Unisys Sav. Plan Litigation, In re, No. 91-
| Court | U.S. Court of Appeals — Third Circuit |
| Writing for the Court | MANSMANN |
| Citation | 74 F.3d 420 |
| Parties | , 19 Employee Benefits Cas. 2393, Pens. Plan Guide P 23916R In re UNISYS SAVINGS PLAN LITIGATION John P. MEINHARDT, on behalf of himself and all others similarly situated v. UNISYS CORPORATION (D.C.Civilcv-03067) Michael HECK; Joseph McCarthy; Angelo DiPietro, on behalf of themselves and all others similarly situated v. UNISYS CORPORATION; The Administrative Committee of the Unisys Savings Plan; The Investment Committee of the Unisys Savings Plan; Jack A. Blaine; John J. Loughlin; Kenneth Miller; David A. White; Stefan Riesenfeld (D.C.Civilcv-03276) Gary VALA, individually and on behalf of all others similarly situated v. Jack A. BLAINE; Michael R. Losey; Kenneth L. Miller; Stefan C. Riesenfeld; Curtis A. Hessler; David A. White; Unisys Corporation; The Northern Trust Company (D.C.Civil03278) Carolyn A. GOHLIKE, on behalf of herself and all others similarly situated v. UNISYS CORPORATION (D.C.Civilcv-03321) Dennis C. STANGA; James M. Collins, on behalf of themselves and all others similarly situated v. UNISYS CORPORATION (D.C.Civilcv-04689) John H. BURGESS, Jr., on behalf of himself and all others similarly situated v. UNISYS CORPORATION (D.C.Civilcv-04696) John P. Meinhardt, Michael Heck, Joseph McCarthy, Angelo DiPietro, Gary Vala, Carolyn Gohlike, Dennis C. Stanga, James M. Collins and John H. Burgess, Jr., Appellants inIn re UNISYS SAVINGS PLAN LITIGATION John P. MEINHARDT, on behalf of himself and all others similarly situated v. UNISYS CORPORATION (D.C.Civilcv-03067) Bernard McDEVITT, on behalf of himself and all others similarly situated v. UNISYS CORPORATION (D.C.Civilcv-03126) Parker C. KEAN, on behalf of himself and all others similarly situated v. UNISYS CORPORATION (D.C.Civilcv-03164) Nadia F. SOS; Farouk M. Sos, individually and on behalf of all others similarly situated v. UNISYS CORPORATION (D.C.Civilcv-03582) Kenneth GOERS; John J. Cieslicki, on behalf of themselves and all others similarly situated v. UNISYS CORPORATION; The Northern Trust Company ( |
| Decision Date | 06 February 1996 |
| Docket Number | Nos. 95-1156,95-1157 and 95-1186,No. 91-03278,No. 95-1157,No. 95-1186,No. 91-,No. 95-1156 |
Page 420
Pens. Plan Guide P 23916R
John P. MEINHARDT, on behalf of himself and all others
similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-03067)
Michael HECK; Joseph McCarthy; Angelo DiPietro, on behalf
of themselves and all others similarly situated
v.
UNISYS CORPORATION; The Administrative Committee of the
Unisys Savings Plan; The Investment Committee of the Unisys
Savings Plan; Jack A. Blaine; John J. Loughlin; Kenneth
Miller; David A. White; Stefan Riesenfeld (D.C.Civil No. 91-cv-03276)
Gary VALA, individually and on behalf of all others similarly situated
v.
Jack A. BLAINE; Michael R. Losey; Kenneth L. Miller;
Stefan C. Riesenfeld; Curtis A. Hessler; David
A. White; Unisys Corporation; The
Northern Trust Company
(D.C.Civil No. 91-03278)
Carolyn A. GOHLIKE, on behalf of herself and all others
similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-03321)
Dennis C. STANGA; James M. Collins, on behalf of themselves
and all others similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-04689)
John H. BURGESS, Jr., on behalf of himself and all others
similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-04696)
John P. Meinhardt, Michael Heck, Joseph McCarthy, Angelo
DiPietro, Gary Vala, Carolyn Gohlike, Dennis C.
