Secretary of Labor v. Doyle
675 F.3d 187
| 3rd Cir. | 2012Background
- Secretary sued Doyle, Holloway, PCI, NP, PCMG, and others for ERISA fiduciary breaches related to the PITWU Health & Welfare Fund.
- Fund operated as a MEWA; PCI/NP marketed benefits through CBAs and diverted payments to non-claims, non-Plan uses.
- Doyle headed PCMG; Holloway was a Fund trustee and later resigned amid concerns about mismanagement.
- District Court entered judgment for Doyle and Holloway, prompting Secretary to appeal on fiduciary duties and plan asset issues.
- Court of appeals vacated and remanded for further factual findings on plan assets and fiduciary status.
- Regulatory scrutiny from multiple state insurance regulators found the scheme misrepresented as ERISA-exempt and not properly regulated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether payments collected were Plan assets under ERISA. | Secretary argues funds were Fund assets. | Doyle/Holloway contend payments were not Plan assets. | Remand required; assets must be identified to determine fiduciary status. |
| Doyle's fiduciary status via control of assets. | Doyle controlled Check 1/Check 2 funds as Plan assets. | Doyle asserts funds were not Plan assets or within his control as fiduciary. | On remand, determine which monies were assets and whether Doyle acted as fiduciary. |
| Holloway's fiduciary duties and knowledge of asset diversion. | Holloway failed to prevent diversion and maintain records. | Holloway did not breach duties given limited knowledge, actions taken, and resignation context. | Remand to assess plan-asset status and Holloway's duties; possible liability depending on findings. |
| What constitutes Plan assets in this MEWA context and applicable identification method. | Use ordinary property-law notions; assets include non-traditional items following case law. | Challenge to broad treatment of non-cash funds as Plan assets; rely on plan documents. | Court provides guidance; remand to apply proper asset identification. |
Key Cases Cited
- In re Mushroom Transp. Co., Inc., 382 F.3d 325 (3d Cir. 2004) (fiduciary status may attach to control over plan assets)
- Bd. of Trs. of Teamsters Local 863 Pension Fund v. Foodtown, Inc., 296 F.3d 164 (3d Cir. 2002) (trust law duties and fiduciary standards guiding ERISA claims)
- Glaziers & Glassworkers Union Local No. 252 Annuity Fund v. Newbridge Sec., 93 F.3d 1171 (3d Cir. 1996) (trust-law duties inform ERISA fiduciary duties)
- In re Lucent Death Benefits ERISA Litig., 541 F.3d 250 (3d Cir. 2008) (identify plan assets by consulting plan documents)
- Jackson v. United States, 555 U.S. 1163 (2009) (plan assets definition guided by ordinary notions of property rights)