# Petition for Writ of Certiorari — Fisher v. Penn Traffic Traffic Co., The (No. 09-188)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2009

## Text

OFFICE OF THE CLERK

IN THE

Supreme Court of the Wnited States

~2>.?____———_-

JOSEPH V. FISHER,
Petitioner,

THE PENN TRAFFIC COMPANY, BYRON E. ALLUMBAUGH, RICHARD
P. BRENNAN, KEVIN P. COLLINS, JAMES A. DEMME, MATTHEW
GLASS, ROBERT HOCKETT, RICHARD D. HOLIHAN, JR., PETER L.
ZURKOW, JOHN DOES Nos. 1-5, BERNADETTE RANDALL-BARBER

AND JANE ROES NOs. 1-5,
Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

DAVID S. PREMINGER

Counsel of Record
KELLER ROHRBACK L.L.P.
770 Broadway, 2nd Floor
New York, New York 10003
(646) 495-6198

Attorneys for Petitioner

QUESTIONS PRESENTED

i. Whether the Court should reconsider its
decision in Massachusetts Mutual Life Insurance Co.
uv. Russell, 473 U.S. 134 (1985), wherein it stated that
Congress intended that relief for a breach of fiduciary
duty pursuant to ERISA § 409(a), 29 U.S.C. §
1109(a), be limited to relief for the affected employee
benefit plan as a whole, which decision, in
conjunction with the lower court’s reading of this
Court’s decisions in Mertens v. Hewitt Associates, 508
U.S. 248 (1993) and Great West Life & Annuity
Assurance Company v. Knudsen, 534 U.S. 204 (2002),
leaves without a remedy an_ individual plan
participant who, because of a breach of fiduciary duty
that was particular to him, lost a plan benefit to
which he was otherwise entitled under the plan’s
terms.

4 Whether this Court’s decisions in Mertens and
Great West bar make-whole relief for breaches of
fiduciary duty under ERISA § 502(a)(3).

3. Whether Congress intended that ERISA
categorically deny individual plan participants and
beneficiaries meaningful make-whole relief against
fiduciaries who breach the duties they assume under
the Act.

Ll

TABLE OF CONTENTS

QUESTIONS Fe iva ke scveccccsccccsceees i
TABLE OF Ate ii yea da kacescssesernscccsccess 1V
OPINIONS BER a iaihetcenssvccsvvccccccccees 1
JURISDICTION cp eer eauccisceeesiccsccescsssese 1
RELEVANT © Pir avs cce cc cosesccccscccees 1
STATEMENT OF Fie ee iare snes sscceccccceccscees 2
REASONS FOR GRANTING THE WRIT .............0c0eeeeeeeseeeees 6
I. THE HISTORY OF ERISA LITIGATION
CONCERNING CLAIMS FOR BREACH OF
Pie 6

II. EITHER RUSSELL HAS BEEN WRONGLY

APPLIED OR IT WAS WRONGLY DECIDED .......... 14
A. RUSSELL HAS BEEN WRONGLY

Pe Rg al 14
B. IF PETITIONER HAS NOT STATED A

VIABLE CLAIM UNDER EITHER §
002(aX2) OR § 502(a\(3), THEN
RUSSELL MUST BE OVERRULED............. 20

III. MERTENS AND GREAT-WEST HAVE BEEN
WRONGLY APPLIBD............0---.-.........................0

IV.

THE LACK OF MEANINGFUL INDIVIDUAL
RELIEF UNDER ERISA FOR BREACH OF
FIDUCIARY DUTY IS A PRESSING CONCERN
THAT THIS COURT, OTHER APPELLATE
COURTS, AND SEVERAL PROMINENT
SCHOLARS HAVE REPEATEDLY
PE. kas caskets orc ae 34

I vv visi nccacceseccdaceueeees deer a ee 37

APPENDIX

Circuit Court Opinion (04/02/2009)............ la
District Court Opinion (02/16/2007)............. 6a

Order Denying Petition for Panel Rehearing

(CREE BORE I iy os 555 seeds hcesdcet ee 18a
Complaint (08 /02/2006)............ 0. cccccc eevee 20a

Motion to Dismiss (10/02/2006).................29a

TABLE OF AUTHORITIES

Cases

Aetna Health, Inc. v. Davila, 542 U.S.

200 (2004)......... Rea pe 10a ae oe te ae 13, 36
Aronsen v. Crown Zellerbach, 662 F.2d

ee te FN RED scien csiorccnsescsids svectiosocesecxvecsens 25, 35
Batchelor v. Oak Hill Med. Group, 870

BO LEGG COE CAT. TI) onnicceiscciceccvesseessccnssssecvenss 22
Carey v. Musladin, 549 U.S. 70 (2006)..................... 19
Carson Harbor Vill., Ltd. v. Unocal

Corp., 270 F.3d 863 (9th Cir. 2001).............c0seseee.. 20
Central States, Southeast & Southwest

Areas Pension Fund v. Central

Transport, Inc., 472 U.S. 559 (1985).................066 26
Central Va. Community College v. Katz,

Oe ye. a etic a esese css ksacacatncessseesarnersans 19
Cicio v. Does, 321 F.3d 83 (2d Cir. 2003)..... pa ene 13, 35
Coan v. Kaufman, 457 F.3d 250 (2d Cir.

BE Fi ketone snvhakiondi case c oeaaee eee esna ke Funai ease 16
Dada v. Mukasey, 128 S.Ct. 2307 (2008).................. 20

DiFelice v. AETNA U.S. Healthcare, 346
F.3d 442 (3rd Cir. 2003)

Eichorn v. AT&T Corp., 489 F.3d 590
I RN age pcre acne x uve dcavcoianves 13, 35

Firestone Tire & Rubber Co. v. Bruch,
re ee ce aicnci bees scncaceccvescsdasdsanevesane 10, 32

Great-West Life & Annuity Assurance
Company v. Knudson, 534 U.S. 204

Sci Grated svat ranaessdatanivest:daxcapicdestecssukwakvtsaniad passim
Harris Trust & Sav. Bank v. Salomon

Smith Barney, 530 U.S. 238 (2000).................0..... 12
Kokoszka v. Belford, 417 U.S. 642 (1974)..........0...... 20

Massachusetts Mutual Life Insurance
Company v. Russell, 473 U.S. 134
ST ela eeces hates acs aleudsss cuatucsonaundsviswoverr totes passim

McLeod v. Oregon Lithoprint, Inc., 102
ee ee i, No rvcncixssitcccnscncnasttesinsuscnsdnones 31

Mertens v. Hewitt Associates, 508 U.S.
NE Cs sre tn tances nadicout eoresiieaiieecenisc sanders: passim

Milofsky v. American Airlines, Inc., 404
F.3d 338 (5th Cir. 2005)......... Ma ERAN POND SI ES Pee 16

Nachman v. Pension Benefit Guaranty
Corporation, 446 U.S. 359 (1980).......................08. 21

Parents Involved in Community Schools
v. Seattle School Dist. No. 1, 551 U.S.
701 (2007) (dicta not Dinding) ..................0s0..ccsese0. 19

Rodriguez v. Miller, 499 F.3d 136 (2d
COMP: Binet )...... 2. Intended to correct, remove, or
lessen a wrong, fault or defect . 3. Of or relating to a means of
enforcing an_ existing substantive right;
procedural .

Although Black’s Law Dictionary does not define
“remedial relief,” it does define “remedial law as:

1. A law providing a means to enforce rights
or redress injuries. 2. A law passed to correct
or modify an existing law; especially a law that
gives a party a new and different remedy when
the existing remedy, if any, is inadequate.

