Appendix — Pfister v. Delta Air Lines, Inc.
Supreme Court brief1980
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MAR 17 {
Supreme Court of the United States
OCTOBER TERM 1979
NogQeTA5L
FREDERICK B. PFISTER,
Petitioner
Vv.
HONORABLE NEWELL EDENFIELD
JUDGE Or THE UNITED STATES
District COURT FOR NORTHERN
District Or GEORGIA, ATLANTA DIVISION
and
HONORABLE ROBERT HALL
( ASSIGNED SUCCESSOR DISTRICT JUDGE)
JuDGE Or THE UNITED STATES
DisTRICT COURT FOR NORTHERN
District Or GEORGIA, ATLANTA DIVISION
and
UNITED STATES COURT OF APPEALS FOR THE
FirtH Circuit AT NEw ORLEANS, LOUISIANA
and
DELTA AiR LINES, INC., et al,
Respondents
MOTION FOR LEAVE TO FILE PETITION,
AND PETITION FOR COMMON LAW
WRIT OF CERTIORARI
AND WRIT OF MANDAMUS AND/OR
PROHIBITION AND/OR INJUNCTION;
TO DISTRICT COURT AND COURT OF
APPEALS FOR FIFTH CIRCUIT.
SEPARATE APPENDIX
EUGENE J. CARELLA, Esq.
5455 Wilshire Boulevard
Suite 1706
Los Angeles, California 90036
213/938-2878
Counsel for Petitioner
PANDICK PRESS, WEST COAST, 1945 S. FIGUEROA, LOS ANGELES, CALIFORNIA (213) 747-4321
eee
INDEX TO APPENDICES
PAGE
APPENDIX A
Order and Opinion of District Judge Newell Edenfield
Dated 20 Dec. 1978 and Filed 21 Dec. 1978 Dismissing
Petitioners Claim for Injunctive Relief and Counts II, III,
a cassis es aciietsnaacievwveinigonlyloudis voennpeneanedty A-1
APPENDIX B
Order of District Judge Newell Edenfield Dated 26 Dec.
1978 and Filed 27 Dec. 1978 Substituting Counsel for
I siccilcinsss hechivs kicdhincveashidibdaniceniaeceyurmnnisetiaaesninaiinniniente B-1
APPENDIX C
Order of District Judge Newell Edenfield Dated 26 Feb.
1979, Advising Case Still Pending in District Court and
Directing Copies be Filed in Lieu of Original in Court of
PN NE OU 2 DOD. 1D TB. cxesncseccesecossepsscnsesnciccessonivanton C-1
APPENDIX D
Order of District Judge Newell Edenfield Dated 27 June
1979, and Filed 2 July 1979 Substituting Dorothy Bishop
SE Ne SE IIINS BREE ss csvcccsescaceunscconsccsnnnnntvesunenevanece D-1
APPENDIX E
Order of District Judge Newell Edenfield Dated 29 June
1979 and Filed 2 July 1979 Granting Respondents
Motion to Dismiss Counts V, VI, VII of Petitioners
Complaint and Denying Petitioner’s Motion for
nis i ll dik cipal steal eawbenmbapoasteansetoveetonens E-1
APPENDIX F
Order of Circuit Judges Gee, Clark, Hill Filed in No 79-
1763 on 3 July 1979 Dismissing Petitioners Appeal from
the District Court’s Order Entered 21 Dec. 1978 { Appen-
akan ou inbiehaenabieebansatetuncsidinn F-1
APPENDIX G
Order of Circuit Judge Gee in No 79-1763 Filed 6 Aug.
1979 Recalling Mandate and Extension of Time For
Filing Petition for Rehearing en banc................cceeeeeeseeeeeees G-1
li
APPENDIX H
Clerk’s Statement of Docket Entry Advising Counsel Peti-
tion for Rehearing and Rehearing en banc was Denied in
ee Oe Fe I 6 SIL: BOP FW icctcpticcccesescnceverseninmietiesineinvens
APPENDIX I
Order of Circuit Judges Gee, Henderson, Hatchett Filed 5
Nov. 1979, in No. 79-1763 and No. 79-3207 ( Petitioner’s
Appeal from District Court Order in Appendix B)
Denying Petitioners Motion for Stay of Mandate in No.
79-1763 and to Consolidate Cases 79-1763 and 79-3207;
Granting Respondent Motion to Dismiss Appeal No. 79-
3207; Remanding Motion for Costs Against Petitioners
I ID IIE CRON isn ccdeniiscansascavcsensssbinnebeniesmaatsosevoonse
APPENDIX J
Order Filed 13 Nov. 1979 by Circuit Judges Gee, Hender-
son, Hatchett in No. 79-1763 and No. 79-3207, Directing
that Petitioners Cross Request for Sanctions Against
Respondents be Stricken sua sponte and that Petitioner
Motions for Leave to File an Amended Complaint;
Disqualify Counsel for the Respondents, and for Stay of
All Further Proceedings Until the Motion for Dis-
qualification Directed to Newell Edenfield is Disposed of,
SITE hs. dens chensicbsieniabidaseaidplaustbiaaudstésneaneilicmbekpastsintenieensds
APPENDIX K
Order Filed 5 Dec. 1979 by Circuit Judges Gee, Henderson,
Hatchett, Denying Petitioners Motion that Aforestated
Circuit Judges Stand Recused and Vacate its Orders in
No. 79-1763 and No. 79-3207; and Further Denying
Petition for Rehearing and Request for Mandamus
Lodged with Chief Judge Brown; and Directing Petition-
er’s Counsel to Seek Admission to the Fifth Circuit before
BE NINE Gi cikccctenstaesscnsasisaenndoivecenisaibeaependvacbabiccinne
APPENDIX L
Clerk’s Docket Entry in Case No. 79-1763 and 79-3207
Directing the Reissuance of the Mandate in the above
Cases Dated December 18, 1979...........c.cccsccssssssscessscseqenees
PAGE
TE
ili
PAGE
APPENDIX M
District Court’s Deputy Clerk Notice Dated 21 Dec. 1979
that No. C 78-1567A (District Court) has been Reas-
signed to Judge Robert Hall
APPENDIX N
Order of Judge Newell Edenfield Dated 18 Dec. 1979 and
Filed 19 Dec. 1979 Denying Petitioners Motion to Dis-
qualify District Judge Newell Edenfield, Said Motion
Filed in the District Court on 2 Aug. 1979 ......c.cccccccseeceeees N-1
APPENDIX O
Index to Certified Record Prepared by U.S. Court of
Appeals in No. 79-1763 and 79-3207 and Transmitted to
United States Supreme Court on 17 Jan. 1980 .00......cceeseee O-1
APPENDIX P
STATUTES INVOLVED
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Or Pins IE CI is cde tennbsiscibicd canteen Aianaticaicapiatocammonecdaas P-1, P-2, P-3
Se ie 1 MEE ccrirarsinpiticctncnnsdsantnidihionanieae Lae P-16
Se iF TOIL) iscctiniccedscsevsas saeeietiesseusitibaschtaaidiaeasbiianc P-16
Fe AE SION ssiveinscininintessntinintniscldbthiionedecnala aaa P-16
Be ls FE PIO. diseitaiicictetsborsrtosndentennesdandabiiitara atte P-3, P-4
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ee tee wiciesednisiitbahrcseinsitiniasnseabecticdaneua aul P-5, P-6
et EE TEP ess tshncciaddtbinuaa-ensossiusdachisapenaieboanaan P-6, P-7
BF es TE HU sclilianceshinsisdepieeeednieanneserndianeaee ete P-7, P-8
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BaP RID ccirinininicnnccinieeppeiistleinicenee eagch h lade P-13
FA OE Giivisdcnnintatsncisciceibeniccledaantnabieaa mentee P-13
Fe I D ebttieiisestinosuaniniketaae ne P-13, P-14
PEE TE elineninsincennnsesiinannscigleeh clean P-14
FE Ee OE sinipniateileceiaetidnlaneuieknn ae P-14, P-15
iv Vv
PAGE PAGE
APPENDIX Q APPENDIX S
CONSTITUTIONAL PROVISION Letter from Delta Air Lines dated 5 March 1975 to
AMENDMENT V—United States Constitution Frederick B. Pfister Terminating Benefits ...............2::0+e+0+ S-1
No person shall be held to answer for a capital, or APPENDIX T
otherwise infamous crime, unless on a presentment or
indictment of a Grand Jury, except in cases arising in the
land or naval forces, or in the Militia, when in actual
service in time of War or public danger; nor shall any
person be subject for the same offense to be twice put in
jeopardy of life or limb; nor shall be compelled in any
criminal case to be a witness against himself, nor be
deprived of life, liberty, or property, without due process
of law; nor shall private property be taken for public use,
SUREIIE FIGS CDUIPOIIBR TIO oss. sexs scesesesencsecevesosceccanexexsasees Q-1
APPENDIX R
Legislative History
1. Legislative History, Employee Retirement Income Secu-
rity Act of 1974, Volume 111 at 4871
“The enforcement provisions have been designed specific-
ally to provide both the Secretary and participants and
beneficiaries with broad remedies for redressing or pre-
venting violations of the Retirement Income Security for
Employees Act as well as the amendments made to the
Welfare and Pension Plans Disclosure Act. The intent of
the Committee is to provide the full range of legal and
equitable remedies available in both state and federal
courts and to remove jurisdictional and procedural obs-
tacles which in the past appear to have hampered
effective enforcement of fiduciary responsibilities under
State law or recovery of benefits due to participants. For
actions in federal courts, nationwide service of process is
provided in order to remove a possible procedural obs-
tacle to having all proper parties before the court.”
(emphasis added ).2
2. H. R. Conference Dep. No. 93-1280; U.S. Code Congress
& Adm. News at 5038, 5107
“All such actions in Federal or State courts are to be
regarded as arising under the laws of the United States in
similar fashion to those brought under Section 301 of the
Labor-Management Relations Act of 19477)... .cccccccccccees R-1!
Order Entered October 31, 1977 by United States Court of
Appeals for District of Columbia ............:csseseseeeeereeneeneeneees T-1
APPENDIX A
EXHIBIT A
United States District Court
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
FREDERICK B. PFISTER
Civii ACTION
vs.
No. C78-1567A
DELTA Air LINES., et al.
ORDER
This suit by a former employee of Delta Air Lines, Inc.
(Delta) charges twenty-six defendants’ with violations of the
Employment Retirement Income Security Act of 1974
(ERISA), 29 U.S.C. §§ 1001, et seg. Originally filed in the
United States District Court for the District of Columbia, the
case was transferred to this district pursuant to 28 U.S.C.
' Plaintiff has named as defendants: Delta, the Delta Employee
Benefit Plan (the Plan), consisting of Delta Family Care, Disability
and Survivorship Plan, Delta Air Lines, Inc. Group Insurance Plan,
and Delta Family-Care Retirement Plan; the Delta Administrative
Committee acting on behalf of Delta Family Care, Disability and
Survivorship Plan, and Delta Family-Care Retirement Plan; Delta
Administrative Committee members W.T. Beebe, D.C. Garrett, Jr., R.
