Hanna et al v. YRC Worldwide, Inc. et al
Filing
166
MEMORANDUM AND ORDER granting in part and denying in part 145 Plaintiffs' Motion to Strike Defendant's Affirmative Defenses. Signed by District Judge John W. Lungstrum on 4/15/2011. (ses)
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF KANSAS
In Re: YRC Worldwide, Inc.
ERISA Litigation
Case No. 09-2593-JWL
MEMORANDUM & ORDER
Plaintiffs, former employees of YRC Worldwide, Inc. (YRCW) who participated in the
YRC Worldwide, Inc. Retirement Savings Plan (the Plan), bring this class action lawsuit for
breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA), 29
U.S.C. § 1132. Plaintiffs allege that defendants–including YRCW; the individual members of
the Benefits Administrative Committee; and YRCW’s Board of Directors–breached their
fiduciary obligations with respect to the Plan by continuing to offer as an investment option a
fund invested primarily in the Company’s own stock, by permitting the Plan to continue to invest
contributions in the Company stock fund and by permitting the fund to invest in Company stock
when they knew or should have known that the Company stock fund was an imprudent
investment for retirement savings.
Plaintiffs also assert claims that are derivative of their prudence claims, including a claim
that defendants did not loyally serve Plan participants by taking steps to avoid a conflict of
interest such as engaging independent fiduciaries who could independently assess the Plan’s
investments in the Company stock fund, divesting the Plan of company stock and discontinuing
further investments in company stock; a claim that YRCW and the director defendants failed to
monitor the performance of the Benefits Administrative Committee members; and a claim for
co-fiduciary liability.
This matter is presently before the court on plaintiffs’ motion to strike defendants’
affirmative defenses (doc. 145).1 As will be explained, the motion is granted in part and denied
in part.
Section 404(c) (Affirmative Defense 1)
For their first affirmative defense, defendants assert that “The claims of Plaintiffs and
each member of the putative class are barred, in whole or in part, by ERISA § 404(c), 29 U.S.C.
§ 1104(c).” Section 404(c) provides a defense to a breach of fiduciary duty claim if the loss
caused by the breach resulted from a participant’s exercise of control. See In re Schering Plough
Corp. ERISA Litigation, 589 F.3d 585, 603-04 (3d Cir. 2009). The provision states:
(c) Control over assets by participant or beneficiary
(1)(A) In the case of a pension plan which provides for individual accounts and
permits a participant or beneficiary to exercise control over the assets in his
account, if a participant or beneficiary exercises control over the assets in his
1
In addition to moving to strike defendants’ affirmative defenses, plaintiffs also move
to strike a “reservation of rights” paragraph found at the conclusion of defendants’
affirmative defenses. Defendants do not address this argument in their opposition to the
motion and the court construes that silence as a concession that the paragraph is
inappropriate. See, e.g., Abayneh v. Zuelch, 2011 WL 572407, at *2 (N.D. Ind. Feb. 14,
2011) (striking alleged affirmative defense that attempted to reserve all rights to raise
additional affirmative defenses; defendants not permitted to “get around” scheduling
deadlines by reserving all rights to raise affirmative defenses “at any time they deem it
convenient”). That paragraph, then, is stricken from defendants’ Answer and to the extent
defendants wish to pursue an affirmative defense not specifically pleaded, they may seek
leave to amend their answer.
2
account (as determined under regulations of the Secretary)—
(i) such participant or beneficiary shall not be deemed to be a
fiduciary by reason of such exercise, and
(ii) no person who is otherwise a fiduciary shall be liable under this
part for any loss, or by reason of any breach, which results from
such participant's or beneficiary's exercise of control, except that
this clause shall not apply in connection with such participant or
beneficiary for any blackout period during which the ability of such
participant or beneficiary to direct the investment of the assets in his
or her account is suspended by a plan sponsor or fiduciary.
29 U.S.C. § 1104(c). According to defendants, section 404(c) provides a complete defense to
plaintiffs’ claims because “any losses were due to participants’ own investment decisions.”
