F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

D A V I D B A R

B O Z A , Plaintiff-Appellant
,

v

.

C A L I F O R

N I A A S S O C I A T I O N O F P R O F E S S I O N

A L F I R E F I G H T E R S , a California corporation; C A L I F O R N I A A S S O C I A T I O N O F P R

O F E S S I O N

A L F I R E F I G H T E R S , L O N G -T E R M D I S A B I L I T Y P L

A N ; C A L I F O R

N I A A D M I N I S T R A T I O N I N S U R A N C E S E R V I C E S , I N C ., a California corporation; K

E N N E T H B L

A N T O N ; D E N N I S C A M P A

N A L E ; G E N E D A N G E L ; J A M E S F L O Y D ; C H A R L E S G L U C K ; B R

I A N P I N O M A K I ; W I L L I A M S O Q U I , individually

and as Plan Directors, Defendants-Appellees

. N o. 11-15472

D.C. No. 2:08-cv-02569- F CD-GGHB A

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D A V I D B A R

B O Z A , Plaintiff-Appellant
,

v

.

C A L I F O R

N I A A S S O C I A T I O N O F P R O F E S S I O N

A L F I R E F I G H T E R S , a California corporation; C A L I F O R N I A A S S O C I A T I O N O F P R

O F E S S I O N

A L F I R E F I G H T E R S , L O N G -T E R M D I S A B I L I T Y P L

A N ; C A L I F O R

N I A A D M I N I S T R A T I O N I N S U R A N C E S E R V I C E S , I N C ., a California corporation; K

E N N E T H B L

A N T O N ; D E N N I S C A M P A

N A L E ; G E N E D A N G E L ; J A M E S F L O Y D ; C H A R L E S G L U C K ; B R

I A N P I N O M A K I ; W I L L I A M S O Q U I , individually

and as Plan Directors, Defendants-Appellees

. N o. 11-16024

D.C. No. 2:08-cv-02569- F CD-GGHB A

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D A V I D B A R

B O Z A , Plaintiff-Appellee
,

v

.

C A L I F O R

N I A A S S O C I A T I O N O F P R O F E S S I O N

A L F I R E F I G H T E R S , a California corporation; C A L I F O R N I A A S S O C I A T I O N O F P R

O F E S S I O N

A L F I R E F I G H T E R S , L O N G -T E R M D I S A B I L I T Y P L

A N ; C A L I F O R

N I A A D M I N I S T R A T I O N I N S U R A N C E S E R V I C E S , I N C ., a California corporation; K

E N N E T H B L

A N T O N ; D E N N I S C A M P A

N A L E ; G E N E D A N G E L ; J A M E S F L O Y D ; C H A R L E S G L U C K ; B R

I A N P I N O M A K I ; W I L L I A M S O Q U I , individually

and as Plan Directors, Defendants-Appellants

. N o. 11-16081

D.C. No. 2:08-cv-02569- F CD-GGHB A

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D A V I D B A R

B O Z A , Plaintiff-Appellee
,

v

.

C A L I F O R

N I A A S S O C I A T I O N O F P R O F E S S I O N

A L F I R E F I G H T E R S , a California corporation; C A L I F O R N I A A S S O C I A T I O N O F P R

O F E S S I O N

A L F I R E F I G H T E R S , L O N G -T E R M D I S A B I L I T Y P L

A N ; C A L I F O R

N I A A D M I N I S T R A T I O N I N S U R A N C E S E R V I C E S , I N C ., a California corporation; K

E N N E T H B L

A N T O N ; D E N N I S C A M P A

N A L E ; G E N E D A N G E L ; J A M E S F L O Y D ; C H A R L E S G L U C K ; B R

I A N P I N O M A K I ; W I L L I A M S O Q U I , individually

and as Plan Directors, Defendants-Appellants

. N o. 11-16082

D.C. No. 2:08-cv-02569- F CD-GGH

OPI NI ON

A ppeal from the United States District Court for the Eastern District of California F r ank C. Damrell, J r., Senior District J udg e, Presiding

Arg ued and Submitted November 21, 2014—San F rancisco, California

F iled April 7, 2015B A

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B e fore: J ohn T. Noonan and Sandra S. I kuta, Circuit J udg es and W illiam H. Albritton I I I
, * Senior District J udg e.

Opinion by J udg e I k

uta

SUMMARY * *

ERISA

The panel affirmed in part and reversed in part the district court’s judg ment in a n E R I SA action alleg ing breach o f fiduciary duties in the manag ement and administration of an employ e e welfare benefit plan.

