United States District Court, N.D. Oklahoma
OPINION AND ORDER
CLAIRE
V. EAGAN, UNITED STATES DISTRICT JUDGE
Before
the Court is the defendant WPX Energy Services Company LLC
ERISA Welfare Benefit Plan (“WPX Plan”)'s
motion for judgment on the pleadings (Dkt. # 46) and brief in
support (Dkt. # 47). Plaintiff Lenora Rodriguez filed a
response and objection (Dkt. # 50) to the motion. WPX Plan
filed a reply (Dkt. # 51).
I.
Plaintiff
initiated this action against defendants WPX Plan and Zurich
American Insurance Company, asserting claims under the
Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1001 et seq. (“ERISA”). Dkt. # 2.
Defendant WPX Plan is the ERISA plan at issue in this case.
Id. at 2. Defendant Zurich is the administrator of
the WPX Plan and “has the sole authority to apply the
terms of the Plan.” Id. Plaintiff alleges that
WPX Energy Services Company, LLC offered the WPX Plan to its
employees. Id. Plaintiff alleges that her
now-deceased spouse, Luis Rodriguez, was an employee of WPX
Energy Services Company and was covered by the WPX Plan.
Id. Further, plaintiff alleges that her spouse had
paid additional premiums to defendant Zurich to increase his
accidental death and dismemberment coverage to $1, 000, 000
in benefits, payable to plaintiff as the sole beneficiary of
the WPX Plan. Id. Plaintiff alleges that on or about
December 17, 2016, her spouse severely injured his leg,
eventually had his leg amputated, and then died within 365
days of his injury. Id. at 2-3. Plaintiff submitted
a claim to Zurich and requested payment under the accidental
dismemberment and death benefits set forth in the WPX Plan.
Id. at 4. Zurich denied the claim. Id. at
7. Plaintiff alleges that, by denying the claim, defendants
Zurich and WPX Plan violated ERISA. Id.
II.
Defendant
WPX Plan moves for judgment on the pleadings, arguing that
the complaint fails to allege any wrongdoing by WPX Plan or
any facts that would support a finding that WPX Plan was
involved in the review or denial of plaintiff's claim.
WPX Plan argues that the complaint alleges actions taken by
Zurich only. WPX Plan argues, therefore, that plaintiff's
claims against it must be dismissed. In response, plaintiff
argues that § 1132(d)(2) of ERISA precludes dismissal of
WPX Plan as a necessary party in this case. Section
1132(d)(2) states that “[a]ny money judgment under this
subchapter against an employee benefit plan shall be
enforceable only against the plan as an entity . . . .”
Section 1132(d)(2) clearly permits beneficiaries to bring
claims against the ERISA plan as an entity. The issue,
however, is whether ERISA plans are necessary parties to
ERISA actions under § 1132(d)(2), including in actions
where, as here, the terms of the plan provide that an
insurance company owes the benefits to the beneficiary and
decides all issues of eligibility.
Plaintiff
argues that, in Geddes v. United Staffing Alliance
Employee Medical Plan, 469 F.3d 919 (10th Cir. 2006),
the Tenth Circuit held “that fiduciary plan
administrators (such as Zurich) are liable and may be
defendants in ERISA cases and that the plan itself
(here, the WPX Plan) is a necessary defendant under Section
1132(d)(2).” Dkt. # 50, at 2. However, Geddes
does not actually address whether ERISA plans are necessary
defendants under § 1132(d)(2). Rather, Geddes
simply holds that, while “ERISA beneficiaries may bring
claims against the plan as an entity and plan administrators,
” they may not bring claims against an independent,
non-fiduciary, third-party administrator. Geddes,
469 F.3d at 931. This holding does not show that the ERISA
plan is a necessary or indispensable party.
Accordingly,
contrary to plaintiff's assertion, the Tenth Circuit has
not addressed whether ERISA plans are necessary parties to
ERISA actions.[1] Moreover, the federal circuit courts that
have addressed the issue are split. In Chapman v.
ChoiceCare Long Island Term Disability Plan, 288 F.3d
506 (2d Cir. 2002), the plan argued that it owed no
obligation to the plaintiff and that the only proper
defendant was the insurance company. Id. at 509. The
Second Circuit found that the plan's argument was wholly
unsupported by the language of the statute, and held that the
fact that the plan had contracted with an insurer to make
payments to beneficiaries did not preclude the plan from
being a party defendant. Id. at 509-10. On the other
hand, in Larson v. United Healthcare Ins. Co., 723
F.3d 905 (7th Cir. 2013), plaintiffs filed a class action
against six major health-insurance companies, and did not
name any ERISA plans as defendants. The Seventh Circuit held
that, “[a]lthough a claim for benefits ordinarily
should be brought against the plan (because the plan normally
owes the benefits), where the plaintiff alleges that she is a
participant or beneficiary under an insurance-based ERISA
plan and the insurance company decides all eligibility
questions and owes the benefits, the insurer is a proper
defendant in a suit for benefits due . . . .”
Id. at 915-16.
Based
on the lack of Tenth Circuit precedent and the split among
other federal circuit courts, the Court is left with little
guidance on how to resolve the issue. What is clear, however,
is that § 1132(d)(2) clearly permits a beneficiary to
obtain a “money judgment . . . against an employee
benefit plan . . . .” Plaintiff has elected to sue WPX
Plan in addition to the insurance company, and the statute
permits a beneficiary to obtain a money judgment against a
plan. Accordingly, the Court finds that WPX Plan should not
be dismissed from this action. However, because there are no
factual allegations against WPX Plan, the Court will provide
WPX Plan an opportunity to elect not to participate in
discovery and trial, and to remain in the action as a nominal
party only. See Fed.R.Civ.P. 20(b) (“The court
may issue orders . . . to protect a party against
embarrassment, delay, expense, or other prejudice that arises
from including a person against whom the party asserts no
claim and who asserts no claim against the party”).
IT
IS THEREFORE ORDERED that defendant WPX Energy
Services Company LLC ERISA Welfare Benefit Plan's motion
for judgment on the pleadings (Dkt. # 46) is
denied.
IT
IS FURTHER ORDERED that, if WPX Plan elects not to
participate in discovery and/or trial, it is directed to file
a notice of intent within five (5) business
days of the date of this Order.
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Notes:
[1] WPX Plan argues that,
“[c]ontrary to Plaintiff's statement [that WPX
Plan's motion has no support in case law in the 10th
Circuit], the Colorado Supreme Court, which is also within
the 10th Circuit, dismissed the plan where the plan had no
obligation to determine eligibility for benefits or
pay.” Dkt. # 51, at 1. However, it is widely understood
that the term “Tenth Circuit case law” does not
include state court decisions. Rather, “Tenth Circuit
case law” includes ...