DORIS SUE ALLEN, DONNA S. LUCAS, JONATHAN G. AXELROD, DANA KELLEN, HEDY L. ANSELMAN, TIMOTHY R. GARRETT, WARREN J. PEPICELLI, JOHN A. BOARDMAN, Plaintiffs-Appellants, v. CREDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK AG, MORGAN STANLEY, MORGAN STANLEY & CO. LLC, MORGAN STANLEY CAPITAL SERVICES LLC, CREDIT SUISSE AG, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BARCLAYS PLC, BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., CITIBANK, N.A., CITIGROUP INC., THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., JPMORGAN CHASE BANK, N.A., JPMORGAN CHASE & CO., THE ROYAL BANK OF SCOTLAND PLC, THE ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES INC., UBS AG, UBS SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA, INC., UBS INVESTMENT BANK, UBS INVESTMENT BANK, AMERICAS, UBS GROUP AG, MERRILL LYNCH CAPITAL SERVICES, INC., BARCLAYS GROUP US INC., Defendants-Appellees, CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (EUROPE) LIMITED, DOES, 1–30, DOES, 1–40, BNP PARIBAS SECURITIES CORP., CITICORP, CITIGROUP GLOBAL MARKETS INC., BNP PRIME BROKERAGE INC., Defendants.
Nos. 16-3327-cv (L), 16-3571-cv (CON)
United States Court of Appeals for the Second Circuit
DECIDED: JULY 10, 2018
AUGUST TERM 2016; ARGUED: JUNE 22, 2017
DAVID G. JANUSZEWSKI (Herbert S. Washer, Elai Katz, Jason M. Hall, Sheila C. Ramesh, on the brief), Cahill Gordon & Reindel LLP, New York, New York, for Defendants-Appellees Credit Suisse AG and Credit Suisse Securities (USA) LLC.
Adam S. Hakki, Richard F. Schwed, Jeffrey J. Resetarits, Shearman & Sterling LLP, New York, New York, for Defendants-Appellees Bank of America Corporation, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Merrill Lynch Capital Services, Inc.
David C. Esseks, Laura R. Hall, Rebecca Delfiner, Allen & Overy LLP, New York, New York; John Terzaken, Allen & Overy LLP, Washington, D.C., for Defendants-Appellees BNP Paribas Group and BNP Paribas North America, Inc., and Defendants BNP Paribas Securities Corp. and BNP Prime Brokerage, Inc.
Andrew A. Ruffino, Covington & Burling LLP, New York, New York; Alan M. Wiseman, Thomas A. Isaacson, Andrew D. Lazerow, Julie M. Edmond, Jamie A. Heine, Covington & Burling LLP, Washington, D.C., for Defendants-Appellees Citibank, N.A. and Citigroup Inc.
Joseph Serino, Jr., Eric F. Leon, Latham & Watkins LLP, New York, New York, for Defendant-Appellee Deutsche Bank AG.
Thomas J. Moloney, George S. Cary, Sue S. Guan, Cleary Gottlieb Steen & Hamilton LLP, New York, New York, for Defendants-Appellees The Goldman Sachs Group, Inc. and Goldman, Sachs & Co.
Gregory T. Casamento, Locke Lord LLP, New York, New York; Roger B. Cowie, Locke Lord LLP, Dallas, Texas; J. Matthew Goodin, Julia C. Webb, Locke Lord LLP, Chicago, Illinois, for Defendants-Appellees HSBC Holdings PLC, HSBC Bank PLC, HSBC North America Holdings Inc., and HSBC Bank USA, N.A.
Peter E. Greene, Boris Bershteyn, Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York; Stephen L. Ratner, Russell L. Hirschhorn, Proskauer Rose LLP, New York, New York, for Defendants-Appellees JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A.
Jonathan M. Moses, Bradley R. Wilson, Wachtell, Lipton, Rosen & Katz, New York, New York, for Defendants-Appellees Morgan Stanley, Morgan Stanley & Co. LLC, and Morgan Stanley Capital Services LLC.
Joel M. Cohen, Melissa C. King, Davis Polk & Wardwell LLP, New York, New York, for Defendants-Appellees The Royal Bank of Scotland PLC, The Royal Bank of Scotland Group PLC, and RBS Securities Inc.