The panel affirmed the district court’s summary judg ment in favor of the defendants o n a claim that they breached their duty to h old p lan assets in trust. Apply ing the common law o f
t r u s t s, the panel held that under 29 U.S.C. § 1103, a per s o n ( leg al or natural) must hold leg al title to the asse t s o f a n employ e e benefit plan with the intent to deal with these a ssets solely for the benefit of the members of that plan

. S u c h a person is the “trustee,” and the resulting r elationship b etween the trustee and the part i c i p a n ts in the plan with respect to a plan’s assets is a “trust” f o r purposes of § 1 103. The panel

* T h e Ho n o rab le W illiam H. A lb ritto n III, Sen i o r District J u d g e f o r th e U.S. District Co u rt f

o r th e Mid d le District o f A lab am a, sittin g b y d esig n atio n

.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.B A

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held that compliance with § 1103 does n ot require p arties to

use ex press words of trust in plan documents.

The panel reversed the district court’s summary judg ment in f avor of the defendants o n a claim that they breached their fiduciary duties by eng ag ing in unlawful self-dealin g. The panel held that the plan administrator’s practice of pay ing its

own fees and ex penses fr o m the plan’s assets was a prohibited transaction a

nd therefore a breach of its fiduciary duty

. Reversing the district court’s partial summary judg ment in favor o f the plaintiff, the panel held that the defendants did
not breach t h eir fiduciary duties by failing to distribute a summary annual report because the plan met the definition o f a “totally unfunded welfare plan.”

COUNSEL

Geoffrey V. W hite (arg

ued), L aw Office of Geoffrey V

. W h ite, San F rancisco, California, for Plain t i f f-Appellant/ Cross-Appellee.

B rendan J

. B e g ley (arg

u ed) a n d L ouis A. Go n z a l e z , J r ., W e intraub T obin Che diak Coleman Grodin, Sacramento, California, for Defendants-Appellees/Cross-Appellants.

Marcia E. B ove (arg

u ed), Senior Trial Attorney ; M. Patricia Smith, Solicitor of L a

bor; T imothy D. Hauser, Ass ociate Solicitor, Plan B enefits S e c u r i t y D i v i s i on; Eliz a

beth Hopkins, Counsel for Appellate and Special L itig ation; and A lex F elstiner
, A t torney , United States Department o f L abor,B A

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Office of the Solicitor, W ashing ton, D .C., for Amicus Curiae Thomas Perez , Secretary

of L a bor.

OP INION

I KUTA, Circuit J udg e:

This appeal re quires us to interpret three different provisions of the Employ ee Retirement I ncome Security A ct of 1974 (ERI SA): ( 1) the requirement in 29 U.S.C. § 1103(a) that “all assets of an employ ee benefit p lan shal l b e h e l d in
trust by one o r more trustees,” sometimes called the “hold in trust” requirement; (2) the prohibition ag ainst fiduciary selfdealing under 29 U.S.C. § 1106; a n d (3) the “summary annual report” requirement under 29 C.F .R. § 2520.104b-10(a). 1

I

This case arises o u t of a d isability benefits dispute between David B arboz a, a retired firefig hter f o r t h e City o f T r a cy , California, and the California Association o f Professional F irefig h ters (CAPF)
, the manag er of an employ e e welfare benefit plan. B arboz a i n i t i ally filed an action a g ainst CAPF a

n d other co-defendants in March 2008, alleg ing that CAPF had withheld certain long -term d isability

1 W e ad d ress th e p arties’ ad d itio n al claim s o n ap p eal an d cro ss ap p eal in an u n p u b lish ed m em o ran d u m d isp o sitio n f iled co n cu rren tly w i t h t h is

o p in io n

. Ba rb o za v. Ca l. Ass’n o f Pro f ’l Firefig h ters ,

_

_ _ F

. A pp ’ x

_ _ _ (9 th Cir. 2 01 5 ).B A

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benefits to which B arboz a was entitled. 2 W hile that r elated action was ong oing
, B arboz a initia ted a second lawsuit (the action o n appeal here) in October 2008 ag ai n s t CAPF
, California Administration I n s u r ance Services, I nc. (CAI SI ), and individual members o f the board of directors for both CAPF and CAI SI (collectively
, the defendants). This t ime, B arboz a alleg ed t h at t he defendants had breached their fiduciary duties under ERI SA in a number of different way s. B arboz a and the defendants filed cross motions for summary judg ment. The district court’s o rder on these cross motions is now before us on appeal.

A

An ex p lanation of CAPF
, CAI SI
, and t h e underly ing employ e e welfare benefits plan is n e c e ssary to understand B arboz a’s ERI SA claims.

