UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 95-60416
PATRICIA CUNNINGHAM,
Plaintiff-Appellant,
versus
DUN & BRADSTREET PLAN SERVICES, INC.;
DUN & BRADSTREET PENSION SERVICES,
INC.; J.T. COMER & ASSOCIATES, a
division of Dun & Bradstreet Pension
Services, Inc.; DUN & BRADSTREET, INC.,
Defendants-Appellees.
Appeal from the United States District Court
For the Northern District of Mississippi
(1:92CV139-D-D)
December 19, 1996
Before POLITZ, Chief Judge, GOODWIN* and DUHÉ, Circuit Judges.
POLITZ, Chief Judge:**
Patricia Cunningham appeals the Rule 12(b)(6) dismissal of her action
*
Circuit Judge of the Ninth Circuit, sitting by designation.
**
Pursuant to Local Rule 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in Local Rule
47.5.4.
seeking damages for an alleged breach of fiduciary duties by ERISA plan
administrators. For the reasons assigned, we affirm.
Background
Cunningham, an employee of Pest Management Specialists, Inc., participated
in pension and profit sharing plans sponsored by PMSI that qualified as “employee
benefit plans” under the Employee Retirement Income Security Act.1 In July of
1986 funds representing Cunningham’s interests in the plans were transferred out
of the plans under instructions from the then plan administrator.2 Cunningham was
not notified that her share of plan assets was being removed from the plans and was
not informed of the tax consequences of these plan distributions.
Cunningham filed suit against the plan administrators, contending that they
breached their fiduciary duties to her by negligently failing to notify her that the
plans had been terminated, that a distribution was being made to her, and that the
distribution entailed significant tax consequences. Cunningham alleged causes of
1
29 U.S.C. § 1003.
2
Cunningham alleges that from inception to December 31, 1986, Personal Money
Management, Inc. was the plan administrator. Effective January 1, 1987, J.T. Comer &
Associates acquired the business of PMMI and assumed the administration of the plans.
Comer was merged with Dun & Bradstreet Pension Services, Inc. in 1989. Cunningham
named Comer, Dun & Bradstreet Pension Services, Inc., Dun & Bradstreet Plan Services,
Inc., with whom Comer became affiliated in June of 1986, and Dun & Bradstreet, Inc., the
parent company of the latter two entities, as defendants in this lawsuit.
2
action under ERISA and Mississippi common law and sought compensation for her
tax liability, the fees and expenses concomitant thereto, the loss of any continued
tax-deferred growth of the disbursed funds, and exemplary damages.
The plan administrators filed a motion to dismiss under Rule 12(b)(6)
contending that Cunningham could not sue them under ERISA on her own behalf,
but only on behalf of the plans, and that her state law claims were preempted by
ERISA. The district court granted this motion and dismissed Cunningham’s
claims. Cunningham timely appeals.
Analysis
Our review of a dismissal under Rule 12(b)(6) is de novo, with all well-
pleaded facts taken as true and considered in the light most favorable to the
plaintiff.3
Cunningham first contends that her allegations state a cause of action under
29 U.S.C. § 1132(a)(2).4 As the plan administrators correctly observe, however,
3
Capital Parks, Inc. v. Southeastern Advertising & Sales Sys., Inc., 30 F.3d 627 (5th
Cir. 1994).
4
Section 1132(a)(2) provides:
A civil action may be brought --
***
(2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate
3
Cunningham seeks only personal recovery and does not suggest that the plan
administrators’ conduct detrimentally affected the plan as a whole. In
Massachusetts Mut. Life Ins. Co. v. Russell,5 the Supreme Court held that any
recovery under section 1132(a)(2) inures solely to the benefit of the plan, not the
individual beneficiary. Therefore, because Cunningham seeks only to recover for
her personal losses, the holding of Russell precludes her from maintaining this
action under section 1132(a)(2).6
Cunningham next advances the contention, first raised in her response to
relief under section 409 [29 USC § 1109]. . . .
29 U.S.C. § 1109 provides, in pertinent part:
(a) Any person who is a fiduciary with respect to a plan who breaches any of the
responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter
shall be personally liable to make good to such plan any losses to the plan resulting
from each such breach, and to restore to such plan any profits of such fiduciary which
have been made through use of assets of the plan by the fiduciary, and shall be subject
to such other equitable or remedial relief as the court may deem appropriate,
including removal of such fiduciary.
5
473 U.S. 134 (1985).
6
Insofar as Cunningham maintains that she may escape the teachings of Russell by
characterizing her claim as one for a breach of the fiduciary duties outlined in section 1104,
not section 1109, her contention is foreclosed by our recent opinion in McDonald v.
Provident Indem. Life Ins. Co., 60 F.3d 234 (5th Cir. 1995), cert. denied, 116 S.Ct. 1267
(1996). In McDonald, after finding that the fiduciary duties prescribed by section 1104 had
been breached, we held that the plaintiffs’ failure to prove a loss to the plan was fatal to their
claim. McDonald, 60 F.3d at 237.
