Court Opinion

ID: 8407934
Source: CourtListenerOpinion
Date Created: 2022-11-02 16:37:08.1039+00
Date Added: 2024-06-11T16:47:31.475210
License: Public Domain

RAWLINSON, Circuit Judge,
Dissenting:
I respectfully dissent from that portion of the majority’s opinion reversing the district court’s dismissal of Plaintiffs’ breach of fiduciary duty claim. I agree with the *1204majority that “the trustees are fiduciaries for the purposes of ERISA.” However, I cannot join the majority’s foray into the common law of trusts to thrust an obligation upon the fund that ERISA’s comprehensive statutory scheme does not countenance.
The majority cites generally to 29 U.S.C. § 1027 as the source of the trustee’s duty “to keep adequate records so that the books of the plan can be checked if the need arises.” Majority Opinion at 1202. However, a careful reading of the text of the cited provision does not support the majority’s casual reliance on it.
29 U.S.C. § 1027 provides that:
Every person subject to a requirement to file any report or to certify any information therefor under this subchapter ... shall maintain records on the matters of which disclosure is required which will provide in sufficient detail the necessary basic information and data from which the documents thus required may be verified ...
A plain reading of this statute results in imposing upon the trustees an obligation to maintain adequate records only on those matters of required disclosure.
As the majority opinion acknowledges (Maj. Op. at 1201-1202), 29 U.S.C. § 1024 outlines the reporting requirements for trustees. The majority also concedes, as it must, that the documents sought by Plaintiffs “were not subject to the statute’s disclosure requirement.” Maj. Op. at 1200. The majority nevertheless plucks from thin air a freestanding fiduciary duty outside the confines of the statutory disclosure requirements. Although the majority opinion references 29 U.S.C. § 1027 as the source of the trustee’s duty (Maj. Op. at 1202), its previous analysis of 29 U.S.C. § 1024 excludes the requested documents from the retention requirements of 29 U.S.C. § 1027.
Section 1027 compels retention of only those records for which disclosure is required. If the records sought were not subject to disclosure under § 1024, the retention requirements of § 1027 never came into play. Scratch § 1027 as a legitimate base of support for the majority’s ruling.
The majority also cites United States v. Sarault, 840 F.2d 1479 (9th Cir.1988) to bolster its holding. Maj. Op. at 1202. However, Sarault is easily disposed of because it involved “a document required to be kept by ... 18 U.S.C. § 1027,” id. at 1480 (emphasis added), unlike the documents at issue in this case.
The majority provides an incomplete quote from Acosta v. Pac. Enter., 950 F.2d 611, 618 (9th Cir.1991), to validate its reliance upon the common law of trusts. The majority quotes this language from Acosta: “ERISA’s legislative history demonstrates that ‘Congress invoked the common law of trusts to define the scope of [a fiduciary’s] authority and responsibility.’ ” Maj. Op. at 1203. The majority conveniently omitted this clarifying language:
However, common law trust duties regarding the disclosure of information to beneficiaries may be read into ERISA ... only to the extent that they relate to the provision of benefits or the defrayment of expenses, and only insofar as they do not contradict or supplant the existing reporting and disclosure provisions. Thus, an ERISA fiduciary has an affirmative duty to inform beneficiaries of circumstances that threaten the funding of benefits, and to provide an individual faced with termination of plan coverage, upon request, “complete and correct material information on [his] status and options[.]” A fiduciary need not, however, adhere to stricter deadlines for statutorily required reporting than those provided in the statute. Id. *1205at 618-19 (emphasis added) (citations omitted).
The final sentence in this quoted passage reflects the holding of Porto v. Armco, Inc., 825 F.2d 1274 (8th Cir.1987). In Porto, the Eighth Circuit expressly recognized that:
[a] plan administrator’s duty to disclose information to plan participants is another matter, dealt with separately by ERISA [not the common law of trusts ]
... [A]n administrator who complies with the statutory standard for disclosure cannot be said to have breached [its] fiduciary duty ...
Id. at 1276. (emphasis added).
More recently, we have definitively, although briefly, confirmed the distinction articulated by the Court in Porto. In Pension Trust Fund v. Fed. Ins. Co., 307 F.3d 944, 950 (9th Cir.2002), we distinguished the broad definition of fiduciary duties under common law as opposed to the limited scope of fiduciary duties under ERISA.
In light of ERISA’s express explication of the trustee’s disclosure requirements and the corresponding inapplicability of common-law obligations, I cannot join the majority’s unwarranted expansion of trustee liability. I would affirm the judgment of the district court in its entirety.