The opinion of the court was delivered by: Foreman, Chief Judge:
This matter is before the Court on defendant United Food and
Commercial Worker's International Union's (Union) motion to
dismiss or strike (Document No. 29). Plaintiffs are employees
of co-defendant Swift Independent Packing Company (Swift) and
beneficiaries of Swift's health insurance plan which is
governed by the Employee Retirement Income Security Act of
Between September 6, 1982 and January 26, 1984 plaintiffs
incurred medical, hospital, surgical, and doctor bills on
behalf of their now-deceased daughter, totaling $591,083.26.
The Swift plan covered $551,211.24 of these expenses, leaving
balance of $39,872.02. The plaintiffs allege in Counts II and
III of their amended complaint that by virtue of the Union's
discretionary responsibilities over the Swift health plan, it
is a fiduciary as defined by ERISA, and that the Union
breached its fiduciary duties owed to the plaintiffs.
Plaintiffs further demand punitive damages, damages for
emotional distress, a jury trial, and attorney's fees.
The Union denies that its responsibilities regarding Swift's
health plan confer a fiduciary status as contemplated by
ERISA, 29 U.S.C. § 1002(21)(A)(iii). The Union further submits
that even if it is a proper defendant, ERISA allows neither
punitive damages or damages for emotional distress, nor does it
require that a jury trial be afforded the plaintiffs. The Union
mistakenly has moved to dismiss Count I in addition to Counts
II and III. Since the plaintiffs have not named the Union as a
defendant in Count I the Court has disregarded the argument
relating to this Count.
Section 3(21) of ERISA defines a fiduciary. In relevant
part, action 3(21) provides:
(A) Except as otherwise provided in subparagraph
(B), a person is a fiduciary with respect to a
plan to the extent (i) he exercises any
discretionary authority or discretionary control
respecting management of such plan or exercises
any authority or control respecting management or
disposition of its assets, (ii) he renders
investment advice for a fee or other
compensation, direct or indirect, with respect to
any moneys or other property of such plan, or has
any authority or responsibility to do so, or
(iii) he has any discretionary authority or
discretionary responsibility in the administration of
such plan. Such term includes any person designated under
Section 1105(c)(1)(B) of this title.
29 U.S.C. § 1002(21). The plaintiffs contend that the Union is
a fiduciary as a result of subsection (iii). Thus, the Union
herein is a fiduciary with respect to a plan to the extent it
has any discretionary authority or discretionary responsibility
in the administration of the plan.
Section 11 of Swift's health insurance plan provides that
section 42 of the Master Agreement between Swift and the Union
governs the claims handling procedure in situations such as
the one presented here. Three paragraphs of section 42 of the
Master Agreement are pertinent in the instant case:
The company will designate a representative . . .
at each plant who will be available for
consultation with beneficiaries or a Local Union
representative . . . with respect to the
disposition of claims.
In the event the beneficiary or the Local Union
representative is not satisfied with the outcome
of the consultation, the Local Union
representative may refer the matter to the
International Union for discussion with the
Director of the Industrial Relations Department
of the Company. . . .
In the event no decision is reached in the above
step, the International Union may submit the
matter to the Arbitrator, whose decision shall be
final and binding on all parties above.
Once the Union receives a benefit complaint from its Local,
section 42 of the agreement requires that the Union discuss the
matter with Swift's Director of Industrial Relations. One of
two courses of action follow these conferences. (1) The union
will agree with Swift's position or it will reach a compromise,
on behalf of the employee, with Swift. The matter is pursued no
further or; (2) The union will disagree with Swift or be unable
to compromise. When this happens, section 42 vests the Union
with the sole power to refer the matter, on behalf of the
employee, to binding arbitration if it so chooses.
Defendant Union urges that the authority granted the Union
by section 42 is no greater than that assumed by a Union
representative in any grievance process; and because the Union
is not ultimately responsible for deciding the merits of
beneficiaries' claims its authority is not "discretionary" as
contemplated by ERISA. To support this point, the Union
asserts that the plain language of section 42 permits it only
to present the claim to Swift, not to grant or deny that claim.
The Union additionally urges that it should not be held to the
fiduciary standard imposed by ERISA ...