Limbach v. Weil Pump Co Inc et al

Filing 48

DECISION AND ORDER signed by Judge Lynn Adelman on 4/14/17 granting defendant's 41 Motion to Dismiss a Portion of the Second Amended Complaint. (cc: all counsel) (gc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
SUSAN LIMBACH,
Plaintiff,
v.

Case No. 15-C-1531

WEIL PUMP COMPANY, INC.,
Defendant.
______________________________________________________________________
DECISION AND ORDER
The plaintiff, Susan Limbach, brings this action against her former employer, Weil
Pump Company, Inc., under the Employee Retirement Income Security Act of 1974
(“ERISA”). Before me now is Weil’s motion to dismiss portions of the plaintiff’s second
amended complaint for failure to state a claim upon which relief can be granted. See
Fed. R. Civ. P. 12(b)(6). Also in this order, I discuss an issue relating to federal subjectmatter jurisdiction that the parties have not raised.
I. BACKGROUND
The following facts are based on the allegations of the second amended
complaint, which I accept as true for purposes of this motion. I will refer to the second
amended complaint as simply “the complaint.”
Between March 10, 1997, and January 4, 2012, Weil employed the plaintiff as a
data entry clerk. The plaintiff ended her employment at Weil when a disability left her
physically unable to perform her duties. At the time that Weil became disabled, Weil
maintained a long-term disability insurance policy for its employees issued by Lincoln
National Life Insurance Company.

This disability policy qualified as an employee

welfare benefit plan under ERISA. Weil was the “administrator” of this plan for purposes
of ERISA. Compl. ¶ 3.
On January 16, 2012, the plaintiff “notified Weil that her physician determined
she was totally disabled and unable to perform her work duties as of January 4, 2012.”
Compl. ¶ 9. The plaintiff then “inquir[ed] about possible insurance coverage for her
disability.” Id. In response to her inquiry, the plaintiff “was told by Christine Barthel of
Weil’s human resources department that she, Barthel, would report plaintiff’s disability
to Lincoln, Weil’s insurer, advised plaintiff she would be contacted by Lincoln, and that
plaintiff should address all further questions to Lincoln.” Id.
On August 27, 2013, Lincoln denied the plaintiff’s disability claim. Compl. ¶ 12.1
The plaintiff administratively appealed the denial, but on January 17, 2014, Lincoln
denied her appeal. The plaintiff then filed a second appeal, but Lincoln denied this
appeal on March 27, 2015.
On December 1, 2015, the plaintiff, through her attorney, made a written request
to Weil for the “summary plan description” or “SPD” relating to Weil’s disability plan. A
summary plan description is a written summary of the provisions of an employee benefit
plan. See Employee Benefits Law 4-5 (Jeffrey Lewis et al. eds 3d ed. 2012). It must be
written in a manner calculated to be understood by the average plan participant, and be
sufficiently accurate and comprehensive to reasonably apprise participants and
beneficiaries of their rights and obligations under the plan.

1

Id.

ERISA and its

The complaint alleges that Weil denied the claim, Compl. ¶ 12, but I infer from the
plaintiff’s later allegation that Lincoln denied her appeals that she meant to allege that it
was Lincoln who initially denied the claim. In any event, whether Weil rather than
Lincoln initially denied the claim is irrelevant for present purposes.
2

associated regulations require that any summary plan description include certain
specified information, including the name of the plan, the name and contact information
for the plan administrator, and a statement of the participant’s rights under ERISA. Id.
at 4-6 to 4-8.
Under ERISA, Weil, as the plan administrator, was required to respond to the
plaintiff’s attorney’s request for a summary plan description by mailing a copy to the
plaintiff’s last known address within 30 days after the request was made. See 29 U.S.C.
§§ 1024(b)(4); 1132(c)(1)(B).

However, Weil had never created a summary plan

description for its disability plan, and therefore once it received the plaintiff’s request, it
had to create one. Compl. ¶ 17. Weil did not furnish this newly created plan description
to the plaintiff until February 24, 2016, which was 86 days after the plaintiff made her
written request through counsel. Therefore, claims the plaintiff, Weil is liable to her for
statutory penalties of $110 per day from the date on which Weil should have provided
her with the summary plan description.