“Remedial relief” in section 409 should, therefore, be
broadly construed as relief that corrects a wrong or
redresses an injury, which should encompass make-
whole relief to a participant or beneficiary who
suffers an injury as a result of a fiduciary breach.

29

Such a reading would be consistent with the statute’s
primary purpose of protecting participants and
beneficiaries, but would exclude such legal relief as
was designed to punish or deter rather than to
correct a wrong, notably punitive damages.!!

In light of Russell’s flawed statutory analysis
as well as subsequent Supreme Court cases it can
only be concluded that participants and beneficiaries
who have been individually damaged by breaches of
fiduciary duty may be granted an “appropriate”
remedy under ERISA §§ 409(a) and 502(a)(2) and
Russell should be overruled. !2

11 To be sure, the legislative history supports the view that in
using the word “remedial” Congress meant “legal.” Contrary to
this Court’s description of ERISA’s legislative history in Russell
at 145-146, it is clear that the “equitable or remedial” language
adopted by the conference committee and passed by Congress
was derived from prior House versions of the bill which became
ERISA. See H.R. 9824 (Aug. 2, 1973), 1 Leg. Hist. 731; H.R. 2
(Oct. 2, 1973), 2 Leg. Hist. 2288; H.R. 2 (March 4, 1974), 3 Leg.
Hist. 3952. Thus, the statement in H. R. Rep. No. 93-533 (Oct
2, 1973) that bill was authorizing “the full range of legal and
equitable remedies available in both state and federal courts,”
quoted by the Court in Russell, supra, referred to the version of
I1.R. 2 of the same date which utilized the language “equitable
or remedial” This was the language that was adopted in
conference and from the legislative history it is apparent that
both Houses understood the bill to provide the “full range of
legal and equitable remedies.” Nevertheless, Congress’s failure
to use the word “legal” in the statute itself supports the view
that “remedial” means something other than “equitable” but
less than “legal.”

2 All of the arguments set forth above concerning interpretation
of statutes provide support for Petitioner's contention that
Great. West informs Russell by requiring a literal construction of
§ 409% a)

30

Ill. MERTENS AND GREAT-WEST HAVE
BEEN WRONGLY APPLIED

Mertens involved a claim by a plan for
compensatory damages under § 502(a)(3) against a
nonfiduciary for participation in a fiduciary breach.
Thus, the question presented in Mertens was
“whether ERISA authorizes suits for money damages
against nonfiduciaries who knowingly participate in
a fiduciary’s breach of fiduciary duty.” Mertens, 508
U.S. at 251; id. at 249-50; Great-West, 534 U.S. at
215. The Court began its analysis by acknowledging
that “at common law, the courts of equity had
exclusive jurisdiction over virtually all actions by
beneficiaries for breach of trust” and that “money
damages were available in those courts against the
trustee” as well as against third parties. Mertens, 508
U.S. at 256.

After citing Pomeroy on concurrent
jurisdiction, the Court concluded that “[slince all
relief available for breach of trust could be obtained
from a court of equity, limiting the sort of relief
available under § 502(a)(3) to ‘equitable relief in the
sense of ‘whatever relief a common-law court of
equity could provide in such a case’ would limit the
relief not at all.” Jd. at 257. As a result, the Court
held that “equitable relief’ under § 502(a)(3) did not
include money damages against nonfiduciaries who
participated in a breach of trust. In so concluding,
the Court noted that “falll that ERISA has
eliminated .. . is the common law’s joint and several
liability, for all direct and consequential damages

3]

suffered by the plan, on the part of persons who had
no real power to control what the plan did” — that is,
nonfiduciaries. Jd. at 262.

Notwithstanding the Mertens Court’s careful
distinction between nonfiduciaries and fiduciaries,
courts after Mertens have stated that whether the
defendant is a fiduciary or a nonfiduciary does not
affect whether monetary relief may constitute
appropriate equitable relief under § 502(a)\(3). See,
e.g., McLeod v. Oregon Lithoprint, Inc., 102 F.3d 376,
378 (9th Cir. 1996). This is inaccurate. First, as noted
above, the Mertens Court premised its holding on the
defendants’ status as nonfiduciaries. Therefore, to
the extent that any court held that the status of the
defendants did not affect the question before the
Mertens Court, they were wrong. Second, and more
importantly, the relief available in equity against
breaching fiduciaries was not a remedy at law,
because the remedies of a _ beneficiary in that
situation were exclusively equitable. Thus, while it
is beyond dispute that equity courts had the power to
award monetary relief to make a beneficiary whole
for breach of trust, this remedy was not borrowed
from the law courts. Rather, it originated in equity
and depended on the status of the defendant because
it arose out of the fiduciary relationship.

Likewise, the lower courts have misapplied
Great-West. Great-West addressed the question
whether § 502(a)(3) authorized an action against a
plan beneficiary — that is, a nonfiduciary — to recover
benefits paid to the beneficiary. 534 U.S. at 206
The Court rejected the argument that this relief was
equitable on the facts of the case because (1) equity

32

rarely decreed “specific performance of a contract to
transfer funds,” id. at 211; (2) restitution at equity
was limited to imposition of a constructive trust on
specifically identifiable funds in the possession of the
defendant, id. at 214; and (3) a trustee’s power to
offset money owed against a beneficiary’s interest did
not authorize an equitable cause of action to recover
payment from other moneys. Jd. at 219-20. None of
this has anything to do with a trustee’s liability in
equity to make a beneficiary whole for a breach of
trust.

In cases within equity’s exclusive jurisdiction,
arising out of express trusts, equity courts awarded
remedies that in a non-trust case might be viewed as
legal in nature: “It often happens that the final relief
to be obtained by the cestui que trust consists in the
recovery of money. This remedy the courts of equity
will always decree when necessary.” Pomeroy, A
Treatise on Equity Jurisprudence (“Pomeroy”), § 158,
p. 215 (5th ed. 1941). According to Pomeroy, a trust
beneficiary “has the following equitable remedies:
‘The beneficiary of a trust can maintain a suit... to
compel the trustee to redress a breach of trust.” Zd.
at § 1080, p. 229, n.15 (quoting Restatement of
Trusts, § 199) (emphasis added). ‘The trustee’s
liability on such a claim “is always sufficient for the
complete indemnification and compensation of the
beneficiary.” Id. at p. 229. Thus, by definition, a
remedy decreed in favor of a beneficiary against a
breaching trustee was a non-legal remedy, because it
came within the exclusive jurisdiction of equity, and
law courts.

33

However, equity courts not only had exclusive
equity jurisdiction, but also exercised jurisdiction
concurrent with the law courts. Id. at § 181, p. 257.
Concurrent jurisdiction a'lowed equity courts to
adjudicate mixed equitable and legal matters as a
single case. Jd. This principle is known as the
“clean-up doctrine.” Dan B. Dobbs, Handbook on the
Law of Remedies: Damages -- Equity -- Restitution, §
2.7, p. 83 (1973) (citing Pomeroy, §§ 231-42).

It was exactly assertion by Pomeroy regarding
the equitable clean-up doctrine that the Court in
Mertens quoted in explaining that at common law,
“there were many situations — not limited to those
involving enforcement of a trust — in which an equity
court could ‘establish purely legal rights and grant
legal remedies which would otherwise be beyond the
scope of its authority.” Mertens, 508 U.S. at 256
(quoting Pomeroy, § 181, p. 257); Great-West, 534
U.S. at 210 (stating that Mertens “rejected a reading
of the statute that would extend the relief obtainable
under § 502(a)(3) to whatever relief a court of equity
is empowered to provide in the particular case at
issue (which could include legal remedies that would
otherwise be beyond the scope of the equity court’s

”

authority).”).