Plaintiffs move to strike the defense (to the extent it is intended to apply to plaintiffs’
prudence claims) on the grounds that the defense is legally insufficient in that a majority of
courts have held that the safe harbor of section 404(c) is not available in connection with claims
challenging the selection of plan investment options and the decision to continue offering a
particular investment. See Howell v. Motorola, Inc., 633 F.3d 552, 568 (7th Cir. 2011) (agreeing
with Secretary of Labor’s amicus curiae brief that the “selection of plan investment options and
the decision to continue offering a particular investment vehicle are acts to which fiduciary
duties attach, and that the safe harbor is not available for such acts.”); DiFelice v. U.S. Airways,
Inc., 497 F.3d 410, 418 n.3 (4th Cir. 2007) (safe harbor does not apply to a fiduciary’s decisions
to select and maintain certain investment options within a participant-driven 401(k) plan). As
explained by the Seventh Circuit in Howell:
The purpose of section 404(c) is to relieve the fiduciary of responsibility for
choices made by someone beyond its control; that is, the participant (or
3
beneficiary—we mean to include both in this discussion). If an individual account
is self-directed, then it would make no sense to blame the fiduciary for the
participant's decision to invest 40% of her assets in Fund A and 60% in Fund B,
rather than splitting assets somehow among four different funds, emphasizing A
rather than B, or taking any other decision. In short, the statute ensures that the
fiduciary will not be held responsible for decisions over which it had no control.
See Mertens v. Hewitt Assocs., 508 U.S. 248, 262 (1993) (remarking that
provisions of ERISA “allocate [ ] liability for plan-related misdeeds in reasonable
proportion to respective actors’ power to control and prevent the misdeeds”). The
language used throughout section 404(c) thus creates a safe harbor only with
respect to decisions that the participant can make. The choice of which
investments will be presented in the menu that the plan sponsor adopts is not
within the participant’s power. It is instead a core decision relating to the
administration of the plan and the benefits that will be offered to participants.
633 F.3d at 567. As noted by the Seventh Circuit, its conclusion is consistent with the
Department of Labor’s implementing regulations, which state that “fiduciaries may not be held
liable for any loss or fiduciary breach ‘that is the direct and necessary result of that participant’s
or beneficiary’s exercise of control.’” See id. (quoting 29 C.F.R.§ 2550.404c-1(d)(2)(i)).2
In response, defendants attempt to downplay the significance of Howell by arguing that
the opinion with respect to the applicability of section 404(c) is mere dicta and that, in any event,
it extends only to the “selection” of investment options–a specific claim not alleged here because
the selection of YRCW stock occurred in the 1970s, long before the class period and well
outside the ERISA limitations period. The court rejects both arguments. The Seventh Circuit
2
In a footnote to the preamble to these regulations, the DOL specifically states that the
“act of limiting or designating investment options which are intended to constitute all or part
of the investment universe of an ERISA § 404(c) plan is a fiduciary function which, whether
achieved through fiduciary designation or express plan language, is not a direct or necessary
result of any participant’s direction of such plan.” Final Regulations Regarding Particular
Directed Individual Account Plans (ERISA § 404(c) plans), 57 Fed.Reg. 46906, 46924-225,
n. 27 (General Preamble, n.27).
4
itself has indicated that the section 404(c) analysis in Howell was, in fact, not dicta. See Spano
v. The Boeing Co., 633 F.3d 574, 590 (7th Cir. 2011) (“In Hecker, we left open the question
whether a plan could ever be liable for the selection of investment options in a
defined-contribution plan. In the related cases we are deciding today, Howell v. Motorola, Inc.,
we conclude that the answer is yes.”) (citations omitted).3 Moreover, the Howell opinion is in
no way limited to the “selection” of investment options. The opinion expressly references the
decision “to continue offering a particular investment vehicle”–allegations which are clearly
encompassed in the Amended Complaint–and the rationale offered by the Seventh Circuit clearly
applies to decisions from the initial selection decision to other decisions relating to the
investment menu offered under the Plan.
Defendants also contend that Howell conflicts with the Third Circuit’s decision in In re
Unisys Savings Plan Litigation, 74 F.3d 420, 445 (3d Cir. 1996) and the Fifth Circuit’s decision
in Langbecker v. Electronic Data Systems Corp., 476 F.3d 299, 309-13 (5th Cir. 2007), such
that, at a minimum, the court should not strike the section 404(c) defense at this juncture. The
court disagrees. The Third Circuit’s decision is not persuasive to the court because the panel,
in concluding that a fiduciary may invoke section 404(c) even where it has allegedly selected
an inappropriate investment for the plan, expressly did not apply the Department of Labor’s
regulations implementing section 404(c) because the regulations were not in effect when the
transactions at issue in the case occurred. See 74 F.3d at 444 n.21; Langbecker, 476 F.3d at 322
3
Even if the Seventh Circuit’s Howell opinion on the safe harbor issue is deemed
dicta, it is no less persuasive to this court.
