Stanley v. George Washington University ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MELISSA STANLEY,
individually and as representative of a class
of participants and beneficiaries on behalf
of The George Washington University
Retirement Plan for Faculty and Staff and
The George Washington University
Supplemental Retirement Plan,
Plaintiff,
v. Civil Action No. 18-878 (JDB)
THE GEORGE WASHINGTON
UNIVERSITY, et al.,
Defendants.
MEMORANDUM OPINION
Melissa Stanley brings this putative class action against her former employer, The George
Washington University, 1 alleging breaches of fiduciary duty in violation of the Employee
Retirement Income Security Act of 1974 (“ERISA”) §§ 502(a)(2), (a)(3) (codified at 29 U.S.C.
§§ 1132(a)(2), (a)(3)). Pending before the Court is [21] GW’s motion to dismiss. GW argues that
Stanley lacks standing to sue because she signed a general release of claims against the University.
Stanley responds that her claims fall into an express exclusion in the general release preserving
claims for vested benefits under her retirement plan. For the reasons stated below, the Court finds
that Stanley has released her fiduciary breach claims against GW under the terms of the release.
Because this Court lacks jurisdiction over released claims, the Court will grant GW’s motion and
dismiss the complaint.
Stanley brings this suit against the University, its board of trustees, and its University Plan Administration
1
Committee (collectively “GW” or “the University”).
1
BACKGROUND
I. Statutory Background
ERISA is a “comprehensive and reticulated” statute aimed at protecting participants in
private employee retirement plans. Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359,
361 (1980); see 29 U.S.C. § 1001(a)–(b). Today, most private retirement plans are “‘defined
contribution plan[s]’ or ‘individual account plan[s].’” See LaRue v. DeWolff, Boberg & Assocs.,
Inc., 552 U.S. 248, 250 n.1 (2008) (citation omitted). Such plans “promise[] the participant the
value of an individual account at retirement, which is largely a function of the amounts contributed
to that account and the investment performance of those contributions.” Id.
ERISA authorizes participants to bring various “types of civil actions” to protect their
interests. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 139 (1985); see ERISA § 502(a), 29
U.S.C. § 1132(a). Some of those actions “focus upon specific areas,” or particular types of ERISA
violations, while others are “‘catchalls,’ providing ‘appropriate equitable relief’ for . . . injuries
caused by violations that § 502 does not elsewhere adequately remedy.” Varity Corp. v. Howe,
516 U.S. 489, 512 (1996). Two “specific” and one “catchall” action are relevant to Stanley’s
claims.
The first specific type of action, brought pursuant to ERISA § 502(a)(1)(B), empowers a
participant to “recover benefits due to [her] under the terms of [her employee benefit] plan, to
enforce [her] rights under the terms of the plan, or to clarify [her] rights to future benefits under
the terms of the plan.” ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). Section 502(a)(1)(B)
suits, or plan-based suits, provide a remedy “with respect to the interpretation of plan documents
and the payments of claims,” Varity, 516 U.S. at 512, and may be used “to recover accrued
benefits” due under the plan, Russell, 473 U.S. at 147. Most circuit courts, including the D.C.
2
Circuit, have held “that a participant [is required to] exhaust . . . administrative remedies” internal
to the plan before making a plan-based claim under § 502(a)(1)(B). LaRue, 552 U.S. at 258–59
(Roberts, C. J., concurring); see Commc’ns Workers of Am. v. AT&T, 40 F.3d 426, 431 (D.C.
Cir. 1994) (“[P]laintiffs seeking a determination pursuant to ERISA of rights under their pension
plans ‘must . . . exhaust available administrative remedies . . . before they may bring suit . . . .’”).
“The exhaustion doctrine effectuates Congress’s purpose in requiring that benefit plans provide
for administrative review procedures by ensuring” that participants use “internal remedial
procedures” when making claims for benefits under their plans. Stephens v. Pension Benefit Guar.
Corp., 755 F.3d 959, 964–65 (D.C. Cir. 2014); ERISA § 503, 29 U.S.C. § 1133.
The second specific type of action, set forth in ERISA § 502(a)(2), permits participants and
others to sue plan administrators for violations of fiduciary duties set forth in ERISA § 409(a), 29
U.S.C. § 1109(a). Section 409(a), in turn, “impose[s] [duties] on fiduciaries . . . ‘relat[ing] to the
proper management, administration, and investment of fund assets,’ with an eye toward ensuring
that ‘the benefits authorized by the plan’ are ultimately paid to participants and beneficiaries.”
