Alford v. The NFL Player Disability & Survivor Benefit Plan

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JASON ALFORD, et al., Plaintiffs, v. THE NFL PLAYER DISABILITY & SURVIVOR BENEFIT PLAN, et al., Defendants.

CIVIL No. 1:23-cv-00358-JRR

United States District Court, D. Maryland

March 20, 2024

MEMORANDUM OPINION

JULIE R. RUBIN, UNITED STATES DISTRICT JUDGE

This matter comes before the court on Defendants The NFL Player Disability & Survivor Benefit Plan and NFL Player Disability & Neurocognitive Benefit Plan (formerly, the Bert Bell/Pete Rozelle NFL Player Retirement Plan) (the “Plan”); the Disability Board of the Plan (the “Board”); Larry Ferazani, Belinda Lerner, Jacob Frank, Sam McCullum, Robert Smith, and Hoby Brenner (collectively, the “Trustees”); and the National Football League Commissioner Roger Goodell's (the “Commissioner”) Joint Rule 12(b)(6) Motion to Dismiss Plaintiffs' Amended Class Action Complaint and memorandum of law in support thereof. (ECF Nos. 69, 69-1; together, the “Motion.”) The court has reviewed all papers. No hearing is necessary. Local Rule 105.6 (D. Md 2023).

I. BACKGROUND^[1]

Plaintiffs Jason Alford, Willis McGahee, Daniel Loper, Michael McKenzie Jamize Olawale, Alex Parsons, Eric Smith, Charles Sims, Joey Thomas, and Lance Zeno bring a class action pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”). Plaintiffs are retired National Football League (“NFL”) players who applied for one or more of the disability benefits available under the Plan.^[2](ECF No. 56 ¶¶ 1, 147-266.) Defendant the Plan is an employee welfare benefit plan, as defined by ERISA § 3(1), 29 U.S.C. § 1002(1). Id. ¶ 16. Defendant the Board is the administrator and fiduciary of the Plan, within the meaning of ERISA § 3(16), 29 U.S.C. § 1002(16). Id. ¶ 19. The Board is composed of seven individuals - six voting members and one non-voting member. Id. ¶¶ 19, 43. The Commissioner is a Board member and its non-voting chairperson. Id. ¶ 19. Defendants Ferazani, Lerner, Frank, McCullum, Smith, and Brenner are also members of the Board. Id. ¶ 20.

A. The Plan and Benefit Claims Process

The Plan provides three general categories of disability benefits to eligible NFL Players:^[3](1) Total and Permanent (“T&P”) Disability benefits; (2) Line of Duty (“LOD”) Disability benefits; and Neurocognitive (“NC”) Disability benefits.^[4] (ECF No. 56 ¶ 32.) All NFL Players participate in the Plan. (Def.'s Mot., Exhibit B, Disability Plan, ECF No. 69-7 at 5.) Article 3 of the Plan sets forth the General Standard for Eligibility for T&P Disability Benefits. Id. at 6-7. Article 5 of the Plan sets forth the General Standard for Eligibility for LOD Disability Benefits. Id. at 25. Article 6 of the Plan sets forth the General Standard for Eligibility for NC Disability Benefits. Id. at 32-33.

To qualify for benefits, whether T&P, LOD, or NC, a “Neutral Physician” must find a Player meets the Plan's standards and must provide a complete report on the Player's disability as necessary for the Committee or the Board “to make an adequate determination” on the Player's benefits claim. (ECF No. 56 ¶¶ 46, 71, 76, 80.) The Plan provides the following on Neutral Physician:

(a) Selection and Termination. The [] Board will maintain a network of Neutral Physicians to examine Players who apply for benefits under this Plan. The Neutral Physician network may include physicians, institutions, or other health care professionals. The NFLPA and Management Council^[5]will jointly designate such Neutral Physicians. A Neutral Physician must (1) certify that any opinions offered as a Neutral Physician will be provided without bias for or against any Player, and (2) accept and provide services pursuant to a “flat-fee” agreement, such that the amount of compensation provided by the Plan will not depend on whether his or her opinions tend to support or refute any given Player's application for benefits.

(Disability Plan at 57; Def.'s Mot., Exhibit C, Retirement Plan, ECF No. 69-8 at 60.)

When a Player seeks benefits under the Plan, the Plan's Disability Initial Claims Committee (“the Committee”) makes an initial determination as to whether the Player is entitled to benefits. (ECF No. 56 ¶ 35.) The Plan provides that Committee members review all facts and circumstances in the administrative record before rendering a decision. Id. ¶ 37. Players may appeal Committee decisions to the Board. According to the Amended Complaint, “the Board may not accord any deference to the Committee's determination.” As the Plan's fiduciary under ERISA, Plaintiffs allege, “the Board's review of an adverse determination must take into account all available information, irrespective of whether that information was presented or available to the Committee.” Per the Plan, “the Board must review all facts and circumstances in the administrative record before rendering a decision.” Id. ¶¶ 38-41 (emphasis in original).

