First National Life Insurance v. Sunshine-Jr. Food Stores, Inc.

CLARK, Senior Circuit Judge, specially concurring:

I concur in the result in this case but am troubled by some inferences in the opinion. This case exemplifies a type of ERISA case we are seeing more often — the entire plan consists of an insurance policy. I agree with the majority that we have to look to 29 U.S.C. § 1132(a)(3), which is quoted on page 1552 of the majority opinion. That subsection authorizes the plaintiff insurance company, a fiduciary, to bring a civil action to obtain relief. The majority states on page 2421: “Appellant has not pointed to any ERISA provision that would impose a fiduciary duty upon Sunshine with respect to FNL.” Further, on page 2424, the majority states: “We must reject FNL’s argument that the phrase ‘equitable relief’ in § 1132(a)(3) authorizes an award of compensatory damages.”

I can find no cases similar to this one, but my study of the statute leads me to conclude that a plaintiff situated as FNL here can collect compensatory damages under certain circumstances. I repeat that I concur in the result in this case because FNL failed to make out a case. Nevertheless, it is my view that an employer who secures a medical insurance policy on its employees becomes a co-fiduciary pursuant to § 1002(21)(A)(i):

(21)(A) Except as otherwise provided in subparagraph (B), a person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets. Such term includes any person designated under section 1105(c)(1)(B) of this title.

This conclusion finds support in the definitions of “plan sponsor” and “administrator” in § 1002.

Section 1132(a)(3) permits an insurance company /fiduciary to obtain an accounting from an employer/co-fiduciary that is necessary to allow the insurance company to properly administer the plan. This action would include requiring the employer to furnish the names of all employees, dates of employment, and other data necessary to insure coverage and payment of premiums by the employer for such coverage. Similarly, I conclude that sub-part (ii) of this section — “to enforce any provision of this subchapter of the terms of the plan”— permits the insurance company to bring an action for premiums owed for insurance coverage provided under the plan, even though such relief might not be strictly classified as “equitable.”

Any other interpretation of the statute would frustrate the intention of the statute to include medical insurance plans within the provisions of ERISA. Insurance companies would be reluctant to engage in writing such policies if their rights to collect premiums were limited first by an interpretation that ERISA preempts all claims by such companies against employers, and then by an interpretation of ERISA that would limit such claims only to equitable claims and provide relief only for those who are beneficiaries of such plans. I am inclined to agree with the majority that ERISA preempts such an action, but I read § 1132(a)(3) broadly enough to require district courts to enforce all rights an insurance company has against an employer that stem from the policy and the relationship of the parties in administering the plan.