According to its c o r

porate by laws, CAPF is a non-profit mutual benefit corporation. I t was incorporated at the behest of “[ v] arious unions and other profi t a n d non-profit mutual benefit associations” for the purpose of providing long -term disability benefits to participating employ ee members (and their beneficiaries) from the various fire departments around California. CAPF accompl i s h es this g oal throug h its

2 T h e d is t r i c t co u

rt d i sm issed Barb o za’ s related actio n f or f ailu re to

ex h au st av ailab le ad m in i strativ e rem ed ies u n d er th e P l an

. We rev ersed in

a pu b lish ed d ecisio n an d rem an d ed f o r f u rth er p ro ceed in g s. Ba r b o za v. Ca l. Ass’n o

f Pro f’l Firefig h t ers , 6 5 1 F.3 d 1 0 7 3 (9 t h C i r

. 2 01 1 ). On

rem an d
, t h e district co u rt g ran ted in p a r t an d den ied in p art each p arty ’ s

m o tio n f o r su m m ary j u dg m en t. O n ap p eal f or a seco n d tim e, w e af

f irm ed in p art an d rev ersed in p art th e d istrict co u rt’ s o rd er an d ag ain rem an ded th e case t o th e d is trict co u rt f o r f u rth er p ro ceed in g s. Ba rb o za v. Ca l. Ass’n o f Pro f’l Firefig h ters , 5 9 4 F. A p p ’ x 9 0 3 (9 th Cir. 2 0 14 ).B A

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manag ement of a long -term disability plan (“ P l a n”), establi s h e d b y a document entitled the CAPF L ong Term Disability Plan (the “Plan I nstrument”).

The parties do not dispute t h a t the Plan is an employ ee welfare b e nefit plan g overned by ERI SA, see 29 U .S.C. § 1002(1)(A), which receiv e s its funding e x clusively from Plan p a rticipants and pay s all benefits solely from Plan assets. Under the terms of the Plan I nstrument, all funds, property , and additional assets held b y the Plan are maintained

ex c lusively in the name of CAPF f or the benef

i t o f t he participants. CAPF manag es the assets of the Plan throug h its board o f directors, and supervises the pay ment of benefits to Plan memb e r s made pursuant to the terms of the Plan I nstrument. The Plan I nstrument provides that the Plan will be a dministered on a day -to-day basis by “a qualified California-licensed third party administrator” pursuant to an administrative services ag reement that is consistent with the
terms of the Plan I nstrument and is approved by C APF ’s board of directors. Pursuant to this p r o v i s i o n, the Plan employ s the California A dministration I n s u rance Services, I nc. (CAI SI ) to act as the Plan’s administrator u nder CAPF ’s supervision.

The Plan f

unctions as follows. F irst, each participant makes a mon t h l y c o ntribution to the Plan in an amount established by the b o a rd o f directors of CAPF

. These contributions a

re deposited into a Wells F arg o B a nk c hecking account, for which officers of CAI SI are the signatories. W h en a Plan part i c i p ant suffers total disability from an injury
, sickness, o r preg nancy , the p articipant s u b mits evi d ence of this disability to CAI SI
, which then determines whether the participant is e lig ible to receive benefits under the criteria provided by the Plan I n strument. I f the participantB A

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is elig ible, CAI SI issues a check drawn on the Wells F argo account for the appropriate amount.

I n addition to pay ing benefits to elig ible p a rtici p a nts, CAI SI also pay s Plan ex penses from the W ells F arg o account, including its own admi n istrative service fees. CAI SI g ives CAPF quarterly financial statements itemiz ing the Plan’s fees and ex p enses.

B

B a rboz a alleg es that the defenda n t s violated ERI SA throug h numerous breaches of their fiduciary duties in their
manag ement and administration of the Plan. The district
court g ranted the defendants’ summary judg ment motion on B arboz a’s claims that the defendants breached their fiduciary duties b y failing to hold Plan assets in trust, and by allowing CAI SI to p ay its o wn fees f rom the W ells F arg o account. The district court g ranted B arboz a’s summar y j u dg ment motion

on his c laim that defendants breached their fiduciary d uty b y failing to distribu t e a s u mmary annual report to Plan participants. T he parties subseq u ently broug ht this appeal and corresponding

cross appeal.

I I

W e have jurisdiction under 28 U.S.C. § 1291. W e r eview

a district c ourt’s d ecision on cross motions for summary judg ment d e novo. See Guatay Christian Fellowship v. Cnty. of San Diego
, 670 F

. 3d 957, 970 (9th Cir. 2 0 11). W e m ust determine, taking the evidence in the lig ht most favorable to the nonmoving party , whether there are any g enuine disputes of material f

act and whether the movi n g party is entitled toB A

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judg ment as a matter of law. See Olsen v. Idaho State B d. of Med. , 363 F

. 3d 916, 922 (9th Cir. 2004).

A

W e first consider B arboz a ’ s claim that the d efendants violated E RI SA’s h o ld-in-trust requirement. ERI SA requires that, subject to ex ceptions not relevant here, “all assets of an employ e e b ene f

i t p l an shall be h eld in trust by one or more trustees.” 29 U.S.C. § 1103(a). “Such trustee or trustees shall b e either named in the trust instrument or in the p lan instrument

. . . o r a p p o i nted by a p erson who is a named fiduciary .” Id. The trustee or trustees “shall have ex clusive authority and discretion to manag e and control the assets o f the p lan.” Id. The ap p l icable reg ulations echo the statute, stating that with an ex c eption not applicable here, “all a ssets

o f an employ ee b enefit plan shall be held in trust by one o r

more trustees pursuant to a written trus t i n s trument.” 29 C.F .R. § 2550.403a-1(a). N either ERI SA nor the reg ulations define the terms “trust,” “trustee,” or “trust instrument.”

