Court Opinion

ID: 4704738
Source: CourtListenerOpinion
Date Created: 2021-07-20 00:00:39.977474+00
Date Added: 2024-06-11T08:05:32.213839
License: Public Domain

Case: 20-10817    Document: 00515943397         Page: 1     Date Filed: 07/19/2021

           United States Court of Appeals
                for the Fifth Circuit                          United States Court of Appeals
                                                                        Fifth Circuit

                                                                      FILED
                                                                  July 19, 2021
                                 No. 20-10817                    Lyle W. Cayce
                                                                      Clerk

   Salvadora Ortiz; Thomas Scott,

                                                          Plaintiffs—Appellants,

                                    versus

   American Airlines, Incorporated; American Airlines
   Pension Asset Administration Committee; American
   Airlines Federal Credit Union,

                                                      Defendants—Appellees.

                 Appeal from the United States District Court
                     for the Northern District of Texas
                           USDC No. 4:16-CV-151

   Before Smith, Stewart, and Ho, Circuit Judges.
   Carl E. Stewart, Circuit Judge:
         On behalf of themselves and others similarly situated, Plaintiffs-
   Appellants Salvadora Ortiz and Thomas Scott have brought suit against
   Defendants-Appellees American Airlines, Inc. (“AA”); American Airlines
   Pension Asset Administration Committee (the “PAAC”); and American
   Airlines Federal Credit Union (“FCU”). Plaintiffs alleged that Defendants
   breached their fiduciary duties under the Employee Retirement Income
Case: 20-10817         Document: 00515943397               Page: 2      Date Filed: 07/19/2021

                                          No. 20-10817

   Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.1 Nearly three years
   after declining preliminary approval of a settlement agreement, the district
   court awarded Defendants summary judgment. Plaintiffs appealed.
           For the reasons that follow, we AFFIRM in part, REVERSE in part,
   and VACATE in part.
                           I. FACTS & PROCEDURAL HISTORY
           AA offered a “$uper $aver” 401(k) plan (“Plan”), which allowed its
   employees to save for retirement by investing a portion of their pre-tax
   income in the Plan. The PAAC was a fiduciary body charged with selecting
   investment options for the Plan. Once the PAAC selected options, employees
   were responsible for deciding whether to invest in the Plan, how much, and
   in which option. Plaintiffs, who are former employees of AA, invested in the
   Plan.
           The Plan is governed by ERISA since it is sponsored by an employer.
   Federal regulations urge fiduciaries of ERISA-governed plans to offer at least
   one “safe” investment option, meaning one that is “income producing, low
   risk, [and] liquid[.]” 29 C.F.R. § 2550.404c-1(b)(1)(ii), (b)(2), (b)(3). The
   instant dispute revolves around the Plan’s safe offerings, which are also
   known as “capital preservation options.” These options are designed to
   prioritize protection of the principal investment while still providing positive
   returns.

           1
             ERISA “is a comprehensive federal statute that regulates employee benefit plans.
   It covers defined contribution plans like 401(k) accounts,” such as the Plan. See Miletello v.
   R M R Mech., Inc., 921 F.3d 493, 495 (5th Cir. 2019) (citations omitted).

