Marla Knudsen v. METLIFE GROUP, INC. On Appeal from the United States District Court for the…

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 23-2420
_____________
MARLA KNUDSEN; WILLIAM DUTRA, AS
REPRESENTATIVES OF A CLASS OF SIMILARLY
SITUATED PERSONS, AND ON BEHALF
OF THE METLIFE OPTIONS & CHOICES PLAN,
Appellants
v.
METLIFE GROUP, INC.
_______________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2:23-cv-00426)
District Judge: Honorable William J. Martini
_______________
Argued: May 21, 2024
Before: RESTREPO, FREEMAN, and MCKEE, Circuit
Judges.
(Opinion filed: September 25, 2024)

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Charles Gokey [Argued]
Carl F. Engstrom
Engstrom Lee
323 N Washington Avenue
Suite 200
Minneapolis, MN 55401
Counsel for Appellants
James O. Fleckner
Christopher J.C. Herbert
David Rosenberg
Goodwin Procter
100 Northern Avenue
Boston, MA 02210
Jaime A. Santos [Argued]
Goodwin Procter
1900 N Street NW
Washington, DC 20036
Counsel for Appellee
_______________
OPINION OF THE COURT
_______________
McKEE, Circuit Judge.
The Employee Retirement Income Security Act, 29
U.S.C. § 1001 et seq. (“ERISA”), is a rather complicated
statute that uniformly regulates employee benefit plans, like
pension plans and certain health insurance plans, to protect
plan participants and beneficiaries.1
Named Plaintiffs Marla Knudsen and William Dutra
bring this putative ERISA class action on behalf of participants
1 Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 323–24
(2016); Aetna Health Inc. v. Davila, 542 U.S. 200, 208
(2004).

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in the MetLife Options & Choices Plan (the “Plan”) against
Defendant MetLife Group, Inc. (“MetLife”), the asserted Plan
administrator and fiduciary. Plaintiffs claim that their former
employer, MetLife, has misappropriated the Plan’s funding in
violation of ERISA. Plaintiffs allege that MetLife’s illegal
conduct has caused them to pay higher out-of-pocket costs,
mainly in the form of insurance premiums, and that MetLife
owes them those misappropriated funds. More specifically,
Plaintiffs allege that MetLife violated its ERISA obligations by
diverting $65 million in drug rebates from the Plan to itself
from 2016 to 2021. The District Court dismissed Plaintiffs’
suit for lack of standing, and this appeal followed. For the
reasons that follow, we will affirm.
I.
A.
MetLife “sponsors the Plan to provide” medical,
prescription drug, dental, disability, life insurance, and other
“benefits to its employees and employees of its affiliates and
their families.”2 MetLife is the “administrator” of the Plan
within the meaning of 29 U.S.C. § 1002(16)(A)3 and the
asserted “fiduciary” and “party-in-interest” to the Plan within
the meaning of 29 U.S.C. §§ 1002(14)(A)–(C), (21)(A), and
1102(a).4
The Plan was established on January 1, 1992, and as of
December 31, 2021, it had 36,962 participants and over $1.4
billion in assets.5 “The Plan is self-funded, meaning that
benefits are paid by a trust holding plan assets or by . . .
[MetLife], and not by a third-party insurance company.”6
MetLife is responsible for paying the claims and bearing the
financial risk associated with making those payments. The
Plan has two primary funding sources: Plan participants’ health
insurance premiums and MetLife’s contributions.7 “After
collecting the employee portion of the cost of coverage,
[MetLife] transfers the total cost of coverage to several trust
funds held by the Plan. During the last five years, Plan
2 Compl. ¶ 9, JA 114; see id. ¶ 16, JA 116.
3 MetLife Options and Choices Plan, SA 008.
4 Compl. ¶¶ 10–12, JA 114–15.
5 Id. ¶¶ 16– 17, JA 116.
6 Id. ¶ 19, JA 116.
7 Id. ¶ 20, JA 116–17.