Thus, Mertens and Great-West exclude from §
502(aX(3) any remedies borrowed from law courts
pursuant to the clean-up doctrine. Remedies decreed
against breaching fiduciaries, however, originated in
and were exclusive to equity. There were no such
remedies to be borrowed from the law courts, because
the law courts lacked the power to grant any remedy
for a breach of trust due to the equitable nature of

3 4

the fiduciary relationship. Restatement (Second) of
Trusts, §§ 2, 197 (1959).

Given the lower courts’ incorrect application of
this Court’s decisions, Petitioner is without a remedy
- neither remedies borrowed from the law courts
(Mertens) nor remedies specific to trust law (Great-
West) were “typically available in equity,” making
non-injunctive “appropriate equitable relief” under §
502(a)(3) against a fiduciary a null set, or merely
duplicative of the equitable relief available against a
fiduciary under §§ 409(a) and 502(a)(2) which would
make no sense. This cannot be the law. Like a
constructive trust against a nonfiduciary, make-
whole monetary relief against a breaching fiduciary
was typically available in equity. Hence, the lower
courts have misapplied this Court’s decisions in
Mertens and Great-West and impermissibly narrowed
the scope of relief available under § 502(a)(3).

IV. THE LACK OF MEANINGFUL
INDIVIDUAL RELIEF UNDER
ERISA FOR BREACH OF
FIDUCIARY DUTY IS A PRESSING
CONCERN THAT THIS COURT,
OTHER APPELLATE COURTS,
AND SEVERAL PROMINENT
SCHOLARS HAVE REPEATEDLY
ADDRESSED.

Immediately after Great-West, judges and
scholars alike began to criticize the impact of this
Court's decisions on ERISA’'s remedial scheme. They
have continued to do so since. These often colorful,
always pointed, critiques focus on the fundamental

35

injustice that Russell, Mertens, and Great-West
wrought. See, eg., DiFelice v. AETN®. U.S.
Healthcare, 346 F.3d 442, 454 (8rd Cir. 2003)
(Becker, J., concurring) (describing ERISA’s remedial
scheme as a “Serbonian bog wherein judges are
forced to don logical blinders and split the linguistic
atom to decide even the most routine cases”). They
lament the fact that two 5-4 decisions (Mertens and
Great-West), and one unanimous decision with a
four-Justice “functional dissent,” Langbein, supra, at
1340, deny plan participants and beneficiaries a
make-whole remedy for breach of fiduciary duty.
They point out that this result flouts both justice and
ERISA, disregarding Congress’s intent to create a
meaningfully enforceable duty, meant to _ be
performed “solely in the interest of participants and
beneficiaries.” ERISA § 404(a), 29 U.S.C. 1104(a); see
Eichorn v. AT&T Corp., 489 F.3d 590, 591-94 (3rd
Cir. May 31, 2007) (Ambro, C.J., concurring in denial
of rehearing en banc); Cicio v. Vytra Healthcare, 321
F.3d 83, 106 (2d Cir. 2002), (Calabresi, C.J.,
dissenting); Van Natta v. Sara Lee Corp., 439 F.
Supp. 2d 911 (N.D. Iowa June 29, 2006); see also
Colleen E. Medill, Resolving the Judicial Paradox of
“Equitable Relief’? under ERISA Section 502(a)(3), 39
J. Marshall L. Rev. 827 (2006) (“The preferred
approach, advocated by this Article, is for the
Supreme Court itself to resolve the judicial paradox
of “equitable” relief under Section 502(a)(3).”);
Aronson, supra, Langbein, supra; Stein, supra; Dana
M. Muir, Fiduciary Status as an Employer's Shield:
The Perversity of ERISA Fiduciary Law, 2 U. Pa. J.
Lab. & Emp. L. 391 (2000).

36

This Country’s population is aging. Indeed,
according to the Center for Disease Control, “[t]he
median age of the world’s population is increasing
because of a decline in fertility and a 20-year
increase in the average life span during the second
half of the 20th century .... In the United States, the
proportion of the population aged [over] 65 years is
projected to increase from 12.4% in 2000 to 19.6% in
2030.” Public Health and Aging: Trends in Aging —
United States and Worldwide,
http://www.cdc.gov/mmwr/preview/mmwrhtml/mm52
06a2.htm (last visited July 13, 2009). Furthermore,
the United States is in the midst of a nearly
unprecedented financial crisis. Not since 1929 has
this Nation faced economic difficulties as severe as
those of the past year. See David F. Schmitz:
Professor Puts the 2008 Financial Crisis 1n Historical
Perspective,
https://quack.whitman.edu/content/magazine/in-
their-words/schmitz (last visited July 13, 2009). This
atmosphere of financial uncertainty, combined with
the increasing age of the population, has the
potential to produce disastrous effects on thousands
of Americans’ retirement savings. It is more
important than ever that pension plan participants
and beneficiaries have adequate remedies for
breaches of fiduciary duty that cause them to lose
some or all of their retirement funds.

The “rising ...chorus” has_ reached its
crescendo; it is time for this court to “revisit what is
an unjust and increasingly tangled ERISA regime.”
Aetna Health Inc., 542 U.S. at 222, (Ginsburg, J.,
concurring).

37

CONCLUSION

For the above and_ foregoing’ reasons,
Petitioner respectfully requests that the Petition be
granted and that a writ of certiorari issue to the
United States Court of Appeals for the Second
Circuit.

Respectfully submitted,

DAVID S. PREMINGER
KELLER ROHRBACK L.L.P.
770 Broadway, Second Floor
New York, NY 10003

(646) 495-6198

Attorneys for Petitioner
Joseph V. Fisher

APPENDIX

la

UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE
PRECEDENTIAL EFFECT. CITATION TO SUM-
MARY ORDERS FILED AFTER JANUARY 1, 2007,
IS PERMITTED AND IS GOVERNED BY THIS
COURT’S LOCAL RULE 32.1 AND FEDERAL
RULE OF APPELLATE PROCEDURE 32.1. INA
BRIEF OR OTHER PAPER IN WHICH A LITI-
GANT CITES A SUMMARY ORDER, IN EACH
PARAGRAPH IN WHICH A CITATION APPEARS,
AT LEAST ONE CITATION MUST EITHER BE
TO THE FEDERAL APPENDIX OR BE ACCOM-
PANIED BY THE NOTATION: “(SUMMARY
ORDER)” UNLESS THE SUMMARY ORDER IS
AVAILABLE IN AN ELECTRONIC DATABASE
WHICH IS PUBLICLY ACCESSIBLE WITHOUT
PAYMENT OF FEE (SUCH AS THE DATABASE
AVAILABLE AT HTTP://WWW.CA2.USCOURTS.
GOV), THE PARTY CITING THE SUMMARY
ORDER MUST FILE AND SERVE A COPY OF
THAT SUMMARY ORDER TOGETHER WITH THE
PAPER IN WHICH THE SUMMARY ORDER IS
CITED. IF NO COPY IS SERVED BY REASON OF
THE AVAILABILITY OF THE ORDER ON SUCH
A DATABASE, THE CITATION MUST INCLUDE
REFERENCE TO THAT DATABASE AND THE
DOCKET NUMBER OF THE CASE IN WHICH
THE ORDER WAS ENTERED.