LaRue, 552 U.S. at 253 (quoting Russell, 473 U.S. at 142). Fiduciaries that have breached their
duties in violation of section 409(a) are “liable to make good to such plan any losses to the plan
resulting from each such breach.” ERISA § 409(a). Because section 502(a)(2) suits, or statute-
based suits, are brought on behalf of a pension plan, they “do[] not provide a remedy for individual
injuries distinct from plan injuries.” LaRue, 552 U.S. at 256. Nevertheless, because a fiduciary
breach may affect only some subset of participants in a defined contribution plan, an individual
plan participant may sue on behalf of the plan to “recover[]for fiduciary breaches that impair[ed]
the value of plan assets in [her] individual account.” Id.
3
The “catchall” provision, section 502(a)(3), permits suits to “enjoin any act or practice
which violates any provision of this subchapter [of ERISA] or the terms of the plan, or . . . to obtain
other appropriate equitable relief . . . to redress such violations.” ERISA § 502(a)(3), 29 U.S.C.
§ 1132(a)(3). “Appropriate” equitable relief is “relief that [was traditionally] available in equity,”
Mertens v. Hewitt Assocs., 508 U.S. 248, 256 (1993) (emphasis omitted), and that is not otherwise
available through a section 502(a)(1)(B) suit for “benefits due . . . under the terms of the plan,”
Varity, 516 U.S. at 515 (alteration omitted); see Russell, 473 U.S. at 144; Boster v. Reliance
Standard Life Ins. Co., 959 F. Supp. 2d 9, 30 (D.D.C. 2013) (“[C]ourts in this Circuit have
generally followed the view of the majority of circuits that a breach of fiduciary [duty] claim under
§ [502](a)(3) cannot stand when a plaintiff has an adequate remedy for her injuries under
§ [502](a)(1)(B).” (citation omitted)).
Suits under ERISA sections 502(a)(2) and (a)(3) are meaningfully distinct from those
brought via section 502(a)(1)(B). Section 502(a)(2) and (a)(3) claims are generally brought in
conjunction “to enforce statutory ERISA rights,” whereas section 502(a)(1)(B) claims are brought
to enforce “contractual rights created by the terms of a benefit plan.” Stephens, 755 F.3d at 965
(second emphasis added); see id. at 964–67 (distinguishing ERISA claims “alleging a statutory
violation” from “claims for benefits” under “the terms of [employee] benefit plans”); see also Zipf
v. AT&T, 799 F.2d 889, 891–94 (3d Cir. 1986). And as the D.C. Circuit has held, participants
must administratively exhaust claims asserting contractual rights, but not statutory rights, 2 before
filing suit in federal court. Moreover, while section 502(a)(2) suits are brought in a representative
2
Importantly, “[t]his exception to the exhaustion requirement does not embrace plan-based claims ‘artfully
dressed in statutory clothing,’ such as where a plaintiff seeks to avoid the exhaustion requirement by recharacterizing
a claim for benefits as a claim for breach of fiduciary duty.” Stephens, 755 F.3d at 966 n.7 (citation omitted).
4
capacity, so that recovery runs to the plan, section 502(a)(1)(B) remedies “run[] directly to the
injured [participant or] beneficiary.” Varity, 516 U.S. at 512.
Because of these critical distinctions, the Supreme Court has cautioned that claims properly
brought under section 502(a)(1)(B) may not necessarily also be brought under sections 502(a)(2)
and (a)(3). See Varity, 516 U.S. at 515 (noting that section 502(a)(1)(B) claims are “outside the
framework of [section 502(a)(2) claims]” and that section 502(a)(3) covers only injuries that
“§ 502 does not elsewhere . . . remedy”); see also LaRue, 552 U.S. at 258–59 (Roberts, C.J.,
concurring) (“The significance of the distinction between a § 502(a)(1)(B) claim and one under
§ 502(a)(2) is not merely a matter of picking the right provision to cite in the complaint. Allowing
a § 502(a)(1)(B) action to be recast as one under § 501(a)(2) might permit plaintiffs to circumvent
safeguards for plan administrators that have developed under § 502(a)(1)(B).”).
With these background principles in mind, the Court turns to the relevant facts and
procedural history.
