Peacock v. Thomas
| Citation | 516 U.S. 349,133 L.Ed.2d 817,116 S.Ct. 862 |
| Decision Date | 21 February 1996 |
| Docket Number | 941453 |
| Parties | D. Grant PEACOCK, Petitioner, v. Jack L. THOMAS |
| Court | United States Supreme Court |
Respondent Thomas filed an Employee Retirement Income Security Act of 1974 (ERISA) class action against his former employer, Tru-Tech, Inc., and petitioner Peacock, a Tru-Tech officer and shareholder, alleging that they had breached their fiduciary duties to the class in administering Tru-Tech's pension benefits plan, and seeking benefits due under the plan. The District Court entered a money judgment against Tru-Tech upon finding that it had breached its fiduciary duties, but ruled that Peacock was not a fiduciary. Thomas did not execute the judgment while the case was on appeal and, during that time, Peacock settled many of Tru-Tech's accounts with favored creditors, including himself. After the Court of Appeals affirmed the judgment and attempts to collect it from Tru-Tech proved unsuccessful, Thomas sued Peacock in federal court, asserting, inter alia, a claim for "Piercing the Corporate Veil Under ERISA and Applicable Federal Law." The District Court ultimately agreed to pierce the corporate veil and entered judgment against Peacock in the amount of the judgment against Tru-Tech. The Court of Appeals affirmed, holding that the District Court properly exercised ancillary jurisdiction over Thomas' suit.
Held: The District Court lacked jurisdiction over Thomas' subsequent suit. Pp. __-__.
(a) Neither ERISA's jurisdictional provision, 29 U.S.C. § 1132(e)(1), nor 28 U.S.C. § 1331 supplied the District Court with subject-matter jurisdiction over this suit. The Court rejects Thomas' suggestion that the suit arose under 29 U.S.C. § 1132(a)(3), which authorizes civil actions for "appropriate equitable relief . . . to redress [any] violations . . . of [ERISA] or the terms of [an ERISA] plan." Because Thomas' complaint in this lawsuit alleged no such violations, he failed to allege a claim for equitable relief. Even if ERISA permits a plaintiff to pierce the corporate veil, such piercing is not itself an independent ERISA cause of action and cannot independently support federal jurisdiction. The District Court erred in finding that he had properly stated such a claim, since ERISA does not provide for imposing liability for an extant ERISA judgment against a third party. Pp. __-__.
(b) Federal courts do not possess ancillary jurisdiction over new actions in which a fed eral judgment creditor seeks to impose liability for a money judgment on a person not otherwise liable for the judgment. Although ancillary jurisdiction may be exercised (1) to permit disposition by a single court of factually interdependent claims, and (2) to enable a court to function successfully by effectuating its decrees, Thomas has not carried his burden of demonstrating that this suit falls within either category. First, because a federal court sitting in a subsequent lawsuit involving claims with no independent basis for jurisdiction lacks the threshold jurisdictional power that exists when ancillary claims are asserted in the same proceeding as the claims conferring federal jurisdiction, claims alleged to be factually interdependent with and, hence, ancillary to claims brought in the earlier suit will not support federal jurisdiction over the subsequent suit. In any event, there is insufficient factual or logical interdependence between the claims raised in Thomas' first and second suits. Second, cases in which this Court has approved the exercise of ancillary enforcement jurisdiction over attachment, garnishment, and other supplementary proceedings involving third parties are inapposite. This case is governed by H.C. Cook Co. v. Beecher, 217 U.S. 497, 30 S.Ct. 601, 54 L.Ed. 855, in which the Court refused to authorize the exercise of ancillary jurisdiction in a subsequent lawsuit to impose an obligation to pay an existing federal judgment on a person not already liable for that judgment. As long as the Federal Rules of Civil Procedure sufficiently protect a judgment creditor's ability to execute on a judgment, ancillary jurisdiction should not be exercised over proceedings, such as the present, that are new actions based on different theories of relief than the prior decree. Pp. __-__.
39 F.3d 493 (C.A.4 1985), reversed.
—— — —
On Writ of Certiorari to the United States Court of Appeals for the Fourth Circuit.
