Fairmont Insurance Brokers Ltd. v. HR Service Group d/b/a Infiniti HR

Filing 16

MEMORANDUM & ORDER, Infiniti's motion to dismiss is DENIED, Fairmont's request for oral argument is DENIED as moot, and this case is REMANDED to the Kings County Supreme Court. So Ordered by Judge Nicholas G. Garaufis on 11/21/2024. (TLH)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
FAIRMONT INSURANCE BROKERS LTD.,
Plaintiff,

MEMORANDUM & ORDER
23-CV-8654 (NGG) (LB)

-againstHR SERVICE GROUP D/B/A INFINITI HR,
Defendant.
NICHOLAS G. GARAUFIS, United States District Judge.
Plaintiff Fairmont Insurance Brokers Ltd. ("Fairmont'') sued Defendant HR Service Group d/b/ a Infiniti HR ("Infiniti") in the
Supreme Court of the State of New York, Kings County, alleging
breach of contract and other common law claims arising out of
Infiniti's alleged breach of its agreement to "manage and administer" the health insurance benefits for Fairmont's employees.
(Complaint ("Comp!.") (Dkt. 1-1) '! 12.) Infiniti timely removed
the action to the United States District Court for the Eastern District of New York, invoking the court's federal question
jurisdiction. (Notice of Removal (Dkt. 1) at 'l 4.) Infiniti now
moves to dismiss the Complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6), on the ground that Fairmont's claims are
completely preempted by the Employee Retirement Income Security Act of 1974 ("ERISA''). (Defendant's Motion to Dismiss
("Def.'s Mot.'') (Dkt. 12-2) at 1-2.) Fairmont opposes the motion.
(Plaintiffs Memorandum of Law in Opposition ("Pl.'s Opp.")
(Dkt. 13) .) For the reasons that follow, Infiniti's motion is DENIED, Fairmont's request for oral argument is DENIED as moot,
and this case is REMANDED to state court.

1

I.

BACKGROUND 1

On November 30, 2021, Fairmont and Infiniti entered into a "Client Service Agreement" (the "Contract") pursuant to which
Infiniti agreed "to provide professional employment services and
to enter into a co-employment or shared employment relationship with regard to [Fairmont's employees]." (Contract (0kt. 121) at ECF 4.) As defined by the Contract, "co-employment is a
relationship where Infiniti HR and [Fairmont] simultaneously
employ and share certain responsibilities for managing assigned
employees." (Id.)
One of those responsibilities includes an agreement by Infiniti to
"manage and administer" health insurance benefits for Fairmont's employees. (Compl. '!'I 6, 8, 11-12.) Specifically, Section
1 (D) of the Contract provides, in pertinent part:
Infiniti HR will manage and administer group supplemental benefit plans covering Assigned Employees,
including all benefit claims, record keeping and compliance. [Fairmont] hereby authorizes Infiniti HR to collect
insurance premiums for benefit plans from the Employees and remit them to the applicable insurance
carrier(s). Infiniti HR shall make timely payments for all
of its obligations under such benefit programs.
In accordance with its obligations under the Contract, Infiniti
contracted with NuAxess 2, Inc. ("NuAxess") to provide a health
insurance plan (the "Plan") for Fairmont's employees. (Compl. 'I
8; Insurance Plan (0kt. 12-1) at ECF 14-91.)

1 The following facts are drawn from the Complaint and, for purposes of

this motion to dismiss, are assumed to be true. See Ark. Pub. Emps. Ret. Sys.
v. Bristol-Myers Squibb Co., 28 F.4th 343, 349 (2d Cir. 2022).

2

Eventually, Fairmont's employees informed Fairmont that their
healthcare providers were declining treatment, citing non-payment by NuAxess as the reason for their refusal. (Id. at 'l 9 .)
Fairmont discovered that NuAxess had stopped paying
healthcare professionals, causing the medical bills of employees
to remain unpaid and accruing interest. (Id. at'] 10.)
Fairmont filed the instant Complaint against Infiniti in Kings
County Supreme Court on October 23, 2023, alleging: (Count I)
breach of contract; (Count II) breach of fiduciary duties; (Count
III) negligence; and seeking (Count IV) a declaratory judgment.
(Id. 'l'l 20-38.) Specifically, Count I alleges that Infiniti breached
the Contract when it failed to "manage and administer health insurance benefits" for Fairmont's employees; Count II alleges that
Infiniti breached its fiduciary duty "as clearly articulated in the
Contract'' when it "fail[ed] to ensure that the [e]mployees received the healthcare services they were entitled to under the
Contract"; Count III alleges that Infiniti acted negligently when
it "fail [ed] to provide the necessary oversight and management .
. . [and] ensure the timely processing and payment of medical
claims"; and Count N seeks a declaratory judgment that:
[Infiniti] must cover, indemnify, and provide compensation to [Fairmont's employees] for all costs and losses
resulting from [Infiniti's] breach of the Contract, breach
of fiduciary duty, and/or negligence, including but not
limited to medical bills, interest accrued on unpaid medical bills, and any other related financial and nonfinancial losses incurred by the [e]mployees as a direct
result of [Infiniti's] negligence and breaches.
[The court] affirm the rights of the [e]mployees to receive the healthcare benefits and services that they were
contractually entitled to under the Contract.
(Id. at 'l'l 20-21, 25-26, 30-31, 35-36.)