2a

At a stated term of the United States Court of
Appeals for the Second Circuit, held at the Daniel
Patrick Moynihan United States Courthouse, 500
Pearl Street, in the City of New York, on the 2nd day
of April, two thousard nine.

PRESENT:
HON. AMALYA L. KEARSE,

HON. ROBERT D. SACK,
HON. PAUL J. KELLY, JR.,’

Circuit Judges.

No. 07-1100-ev
JOSEPH V. FISHER,

Plaintiff-Appeilant,

THE PENN TRAFFIC COMPANY, BYRONE E. ALLUM-
BAUGH, RICHARD P. BRENNAN, KEVIN P. COLLINS,
JAMES A. DEMME, ATTHEW GLASS, ROBERT HOCKETT,
RICHARD D. HOLIHAN JR., PETER L. ZURKOW, JOHN
DOES, Nos 1-5. BERNADETTE RANDALL-BARBER, JANE
ROES, Nos. 1-5,

Defendants-Appellees.

' The Honorable Paul .l. Kelly, Jr, of the ''nited States
Court of Appeals for the Tenth Circuit, sitting by designation

3a

Appearing for Appellant:

David S. Preminger,
Rosen Preminger & Bloom

Appearing for Appellee:

William H. O’Brien,

Cooley Godward Kronish LLP
(Jeffrey W. Lang, of counsel),
New York, NY

Appeal from a judgment of the United States Dis-
trict Court for the Southern District of New York
(Harold Baer, Jr., Judge).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED AND DECREED that the judgment of the
District Court be, and it hereby is, AFFIRMED.

Plaintiff Joseph Fisher appeals from a judgment of
the United States District Court for the Southern
District of New York based on its order of February
16, 2007, granting the defendants’ motion to dismiss
the case pursuant to Federal Rule of Civil Procedure
12(b) (6). We assume the parties’ familiarity with the
facts and procedural history of the case, and the
issues on appeal.

This litigation arises from the denial of the request
of the plaintiff, a participant in a cash balance
retirement plan, to receive his benefits in a lump
sum. The plaintiff contends that the defendants
breached their fiduciary duties under the Employee
Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. § 1001 et seq. He therefore seeks equitable
or remedial relief under ERISA § 502 (a) (2), 29

4a

U.S.C.§ 11382 (a) (2), and equitable relief under
ERISA § 502(a) (3), 29 U.S.C. § 1132(a) (3).

The district court correctly concluded that the
plaintiff failed to state a claim under section 502 (a)
(2), which allows parties to seek relief under ERISA
§ 409, 29 U.S.C. § 1109. The Supreme Court has held
that “Congress did not intend [section 409] to autho-
rize any relief except for the plan itself.” Mas-
sachusetts Mut. Life Ins. Co. v. Russell, 473 U.S.
134, 144 (1985); see also Coan v. Kaufman, 457 F.3d
250, 257 (2d Cir. 2006). Because Fisher seeks relief
for himself as an individual, rather then on behalf of
all or any part of the plan, he cannot bring a claim
under section 502 (a)(2). “[Section] 502 (a) (2) does
not provide a remedy for individual injuries distinct
from plan injuries.” LaRue v. DeWolff, Boberqd &
Associates, Inc., 128 S. Ct. 1020, 1026 (2008). Fisher
argues that the Supreme Court's decision in LaRue
nonetheless clarified the scope of relief available
under section 502(a) (2) and that in light of LaRue’s
holding, we should reconsider the interpretation we
gave that section in Coan v. Kaufman. We conclude
that LaRue is inapposite here. LaRue explained that
a participant in a defined contribution plan may
maintain a claim for relief under section 502 (a) (2)
if a fiduciary breach impaired the value of plan
assets in the participant’s individual account. See
LaRue, 1288S. Ct. at 1026. Such harms are of the type
contemplated by the statute’s draftsmen, because
they affect the plan. See id. at 1025. Here, however,
the plan was a cash balance plan that did not involve
individual accounts of the type at issue in LaRue. lt
is now defunct. Fisher seeks a lump sum payment
for himself. Fisher's claim therefore cannot be con-
strued as benefitting the plan.

5a

The district court also correctly dismissed the
plaintiff's claim under section 502(a) (3), which pro-
vides for equitable relief. Fisher seeks monetary
damages, but contends that his claim is an equitable
one because it involves a suit against a fiduciary,
and such suits were, historically, within the exclu-
sive jurisdiction of the courts of equity. Section 502
(a) (3) requires that both “the basis for the claim
and the nature of the recovery sought be equitable.”
Coan, 457 F.3d at 264 (alteration and internal quo-
tation marks omitted; emphasis in original). The
plaintiff must theretore seek “a category of relief
that was typically available in equity.’ Id. (alter-
ations and internal quotation marks omitted). Mon-
etary damages are not such a category. See Great-West
Life & Annuity Insurance Co. v. Knudson, 534 U.S.
204, 221 (2002) (“[Llegal relief - the imposition of
personal liability. . . for a contractual obligation to
pay money” is not recoverable under section
502(a)(3).).

For the foregoing reasons, the judgment of the
District Court is hereby AFFIRMED.

FOR THE COURT:

Catherine O'Hagan Wolfe,
Clerk of the Court

By:

ha

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

06 Civ. 5848 (HB)

JOSEPH FISHER,
Plaintiff,

-against—

THE PENN TRAFFIC COMPANY ET AL.,

Defendants.

OPINION & ORDER

Hon. HAROLD BAER, JR., District Judge:

Joseph Fisher (“Fisher” or “Plaintiff"), has brought
the instant action pursuant to §§ 502(a)(2) and
(a)(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), 29 U.S.C.A
$$ 132(a)(2) and (a)(3) (West 2007). Plaintiff alleges
that his former employer, the Penn Traffic Company
(“Penn Traffic” or the “Company”), members of the
Board of Directors Byron E. Allurmbaugh, Richard P.
Brennan, Kevin P. Collins, James A. Demme, Matthew
Glass, Robert Hockett, Richard D. Holihan and Peter
L. Zurkow (collectively, the “Board”), and the
Administrative Committee of the Plan, including

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member Bernadette Randall-Barber, (the “Commit-
tee”) (collectively “Defendants”) breached their
fiduciary duty toward him in their refusal to pay a
lump sum benefit as a participant in the Penn Traf-
fic Cash Balance Pension Plan (the “Plan”). Defen-
dants have moved to dismiss the case pursuant to
Rule 12(b)(6) for failure to state a claim. For the
reasons set forth helow, the motion to dismiss this
claim is GRANTED.

I. FACTUAL BACKGROUND

The following facts are taken from Plaintiff's Com-
plaint as true for purposes of reviewing Defendants’
motion to dismiss. See Allen v. WestPoint-Pepperell,
Inc., 945 F.2d 40, 44 (2d Cir. 1991). Plaintiff is a for-
mer employee of Penn Traffic and “participant”! in
their cash balance plan. He resigned in early August
2003, and on August 15, 2003, pursuant to the terms
of the Plan, filed an application for a lump sum
retirement benefit. Compl. 94 9-10. On September 29,
2003, the Board passed a resolution to terminate the
Plan, but continued to process and pay benefits to
plan participants. /d. 422. The Plan's assets and lia-
bilities were subsequently assumed by the Pension
Benefit Guaranty Corporation (“PBGC”). /d. 925. On
October 17, 2003, the Committee informed Plaintiff
that his request for a lump sum benefit payment was

ERISA defines “participant” as “any employee or former

employee of an employer. . . who is or may become eligible to
receive a benefit of any type from an employee benefit plan.” 29
U.S.C.A. § 1002 (7) (West 2007). See Coan v. Kaufman, 457 F.3d
250, 255 (2d Cir. 2006) (discussing the parameters of “partici-
pant” standing). The parties do not dispute Plaintiff's standing
as a Plan “participant.”

