Bowers v. Russell

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

___________________________________

)

RITA BOWERS, et al., )

)

Plaintiffs, )

)

v. ) Civil Action

) No. 22-cv-10457-PBS

JOHN H. RUSSELL, et al., )

)

Defendants. )

______________________________ )

MEMORANDUM AND ORDER

January 16, 2025

Saris, D.J.

INTRODUCTION

The employees of Russelectric, Inc. participated in an

Employee Stock Ownership Plan (“ESOP” or “Plan”) to receive Company

stock as a retirement benefit. When the founder of the Company

passed away, the Company’s Board of Directors (“Board”) terminated

the ESOP. Participants were compensated for their allocated

shares, and the Company forgave an outstanding Plan loan in

exchange for the Plan’s unallocated shares. The Plan was also

amended at termination to include a clawback provision, entitling

participants to additional compensation if the Company was sold

within three years for a higher share price than they initially

received for their allocated shares. Plaintiffs, current and

former employees of Russelectric, allege Defendants improperly

subtracted $65 million in bonuses from the net share price after

the Company was sold to Siemens, depriving participants of

$7 million under the clawback provision. Plaintiffs, individually,

as part of a putative class, and on behalf of the Plan, sue the

Russell children (individually and as trustees of the Russelectric

Stockholder Trusts and the Russelectric Stock Proceeds Trusts),

Denise D. Wyatt and Dennis J. Long from the Board of Directors,

and the Argent Trust Company (collectively, “Defendants”) for

violating the Employee Retirement Income Security Act (“ERISA”),

29 U.S.C. §§ 1001 et seq.

Defendants previously moved to dismiss claims related to the

unallocated shares, which the Court addressed in its February 15,

2024 Memorandum and Order (Dkt. 129). In the present motion,

Defendants seek dismissal of the four new claims (Counts VII–X)

related to the allocated shares.1 After oral argument and

1 Count VII alleges that Russelectric Board members John Russell,

Denise Wyatt, and Dennis Long (“Director Defendants”) breached

fiduciary duties to the ESOP by diverting proceeds from the Siemens

sale to the Russell children and failing to ensure proper

compensation for the ESOP participants’ allocated shares, in

violation of 29 U.S.C. § 1104(a)(1). Count VIII alleges that the

Director Defendants used the reduction in the clawback payments to

benefit themselves, thus causing a prohibited transaction in

violation of 29 U.S.C. § 1106(a) and (b). Count IX alleges that

the Director Defendants and Russelectric’s owners, John Russell,

Suzanne Russell, and Lisa Russell (“Russell Defendants”) failed to

pay benefits owed to the ESOP participants, in violation of 29

U.S.C. § 1132(a)(1)(B). Count X alleges that the Russell Defendants

knowingly participated in a prohibited transaction and breaches of

duties of prudence and loyalty by knowingly benefiting from the

consideration of the parties’ submissions, the Court DENIES the

Motion to Dismiss pursuant to Federal Rules of Civil Procedure

12(b)(6) (Dkt. 179).

FACTUAL BACKGROUND

Plaintiffs allege the following facts in the second amended

complaint (Dkt. 166), which are accepted as true for purposes of

Defendants’ motion to dismiss. See Artuso v. Vertex Pharms., Inc.,

637 F.3d 1, 5 (1st Cir. 2011). The Court assumes familiarity with

the facts of this case related to the unallocated shares and its

prior Memorandum and Order (Dkt. 129) and focuses on the allocated

shares.

I. The ESOP

Russelectric is a power systems company founded and, for most

of its history, wholly owned by Raymond Russell. As part of their

retirement plan, all employees who had worked at the Company for

at least one year were automatically enrolled in the ESOP, which

Russell created in 2010.

ESOPs are benefit plans that give stock in the employer

company to employees. To create the ESOP, Russell sold a 30% stake

in the Company to an ESOP trust, which was managed by a trustee.

The stocks held by the ESOP were then divided into two categories:

ESOP fiduciaries’ violations of ERISA, in violation of 29 U.S.C.

§ 1132(a)(3).

unallocated shares that the ESOP held as collateral on the loan

and allocated shares that were distributed to the ESOP

participants.