Oppenlander, J.R. Howell, H.T. Fincher, R.W. Allen, R.S. Maurer,
T.M. Miller, Wm. E. Stephens, each in their individual capacities; the
Pian Administrator of Delta Family Care, Disability and Survivorship
Plan, Delta Family-Care Retirement Plan, and Delta Employee
Benefit Plan, individually; John Aduddell; J.J. Schneider; and Donald
Baus (all of the above hereinafter collectively referred to as Delta
defendants); Charles T. Bishop, Jr.; and the Brewer Adjustment
Company.
A-2
§ 1404(a) on September 15, 1978.2 It is now before the court
on twenty-four defendants’? motion to strike and/or dismiss,
request for costs and attorneys’ fees, and request for an oral
hearing. Rules 12(b)(6), 12(f), and 54(d), Fed.R.Civ-P.
Plaintiff contends that in 1973, while employed as a
mechanic by Delta at its facilities at Washington National
‘Airport in the state of Virginia and while a Participant in the
Delta employee disability, medica!, and retirement benefit plan
(“Plan”), he injured his back. On March 30, 1974, he
allegedly reinjured his back but continued to work for Delta
through June 30, 1974. Plaintiff charges that Delta had
promised to provide him with “light work” following his injury
in March, that it reneged on this promise and required heavy
lifting, and that as a result he became totally disabled on June
30, 1974 and has continued so to the present. He further alleges
that prior to his departure from Delta due to his disability,
Delta, acting in concert with the Plan, sought to force plaintiff
to quit his employment so that he would forfeit all Plan
benefits. Plaintiff was certified as totally disabled by his
physician on November 8, 1974, and, at some point, the Plan
and Delta apparently acknowledged in a letter written by
defendant Stephens that plaintiff was disabled and was entitled
to total disability status through February 28, 1975. Plaintiff
contends that defendants induced him to meet with defendant
Bishop, an insurance adjuster, without benefit of counsel, by
telling him they had already determined that he was totally
disabled and wold receive all of his benefits. During that
meeting plaintiff made a statement which has been interpreted
by defendants as damaging to his disability claim. Following
this interview, plaintiff alleges that the adjuster visited his
physician. As a result, without any additional medical exam-
ination, his doctor revised his diagnosis and declared plaintiff
eligible for “light duty work”, and on March 1, 1975, the Plan
2 The district court granted defendants’ motion to transfer on
March 31, 1977, but because plaintiff attempted a variety of appeals
from that order, the case was not transferred to this district for a year
and a half.
3 All of the defendants except Brewer Adjustment Company and
Charles T. Bishop, Jr. have joined in this motion.
neh an OM
:
A-3
arbitrarily rescinded his status of permanent disability and
cancelled all employee benefits without an explanation for their
conduct and without affording plaintiff an opportunity to be
heard.* Plaintiff further asserts that he attempted to obtain
copies of the benefit plans and other pertinent information from
defendants but that defendants refused to provide him with the
same until after this suit was filed and that he therefore was
unable to convert his insurance or to appeal the decision
regarding his disability. In an eight-count complaint, he now
seeks disability and retirement benefits, cumulative damages
and penalties in excess of $48,000,000, and a permanent
injunction against the defendants.
Defendants have moved to strike or dismiss certain of
plaintiffs prayers for relief in Count I, certain statements
included in plaintiff's allegations in Count I, plaintiffs claims in
Counts II through VIII for compensatory and punitive dam-
ages, and plaintiff's request for a trial by jury. Plaintiff has
opposed this motion,5 and, as noted earlier, both sides have
requested oral argument of this matter. The court declines to
hear oral argument on these issues, noting for the benefit of
plaintiff's counsel, who strenuously asserted his right to such
argument, that Rule 78, Fed.R.Civ.P., states: ‘To expedite its
business, the court may make provision by rule or order for the
submission and determination of motions without oral hearing
4 There is some indication in plaintiff's brief that he was unaware
of the reasons for the termination of his benefits until approximately
July 16, 1975 when defendant Stephens, in a letter responding to an
inquiry by plaintiff's congressman, Herbert C. Harris, II, stated that
plaintiff had been denied long-term disability benefits because his
doctor had certified that the plaintiff was able to perform “light work”
on March 1, 1975.
5 The court notes that plaintiff's counsel is from Los Angeles,
California and does not maintain an office in this district. Although
he has not sought leave to appear pro hac vice, Local rule 71.4, the
court will grant him permission to so appear. Counsel is cautioned to
familiarize himself with the local rules of this court, however.
A-4
upon brief written statements of reasons in support and opposi-
tion.” The Local Rules of this court include such a provision,®
and the court sees no need to deviate from its practice in this
case.
Count I of the complaint alleges deprivation of benefits to
which plaintiff was entitled pursuant to the Plan and seeks
recovery of those benefits or a lump sum payment of $500,000.
This claim is based upon 29 U.S.C. § 1132(a)(1)(B), which
authorizes a plan participant to bring a civil action “to recover
benefits due him under the terms of his plan ....”” Both parties
apparently agree that under the Plan plaintiffs right to contin-
ued benefits after March 1, 1975 depended upon either his
continued employment with Delta after that date or the contin-
uation of his totally and permanently disabled status. Defend-
ants now seek dismissal of the prayer for benefits on the ground
that plaintiff was not in Delta’s employ on the critical date—a
fact which he does not dispute—and that he was not then and is
not now permanently disabled. Defendants’ latter assertion
seemingly derives from plaintiffs allegation that although
defendants determined, “without further medical examination,
that Plaintiff could perform ‘light work’, [they have] failed to
proffer any work of any type whatsoever to Plaintiff up to the
present,” Complaint, Count I, 721, and that this failure to
provide such work demonstrates defendants’ intent to deprive
plaintiff of his benefits. Complaint, Count I, § 34. They argue
that since plaintiff “seeks” light work he cannot have been or
now.be totally disabled and therefore, as a matter of law, is not
entitled to benefits under the Plan.
The court declines to read plaintiffs allegation in this
fashion, particularly in light of other charges contained in the
complaint. Paragraph 14 of Count I alleges that “‘as a result of
Plaintiff's conscientious efforts to carry out his duties as a Delta
mechanic, his injuries were substantially aggravated, rendering
6 Local Rule 91.3 provides, “All motions shall be decided by the
Court without oral hearing unless otherwise ordered by the Court.”
rrr
A-5
him totally and permanently disabled.”” Nowhere does plaintiff
state that he is no longer totally disabled, and the court cannot
infer this fact from the allegations relating to light work. A
motion to dismiss for failure to state a claim should not be
granted “unless it appears beyond doubt that the plaintiff can
prove no set of facts in support of his claim which would entitle
him to relief.” Conley v. Gibson, 355 U.S. 41 (1957). Since
plaintiff may be able to prove at trial his complete disability,
and thus his entitlement to benefits, the court DENIES defend-
ants’ motion on this point.’
Defendants have also moved to dismiss plaintiff's prayer
for injunctive relief in Count I insofar as it seeks to enjoin them
from future discrimination against other Plan participants.
They note that this suit is not brought on behalf of a class and
therefore that such relief is without basis. As plaintiff has
offered no opposition on this point, the court hereby DIS-
MISSES this prayer for injunctive relief.
Defendants next argue that plaintiffs claim against the
plan administrator for civil penalties of $100 per day should be
dismissed. This claim is based upon 29 U.S.C. § 1132(c),
which states:
Any administrator who fails or refuses to comply with a
request for any information which such administrator is
required by this subchapter to furnish to a participant or
beneficiary (unless such failure or refusal results from
matters reasonably beyond the control of the adminis-
trator) by mailing the material requested to the last known
address of the requesting participant or beneficiary within
30 days after such request may in the court’s discretion be
7 In opposition to defendants’ motion, plaintiff has also argued
that he is entitled to benefits because Delta was under an obligation to
provide him with “light work” and that if it had fulfilled its duty in
this regard he would still be a Delta employee and would be covered
by the Plan. The court finds no support under ERISA or any other
law for such a position.
A-6
personally liable to such participant or beneficiary in the
amount of up to $100 a day from the date of such failure or
refusal and the court may in its discretion order such other
relief as it deems proper.
Under 29 U.S.C. § 1024(b)(4), the administrator, upon writ-
ten request of any participant or beneficiary, is required to
furnish “a copy of the latest updated summary plan description,
plan description, and the latest annual report, any terminal
report, the bargaining agreement, trust agreement, contract, or
other instruments under which the plan is established of
operated.” Plaintiff alleges that he requested in writing from
the plan administrator but did not receive “the Plan text, the
appeal procedures, and general information concerning his
rights as a Plan participant.”® Complaint, Count I, ¥ 12.
Defendants seek dismissal of this claim, noting that the
requirement in section 1024(b)(4) that administrators supply a
copy of the latest summary plan description and plan descrip-
tion to participants upon request was not in effect at the time of
the alleged violation, having been suspended by Department of
Labor regulations until May 30, 1976, and then again until July
15, 1977.9 They argue therefore that plaintiff's claim for $100 a
day penalties is inappropriate as a matter of law.
Plaintiff counters that although the Secretary of Labor
deferred the requirement pertaining to production of certain
documents a similar provision contained in ERISA’s prede-
cessor statute, the Welfare and Pension Plans Disclosure Act,
authorized penalties of $50 per day for an administrator’s
failure to provide certain documents to a plan participant. His
argument continues that by virtue of 29 U.S.C. § 1032 this prior
penalty provision is still in force. Section 1032(a)(1) provides,
“The Welfare and Pension Plans Disclosure Act is repealed
except that such Act shall continue to apply to any conduct and
8 It appears that plaintiff did receive these materials on or about
December 16, 1976, after the filing of this suit.
929 C.F.R. §§ 2520.104-2, -4 (1977).
A-7
‘events which occurred before the effective date of this part.”
Plaintiff interprets this section to mean that no provision of the
old Act was deemed repealed until its replacement section had
become effective. Therefore, although. the effective date of
section 1024(b)(4) was postponed, the former $50 per day
penalty provision necessarily governed the administrator’s
conduct.
The court cannot resolve the propriety of this penalty claim
at this juncture for two reasons. First, it is unclear precisely
which documents plaintiff requested in writing from defendant
administrator. Plaintiff's allegation on this point is not specific,
and it is possible, although unlikely, that he requested copies of
documents other than the plan description and summary plan
description. If he sought other documents required by section
1024 to be furnished to plan participants, the deferral regu-
lation would have no impact since it excused production of the
summary p.an descriptions and plan descriptions only; the
administrator would still be liable for failure to supply the other
covered material. See Pollock v. Castrovinci, et al., No. 78-
2071 (S.D.N.Y., Aug. 14, 1978) order denying summary
judgment; see generally Hastings v. Merrill Lynch, Pierce,
Fenner & Smith, et al., No. 7-70025 (E.D. Mich., Dec. 22,
1977) (order granting in part and denying in part summary
judgment).
The second reason that the court cannot conclude this
controversy is that neither side has provided it with sufficient
information to determine the applicability of the deferral
provision. The Secretary’s regulation postponed the effective
date of certain portions of section 1024(b)(4) only for welfare
and pension plans which became subject to part | of ERISA
prior to January 31, 1976. Thus, this regulation may not have
applied to Delta at all.1° For all of the foregoing reasons,
10 Twenty-nine U.S.C. § 1031(b)(2) and any regulations
pursuant thereto may also have some bearing on this case.
A-8
defendants’ motion to dismiss the claim for a $100 per day
penalty is DENIED."
