Anthony v. Int'l Ass'n of Machinists & Aerospace Workers Dist. Lodge 1, Civil Action No. 17–1249 (ABJ)

296 F.Supp.3d 92

Gary ANTHONY, Plaintiff,

v.INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS DISTRICT LODGE 1, et al., Defendants.

Civil Action No. 17–1249 (ABJ)

United States District Court, District of Columbia.

Signed November 6, 2017

Christopher G. Mackaronis, Stone Mattheis Xenopoulos & Brew, P.C., Raymond Charles Fay, Fay Law Group, PLLC, Washington, DC, for Plaintiff.

Linda M. Martin, Willig, Williams & Davidson, Philadelphia, PA, for Defendants.

MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge

Plaintiff Gary Anthony brought this action against defendants District Lodge 1, a union affiliated with the International Association of Machinists and Aerospace Workers ("IAM"), and the International Association of Machinists and Aerospace Workers National Pension Fund ("IAM National Pension Fund" or the "Plan"). Compl. [Dkt. # 1]. He alleges that defendants violated the terms of the Plan and breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. , when they failed to include him as a participant under the Plan and denied him benefits. Id.

In Count I, plaintiff alleges that defendants violated the terms of the Plan by denying him eligibility as directed by the "documents and instruments governing the Plan." Compl. ¶¶ 13–16. In Count II, plaintiff alleges that defendants owed him a fiduciary duty under ERISA to "observe and follow the governing terms" of the Plan, and that they breached those duties. Id. ¶¶ 17–21.

District Lodge 1 has moved to dismiss both counts pursuant to Federal Rule of Civil Procedure 12(b)(6). It argues that plaintiff has failed to allege sufficient facts to establish that District Lodge 1 is a fiduciary as defined under the statute, see Def's Mot. to Dismiss & Supporting Mem. of Law [Dkt. # 11] ("Def's Mot."), and the Court agrees.

But because fiduciary status is only a required element under Count II, the Court will only grant defendant's motion to dismiss as to Count II and it will deny the motion as to Count I. Therefore, plaintiff's ERISA claim for violation of the terms of the Plan will go forward.

BACKGROUND

Defendant District Lodge 1 is a union affiliated with the International Association of Machinists and Aerospace Workers. Compl. ¶ 3. According to the complaint, plaintiff was employed as an "Organizer" by District Lodge 1 from May 2004 until January 2012, when he became a "Grand Lodge Representative," a position he continues to hold. Id. ¶ 2. IAM National Pension Fund is a multi-employer defined benefit pension plan, and District Lodge 1 is a "Contributing Employer" to the fund. Id. ¶¶ 3–4, 8.

District Lodge 1 and the trustees of the IAM National Pension Fund executed a series of written Participation Agreements, which governed the union's participation in the Plan. Compl. ¶ 9. Plaintiff alleges that the agreements "obligated" defendants to provide coverage and make contributions for all District Lodge 1 employees, including plaintiff. Id.

Plaintiff sought participant status under the Plan in order to gain eligibility for the payment of pension benefits, but he was unsuccessful. See Compl. ¶ 12. He exhausted "all internal Plan remedies," including the appeals process, during which the Plan's appeals committee determined that plaintiff was not eligible to participate in the IAM National Pension Fund. Id. ; see also Ex. A to Pl.'s Opp. to Def.'s Mot. [Dkt. # 14–1] ("Denial Letter").

On June 26, 2017, plaintiff filed this action, Compl., and on August 24, 2017, defendant IAM National Pension Fund filed an Answer. Answer [Dkt. # 10]. On the same day, defendant District Lodge 1 filed a motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Def.'s Mot. The motion is fully briefed.¹

STANDARD OF REVIEW

"To survive a [ Rule 12(b)(6) ] motion to dismiss, 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 , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted); accord Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In Iqbal , the Supreme Court reiterated the two principles underlying its decision in Twombly : "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." 556 U.S. at 678, 129 S.Ct. 1937. And "[s]econd, only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 679, 129 S.Ct. 1937.