II. Succession

Raymond Russell died in 2013. The terms of his will were

contested both in divorce proceedings initiated before his death

and in posthumous probate actions that challenged the trust

designated by him to hold his Company stock. His ex-wife’s expert

estimated the Company to be worth $188.4 million and found that

revenues were trending up. To settle the various cases, Russell’s

heirs released their claims related to the ESOP and remade the

Russelectric Board of Directors. The new board comprised one

representative from each of the three part-owners of the Company.

The ESOP was represented by Defendant Dennis J. Long, a

professional ESOP consultant chosen by Defendant Argent, the

ESOP’s appointed trustee. The ex-wife was represented by her son

John H. Russell. The children, John, Suzanne, and Lisa Russell --

who were the beneficial owners of the remaining stock through the

Russelectric Stockholder Trusts -- were represented by Defendant

Denise D. Wyatt, an employee of Wells Fargo. Russell’s ex-wife

passed away in 2016, and the children inherited her shares.

III. Terminating the ESOP

Effective June 30, 2016, the Board of Russelectric decided to

terminate the ESOP. Consistent with the provisions of the ESOP,

the Company redeemed the ESOP’s shares. Plan participants were

paid $134 per allocated share, and the Company agreed to a clawback

provision whereby participants would additionally be paid the

difference between that amount and the per share price paid for

any sale of the Company should one take place over the next three

years.

The Company agreed to the clawback in a “Letter Agreement”

signed by John Russell in his capacity as Board Chair, on behalf

of the Company, and Stephen Martin, Senior Vice President of

Argent, on behalf of the ESOP. The Letter Agreement stated:

The Company shall pay, or cause to be paid, to each

participant of the ESOP by wire transfer of immediately

available funds to one or more accounts designated by

[Argent], if the ESOP maintains participants’ accounts

as of the closing date of the Change of Control, or to

an escrow account established by the Company for such

purposes . . . .

Nothing contained herein shall, or shall be deemed

to, result in the ESOP continuing in existence beyond

the ESOP termination date.

Dkt. 52-4 at 10-11. The Letter Agreement did not condition receipt

of funds on signing a release of claims.

IV. The Siemens Sale

In 2019, the remaining Russell heirs sold Russelectric to

Siemens for $335.13 million. After adjustments for cash on hand,

outstanding liabilities, and $1.5 million in legal fees and other

transaction costs, Siemens paid a net price of $336.13 million or

$840.33 per share.

However, from the gross proceeds of $335.13 million,

Defendants deducted $65 million in “transaction expenses.” These

included $25 million in bonuses paid to members of the Russell

family, $3 million as a bonus to Defendant Long, and $37 million

to six Russelectric executives, who Plaintiffs allege enabled the

transaction. Plaintiffs allege that these bonuses are not bona

fide transaction expenses because they were neither contractual

obligations in existence when the ESOP agreed to the clawback

provision nor expenses necessary to close the deal. The $65 million

in “transaction expenses” was not included in the closing document

referred to as the “Flow of Funds,” which calculated the “net

purchase price.”

After the $65 million deduction, Defendants calculated a “net

purchase price” of $270.11 million, which translated into a share

price of $676. Because Argent had ceased acting as trustee of the

ESOP in 2018, the Board of Directors exercised de facto control

over the administration of the ESOP’s clawback provision. As a

precondition to collect their clawback payments, the Company had

Plaintiffs execute an “ESOP Participant General Release of Claims

and Acknowledgement.” The Siemens purchase agreement included a

provision requiring eighty percent of ESOP participants to execute

the releases prior to sale and stating that any additional amounts

due to non-signing participants would go to the Russell heirs. The

Siemens purchase agreement was not shared with the Plan

participants.

Signers acknowledged and agreed that “payment to [signer] of

the ESOP Payment is conditioned upon my execution of this General

Release of Claims and Acknowledgement.” Dkt. 60-1 at 3. Signers

released a broad and expansive set of “any and all claims . . .

known or unknown . . . arising from, relating to or in connection

with, either directly or indirectly, the ESOP, the termination of

the ESOP and/or the Acquisition.” Id. In the same paragraph, the

release contained the following language: “Notwithstanding the

foregoing, the term ‘Released Claims’ shall not include claims

brought by Releasors with respect to the performance of the

obligations contemplated herein.” Id. The release’s cover letter

stated that Siemens paid $676 per share to acquire Russelectric

and did not mention the $65 million in transaction fees.

