MAX O. COGBURN JR., District Judge.
In the four years this action has been pending, the court has allowed plaintiffs three opportunities to amend their Complaint to address issues raised by defendants. Presently before the court is plaintiffs' Third Amended Complaint (#219).
While the court will not recite the entire procedural history of the case, the court will highlight the history relating to the
After the Third Amended Complaint was filed, defendants answered (see Answer #221 & Answer #248) and filed their second Motion for Summary Judgment on Statute of Limitations Grounds (#222) on December 29, 2010. In response to this motion, plaintiffs filed their "Motion for Relief Under Fed.R.Civ.P. 56(f)" (# 241) on January 18, 2011,
Plaintiffs are participants in the Bank of America 401(k) Plan (the "401(k) Plan"). While they have sued in their individual and representative capacities on behalf of plan participants, no motion to certify a class has been filed.
For the limited purposes of the pending motion, it appears undisputed that the 401(k) Plan provides plan participants the option to invest in both bank-affiliated and non-affiliated mutual funds. Plaintiffs claim that the defendants breached their fiduciary duties to the 401(k) Plan under ERISA by selecting bank-affiliated mutual funds as investment options. As made clear by plaintiffs in seeking leave to file
Brief in Support of Plaintiffs' Motion for Leave to Amend Complaint (# 208), at p. 12.
It appears undisputed that the 401(k) Plan is a "defined contribution plan" within the meaning of ERISA, TAC., at ¶ 22, that the CBC is plan administrator of the 401(k) Plan, id., at ¶ 25, and that the 401(k) Plan was created effective July 1, 2000, through the merger of the Bank-America 401(k) Plan and the NationsBank 401(k) Plan. Id., at ¶ 23. The 401Plan is a profit-sharing savings plan under which participating bank employees contribute a portion of their pre-tax earnings to the Plan. Those employee contributions are then matched in part by the bank or its affiliates. "The Bank of America 401(k) Plan, as amended effective July 1, 2000," Exhibit 1 to the Declaration of Stephen D. Terry (hereinafter "Terry Decl.") Plan participants, such as plaintiffs, direct the investment of their respective accounts among a menu of investment options identified in the formal Plan document. Terry Decl., Ex. 4, 2006 Plan Document at BOA-DAVID 00070-71. The CBC has authority to alter the number of investments options and to add or terminate specific funds in the 401(k) Plan. Terry Decl., Ex. 4, 2006 Plan Document at BOA-DAVID 00059.
In the late 1990s, the 401(k) Plan's investment lineup was modified to add several "Nations Funds," which were funds managed by NationsBank Corporation, which was Bank of America's predecessor and Plan sponsor prior to their merger. Declaration of David Andreasen (hereinafter "Andreasen Decl."), Ex. 1.
In 1999, a project team was formed by the CBC to evaluate various issues relating to the 401(k) Plan, including the Plan's selection and use of proprietary investment options, processes for paying Plan expenses, and Plan investment performance and fees. Terry Decl., Ex. 10-11. Findings were presented to the CBC at its December 6, 1999 meeting, including findings that the Plan's procedures for selecting and monitoring investment options complied with fiduciary standards, that the performance and expenses of the mutual funds in the 401(k) Plan's lineup were reasonable, and that the administrative expenses paid by the Plan complied with all regulatory requirements. Id., Ex. 11. After considering the project team's report, the CBC agreed that the investment management and performance results of the Plan mutual funds were competitive. Id., Ex. 10.
It is equally undisputed that as of July 1, 2000,
Plaintiff Elena M. David participated in the Plan since at least the mid-1990s. Barrett Decl., Ex. 10, Deposition of Elena M. David (hereinafter "David Dep.") at 34. Her quarterly account statements show that, as of December 31, 2000, her Plan account was allocated among the Nations Large Cap Stock Index Fund, the Stable Capital Fund, and Bank of America Common Stock. Barrett Decl., Ex. 4 at DAVID-00383. David invested solely in those three options until taking a distribution of her account in 2005. Barrett Decl., Ex. 3 quarterly Plan account statements; Ex. 10, David Dep. at pp. 24, 43-44. She testified that she recalled that the fees associated with the mutual funds in the Plan had increased following the Bank of America merger with Nations Bank in 2000, and that her decision to file this lawsuit related to those fees. Barrett Decl., Ex. 10 at pp. 31, 62-63.