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denied but that he was eligible to receive a monthly
annuity. Plaintiff declined to receive the monthly
annuity. /d. 4 11.

Thereafter, on July 31, 2006, Plaintiff filed the
instant action and stated three claims for relief.
First, Plaintiff alleges that Defendants breached
their fiduciary duties imposed by ERISA § 1104(a)(1)
when it denied his application for a lump sum ben-
efit . Jd. 26-27) and seeks relief pursuant to ERISA
§ 502(a)(2), 29 U.S.C. § 1132(a)(2). Second, premised
on the same allegations, Plaintiff seeks relief under
ERISA § 502(a)(3), 29 U.S.C §1132(a)(3). Third,
Plaintiff alleges that Defendants Penn Traffic and its
Board, when it denied his lump sum application, vio-
lated ERISA §§ 406 (b)(1) and (b)(2), 29 U.S.C.
§ 1106 (b)(1) and (b)(2) (Jd. 99, 26-27), and seeks
relief under ERISA §§ 502(a)(2) and (a2)(3), 29 U.S.C.
§ 1132(a)(2) and (a)(3). Plaintiff seeks monetary
damages in the amount of his lump sum benefit. /d.
at 8), a declaration that the Defendants breached its
fiduciary duty and the amount of money to which he
is entitled (Jd. at 7), and attorneys fees and costs.
Id. at 8.

Il. STANDARD OF REVIEW

Pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure, the movant must establish that the
plaintiff has failed to “state a claim upon which
relief can be granted.” FED. R. Civ. P. 12(b)(6). In
ruling on a Rule 12(b)(6) motion, this Court must
construe all factual allegations in the complaint in
favor of the non-moving party. See Krimstock v.
Kelly, 306 F.3d 40, 47-48 (2d Cir. 2002). The Court's
consideration is normally limited to facts alleged in

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the complaint, documents appended to the com-
plaint or incorporated in the complaint by reference,
and to matters of which judicial notice may be
taken. Allen, 945 F.2d at 44. A motion to dismiss
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.” Shakur v. Selsky, 391 F.3d 106, 112 (2d Cir.
2004) (quoting McEachin v. McGuinnis, 357 F.3d
197, 200 (2d Cir. 2004)).

Ili. DISCUSSION

Defendants move to dismiss on the grounds that
Plaintiff has failed to state a claim under ERISA
§§ 502(a)(2) and (a)(3), 29 U.S.C.A. §§ 1182 (a)(2)
and (a)(3) (West 2007) (“ERISA §§ 502(a)(2) and
(a)(3)").

I will address cach argument in turn.

A. Relief Under §$ 502(a)(2)

It is well established that plan participants may
bring actions against plan fiduciaries for breaches of
fiduciary duty. See ERISA §$§ 409 and 502(a)(2); Mas-
sachusetts Mutual Life Ins. Co. v. Russell, 473 U.S.
134 (1985). Plaintiff brings this action pursuant. to
ERISA § 502(a)(2), which authorizes four classes of
party-plaintiffs—the Secretary of Labor, a partici-
pant, beneficiary, or fiduciary—to bring a civil
action. ERISA § 409 provides, in relevant part:

(a) Any person who is a fiduciary with
respect to a plan who breaches any of the
responsibilities, obligations, or duties
imposed upon fiduciaries by this subchapter

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shall be personally liable to make good to
such plan any losses to the plan resulting
from each such breach, and to restore to
such plan any profits of such fiduciary
which have been made through use of
assets of the plan by the fiduciary, and shall
be subject to such other equitable or reme-
dial relief as the court may deem appropri-
ate, including removal of such fiduciary.

29 U.S.C.A. § 1109 (“ERISA § 409”) (emphasis addec ).

In Massachusetts Mutual Life Ins. Co. v. Russell,
473 U.S. 1384 (1985), a beneficiary of an employee
benefit plan filed a claim for improper processing of
her disability benefits. Although Plaintiff was paid
all of her benefits under the plan, she brought suit
for extracontractual damages due to the injury she
allegedly suffered from the plan administrator's
improper refusal to pay her disability benefits. The
question presented to the Supreme Court was
whether ERISA § 502(a)(2) allowed a plan fiduciary
to be held personally liable to a plan participant or
beneficiary for damages. Justice Stevens, writing for
a unanimous Court,* held that ERISA § 409, read in
its entirety, refers to the relationship between the
fiduciary and the plan, and more specifically, to the
potential liability of the fiduciary to the plan. /d. at
140. In other words, the Court held that there is no
private right of action for compensatory or punitive
relief by an individual participant or beneficiary
under ERISA § 502(a)(2). Nor may the final phrase in
the section (“shall be subject to such other equitable
or remedial relief as the court may deem appropri-

Justice Brennan, joined by White, Marshall, and Black-
mun, submitted a concurrence.

lla

ate”) be interpreted to enlarge that liability.’ Jd. at
140-41.

Defendants maintain that the Supreme Court’s
decision in Russell bars Plaintiffs claim for indi-
vidual benefits because he seeks damages for his
benefit alone and fails to allege any loss to the plan.
Plaintiff responds that Russell has been applied too
broadly and ought not be operative in a case such as
this where plaintiff seeks recovery of benefits from
a plan.

Plaintiff contends that the holding in Russell is
fact-specific, distinguishable, and should be limited
to the proposition that ertracontractual damages
that inure to the benefit of the individual as opposed
to the plan are not “equitable or remedial relief” as
the language is used in § 502(a)(2). Pl.’s Mem. in
Opp'n to Defs’ Mot. to Dismiss at 8 (“What is clear
from Russell is that tne Court was drawing a dis-
tinction between a participant’s right to sue for ben-
efits, which the Court viewed as sacrosanct, and a
participant’s right to suc for extracontractual dam-
ages suffered because of a denial of benefits, the
only issue before the Court.”) In support of his posi-
tion, Plaintiff points to Justice Brennan’s concur-
rence which emphasizes that Russell “presents a
single, narrow question: whether the § 409 ‘appro-
priate relief’ referred to in § 502(a)(2) includes indi-
vidual recovery by a participant or beneficiary of
extracontractual damages for breach of fiduciary
duty.” Russell, 473 U.S. at 149 (Brennan, J., concur-
ring). Further, Plaintiff argues (based on cannons of

In so ruling, the Court explicitly left open the question as
to whether extracontractual damages were available under any
other provision of ERISA, including § 502(a)(3). Russell, 473 U.S
at 139, n.d.

5

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statutory construction) that had the Court in Russell
properly construed the provisions at issue within
ERISA’s broader civil enforcement scheme as well as
its overarching remedial purpose, it would have
reached a different result.

