No. 17-35076

IN THE UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT

R. ALEXANDER ACOSTA, Secretary, 

United States Department of Labor, 

Plaintiff-Appellee, 

v. 

MATTHEW D. HUTCHESON, 

Defendant-Appellant. 

On Appeal from the United States District Court for Idaho 

Case No. 1:12-cv-00236-EJL 

The Honorable Judge Edward J. Lodge 

BRIEF FOR THE SECRETARY OF LABOR

NICHOLAS C. GEALE 

Acting Solicitor of Labor 

G. WILLIAM SCOTT 

Associate Solicitor for 

Plan Benefits Security 

THOMAS TSO 

Counsel for Appellate and Special Litigation 

D. MARC SARATA 

Trial Attorney 

Plan Benefits Security Division 

Office of the Solicitor 

U.S. Department of Labor 

200 Constitution Ave., N.W., Rm. N-4611 

Washington, D.C. 20210 

(202) 693-5637
i 

TABLE OF CONTENTS 

 Page 

TABLE OF AUTHORITIES ............................................................................... ii 

STATEMENT OF JURISDICTION.................................................................... 1 

STATEMENT OF THE ISSUES......................................................................... 1 

STATUTORY AUTHORITIES .......................................................................... 2 

STATEMENT OF THE CASE ............................................................................ 2 

SUMMARY OF THE ARGUMENT .................................................................. 6 

ARGUMENT ....................................................................................................... 9 

I. Standard of Review .............................................................................. 9 

II. The Stay of Discovery Is Irrelevant to the Propriety of the Summary 

Judgment Decision ............................................................................. 10 

III. The Undisputed Facts Show That Mr. Hutcheson Committed a 

Prohibited Transaction Under ERISA ................................................ 13 

IV. Mr. Hutcheson's Asserted "Triable Issues of Fact" and Legal 

Arguments are Immaterial and Without Merit ................................... 16 

A. Mr. Hutcheson's Factual Arguments Do Not Raise a Dispute 

 Concerning a Material Fact ...................................................... 17 

1. The Independent Fiduciary's Actions Since Mr. Hutcheson's 

Fraud Fail to Negate Mr. Hutcheson's ERISA Violations .. 17 

 
ii 

TABLE OF CONTENTS-(continued) 

2. Mr. Hutcheson's Filing A Form Allegedly Removing and 

Later Adding Himself As A Member/Manager of Green 

Valley Does Not Insulate Him From Liability For 

Transferring Money From ERISA Plans to His 

Company ............................................................................. 18 

3. Mr. Hutcheson's Liability For Committing a Prohibited 

Transaction Does Not Depend On What Assets Were "Plan 

Assets" After Mr. Hutcheson Removed $3 Million From the 

Trust .................................................................................... 19 

B. Mr. Hutcheson's Legal Arguments Are Without Any Merit ..... 22 

1. Voluntary Dismissal Of The Trust Successor Fiduciary's 

State Law Claims Against Mr. Hutcheson Has No Effect 

On this Case ........................................................................ 22 

2. Department of Labor's Interpretative Bulletin 94-1 Did Not 

Allow Mr. Hutcheson To Breach His Duties Under ERISA 

Sections 404 and 406 .......................................................... 25 

3. Plan Documents Cannot Excuse Prohibited Transactions 

and Statutory Violations ..................................................... 26 

V. The Double Jeopardy Clause Does Not Apply to Civil Relief Sought 

By The Secretary Under ERISA ........................................................ 28 

CONCLUSION .... ............................................................................................. 33 

STATEMENT OF RELATED CASES ............................................................. 33 

CERTIFICATE OF COMPLIANCE 

CERTIFICATE OF SERVICE 

 
iii 

TABLE OF AUTHORITIES 

Federal Cases: 

Ah Quin v. Cty. of Kauai Dep't of Transp., 

733 F.3d 267 (9th Cir. 2013) ................................................................................ 19 

Am. Title Ins. Co. v. Lacelaw Corp., 

861 F.2d 224 (9th Cir.1988) ................................................................................. 14 

Anderson v. Liberty Lobby, Inc., 

477 U.S. 242 (1986) ............................................................................................... 9 

Austin v. United States, 

509 U.S. 602 (1993) ............................................................................................. 32 

Beck v. Levering, 

947 F.2d 639 (2d Cir. 1991) .......................................................................... 24, 29 

Breed v. Jones, 

421 U.S. 519 (1975) ............................................................................................. 28 

California v. IntelliGender, LLC, 

771 F.3d 1169 (9th Cir. 2014) .............................................................................. 24 

Celotex Corp. v. Catrett, 

477 U.S. 317 (1986) ............................................................................................... 9 

Central States, Se. & Sw. Areas Pension Fund v. Central Transport, Inc., 

472 U.S. 559 (1985) ............................................................................................. 27 

Chance v. Pac-Tel Teletrac Inc., 

242 F.3d 1151 (9th Cir. 2001) .............................................................................. 12 

Chao v. USA Mining, Inc., 

No. 1:04-CV-1, 2007 WL 208530 (E.D. Tenn. Jan. 24, 2007) ............... 30, 31, 32 

Clay v. United States, 

537 U.S. 522 (2003) ...................................................................................... 11 n.5 
iv 

Federal Cases-(continued): 

Donovan v. Cunningham, 

716 F.2d 1455 (5th Cir. 1983) .............................................................................. 24 

Durkin v. Shea & Gould, 

92 F.3d 1510 (9th Cir. 1996) ......................................................................... 15 n.6 

Fifth Third Bancorp v. Dudenhoeffer, 

134 S. Ct. 2459 (2014) ......................................................................................... 27 

Gilliam v. Edwards, 

492 F. Supp. 1255 (D.N.J. 1980) .......................................................................... 21 

Harris Tr. & Sav. Bank v. Salomon Smith Barney, Inc., 

530 U.S. 238 (2000) ............................................................................................. 21 

Helvering v. Mitchell, 

303 U.S. 391 (1938) ...................................................................................... 28, 29 

Herman v. S.C. Nat'l Bank, 

140 F.3d 1413 (11th Cir. 1998) ............................................................................ 24 

Hudson v. United States, 

522 U.S. 93 (1997) ............................................................................ 28, 29, 30, 31 

Ivers v. United States, 

581 F.2d 1362 (9th Cir. 1978) .............................................................................. 15 

Kennedy v. Mendoza–Martinez, 

372 U.S. 144 (1963) ............................................................................................. 30 

Leisek v. Brightwood Corp., 

278 F.3d 895 (9th Cir. 2002) .................................................................................. 9 

Lopez v. Smith, 

203 F.3d 1122 (9th Cir. 2000) (en banc) ................................................................ 9 

Martin v. Rutledge, 

807 F. Supp. 693 (N.D. Ala. 1992) ...................................................................... 30 
v 

Federal Cases-(continued): 

McCarthy v. United States, 

394 U.S. 459 (1969) ............................................................................................. 15 

Mertens v. Black, 

948 F.2d 1105 (9th Cir. 1991) .............................................................................. 24 

Moore v. Illinois, 

55 U.S. 13 (1852) ................................................................................................. 28 

Patelco Credit Union v. Sahni, 

262 F.3d 897 (2001) ............................................................................................. 21 

Paulo v. Holder, 

669 F.3d 911 (9th Cir. 2011) ......................................................................... 15 n.6 

Rex Trailer Co. v. United States, 

350 U.S. 148 (1956) ............................................................................................. 29 

Santos v. Alaska Bar Ass'n, 

618 F.2d 575 (9th Cir. 1980) ................................................................................ 22 

Sec'y United States Dep't of Labor v. Kwasny, 

853 F.3d 87 (3d Cir. 2017) ............................................................................ 23, 24 

Sec'y of Labor v. Fitzsimmons, 

805 F.2d 682 (7th Cir. 1986) (en banc) ......................................................... 24, 25 

Shapley v. Nevada Bd. of State Prison Comm'rs, 

766 F.2d 404 (9th Cir. 1985) ................................................................................ 22 

Solis v. The Eichholz Law Firm, P.C., 

No. 4:10-CV-162, 2011 WL 710993 (S.D. Ga. Feb. 22, 2011) ........................... 30 

