Kollman v. Hewitt Associates, LLC

Opinions of the United

2007 Decisions States Court of Appeals

for the Third Circuit

5-14-2007

Kollman v. Hewitt Assoc

Precedential or Non-Precedential: Precedential

Docket No. 05-5018

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 05-5018

GERALD E. KOLLMAN

v.

HEWITT ASSOCIATES, LLC; ROHM AND HAAS

COMPANY; ROHM AND HAAS BENEFITS

ADMINISTRATIVE COMMITTEE

Rohm and Haas Company;

Rohm and Haas Benefits Administrative Committee,

Appellants

No. 05-5207

GERALD E. KOLLMAN,

Appellant

v.

HEWITT ASSOCIATES, LLC; ROHM AND HAAS

COMPANY; ROHM AND HAAS BENEFITS

ADMINISTRATIVE COMMITTEE

No. 06-1558

GERALD E. KOLLMAN

v.

HEWITT ASSOCIATES, LLC; ROHM AND HAAS

COMPANY; ROHM AND HAAS BENEFITS

ADMINISTRATIVE COMMITTEE,

Appellants

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil No. 03-cv-02944)

District Judge: Honorable Michael M. Baylson

Argued January 8, 2007

Before: SLOVITER and RENDELL, Circuit Judges,

and IRENAS, District Judge*

(Filed: May 14, 2007)

Raymond A. Kresge (Argued)

Cozen O’Connor

Philadelphia, PA 19103-3508

Attorney for Appellants/Cross-Appellees

Kevan F. Hirsch (Argued)

Daniel R. Utain

Kaplan, Stewart, Meloff, Reiter & Stein

Blue Bell, PA 19422

Attorneys for Appellee/Cross-Appellant

OPINION OF THE COURT

SLOVITER, Circuit Judge.

*

Hon. Joseph E. Irenas, Senior Judge, United States District

Court for the District of New Jersey, sitting by designation.

2

I.

Summary

Gerald Kollman, who was an employee of Rohm and

Haas Company at the time at issue, sought to ascertain the

amount of lump sum pension to which he would be entitled if he

were to retire. He accessed the computer website prepared and

maintained for that purpose by Hewitt Associates, LLC and

received an incorrect figure. That figure, $522,043.30, had not

been reduced by the amount of the Qualified Domestic Relations

Order (“QDRO”) that was owing to Kollman’s former wife.

Kollman was notified of the correct pension amount some two

months later. In the interim, he had signed the retirement papers.

He concedes he is not entitled to the difference from Rohm and

Haas. Instead, he makes two claims: a claim against Rohm and

Haas that it violated the Employee Retirement Income Security

Act of 1974 (“ERISA”) by failing to provide him with a copy of

the company’s Plan and Summary Plan Description (“SPD”)

within thirty days of his letter requesting certain documents, and

a claim against Hewitt for professional malpractice because of

the failure of the website to provide the correct pension amount.

Kollman prevailed on the first claim, and Rohm and Haas

appeals. Hewitt prevailed on the second claim, and Kollman

cross appeals.1

II.

Facts and Procedural Posture

Kollman was employed by Rohm and Haas as a Field

Research and Development Manager in Rohm and Haas’

AgroFresh unit in Springhouse, Pa., and was a beneficiary of the

Rohm and Haas Company Retirement Plan (the “Plan”). Rohm

and Haas outsourced most of the administrative services

associated with the Plan to Hewitt which undertook to perform

the day-to-day Plan administration. In his second amended

1

We have appellate jurisdiction to review the District

Court’s orders pursuant to 28 U.S.C. § 1291.

3

complaint, Kollman referred to Hewitt as the agent for Rohm

and Haas.

One of Hewitt’s functions was the calculation of proper

retirement benefits. Hewitt created and maintained a website

that allowed Rohm and Haas employees to go on-line and access

information providing them with estimates of their retirement

benefits. The website is not part of the Plan, but a distinct and

separate service that Hewitt provides for Rohm and Haas and

Plan beneficiaries.

