FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JEFFREY H. BECK, Liquidating 

Trustee of the Estates of Crown

Vantage, Inc. and Crown Paper

Company,

Appellant,

v. No. 03-15303

PACE INTERNATIONAL UNION, on  D.C. No.

behalf of member and former CV-02-01407-MHP

member participants in pension

plans sponsored by the Debtors;

EDWARD MILLER; JEFFREY D.

MACEK, on behalf of themselves

and others similarly situated,

Defendants-Appellees. 

PACE INTERNATIONAL UNION, AFL- 

CIO, CHEMICAL & ENERGY

WORKERS INTERNATIONAL UNION, on

behalf of members and former

member participants in pension No. 03-15331 plans,

Defendant-Appellant, D.C. No.  CV-02-01407-MHP

v.

OPINION JEFFREY H. BECK, Liquidating

Trustee of the Estates of Crown

Vantage, Inc. and Crown Paper

Company,

Appellee. 

14631
Appeal from the United States District Court

for the Northern District of California

Marilyn H. Patel, District Judge, Presiding

Argued and Submitted

November 4, 2004—San Francisco, California

Filed October 24, 2005

Before: Stephen Reinhardt, Richard A. Paez, and

Marsha S. Berzon, Circuit Judges.

Opinion by Judge Paez

14632 BECK v. PACE INT’L UNION
COUNSEL

Stephen A. Kroft (argued), Rodger M. Landau, Los Angeles,

California, for the appellant/cross-appellee. 

John Plotz (argued), Christian L. Raisner, Oakland, California, for the appellees/cross-appellant. 

OPINION

PAEZ, Circuit Judge: 

In the course of Chapter 11 liquidation proceedings, debtors Crown Vantage, Inc. and Crown Paper Co. (Crown)

decided to terminate Crown’s pension plans through the purchase of an annuity, rather than by merging the plans into a

multiemployer plan sponsored by PACE International Union

(PACE). Plan participants and PACE filed an adversary

action against Crown in bankruptcy court, alleging that

Crown’s directors breached their fiduciary duties under the

Employee Retirement Income Security Act of 1974 (ERISA),

as amended, 29 U.S.C. §§ 1001-1461, by failing to consider

adequately the proposed merger. The bankruptcy court agreed

and issued a preliminary injunction ordering that Crown

maintain the residual assets — approximately $5 million —

in the plan in an interest-bearing account pending a final decision on the allocation of the assets. Pursuant to the bankruptcy

court’s order, the parties submitted a joint plan for the distribution of the residual assets for the benefit of the plan participants and stipulated that the court’s ruling on the preliminary

injunction could be treated as a final ruling on the merits

BECK v. PACE INT’L UNION 14635
under Federal Rule of Civil Procedure 65(a)(2). The bankruptcy court approved the plan. 

As in the bankruptcy and district courts, Crown1 argues that

it did not breach its fiduciary duties to plan participants and

beneficiaries because merger into a multiemployer plan is an

impermissible means of terminating a pension plan under

ERISA, its implementing regulations, and the terms of the

pension plan. PACE cross-appeals the district court’s determination that it lacked standing to pursue an appeal. 

We have jurisdiction pursuant to 28 U.S.C. § 158(d). We

hold that under ERISA and its regulations, merger into a multiemployer plan is not a prohibited means of terminating a

pension plan, and that the bankruptcy court did not err in concluding that Crown breached its fiduciary duties by failing to

consider thoroughly PACE’s proposal and discharge its duties

“solely in the interest of the participants and beneficiaries.” 29

U.S.C. § 1104(a)(1). With respect to PACE’s cross-appeal,

we vacate the district court’s judgment on that issue with

directions to remand to the bankruptcy court for further proceedings.2

I. Facts and Procedural History 

Crown Vantage, Inc. was the parent company of Crown

Paper Co., which operated seven paper mills in the Eastern

United States and employed 2600 workers. The employees

were covered by collective bargaining agreements with

PACE. Members of Crown’s board of directors were also the

trustees for its eighteen pension plans. 

1Appellant Jeffrey H. Beck is the liquidating trustee of the Crown

estates. Because the actions of Crown’s board of directors, the trustees of

the pension plans, are the focus of this action, however, we refer to Crown

as the appellant. 

