NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION File Na me: 08a0600n.06 Filed: Oc tober 6, 2008 Nos. 07-3102, 07-3211
UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT

NAT A LI E A. HUGHES, du ly-appoi nted rep re sentative of the Estate of Martin J. Hugh es, Jr., P laintif f-App ellant and Cross-Appellee,
v. K IM BER LY A. ZURZ , D ir e c to r , Oh io De par tm e nt of C om m e r c e ; JO HN B. REARDON, Sup erinte ndent, Divisi on of F in a nc ia l I ns t it ut io ns ; K EN N ET H A . ROBERTS , Act ing De puty S uperintendent f or Cred i t U n i o n s ; A ME RI CA N M UT UA L S H ARE INSURANCE CORP ORATION, as purported Co nse r va to r for th e Uni te d Te le phone Cr e dit Union I nc., Def en d an ts- App e lle e s a nd C r os sApp e lla nt s. / ON AP P EA L F RO M THE U NI TED STA TES D ISTRIC T C OU RT F OR THE SOU THER

N D ISTRIC T OF OHI O

BEF OR E: DA UG HTR EY , C LA Y, and M c KEA G UE , C ir c uitJudg e s. CLAY, Circ uit Jud ge. Pla int if f Nata lie A. Hu g he s, re pr e se ntativ e of the e state of Mart in J . Hug hes, J r., appea ls the district court’s De cembe r 22, 2006 judg ment g ranting summary judgme ntNos. 07-3102, 07-3211

Doug Whit e and F . Scott O’Donnell have been repla ced as parties in this suit by the cur rent 1 Direc tor of the Ohio Depa rtment of Commerce, Kimberly A. Z urz, a nd the cur rent Superintende nt of the Division of F inancial Institut ions, J ohn B. Rea rdon. Hug hes subseque ntly

died, and h is widow and the a dminist rator of his estate, Natalie A. 2 Hu g he s, re pla c e d Ca

rl F . H ug he s a s th e pla int if f i n th is s uit
. 2 to Def endants American Mutual Share I nsuranc e Corporation, I nc. (“ ASI ”), D oug Whit e, Direc tor 1 of the Ohio De partment of Commerc e, F . Scott O’Donnell, Su p er i n t endent of the Division of F ina nc ia l I ns tit

uti on s, and Ke nn e th A. Rob e rt s, Ac tin g De pu ty Sup e ri nte nd e nt fo r Cr e di t U ni on s. Plaintiff c laimed that Def

endants violated the Employ ment Retirement I ncome Sec urity Act of 1974 (“ERI SA”), 29 U.S.C
. §§ 1001-1381, and the Due Proc ess Clause of the United States Constit ution by improperly

confiscating be nefits due Martin J . Hug hes, Jr. pursuant to an ERI SA benef its plan. Def endants a ppeal the district court’s g rant of Plaintiff’ s motion for summary judgme nt and motion to dismi ss ASI ’s counter claim a l l eging fra ud, misappropriation of f unds and bre ach of

fiduciar y du tie s. F or

the re a so ns state d b e low , th is C ourt AF F IR M S the district c ourt’s gr an t o f sum mary judgme nt for De fenda

nts on Pl aintiff’s c laims and DI SM ISSES AS M OOT ASI ’s app ea l o f t he dis tr ic t c ourt ’s dis po sit ion of its c ounte rc la im.

BACK GR OUND A. P roce dural Hi story On J anuar

y 24, 2005, Carl F. Hug hes, the son and leg al g uardia n of Martin J
. Hu gh es , J r. (“H ug hes”) , filed a c omplaint in United St ates District Court for the Southern District of Ohio on Hug hes’ be half. The c omplaint w as b ro u gh t ag ainst Ohio officia ls Doug Whit e, Dire ctor of the 2Nos. 07-3102, 07-3211

3 Ohio Depa

rtment of Commerce , F. Scott O’D onnell, Superintendent of the Division of Financ ial I ns ti tut ion s, and

Ke nn e th A . Ro be rt s, Ac tin g De pu ty Sup e ri nte nd e nt f

or Cr e dit Un ion s ( “ State Def endants” ). After filing an amende d complaint on Fe bruar y 25, 2005, Plaintiff f

ile d a s econd amende d complaint on April 6, 2005, adding as a de fenda nt America

n Mutual Share Insura nce Corporation, Inc. (“ ASI ”), the appointed conse rvator f or t h e United Tele phone Credit Union, Inc. (“U TCU”). Count I of the se c on d a me nd e d c omp la int re qu e ste d e qu ita ble re lie f a s a

re su lt o f t

he State De fe nd ants ’ v iol a tio n o f H ug he s’ du e pr oc e ss r ig hts by un lawf ull y con fi sc a tin g be ne fi ts d ue to Hug hes for

his y ear s of service as a director and manag er of UTCU. Count I I of t he second amende d complaint alleg ed that D ef en d an t s v i o l at edt h e E mp l o y m en tR et i re m en tI n co m e S ec u ri t y Act of 1974 (“ERI SA”), 2 9 U.S.C. §§ 1001-1381, by improperly

confiscating the be nefits pay able to Hug hes pursuant to a

n ERI SA-cove red employ ee benef its plan. Count I I I alleg ed that De fenda nts breac hed their fiducia

ry duties under ERI SA. Th e State De fe nd ants fi le d a n ans we r on Ap ri l 9, 20 05 , and ASI fi le d a n a ns we r a lon g wi th its c ounterc laim on April 26, 2005. ASI ’s counter claim alleg ed that Hug hes had committed fraud, misappropriate d fun ds, and bre ache d fiduciar y duties as the dire ctor a

nd secr etar

y /treasur er of UTCU. Plaintiff moved for pa rtial summary

judgme nt on A SI ’s counter claim on May 3, 2005, and
mov e d to dis mis s A SI ’s c ounte rc la im o n M ay 13 , 2 00 5. Pla int if

f ar g ue d tha t ASI wa s not l awf ull y appointed as conser

vator and thus la cked standing to bring claims on UTCU’s be half. On Septe mber 23 , 200 5, the dis tr ic t court g ra nte d Pl a int if

f’ s mo tio n f

or pa rt ia l summa

ry jud g me nt a

nd mot ion to dis mis s A SI ’s c ounte rc la im.Nos. 07-3102, 07-3211

4 On April 28, 2006, De fenda nts filed a joint motion for summary judgme nt on Counts I Iand I I Iof Plaintiff’s sec ond amende d complaint. The State De fenda nts subsequently

filed a motion for summary judgme nt on Count I of Plaintiff’s sec ond amende d complaint. I n response , Plaintiff filed
a motion for partial summary judgme nt r eg ardingDef endants’ a ffirmative defe nses. On De cembe r 2 2 , 2 0 0 6 , t h e d i s t r i c tc o u rt g r an t e d D e f e n d an t s ’ m o t i o nf

o r s u m m ar y j u d g m e n t o nC o u n t s II a

n d III
and the State De fe nd ants ’ m oti on fo r s umm ary

jud g me nt o n Co un t I . T he dis tr ic t c ourt a lso dismiss ed P laintiff’s mot ion for par tial summary

judgme nt as moot. On J anuar y 19, 2007, Plaintiff filed a timely

notice of a

ppeal f rom the district court’ s g rant of summar y judgme nt, and on Fe bruar y 2, 2007, Def

endants filed a

joint noti ce of cross-a

ppeal from the district court’s dismissal and g rant of su mma ry jud g me nt o n A SI ’s c ounte rc la im a nd fr om t he dis tr ic t c ourt ’s fi na l ju dg me nt.

