Appendix — First National Life Insurance v. Sunshine-Jr. Food Stores, Inc.

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APPENDIX

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IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 90-7535 & 90-7668

FIRST NATIONAL LIFE INSURANCE COMPANY,

an Alabama Corporation,

Plaintiff-Appellant,

versus

SUNSHINE JR. STORES, INC.,

a Florida Corporation,

Defendant-Appellee.

FIRST NATIONAL LIFE INSURANCE COMPANY,

an Alabama Corporation,

Plaintiff-Appellee,

versus

SUNSHINE JR. STORES, INC.,

a Florida Corporation,

Defendant-Appellant.

On Appeal from the United States District Court for the

Middle District of Alabama

FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

JUL 30 1992

MIGUEL J. CORTEZ

CLERK ~

ON PETITION(S) FOR REHEARING AND

SUGGESTION(S) OF REHEARING EN BANC

Before:

PER CURIAM:

(7) The Petition(s) for Rehearing are DENIED and no

member of this panel nor other Judge in regular active

service on the Court having requested that the Court be

polled on rehearing en banc (Rule 35, Federal Rules of

Appellate Procedure; Eleventh Circuit Rule 35-5), the Sug-

gestion(s) of Rehearing En Banc are DENIED.

( ) The Petition(s) for Rehearing are DENIED and the

Court having been polled at the request of one of the

members of the Court and a majority of the Circuit Judges

who are in regular active service not having voted in favor

of it (Rule 35, Federal Rules of Appellate Procedure; Elev-

enth Circuit Rule 35-5), the Suggestion(s) of Rehearing En

Banc are also DENIED.

( ) A member of the Court in active service having re-

quested a poll on the reconsideration of this cause en banc,

and a majority of the judges in active service not having

voted in favor of it, Rehearing En Banc is DENIED.

ENTERED FOR THE COURT:

/s/ R. Lanier Anderson, III

UNITED STATES CIRCUIT JUDGE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 90-7535

D.C. Docket No. 88-T-575-N

FIRST NATIONAL LIFE INSURANCE COMPANY,

an Alabama Corporation,

Plaintiff-Appellant,

versus

SUNSHINE-JR. STORES, INC..

A Florida Corporation,

Defendant-Appellee.

90-7668

D.C. Docket No. 88-T-575-N

FIRST NATIONAL LIFE INSURANCE COMPANY,

an Alabama Corporation,

Plaintiff-Appellee,

versus

SUNSHINE-JR. STORES, INC..

a Florida Corporation,

Defendant-Appellant.

Appeals from the United States District Court

for the Middle District of Alabama

FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

MAY 13 1992

MIGUEL J. CORTEZ

CLERK

Before ANDERSON, Circuit Judge, CLARK*, Senior Circuit

Judge, and BROWN**, Senior District Judge.

* See Rule 34-2(b), Rules of the U.S. Court of Appeals for the Elev-

enth Circuit.

** Honorable Wesley E. Brown, Senior U.S. District Judge for the

District of Kansas, sitting by designation.

JUDGMENT

These causes came to be heard on the transcript of the

record from the United States District Court for the Mid- ™

dle District of Alabama, and were argued by counsel;

ON CONSIDERATION WHEREOF, it is now hereby or-

dered and adjudged by this Court that the judgment of

the said District Court in these causes be and the same

is hereby AFFIRMED;

It is further ordered that plaintiff-appellant pay

defendant-appellee the costs on appeal to be taxed by the

Clerk of this Court.

“t

on te

CLARK, Senior Circuit Judge, specially concurred and

filed an opinion.

Entered: May 13, 1992

For the Court: Miguel J. Cortez, Clerk

By: /s/ Karleen McNabe

Deputy Clerk

ISSUED AS MANDATE: August 10, 1992

UNITED STATES COURT OF APPEALS,

ELEVENTH CIRCUIT

Nos. 90-7535, 90-7668.

FIRST NATIONAL LIFE INSURANCE COMPANY,

an Alabama Corporation,

Plaintiff-Appellant,

SUNSHINE-JR. FOOD STORES, INC.,

a Florida Corporation,

Defendant-Appellee,

FIRST NATIONAL LIFE INSURANCE COMPANY,

an Alabama Corporation,

Plaintiff-Appellee,

SUNSHINE-JR. FOOD STORES, INC.,

a Florida Corporation,

Defendant-Appellant.

May 13, 1992.

Insurer under life and health policy used to provide

funding for employee benefits program sued insured em-

ployer, claiming breach of contract, under both Alabama

state law and ERISA. The United States District Court

for the Middle District of Alabama, No. 88-T-575-N, Myron

H. Thompson, Chief Judge, entered judgment for insured”

employer, and appeal was taken. The Court of Appeais,

Wesley E. Brown, Senior District Judge, sitting by des-

ignation, held that: (1) ERISA preempted state law causes

of action; (2) employer was not ‘“‘fiduciary’”’ of insurer un-

der ERISA, in connection with its claims processing activ-

ity; and (3) employer was not entitled to attorney fees.

eee

Affirmed.

Clark, Senior Circuit Judge, concurred specially and filed

opinion.

*_ s+ *& &

Appeals from the United States District Court for the

Middle District of Alabama.

Before ANDERSON, Circuit Judge, CLARK*, Senior Cir-

cuit Judge, and BROWN**, Senior District Judge.

WESLEY E. BROWN, Senior District Judge:

This suit concerns a group life and health insurance

policy issued by First National Life Insurance Company

(“FNL”). The policy was used to fund an employee welfare

benefit plan established by Sunshine-Jr. Food Stores, Inc.

(‘‘Sunshine’’) to provide health benefits to its employees.

The policy was in effect from August 1, 1983, until August

1, 1986. On this latter date, Sunshine terminated its policy

with FNL and obtained coverage from another insurer.

FNL subsequently filed this action asserting various state

claims against Sunshine, including breach of contract and

misrepresentation, as well as a claim for relief under the

Employee Retiremezt Income Security Act, (“ERISA’”’) 29

U.S.C. § 1001, e. seq. The district court held that all of

the state law claims asserted by FNL were preempted by

ERISA. The ERISA claims were tried to the court. After

hearing the evidence, the district court determined that

FNL was not entitled to relief and entered judgment in

favor of Sunshine. FNL appeals, raising several grounds

for error.

* See Rule 34-2(b), Rules of the U.S. Court of Appeals for the Elev-

enth Circuit.

** Honorable Wesley E. Brown, Senior U.S. District Judge for the

District of Kansas, sitting by designation.

Facts

Sunshine operates a chain of convenience stores. During

the time period at issue here, Sunshine had about 2,000

employees. The company provided group health benefits

to its employees through a fully insured plan. Eligible em-

ployees who wished to participate in the plan paid one-

half of the premium for insurance benefits and Sunshine

paid the other half. Prior to August of 1983, Sunshine

provided benefits through a group policy with Aetna In-

surance Company. In 1983, Sunshine began looking for

another insurance carrier because of Aetna’s rising pre-

miums. The company contacted Frank Ayers, an insurance

broker in Tallahassee, Florida. With Ayers’ aid, Sunshine

eventually chose FNL as insurer for its plan. The new

group policy between these parties took effect on August

1, 1983.

Under the policy, FNL provided health, medical, and

disability coverage to all employees of Sunshine who

worked a minimum of 30 hours a week or a minimum of

1,000 hours each year. Sunshine bore the responsibility of

enrolling all employees who were eligible to participate

and wished to do so. The policy provided that Sunshine

would enroll at least seventy-five percent of its eligible

employees in the plan.

The policy did not expressly set forth the details of how

the plan was to be administered. Nevertheless, the parties

followed a relatively well-defined allocation of administra-

tive responsibilities. For every billing period, Sunshine pre-

pared a computer printout of its currently enrolled

employees, calculated and collected the appropriate pre-

miums, and forwarded a premium check along with the

printout to Frank Ayers. Ayers and his employees in turn

copied the printout and forwarded the materials to FNL.

FNL deposited the premium check into its general assets

accounts.

_— 9a

As to the claims process, employees or their health care

providers typically submitted claims to Sunshine. The com-

pany would verify the employment status of the claimants

and forward the claims to Ayers. Ayers would then check

the accuracy of the claim and determine the appropriate

rate under the policy. During the first year the policy was

in effect, Ayers would send the claim to FNL, which would

then issue a benefit check. In the later two years of the

policy, FNL authorized Ayers to write benefit checks on

its bank account. Ayers received a six percent commission

from FNL on the Sunshine policy.

Sunshine ended its relationship with FNL in August of

1986, on the third anniversary of the policy. Again with

Ayers’ assistance, the company found a new insurer for

its employee benefit plan. FNL later filed this suit. In

addition to the claims asserted under state law, appellant

sought monetary relief under ERISA based upon alleged

breaches of the policy by Sunshine. The alleged breaches

included the improper payment of benefits and the failure

to maintain seventy-five percent employee participation in

the plan.

Issues on Appeal

a. Preemption

The first issue raised by appellant FNL is whether the

district court erred in finding that all of FNL’s state law

claims were preempted by ERISA. In its amended com-

plaint, FNL alleged claims against Sunshine for breach of

contract, breach of the duties of due care and good faith,

willful and wanton conduct, misrepresentation, and an ac-

tion under the Alabama Code for failure to disclose ma-

terial facts. FNL apparently contends that these state

claims should not be preempted because they do not “‘re-

late to” an employee benefit plan and are therefore outside

the scope of ERISA’s preemption clause. Appellant also

suggests that the state law claims do not create a conflict

10a

with the purpose of the preemption provision. Finally, ap-

pellant argues that preemption is inappropriate because

FNL has no adequate remedy under ERISA for the wrongs

allegedly committed by the appellee.