Defendants have also moved to strike certain allegations
contained in Count I of the complaint pursuant to Rule 12(f),
Fed.R.Civ.P. That rule authorizes the court to “order stricken
from any pleading any insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.” Motions to
strike, however, are not favored and material will not be
stricken unless it is clear that it can have no possible bearing
upon the subject matter of the litigation. 2A Moore’s Federal
Practice, J 13.21[2], at 2429 (2d ed. 1975). The court has
carefully reviewed the allegations in question, and while they
appear to be irrelevant, it is unlikely that defendants will be
prejudiced by their presence. Accordingly, the motion is
DENIED on this point.
In Counts II through VIII of the complaint, plaintiff
requests compensatory and punitive damages totaling
$48,000,000. Noting that plaintiff has based his complaint
solely upon violations of ERISA, defendants now seek dismissal
of these counts on the ground that ERISA’s general remedial
scheme does not support a claim for such damages. They argue
that the language of the civil enforcement provision, 29 U.S.C.
§ 1132, and the statute’s legislative history evidence a clear
intent to preclude damages of this sort. In addition, they point
11 Defendants also requested that the court exercise its discretion
and dismiss plaintiffs claim because plaintiff has now received the
material and has not shown that he was harmed by the delay and
because if the administrator failed to respond to plaintiff's demand the
failure stemmed from matters reasonable beyond his control and thus
was permitted by section 1024(b)(4). To exercise the court’s
discretion on these grounds at this stage of the proceedings would be
premature. It is not clear that plaintiff need show harm during the
delay, and certainly, he would not be required to present such factual
issues in response to a motion to dismiss. Further, whether the
administrator’s failure was due to “matters reasonable beyond his
control” is a question of fact to be developed at trial.
A-9
out that punitive and compensatory relief has not customarily
been awarded under analogous statutes. For the reasons set
forth below, the court concludes that defendants are correct.
Section 1132 provides that 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 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) of this
section, 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 subchap-
ter; or
(6) by the Secretary to collect any civil penalty under
subsection (i) of this section.
Nowhere in this section does the word “damage” appear.
Instead, each subsection either identifies the precise form of
relief available to a plaintiff under that provision, e.g., recovery
A-10
of benefits, ties the relief authorized to a specific provision of
ERISA, e.g., a penalty for filing or document deficiencies or
recovery of profits in the event of a breach of fiduciary duty, or
refers to “other appropriate equitable relief.” Plaintiff's suit
must necessarily be based upon subsections (a)(1) and (3).
The latter provision by its own terms permits only equitable
relief and thus does not encompass compensatory or punitive
damages; the former, while describing a monetary recovery,
leaves no suggestion that anything other than the amount due
to a participant under the terms of the plan will accorded to
him.
That Congress did not intend to authorize awards of
additional monetary relief is made clear by a review of portions
of the voluminous legislative history of this Act. ERISA was
enacted to establish safeguards and standards which would
Protect and support the pension and benefit expectations of
employees so that workers who had been employed for years
would not discover upon retirement that the pension benefits
upon which they planned to live were not forthcoming. Its
purpose was not to punish pension fiduciaries, administrators,
or employers but to insure the delivery of earned benefits.
Since the pension and employee plan benefit system is a
voluntary one in that employers may decline to provide such
benefits, Congress was concerned that in legislating to protect
employee rights under these programs, it not burden employers
with additional costs and requirements so that they dis-
continued these plans. The House Committee on Education
and Labor stated:
The Employee Benefit Security Act as reported by the
Committee is designed to remedy certain defects in the
private retirement system which limit the effectiveness of
the system in providing retirement income security. The
primary purpose of the bill is the protection of individual
pension rights, but the Committee has been constrained to
recognize the voluntary nature of private retirement plans.
A-I1
The relative improvements required by this Act have been
weighed against the additional burdens to be placed on the
system. While modest cost increases are to be anticipated
when the Act becomes effective, the adverse impact of
these increases have been minimized. Additionally, all of
the provisions in the Act have been analyzed on the basis
of their projected costs in relation to the anticipated benefit
to the employee participant.
H.R. Rep. No. 93-533, 93d Cong., 2d Sess., reprinted in [1974]
U.S. Code Cong. & Admin. News, 4639. Senator Nelson
expanded upon this notion during the floor debate on the
Conference Report:
In all its deliberations and decisions, Congress was acutely
aware that under our voluntary pension system the cost of
financing pension plans is an important factor in determin-
ing whether a pension plan will be adopted. Unduly large
increases in cost can impede the progress of the private
pension system. For this reason, in the case of those
requirements which add to the cost of financing pension
plans, Congress tried to adopt provisions which strike a
balance between providing a meaningful protection for the
employees and keeping costs within reasonable limits for
employers.
Legislative History of the Employee Retirement Income
Security Act of 1974, 4800 (3 volumes, Subcommittee on Labor
of the Senate Committee on Labor and Public Welfare. April,
1976). This concern over increased costs and the harmful effect
they might have on the continuation of existing plans and the
instigation of new ones explains the careful choice of language
in section 1132, in specifically providing for injunctive relief and
the recovery of benefits and certain penalties and thus pre-
cluding compensatory and punitive damages.
A-12
Plaintiff has pointed to nothing in the legislative history
which undercuts this conclusion. The statement in the Senate
report to the effect that the Act is intended to provide “legal
and equitable remedies,” S.Rep. No. 93-127, 93d Cong., 2d
Sess., reprinted in [1974] U.S. Cong. Code & Admin. News
4871, does not demonstrate, as plaintiff urges, the propriety of
general and punitive damages. Instead, it suggests that the
committee considered the recovery of benefits or the clari-
fication of rights as legal remedies. Plaintiff's contention that
punitive damages are essential to deter breaches of fiduciary
duty and to guarantee proper management of the funds is also
devoid of merit. ERISA includes a strong deterrent to such
conduct in the form of criminal sanctions. Twenty-nine U.S.C.
§ 1131 provides:
Any person who willfully violates any provision of
part | of this subtitle, or any regulation or order issued
under any such provision, shall upon conviction be fined
not more than $5,000 or imprisoned not more than one
year, or both; except that in the case of such violation by a
person not an individual, the fine imposed upon such
person shall be a fine not exceeding $100,000.
Finally, the court concludes that its holding that neither
punitive nor compensatory damages is available under ERISA
is consistent with judicial interpretation of analogous statutes.
Such relief has generally been denied under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seg., EEOC v.
Detroit Edison Co., 515 F.2d 301 (6th Cir. 1975), the Age
Discrimination in Employment Act, 29 U.S.C. §§ 621-634,
Dean v. American Security Insurance Co., 559 F.2d 1036 (5th
Cir. 1977), cert. denied, 434 U.S. 1066 (1978), the Equal Pay
Act, 29 U.S.C. § 206(d), Kumbalek v. I. Bahcall Industries,
Inc., 6 FEP Cas. 1269 (E.D. Wis. 1974), and the National
Labor Relations Act, 29 U.S.C. §§150, et seg., International
Union, UAA & AIW v. Russell, 356 U.S. 634 (1958). Plaintiff's
citations to cases brought pursuant to the Labor Management
Reporting and Disclosure Act, 29 U.S.C. §§ 401-412, in which
A-13
punitive and compensatory damages have been awarded are
inayposite since section 412, the remedial provision, authorizes
suits to obtain “such relief (including injunctions) as may be
appropriate” and thus clearly permits awards of damages.
Plaintiff's attempted analogy to certain provisions of the Labor
Management Relations Act, 29 U.S.C. §§ 141, et seq., meets a
similar fate. The remedial language of both sections 185
(“money judgment”) and 187 (‘damages’) differs signifi-
cantly from that contained in ERISA’s enforcement provision.
Accordingly, this court concludes that neither compensatory nor
punitive damages are available in actions brought pursuant to
ERISA. See Hurn v. Retirement Fund Trust, 424 F.Supp. 80
(C.D. Cal. 1976); Bell v. Southern Log Scaling & Grading
Bureau, No. 76-431 (D. Ore., Aug. 5, 1976).
While this result requires the court to dismiss Counts II, III
and IV, plaintiff contends that Counts V through VIII are still
properly before the court. According to plaintiff, these counts
set forth causes of action for fraud, misrepresentation and
deceit, intentional and negligent infliction of emotional distress,
breach of duty to deal in good faith, and tortious interference
with the fiduciary relationship. Plaintiff's Supplemental Oppo-
sition, at 28. His principal argument for the vitality of these
counts appears to be that under ERISA these torts must be
recognized as a part of the federal common law. The court
declines this invitation to so extend the law, however. Noting
that plaintiff has not alleged the existence of pendant jurisdic-
tion for these claims or identified the state law on which they
might be based, defendants have moved to dismiss these four
counts on the grounds that the court should not exercise its
pendant jurisdiction over these claims or, alternatively, that
ERISA preempts all state tort claims relating to pension and
welfare benefits. Since plaintiff has not seriously considered
these issues in his briefs, the court will DEFER decision on the
dismissal of Counts V through VIII and GRANT plaintiff an
additional twenty (20) days in which to submit a supplemental
brief on these topics. Defendants may then submit a reply brief
within twenty (20) days of receipt of plaintiffs memorandum.
A-14
The last major question to be resolved is whether or not
plaintiffs demand for a trial by jury should be stricken.
Defendants argue that plaintiffs suit seeks only equitable relief
and thus that a jury trial would be inappropriate. They claim
that just as “back pay” has been held to be restitution and thus
equitable relief in Title VII actions so that jury trials have not
been required, Slack v. Havens, 522 F.2d:1091 (9th Cir. 1975),
plaintiff's claim for benefits—which appears to be the critical
claim in this lawsuit—must be considered equitable. The court
disagrees.
While it is true that a monetary remedy need not neces-
sarily be a legal remedy, whether it is to be considered legal or
equitable is determined by interpretation of the remedial statute
as a whole. Any pertinent legislative history will, of course,
assist in this determination.
In Title VII, to which defendants analogize, the remedial
provision, 42 U.S.C. § 2000e-5(g), states:
[T]he court may enjoin the respondent from engaging in
such unlawful employment practice, and order such
affirmative action as may be appropriate, which may
include, but is not limited to, reinstatement or hiring of
employees, with or without back pay .. . or any other
equitable relief as the court deems appropriate.
(Emphasis added.) Thus it is clear that back pay, in this
context, is “other equitable relief’, and a trial by the court
sitting without a jury is therefore proper.
The remedial provision of the Age Discrimination in
Employment Act, on the other hand, states that its provisions
shall be enforced in accordance with the Fair Labor Standards
Act (FLSA), 29 U.S.C. §§ 201, et seg., and that “amounts
Owing to a person as a result of a violation of [the ADEA] shall
be deemed to be unpaid minimum wages or unpaid overtime
compensation” under the FLSA. 29 U.S.C. § 626(b). A court
A-15
is also authorized to give “such legal or equitable relief as may
be appropriate.” /d. Relying upon the stated connection
between the FLSA, which permitted jury trials, and the ADEA
and the reference to /ega/ relief, the Supreme court concluded
that under the ADEA a jury trial was required upon timely
demand. Lorillard v. Pons, 434 U.S. 575 (1978).
The provision at issue in the instant action falls between
these two extremes and presents a much closer question. As
noted earlier, it states in part:'@
(a) Accivil action may be brought—
(1) by a participant or beneficiary—
(B) to recover benefits due to him under the
term 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;
(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.
