the fund in order to effectuate its jurisdiction over the case and to ensure the fund's orderly dissolution). See discussion of scope of All_Writs Act in U.S. v. International Brotherhood of Teamsters, 964 F.2d 180 (2d Cir. 1992)].

The federal courts may decline to exercise their jurisdiction under the abstention doctrine. [See, e.g., Morisada Corp. v. Beidas, 939 F. Supp. 732 (D. Haw. 1996) (court stayed federal action pending resolution of state claims when chance of duplicative litigation and inconsistent results was high); General Glass Industries Corp. v. Monsour Medical Foundation, 973 F.2d 197 (3d Cir. 1992)].

The federal courts may also decline to exercise its jurisdiction under the Princess Lida doctrine and the Colorado River abstention doctrine. [See Dailey v. National Hockey League, 987 F.2d 172 (3d Cir.), cert. denied,

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114 S.Ct. 67 (1993); But see Health Cost Controls v. Washington, 1996 U.S. Dist. LEXIS 6415 (N.D. Ill 1996) (court has no discretion under the Colorado River Doctrine to stay proceedings as to claims within exclusive federal jurisdiction)].

The exclusive federal jurisdiction of ERISA §§502(e) and (f) may not preclude binding arbitration. [See Bird v. Shearson Lehman/American Exp., Inc., 926 F.2d 116 (2d. Cir.) (split decision), cert. denied, 501 U.S. 1251 (1991); Arnulfo P. Sulit, Inc. v. Dean Witter Reynolds, Inc., 847 F.2d 475 (8th Cir. 1988). Contra Johnson v. St. Francis Xavier Cabrini Hosp., 910 F.2d 594 (9th Cir. 1990) (agreement to arbitrate disputes not enforceable when claim at issue involved violation of statute); Barrowclough v. Kidder, Peabody & Co., 752 F.2d 923 (3d Cir. 1985) (same); Amaro v. Continental Can Co., 724 F.2d 747 (9th Cir. 1984) (arbitration decision is not res judicata to ERISA claim); Hart v. Canadian Imperial Bank of Commerce, et al., 43 F. Supp. 395 (S.D. N.Y. 1999)].

Removal From State to Federal Court

ERISA cases are subject to the general principles of removal of actions from State to Federal court under 28 U.S.C. §1441, et seq. There are, however, some particular applications of those principles under ERISA which have developed.

Under general removal principles, the availability of removal depends on whether a federal question is presented on the face of a "well pleaded" State court complaint. [See Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust, 463 U.S. 1 (1983); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987); Allstate Ins. Co. v. The 65 Security Plan, 879 F.2d 90 (3d Cir. 1989); Brown v. Connecticut General Life Ins. Co., 934 F.2d 1193 (11th Cir. 1991)]. Accordingly, an ERISA preemption defense to a complaint based on State law is not generally grounds for removal. [See Sarkis v. Heimberger, 933 F. Supp. 828 (E.D. Mo. 1996) (case remanded to state court because complaint did not relate to defendants' fiduciary duties as plan administrator but to defendants as corporate officers); Franchise Tax Board, 463 U.S. 1; Franklin H. Williams Ins. Trust v. Travelers Ins. Co., 50 F.3d 144 (2nd Cir. 1995) (removal improper because federal preemption was a defense to plaintiff's suit and did not appear on the face of the complaint); Warner v. Ford Motor Co., 46 F.3d 531 (6th Cir. 1995) (overruling Van Camp v. AT & T, 963 F.3d 1119 (6th Cir.), cert. denied, 113 S.Ct. 365 (1992), court held plaintiff's complaint not subject to removal unless claim had characteristics of an action under §502(a)(1)(B); Rice v. Panchal, 1995 U.S. App. LEXIS 25813 (7th Cir. 1995); Pacificare, Inc. v. Barrage, 59 F.3d 151 (10th Cir. 1995) (rejecting removal of malpractice claims brought against HMO); Duke v. U.S. Health Care, Inc., 57 F.3d 350 (3rd Cir.), cert. denied, 516 U.S. 1009 (1995) (same); Alexander v.

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Electronic Data Sys. Corp., 13 F.3d 940 (6th Cir. 1994); Albrado, Inc. v. Bevona, 982 F.2d 82 (2d Cir. 1992); Tingley v, Pixley_Richards West, Inc., 953 F.2d 1124 (9th Cir. 1992); Brown v. Connecticut General Life Ins. Co., 934 F.2d 1193 (11th Cir. 1991); Eugenia Hosp. v. Kim, 844 F. Supp. 1030 (E.D. Pa. 1994) (no removal of hospital's suit against plan for negligent misrepresentation, negligence, promissory estoppel and quasi_contract claims); Hogan v. Transamerica Comm. Finance Corp., 1992 U.S. Dist. LEXIS 13557 (N.D. Ill. 1992); DePasquale v. Aetna Life Ins. Co., 743 F. Supp. 364 (E.D. Pa. 1990); but see In Re Life Ins. Co. of North America, 857 F.2d 1190 (8th Cir. 1988)]. Similarly, a counterclaim seeking a declaratory judgment on ERISA rights will not entitle defendants to removal. [See Takeda v. Northwestern Nat. Life Ins. Co., 765 F.2d 815 (9th Cir. 1985). Contra Shannon v. Shannon, 965 F.2d 542 (7th Cir.), cert. denied, 506 U.S. 1028 (1992) (removal appropriate where counterclaims asserted against plan)].

However, a State court complaint seeking recovery of benefits from an ERISA_covered plan is subject to timely removal to Federal court, even though the complaint does not invoke ERISA on its face. If there is a remedy under ERISA, then the complaint is removable. [See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987); Whitt v. Sherman Int’l Corp., 147 F.3d 1325 (11th Cir. 1998)(state law claims seeking recovery of plan benefits recharacterized as ERISA claims and subject to removal); accord Parrino v. FHP Healthcare, 146 F.3d 699 (9th Cir. 1998) (state charges predicated on alleged defects in processing health insurance claims fall within scope of §502(a)(1)(B)); Hendon v. Du Pont, 1998 U.S. App. LEXIS 7573 (6th Cir. 4/13/98) (removal of state court actions of conversion and breach of contract); Warren v. Blue Cross & Blue Shield of South Carolina (4th Cir. 1997); Kemp v. IBM Corp., 109 F.3d 708 (11th Cir. 1997); Romney v. Lin, 105 F.3d 806 (2d Cir.), cert. denied, 522 U.S. 906 (1997); Buster v. Greisen, Head and Ratchye, 104 F.3d 1186 (9th Cir. 1997); Schmeling v. NORDAM, 97 F.3d 1336 (10th Cir. 1996); Tolton v. American Biodyne, Inc., 48 F.3d 937 (6th Cir. 1995) (removal proper where claims arise from alleged improper denial of benefits under an ERISA plan, following squarely within §502(a)); Sofo v. Pan_American Life Ins. Co., 13 F.3d 239 (7th Cir. 1994) (plaintiff's claim for wrongful recission is removable); Madonia v. Blue Cross & Blue Shield, 11 F.3d 444 (4th Cir. 1993), cert. denied, 114 S.Ct. 140 (1994); D'Ambrosio v. Chicago Truck Drivers Union, 983 F.2d 1072 (7th Cir. 1992) (removal appropriate since complaint appears to seek recovery of benefits due); Smith v. Dunham_Bush, Inc., 959 F.2d 6 (2d Cir. 1992); Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073 (7th Cir. 1992); Hansen v. Continental Ins. Co., 940 F.2d 971 (5th Cir. 1991) (plan beneficiary's claim seeking increased benefits properly removed to federal court); In Re Life Ins. Co. of North America, 857 F.2d 1190 (8th Cir. 1988) (issuing writ of mandamus directing district court not to remand to

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state court); Felton v. Unisource Corp., 940 F.2d 503 (9th Cir. 1991); Cantrell v. Great Republic Insurance Co., 873 F.2d 1249 (9th Cir. 1989); Carland v. Metropolitan Life Ins. Co., 935 F.2d 1114 (10th Cir. 1991), cert. denied, 502 U.S. 1020 (1992); Cromwell v. Equicor_Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991); Brown v. Conn. Gen. Life Ins. Co., 934 F.2d 1193 (11th Cir. 1991)]. This is because benefit claims against ERISA_covered plans are deemed to arise exclusively under ERISA.

Some courts have extended the Taylor rule into other types of claims which are deemed necessarily federal in character, i.e., appear to arise only under ERISA. [See e.g., Ingersoll_Rand v. McClendon, 498 U.S. 133 (1990); Andrews v. Alaska Operating Engineers_Employers Training Fund. 871 P.2d 1142 (Ala.), cert. denied, 513 U.S. 874 (1994) (ERISA preempted state law whistle blower and covenant of good faith and fair dealing claims based upon his alleged termiantion to pervent him from giving information about misuse of trust funds); Anderson v. Electronic Data Systems Corp., 11 F.3d 1311 (5th Cir.), cert. denied, 513 U.S. 808 (1994) (State claim that plaintiff was terminated for his refusal to commit illegal acts violative of ERISA was preempted); Hashimoto v. Bank of Haw., 999 F.2d 408, as amended, 1993 U.S. App. LEXIS 28767 (9th Cir. 1993) (state whistle blower claim preempted because plaintiff alleged she was fired for reporting fiduciary violations involving a pension plan); Rodriquez v. Pacificare of Tex., Inc., 980 F.2d 1014 (5th Cir.), cert. denied, 113 S.Ct. 2456 (1993) (ERISA preempts state law claim against HMO for negligent care); Kuhl v. Lincoln Nat'l Health Plan, Inc., 999 F.2d 298 (8th Cir. 1993), cert. denied, 510 U.S. 1045 (1994) (state law medical malpractice claim involving plan's precertification procedure is preempted); Corcoran v. United Healthcare, Inc., 965 F.2d 1321 (5th Cir.), cert. denied, 113 S.Ct. 812 (1992) (medical negligence claims against a plan are preempted by ERISA); Cromwell v. Equicor_Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991) (claim against insurer for negligent misrepresentation concerning benefit plan coverage properly removed); Nishimoto v. Federman_Bachrach & Assoc., 903 F.2d 709 (9th Cir. 1990) (claim of discriminatory discharge really a §510 claim); Fitzgerald v. Codex Corp., 882 F.2d 586 (7th Cir. 1989) (State complaint alleging discharge from employment to prevent benefit payments removable because the claim really arises under ERISA §510); Greater Lansing Ambulatory Surgery Center Co. v. Blue Cross and Blue Shield of Michigan, 952 F. Supp. 516 (E.D. Mich. 1997); Houston Int'l Hosp. v. Jefferson Pilot Life Ins. Co., 1993 U.S. Dist. LEXIS 19097 (S.D. Tex. 1993) (hospital claim of negligent misrepresentation based upon phone call verification of coverage is removable); Barnes Hospital v. Sanus Passport/Preferred Services, Inc., 809 F. Supp. 725 (E.D. Mo. 1992) (same); Rodriquez v. Texas Health Enterprises, 15 E.B.C. 2819 (E.D. Tex. 1992) (state complaint alleging wrongful discharge for refusing to participate in employer's employee injury plan removable because claims

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related to ERISA plan); Samaroo v. Samaroo, 743 F. Supp. 309 (D.N.J. 1990) (attachment of benefits per QDRO). But see Emard v. Hughes Aircraft Co., et al., 153 F.3d 949 (9th Cir. 1998), cert. denied, 119 S.Ct. 903 (ERISA preemption does not bar application of California community property laws); McClelland v. Gronwaldt, et al, 155 F.3d 507 (5th Cir. 1998) (case remanded to state court because although handling of workers' compensation complaint "relates to" an ERISA plan, it does not assert a claim falling within the scope of §502(a)); Speciale v. Seybold, 147 F.3d 612 (7th Cir.), cert. denied, 119 S.Ct. 542 (1998) (no §502(a) preemption in a state cause of action where there are adversarial claims to a settlement fund between an ERISA plan subrogation claim and other statutory medical liens); Agnifili v. KFC Corp., 924 F. Supp. 78 (W.D. Ky. 1996) (removal ineffective when loss of plan benefits is a consequence of but not the motivating factor behind termination of employment); Warner v. Ford Motor Co., 46 F.3d 531 (6th Cir. 1995) (remand to state court state age discrimination case); Karambelas v. Hughes Aircraft Co., 992 F.2d 971 (9th Cir. 1993) (remand to state court state wrongful discharge claim); PAS v. Travelers Ins. Co., 7 F.3d 349 (3d Cir. 1993) (remand to state court claims that policy violated state statute prohibiting unfair discrimination against handicapped persons in contract terms); Drescher v. Union Underwear Co., 858 F. Supp. 653 (W.D. Ky. 1994) (age discrimination claim referring to lost benefits in prayer for relief is not removable); Ryan v. Puerto Rico Martime Shipping Authority, 848 F. Supp. 33 (D.N.J. 1994) (complaint alleging violation of New Jersey Conscientious Employee Protection Act does not "relate to" ERISA plan); Robco of American v. Insurance Co. of N.Am., 845 F. Supp. 1112 (W.D. Pa. 1994) (claim by employer against its excess loss insurer in state court alleging breach of contract not preempted); Grusznski v. Viking Ins. Co., 854 F. Supp. 586 (E.D. Wisc. 1994) (victim of car accident filed suit against driver's insurer and named her own medical plan to secure a declaration own medical plan to secure a declaration of plan's subrogation rights is not removable); Eugenia Hosp. v. Kim, 844 F. Supp. 1030 (E.D. Pa. 1994) (claim by service provider against plan for negligent misrepresentation of patient's eligibility for benefits may not be removed); Rehabilitation Institute v. Group Administrators, 844 F. Supp. 1275 (N.D. Ill. 1994) (same); Memorial Hosp. for Cancer & Allied Diseases v. Empire Blue Cross & Blue Shield, 18 E.B.C. 1911 (S.D.N.Y. 1994) (same); Metroplex Infusion Care v. Lone Star Container Corp., 855 F. Supp. 897 (N.D. Tex. 1994) (same); Richmond v. American Systems Corp., 792 F. Supp. 449 (E.D. Va. 1992) (remand to state court claims arising out of establishment of ESOP alleging breaches of state common law fiduciary duties to shareholders and corporation); Sperling v. Texas Health Enterprises, Inc., 791 F. Supp. 662 (S.D. Tx. 1992) (remand to state court claims that employees were discharged for refusing to participate in employer's employee injury plan); Kanolas v. Graham, 759 F. Supp. 374 (E.D. Mich.

