14‐0676‐cv Diamond v. Local 807 LaborManagement Pension Fund et al.
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 11th day of December, two thousand fourteen.
PRESENT: RALPH K. WINTER, DENNY CHIN, Circuit Judges. J. PAUL OETKEN, District Judge.*
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LANCE S. DIAMOND, Plaintiff‐Appellant,
v. 14‐0676‐cv
LOCAL 807 LABORMANAGEMENT PENSION FUND, JOHN SULLIVAN, ANTHONY STORZ, LUIS HERRERA, JOHN ZAK, ALFRED FERNANDEZ, Defendants‐Appellees.**
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* The Honorable J. Paul Oetken, of the United States District Court for the Southern District of New York, sitting by designation. ** The Clerk of the Court is directed to amend the caption to conform to the above. FOR PLAINTIFF‐APPELLANT: BENNET SUSSER, Richard S. Meisner, Jardim, Meisner & Susser, P.C., Florham Park, New Jersey.
FOR DEFENDANTS‐APPELLEES: DAVID W. NEW, Benjamin A. Karfunkel, Herbert New & David W. New, P.C., West Caldwell, New Jersey.
Appeal from the United States District Court for the Eastern District of
New York (Mauskopf, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff‐appellant Lance Diamond appeals from the judgment of the
district court entered February 7, 2014 dismissing Diamondʹs complaint against Local
807 LaborManagement Pension Fund (the ʺFundʺ) and the members of its Board of
Trustees, John Sullivan, Anthony Storz, Luis Herrerra, John Zak, and Alfred Fernandez.
By memorandum and order also filed February 7, 2014, the district court held that
Diamondʹs complaint ‐‐ which alleged violations of the Employee Retirement Income
Security Act (ʺERISAʺ), 29 U.S.C. § 1001 et seq. ‐‐ did not state a federal cause of action
because he did not exhaust his administrative remedies prior to filing suit. We assume
the partiesʹ familiarity with the underlying facts, the procedural history, and the issues
on appeal.
According to the allegations of the complaint, defendants administer a
pension plan (the ʺPlanʺ) for qualifying employees who work under a collective
bargaining agreement between Truck Drivers Local 807 IBT of Long Island City, New ‐ 2 ‐
York, and their employers. Diamond was employed by defendants as ʺControllerʺ of
the Fund from January 1997 to May 2005 and thus was eligible for benefits under the
Plan. Diamond was dismissed from this position in May 2005.
The Plan sets forth rules and regulations governing eligibility and the
rights of participants to receive benefits. Section 6(b) provides that benefits can be
suspended if participants engage in ʺTotally Disqualifying Employment.ʺ For
employees claiming benefits after 65 years of age, ʺDisqualifying Employmentʺ is
defined as employment of forty or more hours in any month in (A) an industry covered
by the Plan when the participantʹs pension payments began; (B) in the geographic area
covered by the Plan when the participantʹs pension began; and (C) in any occupation in
which the participant worked under the Plan at any time.
On January 9, 2012, Diamond accepted a consulting position with the
Puerto Rican Family Institute, Inc. (ʺPRFIʺ). In February 2012, Diamond turned 65 and
thereafter applied for and began receiving benefits under the Plan. Defendants
suspended Diamondʹs benefits on June 14, 2012 on the basis that his employment with
PRFI constituted Disqualifying Employment under the Plan.
Diamond requested review of his benefit suspension by the Planʹs trustees
but withdrew his request on July 30, 2012. Diamond thus failed to exhaust his
administrative remedies under the Planʹs claims procedure. In October 2012, Diamond
filed the complaint in the district court alleging that defendants (1) breached their
fiduciary duties to Plan participants by failing to comply with their duties under ERISA; ‐ 3 ‐
(2) improperly suspended his benefits; and (3) failed to produce certain documents.1
Defendants moved to dismiss, asserting that Diamond failed to exhaust administrative
remedies prior to filing suit. The district court granted defendantsʹ motion to dismiss,
and Diamond appeals the district courtʹs judgment.
