Skretvedt v. E.I. DuPont De Nemours

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
6-16-2004
Skretvedt v. EI DuPont de Nemours
Precedential or Non-Precedential: Precedential
Docket No. 02-3620
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PRECEDENTIAL Before: ALITO, AMBRO and
CHERTOFF, Circuit Judges
UNITED STATES
COURT OF APPEALS (Opinion filed: June 16, 2004)
FOR THE THIRD CIRCUIT
John M. Stull, Esquire (Argued)
1300 North Market Street
Nos. 02-3620 & 02-4283 P.O. Box 1947
Wilmington, DE 19899
ORRIN T. SKRETVEDT, Attorney for Appellant
Appellant Raymond M. Ripple, Esquire (Argued)
Donna L. Goodman, Esquire
v. Suite D-7012
E.I. DuPont de Nemours & Company
E.I. DUPONT DE NEMOURS, a Legal Department
Delaware corporation; PENSION AND 1007 Market Street
RETIREMENT PLAN; HOSPITAL Wilmington, DE 19898
AND MEDICAL-SURGICAL PLAN;
DENTAL ASSISTANCE PLAN; Attorneys for Appellee
NONCONTRIBUTORY GROUP LIFE
INSURANCE PLAN;
CONTRIBUTORY GROUP LIFE
INSURANCE PLAN; TOTAL AND OPINION OF THE COURT
PERMANENT
DISABILITY INCOME PLAN;
SAVINGS INVESTMENT PLAN;
AM BRO, Circuit Judge
TAX REFORM
ACT STOCK OWNERSHIP PLAN; Orrin T. Skretvedt seeks, inter alia,
SHORT TERM DISABILITY PLAN interest on the delayed payment of benefits
due him under two plans governed by the
Employee Retirement Income Security Act
On Appeal from the of 1974 (“ERISA”). Skretvedt received
United States District Court benefits from one of those plans pursuant
for the District of Delaware to a court judgment, while his employer
D.C. Civil Action No. 98-cv-00061 voluntarily paid him benefits under the
(Honorable Mary P. Thynge) other plan after that judgment was entered.
The Magistrate Judge denied Skretvedt’s
request for interest with respect to the
Argued September 16, 2003 delayed payment of benefits under both
plans in light of the Supreme Court’s
decision in Great-West Life & Annuity a l l o w a c la im a n t , u n d er s o m e
Insurance Co. v. Knudson, 534 U.S. 204 circumstances, to seek interest on the
(2002). delayed payment of ERISA benefits as
“appropriate equitable relief” under §
Based on Anthuis v. Colt Industries
502(a)(3)(B). However, the Magistrate
Operating Corp., 971 F.2d 999 (3d Cir.
Judge concluded that such a claim for
1992), we determine that an award of
“interest” would be one seeking “money
prejudgment interest on a judgment
damages,” which Great-West has termed
awarding benefits pursuant to ERISA
“the classic form of legal relief,” Great-
§ 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B),
West, 534 U.S. at 210 (emphasis in
follows the Supreme Court’s decisions in
original; internal quotation marks and
Board of Commissioners of Jackson
citations omitted), that is not available as
County, Kansas v. United States, 308 U.S.
“appropriate equitable relief” under
343, 352 (1939), and Rodgers v. United
§ 502(a)(3)(B).
States, 332 U.S. 371, 373 (1947),
providing that where “[t]he issue is While we agree that the Supreme
uncontrolled by any formal expression of Court has bridled the scope of relief
the will of Congress,” Board of available under § 502(a)(3)(B), we are
Commissioners, 308 U.S. at 349, “interest convinced that, looking more specifically
is not recovered according to a rigid theory at the Court’s requirement that the relief
of compensation for money withheld, but requested under § 502(a)(3)(B) have been
is given in response to considerations of “typically available in equity,” Skretvedt’s
fairness. It is denied when its exaction pursuit of interest on the wrongful or
would be inequitable.” Id. at 352. delayed withholding of his benefits is not
Accordingly, we conclude that Great- a request for money damages, but rather a
West, construing the scope of “appropriate request for restitution that typically would
equitable relief” available to a litigant have been available in equity. We
under ERISA § 502(a)(3)(B), 29 U.S.C. conclude that a constructive trust is the
§ 1132(a)(3)(B), does not apply to a appropriate device for such a request, and
request for prejudgment interest on a that Skretvedt may seek interest on the
judgment award ed pu rsuan t to delayed payment of his ERISA benefits in
§ 502(a)(1)(B). accordance with the principles discussed in
Fotta v. Trustees of United Mine Workers
With respect to Skretvedt’s request
of America, 319 F.3d 612, 617-18 (3d Cir.
for interest on the delayed payment of a
2003) (“Fotta II”).
second type of benefits that his employer
voluntarily paid after much delay, the
Magistrate Judge acknowledged that our
prior holding in Fotta v. Trustees of the
United Mine Workers of America, 165
F.3d 209 (3d Cir. 1998) (“Fotta I”), would
2
I. Background sue letter. On September 29, 1995, acting
on advice of counsel, Skretvedt signed a
A. Facts 1
“Settlement Agreement and Release of All
Skretvedt was employed by E.I. du Claims” with DuPont. We previously
Pont de Nemours and Company2 from June noted that this agreement “released all of
28, 1974, until February 7, 1995. In early [Skretvedt’s] employment-related claims
1994, Skretvedt was working as a Senior against DuPont except for his application
Research Environmental Engineer when for disability benefits, which DuPont
he began receiving treatments for work- agreed to review in a ‘neutral’ manner.”
related anxiety from his family physician. Skretvedt I, 268 F.3d at 171.
Skretvedt took a leave of absence from his
Following the sett l em ent
job on November 11, 1994, and did not
agreement, DuPont’s three-member Board
return to work at DuPont thereafter.
of Benefits and Pensions (“Benefits
DuPont began investigating during this
Board”) reviewed Skretvedt’s application
period whether Skretvedt would qualify
for disability benefits, and determined that
for disability benefits. For reasons that the
he was ineligible because, the Board
parties dispute, DuPont terminated
claimed, he had failed to show that he was
Skretvedt on February 7, 1995.
“permanently incapable of performing the
Skretvedt filed a claim with the duties of [his] job with the degree of
E q u a l E m p l o y m e n t O p p o r t u n it y efficiency required by the Company, at the
Commission alleging that DuPont violated time of [his] termination.” Skretvedt I, 268
the Americans with Disabilities Act by F.3d at 172. Skretvedt was also advised
discriminating against him because of his that, in order to succeed in appealing the
anxiety disorder. The EEOC found no Board’s determination, he would have to
violation based upon the information that submit “additional objective evidence that
Skretvedt submitted, and issued a right-to- will indicate a total impairment of
function,” such as “MRI, X-ray reports and
complete medical evaluations.” Id.
1
As this appeal raises only issues of Skretvedt contended, and DuPont denied,
law, we state undisputed facts that provide that he and one of his doctors sent three
background for our legal determinations. letters to the Board’s designated person for
A detailed statement of the facts appeals, requesting clarification with
underlying the parties’ dispute can be respect to the types of “objective medical
found in Skretvedt v. E.I. du Pont de evidence” he would need to perfect his
Nemours & Co., 268 F.3d 167, 170-73 (3d application on appeal in light of the fact
Cir. 2001) (“Skretvedt I”). that his claimed disability is psychological.
After receiving no response, he claims, he
2
We collectively refer to the defendant submitted a formal appeal to the Board on
ERISA plans and Skretvedt’s former May 16, 1997. Nonetheless, no further
employer as “DuPont.”
3
response was received. Income Plan” (“T&P benefits”).
B. Procedural Background Count VI alleged that Skretvedt was
eligible to participate in a DuPont tax-
Skretvedt filed an eight count
deferred savings program known as SIP,
complaint in the United States District
and sought damages with respect to his
Court for the District of Delaware on
contributions in SIP having been paid out
February 4, 1998.
prematurely (in light of his having been, he
Count I sought benefits from the alleged, wrongfully denied the right to
“Incapability Retirement” pension program participate in the program after his
(“incapability benefits”), and alleged that termination).
DuPont’s Benefits Board failed to inform
Count VII claimed that Skretvedt
Skretvedt under ERISA § 503, 29 U.S.C.
had been wrongfully denied further
§ 1133, of the reasons for denying him
participation in a DuPont stock ownership
benefits.
plan known as TRASOP, and sought
Count II claimed medical benefits reinstatement of TRASOP benefits and
through a DuPont benefits program known certain damages resulting from the
as MEDCAP and reimbursement for premature termination of his participation
expenses incurred as a result of MEDCAP in the plan.
benefits not having been provided as of the
Count VIII contended that
date of his termination.