Rohm and Haas announced a Severance Benefit Package

(“SBP”) for employees who voluntarily retired by December 31,

2002. On October 31, 2002, Kollman logged on to the website

maintained by Hewitt to obtain a statement of his pension

benefits calculation. Kollman was aware that a portion of his

pension was earmarked for his former wife but, as noted above,

the website’s calculation that he would receive a lump sum of

$522,043.30 if he decided to accept the SBP failed to account for

Kollman’s obligations under the QDRO. The calculation

provided by the website made it seem as though the lump sum

figure had already been adjusted for the QDRO.

Kollman verified the calculation on the website and by

telephone, and alleges that he elected to retire on December 31,

2002 based on those representations.2 It was not until January 6,

2003 that he was advised that he was entitled to a pension of

$419,917.72, the original amount of $522,043.30 reduced by the

QDRO offset of $102,125.28. The correct amount was

confirmed by a Pension Benefit Statement that Kollman received

on January 7, 2003. Kollman’s subsequent efforts to appeal

through the internal administrative mechanism were

unsuccessful3 and he does not seek any relief here from that

2

It is unclear that Kollman voluntarily retired. There is

some evidence that his employment was severed in connection with

a reorganization. We need not resolve that issue.

3

On February 13, 2003, Kollman filed an “R&H Company

Health and Group Benefits Claim Initiation Form,” which had been

4

decision.

Shortly after Kollman initiated his internal appeal, see

footnote 3, his counsel sent a letter dated February 18, 2003 to

Hewitt requesting that Hewitt produce the following:

1. All tape recordings of telephone calls between

Kollman and Hewitt from December 1, 2002

through the present;

2. All available printouts of or electronically stored

data on benefits projections for Kollman from

October 1, 2002 through the present;

3. All documents of any nature which relate, reflect

or refer the QDRO adjustment to Kollman’s

benefits wherever such documents were generated,

created or stored;

4. All pension benefits paperwork generated by

Hewitt for Kollman in December of 2002 and

January 2003, including any drafts thereof;

5. All internal communications and documents,

including electronic mail, which relate, reflect or

refer to Kollman or his benefits which have been

generated by Hewitt from December 1, 20034

through the present; and

6. All communications between Hewitt and Rohm &

Haas which relate, refer or reflect to Kollman of

his benefits.

App. at 804-05.

On March 20, 2003, Hewitt responded to Kollman’s

attorney’s February 18, 2003 request for documents, stating that

mailed to him by Hewitt to appeal the reduction of his retirement

benefits. On March 5, 2003, Rohm and Haas denied Kollman’s

appeal because the Plan required proper application of the QDRO

and the Plan rules did not permit payment of any additional funds.

4

It appears that the reference to December 1, 2003 was a

typographical error, and the intended date was December 1, 2002.

5

it performed certain administrative services for Rohm and Haas

regarding their defined benefits plan, but that “Hewitt is not the

Plan Administrator.” App. at 810. The letter further stated that

“[w]ith respect to Mr. Kollman’s request for documents, under

Section 2560.503-1 of the Department of Labor Regulations on

Claim Procedure, request for documentation should be addressed

to the Plan Administrator.” Id. Thereupon, by letter dated April

28, 2003, Kollman’s counsel requested from the plan

administrator, Rohm and Haas Benefits Administrative

Committee (“BAC”), “all documents, records, and other

information relevant to [Kollman’s] claim for benefits,”

including the same information requested in the February 18,

2003 letter. App. at 812. However, it was not until June 26,

2003 that outside counsel for defendants produced the Plan, the

updated SPD and the “administrative record” for Kollman’s

claim that included the severance agreement that Kollman signed

in December 2002. See Kollman v. Hewitt Assocs., No. Civ. A.

03-2944, 2005 WL 2746659, at *4 (E.D. Pa. Oct. 18, 2005).

Kollman initially filed this action against Hewitt under

state law, claiming damages for negligent misrepresentation,

negligence, promissory estoppel and breach of contract. The

District Court, by order dated September 23, 2003, dismissed the

complaint as preempted under ERISA, but gave Kollman leave

to file an amended complaint raising a claim under ERISA.

Kollman v. Hewitt Assocs., No. Civ. A. 03-2944, 2003 WL

22331870, at *1 (E.D. Pa. Sept. 22, 2003). Kollman amended

the complaint to state three counts. The amended complaint now

included a claim, Count I, against Rohm and Haas under ERISA

§ 502(c)(1), 29 U.S.C. § 1132(c)(1), that quoted from federal

regulations relating to ERISA claims procedure; Count II

asserted a state law claim against Hewitt for professional

malpractice; Count III asserted an ERISA equitable estoppel

claim against Hewitt. The District Court dismissed Count II, the

claim against Hewitt for professional malpractice, by order

entered April 14, 2004 on the ground of ERISA preemption.