5
(“Unisys and subsequent opinions that rely on it should not be considered controlling,
particularly in light of the DOL’s consistent contrary interpretation.”) (J. Reavley, dissenting);
In re Tyco Int’l Ltd. Multidistrict Litigation, 606 F. Supp. 2d 166, 168 n.2 (D.N.H. 2009) (noting
that In re Unisys was “not relevant” to whether section 404(c) applied to prudence claims
because that decision did not consider the DOL regulations); but see Renfor v. Unisys Corp.,
2010 WL 1688540, at *8 (E.D. Pa. Apr. 26, 2010) (applying the holding of In re Unisys and
granting defendants section 404(c) protection from claim challenging investment selection
decisions because In re Unisys was based on the plain language of the statute such that
regulations were not entitled to Chevron deference in any event).
The court is similarly not persuaded by Langbecker, in which a divided panel concluded
that a section 404(c) defense applies to a “fiduciary’s inclusion of ‘bad’ stocks into the pot.” 476
F.3d at 310-12. In so concluding, the Fifth Circuit declined to give effect to the DOL’s
interpretation of its own regulations. See id. In his dissent, however, Judge Reavley expressed
his belief “imprudent designation of an option for participants to choose constitutes grounds for
fiduciary liability, and falls outside the scope of participant control envisaged by § 404(c).” Id.
at 319. According to Judge Reavley, the DOL’s interpretation of its regulations was reasonable
(including the footnote in the preamble of the regulations) and entitled to Chevron deference,
particularly as the statute itself expressly delegates to the agency “the task of promulgating
regulations governing when a participant will be viewed as having exercised independent control
over the assets in his or her account for purposes of § 404(c) relief from fiduciary liability.” Id.
at 320. As explained by Judge Reavley:
6
Section 404(c) need not be read to shield fiduciaries from liability for including
an imprudent investment option on the investment menu in a self-directed plan.
By allowing plans to limit their universe of investment choices and still be
considered 404(c) plans, the DOL left participants and their beneficiaries at the
mercy of the wisdom of whoever made these limiting choices. There should be
some assurance that these limited investment choices will be prudently selected.
If no duty of prudence attaches to selection of investment options, plan fiduciaries
could imprudently select a full menu of unsound investments, among which
participants would be free to choose at their peril, while the fiduciaries remain
insulated from responsibility. The DOL was within its delegated authority in
deciding not to offer relief for the decision to offer a plan investment option.
Id. at 320-21. Judge Reavley then highlighted the many district courts and commentators who
had all recognized that a plan “fiduciary retains the duty to prudently select and monitor
investment options such that § 404(c) does not provide an absolute defense to breach claims.”
Id. at 321-22.
Ultimately, the court believes that the Tenth Circuit, if faced with the issue, would
conclude that “although section 404(c) does limit a fiduciary’s liability for losses that occur
when participants make poor choices from a satisfactory menu of options, it does not insulate
a fiduciary from liability for assembling an imprudent menu in the first instance.” DiFelice, 497
F.3d at 418 n.3. This conclusion is supported by the underlying purpose of section 404(c) as
explained by the Seventh Circuit in Howell and is appropriate in light of the deference afforded
to the DOL’s reasonable interpretation of its own regulations. The court, then, strikes
defendants’ section 404(c) defense to the extent that defense is aimed at plaintiffs’ prudence
claims.4
4
Defendants suggest in their response that the defense applies with full force to
plaintiffs’ monitoring claims, for example. That issue is not before the court.
7
Causation Defenses (Affirmative Defenses 4 and 5)
Plaintiffs move to strike defendants’ fourth and fifth affirmative defenses on the grounds
that they are not affirmative defenses at all but mere denials of plaintiffs’ claims. Defendants’
fourth and fifth affirmative defenses state as follows:
Plaintiffs and each member of the putative class have proximately caused,
contributed to, or failed to mitigate any and all losses claimed by them and, as
such, Defendants did not cause “any losses to the Plan” under ERISA § 409(a), 29
U.S.C. § 1109(a).
****
Any losses alleged by Plaintiff and each member of the putative class were
not caused by any fault, act or omission by Defendants, but were caused by
circumstances, entities or persons, including Plaintiff and each member of the
putative class, for which Defendants are not responsible and cannot be held liable.