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1991) (removal denied where loss of pension benefits was a consequence of the termination); National Health Plan Corp. v. Road Carriers Local 707 Welfare Fund, 13 E.B.C. 2157 (S.D.N.Y. 1991) (claim by third party administrator that fund violated dental and hospital plan contracts by termination thereof were not preempted by ERISA and, therefore, not removable); National Experts Care Consultants, Inc. v. United Air Lines, Inc., 13 E.B.C. 1670 (S.D.N.Y. 1991) (medical provider's action against employer for misrepresenting employee insurance coverage is not preempted); Machinists v. General Electric Co., 713 F. Supp. 547 (N.D. N.Y. 1989) (claim not fairly characterized as arising under ERISA §510); Shofer v. Stuart Hack Co., 595 A.2d 1078 (Md. 1991) (state law malpractice claim against consultant is not preempted by ERISA)].

A breach of contract suit by a service provider against a plan was held non_removable in National Health Plan Corp. v. Road Carriers Local 707 Welfare Fund, 13 E.B.C. 2157 (S.D.N.Y. 1991), and National Expert CareConsultants, Inc. v. United Air Lines, Inc., 13 E.B.C. 1670 (S.D.N.Y. 1991) because it did not arise under federal law.[See also Home Health, Inc. v. Prudential Ins. Co. Of America, 101 F.3d 600 (8th Cir. 1996) (state tort claims by third_party provider who sues not as an assignee of a beneficiary but as an independent entity claiming damages not preempted by ERISA); Memorial Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236 (5th Cir. 1990) (hospital's state claims for breach of contract, negligent misrepresentation, equitable estoppel, and deceptive and unfair trade practices survived preemption since they were independent of ERISA plan's obligations); Hospice of Metro Denver, Inc. v. Group Health Ins., Inc., 944 F.2d 752 (10th Cir. 1991); Meadows v. Employers Health Ins., 47 F.3d 1006 (9th Cir. 1995). But see Hermann Hosp. v. M.E.B.A. Medical & Ben. Plan, 959 F.2d 569 (5th Cir. 1992) (ignoring Memorial Hospital) and Cromwell v. Equicor_Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991)].

Courts have reached different conclusions in determining whether state malpractice claims can be removed. [Compare Hoyt v. Edge, 21 EBC 1268 (E.D.Pa. 1997); Lancaster v. Kaiser Foundation Health Plan, 958 F. Supp. 1137 (E.D.Va. 1997); Nealy v. U.S. Health Care HMO, 844 F. Supp. 966 (S.D.N.Y. 1994) with Burke v. Smithkline Bio_Science Laboratories, 858 F. Supp. 1181 (M.D. Fla. 1994)] See also Morrison v. Seafarers International Union of N.A., 954 F. Supp. 55 (E.D.N.Y. 1996);

If any cause of action is found to come within the original jurisdiction of the district court, removal of the entire case is proper, regardless of whether the court would have original jurisdiction over the additional claims. [See Richmond v. American Systems Corp., 792 F. Supp. 449 (E.D. Va. 1992) (removal of entire case proper, but not mandatory; court remanded some counts because state law issues predominated); Samaroo v. Samaroo, 743 F. Supp. 309 (D.N.J. 1990) (same)].

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State court suits that do not involve ERISA_covered plans are not removable. [See Meredith v. Time Insurance Co., 980 F.2d 352 (5th Cir. 1993); Texas v. National Counsel of Allied Employees, 791 F. Supp. 1154 (W.D. Tex. 1992); Crespo v. Cancela Laser Corp., 780 F. Supp. 866 (D. Mass. 1992); Petkus v. Chicago Rawhide Mfg. Co., 763 F. Supp. 357 (N.D. Ill. 1991)]. If it is not apparent from the face of the complaint that an ERISA_covered plan exists, then factual support for that contention must be provided. [See Lupo v. Human Affairs Int'l, 28 F.3d 269 (2d Cir. 1994); Mitchell v. Investors Guaranty Life Ins. Co., 861 F. Supp. 1039 (N.D. Ala. 1994)].

If the plaintiff lacks ERISA standing, some courts have held that the case cannot be removed. [Compare Harris v. Provident Life & Acc. Ins. Co., 26 F.3d 930 (9th Cir. 1994); Galen v. McAllister, 1992 U.S. Dist. LEXIS 14709 (N.D. Ca. 1992); Klank v. Sears, Roebuck & Co., 735 F. Supp. 260 (N.D. Ill. 1990); and Carter v. Amex Coal Corp., 748 F. Supp. 812 (D. Utah 1990), with Cromwell v. Equicor_Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991). See also Hill v. Marston, 13 F.3d 1548 (11th Cir. 1994) (action by several investors against defendant asserting negligence, state security law claims and contract claims involving worthless stock properly remanded even though one plaintiff was an ERISA plan); Albradco, Inc. v. Bevona, 982 F.2d 82 (2d Cir. 1992) (court held that debtor's and its shareholder's declaratory judgment to prevent enforcement of state statute had to be dismissed because plaintiffs had no standing; but removal of action filed by union against them would have been appropriate because union had standing as plan beneficiaries)].

A third party claim is not removable unless it is “separate and independent” of the original state claim. Thus, where a hospital sues a patient for payment and the patient files a third party claim against an ERISA plan, removal may not be available. See, Sunny Acres Skilled Nursing v. Williams, 731 F.Supp. 1323 (N.D. Ohio 1990) (collecting cases).

The existence of concurrent Federal and State court jurisdiction under ERISA §502(e) does not defeat the defendant's right to removal. [See In Re Marsh Estate, 12 E.B.C. 1966 (S.D.N.Y. 1990); Leonardis v. Local 282 Pension Fund, 391 F. Supp. 554, 557 (E.D.N.Y. 1975)].

The general removal principle that all defendants must concur on removal does apply unless a separate and independent cause of action exists against defendants who seek removal. [See Fravel v. Stankus, 936 F. Supp. 474 (N.D. Ill. 1996); Robco of America v. Insurance Co. of N.Am., 845 F. Supp. 1112 (W.D. Pa. 1994); Grusznski v. Viking Ins. Co., 854 F. Supp. 586 (E.D. Wis. 1994)]. But see In Re Marsh Estate, 12 E.B.C. 1966 (S.D.N.Y. 1990) (Court held that all defendants do not

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need to join a notice of removal where, as in ERISA causes of action other than §502(a)(1)(B), federal court jurisdiction is exclusive).

To determine when a remand order is reviewable, see Bogle v. Phillips Petroleum Co., 24 F.3d 758 (5th Cir. 1994) (district court's remand order based on lack of subject matter jurisdiction is not reviewable). See also In Re Excel Corp., et al., 106 F.3d 1197 (5th Cir.), cert. denied, 522 U.S. 859 (1997); Washington Suburban Sanitary Commission v. CRS/Sirrine, Inc., 917 F.2d 834 (4th Cir. 1990); Hansen v. Blue Cross of California, 11 EBC 1864 (9th Cir. 1989); In re Central Steel & Wire Health Plan, 14 EBC 1889 (6th Cir. 1991); Harrell v. Pineland Plantation, 914 F. Supp. 119 (D.S.C. 1996). A court’s decision remanding a removed action to state court due to incomplete preemption is not reviewable on appeal. Lyons v. Alaska Teamsters Employer Service Corp., 188 F.3d 1170 (9th Cir. 1999).

Venue

ERISA §502(e)(2) [29 U.S.C. §1132(e)(2)] determines in which Federal district courts an action under §502(a) can be brought. It is a special, liberal venue provision designed to provide "ready access to the Federal courts." Under this provision, venue lies in any Federal judicial district:

where the plan is administered;

where the breach took place; or

where at least one defendant resides or may be found.

[See generally, Varsic v. U.S. District Court, 607 F.2d 245 (9th Cir. 1979); Gulf Life Ins. Co. v. Arnold, 809 F.2d 1520 (11th Cir. 1987); Dittman v. Dyno Nobel, Inc., 1998 U.S. Dist. LEXIS 19392 (N.D. N.Y. Nov. 24, 1998); Higgins v. Exxon Co., USA, 1998 U.S. Dist. 19798 (D. Conn. July 30, 1998); Seitz v. Board of Trustees of the Pension Plan, 953 F. Supp. 100 (S.D.N.Y. 1997); Keating v. Whitmore Mfg. Co., 981 F. Supp. 890 (E.D.Pa.1997); Central States, Southeast and Southwest Areas Pension Fund v. Salasnek Fisheries, Inc., 977 F. Supp. 888 (N.D. Ill. 1997); IAM National Pension Fund v. Wakefield Ind., 699 F.2d 1254 (D.C. Cir. 1983); McFarland v. Yegen, 699 F. Supp. 10 (D.N.H. 1988) (collecting cases); Ballinger v. Perkins, 515 F. Supp. 673 (W.D. Va. 1981); HEREIU Welfare Fund v. Amivest Corp., 733 F. Supp. 1180 (N.D. Ill. 1990); Foster G. McGee Hospital v. Pension Trust, 1992 U.S. Dist. LEXIS 16194 (N.D. Ill. 1992); NGS American, Inc. v. Barnes, 782 F. Supp. 1198 (E.D. Mich. 1992); Brown Schools, Inc. v. Florida Power Corp., 806 F. Supp. 146 (W.D. Tex. 1992)].

This provision often provides a plaintiff with several available forums, and an opportunity for "forum shopping." For example, a participant may sue

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a plan where it is administered or where he lives (i.e. where the breach occurred). [See Wallace v. American Petrofina, Inc., 659 F. Supp. 829 (E.D. Tex. 1987); Doe v. Connors, 796 F. Supp. 214 (W.D. Va. 1992); Foster v. McGee Hospital, 1992 U.S. Dist. LEXIS 16194 (N.D. Ill. 1992). But see Orgeron v. Moran To Wing Corp., 1994 U.S. Dist. LEXIS 13840 (E.D. La. 1994) (district where plaintiff resided improper since plan not administered in that district and breach occurred where decision to deny benefits was made); McFarland v. Yegen, 699 F. Supp. 10 (D.N.H. 1988).

However, a defendant may seek a transfer of venue under the generally applicable 28 U.S.C. §1404. [See, Cargill Inc. v. Prudential Ins. Co. Of America, 920 F. Supp. 144 (D. Colo. 1996); National Automatic Sprinkler Ind. Fund. v. Delta Automatic Sys., Inc., 15 E.B.C. 2350 (D. Md. 1992) (transfer delinquency collection case to employer's home forum); Doe v. Connors, 769 F. Supp. 214 (W.D. Va. 1992); NGS American, Inc. v. Barnes, 782 F. Supp. 1198 (E.D. Mich. 1992); McFarland v. Yegen, 699 F. Supp. 10 (D.N.H. 1988); Trustees of Chicago Truck Drivers Fund v. American Carriers, 1989 U.S. Dist. Lexis 2337 (N.D. Ill. 1989); Laborers National Pension Fund v. Tudor Const. Co., 1989 U.S. Dist. Lexis 6760 (E.D. La. 1989); U.S. Telecom, Inc. v. Hubert, 678 F. Supp. 1500 (D. Kan. 1988)].

The pro-participant policy of ERISA's liberal venue provisions cannot be defeated by a plan fiduciary suing a participant in the plan's forum for a declaration of the participant's benefit rights. [See Gulf Life Ins. Co. v. Arnold, 809 F.2d 1520 (11th Cir. 1987)].

As to venue when a suit is brought by an assignee, compare Brown Schools, Inc. v. Florida Power Corp., 806 F. Supp. 146 (W.D. Tex. 1992) (venue must be determined as if no assignment took place) with Ingalls Memorial Hospital v. North Eastern Center, Inc., 1991 U.S. Dist. LEXIS 1956 (N.D. Ill. 1991) (breach took place in the location where the hospital is located and denied ERISA payments); and Foster G. McGaw Hospital of Loyala Univ. of Chicago v. Pension Trust District #9 Welfare Trust I.A.l of M.A.W., 1992 U.S. Dist. LEXIS 16194 (N.D. Ill 1992) (same).

As to venue against a benefit fund under 28 U.S.C. §1391, see Hock v. Pacific Mutual Life Ins. Co., 1989 U.S. Dist. Lexis 5800 (D.D.C. 1989).

