Court Opinion

ID: 2806289
Source: CourtListenerOpinion
Date Created: 2015-06-08 19:01:05.120111+00
Date Added: 2024-06-11T12:07:00.284686
License: Public Domain

PUBLISHED

               UNITED STATES COURT OF APPEALS
                   FOR THE FOURTH CIRCUIT

                        No. 14-1011

WILLIAM L. PENDER; DAVID L. MCCORKLE,

               Plaintiffs – Appellants,

     and

ANITA POTHIER; KATHY L. JIMENEZ; MARIELA ARIAS; RONALD R.
WRIGHT; JAMES C. FABER, JR., On behalf of themselves and on
behalf of all others similarly situated,

               Plaintiffs,

     v.

BANK OF AMERICA CORPORATION; BANK OF AMERICA, NA; BANK OF
AMERICAN PENSION PLAN; BANK OF AMERICA 401(K) PLAN; BANK OF
AMERICA CORPORATION CORPORATE BENEFITS COMMITTEE; BANK OF
AMERICA TRANSFERRED SAVINGS ACCOUNT PLAN,

               Defendants – Appellees,

     and

UNKNOWN PARTY, John and Jane Does #1-50, Former Directors
of NationsBank Corporation and Current and Former Directors
of Bank of America Corporation & John & Jane Does #51-100,
Current/Former Members of the Bank of America Corporation
Corporate Benefit; CHARLES K. GIFFORD; JAMES H. HANCE, JR.;
KENNETH D. LEWIS; CHARLES W. COKER; PAUL FULTON; DONALD E.
GUINN; WILLIAM BARNETT, III; JOHN T. COLLINS; GARY L.
COUNTRYMAN; WALTER E. MASSEY; THOMAS J. MAY; C. STEVEN
MCMILLAN; EUGENE M. MCQUADE; PATRICIA E. MITCHELL; EDWARD
L. ROMERO; THOMAS M. RYAN; O. TEMPLE SLOAN, JR.; MEREDITH
R. SPANGLER; HUGH L. MCCOLL; ALAN T. DICKSON; FRANK DOWD,
IV; KATHLEEN F. FELDSTEIN; C. RAY HOLMAN; W. W. JOHNSON;
RONALD TOWNSEND; SOLOMON D. TRUJILLO; VIRGIL R. WILLIAMS;
CHARLES E. RICE; RAY C. ANDERSON; RITA BORNSTEIN; B. A.
BRIDGEWATER, JR.; THOMAS E. CAPPS; ALVIN R. CARPENTER;
DAVID COULTER; THOMAS G. COUSINS; ANDREW G. CRAIG; RUSSELL
W. MEYER-, JR.; RICHARD B. PRIORY; JOHN C. SLANE; ALBERT E.
SUTER; JOHN A. WILLIAMS; JOHN R. BELK; TIM F. CRULL;
RICHARD M. ROSENBERG; PETER V. UEBERROTH; SHIRLEY YOUNG; J.
STEELE ALPHIN; AMY WOODS BRINKLEY; EDWARD J. BROWN, III;
CHARLES J. COOLEY; ALVARO G. DE MOLINA; RICHARD M.
DEMARTINI; BARBARA J. DESOER; LIAM E. MCGEE; MICHAEL E.
O'NEILL; OWEN G. SHELL, JR.; A. MICHAEL SPENCE; R. EUGENE
TAYLOR; F. WILLIAM VANDIVER, JR.; JACKIE M. WARD; BRADFORD
H. WARNER; PRICEWATERHOUSE COOPERS, LLP,

                Defendants.

Appeal from the United States District Court for the
Western District of North Carolina, at Charlotte.     Graham
C. Mullen, Senior District Judge. (3:05−cv−00238−GCM)

Argued:   January 27, 2015                Decided:   June 8, 2015

Before KEENAN, WYNN, and FLOYD, Circuit Judges.

Reversed in part, vacated in part, and remanded by
published opinion. Judge Wynn wrote the opinion, in which
Judge Keenan and Judge Floyd joined.

ARGUED: Eli Gottesdiener, GOTTESDIENER LAW FIRM, PLLC,
Brooklyn, New York, for Appellants.          Carter Glasgow
Phillips,   SIDLEY  AUSTIN,   LLP,  Washington,   D.C., for
Appellees. ON BRIEF: Thomas D. Garlitz, THOMAS D. GARLITZ,
PLLC, Charlotte, North Carolina, for Appellants. Irving M.
Brenner, MCGUIREWOODS LLP, Charlotte, North Carolina; Anne
E. Rea, Christopher K. Meyer, Chicago, Illinois, Michelle
B. Goodman, David R. Carpenter, SIDLEY AUSTIN LLP, Los
Angeles, California, for Appellees.

                                2
WYNN, Circuit Judge:

      In this Employee Retirement Income Security Act of 1974

(“ERISA”)     case,    an    employer        was    deemed     to     have     wrongly

transferred assets from a pension plan that enjoyed a separate

account feature to a pension plan that lacked one.                        Although the

transfers were voluntary and the employer guaranteed that the

value of the transferred assets would not fall below the pre-

transfer amount, an Internal Revenue Service audit resulted in a

determination that the transfers nonetheless violated the law.

      Plaintiffs, who held such separate accounts and agreed to

the transfers, brought suit under ERISA and sought disgorgement

of,   i.e.,    an   accounting     for    profits        as   to,   any     gains   the

employer    retained   from    the   transaction.             The   district     court

dismissed their case, holding that they lacked statutory and

Article III standing.         For the reasons that follow, we disagree

and hold that Plaintiffs have both statutory and Article III

standing.     Further, we hold that Plaintiffs’ claim is not time-

barred.       Accordingly,    we   reverse         and   remand     the    matter   for

further proceedings.

                                         I.

                                         A.

                                         3
     In       1998,   NationsBank 1    (“the        Bank”)    amended     its   defined-

contribution          plan   (“the     401(k)        Plan”)      to     give    eligible

participants a one-time opportunity to transfer their account

balances to its defined-benefit plan (“the Pension Plan”).                           The

Pension Plan provided that participants who transferred their

account balances would have the same menu of investment options

that they did in the 401(k) Plan.                   Further, the Bank amended the

Pension       Plan    to   provide   the   guarantee         that     participants   who

elected to make the transfer would receive, at a minimum, the

value    of    the    original   balance       of    their    401(k)     Plan   accounts

(“the Transfer Guarantee”).