                                                 2
Case: 20-10817       Document: 00515943397             Page: 3     Date Filed: 07/19/2021

                                        No. 20-10817

          At various points between 2010 and 2016, AA offered two different
   capital preservation options: a demand-deposit fund and a stable value fund.2
          A demand deposit fund is the functional equivalent of an interest-
   bearing checking account. Money invested in such a fund is payable on
   demand without transfer restrictions. See 12 C.F.R. § 204.2(b). Principal
   investments and any returns associated with them—the “book value”—are
   guaranteed up to $250,000 per participant by the full faith and credit of the
   United States government. FCU, which is independent from AA and the
   PAAC, held the demand deposit fund offered under the Plan (the “FCU
   Option”). Each month, FCU set the rate of return offered on the FCU
   Option. FCU notified the Plan in advance of rate changes. Between 2010 and
   2017, the FCU Option’s rate of return averaged just under 57 cents per every
   $100 invested. Because FCU held FCU Option investments in cash reserves
   and short-term investments, it was able, upon demand, to fund the
   withdrawal of the entirety of the FCU Option’s assets.
          A stable value fund exposes investors to greater risk than demand
   deposit accounts and provides only a contractually limited guarantee that
   participants may withdraw the book value of their accounts. And if the
   insurer of the fund defaults, the guarantee may be eliminated altogether.
   Additionally, a stable value fund contains liquidity restrictions. For instance,
   the fund may prohibit investors from transferring their investments into
   another low risk “competing” option. It may also restrict when a retirement
   plan incorporating such a fund may withdraw its entire balance, often
   requiring at least 12 months’ notice before the plan can move funds into

          2
             AA also offered a money market fund, but that offering is not relevant to the
   disposition of this appeal.

                                             3
Case: 20-10817         Document: 00515943397               Page: 4       Date Filed: 07/19/2021

                                           No. 20-10817

   another investment vehicle. The Plan added a stable value offering in late
   2015.
           Ortiz and Scott both invested in the FCU Option. Ortiz never moved
   her investments from the FCU Option once the Plan began offering a stable
   value fund in 2015. Scott likewise never moved his investments from the
   FCU Option into the stable value fund, though he did transfer those
   investments into a lower-yielding money market option.
           In February 2016, Plaintiffs filed suit on behalf of a putative class of
   Plan participants who invested at least some of their money in the FCU
   Option. The complaint included three claims. The first asserted that AA and
   the PAAC breached their fiduciary duties of loyalty and prudence under 29
   U.S.C. § 1104(a)(1)(A)–(B)3 by failing to remove the FCU Option from the
   Plan (“Count I”).4 The second contended that FCU breached its fiduciary
   duty of loyalty under 29 U.S.C. § 1106(b)(1)5 by dealing with plan assets held
   by the FCU Option for its own benefit (“Count II”). The complaint also
   averred AA and the PAAC are liable as co-fiduciaries for FCU’s breach. The

           3
             Section 1104 “sets out distinct but interrelated duties on fiduciaries, including the
   duty of prudence and the duty of loyalty.” Kopp v. Klein, 894 F.3d 214, 219 (5th Cir. 2018)
   (citing § 1104(a)(1)(A)–(B)). “A fiduciary ‘who breaches any of the[se] responsibilities,
   obligations, or duties’ becomes ‘personally liable’ for ‘any losses to the plan resulting from
   each such breach.’” Id. (quoting 29 U.S.C. § 1109(a)).
           4
              After the district court sought clarity on Plaintiffs’ theory of liability for the
   purposes of class certification, they claimed that AA and the PAAC “breached [their]
   fiduciary dut[ies] by imprudently and disloyally selecting and retaining [the FCU
   Option][,] [which] had dramatically lower investment returns than other readily available
   capital preservation investments, including stable value funds.” As AA and the PAAC did
   select a stable value fund for the Plan in 2015, we (and the district court) take Plaintiffs’
   theory to be premised on the assertion that AA and the PAAC should have selected a stable
   value fund instead of—not in addition to—the FCU Option.
           5
              Section 1106(b)(1) prohibits a plan fiduciary from “deal[ing] with the assets of the
   plan in [its] own interest or for [its] own account.” § 1106(b)(1).

