2015 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-13-2015

Jeffrey Perelman v. Raymond Perelman

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"Jeffrey Perelman v. Raymond Perelman" (2015). 2015 Decisions. Paper 712.

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

Nos. 14-1663 & 14-2742

_____________

JEFFREY E. PERELMAN, AS A PARTICIPANT IN 

THE GENERAL REFRACTORIES COMPANY PENSION 

PLAN FOR SALARIED EMPLOYEES

v.

RAYMOND G. PERELMAN; RONALD O. PERELMAN; 

JASON GUZEK; GENERAL REFRACTORIES 

COMPANY; RELIANCE TRUST COMPANY

Jeffrey E. Perelman, as a participant in the General 

Refractories Company Pension Plan for Salaried Employees, 

a/k/a the Grefco Minerals, Inc. Pension Plan for Salaried 

Employees (the Pension Plan),

 Appellant

_____________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil No. 2-10-cv-05622)

District Judge: Honorable John R. Padova

_____________
2

Submitted Under Third Circuit L.A.R. 34.1(a)

on April 17, 2015

_____________

Before: AMBRO, VANASKIE, and SHWARTZ, Circuit 

Judges

(Filed: July 13, 2015)

Paul A. Friedman, Esq.

Epstein, Becker & Green

250 Park Avenue

New York, NY 10177

Jonathan S. Goldman, Esq.

James T. Smith, Esq.

Rebecca D. Ward, Esq.

Blank Rome

130 North 18th Street

One Logan Square

Philadelphia, PA 19103

Counsel for Appellant

Ethan M. Dennis, Esq.

Clark Hill

2005 Market Street

One Commerce Square, Suite 1000

Philadelphia, PA 19103

Clifford E. Haines, Esq.

Haines & Associates

1835 Market Street, Suite 2420

Philadelphia, PA 19103
3

Marjorie M. Obod, Esq.

Dilworth Paxson

1500 Market Street

Suite 3500E

Philadelphia, PA 19102

Counsel for Appellee Raymond G. Perelman

Michael S. Doluisio, Esq.

William T. McEnroe, Esq.

Ryan M. Moore, Esq.

Dechert

2929 Arch Street

18th Floor, Cira Centre

Philadelphia, PA 19104

Andrew J. Levander, Esq.

Dechert

1095 Avenue of the Americas

New York, NY 10036

Counsel for Appellee Ronald O. Perelman

Derek J. Cusack, Esq.

Dicalite Management Group, Inc.

1 Bala Avenue

Suite 310

Bala Cynwyd, PA 19004

Counsel for Appellee General Refractories Company

_____________

OPINION

_____________
4

VANASKIE, Circuit Judge. 

This matter arises under § 502(a)(3) of the Employee 

Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 

§ 1132(a)(3), which authorizes suits by, inter alia, a pension 

plan beneficiary to enjoin any act or practice that violates 

ERISA, “to obtain other appropriate equitable relief . . . to 

redress such violations,” or to enforce any provision of 

ERISA or the terms of a pension plan. Id. Appellant Jeffrey

Perelman is a participant in the defined employee pension 

benefit plan (the Plan) of Appellee General Refractories 

Company (GRC). Jeffrey alleges that his father, Raymond

Perelman, as trustee of the Plan, breached his fiduciary duties

by covertly investing Plan assets in the corporate bonds of

struggling companies owned and controlled by Jeffrey’s 

brother, Appellee Ronald Perelman. Jeffrey contends that 

these transactions were not properly reported; depleted Plan 

assets; and increased the risk of default, such that his own 

defined benefits are in jeopardy. The District Court 

dismissed several of Jeffrey’s claims for lack of constitutional 

standing, later granted summary judgment against him on all 

remaining claims, and denied his application for attorneys’ 

fees and costs under ERISA § 502(g)(1), 29 U.S.C. § 

1132(g)(1). We will affirm.

I.

In 1982, Raymond became the Chairman of GRC, a 

large manufacturer of industrial materials.

1 Between 2003 

 

1 Our recitation of the factual background of this 

appeal is derived primarily from the Second Amended 

Complaint. 
5

and 2009, Raymond was a trustee of the GRC Plan, and he 

served as Plan Administrator between 2003 and 2005. In that

position he exercised discretionary control over management 

of Plan assets and thus qualified as both a plan fiduciary and a 

“party in interest” under ERISA. See 29 U.S.C. § 

1002(21)(A), (14)(A). Jason Guzek, a defendant in this 

action but not an appellee, assumed the role of Plan 

Administrator from 2006 to 2008 and was succeeded by GRC 

itself as Plan Administrator in 2009.

