Fairmont Insurance Brokers Ltd. v. HR Service Group d/b/a Infiniti HR

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

FAIRMONT INSURANCE BROKERS LTD., MEMORANDUM & ORDER

Plaintiff, 23-CV-8654 (NGG) (LB)

-against-

HR SERVICE GROUP D/B/A INFINITI HR,

Defendant.

NICHOLAS G. GARAUFIS, United States District Judge.

Plaintiff Fairmont Insurance Brokers Ltd. (“Fairmont’) sued De-

fendant HR Service Group d/b/a Infiniti HR (“Infiniti”) in the

Supreme Court of the State of New York, Kings County, alleging

breach of contract and other common law claims arising out of

Infiniti’s alleged breach of its agreement to “manage and admin-

ister” the health insurance benefits for Fairmont’s employees.

(Complaint (“Compl.”) (Dkt. 1-1) § 12.) Infiniti timely removed

the action to the United States District Court for the Eastern Dis-

trict of New York, invoking the court’s federal question

jurisdiction. (Notice of Removal (Dkt. 1) at § 4.) Infiniti now

moves to dismiss the Complaint pursuant to Federal Rule of Civil

Procedure 12(b)(6), on the ground that Fairmont’s claims are

completely preempted by the Employee Retirement Income Se-

curity Act of 1974 (“ERISA”). (Defendant’s Motion to Dismiss

(“Def’s Mot.”) (Dkt. 12-2) at 1-2.) Fairmont opposes the motion.

(Plaintiffs Memorandum of Law in Opposition (“Pl.’s Opp.”)

(Dkt. 13).) For the reasons that follow, Infiniti’s motion is DE-

NIED, Fairmont’s request for oral argument is DENIED as moot,

and this case is REMANDED to state court.

I. BACKGROUND!

On November 30, 2021, Fairmont and Infiniti entered into a “Cli-

ent Service Agreement” (the “Contract”) pursuant to which

Infiniti agreed “to provide professional employment services and

to enter into a co-employment or shared employment relation-

ship with regard to [Fairmont’s employees].” (Contract (Dkt. 12-

1) at ECF 4.) As defined by the Contract, “co-employment is a

relationship where Infiniti HR and [Fairmont] simultaneously

employ and share certain responsibilities for managing assigned

employees.” (d.)

One of those responsibilities includes an agreement by Infiniti to

“manage and administer” health insurance benefits for Fair-

mont’s employees. (Compl. { 6, 8, 11-12.) Specifically, Section

1(D) of the Contract provides, in pertinent part:

Infiniti HR will manage and administer group supple-

mental benefit plans covering Assigned Employees,

including all benefit claims, record keeping and compli-

ance. [Fairmont] hereby authorizes Infiniti HR to collect

insurance premiums for benefit plans from the Employ-

ees and remit them to the applicable insurance

carrier(s). Infiniti HR shall make timely payments for all

of its obligations under such benefit programs.

In accordance with its obligations under the Contract, Infiniti

contracted with NuAxess 2, Inc. (“NuAxess”) to provide a health

insurance plan (the “Plan”) for Fairmont’s employees. (Compl. 4

8: Insurance Plan (Dkt. 12-1) at ECF 14-91.)

1 The following facts are drawn from the Complaint and, for purposes of

this motion to dismiss, are assumed to be true. See Ark, Pub. Emps. Ret. Sys.

v. Bristol-Myers Squibb Co., 28 F.4th 343, 349 (2d Cir. 2022).

Eventually, Fairmont’s employees informed Fairmont that their

healthcare providers were declining treatment, citing non-pay-

ment by NuAxess as the reason for their refusal. (id. at | 9.)

Fairmont discovered that NuAxess had stopped paying

healthcare professionals, causing the medical bills of employees

to remain unpaid and accruing interest. Ud. at { 10.)

Fairmont filed the instant Complaint against Infiniti in Kings

County Supreme Court on October 23, 2023, alleging: (Count I)

breach of contract; (Count ID breach of fiduciary duties; (Count

II) negligence; and seeking (Count IV) a declaratory judgment.

(id. 20-38.) Specifically, Count I alleges that Infiniti breached

the Contract when it failed to “manage and administer health in-

surance benefits” for Fairmont’s employees; Count II alleges that

Infiniti breached its fiduciary duty “as clearly articulated in the

Contract” when it “fail[ed] to ensure that the [e]mployees re-

ceived the healthcare services they were entitled to under the

Contract”; Count III alleges that Infiniti acted negligently when

it “fail[ed] to provide the necessary oversight and management .

.. Land] ensure the timely processing and payment of medical

claims”; and Count IV seeks a declaratory judgment that:

[Infiniti] must cover, indemnify, and provide compen-

sation to [Fairmont’s employees] for all costs and losses

resulting from [Infiniti’s] breach of the Contract, breach.

of fiduciary duty, and/or negligence, including but not

limited to medical bills, interest accrued on unpaid med-

ical bills, and any other related financial and non-

financial losses incurred by the [e]mployees as a direct

result of [Infiniti’s} negligence and breaches.

[The court] affirm the rights of the [e]mployees to re-

ceive the healthcare benefits and services that they were

contractually entitled to under the Contract.

Ud. at {4 20-21, 25-26, 30-31, 35-36.)