See 29 U.S.C. § 1132(c)(1)(B); 29 C.F.R.

§ 2575.502c-1.
Weil has not moved to dismiss the plaintiff’s claim for penalties relating to its
failure to supply her with a summary plan description within thirty days of her attorney’s
written request made on December 1, 2015. However, in addition to seeking penalties
for this failure, the plaintiff also seeks penalties for Weil’s failure to supply her with a
summary plan description within 30 days of the inquiry she made on January 16, 2012,
about possible insurance coverage for her disability.

According to the plaintiff, her

inquiry on that date was an “implied request for an SPD” that triggered Weil’s duty to
provide her with a summary plan description within 30 days. Compl. ¶ 10. She thus
3

seeks to recover the statutory penalty of $110 per day starting from February 15, 2012,
and running until she finally received a summary plan description on February 24, 2016.
Id. ¶ 11. Weil moves to dismiss the plaintiff’s claim insofar as she seeks statutory
penalties based on its failure to provide her with a summary plan description in
response to her alleged implied request, i.e., for the period of February 15, 2012 to
December 30, 2015.
Under ERISA, in addition to providing summary plan descriptions to plan
participants upon request, plan administrators must automatically provide participants
with summary plan descriptions on certain occasions. See 29 U.S.C. § 1024(b)(1). For
example, an administrator must provide a summary plan description to a participant
within 90 days after he or she becomes a participant. Id. § 1024(b)(1)(A). The plaintiff
alleges that Weil did not fulfill its duty to automatically provide her with summary plan
descriptions during the time in which she was a participant.

Compl. ¶¶ 5–8.

Specifically, she alleges that Weil should have automatically provided her with a
summary plan description on June 1, 2002, and again on June 1, 2012. The plaintiff
alleges that Weil’s failure to automatically provide her with summary plan descriptions
caused it to breach its fiduciary duty to her, see 29 U.S.C. § 1104, and renders it liable
for equitable relief under 29 U.S.C. § 1132(a)(3). The equitable relief that the plaintiff
seeks is equitable estoppel and disgorgement of any financial benefit that Weil obtained
as a result of its breach of duty. Weil moves to dismiss the plaintiff’s claims for breach
of fiduciary duty.

4

II. DISCUSSION
A.

Jurisdiction
Before I address Weil’s arguments for dismissing the plaintiff’s claims on the

merits, I address an issue concerning federal subject-matter jurisdiction. The parties
have not raised this issue, but federal courts have an independent obligation to police
their own jurisdiction. See, e.g., Smoot v. Mazda Motors of Am., Inc., 469 F.3d 675,
678 (7th Cir. 2006). The issue is whether the plaintiff has standing to sue for the
violations of law she alleges. The jurisdiction of federal courts is limited to “Cases” and
“Controversies” as described in Article III, Section 2 of the Constitution. Diedrich v.
Ocwen Loan Servicing, LLC, 839 F.3d 583, 587–88 (7th Cir. 2016). There is no case or
controversy if the plaintiff lacks standing to challenge the defendant's alleged
misconduct. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). In order to have
standing, the plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable
to the challenged conduct of the defendant, and (3) that is likely to be redressed by a
favorable judicial decision. Id. at 560–61.
Here, my concern involves the injury-in-fact requirement. An injury in fact occurs
when the plaintiff experiences an invasion of a legally protected interest that is (a)
“concrete and particularized,” and (b) actual or imminent, not “conjectural” or
“hypothetical.” Lujan, 504 U.S. at 560. Recently, in Spokeo, Inc. v. Robins, the Court
emphasized that “concrete” and “particularized” are distinct requirements. __ U.S. __,
136 S. Ct. 1540, 1545 (2016).

