Chao v. Day
Decision Date | 24 January 2006 |
Docket Number | No. 05-5050.,05-5050. |
Citation | 436 F.3d 234 |
Parties | Elaine L. CHAO, Secretary of Department of Labor, Appellee v. Brittian P. DAY and A & D Insurance Agency, Inc., Appellants. |
Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from the United States District Court for the District of Columbia (No. 02cv01516).
John W. Karr argued the cause for appellants. With him on the brief was Theodore S. Allison.
Glenn M. Loos, Senior Trial Attorney, U.S. Department of Labor, argued the cause for appellee. With him on the brief was Elizabeth Hopkins, Attorney. Ellen L. Beard, Attorney, entered an appearance.
Before: GINSBURG, Chief Judge, and SENTELLE, Circuit Judge, and WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge SENTELLE.
The A & D Insurance Agency and its President, Brittian P. Day (collectively, "Day"), appeal the District Court's grant of summary judgment in favor of the Secretary of the Department of Labor, Elaine L. Chao (the "Secretary"), under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461. Day contends that he is not a "fiduciary" within the meaning of ERISA § 3(21)(A)(i), 29 U.S.C. § 1002(21)(A)(i), and thus not covered by the statute. We agree with the District Court and affirm.
The Secretary filed a complaint in the United States District Court for the District of Columbia against Day, alleging that he violated his fiduciary responsibilities through an illegal scheme to misappropriate insurance assets. See 29 U.S.C. § 1109(a) ( ); id. § 1132(a)(2) ( ). Specifically, the Secretary alleged that Day accepted hundreds of thousands of dollars from twenty-nine ERISA-covered employee benefit plans for the purpose of purchasing insurance for the plans. Under his brokerage scheme, Day sent invoices to the plans for various insurance policies, the plans paid the bills by sending checks to Day, and Day deposited the checks into his corporate account. Instead of using the plans' checks to purchase insurance, however, Day kept the money and provided the plans with fake insurance policies.
Day filed a motion to dismiss the Secretary's complaint, arguing that he did not fall within ERISA's definition of a "fiduciary." The District Court denied Day's motion and held Thereafter, the Secretary filed a motion for summary judgment, along with a statement of material facts and numerous exhibits. In response, Day filed a memorandum in opposition to the Secretary's motion, but Day did not file a separate statement of material facts. Taking the Secretary's statement of facts as undisputed, the District Court granted the Secretary's motion for summary judgment and ordered Day to pay almost $1 million in damages. The only issue on appeal is whether Day is a "fiduciary" under ERISA.
We review de novo the District Court's grant of summary judgment to the Secretary, viewing the record in the light most favorable to Day, the nonmoving party. See, e.g., Cruz v. Am. Airlines, Inc., 356 F.3d 320, 328 (D.C.Cir.2004). Summary judgment is appropriate only if there is no genuine issue of material fact, and judgment in the movant's favor is proper as a matter of law. See Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We take as true the Secretary's "statement of material facts" because Day failed to dispute them below. See Waterhouse v. Dist. of Columbia, 298 F.3d 989, 992 (D.C.Cir.2002).
Our analysis begins, as always, with the text of the statute. See Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002). Where, as here, it is plain and unambiguous, our analysis ends with the text as well. See Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997).
The relevant section of ERISA defines two classes of fiduciaries:
a person is a fiduciary with respect to a plan to the extent he [(a)] exercises any discretionary authority or discretionary control respecting management of such plan or [(b)] exercises any authority or control respecting management or disposition of its assets.
29 U.S.C. § 1002(21)(A)(i) (emphasis added). In the Secretary's view, Day falls within the scope of the second clause because he exercised "authority or control" over the "disposition of [the plans'] assets." In response, Day argues that fiduciaries under both the first and second clauses—hereinafter referenced as the "discretionary" and "disposition" clauses, respectively—require some element of discretionary "authority or control." Day contends he was simply an insurance salesman, and he did not exercise any discretion over the plans' assets—he was under strict instructions to use the plans' funds to purchase insurance coverage for the plans' members. Therefore, Day concludes, he cannot qualify as a "fiduciary" under ERISA.
We reject Day's interpretation of § 1002(21)(A)(i) because it does violence to the statutory text. The plain language of that text connects the two classes of "fiduciaries" with the disjunctive "or"—not the conjunctive "and." See, e.g., Garcia v. United States, 469 U.S. 70, 73, 105 S.Ct. 479, 83 L.Ed.2d 472 (1984) (); 1A NORMAN J. SINGER, STATUTES AND STATUTORY CONSTRUCTION § 21.14 at 181-82 (6th ed.2002) (); see also AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 873 (4th ed.2000) (defining "or" as "[u]sed to indicate . . . [a]n alternative . . ." (emphasis added)); MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 817 (10th ed.1996) ( ); VII OXFORD ENGLISH DICTIONARY 166 (1933) ( ). Congress plainly framed § 1002(21)(A)(i) in the alternative, and it further bifurcated the subsection with the parallel inclusion of the verb "exercises" at the beginning of both the discretionary and disposition clauses. We therefore cannot commingle the textually distinct provisions of the two clauses. See Overseas Educ. Ass'n v. FLRA, 876 F.2d 960, 975 (D.C.Cir.1989) (Buckley, J., concurring) ().
Our conclusion is further buttressed by the structure of the statute. The "discretion" requirement—which is repeated twice in the discretionary clause—is conspicuously omitted altogether from the disposition clause. Instead, in order to qualify as a "fiduciary" with respect to a plan's "assets," a person must simply exercise "any authority or control" over their management or disposition. 29 U.S.C. § 1002(21)(A)(i) (emphasis added). As the Supreme Court has instructed, "[w]e do not lightly assume that Congress has omitted from its adopted text requirements that it nonetheless intends to apply, and our reluctance is even greater when Congress has shown elsewhere in the same statute that it knows how to make such a requirement manifest." Jama v. Immigration & Customs Enforcement, 543 U.S. 335, 125 S.Ct. 694, 700, 160 L.Ed.2d 708 (2005). Day points to nothing—in either ERISA or the caselaw interpreting it—to overcome this reluctance. Day undeniably had "authority or control" over the "disposition" of the plans' "assets." The plans sent to Day checks made payable to him. Day then deposited the plans' funds into his account. Day was obligated to "control" the "disposition" of those funds for paying the plans' insurance premiums. Instead, Day absconded with the funds. Because the disposition clause contains no "discretion" requirement, it is irrelevant whether Day exercised "discretion" in his thievery. "[A]ny authority or control" is enough.
Therefore, in light of ERISA's statutory text and structure, we conclude Day was a "fiduciary," regardless of whether he possessed "discretionary authority or discretionary control" over the disposition of the plans' assets. Our conclusion comports with the results reached by every Court of Appeals that has considered the issue.1 See David P. Coldesina, D.D.S., P.C., Empl. Profit Sharing & Trust v. Estate of Simper, 407 F.3d 1126, 1132-35 (10th Cir.2005) ( ); Srein v. Frankford Trust Co., 323 F.3d 214, 220-22 (3d Cir.2003) ( ); LoPresti v. Terwilliger, 126 F.3d 34, 40 (2d Cir. 1997) ( ); IT Corp. v. Gen. Am. Life Ins. Co., 107 F.3d 1415, 1421 (9th Cir.1997) (...
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