     The 401(k) Plan participants’ accounts reflected the actual

gains and losses of their investment options.                          In other words,

the money that 401(k) Plan participants directed to be invested

in particular investment options was actually invested in those

investment       options,      and    401(k)        Plan     participants’      accounts

reflected the investment options’ net performance.

     By contrast, Pension Plan participants’ accounts reflected

the hypothetical gains and losses of their investment options.

Although Pension Plan participants selected investment options,

     1
       In September 1998, NationsBank merged with BankAmerica
Corporation.  The resulting entity was named Bank of America
Corporation. Here, “the Bank” collectively refers to the
defendants.

                                           4
this investment was purely notional.                   By design, Pension Plan

participants’ selected investment options had no bearing on how

Pension Plan assets were actually invested.                    Instead, the Bank

invested Pension Plan assets in investments of its choosing, 2

periodically crediting each Pension Plan participant’s account

with    the    greater   of    (1)    the   hypothetical     performance     of   the

participant’s selected investment option, or (2) the Transfer

Guarantee.

       Plaintiffs William Pender and David McCorkle (collectively

with       those   similarly    situated,       “Plaintiffs”)      are   among    the

eligible      participants      who    elected    to    transfer    their   account

balances.          Participants who elected to transfer their 401(k)

Plan balances to the Pension Plan may not have appreciated the

difference between the plans, particularly if they maintained

their      original    investment     options.         But   for   the   Bank,    each

transfer represented an opportunity to make money. 3                     As long as

       2
       The record does not state precisely what the Bank invested
in, but nothing in the Pension Plan documents required the Bank
to invest in the menu of investment options available to the
401(k) and Pension Plan participants.
       3
       In communications to 401(k) Plan participants leading up
to the transfers, the Bank explained that “[e]xcess proceeds
would decrease plan costs, saving money for the company.” J.A.
364.   See also J.A. 375 (“What’s in it for the Company? . . .
When associates take advantage of the one-time 401(k) Plan
transfer option, there is a potential savings to the company—the
more money transferred, the greater the savings potential.”).
Although the Bank characterized the primary effect of the
(Continued)
                                            5
the Bank’s actual investments provided a higher rate of return

than   Pension     Plan    participants’          hypothetical    investments,     the

Bank would retain the spread.                And although the spread generated

by   each    account      might    have      been    relatively    small,    in    the

aggregate and over time, this strategy could yield substantial

gains for the Bank. 4

                                             B.

       To   illustrate      by    way   of       example,   consider   401(k)     Plan

participants Jack and Jill.             They each have account balances of

$100,000,    and    each    has    selected        the   same   investment   option,

which generates a 60-percent return over a 10-year period.                        Jack

decides to keep his 401(k) Plan account, and Jill decides to

make the transfer to the Pension Plan.

       When Jill transfers her assets to the Pension Plan, she

selects the same 60-percent-return investment option she had in

the 401(k) Plan.          But instead of actually investing the $100,000

Jill transferred to the Pension Plan according to her selected

investment option, the Bank periodically notes the value that

transfer option as generating “savings,” the difference between
savings and profit in this context is merely semantic.
Regardless of which term is used, the Bank made money.
       4
       The Bank expressly noted this in its communication to
transfer-eligible plan participants.     J.A. 375 (“[T]he more
money transferred, the greater the savings potential.”)

                                             6
her assets would have gained on her selected investment options

but   actually    invests     it   in       an   investment        portfolio    that

generates a 70-percent return over 10 years.

      Fast forward ten years:           Jack’s actual investment of the

initial $100,000 generates $60,000 in actual returns.                          Jill’s

hypothetical investment of the $100,000 she transferred from the

401(k) Plan to the Pension Plan generates $60,000 in investment

credits.    The accounts are both valued at $160,000.

      Jack’s $160,000 401(k) Plan account balance represents the

full value of the initial balance plus his actual investment

performance.     But the $160,000 balance of Jill’s Pension Plan

account does not represent the full value of the $100,000 that

she transferred from the 401(k) Plan and the actual investment

performance of that money.          Because the Bank actually invested

that money in investment options with a 70-percent return over

the   ten-year    period,    it    generated       $70,000.          Due   to    the

difference between the Bank’s actual rate of return and the rate

of return of Jill’s selected investment option, the Bank retains

$10,000 after it credits her Pension Plan account with $60,000.

The spread between the actual investment returns ($70,000) and

the   hypothetical       returns   ($60,000)        may     be     small   on    the

individual     account    level    ($10,000       for     Jill’s     Pension     Plan

account).    But it is greater than the amount of money the Bank

stands to gain from Jack’s account ($0).                And with the thousands

                                        7
of Jills working for a large employer like the Bank, it has the

potential to add up.

                                          C.

       In the wake of a June 2000 Wall Street Journal article

covering these types of retirement plan transfers, 5 the Internal

Revenue Service opened an audit of the Bank’s plans.                         In 2005,

the    IRS     issued   a   technical     advice      memorandum,     in   which     it

concluded that the transfers of 401(k) Plan participants’ assets

to    the    Pension    Plan   between    1998   and    2001   violated      Internal

Revenue Code § 411(d)(6) and Treasury Regulation § 1-411(d)-4,

Q&A-3(a)(2).       According to the IRS, the transfers impermissibly

eliminated       the    401(k)     Plan   participants’        “separate       account

feature,”       meaning     that    participants       were    no     longer    being

credited with the actual gains and losses “generated by funds

contributed on the participant[s’] behalf.”                  J.A. 518.

       In May 2008, the Bank and the IRS entered into a closing

agreement.       Under the terms of the agreement, the Bank (1) paid

a $10 million fine to the U.S. Treasury, (2) set up a special-

purpose 401(k) plan, (3) and transferred Pension Plan assets

that    were    initially      transferred     from    the   401(k)   Plan     to   the

special-purpose 401(k) plan.              The Bank also agreed to make an

       5
       Ellen E. Schultz, Firms Expand Uses of Retirement Funds:
Bank of America Offers Staff Rollovers Into Pension Plan, Wall
St. Journal, June 19, 2000, at A2.

