Plaintiffs in ERISA employee benefit cases are frequently asserting breach of fiduciary duty claims, and then seeking broader discovery.

So, consider early motions to dismiss the breach of fiduciary duty claims.

One argument to use in seeking early dismissal of breach of fiduciary duty claims is the ministerial defense: That is because “[a] person who performs purely ministerial functions…for an employee benefit plan within a framework of policies, interpretations rules, practices and procedures made by other persons is not a fiduciary….” 29 C.F.R. Section 2509.75-8(D-2).

The recent case that highlights the point is Turner v. Volkswagen Group of America, Inc., 2017 WL 3037803 (S.D. West Virginia July 18, 2017)(“ERISA fiduciary status is conferred by the function performed—not the position of the entity performing the duty.”)

FACTS: Keith Turner sought ERISA-governed long term disability benefits, and after his death Karen Turner sued seeking ERISA-governed life and survivor benefits, and asserting a breach of fiduciary duty claim. Defendants moved to dismiss a number of claims, including the breach of fiduciary duty claim.

ISSUE: Whether the Court should GRANT Defendants’ Rule 12(c) motion to dismiss the breach of fiduciary duty claim.

HELD: Breach of Fiduciary Duty Claim Dismissed. (The Court ruled on other issues, including the fiduciary duty claim).

  1. “A person who performs purely ministerial functions…for an employee benefit plan within a framework of policies, interpretations rules, practices and procedures made by other persons is not a fiduciary because such person does not have discretionary authority or discretionary control respecting management of the plan, does not exercise any authority or control respecting management or disposition of the assets of the plan, and does not render investment advice with respect to any money or other property of the plan and has no authority or responsibility to do so.” (Emph. added). Op. at 16-17.
  2. “Plaintiff alleges that the defendants breached fiduciary duties by failing to advise her of her rights under the benefits plan, failing to advise Mr. Turner of his rights under the plan while he was alive, and sending the plaintiff and Mr. Turner erroneous statements that he continued to have life insurance under the plan. None of the conduct alleged by the plaintiff constitutes management or administration of the plan.” Op. at 17 (Emph. added).
  3. “[F]ailing to notify a claimant that he was no longer eligible for life insurance was a ministerial function.” Op. at 17.
  4. “Although the plaintiff argues that Volkswagen’s conduct constitutes a breach of fiduciary duty because it is both the payor and adjudicator of claims, ERISA fiduciary status is conferred by the function performed—not the position of the entity performing the duty.” Op. at 17-18 (Emph. added).
  5. “Here, the functions on which the plaintiff bases her breach of fiduciary duty claim are ministerial [and the breach of fiduciary duty claim is dismissed.]” Op. at 18.