Kelley v. Fidelity Mgmt. and Trust Co.

Filing

OPINION issued by Rogeriee Thompson, Appellate Judge; David H. Souter, Associate Supreme Court Justice* and William J. Kayatta , Jr., Appellate Judge. Published. *Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States, sitting by designation. [15-1445]

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Date Filed: 07/13/2016

Entry ID: 6017118

United States Court of Appeals
For the First Circuit
No. 15-1445
IN RE: FIDELITY ERISA FLOAT LITIGATION

TIMOTHY M. KELLEY, and all others similarly situated, et al.,
Plaintiffs, Appellants,
v.
FIDELITY MANAGEMENT TRUST COMPANY, et al.,
Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]

Before
Thompson, Circuit Judge,
Souter, Associate Justice,*
and Kayatta, Circuit Judge.

Mark T. Johnson, with whom Todd M. Schneider, Joshua G.
Konecky, Garrett W. Wotkyns, Michael C. McKay, Schneider Wallace
Cottrell Konecky Wotkyns LLP, Joseph C. Peiffer, Daniel J. Carr,
Peiffer Rosca Abdullah & Carr, Gregory Y. Porter, John J. Roddy,
Elizabeth A. Ryan, Bailey & Glasser LLP, Suyash Agrawal, Jeannie
Y. Evans, Agrawal Evans LLP, Branford S. Babbitt, Craig A. Rabbe,
Elizabeth R. Leong, Danielle Andrews Long, Robinson & Cole LLP,
Robert A. Izard, Jr., Mark P. Kindall, Izard Noble LLP, Peter J.
*

Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.

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Mougey, Laura Dunning, Levin, Papantonio, Thomas, Mitchell,
Rafferty & Proctor, PA, Richard S. Frankowski, The Frankowski Firm,
Thomas G. Shapiro, Michelle H. Blauner, and Shapiro Haber & Urmy
LLP were on brief, for appellants.
Jonathan D. Hacker, with whom Brian D. Boyle, Bradley N.
Garcia, O'Melveny & Myers LLP, Joseph F. Savage, Jr., Alison V.
Douglass, and Goodwin Procter LLP were on brief, for appellees.
Elizabeth Hopkins, Counsel for Appellate and Special
Litigation, with whom M. Patricia Smith, Solicitor of Labor, G.
William Scott, Associate Solicitor for Plan Benefits Security, and
David Ellis, Trial Attorney, U.S. Department of Labor, were on
brief, for the Secretary of Labor as amicus curiae supporting
appellants.

July 13, 2016

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SOUTER, Associate Justice.

Entry ID: 6017118

This appeal is from the

district court's dismissal under Federal Rule of Civil Procedure
12(b)(6) of a putative class action filed by retirement-plan
participants

and

one

plan

administrator.

They

claim

that

defendants are dealing with plan assets in breach of fiduciary
duties imposed by the Employee Retirement Income Security Act of
1974 (ERISA), Pub. L. No. 93-406, 88 Stat. 829 (codified in
relevant part as amended at 29 U.S.C. §§ 1001-1461).

We affirm.

I
As preface, we mention two cases that we decided in 2014,
to which this one bears partial resemblance.
beneficiaries

of

life-insurance

plans

In each of them,

covered

putative class actions against the insurers.

by

ERISA

filed

Vander Luitgaren v.

Sun Life Assur. Co. of Can., 765 F.3d 59 (1st Cir. 2014); Merrimon
v. Unum Life Ins. Co. of Am., 758 F.3d 46 (1st Cir. 2014).

The

plaintiffs alleged that the insurers breached their fiduciary
duties by using plan assets to enrich themselves rather than to
aid the beneficiaries.

We held to the contrary.

This case is different from those two, and not just
because it involves investments to generate retirement benefits
rather than life-insurance policies.

Unlike the beneficiaries who

brought those two suits, the participants who bring this one claim
no direct stake in the plan assets that they say are being
improperly used and no consequential loss personal to them.

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They

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do not allege that they are or will be short so much as a penny of
any benefit to which they are entitled under the terms of their
plans.

Instead,

they

bring

claims

on

behalf

of

the

plans

themselves, contending that the plans are being cheated of certain
plan

assets.