                                          8
additional payment to participants who had elected to transfer

their assets from the 401(k) Plan to the Pension Plan if the

cumulative total return of their hypothetical investments was

less than a certain amount. 6     All settlement-related transfers

were finalized by 2009.

                                  D.

     Plaintiffs filed their original complaint against the Bank

in the U.S. District Court for the Southern District of Illinois

in 2004, alleging several ERISA violations stemming from plan

amendments   and   transfers.    The    Bank   moved     under   28   U.S.C.

§ 1404(a) to change venue, and the case was transferred to the

Western District of North Carolina.        There, the district court

dismissed three of the four counts contained in the complaint.

See McCorkle v. Bank of America Corp., 688 F.3d 164, 169 n.4,

177 (4th Cir. 2012).

     Plaintiffs’   lone   remaining    claim   alleges    a   violation   of

ERISA § 204(g)(1), 29 U.S.C. § 1054(g)(1), 7 which states that an

ERISA-plan participant’s “accrued benefit” “may not be decreased

by an amendment of the plan” unless specifically provided for in

     6
       For a more detailed discussion of how the Bank determined
whether participants qualified for this additional payment, see
Pender, 2013 WL 4495153, at *4.
     7
       This opinion uses a parallel citation to the United States
Code and the ERISA code the first time a statute is cited and
thereafter refers only to the ERISA code citation.

                                  9
ERISA or regulations promulgated pursuant to ERISA.                             According

to Plaintiffs, the Bank improperly decreased the accrued benefit

of the separate account feature.                     Relying, at least in part,

upon the IRS’s declaration that the transfers from the 401(k)

Plan       to   the    Pension    Plan   violated      both      Treasury       Regulation

§ 1.411(d)-4, Q&A-3(a)(2) and the statute it implements, I.R.C.

§ 411(d)(6)(A) 8,          Plaintiffs     sought         to     use      ERISA’s       civil

enforcement provision, ERISA § 502(a), 29 U.S.C. § 1132(a), to

recover the profits the Bank retained after it transferred the

effected        Pension    Plan   accounts      to   the      special-purpose       401(k)

plan.

       At the hearing on the parties’ cross-motions for summary

judgment, the Bank argued that (1) its closing agreement with

the IRS stripped Plaintiffs of Article III standing because it

restored the separate account feature, and (2) the statute of

limitations           barred   Plaintiffs’      claims.         Plaintiffs       countered

with a request for declarations that (1) they are entitled to

any spread between what they were paid and the actual investment

gains of the assets that were originally in the 401(k) Plan, and

(2)     the     agreement      between    the     Bank     and    the     IRS    did     not

extinguish their ERISA claims.                  The district court granted the

       8
        I.R.C. § 411(d)(6)(A)                is      the      Internal    Revenue       Code
analogue to ERISA § 204(g)(1).

                                           10
Bank’s motion, denied Plaintiffs’ motion, and dismissed the case

on the basis that Plaintiffs lacked standing.              Pender v. Bank of

Am.   Corp.,   No.    3:05-CV-00238-GCM,      2013 WL 4495153,    at    *11

(W.D.N.C. Aug. 19, 2013).         Plaintiffs appealed.

                                      II.

      We review a district court’s disposition of cross-motions

for summary judgment de novo, examining each motion seriatim.

Libertarian Party of Virginia v. Judd, 718 F.3d 308, 312 (4th

Cir.), cert. denied, 134 S. Ct. 681 (2013).                We view the facts

and inferences arising therefrom in the light most favorable to

the   non-moving     party   to   determine   whether      there    exists   any

genuine    dispute    of   material    fact   or   whether    the   movant   is

entitled to judgment as a matter of law.                Id.   And we review

legal questions regarding standing de novo.                David v. Alphin,

704 F.3d 327, 333 (4th Cir. 2013).

                                      III.

      On appeal, Plaintiffs contend that they are entitled to the

full value of the investment gains the Bank realized using the

assets transferred to the Pension Plan.              To assert such a claim

under ERISA, Plaintiffs must possess both statutory and Article

III standing, David, 704 F.3d at 333, which we now respectively

address.

                                       11
                                               A.

      To show statutory standing, Plaintiffs must identify the

portion of ERISA that entitles them to bring the claim for the

relief they seek.              Plaintiffs argue that ERISA § 502(a)(1)(B),

which allows a beneficiary to recover benefits due under the

terms of the plan, enables them to bring their claim.                                     In the

alternative,     they      argue      that     Sections 502(a)(2)              and    502(a)(3)

also entitle them to the relief they seek.                         We consider each.

                                               1.

      Under     ERISA      §    502(a)(1)(B),             “[a]    civil    action         may    be

brought by a participant or a beneficiary to recover benefits

due to him under the terms of his plan, to enforce his rights

under the terms of the plan, or to clarify his rights to future

benefits     under    the       terms    of     the       plan.”        (emphases         added).

Plaintiffs argue that ERISA § 502(a)(1)(B) is the proper section

under   which    to       bring   a     claim       for    benefits       due    based      on   a

misapplied      formula         and     that    the        Bank    “‘misapplied’           [the]

formula”     when    it    failed       to   administer          the    plan     in   a    manner

“consistent with ERISA’s minimum standards.”                            Appellants’ Br. at

45-46 (emphasis omitted).               However, CIGNA Corp. v. Amara, 131 S.

Ct.   1866    (2011),       explicitly         precludes         them     from    using     this

provision to recover the relief they seek.

      In Amara, as here, the plaintiffs sought to enforce the

plan not as written, but as it should properly be enforced under

                                               12
ERISA.        The    district   court     ordered         the    terms          of    the    plan

“reformed” and then enforced the changed plan.                                  Id. at 1866.

But as the Supreme Court underscored, “[t]he statutory language

speaks   of    enforcing     the    terms     of    the    plan,          not    of   changing

them.”     Id. at 1876-77 (internal quotation marks, citation, and

emphasis       omitted).            Indeed,        “nothing        suggest[ed]               that

[Section 502(a)(1)(B)] authorizes a court to alter those terms .

. . where that change, akin to the reform of a contract, seems

less like the simple enforcement of a contract as written and

more like an equitable remedy.”             Id. at 1877.