I n the absence of any statutory or reg ulatory d e finition o f these terms, we apply the “familiar m a x im that a statutory term is g enerally p resumed to have its c o m mon-law meaning .” E.g.
, Evans v. United States
, 504 U.S. 255, 259 (1992) (internal quotation marks o m itted). T h is max im has particular force in the ERI SA co n t e x t , because the Supreme Court has held that “ Cong ress in v oked the common law o f
trusts to d efine the g eneral scope” of fiduciary duties w hen it drafted the statute. Varity Corp. v. Howe
, 516 U.S. 489, 496 (1996) (quoting Cent. States, Se. & Sw. Areas P e nsion Fund

v

. Cent. Transp., Inc.
, 4 72 U.S. 559, 570 (1985)). O u r

a n aly sis therefore “both starts and ends” with the o rdinary meaning of the terms “trust” and “trustee,” as provided by theB A

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common law of trusts. See Un i ted States v. Lazarenko
, 564 F .3d 1026, 1039 (9th Cir. 2009).

The common l a w o f trusts has its roots in medieval Eng land and the ancestor of the trust, the land conve y a n ce d evice termed the “use.” S ee Amy Hess, Georg e G. B og ert & G e o r g e T. B og ert, The Law of Trusts & Trustees § 2 (3d ed. 2007) ( h ereinafter Hess et al., Trusts & T r u s t ees ). The

us e w a s f i r st employ ed to g ive g ifts of property to relig ious friars whose v ows prohibited them from o w n ing property themselves, but by the beg inning of the fifteenth c e n tury , it

was the leading me a n s o f land convey ance. I d. ; see also W illi a m M

. McGovern, Sheldon F

. K urtz & D avid M. Eng lish, W

i l ls, Trusts & Estates 370 (4th ed. 2 010) (hereinafter McGovern et al., W ills, Trusts & Estates ). I n its simplest form, the use was a leg al relationship by which one party , called the “feoffee to uses,” ag reed to accept and hold leg al title to property on behalf an d f o r t he use of the beneficiary party , called the “cestui q ue use.” See Hess et al., Trusts & Trustees § 2 ; McGovern et. al, W ills, T r u s t s & Estates at 370. Althoug h King Henry VI I I attempted to abolish this practice throug h the passag e of the Statute o f Uses in 1 535, the statute left u n af f ected a number of uses, including a use by which the feoffee to uses (the modern day “trustee”) took on active administrative duties when it ag reed
to hold the property on behalf of the cestui q u e u se (the modern d ay “beneficiary ”). Hes s e t al., Trusts & Trustees § 4, 5. T he uses that survive d the Statute of Uses became known as “ tr u s t s ” and were leg ally enforceable in courts o f equity in E ng land and, later, in the United States. Id. § 5; see als o Da v i s v. United S tates , 495 U.S. 472, 481 (1990) (holding that the statutory phrase “for the use of ” “sug g ested

a trust relationship” because “[ f] rom the dawn of E n g l ishB A

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common l aw t h r oug h the present, the word ‘use’ has been employ e d to refer to various forms of trust arrang ements”).

As this leg al relationship became more pervasive in both Eng land and its American c o l o n ies (and later the United States) in the eig hteenth a n d nineteenth centuries, leg al scholars soug ht to identify its main components. After
survey ing various definitio ns of the term “trust” b etween 1734 and 1897, one scholar c o n c luded that a trust was “an oblig ation imposed either ex pressly or by implication of law wh e r eby the oblig o r is bound to deal with property over which he h as control for the benefit of certai n p e rs o n s o f

w h o m he may himself b e one, a n d any one of whom m a y

e n f o r ce the oblig ation.” W alter G. Hart, W h at Is a Trust ?
, 15 L .Q. Rev. 294, 301 (1899). A later scholar observed that the law of trusts appeared “to have two aspects, the creation of personal relations, and the creation o f r i ghts in rem.” Pierre L epaulle, Civil Law Substitutes for Trusts
, 36 Yale L .J

. 1126, 1126 (1927). Thus, at common la w , t h e term “trust” referred to a leg al r elationship by which o n e p arty , the “trustee,” ag reed to hold and a dminis t e r property (the trust “res”) for the benefit of another.