Turner v. Rogers, 

564 U.S. 431 (2011) .................................................................................... 28 n.12 
vi 

Federal Cases-(continued): 

United States v. $405,089.23, 

33 F.3d 1210 (9th Cir. 1994), overturned by, 

United States v. Ursery, 

518 U.S. 267 (1996) ............................................................................................. 32 

United States ex rel. Marcus v. Hess, 

317 U.S. 537 (1943) ............................................................................................. 28 

United States v. Frady, 

456 U.S. 152 (1982) ...................................................................................... 11 n.5 

United States v. Hutcheson, 

603 F. App'x 613 (9th Cir. May 15, 2015) ................................................... passim 

United States v. Podell, 

572 F.2d 31 (2d Cir. 1978) ................................................................................... 15 

United States v.Ward, 

448 U.S. 242 (1980) ............................................................................................. 29 

United States v. Ursery, 

518 U.S. 267 (1996) ............................................................................................. 32 

Visendi v. Bank of Am., N.A., 

733 F.3d 863 (9th Cir. 2013) ........................................................................ passim 

Federal Statutes: 

Comprehensive Drug Abuse Prevention and Control Act of 1970:

21 U.S.C. § 881(a)(4) ............................................................................................... 32 

21 U.S.C. § 881(a)(7) ............................................................................................... 32 

Judicial and Judicial Procedure:

28 U.S.C. §1291 ......................................................................................................... 1 
vii 

Federal Statutes-(continued): 

28 U.S.C. § 1331 ........................................................................................................ 1 

28 U.S.C. § 2255 ............................................................................. 10, 11 n.5, 14, 33 

Employee Retirement Income Security Act of 1974, 

 as amended, 29 U.S.C. § 1001 et seq.:

 Section 2, 29 U.S.C. § 1001 ................................................................................... 1 

 Section 3(14)(A), 29 U.S.C. § 1002(14)(A) ......................................................... 21 

 Section 3(14)(G), 29 U.S.C. § 1002(14)(G) .................................................. 18, 21 

 Section 404, 29 U.S.C. § 1104 ............................................................................. 25 

 Section 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D) ................................................ 27 

 Section 406, 29 U.S.C. § 1106 .................................................................... 1, 6, 25 

 Section 406(a), 29 U.S.C. § 1106(a) .................................................................... 21 

 Section 406(a)(1), 29 U.S.C. § 1106(a)(1) ........................................................... 21 

 Section 406(a)(1)(B), 29 U.S.C. § 1106(a)(1)(B) ......................................... 18, 21 

 Section 406(a)(1)(D), 29 U.S.C. § 1106(a)(1)(D) ................................... 18, 21, 27 

 Section 406(b)(1), 29 U.S.C. § 1106(b)(1) .................................................... 18, 20 

 Section 406(b)(2), 29 U.S.C. § 1106(b)(2) .................................................... 18, 21 

 Section 409, 29 U.S.C. § 1109 ............................................................................. 23 

 Section 409(a), 29 U.S.C. § 1109(a) .................................................................... 29 

 Section 502, 29 U.S.C. § 1132 ............................................................................. 29 

 Section 502(a), 29 U.S.C. § 1132(a) .................................................................... 29 

 Section 502(a)(2), 29 U.S.C. § 1132(a)(2) ........................................................... 23 
viii 

Federal Statutes-(continued): 

 Section 502(a)(5), 29 U.S.C. § 1132(a)(5) ........................................................... 23 

Miscellaneous: 

U.S. Const. amend. V ............................................................................................... 28 

Fed. R. Civ. P. 56 ..................................................................................................... 11 

Fed. R. Civ. P. 56(d) ................................................................................................ 12 

U.S. Dep't of Labor, Off. Pension & Welfare Benefits Programs, 

Advisory Op., 93-14A, 1993 WL 188473 (May 5, 1993) .................................... 20 

Interpretive Bulletin, 

2509.94-1, 59 FR 32606-01 (Dep't of Labor, June 23, 1994) ................. 25, 25 n.9 

Interpretive Bulletin, 

2008-01, 73 FR 61734-01 (Dep't of Labor, Oct. 17, 2008) .......................... 25 n.9 

Interpretive Bulletin, 

2015-01, 80 FR 65135-01 (Dep't of Labor, Oct. 26, 2015) .......................... 25 n.9 
STATEMENT OF JURISDICTION 

 The district court had jurisdiction under 28 U.S.C. section 1331. Pursuant to 

28 U.S.C. section 1291, this Court has jurisdiction to review the district cour t's 

final judgment entered on December 15, 2016. 

STATEMENT OF THE ISSUES 

Appellant Matthew D. Hutcheson is a fiduciary to employee benefit plans 

covered by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 

1001, et seq. He caused the plans to engage in a prohibited transaction in violation 

of ERISA section 406, 29 U.S.C. § 1106, and breached his fiduciary duties under 

ERISA by transferring over $3,276,000 in plan assets to benefit a company owned 

by Mr. Hutcheson. Following a criminal conviction upheld by this Court, the 

district court granted summary judgment to the Secretary and permanently barred 

Mr. Hutcheson from serving as a fiduciary to ERISA-covered plans. Mr. 

Hutcheson now seeks to overturn the permanent bar and the summary judgment for 

the Secretary. 

The questions presented by Mr. Hutcheson, as restated by the Secretary, are: 

1. Whether the district court erred by granting the Secretary's motion for 

summary judgment when the court had stayed discovery due to parallel criminal 

proceedings but expressly permitted motions practice. 
2 

2. Whether the district court erred by finding no genuine issue of 

material fact existed as to whether Mr. Hutcheson committed a prohibited 

transaction under ERISA.

3. Whether Mr. Hutcheson raised any issue of material disputed fact or 

valid legal arguments sufficient for reversal of the district court's grant of summary 

judgment for the Secretary.

4. Whether this Court should reverse the district court's grant of 

summary judgment where Mr. Hutcheson argues, for the first time on appeal, that 

the Secretary's civil action subjected him to double jeopardy. 

STATUTORY AUTHORITIES 

The statutory authorities relied upon by the Secretary appear in the 

Secretary's Addendum. 

STATEMENT OF THE CASE 

The Retirement Security Plan and Trust (the "Trust"), founded in 2003, 

classified itself as a multiple-employer, defined-contribution pension plan under 

ERISA. (Hutcheson Excerpt of Record1

 ("ER") 80 ¶ 10; ER114).2 In reality, the 

Trust was not itself an ERISA plan, but instead held the plan assets of many 

																																																								

1

 Mr. Hutcheson's Excerpt of Record is titled "Excerpt of Transcript," (ECF No. 

18-2 and 18-3), but is referred to herein as Excerpt of Record, abbreviated as "ER." 

The Secretary's Supplemental Excerpt of Record is abbreviated as "SER." 

2

 The name at founding was Pension Liquidity Plan and Trust. The name was 

changed during 2007. (ER137). 
3 

ERISA-covered plans established by the employers participating in the Trust 

("Plans"). (ER26 ¶ 17; ER309). 

At all times relevant, Mr. Hutcheson acted as the designated trustee for the 

Trust. (ER79 ¶ 4). Beginning in 2004, Hutcheson Walker Advisors, LLC 

("HWA") was designated as both the "plan sponsor" and plan administrator for the 

Trust. (ER79 ¶ 4; ER141). Mr. Hutcheson directly and indirectly owned 50% of 

HWA and was a director and vice president of HWA. (ER150 ¶ 3; ER155; 

ER157). In his various roles, Mr. Hutcheson exercised authority and control over 

the assets of the ERISA-covered Plans that placed plan assets in the Trust. (ER26 

¶ 17; ER309; ER79 ¶ 4). Accordingly, it is undisputed that Mr. Hutcheson was a 

fiduciary to these Plans under ERISA. (ER367 ¶ 7; No. 24; ER26 ¶ 17; ER309). 

