William L. Pender v. Bank of America Corporation ( 2018 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 17-1485
WILLIAM L. PENDER; DAVID L. MCCORKLE,
Plaintiffs - Appellants,
and
ANITA POTHIER; KATHY L. JIMENEZ; MARIELA ARIAS; RONALD R.
WRIGHT; JAMES C. FABER, JR., On behalf of themselves and on behalf of all
others similarly situated,
Plaintiffs,
v.
BANK OF AMERICA CORPORATION; BANK OF AMERICA, NA; BANK OF
AMERICAN PENSION PLAN; BANK OF AMERICA 401(K) PLAN; BANK OF
AMERICA CORPORATION CORPORATE BENEFITS COMMITTEE; BANK
OF AMERICA TRANSFERRED SAVINGS ACCOUNT PLAN,
Defendants - Appellees,
and
UNKNOWN PARTY, John and Jane Does #1-50, Former Directors of NationsBank
Corporation and Current and Former Directors of Bank of America Corporation &
John & Jane Does #51-100, Current/Former Members of the Bank of America
Corporation Corporate Benefit; PRICEWATERHOUSE COOPERS, LLP;
CHARLES K. GIFFORD; JAMES H. HANCE, JR.; KENNETH D. LEWIS;
CHARLES W. COKER; PAUL FULTON; DONALD E. GUINN; WILLIAM
BARNETT, III; JOHN T. COLLINS; GARY L. COUNTRYMAN; WALTER E.
MASSEY; THOMAS J. MAY; C. STEVEN MCMILLAN; EUGENE M.
MCQUADE; PATRICIA E. MITCHELL; EDWARD L. ROMERO; THOMAS M.
RYAN; O. TEMPLE SLOAN, JR.; MEREDITH R. SPANGLER; HUGH L.
MCCOLL; ALAN T. DICKSON; FRANK DOWD, IV; KATHLEEN F.
FELDSTEIN; C. RAY HOLMAN; W. W. JOHNSON; RONALD TOWNSEND;
SOLOMON D. TRUJILLO; VIRGIL R. WILLIAMS; CHARLES E. RICE; RAY
C. ANDERSON; RITA BORNSTEIN; B. A. BRIDGEWATER, JR.; THOMAS E.
CAPPS; ALVIN R. CARPENTER; DAVID COULTER; THOMAS G. COUSINS;
ANDREW G. CRAIG; RUSSELL W. MEYER-, JR.; RICHARD B. PRIORY;
JOHN C. SLANE; ALBERT E. SUTER; JOHN A. WILLIAMS; JOHN R. BELK;
TIM F. CRULL; RICHARD M. ROSENBERG; PETER V. UEBERROTH;
SHIRLEY YOUNG; J. STEELE ALPHIN; AMY WOODS BRINKLEY;
EDWARD J. BROWN, III; CHARLES J. COOLEY; ALVARO G. DE MOLINA;
RICHARD M. DEMARTINI; BARBARA J. DESOER; LIAM E. MCGEE;
MICHAEL E. O'NEILL; OWEN G. SHELL, JR.; A. MICHAEL SPENCE; R.
EUGENE TAYLOR; F. WILLIAM VANDIVER, JR.; JACKIE M. WARD;
BRADFORD H. WARNER,
Defendants.
Appeal from the United States District Court for the Western District of North Carolina, at
Charlotte. Graham C. Mullen, Senior District Judge. (3:05-cv-00238-GCM)
Argued: March 21, 2018 Decided: June 5, 2018
Before KEENAN, WYNN, and FLOYD, Circuit Judges.
Affirmed by unpublished opinion. Judge Wynn wrote the majority opinion, in which Judge
Floyd joined. Judge Keenan wrote a dissenting opinion.
ARGUED: Julia Penny Clark, BREDHOFF & KAISER, PLLC, Washington, D.C., for
Appellants. Carter Glasgow Phillips, SIDLEY AUSTIN LLP, Washington, D.C., for
Appellees. ON BRIEF: Eli Gottesdiener, GOTTESDIENER LAW FIRM, PLLC,
Brooklyn, New York; Thomas D. Garlitz, THOMAS D. GARLITZ, PLLC, Charlotte,
North Carolina, for Appellants. Irving M. Brenner, MCGUIREWOODS LLP, Charlotte,
North Carolina; Anne E. Rea, David F. Graham, Tacy F. Flint, Steven J. Horowitz,
SIDLEY AUSTIN LLP, Chicago, Illinois, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
2
WYNN, Circuit Judge:
This Employment Retirement Income Security Act of 1974 (“ERISA”) case returns
to the Court for a third time. See Pender v. Bank of Am. Corp., 788 F.3d 354 (4th Cir.
2015); McCorkle v. Bank of Am. Corp., 688 F.3d 164 (4th Cir. 2012). Plaintiffs, a class of
current and former employees of Bank of America and certain of its predecessors
(collectively, with the Bank’s Pension Plan, the “Bank”), seek an equitable accounting for
any profits accruing to the Bank resulting from its unlawful transfer of the balances of
Plaintiffs’ 401(k) Plan accounts into the general account of the Bank’s Pension Plan.
Pender, 788 F.3d at 358. In 2015, this Court ruled that the district court erred in dismissing
Plaintiffs’ accounting action, and remanded the case to the district court to determine
whether the Bank retained any profit as a result of the unlawful transfers and its use of the
transferred funds. Id. at 368, 370.
On appeal, as it did before the district court, the Bank advances a simple, if
somewhat surprising, argument—that the Pension Plan’s investment strategy for the
unlawfully transferred funds, which was developed and implemented by the Bank’s trained
asset managers, performed far worse than Plaintiffs’ investment strategies, as reflected in
their 401(k) account investment allocations. Because Plaintiffs’ investment allocations
outperformed the Bank’s investment strategy—and the Pension Plan was responsible for
making up any shortfall between the performances of the Bank’s investment strategy and
Plaintiffs’ allocations—the Bank maintains that it did not profit from the transfers. After
conducting a four-day bench trial, during which the parties presented fact and expert
testimony and evidence, the district court agreed with the Bank and, therefore, dismissed
3
Plaintiffs’ action as moot. Pender v. Bank of Am. Corp., No. 3:05-CV-00238, 2017 WL
1536234, at *23 (W.D.N.C. Apr. 27, 2017). For the reasons that follow, we affirm.
I.