According to the Complaint, the Contract requires Infiniti to

“maintain and administer’ health insurance benefits for Fair-

mont’s employees, and “once NuAxess stopped paying the

medical professionals, [Infiniti] had a duty to provide additional

coverage offerings.” (Id. 411.) In other words, “it was incumbent

upon [Infiniti], under the Contract, to ensure that health care

services for the [e]mployees were provided without interruption,

and to promptly address any issues that arose in the course of

fulfilling these obligations.” (id. § 15.) This included rectifying

“any financial burdens, expenses, or losses incurred by the

[e]mployees due to the disruption of their medical benefits.” (7d.

{ 16.)

Infiniti timely removed the action to this court on the basis of

federal question jurisdiction, asserting that Fairmont’s “action

arises under and is preempted by § 502(a) of [ERISAJ].” (Notice

of Removal at { 4.) Specifically, Infiniti argued that Fairmont

“was a participating employer in, and, thus, a fiduciary of,” an

ERISA-governed multiemployer plan, and, as a matter of law,

“TFairmont’s| claims in Counts I, II, and IV arise under [and are]

completely preempted by” ERISA Section 502(a). Ud. at 14 5-6.)

However, Infiniti stated that the court “should exercise supple-

mental jurisdiction over [Fairmont’s] claim in Count I of the

Verified Complaint, which does not arise under the laws of the

United States.” Ud. 4 11.)

Before the Court is Infinit’’s March 15, 2024 motion to dismiss

the Complaint in its entirety? pursuant to Federal Rule of Civil

Procedure 12(b)(6), on the ground that “ERISA preempt[s] all of

Fairmont’s state law claims.” (Def.’s Mot. at 4.)

2 Infiniti has apparently retreated from its initial argument, raised in its

Notice of Removal, that ERISA completely preempts only Counts IL, III, and

IV of the Complaint. (Notice of Removal at 4 6, 11.) Infiniti now asserts

that all four counts of the Complaint are completely preempted by ERISA.

(Def.’s Mot. at 1-2.)

Ii, LEGAL STANDARD

To survive a motion to dismiss under Rule 12(b) (6), “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 Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007)}.° “A claim has facial plausibility when

the plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the mis-

conduct alleged.” Id. A complaint must contain facts that do more

than present a “sheer possibility that a defendant has acted un-

lawfully.” Id. “Dismissal under Rule 12(b)(6) is therefore

appropriate only if it is clear from the face of the complaint. . .

that the plaintiffs claims are barred as a matter of law.” Michael

Grecco Prods., Inc. v. RADesign, Inc., 112 F.4th 144, 150 (2d Cir.

2024).

In deciding a motion to dismiss, the court accepts as true all fac-

tual allegations contained in the complaint and draws all

reasonable inferences in the plaintiff's favor. Lynch v. City of New

York, 952 F.3d 67, 74-75 (2d Cir, 2020). In addition to the com-

plaint, the court may consider “documents that are attached to

the complaint, incorporated in it by reference, integral to the

complaint, or the proper subject of judicial notice.” United States

v. Strock, 982 F.3d 51, 63 (2d Cir. 2020). “[W]here the complaint

relies heavily upon [a document’s] terms and effect,” such as a

contract, it is considered “integral” to the complaint. Chambers v.

Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). Although

the court is “not constrained to accept the allegations of the com-

plaint in respect of the construction of the [contract],” “any

contractual ambiguities” should be resolved in favor of the plain-

tiff. See Int’l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d

3 When quoting cases, unless otherwise noted, all citations and internal

quotation marks are omitted, and all alterations are adopted.

69, 72 (2d Cir. 1995). In the instant case, because the Contract

and Plan documents are either incorporated by reference in the

Complaint or are integral to the Complaint, the court considers

those documents in adjudicating Infinitis motion to dismiss.

Il. DISCUSSION

Infiniti moves to dismiss the Complaint on the grounds that

“ERISA preempt{s] all of Fairmont’s state law claims” and

“FRISA’s exclusive remedies do not provide a vehicle for Fair-

mont to obtain the relief it seeks.” (Def.’s Mot. at 4.) Specifically,

Infiniti argues that the Plan is an “employee welfare benefit plan”

governed by ERISA, that Fairmont’s claims “relate to” the Plan,

and that ERISA therefore preempts Fairmont’s state law claims.

(id. at 5-6.) At the same time, Infiniti asserts that Fairmont “le-

gally cannot replead its claims under ERISA.” (Id. at 4.) Instead,

“Fairmont’s employees’ right to seek relief is the sole appropriate

course of action.” (Def.’s Reply (Dkt. 14) at 8.) Thus, Infiniti ar-

gues, the court should not only dismiss Fairmont’s Complaint,

but should do so with prejudice because Fairmont cannot replead

its state law claims under ERISA. (Def.’s Mot. at 4.)

Fairmont opposes the motion, asserting, inter alia, that its claims

“do not derive from the rights and obligations” established by the

Plan, but rather, derive from Infiniti’s separate promise under the

Contract “to provide continuous medical coverage and timely

payments on behalf of [Fairmont’s] employees.” (Pl.’s Opp. at 8.)

Thus, Fairmont argues, its claims do not “relate to” any employee

benefit plan and are therefore not preempted by ERISA. Gd. at 8-

9.) Fairmont additionally argues that preemption would leave it

without a remedy as to Infiniti’s alleged breach of the Contract,

a result it contends would be contrary to “the statutory purpose

of ERISA.” (id. at 10-11.)