Moreover, the Court stated that a “bare procedural

violation, divorced from any concrete harm” does not satisfy the injury-in-fact
requirement. Id. at 1549. That is, where a defendant commits a technical violation of a
5

statutory provision that causes the plaintiff no harm, the plaintiff has not suffered a
concrete injury, even if the statutory violation would entitle the plaintiff to recover
statutory damages. Id. at 1550.
In the present case, my concern is whether the plaintiff has alleged that she
suffered a “concrete” injury as a result of Weil’s failure to provide her with summary plan
descriptions, or whether she alleges merely bare procedural violations of ERISA. As far
as the complaint reveals, Weil’s failures to provide the plaintiff with summary plan
descriptions as required by ERISA did not cause her any harm apart from the failure to
receive information about the plan. The plaintiff does not, for example, allege that the
failure to provide her with summary plan descriptions prevented her from obtaining
benefits under the plan or otherwise prejudiced her claim for benefits. To the contrary,
the plaintiff alleges that she made a claim under the plan. Compl. ¶¶ 12–16. Although
the plaintiff also alleges that her claim was denied, she does not allege that the denial
had anything to do with Weil’s failures to provide her with plan descriptions as required
by ERISA.
Nonetheless, Weil’s failure to provide the plaintiff with a summary plan
description might itself qualify as a concrete injury, even if it did not lead to further harm.
That is because “the violation of a procedural right granted by statute can be sufficient
in some circumstances to constitute injury in fact.” Spokeo, 136 S. Ct. at 1549. In
Spokeo, the Court cited two cases involving a plaintiff’s failure to obtain information,
which in turn held that the plaintiffs’ informational injuries were sufficient to confer
standing to sue.

Id. at 1549–50.

In the first of these cases, Public Citizen v.

Department of Justice, 491 U.S. 440 (1989), the plaintiff requested information that the
6

government was required to disclose under the Federal Advisory Committee Act. One
of the defendants argued that the plaintiff did not suffer an injury sufficient to confer
standing. Id. at 448–49. The Supreme Court rejected this argument, noting that the
plaintiff had “specifically requested, and been refused” information to which it was
entitled under the statute. Id. at 449. The Court noted that its cases “have never
suggested that those requesting information [under a statute] need show more than that
they sought and were denied specific agency records.” Id. The second case, Federal
Election Commission v. Akins, 524 U.S. 11 (1998), also involved a plaintiff’s request for
information under a federal statute. As in Public Citizen, the Court in Akins held that the
plaintiff’s inability to obtain information that the statute required the defendant to make
public qualified as an injury in fact. Id. at 21.
Because the inability to obtain information is itself an injury in fact, I am satisfied
that Weil’s failure to provide the plaintiff with a summary plan description within 30 days
of her attorney’s specific request for that information caused the plaintiff a concrete
injury. As in Public Citizen and Akins, here the plaintiff specifically requested but was
denied information to which she was entitled under ERISA, namely, the information
required to be contained in a summary plan description. Thus, the plaintiff has standing
to pursue statutory damages for Weil’s failure to respond to her attorney’s written
request for a summary plan description within 30 days.
The plaintiff’s claim based on Weil’s failure to provide her with a summary plan
description within 30 days of her January 16, 2012 inquiry, along with her claim that
Weil breached its fiduciary duty to her by failing to automatically provide her with
summary plan descriptions in June 2002 and June 2012, present closer questions.
7

These claims do not allege that the plaintiff “specifically requested” information that Weil
then failed to provide. They are thus not entirely analogous to the claims at issue in
Akins and Public Citizen. However, the complaint alleges that, had Weil not failed to
make the automatic disclosures of plan information required under 29 U.S.C. § 1024(b),
the plaintiff would have made an explicit written request for a summary plan description
as part of her inquiry on January 16, 2012. Compl. ¶ 26. This allegation reasonably
implies that the plaintiff would have found the information contained in the summary
plan description valuable to her, had she received it within 30 days of her inquiry about
possible insurance coverage for her disability. Assuming, then, that ERISA required
Weil to furnish the plaintiff with a summary plan description within 30 days of her
“implied request” on January 16, 2012, the plaintiff has alleged that she suffered a
concrete injury when she did not receive the plan description within that time. The
concrete injury was failing to obtain information that she would have found valuable or
useful to her at that time.
For similar reasons, the plaintiff sufficiently alleges that Weil’s failure to make
automatic disclosures to her caused her concrete injuries. Again, the allegations of the
complaint imply that the plaintiff would have found the information contained in the
automatic disclosures valuable or useful, had Weil made the disclosures. Compl. ¶ 26.
The plaintiff’s not receiving the information at the prescribed times thus qualifies as a
concrete informational injury.
In sum, I conclude that the plaintiff has standing to pursue all of her claims. I
thus turn to the merits and address Weil’s motion to dismiss the plaintiff’s claim based
on her “implied” request and her claims for breach of fiduciary duty.
8

B.

