Two hundred twenty-five current and former employees of the steel mills located in Lorain, Ohio, claimed United States Steel Corporation, United States Steel and Carnegie Pension Fund and United Steel Workers of America (USW) intentionally misled them regarding the calculation of their pension benefits, inducing some to retire early.
The plaintiffs originally filed an action on June 1, 2099, asserting the following claims: breach of ERISA fiduciary duty, ERISA equitable accounting restitution and other equitable relief, equitable estoppel, failure to furnish requested plan documents, common-law fraud, common-law negligence, common-law breach of fiduciary duty and common-law promissory estoppel. The defendants moved to dismiss the claims for failure to state a claim, and the district court dismissed all the claims.
The court of appeals found that in regards to breach of ERISA fiduciary duty, the plaintiffs had no claim. ERISA contains a statue of limitations that requires a claim to be brought within three years of the date the plaintiff first receives knowledge of the breach or violation. Because the plaintiffs filed in 2009, three years after the expiry of the limitations period, the district court and court of appeals found the claims time-barred and dismissed them for failure to state a claim for relief.
The court also found that the complaint fails to plausibly allege that USW is an ERISA fiduciary.
According to the court opinion, “the complaint contains only the most conclusory of allegations that USW exercises discretionary control or authority over plan administration, management or assets, so it cannot be considered a de facto fiduciary under ERISA.”
The court also stated that there was no basis for the plaintiffs to believe that USW was acting in the capacity of plan administrator when it allegedly made assurances, and USW is not an ERISA fiduciary.
In count two, plaintiffs assert a claim for equitable accounting, restitution and “other equitable relief.” However, the plaintiffs must first establish that at least one defendant breached the plan documents or violated ERISA in some way, which they did not. Therefore, the court found they are not entitled to any equitable relief.
In count three of the complaint, the plaintiffs assert a claim for equitable estoppel. The district court dismissed this claim on the grounds? that this court had yet to recognize such a theory of liability in the context of a pension plan. The appeals court found that the plaintiffs were aware of how their benefits would be calculated under the plan, and they contended the benefits should be calculated in a way different from what is called for in the plan documents. The court states that such allegations cannot form a basis for an ERISA estoppel claims.
In count four, plaintiffs claim the Fund failed to furnish plan documents upon request. The district court had found that based upon a review of letters attached to the Fund’s motion to dismiss, that the claim was baseless.
The court opinion states that ERISA provides that an “administrator shall, upon written request of any participant or beneficiary, furnish a copy [of certain specific plan documents] or other instruments under which the plan is established or operation.” A plan that does not comply with a request can be held personally liable for the failure.
The Fund provided the plaintiff’s request letter, as well as their response. The court stated that if the Fund’s response was insufficient they should have requested the Fund to provide more documents. Therefore, count four was also dismissed.
In counts five through eight, the plaintiffs assert claims under Ohio’s common law for fraud, negligence, breach of fiduciary duty and promissory estoppel. However, ERISA preempts “any and all state laws insofar as they may now or hereafter relate to any employee benefit plan.” Therefore ERISA preempted all of these claims.
The court opinion is here.
« Participant Education Needed Before 404(a)(5) Deadline