Given

participants

are

administrator.
defendants'

this

joined

posture,
as

it

plaintiffs

is
by

notable
only

that
one

the
plan

Thus, whatever mischief the participants see in

actions,

the

concern

apparently

halfheartedly by the plans themselves.

is

shared

only

That is likely because the

behavior complained of is nothing other than what the plans
expected.
The six plaintiff plan participants and the one plan
administrator
contribution

collectively
retirement

represent

plans.1

eight

Under

401(k)

ERISA,

a

defined"'defined

contribution plan' means a pension plan which provides for an
individual account for each participant and for benefits based
solely upon the amount contributed to the participant's account,
and any income, expenses, gains and losses, and any forfeitures of

1

Timothy M. Kelley was a participant in the Avanade, Inc.
401(k) Retirement Plan and the Hewlett-Packard Company 401(k)
Plan; Jamie A. Fine is a participant in the Delta Airlines 401(k)
Plan; Patricia Boudreau is a participant in the Bank of America
401(k) Plan; Alex Gray is a participant in the EMC Corporation
401(k) Plan; Bobby Negron is a participant in the Safety Insurance
Company 401(k) Plan; Korine Brown is a participant in the General
Motors Personal Savings Plan; and Columbia Air Services, Inc. is
an administrator of the Columbia Group of Companies 401(k)
Retirement Savings Plan.

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accounts of other participants which may be allocated to such
participant's account."

29 U.S.C. § 1002(34).

Defendants are various Fidelity entities that had trust
agreements with the plans; following the parties' lead, we deal
with defendants collectively as "Fidelity."2 Under the agreements,
Fidelity acted as trustee, serving the plans, the mutual funds in
which contributions were invested, and the participants and their
designated

beneficiaries.3

functioned,

in

effect,

as

Among
an

other

intermediary.

things,
It

Fidelity

opened

and

maintained a trust account for each plan and participant, accepted
contributions from the participant or her employer, and invested
those contributions in mutual funds.
At the other end of the process, and crucial to this
case, Fidelity performed its intermediary functions in effecting
withdrawals.

When a participant requested to withdraw from the

plan, her mutual-fund shares were redeemed by the mutual fund's
payment of money in an amount equal to the market value of the

2

Fidelity Management Trust Company holds assets for
institutional clients; Fidelity Management & Research Company is
an investment advisor; and Fidelity Investments Institutional
Operations Company, Inc. is a transfer agent of Fidelity Management
Trust Company for mutual funds.
3

As this is an appeal from the dismissal of the action at
the pleading stage, we present the facts as alleged in the
operative complaint, the Second Amended Consolidated Complaint,
and the documents it incorporates by reference. Hochendoner v.
Genzyme Corp., ___ F.3d ___, Nos. 15–1446, 15–1447, 2016 WL
2962148, at *1 (1st Cir. May 23, 2016).

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shares.

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Because that value was not established until the end of

each trading day, the redemption occurred the day after the
withdrawal request, when the mutual fund transferred cash to a
redemption bank account owned by and registered to Fidelity.

It

is undisputed that, prior to the redemption, the cash was an asset
of the mutual fund.

That same day, the balance was transferred

from

account

the

redemption

to

"FICASH,"

account owned and controlled by Fidelity.

an

interest-bearing

The next day, after

remaining in FICASH overnight, the account's principal (but not
any interest) was transferred back to the redemption account.

The

participant then received an electronic disbursement from the
redemption account if she had so elected.

If she had not chosen

to receive an electronic disbursement, the funds were transferred
from the redemption account to an interest-bearing disbursement
account owned and controlled by Fidelity. The disbursement account
then issued the participant a check, and the principal in the
disbursement account would accrue interest until the check was
cashed.4

4

For simplicity, we refer to the "participant" as receiving
the payout. Of course, under ERISA and the plan documents, payment
could also be received by a "beneficiary." See 29 U.S.C. § 1002(8)
(defining "beneficiary" under ERISA); Sealed Supplemental Appendix
at 109 (explaining, in plan document, that "[t]he [t]rustee shall
hold the assets of the [t]rust [f]und for the exclusive purpose of
providing benefits to [p]articipants and [b]eneficiaries").