B. Sub stantive F acts Hug hes wa s employ ed by the Communications W orker s of America (“CWA”) uni on from th e 1 9 5 0 s u n ti l 1 9 8 7
. D u r in g h is CW A e mp lo y me n t, H u g h e s h e lp e d

f o u n d UTCU f o r CW A employ ees. F rom 1957 to 1987, Hug hes ser ved as a member of

the boar d of di re ct o rs an d as t he
secr etar y /treasur er of

UTCU on an unpa id voluntary basis. Hug hes also ser

ved as the Manag er or Chief Executive Off

icer of UTCU. Hu g he s’ Com

pe ns a tio n a

nd B e ne fi ts Be g inning in 1987, UTCU’ s board of d i re ct ors consider ed pay ing H ug hes a sa lary . On November

28, 1987, the minutes of a boa rd of dire ctors mee ting r efle ct the p as s age of a motion
re g ard ingHu g he s:Nos. 07-3102, 07-3211

I n 1987, Hug hes would have ear ned $74,784 if he had continued working as a CW A Vice

3 Pr e sid e nt. The a ccr ued bene fits liabilit y was li sted in UTCU’s financial re cords a s “Disability I ns. & 4 Other” and later

as “A ccr ued B enef

its.” For the y ear s for which liability for de fer red c ompensation purportedly

was a ccr ued, the a

mount of this li ability

was a s follows: 1989-$109,306.79, 1990- $233,067.28, 1991-$283,681.21, 1992- $284,761.86, 1993-$288,762.81, 1994- $284,390.60, 1995- $283,289.17, 1996-$280,000. F rom 1996 to J anuar y 2002, the accrue d benef

its li ability

rema ined constant at $280,000. 5 Mo tio n Ca

rr ied : To a

pp ro ve the sa lary

of Mart in J. H ug he s a s an e mpl oy e e a t hi s c ur re nt p ay le ve l. (J.A. 572.) Carl Hug hes, a me mber of the board of direc tors when the 1987 resolution was passe d, g a ve de po sit ion

te sti mony

tha t th e te rm “ c ur re nt p ay le ve l” c on ta ine d in

the re so lut ion

re fe rr e d to Hug hes’ pa

y level as a Vice P resident of CW A. Acc ording to Carl Hughes, Hug hes deferr ed the 3

s a l ar y d u e t o h i m b e g i n n i n g i n1 9 8 7 i n s t e a d o f b e i n g p a i d

c o n t e mp o r an e o u s l y. The UTCU boa

rd of dire ctors passed another resolution reg ardingHug hes’ c ompensation on J anuar y 28, 1989: Motion Carried: To set aside earning s to pay salary and bene fits for Mar

tin J . Hug hes for se rvice s rende red on be half of this Cre dit Union and to a ny one desig nated by

the B oa rd of Di re c tor s w ho may

pe rf or m si mil ar s e rv ic e s. (J.A. 1360. ) Be gi nning in 1989, a n acc rued be nefits liability was re flec ted in UTCU’s fina ncial
re c or ds . Ro be rt

A. Sor in, a

Certif ie d Pu bli c Ac c ounta

nt w ho se rv e d o n a

su pe rv iso ry a ud it
comm itte e f

o r U T CU , te s ti f

ie d w h e n d e p o s e d th a t th e a c c r u e d b e n e f

it s li a b il it y r e f le c te d the pay ments owed Hug hes for

defe rre d salary

benef i t s ; howeve r, he a lso testified that the ac crue d be ne fi ts l ia

bil ity wa s to o s ma ll t o a c c ount f or Hu g he s’ sa lary be ingde fe rr e d e a c h y e ar. Th e Oh io 4 Division of Financ ial I nstitut ions (“DF I ”), w hich conduc ted per iodic examinations of UTCU, notedNos. 07-3102, 07-3211

6 with disapproval the pr esenc e of the acc ru ed b en ef its in UTCU’s financial r ecor ds. I n DFI ’s November

1990 examination report, the ag ency stated: There are some acco u n t s t hat ca nnot be ade quately

explained to the examiners . . . [A] pproxi mately

$200,000 is being s et aside, as a payable ( acc rued e x pense) for unspecifie d future “ employ ee be nefits.” The Boa rd of Dir ector s should determine wh a t f or m th e se be ne fi ts w ill take and so sp e c if y in t he min ute s. (J.A. 1264.) No indication of UTCU’s a ction in r esponse to this criticism i s contained in the r ecor d. Howeve r, DF I ’s September 1996 examination report stated: Th e Accr ue d B e ne fi ts a c c ount h a s n ot c ha ng e d s inc e the la st e xami natio n. Th is acc ount was set up many p er i o d s ag o for f

uture re tirement bene fits. I t has bee n revie wed a

nd approve d by

the Division of Financ ial I nstitut ions. Manag ement has no intention of increa sing this ac count in the nea r future
. (J.A. 951.) On J uly 24, 1999, UTCU passed a nother re solution reg ardingHug hes’ be nefits. The 1999 resolution aff

irmed that since N ovember 28, 1987, Hug hes “w as authorized to re ceive a sala ry from [UTCU] equal to the same salar y of a Vice President of [CW A], but such authorized salary has not been pa id. [ UTCU] established a Reserve Acc ount of Acc rued Be nefits that has been set aside for Martin J
. Hug hes.” (J.A. 574.) The r esolution further pr ovided that Hug hes would be pa id an annua l salary of $90,000, “a

nd in the event of his death or disability , pay ments of four ( 4) times his present
annua l sa lary sh ou ld be pa id his wi do w, . . .” (J.A . 5 74 .) On Au g us t 1, 19 99 , H ug he s e nte re d in to an employ

ment ag ree ment with UTCU incorporating the s a la r y p r o v isions of the 1999 resolution and inc lud ing a de a th be ne fi t of fi ve tim e s h is a

nnua l sa lary

($ 45 0, 00 0) and

fi ve we e ks of

annua l pa id
vacation, which could be pa id in cash if not taken. The 1999 ag ree ment also provided that Hug hes
was e ligible to par

ticipate in pension and r etireme nt prog rams “now or in the future .” (J.A. 581.)Nos. 07-3102, 07-3211

Roberts was e x plicitly

g iven the author ity

to appoint a conservator for UTCU by a F ebrua ry 5 21, 2003 order

of F . Scott O’Donnell, the Superintende nt of Fina ncial Institut ions. 7 DF I ’s I mpo sit ion

of a Con se rv a tor sh ip DFI took issue with Hughe s’ employ ment contra ct in its 2001 ex aminati o n of UTCU, viewing the employ

ment ag ree ment as ev i d ence of self- dealingby the boar d, which consisted of Hu g he s, his fr ie nd s, and his fa mil y me mbe rs . DFI als o foun d a c c ounti ngir re g ula ri tie s,
m i sappropr iation of cre dit union funds, and failure to comply with I nterna l Revenue Ser vice regulations. As a result, DFI enter ed into a super visory ag ree ment on J uly

