Central States, Southeast & Southwest Areas Health & Welfare Fund Ex Rel. Bunte v. Health Special Risk, Inc. , 756 F.3d 356 ( 2014 )

Case: 13-10705 Document: 00512673844 Page: 1 Date Filed: 06/23/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 23, 2014
No. 13-10705
Lyle W. Cayce
Clerk
CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS HEALTH
AND WELFARE FUND, an Employee Welfare Benefit Plan, by Arthur H.
Bunte, Jr., a Trustee thereof, in his representative capacity,
Plaintiff – Appellant,
v.
HEALTH SPECIAL RISK, INCORPORATED; MARKEL INSURANCE
COMPANY; FEDERAL INSURANCE COMPANY; ACE AMERICAN
INSURANCE COMPANY,
Defendants – Appellees.
Appeal from the United States District Court
for the Northern District of Texas
Before BARKSDALE, CLEMENT, and OWEN, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
In this insurance coverage dispute, Plaintiff—a large ERISA provider—
seeks a declaration that Defendants—three independent, non-ERISA
insurance providers—are bound by the terms of the ERISA plan and primarily
liable for injuries sustained by individuals covered by the parties. The district
court granted Defendants’ motion to dismiss for failing to seek equitable relief
under ERISA § 502(a)(3). We affirm.
FACTS AND PROCEEDINGS
Plaintiff Central States, Southeast and Southwest Areas Health and
Welfare Fund (“Central States”) is a large ERISA Plan, providing health and
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welfare benefits to members of the Teamsters Union and their families. Eleven
individuals insured by Central States (the “insureds”) were injured while
participating in various activities. In addition to having insurance from
Central States, all eleven members were also covered by insurance policies
from either Markel Insurance Company, Federal Insurance Company, or Ace
American Insurance Company—none of which are an ERISA plan. Defendant
Health Special Risk, Inc. (“HRS”) is the third-party administrator for each of
the independent insurance companies (collectively with HRS, “Defendants”)
and is responsible for administering the claims under their various policies.
The underlying dispute is whether Central States or the Insurer
Defendants are primarily responsible for the medical bills that resulted from
their insureds’ injuries. At the time of their injury, the insureds were covered
both as dependents of Central States plan members and by Defendants.
Central States paid the claims directly to the medical care providers and
sought reimbursement from the Defendants, who refused payment on the
grounds that their policies only provided “excess accidental injury coverage,”
making them only secondarily liable once the injureds’ primary coverage was
exhausted. Central States claims that the Insurer Defendants provide
overlapping coverage, and are therefore the primary providers under their
coordination of benefits (“COB”) provision of its ERISA Plan.
A. First Complaint
Central States’ original complaint sought (1) declaratory judgment that
the Defendants were liable to reimburse Central States for the medical
expenses they had paid to their injured members, (2) restitution under ERISA 1
for those same expenses, and (3) an equitable lien / constructive trust under
1 The original complaint does not specify precisely which section of ERISA Count II
was based upon, but it is seems clear that all ERISA claims are based on § 502(a)(3).
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ERISA § 502(a)(3) against the Defendants’ funds to recoup those expenses.
Defendants moved to dismiss Central States’ complaint under Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim on the grounds that Central
States failed to allege equitable relief as required by ERISA § 502(a)(3).
Section 502(a)(3) provides:
(a) Persons empowered to bring a civil action
A civil action may be brought . . .
(3) by a participant, beneficiary, or fiduciary
(A) to enjoin any act or practice which violates any
provision of this subchapter or the terms of the plan,
or
(B) to obtain other appropriate equitable relief
(i) to redress such violations or
(ii) to enforce any provisions of this subchapter or
the terms of the plan;
29 U.S.C. § 1132.
The district court granted Defendants’ motion, but allowed Central
States to amend their complaint.