Stanga, James M. Collins and John H.
Burgess, Jr., Appellants in No. 95-1156
In re UNISYS SAVINGS PLAN LITIGATION
John P. MEINHARDT, on behalf of himself and all others
similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-03067)
Bernard McDEVITT, on behalf of himself and all others
similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-03126)
Parker C. KEAN, on behalf of himself and all others similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-03164)
Nadia F. SOS; Farouk M. Sos, individually and on behalf of
all others similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-03582)
Kenneth GOERS; John J. Cieslicki, on behalf of themselves
and all others similarly situated
v.
UNISYS CORPORATION; The Northern Trust Company (D.C.Civil
No. 91-cv-04678)
William TORKILDSON
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-04754)
Bernard McDevitt, Parker Kean, Nadia F. Sos, Farouk M. Sos,
Kenneth Goers, John J. Cieslicki and William
Torkildson, Appellants in No. 95-1157
In re UNISYS SAVINGS PLAN LITIGATION
John P. MEINHARDT, on behalf of himself and all others
similarly situated
v.
UNISYS CORPORATION (D.C.Civil No. 91-cv-03067)
Henry ZYLLA; Richard Silver; Ronald Grippo; Edward
Lawler; Richard Andujar; Clarence Muller; Charles Wahler;
James McLaughlin; Donald Rader; Joseph Lau; James
Gangale; Alfred Contarino; Richard Colby; John Marcucci;
Joseph Fiore; Richard Mastrodomenico; Nick Klemenz; Peter
Szczybek, on behalf of themselves and all others similarly
situated; Engineers Union Local 444 of the International
Union of Electronic, Electrical, Salaried, Machine and
Furniture Workers, A.F.L.-C.I.O.; Locals 445 of the
International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers, A.F.L.-C.I.O.; Locals 450 of
the International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers, A.F.L.-C.I.O.; Locals 470 of
the International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers, A.F.L.-C.I.O.; Locals 165 of
the International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers, A.F.L.-C.I.O.; Local 3,
International Brotherhood of Electrical Workers, A.F.L.-C.I.O.
v.
UNISYS CORPORATION; Edwin P. Gilbert; John J. Loughlin;
Thomas Penhale, individually and in their capacities as
members of the Unisys Employee Benefits Executive Committee
and administrators of the Unisys Retirement Investment Plan;
Richard H. Bierly; Curtis A. Hessler; Leon J. Level;
Kenneth L. Miller; David A. White; Jack A. Blaine; Stefan
C. Riesenfeld; George T. Robson, individually and in their
capacities as members of the Investment Committee of the
Unisys Retirement Investment Plan (D.C. Civil No. 91-cv-03772)
Henry Zylla, Richard Silver, Ronald Grippo, Edward Lawler,
Richard Andujar, Clarence Muller, Charles Wahler, James
McLaughlin, Donald Rader, Joseph Lau, James Gangale, Alfred
Contarino, Richard Colby, John Marcucci, Joseph Fiore,
Richard Mastrodomenico, Nick Klemenz and Peter Szczybek,
individually and on behalf of the class certified,
Appellants in No. 95-1186.
Third Circuit.
Decided Jan. 4, 1996.
Sur Petition for Rehearing Feb. 6, 1996.