The structure of this section was considered in Stamps v.
Michigan Teamsters Joint Council No. 43, 431 F.Supp. 745, 747
(E.D. Mich. 1977):
_ The section sets forth, in the alternative, two remedies
which are available to the beneficiary. Subsection (a)(3)
clearly and specifically creates a civil action for equitable
12 See text at pp. 8-9, supra, for entire statute.
A-16
relief. Subsection (a)(1)(B) creates a different civil action
for legal relief. This follows the general rule of statutory
construction that statutes should be construed in such a
way as to render none of the subsections superfluous. If
the court construed subsection (a)(1)(B) to also create a
cause of action for equitable relief, it would be superfluous
to subsection (a)(3).
This court now concludes that the Stamps approach presents
the proper construction of this statute.
That the monetary benefits envisioned by subsection
(a)(1)(B) are to be considered legal relief is supported by at
least two portions of ERISA’s legislative history. First, the Joint
Conference Report states that actions pursuant to this section
“are to be regarded as arising under the laws of the United
States in similar fashion to those brought under section 301 of
the Labor-Management Relations Act of 1947.” H.R. Conf.
Rep. No. 93-1280, 93d Cong., 2d Sess., reprinted in [1974]
U.S. Cong. Code & Admin. News, 5038, 5107. Suits of that
nature are customarily tried to a jury. Steele v. Brewery
Workers Local 116, 432 F.Supp. 369 (N.D. Ind. 1977). Sec-
ond, as mentioned earlier, the Senate report referred to “legal
and equitable remedies” available under ERISA. This refer-
ence to “legal” must have been made with the recovery of
monetary benefits in mind. Accordingly, the court concludes
that plaintiff has stated a claim for legal relief and is therefore
entitled to a jury trial. Defendants’ motion to the contrary is
DENIED.
Finally, the court DENIES defendants’ request for costs
and attorneys’ fees in connection with this motion.
In sum, defendants’ motion to dismiss or to strike is
GRANTED in part and DENIED in part, their request for
costs and attorneys’ fees is DENIED, and the reques« for oral
argument is also DENIED. Plaintiff is DIRECTED to submit a
supplemental brief within twenty (20) days and defendants are
ome NF
A-17
DIRECTED to file their response, if any, within twenty (20)
days of receipt of plaintiff's brief. The clerk is DIRECTED to
resubmit this case in forty (40) days.
So ORDERED, this 20th day of December, 1978.
NEWELL EDENFIELD
Newell Edenfield,
United States District Judge
Bere
APPENDIX B
In The United States District Court
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
FREDERICK B. PFISTER,
Plaintiff,
VS.
Civit ACTION
DELTA Air LINES, INC.,
CHARLES T. BisHoP, Jr.,
BREWER ADJUSTMENT
COMPANY, et al.,
No. C78-1567A
Defendants.
ORDER
The within and foregoing Motion of Gorman and Canfield
and Austin F. Canfield, Jr. as present attorneys of record for
defendant Brewer Adjustment Company, the sole proprietor-
ship of Joseph H. Brewer, now deceased, and defendant
Charles T. Bishop, Jr. having been read and considered and it
appearing to the Court that due notice of said request of such
attorneys and of this Motion having been given to defendant
Charles T. Bishop, Jr. and Mrs. Dorothy Bishop Brewer, the
Executrix and personal representative of Joseph H. Brewer,
deceased, and their being no objection to such Request and
Motion,
IT IS HEREBY ORDERED and adjudged that the firm of
Gorman and Canfiled, and Austin F. Canfield, Jr. be and
hereby are withdrawn as attorneys of record for defendants
Charles T. Bishop, Jr. and Brewer Adjustment Company and
I _
B-2 APPENDIX C
Joseph H. Brewer, deceased, and his personal representative, EXHIBIT B
Mrs. Dorothy Bishop Brewer, and, as moved, that the law firm Sa
of Hansell, Post, Brandon & Dorsey and its partners and United States District Court
associates are hereby acknowledged as attorneys of record for
said defendants and the clerk of this Court is directed to make NORTHERN DISTRICT OF GEORGIA
such changes on the docket and other papers to evidence such ATLANTA DIVISION
substitutions of attorneys.
This 26th day of December, 1978.
FREDERICK B. PFISTER
NEWELL EDENFIELD rs Civit ACTION
Judge, U.S. District Court No. C78-1567A
Northern District of Georgia DELTA AiR LINES, INC., et al
Atlanta Division
ORDER TO FORWARD COPIES
It appearing to the Court that a notice of appeal has been
filed by Frederick B. Pfister, plaintiff from the order of Decem-
ber 21, 1978, and it further appearing that this case is still
pending.
IT IS ORDERED that the Clerk forward copies of the
pleadings to the United States Court of Appeal in lieu of the
Originals.
This 16th day of February, 1979.
NEWELL EDENFIELD
Newell Edenfield,
United States District Judge
APPENDIX D
United States District Court
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
FREDERICK B. PFISTER,
ow Civit ACTION
Vs.
Dexa Air Linés, INC., et al. No. C78-1567A
Defendants.
ORDER
The foregoing Motion of the Plaintiff, FREDERICK B.
PFISTER, requesting substitution of MRS. DOROTHY
BISHOP BREWER, the Executrix of the Estate of JOSEPH H.
BREWER, now deceased, sole owner and proprietor of named
Defendant BREWER ADJUSTMENT COMPANY and
providing for the continuance of the within action against said
substituted Executrix as a personal representative of aforesaid
deceased, JOSEPH H. BREWER, sole owner and proprietor of
BREWER ADJUSTMENT COMPANY, having been duly
read and considered and proper notice afforded all parties of
record in the within proceeding,
IT IS HEREBY ORDERED AND ADJUDGED that the
Motion of the Plaintiff, FREDERICK B. PFISTER, substitut-
ing MRS. DOROTHY BISHOP BREWER, the Executrix of the
Estate of JOSEPH H. BREWER, the sole owner and proprietor
of BREWER ADJUSTMENT COMPANY, the named De-
fendant herein, be forthwith granted and entered by the Clerk
of this Court.
D-2
IT IS FURTHER ORDERED hereby that the within
action be further continued and prosecuted against BREWER
ADJUSTMENT COMPANY by and in the name of the
aforesaid Executrix MRS. DOROTHY BISHOP BREWER;
and that all processes duly invoked by this Court shall bind and
otherwise obligate her as the Executrix of the Estate of JOSEPH
H. BREWER, sole owner of BREWER ADJUSTMENT COM-
PANY, and
IT IS FURTHER ORDERED that the estate of JOSEPH
HUGH BREWER, Decedent, identified as Estate No. 106-196
in the Probate Court in and for the County of Fulton, State of
Georgia, remain open; and said Probate proceedings stayed
until the claim of the Plaintiff against said Estate of JOSEPH H.
BREWER as embodied in the Complaint herein as finally and
properly discharged to the satisfaction of the Plaintiff.
SO ORDERED this 27th day of June, 1979.
NEWELL EDENFIELD
Judge, U.S. District Court
Northern District of Georgia
Atlanta Division
APPENDIX E
United States District Court
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
FREDERICK B. PFISTER
CiviL ACTION
VS.
No. C78-1567A
DELTA AIR LINES, INC. et al.
ORDER
This is a civil action involving alleged violations of the
Employment Retirement Income Security Act of 1974
(ERISA), 29 29 U.S.C. §§ 1001, et seg., by twenty-six defend-
ants.' It is now before the court pursuant to the court’s order
of December 20, 1978 and plaintiff's request for reconsideration
of that order. A brief review of the facts is appropriate.
‘ Plaintiff has named as defendants: Delta, the Delta Employee
Benefit Plan, consisting of Delta Family Care, Disability and
Survivorship Plan, Delta Air Lines, Inc. Group Insurance Plan, and
Delta Family-Care Retirement Plan; the Delta Administrative Com-
mittee acting on behalf of Delta Family Care, Disability and
Survivorship Plan, and Delta Family-Care Retirement Plan; Delta
Administrative Committee members W.T. Beebe, D.C. Garrett, Jr., R.
Oppenlander, J.R. Howell, H.T. Fincher, R.W. Allen, R.S. Maurer,
T.M. Miller, Wm. E. Stephens, each in their individual capacities; the
Plan Administrator of Delta Family Care, Disability and Survivorship
Plan, Delta Family-Care Retirement Plan, and Delta Employee
Benefit Plan, individually; John Aduddell; J.J. Schneider; and Donald
Baus (ali of the above hereinafter collectively referred to as “Delta
defendants”); Charles T. Bishop, Jr.; and the Brewer Adjustment
Company.
E-2
Plaintiff asserts that in 1973, while employed as a
mechanic by Delta at its Washington National Airport facilities
and while a participant in the Delta employee disability,
medical, and retirement benefit plan (“Plan”), he injured his
back. He further contends that he reinjured his back on March
30, 1974 but that despite this injury he continued to work for
Delta through June 30, 1974. Plaintiff states that following his
second injury Delta promised to provide him with “light work”
in the future. Contrary to this agreement, however, Delta
allegedly continued to assign plaintiff to tasks requiring heavy
lifting, which resulted in his total disability from June 30, 1974
to the present. Plaintiff further charges that during the March-
June 1974 period, Delta, acting in concert with the Plan, sought
to force plaintiff to quit his employment so that he would forfeit
all plan benefits. In addition, certain of the defendants are said
to have induced plaintiff to meet with defendant Bishop, an
insurance adjuster employed by defendant Brewer Adjustment
Company, in the absence of counsel, by telling him he had
already been determined to be totally disabled? and would
receive all his benefits under the Plan. Plaintiff contends that
he made a statement during this interview which defendants
have interpreted as being damaging to his disability claim and
that as a result of this comment defendant Bishop met with
plaintiff's physician and prevailed upon him to revise his
diagnosis and declate plaintiff eligible for light duty work. On
March 1, 1975, the Plan allegedly rescinded plaintiff's per-
manent disability status and canceled all his emplyee benefits
without providing any reasons for such action and without
affording plaintiff an opportunity to be heard. Plaintiff also
asserts that after this arbitrary action, he attempted to obtain
copies of the benefit plans and other pertinent information but
2On November 8, 1974, a physican certified plaintiff as totally
disabled, and sometime thereafter, Delta and the Plan appear to have
acknowledged his disability and granted him disability status through
February 28, 1975.
E-3
that defendants refused to provide him with the same until after
this suit was filed, thus preventing him from either converting
his insurance or appealing the decision regarding his disability.
Claiming that he was inappropriately denied Plan benefits
and that he has suffered great physical and emotional harm
because of defendants’ activities, plaintiff filed the instant action
seeking disability and retirement benefits, compensatory and
punitive damages in excess of $48,000,000, injunctive relief, a
$100 per day penalty for failure to provide him with Plan
information, and attorneys’ fees. By order dated December
20, 1978, in response to a motion submitted by all but two of
defendants,‘ the court dismissed various aspects of plaintiff's
eight-count complaint. Counts II through IV, which sought
compensatory and punitive damages from defendants, were
dismissed when the court determined that ERISA’s general
remedial scheme does not support claims for such relief. In
addition, the court dismissed the prayer for injunctive relief set
forth in Count I to the extent that it sought to enjoin defendants
from future discrimination against Plan participants other than
plaintiff on the ground that this suit had not been brought on
behalf of a class.5 Noting that plaintiff had not considered
defendants’ preemption or pendent jurisdiction arguments in
support of their motion to dismiss Counts V through VIII,
which allegedly set forth state law tort claims for compensatory
and punitive damages, however, the court deferred a decision
on this portion of the motion. Plaintiff was granted an
additional period of time within which to submit a supplemen-
tal brief on the issues raised by defendants, and defendants
3 This action was originally filed in the United States District
Court for the District of Columbia and was transferred to this district
pursuant to 28 U.S.C. § 1404(a) on September 15, 1978.
