Stanley v. George Wash. Univ.

394 F.Supp.3d 97

Melissa STANLEY, individually and as representative of a class of participants and beneficiaries on behalf of The George Washington University Retirement Plan for Faculty and Staff and The George Washington University Supplemental Retirement Plan, Plaintiff,

v.The GEORGE WASHINGTON UNIVERSITY, et al., Defendants.

Civil Action No. 18-878 (JDB)

United States District Court, District of Columbia.

Signed July 15, 2019

Andrew W. Ferich, Steven A. Schwartz, Pro Hac Vice, Chimicles Schwartz Kriner & Donaldson-Smith LLP, Haverford, PA, Jason Samuel Rathod, Nicholas A. Migliaccio, Migliaccio & Rathod LLP, Washington, DC, Franklin D. Azar, Pro Hac Vice, Paul R. Wood, Pro Hac Vice, Azar & Associates, Aurora, CO, for Plaintiff.

Brian D. Netter, Matthew Allyn Waring, Michelle Nicole Webster, Mayer Brown LLP, Washington, DC, Nancy G. Ross, Pro Hac Vice, Mayer Brown LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION

JOHN D. BATES, United States District Judge

Melissa Stanley brings this putative class action against her former employer, The George Washington University,¹ alleging breaches of fiduciary duty in violation of the Employee Retirement Income Security Act of 1974 ("ERISA") §§ 502(a)(2), (a)(3) (codified at 29 U.S.C. §§ 1132(a)(2), (a)(3) ). Pending before the Court is [21] GW's motion to dismiss. GW argues that Stanley lacks standing to sue because she signed a general release of claims against the University. Stanley responds that her claims fall into an express exclusion in the general release preserving claims for vested benefits under her retirement plan. For the reasons stated below, the Court finds that Stanley has released her fiduciary breach claims against GW under the terms of the release. Because this Court lacks jurisdiction over released claims, the Court will grant GW's motion and dismiss the complaint.

BACKGROUND

I. Statutory Background

ERISA is a "comprehensive and reticulated" statute aimed at protecting participants in private employee retirement plans. Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 361, 100 S.Ct. 1723, 64 L.Ed.2d 354 (1980) ; see 29 U.S.C. § 1001(a) – (b). Today, most private retirement plans are " ‘defined contribution plan[s]’ or ‘individual account plan[s].’ " See LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 250 n.1, 128 S.Ct. 1020, 169 L.Ed.2d 847 (2008) (citation omitted). Such plans "promise[ ] the participant the value of an individual account at retirement, which is largely a function of the amounts contributed to that account and the investment performance of those contributions." Id.

ERISA authorizes participants to bring various "types of civil actions" to protect their interests. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 139, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) ; see ERISA § 502(a), 29 U.S.C. § 1132(a). Some of those actions "focus upon specific areas," or particular types of ERISA violations, while others are " ‘catchalls,’ providing ‘appropriate equitable relief’ for ... injuries caused by violations that § 502 does not elsewhere adequately remedy." Varity Corp. v. Howe, 516 U.S. 489, 512, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). Two "specific" and one "catchall" action are relevant to Stanley's claims.

The first specific type of action, brought pursuant to ERISA § 502(a)(1)(B), empowers a participant to "recover benefits due to [her] under the terms of [her employee benefit] plan, to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future benefits under the terms of the plan." ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). Section 502(a)(1)(B) suits, or plan-based suits, provide a remedy "with respect to the interpretation of plan documents and the payments of claims," Varity, 516 U.S. at 512, 116 S.Ct. 1065, and may be used "to recover accrued benefits" due under the plan, Russell, 473 U.S. at 147, 105 S.Ct. 3085. Most circuit courts, including the D.C. Circuit, have held "that a participant [is required to] exhaust ... administrative remedies" internal to the plan before making a plan-based claim under § 502(a)(1)(B). LaRue, 552 U.S. at 258–59, 128 S.Ct. 1020 (Roberts, C. J., concurring); see Commc'ns Workers of Am. v. AT & T, 40 F.3d 426, 431 (D.C. Cir. 1994) ("[P]laintiffs seeking a determination pursuant to ERISA of rights under their pension plans ‘must ... exhaust available administrative remedies ... before they may bring suit ....’ "). "The exhaustion doctrine effectuates Congress's purpose in requiring that benefit plans provide for administrative review procedures by ensuring" that participants use "internal remedial procedures" when making claims for benefits under their plans. Stephens v. Pension Benefit Guar. Corp., 755 F.3d 959, 964–65 (D.C. Cir. 2014) ; ERISA § 503, 29 U.S.C. § 1133.