B. Amended Complaint
Central States’ amended complaint contained the original three counts—
with minor alterations—plus three additional counts: (1) declaratory judgment
to declare liability and enjoin Defendants from violating the provisions of the
COB; (2) subrogation rights against Insurer Defendants to allow Central
States to sue in their stead; and (3) unjust enrichment under federal common
law. All six counts—while phrased in terms of equitable relief—requested
monetary payment from the Defendants. Upon another 12(b)(6) motion by
Insurer Defendants, the district court dismissed five of Central States’ claims
for failing to seek equitable relief under ERISA § 502(a)(3). Central States’
remaining state law subrogation claim initially survived, but was dismissed
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following Defendants’ motion for reconsideration on the grounds that it was
conflict preempted by ERISA § 514(a)’s civil enforcement scheme. 2
C. Appeal
Central States essentially raises three issues on appeal. First, Central
States asks this court to find that § 502(a)(3) allows the type of equitable relief
requested in the amended complaint. Second, Central States requests that
this court recognize a federal common law cause of action for unjust
enrichment to fill the gap in ERISA’s statutory scheme. Finally, Central States
argues that it successfully stated a claim for declaratory judgment—without a
request for money—under § 502 and is entitled to a determination of liability.
Because these claims all lack merit, we affirm.
STANDARD OF REVIEW
Dismissal for failure to state a claim is reviewed de novo, applying the
standard used to review a dismissal under Rule 12(b)(6) of the Federal Rules
of Civil Procedure. Hart v. Hairston, 343 F.3d 762, 763–64 (5th Cir. 2003). “To
survive a 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 (2009) (internal quotation marks and citation
omitted). “Factual allegations must be enough to raise a right to relief above
the speculative level, on the assumption that all the allegations in the
complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007) (internal citations and footnote omitted).
2Central States does not appeal the district court’s determination that its state law
subrogation claims are preempted by ERISA.
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DISCUSSION
I. Central States failed to state a claim for equitable relief as
required by ERISA § 502(a)(3).
Central States seeks to bind Defendants—with whom it has no
contractual or business relationship—to its ERISA Plan’s COB provisions,
which provide that Defendants are primarily responsible for paying the
insureds’ medical bills. As quoted supra, the statutory authority for this civil
action is found in ERISA § 502(a)(3), which provides that:
A civil action may be brought . . .
(3) by a participant, beneficiary, or fiduciary
(A) to enjoin any act or practice which violates any
provision of this subchapter or the terms of the plan, or
(B) to obtain other appropriate equitable relief
(i) to redress such violations or
(ii) to enforce any provisions of this subchapter or
the terms of the plan;
29 U.S.C § 1132.
As the Plan fiduciary, Central States is entitled to bring an action to
“enforce . . . the terms of the plan.” Id. However, the text of ERISA makes it
clear that the relief sought must be “appropriate equitable relief,” not legal
relief. Ever since its decision in Mertens v. Hewitt Associates, 508 U.S. 248,
256 (1993), the Supreme Court has repeatedly defined “appropriate equitable
relief” as “those categories of relief that were typically available in equity.” Id.
at 255, 256; see also Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356, 361
(2006). Equitable relief is contrasted with “legal relief,” which constitutes
claims seeking “nothing other than compensatory damages.” Mertens, 508 U.S.
at 255. The classic form of purely legal relief is money damages. Id.
To comply with the requirements of § 502(a)(3), the six counts of Central
States’ amended complaint are framed as equitable relief. Despite this, each
count actually requests monetary damages:
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Count 1, Declaratory Judgment (Unpaid and Future
Expenses): requesting this court “declare the liability of the
Defendants to pay, unpaid and future medical expenses” and
“declare that the COB provisions of Central States Plan may and
should be enforced against the Defendants, by requiring the
Defendants pay any unpaid present and future covered medical
expenses”;
Count 2, Declaratory Judgment: requesting an
“injunction requiring the Defendants to pay covered medical
expenses”;
Count 3, Restitution of Payments Made: requesting “an
order of equitable relief requiring them to make restitution to
Central States”;
Count 4, Equitable Lien / Constructive Trust:
requesting “[g]rant equitable relief . . . in the form of an equitable
lien and imposition of a constructive trust . . . [and] to enforce
Central States’ equitable liens in the identifiable” amounts
claimed owed by each Insurer Defendant;
Count 5, Subrogation: requesting “an order of equitable
relief, in the form of money compensation”;
Count 6, Unjust Enrichment, Federal Common Law:
requesting “[g]rant of money judgment.”