__ “Defendants Brewer Adjustment Company and Charles T.
Bishop, Jr. did not join in this motion.
5 Plaintiff suggests that the court actually dismissed his entire
request for injunctive relief. This is clearly an incorrect interpretation
of the decision. See Order of December 18, 1978, at 5.
E-4
were permitted an additional period of time in which to file a
reply brief. Plaintiff has now submitted to the court two
documents, styled “Plaintiff's Motion for Reconsideration” and
‘“‘Memorandum of Points and Authorities in Support of Country
Ordered Reconsideration,” which apparently include whatever
reply he proposes to make to defendants’ contentions regarding
the tort counts, and defendants have responded.
Plaintiffs motion for reconsideration focuses primarily
upon the court’s determination that compensatory and punitive
damages are not available as remedies for violations of ERISA
and its consequent dismissal of Counts II through IV.6
Although plaintiff has presented no new arguments or authority
in support of his position that such damages were intended
under the statute, the court has carefully reviewed the question
and concludes that its earlier decision was correct. Com-
pensatory and punitive damages are not authorized under the
precise and detailed statutory language of ERISA, and, given
this statutory structure, the court sees no basis for constructing a
new set of remedies. It therefore declines to alter its order and
DENIES plaintiffs motion for reconsideration.
The court must next consider that portion of defendants’
motion—which had previously been deferred—requesting that
Counts V through VIII of the complaint be dismissed. These
counts seek compensatory and punitive damages for torts
allegedly committed by defendants in the course of denying
plaintiff his employee benefits. According to plaintiff, they set
forth causes of action for the intentional and negligent infliction
of emotional distress (Count V), fraud, misrepresentation, and
deceit (Count VI), tortious interference with the attorney-client
relationship (Count VII), and breach of the fiduciary duty to
deal in good faith (Count VIII). Defendants contend that
6 Plaintiff also takes issue with certain portions of the statement
of facts contained in the December order. Since the facts in question
had no bearing on the substantive rulings in that order, the court need
not resolve these objections.
E-5
these counts are subject to dismissal because plaintiffs com-
plaint specifically states that his claims arise only under ERISA
and such claims are not cognizable under that statute, because
ERISA preempts all state tort claims, and because even if such
claims are not preempted, the court should not exercise its
pendent jurisdiction over these counts.
Paragraph | of Count I of the complaint sets forth the
specific legal bases for this lawsuit, and this paragraph is
incorporated into all other counts of that document. Since this
paragraph refers only to ERISA, and presents no other ground
for relief, defendants assert that these counts seeking com-
pensatory and punitive damages should be dismissed as were
Counts II through IV.
Although defendants’ statement of the jurisdictional bases
asserted in the original complaint is correct, plaintiff's response
reveals his belief that he has invoked the court’s pendent
jurisdiction to assert state tort claims.”? He notes that his
‘“‘Answer to Defendants’ Motion to Dismiss” filed in February,
1977, refers to the court’s pendent jurisdiction over these
counts, and, in addition, he relies upon a “Supplemental
Complaint” from November, 1978 which he indicates corrected
the oversight in the earlier complaint. While the official file and
docket do not reflect the filing of such a supplemental com-
plaint, the court concludes that since plaintiff has evidenced his
intent to invoke the court’s pendent jurisdiction and can easily
remedy his failure to do so in his complaint, dismissal of Counts
V through VIII on this technical point would be inappropriate.
7 The court initially understood—perhaps incorrectly—plaintiff
to be arguing that the torts alledged in these counts must be
recognized as part of the federal common law under ERISA. It
declined to so extend the law, however. See Order of December 18,
1978, at 13.
E-6
Defendants next contend that these tort counts must fail
because ERISA preempts state tort claims of this nature.
Section 514(a) of ERISA, 29 U.S.C. § 1144(a), states:
Except as provided in subsection (b) of this section, the
provisions of this subchapter and subchapter III of this
chapter shall supersede any and all state laws insofar as
they may now or hereafter relate to any employee benefit
plan described in section 1003(a) of this title and not
exempt under section 1003(b) of this title. This section
shall take effect on January 1, 1975.
State laws are defined as “all laws, decisions, rules, regulations
or other state action having the effect of law,” 29 U.S.C.
§ 1144(c), as indicated, subsection (b) of this statute carves a
narrow area in which state laws may continue to operate.
Those state laws not preempted are ones “regulating insurance,
banking, or securities” and “any generally applicable criminal
laws.” No specific exception for tort laws of general appli-
cation was included.
Section 514(a) was clearly intended to have broad pre-
emptive effect, see Wadsworth v. Whaland, 562 F.2d 70 (Ist
Cir. 1977), cert. denied, 435 U.S. 980 (1978); National Car-
riers’ Conference Committee v. Heffernan, 454 F.Supp. 914 (D.
Conn. 1978); Hewlett Packard Co. v. Barnes, 425 F.Supp. 1294
(N.D. Cal. 1977), aff'd 571 F.2d 502 (9th Cir.), cert. denied,
47 U.S.L.W. 3222 (U.S., October 2, 1978 )( detailed reviews of
the provision’s legislative history), and it appears, given the
connection between the allegedly tortious activities, the fidu-
ciary obligation, and the Plan, that this provision would
encompass the claims in issue here. Hurn v. Retirement Fund
Trust, 424 F.Supp. 80 (C.D. Cal. 1976); see Francis v. United
Technologies Corp., 458 F.Supp. 84 (N.D. Cal. 1978). But see
American Telephone & Telegraph Co. v. Merry, 592 F.2d 118
(2d Cir. 1979); STONE v* STONE, 450 F.Supp. 919 (N.D.
Cal. 1978), appeal pending, No. 78-2313 (9th Cir.). The court
need not resolve this question at this juncture, however, since
eee
E-7
even assuming that plaintiff could assert a nonpreempted claim
in tort, the court would decline to exercise its pendent jurisdic-
tion to hear it.
In United Mine Workers v. Gibbs,383 U.S. 715 (1966), the
Supreme Court discussed various factors to be taken into
consideration before a federal court exercises its pendent
jurisdiction over a state law claim. It stated:
That power [of pendant jurisdiction] need not be exer-
cised in every case in which it is found to exist. It has
consistently been recognized that pendent jurisdiction is a
doctrine of discretion, not of plaintiffs right. Its justifica-
tion lies in considerations of judicial economy, convenience
and fairness to litigants; if these are not present a federal
court should hesitate to exercise jurisdiction over state
claims, even though bound to apply state law to them.
Needless decisions of state law should be avoided both as
a matter of comity and to promote justice between the
parties, by procuring for them a surer-footed reading of
applicable law. ae
Id. at 726. (Citations and footnotes omitted.) The Court also
noted that the substantial predomination of state issues,
“whether in terms of proof, of the scope of the issues raised, or
of the comprehensiveness of the remedy sought” and the
likelihood of jury confusion in treating divergent legal theories
of relief should weigh heavily in leaving the resolution of state
claims to state tribunals. Jd. at 726-27.
Consideration of these factors in the case at bar leads to
the conclusion that this is not a proper case for the exercise of
pendent jurisdiction. The trial of a state cause of action in tort
for recovery of compensatory and punitive damages in the same
proceeding as an action under ERISA to recover lost benefits
would result in further complication of an already difficult and
complex lawsuit. Moreover, it appears that in connection with
his state tort claims, plaintiff will need to offer evidence of
incidents or facts which have no bearing on the benefits
E-8
question. Thus, if the state tort claims are tried with the federal
claims, the likelihood of jury® confusion “in treating divergent
legal theories of relief” is substantial. This is particularly true
since the court has dismissed plaintiffs requests for com-
pensatory and punitive damages under ERISA while plaintiff
will be able to litigate the question of such damages on his state
claims. Finally, on the basis of the relief requested, it appears
that the state tort issues substantially predominate plaintiff's
complaint. Plaintiff's ERISA claims seek $500,000 in benefits
and a penalty of $100 per day for failure to provide him with
Plan information. The total relief sought in Counts V through
VIII pursuant to his state causes of action amounts to
$25,000,000. Accordingly, on the basis of these factors, the
court DECLINES to exercise its pendent jurisdiction over the
state claims set forth in these counts. See Hurn, supra; Van
Hoomissen v. Xerox Corp., 368 F.Supp. 829 (N.D. Cal.
1973 )( Title VII).
In sum, plaintiff's motion for reconsideration is DENIED
and defendants’ motion to dismiss Counts V through VIII is
GRANTED.
So ORDERED, this 29th day of June, 1979.
NEWELL EDENFIELD
Newell Edenfield,
United States District Judge
8In its December order, the court determined that plaintiff is
entitled to a jury trial on his ERISA claim.
APPENDIX F
In the United States Court of Appeals
FOR THE FIFTH CIRCUIT
No. 79-1763
FREDERICK B. PFISTER,
Plaintiff-Appellant,
versus
DELTA AiR LINES, INC., et al.,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Georgia
Before CLARK, GEE and HILL, Circuit Judges.
BY [RE COURT:
IT IS ORDERED that appellees’ motion to dismiss the
appeal is granted.
APPENDIX G
In the United States Court of Appeals
FOR THE FIFTH CIRCUIT
No. 79-1763
FREDERICK B. PFISTER,
Plaintiff-Appellant,
versus
DeLTA AiR LINES, INC., et al,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Georgia
OR DER:
IT IS ORDERED that appellant’s application to recall and
stay mandate and for extension of time in which to file a
petition for rehearing en banc of this Court’s dismissal order of
July 3, 1979, is granted. Such petition shall be filed within
twenty days of the filing of this order.
United States Circuit Judge
APPENDIX H
United States Court of Appeals
FIFTH CIRCUIT
OFFICE OF THE CLERK
October 1, 1979
Tel 504-589-6514
Gilbert F. Ganucheau 600 Camp Street
Clerk New Orleans, LA. 70130
TO ALL PARTIES LISTED BELOW:
NO. 79-1763 — FREDERICK B. PFISTER v.
DELTA AIR LINES, ET AL.
Dear Counsel: R
This is to advise that an order has this day been entered
denying the petition ( ) for rehearing, and no member of the
panel nor Judge in regular active service on the Court having
requested that the Court to polled on rehearing en banc ( Rule
35, Federal Rules of Appellate Procedure; Local Fifth Circuit
Rule 16) the petition ( _) for rehearing en banc has also been
denied.
See Rule 41, Federal Rules of Appellate Procedure for issuance
and stay of the mandate.