3

According to the Complaint, the Contract requires Infiniti to
"maintain and administer'' health insurance benefits for Fairmont's employees, and "once NuAxess stopped paying the
medical professionals, [Infiniti] had a duty to provide additional
coverage offerings." (Id. '111.) In other words, "it was incumbent
upon [Infiniti], under the Contract, to ensure that health care
services for the [e]mployees were provided without interruption,
and to promptly address any issues that arose in the course of
fulfilling these obligations." (Id. 'I 15.) This included rectifying
"any financial burdens, expenses, or losses incurred by the
[e]mployees due to the disruption of their medical benefits." (Id.
'116.)
Infiniti timely removed the action to this court on the basis of
federal question jurisdiction, asserting that Fairmont's "action
arises under and is preempted by§ 502(a) of [ERISA]." (Notice
of Removal at 'I 4.) Specifically, Infiniti argued that Fairmont
"was a participating employer in, and, thus, a fiduciary of," an
ERISA-govemed multiemployer plan, and, as a matter of law,
"[Fairmont's] claims in Counts II, III, and N arise under [and are]
completely preempted by" ERISA Section 502(a). (Id. at 'l'l 5-6.)
However, Infiniti stated that the court "should exercise supplemental jurisdiction over [Fairmont's] claim in Count I of the
Verified Complaint, which does not arise under the laws of the
United States." (Id. '111.)
Before the Court is Infiniti's March 15, 2024 motion to dismiss
the Complaint in its entirety2 pursuant to Federal Rule of Civil
Procedure 12(b) (6), on the ground that "ERISA preempt[s] all of
Fairmont's state law claims." (Def.'s Mot. at 4.)
2 Infiniti has apparently retreated from its initial argument, raised in its

Notice of Removal, that ERISA completely preempts only Counts II, III, and
IV of the Complaint. (Notice of Removal at 'l'l 6, 11.) Jnfiniti now asserts
that all four counts of the Complaint are completely preempted by ERISA.
(Def.'s Mot. at 1-2.)

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II. LEGAL STANDARD

To survive a motion to dismiss under Rule 12(b) (6), "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) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544,570 (2007)). 3 "A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged." Id. A complaint must contain facts that do more
than present a "sheer possibility that a defendant has acted unlawfully." Id. "Dismissal under Rule 12(b)(6) is therefore
appropriate only if it is clear from the face of the complaint ...
that the plaintiffs claims are barred as a matter of law." Michael
Grecco Prods., Inc. v. RADesign, Inc., 112 F.4th 144, 150 (2d Cir.
2024).
In deciding a motion to dismiss, the court accepts as true all factual allegations contained in the complaint and draws all
reasonable inferences in the plaintiffs favor. Lynch v. City of New
York, 952 F.3d 67, 74-75 (2d Cir. 2020). In addition to the complaint, the court may consider "documents that are attached to
the complaint, incorporated in it by reference, integral to the
complaint, or the proper subject of judicial notice." United States
v. Strock, 982 F.3d 51, 63 (2d Cir. 2020). ''[W]here the complaint
relies heavily upon [a document's] terms and effect," such as a
contract, it is considered "integral" to the complaint. Chambers v.
Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). Although
the court is "not constrained to accept the allegations of the complaint in respect of the construction of the [contract]," "any
contractual ambiguities" should be resolved in favor of the plaintiff. See Int'lAudiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d

When quoting cases, unless otherwise noted, all citations and internal
quotation marks are omitted, and all alterations are adopted.

3

5

69, 72 (2d Cir. 1995). In the instant case, because the Contract
and Plan documents are either incorporated by reference in the
Complaint or are integral to the Complaint, the court considers
those documents in adjudicating Infiniti's motion to dismiss.
III. DISCUSSION

Infiniti moves to dismiss the Complaint on the grounds that
"ERISA preempt[s) all of Fairmont's state law claims" and
"ERISA's exclusive remedies do not provide a vehicle for Fairmont to obtain the relief it seeks." (Def.'s Mot. at 4.) Specifically,
Infiniti argues that the Plan is an "employee welfare benefit plan"
governed by ERISA, that Fairmont's claims "relate to" the Plan,
and that ERISA therefore preempts Fairmont's state law claims.
(Id. at 5-6.) At the same time, Infiniti asserts that Fairmont "legally cannot replead its claims under ERISA.'' (Id. at 4.) Instead,
"Fairmont's employees' right to seek relief is the sole appropriate
course of action." (Def.'s Reply (Dkt. 14) at 8.) Thus, Infiniti argues, the court should not only dismiss Fairmont's Complaint,
but should do so with prejudice because Fairmont cannot replead
its state law claims under ERISA. (Def.'s Mot. at 4.)
Fairmont opposes the motion, asserting, inter alia, that its claims
"do not derive from the rights and obligations" established by the
Plan, but rather, derive from Infiniti's separate promise under the
Contract "to provide continuous medical coverage and timely
payments on behalf of [Fairmont's] employees." (Pl.'s Opp. at 8.)
Thus, Fairmont argues, its claims do not "relate to" any employee
benefit plan and are therefore not preempted by ERISA. (Id. at 89 .) Fairmont additionally argues that preemption would leave it
without a remedy as to Infiniti's alleged breach of the Contract,
a result it contends would be contrary to "the statutory purpose
ofERISA.'' (Id. at 10-11.)