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This

process

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may

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appear

unnecessarily

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elaborate.

Although Fidelity's position as an intermediary in the withdrawal
process is well established under the trust agreements in place
here, the entire role of the intermediary seemingly could be
eliminated by making the disbursement from the mutual fund to the
participant directly.
do

not

contest)

transactions,

the

Indeed, Fidelity informs us (and plaintiffs

that,

in

fund's

own

ordinary
transfer

"retail"
agent

alone

mutual-fund
makes

the

disbursement, see Brief of Defendants-Appellees at 8, and there is
no apparent reason that the retirement plans could not contract
for similar arrangements. Similarly, some of the transfers between
Fidelity

accounts

and

the

one-night

superficially at least, seem necessary.

stay

in

FICASH

do

not,

But it appears that there

is nothing bizarre about this sequence as a matter of ordinary
business practice, and plaintiffs do not contend otherwise.
Whatever may be the practical merits of the system, there
is no question that when Fidelity acts as intermediary in the
withdrawal process under its trust agreements with the plans it is
a

fiduciary

within

the

meaning

of

ERISA.

Under

section

3(21)(A)(i), "a person is a fiduciary with respect to a plan to
the extent he . . . exercises any authority or control respecting
management

or

disposition

§ 1002(21)(A)(i).

of

its

assets."

29

U.S.C.

Section 404(a) of ERISA imposes a fiduciary

duty of loyalty, that "a fiduciary . . . discharge his duties with

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respect to a plan solely in the interest of the participants and
beneficiaries."

29 U.S.C. § 1104(a)(1).

And ERISA section 406(b)

specifically prohibits a fiduciary from self-dealing, providing
that "[a] fiduciary with respect to a plan shall not deal with the
assets of the plan in his own interest or for his own account."
29 U.S.C. § 1106(b)(1).
Plaintiffs

allege

that

Fidelity

breached

these

two

fiduciary duties by using certain plan assets other than for the
benefit of the plans, in its treatment of "float": interest earned
on the cash paid out by the mutual funds.5

As mentioned before,

there were two points in the withdrawal sequence at which interest
might be earned: when the cash was in FICASH overnight, and, for
participants who opted to receive a paper check rather than an
electronic transfer, when it sat in the disbursement account until
the participant cashed her check.
As we also said, the suing participants do not claim a
direct, personal stake in float, and at argument their counsel
confirmed that they do not contend that any withdrawing participant
received less than she was entitled to under the plan documents.

5

There appears to be some flexibility in the industry's
understanding of the meaning of "float." Other cases, for example,
use the term to refer to the pool of cash paid out by the mutual
fund upon redemption, and then use the distinct term "float
interest" or "float income" to refer to the interest earned on
that cash. Tussey v. ABB, Inc., 746 F.3d 327, 332 & n.4 (8th Cir.
2014). There is no question that the complaint in this case uses
"float" to refer only to the interest, and we do the same.

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Instead, plaintiffs' quarrel is over Fidelity's use of float other
than for the benefit of the plans.

The complaint alleges that

Fidelity used float to defray bank expenses and, if there was any
remainder, distributed it to the investment fund from which the
principal

came.

Plaintiffs

maintain

that

ERISA's

fiduciary

mandates required float to be credited instead to the plans, where,
as counsel stated at argument, it would inure indirectly to the
benefit of all participants.
A necessary step to reach this result, as plaintiffs
have pleaded their causes of action in the complaint, is treatment
of float as a plan asset, and their loss in the district court
turned on the conclusion that the complaint did not allege facts
to support this premise.

Hence, the order granting Fidelity's

motion to dismiss for failure to state a claim on which relief can
be granted.6
II
We review de novo the district court's dismissal of the
complaint for failure to state a claim.

Saldivar v. Racine, 818

F.3d 14, 17 (1st Cir. 2016).
To survive a motion to dismiss, [a] complaint
must contain sufficient factual matter to
state a claim to relief that is plausible on
6

The district court also concluded that, even if float were
a plan asset, Fidelity was not acting as an ERISA fiduciary when
dealing with float. Because we conclude that plaintiffs have not
alleged facts showing that float should be treated as a plan asset,
we need not address this alternative conclusion.

