Dailey v. National Hockey League, 92-5156
| Decision Date | 19 March 1993 |
| Docket Number | No. 92-5156,92-5156 |
| Citation | 987 F.2d 172 |
| Parties | , 16 Employee Benefits Cas. 1609 Robert DAILEY; Reggie Leach, on behalf of themselves and all others similarly situated v. THE NATIONAL HOCKEY LEAGUE; The National Hockey League Pension Society; The Manufacturers Life Insurance Company; John Ziegler; Boston Professional Hockey Association, Inc.; Calgary Flames Hockey Club; Chicago Blackhawk Hockey Team, Inc.; Detroit Red Wings, Inc.; Edmonton Oilers Hockey, Ltd.; 8 Hockey Ventures, Inc.; Hartford Whalers Hockey Club; Le Club De Hockey Canadien, Inc.; Le Club De Hockey Les Nordiques; L.A. Kings, Ltd.; Maple Leaf Gardens Limited; Meadowlanders, Inc.; Nassau Sports; New York Rangers Hockey Club, a Division of Madison Square Garden Center, Inc.; Niagara Frontier Hockey, L.P.; Northstar Hockey Club; Philadelphia Flyers Limited Partnership; Pittsburgh Penguins, Inc.; St. Louis Blues Hockey Club, L.P.; Vancouver Hockey Club, Ltd.; Washington Hockey Limited Partnership, Appellants. |
| Court | U.S. Court of Appeals — Third Circuit |
Richard P. McElroy (Argued), Stephen M. Orlofsky, Ann B. Laupheimer, Jane C. Silver, Blank, Rome, Comisky & McCauley, Philadelphia, PA, for all appellants except The Manufacturers Life Ins. Co.
Daniel Segal, Claire Rocco, Hangley, Connoly, Epstein, Chicco, Foxman & Ewing, Philadelphia, PA, Steuart Thomsen, Sutherland, Asbill & Brennan, Washington, DC, for The Manufacturers Life Ins. Co.
Joseph H. Kenney (Argued), Mark Schwartz, Kenney & Kearney, Cherry Hill, NJ, Edwin T. Ferren, III, Richman & Ferren, David E. Ferguson, Haddonfield, NJ, for appellees.
Before: HUTCHINSON, ALITO and SEITZ, Circuit Judges.
This is a permitted interlocutory appeal by defendants pursuant to 28 U.S.C. § 1292(b) from an order of the district court denying their motion to dismiss. The district court granted defendants' motion to certify the following question:
Does the assertion by the plaintiff of a claim under ERISA over which there is exclusive jurisdiction in federal court preclude dismissal under the doctrine of forum non conveniens and likewise preclude dismissal based on lack of subject matter jurisdiction under Princess Lida of Thurn & Taxis v. Thompson, 305 U.S. 456, 59 S.Ct. 275, 83 L.Ed. 285 (1939)?
This class action was instituted in the district court by a group of former hockey players ("Players" or "plaintiffs") in the National Hockey League ("NHL"). It was filed against the NHL; the National Hockey League Pension Society ("Pension Society"); the Manufacturers Life Insurance Company ("Manulife"); John Ziegler, the president of the NHL; and all member The Players alleged that the League breached the fiduciary duties it owed them as well as terms of the NHL Pension Plan and Trust Agreement ("trust" or "agreement"). They also alleged violations of various provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq., involving the funding, administration, and management of the National Hockey League Pension Plan and Trust ("pension plan").
clubs of the NHL (collectively, the "League" or "defendants").
The NHL established a pension plan in 1947 and first embodied it in a written agreement in 1967. 1 It was amended several times between 1967 and 1986. Under the original agreement, both players and their respective member clubs were to make contributions to the plan. After the first amendment, players were no longer required to make contributions. Instead, the member clubs provided full funding for the plan. Funds in the plan were invested in a group annuity contract with defendant Manulife. It is the surplus generated under this contract and the League's treatment of it which forms the basis for the two suits.
The pension plan contained provisions which required that all surplus funds generated by the plan be used solely for the benefit of the participating players and their beneficiaries. Any surplus generated was to be allocated to the participating players' accounts at five-year intervals. The plan also prohibited amendments of the agreement to the detriment of the participants prior to the satisfaction of all liabilities under the plan.
The League moved to dismiss this action for lack of subject matter jurisdiction based on the existence of a case pending in a Canadian court at the time this action was commenced. It also moved to dismiss on forum non conveniens grounds.