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A.

Applicable Law

The court has an independent obligation to assure itself of its
own jurisdiction. Arnold v. Lucks, 392 F.3d 512, 517 (2d Cir.
2004). "A civil claim filed in state court can only be removed to
federal court if the district court would have had original jurisdiction to hear the claim." Montefiore Med. Ctr. v. Teamsters Local
272,642 F.3d 321,327 (2d Cir. 2011); 28 U.S.C. § 144l(a). Federal courts have original jurisdiction over cases "arising under the
Constitution, laws, or treaties of the United States." 28 U.S.C. §
1331 (also known as "federal question" jurisdiction). Typically, a
cause of action "arises under" federal law only "when the plaintiffs well-pleaded complaint raises issues of federal law." Metro.
Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). This means that
federal preemption, raised as a defense to the plaintiffs suit,
"does not appear on the face of a well-pleaded complaint, and,
therefore, does not authorize removal to federal court." Id.
Express preemption "is one of the three familiar forms of ordinary defensive preemption (along with conflict and field
preemption)." Wurtzv. Rawlings Co., LLC, 761 F.3d 232,238 (2d
Cir. 2014). It occurs "when Congress withdraws specified powers
from the States by enacting a statute containing an express
preemption provision." Id. "As an ordinary defensive preemption
claim, express preemption cannot support federal jurisdiction because it would not appear on the face of a well-pleaded
complaint." Id.
However, the Supreme Court has recognized an exception to the
well-pleaded complaint rule-the "complete preemption" doctrine-under which Congress "may so completely pre-empt a
particular area [of law] that any civil complaint raising this select
group of claims is necessarily federal in character." Metro. Life,
481 U.S. at 63-64. In other words, "certain federal statutes have
such extraordinary preemptive force that state-law claims coming within the scope of the federal statute are transformed, for

7

jurisdictional purposes, into federal claims-i.e., completely
preempted." Sullivan v. Am. Airlines, Inc., 424 F.3d 267, 272 (2d
Cir. 2005). The Supreme Court has found only three statutes to
contain a complete preemption provision: Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, see Avco Corp.
v. Aero Lodge No. 735,390 U.S. 557, 558-62 (1968); Sections 85
and 86 of the National Bank Act, 12 U.S.C. §§ 85-86, see Beneficial
Nat'l Bank v. Anderson, 539 U.S. 1, 7-11 (2003); and Section
502(a) of ERISA, 29 U.S.C. § l 132(a), see Metro. Life, 481 U.S.
at 65-66. "When a plaintiff raises such a completely preempted
state-law claim in his complaint, a court is obligated to construe
the complaint as raising a federal claim and therefore 'arising under' federal law." Sullivan, 424 F.3d at 272.
"ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit
plans." Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137
(1990). The statute sets various uniform standards governing
"employee benefit plans," which it defines as plans that are either
"an employee welfare benefit plan," or "an employee pension
benefit plan," or both. 29 U.S.C. § 1002(3). An employee welfare
benefit plan includes "any plan, fund, or program ... established
or maintained by an employer ... for the purpose of providing
[medical care or benefits] for its participants or their beneficiaries." Id. § 1002(1).
"The purpose of ERISA is to provide a uniform regulatory regime
over employee benefit plans." Aetna Health Inc. v. Davila, 542
U.S. 200, 208 (2004). To that end, "ERISA provides for two types
of preemption: complete preemption under Section 502; and express preemption under Section 514." Rubin v. Hodes, No. 18-CV7403 (SJF) (AKT), 2020 WL 132352, at *7 (S.D.N.Y. Jan. 13,
2020); see generally Wurtz, 761 F.3d at 238.

8

Section 514 provides that ERISA "shall supersede any and all
State laws4 insofar as they may now or hereafter relate to any
employee benefit plan." 29 U.S.C. § 1144(a). This is ERISA's express preemption provision: it displaces any state laws that
"relate to" employee benefit plans with "the federal common law
of ERISA." Trustees of New York State Nurses Ass'n Pension Plan v.
White Oak Glob. Advisors, LLC, 102 F.4th 572, 598-600 (2d Cir.
2024); id. at 598 (discussing the various tests adopted by the Supreme Court to determine when a state law "relates to" an
employee benefit plan); see also id. at 600 (noting that "ERISA
express preemption, and its displacement of state contract law
with federal common law, does not create 'arising under' jurisdiction").
Section 502(a) ofERISA provides plan participants, beneficiaries,
fiduciaries, employers, and certain other persons with specified
civil remedies to, among other things, recover benefits due under
their employee benefit plans, enforce rights under their plans, or
seek other plan-related relief authorized under that section. See
29 U.S.C. § 1132(a). This is ERISA's complete preemption provision: according to the Supreme Court, "any state-law cause of
action that duplicates, supplements, or supplants the ERISA civil
enforcement remed[ies] [contained in Section 502(a)] conflicts
with the clear congressional intent to make the ERISA remedy
exclusive and is [completely] pre-empted." Davila, 542 U.S. at
209. Section 502(a) is "one of those provisions with such extraordinary pre-emptive power that it converts an ordinary state
common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Id. In other words,
"causes of action within the scope of the civil enforcement provisions of§ 502(a) are removable to federal court." Id.