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its face. In evaluating whether a complaint
states a plausible claim, we perform a twostep analysis.
At the first step, we
distinguish
the
complaint's
factual
allegations (which must be accepted as true)
from its conclusory legal allegations (which
need not be credited). At step two, we must
determine whether the factual allegations are
sufficient to support the reasonable inference
that the defendant is liable.
Id. at 18 (citations, alterations, and internal quotation marks
omitted).
Here, at step one, we need not credit the complaint's
statement that float is a "plan asset," for that label represents
a legal conclusion, not a factual assertion.

It is, moreover, a

legal conclusion bereft of any comprehensive definition in ERISA
itself, as we have explained: "In an effort to fill this void, the
[Department of Labor] consistently has stated that the assets of
a plan generally are to be identified on the basis of ordinary
notions of property rights under non-ERISA law. . . .
find this formulation persuasive."

We . . .

Merrimon, 758 F.3d at 56

(citations and internal quotations marks omitted).
Plaintiffs approach the question whether float should be
treated as a plan asset by observing that, prior to redemption,
the mutual-fund shares are plan assets. Thus, their argument goes,
under ordinary notions of property rights, the cash received in
redemption of those shares must also be a plan asset.

And if that

cash is a plan asset, so too is any interest earned on that cash.

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This sequence might hold up if the payout from the
redemption were going to the plan itself, as one side of a simple
exchange transaction in which the place of plan assets consisting
of mutual-fund shares would be filled by substitute cash of equal
value.

In that scenario, ordinary notions of property rights

probably would dictate that the substitute cash becomes an asset
of the plan upon the exchange.
But this is not what happens.

The payout from the

redemption does not go, and is not intended to go, to the plan
itself.

In fact, it appears that the plans are not entitled to

hold uninvested cash, see Sealed Supplemental Appendix at 109 ("The
[t]rust [f]und shall be fully invested . . . ."); id. at 109-10
("[T]he [t]rustee shall have . . . power[] . . . to retain
uninvested [only] such cash as the . . . [a]dministrator may . . .
direct."), and a plan's instruction to redeem shares is therefore
most coherently seen as an order to pay the participant, whose
receipt of the dollar value of the shares is as clearly the object
of the transfer scheme as it would be if the mutual fund were to
pay the participant directly.

Plaintiffs allege no facts to

support the proposition that the same cash becomes a plan asset
simply

because

it

moves,

not

directly

from

the

fund

to

the

participant, but from the fund through Fidelity on its way to the
participant.

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It is true that Fidelity occupies its position in the
withdrawal process by virtue of its fiduciary relationship with
the

plan.

But

this

relationship,

standing

alone,

is

not

a

sufficient reason to think that it confers plan-asset status on
everything that comes within Fidelity's possession.

Now, if the

cash were ultimately destined for the plan itself and Fidelity
acted as an intermediary agent to receive the cash for deposit
with the plan, plaintiffs' position would have some intuitive
appeal.

But,

for

the

purpose

of

understanding

Fidelity's

obligation subject to ERISA, Fidelity is more straightforwardly
viewed as an agent charged with transferring the cash from the
fund to the participant outside the plan, not to the plan itself.
There is a further reason to see the agency this way.
Because

"ERISA's

principal

function

is

to

protect

.

.

.

contractually defined benefits[,] . . . a fiduciary must act in
accordance with the documents and instruments governing the plan."
Vander Luitgaren, 765 F.3d at 64 (citation, alterations, and
internal quotation marks omitted).

Here, the agreements between

Fidelity and the plans, cited in the complaint and attached to the
motion to dismiss, confirm the foregoing analysis that Fidelity's
duty is to make a distribution by a route incapable of providing
any benefit to the plan from temporary use of the cash:
Fidelity
shall
distribute
withdrawals
directly to each [p]articipant based upon the
address of record unless distribution is

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processed as an electronic payment ("direct
deposit") pursuant to Fidelity's receipt, in
a form and manner acceptable to Fidelity, of
[p]articipants['] bank account information.
Fidelity will process all approved withdrawals
and mail distribution checks, or remit
distributions
as
direct
deposits
to
[p]articipants within ten business days of the
processing date.
Sealed Supplemental Appendix at 148.

