Williams v. Aetna Life Insurance Company

Filing 69

ORDER granting 45 Motion to Dismiss; granting 47 Motion to Dismiss; granting 54 Motion to Dismiss as set out. This action is dismissed. The Motion for partial summary judgment (doc. 51) is denied as moot.. Signed by Judge Kristi K. DuBose on 2/14/2014. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
NORTHERN DIVISION
WAYNE WILLIAMS,
Plaintiff,
v.
AETNA LIFE INSURANCE COMPANY
and RENEE FIGGE, Trustee, Trust for
Active Group Health and Welfare Benefits
of the Army and Air Force Exchange
Service,
Defendants.

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CIVIL ACTION NO. 2:12-00258-KD-B

ORDER
This action is before the Court on the Motion to Dismiss Plaintiff’s Amended Complaint
pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6) (Docs. 45, 54) filed by the United
States, on behalf of Defendant Renee Figge (“Figge”), the Motion to Dismiss Plaintiff’s
Amended Complaint pursuant to Rule 12(b)(6) (Doc. 47) filed by Defendant Aetna Life
Insurance Company (“Aetna”), the various filings in support of or in opposition to same (Docs.
48, 52, 55, 56), the Report and Recommendation of the Magistrate Judge addressing these
motions (Doc. 62), the United States’s objections to the Report and Recommendation (Docs. 63,
68), and the response to those objections filed by Plaintiff Wayne Williams (“Williams”) (Doc.
64).

A hearing on these matters was held on February 10, 2014, at which counsel for all parties

was present (with counsel for Aetna participating via telephone).

Upon consideration of the

relevant portions of the record and the arguments presented by the parties, the Court finds that
both motions to dismiss (Docs. 45, 47, 54) are due to be GRANTED and this action
DISMISSED.1

1

The Court denies Williams’s request made at the hearing that he be allowed to further amend his
complaint. Williams has already amended his complaint once. See Corsello v. Lincare, Inc., 428 F.3d

The Court assumes the parties’ familiarity with the record and will forego a detailed
recitation of the relevant factual and procedural background of this action, most of which has
been set forth previously in the Magistrate Judge’s two Reports and Recommendations (Docs.
37, 62).

In a nutshell, the facts are as follows:

While an employee of the Army and Air Force Exchange Service (“AAFES”), Williams
was offered an AAFES-sponsored disability insurance plan.
made contributions to the disability insurance program.

Williams accepted the offer and
Aetna administered the disability

program pursuant to an administrative services contract with AAFES (Doc. 28-1).

Williams

applied for disability benefits and was granted short-term benefits, but he was later denied
long-term benefits.

Aetna made the initial decision to deny long-term benefits.

Williams

appealed to AAFES, where Figge, signing the denial letter as plan administrator, upheld the
denial of long-term benefits.

(Figge Letter, Doc. 47-3).

Williams then sued Aetna and Figge, in her capacity as a trustee of the Trust for Active
Group Health and Welfare Benefits for AAFES (“the Trust”).

The Trust holds the employee

contributions and pays the benefits that are approved through Aetna.
I.

Analysis
a.

Claims against Aetna

1008, 1014 (11th Cir. 2005). Moreover, “[a] district court need not . . . allow an amendment []where
there has been undue delay . . . or repeated failure to cure deficiencies by amendments previously allowed
. . .” Bryant v. Dupree, 252 F.3d 1161, 1163 (11th Cir. 2001). The motions to dismiss and the
extensive briefing submitted in support were filed in June and July of 2013. At no time before the
hearing did Williams move for leave to amend to address these deficiencies or to even plead in the
alternative. Finally, the Court notes that, at the hearing, counsel for Williams expressly stated that he
asked for such leave to amend only in the event that the Court granted the parties’ motions to dismiss.
In essence, Williams is requesting to be allowed to change his theory of the case if the first one is subject
to dismissal. The request to amend at this late date is denied.

2

Williams filed no objections to the recommendation of the Magistrate Judge that Aetna’s
Motion to Dismiss be granted and that all claims against Aetna asserted in the Amended
Complaint (Doc. 42) be dismissed.

