United States Court of Appeals, Eleventh Circuit
United States Court of Appeals, Eleventh Circuit
3d 1260
The central issue in this interlocutory appeal is the proper reach of the
At the time of their enrollment, the participating employees were not provided
copies of the plan nor any other written documents, apart from the enrollment
forms themselves. The plan booklets and included certificates were later mailed
to Carter, who filed them in a closet at Southeastern Steam. Carter testified that,
while she did not widely distribute the booklets, she gave a booklet to Moorman
and kept one for herself. Id. at 76. The plan certificate provides, inter alia, that:
"[t]his policy is delivered in and is governed by the laws of the governing
jurisdiction and to the extent applicable by the Employee Retirement Income
Security Act of 1974 (ERISA) and any amendments." Id. Exh. 6 at 1. The
Summary Plan Description designated Southeastern Steam as the plan
administrator and as the agent for service of legal process on the plan. Id. Exh.
6 at 60-61.
In a subsequent order on 17 February 2005, from which this appeal is taken, the
district court: (1) granted Appellees' converted motion for summary judgment
in ruling that the plan was governed by ERISA; (2) granted Appellees' motion
to dismiss Moorman's state law claims on grounds of ERISA preemption; and
(3) denied Appellees' motion to dismiss Moorman's federal RICO claim. On 4
March 2005, Moorman filed (1) a motion for reconsideration; (2) an alternative
motion seeking certification for interlocutory appeal; and (3) a motion to stay
proceedings.
On 25 July 2005, the district court (1) denied Moorman's motion for
reconsideration; (2) granted Moorman's alternative motion for certification for
interlocutory appeal; (3) denied Appellees' request for certification for
interlocutory appeal of the district court's refusal to dismiss Moorman's federal
RICO claims; (4) granted Moorman's motion to stay proceedings; (5) denied
without prejudice certain discovery motions filed by Moorman; and (6) ordered
that the district court case be administratively terminated until remanded per the
instructions of our court. We later granted Moorman's interlocutory appeal
pursuant to 28 U.S.C. 1292(b).
II. DISCUSSION
10
On appeal, Moorman alleges that the district court committed various errors in
determining that ERISA governs the plan in this case. Specifically, he claims
that the district court (1) improperly limited discovery; (2) improperly
determined that ERISA governance was a question of fact for the district court,
and not the jury, to decide; and (3) made an impermissible credibility
determination with regard to a witness, and improperly construed and
disregarded other evidence favorable to Moorman. With regard to Moorman's
federal RICO claims, Appellees ask us to review whether this claim should be
dismissed. After a brief examination of the relevant background law, we
address these issues in turn.
a. Purpose
12
Congress created ERISA "to promote the interests of employees and their
beneficiaries in employee benefit plans and to protect contractually defined
benefits." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113, 109 S.Ct.
948, 956, 103 L.Ed.2d 80 (1989) (citations and quotations omitted); see also 29
U.S.C. 1001 (listing the congressional findings and declaration of policy
regarding ERISA); Dixon v. Life Ins. Co. of N. Am., 389 F.3d 1179, 1184 (11th
Cir.2004) ("ERISA's purpose [is] to promote the interests of employees and
their beneficiaries.").
b. Governance
13
15
B. Whether the District Court Made Specific Errors in Determining that ERISA
Governs the Plan
16
17
Moorman complains that the district court improperly limited his discovery
regarding questions of ERISA governance and preemption when it denied his
motion for leave to depose Appellees' witnesses and for additional time to
submit summary judgment materials. However, Moorman never specifically
identifies in his brief the issues on which he sought discovery. In denying
Moorman's motion, the district court correctly noted that this new discovery
request related to the issue of whether the Southeastern Steam had contributed
to the plan. The court then observed that the Appellees had withdrawn any
contention that Southeastern Steam had contributed to the plan. Mindful that
the standard of review for denials of a discovery order is abuse of discretion,
we conclude that Moorman's argument on this issue fails.
