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Limbach v. Weil Pump Co. Inc

United States District Court, E.D. Wisconsin

April 14, 2017




         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 subject-matter 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. Id. ERISA and its 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 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.


         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 ...

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