Williams also agreed at the February 10, 2014 hearing that

all claims against Aetna are due to be dismissed.
not a party to a contract with the Trust.
contract to which it was never a party.

The Court agrees.

Specifically, Aetna was

Williams cannot establish that Aetna breached a

Accordingly, Aetna’s Motion to Dismiss (Doc. 47) is

due to be GRANTED and all claims asserted against Aetna in the Amended Complaint (Doc.
42) are due to be DISMISSED with prejudice.2
b.

Claims against Figge3

Williams asserts claims against Figge in her official capacity as a trustee of the Trust.
As confirmed by counsel for Williams at the February 10, 2014 hearing, Williams’ theory of his
case against Figge is that the Trust breached a contract to which Williams was a beneficiary
and/or the Trust breached its fiduciary duties to Williams by discontinuing his disability benefits.
The United States has argued and submitted evidence that the decision to discontinue
Williams’s benefits was made by Figge in her capacity as an employee (specifically, “plan
administrator”) of AAFES, rather than any capacity as a trustee of the Trust.

(Figge Letter,

2

See, e.g., Lobo v. Celebrity Cruises, Inc., 704 F.3d 882, 893 (11th Cir. 2013), cert. denied, 134 S. Ct. 61
(2013) (“We []conclude that the September 10, 2009, order was an adjudication on the merits because the
order was a Rule 12(b)(6) dismissal with prejudice. Hall v. Tower Land & Inv. Co., 512 F.2d 481, 483
(5th Cir. 1975) (‘[G]ranting defendant's motion to dismiss for plaintiff's failure to state a claim upon
which relief can be granted operates as an adjudication on the merits.’); see Citibank, N.A. v. Data Lease
Fin. Corp., 904 F.2d 1498, 1501 (11th Cir. 1990) (‘[D]ismissal of a complaint with prejudice satisfies the
requirement that there be a judgment on the merits.’).”).

3

Williams does not dispute the Magistrate Judge’s determination that Figge is the only other defendant
properly named in the Amended Complaint (see Doc. 62 at 4), and the Court concurs with this
determination.

3

Doc. 47-3; Figge Decl., Doc. 48-1).

AAFES is not a named party in this action, nor has Figge

been sued in any capacity as an AAFES employee.

There is no evidence on the record that the

Trust made the decision to deny benefits to Williams.

However, as confirmed at the February

10, 2014 hearing, Williams insists on continuing with this theory of the case.

Thus, the Court

will address the motion to dismiss (for lack of jurisdiction because there has been no waiver of
sovereign immunity) only as it relates to Figge in her capacity as trustee.
Williams has not disputed that Figge is being sued in her official capacity as a trustee of
the Trust, which was established by AAFES.
an agent of the United States.4

Therefore, Figge is being sued in her capacity as

A lawsuit against a federal government agent in her official

capacity is nothing more than a suit against the United States.

See, e.g., Kentucky v. Graham,

473 U.S. 159, 165-66 (1985) (“Official-capacity suits . . . generally represent only another way
of pleading an action against an entity of which an officer is an agent.

As long as the

government entity receives notice and an opportunity to respond, an official-capacity suit is, in
all respects other than name, to be treated as a suit against the entity.

It is not a suit against the

official personally, for the real party in interest is the entity. Thus, while an award of damages
against an official in his personal capacity can be executed only against the official's personal
assets, a plaintiff seeking to recover on a damages judgment in an official-capacity suit must look
to the government entity itself.” (internal citations and quotation omitted)).

Moreover, “ ‘[t]he

general rule is that a suit is against the sovereign if the judgment sought would expend itself on
4

“AAFES is a non-appropriated funds instrumentality (NAFI).” Taylor v. United States, 303 F.3d
1357, 1358 (Fed. Cir. 2002). “There is []no question that NAFIs are agents of the United States. The
Supreme Court has repeatedly recognized that NAFIs are arms of the government deemed essential for
the performance of governmental functions.” Lion Raisins, Inc. v. United States, 416 F.3d 1356, 1363
(Fed. Cir. 2005) (quotations omitted).

