1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-8-1995

Secretary of Labor v Compton

Precedential or Non-Precedential:

Docket 93-2019

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Recommended Citation

"Secretary of Labor v Compton" (1995). 1995 Decisions. Paper 153.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/153
1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

____________ 

No. 93-2019 

____________ 

ROBERT B. REICH, Secretary of the 

United States Department of Labor, 

Appellant 

v. 

FRED COMPTON, JOSEPH McHUGH, JOHN NIELSON, 

FREDERICK HAMMERSCHMIDT, GERSIL N. KAY, THE FIDELITY-PHILADELPHIA 

TRUST COMPANY, and THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL 

WORKERS, LOCAL UNION NO. 98, 

Appellees 

__________________ 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

(D.C. Civil No. 88-7920) 

____________________ 

ORDER AMENDING OPINION 

____________________ 

Present: BECKER, ALITO, and GIBSON,* Circuit Judges: 

 IT IS ORDERED THAT the opinion in the above matter is 

hereby amended as follows: 

 1. The following text on page 33 is deleted: 

We know of no way, and the Secretary has not 

suggested one, that EMA and Local 98 could 

have forced the Plan to divest itself of the 

note in a timely fashion. We also note that 

ERISA had not been 

________________________ 
2 

*Hon. John R. Gibson, United States Circuit Judge for the Eighth 

Circuit, sitting by designation. 
3 

enacted at the time of the first transaction. Thus, we conclude 

that EMA and Local 98 did not engage in an "act or practice" 

prohibited by ERISA and therefore they cannot be held liable by 

the Secretary pursuant to section 502(a)(5). On the other hand, 

EMA and Local 98 were clearly active parties in the second 

transaction and therefore the Secretary has a cause of action 

against them on this transaction. 

 In the place of this text, the following text is 

inserted: 

Without deciding whether there is a theory 

under which parties such as EMA and Local 98 

could be held liable based on a transaction 

of this nature, we affirm the decision of the 

district court with respect to this 

transaction because here the Secretary has 

not presented such a theory to us in a timely 

and adequate manner. 

 2. On pages 29-30, the following text is deleted: 

Second, the legislative history of ERISA appears to 

contradict the position advocated by EMA and Local 98. 

The Senate Report stated 

 The bill also makes a party in 

interest who participates in a prohibited 

transaction . . . personally liable for any 

losses sustained by the plan and for any 

profits made through using plan assets. . . . 

This liability is appropriate because in 

these situations often the party in interest 

is a major beneficiary of a fiduciary breach. 

S. Rep. No. 93-383, 93rd Cong., 2d Sess. (1974), 

reprinted in 1974 U.S.C.A.A.N. 4890, 4989. 

 3. On page 30, line 6, "Third" is changed to 
4 

"Second." On page 31, line 17, "Fourth" is changed to "Third." 

 /s/ Samuel A. Alito 

 

________________________________ 

 Circuit Judge 

Dated: September 8, 1995