The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge
Plaintiffs Carol D. Faber ("Faber") and the Estate of Russell E. Young ("Young Estate") (collectively, "Plaintiffs") bring this putative class action alleging a single cause of action: that the use of a "Total Control Account" ("TCA") by Metropolitan Life Insurance Company ("MetLife") to distribute death benefits constitutes a breach of fiduciary duties under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1104(a), 1106(b)(1). MetLife has moved to dismiss Plaintiffs' Amended Complaint based on several arguments, each of which, MetLife asserts, is an independent ground for dismissal. To wit, MetLife argues that (1) Plaintiffs lack standing to bring their ERISA claim; (2) MetLife's use of a TCA is not a breach of fiduciary duty and thus Plaintiffs have failed to state a claim under Rule 12(b)(6); (3) Plaintiffs seek damages not cognizable under ERISA; and (4) the ERISA claim is time-barred as to Plaintiff Faber. For the reasons set forth below, MetLife's motion is granted, and Plaintiffs' Amended Complaint is dismissed.
I. FACTUAL BACKGROUND*fn1
Plaintiffs were both beneficiaries of group life insurance welfare benefit plans that are regulated and governed by ERISA: Plaintiff Faber was the beneficiary of a plan sponsored by her late husband's employer the Eastman Kodak Company (the "Kodak Plan") and the Young Estate was the beneficiary of a plan sponsored by the late Russell E. Young's employer the General Motors Corporation (the "GM Plan"). Both the Kodak Plan and the GM Plan were funded with group life insurance policies issued by MetLife. The two plans are substantially similar and both provide for the establishment of a TCA. Under the Plans, if the amount of death benefits payable exceeds a specified amount, a TCA is established in the name of the beneficiary, and the beneficiary is provided with a personalized "checkbook" that he or she can use to draw on the TCA for any or all of the funds in the TCA at any time. The Kodak Summary Plan Description ("SPD") states that "[p]ayment of a death benefit of $7,500 or more is made under MetLife's [TCA]. The death benefit amount is deposited in an interest bearing money market account and your beneficiary is provided with a checkbook to use for writing checks to withdraw funds." The GM Plan SPD similarly provided that "[i]f the benefit from a single claim is $6,000, or more, your beneficiary may receive basic life insurance benefits under one of several options available under the Beneficiary's Total Control Account (TCA) Program . . . A personalized checkbook allows your beneficiary to easily use all, or a portion, of the money. Funds left with the insurance company earn interest at competitive rates." While a beneficiary's funds are in the TCA, it is "guaranteed" by MetLife. Moreover, funds in the TCA earn interest at market rates, but beneficiaries under the Kodak and GM Plans are guaranteed to receive a minimum of 1.5% interest per annum.
Plaintiffs allege that although they understood that the funds in their TCA would be transferred into a money market account at a bank, MetLife concealed the fact that it "retains and invests the proceeds for its own account," and that MetLife only deposits any amount of death benefits into the TCA upon the presentment of a check for payment from a beneficiary. Thus, Plaintiffs allege that "[u]ntil a beneficiary draws a check on his or her Total Control Account and the check is paid, legal title to and actual possession of the funds are retained by MetLife and MetLife has the use of the funds for its own benefit." As a result, Plaintiffs allege that MetLife earns a profit based on the interest that it earns by investing the money in the TCA's. That is, Plaintiffs allege that MetLife earns more managing and investing the funds than it pays out in interest to the beneficiaries. Plaintiffs claim that MetLife, as a fiduciary of the Plans, was not entitled to make a profit by reinvesting the benefits for their own account and that Plaintiffs and those similarly situated are therefore entitled to recover this profit and to enjoin MetLife from similar conduct in the future.
In this case, after the deaths of the respective plan participants, Faber and the Young Estate filed claims for benefits under the Plans, both of which were approved. Both Plaintiffs received substantially similar letters advising them of the establishment of the TCA's in their names. Faber received three letters -- one of which is not dated and the other two of which were dated June 30, 2004 -- that informed her that a total of $393,651.90 had been added to her TCA. The Young Estate received a similar letter, also undated, that indicated that the Young Estate's opening balance in its TCA was $42,765.48. Within a few months of its inception, the Young Estate withdrew all proceeds and closed its TCA. Faber, on the other hand, has made several withdrawals from her TCA, but she maintains a positive balance to this day.
A. Legal Standards under Rules 12(b)(1) and 12(b)(6)
In considering a motion to dismiss under Rule 12(b)(1) for lack of standing, this Court "must accept as true all material allegations of the complaint and must construe the complaint in favor of the complaining party." Denney v. Deutsche Bank AG, 443 F.3d 253, 263 (2d Cir. 2006). The requirement that a plaintiff demonstrate constitutional standing is a jurisdictional prerequisite to suit in federal court. Thus, if Plaintiffs lack standing under Article III of the U.S. Constitution, there is no subject matter jurisdiction and the Court must dismiss this case. See Shain v. Ellison, 356 F.3d 211, 215 (2d Cir. 2004) ("If [plaintiff] lacks standing, we lack subject matter jurisdiction to entertain a request for such relief."); Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject matter jurisdiction, the court must dismiss the action.").
Similarly, to survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). The court's determination of whether a complaint states a "plausible claim for relief" is a "context-specific inquiry" that requires application of "judicial experience and common sense." Id. Unless a plaintiff's well-pleaded allegations have "nudged [its] claims across the line from conceivable to plausible, [the plaintiff's] complaint must be dismissed." Twombly, 550 U.S. at 570.
MetLife argues that Plaintiffs lack both constitutional and statutory standing to bring their ERISA claim. That is, MetLife contends that Plaintiffs lack standing under Article III of the U.S. Constitution because they have not alleged a cognizable injury-in-fact, and that they lack standing under the express terms of ERISA because they are not "participants, beneficiaries or fiduciaries" under § 1132(a)(3). A plaintiff suing under ERISA must establish both types of standing in order to sue under the statute. See Kendall v. Employees Retirement Plan of Avon Prods., 561 F.3d 112, 118 (2d Cir. 2009). Because constitutional standing is a question of whether the court has jurisdiction to determine the merits of an action, this inquiry is addressed first in the court's analysis. LaFleur v. Whitman, 300 F.3d 256, 268 (2d Cir. 2002); see also Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998).
1. Constitutional Standing under Article III
Article III, section 2 of the U.S. Constitution restricts federal courts to deciding "Cases" and "Controversies." To establish Article III standing, a plaintiff must allege, and ultimately prove, that he has suffered a cognizable injury-in-fact that is fairly traceable to the challenged action of the defendant, and which is likely to be redressed by the requested relief. Baur v. Veneman, 352 F.3d 625, 632 (2d Cir. 2003). To qualify as a constitutionally sufficient injury-in-fact, an asserted injury must be (a) concrete and particularized and (b) "actual or imminent, not 'conjectural' or 'hypothetical.'" Lujan v. National Wildlife Fed'n, 504 U.S. 555, 560 (1992); Baur, 352 F.3d at 632. In evaluating whether an alleged injury is concrete and particularized, courts look to whether the injury affects the plaintiff "in a personal and individual way to confirm that the plaintiff has a personal stake in the controversy." Baur, 352 F.3d at 632; Lujan, 504 U.S. at 560 n.1. The requirement that an injury be concrete recognizes that "if an injury is too abstract, the plaintiff's claim may not be capable of, or otherwise suitable for, judicial resolution." Baur, 352 F.3d at 632 (internal quotations and citations omitted). As the Second Circuit recently held, ...