Petition for Writ of Certiorari — University of Southern California, et al., Petitioners v. Allen L. Munro, et al.
Supreme Court briefNov 29, 2018
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APPENDIX
1a
APPENDIX A
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALLEN L. MUNRO, individually and as representatives of a class of participants and beneficiaries on
behalf of the University of
Southern California Defined Contribution Retirement Plan and the University of Southern California
Tax Deferred Annuity
Plan; DANIEL C.
WHEELER, individually
and as representatives of a
class of participants and
beneficiaries on behalf of
the University of Southern
California Defined Contribution Retirement Plan
and the University of
Southern California Tax
Deferred Annuity Plan;
EDWARD E. VAYNMAN,
individually and as representatives of a class of participants and beneficiaries
on behalf of the University
of Southern California De-
No. 17-55550
D.C. No.
2:16-cv-06191-VAP-E
OPINION
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fined Contribution Retirement Plan and the University of Southern California
Tax Deferred Annuity
Plan; JANE A. SINGLETON, individually and as
representatives of a class
of participants and beneficiaries on behalf of the
University of Southern
California Defined Contribution Retirement Plan
and the University of
Southern California Tax
Deferred Annuity Plan;
SARAH GLEASON, individually and as representatives of a class of participants and beneficiaries on
behalf of the University of
Southern California Defined Contribution Retirement Plan and the University of Southern California
Tax Deferred Annuity
Plan; REBECCA A.
SNYDER, individually and
as representatives of a
class of participants and
beneficiaries on behalf of
the University of Southern
California Defined Contribution Retirement Plan
and the University of
Southern California Tax
Deferred Annuity Plan;
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DION DICKMAN; COREY
CLARK; STEVEN L. OLSON,
Plaintiffs-Appellees,
v.
UNIVERSITY OF
SOUTHERN CALIFORNIA; USC RETIREMENT
PLAN OVERSIGHT COMMITTEE; LISA MAZZOCCO,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Virginia A. Phillips, Chief Judge, Presiding
Argued and Submitted May 15, 2018
San Francisco, California
Filed July 24, 2018
Before: Sidney R. Thomas, Chief Circuit Judge,
Michelle T. Friedland, Circuit Judge, and Thomas S.
Zilly, District Judge.
Opinion by Chief Judge Thomas
The Honorable Thomas S. Zilly, United States District Judge
for the Western District of Washington, sitting by designation.
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THOMAS, Chief Judge:
We consider in this appeal whether current and
former employees of the University of Southern California may be compelled to arbitrate their collective
claims for breach of fiduciary responsibility against
the Defendants (collectively, “USC”) for the administration of two ERISA plans. Under the circumstances presented by this case, we conclude that the
district court properly denied USC’s motion to compel
arbitration.
I
Allen Munro and eight other current and former
USC employees (“Employees”) participate in both the
USC Retirement Savings Program and the USC TaxDeferred Annuity Plan (collectively, the “Plans”). In
this putative class action lawsuit, they allege multiple
breaches of fiduciary duty in administration of the
Plans.
Each of the individual Employees was required to
sign an arbitration agreement as part of her employment contract. The nine Employees signed five different iterations of USC’s arbitration agreement. Consistent among the various agreements is an agreement to arbitrate all claims that either the Employee
or USC has against the other party to the agreement.
The agreements expressly cover claims for violations
of federal law.
In their putative class action lawsuit, the Employees sought financial and equitable remedies to benefit
the Plans and all affected participants and beneficiaries, including but not limited to: a determination as
to the method of calculating losses; removal of breach-
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ing fiduciaries; a full accounting of Plan losses; reformation of the Plans; and an order regarding appropriate future investments.
USC moved to compel arbitration, arguing that the
Employees’ agreements bar the Employees from litigating their claims on behalf of the Plan. It also requested the district court to compel arbitration on an
individual, rather than class, basis because the parties did not specifically agree to class arbitration. The
district court denied USC’s motion, determining that
the arbitration agreements, which the Employees entered into in their individual capacities, do not bind
the Plans because the Plans did not themselves consent to arbitration of the claims. USC timely appealed.
The district court had jurisdiction under ERISA
§ 502(e)(1), 29 U.S.C. § 1132(e)(1), and 28 U.S.C.
§ 1331. We have jurisdiction under 9 U.S.C.
§ 16(a)(1)(C), which authorizes the immediate appeal
from an order denying an application to compel arbitration. We review the issues presented de novo. Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1207 (9th
Cir. 2016) (denial of a motion to compel arbitration);
Tompkins v. 23andMe, Inc., 840 F.3d 1016, 1021 (9th
Cir. 2016) (“district court decisions about the arbitrability of claims” and “the interpretation and meaning
of contract provisions” (citation and alteration omitted)); Cmty. Bank of Ariz. v. G.V.M. Trust, 366 F.3d
982, 984 (9th Cir. 2004) (a “district court’s interpretation and construction of . . . federal law”).
II
The Federal Arbitration Act (“FAA”) “was enacted
. . . in response to widespread judicial hostility to ar-
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bitration agreements.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). It “reflect[s] both a ‘liberal federal policy favoring arbitration,’” id. (quoting
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 24 (1983)), “and the ‘fundamental principle
that arbitration is a matter of contract,’” id. (quoting
Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 67
(2010)). By the FAA’s terms, “a written provision in
any . . . contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . .
shall be valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2.
“[T]he party resisting arbitration bears the burden[s] of proving that the claims at issue are unsuitable for arbitration . . . .” Green Tree Fin. Corp.-Ala. v.
Randolph, 531 U.S. 79, 91 (2000). “[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration . . . .” Moses H. Cone, 460
U.S. at 24–25.
Where there is no conflict between the FAA and
the substantive statutory provision, “the FAA limits
courts’ involvement to ‘determining (1) whether a
valid agreement to arbitrate exists and, if it does,
(2) whether the agreement encompasses the dispute
at issue.” Cox v. Ocean View Hotel Corp., 533 F.3d
1114, 1119 (9th Cir. 2008) (quoting Chiron Corp. v.
Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th
Cir. 2000)). “If the response is affirmative on both
counts, then the Act requires the court to enforce the
arbitration agreement in accordance with its terms.”
Chiron Corp., 207 F.3d at 1130. There is no room for
discretion, as the FAA “mandates that district courts
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shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been
signed.” Id. (quoting Dean Witter Reynolds, Inc. v.
Byrd, 470 U.S. 213, 218 (1985)).
III
Turning to the particular arbitration agreements
entered into between the Employees and USC, we
must decide “whether the agreement encompasses the
dispute at issue.” Cox, 533 F.3d at 1119 (citation omitted). Because the parties consented only to arbitrate
claims brought on their own behalf, and because the
Employees’ present claims are brought on behalf of
the Plans, we conclude that the present dispute falls
outside the scope of the agreements.
A
We cannot, of course, compel arbitration in the absence of an agreement to arbitrate; to do so would be
to defeat “the FAA’s primary purpose of ensuring that
private agreements to arbitrate are enforced according to their terms.” Volt Info. Scis., Inc. v. Bd. of Trs.
of Leland Stanford Junior Univ., 489 U.S. 468, 479
(1989). “[T]he FAA imposes certain rules of fundamental importance, including the basic precept that
arbitration ‘is a matter of consent, not coercion.’”
Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S.
662, 681 (2010) (quoting Volt Info., 489 U.S. at 479).
B
To determine whether the agreements extend to
the present controversy, we look first to the text of the
agreements. United States ex rel. Welch v. My Left
Foot Children’s Therapy, LLC, 871 F.3d 791, 796 (9th
Cir. 2017).