In 2010, Mr. Hutcheson directed the liquidation of over $3 million in the 

Plans' investments held by the Trust. (ER387-388; ER81-83 ¶¶ 15-19). Mr. 

Hutcheson then caused $3 million of the Plans' cash assets to be wired to Pacific 

Continental Bank (the "Bank"), (ER387-388), for the benefit of Green Valley 

Holdings, LLC ("Green Valley"), a company formed, owned and controlled by Mr. 

Hutcheson, (ER379; ER121; ER175-6; ER167). Green Valley used the money to 

purchase a note held by the Bank. (ER365-366 ¶ 2). The debtor on the note was 

the owner of the Osprey Meadows Golf Course and Lodge (the "Golf Course") and 

the note was secured by an interest in the Golf Course. (ER365-366 ¶ 2). Mr. 
4 

Hutcheson admits that, in return for the $3 million Green Valley used to purchase 

the note from the Bank, the Trust received a promissory note from Green Valley 

memorializing a $3 million debt owed by Green Valley to the Trust. (ER366 ¶¶ 3-

4). Thus, Mr. Hutcheson used the Plans' assets, held by the Trust, to purchase a 

secured interest in the Golf Course for his own company. 

In October 2011, Mr. Hutcheson filed an annual return (called a "Form 

5500") with the Department of Labor on behalf of the Trust, bearing his electronic 

signature and under penalty of perjury. (ER90-126). Mr. Hutcheson admitted to 

the transaction in the Form 5500, stating that he, acting as trustee, caused the Trust 

to transfer over $3 million from the Trust to Green Valley, a company he owned. 

(ER90-126). Mr. Hutcheson's Answer to the Secretary's Complaint in this case 

acknowledged his admission on the Form 5500 and admitted that he had engaged 

in a prohibited transaction under ERISA. (ER309 (admitting allegation contained 

in ER23 ¶6)).3

In April 2012, Mr. Hutcheson was indicted (and later convicted in federal 

court) on 17 counts of wire fraud, including five that relate to his theft from the 

Trust, encompassing the acts at issue in this appeal. (ER374-394; ER461-462; 

																																																								

3		Mr. Hutcheson did not controvert or deny these facts relating to his violations in 

his opposition to the Secretary's motion for summary judgment or on appeal. E.g., 

Hutcheson Br. 23-24 (raising only immaterial facts post-dating the ERISA 

violations).
5 

ER464-469). In May 2012, the Secretary filed his complaint against Mr. 

Hutcheson and sought a temporary restraining order ("TRO") and a preliminary 

injunction barring Mr. Hutcheson from exercising any fiduciary authority and 

control over the Plans' assets and the Trust. (ER21-36; ER46-52). The court 

granted a TRO in May 2012 and a preliminary injunction in June 2012. (ER268-

278; ER279-303). The Court also appointed an independent fiduciary to 

administer the Trust and the Plans. (ER279-303). 

On July 17, 2012, the U.S. Attorney moved the district court for permission 

for the United States to intervene in the Secretary's civil suit against Mr. Hutcheson 

to seek a stay of civil discovery but not of any other aspect of the civil case. 

(ER329-335). Neither the Secretary nor Mr. Hutcheson objected to the motion 

filed by the United States, and the district court granted permission to intervene 

and stayed civil discovery on September 7, 2012. (ER338-339). 

On April 15, 2013, Mr. Hutcheson was convicted of, inter alia, wire fraud 

relating to the Trust. (ER461-462). The criminal judgment included a provision 

that Mr. Hutcheson make restitution of approximately $5.3 million to all the 

victims of his fraud, including the fraud relating to the Trust. (ER461-462). The 

Secretary filed his Motion for Summary Judgment in March 2016. The court 

entered summary judgment and a final order of judgment on December 15, 2016. 

(ER4-19). Based on Mr. Hutcheson's admissions, the facts underlying Mr. 
6 

Hutcheson's criminal convictions, and the entire record in the district court, the 

court concluded that "it was undisputed" that Mr. Hutcheson committed a 

prohibited transaction under ERISA section 406, 29 U.S.C. § 1106. The court also 

concluded that Mr. Hutcheson breached his fiduciary duties to the Plans under 

ERISA when he committed the prohibited transaction. (ER4-18). The court 

ordered that Mr. Hutcheson be removed from all positions with the Trust and the 

Plans and permanently barred from acting as a fiduciary for any ERISA-covered 

plan. (ER4-18). The court also denied Mr. Hutcheson's cross-motion for 

declaratory judgment as moot. (ER504-509; ER4-18). The court permanently 

installed an independent fiduciary to manage the Trust and recover its assets. 

(ER4-18). Mr. Hutcheson's notice of appeal was docketed on January 20, 2017. 

(ER20). 

SUMMARY OF THE ARGUMENT 

 The district court correctly granted summary judgment after finding that 

there was no issue of material fact that Mr. Hutcheson committed a prohibited 

transaction under ERISA section 406 and breached his fiduciary duties under 

ERISA when he liquidated over $3 million in assets belonging to employee benefit 

plans and transferred that money to benefit a company he owned. Consequently, 

the district court acted properly in removing Mr. Hutcheson from any fiduciary 
7 

position with the Trust and the Plans, and permanently barring him from serving as 

a fiduciary for any ERISA plan. 

 Mr. Hutcheson raises a variety of challenges to the district court's judgment, 

all of which are meritless. 

1. Mr. Hutcheson argues, for the first time on appeal, that the district 

court erred in granting the Secretary's summary judgment motion where discovery 

had been stayed to prevent Mr. Hutcheson from circumventing the narrower 

discovery process in his criminal case. Mr. Hutcheson identifies no legal authority 

supporting his argument. 

2. Mr. Hutcheson argues that the district court erred in finding that the 

undisputed material facts established that he committed a prohibited transaction 

and breached his fiduciary duties under ERISA. To the contrary, the undisputed 

facts, including Mr. Hutcheson's binding admissions and criminal conviction, 

demonstrate that the Secretary is entitled to summary judgment on this issue. 

3. Mr. Hutcheson argues that the trial court ignored certain facts and 

legal arguments in granting summary judgment for the Secretary. However, those 

facts and arguments relate to Mr. Hutcheson's improper attempt to re-litigate his 

criminal case in this proceeding, are facts and arguments that Mr. Hutcheson did 

not raise below, or are immaterial facts and arguments concerning events that postdate his ERISA violations. The record below clearly shows that no genuine 
8 

dispute as to any material fact exists and that the Secretary is entitled to judgment 

as a matter of law. 

4. Mr. Hutcheson argues, without relevant legal authority, that the 

Secretary's civil action is so punitive that it violates the Constitution's guarantee 

against double jeopardy in criminal cases. However, relevant legal authority is 

unanimous that the Secretary's injunctive relief does not violate the Double 

Jeopardy Clause. 

Mr. Hutcheson simply presents no legal or factual ground to reverse the 

district court's decision, and this Court should affirm that judgment. 

ARGUMENT 

I. STANDARD OF REVIEW 

This Court reviews the trial court's grant of summary judgment de novo and, 

in viewing the evidence in the light most favorable to the non-moving party, must 

determine whether there are any genuine issues of material fact and whether the 

trial court correctly applied the applicable substantive law. Leisek v. Brightwood 

Corp., 278 F.3d 895, 898 (9th Cir. 2002) (citing Lopez v. Smith, 203 F.3d 1122, 

1131 (9th Cir. 2000) (en banc)). The party seeking summary judgment has the 

burden of demonstrating the absence of a genuine issue of fact for trial. Celotex 

Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party shows the 

absence of a genuine issue of material fact, the non-moving party cannot rest on 
9 

the pleadings in order to avoid summary judgment, but must instead "set forth 

specific facts" showing a genuine issue for trial. Id. at 323-24. The mere existence 

of some alleged factual dispute between the parties is not sufficient to defeat a 

properly-supported motion for summary judgment. Anderson v. Liberty Lobby, 

Inc., 477 U.S. 242, 247 (1986). The party opposing summary judgment must come 

forward with evidence concerning a material issue that is more than "merely 

colorable" and must be "significantly probative" to avoid summary judgment. Id. 

at 249-250. 

