Court Opinion

ID: 6961732
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:46:46.435772+00
Date Added: 2024-06-11T16:08:27.070611
License: Public Domain

KRUPANSKY, Circuit Judge,
dissenting.
A novel dispute in this circuit has arisen from the facts alleged in the plaintiffs’ complaint. Cases of first impression invariably present difficult matters for courts because the prevailing notions of guidance upon which they must rely are absent. See Kroger Co. v. NLRB, 647 F.2d 634, 639 n. 6 (6th Cir.1980). In this instance, I am prompted to dissent because I believe that by unduly deferring to the legal conclusions of the district court, and failing to read the complaint in the light most favorable to the plaintiffs, the majority has reached an erroneous conclusion that erodes the rights which the Employee Retirement Income Security Act was enacted to protect.
It should initially be noted that this appellate review confronts the proper disposition of a defendant’s motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6) and (e). A complaint will survive such a motion as long as it “ ‘ “contain[s] either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.” ’ ” Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir.1988) (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir.1984), cert. denied, 470 U.S. 1054, 105 S.Ct. 1758, 84 L.Ed.2d 821 (1985)) (emphasis in original). “[S]urvival of an action after a Fed.R.Civ.P. 12(b)(6) [or (c) ] motion to dismiss ... has a lesser evi-dentiary and legal burden on a defendant than a summary judgment motion....” Runfola & Assocs., Inc., v. Spectrum Reporting II, Inc., 88 F.3d 368, 374 (6th Cir.1996) (per curiam). “[A]ll of the allegations contained in the plaintiffs complaint are accepted as true, and the complaint is construed liberally in favor of the party opposing the motion.” Miller v. Currie, 50 F.3d 373, 377 (6th Cir.1995). The district court’s consideration of these matters is not entitled to any deference; this court must review the complaint anew. Taxpayers United for Assessment Cuts v. Austin, 994 F.2d 291, 296 (6th cir.1993). The relevant query becomes whether the facts alleged in the complaint, when read in the best possible light, state a claim cognizable in federal court. See Miller, 50 F.3d at 377. A comprehensive discussion of the salient facts regarded in this manner follows.
In 1985, North American Rayon Corporation (“NAR”) was a closely held corporation engaged in the manufacture of rayon at its Elizabethton, Tennessee facility. It employed hourly workers affiliated with United Textile Workers of America (“UTWA”), and its subordinate local union chapters, which had procured a valid collective bargaining agreement (“CBA”) between NAR and its laborers. Because that year presented severe economic circumstances, NAR twice requested UTWA to make significant modifications in the CBA. Membership votes denied concessions on both occasions. J.A. at 16-17.
*427In late March, NAR advised UTWA that unless the modifications it requested were effectuated, the company would be constrained to close its doors and cease manufacturing rayon by the second week of June. After consideration, on March 31, 1985, UTWA imposed a trusteeship over Local Union No. 2207, and executed a CBA resulting in the loss of a $0.28 hourly wage increase that would have taken effect the next day, seven paid holidays, and ten percent of the contemporary wage rate. Local Union No. 2614 was not subject to this trust. . At the time, UTWA advised members of Local Union Nos. 2207 and 2614, who had voluntarily agreed to these concessions, that it would work with NAR to “negotiate a contract and an employee ownership agreement which would render the sacrifice made by the membership of both Locals, in the short term, beneficial in the long term.” J.A. at 17.
During the trusteeship, which .lasted exactly one year, UTWA and NAR agreed to create an Employee Stock Ownership Plan (“ESOP”). An ESOP is “a tax-qualified employee benefit plan designed to enable employees to acquire stock ownership interests in their employers.” Note, The Employee As Investor: The Case for Universal Application of the Federal Securities Laws to Employee Stock Ownership Plans, 34 Wm. & Mary L.Rev. 189, 208 (1992). NAR consulted Kelso & Company in the formation of its ESOP. See J.A. at 40.
The plan adopted by NAR provided that eighty-five percent of its stock would be held in trust for both hourly and salaried NAR employees. The remaining fifteen percent of the stock would be given to NAR management to induce them to continue their association with the troubled company, and as a “bonus” for their participation with NAR during its economic adversity. J.A. at 17.