18
19
In addition, Moorman argues that the district court erred because it stated that
the issue of whether ERISA governs the plan is a fact question for the district
court to determine. According to Moorman, because the district court already
has jurisdiction based on other claims, the district court has no need to
determine the factual existence of ERISA governance for jurisdictional
purposes, and therefore this question of fact should be determined by a jury. In
its order, however, the district court indicated that it would follow "the general
21
22
23
In his brief on appeal, Moorman argues that the "controlling questions of law"
in this case are the alleged laundry list of errors by the district court in applying
the summary judgment standard of review. See Appellant's Br. at 4-5. This
misses the point. In applying de novo review, "we review the judgment, not the
soundness of the district court's explanation for it." Collado v. United Parcel
Serv., Co., 419 F.3d 1143, 1151 (11th Cir. 2005); see also SEC v. ETS
Payphones, Inc., 408 F.3d 727, 736 n. 10 (11th Cir. 2005) (per curiam) ("We
review the district court's judgments; we do not grade the opinions."). Thus,
even if the district court erred by improperly making a credibility determination
or by misconstruing and disregarding certain evidence, Moorman still must
show that there is a genuine issue of material fact as to ERISA governance.
1. Safe Harbor Analysis
24
The requirements for a safe harbor exception under 29 C.F.R. 2510.3-1(j) are
strict. See Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1213 (11th
Cir.1999) (noting that the safe harbor regulation "explicitly obliges the
employer who seeks its safe harbor to refrain from any functions other than
permitting the insurer to publicize the program and collecting premiums").
Thus, the safe harbor analysis is usually conducted before considering whether
the plan is governed by ERISA using the more factor-intensive analysis under
Appellees concede that three of the four elements of the safe harbor exemption
are met. The only element in contention is whether "(3) [t]he sole functions of
the employer ... with respect to the program are, without endorsing the
program, to permit the insurer to publicize the program to employees or
members, to collect premiums through payroll deductions or dues checkoffs
and to remit them to the insurer." 29 C.F.R. 2510.3-1(j) (emphasis added).
According to the Department of Labor:
26
27
ERISA Op. Letter No. 94-26A, 1994 WL 369282 (July 11, 1994) (emphasis
added). For our purposes, the safe-harbor analysis turns on whether the
employer "endorsed" or undertook any additional "function[ ] ... with respect"
to the plan within the meaning of 2510.3-1(j).
28
In Butero, we determined that the employer had endorsed the plan because it
had chosen the insurer, "decided on key terms," "deemed certain employees
ineligible" for participation, "incorporated the policy terms into the . . .
summary plan description for its cafeteria plan," and "retained the [ability] to
alter compensation reduction for tax purposes." 174 F.3d at 1213-14. While the
issue was not appealed to our court, the district court in Anderson concluded
that an employer's actions rose to the level of endorsement when "it singled out
the UNUM Plan as the sole plan it offers to its hourly employees, played a role
in selecting the premium rates, restricted employee eligibility, displayed its
corporate logo on the policy documents which it provided to [its] employees,
was named in the policy documents as the plan administrator, and provided a
summary plan description to its employees that specifically referred to ERISA."
Anderson, 369 F.3d at 1262 (citing Anderson v. UnumProvident Corp., 322
F.Supp.2d 1272, 1276-79 (M.D.Ala. 2002)).
29
Under the mandate of Butero, which states that "any functions" by the
employer apart from the two listed exceptions disqualify a plan from the safe
harbor exception, the plan at issue in this case does not qualify for this
exception. See Butero, 174 F.3d at 1213. Here, even though only one nonlisted
employer function would disqualify the plan under the safe harbor exception,
several actions by Southeastern Steam stand out as "endorsement" for the
purposes of 2510.3-1(j).
30
First, as the district court noted, "it is undisputed that Southeastern Steam
decided on at least one of the eligibility terms under the Plan, the waiting
period." R7-41 at 24. Moorman himself concedes in his brief on appeal that
Southeastern Steam determined the waiting period. Appellant's Br. at 34.
31
Second, similar to the district court's analysis in Anderson, the plan at issue in
this case was the "sole" long term disability plan offered by Southeastern
Steam to its employees. See 322 F.Supp.2d at 1277. Specifically, there is no
dispute that Southeastern Steam identified the plan in its employee handbook as
part of the company's employee benefits. The employee handbook stated that "
[d]isability insurance is available to all full-time employees." R.Exh., Exh. 5 at
23. Carter testified that Southeastern Steam did not offer disability insurance
prior to the plan at issue in this case, that no other plans were then offered, and
that the provision in the handbook was added to account for that policy. Id. at
10-11, 45-46. In addition, all but one of the employees of Southeastern Steam
enrolled for disability coverage at the time of the original enrollment. Id. at 57.
