Flint v. Abb, Inc., 02-15029.

Decision Date21 July 2003
Docket NumberNo. 02-15029.,02-15029.
CourtU.S. Court of Appeals — Eleventh Circuit
PartiesWillie R. FLINT, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. ABB, INC., f.k.a. ABB Power, T&D Co., Inc., et al., Defendants-Appellees.

Niza M. Motola, Lori A. Brown, Jackson, Lewis, LLP, Miami, FL, Ashley B. Abel, Jackson, Lewis, Schnitzler & Krupman, Greenville, SC, for Defendants-Appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before BARKETT and KRAVITCH, Circuit Judges, and FULLAM*, District Judge.

KRAVITCH, Circuit Judge:

This case presents two questions. The first is whether § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), authorizes an ERISA plan beneficiary to receive interest on reinstated benefits when the employee-benefit plan (the "Plan") does not explicitly provide for interest on reinstated benefits. The second question is whether plaintiff-appellant Willie R. Flint has stated a claim under § 502(a)(3)(B) of ERISA, 29 U.S.C. § 1132(a)(3)(B), that would allow him to recover interest on reinstated benefits.

I. BACKGROUND

Flint is a former employee of defendant-appellee ABB, Inc. After an automobile accident in March 1998, Flint applied for and received disability benefits under ABB's Plan. He had been receiving disability benefits for approximately three years when ABB, through its claims processor, Kemper National Services ("Kemper"), received information from Flint's attending physician indicating that Flint was no longer totally disabled. Under the terms of the Plan, ABB could stop paying disability benefits if Flint either (1) was "no longer totally disabled" or (2) failed to "give proof of [his] continued disability."

Given the Plan's provisions, ABB investigated whether to continue paying Flint's disability benefits. It requested an independent labor-market survey, which concluded that "several appropriate positions were found" in which Flint could work. Consequently, ABB informed Flint on June 19, 2001 that he was no longer "totally disabled" within the meaning of the Plan and that his disability benefits would terminate on July 1, 2001. June 19, 2001 was the first time that Kemper informed Flint that his case was under review.

Flint wrote a letter dated July 2, 2001 to appeal the disability termination. On August 31, 2001, ABB, through Kemper, denied Flint's appeal. In October 2001, Flint again appealed the termination of benefits and this time provided Kemper with additional medical information. Flint also asked Kemper to give him a filing extension so that he could have more time to furnish additional medical information to support his claim for reinstatement. He asked for this extension because his doctor was unable to see him within the appeals period. In November 2001, Kemper acknowledged receiving the second appeal and granted Flint an extension in which to provide additional medical information supporting his claim. Flint provided the additional medical information, and shortly thereafter, Kemper reinstated Flint's benefits and made the reinstatement retroactive to July 1, 2001. Kemper issued a check for these benefits on December 28, 2001. Flint has conceded that the appeals process, which ultimately led to the reinstatement of his benefits, did not violate the Plan, the ERISA statute, or any Department of Labor regulations.

Flint brought suit against ABB in February 2002, maintaining that he is entitled to interest payments on the retroactive Plan benefits. Flint characterized these retroactive benefits as "delayed benefits." Flint conceded that "[t]he Plan documents are silent regarding the payment of interest on Delayed Benefits"; nevertheless, he claimed that § 502(a)(1)(B) and § 502(a)(3)(B) of ERISA allow plaintiffs to recover accrued interest on reinstated benefits, even when an employer's plan is silent on the issue.