David Lynn Freeman, for petitioner.
J. Kendall Few, Greenville, SC, for respondent.
Richard P. Bress, Washington, DC, for the United States, as amicus curiae by special leave of the Court.
This case presents the issue whether federal courts possess ancillary jurisdiction over new actions in which a federal judgment creditor seeks to impose liability for a money judgment on a person not otherwise liable for the judgment. We hold that they do not.
Respondent Jack L. Thomas is a former employee of Tru-Tech, Inc. In 1987, Thomas filed an ERISA class action in federal court against Tru-Tech and petitioner D. Grant Peacock, an officer and shareholder of Tru-Tech, for benefits due under the corporation's pension benefits plan. Thomas alleged primarily that Tru-Tech and Peacock breached their fiduciary duties to the class in administering the plan. The District Court found that Tru-Tech had breached its fiduciary duties, but ruled that Peacock was not a fiduciary. On November 28, 1988, the District Court entered judgment in the amount of $187,628.93 against Tru-Tech only. Thomas v. Tru-Tech, Inc., No. 87-2243-3, 1988 WL 212511 (D.S.C.). On April 3, 1990, the Court of Appeals for the Fourth Circuit affirmed. Judgt. order reported at, 900 F.2d 256. Thomas did not execute the judgment while the case was on appeal and, during that time, Peacock settled many of Tru-Tech's accounts with favored creditors, including himself.
After the Court of Appeals affirmed the judgment, Thomas unsuccessfully attempted to collect the judgment from Tru-Tech. Thomas then sued Peacock in federal court, claiming that Peacock had entered into a civil conspiracy to siphon assets from Tru-Tech to prevent satisfaction of the ERISA judgment.1 Thomas also claimed that Peacock fraudulently convey ed Tru-Tech's assets in violation of South Carolina and Pennsylvania law. Thomas later amended his complaint to assert a claim for "Piercing the Corporate Veil Under ERISA and Applicable Federal Law." App. 49. The District Court ultimately agreed to pierce the corporate veil and entered judgment against Peacock in the amount of $187,628.93 the precise amount of the judgment against Tru-Tech—plus interest and fees, notwithstanding the fact that Peacock's alleged fraudulent transfers totalled no more than $80,000. The Court of Appeals affirmed, holding that the District Court properly exercised ancillary jurisdiction over Thomas' suit. 39 F.3d 493 (C.A.4 1994). We granted certiorari to determine whether the District Court had subject-matter jurisdiction and to resolve a conflict among the Courts of Appeals.2 514 U.S. ----, 115 S.Ct. 1997, 131 L.Ed.2d 999 (1995). We now reverse.
Thomas relies on the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 832, as amended, 29 U.S.C. § 1001 et seq., as the source of federal jurisdiction for this suit. The District Court did not expressly rule on subject matter jurisdiction, but found that Thomas had properly stated a claim under ERISA for piercing the corporate veil. We disagree. We are not aware of, and Thomas does not point to, any provision of ERISA that provides for imposing liability for an extant ERISA judgment against a third party. See Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 833, 108 S.Ct. 2182, 2187, 100 L.Ed.2d 836 (1988) ().
We reject Thomas' suggestion, not made in the District Court, that this subsequent suit arose under § 502(a)(3) of ERISA, which authorizes civil actions for "appropriate equitable relief" to redress violations of ERISA or the terms of an ERISA plan. 29 U.S.C. § 1132(a)(3). Thomas' complaint in this lawsuit alleged no violation of ERISA or of the plan. The wrongdoing alleged in the complaint occurred in 1989 and 1990, some four to five years after Tru-Tech's ERISA plan was terminated, and Thomas did not—indeed, could not—allege that Peacock was a fiduciary to the terminated plan.3 Thomas further concedes that Peacock's alleged wrongdoing "did not occur with respect to the administration or operation of the plan." Brief for Respondent 11. Under the circumstances, we think Thomas failed to allege a claim under § 502(a)(3) for equitable relief. Section 502(a)(3) "does not, after all, authorize 'appropriate equitable relief' at large, but only 'appropriate equitable relief' for the purpose of 'redress[ing any] violations or . . . enforc[ing] any provisions' of ERISA or an ERISA plan." Mertens v. Hewitt Associates, 508 U.S. 248, ----, 113 S.Ct. 2063, 2067, 124 L.Ed.2d 161 (1993) ().