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We recently considered a similar issue in another
legal context—whether a standard employment arbitration agreement covered qui tam claims brought by
the employee on behalf of the United States under the
False Claims Act (“FCA”). Welch, 871 F.3d 791. In
Welch, the arbitration agreement extended to any
claims “either [the employee] may have against the
Company . . . or the Company may have against [the
employee].” Id. at 794. Because “the underlying fraud
claims asserted in a FCA case belong to the government and not to the relator,” we held that the claims
were not claims that the employee had against the
employer and therefore not within the scope of the arbitration agreements. Id. at 800 & n.3.
Here, too, the parties agreed to arbitrate “all
claims . . . that Employee may have against the University or any of its related entities . . . and all claims
that the University may have against Employee.” As
in Welch, this language does not extend to claims that
other entities have against the University. As in
Welch, we cannot interpret the catch-all clause agreeing to arbitrate “[a]ny claim that otherwise would
have been decidable in a court . . . for violation of any
federal . . . statute” to cover claims belonging to other
entities. See Welch, 871 F.3d at 797–98 (interpreting
agreement to arbitrate “all disputes” based on “any
. . . federal law” as limited to disputes between the employee and the employer).
The language of the arbitration agreements here is
not meaningfully distinguishable from that considered in Welch. The issue, then, is whether claims for
breach of fiduciary duty brought under ERISA must
be treated the same as qui tam claims brought under
the FCA.
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C
There is no shortage of similarities between qui
tam suits under the FCA and suits for breach of fiduciary duty under ERISA. Most importantly, both qui
tam relators and ERISA § 502(a)(2) plaintiffs are not
seeking relief for themselves. A party filing a qui tam
suit under the FCA seeks recovery only for injury done
to the government, Vt. Agency of Nat. Res. v. U.S. ex
rel. Stevens, 529 U.S. 765, 771–72 (2000), and a plaintiff bringing a suit for breach of fiduciary duty similarly seeks recovery only for injury done to the plan.
LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S.
248, 256 (2008); accord id. at 261 (Thomas, J., concurring).
Out of this basic similarity arises a related principle—neither the qui tam relator nor the ERISA
§ 502(a)(2) plaintiff may alone settle a claim because
that claim does not exist for the individual relator or
plaintiff’s primary benefit. In Bowles v. Reade, 198
F.3d 752, 760 (9th Cir. 1999), we held that a plaintiff
seeking relief under ERISA § 409(a) may not settle a
claim on behalf of a plan, but rather can only settle if
the plan consents to the settlement. Unsurprisingly,
given the similarities between FCA and ERISA fiduciary breach claims, we reached a similar conclusion
in a qui tam action brought under the FCA where the
government had initially declined to intervene, leaving the relator to conduct the action himself. United
States ex rel. Killingsworth v. Northrop Corp., 25 F.3d
715, 720 (9th Cir. 1994). But there, unlike here, the
government had only a right to be heard on the validity of the settlement, not “an absolute right to block
the settlement.” Id. at 720–23.
Significantly, these principles laid the foundation
for our holding in Welch, where we held a qui tam FCA
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claim to be outside the scope of an arbitration agreement because the claim was not one that the employee
“may have against [the employer].” 871 F.3d at 800.
Our holding was compelled by our recognition that the
government, rather than the relator, stands to benefit
most from the litigation. Id. And we reached our conclusion even though the relator is entitled to more
than a nominal share of the government’s recovery.
Id. Moreover, we were unconcerned that the FCA provides that the relator brings suit not only “for the
United States Government” but also “for the person.”
31 U.S.C. § 3730(b). And even though in a breach-offiduciary duty suit under ERISA, “the cause of action
belong[s] to the individual plaintiff,” Comer v. Micor,
Inc., 436 F.3d 1098, 1103 (9th Cir. 2006), the same is
true of a qui tam suit under the FCA where the government declines to intervene, see 31 U.S.C.
§ 3730(b)(4)(B) (providing that, in such circumstances, the “right to conduct the action” lies with the
relator). See also Landwehr v. DuPree, 72 F.3d 726,
732 (9th Cir. 1995) (holding in ERISA context that the
statute of limitations begins to run when the individual plaintiff learns of the alleged violations); United
States ex rel. Hyatt v. Northrop Corp., 91 F.3d 1211,
1217–18 (9th Cir. 1996) (holding similarly in the FCA
context).
Relying on LaRue, USC argues that individuals
may seek individual recovery in the context of defined
contribution plans, such as the Plans here, because
defined contribution plans comprise individual accounts. However, LaRue cannot bear the weight USC
places on it. In LaRue, the Supreme Court held that
an individual may bring an ERISA claim alleging
breach of fiduciary duty even if the claim pertains only
to her own account and seeks relief for losses limited
to that account. 552 U.S. at 256. In doing so, the
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Court made clear that it had not reconsidered its
longstanding recognition that it is the plan, and not
the individual beneficiaries and participants, that
benefit from a winning claim for breach of fiduciary
duty, even when the plan is a defined contribution
plan. Id. (“[A]lthough § 502(a)(2) does not provide a
remedy for individual injuries distinct from plan injuries, that provision does authorize recovery for fiduciary breaches that impair the value of plan assets in a
participant’s individual account.”).
Even if LaRue held the meaning USC attributes to
it, it would not control this case. The claims brought
by the Employees arise from alleged fiduciary misconduct as to the Plans in their entireties and are not, as
in LaRue, limited to mismanagement of individual accounts. Id. at 250–51 (explaining that the lawsuit
arose from the fiduciary’s alleged failure to carry out
the participant-plaintiff’s directions). As we have
noted, the Employees seek financial and equitable
remedies to benefit the Plans and all affected participants and beneficiaries, including a determination as
to the method of calculating losses, removal of breaching fiduciaries, a full accounting of Plan losses, reformation of the Plans, and an order regarding appropriate future investments. The relief sought demonstrates that the Employees are bringing their claims
to benefit their respective Plans across the board, not
just to benefit their own accounts as in LaRue.
In short, there is no principled distinction to be
drawn between this case and Welch. If anything, because recovery under ERISA § 409(a) is recovery singularly for the plan, compare 29 U.S.C. § 1109(a), with
31 U.S.C. § 3730(b), the qui tam relator has a stronger
stake in the outcome of an FCA case than does a
§ 502(a)(2) plaintiff in an ERISA claim. The ERISA
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§ 409(a) claims in this suit are not claims an “Employee may have against the University or any of its
related entities,” and the arbitration agreements cannot be stretched to apply to them.1
IV
In sum, the claims asserted on behalf of the Plans
in this case fall outside the scope of the arbitration
clauses in individual Employees’ general employment
contracts. Therefore, the district court properly denied the motion to compel arbitration. We need not—
and do not—reach any other issues urged by the parties.
AFFIRMED.
1
The Employees also argue that claims for breach of fiduciary
duty seeking a remedy under ERISA 409(a) are inarbitrable as a
matter of law, citing our decision in Amaro v. Continental Can
Co., 724 F.2d 747 (9th Cir. 1984). In Amaro, we held that
ERISA’s mandated “minimum standards [for] assuring the equitable character of [ERISA] plans” could not be satisfied in an arbitral proceeding. 724 F.2d at 752. As a three-judge panel, Amaro
binds us unless we conclude that the case is “clearly irreconcilable” with intervening binding authority. Miller v. Gammie, 335
F.3d 889, 900 (9th Cir. 2003) (en banc). USC contends that
Amaro is “clearly irreconcilable” with intervening Supreme
Court case law and, therefore, we should overrule it. Although
the Supreme Court has never expressly held that ERISA claims
are arbitrable, there is considerable force to USC’s position. See,
e.g., Comer v. Micor, Inc., 436 F.3d 1098, 1100–01 (9th Cir. 2006)
(discussing the issue in dicta). However, given our decision that
the claims asserted in this case fall outside the arbitration
clauses in the employee agreements, it is unnecessary to decide
that question here. Therefore, we leave the issue of Amaro’s viability for another day.