4 "State law'' includes "all laws, decisions, rules, regulations, or other State

action having the effect oflaw, of any State." 29 U.S.C. § 1144(c)(l).

9

The Supreme Court defined the contours of ERISA complete
preemption in Davila. There, participants in and beneficiaries of
separate employee benefit plans sued their respective plan administrators under state law, in state court, alleging injuries
arising out of the administrators' decision not to provide coverage for treatment recommended by their physicians. Davila, 542
U.S. at 204-05. The question before the Court was whether
ERISA completely preempted the state law claims. Id. at 204.
The Court noted that Section 502(a)'s enforcement mechanism
is "a distinctive feature of ERISA, and essential to accomplish
Congress' purpose of creating a comprehensive statute for the
regulation of employee benefit plans." Id. at 208. The civil enforcement provisions found in Section 502(a) "provide strong
evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly." Id. at 209
(emphasis in original). In other words, the enforcement provisions listed in Section 502(a) are the exclusive remedy for rights
guaranteed by ERISA, and any state law cause of action that duplicates, supplements, or supplants those enforcement provisions
is completely preempted. Davila, 542 U.S. at 209.
The Court then assessed one of the Section 502(a) civil enforcement provisions, Section 502(a) (1) (B). That subsection
provides:
A civil action may be brought-Cl) by a participant or
beneficiary- ... (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future benefits under the terms of the plan.
29 U.S.C. § 1132(a)(l)(B). Applying that provision and the
preemption principles discussed above, the Court concluded that
if "an individual, at some point in time, could have brought his
claim under ERISA § 502(a) (1) (B) ," and "there is no other independent legal duty that is implicated by a defendant's actions,"

10

then the individual's cause of action is completely preempted by
ERISA § 502(a)(l)(B). Davila, 542 U.S. at 210. Thus, because
the petitioners could have sought reimbursement for the denial
of their benefits pursuant to Section 502(a)(l)(B), and because
the complained-of actions did not violate legal duties independent of ERISA or the terms of the employee benefit plans at issue,
the Court held that ERISA completely preempted their state law
claims. Id. at 210-12.
Although Davila framed the two-part test in terms of Section
502(a) (1) (B), the Second Circuit has applied the test to Section
502(a) more broadly. See White Oak, 102 F.4th at 605-06 (concluding that ERISA completely preempted trustees' petition
because their claims were cognizable under ERISA § 502(a)(3)).
Thus, under Davila, "[a] claim falls within the scope of the ERISA
civil enforcement mechanism [and is completely preempted] if it
is brought (1) by an individual who, at some point in time, could
have brought [their] claim under ERISA § 502(a), and (2) there
is no other independent legal duty that is implicated by a defendant's actions." Id. at 606. The first Davila prong is satisfied if the
plaintiff (a) "is the type of party who can bring a claim pursuant
to § 502(a) [] of ERISA; and (b) the actual claim asserted can be
construed as a colorable claim ... pursuant to§ 502(a) [] ." Arditi
v. Lighthouse Intern., 676 F.3d 294,299 (2d Cir. 2012); see White
Oak, 102 F.4th at 606. The Davila test "is conjunctive; a state-law
cause of action is [completely] preempted only if both prongs of
the test are satisfied." Teamsters Local 272, 642 F.3d at 328.
The distinction between express and complete preemption is a
critical, though sometimes overlooked, aspect of ERISA preemption. State law claims which fall outside of the scope of Section
502(a), even if preempted by Section 514(a), are governed by
the well-pleaded complaint rule and are not removable under the
complete preemption doctrine. In other words, even if a state law
claim "relates to" an ERISA plan pursuant to Section 514(a), if

