Federal Judiciary

N.D. Ill. Notes Split Re Whether Pension Plan Has Standing to Sue for Delinquent Payments under ERISA

Defendant contends that Plaintiff, a plan rather than a group of trustees, lacks standing to bring an action for unpaid contributions. Defendant's argument rests in part on a split in authority among the circuits as to whether a plan itself is a fiduciary within the meaning of ERISA. For example, the Sixth Circuit held that a plan has standing to bring a counterclaim for collection of unpaid contributions because ?[t]he Plan, as a party before the court, necessarily includes those who must act for the Plan to administer it and to effectuate its policies.? Saramar Aluminum Co. v. Pension Plan for Employees of Aluminum Industry and Allied Indus. of Youngstown Ohio Metro. Area, 782 F.2d 577, 581 (6th Cir.1986). By contrast, the Ninth Circuit distinguishes plans from their fiduciaries, reasoning that a fund cannot be a fiduciary of itself. Local 159, 342, 343 & 444 v. Nor-Cal Plumbing, Inc., 185 F.3d 978, 981 (9th Cir.1999). In Nor-Cal Plumbing, the court recognized that a trust fund ?could qualify as a fiduciary of a separate ERISA plan so long as it exercises discretionary authority over the management or administration of the plan or its assets.? Id. at 982. The trust fund in that case, however, did not have standing to sue because it was not a separate entity from the plan itself. Id. (noting that ?the Trust Agreement and the Trust Funds' complaint treat them as one and the same?). The Second Circuit, similarly, employs a strict textualist approach, interpreting the language of the statute as not explicitly authorizing pension funds to assert a cause of action for breach of fiduciary duty and denying standing on that ground. Pressroom Unions-Printers League Income Sec. Fund v. Continental Assur. Co., 700 F.2d 889, 891 (2d Cir.1983) (denying pension fund standing to sue under ERISA for breach of fiduciary duty by defendant insurance companies that allegedly charged excessive premium payments and fees to the fund).

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This court concludes that a pension plan has standing to sue for delinquent payments under ERISA. The court hereby denies Defendant's motion to dismiss on this ground is denied.

Full post as published by Split Circuits on December 08, 2008 (boomark / email).