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participants have paid . . . around 30% of overall contributions
to the Plan.”8 After accounting for any co-pay (a fixed fee paid
at the point of service for medical care or prescription drugs),
deductible (an amount the insured pays for medical services or
drugs before the Plan will pay covered expenses), or co-
insurance (a percentage of the cost of medical services or drugs
that the insured pays after satisfying the deductible) paid by
Plan participants, either the Plan pays claims from the trust
funds9 or MetLife pays claims from its own general assets.10
During the relevant period, the Plan hired Express
Scripts as its exclusive pharmacy benefit manager (“PBM”)
and paid Express Scripts between $3.2 million and $6.3 million
in annual compensation. Pursuant to their agreement, Express
Scripts “negotiate[d] volume discounts and rebates with drug
manufacturers.”11 Plan documents expressly provided that
MetLife would receive prescription-drug rebates from Express
Scripts and “appl[y] these [rebates] toward[] Plan expenses.”12
But, according to the Plan documents, “[t]hese rebates are not
considered in calculating any co-payments or Coinsurance
under the Plan.”13 From 2016 to 2021, “the Plan was credited
with approximately $65 million in drug rebates pursuant to its
contract with Express Scripts.”14 However, MetLife directed
100% of the $65 million in drug rebates to itself.
Relying on several court cases and United States
Department of Labor advisories, Plaintiffs assert that
MetLife’s contract with Express Scripts was itself a Plan asset.
Plaintiffs also assert that the rebates were Plan assets because
“they were received as a result of MetLife’s exercise of its
fiduciary authority in entering into the PBM contract and/or
allocating the rebates, and were obtained at the expense of plan
participants.”15 Consequently, in their Complaint, Plaintiffs
assert that MetLife violated ERISA when MetLife directed the
8 Id. ¶ 21, JA 117.
9 Id. ¶ 22, JA 117.
10 See MetLife Options and Choices Plan, SA 015.
11 Compl. ¶ 27, JA 119.
12 Summary Plan Description, SA 220.
13 Id.
14 Compl. ¶ 31, JA 121.
15 Id. ¶ 30, JA 120.

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$65 million in rebates, i.e., plan assets, to itself instead of to
the Plan.
Plaintiffs claim they would have received “multiple
benefits” if MetLife had not violated ERISA:16
First, it may have been consistent with its
fiduciary duties for [MetLife] to reduce
ongoing contributions on account of the
rebates collected by the Plan. Second,
[MetLife] may have . . . reduced co-pays and
co-insurance for pharmaceutical benefits.
Third, [MetLife] may have distributed rebates
to participants in proportion to their
contributions to the Plan.17
The purported effect of the claimed violations is that Plaintiffs
“did not receive these benefits, and therefore paid excessive
amounts toward the cost of coverage, co-pays, and/or co-
insurance [(collectively, ‘out-of-pocket costs’)], and have
otherwise been denied their equitable interest in Plan drug
rebates.”18
Knudsen and Dutra were MetLife employees during the
relevant period. They participated in the Plan for medical and
prescription drug coverage for themselves and their
dependents, and they paid for their coverage through payroll
deductions. As Plan participants, Knudsen and Dutra paid “a
fixed percentage (depending on job title and coverage type) of
contributions for spousal and dependent coverage.”19 They
respectively paid about $400 and $500 per month.20 They also
paid out of pocket to cover residual prescription drug costs that
were not fully covered by the Plan.
16 Id. ¶ 36, JA 123.
17 Id.
18 Id. ¶ 37, JA 123. On appeal, Plaintiffs acknowledged that
Plan documents “inform[] insureds that any co-payment or
coinsurance they owe for a given drug purchase will not be
offset by any rebates paid on that drug purchase.” Pl. Br. 22–
23. As a result, they framed their alleged injury as paying
increased premiums.
19 Compl. ¶¶ 13–14, JA 115.
20 Id.