II. Facts and Procedural History 3
Stanley is a former GW employee who participates in two of the University’s ERISA-
regulated retirement plans—The George Washington University Retirement Plan for Faculty and
Staff and The George Washington University Supplemental Retirement Plan (collectively, the
“Plans”). Compl. [ECF No. 1] ¶¶ 17, 29. The Plans are “defined contribution, individual account
. . . employee benefit pension plans.” Id. ¶¶ 17, 21. As the designated plan administrator, GW is
the ERISA fiduciary responsible for selecting and managing the investment options provided to
participants under the Plans. Id. ¶¶ 31, 34; see 29 U.S.C. § 1002(16)(A)(i). Stanley currently has
a “vested account balance in the [Plans].” Compl. ¶ 29.
The facts are drawn from plaintiff’s complaint and assumed to be true for purposes of the motion to dismiss.
3
See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
5
In 2016, for reasons unrelated to the present suit, Stanley entered a confidential settlement
agreement with the University in return for valuable consideration. See generally Confidential
Settlement Agreement & General Release (“Agreement”) [ECF No. 24]. 4 The agreement contains
a “General Release” clause that provides, in relevant part, as follows:
Ms. Stanley, on behalf of herself and anyone who might claim through her, hereby
forever releases . . . the George Washington University . . . from any and all claims
. . . of any nature whatsoever . . . (collectively, “Claims”), which Ms. Stanley has
or may have or which may hereafter accrue or which may be asserted by another
on her behalf, arising prior to her execution of this Agreement. This release
includes, without limitation . . . Claims for violation of any federal . . . statute . . .
including but not limited to Title VII of the Civil Rights Act of 1964, the Americans
with Disabilities Act, the Age Discrimination in Employment Act, the Family
Medical Leave Act, the D.C. Family and Medical Leave Act, the Genetic
Information Nondiscrimination Act of 2008, and the D.C. Human Rights Act. It is
expressly understood that this is a GENERAL RELEASE, and is intended to release
claims to the fullest extent permitted by law. Excluded from this General Release
is an action by Ms. Stanley to enforce the terms of this Agreement, claims for vested
benefits under employee benefit plans, claims that arise after Ms. Stanley signs this
Agreement, any right Ms. Stanley has to file a charge with a government agency
(although she releases and waives, and agrees not to seek or accept, any monetary
payment or other individual relief in connection with any such charge) and any
other claim which cannot be released by private agreement as a matter of law.
Id. at 3–4. Stanley does not dispute that she voluntarily executed, and is subject to, the
Agreement’s terms, including the General Release.
Approximately two years after entering the Agreement, Stanley brought this putative class
action against GW under ERISA § 502(a)(2) and (a)(3). Compl. at 1–2, 5. The complaint alleges
that GW breached its fiduciary duties to participants in four ways. Count I alleges that GW caused
participants to pay unreasonable recordkeeping and administrative fees. Id. ¶¶ 208–14. Count II
4
Courts considering the effect of releases at the motion to dismiss stage have interpreted them as asserting a
lack of subject matter jurisdiction under Federal Rules of Civil Procedure 12(b)(1). See Jacobs, 285 F. Supp. 3d at
318–19. Because “in deciding a Rule 12(b)(1) motion” the Court is “not limited to the allegations in the complaint,
but may also consider material outside of the pleadings” to determine its jurisdiction, the Court is permitted to consider
the Agreement. Alliance for Democracy v. Fed. Election Comm’n, 362 F. Supp. 2d 138, 142 (D.D.C. 2005). Although
the Agreement is confidential and therefore filed under seal, the parties have reproduced in public filings the relevant
contract language quoted herein.
6
alleges that GW imprudently offered unreasonably expensive and underperforming investment
options. Id. ¶¶ 215–25. Count III alleges that GW imprudently obtained services from investment
funds that required the University to offer participants the funds’ proprietary investment products.
Id. ¶¶ 226–36. And Count IV alleges that GW improperly retained multiple recordkeepers to
administer the Plans when prudent fiduciaries would have used only one recordkeeper. Id.
¶¶ 237–44. 5 For these alleged ERISA violations, Stanley asks the court inter alia to find GW liable
for breaching its fiduciary duties, to order GW to restore to the Plans lost benefits resulting from
each breach, to remove those who breached their duties and enjoin them from future ERISA
violations, to reform the Plans to include only prudent investments, and to certify a class action
against GW with Stanley as the named class representative. See id. at 71–72.