11

the claim cannot be construed as a cause of action under Section
502(a), complete preemption does not apply, and removal on
that basis is improper. Wurtz, 761 F.3d at 238 (noting that "complete preemption can be the basis for federal subject-matter
jurisdiction, but express preemption cannot"); see White Oak, 102
F.4th at 600 (explaining that "ERISA express preemption, and its
displacement of state contract law with federal common law,
does not create 'arising under' jurisdiction.... for jurisdiction to
be proper, the [complaint] must state a cause of action contained
within ERISA or another federal statute"); Franchise Tax Bd. of
State of Cal. v. Constr. Laborers Vacation Tr. for S. Cal., 463 U.S.
1, 23-27 (1983) (holding that preemption under Section 514(a)
does not permit a defendant to remove a suit brought in state
court to federal court when the plaintiffs state claim does not fall
within the scope of Section 502(a)'s civil remedy provisions);
Metro. Life, 481 U.S. at 64 (stating that ERISA preemption under
§ 514(a) "without more, does not convert [a] state claim into an
action arising under federal law"); Lupo v. Human Affairs Int'/,
Inc., 28 F.3d 269, 272-73 (2d Cir. 1994) (state law professional
malpractice claim against company hired by plaintiffs employer
to provide psychotherapy services deemed outside the scope of
Section 502(a)(l)(B) and therefore not removable); Dukes v.
U.S. Healthcare, Inc., 57 F.3d 350, 353-55 (3d Cir. 1995) (discussing this dynamic in depth).
B. Discussion
The parties appear to agree that the Plan is "an employee welfare
benefit plan" covered by ERISA. (Def.'s Mot. at 5; Pl.'s Opp. at 57.) While the parties dispute whether ERISA preempts Fairmont's
state law claims, they do not separately address the questions of
express and complete preemption. (Def.'s Mot. at 5-7; Pl.'s Opp.
at 8-10.)
In a case such as this, "complete preemption [is] crucial to the
existence of federal subject-matter jurisdiction." Wurtz, 761 F.3d

12

at 239. "When the doctrine of complete preemption does not apply, but the plaintiffs state claim is arguably preempted under §
514(a), the district court, being without removal jurisdiction,
cannot resolve the dispute regarding preemption. It lacks power
to do anything other than remand to the state court where the
preemption issue can be addressed and resolved." Dukes, 57 F.3d
at 355; Wurtz, 761 F.3d at 239 (concluding that ERISA did not
completely preempt plaintiffs' claims and noting that, "in the absence of an alternative basis for subject-matter jurisdiction, it
would be inappropriate to reach the merits of the ordinary express preemption defense"); Sullivan, 424 F.3d at 277 ("Because
it follows from our holding [of no complete preemption] that the
district court lacked subject-matter jurisdiction over this case, we
have no occasion to consider the merits of [defendant's] argument that the plaintiffs' ... claims ... are subject to ordinary
preemption."). Thus, the court begins-and ends-its inquiry
with complete preemption.
1.

ERISA Complete Preemption

A state law claim falls within the scope of Section 502(a) and is
completely preempted if it is "brought (1) by an individual who,
at some point in time, could have brought [their] claim under
ERISA § 502(a), and (2) there is no other independent legal duty
that is implicated by a defendant's actions." White Oak, 102 F.4th
at 606.
The first question is whether Fairmont is an entity ''who, at some
point in time, could have brought [its] claim[s] under ERISA §
502(a)." Id. To satisfy Davila prong one, Infiniti must establish
that: (a) Fairmont is the type of party who can bring a claim pursuant to Section 502(a), and (b) the actual claims asserted by
Fairmont can be construed as a colorable claim pursuant to Section 502(a). Arditi, 676 F.3d at 299.

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Infiniti's memorandum in support of its motion does not cite
Davila, much less apply its two-part test. (See Def.'s Mot.) Fairmont's memorandum in opposition applies the Davila test as
originally articulated in that case, arguing that, because Fairmont
could not bring its claims under Section 502(a) (1) (B), its claims
are not preempted by ERISA. (See Pl.'s Opp. at 8-10.) But Fairmont does not discuss whether it could have brought its claims
under any other Section 502(a) enforcement provision. Infiniti
mentions Davila in its reply, arguing that, while Fainnont could
not bring its claims under Section 502(a) (1) (B), its employees
could. (Def.'s Reply at 1, 8.)
The analysis is further muddied by Infiniti's apparent concession
that Fairmont is not the type of entity that could have brought its
claims under Section 502(a). In its opening memorandum, Infiniti states that "ERISA's exclusive remedies do not provide a
vehicle for Fairmont to obtain the relief it seeks," urging the court
to dismiss the Complaint with prejudice because "Fairmont cannot legally replead its claims under ERISA.'' (Def.'s Mot. at 4.)
While Infiniti asserts elsewhere in its brief that Fairmont is "an
ERISA fiduciary," it does not tether that argument to Davila or
Section 502(a). (Id. at 6 (citing 29 U.S.C. § 1002(21)(A)(i)).) In
response to Fairmont's argument that Infiniti effectively conceded Davila prong one, Infiniti asserts that "while Fainnont
cannot seek relief via ERISA because it is not an employee or
beneficiary covered by the Plan, its employees can do so." (Def.'s
Reply at 8 (emphases added).) Thus, Infiniti appears to admit
that Davila prong one is not satisfied.
Evidently, there is some confusion among the parties regarding
Davila's first prong. As evidenced by the Second Circuit's decision
in White Oak, the question is not whether the plaintiff could have
brought its claims under Section 502(a)(l)(B), but whether it
could have brought its claims under any of the enforcement provisions contained within Section 502(a). White Oak, 102 F.4th at

14

606. Thus, while the parties appear to agree that Fairmont could
not bring its claims under Section 502(a) (1) (B) because it is neither a plan participant nor beneficiary, that is not the end of the
inquiry. Rather, the question is whether Fairmont could have
brought it claims under any of the civil enforcement remedies
listed in Section 502(a).
It is therefore irrelevant whether Fairmont's employees could
state a claim underSection 502(a). The question under Davila is
not whether some other individual could have brought some
other claims under ERISA Section 502(a), but whether this plaintiff could have brought these claims under Section 502(a). To the
extent the parties limit their preemption analysis to Section
502(a) (1) (B), that reflects an incomplete understanding of the
law.
Although the court might read Infiniti's papers as conceding
Davila prong one, it nevertheless proceeds to an application of
Davila and concludes that ERISA does not completely preempt
Fairmont's claims.
a.

