Case 1:18-cv-04483-GHW-RWL Document 91 Filed 09/19/19 Page 1 of 34

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
CHRISTOPHER HUDSON,
Plaintiff,

Civ. Action No. 18-CV-4483-(GHW) (RWL)

v.
ORAL ARGUMENT REQUESTED
NATIONAL FOOTBALL LEAGUE
MANAGEMENT COUNCIL, et al.,
Defendants.

PLAINTIFF’S OBJECTIONS TO MAGISTRATE JUDGE’S REPORT AND
RECOMMENDATION

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TABLE OF CONTENTS
INTRODUCTION......................................................................................................................... 1
FACTUAL ALLEGATIONS ....................................................................................................... 1
ARGUMENT ................................................................................................................................. 6
I.

II.

III.

IV.

COUNT I STATES A TIMELY CLAIM UNDER ERISA § 102 ..................... 6
A.

The SPD Failed to Disclose a Prerequisite to the Receipt of Promised
Benefits ....................................................................................................... 7

B.

Count I is Not Barred by the Statute of Limitations ........................... 11

COUNT II ALLEGES VALID AND TIMELY BREACHES OF
FIDUCIARY DUTY UNDER ERISA § 404(a)(1)(A) & (B) ........................... 15
A.

Compliance with ERISA § 102 does not Exhaust ERISA Fiduciaries’
Disclosure Obligations under ERISA § 404.......................................... 16

B.

Count II Is Not Barred By The Statute Of Limitations In ERISA §
413............................................................................................................. 18

COUNT III PROPERLY ALLEGES A BREACH OF THE DUTY TO
MONITOR BY THE COUNCIL AND THE ASSOCIATION....................... 20
A.

The Council & Association Are Fiduciaries of the Plan ...................... 20

B.

The Report Misconstrues the Allegations of Count III ....................... 21

C.

Count III Adequately Alleges Breaches of the Duty to Monitor ........ 22

COUNT V ALLEGES A CLAIM UNDER ERISA § 410 AND ERISA§
404(A)(1)(A) ......................................................................................................... 23

CONCLUSION ........................................................................................................................... 25

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TABLE OF AUTHORITIES
Page(s)
Cases
In re Am. Int’l Group, Inc. ERISA Litig. II,
No. 08 CV 5722, 2011 WL 1226459 (S.D.N.Y. Mar. 31, 2011) .............................................23
Amara v. CIGNA Corp.,
534 F. Supp. 2d 288 (D. Conn. 2008) ........................................................................................9
Board of Trustees of the CWA/ITU Negotiated Pension Plan v. Weinstein,
107 F.3d 139 (2d Cir. 1997)...............................................................................................17, 18
Boyd v. Bert Bell/Pete Rozelle NFL Player Retirement Plan,
796 F. Supp. 2d 682 (D. Md. 2011) .......................................................................10, 11, 13, 14
Bryant v. Bert Bell/Pete Rozelle NFL Player Retirement Plan,
No. 12 CV 936 (N.D. Ga. March 23, 2015).............................................................................10
Burke v. Kodak Ret. Income Plan,
336 F.3d 103 (2d Cir. 2003).......................................................................................................7
Caputo v. Pfizer, Inc.,
267 F.3d 181 (2d Cir. 2001)...............................................................................................18, 19
Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care,
LLC,

433 F.3d 181 (2d Cir. 2005).....................................................................................................25
Chambless v. Masters, Mates & Pilots Pension Plan,
772 F.2d 1032 (2d Cir. 1985)...................................................................................................10
Charles Schwab Corp. v. Bank of Am. Corp.,
883 F.3d 68 (2d Cir. 2018).......................................................................................................12
Chesemore v. All. Holdings, Inc.,
886 F. Supp. 2d 1007 (W.D. Wis. 2012), aff'd, 829 F.3d 803 (7th Cir. 2016) ........................23
CIGNA Corp. v. Amara,
563 U.S. 421 (2011) .................................................................................................................15
Coyne & Delany Co. v. Selman,
98 F.3d 1457 (4th Cir. 1996) ...................................................................................................21
In re DeRogatis,
904 F.3d 174 (2d Cir. 2018).....................................................................................................16
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Devlin v. Empire Blue Cross & Blue Shield,
274 F.3d 76 (2d Cir. 2001).................................................................................................16, 17
Faircloth v. Lundy Packing Co.,
91 F.3d 648 (4th Cir. 1996) .....................................................................................................18
In re Fannie Mae 2008 ERISA Litig.,
No. 09 CV 1350, 2012 WL 5198463 (S.D.N.Y. Oct. 22, 2012)..............................................22
Frommert v. Conkright,
738 F.3d 522 (2d Cir. 2013).............................................................................................7, 9, 10
GMA Accessories, Inc. v. BOP, LLC,
765 F. Supp. 2d 457 (S.D.N.Y. 2011)......................................................................................14
Harris v. City of N.Y.,
186 F.3d 243 (2d Cir. 1999).....................................................................................................12
Harte v. Bethlehem Steel Corp.,
214 F.3d 446 (3d Cir. 2000).....................................................................................................11
Hutton v. Deutsche Bank AG,
541 F. Supp. 2d 1166 (D. Kan. 2008) ......................................................................................13
Int’l Ass'n of Machinists and Aerospace Workers, AFL-CIO, Dist. Lodge No. 157
by Roy v. Rome Cable Corp.,
810 F. Supp. 402 (N.D.N.Y. 1993) ..........................................................................................24
Johnson v. Couturier,
572 F.3d 1067 (9th Cir. 2009) .................................................................................................21
Jordan v. Fed. Express Corp.,
116 F.3d 1005 (3d Cir. 1997)...................................................................................................17
Kalda v. Sioux Valley Phys. Partners, Inc.,
481 F.3d 639 (8th Cir. 2007) ...................................................................................................17
Kenseth v. Dean Health Plan, Inc.,
610 F.3d 452 (7th Cir. 2010) ...................................................................................................17
King v. Blue Cross and Blue Shield of Ill.,
871 F.3d 730 (9th Cir. 2017) .............................................................................................11, 17
Koehler v. Aetna Health Inc.,
683 F.3d 182 (5th Cir. 2012) .........................................................................................9, 10, 11
Krohn v. Huron Mem’l Hosp.,
173 F.3d 542 (6th Cir. 1999) ...................................................................................................17
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LaScala v. Scrufari,
479 F.3d 213 (2d Cir. 2007).........................................................................................19, 20, 25
Layaou v. Xerox Corp.,
238 F.3d 205 (2d Cir. 2001).......................................................................................................9
Leigh v. Engle,
727 F.2d 113 (7th Cir. 1984) ...................................................................................................21
Liss v. Smith,
991 F. Supp. 278 (S.D.N.Y. 1998) ..........................................................................................22
Lutz v. Kaleida Health,
18 CV 01112, 2019 WL 3556935 (W.D.N.Y. Aug. 5, 2019) ..................................................21
In re M&T Bank Corp. ERISA Litig.,
2018 WL 4334807 ...................................................................................................................23
Martin v. Feilen,
965 F.2d 660 (8th Cir. 1992) ...................................................................................................21
McCarthy v. Dun & Bradstreet Corp,
482 F.3d 184 (2d Cir. 2007).......................................................................................................9
Merck & Co. v. Reynolds,
559 U.S. 633 (2010) .................................................................................................................19
Miles v. N.Y. State Teamsters Conf. Pension & Ret. Fund Emp. Pension Ben.
Plan,
698 F.2d 593 (2d Cir. 1983).........................................................................................11, 14, 15
In re Morgan Stanley ERISA Litig.,
696 F. Supp. 2d 345 (S.D.N.Y. 2009)................................................................................22, 23
N.Y. State Psychiatric Ass'n, Inc. v. UnitedHealth Grp.,
798 F.3d 125 (2d Cir. 2015).....................................................................................................17
Osberg v. Foot Locker, Inc.,
138 F. Supp. 3d 517 (S.D.N.Y. 2015)................................................................................10, 17
Osberg v. Foot Locker, Inc.,
862 F.3d 198 (2d Cir. 2017)...............................................................................................10, 14
Osberg v. Foot Locker, Inc.,
907 F. Supp. 2d 527 (S.D.N.Y. 2012)......................................................................................15
Osberg v. Foot Locker, Inc.,
555 Fed. App’x 77 (2d Cir. 2014)............................................................................................15
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In re Polaroid ERISA Litig.,
362 F. Supp. 2d 461 (S.D.N.Y. 2005)................................................................................21, 22
Romero v. Allstate Corp.,
404 F.3d 212 (3d Cir. 2005).....................................................................................................15
Sachdev v. Singh,
No. 15 CV 7114, 2016 WL 768861 (S.D.N.Y. Feb. 26, 2016) ...............................................12
Soto v. Barnitt,
No. 00 CV 3453, 2000 WL 1206603 (S.D.N.Y. Aug. 23, 2000) ............................................14
State of N.Y. v. Hendrickson Bros., Inc.,
840 F.2d 1065 (2d Cir. 1988)...................................................................................................19
Tibble v. Edison Int’l,
135 S. Ct. 1823 (2015) .............................................................................................................16
Trs. of the N.Y. City Dist. Council of Carpenters Pension Fund v. Lee,
No. 15 CV 8081, 2016 WL 1064616 (S.D.N.Y. Mar. 14, 2016) .............................................12
In re Unisys Corp. Retiree Med. Benefit “ERISA” Litig.,
57 F.3d 1255 (3d Cir. 1995).....................................................................................................16
United States v. Regan,
713 F. Supp. 629 (S.D.N.Y. 1989) ..........................................................................................13
Veera v. Ambac Plan Admin. Comm.,
769 F. Supp. 2d 223 (S.D.N.Y. 2011)......................................................................................23
Vellali v. Yale Univ.,
308 F. Supp. 3d 673 (D. Conn. 2018) ......................................................................................21
Weber v. Geffen Records,
63 F. Supp. 2d 458 (S.D.N.Y. 1999)........................................................................................13
Weiss v. CIGNA Healthcare, Inc.,
972 F. Supp. 748 (S.D.N.Y. 1997) ..........................................................................................17
Wilkins v. Mason Tenders District Council Pension Fund,
445 F.3d 572 (2d Cir. 2006)...................................................................................................8, 9
In re Worldcom, Inc.,
263 F. Supp 2d 745 (S.D.N.Y. 2003).......................................................................................22
In re Xerox Corp. ERISA Litig.,
483 F. Supp. 2d 206 (D. Conn. 2007) ......................................................................................23