Nothing in this provision

for direct distribution to a participant suggests that the plan is
meant to exercise, or receive a benefit under, ordinary property
rights

in

the

traveling

cash.

There

is

no

indication,

for

instance, that the plan bears the risk if the cash is lost after
the redemption but before its receipt by the participant.

Indeed,

it appears that the plans would be, in effect, incapable of bearing
such risk, for a reason mentioned before, that the agreements
prevent plan trusts from holding any uninvested cash.
10.

Id. at 109-

By contrast, Fidelity's mutual fund disclosures, publicly

available

documents

to

which

Fidelity

directs

us

and

the

authenticity of which plaintiffs do not contest, provide that the
"fund faces the risk of loss . . . if the [intermediary] bank
becomes insolvent."

Brief of Defendants-Appellees at 28.

The reasonableness of this conclusion suggested by the
structure of the withdrawal process and the parties' relationships
is corroborated by our pair of insurance cases from 2014, Vander
Luitgaren

and

Merrimon.

Both

were

particular benefit-payment method:

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brought

to

challenge

a

The insurer would open a

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retained asset bank account (RAA) in the beneficiary's name, credit
the account with the full benefit amount, and mail the beneficiary
a book of drafts for making withdrawals.

During the time that the

RAA had a positive balance, the insurer retained the credited funds
in its general account and continued to collect a return on them.
The insurer would pay the beneficiary some interest on the value
of the RAA but at a rate allegedly lower than the return the
insurer was receiving.

The beneficiaries who brought the cases

alleged that, by retaining and investing RAA funds for its own
enrichment, the insurer violated both the ERISA section 404(a)
duty of loyalty and the 406(b) prohibition against self-dealing.
Vander Luitgaren, 765 F.3d at 61-62; Merrimon, 758 F.3d at 51.
Much as plaintiffs in this case acknowledge that, prior
to a redemption, the cash is an asset of the mutual fund (not the
plan), so too the beneficiaries in Merrimon conceded that, prior
to the creation of an RAA, funds held in the insurer's general
account were not plan assets.

See Merrimon, 758 F.3d at 56;

Compare 29 U.S.C. § 1101(b)(1) ("In the case of a plan which
invests in any security issued by a[ mutual fund], the assets of
such plan . . . shall not . . . be deemed to include any assets of
such [mutual fund]."), with id. § 1101(b)(2) ("In the case of a
plan to which a guaranteed benefit policy is issued by an insurer,
the assets of such plan . . . shall not . . . be deemed to include
any assets of such insurer."). And much as plaintiffs here contend

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that, upon redemption, the cash becomes a plan asset, so too the
beneficiaries there posited that, "when a death benefit . . . is
redeemed by means of the establishment of an RAA, the RAA funds
become plan assets."

Merrimon, 758 F.3d at 56.

We rejected the

argument in those cases:
There is no basis, either in the case law or
in common sense, for the proposition that
funds held in an insurer's general account are
somehow transmogrified into plan assets when
they
are
credited
to
a
beneficiary's
account. . . . [O]rdinary notions of property
rights counsel strongly against the . . .
proposition. It is the beneficiary, not the
plan itself, who has acquired an ownership
interest in the assets backing the RAA.
Unless the plan documents clearly evince a
contrary intent--and here they do not--a
beneficiary's assets are not plan assets.
Id. (citations omitted); see also Vander Luitgaren, 765 F.3d at
63.

Thus, it is in harmony with those cases that we reject the

comparable argument in this one, too.

Cash held by a mutual fund

is not transmuted into a plan asset when it is received by an
intermediary whose obligation is to transfer it directly to a
participant.

As between the plan and the participant, it is the

participant who has the superior claim to property in the cash
after redemption.

And that is a good reason to reject a claim

that the cash should be treated as a plan asset for the purpose of
enforcing fiduciary responsibilities under ERISA.
It is not that we fail to recognize a distinction between
the insurance cases and this one.