As to convenience transfers of venue, see, e.g., Brown v. Connecticut General Life Ins. Co., 934 F.2d 1193 (11th Cir. 1991); Brown Schools, Inc. v. Florida Power Corp., 806 F. Supp. 146 (W.D. Tex. 1992); Central States Southeast and Southwest Areas Health and Welfare Fund v. J.C. Penney Co., Inc. VEBA, 1992 U.S. Dist. LEXIS 2223 (N.D. Ill. 1992); Central States, Southeast and Southwest Areas Pension Fund v. Creative Development Co., 1992 U.S. Dist. LEXIS 19390 (N.D. Ill. 1992); Automatic Sprinkler Industry Pension Fund v. Delta Automatic Systems,

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Inc., 15 E.B.C. 2350 (D. Md. 1992); Dugan v. D&M Excavating, Inc., 12 E.B.C. 1748 (N.D. Ill. 1990); Trustees of Hotel Employees v. Amivest Corp., 733 F. Supp. 1180 (N.D. Ill. 1990); Central States Pension Fund v. Don Reed Chevrolet, Inc., 11 E.B.C. 1910 (N.D. Ill. 1989); Board of Trustees, Sheet Metal Workers Nat'l Fund v. Baylor Heating and Air Conditioning, Inc., 702 F. Supp. 1253 (E.D. Va. 1988).

In delinquency collection suits, courts have generally denied motion to transfer, despite substantial arguments of convenience, based on a policy of minimizing collection costs. [See, e.g., UFCW Industry Pension Fund v. Spartan Stores, Inc., 1992 U.S. Dist. LEXIS 16033 (N.D. Ill. 1992); Central States Pension Fund v. Blue Ridge Trucking Co., 1991 U.S. Dist. LEXIS 10161 (N.D. Ill. 1991); Central States Pension Fund v. Mississippi Warehouse Corp., 1991 U.S. Dist. LEXIS 14632 (N.D. Ill. 1991); Dugan v. M&W Dozing & Trucking, Inc., 727 F. Supp. 417 (N.D. Ill. 1989)].

A special venue provision applies to actions under ERISA §502(k) [29 U.S.C. §1132(k)] against the Secretary of Labor. Under that provision, venue is proper in the district where the plan has its principal office or in the District of Columbia.

Personal Jurisdiction and Service of Process

Courts have held that if a Federal district court has subject matter jurisdiction under ERISA and is a proper venue, jurisdiction over the person of a defendant can be exercised by the court once proper service of process is made, even if the person has no contacts with the court's district; minimum contacts with the United States is sufficient. [See, e.g., Cripps v. Life Ins. Co. of North America, 980 F.2d 1261 (9th Cir. 1992); Ingalls Memorial Hospital v. Northeastern Center, Inc. Plan, 1991 U.S. Dist. Lexis 1956 (N.D. Ill. 1991); Hazel v. Curtiss_Wright Corp., 12 E.B.C. 1809 (S.D. Ind. 1990); Combs v. Pelbro Fuel Inc., 4 E.B.C. 2610 (D.D.C. 1983); Robbins v. B.W. Blaushild Motors, Inc., 599 F. Supp. 1. (N.D. Ill. 1981); U.S. Telecom, Inc. v. Hubert, 678 F. Supp. 1500 (D. Kan. 1988). Contra Chemtec Industries v. Goldman Financial Group, 156 F.R.D. 181 (E.D. Mo. 1994); Doe v. Connors, 796 F. Supp. 214 (W.D. Va. 1992); Cannon v. Gardner_Martin Asphalt Co. Trust, 699 F. Supp. 265 (M.D. Fla. 1988)].

ERISA §502(e)(2) authorizes nationwide service of process in effect. It provides that service may be effectively made on a defendant in any Federal judicial district where venue lies or "in any other district where a defendant resides or may be found." [See, Cripps, 980 F.2d 1261 (9th Cir. 1992); Bellaire General Hospital v. Blue Cross Blue Shield of Michigan, 97 F.3d 822 (5th Cir. 1996)]. However, at least one court has held that ERISA's special service provision does not apply to non_party stakeholders in post_judgment collection proceedings. [See Rodd v.

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Region Const. Co., 783 F.2d 89 (7th Cir. 1986)]. And, ERISA does not provide for worldwide service of process. [See United Electrical Workers v. 163 Pleasant Street Corp., 960 F.2d 1080 (1st Cir. 1992) (foreign corporation not subject to personal jurisdiction in federal courts on claim that a U.S. subsidiary violated ERISA)].

ERISA §502(d)(1) provides that service of process can be made on a plan by serving a trustee or plan administrator in such capacities. Labor Department regulations require that a plan's summary plan description identify the plan's agent for service of legal process. [See 29 C.F.R. §2520.102_3(g)]. Where a plan does not designate an agent for service of process in its summary plan description, service upon the plan can be effectuated by serving the Secretary of Labor.

ERISA §502(h) generally requires plaintiffs to serve copies of complaints filed under Title I upon the Secretaries of Labor and the Treasury by certified mail. However, benefit claims cases (i.e. §502(a)(1)(B) suits) are exempted from this requirement.

Exhaustion of Administrative Remedies

Covered under a separate presentation.

Statute of Limitations

ERISA Title I provides an express time limitation only for the filing of suits to enforce the fiduciary standards, prohibited transaction restrictions, and other provisions of Part 4 of Title I (i.e. 29 U.S.C. §§1101_1113). That statute of limitation is set forth in ERISA §413 [29 U.S.C. §1113]. The three_level §413 provides that:

“[n]o action may be commenced under this [ERISA] title [1] with respect to a fiduciary’s breach of any responsibility, duty or obligation under this part [4], or with respect to a violation of this part, after the earlier of:

* 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

* 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.”

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[See generally, Librizzi v. Children’s Memorial Medical Ctr., 134 F.3d 1302 (7th Cir. 1998) (following general principles of employment law, claim arises when adverse decision is made, not when effect of decision is felt); Diduck v. Kaszycki & Sons Contractors, Inc., 974 F.2d 270 (2d Cir. 1992); IUE v. Murata Erie N.A., Inc., 980 F.2d 889 (3d Cir. 1992); Gluck v. Unisys Corp., 960 F.2d 1168 (3d Cir. 1992); Martin v. Consultants & Administrators, Inc., 966 F.2d 1078 (7th Cir. 1992); Shofer v. Stuart Hack Co., 970 F.2d 1316 (4th Cir. 1992); Lumpkin v. Envirodyne Ind., Inc., 933 F.2d 449 (7th Cir.), cert. denied, 502 U.S. 939 (1991); Phillips v. Alaska Hotel and Restaurant Employees Pension Fund, 944 F.2d 509 (9th Cir. 1991); Radiology Center, S.C. v. Stiefel, Nicolaus & Co., 919 F.2d 1216 (7th Cir. 1990); Wright v. Southwestern Bell Telephone Co., 925 F.2d 1288 (10th Cir. 1991); Zeigler v. Connecticut Life Ins. Co., 916 F.2d 548 (9th Cir. 1990); Diduck v. Kaszycki & Sons Contractors, 874 F.2d 912 (2d Cir. 1989); Fink v. National Savings & Trust Co., 772 F.2d 951 (D.C. Cir. 1985); Blanton v. Anzalone, 760 F.2d 989 (9th Cir. 1985); Brock v. Nellis, 809 F.2d 753 (11th Cir. 1987); Schaefer v. Arkansas Medical Society, 853 F.2d 1487 (8th Cir. 1988); Meagher v. IAM Pension Plan, 856 F.2d 1418 (9th Cir. 1988), cert. denied, 490 U.S. 1039 (1989); Carollo v. Cement and Concrete Workers District, 964 F. Supp. 677 (E.D.N.Y. 1997); Petrilli v. Gow, 957 F. Supp. 366 (D.Conn. 1997); Devito v. Pension Fund Plan of Local 819, 975 F. Supp. 258 (S.D.N.Y. 1997)].

As to what constitutes “actual knowledge” for purposes of cutting 413’s general 6-year limitations period to the 3-year period, see, Waller v. Blue Cross, 32 F.3d 1337 (9th Cir. 1994) (knowledge of purchase of annuities not enough; knowledge of breach did not occur until accounts of insurer’s of financial difficulties and ultimate insolvency were publicized); Gluck, 960 F.2d 1168 (6th Cir. 1992) (“requires actual knowledge of all material facts necessary to understand that some claim exists, which facts could include necessary opinions of experts, knowledge of a transaction’s harmful consequences, or even actual harm”; mere knowledge of transaction is not enough); Martin, 966 F.2d 1078 (7th Cir. 1992); IUE v. Murata Erie N.A., Inc., 980 F.2d 889 (3d Cir. 1992); Masengill v. Rye, 1992 U.S. App. LEXIS 5278 (6th Cir. 1992) (plaintiff aware of pledging of CD, but not necessarily of impropriety); Scott v. Evins, 802 F. Supp. 411 (N.D. Ala. 1992), aff’d without op., 998 F.2d 1022 (11th Cir. 1993) (plaintiff must have actual knowledge of facts, not knowledge of violation of law). But see Ziegler v. Connecticut General Life Insurance Co., 916 F.2d 548 (1990) (requires plaintiff to have actual knowledge of the facts giving rise to breach even though plaintiff need not know that facts would cause harm); Calobrace v. American Nat’l Can Co., 1994 U.S. Dist. LEXIS 3721 (N.D. Ill. 1994) (in suit involving purchase of Executive Life annuities, the “last action”

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triggering the running of the statute of limitations was the date the annuity contract was signed by the annuity provider).

Knowledge of fiduciary breaches obtained by DOL employees engaged in a criminal investigation under the auspices of DOJ attorneys and as agents of a grand jury will not be imputed to the DOL for the purpose of determining when the statute of limitations for breach of fiduciary duty begins to run. [See Martin, 966 F.2d 1078 (7th Cir. 1992)].

As for the “fraud and concealment” extension of the §413 period, see Martin, 966 F.2d 1078 (7th Cir. 1992); Radiology Center, S.C., 919 F.2d 1216 (7th Cir. 1990); Schaefer, 853 F.2d 1487 (8th Cir. 1988); Kurz v. Philadelphia Elec. Co., 96 F.3d 1544 (3d Cir. 1996).

ERISA provides no such express statute of limitations for suits on benefit claims or to enforce statutory rights outside of Part 4 of Title 1 (i.e., causes of action other than to enforce fiduciary standards and prohibited transactions provisions). In such suits, the courts generally have incorporated into Federal law and applied the forum State's most analogous statute of limitations which is consistent with ERISA's purposes and policies. It must be noted, however, that the Plan itself may impose more stringent periods of limitation for filing claims. See Doe v. Blue Cross & Blue Shield United of Wisconsin, 112 F.3d 869 (7th Cir. 1997); Boomis v. Metropolitan Life Insurance, 970 F. Supp. 584 (E.D. Mich 1997). Courts will not always enforce plan_imposed limitations, such as plan specification of when the claim accrues. State insurance law may provide that prejudice to the insurer must be shown before the insurer can rely upon a limitation period in the policy. See Unum Life Insur. Co. v. Ward, 526 U.S. 358 (1999) (acknowledging California's "notice_prejudice" rule that insurer must show it has suffered actual prejudice because of the delay in notice); Mitchell v. Shearson Lehman Brothers, Inc., 1997 U.S. Dist. LEXIS 7323 (S.D.N.Y. 1997). For holdings applying specific state limitation periods, see Union Pacific Railroad et al. v. Beckham et al., 138 F.3d 325 (8th Cir.), cert. denied, 525 U.S. 817 (1988); Sandberg v. KPMG Peat Marwick LLP, 111 F.3d 331 (2d Cir. 1997); Williams v. Unum Life Insurance Co., 113 F.3d 1108 (9th Cir. 1997); Connell v. Trustees of Pension Fund, 118 F.3d 154 (3d Cir. 1997); Daill v. Sheet Metal Workers' Local 73 Pension Fund, 100 F.3d 62 (7th Cir. 1996); Taylor v. Goodyear Tire & Rubber Co., 1994 U.S. App. LEXIS 29307 (6th Cir. 1994) (in §510 case, adopted state retaliatory discharge limitations; Teumer v. General Motors Corp., 34 F.3d 542 (7th Cir. 1994) (same); Flanagan v. Inland Empire Elec. Workers Pension Plan & Trust, 3 F.3d 1246 (9th Cir. 1993) (applying Washington 6 year contract limitation period); Gluck v. Unisys, 960 F.2d 1168 (6th Cir. 1992) (borrowing Pa. 6 year "catch_all"