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Statutes
ERISA § 3(16)(A), 29 U.S.C. § 1002(16)(A) ..................................................................................2
ERISA § 3(21)(A), 29 U.S.C. § 1002(21)(A) ..................................................................................3
ERISA § 102, 29 U.S.C. § 1022 ............................................................................................ passim
ERISA § 102(a), 29 U.S.C. § 1022(a) .............................................................................................1
ERISA § 104(b)(4), 29 U.S.C. § 1024(b)(4)..................................................................................18
ERISA § 402, 29 U.S.C. § 1102 ......................................................................................................3
ERISA § 402(a), 29 U.S.C. § 1102(a) .......................................................................................1, 20
ERISA § 402(a)(1), 29 U.S.C. § 1102(a)(1) ..................................................................................20
ERISA § 404, 29 U.S.C. § 1104 ..............................................................................................16, 17
ERISA § 404(a), 29 U.S.C. § 1104(a) .....................................................................................16, 17
ERISA § 404(a)(1) 29 U.S.C. § 1104(a)(1) .......................................................................16, 18, 25
ERISA § 404(a)(1)(A), 29 U.S.C. § 1104(a)(1)(A) .........................................................1, 4, 15, 16
ERISA § 404(a)(1)(B), 29 U.S.C. § 1104(a)(1)(B) .........................................................1, 4, 15, 16
ERISA § 405(a)(2), 29 U.S.C. § 1105(a)(2) ..................................................................................23
ERISA § 405(a)(3), 29 U.S.C. § 1105(a)(3) ..................................................................................23
ERISA § 410, 29 U.S.C. § 1110 ....................................................................................................23
ERISA § 413, 29 U.S.C. § 1113 ..................................................................................18, 23, 24, 25
ERISA § 413(1), 29 U.S.C. § 1113(1) ...........................................................................................19
ERISA § 413(1)(A), 29 U.S.C. § 1113(1)(A) ................................................................................19
ERISA § 413(2), 29 U.S.C. § 1113(2) ...........................................................................................25
ERISA § 502, 29 U.S.C. § 1132 ..............................................................................................14, 17
Other Authorities
29 C.F.R. § 2509.75-8 ....................................................................................................................21
29 C.F.R. § 2520.102–2(a)...........................................................................................................4, 8
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N.Y. C.P.L.R. § 213 .......................................................................................................................15
N.Y. C.P.L.R. § 213(1) ..................................................................................................................15
N.Y. C.P.L.R. § 214(2) ..................................................................................................................15
Restatement (Second) of Trusts § 173, comment d (1959) ...........................................................16

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Plaintiff respectfully objects to the Report & Recommendation of Magistrate Judge Robert
W. Lehrburger dated September 5, 2019 (ECF No. 90) (the “Report” or “R&R”) recommending
that Defendants’ motions to dismiss Counts I, II, III, and V be granted.
INTRODUCTION
Plaintiff Christopher Hudson, a former, disabled NFL football player, brings this action
under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et
seq., on behalf of a Class of participants in and beneficiaries of the Bert Bell/Pete Rozelle NFL
Player Retirement Plan against the fiduciaries of the Plan. Count I alleges that the Retirement
Board violated ERISA § 102(a), 29 U.S.C. § 1022(a) by failing to provide participants with an
SPD that made proper disclosures about the terms of the Plan. Count II alleges that the Retirement
Board breached their fiduciary duties under ERISA § 404(a)(1)(A) & (B), 29 U.S.C. §
1104(a)(1)(A) & (B), in failing to make sufficient disclosures to participants about their benefits
regardless of whether they were required to do so under ERISA § 102. Count III alleges that the
Management Council and Players Association are fiduciaries because they had the power to
appoint and remove members of the Board and a duty to monitor their appointees and that they
failed to properly monitor their respective appointees. Count V seeks a determination that the
Plan’s statute of limitations provision which contradicts ERISA is void.1
FACTUAL ALLEGATIONS
This action involves an ERISA plan that offers both retirement and disability benefits to
its participants. Compl. ¶ 1.2 Many former NFL players who are participants in this Plan suffer

1

Plaintiff does not object to the dismissal of Count IV as Defendants represented that the Plan
Amendment at issue did not apply to Plaintiff. ECF No. 75 at 8.
2
The written instrument of the Plan within the meaning of ERISA § 402(a) (a.k.a. “the Plan
Document”) was most recently amended and restated in 2009. Class Action Complaint (“Compl.”) ¶ 21.
This Plan applies to disability benefits for claims filed prior to January 1, 2015. Id. There is no dispute that
Plaintiff is a participant in this Plan and this Plan governs his disability benefits.

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from debilitating neurological conditions from their years of play in the NFL and these conditions
impact their cognitive abilities and render them unable to work. Id. ¶¶ 3, 54. Despite the vulnerable
condition of the participants, Defendants failed to ensure that the players were provided adequate
disclosures about critical Plan terms in language that they could understand so that they could take
adequate steps to protect their rights to receive the appropriate level of disability benefits. Id. ¶ 4.
Specifically, the Complaint alleges that Defendants adopted undisclosed interpretations of key
terms of the Plan, which are contrary to the plain meaning of those terms as understood by the
average participant. Id. This undermined players’ attempts to obtain a classification for a different
category of benefits. Id. ¶ 5.
The Benefits Provided by the Plan
The Plan provides different benefit levels with divergent compensation rates depending on
whether the player’s injuries are related to playing football. Compl. ¶ 2. Article 5.1 of the Plan
provides for four categories of benefits that offer substantially different monthly benefit rates
depending on which of the benefit criteria are met. Id. ¶ 25. Of most concern is the difference
between the Inactive and Football Degenerative levels of disability under the Plan. “Inactive” Total
& Permanent Disability (T & P) benefits will have (as of 2016) monthly payments of $4,166.50 a
month versus $10,250.00 a month for disability related to football under the Football Degenerative
level. Id. ¶ 25. The Plan allows for players to seek benefits for a one benefit level and then later
apply for a different benefit level through Reclassification. Id. ¶ 28. Benefits determination are
made by an Initial Claims Committee and adverse decisions are appealed to the Retirement Board,
which makes the final administrative determination. Id. ¶¶ 28, 36.
The Fiduciaries of the Plan
The Retirement Board is the designated Plan Administrator within the meaning of ERISA

