Laurent v. PricewaterhouseCoopers LLP et al

Filing 244

OPINION AND ORDER: For the foregoing reasons, Plaintiffs' motion for reconsideration (Dkt. No. 240) is DENIED. As counsel for Plaintiffs acknowledged during oral argument, the conclusion reached by the Court resolves all remaining claims asserted in this action. Accordingly, the Second Amended Complaint is dismissed with prejudice. The Clerk of Court is directed to close this case. SO ORDERED. (Signed by Judge J. Paul Oetken on 1/19/2018) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
TIMOTHY LAURENT, et al.,
Plaintiffs,

06-CV-2280 (JPO)

-v-

OPINION AND ORDER

PRICEWATERHOUSECOOPERS LLP,
et al.,
Defendants.
J. PAUL OETKEN, District Judge:

Plaintiffs Timothy Laurent and Smeeta Sharon brought this action, on behalf of
themselves and all others similarly situated, against Defendants PricewaterhouseCoopers LLP,
the Retirement Benefit Accumulation Plan for Employees of Pricewaterhouse Coopers LLP, and
the Administrative Committee to the Retirement Benefit Accumulation Plan for Employees of
Pricewaterhouse Coopers LLP (collectively, “PwC”). Plaintiffs allege that PwC violated the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq.
In an Opinion and Order dated July 24, 2017, this Court granted PwC’s motion for
judgment on the pleadings and denied Plaintiffs’ motion for summary judgment. See Laurent v.
PricewaterhouseCoopers LLP, No. 06 Civ. 2280, 2017 WL 3142067 (S.D.N.Y. July 24, 2017).
Familiarity with the facts, as set out in that prior Opinion and Order, is presumed. Plaintiffs
move for reconsideration. (Dkt. No. 240.) For the reasons that follow, the motion is denied.
I.

Legal Standard
“A motion for reconsideration is ‘an extraordinary remedy to be employed sparingly in

the interests of finality and conservation of scarce judicial resources. . . .’” Drapkin v. Mafco
Consol. Grp., Inc., 818 F. Supp. 2d 678, 695 (S.D.N.Y. 2011) (quoting In re Initial Public
Offering Sec. Litig., 399 F. Supp. 2d 298, 300 (S.D.N.Y. 2005)). To prevail, the movant must
1

demonstrate either “(1) an intervening change in controlling law; (2) the availability of new
evidence; or (3) the need to correct clear error or prevent manifest injustice.” Jacob v. Duane
Reade, Inc., 293 F.R.D. 578, 580–81 (S.D.N.Y. 2013) (quoting Drapkin, 818 F. Supp. 2d at 696
(S.D.N.Y. 2011)); see also Cioce v. County of Westchester, 128 Fed. App’x 181, 185 (2d Cir.
2005) (“Generally, motions for reconsideration are not granted unless the moving party can point
to controlling decisions or data that the court overlooked—matters, in other words, that might
reasonably be expected to alter the conclusion reached by the court.” (quoting In re BDC 56
LLC, 330 F.3d 111, 123 (2d Cir. 2003)).
II.

Discussion
Having reviewed the record and the parties’ briefs, the Court concludes that it overlooked

neither a controlling issue of law nor a crucial fact in the record. Thus, none of Plaintiffs’
arguments warrants reconsideration.
First, Plaintiffs contend that the Second Circuit’s mandate in Laurent v.
PricewaterhouseCoopers LLP, 794 F.3d 272 (2d Cir. 2015), foreclosed this Court’s conclusion
that this suit was not authorized by ERISA § 502(a)(3). (Dkt. No. 241 at 3, 5.) Relatedly,
Plaintiffs argue that PwC waived any argument that § 502(a)(3) does not authorize their action
by failing to present that argument to the Second Circuit. (Id. at 10.) This Court already
considered and rejected these two procedural arguments. (See Dkt. No. 238 at 30; Dkt. No. 212
at 2–3.) Reconsideration is not warranted because Plaintiffs identify neither an intervening
change in controlling law, any new evidence, nor the need to correct clear error or prevent
manifest injustice. See Jacob, 293 F.R.D. at 580–81.
Having rejected Plaintiffs’ procedural arguments, the Court now turns to their substantive
arguments. First, Plaintiffs argue that the Court’s decision is contrary to Esden v. Bank of
Boston, in which the Second Circuit explained that ERISA “permits plan participants whose
2