ʺWe review de novo the dismissal of a complaint under [Federal] Rule [of
Civil Procedure] 12(b)(6), accepting all factual allegations as true and drawing all
reasonable inferences in favor of the plaintiff.ʺ N.J. Carpenters Health Fund v. Royal Bank
of Scotland Grp., PLC, 709 F.3d 109, 119 (2d Cir. 2013) (quoting Litwin v. Blackstone Grp.,
L.P., 634 F.3d 706, 715 (2d Cir. 2011)) (alterations in original) (internal quotation marks
omitted). In assessing a motion to dismiss under 12(b)(6), a court must consider
whether the complaint contains ʺsufficient factual matter, accepted as true, to ʹstate a
claim to relief that is plausible on its face.ʹʺ Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Under ERISA, all covered benefit plans must ʺprovide adequate notice in
writing to any participant or beneficiary whose claim for benefits under the plan has
been deniedʺ and ʺafford a reasonable opportunity to any participant . . . for a full and
fair review by the appropriate named fiduciary of the decision denying the claim.ʺ 29
U.S.C. § 1133(1)‐(2). Plan participants denied benefits ʺmust pursue all administrative
remedies provided by their plan pursuant to statute, which includes carrier review in
1 Diamond declined to appeal his claims of ERISA retaliation by Fernandez and failure to produce documents, leaving only the fiduciary duty claims. ‐ 4 ‐
the event benefits are denied.ʺ Chapman v. ChoiceCare Long Island Term Disability Plan,
288 F.3d 506, 511 (2d Cir. 2002). We have consistently recognized ʺthe firmly
established federal policy favoring exhaustion of administrative remedies in ERISA
cases.ʺ Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594 (2d Cir. 1993)
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14‐0676‐cv Diamond v. Local 807 LaborManagement Pension Fund et al.
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 11th day of December, two thousand fourteen.
PRESENT: RALPH K. WINTER, DENNY CHIN, Circuit Judges. J. PAUL OETKEN, District Judge.*
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
LANCE S. DIAMOND, Plaintiff‐Appellant,
v. 14‐0676‐cv
LOCAL 807 LABORMANAGEMENT PENSION FUND, JOHN SULLIVAN, ANTHONY STORZ, LUIS HERRERA, JOHN ZAK, ALFRED FERNANDEZ, Defendants‐Appellees.**
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* The Honorable J. Paul Oetken, of the United States District Court for the Southern District of New York, sitting by designation. ** The Clerk of the Court is directed to amend the caption to conform to the above. FOR PLAINTIFF‐APPELLANT: BENNET SUSSER, Richard S. Meisner, Jardim, Meisner & Susser, P.C., Florham Park, New Jersey.
FOR DEFENDANTS‐APPELLEES: DAVID W. NEW, Benjamin A. Karfunkel, Herbert New & David W. New, P.C., West Caldwell, New Jersey.
Appeal from the United States District Court for the Eastern District of
New York (Mauskopf, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff‐appellant Lance Diamond appeals from the judgment of the
district court entered February 7, 2014 dismissing Diamondʹs complaint against Local
807 LaborManagement Pension Fund (the ʺFundʺ) and the members of its Board of
Trustees, John Sullivan, Anthony Storz, Luis Herrerra, John Zak, and Alfred Fernandez.
By memorandum and order also filed February 7, 2014, the district court held that
Diamondʹs complaint ‐‐ which alleged violations of the Employee Retirement Income
Security Act (ʺERISAʺ), 29 U.S.C. § 1001 et seq. ‐‐ did not state a federal cause of action
because he did not exhaust his administrative remedies prior to filing suit. We assume
the partiesʹ familiarity with the underlying facts, the procedural history, and the issues
on appeal.
According to the allegations of the complaint, defendants administer a
pension plan (the ʺPlanʺ) for qualifying employees who work under a collective
bargaining agreement between Truck Drivers Local 807 IBT of Long Island City, New ‐ 2 ‐
York, and their employers. Diamond was employed by defendants as ʺControllerʺ of
the Fund from January 1997 to May 2005 and thus was eligible for benefits under the
Plan. Diamond was dismissed from this position in May 2005.
The Plan sets forth rules and regulations governing eligibility and the
rights of participants to receive benefits. Section 6(b) provides that benefits can be
suspended if participants engage in ʺTotally Disqualifying Employment.ʺ For
employees claiming benefits after 65 years of age, ʺDisqualifying Employmentʺ is
defined as employment of forty or more hours in any month in (A) an industry covered
by the Plan when the participantʹs pension payments began; (B) in the geographic area
covered by the Plan when the participantʹs pension began; and (C) in any occupation in
which the participant worked under the Plan at any time.