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§ 3(16)(A), 29 U.S.C. § 1002(16)(A), under Article 1.3 of the Plan Document and a named
fiduciary of the ESOP within the meaning of ERISA § 402, 29 U.S.C. § 1102. Compl. ¶ 13. Under
Article 8.2 of the Plan Document, the Retirement Board was responsible for: defining the terms of
the Plan; construing the Plan; reconciling any inconsistencies in the definition or interpretation of
the Plan and Trust; deciding claims for benefits; adopting procedures, rules, and forms; and
delegating authority as necessary in administration of the Plan. Id. ¶ 13. As a result of these
positions and responsibilities, the Retirement Board and its members (the “Board Defendants”) are
fiduciaries under ERISA § 3(21)(A), 29 U.S.C. § 1002(21)(A). Id. ¶ 13-19.
The National Football League Players Association (the “Association”) is the labor
organization representing professional American football players in the National Football League.
Compl. ¶ 12. The National Football League Management Council (the “Council”) is a non-profit
association of clubs of the National Football League. Id. ¶ 11. The Association had the authority
to and did appoint three of the six members of the Retirement Board and also had the authority to
remove and replace any of those three members. Id. ¶¶ 12 13. Likewise, the Council had the
authority to and did appoint the other three members of the Retirement Board, and the authority to
remove and appoint a replacement for any member of the Retirement Board that the Council has
appointed. Id. ¶¶ 11, 13. As a result of their authority to remove and replace their respective
appointees on the Retirement Board, the Complaint alleges that the Council and the Association
were fiduciaries of the Plan within the meaning of ERISA. Compl. ¶¶ 11-12.
The Summary Plan Description & Disclosures About The Plan Terms
The SPD serves as the primary document designed to communicate information to the
player-participants about the Plan. Id. ¶ 13. As the Plan Administrator, the Retirement Board was
responsible for ensuring that the SPD met the requirements of ERISA § 102. Id. ERISA § 102 and

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the DOL Regulations set forth specific requirements about how the Plan terms need to be
communicated to participants. Id. ¶¶ 68-69. ERISA § 102 and the DOL Regulations, 29 C.F.R.
§ 2520.102-2(a), require that the SPD “be written in a manner calculated to be understood by the
average plan participant and shall be sufficiently comprehensive to apprise the plan's participants
and beneficiaries of their rights and obligations under the plan.” Id. ¶¶ 68-69. The DOL
Regulations further specify that the plan administrator must “tak[e] into account such factors such
as the level of comprehension and education of the typical participants in the plan and the
complexity of the terms of the plan.” Id. ¶ 69. The DOL Regulations also require that in order to
make the SPD understandable to the average participant, the SPD “will usually require the
limitation or the elimination of technical jargon and of long, complex sentence. . .[and] the use of
clarifying examples and illustrations.” Id. The Complaint alleges that the SPD did not meet these
requirements. Id. ¶¶ 68-79. Specifically, the Complaint alleges that the SPD failed to define or
explain terms, used legal jargon, and adopted an undisclosed interpretation of these terms that was
contrary to the plain and ordinary definitions as understood by the average participant in this Plan.
Id. ¶¶ 70-77. Additionally, the Board Defendants had fiduciary duties under ERISA § 404(a)(1)(A)
and (B) to make disclosures beyond those specifically required by ERISA. Id. ¶¶ 81-88.
Neither the SPD nor any other communication (until the final denial on a request for
reclassification) explained the process of Reclassification under the Plan. Compl. ¶¶ 30, 71-77.
Article 5.5(b) of the Plan addresses reclassification: “A Player who becomes totally and
permanently disabled and who satisfies the conditions of eligibility for benefits under Section
5.1(a), 5.1(b), 5.1(c), or 5.1(d) will be deemed to continue to be eligible only for the category of
benefits for which he first qualifies, unless the Player shows by evidence found by the Retirement
Board or the Disability Initial Claims Committee to be clear and convincing that, because of

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changed circumstances, the Player satisfies the conditions of eligibility for a benefit under a
different category of total and permanent disability benefits. Id. ¶ 28. Neither Article 5.5(b) of the
Plan nor any part of the SPD provides any definition or explanation as to what is meant by “clear
and convincing evidence” or “changed circumstances.” Compl. ¶¶ 28, 30, 71-77. The SPDs
provide no explanation, at least in terms that the average participant would understand, as to what
the Board means by “changed circumstances,” offering only:
As long as you remain totally and permanently disabled, you will continue to
receive total and permanent disability benefits under the category for which you
first qualify, unless you present evidence for reclassification that the Disability
Initial Claims Committee or the Retirement Board finds to be clear and convincing.
You must be able to demonstrate that, because of change of circumstances, you
satisfy the conditions of eligibility for a benefit under a different category of total
and permanent disability benefits.
Id. ¶ 30. The Board does not disclose its definition of “changed circumstances” to the players until
the end of the administrative process, in their final decision as follows:
Section 5.55(b) governs requests for reclassification such as yours, and it permits
reclassification of T&P benefits only where a Player provides “clear and
convincing” evidence of “changed circumstances” warranting “a different category
of total and permanent disability benefits.” In this and all other instances, the
Retirement Board interpret Section 5.5(b)’s “changed circumstances” requirement
to mean a change in Player’s physical condition—such as a new or different
impairment—that warrants a different category of benefits.
Id. ¶¶ 38-39. Further, 5.2(b) of the Plan establishes on method of creating a presumption of T&P
benefits is through the award of Social Security Disability benefits within 15 years of a player’s
last year of League play. Compl. ¶ 26. But the SPD does not explain the effect that could occur if
they seek Social Security benefits after having sought T&P benefits under the Plan. Id. ¶¶ 29-30.
Chris Hudson’s Experience Applying for Benefits
After 8 years playing in the League, Mr. Hudson sustained numerous head injuries. Compl.
¶ 31. Mr. Hudson applied for benefits under the Plan and, ultimately, in a May 20, 2011 letter the

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Retirement Board reversed its prior denial of Hudson’s T & P benefits for Inactive T & P benefits.
Id. ¶ 32. In so doing, the Board determined that Mr. Hudson’s injuries were “not related to League
football activities.” Id. ¶ 33. Mr. Hudson then sought Social Security Disability benefits and was
awarded these benefits with a disability date of December 31, 2009. Id. ¶ 34. After receiving the
SSDI decision, Mr. Hudson sought reclassification under the Plan claiming that his SSDI award
and other new medical documentation established changed circumstances by clear and convincing
evidence. Id. ¶ 35. The Initial Claims Committee denied his claim but did not explain its definition
of “changed circumstances” or how it weighed the evidence submitted by Hudson. Id. ¶ 36.
Hudson appealed this decision and on May 21, 2015, the Board issued a Final Decision, received
by Hudson on May 27, 2015. Id. ¶37-38. For the first time, in this final decision the Board notified
Hudson of its interpretation of “changed circumstances” under the Plan. Id. ¶¶ 38-39.
ARGUMENT
I.

COUNT I STATES A TIMELY CLAIM UNDER ERISA § 102
Count I alleges that the Board Defendants violated ERISA § 102, 29 U.S.C. § 1022, by

creating and distributing an SPD that did not adequately explain the standard for reclassification
under the Plan. Compl. ¶¶ 67-80. Count I alleges that the SPD used legal jargon to describe the
standard—“clear and convincing evidence” of “changed circumstances”—and failed to explain
that seeking reclassification needed to establish a change in their physical condition, and that new
evidence relating to the character of an existing impairment would not qualify. Id. ¶¶ 38-39, 86.
The Complaint alleges that this usage differed from the ordinary definition of those terms as
understood by the average participant in this Plan. Id. ¶¶ 71-72, 74-76. Count I further alleges that
Hudson did not discover that the Board was “not using the plain and ordinary definition[s] for
the[se] terms” until he received a denial of his claim for reclassification on May 27, 2015. Id. ¶¶

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73, 77.
The Report concludes that Count I fails both because the Plan Administrator had no
statutory obligation under ERISA § 102 to “disclose discretionary interpretations of plan terms,”
and because Hudson had constructive knowledge of the standard for reclassification under the Plan
more than three years prior to the filing of this case – i.e., before May 21, 2015. R&R at 44, 49.
Both recommendations should be rejected. First, the DOL regulations and case law interpreting
ERISA § 102 make clear that where, as here, a policy of interpretation or administration of the
Plan erects a barrier that may lead to a participant’s disqualification from, ineligibility for, or denial
or loss of benefits, the SPD must disclose that policy. Second, the statute of limitations runs six
years, not three, and in any a single out of circuit court decision did not place Hudson on
constructive notice of the Board’s its interpretations of the Plan.
A.

