this is not a bankruptcy case second under rissa the term fiduciary is defined broadly and third under vista the documents the government employee benefit plan must be enforced i'll address each of these in turn first this is not a bankruptcy case the district court below relied wholly upon the ninth circuit's two thousand and fifteen decision and boss versus board of trustees are you familiar with the order issued in boston twenty sixteen that address was well it applied in the interests of context the fiduciary ruling so why would we be bound by that precedent or is that precedent in your mind that is binding on this i don't think that's precedent it's binding on this score i believe that statement was simply trying to summarize what had happened previously in the case but if the panel that decided that previous case says that's what they did in the previous case then isn't that pretty good authority that that's what they did you know they may have believed that that's what they were doing but when you actually look at the actual text of the the merits of boss and what they were deciding it was clear that they were deciding whether or not a debtor was subject to discharge and their entire analysis comes back to that when you look at the cases that they relied upon for their decision those were bankruptcy cases the case from the sixth circuit and ray luna from the tenth circuit both bankruptcy cases and they were always coming back to this question of what is receipt for you sherry then you're probably a fiduciary under the bankruptcy code however when we actually look at that i don't think that that's essential to the holding i think that what they're trying to do first because you have to be a for the discharge exception first of the term and ok well how do we get there how do we make this person if we're going to stop you for your too far because i don't think it's our case law that the binding reach of precedent is limited to those pieces that are quote essential to the holding close quote the boss panel spoke of now you may say that it was a bankruptcy because he so we should disregard all that but i don't think that's our prerogative can you tell me why it's our prerogative  why we aren't bound by what the panel said well i'll tell you there's two reasons why this court should not hold the same way it's not should can you point to case law from our court that says we're not bound because the case law that i know of from our court says that we are even if it's not quote essential to the holding close quote absolutely obviously this court is going to be bound by its prior decisions however if that prior decision was within a different context where this case i mean the problem is we have in our court and i don't think every circuit has this role but we have a rule that says we're bound by well reasoned and i think saying that it's not necessary the holding doesn't get us out of that because it seems like boss talked a lot about a risk and it seems like it's reasoned so i mean maybe you can tell it is not well reasoned but that's a tough maybe i mean maybe that's where you're going but i think we have to be within the framework that we're going to be bound if this is well reasoned dicta certainly let me let me tell you why the decision of the district court is inconsistent with prior presidents both from the ninth circuit and from the supreme court might my second and third points were the second point was under a risk in a purely arista context the term for do share is to be defined broadly but so does that mean boss is wrong are you telling us what i mean us yes and that's right that all of those k all those bankruptcy cases boss and the other cases they they start with determining whether or not they're for to share but then they take it another step and say ok even if they are fiduciary has a d fell cation occurred and that's a further step in the analysis the certainly would be a political here and so the what boss talked about is it actually said ok well we're going to take it and we're going to say if they are  or how would we analyze that and what would that make how would we take that the step further and it goes to the whole idea of what is a plan asset do they have control over these kinds of things and so the boss goes through and has that three part analysis this case obviously is not going to have that same effect the certainly when congress enacted the bankruptcy code it did not intend to have an effect on pure arista collection actions now if those end up in a bankruptcy case then certainly that's going to have an effect but until that happens until a a an individual actually files a petition for bankruptcy they don't get the protections of the bankruptcy code and so i under risk that we have this broad definition of fiduciary or have you gone after his accuracy file for bankruptcy accuracy glass is in bankruptcy because you've gone after the glass to the ends of the earth you're on ok it's leads to a somewhat different question but it's been wearing on me so go ahead and pose it what gives the plan's the authority to assign duties of any kind especially fiduciary duties to individuals who haven't themselves voluntarily undertaken those duties i mean your brief talks about imposing the plans have done things to impose duties on others i don't think you can impose i mean i can't go to somebody owes me money and says i'm imposing this duty on had number one they sign a master labor agreement once you enter into that master labor agreement by its nature if it has a contribution obligation to trust funds those trust funds don't