A claim is facially plausible when the pleaded factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678, 129 S.Ct. 1937. "The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. A pleading must offer more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action," id. , quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955, and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.

When considering a motion to dismiss under Rule 12(b)(6), the Court is bound to construe a complaint liberally in the plaintiff's favor, and it should grant the plaintiff "the benefit of all inferences that can be derived from the facts alleged." Kowal v. MCI Commc'ns Corp. , 16 F.3d 1271, 1276 (D.C. Cir. 1994). Nevertheless, the Court need not accept inferences drawn by the plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the Court accept plaintiff's legal conclusions. See id. ; Browning v. Clinton , 292 F.3d 235, 242 (D.C. Cir. 2002). In ruling upon a motion to dismiss for failure to state a claim, a court may ordinarily consider only "the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice." Gustave–Schmidt v. Chao , 226 F.Supp.2d 191, 196 (D.D.C. 2002) (citations omitted).

ANALYSIS

I. Defendant's motion to dismiss Count II will be granted.

Count II alleges that District Lodge 1 is liable for plaintiff's loss of benefits because it participated in the decision determining that he was ineligible to participate in the Plan. Under ERISA:

[A] person is a fiduciary with respect to a plan to the extent (i) he 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) he 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) he has any discretionary authority or discretionary responsibility in the administration of such plan.

29 U.S.C. § 1002(21)(A).

"A fiduciary within the meaning of ERISA must be someone acting in the capacity of manager, administrator, or financial adviser to a ‘plan.’ " Pegram v. Herdrich , 530 U S. 211, 222, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000). " ‘[O]nly when fulfilling certain defined functions, including the exercise of discretionary authority or control over plan management or administration,’ does a person become a fiduciary under [ § 1002(21)(A) ]." Lockheed Corp. v. Spink , 517 U.S. 882, 890, 116 S.Ct. 1783, 135 L.Ed.2d 153 (1996), quoting Siskind v. Sperry Ret. Program, Unisys , 47 F.3d 498, 505 (2d Cir. 1995). "Employers ... can be ERISA fiduciaries," see Pegram , 530 U.S. at 225, 120 S.Ct. 2143, "[b]ut, obviously, not all of [an employer's] business activities involve[ ] plan management or administration." Varity Corp. v. Howe , 516 U.S. 489, 498, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996) (finding that the employer defendant's acts could only be actionable if the acts were made in the employer's fiduciary capacity).

The complaint contains the conclusory allegation that "defendant District Lodge 1 owed a fiduciary duty to [p]lantiff" and that it breached its fiduciary duties through its "failure and refusal ... to act in accordance with the documents and instruments governing the Plan." Compl. ¶¶ 18, 20. Plaintiff also claims, (although in Count I), that "[t]he actions of [d]efendants District Lodge 1 and the IAM National Pension Fund alleged herein in denying eligibility and benefits to [p]laintiff Anthony are contrary to the documents and instruments governing the Plan, in breach of their fiduciary obligations." Id. ¶ 15. But the Court need not accept a plaintiff's legal conclusions as true when considering a motion to dismiss. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ; see also Strumsky v. Wash. Post Co. , 922 F.Supp.2d 96, 104 (D.D.C. 2013) ("[C]onclusory allegations that a person was acting as a fiduciary are not sufficient"). The complaint identifies District Lodge 1 as a "Contributing Employer," see Compl. ¶¶ 3, 8, but it is devoid of any allegations that the union exercised any authority or control over the management or administration of the Plan or its assets.

In his opposition, plaintiff argues that he has "met the modest pleading requirement to allege that the involvement of Lodge 1 in the decision excluding him from participation in the Pension Fund and eligibility for benefits constitutes a breach of fiduciary duty under ERISA." Pl.'s Opp. at 3–4. But there are no allegations in the complaint describing District Lodge's involvement in plaintiff's eligibility determination. Plaintiff simply alleges that he sought participant status from the Plan, and that he "exhausted all internal Plan remedies to ... be eligible for the payments of pension benefits." Compl. ¶ 12.

In support of his opposition, plaintiff provides the Court with the denial letter he received from IAM...