A. Applicable Law

The court has an independent obligation to assure itself of its

own jurisdiction. Arnold v. Lucks, 392 F.3d 512, 517 (2d Cir.

2004). “A civil claim filed in state court can only be removed to

federal court if the district court would have had original juris-

diction to hear the claim.” Montefiore Med. Ctr. v. Teamsters Local

272, 642 F.3d 321, 327 (2d Cir. 2011); 28 U.S.C. § 1441 (a). Fed-

eral courts have original jurisdiction over cases “arising under the

Constitution, laws, or treaties of the United States.” 28 U.S.C. §

1331 (also known as “federal question” jurisdiction). Typically, a

cause of action “arises under” federal law only “when the plain-

tiffs well-pleaded complaint raises issues of federal law.” Metro.

Life Ins. Co. vy. Taylor, 481 U.S, 58, 63 (1987). This means that

federal preemption, raised as a defense to the plaintiffs suit,

“does not appear on the face of a well-pleaded complaint, and,

therefore, does not authorize removal to federal court.” Id.

Express preemption “is one of the three familiar forms of ordi-

nary defensive preemption (along with conflict and field

preemption).” Wurtz v. Rawlings Co., LLC, 761 F.3d 232, 238 (2d

Cir. 2014). It occurs “when Congress withdraws specified powers

from the States by enacting a statute containing an express

preemption provision.” Id. “As an ordinary defensive preemption

claim, express preemption cannot support federal jurisdiction be-

cause it would not appear on the face of a well-pleaded

complaint.” id.

However, the Supreme Court has recognized an exception to the

well-pleaded complaint rule—the “complete preemption” doc-

trine—under which Congress “may so completely pre-empt a

particular area [of law] that any civil complaint raising this select

group of claims is necessarily federal in character.” Metro. Life,

481 U.S. at 63-64. In other words, “certain federal statutes have

such extraordinary preemptive force that state-law claims com-

ing within the scope of the federal statute are transformed, for

jurisdictional purposes, into federal claims—i.e., completely

preempted.” Sullivan v. Am. Airlines, Inc., 424 F.3d 267, 272 (2d

Cir. 2005). The Supreme Court has found only three statutes to

contain a complete preemption provision: Section 301 of the La-

bor Management Relations Act, 29 U.S.C. § 185, see Avco Corp.

y. Aero Lodge No. 735, 390 U.S, 557, 558-62 (1968); Sections 85

and 86 of the National Bank Act, 12 U.S.C. §§ 85-86, see Beneficial

Nat'l Bank v. Anderson, 539 U.S. 1, 7-11 (2003); and Section

502(a) of ERISA, 29 U.S.C. § 1132(a), see Metro. Life, 481 U.S.

at 65-66. “When a plaintiff raises such a completely preempted

state-law claim in his complaint, a court is obligated to construe

the complaint as raising a federal claim and therefore ‘arising un-

der’ federal law.” Sullivan, 424 F.3d at 272.

“ERISA is a comprehensive statute designed to promote the in-

terests of employees and their beneficiaries in employee benefit

plans.” Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137

(1990). The statute sets various uniform standards governing

“employee benefit plans,” which it defines as plans that are either

“an employee welfare benefit plan,” or “an employee pension

benefit plan,” or both. 29 U.S.C. § 1002(3). An employee welfare

benefit plan includes “any plan, fund, or program .. . established

or maintained by an employer . . . for the purpose of providing

[medical care or benefits] for its participants or their beneficiar-

ies.” Id. § 1002(1).

“The purpose of ERISA is to provide a uniform regulatory regime

over employee benefit plans.” Aetna Health Inc. v. Davila, 542

U.S. 200, 208 (2004). To that end, “ERISA provides for two types

of preemption: complete preemption under Section 502; and ex-

press preemption under Section 514.” Rubin v. Hodes, No. 18-CV-

7403 (SJF) (AKT), 2020 WL 132352, at *7 (S.D.N.Y. Jan. 13,

2020); see generally Wurtz, 761 F.3d at 238.

Section 514 provides that ERISA “shall supersede any and all

State laws’ insofar as they may now or hereatter relate to any

employee benefit plan.” 29 U.S.C. § 1144(a). This is ERISA’s ex-

press preemption provision: it displaces any state laws that

“relate to” employee benefit plans with “the federal common law

of ERISA.” Trustees of New York State Nurses Ass’n Pension Plan v.

White Oak Glob. Advisors, LLC, 102 F.4th 572, 598-600 (2d Cir.

2024); id. at 598 (discussing the various tests adopted by the Su-

preme Court to determine when a state law “relates to” an

employee benefit plan); see also id. at 600 (noting that “ERISA

express preemption, and its displacement of state contract law

with federal common law, does not create ‘arising under’ juris-

diction”).