exist in a vacuum by the nature of a mandates they are subject to read and written down and accuracy glass may have exposed itself and imposed upon itself it is surely duties accuracy is not in front of us certainly so what about the individuals what did they do to take on these fishery duties i'll refer to there's a if you look at the temecula mechanical case in the central gist of california they go through this whole analysis of is it really it's almost a fairness analysis is it fair to impose these duties on an individual when they were acting in the capacity of the employer not for themselves personally and what they do is they actually quote from to your case it's called the case and they address that i'm less interested in the court saying it than the logic behind it i do not understand what gives somebody else the power to reach out and  who hasn't undertaken it so that's what i wanted to find out how is that that mr marshall and mr lomax can we get signed duties by whatever it was the funds did your honor the answer that question is  probably best demonstrated by when we look at the way that these trusts agreements are in acted and how they are how they adopt these provisions are those two individuals parties to those trust agreements by nature of their entering into the master labor agreement yes they didn't it's their employer who entered in the master labor agreement they didn't sign on to the master labor agreement themselves to say well what i was going to say is that we answer that question yes or what it is is what i was going to point to is that mr lamb it actually was a trustee on one of these funds at the time when they first adopted this policy in two thousand and four it's the premiership fund and you can find this on page two fifty six two fifty seven of the exhibits of record that we provided they adopted a a very explicit amendment the said that unpaid contributions are planned assets and the employer representative who is responsible for a trustee he may be able to bind himself he's an employee representative but i don't understand how he or his employer has the op has the authority to bind another individual as of a dues year ie i mean you and i can make all the agreements we want but that doesn't mean that she's liable for them you and i can't because we are not in a labor and we're not in a labor agreement we're not in that kind of relationship the way that arista functions is in order to protect employee benefit plans and the benefits that are promised under those plans and so they've given broad protections and broad abilities to plan for do sherry's to be able to plan to be able so they can have properly funded plans to be able to provide those perhaps the plan for which mr lamech was himself a trustee that might be a different situation and i confess going through this i've struggled trying to figure out who's a trustee of what and i don't have a handle on that and i'll be asking your colleague about that but other than that situation i haven't figured out what it is that makes mr mack and mr marshall personally liable what gives the plan the authority to impose a liability on somebody else who is not himself a signatory to any of these plans the plan has the authority under arista it's the slimy a statute that says that you and i can make a deal or in this case the plan can make a deal that imposes liability and somebody who's not a party to it it states in eleven in in the one thousand and two in the definition section it says that a fiduciary a person is a fiduciary with respect to a plan to the extent he exercises and use discretionary authority or discretionary control respecting management of such plan or exercise any authority or control respecting management or disposition of its assets somebody is part of the plan management presumably has obligation to the plan as is preexisting your honor it doesn't say that that's who it is what it says is that anyone who has control over plan assets plan assets is not defined interests that's left to the governing document the supreme court has stated we enforce those governing documents it leaves it to the governing documents to state what is a plan asset the trust agreements clearly state contributions that are jew but not yet paid and are in control of this employer you have a  contributions that's where it's stated and that's how it happens but the fiduciary duty if i understand your argument correctly would come from having control over the plans assets and that gets us back to basra are these yet the plans assets and so we're back around is that right you are right and the difference in boss if you look closely as to what those agreements state i said this case is even more it's very different from boss because those agreements were very  very vague they talked about contributions to be made and that's as far as it went where in this case we have specific doesn't talk about it as a general rule about funds that are not yet paid so i just i'm really having trouble circuit struggled with the same issue it had a prior case where it was the powers hand fuel case and it had actually said just like klein says unpaid contributions are not planned assets in a later case in the i c p frenc pension fund versus hall case it's stated that they talked about how that was the general rule that was stated but then they create this exception and that's where the plan document where it and the problem i'm having is even if i would be inclined to agree with you boss says the eleventh circuit said this stuff and i t p instead of agreeing with them we agree with these other