18, 2002 with UTCU that require d the cr edit union to take cor rec tive actio n , i n cl uding r evising Hug hes’ e mploy ment
a g re e me nt. On July 19 , 20 02 , DF Ise nt U TCUan e xami natio n r e po rt in w hic h it

ins tr uc te d th e c re dit union to increa se the a ccr ued liabil ity

entry in its financial re ports to $450,000 to properly ref lect UTCU’s liability for Hughe s’ death benef it. On Februa

ry 24, 2003, Acting Deputy Superintendent of C redi t U ni on s, Ken net h A. Ro bert s, app oi nt ed A S I a s t he co ns erva to r fo r UT CU becau se D FI deter mined that UTCU had failed to abide by the s upervisory ag ree ment. As conser vator, ASI

was 5 order ed to take posses s i o n o f t h e business and prope rty of UTCU, e x erc ise the authority of the office rs, direc tors, and member s of UTCU, and to bring and defe nd law suits in the name of U TCU. Soon after ASI took c harg e of UTCU’s af fairs, the newly

appointed mana g er of

UTCU re moved the
a c c ru e d b e ne fi ts l ia

bil ity fr om U TCU ’s fi na

nc ia l st a te me nts . U TCU ’s a ud ito r e xpla ine d th a t: The Conservator believe s that the employ ment contra ct is unenfor cea ble due to the DFI ’s re moval action ag ainst the forme r m anag er a nd, potentially , for the br eac h of fiduciar y duties by the Credit Union’s former Boa rd of Direc tors in a

pprovi n g the employ ment contra ct. Ac co rd ingly , the Credit Union does not re cog nize any obligation under the c ontrac t and has not re corde d any liability as of May 31, 2003.Nos. 07-3102, 07-3211

8 (J.A. 1409.) Hug hes broug ht suit on beha l f o f UTCU in t he F ranklin County Court of Common P leas contesting Roberts’ author ity to appoint ASI as UTCU’s c onservator. United Tel. Credit Union v. Ro be rts , N o. 03 -C VH -02-2 278 ( F ra nk lin Cty . Ct . Co mm. Ple a s) . T his su it w a s su bs e qu e ntl y wi thd ra wn . B e c a us e of the c ha lle ng e to Rob e rt s’ a pp oin tme nt a

uth or ity , Su

pe ri nte nd e nt O ’D on ne ll issue d ano r d e r o nJu ly 2 3 , 2 0 0 3 r a ti f

y in g Ro b e rts ’ a

p p o in tm e n t o f

A SI a s U T CU ’ s c o n s e r

v ator. Natalie H ug hes broug ht another suit on behalf of UTCU in the Fr anklin County Court of Common Pleas challeng ing Roberts’ authority to appoint a conservator , and the trial court ruled in her f avor
on J uly 26, 2005. Un ite d Te l. Cre dit Un ion , I nc . v . R ob e rts , N o . 0 4

- C V H
- 0 5 5 4 3 6 ( F r an k l i nC t y. Ct. Com m. Pleas J uly

26, 2005). F ollowing this ruling , DFI termi n at ed R oberts’ or igina l order appointing A SI as UTCU’s c onservator and issued a s ec o n d o rd er t o the same e ffe ct sig ned by O’ Do nn e ll h ims e lf

. T he tr ia l c ourt ’s jud g me nt wa s la te r ov e rr ule d by the Oh io Court

of Ap pe a ls, which held that Natalie Hug hes di d not have the a uthority to bring suit on behalf of U TCU. United Te l. Cre dit Un ion , I

nc . v . R ob e rts , Nos. 05AP-827, 05AP-870, 2006 WL1174507 (Ohio Ct. App. May 4, 2006) (unpublished), aff’d , 875 N.E.2d 927 (Ohio 2007)
. Te rm inatio n o f H ug he s’ Re la tio ns hip wi th U TCUand Cla ims fo r B e ne fi ts I n an ef fort to transition out of the l eade rship of UTCU, Hug hes appr oache d Sam Riz zo about repla cing him as Manag er of UTCU. I n a memo to Roberts written on J uly 6, 2002, Riz zo recounted Hu g he s’ a sse rt ion s th a t r e tir e me nt b e ne fi ts w e re du e to h im: Mr . H ug he s h a s c re a te d a lia bil ity on the c re dit un ion s [sic ] b oo ks fo r a pp ro xima te ly $500,000. This sum is i ntended to pay him $100,000 per y ear for five (5) y ear s after he re tires. When Iasked him about this acc ount he told me t hat t hat was for the 40Nos. 07-3102, 07-3211

9 y ear s he ser

ved as a volunteer for t he credit union. By definition, he should not be pa id f or vo lun te e ri sm. (J.A. 1379.) Martin J . Hug hes, I I I , Hug hes’ son, a lso called R o b er t s and re quested that Hug hes
rec eive some por

tion of the defe rre d compensation Hughe s believed w as owe d to him as a condition f o r H u g h e s s t e p p i n g d o w nf

r o m t h e b o ar d

o f d i r e c t o r s . R o b e rt s r e f

u s e d t o c o n s i d e r

t h i s o p t i o n . In F e br ua ry and May of 20 03 , Hu g he s c on ta c te d the ASI -a pp oin te d mana g e r of

UT CU re qu e sti nghis “p ay ch ec k ” a n d

h i s “p en s i o n . ” ( J
. A. 1 3 8 6 , 1 3 9 2
. ) Hu gh es wa s t o l d t o “p u th i s co n ce rn s i nwr i t i n g, addre ssed to the conse rvator.” (J.A. 1386.) On May 28, 2003, Roberts order ed Hughe s suspended from his roles as a dire ctor a nd office r of UTCU and indicated DFI ’s i ntent to remove Hug hes fr om these positions. Hughe s’ counse l sent a letter to U T CU ’ s ma

nag er r equesting Hug hes’ “ retire ment entitlement or seve ranc e compe nsation”
on J une 19, 2003. On Dec ember 2, 2003, the Cuy ahog a County Probate Court fo u n d Hug hes incompetent due to de pression, deme ntia and cog nitive impairments. As a re sult, Carl H ug hes wa s appointed Hug hes’ guardia n. On J uly

29, 2004 , Carl Hug hes ente red into a se ttlement ag ree ment with DFI consenting to Hug hes’ r emoval as an office r and direc tor of UTCU. On De cembe r 1, 2004, Hug hes’ attorney

sent a letter

to ASI ’s counse l reque sting Hughe s’ def err ed compe nsation and death/disability

benef its, amounting to $1,941,271.23.

DI SCU SSIO N I. ER ISACL AI M S A. Stand ard of ReviewNos. 07-3102, 07-3211

10 Th is C ourt

re vie ws a

dis tr ic t c ourt ’s g ra

nt o f s umm ary

judgment de novo
. Kolkowski v. Goodrich Corp. , 448 F.3d 843, 847 ( 6th Cir. 2006). Summ ary judgme n t i s p roper wher e “the pleading s, t h e discovery

and disclosure materia ls on file, and any aff idavits show that there is no g enuine issue a s to any materia l f act and that the movant is e ntitled to judgment as a matter of la

w.” Fe d. R. Civ. P . 56(c) . The moving party bear s the initial burden of demonstrating the abse nce of any g e n u i n e i s s u e o f m a t e r i a l f a c t , an d a l l i n f

e r e n c e s s h o u l d b e m a d e i nf a v o r o f t h e n o n - m o v i n g p a rt y. Ce lot e xCor p. v . Ca tre tt , 477 U.S. 317, 323 (1986). Th e mov ingpa

rt y may me e t it s b ur de n b y

sh ow ing “ tha

t the re is an a

bs e nc e of e vid e nc e to support the nonmoving pa rty ’s ca se.” Id. a t 32 5. I n re sp on se , th e no nmo vin g pa rt y may no t si mpl y rely on its pleading s, but instead must “set out specific f acts showinga g enuine issue f or trial.” F ed. R. Civ. P . 56(e) (2). While all infere nces must be draw n in f avor of the nonmoving party , “the mer e exis tence of a sc intill a of evide nce in support of the plaintiff' s position wil l be insufficie nt [ to defe at a motion f

or summary judgme nt] ; the re must be evidenc e on which the jury could re asonably

find for the pla intiff.” Anderson v. Liberty Lobby, I nc. , 477 U.S. 242, 252 (1986).

