Girl Scouts of Middle Tenn., Inc. v. Girl Scouts of the U.S.A.

• Citation: 770 F.3d 414
• Decision Date: 23 October 2014
• Docket Number: No. 13–6347.,13–6347.
• Parties: GIRL SCOUTS OF MIDDLE TENNESSEE, INC., Plaintiff–Appellant, v. GIRL SCOUTS OF THE U.S.A., Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

770 F.3d 414

GIRL SCOUTS OF MIDDLE TENNESSEE, INC., Plaintiff–Appellant

v.GIRL SCOUTS OF THE U.S.A., Defendant–Appellee.

No. 13–6347.

United States Court of Appeals, Sixth Circuit.

Argued: June 19, 2014.

Decided and Filed: Oct. 23, 2014.

Rehearing En Banc Denied Jan. 22, 2015.

ARGUED:Ames Davis, Waller Lansden Dortch & Davis, LLP, Nashville, Tennessee, for Appellant. Mary Helen Wimberly, Hogan Lovells U.S. LLP, Washington, D.C., for Appellee. ON BRIEF:Ames Davis, Waller Lansden Dortch & Davis, LLP, Nashville, Tennessee, for Appellant. Mary Helen Wimberly, Neal Kumar Katyal, Hogan Lovells U.S. LLP, Washington, D.C., Kenneth Kirschner, Vi T. Vu, Hogan Lovells U.S. LLP, New York, New York, for Appellee.

Before: SILER, CLAY, and GIBBONS, Circuit Judges.

OPINION

SILER, Circuit Judge.

Girl Scouts of Middle Tennessee, Inc. (“GSMT”) sued Girl Scouts of the United States of America (“GSUSA”), the Sponsor and Administrator of the National Girl Scout Councils Retirement Plan (the “Plan”), for increasing the liabilities of the Plan unilaterally and without authorization. As originally pleaded, GSMT's principal claims appeared to allege violations of the Employee Retirement Income Security Act (“ERISA”), federal common law, and state common law. GSMT also asserted an alternative claim under Tennessee Code Annotated § 48–53–104. The district court dismissed the principal claims, finding the ERISA and state common law claims preempted and declining to create a cause of action under federal common law. It similarly dismissed the alternative claim as preempted and for insufficient pleading. GSMT appeals the dismissal of its principal and alternative claims. For the reasons that follow, we AFFIRM.

BACKGROUND

GSUSA is a District of Columbia nonprofit corporation with its principal place of business in New York City, New York. GSMT is a Tennessee nonprofit corporation with its principal place of business in Nashville, Tennessee, and is one of 112 independent councils that GSUSA currently charters.

A. The Agreement and Plan

Any council that elects to participate in the Plan may do so by entering into an independent agreement with GSUSA regarding the Plan's administration. In 1974, GSUSA and GSMT's predecessor entered into a Voluntary Participation Agreement (the “Agreement”) that memorialized GSUSA's agreement to serve as GSMT's agent in administering the Plan. Among other things, the Agreement authorizes GSUSA to determine GSMT's rate of contribution and to modify the Plan, but GSUSA's authority “to act on [GSMT's] behalf in regard to the Plan and the Contract [is] subject at all times to [GSMT's] instructions.”

The Plan is a defined benefit pension plan governed by ERISA. See 29 U.S.C. §§ 1001 –1461. Referring to GSUSA as the “Named Fiduciary,” the Plan confers fiduciary responsibilities upon GSUSA to discharge its duties to the exclusive benefit of the employees of the participating Girl Scout councils. See 29 U.S.C. § 1104. GSUSA may amend the plan only where the amendment does not alter the basic purposes of the Plan. The Plan prohibits employers from amending its provisions, and an employer can terminate its participation in the Plan only if GSUSA consents. Upon withdrawal, the Plan provides that employers may form a spin-off retirement plan by transferring the assets and liabilities attributable to that employer's employees to another tax-qualified pension plan, with the express consent of GSUSA.

Congress organized the ERISA pension plans into two categories. A multiemployer plan is a pension plan comprised of more than one contributing employer and maintained pursuant to a collective bargaining agreement.See 29 U.S.C. § 1002(37)(A). A single-employer plan is every other type of pension plan. See 29 U.S.C. § 1002(41). The Plan is considered a multiple-employer plan under ERISA, because multiple, separate and independent corporations participate in the Plan, but it is not maintained pursuant to a collective bargaining agreement. Therefore, the Plan falls within ERISA's catch-all category of single-employer plans. See 29 U.S.C. §§ 1002(41), 1301(a)(15).