The SPD Failed to Disclose a Prerequisite to the Receipt of Promised Benefits

“SPDs are central to ERISA.” Frommert v. Conkright, 738 F.3d 522, 531 (2d Cir. 2013).
The SPD serves as an “employee's primary source of information regarding employment benefits
and employees are entitled to rely on the descriptions contained in the summary.” Burke v. Kodak
Ret. Income Plan, 336 F.3d 103, 110 (2d Cir. 2003). ERISA § 102 and DOL regulations govern
the contents of SPDs. Id. ERISA § 102 requires that the SPD must explain the plan's eligibility
requirements as well as “the circumstances which may result in disqualification, ineligibility or
denial or loss of benefits.” Id. (citing 29 U.S.C. § 1022(b) and 29 C.F.R. § 2520.102–3(l)). To
comply with ERISA, these explanations in “[t]he SPD must be written in a manner calculated to
be understood by the average plan participant and must be sufficiently accurate and comprehensive
to apprise participants and beneficiaries of their rights and obligations under the plan.” Id. (quoting
29 U.S.C. § 1022(a)). The standard is not a hypothetical “average plan participant” but needs to
“account” for “the level of comprehension and education of typical participants in the plan and
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the complexity of the terms.” 29 C.F.R. § 2520.102–2(a) (emphasis added). The SPD also must
limit or avoid “technical jargon” and include “clarifying examples and illustrations” of how the
plan works in practice. Id. Count I alleges that the SPD failed to comply with these standards.
Compl. ¶¶ 68-69, 79. Count I alleges the specific language in the SPD that constituted legal jargon,
how the ordinary definition of these terms differed from Defendants’ interpretation, and that the
SPD failed to provide any examples or illustrations of these standards in practice. Id. ¶¶ 71-77.
These allegations sufficiently state a claim of ERISA § 102.
The Report concludes only that the Retirement Board need not disclose its interpretation
of the “changed circumstances” language of the Plan, because “[n]o part of 29 U.S.C. § 1022
requires plan fiduciaries to disclose discretionary interpretations of plan terms, or requires that
summary plan descriptions must summarize every standard under which plan terms may be
evaluated….” R&R at 44-45. The Report asserts that ERISA § 102 only applies to “more drastic
situations where a summary plan description fails to disclose the actual material terms of the plan.”
Id. at 45. But this assertion contradicts Second Circuit precedent, which has held that policies not
contained in the plan document must be disclosed. In Wilkins v. Mason Tenders District Council
Pension Fund, 445 F.3d 572 (2d Cir. 2006), the Second Circuit considered a policy – not contained
in the plan document – requiring pension participants seeking additional benefits to provide certain
documentation as required disclosure. Id. at 582. The Wilkins defendants argued and the district
court held that disclosure was not required because this policy “was not a plan term, but ‘merely a
statement as to how the Pension Fund administers claims for benefits.’” Id. at 581. Rejecting this
argument, the Second Circuit reversed and held that the fiduciaries were “required under ERISA
to state its Policy in the SPD.” Id. at 583–84. “It seems to us obvious that the Policy, by erecting
an additional, mandatory prerequisite to the receipt of promised benefits, may result in

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disqualification, ineligibility, or a denial or loss of benefits [and] must, therefore, be disclosed in
the SPD.” Id. at 584; Koehler v. Aetna Health Inc., 683 F.3d 182, 188-189 (5th Cir. 2012) (failing
to clearly disclose policy about submission of pre-authorization request violated ERISA § 102).
Count I similarly alleges that the Board Defendants had a policy or practice to interpret certain
terms related to reclassification requiring certain kinds of evidence but failed to disclose this
policy. Compl. ¶¶ 75, 77.
The Report relies on McCarthy v. Dun & Bradstreet Corp, 482 F.3d 184, 194 (2d Cir.
2007) to conclude that SPDs need not disclose interpretation of plan terms. R&R at 44-45. But the
nondisclosure in McCarthy was the method by which a policy of actuarially adjusting early
retirement benefits reduced those benefits. McCarthy, 482 F.3d at 194. The policy of reducing
early retirement benefits itself was disclosed. Id. First, unlike McCarthy, but like Wilkins, the SPD
did not disclose the policy at issue: requiring proof of a new or changed impairment to qualify for
reclassification. Second, unlike McCarthy but like Wilkins, this action involves an “additional,
mandatory prerequisite to the receipt of promised benefits [that] may result in disqualification,
ineligibility, or a denial” of benefits—as in Wilkins, by an undisclosed evidentiary requirement.
Wilkins, 445 F.3d at 584; see Frommert, 738 F.3d at 533 (distinguishing McCarthy).
The Second Circuit has repeatedly held that the SPD needs to do more than simply repeat
the terms of the plan that appear in the formal, legalistic written instrument, but instead
“an SPD must explain the ‘full import’ of a plan term.” Frommert, 738 F.3d at 532 (affirming
finding that SPD failed to provide adequate notice of the plan’s offset method); Layaou v. Xerox
Corp., 238 F.3d 205, 210-11 (2d Cir. 2001) (reversing summary judgment because “SPD failed to
provide adequate notice” about the retirement formula); Amara v. CIGNA Corp., 534 F. Supp. 2d
288, 345 (D. Conn. 2008) (“[I]n addition to describing the individual provisions of the retirement

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plan and their import, an employer must also describe the interaction among those provisions if the
result is likely to be material to plan participants.”); see Chambless v. Masters, Mates & Pilots
Pension Plan, 772 F.2d 1032 (2d Cir. 1985) (finding notice failed to disclose how employees'
benefits would be affected by plan amendment); see also Koehler, 683 F.3d at 188-189 (explaining
that SPD should use different language than the Plan to explain terms). The DOL regulations
impose an “affirmative duty to make participants clearly ‘see’ circumstances under which they
will not receive the benefits described in the summary that they might otherwise reasonably expect
to receive.” Osberg v. Foot Locker, Inc., 138 F. Supp. 3d 517, 554 (S.D.N.Y. 2015), aff'd, 862
F.3d 198 (2d Cir. 2017). To provide a sufficient explanation in an SPD, the plan administrator
must “exercise considered judgment and discretion by taking into account such factors as the level
of comprehension and education of typical participants in the plan and the complexity of the terms
of the plan.” Frommert, 738 F.3d at 532 (quoting 29 C.F.R. § 2520.102–2(a)). The Report suggests
that this would require the SPD the include “interpretations of all conceivable disputes or
ambiguities.” R&R at 48. The Second Circuit previously rejected a similar argument. Frommert,
738 F.3d at 533. Likewise here, the Complaint adequately alleges that the Board Defendants failed
to draft an SPD with specific attention to policies and plan provisions to apprise a participant about
the benefits they might reasonably expect to receive or with an eye to the complexity of the issues
and the capacities of the average plan participant. Compl. ¶¶ 67-80.
The Report relies on Boyd v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, 796 F.
Supp. 2d 682, 693 (D. Md. 2011), and Bryant v. Bert Bell/Pete Rozelle NFL Player Retirement
Plan, No. 12 CV 936 (N.D. Ga. March 23, 2015) (filed at Dkt. 56-9). R&R 47-48. Neither case
involved an SPD claim brought under ERISA § 102, but rather both were benefit claims
challenging the denial of benefit reclassification under the “changed circumstances” standard of

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the Plan. The holding of both cases—that the Board’s interpretation of that language was
reasonable (and consistent with prior application)—is different than the question here: whether the
SPD provided adequate disclosure. See Harte v. Bethlehem Steel Corp., 214 F.3d 446, 448 (3d Cir.
2000) (holding a plan interpretation reasonable but finding a question of fact as to whether there
was a duty to disclose that interpretation); see King v. Blue Cross and Blue Shield of Ill., 871 F.3d
730, 744 (9th Cir. 2017) (finding whether a disclosure violates ERISA § 102 is distinct from the
issues in a benefits claim); Koehler, 683 F.3d at 191 (upholding interpretation of the plan, but
finding violation of ERISA § 102). Those cases also address past undisclosed practices as of the
date of those decisions.
B.