Simply framing a claim as equitable relief is insufficient to escape a
determination that the relief sought is legal. Great-West Life & Annuity Ins.
Co. v. Knudson, 534 U.S. 204, 210-11 (2002) (“an injunction to compel the
payment of money past due under a contract, or specific performance of a past
due monetary obligation, was not typically available in equity.”); Amschwand
v. Spherion Corp., 505 F.3d 342, 348 n.7 (5th Cir. 2007) (“attempts to
recharacterize a desired § 502(a)(3) remedy as a purely equitable form of relief,
like an injunction, have been consistently rejected”), overruled on other
grounds by Gearlds v. Entergy Services, Inc., 709 F.3d 448, 452 (5th Cir. 2013).
But while “[a]lmost invariably . . . suits seeking (whether by judgment,
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injunction, or declaration) to compel the defendant to pay a sum of money to
the plaintiff are suits for ‘money damages’ . . . since they seek no more than
compensation for loss resulting from the defendant’s breach of legal duty,”
Knudson, 534 U.S. at 210, there are some instances in which equitable relief
can result in monetary compensation for a plaintiff. CIGNA Corp. v. Amara,
131 S. Ct. 1866, 1880 (2011) (“But the fact that this relief takes the form of a
money payment does not remove it from the category of traditionally equitable
relief.”). Consequently, Central States’ claims for monetary relief will be
considered equitable only if they fit into one of the few categories of “typical
equitable relief” that allow for money damages.
A. Case Law on Monetary Damages as Equitable Relief.
We begin our analysis with a review of the Supreme Court’s
jurisprudence on equitable monetary relief. Following the Supreme Court’s
determination in Mertens that § 502(a)(3) provided only the types of equitable
relief typically available in courts of equity, the Court was confronted with the
question of whether claims for injunctive relief or restitution—which sought
monetary compensation—were the types of relief typically available in equity.
In Great-West, an ERISA-plan fiduciary sued the plan beneficiary to recover
funds the beneficiary had won in a state court tort action and placed in a
Special Needs Trust. The fiduciary was entitled to these funds under a
provision of the plan granting it “‘the right to recover from the [beneficiary]
any payment for benefits’ paid by the Plan that the beneficiary is entitled to
recover from a third party.” 534 U.S. at 207. The suit was brought under
§ 502(a)(3), requesting the funds under theories of injunctive relief and
restitution.
Plaintiff’s “injunctive relief” argument—framed as defendant’s “failure
to reimburse the plan”—was perfunctorily dismissed by the Court, which held
that “an injunction to compel the payment of money past due under a contract,
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or specific performance of a past due monetary obligation, was not typically
available in equity.” Id. at 210-11. The restitution argument merited more
attention. Although restitution was typically available in equity, “not all relief
falling under the rubric of restitution is available in equity.” Id. at 212.
Rather, there were two types of restitution: legal restitution and equitable
restitution. Id. Whether restitution is legal or equitable depends on (1) “the
basis for the plaintiff’s claim” and (2) “the nature of the underlying remedies
sought.” Id. at 213.
As the names suggest, only equitable restitution is available as
“appropriate equitable relief” under § 502. Typically, equitable restitution was
sought in the form of a constructive trust or equitable lien, where “money or
property identified as belonging in good conscience to the plaintiff could clearly
be traced to particular funds or property in the defendant’s possession.” Id.