Skretvedt was improperly denied benefits
Count III asserted a right to dental under DuPont’s short term disability
benefits through a DuPont benefits (“STD”) plan.
program known as DAP and
Among other things, Skretvedt also
reimbursement for expenses incurred as a
sought prejudgment interest, postjudgment
result of DAP benefits having been denied.
interest, and reasonable attorney’s fees
Count IV alleged that Skretvedt was with respect to each claim.
due a $3,000 payment under a DuPont
Skretvedt moved for summary
long-term life insurance plan known as the
judgment pursuant to Fed. R. Civ. P. 56,
“Noncontributory Plan” as a result of his
arguing, inter alia, that there was no
becoming disabled. Skretvedt also sought
genuine material dispute of fact as to the
declaratory relief that would deem him
Benefits Board having acted in an arbitrary
eligible for participation in DuPont’s
and capricious manner, or having abused
“Contributory Plan” life insurance
its discretion, and that he was entitled to
program, and sought life insurance
the award of benefits he requested.
benefits under its Noncontributory Plan.
DuPont also moved for summary
Count V requested benefits from
judgment, arguing, inter alia, that there
the “Total and Permanent Disability
was no evidence to support a finding that
4
the Board acted in an arbitrary and “vacate[d] the District Court’s order
capricious manner, thereby entitling them granting summary judgment on the count
to summary judgment. On September 6, challenging the Board’s denial of
2000, the Magistrate Judge granted Skretvedt’s application for T& P benefits
summary judgment in favor of DuPont on and remand[ed] it to the District Court,”
all claims, and denied Skretvedt’s motion assuming “that the District Court will
for summary judgment. She concluded, direct that DuPont’s [Benefits] Board
inter alia, that “there is no genuine issue of consider this claim in the first instance,
material fact upon which plaintiff could be since even though Skretvedt is incapable
successful [in showing that the Board had of performing the duties of his previous
acted in an arbitrary and capricious position at DuPont, he may nevertheless be
manner]” and that “a genuine issue does ineligible for T&P benefits.” Id. at 185.3
not exist as to the propriety of the Board’s
In light of our opinion, on remand
action. . . .” Skretvedt v. E.I. du Pont de
the Magistrate Judge entered a judgment
Nemours & Co., 119 F. Supp. 2d 444, 453-
on December 13, 2001, in favor of
55 (D. Del. 2000).
Skretvedt “on his claim for incapability
Skretvedt appealed the grant of benefits.” DuPont granted incapability
summary judgment in favor of DuPont and benefits on March 6, 2002, in response to
the denial of summary judgment in his that judgment. On the same day, without
favor with respect to his claims for Skretvedt’s having to resort to further
incapability and T&P benefits only. We judicial proceedings, DuPont granted T&P
held that “[b]ecause the medical evidence benefits upon reevaluating Skretvedt’s
that Skretvedt presented makes it clear that claim in light of our opinion.4
he meets the eligibility standards for
incapability benefits, and the Board can
point to no conflicting medical evidence, 3
We also remanded Skretvedt’s request
. . . the Board’s decision was arbitrary and that he be awarded attorney’s fees, noting
capricious because it was ‘without reason’ that such a request is one for the
and it was ‘unsupported by substantial Magistrate Judge to consider using her
evidence.’” Skretvedt I, 268 F.3d at 184. discretion, guided by the five-factor
Accordingly, we reversed the Magistrate analysis set out in McPherson v.
Judge’s summary judgment order “in favor Employees’ Pension Plan of American Re-
of DuPont and denying summary judgment Insurance Co., 33 F.3d 253, 254 (3d Cir.
in favor of Skretvedt on the claim for 1994). See Skretvedt I, 268 F.3d at 185
incapability benefits[,] . . . and . . . n.10.
remanded to the District Court with
4
directions to grant summary judgment in Skretvedt’s incapability and T&P
favor of Skretvedt on the claim for benefits were subsequently adjusted by
incapability benefits.” Id. We further DuPont in his favor on April 15, 2002, and
again on April 16, 2002.
5
On April 1, 2002, Skretvedt Judge, referring to Skretvedt’s Other
submitted to the Magistrate Judge an Claims Brief as a “Motion for Additional
“Opening Brief in Support of Claims for Compensation,” addressed the merits of
Short Term Disability Benefits, Interest on each of the requests contained in the brief.
Delayed Payment of Benefits and Related The Court concluded that Skretvedt was
Tax Reimbursement Claims (corrected)” not entitled as a matter of law to the
(the “Other Claims Brief”). Although he interest, tax-rela ted compensation,
had pursued only his claims in Counts I TRASOP adjustments, and adjustments to
and V for incapability and T&P benefits in his incapability and T&P benefits that he
his appeal to our Court in Skretvedt I, and sought. Furthermore, STD benefits, the
although we remanded only with respect to Court held, were not available because: (1)
those claims, Skretvedt sought to raise the relevant statute of limitations had
again claims for which the Magistrate lapsed prior to Skretvedt’s request for
Judge had previously granted summary those benefits; (2) the settlement
judgment to DuPont, as discussed above. agreement Skretvedt signed with DuPont
The brie f req ues ted, inter alia , waived any claim to STD benefits; and (3)
compensation with respect to DuPont’s employees with work-related injuries, such
denial of medical benefits under Count II, as Skretvedt, were not eligible for STD
compensation for his having been under the terms of the plan.
prematurely removed from the TRASOP
Skretvedt filed a motion for
plan under Count VII, and an award of
reconsideration on September 4, 2002, and
STD benefits under Count VIII. The brief
then filed a notice of appeal of the August
also sought interest on the delayed
21, 2002, order on September 20, 2002,
payment of all of his benefits and
which was docketed at No. 02-3620. The
c o m p e n s a t io n f o r a d v e r s e ta x
Magistrate Judge denied the motion for
consequences Skretvedt faced for having
reconsideration on November 12, 2002.
received back payments of benefits in the
Skretvedt filed an amended notice of
same tax year. The brief did not specify
appeal on November 14, 2002, seeking to
what action it was requesting the
appeal the August 21, 2002, and
Magistrate Judge to take, and did not
November 12, 2002, orders,5 which was
contain a formal motion, but instead in its
docketed at No. 02-428 3. We
“ C o n c lu s i o n ” s e c t io n s t a te d :
“WHEREFORE, Skretvedt presents his
view of STD, interest on delayed payments 5
Skretvedt incorrectly reported the date
and raises germane issues needing to be
of the November 12, 2002, order in his
resolved in his favor.” Other Claims Brief
amended notice of appeal as November 13,
at 12. DuPont submitted a memorandum
2002. As this order reaffirms the August
opposing Skretvedt’s claims.
21, 2002, judgment, we refer hereafter
On August 21, 2002, the Magistrate (unless the context requires otherwise) to
that judgment only.
6
consolidated both timely appeals.6 contest the issue of appellate jurisdiction,
we have the duty to raise the issue sua
II. Jurisdiction
sponte.” Commonwealth. of Pa. v.
The Magistrate Judge had subject Flaherty, 983 F.2d 1267, 1275 (3d Cir.
matter jurisdiction over this matter 1993). We must, accordingly, determine
pursuant to 29 U.S.C. § 1132(f) and 28 whether the orders were final under 28
U.S.C. § 1331. Both parties assert that we U.S.C. § 1291.
have final order jurisdiction under 28
In order to examine our current
U.S.C. § 1291 to review the Magistrate
jurisdiction, we first address our Court’s
J u d g e ’ s o r d e r (a n d ord e r o n
decision and remand order in Skretvedt I.
reconsideration) disposing of the relief
Prior to that decision, the Magistrate Judge
requested in Skretvedt’s Other Claims
granted summary judgment on all of
Brief.7 “Although the parties do not
Skretvedt’s claims in favor of DuPont in
September 2000. As noted above, we
6
While these appeals were pending, issued a limited remand with respect to the
Skretvedt moved before the M agistrate claims for incapability and T&P benefits,
Judge for attorney’s fees and costs and directed the Magistrate Judge to
pursuant to ERISA § 502(g), 29 U.S.C. consider the attorney’s fees issue in her
§ 1132(g). His motion was granted, but he discretion. The Magistrate Judge entered
was awarded less than he requested. a judgment, pursuant to our opinion and
Skretvedt appealed that award, which was order, that completely disposed of the
docketed at No. 03-2805 and has since incapability benefits claim.8 DuPont
been decided by another panel of this
Court.
is final under 28 U.S.C. § 1291. See, e.g.,
7
Where, as here, the parties have Abrams v. Lightolier Inc., 50 F.3d 1204,
consented under 28 U.S.C. § 636(c)(1) to 1209 n.1 (3d Cir. 1995).
allowing a magistrate judge to “conduct
8
any or all proceedings in a jury or nonjury The judgment entered by the
civil matter and order the entry of Magistrate Judge with respect to
judgment in the case,” id., 28 U.S.C. incapability benefits reads in its entirety:
§ 636(c)(3) provides for an “appeal “Pursuant to the Order of the Third Circuit
directly to the appropriate United States Court of Appeals dated October 5, 2001,
court of appeals from the judgment of the Judgment is entered on behalf of the
magistrate judge in the same manner as an plaintiff on his claim for incapability
appeal from any other judgment of a benefits.” Ordinarily, “[w]here the order
district court.” Id.; see also Fed. R. Civ. P. appealed from finds liability and imposes
73(c). Accordingly, final order a monetary remedy, but does not reduce
jurisdiction to review such an order arises that award to a specific figure, this court
from 28 U.S.C. § 636(c)(3) to the extent it will usually find the order interlocutory.”