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Plaintiffs seek to represent a class of “[a]ll participants
and beneficiaries of the Plan since January 24, 2017,”
excluding fiduciaries.21 Their Complaint sets forth four
claims: Count I alleges a violation of 29 U.S.C. § 1103(a), (c)
because MetLife “failed to hold Plan assets in trust and instead
transferred Plan assets to itself for its own benefit”; Count II
alleges a violation of 29 U.S.C. § 1106(a)(1)(D) because
MetLife illegally transacted with a party-in-interest; Count III
alleges a violation of 29 U.S.C. § 1106(b)(1), (b)(3) because
MetLife illegally transacted with itself as fiduciary of the Plan;
and Count IV alleges that MetLife breached ERISA’s
Fiduciary Standard of Care, 29 U.S.C. § 1104(a)(1).22
Plaintiffs seek disgorgement of profits as well as injunctive and
declaratory relief.
B.
The District Court dismissed Plaintiffs’ Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack
of Article III standing and denied as moot MetLife’s Rule
12(b)(6) motion to dismiss for failure to state a claim. The
District Court concluded that “Plaintiffs do not have a concrete
stake in the outcome of this lawsuit and have not pled facts to
demonstrate an individualized injury.”23 Relying primarily on
the Supreme Court’s decision in Thole v. U.S. Bank N.A.,24 and
our decision in Perelman v. Perelman,25 the District Court
explained that “Plan participants here have no legal right to the
general pool of Plan assets,” and “any asserted injury to the
Plan is not an injury to Plaintiffs themselves.”26 Furthermore,
the Court “observe[d] that Plaintiffs do not contend that they
did not receive their promised benefits” but instead “allege that
they paid excessive out-of-pocket costs.”27 The District Court
explained that excessive out of pocket costs are “not an
individual injury” “in the context of this kind of defined
21 Id. ¶ 43, JA 125.
22 Id. ¶¶ 52–67, JA 127–29.
23 Knudsen v. Metlife Grp., Inc., No. 2:23-CV-00426 (WJM),
2023 WL 4580406, at *6 (D.N.J. July 18, 2023).
24 590 U.S. 538 (2020).
25 793 F.3d 368 (3d Cir. 2015).
26 Knudsen, 2023 WL 4580406, at *5.
27 Id.

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benefit-type Plan.”28 The Court reasoned that Plaintiffs’
allegations that MetLife “‘may’ have reduced co-pays and co-
insurance or that Plan participants ‘may’ have received a
proportionate distribution of rebates,” if not for MetLife’s
purported ERISA violations, were “speculative and
conclusory.”29 The Court based its holding on the Complaint’s
lack of factual matter that MetLife’s ERISA violations either
caused Plaintiffs to pay more for their health insurance benefits
or deprived them of those benefits.30 Accordingly, the Court
concluded that it was mere “conjecture” whether, if successful,
Plaintiffs’ suit would result in either reduced out-of-pocket
costs for, or distribution of disgorged funds to, Plan
participants.31
II.
The District Court properly exercised jurisdiction over
this action pursuant to 28 U.S.C. § 1331. We have appellate
jurisdiction to review the appeal pursuant to 28 U.S.C. §
1291.32
When a case is dismissed at the pleading stage for lack
of standing, our review focuses on whether the complaint
“contain[s] sufficient factual matter that would establish
standing if accepted as true.”33 The burden of establishing
28 Id. (citations omitted).
29 Id. (quoting Compl. ¶ 36, JA 123).
30 Id.
31 Id.
32 Since the District Court dismissed the Complaint for lack
of standing pursuant to Federal Rule of Civil Procedure
12(b)(1), the Order of Dismissal is a final order even though
the Complaint was dismissed without prejudice. See Cottrell
v. Alcon Labs., 874 F.3d 154, 164 n.7 (3d Cir. 2017)
(“Because the absence of standing leaves the court without
subject matter jurisdiction to reach a decision on the merits,
dismissals ‘with prejudice’ for lack of standing are generally
improper.” (citation omitted)).
33 In re Horizon Healthcare Servs. Inc. Data Breach Litig.,
846 F.3d 625, 633 (3d Cir. 2017) (internal quotation marks
omitted). We are also free to review several Plan documents
provided by MetLife (Express Scripts PBM Agreement,