Consistent with the clawback provision in the Letter

Agreement, Plan participants received the difference between this

“net purchase price” of $676 and the $134 per allocated share they

received when the Plan was terminated or $542 per share. Plaintiffs

allege that they should have been compensated for the difference

between the approximately $840 and $134 per share, and therefore

that they have been shorted $154 per share, or $7 million in the

aggregate, by Defendants.

PROCEDURAL HISTORY

On March 25, 2022, Plaintiffs filed a complaint in this Court

asserting six counts of ERISA violations against Defendants.

Defendants moved to dismiss. On March 29, 2023, the Court raised

the question of the inadequacy of the complaint regarding standing,

and, accordingly, Plaintiffs amended their complaint. Defendants

moved to dismiss the amended complaint both on standing grounds

and for failure to state a claim. On February 15, 2024, this Court

denied both motions to dismiss.

After learning for the first time of the discrepancy between

the actual price Siemens paid for Russelectric and the “net

purchase price” used to calculate payments to the ESOP

participants, Plaintiffs amended their complaint to add the four

new counts all relating to the clawback provision. (Dkt. 166).

Defendants move to dismiss these four new counts, Counts VII–X.

(Dkt. 179).

LEGAL STANDARD

To survive a motion to dismiss, a complaint must allege “a

plausible entitlement to relief.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 559 (2007). “While 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.” Id. at 555 (cleaned up); see Rodríguez-

Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 95-96 (1st Cir. 2007).

The plausibility standard requires the Court to proceed in two

steps. First, the Court must “separate the complaint’s factual

allegations (which must be accepted as true) from its conclusory

legal allegations (which need not be credited).” Morales-Cruz v.

Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012). The Court must

then determine whether the factual allegations permit it “to draw

the reasonable inference that the defendant is liable for the

misconduct alleged.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009)).

DISCUSSION

I. Release of Claims

Defendants allege that Plaintiffs released their ERISA claims

when they accepted their clawback payments.

“Release is an affirmative defense, and such a defense will

support a motion to dismiss only where it is (1) definitively

ascertainable from the complaint and other sources of information

that are reviewable at this stage, and (2) the facts establish the

affirmative defense with certitude.” Citibank Glob. Mkts., Inc. v.

Rodríguez Santana, 573 F.3d 17, 23 (1st Cir. 2009) (citation

omitted).

The release, by its own terms, allows Plaintiffs to challenge

the clawback payments. Defendants argue that the releases bar such

claims, pointing to the broad language in the releases, which

encompasses “any and all claims . . . known or unknown . . .

arising from, relating to or in connection with, either directly

or indirectly, the ESOP, the termination of the ESOP and/or the

Acquisition.” Dkt. 60-1 at 3.

However, the contract contains limiting language that

explicitly excludes claims related to the clawback provision from

the scope of the release. Following the broad language cited by

Defendants, the release specifies: “Notwithstanding the foregoing,

the term ‘Released Claims’ shall not include claims brought by

Releasors with respect to the performance of the obligations

contemplated herein.” Id. (emphasis added).

Black’s Law Dictionary defines “notwithstanding” as

“[d]espite; in spite of.” Notwithstanding, Black’s Law Dictionary

(12th ed. 2024). The sentence immediately prior to

“notwithstanding” defines the scope of the release as “all claims,”

so the notwithstanding provision creates a carveout from “all

claims” otherwise released.

Black’s Law Dictionary defines “herein” as “[i]n this thing

(such as a document, section, or paragraph),” while noting that

the word is “inherently ambiguous.” Herein, Black’s Law Dictionary

(12th ed. 2024). The release references the clawback payments in

two specific instances. First, it states: “I acknowledge and agree

that the payment to me of the ESOP Payment is conditioned upon my

execution of this General Release of Claims and Acknowledgement.”

Dkt. 60-1 at 3. Second, it includes a section specifying the method

of delivery for the clawback payment. Accordingly, these

provisions demonstrate that the clawback payments were considered

within the contract and therefore qualify as “obligations

contemplated herein.” As a result, the releases exclude claims

related to the clawback payments.2

II. ERISA Rights After Plan Termination

Defendants argue that Plaintiffs’ ERISA rights ceased once

the ESOP was terminated in 2016, and therefore they have no ERISA

remedy for actions taken in 2019 related to the clawback. According

to Defendants the clawback provision did not continue the ESOP

once it was terminated in 2016. Defendants point to language in

the “Letter Agreement” containing the clawback provision that

explicitly states it does not “result in the ESOP continuing in

existence beyond the ESOP Termination Date.” Dkt. 63-4 at 11.