Davila Prong One, Step One

Davila prong one, step one asks whether Fairmont is the type of
party that can bring a claim pursuant to Section 502(a). Arditi,

676 F.3d at 299. Section 502(a) provides that a civil action may
be brought by, among others, plan participants, beneficiaries, fiduciaries, employers, states, or the Secretary of Labor. See 29
U.S.C. § 1132(a). ERISA defines each of these terms.
Infiniti alleges that Fairmont is "an ERISA fiduciary insofar as it
sponsors the arrangement for the benefit of its eligible employees
and self-insures the benefits," though it provides no support for
that conclusory allegation, nor does it tether that argument to the
Davila test. (Def.'s Mot. at 6 (citing 29 U.S.C. § 1002(21) (A)(i)).)
Fairmont does not respond to Infiniti's argument, instead asserting that it could not have brought its claims under Section

15

502(a) (1) (B), which allows for suit by plan participants and beneficiaries only. (Pl.'s Opp. at 8.) Neither party addresses whether
Fairmont could have brought its claims under any other Section
502(a) enforcement provision. Nor is it this court's obligation to
craft those arguments on the parties' behalf. See Sands Harbor
Marina Corp. v. WelLs Fargo Ins. Services of Oregon, Inc., 2013 WL
5295713, at *4 (E.D.N.Y. Sept. 18, 2013) ("It is not this Court's
obligation to make a party's arguments for it or fill in the blanks
on that party's behalf."); Chui v. Am. Yuexianggui of Li LLC, 2021
WL 4482656, at *3 (E.D.N.Y. July 26, 2021) ('The Court is not
responsible for developing arguments on a party's behalf or addressing conclusory claims."). Thus, because the parties appear
to agree that Fairmont is not a plan participant or beneficiary,
the court turns to the only remaining argument relevant to Davila
prong one: whether Fairmont is an "ERISA fiduciary."
ERISA Section 1002(21) (A) provides, in relevant part:
[A] person is a fiduciary with respect to a plan to the
extent (i) [they] exercise[] any discretionary authority
or discretionary control respecting management of such
plan or exercise[] any authority or control respecting
management or disposition of its assets, ... or (iii) [they
have] any discretionary authority or discretionary responsibility in the administration of such plan.
29 U.S.C. § 1002(21) (A). ERISA defines fiduciaries "in functional
terms of control and authority over the plan." Mertens v. Hewitt
Assocs., 508 U.S. 248,262 (1993) (emphasis in original). It "does
not describe fiduciaries simply as administrators of the plan, or
managers or advisers. Instead it defines an administrator, for example, as a fiduciary only to the extent that [it acts] in such a
capacity in relation to a plan." Pegram v. Herdrich, 530 U.S. 211,
225-26 (2000) (emphasis added). Thus, an entity may be a fiduciary for ERISA purposes "because the plan documents explicitly
describe fiduciary responsibilities[,] or because that [entity]

16

functions as a fiduciary." In re Polaroid ERISA Litigation, 362 F.
Supp. 2d 461, 472 (S.D.N.Y. 2005). While an ERISA fiduciary
may wear "two hats," for example, as employer and fiduciary,
"the fiduciary with two hats [must] wear only one at a time, and
wear the fiduciary hat when making fiduciary decisions." Pegram, 530 U.S. at 225.
Here, neither the Contract nor the Plan assign fiduciary duties to
Fairmont. Section 1 (D) of the Contract, titled "Benefit Administration" provides, in pertinent part:
Infiniti HR will manage and administer group supplemental benefit plans covering Assigned Employees,
including all benefit claims, record keeping and compliance. [Fairmont] hereby authorizes Infiniti HR to collect
insurance premiums for benefit plans from the Employees and remit them to the applicable insurance
carrier(s). Infiniti HR shall make timely payments for all
of its obligations under such benefit programs. [Fairmont] shall, however be responsible for paying the
Employee's portion of any employer sponsored benefit(s) if an Employee's deduction from the wages during
any month are not sufficient to pay the Employee's portion of premiums for such benefit(s) or if [Fairmont]
fails to promptly notify Infiniti HR of the following: (i)
the Employee's termination; (ii) the Employee's election
to take leave; or (iii) the enrollment of any employer
sponsored benefit. [Fairmont] shall be responsible for
paying any difference between the insurance providers
invoice and the premium contributions collected from
[Fairmont] plus the premium contributions deducted
from the Employees.
(Contract at ECF 4.) In short, the Contract assigns to Infiniti the
responsibility to "manage and administer" employees' benefit
plans, including benefit claims, record keeping, compliance, and

