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Clark v. Feder

September 13, 2010

DENISE M. CLARK, PLAINTIFF,
v.
FEDER, SEMO & BARD, P.C., ET AL., DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Denise Clark seeks reconsideration of the Court's March 22, 2010 Memorandum Opinion and Order granting in part and denying in part summary judgment to the defendants in this action -- the law firm Feder, Semo & Bard ("Feder Semo"), the Feder Semo Retirement Plan and Trust ("Retirement Plan" or "Plan"), and two former trustees of the Retirement Plan, Joseph Semo and Howard Bard. See Pl.'s Mem. in Supp. of Mot. for Reconsideration ("Pl.'s Mem.") [Docket Entry 77]; see also Clark v. Feder, Semo & Bard, P.C., 697 F. Supp. 2d 24 (D.D.C. 2010). The parties, and the Court, are by now quite familiar with the facts animating this action. See Clark, 697 F. Supp. 2d at 26-29.

Although there is no Federal Rule of Civil Procedure that expressly addresses motions for reconsideration, see Lance v. United Mine Workers of Am. 1974 Pension Trust, 400 F. Supp. 2d 29, 31 (D.D.C. 2005), because the Court's opinion did not fully adjudicate all of Clark's claims, Clark's motion is properly characterized as a motion pursuant to Rule 54(b), see Fed. R. Civ. P. 54(b) (where court resolves "fewer than all the claims," it may revise "its opinion at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities"). "The Court has broad discretion to hear a motion for reconsideration brought under Rule 54(b)," Isse v. Am. Univ., 544 F. Supp. 2d 25, 29 (D.D.C. 2008), and reconsideration is appropriate "as justice requires," Cobell v. Norton, 355 F. Supp. 2d 531, 540 (D.D.C. 2005). "Considerations a court may take into account under the 'as justice requires' standard include whether the court 'patently' misunderstood the parties, made a decision beyond the adversarial issues presented, made an error in failing to consider controlling decisions or data, or whether a controlling or significant change in the law has occurred." Williams v. Johanns, 555 F. Supp. 2d 162, 164 (D.D.C. 2008). Review under Rule 54(b) "amounts to determining, within the Court's discretion, whether reconsideration is necessary under the relevant circumstances." Cobell, 355 F. Supp. 2d at 540.

Clark asserted five theories of recovery in this action. She argued that: (1) the defendants improperly grouped her for purposes of determining what percentage of her yearly compensation would be credited to her retirement account, see Clark, 697 F. Supp. 2d at 29; (2) the defendants violated ERISA's anti-cutback rule, 29 U.S.C. § 1054(g), see id.; (3) the Retirement Plan's summary plan description did not disclose information required by federal regulations, see Pl.'s Mem. at 22; (4) the Retirement Plan's fiduciaries failed to "use reasonable actuarial assumptions for interest and the expected retirement age in funding the plan," Clark, 697 F. Supp. 2d at 29 (internal quotation marks omitted); and (5) the fiduciaries failed "to comply with the termination restrictions in Treas. Reg. 1.401(a)(4)-5 which would have preserved over $700,000 for distribution to participants." Id.

The Court granted summary judgment to defendants on four of Clark's five claims. As to Clark's claim that defendants improperly grouped her, the Court concluded that she had the better of the argument, but found that granting summary judgment in favor of Clark was inappropriate based on the current record. See id. at 33. Clark now asks the Court to revisit all of its rulings.

The Court is persuaded that reconsideration is appropriate on her anti-cutback rule claim, her summary plan description disclosure claim, her interest rate assumption claim, and her termination restriction claim. It will therefore vacate the portions of its March 22, 2010 Memorandum Opinion and Order granting summary judgment to the defendants on those claims. The Court notes, however, that much of the confusion regarding Clark's claims stems from her imprecise and inconsistent framing of those claims. See Clark v. Feder Semo & Bard, P.C., 560 F. Supp. 1, 3 (D.D.C. 2008) (discussing evolution of Clark's claims); Clark v. Feder Semo & Bard, P.C., 527 F. Supp. 2d 112, 114-15 (D.D.C. 2007) (same). Accordingly, in order to ensure that the Court fairly addresses Clark's claims, it will require her to file a statement, consistent with the Court's rulings, precisely detailing the nature of her remaining claims, the statutory basis for each claim (i.e., 29 U.S.C. § 1132(a)(1)(B) or 29 U.S.C. § 1132(a)(2)), the defendants against whom she is asserting each claim, and the relief to which she believes she is entitled on each claim.