Although the Great-West Court found that the funds sought were
“particular”—funds from a tort judgment held in a trust—they were not in
defendant’s possession because he did not control the trust. Consequently, “the
basis for petitioners’ claim is not that respondents hold particular funds that,
in good conscience, belong to petitioners, but that petitioners are contractually
entitled to some funds for benefits that they conferred.” Id. at 214. The nature
of the restitution sought, then, was “not equitable—the imposition of a
constructive trust or equitable lien on particular property—but legal—the
imposition of personal liability for the benefits that they conferred upon
respondents.” Id. Because § 502(a)(3) does not allow claims for legal relief, the
suit was dismissed for failure to state a claim.
The Supreme Court refined this rule in Sereboff. 547 U.S. 356. As in
Great-West, the fiduciary sought reimbursement of settlement funds received
by the beneficiary from a third party. But unlike Great-West—where the funds
were controlled by a non-defendant trust fund—the funds in Sereboff were
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placed in an investment trust controlled by the defendant-beneficiary. The
Court reviewed the requirements under § 502(a)(3), reiterating that equitable
restitution “sought to impose a constructive trust or equitable lien on
particular funds or property in the defendant’s possession.” Id. at 362 (internal
quotation marks omitted). Because the funds were controlled by defendant,
the “possession” requirement was satisfied and Great-West did not
automatically preclude recovery. Id. at 362-63.
Although the Court determined that the “nature of the remedy sought”
was equitable—the funds were controlled by the defendant and could be
recovered from a particular fund—plaintiff still had to establish that the “basis
of its claim” was equitable as well. Id. at 363. Analogizing to the “familiar rule
of equity that a contract to convey a specific object even before it is acquired
will make the contractor a trustee as soon as he gets a title to the thing,” id. at
363 (citing Barnes v. Alexander, 232 U.S. 117 (1914) (Holmes, J.) (internal
alterations omitted)), the Court found the beneficiary’s promise under his
ERISA plan to reimburse the fiduciary “impose[d] on that portion [of the
settlement fund] a constructive trust or equitable lien,” allowing them to follow
a portion of the recovery into the beneficiary’s hands. Id. at 364. Because the
ERISA plan imposed the modern equivalent of a constructive trust or equitable
lien on the funds, the claimed basis was equitable. Id. As both the basis of the
claim and nature of the remedy were equitable, the Court allowed the fiduciary
to recover monetary relief through equitable restitution. Id. at 369.
In CIGNA, 131 S. Ct. 1866, the Court considered whether monetary
damages were typically available in equity for breach of fiduciary duty.
Finding that “[e]quity courts possessed the power to provide relief in the form
of monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty,”
the Court allowed the plan beneficiary to recover monetary damages against
the plan fiduciary. Id. at 1880. In so holding, the Court emphasized (1) that a
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plan fiduciary is typically treated as a trustee under ERISA, id. at 1879, (2)
that historically “this kind of monetary remedy against a trustee . . . was
‘exclusively equitable,’” id. at 1880, and (3) the fact that “the defendant in this
case, unlike the defendant in Mertens, is analogous to a trustee makes a critical
difference,” id. Because of these specific intricacies of trust law, the monetary
relief awarded fell within the scope of “appropriate equitable relief” under
§ 502(a)(3). Id.
The final major case on-point is US Airways, Inc. v. McCutchen, 133 S.
Ct. 1537 (2013). Like Great-West and Sereboff, McCutchen involved an action
by a fiduciary for reimbursement under the terms of the ERISA plan, which
required “full reimbursement” for medical expenses paid out of any funds
received by the beneficiary. McCutchen countered with two equitable
defenses: (1) US Airways could not recover from his funds unless he over-
recovered; and (2) US Airways was required to contribute its fair share to the
funds expended to attain his recovery. The Supreme Court rejected
McCutchen’s defenses. Relying on the logic of Sereboff, the Court ruled that
the ERISA plan promised “full reimbursement,” and therefore created “the
modern-day equivalent of an equitable lien by agreement.” Id. at 1546
(internal quotation marks omitted). Because enforcing the plan “means
holding the parties to their mutual promises,” allowing equitable defenses to
trump its terms would be “at odds with the parties’ expressed commitments.”
