Eisenberger v. DST Systems, Inc.
ORDER by Judge Nanette K. Laughrey. Plaintiff's motion (Doc. 1) for confirmation of the arbitration award is GRANTED. The Clerk of the Court is directed to enter judgment in the specified amount in Plaintiff's favor against DST. This is a TEXT ONLY ENTRY. No document is attached. (Sreeprakash, Netra)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
Case No. 4:21-cv-09022
DST SYSTEMS, INC.,
Case No. 4:21-cv-09031
DST SYSTEMS, INC.,
Case No. 4:21-cv-09042
DST SYSTEMS, INC.,
Case No. 4:21-cv-09043
DST SYSTEMS, INC.,
Case No. 4:21-cv-09044
DST SYSTEMS, INC.,
Case No. 4:21-cv-09045
DST SYSTEMS, INC.,
Case No. 4:21-cv-09046
DST SYSTEMS, INC.,
Case No. 4:21-cv-09047
DST SYSTEMS, INC.,
Case No. 4:21-cv-09048
DST SYSTEMS, INC.,
Case No. 4:21-cv-09049
DST SYSTEMS, INC.,
Case No. 4:21-cv-09050
DST SYSTEMS, INC.,
Case No. 4:21-cv-09051
DST SYSTEMS, INC.,
Each Plaintiff in the above-captioned actions has moved to confirm an arbitration award.
Doc. 1. Defendant DST Systems, Inc. opposes the motion, arguing that Plaintiff’s claims were not
arbitrable and that Plaintiff is part of a mandatory class certified by the District Court for the
Southern District of New York.
DST paints the task before the Court as one that is complex and merits forbearance, but in
truth, the obligation of the Court is plain and unavoidable. The Federal Arbitration Act compels
the Court to confirm the award in the absence of specified circumstances. As discussed further
below, no such circumstance exists here. For that reason and the additional reasons discussed
below, the Court grants each Plaintiff’s motion to confirm the arbitration award.
At all relevant times, Plaintiff was a participant, within the meaning of 29 U.S.C. § 1002(7),
in DST’s 401(k) Profit Sharing Plan (the “Plan”). DST, though incorporated in Delaware, has its
principal place of business in Kansas City, Missouri. DST is the sponsor, administrator, and a
designated fiduciary of the Plan under 29 U.S.C. §§ 1002 and 1102.
The underlying dispute arose from DST’s alleged failure to monitor and ensure the
rebalancing of overly concentrated investments in the Plan. On January 13, 2017, Mr. James
DuCharme, a participant in the Plan, filed a putative class action in the Western District of
Missouri, seeking to recover damages on behalf of the Plan for DST’s alleged wrongdoing. On
February 22, 2017, DST filed a motion to compel arbitration and to dismiss Mr. DuCharme’s
lawsuit. On June 23, 2017, the Honorable Brian C. Wimes granted DST’s motion to dismiss the
DuCharme litigation, finding that the Arbitration Agreement was “valid” and that “Ducharme’s
claims for breach of fiduciary duty f[e]ll within the Arbitration Agreement’s scope.” Ducharme
v. DST Sys., Inc., No. 17-CV-0022-BCW, 2017 WL 7795123, at *1 (W.D. Mo. June 23, 2017).
On June 18, 2018, DST sent a notice to all Plan participants bound by the Arbitration
Agreement explaining that a former employee had initiated an arbitration relating to the Plan and
advising each participant that he or she “may initiate an individual arbitration proceeding under
the Arbitration Program by submitting a written request” to DST. (DST Notice Regarding Right
to Assert Claim dated June 18, 2018.)
Hundreds of Plan participants initiated arbitration proceedings through the American
Arbitration Association (“AAA”).
To date, 554 participants or beneficiaries have initiated
arbitration proceedings. During the past three years, the arbitrations have progressed—including
through discovery, depositions, motion practice, merits hearings, or simply settlements. To date,
the claims of 342 claimants have been tried; 214 claimants have received awards in their favor;
and 61 other claimants are awaiting awards. DST has appealed some of the awards against it
through the arbitration process. All of the arbitration hearings at issue, albeit virtual, were
conducted in Missouri.
The Western District of Missouri has already confirmed at least five of the arbitration
awards. See Murphy v. DST Sys., Inc., No. 21-MC-00174-BCW (W.D.Mo.); O’Brien v. DST Sys.,
Inc., No. 21-MC-9008-BCW (W.D.Mo.); Quast v. DST Sys., Inc., No. 21-MC-9009-BCW
(W.D.Mo.); Mayberry v. DST Sys., Inc., No. 21-MC-09007-BCW (W.D.Mo.); Keeton v. DST Sys.,
Inc., No. 21-MC-09006-BCW (W.D.Mo.); Parrott v. DST Sys., Inc., No. 21-mc-09012-NKL
(W.D.Mo.). In at least one of those cases, DST expressly stated just months ago that it “d[id] not
oppose the confirmation of the Arbitration Award . . . .” Parrot, No. 21-mc-09012-NKL
(W.D.Mo.), Doc. 3 (DST’s Response to Plaintiff’s Motion to Confirm Arbitration Award).
In September 2017, months after the DuCharme case was dismissed upon DST’s motion,
a participant in the Plan brought a putative class action in the Southern District of New York
alleging breach of fiduciary duty against DST and Ruane Cuniff & Goldfarb Inc., the investment
manager to which DST had delegated investment management responsibilities, as well as the
Plan’s Advisory Committee and the Compensation Committee of the Board of Directors of DST.