Section 502(a) of ERISA provides plan participants, beneficiaries,

fiduciaries, employers, and certain other persons with specified

civil remedies to, among other things, recover benefits due under

their employee benefit plans, enforce rights under their plans, or

seek other plan-related relief authorized under that section. See

29 U.S.C. § 1132(a). This is ERISA’s complete preemption provi-

sion: according to the Supreme Court, “any state-law cause of

action that duplicates, supplements, or supplants the ERISA civil

enforcement remed[ies} [contained in Section 502(a)] conflicts

with the clear congressional intent to make the ERISA remedy

exclusive and is [completely] pre-empted.” Davila, 542 U.S. at

209. Section 502(a) is “one of those provisions with such extraor-

dinary pre-emptive power that it converts an ordinary state

common law complaint into one stating a federal claim for pur-

poses of the well-pleaded complaint rule.” Id. In other words,

“causes of action within the scope of the civil enforcement provi-

sions of § 502(a) are removable to federal court.” Id.

4 “State law” includes “all laws, decisions, rules, regulations, or other State

action having the effect of law, of any State.” 29 U.S.C. § 1144(c)(1),

The Supreme Court defined the contours of ERISA complete

preemption in Davila. There, participants in and beneficiaries of

separate employee benefit plans sued their respective plan ad-

ministrators under state law, in state court, alleging injuries

arising out of the administrators’ decision not to provide cover-

age for treatment recommended by their physicians. Davila, 542

U.S. at 204-05. The question before the Court was whether

ERISA completely preempted the state law claims. Id. at 204.

The Court noted that Section 502(a)’s enforcement mechanism

is “a distinctive feature of ERISA, and essential to accomplish

Congress’ purpose of creating a comprehensive statute for the

regulation of employee benefit plans.” Id. at 208. The civil en-

forcement provisions found in Section 502(a) “provide strong

evidence that Gongress did not intend to authorize other reme-

dies that it simply forgot to incorporate expressly.” Id. at 209

(emphasis in original). In other words, the enforcement provi-

sions listed in Section 502(a) are the exclusive remedy for rights

guaranteed by ERISA, and any state law cause of action that du-

plicates, supplements, or supplants those enforcement provisions

is completely preempted. Davila, 542. U.S. at 209.

The Court then assessed one of the Section 502(a) civil enforce-

ment provisions, Section 502(a)(1)(B). That subsection

provides:

A civil action may be brought—(1) by a participant or

beneficiary— .. . (B) to recover benefits due to him un-

der the terms of his plan, to enforce his rights under the

terms of the plan, or to clarify his rights to future bene-

fits under the terms of the plan.

29 ULS.C. § 1132(a)(1)(B). Applying that provision and the

preemption principles discussed above, the Court concluded that

if “an individual, at some point in time, could have brought his

claim under ERISA § 502(a)}(1)(B),” and “there is no other inde-

pendent legal duty that is implicated by a defendant’s actions,”

10

then the individual’s cause of action is completely preempted by

ERISA § 502(a)(1}(B). Davila, 542 U.S. at 210. Thus, because

the petitioners could have sought reimbursement for the denial

of their benefits pursuant to Section 502(a)(1)(B), and because

the complained-of actions did not violate legal duties independ-

ent of ERISA or the terms of the employee benefit plans at issue,

the Court held that ERISA completely preempted their state law

claims, fd. at 210-12.

Although Davila framed the two-part test in terms of Section

502(a)(1)(B), the Second Circuit has applied the test to Section

502(a) more broadly. See White Oak, 102 F.4th at 605-06 (con-

cluding that ERISA completely preempted trustees’ petition

because their claims were cognizable under ERISA § 502{a)(3)).

Thus, under Davila, “[a] claim falls within the scope of the ERISA

civil enforcement mechanism [and is completely preempted] if it

is brought (1) by an individual who, at some point in time, could

have brought [their] claim under ERISA § 502(a), and (2) there

is no other independent legal duty that is implicated by a defend-

ant’s actions.” Id. at 606. The first Davila prong is satisfied if the

plaintiff (a) “is the type of party who can bring a claim pursuant

to § 502(a)[] of ERISA; and (b) the actual claim asserted can be

construed as a colorable claim... pursuant to § 502(a)[].” Arditi

y. Lighthouse Intern., 676 F.3d 294, 299 (2d Cir. 2012); see White

Oak, 102 F.4th at 606. The Davila test “is conjunctive; a state-law

cause of action is [completely] preempted only if both prongs of

the test are satisfied.” Teamsters Local 272, 642. F.3d at 328.

The distinction between express and complete preemption is a

critical, though sometimes overlooked, aspect of ERISA preemp-

tion. State law claims which fall outside of the scope of Section

502(a), even if preempted by Section 514(a), are governed by

the well-pleaded complaint rule and are not removable under the

complete preemption doctrine. In other words, even if a state law

claim “relates to” an ERISA plan pursuant to Section 514(a), if

11

the claim cannot be construed as a cause of action under Section

502(a), complete preemption does not apply, and removal on

that basis is improper. Wurtz, 761 F.3d at 238 (noting that “com-

plete preemption can be the basis for federal subject-matter

jurisdiction, but express preemption cannot”); see White Oak, 102

F.4th at 600 (explaining that “ERISA express preemption, and its

displacement of state contract law with federal common law,

does not create ‘arising under jurisdiction. . . . for jurisdiction to

be proper, the [complaint] must state a cause of action contained

within ERISA or another federal statute”); Franchise Tax Bd. of

State of Cal. v, Constr. Laborers Vacation Tr. for S. Cal., 463 U.S.