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APPENDIX B
2017 WL 1654075
United States District Court, C.D. California
Allen L. MUNRO et al., Plaintiffs,
v.
UNIVERSITY OF SOUTHERN
CALIFORNIA et al., Defendants.
CV 16–6191–VAP (CFEx)
|
Signed 03/23/2017
ORDER DENYING DEFENDANTS’ MOTION TO
COMPEL ARBITRATION (Doc. No. 47)
Virginia A. Phillips, Chief United States District
Judge
On December 19, 2016, USC Retirement Plan
Oversight Committee and Lisa Mazzocco (“Defendants”) filed their Motion to Compel Arbitration and
Dismiss for Improper Venue, or in the Alternative, to
Stay Proceedings (“Motion”). (Doc. No. 47.) On January 30, 2017, Allen Munro, Daniel C. Wheeler, Edward E. Vaynman, Jane A. Singleton, Sarah Gleason,
Rebecca A. Snyder, Dion Dickman, Corey Clark, and
Steven L. Olson (“Plaintiffs”) filed their opposition.
(Doc. No. 48.) Defendants filed their reply on February 21, 2017. (Doc. No. 49.) After considering all papers filed in support of and in opposition to the Motion, as well as all oral argument made at the March
13, 2017 hearing, the Court DENIES the Motion.
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I. BACKGROUND
Plaintiffs all work or have worked at the University of Southern California (“USC”) in different capacities and all participate in either the University of
Southern California Retirement Savings Program or
the University of Southern California Tax–Deferred
Annuity Plan (the “Plans”). (Doc. No. 40 ¶¶ 21–29.)
Defendant USC Retirement Plan Oversight Committee is the body responsible for administering and investing the plans’ assets, and defendant Lisa Mazzocco is the current chairperson of the committee. (Id.
¶¶ 32–33.) Plaintiffs have sued Defendants for violating their fiduciary duties under the Employee Retirement Income Security Act (“ERISA”). (Id. ¶¶ 1–5, 36–
42.)
Defendants brought this Motion based on arbitration agreements that Plaintiffs were required to sign
upon beginning their employment at USC. (Doc. No.
47 at 13–14; Doc. No. 48 at 10.) The arbitration agreements signed by Plaintiffs Munro, Wheeler, Gleason,
Snyder, Singleton, Dickman, Clark, and Olson state,
in pertinent part:
the University and the faculty or staff
member named below (“Employee”)
agree to the resolution by arbitration of
all claims, whether or not arising out of
Employee’s University employment, remuneration or termination, that Employee may have against the University
or any of its related entities, including
but not limited to faculty practice plans,
or its or their officers, trustees, administrators, employees or agents, in their capacity as such or otherwise; and all
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claims that the University may have
against Employee. Any claim that otherwise would have been decidable in a
court of law—whether under local, state
or federal law—will instead be decided
by arbitration, except as specifically excluded by this Agreement. The claims
covered by this Agreement include, but
are not limited to, . . . claims for violation
of any federal, state or other governmental law, statute, regulation, or ordinance . . . . The parties agree that final
and binding arbitration shall be the sole
and exclusive remedy for resolving any
claims covered by this Agreement, instead of any court action, which is hereby
expressly waived.
(Doc. Nos. 47–6, 47–7, 47–8, 47–9, 47–10, 47–12, 47–
13, 47–14.)
The arbitration agreement signed by plaintiff
Vaynman states, in pertinent part:
The University and Edward Vaynman
(“Employee”) agree to the resolution by
arbitration of all claims, not arising out
of Employee’s University employment,
remuneration or termination, that Employee may have against the University,
its officers, trustees, administrators, employees or agents, in their capacity as
such or otherwise, and all claims that the
University may have against Employee.
The claims covered by this Agreement to
Arbitrate Claims (“Agreement”) include
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and are limited to, claims for wages or
other compensation due; claims for
breach of any contract or covenant (express or implied); claims for personal,
physical, or emotional injury, or for any
tort; claims for discrimination or harassment (including and [sic] limited to, race,
sex, religion, national origin, age, marital status, sexual orientation, or medical
condition or disability); claims for benefits; and claims for violation of any federal, state or other governmental law,
statute, regulation, or ordinance. The
parties agree that final and binding arbitration shall be the sole, but not exclusive remedy for resolving any claims covered by this Agreement, including of any
court action, which is hereby expressly
allowed except that matters which are
subject to review by writ of mandamus
under California Code of Civil Procedure, Section 1094.5 shall be resolved exclusively under that procedure . . . . Employee understands and agrees that by
signing this Agreement he/ she and the
University are not giving up their respective rights to a jury trial.
(Doc. No. 47–11.)
II. LEGAL STANDARD
The Federal Arbitration Act (“FAA”) “was enacted
. . . in response to widespread judicial hostility to arbitration agreements.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (citation omitted). It
governs arbitration agreements in contracts involving
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transactions in interstate commerce, including employment contracts. See 9 U.S.C. § 1; Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24
(1983); Circuit City Stores, Inc. v. Adams, 532 U.S.
105, 119 (2001).
Section 2 of the FAA states: “A written provision
in any . . . contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . .
shall be valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Section 2 of the
FAA “reflect[s] both a liberal federal policy favoring
arbitration and the fundamental principle that arbitration is a matter of contract.” Concepcion, 563 U.S.
at 339 (citation and internal quotation marks omitted). “In line with these principles, courts must place
arbitration agreements on an equal footing with other
contracts, and enforce them according to their terms.”
Id. (citations omitted).
“Because the FAA mandates that district courts
shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been
signed, the FAA limits courts’ involvement to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” Cox v. Ocean View Hotel
Corp., 533 F.3d 1114, 1119 (9th Cir. 2008) (citation
and internal quotation marks omitted). “If the response is affirmative on both counts, then the [FAA]
requires the court to enforce the arbitration agreement in accordance with its terms.” Chiron Corp. v.
Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th
Cir. 2000).
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“[T]he party resisting arbitration bears the burden
of proving that the claims at issue are unsuitable for
arbitration.” Green Tree Fin. Corp. v. Randolph, 531
U.S. 79, 91–92 (2000).
III. DISCUSSION
As Plaintiffs are the parties opposing arbitration,
they “bear the burden of proving that the claims at
issue are unsuitable for arbitration.” Green Tree Fin.
Corp., 531 U.S. at 91–92.
A. ARBITRABILITY OF ERISA CLAIMS
Plaintiffs argue ERISA claims are not arbitrable
because “[o]ne of the purposes of Congress in enacting
ERISA was to ‘provid[e] for appropriate remedies,
sanctions, and ready access to the Federal courts.’”
(Doc. No. 48 at 12.)
The Ninth Circuit, “in the past, expressed skepticism about the arbitrability of ERISA claims, see
Amaro v. Cont’l Can Co., 724 F.2d 747, 750 (9th Cir.
1984), but those doubts seem to have been put to rest
by the Supreme Court’s opinions.” Comer v. Micor,
Inc., 436 F.3d 1098, 1100 (9th Cir. 2006). Recent case
law from within the Ninth Circuit now holds that
ERISA claims are subject to arbitration when the parties have executed a valid arbitration agreement.
Jeld–Wen Master Welfare Ben. Plan v. Tri–City Health
Care Dist., No. 12CV197-GPC RBB, 2012 WL
5944215, at *7 (S.D. Cal. Nov. 27, 2012) (“Courts have
uniformly held that ERISA claims are arbitrable.”);
Fabian Fin. Servs. v. Kurt H. Volk, Inc. Profit Sharing
Plan, 768 F. Supp. 728, 733–34 (C.D. Cal. 1991) (“Fabian has not carried its burden of showing, either by
the text or legislative history of ERISA, or by analysis
of ERISA’s underlying purpose, that Congress in-
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tended to preclude a waiver of ERISA’s judicial remedies”); Sanzone–Ortiz v. Aetna Health of Cal., Inc., No.