     Here,      as    in   Amara,     Plaintiffs’         requested             remedy      would

require the court to do more than simply enforce a contract as

written.      Rather, as we will soon discuss, what they ask sounds

in equity.      Accordingly, Section 502(a)(1)(B) provides no avenue

for bringing their claim.

                                          2.

     Under ERISA § 502(a)(2), a plan beneficiary may bring a

civil    action      for   “appropriate     relief”        when       a    plan       fiduciary

breaches its statutorily imposed “responsibilities, obligations,

or duties,” ERISA § 409, 29 U.S.C. § 1109.                            Plaintiffs argue

that they may seek relief under Section 502(a)(2) because the

Bank breached a fiduciary obligation by failing to “act with the

best interest of participants in mind” and by “ignor[ing] the

terms    of   the     amendments     to   the      extent       the       amendments        were

                                          13
inconsistent with ERISA.”            J.A. 236.         However, again Plaintiffs’

claim is precluded by Supreme Court precedent because Pegram v.

Herdrich,     530 U.S. 211    (2000),      bars     recovery    under    this

provision.

       Unlike traditional trustees who are bound by the duty of

loyalty to trust beneficiaries, ERISA fiduciaries may wear two

hats.     “Employers, for example, can be ERISA fiduciaries and

still     take      actions     to      the       disadvantage        of    employee

beneficiaries,      when    they     act    as    employers     (e.g.,     firing   a

beneficiary for reasons unrelated to the ERISA plan), or even as

plan sponsors (e.g., modifying the terms of a plan as allowed by

ERISA to provide less generous benefits).”                   Pegram, 530 U.S. at

225.     Thus, the “threshold question” we must ask here is whether

the Bank acted as a fiduciary when “taking the action subject to

complaint.”      Id. at 226.

       Under ERISA, a person is a fiduciary vis-à-vis a plan “to

the extent” that he (1) “exercises any discretionary authority

or discretionary control respecting management of such plan or .

. . its assets,” (2) “renders investment advice for a fee or

other compensation,” or (3) “has any discretionary authority or

discretionary       responsibility         in    the    administration     of   such

plan.”     ERISA § 3(21)(A), 29 U.S.C. § 1002(21)(A).                  Accordingly,

the Bank is a fiduciary only to the extent that it acts in one

of these three capacities.

                                           14
       As    we    read        Count        IV    of        Plaintiffs’         Fourth     Amended

Complaint, i.e., Plaintiffs’ one remaining claim, they assert

two fiduciary breaches: (1) the Bank breached a fiduciary duty

when it amended the 401(k) Plan and Pension Plan to permit the

transfers; and (2) the Bank breached a fiduciary duty when it

permitted the voluntary transfers between the plans.                                      Neither

holds water.

       The first claim fails because “[p]lan sponsors who alter

the    terms      of    a      plan    do        not    fall       into       the   category     of

fiduciaries.”            Lockheed       Corp.          v.    Spink,      517 U.S. 882,   890

(1996).      Instead, these actions are analogous to those of trust

settlors.      Id.

       The second claim fails for the simple reason that the Bank

did    not    exercise         discretion         regarding            the    transfers.        The

transfers between the 401(k) Plan and the Pension Plan occurred

only    for       those        plan     participants               who       affirmatively      and

voluntarily       directed       the    Bank       to       take    such      action.     Because

following participants’ directives did not involve discretionary

plan   administration           so     as    to    trigger         fiduciary        liability    as

required under ERISA § 3(21)(A), that action cannot support an

ERISA § 502(a)(2) claim.

                                                  3.

       Finally,        under    Section 502(a)(3),                 a   plan    beneficiary      may

obtain “appropriate equitable relief” to redress “any act or

                                                  15
practice which violates” ERISA provisions contained in a certain

subchapter    of      the       United    States       Code.      To   determine          whether

Section 502(a)(3) applies to these facts, we must answer two

questions:      (1)    Did        the     transfers        violate       a    covered      ERISA

provision?       And      if     so,     (2)    does    the     relief       Plaintiffs        seek

constitute “appropriate equitable relief” within the meaning of

the statute?       The answer to both questions is yes.

                                                i.

      ERISA § 204(g)(1), which is also known as the anti-cutback

provision, is a covered provision under Section 502(a)(3).                                       It

provides that a plan amendment may not decrease a participant’s

“accrued benefit.”               ERISA § 3(23)(B), 29 U.S.C. § 1002(23)(B),

defines the accrued benefit in a 401(k) plan as “the balance of

the individual’s account.”                    In the technical advice memorandum,

the IRS concluded that the transfers between the 401(k) Plan and

the   Pension      Plan         violated       I.R.C.    §     411(d)(6)       and    Treasury

Regulation      § 1.411(d)-4,             Q&A-3.          See     J.A.       519.         I.R.C.

§ 411(d)(6)      provides—in             language       nearly       identical       to    ERISA

§ 204(g)(1)—that            a     plan         amendment       may     not      decrease         a

participant’s         “accrued           benefit.”             Treasury        Regulation         §

1.411(d)-4,     Q&A-3(a)(2),             which    implements         I.R.C.     § 411(d)(6),

further   provides          that       the     “separate       account       feature      of     an

employee’s    benefit           under     a    defined       contribution       plan”       is    a

protected benefit within the meaning of I.R.C. § 411(d)(6).

                                                16
     According          to    the    IRS’s     interpretation         of     the       relevant

statutes and regulations, “‘separate account feature’ describes

the mechanism by which a [defined contribution plan] accounts

for contributions and actual earnings/losses thereon allocated

to a specific defined contribution plan participant with the

risk of investment experience being borne by the participant.”

J.A. 517.        In a defined contribution plan like the 401(k) Plan,

assets are actually invested in participants’ chosen investment.

401(k) Plan participants bear the investment risk, but this is

unproblematic because their account balances are identical to

the actual performance of their actual investments.

     By      contrast,              because        Pension      Plan         participants’

“investments”        are        hypothetical,          there     is        no      guaranteed

correlation       between        their     account      balances       and       the     assets

available to cover Pension Plan liabilities.                          Depending on the

success of the Bank’s actual investments, the Pension Plan’s

assets     may    lack        sufficient      funds     to     satisfy          all    of     its

liabilities (or may run a surplus).