B. Ana lys is The Employ

ment Retirement Income Sec urity Act of 1974 ( “ERI SA”), 29 U.S.C. §§ 1001- 1381, g overns employ ers’ administration of employ ee benef its plans. ERI SA define s an employ ee benef its plan as an employ ee w elfa re be nefits plan, an employ ee pe nsion benefits plan, or a plan that is both an employ ee w elfa re be nefits plan and a

n empl o y ee p en s ion benef its plan. 29 U.S.C. § 1002(3). Included in ERI SA’s definition of an e mploy ee w elfa re be nefits plan is aNos. 07-3102, 07-3211

11 plan, fund, or pr og ram [that] was e stablished or is maintained fo r t h e p urpose of providing for its pa

rticipants or their be nefic iaries, throug h the purc hase of insurance or otherw ise, . . . medica l, surg ical, or hospital ca re o r b en ef

its, or benef

its in t he e ve nt o f s ic kn e ss, a c c ide nt, dis a bil ity , de a th o r u

ne mpl oy me nt, or va c a tio n b e ne fi ts, appre nticeship or other

training prog rams, or day car e ce nters, schola rship funds, or prepa id leg al servic es . . . 29 U. S.C. § 1 00 2( 1) . A n E RI SA e mpl oy e e pe ns ion be ne fi ts p lan is a plan, fund, or prog ram whic h was he retofor e or is her eaf ter e stablished or maintained by an e mpl oy e r o r b y

an e mpl oy e e or g anizatio n, or by bo th, to t he e xten t th a t by

its express terms or as a

result of surr ou n d i n g circ umstances suc h plan, fund, or prog ram-- (i) provide s retire ment income to employ ees, or (ii) re sults in a deferr al of income by employ ees for periods extending to t he termination of cove red e mploy ment or beyond, reg ardle ss o f t h e method of calculating the c ontributions made to the plan, the method of ca lculating the bene fits u n der the plan or the me thod of distributing benef its from the plan. 29 U.S.C. § 1002(2). I n o rd e r t o d e te rm ine wh e ther a pl an qua lif ie s a s a n E RI SA e mpl oy e e be ne fi ts p lan, thi s Court a pplies the four- part test first set forth by the Eleve nth Circuit Court of Appeals in Donovan v. Dillingham , 688 F.2d 1367 (11th Cir. 1982). See Int'l Resource s, Inc. v. New Y

ork Life Ins. Co. , 950 F.2d 294, 297 ( 6th Cir.1991) (adopting the Dillingham test). The Dillingham c ourt he ld t hat a “‘plan , f un d, or pr og ra m’ un de r E RI SA i s e sta

bli sh e d if fr om t he surr ound ingc ir c ums tanc e s a
rea sonable pe rson ca

n asce rtain t h e int ended be nefits, a c lass of bene ficiar ies, the sourc e of financ ing, and proc edure s for re ceivingbenef its.” Dillingham , 688 F.2d at 1372. Both pa rties ag ree that the inte n ded bene ficiar ies of this compensation plan ( Hug hes) a nd the source of funding(g ener al funds) are clear
. See W

illiams v. W

right , 927 F.2d 1540, 1544- 45 (11th Cir. 1991) (holding that plan
cover ing sing le employ ee f unded by employ er’ s g ener al assets wa s an employ ee b en ef i ts plan).Nos. 07-3102, 07-3211

12 Howeve r, De fenda

nts contend and the district court ag ree d that the i ntended benefits and pr ocedur es for r ece iving be nefits ar e not re asonably asce rtainable
.

1. Intended B enefits The district cour

t found that the intended be nefits of the de fer red c ompensation aspec t of the plan wer e not reasonably asce rtainable based on its evaluation of t he actions of the UTCU boar d of direc tors in 1987, 1989, and 1999 and its eva luation of UTCU’s financ ial statements for the r eleva nt time period. B eca

use the 1987 motion only stated the boa

rd’s intenti o n to pay

Hug hes a sa lary

at an undef ined “c urre nt pay

level” a nd made no mention of the salary being defe rre d, the di strict court found that the 1987 motion was insuffic ient to establish a defe rre d compensation plan. The c ourt found that the 1989 motion did not cure these defe cts bec ause it simply memorialized the board’ s intention to “set aside ear nings to pa

y salary and benef

its” without spe cify

ing the amount to be set aside or the nature of bene fits to be provided to Hug hes. The district c ourt also noted that the 1999 motion, although ac knowledg ing that the board ha d authorized Hug hes to rec eive a salary beg inning in 1987, did not ex plicitly state that salar

y had bee n defe rre d. I n h old ingthat the int e nd e d be ne fi ts of the de fe rr e d c omp e ns a tio n p lan w e re no t r e a so na bly
asce rtainable , the di strict court a lso relied upon the a ccr ued bene fits liabilit y

that Plaintiff claims was
re c or de d to a c c ount f

or Hu g he s’ de fe rr e d c omp e ns a tio n. Th e c ourt no te d th a t th e a c c ru e d b e ne fi ts lia bil ity did no t c or re sp on d to a

de fe rr e d c omp e ns a tio n p lan b e c a us e the lia

bil ity did no t in c re a se betwee n 1996 and January 2002, a period during which Plaintiff c laims a salary of over $80,000 was d e f e r r e d an n u a l l y.Nos. 07-3102, 07-3211

13 Plaintiff f aults the district c ourt for discounting deposition te stimony and for e x am i n i ng discrete piece s of evidenc e instead of viewing the evidenc e as a whole. I nstead, Plaintiff a rg ues, the district court should have a pplied the fa ctors conside red in Henglein v

. In f o r ma l Plan for Plant Shutdown Be nefits for Salar ied Employe es , 974 F.2d 391 (3d C ir. 1992). I n deter mining whe ther
an in f o r ma l e mp lo y e e b e n e f

it p la n e xis ted, the Hen gle in court c onsidered “ internal or distributed documents, ora l repre sentations, exis tence of a f und or ac count to pa

y benef its, actual pay

ment of be ne fi ts, a

de lib e rate fa il ure to c or re c t kn ow n p e rc e pti on s o f a pla n’ s e xiste nc e , th e re a so na ble understandingof employ ees, a nd the intentions of the putative sponsor.” He ng le in , 974 F.2d at 395. Plaintiff corr ectly

argues that the district cour t focused too na

rrowly on individual pieces of evidenc e and f

ailed to consider

deposition testimony . Although it is un nece ssary to adopt the He ing le in fac tors as par

t of the Dillingham te st, in c on sid e ri ng“ the surr ound ingc ir c ums tanc e s”
re g ard ingHu g he s’ c omp e ns a tio n, the ind ivi du a l bo ard mot ion s mu st b e vie wed in rela tio ns hip to
e a c h o the r a

nd in l ig ht o f t

he de po sit ion

te sti mony

of Carl Hu g he s and

Rob e rt Sor in. Carl Hu g he s, who was a

member of

UTCU’s boar d in 1987, testified that the 1987 motion established a sa lary for Hug hes that wa s equal to the amount Hughe s had been rec eiving as Vice President of CWA. Carl Hug hes also testified that Hug hes def err ed this sala

ry . Sorin testified that a def err ed compe nsation plan was created for Hug hes i n the m id-80s. Viewe d in the light most favor able to Plaintiff, the 1999 board r esolution is a clarific ation of the 1987 a nd 1989 motions establishi ng com p en sation for Hu g he s. Th e bo ard

re so lut ion

e xplicit ly

re c og nize s th e 19 87 mot ion ’s a uth or iza tio n o f H ug he s’ salary and that the authorized salary had not be en paid. The 1999 resolution also stat es t h at an
acc rued be nefits ac count had be en set a side for H ug hes. Thus, the 1999 resolution, viewed in theNos. 07-3102, 07-3211

