1995 D e c i sion s O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit

9-8-1995 

# S ecr et a r y of L a

b or v C ompt on
P r e c e de n t i al or N on-P r e c e de n t i al : D ocke t 93-2019

F o l lo w thi s a nd a dd it ion al w ork s a t : h tt p://d i g it alc ommon s .l a w . v i l l a no v a . e du/thir dc ir c uit_1995

Thi s de c i sion i s br ou gh t t o y ou for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit a t V i l l a no v a U niv e r sit y S choo l of L a

w Di g it al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 1995 D e c i sion s b y a n a uthor i z e d a dmini s tr a t or of V i l l a no v a U niv e r sit y S choo l of L a

w Di g it al Re posit or y

. F or mor e infor m a t ion, p le as e c on t a ct Be n j a min

. C a rl s on@l a

w . v i l l a no v a . e du

. Re c omme nde d C it a t ion

" S e cr e t a r y of L a

bor v C ompt on " (1995). 1995 D e cisio n s . P ape r 153. h tt p://d i g it alc ommon s .l a

w . v i l l a no v a . e du/thir dc ir c uit_1995/1531 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 to4

"Second." On page 31, line 17, "Fourth" is changed to "Third." /s/ Samuel A. Alito

________________________________ Circuit Judge Dated: September 8, 1995