1, 23-27 (1983) (holding that preemption under Section 514{a)

does not permit a defendant to remove a suit brought in state

court to federal court when the plaintiffs state claim does not fall

within the scope of Section 502{a)’s civil remedy provisions);

Metro. Life, 481 U.S. at 64 (stating that ERISA preemption under

§ 514(a) “without more, does not convert [a] state claim into an

action arising under federal law”); Lupo v. Human Affairs Int’,

Inc., 28 F.3d 269, 272-73 (2d Cir. 1994) (state law professional

malpractice claim against company hired by plaintiffs employer

to provide psychotherapy services deemed outside the scope of

Section 502(a)(1)(B) and therefore not removable); Dukes v.

U.S, Healthcare, Inc., 57 F.3d 350, 353-55 (3d Cir. 1995) (dis-

cussing this dynamic in depth).

B. Discussion

The parties appear to agree that the Plan is “an employee welfare

benefit plan” covered by ERISA. (Def.’s Mot. at 5; PL.’s Opp. at 5-

7.) While the parties dispute whether ERISA preempts Fairmont’s

state law claims, they do not separately address the questions of

express and complete preemption. (Def’s Mot. at 5-7; Pl.’s Opp.

at 8-10.)

In a case such as this, “complete preemption [is] crucial to the

existence of federal subject-matter jurisdiction,” Wurtz, 761 F.3d

12

at 239, “When the doctrine of complete preemption does not ap-

ply, but the plaintiffs state claim is arguably preempted under §

514(a), the district court, being without removal jurisdiction,

cannot resolve the dispute regarding preemption. It lacks power

to do anything other than remand to the state court where the

preemption issue can be addressed and resolved.” Dukes, 57 F.3d

at 355; Wurtz, 761 F.3d at 239 (concluding that ERISA did not

completely preempt plaintiffs’ claims and noting that, “in the ab-

sence of an alternative basis for subject-matter jurisdiction, it

would be inappropriate to reach the merits of the ordinary ex-

press preemption defense”); Sullivan, 424 F.3d at 277 (“Because

it follows from our holding [of no complete preemption] that the

district court lacked subject-matter jurisdiction over this case, we

have no occasion to consider the merits of [defendant’s] argu-

ment that the plaintiffs’... claims . . . are subject to ordinary

preemption.”). Thus, the court begins—and ends—its inquiry

with complete preemption.

1. ERISA Complete Preemption

A state law claim falls within the scope of Section 502(a) and is

completely preempted if it is “brought (1) by an individual who,

at some point in time, could have brought [their] claim under

ERISA § 502(a), and (2) there is no other independent legal duty

that is implicated by a defendant’s actions.” White Oak, 102 F.4th

at G06.

The first question is whether Fairmont is an entity “who, at some

point in time, could have brought [its] claim[s] under ERISA 8

502(a).” Id. To satisfy Davila prong one, Infiniti must establish

that: (a) Fairmont is the type of party who can bring a claim pur-

suant to Section 502(a), and (b) the actual claims asserted by

Fairmont can be construed as a colorable claim pursuant to Sec-

tion 502(a). Arditi, 676 F.3d at 299.

13

Infinit’s memorandum in support of its motion does not cite

Davila, much less apply its two-part test. (See Def.’s Mot.) Fair-

mont’s memorandum in opposition applies the Davila test as

originally articulated in that case, arguing that, because Fairmont

could not bring its claims under Section 502(a)(1)(B), its claims

are not preempted by ERISA. (See PL’s Opp. at 8-10.) But Fair-

mont does not discuss whether it could have brought its claims

under any other Section 502(a) enforcement provision. Infiniti

mentions Davila in its reply, arguing that, while Fairmont could

not bring its claims under Section 502(a)(1)(B), its employees

could, (Def.’s Reply at 1, 8.)

The analysis is further muddied by Infiniti’s apparent concession

that Fairmont is not the type of entity that could have brought its

claims under Section 502(a). In its opening memorandum, In-

finiti states that “ERISA’s exclusive remedies do not provide a

vehicle for Fairmont to obtain the relief it seeks,” urging the court

to dismiss the Complaint with prejudice because “Fairmont can-

not legally replead its claims under ERISA.” (Def.’s Mot. at 4.)

While Infiniti asserts elsewhere in its brief that Fairmont is “an

ERISA fiduciary,” it does not tether that argument to Davila or

Section 502(a). Ud. at 6 (citing 29 U.S.C. § 1002(21)(A)G@)).) In

response to Fairmont’s argument that Infiniti effectively con-

ceded Davila prong one, Infiniti asserts that “while Fairmont

cannot seek relief via ERISA because it is not an employee or

beneficiary covered by the Plan, its employees can do so.” (Def’s

Reply at 8 (emphases added).) Thus, Infiniti appears to admit

that Davila prong one is not satisfied.

Evidently, there is some confusion among the parties regarding

Davila’s first prong. As evidenced by the Second Circuit’s decision

in White Oak, the question is not whether the plaintiff could have

brought its claims under Section 502(a)(1)(B), but whether it

could have brought its claims under any of the enforcement pro-

visions contained within Section 502(a). White Oak, 102 F.4th at

14

606. Thus, while the parties appear to agree that Fairmont could

not bring its claims under Section 502(a)(1)(B) because it is nei-

ther a plan participant nor beneficiary, that is not the end of the

inquiry. Rather, the question is whether Fairmont could have

brought it claims under any of the civil enforcement remedies

listed in Section 502(a).