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limitations for violations of forfeiture and accrual rules); Byrd v. MacPapers, Inc., 961 F.2d 157 (11th Cir. 1992) (use Florida retaliation law limitations for ERISA §510 claim); Meade v. Pension Appeals & Review Cmte., 966 F.2d 190 (6th Cir. 1992); Kennedy v. Electricians Pension Plan, 954 F.2d 1116 (5th Cir. 1992); Hogan v. Kraft Foods, 969 F.2d 142 (5th Cir. 1992); Schroeder v. Phillips Petroleum, 970 F.2d 419 (8th Cir. 1992); Gluck, 960 F.2d 1168 (6th Cir. 1992); Sheet Metal Workers Local 19 v. 2300 Group, Inc., 949 F.2d 1274 (3d Cir. 1991); Shofer, 15 E.B.C. 1988 (4th Cir. 1992); Johnson v. State Mutual Life Assurance Co., 942 F.2d 1260 (8th Cir. 1991); Lumpkin v. Envirodyne Indus., Inc., 933 F.2d 449 (7th Cir.), cert. denied, 502 U.S. 939 (1991); Wright v. Southwestern Bell Tel. Co., 925 F.2d 1288 (10th Cir. 1991); Connors v. Hallmark & Son Coal Co., 935 F.2d 336 (D.C. Cir. 1991); Held v. Manufactures Hanover Leasong Corp., 912 F.2d 1197 (10th Cir. 1990); No. Calif. Retail Clerks Pension Fund v. Jumbo Markets, Inc., 906 F.2d 1371 (9th Cir. 1990); Heideman v. PFL, Inc., 904 F.2d 1262 (8th Cir. 1990), cert. denied, 498 U.S. 1026 (1991) (using Tennessee 6 year statute of limitations applicable to contracts); Blue Cross & Blue Shield of Ala. v. Weitz, 913 F.2d 1544 (11th Cir. 1990); Dameron v. Sinai Hospital, 815 F.2d 975 (4th Cir. 1987); Gavalik v. Continental Can Co., 812 F.2d 834 (3d Cir.) 484 U.S. 979 (1987); Clark v. Coats & Clark, Inc., 865 F.2d 1237 (11th Cir. 1989); Central States Pension Fund v. Jordan, 873 F.2d 149 (7th Cir. 1989); Pierce County Hotel Employees Trust v. Elks Lodge, 827 F.2d 1324 (9th Cir. 1987); Williams v. Chrysler Corp., 991 F. Supp. 383 (D. Del.), aff’d, 163 F.3d 183 (3d Cir. 1998); Baradell v. Board of Social Services, 970 F. Supp. 489 (W.D. Va. 1997); Carter v. Times_World Corp., 1997 U.S. Dist. LEXIS 10743 (W.D. Va. 5/23/97); Burditt v. Kerr_McGee Chemical Corp., 982 F. Supp. 404 (N.D. Miss. 1997); Larson v. University Women's Health Pension Plan, 971 F. Supp. 398 (D. Minn. 1997); Kiefer v. Ceridian Corp., 976 F. Supp. 829 (D.Minn. 1997); Walker v. Smithkline Beacham & Chemco, 1997 U.S. Dist. LEXIS 3507 (E.D.Pa. 1997); Ladzinski v. MEBA Pension Trust, 951 F. Supp. 570 (D.Md. 1997); Ahnert v. Delco Electronics Corp., 982 F. Supp. 1320 (S.D. Ind. 1997); Damon v. Unisys Corp., 841 F. Supp. 1094 (D. Colo. 1994) (§502(a)(1)(A) claim, applied Colorado's one_year statute of limitations for actions for a penalty or forfeiture; Rich v. Zeneca, Inc., 845 F. Supp. 162 (D. Del. 1994) (using 3 year Delaware limitations for actions arising out of contractual relations and for breach of a promise in §510 claim); Jenkins v. Local 705 Teamsters Pension Fund, 713 F.2d 247 (7th Cir. 1983); Ladzinski v. MEBA Pension Trust, 951 F. Supp. 570 (D.Md. 1997); Trustees of Local Union No. 17 v. May Engineering Co., 951 F. Supp. 346 (D.R.I. 1997); Hamilton v. Connecticut General Life Insur. Co., 799 F. Supp. 828 (S.D. Ohio 1992); Hollingshead v. Burford Equip. Co., 747 F. Supp. 1421 (M.D. Ala. 1990); Gray v. Greyhound Retirement & Disability Trust, 730 F. Supp. 415 (M.D. Fla. 1990); UFCW

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Local 204 v. Harris_Teeter Super Markets, 1989 U.S. Dist. Lexis 8226 (W.D.N.C. 1989); Goggans v. Container Corp. of America, 1989 U.S. Dist. Lexis 6548 (S.D. Ohio 1989); Estate of Grant v. U.S. News & World Report, 639 F. Supp. 342 (D.D.C. 1986); Salyers v. Allied Corp., 642 F. Supp. 442 (E.D. Ky. 1986); McClendon v. Continental Group, Inc., 9 E.B.C. 1174 (D.N.J. 1987); Corkery v. Super_X Drug Corp., 602 F. Supp. 42 (M.D. Fla. 1985); Cowden v. Montgomery County Society, 591 F. Supp. 740 (S.D. Ohio 1984), later op., 653 F. Supp. 1072 (1986). But see Edwards v. Wilkes_Barre Pub. Co., 757 F.2d 52 (3d Cir. 1985) (applying §413 by analogy); Meagher v. IAM Pension Plan, 856 F.2d 1418 (9th Cir. 1988) (applying §413 without discussion, even while recognizing that this was a §502(a)(1)(B) suit); Cf. Lampf, Pleva, etc., v. Gilbertson, 501 U.S. 350 (1991) (discussing issue of "borrowing" state limitations periods) (superseded by statute)]. Perhaps the Supreme Court will exercise its common law_making authority to set a uniform statute of limitations as it has done in labor law and other contexts. [See Del Costello v. Teamsters, 462 U.S. 151 (1983); Connors, 935 F.2d 336]. Proposals have been made to amend ERISA to set a uniform limitations period. Until the Supreme Court or Congress acts, the statute of limitations will be a consideration in plaintiffs' forum shopping.

As to how to determine which State statute of limitations is the most analogous, see Gluck, 960 F.2d 1168 (6th Cir. 1992); Meade, 966 F.2d 190 (6th Cir. 1992).

As to the effect of a plan’s choice of laws provision, see, Gluck, 960 F.2d 1168 (6th Cir. 1992).

As to the effect of limitations contained in insurance policy, see Payne v. Blue Cross & Blue Shield of Va., 976 F.2d 727 (4th Cir. 1992); Patterson-Priori v. Unum Life Insur. Co., 846 F. Supp. 1102 (E.D.N.Y. 1994); Lugo v. AIG Life Insur. Co., 852 F. Supp. 187 (S.D.N.Y. 1994); Koonan & Blue Cross, 802 F. Supp. 1424 (E.D. Va. 1992).

As to the effect of limitations contained in Plan’s summary plan description, see Di Marco Michigan v. Conference of Teamsters Welfare Plan, 861 F. Supp. 599 (E.D. Mich. 1994).

As important as the length of a statute of limitations is when it starts to run. When a cause of action accrues is a question of federal law, and generally this is when the plaintiff discovers, or with due diligence should have discovered, the injury that is the basis of the action. See, Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Program, 189 F.3d 1160 (9th Cir. 1999), rehearing en banc granted and panel opinion withdrawn (and cases cited therein). Where the discovery is delayed due to concealment, the claim accrues upon discovery. See Unisys Corp. Retiree

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Medical Benefits ERISA Litigation, 957 F. Supp. 628, 634 (E.D.Pa. 1997). Where an insured is required to submit a proof of claim form within a set period to receive benefits, the cause of action has been held to accrue at the time the form is due. [See Union Pacific Railroad et al. v. Beckham et al. 138 F.3d 325 (8th Cir. 1998); Hall v. National Gypsum co., 105 F.3d 225 (5th Cir. 1997); Kurz v. Philadelphia Elec. Co., 96 F.3d 1544 (3d Cir. 1996); Payne v. Blue Cross & Blue Shield, 1992 U.S. App. LEXIS 24357 (4th Cir. 1992); 976 F.2d 727; IUE, 980 F.2d 889 (3d Cir. 1992); Gluck, 960 F.2d 1168 (6th Cir. 1992); Connors, 935 F.2d 336 (D.C. Cir. 1991) (and cases collected therein); Jumbo Markets, 906 F.2d 1371 (9th Cir. 1990); Cottrill v. Sparrow, Johnson & Ursillo, 100 F.3d 220 (1st Cir. 1996); Carollo v. Cement and Concrete Workers District, 964 F. Supp. 677 (E.D.N.Y. 1997); Korchek Nichols_Homeshield, 1997 WL 619869 (N.D. Ill. 9/30/97); Lawrence v. Jackson Mack Sales, Inc., 837 F. Supp. 771 (S.D. Miss. 1992) (general rule is that a claim accrued when the plaintiff knows or has reason to know of the facts which give rise to her claim); Aull v. Cavalcade Pension Plan, 988 F. Supp. 1360 (D. Colo.1997) (claims involving fiduciary breach upon change in plan management); Wexler v. Wex_Tex Mfg. Corp. Pension Plan, 992 F. Supp. 1313 (M.D. Ala. 1997); Kiefer v. Ceridian, 976 F. Supp. 829 (D.Minn. 1997)]. When a claim against trustees involves their failure to bring suit against fiduciaries to recover monies owed to plan, the statute of limitations period begins when the trustees' claims have lapsed. [See, e.g., System 99 Minority Shareholders v. Robison, 953 F.2d 1388 (9th Cir. 1992)]. Usually, in benefit claim cases, the limitations period starts to run when benefits are due, but formally denied. [See, e.g., Hall v. National Gypsum Co., 105 F.3d 225 (5th Cir. 1997); Simmons v. Willcox, 911 F.2d 1077 (5th Cir. 1990); Dameron v. Sinai Hospital, 815 F.2d 975 (4th Cir. 1987); Fogerty v. Metropolitan Life Ins. Co., 850 F.2d 430 (8th Cir. 1988); Rodriquez v. MEBA Pension Trust, 872 F.2d 69 (4th Cir.), cert. denied, 493 U.S. 872 (1989); Gavalik v. Continental Can Co., 812 F.2d 834 (3d Cir. 1987); Miles v. N.Y.S. Teamsters, 698 F.2d 593 (2d Cir.), cert. denied, 464 U.S. 829 (1983); Conner v. Mid South Insurance Agency, 943 F. Supp. 647 (W.D.La. 1995); Lawrence v. Jackson Mack Sales Inc., 837 F. Supp. 771 (S.D. Miss. 1992); Davis v. NMU Pension & Welfare Fund, 810 F. Supp. 532 (S.D.N.Y. 1992); Nolan v. Aetna, 588 F. Supp. 1375 (E.D. Mi. 1984). But see, Wise v. Dallas & Mavis Forwarding Co., 753 F. Supp. 601 (W.D.N.C. 1991) (claim for benefit denial runs from date when claimant learned that his claim would be denied, even though he had not yet filed a formal claim)]. Recently, several courts have held that a cause of action does not accrue until there is a final denial of benefits as contemplated in the plan's claim procedure. [See Rice v. Asbestors Workers Pension & Annuity Fund Local 53, 1994 U.S. Dist. LEXIS 11915 (E.D. La. 1994), aff'd, 66 F.3d 321 (5th Cir. 1995); Hemphill v. Unisys Corp., 855 F. Supp. 1225 (D. Utah 1994). But see Patterson Prior v. Unum Life Ins. Co., 846 F. Supp. 1102 (E.D.N.Y.

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1994) (plaintiff's benefit claim cannot be renewed by requesting reconsideration of "final" decisions). It has been held (under particular circumstances) that each improperly reduced benefit check issued by a plan started a new limitations period running, at least where ERISA §413 was applied. [See Meagher v. IAM Pension Plan, 856 F.2d 1418 (9th Cir. 1988). See also Haberern v. Kaupp Vascular Surgeons Pension Plan, 1989 U.S. Dist. Lexis 7203 (E.D. Pa. 1989) (applying State statute, but suggesting Meagher rule might apply)]. As for the distinction between when the cause of action accrues and when the limitations period begins, see Phillips, 944 F.2d 509 (9th Cir. 1991) (rejecting a "continuing violation" theory, under §413, but holding that a series of separate causes of action may arise and have separate limitations periods); but see Dole v. Formica, 14 E.B.C. 1397 (N.D. Ohio 1991). In §510 cases a cause of action usually accrues when a decision to terminate allegedly in violation of the statute is made and communicated to an employee. [See Tolle v. Touch, 977 F.2d 1129 (7th Cir. 1992)]. As for ERISA §515 suits to collect contributions, see Connors, 935 F.2d 336 (D.C. Cir. 1991); Dixon v. Anderson, 928 F.2d 212 (6th Cir. 1991); Sheet Metal Workers Local 19 v. 2300 Group, Inc., 949 F.2d 1274 (3d Cir. 1991); Laborers Pension Fund v. Sidney Weinberger Homes, Inc., 872 F.2d 702 (6th Cir. 1988); Wyoming Laborers Health & Welfare Plan v. Morgen & Oswood Constr. Co., 850 F.2d 613 (10th Cir. 1988); UFCW Pension Fund v. The Muir Co., 1992 U.S. Dist. LEXIS 8681 (E.D. Mich. 1992), aff'd, 992 F.2d 594 (6th Cir. 1993); NYSA Medical and Clinical Services Fund v. Salco Trucking Corp., 1992 U.S. Dist. LEXIS 3863 (S.D.N.Y. 1992).

The particular statute of limitations and when the limitations period begins to run may vary according to the ERISA §502(a) cause of action involved. [See Martin, 966 F.2d 1078 (7th Cir. 1992); Shofer, 970 F.2d 1316 (4th Cir. 1992); Ziegler, 916 F.2d 548 (9th Cir. 1990); Lumpkin, 933 F.2d 449 (7th Cir. 1991); Wright, 925 F.2d 1288 (10th Cir. 1991)].

