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Donald J. Tompkins v. Central Laborers' Pension Fund

August 25, 2011


The opinion of the court was delivered by: Joe Billy McDADE United States Senior District Judge

E-FILED Thursday, 25 August, 2011 02:56:38 PM Clerk, U.S. District Court, ILCD


On August 3, 2011 the Court entered an Order and Opinion denying Plaintiff's Motion for Summary Judgment, and granting in part and deferring in part Defendant's Motion for Summary Judgment. (Doc. 49). The Court deferred ruling upon Count III of Plaintiff's Amended Complaint, which it set for oral argument on August 22, 2011. (Doc. 49). Prior to the hearing, on August 19, 2011, Defendant filed a Supplemental Affidavit of Sharon E. West in support of its Motion for Summary Judgment as to Count III (Doc. 51),*fn1 and Plaintiff filed a Response thereto (Doc. 52). On August 22, 2011, the parties appeared for oral argument, and the Court is now ready to rule upon Defendant's Motion for Summary Judgment as to Count III of Plaintiff's Amended Complaint. For the following reasons, Defendant's Motion is GRANTED.


In Count III of his Amended Complaint, Plaintiff seeks a declaratory judgment that certain provisions of Defendant's Plan violate the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et. seq.. (Doc. 19 at 24). Specifically, he alleges that § 7.1 and §3.3(d) of the Plan work a forfeiture in violation of § 1053(a), and that § 3.3(b), §3.7, and §4.3(b) of the Plan violate the anti-cutback rule of §1054(g) and work a forfeiture in violation of § 1053(a). (Doc. 19 at 24). However, Plaintiff does not make any allegations to the effect that the provisions have, in practice, worked as a forfeiture or a cutback to his own benefits, nor those of any other participant. Nor does Plaintiff assert that Defendant has violated any fiduciary duty. Instead, he merely asserts that the language of the Plan is at odds with the requirements of ERISA. Accordingly, Plaintiff seeks to have this Court engage in a facial analysis of the Plan and to enjoin Defendant from applying these provisions in the future. (Doc. 19 at 24).


Count III of Plaintiff's Amended Complaint is distinct from his previously disposed of claims, insofar as Plaintiff does not allege that any of the plan provisions at issue in Count III have caused a harm directly to him.*fn3 Rather, Plaintiff maintains that he brings Count III pursuant to § 1132(a)(3), which empowers a "participant, beneficiary, or fiduciary" to bring a civil action "to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan." (Doc. 19 ¶ 48). According to Plaintiff, § 1132(a)(3) does not require relief to be directly personal to the "participant." (Doc. 19 ¶ 49).

It appears that Plaintiff does have statutory standing to bring Count III pursuant to §1132(a)(3) as he is a participant in Defendant Fund and is seeking to enjoin Defendant from applying allegedly violative Plan provisions. However, in addition to satisfying statutory standing, Plaintiff must also have constitutional standing to bring his cause of action.*fn4 Raines v. Byrd, 521 U.S. 811, 820 n.3 (1997); Kendall v. Employees Retirement Plan of Avon Prods., 561 F.3d 112, 118 (2d Cir. 2009) ("A plan participant suing under ERISA must establish both statutory standing and constitutional standing, meaning the plan participant must identify a statutory endorsement of the action and assert a constitutionally sufficient injury arising from the breach of a statutorily imposed duty."). In evaluating Plaintiff's standing, the Court must determine whether Plaintiff has alleged "such a personal stake in the outcome of the controversy as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf." Warth v. Seldin, 422 U.S. 490, 498-99 (1975). That is, the Court must determine "whether the plaintiff is the proper party to bring th[e] suit." Raines, 521 U.S. at 818. It is the "burden of the party who seeks the exercise of jurisdiction in his favor clearly to allege facts demonstrating that he is the proper party to invoke judicial resolution of the dispute." Spencer v. Kemna, 523 U.S. 1, 11 (1998).

In order to satisfy constitutional standing requirements, Plaintiff must show: 1) that he has suffered an injury in fact; 2) that the injury is fairly traceable to Defendant's actions; and 3) that it is likely that the injury will be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Environmental Svcs. 528 U.S. 167, 180-81 (2000). Generally, to show that he has suffered an injury in fact, a Plaintiff must demonstrate the "invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). The "primary inquiry here is whether [Plaintiff] has pled a violation of his ERISA-created rights sufficient to satisfy Article III's injury requirement." Horvath v. Keystone Health Plan East, Inc., 333 F.3d 450, 455 (3rd Cir. 2003).