II. THE STAY OF DISCOVERY IS IRRELEVANT TO THE PROPRIETY 

OF THE SUMMARY JUDGMENT DECISION 

Mr. Hutcheson argues that the trial court erred by ruling on the Secretary's 

motion for summary judgment while discovery was stayed due to the parallel 

criminal proceedings. (Hutcheson Br. 1). Mr. Hutcheson's argument rests on the 

incorrect premise that the trial court should not have ruled on the Secretary's 

motion for summary judgment because his criminal case "has not been resolved." 

(Hutcheson Br. 1). Mr. Hutcheson asserts that the stay below was ordered 

"because the law and facts of [the case] are almost identical to my criminal action. 

My criminal action has not been resolved because my Motion under 28 USC § 

2255 has not been decided (i.e. my Section § 2255 motion is an extension of my 

underlying criminal proceeding)." (Hutcheson Br. 1). This argument fails for 

several reasons. 
10 

First, Mr. Hutcheson failed to raise this argument below and, therefore, is 

barred from making this argument for the first time in this Court.4

 Visendi v. 

Bank of Am., N.A., 733 F.3d 863, 869 (9th Cir. 2013). 

Second, Mr. Hutcheson's argument, that summary judgment is improper 

because his criminal case was not over, is without any merit.5

 The motion for the 

stay of discovery, to which Mr. Hutcheson had no objection, (ER333), expressly 

																																																								

4

 In district court, Mr. Hutcheson filed a notice that he intended to respond to the 

Secretary's motion for summary judgment and requested an extension to respond to 

the Secretary's motion on the grounds that he did not have his legal files (which he 

asserted contained the documents he needed to respond to the motion). (ER479-

481). After receiving an extension, (ER4), Mr. Hutcheson filed a response to the 

Secretary's motion, (ER491-503), a motion requesting declaratory relief, (ER504-

509), and a motion requesting an evidentiary hearing, (ER517-518). In these 

numerous filings below, Mr. Hutcheson never raised the argument that the court 

should lift the stay on discovery before ruling on the Secretary's motion (or Mr. 

Hutcheson's own motions). 

5

		Mr. Hutcheson continues to assert incorrectly that his criminal conviction is not 

final because of his section 2255 petition and therefore the stay should continue. 

Not only is Mr. Hutcheson incorrect, as discussed in this section, about the stay 

affecting in any way the court's ability to rule on summary judgment motions, he is 

also incorrect on this tangential point. A criminal conviction becomes final when 

all direct appeals are exhausted. United States v. Frady, 456 U.S. 152, 164 (1982); 

accord Clay v. United States, 537 U.S. 522, 527 (2003) (in post-conviction context, 

criminal conviction becomes final when the Supreme Court "affirms a conviction 

on the merits on direct review or denies a petition for a writ of certiorari, or when 

the time for filing a certiorari petition expires."). A motion under 28 U.S.C. 

section 2255 is not a direct appeal; it is a collateral attack on the sentence or 

conviction. Frady, 456 U.S. at 164. Therefore, the finality of that conviction is not 

affected by the collateral attack on his sentence. Id. The Secretary's motion for 

summary judgment was filed on March 30, 2016, months after Mr. Hutcheson 

exhausted all appeals of his criminal conviction. (ER7). 
11 

provided that "motion practice, settlement negotiations, and status conferences can 

proceed on schedule," (ER333-334). Accordingly, the district court, without 

objection from the parties, permitted motions, including motions for summary 

judgment, to proceed during the stay. 

Mr. Hutcheson identifies no rule or legal basis to suggest that a motion for 

summary judgment and a decision on summary judgment are improper during a 

stay of discovery. In fact, Federal Rule of Civil Procedure 56 permits motions for 

summary judgment to be filed "at any time after . . . 20 days have passed from 

commencement of the action." Here, the Secretary filed his complaint in May 

2012, the stay began four months later in September 2012, and the summary 

judgment motion was filed around four years after the commencement of the case. 

Mr. Hutcheson did not seek to lift the stay during this time and should not be able 

to complain about the stay and its effect for the first time on appeal in conclusory 

fashion and without identifying any material topics for discovery. Visendi, 733 

F.3d at 869; see also Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151, 1161 (9th Cir. 

2001) (affirming summary judgment because "[the non-moving party] merely 

state[d] in conclusory form that it was deprived of the opportunity to discover 

additional crucial evidence without ever identifying the content of that evidence"). 

In the end, even if Mr. Hutcheson believed (incorrectly) that the stay was 

impeding his ability to defend against summary judgment, Mr. Hutcheson could 
12 

have moved to end the stay or respond to the summary judgment motion by stating 

that he needed discovery in order to be able to respond in full. Fed. R. Civ. P. 

56(d). But he did neither. 

III. THE UNDISPUTED FACTS SHOW THAT MR. HUTCHESON 

COMMITTED A PROHIBITED TRANSACTION UNDER ERISA 

Mr. Hutcheson's second assignment of error asserts that the district court 

improperly relied on his conviction for wire fraud for stealing money from the 

Trust and his two admissions that he had committed a prohibited transaction under 

ERISA in granting summary judgment for the Secretary. (Hutcheson Br. 21-23). 

Throughout these proceedings, Mr. Hutcheson never disputed that he twice 

admitted to committing the prohibited transactions. (ER9; ER364-369; ER121; 

ER308). In fact, Mr. Hutcheson did not even mention his two admissions of 

entering into prohibited transactions in any brief until this appeal. Most 

importantly, Mr. Hutcheson did not dispute his admission of his role in a 

prohibited transaction under ERISA section 406 in response to the Secretary's 

motion for summary judgment. (ER491-503). 

Specifically, Mr. Hutcheson never disputed the Secretary's statement of 

undisputed facts that he admitted under oath, on a Form 5500 annual return 

required to be filed with the Department of Labor, that he caused the Trust to enter 

into a prohibited transaction by transferring money to a company he owned 

(ER366 ¶¶ 3-4; ER121), and that, in his Answer, Mr. Hutcheson admitted the 
13 

allegations in the Secretary's Complaint that Mr. Hutcheson was a fiduciary to the 

Trust, (ER26 ¶17; ER309), and that he had entered into a "prohibited transaction" 

under ERISA with the Trust, (ER23 ¶6; ER309). Because he failed to challenge 

these admissions below, he has waived any challenge and cannot raise it now for 

the first time on appeal. This Court should affirm on the basis of those binding 

admissions. Visendi, 733 F.3d at 869. 