I n itself, this indicator of the amount owed to Hug hes is ambig uous. Plainti ff a sserts that 6 Hug hes was entitled to the amount that CW A vice- president would have bee n paid for e ach of the y ear s betwee n 1987-1999. The only eviden ce prese nted re g ardingHug hes’ pa y level is the 1987 resolution authorizing him to be compensated at his “ curr ent pay level” a nd Carl Hug hes’ testimony that this langua g e re fer

red t o Hug hes’ sa lary

as a CWA Vice Pre sident. Howeve r, Plaintiff has pointed to no evidence t o indicate whe ther Hug hes’ sa lary was to rise at the same rate as that of a CW A Vice President or whe ther he was to be a war ded a f

ix ed sala ry equal to the 1987 CW A salar y le ve l. 14 light most favor able to Hug hes, establishes that Hug hes’ salary had been defe rre d and was re flec ted in a n a c c ru e d b e ne fi ts l ia

bil ity in U TCU ’s fi na

nc ia l r e c or ds
. Although vie wing the evid en ce as a whole leads to the conc lusion that UTCU had the intention to allow Hughe s to defer compensation and to refle ct thi s co m p en s at ion in an acc rued benef its li ability , this evidence does not establish the re asonably asce rtainable benef

its necessa

ry for the exist ence of a pla

n. As the Plaintiff would have this Court read t h e 1999 resolution, the resolution states that UTCU owe s Hug hes the sala ry of a CWA Vice- President but also provides that Hu g hes ’ acc ru e d b e ne fi ts w ou ld b e c on ta ine d in a sp e c if ic a c c ount, the a c c ru e d b e ne fi ts a c c ount. Y e t, a t n o ti me d id

th e amount of th e a c c r

u e d b e n e f it s li a b il it y c o r r e s p o n d to th e a c c r

u e d CW A salary . Although Plaintiff c laims t h at Hu gh es was owed a sa lary for e ach y ear

betwee n 1987 and 20 02 , D F I ’s 19 96 re po rt

re ma rk s th a t U TCUha d n o in te nti on of inc reasin g the a c c ru e d b e ne fi ts liability in the near

future. T his intention was borne out by the fa ct that the amount of the acc rued benef its liability did not chang e betwee n 1996 and J anuar y 2002. The 1999 resolutio n s t at es t h at Hu g he s is e nti tle d to c omp e ns a tio n b ut p ro vid e s tw o c on tr a dic tor y ind ic a tio ns of the a

mou nt t o wh i ch Hu gh es is entitled, the salary of a CWA Vice Pre sident and the amount of the ac crue d 6 benef its li ability . Thus, even upon the Plaintiff’s re ading of the fa cts, a re asonable person would notNos. 07-3102, 07-3211

15 be able to asce rtain the amount of defe rre d compensation owed Hug hes. See W illiams v. W

CI Steel Co., Inc ., 17 0 F .3 d 5 98 , 6 03 (6 th C ir . 1 99 9) (“ As su min g that pl a int if fs we re to p re va il o n th e ir ERI SA claim, the di strict court would have to fashion essentially all of the de tails of the purporte d plan and determine ex actly what bene fits would go to whic h employ ees or retire es, since no one can
asce rtain what WC Iintended to provide f or its worker s.”).

2. P roce dure for Rece iving B enefits The pa rties dispute whethe r there exis ts a rea sonably asce rtainable proce dure for obtaining benef its. Defenda

nts claim that this prong of the Dillingham te st h a s n ot b e e n met be c a us e UT CU had no “ong oing a dminist rative sc heme.” Plaintiff counters that the ongoingscheme require ment applies only

to severa nce c ases a

nd that Hug hes’ asser

tion of a cla im for bene fits is sufficient proof that a re asonably

asce rtainable proce dure e x isted to survive summary judgme nt. I n Fort Halifax Packing Company, I nc. v. Coy ne , 48 2 U. S. 1 (1 98 7) , the Sup re me Court he ld that a Ma ine statut e that r e qu ir e d c e rt a in e mpl oy e rs to m a ke a on e -t ime se ve ra

nce pa y me nt t o employ ees in the e vent of a plant closing was not pre- empted by ERI SA. The Fort Halifax ma jor ity fo un d a n o ng oin g a dmi nis tr a tiv e sc he me ne c e ssa ry fo r a “p lan” wi thi n the de fi nit ion of ERI SA t o
e xist: Th e M ai n e statute ne ither establishes, nor require s an employ er to maintain, a n e mpl oy e e be ne fi t plan . The re quirement of a one-time, lump-sum pay

ment trig g ere d b y a sing le eve nt require s no administrative scheme whatsoeve r to meet the employ er’ s obligation. . . . To do littl e more than write a che ck har dly constitutes the operation of a bene fit plan.Nos. 07-3102, 07-3211

16 Fort Halifax , 4 82 U. S. at 12 . Thi s lan g ua g e c an be re a d ve ry br oa dly to e xclu de a ll a

rr ang e me nts that call for

lump-sum pay

ments from the ambit of ERI SA. Howeve r, the Fort Halifax court addre ssed this conce rn by explaining that death benef its would sti ll fit withi n this definit i o n of a plan. Id. a t 15 n. 9. Th e Court no te d th a t e ve n tho ugh deat h be ne fi ts a re g e ne ra lly

pa id i n a lum p sum, since it is predictable that former employ ees w ill die at v ar i o u s p o ints in t he future , the employ er ha s to provide a mec hanism for making“pay ments to survivors on an ongoing basis. The
on g oin g , p re dic ta

ble natur e of

thi s o bli g a tio n th e re fo re c re a te s the ne e d for an a dmi nis tr a tiv e sc he me to p ro c e ss c la ims a nd pa

y ou t be ne fi ts, wh e the r t

ho se be ne fi ts a

re re c e ive d b y

be ne fi c iari e s in

a lum p sum or on a per iodic basis.” Id. Thus, a bene fits arra ng em en t t h at p rovides for a lump-sum pa y men t to an empl oy e e may qu a lif y a s an E RI SA b e ne fi ts p lan if the e mpl oy e r i s p ote nti a lly require d to pay

out benef

its on a regular ba sis. This Court has rec og nized that the ongoingadministrative sche me re q u i re m en t i s a lesser hurdle than the rea sonably asce rtainable claims proce dure r equire ment. W CI , 1 7 0 F
. 3 d a t 6 0 4 ( “ In our view, Dillingham require s m o re than just the exi stence of an a dminist rative sc heme. I f a
rea sonable pe rson ca

nnot asce rtain the c laims proce dures in a purported plan, the n the plan is not an ‘employ ee be nefit plan’ unde r ERI SA.”). Even whe n benef its are due in a lump-sum pay ment in a
non-seve ranc e bene fits scheme, the re r emains the possibility that benef

its will need to be calc ulated and paid throug h the claims proc edure at any time. See Fort Halifax , 482 U.S. at 15 n.9. Se e als o Kolkowski , 4 48 F .3 d at 84 9 (no tin g that an ong oin g a dmi nis tr a tiv e sc he me e xiste d in par t be c a us e the seve ranc e pac kag e “c overe d ever y involuntary

termination over a t wo-y ear period” ). Thus, theNos. 07-3102, 07-3211

17 claims proce dure, a re quirement for all ERI SA benef

its plans, in it self constitutes an ong oing administrative sche me. I n H ug he s’ c a se , the dis tr ic t court a g re e d with De fe nd ants tha t no re a so na

