United States District Court, E.D. Wisconsin
DECISION AND ORDER
Adelman District Judge
Kauffman and Dennis Rocheleau bring this putative class
action under the Employee Retirement Income Security Act
(ERISA) against their former employer, General Electric
Company (GE), based on its amendment and termination of
Medicare supplement insurance plans that it once provided to
eligible retirees. Plaintiffs initially brought two claims.
First, they alleged that language in summary plan
descriptions (SPDs) of the plans obliged GE to try to
continue providing benefits under the plans absent a
compelling reason to reduce or terminate them and that it
breached that obligation when it amended and then terminated
the plans. I dismissed this claim at the pleading stage
because the terms of an SPD are not enforceable as the terms
of a plan itself and plaintiffs did not allege that GE
violated any plan terms. See Decision & Order,
ECF No. 49, at 3 (citing Cigna Corp. v. Amara, 563
U.S. 421, 436 (2011)). Second, plaintiffs alleged that GE
breached its fiduciary duties under ERISA with respect to the
plans by misrepresenting its intent to continue the plans
indefinitely absent a compelling reason to substantially
amend or terminate them. Plaintiffs move for class
certification on this claim, and both parties move for
January 1, 2015, GE provided health insurance and
prescription drug benefit plans to eligible retirees and
their beneficiaries, which supplemented Medicare. Between
1992 and 2012, GE issued SPDs of these plans containing
language like the following from § 5.4 of the July 2012
GE expects and intends to continue the GE Medicare Benefit
Plans described in this handbook indefinitely, but reserves
the right to terminate, amend or replace the programs or
plans, in whole or in part (subject to applicable contractual
requirements), at any time and for any reason, by action of
the Board of Directors of General Electric Company or such
persons as it may designate.
A decision to terminate, amend or replace a plan may be due
to changes in federal law or state laws governing qualified
retirement or welfare benefits, the requirements of the
Internal Revenue Service, ERISA or any other reason.
88-2, at 60. The first page of that SPD reads in relevant
part as follows:
While every attempt has been made to make this handbook as
accurate as possible, full details of all provisions of each
program or plan may not be included. Full details of each
program or plan are contained in the official plan documents,
which are available to you as described in Section 5.0,
“Administrative Information, ” . . . . If a
provision described in this handbook differs from the
provisions of an applicable plan document, the plan document
Id. at 3. The SPD states that copies of official
plan documents are available in person at GE's human
resources offices, by phone, and by mail. Id. at 54.
In relevant part, the official plan documents for each plan
say, “This Plan may be amended, suspended, or
terminated by the Board of Directors, in whole or in part, at
any time without limitation . . . .” ECF No. 31-1, at
169; ECF No. 31-2, at 6; ECF No. 31-3, at 9.
September 2012, the GE Board of Directors voted to amend the
plans to eliminate future eligibility for individuals like
plaintiff Evelyn Kauffman who would not be 65 years old,
retired, and enrolled in the plans by January 1, 2015. Later
that month, GE provided written notice of the change to those
affected. Two years later, in September 2014, the Board voted
to terminate the plans effective January 1, 2015, and instead
offer eligible retirees access to coverage on a private
exchange, subsidize the purchase of plans on the exchange,
and reimburse participants for some prescription drug costs.
This change affected individuals like plaintiff Dennis
Rocheleau who were already retired and enrolled in the plans
before January 1, 2015. Within days, GE provided written
notice of the change to those affected.
requires plan administrators like GE to provide participants
with “accurate and comprehensive” SPDs
“written in a manner calculated to be understood by the
average plan participant.” ERISA § 102(a), 29
U.S.C. § 1022(a). Further, when a company acts as a plan
administrator, as it does when issuing an SPD, it acts as a
fiduciary, Amara, 563 U.S. at 437, and must act
“solely in the interest of participants and
beneficiaries” and “with the care, skill,
prudence, and diligence . . . of a prudent man acting in a
like capacity and familiar with such matters, ” ERISA
§ 404(a)(1)(A)-(B), 29 U.S.C. § 1104(a)(1)(A)-(B).
argue that GE breached its fiduciary duties under ERISA with
respect to the plans by issuing SPDs misrepresenting that it
“expected and intended” to continue the plans
indefinitely and that it would only amend or terminate them
for a compelling reason like a change in federal or state
law. “Lying is inconsistent with the duty of loyalty
owed by all fiduciaries and codified in section 404(a)(1) of
ERISA.” Peoria Union Stock Yards Co. Ret. Plan v.
Penn Mut. Life Ins. Co., 698 F.2d 320, 326 (7th Cir.
1983) (citation omitted) (citing § 1104(a)(1)),
quoted in Varity Corp. v. Howe, 516 U.S. 489, 506
(1996). Further, plaintiffs argue that, even if GE didn't
lie, it breached its duty of care when it failed to take
reasonable steps to ensure that the SPDs did not contain
false or misleading information.
argues that it did not intend to mislead or deceive anyone.
It says that the SPDs clearly stated that its Board could
amend or terminate the plans at any time for any reason and
that, even if the SPDs were somehow ambiguous or confusing,
they clearly stated that they were subordinate to the
official plan documents, which were clear. Finally, according
to GE, plaintiffs have not shown that its fiduciary conduct
caused them redressable harm, so they lack ...