     Turning       to    a     textual     analysis,     we     insert       the       relevant

language    from     Section 3(23)(B)           into    Section 204(g)(1):                   “The

[balance of the individual’s account] may not be decreased by an

amendment of the plan . . . .”                  The Transfer Guarantee provides

assurances       that        individuals      will    receive    no     less          than    the

monetary value of their 401(k) Plan accounts at the time of

                                              17
transfer.        But     the    Bank’s       promise       that    the     value      of   the

transferred funds will not decrease below a certain threshold—

even if, for example, it invests Pension Plan assets poorly and

loses the money—is not the same as actually not decreasing the

account balance.          It brings to mind the (instructive, even if

distinguishable)         difference         between    making       a    loan    that      the

borrower promises to repay and leaving your money in your bank

account.       Assuming all goes well, the end result may well be the

same; but they plainly are not the same thing.

     In        essence,        Section 204(g)(1)’s              prohibition           against

amendments that decrease defined contribution plan participants’

account balances is a variation on a trustee’s duty to preserve

trust property.          See Restatement (Second) of Trusts § 176.                          An

ERISA    plan    sponsor       is   under    no     duty   to     ensure    that      defined

contribution      plan     participants        do    not    decrease       their      account

balances through their own actions.                   But the plan sponsor cannot

take actions that decrease participant account balances.

     For these reasons, and in light of the similarities between

I.R.C.     §    411(d)(6)       and    ERISA        § 204(g)(1),         and    the     IRS’s

persuasive analysis, we hold that a defined contribution plan’s

separate account feature constitutes an “accrued benefit” that

“may not be decreased by amendment of the plan” under Section

204(g)(1).       The transfers at issue here resulted in a loss of

                                             18
the      separate            account          feature        and         thus      violated

Section 204(g)(1).

                                              ii.

       Although       the    Bank’s     violation       of   Section 204(g)(1)           is    a

necessary       component       of     Plaintiff’s        claim        for    relief     under

Section 502(a)(3),            that     violation        alone     is     insufficient         to

confer       statutory        standing.             Plaintiffs         must      also     seek

“appropriate equitable relief.”                 This, they do.

       The     Supreme      Court     has    interpreted        the    term     “appropriate

equitable relief,” as used in Section 502(a)(3), to refer to

“those categories of relief that, traditionally speaking (i.e.,

prior to the merger of law and equity) were typically available

in equity.”          Amara, 131 S. Ct. at 1878 (quoting Sereboff v. Mid

Atl.    Med.    Servs.,      Inc.,     547 U.S. 356,      361    (2006))    (internal

quotation marks omitted).                   Further, because Section 502(a)(3)

functions       as    a     “safety    net,     offering        appropriate       equitable

relief for injuries caused by violations that § 502 does not

elsewhere adequately remedy,” Varity Corp. v. Howe, 516 U.S.
489,     512     (1996),       equitable       relief        will      not    normally        be

“appropriate” if relief is available under another subsection of

Section 502(a).           Id. at 515.

       Here, Plaintiffs seek the difference between (1) the actual

investment gains the Bank realized using the assets transferred

to     the     Pension       Plan,      and     (2)      the     transferred           assets’

                                               19
hypothetical investment performance, which the Bank has already

paid Pension Plan participants.                  In other words, Plaintiffs seek

the   profit    the   Bank     made    using      their   assets.         This   is    the

hornbook definition of an accounting for profits.

      An accounting for profits “is a restitutionary remedy based

upon avoiding unjust enrichment.”                  1 D. Dobbs, Law of Remedies

§ 4.3(5), p. 608 (2d ed. 1993) (hereinafter Dobbs).                        It requires

the   disgorgement       of   “profits      produced      by     property    which      in

equity and good conscience belonged to the plaintiff.”                           Id.    It

is akin to a constructive trust, but lacks the requirement that

plaintiffs     “identify      a     particular      res   containing      the    profits

sought to be recovered.”              Great-W. Life & Annuity Ins. Co. v.

Knudson, 534 U.S. 204, 214 n.2 (2002) (citing 1 Dobbs § 4.3(1),

at 588; id., § 4.3(5), at 608).

      In Knudson, the Supreme Court expressly noted that, unlike

other restitutionary remedies, an accounting for profits is an

equitable      remedy. 534 U.S.    at    214    n.2.      The    Court       also

suggested that an accounting for profits would support a claim

under Section 502(a)(3) in the appropriate circumstances.                              See

id. (noting that the petitioners did not claim profits produced

by certain proceeds and were not entitled to those proceeds).

This case presents those appropriate circumstances.

      Unlike the petitioners in Knudson, Plaintiffs seek profits

generated using assets that belonged to them.                     And, as explained

                                            20
above,      Section     502(a)’s           other        subsections       do   not     afford

Plaintiffs      any    relief.             If    Section 204(g)(1)’s           proscription

against decreasing accrued benefits is to have any teeth, the

available remedies must be able to reach situations like the one

this case presents, i.e., where a plan sponsor benefits from an

ERISA violation, but plan participants—perhaps through luck or

agency intervention—suffer no monetary loss.                              See McCravy v.

Met.   Life    Ins.    Co.,       690 F.3d 176,   182–83    (4th    Cir.    2012)

(“[W]ith      Amara,    the       Supreme         Court       clarified    that      [various

equitable]      remedies      .       .    .     are     indeed    available      to    ERISA

plaintiffs . . . . [O]therwise, the stifled state of the law

interpreting         [Section 502(a)(3)]                 would    encourage       abuse.”).

Because it “holds the defendant liable for his profits, not for

damages,” 1 Dobbs § 4.3(5), at 611, the equitable remedy of

accounting for profits adequately addresses this concern.                                Cf.

Amalgamated      Clothing         &       Textile       Workers    Union,      AFL-CIO    v.

Murdock, 861 F.2d 1406, 1413–14 (9th Cir. 1988) (holding that a

constructive         trust    was          an      “important,         appropriate,      and

available” remedy under Section 502(a)(3) for breach of trust,

even when plaintiffs had “received their actuarially vested plan

benefits”).

       In     sum,     Plaintiffs               have     statutory        standing      under

Section 502(a)(3) to bring their claim.

                                                 B.

                                                 21
       The Bank argues that even if it violated certain provisions

of ERISA, the district court properly granted summary judgment

because Plaintiffs lack Article III standing.                 The Bank argues

that the transfers from the Pension Plan to the special-purpose

401(k) plan mooted any injury.

