Court Opinion

ID: 76476
Source: CourtListenerOpinion
Date Created: 2010-04-27 00:02:09+00
Date Added: 2024-06-11T17:18:37.448245
License: Public Domain

NOT PRECEDENTIAL

             UNITED STATES COURT OF APPEALS
                  FOR THE THIRD CIRCUIT

                     No. 09-1142 & 09-2191
                         ____________

                  SECRETARY OF LABOR,
          UNITED STATES DEPARTMENT OF LABOR

                               v.

                  JOHN J. KORESKO, V., et al.,
                                       Appellant in 09-1142
                    _____________________

                  SECRETARY OF LABOR,
          UNITED STATES DEPARTMENT OF LABOR

                               v.

                  JOHN J. KORESKO, V., et al.,
                                       Appellant in 09-2191

                         ____________

   APPEALS FROM THE UNITED STATES DISTRICT COURT
     FOR THE EASTERN DISTRICT OF PENNSYLVANIA
        (D.C. Civ. Nos. 04-mc-0074 and 06-mc-0192 )
        District Judge: Honorable Mary A. McLaughlin
                        ____________

            Submitted Under Third Circuit L.A.R. 34.1(a)
                         February 22, 2010
Before: SCIRICA, Chief Judge, CHAGARES and WEIS, Circuit Judges.
                      (Filed: April 26, 2010)
                          ____________

                               1
                                         OPINION

WEIS, Circuit Judge.

              John J. Koresko is the president of both the Koresko Law Firm and Penn-

Mont, a Pennsylvania corporation that administers a death benefit plan and markets it to

businesses. Although Koresko’s death benefit operation has undergone several name

changes since its inception, it always employs an archetypic death benefit plan (“the

Plan”), a corresponding trust, and an unincorporated association of employers.

              To participate in the Plan, an employer must join the unincorporated

association, pay dues, and execute an adoption agreement. The latter allows employers to

set the type and amount of benefits offered to participating employees, who can name

their own beneficiaries. Employers make contributions by sending checks to Penn-Mont,

which deposits them in a trust. The trust, in turn, purchases policies on the life of

participating employees. When a participant dies, his or her beneficiary submits a claim,

which Penn-Mont resolves.

              In 2003, the Secretary of Labor began investigating possible ERISA

violations and the following year issued subpoenas to Koresko and his associated entities

(“Koresko” or “the Koresko parties”). Koresko contended the subpoenas were invalid for

a variety of reasons. The District Court disagreed, granted the Secretary’s petition to

enforce them, and found Koresko in contempt. We affirmed. Chao v. Koresko, Nos. 04-

                                              2
3614, 05-1440, 05-1946, 05-2673, 2005 WL 2521886 (3d Cir. Oct. 12, 2005) (“Koresko

I”). In a separate, but related matter, we held that, because of statutory privacy

restrictions imposed upon financial institutions, the bank as trustee was not subject to the

subpoenas absent a showing by the Secretary that jurisdiction had been established. Chao

v. Cmty. Trust Co., 474 F.3d 75, 87-88 (3d Cir. 2007).

              The Secretary issued new subpoenas to the Koresko parties in 2006, based

upon changes made to their operations in 2004 and 2005 and her belief that Koresko had

not completely complied with the 2004 subpoenas. Koresko challenged these subpoenas

as well. On December 9, 2008, the District Court ordered enforcement for five of six

categories of documents requested by the Secretary, including: materials requested, but

not produced, in the 2004 subpoenas involving a Koresko Law Firm bank account and

bank statements and transactional documents relating to death benefit accounts;

information regarding employers who participated in the Plan after the 2004 and 2005

changes; “documents concerning bank accounts and the monthly trustee reports” of the

trust used after the 2004 and 2005 modifications; an “electronic database containing death

benefit account information[;]” and material relating to the current Plan. Koresko

appealed that order at Docket 09-1142, and the District Court stayed the subpoena

enforcement proceedings pending the appeal’s outcome.

              In March 2009, the Secretary filed a civil suit against the Koresko parties

alleging ERISA violations. That matter was assigned to a different district judge and is

                                              3
currently on appeal before this panel at Docket 09-2192.

              Koresko asked the District Court assigned to the subpoena enforcement

matter to hold the Secretary in contempt for initiating the ERISA action while the stay of

the enforcement proceedings was still in effect. The District Court denied Koresko’s

request in April 2009, and Koresko appealed at Docket 09-2191.

              We have consolidated and now address the appeals at Docket 09-1142

(involving the enforcement order) and Docket 09-2191 (concerning the denial of

contempt).1 Despite the consolidation, the Koresko parties’ principal brief only argues

against the subpoenas’ enforcement. We have already upheld the legality of the 2004

subpoenas and reject arguments to reopen that matter.

              Koresko’s contentions with respect to the 2006 subpoenas substantially

repeat those we considered and rejected in Koresko I. We have reviewed the various

other claims of error raised by Koresko and find them to lack merit. We are thus

persuaded that the District Court properly exercised its discretion in granting enforcement

of the 2006 subpoenas. See FDIC v. Wentz, 55 F.3d 905, 908 (3d Cir. 1995) (“we will

affirm an order enforcing an agency’s subpoena unless we conclude that the district court

has abused its discretion”).

              Accordingly, the Orders of the District Court will be affirmed. We

respectfully suggest that all of the Koresko litigation be assigned to one district judge.

              1
                  We address the appeal at Docket 09-2192 in a separate Opinion.

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