GW has moved to dismiss, arguing that Stanley lacks standing because she has released
her claims under the terms of the settlement agreement. See Defs.’ Mot. to Dismiss [ECF No. 20];
Statement of P. & A. in Supp. of Defs.’ Mot. to Dismiss Pl.’s Compl. (“Defs.’ Mot.”) [ECF No.
21-1] at 14–15. 6 In opposition, Stanley contends that her claims fall into the exclusion in the
release preserving “claims for vested benefits under employee benefit plans.” Mem. of P. & A. in
Opp’n to Defs.’ Mot. (“Pl.’s Opp’n”) [ECF No. 26] at 2, 14–15. The Court ordered both parties
to submit supplemental briefing on this and other standing questions. See March 29, 2019, Mem.
Op. & Order. The motion to dismiss is now fully briefed and ripe for consideration.
5
Stanley does not contend that any of these claims arose after the Agreement was signed.
6
The Court previously denied without prejudice GW’s motion to dismiss pending submission of
supplemental briefing on standing. See March 29, 2019, Mem. Op. & Order [ECF No. 31] at 8. Having received and
considered the supplemental briefing, the Court construes GW’s motion to dismiss as resubmitted on the grounds
described in both its original and supplemental briefing.
7
LEGAL STANDARD
Courts consider motions for lack of subject-matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1). See Am. Freedom Law Ctr. v. Obama, 821 F.3d 44, 48 (D.C. Cir. 2016).
Under Rule 12(b)(1), the party seeking to invoke the jurisdiction of a federal court—here,
Stanley—bears the burden of establishing that the court has jurisdiction. See US Ecology, Inc. v.
U.S. Dep’t of Interior, 231 F.3d 20, 24 (D.C. Cir. 2000). In adjudicating the motion to dismiss,
the Court must “take as true all well-pled factual allegations within [the] complaint,” but must
“disregard any legal conclusions, legal contentions couched as factual allegations, and unsupported
factual allegations within the complaint.” Gulf Coast Mar. Supply, Inc. v. United States, 867 F.3d
123, 128 (D.C. Cir. 2017).
ANALYSIS
The Court lacks subject matter jurisdiction over released claims. See Aulenback, Inc. v.
Fed. Highway Admin., 103 F.3d 156, 161 (D.C. Cir. 1997) (explaining that “[c]omplete
settlement” of claims “moots an action,” thereby divesting plaintiffs of standing to sue); Jacobs v.
Not-For-Profit Hosp. Corp., 285 F. Supp. 3d 316, 318 (D.D.C. 2018) (“[A] valid settlement
agreement generally moots a legal action between the parties to the agreement to the extent that
the agreement covers the subject matter of the action.”). Before reaching the merits, the Court
must therefore turn to the scope of the release.
“‘[A] release is a form of contract, and the rules of contract construction govern its
interpretation.’” Am. Civ. Constr., LLC v. Fort Myer Constr. Corp., 246 F. Supp. 3d 309, 321
(D.D.C. 2017) (quoting GLM P’ship v. Hartford Cas. Ins. Co., 753 A.2d 995, 998 (D.C. 2000)).7
7
The Agreement provides, and the parties appear to agree, that District of Columbia law governs
interpretation of the release. See Agreement at 4; Pl.’s Opp’n at 12; Suppl. Br. in Supp. of Defs.’ Mot. to Dismiss
(“Defs.’ Suppl. Br.”) [ECF No. 33] at 1. Several circuits have held, however, that federal common law applies when
courts interpret a settlement agreement releasing ERISA claims. See, e.g., Chaplin v. NationsCredit Corp., 307 F.3d
8
“The first step in interpreting a contract is to determine what a reasonable person in the position
of the parties would have thought the disputed language meant.” Debnam v. Crane Co., 976 A.2d
193, 197 (D.C. 2009). “[I]n determining what a reasonable person in the position of the parties
intended, . . . the reasonable person is: (1) presumed to know the circumstances surrounding the
making of the contract; and (2) bound by the usages of the term which either party knows or has
reason to know and the course of conduct of the parties.” Fairfax Vill. Condo. VIII Unit Owners’
Ass’n v. Fairfax Vill. Cmty. Ass’n, Inc., 726 A.2d 675, 677 n.4 (D.C. 1999). “Where the language
[of a release] is clear and unambiguous, its plain language is relied upon in determining the parties’
intention,” and “the effect of the release can be determined as a matter of law.” GLM P’ship, 753
A.2d at 998. However, “[i]f there is more than one interpretation that a reasonable person could
ascribe to the contract, while viewing the contract in context . . . the contract is ambiguous.” Nextel
Spectrum Acquisition Corp. v. Hispanic Info. & Telecomm. Network, Inc., 503 F. Supp. 2d 334,
338 (D.D.C. 2007). “Ambiguities will not be sought out,” however, and “no ambiguity exists . . .