It is therefore irrelevant whether Fairmont’s employees could

state a claim under Section 502(a). The question under Davila is

not whether some other individual could have brought some

other claims under ERISA Section 502(a), but whether this plain-

tiff could have brought these claims under Section 502(a). To the

extent the parties limit their preemption analysis to Section

502(a)(1)(B), that reflects an incomplete understanding of the

law.

Although the court might read Infinitis papers as conceding

Davila prong one, it nevertheless proceeds to an application of

Davila and concludes that ERISA does not completely preempt

Fairmont’s claims.

a. Davila Prong One, Step One

Davila prong one, step one asks whether Fairmont is the type of

party that can bring a claim pursuant to Section 502(a). Arditi,

676 F.3d at 299. Section 502(a) provides that a civil action may

be brought by, among others, plan participants, beneficiaries, fi-

duciaries, employers, states, or the Secretary of Labor. See 29

U.S.C. § 1132{a). ERISA defines each of these terms.

Infiniti alleges that Fairmont is “an ERISA fiduciary insofar as it

sponsors the arrangement for the benefit of its eligible employees

and self-insures the benefits,” though it provides no support for

that conclusory allegation, nor does it tether that argument to the

Davila test. (Def.’s Mot. at 6 (citing 29 U.S.C. § 1002(21) (A)G)).)

Fairmont does not respond to Infinit?s argument, instead assert-

ing that it could not have brought its claims under Section

15

502(a)(1)(B), which allows for suit by plan participants and ben-

eficiaries only. (Pl.’s Opp. at 8.) Neither party addresses whether

Fairmont could have brought its claims under any other Section

502(a) enforcement provision. Nor is it this court’s obligation to

craft those arguments on the parties’ behalf. See Sands Harbor

Marina Corp. v. Wells Fargo Ins. Services of Oregon, Inc., 2013 WL

5295713, at *4 (E.D.N.Y. Sept. 18, 2013) (“It is not this Court’s

obligation to make a party’s arguments for it or fill in the blanks

on that party’s behalf.”); Chui v. Am. Yuexianggui of Li LLC, 2021

WL 4482656, at *3 (E.D.N.Y. July 26, 2021) (“The Court is not

responsible for developing arguments on a party’s behalf or ad-

dressing conclusory claims.”). Thus, because the parties appear

to agree that Fairmont is not a plan participant or beneficiary,

the court turns to the only remaining argument relevant to Davila

prong one: whether Fairmont is an “ERISA fiduciary.”

ERISA Section 1002(21)(A) provides, in relevant part:

[A] person is a fiduciary with respect to a plan to the

extent (i) [they] exercise[] any discretionary authority

or discretionary control respecting management of such

plan or exercise[] any authority or control respecting

management or disposition of its assets, . . . or (iii) [they

have] any discretionary authority or discretionary re-

sponsibility in the administration of such plan.

29 U.S.C. § 1002(21) (A). ERISA defines fiduciaries “in functional

terms of control and authority over the plan.” Mertens v. Hewitt

Assocs., 508 U.S, 248, 262 (1993) (emphasis in original). It “does

not describe fiduciaries simply as administrators of the plan, or

managers or advisers. Instead it defines an administrator, for ex-

ample, as a fiduciary only to the extent that [it acts] in such a

capacity in relation to a plan.” Pegram v. Herdrich, 530 U.S. 211,

225-26 (2000) (emphasis added). Thus, an entity may be a fidu-

ciary for ERISA purposes “because the plan documents explicitly

describe fiduciary responsibilities[,] or because that [entity]

16

functions as a fiduciary.” In re Polaroid ERISA Litigation, 362 F.

Supp. 2d 461, 472 (S.D.N.Y. 2005). While an ERISA fiduciary

may wear “two hats,” for example, as employer and fiduciary,

“the fiduciary with two hats [must] wear only one at a time, and

wear the fiduciary hat when making fiduciary decisions.” Pe-

gram, 530 U.S. at 225,

Here, neither the Contract nor the Plan assign fiduciary duties to

Fairmont. Section 1(D) of the Contract, titled “Benefit Admin-

istration” provides, in pertinent part:

Infiniti HR will manage and administer group supple-

mental benefit plans covering Assigned Employees,

including all benefit claims, record keeping and compli-

ance. [Fairmont] hereby authorizes Infiniti HR to collect

insurance premiums for benefit plans from the Employ-

ees and remit them to the applicable insurance

carrier(s). Infiniti HR shall make timely payments for all

of its obligations under such benefit programs. [Fair-

mont] shall, however be responsible for paying the

Employee’s portion of any employer sponsored bene-

fit(s) if an Employee’s deduction from the wages during

any month are not sufficient to pay the Employee’s por-

tion of premiums for such benefit(s) or if [Fairmont]

fails to promptly notify Infiniti HR of the following: ()

the Employee’s termination; (ii) the Employee’s election

to take leave; or (iii) the enrollment of any employer

sponsored benefit. [Fairmont] shall be responsible for

paying any difference between the insurance providers

invoice and the premium contributions collected from

[Fairmont] plus the premium contributions deducted

from the Employees.

(Contract at ECF 4.) In short, the Contract assigns to Infiniti the

responsibility to “manage and administer” employees’ benefit

plans, including benefit claims, record keeping, compliance, and

17

collecting insurance premiums and remitting them to NuAxess.