Failure to Provide Summary plan Description in Response to “Implied
Request”
Under ERISA’s civil-enforcement provision, a plan participant may bring a civil

action against a plan administrator for, among other things, statutory penalties.
U.S.C. §§ 1132(a)(1)(A); 1132(c)(1).

29

The provision of ERISA that authorizes the

statutory penalties sought by the plaintiff provides in relevant part as follows:
Any administrator . . . who fails or refuses to comply with a request for any
information which such administrator is required by this subchapter to
furnish to a participant or beneficiary . . . by mailing the material requested
to the last known address of the requesting participant or beneficiary
within 30 days after such request may in the court’s discretion be
personally liable to such participant or beneficiary in the amount of up to
$100 a day from the date of such failure or refusal, and the court may in its
discretion order such other relief as it deems proper.
29 U.S.C. § 1132(c)(1)(B). The Secretary of Labor, through exercise of its regulatory
authority, has increased the maximum penalty under this provision to $110 per day. 29
C.F.R. § 2575.502c-1. The question presented by Weil’s motion to dismiss is whether
the plaintiff adequately alleges that, on January 16, 2012, she made “a request for any
information which [Weil was] required by this subchapter to furnish to a participant or
beneficiary” that in turn required Weil to mail a summary plan description to the
plaintiff’s last known address within 30 days.2
The parties agree that a summary plan description qualifies as “information which
[Weil] was required by this subchapter to furnish to a participant or beneficiary.” As
discussed above, ERISA requires a plan administrator to automatically provide
2

Weil also moves to dismiss this part of the plaintiff’s complaint on the ground that it is
barred by the statute of limitations. However, I do not address this ground for
dismissing the claim.
9

summary plan descriptions to participants on certain occasions, and in addition it
provides that an administrator, “upon written request of any participant or beneficiary,”
must furnish a copy of the “latest updated summary plan description” to the participant
or beneficiary. 29 U.S.C. § 1024(b). The disputed issue is whether the plaintiff alleges
that she made a sufficient “request” for a summary plan description on January 16,
2012.
The plaintiff’s complaint alleges the following with respect to her communications
with Weil on January 16, 2012.

On that date, the plaintiff “notified Weil that her

physician determined she was totally disabled and unable to perform her work duties as
of January 4, 2012.” Compl. ¶ 9. The plaintiff then “inquir[ed] about possible insurance
coverage for her disability.” Id. In response to this inquiry, “Christine Barthel of Weil’s
human resources department” told the plaintiff that “she, Barthel, would report plaintiff’s
disability to Lincoln.” Id. Barthel also told the plaintiff that “she would be contacted by
Lincoln, and that plaintiff should address all further questions to Lincoln.” Id.
An initial issue is whether the plaintiff’s claim should be dismissed because she
does not allege that she made her inquiry about insurance coverage in writing. (The
plaintiff has not asked to amend her complaint to clarify that she made her inquiry in
writing, and she does not dispute that her inquiry was oral rather than written.) Weil
argues that the claim must be dismissed because the only provision of ERISA that
requires an administrator to respond to a participant’s request for a summary plan
description states that the administrator must do so only “upon written request” of the
participant or beneficiary. 29 U.S.C. § 1024(b)(4). However, § 1132(c)(1)(B) does not
itself state that penalties may be awarded only if the administrator fails to comply with a
10

written request for information. Rather, it states that penalties may be awarded for the
administrator’s failure to comply “with a request for any information which [the
administrator] is required by this subchapter to furnish to a participant or beneficiary.”
The plaintiff argues that, because ERISA requires an administrator to automatically
furnish summary plan descriptions to participants on certain occasions, a participant’s
oral request for a summary plan description qualifies as “a request for any information
which [the administrator] is required by this subchapter to furnish to a participant or
beneficiary.” The Ninth Circuit has accepted this argument. See Crotty v. Cook, 121
F.3d 541, 547–48 (9th Cir. 1997) (“The logical reading of [§§ 1024(b)(4) and 1132(c)],
taken together, is that if the participant requests something he was entitled to receive
automatically, without any request, then the civil enforcement penalty provision applies
without regard to whether the request was in writing.”). Weil argues that the Ninth
Circuit’s decision is Crotty rests on an incorrect reading of the statutory provisions and
urges me to reject that interpretation. However, I do not need to resolve this question of
statutory interpretation because, as explained below, even if an oral request for a
summary plan description triggers an administrator’s duty to respond under
§ 1132(c)(1)(B), in the present case the plaintiff has not alleged that she made an oral
request for a summary plan description on January 16, 2012.
The plaintiff concedes that she did not specifically request a summary plan
description when she spoke to Weil’s human-resources department.