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standing rests with the plaintiff.34 A complaint dismissed
pursuant to Federal Rule of Civil Procedure 12(b)(1) “is
[reviewed] de novo, accepting the facts alleged in the
complaint as true and construing the complaint in the light
most favorable to the non-moving party.”35 As always, our
review must rest on “well-pleaded factual allegations” and not
“mere conclusory statements.”36 Failure to allege facts “that
affirmatively and plausibly suggest . . . standing to sue” will
result in dismissal of the complaint.37
III.
“Under Article III, a case or controversy can exist only
if a plaintiff has standing.”38 To establish Article III standing,
a plaintiff must show three “irreducible” elements.39 “The
plaintiff must have (1) suffered an injury in fact, (2) that is
fairly traceable to the challenged conduct of the defendant, and
(3) that is likely to be redressed by a favorable judicial
decision.”40
An injury-in-fact is “an invasion of a legally protected
interest which is (a) concrete and particularized and (b) actual
or imminent, not conjectural or hypothetical.”41 “To be
MetLife Options and Choices Plan, and the Summary Plan
Description), given that they were considered by the District
Court, Plaintiffs have not objected to their authenticity, and
these documents are integral to the Complaint. See Est. of
Roman v. City of Newark, 914 F.3d 789, 796–97 (3d Cir.
2019).
34 Finkelman v. Nat’l Football League (“Finkelman I”), 810
F.3d 187, 194 (3d Cir. 2016) (citing Berg v. Obama, 586 F.3d
234, 238 (3d Cir. 2009)).
35 Potter v. Cozen & O’Connor, 46 F.4th 148, 153 (3d Cir.
2022).
36 Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009).
37 Finkelman I, 810 F.3d at 194 (quoting Amidax Trading
Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011)).
38 United States v. Texas, 599 U.S. 670, 675 (2023).
39 Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992).
40 Spokeo v. Robins, 578 U.S. 330, 338 (2016).
41 In re Schering Plough Corp. Intron/Temodar Consumer
Class Action, 678 F.3d 235, 244 (3d Cir. 2012) (quoting
Lujan, 504 U.S. at 560).

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‘concrete,’ an injury must be ‘real, or distinct and palpable, as
opposed to merely abstract.’”42 “[T]o be sufficiently
‘particularized,’ an injury must ‘affect the plaintiff in a
personal and individual way.’”43 Establishing an injury-in-fact
at the motion to dismiss stage “is not Mount Everest. The
contours of the injury-in-fact requirement, while not precisely
defined, are very generous, requiring only that [a] claimant
allege[] some specific, identifiable trifle of injury.”44 The
focus of the injury-in fact inquiry is “whether the plaintiff
suffered harm.”45
“Fair traceability requires a causal connection between
the injury-in-fact and a defendant’s conduct; the injury cannot
result from ‘the independent action of some third party not
before the court.’”46 To establish a causal connection, the
plaintiff must at least allege that the defendant’s challenged
action is the “but for” cause of the injury, “even where the
conduct in question might not have been the proximate cause
of the harm.”47
Finally, a plaintiff establishes redressability by showing
“that it is ‘likely, as opposed to merely speculative,’ that the
alleged injury will be redressed by a favorable decision.”48
While traceability looks backward and asks, “did the
42 Finkelman I, 810 F.3d at 193 (quoting N.J. Physicians, Inc.
v. President of the United States, 653 F.3d 234, 238 (3d Cir.
2011)).
43 Id. (quoting Lujan, 504 U.S. at 560 n.1).
44 In re Horizon, 846 F.3d at 633 (alteration in original)
(quoting Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 278
(3d Cir. 2014)).
45 Toll Bros. v. Twp. of Readington, 555 F.3d 131, 142 (3d
Cir. 2009).
46 Lutter v. JNESO, 86 F.4th 111, 127 (3d Cir. 2023) (quoting
Lujan, 504 U.S. at 560).
47 Edmonson v. Lincoln Nat’l Life Ins. Co., 725 F.3d 406, 418
(3d Cir. 2013) (citing The Pitt News v. Fisher, 215 F.3d 354,
360–61 (3d Cir.2000)).
48 Finkelman I, 810 F.3d at 194 (quoting Lujan, 504 U.S. at
561).