2

In a separate memorandum disposition filed today, we address the remedy imposed by the bankruptcy court. 

14636 BECK v. PACE INT’L UNION
In March of 2000, Crown filed for Chapter 11 bankruptcy

and began liquidating its assets. See generally In re Crown

Vantage, Inc., 421 F.3d 963, 967-68 (9th Cir. 2005). The Pension Benefit Guarantee Corporation (PBGC) filed proofs of

claims totaling millions of dollars for the liability it would

have been forced to assume if it had taken over Crown’s pension plans. The bankruptcy court viewed PBGC’s proofs of

claims as a “stumbling block” to Chapter 11 plan confirmation. In July of 2001, Crown’s board began to obtain quotes

for the purchase of an annuity as a means of effecting a “standard termination” of the plans under Section 4041(b) of

ERISA, 29 U.S.C. § 1341(b). 

During the summer of 2001, PACE proposed a merger of

the seventeen pension plans that covered Crown’s hourly

employees into the PACE Industrial Union Management Pension Fund (PIUMPF), a Taft-Hartley Act multiemployer pension fund founded in 1963 for PACE union members. PACE

preferred this option because PIUMPF in prior years had paid

a thirteenth monthly check during the year, and thus merger

offered the possibility that retirees might receive more than

the minimum benefits. Additionally, PACE preferred the proposed merger because PIUMPF provided an established dispute resolution program for plan participants. 

Crown’s counsel met with a PACE representative in

August of 2001 to discuss the merger, and expressed the view

that Crown wanted to be assured of the financial stability of

PIUMPF and the legality of the merger. The parties agreed

that their attorneys and actuaries would further investigate the

PIUMPF merger. On September 26, 2001, PIUMPF’s actuary

reported that the merger was feasible, and Crown’s counsel

requested more information from PIUMPF’s counsel. That

same day, Crown’s board of directors met and reviewed bids

for annuities, and learned that a “reversion” to the company

of remaining assets in the plan would be possible if it terminated twelve of the pension plans through the purchase of an

BECK v. PACE INT’L UNION 14637
annuity.3

 The board also learned about the proposed PIUMPF

merger, and agreed to compare it to the annuity options once

it received final bids. 

On October 1, 2001, PIUMPF’s counsel sent Crown’s

counsel a draft merger agreement. On October 4, Crown’s

counsel stated at a hearing in the bankruptcy court that it was

looking into the possibility of a merger with PIUMPF. At this

hearing, counsel represented that “before an action is taken as

to these pension plans,” the court would be notified. On October 8, PIUMPF’s counsel sent Crown more information about

the financial stability and legality of the merger. 

Crown’s board met on October 9, 2001, to review the final

annuity bids with the understanding that they would expire

within twenty-four hours. The bankruptcy court determined

that the board did not seek a waiver of this deadline. At the

time of the meeting, the board faced a forty-five day timetable

for dissolving Crown, and Crown had $10,000 or less in the

bank. The board did not consider the PIUMPF merger at this

meeting, and it did not ask its actuary to analyze the proposed

merger. Minutes of the October 9 meeting reflect that PBGC

had agreed to release Crown under an annuitization of the

pension plans, but not in a merger. The bankruptcy court

found that the board did not pursue a release from PBGC for

a merger with PIUMPF. The board decided to purchase an

annuity as a means of terminating the twelve merged pension

plans (the Merged Plan) through Hartford Life Insurance

Company, on the basis of Hartford’s financial stability and a

projected maximum reversion of nearly $5 million to Crown.

Crown deposited over $84 million with Hartford the next day.

3The twelve plans were identified because they were “overfunded” and

would therefore yield a surplus after the annuity had been purchased.

Crown merged these twelve plans into one “Merged Plan” in order to purchase the annuity. The remaining five pension plans covering hourly

workers were to remain the responsibility of Georgia Pacific Company,

the successor to a prior plan sponsor. 