7
subsequently granted T&P benefits
without Skretvedt’s having to seek a
judgment. Neither party, however, sought
Century Glove, Inc. v. First Am. Bank of
formally to dispose of the claim for T&P
New York, 860 F.2d 94, 98-99 (3d Cir.
benefits (e.g., by dismissing Count V
1988); see Prod. and Maint. Employees’
voluntarily to the extent that it sought T&P
Local 504 v. Roadmaster Corp., 954 F.2d
benefits or moving for summary judgment
1397, 1401 (7th Cir. 1992) (“A decision
on mootness grounds because the benefits
awarding but not quantifying damages
had been paid voluntarily).
normally is not final because it leaves a
question that is not collateral to the merits In disposing of Skretvedt’s Other
to be resolved in the district court.”). Claims Brief, the Magistrate Judge, as
However, “even when a judgment fails to noted already, addressed on the merits
fix the amount of damages, if the Skretvedt’s arguments with respect to
determination of damages w ill be various other benefits sought in other
mechanical and uncontroversial, so that counts of his complaint (e.g., Count VII
the issues the defendant wants to appeal for TRASOP benefits, Count VIII for STD
before that determination is made are very benefits). This had no effect on the
unlikely to be mooted or altered by it—in finality of the August 21, 2002, order, but
legal jargon, if only a ‘ministerial’ task with respect to the claim for T&P benefits
remains for the district court to perform— that remained pending, the August 21,
then immediate appeal is allowed.” Id. at 2002, opinion and order did not explicitly
1401. dispose of that claim. While the order did
While the Magistrate Judge did not address Skretvedt’s additional request in
quantify the accrued incapability benefits his complaint for interest on the delayed
due to Skretvedt, DuPont applied a payment of those benefits, the claim for
“mechanic al” formu la under t he T&P benefits itself was not directly
incapability plan and awarded Skretvedt
back incapability benefits. Skretvedt’s
only issue with the application of that Skretvedt in calculating his award was
formula was whether he should have been “mechanical” and Skretvedt only disputes
credited for six additional months of one aspect of that application (which was
company service because, in his view, he fully disposed of by the Magistrate Judge),
was entitled to six months of STD we conclude that the Magistrate Judge’s
benefits, and his length of service with order (and order on reconsideration)
DuPont should have been extended by six “end[ed] the litigation on the merits” with
months. The Magistrate Judge addressed respect to that claim and “le[ft] nothing for
this argument, and Skretvedt now raises it the court to do but execute the judgment.”
on appeal. Gerardi v. Pelullo, 16 F.3d 1363, 1369 (3d
Accordingly, because applying the Cir. 1994) (internal quotation marks and
terms of the incapability benefits plan to citations omitted).
8
addressed. With respect to Skretvedt’s claim
for the underlying award of T&P benefits,
Ordinarily, in the absence of a Fed.
he represented to the Magistrate Judge that
R. Civ. P. 54(b) certification, “there is no
DuPont had paid those benefits. See Other
final order if claims remain unresolved and
Claims Brief at 1 (“T&P Plan benefits
their resolution is to occur in the district
recently were granted by DuPont’s claims
court.” Aluminum Co. of Am. v. Beazer
agent, Aetna.”). Skretvedt did not argue
East, Inc., 124 F.3d 551, 557 (3d Cir.
that DuPont in any way failed to award
1997). We recognized in Beazer East,
T&P benefits or miscalculated the award
however, that
of T&P benefits, except as noted infra note
to determine the effect of a 14. The Magistrate Judge also recognized
district court’s decision–and in her August 21, 2002, opinion that T&P
therefore to determ ine benefits had been awarded. See Magis.
whether there is a final Judge Op. at 2 (“[Subsequent to Skretvedt
ord er–it is so m e ti m es I,] the DuPont Board of Benefits and
necessary to look beyond Pensions granted plaintiff [T&P] benefits,
the pleadings. A final order and [i]ncapability benefits approving a
is not absent just because start date of February 8, 1995.”).
the district court failed to Accordingly, we determine that the claim
adjudicate all of the claims for T&P benefits was sufficiently resolved
that were at one time in the August 21, 2002, opinion and order
pleaded. Inste ad, a n where the Magistrate Judge recognized
a p p e l l a t e c o ur t m u s t that payment of T&P benefits was moot.
determine whether, at the That order was therefore a final order10
time it is examining its
jurisdiction, there remain
unresolved issues to be judgment on a claim that has been
adjudicated in the district abandoned’ by a party. Lusardi v. Xerox
court. Corp., 975 F.2d 964, 970 n. 9 (3d
Cir.1992) (quoting Jones v. Celotex Corp.,
867 F.2d 1503, 1503-04 (5th Cir. 1989)
Id. at 560.9 (per curiam)).”) (additional citation
omitted).
10
The August 21, 2002, order also met
9
See also Hindes v. F.D.I.C., 137 F.3d the procedural requirements of Fed. R.
148, 156 n.3 (3d Cir. 1998) (“We have Civ. P. 58 for an order that begins the
case law indicating that ‘[a]n order that running of the time for appeal. See Local
effectively ends the litigation on the merits Union No. 1992 of the Int’l Bhd. of Elec.
is an appealable final judgment even if the Workers v. The Okonite Co., 358 F.3d 278,
district court does not formally include 285-86 (3d Cir. 2004) (order satisfies Rule
9
within the meaning of 28 U.S.C. § 1291.11 relevant portions of the Magistrate Judge’s
August 21, 2002, decision on appeal
address purely legal issues in the context
III. Standard of Review
of what is essentially a summary judgment
“[W]e must look to the course of determination. “Inasmuch as we are
the proceedings in the district court and the deciding this appeal by resolving questions
basis for its decision to determine the of law, we are exercising de novo [i.e.,
standard of review.” Blasband v. Rales, plenary] review.” Bowers v. Nat’l
971 F.2d 1034, 1039 (3d Cir. 1992). The Collegiate Athletic Ass’n, 346 F.3d 402,
410 (3d Cir. 2003).
58’s separate document requirement where The motion for reconsideration in
it (1) is self-contained and separate from this case dealt with the Magistrate Judge’s
the opinion, (2) sets forth the relief legal determinations. “The decision to
granted, and (3) omits the District Court’s deny a Motion for Reconsideration is
reasons for disposing of the parties’ within the discretion of the District Court,
motions as it did). but ‘if the court’s denial was based upon
the interpretation and application of a legal
11
The outstanding claim for statutory precept, review is plenary.’” Le v. Univ. of
attorney’s fees and costs under ERISA had Pa., 321 F.3d 403, 405-06 (3d Cir. 2003)
no effect on the finality of the Magistrate (quoting Koshatka v. Pa. Newspapers,
Judge’s August 21, 2002, order on the Inc., 762 F.2d 329, 333 (3d Cir.1985)); see
merits. See Gleason v. Norwest Mortgage, McAlister v. Sentry Ins. Co., 958 F.2d 550,
Inc., 243 F.3d 130, 137 (3d Cir. 2001) 552-53 (3d Cir. 1992) (same).
(“When an outstanding claim for
IV. Claims Litigated Other Than
attorneys’ fees is by a statutory prevailing
Those Remanded by Skretvedt I
party, the unresolved issue of those fees
does not prevent judgment on the merits As noted, on remand from Skretvedt
from being final.”) (citing Budinich v. I, Skretvedt raised various claims
Becton Dickinson & Co., 486 U.S. 196, regarding TRASOP benefits, medical
202 (1988)); Napier v. Thirty or More premiums, STD benefits, and other claims
Unidentified Fed. Agents, 855 F.2d 1080, asserted in various counts in his complaint
1090 (3d Cir. 1988) (“In [Budinich], the (the “ancillary claims”). Skretvedt now
Supreme Court held that a determination appeals from the Magistrate Judge’s denial
of liability and damages is final despite a of relief on remand with respect to those
pending determination of costs and claims. As discussed above, however,
attorney’s fees. The rationale of Budinich Skretvedt did not pursue any of these
is that the determination of costs and fees
following entry of judgment involves
considerations distinct from the underlying
merits of the action itself.”).