Raymond’s son Ronald has been the controlling 

shareholder of Revlon, Inc., and its wholly owned subsidiary,

Revlon Consumer Products Corporation (together, Revlon). 

Beginning in 2002, Raymond directed the Plan’s purchase of 

roughly $2 million of high-risk Revlon corporate bonds. In 

2004, Raymond converted those bonds into Revlon stock. He 

and his wife Ruth then assigned beneficial ownership of the 

Revlon shares to Mafco Holdings, Inc., another company 

owned and controlled by Ronald. As Plan trustee, Raymond 

also invested Plan assets in a lending agreement between 

Revlon and MacAndrews & Forbes Holdings, Inc. 

(MacAndrews), an entity that, like Revlon, was principally 

owned by Ronald. One consequence of these transactions 

was that Ronald, by virtue of his control over the voting 

rights of stock held by the Plan, became a Plan fiduciary 

under § 1002(21)(A). Ronald also qualified as a “party in 

interest,” both because of that fiduciary status and as a 

relative of Raymond. Id. § 1002(14)(A), (F).

Since 1985, Jeffrey has been a participant in GRC’s 

defined benefit pension plan. Jeffrey alleges that Raymond 

and Ronald, at the Plan’s expense, structured transactions to 

allow Ronald to raise capital for Revlon without sacrificing 

his control over the company. Jeffrey contends that these 
6

investments, which diminished Plan assets, were routinely 

misreported by the defendants on the annual reports that a 

plan administrator must file with the Internal Revenue 

Service (IRS) and Department of Labor. See id. §§ 1023–24. 

Between 2003 and 2005, the reports did not disclose that the 

Plan held investments in Revlon bonds. Instead, the 2003 and 

2004 reports stated that all Plan assets were invested in 

master trust accounts, while the reports from 2005 through 

2009 stated that all Plan assets were invested in mutual funds. 

Assessments from independent auditors, which were

appended to the annual reports between 2003 and 2008, did 

disclose the investments in Revlon bonds, but either failed to 

identify those investments as party-in-interest transactions or 

did so for the wrong reasons. The Plan’s investment in the 

lending agreement between Revlon and MacAndrews also

was described inaccurately.

In October 2010, Jeffrey brought this lawsuit both as 

an individual and on behalf of the Plan against Raymond, 

Ronald, Guzek, and GRC. The Second Amended Complaint, 

filed on July 21, 2011, asserts the following: breach of 

fiduciary duty of care under 29 U.S.C. § 1104(a)(1)(B)

against Raymond and Ronald (counts One and Ten, 

respectively); prohibited party-in-interest transactions under § 

1106 against Raymond and Ronald (counts Two and Nine); 

failure to diversify plan assets under § 1104(a)(1)(C) against 

Raymond, Guzek, and GRC (counts Three and Six); failure to 

update or maintain proper plan documents under §§ 1024–27

against Raymond, Guzek, and GRC (counts Four and Seven); 

improper delegation of control of plan assets under § 

1104(a)(1) against Raymond (count Five); and failure to 

prosecute a co-fiduciary’s breach of fiduciary duty against 

Guzek, GRC, and Ronald (counts Eight and Eleven). The 
7

Complaint seeks monetary relief under ERISA § 502(a)(3), 

29 U.S.C. § 1132(a)(3), in the form of restitution for Plan 

losses and disgorgement of profits. It also demands

injunctive relief, including removal of Raymond as trustee; 

appointment of an independent trustee; an outside audit for all 

Plan years from 2002 to 2010; an order enjoining Raymond 

from ever again serving in a fiduciary capacity for an ERISA 

plan; and an order declaring void any provision in the Plan or 

its Trust Agreement that would indemnify any defendant. 

Finally, the Complaint requests attorneys’ fees and costs 

under ERISA § 502(g)(1), 29 U.S.C. § 1132(g)(1).

In August 2012, the District Court found that Jeffrey 

lacked constitutional standing to pursue restitution and 

disgorgement claims because he had failed to demonstrate an 

actual injury to himself, as opposed to the Plan. The Court 

nonetheless permitted Jeffrey to pursue the other requested 

forms of injunctive relief. Thereafter, in September 2012, 

Raymond executed a corporate resolution terminating himself 

as trustee and appointing Reliance Trust Company to that 

position.2 GRC also retained the services of an independent 

investment manager for the Plan. And earlier in 2012, 

Raymond voluntarily contributed $270,446.42 to the Plan’s 

trust. None of these actions, however, included an admission 

of culpability or wrongdoing.