Consistent with this traditional common law do ctrine, both scholars and courts define the terms “trust” and “trustee”

as leg a l relationships. 3 E.g.
, Austin W akeman Scott, W illiam

3 Co u rts an d treatises d i f f eren t iate b etw een th e tru s t as a l e g a l relatio n sh ip
, as it ex isted at co m m o n law
, an d “ th e u se o f t h e t r u st as a

su b stitu t e f or in co rp o ratio n , as in th e case o f th e so

- called b u sin ess tru st

o r Massach u s e t t s t r u s t.” S co tt & Asch er o n Tru sts § 2 .1 .2

. W h ile th e latter d ev ice is so m etim es ref erred to as a “ tru st,” it is n o t a co m m o n law
tru s t relatio n s h ip

. Rath er, a b u sin ess o r “ ‘ Massach u setts T ru st’ is a f o rm

o f b u sin ess o rg an iz a t io n ” sim i lar to a co rp oratio n

. Hech t v. Ma lley
, 2 6 5 U.S. 1 4 4
, 1 4 6 (1 9 24 ); see a lso No rth sta r Fin

. Ad viso rs In c. v. S

ch wa bB A

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F ranklin F ratcher & Mark L

. Ascher, Scott & A scher on Trusts § 2.1 .4 (5th ed. 2006) ( hereinafter Scott & Ascher on T r u sts ) (“W e have said that a trust is a relationship w i t h certain characteristics.”); Id. § 2 .2.2 (“A trust is a relationship with respect to property held by a trustee.”). F or ex ample, the Restatement ( Third) of Trusts defines the term “ trus t ” as “a fiduciary relati o n s h ip with respect to property , a rising from

a manifestation of intention to create tha t r elationship a nd subjecting the person who h olds title to the property to duties
to deal with it for the b enefit of c harity or for one or m ore pe rs o n s, at least one of whom is not the sole trustee.” Restatement (Third) of T rusts § 2 (200 3). Under the R estatement’s definition, “[ t] he term ‘trust’ also includes public funds and public a n d private pension-fund
arrang ements in trust form.” Id. § 2 cmt. a. The Restatement defines “trustee” as simply the per s o n , including a corporation or unincorporated associ ation, “who holds
prop e rt y i n t r u s t .” Id. § 3(3); see also id § 3(3) cmt. e. I t is
not necessary to use specific words to create a trust. Georg e T. B og ert, Trusts § 11 (6th ed. 1987). Rather, “[ i] f the words used convey the intent to establish a trust, they will have that effect.” I d. ; see also United States v. Mitchell
, 463 U.S. 206, 225 (19 83) (holding in a different contex t that a trust relationship arises w h ere “[ a] ll of the necessary elements o f

In vs. , No

. 1 1

- 1 7 1 8 7
, 2 0 1 5 W L 10 1 0 0 7 9
, at * 1 (9 th Cir. March 9
, 20 1 5) (d istin g u ish in g “ a Massach u setts tru st f ro m t h e o rd in ary o r p riv ate t

ru st”). A s su ch
, a b u sin ess tru st is g en erally g o v ern ed b y ru les ap p licab le to th at f o rm o f b u s in ess o rg an iza t i o n

. See Resta t emen t ( Th ird ) o f Tru sts § 1

cm t.b (2 0 0 3 ) (ex clu d in g “ [t]h e law relatin g to th e u se o f tru sts as d ev ices f o r co n d u ctin g b u sin ess an d in v estm en t activ ities” f ro m its sco pe b ecau s e

su ch d ev ices are b u sin ess arran g em e n t s “b est dealt w ith i n co n n ectio n

w ith b u sin ess asso ciatio n s” an d m o re “ p ro p e r ly g o v ern ed b y law s ap p licab le to in v estm en t co m p an ies an d to th e issu an ce an d s ale of

secu rities” rath er th an

th e co m m o n law o f tru s ts).B A

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a common-law trust a

re present: a trustee (the United States),

a beneficiary (the I ndian allottees), and a trust corpus (I ndian timber, lands, and funds)” notwithstanding the f ac t that “nothing is said ex pressly i n the authoriz ing or underly ing
statute (or o ther fundamental document) about a trust fund, o r

a trust o r fiduciary c onn e c t i o n” (quoting Navajo Tribe of Indians v. United States
, 224 Ct. Cl. 171, 183, 624 F .2d 981, 987 (1980))).

Apply ing these c o mmon law definitions to E RI SA’s requirement that “all assets of an employ ee benefit plan shall be h el d i n trust by one o r more trustees,” we conclude that

u n d e r 29 U.S.C. § 1103(a), a person (leg al o r natural) must hold leg al title to the assets of an employ ee benefit p lan with the intent to d eal with these assets solely for the b enefit of the members of that plan. Such a person is the “trustee,” and the resulting r elationship between the trustee and the participants in the plan w ith respect to a plan’s assets is a “tru s t ” f o r purposes of § 1103(a).

Neither B arboz a nor the Department of L abor ( as amicus curiae) offers an alternative definition of these terms. Rather, they arg ue, in effect, that compliance with § 1103(a) requires

a party to record its responsibilities with respect to the a ssets of an employ ee benefit plan in a d o c u m ent that is entitled “trust instrument,” uses the terms “trust” and “trustee,” a nd

ex p ressly states that the party is holding the assets “in trust.” F urther, the D epartment appears to interpret its reg ulation at 29 C.F .R. § 2 5 5 0

. 4 03a-1 as requiring parties to use ex press words of trust to comply

with § 1103(a).