(id.} The Contract assigns to Fairmont the responsibility to pay

for certain gaps or differences in premiums and coverage, and to

pay for an employee’s portion of benefits if Fairmont fails to

promptly notify Infiniti of certain changes in an employee’s sta-

tus. Ud.) The Contract does not empower Fairmont to exercise

any “discretionary authority or discretionary control” regarding

management of the Plan or its assets, nor does it endow Fairmont

with “discretionary authority or discretionary responsibility in

the administration” of the Plan. 29 U.S.C. § 1002(21)(A). It

simply requires that Fairmont foot the bill in certain circum-

stances. This is insufficient to render Fairmont an ERISA

fiduciary. See, e.g., Lauder v. First Unum Life Ins, Co., 55 F. Supp.

2d 269, 273 (S.D.N.Y. 1999) (“[A]n employer is not a fiduciary

of a benefits plan simply because it creates, sponsors or contrib-

utes to a plan.”); Geller v. County Line Auto Sales, Inc., 86 F.3d

18, 21 (2d Cir. 1996) (“[T]he employer must exercise the requi-

site degree of control and discretion [over the plan’s

administration] to be held liable as a fiduciary.”).

The Plan, which appears to be a generalized, summary plan de-

scription, lists NuAxess as the sole “NAMED FIDUCIARY” of the

Plan. (Plan (Dkt. 1-2) at ECF 77.) The Plan’s definition of “fidu-

ciary” closely tracks ERISA’s definition: “A fiduciary exercises

discretionary authority or control over management of the Plan

or the disposition of its assets, renders investment advice to the

Plan[,] or has discretionary authority or responsibility in the ad-

ministration of the Plan.” (id. at ECF 68.) The “named fiduciary”

may “appoint others to carry out fiduciary responsibilities,”

though there is no evidence or allegation that NuAxess has done

so. Ud. at ECF 69.) The Plan defines “employer” as “NuAxess and

participating employers.” (id. at ECF 31.) It also provides that

NuAxess is the “plan administrator” or “plan sponsor” responsible

for, among other things, “administer[ing] the Plan in accordance

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with its terms,” “interpret[ing] the Plan,” and “decidling] dis-

putes which may arise relative to a Covered Person’s rights.” (id.

at ECF 68.)

The Plan identifies NuAxess as the sole named fiduciary and de-

scribes various fiduciary responsibilities borne exclusively by

NuAxess as the plan administrator. Notably absent from the

Plan’s language is any indication that Fairmont possesses “the

requisite degree of control and discretion” over the Plan’s man-

agement or administration necessary to be held liable as a

fiduciary. Geller, 86 F.3d at 21. Fairmont is not a plan trustee

with certain discretionary responsibilities, see White Oak, 102

F.4th at 602 (concluding that petitioner-trustees “are fiduciaries

as that term is used in § 502.”), nor is it an investment manager

with authority to manage the Plan’s assets, Lowen v. Tower Asset

Memt. Inc., 829 F.2d 1209, 1218 (2d Cir. 1987) (concluding that

defendant designated as plan “investment manager” is an ERISA

fiduciary). Thus, neither the Plan nor the Contract “explicitly [as-

cribe] fiduciary responsibilities” to Fairmont. In re Polaroid ERISA

Litigation, 362 F. Supp. 2d at 472.

Nor is Fairmont a de facto fiduciary, notwithstanding the terms

of the Contract and Plan. Infiniti argues that Fairmont is a fidu-

ciary because it “sponsors the arrangement for the benefit of its

eligible employees and self-insures the benefits.” (Def.’s Mot. at

6.) However, as noted above, “an employer is not a fiduciary of

a benefits plan simply because it creates, sponsors or contributes

to a plan.” Lauder, 55 F. Supp. 2d at 273. Even if Fairmont spon-

sors the Plan and self-insures its employees’ benefits by, for

example, paying for certain gaps or differences in coverage, those

responsibilities do not entail “any discretionary authority or dis-

cretionary control respecting management of” the Plan, or “any

authority or control respecting management or disposition of its

assets.” Coulter v. Morgan Stanley & Co. Inc., 753 F.3d 361, 366

19

(2d Cir. 2014) (emphases added). Thus, the court concludes that

Fairmont is not a fiduciary for purposes of ERISA Section 502(a).

Although neither party addresses the issue, because it is the more

obvious argument under Davila prong one, step one, the court

considers whether Fairmont qualifies as an “employer” within

the meaning of Section 502(a). ERISA Section 1002(5) provides:

The term “employer” means any person acting directly

as an employer, or indirectly in the interest of an em-

ployer, in relation to an employee benefit plan; and

includes a group or association of employers acting for

an employer in such capacity.

29 U.S.C. § 1002(5). Fairmont self-identifies as an employer. (See

Compl. { 6 (explaining that Infiniti “assumed the responsibility

of inter alia managing insurance and benefit services for Plain-

tiffs employees” (emphasis added)); Pl.’s Opp. at 5 (under the

Contract, “Defendant became co-employer.”).) Infiniti also de-

sctibes Fairmont as an employer. (See Def.’s Mot. at 6.) Thus, the

court concludes that Fairmont is an “employer” within the mean-

ing of ERISA, and proceeds to the next step in the Davila analysis.

b. Davila Prong One, Step Two

Davila prong one, step two asks whether the actual claims as-

serted by Fairmont can be construed as a colorable claim

pursuant to Section 502(a). Arditi, 676 F.3d at 299. In other

words, can Fairmont’s common law claims be construed as a col-

orable claim for relief under those Section 502(a) remedies

available to employers?