Count I is Not Barred by the Statute of Limitations

The Report finds that Count I is untimely, by concluding that “Hudson had constructive
knowledge of the Retirement Board’s interpretation of the evidentiary standard” based on the outof-circuit district court Boyd decision in 2011. R&R at 49. Yet this contradicts the Complaint,
which alleges that Hudson learned of the interpretation for the first time on May 27, 2015. Compl.
¶¶ 38-39. And the Report erroneously applies a three year, not six year, statute of limitations.
1.

Hudson Did Not Have Constructive Knowledge of the Retirement
Board’s Plan Interpretation Before May 21, 2015.

The Second Circuit has held that an ERISA cause of action accrues and the statute of
limitations does not begin to run until “there has been ‘a repudiation by the fiduciary which
is clear and made known to the beneficiaries.’” Miles v. N.Y. State Teamsters Conf. Pension &
Ret. Fund Emp. Pension Ben. Plan, 698 F.2d 593, 598 (2d Cir. 1983) (quoting Valle v. Joint
Plumbing Indus. Bd., 623 F.2d 196, 202 n.10 (2d Cir. 1980)). Here, the Complaint alleges that the
May 21, 2015 denial of Plaintiff’s appeal on reclassification was the first time that the Board had
provided an explanation to Hudson of how the Board interprets “changed circumstances” and that
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explanation was “never conveyed to Hudson in any way prior to the final denial.” Compl. ¶ 39. As
this Complaint was filed within three years of that appeal denial, Plaintiff’s ERISA § 102 claim is
timely even under a three year statute of limitations.
In all events, “(t)he statute of limitations is an affirmative defense as to which defendants
bear the burden of proof.” Trs. of the N.Y. City Dist. Council of Carpenters Pension Fund v. Lee,
No. 15 CV 8081, 2016 WL 1064616, at *9 (S.D.N.Y. Mar. 14, 2016) (citing Harris v. City of N.Y.,
186 F.3d 243, 251 (2d Cir. 1999) and denying motion to dismiss in ERISA case on statute of
limitations grounds). As a complaint does not need to anticipate and rebut a statute of limitations
defense, “dismissal is appropriate only if a complaint clearly shows the claim is out of time.”
Harris, 186 F.3d at 250-51. To obtain dismissal based on this defense, defendants must “identify,
from the face of the complaint and taking all inferences in [plaintiff’s] favor, the precise moment
at which the [] limitations began to run” because plaintiff had sufficient information “to state his
own viable claims.” Charles Schwab Corp. v. Bank of Am. Corp., 883 F.3d 68, 95 (2d Cir. 2018)
(reversing dismissal). An allegation in the complaint denying that plaintiff had knowledge defeats
dismissal on statute of limitations grounds even when defendants submit purportedly contrary
extraneous material. Lee, 2016 WL 1064616, at *10-11 (relying on Harris); see Sachdev v. Singh,
No. 15 CV 7114, 2016 WL 768861, at *9 (S.D.N.Y. Feb. 26, 2016) (denying motion to dismiss
based on “constructive knowledge” where complaint did not allege when plaintiff acquired
knowledge).
The Report relies on extraneous material to contradict the allegations of the Complaint.
The Complaint alleges that Plaintiff “discovered that the Board Defendants were not using the
plain and ordinary definition for the terms” in the Plan, “but were using legal jargon,” when on
March 27, 2015, he received a letter from the Retirement Board denying his reclassification.

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Compl. ¶¶ 73, 77. But the Report finds that Plaintiff should be charged with constructive
knowledge of the fact that a decision was issued in another case, in a different out of circuit
jurisdiction, involving another player even in the absence of any allegation that the Boyd decision
was disclosed to Hudson. R&R at 49-51 (citing Boyd, 796 F. Supp 2d at 692-93).
The Report does not cite a single case where the existence of a single district court decision
provided participants with constructive notice of plan interpretation and started the statute of
limitations on ERISA disclosure claims. R&R at 50-51. The cited cases are distinguishable. First,
United States v. Regan, 713 F. Supp. 629 (S.D.N.Y. 1989) did not involve a statute of limitations
or ERISA: it was a case about whether criminal defendants had constitutionally adequate fair
notice that their federal tax fraud could constitute crimes. Id. at 634-35 (citing cases). The “chorus
of judicial opinions” referenced in Regan was more than the single opinion cited by the Report,
and the Regan court applied the more minimal standard for constitutional fair notice that expressly
contemplates constructive knowledge of law: whether “the law give[s] sufficient warning that men
may conduct themselves so as to avoid that which is forbidden.” Id. at 639-40. Second, in Weber
v. Geffen Records, 63 F. Supp. 2d 458 (S.D.N.Y. 1999), the court found the plaintiff had
constructive knowledge of the contents of a copyright registration which the plaintiff knew was
infringing, but narrowed its holding: “[t]his court is not holding that awareness of some number
of violations necessarily yields constructive knowledge of all other violations by the same parties.”
Id. at 465. And Hutton v. Deutsche Bank AG, 541 F. Supp. 2d 1166 (D. Kan. 2008) held that under
Kansas law a plaintiff alleging his financial advisors had invested his money in erroneous tax
strategies that the IRS eventually announced it viewed as undisclosed tax shelters had a claim
running from the IRS disclosure. Id. at 1171. Both these cases involved federal publications
integral to the claims, where the document itself provided notice of the relevant facts.

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That Mr. Hudson was represented by counsel on his request for reclassification does not
provide him with constructive knowledge of every court decision involving the plan in which he
participates. The Report cites Soto v. Barnitt, No. 00 CV 3453, 2000 WL 1206603, at *2 (S.D.N.Y.
Aug. 23, 2000), which held that a procedural default in was not be excused due to attorney
ignorance of the appropriate deadline. Likewise, a footnote in GMA Accessories, Inc. v. BOP, LLC,
765 F. Supp. 2d 457, 467 n.2 (S.D.N.Y. 2011) chastises counsel for not disclosing contrary
authority (where the attorney was counsel in the prior case). Both of these non-ERISA cases
involve errors by attorneys (not the knowledge imputed to their clients), and neither involves
constructive knowledge or a statute of limitations.
The implication of the Report’s conclusions is that Plaintiff was on constructive notice of
the Board’s interpretation from the moment of the Boyd decision and that Plaintiff’s claim expired
three years from the date of the Boyd decision (i.e., May 24, 2011), or by May 24, 2014. R&R at
49-50. On this theory, the statute of limitations on Plaintiff’s ERISA § 102 claim expired even
before he filed his own claim for benefits seeking reclassification on September 16, 2014. That
improperly imputes to plan participants an awareness of the contents of the Federal Reporter and
“would place the burden on the party less likely to have a clear understanding of the terms of the
pension plan.” Osberg v. Foot Locker, Inc., 862 F.3d 198, 208 (2d Cir. 2017) (holding constructive
notice of claim not provided by documents provided directly to participants).
2. The Applicable Statute of Limitations for Count I Six Years
Where “ERISA does not prescribe a limitations period for actions under § 1132, the
controlling limitations period is that specified in the most nearly analogous state limitations
statute” and for cases filed in New York, “the six-year limitations period prescribed by New York's
C.P.L.R. § 213 controls.” Miles, 698 F.2d at 598. As the Second Circuit referenced the failure of

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ERISA to “prescribe a limitations period,” the reference to N.Y. C.P.L.R. § 213 is best understood
as referring to N.Y. C.P.L.R. § 213(1). See id. at 598. N.Y. C.L.P.R. § 213(1) provides a six-year
statute of limitations for “an action for which no limitation is specifically prescribed by law.”
The Report ignores this Second Circuit authority to apply a three year statute of limitations
to Count I, without analysis, but citing to Osberg v. Foot Locker, Inc., 907 F. Supp. 2d 527, 533
(S.D.N.Y. 2012) [hereinafter Osberg II]. The Osberg court held that after CIGNA Corp. v. Amara,
563 U.S. 421, 437 (2011), the proper limitations period was the three year term for “an action to
recover upon a liability, penalty or forfeiture created or imposed by statute except as provided in
sections 213 and 215.”3 N.Y. C.P.L.R. § 214(2); see Osberg II, 907 F. Supp. 2d at 533. But Osberg
II ignores that NY CLPR 213(1) provides a six-year statute of limitations for “an action for which
no limitation is specifically prescribed by law,” N.Y. C.P.L.R. § 213(1). Osberg II also cites
Romero v. Allstate Corp., 404 F.3d 212 (3d Cir. 2005) to justify its decision to depart from longstanding six-year statute of limitations set by the Second Circuit. Osberg., 907 F. Supp. 2d at 533.
But Romero held the Pennsylvania catchall statute of limitations—one similar to N.Y. C.P.L.R. §
213(1)—applied to a disclosure violation. Romero, 404 F.3d at 221-22. As the statute of limitations
applied by the Third Circuit was similar to N.Y. C.P.L.R. § 213(1), the analogous statute of
limitations for the ERISA § 102 is the six-year catchall limitations in N.Y. C.P.L.R. § 213(1).
II.