                                                 4
Case: 20-10817         Document: 00515943397               Page: 5       Date Filed: 07/19/2021

                                           No. 20-10817

   final claim averred that AA and the PAAC engaged in a “prohibited
   transaction” under 29 U.S.C. § 1106(a)(1)6 by offering the FCU Option
   (“Count III”).
           Five months after bringing this lawsuit, Plaintiffs and Defendants
   agreed to settle the case pursuant to Federal Rule of Civil Procedure 23.
   Although the settlement would have required Defendants to pay $8.8 million
   to the proposed class, Plaintiffs claimed to have lost between $55 and $88
   million. The district court therefore sought justification from Plaintiffs for
   the low payout amount, especially when as much as one third of the
   settlement funds were to be paid out in attorneys’ fees. After providing
   Plaintiffs with two extensions to supplement the record, the district court
   concluded that the evidence presented did not justify the settlement figure
   and so denied preliminary approval of the settlement in October 2017.
           The parties proceeded through discovery. In July 2020, the district
   court declined to certify this case as a class action under Rule 23. The district
   court, however, permitted Plaintiffs to proceed as representatives of the Plan
   pursuant to 29 U.S.C. § 1132.7 AA and the PAAC then filed one summary
   judgment motion, while FCU filed another. In August 2020, the district
   court granted each of the defendant’s motions.
           Plaintiffs timely appealed the district court’s decision to award
   summary judgment and its denial of settlement approval.

           6
             This provision prevents a plan fiduciary from “caus[ing] the plan to engage” in
   certain enumerated transactions with a party-in-interest. § 1106(a)(1).
           7
             “A § 1132(a)(2) plaintiff acts ‘in a representative capacity on behalf of the plan as
   a whole,’ because § 1109 is designed to ‘protect the entire plan[.]’” Pilger v. Sweeney, 725
   F.3d 922, 926 (8th Cir. 2013) (alteration in original) (quoting Mass. Mut. Life Ins. Co. v.
   Russell, 473 U.S. 134, 142 & n.9 (1985)).

                                                 5
Case: 20-10817         Document: 00515943397         Page: 6    Date Filed: 07/19/2021

                                      No. 20-10817

                             II. STANDARD OF REVIEW
          “[W]e always have jurisdiction to determine our own jurisdiction.”
   Tex. Democratic Party v. Hughs, 997 F.3d 288, 290 (5th Cir. 2021). “Standing
   is a component of subject matter jurisdiction.” HSBC Bank USA, N.A. as
   Tr. for Merrill Lynch Mortg. Loan v. Crum, 907 F.3d 199, 202 (5th Cir. 2018).
   “The jurisdictional issue of standing is a legal question for which review is de
   novo.” Id. (citation omitted).
          Moreover, a district court’s rejection of a class-action settlement is
   reviewed for abuse of discretion. See Newby v. Enron Corp., 394 F.3d 296, 300
   (5th Cir. 2004).
                                    III. DISCUSSION
          Before launching into the substantive analysis of the district court’s
   summary judgment ruling, we take a moment to clarify our scope of review.
   We conclude that it is limited to part of Count I and all of Count II.
          Regarding Count I, although Plaintiffs make a fulsome argument that
   AA and the PAAC breached their duty of prudence, they simply “allude[] to
   an argument” in their brief that these defendants additionally breached their
   duty of loyalty. See Curry v. Strain, 262 F. App’x 650, 652 (5th Cir. 2008)
   (per curiam). Accordingly, to the extent Plaintiffs seek review of that latter
   claim, they have forfeited the right to have the court consider it. See id. (citing
   United States v. Thames, 214 F.3d 608, 611 n.3 (5th Cir. 2000)). Furthermore,
   Plaintiffs, by not briefing it, have also abandoned their claim that AA and the
   PAAC are liable as co-fiduciaries for FCU’s purported breach of its own
   fiduciary duties. See Davis v. City of Alvarado, 835 F. App’x 714, 717 n.2 (5th
   Cir. 2020) (per curiam) (citing Bailey v. Shell W. E&P, Inc., 609 F.3d 710, 722
   (5th Cir. 2010)).