Plaintiff Arleen Stach became a Plan participant after her previous employer merged into Bank of America and her former employer's plan was merged into the Plan. Barrett Decl., Ex. 11, Deposition of Arleen J. Stach (hereinafter "Stach Dep.") at pp. 26, 33, 58, & 59. Her quarterly Plan account statements show that, as of December 31, 2000, her Plan account was allocated among the Nations Large Cap Stock Index Fund, the Stable Capital Fund, and Bank of America stock. Barrett Decl., Ex. 6 at STACH00292. According to subsequent account statements, Stach kept her account in these same investment options through at least September, 2009. Barrett Decl., Ex. 7, quarterly Plan account statements.
Plaintiff Victor Hernandez enrolled in the Plan in 2000. Barrett Decl. Ex. 12, Deposition of Victor Hernandez (hereinafter "Hernandez Dep."), at p. 58. As of March 31, 2003, Hernandez had his Plan account invested solely in Bank of America stock. Declaration of Susan Kelly (hereinafter "Kelly Decl."), Ex. 1, quarterly Plan account statements, at BOA-DAVID2-00138738-40. Account statements show that his Plan account has also been invested in the Stable Capital Fund, the Nations International Equity Fund, the Nations SmallCap Equity Index Fund, the Fidelity Diversified International Fund, and the Fidelity Real Estate Investment Fund. Id., and Barrett Decl., Ex. 5, quarterly Plan account statements.
It is undisputed that since at least 2000, the 401(k) Plan has provided plaintiffs and all Plan participants with disclosures about the Plan, including the funds included in the Plan and related fees. In accordance with 29 U.S.C. § 1024(b), participants in the Plan receive copies of the Summary Plan Description (hereinafter "SPD") when they become eligible to participate in the Plan. Terry Decl., ¶ 15. The SPD was periodically circulated to all eligible employees, including in 2000, 2002, 2005 and 2006. Terry Decl., ¶ 16. Since at least May 2000, the summary plan description has consistently set forth a description of each of the funds. Terry Decl., Ex. 5.
Of particular relevance to this action, the May 15, 2000, SPD informs participants that they could obtain a "prospectus that contains more complete information, including charges and expenses, for any of the 10 Nations Funds by contacting the Personnel Center." Terry Decl., Ex. 5 at BOA-DAVID-UR-00736094. The 2000 SPD, as well as later SPDs, also advised participants that "Banc of America Advisors, Inc., an affiliate of Bank of America, N.A., performs investment advisory and other services for Nations Funds, and receives fees for such services." Terry Decl., Ex. 5 at BOA-DAVID-UR-00736094. As to fees, the 2000 SPD provided, as follows:
Terry Decl., Ex. 5, at BOA-DAVID-UR-00736094-95 (emphasis added).
Plaintiff David testified that she reviewed the SPD, including the description of investment options, when she established the initial investment directions for her Plan account, and recalled receiving periodic updates to the SPD. Barrett Decl., Ex. 10, David Dep., at pp. 37-39. Plaintiff Stach testified that she received the Associate Handbook through the office mail "every couple of years." Barrett Decl., Ex. 11, Stach Dep. at 84-86.
Additional information was also provided to Plan participants in other ways. Plaintiffs David and Stach produced account statements for their Plan accounts from 2000 and 2001. Those Plan statements disclosed the receipt of fees for services rendered to the bank-affiliated funds and also compared the performance of such fund options, net of fees, to identified benchmarks. Barrett Decl., Ex. 4 at DAVID00388, David Quarterly Plan Statement Dec. 31, 2000; Ex. 7 at STACH00265, Stach Quarterly Plan Statement Dec. 31, 2001. In addition, Plaintiffs David and Stach were able to produce their copies of booklets from 2000 and 2002, entitled "Retirement Plans Investment Options." Those booklets reported the performance of the Plan's investment options and disclosed the fee relationship between Bank of America and the bank-affiliated funds. Barrett Decl., Ex. 8, Retirement
Plaintiff Hernandez could not specifically recall during his deposition the communications he received in connection with his Plan account, but testified that documents describing his benefits under the Plan were available to him and specifically acknowledged receiving quarterly account statements. Barrett Decl., Ex. 12, Hernandez Dep., at 80-81, 99, 101-103, 105-106.
