Eric Tiblier v. Paul Dlabal
743 F.3d 1004
| 5th Cir. | 2014Background
- Dr. Eric Tiblier’s cardiology practice established two pension plans (cash-balance and 401(k)), with Tiblier and his wife/trustee contributing most funds.
- Investment advisor representative Paul Dlabal, affiliated with CACH, provided investment recommendations to Plaintiffs under an Investment Management Agreement naming CACH as “Advisor” and Dlabal as “Representative.”
- Plaintiffs invested $100,000 of plan assets in Adageo Energy Partners corporate bonds based on Dlabal’s recommendation; Adageo later stopped interest payments.
- Dlabal received a commission from a third-party broker/dealer (disclosed) rather than a fee paid directly by the Plans; he did not execute trades himself and CACH was identified in the Agreement as the party with discretionary authority.
- Plaintiffs sued under multiple theories, but on appeal challenged only the district court’s ERISA fiduciary-duty ruling; the Fifth Circuit considered whether Dlabal was an ERISA fiduciary with respect to the Adageo transaction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dlabal exercised discretionary authority or control over the Adageo investment (29 U.S.C. §1002(21)(A)(i)) | Dlabal had de facto control of the accounts and exercised discretionary power | Plaintiffs (trustees) made the ultimate decision; Agreement gave discretionary authority to CACH, not Dlabal; Dlabal did not execute trades | Not fiduciary under (i); no exercised authority or control over the specific transaction |
| Whether Dlabal rendered investment advice for a fee with respect to plan assets (29 U.S.C. §1002(21)(A)(ii)) | Dlabal received compensation for advising on the investment, qualifying as a fee | Commission came from a third party, not the Plans; under binding precedent that is not a “fee” for §1002(21)(A)(ii) purposes | Not fiduciary under (ii); third-party commission not a plan-paid fee |
| Whether Dlabal had discretionary responsibility in plan administration (29 U.S.C. §1002(21)(A)(iii)) | Plaintiffs alleged broad fiduciary role generally | Administration was handled by an independent third-party administrator; Dlabal had no administrative role | Not fiduciary under (iii); undisputed no administrative authority |
| Whether written disclosures saved Dlabal from ERISA liability if he were a fiduciary | Disclosures insufficient to negate strict ERISA duties | District court relied on disclosures; Fifth Circuit resolved case on fiduciary status instead | Court did not reach adequacy of disclosures because Dlabal was not an ERISA fiduciary |
Key Cases Cited
- Coliseum Square Ass’n, Inc. v. Jackson, 465 F.3d 215 (5th Cir. 2006) (standard of review for summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Sup. Ct. 1986) (materiality and genuine dispute standard for summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574 (Sup. Ct. 1986) (view facts in light most favorable to nonmovant)
- Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (Sup. Ct. 2000) (limits on weighing credibility at summary judgment)
- Schloegel v. Boswell, 994 F.2d 266 (5th Cir. 1993) (authority/control requirement under ERISA §1002(21)(A)(i))
- Wolin v. Smith Barney Inc., 83 F.3d 847 (7th Cir. 1996) (investment adviser must have influence approaching control to be ERISA fiduciary)
- American Federation of Unions Local 102 Health & Welfare Fund v. Equitable Life Assurance Soc’y of the U.S., 841 F.2d 658 (5th Cir. 1988) (third-party commissions not a fee under §1002(21)(A)(ii))
- Milofsky v. Am. Airlines, Inc., 404 F.3d 338 (5th Cir. 2005) (familiar rule: fiduciary status must be shown with respect to the specific transaction in dispute)