15-CV-03334-WHO, 2015 WL 9303993, at *5 (N.D.
Cal. Dec. 22, 2015) (finding “that 29 U.S.C. § 1001(b)
does not provide the requisite congressional command
necessary to override the FAA,” and a plaintiff’s
ERISA claims were arbitrable); Luchini v. Carmax,
Inc., No. CV F 12-0417 LJO DLB, 2012 WL 2995483,
at *6 (E.D. Cal. July 23, 2012) (“We hold that Congress
did not intend to preclude a waiver of a judicial forum
for statutory ERISA claims. We further hold that the
FAA requires courts to enforce agreements to arbitrate such claims”); Shappell v. Sun Life Assur. Co.,
No. 2:10-CV-03020-MCE, 2011 WL 2070405, at *3
(E.D. Cal. May 23, 2011) (“In Comer v. Micor, Inc., 436
F.3d 1098, 1100–01 (9th Cir. 2006), the Ninth Circuit
went so far as to note that any skepticism about the
arbitrability of ERISA claims has been put to rest by
the Supreme Court’s decisions in Shearson/American
Express Inc. v. McMahon, 482 U.S. 220, 226 (1987)
and Rodriguez de Quijas v. Shearson/ American Express, Inc., 490 U.S. 477, 481 (1989).”); see Hornsby v.
Macon Cty. Greyhound Park, Inc., No. 3:10CV680MHT, 2012 WL 2135470, at *5 (M.D. Ala. June 13,
2012) (“courts have analyzed the purpose of both
ERISA and the FAA and have ‘uniformly held that
ERISA claims are arbitrable.’”). In view of this case
law and the clear “liberal federal policy favoring arbitration,” the Court holds Plaintiffs’ ERISA claims are
arbitrable. Concepcion, 131 S. Ct. at 1745.
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B. THE ARBITRATION AGREEMENTS DO NOT
CONTROL
PLAINTIFFS’
§ 1132(A)(2)
CLAIMS BECAUSE THE RETIREMENT
PLANS DID NOT CONSENT TO ARBITRATE
Civil actions to protect employee benefit plans are
addressed in § 1132(a)(2),1 which states “a civil action
may be brought . . . by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title.” Id. Section 1109 states,
[a]ny person who is a fiduciary with respect to a plan who breaches any of the
responsibilities, obligations, or duties
imposed upon fiduciaries by this subchapter shall be personally liable to
make good to such plan any losses to the
plan resulting from each such breach,
and to restore to such plan any profits of
such fiduciary which have been made
through use of assets of the plan by the
fiduciary.
29 U.S.C.A. § 1109.
Even though Plaintiffs signed arbitration agreements, Plaintiffs argue they are not required to arbitrate their fiduciary duty claims under 29 U.S.C.
§§ 1132(a)(2) and 1109 because claims under 29
U.S.C. §§ 1132(a)(2) and 1109 are brought on behalf of
the Plans themselves, and Plaintiffs’ arbitration
agreements cannot bind the Plans. (Doc. No. 48 at 13–
14.) While Defendants agree Plaintiffs’ arbitration
1
29 U.S.C. § 1132(a)(2) is often referred to in case law as
ERISA § 502(a)(2). As § 1132(a)(2) is simply the codification of
ERISA § 502(a)(2), the two are used interchangeably.
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agreements cannot bind the Plans, Defendants argue
the agreements still bind Plaintiffs, and thus since it
is Plaintiffs who are bringing the claim on behalf of
the Plans, Plaintiffs are required to arbitrate. (Doc.
No. 49 at 12.)
Accordingly, the issue here is whether an arbitration agreement, signed by participants at the start of
their employment, not signed by anyone with authority to bind an ERISA plan, and not part of the plan
documents, can require participants who file suit on
behalf of the plan under 29 U.S.C. §§ 1132(a)(2) and
1109 to submit those claims to arbitration.
The parties have not cited, and the Court has not
found, any Ninth Circuit case law directly addressing
this issue. The Ninth Circuit, however, has addressed
a closely related issue: whether a release and covenant not to sue prevents a participant from suing on
behalf of a plan under 29 U.S.C. §§ 1132(a)(2) and
1109. Bowles v. Reade, 198 F.3d 752, 760 (9th Cir.
1999). In Bowles, a retired participant sued her retirement plan’s fiduciaries for breach of fiduciary duties to the plan, which the court later construed to be
a claim under § 502(a)(2). Id. at 756, 760. The participant settled with one of the fiduciaries, and as part of
the settlement, the participant signed a release. Id.
at 756. The release stated the participant “for herself
and her respective attorneys, trustees, fiduciaries, administrators, conservators, guardians, representatives, heirs, successors and assigns, present and future, hereby fully and forever releases and discharges” the fiduciary, but the plan never signed the
settlement or agreed to the release. Id. The participant and fiduciary then moved to dismiss the fiduciary with prejudice, pursuant to the settlement. Id.
22a
The court held the breach of fiduciary duty claims under § 502(a)(2) could not be dismissed without the
plan’s consent, and thus the court refused to dismiss
these claims against the fiduciary. Id. at 759–60. Indeed, “[b]ecause [the participant’s] claims [we]re not
truly individual, it was proper for the district court to
conclude that [the participant] could not settle them
without The Plans’ consent.” Id. at 760.
In In re Schering Plough Corp. ERISA Litigation,
589 F.3d 585 (3d Cir. 2009), the Third Circuit reached
the same conclusion. Id. at 593. In Schering, a participant signed a release contained in a separation
agreement after leaving her former employer, stating,
“I release the Company (which includes Schering–
Plough, and all of its subsidiaries, affiliates, officers,
directors, and employees) from all claims and liabilities which I have or may have against it as of the date
on which I sign this Agreement.” Id. at 592 n.4. The
agreement continued, “I promise that I will not file a
lawsuit against the Company in connection with any
aspect of my employment or termination. I also waive
the right to all remedies in any such action that may
be brought on my behalf.” Id. The participant then
brought a § 502(a)(2) claim on behalf of her retirement
plan against her employer, and the employer argued
the release barred the claim. Id. at 595. The court
held that even though the participant signed the release and the release was valid, “[§] 502(a)(2) claims
are, by their nature, plan claims.” Id. Thus, because
the participant’s claims were brought under
§ 502(a)(2), they were “causes of action that belong[ed]
to the Plan and [we]re based on duties owed to the
Plan” and could not be affected by the participant’s release. Id. The court stated, “[t]he vast majority of
courts have concluded that an individual release has
23a
no effect on an individual’s ability to bring a claim on
behalf of an ERISA plan under § 502(a)(2).” Id.
Similarly,
in
Johnson
v.
Couturier,
No. 2:05CV02046 RRB KJM, 2006 WL 2943160 (E.D.
Cal. Oct. 13, 2006), a participant sued his employer
for unpaid vacation time and wages and eventually
settled. Id. at *1. As a part of the settlement, the
participant signed a release of all claims against his
employer. Id. The release stated the participant “on
behalf of his heirs, agents, executors, successors, administrators, attorneys and assigns, and any and all
persons claiming by or through him, does hereby release, quit and forever discharge [the employer], their
respective predecessors, successors, assigns, parents,
affiliated companies.” Id. The release included “any
and [all] liabilities, damages, actions, causes of action,
claims, demands or suits . . . including . . . any claims
. . . or proceeding in federal, state, or local court . . .
including claims under . . . the Employee Retirement
Income Security Act of 1974.” Id. The participant
then brought a claim under § 502(a)(2) on behalf of his
retirement plan against the plan’s fiduciaries, and the
fiduciaries, who were included in the release, argued
the release barred the claim. Id. at *2. The court
agreed that the release barred “all individual claims
[the participant] could assert against” the fiduciaries
but held the release could not bar the participant’s
suit on behalf of the plan under § 502(a)(2). Id. The
Court reasoned, “[w]hile [the participant] could waive
his individual claims against the Individual Defendants, he could not waive the claims brought under
§ 502(a)(2) for the benefit of the [plan] without the
consent of the [plan].” Id. Accordingly, “[w]ithout the
consent of the Plan (or Plan administrator/fiduciary),
[the participant] had no authority or power to release
the § 502(a)(2) claims.” Id.