       For   the   federal   courts   to    have   jurisdiction,       plaintiffs

must    possess      standing    under      Article    III,      § 2     of    the

Constitution.       See David, 704 F.3d at 333.              There exist three

“irreducible minimum requirements” for Article III:

       (1) an injury in fact (i.e., a ‘concrete and
       particularized’ invasion of a ‘legally protected
       interest’);

       (2) causation (i.e., a ‘fairly . . .      trace[able]’
       connection between the alleged injury in fact and the
       alleged conduct of the defendant); and

       (3) redressability (i.e., it is ‘likely’ and not
       merely ‘speculative’ that the plaintiff's injury will
       be remedied by the relief plaintiff seeks in bringing
       suit).

Sprint Commc’ns Co., L.P. v. APCC Serv., Inc., 554 U.S. 269,

273–74 (2008) (citing Lujan v. Defenders of Wildlife, 504 U.S.
555, 560–61 (1992)).

                                      1.

       Our   analysis   first   focuses      on    whether    Plaintiffs      have

demonstrated an injury in fact.            The crux of the Bank’s standing

argument is that Plaintiffs have not suffered a financial loss.

We, however, agree with the Third Circuit that “a financial loss

                                      22
is not a prerequisite for [Article III] standing to bring a

disgorgement claim under ERISA.”                   Edmonson v. Lincoln Nat. Life

Ins. Co., 725 F.3d 406, 417 (3d Cir. 2013), cert. denied, 134 S.

Ct. 2291 (2014); see also Vander Luitgaren v. Sun Life Ins. Co.

of Canada, No. 09–CV–11410, 2010 WL 4722269, at *1 (D.Mass. Nov.

18, 2010) (rejecting argument that plaintiff lacked standing to

sue    for      disgorgement      of    profit     earned    via    a   retained    asset

account). 9

       As    an    initial      matter,    it    goes     without    saying      that   the

Supreme Court has never limited the injury-in-fact requirement

to    financial      losses      (otherwise        even     grievous    constitutional

rights violations may well not qualify as an injury).                            Instead,

an    injury      refers   to    the    invasion     of    some    “legally   protected

interest” arising from constitutional, statutory, or common law.

Lujan      v.    Defenders      of     Wildlife,    504 U.S. 555,   578    (1992).

Indeed, the interest may exist “solely by virtue of statutes

creating legal rights, the invasion of which creates standing.”

       9
       But see Kendall v. Employees Ret. Plan of Avon. Prods.,
561 F.3d 112, 119 (2d Cir. 2009).       In Kendall, the Second
Circuit articulated the requirement that ERISA plaintiffs
seeking disgorgement must show individual loss.   561 F.3d 112.
But such a limitation would foreclose an action for breach of
fiduciary duty in cases where the fiduciary profits from the
breach but the plan or plan beneficiaries incur no financial
loss.   ERISA, however, provides for a recovery in such cases,
and we reject such “perverse incentives.” McCravy, 690 F.3d at
183. We thus similarly reject the Second Circuit’s view.

                                            23
Id.   (internal      quotation      marks      and       citation    omitted).        Thus,

“standing is gauged by the specific common-law, statutory or

constitutional        claims      that    a   party       presents.”       Int’l    Primate

Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S. 72, 77

(1991).       We    therefore      examine         the    principles       that    underlie

Plaintiffs’        claim    for   an     accounting        for    profits    under    ERISA

§ 502(a)(3) to discern whether there exists a legally protected

interest.

      It    is     blackletter         law    that        a    plaintiff     seeking    an

accounting for profits need not suffer a financial loss.                             See 1

Dobbs § 4.3(5), at 611 (“Accounting holds the defendant liable

for his profits, not damages.”); see also Restatement (Third) on

Restitution and Unjust Enrichment § 51 cmt. a (2011) (noting

that the object of an accounting “is to strip the defendant of a

wrongful gain”).            Requiring a financial loss for disgorgement

claims     would    effectively        ensure      that       wrongdoers    could    profit

from their unlawful acts as long as the wronged party suffers no

financial loss.            We reject that notion.                Edmonson, 725 F.3d at

415. 10

      10
        The district court supported its ruling that Plaintiffs
failed to satisfy Article III’s injury-in-fact requirement with
a citation to Horvath v. Keystone Health Plan East, Inc., 333
F.3d 450, 456 (2003), which it said stood for the proposition
that   an   ERISA  plaintiff  seeking  disgorgement  must  show
individual loss. Pender, 2013 WL 4495153, at *9. Yet the Third
Circuit itself has made plain that “[n]othing in Horvath . . .
(Continued)
                                              24
        As the Third Circuit recently underscored—in a fiduciary

breach case that, while distinguishable, we nevertheless find

instructive—requiring          a   plaintiff         seeking    an      accounting   for

profits to demonstrate a financial loss would allow those with

obligations under ERISA to profit from their ERISA violations,

so long as the plan and plan beneficiaries suffer no financial

loss.     Edmonson, 725 F.3d at 415.                 Such a result would be hard

to   square   with      the   overall     tenor      of   ERISA,     “a   comprehensive

statute designed to promote the interests of employees and their

beneficiaries in employee benefit plans.”                    Ingersoll–Rand Co. v.

McClendon, 498 U.S. 133, 137 (1990) (internal quotation marks

omitted).      In addition, it would directly contradict ERISA’s

provision covering liability for breach of fiduciary duty, which

requires a fiduciary who breaches “any of [his or her statutory]

responsibilities,         obligations,          or    duties”      to     restore    “any

profits” to the plan.          ERISA § 409(a).

        Finally,   we     note     that   ERISA       borrows      heavily    from   the

language and the law of trusts.                 See Firestone Tire & Rubber Co.

v. Bruch, 489 U.S. 101, 110 (1989) (“ERISA abounds with the

states or implies that a net financial loss is required for
standing to bring a disgorgement claim.” Edmonson, 725 F.3d at
417.

                                           25
language and terminology of trust law.”). 11                Under traditional

trust law principles, when a trustee commits a breach of trust,

he is accountable for the profit regardless of the harm to the

beneficiary.       See Restatement (Second) of Trusts § 205, cmt. h;

see also 4 Scott & Ascher on Trusts § 24.7, at 1682(5th ed.

