Narrative Opinion Summary
In this case, labor union members involved with the Cement Masons' Negotiating Committee for Southern California filed a lawsuit against Roger Frommer, an attorney accused of mishandling employee retirement plans governed by ERISA. The plaintiffs claimed Frommer failed to prosecute lawsuits to collect delinquent employer contributions and was compensated for unperformed services. The district court dismissed the state fraud and ERISA claims, ruling that Frommer was not a fiduciary under ERISA, as he did not exercise authority over the plan assets. On appeal, the Ninth Circuit affirmed the dismissal, agreeing that Frommer's actions did not make him a fiduciary and thus not liable under ERISA section 409(a). However, the court recognized that Frommer, as a 'party in interest,' could face equitable claims under ERISA section 502(a)(3) for engaging in prohibited transactions. The appeals court partially affirmed and reversed the lower court's decision, allowing the plaintiffs to pursue equitable relief while denying damages under section 409(a) since Frommer was not a fiduciary. The case was remanded for further proceedings, with each party bearing its own costs on appeal.
Legal Issues Addressed
Equitable Relief under ERISA Section 502(a)(3)subscribe to see similar legal issues
Application: The court acknowledged that plaintiffs could seek equitable relief under ERISA Section 502(a)(3) against Frommer as a non-fiduciary involved in prohibited transactions.
Reasoning: Plaintiffs' request for equitable relief against the defendants suffices under federal notice pleading standards to support a claim under section 502(a)(3).
Fiduciary Status under ERISAsubscribe to see similar legal issues
Application: The court determined that Frommer was not a fiduciary under ERISA as he did not exercise authority beyond his professional functions.
Reasoning: The complaint did not allege that Frommer exercised such authority. Plaintiffs argued that Frommer's failure to collect employer contributions constituted a loss of plan assets under his control, suggesting he acted as a fiduciary.
Liability of Non-Fiduciaries under ERISA Section 409(a)subscribe to see similar legal issues
Application: The court held that non-fiduciaries, such as Frommer, cannot be held liable under ERISA Section 409(a) for breaches of fiduciary duty.
Reasoning: The court concluded that Congress intended to limit remedies to those explicitly stated in the law, indicating that non-fiduciaries cannot be sued under ERISA's section 409(a).
Prohibited Transactions and Parties in Interest under ERISAsubscribe to see similar legal issues
Application: Frommer, identified as a 'party in interest,' could be liable for engaging in prohibited transactions under ERISA Sections 406(a)(1) and 408(b).
Reasoning: Frommer, classified as a 'party in interest' under ERISA, can still be liable for engaging in prohibited transactions, including receiving excessive compensation and obtaining a loan from the Funds, which violate sections 406(a)(1) and 408(b).