Id.
There are several takeaways from these cases. First, ERISA § 502(a)(3)
only allows claims for the types of equitable relief typically available in equity.
Money damages are not typically available in equity. See Mertens, 508 U.S. at
255 n.5 (“The dissent expresses its certitude that ‘the statute clearly does not
bar such a suit.’ That, of course, is not the issue. The issue is whether the
statute affirmatively authorizes such a suit.”) (internal citations omitted).
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Second, for money damages to be available under a theory of restitution, both
the basis of the claim and the nature of the relief must be equitable. Third,
money damages are available against a fiduciary for breach of duty. And
finally, general principles of equity will not defeat the terms of a plan because
principles of contract bind the parties to their mutual promises.
B. Central States’ Claims Request Relief Not Typically Available in
Equity.
Because Central States requests money damages, it must demonstrate
that its claims fall within “those categories of relief that were typically
available in equity.” Mertens, 508 U.S. at 256. In its attempt to carry this
burden, Central States offers three arguments: (1) under Supreme Court and
Fifth Circuit precedent, Defendants’ “have become constructive trustees” or
“fiduciaries” of Central States’ assets; (2) it should be allowed to exercise its
subrogation rights under the plan; and (3) other circuits have found an ERISA
plan’s COB provisions enforceable against private insurers. Defendants argue
that all six counts should be dismissed for requesting impermissible legal
relief. We agree with Defendants.
1. Central States’ Requested Remedies are Not “Appropriate
Equitable Relief.”
Central States argues that the trend in Supreme Court precedent
following Great-West counsels in favor of allowing equitable recovery of
monetary damages against another insurer. The argument proceeds as
follows: (1) the Court’s purportedly renewed focus on the terms of the plan—
particularly its rulings in Sereboff and McCutchen—make the terms of the plan
the equivalent of a constructive trust or equitable lien, creating a duty on
behalf of Defendants; and (2) because of the duty owed, Defendants are
trustees and fiduciaries of the Plan. This relationship creates the basis for
equitable relief. The nature of the remedy sought—under Central States’
argument—is established by the Court’s movement away from the traditional
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tracing requirement for restitution. Having eliminated that requirement,
Central States argues that the nature of the relief is equitable because it can
identify the precise amount owed from Defendants by proving the amount it
expended to satisfy the insureds’ claims. Because Defendants owe this money
to Central States under the Plan—to which Defendants are purportedly
bound—Central States argues that the constructive trust / equitable lien
created by the Plan’s terms establish that it is entitled to those funds and
Defendants’ failure to reimburse the Plan is a breach of their duties as trustees
and fiduciaries. This analysis is without merit.
a. Basis of Claim
Central States attempts to establish that the basis of their claim is
equitable by arguing that the Court in Sereboff “sharpened its focus on plan
provisions” and found the ERISA plan enforceable in equity because “it is
indistinguishable from an action to enforce an equitable lien established by
agreement.” Sereboff, 547 U.S. at 368. Central States then turns to
McCutchen, which it cites for the proposition that “equitable defenses cannot
override the clear terms of a plan.” See 133 S. Ct. at 1543. Taken together,
Central States argues that the Court has established that Plan rules should be
enforced against Defendants—who are not parties to the ERISA Plan—
because “the plan’s rights would not be diminished by equitable defenses” and
“when the express contract term contradicts the equitable rule, the agreement
must govern.” Because the Plan’s COB provisions “make the Defendants
primary [insurer] for the medical payments that Central States paid on behalf
of its covered dependents, and its reimbursement provisions grant Central
States the right to seek reimbursement from any responsible party,” the terms
of the Plan establish the type of equitable lien required to allow recovery of
monetary damages in equity.
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This joint-reading of Sereboff and McCutchen is far too broad. While
Sereboff certainly focused on the terms of the plan, it did not establish that
plan provisions generally are indistinguishable from equitable liens, thereby
creating a universal basis for equitable claims. Nor did McCutchen establish
that plan provisions trump either § 502(a)(3)’s requirement that relief be
equitable or general contract rules regarding who is bound by an agreement.
