Soehnlen v. Fleet Owners Ins. Fund, 16-3124

• Decision Date: 21 December 2016
• Docket Number: No. 16-3124,16-3124
• Parties: Daniel P. SOEHNLEN; Bill Reeves ; Superior Dairy, Inc., Plaintiffs–Appellants, v. FLEET OWNERS INSURANCE FUND; Robert Kavalec; Charlie Alferio; Victor Collova, Defendants–Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

844 F.3d 576

Daniel P. SOEHNLEN; Bill Reeves ; Superior Dairy, Inc., Plaintiffs–Appellants,

v.FLEET OWNERS INSURANCE FUND; Robert Kavalec; Charlie Alferio; Victor Collova, Defendants–Appellees.

No. 16-3124

United States Court of Appeals, Sixth Circuit.

Argued: October 18, 2016

Decided and Filed: December 21, 2016

Rehearing En Banc Denied January 25, 2017

ARGUED: Keith L. Pryatel, KASTNER WESTMAN & WILKINS, LLC, Akron, Ohio, for Appellants. Eric G. Serron, STEPTOE & JOHNSON LLP, Washington, D.C., for Appellees. ON BRIEF: Keith L. Pryatel, Kenneth M. Haneline, KASTNER WESTMAN & WILKINS, LLC, Akron, Ohio, for Appellants. Eric G. Serron, Paul J. Ondrasik, Jr., Osvaldo Vazquez, STEPTOE & JOHNSON LLP, Washington, D.C., Lance B. Johnson, LANCE B. JOHNSON LLP, Cleveland, Ohio, for Appellees.

Before: KEITH, BATCHELDER, and CLAY, Circuit Judges.

OPINION

CLAY, Circuit Judge.

Plaintiffs Daniel Soehnlen, Bill Reeves, and Superior Dairy, Inc. filed suit alleging that Defendants Fleet Owners Insurance Fund, Robert Kavalec, Charlie Alferio and Victor Collova, breached a range of obligations under the Employee Retirement Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq. (1974), the Patient Protection and Affordable Care Act of 2010 ("ACA"), 26 U.S.C. § 5000A (Pub. L. No. 111-148, as modified by the subsequently enacted Health Care and Education Reconciliation Act, Pub. L. No. 111-152 (2010)), and § 302 of the Labor Management Relations Act ("Taft-Hartley Act"), 29 U.S.C. § 186 (1988). Plaintiffs also brought breach of contract claims. The district court dismissed Plaintiffs' complaint for failure to state a claim and for lack of standing. For the reasons that follow, we AFFIRM the district court's judgment.

BACKGROUND

Factual Background

Plaintiff Superior Dairy, Inc. ("Superior Dairy") is an Ohio Corporation that engages in the manufacture and processing of milk-based products. Plaintiff Daniel P. Soehnlen is President and Chief Executive Officer of Superior Dairy. Plaintiff Bill Reeves is an hourly employee of Superior Dairy, who also serves as a union steward on behalf of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, General Trucker Drivers and Helpers, Local Union No. 92. As the parties concede, Defendant Fleet Owners Insurance Fund ("Fleet Owners" or the "Plan") is a multi-employer "welfare benefit plan" within the meaning of ERISA, 29 U.S.C. § 1001, and a "group health plan" within meaning of the ACA, and therefore is covered by both ERISA and the ACA. Defendants, Robert Kavalec, Charlie Alferio, and Victor Collova are each represented to be either current or former trustees for the Plan, responsible for overseeing its operation.

In order to provide medical coverage to its employees, Superior Dairy contracted with Fleet Owners and memorialized the terms of their agreement by signing the participation agreement (the "Participation Agreement") on April 14, 2014. The Participation Agreement incorporated by reference the Amended and Restated Agreement and Declaration of Trust signed in 2002 ("Trust Agreement"). Plaintiffs allege in their amended complaint that prior to entering into the Participation Agreement, they received certain assurances from Fleet Owners and individual trustees of the Plan, that the Plan would comply in all respects with federal law, including ERISA and the ACA.

According to Plaintiffs, notwithstanding the ACA's statutory requirement mandating that all group health plans eliminate per-participant and per-beneficiary pecuniary caps for both annual and lifetime benefits, the Plan maintains such restrictions. Consequently, Superior Dairy purchased supplemental health insurance benefits to fully cover its employees. Defendants do not, at this time, dispute the existence of benefit caps within the plan, but instead argue that the Plan is exempt from such requirements because it is a "grandfathered" plan.

Procedural History

Plaintiffs filed their complaint against Defendants alleging violations of the ACA, ERISA, Taft-Hartley Act, and various provisions of the Trust Agreement and Participation Agreement that govern the Plan. The action was brought both on behalf of individual named Plaintiffs, Soehnlen and Reeves, and the company Superior Dairy, and on behalf of a class of similarly situated employees. The district court dismissed all seven counts alleged in Plaintiffs' complaint. Plaintiffs appeal every one of the district court's conclusions; we therefore consider each argument below.