We note initially that appellant does not challenge the

district court’s finding that the policy was part of an em-

ployee welfare benefit plan covered by ERISA. See 29

U.S.C. § 1002. See also Donovan v. Dillingham, 688 F.2d

1367 (11th Cir. 1982) (en banc). The district court found

that the ERISA plan incorporated the terms of the group

policy. R3-78-7. And, although Sunshine apparently had no

formal written plan, the district court determined what

the terms of the plan were at least in part from the course

of dealing between FNL and Sunshine.

“In deciding whether a federal law preempts a state

statute, our task is to ascertain Congress’ intent in en-

acting the federal statute at issue.’’ Shaw v. Delta Air-

lines, Inc., 463 U.S. 85, 95, 103 S.Ct. 2890, 2898, 77

L.Ed.2d 490 (1983). Under ERISA, Congress’ intent is set

forth expressly in the statutory language, which generally

preempts ‘‘any and all State laws insofar as they may now

or hereafter relate to any employee benefit plan” covered

by ERISA. 29 U.S.C. § 1144(a). The preemption provision

is ‘deliberately expansive and designed to ‘establish pen-

sion plan regulation as exclusively a federal concern.’ ’’

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46, 107 S.Ct.

1549, 1552, 95 L.Ed.2d 39 (1987). The Supreme Court has

consistently recognized the expansive sweep of the

preemption clause. Jd.

In Amos v. Blue Cross-Blue Shield of Alabama, 868 F.2d

430 (11th Cir.), cert. denied, 493 U.S. 855, 110 S.Ct. 158,

107 L.Ed.2d 116 (1989), this court addressed the question

of whether certain state law claims arising out of an al-

leged wrongful denial of benefits under an employee wel-

fare plan were preempted by § 1144(a). The plaintiff in

Amos asserted common law causes of action for bad faith

lla

refusal to pay benefits, fraud, and breach of contract. We

concluded that the claims were preempted, stating ‘‘there

can be no dispute that the common law causes of action

asserted by the plaintiffs ... ‘relate to’ an employee ben-

efit plan and therefore fall within ERISA’s express preemp-

tion clause.’”’ Jd. at 431. See also Phillips v. Amoco Oil

Co., 799 F.2d 1464, 1469-70 (11th Cir. 1986).

In the instant case, FNL seeks damages based on Sun-

shine’s alleged mishandling of benefit payments and its

alleged failure to adhere to terms of the group policy which

were incorporated into the welfare benefit plan. We must

reject the argument that these claims do not “relate to’’

the employee benefit plan. Congress used the words “re-

lates to”’ in their broad sense and did not mean to preempt

only state laws specifically designed to affect employee

benefit plans. Shaw v. Delta Air Lines, Inc., 463 U.S. 85,

97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983). A state

law relates to an employee benefit plan if it “has a con-

nection with or reference to such a plan.” Jd. The claims

asserted by FNL have an obvious connection with the plan

in this case. They are founded upon Sunshine’s alleged

failure to adhere to its obligations under the group policy

which funded Sunshine’s welfare benefit plan. Cf. Amos,

868 F.2d at 430. The district court found that the plan

incorporated the terms of the policy. These claims “relate

to” the welfare benefit plan.

Appellant maintains that preemption is not appropriate

because its state claims are consistent with the purposes

behind ERISA and the preemption provision. FNL argues

that preemption of state laws was designed to preserve

consistency and to prevent the imposition of conflicting

requirements in benefit plans. According to FNL, the main-

tenance of its claims against Sunshine does not conflict

with any of the objectives of ERISA. But the preemption

provision displaces all state laws that fall within its sphere,

even including state laws that are consistent with ERISA’s

substantive requirements. Mackey v. Lanier Collection

12a

Agency, 486 U.S. 825, 829, 108 S.Ct. 2182, 100 L.Ed.2d

836 (1988). Moreover, state contract and tort laws that

impose varying standards upon the administrator of a wel-

fare benefit plan create a significant potential for conflict

with ERISA and thus are logically preempted. As we noted

earlier, Congress deliberately wrote § 1144(a) in a broad

manner in order to make pension plan regulation exclu-

sively a federal concern.

Nor is the argument that ERISA provides an inadequate

remedy a sufficient reason to overcome the application of

§ 1144(a). The question of preemption is a matter of

congressional intent; it is not a question of which body of

law—state or federal—offers more protection to an ag-

grieved party. Phillips v. Amoco Oil Co., 799 F.2d 1464,

1470 (11th Cir. 1986) (‘To argue that Congress created a

‘gap’ in the law does not undermine the reasoning on

which a finding of preemption is based.’’). The claims as-

serted here fall within the range of state laws that relate

to an employee benefit plan. For these reasons, we find

that the district court correctly held that the plaintiff's

state law claims were preempted by ERISA.

b. Relief under ERISA

FNL’s next argument is that the district court erred in

refusing to order Sunshine to render an accounting to

FNL. FNL believes it is entitled to an accounting to de-

termine if Sunshine complied with the insurance agree-

ment. FNL contends that Sunshine stood in a fiduciary

capacity as to FNL and is therefore obligated to render

an accounting. Appellant also argues that an accounting

is appropriate because the accounts at issue were mutual

and complicated.

The district court concluded that although Sunshine was

a fiduciary with respect to the plan, it was not a fiduciary

with respect to FNL. FNL challenges this finding, con-

tending that Sunshine’s exclusive access to employee rec-

ords rendered it a fiduciary with a duty to account to

13a

FNL. Clearly, the fiduciary duties outlined in ERISA are

designed to protect the plan and its beneficiaries rather

than those who administer the plan. See e.g., 29 U.S.C.

§ 1002(21A) (defining “fiduciary” with respect to a plan).

See also §§ 1104 and 1109. Appellant has not pointed to

any ERISA provision that would impose a fiduciary duty

upon Sunshine with respect to FNL. Cf. Massachusetts Mut.

Life Ins. Co. v. Russell, 473 U.S. 134, 139, 105 S.Ct. 3085,

3089, 87 L.Ed.2d 96, 102 (1985) (Under § 1109(a), the rel-

evant fiduciary relationship is one with respect to the plan.)

Nor was the relationship between FNL and Sunshine such

that Sunshine could be held accountable as a fiduciary.

FNL entered into the policy with Sunshine as part of an

arm’s-length transaction. FNL was’ free to negotiate such

terms as it thought necessary for its protection. It did not

enter this transaction dependent on the whim of Sunshine;

in fact, FNL drafted the policy that served as the basis

of the welfare benefit plan. FNL’s claims that it could not

examine Sunshine’s records are not sufficient to establish

a fiduciary duty on the part of Sunshine to make an ac-

counting. Moreover, as the district court noted, Sunshine’s

records were made available to FNL in the course of this

suit. R3-78-21. In light of the fact that FNL had the Op-

portunity to examine the records, it is not clear why it

would be entitled to an order directing Sunshine to make

an accounting. FNL has shown no circumstances to justify

such an order. We find no error in the district court’s

refusal to order an accounting.

Appellant’s next assertion of error relates to its claim

for damages arising out of Sunshine’s alleged failure to

insure the minimum level of participation specified in the

policy. Under the FNL policy, Sunshine promised to enroll

seventy-five percent of all eligible employees in the plan.

FNL argued that Sunshine’s alleged failure to meet this

requirement resulted in lost profits of approximately

$234,000. The district court, after hearing the evidence,

denied relief on this claim for two reasons. First, the court

l4a

concluded that the contract between the parties specified

that the only remedy for a breach of this duty was for

FNL to terminate the policy. Second, the court found that

FNL failed to prove any damages from the alleged breach. |

FNL disputes both of these findings. We need not address

the first finding by the district court because we conclude

that the second finding is dispositive of appellant’s alle-

gation of error on its ‘‘seventy-five percent” claim.

Appellant’s calculation of lost profits was based on an

assumption that if additional Sunshine employees had been

enrolled in the plan, the claims asserted by those employ-

ees would have amounted to seventy-five percent of the

additional premiums that would have been generated. The

district court found FNL’s estimate was ‘‘entirely too spec-

ulative a basis on which to award relief.’’ R3-78-14. The

court observed that FNL “did not support its assertion

that it would have enjoyed a 75% ratio of claims to pre-

mium income with any persuasive evidence” and charac-

terized FNL’s profit estimates as ‘‘implausibly rosy.”’ Jd.

By way of argument, FNL asserts the familiar rule that

lost profits should not be denied simply because the amount

of damages is difficult to ascertain. This rule is most often

invoked when the difficulty in determining the amount of

damages is a result of the defendant’s wrongdoing. See

e.g., Anderson v. Mt. Clemens Pottery Company, 328 U.S.

680, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946). The rule is of

no benefit, however, where the complaining party fails to

prove that the defendant’s conduct caused some injury. Jd.

at 688, 66 S.Ct. at 1192. In the instant case, the district

court found that FNL ‘did not prove that this alleged

violation of the plan caused it any harm.” R3-78-13. This

finding is a determination of fact that we will reverse only

if it is clearly erroneous. Fed.R.Civ.P. 52(a). In this in-

stance the district court was not clearly erroneous. There

was evidence presented from which the court could have

reasonably concluded that increased participation by Sun-

shine employees woild not have resulted in any profit to

15a

FNL. The court may have found persuasive the evidence

suggesting that FNL’s group policies were operating at a

loss. Sunshine introduced evidence tending to show that

FNL’s average loss ratio on group policies was much higher

than FNL estimated—high enough that FNL might have

lost money on such groups. The court noted that the years

covered by this suit were considered peak bad years for

health care insurers and that FNL in large part left the

group health insurance field shortly after this incident. In

addition, FNL’s witnesses acknowledged that they could

not state with any reasonable certainty what the loss ratio

would have been if the additional Sunshine employees had

been enrolled in the plan. Considered as a whole, the re-

cord supports the district court’s finding. FNL had the

burden of demonstrating that it suffered damages from

the alleged breach by Sunshine.

c. Agency

Part of FNL’s claim was that Frank Ayers, an insurance

agent, made improper overpayments to beneficiaries of the

plan. FNL argued in the district court that Sunshine was

liable for these overpayments because Ayers was acting

as the agent of Sunshine when he paid the claims. The

trial court, however, found that “either Ayers acted in-

dependently in processing claims or he acted as First Na-

tional’s agent in this function.’”’ R3-78-16. The court further

stated that “First National, not Sunshine Jr., monitored

and supervised Ayers in processing claims... .” Jd. Ap-

pellant believes these findings are erroneous.

As appellant recognizes, the district court’s determina-

tion of this issue is subject to review under the clearly

erroneous standard. We will not reverse “if the district

court’s account of the evidence is plausible in light of the

record viewed in its entirety....’’ Anderson v. Bessemer

City, 470 U.S. 564, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985).

In light of this standard we have little trouble affirming

the finding of the district court. Evidence was presented

16a

at trial which suggested that Ayers processed claims on

behalf of and under the supervision of FNL. See e.g., R.Vc!.

VII at 230-32. If Ayers had not processed the claims, FNL

would have performed that task itself. Jd. Pursuant to an

agreement between Ayers and FNL, Ayers received a six

per cent commission from FNL as compensation for his

work. FNL authorized Ayers to sign checks on the FNL

account to make benefit payments. Taken as a whole, the

evidence supports a conclusion that Ayers processed the

claims as the agent of FNL. See Restatement (Second) of

Agency §1 (“‘Agency is the fiduciary relationship which

results from the manifestation of consent by one person

to another that the other shall act on his behalf and subject

to his control, and consent by the other so to act.’’).

d. Benefits paid to ineligible employees

Appellant also sought damages from Sunshine under 29

U.S.C. § 1132(aX3) for benefits paid to Sunshine employees

who were not eligible under the health insurance plan.

Pursuant to the course of dealing between FNL and Sun-

shine, Sunshine bore the responsibility for verifying the

employment status of claimants. FNL alleges that it paid

over $40,000 to three claimants who were erroneously cer-

tified by Sunshine as eligible employees. FNL asked the |

court to award it compensatory damages for Sunshine’s

failure to insure proper certification of these employees. |

The district court held that even if Sunshine violated the

terms of the plan, FNL was not entitled to any damages

therefrom because such relief was not equitable in nature

and was not authorized by § 1132(a\3).

Section 1132(aX3) authorizes a civil action to be brought:

by a participant, beneficiary, or fiduciary (A) to

enjoin any act or practice which violates any provision

of this subchapter or the terms of the plan, or (B) to

obtain other appropriate equitable relief (i) to redress

such violations or (ii) to enforce any provisions of this

subchapter or the terms of the plan.

17a

The scope of the phrase “other appropriate equitable

relief’ has caused the courts some difficulty. In Bishop v.

Osborn Transportation, Inc., 838 F.2d 1173 (llth Cir.

1988), we held that a beneficiary could not obtain punitive

damages under § 1132(aX3). In so holding, we relied on

the Supreme Court’s observation in Massachusetts Mutual

Life Ins. Co. v. Russell, 473 U.S. 134, 146, 105 S.Ct. 3085,

3092, 87 L.Ed.2d 96, 106 (1985) that:

the six carefully-integrated civil enforcement provi-

sions found in section [1132] ... provide strong evi-

dence that Congress did not intend to authorize other

remedies that it simply forgot to incorporate ex-

pressly. The assumption of inadvertent omission is

rendered especially suspect upon close consideration

of ERISA’s interlocking, interrelated, and interdepen-

dent remedial scheme, which is in turn part of a ‘com-

prehensive and reticulated statute.’

We also noted that the civil enforcement provisions of

§ 1132(a) focus heavily on the beneficiary’s right to enforce

the terms of the plan and do not mention the recovery of

extra-contractual damages. Bishop, 838 F.2d at 1174. We

concluded that punitive damages did not come within the

remedies authorized by § 1132(aX3), stating: ‘Punitive

damages are just that, damages, and are not ordinarily

incorporated by the term ‘equitable relief.’ ” Jd. (citing

Sokol v. Bernstein, 803 F.2d 532, 537-38 (9th Cir. 1986)).

In Sokol, the court declared that “it appears Congress used

the word ‘equitable’ to mean what it usually means—in-

junctive or declaratory relief.’ Although this latter dec-

laration may be somewhat over-restrictive, we cannot

ignore the fact that the statute limits the relief available

to equitable relief. Despite this, FNL has cast its claim as

one for legal relief and argues that it is entitled to an

award of compensatory damages for breach of the plan’s

terms. We must reject FNL’s argument that the phrase

“equitable relief’ in § 1132(aX3) authorizes an award of

18a

compensatory damages.' The omission of any mention of

a right to legal remedies in § 1132(aX3) must be taken as

an indication of Congress’ intent to limit the relief avail-

able under this section to that which is equitable in nature.

Cf. Bishop, 838 F.2d at 1174 (Congress appreciated the

distinction between legal and equitable remedies; the re-

striction of § 1132(aX3XB) to equitable relief shows that

Congress did not intend to allow the recovery of punitive

damages under § 1132(a)).

Restitution is an equitable remedy designed to restore

to a plaintiff something of value that is wrongfully in the

possession of another. See Restatement of Restitution (Sec-

ond) § 1 (“‘A person who has been unjustly enriched at the

expense of another is required to make restitution to the

other.’’) Section 1132(aX3) undoubtedly authorizes a fidu-

ciary in certain circumstances to bring an action for res-

titution to recover benefits mistakenly paid out. See Blue

Cross and Blue Shield of Alabama v. Weitz, 913 F.2d 1544,

1549 (11th Cir. 1990). In Weitz, we found that a fiduciary

of an ERISA plan could maintain an action for restitution

under § 1132(aX3) against a physician to whom payments

were made in violation of the plan.

FNL argued in the district court that it was entitled to

an award of restitution from Sunshine. The district court

found that restitution was inappropriate, however, because

the alleged overpayments did not go to Sunshine but in-

stead went to beneficiaries or to health care providers.

The court noted that FNL might have a claim for resti-

‘We express no opinion as to whether a party in appeliant’s position

might ve entitled to some other relief under § 1132(aX3) or relief under

other ERISA provisions. For example, as Judge Clark points out in

his concurring opinion, we do not have before us the issue of an in-

surance company seeking its premiums. Similarly, we are not called on

to decide if ERISA enables a party such as FNL to recover on its

own behalf rather than on behalf of a welfare benefit plan. We have

addressed only those claims asserted by FNL on appeal.

19a

tution against these third parties, cf Weitz, supra, but

concluded that FNL did not have a claim for restitution

against Sunshine. Appellant has not argued on appeal that

the district court’s application of this principle of resti-

tution was incorrect and we find no error in the court’s

ruling. We therefore affirm the district court’s ruling on

this issue.

No. 90-7668

In a cross-appeal, Sunshine contends that the district

court erred by refusing to award Sunshine attorneys’ fees.

Tais issue is governed by 29 U.S.C. § 1132(g\1), which

provides in part: ‘In any action under this subchapter ...

by a participant, beneficiary, or fiduciary, the cort in its

discretion may allow a reasonable attorney’s fee and costs

of action to either party.’’ Sunshine contends that the

district court abused its discretion in deny:ng attorneys’

fees because the suit by FNL had no basis under law. The

district court specifically found, however, that FNL was

not acting in bad faith in bringing the suit and that the

lawsuit presented difficult and close questions of law. After

weighing all of the factors, the district court determined

that an award of fees was not wairanted. This scenario

does not show an abuse of discretion. The district court

considered appropriate factors in determining whether

attorney’s fees should be assessed and the conclusion

reached was well within the broad range of discretion af-

forded to the trial judge.

Conclusion

The judgment of the district court is AFFIRMED.

CLARK, Senior Circuit Judge, specially concurring:

I concur in the result in this case but am troubled by

some inferences in the opinion. This case exemplifies a

type of ERISA case we are seeing more often—the entire

20a

plan consists of an insurance policy. I agree with the ma-

jority that we have to look to 29 U.S.C. § 11382(aX3), which

is quoted on page 1552 of the opinion. That subsection

authorizes the plaintiff insurance company, a fiduciary, to

bring a civil action to obtain relief. The majority states

on page 2421: “Appellant has not pointed to any ERISA

provision that would impose a fiduciary duty upon Sun-

shine with respect to FNL.” Further, on page 2424, the

majority states: ‘‘We must reject FNL’s argument that the

phrase ‘equitable relief’ in § 1132(aX3) authorizes an award

of compensatory damages.”

I can find no cases similar to this one, but my study

of the statute leads me to conclude that a plaintiff situated

as FNL here can collect compensatory damages under cer-

tain circumstances. I repeat that I concur in the result in

this case because FNL failed to make out a case. Never-

theless, it is my view that an employer who secures a

medical insurance policy on its employees becomes a co-

fiduciary pursuant to § 1002(21\A\Xi):

(214A) Except as otherwise provided in subpara-

graph (B), a person is a fiduciary with respect to a

plan to the extent (i) he exercises any discretionary

authority or discretionary control respecting manage-

ment of such plan or exercises any authority or con-

trol respecting management or disposition of its

assets, .... Such term includes any person designated

under section 1105(cX1\B) of this title.

