United States District Court, S.D. New York
March 19, 2004.
MICHAEL MEAD, Plaintiff, -against- ARTHUR ANDERSEN, LLP, and ARTHUR ANDERSEN LLP RETIREMENT PLAN, Defendants
The opinion of the court was delivered by: VICTOR MARRERO, District Judge
DECISION AND ORDER
The plaintiff brings this lawsuit under the Employee Retirement
Income Security Act of 1974, 29 U.S.C. § 1001 et seq.
("ERISA") to recover certain benefits which his former employer allegedly
owes him. The employer moves this Court to dismiss two of the three
ERISA-based causes of action one for breach of fiduciary duty and
the other seeking equitable relief as inapplicable to the
ordinary individual benefits controversy described in complaint. The
motion is granted.
Michael Mead ("Mead"), pro se, brings three ERISA-based causes of
action against his former employer, Arthur Andersen LLP (collectively
with Arthur Andersen LLP Retirement Plan, "Andersen"). Mead claims that
Andersen should have classified his position of employment with Andersen
as "Practice Management," "Practice Services," or "Practice Other," for
purposes of a particular pension plan, thereby entitling him
to certain pension benefits. He seeks (1) judgment for the pension
money; (2) injunctive relief declaring him entitled to the pension; (3)
restitution totaling the pension amount; (4) prejudgment interest; and
(5) attorney's fees. Anderson moves to dismiss Mead's second and third
causes of action, under ERISA § 502(a)(2) and § 502(a)(3),
Mead's first cause of action is very straightforward: he claims that he
qualified for the pension but Andersen failed to pay. That cause of
action is based upon ERISA § 501(a)(1)(B), which permits a
beneficiary to bring a lawsuit "to recover benefits due to him under the
terms of his plan" or "to enforce his rights under the terms of the
plan." 29 U.S.C. § 1132(a)(1)(B).
Mead's second cause of action, under ERISA § 502(a)(2), alleges
that Anderson breached its fiduciary duty in connection with
administering the benefits plan. See 29 U.S.C. § 1132 (a)
(2). However, a § 502(a)(2) claim must "be brought in a
representative capacity on behalf of the plan as a whole."
Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 142
n.9 (1985). Here, Mead seeks to recover only the benefits to which he is
entitled individually; thus the Court must dismiss that cause
of action. See Lee v. Burkhart, 991 F.2d 1004, 1009 (2d Cir.
1993) (citing Russell and dismissing a § 502(a)(2)
cause of action "because plaintiffs are seeking damages on their
own behalf, not on behalf of the Plan.").
Mead's third cause of action seeks "restitution" and "all other
appropriate equitable relief." Compl. ¶ 18. ERISA § 502(a)(3)
permits a beneficiary to recover "appropriate equitable relief"
from ERISA violations, 29 U.S.C. § 1132 (a)(3)(B) (emphasis added),
but the Supreme Court has stated that "where Congress elsewhere provided
adequate relief for a beneficiary's injury, there will likely be no need
for further equitable relief, in which case such relief normally would
not be `appropriate.'" Varity Corp. v. Howe, 516 U.S. 489, 515
(1996). Andersen argues that there is "no need for further equitable
relief" because Congress has already "provided adequate relief" for
Mead's claim namely, § 502(a)(1)(B), Mead's first cause of
Mead responds by directing the Court's attention to Devlin v.
Empire Blue Cross And Blue Shield, in which the Second Circuit held
that Varity Corp. "did not eliminate the possibility of a
plaintiff successfully asserting a claim under both § 502(a)(1)(B),
to enforce the terms of a plan, and § 502(a)(3)." 274 F.3d 76, 89
(2001). Devlin notes that Varity Corp. merely
"indicated that equitable relief under § 502(a)(3) would `normally'
not be appropriate" where a plaintiff brought claims under both §
502(a)(1) and §
502(a)(3). Id. (quoting Varity Corp., 516
U.S. at 515) (emphasis added).
Devlin is easily distinguishable from the present case,
however, because the plaintiffs in Devlin faced the possibility
that § 502(a)(3) would be "their only remaining remedy," a concern
also present in Varity Corp. Id. In other words, it is
"appropriate" to allow plaintiffs to include a § 502(a)(3) claim
which may provide distinct relief from a § 502(a)(1) claim; it is
inappropriate to include a § 502(a)(3) claim which, as here, merely
duplicates the § 502(a)(1) claim. See Rubio v. Chock Full O'Nuts
Corp., 254 F. Supp.2d 413, 432 (S.D.N.Y. 2003) (dismissing §
502(a)(3) claim duplicative of § 502(a)(1) claim). As in
Rubio, Mead would "lose nothing by the dismissal of [his]
alternative claim for equitable relief under § 502(a)(3)."