courts so i don't know how we can agree with you in let me take this on bank which again i mean i think i asked this earlier maybe what that is what you want us to would certainly think that that may be appropriate for the using right now the difference is that the reason why the ninth circuit disagreed with the eleventh circuit and went with those other cases is because the eleventh circuit case was not a bankruptcy case the six than ten circuits that it followed were bankruptcy cases so it made it appropriate because bos itself was a bankruptcy case is in a why in that order to they say we have made this a risk the whole thing honestly you know when i read boss i agree it's entirely confusing i think that it could be more careful in its wording in the way that they describe it because i think it confuses the issue more than helps it and certainly i think that the district court was confused by those same the same things we have a sense boss was was became law there have been some district courts that have analyzed it and tried to implement it there's been two cases that have said ok well boss says what it says and sorry there's there's no exception to kline in this circuit there's been other cases that have two thousand there is not really anything in that case to suggest that they're even looked at the plan documents and so what the cases that i've talked about sense then that apply the exception they go to that exact prescribed by what's written in that plan we have to enforce that plan as it's written i understand that there may be some heartburn about that and how we don't it may seem unfair to impose these liabilities on individuals who are merely trying to do their job here in case where the supreme court or any other circuit court said we have to him and force the plan is written and then includes and forcing a process on body who is not a party to the plan absolutely what case with that big every single one of the cases that we cited adopting the exception of klein that's what they say because they all struggle with the same issue it doesn't seem fair to impose this kind of liability but they are they're mandated by the supreme court to adopt and apply these plan provisions as they're written it says if they say that they're on paid contributions then we're going to keep that as part of the plan assets like you took that principle the plan could say and we're going to make the bank where the employer has its accounts itself liable for anything that's not paid and so to enforce a plan is written that would mean any bank that happens to have a deposit from accuracy glass suddenly becomes liable itself is that is that what you think the case law calls for i don't think that's what the case law calls for because a bank while it may have custody of of monies belonging to an employer it doesn't necessarily have control of those monies no no i just told you that suppose the plan says we're going to say plan assets and they have the monies in their account and so we think that the depository should also be responsible to us to make sure the money isn't paid to anybody else who gets paid first i mean if the plan did that is that what a risk would contemplate and what the cases that you citing would authorize the plan isn't forced to the extent that it's consistent with a risk and so you have to have control over the plan asset in order to have a breach of produce a duty if the bank did not have control over that plan asset then it wouldn't matter what the trust document said it could impose that liability here they're saying that the employer to the extent it does have control then it's going to have liability the trust fund that brings that kind of case still has to prove not only that it was dealing with a plan asset but that the employer represented that they're trying to sue and hold liable is the one that actually had that control so i can't just sue anybody at the employer saying well joe works there and so he's liable no it has to actually be an employee representative who is making decisions about when and how to send those contributions and turn them over to the trust fund we've taken you morning your honor sir my name is marks are not asking and i am the attorney representing michael mack and kelly marshall in connection with this matter judge clifton earlier you had been in one of the early or agreements had made a comment about people being belt and suspenders lawyers i hadn't heard that expression before and i think of myself as a lunchpail litigator and as the lunch a gator it's very important to me that i can rely upon the words that people like you who wear the robes and make decisions what you say and when you say something i need to be able to rely on the fact that you mean it and when you look at boss regardless of the dance that the appellants have to make in this case it is very clear what the panel in boss said and i think what they meant the very first sentence of the case says we must decide whether an employer's contractual requirement to contribute to an employee a benefits trust fund makes it a fiduciary of unpaid contributions that's what the court said it was deciding and what it had to decide and it second statement that i think does which is on the second page of the opinion they specifically said if an individual is a fiduciary for purposes of the employee retirement income security act of and seventy four the individual is also treated as a fiduciary for purposes of section five twenty three a four and they then went through as you noted in your smith left off though raises an interesting question that deal or