However, she

contends that no reasonable administrator could construe her inquiry about possible
insurance coverage for her disability as seeking anything other than the very information
that a summary plan description is required to contain. I agree that the plaintiff’s inquiry
11

about disability insurance could have been answered by furnishing her with a summary
plan description, as the summary plan description must contain information such as the
name of the plan, contact information for the insurer of the plan, and the plan’s
requirements for eligibility and benefits. See 29 U.S.C. § 1022. However, although the
plaintiff made an inquiry that could have been answered by furnishing her with the
summary plan description, it does not follow that the plaintiff made a request for the
summary plan description itself.

That is because asking a question that could be

answered by reading the summary plan description is not same as requesting a copy of
the summary plan description. A participant who asks a question of a plan administrator
either over the phone or in person may be looking for nothing more than a quick oral
response to a question. Asking such a question does not imply that the participant also
wants the administrator to mail a written document to him or her within 30 days. Here,
the allegations of the complaint do not suggest that the plaintiff said anything to Weil’s
human-resources department indicating that she wanted Weil to respond to her inquiry
in writing. Rather, it appears that the plaintiff wanted Weil to provide her with some
guidance about making a claim under the company’s disability plan, which Weil then
did. Thus, the plaintiff’s inquiry was not a “request” for a summary plan description that
triggered Weil’s duty to mail her that document within 30 days.
The plaintiff seems to be arguing that § 1132(c)(1)(B) should be interpreted to
require a plan administrator to mail a summary plan description to a participant
whenever the participant asks the plan administrator a question that could be answered
by the summary plan description, whether or not the participant makes clear that she
would like a copy of the summary plan description or some other written response to her
12

inquiry. However, § 1132(c)(1)(B) does not require an administrator to do this. Rather,
it states that an administrator must mail information to the participant only when the
participant requests information in the form of “material.” 29 U.S.C. § 1132(c)(1)(B)
(stating that administrator must comply with request for information by mailing the
“material requested” within 30 days). Moreover, adopting the plaintiff’s interpretation of
§ 1132(c)(1)(B) would lead to an unreasonable result: because nearly any request for
information about a plan could be answered by furnishing the participant with the
summary plan description, the plaintiff’s interpretation would require a plan administrator
to mail a copy of the plan description to a participant whenever the participant asks a
question about the plan, even if the participant would be satisfied with an oral answer to
his or her question. This, in turn, would needlessly increase administration costs for the
plan. I also note that, as a penalty provision, § 1132(c) must be strictly construed.
Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990) (citing Ivan
Allen Co. v. United States, 422 U.S. 617, 626–27 (1975)). For this reason, and because
§ 1132(c)(1)(B) does not clearly require a plan administrator to mail a summary plan
description to a participant simply because that participant asks a question that could be
answered by reading the summary plan description, § 1132(c)(1)(B) should not be
construed to contain such a requirement.
The plaintiff cites Anderson v. Flexel, Inc., which holds that an administrator
cannot refuse to respond to a participant’s request for documents simply because the
participant does not ask for the documents by name but instead describes the
information sought in enough detail such that the administrator “knew or should have
known which documents were being requested.” 47 F.3d 243, 250 (7th Cir. 1995). Had
13

the plaintiff made a request to Weil indicating that she was seeking documents rather
than simply an oral response to her inquiry, then this principle from Anderson would be
relevant. For example, had the plaintiff asked Weil for “documents explaining my rights
to insurance coverage for my disability,” then Weil would have been required to mail her
a summary plan description within 30 days.