14638 BECK v. PACE INT’L UNION
Appellees Edward Miller and Jeffrey Macek, on behalf of

themselves and other similarly situated plan participants, and

PACE, on behalf of its members and former member plan

participants, filed suit in bankruptcy court. The plaintiffs

alleged that Crown breached its fiduciary duties under ERISA

by failing to “perform a diligent investigation into the

PIUMPF [merger] proposal,” and by failing to discharge its

duties “solely in the interest of the participants and beneficiaries.” After rendering oral findings of facts and conclusions of

law, the bankruptcy court granted a preliminary injunction,

ordering all cash assets remaining in the pension plan to be

placed in an interest-bearing account, and that no reversion of

assets to Crown could occur, pending the court’s final decision on the allocation of the assets. The bankruptcy court also

ordered the parties to report on the feasibility of distributing

the reversion “for the benefit of the pension plan participants.” Although the plaintiffs asked the bankruptcy court to

void the annuity transaction with Hartford, the court declined

to do so and allowed Crown to complete the termination process. 

The parties stipulated to having the bankruptcy court’s

findings of fact and conclusions of law deemed a final ruling

on the merits, and submitted a joint report setting forth a procedure for distribution of the residual assets for the benefit of

the plan participants. The bankruptcy court entered an order

approving the distribution of the assets to the plan participants. As noted, the court left the preliminary injunction in

effect pending implementation of the distribution. Although

no final judgment was entered, in light of the parties’ stipulation we treat the district’s order granting the preliminary

injunction as the final judgment. 

On appeal to the district court, Crown argued that neither

appellees Miller and Macek nor PACE had standing and that

it was neither subject to fiduciary obligations in terminating

the plan, nor did it breach such duties. The district court held

that appellees Miller and Macek had standing as plan particiBECK v. PACE INT’L UNION 14639
pants to enforce Crown’s fiduciary obligations, but dismissed

PACE for lack of standing, because it was not an enumerated

party under ERISA.4 The district court affirmed the bankruptcy court’s determination that Crown breached its fiduciary duties as well as the preliminary injunction granted by

the bankruptcy court. 

II. Breach of Fiduciary Duties under ERISA 

The parties do not dispute that the decision to terminate a

pension plan is a business decision not subject to ERISA’s

fiduciary obligations, see Cunha v. Ward Foods, Inc., 804

F.2d 1418, 1432-33 (9th Cir. 1986), and Amalgamated Clothing and Textile Workers Union, AFL-CIO v. Murdock, 861

F.2d 1406, 1419 (9th Cir. 1988), whereas the implementation

of a decision to terminate is discretionary in nature and subject to ERISA’s fiduciary obligations. See Waller v. Blue

Cross of Cal., 32 F.3d 1337, 1342-44 (9th Cir. 1994). Crown

does not challenge the bankruptcy court’s finding that it failed

fully to investigate the PIUMPF merger option. Instead,

Crown argues that both ERISA and the terms of the pension

plan prohibit merger into a multiemployer plan as a means of

termination; thus its decision to terminate, rather than to

merge, was discretionary and not subject to fiduciary obligations. The merits of Miller and Macek’s claim that Crown

breached its fiduciary duties therefore turn on whether merger

into a multiemployer plan is a permissible means of implementing a decision to terminate. 

A. Standard of Review 

We review the bankruptcy court’s decision directly and

therefore review de novo the district court’s decision on

appeal from the bankruptcy court. Cellular 101, Inc. v. Chan4Crown now concedes that appellees Miller and Macek have standing.

We address the issue of cross-appellant PACE’s standing in Section III of

this opinion. 

14640 BECK v. PACE INT’L UNION
nel Communications, Inc. (In re Cellular 101, Inc.), 377 F.3d

1092, 1095 (9th Cir. 2004); Neilson v. United States (In re

Olshan), 356 F.3d 1078, 1083 (9th Cir. 2004). We apply the

same standard of review applied by the district court, and

review the bankruptcy court’s legal conclusions de novo, and

its findings of fact for clear error. Olshan, 356 F.3d at 1083.