that directly applies here in an answer again i think it was to judge clifton this question about imposing our obligations on a  bank the mr smith and argue back and says well you know that won't happen because the bank doesn't exercise control over the asset it just is the holder of the deposit well that brings us right back to boss boss again bosses rationale for not finding the officers and directors of the employer the rationale was because these officers and directors do not control the asset which is the contribution and they went through an interesting analysis to try and calculate and define exactly what kind of an asset is this thing i mean it's not money that has been received by the employer money received by the employer in an employee for instance in an employee contribution to the plan they have withheld money so you can segregate the money then and identify the money that the employee paid so now the employer has control over that and so that has been viewed as a plan asset and you know who did that it was in the code of federal regulations it is the it's congress and the regulators who who put that in a statute or regulation to say this is a plan asset and it's a plan asset because the money can be segregated when accuracy glasses case there is no money i mean that's the whole reason that we had the litigation to begin with why accuracy glass ended up going into bankruptcy how they couldn't pay their bills anymore i think the argument being made is that your clients had an obligation or were or should have been motivated when they were in a position to sort out what assets accuracy glass had before they got to bankruptcy and way before they got to insolvency that they should be motivated to push payments to these funds to the top of the list presumably accuracy class paid some things why weren't the fines paid snow record that there was any decisions made in our case there's no allegations that there was mis prioritize ation there's no allegations that the employee the management paid themselves at the expense of any contributions in fact they did make partial contributions throughout the entire history of this as they had money available when their van when their customers paid them so they put a high highest priority on health and welfare benefits for instance and they made certain that they health and welfare benefits portion of the trust the get paid as quickly as possible some of the other ones they tell you're basically arguing your client's there's nothing else they could do the money wasn't there to pay so that sounds like an argument there was no breach of duty but here we're talking about whether there was a duty in the first place if there wasn't a breach of duty why does it matter so much as to whether there was a duty well if there is no duty i mean we have to get to the question of breach so so so you've jumped to an answer that suggests to me ok there's that is another defense down the road but that doesn't answer to me the question to the first part that is you're telling me your clients didn't have any there weren't any the funds to pay any more than was already paid but why isn't it appropriate for the fun to impose on your clients who are in control of where the money went to impose on your clients this duty to make sure what there is there should go to the fines and you can tell me that there wasn't anything else there but that gets to the breach of duty question not to the existence of do to have in answering your question i'm going to go ahead and assume that there's a duty but i'm conceding that there is a duty i don't think they're trying to get on with here we're trying to figure out whether there's a duty or not and alex assume for my question that there were assets that were paid in other directions and and for maybe good reasons the officers decided to pay other debts for other creditors first what's wrong with the fund saying look we want to motivate you to push these to the top of the list so we're imposing this duty on you what's wrong with that can't impose you unilaterally impose duties on people i think you are questioning of counsel earlier when you talked about how does the plan people who aren't even part even part part of or parties to a contract a risk doesn't do it well that may get to be the question we've had a couple of citations and i'm still working on that question for myself but it's not like your clients are strangers to this set of transactions they are in fact the officers and the owners as well that doesn't mean we pierce the corporate veil and so forth but they are they are involved in the activity they're not some outside of the transaction and and and as you go further in if if we went further in the analysis first of all i don't think the trust documents have language that impose that or have the language making unpaid contributions plan assets or attempting to i don't think that that's the that language is anywhere near sufficient but and i think this relates to your question i think it's extremely important when you  played it was right in the reading of a wrist that's been offered up and i'm not saying that i'm worked through that you have to have plenty of his right your clients are in a position to know what the labor agreement says your clients are in a position because of acc obligation to that fund but i'm not sure it's the same for the as a trustee of the fun in the management of the fund assets but i am not at all convinced that that means he would also be a  capacity as an owner of the employer but if as a trust back to unpaid contributions a trustee he's joining