While the Court has been unable to find any Seventh Circuit opinion which addresses the issue, several other circuit courts have discussed the manner in which a plaintiff may establish an injury for the purpose of seeking injunctive relief under ERISA. In Horvath, the Third Circuit held that in order to assert such an injury, a plaintiff need only allege that his statutory ERISA rights have been violated. 333 F.3d at 456 (plaintiff "need not demonstrate actual harm in order to have standing to seek injunctive relief requiring [the defendant plan] to satisfy its statutorily-created disclosure or fiduciary responsibilities"). The Third Circuit reasoned that ERISA created certain rights in the plaintiff, including the right to have the defendant fund act in accordance with its fiduciary duty and make required disclosures to plan participants. Id. Accordingly, the plaintiff had the right to seek injunctive relief forcing the defendant to fulfill its obligation. Id.

Two years after the Third Circuit decided Horvath, the Second Circuit recognized its holding that injunctive relief may be sought under § 1132(a)(3) without a showing of actual harm. See Central States Southeast & Southwest Areas Health & Welfare Fund v. Merck-Medco Managed Care, LLC, 433 F.3d 181, 199 (2d Cir. 2005). In Kendall v. Employees Retirement Plan of Avon Prods., 561 F.3d 112, 119-121 (2d Cir. 2009), the Second Circuit clarified that a plaintiff seeking injunctive relief must still allege some injury or deprivation of a specific right arising from an alleged violation of fiduciary duty, rather than simply asserting a blanket claim for breach of fiduciary duty.

The Sixth Circuit has also recognized the Third Circuit's analysis in Horvath and held that "Plaintiffs need not demonstrate individualized injury to proceed with their claims for injunctive relief under § 1132(a)(3); they may allege only a violation of the fiduciary duty owed to them as a participant in and beneficiary of their respective ERISA plans." Loren v. Blue Cross & Blue Shield of Michigan, 505 F.3d 598, 610 (6th Cir. 2007) (finding that plaintiffs' claim that their plan breached a fiduciary duty with respect to the plans to which they belonged was sufficient to establish injury-in-fact for purposes of constitutional standing).

Here, Plaintiff's claim is that Defendant's Plan is in violation of various ERISA provisions, specifically the anti-cutback and anti-forfeiture provisions found in § 1054(g) and § 1053(a). Plaintiff, however, does not allege the violation of any fiduciary duty owed to him, any harm which he has suffered, or even any benefit which would be bestowed upon him should the Court find that the provisions are facially at odds with ERISA. "Article III standing ultimately turns on whether a plaintiff gets something (other than moral satisfaction) if the plaintiff wins." Drutis v. Rand McNally & Co., 499 F.3d 608, 612 (6th Cir. 2007). Should Plaintiff prevail on Count III, he would receive no benefit whatsoever. At oral argument, Plaintiff's attorney characterized his motivation to bring Count III as follows: "[Q]uite frankly, it was, okay, there are some other things bothering me in the plan, I will add them to Count III as long as I have got to do an amended complaint anyways or if I choose to do an amended complaint let's add those issues too because some of these issues were motivated, not that these issues don't exist in this case, they exist elsewhere in the fund, matters not in litigation." (Tr. at 5). Although standing requirements are relaxed when a Plaintiff seeks injunctive relief pursuant to § 1132(a)(3), there still must be some semblance of an actual case or controversy between the parties. However, Plaintiff alleges absolutely no injury, nor any deprivation of his statutory rights. Plaintiff is simply stating that there "are provisions here that violate . . . ERISA and I would like a declaratory resolution of that matter. . . . It seems to make perfect sense if we are into this plan, let's deal with a couple other provisions in the plan and have a declaratory action." (Tr. at 7; 9).

As all Plaintiff asks is for a judgment that the Plan as written is facially at odds with ERISA, the Court finds the matter of standing here should be determined in accordance with a case brought as one for declaratory judgment. "In the context of cases in which, as here, declaratory relief is sought, the traditional test of justiciability has been whether there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of declaratory judgment." Vickers v. Henry County Savings & Loan Ass'n, 827 F.2d 228, 231 (7th Cir. 1987) (internal quotations omitted). "In order to demonstrate standing for a declaratory judgment, [Plaintiff] must show an actual controversy, that is, that [he] has sustained, or is in immediate danger of sustaining, a direct injury as a result of the [Defendant's]" allegedly illegal plan provision. Foster v. Center Township of Laporte County, 798 F.2d 237, 242 (7th Cir. 1986). Here, Plaintiff has not shown the risk of any such injury or danger to himself. (Tr. at 7 "Count III . . . clearly . . . has no direct impact on [Plaintiff] . . . this isn't ...

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