Page 424
James R. Malone, Jr. (Argued), Michael D. Gottsch, Chimicles, Jacobsen & Tikellis, Haverford, PA, Joel C. Meredith, Daniel B. Allanoff, Meredith, Cohen & Greenfogel, Philadelphia, PA, James I. Wasserman, Julian R. Birnbaum, Vladeck, Waldman, Elias & Engelhard, New York City, for Appellants: John M. Meinhardt, Michael Heck, Joseph McCarthy, Angelo R. DiPietro, Gary Vala,
Page 425
Carolyn Gohlike, Dennis C. Stanga, James M. Collins, John H. Burgess, Jr., Bernard McDevitt, Parker Kean, Nadia F. Sos, Farouk M. Sos, Kenneth Goers, John J. Cieslicki, William Torkildson, Henry Zylla, Richard Silver, Ronald Grippo, Edward Lawler, Richard Andujar, Clarence Muller, Charles Wahler, James R. McLaughlin, Donald Rader, Joseph Lau, James Gangale, Alfred Contarino, Richard Colby, John Marcucci, Joseph A. Fiore, Richard Mastrodomenico, Nick Klemenz, Peter Szczybek.Laurence Z. Shiekman (Argued), Pepper, Hamilton & Scheetz, Philadelphia, PA, Joseph A. Teklits, Unisys Corporation, Blue Bell, PA, for Appellees: Unisys Corporation, Administrative Committee of the Unisys Savings Plan, Investment Committee of the Unisys Savings Plan, Jack A. Blaine, John J. Loughlin, Kenneth L. Miller, David A. White, Stefan C. Riesenfeld, Michael R. Losey, Curtis A. Hessler, Edwin P. Gilbert, Thomas Penhale, individually and in their capacities as Benefits Executive Committee and administrators of the Unisys Retirement Investment Plan; Richard H. Bierly, Curtis A. Hessler, Leon J. Level, George T. Robson.
Marcia E. Bove, United States Department of Labor, Washington, DC, for Amicus-appellant Secretary of Labor.
Mary Ellen Signorille, American Association of Retired Persons, Washington, DC, for Amicus-appellant American Association of Retired Persons.
Robert N. Eccles, Karen M. Wahle, O'Melveny & Myers, Washington, DC, for Amicus-appellees: ERISA Industry Committee, American Standard Inc., Bethlehem Steel Corp., Merck & Co., Inc., Rockwell International Corp., Scott Paper Company, and USX Corporation.
Before: MANSMANN, SCIRICA and NYGAARD, Circuit Judges.
MANSMANN, Circuit Judge.
This consolidated class action is brought pursuant to the Employee Retirement Income Security Act of 1974, ("ERISA"), 29 U.S.C. Sec. 1001 et seq. (1985 & Supp.1995), and arises out of the collapse in 1991 of the Executive Life Insurance Company of California. The plaintiffs, participants in individual account pension plans that Unisys Corporation maintained for its employees, alleged, inter alia, that the defendants breached ERISA's fiduciary duties of prudence and diversification by investing plan assets in Executive Life guaranteed investment contracts, as well as ERISA's fiduciary duty of disclosure by providing participants with misleading or incomplete communications regarding these investments and Executive Life's financial condition. In their defense, the defendants raised a question of first impression, asserting that section 1104(c) of the Act, which relieves fiduciaries of liability for losses which result from a plan participant's exercise of control over individual account assets, applies. The plaintiffs appeal the district court's decision to grant the defendants' motion for summary judgment on the plaintiffs' breach of fiduciary duty claims.
We conclude that there are genuine issues of material fact as to whether the defendants breached section 1104(a)'s fiduciary duties and as to whether the defendants are entitled to section 1104(c)'s protection. We will, therefore, vacate the district court's grant of summary judgment in the defendants' favor and will remand the case to the district court for further proceedings.
I.
We begin our analysis by reviewing the evidence of record. In the fall of 1986, Burroughs Corporation and Sperry Corporation merged to form Unisys. Prior to the merger, both Sperry and Burroughs had maintained retirement savings plans for employees known as the Sperry Retirement Program--Part B (the "Sperry Plan") and the Burroughs Employees Savings Thrift Plan (the "BEST Plan"), respectively. Each plan permitted an employee to contribute a percentage of his or her compensation into an individual account and to direct that it be invested in any one or a number of funds that were comprised of different types of investments. One of the funds in both of these plans invested in guaranteed
Page 426
investment contracts ("GICs") issued primarily by insurers. A GIC is a contract under which the issuer is obligated to repay the principal deposit at a designated future date and to pay interest at a specified rate over the duration of the contract.Following the merger, the Sperry Plan and the BEST Plan were consolidated to form the Unisys Savings Plan, which took effect on April 1, 1988. 1 Like its predecessors, the Unisys Savings Plan established an individual account for each participant and offered several fund alternatives into which a participant could direct contributions on a tax-deferred basis: the Diversified Fund, the Indexed Equity Fund, the Active Equity Fund; the Unisys Common Stock Fund; the Short Term Investment Fund, and the Insurance Contract Fund. 2
The Insurance Contract Fund invested in GICs. The old Sperry Plan Fixed Income Fund, a vehicle for GICs, continued to exist, but was closed to new contributions. As GICs matured, assets invested in the...