But again, nothing in the complaint

suggests that Weil should have understood the plaintiff to be requesting documents
rather than an oral response.
The approach I have adopted should not be thought to require that a participant
use the word “document” in her request or otherwise explicitly state that she would like
a written response to her inquiry. But it must at least be clear from the request and the
surrounding circumstances that the participant would like to receive documents rather
than have a question answered orally. And again, from what the plaintiff has alleged in
her complaint, Weil could not reasonably have understood the plaintiff to be requesting
a written response to her inquiry.
For these reasons, I conclude that the plaintiff has not alleged that she made a
request for a summary plan description on January 16, 2012.
C.

Breach of Fiduciary Duty
The plaintiff also brings claims for breach of fiduciary duty against Weil based on

its failure to automatically furnish summary plan descriptions to plan participants. The
plaintiff alleges that because Weil breached its fiduciary duty in this regard, it is
equitably estopped from denying that it is liable to her for statutory penalties calculated
from January 16, 2012, the date of her alleged “implied request” for a summary plan
description. The plaintiff also alleges that Weil’s breach of fiduciary duty entitles her to
14

an order requiring Weil to disgorge any financial benefit it obtained as a result of its
failure to automatically furnish participants with summary plan descriptions. Weil moves
to dismiss these claims.3
1. Equitable estoppel as remedy for breach of fiduciary duty
The plaintiff’s argument for equitable estoppel is somewhat convoluted. It begins
with the premise that Weil breached its fiduciary duty to the plaintiff and all other
participants in Weil’s disability plan when it failed to automatically provide them with
summary plan descriptions in June 2002, which was 120 days of the plan’s effective
date, as required by 29 U.S.C. § 1024(b)(1)(B). The plaintiff alleges that if Weil would
have fulfilled its fiduciary duty to the plan participants by automatically providing them
with summary plan descriptions that complied with ERISA’s requirements in June 2002,
then she would have made an express written request for a summary plan description
on January 16, 2012. The plaintiff alleges that she would have made such an express
written request because ERISA requires summary plan descriptions to include a
statement of the participant’s rights under ERISA, including the right to be furnished with
a summary plan description upon written request. See 29 U.S.C. § 1024(c); 29 C.F.R.
2520.102-3(t). In other words, the plaintiff argues that had she received a summary
plan description automatically in 2002, and had that summary plan description included
the required statement of ERISA rights, then she would have known in 2012 that she
had a right to make a written request for an updated summary plan description and she

3

In addition to the grounds discussed below, Weil moves to dismiss the plaintiff’s claims
for breach of fiduciary duty on the ground that they are barred by the statute of
limitations. Because I dismiss these claims on other grounds, I will not discuss the
statute of limitations.
15

would have at that time made such a written request. See Compl. ¶ 26. The plaintiff
argues that, as a remedy for Weil’s failure to provide her with a summary plan
description automatically, which in turn caused her to fail to make an express written
request for an updated summary plan description in 2012, Weil should be equitably
estopped from arguing that it is not liable for statutory penalties under § 1132(c)(1)(B)
because she did not make a clear request for a summary plan description on January
16, 2012.4
For purposes of addressing this argument, I will assume that Weil’s failure to
automatically furnish summary plan descriptions to its plan participants as required by
29 U.S.C. § 1024(b)(1) was a breach of fiduciary duty. I will also assume that equitable
estoppel could in some circumstances constitute a proper remedy for an administrator’s
breach of its fiduciary duty to make automatic disclosures to participants. For example,
if an administrator fails to automatically furnish a statement of rights under § 1024(c)
and its implementing regulations, and then the participant makes a clear oral request for
plan documents, the administrator might be estopped from defending against a claim for
penalties based on the participant’s failure to submit the request in writing, since the
statement of rights would have informed the participant that her request had to be in
writing.
The problem for the plaintiff is that, in this case, the plaintiff did not make any
request for a summary plan description, either orally or in writing. Because the plaintiff
4