24a
In In re JDS Uniphase Corp. ERISA Litig., No. 0304743 WWS, 2006 WL 2597995 (N.D. Cal. Sept. 11,
2006), participants signed release agreements with
their employer upon receiving severance packages.
Id. at *1. The releases stated the participants “completely release from and agree not to file, cause to be
filed, or otherwise pursue against the company, its affiliated, related, parent or subsidiary corporations,
and its present and former directors, officers, and employees any and all claims [the participants] may now
have or have ever had against the [employer].” Id.
The participants then brought claims under
§ 502(a)(2) on behalf of their retirement plan against
the employer, who was a fiduciary of the plan. Id. The
court held the releases did “not bar ERISA fiduciary
duty claims brought by plan beneficiaries on behalf of
the plan.” Id. Thus, because the participants “allege[d] plan-wide fiduciary wrongdoing and s[ought]
plan-wide relief[, the participants’] individual releases . . . d[id] not bar the [§ 502(a)(2)] claims.” Id. at
*2.
Numerous other courts have also held waivers
signed by individual participants cannot bar claims
made by the same participants on behalf of a retirement plan under § 502(a)(2). In re Polaroid ERISA
Litig., 240 F.R.D. 65, 75 (S.D.N.Y. 2006) (“numerous
courts have held that under ERISA, individuals do not
have the authority to release a defined contribution
plan’s right to recover for breaches of fiduciary duty”);
In re Williams Cos. ERISA Litig., 231 F.R.D. 416, 423
(N.D. Okla. 2005) (“First, the Court notes that the
claims here are brought on behalf of the Plan, and a
participant cannot release the Plan’s claims, as a matter of law”); In re Aquila ERISA Litig., 237 F.R.D. 202,
210 (W.D. Mo. 2006) (“As discussed throughout this
Order, the instant claims in this action are brought on
25a
behalf of the Plan, pursuant to ERISA § 502(a)(2), not
by ERISA plan participants seeking individual benefits. As a matter of law, a plan participant cannot release the Plan’s claims”)
The Court is persuaded the same rule applies to
participants’ agreements to arbitrate. Just as a participant suing on behalf of a plan under § 502(a)(2)
cannot waive a plan’s right to pursue claims, a participant cannot waive a plan’s right to file its claims in
court. In each of Bowles, Schering, Johnson, and JDS
Uniphase, plan participants signed broad releases of
their right to sue their plan’s fiduciaries as part of either settlements or separation agreements. Even
though the courts in Bowles, Schering, Johnson, and
JDS Uniphase all found the releases were valid,
properly named the plans’ fiduciaries, and fully bound
the participants, the courts unanimously held the participants’ ability to bring claims under § 502(a)(2) was
unaffected by the releases because “[§] 502(a)(2)
claims are, by their nature, plan claims.” Similarly
here, each of the Plaintiffs signed a broad release of
their right to bring an action in court—i.e. an agreement to arbitrate—as a condition to their employment. Just as in Bowles, Schering, Johnson, and JDS
Uniphase, even if the Court decided the Plaintiffs’ releases of their right to bring an action in court are
valid, properly name Defendants, and fully bind the
Plaintiffs, the Court still must find Plaintiffs’ ability
to bring claims under § 502(a)(2) is unaffected by the
releases because “[§] 502(a)(2) claims are, by their nature, plan claims.” Indeed, while the Plaintiffs can
“waive [their] individual claims against . . . Defendants, [they can] not waive the claims brought under
§ 502(a)(2) for the benefit of the [plan] without the
consent of the [plan].”
26a
Defendants would have the Court draw a line between (1) participants’ ability to release their right to
pursue a plan’s claims and (2) participants’ ability to
release their right to pursue a plan’s claims in court.
Defendants, however, have offered no support for why
this line should be drawn. Bowles, Schering, Johnson,
and JDS Uniphase each held that it was the plans’ refusal to consent (or the plan’s absence of consent) that
prevented the participants from releasing their
§ 502(a)(2) claims on the plans’ behalf. Just as the
plans in Bowles, Schering, Johnson, and JDS Uniphase did not consent to release their right to pursue
claims, here the Plans have not consented to release
their rights to proceed in court.
Defendants argue that Bowles, Schering, Johnson,
and JDS Uniphase only establish the “commonsense
principle” that individual participants “obviously cannot abandon claims belonging to others.” (Doc. No. 49
at 12–13.) Thus, Defendants argue, the right to pursue a claim is different than the right to file in court
because when a participant releases a claim the participant is abandoning something “belonging to others.” (Id. at 12.) This is unpersuasive. Indeed,
Bowles, Schering, Johnson, and JDS Uniphase did
more than just establish participants “obviously cannot abandon claims belonging to others;” these cases
held participants could not abandon even their own
claims under § 502(a)(2) to sue on the plans’ behalf.
Further, when a participant releases the right to proceed in court the participant is just as much abandoning something “belonging to others.” Indeed, when a
plan owns a right, it cannot be bargained away without the plan’s consent; it makes no difference whether
that right is to a claim or a court trial.
27a
Defendants also argue that an “individual participant is permitted to make a wide range of strategic
procedural decisions about how to litigate an ERISA
claim without the consent of the Plan, including the
venue in which to file suit, the attorney to employ, and
the evidence to seek in discovery.” (Doc. No. 49 at 13.)
Thus, they claim, the choice to arbitrate is no different. This too is unpersuasive. There are significant
differences between decisions regarding “the venue in
which to file suit, the attorney to employ, and the evidence to seek in discovery,” on one hand, and the decision to settle or submit a claim to arbitration, on the
other.
Decisions to settle or arbitrate are steadfastly
vested with a client, as opposed to the client’s attorney, and the decision to settle or arbitrate always requires client consent. Blanton v. Womancare, Inc., 38
Cal.3d 396, 407 (1985); Toal v. Tardif, 178
Cal.App.4th 1208, 1221 (2009) (“client is bound by an
arbitration agreement signed by his or her counsel
only if the client consented to or ratified the agreement”). Decisions as to venue, discovery methods, and
evidence to seek in discovery, however, are vested in
a lawyer’s discretion, as opposed to a client’s. Blanton,
38 Cal.3d at 403–04 (“In retaining counsel for the
prosecution or defense of a suit, the right to do many
acts in respect to the cause is embraced as ancillary,
or incidental to the general authority conferred, and
among these is included the authority to enter into
stipulations and agreements in all matters of procedure during the progress of the trial. Stipulations
thus made, so far as they are simply necessary or incidental to the management of the suit, and which affect only the procedure or remedy as distinguished
from the cause of action itself, and the essential rights
of the client, are binding on the client.”). When a suit
28a
is brought on behalf of a plan under § 502(a)(2), the
lawyer bringing the suit is litigating the plan’s claims.
Thus, as the claims belong to the plan, the plan occupies the position of a client, and thus the plan is the
one vested with the right to decide when to settle or
submit to arbitration. See Bowles, 198 F.3d at 760;
Schering, 589 F.3d at 593; Johnson, 2006 WL 2943160
at *2; JDS Uniphase, 2006 WL 2597995 at *2. Similarly, as the plan occupies the position of a client, it
need not consent to venue and discovery decisions, as
these are generally decisions vested with the lawyer
litigating the claims. Thus, even though a plan need
not consent to venue and discovery decisions, this division of decision-making authority shows why the
plan’s consent is still required when settling or submitting a claim to arbitration.