4
defendants’ motion to dismiss, that she states a claim under section 1132(a)(3). 7
Section 1132(a)(3) does provide a cause of action for individual participants and
beneficiaries who allege a breach of fiduciary duties by an ERISA plan
administrator, but limits the available remedies to “appropriate equitable relief.”8
In Mertens v. Hewitt Assocs.,9 the Supreme Court held that the phrase “other
appropriate equitable relief” in this section refers to remedies typically available
in equity, i.e. injunction, mandamus, and restitution, but not to compensatory or
punitive damages. Throughout this litigation Cunningham has consistently referred
to the recovery she seeks as “damages” or “compensatory damages,” adopting the
position only in the eleventh hour that what she seeks is equitable restitution. A
grant of equitable restitution, however, is warranted only when the defendant has
7
Section 1132(a)(3) provides:
A civil action may be brought --
***
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice
which violates any provision of this subchapter or the terms of the plan, or (B) to
obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce
any provisions of this subchapter or the terms of the plan . . . .
8
Vanity Corp. v. Howe, 116 S.Ct. 1065 (1996).
9
508 U.S. 248 (1993).
5
profited unjustly at the plaintiff’s expense.10 Because none of Cunningham’s
claimed injuries inured to the benefit of the plan or its administrators, we must
conclude that her complaint states a claim for legal damages only and thus cannot
be maintained under section 1132(a)(3).
Cunningham next challenges the district court’s determination that all of her
state law claims are preempted. Cunningham asserts that, after termination of the
plan and distribution of the assets, the administrators affirmatively misled her into
believing that the plans remained in force and that she could leave her funds in
the plans exempt from taxes. She asserts that such misconduct supports a state law
claim for breach of fiduciary duty and that because the breach occurred after the
plan was terminated ERISA does not preempt these claims.
Section 514(a) of ERISA11 provides that ERISA’s provisions “supersede any
and all State laws insofar as they may now or hereafter relate to any employee
benefit plan.” “The words ‘relate to’ are to be given their ‘broad common-sense
meaning’ and a state law will be pre-empted ‘if it has a connection with or
10
See Borst v. Chevron Corp., 36 F.3d 1308 (5th Cir. 1994), cert. denied, 115 S.Ct. 1699
(1995); Crocker v. Piedmont Aviation, Inc., 49 F.3d 735 (D.C. Cir.), cert. denied, _____
U.S. _____, 116 S.Ct. 180 (1995).
11
29 U.S.C. § 1144(a).
6
reference to such a plan.’”12 Nonetheless, “[p]reemption does not occur . . . if the
state law has only a tenuous, remote, or peripheral connection with covered plans,
as is the case with many laws of general applicability.”13 Furthermore, “a law or
claim is preempted when it relates to an ERISA plan, and not the reverse.” 14
We conclude that although those claims which are based upon fiduciary
duties created by ERISA or arise out of the plan administrator’s conduct during the
lifetime of the plan or during post-termination events regulated by ERISA15 are
preempted, any claims based upon the breach of legal duties arising under state law
outside of this limited preemptive scope remain viable. In other words, if after
Cunningham’s assets were no longer under ERISA’s mantle there nonetheless
12
Christopher v. Mobil Oil Corp., 950 F.2d 1209, 1217-18 (5th Cir.) (citations omitted),
cert. denied, 506 U.S. 820 (1992).
13
New York State Conference of Blue Cross & Blue Shield v. Travelers Ins., _____
U.S. _____, _____, 115 S.Ct. 1671, 1680, 131 L.Ed.2d 695 (1995), quoting District of
Columbia v. Greater Washington Board of Trade, 506 U.S. 125, 113 S.Ct. 580, 121
L.Ed.2d 513 (1992) (internal quotation marks and citations omitted).
14
Hook v. Morrison Milling Co., 38 F.3d 776, 785 (5th Cir 1994). See also New York
Blue Cross (state law of general application which merely increases costs of ERISA plan
demonstrates insufficient nexus for preemption).
15
See American Flint Glass Workers Union v. Beaumont Glass Co., 62 F.3d 574, 579
(3d Cir. 1995) (“We will, however, assume, once a termination decision is reached, that
ERISA’s fiduciary duties control the termination procedures.”). Termination of an ERISA-
covered plan must occur according to the procedures set forth in Subchapter III, subtitle C,
29 U.S.C. § 1341 et seq. Pension Benefit Guar. Corp. v. Pritchard, 50 F.3d 315 (5th Cir.
1995).
7
existed as a matter of independent state law some fiduciary relationship between
the parties, irrespective of ERISA’s provisions, an action arising out of this
relationship would escape ERISA preemption. The fact that a state law claim
embraces parties whose financial relationship was previously regulated by ERISA
is alone insufficient to create a connection between the claim and ERISA which
warrants preemption.
Under Mississippi law a fiduciary relationship may exist as a legal matter
when there emerges “on the one side an overmastering influence or, on the other,
weakness, dependence, or trust, justifiably reposed.”16 Cunningham’s pleadings,
however, clearly reference the participant-administrator relationship under ERISA
as the sole source of the fiduciary duties allegedly breached. Given the
exclusiveness of Cunningham’s submissions, we perceive no error in the district
court’s finding that Cunningham’s state law claims “relate to,” and hence are
preempted by, section 504 of ERISA.
The judgment appealed is AFFIRMED.
16
Miner v. Bertasi, 530 So.2d 168, 170 (Miss. 1988).
8