The plaintiff also argues that Weil’s breach of fiduciary duty estops it from defending
against her claim for penalties on the ground that she did not make a request in writing.
However, because I have not dismissed her claim for penalties on the ground that her
request was oral rather than written, I will not decide whether Weil could be estopped
from asserting this defense.
16

did not make a request for a summary plan description, Weil cannot be liable for
penalties for failing to respond to any such request, since both the making of a request
and a failure or refusal by the administrator to provide the requested material are
elements of any claim for statutory penalties. See Kleinhans v. Lisle Sav. Profit Sharing
Trust, 810 F.2d 618, 622 (7th Cir. 1987) (stating that, as prerequisite to obtaining
statutory penalties under § 1132(c)(1)(B), “the participant must establish . . . that the
participant requested and the administrator failed or refused to provide the information
requested”).
It is true that the plaintiff alleges that had Weil not breached its fiduciary duty to
provide her with a statement of her rights under ERISA, she would have made a specific
request for a summary plan description on January 16, 2012. But the fact remains that
she did not make any such request. If the plaintiff’s failure to make a specific request
for a summary plan description caused her some other harm, such as the denial of her
claim for benefits under the plan, then perhaps she would be entitled to a remedy for
that harm. But the purpose of awarding statutory penalties under § 1132(c)(1)(B) is to
deter plan administrators from failing to respond to a participant’s request for plan
information. See Leister v. Dovetail, Inc., 546 F.3d 875, 883 (7th Cir. 2008). The
purpose is not to compensate the plaintiff for any harm that may have been caused by
the administrator’s breach of its fiduciary duty to automatically provide the plaintiff with
other plan information. Cf. Mondry v. Am. Fam. Mut. Ins. Co., 557 F.3d 781, 806 (7th
Cir. 2009) (“the purpose of those penalties is to induce the plan administrator to comply
with the statutory mandate rather than to compensate the plan participant for any injury
she suffered as a result of non-compliance”). Here, the plaintiff did not make a request
17

for a summary plan description on January 16, 2012, and therefore Weil cannot be
penalized for failing to mail her a summary plan description within 30 days of that date.
Principles of equity and estoppel do not change this result. Accordingly, I reject the
plaintiff’s attempt to invoke equitable estoppel as a remedy for Weil’s breach of fiduciary
duty.
2.

Disgorgement as remedy for breach of fiduciary duty

The plaintiff’s argument for disgorgement also begins with the premise that Weil
breached its fiduciary duty to the plaintiff and all other participants in Weil’s disability
plan when it failed to automatically provide them with summary plan descriptions as
required by 29 U.S.C. § 1024(b)(1)(B). The plaintiff then alleges that she is entitled to
an order requiring Weil to disgorge any financial benefit it obtained as a result of not
automatically furnishing summary plan descriptions to plan participants. The plaintiff’s
disgorgement theory is based on unjust enrichment: “A trustee (or a fiduciary) who
gains a benefit by breaching his or her duty must return that benefit to the beneficiary.”
Skinner v. Northrop Grumman Ret. Benefit Plan B, 673 F.3d 1162, 1167 (9th Cir. 2012).
Although the plaintiff does not allege in her complaint that Weil actually obtained
any benefit as a result of its failure to automatically furnish summary plan descriptions
as required by § 1024(b)(1)(B), in her brief she contends that “Weil saved money by
delaying the creation of a [summary plan description] for 14 years, and failing to make
the multiple [summary plan description] distributions it was required to provide
participants over that 14 year period.” Br. at 27. However, the cost of preparing and
distributing

summary

plan

descriptions

would

be

expenses

associated

with

administering the plan, and therefore would be charged against the plan’s assets. See
18

ERISA: A Comprehensive Guide § 6.10[H][1] (Paul J. Schneider & Brian M. Pinheiro
eds., 4th ed. Supp. 2016). Because Weil would not have borne these costs had it
complied with its fiduciary duty to prepare and distribute the summary plan description,
id. (“an employer need not bear the lawyer’s fee for writing a plan summary”), the
nonpayment of those costs was not a financial benefit to Weil.
Because the plaintiff has not alleged facts suggesting that Weil gained any
benefit by breaching its fiduciary duty to prepare and automatically furnish the summary
plan description to plan participants, her claim for disgorgement will be dismissed.
III. CONCLUSION
For the reasons stated, IT IS ORDERED that the defendant’s motion to dismiss a
portion of the second amended complaint is GRANTED.
Dated at Milwaukee, Wisconsin, this 14th day of April, 2017.

s/ Lynn Adelman
LYNN ADELMAN
United States District Judge

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