if the language [of the release] is given the meaning of common understanding.” Med. Serv. of
Dist. of Col. v. Llewellyn, 208 A.2d 734, 736 (D.C. 1965).
The parties’ dispute hinges on the following language in the General Release:
This release includes, without limitation . . . Claims for violation of any federal . . .
statute . . . including but not limited to Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Age Discrimination in Employment Act, the
Family Medical Leave Act, the D.C. Family and Medical Leave Act, the Genetic
Information Nondiscrimination Act of 2008, and the D.C. Human Rights Act. It is
expressly understood that this is a GENERAL RELEASE, and is intended to release
368, 372, 376 (5th Cir. 2002); Morais v. Cent. Beverage Corp. Union Emps.’ Suppl. Ret. Plan, 167 F.3d 709, 712 (1st
Cir. 1999); McClellan v. Midwest Machining, Inc., 900 F.3d 297, 302 (6th Cir. 2018). The D.C. Circuit has not
decided the question, and courts in this district have relied on state law when interpreting the release of ERISA claims.
See, e.g., Russell v. Harman Int’l Indus., Inc., 945 F. Supp. 2d 68, 77 (D.D.C. 2013), aff’d, 773 F.3d 253 (D.C. Cir.
2014). The Court need not decide the question here. “The relevant federal substantive law” includes “common-sense
canons of contract interpretation” that are “derived from state law.” Morais, 167 F.3d at 712 (citations omitted).
Because this case turns on general contract principles that equally apply under District of Columbia and federal
common law, the Court finds that it would reach the same conclusion irrespective of which law governs. The Court
therefore draws from District of Columbia law, as the parties have, to set forth the applicable general principles.
9
claims to the fullest extent permitted by law. Excluded from this General Release
[are] . . . claims for vested benefits under employee benefit plans . . . .
Agreement at 4. GW argues that the broad language releasing all claims alleging violations of
“any federal . . . statute” plainly covers Stanley’s fiduciary breach claims under ERISA sections
502(a)(2) and (a)(3). See Defs.’ Mot. at 16. And the exclusion in the release preserving “claims
for vested benefits under employee benefit plans” does not apply, GW says, because that language
refers to section 502(a)(1)(B) claims for vested benefits arising under the terms of Stanley’s
ERISA-governed plans—claims that Stanley concedes she does not bring here. See id.; see also
Pl.’s Opp’n at 15. Stanley responds first that the clause generally releasing federal claims does
not cover ERISA claims because it does not expressly mention ERISA. Pl.’s Opp’n at 13.
“Moreover,” Stanley continues, the carveout for “claims for vested benefits” plainly preserves
fiduciary breach claims brought under ERISA sections 502(a)(2) and (a)(3). Id.; see Pl.’s Suppl.
Mem. of P. & A. Regarding “Vested Benefits” and Standing (“Pl.’s Suppl. Br.”) [ECF No. 32] at
5–6.
The Court finds that Stanley has released her claims under the Agreement and thus lacks
standing to sue. As an initial matter, Stanley’s ERISA claims plainly fall within the language
releasing “any and all claims” “for violation of any federal . . . statute.” Agreement at 4 (emphases
added). ERISA is, of course, a federal statute. And, as noted above, Stanley here brings actions
under ERISA sections 502(a)(2) and (a)(3) alleging various violations of the duties set forth in
ERISA § 409(a). See Compl. at 1, 4–5. Stanley’s rejoinder—that the release lists numerous
federal statutes but does not include ERISA—is unpersuasive. The Agreement expressly releases
“all” claims for violations of federal statutes “including but not limited to” violations of the listed
statutes. Agreement at 4 (emphasis added). And in the very next clause, the release goes on to
say that “[i]t is expressly understood that this is a GENERAL RELEASE, and is intended to release
10
claims to the fullest extent permitted by law.” Id. (emphasis added). “[T]he law is clear that a
broad and unambiguous release,” such as this one, “need not list every conceivable cause of action
that might come within its terms.” Mwabira-Simera v. Sodexho Marriot Mgmt. Servs., No.