D. Jarrett Arp, Melanie L. Katsur, Gibson Dunn & Crutcher LLP, Washington, D.C.; Mark A. Kirsch, Indraneel Sur, Gibson Dunn & Crutcher LLP, New York, New York, for Defendants-Appellees UBS AG, UBS Group AG, UBS Securities LLC, UBS Investment Bank, and UBS Investment Bank, Americas.
OPINION
Before: JACOBS, LEVAL, RAGGI, Circuit Judges
On appeal from a judgment entered in the United States District Court for the Southern District of New York (Schofield, J.), dismissing plaintiffs’ ERISA complaint for failure to state claims for which relief can be granted, see
AFFIRMED.
REENA RAGGI, Circuit Judge:
In this civil action under the Employee Retirement Income Security Act of 1974 (“ERISA“),
In challenging dismissal, plaintiffs argue that defendants acquired functional fiduciary status under ERISA by exercising control over the disposition of Plan assets. Specifically, plaintiffs contend that defendants manipulated the benchmark rates to which the subject FX transactions were tied, effectively allowing them to determine their own compensation for each transaction. Moreover, on appeal, plaintiffs recast their alternative party-in-interest claim, urging that it, too, is supported by defendants’ acquisition of ERISA functional fiduciary status with regard to the subject transactions. Defendants respond that the subject transactions were ordinary FX transactions between arms’ length counterparties and, as such, did not give rise to functional fiduciary status. Defendants emphasize that they had no influence over the Plans’ decisions to enter into the transactions, which were executed pursuant to written instructions negotiated between defendants and the Plans’ investment managers. Defendants submit that these instructions, which dictated their compensation and the terms of the transactions’ execution, could not confer sufficient control over the disposition of Plan assets to make them fiduciaries, regardless of their alleged misconduct.
In appealing dismissal, as well as the district court‘s denial of their request for adjournment and leave to amend, plaintiffs fault the district court for imposing a novel contract-evidence requirement for identifying ERISA functional fiduciary status. On de novo review of the challenged dismissal, we reject plaintiffs’ argument and reach the same conclusion as the district court, i.e., that plaintiffs fail to state plausible ERISA claims because the facts alleged do not show that defendants exercised the control over Plan assets necessary to establish ERISA functional fiduciary status. Because we further identify no abuse of discretion in the district court‘s denial of adjournment or leave to file a fourth amended complaint, we affirm the challenged judgments in all respects.
BACKGROUND
I. Factual Background
This ERISA action challenges the conduct of twelve banks and their affiliates in
The FX market is the world‘s largest and most actively traded financial market, with defendants holding a combined global market share of 84%. Indeed, as of 2013, defendants acted as counterparties in approximately 98% of United States spot transactions in the FX market.
By way of background, trading in the FX market has a seller exchanging one currency that it holds for another currency that it wishes to acquire. A customer contacts a dealer bank, which provides a “bid,” i.e., the price at which the customer can sell the currency it holds, and an “ask,” i.e., the price at which the customer can purchase the currency it desires. The difference between these prices is the “bid/ask spread,” which forms the basis for the dealer bank‘s compensation. In an untainted market, competition for customers’ orders serves to narrow bid/ask spreads.
A “spot transaction” exchanges a sum of currency at a settled exchange rate on a value date that is within two business days of the transaction. The most basic spot transaction is an order for immediate execution by which a customer purchases or sells currency at the quoted price. Another type of spot transaction, sometimes called a “benchmark transaction,” is executed on the basis of a daily fixing rate (i.e., a benchmark), which is a published exchange rate for a pair of currencies that is calculated by various third parties at a daily specified time. One of the most commonly used rates for benchmark transactions is the WM/Reuters “4:00 p.m. fix,” which is published each day at 4:00 p.m. London time. Fixing rates are presumably determined automatically and anonymously using the median price of actual FX transactions in the 30 seconds before and after a certain time (the “fixing window“). When arranging a benchmark transaction, the dealer guarantees execution at the fixing rate, or at a rate determined by reference to the fixing rate, and derives its compensation based on an agreed-upon markup.
ERISA Plans often trade currency to settle their purchases and sales of foreign securities, or to repatriate dividends, interest, and redemptions that are paid in foreign currencies, rather than as a mode of investment. Thus, the investment managers who invested assets on behalf of plaintiffs’ Plans “authorized FX [t]ransactions with Plan assets when [the managers‘] investment strategies for a Plan required the exchange of one currency for another.” App‘x 523, ¶ 218. The Plans’ managers would “arrange[] with [d]efendant banks to conduct [an] FX transaction[],” id., ¶ 219, which the banks would then execute pursuant to a direction or written authorization from the managers, each of whom was “an independent pension plan fiduciary,” id. at 470, ¶ 75 n.28.