                                           6
Case: 20-10817      Document: 00515943397           Page: 7    Date Filed: 07/19/2021

                                     No. 20-10817

          There are no disputes as to whether we should review Count II and so
   we will proceed to do so.
          Finally, with respect to Count III, Plaintiffs argue for the first time on
   appeal that FCU, rather than AA and the PAAC, is liable for engaging in a
   prohibited transaction under § 1106(a)(1). In addition to the fact that the
   complaint asserted Count III against AA and the PAAC, not FCU, Plaintiffs’
   response to FCU’s summary judgment motion does not in fact suggest that
   they intended to sue FCU under § 1106(a)(1) (Plaintiffs’ protestations
   notwithstanding). And by not raising before the district court their argument
   that FCU is liable under § 1106(a)(1), that argument is forfeited. See Salinas
   v. McDavid Houston-Niss, L.L.C., 831 F. App’x 692, 695 (5th Cir. 2020) (per
   curiam) (citing LeMaire v. La. Dep’t of Transp. & Dev., 480 F.3d 383, 387 (5th
   Cir. 2007)). Further, because Plaintiffs do not dispute the district court’s
   conclusion that they failed to respond to AA and PAAC’s summary judgment
   motion arguing that Plaintiffs could not prevail on their Count III claim, they
   have abandoned this claim entirely. See id.
                                     A. Standing
          To prove Article III standing, a plaintiff must show that he or she
   “h[as] (1) suffered an injury in fact, (2) that is fairly traceable to the
   challenged conduct of the defendant, and (3) that is likely to be redressed by
   a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547
   (2016) (citing, inter alia, Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61
   (1992)). “As Lujan emphasized, however, the standard used to establish
   these three elements is not constant but becomes gradually stricter as the
   parties proceed through ‘the successive stages of the litigation.’” In re
   Deepwater Horizon, 739 F.3d 790, 799 (5th Cir. 2014) (quoting Lewis v. Casey,
   518 U.S. 343, 358 (1996)). The plaintiff can establish standing at the summary
   judgment stage only by “‘set[ting] forth by affidavit or other evidence

                                          7
Case: 20-10817         Document: 00515943397               Page: 8      Date Filed: 07/19/2021

                                          No. 20-10817

   specific facts, which[,] . . . taken [as] true,’ . . . support each element” of the
   standing analysis. Texas v. Rettig, 987 F.3d 518, 527–28 (5th Cir. 2021)
   (quoting Lujan, 504 U.S. at 561). A plaintiff must demonstrate standing for
   himself or herself, not just for others he or she professes to represent. See
   Hollingsworth v. Perry, 570 U.S. 693, 708 (2013). Finally, “[t]he court must
   evaluate . . . Article III standing for each claim; ‘standing is not dispensed in
   gross.’” Fontenot v. McCraw, 777 F.3d 741, 746 (5th Cir. 2015) (quoting
   Lewis, 518 U.S. at 358 n.6).
           Defendants argue that Plaintiffs do not have constitutional standing
   for their claims. We agree.
                                            i. Count I
           The district court determined that Plaintiffs lacked standing as to their
   live claim against AA and the PAAC. It first observed Plaintiffs’ theory of
   liability to be “that they could have earned better returns had [AA and the
   PAAC] selected a stable value fund instead of the [FCU Option][.]”8 The
   district court then reasoned that to realize those returns, Plaintiffs had to
   establish that they “would have chosen the stable value fund for their
   investments.” Since Plaintiffs did not present any evidence showing that
   they would have made such a choice, the district court concluded that “their
   alleged injuries are at best speculative, not concrete.”
           While we also conclude that Plaintiffs do not have standing regarding
   Count I, we do so for a different reason. Plaintiffs’ purported injury is income

           8
             As the district court noted, although “Plaintiffs have from time to time mentioned
   that a stable value fund is one alternative capital preservation investment to the [FCU
   Option][,] [t]hey have never identified any other such alternative. Their complaint names
   only a stable value fund as the alternative that should have been offered. And, in fact, their
   expert on the subject, [James] King, opines that a stable value fund should have been
   offered instead of the [FCU Option].”