Although the choice of “attorney to employ” is admittedly one that rests with a client, and plans are not
required to consent to a participant’s choice of attorney, this is a necessary evil of any derivative claim.
The nature of derivative claims under § 502(a)(2)
make it impossible for plans to consent to an attorney
bringing suit because § 502(a)(2) authorizes “a participant, beneficiary or fiduciary” to bring “a civil action”
on behalf of the plan against “a fiduciary with respect
to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries.” Further, the only persons authorized to approve an attorney on a plan’s behalf are necessarily fiduciaries of the
plan itself. Thus, as the fiduciaries of the plan are
very objects of suits brought under § 502(a)(2), it cannot be the case that § 502(a)(2) would require fiduciaries to approve the very attorneys who are suing
them. Accordingly, the fact that a plan is not required
to consent to a participant’s choice of attorney is not a
29a
reason to hold it is not required to consent to submit
a claim to arbitration.
Further, holding that the participants’ arbitration
agreements cannot affect their claims under
§ 502(a)(2) makes practical sense and is closely
aligned with the goals of ERISA. One of ERISA’s
main purposes is “[t]o protect pension plans from looting by unscrupulous employers and their agents.”
Landwehr v. DuPree, 72 F.3d 726, 733 (9th Cir. 1995).
If the Court were to hold participants’ arbitration
agreements controlled their § 502(a)(2) claims, fiduciaries could mitigate their ERISA obligations to their
plans and erect barriers to ERISA enforcement on behalf of plans by requiring employees to sign arbitration agreements—including provisions requiring confidentiality, expedited arbitration procedures, limited
discovery, required splitting of arbitrators’ fees, and
mandatory payment of the prevailing party’s attorneys’ fees—as a condition of employment. Given that
§ 502(a)(2) actions are almost exclusively brought by
participants, this would (1) guarantee fiduciaries
would essentially never be held to account for their
potential wrongdoings in court and (2) give fiduciaries
many procedural advantages at the outset of any
§ 502(a)(2) action that they would not be entitled to in
a court proceeding. Allowing fiduciaries to limit their
ERISA obligations in this manner would directly conflict with the Supreme Court’s holding that “Congress
enacted ERISA to ‘protect . . . the interests of participants in employee benefit plans and their beneficiaries’ [and] ‘provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts.’” Aetna
Health Inc. v. Davila, 542 U.S. 200, 208 (2004). Indeed allowing such arbitration agreements to control
participants’ § 502(a)(2) claims would, in a sense, be
allowing the fox to guard the henhouse.
30a
Defendants argue Landwehr v. DuPree, 72 F.3d
726, 732 (9th Cir. 1995), requires the Court to hold
Plaintiffs’ § 502(a)(2) claims on behalf of the Plans are
bound by the arbitration agreements. In Landwehr, a
retirement plan’s fiduciary embezzled money from the
plan by writing his personal driver checks from the
plan’s bank accounts between April 1988 and February 1989. Landwehr, 72 F.3d at 730. The plan’s participants learned of these actions in January 1990,
and they brought suit on behalf of the plan against a
fiduciary in June 1992. Id. at 731. The fiduciary argued the claims were barred by ERISA’s three-year
statute of limitations because “the real ‘plaintiff’ in
this case [was] the Plan,” and the plan had actual
knowledge of the stolen money by at least February
1989 because several of the fiduciaries of the plan
knew of the illicit money transfers. Landwehr, 72
F.3d at 732. ERISA’s statute of limitations is set forth
in 29 U.S.C. § 1113 and states actions for breach of
fiduciary duty must be brought before “(1) six years
after . . . the date of the last action which constituted
a part of the breach or violation, or . . . (2) three years
after the earliest date on which the plaintiff had actual knowledge of the breach or violation.” 29 U.S.C.
§ 1113. The court reasoned, for the purposes of the
statute of limitations, “[t]he plaintiff in such actions
. . . is not the plan itself but the fiduciary, beneficiary,
or participant bringing suit.” Id. Thus, the court held
“the limitations period begins to run on the date that
the person bringing suit on behalf of the plan learned
of the breach or violation.” Id. The court explained it
ruled thus because,
[i]f the statute of limitations started to
run on the first day that a fiduciary knew
31a
of the violation, then the statute of limitations would begin to run on the date
that [the fiduciary] breached his duties—
or, in the alternative, on the date that
agents hired by [the fiduciary] were told
of the underlying facts by [the fiduciary]
in the course of seeking their advice.
That would obviously defeat the purpose
of section 1113’s requirement that the
limitations period run from the date
when the plaintiff acquired actual
knowledge of the breach, rather than on
the date of the breach. Moreover, it
would undermine one of the primary
purposes of ERISA: To protect pension
plans from looting by unscrupulous employers and their agents.
Id. at 732–33.
The holding in Landwehr does not suggest the
Court should rule a participant can agree to arbitrate
§ 502(a) (2) claims without a plan’s consent. Indeed,
Landwehr specifically limited its ruling to issues involving the statute of limitations and the interpretation of the word “plaintiff” as it appears in § 1113. Its
decision that a participant was the “plaintiff” for the
purposes of § 1113 was necessitated by the wording of
§ 1113 because holding otherwise would have rendered § 1113(1) a nullity. The Ninth Circuit did not
purport to hold a participant is the “plaintiff” for the
purposes of agreeing to arbitrate or settle. In fact, doing so would directly conflict with the Ninth Circuit’s
more recent holding in Bowles.
32a
Additionally, the Ninth Circuit’s reasoning for
holding a participant was the “plaintiff” for the purposes of § 1113 weighs in favor of this Court ruling
that a plan must consent to arbitration before participants are allowed to submit their § 502(a)(2) claims to
arbitration. This is because, in Landwehr, the court
reasoned that unless it ruled the “plaintiff” was the
participant for statutory limitations purposes, the
statute of limitations would (1) limit participants’
ability to bring claims on behalf of plans and (2) place
fiduciaries at a procedural advantage by having the
statute of limitations begin to run as soon as a breach
of fiduciary duty occurred. Similarly here, for the reasons discussed above, unless the Court rules participants’ arbitration agreements cannot control participants’ § 502(a)(2) claims on behalf of a plan, the arbitration agreements would (1) limit participants’ ability to bring claims on behalf of plans and (2) place plan
fiduciaries at a procedural advantage because the
terms of arbitration agreements could limit the ease
of bringing § 502(a)(2) claims and the effectiveness of
the § 502(a)(2) claims. Accordingly, Landwehr’s holding that a participant is the “plaintiff” for statute of
limitations purposes does require this Court to hold a
participant’s arbitration agreement can affect the participant’s ability to bring a § 502(a)(2) claim on behalf
of a plan in court. Indeed, the reasoning in Landwehr
affirmatively supports this Court’s decision that a
participant’s arbitration agreement cannot affect the
participant’s ability to bring a § 502(a)(2) claim on behalf of a plan in court.2
2
To the extent the Defendants argue the decision to arbitrate
is more akin to a statute of limitations issue than the decision to
settle, the Court disagrees. Deciding to settle and deciding to ar-
33a
In sum, the Court holds participants cannot sign
an arbitration agreement, without the consent of a
plan, that prevents the participants from bringing a
§ 502(a)(2) claim on behalf of the plan. Thus, the
Plaintiffs’ arbitration agreements do not prevent
them from filing their § 502(a)(2) claims in court on
behalf of the Plans, and Defendants’ motion to compel
arbitration of these claims is DENIED.
C. INDIVIDUAL ARBITRATION
The Court has ruled Plaintiffs’ § 502(a)(2) claims
are not required to be arbitrated, and Plaintiffs have
brought no claims other than those under § 502(a)(2).
Thus, the Court need not address the issue of individualized arbitration.