10
claims in his prior appeal to our Court. 12 challenge the Magistrate Judge’s grant of
summary judgment in favor of DuPont
We have held on numerous
with respect to these ancillary claims in his
occasions that “[a]n issue is waived unless
first appeal to our Court and thus clearly
a party raises it in its opening brief, and for
waived any arguments in favor of reversal
those purposes a passing reference to an
with respect to those claims, having
issue will not suffice to bring that issue
achieved success on the issues he did
before this court.” Laborers’ Int’l Union
appeal in Skretvedt I, Skretvedt now seeks
v. Foster Wheeler Corp., 26 F.3d 375, 398
to litigate those abandoned ancillary
(3d Cir.1994); see, e.g., Kopec v. Tate, 361
claims.
F.3d 772, 775 n.5 (3d Cir. 2004); Tse v.
Ventana Med. Sys., Inc., 297 F.3d 210, 225 We have consistently rejected such
n.6 (3d Cir. 2002). Although he did not attempts to litigate on remand issues that
were not raised in a party’s prior appeal
and that were not explicitly or implicitly
12
Skretvedt’s opening brief from remanded for further proceedings. “An
Skretvedt I at one point averred generally issue that is not addressed in an appellant’s
that he sought “to secure employee brief is deemed waived on appeal.
benefits under related plans of the DuPont Appellants’ alternative theor[ies] of
company” after referencing incapability recovery [were] not before this court in the
benefits. Appellant’s Skretvedt I Opening earlier appeal; a fortiori, [they] could not
Brief at 3. Skretvedt additionally indicated be remanded to the district court.
that he sought the “status of [a] retiree Consequently, we cannot consider [them]
under the “[incapability benefits] pension here [on appeal from the District Court’s
plan and related plans.” Id. Of course, proceedings on remand].” Wisniewski v.
“where important and complex issues of Johns-Manville Corp., 812 F.2d 81, 88 (3d
law are presented, a . . . detailed exposition Cir. 1987) (citations omitted); see also
of argument [in a party’s appellate brief] is Frank v. Colt Indus., Inc., 910 F.2d 90,
required to preserve an issue.” Frank v. 100 (3d Cir. 1990) (party “waived . . .
Colt Indus., Inc., 910 F.2d 90, 100 (3d Cir. argument by its failure to present it in the
1990). Skretvedt’s brief did not address proceedings prior to this appeal,”
the merits of his claims with respect to including proceedings “when the case was
these “related plans” and was clear in its before us on the previous appeal”).
conclusion section as to the only relief he
As we explained in Cowgill v.
sought on appeal. There Skretvedt
Raymark Industries, Inc., 832 F.2d 798 (3d
“request[ed] the Court [to] reverse the
Cir. 1987),
Order . . . granting Defendants summary
judgment and enter summary judgment for [a]dherence to the rule that a
the Appellant with an order to the District party waives a “contention
Court to grant him his Incap and T&P that could have been but
benefits.” Id. at 32 (emphasis added).
11
was not raised on a prior
appeal,” Munoz v. County of
Imperial, 667 F.2d 811, 817
288 (3d Cir. 1968). Nonetheless, “[a]
(9th Cir.), cert. denied, 459
district court may consider, as a matter of
U.S. 825, 103 S.Ct. 58, 74
first impression, those issues not expressly
L.Ed.2d 62 (1982), is, of
or implicitly disposed of by the appellate
course, necessary to the
decision.” In re Chambers Dev. Co., Inc.,
orderly conduct of litigation.
148 F.3d 214, 225 (3d Cir. 1998) (internal
Failure to follow this rule
quotation marks omitted); see also, e.g.,
would lead to the bizarre
Casey v. Planned Parenthood of
result, as stated admirably
Southeastern Pa., 14 F.3d 848, 857 (3d
by Judge Friendly, “that a
Cir. 1994).
party who has chosen not to
As we explained in Cowgill:
argue a point on a first
When a court of appeals
appeal should stand better as
reverses a judgment and
regards the law of the case
r e m a n d s f o r f u r th e r
than one who had argued
consideration of a particular
and lost.” Fogel v.
i s s u e , l e a v i n g o t h er
Chestnutt, 668 F.2d 100,
determinations of the trial
109 (2d Cir.1981), cert.
court intact, the unreversed
denied, 459 U.S. 828, 103
determinations of the trial
S.Ct. 65, 74 L.Ed.2d 66court normally continue to
(1982). . . .
work an estoppel. 1B J.
Moore, J. Lucas & T.
Currier, Moore’s Federal
Id. at 802 n.2 (quoting Laffey v. Northwest
Practice ¶ 30.416[2], p. 517
Airlines, Inc., 740 F.2d 1071, 1089-90
(3d ed. 1984). When the
(D.C. Cir. 1984)) (alterations omitted).13
estoppel is operative in
proceedings in the same
case on remand, courts
13
Our decision in Cowgill rested frequently speak in terms of
primarily on collateral estoppel, which we the law of the mandate or
described as, at least in this context, the law of the case rather
incorporating the same underlying than collateral estoppel but
principle as the so-called “mandate rule.” the underlying principle is
Under the mandate rule, a species of the the same. Todd & Co., Inc.
law of the case doctrine, “a trial court must v. S.E.C., 637 F.2d 154 (3d
comply strictly with the mandate directed Cir.1980) (when an
to it by the reviewing court.” Ratay v. appellate court affirms in
Lincoln Nat. Life Ins. Co., 405 F.2d 286,
12
circumstances, address claims that
Skretvedt previously abandoned. 1 4
Accordingly, we shall not now
Accordingly, we dismiss the portion of
consider arguments with respect to the
Skretvedt’s current appeal addressing
ancillary claims Skretvedt waived in his
claims asserted in his complaint other than
prior appeal. “The judicial system’s
Counts I and V for incapability and T&P
interest in finality and in efficient
benefits, respectively, and address herein
administration dictates that, absent
only relief requested with respect to those
extraordinary circumstances, litigants
counts.15
should not be permitted to relitigate issues
that they have already had a fair
opportunity to contest.” Cowgill, 832 F.2d 14With respect to STD benefits, we will
at 802 (quoting Todd & Co., Inc. v. S.E.C., not now consider, for example, whether
637 F.2d 154, 156 (3d Cir.1980)) (internal Skretvedt is entitled to those benefits and
quotation marks omitted). Our limited the effect of any award of them on the
remand in Skretvedt I granted nearly all of calculation of his incapability and T&P
the relief requested. We will not now, in benefits.
this second appeal, given the absence of a
15
s h o w i n g o f a n y e x t r a o rd i n a r y Skretvedt has requested additionally
that damages (“tax compensation”) be
awarded with respect to the increased tax
part and reverses in part, all liability he incurred because his accrued
issues necessarily disposed ERISA benefits were paid in a single tax
of in the affirmance become year. Had DuPont properly approved his
law of the case even though benefits claim when it was submitted, he
the case is remanded for suggests, his tax liability would have been
p r o ce e d i n g s o n o t h er lower because benefit payments would
issues). have been made monthly and he would not
Cowgill, 832 F.2d at 802. have received one large payment of
In light of Skretvedt’s clear waiver accrued benefits in a single tax year.
of the ancillary claims, we need not rely on Skretvedt argues that the Magistrate Judge
the mandate rule or law of the case in failed to apply Gelof v. Papineau, 829 F.2d
reaching our determination. Skretvedt had 452, 455 n.2 (3d Cir. 1987), a case under
a full and fair opportunity to litigate the the Age Discrimination in Employment
ancillary claims in his prior appeal, and did Act. Putting aside that Gelof is not an
not do so. Thus we see no basis under the ERISA case, it also did “not address . . .
facts of this case for applying any of the whether such an award should be made in
exceptions to the law of the case doctrine. all back pay cases” because of the
See In re City of Phila. Litig., 158 F.3d defendant’s “concession that the judgment
711, 718 (3d Cir. 1998) (discussing should properly include the negative tax
exceptions to the law of the case doctrine). impact of a lump sum payment as an
13
V. Interest on the Delayed Payment of
Benefits
element of damages. . . .” Id. Skretvedt’s Other Claims Brief
sought, inter alia, interest on the delayed
Skretvedt additionally suggests that
payment of incapability and T&P benefits
he would be entitled to tax compensation
under Counts I and V, respectively. 16 The
as a matter of “contract,” but he has not
Magistrate Judge analyzed Skretvedt’s
identified any term in any of his ERISA
request for interest with respect to both
plans that would provide for such a
forms of benefits under our decision in
remedy. He does argue, however, that tax
Fotta I, which held that a claimant whose
compensation is due him as a matter of
ERISA benefits were delayed but
restitution, presumably under ERISA
ultimately paid voluntarily (without a court
§ 502(a)(3)(B). As the Court of Appeals
judgment having been entered) could,
for the First Circuit has suggested under
under some circumstances, assert a cause
analogous facts, “[t]his argument is highly
dubious; the tax payments at issue would
seem to be completely distinct from any
ill-gotten profits which might properly be
made subject to a viable restitution claim.”