Moreover, as Defendants pointed out in oral argument, the “Letter

Agreement” specifies that the Company, and not the ESOP, will pay

the clawback payments to the ESOP participants as individuals, and

not to the Plan. The Company agreed to pay into accounts designated

2 Plaintiffs also advance two additional, strong arguments to

challenge the validity of the releases, asserting that they are

invalid due to lack of consideration and because they were not

signed voluntarily or knowingly. However, because I find that the

release, by its own terms, permits Plaintiffs’ claims to proceed,

it is unnecessary to address these arguments.

by the ESOP, if it is still in existence, or to an escrow account

created by the Company for this purpose. Defendants conclude that

since the Plan was terminated, ERISA does not govern Plaintiffs’

claims.

Despite Defendants’ contention, ERISA governs post-

termination activities when a terminated plan retains assets. See

Pfahler v. Nat’l Latex Prods. Co., 517 F.3d 816, 827 (6th Cir.

2007) (“[T]here is no good reason why a plaintiff cannot obtain

[ERISA] § 502(a)(2) relief on behalf of a defunct plan”);

Wilmington Shipping Co. v. New Eng. Life Ins. Co., 496 F.3d 326,

338–41 (4th Cir. 2007) (holding that ERISA allows beneficiaries to

bring an action on behalf of a defunct plan); Jackson v. Truck

Drivers’ Union Loc. 42 Health & Welfare Fund, 933 F. Supp. 1124,

1129 (D. Mass. 1996) (“[A]n aggrieved beneficiary has standing to

sue the trustees of a defunct employee benefit plan for restitution

of benefits due under a plan . . . .”); Cooke v. Lynn Sand & Stone

Co., 673 F. Supp. 14, 18 n.6 (D. Mass. 1986) (finding that the

distribution of termination benefits was “subject to review under

ERISA’s fiduciary standards”); Dist. 65, UAW v. Harper & Row,

Publishers, Inc., 670 F. Supp. 550, 556 (S.D.N.Y. 1987) (concluding

that post-termination activities are subject to the fiduciary

provisions of ERISA).

ERISA does not provide a “comprehensive definition of what

constitutes ‘plan assets.’” Merrimon v. Unum Life Ins. Co. of Am.,

758 F.3d 46, 56 (1st Cir. 2014). However, the First Circuit has

adopted the Department of Labor’s position that “the assets of a

plan generally are to be identified on the basis of ordinary

notions of property rights under non-ERISA law.” Id. (quoting U.S.

Dep’t of Labor, Advisory Op. No. 93–14A, 1993 WL 188473, at *4

(May 5, 1993)). “Pursuant to ordinary notions of property rights,”

a plan may hold a “future interest in the collection of the

contractually-owed contributions,” meaning that it may “possess

the contractual right to collect them.” Navarre v. Luna (In re

Luna), 406 F.3d 1192, 1199–200 (10th Cir. 2005); see Bos v. Bd. of

Trs., 795 F.3d 1006, 1011 (9th Cir. 2015) (finding that plan assets

can include “the contractual right to collect payments once they

become due”); United States v. LaBarbara, 129 F.3d 81, 88 (2d Cir.

1997) (“[C]ontractual obligations to the Funds . . . constituted

‘assets’ of the Funds by any common definition.”); Solis v. Plan

Benefit Servs., Inc., 620 F. Supp. 2d 131, 139 (D. Mass. 2009)

(“[P]lan assets include the right to collect unpaid employer

contributions.”).

Here, the Plan retained a future interest in clawback payments

contingent on a subsequent sale of the Company, as established

under the amended Plan in March 2016. Cf. Restatement (Third) of

Trusts § 40 cmt. b (Am. L. Inst. 2003) (including “contingent

future interests” and “legally enforceable claim[s]” against the

trustee, settlor, or “some other person” as forms of trust

property). This retained interest qualifies as a plan asset under

ERISA. Since the terminated Plan retained assets, ERISA governs

Defendants’ actions related to the clawback payments.

