In re Enron Corp. Securities, Derivative & Erisa

Decision Date30 September 2003
Docket NumberNo. CIV.A.H-01-3913.,No. MDL 1446.,MDL 1446.,CIV.A.H-01-3913.
Citation284 F.Supp.2d 511
PartiesIn re ENRON CORPORATION SECURITIES, DERIVATIVE & "ERISA" LITIGATION, Pamela M. Tittle, Thomas O. Padgett, Gary S. Dreadin, Janice Farmer, Linda Bryan, John L. Moore, Betty J. Clark, Shelly Farias, Patrick Campbell, Fanette Perry, Charles Prestwood, Roy Rinard, Steve Lacey, Catherine Stevens, Roger W. Boyce, Wayne M. Stevens, Norman L. and Paula H. Young, Michael L. McCown, and Dan Schultz, on behalf of themselves and a class of persons similarly situated, and on behalf of the Enron Corp. Savings Plan, the Enron Corp. Employee Stock Ownership Plan, and the Enron Corp. Cash Balance Plan, Plaintiffs v. Enron Corp., an Oregon Corporation, Enron Corp. Savings Plan Administrative Committee, Enron Employee Stock Ownership Plan Administrative Committee, Cindy K. Olson, Mikie Rath, James S. Preston, Mary K. Joyce, Sheila Knudsen, Rod Hayslett, Paula Rieker, William D. Gathmann, Tod A. Lindholm, Philip Bazelides, James G. Barnhart, Keith Crane, William J. Gulyassy, David Shields, John Does Nos. 1-100, Unknown Fiduciaries of the Enron Corp. Savings Plan or the Esop, the Northern Trust Co., Kenneth L. Lay, Jeffrey Skilling, Andrew S. Fastow, Michael Kopper, Richard Causey, James V. Derrick, Jr., the Estate of J. Clifford Baxter, Mark A. Frevert, Stanley C. Horton, Kenneth Rice, Richard B. Buy, Lou L. Pai, Robert A. Belfer, Norman P. Blake, Jr., Ronnie C. Chan, John H. Duncan, Wendy L. Gramm, Robert K. Jaedicke, Charles A. Lemaistre, Joe H. Foy, Joseph M. Hirko, Ken L. Harrison, Mark E. Koenig, Steven J. Kean, Rebecca P. Mark-Jusbasche, Michael S. McConnell, Jeffrey McMahon, J. Mark Metts, Joseph W. Sutton, Arthur Andersen & Co. Worldwide Societe Cooperative, Arthur Andersen LLP, Arthur Andersen United Kingdom, David B. Duncan, Thomas H. Bauer, Debra A. Cash, Roger D. Willard D. Stephen Goddard, Jr., Michael M. Lowther, Gary B. Goolsby, Michael C. Odom, Michael D. Jones, William Swanson, John Stewart, Nancy A. Temple, Donald Dreyfuss, James A. Friedlieb, Joseph F. Berardino, Andersen Does 2 Through 1800 Unknown Partners in Andersen LLP, Merrill Lynch & Co., Inc., J.P. Morgan Chase & Co., Credit Suisse First Boston Corporation, Citigroup, Inc., Salomon Smith Barney Inc., Vinson & Elkins, LLP, Ronald T. Astin, Joseph Dilg, Michael Finch, and Max Hendrick, III, Defendants.
CourtU.S. District Court — Southern District of Texas

