ERISA recites in § 502(d)(1) that a plan can sue and be sued as an entity. Does such a legislative pronouncement, in and of itself, establish the plan as a juristic person? Further, does Congress’s declaration that a plan can be sued suggest that no other person or entity can be held liable in an ERISA § 502(a)(1)(B) benefits claim? Relying upon ERISA § 502(d)(1), long-standing authority in the Ninth Circuit Court of Appeals, and in other circuits, holds that the plan, and only the plan, is a proper party defendant in an ERISA § 502(a)(1)(B) benefits claim. That is silly. A plan may be funded or unfunded. If a plan is funded through a trust, the trustee is a juristic person that controls the assets of the trust, which assets can be applied to satisfy a § 502(a)(1)(B) judgment. Particularly when a plan is unfunded, it “owns” no assets. A plan is not a person—it is not an individual or a partnership, and plans are neither incorporated nor are they unincorporated associations.

A plan is not any kind of traditionally recognized juristic person. Rather, a plan is a contract; and a plan participant’s § 502(a)(1)(B) benefits claim seeks to recover money damages for breach of the plan contract. The plan sponsor establishes the plan and is the primary obligor responsible to satisfy the promises it made to covered workers as detailed in the written plan contract. In order to enforce the sponsor’s promises and to collect any possible judgment obtained in a § 502(a)(1)(B) benefits claim, the obligor under the plan contract (the sponsor), plus any other party that assumes liability under the plan contract by agreement with the plan sponsor (a trustee or an insurer), must be party defendants.

ERISA does not expressly limit the universe of possible defendants that can be liable in a § 502(a)(1)(B) benefits claim. In fact, Congress expressly contemplated that there may be defendants beyond just the plan when it specified in § 502(d)(2) that any money judgment obtained against a plan shall not be enforceable against any other person “unless liability against such person is established in his individual capacity . . .” While a number of courts have now created some exceptions to the strict Ninth Circuit rule that only a plan can be sued in a § 502(a)(1)(B) claim, and have allowed benefit claimants to also sue parties that “control” ERISA claims decisions, these courts have failed to identify the legal paradigm that supports their decisions.

At last, the Seventh Circuit Court of Appeals has recognized that a plan insurer can be held liable in an ERISA § 502(a)(1)(B) claim because the insurer is an obligor under the plan contract. All courts should follow the Seventh Circuit’s lead, and recognize that a § 502(a)(1)(B) claim seeks legal relief for breach of the plan contract, with all that holding entails for ERISA benefit claim processes. With that result, we will the not have to worry, as a practical matter, whether the plan “entity” is a juristic person.