901 F.3d 406
D.C. Cir.2018Background
- Delta Airlines filed for bankruptcy in 2005 and ceased pension contributions to the Delta Pilots Retirement Plan; PBGC and Delta agreed to terminate the Plan in 2006 after a large funding deficit.
- PBGC (the Corporation) assumed the role of statutory trustee and guarantor under Title IV of ERISA and paid guaranteed benefits while final determinations and appeals proceeded through 2013.
- Nearly 1,700 pilots sued PBGC alleging fiduciary breaches by PBGC as statutory trustee, asserting PBGC delayed distributions, mismanaged asset valuation/administration, and thereby captured post-termination investment gains.
- Pilots sought "appropriate equitable relief" under 29 U.S.C. § 1303(f)(1), including disgorgement of post-termination increases in plan asset value to remedy unjust enrichment.
- PBGC moved to dismiss, arguing 29 U.S.C. § 1344(c) assigns any post-termination increase or decrease in plan-asset value to PBGC, precluding disgorgement to participants; the district court denied dismissal and certified interlocutory appeal on four questions.
- The D.C. Circuit reversed: it held § 1344(c) unambiguously allocates post-termination gains to PBGC, so disgorgement of those gains to participants is not an available remedy; the court remanded to let the district court determine whether other remedies were sought.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can individuals bring fiduciary breach claims under § 1303(f) in addition to administrative review? | Lewis: § 1303(f) permits equitable fiduciary claims against PBGC. | PBGC: Title IV governs terminated-plan remedies and limits relief. | Not decided (court disposed on § 1344(c) grounds). |
| Can participants recover more than Title IV–defined benefits? | Lewis: "Appropriate equitable relief" includes monetary remedies like disgorgement beyond statutory benefits. | PBGC: § 1344(c) assigns post-termination asset changes to PBGC, barring such recovery. | Held against plaintiffs as to disgorgement of post-termination gains. |
| Can participants recover individual (rather than plan-wide) relief for fiduciary breach? | Lewis: Plaintiffs seek individual recovery of ill-gotten returns. | PBGC: Remedies limited by Title IV allocation rules. | Not decided (court resolved case by applying § 1344(c)). |
| Does § 1344(c) preclude disgorgement of post-termination investment gains? | Lewis: Fiduciary duty and equitable principles allow disgorgement despite § 1344(c). | PBGC: § 1344(c) unambiguously credits any post-termination increases to PBGC. | Held: § 1344(c) bars disgorgement; post-termination gains belong to PBGC. |
Key Cases Cited
- PBGC v. LTV Corp., 496 U.S. 633 (explaining PBGC role as guarantor under Title IV)
- Mertens v. Hewitt Assocs., 508 U.S. 248 (defining "equitable relief" historically available in equity)
- CIGNA Corp. v. Amara, 563 U.S. 421 (equity remedies can include monetary relief to prevent unjust enrichment in some ERISA contexts)
- Paulsen v. CNF Inc., 559 F.3d 1061 (post-termination allocation of asset changes to PBGC recognized)
- Pender v. Bank of Am. Corp., 788 F.3d 354 (discussing disgorgement as remedy under Title I in ongoing-plan context)
- Envtl. Def. v. Duke Energy Corp., 549 U.S. 561 (presumption that identical words in same statute have same meaning, subject to context)
- Util. Air Regulatory Grp. v. EPA, 573 U.S. 302 (context can overcome presumption of consistent statutory usage)
- Bennett v. Arkansas, 485 U.S. 395 (court should not create implied exceptions to clear statutory terms)
- Ali v. Federal Bureau of Prisons, 552 U.S. 214 (interpretive weight of expansive terms like "any")
- K Mart Corp. v. Cartier, Inc., 486 U.S. 281 (statutory interpretation requires reading particular language with the statute as a whole)