4

the public treasury or domain, or interfere with the public administration, or if the effect of the
judgment would be to restrain the Government from acting, or to compel it to act.’ ”
Miccosukee Tribe of Indians of Fla. v. United States, 698 F.3d 1326, 1330 (11th Cir. 2012)
(quoting Dugan v. Rank, 372 U.S. 609, 620 (1963) (internal quotation marks and citation
omitted)) (alteration added).

Many of Williams’s claims in the Amended Complaint seek to

compel Figge and the Trust to act, and others seek money damages from the Trust, a “public
domain” held by an agency of the United States, AAFES.
“Sovereign immunity shields the United States from suit absent a consent to be sued that
is unequivocally expressed.”
marks omitted).

United States v. Bormes, 133 S. Ct. 12, 16 (2012) (quotation

“The United States' immunity from suit extends to its agencies.”

Asociacion

de Empleados del Area Canalera (ASEDAC) v. Panama Canal Comm'n, 453 F.3d 1309, 1315
(11th Cir. 2006).

“Waivers of immunity must be construed strictly in favor of the sovereign

and not enlarged beyond what the language requires.”

Ruckelshaus v. Sierra Club, 463 U.S.

680, 685-86 (1983) (internal citation and quotations omitted).
jurisdictional in nature.”

“Sovereign immunity is

F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994).

“ ‘[T]he terms of [the

United States’s] consent to be sued in any court,’ as expressed by statute, ‘define that court's
jurisdiction to entertain the suit.’ ”

Christian Coal. of Fla., Inc. v. United States, 662 F.3d 1182,

1188 (11th Cir. 2011) (quoting United States v. Sherwood, 312 U.S. 584, 586 (1941)) (alteration
added).5 “Therefore, [the Court] must first decide whether [the Trust’s] immunity has been

5

“Attacks on subject matter jurisdiction under Rule 12(b)(1) come in two forms, ‘facial’ and ‘factual’
attacks. Facial attacks challenge subject matter jurisdiction based on the allegations in the complaint,
and the district court takes the allegations as true in deciding whether to grant the motion. Factual
attacks challenge subject matter jurisdiction in fact, irrespective of the pleadings. In resolving a factual
attack, the district court may consider extrinsic evidence such as testimony and affidavits. [The United

5

waived.” Meyer, 510 U.S. at 475.
Williams argues two grounds for finding waiver of sovereign immunity in this action.6
First, Williams argues that the Trust waived its immunity through of Section 15 of the Trust
Agreement between AAFES and Bankers Trust Company (as “Trustee”), which states:
In the event that the Plan [(short for “the Group Medical and Dental Program for
active employees of AAFES”) ]terminates for any reason, any assets remaining after
satisfaction of all liabilities to existing Trust Beneficiaries will be used to provide
other life, sick, accident or other benefits described under Section 1.501(c)(9)-3 of the
Treasury Regulations in accordance with criteria that do not provide disproportionate
benefits to officers or highly compensated employees of AAFES. In the event of the
termination of the Trust as above provided (or of the Plan under which it was
established), the Trustee shall continue to administer the Fund as herein provided
until all of the purposes for which it has been established have been accomplished or
dispose of the Fund after the payment or other provision for all expenses incurred in
the administration and termination of the Trust (including any compensation to which
the Trustee may be entitled), all in accordance with the written order of AAFES or the
Committee or any successor thereto. Until the final distribution of such Fund, the
Trustee, AAFES and the Committee, or any successor thereto (as the case may be)
shall continue to have and may exercise all the powers and discretions conferred upon
them by this Agreement.