rights are violated by the terms of a plan (or a plan amendment) to recover benefits.” 229 F.3d
154, 176 (2d Cir. 2000) (quoting Hearings on Hybrid Pension Plans Before the Senate Comm. on
Health, Education, Labor and Pensions, 106 Cong. (1999) (prepared testimony of Stuart Brown,
Chief Counsel, IRS)). Esden, however, is wholly consistent with this Court’s opinion: ERISA
“created substantive rights for pension plan participants and expressly created private causes of
action in federal court to vindicate those rights.” Id. at 177 (citing ERISA § 502(a), which sets
out private rights of action under the statute). In order to vindicate a substantive right under
ERISA, a plaintiff’s action must be authorized by § 502(a), as Esden clearly recognized. Here,
the Court simply concluded that § 502(a) does not authorize the form of relief that Plaintiffs
seek. “Although [Plaintiffs] might well be left without an appropriate remedy as a result of this
decision,” the Court remains convinced that their claims are “legal, not equitable, and therefore
may not be brought under § 502(a)(3).” See Cent. States, Se. & Sw. Areas Health & Welfare
Fund v. Gerber Life Ins. Co., 771 F.3d 150, 159–60 (2d Cir. 2014). 1
Second, Plaintiffs contend that the “structure” of ERISA “compel[s] the conclusion” that
§ 502(a)(3) authorizes them to bring an action to enforce its substantive vesting requirements.
(Dkt. No. 241 at 19.) Central States confirms, however, that Plaintiffs’ structural and purposive
arguments, like their Esden argument, ultimately lack merit (even if there is some intuitive
appeal to the idea that ERISA should not be interpreted to leave beneficiaries without remedies
for statutory violations). In Central States, the Second Circuit rejected the idea that “the
underlying purposes of ERISA and of equitable relief generally would permit a court to fashion
an appropriate remedy.” 771 F.3d at 159 (2d Cir. 2014); see also id. at 158 (recognizing that

1

Plaintiffs do not challenge the Court’s determination that they do not have a
cognizable claim under ERISA § 502(a)(1)(B) for benefits. (Dkt. No. 241 at 1.)
3

“[c]ommentators have repeatedly noted that as a result of this case law ERISA plans and
beneficiaries are, in some circumstances, deprived of remedies”).
Finally, Plaintiffs request reconsideration of the Court’s conclusion that the relief they
seek does not qualify as “appropriate equitable relief” under ERISA §502(a)(3). Plaintiffs
identify two varieties of equitable relief, which they claim they are authorized to pursue under
§ 502(a)(3): (1) an “injunction” requiring the plan administrator to “deviate from the plan’s
unlawful terms”; and (2) “equitable surcharge.” (Dkt. No. 243 at 6–7.)
As to Plaintiffs’ request for “injunctive relief,” they identify no precedent or authority
authorizing a federal court to enjoin a plan administrator to “comply with the [ERISA] statute.”
(Dkt. No. 241 at 18.) Contrary to their argument, the Supreme Court’s Great-West decision does
not stand for the proposition that § 502(a)(3) authorizes an injunction to enforce a federal statute:
that case merely noted, in the course of holding that § 502(a)(3) does not authorize specific
performance of a contract, that the “Administrative Procedure Act . . . does not bar a State from
seeking specific relief to obtain money to which it claims entitlement under the federal Medicaid
statute.” Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 212 (2002) (emphasis
added) (citing Bowen v. Massachusetts, 487 U.S. 879 (1988)). Neither Great-West nor Bowen
has any bearing on whether a plaintiff may enjoin compliance with ERISA under § 502(a)(3).
Plaintiffs’ overly broad conception of the injunctive relief available under § 502(a)(3) is
also difficult to square with the Supreme Court’s warning that “appropriate equitable relief”
cannot be interpreted to mean “all relief available for breach of trust” in the common-law courts
of equity. Mertens v. Hewitt Assocs., 508 U.S. 248, 257–58 (1993) (“Since all relief available
for breach of trust could be obtained from a court of equity, limiting the sort of relief obtainable
under § 502(a)(3) to ‘equitable relief’ in the sense of ‘whatever relief a common-law court of