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defendant[] cause the harm?” redressability looks forward and
asks, “will a favorable decision alleviate the harm?”49
Plaintiffs’ theory of standing can be summarized as:
Plaintiffs paid more for their health insurance because MetLife
illegally kept $65 million in rebates instead of using those
rebates to reduce Plaintiffs’ out-of-pocket expenses. The
District Court determined that Thole and Perelman
categorically bar an ERISA plaintiff’s assertion of injury based
on increased out-of-pocket costs and therefore Plaintiffs lacked
standing. While we do not read those precedents so broadly,
we nevertheless agree that Plaintiffs have not established
injury-in-fact.
In Perelman, we confronted whether a pension plan
beneficiary had standing to bring an ERISA suit and dismissed
for lack of standing.50 There, Jeffrey Perelman was a
participant in General Refractories Company’s employee
pension plan—a defined-benefit plan.51 He alleged that his
49 Toll Bros., 555 F.3d at 142.
50 793 F.3d at 373–76.
51 Id. at 371. “A defined benefit plan . . . consists of a general
pool of assets rather than individual dedicated accounts. Such
a plan, as its name implies, is one where the employee, upon
retirement, is entitled to a fixed periodic payment. The asset
pool may be funded by employer or employee contributions,
or a combination of both.” Hughes Aircraft Co. v. Jacobson,
525 U.S. 432, 439 (1999) (citations and internal quotation
marks omitted). On the other hand, a “defined contribution
plan is one where employees and employers may contribute
to the plan, and the employer’s contribution is fixed and the
employee receives whatever level of benefits the amount
contributed on his behalf will provide. A defined
contribution plan provides for an individual account for each
participant and for benefits based solely upon the amount
contributed to the participant’s account.” Id. (citations and
internal quotation marks omitted). On the other hand,
employee sponsored health plans typically come in two
varieties: fully insured or self-funded plans. N. Cypress Med.
Ctr. Operating Co., Ltd. v. Aetna Life Ins. Co., 898 F.3d 461,
468 (5th Cir. 2018). “Under fully insured ERISA plans [the

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father, Raymond Perelman, as trustee of the plan, “breached
his fiduciary duties by covertly investing [p]lan assets in the
corporate bonds of struggling companies owned and controlled
by Jeffrey’s brother.”52
Jeffrey argued that he established injury in fact in two
ways: first, he was injured because the plan “suffered a net
diminution in assets of approximately $1.3 million,” and
second, “due to this diminution in assets, the [p]lan’s risk of
default increased dramatically.”53 In rejecting Jeffrey’s first
argument, we reasoned that pension plan participants could not
establish injury-in-fact based on financial harm to plan assets
because participants “are entitled only to a fixed periodic
payment, and have no ‘claim to any particular asset that
composes a part of the plan’s general asset pool.’”54 We
suggested that although Jeffrey’s second argument, the
increased risk of theory, might be legally cognizable,55 it was
“entirely speculative” under the alleged circumstances.56
Several years later, in Thole, the Supreme Court
essentially agreed with our analysis in Perelman. In Thole, the
Supreme Court held that the plaintiffs—also pension plan
participants—did not have a “concrete stake” in their ERISA
suit because even if the fiduciary illegally caused a $750
million loss to the plan’s assets, the plaintiffs “would still
receive the exact same monthly benefits that they [we]re
already slated to receive.”57
The Thole plaintiffs were two retired participants in the
defendant U.S. Bank’s retirement plan.58 “Of decisive
insurer] acts as a direct insurer; it guarantees a fixed monthly
premium . . . and bears the financial risk of paying claims.
But under self-funded ERISA plans, [the insurer] acts only as
a third-party administrator; the employer is responsible for
paying claims and bearing the financial risk.” Id.
52 Id. at 370.
53 Id. at 373–74.
54 Id. at 374 (quoting Hughes Aircraft, 525 U.S. at 440).
55 Id. 374–75.
56 Id. at 375.
57 590 U.S. at 541.
58 Id. at 540.