Instead of directly challenging the admissions, Mr. Hutcheson claims on 

appeal that he was unable to explain "the entirety of facts/circumstances as to why 

there are alleged admissions in the 5500 and/or [Hutcheson's answer to] paragraph 

6 of the DOL complaint . . ." because he was not able to conduct discovery in the 

civil case. (Hutcheson Br. 23). What Mr. Hutcheson fails to mention is that 

discovery would not have aided his collection of facts about this issue—he was the 

only person who made those statements. Admissions are conclusive, regardless of 

his vague allegations of evidence to the contrary. "Factual assertions in pleadings 

and pretrial orders, unless amended, are considered judicial admissions 

conclusively binding on the party who made them." Am. Title Ins. Co. v. Lacelaw 

Corp., 861 F.2d 224, 226 (9th Cir. 1988). Such admissions have the effect of 

withdrawing a fact from issue and dispensing wholly with the need for proof of the 

fact. Id. 
14 

Mr. Hutcheson also disputes the district court's reliance on his criminal 

conviction because he has raised a collateral attack on the criminal sentence in his 

section 2255 petition. (Hutcheson Br. 21). This argument is without merit and 

does not call into dispute his admission of his ERISA violations and his criminal 

conviction for wire fraud based on his removal of funds from the Trust. "It is wellsettled that a criminal conviction, whether by jury verdict or guilty plea, constitutes 

estoppel in favor of the United States in a subsequent civil proceeding as to those 

matters determined by the judgment in the criminal case." United States v. Podell, 

572 F.2d 31, 35 (2d Cir. 1978) (citing McCarthy v. United States, 394 U.S. 459, 

466 (1969)); see also Ivers v. United States, 581 F.2d 1362, 1367 (9th Cir. 1978).6 

As this Court observed in confirming Mr. Hutcheson's conviction and sentence, "a 

rational trier of fact could have found the elements of wire fraud beyond a 

reasonable doubt. . . . There is abundant evidence in the record to support his 

convictions on all counts, including not only his personal use of investors' funds to 

buy or improve his own property, but also a range of conduct from forged 

																																																								

6

 "Collateral estoppel" or issue preclusion applies when: "'(1) the issue necessarily 

decided at the previous proceeding is identical to the one which is sought to be 

relitigated; (2) the first proceeding ended with a final judgment on the merits; and 

(3) the party against whom [issue preclusion] is asserted was a party or in privity 

with a party at the first proceeding.'" Paulo v. Holder, 669 F.3d 911, 917 (9th Cir. 

2011) (citation omitted); Durkin v. Shea & Gould, 92 F.3d 1510, 1515 (9th Cir. 

1996) ("collateral estoppel" is "issue preclusion"). 
15 

documents and fabricated account balance statements to witness testimony 

regarding Hutcheson's misleading statements about plan participants' inability to 

withdraw funds." United States v. Hutcheson, 603 F. App'x 613, 614 (9th Cir. 

2015). Therefore, the Court, having previously recognized Mr. Hutcheson's 

"looting of funds from [ERISA] plans for personal use," id., should affirm 

summary judgment for the Secretary based on the undisputed facts. 

IV. MR. HUTCHESON'S ASSERTED "TRIABLE ISSUES OF FACT" AND 

LEGAL ARGUMENTS ARE IMMATERIAL AND WITHOUT MERIT 

Mr. Hutcheson's second and third assignments of error include rambling and 

repeated contentions that the district court failed to properly take into account a 

laundry list of alleged facts and legal arguments, which are either incorrect or 

immaterial to his ERISA violations. These arguments, grouped here, do not 

address the underlying elements of his violations; instead, they raise tangential 

legal and factual arguments in an attempt to confuse the Court with extraneous 

facts or raise meritless legal defenses to his violations. 

The Secretary will address Mr. Hutcheson's arguments below, grouped by 

whether the arguments sound in fact or law. Regardless of the category, all of Mr. 

Hutcheson's arguments are immaterial and intended to distract the Court from (1) 

Mr. Hutcheson's admissions that he committed a transaction prohibited under 

ERISA by removing over $3 million from the Trust and (2) his conviction for wire 

fraud for the same underlying theft, among others. Mr. Hutcheson's misdirection 
16 

cannot undermine the propriety of the district court's granting summary judgment 

on the undisputed facts and its denying his motion for declaratory judgment on the 

same issues as moot. 

A. Mr. Hutcheson's Factual Arguments Do Not Raise a Dispute 

Concerning a Material Fact 

1. The Independent Fiduciary's Actions Since Mr. Hutcheson's Fraud 

Fail To Negate Mr. Hutcheson's ERISA Violations 

Mr. Hutcheson seeks to muddy the waters by criticizing (and 

mischaracterizing) the actions of the successor fiduciary of the Trust in attempting 

to recover monies for the participants and beneficiaries of the Plans, who 

collectively lost over $3 million in retirement savings as a result of Mr. 

Hutcheson's actions. (Hutcheson Br. 35). Again, Mr. Hutcheson seeks to support 

his theory through the improper use of judicial notice of "facts," as set forth in his 

request for judicial notice, which the Secretary opposes in a separate filing. (ECF 

No. 20). Setting aside that those facts were not put before the district court, or the 

brazenness of finding fault with the actions of the successor fiduciary in relation to 

a document forged by Mr. Hutcheson (e.g., Hutcheson Br. 12), Mr. Hutcheson's 

arguments do not create a dispute about any material fact. No act of the successor 

fiduciary changes the undisputed facts that Mr. Hutcheson admitted to committing 

a prohibited transaction and was convicted for stealing $3 million from the Trust's 

participating Plans. 
17 

2. Mr. Hutcheson's Filing A Form Allegedly Removing and Later 

Adding Himself As A Member/Manager of Green Valley Does Not 

Insulate Him From Liability For Transferring Money From ERISA 

Plans to His Company 

Mr. Hutcheson argues, without shame, that he has raised a material issue of 

fact concerning whether he could have committed the prohibited transaction, that 

he repeatedly admitted to committing, because he removed himself, on a form he 

filed with the Idaho Secretary of State, as a member of his limited liability 

company, Green Valley, immediately before executing the loan documents 

between the Trust and Green Valley as part of the prohibited transaction. 

(Hutcheson Br. 36). First, Mr. Hutcheson did not raise this issue in the district 

court and has therefore waived it. Visendi, 733 F.3d at 869. Second, judicial 

notice of the type of facts requested by Mr. Hutcheson in support of this argument 

is inappropriate, as set forth in the Secretary's opposition to the request for judicial 

notice. Third, it is undisputed by Mr. Hutcheson that he later added himself back 

as a member of his company (ER365-366 ¶2; ER169), and therefore "directly or 

indirectly" owned and was in control of the company at all relevant times, which is 

sufficient to render the company, Green Valley, a party in interest under ERISA 

section 3(14)(G), 29 U.S.C. § 1002(14)(G), and to make the transfer of funds from 

the Trust to Green Valley a prohibited transaction under ERISA section 

406(a)(1)(B) and (D), as well as 406(b)(1), (2), 29 U.S.C. §§ 1106(a)(1)(B) and 

(D), 1106(b)(1) and (2). He never states that he had divested all direct or indirect 
18 

interest in Green Valley at the relevant times. The Court should not reward Mr. 

Hutcheson's tawdry attempt to circumvent his fiduciary duties under ERISA by 

belatedly proffering a document he created and filed with the Idaho Secretary of 

State that is devoid of any facts. That document is no better than a self-serving, 

conclusory allegation that contradicts his own admissions of ownership at the time 

of the transaction and the facts underlying his criminal conviction. (ER366 ¶¶ 3-4; 

ER121). Such a self-serving document, even if relevant, is insufficient to oppose 

summary judgment. See Ah Quin v. Cty. of Kauai Dep't of Transp., 733 F.3d 267, 

289 (9th Cir. 2013) ("A conclusory, self-serving affidavit, lacking detailed facts 

and any supporting evidence, is insufficient to create a genuine issue of material 

fact.") (citation omitted). 

3. Mr. Hutcheson's Liability For Committing a Prohibited Transaction 

Does Not Depend On What Assets Were "Plan Assets" After Mr. 

Hutcheson Removed $3 Million From the Trust 

Mr. Hutcheson contends that he has raised a material issue of disputed fact 

concerning what "plan assets" belonged to the Plans as a result of the prohibited 

transaction that he previously admitted. (Hutcheson Br. 37-43, passim). However, 

what was transferred into the Trust (in exchange for the $3 million in plan assets 
19 

removed by Mr. Hutcheson to benefit his own company), is irrelevant to whether or 

not he committed a prohibited transaction by transferring the Plans' $3 million.7

 

It is undisputed that the Trust had over $3 million of the Plans' assets in a 

bank account prior to the prohibited transaction conducted by Mr. Hutcheson. 