Defendants concede that the issues raised in their fourth and fifth affirmative defenses are not
true affirmative defenses because plaintiffs bear the burden of proof on causation. See United
States v. Portillo-Madrid, 2008 WL 4183915, at *1 n.1 (10th Cir. Sept. 12, 2008) (An
affirmative defense is defined as: “A defendant’s assertion of facts and arguments that, if true,
will defeat the plaintiff’s . . . claim, even if all the allegations in the complaint are true.”).
Nonetheless, defendants assert that these defenses serve the purpose of providing notice to
plaintiffs that defendants intend to assert lack of causation as a means of avoiding liability on
plaintiffs’ claims.
Courts faced with asserted causation “defenses” in the ERISA context have decided this
issue both ways. Compare Dann v. Lincoln Nat. Corp., ___ F. Supp. 2d ___, 2011 WL 487207,
8
at *3 (E.D. Pa. Feb. 10, 2011) (denying motion to strike similar causation defenses because such
defenses went “to the heart of a requisite element for Dann’s claims”) with In re Merck & Co.,
Inc. Vytorin ERISA Litigation, 2010 WL 2557564, at *3 & n.3 (D.N.J. June 23, 2010) (granting
motion to strike affirmative defense denying causation because assertions were mere denials
rather than affirmative defenses, though recognizing that the court could permit the defenses to
stand and simply treat the defenses as specific denials). In the end, the court here concludes that
it is appropriate to strike these defenses because defendants concede that they are not properly
construed as affirmative defenses. However, as the court noted in Dann, the practical effect of
striking the causation defenses appears to be nonexistent, as even plaintiffs’ brief reflects an
understanding that defendants will be allowed to obtain appropriate discovery on the issue of
causation. Dann, ___ F. Supp. 2d at ___; 2011 WL 487207, at *3 n.4 (regardless of whether
court struck affirmative defenses, defendants would be allowed to obtain discovery on causation)
(citation omitted). These defenses, then, are stricken.5
5
The court acknowledges that defendants’ fourth affirmative defense utilizes the
phrase “failure to mitigate” and that such language is typically viewed as an affirmative
defense. The court strikes the defense in its entirety in any event. First, defendants have not
mentioned the “failure to mitigate” aspect of their fourth affirmative defense in their papers
and, thus, do not suggest that this portion of the defense should survive a motion to strike.
Second, it appears that any “failure to mitigate” defense asserted in this action could not be a
traditional mitigation-of-damages defense. Because plaintiffs are bringing claims on behalf
of the Plan for losses to the Plan (such that plaintiffs’ own losses are not at issue), any
traditional theory that plaintiffs’ failed to mitigate their own losses appears to miss the mark.
See In re State Street Bank & Trust Co. Fixed Income Funds Investment Litigation, ___ F.
Supp. 2d ___, 2011 WL 1105687, at *16-17 (S.D.N.Y. Mar. 28, 2011). Nonetheless, if
defendants believe in good faith that they may properly assert a mitigation defense (either in
the traditional sense or under some other theory) in the specific context of this case, they may
seek leave to amend their Answer.
9
Plaintiffs as Fiduciaries (Affirmative Defense 2)
In their second affirmative defense, defendants assert that “[t]o the extent the defense
provided by ERISA § 404(c), 29 U.S.C. § 1104(c) does not apply, Plaintiffs and each member
of the putative class acted as fiduciaries when they directed the investment of funds allocated
to their account(s) and are therefore liable for any claimed losses.” Plaintiffs move to strike this
affirmative defense on the grounds that plan participants and beneficiaries, as a matter of law,
cannot be deemed fiduciaries when they exercise control over assets in their accounts. In
response, defendants categorize this defense as simply another “causation” defense along with
affirmative defenses 4 and 5 in the sense that each of these defenses contends that any losses
suffered are a result of plan participants’ own investment decisions. Defendants, then, do not
specifically address the argument made by plaintiffs concerning the second affirmative defense,
but rather concede that the “causation defenses” are not truly affirmative defenses but serve the
purpose of providing notice to plaintiffs that defendants intend to assert lack of causation as a
means of avoiding liability on plaintiffs’ claims.
The court, then, declines at this juncture to address the merits of plaintiffs’ argument that
plan participants and beneficiaries cannot be deemed fiduciaries in the context of this case and
simply strikes the second affirmative defense on the grounds that defendants concede that it is
not a true affirmative defense. As noted above, the court’s decision to strike this defense has no
bearing on whether defendants are entitled to pursue discovery on causation issues.