 

2 The District Court later granted Jeffrey’s motion to 

add Reliance Trust Company as a defendant, but Jeffrey 

eventually stipulated to the dismissal of both Reliance and 

Guzek, neither of whom are parties to this appeal.
8

In January 2013, the Court denied Jeffrey’s motion to

file a Third Amended Complaint, finding that the addition of 

a claim for monetary damages under ERISA § 502(a)(2), 29 

U.S.C. § 1132(a)(2), would be futile, again for failure to 

allege an actual injury. The Court also denied as moot

Jeffrey’s bid to remove Raymond as trustee. With respect to 

the trustee indemnification language, the Court concluded 

that the Plan’s clause fell within a safe-harbor provision 

because any indemnification would be funded by GRC rather 

than by the Plan itself. Because the Trust Agreement, 

however, was ambiguous as to which entity would fund any 

indemnification, the Court concluded that Jeffrey had stated a 

claim for relief as to that document. The Court dismissed 

Jeffrey’s claim to permanently bar Raymond from serving as 

an ERISA fiduciary, finding that the Secretary of Labor, 

rather than Jeffrey, was the appropriate party to seek such 

relief with respect to pension plans in which Jeffrey was not a 

participant or beneficiary. And finally, the Court concluded 

that Jeffrey’s request for a historical audit would serve only to 

support an attendant claim for restitution and disgorgement,

which the Court had already concluded was impermissible in 

the absence of actual injury sustained by Jeffrey. The Court 

thus limited the scope of Jeffrey’s demand for an audit to a 

determination of whether the Plan was currently at risk of 

default.

In February 2014, the Court granted summary 

judgment in favor of the defendants on all remaining claims. 

First, the Court concluded that, under statutorily endorsed

accounting principles, no genuine dispute of material fact 

existed as to whether the Plan was currently funded, meaning 

that Jeffrey was not entitled to audit relief. The Court also 
9

concluded that no live case or controversy existed with 

respect to the Trust Agreement’s indemnification clause.

On April 14, 2014, the District Court denied Jeffrey’s 

application for attorneys’ fees and costs, finding that Jeffrey 

had not achieved “some degree of success on the merits,” 

Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983), and 

that even if some degree of success had been achieved, 

Jeffrey had not demonstrated an entitlement to fees under the 

five-factor test announced in Ursic v. Bethlehem Mines, 719 

F.2d 670, 673 (3d Cir. 1983). He filed a timely appeal.

II.

The District Court had jurisdiction under 29 U.S.C. §

1132(e) and (f). We have appellate jurisdiction under 28 

U.S.C. § 1291.

Jeffrey raises two main claims on appeal. First, he 

contends that he has standing to seek monetary equitable 

relief such as disgorgement or restitution under ERISA § 

502(a)(3) because (1) he did in fact suffer an increased risk of 

Plan default with respect to his defined benefits, and (2) 

insofar as he seeks relief on behalf of the Plan, no showing of 

individual harm is necessary. Second, Jeffrey challenges the 

denial of attorneys’ fees and costs, contending that (1) his 

lawsuit was a catalyst for the voluntary resolution of several 

issues, including Raymond’s resignation as Trustee, and (2) 

the District Court misapplied the five Ursic factors.

A.

The burden of establishing standing lies with the 

plaintiff. Berg v. Obama, 586 F.3d 234, 238 (3d Cir. 2009). 
10

We exercise de novo review over a district court’s legal 

conclusions related to standing and review the factual 

elements underlying that determination for clear error. 

Edmonson v. Lincoln Nat’l Life Ins. Co., 725 F.3d 406, 414 

(3d Cir. 2013).

The three well-established elements of the doctrine of 

constitutional standing are as follows:

First, the plaintiff must suffer an 

injury-in-fact that is concrete and 

particularized and actual or 

imminent, as opposed to 

conjectural or hypothetical. 

[Lujan v. Defenders of Wildlife, 

504 U.S. 555, 560 (1992).] 

Second, “there must be a causal 

connection between the injury and 

the conduct complained of—the 

injury has to be ‘fairly . . . 

trace[able] to the challenged 

action of the defendant, and not . .