On January 9, 2012, Diamond accepted a consulting position with the
Puerto Rican Family Institute, Inc. (ʺPRFIʺ). In February 2012, Diamond turned 65 and
thereafter applied for and began receiving benefits under the Plan. Defendants
suspended Diamondʹs benefits on June 14, 2012 on the basis that his employment with
PRFI constituted Disqualifying Employment under the Plan.
Diamond requested review of his benefit suspension by the Planʹs trustees
but withdrew his request on July 30, 2012. Diamond thus failed to exhaust his
administrative remedies under the Planʹs claims procedure. In October 2012, Diamond
filed the complaint in the district court alleging that defendants (1) breached their
fiduciary duties to Plan participants by failing to comply with their duties under ERISA; ‐ 3 ‐
(2) improperly suspended his benefits; and (3) failed to produce certain documents.1
Defendants moved to dismiss, asserting that Diamond failed to exhaust administrative
remedies prior to filing suit. The district court granted defendantsʹ motion to dismiss,
and Diamond appeals the district courtʹs judgment.
ʺWe review de novo the dismissal of a complaint under [Federal] Rule [of
Civil Procedure] 12(b)(6), accepting all factual allegations as true and drawing all
reasonable inferences in favor of the plaintiff.ʺ N.J. Carpenters Health Fund v. Royal Bank
of Scotland Grp., PLC, 709 F.3d 109, 119 (2d Cir. 2013) (quoting Litwin v. Blackstone Grp.,
L.P., 634 F.3d 706, 715 (2d Cir. 2011)) (alterations in original) (internal quotation marks
omitted). In assessing a motion to dismiss under 12(b)(6), a court must consider
whether the complaint contains ʺsufficient factual matter, accepted as true, to ʹstate a
claim to relief that is plausible on its face.ʹʺ Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Under ERISA, all covered benefit plans must ʺprovide adequate notice in
writing to any participant or beneficiary whose claim for benefits under the plan has
been deniedʺ and ʺafford a reasonable opportunity to any participant . . . for a full and
fair review by the appropriate named fiduciary of the decision denying the claim.ʺ 29
U.S.C. § 1133(1)‐(2). Plan participants denied benefits ʺmust pursue all administrative
remedies provided by their plan pursuant to statute, which includes carrier review in
1 Diamond declined to appeal his claims of ERISA retaliation by Fernandez and failure to produce documents, leaving only the fiduciary duty claims. ‐ 4 ‐
the event benefits are denied.ʺ Chapman v. ChoiceCare Long Island Term Disability Plan,
288 F.3d 506, 511 (2d Cir. 2002). We have consistently recognized ʺthe firmly
established federal policy favoring exhaustion of administrative remedies in ERISA
cases.ʺ Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594 (2d Cir. 1993)
(quoting Alfarone v. Bernie Wolff Constr., 788 F.2d 76, 79 (2d Cir. 1986)) (internal
quotation marks omitted).
It is undisputed that Diamond failed to exhaust the claims procedure of
the Plan. Diamond initially appealed his benefit suspension to the Planʹs trustees as
required by the Planʹs claims procedure, but he later withdrew the appeal intending, as
he explained, to ʺseek reinstatement of his pension benefit in Federal Court without
exhausting the administrative appeal process.ʺ App. at 200. At issue is whether
Diamondʹs complaint is premised on an interpretation of the terms of the Plan or on an
ERISA statutory violation. District courts in this Circuit ʺhave drawn a distinction
between claims relating to violations of the terms of a benefit plan, and claims relating
to statutory violations of ERISA, finding that the former, but not the latter, claims must
be administratively exhausted.ʺ Role v. Johns Hopkins Bayview Med. Ctr., 06‐Civ.‐2475,
2008 WL 465574, at *3 (E.D.N.Y. Feb. 15, 2008).
Diamond argues that he is not required to exhaust administrative
remedies because he alleges a statutory violation of ERISA. The Second Circuit ʺhas not
addressed the specific question whether exhaustion is required for statutory [ERISA]
claims.ʺ Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 102 (2d Cir. 2005). The Third, ‐ 5 ‐
Fourth, Fifth, Sixth, Ninth, and Tenth Circuits have held that plaintiffs need not exhaust
administrative remedies before bringing a legal action asserting a violation of the
ERISA statute. See Milofsky v. Am. Airlines, Inc., 442 F.3d 311, 313 (5th Cir. 2006) (per
curiam); Smith v. Snydor, 184 F.3d 356, 363‐65 (4th Cir. 1999); Richards v. Gen. Motors
Corp., 991 F.2d 1227, 1235 (6th Cir. 1993); Held v. Mfrs. Hanover Leasing Corp., 912 F.2d
1197, 1205 (10th Cir. 1990); Zipf v. A.T.&T. Co., 799 F.2d 889, 894 (3d Cir. 1986); Amaro v.