As to the tolling of the ERISA statute of limitations by the filing of a State court action, see Farrell v. Automobile Club of Michigan, 870 F.2d 1129 (6th Cir. 1989) (key was that State court had concurrent jurisdiction over what could be characterized as a §502(a)(1)(B) cause of action); but see Shofer, 970 F.2d 1316 (4th Cir. 1992) (commencement of action in a clearly inappropriate State forum will not toll the statute of limitations for commencing a federal action)]. As to tolling generally, see Sheet Metal Workers Ass'n, Local 19 v. 2300 Group, Inc., 949 F.2d 1274 (3d Cir. 1991) (fraudulent concealment); Central States Pension Fund v. Premarc Corp., 1994 U.S. Dist. LEXIS 11726 (N.D. Ill. 1994) (concealment); Glaziers & Glass Workers Union Local No. 252 Annuity Fund v. Janney Montgomery Scott Inc., 155 F.R.D. 97 (E.D. Pa. 1994) (must be affirmative and independent act of concealment that would direct or mislead plantiff from discovering injury); UFCW Pension Fund v. The

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Muir Co., 1992 U.S. Dist. LEXIS 8681 (E.D. Mich. 1992), aff'd, 992 F.2d 594 (6th Cir. 1993) (misrepresentations). As for the effect of tolling in a class action, see Hoffman v. Central States Pension Fund, 1992 U.S. Dist. LEXIS 6649 (N.D. Ill. 1992). It is plaintiff's burden to establish tolling and avoid a limitations defense. [See Weitz, 913 F.2d 1544 (11th Cir. 1990); Shoefer, 970 F.2d 1316 (4th Cir. 1990)].

The equitable doctrine of estoppel has been applied in a case where plaintiff was able to demonstrate that he was unable to obtain the information needed to perfect his claim in time. [See Tolle v. Carroll Touch, Inc., 977 F.2d 1129 (7th Cir. 1992)].

The equitable doctrine of laches may be applied in ERISA cases [see, e.g., Meade, 966 F.2d (5th Cir. 1992); Kennedy v. Electricians Pension Plan, 954 F.2d 1116 (5th Cir. 1992); Winchester v. Michael Reese Health Plan Cmte., 942 F.2d 1190 (7th Cir. 1991); Dennis v. Sawbrook Steel Castings, 792 F. Supp. 552 (S.D. Ohio 1991)], although it is not favored by the courts generally [see, e.g., Teetern v. Suppl. Pension Plan of Consol. Rail Corp., 705 F. Supp. 1089 (E.D. Pa. 1989)]. But laches generally do not lie against the Secretary of Labor [see Martin, 966 F.2d 1078 (7th Cir. 1992); Dole v. Guido, 13 E.B.C. 2148 (S.D.N.Y. 1991); First Bank Systems v. Martin, 782 F. Supp. 425 (D. Minn. 1991)].

As to the statute of limitations for suits brought by the PBGC as statutory trustee of a plan, see PBGC v. Scherling, 905 F.2d 173 (8th Cir. 1990).

Jury Versus Bench Trial

ERISA does not expressly provide for trial by jury for any causes of action it creates. The vast majority of courts have held that benefit claims as well as claims for breaches of fiduciary duty and other statutory violations are equitable in nature and that there is no right to a jury trial for such claims. [See Adams v. Cyprus Amax Minerals Co., 149 F.3d 1156 (10th Cir. 1998) (no right to jury trial in §502(a)(1)(B) claims); Tischmann v. ITT/Sheraton Corp., 145 F.3d 561 (2nd Cir.), cert. denied, 119 S.Ct. 406 (1998); DeFelice v. American Intl. Life Assurance, 112 F.3d 61 (2d Cir. 1997); Bittinger v. Tecumseh Products Co., 123 F.3d 877 (6th Cir. 1997); Sofo v. Pan-American Life Ins. Co., 13 F.3d 239 (7th Cir. 1994); Kirk v. Provident Life & Accident Ins. Co., 942 F.2d 504 (8th Cir. 1991); Sheet Metal Workers v. Keystone Heating & Air Conditioning, 934 F.2d 35 (3d Cir. 1991); Cox v. Keystone Carbon Co., 894 F.2d 647 (3d Cir.), cert. denied, 498 U.S. 811 (1990); Pane v. RCA Corp., 868 F.2d 631 (3d Cir. 1989) (collecting cases); Connors v. Ryan’s Coal Co., 923 F.2d 1461 (D.C. Cir. 1991) (MPPAA); Blake v. Union-Mutual Stock Life Ins. Co. of America, 906 F.2d 1525 (11th Cir. 1990); Farlow v. Union Central Life Ins. Co., 874 F.2d 791 (11th Cir. 1989), overruled on other grounds by Morstein v. National Insur. Services, Inc., 93 F.3d 715 (11th Cir. 1996);

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Daniel v. Eaton Corp., 839 F.2d 263 (6th Cir. 1988); Crews v. Central States, Southeast & Southwest Areas Pension Fund, 788 F.2d 332 (6th Cir. 1986); Nevill v. Shell Oil Co., 835 F.2d 209 (9th Cir. 1987); Wardle v. Central States Pension Fund, 627 F.2d 820 (7th Cir. 1980), cert. denied, 449 U.S. 1112 (1981); Turner v. CF&I Steel Co., 770 F.2d 43 (3d Cir. 1985); Blau v. Del Monte, 748 F.2d 1348 (9th Cir. 1984), cert. denied, 474 U.S. 865 (1985); Van Keppel v. Fly Ash Mgmt., et al., 1998 U.S. Dist. LEXIS 13809 (D. Kan. 8/3/98); Rufo v. Metropolitan Life Ins. Co., 1997 U.S. Dist. LEXIS 18011 (E.D.Pa. 11/4/97); Carugati v. INA LIfe Insurance Co., 1997 U.S. Dist. LEXIS 17669 (N.D. Ill. 1997); Blanc v. Aetna Life Ins. Co., 1997 U.S. Dist. LEXIS 17457 (N.D. Ohio 1997); Clevinger v. Trans World Airlines, 1997 U.S. Dist. LEXIS 13428 (D.Kan. 1997); Brown v. National City Corp., 974 F. Supp. 1037 (W.D. Ky. 1997); Growney v. J.J. Heintz Co., 1997 U.S. Dist. LEXIS 11797 (D. Kan. 1997); Slapkus v. QVC, Inc., 1997 U.S. Dist. LEXIS 5734 (E.D.Pa. 1997); Kuestner v. Health & Welfare Fund & Pension Fund of the Philadelphia Bekery Employers, 972 F. Supp. 905 (E.D. Pa. 1997); Owen v. Soundview Financial Group, Inc., 1997 U.S. Dist. LEXIS 6395 (S.D.N.Y. 1997); Rowell v. CIGNA, 962 F. Supp. 1093 (N.D. Ill. 1997); Lamonica v. Guardian Life Ins., 1997 U.S. Dist. LEXIS 1988 (D.N.J. 1997); Gentile v. John Hancock Mut. Life Ins. Co., 951 F. Supp. 284 (D. Mass. 1997); Camp v. Pacific Financial Group, 956 F. Supp. 1541 (C.D. Cal. 1997); Brown v. Washington National Ins. Co., 942 F. Supp. 1078 (E.D. La. 1996); Richards v. General Motors Corp., 850 F. Supp. 1325 (E.D. Mich. 1994); Jorstad v. Connecticut General Life Ins. Co., 844 F. Supp. 46 (D. Mass. 1994); Sprague v. General Motors Corp., 804 F. Supp. 931 (E.D. Mi. 1992); Pegg v. General Motors Corp., 793 F. Supp. 284 (D. Kan. 1992); Abels v. Kaiser Aluminum & Chemical Corp., 803 F. Supp. 1151 (S.D.W.Va. 1992); Garred v. Gen. American Life Ins. Co., 774 F. Supp. 1190 (W.D. Ark. 1991); Weinfurther v. Source Servs. Corp. Employees Profit Sharing Plan & Trust, 759 F. Supp. 599 (N.D. Cal. 1991); Devine v. Combustion Engineering, Inc., 760 F. Supp. 989 (D. Conn. 1991); Bass v. Prudential Ins. Co. of America, 751 F. Supp. 192 (D. Kan. 1990); Miner v. Community Mut. Ins. Co., 778 F. Supp. 402 (S.D. Ohio 1991); Quesinberry v. Individual Banking Group Accident Ins. Plan, 737 F. Supp. 38 (W.D. Va. 1990), aff’d, 987 F.2d 1017 (4th Cir. 1993); Dennis v. Sawbrook Steel Casting Corp., 792 F. Supp. 552 (S.D. Ohio 1991); Haeffle v. Hercules, Inc., 703 F. Supp. 326 (D. Del. 1989) (collecting cases); Diduck, 737 F. Supp. 808 (S.D.N.Y. 1990); Young v. AT&T Transition Plan, 10 E.B.C. 1920 (D.N.J. 1989); Pardini v. So. Nev. Culinary, etc. Plan, 733 F. Supp. 1402 (D. Nev. 1990); Williams v. UNUM Life Ins. Co. of America, 940 F. Supp. 136 (E.D.Va. 1996); Turner v. Fallon Community Health Plan Inc., 953 F. Supp. 419 (D.Mass. 1997), aff’d, 127 F.3d 196 (1st Cir. 1997). See also Note, “Right to Jury Trial in Enforcement Actions under §502(a)(1)(B) of ERISA,” 96 Harv. L. Rev. 737 (1983)].

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However, some courts have maintained that there is a constitutional, if not statutory, right to a jury trial in ERISA benefit claims and ERISA §510 cases. [Ex Parte Metropolitan Life Insurance Company 679 So.2d 686 (Ala 1996); Weems v. Jefferson-Pilot Life Insurance Co., 663 So. 2d 905 (Ala. 1995), cert. denied, 116 S.Ct. 434 (1995); Dawes v. First Unum Life Ins. Co., 851 F. Supp. 118 (S.D.N.Y. 1994); McDonald v. Artcraft Electric Supply Co., 774 F. Supp. 29 (D.D.C. 1991) (right to jury trial in §510 case, citing Supreme Court’s 1990 Ingersoll-Rand decision dicta); UAW v. Midland Steel Prods Co., 771 F. Supp. 860 (N.D. Ohio 1991); Weber v. Jacobs Mfg. Co., 751 F. Supp. 21 (D. Conn. 1990) (ERISA §510 suit is a legal, not equitable, claim); Reeves v. Continental Equities Corp. of America, 767 F. Supp. 469 (S.D.N.Y. 1990); Vicianzo v. Brunschwig & Fils, Inc., 739 F. Supp. 882 (S.D. N.Y. 1990); Brasher v. Prudential Ins. Co., 771 F. Supp. 280 (W.D. Ark. 1991); Int’l Union UAW v. Midland Steel Prods. Co., 771 F. Supp. 860 (N.D. Ohio 1991); Resnick v. Resnick, 763 F. Supp. 760 (S.D.N.Y. 1991); Rhodes v. Piggly-Wiggly Dist. Co., 741 F. Supp. 1542 (N.D. Ala. 1990). See also Cox v. Keystone Carbon Co.,, 861 F.2d 390, 394 (3d Cir. 1988) (subsequently rebuked in Pane, supra); Springer v. Wal-Mart Assoc. Plan, 714 F. Supp. 1168 (N.D. Ala. 1989) (predicting that Supreme Court will uphold right to jury eventually), rev’d, 908 F.2d 897 (11th Cir. 1990); Ovitz v. Jefferies & Co., 553 F. Supp. 300 (N.D. Ill. 1982) (right to jury where benefit is immediately and unconditionally owed); Diduck, 737 F. Supp. 808, citing Jefferson National Bank v. Central National Bank, 700 F.2d 1143 (7th Cir. 1983) (same); Sider v. Gulf Western Mfg. Co., 7 E.B.C. 1224 (N.D. Ill. 1986); Abbarno v. Carborundum Co., 682 F. Supp. 179 (W.D.N.Y. 1988); Fuller v. INA Life Ins. Co., 533 N.Y.S. 2d 215 (1988)].

Recent Supreme Court decisions on the scope of the Seventh Amendment right to a jury trial have identified the primary inquiry as whether the remedy sought is legal or equitable in nature. [See Wooddell v. International Union of Electrical Workers, 502 U.S. 93 (1991); Teamsters v. Terry, 494 U.S. 558 (1990)]. In its Bruch decision, 489 U.S. 101, the Supreme Court ruled that benefit claims under §502(a)(1)(B) sound in trust law and are equitable in nature. This would appear to confirm the majority view that there is not a right to jury trial in ERISA benefit claims cases. Also, in its Mertens decision, 113 S.Ct. 2063, the Supreme Court ruled that relief under §502(a)(3) was limited to traditional equitable remedies. This case too confirms the majority view that there is not a right to a jury trial in ERISA §510 cases (since these cases are brought under §502(a)(3)). [See Spinelli v. Gaughan, 12 F.3d 853 (9th Cir. 1993)]. But see Ex parte Metropolitan Life Insurance Co., 679 So.2d 686 (Ala. 1996) (state and federal courts are authorized to award extracontractual and punitive damages, even though not specifically provided for in ERISA. Right to jury trial exists because right to recover those damages

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‘leads inexorably to the right of a trial by jury’, as guaranteed by the 7th Amendment of the U.S. Constitution.).

In the case of multiemployer plan suits under ERISA §502(g)(2) to collect employer contributions, a jury trial has been found to be available in at least the Third Circuit. [See Sheet Metal Workers, 934 F.2d 35 (3d Cir. 1991) (holding that there is a statutory right to a jury in “claims implicating §502(g)(2)”, even while affirming that there is no right to a jury in §502(a)(3) causes of action). Other courts have held that employers are entitled to a jury trial in contribution collection cases brought under §301 of the Labor Management Relations (“Taft-Hartley”) Act [29 U.S.C. §185], even if an ERISA claim is joined in the complaint. [See, e.g., Bugher v. Feightner, 722 F.2d 1356 (7th Cir. 1983), cert. denied, 469 U.S. 822 (1984)].