. th[e] result [of] the independent 

action of some third party not 

before the court.’” Id. (alterations 

in original) (quoting Simon v. E. 

Ky. Welfare Rights Org., 426 U.S. 

26, 41–42 (1976)). “Third, it 

must be likely, as opposed to 

merely speculative, that the injury 

will be redressed by a favorable 

decision.” Id. (quotation marks 

omitted).
11

Id. at 415. 

Over the past fifteen years we have twice grappled 

with the complexities of constitutional standing as it relates to 

claims for monetary equitable relief brought by plan 

participants under ERISA § 502(a)(3). See id. at 414–19; 

Horvath v. Keystone Health Plan E., Inc., 333 F.3d 450, 455–

57 (3d Cir. 2003).3 Jeffrey’s standing here, like that of the 

plaintiffs in Edmonson and Horvath, turns primarily on the 

first element—“injury-in-fact,” also described as “actual 

harm.” See Horvath, 333 F.3d at 456. With respect to claims 

for injunctive relief, such injury may exist simply by virtue of 

the defendant’s violation of an ERISA statutory duty, such as 

failure to comply with disclosure requirements. See id. 

Claims demanding a monetary equitable remedy, by contrast,

require the plaintiff to allege an individualized financial harm

traceable to the defendant’s alleged ERISA violations. Id. at 

457.4

 

3 The parties do not dispute that Jeffrey, as a Plan 

participant and beneficiary, has statutory standing to bring a 

claim under ERISA § 502(a)(3).

4 As we discuss below, our later opinion in Edmonson

clarified that where a plaintiff seeks disgorgement, rather than 

“make-whole” relief such as restitution or surcharge, the 

financial harm need not necessarily take the form of a 

“loss”—it may instead consist of the measure of the 

defendant’s unjust profits coupled with the right of the 

beneficiary, as opposed to the plan, to those profits. 725 F.3d 

at 418.
12

Jeffrey claims two financial injuries that, in his view, 

support a finding of standing to pursue “make-whole” 

equitable relief in the form of restitution or surcharge. First, 

he submits expert testimony that the Plan suffered a net 

diminution in assets of approximately $1.3 million as a result 

of Raymond’s investment of Plan assets in Revlon debt.

5

 

Second, he offers expert testimony that due to this diminution 

in assets, the Plan’s risk of default increased dramatically. He 

concedes, however, that to date, he has received all 

distributions under the Plan to which he was entitled.

In the case of a defined benefit plan, like the Plan here, 

the Supreme Court has established that diminution in plan 

assets, without more, is insufficient to establish actual injury 

to any particular participant. See Hughes Aircraft Co. v. 

Jacobson, 525 U.S. 432, 439–41 (1999). This stems from the 

fact that participants in such a plan are entitled only to a fixed 

periodic payment, and have no “claim to any particular asset 

that composes a part of the plan’s general asset pool.” Id. at 

440. Accordingly, even if the defendants’ dealings resulted in 

a diminution in Plan assets, they are insufficient to confer 

standing upon Jeffrey absent a showing of individualized 

harm.

By contrast, there is some support for the notion that a 

participant or beneficiary in a defined benefit plan has 

suffered an injury sufficient to pursue a claim for “makewhole” equitable monetary relief under § 502(a) where the 

fiduciary’s alleged misconduct “creates or enhances the risk 

 

5 This sum accounts for Raymond’s voluntary payment 

of $270,446 into the Plan’s trust in 2012.
13

of default by the entire plan.” LaRue v. DeWolff, Boberg & 

Assocs., Inc., 552 U.S. 248, 255 (2008). The risk of default 

by defined benefit plans, of course, is not a novel or abstract 

concept. Congress has sought rigorously to minimize or 

eliminate such risk by requiring defined benefit plans “to 

satisfy complex minimum funding requirements, and to make

premium payments to the Pension Benefit Guaranty 

Corporation for plan termination insurance.” Id.

Specifically, an employer must make “minimum 

required contribution[s]” to its defined benefit plan whenever 

“the value of plan assets” is less than the plan’s yearly 

“funding target,” defined as “the present value of all benefits 

accrued or earned under the plan as of the beginning of the 

plan year.” 26 U.S.C. § 430(a)(1), (d)(1); 29 U.S.C. § 

1083(a)(1), (d)(1). In other words, an employer is required to 

contribute to a plan whenever the plan’s liabilities exceed its 

assets. However, a plan does not qualify as “at-risk” or 

“underfunded”—statuses which trigger even more onerous

funding safeguards—unless the value of plan assets is less 

than 80% of the plan’s funding target. 26 U.S.C. § 430(i)(4), 

(f)(3)(C); 29 U.S.C. § 1083(i)(4), (f)(3)(C).