In 1998, the Bank amended its 401(k) Plan to provide eligible participants with the
opportunity to transfer their account balances to the Bank’s defined-benefit Pension Plan.
Pender, 788 F.3d at 358. Once transferred to the Pension Plan, beneficiaries could continue
to allocate their account balances among various investment options. Id. at 358. However,
unlike with balances held in the 401(k) Plan, which were actually invested in the selected
investment options, beneficiaries who elected to transfer their accounts to the Pension Plan
would have only notional (or hypothetical) accounts—the Bank could invest the
beneficiaries’ account balances however it saw fit. Id. In return for beneficiaries’
agreement to transfer their balances to the Pension Plan and the use of the beneficiaries’
funds, the Bank guaranteed that such beneficiaries’ account balances would not fall below
the amount in their account at the time of the transfer. Id. The Bank offered the transfer
option because it believed it could obtain a higher return with the beneficiaries’ money
than the beneficiaries were obtaining. Many beneficiaries elected to transfer their 401(k)
Plan account balances to the Pension Plan, with beneficiaries in aggregate transferring
nearly $2 billion in their 401(k) Plan balances to the Pension Plan for the Bank’s use.
In 2005, the Internal Revenue Service (the “IRS”) concluded that the transfers
violated ERISA’s “anti-cutback provision,” 29 U.S.C. § 1054(g)(1), which bars plan
amendments from decreasing a participant’s “accrued benefit.” Id. at 363. The IRS found,
4
and this Court later agreed, that stripping beneficiaries of the 401(k) Plan’s “separate
account feature” deprived beneficiaries of a meaningful benefit because it subjected plan
participants to the risk that the Bank would invest the transferred assets poorly, and
therefore lack sufficient funds to satisfy all of the returns a beneficiary obtained in his
notional investment account. Id. at 363–64 (“[T]he Bank’s promise that the value of the
transferred funds will not decrease below a certain threshold—even if, for example, it
invests Pension Plan assets poorly and loses money—is not the same as actually not
decreasing the account balance.”).
In 2008, the IRS reached a closing agreement 1 with the Bank, pursuant to which the
Bank “(1) paid a $10 million fine to the U.S. Treasury, (2) set up a special purpose 401(k)
plan, (3) . . . transferred Pension Plan assets that were initially transferred from the 401(k)
Plan to the special-purpose 401(k) plan,” and (4) made additional payments to certain plan
participants whose hypothetical return in their notional account was less than a defined
amount. Id. at 360. The Bank completed those transfers in 2009. Id. Importantly, as a
result of the transfers to the special-purpose 401(k) plan and the additional payments to
certain plan participants, all Plaintiffs’ current account balances are at least as large as they
would have been had the funds in Plaintiffs’ accounts actually been invested in accordance
with their notional allocations. Pender v. Bank of Am. Corp., No. 3:05-CV-238, 2013 WL
4495153, at *10 (W.D.N.C. Aug. 19, 2013), rev’d on other grounds, 788 F.3d 354.
1
A closing agreement is a binding agreement finally and conclusively settling—i.e.,
closing the file as to—a tax issue between the IRS and a taxpayer.
5
Around the same time that the IRS began to take action, Plaintiffs filed a variety of
equitable and statutory claims related to the transfers. Pender, 788 F.3d at 360. All but
one of those claims were dismissed and are not at issue in this appeal. McCorkle, 688 F.3d
at 169 n.4, 177. Plaintiffs’ lone remaining claim is premised on the Bank’s violation of the
anti-cutback provision. In 2013, the district court dismissed that claim on grounds that the
remedial provisions in the IRS closing agreement rendered such claims moot because it
restored the 401(k) Plan’s separate account feature. Pender, 2013 WL 4495153, at *5–9.
This Court reversed, explaining that Plaintiffs suffered a legally cognizable ongoing
injury if the Bank retained a profit as a result of its unlawful transfer of the 401(k) Plan
balances to the Pension Plan, and its investment of those balances. Pender, 788 F.3d at
364–65. In reaching that conclusion, this Court held that Plaintiffs could pursue relief
under ERISA Section 502(a)(3), which authorizes a plan beneficiary to obtain any
“appropriate equitable relief” to redress “any act or practice which violates” certain ERISA
provisions, including the anti-cutback provision. Id. at 363. This Court further concluded
that the “accounting for profits” sought by Plaintiffs is one form of “equitable relief”
available under Section 502(a)(3). Id. at 364–65.
On remand, the district court conducted a four-day bench trial to determine
“whether, after it restored the separate account feature and paid a $10 million fine to the
IRS, the Bank nevertheless profited from its transfer strategy.” Pender, 2017 WL 1536234,
at *4. At trial, as they do on appeal, Plaintiffs and the Bank offered distinct approaches to
determining whether the Bank retained a profit as a result of the transfer of the
beneficiaries’ 401(k) Plan account balances to the Pension Plan.
6
On the one hand, Plaintiffs focused on the undisputed fact that the transferred 401(k)
Plan balances were “pooled” or “commingled” with—rather than segregated from—the
funds of the Pension Plan. Id. Plaintiffs argued that, as a matter of black-letter equity law,
when improperly obtained funds are commingled with other funds, a plaintiff is entitled to
a share of the returns on all of the commingled funds in proportion to the unlawfully
obtained assets’ share of the commingled fund as a whole. Id. To that end, one of
Plaintiffs’ experts, Lawrence Deutsch, calculated—and the Bank does not dispute—that
the Pension Plan as a whole had a cumulative rate of return of 28.6% over the 1998 to 2009
period when the 401(k) Plan assets were pooled with the Pension Plan assets. See id.Allocating a proportionate share of the Pension Plan’s retained profit based on that return
rate to the 401(k) Plan participants who transferred their funds to the Pension Plan, Deutsch
calculated that the Bank retained $379 million in profit, including accrued interest, from
the unlawful transaction. Id. Although the Bank did not introduce its own analysis using
Plaintiffs’ proportionate-share-of-the-whole methodology, a Bank executive testified—in
accordance with Deutsch’s analysis—that the Pension Plan as a whole outperformed the
beneficiaries’ notional allocations during the relevant time period.
By contrast, the Bank asserted—and the district court found—that the Bank relied
on a different, contemporaneously documented, “Investment Strategy” for the 401(k)
balances transferred to the Pension Plan than for the remaining funds in the Pension Plan.