COUNT II ALLEGES VALID AND TIMELY BREACHES OF FIDUCIARY
DUTY UNDER ERISA § 404(a)(1)(A) & (B)
Count II alleges the Board Defendants breached their fiduciary duties under ERISA §

404(a)(1)(A) & (B), 29 U.S.C. § 1104(a)(1)(A) & (B), in failing to make sufficient disclosures to
participants about their benefits. Compl. ¶¶ 81-88. Specifically, the Board failed to sufficiently

3

On appeal, the Second Circuit did not address the question of the limitations period for ERISA §
102 claims. 555 Fed. App’x 77 (2d Cir. 2014) (unpublished). The six-year statute of limitations for actions
under ERISA remains binding authority in this Circuit.

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communicate information about the standard for participants to obtain reclassification under the
Plan. Id. The Report recommends dismissal, finding that if the SPD satisfies ERISA § 102, then
there is no violation of ERISA § 404(a) and that Count II is untimely. R&R at 53.
A.

Compliance with ERISA § 102 does not Exhaust ERISA Fiduciaries’
Disclosure Obligations under ERISA § 404

The Report concludes that if a disclosure is not required under ERISA § 102, then there is
not duty to disclose under ERISA § 404. R&R at 52. But in Devlin v. Empire Blue Cross & Blue
Shield, 274 F.3d 76 (2d Cir. 2001), the Second Circuit found a viable “fiduciary duty claims under
ERISA §§ 404(a)(1)(A) & (B)” based on defendant’s communications with participants about their
benefits, including in SPDs that did not “describe[] the plan accurately.” Id. at 87. “[W]hen a plan
administrator affirmatively misrepresents the terms of a plan or fails to provide information when
it knows that its failure to do so might cause harm, the plan administrator has breached its fiduciary
duty to individual plan participants and beneficiaries.” Id. at 88 (adopting the standard in In re
Unisys Corp. Retiree Med. Benefit “ERISA” Litig., 57 F.3d 1255, 1264 (3d Cir. 1995) (emphasis
added)). The Restatement of Trusts explains that a fiduciary has “a duty to communicate to the
beneficiary material facts affecting the interest of the beneficiary which he knows the beneficiary
does not know and which the beneficiary needs to know for his protection.” Restatement (Second)
of Trusts § 173, comment d (1959).4 The Second Circuit has “endorsed theories of liability” under
ERISA § 404(a)(1) “that rest on material omissions as well as affirmative misstatements” and a
breach of fiduciary can be “based on unintentional misrepresentations.” In re DeRogatis, 904 F.3d
174, 194 (2d Cir. 2018) (citing Estate of Becker v. Eastman Kodak Co., 120 F.3d 5 (2d Cir. 1997)

“[A]n ERISA fiduciary's duty is ‘derived from the common law of trusts’” and “[i]n determining
the contours of an ERISA fiduciary's duty, courts often must look to the law of trusts.” Tibble v. Edison
Int’l, 135 S. Ct. 1823, 1828 (2015) (citations omitted).
4

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and finding sufficient evidence that the Welfare Fund fiduciaries breached their duties). 5 Indeed,
a violation of ERISA § 102 can also be a violation of ERISA § 404. E.g., Osberg, 138 F. Supp. 3d
at 550-55 (analyzing claims under ERISA § 102 and 404 together and finding violations of both);
see King, 871 F.3d at 745 (reversing summary judgment of ERISA § 404(a) claims “[b]ecause the
SPD” did “not comply with [ERISA § 102]”).
The existence of a claim under ERISA § 102 does not preclude a claim under ERISA §
404. The Second Circuit has twice rejected the argument that “there is no private action for breach
of fiduciary duty under ERISA when another remedy is available under 29 U.S.C. § 1132.” Devlin,
274 F.3d at 89; N.Y. State Psychiatric Ass'n, Inc. v. UnitedHealth Grp., 798 F.3d 125, 134 (2d Cir.
2015) (reversing district court’s dismissal of claim on that basis). In both cases, the Second Circuit
held that a plaintiff can proceed on both claims, and if the plaintiff succeeds on both, then merely
the “remedy is limited to such equitable relief as is considered appropriate.” N.Y. State Psychiatric
Ass’n, Inc., 798 F.3d at 134 (quoting Devlin, 274 F.3d at 89-90). Thus, a claim for violating ERISA
§ 102 and ERISA § 404 can be based on the same conduct.
The Report’s contrary conclusion is based on the general proposition that “ERISA’s
fiduciary duties provision does not create new or different responsibilities than the responsibilities
described elsewhere in the statute.” R&R at 51. But its cases do not support this conclusion. The
discussion in Weiss v. CIGNA Healthcare, Inc., 972 F. Supp. 748 (S.D.N.Y. 1997), is dicta as the
court found that the claim could not be brought against CIGNA because it was not the plan
administrator. Id. at 753. In Board of Trustees of the CWA/ITU Negotiated Pension Plan v.

Multiple Circuits have held that fiduciaries have “an affirmative duty to inform when the trustee
knows that silence might be harmful” or disclose “material facts known to the fiduciary but unknown to the
beneficiary, which the beneficiary must know for its own protection.” Jordan v. Fed. Express Corp., 116
F.3d 1005, 1015 (3d Cir. 1997); Krohn v. Huron Mem’l Hosp., 173 F.3d 542, 548 (6th Cir. 1999); Kenseth
v. Dean Health Plan, Inc., 610 F.3d 452, 466 (7th Cir. 2010); Kalda v. Sioux Valley Phys. Partners, Inc.,
481 F.3d 639, 644 (8th Cir. 2007).
5

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Weinstein, 107 F.3d 139 (2d Cir. 1997), the court held only that documents not available upon
request pursuant to ERISA § 104(b)(4) were not required to be provided on demand pursuant to
ERISA § 404(a)(1). Id. at 146. In Faircloth v. Lundy Packing Co., 91 F.3d 648, 657 (4th Cir.
1996), the Fourth Circuit recognized that fiduciaries had a duty “to disclose information to
beneficiaries when the trustee knows that failure to disclose might be harmful.” Id. at 658 (citing
and discussing cases). Thus, a fiduciary’s duty of disclosure is not limited to the specific
requirements of ERISA § 102.
B.

Count II Is Not Barred By The Statute Of Limitations In ERISA § 413

The Complaint alleges that the Board Defendants hid the standard for reclassification from
Plaintiff Hudson until the Board’s “final decision denying Hudson’s appeal for reclassification.”
Compl. ¶ 38; see also id. ¶ 30. The Complaint explains that the ordinary meaning of terms in the
SPD are contrary to the legal jargon of these terms as interpreted by the Board and that Plaintiff
only discovered that the Board Defendants were not using the plain and ordinary definitions for
those terms until May 2015 (less than 6 years from filing the Complaint). Id. ¶¶ 72-73, 76-77.
Thus, the Complaint adequately alleges both a self-concealing scheme of deception and
concealment that was discovered less than six years before the Complaint was filed.
Unlike some Circuits, the Second Circuit concluded that the “fraud or concealment”
provision should not be fused into a single concept “fraudulent concealment” but instead refers to
two distinct concepts: fraud or fraudulent concealment. Caputo v. Pfizer, Inc., 267 F.3d 181, 189,
190 (2d Cir. 2001). Fraud includes not only “false representations of fact, whether by words or
conduct,” but also “concealment of that which should have been disclosed.” Id. (emphasis added).
Concealment means a “withholding of something which one knows and which one, in duty, is
bound to reveal.” Id. As a result, this “six-year statute of limitations should be applied to cases in