Under the same statutory scheme, plan surpluses or 

shortfalls are calculated based on prevailing “segment rates,” 

i.e., interest rates based on historical bond yields. See 26 

U.S.C. § 430(h)(2); 29 U.S.C. § 1083(h)(2). On July 6, 2012, 

Congress enacted the Moving Ahead for Progress in the 21st 

Century Act (MAP-21), Pub. L. No. 112-141, § 40211, 126 

Stat. 405, 846–50 (2012), which authorized the use of new 

segment rates beginning December 31, 2011. See 26 U.S.C. § 

430(h)(2)(C)(iv); 29 U.S.C. § 1083(h)(2)(C)(iv). That 

authorization was extended in August 2014 and remains

operative. See Highway and Transportation Funding Act of 
14

2014 (HAFTA), Pub. L. No. 113–159, § 2003, 128 Stat. 

1839, 1849–51 (2014). As explained in HAFTA’s legislative 

history, “MAP–21 modified the interest rates used in valuing 

pension liabilities to give employers the option to effectively 

spread out the higher contributions over a longer period of 

time than would otherwise have been required.” H.R. Rep. 

No. 113-520, pt. 1, at 19 (2014).

As of January 1, 2013, the date of the Plan’s most 

recent available actuarial report, the Plan had assets of 

approximately $13.6 million. Jeffrey concedes that, under 

MAP-21 accounting methods, the Plan’s liabilities at that 

time were approximately $13.0 million, meaning that the 

Plan’s assets exceeded its liabilities. By the same token, 

however, we accept his allegations (which are bolstered by 

his expert) that, under the statutory valuation methods

predating MAP-21, the Plan’s liabilities on an ongoing plan 

basis were approximately $16 million—a ratio that left the 

Plan only 85% funded. In Jeffrey’s view, the fact that the 

Plan’s assets were less than its liabilities under at least one 

analytical approach would permit a factual finding that

Raymond’s dealings increased the risk that the Plan might 

default on its obligations. Jeffrey argues that the dueling 

legitimacy of the two accounting approaches is a question of 

fact that must be resolved at trial.

We agree with the District Court, however, that the 

controlling yardstick here is provided by the finely tuned

framework established by Congress. Where a plan’s assets 

exceed its liabilities under a statutorily accepted accounting 

method, it passes muster as a matter of law, i.e., the employer 

need not make additional contributions to remove a

designation of “at-risk” or “underfunded” status. See, e.g., 

Harley v. Minn. Min. & Mfg. Co., 284 F.3d 901, 908 (8th Cir.
15

2002) (finding no injury where plan funding level had not 

triggered minimum required contributions); Adedipe v. U.S. 

Bank, Nat’l Ass’n, 62 F. Supp. 3d 879, 894–95 (D. Minn. 

2014) (concluding that the “relevant measure” for actual 

injury is whether the plan’s funding levels triggered minimum 

required contributions).

Here, the evidence is undisputed that as of January 1, 

2013, under a valuation method approved by Congress, the 

Plan was appropriately funded, and GRC had no obligation to 

make further contributions to stabilize the Plan’s finances. 

Under the circumstances, Jeffrey’s allegation that the Plan is 

nonetheless at risk of default is entirely speculative. See

David v. Alphin, 704 F.3d 327, 338 (4th Cir. 2013) (“[T]he 

risk that Appellants’ pension benefits will at some point in the 

future be adversely affected as a result of the present alleged 

ERISA violations is too speculative to give rise to Article III 

standing.”); Harley, 284 F.3d at 906–07 (noting that because 

of minimum contribution requirements, diminutions in plan 

surplus generally do not result in actual harm to 

beneficiaries). Thus, like the District Court, we conclude that 

the SAC fails to allege the actual harm required to sustain 

constitutional standing for an individual claim of “makewhole” equitable relief under § 502(a)(3).