While promulgating the ESOP, NAR made both oral and written representations to its employees that “at all times a representative of the UTWA would sit on the Board of Directors of the ESOP Company, thereby insuring hourly employee owners of the company access to financial and other information concerning the status and well being of the company, including all information of the nature and quality usually accessible to a corporate director.” J.A. at 19. The company announced the ESOP in December 1985, and reached a new CBA with UTWA. Local Union No. 2207, placed under trust at that time, did not hold a vote to ratify the new CBA. J.A. at 17.
In 1990, the ESOP Administrative Committee included Karl Grindstaff (“Grind-staff’), Charles Green (“Green”), and Anthony Butts (“Butts”). Grindstaff also served as a union officer. Green and Butts were members of NAR’s Board of Directors: Green was the President of the company, and Butts was his vice-president. During that year, a majority of NAR’s five-member Board, including Green and Butts, worked with the ESOP Administrative Committee and “voted to restructure the corporate entity and create a ‘holding company’” known as North American Corporation (“NAC”). This new organization was designed for governance by a three-person Board of Directors. J.A. at 19. Green and Butts exerted their substantial influence to direct the ESOP Trustee, First American National Bank (“First American”), to elect both of them and John Anderson — at that time also a Director of NAR — as NAC’s initial Directors. J.A. at 20. This had the effect of endowing Green, Butts, and John Anderson with exclusive control over the ESOP because “the corporation ... designating membership on the ESOP Administrative Committee [wa]s no longer [NAR], but [NAC].” J.A. at 20.
Later that year, the NAC Board of Directors expanded to include five members, but it is unclear from the complaint how the ESOP Administrative Committee directed First American to vote the NAC shares held in trust for the employees. J.A. at 20. It is not clear who it elected to the expanded Board of Directors at that time. Regardless, in February 1991, more than 860 employee owners of NAC executed a document that requested the NAC Directors to amend the ESOP “to provide that each participant instruct the ESOP Administrative Committee as to the manner in which shares of company stock ... be voted,” or to hold a Special Meeting of the stockholders for the purpose of adopting such an amendment. J.A at 21.
*428In order to compel one of these methods to endorse “pass through voting,” some of the employee owners filed an action in federal district court. J.A. at 21. As a result of the settlement discussion which ensued, the parties filed a notice of voluntary dismissal pursuant to Fed.R.Civ.P. 41(a)(1)(ii).
The settlement agreement achieved provided that the majority of NAC’s Board of Directors “should come from ‘outside the corporation.’” J.A. at 22. Green and Butts remained on the Board- The three “outsiders” appointed included William E. Anderson, Esq. (“Anderson”), the replacement for and son of John Anderson. Anderson had served as NAR’s chief Labor Relations Negotiator and Counsel to both NAR and NAC. David Henry (“Henry”), “an old business friend and colleague” of Green also joined the NAC Board. The employees of NAR were permitted to elect the final member of NAC’s Board, but Corporate Bylaws limited their representative’s tenure to two consecutive one-year terms, after which time another candidate would have to replace the original. Raymond Broyles served in this capacity at the time Plaintiffs filed the instant complaint. J.A. at 22.
It is not clear what happened during the next three years. All the court can glean from the complaint is that on September 29, 1994, NAR and UTWA attempted to join in a new CBA. J.A. at 22.
UTWA offered to take back to its membership in a “positive manner” each and every contract modification advanced by NAR[ ] for the new collective bargaining agreements on the condition the ESOP Trust Agreement and the Charter of [NAC] be amended to provide for pass-through voting rights for all employee owners of NAC, and to allow the employee owners to vote their stock in NAC____ [After considering this offer] Anderson announced all five (5) directors opposed the offer to settle the contract on the condition employee owners were given pass-through voting rights.
J.A. at 22-23.1 Frustrated by this rejection, the management’s entrenchment in NAC’s Board of Directors in apparent contravention of its representations in 1985 and the 1991 settlement agreement, and a 300 percent increase in Green’s salary since 1985 despite any increase in real hourly wages for the workers during the same period, the local unions engaged in a strike through October and November. See J.A. at 22-23.