bly a sc e rt a ina

ble claims proce dure exis ted. Hug hes argues that a g enuine dispute of material fa ct re mains reg arding the e xiste nc e of

a c la ims pr oc e dure be c a

us e Hu g he s ma de mul tip le a tte mpts to c la im b e ne fi ts. Hug hes asse rts that since he prese nted a c laim for benefits, a jury could i nfer that a cla ims procedur e exis ted. A spec ific cla ims procedur e need not be set out in writing in or der for the third Dillingham fac tor to be satisfied. S

ee Di l l i ngham , 688 F.2d at 1372 (“ERI SA does not, howeve r, re quire a fo rm a l, w ri tte n p lan. ” ). As e vid e nc e of the e xiste nc e of

a pr oc e dure fo r re c e ivi ngbe ne fi ts, c ourt s have be en willing to a cce pt past prac tices of plaintiffs in pursuing c laims. I n particula r, whe n prior
re qu e sts fo r be ne fi ts have be e n a wa rd e d a s th e re su lt o f a

pla int if f t a kin g a c tio n to pr e se nt h is c la im to a pla n a dmi nis tr a tor , c ourt s h a ve fo un d th a t a re a so na bly a sc e rt a ina

ble c la ims pr oc e dure e xists
. Se e, e .g ., De ibl e r v . U

FCW , 97 3 F .2 d 20 6, 21 0 ( 3d

Cir . 1 99 2) ; W

hitfield v. T

orch Oper. Co. , 9 35 F. Supp. 822, 828 (E.D. L a. 1 9 9 6 ). Ho we v er, there is little guida nce in the c ase la

w re g ardingthe inf e re nc e to b e dr awn

wh e n n o c la ims have be e n pro c e sse d or h a ve re su lte d in the awa rd of be ne fi ts. I n discussing w hether

a claims proce dure exis ts, the parties focus on the question of whe ther the re is a sp e c if ic pe rs on an a pp lic ant fo r be ne fi ts sho uld c on ta c t to make a c la im. Th is e mph a sis
see m s t o be misg uided bec ause in situations where benef its are a war ded automatica lly

upon the
occur renc e of a stated contingenc y , this Court has not require d the identity of the pe rson to whom the claim is pr esente d to be clea r. Kolkowski , 448 F.3d at 850. As the Dillingham court spec ified,Nos. 07-3102, 07-3211

18 this Court m ust look to all the s urroundingcirc umstances to dete rmine whe ther the c laims procedur e is reasona bly asce rtainable . I n the instant case , there is littl e doubt t hat no claims proc edure exis ted for de fer red c ompensation bene fits since there was no c lear indication of the amount of compensation defer

red, no spe cification of when the defe rra l was to end, a nd no indication of how the bene fits would be re ceive d. On the other hand, the de ath benef

its we re more clea

rly set forth, sp e c if y ingthe a mou

nt o f t he be ne fi t and

the pe rs on to wh om the be ne fi t sh ou ld b e dis burs e d (Nata lie Hug hes). Eve n though the re is more prec ision reg ardingthis benefit, Plaintiff has g iven no evidenc e of ho w t he de a th b e ne fi t is to b e c laim ed. I n f a c t, H ug he s atte mpt e d to c la im the be ne fi t a s a dis a bil ity be ne fi t be fo re his de a th, e xhibi tin g some un c e rt a int y re g ard ingthe natur e and c la ims pr oc e dure fo r t

his be ne fi t. E ve n if

thi s Co ur t take s Hug he s’ a c tio ns in atte mpt ingto c la im b e ne fi ts into account, the e vidence shows that no rea sonably asce rtainable claims proce dure e x isted. Plaintiff claims that even if no rea sonably asce rtainable claims proce dure e x ists, a plan may by g overne d by

ERI SA. For this contention, Plaintiff cites 29 C.F.R. § 2560.503-1( l): Fa ilure to establish and follow r easona ble claims proc edure s. I n the case of the failure of a pla n to est a bli sh or fo llo w cl a ims pr oc e dure s con sis te nt wit h the re qu ir e me nts of t h i s section, a c laimant shall be dee med to have e x hausted the a dminist rative re me die s ava ila

ble un de r t

he p lan and

sh a ll b e e nti tle d to purs ue any a va ila ble re me die s und e r sect ion 50 2( a ) o f t he Ac t on

the ba sis that th e pla

n h a s f a ile d to provide a rea sonable c laims pr ocedur e that would yield a dec ision on the merits of the c la im. Plaintiff argues that t h i s De p artment of L abor r eg ulation impli es that a be nefits sche me may be g ov e rn e d b y

ERI SA d e sp ite its fa ilure to e sta bli sha c la ims pr oc e dure . H ow e ve r, we be lie ve that it would be more rea sonable to interpr et 29 C.F.R. § 256 0
. 5 0 3 -1(l) a s expl aining that exhaustion of
reme dies wi l l n o t b e required whe n claim proc edure s are defic ient instead of inter preting theNos. 07-3102, 07-3211

19 re g ulatio n a s d oi ngawa

y wi th t he re a so na

bly a sc e rt a ina

ble c la ims pr oc e dure re qu ir e me nt. Th is int e rp re ta tio n is c on sis te nt wi th the re g ulatio n a s a wh ole sin c e 29 C.F .R. § 25 60 .5 03 -1 e xpla ins in detail the cla ims procedur es employ ers a re r equire d to put in plac e to comply with ERI SA. See e .g. 29 C.F.R. § 2560.503-1(b) (3) ( prohibiting employ ers for char g ing a fee for c laims procedur es and noting that suc h a proc edure would not be dee med re asonable ). Vi ew ed in this l ight, 29 C.F .R. § 25 60 .5 03 -1 (l ) w ou ld f

re e c la ima

nts fr om h a vin g to c omp ly wi th un du ly on e ro us , b ut s til l r e a so na bly
asce rtainable claim proc edure s. Thus, the lack of a r e a s o nably

asce rtainable claims proce dure is fatal to H ug he s’ ERI SA c la ims
.

II. DU E P RO CE SS C LA IM A. Stand ard of Review As stated above , we r eview a district court’s disposition of a motion for summary judgme nt de novo. B. Ana lys is I n o rd e r t o b ri nga

c la im f or a vio la tio n o f d

ue pr oc e ss, a pla int if

f mus t sh ow that the state has depr ived him o f a protec ted prope rty interest. F or a pe rson to have a proper ty interest in a benef it, the person must have more than a one-sided ex pectation of receiving the benefit but also “a leg itimate claim of entitl ement to it.” Bo ar d of Re ge nts v . R oth , 408 U.S. 564, 577 (1972). Eve n when a protec ted prope rty

interest exis ts, a deprivation of that interest is not a violation of the due pr oc e ss c la

us e un le ss t

he proce dure by

wh ic h th e state de pr ive s th e ow ne r o f t he pr op e rt

y int e re st is inadequate
. Mi dk

iff v . A da ms Cou nty

Re gio na l W ate r D ist
. , 409 F.3d 758, 762 ( 6th Cir. 2005).Nos. 07-3102, 07-3211