That order is the subject of Kollman’s counterclaim.

Kollman filed a second amended complaint against Rohm

and Haas asserting a claim for breach of its fiduciary duty that

the District Court construed as arising under ERISA §

6

404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D), inter alia, for failure to

produce “relevant” documents as required by ERISA §

502(c)(1), 29 U.S.C. § 1132(c)(1). App. at 218. Following

discovery, defendants’ motions to dismiss and motions for

summary judgment, the District Court, by order dated August

11, 2005, dismissed Kollman’s equitable estoppel claim and held

that there were genuine issues of material fact with respect to

Kollman’s claim for damages under § 502(c)(1) of ERISA, 29

U.S.C. § 1132(c)(1), based on failure to provide documents

required by the Plan. On August 24, 2005, the Court held a short

non-jury trial and found that Rohm and Haas was liable for

statutory penalties of $9,800 under § 502(c)(1) for violation of §

104(b)(4) of ERISA. Rohm and Haas appeals from that order.

III.

Statutory Penalty Under Section 502(c)(1) of ERISA,

29 U.S.C. § 1132(c)(1)

Section 502(c)(1) of ERISA imposes a statutory penalty

of up to $100 a day on any plan administrator who fails to

provide to a plan participant or beneficiary any information that

is required by the subchapter of the statute. That provision

states:

Any administrator . . . who fails or refuses to

comply with a request for any information which

such administrator is required by this subchapter to

furnish to a participant or beneficiary . . . by

mailing the material requested to the last known

address of the requesting participant or beneficiary

within 30 days after such request may in the

court’s discretion be personally liable to such

participant or beneficiary in the amount of up to

$100 a day . . . .

29 U.S.C. § 1132(c)(1).

The relevant subchapter provisions referred to in §

502(c)(1) are ERISA § 104(b)(4), 29 U.S.C. § 1024(b)(4), and

ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D). Under §

7

104(b)(4) of ERISA,

The administrator shall, upon written request of

any participant or beneficiary, furnish a copy of

the latest updated summary plan description[,] and

the latest annual report, any terminal report,

bargaining agreement, trust agreement, contract, or

other instruments under which the plan was

established or operated.

29 U.S.C. § 1024(b)(4). There can be no question that the

statute requires the administrator to furnish the SPD upon

request.

The second provision referenced in § 502(c)(1) is §

404(a)(1)(D) of ERISA which states:

Fiduciary Duties

(a) Prudent man standard of care.

(1) Subject to sections 1103(c) and (d), 1342,

and 1344 of this title, a fiduciary shall discharge

his duties with respect to a plan solely in the

interest of the participants and beneficiaries

and –

(D) in accordance with the documents and

instruments governing the plan insofar as such

documents and instruments are consistent with

the provisions of this subchapter and subchapter

III of this chapter.

29 U.S.C. § 1104(a)(1)(D). The District Court imposed

sanctions on Rohm and Haas under § 104(b)(4) of ERISA but

rejected the imposition of sanctions based on § 404(a)(1)(D) of

ERISA. Rohm and Haas’ appeal of the sanctions order is the

subject of this appeal.

In Groves v. Modified Ret. Plan, 803 F.2d 109 (3d Cir.

1986), the plaintiff, a plan participant who was denied disability

benefits, sued the plan administrator under ERISA § 502(c)(1)

for failure to give reasons for the denial of his retirement

disability claim. Id. at 112. We held that Groves was entitled to

8

receive the medical information underlying the decision to deny

him benefits pursuant to § 503 of ERISA, 29 U.S.C. § 1133.

However, because § 503 only requires release of the information

by the plan and does not refer to the plan administrator, we held

that sanctions under § 502 were unavailable for that violation.

Groves also sought sanctions for failure to provide the

information as required by 29 C.F.R. § 2560.503-(1)(f). As to

that claim, we stated that “because § 502(c) authorizes penalties

only for breach of duties imposed by ‘this subchapter,’ such

sanctions cannot be imposed for violation of an agency

regulation.” Id. at 118. Further, we stated that “[b]ecause §

502(c) is a penal statute, our holdings regarding the scope of that

provision are also impelled by the rule of lenity in the

construction of penal provisions.” Id. (citing Huddleston v.