                                                 8
Case: 20-10817         Document: 00515943397               Page: 9       Date Filed: 07/19/2021

                                           No. 20-10817

   that they would have received had AA and the PAAC not offered the FCU
   Option. Their expert has provided calculations for the returns that they
   would have earned had they not invested in the FCU Option but had instead
   placed their money in a stable value fund. This “lost investment income” is
   a “concrete” and redressable injury for the purposes of standing. See Spokeo,
   136 S. Ct. at 1547–48.9 That said, another question we must ask is whether
   Plaintiffs would have in fact invested in a stable value fund to earn the higher
   returns had AA and the PAAC never offered the FCU Option. In other
   words, the question is whether Plaintiffs have demonstrated that it is
   “substantially probable that the challenged acts of the defendant, not of some
   . . . third party[]” (including themselves) caused the injury. See Fla. Audubon
   Soc. v. Bentsen, 94 F.3d 658, 663 (D.C. Cir. 1996) (citations omitted). If
   anything, the record reveals that Plaintiffs would not have invested in a stable
   value fund in a counterfactual world since they did not place their money in
   one when given the opportunity to do so. As AA and the PAAC observe,
   “Plaintiffs could have submitted a declaration, affidavit, or testimony to the
   effect that they would have invested in a stable value fund absent the [FCU
   Option]. But they offered no such evidence. That is the end of the matter.”
           Even so, Plaintiffs rely on several cases that in theory demonstrate that
   they have standing. All of these decisions, though, are inapposite since they

           9
              AA and the PAAC’s reliance on Thole v. U.S. Bank N.A., 140 S. Ct. 1615 (2020),
   to illustrate that Plaintiffs have not suffered a cognizable injury is inapt. The plaintiffs in
   Thole lacked a “concrete stake in the lawsuit” because as “participants in a defined-benefit
   plan,” which guaranteed them a fixed payment each month no matter the plan’s value or
   the results of the plan fiduciaries’ investment decisions, they “possess[ed] no equitable or
   property interest in the plan.” Id. at 1619–20. In explaining why the plaintiffs lacked
   standing, the Court explicitly drew a distinction between a defined-benefit plan and “a
   defined-contribution plan, such as a 401(k),” in which “the retirees’ benefits are typically
   tied to the value of their accounts, and the benefits can turn on the plan fiduciaries’
   particular investment decisions.” Id. at 1618. Thus, on its own terms, Thole cannot be
   extended to the case at bar.

                                                 9
Case: 20-10817     Document: 00515943397            Page: 10    Date Filed: 07/19/2021

                                     No. 20-10817

   speak to the appropriate measure of damages, not to whether the plaintiff has
   suffered an injury caused by the defendant in the first instance. In reality, all
   but two of them do not address the issue of standing at all. The first outlier,
   Sweda v. University of Pennsylvania, notes that a plaintiff does not lack
   standing to sue simply because a retirement plan offers a “mix and range of
   investment options.” See 923 F.3d 320, 333–34 (3d Cir. 2019). But AA and
   the PAAC do not claim that Plaintiffs lack standing for this reason. The
   second, In re Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litig., also
   addresses a standing issue not relevant to this action, namely whether all class
   members had to be injured for there to be standing. See 335 F.R.D. 1, 16 n.12
   (E.D.N.Y. 2020).
          In sum, the district court correctly concluded that Plaintiffs lacked
   standing as to Count I.
                                     ii. Count II
          In contrast to Plaintiffs’ claims against AA and the PAAC, the district
   court determined that Plaintiffs had standing to sue FCU. It reasoned that
   Plaintiffs incurred a cognizable injury by receiving a lower interest rate in the
   FCU Option than they would have received had FCU not dealt with plan
   assets. Plaintiffs averred that FCU “used . . . plan assets to provide loans to
   [other] [FCU] members and to make other investments . . . for which it
   earned substantial income, which in turn permitted [FCU] to offer
   substantially higher interest rates on similar demand deposit accounts to
   other customers of [FCU] than it provided to Plan participants.” Plaintiffs’
   expert adduced the amount that they would have earned under those higher
   rates. Once again, Plaintiffs have shown that they were injured and that the
   injury is redressable. But, once more, Plaintiffs have failed to satisfy the
   element of causation. As FCU asserts, “[T]here is no connection between
   any alleged losses to the plan, [sic] and the statutory claim against [FCU],

