fails to allege that Leo was a beneficiary at the time that suit
Leo seems to argue in his response that he has standing to
bring the ERISA claim because the alleged violations were
committed while he was a "participant/beneficiary." (Pl.'s Resp.
at 1.) However, in order to bring an ERISA claim, the plaintiff
must be a participant or beneficiary at the time that the suit
was filed and not just when the alleged violation was committed.
Winchester, 942 F.2d at 1194; see also Harris v. Provident
Life & Accident Ins. Co., 26 F.3d 930, 933 (9th Cir. 1994). As
previously explained, Leo's complaint fails to allege that Leo
was either a participant or a beneficiary at the time that the
suit was filed.
Leo also states in his response that "[d]efendants have asked
this Court to rule that Plaintiff has lost his standing to sue
because he failed to sue within said 18 month Cobra period."
(Pl.'s Resp. at 1.) Leo then argues that his complaint should not
be dismissed because "[n]either the statute . . . nor the
authority cited by the Defendants in the Memorandum of Law . . .
state that a claim that is based upon alleged COBRA notice
violations is barred if it is not brought within the 18 month
COBRA." (Id. at 2.) Leo is correct that there is no requirement
that an ERISA claim that is based on alleged violations of the
COBRA notice provisions must brought within an eighteen-month
period. However, there is a requirement that the plaintiff must
qualify as either a participant or beneficiary at the time that
the suit was filed. 29 U.S.C. § 1132(a)(1)(A), 1132(c). This Leo
fails to do.
In essence, Leo's arguments seem to boil down to one main
argument: It is unfair to find that Leo does not have standing to
sue under ERISA simply because he did not bring suit until after
he was no longer due any benefits. The court rejects this
argument for two main reasons. First, the purpose of § 1132(c),
which is the section under which suit is brought, is not so much
to penalize as it is to induce plan administrators to comply with
the notice requirements. See Winchester, 942 F.2d at 1193. If
the administrator does not comply, the participant or beneficiary
may file a suit to compel their compliance. Id. The
administrator then will supply the information in an effort to
minimize potential liability. Id. The manner in which Leo has
attempted to use § 1132(c), i.e., as a penalty provision, does
not further the purpose of § 1132(c). Second, the Seventh Circuit
has explicitly rejected the argument that standing under §
1132(c) cannot be extinguished by acceptance of benefits. Id.
In sum, the allegations in Leo's complaint fail to establish
that he was either a participant or a beneficiary at the time
that this suit was filed.*fn1 Thus, the court finds that Leo
does not have standing to bring an ERISA claim against
defendants. However, it is possible that Leo may be able to
include allegations which would allow this court to find that Leo
was a participant or a beneficiary at the time that suit was
filed. It is also possible that Leo may be able to pursue a claim
against defendants in state court based on a state law cause of
action if Leo is unable to satisfy ERISA's standing requirement.
Thus, the court will dismiss Leo's complaint without prejudice
and grant him leave to amend the complaint.
For the foregoing reasons, the court grants defendants' motion
to dismiss and dismisses Leo's complaint without prejudice. Leo
is given until April 5, 1999 to file an amended complaint. If Leo
fails to file an amended complaint by that date, the court will
dismiss his ERISA claim with prejudice and dismiss his case
defendants without prejudice to his right to file an action in
state court. If Leo does file an amended complaint by April 5,
1999, defendants are given until May 10, 1999 to answer or