The end of the strike did not produce a CBA, and did not heal the wounds it had opened. “The strike resulted in the loss of jobs of many employee owners, and the expenditure of thousands of NAC dollars____” J.A. at 24. NAC built a fence around the manufacturing structure, provided twenty-four hour body guards for Green, Butts, Green’s wife, their property, and hired the services of “attack dogs.” J.A. at 24.
As a result of these and other developments,2 Grindstaff, both individually and as a member of the NAR/NAC ESOP Administrative Committee, joined a group of employee owners of NAR/NAC serving as class representatives, and the UTWA, ARL-CIP, CLC and its subordinate unincorporated labor organizations (collectively “Plaintiffs”), to file a complaint in federal court. Plaintiffs’ complaint related the facts discussed above, named Green, Butts, Henry, Anderson, and the corporate entities as Defendants, and alleged that Defendants had rejected the union’s proposal for pass-through voting because they were fearful that certain relationships between the company and them “would be severed if NAR[ ] employees were allowed to vote their NAC stock and elect Directors of their choosing.” J.A. at 23. Specifically, certain contracts and lease agreements that had been secured by the Directors and that *429governed relationships between NAC, NAR and other companies owned in whole or in part by the Directors would be threatened. J.A. at 24. On the basis of these allegations and the facts recited above, Plaintiffs sought redress through seven counts pursuant to the Employee Retirement Income Security Act (“ERISA”), codified at 29 U.S.C. §§ 1001 et seq. Plaintiffs also included a supplemental state law claim as an eighth count in their complaint.
Upon motion, the district court dismissed all counts purportedly anchored to ERISA pursuant to Fed.R.Civ.P. 12(b)(6) and (c), for their failure to state a claim upon which relief could be granted. The court also sua sponte dismissed Plaintiffs’ supplemental state law claim pursuant to 28 U.S.C. § 1367(c)(3). Grindstaff v. Green, 946 F.Supp. 540 (E.D.Tenn.1996). Plaintiffs then filed a timely notice of appeal.
The issues joined before this court include:
(1) Whether the district court erroneously concluded that the fiduciary provisions of ERISA did not extend to the voting of corporate shares held by an ESOP because the exercise of that power was not an “asset” within the meaning of that statute; and
(2) Whether the district court improperly made factual determinations and inferences unfavorable to Plaintiffs.
The Supreme Court has described ERISA as a “comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983). To prevent employer raids of employee pension plans at the expense of worker security during retirement, Congress enacted ERISA to “establish[] standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and____ provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts.” 29 U.S.C. § 1001(b).
Although ERISA permits officers, agents, and other employer representatives to serve as fiduciaries of employee benefit plans, 29 U.S.C. § 1108(e)(3), as the majority has correctly observed, many provisions “specifically insulate the trust from the employer’s interest.” NLRB v. Amax Coal Co., 453 U.S. 322, 333, 101 S.Ct. 2789, 2796, 69 L.Ed.2d 672 (1981). For example, ERISA restricts asset distribution in all instances save plan termination, so that the assets “never inure to the benefit of any employer.” 29 U.S.C. § 1103(c)(1). The statute directs that the trust “be held for the exclusive purposes of providing benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of administering the plan.” Id. It also ordains that the fiduciary chosen to monitor the plan must “discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries.” 29 U.S.C. § 1104(a)(1).
Plaintiffs have asserted that the management entrenchment at NAC, which resulted in NAR’s labor unrest, violated ERISA. They base this charge on the proposition that a fiduciary’s power to direct a trustee to vote an ESOP’s shares constitutes the management of an ESOP asset.
An ERISA fiduciary is responsible for “exercising] any discretionary authority or discretionary control respecting management of [a] plan or exercising] any authority or control respecting management or disposition of its assets.” 29 U.S.C. § 1002(21)(A)(i). Thus, the imprudent or disloyal exercise of the voting power, if it is characterized as the management of an asset, violates the statute. See, e.g., 29 U.S.C. § 1106(b). Although no forum in this circuit had considered this matter until the district court’s adjudication of the instant case, Grindstaff, 946 F.Supp. at 547-51, two district courts outside this circuit had done so. See Newton v. Van Otterloo, 756 F.Supp. 1121, 1127-28 (N.D.Ind.1991); O’Neill v. Davis, 721 F.Supp. 1013, 1014-16 (N.D.Ill.1989).