ANALYSIS

I. Improper Grouping Claim

Clark first contends that the Court erred in its analysis of her claim that the defendants improperly grouped her for purposes of determining what percentage of her yearly compensation would be credited to her retirement account. Specifically, she disagrees with the Court's threshold conclusion that "this claim 'cannot proceed under [29 U.S.C. § 1132(a)(2)], and can only be proceed [sic] under [29 U.S.C. § 1132(a)(1)(B)]." Pl.'s Mem. at 6.*fn1

Clark presented her "improper grouping theory as part of her derivative breach of fiduciary duty claim pursuant to 29 U.S.C. § 1132(a)(2)." Clark, 697 F. Supp. 2d at 30. The Court concluded that section 1132(a)(2) did not supply the cause of action for that claim: "A claim brought under section 1132(a)(2) provides relief only for the plan itself and not for individual beneficiaries." Id. (citing Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 142 (1985)). "Clark's improper grouping theory," on the other hand, "does not allege an injury to the Retirement Plan as a whole -- it alleges only an injury to her." Id. at 30-31; see also id. at 31 ("Were she to prevail on her claim, any recovery would necessarily go to her, and to her alone."). Hence, because Russell bars plaintiffs from suing under section 1132(a)(2) where they seek damages on their own behalf, the Court concluded that Clark's improper grouping claim "must proceed as a claim for individual benefits under section 1132(a)(1)(B)." Id.

Clark now suggests that "[l]imiting Plaintiff's claim to [section 1132(a)(1)(B)] is inconsistent with the Supreme Court's decision in LaRue v. DeWolff, Boberg & Assocs., 552 U.S. 248 (2008)." Pl.'s Mem. at 6. According to her, "LaRue confirms that a participant has standing to sue for breach of fiduciary duty under [section 1132(a)(2)], even if the breach of duty does not affect everyone in the plan." Id.

Clark reads LaRue too broadly. LaRue held that for defined contribution plans, a plaintiff may bring a breach of fiduciary duty claim under section 1132(a)(2) even where the alleged misconduct only affects "persons tied to particular individual accounts." LaRue, 552 U.S. at 255. But LaRue's holding does not apply to defined benefit plans, the type of plan at issue here, and in Russell, on which this Court relied. See id. at 256 ("[Section 1132(a)(2) does not provide a remedy for individual injuries distinct from plan injuries."); accord Fisher v. Penn Traffic Co., 319 Fed. Appx. 34, 35 (2d Cir. 2009); Estate of Contos ex rel. Menard v. Anheuser-Busch Cos., Inc., Civ. A. No. 4:09-998, 2009 WL 3172718, at *3 (E.D. Mo. Sept. 25, 2009); Cook v. Campbell, Civ. A. No. 2:01-1425, 2008 WL 2039501, at *4 (M.D. Ala. May 12, 2008); see also Rogers v. Baxter Int'l, Inc., 521 F.3d 702, 705 (7th Cir. 2008) ("All we hold today is that participants in defined-contribution plans may use [section 1132(a)(2)]... to obtain relief if losses to an account are attributable to a pension plan fiduciary's breach of a duty owed to the plan.").*fn2 Hence, the Court properly concluded that Clark can bring her improper grouping claim only pursuant to section 1132(a)(1)(B).*fn3

Because Clark may proceed on her improper grouping claim only under section 1132(a)(1)(B), the Court correctly found that it had to evaluate that claim under a deferential standard of review. See Clark, 697 F. Supp. 2d at 31 (citing Firestone, 489 U.S. at 115). Such review required the Court to assess whether the administrative record evidenced a "reasonable decision" by the Retirement Plan's administrator in classifying Clark for purposes of determining what percentage of her yearly compensation would be credited to her retirement account. Id. at 32. The Court found that the administrative record did not do so. See id. at 33. Accordingly, the Court observed that Clark, rather than Feder Semo and the Plan, had the better of the improper grouping argument. See id. Nevertheless, the Court declined to grant summary judgment to Clark without giving defendants another opportunity to point to evidence in the administrative record justifying the Plan administrator's decision. See id. at 32-33.

In their opposition to Clark's motion to dismiss, however, defendants argue for the first time that the Court should have dismissed Clark's improper grouping claim because "the Court cannot provide any relief to Plaintiff under [section 1132(a)(1)(B)] in this action." Defs.' Sur-Reply in Opp'n to Pl.'s Mot. for Reconsideration [Docket Entry 83], at 2. Framing their argument in terms of subject matter jurisdiction, they submit that the improper grouping claim is non-justiciable either because it is moot or because Clark lacks standing to bring that claim. See id. at 3; see also Defs.' Opp'n to Pl.'s Mot. for Reconsideration ("Defs.' Opp'n") [Docket Entry 79], at 8 ("[T]he Plan in this case has terminated and therefore lacks any assets to pay Plaintiff."). But defendants offer no support for either of these arguments.

A claim becomes moot only where "there is no reasonable expectation that the alleged violation will recur, and interim relief or events have completely and irrevocably eradicated the effects of the alleged violation." L.A. County v. Davis, 440 U.S. 625, 631 (1979) (internal citations and quotation marks omitted). Here, however, Clark has not gotten benefits to which she ...


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