Mertens v. Black, s. 90-16359

• Citation: 948 F.2d 1105
• Decision Date: 04 November 1991
• Docket Number: 90-16437 and 90-16439,Nos. 90-16359,s. 90-16359
• Parties: 14 Employee Benefits Cas. 1979 William J. MERTENS; Alex W. Bandrowski; James E. Clarke; Russell Franz, Plaintiffs-Appellees, v. Charles H. BLACK; Gerald G. Ferro; Richard N. Gary; Charles S. Holmes; Patrick J. Hunt; Robert Merrick; George M. Perry; Monty H. Rial; M. Edward Steward; Miles G. Yeagley, Defendants-Appellants, and Kaiser Steel Retirement Plan, Defendant. William J. MERTENS, et al., Plaintiff-Appellee, v. KAISER STEEL RETIREMENT PLAN, et al., Defendant-Appellant. William J. MERTENS, et al., Plaintiff-Appellee, v. PENSION BENEFIT GUARANTY CORPORATION, Defendant-Appellant, and Kaiser Steel Retirement Plan, et al., Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1105

948 F.2d 1105

14 Employee Benefits Cas. 1979

William J. MERTENS; Alex W. Bandrowski; James E. Clarke;

Russell Franz, Plaintiffs-Appellees, v. Charles H. BLACK; Gerald G. Ferro; Richard N. Gary;

Charles S. Holmes; Patrick J. Hunt; Robert Merrick;

George M. Perry; Monty H. Rial; M. Edward Steward; Miles

G. Yeagley, Defendants-Appellants,

and

Kaiser Steel Retirement Plan, Defendant.

William J. MERTENS, et al., Plaintiff-Appellee, v. KAISER STEEL RETIREMENT PLAN, et al., Defendant-Appellant.

William J. MERTENS, et al., Plaintiff-Appellee, v. PENSION BENEFIT GUARANTY CORPORATION, Defendant-Appellant, and Kaiser Steel Retirement Plan, et al., Defendant.

Nos. 90-16359, 90-16437 and 90-16439.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 14, 1991.

Decided Nov. 4, 1991.

Julia A. Molander, Bronson, Bronson & McKinnon, San Francisco, Cal., for defendants-appellants.

Jean Marie Breen, Office of Gen. Counsel, Washington, D.C., for Pension Benefit Guar. Corp., defendant-appellant in No. 90-16439 and defendant-appellee in Nos. 90-16359 and 90-16437.

Alfred H. Sigman, Sigman & Lewis, Oakland, Cal., for plaintiffs-appellees.

Appeal from the United States District Court for the Northern District of California.

Before NORRIS and THOMPSON, Circuit Judges, and KING, District Judge. ^*

PER CURIAM:

Participants in the Kaiser Steel Retirement Plan ("the Plan") brought this action to restore to the Plan losses allegedly resulting from breaches of fiduciary duty by members of the Plan's Investment Committee. Appellants, eleven individual members of the Plan's Investment Committee, appeal from the district court's denial of their motion for summary judgment. 744 F.Supp. 917. Appellants contend the prior judgment in Horan v. Kaiser Steel Retirement Plan, on appeal as Koch v. Kaiser Steel Retirement Plan, No. 89-56115 et seq., has preclusive effect here and bars relitigation of the ERISA fiduciary duty issues. We affirm the district court's denial of the summary judgment motion, although for reasons different from those given by the district court.

Before applying either claim preclusion or issue preclusion, the moving party must demonstrate that the party against whom preclusion is sought was a party to the prior action, or in privity with a party to the prior action. Commissioner v. Sunnen, 333 U.S. 591, 597, 68 S.Ct. 715, 719, 92 L.Ed. 898 (1948) (claim preclusion); United States v. ITT Rayonier, Inc., 627 F.2d 996, 1000 (9th Cir.1980) (claim preclusion); Robi v. Five Platters, Inc., 838 F.2d 318, 326-27 (9th Cir.1988) (issue preclusion). The district court concluded that the plaintiffs in Horan were in privity with the plaintiffs in Mertens because both purported to represent the Plan. See Cramer v. General Tel. & Electronics Corp., 582 F.2d 259, 267 (3d Cir.1978), cert. denied, 439 U.S. 1129, 99 S.Ct. 1048, 59 L.Ed.2d 90 (1979); see also Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 140, 105 S.Ct. 3085, 3089, 87 L.Ed.2d 96 (1985) (suits under ERISA for breach of fiduciary duty must be brought on behalf of the Plan); Sokol v. Bernstein, 803 F.2d 532, 536 (9th Cir.1986) (no right of action under section 409 for "beneficiary qua beneficiary.").

The district court based its conclusion that the Horan plaintiffs represented the Plan on the premise that under Russell, they could not bring individual claims for individual remedies. Because they could not bring these individual claims, reasoned the district court, the claims they presented must have been asserted on behalf of the Plan.

We reject this analysis. As we held in Koch, (cite), the Horan plaintiffs did not purport to represent the Plan in asserting their claims, nor did they seek a recovery for the Plan. They sought a recovery from the fiduciaries which would provide them with individual annuities. Id.

The only reason suggested as to why we should reclassify the Horan plaintiffs claims into something they plainly are not is that if this is...