                                          10
Case: 20-10817       Document: 00515943397               Page: 11     Date Filed: 07/19/2021

                                         No. 20-10817

   which is that [FCU] used plan assets for its own benefit.” Put another way,
   Plaintiffs have not supplied any evidence demonstrating that investors in
   FCU funds other than the FCU Option received higher interest rates
   generated by investments of Plan assets.
           Instead of offering new arguments in support of the district court’s
   conclusion that they had standing as to their claim against FCU, Plaintiffs
   simply rely on their prior assertions. But, for the reasons discussed above,
   those contentions lack merit. Furthermore, Plaintiffs raise an entirely
   separate theory of liability as to FCU. Hence, even if their standing
   arguments were meritorious as to Plaintiffs’ claim against AA and the PAAC,
   they would be inapplicable as to their claim against FCU. 10
           In short, the district court erred in concluding that Plaintiffs had
   standing with respect to their claim against FCU.
                                        *      *     *
           It is a “settled rule that, in reviewing the decision of a lower court, it
   must be affirmed if the result is correct although the lower court relied upon
   a wrong ground or gave a wrong reason.” NLRB v. Kentucky River Cmty.
   Care, Inc., 532 U.S. 706, 722 n.3 (2001) (citation and internal quotation marks
   omitted). Hence, we affirm the district court’s dismissal of both Count I and
   Count II. Given we lack jurisdiction over those claims, we do not reach the
   parties’ arguments as to the merits.

           10
             In so far as Plaintiffs attempt to shoehorn their expert’s conclusions as to the
   higher amount Plaintiffs should have received from FCU onto their arguments for standing
   to sue AA and the PAAC, that effort must fail for the same reason.

                                              11
Case: 20-10817        Document: 00515943397               Page: 12       Date Filed: 07/19/2021

                                          No. 20-10817

                                          B. Settlement
           Plaintiffs additionally argue that the district court abused its discretion
   in denying preliminary approval of the settlement. We disagree and affirm
   the district court on this issue.
           AA and the PAAC contend that the court should not even reach the
   merits of Plaintiffs’ argument because the settlement agreement did not
   “provid[e] for further appellate review of” the district court’s decision.
   Assuming Plaintiffs have not waived their right to appeal the settlement, we
   hold that Plaintiffs cannot now challenge the district court’s assessment of
   the settlement itself. Plaintiffs’ briefing did not argue that the district court
   somehow misapplied the governing legal standard. Instead, Plaintiffs suggest
   that the lower court abused its discretion by ultimately granting summary
   judgment in favor of Defendants after initially concluding during the
   settlement phase that Plaintiffs’ claims would likely succeed. Consequently,
   Plaintiffs have forfeited any arguments as to the propriety of the settlement.
   See United Paperworkers Int’l Union AFL-CIO, CLC v. Champion Int’l Corp.,
   908 F.2d 1252, 1255 (5th Cir. 1990).11
           However, even assuming Plaintiffs had not forfeited the argument, the
   argument is meritless. Before approving a settlement, a court “must be
   assured that the settlement secures an adequate advantage for the class in
   return for the surrender of litigation rights against the defendants.” In re
   Katrina Canal Breaches Litig., 628 F.3d 185, 195 (5th Cir. 2010) (citation

           11
               To the extent Plaintiffs challenged the district court’s rejection of the
   settlement’s adequacy for the first time during oral argument, that does not save them from
   forfeiture. An argument raised for the first time at oral argument is forfeited. See Vargas v.
   Lee, 317 F.3d 498, 503 n.6 (5th Cir. 2003); see also Ocwen Loan Servicing, L.L.C. v. Moss,
   628 F. App’x 327, 328 (5th Cir. 2016) (per curiam) (citing United Paperworkers and holding
   that an argument initially raised at oral argument is forfeited).