While creative, Plaintiff’s arguments cannot defeat
the plain language in the statute and what we find in
the legislative history of § 502(a)(2) (and § 409)‘
First, ERISA §§ 502(a)(2) and 409 authorize plan
participants to bring suit in a representative capac-
ity on behalf of the plan, against a fiduciary of the
plan to remedy that fiduciary’s mismanagement of
the plan’s assets, and restore to such plan those
losses suffered by the plan asa whole. See Russell,
473 at 144 (“The entire text of § 409 persuades us
that Congress did not intend that section to autho-
rize any relief except for the plan itself.”); Coan v.
Kaufman, 457 F.3d 250, 257 (2d Cir. 2006) (stating
that such claims for breach of fiduciary duty may
not be made for individual relief but must be
brought in a representative capacity on behalf of the
plan) (quoting Russell, 473 U.S. at 142 n.9); and Lee
v. Burkhart, 991 F.2d 1004, 1009 (2d Cir. 1993) (hold-
ing that Russell “bars plaintiffs from suing under
§ 502(a)(2) because plaintiffs are seeking benefits
on their own behalf, not on behalf of the Plan.” ).

Further, the legislative history of ERISA §§ 409
and 502(a)(2) supports the position “that actions for
breach of fiduciary duty be brought in a represen-
tative capacity on behalf of the plan as a whole.”
Russell, 473 U.S. at 141 n.9. See, e.g., 120 CONG.

1

Plaintiff recognizes that even if this Court agrees with
the proposition that the holding in Russell has been misapplied
or was wrongly decided, it is “powerless to overrule it.” Pl.’s
Mem. in Opp’n to Defs’ Mot. to Dismiss at 7 n.6.

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Rec. H29196-97 (1974). The legislative history
“makes it abundantly clear that its draftsmen were
primarily concerned with the possible misuse of
plan assets and with remedies that would protect
the entire plan, rather than the rights of an individ-
ual beneficiary.” Russell, 473 U.S. at 141. Plaintiff in
this case seeks relief under ERISA §§ 502(a)(2) and
409 for his own benefit and not in a representative
capacity on behalf of the Plan, and therefore, he
fails to state a cognizable claim under ERISA
§ 502(a)(2).

B. Relief Available Under § 502(a)(3)

The Supreme Court and this Circuit have also pro-
vided substantial guidance with respect to Plaintiffs
second claim under ERISA § 502(a)(3). ERISA
§ 502(a)(3) provides that a civil action may be
brought

by a participant, beneficiary, or fiduciary
(A) to enjoin any act or practice which vio-
lates 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 pro-
visions of this subchapter or the terms of
the plan.

29 U.S.C.A. § 1132 (West 2007).

In Mertens v. Hewitt Assocs., 508 U.S. 248 (1993),
the Court considered whether former employees
could bring suit against the plan’s actuary, a non-
fiduciary, who they alleged knowingly participated
in the fiduciary’s breach of duty under ERISA
§ 502(a)(3). The plaintiffs argued that the non-fidu-
ciary was liable to the plan under ERISA § 502(a)(3)(B)

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which provides for “other equitable relief.” The
Court found that plaintiffs did not “seek a remedy
traditionally viewed as ‘equitable,’ such as injunc-
tion or restitution” but, instead, sought compen-
satory damages, nothing other than monetary rclicf.”
Mertens, 508 U.S. at 255. Accordingly, the Court held
that ERISA § 502(a)(3) does not authorize suits for
money damages against non-fiduciaries, at least not
in a case like Mertens, and, by analogy, one might
argue, to the case at bar. The Court went on to find
that the term “equitable relief” as used in ERISA
§ 502(a)(3) refers to “those categories of relief that
were typically available in equity (such as injunc-
tion, mandamus, and restitution, but not compen-
satory damages).” /d. at 256.

More recently, Great-West Life & Annuity Insur-
ance Company v. Knudson, 534 U.S. 204 (2002),
again considered the issue. There, the plaintiff
sought reimbursement for health care expenses
from the defendant after she recovered in a tort
action for the same incident. Her recovery had been
putin trust for her benefit. The plaintiff contended
that its suit for reimbursement was equitable
because it was a claim for restitution. However, the
Court held that plaintiffs sought monetary relief
which was not “typically available in equity.” Great
West, 534 U.S. at 210. The Court drew a distinction
between restitution in equity and restitution in law,
and found that this suit fell on the legal side of the
ledger.”

This distinction was not made in Mertens, whereas the
Court referred to restitution as an equitable remedy. Mertens,
508 US. at 255 (“[Petitioners] do mot. . . seek a remedy tradi-
tionally viewed as ‘equitable,’ such as injunction or restitution.” )

15a

Most recently, the Supreme Court had occasion to
address the question of equitable relief under ERISA
§ 502(a)(3), in Sereboff v. Mid Atlantic Medical Ser-
vices, Inc., 126 S.Ct. 1869 (2006), a factually similar
case to Mertens. There, a unanimous court found
that the suit should proceed because the request for
restitution was for identifiable funds in the defen-
dant’s possession, and therefore fell on the equity
side of the ledger. Sereboff, 126 S.Ct. at 1874.

Here, Defendants argue that Plaintiff is foreclosed
from bringing suit under ERISA § 502(a)(3)(B)
because his request is one for monetary damages—
z.e., his lump sum payment—and thus, is not equ?-
table relief. Plaintiff, in response, points out that
other courts have failed to give due weight to the
fact that Mertens drew a distinction between fidu-
ciaries and non-fiduciaries in determining whether
relief was “legal” or “equitable.” According to Plain-
tiff, Mertens is distinguishable from the instant case
because it involved a claim for compensatory dam-
ages against a non-fiduciary, and, therefore, should
not be applied to this case.°

However, while the decisions may be interpreted
to raise inconsistencies, they are as one with respect
to the case at bar, 7.e., Fisher cannot cloak a legal
claim for damages in equitable clothing. ERISA
§ 502(a)(3) “only allows for equitable relief’ Great-
West, 534 U.S. at 221 (emphasis in original).

6

In addition, Vefendants argue that ERISA § 502(a)(3)(A)
is irrelevant in this case because Plaintiff does not seek an
injunction, nor would an injunction be applicable in this case
because none of the named Defendants are currently fiduciaries
to the Plan (because PBGC has assumed the Plan’s liabilities and
assets). However, Plaintiff does not request injunctive relief in
this case, and, therefore the Court need not address this point

16a

Although Fisher requests declarations from this
Court, the nature of such declarations is inherently
legal. See Compl. at 7 (praying for a judgment (1)
“declaring that defendants. . . violated his/her fidu-
ciary duties by failing to provide him with a lump
sum benefit,” and (2) “declaring the amount of the
lump sum benefit to which Plaintiff is entitled”).
Fisher, like the plaintiffs in Mertens and Great-West,
seeks “nothing other than compensatory damages—
monetary relief for all losses [he has] sustained as a
result of [Defendants’] alleged breach of fiduciary
duties.” Mertens, 508 U.S. at 255 (emphasis in orig-
inal).

The Second Circuit’s recent decision in Coan v.
Kaufman, 457 F.3d 250 (2d Cir. 2006), is dispositive.
The Court held that irrespective of the party sued,
Plaintiff must still show that the relief requested is
of the sort typically available at equity. Jd. at 264
(“But whether sought from a fiduciary or not, the
type of relief a plaintiff requests must still be “equi-
table.”). In other words, although breach of fidu-
ciary duty is an equitable claim, Plaintiff must also
demonstrate that the nature of recovery is equi-
table. Sereboff, 126 S.Ct. at 1874. Consequently,
Plaintiff has failed to state a cognizable claim under
ERISA § 502(a)(3).

IV. CONCLUSION

Since what Plaintiff seeks is individual legal
relief—in this case, monetary damages under ERISA
§§ 502(a)(2) and 502(a)(3), which must be denied for
the reasons stated above, the Complaint fails to
State a claim, and, accordingly, the Defendants’
Motion to Dismiss the Complaint is GRANTED.