Where a benefit claim arises under the Taft-Hartley Act as well as under ERISA, courts have found a right to a jury trial. [See, e.g., Stewart v. KHD Deutz of America Corp., 75 F.3d 1522 (11th Cir.), cert. denied, 519 U.S. 930 (1996) (jury trial available to plaintiffs when hybrid ERISA and Labor Management Relations Act suit brought); Senn v. United Dominion Ind., Inc., 951 F.2d 806 (7th Cir. 1992), cert. denied, 509 U.S. 903 (1993); Dennis, 792 F. Supp. 552 (S.D. Ohio 1991); Bower v. Bunker Hill Co., 114 F.R.D. 587 (E.D. Wash. 1986), on remand from, 725 F.2d 1221 (9th Cir. 1984); Haytcher v. ABS Ind., Inc., 7 E.B.C. 2158 (N.D. Ohio 1986); Smith v. ABS Ind., Inc., 653 F. Supp. 94 (N.D. Ohio 1986); UAW v. Park-Ohio Ind., 661 F. Supp. 1281, 1310 (N.D. Ohio 1987), aff’d in part, rev’d in part, 876 F.2d 894 (6th Cir. 1989)].

When claims arise under the Securities Exchange Act of 1934, as well as under ERISA, courts have found a right to a jury trial. [See e.g., Dasler v. E.F. Hutton & Co., Inc., 694 F. Supp. 624 (D. Minn. 1988)].

Remedies

Statutory Remedies

As discussed above, the §502(a) causes of action set forth the types of remedies available under each. To review these remedies with respect to private litigation:

ERISA §502(a)(1)(B) provides for recovery of benefits due, enforcement of other rights under the terms of the plan, or clarification of rights to future benefits (i.e., in the nature of a declaratory judgment).

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The benefits to which a participant or beneficiary may be entitled under and from his employee benefit plan are often referred to in case law as “contractual damages.”

[See, Russell, 473 U.S. 134].

ERISA §502(a)(3) provides injunctive and “other appropriate equitable relief” to redress violations of the plan or the statute, or to enforce the terms of the plan or statute. The precise relief depends on the nature of the violation. The relief available is limited to traditional equitable remedies. See Weir v. Federal Asset Disposition Association, 123 F.3d 281 (5th Cir. 1997);

The “plain language of the statute” authorizes appropriate equitable relief directly to a participant or beneficiary for a fiduciary’s breach of duty. [Compare Williams v. Jackson Stone Co., 867 F. Supp. 454 (S.D. Miss. 1994); and Carter v. AT&T, 870 F. Supp. 1438 (S.D. Ohio 1994) with Kaiser Permanente Employees Pension Plan v. Bertozzi, 849 F. Supp. 692 (N.D. Cal. 1994); Ansari-Springs v. Caterpillar, Inc., 1995 U.S. Dist. LEXIS 698 (N.D. Cal. 1995)]. [See, Mertens, 113 S.Ct. 2063; Garner v. Capital Blue Cross, 859 F. Supp. 145 (M.D. Pa. 1994), aff’d without op., 52 F.3d 314 (3d Cir. 1995) (under Mertens, ERISA’s equitable provisions do not contemplate “awards of money damages”); Iwans v. Aetna Life Ins. Corp., 855 F. Supp. 579 (D. Conn. 1994) (same); Washington Nat’l Ins. Co. v. Hendricks, 855 F. Supp. 1542 (W.D. Wis. 1994) (same)].

ERISA §502(a)(1)(A) provides for recovery of the discretionary civil penalties of up to $100 per day against the plan administrator as set forth in ERISA 502(c)(1) and (3).

ERISA §502(a)(2) provides for “appropriate relief under section 409.” ERISA §409 [29 U.S.C. §1109] generally provides for restitution to the plan, disgorgement of profits to the plan, removal of plan fiduciaries, and “such other equitable or remedial relief as the court may deem appropriate.”

Extracontractual Remedies: Compensatory Damages, Punitive or Exemplary Damages

In addition to benefits due under the terms of the plan (“contractual damages,” so to speak), can a participant or beneficiary recover damages not provided by the plan (i.e., “extracontractual damages”)? Can he also recover compensatory damages for injuries suffered as a result of the wrongful denial of benefits (e.g., loss of home, pain and suffering)? Could a participant or beneficiary recover, in addition to benefits due him under

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the plan, punitive or exemplary damages to deter future wrongful denials of benefits?

In Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134 (1985), the Supreme Court ruled that in a §502(a)(2) cause of action, the plaintiff-participant could not recover compensatory or punitive damages against the plan fiduciary who improperly and tardily processed his benefit claim. The Court’s theory was that the §502(a)(2) cause of action seeks relief only under §409 and §409 relief is necessarily plan-wide, not individual, relief. The Court further opined that the ERISA enforcement scheme was deliberately designed by Congress to balance various policies, and that Congress did not intend the courts to create remedies not expressly provided for in the statute. [See also Dedeaux, 481 U.S. 41, concerning this restrictive view of the courts’ power to tinker with ERISA’s enforcement scheme].

Justice Brennan, in a Russell concurring opinion (473 U.S. at 148-158), attempted to make clear that the Court’s ruling was limited to §502(a)(2) causes of action, and did not reflect on the availability of compensatory or punitive damages in other §502(a) causes of action [e.g., §502(a)(3)].

Despite the Brennan concurrence, the heavy weight of authority is that extra-contractual damages are not available under any §502(a) cause of action. [See, e.g., Rogers v. Hartford Life & Acc. Insur. Co., 167 F.3d 933 (5th Cir. 1999); Novak v. Anderson, 962 F.2d 757 (8th Cir. 1992), cert. denied, 113 S.Ct. 2928 (1993); Harsch v. Eisenberg, 956 F.2d 651 (7th Cir. 1992), cert. denied, 113 S.Ct. 61 (1992) (and cases collected therein); Corcoran v. United Health Care, 965 F.2d 1321 (5th Cir. 1992), cert. denied, 113 S.Ct. 812 (1992); First Nat’l Life Insurance v. Sunshine Sr. Food Stores, 960 F.2d 1546 (11th Cir. 1992), cert. denied, 113 S.Ct. 1045 (1993); Turner v. Fallon Community Health Plan (1st Cir. 1997); Diduck v. Kaszycki & Sons Contractors, Inc., 974 F.2d 270 (2d Cir. 1992); Board of Directors of Motion Picture Indus. Pension Plan v. Sound Department, Inc., 940 F.2d 1533 (9th Cir. 1991); McRae v. Seafarers’ Welfare Plan, 920 F.2d 819 (11th Cir. 1991); Reinking v. Philadelphia Am. Life Ins. Co., 910 F.2d 1210 (4th Cir. 1990); Davis v. Kentucky Finance Co. Retirement Plan, 887 F.2d 689, 696-97 (6th Cir. 1989), cert. denied, 495 U.S. 905 (1990) (and cases collected therein); UAW v. Park-Ohio Ind., 876 F.2d 894; Pane v. RCA Corp., 868 F.2d 631 (3d Cir. 1989); Bishop v. Osborn Trasp. Inc., 838 F.2d 1173 (11th Cir. 1988). See also Moran v. Aetna Life Ins. Co., 872 F.2d 296 (9th Cir. 1989) (declining to extend remedial powers to persons not targeted by Congress)].

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Prior to the Mertens decision, some courts had expanded the scope of available monetary relief beyond “contractual damages”/benefits, at least in §502(a)(3) cases where the statute authorizes “appropriate equitable relief.” [E.g., Boland v. Chrysler Corp., 933 F.2d 1007 (6th Cir. 1991) (compensatory damages may be available in appropriate cases under §502(a)(3)); Warren v. Society National Bank, 905 F.2d 975 (6th Cir. 1990) (recovery of damages measured by additional tax liability incurred by participant because plan administrtor failed to me a timely distribution of benefits); Joens v. Crescent Metal Prods., 864 F. Supp. 34 (N.D. Ohio 1994) (“appropriate equitable relief may include monetary damages, if necessary, to accord complete relief to the injured party”); Reid v. Gruntal & Co., Inc., 760 F. Supp 945 (D. Me. 1991) (reliance, expectation, and consequential damages on promissory estoppel claim); Maryonovich v. Market Data Retrieval, Inc., 716 F. Supp. 343 (N.D. Ill. 1989) (extracontractual damages are possible for breach of fiduciary duty in administering an employer welfare plan). See also Chemung Canal Trust Co. v. Sovran Bank, 939 F.2d 12 (2d Cir. 1991) (establishing common law claim by co-fiduciaries for contribution); Luby v. Teamsters Trust Funds, 944 F.2d 1176 (3d Cir. 1991) (creating common law right for plans to recover benefit overpayments). But see Boland v. Chrysler Corp., 933 F.2d 1007 (6th Cir. 1991) (rejecting remedy of allowing beneficiaries to opt out of plan and take lump sums); Flacce v. Sun Life Assurance Co., 958 F.2d 730 (6th Cir. 1992); and cases discussed supra under §502(a)(3) causes of action. See also Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990) (dicta suggesting that federal courts could award compensatory and punitive damages in an ERISA §510 case)].

The Supreme Court decision in Mertens, 113 S.Ct. 2063, holds that remedies available under §502(a)(3), do not encompass compensatory damages, but rather are limited to traditional equitable remedies of injunction, mandamus and restitution.

[See e.g., Gerbec v. United States, 164 F.3d 1015 (6th cir. 1999); Mayberry v. United States, 151 F.3d 855 (8th Cir. 1998) (Mertens holding precludes characterization of settlement of Plaintiff’s §502(a)(3) claim as personal injury damages, and it is therefore subject to Federal income and employment taxes pursuant to IRC §104(a)(2); Farr, et al v. U.S. West, 151 F.3d 908 (9th Cir. 1998), as amended by 179 F.3d 1252 (9th Cir. 1999), cert. filed, 68 U.S.L.W. 3291 (1999) (Mertens holding precludes Plaintiffs from recovery of their tax benefit losses under §502(a)(3), even though Defendants breached their fiduciary duty under ERISA); Bast v. Prudential Insurance Co., 150 F.3d 1003 (9th Cir. 1998) (Mertens

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holding precludes “equitable relief” in the form of recovery of compensatory damages for alleged wrongful death by insurance company denying coverage for potentially lifesaving treatment)].

There has been Congressional pressure for the Courts to exercise the federal common law powers to create new remedies. More recently, this pressure has increased based on a perception that health insurance companies are flagrantly denying claims because the Supreme Court’s decision in Pilot Life, 481 U.S. 52, frees them from State law remedies punishing such behavior and ERISA itself lacks punitive damage remedies. [See Bast, supra; Corcoran v. United Healthcare, Inc., 965 F.2d 1321 (5th Cir.), cert. denied, 113 S.Ct. 812 (1992) (expressing concern that plaintiffs’ have no remedy, state or federal, to redress a serious mistake); Hansen v. Continental Ins. Co., 940 F.2d 971 (5th Cir. 1991) (victims of fraud or misrepresentation are left without a remedy); Amos v. Blue Cross & Blue Shield, 868 F.2d 430, 433 (11th Cir.), cert. denied, 493 U.S. 855 (1989) (concern expressed about the absence of “an historical disincentive to insurance company misbehavior”); Suggs v. Pan Amer. Life Ins. Co., 847 F. Supp. 1324 (S.D. Miss. 1994) (opined that judicial interpretations have thwarted the intent of Congress)]. Bills have been introduced into Congress since 1991 to reverse Pilot Life, clarify that insurers of ERISA plans are still subject to State law remedies, or have expanded the remedies available under federal law.

In Varity Corp. v. Howe, 516 U.S. 489 (1996), the Supreme Court held that ERISA participants or beneficiaries may bring an action for equitable relief for breach of fiduciary duties. Id. at 514-15. The Court concluded that §502(a)(3) is a catchall provision and “safety net”offering equitable relief where there is no other remedy. Id. at 512. However, the equitable remedy in Varity was not monetary damages, but reinstatement into the benefit plan, after the plaintiffs were tricked by an administrator into withdrawing and forfeiting their benefits. Id. at 515.

Prejudgment Interest

ERISA does not expressly provide for an award of prejudgment interest, except with respect to actions under §515 and §502(g)(2) to collect delinquent employer contributions to a multiemployer plan. However, by operation of common law, the courts have ruled that an award of prejudgment interest is within their discretion in other ERISA cases, including benefit claims, fiduciary breach claims and §510 claims. [See Fotta v. Trustees of UMW Health & retirement Fund, 165 F.3d 209 (3d Cir. 1998) (prejudgment interest presumptively available when benefits have

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been delayed); Nelson v. EG&G Energy Measurements Group, 37 F.3d 1384 (9th Cir. 1994) (“prejudgment interest is intended to cover the lost investment potential of funds to which the plaintiff was entitled, from the time of entitlement to the date of judgment”); Lutheran Medical Center v. Contractors, Laborers, Teamsters & Eng’rs Health & Welfare Plan, 25 F.3d 616 (8th Cir. 1994); Quesinberry v. Life Ins. Co., 987 F.2d 1017 (4th Cir. 1993); Anthuis v. Colt Industries Operating Corp., 971 F.2d 999 (3d Cir. 1992) and cases collected therein) (“Thus, prejudgment interest should ordinarily be granted unless exceptional or unusual circumstances exist making the award of interest inequitable.”); Diduck v. Kaszycki & Sons Contractors, Inc., 974 F.2d 270 (2d Cir. 1992); Drennan v. General Motors Corp., 977 F.2d 246 (6th Cir. 1992), cert. denied, 113 S.Ct. 2416 (1993). But see Kerr v. Charles F. Votterott & Co., 184 F.3d 938 (8th Cir. 1999) (no compensatory, interest or extracontractual damages available where payment of vested benefit was delayed for three years).

