Court Opinion

ID: 9557423
Source: CourtListenerOpinion
Date Created: 2023-08-21 16:49:52.884168+00
Date Added: 2024-06-11T09:05:49.389917
License: Public Domain

*1088BYE, Circuit Judge,
dissenting.
I believe the Supreme Court’s recent decision in Sprint Communications Co. v. APCC Services, Inc., - U.S. -, 128 S.Ct. 2531, 171 L.Ed.2d 424 (2008), compels us to reach a different result in this case than the result reached in Harley v. Minnesota Mining & Manufacturing Co., 284 F.3d 901 (8th Cir.2002). I therefore respectfully dissent.
“Although one panel of this court ordinarily cannot overrule another panel, this rule does not apply when the earlier panel decision is cast into doubt by a decision of the Supreme Court.” Patterson v. Tenet Healthcare, Inc., 113 F.3d 832, 838 (8th Cir.1997). In order to disregard Harley, we must “explicitly identify the error or changed circumstances and explain why a different result is justified.” Jacobs v. Lockhart, 9 F.3d 36, 38 (8th Cir.1993). For the reasons discussed below, I believe Sprint requires us to disregard Harley.
The majority concludes Sprint does not compel us to disregard Harley because the latter turned on statutory grounds, rather than on Article III standing, and the statutory holding in Harley remains intact after Sprint. The notion Harley turns on a statutory holding is dubious at best. Although Harley purported to avoid the standing issue by interpreting the statute in a way which prohibits participants or beneficiaries from bringing suit to recover for a loss suffered by the plan, the statute plainly and unambiguously permits such an action. See 29 U.S.C. § 1132(a)(2) (“A civil action may be brought ... by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title.”). Thus, as I pointed out in my dissent in Harley, “we have no choice but to address the Article III question head-on.” Harley, 284 F.3d at 910 (Bye, J., dissenting).
Remarkably absent from Harley is any discussion of the statutory language it purports to interpret in order to avoid the constitutional standing concerns. In this case, the majority’s discussion of Harley’s statutory holding consists of a single sentence speculating about the textual basis for the holding. See Ante at 1084 (recognizing Harley does not identify the textual basis for its holding and merely “presuming]” what it might be). As a consequence, both decisions seem to rest on a free-floating statutory interpretation untethered to any actual statutory construct. The resolution of McCullough’s ability to sue to recover for a loss suffered by the plan necessarily requires us to address his Article III standing, and Sprint casts considerable doubt on the standing principles addressed in Harley.
The majority also suggests Harley’s “statutory holding” rests on its conclusion which allows plan participants to sue on behalf of the plan would not advance ERISA’s primary purpose of protecting individual pension rights, because it would subject a plan and its fiduciaries to costly litigation. Id. at 1087. The majority also relies upon this aspect of Harley to avoid addressing Sprint’s discussion of Article III standing. This second aspect of Harley’s “statutory holding,” however, is also cast into doubt directly by the Supreme Court, which has recognized the very purpose for allowing beneficiaries and fiduciaries to sue on behalf of the plan under § 1132(a)(2) is “the common interest shared by [participants and beneficiaries] in the financial integrity of the plan.” Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 141 n. 9, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985).
Harley held plan participants and beneficiaries cannot rely upon a loss suffered by a fully-funded defined benefit plan to establish Article III standing to bring suit *1089under 29 U.S.C. § 1132(a)(2) to recover for a loss suffered by the plan. The three elements which must be present to satisfy Article III standing requirements are: (1) the plaintiff has a concrete and particularized injury-in-fact which is actual or imminent rather than merely conjectural or hypothetical; (2) a causal connection exists between the injury and the challenged conduct; and (3) a favorable decision will likely redress the injury. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). This case, like Harley, turns on the presence or absence of the first element — a concrete injury-in-fact.
Harley focused on whether the plan participants or beneficiaries themselves suffered a concrete injury and concluded “the limits on judicial power imposed by Article III counsel against permitting participants or beneficiaries who have suffered no injury in fact from suing to enforce ERISA fiduciary duties on behalf of the Plan.” 284 F.3d at 906. Thus, even though Harley recognized the defined benefit plan itself suffered an injury, id. at 905, the court concluded participants and beneficiaries lacked Article III standing because they themselves did not suffer a concrete injury.
Sprint addressed the question whether one party’s concrete injury confers Article III standing on a second party who has the right to prosecute the former’s claim pursuant to a contractual assignment. In that context, the Supreme Court indicated the assignors’ concrete injury is the focus for purposes of Article III standing, not whether the assignees suffered an injury. See Sprint, 128 S.Ct. at 2542 (recognizing “an assignee can sue based on his assign- or’s injuries.”). Indeed, Sprint went one step further by indicating the party with the right to prosecute the claim has Article III standing despite the lack of any right to the recovery. See id. (“[Our] inquiry focuses, as it should, on whether the injury that a plaintiff alleges is likely to be redressed through the litigation' — -not on what the plaintiff ultimately intends to do with the money he recovers.”). As the dissenters noted, the majority separated “the right to recover from the right to prosecute a claim,” 128 S.Ct. at 2551 (Roberts, C.J., dissenting), and recognized Article III standing for the party holding the right-to-prosecute “strand” of standing. Id.
Thus, Sprint indicates when A possesses the right to prosecute a claim on B’s behalf, A has constitutional standing to bring a claim arising from B’s injuries; that is, our inquiry in determining the presence of a concrete injury focuses on B’s injury, not A’s. If there is no legally significant difference between the party prosecuting the claim in Sprint (the assignees) and the party prosecuting the claim in Harley (the plan participants), Sprint necessarily casts doubt on Harley’s failure to focus on the plan’s concrete injury for standing purposes.