In the TAC, plaintiffs identify a number of letters and draft communications that they contend were misleading, as follows:
TAC, ¶ 80.
It is undisputed that in early 2000, Bank of America received letters from two former bank employees, David MacKenzie and Susan Kirk (who are mentioned in paragraph 80 of the TAC), challenging the decision of the Plan fiduciaries to discontinue the Plan's investments in certain collective investment trusts and transfer those assets to bank-affiliated mutual funds. Barrett Decl., Ex. 16, Letter from David G. MacKenzie to Bank of America, Trustee of the 401(k) Plan, dated April 14, 2000, MACKENZIE 000003; Ex. 17, Letter from MacKenzie to Secretary, Employee Benefit Administrative Committee, dated April 24, 2000, MACKENZIE 000006; Ex. 18, Letter from Susan Kirk to Art Colas, dated July 10, 2000, MACKENZIE 000018. Importantly, all of those letters predate August 2000 and are evidence that fellow plan participants had access to sufficient information to actually challenge the inclusion of bank affiliated funds in the Plan.
Mr. MacKenzie, citing his extensive experience "in the fiduciary field" states in
In-house counsel for the bank, Art Colas, responded to Mr. MacKenzie's and Ms. Kirk's letters, expressing his belief that the CBC's investment selection process was reasonable and in accordance with applicable standards of fiduciary conduct. Barrett Decl., Ex. 19, Letter from Arthur H. Colas, Jr. to David H. MacKenzie, dated May 4, 2000, MACKENZIE 000008-9; Ex. 20, Letter from Colas to Kirk, dated August 11, 2000, MACKENZIE 000020-21; Ex. 23, Deposition of Arthur H. Colas, Jr. (hereinafter "Colas Tr.") at p. 101.
After receiving an initial response from Mr. Colas, Mr. MacKenzie wrote to Dana Farber, a member of the Bank's Corporate Benefits Department, reasserting his view that the Plan's fiduciaries were engaging in "Self-Dealing," and stating, "[t]his is a flat violation of its Fiduciary duty!" Mr. MacKenzie further complained that "the market rate for running an index fund is substantially lower tha[n] the 35 basis points we are being charged." Barrett Decl., Ex. 21, Letter from MacKenzie to Farber, dated May 18, 2000, MACKENZIE 000010-13. 37. Mr. Colas responded to Mr. MacKenzie's letter to Dana Farber, noting in part that "[t]he Committee is, and has been for years, advised by competent outside ERISA counsel, and duties of plan fiduciaries are discussed at its meetings." Barrett Decl., Ex. 22, Letter from Colas to MacKenzie, dated June 13, 2000, MACKENZIE 000015-17. Mr. Colas testified during discovery that it was his understanding that the law firm Kennedy Covington advised the CBC on its Plan-related fiduciary duties. Barrett Decl., Ex. 23, Colas Tr. at 99, 127-128; Ex. 2, Bank of America 401(k) Plan 2000 Form 5500, Schedule C, at BOA-DAVID2-00138927-94.
Mr. Colas also stated that Mr. MacKenzie's concerns and his response had been discussed with CBC member Owen "Bob" Shell, a defendant herein. Barrett Decl., Ex 22. Mr. Colas understood that someone at the bank had discussed the issues raised by Mr. MacKenzie with Defendant Shell, but does not recall contacting him personally. Instead, Mr. Colas believes he would have contacted Defendant Shell through an intermediary. Barrett Decl., Ex. 23, Colas Tr. at p. 57. It is undisputed that Defendant Shell provided no commentary on Mr. Colas's written response to Mr. MacKenzie's letter. Id., at pp. 102-103. Defendant Shell does not currently recall discussing Mr. MacKenzie's concerns with anyone. Barrett Decl., Ex. 28, Deposition of Owen G. Shell, Jr. at p. 182.