In Sereboff, the plan provision—between the beneficiary and the fiduciary—
was analogous to a contract to convey a specific res once it was received. 547
U.S. at 363-64; see also ACS Recovery Servs., Inc. v. Griffin, 723 F.3d 518, 527-
28 (5th Cir. 2013) (“Under . . . Sereboff . . . the most important consideration is
not the identity of the defendant, but rather that the settlement proceeds are
still intact, and thus constitute an identifiable res that can be restored to its
rightful recipient.”) (emphasis removed). This contract “created a lien” on the
specific assets to be conveyed under the contract. Sereboff, 547 at 364. It was
this provision of the plan—i.e., the contract between beneficiary and fiduciary
to convey specified funds upon receipt—that created the equitable lien which
served the basis for the plaintiff’s claim. Id. No such basis exists for Central
States’ COB provision. ERISA-plan provisions do not create constructive
trusts and equitable liens by the mere fact of their existence; the liens and
trusts are created by the agreement between the parties to deliver assets. And
McCutchen—rather than establishing the primacy of ERISA plan provisions
over the requirements of equity—only enforced the plan provisions in order to
“hold[] the parties to their mutual promises.” 133 S. Ct. at 1546; see also id.
(finding that the court must “declin[e] to apply rules—even if they would be
‘equitable’ in a contract’s absence—[that are] at odds with the parties’
expressed commitments”). McCutchen was about the enforcement of contracts,
and cannot be read as eliminating the “appropriate equitable relief”
requirement of § 502(a)(3).
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The progression of Central States’ argument next attempts to establish
that Defendants are both trustees and fiduciaries of Central States’ Plan.
These arguments are without merit. Central States admits that Defendants
have not been named trustees of the Plan. Instead, they describe Defendants
as “constructive trustees,” defined as those who “hold[] property in constructive
trust for the benefit of the beneficiary and [are] under a duty to account for the
funds [they] hold in constructive trust.” None of Central States’ cases
demonstrates that Defendants meet this description. Defendants are not
similar to the plan fiduciaries in CIGNA, “whom ERISA typically treats as a
trustee,” 131 S. Ct. at 1879; nor have they entered into the equivalent of a
contract to hold assets as a trustee, as in Sereboff, 547 U.S. at 363-64. Their
only plausible rationale for establishing a “duty to account” for the funds they
hold was their reliance upon Sereboff and McCutchen to establish that
Defendants are bound by the provisions of their plan. As discussed, that
argument fails, and so does the argument that Defendants are constructive
trustees.
Central States also argues that Defendants are fiduciaries of the ERISA
fund. ERISA “provides that not only the persons named as fiduciaries by a
benefit plan, but also anyone else who exercises discretionary control or
authority over the plan’s management, administration, or assets” is a
fiduciary. Mertens, 508 U.S. at 251 (internal citations omitted). “Fiduciaries
are assigned a number of detailed duties and responsibilities, which include
‘the proper management, administration, and investment of [plan] assets, the
maintenance of proper records, the disclosure of specified information, and the
avoidance of conflicts of interest.’” Id. at 251-52. Central States argues that
Defendants “exercised discretion” over the Plan’s assets by refusing to
reimburse Central States for its medical bills, thereby “forc[ing] Central States
to expend funds to pay medical bills which were not its responsibility to pay.”
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“Discretion” is defined as “individual judgment; the power of free decision-
making.” Black’s Law Dictionary 534 (9th ed. 2009). The Defendants cannot
be said to exercise “the power of free decision-making” over Central States’
assets. It is obvious that Defendants have no say in the management of the
Plan, its administration, or its assets, as they could no more have ordered the
claims paid than ordered them denied. Further, they have no duties or
responsibilities to the Plan: there is no evidence that they maintain records for
Central States, disclose information on its behalf, check for conflicts of interest,
or have any say in the investment of assets. It cannot even be said that
Defendants “forced” Central States to pay these claims; that decision was made
without consulting Defendants. Central States challenges Defendants’
decision not to reimburse them after the fact, which is distinct from “forcing”
payment in the first instance.