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There, the insurer, acting as

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both the investment vehicle and the distribution agent, paid the
beneficiary without assistance from an intermediate fiduciary.
Here, by contrast, the investment vehicle (the mutual fund) pays
the participant through an intermediary selected by the plan to
serve as the distribution agent (Fidelity).

But because the path

of the fund payouts does not include the plans, which apparently
would be barred from holding the cash as they previously held the
shares, plaintiffs have given no good reason why this distinction
should make a difference to the plan-asset analysis of float for
purposes of applying ERISA.7
In emphasizing the contours of our holding today, we
should mention one other feature that we take to be common to this
case and the insurance cases.

When we turned away those earlier

claims of fiduciary breach, we relied on the fact that the plan
documents contemplated the RAA method of paying benefits.

Vander

Luitgaren, 765 F.3d at 64; Merrimon, 758 F.3d at 58.

Here,

7

We assume, because no one contends otherwise, that the
retirement plan shoulders the ultimate responsibility for
effecting a distribution, no matter the contours of a particular
distribution scheme. Nothing in today's opinion should be read to
bear on that assumption. Here we decide only the narrow question
whether, given the distribution scheme under review, float is a
plan asset for purposes of ERISA sections 404(a) and 406(b). Our
negative answer to that question does not, for instance, alter the
fact that a disbursement from Fidelity (as plan trustee) to a
participant constitutes a "distribution . . . [from] a qualified
trust" for purposes of the Tax Code. 26 U.S.C. § 402(c)(4).

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plaintiffs do not contend that the plan documents failed to give
notice of the disbursement process under review.8

8

In Merrimon, we distinguished a case on which plaintiffs
rely here:
The decision in Mogel v. Unum Life Insurance
Co., 547 F.3d 23, 26 (1st Cir. 2008), is not
at odds with the conclusion that the monies
retained by the insurer are not plan assets.
Mogel involved a plan that contained a
specific directive to pay beneficiaries in a
lump sum. The insurer ignored this specific
directive and sought instead to redeem claims
through the establishment of RAAs.
As has
been widely recognized, this particularized
policy provision explains this court's holding
that the insurer, which had not paid the
policy proceeds in a manner permitted by the
plan documents, had violated its fiduciary
duties.
Thus, neither the holding in Mogel
nor its broadly cast language is binding
precedent for purposes of this materially
different case.
758 F.3d at 56-57 (citations omitted).
In support of the
proposition that it "has been widely recognized" that Mogel should
be limited to its facts, we cited Edmonson v. Lincoln National
Life Insurance Co., 725 F.3d 406, 428 (3d Cir. 2013) ("[W]e do not
read Mogel as holding the retained assets were plan assets."), and
Faber v. Metropolitan Life Insurance Co., 648 F.3d 98, 106-07 (2d
Cir. 2011) ("Mogel is better understood as predicated on the fact,
not present here, that the insurer failed to abide by plan terms
requiring it to distribute benefits in lump sums."). So limited,
Mogel does not aid plaintiffs, who, as noted, do not contend that
the plan documents called for a distribution method different from
the one implemented. Indeed, the plan documents here do not appear
to contain express provisions specifying a distribution method.
Contra Vander Luitgaren, 765 F.3d at 64 ("The Plan at issue here
states: 'The Death Benefit may be payable by a method other than
a lump sum. The available methods of payment will be based on the
benefit options offered by [the insurer] at the time of
election.'"); Merrimon, 758 F.3d at 59 ("In this instance, each of
the plans provides that the insurer will, upon proof of claim, pay
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Plaintiffs' failure to advance such a claim not only
invites the contrast with Mogel v. UNUM Life Insurance Co. of
America, 547 F.3d 23 (1st Cir. 2008), see supra note 8, but
complements

the

absence

of

any

timely

argument

of

the

sort

presented by the Secretary of Labor as amicus curiae supporting
plaintiffs.

The Secretary contends that Fidelity's use of float

violated ERISA fiduciary duties, not because float is a plan asset,
but

because

Fidelity

failed

to

seek

permission to use float as it did.

and

obtain

the

plans'

The Secretary's position,

however, would take us beyond this case, since the causes of action
pleaded in plaintiffs' complaint necessarily depend on float being
a plan asset.

