Opinion ID: 496793
Heading Depth: 2
Heading Rank: 2

Heading: ERISA Title II

Text: 13 Appellants contend that SERP as amended by SHARP is a top-heavy plan within the meaning of the Internal Revenue Code. See I.R.C. Sec. 416(g) (1982). If true, a loss of tax benefits would result. Citing the four-factor analysis of Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26 (1975), appellants argue that this fact gives them an implied cause of action for a violation of Title II of ERISA. 14 The district court rejected this claim as not properly before it. In so doing, the district court noted that appellants had raised this claim for the first time in their motion for summary judgment. Accordingly, the district court rejected the claim as outside the scope of the pleadings as well as not a matter of record. Citing Massachusetts Mut. Ins. Co. v. Russell, 473 U.S. 134, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985), the district court stated that even if the plaintiffs were given the opportunity to incorporate this claim in an amended complaint, the claim would fail. 15 Assuming, without deciding, that appellants' claim was appropriately before the district court, we find no merit in the claim. Appellants cite no provision of ERISA indicating that the creation of a top-heavy plan violates ERISA. The mere fact that ERISA sets forth requirements for qualification of plans does not lead one to conclude that the failure of a plan to meet these requirements is a violation of ERISA. Even assuming, arguendo, that the creation of a top-heavy plan violates ERISA, the application of the Cort test suggests that no private cause of action should be implied in this case. Two of the four Cort factors support appellants' claim: appellants are members of the class for whose benefit ERISA was enacted and ERISA's preemptive effect indicates that there is no state-law impediment to implying a remedy. However, the remaining two Cort factors--legislative intent and consistency with the legislative scheme--militate against appellants' claim. 16 In Russell, the United States Supreme Court stated that unless [the] congressional intent [to provide an implied private cause of action] can be inferred from the language of the statute, the statutory structure, or some other source, the essential predicate for implication of a private remedy simply does not exist. 473 U.S. at 145, 105 S.Ct. at 3092 (quoting Northwest Airlines, Inc. v. Transport Workers, 451 U.S. 77, 94, 101 S.Ct. 1571, 1582, 67 L.Ed.2d 750 (1981)). The Russell Court concluded that the civil enforcement provisions of section 502(a) of ERISA provide strong evidence that Congress did not intend to authorize other remedies for ERISA violations that it did not incorporate expressly. Id. 473 U.S. at 145-48, 105 S.Ct. at 3092-94. While the Russell Court was deciding a type of claim different from that in the instant case, we find the Court's statements regarding the comprehensive remedial structure of ERISA instructive. Accordingly, we find it inappropriate to imply a private cause of action under ERISA for the creation of a top-heavy plan. In so holding, we express no opinion as to whether appellants produced sufficient evidence to suggest that SHARP was, in fact, topheavy.