This conclusion finds support in the definitions of ‘plan

sponsor” and ‘administrator’ in § 1002.

Section 1132(aX3) permits an insurance company/fidu-

ciary to obtain an accounting from an employer/co-fidu-

ciary that is necessary to allow the insurance company to

properly administer the plan. This action would include

requiring the employer to furnish the names of all em-

ployees, dates of employment, and other data necessary

to insure coverage and payment of premiums by the em-

2la

ployer for such coverage. Similarly, I conclude that sub-

part (ii) of this section—“‘to enforce any provision of this

subchapter of the terms of the plan’”—permits the insur-

ance company to bring an action for premiums owed for

insurance coverage provided under the plan, even though

such relief might not be strictly classified as ‘‘equitable.”

Any other interpretation of the statute would frustrate

the intention of the statute to include medical insurance

plans within the provisions of ERISA. Insurance companies

would be reluctant to engage in writing such policies if

their rights to collect premiums were limited first by an

interpretation that ERISA preempts all claims by such com-

panies against employers, and then by an interpretation

of ERISA that would limit such claims only to equitable

claims and provide relief only for those who are benefi-

ciaries of such plans. I am inclined to agree with the

majority that ERISA preempts such an action, but I read

§ 1132(aX3) broadly enough to require district courts to

enforce all rights an insurance company has against an

employer that stem from the policy and the relationship

of the parties in administering the plan.

22a

IN THE DISTRICT COURT OF THE UNITED STATES

FOR THE MIDDLE DISTRICT OF ALABAMA,

NORTHERN DIVISION

CIVIL ACTION NO. 88-T-575-N

FIRST NATIONAL LIFE

INSURANCE COMPANY, as [sic] Alabama

Corporation,

Plaintiff,

SUNSHINE JR. STORES, INC., a

Florida corporation,

Defendant.

FILED

JUL 5 1990

CLERK

U.S. DISTRICT COURT

MIDDLE DIST. OF ALA.

JUDGMENT

In accordance with the memorandum opinion entered

this date, it is the ORDER, JUDGMENT, and DECREE of

the court that judgment be and it is hereby entered in

favor of defendant Sunshine Jr. Stores, Inc. and against

plaintiff First National Life Insurance Company; and that

take nothing by its complaint.

It is the further ORDER of the court that costs be and

they are hereby taxed against plaintiff First National Life

Insurance Company, for which execution may issue.

cea inaiiieai lila iid

23a

DONE, this the 5th day of July, 1990.

/s/ Myron H. Thompson

UNITED STATES DISTRICT JUDGE

24a

IN THE DISTRICT COURT OF THE UNITED STATES

FOR THE MIDDLE DISTRICT OF ALABAMA,

NORTHERN DIVISION

CIVIL ACTION NO. 88-T-575-N

FIRST NATIONAL LIFE

INSURANCE COMPANY, as [sic] Alabama

Corporation,

Plaintiff,

SUNSHINE JR. STORES, INC., a

Florida corporation,

Defendant.

FILED

JUL 5 1990

CLERK

U.S. DISTRICT COURT

MIDDLE DIST. OF ALA.

MEMORANDUM OPINION

In this lawsuit, plaintiff First National Life Insurance

Company charges defendant Sunshine Jr. Stores, Inc. with

violations of ERISA, the Employee Retirement Income Se-

curity Act of 1974, 29 U.S.C.A. §§ 1001-1461. The charges

relate to the roles of these two companies in Sunshine

Jr.’s employee group health insurance plan. First National

claims that Sunshine Jr. did not meet and maintain the

75% participation level required by the plan; that an agent

25a

of Sunshine Jr. committed numerous errors in processing

claims resulting in improper payment of claims by First

National; and that Sunshine Jr. improperly enrolled several

persons on the plan. First National also asserts an ac-

counting claim. For the reasons which follow, the court

finds in favor of Sunshine Jr. as to all claims.

Sunshine Jr. is a corporation which owns and operates

a chain of convenience marts in five states in the south-

eastern portion of the United States. During the period

of time encompassing this case, it had approximately 2,000

employees at any given time. The company provided group

health benefits to these employees through a fully insured

plan.’ Participating employees essentially purchased a

health insurance policy, partially subsidized by their em-

ployer. Eligible employees who wished to participate in

the plan paid one-half of the premium for these insured

benefits and Sunshine Jr. paid the other half. Prior to

August 1983, Sunshine Jr. arranged these benefits through

a group policy with Aetna Insurance Company. In 1983,

because of rising premiums with Aetna, Sunshine Jr. began

looking for another insurance carrier for its plan. The

company contacted Frank Ayers, an insurance broker in

Tallahassee, Florida. With Ayers’s aid, Sunshine Jr. even-

tually replaced Aetna with First National as insurer in its

plan. The new group policy between these parties took

effect on August 1, 1983.

Under this policy, First National provided health, med-

ical, and disability coverage to all employees of Sunshine

Jr. who worked either a minimum of 30 hours a week or

a minimum of 1,000 hours each year. Eligibility for ben-

‘On the different means of structuring employee welfare benefit plans,

including fully insured plans and self-insured plans with reinsurance,

see Drexelbrook Engineering Co. v. Travelers Ins. Co., 710 F. Supp.

590, 594-98 (E.D. Pa. 1989), aff'd, 891 F.2d 280 (8rd Cir. 1989) (table).

26a

efits under this policy did not begin until an employee had

worked for the company for six months. Under the plan,

Sunshine Jr. bore the responsibility of enrolling all em-

ployees who were eligible to participate and wished to do

so. The contract directed that the company would enroll

at least 75% of its eligible employees on this policy. If a

Sunshine Jr. employee was covered by a separate health

insurance policy—for example, the employee’s spouse’s

health insurance—then that employee could opt out of cov-

erage under the company’s policy. This feature of the plar

allowed such employees to avoid double coverage and pay-

ment of an additional premium.

The policy did not expressly set out all of the details

of administration of the plan. The parties nonetheless fol-

lowed a relatively well-defined allocation of administrative

responsibilities. For every billing period, Sunshine Jr. pre-

pared a computer printout of its currently enrolled em-

ployees, calculated and collected the appropriate premiums

for this number, and forwarded a premium check along

with the printout to Ayers. Ayers and his employees in

turn copied the printout and forwarded the materials to

First National. First National deposited the premium check

into its general asset accounts.

As to the claims process, employees or their health care

providers typically submitted claims to Sunshine Jr.? The

company would verify the employment status of the em-

ployee and forward the claims to Ayers. Ayers would check

the accuracy of the claim and determine the appropriate

rate under the policy coverage provisions. During the first

year of the policy’s existence, Ayers would then send the

claim to First National which would issue a benefit check.

In the later two years of the policy, First National au-

thorized Ayers to write benefit checks on First National’s

? Certain health care providers who were aware of the relationships

of the actors in this plan submitted claim forms directly to Ayers.

27a

bank account. Ayers received a 6% commission from First

National on the Sunshine Jr. policy.

Sunshine Jr. ended its relationship with First National

in August 1986, on the third anniversary of the policy.

Again with Ayers’s assistance, the company found a new

insurer for its employee benefits plan. First National later

filed this suit.

II.

First National claims that it is entitled to relief for three

different categories of wrongs by Sunshine Jr. First of all,

the insurance company asserts that Sunshine Jr. did not

meet and maintain the 75% participation level mandated

by the contract throughout the course of the policy. The

insurance company seeks lost profits based on the em-

ployees whom Sunshine Jr. should have enrolled to meet

this requirement. Second, First National asserts that Ayers

committed numerous errors in processing claims, resulting

in payments by First National beyond its contractual ob-

ligations. The insurance company claims that Sunshine Jr.

is liable for the amount of these overpayments because

Ayers was its agent at the time. Finally, First National

claims that Sunshine Jr. enrolled on the plan several per-

sons who were not full-time employees under the terms

of the policy, resulting in the payment of claims by First

National for which it had no actual duty to pay.

The first preliminary matter the court must address is

whether First National has actually charged violations of

ERISA. First National’s amended complaint filed in this

court contained eight counts; the insurance company

charged Sunshine Jr. with several violations of state law,

and in one count with a violation of ERISA. The core

charges of this complaint were contractual in nature, as-

serting that Sunshine Jr. had violated conditions set forth

in the group insurance policy. First National did not, and

does not, contend that Sunshine Jr.’s violation of the terms

28a

of the plan resulted in harm to participants in its employee

welfare benefits plan, however; First National pleads harm

to itself arising from Sunshine Jr.’s violation of the terms

of the policy.

In an order dated May 1, 1989, the court determined

that Sunshine Jr. had maintained an employee welfare plan

under the ERISA definition of such a plan. See Order of

May 1, 1989, at 2-3. Following from this ruling, the court

also determined that First National’s state law counts,

including its breach of contract claims, were preempted

by ERISA. Jd. at 4-5.4 However, because ERISA provides

a federal cause of action for violations of the terms of the

employee welfare benefit plan, the court denied Sunshine

Jr.’s motion for summary judgment as to the ERISA claims,

and the case proceeded to trial only on these claims. See

29 U.S.C.A. § 1132(a); see also id. § 1109.

Sunshine Jr. does not deny that it formed an employee

welfare benefit plan covered by ERISA, but it maintains

that the insurance policy does not itself constitute the plan.

