:: Sixth Circuit Rejects Claim For Statutory Penalties

Though Jordan has standing to seek statutory damages under § 1132(c)(1)(B), he is not entitled to statutory damages for Tyson’s alleged failure to produce three of the four documents at issue, namely: (1) Jordan’s October 4, 2002 enrollment form for the Tyson Plan; (2) the August 9, 2002 envelope addressed to Jordan’s former address; and (3) the December 17, 2002 email by Tyson’s Director of Group Insurance.Jordan v. Tyson Foods, Inc., 2008 U.S. App. LEXIS 17794 (6th Cir. Tenn. 2008) (unpublished)

This recent unpublished Sixth Circuit opinion provides a good overview of the limited scope of the disclosure requirements of 29 U.S.C. 1024(b)(4). The case follows existing Sixth Circuit precedent on the reach of the statute, so there are no real surprises. The prejudice requirement for imposition of the penalty, while again not novel, is formulated in a manner that is nonetheless of interest.

Statutory Requirement

29 U.S.C. 1024(b)(4) states that:

The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.

General Approach

Controversies over the scope of plan information disclosure requirements do not typically revolve around the production of documents enumerated in the statute, such as the plan document, the summary plan description,the annual or terminal reports. Rather, the disputes center on the open-ended category of “other instruments under which the plan is established or operated”.

Here’s the general approach I recommend for these cases:

1. Is there an ERISA plan?

2. What information is subject to the provision?

3. Who is entitled to request the information and from whom?

4. Under what circumstances may a penalty be appropriate and how should it be calculated?

In Tyson, the issues were #2 and #4.

Documents Not Subject To Statute

The Sixth Circuit takes a formal, restrictive view of the disclosure requirement. The statutory requirement does not apply to “ministerial day to day” claims processing documents. In tihs case, that included the plaintiff’s enrollment form:

This court has held that the term “other instruments” in § 1024(b)(4) “is . . . properly limited to those class of documents which provide a plan participant with information concerning how the plan is operated.” Allinder v. Inter-City Prods. Corp. (USA) 152 F.3d 544, 549 (6th Cir. 1998). In Allinder, the plaintiff brought suit against her former employer under § 1132(c) when the employer refused to complete a claim form necessary for the plaintiff to file a long-term disability insurance claim. Id. at 545. This court rejected the plaintiff’s contention that the administrator’s failure to produce the form warranted § 1132(c) damages, concluding that the term “other instruments” does not include “documents used in the ministerial day-to-day processing of individual claims.” Id. at 549.

A similar conclusion follows in this case with respect to the enrollment form, envelope, and email. Because none of these documents fall within the “class of documents which provide a plan participant with information concerning how the plan is operated,” Jordan may not recover statutory damages under § 1132(c) for Tyson’s failure to provide those documents.

Documents Subject To Statute

Of course, a summary plan description would be subject to the statute – but the federal courts have imposed a gloss on the penal aspect of the requirement – the participant must show prejudice in the defendant’s disclosure omissions. And so,

Finally, the district court did not abuse its discretion in refusing to award statutory damages to Jordan for Tyson’s failure to produce the Tyson Plan Summary Plan Description (SPD). In denying Jordan’s request for money damages, the magistrate concluded that Jordan suffered no prejudice with respect to the alleged failure to provide the documents. This appears correct. Aside from unsupported contentions in his brief, Jordan has not offered any evidence that he was prejudiced by Tyson’s actions.

Note: The Sixth Circuit went to some pains to distinguish its prior opinion, Bartling v. Fruehauf Corp., 29 F.3d 1062 (6th Cir. 1994). In that case, the Court held that actuarial reports were subject to the statute, stating that: “all other things being equal, courts should favor disclosure where it would help participants understand their rights,” id. at 1070.

Enrollment forms do not meet this standard:

Although the Bartling court stated that “all other things being equal, courts should favor disclosure where it would help participants understand their rights,” id. at 1070, all other things are not equal in this case. The documents at issue in Bartling involved actuarial reports that were “indispensable to the operation of the plan” and a written calculation procedure that detailed the procedures followed to derive benefits under the plan. Id. at 1069-71. Such documents are more easily considered “instruments under which the plan is . . . operated” than the enrollment form at issue here.

Indeed, Jordan’s plan enrollment form is more like the claim form at issue in Allinder than the documents at issue in Bartling. Like a claim form, an enrollment form is not “indispensable to the operation of the plan,” but rather serves a ministerial function. Both forms may be related to the receipt of benefits, but neither concerns the operation of the plan as contemplated in § 1024(b)(4). The mere fact that Jordan’s enrollment form contained some information related to benefits and premiums does not alter this conclusion.


Claims Regulations
– Attempts at expanding the statutory reach through incorporation of the claims regulations have not prospered well, and this case was no exception:

Recognizing the difficulty associated with this § 1024(b)(4) argument, Jordan submits an alternative argument. He contends that even if Tyson’s failure to produce the enrollment form, email, and envelope does not warrant damages pursuant to § 1024(b)(4), a participant may seek § 1132(c)(1)(B) relief for 29 C.F.R. § 2560.503-1(h) disclosure violations. Jordan’s contention in this regard, however, is foreclosed by controlling case law.

The case law on the point:

“a plan administrator cannot violate § 1133 and thus potentially incur liability under § 1132(c),” because § 1133 imposes requirements for the benefits plan rather than obligations on the plan administrator. Stuhlreyer v. Armco, Inc., 12 F.3d 75, 79 (6th Cir. 1993) (citing VanderKlok v. Provident Life & Accident Ins. Co., Inc., 956 F.2d 610, 618 (6th Cir. 1992)). Consistent with Stuhlreyer, cases in other circuits have rejected the argument that § 1132(c) statutory damages are available for violations of regulations implementing § 1133.

And see, Wilczynski v. Lumbermens Mutual Casualty Co., 93 F.3d 397 (7th Cir. 1996) and Groves v. Modified Retirement Plan, 803 F.2d 109 (3d Cir. 1986), both cited in the opinion.

Attorney’s Fees
– The plaintiff argued that his having to hire an attorney supported a claim of prejudice. To this, the court replied:

. . . Jordan’s mere assertions that Tyson’s actions forced him to retain additional counsel and contributed to a delay in Tyson’s offer to provide benefits are not sufficient to cause this court to be “firmly convinced” that the district court made a mistake in declining to impose statutory damages. See Bartling, 29 F.3d at 1068 (standard of review).

Several circumstances mitigated against the plaintiff, however, and the opinion underscores the need for clearly stated, persistent requests for plan information, coupled with lack of access to the documents otherwise and a showing of some “appreciable harm”