BOSTER v. RELIANCE STANDARD LIFE INSURANCE COMPANY et al

Filing 45

MEMORANDUM OPINION. Signed by Judge Amy Berman Jackson on 8/8/2013. (lcabj2)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
RONALD S. BOSTER,
)
)
Plaintiff,
)
)
v.
)
)
RELIANCE STANDARD LIFE
)
INSURANCE COMPANY, et al.,
)
)
Defendants.
)
____________________________________)

Civil Action No. 12-0980 (ABJ)

MEMORANDUM OPINION
On June 18, 2012, plaintiff Ronald S. Boster brought this action under the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 et seq., to recover benefits he
claims are due under an employee short term disability insurance plan (“Plan”) established and
maintained by his former employer, the Public Company Accounting Oversight Board
(“PCAOB”), and issued by Reliance Standard Life Insurance Company (“Reliance”). Compl.
[Dkt. # 1] ¶¶ 1, 4–5. Because Reliance has failed to demonstrate that its decision to utilize a new
approach in its construction and application of the Plan was the result of a deliberate, principled,
and reasonable process, the Court will enter judgment in Boster’s favor against the insurer. But
the claims against the employer, PCAOB will be dismissed.
Boster’s original complaint asserted two causes of action against both defendants: Count
I asserted a loss of benefits claim under 29 U.S.C. § 1132(a)(1); and Count II asserted a breach
of fiduciary duty claim under 29 U.S.C. § 1132(a)(2). Compl. ¶¶ 45–56. On October 3, 2012,
PCAOB moved for judgment on the pleadings on both counts under Federal Rule of Civil
Procedure 12(c). PCAOB Mot. for J. on the Pldgs. [Dkt. # 12] at 1. On October 23, 2012,

Reliance moved for summary judgment on both counts under Federal Rule of Civil Procedure
56. Reliance Mot. for Summ. J. [Dkt. # 17] at 3. While these motions were pending, Boster
filed a motion for leave to file an amended complaint. Pl.’s Mot. for Leave to File Am. Compl.
[Dkt. # 26]. The proposed amended complaint revised Count II to assert a breach of fiduciary
duty claim against PCAOB under 29 U.S.C. § 1132(a)(3)1 and added allegations with respect to
that claim. Am. Compl. [Dkt. # 26-1] ¶¶ 6, 11, 18, 20, 56–61.
On April 5, 2013, Boster filed a cross-motion for summary judgment against Reliance.
Pl.’s Opp. to Def. Reliance Mot. for Summ. J. and Cross-Mot. for Summ. J. and Mem. in Supp.
(“Pl.’s Cross-Mot.”) [Dkt. # 33]. Then on April 18, 2013, Boster filed a motion for leave to file
a second amended complaint; the proposed second amended complaint added information that
Boster learned through discovery and added a new count against PCAOB for interference with
the attainment of benefits under 29 U.S.C. § 1140 (Count III). Pl.’s Mot. for Leave to File 2d
Am. Compl. and Mem. in Supp. [Dkt. # 35] at 5–6, 12–13.
With respect to Boster’s claims against Reliance, the Court will deny Reliance’s motion
for summary judgment and grant Boster’s cross-motion. Under those circumstances, Boster’s
motion for leave to file a second amended complaint as to Reliance will be denied as moot.
Additionally, the Court will dismiss all of Boster’s claims against PCAOB.
Count I: The Court will grant PCAOB’s motion for judgment on the
pleadings because Boster has failed to plausibly allege that PCAOB acted
as a fiduciary with respect to the benefits determination. The Court will
also deny Boster’s motion for leave to file a second amended complaint
because the proposed amendments do not cure this deficiency and are thus
futile.

1
Boster reasserted his breach of fiduciary duty claim under section 1132(a)(3) instead of
section 1132(a)(2) because he recognized that “a Section 1132(a)(2) action does not lie because
the remedy sought is on behalf of the Plaintiff and not the Plan.” Pl.’s Opp. to PCAOB Mot. for
J. on the Pldgs. [Dkt. # 24] at 8.
2

Count II: The Court will grant PCAOB’s motion for judgment on the
pleadings on Count II of the original complaint because Boster has
conceded that it failed to state a claim under 29 U.S.C. § 1132(a)(2). The
Court has provided an adequate remedy for Boster’s only alleged injury –
the loss of his benefits – by granting his motion for summary judgment
against Reliance. Since Boster has failed to allege any separate injury that
flowed from PCAOB’s alleged breach of its fiduciary duties, he has not
pled facts establishing his entitlement to equitable relief under section
1132(a)(3), and the Court will deny Boster’s motion for leave to file an
amended and second amended complaint to assert a breach of fiduciary
duty claim against PCAOB as futile.
Count III: The Court will deny Boster’s motion for leave to file a second
amended complaint to add a third count against PCAOB because the
proposed second amended complaint does not plausibly allege that
PCAOB interfered with Boster’s attainment of his rights.
BACKGROUND
The following facts are undisputed except where noted.2
I. PCAOB’s Short Term and Long Term Disability Insurance Plans
The Public Company Accounting Oversight Board (“PCAOB”) is a nonprofit corporation
headquartered in the District of Columbia. Compl. ¶ 5. PCAOB sponsors a Group Short Term
Disability Program (“Plan”) for its employees. Id. ¶ 5. The Plan qualifies as an employee
welfare plan under 29 U.S.C. § 1002(1), and is therefore governed by ERISA. Id. ¶ 8. PCAOB
contracted with Reliance Standard Life Insurance Company (“Reliance”) to provide the short
term disability insurance benefits under the Plan.

Id. ¶ 5. The Plan documents designate

PCAOB as the plan administrator and Reliance as the claims fiduciary. Group Short Term
Disability Insurance Program, Ex. A to PCAOB Mot. for J. on the Pldgs. (“Short Term Disability

2
The Court will refer to the original complaint unless a particular factual allegation is
contained only in the proposed amended or second amended complaint.
3

Plan”) [Dkt. # 12-2] at 24, 35.3 As the claims fiduciary, Reliance “has the discretionary authority
to interpret the Plan and the insurance policy and to determine eligibility for benefits. Decisions
by the claims review fiduciary shall be complete, final and binding on all parties.” Id. at 10, 35.
Under the terms of the Plan, an employee may receive a maximum of sixteen weeks of
benefits for one period of disability. Short Term Disability Plan at 5. The Plan requires Reliance
to pay short term disability benefits “from the later of the exhaustion of sick leave; or . . . the
eighth consecutive day of disability . . . .” Short Term Disability Plan at 5; Compl. ¶ 20.
PCAOB does not offer “sick leave” to its employees, though. Instead, it “provides a Paid Time
Off (‘PTO’) benefit to use as employees wish: for vacation, personal or family needs or in case
of sickness.” PCAOB Employment Policies and Procedures Manual, Ex. 2 to Pl.’s Cross-Mot.
[Dkt. # 33-2] at 12; Compl. ¶ 22.
Reliance also provides long term disability benefits to PCAOB employees. Compl. ¶ 38;
Administrative Record, Ex. to Pl.’s Cross-Mot. (“AR-STD”) [Dkt. #s 33-9, 33-10, and 33-11] at
28. Under the long term disability plan, benefits begin 112 days after the first day of disability.
AR-STD-0028. The long term disability plan permits Reliance to deduct other income that the
plan participant simultaneously receives – including social security benefits and short term
disability benefits – from the long term disability payment. See AR-STD-0028; Compl. ¶ 38.