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which a fiduciary: (1) breached its duty by making a knowing misrepresentation or omission of a
material fact to induce an employee to act to his detriment or (2) engaged in acts to hinder the
discovery of a breach of fiduciary duty.” Id. (bold and underlying emphasis added). As
concealment incorporates the fraudulent concealment doctrine, the Second Circuit has long held
that the wrong itself was of such a nature as to be self-concealing. State of N.Y. v. Hendrickson
Bros., Inc., 840 F.2d 1065, 1083 (2d Cir. 1988) (finding that a bid-rigging scheme was inherently
self-concealing that fraudulent concealment doctrine applied to statute of limitations); see Caputo,
267 F.3d at 190 n.3. When a defendant engages in “deceptive conduct [that] may prevent a plaintiff
from even knowing that he or she has been defrauded,” and the plaintiff “remains in ignorance of
[the fraud] without any fault or want of diligence or care on his part, the bar of the statute [of
limitations] does not begin to run until the fraud is discovered.” Merck & Co. v. Reynolds, 559
U.S. 633, 644–45 (2010). Here, the Complaint alleges omissions that were self-concealing and that
these omissions kept Hudson ignorant of the Board’s interpretation. Compl. ¶ 5 (“undisclosed
terms and hidden interpretations of key provisions create a trap for the unwary”). Thus, the statute
of limitations in ERISA § 413(1) did not start to run until Plaintiff discovered Defendants’
deceptive acts.
The Report does not specify the date on which the statute of limitations began to run, but
suggests one of: (1) an unspecified date when Hudson had access to the SPD and Plan, (2) his
initial benefit application date, or (3) the date of the Retirement Board’s final determination on his
initial benefit application. R&R at 53. By contrast, the Second Circuit has held that “no part of
plaintiffs’ claim is time-barred [where defendant’s] conduct in breach of his fiduciary duties ‘was
in furtherance of a single scheme,’” and because “numerous of [defendant’s] breaches occurred
within the limitations period,” the action was “timely under ERISA § 413(1)(A).” LaScala v.

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Scrufari, 479 F.3d 213, 220 n.1 (2d Cir. 2007) (affirming and adopting the rationale of LaScala v.
Scrufari, 330 F. Supp. 2d 236, 256 (W.D.N.Y. 2004)). The LaScala “action was timely since it
was commenced ‘within six years of ‘the last action [] which constituted a part of the breach or
violation.’” LaScala, 330 F. Supp. 2d at 256. Here, the Complaint pleads Defendants’ breaches as
an ongoing scheme through at least November 2015. Compl. ¶ 74. At the earliest, the last action
constituting a part of the breach or violation as to Plaintiff occurred in May 2015 (i.e., denial of
reclassification, not denial of the initial benefit claim). Id. ¶ 38. As the Complaint was filed less
than 6 (in fact less than 3) years later, Count II is timely.
III.

COUNT III PROPERLY ALLEGES A BREACH OF THE DUTY TO MONITOR
BY THE COUNCIL AND THE ASSOCIATION
Count III alleges that the Council and the Association breached their duty to monitor the

Board Defendants. Compl. ¶¶ 89-95. Count III alleges that these Defendants each had the power
to appoint and remove three members of the Retirement Board. Id. ¶ 92. Count III explains that
this power also obligates them to undertake an appropriate investigation “at reasonable intervals
to ensure” that their respective appointed fiduciary “is acting in compliance with the terms of the
Plan and in accordance with ERISA.” Id. ¶ 91. Count III then identifies specific items that the
Council and the Association would have known if they had properly monitored the Board. Id. ¶
93. Count III also identifies specific actions that these Defendants should have taken if they had
“properly monitored the Board Defendants.” Id. ¶ 94.
A.

The Council & Association Are Fiduciaries of the Plan

The Report asserts that neither the Council nor the Association are “named in the Plan
Document as a fiduciary.” R&R at 33, 39. A “named fiduciary” is simply one named in the written
instrument, and ERISA § 402(a) contemplates “one or more named fiduciaries” 29 U.S.C. §
1102(a)(1). The Complaint alleges that Article 8.1 of the Plan Document specifically names the
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both the Council and the Association as the entities that each had the authority to appoint and
remove three members of the six-person Retirement Board. Compl. ¶ 92. “An appointing
fiduciary’s duty to monitor his appointees is well-established.” Lutz v. Kaleida Health, 18 CV
01112, 2019 WL 3556935, at *4 (W.D.N.Y. Aug. 5, 2019) (citing In re Polaroid ERISA Litig.,
362 F. Supp. 2d 461, 477 (S.D.N.Y. 2005) (collecting cases) and denying motion to dismiss). Even
when a person only has oversight of its appointees, the appointing fiduciary still has a “fiduciary
duty” to monitor its appointees. Id.; Vellali v. Yale Univ., 308 F. Supp. 3d 673, 691 (D. Conn.
2018) (citing numerous cases to hold that “ERISA law imposes a duty to monitor appointees on
fiduciaries with appointment power.”).6 Thus, the Report engages in an unnecessary discussion of
whether the Council and the Association are “de facto” fiduciaries. See R&R at 33.7
B.

The Report Misconstrues the Allegations of Count III

The Report assumes that the Complaint alleges that the Council and the Association had
fiduciary duties beyond their ability to appoint, remove, and monitor, and alleges that they needed
to micro-manage the Retirement Board. R&R at 38. But the title of Count III explains that the
alleged breaches are “For Failure to Monitor” and specifically alleges that these Defendants should
have removed their appointees unless the Board Defendants took actions to remedy their breaches.
Compl. ¶¶ 94-95. Thus, the Report discusses whether the Council and the Association breached
6

Every Circuit addressing the issue has recognized that persons with the power to appoint and/or
remove other fiduciaries (either from the Plan Document or actual exercise of such power) are themselves
fiduciaries who have an ongoing duty to monitor those fiduciaries. Johnson v. Couturier, 572 F.3d 1067,
1077 (9th Cir. 2009); Coyne & Delany Co. v. Selman, 98 F.3d 1457, 1465-66 (4th Cir. 1996); Martin v.
Feilen, 965 F.2d 660, 669-70 (8th Cir. 1992); Leigh v. Engle, 727 F.2d 113, 134-35 (7th Cir. 1984). As
does the DOL: 29 C.F.R. § 2509.75-8 at FR-17.
7
The Report suggests that a union cannot be an ERISA fiduciary and asserts that Plaintiff only cited
cases involving single-employer plans. R&R at 40 & n.14. Contrary to the Report’s assumption, the
Association’s fiduciary status is not activity arising out of its collective bargaining activity, but its
appointment and removal power. See id. And Plaintiff cited cases involving multi-employer plans. E.g. Dkt
No. 72 at 41 & n.25 (citing Whitfied v. Tomasso, 682 F. Supp. 1287, 1305 (E.D.N.Y. 1988) (finding a Union
breached its fiduciary duty in failing to monitor and remove its appointees)). Nothing in ERISA supports
the finding that the Association is excluded from being an ERISA fiduciary.

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their duties in connection with the initial appointment of the Board members, R&R at 37, whether
they are “liable for every alleged act or omission of those trustees,” R&R at 35, and requiring “a
substantive decision not to upgrade Hudson’s benefits,” R&R at 38. That discussion is irrelevant
Count III merely alleges that the Council and Association should have required the Board to correct
their breaches or remove them. Compl. ¶ 94.8
C.

Count III Adequately Alleges Breaches of the Duty to Monitor

The Report expends one paragraph addressing whether Count III adequately alleges a
breach of the duty to monitor and cites a single case. R&R at 38, 42. The sole authority cited,
decided on summary judgment, found that an appointing fiduciary was liable for his appointees’
breaches where he had knowledge of and then failed to take steps to remove the non-performing
fiduciary. Liss v. Smith, 991 F. Supp. 278, 311 (S.D.N.Y. 1998).9 Count III meets this standard by
alleging what the Council and Association knew or should have known and that they failed to
remove their respective appointees (or take other steps). Compl. ¶¶ 94-95.
The Report assumes, without authority, that unless the “appointees failed to attend
meetings, cast votes, or otherwise execute functions as [fiduciaries],” there is no breach of the duty
to monitor. R&R at 38, 42. But courts in this Circuit have found that “[a]llegations of inadequate
performance by appointee fiduciaries support a claim of breach of the duty to monitor.” In re
Fannie Mae 2008 ERISA Litig., No. 09 CV 1350, 2012 WL 5198463, at *7 (S.D.N.Y. Oct. 22,

8

This analysis appears fixated on a sub-clause in one sentence of one paragraph, Paragraph 94(e),
which Plaintiff explained inadvertently omits “require the Board to,” and like Paragraphs 94(a) through (d),
it should have begun with “require the Board to.” Dkt. No. 72 at 40 n.24.
9
The cases that the Report cites in its legal standard section support a finding that these allegations
are sufficient. E.g. In re Morgan Stanley ERISA Litig., 696 F. Supp. 2d 345, 366 (S.D.N.Y. 2009) (finding
that “monitoring Defendants did nothing” was sufficient because “it suggest[s] that no system was in place
to review and evaluate the performance of their appointees or that potential breaches were otherwise going
to be unaddressed”); In re Polaroid ERISA Litig., 362 F. Supp. 2d at 477 (recognizing that the duty to
monitor requires reviewing the performance of appointees); In re Worldcom, Inc., 263 F. Supp 2d 745, 765
(S.D.N.Y. 2003).