Jeffrey also claims that he has standing to seek 

disgorgement of profits under Edmonson, where we 

recognized that “an ERISA beneficiary suffers an injury-infact sufficient to bring a disgorgement claim when a 

defendant allegedly breaches its fiduciary duty, profits from 

the breach, and the beneficiary, as opposed to the plan, has an 

individual right to the profit.” 725 F.3d at 418. He is correct 

that, to pursue such a claim, a plaintiff need not plead a 

financial loss. Nonetheless, the plaintiff must still show “an 
16

individual right to the defendant’s profit . . . .” Id. at 417. 

Jeffrey has failed to do so.

Finally, Jeffrey argues that he need not prove an 

individualized injury insofar as he seeks monetary equitable 

remedies in a “derivative” or “representative” capacity on 

behalf of the Plan.6 Our own case law provides no support 

for this theory, and other federal appellate courts have 

unanimously rejected it. See Alphin, 704 F.3d at 334–36 

(finding no representational standing where plaintiffs suffered 

no individualized injuries); McCullough v. AEGON USA Inc., 

585 F.3d 1082, 1086 (8th Cir. 2009) (same); Loren v. Blue 

Cross & Blue Shield of Mich., 505 F.3d 598, 608–09 (6th Cir. 

2007) (same); Glanton ex rel. ALCOA Prescription Drug 

Plan v. AdvancePCS Inc., 465 F.3d 1123, 1125 (9th Cir. 

2006) (noting that there is “no . . . tradition of unharmed 

ERISA beneficiaries bringing suit on behalf of their plans”); 

Harley, 284 F.3d at 906 (“[T]he limits on judicial power 

imposed by Article III counsel against permitting participants 

or beneficiaries who have suffered no injury in fact from 

 

6 There is no question that representative suits by plan 

participants or beneficiaries against fiduciaries for breach of 

fiduciary duty are permitted by, and generally brought under, 

ERISA § 502(a)(2). See, e.g., Mass. Mut. Life Ins. Co. v. 

Russell, 473 U.S. 134, 140 (1985). A handful of courts have 

concluded that § 502(a)(3) also authorizes representative suits 

seeking equitable recovery on behalf of a plan. See, e.g.,

Banyai v. Mazur, No. 00-civ-9806(SHS), 2007 WL 959066, 

at *3 (S.D.N.Y. Mar. 29, 2007). We will not reach that 

question because we conclude that Jeffrey lacks standing in 

any event.
17

suing to enforce ERISA fiduciary duties on behalf of the 

Plan.”) (emphasis omitted). Jeffrey provides no authority or 

other convincing reason for us to break from the reasoned 

consensus of our sister circuits.7 Accordingly, we conclude 

that Jeffrey lacks standing to sue under § 502(a)(3) even in a 

purely representative capacity insofar as he seeks monetary 

equitable relief. In sum, we will affirm the District Court’s 

dismissal of all counts in the Second Amended Complaint

insofar as Jeffrey seeks monetary equitable relief.

8

 

7

Jeffrey suggests that if plan participants and 

beneficiaries lack standing to bring representative claims for 

monetary equitable relief, misconduct by plan fiduciaries will 

go unpunished. The Secretary of Labor, however, has 

standing to seek appropriate relief for fiduciary misconduct 

under § 502(a)(2).

8 As noted earlier, Jeffrey also appeals from the 

District Court’s denial of his motion to file a Third Amended 

Complaint, which differed from his preceding drafts 

principally in that it sought monetary relief under ERISA § 

502(a)(2). That provision allows plan beneficiaries to bring a 

derivative suit seeking relief from plan fiduciaries for breach 

of fiduciary duty under ERISA § 509, 29 U.S.C. § 1109. See, 

e.g., In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 

594–95 (3d Cir. 2009). We agree with the District Court that 

Jeffrey’s failure to allege actual injury leaves him without 

standing to bring suit for monetary damages under § 

502(a)(2), just as it bars his existing claims under § 502(a)(3). 

Accordingly, because Jeffrey’s proposed amendment would 

be futile, we will affirm the District Court’s denial of leave to 

amend.
18

B.

Jeffrey’s remaining challenge is to the District Court’s 

denial of attorneys’ fees and costs. Our review of a district 

court’s denial of an award of attorneys’ fees is for abuse of 

discretion, but we review the applicable legal standards de 

novo. McPherson v. Emps.’ Pension Plan of Am. Re-Ins. Co., 

33 F.3d 253, 256 (3d Cir. 1994).

ERISA § 502(g)(1) permits a district court to award “a 

reasonable attorney’s fee and costs” even to a losing party, 

although only one who has achieved “‘some degree of 

success on the merits.’” Hardt v. Reliance Standard Life Ins. 