3
The Court can consider the Plan documents in resolving PCAOB’s motion for judgment
on the pleadings because the documents are referred to and quoted in the complaint and are
therefore incorporated by reference in the complaint. See, e.g., Compl. ¶ 20; see also EEOC. v.
St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997) (stating that on a motion
to dismiss, the court may consider “any documents attached to or incorporated in the
complaint.”); Hinton v. Corrections Corp. of Am., 624 F. Supp. 2d 45, 46 (D.D.C. 2009) (stating
that on a motion to dismiss, the court may consider “the facts alleged in the complaint,
documents attached as exhibits or incorporated by reference in the complaint, or documents upon
which the plaintiff’s complaint necessarily relies even if the document is produced not by the
plaintiff in the complaint but by the defendant in a motion to dismiss.”) (internal quotation marks
and citations omitted).
4

II. Boster’s Disability Claim
Ronald Boster worked as a Special Advisor to a PCAOB Board Member from January
2003 to September 2010. Compl. ¶ 7. He was a participant in the short term and long term
disability plans during his tenure at the corporation. Compl. ¶ 7. Boster was scheduled for back
surgery on September 25, 2010. Comp. ¶ 11. He informed his supervisor that he anticipated a
short absence from work for the surgery, and his supervisor approved his using paid time off
during that absence. Comp. ¶ 11. Before the scheduled surgery, Boster became ill, and he
underwent emergency surgery on September 11, 2010. Compl. ¶ 12. Boster became disabled
due to complications from the surgery, and he has remained disabled since then. Compl. ¶¶ 12–
13. His last day of work was September 10, 2010, and PCAOB charged Boster’s absence from
work, starting on September 11, to his paid time off. Compl. ¶¶ 13, 15. Boster alleges that his
wife kept his supervisor apprised of his condition during the period immediately after the
surgery. Compl. ¶ 14.
In mid-October 2010, Boster filed for short term disability benefits. AR-STD-0121. The
complaint alleges that Boster’s wife informed PCAOB that Boster preferred to receive short term
disability benefits instead of paid time off. 2d Am. Compl. [Dkt. # 35-1] ¶ 18. But a PCAOB
representative supposedly told Mrs. Boster that PCAOB had a “newly revised STD Plan” that
required him to use of six weeks of paid time off before drawing short term disability benefits.
2d Am. Compl. ¶ 33.
On November 1, 2010, Tanya Janish, a human resources associate at PCAOB, sent the
paperwork for Boster’s short term disability benefits claim by email to Amy Stephens, a claims
examiner at Reliance. Nov. 1, 2010 Email, Ex. 3 to Reliance Mem. in Opp. to Pl.’s Mot. for

5

Leave to File 2d Am. Compl. [Dkt. # 39-3] at 1.4 In the transmittal email, Janish told Stephens
that PCAOB had a “new process” for administering the Plan for employees who file for short
term disability benefits after they have been out for a while: “The plan is for the employee to use
PTO through the pay period in which they submit the STD paperwork. The STD period would
start after the elim period, but the PTO used that pay period would be counted towards their 16
week balance.” Id. As the PCAOB representative explained it, under the new process, the paid
time off received by the employee would offset the short term disability benefits. Id. That is, the
short term disability benefits period would still be sixteen weeks, but Reliance would only pay
benefits for the period during which the employee was not receiving paid time off.5 The email
explained that PCAOB would inform Reliance when the disabled employee stopped receiving
paid time off, so that Reliance could begin paying short term disability benefits. Janish asked
Stephens to “hold off” on paying Boster, and stated that she would “tell [Reliance] the date to
start payments.” Id.

4
Reliance has stated that this email exchange occurred on November 4, 2010. See
Reliance Mem. in Opp. to Pl.’s Cross-Mot. [Dkt. # 36] at 10. But the copy of the email that
Reliance provided to the Court indicates that the email exchange actually occurred on November
1, 2010.
5
PCAOB and Reliance had previously communicated about the possibility of using paid
time off as an offset for short term disability benefits. In December 2006, Elizabeth Wright, a
PCAOB employee, told Jack McGinness, a Reliance salesperson, that PCAOB employees who
filed for short term disability after they had been out for a while, received both paid time off and
short term disability benefits for their absence. Ex. 5 to Pl.’s Cross-Motion [Dkt. # 33-6]. She
asked if Reliance could solve this problem by “delay[ing] the employees [sic] STD payments
until after their PTO ends.” Id. In response, McGinness suggested that they “amend the policy
[to] include PTO as an offset – offsetting dollar for dollar for any PTO monies received.” Id.
Wright stated that she would discuss the possible amendment with her supervisor. Id. The Plan
was never amended.
6

Amy Stephens of Reliance immediately rejected PCAOB’s proposal; she stated: “I did
speak with [other members of my team] on the change. I don’t agree with the PTO counting
towards the 16 week benefit duration. I don’t think we can do that.” Id.
On November 3, 2010, Janish at PCAOB spoke with Joseph Meehan, Reliance’s regional
sales representative, regarding the new process. AR-STD-0121. The next day, Janish wrote an
email to Reliance’s claims team to put the “new process” that she and Meehan discussed “in
writing” and to make sure that PCAOB and Reliance were “on the same page.” AR-STD-0121.
Under what the email reveals to be the revised version of the proposed new process, employees
who filed for short term disability benefits after they had been out for a while would still be
required to use their paid time off until the end of the pay period in which they submitted their
benefits claims. Id. The short term disability benefits payments for those employees would then
begin the day after the employee stopped receiving paid time off and would continue for the full
sixteen weeks; paid time off would not be used to offset the sixteen weeks of benefits. Id. The
long term disability benefits start date would not change based on the employee’s use of paid
time off; as provided by the contract, it would still begin 112 days after the first day of disability.
Id. Thus, under this scenario, the delayed start date for the sixteen weeks of short term disability
benefits would overlap with the period in which the employee received long term disability
benefits. AR-STD-0121. And, pursuant to the long term disability plan, during this overlap
period, the long term disability benefits payments would be reduced by the amount of short term
disability benefits paid.

Id.

Janish asked the Reliance claims team to confirm that her

understanding of the new process was correct. Id. Meehan responded: “that is exactly how it
will work.” Id.

7

In a November 9, 2010 letter, Reliance approved Boster’s claim for short term disability
benefits. Compl. ¶ 18. In the approval letter, Reliance explained that since Boster had elected to
use his paid time off through October 31, 2010, his benefits would start on November 1, 2010.
AR-STD-0026; see also Compl.¶ 18. Boster then received short term disability benefits for the
sixteen weeks from November 1, 2010 to February 21, 2011. AR-STD-0002. Based upon these
facts, Reliance assures the Court that Boster has suffered no particular harm, since he received a
full sixteen weeks of short term disability benefits. See Reliance Mem. in Supp. of Mot. for
Summ. J. [Dkt. # 17-1] at 1.
But that is not where the story ends. On January 1, 2011, Boster began receiving long
term disability benefits to which he was also entitled, and the start date for those payments was
not – and could not be – correspondingly delayed. AR-STD-0028. So, Boster’s sixteen weeks
of short term disability benefits payments overlapped with the period in which he was bound to
receive his long term disability benefits for approximately seven weeks, from January 1 to
February 21, 2011. Compl. ¶¶ 25–27. During that overlap period, Reliance deducted the amount
of short term disability benefits that Boster was receiving from his long term disability benefits
payment. See e.g., AR-STD-0028.

8

III. Procedural History
On June 18, 2012, Boster filed this suit against PCAOB and Reliance. The procedural
history is as follows:
In the original complaint, Boster asserted two claims against both defendants.
Count I alleged a loss of benefits claim under 29 U.S.C. § 1132(a)(1) on the
grounds that “RELIANCE with the cooperation and participation of
Defendant PCAOB, refused to commence benefits until November 1, 2010.”
Compl. ¶¶ 45–51. Count II alleged that defendants breached their fiduciary
duties and sought a remedy under 29 U.S.C. 1132(a)(2) and (g)(1). Compl. ¶¶
52–56.
On October 3, 2012, PCAOB moved for judgment on the pleadings on both
counts. PCAOB Mot. for J. on the Pldgs. at 1. Boster opposed PCAOB’s
motion. Pl.’s Opp. to PCAOB Mot. for J. on the Pldgs. [Dkt. # 24].
On October 23, 2012, Reliance moved for summary judgment on both counts.
Reliance Mot. for Summ. J. at 3.
On February 7, 2013, Boster filed a motion for leave to file an amended
complaint. Pl.’s Mot. for Leave to File Am. Compl. The new complaint
revised Count II to assert a cause of action for a breach of fiduciary duty
solely against PCAOB under 29 U.S.C. § 1132(a)(3) and added allegations to
bolster that claim. Am. Compl. ¶¶ 6, 11, 18, 20, 56–61. PCAOB opposed the
motion. PCAOB’s Mem. in Opp. to Pl.’s Mot. for Leave to File Am. Compl.
[Dkt. # 28]. But Reliance did not. See Pl.’s Mot. for Leave to File Am.
Compl. at 1.
On April 5, 2013, Boster filed an opposition to Reliance’s motion for
summary judgment and a cross-motion for summary judgment. Pl.’s CrossMot.
On April 18, 2013, Boster filed a motion for leave to file a second amended
complaint. Pl.’s Mot. for Leave to File 2d Am. Compl. In the proposed
second amended complaint, Boster added information that he learned from
discovery and a new claim against PCAOB for interference with his
attainment of benefits under 29 U.S.C. § 1140 (Count III). See 2d Am.
Compl. ¶¶ 20, 25, 28, 81–86.
The parties’ motions are fully briefed and ripe for decision.