United States, 415 U.S. 814 (1974)). Therefore, we concluded

that “[b]ecause Congress has not plainly and unmistakably

established that § 502(c) penalties should be applied to

violations of the kind here at issue, we decline to interpret the

penalty provision to embrace such violations.” Id. at 118.

The District Court correctly opined that we must evaluate

Kollman’s ERISA § 104(b)(4), 29 U.S.C. § 1024(b)(4), and

ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D), claims in

light of Groves. This means that the rule of lenity, which we

applied to the facts in Groves, applies with equal weight here.

By its express language, § 104(b)(4) requires the plan

administrator to furnish a copy of the SPD and other instruments

under which the plan was established “upon written request of

any participant or beneficiary.” To establish a violation under

that section, Kollman must establish that he made a written

request to the plan administrator (here, the BAC) and that the

administrator failed to respond within thirty days. A review of

the language of the letter of February 18, 2003 shows that

neither the Plan nor the SPD was listed among the six categories

of documents requested. The relevant question in this case is

whether Kollman made a written request for the documents as

required by the statute.

As the District Court noted, this court has yet to decide

9

whether a written request must specifically name the precise

documents being sought. Kollman, 2005 WL 2746659, at *6.

Other courts to have considered the issue have adopted a clear

notice test. See, e.g., Faircloth v. Lundy Packing Co., 91 F.3d

648, 655 (4th Cir. 1996) (holding that “[a]ppellants’ request did

not give any indication of the information sought by the

[a]ppellants. Their request for ‘any’ meeting minutes

‘regarding’ [the employee stock ownership plan] in the last three

years was akin to asking Lundy to comb the past three years of

trustees’ meeting minutes to determine if they contained any

information that could possibly be encompassed by §

104(b)(4).”). In addition, the United States Courts of Appeals

for the Second, Fifth, Seventh, and Tenth Circuits have held that

plaintiffs seeking documents under 29 U.S.C. § 1024(b)(4) must

provide clear notice to the plan administrator of the information

they desire. See Davenport v. Harry N. Abrams, Inc., 249 F.3d

130, 135 (2d Cir. 2001) (civil penalties denied because plaintiff

conceded she never asked for the SPD by name, but sought only

specific information for type and amount of any vested benefits

she had accrued); Fisher v. Metro. Life Ins. Co., 895 F.2d 1073,

1077 (5th Cir. 1990) (civil penalties denied because plaintiff’s

request was for copy of policies covering his contract for salary

continuation, not Plan documentation); Anderson v. Flexel, Inc.,

47 F.3d 243 (7th Cir. 1995); Moothart v. Bell, 21 F.3d 1499

(10th Cir. 1994); see also Williams v. Caterpillar, Inc., 944 F.2d

658, 667 (9th Cir. 1991) (holding that the district court did not

abuse its discretion in finding that appellants “failed to offer any

proof – or even to allege – that they had ever requested any plan

descriptions from appellees”).

Both Kollman and the BAC agree that the clear notice test

applies. Further, it is undisputed that Kollman’s February 18,

2003 letter did not specifically mention the Rohm and Haas

retirement plan or SPD. The parties dispute both the applicable

standard of review on appeal and whether the clear notice test

requires that the party seeking information ask for the specific

documents by name. Kollman argues that we should review the

District Court’s finding under the clearly erroneous standard,

because in his view the District Court made a finding of fact that

the February 18, 2003 request was sufficiently clear. On the

other hand, Rohm and Haas argues that we should exercise

10

plenary review because the District Court improperly interpreted

the legal question of what constitutes clear notice.

We are persuaded by Kollman’s argument that we should

review the District Court’s finding as one of fact under the

clearly erroneous standard. That is the approach taken in

Anderson, 47 F.3d at 248 (“Whether a request is proper under [§

1024] is a mixed question of law and fact. When such questions

present a fact specific application of the law, such as here, we

review the district court's decision under a clearly erroneous

standard.”), and Boone v. Leavenworth Anesthesia, Inc., 20 F.3d

1108, 1111 (10th Cir. 1994) (“[W]e hold that it was not clearly

erroneous for the district court to determine the letter constituted

a sufficient written request pursuant to § 1025(a).”). Because we

agree that a clear notice test applies, and because the District

Court applied such a test, the only question is whether the

Court’s finding that Kollman’s February 18, 2003 letter was

sufficiently specific was clearly erroneous.