Id. at *4, *8. In particular, “[t]he core of the [Pension] Plan’s Investment Strategy was to
invest the assets used to fund the [transferred 401(k) accounts] more heavily in equities
than participants invested their hypothetical accounts, on the theory that equities would be
7
expected to outperform fixed income options over the long term. The [Pension] Plan did
this by matching or ‘hedging’ participant equity investments with [Pension] Plan equity
investments and investing approximately 60% of participant fixed income investments in
equities.” Id. at *5.
The Bank’s expert, Dr. Russell Wermers, sought to determine whether the
transferred balances returned a profit to the Bank under the Investment Strategy. To do so,
Wermers analyzed the performance of three asset classes included in the Pension Plan’s
general investment portfolio: domestic equities, international equities, and fixed income
assets. Pender, 2017 WL 1044965, at *7. Wermers used three benchmark indices to
estimate the returns of those asset classes over the relevant time period—the Russell 3000
for domestic equities, the MSCI EAFE Index for non-U.S. equities, and the Lehman
Brothers Aggregate Bond Index for fixed income assets. Id. Although the Pension Plan
did not necessarily invest in these indices, the Investment Policy identified these indices as
benchmarks for their respective asset classes, and directed the investment managers to
“[e]qual or exceed the return of the benchmark, net of fees, at a comparable level of risk.”
J.A. 841.
Wermers found that the two equity indices (Russell 3000 and MSCI EAFE) declined
during the relevant period, whereas the bond index increased by 81.1%. Pender, 2017 WL
1536234, at *7. Because (1) the Investment Strategy had the effect of overweighting equity
investments by matching 401(k) Plan participants’ equity allocations and treating their
fixed income investments as part of the Pension Plan’s general investment account and (2)
equities performed worse than fixed income assets during the relevant time, Wermers
8
opined that the transfer strategy must have resulted in a loss to the Pension Plan—in the
amount of the difference in performance between the Bank’s (underperforming) allocation
and the notional allocations by 401(k) Plan participants, which were less heavily weighted
toward equities. Id.In addition to Wermers’ opinion, the Bank also introduced contemporaneously
recorded and maintained spreadsheets, which, on an aggregate basis, tracked “participants’
hypothetical equity and fixed income investments” and compared those returns to the
returns realized by Pension Plan’s Investment Strategy. Id. at *8. Based on these
spreadsheets, a Bank executive responsible for monitoring the Pension Plan’s investments,
David Andreasen, calculated that the Investment Strategy of overweighting equity
investments resulted in a net investment loss to the Bank. Id. In particular, Andreasen
testified that the Investment Strategy for the transferred balances yielded a return of 3.5%
over the relevant period, compared to a 16.5% aggregate return on Plaintiffs’ notional
investments, leading to a loss of $149 million. Put differently, Andreasen concluded that
the Bank’s investment allocation performed far worse than the beneficiaries’ notional
allocations. Adding the costs associated with the IRS closing (such as the IRS penalty and
the costs of creating and transferring funds into the special purpose 401(k) plan),
Andreasen testified that the transfer resulted in a cumulative loss of $272 million. Id.
Finding that “[b]oth the Plaintiffs[’] and the Defendants[’] experts . . . presented a
coherent and facially plausible story for their parties” and none of their testimony was
“contradicted by objective evidence,” the district court nonetheless found that
“Defendants’ experts provided evidence at trial that is more credible than the testimony
9
provided by the Plaintiffs’ experts.” Id. at *4. In rendering this finding, the district court
determined that Deutsch’s approach was “not the appropriate measure of profits due to the
transfer,” because it focused on the performance of the Pension Plan as a whole, not profits
on the transferred 401(k) balances attributable to the Investment Strategy. Id. at *12; id. at
*13 (“The Bank’s profit from the transfer (if any) is best measured using the returns from
the Investment Strategy that the [Pension] Plan actually used to fund the [transferred 401(k)
Plan balances].”). Put differently, the district court concluded that use of Plaintiffs’ pro
rata or “proportionate-share-of-the whole” approach “would be inappropriate because it
would produce ‘profits’ having nothing to do with the transfers and therefore is contrary to
the purpose of this inquiry.” Id. at *18.
The district court further determined that “[t]he appropriate way to determine
whether there was a profit retained as a result of its investment strategy applied to the
transferred assets is to look at the returns attributable to that ‘investment strategy.’” Id.
(emphasis added) (internal quotation marks omitted); see also id. at *19 (stating that in
assessing a claim for an accounting for profits a court must “‘reach the best approximation
it can under the circumstances’ of the profit attributable to the conduct at issue” (quoting
Restatement (Third) of Restitution & Unjust Enrichment § 51 cmt. g (2011))). The court
said it embraced the Bank’s “attribution” approach because “Plaintiffs’ use of total
[Pension] Plan returns would confer an inappropriate windfall on participants, act as a
penalty and otherwise be inequitable.” Id. at *19. Applying the Bank’s attribution
approach and crediting Wermers’ and Andreasen’s analyses, the district court held that the
10
Bank did not retain any profit as a result of the transfer and, therefore, dismissed Plaintiffs’
claim for an accounting for profits as moot. Id. at *23. Plaintiffs timely appealed.
II.
On appeal, Plaintiffs argue that the district court reversibly erred in relying on the
Bank’s Investment Strategy to determine whether the Bank profited from the unlawfully
transferred funds—and therefore denying Plaintiffs equitable relief—rather than
calculating all profits accruing to the Pension Plan during the course of the commingling
of the funds and awarding Plaintiffs a proportionate share of those profits. 2 When, as here,
a district court renders a decision after a bench trial, “we review the district court’s factual
findings for clear error and its legal conclusion de novo.” F.T.C. v. Ross, 743 F.3d 886,
894 (4th Cir. 2014); see also Fed. R. Civ. P. 52. Likewise, we review a district court’s
decision to award or deny “equitable relief for abuse of discretion, accepting the court’s
factual findings absent clear error, while examining issues of law de novo.” Dixon v.
Edwards, 290 F.3d 699, 710 (4th Cir. 2002); see also Griggs v. E.I. Du Pont de Nemours
& Co., 237 F.3d 371, 385–86 (4th Cir. 2001) (“leav[ing] it to the sound discretion of the
2
Plaintiffs further argue that this Court should direct the district court to conclude
that Deutsch correctly determined the Bank’s profit from the transaction and that the Bank
is not entitled to seek certain set-offs from or assert equitable defenses to that
determination. As detailed below, we conclude that the district court did not reversibly err
in denying Plaintiffs equitable relief. Accordingly, we need not—and thus do not—address
these additional arguments.
