Opinion ID: 794065
Heading Depth: 2
Heading Rank: 5

Heading: Dismissal of the Sellers

Text: 36 The district court dismissed most of the claims against the sellers at the summary judgment stage but ordered them to remain in the case in order to defend against the ESOP's claims for disgorgement of profits under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3). Following the bench trial, the district court dismissed the sellers from the case entirely. See Henry II, 334 F.Supp.2d at 255 n. 1. On appeal, U.S. Trust argues that the plaintiffs' disgorgement claim against the sellers should be reinstated; the sellers argue that the plaintiffs' disgorgement claim has been abandoned. The district court's factual findings regarding the actions taken by the plaintiffs in regard to their disgorgement claim against the sellers are reviewed for clear error. Benjamin v. Fraser, 343 F.3d 35, 43 (2d Cir. 2003). The question of whether the plaintiffs' actions constituted an abandonment of their disgorgement claim against the sellers is a question of law, which is subject to de novo review. Contship Containerlines, Ltd. v. PPG Indus., Inc., 442 F.3d 74, 77 (2d Cir.2006). 37 The record shows that after the court dismissed the plaintiffs' disgorgement claim against the sellers, the plaintiffs neither objected to nor appealed from that dismissal. Rather than appeal the dismissal, the plaintiffs opted to pursue other claims against the sellers (chiefly, the claim that the sellers violated § 5.7 of the Stock Purchase Agreement) in a separate action. See Henry v. von Elbe ( Henry IV ), No. 1:04-CV-0201(DNH), slip op. at 5-6 (N.D.N.Y. Aug. 25, 2005). 38 U.S. Trust seeks to overturn the plaintiffs' decision not to pursue their disgorgement claim, arguing on appeal that this Court should reinstate the claim. Only the plaintiffs, however, may appeal the district court's dismissal of their disgorgement claim because the plaintiffs are the ones who asserted this claim in the first instance. As the plaintiffs opted not to appeal, we have no cause to revive the claim at this stage of the litigation. See, e.g., Castellano v. City of New York, 142 F.3d 58, 72 (2d Cir.1998) (issues not raised on appeal are deemed abandoned). U.S. Trust cannot pursue a claim abandoned by the plaintiffs, and because it did not assert a cross-claim against the sellers below, it has no right to ask for the reinstatement of the disgorgement claim against the sellers. See, e.g., A.A. ex rel. J.A. v. Philips, 386 F.3d 455, 459 n. 3 (2d Cir.2004) (declining to consider claims raised for the first time on appeal). Thus, we find that the plaintiffs' disgorgement claim against the sellers has been abandoned and may not be revived by U.S. Trust.