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importance” to the Court’s decision was that the retirement
plan was a defined-benefit plan, as opposed to a defined-
contribution plan, such that “retirees receive[d] a fixed
payment each month, and the payments d[id] not fluctuate with
the value of the plan or because of the plan fiduciaries’ good
or bad investment decisions.”59 The plaintiffs had “been paid
all of their monthly pension benefits” that they were “legally
and contractually entitled to receive.”60
Thus, the Court concluded that the plaintiffs lacked
standing because the “outcome of th[e] suit would not affect
their future benefit payments.”61 In contrast, had the plaintiffs
“not received their vested pension benefits, they would of
course have [had] Article III standing to sue.”62 The Court
declined to answer whether plan participants would have
standing “if the mismanagement of the plan was so egregious
that it substantially increased the risk that the plan and the
employer would fail and be unable to pay the participants’
future pension benefits.”63
MetLife argues that Thole and Perelman resolve this
case in its favor. It reads those cases as holding that a
beneficiary of an ERISA regulated defined-benefit plan has no
injury unless the plan participants plead that they did not
receive promised benefits, i.e., reimbursement of healthcare
claims, or that there is a substantial likelihood that the plan will
default, i.e., that insurance benefits will not be paid. According
to MetLife, it makes no difference that Thole and Perelman
were concerned with pension plans as opposed to health
insurance plans because both, according to MetLife, are
defined-benefit plans, under which the plan sponsor bears all
of the risk of paying benefits. MetLife also argues that any
increase, no matter how great, in participants’ insurance costs
is immaterial to the injury analysis so long as Plaintiffs receive
their insurance benefits.
59 Id.
60 Id.
61 Id. at 541.
62 Id. at 542.
63 Id. at 546.

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Conversely, Plaintiffs argue that the dissimilarities
between the pension plans in Thole and Perelman and the self-
sponsored health plan here, makes all the difference. They
point out that benefits in pension plans accrue over years, and
once earned, the benefits, i.e., pension payments, are fixed and
paid at regular intervals. In contrast, participants in a self-
funded health plan pay for their benefits through payroll
deductions in the form of premiums, and the plan sponsor can
annually change both the amount of the premium (and other
out-of-pocket costs) and the benefits to which a participant is
entitled.
As a purely theoretical proposition, we agree with
Plaintiffs. Thus, we decline to hold that Thole and Perelman
require dismissal, under Article III, whenever a participant in a
self-funded healthcare plan brings an ERISA suit alleging that
mismanagement of plan assets increased his/her out-of-pocket
expenses. While MetLife is correct that sponsors of self-
funded health insurance plans, like pension plans, bear all the
risk of distributing benefits to beneficiaries, we cannot ignore
a more fundamental tenet of injury-in-fact: financial harm,
“even if only a few pennies, . . . is a concrete, non-speculative
injury.”64 A contrary conclusion, would mean that MetLife
could charge Plan participants thousands of dollars more in
premiums than is allowed under Plan documents, resulting in
potential ERISA violations, and Plan participants would have
no judicial recourse to seek return of their overpayments.
Thole and Perelman command no such result, and in a different
case, a plaintiff may well establish such a financial injury
sufficient to satisfy Article III.65
64 Wallace v. ConAgra Foods, Inc., 747 F.3d 1025, 1029 (8th
Cir. 2014); accord Danvers Motor Co. v. Ford Motor Co.,
432 F.3d 286, 293 (3d Cir. 2005) (“Monetary harm is a
classic form of injury-in-fact.” (citing Adams v. Watson, 10
F.3d 915, 920–25 & n.13 (1st Cir. 1993))).
65 MetLife also makes much ado about injury-in-fact
requiring a plaintiff to allege the invasion of a legally
protected interest and argues that Plaintiffs have no legally
protected interest in the Plan assets but only in the benefits
they receive. This argument is largely duplicitous of
MetLife’s previously rejected Thole and Perelman-based