10

STANDARD OF REVIEW
I. Motion for Judgment on the Pleadings
A motion for judgment on the pleadings pursuant to Rule 12(c) should be granted “only if
it is clear that no relief could be granted under any set of facts that could be proved consistent
with the allegations.” Longwood Vill. Rest., Ltd. v. Ashcroft, 157 F. Supp. 2d 61, 66 (D.D.C.
2001), citing Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). Put another way, “[i]f there
are allegations in the complaint which, if proved, would provide a basis for recovery[,] the Court
cannot grant judgment on the pleadings.” Nat’l Shopmen Pension Fund v. Disa, 583 F. Supp. 2d
95, 99 (D.D.C. 2008) (alterations in original) (citations and quotation marks omitted).
“The standard of review for such a motion is essentially the same as the standard for a
motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6).” Longwood,
157 F. Supp. 2d at 66–67. “To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must
contain 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 (2009) (internal quotation marks and citations
omitted); accord Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In Iqbal, the Supreme
Court reiterated the two principles underlying its decision in Twombly: “First, the tenet that a
court must accept as true all of the allegations contained in a complaint is inapplicable to legal
conclusions.” 556 U.S. at 678. And “[s]econd, only a complaint that states a plausible claim for
relief survives a motion to dismiss.” Id. at 679.
A claim is facially plausible when the pleaded factual content “allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678.
“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully.” Id. A pleading must offer more than

11

“labels and conclusions” or “a formulaic recitation of the elements of a cause of action,” id.,
quoting Twombly, 550 U.S. at 555, and “[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice,” id. In evaluating a motion for
judgment on the pleadings under Rule 12(c), the court may consider facts alleged in the
complaint as well as documents attached to or incorporated by reference in the complaint. Qi v.
FDIC, 755 F. Supp. 2d 195, 199–200 (D.D.C. 2010).
II. Motion for Summary Judgment
Summary judgment is appropriate “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The party seeking summary judgment bears the “initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). To defeat
summary judgment, the non-moving party must “designate specific facts showing that there is a
genuine issue for trial.” Id. at 324 (internal quotation marks omitted). The existence of a factual
dispute is insufficient to preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247–48 (1986). A dispute is “genuine” only if a reasonable fact-finder could find for the
non-moving party; a fact is only “material” if it is capable of affecting the outcome of the
litigation. Id. at 248; Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987). In
assessing a party’s motion, the court must “view the facts and draw reasonable inferences ‘in the
light most favorable to the party opposing the summary judgment motion.’” Scott v. Harris, 550

12

U.S. 372, 378 (2007) (alterations omitted), quoting United States v. Diebold, Inc., 369 U.S. 654,
655 (1962) (per curiam).
“The rule governing cross-motions for summary judgment . . . is that neither party waives
the right to a full trial on the merits by filing its own motion; each side concedes that no material
facts are at issue only for the purposes of its own motion.” Sherwood v. Washington Post, 871
F.2d 1144, 1148 n.4 (D.C. Cir. 1989), quoting McKenzie v. Sawyer, 684 F.2d 62, 68 n.3 (D.C.
Cir. 1982). In assessing each party’s motion, “[a]ll underlying facts and inferences are analyzed
in the light most favorable to the non-moving party.” N.S. ex rel. Stein v. District of Columbia,
709 F. Supp. 2d 57, 65 (D.D.C. 2010), citing Anderson, 477 U.S. at 247.
III. Motion to Amend
When a party seeks to amend its pleading after a responsive pleading has been served, the
Court should “freely give leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2);
see Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996). When evaluating whether to
grant a party’s motion for leave to amend its pleading after a responsive pleading has been
served, the Court must consider (1) undue delay; (2) prejudice to the opposing party; (3) futility
of the amendment; (4) bad faith; and (5) whether the plaintiff has previously amended the
complaint. Atchinson v. District of Columbia, 73 F.3d 418, 426 (D.C. Cir. 1996), quoting Foman
v. Davis, 371 U.S. 178, 182 (1962). The Court may deny leave to amend based on futility “if the
proposed claim would not survive a motion to dismiss.” Rumber v. District of Columbia, 598 F.
Supp. 2d 97, 102 (D.D.C. 2009), citing James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C.
Cir. 1996); see also Ross v. DynCorp, 362 F. Supp. 2d 344, 364 n.11 (D.D.C. 2005) (“While a
court is instructed by the Federal Rules of Civil Procedure to grant leave to amend a complaint
‘freely,’ it need not do so where the only result would be to waste time and judicial resources.

13

Such is the case where the Court determines, in advance, that the claim that a plaintiff plans to
add to his or her complaint must fail, as a matter of law. . . .”).
ANALYSIS
Boster has brought a series of complaints against his previous employer and his insurance
company for a single injury, the loss of six weeks’ worth of short term disability benefits. For
the reasons discussed below, the Court will allow Boster to recover for his loss of benefits from
Reliance and dismiss all of his claims against PCAOB.
I. Boster’s loss of benefits claim against Reliance
In Count I, Boster alleges that Reliance’s refusal to pay him short term disability benefits
between September 18, 2010 and October 31, 2010 violated the terms of the Plan, and he seeks
to recover those benefits pursuant to 29 U.S.C. § 1132(a)(1). Compl. ¶¶ 46–47.
A. The appropriate standard of judicial review for Boster’s loss of benefits claim is the
deferential standard.
As a threshold matter, the Court must first determine what standard of review applies to
the benefits determination in this case. ERISA provides that a participant in or beneficiary of a
covered plan may sue “to recover benefits due to him under the terms of [the] plan, to enforce his
rights under the terms of the plan, or to clarify [the] rights to future benefits under the terms of
the plan.” 29 U.S.C. § 1132(a)(1)(B). The Supreme Court has held that courts should apply a de
novo standard – instead of the more deferential arbitrary and capricious or abuse of discretion
standard – to a benefits determination under ERISA “unless the plan provides to the contrary.”
Metro. Life Ins. Co., v. Glenn, 554 U.S. 105, 111 (2008), citing Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989).