The company argues that a breach of the terms of the

insurance contract is not equivalent to a violation of the

employee welfare benefit plan, in the context of a fully

insured plan.

The court agrees that an employee welfare benefit plan

as defined by ERISA transcends the nature of a common

* The court relied on 29 U.S.C.A. § 1002(1); Massachusetts v. Morash,

—_._ U.S. ____,, 109 S.Ct. 1668 (1989); Belasco v. W.K.P. Wilson &

Sons, Inc., 833 F.2d 277, 280 & n.3 (11th Cir. 1987); Donovan v.

Dillingham, 688 F.2d 1367, 1371 (11th Cir. 1982) (en banc); Tucker v.

Employers Life Insurance Co., 689 F.Supp. 1073, 1076 (N.D Ala. 1988).

‘The court relied on Pilot Life Insurance Co. v. Dedeauz, 481 U.S.

41, 107 S.Ct. 1549 (1987); Metropolitan Life Insurance Co. v. Massa-

chusetts, 471 U.S. 724, 105 S.Ct. 2380 (1985); Shaw v. Delta Air Lines

Inc., 463 U.S. 85, 103 S.Ct. 2890 (1983); Amos v. Blue Cross-Blue Shield

of Alabama, 868 F.2d 430, 431 (11th Cir.) (per curiam), cert. denied,

—— U.S... , 110 S.Ct. 158 (1989).

29a

individual insurance policy. When it establishes such a plan

for its employees, including a fully insured group plan, a

company undertakes substantial legal duties toward the

beneficiaries of the plan. See 29 U.S.C.A. § 1104. In con-

trast, the relationship between an insurance company and

the insured, in the context of a common individual policy

of insurance, is based on contractual duties; these duties

are different in kind from the fiduciary duties of trust law.

See Goldberg & Altman, The Case for the Nonapplication

of ERISA to Insurer’s General Account Assets, 21 Torts &

Ins. L.J. 477, 481 (1986).5 In addition, an employee welfare

benefit plan has a type of independent legal status under

ERISA; the plan can maintain and defend suits, and can

also survive changes in its funding mechanism over time.

As the Eleventh Circuit has observed, “The purchase of

insurance is only a method of implementing a plan, fund,

or program and is evidence of the existence of a plan but

is not itself [an employee welfare benefit] plan.”’ Donovan

v. Dillingham, 688 F.2d 1367, 1375 (11th Cir. 1982) (en

banc).

The differences between common individual policies of

health insurance and ERISA plans do not necessarily mean

that ERISA would not address a violation of the group

policy at issue in this case. When an employer establishes

an ERISA plan, that plan must have, as a practical matter,

an ascertainable structure outlining the plan’s benefits and

the responsibilities of the various plan actors. Absent such

structure, courts would encounter substantial difficulty in

determining which plan actor had responsibility for per-

forming plan functions. In the case of fully insured plans,

if no other documents provide reference points for the

*It is clear that Congress fashioned ERISA from the perspective of

trust law, including the emphasis on fiduciary duties rather than con-

tractual relations. See Massachusetts Mutual Life Ins. Co. v. Russell,

473 U.S. 134, 152-53 & nn.6, 8, 156-57, 105 S.Ct. 3085, 3095-96 &

nn.6, 8, 3097-98 (1985) (Bren-nan, [sic] J., joined by White, Marshall

and Blackmun, JJ., concurring in the judgment).

30a

structure of the plan, the court may permissibly look to

the insurance policy for this structure. Belasco v. W.K.P.

Wilson & Sons, Inc., 833 F.2d 277, 280-81 (11th Cir. 1987),

is just such a case. In Belasco, as here, the ERISA plan

in effect incorporates the terms of the group policy. Thus,

if Sunshine Jr. has indeed violated the terms of the policy

between it and First National, it has violated as well the

terms of its employee welfare benefit plan. First National

has, therefore, charged violations under ERISA.

The next preliminary issue is whether First National is

a proper party to complain of violations of the plan. The

insurance company purports to bring this action as a fi-

duciary of the plan. The evidence at trial established that

First National was a plan fiduciary during the time the

policy between it and Sunshine Jr was in effect. Congress

defined plan fiduciaries under ERISA in the following

terms:

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

to the extent (i) he exercises any discretionary

authority or discretionary control respecting man-

agement of such plan or exercises any authority

or control respecting management or disposition

of its assets, (ii) he renders investment advice for

a fee or other compensation, direct or indirect,

with respect to any moneys or other property of

such plan, or has any authority or responsibility

to do so, or (iii) he has any discretionary au-

thority or discretionary responsibility in the

administration of such plan.

29 U.S.C.A. § 1002(21XA). This definition has been broadly

construed by most courts. See, e.g., Brock v. Hendershott,

840 F.2d 339, 342 (6th Cir. 1988); Donovan v. Mercer, 747

F.2d 304, 308 (5th Cir. 1984). While an insurer is not a

plan fiduciary simply by virtue of the fact that it provides

3la

insurance, when the insurer exercises discretionary au-

thority over the payment of claims or other aspects of the

plan, it may assume fiduciary status under ERISA. See 29

C.F.R. § 2560.503(g\2); Baker v. Big Star Division, 893

F.2d 288 (11th Cir. 1989); American Federation of Unions

v. Equitable Life Ins. Co., 647 F. Supp. 947, 953 (M.D.

La. 1985), affd in relevant part, 841 F.2d 658, 664-65 (5th

Cir. 1988); Blue Cross and Blue Shield of Alabama v. Pea-

cock’s Apothecary, Inc., 567 F. Supp. 1258, 1265-66 (N.D.

Ala. 1983).° First National was a fiduciary under both the

first and third subsections of § 1002(21\A), since it bore

discretionary authority in the processing and payment of

claims under the policy, and thus in the administration of

the plan. The court further finds that First National bore

authority and control for the same reason in the manage-

ment and distribution of plan assets. See Chicago Board

Options Exchange v. Connecticut General Life Ins. Co., 713

F.2d 254, 260 (7th Cir. 1983); Jacobson v. John Hancock

Mutual Life Ins. Co., 662 F. Supp. 1108, 1107-11 (D. Conn.

1987).’

Congress authorized fiduciaries to bring actions under

ERISA in two situations pertinent to this action. A fidu-

ciary may sue for breach of fiduciary duty. 29 U.S.C.A.

§§ 1132(aX2); see also id. § 1109. The fiduciary may also

sue: “to enjoin any act or practice which violates any

* See also Ed Miniat, Inc. v. Globe Life Ins. Group, Inc., 805 F.2d

732, 737-38 (7th Cir. 1986), cert. denied, 482 U.S. 915, 107 S.Ct. 3188

(1987); Arakelian v. National Western Life Ins. Co., 680 F. Supp. 400,

404 (D.D.C. 1987); Jacobson v. John Hancock Mutual Life Ins. Co., 662

F. Supp. 1103, 1112 (D. Conn. 1987); McNeese v. Health Plan Marketing,

Inc., 647 F. Supp. 981, 984-85 (N.D. Ala. 1986); The Sixty-Five Security

Plan v. Blue Cross and Blue Shield of Greater New York, 583 F. Supp.

380, 387 (S.D.N.Y. 1984).

"In a self-funded plan, the plan’s assets are generated by employer

contributions and maintained in separate plan accounts. But in a plan

like Sunshine Jr.’s the insurance policy itself constitutes the plan’s

assets. The plan has shifted the risk of future health expenses to the

insurer; it is this shift that constitutes the assets of the plan.

32a

provision of [ERISA] or the terms of the plan, or ... to

obtain other appropriate equitable relief ... to redress

such violations or ... to enforce any provisions of [ERISA]

or the terms of the plan.” § 1132(aX3)A), (B).

First National has not stated a cause of action against

Sunshine Jr. under § 1132(aX2). Fiduciary duties under

ERISA, as under the common law of trusts, run vertically,

not horizontally. See Massachusetts Mutual Life Ins. Co.

v. Russell, 473 U.S. 134, 152-53, 105 S.Ct. 3085, 3095-96

(1985) (Brennan, J., joined by White, Marshall and Black-

mun, JJ., concurring in the judgment) (fiduciaries owe strict

duties running directly to beneficiaries in the administra-

tion and payment of trust benefits). While Sunshine Jr.

owes First National certain contractual duties, it has no

fiduciary relationship with the insurance company. As the

court noted above, the wrongs with which First National

charges Sunshine Jr. relate to these contractual duties.

Moreover, a fiduciary may seek relief under § 1132(a\2)

only on behalf of the plan, and the relief it obtains must

inure to the plan. Russell, 473 U.S. at 141, 105 S.Ct. at

3089 (majority opinion). Again, the insurance company does

not seek relief on behalf of the plan in this lawsuit.

Section 1132(aX3) is not, on the other hand, necessarily

concerned with fiduciary duties. Rather, the focus of that

section is on violations of the terms of the plan, whether

or not such violations would rise to the level of a breach

of fiduciary duty. Indeed, the universe of possible

defendants under § 1132(aX3) is not limited to fiduciaries.

As the court noted above, the terms of the insurance policy

between Sunshine Jr. and First National also constitute

terms of the company’s employee welfare benefits plan.