                                                12
Case: 20-10817        Document: 00515943397              Page: 13       Date Filed: 07/19/2021

                                          No. 20-10817

   omitted). Yet Plaintiffs did not provide the district court with the needed
   assurance. Before entering the settlement, the parties engaged the services of
   a mediator, the Honorable Faith S. Hochberg (Retired). While Judge
   Hochberg proposed that the parties agree to a settlement of $8.8 million in
   cash, she conditioned her recommendation on “[c]onfirmatory discovery
   necessary to obtain court approval.” The district court then provided
   Plaintiffs with multiple opportunities to gather and provide the court with
   information required to assess the adequacy of the settlement. In response,
   Plaintiffs provided two declarations from their counsel, John J. Nestico. Both
   declarations outlined the efforts counsel made to bolster Plaintiffs’ claims.
   But neither of the declarations cited to evidence demonstrating that $8.8
   million was sufficient. Determining that it had “received nothing” that
   would allay its concerns regarding the $46.2 to $79.2 million gap between the
   settlement amount and the claimed losses, the district court declined
   preliminary approval of the settlement. The district court did not abuse its
   discretion in doing so.12
           With respect to the argument Plaintiffs actually raised on appeal
   regarding the district court’s rejection of the settlement, we determine that
   it, too, is unavailing. As the district court had much less information about
   this case when it assessed the settlement than it did on summary judgment,

           12
               That the settlement also secured between $30 and $48 million in structural relief
   for Plaintiffs does not change this analysis. The settlement required AA “to enlist the
   services of an independent investment consultant to engage in a competitive process for
   the determination of a stable value option for the Plan on a going forward basis.” As
   Plaintiffs concede, this would have been “non-monetary” relief. Additionally, as Plaintiffs’
   counsel observed, the value of the structural relief was based on the amount Plaintiffs might
   earn in the future if they were to invest in a stable value fund rather than the FCU Option,
   not what they had lost in the past. For these reasons, the structural relief cannot be
   compared to the actual monetary losses that Plaintiffs purportedly suffered (and for which
   the $8.8 million was designed to compensate).

                                                13
Case: 20-10817        Document: 00515943397                Page: 14        Date Filed: 07/19/2021

                                           No. 20-10817

   the lower court’s divergent opinions as to the merits of Plaintiffs’ claims are
   not inherently inconsistent. See Bates v. Ford Motor Co., 174 F.3d 198, 1999
   WL 153017, at *3 (5th Cir. 1999) (unpublished) (rejecting the plaintiffs’
   argument that “summary judgment was improper because the district court
   should have approved class certification and the proposed settlement”). For
   this reason, Plaintiffs’ reliance upon Pilkington v. Cardinal Health, Inc., 516
   F.3d 1095 (9th Cir. 2008), is misplaced. In Pilkington, the parties agreed to
   settle the case the day before the district court granted the defendants’
   motions for summary judgment. Id. at 1099. The Ninth Circuit held that the
   district court should have first evaluated the settlement under Rule 23(e)
   before rendering summary judgment because “the parties [had] bound
   themselves to a settlement agreement subject only to court approval.” Id. at
   1100–02. In the case at bar, the district court assessed and declined to
   approve the parties’ settlement years before it granted summary judgment to
   Defendants. Pilkington therefore does not foreclose the district court’s
   actions here, and Plaintiffs even concede that the holding in that case “may
   not be directly applicable” to this one.13
           Put briefly, Plaintiffs have not demonstrated that the district court
   abused its discretion in denying approval of the settlement.
                                       IV. CONCLUSION
           For the foregoing reasons, the judgment of the district court is
   AFFIRMED in part, REVERSED in part, and VACATED in part. The

           13
              Plaintiffs also rely upon Cotton v. Hinton in support of their argument that the
   district court abused its discretion, which observed that “[p]articularly in class action suits,
   there is an overriding public interest in favor of settlement.” 559 F.2d 1326, 1331 (5th Cir.
   1977). That case, however, is even less apposite than Pilkington because it did not deal with
   the relationship between a summary judgment ruling and a settlement agreement.

                                                 14
Case: 20-10817     Document: 00515943397            Page: 15   Date Filed: 07/19/2021

                                     No. 20-10817

   case is REMANDED with instructions to DISMISS Plaintiffs’ claim
   against FCU, i.e., Count II, for lack of jurisdiction.

                                          15