The enrollment forms were signed by the employees, including Carter and
Moorman, and included the following language: "Southeastern Steam, Inc., is
offering a comprehensive Disability program. . . ." R4-30 Exh. 2B at
unnumbered 3, 23.
32
33
34
Even if the safe harbor is barred, "that does not necessarily mean that the
insurance policy is part of an ERISA plan." Butero, 174 F.3d at 1214; see also
Anderson, 369 F.3d at 1263 n. 2 ("[A] plan that falls outside of the safe harbor
exception does not necessarily fall within the jurisdiction of ERISA.").
35
The defendants must show five things to establish that an ERISA plan governs
its relationship with Plaintiff: "(1) a plan, fund, or program (2) [that has been]
established or maintained (3) by an employer ... (4) for the purpose of
providing ... disability ... benefits (5) to participants or their beneficiaries."
Donovan, 688 F.2d at 1371 (internal quotations omitted). The only contested
factor is the third, whether the employer, Southeastern Steam, "established or
maintained" the plan within the meaning of 29 U.S.C. 1002(1). "Our inquiry
thus necessarily focuses on `the employer . . . and [its] involvement with the
administration of the plan.'" Anderson, 369 F.3d at 1263.
36
37
We cannot help but note that the facts in this case are similar to those in
Anderson, in which we determined that the employer "established and
maintained" the plan. See id. at 1259-62. In applying Butero's seven listed
factors to the facts in this case and incorporating our previous analysis
concerning the safe harbor exception, we conclude, as we did in Anderson, that
"almost all of the ... factors provide powerful reasons to conclude as a matter of
law that [the employer] both established and maintained an employee welfare
benefit plan governed by ERISA." See id. at 1267.
38
With regard to the first Butero factor, as noted previously, Southeastern Steam
stated in its employee handbook that disability insurance was an available
benefit. Some courts have concluded that this alone is enough to trigger ERISA
governance. See, e.g., Cockey v. Life Ins. Co. of N. Am., 804 F.Supp. 1571,
With the possible exceptions of the disclosure of Unum Life's 1-800 number to
certain employees and the word-of-mouth publicity for the Unum Life
representative's visit to the company, which are not particularly probative of
whether Southeastern Steam established or maintained the plan, there are no
relevant facts discussed on appeal regarding Southeastern Steam's oral
representations to its employees, so we move on to the third Butero factor.
Here, Southeastern Steam, similar to the employer in Anderson, "established a
fund to pay benefits [and] selected the UNUM plan as the sole long term
disability plan . . . and limited eligibility to [certain employees]." See Anderson,
369 F.3d at 1265 (citation omitted). By applying for UNUM Life coverage on
behalf of its employees, and deciding on key terms in the plan agreement,
Southeastern Steam made the plan "a benefit closely tied to the employeremployee relationship." Id. at 1265-66.
40
41
The fifth and sixth Butero factors also favor the Appellees. It is not simply the
"subjective" understanding of individual employees like Carter (who admitted
she did not read the enrollment form) and Moorman, who maintained that they
believed Southeastern Steam was not offering the plan, but rather the viewpoint
of the objectively reasonable employee that is the primary consideration in this
analysis. See Anderson, 369 F.3d at 1266-67; Johnson v. Watts Regulator Co.,
63 F.3d 1129, 1135 (1st Cir.1995) (conducting ERISA analysis from "the
viewpoint of an objectively reasonable employee"). Here, Southeastern Steam
created and distributed the employee handbook, which referenced the plan in
question as an available benefit for all its full-time employees.2 Moreover, the
employees signed the enrollment forms that indicated Southeastern Steam was
The seventh Butero factor favors Moorman. More specifically, while some of
the actions of Southeastern Steam suggest otherwise, it does not appear, based
on Carter and Moorman's affidavits, that Southeastern Steam company officials
had the intent to establish or maintain the plan at issue. This factor is not
dispositive, however, because ERISA can apply "regardless of the intent of the
plan administrators and fiduciaries" if the plan "satisfies the statutory
definition." Anderson, 369 F.3d at 1264.
43
taken at the behest of the Appellees. This argument fails for two reasons: As
already discussed, there were several actions that Southeastern Steam
undertook on its own initiative, most notably the inclusion of the disability plan
in the employee handbook and the assistance provided by Carter to
Southeastern Steam employees. Furthermore, even if Southeastern Steam
undertook actions at the behest of the Appellees, our primary inquiry must be
from the vantage point of the objectively reasonable understanding of the
employees, who may be unaware of the motivations behind their employer's
actions. See Anderson, 369 F.3d at 1266-67.