Contʹl Can Co., 724 F.2d 747, 749‐50 (9th Cir. 1984). The district court below agreed,
joining the district courts in this Circuit that have dispensed with the exhaustion
requirement where plaintiffs allege statutory ERISA violations. See, e.g., De Pace v.
Matsushita Elec. Corp. of Am., 257 F. Supp. 2d 543, 557‐58 (E.D.N.Y. 2003). Yet, the
district court required exhaustion because it found Diamondʹs claims to allege
violations of the terms of the Plan.
We need not decide the issue of whether exhaustion is required for
statutory ERISA claims because we agree that Diamond is alleging a breach of the terms
of the Plan, not a statutory violation of ERISA. Diamond casts his claim as a statutory
violation, arguing that ʺDefendantsʹ misreading of the Pension Plan Rules was so
improper, so egregious and so unreasonable as to be a breach of Defendantʹs ERISA‐
created fiduciary duties.ʺ Appellantʹs Corrected Reply Brief at 4. Yet Diamondʹs
amended complaint specifically alleges that defendants ʺviolated the express terms and
conditions of the Pension Planʺ and thus breached their ʺfiduciary duties under Section
404 of ERISA because, at this time, they have knowledge that they are not operating the ‐ 6 ‐
Pension Plan ʹin accordance with the documents and instrumentsʹ governing the
Pension Plan.ʺ App. at 25‐26. The "essence of a cause of action,ʺ however, ʺis found in
the facts alleged and proven by the plaintiff, not the particular legal theories
articulated.ʺ Oneida Indian Nation of N.Y. v. Cnty. of Oneida, 617 F.3d 114, 139 (2d Cir.
2010); cf. Hack v. President & Fellows of Yale Coll., 237 F.3d 81, 89 (2d Cir. 2000) (Pooler, J.,
concurring), abrogated on other grounds by Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002).
Because Diamondʹs allegations explicitly required interpretation of the documents
governing the Plan, we view his claim as involving a breach of fiduciary duties,
notwithstanding his framing of the claim as a statutory violation. Cf. Cent. States, Se. &
Sw. Areas Health & Welfare Fund v. Gerber Life Ins. Co., 771 F.3d 150, 154 (2d Cir. 2014)
(Litigants cannot ʺplead around ERISAʹs limitationsʺ and bring ʺlegal [claims] for
money damages even though they are covered by an equitable label.ʺ).
Because Diamond was seeking only to receive benefits under the Plan that
he contends were withheld in violation of the terms of the Plan, he was required to
exhaust his administrative remedies. Because he failed to do so, his claim was properly
dismissed. See Chapman, 288 F.3d at 511.
Diamond further contends that it would have been futile to pursue
administrative remedies. Where an ERISA plaintiff makes a ʺclear and positive
showing that pursuing available administrative remedies would be futile,ʺ a failure to
exhaust is excused. Kennedy, 989 F.2d at 594 (internal quotation marks omitted). Here,
however, the conclusory allegations of Diamondʹs complaint fail to sufficiently allege ‐ 7 ‐
futility. See Davenport v. Harry N. Abrams, Inc., 249 F.3d 130, 133 (2d Cir. 2001) (per
curiam) (holding that a ʺputative ʹdenialʹ of benefitsʺ contained in a letter ʺdid not
render futile further pursuit of [plaintiffʹs] claims through the proper channelsʺ); see also
Saladin v. Prudential Ins. Co. of Am., 337 F. Appʹx 78, 80 (2d Cir. 2009) (summary order)
(stating that exhaustion was required where ʺadministrative rejection of [plaintiffʹs]
challenge was not a foregone conclusionʺ).
We have reviewed Diamondʹs remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT: Catherine OʹHagan Wolfe, Clerk
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