Massaro v. Palladino, 19 F.4th 197

Background

The Laborers’ Local No. 91 Pension and Welfare Funds are multiemployer ERISA plans governed by nearly identical trust agreements with a six-member board: three Employer Trustees and three Union Trustees.
Pre‑2019 trust provisions allowed amendment by majority generally, but required a unanimous vote to change the “manner in which Trustees are appointed.”
On January 9, 2019, Union Trustees caused a 4–2 board vote to adopt amendments adding objective qualifications for trustees and a petition provision requiring unanimous board approval to seat nominees who did not meet those qualifications.
Employer Trustees sued, alleging the amendments were procedurally invalid (they changed the appointment “manner”) and that the Union Trustees breached ERISA fiduciary duties (29 U.S.C. § 1104(a)(1)(D)) by passing the amendments without unanimity; they sought declaratory relief, injunctions, and fees.
The district court found the amendments did change the appointment manner and granted summary judgment for the Employer Trustees on the fiduciary‑breach claim, but denied attorneys’ fees and declined to hold the Union Trustees in contempt as its order was not sufficiently clear.
The Second Circuit agreed the amendments were procedurally invalid under the trust agreements but vacated summary judgment because trustees are not acting in a fiduciary capacity under ERISA when they amend a plan; the case was remanded and other appeals (fees, contempt, injunctive relief) were dismissed as moot.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did the 2019 amendments change the “manner” of trustee appointment under the Trust Agreements?	Employer: Yes — added qualifications and a petition/unanimity rule that alter appointment procedures.	Union: No — the changes merely add criteria and can be severed; majority passage was valid.	Held: Yes — the Petition Provision and qualifications altered the procedural "manner," so under the Agreements unanimity was required.
Did the Union Trustees breach ERISA fiduciary duties by passing the amendments without unanimous vote (§404(a)(1)(D))?	Employer: Passing a procedurally invalid amendment violated the duty to act in accordance with plan documents.	Union: Amending the plan is a settlor function, not a fiduciary act; Janese/Lockheed foreclose fiduciary liability for amendments.	Held: No — even if procedurally invalid, passing plan amendments is a settlor act, not a fiduciary function; fiduciary‑breach claim fails.
Could the Employer Trustees obtain attorneys’ fees under ERISA after summary judgment?	Employer: They prevailed and are entitled to fees.	Union: District court correctly denied fees because Union’s arguments were colorable.	Held: Dismissed as moot on appeal because the grant of summary judgment was vacated (no longer a merits victory).
Was contempt or injunctive relief appropriate to force seating of employer appointees?	Employer: Yes — Union Trustees continued to block seating despite district court ruling.	Union: District court order wasn’t clear/unambiguous; they were enforcing pre‑2019 provisions.	Held: Contempt and injunctive appeals dismissed as moot after vacatur of the underlying summary judgment; district court had denied contempt for lack of clarity.

Key Cases Cited

Pegram v. Herdrich, 530 U.S. 211 (2000) (fiduciary‑status inquiry requires asking whether defendant was performing a fiduciary function when taking challenged action)
Lockheed Corp. v. Spink, 517 U.S. 882 (1996) (amending plan terms is a settlor act and does not trigger ERISA fiduciary duties)
Hughes Aircraft Co. v. Jacobson, 525 U.S. 432 (1999) (Lockheed’s settlor/fiduciary distinction applies regardless of plan type)
Janese v. Fay, 692 F.3d 221 (2d Cir. 2012) (trustees of multiemployer plans do not act as fiduciaries when amending plan terms)
Curtiss‑Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995) (ERISA requires plans to provide amendment procedures and courts may enforce compliance with those procedures)