DISCUSSION

Standard of Review

This Court reviews de novo both a district court's decision to dismiss the complaint for lack of subject matter jurisdiction and to dismiss for failure to state a claim. See Gaylor v. Hamilton Crossing CMBS , 582 Fed.Appx. 576, 579 (6th Cir. 2014) ; In re Carter , 553 F.3d 979, 984 (6th Cir. 2009) ("Where a district court rules on a 12(b)(1) motion to dismiss that attacks the claim of jurisdiction on its face, this Court reviews the decision de novo .") To avoid dismissal under Rule 12(b)(6), a complaint must provide sufficient facts to state a claim that is plausible on its face. See Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). And where a plaintiff's Article III standing is at issue, the plaintiff must allege facts sufficient to establish the requisite individualized harm. See Keener v. Nat'l Nurses Org. Comm. , 615 Fed.Appx. 246, 251 (6th Cir. 2015).

Analysis

I. ERISA Claims

1. Count I and II: Monetary and Injunctive Relief under 29 U.S.C. § 1132 (a)(1)(B)

Plaintiffs allege that by failing to comply with the ACA provisions enjoining annual and life-time limitations on benefits, Defendants violated their ERISA rights. Consequently, Plaintiffs seek monetary and injunctive relief under 29 U.S.C. § 1132(a)(1)(B) of ERISA, which states that a civil action may be brought in federal court "by a participant or beneficiary ... 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." The district court dismissed the first two claims of Plaintiffs' complaint for lack of standing. Arguing that they have sufficiently pleaded an invasion of their congressionally defined rights, Plaintiffs ask us to reverse the district court. We decline to do so.

As has been reaffirmed countless times, there are two components to any given standing inquiry: constitutional and statutory. The Supreme Court has recently clarified, however, that what has been called "statutory standing" in fact is not a standing issue, but simply a question of whether the particular plaintiff "has a cause of action under the statute." Am. Psychiatric Ass'n v. Anthem Health Plans, Inc. , 821 F.3d 352, 359 (2d Cir. 2016) (citing Lexmark Int'l, Inc. v. Static Control Components, Inc. , ––– U.S. ––––, 134 S.Ct. 1377, 1386, 188 L.Ed.2d 392 (2014) ). Defendants do not oppose, and we assume without considering, that Plaintiffs have a valid cause of action under ERISA in order to bring their § 1132(a)(1)(B) claim. But, as has been repeatedly proclaimed by the Supreme Court, even if a plaintiff has a cause of action arising under a given statute, "federal courts ... have only the power that is authorized by Article III" and, therefore, we must analyze standing under Article III. See, e.g. , Bender v. Williamsport Area Sch. Dist. , 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986). With respect to claims arising under ERISA, plaintiffs are not absolved from showing that the elements of Article III are met. Loren v. Blue Cross & Blue Shield of Mich. , 505 F.3d 598, 606–07 (6th Cir. 2007) (citing Cent. States Se. & Sw. Areas Health and Welfare Fund v. Merck–Medco Managed Care , 433 F.3d 181, 199 (2nd Cir. 2005) ).

"Article III limits the judicial power of the United States ... and ‘Article III standing ... enforces the Constitution's case-or-controversy requirement.’ " Hein v. Freedom From Religion Found., Inc. , 551 U.S. 587, 597–98, 127 S.Ct. 2553, 168 L.Ed.2d 424 (2007) (quoting Elk Grove Unified Sch. Dist. v. Newdow , 542 U.S. 1, 11, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004) ). Consequently, it must be determined whether Plaintiffs have " ‘such a personal stake in the outcome of the controversy’ as to warrant [their] invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on [their] behalf." Warth v. Seldin , 422 U.S. 490, 498–99, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (quoting Baker v. Carr , 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962) ). Plaintiffs bear the burden of establishing standing. See Lujan v. Defenders of Wildlife , 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). To satisfy Article III's standing requirements, a plaintiff must show: "(1) [he] has suffered an ‘injury-in-fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Loren , 505 F.3d at 606–07 (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. , 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) ).

We scrutinize the "injury-in-fact" element of standing in order to determine not just whether Plaintiffs have sufficiently pleaded a statutory injury, but a constitutional one as well. As the Supreme Court recently affirmed in Spokeo, Inc. v. Robins , an injury-in-fact contains the two distinct elements of particularization and concreteness. ––– U.S. ––––, 136 S.Ct. 1540, 1548–50, 194 L.Ed.2d 635 (2016). For an injury to be particularized, "it must affect the plaintiff in a personal and individual way." Id. at 1548 (quoting Lujan , 504 U.S. at 560, 112 S.Ct. 2130 ); see also Valley Forge Christian Coll. v. Americans United for Separation of Church & State, Inc. ...