In O’Neill, the district court denied a 12(b)(6) motion in response to a plaintiff’s allegation that the trustees of an ESOP had “voted the pension plan shares of company stock to reconstitute the Board of Directors and to consolidate their control of the Company in violation of ERISA.” O’Neill, 721 F.Supp. at 1014. The plaintiff had served as the chief operating officer of a company pur*430chased mainly by debt financing. After the leveraged buy-out, the plaintiff became the company’s chief executive officer, a director, and executed a new employment contract. “Plaintiffs employment contract provided that he could be fired with or without cause by a unanimous vote of the directors other than himself. However, if he were fired without cause, the Company was liable for severance benefits.” Id. Unbeknownst to the plaintiff, the other directors surreptitiously convened, voted shares controlled by the ESOP, and stripped plaintiff of his status as a director. They proceeded to terminate his employment without cause, but avoided the pension obligation due to the unanimity of the newly elected board. Id.
After reviewing 29 U.S.C. § 1002(21)(A)(i), quoted above, the court explained that “the use of the disjunctive ‘or’ to connect the terms ‘management’ and ‘disposition’ makes plain [that] disposition of Plan assets is not necessary ... for the fiduciary duty to arise.” Id. at 1015. Moreover, the court observed that although “a ‘trustee has discretion whether and how to vote,’ he must ‘use proper care to promote the interest of the beneficiary.’ ” Id. (quoting Restatement (Second) of Trusts § 1993, comment a (1959)). On the basis of these basic legal axioms, the court concluded that “the voting of Plan-owned shares by the Plan’s trustees was a fiduciary act under ERISA, and one which the trustees were bound to exercise in the sole interests of the Plan participants.” Id. The defendants’ motion for dismissal challenged the plaintiffs complaint for its purported failure to allege an injury to his interest in the ESOP, and argued that voting plan shares does not implicate any fiduciary duties. Id. Nevertheless, the court explained that any action “alleging breach of the duty to act solely for the interests of the [ESOP] participants, falls within the purview of [29 U.S.C. § 1132(a) ],” id. at 1016, which provides that “a civil action may be brought ... to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or ... to obtain other appropriate equitable relief.” 29 U.S.C. § 1132(a); see 29 U.S.C. § 1104(a).
Van Otterloo similarly confronted a complaint in which the plaintiffs “contended that the trustees of an employee stock ownership trust had voted the trust’s shares of company stock to reconstitute the company’s board of directors and to consolidate their control of the company.” Van Otterloo, 756 F.Supp. at 1128. The plaintiffs were four past and present employees of a company, dissatisfied with the alleged management entrenchment on the ESOP committee, and that committee’s subsequent decision not to solicit proxies from all plan members. The defendants flatly denied any wrongdoing and accused the plaintiffs of pursuing “a labor-management dispute wearing ERISA clothing.” Id. at 1124. On motion for summary judgment pursuant to Fed.R.Civ.P. 56, the district court resolved that mere management entrenchment was insufficient to proffer an ERISA violation as a matter of law. “Congress recognized that ERISA plans may be well-served by persons with intimate knowledge of other parties in interest.” Id. at 1128 (citing 29 U.S.C. § 1108(e)(3)). Nevertheless, the court explained that “[a]s appointees of the management slate that was the subject of the shareholder vote, the Committee defendants had, at best, divided loyalties with respect to decisions on how to vote the ESOP’s shares.” Id. Noting this potential conflict, the court repeated the decree of Leigh v. Engle, 727 F.2d 113 (7th Cir.1984):
Where it might be possible to question the fiduciaries’ loyalty, they are obliged at a minimum to engage in an intensive and scrupulous independent investigation of their options to insure that they act in the best interests of the plan beneficiaries.
Van Otterloo, 756 F.Supp. at 1128 (quoting Leigh, 727 F.2d at 125-26). The court therefore denied summary judgment on that basis.