Because Central States cannot establish that the basis of their claim is
equitable, we affirm the district court’s dismissal of Counts II-IV for failure to
state a claim. For the sake of completeness, we will also address the nature of
the remedy sought.
b. Nature of Remedy
Central States argues that Sereboff marks the beginning of the Court’s
“first step away from the tracing requirements that historically afflicted the
imposition of an equitable lien,” and claims—without citation—that the courts
have since “moved away from any tracing requirement, indicating that tracing
identifiable funds is not essential to a claim for an equitable lien.” It also relies
on CIGNA for the uncontroversial proposition that monetary damages are
available in equity for breach of fiduciary duty. Taken together, Central States
believes these precedents render its inability to identify a particular fund
irrelevant to the question of whether it seeks an equitable remedy under
§ 502(a)(3).
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Central States’ analysis is incorrect. Contrary to its assertion, Sereboff
did not move away from any tracing requirement; it distinguished between
equitable liens by agreement—which do not require tracing—and equitable
liens by restitution—which do. Since Central States admits that it is “not
suing to enforce a lien by agreement,” the requirement that the res be traceable
is still very much intact (to the extent it seeks a lien by restitution). Central
States cannot trace its claim to a particular fund. Unlike Sereboff, Great-West,
and McCutchen, there is no “specifically identified . . . particular fund[] distinct
from [Defendants’] general assets.” Sereboff, 547 U.S. at 364. As the Court
stated in Great-West, the basis for petitioners’ claim is that “petitioners are
contractually entitled to some funds for the benefits that they conferred. The
kind of restitution that petitioners seek, therefore, is not equitable . . . but
legal—the imposition of personal liability for the benefits that they conferred
upon respondents.” 534 U.S. at 214. The funds in question are simply the
general assets of Defendants, which were not received from, and have not been
promised to, Central States. Any relief sought as restitution is not equitable.
Finally, the relief provided in CIGNA was limited to the breach of a
fiduciary’s duty, and its holding was explicitly limited to that situation.
Because Central States cannot plausibly establish that Defendants were either
fiduciaries or trustees, this theory of equitable relief fails.
2. Central States’ ERISA-based Subrogation Rights
Although Central States has affirmatively waived its state-law
subrogation claims, it asserts a right to bring subrogation claims on behalf of
its beneficiaries under § 502(a)(3), seeking “equitable relief, in the form of
money compensation.” It argues “[t]he reasons why an ERISA plan’s
subrogation provisions should be enforced under § 502(a)(3) are the same
reasons which support the enforcement of COB provisions.” But ERISA plan
beneficiaries—like Central States itself—can only bring claims for
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“appropriate equitable relief.” Whether Central States can exercise its
subrogation rights to sue under § 502(a)(3) is irrelevant if it does not request
appropriate equitable relief. Because Central States’ subrogation claims are
identical to its claims as a fiduciary, we affirm the district court’s dismissal of
Count V.
II. There is No Gap in ERISA’s Enforcement Scheme Requiring a
Federal Common Law Claim for Unjust Enrichment.
Central States argues that if this court fails to find a substantive right
to equitable restitution under § 502(a)(3) to enforce its COB provisions, then
federal common law must step in to fill a “gap” in the ERISA statutory scheme,
as a failure to do so would leave Central States with no means of enforcing the
COB provisions of its policy. While federal common law may be applied to fill
“minor gaps in ERISA’s text, as long as the federal common law rule created is
compatible with ERISA’s policies . . . federal courts do not have authority under
ERISA to create federal common law when that statute specifically and clearly
addresses the issue before the Court.” Coop. Benefit Adm’rs, Inc. v. Ogden, 367
F.3d 323, 329-30 (5th Cir. 2004) (internal quotation marks, alterations, and
footnotes omitted). If a statute specifically and clearly addresses the issue,
there is no gap to fill, and “a court’s general opinion as to what remedies might
further ERISA’s underlying policies will not be sufficient to overcome the
words of its text regarding the specific issue under consideration.” Id. at 330
(internal quotation marks and footnotes omitted).