B. The Amendments to the Plan

In 2005, GSUSA chartered 312 councils until it decided to restructure its organizational composition by merging or combining many of the councils into 112 councils, in a process it called the “Realignment.” In so doing, GSUSA merged councils that did not participate in the Plan with participating councils and enabled approximately 1,850 nonparticipating employees to become eligible to receive a lifetime pension annuity benefit without having previously contributed to the Plan.

In 2006, GSUSA amended the Plan to include the Voluntary Early Retirement Incentive Plan (“VERIP”). The amendment permitted participants to subsidize and accelerate eligibility for their pensions. Eligible consolidated councils could offer their employees the option to terminate employment and receive “enhanced benefits” under the Plan.¹

GSMT argues that as a result of the Realignment and the VERIP amendment, GSUSA caused GSMT to incur massive new liabilities. As of January 2007, the Plan was operating with a surplus of over $150 million, but by September 2011, the Plan had accumulated a deficit close to $340 million. GSUSA contends that the deficit resulted from the country's recession. To compensate for the shortage, GSUSA implemented a structured increase of its councils' contribution rates. For GSMT, from 2000 until 2008, GSUSA applied a contribution rate of 3%, but increased the rate to 3.8% in 2009, 9% in 2010 and 2011, and 10% in 2012. The rate is scheduled to continue to increase through 2023, at which point it is expected to reach between 10% and 16%.

Despite GSUSA's deficit, GSMT was one of eighteen councils operating at a surplus in 2010. In February 2011, GSMT, through its counsel, notified GSUSA that it intended to withdraw from the Plan and form a spin-off retirement plan. After several communications between counsel for GSUSA and GSMT, GSUSA finally informed GSMT that it would not grant GSMT permission to withdraw or form the proposed spin-off.

C. The Lawsuit

GSMT filed a complaint against GSUSA in 2012, bringing three principal claims and a fourth alternate claim for relief. The first principal claim sought a declaratory judgment that (a) GSMT is not obligated to continue to participate in the Plan in perpetuity, and may withdraw from the Plan; (b) GSUSA is required to participate in a spin-off of Plan assets and liabilities attributable to GSMT's employees; (c) GSUSA's unauthorized amendments to the Plan are not binding on GSMT; and (d) GSUSA is required to indemnify GSMT for any liability resulting from a distress termination of the Plan. The other principal claims requested an accounting of the financial condition of the Plan and prayed for injunctive relief restraining GSUSA from collecting or seeking to enforce contributions from GSMT to be used for new Plan participants or VERIP. In the alternative, GSMT sought a declaratory judgment that GSMT's grant of authority to GSUSA was ultra vires in violation of Tenn.Code Ann. § 48–53–104 and therefore void.

GSUSA filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1), for lack of subject matter jurisdiction on standing grounds, and 12(b)(6), for failure to state a claim to relief. Although it found that GSMT had standing to pursue its claims against GSUSA, the district court dismissed the case under Rule 12(b)(6). The court found the ERISA and state common law claims preempted and refused to extend the federal common law to create a cause of action in this context. The court then dismissed the fourth, alternative claim as preempted and for insufficient pleading. Although it is not entirely clear which of these rulings GSMT appeals, we address each and find that the district court properly applied the law to the issues and correctly dismissed the case.

STANDARD OF REVIEW

Whether a district court properly dismissed a suit pursuant to Rule 12(b)(6) is a question of law subject to de novo review. Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir.2007). We must ensure that the plaintiff's complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). We “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir.2007). However, we may not “accept conclusory legal allegations that do not include specific facts necessary to establish the cause of action.” New Albany Tractor, Inc. v. Louisville Tractor, Inc., 650 F.3d 1046, 1050 (6th Cir.2011).

DISCUSSION

A. ERISA Claims

Congress enacted ERISA in 1974 “to promote the interests of employees and their beneficiaries in employee benefit plans and to protect contractually defined benefits.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) (internal quotation marks and citation omitted). This “comprehensive regulation of employee welfare and pension benefit plans” provides “administrative oversight, imposes criminal sanctions, and establishes a comprehensive civil enforcement scheme.” N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 650–51, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995) (internal citations omitted). The civil enforcement mechanisms permit participants, beneficiaries, and fiduciaries to pursue claims concerning employee benefits and rights, see 29 U.S.C. § 1132, and fiduciaries, contributing sponsors, members of contributing sponsor's controlled groups, participants, and beneficiaries to bring some claims regarding withdrawal from or termination of...