Plaintiffs here allege that defendants took advantage of their dominant positions in both the wholesale and retail FX markets3 to capitalize on their knowledge of customers’ order flows as well as to collude
First, defendants individually used or shared customer orders and trading positions to devise strategies for trading in and around the benchmarks. By exchanging information about net customer orders, defendants were able to ascertain likely directional movement of the fixing rate, enabling them to trade so as to amplify that movement. Defendants allegedly employed the following tactics to this purpose: (a) they “cleared the decks” of contrary trade orders sufficiently in advance of the fixing window to eliminate or, at least, diminish the effect of such orders on the fixing rate, id. at 451, ¶ 13; (b) they matched or “netted out” customers’ buy and sell orders to
prevent contrary orders from affecting the fixing rate, id., ¶ 14; (c) they amassed large proprietary currency positions that they traded just before or during the fixing window, see id., ¶ 15; (d) certain defendants sold positions before the fixing window or failed to fill, or delayed filling, orders to manipulate the fixing rate, see id., ¶ 16; (e) defendants broke up large orders into smaller trades, timing them relative to the fixing window to increase their effect on fixing rate calculations, see id., ¶ 17; and (f) they placed orders with each other before the fix to create the appearance of increased trading in the desired direction, a practice known as “paint[ing] the screen,” whereupon they would reverse the trades after the fixing window closed, id. at 452, ¶ 19.
Second, defendants independently front-ran market-moving customer orders by trading proprietary currency positions before executing significant trades, buying before the customer‘s order increased the fixing rate or selling before that order decreased the fixing rate.
Third, one defendant bank, Barclays, implanted a mechanism in its electronic trading platform to give itself the functional equivalent of an option contract on any currency trade, in that the platform rejected orders where the market was moving to the customer‘s benefit during an artificial hold period, but executed orders where the market was neutral or moving to Barclays‘s benefit.
Plaintiffs further allege that, separate from benchmark manipulation, defendants coordinated the bid/ask spread for various currency pairs, effectively eliminating competition and fixing prices. Moreover, defendants quoted customers different bid/ask spreads based on what they understood a customer was buying or selling, and imposed undisclosed markups or markdowns on the price FX traders quoted to FX sales employees. Defendants also manipulated limit and stop orders5 at levels above the limit order price to earn a greater spread or markup with their execution.
II. Procedural History
Plaintiffs filed their initial complaint in this action on June 3, 2015. They filed their
The Second Amended Complaint pleads nine claims. Claims I and VI allege defendants’ breach of fiduciary duties of prudence and loyalty in violation of
violation of
On May 19, 2016, three of the defendant banks and their affiliates (“Group One Defendants“)7 moved to dismiss the Second Amended Complaint for lack of subject matter jurisdiction, see
Meanwhile, the district court had granted preliminary approval to settlements involving the remaining nine defendant banks and their affiliates (“Group Two Defendants“) in the related FOREX antitrust litigation, and had enjoined further prosecution of this action against those defendants because plaintiffs’ ERISA Plans were members of the settling classes.8 Thus, on June 1, 2016, while
the Group One Defendants’ motion to dismiss was pending, the district court ordered plaintiffs to file a third amended complaint removing allegations of collusive activity by the Group Two Defendants in order to conform with the preliminary FOREX antitrust litigation settlement. The Third Amended Complaint, filed on July 15, 2016, incorporated all allegations against the Group One Defendants asserted in the Second Amended Complaint. As such, the parties agreed that no new briefing was necessary for the district court to rule on the pending motion to dismiss.
On August 23, 2016, the district court dismissed the complaint against the Group
On September 9, 2016, however, plaintiffs requested a 60-day adjournment to allow them to consider further amendment, positing that there “may be . . . existing contracts” to support their claims. App‘x 433–34. The district court denied the request, observing that the complaint had already been amended several times and that
plaintiffs had not proffered adequate justification for further amendment or delay. Instead, the district court granted plaintiffs’ alternative request, to which the Group Two Defendants consented, to file a joint stipulation of dismissal of any outstanding claims. Thus, on September 20, 2016, the district court so-ordered a stipulation from the parties for dismissal of all claims against those defendants.
This timely appeal followed.