Ferguson v. Ruane Cuniff & Goldfarb Inc., No. 17-cv-06685 (S.D.N.Y.). The plaintiffs in
Ferguson filed a motion for class certification in April 2020. Counsel for the Plaintiff in this case
filed a memorandum of law opposing the motion for class certification on behalf of Plaintiff and
hundreds of other similarly situated arbitration claimants (the “Arbitration Claimants”).
On March 4, 2021, while the motion for class certification in Ferguson was pending, the
Second Circuit reversed a district court decision compelling arbitration pursuant to the same DST
Arbitration Agreement at issue here. See Cooper v. Ruane Cunniff & Goldfarb Inc., 990 F.3d 173
(2d Cir. 2021). The Second Circuit held that DST’s Arbitration Agreement did not cover ERISA
fiduciary duty claims because the Arbitration Agreement covered only employment-related
disputes, not Plan-related disputes. Id. at 183–84. The Second Circuit also suggested that
individual claims would not be permissible in a suit asserting a breach of DST’s fiduciary duty to
the Plan because, based on one of its prior opinions, such claims must be brought on a
representative basis. DST was not a party to that lawsuit.
On March 8, 2021, the Ferguson court denied plaintiffs’ class certification motion without
prejudice and ordered additional briefing addressing Cooper.
Ferguson, No. 17-cv-06685
(S.D.N.Y.), Doc. 296 (Order Dated March 8, 2021). The Ferguson plaintiffs thereafter renewed
their class certification motion. DST filed a brief supporting the class certification motion. See
Ferguson, No. 17-cv-06685 (S.D.N.Y.), Doc. 306 (DST’s Response to Plaintiffs’ Renewed
Motion for Class Certification), p. 22 (“The Court should grant Plaintiffs’ renewed motion for
class certification.”). Counsel for the Arbitration Claimants, including Plaintiff here, filed an
additional brief in the Ferguson case opposing class certification, arguing that DST had agreed to
arbitrate the claims; that the Arbitration Claimants had a right to arbitrate their claims; that the
Arbitration Claimants should be permitted to opt out of any class; that Judge Wimes’ decisions in
DuCharme precluded certification of a mandatory class; and that the Southern District of New
York lacked personal jurisdiction over the Arbitration Claimants. Ferguson, No. 17-cv-06685
(S.D.N.Y.), Doc. 271 (Memorandum of Law on Behalf of Arbitration Claimants in Opposition to
Ferguson Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement).
On August 17, 2021 the Ferguson court certified a Rule 23(b)(1) mandatory class that
includes Plaintiff. Ferguson v. Ruane Cuniff & Goldfarb Inc., No. 17-CV-6685, 2021 WL
3667979 (S.D.N.Y. Aug. 17, 2021). The Ferguson court stated, “[w]hile the Arbitration Claimants
argue that they have a right to arbitrate, the Second Circuit as well as this Court has found that the
claims at issue here are not covered by the arbitration agreement.” Id. at *7. The class certification
decision in Ferguson also noted secondarily that Second Circuit precedent requires parties suing
on behalf of an ERISA plan “to demonstrate their suitability to serve as representatives of the
interests of other plan stakeholders,” and it was not clear “how an employee can bring an ERISA
fiduciary claim that satisfies [the Coan v. Kaufman, 457 F.3d 250 (2d Cir. 2006)] adequacy
requirement, while concurrently complying with the agreement.” Id. at *4 (quotation marks
On August 23, 2021, DST moved the Ferguson court for a temporary restraining order and
preliminary injunction to prohibit the Arbitration Claimants from prosecuting the arbitrations and
related court proceedings in spite of the class certification order. Also, on August 30, 2021, the
Arbitration Claimants, including Plaintiff, filed a petition in the Second Circuit pursuant to Rule
23(f) seeking discretionary review of the class certification order.
On August 31, 2021, the Ferguson court denied DST’s motion for a temporary restraining
order, but it ordered the Arbitration Claimants to show cause as to why they should not be enjoined
from prosecuting this or other actions relating to the class’s claims. The Arbitration Claimants
filed their response on September 21, 2021; DST’s response is due in the Southern District of New
York on or before October 12, 2021.
A. Whether the Court Has Jurisdiction
DST does not—and cannot reasonably—suggest that this Court lacks jurisdiction over the
parties before it. Plaintiff was employed by DST in Kansas City, Missouri, and DST’s principal
place of business is in Kansas City, Missouri.
The Arbitration Agreement states that the
“arbitration hearing shall be held in the county of the Associate’s principal place of
employment . . . unless another location is agreed to by the parties.” The arbitration hearing was
conducted in Jackson County, Missouri. The Agreement provides that, “[a]fter the conclusion of
the arbitration process, . . . the Associate may file a legal action . . . to enforce, vacate, modify,
and/or appeal the final decision and award based on any available legal ground in the federal
district court with jurisdiction over the county in which the hearing was held.” DST Output
Arbitration Program and Agreement with Associate Opt Out Right.
Moreover, the AAA’s Employment Rules—which the arbitration agreement provides shall
apply—specify that the “[p]arties to these procedures shall be deemed to have consented that
judgment upon the arbitration award may be entered in any federal or state court having
https://www.adr.org/sites/default/files/Employment%20Rules.pdf (last accessed September 23,
2021), R. 42.c.