Lynn Lincoln Sarko, Britt L. Tinglum, Derek W. Loeser, Erin M. Riley, Keller Rohrback LLP, Seattle, WA, Ron Kilgard, Gary A. Gotto, Laurie B. Ashton, Keller Rohrback PLC, Phoenix, AZ, Steve W. Berman, Clyde A. Platt, Jr., Kevin P. Roddy, Karl P. Barth, Andrew M. Volk, Jeniphr A. E. Breckenridge, Christopher A. Jarvis, Hagens & Berman LLP, Seattle, WA, R. Douglas Dalton, Dalton Gotto et al, Phoenix, AZ, James D. Baskin, III, The Baskin Law Firm, Austin, TX, James Eric Wren, III, Williams Squires et al, Waco, TX, Robin L. Harrison, Campbell Harrison et al, Randy J. McClanahan, McClanahan & Clearman, Billy Jack Shepherd, Cruse Scott et al, John G. Emerson, Jr., Emerson Poynter LLP, Thomas E. Bilek, Hoeffner & Bilek LLP, Tom Alan Cunningham, Cunningham Darlow et al, Paul Thomas Warner, Reich & Binstock, Richard Eugene Norman, Douglas & Norman, Bonnie E. Spencer, Spencer and Associates, Roger B. Greenberg, Schwartz Junell et al, William Charles Slusser, Slusser & Frost LLP, Houston, TX, Cary Ira Schacht, Cynthia S. Schiffer, Raymond P. Harris, Jr., Whittenburg Whittenburg et al, Dallas, TX, George Whittenburg, Susan L. Burnette, C. Jared Knight, Karl L. Baumgardner, Whittenburg Whittenburg et al, Amarillo, TX, Gary A. Orseck, Kathryn Schaefer Zecca, Lawrence S. Robbins, Robbins Russell Englert Orseck & Untereiner, LLP, Washington, DC, Amelia Rudolph, Sutherland Asbill et al, Atlanta, GA, Frank W. Morgan, Frank W. Morgan & Asoc, The Woodlands, TX, Andrew M. Schatz, Robert A. Izard, Wayne T. Boulton, Schatz & Nobel PC, Hartford, CT, G. Douglas Jones, Joe R. Whatley, Whatley Drake LLC, Birmingham, AL, Damon Michael Young, Young Pickett et al, Texarkana, TX, Mark Jeffrey Dearman, Dearman & Gerson, Plantation, FL, Joseph H. Weiss, Weiss & Yourman, Tzivia Brody, Stull Stull et al, New York City, Andy Wade Tindel, Provost & Umphrey Law Firm, Tyler, TX, Thomas Walter Umphrey, Provost & Umphrey, Beaumont, TX, for Plaintiffs.

Martin J. Bienenstock, Scott David Lassetter, John B. Strasburger, Weil Gotshal and Manges, Robin C. Gibbs, Gibbs & Bruns, H. Bruce Golden, Golden & Owens LLP, J. Clifford Gunter, III, Bracewell & Patterson, George W. Billy Shepherd, III, Cruse Scott et al, Eric J.R. Nichols, Beck Redden & Secrest, Jack C. Nickens, Nickens Keeton et al, Barry G. Flynn, Attorney at Law, Craig Smyser, Jr., Smyser Kaplan & Veselka, Joseph D. Jamail, II, Jamail and Kolius, Murray J. Fogler, McDade Fogler et al, Linda L. Addison, Fulbright and Jaworski, J. Cal Courtney, Jr., Courtney and Associates, Russell "Rusty" Hardin, Jr., Rusty Hardin and Associates, Edward John O'Neill, Jr., Jason Carrington Norwood, Clements O'Neill et al, Jacalyn D. Scott, Wilshire Scott et al, Richard Warren Mithoff, Jr., Mithoff and Jacks, Lawrence David Finder, Haynes & Boone LLP, Taylor M. Hicks, Jr., Hicks Thomas et al, William Edward Matthews, Gardere Wynne et al, Harvey G. Brown, Jr., Orgain Bell et al, Houston, TX, Anthony C. Epstein, F. Michael Kail, Paul J. Ondrasik, Jr., Steptoe & Johnson LLP, David Clarke, Jr., Keara M. Gordon, Piper Marbury et al, Bruce A. Hiler, Gregory Y Porter, Karen M. Wahle, Kathleen P. Kelly, O'Melveny & Myers, Robert M. Stern, Attorney at Law, Luisa Caro, Michael D. Warden, Sidley Austin et al, Justin S. Antonipillai, Scott B. Schreiber, Arnold & Porter, George A. Borden, John K. Villa, Mary G. Clark, Williams & Connolly LLP, David E. Ross, Mark C. Hansen, Kellogg Huber et al, Amy M. McNamer, Deborah J. Jeffrey, Karen Bell Eisenberg, Norman L. Eisen, Roger E. Zuckerman, Steven M. Salky, Zuckerman Spaeder LLP, Washington, DC, Amy Joseph Pedersen, William F. Martson, Zachary W.L. Wright, Tonkon Torp LLP, Portland, OR, James E. Coleman, Jr., Carrington Coleman et al, Gayle