ABB moved to dismiss Flint's claim pursuant to Federal Rule of Civil Procedure 12(b)(6), contending that Flint had not stated a claim upon which relief could be granted. The district court granted the motion, concluding that Flint had not alleged facts that would entitle him to relief under either § 502(a)(1)(B) or § 502(a)(3) of ERISA. The court held that § 502(a)(1)(B) does not create an implied right to recover accrued interest for reinstated payments, but instead allows recovery only for "benefits specified in the plan." It also held that § 502(a)(3)'s catch-all provision concerning "appropriate equitable relief" might allow plaintiffs to recover accrued interest for reinstated benefits — but only when benefits are unreasonably delayed or wrongfully withheld. The court concluded that Flint had not pleaded facts demonstrating that ABB had unreasonably delayed or wrongfully withheld his benefits. Accordingly, it dismissed Flint's claim without prejudice and allowed Flint to amend his complaint, which he did; the district court concluded, however, that Flint's amended complaint had not alleged facts that, if proven, would entitle him to relief under § 502(a)(3)(B)'s catch-all provision. Flint also requested a declaration that he and other plan members had present and future rights to receive interest on reinstated benefits, but the district court denied this relief as well.

II. STANDARD OF REVIEW

We review de novo the dismissal of a complaint for failure to state a claim, accepting all allegations in the complaint as true and construing facts in a light most favorable to the plaintiff. Harper v. Thomas, 988 F.2d 101, 103 (11th Cir.1993). A court cannot use Federal Rule of Civil Procedure 12(b)(6) to dismiss a complaint for failure to state a claim "`unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

III. ANALYSIS

We must decide whether Flint has stated a claim under either § 502(a)(1)(B) or § 502(a)(3)(B) that entitles him to interest on his reinstated benefits.

A. Whether Interest for Reinstated Benefits Is an Implied Term of § 502(a)(1)(B)

Section 502(a)(1)(B) of ERISA provides that a participant or beneficiary of an employee-welfare benefit plan may bring a civil action

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....

29 U.S.C. § 1132(a)(1)(B).

Flint argues that accrued interest payments constitute "benefits due to him under the terms of his plan" within the meaning of § 502(a)(1)(B), reasoning that paying interest on reinstated benefits is an implied term of the Plan. The basis for this argument is that (1) ERISA plans are contracts and (2) the default rule in contract law is that a party is entitled to receive interest on unpaid obligations to pay money.1 According to this theory, ABB breached the contract by delaying the payment of benefits and, consequently, should pay Flint interest to compensate him for the time value of the reinstated benefits.

We are reluctant to infer an implied cause of action from § 502(a)(1)(B). The Supreme Court has "observed repeatedly that ERISA is a `"comprehensive and reticulated statute," the product of a decade of congressional study of the Nation's private employee benefit system.'" Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 209, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002) (quoting Mertens v. Hewitt Assocs., 508 U.S. 248, 251, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993) (quoting Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 361, 100 S.Ct. 1723, 64 L.Ed.2d 354 (1980))). The Court has "emphasized [its] unwillingness to infer causes of action in the ERISA context, since that statute's carefully crafted and detailed enforcement scheme provides `strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.'" Mertens, 508 U.S. at 254, 113 S.Ct. 2063 (quoting Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146-47, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985)).

Furthermore, no circuit has recognized a claim for interest under § 502(a)(1)(B) of ERISA. The only circuit to address the issue directly has ruled that if interest is not a benefit expressly provided for in the employee-benefit plan, it cannot be recovered under § 502(a)(1)(B), because "only benefits specified in the plan can be recovered in a suit under section 502(a)(1)(B)." Clair v. Harris Trust & Sav. Bank, 190 F.3d 495, 497 (7th Cir.1999) (Posner, J.). Given the Supreme Court's unwillingness to allow implied causes of action under ERISA and the fact that, like the plan in Clair, the Plan here does not provide for such interest, we follow Clair and conclude that Flint's claim under § 502(a)(1)(B) fails.

B. Whether Flint Has Stated a Claim Under § 502(a)(3)(B) that Would Allow Him to Recover Interest on Reinstated Benefits

Flint argues that § 502(a)(3)(B) of ERISA supplies another basis for recovering accrued interest for reinstated benefits. Section 502(a)(3) provides that a civil action may 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. ...

29 U.S.C. § 1132(a)(3) (emphasis added).

Flint maintains that awarding accrued interest on reinstated benefits falls into the category of "appropriate equitable relief." ABB responds, correctly, that interest on money past due under a contract is a classic form of compensatory damages and, as such, does not...

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