B. Plaintiffs' Benefits Applications

Plaintiffs applied for benefits under the Plan. (ECF No. 56 ¶¶ 149, 163, 176, 191, 195, 203, 227, 229, 246, 258, 261.) Subsequently, the Committee and the Board denied Plaintiffs' applications. Id. ¶¶ 154, 160, 170, 173, 180, 184, 186, 189, 191, 193, 199-200, 205, 207, 214, 217, 222, 226, 232, 237-38, 246, 250, 252, 255, 260. In many instances, the Board represented to Plaintiffs that it reviewed all the evidence contained in Plaintiffs' files. Id. ¶¶ 184, 201, 214, 237-38, 252, 255, 260, 266. In some instances, the Board further represented that “‘the Plan's physicians are absolutely neutral in this process' and that it ‘ha[d] no doubt that the Plan's neutral physicians fully understand the obligation to conduct fair and impartial Player evaluations, and that they ha[d] done so in [Plaintiff's] case.'” Id. ¶ 226.

Plaintiffs allege that the physicians are biased and have significant financial conflicts of interest. (ECF No. 56 ¶¶ 283-89.) Specifically, Plaintiffs allege that Defendants have “a systematic pattern that the more the Defendants compensate their hired physicians, the higher the likelihood that those physicians will render flawed, inadequate, result-oriented opinions adverse to benefits applicants.” Id. ¶ 107. In addition to wrongfully denying Plaintiffs' benefits, Plaintiffs also allege that “Defendants breached their fiduciary duties to Plaintiffs through inaccurate, misleading, and deceptive information about the Plan to Plaintiffs and absent Class members.” Id. ¶ 108. Plaintiffs further allege that “there is a larger systematic practice of providing more compensation to, and more frequently retaining physicians with, extremely high benefits denial rates, whom the Board knew or should have known stood to benefit financially from the repeat business that might come from providing result-oriented reports that were to the Board's liking, yet inadequate to base a determination on.” (ECF No. 56 ¶ 112.)

C. Procedural History

On February 9, 2023, Plaintiffs filed the instant action. (ECF No. 1.) On May 12, 2023, Plaintiffs filed an Amended Complaint. (ECF No. 56.) The Amended Complaint sets forth five counts: Wrongful Denial of Benefits under Section 502(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B) on behalf of the Class and all Subclasses (Count I); Failure to Provide Adequate Notice under Section 503(1) of ERISA, 29 U.S.C. § 1133(1), on behalf of the Class and all Subclasses (Count II); Denial of Right to Full and Fair Review under Section 503(2) of ERISA, 29 U.S.C. § 1133(2), on behalf of the Class and [all] Subclasses (Count III); Breaches of Fiduciary Duties of Care and Loyalty under Sections 102(a), 404, and 405 of ERISA, 29 U.S.C. §§ 1022, 1104, and 1105, on behalf of the Class and [all] Subclasses (Count IV); and Breaches of Fiduciary Duties under Sections 404 and 405 of ERISA, 29 U.S.C. §§ 1104 and 1105 on Behalf of the Plan Only (Count V). (ECF No. 56 at pp. 92-113.) Plaintiffs seek certification of a plaintiff class (as to Counts I through IV), monetary compensation, injunctive and other equitable relief, declaratory judgment, attorneys' fees and expenses, and pre- and post-judgment interest. (ECF No. 56 ¶¶ 355-87.)

Defendants move to dismiss the Complaint on several grounds: (1) Count I fails because Plaintiffs allege that they did not satisfy the Plan's Neutral Rule (thus rendering them benefits ineligible) and Plaintiffs fail to allege to state facts providing a basis to conclude that the Board abused its discretion; (2) Counts II through IV fail because they are “repackaged” ERISA wrongful denial of benefit claims; (3) Counts II and III also fail because Plaintiffs had adequate notice and full review of their claims; (4) Count IV fails because Plaintiffs fail to allege sufficient facts establishing key elements of material misrepresentation, breach of review duties, or bearing any plausible connection to hiring and oversight of Neutral Physicians; (5) Count V fails because Plaintiffs do not allege facts amounting to fiduciary misconduct; (6) Plaintiffs cannot recover against the Trustees or the Commissioner individually; and (7) the Commissioner is not a fiduciary. (ECF No. 69-1 at 2-5.)

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6)

A motion asserted under Rule 12(b)(6) “test[s] the legal sufficiency of a complaint.” It does not “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (quoting Edwards v. City of Goldsboro, 178 F.3d 231 243 (4th Cir. 1999)). Accordingly, a “Rule 12(b)(6) motion should only be granted if, after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff's favor, it appears certain that the plaintiff cannot prove...