A plan provides to the contrary when it grants its

“administrator or fiduciary discretionary authority to determine eligibility for benefits.” Id.,
quoting Firestone, 489 U.S. at 115 (internal quotation marks omitted).
14

Under those

circumstances, “[t]rust principles make a deferential standard of review appropriate.” Firestone,
489 U.S. at 111; cf. Fitts v. Fed. Nat’l Mortgage Ass’n, 236 F.3d 1, 5 (D.C. Cir. 2001) (deciding
when Firestone’s exception applies).
The short term disability plan in this case provides:
Reliance Standard Life Insurance Company shall serve as the claims
review fiduciary with respect to the insurance policy and the Plan. The
claims review fiduciary has the discretionary authority to interpret the Plan
and the insurance policy and to determine eligibility for benefits.
Decisions by the claims review fiduciary shall be complete, final and
binding on all parties.
Short Term Disability Plan at 10, 35. Boster acknowledges that this language grants Reliance
discretionary authority to interpret the Plan’s terms and determine eligibility for benefits. See
Pl.’s Reply to Reliance’s Opp. to Pl.’s Cross-Mot. [Dkt. # 38] at 4, 6. Nonetheless, he argues
that “[s]ince the actual decision on the STD Benefit Start Date was made by PCAOB, which was
given no discretionary authority under the terms of the Plan, Reliance Standard’s compliance
with [PCAOB’s] demand is due no discretion whatsoever.” Pl.’s Cross-Mot. at 11. Therefore,
according to Boster, this Court should review the benefits determination in this case de novo. Id.
Boster points to a series of emails between PCAOB and Reliance representatives in
November 2010 to support his claim that PCAOB made the decision regarding the start date of
his short term disability benefits. On November 1, 2010, Tanya Janish, a PCAOB human
resources associate, wrote the following email to Amy Stephens, a Reliance claims examiner:
Please see attached the STD paperwork for Ron Boster. . . .
PLEASE DO NOT PAY UNTIL I FOLLOW UP. SEE MESSAGE
BELOW:
Also, has anyone discussed our new process for STD? We spoke with Joe
and Joyce a couple of weeks ago about something that was changed in
how we administer the plan for employees who come to us after they have
been out for some time. The plan is for the employee to use PTO through
the pay period in which they submit the STD paperwork. The STD period
15

would start after the elim period, but the PTO used that pay period would
be counted towards their 16 week balance. This means that I would tell
you the date to start payments from Reliance. I am sending now because I
wanted you to be able to get started collecting the paperwork from the
physician, but please hold off on the payment. We are discussing the new
process and how we are handling. I will let you know the date to start
payment when I know.
Nov. 1, 2010 Email at 1.8 Under this “new process,” the number of weeks of short term
disability benefits paid would be reduced by the number of weeks of paid time off that the
employee received, and the benefits payments would start after the employee stopped receiving
paid time off. Id.
Less than fifteen minutes later, the Reliance claims examiner responded: “I did speak
with Joe and Joyce on the change. I don’t agree with the PTO counting towards the 16 week
benefit duration. I don’t think we can do that.” Id. This response undermines Boster’s assertion
that PCAOB hijacked Reliance’s discretionary authority to determine eligibility for benefits and
that Reliance “merely complied with PCAOB’s direction.” See Pl.’s Reply to Reliance’s Opp. to
Pl.’s Cross-Mot. at 4. Instead, it demonstrates that when PCAOB proposed to interpret the Plan
in a way that Reliance believed was incorrect – i.e. that the sixteen week benefits period could be
reduced based on an employee’s use of paid time off – Reliance rejected the suggestion and
insisted on applying the Plan based on its own understanding.9

8
Boster has alleged that this message was followed by an email dated November 4, 2010
from Joseph Meehan, a Reliance employee, to Janish and Stephens, which stated: “Tanya, I
have spoke [sic] with Amy and we agree this is exactly how it will work.” Pl.’s Cross-Mot. at 6.
This is incorrect. The email from Meehan was in response to a November 4, 2010 PCAOB
email that is discussed below. See AR-STD-0121 [Dkt. # 33-10].
9
Boster also contends that statements from the PCAOB email such as “I would tell you the
date to start payments from Reliance . . .” demonstrate that PCAOB made the decision regarding
the start date of Boster’s short term disability benefits. Pl.’s Reply at 17. But as the Court has
stated, Reliance rejected PCAOB’s proposal and insisted on applying the Plan according to its
interpretation of the terms. Moreover, those statements only reflect PCAOB’s intention to
inform Reliance of the operative dates so that Reliance could make its benefits determination.
16

After further conversation with a Reliance employee, the PCAOB human resources
associate wrote another email to Reliance’s claims benefits team to confirm how she then
understood short term disability benefit payments would work:
I wanted to put in writing the process Joe and I discussed yesterday to
make sure that we are all on the same page. Please confirm that you agree
with the process below based on the example of Ron Boster (I provided
Amy with his paperwork Monday this week): Ron’s first day unable to
work was 9/13. Ron did not inform us of his leave until 10/22, and Ron
provided paperwork after he had been paid through 10/31. Ron is expected
to use PTO through 10/31, and if we were to provide Reliance with a pay
through date of 10/31 the STD period and payments would start effective
11/1/10. Ron’s 16 week STD period would run from 11/1/10 through
2/20/11. In determining the long term disability elimination period the
112 days would begin on 9/20/2010 and end on 1/9/11. Effective 1/10/11
Ron would continue to receive STD and start to receive LTD payments
(the long term disability payments would be offset by the short term
disability payment). He would receive STD and LTD payments through
the end of the short term disability period on 2/20/11. On 2/21/11, short
term disability payments would stop and long term disability would
continue if he remains eligible. To recap: The STD begins after the PTO
period ends +1 day (11/1/10 in Ron’s case), and the PTO period includes
the 7 day elimination period. The LTD elimination period does not change
and begins on the 113th day. Since STD begins after the PTO period ends
this causes an overlap with regard to the LTD elimination period. Please
confirm that my understanding based on the information above is correct.
AR-STD-0121.

In this email, the PCAOB representative expressed her understanding that

Boster would receive the full sixteen weeks of benefits permitted under the Plan, which further
reflects that it was the insurer’s interpretation that was implemented. Further, the fact that the
PCAOB representative repeatedly asked the Reliance claims team to confirm her understanding
of the process shows that PCAOB was deferring to Reliance’s authority. Reliance confirmed
PCAOB’s revised understanding and replied: “this is exactly how it will work.” Id.
The November 2010 email exchanges demonstrate that Reliance did not acquiesce to
PCAOB’s interpretation of the Plan. Rather, Reliance maintained its discretionary authority to
interpret the Plan, corrected PCAOB’s misunderstanding of the Plan’s terms, and made the
17

benefits determination based on its own interpretation. Indeed, the record shows that Reliance
did not adhere to the payment schedule that PCAOB established in the November 4, 2010 email.
For example, it started Boster’s long term disability payments on January 1, 2011 instead of
January 9, 2011. Since Reliance maintained and exercised its discretionary authority under the
Plan, the Court will apply the deferential standard of review to the benefits determination in this
case.
The cases that Boster cites to support his position that the de novo standard should apply
are distinguishable. In Fitts v. Fed. Nat’l Mortgage Assoc., the D.C. Circuit applied the de novo
standard because the plan did not expressly give the insurer or the employer discretionary
authority to determine benefits eligibility. 236 F.3d 1, 5–6 (D.C. Cir. 2001). In the remaining
cases, the court applied the de novo standard because the benefits determination had been made
by someone other than the person with discretionary authority to do so under the plan. See
Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580, 583–84 (1st Cir. 1993); Baker
v. Big Star Div. of the Grand Union Co., 893 F.2d 288, 291 (11th Cir. 1989); Crider v. Highmark
Life Ins., 458 F. Supp.2d 487, 501–03 (W.D. Mich. 2006); cf Sharkey v. Ultramar Energy Ltd.,
70 F.3d 226, 229 (2d Cir. 1995) (remanding to the district court to make the factual
determination as to who actually made the benefits determination). These cases do not alter the
Court’s conclusion because here, the Plan expressly gave Reliance discretionary authority to
make benefits determinations, Short Term Disability Plan at 10, 35, and Reliance exercised that
authority.