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However, the allegations in Plaintiffs’ Complaint fall
short of alleging concrete financial harm. “[S]ometimes
[courts] make standing law more complicated than it needs to
be,” but “[t]here is no ERISA exception to Article III.”66
Instead, we need only apply “ordinary Article III standing
analysis” to determine whether ERISA plaintiffs have
standing.67
Given the standing theory that Plaintiffs advance, their
Complaint must include nonspeculative allegations, that if
proven, would establish that they have or will pay more in
premiums, or other out-of-pocket costs, as a result of MetLife
not applying the $65 million in rebates to the Plan.68 In other
words, they need to allege economic harm. To do so,
Plaintiffs’ “pleadings must be something more than an
ingenious academic exercise in the conceivable.”69 And while
we “presum[e] that general allegations embrace those specific
facts that are necessary to support the claim,”70 “allegations
that stand on nothing more than supposition” cannot establish
financial harm.71
Several of our precedents are instructive. In Finkelman
v. Nat’l Football League (“Finkelman I”), the plaintiffs alleged
that the NFL violated New Jersey’s Ticket Law because its
method of selling tickets to Super Bowl XLVIII inflated ticket
argument but with a slightly different doctrinal gloss. In
Cottrell, we explained that “financial . . . interests are ‘legally
protected interests’ for purposes of the standing doctrine” and
identifying such an interest in a complaint is not dependent on
whether the alleged conduct violates a statute or breaches a
contract. 874 F.3d at 164. MetLife’s argument that Plan
documents do not entitle Plaintiffs to pay any certain amount
in insurance premiums is more befit a Rule 12(b)(6) motion,
not 12(b)(1). See id.
66 Thole, 590 U.S. at 547.
67 Id.
68 Cottrell, 874 F.3d at 168.
69 United States v. Students Challenging Regul. Agency
Procs., 412 U.S. 669, 688 (1973).
70 Lujan, 504 U.S. at 561 (internal quotation marks omitted).
71 Finkelman I, 810 F.3d at 201.

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prices in the resale market.72 The NFL sold 99% of tickets to
NFL insiders and the rest in a public lottery.73 Finkelman
purchased two resale tickets for $800 over face value.74 We
held that Finkelman lacked standing.75
Finkelman’s complaint did not adequately establish his
price inflation theory because it did not allege whether the
NFL’s conduct of selling only 1% of tickets to the public, and
distributing 99% of tickets to insiders, effectively
“increase[ed] or decreas[ed] prices on the secondary market.”76
Instead, the complaint relied on “pure conjecture about what
the ticket resale market might have looked like if the NFL had
sold its tickets differently.”77 Put differently, the allegations
were equally susceptible to an inference of financial harm and
no harm.78
In Finkelman v. Nat’l Football League (“Finkelman
II”), we concluded that Finkelman remedied his standing
problem in his amended complaint.79 Unlike the first
complaint, the amended complaint:
did not just allege that prices would be lower
on the secondary market were it not for the
NFL’s withholding. Instead, Finkelman
alleged a causal chain justifying why the
NFL’s withholding set into motion a series of
events that ultimately raised prices on the
secondary market. Specifically, Finkelman
alleged that the insiders to whom the NFL
presently provides tickets are more likely to
resell those tickets through third-party brokers
to keep those sales anonymous, and those
brokers in turn are more likely to charge
higher prices. But if more tickets were made
available to fans initially, fans would be more
72 Id. at 199–200.
73 Id. at 190.
74 Id.
75 Id. at 189.
76 Id. at 200.
77 Id. at 201.
78 Id. at 200.
79 877 F.3d 504, 512 (3d Cir. 2017).