The courts applying the clear notice test have divided as to

whether the request made by or on behalf of the plan participant

gave clear notice of the documents. Each decision depended

upon the circumstances of that case and no general rule can be

formulated. We should look to whether “either the request or the

response indicates that [defendant] knew or should have known

that [plaintiff] had requested a copy of any document relating to

the . . . [p]lan.” Fisher, 895 F.2d at 1077. A similar approach

was taken in Anderson, 477 F.3d at 250, where the court upheld

the imposition of civil penalties following a finding that the

company “knew or should have known which documents were

being requested[.]” See also Moothart, 21 F.3d at 1503 (civil

penalties appropriate when request specified “a copy of that

Summary Plan Description”).

The District Court found that Kollman’s “request was

sufficiently specific, asking for all documents relating to the

application of his QDRO, considering the background of

communications between [Kollman] and Defendants. . . .

Defendants knew or should have known, based on their

knowledge of the surrounding circumstances or the nature of the

information being sought, that [Kollman] was, at the very least,

11

requesting copies of these documents.” 2005 WL 2746659 at

*7. Although the District Court enunciated the correct standard,

we find no basis in the record to support its conclusion. The

February 18, 2003 letter made no mention of the Plan or the

SPD. The letter also did not cite ERISA. Although the letter

asked for “[a]ll documents of any nature which relate, reflect or

refer the QDRO adjustment to Mr. Kollman’s benefits whenever

such documents were generated, created or stored[,]” App. at

804, that request cannot be interpreted as a request for the Plan

or the SPD. Neither the Plan nor the SPD spoke to the

calculations of Kollman’s personal QDRO adjustment.

Moreover, neither document contains any information relating to

the mistaken estimate of the QDRO nor any information as to

how the mistaken calculation was corrected. Finally, the fact

that Kollman’s attorney initially sent the February 18, 2003 letter

to Hewitt, rather than to the BAC, is indicative of the type of

information Kollman was seeking – documents relating to the

calculation, or miscalculation, of his QDRO. Therefore, we hold

that the District Court’s finding that Kollman’s request was

sufficiently specific under the clear notice test was clearly

erroneous.

We do not hold that a future request for documents is per se

inadequate because it fails to specifically name the documents

sought. Rather, the touchstone is whether the request provides

the necessary clear notice to a reasonable plan administrator of

the documents which, given the context of the request, should be

provided. In this case, the prior communications signaled only

Kollman’s interest in the calculation of his own benefits.

Neither the Plan nor the SPD, when produced, provided any

information along the line of Kollman’s interest. It follows that

Kollman’s letter does not pass the clear notice test.

The only other basis for Kollman’s claim under § 502(c)(1),

29 U.S.C. § 1132(c)(1), was the alleged violations of §

404(a)(1)(D) of ERISA, 29 U.S.C. § 1104(a)(1)(D). That

section requires the plan administrator to “discharge his duties

with respect to a plan . . . in accordance with the documents and

instruments governing the plan . . . .” Kollman argues that

because the Plan states that a claimant is entitled to copies “of all

documents, records and other information relevant to the claim,”

12

App. at 397, the failure to produce the Plan and the SPD violated

Rohm and Haas’s fiduciary duty under § 404(a)(1)(D) of

ERISA, thereby incurring the penalty assessed under § 502(c)(1)

of ERISA, 29 U.S.C. § 1132(c)(1). The District Court was not

persuaded. The Court applied our holding in Groves mandating

that § 502(c)(1) should be narrowly construed. It found that the

link between § 404(a)(1)(D) and § 502(c)(1) was too attenuated

because § 502(c)(1) applies to failures under ERISA and not to

those under the Plan. See 29 U.S.C. § 1132(c)(1) (“Any

administrator . . . who fails or refuses to comply with a request

for any information which such administrator is required by this

subchapter to furnish to a participant or beneficiary . . . may . . .

be personally liable . . . .”) (emphasis added).