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Meyer v. Berkshire Life Ins. Co., No. CIV.A. CCB-99-1432.
...Reich v. King, 861 F.Supp. at 383 (citations omitted); see also Olsen, 180 F.Supp.2d at 567 (citing In re: Unisys Sav. Plan Litig., 74 F.3d 420, 438 (3d Cir.1996)). In this case, the plaintiffs met their initial burden of establishing a failure to diversify the plans' assets. As stated, Mac......
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Difelice v. U.S. Airways, Inc., No. 1:04CV889.
...In opposition to this conclusion, U.S. Airways relies chiefly on the Third Circuit's decision in In re Unisys Savings Plan Litigation, 74 F.3d 420, 445-46 (3rd Cir.1996).21 Closely read, this opinion is neither apposite nor persuasive here. To begin with, because the DOL's regulations were ......
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Ely v. Bd. of Trs. of the Pace Indus. Union-Management Pension Fund, Case No. 3:18-cv-00315-CWD
...beneficiaries regarding plan benefits." In re Xerox Corp. ERISA Litig., 483 F.Supp.2d 206 (2007) (quoting In re Unisys Sav. Plan Litig., 74 F.3d 420, 441 (3d Cir.1996)). See also Carr v. Int'l Game Tech., 770 F. Supp. 2d 1080, 1095 (D. Nev. 2011). However, ERISA contains detailed requiremen......
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Sweda v. Univ. of Pa., No. 17-3244
...U.S. 409, 134 S.Ct. 2459, 2470, 189 L.Ed.2d 457 (2014) (citations and internal quotation marks omitted); In re Unisys Sav. Plan Litig. , 74 F.3d 420, 434 (3d Cir. 1996) (ERISA "protect[s] and strengthen[s] the rights of employees" and "encourage[s] the development of private retirement plan......
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Meyer v. Berkshire Life Ins. Co., No. CIV.A. CCB-99-1432.
...Reich v. King, 861 F.Supp. at 383 (citations omitted); see also Olsen, 180 F.Supp.2d at 567 (citing In re: Unisys Sav. Plan Litig., 74 F.3d 420, 438 (3d Cir.1996)). In this case, the plaintiffs met their initial burden of establishing a failure to diversify the plans' assets. As stated, Mac......
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Difelice v. U.S. Airways, Inc., No. 1:04CV889.
...In opposition to this conclusion, U.S. Airways relies chiefly on the Third Circuit's decision in In re Unisys Savings Plan Litigation, 74 F.3d 420, 445-46 (3rd Cir.1996).21 Closely read, this opinion is neither apposite nor persuasive here. To begin with, because the DOL's regulations were ......
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Ely v. Bd. of Trs. of the Pace Indus. Union-Management Pension Fund, Case No. 3:18-cv-00315-CWD
...beneficiaries regarding plan benefits." In re Xerox Corp. ERISA Litig., 483 F.Supp.2d 206 (2007) (quoting In re Unisys Sav. Plan Litig., 74 F.3d 420, 441 (3d Cir.1996)). See also Carr v. Int'l Game Tech., 770 F. Supp. 2d 1080, 1095 (D. Nev. 2011). However, ERISA contains detailed requiremen......
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Sweda v. Univ. of Pa., No. 17-3244
...U.S. 409, 134 S.Ct. 2459, 2470, 189 L.Ed.2d 457 (2014) (citations and internal quotation marks omitted); In re Unisys Sav. Plan Litig. , 74 F.3d 420, 434 (3d Cir. 1996) (ERISA "protect[s] and strengthen[s] the rights of employees" and "encourage[s] the development of private retirement plan......