After the district court in the case at bar had performed its own review of the guidance offered by these helpful opinions, it declined to “adopt[ ] or reject[ ]” their analysis. Grindstaff, 946 F.Supp. at 550. Instead, the court criticized the decisions by charging that “[w]ithout rigorous analysis, each court presupposed the voting of an ESOP Plan’s shares to be a plan asset, without establishing exactly how or why that is *431so, and based the subsequent analysis upon that presupposition.” Id. at 551. The panel majority has expressed agreement with this conclusion. Slip op. at 422. The panel majority has also approved of the district court’s observation that
The clear weight of the case authority indicates ERISA focuses on a fiduciary’s duties regarding the investment of plan assets. See Kuper [v. Iovenko], 66 F.3d [1447,] 1457-60 [ (6th Cir.1995) ] (analyzing the policies of diversification or liquidation of plan assets and the standard of review); Moench [v. Robertson], 62 F.3d [553,] 568-72 [ (3d Cir.1995) ] (analyzing the policies of diversification of plan assets and the standard of review)[, cert. denied, 516 U.S. 1115, 116 S.Ct. 917, 133 L.Ed.2d 847 (1996)]; Maniace [v. Commerce Bank of Kansas City], 40 F.3d [264,] 267-69 [ (8th Cir.1994) ] (analyzing the role of a directed trustee and not finding a requirement of “weighting] the merits of an investment”)[, cert. denied, 514 U.S. 1111, 115 S.Ct. 1964, 131 L.Ed.2d 854 (1995) ]; Ershick v. United Missouri Bank, 948 F.2d 660, 666-67 (10th Cir.1991) (analyzing the role of a directed trustee and not finding a requirement of weighing the merits of an investment); Leigh v. Engle, 727 F.2d 113, 124-36 (7th Cir.1984) (analyzing the repercussions of a fiduciary’s investments). The investment of an asset implies the asset must have some sort of inherent value, be capable of the assignment of value, or otherwise be subject to market forces.
Id. at 549; see slip op. at 423.
Although the majority has properly credited the district court for noting that precedent regarding ERISA cases “focuses on a fiduciary’s duties regarding the investment of plan assets,” and that “asset [s] must have some sort of inherent value, be capable of the assignment of value, or otherwise be subject to market forces,” Grindstaff, 946 F.Supp. at 549 (emphasis added), neither statement diminishes the verity of the O’Neill court’s recognition that “the use of the disjunctive ‘or’ to connect the terms ‘management’ and ‘disposition’ [in 29 U.S.C. § 1002(21)(A)(i) ] makes plain [that] disposition of Plan assets is not necessary ... for the fiduciary duty to arise.” O’Neill, 721 F.Supp. at 1015.3 Consequently, the district court’s conclusion, which the panel majority has embraced, slip op. at 423, is misconceived.
Most complaints alleging a violation of fiduciary duties may well confront disputes over the propriety of certain investments of plan funds; but that does not foreclose a plaintiffs relief where he only asserts that a plan fiduciary has improperly managed a plan’s assets. Cf. Mattei v. Mattei, 126 F.3d 794, 798, 804 (6th Cir.1997) (observing that although “the prohibitions [in section 1140] were aimed primarily at preventing unscrupulous employers from discharging or harassing their employees in order to keep them from obtaining vested pension rights,” the statute “reaches further than the employment relationship”) (quoting West v. Butler, 621 F.2d 240, 245 (6th Cir.1980)). The controlling statute in this instance clearly states that fiduciaries are responsible for “exercising] any discretionary authority or discretionary control respecting management of [a] plan or exercis[ing] any authority or control respecting management or disposition of its assets.” 29 U.S.C. § 1002(21)(A)(i) (emphases added).
For that matter, the district court’s attack on the conclusion that the power to vote may be considered an asset within ERISA itself fails the test for “rigorous analysis,” by merely repeating its incomprehension, Grindstaff, 946 F.Supp. at 549, 551, rather than attempting to resolve the matter one way or the other, id. at 550 (declining to adopt or reject the analysis). The majority’s charge that O’Neill and Van Otterloo lack “any clear analysis” simply parrots this conclusion rather than elucidating a rationale for it. Admittedly, “ERISA does not expressly define the term ‘assets of the plan,’ ” Acosta *432v. Pacific Enters., 950 F.2d 611, 620 (9th Cir.1991), and most of the circuit courts have yet to do so, providing little guidance to either this or the district court. Nevertheless, in their review of O’Neill and Van Otterloo, both the panel majority and the district court could have examined what the Ninth Circuit has said.