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likely than the NFL insiders are to sell through
direct fan-to-fan sales, and the prices would
likely be lower.80
Those allegations constituted “economic facts that are specific,
plausible, and susceptible to proof at trial.”81
In Cottrell v. Alcon Laboratories, consumers sued
medicated eye drops manufacturers and distributors, alleging
that the design of the eye drop bottles required the plaintiffs to
administer larger drops than necessary when using the
medication, causing the plaintiffs’ economic injury.82 These
plaintiffs advanced a “pricing theory” of injury-in-fact based
on the cost differential of what they would have paid if the
bottles were better designed.83 As compared to Finkelman I,
the Cottrell plaintiffs’ pricing theory satisfied injury-in-fact
because it did not rest on a series of “presumption[s] essential
to the[] allegations of financial harm” and was instead
anchored by well-pleaded, non-speculative allegations.84 The
allegations were supported by numerous scientific studies
identifying cost savings absent the defendant’s challenged
conduct.85
Here, the allegations are more akin to those we
encountered in Finkelman I than in Finkelman II or Cottrell.
Plaintiffs generally allege that their out-of-pocket costs (co-
pays, co-insurance, premiums) increased, but they do not
allege which out-of-pocket costs increased, in what years, or
by how much. Any increase in costs was determined by
MetLife, but it is incumbent upon Plaintiffs to allege concrete
facts establishing that MetLife’s challenged conduct caused
increased costs.86 The purportedly violative conduct is the
retention of $65 million in PBM drug rebates. But the
Complaint does not include well-pleaded allegations that drug
rebates (or even the total value of plan assets) are, under the
80 Id. at 512.
81 Id. at 513.
82 874 F.3d at 159–60.
83 Id. at 168.
84 Id. at 169.
85 Id. at 168–69.
86 See Finkelman I, 810 F.3d at 201–03.

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Plan documents, used to calculate Plan participants’ out-of-
pocket costs and that the effect of these inputs would decrease
costs. Allegations of this sort are necessary because Plaintiffs
must show that the purported violative conduct was the but-
for-cause of their injury in fact, namely, an increase in their
out-of-pocket costs above what they would have been if
MetLife had deposited the rebate monies into the Plan trust.87
In other words, Plaintiffs must show that they have an
“individual right” to the withheld rebate monies, such that,
MetLife’s purportedly unlawful retention of the monies
harmed Plaintiffs.88 On these allegations, it is speculative that
MetLife’s alleged misappropriation of drug rebate money
resulted in Plaintiffs paying more for their health insurance or
had any effect at all.
Plaintiffs argue that we should fill in the necessary
inferential gaps because general allegations are permitted at the
pleading stage, but any attempt to do so is undermined by
Plaintiffs’ own speculative allegations. According to
Plaintiffs, they would have “received” “multiple benefits” if
MetLife had not misallocated drug rebates:89
First, it may have been consistent with its
fiduciary duties for [MetLife] to reduce
ongoing contributions on account of the
rebates collected by the Plan. Second,
[MetLife] may have . . . reduced co-pays and
co-insurance for pharmaceutical benefits.
Third, [MetLife] may have distributed rebates
to participants in proportion to their
contributions to the Plan.90
These allegations readily permit an inference that even if
MetLife had not committed ERISA violations, it may not have
taken any of these listed actions and Plaintiffs’ out-of-pocket
87 See Edmonson, 725 F. 3d at 418.
88 Id. at 417.
89 Compl. ¶ 36, JA 123.
90 Id.

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costs would have still increased. Such pleadings are not
sufficient to support Article III standing.91
Plaintiffs have simply failed to allege financial harm
that is “actual or imminent,” as opposed to theoretical,
conjectural or hypothetical.92 We end where we began;
Plaintiffs lack Article III standing.93
IV.
For the foregoing reasons, we will affirm the District
Court’s dismissal without prejudice. As always, the District
Court may exercise its discretion on remand in responding to
any request to amend the Complaint.94
91 See Finkelman I, 810 F.3d at 201–03; see also Winsor v.
Sequoia Benefits & Ins. Servs., LLC, 62 F.4th 517, 524 (9th
Cir. 2023) (dismissing health care plan beneficiaries’ ERISA
suit for failure to allege injury-in-fact where plaintiffs did
“not plead[] facts tending to show that [defendant’s] alleged
breach of fiduciary duty led to plaintiffs paying higher
contributions”).
92 Cottrell, 874 F.3d at 163 (quoting Spokeo, 578 U.S. at 339).
93 Additionally, Plaintiffs argue that the District Court
conflated statutory and constitutional standing and
inappropriately dismissed the Complaint under Rule 12(b)(1)
for reasons more befitting a Rule 12(b)(6) dismissal for lack
of statutory standing. Given that we have independently
concluded that Plaintiffs lack Article III standing, we do not
reach this argument.
94 See Finkelman I, 810 F.3d at 203.

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