This Court clearly has jurisdiction over this action.
B. The FAA’s Requirement that the Court Confirm Arbitration Awards in the
“Section 9 of the FAA provides that federal courts ‘must grant’ an order confirming an
arbitration award ‘unless the award is vacated, modified, or corrected as prescribed in sections 10
and 11 of [the FAA].’” UHC Mgmt. Co., Inc. v. Computer Sciences Corp., 148 F.3d 992, 997 (8th
Cir. 1998) (emphasis added); see also 9 U.S.C. § 9 (“If the parties . . . have agreed that a judgment
of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the
court, then at any time within one year after the award is made any party to the arbitration may
apply to the court so specified for an order confirming the award, and thereupon the court must
grant such an order unless the award is vacated, modified, or corrected as prescribed in sections
10 and 11 of this title.”) (emphasis added).
The Supreme Court has held that “[t]he preeminent concern of Congress in passing the Act
was to enforce private agreements into which parties had entered, and that concern requires that
we rigorously enforce agreements to arbitrate, even if the result is ‘piecemeal’ litigation . . . .”
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985).
“Congress did not authorize de novo review of [an arbitration] award on its merits; it
commanded that when the exceptions do not apply, a federal court has no choice but to confirm.”
Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 587 (2008); see also Med. Shoppe Int’l, Inc.
v. Turner Invs., Inc., 614 F.3d 485, 489 (8th Cir. 2010) (“[A]n arbitral award may be vacated only
for the reasons enumerated in the FAA.”).
The “grounds recognized by the FAA” for vacating an award are “corruption, fraud,
partiality or an abuse of power . . . .” Id. Here, DST has not argued that corruption, fraud, or
partiality affected the award. Absent a finding that the arbitrators abused their power, then, the
Court is compelled to confirm the award.
C. DST’s Argument that the ERISA Claims Cannot Be Brought Individually
DST argues that ERISA § 502(a) claims cannot be brought in individual arbitrations.
Insofar as this argument does not involve a suggestion that the arbitrators exceeded their powers,
it should have been directed to, and resolved by, the arbitrators.
Insofar as DST suggests that the arbitrators exceeded their authority because the claims at
issue were not arbitrable, the Court is not persuaded by DST’s argument. The Supreme Court has
held that, “although § 502(a)(2) does not provide a remedy for individual injuries distinct from
plan injuries, that provision does authorize recovery for fiduciary breaches that impair the value
of plan assets in a participant’s individual account.” LaRue v. DeWolff, Boberg & Assocs., Inc.,
552 U.S. 248, 256 (2008). Additionally, the Eighth Circuit has “f[ou]nd nothing . . . demonstrating
Congress intended to prohibit arbitration of ERISA claims.” Arnulfo P. Sulit, Inc. v. Dean Witter
Reynolds, Inc., 847 F.2d 475, 478 (8th Cir. 1988).
DST argues that Arnulfo P. Sulit involved claims between the plan and its broker and did
not address “a plan participant’s ability to individually arbitrate ERISA fiduciary duty claims.”
But in Arnulfo, the principal of the corporation brought claims in his own name, as well as that of
his corporation, in addition to the claim on behalf of the employee benefit plans. The Eighth
Circuit found that “the parties’ agreements to arbitrate ERISA claims are enforceable in accord
with the explicit provisions of the Arbitration Act.” Id. at 477. The Eighth Circuit did not
distinguish between the employee benefit plans’ claims and the other plaintiffs’ claims in
determining that arbitration was appropriate. Instead, in compelling arbitration of even the
individuals’ claims, the Eighth Circuit expressly stated, “we perceive no inherent conflict between
arbitration of ERISA claims and the statute’s purposes that would undermine the suitability of
arbitration as a means of enforcing ERISA rights.” Id. at 479.
The Ninth Circuit has expressly noted that “every circuit to consider the question has held
[that] ERISA contains no congressional command against arbitration, [and] therefore an agreement
to arbitrate ERISA claims is generally enforceable.” Dorman, 780 F. App’x at 513–14.1 The
Supreme Court’s opinion in Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1632 (2018), further
supports the conclusion that where, as in the ERISA provisions relevant here, there is no language
indicating that statutory claims are not arbitrable, an arbitration agreement “must be enforced as
Finally, even if DST is correct that an ERISA claim must be brought in a collective action,
as discussed below, DST is estopped from benefiting from that rule because it previously
represented to the courts, arbitrators and the Arbitration Claimants that the ERISA claims at issue
here cannot be brought in a collective action.
DST claims that in Jones v. NovaStar Fin., Inc., 257 F.R.D. 181, 190 (W.D. Mo. 2009), this
Court rejected the reading of LaRue adopted in Dorman. However, this Court simply held in Jones
that “LaRue does not eliminate the possibility of § 502(a)(2) class actions.” Id. The Court did not
suggest that individual causes of action are impermissible under LaRue; to the contrary, the Court
recognized that “LaRue . . . expanded the relief available under § 502(a)(2), so that recovery can
now be had when a participant demonstrates that fiduciary misconduct affected his individual
account.” Id. (quoting Kanawi v. Bechtel Corp., 254 F.R.D. 102, 108–09 (N.D.Cal.2008)).