B. Permissibility of Merger under the Terms of the

Pension Plan 

[1] Before the district court and in this appeal, Crown has

argued that the terms of its pension plan do not permit a

merger as a means of termination. Crown failed to raise this

argument before the bankruptcy court. As a general rule, we

do not consider issues argued for the first time on appeal. Citibank (S.D.), W.A. v. Eashai (In re Eashai), 87 F.3d 1082,

1085 n.2 (9th Cir. 1996). This rule applies to appeals from

bankruptcy proceedings. In re Southland Supply, Inc., 657

F.2d 1076, 1079 (9th Cir. 1981). We conclude that none of

our recognized exceptions to this rule applies to this case. Cf.

Cold Mountain v. Garber, 375 F.3d 884, 891 (9th Cir. 2004);

Eashai, 87 F.3d at 1085 n.2. We therefore deem this argument

waived. 

C. Permissibility of Merger as a Means of

Termination under ERISA 

The bankruptcy court did not explicitly determine whether

ERISA permits merger into a multiemployer plan as a means

of terminating a single employer plan. Instead, the court

assumed that this was permissible, finding “[t]he decision

whether to annuitize the plans or merge them into PIUMPF

was . . . a discretionary act” subject to fiduciary duties.

Because the bankruptcy court’s interpretation of ERISA is a

question of law, our review is de novo. Mathews v. Chevron

Corp., 362 F.3d 1172, 1178 (9th Cir. 2004); Olshan, 356 F.3d

at 1083. 

BECK v. PACE INT’L UNION 14641
[2] As Crown argues, ERISA § 4041(a)(1), 29 U.S.C.

§ 1341(a)(1), provides that the exclusive means of terminating

a single-employer pension plan are: 1) institution of termination proceedings by the corporation under 29 U.S.C. § 1342;

2) standard termination under § 1341(b); and 3) distress termination under § 1341(c). The termination effected in this

case was a standard termination. A standard termination

requires that, “when the final distribution of assets occurs, the

plan is sufficient for benefit liabilities.” 29 U.S.C.

§ 1341(b)(1)(D). So long as the PBGC does not issue a notice

of noncompliance, the plan administrator must distribute the

assets. Id. § 1341(b)(2)(D); 29 C.F.R. §§ 4041.21(a),

4041.28(a), (c). 

[3] ERISA § 4041(b)(3), 29 U.S.C. § 1341(b)(3), sets forth

the method for “final distribution of assets” for standard terminations. The assets are to be allocated according to the priorities listed in 29 U.S.C. § 1344. Next, the statutory section

at issue in this case states:

In distributing such assets, the plan administrator

shall— 

(i) purchase irrevocable commitments from an

insurer to provide all benefit liabilities under the

plan, or

(ii) in accordance with the provisions of the plan

and any applicable regulations, otherwise fully provide all benefit liabilities under the plan.

§ 1341(b)(3)(A) (emphasis added). Thus, ERISA explicitly

provides for alternative means of terminating a pension plan.

The implementing regulations are consistent:

The plan administrator must, in accordance with all

applicable requirements under the Code and ERISA,

distribute plan assets in satisfaction of all plan bene14642 BECK v. PACE INT’L UNION
fits by purchase of an irrevocable commitment from

an insurer or in another permitted form. 

29 C.F.R. § 4041.28(c)(1) (emphasis added). Thus, the purchase of an irrevocable commitment from an insurer is not a

requirement; other methods of termination are permitted as

long as they are sufficient to cover plan liabilities. 

[4] Crown emphasizes that ERISA § 4041, 29 U.S.C.

§ 1341, and ERISA § 4232, 29 U.S.C. § 1412, which controls

transfers between multiemployer and single-employer plans,

are two “wholly separate sections of the statute,” neither of

which expressly permits mergers as a means of termination.

Yet, as the district court persuasively reasoned, both 29

U.S.C. §§ 1341 and 1412 are included within ERISA Title IV,

which covers the topic of “Plan Termination Insurance.” Section 1412 falls under Subtitle E of Title IV, “Special Provisions for Multiemployer Plans.” It would have been logical

for Congress to place § 1412 within Title IV of ERISA

because, as appellees Miller and Macek argue, one practical

effect of a merger or complete transfer is that at least one pension plan will cease to exist. 

