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Soehnlen v. Fleet Owners Insurance Fund

United States Court of Appeals, Sixth Circuit

December 21, 2016

Daniel P. Soehnlen; Bill Reeves; Superior Dairy, Inc., Plaintiffs-Appellants,
v.
Fleet Owners Insurance Fund; Robert Kavalec; Charlie Alferio; Victor Collova, Defendants-Appellees.

          Argued: October 18, 2016

         Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 1:15-cv-00445-Donald C. Nugent, District Judge.

         ARGUED:

          Keith L. Pryatel, KASTNER WESTMAN & WILKINS, LLC, Akron, Ohio, for Appellants.

          Eric G. Serron, STEPTOE & JOHNSON LLP, Washington, D.C., for Appellees.

         ON BRIEF:

          Keith L. Pryatel, Kenneth M. Haneline, KASTNER WESTMAN & WILKINS, LLC, Akron, Ohio, for Appellants.

          Eric G. Serron, Paul J. Ondrasik, Jr., Osvaldo Vazquez, STEPTOE & JOHNSON LLP, Washington, D.C., Lance B. Johnson, LANCE B. JOHNSON LLP, Cleveland, Ohio, for Appellees.

          Before: KEITH, BATCHELDER, and CLAY, Circuit Judges.

          OPINION

          CLAY, Circuit Judge.

Plaintiffs Daniel Soehnlen, Bill Reeves, and Superior Dairy, Inc. filed suit alleging that Defendants Fleet Owners Insurance Fund, Robert Kavalec, Charlie Alferio and Victor Collova, breached a range of obligations under the Employee Retirement Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq. (1974), the Patient Protection and Affordable Care Act of 2010 ("ACA"), 26 U.S.C. § 5000A (Pub. L. No. 111-148, as modified by the subsequently enacted Health Care and Education Reconciliation Act, Pub. L. No. 111-152 (2010)), and § 302 of the Labor Management Relations Act ("Taft-Hartley Act"), 29 U.S.C. § 186 (1988). Plaintiffs also brought breach of contract claims. The district court dismissed Plaintiffs' complaint for failure to state a claim and for lack of standing. For the reasons that follow, we AFFIRM the district court's judgment.

         BACKGROUND

         Factual Background

         Plaintiff Superior Dairy, Inc. ("Superior Dairy") is an Ohio Corporation that engages in the manufacture and processing of milk-based products. Plaintiff Daniel P. Soehnlen is President and Chief Executive Officer of Superior Dairy. Plaintiff Bill Reeves is an hourly employee of Superior Dairy, who also serves as a union steward on behalf of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, General Trucker Drivers and Helpers, Local Union No. 92. As the parties concede, Defendant Fleet Owners Insurance Fund ("Fleet Owners" or the "Plan") is a multi-employer "welfare benefit plan" within the meaning of ERISA, 29 U.S.C. § 1001, and a "group health plan" within meaning of the ACA, and therefore is covered by both ERISA and the ACA. Defendants, Robert Kavalec, Charlie Alferio, and Victor Collova are each represented to be either current or former trustees for the Plan, responsible for overseeing its operation.

         In order to provide medical coverage to its employees, Superior Dairy contracted with Fleet Owners and memorialized the terms of their agreement by signing the participation agreement (the "Participation Agreement") on April 14, 2014. The Participation Agreement incorporated by reference the Amended and Restated Agreement and Declaration of Trust signed in 2002 ("Trust Agreement"). Plaintiffs allege in their amended complaint that prior to entering into the Participation Agreement, they received certain assurances from Fleet Owners and individual trustees of the Plan, that the Plan would comply in all respects with federal law, including ERISA and the ACA.

         According to Plaintiffs, notwithstanding the ACA's statutory requirement mandating that all group health plans eliminate per-participant and per-beneficiary pecuniary caps for both annual and lifetime benefits, the Plan maintains such restrictions. Consequently, Superior Dairy purchased supplemental health insurance benefits to fully cover its employees. Defendants do not, at this time, dispute the existence of benefit caps within the plan, but instead argue that the Plan is exempt from such requirements because it is a "grandfathered" plan.

         Procedural History

         Plaintiffs filed their complaint against Defendants alleging violations of the ACA, ERISA, Taft-Hartley Act, and various provisions of the Trust Agreement and Participation Agreement that govern the Plan. The action was brought both on behalf of individual named Plaintiffs, Soehnlen and Reeves, and the company Superior Dairy, and on behalf of a class of similarly situated employees. The district court dismissed all seven counts alleged in Plaintiffs' complaint. Plaintiffs appeal every one of the district court's conclusions; we therefore consider each argument below.

         DISCUSSION

         Standard of Review

         This Court reviews de novo both a district court's decision to dismiss the complaint for lack of subject matter jurisdiction and to dismiss for failure to state a claim. See Gaylor v. Hamilton Crossing CMBS, 582 F.App'x 576, 579 (6th Cir. 2014); In re Carter, 553 F.3d 979, 984 (6th Cir. 2009) ("Where a district court rules on a 12(b)(1) motion to dismiss that attacks the claim of jurisdiction on its face, this Court reviews the decision de novo.") To avoid dismissal under Rule 12(b)(6), a complaint must provide sufficient facts to state a claim that is plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). And where a plaintiff's Article III standing is at issue, the plaintiff must allege facts sufficient to establish the requisite individualized harm. See Keener v. Nat'l Nurses Org. Comm., 615 F.App'x 246, 251 (6th Cir. 2015).

         Analysis

         I. ...


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