18

B. The Court will deny Reliance’s motion for summary judgment and grant Boster’s crossmotion because Reliance’s construction and application of the Plan did not result from a
deliberate, principled, and reasonable process.
When evaluating a benefits determination under the deferential standard,10 the critical
inquiry is: did the insurance company “reasonably construe and apply” the plan? Block v.
Pitney Bowes Inc., 952 F.2d 1450, 1454 (D.C. Cir. 1992). This means a court cannot overturn a
decision that is reasonable, “even if an alternative decision also could have been considered
reasonable.” Block, 952 F.2d at 1452 (internal quotation marks omitted); Mobley v. Cont’l Cas.
Co., 405 F. Supp. 2d 42, 48 (D.D.C. 2005) (“[A] deferential standard of review allows the plan
administrator to reach a conclusion that may technically be incorrect so long as it is reasonably
supported by the administrative record.”). The administrator’s decision should therefore not be
overturned if it is the result of a “deliberate, principled, reasonable process and if it is supported
by substantial evidence,” meaning it must be “more than a scintilla but less than preponderance.”
Buford v. UNUM Life Ins. Co. of Am., 290 F. Supp. 2d 92, 100 (D.D.C. 2003) (internal quotation
marks and citations omitted).
In determining whether a fiduciary’s construction of a plan is reasonable, the Court
should also consider: (1) whether the interpretation is contrary to the language of the plan; (2)
whether it is consistent with the specific provision’s purpose; and (3) whether it is consistent
with prior similar interpretations and whether the participants had notice of the fiduciary’s
interpretation. Costantino v. Washington Post Multi-Option Benefits Plan, 404 F. Supp. 2d 31,
10
The standard to be applied in cases where a fiduciary has been given discretionary
authority has been “variously described by the [Supreme] Court as ‘arbitrary and capricious’ or
‘abuse of discretion,’ but regardless of how it is phrased, the standard to be applied ‘is plainly
deferential.’” James v. Int’l Painters and Allied Trades Indus. Pension Plan, 710 F. Supp. 2d
16, 23 (D.D.C. 2010), quoting Wagener v. SBC Pension Benefit Plan–Non–Bargained Program,
407 F.3d 395, 402 (D.C. Cir. 2005); see also Block v. Pitney Bowes Inc., 952 F.2d 1450, 1454
(D.C. Cir. 1992) (“The distinction, if any, between ‘arbitrary and capricious review’ and review
for ‘abuse of discretion’ is subtle. . . . we are satisfied, there is no need to adopt one phrase and
avoid the other.”).
19

42 (D.D.C. 2005). The Court’s review of a benefits determination “may only be based on the
record available to the administrator or fiduciary at the time the decision was made.” Crummett
v. Metro. Life Ins. Co., No. 06-01450, 2007 WL 2071704, at *3 (D.D.C. July 16, 2007), citing
Block, 952 F.2d at 1455. Here, while the challenged determination can be seen as consistent
with the purpose of the operative provision of the Plan, it does not fit neatly with the plain
language of the Plan. More important to the decision here, the determination was inconsistent
with prior interpretations of the Plan, the determination was rendered without any notice to the
employees of the change, and the record does not reflect that the determination was the result of
a deliberate process.
1. Reliance’s benefits determination was consistent with the purpose of the “exhaustion
of sick leave” provision.
While the language of the policy in question in this case is clear, it is not entirely clear
how it should apply in this situation. The short term disability policy provides:
DAY BENEFITS BEGINS: Benefits, for one period of disability, will
be paid as follows:
INJURY AND SICKNESS: We will pay benefits from the later of
the exhaustion of sick leave; or
(1) the first day of disability if due to Injury; or
(2) The eighth consecutive day of disability if due to Sickness.
Short Term Disability Plan at 5 (emphasis added).
There is something of a misalignment though, between the Plan and the employer whose
employees are covered by the Plan. Although the Plan refers to “the exhaustion of sick leave,”
PCAOB does not actually offer “sick leave” to its employees. Rather, it offers paid time off,
which is accrued leave that employees can use “for vacation, personal or family needs or in case
of sickness.” PCAOB Employment Policies and Procedures Manual at 12 (emphasis added).

20

Reliance asserts that it “reasonably and correctly interpreted the phrase ‘sick leave’ to
include PTO that is used when an employee misses work due to sickness,” and therefore, its
decision to begin payment of Boster’s short term disability benefits after he had used his paid
time off as sick leave was also reasonable. Reliance Opp. to Pl.’s Cross-Mot. at 5; Reliance Mot.
for Summ. J. at 8. Sick leave is “[a]n employment benefit allowing a worker time off for
sickness,” Black’s Law Dictionary 1506 (9th ed. 2009), and here, PCAOB allowed employees to
use paid time off for sickness. Therefore, it was not unreasonable to consider this time off to be
“sick leave.”
A court could find that Reliance’s determination that a plan participant could not
simultaneously receive his employer’s version of “sick leave” and short term disability benefits
is consistent with the purpose of the “exhaustion of sick leave” provision. The provision in the
Plan that calls for short term disability benefits payments to begin after “the exhaustion of sick
leave” can be read as expressing the contracting parties intention that a plan participant should
not be entitled to receive both “sick leave” and short term disability benefits at the same time.
See Short Term Disability Plan at 5. This interpretation is support by the PCAOB’s internal
employment policies and procedures manual, which states:
STD benefits work in conjunction with Paid Time Off (PTO). Employees
may use PTO during the STD waiting period, which is the first seven
calendar days of a covered disability, illness or injury. Upon completion
of the applicable waiting period, employees who are eligible may choose
to utilize STD benefits. However, employees with adequate PTO balances
may choose to use PTO for all or part of an eligible absence. . . . To
initiate STD benefits, employees must notify Human Resources of their
inability to work . . . employees who fail to notify Human Resources may
risk using more PTO than intended.
PCAOB Employment Manual at 17–18. This language suggests that the employer contemplated
that employees would be required to choose between the two methods of compensation, and that
PCAOB employees would not be entitled to receive both paid time off and short term disability
21

benefits for the same period of time. After the completion of the seven day waiting period,
PCAOB employees “may choose to utilize STD benefits” or they “may choose to use PTO for all
or part of an eligible absence.” Id. The manual further informs employees that if they fail to
notify human resources of their inability to work, they might receive paid time off for their
absence instead of short term disability benefits. Id.
But while Reliance’s reading of the Plan may not be unreasonable as an abstract
proposition, that is not where this Court’s inquiry ends. Boster’s complaint stems in large part
from the fact that Reliance never applied this interpretation to PCAOB’s employees before.
2. Although Reliance’s benefits determination accords with the spirit of the “exhaustion
of sick leave” provision, the Court will overturn the decision because it is
inconsistent with the way Reliance previously applied the Plan, it fails to give
meaning to the term “exhaustion,” and the record does not reflect the necessary
deliberative process.
In support of his motion, Boster provides the Court with evidence revealing that PCAOB
and Reliance previously grappled with the disconnect between the Plan and PCAOB’s leave
polices. In December 2006, Elizabeth Wright, a PCAOB employee, contacted Jack McGinness,
a Reliance salesperson, regarding the implementation of the short term disability benefits
program. Ex. 5 to Pl.’s Cross-Motion [Dkt. # 33-6]. Wright informed McGinness that PCAOB
employees generally filed for short term disability after they had been out of work for a while,
and that sometimes they filed after the cutoff date for the payroll cycle. Id. In these situations,
the employees received both paid time off and short term disability benefits for their absence. Id.
Wright explained that “it is very hard to get the employees to pay any monies they have received
back to PCAOB,” and she wondered if Reliance could solve this problem by “delay[ing] the
employees [sic] STD payments until after their PTO ends.”

Id.

In response, McGinness

suggested that they “amend the policy [to] include PTO as an offset – offsetting dollar for dollar

22

for any PTO monies received.”

Id.