11
district court” to determine whether, and in what form, an award of equitable relief under
Section 502(a)(3) was “appropriate”).
To resolve Plaintiffs’ appeal, we must address two questions: (A) whether the
district court was required to follow Plaintiffs’ proposed “proportionate-share-of-the-
whole” approach and, if not, (B) whether the district court reversibly erred in relying on
the Bank’s attribution approach in determining that the Bank did not profit from the
transfer.
A.
As to the first question, the proportionate-share-of-the-whole approach advanced by
Plaintiffs finds substantial support in Restatements, treatises, and case law. For example,
the Restatement (First) of Trusts provides that “[w]here the trustee wrongfully mingles
trust property with his individual property in one indistinguishable mass” and “exchanges
the mingled mass for other property” that “becomes more valuable than the mingled mass
with which it is acquired, the beneficiary is entitled to a proportionate share of the property,
and thus to secure the profit which arises from the transaction.” Restatement (First) of
Trusts § 202 cmt. h (1935); see also Restatement (Second) of Trusts § 202 (same);
Restatement (First) of Restitution § 209 cmt. a (1937) (“The person whose money is
wrongfully mingled with money of the wrongdoer does not thereby lose his interest in the
money, although the identity of his money can no longer be shown, but he acquires an
interest in the mingled fund. His interest is such that he is entitled in equity to claim a
proportionate share of the mingled fund or a lien upon it.” (emphasis added)); id. at § 210.
12
Likewise, authoritative legal commentators support the proportionate-share-of-the-
whole approach. See, e.g., 2 Dan B. Dobbs, Law of Remedies § 6.1(4), at 16–17 (2d ed.
1993) (“[W]hen the defendant uses the entire commingled fund to purchase property . . .
the plaintiff is not entitled to a constructive trust on the entire property purchased, but he
is entitled to a trust for a share in the property proportionate to his share in the fund.”);
Austin W. Scott, The Right to Follow Money Wrongfully Mingled with Other Money, 27
Harv. L. Rev. 125, 127 (1913) (“[W]here the claimant’s money is mingled with that of the
wrongdoer, and is therefore only partly instrumental in earning the profit[,] [t]he claimant
should be entitled to a share of the profit, in so far as his property contributed to earning
the profit.”).
Both this Court and the Supreme Court also have endorsed use of the proportionate-
share-of-the-whole approach to determine the profit obtained by a defendant as a result of
its use of unlawfully commingled funds. See, e.g., Henkels v. Sutherland, 271 U.S. 298,
302 (1926) (“Since the proceeds resulting from the sale of Henkels’ property have been
commingled with the proceeds of other sales and thus invested, an account must be taken
to ascertain the average rate of interest received by the Treasury upon all the proceeds
invested and thereupon . . . a proportionate allocation made in respect of the proceeds
belong to Henkels for the period of their investment.”); MacBryde v. Burnett, 132 F.2d
898, 900 (4th Cir. 1942) (“[I]f trust funds are mingled with personal funds of a trustee, the
whole is impressed with a trust until separation of the trust property can be made, and that
the trust [beneficiaries are] entitled to a proportionate part of the profits realized by the
trustee in dealings with the fund in which the trust funds are mingled.”).
13
And other circuits also have applied the proportionate-share-of-the-whole approach
in such circumstances. See, e.g., Provencher v. Berman, 699 F.2d 568, 570 (1st Cir. 1983)
(Breyer, J.) (explaining that when “a ‘conscious wrongdoer’ . . . uses commingled funds to
buy property, . . . the innocent party can choose either to enforce a lien on the property for
the value of the estate’s funds or” claim “the proportionate share of the real estate”);
Bartlett & Co., Grain v. Commodity Credit Corp., 307 F.2d 401, 409 (8th Cir. 1962) (“The
amount of the actual yield of the bills is known, and the claim of Commodity for the period
now in question should be limited to its pro rata share of the yield.” (emphasis added));
Bird v. Stein, 258 F.2d 168, 177 (5th Cir. 1958) (Wisdom, J.); Marcus v. Otis, 169 F.2d
148, 150 (2d Cir. 1948) (A. Hand, J.) (“[W]here a wrongdoer mingles his own funds with
other funds which he has misappropriated . . . he is liable only for a proportionate part of
the profits realized based upon the ratio of the amount of money he misappropriated to the
original commingled mass.”). Additionally, at least one court has applied the
proportionate-share-of-the-whole methodology in an analogous ERISA case. Rochow v.
Life Ins. Co. of N.A., 737 F.3d 415, 429–30 (6th Cir. 2013) (concluding that a district court
did not abuse its discretion in ascertaining profits to be disgorged when unlawfully obtained
funds were commingled with defendant’s general assets by applying “the principle that
where funds are not traceable, an appropriate remedy is to order disgorgement of a
proportionate share of the wrongdoer’s profits”), rev’d on rehearing on other grounds 780
F.3d 364 (6th Cir. 2015) (en banc).
Notwithstanding the proportionate-share-of-the-whole approach’s widespread
application, see Provencher, 699 F.2d at 570 (describing the proportionate-share-of-the-
14
whole approach as “virtually universal”), a few courts took—and continue to take—other
approaches in determining whether, and to what extent, a defendant profited from the use
of unlawfully obtained, and mingled, money, see, e.g., Parke v. First Reliance Standard
Life Ins. Co., 368 F.3d 999, 1009 (8th Cir. 2004) (holding, in ERISA breach of fiduciary
duty case, that the plaintiff was entitled to disgorgement of profits in the form of interest
because the fiduciary “‘gains’ from the wrongful withholding of the plaintiff’s benefits
even if the plaintiff does not prove specific financial profit. In particular, the defendant
receives a benefit from having control over the money”); In re Mowrey’s Estate, 232
N.W.82, 86 (Iowa 1930) (requiring executor, who commingled estate funds with personal
funds to obtain mortgages, to pay interest on commingled funds at the statutory rate).
That the proportionate-share-of-the-whole approach appears to have been widely, if
not universally, embraced by courts and commentators does not necessarily mean,
however, that the district court was required to follow that approach in this case—the
question this Court must resolve. As to that question, Plaintiffs contend that the district
court was required to apply the proportionate-share-of-the-whole approach in this case for
two reasons.