Thus, since First National is a fiduciary of this plan, it

has standing under the literal terms of § 1132(aX3) to file

an action to enjoin violations of that policy or seek other

redress for such violations. The court finds that First Na-

tional may maintain this action under § 1132(a\3).°

* Since the court finds that the express terms of ERISA envision the

33a

First National claims that it was damaged by Sunshine

Jr.’s failure to comply with the policy’s 75% participation

requirement. The insurance company argues that this

clause is critical to the viability of the plan, because it

aids the insurer in its task of spreading the risk of health

expenses. According to First National, the 75% partici-

pation requirement provides a safeguard against the threat

of adverse selection. Adverse selection occurs when the

least healthy segment of a company’s workforce partici-

pates in the plan, while the most healthy segment does

not, either because it can find less expensive insurance

coverage elsewhere or because it simply accepts the risk

of medical expenses itself. If strictly enforced, the 75%

participation level limits the extent of adverse selection by

forcing at least part of the lowest-risk segment of the

company’s workforce to participate in the plan. This seg-

ment presumably will contribute a high ratio of premium

income to the amount of claims it will generate. First

National claims that it would have netted approximately

$234,000 profits during the three years of the plan, had

Sunshine Jr. complied with the 75% requirement.

Sunshine Jr. admitted at trial that it never attempted

to determine whether it was technically in compliance with

the participation requirement. It stated that while such a

determination was theoretically possible, the task would

be a mammoth undertaking. The company employed

roughly 2,000 people on any given day during the years

1983 through 1986. However, Sunshine Jr. also experi-

enced extremely high turnover rates of employment. It in

type of action First National presents in this case, it need not address

the question of whether First National has an implied right of action

under the statute. See Dime Coal Co., Inc. v. Combs, 796 F.2d 394,

397-99 (11th Cir. 1986) (finding no implied right of action under ERISA

for an employer to recover contributions erroneously converted to plan

assets).

34a

effect replaced its complete workforce twice over the

course of a year. Thus, the company would generate

roughly 6,000 employee records during a year’s time. To

determine whether the participation requirement was sat-

isfied, Sunshine Jr. would have to retrieve each employee's

enrollment card and determine whether that employee was

eligible to participate, and whether she chose to partici-

pate.* Sunshine Jr. would also have to review that em-

ployee’s payroll history to ensure that she had worked the

requisite number of hours recently to remain eligible to

participate in the plan. Although First National had the

ability under its contractual relation with Sunshine Jr. to

demand access to the records necessary to make this de-

termination, it also never attempted to perform this task.

While the court does not doubt that the 75% partici-

pation clause contributes to some degree to the effective

viability of an employee welfare benefit plan, it is con-

vinced that First National may not recover damages for

violation of the requirement. First of all, the insurance

contract between the parties expressly limits the remedy

available to First National for any failure by Sunshine Jr.

to meet this requirement to termination of the policy. The

pertinent section reads:

The Insurance Company may terminate this pol-

icy on the first policy anniversary or on any pre-

mium due date thereafter, by giving written

notice to the Policyholder at least thirty-one days

in advance, if, on the termination date specified

in such notice, the number of persons insured

hereunder is less than the number of percentage

of the persons eligible for insurance hereunder

specified in the Schedule of Insurance.

First National concededly never attempted to invoke that

remedy. Nor did the insurance company ever communicate

*The evidence suggested that a significant percentage of Sunshine

Jr. employees never submitted enrollment cards to their employer.

35a

its concern regarding participation levels to Sunshine Jr.

for its response.

In any event, the company did not prove that this al-

leged violation of the plan caused it any harm. As noted

above, First National claims approximately $234,000 as

damages for violation of this requirement. In arriving at

this figure, First National estimated, through a statistical

study using First National’s definition of an eligible em-

ployee, the amount of premiums it would have collected

during the years of the policy if Sunshine Jr. had complied

with the participation requirement.® The insurance com-

pany then assumed that it would pay only 75 cents of

every dollar of premium out to beneficiaries in claims.

After allowing for commissions, premium taxes, and ad-

ditional overhead, First National estimated it would have

made roughly $234,000 in profits off the additional em-

ployees enrolled on the plan.

Aside from the definitional and methodological differ-

ences between the parties, the court finds this estimate

entirely too speculative a basis on which to award relief.

First National did not support its assertion that it would

have enjoyed a 75% ratio of claims to premium income

with any persuasive evidence. On the contrary, Sunshine

Jr. presented significant evidence showing, to the extent

past profit experience in similar ventures provides some

hint of expected profits, that First National’s profit esti-

at least 30 hours a week or 1,000 hours each year and who had worked

for Sunshine Jr. for at least six months were counted as eligible for

purposes of determining the participation level. Sunshine Jr. maintained

that employees who opted out of participation in the plan because of

alternative coverage, such as coverage under a spouse’s health plan,

should not be included in the range of eligible employees for partici-

pation requirement purposes. Because First National cannot recover on

this claim in any event, the court does not decide this issue.

36a

mates were implausibly rosy.!! The main point of the evi-

dence, however, was that no insurer can say with

reasonable certainty what its ratio of claims to premium

will be for any given group, and First National’s main

witness admitted as much. As is often the case with pleas

for lost profits, the plaintiff has simply not proved its

damage figure with a reasonable degree of certainty. See

generally 5 A. Corbin, Corbin on Contracts § 1022 at 135-

47 (1964).

First National also seeks repayment from Sunshine Jr.

of certain amounts paid by First National to plan bene-

ficiaries beyond levels required by the insurance contract.

First National’s position at trial was that these overpay-

ments were the result of errors committed by Ayers in

processing claims. First National asserts that Sunshine Jr.

is liable for these overpayments on the theory that Ayers

acted as Sunshine Jr.’s agent when he committed the er-

rors, thus making Sunshine Jr. liable as a principal for its

agent’s mistakes. The amount of relief sought by First

National under this theory is approximately $6,700.

The court finds that First National is not entitled to

this figure. First National relies on the legal rule that a

principal is liable for the acts of its agents committed

within the scope of the agency relationship. See Restate-

ment (Second) of Agency §§ 140, et seg. (1958) The evi-

dence adduced at trial suggested that Ayers may have

acted as Sunshine Jr.’s agent with respect to advice and

services in obtaining insurance for its employee benefits

plan. The evidence did not establish, however, that the

4 At one point, the president of First National admitted that the

years covered by this litigation were peak bad years for health care

insurers nationwide. The court also notes that First National in large

part left the group health insurance field around or shortly after the

termination of its contract with Sunshine Jr.

37a

scope of this agency agreement extended to Ayers’s re-

sponsibilities in processing claims under the policy. Id. §

34 (scope of agent’s authority determined in light of ac-

companying circumstances). On the contrary, the evidence

established that Sunshine Jr. never bore responsibility un-

der the contract or the terms of the plan for processing

claims; the company only verified the employment status

of the claimant, a matter unrelated to First National’s

theory of relief. The evidence showed that either Ayers

acted independently in processing claims or he acted as

First National’s agent in this function. The court has al-

ready noted First National’s discretion as a plan fiduciary

in determining the validity of benefit claims under the

policy. Significantly, First National, not Sunshine Jr., mon-

itored and supervised Ayers in processing claims and con-

ducted audits of his office in this regard. The court also

notes that First National allowed Ayers to sign checks on

its account to make benefits payments. Finally, when Ay-

ers stopped processing the claims late in the life of the

relationship between the parties, it was First National, not

Sunshine Jr., who replaced Ayers in performing this func-

tion. In sum, the court finds Ayers did not act as Sunshine

Jr.’s agent in processing claims under the policy. Thus,

First National cannot recover from Sunshine Jr. for any

mistakes made by Ayers in performing that duty.*?

First National finally seeks damages for benefits paid

by the insurer to ineligible employees whom Sunshine Jr.

enrolled in the plan, or to their health care providers. In

each instance, at the time these claims accrued, the claim-

* First National also asserts that Sunshine Jr. impeded the insurance

company’s attempts to collect overpayments by advising its employees

not to reimburse First National. The insurance company can point to

only one specific instance of such conduct, however. This instance re-

lates only to an off-hand response by a Sunshine Jr. employee to the

question of another employee, to the effect that if the second employee

felt she was in the right, she should not pay anything to First National.

The court rejects First National’s suggestion that this provides any

basis for relief against Sunshine Jr.

38a

ant was either no longer a Sunshine Jr. employee or no

longer met the- eligibility requirements of the insurance

policy. As the court noted above, in the course of dealing

between these parties, Sunshine Jr. bore the responsibility

of verifying the employment status of a claimant before

forwarding the claim to Ayers for processing and payment.

First National seeks over $40,000 in damages as a result

of these alleged violations of the plan.

Even if Sunshine, Jr. effectively violated the terms of

the plan by improperly enrolling employees, First National

is not entitled to the relief it seeks for this violation:

compensatory damages. It is settled law in this circuit that

extra-contractual compensatory damages are a form of le-

gal, not equitable, relief which is unavailable under §

1132(aX3). See, e.g., United Steelworkers v. Connors Steel

Company, 855 F.2d 1499, 1508-09 (11th Cir.), cert. denied,

109 S. Ct. 1568 (1989); see also Bishop v. Osborn Trans-

portation, Inc., 838 F.2d 1178, 1174 (11th Cir.), cert. de-

nied, 109 S.Ct. 90 (1988). Admittedly, the compensatory

damages sought by First National differ somewhat from

those sought in other reported § 1132(aX3) cases. Typically,

the issue arises when a beneficiary seeks compensatory

damages for mental or emotional distress arising out of

the failure to obtain benefits under the plan. First Na-

‘8 One component of this $40,000 figure is an alleged $24,000 payment

by First National on a claim submitted by Vivian Carter. At trial, the

court sustained Sunshine Jr.’s objection to introduction of evidence

relating to this claim, on the grounds that First National had raised

it too late in the litigation. This claim was not identified in the plead-

ings, nor in the pretrial order. The court agreed that allowing First

National to press this claim at such a late juncture would unfairly

prejudice the defendant.

