United States District Court, M.D. Louisiana
MICHAEL D. POE ET AL.
UNITED ASSOCIATION OF JOURNEYMAN AND APPRENTICES OF THE PLUMBING AND PIPEFITTING INDUSTRY OF THE UNITED STATES OF AMERICA AFL-CIO LOCAL 198 HEALTH AND WELFARE FUND ET AL.
RULING AND ORDER
A. JACKSON, JUDGE UNITED STATES DISTRICT COURT
the Court is the United Association of Journeyman and
Apprentices of the Plumbing and Pipefitting Industry of the
United States of America AFL-CIO Local 198 Union Health and
Welfare Fund and the Local 198 Board of Trustees'
(collectively, "Defendants") Motion to
Dismiss Plaintiffs' Complaint Pursuant to FRCP 12(b)(6).
(Doc. 19). Oral argument is not necessary. For the
reasons stated below, the court GRANTS in
part and DENIES in part Defendants'
worked as employees for the Plumbers and Steamfitters Local
No. 106 ("Local 106"), a union located in Lake
Charles, Louisiana. (Doc. 1 at p. 11). Local 106 maintained
the Local 106 Health and Welfare Fund ("106 Fund"),
a trust fund established in Louisiana for the specific
purpose of providing ancillary benefits to its numerous Local
106 members. (Id.) Under the terms of the 106 Fund,
Local 106 members were provided Health Reimbursement Accounts
("HRAs"). (Id.) As part of Local 106
employees' compensation, contractors made monetary
contributions to the HRAs on behalf of each employee while
Local 106 was in existence. (Id.) All
employer/contractor contributions were deposited into
individual employee HRAs for the purpose of paying the
medical expenses of individual employees in retirement.
January of 2014, Local 106 merged with Plumbers and
Steamfitters Local No. Local 198 ("Local 198"),
which also had a Health and Welfare Fund ("Local 198
Fund"). (Doc. 1 at p. 12). The health and welfare funds
of both entities remained separate. (Id.) However,
in November of 2014, the entities began to consider merging
the Local 106 and Local 198 Funds. A study prepared by a
consulting firm revealed that the Local 198 Fund had a
deficit of $330, 762, while the Local 106 Fund had net assets
totaling $4, 536, 316. At a board meeting in December of
2014, the business manager for Local 198 assured the Trustees
of Local 106 that the Local 106 members would be able to
maintain their health reimbursement accounts when the plans
merged. (7c?.) By 2015, the Local 106 Fund had grown to ten
million dollars in assets. At that time, a majority of the
trustees negotiating the merger voted that five million
dollars would be paid out to Local 106 members, while the
remaining funds would be transferred to the Local 198 Fund.
The funds were distributed to Local 106 members through their
contend that at the time of the merger, Local 198 had not
established HRAs for its preexisting members. (Doc. 1 at p.
15). The new Plan document for the new Local 198 Plan, which
governed pre-existing Local 198 members and former Local 106
members, provided that Local 106 members' HRA account
balances were to be carried over to the UA Local 198 Plan.
However, Plaintiffs assert that the attorneys who drafted the
Plan also included language indicating that the Board of
Trustees of Local 198 reserved the "right to amend or
terminate all or any part of the HRA at any time for any
reason," despite earlier representations to Local 106
trustees. In July of 2017, the Local 198 Board of Trustees
voted to terminate the HRAs for all Local 198 members. This
decision only affected former Local 106 members, because
Local 198 members who joined the union prior to the merger
did not have HRA accounts.
12(b)(6) motion to dismiss tests the sufficiency of a
complaint against the legal standard set forth in Rule 8,
which requires "a short and plain statement of the claim
showing that the pleader is entitled to relief."
Fed.R.Civ.P. 8(a)(2). "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) (quoting Bell Ail. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). "Determining whether a
complaint states a plausible claim for relief [is] ... a
context-specific task that requires the reviewing court to
draw on its judicial experience and common sense."
Id. at 679. "[F]acial plausibility" exists
"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. at
678 (citing Twombly, 550 U.S. at 556). Hence, a
complaint need not set out "detailed factual
allegations," but something "more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action" is required. Twombly, 550 U.S.
Claims Based on 29 U.S.C. § 1132(a)(1)(b) (Count
29 U.S.C. § 1132(a)(1)(B), a plaintiff may bring a civil
action to (1) recover benefits due to him under the terms of
an ERISA plan, (2) enforce his rights under the plan, (3) or
clarify his rights to future benefits under the plan.
Plaintiffs assert that they are eligible for continuing HRA
benefits from the Local 198 Plan. (Doc. 1 at p. 18).
Defendants argue that this claim must be dismissed because
the plain language of the Plan documents indicates that Local
198 Trustees had the authority to terminate Plaintiffs'
HRA benefits at any time for any reason. (Doc. 19-1 at p. 7).
In their opposition, Plaintiffs agree with this assertion and
now seek to amend their complaint to remove or otherwise
dismiss claims arising under 29 U.S.C. § 1132(a)(1)(B).
Given that both parties agree on this issue, Plaintiffs'
claims under 29 U.S.C. § 1132(a)(1)(B), as alleged in
Count I of the complaint, are dismissed.
Claims Based on 29 U.S.C. § 1132(a)(2) (Count
seek dismissal of Plaintiffs' claim under §
1132(a)(2), which provides that "[a] civil action may be
brought by the Secretary, or by a participant, beneficiary or
fiduciary for appropriate relief under section 1109 of this
title." Section 1109 provides:
(a) Any person who is a fiduciary with respect to a plan who
breaches any of the responsibilities, obligations, or duties
imposed upon fiduciaries by this subchapter shall be
personally liable to make good to such plan any losses to the
plan resulting from each such breach, and to restore to such
plan any profits of such fiduciary which have been made
through use of assets of the plan by the fiduciary, and shall
be subject to such other equitable or remedial relief as the
court may deem appropriate, including removal of such
fiduciary. A fiduciary may also be removed for a violation of
section 1111 of this title.
(b) No fiduciary shall be liable with respect to a breach of
fiduciary duty under this subchapter if such breach was
committed before he became a fiduciary or after he ceased to
be a fiduciary.
allege that Defendants breached their fiduciary duties by
retaining money earned exclusively by former Local 106
members for workers who were Local 106 members prior to the
merger of the two unions. (Doc. 1 at p. 18). Defendants
assert that this claim must be dismissed because §
1132(a)(2) only addresses breaches of fiduciary duties that
harm the Plan as a whole. (Doc. 19-1 at p. 17). Defendants
claim that not only are Plaintiffs' claims not made on
behalf of the Plan, but also, on the contrary, that ...