United States District Court, D. Montana, Missoula Division
THE DEPOT, INC., a Montana Corporation, UNION CLUB BAR, INC., a Montana Corporation, and TRAIL HEAD, INC., a Montana Corporation, on behalf of themselves and all those similarly situated, Plaintiffs,
CARING FOR MONTANANS, INC., F/K/A BLUE CROSS AND BLUE SHIELD OF MONTANA, INC, HEALTH CARE SERVICE CORP, and JOHN DOES I-X, Defendants.
L. Christensen, United States District Chief Judge.
the Court is the renewed joint motion to dismiss of
Defendants Caring for Montanans, Inc. ("CFM") and
Health Care Service Corporation ("HCSC"). On
February 14, 2017, this Court granted Defendants' first
motion to dismiss, granting Plaintiffs leave to amend their
complaint. Plaintiffs filed their First Amended Complaint
("FAC") on March 8, 2017. Defendants now argue that
Plaintiffs have failed to remedy the deficiencies identified
in this Court's earlier order and that all claims should
be dismissed with prejudice. The Court agrees.
a motion to dismiss, material allegations of the complaint
are taken as admitted, and the complaint is to be liberally
construed in favor of the plaintiff." Kennedy v.
H&MLanding, Inc., 529 F.2d 987, 989 (9th Cir. 1976).
Court's Order of February 14, 2017 recounts the general
history leading up to the initiation of this putative class
action on June 13, 2016. Following that Order, Plaintiffs
filed the FAC. In addition to the allegations included within
the original complaint, the FAC alleges that the relationship
between Defendants and Plaintiffs was distinguishable from
the average insured/insurer relationship because Defendants
were able to modify the terms of the insurance arrangement
during the calendar year. Plaintiffs, all of which are small
businesses, further claim that they are uncommonly dependant
on Defendants' services due to their lack of
sophistication in selecting and administering employee
from the modified factual allegations, the FAC also presents
new legal theories. Plaintiffs allege two new claims under
Montana law, claims for fraudulent inducement and
constructive fraud. They have reframed their claim for
negligent misrepresentation, asking the Court to consider
only the conduct predating the creation of the ERISA plan.
12(b)(6) motions test the legal sufficiency of a pleading.
Fed.R.Civ.P. 12(b)(6). Under Federal Rule of Civil Procedure
8(a)(2), a complaint must contain "a short and plain
statement of the claim showing that the pleader is entitled
to relief." "To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to 'state a claim to relief that is plausible on
its face.'" Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A claim has facial
plausibility when the court can draw a "reasonable
inference" from the facts alleged that the defendant is
liable for the misconduct alleged. Id.
briefings on Defendants' renewed motion to dismiss are
largely duplicative of those filed on the first motion to
dismiss. The parties have not presented legal argument
suggesting that the Court erred in its Order granting
Defendants' first motion to dismiss. Thus, the Court
addresses only whether Plaintiffs' amendments to the
complaint alter the outcome, referring generally to its
earlier Order for the relevant legal principles.
Count I: Breach of Fiduciary Duty under ERISA
most significant differences between the original complaint
and the FAC are designed to support Plaintiffs' argument
that Defendants are fiduciaries under ERISA. Plaintiffs have
alleged additional facts, all of which are intended to show
that the relationship between Plaintiffs and Defendants was
"extraordinary" -beyond the scope of the normal
insurer/insured relationship. Much of Plaintiffs' brief
is targeted to this point. However, Plaintiffs' argument
that this particular insurer/insured relationship differs
from others misconstrues Defendants' arguments and this
Court's earlier order. Even if the parties did not have
equal bargaining power, the relationship was ordinary in the
sense that Defendants sold insurance, and Plaintiffs
purchased that insurance. Plaintiffs have not alleged that
Defendants advised them in any way regarding insurance
products, only that Plaintiffs depended on Defendants to
consider their best interests. While the Court is sympathetic
to Plaintiffs, particularly considering that they are small
businesses dependent primarily on an unskilled workforce, it
does not alter the Court's reasoning. Plaintiffs'
expectations of Defendants-which may, indeed, include that
Defendants would act as a fiduciary should-cannot be used to
support their claim that ERISA considers Defendants to be
it may be true that Plaintiffs were somewhat vulnerable in
negotiating their insurance contracts with Defendants, it
does not follow that Defendants were fiduciaries with respect
to the relevant conduct-assessing and collecting premium
moneys. The FAC does not change the reasoning set forth in
this Court's earlier Order regarding Defendants'
alleged exercise of discretion over plan management or
Defendants had no discretionary authority or control over
plan management or administration, even if Plaintiffs
mistakenly believed that they did. The phrases "plan
management" and "administration" do not refer
to an insurer's selection of insurance products but
rather to the plan manager or administrator's conferral
of benefits and dealings with beneficiaries. See, e.g.,
Varity Corp. v. Howe,516 U.S. 489, 502-03 (1996). In
the present case, it is Plaintiffs, not Defendants, who were
fiduciaries under the administration and management theory.
Plaintiffs' dependence on Defendants' insurance
expertise does not ...