Although Ms. Kirk represented in her letter to Mr. Colas that Mr. MacKenzie had "been contacted by other Plan participants," no participants had in fact contacted Mr. MacKenzie regarding issues addressed in his and Ms. Kirk's letters. Barrett Decl., Ex. 15, MacKenzie Tr. at 193-194. Mr. MacKenzie did not discuss his letters to the bank with any Plan participants other than Ms. Kirk. Id., at pp. 117-118, 187-188, 195-196.
On November 27, 2000, a group of employees in a department within the bank wrote to bank employee Lester Ranson, complaining about the Plan's investment lineup. Barrett Decl., Ex. 24, Letter from Michael Johnston, et al., to Ranson.
During July 2000, the bank's communications department created a draft document entitled "Leader Talking Points Regarding The One-Time Transfer," which addressed potential questions relating to a one-time transfer of assets from the Plan to the bank's pension plan.
The bank's communications department also created a document entitled "Key Messages: External Media," dated May 15, 2000. Barrett Decl., Ex. 29, Dugan Tr. at 65:10-12; Ex. 31, BOA-DAVID-UR-00733963-00733979. Nothing in the document indicates that it was prepared for, or shared with, any particular external media; rather, the document bears the legend "For Internal Use Only: Do Not Distribute." Id.
Also produced in discovery were a draft set of "Q & As," which address changes to the Bank of America retirement plans, including the 401(k) Plan. Barrett Decl., Ex. 29, Dugan Tr. at 53-54; Ex. 32, BOA-DAVID-00257099-00257100. The document does not indicate its intended audience or whether it was in fact used to communicate with Plan participants. Id.
Defendants have moved for summary judgment based on the bar of the statute of limitations. Rule 56(a), Federal Rules of Civil Procedure, provides:
Fed.R.Civ.P. 56(a). The rule goes on to provide procedures for plaintiffs to use in responding to a Motion for Summary Judgment:
Fed.R.Civ.P. 56(c).
On a motion for summary judgment, the moving party has the burden of production to show that there are no genuine issues for trial. Upon the moving party's meeting that burden, the non-moving party has the burden of persuasion to establish that there is a genuine issue for trial.
Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted; emphasis in the original) (quoting Fed.R.Civ.P. 56). There must be more than just a factual dispute; the fact in question must be material and readily identifiable by the substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
By reviewing substantive law, the court may determine what matters constitute material facts. Anderson, supra. "Only disputes over facts that might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. 2505. A dispute about a material fact is "genuine" only if the evidence is such that "a reasonable jury could return a verdict for the nonmoving party." Id. The court must credit factual disputes in favor of the party resisting summary judgment and draw inferences favorable to that party if the inferences are reasonable, however improbable they may seem. Cole v. Cole, 633 F.2d 1083, 1092 (4th Cir.1980). Affidavits filed in support of a Motion for Summary Judgment are to be used to determine whether issues of fact exist, not to decide the issues themselves. United States ex rel. Jones v. Rundle, 453 F.2d 147 (3d Cir.1971). When resolution of issues of fact depends upon a determination of credibility, summary judgment is improper. Davis v. Zahradnick, 600 F.2d 458 (4th Cir.1979).
In determining whether a genuine issue of material fact exists, the admissible evidence of the non-moving party must be believed and all justifiable inferences must be drawn in his or her favor. Anderson, supra, at 255, 106 S.Ct. 2505. In the end, the question posed by a summary judgment motion is whether the evidence "is so one-sided that one party must prevail as a matter of law." Id., at 252, 106 S.Ct. 2505.
The Employee Retirement Income Security Act of 1974 (hereinafter "ERISA") does not include a general statute of limitations for bringing benefits claims and federal courts must look to and apply the most analogous state statute of limitations. Board of Regents v. Tomanio, 446 U.S. 478, 483-84, 100 S.Ct. 1790, 64 L.Ed.2d 440 (1980); Miles v. New York State Teamsters Conference, 698 F.2d 593, 598 (2d Cir.), cert. denied, 464 U.S. 829, 104 S.Ct. 105, 78 L.Ed.2d 108 (1983). Unlike benefits claims, ERISA does contain a statute of limitations and a statute of repose for bringing claims of breach of fiduciary duty against plan fiduciaries:
29 U.S.C. § 1113. The statute of repose serves as "an absolute barrier" to actions brought more than six years after the alleged affirmative breach or violation. Radford v. Gen. Dynamics Corp., 151 F.3d 396, 400 (5th Cir.1998); accord Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197, 202-05 (3d Cir.2006).