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2012) (emphasis added); In re Am. Int’l Group, Inc. ERISA Litig. II, No. 08 CV 5722, 2011 WL
1226459, at *10 (S.D.N.Y. Mar. 31, 2011) (same); Veera v. Ambac Plan Admin. Comm., 769 F.
Supp. 2d 223, 231 (S.D.N.Y. 2011) (finding allegations that “potential breaches [by the appointed
fiduciaries] were otherwise going unaddressed” suffices “to state a claim against fiduciaries for
violation of the duty to monitor.”); In re Morgan Stanley ERISA Litig., 696 F. Supp. 2d at 366
(finding allegations that “the Monitoring Defendants did nothing” was sufficient to state a claim
because it “suggest[s] that no system was in place to review and evaluate the performance of their
appointees or that potential breaches were otherwise going unaddressed”); see In re M&T Bank
Corp. ERISA Litig., 2018 WL 4334807, at *11 (denying motion to dismiss monitoring claim).10
Count III alleges six specific items of information about which Council and the Association knew
or had they conducted a proper review on reasonable and regular intervals should have known.
Compl. ¶ 93. And then alleges what the Council and the Association should have done to properly
monitor the Board Defendants. Compl. ¶ 94.11 Thus, Count III properly alleges a breach of the
duty to monitor.
IV.

COUNT V ALLEGES A CLAIM UNDER ERISA § 410 AND ERISA§ 404(A)(1)(A)
Count V alleges that Section 11.7(b) of the 2009 Plan Document attempts to impermissibly

modify ERISA’s statute of limitations for fiduciary claims as follows:

“Because the appropriate ERISA mandated monitoring procedures vary according to the nature of
the plan at issue and other facts and circumstances, an analysis of the precise contours of the
defendants' duty to monitor at this stage is premature.” In re M&T Bank Corp. ERISA Litig., No. 16 CV
375, 2018 WL 4334807, at *11 (W.D.N.Y. Sept. 11, 2018); Yale, 308 F. Supp. 3d at 692 (same); In re
Xerox Corp. ERISA Litig., 483 F. Supp. 2d 206, 215 (D. Conn. 2007) (same).
11
Monitoring fiduciaries have liability under ERISA § 405(a)(2) and (3) if allow their appointees to
commit a breach or if they know of and fail to remedy a breach. See id.; see also Chesemore v. All. Holdings,
Inc., 886 F. Supp. 2d 1007, 1057 (W.D. Wis. 2012) (finding entity with monitoring responsibility liable
after trial as a co-fiduciary for its appointee’s breach under both ERISA § 405(a)(2) and (3)), aff'd, 829 F.3d
803 (7th Cir. 2016).
10

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ERISA § 413 Provides

Section 11.7(b) of the Plan Provides

No action may be commenced under this subchapter
with respect to a fiduciary’s breach of any
responsibility, duty, or obligation under this part, or
with respect to a violation of this part, after the earlier
of —

[N]o action alleging an omission, violation, or
breach of any responsibility, duty, or obligation
imposed by this Plan (or any internal rule,
guideline, or protocol) or any applicable law may
be commenced after the earlier of –

(1) six years after (A) the date of the last action which (l) six years after the date of the omission,
constituted a part of the breach or violation, or (B) in violation, or breach, or
the case of an omission the latest date on which the
fiduciary could have cured the breach or violation, or (2) three years after the earliest date on which the
plaintiff had actual or constructive knowledge of
(2)
three years after the earliest date on which the the omission, violation, or breach,
plaintiff had actual knowledge of the breach or
violation;
except as provided in ERISA section 413 (but
except that in the case of fraud or concealment, such only where the fraud or concealment is separate
action may be commenced not later than six years after from the offense and intended to conceal the
the date of discovery of such breach or violation.
existence of the offense).

Compl. ¶ 104 (illustrating conflict with ERISA § 413 in bold). The Complaint alleges that the SPD,
in a section entitled “Limitation on Actions” fails to adequately explain the Plan:
With respect to all other types of claims [i.e. other than a benefit claim], you may
not commence a legal action in a court after the earlier of
•

six years after the date of any omission, violation, or breach of any
responsibility, duty, or obligation imposed by the Retirement Plan
or applicable laws, or

•

three years after the earliest date that you knew or should have
known of any such omission, violation, or breach, except that,
depending on the facts, certain exceptions may apply.

If you do file a legal action after these limitation periods have expired, the court
may dismiss your claim.
Id. ¶ 106.12 The SPD fails to explain that the Plan attempts to modify ERISA’s statute of limitations

12

Congress specifically removed a constructive knowledge standard from the statute of limitations
for actions as to a fiduciary’s breach of any responsibility, duty, or obligation under Part IV of ERISA after
January 1, 1988. Int’l Ass'n of Machinists and Aerospace Workers, AFL-CIO, Dist. Lodge No. 157 by Roy
v. Rome Cable Corp., 810 F. Supp. 402, 409 (N.D.N.Y. 1993). This Plan provision also significantly
conflicts with the Second Circuit’s standard for actual knowledge and the “fraud or concealment” exception.
Supra Part I.B.1.

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or explain how this impacts participants’ rights. Id. ¶ 107. Nonetheless, the Report imputes
knowledge of these provisions although nothing suggests that Hudson had the actual Plan
Documents more than 3 years prior to May 2018. See R&R at 59.
Even though Count V alleges a claim under ERISA § 404(a)(1) and the statute of
limitations is therefore governed by ERISA §413, the Report ignores that ERISA § 413 does not
have a constructive knowledge provision under Part IV of ERISA. Compare R&R at 58-59 with
LaScala, 479 F.3d at 220 n.1 (finding “ERISA § 413(2) requires ‘actual knowledge’” and not
merely constructive knowledge). Thus, Report’s recommendation is premised on an assumption
that if an improper provision appears in the Plan, that a participant would need to challenge the
provision within 3 years of the Amendment even if they had no other claim and even if the SPD
failed to provide them adequate knowledge about the Amendment.13
CONCLUSION
For the foregoing reasons, Defendants’ motions to dismiss Counts I, II, III, and V should
be denied.

13

The Report does not address whether Hudson has standing to bring this claim. R&R at 59 n.22. In
this Circuit, a participant has Article III standing to obtain injunctive relief related to ERISA’s disclosure
and fiduciary duty requirements without a showing of individual harm to the participant. Cent. States Se.
& Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care, LLC, 433 F.3d 181, 199 (2d Cir.
2005). Certainly, once Hudson had the claims in Counts I-III that could be subject to the Plan’s statute of
limitations provision, then he had a cognizable harm.

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Dated: September 19, 2019

Respectfully submitted,
_/s/ Colin Downes __
R. Joseph Barton (pro hac vice)
Colin Downes
Block & Leviton LLP
1735 20th Street NW
Washington, DC 20009
Tel: (202) 734-7046
Fax: (617) 507-6020
Email: jbarton@blockesq.com
Email: colin@blockesq.com
Glancy Prongay & Murray LLP
Robert I. Harwood
Daniella Quitt
712 Fifth Avenue, 31st Floor
New York, NY 10019
Tel: (212) 935-7400
Fax: (212) 753-3630
Email: rharwood@glancylaw.com
Email: dquitt@glancylaw.com
Robert A. Donati
William Benjamin Ryan
Donati Law, PLLC
1545 Union Avenue
Memphis, TN 38104
Tel: (901) 278-1004
Fax: (901) 278-3111
Email: robert@donatilaw.com
Email: billy@donatilaw.com
Counsel for Plaintiff

26