[5] Crown cites Brotherhood of Railroad Trainmen v. Baltimore & Ohio Railroad Co., 331 U.S. 519, 528-29 (1947),

and Scarborough v. Office of Personnel Management, 723

F.2d 801, 811 (11th Cir. 1984), for the proposition that a statute’s titles and headings cannot “limit the plain meaning of

the text.” Those cases, however, dealt with unambiguous statutory language. By contrast, where the statutory language is

ambiguous, titles and headings may be used to clarify the

meaning of statutory text. See Natural Res. Def. Council v.

EPA, 915 F.2d 1314, 1321 (9th Cir. 1990). Here, the statutory

language is unclear: whether Congress intended to permit

mergers into multiemployer plans as a means of termination

under 29 U.S.C. § 1341(b)(3)(A) is uncertain. Consideration

of the placement of titles and headings clarifies the statutory

BECK v. PACE INT’L UNION 14643
text and supports the conclusion that mergers are a permissible means of termination. 

Crown also argues that 29 U.S.C. § 1412(f)(3), which

involves transfers between or mergers of multiemployer and

single-employer plans, supports its argument that terminations

are distinct from transfers between single and multiemployer

plans. Section 1412(f)(3) states: 

No transfer to which this section applies, in connection with a termination described in section

1341a(a)(2) of this title, shall be effective unless the

transfer meets such requirements as may be established by the corporation to prevent an increase in

the risk of loss to the corporation. 

Section 1341a refers to terminations of multiemployer plans.

The text of § 1412(f)(3) implies that a transfer between a single and multiemployer plan can be “in connection with a termination” (albeit the termination of a multiemployer plan).

Thus, § 1412(f)(3) fails to support Crown’s argument that termination and merger into a multiemployer plan are mutuallyexclusive actions. 

Finally, Crown argues that a merger into a multiemployer

plan does not constitute a “distribution” under 29 U.S.C.

§ 1341(b)(3). The terms “distribution” or “distribute” are not

expressly defined in either ERISA or its implementing regulations. See 29 U.S.C. §§ 1002, 1301; 29 C.F.R. § 4041.2. Dictionary definitions of “distribute” include: “to divide among

several or many: deal out; apportion esp. to members of a

group or over a period of time: allot”; “dispense, administer”;

and “to give out or deliver esp. to the members of a group.”

WEBSTER’S THIRD NEW INT’L DICTIONARY (1993). These definitions do not support the exclusion of mergers into multiemployer plans as a means of termination. As appellees Miller

and Macek argue, the purchase of irrevocable commitments

from an insurer to provide all benefit liabilities under the plan,

14644 BECK v. PACE INT’L UNION
pursuant to 29 U.S.C. § 1341(b)(3), such as the annuity to be

provided by Hartford Life in this case, does not appear to satisfy the distribution requirement any more than would a

merger into a multiemployer plan. Both scenarios would

involve a series of payments to plan beneficiaries over time,

rather than a lump-sum payment at the time of termination. 

[5] In sum, the text of ERISA § 4041 and its implementing

regulations is ambiguous at best and neither explicitly nor

implicitly prohibits merger into a multiemployer plan as a

means of termination of a pension plan. As the district court

determined, § 1341(b)(3) provides for alternative means of

termination, so long as they are consistent with the plan provisions, applicable regulations and “otherwise fully provide all

benefit liabilities under the plan.” We hold that neither the

statute nor its implementing regulations preclude mergers into

multiemployer plans as a method of providing such benefit

liabilities. We therefore affirm the district court’s ruling on

this issue. 

D. Merits of Breach of Fiduciary Duty Claim 

Applying the test for a preliminary injunction, the bankruptcy court found serious questions as to whether Crown

breached its fiduciary duties to plan participants by failing

fully to investigate the proposed PIUMPF merger. As previously noted, because the parties stipulated to having the bankruptcy court’s findings of fact and conclusions of law deemed

a final ruling on the merits, we review the merits determination de novo. Stratosphere Litig. L.L.C. v. Grand Casinos,

Inc., 298 F.3d 1137, 1142 (9th Cir. 2002). Crown has never

argued that it fairly considered the PIUMPF proposal, instead

staking its defense on the argument that merger into a multiemployer plan is an impermissible means of termination. 