Civ.A.04-0538 JDB, 2005 WL 1541041, at *2 (D.D.C. June 30, 2005), aff’d, 204 F. App’x 902
(D.C. Cir. 2006) (citing cases); see also, e.g., Chaplin, 307 F.3d at 373 (“[A] general release of
‘any and all’ claims applies to all possible causes of action, unless a statute specifically and
expressly requires a release to mention the statute for the release to bar a cause of action under the
statute. ERISA contains no such requirements.”); Fair v. Int’l Flavors & Fragrances, Inc., 905
F.2d 1114, 1117 (7th Cir. 1990) (holding that general release of “any claim” covered all ERISA
claims); Schumacher v. AK Steel Corp. Ret. Accumulation Pension Plan, No. 1:09-cv-794, 2011
WL 13130831, at *3 (S.D. Ohio June 27, 2011) (“[A]s a general rule, a release need not expressly
refer to the ERISA statute in order to be enforced against ERISA claims.”). Hence, the Court
rejects Stanley’s contention that the Agreement is distinguishable, in any relevant sense, from one
that expressly released all violations of ERISA.
Because the language releasing all federal claims unambiguously covers Stanley’s ERISA
claims, “[o]ne thing is clear: unless . . . [the exclusion] set forth in the release applies to [her claims]
. . . then the language barring claims that arise under ERISA disposes of the present case.” Howell
v. Motorola, 633 F.3d 552, 559 (7th Cir. 2011). As noted above, Stanley reads the exclusion as
preserving section 502(a)(2) claims alleging a broad array of fiduciary misconduct, including
offering underperforming investment options, levying unreasonable recordkeeping fees, and other
purportedly imprudent choices. See Compl. at 4–5. She also reads the exclusion to permit
equitable relief under section 502(a)(3) in connection with those alleged fiduciary breaches—
11
including the restoration of all losses to the Plans, removing fiduciaries found to have breached
their duties, and other equitable remedies. Id. at 71–72.
The exclusion cannot be read so expansively. By its terms, the release carves out only
claims for benefits “under employee benefit plans.” Agreement at 4 (emphasis added). “[T]he
common legal usage of the term ‘under’ . . . [is] pursuant to, in accordance with, or as authorized
or provided by.” Davis ex rel. LaShonda D. v. Monroe Cty. Bd. of Educ., 526 U.S. 629, 659–60
(1999); see also id. (noting that cases have defined the term “under” as “indicating subjection,
guidance or control, and meaning ‘by authority of,’” or “‘by and through the authority of’”
(quoting 43 Words and Phrases 149–152 (1969)). Here, then, the phrase “claims . . . under
employee benefit plans” refers to claims brought pursuant to, or by the authority of, the
participant’s employee benefit plan.
Understood in the context of ERISA, 8 such claims plainly refer to contractual, or “plan-
based,” claims of the kind that typically are brought pursuant to ERISA § 502(a)(1)(B). 9 See
Stephens, 755 F.3d at 964–65, 67 (distinguishing “plan-based” claims brought under “the
contractual terms of the [employee benefit] plan” from “statutory claim[s]” arising under “the
provisions of ERISA and its regulations”); Zipf, 799 F.2d at 891–94 (referring to contractual claim
8
Although the Court’s analysis of the exclusion is one of contract interpretation, not statutory interpretation,
the parties’ plain-meaning arguments concerning the exclusion are predicated on how the term “claim for vested
benefits under employee benefit plans” is commonly understood and used in the context of ERISA. See Pl.’s Suppl.
Br. at 3 (arguing that “ERISA case law supports Stanley’s position that her claim[s]” fall within the exclusion); Defs.’
Suppl. Br. at 2 (arguing that the defendants’ proffered interpretation “aligns with a significant body of [ERISA] case
law”). As with other courts that have interpreted the scope of a similar exclusion in a general release, then, the Court
will look in part to that broader context. See, e.g., Halldorson v. Wilmington Tr. Ret. & Institutional Servs. Co., 182
F. Supp. 3d 531, 542 (E.D. Va. 2016) (interpreting scope of carve-out in general release in light of ERISA case law
and statutory definitions); see also Fairfax Village, 726 A.2d at 677 n.4 (in determining what a “reasonable person”
would have intended, courts must take into account “the circumstances surrounding” the contract and “the usages of
the term” the parties know or have reason to know).