(ER366 ¶¶ 1-4). It is also undisputed that these funds were held by the Trust as the 

plan assets of the participating Plans. (ER26 ¶17; ER309). See also U.S. Dep't of 

Labor, Off. Pension & Welfare Benefit Programs, Adv. Op., 93-14A, 1993 WL 

188473, at *4 (May 5, 1993) ("In general, the assets of a welfare plan would 

include any property, tangible or intangible, in which the plan has a beneficial 

ownership interest."). It is also undisputed that Mr. Hutcheson was a fiduciary to 

ERISA Plans participating in the Trust. (ER26 ¶17; ER309). Mr. Hutcheson 

admits to these facts in his Form 5500 filings. (ER121). 

Mr. Hutcheson plainly committed a prohibited transaction by dealing with 

the assets of the Plans in his own interest (for the benefit of his company, Green 

Valley), in violation of ERISA section 406(b)(1), 29 U.S.C. § 1106(b)(1), and by 

acting on both sides of the transaction, on behalf of his own company and as a 

fiduciary to the Trust's participating Plans, in violation of ERISA section 

																																																								

7

 Mr. Hutcheson requested an evidentiary hearing, (ER517-518), solely on this 

issue, which he raised in his request for declaratory relief, (ER504-509). The 

request for declaratory relief was denied as moot by the district court upon granting 

summary judgment for the Secretary. (ER10). 
20 

406(b)(2), 29 U.S.C. § 1106(b)(2). Mr. Hutcheson's defense that the Plans suffered 

no damages (his conviction for wire fraud notwithstanding) is completely meritless 

and immaterial; violations of ERISA section 406(b) are per se violations—good 

faith or the reasonableness of a transaction are immaterial. Patelco Credit Union v. 

Sahni, 262 F.3d 897, 911 (9th Cir. 2001) (quoting Gilliam v. Edwards, 492 F. 

Supp. 1255, 1264 (D.N.J. 1980)). 

Furthermore, ERISA section 406(a)(1) "categorically" bars a fiduciary from 

causing a plan to enter into transactions with "parties in interest" to the plan. 

Harris Tr. & Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 242 (2000); 

see also 29 U.S.C. § 1106(a). As a fiduciary, Mr. Hutcheson is also automatically 

a party in interest to the ERISA plans participating in the Trust, as is any company 

he owns or controls "directly or indirectly." 29 U.S.C. § 1002(14)(A) and (G). 

Accordingly, Mr. Hutcheson also committed a prohibited transaction by extending 

credit, with the Plans' assets, between the Trust and a party-in-interest, his 

company, ERISA section 406(a)(1)(B), 29 U.S.C. § 1106(a)(1)(B), and transferring 

the Plans' assets out of the Trust for the benefit of his company, ERISA section 

406(a)(1)(D), 29 U.S.C. § 1106(a)(1)(D). In light of the nature of these ERISA 

violations, what type of real or fictional assets were allegedly later purchased with 
21 

the money transferred out of the Trust to his company is utterly immaterial for the 

facts establishing this violation and Mr. Hutcheson's liability.8

 

B. Mr. Hutcheson's Legal Arguments Are Without Any Merit 

As discussed below, Mr. Hutcheson makes several legal arguments for 

excusing his ERISA violations, which were all rejected by the district court and 

should be rejected by this Court. 

1. Voluntary Dismissal Of The Trust Successor Fiduciary's State Law 

Claims Against Mr. Hutcheson Has No Effect On This Case 

Mr. Hutcheson asserts that the Trust's successor fiduciary, who was 

appointed by the district court, dismissed all of the Trust's state law claims brought 

against Mr. Hutcheson for his fiduciary breaches. (Hutcheson Br. 35; Mot. Jud. 

Not. 14). Mr. Hutcheson has the burden to establish any preclusive effect from this 

order, but he did not assert any form of preclusion as an affirmative defense below; 

the issue is thereby waived on appeal. Santos v. Alaska Bar Ass'n, 618 F.2d 575, 

577 (9th Cir. 1980); Shapley v. Nevada Bd. of State Prison Comm'rs, 766 F.2d 404, 

407 (9th Cir. 1985). Furthermore, while the agreed order of dismissal is in the 

record, (USDC ECF No. 103-1), the exact claims brought by the successor 

																																																								

8

 Similarly, this Court rejected Mr. Hutcheson's argument, in the appeal of his 

criminal case, that excluding evidence of the assets that Mr. Hutcheson allegedly 

gave to the Plans in exchange for over $3 million was improper. Hutcheson, 603 

F. App'x at 614. This Court held that the assets were excludable as evidence of 

intent to repay, which was "irrelevant" to his criminal case. Id. 
22 

fiduciary are not in the record and Mr. Hutcheson has therefore not met his burden. 

Mr. Hutcheson has requested judicial notice be taken of the successor fiduciary's 

complaint on appeal, but the Secretary opposes that request because Mr. Hutcheson 

mischaracterizes the "facts" embodied by the complaint, as set forth in more detail 

in the Secretary's opposition. The motion is pending before this Court. More 

importantly, whether the actual facts of the successor fiduciary's complaint are 

noticed or not, Mr. Hutcheson's argument fails for this simple reason: Mr. 

Hutcheson has provided no reason that the state-law claims asserted by the Trust 

against Mr. Hutcheson should have preclusive effect on the Secretary's federal 

ERISA claims, which includes a claim to remedy injury to ERISA Plans, and not 

just the Trust. He has not only waived the argument but also failed to satisfy his 

burden. 

The Secretary filed his Complaint against Mr. Hutcheson based on ERISA 

sections 409, 502(a)(2), and 502(a)(5). 29 U.S.C. §§ 1109 and 1132(a)(2), (5). 

These sections provide that the Secretary has standing, independent of any 

standing of an ERISA plan participant, beneficiary, or fiduciary, to bring an action 

seeking to impose liability for a fiduciary breach, enjoin any act violating Title I of 

ERISA, obtain equitable relief to redress a violation of Title I of ERISA, and 

obtain equitable relief to enforce any provision of Title I of ERISA. See Sec'y 

United States Dep't of Labor v. Kwasny, 853 F.3d 87, 95 (3d Cir. 2017) ("we 
23 

conclude that in ERISA suits, the Secretary is not in privity with private litigants 

and is therefore not bound by the results reached by private litigation"); Herman v. 

S.C. Nat'l Bank, 140 F.3d 1413, 1424 (11th Cir. 1998) (same); Beck v. Levering, 

947 F.2d 639, 642 (2d Cir. 1991) (same); Sec'y of Labor v. Fitzsimmons, 805 F.2d 

682, 690–94 (7th Cir. 1986) (en banc) (same); Donovan v. Cunningham, 716 F.2d 

1455, 1462–63 (5th Cir. 1983) (same); see also Mertens v. Black, 948 F.2d 1105, 

1106 (9th Cir. 1991) (applying privity requirement to ERISA claim involving 

private litigants); California v. IntelliGender, LLC, 771 F.3d 1169, 1177 (9th Cir. 

2014) (agreeing with and applying Herman in a non-ERISA case). 

In addition, if the Court does consent to take notice of the state law 

complaint, the successor fiduciary only claimed violations of state law fiduciary 

obligations to the Trust, and not ERISA obligations to ERISA-covered Plans or the 

public interest. (Mot. Jud. Not., Ex. 14). Therefore, any dismissal of a claim by 

the successor fiduciary has no impact on the Secretary's suit against Mr. Hutcheson 

because the Secretary's standing does not derive from the rights of any other person 

nor is he in privity with a private litigant. Instead, the Secretary protects the public 

interest in "prevent[ing] those who have engaged in illegal activity from causing 

loss to any future ERISA plan participant[s]." Fitzsimmons, 805 F.2d at 696–97 

(citation and internal quotation omitted). As the Seventh Circuit observed, "private 

parties can never be representatives of this clear, specific, and unambiguous 
24 

national interest of the Secretary." Id. The Secretary's separate and distinct 

interest is exemplified by the injunctive relief requested and granted here to bar Mr. 