Mead, however, suggests that there is. distinct, equitable relief he
seeks under § 502(a)(3), namely the interest on whatever retroactive
benefits he may recover under § 502(a)(1). Mead's argument finds
support in the Second Circuit's decision in Dunnigan v. Metro. Life
Ins. Co., 277 F.3d 223, 228-29 (2d Cir. 2002). In that case,
plaintiff Helen Dunnigan's employer waited four years and eight months
before paying her certain disability benefits, and she sued under ERISA
§ 502(a)(3), on behalf of herself and all other
plaintiffs whose benefit payments were delayed, to recover the
interest on those payments. Id. at 226. The Second Circuit held
that "the plan has realized an unjust enrichment (assuming the lateness
was unjustified)" and that "[a]n award of interest in such circumstances
serves as an equitable make-whole remedy" permissible under § 502(a)
(3). Id. at 229.
Dunnigan is not applicable here because it holds that
interest is available as an equitable remedy only if the delay in paying
benefits is unreasonable or unjustified. Id. at 230. That case
involved an allegation that the defendant breached an extra-contractual
fiduciary duty by unjustifiably delaying payment. Id. at 227.
Mead has made no such allegation in this case; his complaint merely
states that Andersen owes him money under the plan. To the extent Mead
seeks interest as part of his contractual rights under the
plan, that claim would be legal, not equitable. In any event, the day
before Dunnigan was decided, the Supreme Court decided
Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204
(2002), which is nowhere mentioned in Dunnigan and which calls
into question the relevant holding in Dunnigan. See Flint v. ABB,
Inc., 337 F.3d 1326, 1331 (11th Cir. 2003) ("The Court's decision in
Knudson, therefore, raises the question whether § 502(a)
(3) ever allows an award of interest for delayed benefits or whether such
a claim is an
impermissible attempt to dress an essentially legal claim in the
language of equity"); Campanella v. Mason Tenders' District Council
Pension Plan, 299 F. Supp.2d 274, 292 (S.D.N.Y. 2004) (stating that
Knudson "casts serious doubt on Dunnigan's broader
characterization of interest on retroactive awards of benefits as a
permissible form of equitable relief").
In Knudson, defendant Janette Knudson ("Knudson") was injured
in a car accident and obtained compensation for that injury from both her
ERISA plan and from a settlement with the car manufacturer and other
tortfeasors. Id. at 207. The ERISA plan's insurance company
sued Knudson under § 502(a)(3) to enforce a plan provision
requiring her to reimburse the plan for any plan benefits which she also
recovered from a third-party. Id. The Supreme Court held that
§ 502(a)(3) was an improper means by which to enforce that right
because the claim was legal, not equitable. Id. at 210-221.
Knudson stated that determining whether a cause of action is
"legal or equitable in a particular case (and hence whether it is
authorized by § 502(a)(3)) remains dependent on the nature of the
relief sought." Id. at 215. Because the insurance company was
"seeking legal relief the imposition of personal liability on
[Knudson] for a contractual obligation to pay money," the Supreme Court
held that § 502(a)(3) did not
authorize the action. Id. at 221.
Mead's claim for interest is essentially a claim for a judgment of
certain money damages against Andersen in connection with an alleged
breach of the plan. The fact that Mead's claim is framed as an unjust
enrichment (versus breach of contract) does not affect the
Knudson analysis, which focuses on "nature of the relief
sought," not the theory supporting that relief. Id. at 215.
Knudson made this point explicit by stating that, at common
law, a suit seeking "`to obtain a judgment imposing a merely personal
liability upon the defendant to pay a sum of money'" was considered a
legal action, "whether the contract was actual or implied."
Id. at 213 (quoting Restatement of Restitution §
160, Comment a, pp. 641-642 (1936)) (emphasis added). Unjust enrichment
(the theory in the present case), of course, may be considered a form of
"implied contract." See 66 Am. Jur.2d Restitution and
Implied Contracts § 8 (2003) ("Unjust enrichment is also
referred to as a form or theory of quasi-contract or a contract implied
in law."). Under Knudson. Mead's claim against Andersen for
interest payments cannot be classified as equitable and therefore, the
Court dismisses the claim as improper under § 502(a)(3).
For the reasons stated, it is hereby
ORDERED that the motion of defendants Arthur Andersen LLP and
Arthur Andersen LLP Retirement Plan to dismiss plaintiff Michael Mead's
second and third causes of action is granted.
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