DISCUSSION
On appeal, plaintiffs primarily challenge the district court‘s determination that the defendant banks were not functional fiduciaries under ERISA, an error plaintiffs maintain requires reversal of the dismissal of their ERISA fiduciary breach claims and non-fiduciary ERISA party-in-interest claims.10 In any event, plaintiffs maintain that the district court erred in denying them an adjournment and leave to file a fourth amended complaint.
We review de novo the dismissal of a complaint pursuant to
the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “[B]ald assertions and conclusions of law will not suffice” to avoid dismissal, Spool v. World Child Int‘l Adoption Agency, 520 F.3d 178, 183 (2d Cir. 2008) (internal quotation marks omitted), nor will factual “allegations that are wholly conclusory,” Krys v. Pigott, 749 F.3d 117, 128 (2d Cir. 2014).
I. Fiduciary Duty Claims
With the exception of Claim V, which is discussed in Part II, all claims asserted in the Second Amended Complaint require a showing that defendants engaged in conduct breaching an alleged ERISA fiduciary duty. See
“The definition of ‘fiduciary’ under ERISA focuses on the exercise, as well as the possession, of authority or control” over a pension plan‘s assets, without regard to the title of the person exercising such control. Blatt v. Marshall & Lassman, 812 F.2d 810, 812–13 (2d Cir. 1987); accord Bouboulis v. Transp. Workers Union of Am., 442 F.3d 55, 64–65 (2d Cir. 2006). Specifically, under ERISA, even if a person is not a named fiduciary of an ERISA plan,11 it can be a de facto fiduciary if it “exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets.”
involved monetary assets of plaintiffs’ Plans.13 Thus, the determinative question is whether plaintiffs pleaded facts sufficient to demonstrate defendants’ control or authority over these assets. Like the district court, we conclude that plaintiffs did not.
Our analysis begins with the basic proposition, applicable in both the ERISA context and more generally, that “a relationship of trust is established when one acquires possession of another‘s property with the understanding that it is to be used for the owner‘s benefit, and in these
control. See Bouboulis v. Transp. Workers Union of Am., 442 F.3d at 63–64. The principle is not, however, without limit. An entity “must exercise the requisite degree of control and discretion to be held liable” for breach of fiduciary duty. Geller v. Cty. Line Auto Sales, Inc., 86 F.3d 18, 21 (2d Cir. 1996); see Bell v. Pfizer, Inc., 626 F.3d 66, 74 (2d Cir. 2010) (identifying examples of conduct not implicating fiduciary duty).
Plaintiffs argue that insofar as the defendant banks fraudulently manipulated benchmark rates to maximize the profit they reaped from each FX transaction, they exercised a sufficient degree of control over the disposition of the Plans’ assets plausibly to be denominated ERISA functional fiduciaries. The argument fails to persuade for a combination of reasons. To begin, even assuming the alleged manipulation of FX transactions, as well as an attendant increase in costs to the Plans, one factor weighing against the conclusion that the defendant banks controlled the Plans’ assets is that the transactions at issue were initiated not by the banks but at the discretion of the Plans’ independent investment managers. Thus, this case is not akin to Bricklayers & Allied Craftworkers Local 2, Albany, N.Y. Pension Fund v. Moulton Masonry & Const., LLC, 779 F.3d 182, 189 (2d Cir. 2015), in which we identified as an ERISA functional fiduciary a party who determined which of the corporate defendant‘s creditors to pay, exercised control over money owed to the plans at issue, and failed to remit to those plans assets under his control. Nor is it akin to LoPresti v. Terwilliger, 126 F.3d 34, 40 (2d Cir. 1997), wherein we identified as an ERISA functional fiduciary a defendant who determined which creditors would be paid from a company account on which he was a signatory and which commingled general assets and employee plan contributions. Rather, the relationship here was “salesmanship,” with defendants “matching the customer‘s desires“—as conveyed by their investment managers—“with available inventory,” but otherwise lacking “authority to exercise control unilaterally over a portion of a plan‘s assets.” Farm King Supply, Inc. Integrated Profit Sharing & Tr. v. Edward D. Jones & Co., 884 F.2d 288, 292 (7th Cir. 1989); cf. United States v. Litvak, 889 F.3d 56, 61 (2d Cir. 2018) (explaining that, in context of arms’ length, over-the-counter transactions in RMBS bond market, broker-dealer “acts solely in its own interest as a principal,” is not agent for its counterparties, and “owes them no special or fiduciary duty“). Such arms’ length dealings do not admit an inference that the banks controlled disposition of the Plans’ assets so as thereby to be deemed ERISA functional fiduciaries of the Plans.