D. Judicial Estoppel
Even if this were not a straightforward matter of confirming an arbitration award where
there is no evidence of corruption, fraud, partiality, or abuse of power, the doctrine of judicial
estoppel alone would warrant confirming the award.
“[A] party should not be allowed to gain an advantage by litigation on one theory, and then
seek an inconsistent advantage by pursuing an incompatible theory.’” Scudder v. Dolgencorp,
LLC, 900 F.3d 1000, 1006 (8th Cir. 2018) (quoting New Hampshire v. Maine, 532 U.S. 742, 749,
(2001)). Therefore, the doctrine of judicial estoppel “prevents a party who ‘assumes a certain
position in a legal proceeding, and succeeds in maintaining that position,’ from later ‘assum[ing]
a contrary position.’” Scudder, 900 F.3d at 1006 (quoting New Hampshire, 532 U.S. at 749; citing
18 Charles Alan Wright, Arthur Edward Miller, & Edward H. Cooper, Federal Practice and
Procedure § 4477, p. 782 (1981)).
The Court considers the following factors in determining whether judicial estoppel applies:
(1) whether “a party’s later position is clearly inconsistent with its earlier position,”
(2) “whether the party has succeeded in persuading a court to accept that party’s
earlier position, so that judicial acceptance of an inconsistent position in a later
proceeding would create the perception that either the first or the second court was
misled,” and (3) “whether the party seeking to assert an inconsistent position would
derive an unfair advantage or impose an unfair detriment on the opposing party if
Scudder, 900 F.3d at 1006 (quoting New Hampshire, 532 U.S. at 750-51). The Court evaluates
these factors in turn.
1. Whether DST’s Position Now is Clearly Inconsistent with the Position It
DST’s position in this case now is clearly inconsistent with the position it adopted in 2017
in DuCharme. In DuCharme, DST moved the Court “to compel Mr. Ducharme to arbitrate his
ERISA claims with DST on an individual basis in accordance with the terms of the Arbitration
Program and Agreement.” DuCharme, No. 17-0022 (W.D.Mo.), Doc. 27 (DST’s Motion to
Compel Arbitration and to Dismiss), p. 1. DST argued that individual arbitration was required
“because (1) Mr. Ducharme entered into a valid agreement to arbitrate with DST and (2) his breach
of fiduciary duty claims under ERISA fall within the scope of that agreement.” DuCharme, No.
17-0022 (W.D.Mo.), Doc. 28 (Suggestions in Support of DST’s Motion to Compel Arbitration and
to Dismiss), p. 6. DST insisted that the Profit Sharing Plan “incorporates the terms of DST’s
Arbitration Agreement into the Plan, and thereby explicitly binds the Plan to the terms of that
Agreement.” DuCharme, No. 17-0022 (W.D.Mo.), Doc. 47 (DST’s Response to Plaintiff’s SurReply in Support of Motion to Compel Arbitration and to Dismiss), p. 2; see also DuCharme, No.
17-0022 (W.D.Mo.), Doc. 39 (DST’s Reply Suggestions in Support of Motion to Compel and to
Dismiss), p. 3 (arguing that “[t]he Plan . . . expressly provides for arbitration” and that “the Plan
makes clear that the scope of the Arbitration Agreement covers claims arising out of or related to
the Plan—such as the claims Mr. DuCharme seeks to assert”); id. p. 6 (arguing that claims for
breach of fiduciary duty “are explicitly covered by the language of the Plan” and “subject to
mandatory arbitration and class action waiver as provided under DST’s Arbitration Policy”
(quotation marks omitted)). Indeed, DST insisted that “neither the Arbitration Agreement nor the
Amendment prohibits Mr. Ducharme or any other party to the Arbitration Agreement from
arbitrating a breach of fiduciary duty claim in connection with purported losses to their individual
accounts.” DuCharme, No. 17-0022 (W.D.Mo.), Doc. 47 (DST’s Response to Plaintiff’s SurReply in Support of Motion to Compel Arbitration and to Dismiss), p. 3.
After the DuCharme litigation was dismissed upon DST’s motion, and after the Ferguson
case was filed in New York, DST induced reliance by Plan participants on the position it had taken
in DuCharme by sending a notice to each advising that they could “initiate an individual arbitration
proceeding under the Arbitration Program by submitting a written request to the DST Systems,
Inc., Legal Department” in Kansas City, Missouri. (DST Notice Regarding Right to Assert Claim
dated June 18, 2018.)
In the arbitration proceedings themselves, DST acknowledged the arbitrability of each Plan
participant’s claim. Every arbitration is initiated upon DST’s submission of a “Joint Submission
for Arbitration” that DST and each claimant signed. See, e.g., Hursh v. DST Sys., Inc., No. 01-190001-9621 (AAA), Joint Submission for Arbitration.
This document itself constituted an
agreement to arbitrate. See Dean Witter Reynolds, Inc. v. Fleury, 138 F.3d 1339, 1342 (11th Cir.
1998) (“Under the Federal Arbitration Agreement, the Submission Agreement, being an
‘agreement in writing to submit to arbitration an existing controversy,’ is ‘valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the revocation of any
contract.’”) (quoting 9 U.S.C. § 2); Fisher v. Wheat First Sec., Inc., 62 F. App’x 472, 475 (4th Cir.
2003) (“The Uniform Submission Agreement completed and signed by Fisher is a valid and
binding contract that has the force of modifying earlier agreements.”).