Very truly yours,
GILBERT F. GANUCHEAU,
Clerk
By SALLY HAYWARD
Deputy Clerk
cc: Mr. Eugene J. Carella
Mr. Peter G. Nash
Messrs. David C. Garrett, III
Eugene G. Partain
Mr. Hugh E. Wright
APPENDIX I
In The United States Court Of Appeals
FOR THE FIFTH CIRCUIT
Nos. 79-1763 & 79-3207
FREDERICK B. PFISTER,
Plaintiff-Appellant,
versus
Decta Air Lines, INC., et al.,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Georgia
Before GEE, HENDERSON and HATCHETT, Circuit Judges.
aY THRE: COURT
IT IS ORDERED that appellant’s motion for stay of
mandate in case No. 79-1763, and to consolidate that cause
with No. 79-3207 is DENIED.
IT IS FURTHER ORDERED that appellee’s motion to
dismiss the appeal in case No. 79-3207 is GRANTED.
IT IS FURTHER ORDERED that appellee’s motion to
hold plaintiff's counsel personally responsible for costs, in-
cluding attorney’s fees of the appeal taken in case No. 79-3207
is REMANDED to the trial court for consideration there.
APPENDIX J
In The United States Court of Appeals
FOR THE FIFTH CIRCUIT
Nos. 79-1763 and
79-3207
FREDERICK B. PFISTER,
Plaintiff-Appellant,
versus
DELTA AiR LINES, INC., et al.,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Georgia
Before GEE, HENDERSON and HATCHETT, Circuit Judges.
BY THE COURT:
IT IS ORDERED that appelant’s motion for LEAVE TO
FILE amended complaint and pleading in this court is DE-
NIED.
IT IS FURTHER ORDERED that appellant's motion
to disqualify lead courisel for the defendants-appellees is
DENIED.
IT IS FURTHER ORDERED that appellant’s motion for
stay of all further proceedings in both the district court and this
court until the lower court acts upon the motion for dis-
qualification, is DENIED WITHOUT PREJUDICE.
ene
J-2 APPENDIX K
IT IS FURTHER ORDERED that appellant’s opposition | In the United States Court of Appeals
and cross request for sanctions and its annexed petition for
rehearing and suggestions for rehearing en banc are, on the FOR THE FIFTH CIRCUIT
court’s own initiative, stricken as containing impertinent, dis-
respectful and unnecessarily abusive references to the district
judge and to opposing counsel and parties. Fed.R.Civ.P. 12(f), Nos. 79-1763 and
see Theriault v. Silber, 574 F.2d 197 (Sth Cir. 1978). Should 79-3207
counsel desire to file papers, couched in more moderate terms,
seeking the relief proposed in the stricken documents, he is FREDERICK B. P sicaicaagng
granted leave to do so within ten days. Plaintiff-Appellant,
versus
Dexta Air LINES, INC., et al.,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Georgia
Before GEE, HENDERSON and HATCHETT, Circuit Judges.
BY THE COURT:
7 IT IS ORDERED that Appellant’s motion for this panel to
stand recused and to vacate various of its prior orders is
DENIED.
IT Is FURTHER ORDERED that Appellant’s petition for
rehearing and for other relief lodged with Chief Judge Brown
having been, by the Chief Judge’s instructions, referred to the
panel which entered the orders of which rehearing is sought, is
DENIED.
IT IS FURTHER ORDERED that counsel for Appellant,
Mr. Eugene J. Carella, before seeking to practice further before
this Court, obtain admission to its Bar as required by Local
Rule 5. The Clerk is directed to mail to Mr. Carella the form
required by Rule 46, Fed.R.App.P. and to accept no further
- filings by Mr. Carella until he shall have been admitted to the
Bar of this Court.
APPENDIX L
United States Court of Appeals
FIFTH CIRCUIT
OFFICE OF THE CLERK
December 18, 1979
GILBERT F. GANUCHEAU .. TEL 504-589-6514
CLERK 600 CAMP STREET
NEW ORLEANS, LA 70130
Mr. Ben H. Carter, Clerk
U. S. District Court
56 Forsyth St., NW
Atlanta, GA 30303
NOS. 79-1763 & 79-3207— |
FREDERICK B. PFISTER
VS.
DELTA Air Lines, INC., et al.
(Dist. Ct. No. C78-1567A)
Dear Mr. Carter:
Enclosed is a certified copy of this Court’s order of November
13, 1979 which is reissued as and for the mandate in the above
cases.
The records in each case will be returned at a later date.
Very truly yours,
GILBERT F. GANUCHEAU,
Clerk
BY BRENDA HAUCK
Deputy Clerk
/bh
enclosure
cc: (LETTER ONLY)
Mr. Eugene J. Carelia
Mr. Peter G. Nash
Messrs. Eugene G. Partain
David C. Garrett, III
Mr. Hugh E. Wright
APPENDIX M
United States District Court
NORTHERN DISTRICT OF GEORGIA
OFFICE OF THE CLERK
Room 100, U. S. Courthouse
56 Forsyth Street, N.W.
Atlanta, Georgia 30303
BEN H. CARTER IN REPLYING, GIVE NUMBER
CLERK OF CASE AND NAMES OF PARTIES
Eugene J. Carella RE: FREDERICK B. PFISTER
5455 Wilshire Blvd. vs
Suite 1706
DeLTa Aire Lines, INc., Et AL
Los Angeles, California 90036 C78-1567A
NOTICE
Please be advised that effective December 3, 1979, the above
styled action has been reassigned to the Honorable Robert H.
Hall. If you have any questions, please contact Kay Bates,
Courtroom Deputy Clerk for Judge Hall at (404) 221-5207.
BEN H. CARTER, CLERK
By KAY BATES
Kay Bates
Courtroom Deputy Clerk
APPENDIX N
United States District Court
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
FREDERICK B. PFISTER
Civit ACTION
Vs.
No. C78-1567A
DELTA AIRLINES, INC., et al.
ORDER
This action is currently before the court on plaintiff's
motion for disqualification of the undersigned distnct judge.
Inasmuch as this case is being transferred to Judge Robert H.
Hall, who was recently. appointed to this court, plaintiff's
motion is DENIED AS MOOT.
SO ORDERED, this 18th day of December, 1979.
NEWELL EDENFIELD
Newell Edenfield,
‘United States District Judge
APPENDIX O
In The United States Court of Appeals
FOR THE FIFTH CIRCUIT
Nos. 79-1763 &
79-3207
FREDERICK B. PFISTER,
Plaintiff-Appellant,
versus
DELTA AiR LINES, INC., et al.,
Defendants-Appellees.
INDEX
VOLUMES DOCUMENTS
Volume I
I l
Volume II
MERA LC TO COTTON LT RECT 2
Volume III
Motion To Dismiss Appeal No. 79-1763 ............:cccccceseseeeeseees 3
Order Granting Motion to Dismiss Appeal No. 79-1763........ 4
Telegraphic Motion For Recall Of Mandate in cause No.
Pa ia sai iech talon cclaita Sach gipecdidakh Adneghosutidenigionbbotnenaléncsandeibosinesias 5
Order Granting Motion For Recall Of Mandate in cause No.
RE ee aiieaasatiiiiei th Nai dikDinsiiclisteabieancapicadubeiatistbarabatbebasaahabooaics 6
Order Denying Petition For Rehearing And Petition For
Rehearing En Banc in cause No. 79-1763 ............:.sceses0e00. 7
Motion For Stay And To Consolidate Appeals Nos. 79-1763
raat achanaacattscihS cestaggthidcedcesuneinpsandesciasssbandces 8
Motion to Dismiss Appeal And To Hold Plaintiff's Counsel
Personally Responsible For the Costs, Including At-
torneys’ Fees filed in No. 79-3207.................c.ccccccossssccosseceees 9
VOLUMES DOCUMENTS
Addendum To Brief In Support Of Motion To Dismiss, etc.,
a TI SP iia arrcliserettncdisaieipecadeniintdomndianteesatenasateientns
Appellee’s Response To Appellant’s Motion For Stay and
Consolidation in Nos. 79-1763 and 79-3207 ..............sscee000
Appellant’s Opposition And Cross-Request For Sanctions
PS NINN RUT. FI chicas ie eenntale sOtigeinsccnbiniceennsoneds
Motion For Leave To File Amended Complaint And Plead-
ing In This Court filed in cause Nos. 79-1763 and 79-3207
Motion To Disqualify Legal Counsel For The Defendants-
Appellees filed in cause Nos. 79-1763 and 79-3207............
Motion For Stay Of All Proceedings filed in cause Nos. 79-
Se UE i cnetechecctcniicph<nsnsdnea atathulc she isebibbicienininsionione
Order of November 5, 1979 Denying Motion For Stay Of
Mandate And To Consolidate; Granting Appellee’s Mo-
tion To Dismiss and Remanding to the District Court
Appellee’s Motion To Hold Plaintiff's Counsel Personally
REM iin MCR TIO TEN
Order of November 13, 1979 Denying Motion For Leave To
File Amended Complaint; Denying Motion To Disqualify
Lead Counsel For Defendants-Appellees; Denying Mo-
tion For Stay Of All Further Proceedings, etc., and
Striking Appellant’s Cross-Request For Sanctions, etc. ......
Petition For Rehearing Addressed to Chief Judge John R.
Brown filed in cause Nos. 79-1763 and 79-3207 .................
Motion For Recusal Of Court Of Appeals Panel And To
Vacate Panel Order Of November 13, 1979 and Prior
Order of November 5, 1979, filed in cause Nos. 79-1763
I FT cit ibis hai diotesipaisaaiaidashancedbaeuh ih harecbissinsancchsecinin
Order Denying Appellant’s Motion For Recusal Of Panel
And To Vacate Orders and Denying Appellant’s Petition
For Rehearing lodged with Chief Judge Brown..................
Clerk’s Certificate .............. ite.
10
12
13
14
15
16
17
18
19
APPENDIX P
Whenever a party to any proceeding in a district court
makes and files a timely and sufficient affidavit that the judge
before whom the matter is pending has a personal bias or
prejudice either against him or in favor of any adverse party,
such judge shall proceed no further therein, but another judge
shall be assigned to hear such proceeding.
The affidavit shall state the facts and the reasons for the
belief that bias or prejudice exists, and shall be filed not less
than ten days before the beginning of the term at which the
proceeding is to be heard, or good cause shall be shown for
failure to file it within such time. A party may file only one such
affidavit in any case. It shall be accompanied by a certificate of
counsel of record stating that it is made in good faith. As
amended May 24, 1949, c. 139, § 65, 63 Stat.99.
(a) Any justice, judge, magistrate, or referee in bankruptcy
of the United States shall disqualify himself in any proceeding
in which his impartiality might reasonably be questioned.
(b) He shall also disqualify himself in the following
circumstances:
(1) Where he has a personal bias or prejudice
concerning a party, or personal knowledge of disputed
evidentiary facts concerning the proceeding;
(2) Where in private practice he served as lawyer in
the matter in controversy, or a lawyer with whom he
previously practiced law served during such association as
a lawyer concerning the matter, or the judge or such
lawyer has been a material witness concerning it;
(3) Where he has served in governmental employ-
ment and in such capacity participated as counsel, adviser
or material witness concerning the proceeding or expressed
an opinion concerning the merits of the particular case in
controversy;
(4) He knows that he, individually or as a fiduciary,
or his spouse or minor child residing in his household, has
P-2
a financial interest in the subject matter in controversy or in
a party to the proceeding, or any other interest that could
be substantially affected by the outcome of the proceeding;
(5) He or his spouse, or a person within the third
degree of relationship to either of them, or the spouse of
such a person:
(i) Is a party to the proceeding, or an Officer,
director, or trustee of a party;
(ii) Is acting as a lawyer in the proceeding;
(iii) Is known by the judge to have an interest
that could be substantially affected by the outcome of
the proceeding;
(iv) Is to the judge’s knowledge likely to be a
material witness in the proceeding.