The second specific type of action, set forth in ERISA § 502(a)(2), permits participants and others to sue plan administrators for violations of fiduciary duties set forth in ERISA § 409(a), 29 U.S.C. § 1109(a). Section 409(a), in turn, "impose[s] [duties] on fiduciaries ... ‘relat[ing] to the proper management, administration, and investment of fund assets,’ with an eye toward ensuring that ‘the benefits authorized by the plan’ are ultimately paid to participants and beneficiaries." LaRue, 552 U.S. at 253, 128 S.Ct. 1020 (quoting Russell, 473 U.S. at 142, 105 S.Ct. 3085 ). Fiduciaries that have breached their duties in violation of section 409(a) are "liable to make good to such plan any losses to the plan resulting from each such breach." ERISA § 409(a). Because section 502(a)(2) suits, or statute-based suits, are brought on behalf of a pension plan, they "do[ ] not provide a remedy for individual injuries distinct from plan injuries." LaRue, 552 U.S. at 256, 128 S.Ct. 1020. Nevertheless, because a fiduciary breach may affect only some subset of participants in a defined contribution plan, an individual plan participant may sue on behalf of the plan to "recover[ ]for fiduciary breaches that impair[ed] the value of plan assets in [her] individual account." Id.

The "catchall" provision, section 502(a)(3), permits suits to "enjoin any act or practice which violates any provision of this subchapter [of ERISA] or the terms of the plan, or ... to obtain other appropriate equitable relief ... to redress such violations." ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3). "Appropriate" equitable relief is "relief that [was traditionally] available in equity," Mertens v. Hewitt Assocs., 508 U.S. 248, 256, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993) (emphasis omitted), and that is not otherwise available through a section 502(a)(1)(B) suit for "benefits due ... under the terms of the plan," Varity, 516 U.S. at 515, 116 S.Ct. 1065 (alteration omitted); see Russell, 473 U.S. at 144, 105 S.Ct. 3085 ; Boster v. Reliance Standard Life Ins. Co., 959 F. Supp. 2d 9, 30 (D.D.C. 2013) ("[C]ourts in this Circuit have generally followed the view of the majority of circuits that a breach of fiduciary [duty] claim under § [502](a)(3) cannot stand when a plaintiff has an adequate remedy for her injuries under § [502](a)(1)(B)." (citation omitted)).

Suits under ERISA sections 502(a)(2) and (a)(3) are meaningfully distinct from those brought via section 502(a)(1)(B). Section 502(a)(2) and (a)(3) claims are generally brought in conjunction "to enforce statutory ERISA rights," whereas section 502(a)(1)(B) claims are brought to enforce "contractual rights created by the terms of a benefit plan." Stephens, 755 F.3d at 965 (second emphasis added); see id. at 964–67 (distinguishing ERISA claims "alleging a statutory violation" from "claims for benefits" under "the terms of [employee] benefit plans"); see also Zipf v. AT & T, 799 F.2d 889, 891–94 (3d Cir. 1986). And as the D.C. Circuit has held, participants must administratively exhaust claims asserting contractual rights, but not statutory rights,² before filing suit in federal court. Moreover, while section 502(a)(2) suits are brought in a representative capacity, so that recovery runs to the plan, section 502(a)(1)(B) remedies "run[ ] directly to the injured [participant or] beneficiary." Varity, 516 U.S. at 512, 116 S.Ct. 1065.

Because of these critical distinctions, the Supreme Court has cautioned that claims properly brought under section 502(a)(1)(B) may not necessarily also be brought under sections 502(a)(2) and (a)(3). See Varity, 516 U.S. at 515, 116 S.Ct. 1065 (noting that section 502(a)(1)(B) claims are "outside the framework of [section 502(a)(2) claims]" and that section 502(a)(3) covers only injuries that "§ 502 does not elsewhere ... remedy"); see also LaRue, 552 U.S. at 258–59, 128 S.Ct. 1020 (Roberts, C.J., concurring) ("The significance of the distinction between a § 502(a)(1)(B) claim and one under § 502(a)(2) is not merely a matter of picking the right provision to cite in the complaint. Allowing a § 502(a)(1)(B) action to be recast as one under § 501(a)(2) might permit plaintiffs to circumvent safeguards for plan administrators that have developed under § 502(a)(1)(B).").

With these background principles in mind, the Court turns to the relevant facts and procedural history.

II. Facts and Procedural History³

Stanley is a former GW employee who participates in two of the University's ERISA-regulated retirement plans—The George Washington University Retirement Plan for Faculty and Staff and The George Washington University Supplemental Retirement Plan (collectively, the "Plans"). Compl. [ECF No. 1] ¶¶ 17, 29. The Plans are "defined contribution, individual account ... employee benefit pension plans." Id. ¶¶ 17, 21. As the designated plan administrator, GW is the ERISA fiduciary responsible for selecting and managing the investment options provided to participants under the Plans. Id. ¶¶ 31, 34; see 29 U.S.C. § 1002(16)(A)(i). Stanley currently has a "vested account balance in the [Plans]." Compl. ¶ 29.

In 2016, for reasons unrelated to the present suit,...