The parties have briefed the question of the validity of this ruling

in their posttrial briefs. In light of the court’s conclusion that First

National is precluded by the terms of ERISA from recovery of com-

pensatory damages, the claim based on the Vivian Carter payment is

in any event not viable.

39a

tional’s damages arose as an arguably more foreseeable

- consequence of Sunshine Jr.’s violation of the plan than

did the emotional distress damages in Connors Steel, su-

pra. However, this distinction does not have any bearing

on whether the damages sought by First National are eq-

uitable or legal in nature; the fact remains that compen-

satory damages in most contexts are a traditional legal

remedy. See Chauffeurs, Teamsters and Helpers, Local No.

891 v. Terry, __ U.S. —_— 110 S.Ct. 1339, 1347 (1990); 5

J. Moore, J. Lucas & J. Wicker, Moore’s Federal Practice

para. 38.19[1] at 38-172 to 38-173 (1988); cf Walker v.

Ford Motor Co., 684 F.2d 1355, 1363-64 (11th Cir. 1982)

(holding that ‘‘other equitable relief’’ available under Title

VII does not include compensatory damages which are not

concomitants of employment). It is true that a court of

equity could always grant monetary damages as an inci-

dent to primary equitable relief, in order to afford a lit-

igant complete recovery. Chauffeurs, Teamsters and

Helpers, Local No. 391 v. Terry, _— U.S. at __ 110 S.Ct.

at 1348; 5 J. Moore, J. Lucas & J. Wicker, supra at para.

38.19(2]. But in this case, First National seeks no primary

equitable relief. Its claim is for compensatory damages,

and to cast these damages as equitable in nature under

these circumstances would apparently write Congress’s ex-

press limitation of recoveries under § 1132(aX3) to such

relief out of the statute. This the court cannot do.

First National characterizes the relief sought as ‘“‘make-

whole”’ relief. These semantical gymnastics are not helpful.

Extra-contractual compensatory damages can be so char-

acterized with equal ease; the beneficiary whose claim has

been denied can be said to seek monetary damages to

represent the value of the psychic harm suffered. Thus,

by being compensated for the injury, the beneficiary is put

in as good a position as she would have enjoyed had the

injury not occurred. She is ‘made whole.” But this ex-

ercise does not convert her claim for compensatory dam-

ages from a legal to an equitable remedy.

i ae

40a

First National also insists that the relief it seeks from

Sunshine Jr. is restitution. The court cannot agree. Res-

titution refers to a remedy designed to return to the

plaintiff the value of something that the defendant wrong-

fully received from plaintiff. Chauffeurs, Teamsters and

Helpers, Local No. 391 v. Terry, _— U.S. at _— 110 S.Ct.

at 1348-49. First National made these overpayments to

either beneficiaries or health care providers, not to Sun-

shine Jr. While First National might have a claim for

restitution against these third parties, it clearly does not

have such a claim against Sunshine Jr. See Id.; see also 5

A. Corbin, Corbin on Contracts § 996 at 17 (in determining

the amount of restitution recoverable, expenditures by the

plaintiff are not included unless they were received by the

defendants); Restatement of Restitution § 1 (1937).'

For the above reasons, First National is also not entitled

to recover on its previously discussed claims that Sunshine,

Jr. failed to meet the 75% participation requirement and

that Sunshine Jr.’s agent committed errors in processing

claims."

“In TransAmerica Mortgage Advisor, Inc. (TAMA) v. Lewis, 444

U.S. 11, 100 S.Ct. 242 (1979), the Supreme Court found an implied

private right of action under the Investment Advisers Act of 1940, 15

U.S.C.A. §§ 80b-1 to 80b-21, limited to the equitable remedies of res-

cission and restitution. The Court opined that while an investor could

recover the value of the consideration given under the investment con-

tract, less any value conferred by the other party, the injured investor

could not recover for the diminution in value of her investment resulting

from the defendant’s breach of fiduciary duties. The Court deemed this

loss in value to be compensatory in nature, and including it within the

definition of restitution ‘‘could provide by .indirection the equivalent of

a private damages remedy that we have concluded Congress did not

confer.” Jd. at 24 n.14, 100 S.Ct. at 249 n.14.

* The court recognizes that outside the context of ERISA the relief

requested by First National would be available. However, today’s result

was apparently intended by Congress since it restricted § 1132(aX3) to

only equitable relief. Howard v. Parisian, Inc., 807 F.2d 1560, 1564-

65 (11th Cir. 1987) (noting that the practical eradication of any means

4la

Ill.

Finally, First National requests this court to order Sun-

shine Jr. to render an accounting. At common law, this

equitable remedy appears to have been available in three

situations: when a fiduciary relationship existed between

plaintiff and defendant; when plaintiff and defendant main-

tained mutual accounts or if a one-sided account was par-

ticularly complicated; and when the plaintiff needed the

accounting for discovery purposes. 1 Am. Jur. 2d Accounts

and Accounting § 51 (1962). The court finds that First

National has not proffered any predicate for this court to

order an accounting in this case. Sunshine Jr. does not

owe any fiduciary duty to First National, as the court

noted above. First National also does not need the ac-

counting for discovery purposes, since Sunshine Jr. has

already made its records available to First National. The

fact that First National may wish Sunshine Jr. to under-

take the arduous task of reviewing the complete records

of the history between the parties rather than perform

this task itself is no basis for a court order. Although the

scenario of particularly complex accounts is initially plau-

sibly analogous to this case, the court concludes that First

National is not entitled to an accounting under this theory

either. First National has not alleged, nor does any evi-

dence suggest, that Sunshine Jr. failed to submit the ap-

propriate premium payments to First National for the

number of employees enrolled in its plan at any given

period of time. While First National does maintain that

Sunshine Jr. should have enrolled more of its employees

than it did, this charge does not relate to or support First

National’s request for an accounting. The action for an

accounting is simply off-point and unrelated to First Na-

tional’s substantive disputes with Sunshine Jr.

of redress may be the necessary result of federal preemption); Phillips

v. Amoco Oil Co., 799 F.2d 1464, 1470 (11th Cir. 1986) (same), cert.

denied, 481 U.S. 1016, 109 S.Ct. 1893 (1987).

———————o

42a

An appropriate judgment will be entered.

DONE, this the 5th day of July, 1990.

/s/ Myron H. Thompson

UNITED STATES DISTRICT JUDGE

48a

IN THE DISTRICT COURT OF THE UNITED STATES

FOR THE MIDDLE DISTRICT OF ALABAMA,

NORTHERN DIVISION

CIVIL ACTION NO. 88-T-575-N

FIRST NATIONAL LIFE INSURANCE COMPANY, etc.,

Plaintiff,

SUNSHINE JR. STORES, INC., etc., et al.,

Defendants.

FILED

MAY 1 1989

CLERK

U.S. DISTRICT COURT

MIDDLE DIST. OF ALA.

ORDER

This action is now before the court on defendant Sun-

shine Jr. Stores, Inc.’s November 23, 1988 motion for

summary judgment and on plaintiff First National Life

Insurance Company’s December 20, 1988 motion to strike

the defendant’s jury demand. For the reasons that follow,

the motion for summary judgment is due to be granted

in part and denied in part and the motion to strike the

jury demand is due to be granted.

This case involves disputes surrounding a group health

insurance policy issued by First National to Sunshine Jr.

44a

in August 1983. The policy provided health, medical and

disability coverage to all employees of Sunshine Jr. who

worked a minimum of 30 hours per week. Under this plan,

Sunshine Jr. was to enroll all eligible employees on the

plan and to remit the appropriate premium for that num-

ber of employees to First National. First National alleges

that Sunshine Jr. enrolled ineligible persons on the policy,

resulting in the payment of claims by First National for

which it had no legitimate duty to pay. First National also

claims that it paid certain “‘pre-certification penalties”’

which Sunshine Jr. refused to pay.

The amended complaint contains eight counts: one of

these charges Sunshine Jr. with violations of the Employee

Retirement Income Security Act of 1974 (ERISA), 29

U.S.C.A. §§ 1001-1461; the other counts charge violations

of state law under tort and contract theories. As this court

noted in its September 8, 1988, order denying Sunshine

Jr.’s motion to dismiss, the applicability of E ISA to the

plan in this case is of critical importance because of the

preemptive effect of that law on state law causes of action

relating to employee benefit plans. The court turns first,

therefore, to this issue.

II.

By the terms of the Act, ERISA covers ‘‘employee wel-

fare benefit plans” defined as:

[A]Jny plan, fund, or program which was heretofore

or is hereafter established or maintained by an em-

ployer or by an employee organization, or by both,

to the extent that such plan, fund, or program was

established or is maintained for the purpose of pro-

viding for its participants or their beneficiaries,

through the purchase of insurance or otherwise, (A)

medical, surgical, or hospital care or benefits, or ben-

45a

efits in the event of sickness, accident, disability, death

or unemployment. ...

29 U.S.C.A. § 1002(1). See Massachusetts v. Morash, ——

U.S. __ , 57 U.S.L.W. 4429, 4480 (U.S. April 18, 1989);

Belasco v. W.K.P. Wilson & Sons, Inc., 833 F.2d 277, 280

& n.3 (11th Cir. 1987). The Eleventh Circuit has set forth

an analytical framework for determining coverage issues

under ERISA, composed of five elements: (1) a ‘“‘plan, fund,

or program” (2) established or maintained (3) by an em-

ployer or by an employee organization, or by both, (4) for

the purpose of providing medical, surgical, hospital care,

sickness, accident, disability, death, unemployment or va-

cation benefits, apprenticeship or other training programs,

day care centers, scholarship funds, prepaid legal services

or severance benefits (5) to participants or their benefici-

aries. Donovan v. Dillingham, 688 F.2d 1367, 1371 (11th

. Cir. 1982) (en banc).