Central States’ argument is foreclosed by the text of § 502(a)(3). As this
court stated in Ogden, a fiduciary’s “entitlement to a federal common law
remedy is dependent on our determining that a gap exists in ERISA’s text
regarding [the fiduciary’s] right, as a plan fiduciary, to bring an action for a
money judgment enforcing a participant’s contractual reimbursement
obligation.” Id. No gap exists.
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Congress, in drafting § 502(a)(3)(B) to allow only “equitable
relief,” specifically contemplated the possibility of extending to
plan fiduciaries a right to sue a participant for money damages and
chose instead to limit fiduciaries’ remedies to those typically
available in equity. As ERISA’s text “specifically and clearly
addresses” the issue whether CBA, as a plan fiduciary, has a right
to pursue a claim for legal relief against Ogden, there is no “gap”
in ERISA on this question and thus no basis for granting CBA a
federal common law remedy.
Id. at 332. The only difference between this case and Ogden is that Central
States is seeking reimbursement from a non-ERISA insurance plan, not a
beneficiary. Section 502(a)(3)’s language restricting Central States to suits in
equity applies with equal force to Plan beneficiaries as it would to non-ERISA
insurance companies. There is no principled reason to distinguish between the
two.
Central States’ objection that it will be left without a remedy is
unavailing. It has whatever “appropriate equitable relief” it can bring to
enforce the provisions of the Plan; the only limitation is that they have to be
equitable, which is Congress’s intent, not a gap. But even assuming that
Central States is correct about the unavailability of other remedies to enforce
its COB rights against non-ERISA plans, 3 “vague notions of a statute’s ‘basic
purpose’ are nonetheless inadequate to overcome the words of its text
regarding the specific issue under consideration.” Id. at 331.
Because there is no gap for the federal common law to fill, we affirm
dismissal of Count VI.
3Central States has abandoned its argument that its state-law subrogation rights
under the ERISA Plan allow it to enforce its beneficiaries’ provisions against the Defendants,
agreeing with the district court’s determination that those rights are preempted by ERISA.
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III. Count I does not adequately state a claim for equitable relief
under ERISA § 502.
Central States argues that Count I should not be dismissed because its
“request for declaratory judgment does not amount to a demand for payment”
and “seeks no reimbursement from the Defendants.” It argues that Count I
seeks only a “declaration of rights against Defendants regarding coverage for
unpaid present and future bills.”
Central States’ claim is demonstrably false. Count I does not request a
declaratory judgment, but rather asks this court to “requir[e] defendants to
pay any unpaid present and future covered medical expenses.” And as Central
States asserts in its brief, “a declaration that the Defendants are responsible
for future medical bills of the Insureds would support Central States’ claim for
equitable restitution for amounts already paid by Central States.” Count I
does not seek a declaration of liability under conflicting plans, but a judgment
through which it can continue to pursue its goal of receiving monetary
compensation not authorized by § 502(a)(3).
Further, to the extent that Central States is seeking a prospective
declaration of payment obligations—which would allow the parties to
determine who must pay first in the event of future injury—the issue is not
ripe for review. The complaint contains no allegation that any of the eleven
insureds have sustained new injuries creating a dispute over who must pay
their claims. Absent a concrete injury, there is no controversy, and such a
claim is not justiciable. Miss. State Democratic Party v. Barbour, 529 F.3d 538,
541 (5th Cir. 2008) (“Because plaintiffs failed to demonstrate that their claims
involve an actual case or controversy, the claims were not justiciable and
should not have been addressed by the district court.”).
We affirm the district court’s dismissal of Count I for failure to state a
claim under § 502(a)(3).
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CONCLUSION
For the reasons stated, the judgment is AFFIRMED.
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