W e r e ject this arg u ment. F irst, while it may be bet t e r practice for parties e ntering into a trust relationship to u s e

ex p ress words of trust, and clearly label the trustees,B A

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beneficiaries, and trust res using defined terms, Cong ress did
not impose such a requirement in § 1103(a). Nor can we read the Dep a r tment’s reg u lations as imposing such a requirement. On i t s fa ce, the reg ulatory statement that “all assets of an employ e e b enefit plan sha l l b e h eld in trust by one or more trustees pursuant to a w ritten trust instrument,” 29 C.F .R. § 2550.403a-1(a), does not require that specific terminolog y be used to meet the “hold in trust” requirement in § 1103(a), and the Department does not point to any other reg ulations o r g uidance document providing such an interpretation. To the

ex tent that the Department’s amicus brief now interprets this
reg ulation as requiring e x press words of trust, it is n ot entitled
to deference under Auer v. Robbins
, 519 U.S. 452 (1997). Not only do we “find the [ Department’s] interpretation of its
reg ulations quite unpersuasive” for the reasons stated above, but the Department’s interpr e t a tion here, raised f or the first time in a n amicus brief without the o ppor t u n i t y for public comment, “plainly lacks the hallmark s o f thoroug h consideration.” See Christopher v

. SmithKline B e echam Corp. , 132 S. Ct. 2156, 2168–69 (2012). 4

B e cause we reject B arboz a’s and t h e Department’s
arg uments that the “hold in tr u s t ” requirement of § 1103(a) requires the creation of a document including ex press words of trust, we conclude that the Plan at issue here complies with § 1103(a). The Plan I n strument requires CAPF to hold leg al title to “ all property , monies and contract rig hts” as well as all of the f unds maintained in connection with the Plan. CAPF holds these assets for the Plan on b eh a lf of the participants.

4 W e tak e n o p o sitio n o n th e qu estio n w h eth er a reg u lato ry i n terp retatio n

o f § 1 10 3 (a) as req u irin g th e u se o f th e term s “ tru stee,” “ b en ef iciary ” an d

“ t ru st res” w ou ld b e a perm issib le in terp retatio n o f th e statu te o r b e

en titled to d ef

eren ce.B A

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The Plan I nstrument thus establishes a fiduciary relationship between CAPF
, a s the trustee, and th e participants, a s beneficiaries, with respect to the property contributed to the Plan (the trust res); this constitutes a trust acc o rding to its

common law definition. B ecause the Plan I nstrument here is

a written instrument that establishes a trust relationship, it is

a written trust ins t r u m e n t for p urposes of § 1103(a) and 29 C.F .R. § 2 5 50.403a-1(a). Cf. Mitchell
, 4 63 U.S. at 225; Georg e T. B og ert, Trusts § 1 (6th ed. 1987) (“T h e trust instrument is the document by which property int e r ests a re vested in the trustee a

nd beneficiary a

n d the rig hts and duties of the parties (called the trust terms) are set forth.”).

W e likewise reject B arboz a’s remaining arg uments on this issue. Althoug h B arboz a arg ues that “a corporation like CAPF is not a trust,” CAPF itself does not p u r p o r t to be a tr ust; rather, it serves as the trustee in the trust relationship established by the written Plan I n strume n t. 5 See, e.g. , Restatement (Third) of T rusts § 3(3) & c m t

. e (noting that both corporations and unincorporated associations can serve

as trustees in a trust r elationship). B arboz a also arg ues that CAPF failed to maintain “ex clusive author i t y a nd control”

over the assets of the Plan in violation of ERI SA because the Plan I nstrument deleg ates t h e administration o f the Plan to CAI SI

. This arg u m ent fails because the Plan I nstrument entrusts CAI SI with the administration of the Plan under the
manag ement and supervision of CAPF ’s board of directors.

5 In th e w eek b ef

o re o ral arg u

m en t, th e d ef

en d a n t s fi l e d a m o tio n req u estin g t h a t w e tak e j u d icial n o tice o f IRS p ap erw o rk f iled b y CA P F d em on stratin g th at CA P F’ s assets are “c u r r e n tly h eld in t w o t ru s ts.” B ecau se it is n o t clear t h at t h ese d o cu m en ts d em o n strate m atters

“ g en erally k

n o w n w ith in th e t

rial co u rt’ s territo rial j u risd ictio n ” w e d en y th is m o t io n

. S

ee Fed . R. Ev id . 2 0 1(b )(1 ).B A

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W e conclude that t h e Plan here complies with the requirement that “all assets of an employ ee benefit plan shall be held in trust by one or more trustees,” 29 U.S.C. § 1103(a), and therefore affirm the district court’s g rant o f sum m a ry judg ment to the defendants on this issue.