2006) (“It is certainly true that a trustee who makes a profit

through a breach of trust is accountable for the profit.                   But it

is   also   true   that   a   trustee   is   accountable     for   all   profits

arising out of the administration of the trust, regardless of

whether there has been a breach of trust.”).

      By    proscribing       plan    amendments     that     decrease       plan

participants’       accrued      benefits—i.e.,      harm      beneficiaries’

existing    rights—ERISA      functionally     imports     traditional      trust

principles.         Here,     these     principles    dictate       that     plan

beneficiaries have an equitable interest in profits arrived at

by way of a decrease in their benefits. 12

      11
        Courts have also looked to trust principles to answer
questions regarding Article III standing in appropriate cases.
E.g., Scanlan, 669 F.3d at 845 (“[W]e see no reason why
canonical principles of trust law should not be employed when
determining   the  nature  and   extent  of   a   discretionary
beneficiary’s interest for purposes of an Article III standing
analysis.”).
      12
        Accord United States v. $4,224,958.57, 392 F.3d 1002,
1005 (9th Cir. 2004) (holding that if claimants proved their
constructive trust claim they would have an equitable interest
in the defendant property, which would provide them with Article
III standing).

                                        26
      In     sum,   for      standing      purposes,    Plaintiffs       incurred   an

injury      in   fact,     i.e.,      an   invasion    of   a   legally     protected

interest, because they “suffered an individual loss, measured as

the ‘spread’ or difference between the profit the [Bank] earned

by investing the retained assets and the [amount] it paid to

[them].”      Edmonson, 725 F.3d at 417.

                                            2.

      Continuing       the    Article      III   standing   analysis,      Plaintiffs

satisfy the causation and redressability requirements.                         But for

the Bank’s improper retention of profits, Plaintiffs would not

have suffered an injury in fact.                 And the relief Plaintiffs seek

is not speculative in nature; the Bank invested those assets,

and   the    profits      made   by    those     investments    should    be   readily

ascertainable.

                                            3.

      The Bank argues that even if Plaintiffs had Article III

standing at the time they filed the suit, its closing agreement

with the IRS restored any loss of the separate account feature

and mooted Plaintiffs’ claims.                 Here, too, we disagree.

      The Supreme Court has repeatedly referred to mootness as

“the doctrine of standing set in a time frame.” Friends of the

Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167,

170 (2000) (quoting Arizonans for Official English v. Arizona,

520 U.S. 43, 68 (1997)).               If a live case or controversy ceases

                                            27
to exist after a suit has been filed, the case will be deemed

moot and dismissed for lack of standing.                   Lewis v. Cont’l Bank

Corp., 494 U.S. 472, 477 (1990).                 But “[a] case becomes moot

only when it is impossible for a court to grant any effectual

relief    whatever     to    the   prevailing     party.”            Knox       v.    Serv.

Employees Int’l Union, Local 1000, 132 S. Ct. 2277, 2287 (2012)

(quoting Erie v. Pap’s A.M., 529 U.S. 277, 287 (2000) (internal

quotation marks omitted)) (emphasis added).

      The Bank rightly notes that its closing agreement with the

IRS   restored       Plaintiffs’     separate      account       feature.              That

restoration, however, did not moot the case.                    Plaintiffs contend

that the Bank retained a profit, even after it restored the

separate account feature to Plaintiffs and paid a $10 million

fine to the IRS.        Defendants do not rebut this argument, noting

only that there has been no discovery to this effect.                                 If an

accounting ultimately shows that the Bank retained no profit,

the case may well then become moot.              “But as long as the parties

have a concrete interest, however small, in the outcome of the

litigation,    the    case    is   not   moot.”         Ellis   v.    Bhd.       of     Ry.,

Airline    &   S.S.     Clerks,      Freight     Handlers,       Exp.       &        Station

Employees,     466 U.S. 435,    442      (1984)     (citing           Powell       v.

McCormack, 395 U.S. 486, 496–98 (1969)).

      In sum, we hold that Plaintiffs have Article III standing

to bring their claims.

                                         28
                                          IV.

      The    Bank   argues       that   even    if    Plaintiffs     have   standing,

their    claims     are    time-barred         by    the   applicable     statute     of

limitations.         To    determine      what       the   applicable     statute     of

limitations is, we engage in a three-part analysis.                         First, we

identify the statute of limitations for the state claim most

analogous to the ERISA claim at issue here.                      Second, because of

the 28 U.S.C. § 1404(a) transfer, we must determine whether the

Fourth Circuit’s or the Seventh Circuit’s choice-of-law rules

apply. And third, we apply the relevant choice-of-law rules to

determine which state’s statute of limitations applies.

                                          A.

      “Statutes     of    limitations      establish        the    period    of    time

within which a claimant must bring an action.” Heimeshoff v.

Hartford Life & Acc. Ins. Co., 134 S. Ct. 604, 610 (2013).                          When

ERISA does not prescribe a statute of limitations, courts apply

the most analogous state-law statute of limitations.                        White v.

Sun   Life    Assur.      Co.,    488 F.3d 240,   244    (4th   Cir.     2007),

abrogated on other grounds by Heimeshoff, 134 S. Ct. 604.

      Although the parties have suggested that the statute of

limitations for contract claims is most analogous, we disagree.

It would be incongruous to hold that Plaintiffs are unable to

pursue   relief     under    Section 502(a)(1)(B)            because     their    claim

                                          29
sounds in equity instead of contract, and then apply the statute

of limitations for a breach of contract claim.

       In our view, the most analogous statute of limitations is

that for imposing a constructive trust.                      As noted above, the

equitable     remedy     of    an    accounting     for    profits    is     akin   to    a

constructive trust.           Knudson, 534 U.S. at 214 n.2.

       Both North Carolina and Illinois recognize such remedies.

In   North    Carolina,        a    constructive    trust    may     be    “imposed      by

courts of equity to prevent the unjust enrichment of the holder

of title to, or of an interest in, property which such holder

acquired through . . . circumstance[s] making it inequitable for

him to retain it against the claim of the beneficiary of the

constructive         trust.”         Variety      Wholesalers,       Inc.     v.    Salem

Logistics Traffic Servs., LLC, 723 S.E.2d 744, 751 (N.C. 2012)

(quoting Wilson v. Crab Orchard Dev. Co., 171 S.E.2d 873, 882

(N.C. 1970)).          Likewise, Illinois’s highest court has stated

that “[w]hen a person has obtained money to which he is not

entitled,     under     such       circumstances     that    in     equity    and    good

conscience he ought not retain it, a constructive trust can be

imposed to avoid unjust enrichment.”                 Smithberg v. Illinois Mun.