No different conclusion is warranted by plaintiffs’ characterization of defendants as service providers. That characterization, which defendants dispute, usually applies to accountants, lawyers, and investment advisors, and derives from their contracts or agreements with ERISA plans. As this court has observed,
[w]hen a person who has no relationship to an ERISA plan is negotiating a contract with that plan, he has no authority over or responsibility to the plan and presumably is unable to exercise any control over the trustees’ decision whether or not, and on what terms, to enter into an agreement with him. Such a person is not an ERISA fiduciary with respect to the terms of the agreement for his compensation. . . . On the other hand, after a person has entered into an agreement with an ERISA-covered plan, the agreement may give it such control over factors that determine the actual amount of its compensation that the person thereby becomes an ERISA fiduciary with respect to that compensation.
F.H. Krear & Co. v. Nineteen Named Trustees, 810 F.2d 1250, 1259 (2d Cir. 1987).
No allegations here indicate that defendants were able to exercise any control over the Plans’ trustees’ or investment managers’ decisions to enter into FX transactions with defendants. See id. Nor do any allegations suggest that agreements stating the managers’ instructions for execution of the FX transactions gave defendants “such control over factors that determine the actual amount of [their] compensation.” Id.14 Indeed, plaintiffs conceded at oral argument that defendants would not be fiduciaries if they followed the Plans’ investment managers’ instructions in executing the transactions at issue. See McCaffree Fin. Corp. v. Principal Life Ins. Co., 811 F.3d 998, 1003 (8th Cir. 2016) (collecting cases recognizing that “service provider‘s adherence to its agreement with a plan administrator does
not implicate any fiduciary duty where the parties negotiated and agreed to the terms of that agreement in an arm‘s-length bargaining process“). Plaintiffs do not allege defendants’ violation of any specific instructions.
Insofar as plaintiffs rely on allegations of fraud in defendants’ conduct of FX transactions to support their fiduciary claims, this court, as well as sister circuits, have held that wrongdoing in performing non-fiduciary services does not transform the alleged wrongdoer into a fiduciary. See Geller v. Cty. Line Auto Sales, Inc., 86 F.3d at 19–21 (holding that employer who performed only ministerial functions for plan was not transformed into fiduciary by fraud in carrying out his functions that resulted in some dissipation of plan assets); see also Rutledge v. Seyfarth, Shaw, Fairweather & Geraldson, 201 F.3d 1212, 1220 (9th Cir. 2000) (holding that law firm‘s alleged overcharge for traditional attorney services did not make it ERISA fiduciary); Reich v. Lancaster, 55 F.3d 1034, 1049 (5th Cir. 1995) (stating that, in absence of “actual decision making power,” “even miscreant professionals . . . who provide necessary services to ERISA plans” are not automatically fiduciaries); Pappas v. Buck Consultants, Inc., 923 F.2d 531, 538 (7th Cir. 1991) (rejecting argument that consultants become ERISA fiduciaries by “perform[ing] professional functions in a tortious manner, regardless of what capacity they are acting in when their tortious deeds occur“). Thus, while defendants’ alleged fraudulent exploitation of vulnerabilities within the system for calculating benchmark rates could raise other legal concerns—whether in tort, contract, etc.—we have no reason to consider that possibility on this appeal. We here conclude only that the alleged wrongdoing did
Plaintiffs nevertheless maintain that the district court erred in failing to cite and apply the functional fiduciary standard referenced in United States v. Glick, 142 F.3d 520 (2d Cir. 1998). The argument does not persuade. Plaintiffs acknowledge that Glick, a criminal sentencing appeal, merely restates the statutory standard, which, as we have already observed supra at 18–20, asks whether the funds involved were Plan assets and whether defendants had any authority or control over those assets. See United States v. Glick, 142 F.3d at 527 (citing
Moreover, Glick does not support plaintiffs’ urged attribution of functional fiduciary status in this case. It cautioned that,
the mere deduction of an agent‘s commission from welfare fund assets does not, in itself, create a fiduciary relationship between the agent and the fund. The fiduciary relationship in this case [was] created because the agent exercised unhampered discretion in setting the commission rate. Conversely, an agent with a contractually-established commission rate is not, without other indicia, a fiduciary to the plan.