Wright stated that she would discuss the possible

amendment with her manager. Id.
This email exchange shows that in December 2006, Reliance did not interpret the Plan to
require delay of short term disability benefits after an employee’s use of paid time off; in fact,
Reliance was then paying short term disability benefits while employees were still receiving paid
time off. When PCAOB proposed delaying the start date of those benefits, Reliance did not
inform PCAOB that such a delay was already permitted under the terms of the Plan. Instead,
Reliance proposed solving the overlap issue by amending the policy to authorize an offset. This
amendment was never accomplished, and the issue persisted.
PCAOB raised the overlap issue again four years later. In a November 1, 2010 email, a
PCAOB representative informed a Reliance claims examiner about a new process for
administering the Plan. Nov. 1, 2010 Email. She proposed that they implement the offset that
had never been written into the policy: under the new process, employees who filed for short
term disability benefits after they had been absent for a while would have to continue to use their
paid time off through the end of the pay period in which they filed their claim, the short term
disability benefits period would commence after the seven day elimination period, and the
amount of short term disability benefits paid would be reduced by the amount of paid time off
received. Nov. 1, 2010 Email; see also AR-STD-0121 (referring to the “7 day elimination
period” for short term disability benefits). The Plan language remained unchanged, though, so,
Reliance responded and explained that paid time off could not be used to reduce or offset the
sixteen week benefit duration period. Nov. 1, 2010 Email. Notably, even under PCAOB’s
proposed “new process,” the short term disability benefits period was still scheduled to begin
after the seven day elimination period and not after the employee ceased relying upon paid time

23

off. Nov. 1, 2010 Email. Reliance did not address the proposed start date – which accorded with
the way that it had previously construed and applied the Plan – in its response to PCAOB; the
email was focused on the unavailability of the offset option.
The documents provided to the Court suggest that further conversation among the parties
ensued, and a PCAOB representative wrote to Reliance to confirm what they had discussed. At
that point, and for the first time, Reliance endorsed a different construction of the Plan. In a
November 4, 2010 email, Reliance agreed, for the first time, that “STD begins after the PTO
period ends + 1 day.” AR-STD-0121.11 It then confirmed that the last day that an employee
received paid time off for the disability would be considered the end of the paid time off period
for purposes of triggering the start of the short term disability benefits. AR-STD-0121–22. But
this construction cannot be harmonized with the language of the policy. As Boster notes, the
Plan does not authorize Reliance to wait to pay benefits until some point after an employee had
received some portion of some form of sick leave from his employer; it states that benefits may
begin after “the exhaustion of sick leave.” Pl.’s Cross-Mot. at 16; Short Term Plan at 5.
Reliance contends that “the policy was applied as written and intended, such that when
Plaintiff exhausted his compensable sick leave the STD benefits began.” Reliance Opp. to Pl.’s
Cross-Mot. at 8. But this contention is contrary to the literal definition of the term “exhaustion.”
See Donovan v. Carlough, 576 F. Supp. 245, 249–50 (D.D.C. 1983) (reversing the fiduciary’s
interpretation and application of the Plan because it was contrary to the literal definition the
Plan’s terms). Indeed, Reliance’s interpretation ignores the concept of exhaustion entirely.

11
This agreement appeared to be based on discussions between representatives from
PCAOB and Reliance the day before. AR-STD-0121. But the November 4 email does not
provide any information as to how the parties arrived at this interpretation of the Plan.
24

To exhaust is to deplete or to use up completely. See Merriam-Webster Dictionary,
available at http://www.merriam-webster.com/dictionary/exhaust (last accessed Aug. 8, 2013).
Paid time off is “one ‘bucket’ of leave” that consolidates multiple types of leave such as paid
vacation, sick, and personal days into a single plan. Reliance Mot. for Summ. J. at 7. Under
such a system, the entirety of an employee’s accrued paid time off could constitute “sick leave”
because he could choose to use all of that time to cover an absence based on sickness. Here,
Boster had 188 hours of paid time off remaining as of October 31, 2010. Pl.’s Cross-Mot. at 5.
So, if paid time off is synonymous with sick leave under the Plan, it had not yet been exhausted
on the date Reliance initiated short term disability benefits.
Reliance’s construction would prompt a host of practical problems.

PCAOB’s

employment manual does not state whether an employee has to inform the company of the
reason for his use of paid time off. So how would the exhaustion requirement apply in a
situation where an employee uses paid time off while on vacation, becomes disabled during that
vacation and then files for short term disability 30 days after that disability? Would an employee
who became temporarily disabled be required to exhaust all of his paid time off before drawing
short term disability benefits, thereby leaving himself with no vacation, no family leave, and no
accrued paid time off if he were fortunate enough to recover and return to work?
Reliance does not address any of these issues in the administrative record or in its
briefings in this case. In response to Boster’s argument that he did not exhaust his sick leave as
of October 31, 2010, Reliance merely states that it is Boster’s burden “to prove that he did not
exhaust his PTO, a burden he cannot satisfy.”

25

Reliance Opp. to Pl.’s Cross-Mot. at 8–9.

Contrary to this assertion, Boster does not have to prove that he “did not exhaust his PTO.”12
The question is whether Boster exhausted his employer’s version of sick leave. This confusion
indicates that Reliance has not wrestled with or considered how the exhaustion provision applies
in conjunction with PCAOB’s leave policy.
More importantly, the email provided no explanation for why Reliance suddenly began to
interpret the term “exhaustion of sick leave” as the day that an employee stops receiving paid
time off for the disability. In fact, the November 4 email is entirely devoid of any discussion
about the need to consider PCAOB’s paid time off as sick leave or the term “exhaustion” and
how it applies in a situation where the company only offers paid time off. In the absence of any
reasoning and analysis, and the lack of any record of a decision-making process beyond a
reference in an email to a telephone call with PCAOB, the Court cannot make the necessary
finding that the decision in Boster’s case was based on a deliberate and principled process. That
conclusion is compounded by the fact that the new interpretation was applied to Boster for the
first time although there had never been notice to employees of the change. See Donovan, 576 F.
Supp. at 251 (holding that the fiduciary’s benefits determination was not reasonable in part
because it never gave the plan participants notice of its interpretation of the Plan).
The main problem in this case is that Reliance’s short term disability plan was not wellsuited to PCAOB’s personnel policies. Reliance and PCAOB were aware of this problem at least

12
Moreover, Boster has already demonstrated that he had 188 hours of paid time off as of
October 31, 2010, so he had not exhausted his paid time off as of that date. See Pl.’s Cross-Mot.
at 5.
26

as of December 2006, but they did not take the appropriate next step: to amend the policy.13
Faced with the same problem four years later, it was unreasonable to simply change the rules on
Boster. Therefore, the Court will deny Reliance’s motion for summary judgment and grant
Boster’s cross-motion.14 The Court will also deny Boster’s motion to file a second amended
complaint as to Reliance as moot in light of its ruling on the parties’ cross-motions for summary
judgment.
II. Boster’s claims against PCAOB
In his original complaint, Boster asserted two claims against PCAOB: Count I for loss of
benefits; and Count II for breach of fiduciary duty. In his proposed amended complaint, Boster
sought to revise Count II to state a claim against just PCAOB and add information to bolster that
claim. In his proposed second amended complaint, Boster added information gleaned from
discovery and added a new claim for interference with the attainment of his rights against
PCAOB (Count III). The Court will grant PCAOB’s motion for judgment on the pleadings on
the original complaint and deny Boster’s motions to file an amended and a second amended
complaint as futile.

13
Reliance argues that the fact that the amendment was never made is irrelevant here
because this case involves the start date of benefits and not “an offset or reduction of the STD
benefit amount based on a claimant’s receipt of sick time.” Reliance Opp. to Pl.’s Cross-Mot. at
8. The Court’s decision to overturn the benefits determination is not based on the parties’ failure
to amend the Plan, but the point is that the Plan needed fixing, and any new construction had to
be accompanied by reasoning, explanation, and notice.
14
Since the Court is granting Boster’s cross-motion for summary judgment, it need not
address Boster’s other arguments including that Reliance failed to state any notice of appeal
rights as required by ERISA in its November 9, 2010 adverse determination letter, or that it had a
conflict of interest that affected its benefits determination.
27