Plaintiffs did not press a failure-to-obtain-

agreement claim in the district court or in their opening brief
here, and their reply brief's unsuccessful attempt to cast the
Secretary's position as their own is, in any event, too little too
late.

We therefore do not consider the Secretary's argument.

See

United States v. Parigian, ___ F.3d ___, No. 15–1994, 2016 WL
3027702, at *5 (1st Cir. May 26, 2016) ("On this record, [a
particular] argument . . . is both forfeited for failure to raise
it below and waived for failure to preserve it on appeal.

We have

held, with a regularity bordering on the monotonous, that issues
advanced for the first time in an appellant's reply brief are

the death benefit owed by 'making available to the beneficiary a
retained asset account.'" (alterations and emphasis omitted)).

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Case: 15-1445

Document: 00117028724

deemed

waived."

Page: 19

(citations

Date Filed: 07/13/2016

and

internal

Entry ID: 6017118

quotation

marks

omitted)); Downing/Salt Pond Partners, L.P. v. R.I. & Providence
Plantations, 643 F.3d 16, 28 (1st Cir. 2011) ("We decline to
address

.

.

amicus . . . .

.

issues

raised

for

the

first

time

by

[an]

Amici may not make up for waiver by a party and

may not introduce a new argument into a case."

(citations,

alterations, and internal quotation marks omitted)). In so saying,
we will probably not surprise the Secretary, whose brief states,
"If

this

[c]ourt

determines

that

plaintiffs

have

waived

any

argument that Fidelity violated its duties even if . . . float
itself is not a plan asset, the Secretary urges the [c]ourt to
reserve the issue . . . whether Fidelity, in the absence of an
express

agreement

about

float,

has

engaged

in

prohibited

transactions and acted disloyally . . . ." Brief for the Secretary
of Labor as Amicus Curiae Supporting Plaintiffs-Appellants at 20
n.7.

We accede to the Secretary's request and reserve the issue

for timely presentment in another case.9

9

It is notable that the Secretary supports plaintiffs'
ultimate position but declines to join in their insistence that
float is a plan asset. In arguing that float is a plan asset,
plaintiffs cite several guidance documents from the Department of
Labor.
These documents do not, facially, support plaintiffs'
desired conclusion.
If something below the surface of the
documents indicated that float is a plan asset, presumably the
Secretary would have drawn it to our attention. The Secretary's
decision to make a wholly different argument thus supports our
view that the Department of Labor's documents do not have a bearing
on our resolution of the claim that plaintiffs chose to advance.
See Brief for the Secretary of Labor as Amicus Curiae Supporting
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A final point in support of today's decision: in Tussey
v. ABB, Inc., 746 F.3d 327 (8th Cir. 2014), the Eighth Circuit
reached the same conclusion on materially similar facts.

Indeed,

it is undisputed that plaintiffs' complaint here is modeled on the
complaint in Tussey, which involved some of the same defendants
and similar trust agreements.

Tussey reached the Eighth Circuit

after a trial, and the appeal garnered this summary:
The participants . . . fail to establish the
[p]lan had any rights in the redemption
account balance, which . . . was registered
for
the
benefit
of
the
investment
options. . . . The participants agree with
Fidelity that the funder of the check owns the
funds in the checking account until the check
is presented, and thus is entitled to any
interest earned on that float, but the
participants contest the ownership of the
funds at issue. The participants assert, [i]n
this case, the owner is the [p]lan, making the
float income a [p]lan asset.
But the
participants do not cite any record evidence
establishing the [p]lan as the funder of the
check or the owner of the funds in the
redemption account.
Absent proof of any
ownership rights to the funds in the
redemption account, the [p]lan had no right to
float income from that account.
Id.

at

340

(footnote,

quotation marks omitted).

alterations,

emphasis,

and

internal

Plaintiffs' allegations here are as

lacking as the proffers in Tussey.

Plaintiffs-Appellants at 25 (explaining that "the [Department of
Labor] guidance [documents] did not rely on or answer th[e]
question" whether float is a plan asset).

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Page: 21

Date Filed: 07/13/2016

III
The district court's judgment is AFFIRMED.

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Entry ID: 6017118