Opinion
No. 04 C 3822.
October 21, 2004
MEMORANDUM OPINION AND ORDER
On June 4, 2004, Plaintiff James J. Strenk filed suit alleging that Defendant Tyco Deferred Compensation Plan ("Plan"), pursuant to a decision made by Defendant Administrative Committee of the Tyco Deferred Compensation Plan ("Committee"), wrongfully refused to waive penalties for early withdrawal under the deferred compensation plan's "unforeseeable financial emergency" provision. The deferred compensation plan is administered by the Committee and is sponsored by Defendants TME Management Corp. ("TME"), Tyco International Ltd. ("Tyco"), and Allied Tube Conduit Corp. ("Allied"). In this suit, Plaintiff is seeking the money withheld from his account balance to pay the early withdrawal penalties plus any resulting interest.
The Committee, TME, Tyco, and Allied (the "non-Plan Defendants") have moved to dismiss all counts of the Complaint against them arguing that the Plan is the only permissible defendant under § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"). See 29 U.S.C. § 1132(a)(1)(B). The Seventh Circuit has repeatedly held that "ERISA permits suits to recover benefits only against the Plan as an entity." Neuma, Inc. v. AMP, Inc., 259 F.3d 864, 872 n. 4 (7th Cir. 2001) (quoting Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996); See Also Mein v. Carus Corp., 241 F.3d 581 (7th Cir. 2001); Garratt v. Knowles, 245 F.3d 941, 949 (7th Cir. 2001). Although this rule is generally enforced, courts have made exceptions in cases where the plaintiff is seeking equitable relief, the employer is alleged to be the plan administrator and agent for service purposes, and the employer and the plan are closely intertwined. Penrose v. Hartford Life Accident Ins. Co., 2003 U.S. Dist. LEXIS 13497 at *9 (N.D. Ill. Aug. 4, 2003).
Only the exception made for an "intertwined" non-plan defendant is applicable here. The strongest case for naming a non-plan defendant exists for the Committee, which is the body responsible for administering the deferred compensation plan. Under the plan, the Committee has the authority to resolve and did actually resolve Plaintiff's questions concerning interpretation of the deferred compensation plan. See P. Ex. A, § 12.1. The Committee is also authorized to make any payments directed by court order in which the Plan or the Committee has been named as a party. See P. Ex. A. § 16.41. Since the Committee has been actively involved with the decision making processes within the deferred compensation plan, I find it has become adequately intertwined with the Plan to justify naming the Committee as a defendant in this case. See Mein, 241 F.3d at 585; Penrose, 2003 U.S. Dist LEXIS 13497 at *15.
The case for naming Plaintiff's former employer, Allied, as a defendant is minimal at best. Plaintiff does not allege that Allied was substantively involved with the deferred compensation plan's daily administration and decision making processes. Plaintiff alleges only that Allied withheld compensation from his paychecks. This sort of minimal administrative involvement with the deferred compensation plan does not create grounds for naming Allied as a defendant. Equally weak is the argument for naming Tyco and TME as defendants. Tyco and TME merely provide the funds for payment in accordance with decisions made by the Plan and the Committee. Tyco's and TME's responsibilities are not such that they substantively involve either entity with the Plan or the Committee. Furthermore, it does not appear from the pleadings that a direct action against Tyco and TME would be necessary since there is no indication that the Plan is underfunded or that the Plan will refuse to pay a judgment properly awarded by this court.
For these reasons, the non-Plan Defendants' Motion to Dismiss is GRANTED as to Allied, Tyco and TME and is DENIED as to the Committee.