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CHAO v. LINDER

United States District Court, N.D. Illinois, Eastern Division


December 14, 2005.

ELAINE L. CHAO, Secretary of Labor, United States Department of Labor, Plaintiff,
v.
MICHAEL LINDER, et al., Defendants.

The opinion of the court was delivered by: JAMES MORAN, Senior District Judge

MEMORANDUM OPINION AND ORDER

The Secretary of Labor has sued various individuals, enterprises, and funds — the funds, we are told, are nominal parties. Defendant Brian Diskin has now moved to dismiss Count XIII. That motion is denied.

Plaintiff alleges that Diskin was a Plan trustee of the Local 380 Retirement Plan, authorized to take any action he deemed necessary for the protection of plan assets. The Plan invested in a fund managed by Gartmore Trust Company (Gartmore), and Gartmore paid fees to a third party plan administrator and plan consultant, Joseph/Anthony & Associates, Inc. (JAA), in breach of JAA's fiduciary obligations and contrary to the interests of the Plan. Diskin allegedly knew about it and did nothing.

  Diskin's motion contends that the claim is barred by the six-year limitations provision, that it fails to allege the fees were unlawful, that it fails to state specific statutory violations, and that it fails to claim a harm to the Plan. The complaint does state that the Plan invested in the Gartmore fund on March 2, 1998, more than six years before suit commenced, but the claim is not that the investment is actionable but that the payment of fees to JAA is — and we cannot tell from the complaint when and on how many occasions that happened. The other three grounds can be treated together. The Secretary, pursuant to 29 U.S.C. § 1132, may seek relief under 29 U.S.C. § 1109 for breaches of fiduciary duty. She charges that JAA got kickbacks and Diskin knew about it but did nothing. That is all she need allege.

20051214

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