Moreover, Thomas' veil-piercing claim does not state a cause of action under ERISA and cannot independently support federal jurisdiction. Even if ERISA permits a plaintiff to pierce the corporate veil to reach a defendant not otherwise subject to suit under ERISA, Thomas could invoke the jurisdiction of the federal courts only by independently alleging a violation of an ERISA provision or term of the plan.4 Piercing the corporate veil is not itself an inde pendent ERISA cause of action, "but rather is a means of imposing liability on an underlying cause of action." 1 C. Keating & G. O'Gradney, Fletcher Cyclopedia of Law of...
To continue reading
Request your trial
-
Limehouse v. Hulsey
...to order its clerk to complete the ministerial task of mailing a certified copy of the order to the state court clerk. See Peacock v. Thomas, 516 U.S. 349, 354 (1996) ("[A] federal court may exercise ancillary jurisdiction... to enable a court to function successfully, that is, to manage it......
-
Browe v. CTC Corp.
...v. DeWolff, Boberg & Assocs., Inc. , 552 U.S. 248, 256, 128 S.Ct. 1020, 169 L.Ed.2d 847 (2008).16 See Peacock v. Thomas , 516 U.S. 349, 354, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996) ("Piercing the corporate veil is not itself an independent ERISA cause of action, but rather is a means of impos......
-
ENVIRONMENTAL DYNAMICS v. ROBERT TYER AND ASSOC.
...Co., 540 F.2d 681, 683 (4th Cir.1976) (other internal citations and quotations omitted)), rev'd on other grounds, ___ U.S. ___, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996). Consequently, the question here is, can the court determine on the summary judgment record that this case presents an except......
-
Boim v. Am. Muslims for Palestine
...claims or incidental proceedings that would not, on their own, suffice for federal jurisdiction. See Peacock v. Thomas , 516 U.S. 349, 355, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996) ("Ancillary jurisdiction may extend to claims having a factual and logical dependence on ‘the primary lawsuit,’ b......
-
Jennifer Liotta, Erisa Fiduciaries in Bankruptcy: Preserving Individual Liability for Defalcation and Fraud Debts Under 11 U.s.c. Sec. 523(a)(4)
...(such as a sham sale of a company designed to cancel a labor contract). Id. 127 See, e.g., Lutyk, 332 F.3d at 199. 128 Peacock v. Thomas, 516 U.S. 349, 354 (1996). 129 Id. 130 Lutyk, 332 F.3d at 193 n.6. 131 See Hudson County Carpenters Local Union No. 6 v. V.S.R. Constr. Corp., 127 F. Supp......
-
Ancillary Enforcement Jurisdiction: the Misinterpretation of Kokkonen and Expungement Petitions
...to enforce its orders to "preserve the fruits and advantages of a judgment or decree rendered").159. See, e.g., Peacock v. Thomas, 516 U.S. 349, 356-57 (1996). According to the Court, the proceedings involving third parties "includ[e] attachment, mandamus, garnishment, and the prejudicial a......
-
Removal jurisdiction and the All Writs Act.
...In several post-1993 decisions, the Supreme Court has continued to refer to the doctrine of ancillary jurisdiction. Sax Peacock v. Thomas, 516 U.S. 349, 354 n.5 (1996) (observing that "Congress codified much of the common-law doctrine of ancillary jurisdiction as part of 'supplemental juris......
-
Generalised Creditors and Particularised Creditors: Against a Unified Theory of Standing in Bankruptcy.
...4 (1950) (the existence of a fraudulent transfer presupposes separate persons, making veil piercing irrelevant). (130) Peacock v. Thomas, 516 U.S. 349, 354 (1996) ("Piercing the corporate veil is not itself an independent ERISA cause of action, 'but rather is a means of imposing liability o......