We agree. As we noted above, in Groves we held that the

defendants’ failure to provide information required by federal

regulations did not state a claim under ERISA § 502(c)(1). We

stated, “the words ‘this subchapter’ in § 502(c) refer only to

violations of statutorily imposed obligations, and that the term

does not embrace violations of regulations promulgated pursuant

to the statute.” Groves, 803 F.2d at 111. We went on to state

that liability under § 502(c) “can be imposed on plan

administrators only if they fail to fulfill an obligation [that]

ERISA imposes directly upon them,” id. at 113, and that “§

502(c) subjects plan administrators to liability only for failure or

refusal to release the information that Subchapter 1 of ERISA

specifically requires plan administrators to release.” Id. at 116.

Kollman’s theory fails because the connection between §

404(a)(1)(D) and § 502(c)(1) is too tenuous. Section

404(a)(1)(D) does not contain language that directly imposes

information obligations on plan administrators. It is addressed

only to fiduciaries. Therefore, that section cannot be used as the

basis for a penalty under § 502(c)(1) of ERISA. In addition, §

502(c)(1) states that a penalty is only permitted for failure to

provide information required by “this subchapter,” and

Kollman’s claim is based on the Plan’s mandate to provide

information, rather than ERISA’s.

We will therefore reverse the District Court’s judgment

holding that Rohm and Haas was liable for the statutory

13

penalties imposed under ERISA § 502(c)(1), 29 U.S.C. §

1132(c)(1). It follows that the grant of attorneys’ fees to

Kollman will also be reversed.

IV.

Professional Malpractice Claim

In his appeal, Kollman argues that the District Court erred

in holding that his professional malpractice claim against Hewitt

was preempted by ERISA. Section 514(a) of ERISA provides:

“Except as provided in subsection (b) of this section, the

provisions of this subchapter and subchapter III of this chapter

shall supersede any and all State laws insofar as they may now

or hereafter relate to any employee benefit plan . . . .” 29 U.S.C.

§ 1144(a). In Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41

(1987), the Supreme Court gave § 514(a) a broad reading,

stating: “[T]he phrase ‘relate to’ [is] given its broad common-

sense meaning, such that a state law ‘relate[s] to’ a benefit plan

in the normal sense of the phrase, if it has a connection with or

reference to such a plan.” Id. at 47 (quoting Metro. Life Ins. Co.

v. Mass., 471 U.S. 724, 739 (1985) (internal quotation marks

omitted)).

It is no secret to judges and lawyers that the courts have

struggled with the scope of ERISA preemption. Kollman argues

that the Supreme Court narrowed the scope of § 514(a) in its

decision in N.Y. State Conference of Blue Cross & Blue Shield

Plans v. Travelers Ins. Co., 514 U.S. 645 (1995). In Travelers,

the Court reversed the decision of the Second Circuit that had

held that a New York statute that required hospitals to collect

surcharges from patients depending on the type of insurance they

carried was preempted by ERISA. In holding there was no

preemption, the Supreme Court noted that the purpose of §

514(a) was to “‘eliminat[e] the threat of conflicting and

inconsistent State and local regulation.’” Id. at 657 (quoting 120

Cong. Rec. 29192, 29197 (1974) (statement of Rep. Dent)). In

the Travelers decision, the Court did not establish a generally

applicable rule that could be used to determine preemption in

different fact situations. Therefore, we must make the

preemption decision in light of the purpose underlying § 514(a)

14

and, of course, the applicable precedents from opinions of the

Supreme Court and this court.

We derive some insight from the Supreme Court’s decision

in Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990),

because the issue in that case was preemption of a

state tort claim, as in this case. The Court determined that a

judicially created cause of action similar to a claim for wrongful

discharge was preempted. Plaintiff, a former employee, filed

suit against his former employer alleging termination by his

employer to avoid contributing to the ERISA pension plan. In

holding the cause of action preempted, the Court characterized

ERISA § 514(a) as “ERISA’s broad pre-emption provision,” and

cited as well ERISA § 510, 29 U.S.C. § 1140, “which proscribes

interference with rights protected by ERISA; and [ERISA] §

502(a), 29 U.S.C. § 1132(a), a ‘carefully integrated’ civil

enforcement scheme that ‘is one of the essential tools for

accomplishing the stated purposes of ERISA.’” Id. at 137

(quoting Pilot Life, 481 U.S. at 41, 52, 54).