20 Th e dis tr ic t c ourt

dis mis se d Pl a int if

f’ s cla im be c a

us e it f ound tha t br ing inga

su it und e r s ta te
c on tr a c t la

w w ou ld b e an a de qu a te pr oc e dure to vi ndic a te any pr op e rt y int e re st Pl a int if

f h a d in claimed be nefits. For this conclusion, the district court re lied upon Luj an v . G & G F ireSp rin k le rs, Inc. , 532 U.S. 189 (2001). In Lujan , a subcontrac tor that was denied pa y ment for se rvice s perf

ormed for the state of California broug ht a 42 U.S.C. § 1983 action aga inst the state claiming that it had been de prived of pr operty without due proce ss of the law be cause no hear ing w as held re g ardingthe denial of pa

y ment. I d. at 1 9 1 -9 2
. The Supreme Court held that assuming the subcontrac tor was de pr ive d o f a

pr op e rt y int e re st, the de pr ivatio n w a s n ot a vio la tio n o f p ro c e dura l du e pr oc e ss b e c a us e the s ubcontra ctor could bring a breac h of contract suit in state court. Id. at 197. The Court he ld that the ordinar

y judicial proce ss suf

fice d beca use the subcontrac tor had not bee n deprive d of a “ prese nt entitlement.” Id. at 1 9 6
. Although Lujan contains little discussion of what constitutes a pre sent entitlement, the Court distinguished the subcontrac tor’s si tuation from that in which “the claimant
wa s d e nie d a

ri g ht b y vir tue of wh ic h h e wa s p re se ntl y e nti tle d e ith e r t o e xer c ise ow ne rs hip dominion over rea l or persona l pr operty , or to pursue a g ainful occ upation.” Lujan , 532 U.S. at 196. I n distinguishing t h e t y

p e o f intere sts for which a brea ch of c ontrac t suit would provide adequate proc ess and interests for which due proce ss ne cessitated a rea sonably prompt hear ing, the Court discussed cases i n which it had held that a hear ing w as nec essar

y . I n United States v. Jam es Da nie l G oo d R e al Pro

pe rty , 5 10 U. S. 4 3 ( 19 93 ), the Sup re me Court he ld t hat th e g ov e rnme nt m

us t hold a hearing befor e seiz ing a hous e subj ect to for feiture . I n Barry v. Barc hi , 443 U.S. 55 (1979), the Court he ld t hat a ra c etr ack tr a ine r w a s e nti tle d to a

pr omp t po st- de pr ivatio n h e ari ngup on his suspensio n from tra ining. In FDIC v. M allen , 486 U.S. 230 (1988), the Court held that a bankNos. 07-3102, 07-3211

21 of fi c ia l w a s e nti tle d to a

po st- de pri vat ion

he ari nga ft e r b e ingsu sp e nd e d f ro m pa rt ic ipatin g in h is bank’s aff airs. Finally , in Sniadach v. Fam ily Finance Corp. of Bay Vie w , 395 U.S. 337 (1969), the Court determined that “due proce ss r equire s notice and a hear ing befor e wag es may be g arnished.” Lujan , 532 U.S. at 196. Def endants arg ue that Plaintiff’s claim re sembles that of G & G Fir e Sprinklers in Lujan and
no t tho se wh ic h the Court he ld to be c la ims re g ard ing pr e se nt e nti tle me nts
. De fendan ts bas e this argument on the disputed nature of Plaintiff’s cla im for bene fits and the fa ct that the depr ivation of the d i s p u t ed bene fits have not depr ived Plaintiff of the a bility to pursue a g ainful occ upation. Plaintiff attempts to char acte rize his inter est in de fer red compensation a

nd death benef

its a s simil ar to the interest of the petitioner in Sniadach . Plaintiff argues that like Sniadac h, Hug hes ea rned
wa g e s, and tho se wa g e s we re be ing he ld by his e mpl oy e r, UT CU . H ow e ve r, a s D e fe nd ants no te , in Sniadach , absent the g arnishment, the e ntitlement of the petitioner to the under ly ing w ag es wa s undisputed. Sniadach , 395 U.S. at 338 (g arnishment conc erne d wag es “e arned b y p et itioner and unpaid”)
. By contra st, in the i nstant case , whether a wa g e wa s ear

ned at a ll is unclear. B eca use of the un c e rt a int

y re g ard ingwh e the r P la int if f i s e nti tle d to pa

y me nt, Plain tiff

’s c a se mor e c los e ly
re se mbl e s Lujan than Sniadach , and , a s a re su lt, Pla int if f ha s n o p re se nt e nti tle me nt a nd no ri g ht t o
a po st- de pr ivatio n h e ari ngoth e r t ha n th e no rm a l ju dic ia l pr oc e ss.

III. ASI’S COUNTERCLAIMS A. Stand ard of ReviewNos. 07-3102, 07-3211

22 As state d ab ov e , this Court re vie ws the dis tr ic t c ourt ’s g ra nt o f s umm ary

jud g me nt de novo. The district cour

t’s g rant of a

motion to di smiss i s also revie wed de novo. Du ba yv . W e lls , 506 F.3d 422, 427 (6th Cir. 2007). A motion to dism iss may be g rante d only

if “it appea

rs beyond doubt that the plaintiff ca

n prove no set of fac ts w hich would entitle him to relief.” Id. (q u o t i n g Ricco v . Potter , 37 7 F .3 d 5 99 , 6 02 (6 th C ir .2 00 4) ). Al l f a c tua l a lle g a tio ns mus t be vie we d in the lig ht m os t f a vo ra ble to the plaintiff, and this Court must make all rea sonable inferenc es from the fac ts in the complaint in favor of

the plaintiff. Id.

B. Ana lys is Th e dis tr ic t c ourt

g ra nte d Pl a int if

f’ s mo tio ns fo r s umm ary

jud g me nt o n A SI ’s c ounte rc la ims and Plaintiff’s motion to dism i s s the counter claims bec ause the court found that ASI was ne ver proper ly appointed as U TCU’s conser vator and thus la cked sta

nding to br ing the counter claims. The distri c t c o u rt h e ld th a t p u r s u an t to O h io la w , a c o n s e r

v a to r ma y o n ly b e a

p p o in te d by

the Superintendent of the Division of Financ ial I nstitut ions and not by the Deputy

Superintendent for Cr e dit Un ion s. Sin c e ASI

wa s a pp oin te d c on se rv a tor

of UT CU by

Rob e rt s, Act ingDe pu ty Superintendent of Cre dit Unions, the district court held that ASIlacke d standing to bring counter claims ag ainst Plainti ff. Def endants a sk this C ourt to either va cate or re verse the district court’s grant of summar y jud g me nt f

or Pla int if f a nd its dis mis sa l of

ASI ’s c ounte rc la ims fo r a va ri e ty of re a so ns . D e fe nd a nts argue that the judg ment should be vac ated be cause ASI ’s counter claims wer e re ndere d moot by the district court’s g rant of summary judgme nt on Plainti ff’ s ERI SA claims, by DFI ’s re -appointmentNos. 07-3102, 07-3211

23 of ASIas UTCU’s c onservator, and by the s t at e cour

ts’ assumption of exclusive jurisdiction over any challeng e to the appointment of a conser vator. Alter

natively , Def

endants a ssert that this Court sh ou ld r e ve rs e the dis tr ic t c ourt on the me ri ts. Pur su ant t o A rt ic le I I Iof the Con sti tut ion , f

e de ra l c ourt s “ may

on ly a dju dic ate a c tua l, ong oing c ontroversie s.” Honig v. Doe , 484 U.S. 305, 317 (1988). Thus, a case must present “a rea l and substantial controve rsy admitting of specific relief throug h a decre e of a conclusive c hara cter , as distinguished from an opinion a dvising what the law would be upon a hy pothetical state of fa cts.” Pr e ise r v . Ne wk

irk , 4 2 2 U. S
. 3 9 5 , 4 0 1 (1 9 7 5 ) ( qu o t i n g North C arolina v. Rice , 404 U.S. 244, 246 (1971)) . The Supreme Court ha s rec og nized that an action may become moot at any

stag e of r eview. Un ite d S tat es B an c or

p M or tg. Co. v . Bon ne r Mal l P ar tne rsh ip , 513 U.S. 18, 21 (1994). “When a civil case become s moot pending a ppellate a d

j u d i cation, the e stablished prac tice in the fe dera l sy stem is to reverse or vac ate the judg ment below and r emand with a dir ection to dismiss .” Ste war t
v . B lac k we ll , 4 7 3 F. 3 d