Armstrong v. Jefferson Smurfit Corp., 30
F.3d 11, 13 n.5 (1st Cir. 1994). § 502(a)(3)”); Armstrong, 30 F.3d at 13(Mertens “compels the conclusion that
Skretvedt’s claim for ta x plaintiffs are precluded from recovering
compensation would seem to be no more damages for the federal and state tax
than an ordinary claim for money damages liabilities they incurred on . . . lump sum
as compensation for losses suffered. payments”); see also Harsch v. Eisenberg,
Mertens v. Hewitt Associates, 508 U.S. 956 F.2d 651, 661 (7th Cir. 1992).
248, 255 (1993), makes clear that such
16
claims for money damages are not We do not read our mandate in
permissible under § 502(a)(3)(B) because Skretvedt I as having precluded Skretvedt
they are “the classic form of legal relief” from seeking interest with respect to the
and are therefore not within the scope of claims for incapability and T&P benefits
“appropriate equitable relief” allowed that were on limited remand. The
under § 502(a)(3)(B). Accordingly, we see Magistrate Judge clearly had authority to
no basis for such a claim to be brought conduct further proceedings with respect
under § 502(a)(3)(B). See Farr v. U.S. to interest on those remanded claims, as
West Communications, Inc., 151 F.3d 908, that “issue[] [was] not expressly or
916 (9th Cir. 1998) (citing Mertens and implicitly disposed of by the appellate
holding that “binding precedent compels decision.” In re Chambers Dev. Co., Inc.,
us to conclude that Plaintiffs may not 148 F.3d at 225 (internal quotation marks
recover their tax benefit losses under omitted).
14
of action under ERISA § 502(a)(3)(B)17 to interest earned on withheld benefits.
for interest on that delayed payment as a
A. Prejudgment Interest on a
form of “appropriate equitable relief.”
Judgment Procured Pursuant to
Fotta I, 165 F.3d at 214. The Magistrate
§ 502(a)(1)(B)
Judge concluded that “[a]lthough Fotta [I]
may support [a claim for interest], this Skretvedt was awarded incapability
court cannot apply Fotta [I] in light of . . . benefits pursuant to ERISA § 502(a)(1)(B)
[Great-West Life & Annuity Insurance Co. by way of a court judgment. This
v. Knudson, 534 U.S. 204 (2002)].” provision states:
Magistrate Judge Op. at 9. Simply put, the
A civil action may be
Magistrate Judge concluded that Fotta I
brought . . . by a participant
had been implicitly overruled by Great-
or beneficiary . . . to recover
West. We enter this thicket as a matter of
benefits due to him under
first impression for our Court.
the terms of his plan, to
We conclude first that Great-West enforce his rights under the
does not apply to Skretvedt’s claim for terms of the plan, or to
prejudgment interest with respect to clarify his rights to future
incapability benefits awarded pursuant to benefits under the terms of
a court judgm ent unde r ERIS A the plan. . . .
§ 502(a)(1)(B). We then address
separately Skretvedt’s claims for interest
with respect to T&P benefits, which his Id. Skretvedt’s request for interest with
employer voluntarily paid after several respect to ERISA benefits he was awarded
years of litigation, and conclude that p u r s u a n t t o a j u dg m e n t u n d e r
Great-West does not preclude a claim § 502(a)(1)(B) is no more than an ordinary
under ERISA § 502(a)(3)(B) for restitution request for prejudgment interest on a
by way of a constructive trust with respect judgment obtained pursuant to a federal
statute. Our Court in Anthuis v. Colt
Industries Operating Corp., 971 F.2d 99917
Section 502(a)(3)(B) provides: (3d Cir. 1992), applied to the ERISA
A civil action may be context the long-standing rule that, in the
brought . . . by a participant, absence of an explicit statutory command
beneficiary, or fiduciary . . . otherwise, district courts have broad
to obtain other appropriate discretion to award prejudgment interest
equitable relief (i) to redress on a judgment obtained pursuant to a
such violations or (ii) to federal statute.
enforce any provisions of
While it is true that
this subchapter or the terms
Congress did not mandate
of the plan. . . .
p r e j u d g m e nt i n t e re s t
Id.15
payments for other than standards in granting prejudgment
delinquent contributions, we interest”).
have held generally that
Anthuis relied in part on the
“[i]n the absence of an
Supreme Court’s determination in Board
e x p l i c i t c o n g r e s s io n a l
of Commissioners of Jackson County,
directive, the awarding of
Kansas v. United States, 308 U.S. 343, 352
prejudgment interest under
(1939), that, where “[t]he issue is
federal law is committed to
uncontrolled by any formal expression of
the trial court’s broad
the will of Congress,” id. at 349, “interest
discretion.” Ambromovage
is not recovered according to a rigid theory
v. United Mine Workers,
of compensation for money withheld, but
726 F.2d 972, 981-82 (3d
is given in response to considerations of
Cir. 1984). Ambromovage
fairness. It is denied when its exaction
cited Board of
would be inequitable.” Id. at 352. The
Commissioners of Jackson
Supreme Court later explained in Rodgers
County, Kansas v. United
v. United States, 332 U.S. 371, 373 (1947),
States, 308 U.S. 343, 352,
that
60 S.Ct. 285, 289, 84 L.Ed.
313 (1939), in which the the failure to mention
general federal rule was interest in statutes which
announced that prejudgment create obligations has not
interest is to be “given in been interpreted by this
response to considerations Court as manifesting an
of fairness [and] denied unequivocal congressional
when its exaction would be purpose that the obligation
inequitable.” shall not bear interest.
Billings v. United States,
232 U.S. 261, 284-288, 34
Id. at 1009 (alterations in original); see S.Ct. 421, 425-427, 58
also Schake v. Colt Indus. Operating Corp. L.Ed. 596 [(1914)]. For in
Severance Plan for Salaried, Nonunion the absence of an
Employees, 960 F.2d 1187, 1190, 1192 n.4 unequivocal prohibition of
(3d Cir. 1992) (where a judgment has been interest on such obligations,
entered in favor of a prevailing ERISA this Court has fashioned
plaintiff, “[i]t is undisputed that rules which granted or
prejudgment interest typically is granted to denied interest on particular
make a plaintiff whole because the statutory obligations by an
defendant may wrongly benefit from use appraisal of the
of plaintiff’s money,” subject to the congressional purpose in
District Court’s applying “the appropriate imposing them and in the
16
light of general principles Anth uis, w e applied Board of
deemed relevant by the Commissioners in determining that a
Court. See, e.g., Royal successful ERISA plaintiff could obtain
Indemnity Co. v. United prejudgment interest as part of his or her
States, [313 U.S. 289, award of delayed ERISA benefits.19
295-97, 61 S.Ct. 995, 997,
998, 85 L.Ed. 1361 (1941)];
Board of Com’rs of Jackson Rodgers in determining that a “back pay
County in State of Kansas v. award under the Fair Labor Standards Act
United States, 308 U.S. 343, should be presumed to carry . . .
60 S.Ct. 285, 84 L.Ed. 313 pre-judgment interest unless the equities in
[(1939)]. a particular case require otherwise”);
Ambromovage v. United Mine Workers of
Id. Aa., 726 F.2d 972, 982 n.27 (3d Cir. 1984)
Applying Board of Commissioners (applying Board of Commissioners and
or Rodgers, we have in the past Rodgers and determining that “[t]he
determined that prejudgment interest is purposes of the provisions of the
available with respect to judgments Taft-Hartley Act under which this lawsuit
obtained pursuant to several statutes that proceeded is the protection of pension
are silent as to its exaction.18 Moreover, in beneficiaries and union members. It would
not be inconsistent with these purposes to
award aggrieved members of those
protected classes interest on lost
18
See, e.g., Gov’t of V. I. v. Davis, 43 income.”).
F.3d 41, 47 (3d Cir. 1994) (citing Rodgers
19
and holding that prejudgment interest “is Anthuis and Schake are by no means
an aspect of the victim’s actual loss which alone in concluding that a successful
must be accounted for in the calculation of ERISA plaintiff may be entitled to
restitution in order to effect full prejudgment interest as part of his or her
compensation” under the Victim and benefits award. See, e.g., Cottrill v.
