United States District Court, N.D. Illinois, Eastern Division
October 22, 2004.
JAMES J. STRENK, Plaintiff,
TYCO DEFERRED COMPENSATION PLAN, ADMINISTRATIVE COMMITTEE OF THE TYCO DEFERRED COMPENSATION PLAN, TME MANAGEMENT CORP., TYCO INTERNATIONAL LTD. and ALLIED TUBE & CONDUIT CORP., Defendants.
The opinion of the court was delivered by: JAMES ZAGEL, District Judge
MEMORANDUM OPINION AND ORDER
On June 4, 2004, Plaintiff James J. Strenk filed suit alleging
that Defendant Tyco Deferred Compensation Plan ("Plan"), pursuant
to a decision made by Defendant Administrative Committee of the
Tyco Deferred Compensation Plan ("Committee"), wrongfully refused
to waive penalties for early withdrawal under the deferred
compensation plan's "unforeseeable financial emergency"
provision. The deferred compensation plan is administered by the
Committee and is sponsored by Defendants TME Management Corp.
("TME"), Tyco International Ltd. ("Tyco"), and Allied Tube &
Conduit Corp. ("Allied"). In this suit, Plaintiff is seeking the
money withheld from his account balance to pay the early
withdrawal penalties plus any resulting interest.
The Committee, TME, Tyco, and Allied (the "non-Plan
Defendants") have moved to dismiss all counts of the Complaint
against them arguing that the Plan is the only permissible
defendant under § 502(a)(1)(B) of the Employee Retirement Income
Security Act of 1974 ("ERISA"). See 29 U.S.C. § 1132(a)(1)(B). The Seventh Circuit has
repeatedly held that "ERISA permits suits to recover benefits
only against the Plan as an entity." Neuma, Inc. v. AMP, Inc.,
259 F.3d 864, 872 n. 4 (7th Cir. 2001) (quoting Jass v.
Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th
Cir. 1996); See Also Mein v. Carus Corp., 241 F.3d 581 (7th
Cir. 2001); Garratt v. Knowles, 245 F.3d 941, 949 (7th Cir.
2001). Although this rule is generally enforced, courts have made
exceptions in cases where the plaintiff is seeking equitable
relief, the employer is alleged to be the plan administrator and
agent for service purposes, and the employer and the plan are
closely intertwined. Penrose v. Hartford Life & Accident Ins.
Co., 2003 U.S. Dist. LEXIS 13497 at *9 (N.D. Ill. Aug. 4, 2003).
Only the exception made for an "intertwined" non-plan defendant
is applicable here. The strongest case for naming a non-plan
defendant exists for the Committee, which is the body responsible
for administering the deferred compensation plan. Under the plan,
the Committee has the authority to resolve and did actually
resolve Plaintiff's questions concerning interpretation of the
deferred compensation plan. See P. Ex. A, § 12.1. The Committee
is also authorized to make any payments directed by court order
in which the Plan or the Committee has been named as a party. See
P. Ex. A. § 16.41. Since the Committee has been actively involved
with the decision making processes within the deferred
compensation plan, I find it has become adequately intertwined
with the Plan to justify naming the Committee as a defendant in
this case. See Mein, 241 F.3d at 585; Penrose, 2003 U.S. Dist
LEXIS 13497 at *15.
The case for naming Plaintiff's former employer, Allied, as a
defendant is minimal at best. Plaintiff does not allege that
Allied was substantively involved with the deferred compensation
plan's daily administration and decision making processes.
Plaintiff alleges only that Allied withheld compensation from his paychecks. This sort
of minimal administrative involvement with the deferred
compensation plan does not create grounds for naming Allied as a
defendant. Equally weak is the argument for naming Tyco and TME
as defendants. Tyco and TME merely provide the funds for payment
in accordance with decisions made by the Plan and the Committee.
Tyco's and TME's responsibilities are not such that they
substantively involve either entity with the Plan or the
Committee. Furthermore, it does not appear from the pleadings
that a direct action against Tyco and TME would be necessary
since there is no indication that the Plan is underfunded or that
the Plan will refuse to pay a judgment properly awarded by this
For these reasons, the non-Plan Defendants' Motion to Dismiss
is GRANTED as to Allied, Tyco and TME and is DENIED as to the
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