Taylor v. KeyCorp
680 F.3d 609
6th Cir.2012Background
- Taylor and Klamert filed an ERISA class action against KeyCorp and fiduciaries for alleged fiduciary breaches in KeyCorp stock investments in the Plan.
- The district court consolidated the actions and defined the class as all participants with KeyCorp stock in their Plan accounts during 12/31/2006 to present.
- Defendants moved to dismiss under Rule 12(b)(6); the district court denied, then moved to dismiss for lack of subject-matter jurisdiction arguing no actual injury.
- Taylor argued she suffered injury from alleged artificial inflation; the district court found she benefited from the inflation by selling stock at inflated prices.
- Taylor’s trading history shows she sold most KeyCorp stock before the alleged peak and achieved a net profit; she later sold additional shares bought via the matching program.
- Lobasso moved to intervene after final judgment; the district court denied intervention, and plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for ERISA claims | Taylor asserts injury or traceable loss from fiduciary breaches. | No actual injury; Taylor benefited from inflated stock prices. | Taylor lacks Article III standing; no injury when gains offset potential losses. |
| Damages measure under ERISA for artificial inflation | Out-of-pocket loss or alternative-investment theory could show injury. | Alternative-investment damages not appropriate in this context. | Out-of-pocket loss is correct; alternative-investment measure rejected. |
| Netting of gains and losses from a single breach | Not argued separately; seek overall loss from breach. | Gains may be offset by losses from same breach; netting required. | Gains and losses must be netted; Taylor shows no injury after netting. |
| Intervention after notice of appeal | Lobasso sought to intervene before or after appeal; timing unclear. | Post-appeal intervention is improper; district court divested of jurisdiction. | District court correctly denied intervention; notice of appeal divested jurisdiction. |
Key Cases Cited
- Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (Supreme Court, 2005) (inflated price alone does not equal injury without sale at a loss)
- In re Boston Scientific Corp. ERISA Litig., 254 F.R.D. 24 (D. Mass. 2008) (netting damages from one breach in ERISA cases)
- Brown v. Medtronic, Inc., 628 F.3d 451 (8th Cir. 2010) (standing when inflation results in no actual injury)
- Warren v. Soc'y Nat'l Bank, 905 F.2d 975 (6th Cir. 1990) (out-of-pocket or alternative damages considerations in ERISA context)
- LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248 (Supreme Court, 2008) (footnote recognizing lost profits concept in ERISA; not controlling for artificial inflation cases)
- Griggs v. Provident Consumer Disc. Co., 459 U.S. 56 (Supreme Court, 1982) (jurisdictional divestment upon filing notice of appeal)