It is clear ... that “assets of the plan” is not defined in strictly financial terms, but rather is determined by examining whether the “item in question may be used to the benefit (financial or otherwise) of the fiduciary at the expense of plan participants or beneficiaries.” In Acosta, the alleged “asset of the plan” was a participant-shareholder list. In Acosta, however, we did not reach the question of whether or not this list was a plan asset; rather we affirmed [a summary judgment for defendant trustees] on the ground that the fiduciaries’ use of the list did not constitute self-dealing.[4]
Kayes v. Pacific Lumber Co., 51 F.3d 1449, 1467 (9th Cir.) (citations omitted & footnote in original), cert. denied, - U.S. -, 116 S.Ct. 301, 133 L.Ed.2d 206 (1995).
Noting that “Congress’ overriding concern [in passing ERISA was] with the protection of plan participants and beneficiaries,” the Ninth Circuit adopted a “functional test” to ascertain whether a good constitutes a plan asset. Id. at 1467. First, the court should consider whether the object “may be used to the benefit (financial or otherwise) of the fiduciary.” Id. Second, the court should determine whether the use “is at the expense of the plan participants or beneficiaries.” Id.
This broad analysis of the term “asset” in ERISA comports with the general practice of the courts of appeals in their construction of the protective provisions of the statute. See, e.g. Mattel, 126 F.3d at 804 (“[W]e believe that the words describing prohibited conduct partake of a collective meaning that is broader than might be found in the dictionary definition of any one of them.”); Lowen v. Tower Asset Management, Inc., 829 F.2d 1209, 1213 (2d Cir.1987) (“[Protection of beneficiaries and notice to fiduciaries requires that [29 U.S.C. § 1106(b) ] be broadly construed. . -..”), Leigh, 727 F.2d at 126 (“[T]he protective provisions of section [29 U.S.C. § 1106](a)(1)(D) and (b)(1) should be read broadly — ”).
Congress intended for the fiduciary principles of ERISA to codify much of the common law of trusts. See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 110, 109 S.Ct. 948, 954, 103 L.Ed.2d 80 (1989). According to that source of law “[i]t is the duty of the trustee in voting shares of stock to use proper care to promote the interest of the beneficiary.” Restatement (Second) of Trusts § 193, comment a (1959). Consequently, a legitimate broad construction of the term “asset” includes the power to “cast[ ] a vote.” Id. Only by so reading the statute can the courts enforce congressional intent to protect ESOP participants and beneficiaries from imprudent and disloyal voting decisions made by the fiduciaries of their plans. Cf. Simpson v. Ernst & Young, 100 F.3d 436, 442-44 (6th Cir.1996) (applying the common law of agency and the “economic realities” test to prevent a small group of managers from depriving an individual stripped of any management authority, but denominated as a partner, from receiving his pension), cert. denied, — U.S. -, 117 S.Ct. 1862, 137 L.Ed.2d 1062 (1997).
Moreover, because the United States Department of Labor supports the proposition that voting rights are an asset of an ESOP, thereby creating a fiduciary duty in the way one votes plan shares, see generally Amicus Br. U.S. Dep’t of Labor, this court has one more reason to reach the conclusion urged by Plaintiffs. After all, in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the Supreme Court explained that “considerable weight should be accorded to an executive department’s construction of a statutory scheme it is entrusted to adminis*433ter.” Id. at 844, 104 S.Ct. at 2782. Unfortunately, the majority’s rejection of the Department of Labor’s opinion, slip op. at 17, ignores this call for deference without explanation.