Aithough the parties appear oddly reticent to discuss

the issue of ERISA’s applicability to the group policy at

issue in this suit, the court is of the opinion this plan is

clearly an ‘‘employee welfare benefit plan’’ under ERISA.

The plan covers expenses typical to health insurance plans,

including medical expenses resulting from illness and ac-

cident, and it includes provisions relating to life insurance

options as well. Without belaboring the issue, the court

finds that the group health insurance plan in this case falls

within the terms of § 1002(1). See, e.g., Amos v. Blue Cross-

Blue Shield of Alabama, 868 F.2d 430, 431 (11th Cir. 1989)

(per curiam); Tucker v. Employers Life Insurence Co., 689

F. Supp. 1078, 1076 (N.D. Ala. 1988).

Delaying for the moment discussion of Sunshine Jr.’s

arguments for summary judgment on the ERISA claim,

the court next considers the viability of First National’s

other claims in light of ERISA’s potent preemptive effect.

46a

These claims include a claim for an accounting, several

fraud claims, willful and wanton misconduct on the part

of Sunshine Jr. in its business dealings with First National,

and breach of contract and of the duty to act in good

faith. Recent cases establish that all of these common law

causes of action are preempted by ERISA, requiring judg-

ment in Sunshine Jr.’s favor on these claims as a matter

of law.

The question of whether a certain state law action is

preempted by federal law is fundamentally one of congres-

sional intent. Pilot Life Insurance Co. v. Dedeaux, 481 U.S.

41, 107 S.Ct. 1549, 1552 (1987). In the case of ERISA,

Congress clearly and expressly signalled its intent that the

Act would “supercede any and all State laws insofar as

they may now or hereafter relate to any employee benefit

plan,” with certain exemptions. § 1144(a). The Supreme

Court has time and again interpreted this preemption

clause expansively, in light of the legislative history. See

Dedeaux, supra; Metropolitan Life Insurance Co. v. Mas-

sachusetts, 471 U.S. 724, 105 S.Ct. 2380 (1985); Shaw v.

Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890 (1983).

The Court has observed that §1144(a) applies beyond

“state laws specifically designed to affect employee benefit

plans.” Shaw, 463 U.S. at 98, 103 S.Ct. at 2900. A state

law relates to an ERISA plan if “in the normal sense of

the phrase, ... it has a connection with or reference to

such a plan.” Jd. at 97, 103 S.Ct. at 2900.

Each of the state law causes of action asserted by First

National relates to the ERISA plan under this test. The

Eleventh Circuit has recently addressed this question with

reference to virtually the same causes of action, finding

them preempted by the Act. Amos, 868 F.2d at 430. In

Amos, the court also held that such causes of action did

not fall within any of the exemptions to ERISA preemptive

effect set forth in the statute. Jd. Therefore, First Na-

tional’s state law causes of action are preempted by ERISA

47a

and summary judgment in Sunshine Jr.’s favor on those

causes of action is in order.

Sunshine Jr. also moves for summary judgment as to

the ERISA claim, contending that First National lacks

standing to seek relief under this statute. The Act pro-

vides:

A civil action may brought—

(3) by a participant, beneficiary, or fiduciary (A) to

enjoin any act or practice which violates any provision

of this subchapter or the terms of the plan, or (B) to

obtain other appropriate equitable relief (i) to redress

such violations or (ii) to enforce any provisions of this

subchapter or the terms of the plan.

§ 1132(aX3).

First National purports to bring its ERISA claim as a

fiduciary of the plan. The Act defines fiduciaries in the

following terms:

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

extent (i) he exercises any discretionary authority or

discretionary control respecting management of such

plan or exercises any authority or control respecting

management, or disposition of its assets, (ii) he ren-

ders investment advice for a fee or other compen-

sation, direct or indirect, with respect to any moneys

or other property of such plan, or has any authority

or responsibility to do so, or (iii) he has any discre-

tionary authority or discretionary responsibility in the

administration of such plan.

§ 1002(21A). As noted by this court in its September 8,

1988, order, this definition has been broadly construed by

48a

most courts. See e.g., Donovan v. Mercer, 747 F.2d 304

(5th Cir. 1984); McKinnon v. Cairns, 698 F. Supp. 852

(W.D. Okla. 1988); McNeese v. Health Plan Marketing, Inc.,

647 F. Supp. 981 (N.D. Ala. 1986). Given that Sunshine

Jr. concedes in its letter brief filed March 7, 1989, that

First National retained authority and control with respect

to the plan, and in the absence of evidence suggesting

otherwise, the court is of the opinion based on the current

record that First National may be a fiduciary empowered

to bring suit by § 1002(21)A).

Sunshine Jr. does not rigorously debate this point.

Rather, the company argues that First National is not

suing on behalf of anyone’s interests but its own and that

it is not attempting to preserve the integrity of the plan,

which ended in August 1986. Sunshine Jr. does not cite

authority to support its proposition that these are require-

ments under § 1132(aX3), however, and the court finds no

reason to doubt First National’s contention that it is al-

leging violations of the terms of the plan by Sunshine Jr.

Since such a complaint is expressly recognized by

§ 1132(aX3), and since the court finds material issues of

disputed fact going to this claim, Sunshine Jr. is not en-

titled to summary judgment as to First National’s ERISA

cause of action.

Il.

To summarize, this court finds that the plan involved

in this suit is covered by ERISA. The court also finds that

ERISA preempts First National’s causes of action based

on state law and that summary judgment in Sunshine Jr.’s

favor is proper as to these claims. The court denies Sun-

shine Jr.’s motion for summary judgment as to the ERISA

claim.

With respect to First National’s motion to strike Sun-

shine Jr.’s jury demand, the settled rule in this circuit is

that a litigant does not possess a right to a jury trial in

49a

an ERISA action. Chilton v. Savannah Foods & Industries,

Inc., 814 F.2d 620, 623 (11th Cir. 1987); Calamia v. Spivey,

632 F.2d 1235 (5th Cir. Unit A 1980). Thus, the motion

to strike is due to be granted.

Accordingly, it is ORDERED that defendant Sunshine

Jr. Stores, Inc.’s November 23, 1988, motion for summary

judgment be and it is hereby granted with respect to counts

1, 2, 4, 5, 6, 7 and 8 of the amended complaint and denied

with respect to count 3.

It is further ORDERED that plaintiff First National Life

Insurance company’s December 20, 1988, motion to strike

the jury demand, as amended on January 6, 1989, be and

it is hereby granted.

It is further ORDERED that defendant Sunshine Jr.

Stores, Inc.’s March 10, 1989, motion to strike, be and it

is hereby denied.

It is further ORDERED that the nonjury trial of this

cause is reset for June 8, 1989, at 9:00 a.m. in the second

floor courtroom of the federal courthouse in Montgomery,

Alabama.

The clerk of the court is DIRECTED to notify the

attorneys by telephone.

DONE, this the lst day of May, 1989.

/s/ Myron H. Thompson

UNITED STATES DISTRICT JUDGE

50a

§ 1109. Liability for breach of fiduciary duty

(a) Any person who is a fiduciary with respect to a plan

who breaches any of the responsibilities, obligations, or

duties imposed upon fiduciaries by this title shall be per-

sonally liable to make good to such plan any losses to the

plan resulting from each such breach, and to restore to

such plan any profits of such fiduciary which have been

made through use of assets of the plan by the fiduciary,

and shall be subject to such other equitable or remedial

relief as the court may deem appropriate, including re-

moval of such fiduciary. A fiduciary may also be removed

for a violation of section 411 of this Act [29 USCS § 1111].

5la

§ 1132. Civil enforcement

(a) Persons empowered to bring a civil action. A civil

action may be brought—

(1) by a participant or beneficiary—

(A) for the relief provided for in subsection (c) of

this section, or

(B) to recover benefits due to him under the terms

of his plan, to enforce his rights under the terms

of the plan, or to clarify his rights to future benefits

under the terms of the plan;

(2) by the Secretary, or by a participant, beneficiary

or fiduciary for appropriate relief under section 409

[29 USCS § 1109];

(3) by a participant, beneficiary, or fiduciary (A) to

enjoin any act or practice which violates any provision

of this title or the terms of the plan, or (B) to obtain

other appropriate equitable relief (i) to redress such

violations or (ii) to enforce any provisions of this title

or the terms of the plan;

(4) by the Secretary, or by a participant, or benefi-

ciary for appropriate relief in the case of a violation

of 105(c) [29 USCS § 1025(c));

(5) except as otherwise provided in subsection (b), by

the Secretary (A) to enjoin any act or practice which

violates any provision of this title, or (B) to obtain

other appropriate equitable relief (i) to redress such

violation or (ii) to enforce any provision of this title;

(6) by the Secretary to collect any civil penalty under

subsection (cX2) or (i) or (1).

52a

§ 1144. Other laws

(a) Supersedure; effective date. Except as provided in

subsection (b) of this section, the provisions of this title

and title IV shall supersede any and all State laws insofar

as they may now or hereafter relate to any employee

benefit plan described in section 4(a) [29 USCS § 1003(a)]

and not exempt under section 4(b) [29 USCS § 1003(b)).

This section shall take effect on January 1, 1975.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.