Renfro v. Unisys Corp.
671 F.3d 314
| 3rd Cir. | 2011Background
- ERISA 401(k) plan at issue; Unisys plan had 73 investment options including Fidelity mutual funds, commingled pools, and Unisys stock; Fidelity acted as a directed trustee under a trust agreement limiting its option-selection role; plaintiffs Renfro and Lustig allege fiduciary breaches in selecting/maintaining plan investments; district court dismissed Fidelity, dismissed the action as to adequacy of plan mix, and granted summary judgment for Unisys on safe-harbor grounds; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fidelity's fiduciary status over challenged conduct | Fidelity as directed trustee had control over investment options | Fidelity lacked discretion to select options per trust agreement | Fidelity not a fiduciary for option selection; affirmed dismissal on this point |
| Co-fiduciary liability of Fidelity under §1105(a) | Fidelity aided or concealed Unisys breach as co-fiduciary | Fidelity had no knowledge or participation in the breach | No §1105(a) liability; claims fail |
| Direct action under §1132(a)(3) against Fidelity | §1132(a)(3) authorizes direct equitable relief against fiduciaries | §1132(a)(3) does not authorize suits against nonfiduciaries who participate in fiduciary breaches | Section 1132(a)(3) does not authorize suit against Fidelity as nonfiduciary; affirmed |
| Plausibility of breach by Unisys in selecting plan options | Plan lacked a meaningful mix; unreasonable fees; implied imprudence in option selection | Plan offered a reasonable, diverse mix; fees disclosed; no plausible imprudence | Dismissal for failure to state a claim; plan mix deemed reasonable |
Key Cases Cited
- LaRue v. DeWolff, Boberg & Assocs., 552 U.S. 248 (U.S. 2008) (defined contribution plan expectations under ERISA)
- Mertens v. Hewitt Assocs., 508 U.S. 248 (U.S. 1993) (ERISA's balanced framework; fiduciary duties overview)
- Pegram v. Herdrich, 530 U.S. 211 (U.S. 2000) (fiduciary status and duties in ERISA context)
- In re Unisys Sav. Plan Litig. (Unisys I), 74 F.3d 420 (3d Cir. 1996) (fiduciary duties and 1104/1105 analysis in Unisys context)
- In re Unisys Sav. Plan Litig. (Unisys II), 173 F.3d 145 (3d Cir. 1999) (hypothetical prudent investor standard; duty to select investments evaluated)
- Hecker v. Deere & Co., 556 F.3d 575 (7th Cir. 2009) (pp. evaluating plan mix and perceived prudence at motion to dismiss)
- Braden v. Wal-Mart Stores, Inc., 588 F.3d 585 (8th Cir. 2009) (course-compare to Hecker; suitability of investment menu influence on plausibility)
- Reich v. Compton, 57 F.3d 270 (3d Cir. 1995) (assessing whether nonfiduciaries can be subject to ERISA suits based on participation in breaches)
- Jones v. Harris Assocs. L.P., 130 S.Ct. 1418 (U.S. 2010) (fundamental understanding of mutual funds and fiduciary duties under ERISA)