The purpose of prejudgment interest is to compensate the harmed party—to restore him to his status quo ante—not to punish the violator; hence there is no need to show wrongdoing or bad faith. [See, Albanese v. Pfizer, Inc., 1996 U.S. Dist. LEXIS 7047 (D. Kan. 1996); Boston Children’s Heart Foundation v. Nadal Ginard, 73 F.3d 429 (1st Cir. 1996); Short v. Central States Pension Fund, 729 F.2d 567 (8th Cir. 1984); Drennan, 977 F.2d 246 (6th Cir. 1992); Diduck v. Kaszycki & Sons Contractors Inc., 974 F.2d 270 (2d Cir. 1992)].

As to the amount of interest, see Ford v. Uniroyal Pension Plan, 154 F.3d 613 (6th Cir. 1998) (District court not required to look to state law for determination of amount of prejudgment interest); Nelson v. EG&G Energy Measurements Group, 37 F.3d 1384 (9th Cir. 1994) (Treasury bill rate from the time of entitlement to date of judgment is pertinent, not the Treasury bill rate at time of judgment); Kinek v. Paramount Communications Pension Plan, 22 F.3d 503 (2d Cir. 1994) (court did not abuse discretion in not selecting interest rate equal to “market” rate, which would have caused the plan to be overfunded); Quesinberry v. Life Ins. Co., 987 F.2d 1017 (4th Cir. 1993) (awarding post-judgment interest on the entire amount of due benefits, including pre-judgment interest); Diduck v. Kaszycki & Sons Contractors Inc., 974 F.2d 270 (2d Cir. 1992) (should not automatically use IRS statutory rate; rather look to what is needed to restore victim to his former position); Martin v. Harline, 15 E.B.C. 1138 (D. Utah 1991) (adopted interest rates and compounding methods contained in 26 U.S.C. §§6621 and

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6622); Foltz v. U.S. News & World Report Inc., 613 F. Supp. 634 (D.D.C. 1985).

Attorneys Fees

ERISA §502(g) contains two separate provisions authorizing the courts to award attorneys fees and costs in §502(a) actions. The first, §502(g)(1), provides that in any action brought under Title I (except an action covered by §502(g)(2) "by a participant, beneficiary or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." (Emphasis added). The second provision, §502(g)(2), requires a court to award attorneys' fees (and other relief) to a prevailing plan fiduciary in a contribution collection action under ERISA §515, 29 U.S.C. §1145.

Note that under §502(g)(1) an award of fees and costs is discretionary, not mandatory; a prevailing party is not automatically entitled to a fee award. [See, McElwaine v. U.S. West, Inc., 176 F.3d 1167 (9th Cir. 1999); Doe v. Travelers Insur. Co., 167 F.3d 53 (1st Cir. 1999); Florence Nightingale Nursing Service v. Blue Cross/Blue Shield, 41 F.3d 1476 (11th Cir.), cert. denied, 514 U.S. 1128 (1995); Schake v. Colt Industries Op. Corp., 960 F.2d 1187 (3d Cir. 1991); Anthuis v. Colt Industries Op. Corp., 971 F.2d 999 (3d Cir. 1992). Also, a fee award can be made to either party; there is no limitation that fee awards be made only to "prevailing parties." [See, Morgan v. Independent Drivers Assn. Plan, 975 F.2d 1467 (10th Cir. 1992); Oster v. Barco of Cal. Employee Retirement Plan, 869 F.2d 1215 (9th Cir. 1989); Sokol v. Bernstein, 812 F.2d 559 (9th Cir. 1987). But see Does v. Travelers Insur. Co., 167 F.3d 53 (1st Cir. 1999) (fees, if granted, are usually granted to prevailing party); Flanagan v. Inland Empire Elec. Workers Pension Plan, 3 F.3d 1246 (9th Cir. 1993) (no recovery of fees under §502(g)(1) unless party "succeed[s] on a significant issue in litigation which achieves some of the benefit sought in bringing suit").

Fees can be awarded only to a “participant,” “beneficiary,” or “fiduciary,” mirroring ERISA §502’s standing and jurisdiction provisions. [See, Downey Community Hospital v. Wilson, 977 F.2d 470 (9th Cir. 1992)].

In exercising their discretion under §502(g)(1), the courts tend to consider the following factors, although their application and relative weight tends to vary from jurisdiction to jurisdiction:

* the relative bad faith or culpability of the opposing parties;

* the ability of the opposing party to satisfy an award;

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* the deterrent value of an award with respect to the offending party and others similarly situated;

* the extent to which the party seeking fees sought to benefit all plan participants or to resolve a significant legal issue regarding ERISA; and

* the relative merits of the parties’ respective positions.

[See generally Note, “Attorneys Fees Under ERISA: When Is An Award Appropriate?,” 71 Cornell L. Rev. 1037, (1986). See also McElwaine v. U.S. West, Inc., 176 F.3d 1167 (9th Cir. 1999); Gibbs v. Gibbs, 167 F.3d 949 (5th Cir. 1999); LeBlanc v. Cahill, 153 F.3d 134 (4th Cir. 1998); Phelps v. U.S. West et al., 1998 U.S. App. LEXIS 6667 (10th Cir. April 3, 1998); Cottril v. Sparrow, Johnson & Ursillo, Inc., 100 F.3d 220 (1st Cir. 1996); Shade v. Panhandle Motor Serv. Corp., 1996 U.S. App. LEXIS 16703 (4th Cir. 1996); Bellaire Gen. Hosp. V. Blue Cross Blue Shield of Mich., 97 F.3d 822 (5th Cir. 1996); Foltice v. Guardsman Prods., 98 F.3d 933 (6th Cir. 1996), cert. denied, 520 U.S. 1143 (1997); Wells v. U.S. Steel & Carnegie Pension Fund, 76 F.3d 731 (6th Cir. 1996); Maune v. IBEW Local No. 1 Health & Welfare Fund, 83 F.3d 959 (8th Cir. 1996); Duggan v. Hobbs, 99 F.3d 307 (9th Cir. 1996); Canseco v. Construction Laborers Pension Trust, 93 F.3d 600 (9th Cir. 1996), cert. denied, 520 U.S. 1118 (1997); Thorpe v. Retirement Plan of the Pillsbury Co., 80 F.3d 439 (10th Cir. 1996); Quesinberry v. Life Ins. Co., 987 F.2d 1017 (4th Cir. 1993); Ellison v. Shenago Inc. Pension Board, 956 F.2d 1268 (3d Cir. 1992); Schake, 960 F.2d 1188 (3d Cir. 1991); Anthuis, 971 F.2d 999 (3d Cir. 1992); Downey, 977 F.2d 470 (9th Cir. 1992); Losada v. Golden Gate Disposal Co., 950 F.2d 1395 (9th Cir. 1991); Davidson v. Canteen Corp., 957 F.2d 1404 (7th Cir. 1992); Continental Assurance Co. v. Ceder Rapids Pediatric Clinic, 957 F.2d 588 (8th Cir. 1992); Tingley v. Prixley-Richards West, Inc., 958 F.2d 908 (9th Cir. 1992); Salley v. E.I. Dupont de Nemours & Co., 966 F.2d 1011 (5th Cir. 1992); Rodriguez v. MEBA Pension Trust, 956 F.2d 468 (4th Cir. 1992); National Companies Health Plan v. St. Joseph’s Hospital, 929 F.2d 1558 (11th Cir. 1991); Armistead v. Vernitron Corp., 944 F.2d 1287 (6th Cir. 1991); National Cos. Health Benefit Plan v. St. Joseph’s Hosp., Inc., 929 F.2d 1558 (11th Cir. 1991); Meredith V. Navistar Int’l Transportation Corp., 935 F.2d 124 (7th Cir. 1991); Nichols v. Pullman Standard, Inc., 889 F.2d 115 (7th Cir. 1989); Tesch v. General Motors Corp., 937 F.2d 359 (7th Cir. 1991); Sweet v. Consolidated Aluminum Corp., 913 F.2d 268 (6th Cir. 1990); Reinking v. Philadelphia American Life Ins. Co., 910 F.2d 1210 (4th Cir. 1990); Gray v. New England Tel. & Tel. Company, 792 F.2d 251 (1st Cir. 1986); Miles v. N.Y.S. Teamsters Conference Plan, 698 F.2d 593 (2d Cir.), cert. denied, 464 U.S. 829 (1983); Ursic v. Bethlehem Mines, 719 F.2d 670 (3d Cir. 1983); Iron Workers Local 272 v. Bowen, 624 F.2d 1255 (5th Cir. 1980) and 695 F.2d 531 (11th Cir. 1983); Salley v. E.I. Dupont

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deNemours & Co., 966 F.2d 1011 (5th Cir. 1992); Bittner v. Sadoff & Ruday Ind., 728 F.2d 820 (7th Cir. 1984); Marquardt v. North American Car Corporation, 652 F.2d 715 (7th Cir. 1981); Leigh v. Engle, 858 F.2d 361 (7th Cir. 1988), cert. denied sub. nom., Estate of Johnson v. Engle, 489 U.S. 1078 (1989); Groves v. Modified Retirement Plan, 803 F.2d 109 (3d Cir. 1986); Chambless v. M,M&P Pension Plan, 815 F.2d 869 (2d Cir. 1987), cert. denied, 496 U.S. 905 (1990); Nachwalter v. Christie, 805 F.2d 956 (11th Cir. 1986); Monkelis v. Mobay Chemical, 827 F.2d 935 (3d Cir. 1987); Lawrence v. Westerhaus, 749 F.2d 494 (8th Cir. 1984); Hummell v. S.E. Rykoff & Company, 634 F.2d 446 (9th Cir. 1980); Eaves v. Penn, 587 F.2d 453 (10th Cir. 1978); Pratt v. Petroleum Production Mgt. Plan, 920 F.2d 651 (10th Cir. 1990); Graphic Communications Union v. GCIU-Employer Plan, 917 F.2d 1184 (9th Cir. 1990)].

The 7th Circuit's standards for granting fees and costs under §502(g)(1) seemed to vary from case to case. In Production & Maintenance Employees' Local 504 v. Roadmaster Corp., 954 F.2d 1397 (7th Cir. 1992), the court again attempted to harmonize the aforementioned five-factors standard with an "Equal Access To Justice Act_style" standard of awarding fees to a prevailing party unless the loser's litigation position was "substantially justified." The court reaffirmed the Meredith approach that both standards have the same bottom line: was the losing party's position substantially justified and taken in good faith, or was that party simply out to harass its opponent? But, the court explained that the party seeking fees need not actually show subjective bad faith to justify an award. See also Harris Trust & Savings Bank v. Provident Life and Accident Ins. Co., 57 F.3d 608 (7th Cir. 1995) (fees should not be awarded against losing party whose position was "substantially justified"); Brewer v. Protexall, Inc., 50 F.3d 453 (7th Cir. 1995); Hooper v. Demco, Inc., 37 F.3d 287 (7th Cir. 1994); Davidson, 957 F.2d 1404 (7th Cir. 1992) (prevailing plaintiff denied fees because the defendants' position was reasonably justifiable and the issue presented was novel).

The district court must consider and balance all of the factors to the extent they apply to the case. [See, Anthuis, 971 F.2d 999 (3d Cir. 1992)]. The court can consider additional factors. [Id.; Hummell, 634 F.2d 446 (9th Cir. 1980)].

In practice, the application of these factors (at least up until recently) had tended to create a presumption that attorneys fees will be awarded to plaintiff_participants who successfully sue their plans for benefits, consistent with ERISA's policies of enabling plan participants to obtain competent counsel and ready access to the courts. [See, e.g., Canseco v. Construction Laborers Pension Trust, 93 F.3d 600 (9th Cir. 1996); Cottrill v. Sparrow, Johnson & Ursillo, 100 F.3d 220 (1st. Cir. 1996); Rodriguez, 956 F.2d 468 (4th Cir. 1992); Reinking, 910 F.2d 1210 (4th Cir. 1990); Tesch, 937 F.2d 359 (7th Cir. 1991); Meredith, 935 F.2d 124 (7th Cir.

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1991); McConnell v. MEBA Medical & Benefits Plan, 759 F.2d 1401, superseded, 778 F.2d 521 (9th Cir. 1985); Miele v. N.Y.S. Teamsters Plan, 831 F.2d 407 (2d Cir. 1987); Groves, 803 F.2d 109 (3d Cir. 1986); Marquardt, 652 F.2d 715 (7th Cir. 1981); Landro v. Glendenning Motorways, Inc., 625 F.2d 1344 (8th Cir. 1980); Birmingham v. Sogen_Swiss Int'l Corp. Plan, 718 F.2d 515 (2d Cir. 1983); Leigh, 858 F.2d 361 (7th Cir. 1988), cert. denied, 489 U.S. 1078 (1989); Smith v. CMTA_IAM Pension Trust, 746 F.2d 587 (9th Cir. 1985). But see Gibbs v. Gibbs, 167 F.3d 949 (5th Cir. 1999) (no attorney fee award to prevailing plaintiff where plaintiff was beneficiary under suspicion for participant’s murder); Davidson, 957 F.2d 1404 (7th Cir. 1992); Kunin v. Benefit Trust Life Ins., 696 F. Supp. 1342 (C.D. Cal. 1988), aff'd, 898 F.2d 1421, as amended, 910 F.2d 534 (9th Cir. 1990). But see Quesinberry v. Life Ins. Co. of North America, 987 F. 2d 1017 (4th Cir. 1993).

