Central States, Southeast and Southwest Areas Health and Welfare Fund, an Employee Welfare Benefit Plan, by Arthur H. Bunte, Jr., Trustee, in his representative capacity, Plain tiffs-Appellan ts,
American International Group, Inc., et al., Defendants-Appellees.
December 7, 2015
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 14 C 5195 - John
Z. Lee, Judge.
Flaum, Williams, and Sykes, Circuit Judges.
self-funded ERISA plan has sued several independent health
insurers seeking reimbursement for medical expenses it paid
on behalf of beneficiaries who were covered under both the
plan and the insurers' policies. We're asked to
decide whether a lawsuit like this one-a "coordination
of benefits" dispute-seeks "appropriate equitable
relief" under section 502(a)(3) of ERISA, 29 U.S.C.
§ 1132(a)(3). Six circuits have held that section
502(a)(3) does not authorize suits of this type because the
relief sought is legal, not equitable. We join this consensus
and affirm the dismissal of the ERISA plan's suit.
States, Southeast and Southwest Areas Health and Welfare Fund
("Central States" or "the plan") is a
self-funded ERISA plan that provides health coverage to
participating Teamsters and their dependents. The plan's
trustee filed suit on the plan's behalf seeking a
declaratory judgment enforcing the plan's terms and
awarding restitution on various theories. The defendants are
insurance companies that underwrite and administer insurance
policies for schools and youth sports leagues; their policies
cover injuries sustained by young athletes while
participating in athletic activities sponsored by these
schools and leagues. The case arises from injuries sustained
by student athletes who had medical coverage under both the
Central States plan and the independent
insurers' policies. The trustee alleges that the plan
paid the beneficiaries' medical bills in full, in the
total amount of about $343, 000, and the insurers owe
plan and the insurers' policies have competing
coordination-of-benefits clauses, and each side claims that
its respective provision makes the other primarily liable for
the beneficiaries' medical expenses.
Coordination-of-benefits disputes like this one are often
resolved in state court in a declaratory-judgment action on
an equitable-contribution theory. See 16 Lee R. Russ
& Thomas F. Segalla, Couch on Insurance § 232:71 (3d
trustee sued in federal court under section 502(a)(3) of
ERISA (the Employee Retirement Income Security Act of 1974),
which provides in relevant part that a participant,
beneficiary, or fiduciary of an employee-benefits plan may
bring a civil action "to obtain ... appropriate
equitable relief ... to enforce any provisions of this
subchapter or the terms of the plan." 29 U.S.C. §
1132(a)(3)(B) (emphasis added). The trustee contends that the
suit seeks "appropriate equitable relief" to
enforce the plan's coordination-of-benefits provision.
specifically, the trustee seeks: (1) a declaratory judgment
that the insurers are primarily liable for "current
unpaid and future medical expenses" incurred by athletes
who are covered by both the plan and one of the insurers; (2)
a declaratory judgment that the insurers are primarily liable
for medical expenses for injuries already incurred and
treated; (3) the imposition of an equitable lien on sums held
by the insurers in the amount of the benefits paid by the
plan; and (4) an order that the insurers must reimburse the
plan, variously justified on restitution, unjust enrichment,
and subrogation theories.
insurers moved to dismiss all claims. The district judge
granted the motion on two different grounds. To the extent
that the suit sought a declaratory judgment regarding future
medical expenses, the judge held that it did not raise a
controversy sufficient to invoke the court's power to
award declaratory relief and dismissed that claim for lack of
subject-matter jurisdiction. See Fed. R. Civ. P.
12(b)(1). The remaining claims were dismissed under Rule
12(b)(6) for failure to state a claim. The judge reasoned
that the relief sought, though phrased in equitable terms,
was not equitable relief within the meaning of section
always, our first question is subject-matter jurisdiction.
We're satisfied that jurisdiction is secure over most of
this case. The Central States plan has clearly been injured
by the independent insurers' failure to reimburse it for
the medical expenses it has paid, and its claim arises under
a federal statute, section 502(a)(3) of ERISA. But the
request for a declaratory judgment regarding the
insurers' liability for "current unpaid and future
medical expenses" is jurisdictionally problematic. For
starters, the trustee's use of the phrase "current
unpaid and future medical expenses" is odd. The amended
complaint alleges that Central States paid the injured
students' medical expenses in full. Accepting that as
true, there are no "current unpaid" medical
expenses at all. The trustee ...