Janese v. Fay
692 F.3d 221
2d Cir.2012Background
- Derivation: ERISA fiduciary duties in a multi-employer pension plan; plaintiffs sue present/former trustees for alleged misdeeds and plan amendments that depleted assets.
- Procedural posture: district court dismissed Counts I-V as time-barred; Counts VII-IX remained; motion to amend denied; cross-appeal dismissed as unnecessary.
- Key parties: plaintiffs are participants/beneficiaries; defendants are trustees and plan managers grouped by service periods; two plan managers are Santo Scrufari and his son Russell.
- Allegations: counts include improper weighting of benefits, fund misappropriation, concealment through mislabeling withdrawals and failure to monitor Scrufari.
- Issue framing for appeal: whether trustees act as fiduciaries when amending the plan and whether counts are time-barred; court also considers amendment denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fiduciary status of trustees when amending the plan | Chambless/Siskind control; amendments are fiduciary acts | Supreme Court decisions abrogate Chambless and Siskind; amendments are not fiduciary actions | Counts I-V properly dismissed; Chambless/Siskind abrogated for multi-employer plans |
| Timeliness of Counts VII-IX under ERISA §1113 | Fraud/ concealment tolling applies; discovery of breach ongoing | Claims time-barred by §1113(1) unless tolling applies | Issue of timeliness remains fact-dependent; remanded for proceedings on whether tolling applies |
| District Court’s denial of leave to amend | Amendment should be freely granted to cure pleading deficiencies | Judgment bars further amendment; late amendment impermissible | Denied amendment upheld; but remand allows future amendment as to surviving claims |
Key Cases Cited
- Chambless v. Masters, Mates & Pilots Pension Plan, 772 F.2d 1032 (2d Cir. 1985) (Multi-employer plan amendments treated as fiduciary acts (abrogated later))
- Siskind v. Sperry Retirement Program, Unisys, 47 F.3d 498 (2d Cir. 1995) (Distinguishing multi-employer plan amendments as fiduciary actions (abrogated))
- Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 (S. Ct. 1995) (Employer/plan sponsors may modify plans; not fiduciaries for amendments (single-employer context))
- Lockheed Corp. v. Spink, 517 U.S. 882 (S. Ct. 1996) (Extends Curtiss-Wright rule to pension plans; plan sponsors do not act as fiduciaries when modifying terms)
- Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 (S. Ct. 1999) (Affirms that plan sponsors who alter terms are not fiduciaries; applies to contributory/noncontributory plans)