Opinion ID: 731884
Heading Depth: 4
Heading Rank: 2

Heading: to enforce any provisions of

Text: this subchapter or the terms of the plan. 20 29 U.S.C. §§ 1132(a)(2), (a)(3). The text is silent as to pre-suit demand and mandatory joinder of trustees – in fact, no preconditions on a participant or beneficiary‘s right to bring a civil action to remedy a fiduciary breach are mentioned at all. This led the Supreme Court to hold in Harris Trust & Savings Bank v. Salomon Smith Barney, Inc., 530 U.S. 238 (2000), that Section 502(a)(3): [A]dmits of no limit (aside from the ―appropriate equitable relief‖ caveat) on the universe of possible defendants. Indeed § 502(a)(3) makes no mention at all of which parties may be proper defendants – the focus, instead, is on redressing the ―act or practice which violates any provision of [ERISA Title I].‖ Other provisions of ERISA, by contrast, expressly address who may be a defendant. Id. at 239 (quoting 29 U.S.C. § 1132(a)(3)) (citing 29 U.S.C. §1109(a)). The text of Sections 502(a)(2) and 502(a)(3) thus does not require joinder of trustees. Furthermore, no Court of Appeals has found pre-suit demand a requirement for civil actions brought under Sections 502(a)(2) or (a)(3). See, e.g., Katsaros v. Cody, 744 F.2d 270, 280 (2d Cir. 1984) ([A]lthough common law may have required a prior demand before bringing an action, Congress did not incorporate that 21 doctrine into the ERISA statute. The ERISA jurisdictional statute, 29 U.S.C. § 1132(a)(3), contains no such condition precedent to filing suit.); Licensed Div. Dist. No. 1 MEBA/NUM v. Defries, 943 F.2d 474, 479 (4th Cir. 1991) (citing Katsaros for the proposition that no prior demand requirement is incorporated into ERISA). The District Court, relying on Diduck v. Kaszycki & Sons Contractors, Inc., 874 F.2d 912 (2d Cir. 1989), and the common law of trusts, held that pre-suit demand upon the trustees and joinder of the trustees as parties were prerequisites to Participants‘ ERISA claims. Diduck, however, was decided under Section 502(g)(2) of ERISA, 29 U.S.C. § 1132(g)(2), not Sections 502(a)(2) and (a)(3), under which Participants proceed. Indeed, the Second Circuit itself has explained that its holding in Diduck is limited to claims brought under Section 502(g)(2), which ―authorizes fiduciaries, but no one else, to obtain unpaid contributions pursuant to ERISA § 515, 29 U.S.C. § 1145, which requires employers participating in multi-employer ERISA plans to make obligatory contributions to the plans.‖ Coan v. Kaufman, 457 F.3d 250, 258 (2d Cir. 2006). As the Second Circuit explained: Because section 502(g)(2) only applies to suits by fiduciaries, it is sensible to require plan participants, if they may assert the fiduciaries' right of action at all, to follow Rule 23.1, which applies when the appropriate plaintiff has ―failed to enforce a right which may properly be asserted by it.‖ 22 FED. R. CIV. P. 23.1. Section 502(a)(2), unlike section 502(g)(2), provides an express right of action for participants – presumably because the drafters of ERISA did not think fiduciaries could be relied upon to sue themselves for breach of fiduciary duty. Id. One reason for this lack of a demand requirement for Section 502(a)(2) and (a)(3) claims is that the protective purposes of ERISA would be subverted if the section covering fiduciary breach required beneficiaries to ask trustees to sue themselves. Accordingly, the District Court erred in concluding that Section 502(g) claims are ―akin‖ to Section 502(a) claims. Santomenno, 2011 WL 2038769, at . ―Because plan participants are expressly authorized to bring suit under section 502(a)(2), the situation here is not controlled by Diduck.‖ Coan, 457 F.3d at 258. In addition to the text, structure, and purpose of ERISA, the legislative history of the statute also indicates that Congress did not intend to impose obstacles such as pre-suit demand or mandatory joinder of trustees with respect to claims brought under Section 502(a): The enforcement provisions have been designed specifically to provide both the Secretary [of Labor] and participants and 23 beneficiaries with broad remedies for redressing or preventing violations of the [Act] . . . . The intent of the Committee is to provide the full range of legal and equitable remedies available in both state and federal courts and to remove jurisdictional and procedural obstacles which in the past appear to have hampered effective enforcement of fiduciary responsibilities under state law or recovery of benefits due to participants. S. REP. NO. 93-127, at 3 (1973), reprinted in 1974 U.S.C.C.A.N. 4838, 4871. As we noted in Leuthner v. Blue Cross & Blue Shield of Northeastern Pennsylvania, 454 F.3d 120 (3d Cir. 2006), ―ERISA's legislative history indicates that Congress intended the federal courts to construe the statutory standing requirements broadly in order to facilitate enforcement of its remedial provisions.‖ Id. at 128. In dismissing the ERISA counts, the District Court relied on ―guidance from the common law of trusts.‖ Santomenno, 2011 WL 2038769 at . We believe this reliance was misplaced, as the statute unambiguously allows for beneficiaries or participants to bring suits against fiduciaries without pre-suit demand or joinder of trustees. The common law of trusts is not incorporated en masse into ERISA. On the contrary, ―trust law will offer only a starting point, after which courts must go on to ask whether, or to what extent, the language of the statute, its structure, or its 24 purposes require departing from common-law trust requirements.‖ Varity Corp. v. Howe, 516 U.S. 489, 497 (1996). As noted above, the language of the statute, the legislative history, and the structure of this remedial legislation compel the conclusion that neither a pre-suit demand requirement nor joinder of the plan trustees is a prerequisite to Participants‘ claims. Accordingly, the District Court should not have dismissed Counts I through VII due to the lack of a pre-suit demand upon the plan trustees and the absence of the trustees as parties to this action.