IV. CONCLUSION
For the reasons stated above, Defendants’ motion
to compel arbitration is DENIED.
IT IS SO ORDERED.
bitrate are both decisions made by clients in the course of litigation. Both concern a party’s ability to consent on the behalf of
another and whether it would be equitable to do so. The statute
of limitations, to the contrary, is a concept that simply determines when suits are too old to be actionable.
34a
APPENDIX C
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALLEN L. MUNRO, individually and as representatives of
a class of participants and
beneficiaries on behalf of the
University of Southern California Defined Contribution
Retirement Plan and the University of Southern California
Tax Deferred Annuity Plan;
et al.,
Plaintiffs Appellants,
No. 17-55550
D.C. No.
2:16-cv-06191VAP-E
Central District of
California,
Las Vegas
ORDER
v.
UNIVERSITY OF SOUTHERN CALIFORNIA; et al.,
Defendants Appellees.
Before: THOMAS, Chief Judge, FRIEDLAND, Circuit
Judge, and ZILLY, District Judge.
The panel has voted to deny the petition for rehearing.
The Honorable Thomas S. Zilly, United States District Judge
for the Western District of Washington, sitting by designation.
35a
The full court has been advised of the petition for
rehearing en banc, and no judge of the court has requested a vote on the petition for rehearing en banc.
Fed. R. App. P. 35(b).
The petition for rehearing and the petition for rehearing en banc are denied.
36a
APPENDIX D
Statutory Provisions Involved
29 U.S.C. § 1109. Liability for breach of fiduciary duty
(a)
Any person who is a fiduciary with respect to a
plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such
plan any losses to the plan resulting from each such
breach, and to restore to such plan any profits of such
fiduciary which have been made through use of assets
of the plan by the fiduciary, and shall be subject to
such other equitable or remedial relief as the court
may deem appropriate, including removal of such fiduciary. A fiduciary may also be removed for a violation of section 1111 of this title.
(b)
No fiduciary shall be liable with respect to a
breach of fiduciary duty under this subchapter if such
breach was committed before he became a fiduciary or
after he ceased to be a fiduciary.
37a
29 U.S.C. § 1132. Civil Enforcement.
(a)
Persons empowered to bring a civil action.
A civil action may be brought-(1)
by a participant or beneficiary-(A)
for the relief provided for in subsection
(c) of this section, or
(B)
to recover benefits due to him under the
terms of his plan, to enforce his rights
under the terms of the plan, or to clarify
his rights to future benefits under the
terms of the plan;
(2)
by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under
section 1109 of this title;
(3)
by a participant, beneficiary, or fiduciary (A) to
enjoin any act or practice which violates any
provision of this subchapter or the terms of the
plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to
enforce any provisions of this subchapter or the
terms of the plan;
(4)
by the Secretary, or by a participant, or beneficiary for appropriate relief in the case of a violation of 1025(c) of this title;
(5)
except as otherwise provided in subsection (b),
by the Secretary (A) to enjoin any act or practice which violates any provision of this subchapter, or (B) to obtain other appropriate equitable relief (i) to redress such violation or (ii)
to enforce any provision of this subchapter;
38a
(6)
by the Secretary to collect any civil penalty under paragraph (2), (4), (5), (6), (7), (8), or (9) of
subsection (c) or under subsection (i) or (l);
(7)
by a State to enforce compliance with a qualified medical child support order (as defined in
section 1169(a)(2)(A) of this title);
(8)
by the Secretary, or by an employer or other
person referred to in section 1021(f)(1) of this
title, (A) to enjoin any act or practice which violates subsection (f) of section 1021 of this title,
or (B) to obtain appropriate equitable relief (i)
to redress such violation or (ii) to enforce such
subsection;
(9)
in the event that the purchase of an insurance
contract or insurance annuity in connection
with termination of an individual’s status as a
participant covered under a pension plan with
respect to all or any portion of the participant’s
pension benefit under such plan constitutes a
violation of part 4 of this title 1 or the terms of
the plan, by the Secretary, by any individual
who was a participant or beneficiary at the time
of the alleged violation, or by a fiduciary, to obtain appropriate relief, including the posting of
security if necessary, to assure receipt by the
participant or beneficiary of the amounts provided or to be provided by such insurance contract or annuity, plus reasonable prejudgment
interest on such amounts;
(10)
in the case of a multiemployer plan that has
been certified by the actuary to be in endangered or critical status under section 1085 of
this title, if the plan sponsor--
39a
(11)
(A)
has not adopted a funding improvement
or rehabilitation plan under that section
by the deadline established in such section, or
(B)
fails to update or comply with the terms
of the funding improvement or rehabilitation plan in accordance with the requirements of such section, by an employer that has an obligation to contribute with respect to the multiemployer
plan or an employee organization that
represents active participants in the
multiemployer plan, for an order compelling the plan sponsor to adopt a funding
improvement or rehabilitation plan or to
update or comply with the terms of the
funding improvement or rehabilitation
plan in accordance with the requirements of such section and the funding
improvement or rehabilitation plan; or
in the case of a multiemployer plan, by an employee representative, or any employer that has
an obligation to contribute to the plan, (A) to
enjoin any act or practice which violates subsection (k) of section 1021 of this title (or, in the
case of an employer, subsection (l) of such section), or (B) to obtain appropriate equitable relief (i) to redress such violation or (ii) to enforce
such subsection.
40a
Federal Arbitration Act – Title 9 U.S.C.
§ 1.
“Maritime transactions” and “commerce”
defined; exceptions to operation of title
“Maritime transactions”, as herein defined, means
charter parties, bills of lading of water carriers, agreements relating to wharfage, supplies furnished vessels or repairs to vessels, collisions, or any other matters in foreign commerce which, if the subject of controversy, would be embraced within admiralty jurisdiction; “commerce”, as herein defined, means commerce among the several States or with foreign nations, or in any Territory of the United States or in the
District of Columbia, or between any such Territory
and another, or between any such Territory and any
State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation,
but nothing herein contained shall apply to contracts
of employment of seamen, railroad employees, or any
other class of workers engaged in foreign or interstate
commerce.
§ 2.
Validity, irrevocability, and enforcement
of agreements to arbitrate
A written provision in any maritime transaction
or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter
arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an
agreement in writing to submit to arbitration an existing controversy arising out of such a contract,
transaction, or refusal, shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or
in equity for the revocation of any contract.
41a
§ 3.
Stay of proceedings where issue therein
referable to arbitration
If any suit or proceeding be brought in any of the
courts of the United States upon any issue referable
to arbitration under an agreement in writing for such
arbitration, the court in which such suit is pending,
upon being satisfied that the issue involved in such
suit or proceeding is referable to arbitration under
such an agreement, shall on application of one of the
parties stay the trial of the action until such arbitration has been had in accordance with the terms of the
agreement, providing the applicant for the stay is not
in default in proceeding with such arbitration.
§ 4.
Failure to arbitrate under agreement; petition to United States court having jurisdiction for order to compel arbitration;
notice and service thereof; hearing and
determination
A party aggrieved by the alleged failure, neglect,
or refusal of another to arbitrate under a written
agreement for arbitration may petition any United
States district court which, save for such agreement,
would have jurisdiction under title 28, in a civil action
or in admiralty of the subject matter of a suit arising
out of the controversy between the parties, for an order directing that such arbitration proceed in the
manner provided for in such agreement. Five days’
notice in writing of such application shall be served
upon the party in default. Service thereof shall be
made in the manner provided by the Federal Rules of
Civil Procedure. The court shall hear the parties, and
upon being satisfied that the making of the agreement
for arbitration or the failure to comply therewith is not
in issue, the court shall make an order directing the
parties to proceed to arbitration in accordance with
42a
the terms of the agreement. The hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such
arbitration is filed. If the making of the arbitration
agreement or the failure, neglect, or refusal to perform
the same be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be demanded by
the party alleged to be in default, or if the matter in
dispute is within admiralty jurisdiction, the court
shall hear and determine such issue. Where such an
issue is raised, the party alleged to be in default may,
except in cases of admiralty, on or before the return
day of the notice of application, demand a jury trial of
such issue, and upon such demand the court shall
make an order referring the issue or issues to a jury
in the manner provided by the Federal Rules of Civil
Procedure, or may specially call a jury for that purpose. If the jury find that no agreement in writing for
arbitration was made or that there is no default in
proceeding there under, the proceeding shall be dismissed. If the jury find that an agreement for arbitration was made in writing and that there is a default
in proceeding thereunder, the court shall make an order summarily directing the parties to proceed with
the arbitration in accordance with the terms thereof.