In the arbitration of James DuCharme v. DST Systems, Inc., et al., the parties agreed that
“[a]ll claims, counterclaims and defenses asserted by the Parties are within the jurisdiction of the
Panel and arbitrable, and there are no preconditions that must be satisfied before proceeding with
the Arbitration.” DuCharme v. DST Sys., Inc., No. 01-18-0003-0453 (AAA), Case Management
and Scheduling Order, Order No. 2, ¶ 3. In another proceeding, the arbitrator stated that his
jurisdiction over the matter “is based on the parties’ agreement to arbitrate” and that there “is no
dispute that the parties’ dispute is within the scope of the parties’ agreement to arbitrate.” McKown
v. DST Sys., Inc., No. 01-19-0001-9672 (AAA), Initial Case Management Order, p. 2. In yet
another proceeding, the arbitrator noted that “[n]o party challenged either the arbitrability of any
of the claims or the jurisdiction of the Arbitrator.” Leineke v. DST Sys., Inc., No. 01-18-00030421 (AAA), Report of Preliminary Hearing and Management Conference Order No. One, p. 2.2
Furthermore, even as recently as a few months ago, DST agreed to the entry of an order
granting a motion to confirm an attorney’s fee award in connection with an arbitration. Parrot,
No. 21-mc-09012-NKL, Doc. 3 (DST’s Response to Plaintiff’s Motion to Confirm Arbitration
In this proceeding, however, DST has adopted the contrary position. In direct contradiction
of its original position that a Plan participant should “arbitrate his ERISA claims with DST on an
individual basis in accordance with the terms of the Arbitration Program and Agreement,” DST
now argues that the reason for “certify[ing] mandatory classes in ERISA fiduciary duty actions
is . . . to ensure that all parties and all plan participants are treated equitably in resolving derivative
DST argues that it did not consent to arbitration because, in the Joint Submission for Arbitration,
DST reserved “all arguments and defenses in connection with the Demand.” Even putting aside
the fact that DST takes the quoted language out of context, this vague, general reservation of rights,
submitted in the arbitration forum to the arbitrator, cannot be deemed an objection to the arbitration
itself. In any event, it does not erase DST’s prior and subsequent efforts to compel and invite
arbitration by Plan participants and to participate willingly in those arbitrations.
DST’s argument that it later objected to proceeding in arbitration while the Second Circuit resolved
arbitrability in Cooper similarly fails. The document to which DST points notes that DST had
already submitted the Joint Submission for Arbitration for 315 claimants. Having compelled, then
invited, then invoked arbitration, and having participated fully in the process for significant time,
DST cannot legitimately claim now that it objected to proceeding in arbitration.
DST notes that Parrot “did not consider any dispute over arbitrability” and that the Court merely
“granted an unopposed motion to confirm an attorney’s fee award,” but that is precisely the point:
by not opposing the motion, DST acknowledged that confirmation of the arbitration award was
appropriate. In fact, DST actually submitted its own proposed order confirming the arbitration
award. See Parrott, No. 21-mc-9012-NKL (W.D.Mo.), Doc. 3 (DST’s Response to Plaintiff’s
Motion to Confirm Arbitration Award) (“DST does not oppose the confirmation of the Arbitration
Award and respectfully submits that the accompanying proposed order in the form of Exhibit A is
appropriate to confirm that award.”).
claims that belong to the plan as a whole, not any individual plan participant.” DST’s Suggestions
in Opposition to Plaintiff’s Motion to Confirm Arbitration Award, p. 2; see also id. pp. 3-4
(“Courts nationwide, including the Southern District of New York and this Court, have recognized
repeatedly that ERISA fiduciary duty claims cannot be litigated on an individual basis and must
instead be brought in a representative capacity on behalf of a plan and all its participants. The
arbitration of the individual claims here violated those basic ERISA principles.”); id. p. 14 (“Courts
nationwide, including this Court, have held that such claims cannot be litigated individually and
must instead be brought on behalf of a retirement plan as a whole in a representative capacity.”).
DST attempts to refute the suggestion that its current and former positions are inconsistent
by pointing out that (1) “the Ferguson plaintiffs, not DST, moved to certify the class,” and (2) “the
Second Circuit resolved that Arbitration Claimants’ claims are not arbitrable in Cooper—in which
DST was not even a party.” Even putting aside the fact that DST submitted a brief in support of
the plaintiffs’ class certification motion in Ferguson, these are distinctions without a difference.
The facts that DST did not initiate class certification in Ferguson and was not a party in Cooper
are irrelevant to the question of whether DST has adopted inconsistent positions in adjudicatory
forums—and there can be no reasonable dispute that it has.