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The Clerk of the Court is instructed to close this
matter and remove it from my docket.

IT IS SO ORDERED.

New York, New York
February 16, 2007

U.S.D.J.

L8a

UNITED STATES COURT OF APPEALS
FOR THE
SECOND CIRCUIT

Docket Number: 07-1100-cy

At a stated Term of the United States Court of
Appeals for the Second Circuit, held at the Daniel
Patrick Moynihan United States Courthouse, 500
Pearl Street, in the City of New York, on the 15th
day of May, two thousand and nine,

JOSEPH V. FISHER,

Plaintiff-Appellant,

THE PENN TRAFFIC COMPANY, BYRONE E. ALLUM-
BAUGH, RICHARD P. BRENNAN, KEVIN P. COLLINS,
JAMES A. DEMME, MATTHEW GLASS, ROBERT HOCK
ETT, RICHARD D. HOULIHAN, JR., PETER L. ZURKOW,
JOHN DOES, Nos. 1-5, BERNADETTE RANDALL-BAR-
BER, JANE ROEs, Nos. 1-5,

Defendant-Appellees.

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ORDER

Appellant Joseph V. Fisher having filed a petition
for panel rehearing, or, in the alternative, for rehear-
ing en banc, and the panel that deterv.ined the
appeal having considered the request for panel
rehearing, and the active members of the Court hav-
ing considered the request for rehearing en banc,

IT IS HEREBY ORDERED that the petition is denied.

For the Court:
Catherine O’Hagan Wolfe, Clerk

By:
frank Perez, Deputy Clerk

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David S. Preminger (DP 1057)
Rosen Preminger & Bloom LLP
708 Third Avenue, Suite 1600
New York, New York 10017
(212) 682-1900

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

COMPLAINT
No. 06 CV 5848 (HB)
(ECF Case)

JOSEPH V. FISHER.
Plaintiff,

—against—

THE PENN TRAFFIC COMPANY, BYRON E. ALLUM-
BAUGH, RICHARD P. BRENNAN, KEVIN P. COLLINS,
JAMES A. DEMME, MATTHEW GLASS, ROBERT HOCK-
ETT, RICHARD D. HOLIHAN, JR., PETER L. ZURKOW,
JOHN DOES NOs. 1-5, BERNADETTE RANDALL-BARBER
and JANE ROES Nos. 1-5,

Defendants.

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PRELIMINARY STATEMENT

1. This is an action by Plaintiff, Joseph V. Fisher,
pursuant to the Employee Retirement Income Secu-
rity Act of 1974, as amended (“ERISA”), 29 U.S.C.
§ 1001 et seq., for breach of fiduciary duty by defen-
dants in refusing to pay him the lump sum pension
benefit to which is entitled as a participant in The
Penn Traffic Company Cash Balance Pension Plan
(the “Plan”).

Il. JURISDICTION AND VENUE

2. This action is brought by plaintiff pursuant to
§§ 502(a)(2) and (a)(3) of ERISA, 29 U.S.C.
§§ 1132(a)(2) and (a)(3). This Court has subject mat-
ter jurisdiction pursuant to ERISA § 502(e)(1), 29
U.S.C. §11232(e)(1). This Court has supplemental
jurisdiction over any other claim pursuant to 28
U.S.C. $ 1367(a).

3. Declaratory relief is authorized by 28 U.S.C.
$$ 2201 and 2202 and Rule 58 of the Federal Rules of
Civil Procedure.

4. Venue is based on ERISA § 502(e)(2), 29 U.S.C.
$ 1132(e)(2).

Itt. PARTIES

5. Plaintiff, Joseph V. Fisher is a natural person
residing in the state of Massachusetts.

6. Defendant The Penn Traffic Company (the
“Company” ), at all times pertinent hereto, was the
sponsor of the Plan within the meaning of ERISA
§$ 3(16)(B)(1), 29 U.S.C.§ 1002(16)(B)(i), the Admin-

22a

istrator of the Plan within the meaning of ERISA
§ 3(16)(A)(i), 29 U.S.C. § 1002(16)(A)Qi), and the
Named Fiduciary of the Plan within the meaning of
ERISA § 402(a)(2), 29 U.S.C. § 1102(a)(2). As such,
at all times pertinent hereto, the Company was a
fiduciary within the meaning of ERISA § 3(21)(A),
29 U.S.C. § 1002(3)(21)(A).

7. Defendants Byron E. Allumbaugh, Richard P.
Brennan, Kevin P. Collins, James A. Demme,
Matthew Glass, Robert Hockett, Richard D. Holihan,
Jr., Peter L. Zurkow, and John Does Nos. 1-5 (whose
names are currently unknown to Plaintiff) were, at
all times pertinent hereto, members of the Board of
Directors of the Company (the “Board”). These
members of the Board acted in a fiduciary capacity
with respect to Plaintiff's application for benefits at
issue herein and, therefore, acted as fiduciaries
within the meaning of ERISA § 3(21)(A), 29 U.S.C.
§ 1002(3)(21)(A).

8. Defendants Bernadette Randall-Barber and Jane
Roes Nos. 1-5 (whose names are currently unknown
to Plaintiff) were, at all times pertinent hereto,
members of the Administration Committee of the
Plan (the “Committee”). The Plan delegates to the
members of the Committee certain powers and
duties, inter alia, exclusive authority to decide
claims for benefits, including the amount of bene-
fits, and interpretation of the Plan’s terms. As such,
the members of the Committee were at all times per-
tinent hereto fiduciaries within the meaning of
ERISA § 3(21)(A), 29 U.S.C. § 1002(3)(21)(A).

23a
IV. FACTS

9. Plaintiff is a former employee of the Company.
having resigned in early August, 2003. Plaintiff is
and, at all times pertinent hereto, was a participant
in and beneficiary of the Plan within the meaning of
ERISA 8§§ 3(7), (8), 29 U.S.C. §§ 1002(7), (8), witha
vested right to benefits from the Plan.

10. Pursuant to the provisions of the Plan, Plaintiff
filed an application for benefits on August 15, 20038,
on the form provided by the Plan for that purpose
and checked the box on that form indicating that he
was electing that his benefits be paid in the form of
a lump sum, a form of benefit offered by the Plan.

11. By letter dated October 17, 2003 (the “Denial
Letter”), the Committee informed Plaintiff that his
application for a lump sum was denied but indicated
that payments in the form of a monthly annuity
would commence should Plaintiff so elect. Plaintiff
did not so elect.

12. The Denial Letter failed to comply with the
requirements of 29 C.F.R. § 2960.503-1(g), (h).

13. Despite the fact that the Committee had sole
authority under the Plan to make benefit determi
nations, it did not do so here. The decision to deny
Plaintiff's application was made by the Board and
adopted by the Committee.

14. If the Committee purports to have delegated
authority to the Board to make this decision, any
such delegation was not, upon information and
belief, effected in conformance with the Plan’s pro-
cedures for delegation of fiduciary responsibilities.

24a

15. By timely letter from counsel dated Noveinber
3, 2003. supplemented by letter from counsel dated
November 17, 2003, Plaintiff appealed the denial of
a lump sum benefit.

16. No response was ever provided to Plaintiff
with respect to his appeal.

17. While it is Plaintiff’s position that exhaustion
of the Plan’s claims procedures was not required
with respect to the claims Plaintiff asserts herein,
Plaintiff has both exhausted the Plan’s claims pro-
cedures in fact and is deemed to have exhausted
those procedures (29 C.F.R. § 2560.503-1(L)).

