On August 3, 2012, the Second Circuit affirmed dismissal of a putative ERISA class action against Xerox Corporation (“Xerox”), because the plaintiffs did not allege sufficient factual content from which to conclude that Xerox (and the other defendants) misrepresented any material matter to plan participants regarding the receipt of their lifetime health care benefits and, in the absence of any other alleged breach of fiduciary duty, the plaintiffs did not state a plausible claim for relief under Sections 1132(a)(2) or (a)(3) of ERISA. See Coriale v. Xerox Corp., et al., Case No. 11-1724-cv (2d Cir. Aug. 3, 2012).

In Coriale, plaintiffs filed suit on behalf of a putative class composed of former employees of Xerox, each of whom participated in one of three health plans governed by ERISA the Xerox Retiree Flex Health Care Plan (“Flex Plan”), the Xerox Medical Care Plan for Retired Employees (“Old Plan”), and the Xerox Retiree Health Care Plan (“New Plan”). The plaintiffs claimed that the defendants repeatedly promised putative class members “lifetime health care benefits” under these plans but then “reneged on that promise” as to members of the Flex Plan, in violation of 29 U.S.C. § 1132(a)(1)(B). Op. at p. 3. Specifically, plaintiffs alleged that the defendants promised lifetime health care benefits in documents dating back to at least the 1950s. Specifically, they pointed to a 1980 Value Added Statement, a 1984 Guidebook, and a 1994 Retirement Counseling Handbook.

The Western District of New York (Larimer, J.) dismissed plaintiffs’ claims on April 7, 2011 pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief could be granted. See Coriale v. Xerox Corp., 775 F. Supp. 2d 583 (W.D. N.Y. 2011). After briefing and oral argument, a Second Circuit panel of Judges Sack, Raggi and Lohier affirmed in a Summary Order.

Citing Bouboulis v. Transp. Workers Union of Am., 442 F.3d 55, 60 (2d Cir. 2006) the Court first noted that in order to succeed on a claim under Section 1132(a)(1)(B) of ERISA for denial of benefits, a plaintiff must demonstrate the existence of “specific written language” contained in a plan document “that is reasonably susceptible to interpretation as a promise to vest the benefits.” Op. at p. 3. The Court reasoned that the plaintiffs here failed to allege that documents containing the relevant promise constituted “plan documents” that postdated the implementation of the Flex Plan, which did not exist before 1995. Further, the Court noted that none of the language contained in the plan documents of the Flex Plan could “reasonably be interpreted to create a promise of vested lifetime benefits.” Op. at 4. Furthermore, even if the plan document had contained such a promise, the plan’s reservation of rights clause (which reserved to Xerox the right to amend, suspend, or terminate the plan “at any time for any reason”) would make any such promise unenforceable. Id.

With respect to plaintiffs’ alternative claims for breach of fiduciary duty under 29 U.S.C. 1132(a)(2) and (a)(3), the Court held that plaintiffs failed to allege that any specific participants in the Flex Plan (as opposed to the Old Plan or the New Plan) were promised any such benefits, or that Xerox ever made any assurances of lifetime benefits that accompanied or postdated the Flex Plan. Thus, the Court affirmed dismissal of those fiduciary breach claims as well.

Coriale instructs plaintiffs that bald allegations that plan fiduciaries made a “promise” and “reneged” on a promise – without more – is woefully insufficient to state a claim for benefits under 29 U.S.C. 1132(a)(1)(B). Plaintiffs must alleged specific facts, and point to “specific written language” in the plan documents, in order to plausibly state a claim under Rule 12(b)(6).