United States v. Glick, 142 F.3d at 528. The facts pleaded here do not admit an inference that defendants “exercised unhampered discretion” in establishing their compensation for the FX transactions at issue. Id. Even assuming that defendants’ alleged market manipulations allowed them to secure higher compensation for the FX transactions they conducted than a free market would have indicated, the scheme nevertheless depended on so many different persons and manipulations as to preclude an inference that defendants had an unfettered ability to dictate their compensation for each transaction. Moreover, such an inference is belied by the fact, already noted, that the Plans’ independent investment managers initiated the FX transactions at issue and provided instructions for their execution, which themselves informed defendants’ compensation.
Accordingly, because the complaint fails plausibly to allege that defendants exercised the control over the disposition of Plan assets necessary to make them ERISA functional fiduciaries, we affirm dismissal of plaintiffs’ breach of fiduciary duty claims (Claims I through IV and Claims VI through IX).
II. Party-In-Interest Claim
On appeal, plaintiffs tie the fate of their party-in-interest claim (Claim V) to that of their fiduciary claims by arguing that the former is predicated on a recognition of ERISA functional fiduciary status as to at least some of the defendant banks and their affiliates. Conceding that their party-in-interest claim, which is premised on violations of
For the reasons
III. Denial of Adjournment and Leave To Amend
The district court denied plaintiffs’ September 9, 2016 request for a 60-day adjournment to conduct further investigation and, potentially, to amend their complaint, explaining that plaintiffs had amended their complaint “repeatedly,” and had “submitted nothing in support of the application, and nothing to suggest that a further amendment would be anything but futile.” App‘x 436. We review denials either of adjournment or of leave to amend for abuse of
discretion, see TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d Cir. 2014); Farias v. Instructional Sys., Inc., 259 F.3d 91, 99–100 (2d Cir. 2001), unless “denial was based on an interpretation of law,” such as futility, in which case our review is de novo, Pyskaty v. Wide World of Cars, LLC, 856 F.3d 216, 224 (2d Cir. 2017) (internal quotation marks omitted).
Plaintiffs argue that it was legal error for the district court to conclude that further amendment would be futile in light of their counsel‘s professed belief that further investigation “may” reveal “existing contracts between Defendants and the ERISA plans” that would show “an ongoing contractual relationship between any Plan and any Defendant[] with respect to FX transactions” or “indicia of [defendants‘] control over Plan assets.” App‘x 434 (internal quotation marks omitted). They maintain that, “[l]ogically, adding allegations of such contracts would remedy what the district court found to be a fatal deficiency” of contract evidence. Appellant Br. at 52.
The argument fails because the district court did not impose a contract-evidence requirement only to conclude that an amendment pleading contract evidence would be futile. Rather, read in context, the district court‘s futility statement is properly understood to reference plaintiffs’ speculative suggestion that they could identify further contracts within the requested adjournment time and, thus, the futility of adjournment. In reaching that conclusion, the district court highlighted plaintiffs’ failure to support their motion. Indeed, plaintiffs’ application only speculates, based on their counsel‘s unspecified “experience with previous cases,” that there “may be . . . existing contracts” supporting further amendment. App‘x 434.
Nowhere, even on this appeal, do plaintiffs explain what those contracts might show that would warrant amendment. See TechnoMarine SA v. Giftports, Inc., 758 F.3d at 505 (“A plaintiff need not be given leave to amend if it fails to specify either to the district court or to the court of appeals how amendment would cure the pleading deficiencies in its complaint.“). Nor do they proffer any excuse for their lack of diligence in searching for such contracts earlier,
On this record, we identify neither legal error nor abuse of discretion in the district court‘s denial of adjournment in anticipation of further amendment, and, therefore, affirm the challenged judgment.
CONCLUSION
To summarize, we conclude as follows:
- Plaintiffs fail to allege facts showing that the defendant banks and their affiliates exercised the requisite level of control over the disposition of Plan assets so as to warrant their identification as ERISA functional fiduciaries with respect to the FX transactions at issue.
- Because plaintiffs here pursue their party-in-interest claim not in the alternative to, but in reliance on, their functional fiduciary theory, the claim necessarily fails for lack of the requisite proof of control.
- The district court neither committed legal error nor abused its discretion in denying plaintiffs an adjournment to conduct further investigation in anticipation of amending their complaint for a fourth time.
Accordingly, the judgments of dismissal are AFFIRMED.