Section 502(a) contains three enforcement provisions available

to “employers”: Section 502(a}(8), Section 502(a)(10), and Sec-

tion 502(a)(11). See 29 U.S.C. § 1132(8), (10), (11). The court

concludes that Fairmont’s claims for breach of contract, breach

20

of fiduciary duties, negligence, and a declaratory judgment can-

not be construed as a colorable claim for relief under any of these

subsections.

Section 502(a)}(8) allows employers to sue to enjoin or obtain

equitable relief from violations of “subsection (f) of section 1021

of this title.” 29 U.S.C. § 1132(8). That subsection, entitled “De-

fined benefit plan funding notices,” requires plan administrators

to provide annual plan funding notices to certain entities, and

details the information that must be contained in those notices.

29 U.S.C. § 1021(f). Fairmont’s claims have nothing to do with

plan funding notices, and so cannot be construed as a claim for

relief under Section 502(a}(8).

Section 502(a)(10) allows employers to sue “in the case of a mul-

tiemployer plan that has been certified by the actuary to be in

endangered or critical status under section 1085 of this title, if

the plan sponsor [failed to take certain action(s)].” 29 U.S.C. §

1132(10). While Infiniti states that the Plan is a multiemployer

plan, it does not allege that the Plan “has been certified by the

actuary to be in endangered or critical status under section

1085.” Id.: (Def.’s Mot. at 2.) Nor does Fairmont claim that the

Plan is in endangered or critical status. (See generally Pl.’s Opp.)

Thus, Fairmont’s claims cannot be construed as a claim for relief

tnder Section 502(a)(10).

Finally, Section 502(a}(11) allows certain employers, in the case

of a multiemployer plan, to sue to enjoin or obtain equitable re-

lief from violations of subsection (1) of Section 1021. 29 U.S.C. §

1132(11). Subsection (1) of Section 1021 requires plan sponsors

ot administrators of multiemployer plans, upon written request,

to furnish “to any employer who has an obligation to contribute

to the plan” a notice of (A) the estimated amount of their with-

drawal liability if they withdrew “on the last day of the plan year

preceding the date of the request,” and (B) an explanation of how

such estimated liability amount was determined. 29 U.S.C. §

21

1021(1). In essence, when an employer withdraws from a mul-

tiemployer plan and the plan is underfunded at the time of their

withdrawal, the withdrawing employer may be forced to com-

pensate the plan to make up for the losses caused by its

withdrawal. Subsection (1) of Section 1021 requires plan spon-

sors ot administrators of multiemployer plans to provide

employers with, upon request, a notice of the scope of their with-

drawal liability and an explanation as to how that liability was

calculated. Section 502{a)(11), in turn, allows employers to sue

to obtain equitable relief from violations of this noticing require-

ment. 29 U.S.C. § 1132(11). As with Section 502(a)(8), because

Fairmont’s claims have nothing to do with withdrawal liability

notices, they cannot be construed as a claim for relief under Sec-

tion 502(a)(11).

Although Fairmont is an “employer” within the meaning of

ERISA, its claims cannot be construed as a colorable claim for

relief under those Section 502(a) remedies available to employ-

ers. Therefore, Fairmont is not an entity who “at some point in

time, could have brought [its] claim[s] under ERISA § 502(a),”

and the Davila analysis ends at prong one. White Oak, 102 F.4th

at 606; Teamsters Local 272, 642. F.3d at 328 (noting that the

Davila test “is conjunctive; a state-law cause of action is [com-

pletely] preempted only if both prongs of the test are satisfied”).

ERISA does not completely preempt Fairmont’s state law claims.

2. Remand to State Court

When the doctrine of complete preemption does not apply, the

court is without removal jurisdiction and cannot resolve the re-

maining dispute regarding express preemption. It lacks power “to

do anything other than remand to the state court where the

preemption issue can be addressed and resolved.” Dukes, 57 F.3d

at 355, As discussed above, Section 502(a) does not completely

preempt Fairmont’s state law claims. Moreover, Infiniti has not

asserted an alternative basis for subject matter jurisdiction. See

22,

Wurtz, 761 F.3d at 239 (noting that, where the defendant re-

moves a case to federal court on the basis of complete

preemption and complete preemption is not present, “in the ab-

sence of an alternative basis for subject-matter jurisdiction, it

would be inappropriate to reach the merits of the ordinary ex-

press preemption defense”); (Notice of Removal at 1-3; Civil

Cover Sheet (Dkt. 1-3) at 1.) Thus, the court is without removal

jurisdiction and cannot resolve the remaining dispute regarding

express preemption. It lacks power to do anything other than re-

mand the case to state court.

IV. CONCLUSION

For the foregoing reasons, Infiniti’s motion to dismiss is DENIED,

Fairmont’s request for oral argument is DENIED as moot, and this

case is REMANDED to the Kings County Supreme Court.

SO ORDERED.

Dated: Brooklyn, New York

Novembers! , 2024

s/Nicholas G.Garaufis

NICHOLAS G. GARAUEFI§

United States District Judge

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