Co., 560 U.S. 242, 244–45 (2010) (quoting Ruckelshaus, 463 

U.S. at 694). Surmounting that hurdle requires more than 

“‘trivial success on the merits’ or a ‘purely procedural 

victory.’” Id. at 255 (quoting Ruckelshaus, 463 U.S. at 688 

n.9) (alteration omitted). Instead, the court must be able to 

resolve the question “without conducting a ‘lengthy inquir[y] 

into the question whether a particular party’s success was 

 

Jeffrey also purports to appeal from all of the District 

Court’s many legal rulings contained within its orders of 

August 28, 2012, January 24, 2013, February 18, 2014, and 

April 14, 2014, including rulings addressing his claims for 

injunctive relief. Nonetheless, he makes no tailored argument 

that the District Court’s dismissal or grant of summary 

judgment on those claims was inappropriate in any particular 

respect. We will therefore affirm the District Court’s 

rejection of all remaining claims for equitable relief.
19

‘substantial’ or occurred on a ‘central issue.’” Id. (alteration 

in original).

Here, Jeffrey relies on what we have called the 

“catalyst theory” to establish that he has achieved some 

degree of success on the merits. Under that theory, a plaintiff 

may satisfy the Ruckelshaus standard if, despite failing to 

obtain a judgment or even a single ruling in his favor, his 

“litigation activity pressured a defendant to settle or render to 

a plaintiff the requested relief.” Templin v. Independence 

Blue Cross, 785 F.3d 861, 866 (3d Cir. 2015) (emphasis 

omitted).

The District Court determined that Jeffrey had not 

achieved a level of substantive success sufficient to support

an award of fees under ERISA § 502(g)(1). We conclude 

otherwise. The record reflects that, after the filing of 

Jeffrey’s lawsuit, Raymond stepped down as Plan trustee; an 

independent trustee was appointed; some Plan losses were 

reimbursed; Plan records were amended to reflect party-ininterest transactions; and trustee-indemnification provisions 

were modified or removed. Raymond’s counsel conceded 

that these actions, which for the most part numbered among 

the demands for relief stated in the Complaint, “were done in 

an effort to get rid of this case.” App. 902. The concessions 

were not merely procedural, and instead had a definite impact 

on Raymond’s degree of control over Plan assets and on the 

likelihood of accurate reporting of transactions involving Plan 

assets in the future. Although such victories were nonmonetary, that renders them no less substantive.

Even where the party has achieved success on the 

merits, however, the district court nonetheless retains 
20

discretion as to whether to award fees in light of the familiar 

Ursic factors, which include:

(1) the offending parties’ 

culpability or bad faith;

(2) the ability of the offending 

parties to satisfy an award of 

attorneys’ fees;

(3) the deterrent effect of an 

award of attorneys’ fees against 

the offending parties;

(4) the benefit conferred on 

members of the pension plan as a 

whole; and 

(5) the relative merits of the 

parties’ position[s].

719 F.2d at 673. The District Court considered the Ursic 

factors in the alternative, and found that although the second 

and third factors—ability to pay and deterrent effect—

weighed in Jeffrey’s favor, the first, fourth, and fifth 

factors—culpability, benefit conferred on Plan members other 

than Jeffrey, and the relative merits of the parties’ positions—

weighed against an award of fees. On the whole, the Court 

found that an award of fees was not appropriate.

We conclude that the District Court did not abuse its 

discretion by declining to award fees. First, the culpability of 

the defendants remains speculative. Second, the benefit of 

Jeffrey’s lawsuit to other Plan participants has been of a 

limited and non-monetary nature—the Plan itself remains 
21

fully funded under federal benchmarks. And third, for the 

reasons already stated at great length both here and in the 

District Court, Jeffrey’s legal efforts to date, which have 

involved several years of litigation and four iterations of the 

complaint, were predicated in large part upon a flawed theory 

of constitutional standing. Under the circumstances, we 

conclude that the District Court did not abuse its discretion in 

declining to compel the defendants to finance Jeffrey’s

lawsuit. Accordingly, we will affirm the District Court’s 

denial of attorneys’ fees and costs to Jeffrey under ERISA § 

502(g)(1).

III.

For the foregoing reasons, we will affirm the District 

Court’s orders of August 28, 2012; January 24, 2013; 

February 18, 2014; and April 14, 2014.