First, Plaintiffs argue that “[b]ecause ‘courts of equity must be governed by rules
and precedents no less than courts of law,’ . . . the Supreme Court has been insistent that
any time equity has already developed a specific rule for dealing with a recurring fact
pattern, equity courts are forbidden from ‘exercis[ing] [their] background equitable
powers’ . . . to engage in ‘ad hoc equitable departures.’” Appellants’ Br. 28 (second and
15
third alterations in original) (quoting Lonchar v. Thomas, 517 U.S. 314, 323–24, 327
(1996)). Lonchar, however, does not bear the weight Plaintiffs claim.
Without question, Lonchar supports the proposition that, for a variety of compelling
reasons—predictability, uniformity, and fairness, to name a few—courts generally should
follow equitable rules, like the proportionate-share-of-the-whole methodology. Lonchar,
517 U.S. at 324 (“[E]quitable rules that guide lower courts reduce uncertainty, avoid unfair
surprise, minimize disparate treatment of similar cases, and thereby help all litigants.”).
But Lonchar dealt with a meaningfully distinct question—“whether a federal court may
dismiss a first federal habeas petition for general ‘equitable’ reasons beyond those
embodied in the relevant statutes, Federal Habeas Corpus Rules, and prior precedents.” Id.
at 316. That question turned on a complex regulatory and statutory scheme that specifically
addressed the relevant issue and did not expressly confer equitable authority to resolve that
question. Id. at 322–28.
By contrast, ERISA Section 502(a)(3), under which Plaintiffs seek relief, expressly
empowers courts to invoke their equitable authority and determine whether equitable relief
is “appropriate.” 29 U.S.C. § 1132(a)(3). More significantly, the Supreme Court
subsequently recognized that, notwithstanding Lonchar’s statement that courts of equity
“must be governed by rules and precedents no less than the courts of law,” the “exercise of
a court’s equity powers . . . must be made on a case-by-case basis.” Holland v. Florida,
560 U.S. 631, 649–50 (2010) (emphasis added) (internal quotation marks omitted). “In
emphasizing the need for flexibility and avoiding mechanical rules . . . we have followed
a tradition in which courts of equity have sought to relieve hardships which, from time to
16
time, arise from a hard and fast adherence to more absolute legal rules, which, if strictly
applied, threaten the evils of archaic rigidity.” Id. at 650 (internal quotation marks
omitted). Accordingly, neither Lonchar nor Supreme Court precedent requires courts to
invariably follow equitable rules.
Second, Plaintiffs argue that even if district courts generally retain discretion as to
the application of equitable rules, ERISA Section 502(a)(3) does not afford district courts
any such discretion. Appellants’ Br. 30–31. In support of their position, Plaintiffs
emphasize this Court’s holding in Pender that “[t]he Supreme Court has interpreted the
term ‘appropriate equitable relief,’ as used in Section 502(a)(3), to refer to ‘those categories
of relief that, traditionally speaking (i.e., prior to the merger of law and equity [in 1938])
were typically available in equity.’” Pender, 788 F.3d at 364 (quoting CIGNA Corp. v.
Amara, 563 U.S. 421, 439 (2011)). As detailed above, Plaintiffs are correct that their
proportionate-share-of-the-whole approach appears to have been the predominant way of
conducting an accounting of profits when unlawfully obtained funds were commingled
with other funds. But the language from Amara upon which Pender relied dealt with what
forms of “equitable relief” were available—e.g., restitution, disgorgement, accounting for
profits, etc.—not with whether a court was required to award a particular form of relief—
or calculate such relief in a particular way—the relevant question here.
Both the language of the statute and case law contradict Plaintiffs’ claim that “courts
in ERISA cases cannot rely on their judgment to devise relief that is fair, reasonable, and
‘equitable’ in the particular circumstances of the case.” Appellants’ Br. 30–31 (emphasis
in original). To begin, whereas Pender, and the Supreme Court cases upon which it relied,
17
focused on the meaning of “equitable relief” in Section 502(a)(3), 788 F.3d at 364, that
provision also requires that the award of such relief be “appropriate,” indicating that a court
has the power to deny such relief (even if it is a form of equitable relief available under
Section 502(a)(3)), if it deems such relief not “appropriate” under the particular facts of the
case. To that end, after concluding that the remedies sought in Amara were “equitable
relief,” the Supreme Court remanded the case because it was unclear “whether the District
Court will find it appropriate to exercise its discretion under § 502(a)(3) to impose that
remedy on remand.” Amara, 563 U.S. at 442 (emphasis added).
Likewise, in Griggs v. E.I. DuPont de Nemours & Co., this Court held that “even if
the redress sought by a beneficiary under ERISA Section 502(a)(3) is a classic form of
equitable relief, it must be appropriate under the circumstances.” 237 F.3d at 385(emphasis retained). And in McCravy v. Metropolitan Life Insurance Co., this Court
considered whether a breach of fiduciary action seeking equitable relief in the form of
estoppel and surcharge was available under ERISA Section 502(a)(3). 690 F.3d 176, 182
(4th Cir. 2012). After concluding that estoppel and surcharge actions were “traditionally
available in [pre-merger] courts of equity”—and therefore available under Section
502(a)(3)—we remanded the case to the district court, stating: “Whether [the plaintiff’s]
breach of fiduciary duty claim will ultimately succeed and whether surcharge is an
appropriate remedy under Section [502(a)(3)] in the circumstances of this case are
questions appropriately resolved in the first instance before the district court.” Id. at 180–
82 (emphasis added). Accordingly, this Court has held that even if a form of equitable
18
relief is available under Section 502(a)(3), a district court has discretion to deny such relief
if the court deems such relief inappropriate under the particular facts of the case.
Other circuit courts have reached the same conclusion. For example, the Third
Circuit held that “the term ‘appropriate’ . . . confer[s] discretion on district courts, sitting
as courts of equity, to limit equitable relief by doctrines and defenses traditionally available
at equity.” Nat’l Sec. Sys., Inc. v. Iola, 700 F.3d 65, 101–02 (3d Cir. 2012). Applying that
rule, the Third Circuit upheld a district court’s award of only partial disgorgement,
notwithstanding that the traditional equitable rule afforded full disgorgement, because
some of the unlawful payments at issue had been passed on to innocent third-parties. Id.The National Security Systems court ruled that because courts sitting in equity are entitled
“to fashion relief tailored to the unique circumstances of a case,” the district court did not
abuse its discretion in limiting the disgorgement when it found that the facts of the case so
warranted. Id. at 102.