in the adoption of whatever language that plaintive asserts imposes the obligation then we're not quite in the situation of of an obligation being opposed upon a stranger because he's him self a trustee doing the language that is arguably imposing the duty on him as to that trust i would agree with you if the language of the trust instrument says in specific unambiguous terms that the big contribution is an asset of the plan it isn't enough too to  say that a contribution in plant assets or contributions made were to be made i mean the kick case law seems to be pretty clear that that's not enough well that's our question here isn't it i mean isn't that our question about under arrest and just because somebody says a plan unpaid contribution is a plan asset doesn't all of a sudden impose a liability or make you a fiduciary you still have to control all of that and i think boss did make it although it's subtle they did make a distinction between whether or not it's a plant asset and then they went on and said even if it's a plant asset they lack the requisite control to make them so if you don't have the control you and i can say agree that i'm a fiduciary over your bank account if i never have control over your bank account i can't be a fiduciary regardless of whether you when i said  so that's of it do you think that where in boston you think they make that as a broad legal statement as opposed to a question of fact about the particular fact the you acknowledge to judge gleason earlier that maybe there's a difference and that there's a way to thread the needle then i don't know that we can take that into a recess but here they are talking about the control aspect it is later that they deal with the issue brought up by judge status potentially yes now can i ask you a question just going back to an earlier line of questions discussion which is a question that you had i'm trying to figure out when you got into the discussion of whether if there was a duty it was breached i think you're going beyond arguments in your brief so i had understood your brief to be about whether there was a duty and not these facts about whether it was breached whether there was really money am i right about yes i was just responding to the judge's question are we really you've waived any argument that as a matter of fact there was no breach we're not we can't decide this case on that at this one right i don't think the judge's decision was based on that and i don't think that's even before you are ok i have now i would argue i only have twenty seconds i got sidetracked i don't want you to over look because we've been talking extensively about boss this is again as a lunchpail lawyer i mean ball and twelve only you are require a pleading to set forth the adequate plausible facts  that would allow for liability to be asserted here and in my brief i set forth for different reasons why the pleading what itself was deficient and you don't even have to get to the question of bos think you should because it depends on who you get as a judge how bosses interpret it in our district as opposed to what the law really is but you don't ever have to get there because in this complaint the only basis for liability that was set forth was that that the trust agreements were incorporated by reference into the master labor agreements they were not incorporated by reference into the master labor agreements and because they were not and that's the only factual or legal basis that was set forth by the plaintiffs in their complaint this complaint should have been dismissed and can be dismissed by you on that basis alone thank you counsel your over your time thank you judges i'd like to start with counsel's last point and that was that these the mass labor agreement did not incorporate by reference these these trust agreements now the complaint does stay does state that the trust agreements are incorporated by reference however this does not mean that the master labor agreement actually has to say these trust agreements are incorporated by reference in fact what it actually means is that the trust the master labor agreement references the trust and by operation of law there is a trust agreement that governs that trust and so when we look at the master labor agreement you're going to see there's sixteen different contribution obligations set forth in that agreement there's varying degrees of how they reference these trust agreements some of them actually say it's incorporated and you're bound by it some of them just talk about a contribution obligation and then how there's trustees that manage that fund those kinds of things but more importantly the ninth circuit in the miramar hotel case actually rejected those same arguments saying it doesn't matter if the labor agreement incorporates the trust agreement by reference it doesn't matter if you actually even sign it you are still bound by it because you are a contributing employer you're bound by both you take both the benefits and the burden of those agreements now i think that what's really important today is that we have binding supreme court precedent saying that these these governing documents must be enforced we have a district court who relied upon a bankruptcy court case to say that in a purely arista context there's going to be a narrow definition of fiduciary that is contrary to binding ninth circuit and supreme court precedents in a recess action outside of bankruptcy there's a broad definition of who do sherry for those reasons were respectfully asking that the discord be reversed thank you thank you thank you both sides for the he