Two Circuits (8th and 9th) have adopted a so-called “special circumstances rule” under which a prevailing plaintiff participant or beneficiary will be awarded attorneys’ fees absent special circumstances that would make such an award unjust. [See, e.g., Lutheran Medical Ctr. v. Contractors, Laborers, Teamsters & Eng’rs Health & Welfare Plan, 25 F.3d 616 (8th Cir. 1994); Rodriquez v. General Motors Corp., 956 F.2d 468 (4th Cir. 1992); Losada v. Golden Gate Disposal Co., 950 F.2d 1395 (9th Cir. 1991); Reinking v. Philadelphia American Life Ins. Co., 910 F.2d 1210 (4th Cir. 1990); Tesch v. General Motors Corp., 937 F.2d 359 (7th Cir. 1991); Meredith v. Navistar Int’l Transp. Corp., 935 F.2d 124 (7th Cir. 1991); McConnell v. MEBA Medical & Benefits Plan, 759 F.2d 1403, superseded, 778 F.2d 521 (9th Cir. 1985); Miele v. N.Y.S. Teamsters Plan, 831 F.2d 407 (2nd Cir. 1987); Groves v. Modified Retirement Plan, 803 F.2d 109 (3rd Cir. 1989); Marquardt v. North American Car Corp., 652 F.2d 715 (7th Cir. 1981); Landro v. Glendenning Motorways, Inc., 625 F.2d 1344 (8th Cir. 1980); Birmingham v. Sogen-Swiss Int’l Corp. Plan, 718 F.2d 515 (2nd Cir. 1983); Leigh v. Engle, 858 F.2d 361 (7th Cir. 1988); Smith v. CMTA-IAM Pension Trust, 746 F.2d 587 (9th Cir. 1985). But see Davidson v. Canteen Corp., 957 F.2d 1404 (7th Cir. 1992); Kunin v. Benefit Trust Life Ins., 696 F. Supp 1342 (C.D. Cal.1988), aff’d, 898 F.2d 1421, as amended, 910 F.2d 534 (9th Cir. 1990); Quesinberry v. Life Ins. Co. of North America, 987 F.2d 1017 (4th Cir. 1993) (Reinking does not establish a presumption in favor of a prevailing participant and adopting rule of other Circuits that ERISA does not require mandatory fee shifting)].

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Some courts put a heavy emphasis on whether the losing defendant acted in bad faith. [See e.g., Cottrill v. Sparrow, Johnson & Ursillo, 100 F.3d 220 (1st Cir. 1996); Shade v. Panhandle Motor Serv. Corp., 1996 U.S. App. LEXIS 16703 (4th Cir. 1996); Foltice v. Guardsman Prods., 98 F.3d 933 (6th Cir. 1996); Raff v. Belstock, 933 F. Supp. 909 (N.D. Cal. 1996); Harrison v. Aetna Life Ins. Co., 925 F. Supp. 744 (M.D. Fla. 1996); Greater Blouse, Skirt and Undergarment Ass’n v. Morris, 1996 U.S. Dist. LEXIS 4836 (S.D.N.Y. 1996); Santa Monica Culinary Welfare Fund v. Miramar Hotel Corp., 920 F.2d 1491 (9th Cir. 1990), cert. denied, 501 U.S. 1232 (1991); Maiuro v. Federal Express Corp., 843 F. Supp. 935 (D.N.J.), aff’d without op., 43 F.3d 1461 (3d Cir. 1994); Tiemeger v. Community Mut. Ins. Co., 789 F. Supp. 894 (S.D. Ohio 1992), aff’d in part, remanded in part, 8 F.3d 1094 (6th Cir. 1993), cert. denied, 511 U.S. 1005 (1994); Kidder v. H&B Marine, Inc., 925 F.2d 857 (5th Cir. 1991). But see McPherson v. Employees’ Pension Plan of America Re-Insurance Co., 33 F.3d 253 (3d Cir. 1994) (reversed district court’s determination not to award fees and noting fee award could be made against losing defendant who had not acted in bad faith)].

Where ERISA is only one aspect of the litigation, fees have been denied by at least one court. [See Bokunewicz v. Purolator Products, Inc., 907 F.2d 1396 (3d Cir. 1990)].

There is also a tendency among the courts to not award fees to prevailing defendant plans and employers against plaintiff_participants. [See Tobin v. General Elect. Co., 1996 U.S. Dist. LEXIS 18645 (E.D. Pa. 1996)(losing plaintiff's inability to satisfy award is sufficient basis to deny fees); Maune v. IBEW Local No. 1 Health & Welfare Fund, 83 F.3d 959 (8th Cir. 1996)(plaintiff's claim of sufficient merit to warrant additional action against fund); Corder v. Howard Johnson & Co., 37 F.3d 550 (9th Cir. 1994); Izzarelli v. RExene Products Co., 24 F.3d 1506 (5th Cir. 1994); Davidson, 957 F.2d 1404; Pritchard v. Rainfair, Inc., 945 F.2d 185 (7th Cir. 1991); Hogan v. Kraft Foods, 969 F.2d 142 (5th Cir. 1992); Holder v. Prudential Ins. Co., 951 F.2d 89 (5th Cir. 1992); Tingley v. Pixley_Richards West, Inc., 958 F.2d 908 (9th Cir. 1992); VanBoxel v. Journal Co. Pension Trust, 836 F.2d 1048 (7th Cir. 1987); Meredith, 935 F.2d 124; Tesch, 937 F.2d 359; Gray, 792 F.2d 251; Bittner, 728 F.2d 820 (7th Cir. 1984); Lojek v. Thomas, 716 F.2d 675 (9th Cir. 1983); Hope v. IBEW, 785 F.2d 826 (9th Cir. 1986]. But see Estate of Shockley v. Alyeska Pipeline, 130 F.3d 403 (9th Cir. 1997) (award of fees to employer/plan to compensate for defending meritless suit); Astor v. International Business Machines Corp., 7 F.3d 533 (6th Cir. 1993) (because employees breached their covenants not to sue, employer is entitled to reasonable attorney fees); Farris v. Century Planners, Ltd., 1994

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U.S. Dist. LEXIS 10643 (D. Kan. 1994) (fees awarded against losing plaintiffs upon finding lack of merit in plaintiff's position to be significant); Cefali v. Buffalo Brass Co., 748 F. Supp. 1011 (W.D.N.Y. 1990)(fees awarded against losing plaintiffs who sued in bad faith); Baker v. Greater Kansas City Laborers Welfare Fund, 699 F. Supp. 210, later op., 716 F. Supp. 1229 (W.D. Mo. 1989)(losing plaintiff order to pay part of defendant's fees and his attorney was ordered to pay the other part)].

Fees may be awarded to successful defendants sued by benefit plans or other institutional plaintiffs. [See e.g., Credit Managers Ass'n v. Kennesaw Life & Accident Ins. Co., 25 F.3d 743 (9th Cir. 1994) (normal rule against such awards applied only to individual, not institutional plaintiffs); Operating Engineers Pension Trust v. Gilliam, 737 F.2d 1501 (9th Cir. 1984); Schetter v. Prudential_Bache Securities, Inc., 695 F. Supp. 1077 (E.D.N.Y. 1988); Anita Foundations, Inc. v. ILGWU Fund, 902 F.2d 185 (2d Cir. 1990); Jones v. O'Higgans, 736 F. Supp. 1243 (N.D. N.Y. 1990). But see Park South Hotel Corp. v. New York Hotel Trades Council Pension Fund, 715 F. Supp. 596 (S.D.N.Y. 1989) (refusing to assess fees due to concern that a fee award would frustrate the purpose of MPPAA by deterring plans from seeking to impose withdrawal liability)].

Of course, there are non_ERISA bases for an assessment of attorneys fees and costs against a party that can apply in ERISA litigation. [See, e.g., Herman v. Schwent, 177 F.3d 1063 (8th Cir. 1999) (pursuant to Equal Access to Justice Act, Department of Labor must pay attorney fees of plan administrator named in baseless DOL breach of fiduciary duty action); Etter v. J. Pease Const. Co., 963 F.2d 1005 (7th Cir. 1992); Salley v. E.I. Dupont de Nemours & Co., 966 F.2d 1011 (5th Cir. 1992); Malhoit v. So. Cal. Retail Clerks Union, 735 F.2d 1133 (9th Cir. 1984) (28 U.S.C. 1927); Townsend v. Holman Consulting Corp., 1989 U.S. App. Lexis 11706 (9th Cir. 1989) (FRCP Rule 11); May v. Houston Post Pension Plan, 898 F.2d 1068 (5th Cir. 1990)(same). See also, Meredith, 935 F.2d 124 (frivolous appeal sanctions)].

Of course, ERISA §502 provides for fee awards for appeals court work as well as trial court work. [See, e.g., Roadmaster, 954 F.2d 1397 (7th Cir. 1992)].

Once a court determines to award attorneys fees to a party, it must decide on an amount. As to how to calculate a fee award, see, e.g., Ford v. Uniroyal Pension Plan, Lexis 21564 (6th Cir., September 4, 1998) (District court not required to look to state law for determination of amount of prejudgment interest); Central States Pension Fund v. Central Cartage Co., 76 F.3d 114 (7th Cir.), cert. denied sub nom. Mason & Dixon Lines v. Central States, 519 U.S. 811 (1996) (fund entitled to recover amount it would have paid if it had hired outside counsel); Harsch v. Eisenberg, 956 F.2d 651 (7th Cir.), cert. denied, 113 S.Ct. 61 (1992);

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Dutchak v. Central States Pension Fund, 932 F.2d 591 (7th Cir. 1991); Curry v. Contract Fabricators, Inc. Profit Sharing Plan, 891 F.2d 842 (11th Cir. 1990); PBGC v. Fletcher, 12 E.B.C. 2518 (W.D. Tex. 1990); Chambless v. Master, Mates & Pilots Pension Plan, 885 F.2d 1053 (2d Cir. 1989); Schueler v. Roman Asphalt Corp., 827 F. Supp. 247 (S.D.N.Y. 1993); Egert v. Connecticut Gen. Life Ins. Co., 768 F. Supp. 216 (N.D. Ill. 1991); Cefali, 748 F. Supp. 1011; Dasler v. E.F. Hutton Co., 698 F. Supp. 172 (D. Minn. 1988) (including expert fees). The amount of fees, like award of fees, is reviewable under a clear abuse of discretion standard. [See Curry v. Contract Fab. Inc. Profit Sharing Plan, 891 F.2d 842 (11th Cir. 1990); Leigh v. Engle, 858 F.2d 361 (7th Cir. 1988)].

The Supreme Court in City of Burlington v. Dague, 505 U.S. 557 (1992), has held that awards of attorneys fees pursuant to statute generally may not exceed the lodestar amount. [See also Bellaire Gen. Hosp. v. Blue Cross Blue Shield of Mich., 97 F.3d 822 (5th Cir. 1996); Forbush v. J.C. Penney Co., 98 F.3d 817 (5th Cir. 1996); Wells v. U.S. Steel &Carnegie Pension Fund, 76 F.3d 731 (6th Cir. 1996); Citrin v. Erikson, 918 F. Supp. 792 (S.D.N.Y. 1996); Williams v. Unum Life Ins. Co. Of America, 1996 U.S. Dist. LEXIS 4809 (N.D. Cal. 1996); Elmore v. Cone Mills Corp., 23 F.3d 855 (4th Cir. 1994) (based on City of Burlington case, court held no enhancement for contingency under ERISA); Cann v. Carpenters’ Pension Trust Fund, 989 F.2d 313 (9th Cir. 1993) (same); Drennan v. General Motors Corp., 977 F.2d 246 (6th Cir. 1992), cert. denied, 113 S.Ct. 2416 (1993). But see Florin v. Nations Bank, 34 F.3d 560 (7th Cir. 1994) (Seventh Circuit reversed district court’s refusal to award multiplier; common fund, not fee shifting principles should be applied and, thus City of Burlington analysis does not apply). See also Board of Trustees of the Hotel and Restaurant Employees Local 25 and Employers’ Health And Welfare Fund et al. v. JPR, Inc., 1998 U.S.App. LEXIS 3165 (D.C. Cir. 1998)(public spirited discount given to plaintiff by attorney not to benefit defendant. Market rates apply).

As for what services cannot be included in a fee award, see McElwaine v. U.S. West, Inc., 176 F.3d 1167 (9th Cir. 1999) (no attorney fees available for administrative appeals process under ERISA); Board of Trustees of the Hotel and Restaurant Employees Local 25 and Employers’ Health And Welfare Fund et al. v. JPR, Inc., 136 F.3d 794 (D.C. Cir. 1998)(routine auditing fees not recoverable, in contrast to 5th Circuit precedent); Aminoff v. Ally & Gargano Inc., 20 E.B.C. 2172 (S.D.N.Y. 1996)(no recovery of fees for settling dispute in which no litigation ever initiated); Downey, 977 F.2d 470 (9th Cir. 1992) (State court litigation; litigation against other parties; expert witness fees). [But see

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Griffin v. Birch Brook Agency, Inc., 727 F. Supp. 142 (S.D.N.Y. 1989)].

As for the effect of contingent fee arrangements, see, Drennan v. General Motors Corp., 977 F.2d 246 (6th Cir. 1992), cert. denied, 113 S.Ct. 2416 (1993). But See Griffin v. Birch Brook Agency, Inc., 727 F. Supp. 142 (S.D.N.Y. 1989)].

As for the timing of an application for fees, see Schake v. Colt Indus. Operating Corp., 960 F.2d 1187 (3d Cir. 1992).