Likewise, the Seventh Circuit has explained that “the fact that a transaction is
prohibited under ERISA does not necessarily mandate a remedy, although it is a very
dangerous area for trustees to explore, let alone attempt to exploit.” Etter v. J. Pease
Constr. Co., Inc., 963 F.2d 1005, 1009 (7th Cir. 1992) (emphasis added). “Rather, the
decision to impose a remedy lies within the court’s discretion and should be in tune with
the case’s realities.” Id. (internal quotation marks omitted); see also Gearlds v. Entergy
Servs., Inc., 709 F.3d 448, 452 (5th Cir. 2013) (“We leave to the district court the
determination whether Gearlds’s breach of fiduciary duty claim may prevail on the merits
and whether the circumstances of the case warrant the relief of surcharge.” (emphasis
19
added)); McDonald v. Pension Plan of NYSA-ILA Pension Tr. Fund, 320 F.3d 151, 161 (2d
Cir. 2003) (“[Section 502(a)(3)] does not require district courts to grant particular relief;
rather, it affords district courts the discretion to fashion appropriate equitable relief.”). By
contrast, Plaintiffs cite no authority, nor have we found any, holding that a district court is
barred from declining to award equitable relief under Section 502(a)(3)—even if the
requested form of equitable relief is available under that statute—if it determines the award
of such relief would be inappropriate under the facts of the case.
Accordingly, ERISA Section 502(a)(3) did not require the district court to award
Plaintiffs relief based on the proportionate-share-of-the-whole methodology. Rather, the
district court retained discretion to consider other approaches in determining whether
equitable relief was “appropriate” under the particular facts of the case.
B.
Having concluded that the district court was not required to follow the
proportionate-share-of-the-whole approach in determining whether, and to what extent, the
Bank profited from the unlawful transfers, we next must decide whether the district court
permissibly exercised its discretion in determining equitable relief was not appropriate in
this case. Under the governing deferential standard of review, we uphold the district
court’s decision denying Plaintiffs equitable relief.
The district court’s decision rested on extensive factual findings, none of which
Plaintiffs challenge on appeal as clearly erroneous. Those factual findings reflect
contemporaneous Bank records maintained in the ordinary course of business outlining the
Bank’s Investment Strategy, which the district court found treated the transferred 401(k)
20
balances differently than the other funds in the Pension Plan’s general account. Pender,
2017 WL 1536234, at *8. The district court further found that the contemporaneously
documented Investment Strategy, to which the Bank adhered, required the Pension Plan
“to invest assets to fund [the transferred 401(k) account balances] in a higher concentration
of equities than participants invested their hypothetical accounts.” Id. at *9. The district
court also found that the Bank contemporaneously tracked, on a monthly basis, the
performance of the transferred 401(k) balances, separate and apart from the performance
of the remaining funds in the Pension Plan’s general account. Id. at *8, *13. And the
district court found—and Plaintiffs do not dispute—that the returns for the transferred
401(k) balances realized under “the Investment Strategy were . . . less than participants’
hypothetical returns.” Id. at *9.
Based on these undisputed factual findings, the district court repeatedly asserted it
would not be “appropriate” to award Plaintiffs equitable relief under the proportionate-
share-of-the-whole approach because that approach would not measure whether any profits
accrued to the Bank “due to the transfer.” Id. at *12; see also, e.g., id. at *5 (“[A]s a matter
of equity, the Court finds that [the proportionate-share-of-the-whole] methodology is
inappropriate and inferior to calculating profit based on the actual Investment Strategy
utilized with respect to the [transferred funds].”); id. at *18–19. Again emphasizing the
distinct, contemporaneously documented Investment Strategy for the transferred funds, the
district court further determined it would be inappropriate to apply the proportionate-share-
of-the-whole approach because “doing so would have the effect of being a penalty, and,
conversely, would create a windfall for Plaintiffs, because much of what would be captured
21
as ‘profits’ under such a methodology would be investment returns the Plan would have
realized in any event regardless of the transfer.” Id. at *14.
It was within the district court’s discretion to determine that awarding Plaintiffs
equitable relief using the proportionate-share-of-the-whole methodology would be
inappropriate in this case. The proportionate-share-of-the-whole approach was designed
to address situations in which a defendant mingles unlawfully obtained funds with money
of his own so that the “whole forms one indistinguishable mass[;] . . . it can no longer be
identified.” Scott, supra at 125.
Here, the district court did not clearly err in determining that the extensive
contemporaneous evidence outlining the Investment Strategy for the unlawfully transferred
funds and separately tracking the performance of the funds invested under that strategy
made it possible to “identif[y]” the performance of the unlawfully mingled funds, id.,
thereby rendering application of the proportionate-share-of-the-whole methodology
inappropriate in this particular case, cf. Sheldon v. Metro-Goldwyn Pictures Corp., 309
U.S. 390, 406 (1940) (“Where there is a commingling of gains, [the wrongdoer] must abide
the consequences [and disgorge all commingled gains], unless he can make a separation
of the profits so as to assure the injured party all that justly belongs to him.” (emphasis
added)). Put differently, the extensive contemporaneous evidence identifying the
performance of the unlawfully commingled funds provided the district court with an
adequate factual basis to deviate from the proportionate-share-of-the-whole methodology,
which courts widely apply to assess whether, and to what extent, a wrongdoer profits from
unlawfully commingled funds.