B

W e n ex t consider whether the district court erred in
g ranting sum m a r y judg ment to the defendants on B arboz a’s claim that the defendants b r e a c h e d their fiduciary duties b y eng a g i n g in unlawful self-dealing

. This dispute centers on CAI SI ’ s practice of pay ing its own fees and ex penses from the Plan’s assets held in the W ells F arg o account. B arbo z a arg ues that this practice constitutes a per se violati o n o f ERI SA’s prohibition ag ainst se lf-dealing under 2 9 U .S.C. § 1106(b)(1) because CAI SI is a f iduciary d e a l ing with the
assets of the plan for its own account. The p a rties do not dispute that CAI SIis a fiduciary of the Plan.

Section 1106 prohibits a number of transactions b etween ERI SA welfare b e n e fi t p lans and other parties. F irst, § 1106(a) states that “[ e] x cept as provided in section 1108,”

w h i c h establishes ex emptions from the list of prohibit e d transactions, a fiduciary cannot cause the plan to e ng ag e in a number of transactions with “a party in interest.” 29 U.S.C. § 1 1 06(a). A “party in interest” is defined i n 2 9 U .S.C. § 1002(14) to include all “those e ntities that a fiduciary mig ht be inclined to favor at the ex pense of the plan’s beneficiaries,” Harris Trust & Sav. Bank v. Salomon Smith Barney, Inc.
, 530 U.S. 238, 242 (2000), including a nother fiduciary or an administrator of an employ ee benefit plan.B A

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Second, § 1106(b) prohibits a fiduciary from eng ag ing in certain ty pes of transactions with respect to a plan:

A fiduciary

with respect to a plan shall not—

(1) deal with the assets of the p lan in his own interest or for his own account,

(2) in his individual o r i n a n y other capacity

a ct in any transaction involving the plan on behalf of a p arty (or represent a party ) whose interests are a dverse to the interest s of the plan o r the interests of its p articip a n t s o r beneficiaries, or

(3) receive a

ny consideration for his own personal account from any party dealing with such plan in c onnection with a t ransaction involving the assets of the plan.

29 U.S.C. § 1106(b). F inally
, § 1106(c) prohibits any transfer of real or personal property to a p l a n b y a party in interest. 29 U.S.C. § 1 106(c). These prohibited transactions constitute “per se violations o f ERI SA.” W aller v

. Blue Cross of Cal.
, 32 F .3d 1337, 1345 (9th Cir. 1994).

ERI SA carves out a number of ex emptions to these broad prohibitions. See 29 U.S.C. § 1108. Among others, § 1108(c)(2) states that “[ n] othing in section 1106 of this title shall be construed to p rohibit any f iduciary from

. . . r eceiving
any reasonable compensation for services rendered, or f or the reimbursement of ex penses properly and actually incurred, in the performance of his duties with the plan . . . .” 28 U.S.C. § 1008(c)(2). This ex emption for reasonable compensa t i o nB A

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under 2 9 U

. S

. C

. § 1008(c) does not apply
, however, to a fiduciary w h o e ng ag es in a prohibited transaction under 29 U.S. C

. § 1 1 0 6 (b)(1) by pay ing itself from the assets of a welfare benefit plan. Patelco Credit Union v. Sahni
, 262 F .3d 897 ( 9th Cir. 2001). I n other words, while a plan may pay a fiduciary “reasonable c om p e n sation for services rendered” under 29 U .S.C. § 1108, the fiduciary may not eng ag e in selfdealing under 2 9 U.S.C. § 1 106(b) by p ay ing itself from p lan funds. See P atelco
, 262 F

. 3 d a t 910–11. Such conduct constitutes a per se v iolation of § 1006(b)(1). See Pat e l co , 262 F .3d at 911.

Here, C A I SI is a f

iduciary that paid its own fees from Plan a ssets, and thus eng ag ed in a prohibited transaction under 29 U .S.C. § 1106(b)(1). See P atelco
, 262 F .3d at 911. B ecause § 1108 ( c ) ( 2 ) ’ s s a f e h a r b o r f o r fi duciary compensation is not applicable in this contex t, w e c onclude that CAI SI breached its fiduciary dut i es. See Patelco
, 2 62 F .3d at 911. 6 W e therefore reverse the district court’s

o r d er g ranting summary judg ment to the d efendants, a nd remand with instructions to enter summary judg ment in favor of B arboz a on this issue.