[6] ERISA requires fiduciaries to discharge their duties

“solely in the interest of the participants and beneficiaries”

and for the exclusive purposes of “(i) providing benefits to

BECK v. PACE INT’L UNION 14645
participants and their beneficiaries; and (ii) defraying reasonable expenses of administering the plan.” 29 U.S.C.

§ 1104(a)(1)(A). ERISA’s “exclusive benefit” rule provides

that, except in certain circumstances,

the assets of a plan shall never inure to the benefit

of any employer and shall be held for the exclusive

purposes of providing benefits to participants in the

plan and their beneficiaries and defraying reasonable

expenses of administering the plan. 

§ 1103(c)(1); Resolution Trust Corp. v. Fin. Insts. Ret. Fund,

71 F.3d 1553, 1556-58 (10th Cir. 1995). Corporate officers

and directors often “serve in a dual fiduciary capacity,” with

simultaneous duties running both to pensioners, in their

capacity as plan trustees, and to shareholders, as directors of

the corporation. See Friend v. Sanwa Bank Cal., 35 F.3d 466,

468-69 (9th Cir. 1994); Donovan v. Bierwith, 680 F.2d 263,

271 (2d Cir. 1982). Conflicts of interest created by these dual

roles can lead to violations of ERISA’s loyalty requirements.

Pilkington PLC v. Perelman, 72 F.3d 1396, 1401-02 (9th Cir.

1995). We have stressed that where such conflicts arise, “decisions must be made with an eye single to the interests of the

participants and beneficiaries.” Id. at 1402 (quoting Donovan,

680 F.2d at 271). Furthermore, “fiduciaries may need to step

aside, at least temporarily, from the management of assets

where they face potentially conflicting interests.” Id. at 1402

(quoting Leigh v. Engle, 727 F.2d 113, 125 (7th Cir. 1984));

see also Waller, 32 F.3d at 1341-44 (holding that plaintiff

stated an ERISA claim for breach of fiduciary duty where it

alleged fiduciary imprudently based the choice of an annuity

provider on the size of a potential reversion). 

The bankruptcy court found “that there are serious questions whether the conduct of Crown’s officers and Board of

Directors was directed more at fulfilling their fiduciary obligations to the creditors of an insolvent corporation than at ful14646 BECK v. PACE INT’L UNION
filling their fiduciary obligations to the corporation’s

pensioners.” The court applied the standard set forth in Leigh:

Where it might be possible to question the fiduciaries’ loyalty, they are obliged at a minimum to

engage in an intensive and scrupulous independent

investigation of their options to insure that they act

in the best interests of the plan beneficiaries. 

727 F.2d at 125-26. The bankruptcy court determined that,

whether motivated by the possibility of a reversion, Crown’s

“desperate financial circumstances,” or the certainty of

obtaining a release from the PBGC under an annuity option,

Crown failed to make the requisite “intensive and scrupulous”

investigation of investment options, including the proposed

PIUMPF merger. 

[7] Crown’s fiduciary obligation was to assure the payment

of the promised defined benefits with as little risk of nonpayment as possible, not to use the fund’s total assets to the beneficiaries’ optimum benefit. See generally Hughes Aircraft Co.

v. Jacobson, 525 U.S. 432, 440 (1999) (“Since a decline in the

value of a plan’s assets does not alter accrued benefits, members similarly have no entitlement to share in a plan’s surplus

. . . .”); cf. Collins v. Pension & Ins. Comm. of the S. Cal.

Rock Prods. & Ready Mixed Concrete Ass’ns, 144 F.3d 1279,

1282 (9th Cir. 1998) (“ERISA does not create an exclusive

duty to maximize pecuniary benefits.”). The bankruptcy court

alluded to this limited obligation in stating that “[h]ad there

been no prospect of a merger with another plan, then the

Board’s course of conduct almost surely would have passed

muster.” As the ERISA statute provides for reversions, see 29

U.S.C. § 1344, it can be permissible, depending on the governing plan’s terms, for trustees to choose a termination

option that provides for a reversion as long as the process

employed is for the exclusive purpose of acting in the beneficiaries’ interest. In making a decision among possible termination schemes, however, the reversion should not be taken

BECK v. PACE INT’L UNION 14647
into account, even to a minor extent, pursuant to the “eye single” principle of fiduciary responsibility to the beneficiaries.