17

collecting insurance premiums and remitting them to NuAxess.
(Id.) The Contract assigns to Fairmont the responsibility to pay
for certain gaps or differences in premiums and coverage, and to
pay for an employee's portion of benefits if Fairmont fails to
promptly notify Infiniti of certain changes in an employee's status. (Id.) The Contract does not empower Fairmont to exercise
any "discretionary authority or discretionary control" regarding
management of the Plan or its assets, nor does it endow Fairmont
with "discretionary authority or discretionary responsibility in
the administration" of the Plan. 29 U.S.C. § 1002(21) (A). It
simply requires that Fairmont foot the bill in certain circumstances. This is insufficient to render Fairmont an ERISA
fiduciary. See, e.g., Lauder v. First Unum Life Ins. Co., 55 F. Supp.
2d 269, 273 (S.D.N.Y. 1999) ("[A]n employer is not a fiduciary
of a benefits plan simply because it creates, sponsors or contributes to a plan."); Geller v. County Line Auto Sales, Inc., 86 F.3d
18, 21 (2d Cir. 1996) ("[T]he employer must exercise the requisite degree of control and discretion [over the plan's
administration] to be held liable as a fiduciary.").
The Plan, which appears to be a generalized, summary plan description, lists NuAxess as the sole "NAMED FIDUCIARY" of the
Plan. (Plan (Dkt. 1-2) at ECF 77.) The Plan's definition of "fiduciary'' closely tracks ERISA's definition: "A fiduciary exercises
discretionary authority or control over management of the Plan
or the disposition of its assets, renders investment advice to the
Plan[,] or has discretionary authority or responsibility in the administration of the Plan." (Id. at ECF 68.) The "named fiduciary''
may "appoint others to carry out fiduciary responsibilities,"
though there is no evidence or allegation that NuAxess has done
so. (Id. at ECF 69.) The Plan defines "employer" as "NuAxess and
participating employers." (Id. at ECF 31.) It also provides that
NuAxess is the "plan administrator" or "plan sponsor" responsible
for, among other things, "administer[ing] the Plan in accordance

18

with its terms," "interpret[ing] the Plan," and "decid [ing] disputes which may arise relative to a Covered Person's rights." (Id.
at ECF 68.)
The Plan identifies NuAxess as the sole named fiduciary and describes various fiduciary responsibilities borne exclusively by
NuAxess as the plan administrator. Notably absent from the
Plan's language is any indication that Fairmont possesses "the
requisite degree of control and discretion" over the Plan's management or administration necessary to be held liable as a
fiduciary. Geller, 86 F.3d at 21. Fairmont is not a plan trustee
with certain discretionary responsibilities, see White Oak, l 02
F.4th at 602 (concluding that petitioner-trustees "are fiduciaries
as that term is used in § 502."), nor is it an investment manager
with authority to manage the Plan's assets, Lowen v. Tower Asset
Mgmt. Inc., 829 F.2d 1209, 1218 (2d Cir. 1987) (concluding that
defendant designated as plan "investment manager'' is an ERISA
fiduciary). Thus, neither the Plan nor the Contract "explicitly [ascribe] fiduciary responsibilities" to Fairmont. In re Polaroid ERISA
Litigation, 362 F. Supp. 2d at 472.
Nor is Fairmont a de facto fiduciary, notwithstanding the terms
of the Contract and Plan. Infiniti argues that Fairmont is a fiduciary because it "sponsors the arrangement for the benefit of its
eligible employees and self-insures the benefits." (Def.'s Mot. at
6.) However, as noted above, "an employer is not a fiduciary of
a benefits plan simply because it creates, sponsors or contributes
to a plan." Lauder, 55 F. Supp. 2d at 273. Even if Fairmont sponsors the Plan and self-insures its employees' benefits by, for
example, paying for certain gaps or differences in coverage, those
responsibilities do not entail "any discretionary authority or discretionary control respecting management of" the Plan, or "any
authority or control respecting management or disposition of its
assets." Coulter v. Morgan Stanley & Co. Inc., 753 F.3d 361, 366

19

(2d Cir. 2014) (emphases added). Thus, the court concludes that
Fairmont is not a fiduciary for purposes of ERISA Section 502(a).
Although neither party addresses the issue, because it is the more
obvious argument under Davila prong one, step one, the court
considers whether Fairmont qualifies as an "employer'' within
the meaning of Section 502 (a). ERISA Section 1002 (5) provides:
The term "employer" means any person acting directly
as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; and
includes a group or association of employers acting for
an employer in such capacity.
29 U.S.C. § 1002(5). Fairmont self-identifies as an employer. (See
Comp!. If 6 (explaining that Infiniti "assumed the responsibility
of inter alia managing insurance and benefit services for Plaintiff's employees" (emphasis added)); Pl.'s Opp. at 5 (under the
Contract, "Defendant became co-employer.").) Infiniti also describes Fairmont as an employer. (See Def.'s Mot. at 6.) Thus, the
court concludes that Fairmont is an "employer" within the meaning of ERISA, and proceeds to the next step in the Davila analysis.
b.