C

F inally
, we consider B a

rboz a’s claim that the defendants breached their fiduciary duties b y failing to distribute a summary a

nnual report. Under the reg ulations p r o mulg ated by the Department, an adminis t rator of a n employ ee benefit

6 B ecau se f

id u ciary self

- d ealin g u n d er 2 9 U.S.C. § 1 1 0 6 (b )(1 ) is a per

se v io latio n o f ERISA
, it i s irrelev an t th at CA ISI w as au t h o rized t o p ay its

o w n f ees an d ex p en s e s fro m P lan assets pu rsu an t to its ad m in istrativ e

serv ices ag reem en t w ith

CA P F.B A

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plan is r equired to p rovide a summary a n n u a l report to e ach Plan member annually under 29 C.F .R. § 2520.104b-10(a) unless the administrator is otherwise ex empt f rom doing s o under 29 C.F

. R. § 2520.104b-10(g )

. 2 9 C.F .R. § 2520.104b10(g ) ex e mpts, among other plans, a “ totally unfunded welfare p lan described in 29 C.F .R. § 2520.104-44(b)(1)(i),” from this summary annual report requirement.

A “totally unfunded welfare plan d escribed in 2 9 C.F .R. § 2520.104-44(b)(1)(i),” is “[ a ] n employ ee welfa r e benefit plan un d e r t he terms of which benefits are to be paid

. . . [ s] olely from the g eneral assets of the employ er or employ ee org aniz ation maintaining the plan.” 2 9 C.F .R

. § 2 5 2 0.104- 44(b)(1)(i). An “employ ee org aniz ation” is defined in ERI SA

as “any employ ees’ beneficiary association org aniz ed for the
purpose in whole o r in p art, of establishi n g” a n “employ ee benefit plan.” 29 U .S.C. § 1002(4). An “ e mploy ee benefit plan” is defined in turn as “an employ e e welfare benefit p lan

or an e mploy ee p ension benefit plan or a p l a n which is both

an employ ee welfare benefit plan and an employ ee pension benefit plan.” 29 U.S.C. § 1002(3). According ly
, 29 C.F .R. § 2520.104b-10(g ) ex empts an employ ee welfare benefit p lan that p ay s benefits from the g eneral assets of an employ ee org aniz ation, which includes an employ ees’ b eneficiary association org an i z e d for the p urpose of establishing such a plan.

The Plan at issue here meets the definition of “ a t o tally unfunded welfare plan.” S ee 29 C.F .R. § 2520.104b-10(g ) ( 1 ). F irst, the Plan is an employ ee welfare benefit plan because it is a p l a n established “for the purpose of providing for its participants or their beneficiaries” long

- term disa b ility benefits. 29 U .S.C. § 1 002(1)(A). Second, CAPF is an “employ ee org aniz ation” as defined in 29 U.S.C. § 1002(4)B A

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b e c a use, according to its b y laws, it was incorporat e d specifically fo r the purpose of establishing and maintaining

a long -term disability benefits p lan. F inally
, under the terms of the Plan I nstrument, b e nefits are paid solely from the
g eneral assets of CAPF , which is the employ ee org aniz ation that maintains the Plan. A ccording ly
, the Plan is e x empt from the summary

annual report requirement. 7

W e theref

o re reverse the district court’s order g ranting
summary judg ment to B arboz a, a nd r emand with instructions
to gr a nt the defendants’ motion for summary judg ment on this issue. 8

AF F IRMED IN P A RT, REVERSED IN P ART, AND REMANDED.

7 T h e P lan is also ex em

p t f ro m th e su

m m ary an n u al rep o rt req u irem en t

as a “ d u es f

in an ced w elf

are p lan w

h ich m eets th e req u irem en ts o f 2 9 C.F.R. 2 52 0 .1 0 4- 2 6 .” 2 9 C.F.R. § 2 5 2 0 .1 0 4b

- 1 0 ( g )

. “ Du es f in an ced

w elf are p lan s” are “w e l f

are b en ef it p lan s m ain tain ed b y an em p lo y ee

o rg an i zatio n , as th at term is d ef in ed i n [2 9 U.S.C. § 1 0 0 2 (4 )], p aid f o r o u t

o f th e em p lo y ee org an izatio n ’ s g en eral assets, w h ich are d eriv ed w

h o lly

o r p artly f ro m m em b ersh ip d u es, an d w

h ich co v er em

p lo y ee o rg an izatio n

m em b ers an d th eir b e n ef

iciaries.” Id

. § 2 5 2 0 .1 0 4

- 2 6 (b ). A s ex p lain ed

su p ra , th e P lan is a w elf

are b en ef i t p lan u n d e r 2 9 U.S.C. § 1 0 0 2 (1 )(A ) b ecau s e it is a p lan estab lish ed “ f o r th e pu rp o se o f pro v id in g f o r its
p articip an ts o r th eir b en ef i ciaries” lo n g

- term d isab i l i t y b en ef its; it is

m ain tain ed b y C A P F, an em p lo y ee o rg an i zatio n as d ef in ed b y 2 9 U.S.C. § 1 0 0 2 (4 ); an d t h e s e b e n e fits are paid f o r o u t o f CA P F ’ s g en eral assets,

w h ic h a r e d eriv ed in p art f ro m m em

b ersh ip d u es, to co v ered Plan

m em b ers an d th eir b en ef

i ciaries.

8 Each p arty

sh all b ear its o w

n co sts o n ap p eal.