III. Fiduciary Duty of Director Defendants

Defendants argue that the Director Defendants were not

fiduciaries within the meaning of ERISA, asserting that they did

not act with discretion but rather employed an “exact formula”

provided by the clawback provision. Dkt. 180-1 at 19.

Under ERISA, a person is a fiduciary with respect to a plan

to the extent 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.” 29 U.S.C. § 1002(21)(A)(i). The First

Circuit has clarified that “even nondiscretionary control or

authority over plan assets suffices to render a person a

fiduciary.“ Mass. Laborers’ Health & Welfare Fund v. Blue Cross

Blue Shield of Mass., 66 F.4th 307, 324–25 (1st Cir. 2023).

Plaintiffs allege that Defendants controlled and mishandled

plan assets. See Dkt. 166 ¶¶ 156-66. Specifically, they claim that

Director Defendants exercised authority to “determin[e] the value

of the Plan’s clawback provision and distribut[e] funds to

participants.” Id. ¶ 158. The clawback provision required

participants to receive a cash payment calculated as:

equal to the product of (A) the number of the Company’s

common stock allocated to such participant’s account in

the ESOP as of the ESOP Termination Date multiplied by

(B) the difference between (i) the per share price of

the Company’s common stock as of the ESOP Termination

Date . . . and (ii) the net per share purchase price

received by the shareholders of the Company upon the

Consummation of the Change of Control Transaction

. . . .

Dkt. 52-4 at 10. While the clawback provision included a formula

to determine a participant’s entitlement, Plaintiffs allege that

Defendants exercised discretion in determining the key input: the

net share price of the Siemens sale. According to the complaint,

the Director Defendants used their discretion to allocate

$65 million in bonuses to members of the Russell family, Defendant

Long, and six Russelectric executives, reducing the net share price

used in the calculation by that amount. Accordingly, the Court

finds that Defendants acted as fiduciaries.3

IV. Failure to Pay Benefits Owed (Count IX)

Defendants argue that Plaintiffs’ claim of failure to pay

benefits owed fails as a matter of law for two reasons:

1) Plaintiffs may not bring simultaneous claims -- one as a

participant of the ESOP and another claim on behalf of the ESOP -

3 Defendants further contend that Count X against the Russell

Defendants fails because it relies on the existence of a viable

underlying claim for breach of fiduciary duty. Since Plaintiffs

have adequately stated a claim against the Director Defendants as

functional fiduciaries, this requirement is satisfied, and Count

X is not dismissed.

- for the same injury, and 2) Defendants are not liable for payment

of benefits owed.

29 U.S.C § 1132(a)(1)(B) states that “[a] civil action may be

brought . . . by a participant or beneficiary . . . to recover

benefits due to him under the terms of his plan.” Based on the

plain language of the statute, Defendants correctly state that the

right to bring a claim under § 1132(a)(1)(B) rests with the

participant or beneficiary who has been wrongly denied benefits

and does not bestow a remedy on behalf of a plan. The Supreme Court

has interpreted § 1132(a)(1)(B) as akin to “the simple enforcement

of a contract as written.” CIGNA Corp. v. Amara, 563 U.S. 421, 436

(2011). “A suit by a beneficiary to recover benefits from a covered

plan . . . falls directly under [29 U.S.C. § 1132](a)(1)(B)

. . . .” Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 62–63 (1987).

A different ERISA provision, 29 U.S.C. § 1132(a)(2), states that

a “civil action may be brought . . . by a participant . . . for

appropriate relief under section 1109 of this title.” 29 U.S.C.

§ 1109(a) makes fiduciaries personally liable to the plan if they

breach their duties, stating: “[a]ny 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.” Accordingly, a

participant suing under § 1132(a)(2) does so on behalf of the plan,

with damages paid by the fiduciary to the plan. See Evans v. Akers,

534 F.3d 65, 72 (1st Cir. 2008). Here, Plaintiffs have made claims

both on behalf of the Plan under § 1132(a)(2), Counts VII and VII,

and on behalf on a class of participants under § 1132(a)(1)(B),

Count IX.

Seeking relief under one ERISA provision does not preclude

relief under another, so long as both claims are adequately pled.

