Molla v. Gerdau Ameristeel, US, Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

GRANT MOLLA,

on behalf of the Gerdau

Ameristeel US 401(k) Retirement

Plan, himself, and all others

similarly situated,

Plaintiff,

v. Case No. 8:22-cv-2094-VMC-SPF

GERDAU AMERISTEEL, US, INC.,

and GERDAU BENEFITS PLANS

ADMINISTRATIVE COMMITTEE,

Defendants.

______________________________/

ORDER

This matter comes before the Court upon consideration of

Defendants Gerdau Ameristeel US, Inc., and the Gerdau

Benefits Plans Administrative Committee’s Motion to Dismiss

(Doc. # 32), filed on December 7, 2023. Plaintiff Grant Molla

filed a response to the Motion on January 19, 2024. (Doc. #

39). For the reasons set forth below, the Motion is granted.

I. Background

Plaintiff is a participant in the Gerdau Ameristeel US

401(k) Retirement Plan (“Plan”). (Doc. # 1 at ¶ 8). On

September 9, 2022, plaintiff filed suit on behalf of the Plan,

himself, and all others similarly situated against Gerdau

Ameristeel US, Inc. and the Gerdau Benefits Plans

Administrative Committee (“Committee”). (Doc. # 1). Plaintiff

alleges that defendants are fiduciaries of the Plan and that

they breached their fiduciary duties of prudence in violation

of the Employee Retirement Income Security Act of 1974

(“ERISA”). (Id.). Specifically, plaintiff asserts that

defendants “cost the Plan and its participants millions of

dollars” “by caus[ing] the Plan to pay unreasonable and

excessive fees for recordkeeping and other administrative

services.” (Id. at ¶¶ 8, 12, 135-39).

Shortly after plaintiff filed his complaint, the parties

jointly filed a motion to stay the proceedings pending

exhaustion of administrative remedies. (Doc. # 12). While

plaintiff did not necessarily believe that exhaustion was

necessary, he agreed to comply with the “mandatory, pre-suit

administrative claim exhaustion procedure” outlined in the

Plan’s governing document. (Id. at ¶¶ 3-4). On October 1,

2022, the Court stayed the case pending exhaustion of

administrative remedies. (Doc. # 13).

On November 13, 2024, the parties jointly moved to lift

the stay. (Doc. # 23). The parties informed the Court that

the claim review process was complete and that “the retirement

plan committee considered and timely denied Plaintiff’s

claim,” as well as his appeal. (Id. at ¶ 7). The Court granted

the motion and reopened the case. (Doc. # 24).

On December 7, 2023, defendants moved to dismiss the

complaint. (Doc. # 32). Plaintiff responded on January 19,

2024. (Doc. # 39). The Motion is now ripe for review.

II. Legal Standard

On a motion to dismiss pursuant to Rule 12(b)(6), this

Court accepts as true all the allegations in the complaint

and construes them in the light most favorable to the

plaintiff. Jackson v. Bellsouth Telecomms., 372 F.3d 1250,

1262 (11th Cir. 2004). Further, the Court favors the plaintiff

with all reasonable inferences from the allegations in the

complaint. Stephens v. Dep’t of Health & Human Servs., 901

F.2d 1571, 1573 (11th Cir. 1990). But,

[w]hile a complaint attacked by a Rule 12(b)(6)

motion to dismiss does not need detailed factual

allegations, a plaintiff’s obligation to provide

the grounds of his entitlement to relief requires

more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action

will not do. Factual allegations must be enough to

raise a right to relief above the speculative

level.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal

citations omitted). Courts are not “bound to accept as true

a legal conclusion couched as a factual allegation.” Papasan

v. Allain, 478 U.S. 265, 286 (1986). The Court must limit its

consideration to well-pleaded factual allegations, documents

central to or referenced in the complaint, and matters

judicially noticed. La Grasta v. First Union Sec., Inc., 358

F.3d 840, 845 (11th Cir. 2004).

III. Analysis

Defendants assert that plaintiff’s complaint must be

dismissed for a single reason: the complaint does not allege

that plaintiff exhausted his administrative remedies or that

the Committee denied his claim, nor asserts that the Court

should overturn the Committee’s decision. (Doc. # 32 at 1).

Plaintiff counters that he is not required to plead exhaustion

when the parties do not dispute that he exhausted his

administrative remedies. (Doc. # 39 at 1). Of course, the

complaint did not allege exhaustion because plaintiff filed

his complaint before engaging in the administrative claim

review process. (Doc. ## 1, 12). The parties do not dispute

that plaintiff has now exhausted his administrative remedies.