§ 5.
Appointment of arbitrators or umpire
If in the agreement provision be made for a
method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed;
but if no method be provided therein, or if a method
be provided and any party thereto shall fail to avail
himself of such method, or if for any other reason
there shall be a lapse in the naming of an arbitrator
or arbitrators or umpire, or in filling a vacancy, then
upon the application of either party to the controversy
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the court shall designate and appoint an arbitrator or
arbitrators or umpire, as the case may require, who
shall act under the said agreement with the same
force and effect as if he or they had been specifically
named therein; and unless otherwise provided in the
agreement the arbitration shall be by a single arbitrator.
§ 6.
Application heard as motion
Any application to the court hereunder shall be
made and heard in the manner provided by law for the
making and hearing of motions, except as otherwise
herein expressly provided.
§ 7.
Witnesses before arbitrators; fees; compelling attendance
The arbitrators selected either as prescribed in
this title or otherwise, or a majority of them, may summon in writing any person to attend before them or
any of them as a witness and in a proper case to bring
with him or them any book, record, document, or paper which may be deemed material as evidence in the
case. The fees for such attendance shall be the same
as the fees of witnesses before masters of the United
States courts. Said summons shall issue in the name
of the arbitrator or arbitrators, or a majority of them,
and shall be signed by the arbitrators, or a majority of
them, and shall be directed to the said person and
shall be served in the same manner as subpoenas to
appear and testify before the court; if any person or
persons so summoned to testify shall refuse or neglect
to obey said summons, upon petition the United
States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before
said arbitrator or arbitrators, or punish said person or
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persons for contempt in the same manner provided by
law for securing the attendance of witnesses or their
punishment for neglect or refusal to attend in the
courts of the United States.
§ 8.
Proceedings begun by libel in admiralty
and seizure of vessel or property
If the basis of jurisdiction be a cause of action otherwise justiciable in admiralty, then, notwithstanding
anything herein to the contrary, the party claiming to
be aggrieved may begin his proceeding hereunder by
libel and seizure of the vessel or other property of the
other party according to the usual course of admiralty
proceedings, and the court shall then have jurisdiction
to direct the parties to proceed with the arbitration
and shall retain jurisdiction to enter its decree upon
the award.
§ 9.
Award of arbitrators; confirmation; jurisdiction; procedure
If the parties in their agreement have agreed that
a judgment of the court shall be entered upon the
award made pursuant to the arbitration, and shall
specify the court, then at any time within one year after the award is made any party to the arbitration
may apply to the court so specified for an order confirming the award, and thereupon the court must
grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11
of this title. If no court is specified in the agreement
of the parties, then such application may be made to
the United States court in and for the district within
which such award was made. Notice of the application
shall be served upon the adverse party, and thereupon
the court shall have jurisdiction of such party as
though he had appeared generally in the proceeding.
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If the adverse party is a resident of the district within
which the award was made, such service shall be
made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse party shall be a
nonresident, then the notice of the application shall be
served by the marshal of any district within which the
adverse party may be found in like manner as other
process of the court.
§ 10. Same; vacation; grounds; rehearing
(a) In any of the following cases the United States
court in and for the district wherein the award was
made may make an order vacating the award upon the
application of any party to the arbitration—
(1) where the award was procured by corruption,
fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other
misbehavior by which the rights of any party have
been prejudiced; or
(4) where the arbitrators exceeded their powers,
or so imperfectly executed them that a mutual, final,
and definite award upon the subject matter submitted
was not made.
(b) If an award is vacated and the time within
which the agreement required the award to be made
has not expired, the court may, in its discretion, direct
a rehearing by the arbitrators.
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(c) The United States district court for the district
wherein an award was made that was issued pursuant to section 580 of title 5 may make an order vacating the award upon the application of a person, other
than a party to the arbitration, who is adversely affected or aggrieved by the award, if the use of arbitration or the award is clearly inconsistent with the factors set forth in section 572 of title 5.
§ 11. Same;
modification
grounds; order
or
correction;
In either of the following cases the United States
court in and for the district wherein the award was
made may make an order modifying or correcting the
award upon the application of any party to the arbitration—
(a) Where there was an evident material miscalculation of figures or an evident material mistake in
the description of any person, thing, or property referred to in the award.
(b) Where the arbitrators have awarded upon a
matter not submitted to them, unless it is a matter
not affecting the merits of the decision upon the matter submitted.
(c) Where the award is imperfect in matter of form
not affecting the merits of the controversy.
The order may modify and correct the award, so
as to effect the intent thereof and promote justice between the parties.
§ 12. Notice of motions to vacate or modify; service; stay of proceedings
Notice of a motion to vacate, modify, or correct an
award must be served upon the adverse party or his
attorney within three months after the award is filed
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or delivered. If the adverse party is a resident of the
district within which the award was made, such service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse
party shall be a nonresident then the notice of the application shall be served by the marshal of any district
within which the adverse party may be found in like
manner as other process of the court. For the purposes of the motion any judge who might make an order to stay the proceedings in an action brought in the
same court may make an order, to be served with the
notice of motion, staying the proceedings of the adverse party to enforce the award.
§ 13. Papers filed with order on motions; judgement; docketing; force and effect; enforcement
The party moving for an order confirming, modifying, or correcting an award shall, at the time such
order is filed with the clerk for the entry of judgment
thereon, also file the following papers with the clerk:
(a) The agreement; the selection or appointment,
if any, of an additional arbitrator or umpire; and each
written extension of the time, if any, within which to
make the award.
(b) The award.
(c) Each notice, affidavit, or other paper used upon
an application to confirm, modify, or correct the
award, and a copy of each order of the court upon such
an application.
The judgment shall be docketed as if it was rendered in an action.
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The judgment so entered shall have the same
force and effect, in all respects, as, and be subject to
all the provisions of law relating to, a judgment in an
action; and it may be enforced as if it had been rendered in an action in the court in which it is entered.
§ 14. Contracts not affected
This title shall not apply to contracts made prior
to January 1, 1926.
§ 15. Inapplicability of the Act of State doctrine
Enforcement of arbitral agreements, confirmation
of arbitral awards, and execution upon judgments
based on orders confirming such awards shall not be
refused on the basis of the Act of State doctrine.
§ 16. Appeals
(a) An appeal may be taken from—
(1) an order—
(A) refusing a stay of any action under section
3 of this title,
(B) denying a petition under section 4 of this
title to order arbitration to proceed,
(C) denying an application under section 206
of this title to compel arbitration,
(D) confirming or denying confirmation of an
award or partial award, or
(E) modifying, correcting, or vacating an
award;
(2) an interlocutory order granting, continuing,
or modifying an injunction against an arbitration
that is subject to this title; or
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(3) a final decision with respect to an arbitration that is subject to this title.
(b) Except as otherwise provided in section
1292(b) of title 28, an appeal may not be taken from
an interlocutory order—
(1) granting a stay of any action under section
3 of this title;
(2) directing arbitration to proceed under section 4 of this title;
(3) compelling arbitration under section 206 of
this title; or
(4) refusing to enjoin an arbitration that is subject to this title.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.