22
Likewise, courts and commentators have cautioned against awarding a plaintiff
equitable relief, and disgorged profits in particular, to the extent doing so would amount to
a windfall or penalize a defendant. Id. at 404, 408 (explaining that “[e]quity is concerned
with making a fair apportionment so that neither party will have what justly belongs to the
other” and therefore does not permit “inflict[ing] an unauthorized penalty”); Griggs, 237
F.3d 371, 385 (4th Cir. 2001) (stating that an ERISA plaintiff seeking equitable relief was
“not entitled to a windfall”); Restatement (Third) of Restitution and Unjust Enrichment §
51 (2011) (“[T]he unjust enrichment of a conscious wrongdoer . . . is the net profit
attributable to the underlying wrong. The object of restitution in such cases is to eliminate
profit from wrongdoing while avoiding, so far as possible, the imposition of a penalty.”);
1 Dobbs, supra § 4.5(3), at 642 (“Even the willful wrongdoer should not be made to give
up that which is his own; the principle is disgorgement, not plunder.”). In light of these
authorities, which the district court explicitly referenced, the district court did not abuse its
discretion in determining that use of the proportionate-share-of-the-whole methodology to
award Plaintiffs equitable relief would amount, in this specific case, to a windfall to
Plaintiffs, and inappropriately penalize the Bank. Pender, 2017 WL 1536234, at *14, *16,
*19. In particular, there is no dispute that as a result of the transfers and payments required
by the IRS closing agreement, Plaintiffs’ current 401(k) account balances are at least as
large as they would have been had the funds in their accounts actually been invested in
accordance with their notional allocations. Pender, 2013 WL 4495153, at *10. And the
contemporaneous records introduced by the Bank, which separately tracked the
performance of the transferred funds, provided the district court with a factual basis to
23
determine that the Bank did not profit from the transaction and that any further payment to
Plaintiffs would serve only to penalize the Bank.
The extensive evidence of the distinct, contemporaneously documented Investment
Strategy credited by the district court sets this case apart from the “hypothetical example”
set forth by our colleague in dissent. See post at 27–28. Under that example, “the investor
never explains how he could maintain a separate investment strategy that benefits only his
share of the commingled funds.” Id. But the district court credited the Bank’s evidence
documenting the separate investment strategy and establishing that the returns accruing the
unlawfully commingled funds invested pursuant to that strategy could be separately
tracked. Plaintiffs have not challenged those factual findings as clearly erroneous, and
therefore we have no basis to conclude that the district court abused its discretion in relying
on those findings to deny Plaintiffs equitable relief.
That we conclude that the district court did not abuse its discretion in determining
that equitable relief was not appropriate in this case does not mean that we necessarily
would have rendered the same judgment were we addressing the question in the first
instance. Having access to the additional funds obtained through the unlawful transfers
may have impacted the Bank’s investment strategy for the Pension Plan as whole, even if
it sought to hedge its risk by mirroring the 401(k) beneficiaries’ equity investments,
meaning that the benefits accruing to the Pension Plan may not have been entirely
independent of the losses related to the 401(k) balances, as the attribution approach
assumed. Additionally, as the Eighth Circuit recognized, a “defendant receives a benefit
from having control over the money” even if a profit cannot be demonstrated. Parke, 368
24
F.3d at 1009. And the attribution approach advanced by the Bank, and relied on by the
district court, is generally applied in situations when a defendant’s skill or ingenuity
independently contributed to profits obtained, in part, by a defendant’s unlawful use of
another’s property. See, e.g., Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. at 404–
08. By contrast, here the Bank maintains that its lack of skill in investing the transferred
funds—as evidenced by the Bank’s Investment Strategy yielding significantly lower
returns than Plaintiffs’ notional allocations—warranted application of the attribution
approach.
Nonetheless, in light of the extensive contemporaneous records documenting the
Investment Strategy for the transferred funds and tracking the performance of those
funds—which provided the district court with an adequate factual basis to find that the
performance of the transferred funds could be separately identified—it was within the
district court’s discretion to decline to award equitable relief based on the proportionate-
share-of-the-whole approach.
In affirming the district court’s exercise of its discretion, we do not—as our
dissenting colleague suggests—“depart” from our prior holding that if “‘Section
204(g)(1)[] . . . is to have any teeth, the available remedies must be able to reach situations
like the one this case presents, i.e., where a plan sponsor benefits from an ERISA violation,
but plan participants—perhaps through luck or agency intervention—suffer no monetary
loss.’” Post at 29 (quoting Pender, 788 F.3d at 358, 364-65). On the contrary, we simply
determine that the district court did not clearly err in finding that—based on the
contemporaneous records documenting the Investment Strategy for the transferred funds
25
and tracking the performance of those funds—the Bank did not benefit from the violation.
In determining that the district court did not clearly err, we in no way retreat from this
Court’s previous holding that Section 502(a)(3) entitles plan participants to an accounting
for profits attributable to an ERISA violation, even if the participants suffered no monetary
harm from the violation. ERISA does not allow a plan sponsor to wrongfully use plan
participant funds for the sponsor’s benefit. In such circumstances, the plan sponsor must
disgorge its ill-gotten benefit to plan participants.
III.
For the foregoing reasons, we affirm the judgment of the district court.
AFFIRMED
26
BARBARA MILANO KEENAN, Circuit Judge, dissenting:
I agree with the majority that a court examining an ERISA violation is not required
to apply a proportionate-share-of-the-whole approach when a wrongdoer has profited from
the use of commingled funds. A court’s exercise of its equitable powers must be made on
a fact-specific basis, rather than by imposing absolute outcomes without regard to factual
context. See Holland v. Florida, 560 U.S. 631, 649-50 (2010); see also 29 U.S.C.
§ 1132(a)(3) (allowing participant to bring claim for “appropriate equitable relief”).
However, based on the Bank’s particular conduct here, I depart from the majority’s holding
allowing the Bank to profit by using the plaintiffs’ money for the Bank’s own purposes. In
my view, the district court plainly abused its discretion in permitting the Bank to profit
from its own misconduct, which even the Bank concedes was illegal.
A simple example easily illustrates the Bank’s self-dealing logic, which the majority
accepts today. Imagine that you agree to give $100 to an investor who holds $900 of other
funds, so that he can invest the commingled funds of $1,000 and guarantee you a minimum
return on your investment of 5%. When the $1,000 in commingled funds yields an overall
25% gain, for a total of $1,250, you naturally expect to earn $25 in profit on your
investment of $100, yielding a total payment to you of $125.
To your dismay, however, the investor pays you only the guaranteed $105. He tells
you that, unfortunately, his investment strategy with respect to your $100 share of the
single pot of commingled funds failed miserably in the market, causing him to suffer a loss
of 10% on your $100 investment. And, astoundingly, he says that he is entitled to all the
remaining profit from using your commingled funds because his separate strategy for the
27
other commingled funds in the single pot was far more successful. Remarkably as well,
the investor never explains how he could maintain a separate investment strategy that
benefits only his share of the commingled funds, but not yours. Instead, the investor, who
is far more sophisticated and powerful in the marketplace than you are, simply tells you
how fortunate you are to have received the guaranteed 5% gain, declares victory, and
pockets the entire remaining profit from investing the commingled funds.