A. Count I: Loss of benefits claim
1. The Court will grant PCAOB’s motion for judgment on the pleadings as to Count I of
the original complaint because PCAOB was not a fiduciary with respect to the
benefits determination.
Count I alleges that PCAOB is liable for Boster’s loss of benefits because PCAOB
cooperated with and participated in Reliance’s decision to delay benefits until November 1,
2010. Compl. ¶ 46. Under ERISA, a “person is a fiduciary with respect to a plan to the extent
. . . he has any discretionary authority or discretionary responsibility in the administration of such
plan.” 29 U.S.C. § 1002(21)(A). But “[f]iduciary status under § 1002(21)(A) is not an ‘all or
nothing concept. . . . [A] court must ask whether a person is a fiduciary with respect to the
particular activity in question.’” Maniace v. Commerce Bank of Kansas City, N.A., 40 F.3d 264,
267 (8th Cir. 1994), quoting Kerns v. Benefit Trust Life Ins. Co., 992 F.2d 214 (8th Cir. 1993);
see also American Fed’n of Unions Local 102 v. Equitable Life Assurance Soc’y, 841 F.2d 658,
662 (5th Cir. 1988) (“A person is a fiduciary only with respect to those portions of a plan over
which he exercises discretionary authority or control.”).
A benefit plan may provide “for allocating fiduciary responsibilities . . . among named
fiduciaries.” 29 U.S.C. § 1105(c)(1). “If named fiduciaries of a plan allocate responsibilities in
accordance with a procedure for such allocation set forth in the plan, a named fiduciary will not
be liable for acts and omissions of other named fiduciaries in carrying out fiduciary
responsibilities which have been allocated to them, except” in limited circumstances that are
inapplicable here. 29 C.F.R. § 2509.75–8, FR-13; see also 29 U.S.C. § 1105(c)(2).
In Hunter v. Metro. Life Ins. Co., 251 F. Supp. 2d 107, 113 (D.D.C. 2003), the court held
that an employer who was also the plan sponsor and administrator could not be held liable for an
insurer’s decision to deny the plaintiff benefits because the plan explicitly gave the insurer
discretionary authority to determine a claimant’s entitlement to benefits, and there was “no
28

indication in the record that [the employer] had any discretion or played any role in the
determination of plaintiff’s claim.” Based on that conclusion, the court granted the employer’s
motion for summary judgment. Id. The D.C. Circuit summarily upheld the district court’s
decision on the grounds that: (1) the plaintiff “failed to establish a genuine issue of material fact
as to whether [the employer] acted as a fiduciary with respect to the denial of appellant’s claim
for disability benefits”; (2) “district court properly concluded that, absent exceptions that do not
apply here, the plan’s delegation of fiduciary responsibilities to [the insurer] shields [the
employer] from liability for [the insurer’s] alleged breach”; and (3) “there [were] no genuine
issues of material fact to suggest that [the employer] exercised fiduciary responsibility in
denying appellant’s benefit claim.” Hunter v. Metro. Life Ins. Co., No. 03-7050, 2003 WL
22240321, at *1 (D.C. Cir. Sept. 24, 2003) (per curiam) (Hunter II).
Boster argues that PCAOB is liable for his loss of benefits because PCAOB was acting in
its fiduciary capacity as the plan administrator when it “conveyed misleading information to
Reliance which adversely affected the benefits paid to Boster,” namely that he was receiving
paid time off through October 31, 2010. Pl.’s Opp. at 5–7.15 But under Hunter II, the relevant
inquiry is not whether PCAOB was acting in a fiduciary capacity when it sent the employment
information but whether PCAOB “acted as a fiduciary with respect to the denial of [Boster’s]
claim for disability benefits.” Hunter II, 2003 WL 22240321, at *1 (emphasis added). As in
Hunter, here, the Plan provides that Reliance is “the claims review fiduciary with . . . the
discretionary authority to interpret the Plan and the insurance policy and to determine eligibility
for benefits.” Short Term Disability Plan at 10, 35. PCAOB’s provision of information to
Reliance regarding Boster’s use of paid time off does not give rise to liability for loss of benefits
15
This information was not “misleading” because Boster has acknowledged that he
received paid time off through October 31, 2010. Compl. ¶ 16.
29

under 29 U.S.C. § 1132(a)(1) because it does not alter the fact that Reliance was the claims
fiduciary with sole discretion to use that information in a benefits determination. Since the
original complaint fails to plausibly allege that PCAOB had or exercised fiduciary responsibility
in denying Boster’s benefit claim, PCAOB cannot be held liable for his loss of benefits, and the
Court will grant PCAOB’s motion for judgment on the pleadings on Count I of the original
complaint. See Hunter II, 2003 WL 22240321, at *1.
2. The Court will deny Boster’s motion for leave to file a second amended complaint as
to Count I because the proposed amendments are futile.16
“Courts may deny a motion to amend a complaint as futile . . . if the proposed claim
would not survive a motion to dismiss.” James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099
(D.C. Cir. 1996). With respect to Count I, the major difference between the proposed second
amended complaint and the prior complaints is that it includes information that Boster uncovered
during discovery, namely the content of the November 2010 emails. The Court may rely on
these emails when determining whether the proposed second amended complaint would survive
a motion to dismiss because the emails are cited and quoted throughout the complaint and are
therefore incorporated by reference in the complaint. See Gustave-Schmidt v. Chao, 226 F.
Supp. 2d 191, 196 (D.D.C. 2002) (citation omitted).
In the November 1, 2010 email, PCAOB proposed instituting a “new process” for how it
“administer[ed]” the Plan for certain employees, and Reliance informed PCAOB that the
procedure would not comport with the Plan. Nov. 1, 2010 Email. As the Court has already
concluded, this email exchange demonstrates that Reliance maintained and exercised its
discretionary authority to interpret the Plan and determine benefits eligibility. See supra § I(A).
16
The additional allegations in the amended complaint are relevant to the breach of
fiduciary duty claim against PCAOB. Pl.’s Mot. for Leave to File Am. Compl. at 2. Since the
amended complaint does not seek to revise or add allegations relevant to Count I, the Court will
deny it as futile as to Count I.
30

Therefore, those emails do not alter the Court’s analysis under Hunter because they do not
demonstrate that PCAOB exercised fiduciary responsibility with respect to the benefits
determination. See 2003 WL 22240321, at *1. Accordingly, the Court will deny Boster’s
motion to file a second amended complaint as futile as to Count I.
B. Count II: Breach of fiduciary duty claim
1. The Court will grant PCAOB’s motion for judgment on the pleadings on Count II of
the original complaint because Boster has conceded that count did not state a claim.
Count II of the original complaint asserted a cause of action for breach of fiduciary duty
against both defendants and sought a remedy under 29 U.S.C. § 1132(a)(2). Compl. ¶ 56.
Subsequently, Boster withdrew this claim, conceding that “a Section 1132(a)(2) action does not
lie because the remedy sought is on behalf of the Plaintiff and not the Plan.” Pl.’s Opp. to
PCAOB Mot. for J. on the Pldgs. at 8. Therefore, the Court will grant PCAOB’s motion for
judgment on the pleadings on Count II of the original complaint as conceded.
2. The Court will deny Boster’s motions to file an amended and a second amended
complaint with respect to Count II as futile.
Boster then sought to file an amended and second amended complaint to assert a breach
of fiduciary duty claim under 29 U.S.C. § 1132(a)(3) solely against PCAOB. See Am. Compl.
¶¶ 56–61; 2d. Am. Compl. ¶¶ 74–80. Section 1132(a)(3) allows plan beneficiaries to bring suit
“(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). This
section is a “catchall provision” that “act[s] as a safety net, offering appropriate equitable relief
for injuries caused by violations that [§ 1132] does not elsewhere remedy.” Varity Corp. v.
Howe, 516 U.S. 489, 512 (1996). But “where Congress elsewhere provided adequate relief for a

31

beneficiary’s injury, there will likely be no need for further equitable relief, in which case such
relief normally would not be ‘appropriate.’” Id. at 515, quoting 29 U.S.C. § 1132(a)(3).
The D.C. Circuit has not decided whether a plaintiff may simultaneously pursue a claim
for denial of benefits under section 1132(a)(1)(B) and a claim for breach of fiduciary duty under
section 1132(a)(3). However, “[c]ourts in this Circuit have generally followed the view of the
majority of circuits that a breach of fiduciary claim under § 1132(a)(3) cannot stand when a
plaintiff has an adequate remedy for her injuries under § 1132(a)(1)(B).” Zalduondo v. Aetna
Life Ins. Co., 845 F. Supp. 2d 146, 155 (D.D.C. 2012); see also Clark v. Feder, Semo & Bard,
P.C., 808 F. Supp. 2d 219, 226 (D.D.C. 2011) (holding that a plaintiff “may proceed only under
§ 1132(a)(1)(B) or § 1132(a)(3), not under both provisions”); Kifafi v. Hilton Hotels Ret. Plan,
616 F. Supp. 2d 7, 39 (D.D.C. 2009) (dismissing the plaintiff’s breach of fiduciary duties claim
on the grounds that “a plan participant cannot proceed with a breach of fiduciary duty claim
under Section 502(a)(3) when relief is available under other remedial sections of ERISA”).17
However, a plan participant may simultaneously bring claims under sections 1132(a)(1)(B) and
1132(a)(3) when section 1132(a)(1)(B) does not provide an adequate and complete remedy for
the participant’s injuries. See England v. Marriott Int’l, 764 F. Supp. 2d 761, 780 (D. Md. 2011)
(allowing the plaintiff to pursue claims under both section 1132(a)(1)(B) and 1132(a)(3) because
the remedy sought under section 1132(a)(3) – the reformation of the terms of the benefit awards
– was not available under section 1132(a)(1)(B)).