Anne Boone, Bracewell & Patterson, Charles A. Gall, Rodney Acker, Jenkens & Gilchrist, Dallas, TX, John J. McKetta, III, Graves Dougherty et al, Austin, TX, Christa M. Anderson, Jan Nielsen Little, John W. Keker, Kerker & Van Nest LLP, San Francisco, CA, Richard Bruce Drubel, Jr., Boies Schiller et al, Hanover, NH, Gregory P. Joseph, Attorney at Law, Benard V. Preziosi, Eliot Lauer, Michael J. Moscato, Peter Fleming, Jr., Theresa Ann Foudy, Curtis Mallet-Prevost et al, Catherine E. Palmer, Latham & Watkins, Alyssa A. Qualls, Brad S. Karp, Claudia Hammerman, Jonathan Hurwitz, Margaret E. McGuinness, Mark F. Pomerantz, Michael E. Gertzman, Richard A. Rosen, Robert C. Weisz, Robyn F. Tarnofsky, Todd A. Kipnes, Paul Weiss et al, Bruce D. Angiolillo, Christopher M. Caparelli, David J. Woll, George S. Wang, Jill M. O'Toole, John D. Roesser, Jonathan K. Youngwood, Nihara K. Choudhri, Pieter H.B. Van Tol, Thomas C. Rice, William M. Tong, Simpson Thacher et al, Joseph R. Wallin, Julie Ann North, Karin A. DeMasi, Margaret K. Dooley, Melissa J. Baily, Rachel G. Skaistis, Richard W. Clary, Cravath Swaine et al, James D. Miller, Clifford Chance US LLP, Marshall R. King, Robert F. Serio, Gibson Dunn & Crutcher, New York, NY, Miles N. Ruthberg, Latham & Watkins, Los Angeles, CA, Peter Wald, Latham & Watkins, San Francisco, CA, J. Hoke Peacock, II, Orgain Bell & Tucker, Beaumont, TX, for Defendants.

Donald J. Myers, Douglas K. Spaulding, Michael B. Richman, Reed Smith LLP, Stephen M. Saxon, Groom Law Group CHTD, Washington, DC, for Amicus.

Carolyn S. Schwartz, pro se, US Trustee, New York City, for Trustee.

MEMORANDUM AND ORDER

HARMON, District Judge.

                TITTLE ROADMAP
                 I. Overview of Causes of Action and Pending Motions .............................  531
                II. Applicable Law ...............................................................  543
                    A.   ERISA ...................................................................  543
                         1. Fiduciary Liability ..................................................  543
                            a.  Expansive Definition ......................................         543
                            b.  Fiduciary Duties ..........................................         546
                            c.  "Two-Hat" Doctrine ........................................         550
                            d.  Power to Appoint/Remove Plan Fiduciaries ..................         552
                            e.  Duty to Disclose ..........................................         555
                            f.  Personal Liability of Corporate Employees .................         567
                            g.  Professional Liability ....................................         570
                            h.  Section 404(c) Plans ......................................         574
                            i.  Causation .................................................         579
                         2. Co-fiduciary Liability ................................................ 580
                         3. Directed Trustee Liability ............................................ 581
                         4. Standing and Remedies ................................................. 602
                         5. Service on and Liability of the Administrative Committees of the
                              Plans as Unincorporated Associations ................................ 614
                    B.   RICO Amendment............................................................
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