Insofar as DST argues that an intervening change in the law justifies its about-face, the
argument is unconvincing. Well before the 2021 Second Circuit decision in Cooper concluding
that a DST Plan participant’s ERISA claims were not arbitrable, and the subsequent classcertification decision in Ferguson, DST had changed its position regarding arbitration. For
example, on July 10, 2020, DST sought a temporary restraining order and preliminary injunction
to prevent arbitrations by any members of the putative class. Ferguson, No. 17-cv-06685
(S.D.N.Y.), Doc. 160 (Proposed Order to Show Cause for an Order for Preliminary Injunction and
Temporary Restraining Order). The Second Circuit’s decision in Cooper was not issued until eight
Even after the Second Circuit decision in Cooper was issued, DST consented to the entry
of orders confirming arbitration awards in other cases involving the same type of claim. See
Murphy v. DST Sys., Inc., No. 21-MC-00174-BCW (W.D.Mo.), Doc. 8 (DST’s Response to
Plaintiff’s Motion to Confirm Arbitration Award) (“DST does not oppose the confirmation of the
Arbitration Award . . . .”); Parrott v. DST Sys., Inc., No. 21-mc-09012-NKL (W.D.Mo.), Doc. 3
Moreover, Cooper did not change Second Circuit law regarding whether ERISA claims
like those in this case could be brought individually: as Cooper explains, the rule at issue was
articulated in Coan, which was decided in 2006—many years before DST sought to compel
arbitration in DuCharme. See Cooper, 990 F.3d at 184 (“In Coan v. Kaufman, 457 F.3d 250 (2d
Cir. 2006), we construed ERISA § 502(a)(2) to require parties suing on behalf of a plan to
demonstrate their suitability to serve as representatives of the interests of other plan stakeholders.
We explained: ‘[T]he representative nature of the section 502(a)(2) right of action implies that
plan participants must employ procedures to protect effectively the interests they purport to
Furthermore, DST has taken inconsistent positions in the Western District of Missouri—
the district in which it has its principal place of business, in which Plaintiff was employed, and in
which the arbitrations occurred. DST has not presented, and the Court is not aware of, any authority
to suggest that a change in Second Circuit law justifies DST’s abrupt reversal in this district. The
only Eighth Circuit pronouncement with respect to the arbitrability of ERISA claims is that there
is “no inherent conflict between the arbitration of ERISA claims and the statute’s purposes that
would undermine the suitability of arbitration as a means of enforcing ERISA rights.” Arnulfo P.
Sulit, 847 F.2d at 479. In fact, DST cited Arnulfo P. Sulit in arguing for dismissal of the DuCharme
case. The Court therefore cannot find that DST’s contradictory positions were justified based on
any change in the law.
In sum, there can be no reasonable dispute that DST has adopted inconsistent positions in
the litigation and arbitration proceedings.
2. Whether DST Succeeded in Persuading a Court to Accept Its Earlier
Position, such that Accepting an Inconsistent Position in this Proceeding
Would Create the Perception that Either the First or the Second Court
There is no doubt that DST persuaded Judge Wimes to accept its position that Plan
participants who were parties to the arbitration agreement were required to arbitrate their claims.
In dismissing the complaint in DuCharme, Judge Wimes expressly held that “the Arbitration
Agreement at issue is valid and Ducharme’s claims for breach of fiduciary duty fall within the
Arbitration Agreement’s scope.” Ducharme, 2017 WL 7795123, at *1. Further, in the arbitrations
themselves, DST conceded that the claims were arbitrable.
DST argues that the fact that it sought to stay select arbitrations shows that it did not
concede the arbitrability of the claims. However, seeking a stay of an arbitration in the arbitration
proceeding does not suggest that DST denied the arbitrability of the claims. DST has not
suggested that it objected to the arbitrability of any claim in the arbitration proceedings at issue.
If the Court were to accept DST’s new argument that the claims at issue in the Arbitration
Claimants’ arbitration proceedings—the same type of claim that was at issue in the DuCharme
litigation—are not arbitrable, then it will appear that either Judge Wimes or this Court was
mistaken as to the enforceability of the arbitration agreement or whether the ERISA claims at issue
may be brought individually. That is precisely the kind of result that the doctrine of judicial
estoppel is designed to prevent.
3. Whether DST Would Derive an Unfair Advantage or Impose an Unfair
Detriment on Plaintiff If Not Estopped
It is clear that, if the Court were to accept the argument that DST now makes, Plaintiff
would be unfairly prejudiced. Not only did DST seek and procure the dismissal of the DuCharme
litigation on the ground that the claims therein were subject to mandatory arbitration, but DST also
sent letters to all the Plan Participants advising that they could arbitrate disputes relating to the
Plan. Now that hundreds of Plan Participants have accepted DST’s offer to arbitrate, and secured
awards after engaging in good faith, perhaps for years, in the arbitration process, it would be
patently unfair to permit DST to revoke its consent to arbitration, vacate the arbitration awards,
and require the Arbitration Claimants to start over.
4. Whether Judicial Estoppel Applies
The foregoing analysis establishes that judicial estoppel applies. See Hicks v. Bank of Am.,
N.A., 218 F. App’x 739, 746 (10th Cir. 2007) (finding that where a party “vigorously participated
in the arbitration,” including by “joining in [a] motion to stay [proceedings in a district court]
pending completion of the arbitration” and arguing that “the arbitration clause . . . clearly
encompassed all of the issues and claims . . . asserted,” it had “waived its objection to arbitration
and [wa]s estopped from arguing that the arbitrator lacked personal jurisdiction to enter an award
DST argues that inconsistent results in arbitration—the fact that some claimants in the
arbitrations received less money than others, while some received none at all—suggests unfairness,
and that the only fair option is a uniform recovery through the Ferguson class action. But the
possibility of unfairness to those who exercised their right to arbitrate and did not recover does not
warrant stripping arbitral awards from those who did. To the contrary, holding the parties to the
benefit of their bargain—the outcomes obtained in arbitration—is the best way to ensure fairness
and to effectuate the principles underlying the FAA. See, e.g., Granite Rock Co. v. Int’l Bhd. of
Teamsters, 561 U.S. 287, 299 (2010) (stating that “the first principle that underscores all of our
arbitration decisions [is]: [a]rbitration is strictly ‘a matter of consent’”) (quotation marks and
citation omitted). It falls to courts and arbitrators to give effect to these contractual decisions,
keeping in mind the purpose of the exercise: to enforce the intent of the parties. Volt Information
Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989).