(Doc. # 32 at 8; Doc. # 39 at 1).

Plaintiff seeks to bring a class action pursuant to

Sections 409 and 502 of ERISA, 29 U.S.C. §§ 1109, 1132, for

breaches of fiduciary duties. (Doc. # 1 at ¶ 1). “[A]

participant, beneficiary or fiduciary” can bring a civil

action “for appropriate relief under [S]ection 1109.” 29

U.S.C. § 1132(a)(2). Section 1109 provides for liability for

breaches of fiduciary duties, stating in relevant part:

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.

29 U.S.C. § 1109(a). ERISA requires that “a fiduciary . . .

discharge his duties with respect to a plan solely in the

interest of the participants and beneficiaries and . . . for

the exclusive purpose of: (i) providing benefits to

participants and their beneficiaries; and (ii) defraying

reasonable expenses of administering the plan.” 29 U.S.C. §

1104(a)(1)(A). In doing so, a fiduciary must discharge his

duties “with the care, skill, prudence, and diligence under

the circumstances then prevailing that a prudent man acting

in a like capacity and familiar with such matters would use

in the conduct of an enterprise of a like character and with

like aims.” Id. § 1104(a)(1)(B).

“To state a claim for breach of fiduciary duty under

ERISA, the plaintiff must plead (1) that the defendant is a

plan fiduciary; (2) that the defendant breached its fiduciary

duty; and (3) that the breach resulted in harm to the

plaintiff.” Stengl v. L3Harris Techs., Inc., No. 6:22-cv-572-

PGB-LHP, 2023 WL 2633333, at *7 (M.D. Fla. Mar. 24, 2023)

(quoting Allen v. GreatBanc Trust Co., 835 F.3d 670, 678 (7th

Cir. 2016)) (internal quotation marks omitted); Lopez v.

Embry-Riddle Aeronautical Univ., Inc., No. 6:22-cv-1580-PGB-

LHP, 2023 WL 7129858, at *6 (M.D. Fla. July 12, 2023) (quoting

Allen, 835 F.3d at 678) (internal quotation marks omitted).

In addition to these elements, the Eleventh Circuit has

long required that plaintiffs exhaust administrative remedies

before pursuing a claim for either benefits under ERISA or

statutory violations of ERISA, unless use of the

administrative claims procedures would be futile. See Byrd v.

MacPapers, Inc., 961 F.2d 157, 160 (11th Cir. 1992) (“Eleventh

Circuit precedent requires employees to exhaust these

procedures before filing suit for benefits under ERISA. . .

. [However,] an exception should be recognized for pleading

impossibility of exhaustion in cases where claims procedures

prove futile.” (citations omitted)); Mason v. Continental

Grp., Inc., 763 F.2d 1219, 1227 (11th Cir. 1985) (holding

that “the district court did not err in holding that

plaintiffs must exhaust their remedies under the pension plan

agreement before they may bring their ERISA claims in federal

court”); Perrino v. S. Bell Tel. & Tel. Co., 209 F.3d 1309,

1315 n.6 (11th Cir. 2000) (“We apply this exhaustion

requirement to both ERISA claims arising from the substantive

provisions of the statute, and ERISA claims arising from an

employment and/or pension plan agreement.”); Id. at 1316

(“Thus far, our circuit has recognized exceptions only when

‘resort to administrative remedies would be futile or the

remedy inadequate,’ . . . . or where a claimant is denied

‘meaningful access’ to the administrative review scheme in

place . . . .” (citations omitted)).

The Eleventh Circuit has also explicitly required

exhaustion when a plaintiff pleaded a breach of fiduciary

duties under ERISA. E.g., Lanfear v. Home Depot, Inc., 536

F.3d 1217, 1223-24 (11th Cir. 2008) (“The exhaustion

requirement applies to complaints for breach of fiduciary

duty under ERISA regardless of whether the breach was

committed by a third-party administrator of the plan or the

employer.”). This requirement stems from ERISA’s dictate that

employers “establish procedures for reviewing employees’

claims under their employee benefits plans.” Byrd, 961 F.2d

at 160 (citing 29 U.S.C. § 1133).

Based on this requirement to exhaust administrative

remedies or establish a valid excuse for failing to do so, a

plaintiff asserting a claim under ERISA must plead exhaustion

of administrative remedies or that a court should excuse

exhaustion. See Garcon v. United Mutual of Omaha Ins. Co.,

779 F. App’x 595, 599 (11th Cir. 2019) (“[P]laintiffs in ERISA

actions must exhaust available administrative remedies before

suing in federal court, unless a district court excuses the

exhaustion requirement . . . . The plaintiff must plead that

he has exhausted available administrative remedies.”

