Appeal from the United States District Court for the District of Columbia (No. 00cv00317)
Before: Ginsburg, Chief Judge, and Rogers and Tatel,
The opinion of the court was delivered by: Tatel, Circuit Judge
Claiming breach of fiduciary duty and unjust enrichment, employees of the Board of Governors of the Federal Reserve System seek the return of mandatory contributions that they made into a defined-benefit pension plan after actuaries determined the plan was well-funded. They also seek to terminate their obligation to make future contributions. The district court dismissed the claims for lack of jurisdiction and for failure to state a claim. We affirm.
The Federal Reserve System, composed principally of the Board of Governors and the twelve regional Federal Reserve Banks, provides a retirement plan for all of its employees. The retirement package encompasses two distinct pension plans, the "Board Plan" -- the one at issue in this case -- and the "Bank Plan." Both are defined-benefit plans that, regardless of investment performance, entitle beneficiaries to fixed periodic payments upon retirement. The Board and regional Banks bear the risk of any funding deficiency: if the plans become underfunded, the employers must make up the difference and pay the promised benefits.
The difference between the two plans stems from a change in Social Security coverage of federal employees. Federal Reserve Board employees hired before January 1, 1984, pay no Social Security taxes and receive no Social Security benefits with respect to their employment with the Board. To cover the retirement needs of these employees, the Board of Governors created the Board Plan. As a condition of employment, employees hired before January 1, 1984, made mandatory payroll contributions into the Plan, set at seven percent of salary.
In 1983, Congress amended the Social Security Act to extend coverage to Board employees hired on or after January 1, 1984. See Social Security Amendments of 1983, Pub. L. No. 98-21, 97 Stat. 65 (1983). For these employees, and for all regional Bank employees, the Board created the Bank Plan. That Plan requires no employee contributions, but unlike employees covered by the Board Plan, those covered by the Bank Plan pay Social Security taxes and their retirement payments are adjusted to account for their Social Security benefits.
Appellants, a putative class of current and former Board employees hired before January 1, 1984, allege that for each of the past twenty years, the Board Plan actuary determined that the Plan had more than sufficient assets to satisfy liabilities, including both benefits and administrative expenses. According to appellants, retirement plan annual reports show that Board Plan assets were 132% of projected and accrued liabilities in 1984 and were 167% of such liabilities in 1994. Based on these actuarial estimates, the Board has not contributed to the Board Plan since 1985.
Citing these developments, appellants asked the Executive Secretary, the Plan's chief administrative officer, "for a refund or suspension of mandatory employee contributions." Letter from Comm. on Appeals, J.A. at 71. The Executive Secretary denied their request, and the Committee on Appeals, the entity charged with deciding disputes regarding the payment of benefits, affirmed. The Committee explained that because the claim involved not benefits, but rather a disagreement over the pension plan's design, neither the Executive Secretary nor the Committee on Appeals had authority to resolve the matter.
Appellants then filed suit in the U.S. District Court for the District of Columbia, seeking recovery of all contributions made since the actuary deemed the Board Plan sufficiently funded plus the investment return on those contributions. They also sought an injunction prohibiting the Board from requiring further payments into the pension plan. Appellants argued that by refusing to exercise their discretion to reduce mandatory contributions, the Board of Governors and the Committee on Employee Benefits (CEB), the Plan's administrator, breached their fiduciary duties to beneficiaries. Appellants also alleged that after the death of the last beneficiary, Board Plan surplus funds would revert to the Board or to the Bank Plan, thereby unjustly enriching the Board or the regional Banks. Appellants made several other claims, alleging breach of contract, unconstitutional taking, and age discrimination.
In the first of two opinions, the district court dismissed these last three claims, a dismissal that appellants do not challenge. See Albrecht v. Comm. on Employee Benefits of the Fed. Reserve Employee Benefits Sys., No. 00-317, slip op. at 9-12, 15-18 (D.D.C. Mar. 30, 2001). Finding that only the Board of Governors has authority to modify the mandatory contribution level, the court also dismissed the fiduciary duty claims against the CEB. Id. at 8. In the second opinion, the district court dismissed the remaining claims. See Albrecht v. Comm. on Employee Benefits of the Fed. Reserve Employee Benefits Sys., No. 00-317, slip op. at 16-17 (D.D.C. Sept. 17, 2002). The court determined that the Board enjoyed sovereign immunity, id. at 7-8, and that because appellants' fiduciary duty claim was essentially a breach of contract action, it could be brought only in the U.S. Court of Federal Claims under the Tucker Act, id. at 13. In the alternative, the district court held that appellants failed to state a claim for breach of fiduciary duty. Id. at 14-15. The court also dismissed the unjust enrichment claim, concluding that such a claim may not be brought where, as here, a contract governs the challenged conduct. Id. at 15-16. Finally, because the request for injunctive relief rested solely on the failed claims, the district court dismissed it as well. Id. at 17.
In this appeal, we must decide (1) whether the Board enjoys sovereign immunity against the breach of fiduciary duty claim, and if so, whether any statute waives that immunity, and (2) whether appellants properly stated a claim for unjust enrichment against the Board and the regional Banks. Reviewing the district court's decisions de novo, see Ass'n of Civilian Technicians, Inc. v. Fed. Labor Relations Auth., 283 F.3d 339, 341 (D.C. Cir. 2002) ( de novo review of dismissal for lack of subject matter jurisdiction); Browning v. ...