In order to determine when the statute accrues, the court will look to the substance of each claim of breach of fiduciary duty, grouping claims when appropriate. It is undisputed that plaintiff filed this action August 7, 2006, and that the bank-affiliated funds, except the Columbia Quality Plus Bond Fund, were all added to the Plan lineup more than six years before this action was filed.
In Counts I and III, plaintiffs assert violations of ERISA's prohibited transaction rules. Specifically, plaintiffs allege in Count I that the CBC defendants "caused" the Plan to engage in prohibited transactions in violation of 29 U.S.C. § 1106. TAC, ¶¶ 42-60. In Count III, plaintiffs allege that the bank participated in and abetted those prohibited transactions. TAC ¶¶ 121-25. Reading such allegations in a light most favorable to them, plaintiffs contend that when defendants selected bank affiliated funds for inclusion in the 401(k) plan, such inclusion violated ERISA.
In light of plaintiffs' Rule 56(d) response, and after independent review by this court, the undersigned determines that Judge Howell properly allowed plaintiffs to take extensive discovery on Section 1113 issues. Review of the undisputed facts produced as a result of such efforts reveals that all-but-one of the bank-affiliated funds were added more than six years before plaintiffs filed this action.
In apparent recognition that these claims are time barred, plaintiffs attempt to avoid the absolute bar of Section 1113(1)(A) by arguing that their claims are really "failure to remove" claims, i.e., that the statute of repose did not run because the plan fiduciaries had a continuing obligation to remove these allegedly offending funds from the plan. See 29 U.S.C. § 1113(1)(B). Put another way, plaintiffs are contending that Counts I and III are timely filed prohibited transaction claims because defendants failed to remove or replace such funds with other funds that would be within the statute of repose. At the hearing, defendants clarified their contention and argued that the statute of repose did not run, and still has not run, because contributions are allocated to such offending funds every month and the fiduciaries are continually obliged to remove such funds at their regular board meetings.
While ERISA fiduciaries are in fact obliged to monitor funds contained in the Plan lineup for material changes, the court can find no continuing obligation to remove, revisit, or reconsider funds based on allegedly improper initial selection. If that were the case, the limitations imposed by Section 1113(1)(A) would be meaningless and expose present Plan fiduciaries to liability for decisions made by their predecessors —decisions which may have been made decades before and as to which institutional memory may no longer exist. Indeed, such a determination would turn Section 1113(1)(A) on its head, making Section 1113(1)(B)'s open-ended period of repose for failure to correct omissions also applicable to failure to correct affirmative acts, which are clearly controlled by Section 1113(1)(A)'s close-ended period of repose.
Not only does such argument run counter to logic and Section 1113's temporal limitations, such argument has been rejected by other courts. While only persuasive in this court, in Figas v. Wells Fargo & Co., Civ. No. 08-4546 (D.Minn. Apr. 6, 2010),
Id., at 5. In another persuasive decision, which addressed identical claims also brought by plaintiffs' counsel herein, Leber v. Citigroup, Inc., 2010 WL 935442 (S.D.N.Y. Mar. 16, 2010),
Id., at *7.
Plaintiffs argue that each time the board meets and each time funds are placed into an allegedly prohibited fund constitutes a separate or continuing violation. However, the conduct of which plaintiffs complain in Counts I and III is the initial decision to invest in bank-affiliated funds, actions for which must be brought within the period of repose as provided in Section 1113(1)(A) and cannot be recast as a failure to correct an omission under Section
Having considered the Motion for Summary Judgment on these claims, and finding that no genuine issues of material fact exist, the court will dismiss Counts I and III as time barred.
In Counts II, IV, and V, plaintiffs allege violations of ERISA's fiduciary duty of prudence and loyalty, which are also time barred. As discussed above, plaintiffs have conceded that all but one of the bank-affiliated mutual funds in question were added to the Plan more than six years before the filing of their action.