The Court in Ingersoll-Rand stated that the preemption

question requires a determination of congressional intent, “the

ultimate touchstone.” Id. at 138 (internal quotation marks and

citation omitted). The Court noted that Congress had

underscored its intent that § 514(a) be expansively applied by

using “equally broad language in defining the ‘State law’ that

would be pre-empted. Such laws include ‘all laws, decisions,

rules, regulations, or other State action having the effect of

law.’” Id. at 138-39 (quoting ERISA § 514(c)(1)). The Court

concluded that the unlawful discharge claim that the plaintiff had

filed was preempted because “[a]llowing state based actions like

the one at issue here would subject plans and plan sponsors to

burdens not unlike those that Congress sought to foreclose

through § 514(a).” Id. at 142. Of particular interest is the

Court’s comment that “state courts, exercising their common law

powers, might develop different substantive standards applicable

to the same employer conduct, requiring the tailoring of plans

and employer conduct to the peculiarities of the law of each

jurisdiction.” Id. That outcome, the Court stated, “is

fundamentally at odds with the goal of uniformity that Congress

sought to implement.” Id.

15

Although the Court in Ingersoll-Rand was addressing the

concern of employers and ERISA plan managers, the same

consideration is equally applicable to agents of employers, such

as Hewitt, who undertake and perform administrative duties for

and on behalf of ERISA plans. To subject such companies to the

differing state court interpretations of the tort of professional

malpractice would create obstacles to the uniformity of plan

administration that was and is one of ERISA’s goals.

Kollman relies on this court’s decision in Painters of Phila.

Dist. Council No. 21 Welfare Fund v. Price Waterhouse, 879

F.2d 1146 (3d Cir. 1989), for his argument that his claim of

professional malpractice against Hewitt is not subject to

preemption because Hewitt is supposedly a nonfiduciary.

Notwithstanding some dictum on which Kollman relies, the

situations are much different. Painters involved a suit by a

plan’s trustees against the plan’s accountant/auditor for failure to

uncover the fraudulent activity in which the fund’s administrator

had engaged. It is not surprising that we held that ERISA

preemption does not generally preempt professional malpractice

actions “brought by a plan,” id. at 1153 n.7, as such actions are

unlikely to interfere with plan administration.5 Congress was

concerned with subjecting plans to burdens, and said nothing

about actions by plans. As noted above, the ERISA preemption

provision was designed to “eliminat[e] the threat of conflicting

or inconsistent State and local regulation of employee benefit

plans.” 120 Cong. Rec. 29928, 29933 (1974) (statement of Sen.

Williams); see also Pilot Life, 481 U.S. at 46 (quoting same).

Indeed, in a number of other cases, courts of appeals have

held that state law malpractice claims brought by or on behalf of

ERISA plans were not preempted. See Gerosa v. Savasta & Co.,

Inc., 329 F.3d 317, 330 (2d Cir. 2003) (a malpractice claim

brought by plan trustees against a plan actuary not preempted);

Custer v. Sweeney, 89 F.3d 1156, 1167 (4th Cir. 1996) (trustee’s

5

Nor did the dictum suggest that professional malpractice

suits would never be preemptive. The Court stated that “ERISA

does not generally preempt state professional malpractice actions,”

id. at 1153 n.7 (emphasis added).

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state law legal malpractice claim against an ERISA plan’s

attorney not subject to ERISA preemption); Airparts Co., Inc. v.

Custom Benefit Servs. of Austin, 28 F.3d 1062, 1064 (10th Cir.

1994) (ERISA did not preempt state law claims brought by

trustees of an ERISA plan against a non-fiduciary firm “hired by

plaintiffs to provide expert benefit plan consultation”). The

Fourth Circuit, in holding that a malpractice claim by the trustee

is not preempted, noted that the defendant, the attorney sued by

the ERISA trustee, “has not cited a single decision holding that

ERISA preempts a malpractice or professional negligence claim

against a service provider to an ERISA plan.” Sweeney, 89 F.3d

at 1167. Kollman cites these decisions in support of his effort to

overturn the District Court’s decision dismissing his malpractice

action against Hewitt, an ERISA plan agent, as preempted. The

argument is unpersuasive. There is no reason why ERISA’s

preemptive scope would reach state law malpractice claims filed

by ERISA plans or trustees because such claims do not

undermine the congressional policies that underlie ERISA.