(citations and internal quotation marks omitted)); Byrd, 961

F.2d at 160 (affirming dismissal of an ERISA claim based on

the holding “that the district court did not abuse its

discretion in finding that plaintiff failed to plead

exhaustion of administrative remedies or impossibility”);

Bolton v. Inland Fresh Seafood Corp. of Am., Inc., No. 1:22-

cv-04602-LMM, 2023 WL 9196735, at *3 (N.D. Ga. Dec. 5, 2023)

(“The Eleventh Circuit requires an ERISA plaintiff to

affirmatively plead exhaustion or an exception to the rule on

the face of the complaint.” (citations omitted)); In re

Managed Care Litig., 595 F. Supp. 2d 1349, 1353 (S.D. Fla.

Jan. 28, 2009) (“[T]he Eleventh Circuit requires [a]

plaintiff to affirmatively plead exhaustion on the face of

the complaint.” (citations omitted)).

In short, because plaintiffs must exhaust the applicable

administrative claims procedures, courts within the Eleventh

Circuit have dismissed claims for breach of fiduciary duties

under ERISA for failing to plead information related to

exhaustion of administrative remedies. E.g., Kennedy v.

Geronemus, No. 10-61153-CIV-ALTONAGA/Brown, 2010 WL 11549886,

at *1, *4 (S.D. Fla. Nov. 4, 2010) (dismissing a claim under

ERISA for breach of fiduciary duties when the plaintiffs

failed to allege futility and inadequacy of use of

administrative remedies in the complaint).

Plaintiff argues that this case is different from those

cited by defendants because the parties do not dispute that

plaintiff has now exhausted his administrative remedies.

(Doc. # 39 at 3-4). Based on the parties’ shared

understanding, plaintiff argues, the complaint need not plead

either that plaintiff exhausted his administrative remedies

or that plaintiff is excused from doing so. (Id.).

The Court disagrees. The parties’ mutual agreement that

plaintiff has exhausted his administrative remedies does not

excuse plaintiff from pleading this fact in his complaint.

Admittedly, the Eleventh Circuit does not appear to have

caselaw that explicitly addresses whether a plaintiff must

amend their complaint to plead exhaustion of administrative

remedies in this situation. In several cases within this

circuit in which the cases have been reopened upon exhaustion

of administrative remedies, however, parties have been

required to file an amended complaint stating that they have

exhausted their administrative remedies or have voluntarily

filed an amended complaint that pleads exhaustion. E.g., In

re Managed Care Litig., Nos. 00-1334-MD, 05-23326-CIV, 2009

WL 2004206, at *1 (S.D. Fla. July 9, 2009) (dismissing the

second amended complaint “without prejudice to re-file

concomitantly with the Plaintiffs’ ERISA allegations, if and

when the Plaintiffs plead that they have exhausted all

administrative remedies,” and stating that plaintiffs could

file a motion to reopen the case “to file another amended

complaint that satisfies the requirement to plead exhaustion

of administrative remedies with respect to the ERISA

claims”); In re Managed Care Litig., Nos. 00-1334-MD, 05-

23206-CIV, 2009 WL 2004209, at *1 (S.D. Fla. July 9, 2009)

(same); Lanfear v. Home Depot, Inc., No. 1:07-cv-197-ODE

(Doc. # 70) (N.D. Ga. Oct. 8, 2009) (granting plaintiffs leave

to file a third amended complaint following exhaustion of

administrative remedies).

These cases convince the Court that a plaintiff must

still plead exhaustion of administrative remedies even when

the parties do not dispute this fact. Therefore, to proceed

with this action, plaintiff must file an amended complaint

that pleads exhaustion of administrative remedies.

Accordingly, it is

ORDERED, ADJUDGED, and DECREED:

(1) Defendants Gerdau Ameristeel US, Inc., and the Gerdau

Benefits Plans Administrative Committee’s Motion to

Dismiss (Doc. # 32) is GRANTED.

(2) The complaint is DISMISSED without prejudice.

(3) If he wishes to proceed on his ERISA claim, Plaintiff

Grant Molla must file an amended complaint within 14

days from the date of this Order.

DONE and ORDERED in Chambers in Tampa, Florida, this 2nd

day of July, 2024.

VIRGINIA M. HERNANDEZ’COVINGTON

UNITED STATES DISTRICT JUDGE

11