As previously stated, the district court in the instant case declined to adopt or reject the analysis used in O’Neill, Van Otterloo, and that proposed above. See Grindstaff, 946 F.Supp. at 550. It explained that the underlying legal issue discussed in those cases and the foregoing analysis was irrelevant because Plaintiffs had failed to allege “an abuse or breach of fiduciary duties.” Id. at 551. Specifically, the court properly observed that 29 U.S.C. § 1108(c)(3) permits officers, agents, and other employer representatives to serve as fiduciaries of employee benefit plans, id., and that the mere fact that a fiduciary “wear[s] two hats” does not create a per se violation of ERISA. Id. at 549 (quoting Kuper, 66 F.3d at 1458). Because both O’Neill and Van Otterloo concerned something more than management entrenchment — something the district court generally named “entrenchment plus,” id. at 550 — the district court’s decision not to answer the statutory construction question made sense given its failure to find an allegation of fiduciary breach. Viewed from that vantage, the conclusion announced by both the district court and the majority appears correct. This manifestation is a deception.
Contrary to the majority’s narrow reading of the complaint (which again mirrors that of the district court), the document clearly avers that the individual Defendants used their voting power to perpetuate contractual and lease agreements between NAC, NAR, and other businesses the individual Directors owned. J.A. at 23-24. By voting the ESOP’s shares to entrench themselves and achieve this self-interested goal despite the foreseeable result (or risk) of labor unrest and other consequences that might diminish the value of NAR stock, the complaint alleges that Defendants acted at the expense of plan participants. This constitutes the “plus” element. As the Seventh Circuit has explained, “Where it might be possible to question the fiduciaries’ loyalty, they are obliged at a minimum to engage in an intensive and scrupulous independent investigation of their options to insure that they act in the best interests of the plan beneficiaries.” Leigh, 727 F.2d at 125-26. Because Defendants did not do even that, their actions as alleged in Plaintiffs’ complaint stated a cause of action pursuant to ERISA and should not have been dismissed.
Ultimately, Defendants may be correct in their assertion that the election for NAC Directors was nothing other than a normal “course of affairs” election, and that “this is actually a labor dispute, thinly veiled as an ERISA claim.” If so, they can prevail by using the appropriate tools provided in the Federal Rules of Civil Procedure, such as rule 56 (summary judgment) and 50 (directed verdict). Their chosen tool before the district court, however, was rule 12(b)(6), and that has required this court to take all allegations by Plaintiffs as true. Cf. Bracy v. Gramley, — U.S. -, -, 117 S.Ct. 1793, 1799, 138 L.Ed.2d 97 (1997) (“It may well be ... that petitioner will be unable to obtain evidence sufficient to support a finding of actual judicial bias in the trial of his case, but we hold that he has made a sufficient showing ... to establish “good cause” for discovery.”) (habeas case).

. Plaintiffs’ appellate brief has explained that the fifth Director of NAC, Raymond Broyles, resigned after Anderson had expressed that all five Directors had rejected the UTWA proposal. Appellant's Br. at 17 n. 3. The complaint is silent on this matter.

. In October 1994, UTWA requested certain corporate information from NAC, purportedly relying upon a Tennessee statute for authority. After being denied access to this material, Plaintiffs included one count of the violation of this statute in their complaint. The district court declined to address the merits of this matter, exercising discretion to dismiss it under the impression that the court had no original jurisdiction over the federal causes of action. Plaintiffs have not raised this matter in their appeal.

. Moreover, the district court's broad definition of the word "asset” actually supports the reading in O’Neill and Van Otterloo. Indeed, everything either has "some sort of inherent value, [is] capable of the assignment of value, or otherwise [is] subject to market forces.” Id. at 549. According to neoclassical economics, scarcity always creates the capacity for a market value, and within the physical universe it is commonly accepted that all goods have a limited quantity. See infra text accompanying note 4.

. The only other case addressing the meaning of "assets of the plan” under [29 U.S.C. § 1106] is an Eleventh Circuit case which held that an employer’s contingent and non-vested future retirement liabilities under a plan were not assets of the plan, and so could be used in the employer's own interest. Phillips v. Amoco Oil Co., 799 F.2d 1464, 1471 (11th Cir.1986), cert. denied, 481 U.S. 1016, 107 S.Ct. 1893, 95 L.Ed.2d 500 (1987)....