The Releases Signed by Plaintiffs (Affirmative Defense 3)
10
For their third affirmative defense, defendants state that “Plaintiffs’ claims are barred by
the releases and waivers they signed upon terminating their employment with YRCW or its
affiliate.” Plaintiffs move to strike this affirmative defense on the grounds that the court has
already rejected the defense on the merits. Specifically, in denying defendants’ motion for
summary judgment, the court concluded that the releases and waivers signed by plaintiffs did
not bar plaintiffs’ claims in this lawsuit because plaintiffs released only individual claims and
thus the releases did not affect the claims asserted here–claims brought on behalf of the Plan.
Defendants concede that the court has rejected their argument, but contend that the
“interlocutory nature of the summary judgment order, the evolving law in this area, and the lack
of prejudice to Plaintiffs” weigh in favor of permitting the defense to stand.
The court disagrees with defendant. The court does not intend to reconsider its summary
judgment order sua sponte and while defendants suggest in their February 25, 2011 brief that
they “are preparing to file a motion” for reconsideration based on a Seventh Circuit opinion filed
earlier this year, no such motion has been filed in the seven weeks since that the filing of
defendants’ brief. Moreover, in denying defendants’ motion for summary judgment on the
release issue, the court did not consider disputed facts in the light most favorable to plaintiff such
that further discovery might shed additional light on the release issue. Rather, the court
concluded as a matter of law, based on the undisputed facts, that the releases simply did not bar
plaintiffs’ claims in this lawsuit. And defendants do not suggest that further discovery might
change the court’s outcome on the release issue. Thus, because the court has already squarely
addressed and rejected defendants’ argument concerning the releases, this affirmative defense
11
is appropriately stricken. Prakash v. Pulsent Corp. Employee Long Term Disability Plan, 2008
WL 3905445, at *2 (N.D. Cal. Aug. 20, 2008) (striking affirmative defense as legally
insufficient where court had previously rejected exact argument in ruling on motion to dismiss);
Modern Creative Servs., Inc. v. Dell Inc., 2008 WL 305747, at *3-4 (D.N.J. Jan. 28, 2008)
(striking affirmative defenses where court had already addressed and rejected same arguments
in context of motion to dismiss).
ERISA and Federal Securities Laws (Affirmative Defenses 6 and 8)
Defendants’ sixth and eighth affirmative defenses concern the relationship between
ERISA and the federal securities laws. For their sixth affirmative defense, defendants state that
“ERISA § 514(d), 29 U.S.C. § 1144(d), prohibits ERISA from being used to alter, modify, or
impair federal securities law or other federal laws.” Defendants’ eighth affirmative defense
states that “Fiduciaries are not required or permitted to violate the securities laws, or any other
law, to satisfy their fiduciary obligations.” In their motion to strike, plaintiffs urge that these
defenses are no longer relevant in light of the court’s dismissal of plaintiffs’ disclosure claims
and, in any event, defendants cannot use the federal securities laws as a shield against ERISA
liability and, accordingly, the defenses are legally insufficient. Plaintiffs further contend that the
phrase “other federal laws” in the sixth affirmative defense and the phrase “or any other law”
in the eighth affirmative defense do not satisfy the requisite pleading standards. Defendants
contend that these defenses apply to plaintiffs’ prudence claims regardless of whether those
claims contain disclosure or misrepresentation allegations and that a fiduciary cannot be required
12
to violate insider trading laws in carrying out his or her duties under ERISA. Defendants do not
respond to plaintiffs’ arguments concerning the generic references to “other federal laws.”
The court has uncovered only one case that has addressed this precise issue. In Dann v.
Lincoln National Corp., ___ F. Supp. 2d ___, 2011 WL 487207 (E.D. Pa. Feb. 10, 2011), the
plaintiff, a participant in Lincoln National’s retirement savings plan, brought a putative class
action under ERISA alleging that the defendants breached their fiduciary duties by permitting
the Plan to invest in the company’s own stock when it was not prudent to do so and by failing
to provide plan participants with accurate and complete information. Id. at *1. In their Answer,
the defendants (represented by the same law firm that represents defendants here) pleaded
various defenses, including (verbatim) the sixth and eighth defenses asserted here. Id. at *2.
The plaintiff (represented by the same counsel who are representing plaintiffs in this action)
moved to strike those defenses on the grounds that the federal securities laws “do not relieve
fiduciaries of their obligations under ERISA” and that the defenses were therefore legally
insufficient. Id. at *3. The district judge denied the motion to strike, explaining:
Dann cites to an inconclusive Third Circuit opinion, as well as to district court
cases from outside the Third Circuit. Lincoln points to other cases in other circuits
finding to the contrary. Dann’s Motion thus requires this court to determine an
unclear question of law in the absence of binding circuit precedent. This is clearly
beyond the scope of a motion to strike.