States’s] motion to dismiss [i]s a factual attack because it relie[s] on extrinsic evidence and d[oes] not
assert lack of subject matter jurisdiction solely on the basis of the pleadings.” Morrison v. Amway
Corp., 323 F.3d 920, 925 n.5 (11th Cir. 2003).
6

The Magistrate Judge, in her second Report and Recommendation, determined that a contract
claim under the Tucker Act provided a waiver of sovereign immunity for claims against Figge. (Doc. 62
at 22-23). The Court finds that there is no Tucker Act contract claim asserted in this action against
Figge in her capacity as a trustee. Williams agrees that there is no express contract between him and the
Trust. Williams has cited various statutes and regulations that he argues create an implied contract
between him and the Trust. However, while “[c]laims grounded on implied-in-fact contracts may be
brought under the Tucker Act, []the Act does not confer jurisdiction with respect to contracts implied in
law.” Army & Air Force Exch. Serv. v. Sheehan, 456 U.S. 728, 738 n.10 (1982) (holding “that the
Court of Appeals erred in implying a contract based solely on the existence of AAFES personnel
regulations and in premising Tucker Act jurisdiction on those regulations, which do not explicitly
authorize damages awards”). Army & Air Force Exch. Serv. v. Sheehan, 456 U.S. 728, 741 (1982)
Moreover, Williams does not dispute that he has not met the prerequisites for bringing an action
under the Federal Tort Claims Act.

6

(Doc. 28-2 at 16).
Section 15, according to Williams, “requires that assets belong to the []Trust and
prohibits the Trust assets from reverting to the United States.” (Amended Complaint, Doc. 42
at 3, ¶ 8). Thus, Williams argues, by including this provision in its Trust Agreement, the Trust
has waived sovereign immunity.
Second, Williams argues that the Trust has waived sovereign immunity by failing to
abide by certain statutes and regulations.

Williams argues that the Trust has organized itself as

a “voluntary employees’ beneficiary association” as described in the Internal Revenue Code, 26
U.S.C. § 501(c)(9) (and corresponding regulations, 26 C.F.R. § 1.501(c)(9)) but has failed to act
in a manner prescribed by those provisions.

The cited portions of the Internal Revenue Code

merely allow for certain qualifying entities to receive tax-exempt status, and the Court finds no
provision that even suggests, much less unequivocally expresses, consent to be sued by the
United States.

See, e.g., Furry v. Miccosukee Tribe of Indians of Fla., 685 F.3d 1224, 1232

(11th Cir. 2012), cert. denied, 133 S. Ct. 663 (2012) (“ ‘Congress may abrogate a sovereign's
immunity only by using statutory language that makes its intention unmistakably clear.’ ”
(quoting Florida v. Seminole Tribe of Fla., 181 F.3d 1237, 1242 (11th Cir. 1999)).
Moreover, the Supreme Court of the United States has “explicitly rejected the argument
that ‘the violation of any statute or regulation relating to federal employment automatically
creates a cause of action against the United States for money damages.’ ”

Army & Air Force

Exch. Serv. v. Sheehan, 456 U.S. 728, 739 (1982) (quoting United States v. Testan, 424 U.S.
392, 401 (1976).

Also, “an agency's actions cannot waive sovereign immunity.”

Thompson v.

McHugh, 388 F. App'x 870, 874 (11th Cir. 2010) (citing United States v. N.Y. Rayon Importing
7

Co., 329 U.S. 654, 660 (1947) (“It has long been settled that officers of the United States possess
no power through their actions to waive an immunity of the United States or to confer
jurisdiction on a court in the absence of some express provision by Congress.”)).7 Therefore,
the Trust and its trustees could not have waived sovereign immunity through their actions, either
by including Section 15 in the Trust Agreement or by failing to abide by certain provisions of the
Internal Revenue Code.
Williams also claims that sovereign immunity is waived because “[n]either the []Trust,
nor its Trustees, have the authority to administer disability benefits under DoD 1400.25, Volume
1408, July 21, 2009 (‘DoD 1400.25’) . . . The DoD 1400.25 expressly requires an insurance
policy to cover Plaintiff’s disability benefits, and does not authorize a trust fund or a Trustee.”