17
“[T]he majority of circuits that have decided this issue have held that a breach of
fiduciary duty claim cannot stand where a plaintiff has an adequate remedy through a claim for
benefits under § 1132(a)(1)(B).” Clark, 808 F. Supp. 2d at 225, citing Korotynska v. Metro. Life
Ins. Co., 474 F.3d 101, 107 (4th Cir. 2006); Antolik v. Saks, Inc., 463 F.3d 796, 803 (8th Cir.
2006); Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998).
32

Boster argues that his breach of fiduciary duty claim is “not a repackaged denial of
benefits [claim] because it is, at least in part, based upon different facts.” Pl.’s Mot. for Leave to
File Am. Compl. at 6. Specifically, he argues that PCAOB breached its fiduciary duty when it
falsely told his wife that it had a “revised Plan requiring 6 weeks use of leave before STD.” Pl.’s
Mot. for Leave to File Am. Compl. at 6; Am. Compl. ¶ 20; 2d. Am. Compl ¶ 33. But the
determination of whether equitable relief is appropriate is not based on whether the equitable
claim arises out of “different facts.” Instead, the court must determine whether “Congress
elsewhere provided adequate relief for a beneficiary’s injury.” Varity, 516 U.S. at 515 (emphasis
added).
The gravamen of Boster’s complaints is that “[a]s a direct and proximate consequence of
the conduct of the Defendants, the Plaintiff has suffered and will continue to suffer loss of STD
disability benefits amounting to thousands of dollars.” 2d Am. Compl. ¶¶ 66, 73; see also Am.
Compl. ¶¶ 48, 55. This is the only injury that Boster has alleged; he has not alleged a separate
injury that he suffered as a result of PCAOB’s alleged false statement to his wife. The Court has
provided an adequate remedy for Boster’s loss of benefits by granting his motion for summary
judgment against Reliance.

See supra § I(B).

Any further equitable relief would be

inappropriate.18 See Varity, 516 U.S. at 515; see also Zalduondo, 845 F. Supp. 2d at 154–55
(denying the plaintiff’s motion to amend her complaint to assert a claim for breach of fiduciary

18
Boster has requested “such additional equitable and legal relief as may be necessary and
proper.” 2d Am. Compl. ¶ E. He argues that as equitable relief for PCAOB’s alleged breach of
its fiduciary duty, the Court could order PCAOB to pay a surcharge and attorneys’ fees and costs
or order injunctive relief. Pl.’s Opp. to PCAOB’s Mot. for J. on the Pldgs. at 10. The Court has
provided an adequate remedy for Boster’s loss of benefits and attorneys’ fees are already
provided for under section 1132(a)(1). Further, Boster has not provided any support for his
argument that the Court should also order PCAOB to pay a surcharge nor has he sought any
specific form of injunctive relief.
33

duty against the ERISA plan administrator under section 1132(a)(3) as futile because she had an
adequate legal remedy against the insurer under section 1132(a)(1)(B)).
C. Count III: Interference with the attainment of rights
The second amended complaint seeks to add a claim against PCAOB for interference
with the attainment of rights in violation of 29 U.S.C. § 1140. 2d Am. Compl. ¶¶ 81–86.
Section 1140 of ERISA provides:
It shall be unlawful for any person to discharge, fine, suspend, expel,
discipline, or discriminate against a participant or beneficiary for
exercising any right to which he is entitled under the provisions of an
employee benefit plan, . . . or for the purpose of interfering with the
attainment of any right to which such participant may become entitled
under the plan.
29 U.S.C. § 1140. The elements of a cause of action under section 1140 are: “(1) prohibited
employer conduct; (2) taken for the purpose of interfering (3) with the attainment of any right to
which the employee may become entitled.” May v. Shuttle, Inc., 129 F.3d 165, 169 (D.C. Cir.
1997), citing Berger v. Edgewater Steel Co., 911 F.2d 911, 922 (3d. Cir. 1990).
Boster contends that in violation of section 1140, “PCAOB discriminated against the
Plaintiff in directing a ‘new process’ aimed specifically and solely at Plaintiff, and intentionally
interfered with Plaintiff’s attainment of rights under the terms of the Plan.” 2d Am. Compl. ¶ 65;
see also id. ¶ 83 (“PCAOB discriminated against Plaintiff for the purpose of interfering with
Plaintiff’s rights to his STD benefits.”). In the November 1, 2010 email, PCAOB discussed a
“new process” for short term disability benefits: “has anyone discussed our new process for
STD? We spoke with Joe and Joyce a couple of weeks ago about something that was changed in
how we administer the plan for employees who come to us after they have been out for some
time.” AR-STD-0120 (emphasis added); see 2d Am. Compl. ¶ 20. Four days later, PCAOB sent
another email to Reliance stating: “[T]o make sure that we are all on the same page. Please
34

confirm that you agree with the process below based on the example of Ron Boster . . . .” ARSTD-0121 (emphasis added); see 2d Am. Compl. ¶ 25.
Contrary to Boster’s assertions, these email exchanges do not “clearly reflect that the
‘new process’ was established for Boster’s claim in November 2010.”

See Pl.’s Reply to

PCAOB’s Opp. to Mot. to file 2d Am. Compl. at 6. First, the discussion regarding the “new
process” started weeks before PCAOB sent Boster’s claims paperwork to Reliance. Second, the
use of the plural – “employees” and “they” – indicate that the new process was intended to apply
broadly to all employees who fit the criteria. The November 4, 2010 email confirms this
interpretation and shows that PCAOB outlined how the new process would apply in Boster’s
case as an “example” to ensure that Reliance and PCAOB were “on the same page.” See ARSTD-0121.
In an attempt to avoid this conclusion, Boster submits that PCAOB’s “new process” was
discriminatory because it was not applied to any prior employee. 2d Am. Compl. ¶ 31. This
argument is unconvincing: as Boster acknowledges, this process was “new,” so the fact that had
not been applied to anyone in the past does not suggest discrimination. Notably, Boster has not
alleged or presented any evidence to demonstrate that this “new process” has not been applied to
anyone else who met the criteria since it was established in November 2010. Since Boster has
provided no factual support for his allegation that PCAOB discriminated against him in violation

35

of section 1140, Count III would not survive a motion to dismiss, and the Court will deny
Boster’s motion for leave to file a second amended complaint to add that claim as futile.19
CONCLUSION
For the reasons stated above, the Court will:
deny Reliance’s motion for summary judgment and grant Boster’s crossmotion;
grant PCAOB’s motion for judgment on the pleadings;
deny Boster’s motion for leave to file an amended complaint as futile; and
deny Boster’s motion for leave to file a second amended complaint as
moot as to Reliance and futile as to PCAOB.
A separate order will issue.

AMY BERMAN JACKSON
United States District Judge
DATE: August 8, 2013

19
PCAOB and Boster also disagree as to whether section 1150 applies only to actions that
impact a plaintiff’s employment. See PCAOB’s Opp. to Mot. to File 2d Am. Compl. at 6–7
(contending that section 1150 only applies to employer actions that affect the employeremployee relationship); Pl.’s Reply to PCAOB’s Opp. to Mot. to File 2d Am. Compl. at 2–4
(alleging that in the D.C. Circuit, to state a claim under section 1150, an individual plan
participant need only plausibly allege that he or she was targeted for discriminatory action as
compared to other participants). The Court will not address this issue because Boster has failed
to factually allege that PCAOB took any discriminatory actions against him.
36