The First Circuit in Evans v. Akers rejected the argument that

§ 1132(a)(1)(B) and § 1132(a)(2) are mutually exclusive,

describing the “dichotomy [as] untenable.” Id. Other courts have

similarly concluded that plaintiffs “assert fiduciary duty claims

under [§ 1132(a)(2)], even when relief is also available under

[§ 1132(a)(1)(B)].” Harris v. Amgen, Inc., 573 F.3d 728, 734–35

(9th Cir. 2009); see Graden v. Conexant Sys. Inc., 496 F.3d 291,

301 (3d Cir. 2007) (concluding that even when plaintiffs “could

demand a full benefit payment from the plan itself under

§ 1132(a)(1)(B) . . . , for most plaintiffs the sensible route is

to use § 1132(a)(2) to get the money in the first instance from a

solvent party liable to make good on the loss, not from the plan

itself”).

Here, Plaintiffs bring claims under both § 1132(a)(1)(B) and

§ 1132(a)(2). Through § 1132(a)(1)(B), they seek to recover

improperly denied compensation for the allocated shares owed to

individual participants. Under § 1132(a)(2), they seek additional

relief for harms to the Plan stemming from Defendants’ fiduciary

breaches. Therefore, Plaintiffs’ claims under § 1132(a)(1)(B) are

not foreclosed by their claims under § 1132(a)(2).

Next, Defendants posit that because the Company and not

Defendants acted as the plan administrator, Defendants cannot be

held liable for the unpaid benefits. However, a § 1132(a)(1)(B)

claim may also be brought against “an entity or person other than

the named plan administrator [that] takes on the responsibilities

of the administrator.” Gómez-González v. Rural Opportunities,

Inc., 626 F.3d 654, 665 (1st Cir. 2010). Because I have found that

Plaintiffs plausibly allege the Director Defendants acted as

functional fiduciaries by determining and distributing benefits

under the clawback provision, a § 1132(a)(1)(B) claim may be

brought against them.

V. Failure to Exhaust Administrative Remedies

Defendants contend that because Plaintiffs have failed to

first exhaust their administrative remedies, their ERISA claims

must fail. “Before a plaintiff asserts an ERISA claim, . . . he

first must exhaust his administrative remedies.” Madera v. Marsh

USA, Inc., 426 F.3d 56, 61 (1st Cir. 2005). However, “[t]raditional

exhaustion principles . . . include an exception for instances

‘when resort to the administrative route is futile or the remedy

inadequate.’” Drinkwater v. Metro. Life Ins. Co., 846 F.2d 821,

826 (1st Cir. 1988) (quoting Amato v. Bernard, 618 F.2d 559, 568

(9th Cir. 1980)); see Davenport v. Harry N. Abrams, Inc., 249 F.3d

130, 133 (2d Cir. 2001) (per curiam) (“[F]utility would excuse an

ERISA plaintiff’s failure to exhaust only ‘[w]here claimants make

a clear and positive showing that pursuing available

administrative remedies would be futile.’” (alteration in

original) (quoting Kennedy v. Empire Blue Cross & Blue Shield, 989

F.2d 588, 594 (2d Cir. 1993))); Paese v. Hartford Life & Accident

Ins. Co., 449 F.3d 435, 449 (2d Cir. 2006) (holding exhaustion not

required when “any reasonable person in [plaintiff]’s situation

would necessarily conclude that it would have been futile”);

Lindemann v. Mobil Oil Corp., 79 F.3d 647, 650 (7th Cir. 1996)

(“In order to come under the futility exception to the exhaustion

requirement a plaintiff must show that ‘it is certain that [her]

claim will be denied on appeal . . . .” (alteration in original)

(quoting Smith v. Blue Cross & Blue Shield United of Wis., 959

F.2d 655, 659 (7th Cir. 1992))).

Here, although Defendants reference detailed claims

procedures in the Plan, these procedures have not been available

to Plaintiffs since the Plan was terminated in 2016 and the Company

was sold in 2019. Under these circumstances, Plaintiffs have

sufficiently demonstrated that the “administrative route is

futile.” Drinkwater, 846 F.2d at 826 (quoting Amato, 618 F.2d at

568).

ORDER

The Court DENIES Defendants’ Motion to Dismiss (Dkt. 179).

SO ORDERED.

/s/ PATTI B. SARIS__________

Hon. Patti B. Saris

United States District Judge