In responding to the Motion for Summary Judgment, plaintiffs contend that the limitations period is tolled based on ERISA's "fraud and concealment exception," and have again argued that: (1) the claim is really one for failure to remove the funds from the Plan lineup rather than an unlawful initial selection claim; and (2) that they have standing to pursue a claim as to the Columbia Quality Plus Bond Fund, the only bank-affiliated fund added to the Plan's lineup within the six-year period immediately preceding the filing of the initial Complaint.
Under the "fraud or concealment" exception to the general limitation periods found in Section 1113, an action based on an alleged breach or violation that is obscured through a defendant's fraud or concealment must be brought within "six years after the date of discovery of such breach or violation." 29 U.S.C. § 1113. The burden is on plaintiffs to come forward with some evidence that the named defendants obscured the cause of action through fraud or concealment. Browning v. Tiger's Eye Benefits Consulting, 313 Fed.Appx. 656, 663 (4th Cir.2009). As the undisputed facts discussed above show, there simply is no evidence that any of the committee defendants engaged in any conduct that obscured or in any way hindered these plaintiffs from realizing facts upon which a cause of action could have conceivably been brought. While the court notes defendants' strong objections to the court's allowance and reopening of discovery, independent review by this court reveals that it was the allowance of additional discovery that has led to this court to the inescapable conclusion that not only were facts not obscured, other Plan participants actually perceived the claim, wrote grievance letters to the bank, and even threatened suit over the Plan's decision to include bank affiliated funds in 1999-2000.
Further, the fact that such complaints may have generated correspondence in defense of the initial selection, or that the bank may have generated "talking points" concerning the legality of including such bank-affiliated funds, cannot be considered "fraud" or an attempt to "conceal" an unlawful transaction. The only tie between any of the challenged communications and any named committee member is the fact that someone discussed with Defendant Shell the response to Mr. McKenzie's letter of grievance. TAC, ¶ 84. There is no evidence that Defendant Shell authored,
Even assuming that all the challenged materials were attributable to the committee defendants, there is absolutely no evidence that such documents were generated with an intent to defraud or mislead Plan participants. In sum, each of the allegedly fraudulent documents provides that inclusion of bank-affiliated funds was both prudent and legal. These are statements one would expect to be found in any prospectus or disclosure; however, plaintiffs contend that they are untrue and that they form the basis of their fraud or concealment contention under the exception to Section 1113. While it is true that the Court of Appeals for the Fourth Circuit has not directly addressed the requirement of intent in such context, close consideration of the decisions of the Fourth Circuit indicates to this court that not only would plaintiffs be required to present evidence that the statements were untrue, but that defendants knew such were untrue and caused them to be made with an intent to deceive Plan participants. The Fourth Circuit has held that plaintiffs must show that defendants "engaged in a course of conduct designed to conceal evidence of their alleged wrongdoing." Browning, 313 Fed.Appx. at 663 (citation omitted; emphasis added). The court finds the phrase "course of conduct designed" to be synonymous with a requirement of "intent." To read Browning or Section 1113 otherwise would make any conceivable decision of Plan fiduciaries "obscurable" by any due diligence statements contained in Plan brochures, even when those statements are made in good faith and with no intent to deceive. Such a reading would not only eviscerate Section 1113(1) & (2) and cause the Section 1113 exception to swallow the rule, it would discourage plan fiduciaries from including such important information in Plan documents.
Finally, even if plaintiffs had come forward with evidence that the challenged statements were both untrue and published with an intent to deceive or obscure, plaintiffs have not shown that the facts upon which their claims are based were in any way obscured by such documents, that they lulled them into inaction, or in any manner impacted plaintiffs' ability to recognize or pursue their claims. See Browning, supra. Indeed, the evidence produced indicates that plaintiffs received Plan SPDs, quarterly statements, and were advised that they could request more detailed disclosures concerning the bank-affiliated funds. There is absolutely no evidence that any of the plaintiffs were exposed, influenced, or even received any of the allegedly fraudulent documents. There simply is no evidence such documents had any impact on plaintiffs' ability to recognize and pursue their claims.
Finding that no genuine issue of fact remain, the court will grant defendants' Motion for Summary Judgment and dismiss Count IV as time barred.