See Pilkington, 72 F.3d at 1401-02. 

In Pilkington, plaintiffs alleged that pension trustees

breached their fiduciary duty by choosing an annuity provider

on the basis of the size of the potential reversion. Id. at 1401-

02. Defendants chose the lowest bidder, which resulted in the

largest reversion, and the annuity provider defaulted shortly

thereafter. Id. at 1397-98. In response to the defendants’ argument that they chose an AAA or A+ rated annuity, we stated

that “a mere ratings scan” does not satisfy a pension trustee’s

fiduciary duties. Id. at 1401. On the basis of “strong evidence

that reversion maximization figured prominently” in the

choice and that the trustees’ “motivation may have deviated

from that mandated by ERISA,” we reversed a grant of summary judgment in favor of defendant trustees. Id. 

As in Pilkington, the possibility of a reversion appears to

have featured in the minds of the Crown trustees. The bankruptcy court, relying on Pilkington, stated that “the prospect

of a reversion” was one of several possible factors that, individually or combined, “strongly suggests that the officers and

directors of Crown did not make the ‘intensive and scrupulous

investigation of the plan’s investment options’ that the circumstances required particularly given their dual fiduciary

capacity.” The court concluded that “once the merger option

was raised, the Board had a fiduciary duty to fully explore it

and determine which option was truly in the beneficiaries’

best interests. The fact that the company was out of cash and

had a timetable for plan confirmation should have played no

part in the determination. 

[8] We agree with the bankruptcy court that there is evidence that the fiduciaries’ “motivation may have deviated”

from the “eye single” focus on the interests of plan beneficiaries, as mandated by ERISA. See id. at 1401-02 (quoting Donovan, 680 F.2d at 271). The risk to fund assets resulted from

14648 BECK v. PACE INT’L UNION
Crown’s focus on an improper set of interests. See Leigh, 727

F.2d at 125 (stating that “[u]nder the section 404(a) duty of

loyalty, the central question is whether the fiduciaries acted

solely in the interests of the beneficiaries and for the exclusive

purpose of providing them with benefits.”). The bankruptcy

court found evidence of divided loyalties and that Crown

failed adequately to discharge its duties through thorough

investigation. We conclude that the bankruptcy court did not

err in determining that Crown breached its fiduciary duties by

failing exclusively to prioritize the interests of plan participants and beneficiaries and failing to make the “intensive and

scrupulous investigation of the plan’s investment options.”

See Leigh, 727 F.2d at 125-26. We therefore affirm the district court’s determination on this issue. 

III. Standing 

The district court held that PACE lacked standing on the

ground that ERISA § 502(a), 29 U.S.C. § 1132(a), confers

exclusive enforcement authority on plan participants, beneficiaries, fiduciaries, employers, states, and the Secretary of

Labor. It further held that PACE lacked standing under

ERISA § 4070, 29 U.S.C. § 1370(a), which confers standing

on unions to enforce the termination procedures of ERISA,

because its complaint did not allege that Crown violated the

termination provisions of ERISA § 4041, 29 U.S.C. § 1341.5

We review the district court’s determination of standing de

novo. Porter v. Jones, 319 F.3d 483, 489 (9th Cir. 2003). 

5Although Crown did not raise the issue of PACE’s standing before the

bankruptcy court, the district court addressed the issue on jurisdictional

grounds, citing Pershing Park Villas Homeowners Association v. United

Pacific Insurance Company, 219 F.3d 895, 899 (9th Cir. 2000) (noting

that “[b]ecause issues of constitutional standing are jurisdictional, they

must be addressed whenever raised,” whereas “objections to nonconstitutional standing not properly raised before the district court” may be

waived), and Curtis v. Nevada Bonding Corporation, 53 F.3d 1023, 1027

(9th Cir. 1995) (reiterating that “a plaintiff’s standing under [ ]

§ 1132(a)(1) is a prerequisite to ERISA jurisdiction.”). 

