United States District Court, N.D. Illinois, Eastern Division
Gerber Plumbing Fixtures LLC, Plaintiff: John M. O'Bryan,
LEAD ATTORNEY, Michael F. Tomasek, Freeborn & Peters LLP,
Bryan, Pendleton, Swats and McAllister, LLC, a Tennessee
Limited Liability Company, Defendant: Karla L. Johnson, LEAD
ATTORNEY, Reed Smith LLP, Pittsburgh, PA; Melissa Ann Mickey,
Reed Smith LLP, Chicago, IL.
Cheiron, Inc., a Delaware Corporation, Defendant: James
Brandon Hiller, Ryan Thomas Brown, LEAD ATTORNEYS, Brian M.
Roth, Gordon & Rees LLP, Chicago, IL.
CHARLES RONALD NORGLE, United States District Judge.
Cheiron, Inc.'s Motion to Dismiss Plaintiff's First
Amended Complaint  is granted. This case is set for a
status hearing on December 4, 2015.
the Court is Defendant Cheiron, Inc.'s ("
Defendant" ) motion to dismiss Plaintiff Gerber Plumbing
Fixtures LLC's (" Plaintiff" ) complaint
against it, which alleges violations of the Employee
Retirement Income Security Act, 29 U.S.C. § 1001 et
seq. (" ERISA" ) and assorted violations of
Illinois common law. The matter has been fully briefed. For
the following reasons, Defendant's motion is granted.
case is before the Court on a motion to dismiss, the Court
takes all well-pleaded facts as true, construes all
reasonable inferences in favor of the plaintiff, and strikes
any conclusory statements from the complaint. See Runnion
ex rel. Runnion v. Girl Scouts of Greater Chi. & Nw.
Ind., 786 F.3d 510, 526 (7th Cir. 2015); Ashcroft v.
Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d
868 (2009). A statement is conclusory when it does no more
than recite the bare elements of the complaint, in a "
defendant-unlawfully-harmed-me" fashion. Iqbal,
556 U.S. at 678.
following facts are taken from Plaintiff's First Amended
Complaint. From 2006 until February 6, 2009, Defendant
provided actuarial services to Plaintiff's defined
contribution plans, the Globe Valve Division--UAW Pension
Plan and the Woodbridge Sanitary Pottery Division Pension
Plan (collectively, the " Plans" ). At all relevant
times, federal law required these Plans to have at least
three years' worth of liquidity. See 26 U.S.C. §
430(j)(4). At the same time, the law also required Defendant
to certify parts of an annual report that stated either that
the Plans were in compliance with the applicable federal
liquidity requirements, or that the plans had a liquidity
shortage. See 29 U.S.C. § § 1021(d), 1023(d). If a
plan has a liquidity shortfall, and does not correct the
shortfall, the Internal Revenue Service (" IRS" )
is authorized to exact a 10% excise tax on the underfunded
amount, in addition to other various fines and penalties. See
alleges that, starting in 2006, the Plans began to experience
liquidity shortfalls. Plaintiff complains that Defendant
failed to inform Plaintiff about the funding shortfalls and
failed to disclose the shortfalls on the Plans' annual
reports. Plaintiff did not learn about the liquidity
shortfall until January 2013.
April 10, 2015, Plaintiff filed its complaint against
Defendant and Bryan, Pendleton, Swats and McAllister, LLC
(" BPS& M" ), alleging various violations of ERISA
and Illinois' common law, all arising out of allegations
that Defendant and BPS& M failed to report the liquidity
shortfall to Plaintiff or the government. Subsequently,
Plaintiff retained outside counsel to " file a request
for a private letter ruling with the [IRS] asking for relief
from the imposition of the excise taxes . . ." which the
IRS granted on July 16, 2015. First Am. Compl. ¶ 17.
now moves the Court to dismiss the First Amended Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(1) and (6).
Defendant makes two principal arguments regarding its motion
to dismiss. Defendant argues initially that it is not liable
for breach of fiduciary duty under ERISA because actuaries
fulfilling purely actuarial roles are not plan fiduciaries,
and thus, have no liability for breach of fiduciary duty
order to state a claim for breach of fiduciary duty under
ERISA, the defendant must be, inter alia, a
fiduciary of the plan. 29 U.S.C. § 1109(a); Nauman
v. Abbott Labs., 669 F.3d 854, 859 (7th Cir. 2012).
ERISA defines a fiduciary as a person that (i) "
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) " 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) "
has any discretionary authority or discretionary
responsibility in the administration of such plan,"
which includes the fiduciary's assignees. 29 U.S.C.
§ 1002(21)(A). In an interpretive bulletin, the
Department of Labor stated that " while attorneys,
accountants, actuaries and consultants performing their usual
professional functions will ordinarily not be considered
fiduciaries, if the factual situation in a particular case
falls within one of the categories described in [29 U.S.C.
§ 1002(21)(A)(i)-(iii)], such persons would be
considered to be fiduciaries within the meaning of
[ERISA]." See 29 C.F.R. § 2509.75-5 (emphasis
is " [w]ise conduct and management exercised without
constraint; the ability coupled with the tendency to act with
prudence and propriety" or " [f]reedom in the
exercise of judgment; the power of free
decision-making." Discretion, Black's Law Dictionary
(10th ed. 2014); see also David P. Coldesina, D.D.S.,
P.C., Emp. Profit Sharing Plan & Tr. v. Estate of
Simper,407 F.3d 1126, 1132 (10th Cir. 2005) (quoting
Webster's Ninth New Collegiate Dictionary 362 (1991)
(" Discretion exists where a party has the 'power of
free decision' or 'individual choice." ');
Krukowski v. Omicron Techs.. Inc., No. 10 C 5282,
2011 WL 1303416, *6 (N.D. Ill. Mar. 31, 2011) (finding
allegation that sponsor had authority to terminate plan's
insurance policy sufficient to state claim against sponsor as
a fiduciary). Furthermore, " the terms
'discretionary authority,' 'discretionary
control,' and 'discretionary responsibility' in
[29 U.S.C.] § 100(21)(A) speak to actual
decision-making power rather than to the influence that a
professional may have over the decisions made by the plan
trustees she advises." ...