The Canadian action was made a "representative" action by the Canadian court (analogous to our class action). The Canadian class represents only those players who retired before July of 1982, whereas the class in this action includes those players who retired prior to 1988. 2 The defendants in both actions are identical except that the NHL is not named as a defendant in the Canadian action.
Although the claims asserted in the action before this court are based primarily on ERISA, whereas the claims in the Canadian action are based on Canadian law, both actions allege the same wrongdoing and seek similar relief.
The applicants (plaintiffs) in the Canadian action seek:
1. A declaration that all pension surpluses accruing between 1947 and December 9, 1983 are to be allocated among the plan participants and their beneficiaries.
2. An order that the surpluses transferred to the member clubs and the Pension Society be allocated to the plan participants and their beneficiaries.
3. A declaration that the Pension Society and the NHL are in breach of their legal and fiduciary duties for their actions in contravention of the plan agreement relating to the use of and allocation of surplus.
4. A declaration that any amendments to the pension plan are null and void to the extent they allocate surplus to persons other than plan participants and their beneficiaries.
5. An order that the Pension Society allocate surplus currently held to the plan participants and their beneficiaries and that the member clubs make restitution of any shortfalls arising from their improper receipt of funds from the pension plan.
6. An accounting of funds allocated or to be allocated among the plan participants and their beneficiaries.
7. An order replacing the Pension Society as trustee and appointing a new trustee.
8. An award of costs on a solicitor-and-his-own-client basis.
As noted, the plaintiffs in this action seek essentially the same relief. No liquidated damages issue is involved in the present context.
The district court denied the League's motion to dismiss. In doing so, it rejected defendants' argument that dismissal was warranted under the Princess Lida doctrine and on grounds of forum non conveniens. Our review here under 28 U.S.C. § 1292(b) is limited to questions of law raised by the order. United States v. Stanley, 483 U.S. 669, 677, 107 S.Ct. 3054, 3060, 97 L.Ed.2d 550 (1987); Ivy Club v. Edwards, 943 F.2d 270, 275 (3d Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 1282, 117 L.Ed.2d 507 (1992). In deciding these questions, however, we are not constrained by the question certified, rather "we may address any issue necessary to decide the appeal before us." Ivy Club, 943 F.2d at 275 (citing Morse/Diesel, Inc. v. Trinity Indus., Inc., 859 F.2d 242, 249 (2d Cir.1988)). Because the Supreme Court in Princess Lida formulated its doctrine in terms of subject matter jurisdiction, we will first address that issue.
The principal certified question is whether the assertion of a claim under ERISA, which is subject to exclusive federal court jurisdiction, precludes dismissal under the Princess Lida doctrine. However, we think it is preferable to consider first whether Princess Lida is applicable without regard to ERISA. We proceed to that task.
In Princess Lida, trustees of a fund in which Lida and her sons were beneficiaries brought an accounting action in the Common Pleas Court of Fayette County, Pennsylvania. Thereafter, Lida and one of her sons brought suit in the district court alleging that the trustees had mismanaged the trust funds and praying for a removal of the trustees and a restoration of corpus. Princess Lida v. Thompson, 305 U.S. 456, 458-60, 59 S.Ct. 275, 277-78, 83 L.Ed. 285 (1938). The Supreme Court held that the earlier accounting action was quasi in rem and that the district court lacked subject matter jurisdiction. Id. at 465-68, 59 S.Ct. at 280-81. This holding was based on the doctrine which prevents a court in which an action is filed from exercising jurisdiction when a court in a previously filed action is exercising control over the property at issue and the second court must exercise control over the same property in order to grant the relief sought. As the Court said in Princess Lida:
We have said that the principle applicable to both federal and state courts that the court first assuming jurisdiction over property may maintain and exercise that jurisdiction to the exclusion of the other, is not restricted to cases where property has been actually seized ... but applies as well where suits are brought to marshal assets, administer trusts, or liquidate estates, and in suits of a similar nature where, to give effect to its jurisdiction, the court must control the property.
Id. at 466, 59 S.Ct. at 280 (footnote and citations omitted). Our future reference to the Princess Lida doctrine will embrace only the quoted language of the opinion.
The quoted principle of Princess Lida was well established in prior Supreme Court precedents. See United States v. Bank of N.Y. & Trust Co., 296 U.S. 463, 477-78, 56 S.Ct. 343, 347-48, 80 L.Ed. 331 (1936); Penn Gen. Casualty Co. v. Pennsylvania, 294 U.S. 189, 195, 55 S.Ct. 386, 389, 79 L.Ed. 850 (1935). Its continuing validity is undisputed. See Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 818, 96 S.Ct. 1236, 1246, 47 L.Ed.2d 483 (1976) (...
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