Hutcheson from serving as an ERISA fiduciary to any ERISA plan to protect the 

"public" and "national" interests not served by private litigation. Id. Therefore, Mr. 

Hutcheson's preclusion argument must fail. 

2. Department Of Labor's Interpretative Bulletin 94-1 Did Not Allow 

Mr. Hutcheson To Breach His Duties Under ERISA Section 406 

Mr. Hutcheson argues that the Department of Labor's Interpretive Bulletin 

2509.94-1, 59 FR 32606-01, which discusses a fiduciary's duties when investing 

plan assets in economically targeted investments (ETIs), removed any obligation of 

fiduciaries to comply with their fiduciary duties under ERISA section 404 or 

refrain from entering into prohibited transactions under ERISA section 406.9

 

Hutcheson Br. 35, 44-45. This is utterly incorrect. The plain text of the 

Interpretative Bulletin makes it clear that it does not remove the requirements of 

ERISA sections 404 and 406, which barred Mr. Hutcheson's self-dealing and 

disloyal conduct; the Bulletin only provides guidance on choosing investments that 

do not otherwise violate ERISA. 59 FR 32606-01 ("The fiduciary standards 

																																																								

9

 The Secretary notes that Interpretative Bulletin 94-1 had been superseded and 

modified by Interpretative Bulletin 2008-01, 73 FR 61734-01, at the time that Mr. 

Hutcheson was engaging in the prohibited transactions and conduct leading to his 

wire fraud conviction. Both bulletins have now been modified and superseded by 

Interpretive Bulletin 2015-01, 80 FR 65135-01. 
25 

applicable to ETIs are no different than the standards applicable to plan 

investments generally."). The Court should not indulge in Mr. Hutcheson's utterly 

baseless attempt to excuse his ERISA violations and crimes. 

3. Plan Documents Cannot Excuse Prohibited Transactions and 

Statutory Violations 

Mr. Hutcheson argues, for the first time on appeal, that the Trust documents 

gave him the power to commit all the acts alleged as illegal in the Secretary's 

complaint: "In every respect, the DOL's complaint against me usurps this given 

authority and makes improper allegations of wrong-doing that was expressly 

granted, permitted, and legal [under the plan documents]." (Hutcheson Br. 48). 

 First, because Mr. Hutcheson raises this issue for the first time on appeal, he 

has waived this argument. Visendi, 733 F.3d at 869. Second, because the Trust 

documents were not in the district court's record and are not suitable candidates for 

judicial notice, Mr. Hutcheson's arguments regarding their content are not properly 

before the Court.10 Third, if this Court does take judicial notice of the Trust 

documents, the Secretary points out that Section 10.04(b), on page 50 of the 

documents (ECF No. 19-3 p.70), states that "[t]he Trustee shall not engage in any 

																																																								

10 See the Secretary's opposition to Mr. Hutcheson's requests for judicial notice. 

(ECF No. 20). 
26 

prohibited transaction within the meaning of the Code and ERISA." 11 This is in 

direct contravention to Mr. Hutcheson's argument that the documents permitted the 

acts that he admits constituted a prohibited transaction (and resulted in his 

conviction for wire fraud). Furthermore, ERISA section 404(a)(1)(D) required 

Hutcheson to follow plan documents only "insofar as such documents and 

instruments are consistent with the provisions of [title I of ERISA] and title IV." 

29 U.S.C. § 1104(a)(1)(D); see also Fifth Third Bancorp v. Dudenhoeffer, 134 S. 

Ct. 2459, 2468-69 (2014); Central States, Se. & Sw. Areas Pension Fund v. Central 

Transport, Inc., 472 U.S. 559, 568 (1985) ("trust documents cannot excuse trustees 

from their duties under ERISA"). Accordingly, even if a document did grant Mr. 

Hutcheson the power to enter into a prohibited transaction, he would have violated 

ERISA by taking advantage of that power improperly granted by the document. 

On all fronts, this Court should not be persuaded by Mr. Hutcheson's argument that 

the Trust document allowed him to engage in a prohibited transaction.12

																																																								

11 While not an issue on this appeal, the Secretary's position is that the Trust was 

itself not an ERISA plan because it did not meet the requirements for a single 

multiple-employer pension plan. Rather it is a trust that holds the assets of, 

performs services for, and is the vehicle for funding the employee benefit plans 

established by the approximately 91 employers participating in the Trust. Mr. 

Hutcheson admitted below that he was a fiduciary to each of the Plans participating 

in the Trust arrangement. (ER367 ¶7; ER26 ¶17; ER309). 

12 Mr. Hutcheson also obliquely refers to additional arguments that are also plainly 

wrong, including a suggestion that the Sixth Amendment provides a right to 
27 

V. THE DOUBLE JEOPARDY CLAUSE DOES NOT APPLY TO CIVIL 

RELIEF SOUGHT BY THE SECRETARY UNDER ERISA 

Mr. Hutcheson argues that the Double Jeopardy Clause and his conviction 

for wire fraud prohibit the Secretary from obtaining a permanent injunction 

preventing him from serving as a fiduciary to ERISA plans. (Hutcheson Br. 53-54). 

This is fundamentally incorrect. 

The Double Jeopardy Clause provides that no "person [shall] be subject for 

the same offence to be twice put in jeopardy of life or limb." U.S. Const. amend. 

V. However, the Double Jeopardy Clause does not prohibit the imposition of all 

additional sanctions that might be described as "punishment" in "common 

parlance." United States ex rel. Marcus v. Hess, 317 U.S. 537, 549 (1943) 

(quoting Moore v. People of State of Illinois, 55 U.S. 13, 19 (1852)). The Double 

Jeopardy Clause protects only against multiple criminal punishments for the same 

offense. Helvering v. Mitchell, 303 U.S. 391, 399 (1938); U.S. ex rel. Marcus, 317 

U.S. at 549; Breed v. Jones, 421 U.S. 519, 528 (1975) ("jeopardy describes the risk 

that is traditionally associated with a criminal prosecution"). 

Determining whether a particular punishment is criminal or civil begins with 

statutory construction. Hudson v. United States, 522 U.S. 93, 98 (1997) (citing 

																																																																																																																																																																																		

counsel for civil cases, see Hutcheson Br. 4 n.2. "[T]he Sixth Amendment does 

not govern civil cases." Turner v. Rogers, 564 U.S. 431, 441 (2011). 
28 

Helvering, 303 U.S. at 399). The first question to analyze is whether Congress 

"expressly or impliedly expressed a preference for one label or the other." Ward,

448 U.S. at 248. Here, the Secretary brought his suit against Mr. Hutcheson under 

ERISA section 502, 29 U.S.C. § 1132, which Congress enacted to provide a "civil 

action." 29 U.S.C. § 1132(a). The permanent injunction imposed here is a remedy 

provided by ERISA in such civil actions and that remedy has roots in the law of 

trusts, not as a form of criminal sanction. 29 U.S.C. §§ 1132(a)(2), 1109(a); see 

Beck, 947 F.2d at 641 (describing similar injunction as part of ERISA's remedies 

based in the law of trusts). 

Because Congress has clearly indicated its intent that ERISA section 502 

provides "civil penalties," the next step is for the Court to analyze "whether the 

statutory scheme was so punitive, that it transfor[ms] what was clearly intended as 

a civil remedy into a criminal penalty." Hudson, 522 U.S. at 98–100 (citing Ward, 

448 U.S. at 248 and Rex Trailer Co. v. United States, 350 U.S. 148, 154 (1956)). 

The Hudson Court outlined seven "useful guideposts" that should be "applied to 

the face of the relevant statute, with only the clearest proof sufficing to override 

legislative intent and transform . . . a civil remedy into a criminal penalty." 