BECK v. PACE INT’L UNION 14649
On cross-appeal, PACE argues that, in light of liberal

notice pleading rules, the district court should have construed

its complaint broadly to include allegations that Crown violated the termination provisions of ERISA § 4041. Alternatively, PACE requests leave to amend its complaint to include

such allegations. 

Crown does not contest the district court’s determination

that plaintiffs Miller and Macek have standing. Crown contends that we need not address whether PACE has standing

because the appeal will proceed regardless of whether PACE

is a party. See Sys. Council EM-3 v. AT&T Corp., 159 F.3d

1376, 1378-79 (D.C. Cir. 1998) (declining to decide whether

union had standing to bring ERISA claims in light of plan

beneficiaries’ standing) (citing Craig v. Boren, 429 U.S. 190,

192-93 (1976)). As an entity that collectively bargains for

pension rights, however, PACE has institutional resources and

experience to enforce ERISA, and it may be in a better position to protect the rights of all of its members. We conclude

that, despite the fact that this litigation may proceed on the

basis of Miller and Macek’s standing, the presence or absence

of PACE as a party remains a relevant issue. 

[9] Pursuant to ERISA § 4070, 29 U.S.C. § 1370, unions

have standing to seek equitable relief for violations of ERISA

§§ 4041, 4042, 4062-64, and 4069, 29 U.S.C. §§ 1341, 1342,

1362-64, 1369, which relate to termination procedures. The

district court held that because PACE’s complaint failed to

state claims under ERISA §§ 4041, 4042, 4062-64, or 4069

for improper termination by Crown, and because the issue in

this action is whether Crown breached its fiduciary duties,

PACE did not have standing under § 4070. 

[10] PACE’s first amended complaint did not explicitly

allege violations of the termination procedures. Instead, it

focused on Crown’s breaches of fiduciary duty in failing adequately to consider the PIUMPF merger. PACE argues that

there is a fiduciary duty overlay that permeates ERISA, and

14650 BECK v. PACE INT’L UNION
thus § 4070 provides a union with standing to enforce a

breach of such duties in the context of plan termination.

PACE requests that we grant it leave to amend its complaint

to allege violations of ERISA’s termination procedures, thus

bringing it within the grant of standing for unions in § 4070.

Because both parties should have the opportunity to address

this issue, we remand to the bankruptcy court so that it may

consider in the first instance PACE’s request to file an

amended complaint and its new theory of standing. See

United Union of Roofers, Waterproofers and Allied Trades

No. 40 v. Ins. Corp. of Am., 919 F.2d 1398, 1402 (9th Cir.

1990) (remanding for determination of union’s new theory of

standing). 

IV. Conclusion

[11] We hold that merger into a multiemployer plan is a

permissible means of terminating a pension plan under

ERISA. We further hold that the bankruptcy court did not err

in concluding that the Crown board breached its fiduciary

duties by failing adequately to consider the PIUMPF merger

and in order to prioritize the interests of plan participants and

beneficiaries. We therefore affirm the district court’s ruling

on these issues. Finally, we vacate the district court’s determination that PACE lacks standing, grant PACE’s request for

leave to amend its complaint to better articulate the basis for

its standing, and remand the standing issue to the district court

with instructions to remand to the bankruptcy court.6

6The appellees/cross-appellant have filed two requests for judicial

notice in this court. In the first request, filed on February 16, 2004,

appellees/cross-appellant ask that we take judicial notice of Crown’s

motion for order authorizing the Liquidating Trustee to pay an adjustment

premium to the Hartford Life Insurance Company, the bankruptcy court’s

order granting this motion, and appellees/cross-appellant’s notice of

appeal. In the second request, filed on June 7, 2004, appellees/crossappellant request that we take judicial notice of PACE’s First Amended

Petition to Compel Arbitration and Complaint for Breach of the Terms of

Collective Bargaining Agreements, filed in the bankruptcy court on OctoBECK v. PACE INT’L UNION 14651
AFFIRMED in part; VACATED in part; and

REMANDED.

ber 2, 2002, and the transcript of a January 22, 2003 petition to compel

arbitration. Appellees/cross-appellant have not adequately explained why

these documents are relevant or on what grounds this court should take

judicial notice of them. We therefore deny these requests. 

14652 BECK v. PACE INT’L UNION