United States District Court, Northern District of Illinois, E.D
March 24, 1983
AMALGAMATED INDUSTRIAL UNION LOCAL 44-A HEALTH AND WELFARE FUND, PLAINTIFF,
JAMES WEBB, AN INDIVIDUAL AND WILLIAM KILLACKY, AN INDIVIDUAL, DEFENDANTS.
The opinion of the court was delivered by: William T. Hart, District Judge.
MEMORANDUM OPINION AND ORDER
This is an action brought pursuant to the Employee Retirement
Income Security Act, 29 U.S.C. § 1001, et seq. (Supp. IV 1980)
("ERISA" or "Act"). Jurisdiction is asserted pursuant to section
1132(e)(1) of the Act. The plaintiff, Amalgamated Industrial
Union Local 44-A Health and Welfare Fund ("Fund"), is an employee
benefit plan subject to the Act's provisions. In a two count
complaint, the Fund alleges that defendants James Webb ("Webb"),
a Fund trustee and fiduciary, and William Killacky ("Killacky"),
a Fund fiduciary, have violated certain provisions of ERISA by
receiving excessive compensation from the Fund. Accordingly, the
Fund argues that each defendant must repay the Fund all sums
In Count I, the Fund asserts that Webb received, during the
period from January 1, 1978 to June 30, 1981, "excessive" salary
from the Fund while concurrently receiving "substantial" salary
as President of Amalgamated Industrial Union Local 44-A. The Fund
argues that such dual compensation violates sections
1106(a)(1)(C), 1106(a)(1)(D), 1106(b)(1),*fn1 and 1108(c)(2)*fn2
of the Act. In Count II, the Fund alleges that Killacky, who
served the Fund as an insurance broker, agent and consultant from
January 1, 1976 to June 30, 1981, received excessive compensation
for services rendered and for
services never rendered, in violation of sections 1106(a)(1)(C),
1106(a)(1)(D), and 1108(b)(2)*fn3 of ERISA.
Presently before the Court are defendants' motions to dismiss
the complaint for lack of subject matter jurisdiction,
Fed.R.Civ.P. 12(b)(1), and for failure to state claims upon
which relief can be granted, Fed.R.Civ. 12(b)(6). Killacky also
has moved to dismiss Count II due to the alleged untimeliness of
certain of the claims against him and to sever the counts into
separate actions. Because the Court finds that it lacks subject
matter jurisdiction, it is without the power to consider the
merits of the Fund's claims or to resolve the defendants'
remaining motions. This matter is dismissed.
The Fund claims that it has standing to bring this suit under
ERISA pursuant to 29 U.S.C. § 1132(d)(1). Subsection (d)(1)
states that "[a]n employee benefit plan may sue or be sued under
this subchapter as an entity." It is the "sue or be sued"
language which, the Fund says, confers subject matter
jurisdiction on this Court. The defendants, however, argue that
the trustees and not the Fund are the proper plaintiff, and that
unless the trustees expressly authorized their attorney to bring
suit on behalf of the Fund, no standing is conferred on the Fund.
The parties cannot agree that the attorney had such authority.
The Court need not untangle their disagreement, however. Even if
the trustees had voted to allow their attorney to sue in the
Fund's name, this suit would be improper.
Whether a district court has subject matter jurisdiction over a
suit brought by an employee benefit plan under ERISA is a
question of first impression in the Seventh Circuit. In fact,
until Pressroom Unions-Printers League Income Security Fund v.
Continental Assurance Co., 700 F.2d 889 (2d Cir. 1983), there
apparently were no reported decisions on the issue by any federal
circuit or district court. Despite the absence of a line of
precedential cases, however, this Court must proceed from what is
explicitly clear: a district court is a court of limited
jurisdiction. It may not infer a grant of jurisdiction without a
clear legislative mandate. See Middlesex County Sewage
Authority v. National Sea Clammers Association, 453 U.S. 1, 14,
101 S.Ct. 2615, 2623, 69 L.Ed.2d 435 (1981); Transamerica
Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S.Ct.
242, 62 L.Ed.2d 146 (1979).
In Pressroom Unions, the Second Circuit held that section
1132(e)(1) of the Act is an exclusive jurisdictional grant which
does not contemplate a fund as a plaintiff. That section is
captioned "Jurisdiction." In pertinent part it provides that "the
district courts of the United States shall have exclusive
jurisdiction of civil actions under this subchapter brought by
the Secretary [of Labor] or by a participant, beneficiary, or
fiduciary" [of a fund]. Furthermore, section 1132(a), captioned
"Persons empowered to bring civil actions," confers standing
upon the same persons — the Secretary or a participant,
beneficiary or fiduciary.
The plaintiff fund in Pressroom Unions agreed that sections
1132(a) and 1132(e)(1) did not expressly include a fund among
their standing and jurisdictional provisions. Undaunted, however,
the fund argued that the possibility of fund-initiated suits was
not foreclosed so long as another ERISA provision made such suits
cognizable. Like the Fund in the instant action, the Pressroom
Union fund argued that section 1132(d)(1) permits a fund to "sue
and be sued."
Despite the explicit "sue and be sued" language in section
1132(d)(1), the Second Circuit rejected the fund's reliance on
that section. First, the court noted that section
1132(d)(1) is captioned "Status of employee benefit plan as an
entity." (emphasis added). Then, the court explained the
apparent contradiction between that section and the
jurisdictional and standing provisions in sections 1132(e)(1)
[Section 1132(d)(1) ] only establishes the right of
plans created by ERISA to sue and be sued like
corporations and other legal entities. Without such a
provision, a pension plan would not be a legally
cognizable body [citation omitted]. Affording plans
the power to sue does not, however, imply that they
may bring actions under ERISA; it merely authorizes
suits to be brought by funds in other
situations. . . . For example, . . . to pursue a
state law claim.
Id. at 1890-93.
Furthermore, ERISA's legislative history, like the Act's
provisions, makes frequent reference to "participants,
beneficiaries and fiduciaries" as parties plaintiff and not to
employee benefit plans or funds. See, e.g., H.R.Rep. No. 533,
93rd Cong., 2d Sess., reprinted in  U.S.Code Cong. & Ad.
News, pp. 4639, 4655 (1974). The Congressional omission of a fund
as a plaintiff must be construed as intentional and consistent
with the analysis of the Second Circuit.
This Court adopts the reasoning of the Second Circuit in
Pressroom Unions. While the Amalgamated Industrial Union Fund
can sue to protect its rights as an entity or to redress an
injury to it, it cannot vindicate those rights or overcome its
losses in federal court under ERISA.
For the reasons stated above, this Court is without subject
matter jurisdiction over the Fund's complaint; employee benefit
funds are not within ERISA's categorical grant of exclusive
jurisdiction. The action is dismissed.