A notable difference between the Harley plan participants and the Sprint assignees is that the former obtained their right to prosecute the plan’s claim pursuant to statute, while the latter obtained their right to prosecute the assignors’ claims pursuant to contract. In Sprint, the Supreme Court discussed in detail the “history and tradition” of allowing an assignee to prosecute an assignor’s claim. See id. at 2535-41. Admittedly, there is no similar history and tradition of allowing ERISA plan participants to prosecute a fully-funded defined benefit plan’s claim. But the Supreme Court also noted “there is considerable, more recent authority showing that an assignee for collection may properly sue on the assigned claim in federal court.” Id. at 2541. One of the “more recent” *1090cases specifically discussed by the Supreme Court was Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). Id. at 2542.
In Vermont Agency, the Supreme Court addressed the standing of a party with the statutory right to prosecute a qui tarn action on behalf of the government under the False Claims Act4 and held it was the government’s concrete injury which conferred standing on the relator. 529 U.S. at 774, 120 S.Ct. 1858. The Court noted the False Claims Act effects a “partial assignment of the Government’s damages claim,” id. at 773, 120 S.Ct. 1858, and referred to the relator as “the statutorily designated agent of the United States,” id. at 772. Sprint subsequently clarified the key in Vermont Agency was the “partial assignment”5 giving the relator the right to prosecute the claim, not the right to share in the recovery, because in Sprint the assignees still had standing despite the fact that any recovery would inure only to the benefit of the assignors. See Sprint, 128 S.Ct. at 2542 (discussing Vermont Agency).
Reading Sprint and Vermont Agency together, there is no legally significant difference between the assignees in Sprint and the plan participants here or in Harley. Although an assignee’s right to prosecute another’s claim derives from contract, while an ERISA plan participant’s right to prosecute a plan’s claim derives from statute, in both instances the Supreme Court clearly instructs us as to the standing of the party with the right to prosecute the claim turns not on whether they themselves suffered an injury, but on whether the party holding the right-to-recover “strand” has a concrete injury which can be redressed by the lawsuit. In Sprint it did not matter that the assignees would not retain any of the recovery from the lawsuit. Likewise, here, it is irrelevant as to McCullough not being entitled to any recovery from the lawsuit. Applying Sprint and Vermont Agency to this case, then, McCullough has Article III standing to bring a claim arising from the Plan’s injuries so long as he possesses the right to prosecute the Plan’s claim pursuant to § 1132(a)(2), even though he may not possess any of the right to recover.
The only remaining question, then, for purposes of constitutional standing in this ease, is to determine whether § 1132(a)(2) assigns to plan participants the right to prosecute on a plan’s behalf, or whether it might also give them the right to prosecute a claim on their own behalf. For if McCullough is merely suing on his own behalf, he still must show he suffered a concrete injury in order to establish his standing, and the lessons taught in Sprint and Vermont Agency would have no bearing.
The Supreme Court has already answered the question whether McCullough can sue on his own behalf under § 1132(a)(2) — actions authorized under § 1132(a)(2) to recover for violations of § 1109 must “inure[ ] to the benefit of the plan as a whole” and cannot inure to the benefit of individual plan participants. Russell, 473 U.S. at 141, 105 S.Ct. 3085; see also Conley v. Pitney Bowes, 176 F.3d *10911044, 1047 (8th Cir.1999) (indicating “ § 1109(a) provides relief only to a plan and not to individual beneficiaries”); Wald v. Southwestern Bell Corp. Customcare Med. Plan, 83 F.3d 1002, 1006 (8th Cir.1996) (following Russell and holding that an individual plan participant could not sue on his own behalf under § 1132(a)(2)). Thus, the only right granted to plan participants and beneficiaries under § 1132(a)(2) is the right to prosecute a claim on a plan’s behalf.
Harley distinguished Vermont Agency on the grounds that “the qui tarn statute partially assigned the government’s claim to the private qui tarn relator; here, on the other hand, § 1132(a)(2) contains no such assignment.” Harley, 284 F.3d at 907. We can presume Harley was consistent with the Supreme Court’s decision in Russell, which clearly recognized § 1132(a)(2) does not assign the right to recover for a plan’s injury to plan participants, but does give them the right to prosecute the plan’s claim. Thus, the “assignment” Harley referred to in distinguishing Vermont Agency was the assignment of the right to recover, not the right to prosecute. Sprint makes clear the “assignment” which mattered in Vermont Agency was the assignment of the right to prosecute, not the right to recover. Sprint tells us, therefore, that Harley distinguished Vermont Agency upon an incorrect premise. What mattered in Vermont Agency, and thus what matters here, is § 1132(a)(2) statutorily assigns the right to prosecute the plan’s claim to plan participants and beneficiaries: the fact § 1132(a)(2) contains no assignment of the right to recover is irrelevant.
Because Harley would compel a result opposite the one we reach when applying Sprint and Vermont Agency, the Supreme Court’s decisions necessarily cast doubt on Harley. Under Sprint and Vermont Agency, McCullough’s Article III standing to sue under § 1132(a)(2) turns not on whether he suffered an injury, but on whether the Plan suffered a concrete injury which can be redressed through this lawsuit.
I respectfully dissent.

. The False Claims Act provides in relevant part: "A person may bring a civil action for a violation of section 3729 [of the False Claims Act] for the person and for the United States Government. The action shall be brought in the name of the Government.” 31 U.S.C. § 3730(b)(1).

. The assignment of,the right to prosecute was "partial” in Vermont Agency because both the relator and the government have the right to prosecute a claim for a violation of § 3729. See 31 U.S.C. § 3730(a) & (b).