7

See also, e.g., Governor of Kansas v. Kempthorne, 516 F.3d 833, 844 (10th Cir. 2008) (“Plaintiffs
argue that, even if the Quiet Title Act's waiver does not apply in this case, we should honor our order,
issued in 1996 during an interlocutory appeal in the Sac & Fox Nation case, in which we ordered that the
respective rights of the parties to obtain judicial review of all issues which have been raised in the
complaint below shall be preserved after dissolution of the TRO. In a similar vein, a suggestion was
raised at oral argument that the Secretary's continued participation in this lawsuit waived, or estopped her
from invoking, the United States' sovereign immunity. Well-settled law, however, establishes that
neither courts nor government officials can effectuate such waiver; only Congress holds that power.”
(internal citation and quotation omitted)); Tobar v. United States, 639 F.3d 1191, 1195-96 (9th Cir. 2011)
(“[A] regulation, 49 C.F.R. § 1.46(b) . . . and a letter from the United States embassy to the Ecuadorian
government requesting permission to board Plaintiffs' vessel . . . are not acts of Congress, so they cannot
effect a waiver of sovereign immunity. Additionally, we note that the regulation contains no relevant
information and does not pertain to sovereign immunity. Similarly, the letter does not mention sovereign
immunity and, as noted, even if it implies that sovereign immunity would be waived, implied waivers are
ineffective.” (internal citation omitted)); Ikelionwu v. Nash, 324 F. App'x 152, 153 (3d Cir. 2009)
(“Ikelionwu argues that sovereign immunity is waived in his case because 1) the BOP settlement offer
informed him that he could institute a suit against the United States if he did not accept the settlement;
and 2) Defendant-Appellee Nash admitted in his first motion to dismiss that Ikelionwu's suit was properly
filed under the FTCA. Because ‘neither courts nor government officials can effectuate’ a waiver of
sovereign immunity, Governor of Kansas v. Kempthorne, 516 F.3d 833, 844 (10th Cir. 2008), we agree
with the District Court that Ikelionwu's arguments lack merit.”).

8

(Williams’s Motion for Partial Summary Judgment, Doc. 51 at 2-3 8).

In support of this

argument, Williams cites to the following language from DoD 1400.25: “To safeguard
employees during their temporary inability to perform normal occupational duties because of a
non-work-related disability, the Heads of the DoD Components may offer disability insurance
consistent with mission requirements and prudent fiscal considerations.” (Doc. 52-1 at 8).
The cited regulation does not support the argument; there is no requirement that the disability
insurance be offered through a private insurance policy, nor is there any prohibition on
administering it through the use of a trust.
Williams argued no other basis for waiver of sovereign immunity, and none is apparent
from the record.

In short, Williams has failed to establish that the United States has consented

to be sued in this action and thus has failed to establish that the Court has any jurisdiction over
his claims against Figge as a trustee of the Trust.

See McCormick v. Aderholt, 293 F.3d 1254,

1257 (11th Cir. 2002) (the party invoking a federal court’s jurisdiction bears the burden of
proving it).

Therefore, the Court finds that the United States’s Motion to Dismiss (Doc. 45, 54)

is due to be GRANTED on the grounds that the Court lacks of subject matter jurisdiction and
that all of Williams’s claims against Figge are due to be DISMISSED without prejudice.9
II.

Conclusion

In accordance with the foregoing analysis, it is ORDERED that Aetna’s and the United
States’s Motions to Dismiss (Docs. 45, 47, 54) are GRANTED, that all claims asserted against
8

Williams also reasserted this argument at the February 10, 2014 hearing.

9

See, e.g., Stalley ex rel. U.S. v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir.
2008) (“A dismissal for lack of subject matter jurisdiction is not a judgment on the merits and is entered
without prejudice.”).

9

Aetna in the Amended Complaint (Doc. 42) are DISMISSED with prejudice, and that all
claims asserted against Figge in the Amended Complaint are DISMISSED without prejudice.10
Final judgment in accordance with this Order and Federal Rule of Civil Procedure 58
shall issue contemporaneously by separate document.
DONE and ORDERED this the 14th day of February 2014.
s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

10

As such, Williams’s Motion for Partial Summary Judgment (Doc. 51) is DENIED as moot.

10