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2d 149
58 USLW 2534, 12 Employee Benefits Ca 1107
United States Steel Mining Co. (the company) and the United States Steel and
Carnegie Pension Fund (the fund) appeal from the district court's denial of their
motion to recover restitution for monies paid pursuant to a state court injunction
and attorney's fees. The district court found that the company had no standing
and the court had no jurisdiction to grant the requested relief. We affirm on a
different ground. We find that section 502(a)(3) of the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U.S.C. Sec. 1132(a)(3), provides no
remedy in federal court for an employer and fund administrator seeking
extracontractual restitution and attorney's fees from an injunction issued by a
state court in obedience to a state statute that was later held to be preempted by
ERISA.
* In February 1983, the United Mine Workers (the union) and individual union
members filed an action in the Circuit Court of Kanawha County, West
Virginia, against United States Steel Mining Co., U.S. Steel Corp., and
ARMCO, Inc. The union sought a declaratory judgment that a West Virginia
statute, W.Va.Code Sec. 23-5A-2, was valid and enforceable. This statute,
which amended the West Virginia Workers' Compensation Act, prohibited
employers from decreasing or cancelling medical coverage for any employee or
his dependents while the employee was claiming or receiving benefits under
the Act for a temporary disability.
In June of 1983, the company moved to dismiss the action on the ground that
the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.
Secs. 1001-1461, preempts the state statute. On April 1, 1986, the state court
issued an opinion denying the company's motion to dismiss, but no final order
was entered.
In June 1986, a federal district court held in Fixx v. United Mine Workers of
America, 645 F.Supp. 352 (S.D.W.Va.1986), that W.Va.Code Sec. 23-5A-2 is
preempted by section 514(a) of ERISA, 29 U.S.C. Sec. 1144(a).
In December 1986, the company and the fund filed suit in federal court against
the union, individual union members on behalf of themselves and others
similarly situated, and the state trial judge. They sought a declaration that Fixx
is determinative of the preemption issue raised in the state court, an injunction,
and appropriate equitable relief.
The district court issued a preliminary injunction on January 15, 1987. On May
19, 1987, the court entered a permanent injunction granting the company and
the fund the declarative and injunctive relief they sought.
A year later, the company and the fund filed a motion in district court as part of
the same action to recover damages and attorney's fees because of the state
court injunction. The court denied the motion on the grounds that the company
lacked standing as an employer to bring a complaint under 29 U.S.C. Sec. 1132
and ERISA "does not confer jurisdiction on this court to act under the facts and
circumstances here involved." The court stated, "It would appear that the
proper forum for the relief sought by plaintiff is in the Circuit Court of
Kanawha County, which Court was the source of the injunction that gives rise
to the present claims."
II
9
The company and the fund first argue that they have standing to bring the
action under 29 U.S.C. Sec. 1132(a)(3) and 28 U.S.C. Sec. 1331. The motion is
part of the same action initiated by the original complaint of the company and
the fund in the district court. In ordering the preliminary and later permanent
injunction, the district court implicitly determined that the company and the
fund had standing.
10
15
Under the definition section of ERISA, "a person is a fiduciary with respect to a
plan to the extent (i) he exercises any discretionary authority or discretionary
control respecting management of such plan or exercises any authority or
control respecting management or disposition of its assets, ... or (iii) he has any
discretionary authority or discretionary responsibility in the administration of
such plan." 29 U.S.C. Sec. 1002(21)(A).
16
III
17
The company and the fund also contend that the district court had subject
matter jurisdiction. In its order granting the preliminary injunction, the district
court explicitly found that it had jurisdiction.
Title 29 U.S.C. Sec. 1132(e)(1) provides:
(e) Jurisdiction
18
19
(1) Except for actions under subsection (a)(1)(B) of this section, the district
courts of the United States shall have exclusive jurisdiction of civil actions
under this subchapter brought by the Secretary or by a participant, beneficiary,
or fiduciary. State courts of competent jurisdiction and district courts of the
United States shall have concurrent jurisdiction of actions under subsection (a)
(1)(B) of this section.
20
Following the analysis of Part II above, the evidence supports a finding that the
fund was a fiduciary and the company assumed the role of a fiduciary. The
action was brought under subsection (a)(3) of subchapter I of ERISA, 29 U.S.C.
Sec. 1132(a)(3); consequently, the court had jurisdiction under 29 U.S.C. Sec.
1132(e)(1). See Pennsylvania Human Relations Comm'n, 669 F.2d at 126-28;
see also Great Lakes Steel v. Deggendorf, 716 F.2d 1101, 1104-05 (6th
Cir.1983). Because Sec. 1132(e)(1) confers jurisdiction in "civil actions," it
would be inconsistent with the statutory language if the court had jurisdiction to
hear the original complaint, but not to hear a motion in the same action. We
find that the court had jurisdiction to hear this motion.
IV
21
22
23
24
25
26
The Court explicitly did not interpret section 502(a)(3), which is at issue here.
28
For these reasons, it is not appropriate for a federal court to grant the requested
equitable relief to redress the state court's injunction. Resolving the issue
requires a determination of whether the injunction bond rule as applied in West
Virginia limits recovery to the amount of the bond when restitution is sought.
Another issue to be resolved is whether restitution can be recovered from the
union in view of the fact that the union received no part of the benefits paid to
the company's employees. We believe that Congress did not intend that federal
courts should develop common law to decide these issues that bear at best a
most attenuated relation to the purposes of ERISA. The state court, which
issued the injunction, is the appropriate forum for deciding these questions, not
the federal court.
29
state Workers' Compensation Act and not on any provision of the pension plan.
Section 502(a)(3) of ERISA provides no remedy for the company and the fund
for these extracontractual damages.
30
The judgment of the district court dismissing this action without prejudice is
affirmed.