9
Of course, a plan-based claim might not be brought under section 502(a)(1)(B) were a participant to “artfully
dress[]” a “plan-based claim[]” as one brought under ERISA section 502(a)(2). Stephens, 755 F.3d at 966 n.7 (citation
omitted). Here, however, Stanley has expressly conceded she is not bringing a contractual, or plan-based, claim under
any statutory heading. See Pl.’s Opp’n at 15; Pl.’s Suppl. Br. at 5
12
as one for “benefits under the [employee benefit] plan” (emphasis added)). Indeed, in at least two
cases involving similar general releases, a carve-out for claims “under the plan” was interpreted
as saving contractual, but not fiduciary breach, claims. See In re SunTrust Banks, Inc. ERISA
Litig., No. 1:08-CV-03384-RWS, 2016 WL 4377131, at *2 (N.D. Ga. Aug. 17, 2016) (dismissing
“claims under § 502(a)(2)” because “claims for vested benefits due under the plan can only be
brought under § 502(a)(1)(B)” (emphasis added)); Stargel v. SunTrust Banks, Inc., 968 F. Supp.
2d 1215, 1222–23 (N.D. Ga. 2013), vacated on other grounds, 791 F.3d 1309 (11th Cir. 2015)
(“The carve out for ‘Claims related to . . . vested benefits earned under any . . . employee benefit
plan’ merely preserves [plaintiff’s] right to the benefits she was entitled to under the terms of
[defendant’s] employee benefit plans at the time she signed the Release . . . [and] cannot reasonably
be read to preserve [a] right to pursue breach of fiduciary duty claims under § 502(a)(2) and (a)(3).”
(emphasis added)).
Confirming this reading, the language “under employee benefit plans” in the carve-out
closely parallels ERISA section 502(a)(1)(B), which provides that participants may bring
contractual claims for “benefits . . . under the terms of [their employee benefit] plan[s].” ERISA
§ 502(a)(1)(B) (emphasis added). The carve-out also mirrors ERISA’s provision setting forth
claims procedures for contractual benefits claims. See ERISA § 503, 29 U.S.C. § 1133 (requiring
plans to notify participants “whose claim for benefits under the [employee benefit] plan has been
denied.” (emphasis added)). Moreover, when referring to contractual claims brought pursuant to
section 502(a)(1)(B), courts generally refer to claims brought “under the plan,” or some similar
variation thereof. See, e.g., Russell, 473 U.S. at 144 (describing section 502(a)(1)(B) as “the
statutory provision explicitly authorizing a beneficiary to bring an action to enforce his rights under
the plan” (emphasis added)); Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 108 (1989)
13
(noting that § 502(a)(1)(B) “allows a suit to recover benefits due under the plan.” (emphasis
added)). 10
Here, of course, Stanley has expressly conceded that she does not bring claims for benefits
under her employee benefit plans. See Pl.’s Opp’n at 15 (explaining that “Stanley is not
‘challenging denials of benefits based on plan interpretations,’” but instead is alleging that “the
Plan fiduciaries breached their duties . . . and so are liable [to the Plan] under § [409]” of ERISA).
Instead, as she puts it, her “claims are statutory, and seek to enforce ERISA’s substantive
guarantees.” Pl.’s Suppl. Br. at 5. Because Stanley’s fiduciary breach claims concededly arise
under rights conferred by ERISA, not “under [her] employee benefit plans,” Agreement at 4, they
fall outside the plain language of the exclusion in the General Release. 11
This construction also best comports with the principle that “a contract [must be] construed
as a whole, giving effect to all of the contract’s provisions.” Fudali v. Pivotal Corp., 623 F. Supp.