(c) A judge should inform himself about his personal and
fiduciary financial interests, and make a reasonable effort to
inform himself about the personal financial interests of his
spouse and minor children residing in his household.
(d) For the purposes of this section the following words or
phrases shall have the meaning indicated:
(1) “proceeding” includes pretrial, trial, appellate
review, or other stages of litigation;
(2) the degree of relationship is calculated according
to the civil law system;
(3) “fiduciary” includes such relationships as execu-
tor, administrator, trustee, and guardian;
(4) “financial interest” means ownership of a legal or
equitable interest, however small, or a relationship as
director, adviser, or other active participant in the affairs of
a party, except that:
(i) Ownership in a mutual or common in-
vestment fund that holds securities is not a “financial
interest” in such securities unless the judge partici-
pates in the management of the fund;
P-3
(ii) An office in an educational, religious, chari-
table, fraternal, or civic organization is not a “finan-
cial interest” in securities held by the organization;
(iii) The proprietary interest of a policyholder in
a mutual insurance company, of a depositor in a
mutual savings association, or a similar proprietary
interest, is a “financial interest” in the organization
only if the outcome of the proceeding could substan-
tially affect the value of the interest;
(iv) Ownership of government securities is a
‘financial interest” in the issuer only if the outcome of
the proceedings could substantially affect the value of
the securities. .
(e) No justice, judge, magistrate, or referee in bankruptcy
shall accept from the parties to the proceeding a waiver of any
ground for disqualification enumerated in subsection (b).
Where the ground for disqualification arises only under subsec-
tion (a), waiver may be accepted provided it is preceded by a
full disclosure on the record of the basis for disqualification.
As amended December 5, 1974, Pub.L. 93—512, § 1, 88 Stat.
1609.
Sec. 2. (a) The Congress finds that the growth in size, '
scope, and numbers of employee benefit plans in recent years
has been rapid and substantial; that the operational scope and ©
economic impact of such plans is increasingly interstate; that the
continued well-being and security of millions of employees and
their dependents are directly affected by these plans; that they are
affected with a national public interest; that they have become
an important factor affecting the stability of employment and
the successful development of industrial relations; that they
have become an important factor in commerce because of the
interstate character of their activities, and of the activities of
their participants, and the employers, employee organizations,
and other entities by which they are established or maintained;
that a large volume of the activities of such plans is carried on
P-4
by means of the mails and instrumentalities of interstate
commerce; that owing to the lack of employee information and
adequate safeguards concerning their operation, it is desirable in
the interests of employees and their beneficiaries, and to provide
for the general welfare and the free flow of commerce, that
disclosure be made and safeguards be provided with respect to the
establishment, operation, and administration of such plans; that
they substantially affect the revenues of the United States
because they are afforded preferential Federal tax treatment;
that despite the enormous growth in such plans many employees
with long years of employment are losing anticipated retirement
benefits owing to the lack of vesting provisions in such plans; that
owing to the inadequacy of current minimum standards, the
soundness and stability of plans with respect to adequate funds to
pay promised benefits may be endangered; that owing to the
termination of plans before requisite funds have been accumu-
lated, employees and their beneficiaries have been deprived of
anticipated benefits; and that it is therefore desirable in the
interests of employees and their beneficiaries, for the protection
of the revenue of the United States, and to provide for the free
flow of commerce, that minimum standards be provided assuring
the equitable character of such plans and their financial sound-
ness.
(b) It is hereby declared to be the policy of this Act to
protect interstate commerce and the interests of participants in
employee benefit plans and their beneficiaries, by requiring the
disclosure and reporting to participants and beneficiaries of
financial and other information with respect thereto, by estab-
lishing standards of conduct, responsibility, and obligation for
fiduciaries of employee benefit plans, and by providing for
appropriate remedies, sancations, and ready access to the Federal
courts.
(c) It is hereby further declared to be the policy of this Act
to protect linterstate commerce, the Federal taxing power, and
the interests of participants in private pension plans and their
beneficiaries by improving the equitavle character and the
soundness of such plans by requiring them to vest the accrued
P-5
benefits of employees with significant periods of service, to meet
minimum standards of funding, and by requiring plan termina-
tion insurance.
(4) The administrator shall, upon written request of any
participant or beneficiary, furnish a copy of the latest updated
summary plan description, plan description, and the latest
annual report, any terminal report, the bargaining agreement,
trust agreement, contract, or other instruments under which the
plan is established or operated. The administrator may make a
reasonable charge to cover the cost of furnishing such complete
copies. The Secretary may by regulation prescribe the max-
imum amount which will constitute a reasonable charge under
the preceding sentence.
(c) The Secretary may by regulation require that the
administrator of any employee benefit plan furnish to each
participant and to each beneficiary receiving benefits under the
plan a statement of the rights of participants and beneficiaries
under this title.
(d) Cross REFERENCE—
Sec. 111. (a)(1) The Welfare and Pension Plans Dis-
closure Act is repealed except that such Act shall continue to
apply to any conduct and events which occurred before the
effective date of this part.
Sec. 404. (a)(1) Subject to sections 403 (c) and (d),
4042, and 4044, a fiduciary shall discharge his duties with
respect to a plan solely in the interest of the participants and
beneficiaries and—
(A) for the exclusive purpose of:
(i) providing benefits to participants and their
beneficiaries; and
(ii) defraying reasonable expenses of adminis-
tering the plan;
P-6
(B) with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such maters
would use in the conduct of an enterprise of a like
characier and with like aims;
(C) by diversifying the investments of the plan so as
to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
(D) in accordance with the documents and in-
struments governing the plan insofar as such documents
and instruments are consistent with the provisions of this
title.
(2) In the case of an eligible individual account plan (as
defined in section 407(d)(3)), the diversification requirement
of paragraph (1)(C) and the prudence requirement (only to
the extent that it requires diversification) of paragraph (1)(B)
is not violated by acquisition or holding of qualifying employer
real property or qualifying employer securities (as defined in
section 407(d) (4) and (5)).
(b) Except as authorized by the Secretary by regulation,
no fiduciary may maintain the indicia of ownership of any
assets of a plan outside the jurisdiction of the district courts of
the United States.
Sec. 405. (a) In addition to any liability which he may
have under any other provision of this part, a fiduciary with
respect to a plan shall be liable for a breach of fiduciary
responsibility of another fiduciary with respect to the same plan
in the following circumstances:
(1) if he participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such other
fiduciary, knowing such act or omission is a breach;
(2) if, by his failure to comply with section 404(a)(1)
in the administration of his specific responsibilities which
give rise to his status as a fiduciary, he has enabled such
other fiduciary to commit a breach; or
P-7
(3) if he has knowledge of a breach by such other
fiduciary, unless he makes reasonable efforts under the
circumstances to remedy the breach.
(b)( 1) Except as otherwise provided in subsection (d)
and in section 403(a) (1) and (2), if the assets of a plan are
held by two or more trustees—
(A) each shall use reasonable care to prevent a co-
trustee from committing a breach; and
(B) they shall jointly manage and control the assets of
the plan, except that nothing in this subparagraph (B)
shall preclude any agreement, authorized by the trust
instrument, allocating specific responsibilities, obligations,
or duties among trustees, in which event a trustee to whom
certain responsibilities, obligations, or duties have not been
allocated shall not be liable by reason of this subparagraph
(B) either individually or as a trustee for any loss resulting
to the plan arising from the acts or omissions on the part of
another trustee to whom such responsibilities, obligations,
or duties have been allocated.
(2) Nothing in this subsection shall limit any liability that
a fiduciary may have under subsection (a) or any other
provision of this part.
Sec. 406. (a) Except as provided in section 408:
(1) A fiduciary with respect to a plan shall not cause
the plan to engage in a transaction, if he knows or should
know that such transaction constitutes a direct or indirect—
(A) sale or exchange, or leasing, of any property
between the plan and a party in interest;
(B) lending of money or other extension of credit
between the plan and a party in interest;
(C) furnishing of goods, services, or facilities
between the plan and a party in interest;
(D) transfer to, or use by or for the benefit of, a
party in interest, of any assets of the plan; or
P-8
(E) acquisition, on behalf of the plan, of any
employer security or employer real property in viola-
tion of section 407(a).
(2) No fiduciary who has authority or discretion to
control or manage the assets of a plan shall permit the plan
to hold any employer security or employer real property if
he knows or should know that holding such security or real
property violates section 407(a).
(b) A fiduciary with respect to a plan shall not—
(1) deal with the assets of the plan in his own interest
or for his own account,
(2) in his individual or in any other capacity act in
any transaction involving the plan on behalf of a party (or
represent a party) whose interests are adverse to the
interests of the plan or the interests of its participants or
beneficiaries, or
(3) receive any consideration for his own personal
account from any party dealing with such plan in con-
nection with a transaction involving the assets of the plan.
(c) A transfer of real or personal property by a party in
interest to a plan shall be treated as a sale or exchange if the
property is subject to a mortgage or similar lien which the plan
assumes or if it is subject to a mortgage or similar lien which a
party-in-interest placed on the property within the 10-year
period ending on the date of the transfer.
Sec. 409. (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 title shall be person-
ally 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 releif as the court may deem
appropriate, including removal of such fiduciary. A fiduciary
may also be removed for a violation of section 411 of this Act.
RP
ia i i a i
P-9
(b) No fiduciary shall be liable with respect to a breach of
fiduciary duty under this title if such breach was committed
before he became a fiduciary or after he ceased to be a
fiduciary.
Sec. 501. Any person who willfully violates any provision
of part | of this subtitle, or any regulation or order issued under
any such provision, shall upon conviction be fined not more
than $5,000 or imprisoned not more than one year, or both;
except that in the case of such violation by a person not an
individual, the fine imposed upon such person shall be a fine
not exceeding $100,000.
Sec. 502. (a) 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 409;
(3) by a participant, beneficiary, or fiduciary (A) to
enjoin any act or practice which violates any provision of
this title 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 title or the terms of
the plan;
(4) by the Secretary, or by a participant, or benefi-
ciary for appropriate relief in the case of a violation of
105(c); ,
(5) except as otherwise provided in subsection (b),
by the Secretary (A) to enjoin any act or practice which
violates any provision of this title, or (B) to obtain other
appropriate equitable relief (i) to redress such violation or
(ii) to enforce any provision of this title; or
P-10
(6) by the Secretary to collect any civil penalty under
subsection (i).
(b) In the case of a plan which is qualified under section
401(a), 403(a), or 405(a) of the Internal Revenue Code of
1954 (or with respect to which an application to so qualify has
been filed and has not been finally determined) the Secretary
may exercise his authority under subsection (a)(5) with respect
to a violation of, or the enforcement of, parts 2 and 3 of this
subtitle (relating to participation, vesting, and funding), only
if—
(1) requested by the Secretary of the Treasury, or
(2) one or more participants, beneficiaries, or fidu-
ciaries, of such plan request in writing (in such manner as
the Secretary shall prescribe by regulation ) that he exercise
such authority on their behalf. In the case of such a
request under this paragraph he may exercise such author-
ity only if he determines that such violation affects, or such
enforcement is necessary to protect, claims of participants
or beneficiaries to benefits under the plan.