New to the TAC is Count II, in which plaintiffs allege that failure to remove bank-affiliated funds within the limitations period is actionable, which is a slightly different take on a continuing violation claim. Plaintiffs do not claim that the bank-affiliated funds became imprudent during the period through fund performance or increased fees; rather, they contend that the funds were improperly selected. Count II is, therefore, not a claim of improper monitoring of the fund, but a claim based on a non-existent duty to revisit initial selection of a fund to determine if it was a prohibited transaction. Tibble v. Edison Intern., 2010 WL 2757153 at
In Count V, plaintiffs contend that defendants breached their fiduciary duties when they selected the Columbia Quality Plus Bond, which is also a bank affiliated fund. Unlike the other bank-affiliated funds at issue, this fund was selected by defendants within the six year period before this action was filed August 7, 2006. However, it is undisputed that none of the named plaintiffs participated in this particular fund. Conceding ERISA standing, defendants have moved for summary judgment contending that plaintiffs lack Article III standing to bring such claim.
Early in this action, this court determined that participants suing under ERISA have the burden of showing that they personally suffered some actual or threatened injury as a result of the allegedly unlawful conduct complained of under ERISA. David v. Alphin, 2008 WL 5244483, at *5-8 (W.D.N.C. July 23, 2008). In pertinent part, Judge Howell held, as follows:
Id., at **5-6. Not only is such decision "law of the case,"
As to Count V, plaintiffs lack standing under Article III of the United States Constitution because they have not shown that they have "personally ... suffered some actual or threatened injury as a result of the putatively illegal conduct" of the defendants. Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979). Summary judgment will be granted and such Count will, therefore, be dismissed for lack of Article III standing.
In addition to the allegations discussed earlier concerning the allegedly fraudulent documents, plaintiffs allege in Count VII that those same documents support an independent breach of fiduciary duty claim based on misrepresentation. Unlike the initial selection claims and their analogues, this new breach of fiduciary duty claim is based on conduct that occurred after selection but before the statute of repose would other prohibit its litigation.
This claim was, however, brought for the first time in 2010 and concerns conduct of persons not named in the original Complaint that allegedly occurred more than six years before November 19, 2010. In order for this claim to not be barred under the statute of repose, 29 U.S.C. § 1113(1), plaintiffs must show that such claim properly relates back to the filing of the original Complaint in 2006.
In conducting such review, the court has first considered the language of Rule 15(c), which provides in relevant part as follows:
Fed.R.Civ.P. 15(c)(1). In applying Rule 15(c), a trial court must first determine whether a factual nexus exists between the amendment to the Complaint and the original Complaint. Grattan v. Burnett, 710 F.2d 160, 163 (4th Cir.1983). If such a nexus exists, the
Id. Consistent with its decision in Grattan, the Court of Appeals for the Fourth Circuit later held that the "relation back" doctrine does not apply where a new claim challenges events that are separated by "time and type," from those addressed in the original complaint. United States v. Pittman, 209 F.3d 314, 318 (4th Cir.2000) ("new claims do not relate back to [the] original claims because they arise from separate occurrences of `both time and type'") (citation omitted).
Review of the amendments in comparison with the original Complaint reveals no reference in the original Complaint to any of the communications forming the basis of Count VII. Further, it is undisputed that the communications underlying Count VII were prepared by persons other than those who selected the funds at issue in the original Complaint and at different times. Further, Count VII concerns a distinct transaction from those asserted in the original Complaint.
Based on such threshold review, the court finds no nexus as Count VII challenges actions that are separated by "time and type" from those addressed in the original complaint by persons other than those whose conduct is challenged in the original Complaint. Further, plaintiffs' contention that they did not discover such claim earlier based on "fraud or concealment" carries no further than it did as to Count IV inasmuch as plaintiffs have failed to present any evidence that anyone intended to deceive Plan participants. Defendants' Motion for Summary Judgment will be granted as to this claim as, without relation back, this claim is also time barred.
In Count VI, plaintiffs contend that the bank concealed the committee defendants' alleged fiduciary breach in the selection of bank affiliated funds and that it is therefore liable as a co-fiduciary for the committee defendants' conduct. TAC ¶¶ 145-45. For the reasons discussed in relationship to Count VII, and this claim is also untimely for the same reasons.