6 9 2 , 6 9 3 (6 t h C i r. 2 0 0 7 ) ( en b an c o rd er ) ( qu o t i n g Co a li ti o n fo r G o v 't Procurem ent v. Fe deral Prison Indus., Inc ., 365 F.3d 435, 484 (6th Cir. 2004) (interna l quotation
mark s o mit te d) ). Ho we ve r, va c a tur is n ot a pp ro pr ia te in a ll c a se s and is g e ne ra lly uti lize d “ to a vo id entre nching a dec ision render ed unre viewable throug h no fault of the losing party .” Id. De fe nd ants a sse rt that ASI ’s c ounte rc la ims we re me ant a s a se tof f t o Pl a int if

f’ s E RI SA c la im and we re r ender ed moot when the district court g rante d summary judgme nt for De fenda

nts on the ERI SA c la im
. A c la im th a t a ju d g me n t in f a v o r o f a p la in ti f

f b e s e t o f

f to c o mp e n s a te f

o r the plaintiff’s wro n gd o i n g would nece ssarily be mooted by

a dismissal of the plaintiff’s c laim. See Sweet Pea M

arine, Ltd. v. APJ Marine

, Inc. , 411 F.3d 1242, 1251 ( 11th Cir. 2005) . Howeve r, ASI ’sNos. 07-3102, 07-3211

24 answe r in which it sets forth its counter claims does not fra me the counter claims as conditional upon the su c c e ss o f P la int if

f’ s E RI SA c la im. ASI ’s ans we r s ta te s: Def endant ASI

asser ts t h es e cla ims for aff

irmative re lief and, a lternatively , to the extent thi s Court wer e to find that Plaintiff Hug hes is otherwise e ntitled to employ ee be ne fi ts und e r E RI SA, fo r f or fe iture , mitig a tio n, re sti tut ion , s e t- of f, a nd re c ou pme nt. (J.A . 9 6. ) B e c a

us e ASI ’s re qu e st fo r re lie f as a se t- of f to a ny dama g e s a

wa rd e d Pl a int if

f w a s c le a rl y a fa llback from its main reque st for affirmative relief , ASI ’s arg ument that its countercla ims were
m o o t edb y

t h e d i s p o s i t i o no f P l ai n t i ff ’s E R I S A c l ai m i s n o tco n v i n ci n g. De fe nd ants a lso a sse rt

that Pla int if

f’ s c ha lle ng e to A SI ’s sta

nd ingha s b e c ome moo t be c a us e DF Iha s r e -a

pp oin te d A SI a s U TCU ’s c on se rv a tor purs ua nt t o und ou

bte dly le g iti ma te pr oc e dure s. A lt h o u g h w e a g r e e th a t D F I ’ s r e - a p p o in tm e n t o f

A SI mo o ts th e qu e s ti o no f

w h e th e r A SI had standing to pursue lit igation, this fac t alone is insufficient to require vacatur of t he district cour t’s jud g me nt. Th e Sup re me Court ha s ma de c le ar t

hat va c a tur

is p ro pe r w he re a

pp e llate re vie w r e su lts from the unilatera l a ction of the party that preva iled below or is “pr evente d throug h happensta nce.” Bo nn e r M

all , 5 1 3 U. S
. at 2 2 -2 3 (q u o t i n g United States v. Munsingwear, Inc

. , 340 U.S. 36, 40 (1950)) . The Court explained that the equitable tradition of vacatur ensure s that a losing pa rty is not bound by a ruling that is set in stone due to “the va g arie s of circ umstance” or t he prevailing party ’s unilatera l action. Id. at 25. Howe ver, w hen the losing party cause s moot n es s b y h i s o wn ac tion “[t] he judg ment is not unreviewa ble, but simply unrevie wed by his own choice .” Id. Thus, absent exceptional circ umstances, va catur is inappropriate wher e the pa rty that lost at the di s trict court
cause d the mootness by

settlement or other

ac t i o n s o f i t s o wn. Id. at 29. As a r esult, DFI ’sNos. 07-3102, 07-3211

25 rea ppointment of ASIas UTCU’s c onservator ca nnot justify vacatur of t he dis trict court’s judg ment
un le ss j us tif

ie d b y e xtra or din ary

c ir c ums tanc e s. Def endants a rg ue that vac atur is nec essar y beca use Ohio courts have exclusive jurisdiction
over c halleng es to administrative orde rs. I n support of their c ontentions, Defe ndants cite Gaunce

v . d e Vi nc e nti s , 708 F.2d 1290 ( 7th Cir. 1983), and Gree n v. Brantley , 981 F.2d 514 ( 11th Cir. 1993), for the proposition that “collate ral attacks upon a dminist rative or ders a re not pe rmissible.” (ASI

Br
. 5 7 (q u o t i n g Gaunce , 708 F.2d at 1293).) Gaunce and Brantleyare ina pp os ite be c a

us e bo th a dd

re ss the ability

of fe dera l courts to en t er t ai n collater al attac ks on fede ral a dminist rative or ders. The Supreme Court has he ld that “ wher e Congr ess has provided statutory revie w proc edure s desig ned to permit ag ency expertise to be broug ht to bear on pa rticular pr oblems, those proce dures a re to be exclusive.” W

hitney Nat. Bank in Je

fferson Parish v. Bank of New Orleans & Trust Co. , 379 U. S. 411, 420 (1965). Def

endants’ arguments fail t o provide a basis for any contention that the fe dera l
c ourt s la c k the a

bil ity to e xer c ise jur isd ic tio n wi th re sp e c t to an a c tio n g ro un de d in the ERI SA statute. As a r esult, ASI ’s ar g ument that the dis t ri ct court lac ked jurisdiction to determine A SI ’s standing is unpersuasive. Def endants a lso arg ue that vac atur is appropriate be cause the district court’s judg ment relied upon a dec isio n b y t h e Franklin County Court of Common P leas that wa s subsequently overr uled on appea l. The district court specific ally relied upon the Ohio court’s holding that ratification by the Superintendent of the Divi sion of Financ ial I nstitut ions after the fa ct was insuff

icient to reme dy

an invalid appointment of a conservator. Def endants claim that this relianc e is undermined by the fa ct that th e Com mon P lea s’ c ourt ’s de c isi on wa s o ve rt

ur ne d. Ho we ve r, the Oh io C ourt of Ap pe a lsNos. 07-3102, 07-3211

26 overturne d the lower

court’s de cision solely

upon proce dural g rounds that d o n o t undermine the substa n ti v e b a s is o f th e lo w e r c o u rt’ s h o ld in g . A s a r e s u lt , D e f e n d an ts h a v e ma d e n o showing of extraordinary

circ umstances, a

nd v ac at u r i s i nappropr iate. Thus, we dismiss ASI ’s appe al of the dis mis sa l of

its c ounte rc la im a s mo ot.

CO NC LU SION Based up on

the fo re g oin g a na ly sis , th is C ourt AF F IRMS th e d is tr ic t c o u rt’ s g r ant of summary judgme nt for De fenda

nts on all of Plaintiff’s claims and DI SM ISSES AS M OOT ASI ’s
a pp e a l of the dis mis sa l and

g ra nt o f s umm ary

jud g me nt o n it s c ounte rc la ims
.