Witness Protection Act); Poleto v. Consol. Sparrow, Johnson & Ursillo, Inc., et al.,
Rail Corp., 826 F.2d 1270, 1274-79 (3d 100 F.3d 220, 223 (1st Cir. 1996) (“district
Cir. 1987) (applying Rodgers and, where court may grant prejudgment interest in its
Congress was silent, “look[ing] to the discretion to prevailing fiduciaries,
purposes behind [the] statute as a general beneficiaries, or plan participants” in
indication of Congressional purpose,” in ERISA cases); Quesinberry v. Life Ins. Co.
d e t e r m in i n g t h e a v a i l a b i l ity o f of N. Am., 987 F.2d 1017, 1030 (4th Cir.
prejudgment interest under the Federal 1993) (“ERISA does not specifically
Employers’ Liability Act); Brock v. provide for pre-judgment interest, and
Richardson, 812 F.2d 121, 126-27 (3d Cir. absent a statutory mandate the award of
1987) (citing Board of Commissioners and pre-judgment interest is discretionary with
17
Although we wrote in the context of Anthuis the statutory provision of ERISA
benefits having been awarded pursuant to under which a plaintiff could obtain
§ 502(a)(1)(B), we did not make explicit in prejudgment interest as part of her or his
benefits award. But we did not suggest
that it would be necessary for a prevailing
plaintiff to pursue such a claim as “other
the trial court.”) (en banc); Hansen v.
appropriate equitable relief” under
Cont’l Ins. Co., 940 F.2d 971, 984 n.11
§ 502(a)(3)(B).20 We now make explicit
(5th Cir. 1991) (“[T]o determine whether
an award of prejudgment interest is
appropriate, the court must determine
20
whether such an award is precluded by the We recognize that the panel in Fotta
federal statute that gives rise to the cause II, in a case where there had been no
of action, and if such an award is not underlying judgment representing an
precluded, whether it would further the award of benefits under § 502(a)(1)(B),
congressional policies embodied in the act. construed Anthuis as allowing for an
ERISA does not preclude an award of award of prejudgment interest under
prejudgment interest. Furthermore, . . . we § 502(a)(3)(B).
have no doubt[] that an award of Fotta I . . . determined who
prejudgment interest under ERISA furthers has a cause of action under
the purposes of that statute by encouraging § 502(a)(3)(B). Before Fotta
plan providers to settle disputes quickly I, only an ER ISA
and fairly, thereby avoiding the expense beneficiary who had brought
and difficulty of federal litigation.”) a legal action to recover
(internal citation omitted); Bricklayers’ w r o ngf ully w i t h h e ld
Pension Trust Fund v. Taiariol, 671 F.2d benefits could sue for
988, 989 (6th Cir. 1982) (“The general rule i n t e r e s t u n d e r
is that in the absence of a statutory [§ 502(a)(3)(B)]. See, e.g.,
provision the award of prejudgment Anthuis, 971 F.2d at 1010.
interest is in the discretion of the court.”); Fotta II, 319 F.3d at 617. But as noted,
Dishman v. UNUM Life Ins. Co. of Am., Anthuis itself made no mention of a
269 F.3d 974, 988 (9th Cir. 2001) successful ERISA plaintiff who received
(allowing for prejudgment interest on an benefits under § 502(a)(1)(B) having to
ERISA award); Florence Nightingale “sue for interest” under § 503(a)(3)(B).
Nursing Serv., Inc. v. Blue Cross/Blue Instead, it indicated that “in the district
Shield of Ala., 41 F.3d 1476, 1484 (11th court’s discretion, prejudgment interest
Cir. 1995) (“The award of an amount of may be awarded for a denial of pension
prejudgment interest in an ERISA case is benefits.” Anthuis, 971 F.2d at 1010
a matter committed to the sound discretion (emphasis added). Accordingly, a district
of the trial court.”) (internal quotation court under Anthuis could allow for
marks omitted). prejudgment interest as part of the benefits
18
that, in accordance with Board of granted would otherwise fall
Commissioners and Rodgers, an ERISA short of making the claimant
plaintiff who prevails under § 502(a)(1)(B) whole because he or she has
in seeking an award of benefits may been denied the use of the
request prejudgment interest under that money which was legally
section as part of his or her benefits award. due. Awarding prejudgment
interest is intended to serve
Accordingly, the Supreme Court’s
at least two purposes: to
decision in Great-West, interpreting the
c o m p e n sate prev ailin g
extent of “appropriate equitable relief”
parties for the true costs of
available under ERISA § 502(a)(3)(B),
money damages incurred,
does not apply to the availability of
and, where liability and the
prejudgment interest on a benefits award
amount of damages are
obtained under § 502(a)(1)(B). We
fairly certain, to promote
therefore reverse the M agistrate Judge’s
s e t tl e m e n t a n d d e t e r
denial of prejudgment interest with respect
attempts to benefit from the
to the delayed payment of Skretvedt’s
inherent delays of litigation.
incapability benefits so that the Court may
Thus prejudgment interest
exercise its discretion in the first instance
should ordinarily be granted
in determining whether prejudgment
unl e s s e xcep tional o r
interest is appropriate. Under Anthuis,
unusual circumstances exist
[a]s a general rule , making the award of interest
prejudgment interest is to be inequitable.
awarded when the amount
of the underlying liability is
reaso nably capable of Anthuis, 971 F.2d at 1010 (quoting Stroh
ascertainment and the relief Container Co. v. Delphi Indus., Inc., 783
F.2d 745, 752 (8th Cir. 1986) (internal
citations omitted)).
award for an ERISA plaintiff who is We recognize that we have “not . . .
successful under § 502(a)(1)(B). To the offer[ed] extensive guidance for deciding
extent that Fotta II discusses a successful what rate of interest is appropriate in a
ERISA plaintiff needing to use given case.” Holmes v. Pension Plan of
§ 502(a)(3)(B) to “sue for interest,” in the Bethlehem Steel Corp., 213 F.3d 124, 131-
context of deciding whether a plaintiff 32 (3d Cir. 2000). Instead, we reiterate
who had not received an underlying award that “the awarding of prejudgment interest
of benefits under § 502(a)(1)(B) could still under federal law is committed to the trial
sue for interest on the delayed payment of court’s broad discretion.” Ambromovage,
benefits under § 502(a)(3)(B), such 726 F.2d at 981-82; see also Sun Ship, Inc.
statements are dicta.
19
v. Matson Navigation Co., 785 F.2d 59, 63 benefits under § 502(a)(1)(B). Our Court
(3d Cir. 1986) (“In federal question cases, disagreed.
the rate of prejudgment interest is
We believe the distinction is
committed to the discretion of the district
unpersuasive. The principles
court.”).
justif ying p r e j u d g me nt
B. Interest on the Delayed Payment interest also justify an award
of Benefits Under § 502(a)(3)(B) of interest where benefits
are delayed but paid without
In Fotta I, we faced a novel
the beneficiary's having
question: can “a beneficiary who has been
obtained a judgment. The
able to receive his or her benefits due
concerns animating our
under an ER ISA plan only after
decisions in Schake and
considerable delay, but without resorting
Anthuis—viz., making the
to litigation to recover that payment[,
claimant whole and
assert] a cause of action under ERISA.”
preventing unjust
Fotta I, 165 F.3d at 211. While Anthuis
enrichment— are not
and Schake allowed for prejudgment
diminished merely because
interest as part of an underlying judgment
the plan has paid the
awarding benefits under § 502(a)(1)(B),
overdue benefits without the
Fotta I required us to determine whether
claimant having resorted to
ERISA would support a separate cause of
litigation to secure payment.
action allowing for an award of interest 21
A late payment of benefits
on the delayed payment of benefits.
effectively deprives the
Appellants in Fotta I conceded that
beneficiary of the time value
prejudgment interest is available where
of his or her money whether
there is an underlying § 502(a)(1)(B)
or not the beneficiary
claim, but argued that ERISA does not
secured the overdue benefits
allow for an independent cause of action to
through a judgment as the
be brought seeking interest alone where
result of ERISA litigation.
there has been no underlying award of
Unjust enrichment
principles also apply with
21 equal force in this setting.
We refer to “interest” and not
To hold that the absence of
“prejudgment interest” with respect to the
a judgment deprives the
cause of action discussed in Fotta I, as a
injured beneficiary of the
plaintiff seeking to recover interest on the
time value of his or her
delayed payment of benefits where there is
money would create a
no underlying court judgment does not
financial incentive for plans
seek “prejudgment” interest, but merely
to delay payment and thus
“interest.”