Davila Prong One, Step Two

Davila prong one, step two asks whether the actual claims asserted by Fairmont can be construed as a colorable claim
pursuant to Section 502(a). Arditi, 676 F.3d at 299. In other
words, can Fairmont's common law claims be construed as a colarable claim for relief under those Section 502(a) remedies
available to employers?
Section 502(a) contains three enforcement provisions available
to "employers": Section 502(a)(8), Section 502(a)(10), and Section 502(a)(ll). See 29 U.S.C. § 1132(8), (10), (11). The court
concludes that Fairmont's claims for breach of contract, breach

20

of fiduciary duties, negligence, and a declaratory judgment cannot be construed as a colorable claim for relief under any of these
subsections.
Section 502(a) (8) allows employers to sue to enjoin or obtain
equitable relief from violations of "subsection (f) of section 1021
of this title." 29 U.S.C. § 1132(8). That subsection, entitled "Defined benefit plan funding notices," requires plan administrators
to provide annual plan funding notices to certain entities, and
details the information that must be contained in those notices.
29 U.S.C. § 1021(f). Fairmont's claims have nothing to do with
plan funding notices, and so cannot be construed as a claim for
relief under Section 502(a)(8).
Section 502(a)(10) allows employers to sue "in the case of a multiemployer plan that has been certified by the actuary to be in
endangered or critical status under section 1085 of this title, if
the plan sponsor [failed to take certain action(s)]." 29 U.S.C. §
1132(10). While Infiniti states that the Plan is a multiemployer
plan, it does not allege that the Plan "has been certified by the
actuary to be in endangered or critical status under section
1085." Id.; (Def.'s Mot. at 2.) Nor does Fairmont claim that the
Plan is in endangered or critical status. (See generally Pl.'s Opp.)
Thus, Fairmont's claims cannot be construed as a claim for relief
under Section 502(a) (10).
Finally, Section 502(a) (11) allows certain employers, in the case
of a multiemployer plan, to sue to enjoin or obtain equitable relief from violations of subsection (]) of Section 1021. 29 U.S.C. §
1132(11). Subsection (1) of Section 1021 requires plan sponsors
or administrators of multiemployer plans, upon written request,
to furnish "to any employer who has an obligation to contribute
to the plan" a notice of (A) the estimated amount of their withdrawal liability if they withdrew "on the last day of the plan year
preceding the date of the request," and (B) an explanation of how
such estimated liability amount was determined. 29 U.S.C. §

21

1021(1). In essence, when an employer withdraws from a multiemployer plan and the plan is underfunded at the time of their
withdrawal, the withdrawing employer may be forced to compensate the plan to make up for the losses caused by its
withdrawal. Subsection (1) of Section 1021 requires plan sponsors or administrators of multiemployer plans to provide
employers with, upon request, a notice of the scope of their withdrawal liability and an explanation as to how that liability was
calculated. Section 502(a) (11), in turn, allows employers to sue
to obtain equitable relief from violations of this noticing requirement. 29 U.S.C. § 1132(11). AE with Section 502(a)(S), because
Fairmont's claims have nothing to do with withdrawal liability
notices, they cannot be construed as a claim for relief under Section 502(a) (11).
Although Fairmont is an "employer" within the meaning of
ERISA, its claims cannot be construed as a colorable claim for
relief under those Section 502(a) remedies available to employers. Therefore, Fairmont is not an entity who "at some point in
time, could have brought [its] claim[s] under ERISA § 502(a),"
and the Davila analysis ends at prong one. White Oak, 102 F.4th
at 606; Teamsters Local 272, 642 F.3d at 328 (noting that the
Davila test "is conjunctive; a state-law cause of action is [completely] preempted only if both prongs of the test are satisfied").
ERISA does not completely preempt Fairmont's state law claims.
2.

Remand to State Court

When the doctrine of complete preemption does not apply, the
court is without removal jurisdiction and cannot resolve the remaining dispute regarding express preemption. It lacks power "to
do anything other than remand to the state court where the
preemption issue can be addressed and resolved." Dukes, 57 F.3d
at 355. As discussed above, Section 502(a) does not completely
preempt Fairmont's state law claims. Moreover, Infiniti has not
asserted an alternative basis for subject matter jurisdiction. See

22

Wurtz, 761 F.3d at 239 (noting that, where the defendant removes a case to federal court on the basis of complete
preemption and complete preemption is not present, "in the absence of an alternative basis for subject-matter jurisdiction, it
would be inappropriate to reach the merits of the ordinary express preemption defense"); (Notice of Removal at 1-3; Civil
Cover Sheet (Dkt. 1-3) at 1.) Thus, the court is without removal
jurisdiction and cannot resolve the remaining dispute regarding
express preemption. It lacks power to do anything other than remand the case to state court.

IV. CONCLUSION
For the foregoing reasons, Infiniti's motion to dismiss is DENIED,
Fairmont's request for oral argument is DENIED as moot, and this
case is REMANDED to the Kings County Supreme Court.
SO ORDERED.
Dated:

Brooldyn, New York
November:U, 2024
s/Nicholas G. Garaufis
NICHOLASK G. GARAUF$ - •
United States District Judge

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