44
While there may be fewer facts to show that the employer established or
maintained the plan than there were in Anderson and Butero, insofar as the plan
booklets in this case were not widely distributed and few employees submitted
claims, those cases do not represent the absolute minimum of what must be
proven to show establishment or maintenance. We do not believe that Congress
established ERISA to prejudice the rights of employees or to needlessly squelch
state law actions that would otherwise provide a superior avenue for the
vindication of such rights. Instead, as noted previously, the raison d'etre of
ERISA was "to promote the interests of employees and their beneficiaries" and
"to protect contractually defined benefits." Firestone Tire & Rubber Co., 489
U.S. at 113, 109 S.Ct. at 956. The bar triggering ERISA governance, therefore,
should not be set too high.
45
Thus, reviewing the Butero factors previously discussed, and keeping in mind
the underlying purposes of ERISA, we conclude that the plan in this case is
governed by ERISA. In reaching this decision, we note that Moorman does not
forfeit his rights against the Appellees; rather, he must litigate most, if not all,
of his claims under ERISA, a statutory scheme enacted by Congress to protect
the rights of employees such as Moorman.3
D. Moorman's Federal RICO Claims
46
47
47
48
49
The scope of review on appeal under 28 U.S.C. 1292(b) "is not limited to the
precise question certified by the district court because the district court's order,
not the certified question, is brought before the court." Aldridge v. Lily-Tulip,
Inc. Salary Ret. Benefits Comm., 40 F.3d 1202, 1207 (11th Cir.1994). Under
1292(b), appellate review, even for certified questions, is discretionary.
McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1259 (11th Cir.2004). "The
proper division of labor between the district courts and the court of appeals and
the efficiency of judicial resolution of cases are protected by the final judgment
rule, and are threatened by too expansive use of the 1292(b) exception to it.
Because permitting piecemeal appeals is bad policy, permitting liberal use of
1292(b) interlocutory appeals is bad policy." Id. By extension, review by
appellate courts of noncertified questions is also discretionary. Cf. id.
50
There is no reason why the district court should not be afforded the opportunity
to answer this question more fully in the first instance. In their motion to
dismiss Moorman's RICO claim, Appellees did raise the issue before the
district court, albeit briefly, and cited two cases: Pilot Life Ins. Co. v. Dedeaux,
481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987), and Gilbert v. Alta Health
& Life Ins. Co., 276 F.3d 1292 (11th Cir.2001). R1-3 at 24. However, we note
that Appellees thereafter did not request reconsideration of that court's ruling on
the issue. Rather, in its response to Moorman's motion for certification,
Appellees for the first time requested, in the event that the district court
certified the ERISA governance question for appeal, that the district court also
certify the RICO question. R7-50 at 5.
51
The federal RICO issue is heavily briefed by Appellees on appeal, and includes
new theories not raised below (e.g., the proper application of a statute
concerning ERISA's preclusive effect, 29 U.S.C. 1144, on federal laws
enacted both before and after ERISA's enactment). However, Appellees failed
to afford the district court the same opportunity for review. Even if this issue
presents a matter of first impression in our circuit, this is not a circumstance that
would warrant preemptive appellate review and resolution of an issue not fully
addressed by the district court, and we decline to liberally use 1292(b) in the
manner urged by Appellees. See McFarlin, 381 F.3d at 1259.
52
Appellees also claim that Moorman failed to allege a viable RICO claim
because it lacked particularity. This question was also not certified for appeal.
For similar reasons regarding our refusal to address Appellees' first RICO
argument, we will not address this issue on appeal.
III. CONCLUSION
53
54
AFFIRMED.
Notes:
*
Honorable Arthur L. Alarcon, United States Circuit Judge for the Ninth Circuit,
sitting by designation
While Carter stated that she did not distribute the plan booklets and certificates
to Southeastern Steam employees, which contained explicit language regarding
ERISA governance, she admitted that she gave one booklet to Moorman upon
his request and took one home for herself. R.Exh. at 76
Because Moorman does not ask us to review the district court's conclusions
regarding the extent to which ERISA preempts his state law claims,see
Appellant's Br. at 46, we need not address that issue.