20
retain interest that rightfully While not ruling out that
belongs to the beneficiary. § 502(a)(1)(B) might “provide[] a possible
statutory basis” for a claimant to bring a
Fotta I, 165 F.3d at 212. At base, Fotta I
suit seeking interest on the delayed
concluded, there is no persuasive
payment of benefits, id. at 213-14 n.1,
distinction between justifying prejudgment
Fotta I concluded that “that section
interest where a judgment for unpaid
502(a)(3)(B) of ERISA— allowing a
benefits has been obtained and justifying
beneficiary to sue for ‘other appropriate
an award of interest where benefits are
equitable relief . . . to enforce any
delayed but paid without the claimant
provisions of this subchapter or the terms
having received a judgment.
of the plan’—is the appropriate vehicle for
The facts of this case demonstrate such a cause of action.” Id. at 213. An
the wisdom of that conclusion. Skretvedt award of interest on the delayed payment
first applied for benefits in 1995. He was of benefits under § 502(a)(3)(B) “ensures
awarded incapability benefits by way of a full compensation [and] serves to prevent
court judgment entered on remand from unjust enrichment.” Id. We held that such
our decision in Skretvedt I, thereby a claim under § 502(a)(3)(B) was one cast
allowing him to request that the Court in “[r]estitution–the traditional remedy for
exercise its discretion to award him unjust enrichment,” which “is widely, if
prejudgment interest. While no judgment not universally, regarded as a tool of
was entered with respect to Skretvedt’s equity.” Id. Therefore, a claimant could
T&P benefits, as our Court requested that seek interest on the delayed voluntary
DuPont reconsider the denial of those payment of benefits as a form of restitution
benefits in light of our opinion in Skretvedt authorized by § 502(a)(3)(B), allowing for
I, DuPont voluntarily awarded Skretvedt “other appropriate equitable relief.” 23
those benefits shortly after Skretvedt I.
Fotta I wisely noted that making the
claimant whole and unjust enrichment are voluntarily by DuPont in the late stages of
concerns equally present with respect to this litigation.
both of these scenarios (i.e., where 23
Other circuit courts have since
benefits have been awarded pursuant to a
similarly held that a cause of action may
judgment and where benefits have been
be maintained for interest on the delayed
withheld but are ultimately awarded
payment of benefits as “appropriate
without resort to a judgment).22
equitable relief” under § 502(a)(3)(B). See
Dunnigan v. Metro. Life Ins. Co., 277 F.3d
223, 229 (2d Cir. 2002) (“Where interest is
22
Indeed, this case presents an even sought to make the plaintiff whole by
more compelling example than Fotta I, as eliminating the effect of a defendant's
Skretvedt did have to resort to litigation breach of a fiduciary duty, we see no
and was only paid T&P benefits reason why such interest should not be
21
Hewitt Associates, 508 U.S. 248 (1993),
that “the term ‘equitable relief’ in §
1. Great-West and Equitable
502(a)(3) must refer to ‘those categories of
Versus Legal Restitution
relief that were typically available in
In Great-West the Supreme Court equity.’” Great-West, 534 U.S. at 210
reiterated its earlier holding in Mertens v. (quoting Mertens, 508 U.S. at 256). The
Court then clarified that restitution, a
remedy Fotta I generally regarded as
equitable and therefore within the scope of
deemed ‘appropriate equitable relief’
relief available under § 502(a)(3)(B), in
within the scope of § 502(a)(3)(B).”); see
fact exists in two forms: legal restitution
also Kerr v. Charles F. Vatterott & Co.,
and equitable restitution. Only the latter
184 F.3d 938, 946 (8th Cir. 1999)
form of restitution, the Supreme Court
(§ 502(a)(3) supports a claim for interest
held, is available under § 502(a)(3)(B). Id.
on the delayed payment of benefits to
at 212-13 (“[N]ot all relief falling under
prevent unjust enrichment where “the
the rubric of restitution is available in
wrongdoer . . . use[d] the withheld benefits
equity. . . . [R]estitution is a legal remedy
or retain[ed] interest earned on the funds
when ordered in a case at law and an
during the time of the dispute”). The
equitable remedy . . . when ordered in an
Court of Appeals for the Seventh Circuit
equity case, and whether it is legal or
has specifically suggested that such
equitable depends on the basis for the
restitutionary relief is available through a
plaintiff’s claim and the nature of the
constructive trust. See Clair v. Harris
underlying remedies sought.”) (internal
Trust and Savings Bank, 190 F.3d 495,
quotation marks and alterations omitted).
498-99 (7th Cir. 1999) (“[P]laintiffs are
asking . . . that the court impress a This distinction between legal
constructive trust on the interest that the restitution and equitable restitution turns
defendants earned on benefits withheld in on the following:
violation of the terms of the plan. A
In cases in which the
constructive trust . . . is an equitable
plaintiff “could not assert
remedy commonly sought and granted in
title or right to possession of
cases of unjust enrichment. . . . If A
particular property, but in
wrongfully appropriates money or other
which nevertheless he might
property belonging to B, the court can
be able to show just grounds
order A to hold the property in trust for B.
for recovering money to pay
That is the nature of the relief sought by
for some benefit the
the plaintiffs in this case [and] Health Cost
defendant had received from
Controls [v. Washington, 187 F.3d 703,
him,” the plaintiff had a
710 (7th Cir. 1999)] holds that such relief
right to restitution at law
is squarely within the scope of section
through an action derived
502(a)(3)(B).”).
22
from the common-law writ case of the equitable lien) to
of assumpsit. 1 [Dan B. a plaintiff who was, in the
Dobbs, Law of Remedies: eyes of equity, the true
Damages–Equity–Restituti owner. But where “the
on] § 4.2(1), at 571 [(2d ed. property [sought to be
1993)]. . . . In such cases, recovered] or its proceeds
the plaintiff’s claim was have been so dissipated so
considered legal because he that no product remains, [the
s o u g h t “ t o o b t ai n a plaintiff’s] claim is only that
judgment imposing a merely of a general creditor,” and
personal liability upon the the plaintiff “cannot enforce
defendant to pay a sum of a constructive trust of or an
money.” Restatement of equitable lien upon other
Restitution § 160, Comment property of the [defendant].”
a, pp. 641-642 (1936). Restatement of Restitution,
supra, § 215, Comment a, at
***
867. Thus, for restitution to
In contrast, a plaintiff could lie in equity, the action
seek restitution in equity, generally must seek not to
ordinarily in the form of a impose personal liability on
constructive trust or an the defendant, but to restore
equitable lien, where money to the plaintiff particular
or property identified as funds or property in the
belonging in good defendant’s possession.
conscience to the plaintiff
could clearly be traced to
particular funds or property Great-West, 534 U.S. at 213-14 (emphasis
in the defendant’s and last three alterations in original). Put
possession. See 1 Dobbs § simply, “equitable relief” under §
4.3(1), at 587-588; 502(a)(3)(B) is to be construed by
Restatement of Restitution, reference to the types of relief typically
supra, § 160, Comment a, at available in equity, and courts are to
641-642; 1 G. Palmer, Law analyze the underlying nature of the claim
of Restitution § 1.4, p. 17; and relief requested by a plaintiff in order
§ 3.7, p. 262 (1978). A to determine whether that relief had been
court of equity could then typically available in equity.
order a defendant to transfer
Res titution in e quity w as
title (in the case of the
“ordinarily in the form of a constructive
constructive trust) or to give
trust or an equitable lien, where money or
a security interest (in the
23
property identified as belonging in good Skretvedt seeks legal relief.” Magis.
conscience to the plaintiff could clearly be Judge Op. at 9. The Magistrate Judge
traced to particular funds or property in the perceived in Great-West a per se
defendant’s possession.” Great-West, 534 pronouncement that where a plaintiff seeks
U.S. at 213 (citing 1 Dan B. Dobbs, Law of an award that ultimately involves money
Remedies: Damages–Equity–Restitution § (regardless whether that award consists of
4.3(1), at 587-88 (2d ed. 1993) (“Dobbs”); a constructive trust over funds that “belong
Restatement of Restitution § 160 cmt. a, at in good conscience to the plaintiff” and
641-42 (1936); George E. Palmer, Law of can “clearly be traced to particular funds in
Restitution § 1.4, at 17 (1978) (“Palmer”); the defendant’s possession”), such an
id. § 3.7, at 262). 24 award is a claim for legal relief and is not
available under § 502(a)(3)(B). 25
Without examining the specific
forms of equitable restitution addressed in Our reading, however, is that
Great-West, the Magistrate Judge in this Great-West did not adopt such a rule.
case concluded that “the [Supreme] Court Instead, the Supreme Court indicated that,
clearly indicated [in Great-West] that to determine whether a specific form of
claims for monetary damages, for the most underlying relief requested is available
part, will be claims for legal relief. Here, under § 502(a)(3)(B), we must consider
Skretvedt seeks money to compensate for whether that relief was typically available
the lost interest caused by DuPont’s at law or in equity and, in the case of
delayed payment. Thus, the Great-West restitutionary relief, whether the relief
decision compels this court to find that requested was in fact a form of equitable
restitution.