4

equity could provide in such a case’ would limit the relief not at all,” rendering the modifier
“appropriate” superfluous.) This inconsistency between Supreme Court precedent and Plaintiffs’
argument is especially clear insofar as they claim that trust law principles permit the Court to
enjoin the Plan Administrator, as a trustee, to “deviate from” the “terms of the trust.” (Dkt. No.
243 at 6). The mere fact that Plaintiffs seek relief against a trustee does not, by itself,
transmogrify legal relief into appropriate equitable relief under ERISA.
Regarding the final, alternative equitable remedy sought by Plaintiffs, § 502(a)(3) does
authorize actions for “equitable surcharge.” See, e.g., CIGNA Corp. v. Amara, 563 U.S. 421, 442
(2011); Osberg v. Foot Locker, Inc., 555 F. App’x 77, 80 (2d Cir. 2014). Nonetheless, Plaintiffs
fail to meet their “initial burden” to establish the elements of a claim for that equitable remedy,
namely: (1) a breach of fiduciary duty that (2) caused them to “suffer[] a ‘related loss.’” Amara
v. CIGNA Corp., 925 F. Supp. 2d 242, 258 (D. Conn. 2012), aff’d, 775 F.3d 510 (2d Cir. 2014).
As the Court explained in its original opinion, Plaintiffs have failed to identify any breach
of fiduciary duty by PwC, and this failure precludes them from seeking an equitable surcharge.
See Laurent, 2017 WL 3142067, at *8. Plaintiffs claim that the Court overlooked New York
State Psychiatric Ass’n, Inc. v. UnitedHealth Group., 798 F.3d 125 (2d Cir. 2015), which cited
Kendall v. Employees Retirement Plan of Avon Products, 561 F.3d 112, 120 (2d Cir. 2009), for
the proposition that “[t]he statute . . . impose[s] a general fiduciary duty to comply with ERISA.”
New York State Psychiatric Ass’n, 798 F.3d at 131 (second alteration added). Plaintiffs argue
that PWC breached this “general fiduciary duty” to comply with ERISA, and that this breach
entitles them to the remedy of equitable surcharge. (Dkt. No. 241 at 21.)
The Court disagrees with the notion that ERISA imposes a general fiduciary duty on a
plan administrator to comply with each and every provision in the statute. First, the Kendall

5

quote is taken out of context. Kendall is about Article III standing, not the proper interpretation
of § 502(a)(3). In the course of concluding that the plaintiff lacked standing to bring certain
ERISA claims, the Second Circuit explained that “[t]he statute does impose a general fiduciary
duty to comply with ERISA, but it does not confer a right to every plan participant to sue the
plan fiduciary for alleged ERISA violations without a showing that they were injured by the
alleged breach of the duty.” Kendall, 561 F.3d at 120. The Court does not read Kendall to hold
that a plan administrator breaches his fiduciary duty whenever he fails to depart from a term of
the plan—such as the whipsaw projection rate and nonretirement-age terms at issue here—which
conflict with an ERISA provision.
Instead, the Court agrees with Judge Garaufis’s conclusion that “[t]rustees do not breach
their fiduciary duties under ERISA simply by presiding over a plan which fails in some respect
to conform to one of ERISA’s myriad provisions.” Cement & Concrete Workers Dist. Council
Pension Fund v. Ulico Cas. Co., 387 F. Supp. 2d 175, 184 (E.D.N.Y. 2005), aff’d, 199 F. App’x
29 (2d Cir. 2006). Consistent with this Court’s previous opinion, “a trustee breaches an ERISA
fiduciary duty only where, when acting as a fiduciary within the meaning of ERISA § 3(21)(A)
. . . , the trustee fails to discharge one or more of the duties described in 29 U.S.C. § 1104.” Id.
at 184. Here, Plaintiffs have failed to adequately allege such a breach. Therefore, their claim for
equitable surcharge under § 502(a)(3) fails.
III.

Conclusion
For the foregoing reasons, Plaintiffs’ motion for reconsideration (Dkt. No. 240) is

DENIED.

6

As counsel for Plaintiffs acknowledged during oral argument, the conclusion reached by
the Court resolves all remaining claims asserted in this action. 2 Accordingly, the Second
Amended Complaint is dismissed with prejudice.
The Clerk of Court is directed to close this case.
SO ORDERED.
Dated: January 19, 2018
New York, New York

____________________________________
J. PAUL OETKEN
United States District Judge

2

See Dkt. No. 238 at 52 (“Effectively, your Honor, that would be – I agree with my
colleague – that would be the end of the case. We’re not saying that they committed fraud in
connection with the projection. . . . So that would be the end.”).
7