Preemption under § 514(a) covers “any and all State laws”

that “relate to” an ERISA plan. 29 U.S.C. § 1144(a). A claim

that an attorney, accountant or other service provider was

negligent does not “relate to” the plan although the negligent act,

which provided the basis for the malpractice suit by the plan,

may have adversely affected the plan. As the trustee of a plan

argued in Sweeney, “professional negligence and malpractice

claims against third-party service providers to an ERISA plan do

not implicate the essential functions of an employee benefit plan,

such as funding, benefits, reporting, and administration . . . .”

Sweeney, 89 F.3d at 1165 (internal quotation marks omitted).

As always, the relevant question is how such suits should be

viewed in light of the purpose of the ERISA preemption

provision, § 514(a). The analysis of the courts that have held

such claims not preempted because they do not “relate to” an

ERISA plan are consistent with this view. A claim by the plan

that an agent negligently acted in some way causing injury to the

plan does not implicate the funding, benefits, reporting or

administration of an ERISA plan. Instead, the purpose of the

ERISA preemption is to eliminate claims that would interfere

with the ERISA plans.

17

An example of the type of action against an ERISA plan

that is not preempted is provided by the decision in Mackey v.

Lanier Collection Agency & Serv., Inc., 486 U.S. 825 (1988)

(holding that a state action garnishing funds due to participants

in an ERISA employee welfare benefit plan not preempted). In

Mackey, the Court made clear that the broad protection afforded

by § 514(a) notwithstanding, general state enforcement

mechanisms can be used to reach a participant’s benefits. It is in

this context that we must consider the frequently cited quotation

from the Mackey opinion where the Court explained that ERISA

does not preempt “run-of-the-mill state-law claims such as

unpaid rent, failure to pay creditors, or even torts committed by

an ERISA plan. . . .” Id. at 833. Thus, although some ordinary

state law or common law claims may be asserted against an

ERISA plan, such suits do not interfere with the essential role of

an ERISA plan.

In contrast, the claim that Kollman asserts against Hewitt

goes to the essence of the function of an ERISA plan – the

calculation and payment of the benefit due to a plan participant.

As the District Court recognized, “[i]n order to determine

whether [the calculation] error constituted malpractice, [the]

Court would necessarily need to consult the Plan to determine

such issues as whether the calculation was in error, whether the

Plan includes provisions regarding the representations of Lump

Sum Payout amounts made on the Website or by [Hewitt’s]

customer service personnel, and whether the Plan includes

provisions regarding representations of Lump Sum Payout

amounts before claims for benefits are actually submitted.”

Kollman v. Hewitt, No. Civ. A. 03-2944, 2004 WL 1211961, at

*3 (E.D. Pa. Apr. 14, 2004). Such claims are plainly preempted.

See, e.g., Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 418 (4th

Cir. 1993) (holding that plaintiff’s claim for “past and future

health care benefits” was preempted by ERISA).

The rationale for these holdings is that “[a]llowing

beneficiaries to assert state law claims against non-fiduciary plan

administrators . . . would upset the uniform regulation of plan

benefits intended by Congress.” Howard v. Parisian, Inc., 807

F.2d 1560, 1565 (11th Cir. 1987). ERISA itself contains a civil

enforcement scheme referred to in Ingersoll-Rand which

18

provides the mechanism for claims by beneficiaries or plan

participants to question or challenge the provision or amount of

benefits. See 29 U.S.C. § 1132(a). Any adjudication of

Kollman’s state law malpractice claim would necessarily require

a court to consider the Plan in detail in order to properly address

Kollman’s arguments outside the mechanism prescribed by

ERISA. Such an outcome is precisely what Congress sought to

avoid in developing a nationwide scheme for ERISA plans. See

29 U.S.C. § 1144(a). Thus, we will affirm the District Court’s

dismissal of Kollman’s professional malpractice claim.

V.

Conclusion

For the reasons set forth above, the District Court’s Order

of October 18, 2005 is reversed. The Court’s April 14, 2004

order dismissing Kollman’s professional malpractice claim is

affirmed.

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