DST’s post hoc suggestion that, despite its initial demand for arbitration in the Western
District of Missouri and its subsequent invitation to Plan participants to initiate arbitration
proceedings, this Court should sweep aside final arbitration awards in hundreds of cases is
anathema. See Hicks v. Cadle, 436 F. App’x 874, 879 (10th Cir. 2011) (“[I]t would be a perverse
understanding of the concept of consent to hold that a party has not consented to arbitration that it
voluntarily sought. Judicial estoppel does not override consent; it enforces past consent by
preventing tactical after-the-fact retraction.” (emphasis in original)); Lewis v. Cir. City Stores, Inc.,
500 F.3d 1140, 1149 (10th Cir. 2007) (“[M]any courts have held that, absent an explicit statement
objecting to the arbitrability of the dispute, a party cannot await the outcome and then later argue
that the arbitrator lacked authority to decide the matter.” (quotation marks omitted; citing cases)).
As another federal court held when a party argued that the arbitrator lacked jurisdiction to render
the award against it, “[s]uch crass manipulation of the legal process constitutes an insult to the
integrity of the judicial system and fully warrants invocation of the doctrine of judicial estoppel.”
Data Mountain Sols., Inc. v. Giordano, 680 F. Supp. 2d 110, 128 (D.D.C. 2010). The “hypocrisy”
of “wish[ing] to resort to a class-wide lawsuit, the very device it [originally] denied to the workers,
to avoid its duty to arbitrate . . . will not be blessed, at least by this order.” Abernathy v. DoorDash,
Inc., 438 F. Supp. 3d 1062, 1067–68 (N.D. Cal. 2020).
Given (1) the Supreme Court’s expansive language about the importance of arbitral
consent; (2) DST’s affirmative representations to the courts, to the arbitrators, and to the Plan
Participants that these fiduciary breach claims had to be arbitrated; and (3) DST’s consenting,
repeatedly, to arbitrate the claims, the Court finds that DST is judicially estopped in this Court
from asserting that the fiduciary breach claims at issue are not arbitrable.
DST was not dragged into arbitration against its will. It initiated these arbitrations
voluntarily, whether its consent was manifested in the terms of the original arbitration agreement
found valid in DuCharme or by inviting the Arbitration Claimants to arbitrate and then
participating fully in the arbitrations. The only thing that would be unfair would be to let DST
escape the consequences of the arbitration proceedings in which it voluntarily participated because
they did not turn out as DST hoped they would.
E. Whether the Class Certification Order in Ferguson Should Affect the Court’s
Decision Regarding the Arbitration Award
DST argues that the class certification order in Ferguson enjoins litigation of the claims
that are the subject of the class action, citing In re Federal Skywalk Cases, 680 F.2d 1175, 1180
(8th Cir. 1982). The language cited by DST from Federal Skywalk is taken out of context. While
that decision does state “[i]t is true that parties to a mandatory class are not free to initiate actions
in other courts to litigate class certified issues,” the very next sentence states, “However, in the
present case the objectors had commenced their state court actions before the motion for class
certification had been filed in district court.” Fed. Skywalk, 680 F.2d at 1180. In Federal Skywalk,
the Eighth Circuit actually vacated the class certification order. Id. at 1183. In doing so, the Eighth
Circuit distinguished the class certification order before it, which had purported to enjoin
“pending . . . actions,” from other cases in which permissible injunctions were “against
subsequent . . . actions.” Id. at 1182. Thus, insofar as Federal Skywalk is relevant, it suggests that
a class-certification order that interferes with pending proceedings may be improper.
Here, Plaintiff and DST initiated the arbitrations before the class was certified. Indeed,
many Arbitration Claimants’ claims were already resolved before the class was certified. In
moving to confirm the arbitration award, Plaintiff is merely seeking the equivalent of a formal
judgment on a matter in which Plaintiff already has prevailed. See Van Horn v. Van Horn, 393 F.
Supp. 2d 730, 740 (N.D. Iowa 2005) (“‘The confirmation of an arbitration award converts the final
arbitration award into the judgment of the court.’” (quoting Irving R. Boody & Co. v. Win Holdings
Int’l, Inc., 213 F.Supp.2d 378, 380 (S.D.N.Y. 2002)). A court action to confirm the arbitration
award is merely the culmination—not the commencement—of the adjudicatory process.
DST also argues that the Court simply should defer to the Southern District of New York
with respect to Plaintiff’s claims because Plaintiff is a member of the class certified in Ferguson
and Ferguson was “first filed,” so confirming the arbitral award in this case would interfere with
the Ferguson court’s jurisdiction over Plaintiff’s claims. However, Plaintiff’s claims have already
been arbitrated to conclusion within this district.
The ability to rely on the finality of a judgment is a central tenet in the judicial system.
Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1378, 1383 n.8 (11th Cir. 1988) (noting “the strong
policy favoring the finality of awards and judgments” (citing, inter alia, Newark Stereotypers’
Union No. 18 v. Newark Morning Ledger Co., 397 F.2d 594, 598 (3d Cir. 1968)); see Wellons, Inc.
v. T.E. Ibberson Co., 869 F.2d 1166, 1169 (8th Cir. 1989) (“[I]it is clear that an arbitration award
may operate as a final adjudication for the purposes of collateral estoppel.”). DST has presented
no compelling reason to overturn this fundamental principle in this case.
DST’s argument that the Court should not countenance Plaintiff’s motion because it is a
collateral attack on the Ferguson class certification order is unpersuasive. First, the Court’s
resolution of Plaintiff’s motion cannot be a collateral attack on the class certification order in
Ferguson because this Court is not altering, and indeed cannot alter, a judgment entered by another
district court. Second, this Court is merely granting Plaintiff’s Motion for Confirmation, which,
under the FAA and the facts presented here, is effectively a ministerial task. Further, the Court
simply is ensuring that DST does not escape the consequences of the legal position it originally
adopted in the Western District of Missouri. The Southern District of New York has not addressed
To the extent that the Court’s order in this case might create a conflict in relation to an
order of the Southern District of New York, such conflict will be the product of DST’s blatantly
contradictory positions, not any judicial error.
Insofar as DST may be concerned about the potential that the Arbitration Claimants will
recover twice for one injury, it may seek relief in the class action by, for instance, requesting that
any award that the Ferguson plaintiffs secure on behalf of the Plan be calculated or distributed in
a manner that accounts for any overlap in the claims. See, e.g., DeLoach v. Philip Morris
Companies, Inc., 206 F.R.D. 551, 566–67 (M.D. N.C. 2002) (noting, in rejecting defendant’s
contention that individualized damages calculations precluded class certification, that a court can
appoint a special master or magistrate to “preside over individual damage proceedings”); Augustin
v. Jablonsky, 819 F. Supp. 2d 153, 174 (E.D.N.Y. 2011) (concluding that “claims for class
members’ emotional distress damages must be disposed of an individual basis”); Hilao v. Est. of
Marcos, 103 F.3d 767, 782 (9th Cir. 1996) (relying on statistical sampling and a special master to
calculate damage awards for three different subclasses of plaintiffs). Such a procedure could also
address DST’s concern that some arbitration claimants were not given a large enough award in
F. DST’s Concern About Plaintiff’s Counsel’s Expenses
Finally, DST argues that Plaintiff’s counsel impermissibly seeks to recover multiple times
for the same out-of-pocket costs, despite representing to every arbitrator that they would not
recover the same expenses more than once. However, the issue does not appear ripe for court
intervention. Plaintiff’s counsel has represented that, as they have agreed multiple times, they will
work with DST to ensure that they recover no more than 100% of their costs. DST complains that
Plaintiff’s counsel has not explained how such a promise may be enforced after judgment is
entered. However, insofar as Plaintiff’s counsel breaches an agreement, of course, traditional
contract remedies are available, in addition to remedies available under federal law and rules for
purported misrepresentations by attorneys.
In any event, this issue does not appear to affect the integrity of the award itself.
Furthermore, DST has not shown in what arbitration the alleged double recovery has occurred, or
in what amount. Therefore, there is insufficient evidence before the Court to warrant delaying or
refusing entry of a judgment confirming the arbitration award on this basis.
For the reasons discussed above, Plaintiff’s motion to confirm the arbitration award (Doc.
1) is GRANTED. The Clerk of the Court is directed to enter judgment in each Plaintiff’s favor
against DST in the amounts listed below, with post-judgment interest.
Amount of Award
Eisenberger v. DST Systems, Inc.
Miller v. DST Systems, Inc.
Brandt v. DST Systems, Inc.
Schwartz v. DST Systems, Inc.
attorneys’ fees and
$39,586.11 in costs
Kolakowski v. DST Systems, Inc.
attorneys’ fees and
$6,456.78 in costs
Scarbrough v. DST Systems, Inc.
attorneys’ fees and
$34,405.72 in costs
Highfill v. DST Systems, Inc.
attorneys’ fees and
$5,963.92 in costs
Green v. DST Systems, Inc.
attorneys’ fees and
$26,146.25 in costs
Gordanier v. DST Systems, Inc.
attorneys’ fees and
$39,586.11 in costs
Summers v. DST Systems, Inc.
attorneys’ fees and
$6,977.80 in costs
Arnold v. DST Systems, Inc.
attorneys’ fees and
$32,921.12 in costs
attorneys’ fees and
$6,456.78 in costs
Eaton v. DST Systems, Inc.
attorneys’ fees and
$9,579.98 in costs
s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge
Dated: October 8, 2021
Jefferson City, Missouri
As DST notes, the arbitration award to Eaton provides for “[d]amages in the amount of $3,518.00,
which amount Claimant agrees to offset by the amount of the settlement between Claimant and
Ruane, Cunniff & Goldfarb . . . .” Neither DST nor Plaintiff has specified the amount of the
settlement between Eaton and Ruane, Cunniff & Goldfarb. Insofar as Plaintiff has received or in
the future receives settlement funds from Ruane, Cunniff & Goldfarb in connection with the issues
underlying this case, Eaton must, in accordance with the arbitration award, return to DST the
equivalent portion of any damages that DST will have paid to Eaton.
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