Ret.   Fund,    735 N.E.2d 560,   565    (Ill.    2000).         Furthermore,

neither      state    requires       wrongdoing     to     impose    a     constructive

trust.    See id. (citing several cases); Houston v. Tillman, 760

                                            30
S.E.2d 18,   21–22    (N.C.   Ct.     App.   2014)   (citing    Variety

Wholesalers, Inc., 723 S.E.2d at 751–52).

     In Illinois, the applicable statute of limitations is five

years.    Frederickson v. Blumenthal, 648 N.E.2d 1060, 1063 (Ill.

App. Ct. 1995) (citing 735 Ill. Comp. Stat. 5/13-205; Chicago

Park District v. Kenroy, Inc., 374 N.E.2d 670 (Ill. App. Ct.

1978), aff’d in part, rev’d in part by 402 N.E.2d 181 (Ill.

1980)).    In North Carolina, a ten-year statute of limitations

applies to “[a]ctions seeking to impose a constructive trust or

to obtain an accounting.”        Tyson v. N. Carolina Nat. Bank, 286
S.E.2d 561, 564 (N.C. 1982).

                                    B.

     We next turn to the question of which circuit’s choice-of-

law rules apply.        Plaintiffs initially filed this case in the

District Court for the Southern District of Illinois.             The Bank

moved, pursuant to 28 U.S.C. § 1404(a), to change the venue of

the case by having it transferred to the District Court for the

Western District of North Carolina.         We must therefore determine

whether the choice-of-law rules of the transferor court or those

of the transferee court apply.

     The majority of circuits to consider the issue apply the

transferor court’s choice-of-law rules.           See, e.g., Hooper v.

Lockheed Martin Corp., 688 F.3d 1037, 1046 (9th Cir. 2001); In

re Ford Motor Co., 591 F.3d 406, 413 n.15 (5th Cir. 2009);

                                    31
Olcott v. Delaware Flood Co., 76 F.3d 1538, 1546-47 (10th Cir.

1996; Eckstein v. Balcor Film Investors, 8 F.3d 1121, 1127 (7th

Cir. 1993). 13         This conclusion makes sense:                  “The legislative

history       of    [Section]     1404(a)   certainly        does    not      justify       the

rather startling conclusion that one might get a change of law

as a bonus for a change of venue.”                     Van Dusen v. Barrack, 376
U.S. 612, 635-36 (1964) (internal quotation marks omitted).                                  We

join    the    majority      of    our   sister   circuits         and    hold      that    the

transferor court’s choice-of-law rules apply when a case has

been transferred pursuant to 28 U.S.C. § 1404(a).                             Accordingly,

the Seventh Circuit’s choice-of-law rules apply here.

                                            C.

       Under the Seventh Circuit’s choice-of-law rules, we look to

the forum state “as the starting point.”                      Berger v. AXA Network

LLC, 459 F.3d 804, 813 (7th Cir. 2006).                      But “[i]f another state

with    a     significant         connection     to    the    parties         and    to     the

transaction has a limitations period that is more compatible

with    the        federal   policies     underlying         the    federal         cause   of

action,       that     state’s     limitations        law    ought       to   be     employed

       13
        But see Lanfear v. Home Depot, Inc., 536 F.3d 1217, 1223
(11th Cir. 2008) (holding that the transferee court may apply
its own choice-of-law rules when the case involves interpreting
federal law); Menowitz v. Brown, 991 F.2d 36, 41 (2d Cir. 1993)
(same).

                                            32
because it furthers, more than any other option, the intent of

Congress when it created the underlying right.”                   Id.

      Here, although Illinois may be the forum state, see Atl.

Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134
S. Ct. 568, 582-83 (2013) (noting that the “state law applicable

in the original court also appl[ies] in the transferee court”

unless a Section 1404(a) motion is “premised on the enforcement

of a valid forum-selection clause”); J.A. 462-64 (memorandum and

order    discussing      reasons    for    granting      the    Bank’s     motion   to

change venue), it is clear to us that North Carolina has a

“significant connection” to the dispute for the same reasons for

which    the   district    court    granted        the   Bank’s   Section      1404(a)

motion: “the decision to ‘permit’ the ‘voluntary’ transfer of

401(k) Plan assets to the converted cash balance plan took place

in the Western District of North Carolina” and “virtually all

the relevant witnesses reside in the Western District of North

Carolina.”     J.A. 462-64.

      Further,     the     Pension        Plan     contains       a     choice-of-law

provision applying North Carolina law when federal law does not

apply.    See Berger, 459 F.3d at 813–14 (considering a choice-of-

law clause as a non-controlling but relevant factor in selecting

a   limitations    period).         Finally,        North    Carolina’s       ten-year

limitations      period     is     “more        compatible     with     the    federal

policies” underlying ERISA than Illinois’s five-year limitations

                                           33
period;   the    longer   period    provides    aggrieved     plaintiffs   with

more opportunities to advance one of ERISA’s core policies: “to

protect . . . the interests of participants in employee benefit

plans and their beneficiaries . . . by providing for appropriate

remedies, sanctions, and ready access to the Federal courts.”

29 U.S.C. § 1001(b).

       The first of the transfers in question took place in 1998.

Plaintiffs filed suit in 2004, a full four years before the ten-

year   statute    of   limitations     would    have   run.      Accordingly,

Plaintiffs’ claims are not time-barred by the applicable ten-

year limitations period.           The statute of limitations therefore

cannot serve as a basis for affirming the district court’s grant

of summary judgment to the Bank.

                                      V.

       For the foregoing reasons, we reverse the district court’s

grant of summary judgment in favor of the Bank, vacate that

portion of the district court’s order denying Plaintiffs’ motion

for    summary     judgment    based       on   its    erroneous     standing

determination, and remand for further proceedings.

                                                            REVERSED IN PART,
                                                             VACATED IN PART,
                                                                 AND REMANDED

                                      34