V. CLAIMS FOR RELIEF

First Claim for Relief
CERISA §§ 404(a)(1) and 502(a)(2),
29 U.S.C. §§ 1104(a)(1) and 1132(a)(2))

18. Plaintiff repeats and realleges the contents of
paragraphs 1-17 above as if fully set forth herein.

19. Typically, the Plan paid lump sum benefits
within two (2) weeks of the filing of an application
by a participant.

20. At the time Plaintiff applied for benefits, the
Plan was underfunded and the Company had been
informed that, at some point in the future, it might
want to terminate the Plan in a distress termination
so that the Pension Benefit Insurance Company
(“PBGC”) would assume the Plan’s assets and lia-
bilities.

21. Nonetheless, the Plan had adequate resources
to pay Plaintiff his lump sum benefit.

25a

22. At its meeting on September 29, 2003, the
Board passed a resolution to terminate the Plan.

23. Nonetheless, the Committee processed other
Plan participants’ applications for benefits, includ-
ing lump sum benefits, and caused the Plan to pay
such benefits, both before and after the Board’s
decision to terminate the Plan.

24. Upon the filing of an application for a distress
termination, the PBGC does not immediately assume
responsibility for a plan. Typically there are nego-
tiations and even litigation over issues including the
appropriate date of termination. Often, the PBGC
pursues a claim against a plan sponsor for a plan's
unfunded liability.

25. Because the Plan's assets and liabilities have
now been assumed by the rBGC, which is prohibited
by statute from paying benefits in the form of a lump
sum even if a plan provides for such a benefit pay-
ment, Plaintiff can not receive the lump sum benefit
to which he is entitled and may receive a lower
annuity than provided for by the terms of the Plan if
Plaintiff's annuity is in excess of PBGC limits.

26. Accordingly, defendants, and each of them,
violated their fiduciary duties under ERISA, inter
alia, in the following respects:

a. the Committee failed to act on Plaintiff’s
application on a timely basis in accordance with
past practice and the terms of the Plan;

b. the members of the Committee failed to
resign and continued to process the pension appli
cations of other Plan participants while Plaintiff's
application was held in abeyance pending a decision
by the Board;

26a

c. the Company (including the Board) failed to
remove the members of the Committee for refus-
ing/failing to act on Plaintiff’s application;

d. the Committee de facto improperly delegated
its authority to determine Plaintiff’s application to
the Board;

e. the Board accepted the Committee’s de facto
improper delegation of its authority to determine
Plaintiff's application;

f. the Board refused/failed to act on Plaintiff's
application until after its September 29, 2006 deci-
sion to terminate the Plan.

27. Upon information and belief, defendants’ fore-
going actions were all effected in order to protect
the Company’s financial position rather than pro-
viding Plaintiff with the benefit to which he was
entitled and thus constitute breaches of their fidu-
ciary duties inter alia under ERISA § 404(a)(1), 29
U.S.C. § 1104(a)(1), which requires fiduciaries to
“discharge [their] duties solely in the interest of the
participants and beneficiaries.”

28. As such, pursuant to ERISA § 502(a)(2), 29
U.S.C. §1132(a)(2), Plaintiff is entitled to appro-
priate equitable or remedial relief for defendants’
breaches of fiduciary duty.

Second Claim for Relief
(ERISA §§ 404(a)(1) and 502(a)(3),
29 U.S.C. §§ 1104(a)(1) and 1132(a)(3))

29. Plaintiff repeats and realleges the contents of
paragraphs 1-27 above as if fully set forth herein.

2la

30. Plaintiff has no adequate remedy at law.

31. Alternatively, pursuant to ERISA § 502(a)(3),
29 U.S.C. § 1132(a)(3), Plaintiff is entitled to appro-
priate equitable relief for defendants’ breaches of
fiduciary duty.

Third Claim for Relief
(ERISA §§ 406(b)( 1), (2) and
502(a)(2), (3) 29 U.S.C. §§ 1106(b)(1), (2)
and 1132(a)(2), (3))

32. Plaintiff repeats and realleges the contents of
paragraphs 1-27 and 29-30 above as if fully set forth
herein.

32. In violation of ERISA § 406(b)(1), 29 U.S.C.
§ 1106(b)(1), the Company (including the Board)
engaged in a prohibited transaction by acting
“deal[ing] with the assets of the [P]lan in [its] own
interest or for [its] own account.”

33. In violation of ERISA § 406(b)(2), 29 U.S.C.
§ 1106(b)(2), defendants engaged in a prohibited
transaction by acting “in [a] transaction involving
the [PJlan on behalf of a party (the Company) whose
interests are adverse to the interests of the [P]lan[’s]
participants and beneficiaries.”

34. As such, pursuant to ERISA §§ 502(a)(2), (3),
29 U.S.C. §§ 1132(a)(2), Plaintiff is entitled to appro-
priate equitable or remedial relief for defendants’
breaches of fiduciary duty.

28a
VI. PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays that this Court enter
judgment in his favor as follows:
1. declaring that defendants, and each of them,

violated his/her fiduciary duties by failing to provide
him with a lump suim benefit;

2. declaring the amount of the lump sum benefit to
which Plaintiff is entitled;

3. granting Plaintiff judgment against the defen-
dants, jointly and severally, for the amount of his
lump sum benefit together with appropriate interest
thereon;

4. awarding Plaintiff his costs and attorney’s fees

herein; and,
5. awarding Plaintiff such other and further relief

as to this Court may seem just and proper.

Dated: July 31, 2006
New York NY

Respectfully submitted,

Rosen Preminger & Bloom LLP
Attorneys for Plaintiff

By:

David S. Preminger (DP 1057)
Rosen Preminger & Bloom LLP
708 Third Avenue, Suite 1600
New York, New York 10017

(212) 682-1900

29a

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

No. 06 CV 5848 (HB)
(ECF CASE)

JOSEPH V. FISHER,
Plaintiff,

—against—

THE PENN TRAFFIC COMPANY, BYRON E. ALLUM-
BAUGH, RICHARD P. BRENNAN, KEVIN P. COLLINS,
JAMES A. DEMME, MATTHEW GLASS, ROBERT HOCK-
ETT, RICHARD D. HOLIHAN, JR., PETER L. ZURKOW,
JOHN DOES Nos. 1-5, BERNADETTE RANDALL-BARBER
and JANE ROES NOs. 1-5,

Defendants.

NOTICE OF MOTION

Please take notice that Defendants The Penn Traf-
fic Company, Byron E. Allumbaugh, Richard P.
Brennan, Kevin P. Collins, James A. Demme,
Matthew Glass, Robert Hockett, Richard D. Holihan,
Jr., Peter L. Zurkow, and Bermmadetter Randall-Barber
Myer hereby move, pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure, to dismiss Plaintiff

30a

Joseph V. Fisher’s Complaint with prejudice. This
motion is made on the grounds that the Complaint
fails to state a claim upon which relief can be
granted, and is based upon this motion and the
Memorandum of Law filed in support thereof.

Respectfully submitted,

COOLEY GODWARD KRONISH LLP

By: /s/ WILLIAM H. O’BRIEN
William H. O’Brien (WB 5271)
Jeffrey W. Lang (JL 6021)

Members of the Firm

1114 Avenue of the Americas
New York, New York 10036
(212) 479-6000

Attorneys for Defendants

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_0812%3A1. Public record. Not legal advice.