2d 1, 9 (D.D.C. 2007) (citation omitted); see also Abdelrhman v. Ackerman, 76 A.3d 883, 891
(D.C. 2013). As the Court already has observed, the Agreement contains sweeping language that
releases “all” violations of “any” federal statute—followed by language stating that “[i]t is
expressly understood” that the General Release “is intended to release claims to the fullest extent
10
By contrast, claims under section 502(a)(2), like those Stanley brings here, are not described as claims
under, pursuant to, or as authorized by, employee benefit plans. Rather, such claims typically are described as
fiduciary breach claims brought on behalf of the plan and under ERISA. See, e.g., LaRue, 552 U.S. at 251 (explaining
that ERISA § 502(a)(2) “authorizes . . . plan participants . . . to bring actions on behalf of a plan to recover for violations
of the obligations defined in [ERISA] § 409(a).” (emphases added)); Wilcox v. Georgetown Univ., Civil Action No.
18-422 (RMC), 2019 WL 132281, at *7 (D.D.C. Jan. 8, 2019) (“Section § [502](a)(2) allows plan participants to sue
a fiduciary on behalf of the plan for ‘appropriate relief’ under [ERISA § 409].” (emphases added)).
11
The parties also dispute whether Stanley’s fiduciary breach claims may properly be characterized as claims
for “vested benefits,” as that term is used in the exclusion. Stanley says the answer is yes, contending that “the majority
of Circuit Courts . . . have held that ‘vested benefits’ include ERISA breach of fiduciary duty claims under
§ 502(a)(2).” Pl.’s Resp. to Defs.’ Suppl. Br. [ECF No. 35] at 3. GW disagrees, arguing that “many courts have held
. . . [that] a release exclusion for ‘vested benefits’ does not preserve breach of fiduciary duty claims like those Stanley
has sought to bring here.” Defs.’ Suppl. Br. at 4. The Court need not resolve that question here. Whether or not
claims for fiduciary breach may be characterized as claims for “vested benefits,” the Court finds that the language of
the release preserves only contractual claims for benefits brought under the terms of Stanley’s plan.
14
permitted by law.” Agreement at 4 (emphasis added). If the carve-out is read not only to preserve
claims under § 502(a)(1)(B), but also, as Stanley suggests, to preserve fiduciary breach claims
under §§ 502(a)(2) and (a)(3), then the exclusion essentially would preserve all ERISA claims. In
the absence of language clearly stating that intention, such a broad and open-ended interpretation
of the exclusion would be at odds with the language of the General Release considered as a whole.
Acknowledging this, Stanley urges the Court to resolve any tension between the release
language and an expansive reading of the exclusion in her favor, relying on the canon of
construction providing that “specific terms and exact terms are given greater weight than general
language.” Pl.’s Opp’n at 13 (quoting Wash. Auto. Co. v. 1828 L St. Assocs., 906 A.2d 869, 880
(D.C. 2006)). But that canon does not apply. The “rule of construction providing that specific
clauses prevail over general clauses presumes that the clauses stand irreconcilably in conflict.”
Ohio Power Co. v. Fed. Energy Regulatory Comm’n, 744 F.2d 162, 168 n.7 (D.C. Cir. 1984).
Where “both the specific and general provisions may be given reasonable effect,” however, “both
are to be retained.” Id. Here, there is no necessary conflict or ambiguity. Reading the general
provisions in the release as broadly releasing claims for violations of ERISA, and the exclusion as
carving out only contractual claims asserted pursuant to the relevant benefit plan, gives both
clauses reasonable effect. Stephens, 755 F.3d at 964–66.
Not only is that result supported both by the plain language of the agreement and the ERISA
case law, it also comports with common sense. As the D.C. Circuit explained in Stephens, before
participants may make contractual claims under their employee benefit plans, they must first
exhaust administrative procedures—a requirement that “reduces the number of frivolous lawsuits,
promotes the ‘consistent treatment of claims for benefits,’ provides a ‘nonadversarial method of
claims settlement,’ and ‘minimize[s] the cost of claims settlement.’” Id. at 965 (citation omitted)).
15
Statutory ERISA claims, by contrast, are costlier, open-ended, and may be brought directly in
federal court. See id. at 966. It is therefore no surprise that parties might draft language to preserve
the former but to release the latter.
Hence, the Court finds that Stanley’s claims fall within the general provisions in the
release, are not saved by the exclusion for benefits claims brought under employee benefit plans,
and are therefore waived.
CONCLUSION
For the foregoing reasons, the Court will grant GW’s motion and dismiss the complaint for
lack of subject matter jurisdiction. A separate order will issue on this date.
/s/
JOHN D. BATES
United States District Judge
Dated: July 15, 2019
16