Hudson, 522 U.S. at 100 (internal quotation marks omitted). The "guidepost" 

factors to be considered are: 

(1) "whether the sanction involves an affirmative 

disability or restraint"; (2) "whether it has historically 
29 

been regarded as a punishment"; (3) "whether it comes 

into play only on a finding of scienter"; (4) "whether its 

operation will promote the traditional aims of 

punishment-retribution and deterrence"; (5) "whether the 

behavior to which it applies is already a crime"; (6) 

"whether an alternative purpose to which it may 

rationally be connected is assignable for it"; and (7) 

"whether it appears excessive in relation to the alternative 

purpose assigned." 

Id. at 99-100 (quoting Kennedy v. Mendoza–Martinez, 372 U.S. 144, 168-169 

(1963)). The remedy imposed here bars Mr. Hutcheson from serving as an ERISA 

fiduciary, which is analogous to the occupational debarment upheld in Hudson as a 

civil penalty. Id. at 104. Courts who have considered this question have held that 

an ERISA action by the Secretary, following a criminal case, does not constitute 

double jeopardy. Solis v. The Eichholz Law Firm, P.C., No. 4:10-CV-162, 2011 

WL 710993, at *1 (S.D. Ga. Feb. 22, 2011); Martin v. Rutledge, 807 F. Supp. 693, 

696-697 (N.D. Ala. 1992). 

In a directly analogous case, Chao v. USA Mining, Inc., 1:04-CV-138, 2007 

WL 208530, at *1 (E.D. Tenn. Jan. 24, 2007), the trial court applied these Hudson 

factors to the Secretary's request to bar a defendant from serving as a fiduciary to 

ERISA plans and held that an ERISA remedy was civil and did not violate the 

Double Jeopardy Clause. Id. As here, the Chao defendant was criminally 

convicted for federal crimes (fraud and racketeering) and alleged that the 

permanent ERISA fiduciary bar sought by the Secretary was double jeopardy for 
30 

his crimes. Id. at *5. The Chao court, finding similarities to the injunction at issue 

in Hudson, which prohibited the Hudson petitioner from working in the banking 

industry, held that the ERISA fiduciary bar did not satisfy the first factor because it 

did not involve an affirmative disability or restraint and was nothing like the 

"infamous punishment" of imprisonment. Id. (quoting Hudson, 522 at 104). The 

second factor was not satisfied because the ERISA fiduciary bar was similar to the 

Hudson sanctions, which were not "so punitive in form and effect as to render them 

criminal despite Congress' intent to the contrary." Id. 

While the Chao court observed that a fiduciary bar may deter future 

prospective wrongdoers, it noted that, in Hudson, the mere presence of deterrence 

is insufficient to render a sanction criminal because deterrence may serve civil 

goals. Id. The court, again citing to Hudson, held that the fifth factor was not 

satisfied simply because the criminal conviction and civil penalty arose from the 

same conduct. Id. Lastly, the court concluded that barring the convicted criminal 

from acting as an ERISA fiduciary and seeking repayment of the money he stole 

was rationally related to a legitimate government objective, was connected to the 

loss incurred, and was not excessive, thereby not satisfying the sixth and seventh 

factors. Id. Because of the absence of the "clearest proof" necessary to "override 

legislative intent," the Chao court concluded that the ERISA civil remedies were 

not criminal punishments and did not implicate the Double Jeopardy Clause. Id. 
31 

 Here, the civil remedy sought by the Secretary is actually less than in Chao, 

because the Secretary sought only a bar on acting as an ERISA fiduciary, not a 

money judgment as well (as in Chao). Accordingly, this case is even further away 

from having the "clearest proof" that the civil relief is "so punitive" as to be 

rendered criminal, and Mr. Hutcheson's argument concerning Double Jeopardy 

fails. 

The cases cited by Mr. Hutcheson, Austin v. U.S., 509 U.S. 602 (1993), and 

U.S. v. $405,089.23, 33 F.3d 1210 (9th Cir. 1994), do not help his cause. Citing to 

Austin v. U.S., Mr. Hutcheson falsely equates the Secretary's request to bar him 

from serving as an ERISA fiduciary with a "forfeiture action" because he asserts 

that the Secretary sought the "forfeiture of [his] right to ever be a professional 

fiduciary." (Hutcheson Br. 53). However, Austin dealt with sections of the 

Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. §§ 

881(a)(4) and (a)(7), not ERISA, and whether the civil forfeiture provisions of that 

law were subject to the Eighth Amendment, not the Double Jeopardy Clause. 

Austin, 509 U.S. at 604. The case is completely inapplicable to Mr. Hutcheson's 

appellate argument. The other case cited by Mr. Hutcheson, United States v. 

$405,089.23, was overturned by the Supreme Court, United States v. Ursery, 518 

U.S. 267 (1996), undermining Mr. Hutcheson's argument. Accordingly, the Court 

should reject Mr. Hutcheson's Double Jeopardy Clause arguments. 
32 

CONCLUSION 

 For the foregoing reasons, the Secretary respectfully requests that this Court 

affirm the district court's judgment imposing injunctive relief against Mr. 

Hutcheson, removing him from any fiduciary position in relation to the Trust and 

the Plans, as well as permanently enjoining him from serving as a fiduciary to any 

ERISA-covered employee benefit plan in the future. 

STATEMENT OF RELATED CASES 

 Mr. Hutcheson was convicted of seventeen counts of wire fraud in United 

States v. Hutcheson, 1:12-cr-00093-WFN (D. Idaho). Mr. Hutcheson appealed his 

conviction to this Court, which affirmed his conviction in United States v. 

Hutcheson, 603 F. App'x 613, 614 (9th Cir. May 15, 2015). Mr. Hutcheson has 

also filed a writ, in Hutcheson v. United States, 1:16-cv-442 (D. Idaho), to have his 

criminal sentence vacated under 28 U.S.C. section 2255, which remains pending. 

Mr. Hutcheson filed a second notice of appeal in his criminal case, which this 

Court construed as another petition to have his sentence vacated and dismissed for 

lack of jurisdiction. United States v. Hutcheson, Case No. 17-35081 (9th Cir.). 

 
33 

DATED: August 17, 2017 Respectfully submitted, 

NICHOLAS C. GEALE 

Acting Solicitor of Labor 

G. WILLIAM SCOTT 

Associate Solicitor for 

Plan Benefits Security 

THOMAS TSO 

Counsel for Appellate and Special Litigation 

s/ Marc Sarata 

MARC SARATA 

Trial Attorney 

Plan Benefits Security Division 

Office of the Solicitor 

U.S. Department of Labor 

200 Constitution Ave., N.W., Rm. N-4611 

Washington, D.C. 20210 

(202) 693-5637
CERTIFICATION OF COMPLIANCE 

 Pursuant to Fed. R. App. P. 32(a)(7)(c) and Ninth Circuit Rule 32-1, I 

hereby certify that the attached brief is proportionately spaced, has a typeface of 14 

points, and contains 7757 words. 

DATED: August 17, 2017 Respectfully submitted, 

s/ Marc Sarata 

Marc Sarata 

Trial Attorney 

Plan Benefits Security Division 

U.S. Department of Labor 

200 Constitution Ave., N.W., Rm. N-4611 

Washington, D.C. 20210 

(202) 693-5637 
CERTIFICATE OF SERVICE 

I hereby certify that on August 17, 2017, I electronically filed the foregoing 

with the Clerk of the Court for the United States Court of Appeals for the Ninth 

Circuit by using the appellate CM/ECF pacer NEXT/GEN System, and I further 

certify that, on August 17, 2017, I served the foregoing document on the following 

non-CM/ECF registered participant via first class mail, postage prepaid, and UPS, 

addressed as follows: 

Matthew D. Hutcheson 

Register Number: 14620-023 

FCI ENGLEWOOD 

FEDERAL CORRECTIONAL INSTITUTION 

9595 West Quincy Avenue 

Littleton, CO 80123 

DATED: August 17, 2017 Respectfully submitted, 

s/ Marc Sarata 

Marc Sarata 

Trial Attorney 

Plan Benefits Security Division 

U.S. Department of Labor 

200 Constitution Ave., N.W., Rm. N-4611 

Washington, D.C. 20210 

(202) 693-5637