LOUIS GUIROLA, JR., District Judge.
The claims presented here were originally filed in two separate putative class action lawsuits seeking relief as a result of the underfunding of the Singing River Health System Employees' Retirement Plan and Trust ("the Plan") — Jones, et al. v. Singing River Health System, et al., 1:14cv447-LG-RHW, and Lowe v. Singing River Health System, et al., 1:15cv44-LG-RHW. In the interest of judicial economy, the Court entered an [1] Order severing the claims presented by the Jones plaintiffs against Transamerica Retirement Solutions Corporation and Lowe's claims against KPMG and Transamerica from claims against Singing River Health System and the Plan's trustees.
Lowe alleges that KPMG, the company that audited the annual financial statements of Singing River Health System (SRHS) and the Plan, either knew or should have known that SRHS had defaulted on its contributions to the Plan since 2009. She asserts that KPMG "allowed or did not correct statements that attributed the Trust's underfunding to returns on investments and changed actuarial assumptions." (Compl. 14, ECF No. 5.) She attempts to assert a breach of fiduciary duty and/or aiding and abetting breach of fiduciary duty claim against KPMG. KPMG filed the present Motion to Dismiss for Lack of Subject Matter Jurisdiction, alleging, inter alia, that Lowe lacks standing to pursue this lawsuit against KPMG because a special fiduciary now has exclusive authority to file claims on behalf of the Plan.
The Fifth Circuit has explained:
Stringer v. Whitley, 942 F.3d 715, 720 (5th Cir. 2019). As with standing, mootness implicates the Article III case-or-controversy requirement and is thus a jurisdictional matter. United States v. Heredia-Holguin, 823 F.3d 337, 340 (5th Cir. 2016) (en banc). "A case becomes moot when `[t]he requisite personal interest that must exist at the commencement of the litigation' ceases to exist because `interim relief or events have completely and irrevocably eradicated the effects of the alleged violation.'" Stringer v. Whitley, 942 F.3d 715, 724 (5th Cir. 2019) (quoting Renne v. Geary, 501 U.S. 312, 320 (1991)).
The parties appear to agree that the question of standing or mootness in this case is governed by trust law. Since Lowe is a beneficiary to the trust at issue and KPMG is a third party, Lowe may only maintain a lawsuit against KPMG if (a) she "is in possession, or entitled to immediate distribution, of the trust property involved; or (b) the trustee is unable, unavailable, unsuitable, or improperly failing to protect the beneficiary's interest." See Restatement (Third) of Trusts § 107 (2012); see also Miss. Code Ann. § 91-8-811 ("A trustee shall take reasonable steps to enforce claims of the trust [but a] trustee may abandon or assign any claim that it believes is unreasonable to enforce to one or more of the beneficiaries of the trust holding the claim.")
Lowe argues that she has standing to pursue this lawsuit because she alleged in her Complaint that the Plan's trustees breached their fiduciary duties. However, as KPMG correctly notes, Lowe's claims against those former trustees have been settled, and a special fiduciary was appointed to oversee the Plan. The special fiduciary has apparently not abandoned her duty to file lawsuits on behalf of the Plan as she has filed a lawsuit against KPMG in state court. The appointment of a special fiduciary has mooted Lowe's claims against KPMG, because only the special fiduciary has authority to maintain lawsuits on behalf of the Plan and Lowe is not entitled to immediate distribution of the trust property. As a result, KPMG's Motion to Dismiss for Lack of Jurisdiction must be granted.