(c) Any administrator who fails or refuses to comply with
a request for any information which such administrator is
required by this title to furnish to a participant or beneficiary
(unless such failure or refusal results from matters reasonably
beyond the control of the administrator) by mailing the
material requested to the last known address of the requesting
participant or beneficiary within 30 days after such request may
in the court’s discretion be personally liable to such participant
or beneficiary in the amount of up to $100 a day from the date
of such failure or refusal, and the court may in its discretion
order such other relief as it deems proper.
(d)(1) An employee benefit plan may sue or be sued
under this title as an entity. Service of summons, subpoena, or
other legal process of a court upon a trustee or an administrator
of an employee benefit plan in his capacity as such shall
constitute service upon the employee benefit plan. In a case
where a plan has not designated in the summary plan descrip-
P-11
tion of the plan an individual as agent for the service of legal
process, service upon the Secretary shall constitute such service.
The Secretary, not later than 15 days after receipt of service
under the preceding sentence, shall notify the administrator or
any trustee of the plan of receipt of such service.
(2) Any money judgment under this title against an
employee benefit plan shall be enforceable only against the
plan as an entity and shall not be enforceable against any other
person unless liability against such person is estublished in his
individual capacity under this title.
(e)(1) Except for actions under subsection (a)(1)(B) of
this section, the district courts of the United States shall have
exclusive jurisdiction of civil actions under this title brought by
the Secretary or by a participant, beneficiary, or fiduciary. State
courts of competent jurisdiction and district courts of the United
States shall have concurrent jurisdiction of actions under
subsection (a)(1)(B) of this section.
(2) Where an action under this title is bro ught in a district
court of the United States, it may be brought in the district
where the plan is administered, where the breach took place, or
where a defendant resides or may be found, and process may
be served in any other district where a aefendant resides or may
be found.
(f) The district courts of the Unit d States shall have
jurisdiction without respect to the amount in controversy r the
citizenship of the parties, to grant the relief provided for in
subsection (a) of this section in any action.
(g) In any action under this title by a participant, benefi-
ciary, or fiduciary, the court in its discretion may allow a
reasonable attorneys fee and costs of action to either party.
(h) A copy of the complaint in any action under this title
by a participant, beneficiary, of fiduciary (other than an action
brought by one or more participants or beneficiaries under
subsection (a)(1)(B) which is solely for the purpose of
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recovering benefits due such participants under the terms of the
plan) shall be served upon the Secretary and the Secretary of
the Treasury by certified mail. Either Secretary shall have the
right in his discretion to intervene in any action, except that the
Secretary of the Treasury may not intervene in any action under
part 4 of this subtitle. If the Secretary brings an action under
subsection (a) on behalf of a participant or beneficiary, he shall
notify the Secretary of the Treasury.
(i) In the case of a transaction prohibited by section 406
by a party in interest with respect to a plan to which this part
applies, the Secretary may assess a civil penalty against such
party in interest. The amount of such penalty may not exceed 5
percent of the amount involved (as defined in section
4975(f)(4) of the Internal Revenue Code of 1954); except that
if the transaction is not corrected (in such manner as the
Secretary shall prescribe by regulation, which regulations shall
be consistent with section 4975(f)(5) of such Code) within 90
days after notice from the Secretary (or such longer period as
the Secretary may permit), such penalty may be in an amount
not more than 100 percent of the amount involved. This
subsection shall not apply to a transaction with respect to a plan
described in section 4975 (e)( 1) of such Code.
(j) In all civil actions under this title, attorneys appointed
by the Secretary may represent the Secretary (except as pro-
vided in section 518(a) of title 28, United States Code), but all
such litigation, shall be subject to the direction and control of
the Attorney General.
(k) Suits by an administrator fiduciary, participant, or
beneficiary of an employee benefit plan to review a final order
of the Secretary, to restrain the Secretary from taking any action
contrary to the provisions of this Act, or to compel him to take
action required under this title, may be brought in the district
court of the United States for the district where the plan has its
principal office, or in the United States District Court for the
District of Columbia.
ep
lila
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Sec. 503. In accordance with regulations of the Secretary,
every employee benefit plan shall—
(1) provide adequate notice in writing to any partici-
pant or beneficiary whose claim for benefits under the plan
has been denied, setting forth the specific reasons for such
denial, written in a manner calculated to be understood by
the participant, and
(2) afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and fair
view by the appropriate named fiduciary of the decision
denying the claim.
Sec. 506. In order to avoid unnecessary expense and
duplication of functions among Government agencies, the
Secretary may make such arrangements or agreements for
cooperation or mutual assistance in the performance of his
functions under this title and the functions of any such agency
as he may find to be practicable and consistent with law. The
Secretary may utilize, on a reimbursable or other basis, the
facilities or services of any department, agency, or estab-
‘lishment of the United States or of any State or political
subdivision of a State, including the services of any of its
employees, with the lawful consent of such department, agency,
or establishment; and each department, agency, or estab-
lishment of the United States is authorized and directed to
cooperate with the Secretary and, to the extent permitted. by
law, to provide such information and facilities as he may
request for his assistance in the performance of his functions
under this title. The Attorney General or his representative
Shall receive from the Secretary for appropriate action such
evidence developed in the performance of his functions under
this title as may be found to warrant consideration for criminal
prosecution under the provisions of this title or other Federal
law.
Sec. 510. It shall be unlawful for any person to discharge,
fine, suspend, expel, discipline, or discriminate against a partici-
pant or beneficiary for exercising any right to which he is
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entitled under the provisions of an employee benefit plan, this
title, section 3001, or the Welfare and Pension Plans Disclosure
Act, or for the purpose of interfering with the attainment of any
right to which such participant may become entitled under the
plan, this title, or the Welfare and Pension Plans Disclosure
Act. It shall be unlawful fc- any person to discharge, fine,
suspend, expel, or discriminate against any person because he
has given information or has testified or is about to testify in
any inquiry or proceeding relating to this Act or the Welfare
and Pension Plans Disclosure Act. The provisions of section
502 shall be applicable in the enforcement of this section.
Sec. 511. Jt shall be unlawful for any person through the
use of fraud, force, violence, or threat of the use of force or
violence, to restrain, coerce, intimidate, or attempt to restrain,
coerce, or intimidate any participant or beneficiary for the
purpose of interfering with or preventing the exercise of any right
to which he is or may become entitled under the plan, this title,
section 3001, or the Welfare and Pension Plans Disclosure Act.
Any person who willfully violates this section shall be fined
$10,000 or imprisoned for not more than one year, or both.
Sec. 514. (a) Except as provided in subsection (b) of this
section, the provisions of this title and title IV shall supersede
any and all State laws insofar as they may now or hereafter
relate to any employee benefit plan described in section 4(a)
and not exempt under section 4(b). This section shall take
effect on January 1, 1975.
(b) (1) This section shall not apply with respect to any
cause of action which arose, or any act or omission which
occurred, before January |, 1975.
(2) (A) Except as provided in subparagraph (B), nothing
in this title shall be construed to exempt or relieve any person
from any law of any State which regulates insurance, banking,
or securities.
(B) Neither an employee benefit plan described in section
4(a), which is not exempt under section 4(b) (other than a
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plan established primarily for the purpose of providing death
benefits), nor any trust established under such a plan, shall be
deemed to be an insurance company or other insurer, bank,
trust company, or investment company or to be engaged in the
business of insurance or banking for purposes of any law of any
State purporting to regulate insurance companies, insurance
contracts, banks, trust companies, or investment companies.
(3) Nothing in this section shall be construed to prohibit
use by the Secretary of services or facilities of a State agency as
permitted under section 506 of this Act.
(4) Subsection (a) shall not apply to any generally
applicable criminal law of a State.
(c) For purposes of this section:
(1) The term ‘ *tate law” includes all laws, decisions,
rules, regulations, or other State action having the effect of
law, of any State. A law of the United States applicable
only to the District of Columbia shall be treated as a State
law rather than a law of the United States.
(2) The term “State” includes a State, any political
subdivisions thereof, or any agency or instrumentality of
either which purports to regulate, directly or indirectly, the
terms and conditions of employee benefit plans covered by
the title.
(d) Nothing in this title shall be construed to alter, amend,
modify, invalidate, impair, or supersede any law of the United
States (except as provided in section 111 and 507(b)) or any
rule or regulation issued under any such law.
The courts of appeals shall have jurisdiction of appeals
from all final decisions of the district courts of the United
States, the United States District Court for the District of the
Canal Zone, the District Court of Guam, and the District of the
Virgin Islands, except where a direct review may be had in the
Supreme Court. As amended Oct. 31, 1951, c. 655, § 48, 65
Stat. 726; July 7, 1958, Pub.L. 85-508, § 12(e), 72 Stat. 348.
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(a) The court of appeals shall have jurisdiction of appeals
from:
(1) Interlocutory orders of the district courts of the United
States, the United States District Court for the District of the
Canal Zone, the District Court of Guam, and the District Court
of the Virgin Islands, or of the judges thereof, granting,
continuing, modifying, refusing or dissolving injunctions, or
refusing to dissolve or modify injunctions, except where a direct
review may be had in the Supreme Court;
(2) Interlocutory orders appointing receivers, or refusing
orders to wind up receiverships or to take steps to accomplish
the purposes thereof, such as directing sales or other disposals
of property;
(3) Interlocutory decrees of such district courts or the
judges thereof determining the rights and liabilities of the
parties to admiralty cases in which appeals from final decrees
are allowed;
(4) Judgments in civil actions for patent infringement
which are final except for accounting.
(b) When a district judge, in making in a civil action an
order not otherwise appealable under this section, shall be of
the opinion that such order involves a controlling question of
law as to which there is substantial ground for difference of
opinion and that an immediate appeal from the order may
materially advance the ultimate termination of the litigation, he
shall so state in writing in such order. The Court of Appeals
may thereupon, in its discretion, permit an appeal to be taken
from such order, if application is made to it within ten days
after the entry of the order.
(a) The Supreme Court and all courts established by Act
of Congress may issue all writs necessary or appropriate in aid
of their respective jurisdictions and agreeable to the usages and
principles of law.
APPENDIX T
United States Court of Appeals
for the
District of Columbia Circuit
No. 77-1371 September Term, 1977
In Re:
Frederick B. Pfister Civil Action #76-1978
Petitioner
BEFORE: Fahy, Senior Circuit Judge; McGowan and Wilkey,
Circuit Judges
ORDER
It is ORDERED by the Court, sua sponte, that the Clerk is
directed to amend his records to reflect that Circuit Judge
Wilkey cast his vote to deny petitioner’s petition for writ of
mandamus. It is
F URTHER ORDERED by the Court, sua sponte, that the
Clerk is directed to amend his records on petitioner’s petition
for writ of mandamus by adding the following paragraph:
Senior Circuit Judge Fahy: Upon further consideration I
am of the view that transfer of this case to the Northern District
of Georgia Atlanta Division, would seriously endanger the
ability of the plaintiff to carry forward there the litigation he has
chosen to initiate in this jurisdiction. The inconvenience that
defendants undoubtedly would bear in defending here does not
appear to be of similar seriousness. For these reasons I think
the order of the District Court to transfer the case was not
within the sound discretion availabie to the Court. Accordingly
I would grant the relief prayed by petitioner-plaintiff.
Per Curiam
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.