Id. (citation omitted).
Plaintiffs here direct the court to a Third Circuit case (presumably the same one deemed
“inconclusive” by the district judge in Dann) in which the Circuit affirmed the district court’s
12(b)(6) dismissal of the plaintiff’s complaint alleging ERISA violations. See Edgar v. Avaya,
13
Inc., 503 F.3d 340 (3d Cir. 2007). In connection with the district court’s dismissal of the
disclosure claims, the Third Circuit noted:
In addition, the District Court observed, had defendants decided to divest the Plans
of Avaya stock prior to April 19, 2005, based on information that was not publicly
available, they would have faced potential liability under the securities laws for
insider trading. That observation does not, as Edgar argues, mean that the federal
securities laws relieve fiduciaries of their obligations under ERISA.
Id. at 350 (citation omitted). The Circuit ultimately concluded that the fact that the defendants
“did not inform Plan participants about several adverse corporate developments prior to Avaya’s
earnings announcement does not constitute a breach of their disclosure obligations under
ERISA.” Id. at 350-51. This case, then, does not stand for the broad proposition asserted by
plaintiffs–that a “possible violation of securities laws does not relieve fiduciaries of their
obligations under ERISA.” That being said, it appears that the majority of district court cases
to have analyzed this issue–albeit not in the context of a motion to strike affirmative
defenses–have concluded that fiduciaries cannot use the securities laws as a shield to protect
against ERISA liability. See, e.g., Gee v. UnumProvident Corp., 2005 WL 534873, at *13-14
(E.D. Tenn. 2005) (collecting cases).
Nonetheless, the court declines to strike the defenses at this juncture (with the exception
of the defenses’ generic references to “other federal laws,” which are simply too conclusory to
give plaintiffs fair notice of the basis of the defense, see Sprint Communications Co. v.
Theglobe.com, Inc., 233 F.R.D. 615, 618-19 (D. Kan. 2006) in favor of further legal and factual
development concerning how these defenses might apply, if at all, in the specific context of this
case where plaintiffs have not asserted communication or disclosure claims and, more
14
specifically, the nature, extent and timing of any allegedly “insider information” available to the
fiduciaries in this case. In short, because the insufficiency of defendants’ sixth and eighth
defenses is not “clearly apparent,” the court denies plaintiffs’ motion to strike without prejudice
to refiling at an appropriate time, with the exception that the court will strike the references to
“other federal laws” and “any other law.” See 5C Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1381, at 424-28 (3d ed. 2004) (in the absence of any prejudice
to the moving party, courts are “very reluctant” to resolve disputed or substantial issues of law
or mixed questions of law and fact and the motion to strike will not be granted if the
insufficiency of the defense is not “clearly apparent”).
Affirmative Defense 7
Finally, plaintiffs move to strike defendants’ seventh affirmative defense, which states
that “Any fiduciary decisions being challenged are entitled to deference, and are subject to
review only for abuse of discretion.” According to plaintiffs, this affirmative defense is not a
defense at all, let alone an affirmative one–it is merely an evidentiary standard of review.
Defendants do not contend otherwise. They simply assert that they are taking a “cautious
approach” to notify plaintiffs that defendants intend to argue that any Plan interpretation required
by plaintiffs’ claims are rightfully first addressed with the Plan administrator and that the
administrator’s interpretation is entitled to deference. Because defendants concede that their
seventh affirmative defense is not appropriately deemed an affirmative defense, the court strikes
the seventh affirmative defense. See United States v. Portillo-Madrid, 2008 WL 4183915, at *1
15
n.1 (10th Cir. Sept. 12, 2008) (An affirmative defense is defined as: “A defendant’s assertion
of facts and arguments that, if true, will defeat the plaintiff’s . . . claim, even if all the allegations
in the complaint are true.”). This ruling, of course, does not preclude defendants from arguing
to the court, if and when appropriate, that deference must be given to the administrator’s
interpretation of the Plan.
IT IS THEREFORE ORDERED BY THE COURT THAT plaintiffs’ motion to strike
defendants’ affirmative defenses (doc. 145) is granted in part and denied in part.
IT IS SO ORDERED.
Dated this 15th day of April, 2011, at Kansas City, Kansas.
s/ John W. Lungstrum_________
John W. Lungstrum
United States District Judge
16
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?