This hypothetical example captures the essence of the Bank’s wrongdoing and
windfall in this case. 3 Thus, the example illustrates the fallacy of the district court’s
reasoning when it rejected the proportionate-share-of-the-whole approach, a longstanding
equitable principle. As we explained in the context of a trust in MacBryde v. Burnett, 132
F.2d 898 (4th Cir. 1942), when “funds are mingled with personal funds of a trustee, the
whole is impressed with a trust until separation of the trust property can be made,” and the
beneficiaries ordinarily should receive “a proportionate part of the profits realized.” Id. at
900.
When there has been commingling of funds by a wrongdoer, most courts have
applied the proportionate-share-of-the-whole approach when formulating appropriate
equitable relief. See Henkels v. Sutherland, 271 U.S. 298, 302 (1926); Provencher v.
3
I recognize that the plaintiffs here were informed prior to the transfer that they
would earn either the greater of their hypothetical investments or the original balance of
their transferred assets. But this initial expectation does not bear on fashioning a remedy
for the Bank’s wrongdoing. The issue before us is whether the district court abused its
discretion in rejecting the plaintiffs’ request for disgorgement of the Bank’s profits
obtained from using the plaintiffs’ assets.
28
Berman, 699 F.2d 568, 570 (1st Cir. 1983); Bartlett & Co., Grain v. Commodity Credit
Corp., 307 F.2d 401, 409 (8th Cir. 1962); Marcus v. Otis, 169 F.2d 148, 150 (2d Cir. 1948).
And, as the majority observes, the Sixth Circuit has applied this approach in the context of
an ERISA violation involving commingled funds. Rochow v. Life Ins. Co. of N. Am., 737
F.3d 415, 429-30 (6th Cir. 2013), rev’d on rehearing on other grounds, 780 F.3d 364 (6th
Cir. 2015) (en banc). Nevertheless, in the face of this compelling case law and our own
decision in MacBryde, the majority swims against the strong tide of equity.
In our previous decision in this case, we remanded the matter for the district court
to consider the plaintiffs’ claim under ERISA Section 502(a)(3) for an accounting of profits
after the Bank unlawfully transferred the plaintiffs’ 401(k) Plan investments (the
transferred assets) into the Bank’s Pension Plan. Pender v. Bank of Am. Corp., 788 F.3d
354, 358, 364-65 (4th Cir. 2015). We explained that in filing suit against the Bank, the
plaintiffs sought “profits generated using assets that belonged to them,” reduced by the
amount the Bank already had paid the plaintiffs pursuant to the IRS settlement. Id. at 364.
And, importantly, we emphasized that if “Section 204(g)(1)[ ] . . . is to have any teeth, the
available remedies must be able to reach situations like the one this case presents, i.e.,
where a plan sponsor benefits from an ERISA violation, but plan participants—perhaps
through luck or agency intervention—suffer no monetary loss.” Id. at 365. It seems that
the majority now has departed from our prior admonition.
Somehow, the Bank convinced the district court on remand that the plaintiffs were
lucky to have been paid anything, because the Bank’s “investment strategy” with respect
to the plaintiffs’ portion of the commingled funds had failed. However, the strategy only
29
failed with respect to amounts equal to the transferred assets. See Nickel v. Bank of Am.
Nat’l Trust & Sav. Ass’n, 290 F.3d 1134, 1138 (9th Cir. 2002) (discussing disgorgement
and stating that “[m]oney is fungible. Once in the bank’s accounts . . . the specific sums
taken from the trusts could never be identified again.”). The undisputed evidence showed
that nearly $3 billion of transferred assets were pooled, indistinguishably, with the Pension
Plan assets into one “pot” worth about $9 billion. And this “pot” profited by a margin of
28.6% during the relevant period, despite one failed aspect of the overall investment
strategy.
Under its strategy, the Bank had intended to enhance the Plan’s “pot” by investing
amounts equal to the transferred assets more heavily in equities than the plaintiffs
themselves would have invested. In that case, the Bank would pay the plaintiffs guaranteed
minimum investment earnings, and pocket the additional earnings. See Pender, 788 F.3d
at 358-59. Because the equities failed to perform as expected, the Bank claimed that the
plaintiffs’ portion of the commingled funds had shrunk, even though the “pot” actually
profited by about $379 million, including accrued interest.
In concluding that these profits from the commingled funds were not attributable to
the Bank’s “transfer strategy,” the district court answered the wrong question. See Pender
v. Bank of Am. Corp., No. 3:05-CV-00238, 2017 WL 1536234, at *4 (W.D.N.C. Apr. 27,
2017). The court should have focused instead on the question articulated in MacBryde,
namely, what was the proportionate share of the profits made by investing the plaintiffs’
portion of the funds. 132 F.2d at 900.
30
Although the district court appeared to couch its decision as a credibility
determination, Pender, 2017 WL 1536234, at *4, in reality, the decision merely reflected
the court’s rejection of an established equitable remedy in favor of preserving the Bank’s
profit margin. Accordingly, we are not presented with an issue of competing facts that we
review for clear error. See Dixon v. Edwards, 290 F.3d 699, 710 (4th Cir. 2002) (reviewing
a district court’s award of equitable relief for abuse of discretion and findings of fact for
clear error). Moreover, “even if a district court applies the correct legal principles to
adequately supported facts, the discretion of the trial court is not boundless and subject to
automatic affirmance,” when we have “a definite and firm conviction that the court below
committed a clear error of judgment” in its conclusion. Westberry v. Gislaved Gummi AB,
178 F.3d 257, 261 (4th Cir. 1999); see Huskey v. Ethicon, Inc., 848 F.3d 151, 158 (4th Cir.
2017). In my view, the district court committed a clear error of judgment and abused its
discretion in refusing to order the Bank to disgorge the wrongful gains the Bank reaped.
As we explained in our prior decision, “ERISA borrows heavily from the language
and the law of trusts.” Pender, 788 F.3d at 367. And, under those principles, the Bank
should be required to pay the plaintiffs the profits “which in equity and good conscience
belonged” to the plaintiffs, rather than to use those profits to enhance the Bank’s bottom
line. See id. at 364 (quoting 1 D. Dobbs, Law of Remedies § 4.3(5), p. 608 (2d ed. 1993)).
Therefore, I cannot abide the decision by the district court and the majority to allow the
Bank to profit lavishly from its wrongful use of the plaintiffs’ money.
31