24 2. Reexamining a
The Court also noted that an
Restitutionary Award of
additional form of equitable restitution, an
Interest Under
accounting for profits, is outside the
§ 502(a)(3)(B)
general rule that an action sounding in
equitable restitution must not seek to Analyzing the propriety of an
impose personal liability on the defendant.
“If, for example, a plaintiff is entitled to a
25
constructive trust on particular property Without deciding the issue, the Court
held by the defendant, he may also recover of Appeals for the Eleventh Circuit has
profits produced by the defendant’s use of also suggested that Great-West “raises the
that property, even if he cannot identify a question whether § 502(a)(3) ever allows
particular res containing the profits sought an award of interest for delayed benefits or
to be recovered. See 1 Dobbs § 4.3(1), at whether such a claim is an impermissible
588; id., § 4.3(5), at 608.” Great-West, attempt to dress an essentially legal claim
534 U.S. at 214 n.2. We address this form in the language of equity.” Flint v. ABB,
of restitution infra note 26. Inc., 337 F.3d 1326, 1331 (11th Cir. 2003).
24
interest award under § 502(a)(3)(B) again determination, Great-West indicated that
in light of Great-West, we start with courts should “consult[], as we have done,
whether a claim for interest on the late standard current works such as Dobbs,
payment of funds would generally be one Palmer, Corbin, and the Restatements,
at law or one in equity. It is clear that a which make the answers clear.” Great-
claim for interest alone (i.e., where the West, 534 U.S. at 217. Accordingly, we
underlying obligation had already been inquire whether Skretvedt may seek
paid) on a late payment (e.g., an overdue interest on the delayed payment of his
loan) was traditionally not permitted at T & P be ne f its thro u g h e q u i t ab le
law. See Stuart v. Barnes, 153 U.S. 456, restitution–by way of a constructive trust,
462 (1894) (in an action for assumpsit, equita ble lien, or accounting for
“[w]hen he who has [the] right [to compel profits–the three forms of restitution that
payment] commences an action for its the Court determined are equitable.
enforcement, he at the same time acquires
Because a constructive trust may be
a subordinate right, incident to the relief
placed over “interest” actually earned by a
which he may obtain, to demand and
plan that has wrongfully delayed paying
receive interest. If, however, the principal
benefits, we examine only the constructive
sum has been paid, so that, as to it, an
trust remedy.26
action brought cannot be maintained, the
opportunity to acquire a right to damages
is lost.”). However, an independent claim 26
In a well-reasoned opinion, the
for interest on wrongfully withheld funds
District Court in Dobson v. Hartford
(where the underlying funds themselves
Financial Services, et al., 196 F. Supp. 2d
are no longer in dispute), as Fotta I
152, 169-73 (D. Conn. 2002), determined
explains, would be cognizable under a
that both a constructive trust and/or
restitutionary theory. See Restatement of
accounting for profits would allow for the
Restitution § 190, at 780 (“Where a person
disgorging of a fiduciary’s ill-gotten gain
in a fiduciary relation to another acquires
obtained by wrongfully withholding
property, and the acquisition or retention
disability benefits in violation of ERISA.
of the property is in violation of his duty as
The Court of Appeals for the Eighth
fiduciary, he holds it upon a constructive
Circuit very recently has determined that
trust for the other.”).
an award of interest is still permissible
Given the Supreme Court’s after Great-West using the accounting for
determination in Great-West that only profits remedy. See Parke v. First
equitable restitution is available under § Reliance Standard Life Ins. Co., ___ F.3d
502(a)(3)(B), we now determine whether ___, 2004 W L 1144787, at *3-*7 (8th Cir.
a claim for interest on wrongfully withheld 2004) (“an award of interest on wrongfully
ERISA funds is equitable, as opposed to delayed benefits remains permissible under
legal, restitution. In making this [§ 502](a)(3)(B) after [Great-West through
an accounting for profits] as a remedy for
25
According to Dobbs, a constructive
a breach of a fiduciary duty to a trust can be imposed “upon any
beneficiary”); see also Dunnigan v. Metro. identifiable kind of property or entitlement
Life Ins. Co., 214 F.R.D. 125, 134-35 in the defendant’s hands if, in equity and
(S.D.N.Y. 2003) (“Great-West has no conscience, it belongs to the plaintiff.”
bearing on [an action for interest on the Dobbs § 4.3(2), at 589-90. A constructive
delayed payment of benefits under trust is “only used when the defendant has
§ 502(a)(3)] because the relief [plaintiff] a legally recognized right in a particular
seeks–an accounting of [the fiduciary’s] asset [, which] may even be a fund of
profits made on withheld disability money like a bank account.” Id. at 591.
benefits–is a form of relief ‘typically The constructive trust has what Dobbs
available in equity’. . . .”). calls the “important characteristic” of
With respect to the accounting for allowing a plaintiff to “obtain, not merely
profits remedy, however, the Supreme what he lost, but gains received by the
Court in Dairy Queen, Inc. v. Wood, 369 defendant from the property’s increase in
U.S. 469 (1962), cautioned that value, from its transfer, from its use in a
[t]he necessary prerequisite business operation.” Id. at 592.
to the right to maintain a
Dobbs is consistent with the
suit for an equitable
Restatement of Restitution, which suggests
accounting, like all other
that a constructive trust arises “[w]here a
equitable remedies, is . . .
person holding title to property is subject
the absence of an adequate
remedy at law.
Consequently, in order to
maintain such a suit on a where the legal issues are
cause of action cognizable too complicated for the jury
at law, as this one is, the adequately to handle alone,
plaintiff must be able to the burden of such a
show that the ‘accounts showing is considerably
between the parties’ are of increased and it will indeed
such a ‘complicated nature’ be a rare case in which it
that only a court of equity can be met.
can satisfactorily unravel Id. at 478 (footnotes omitted). Dairy
them. In view of the powers Queen appears to cast some doubt on the
given to District Courts by purely equitable nature of the accounting
Federal Rule of Civil for profits remedy. We proceed with the
Procedure 53(b) to appoint constructive trust remedy because it is
masters to assist the jury in clear that this remedy would have been
those exceptional cases typically available in equity.
26
to an equitable duty to convey it to another plaintiff. . . .
on the ground that he would be unjustly
Id. at 643-44. Dobbs, Palmer, and the
enriched if he were permitted to retain it. .
Restatement all make clear that the
. .” Restatement of Restitution § 160, at
constructive trust remedy typically would
640-41; see also Palmer § 1.3, at 12 (“In
allow Skretvedt, in equity, to force DuPont
the cases as a whole, constructive trust is
to disgorge the gain it received on his
accepted as a technique to be used in
withheld benefits under a restitutionary
working out solutions to problems of
theory.
unjust enrichment. . . .”). Generally, a
constructive trust is imposed “to restore to 3. Specific Funds Traceable
the plaintiff property of which he has been to an ERISA Plan
unjustly deprived and to take from the
We must still determine, however,
defendant property the retention of which
whether the restitution Skretvedt seeks is
by him would result in a corresponding
with respect to “money or property
unjust enrichment of the defendant. . . .”
identified as belonging in good conscience
Restatement of Restitution § 160, cmt. d,
to the plaintiff [that can] clearly be traced
at 643. Even where the
to particular funds or property in the
plaintiff . . . has not suffered defendant’s possession.” Great-West, 534
a loss or . . . has not suffered U.S. at 204; see also Palmer § 3.7, at 262
a loss as great as the benefit (in “most of the restitution cases the
received by the defendant[,] equitable relief sought by the plaintiff is
. . . the defendant is with respect to specific property, usually to
compelled to surrender the obtain either specific restitution or a lien
benefit on the ground that he on the property”).
would be unjustly enriched
DuPont, seizing on this aspect of
if he were permitted to
Great-West, argues that Skretvedt seeks to
retain it, even though that
make it and the defendant ERISA plans
enrichment is not at the
“personally liable” for “interest” on the
expense or wholly at the
delayed payment of his ERISA benefits in
expense of the plaintiff.
violation of Great-West. We disagree.
Thus, if the defendant has
Skretvedt’s cause of action under
made a profit through the
§ 502(a)(3)(B) is against the relevant
violation of a duty to the
ERISA plans whereby he seeks restitution
plaintiff to whom he is in a
by way of a constructive trust over the
fiduciary relation, he can be
actual funds wrongfully earned by those
compelled to surrender the
profit to the plaintiff,
although the profit was not
made at the expense of the
27
plans.27 In our case, we need not even look
to a third-party transferee to find the funds
In explaining the degree to which a
Skretvedt alleges belong to him. Instead,
plaintiff must identify money or property
we need look no further than the ERISA
that is “clearly . . . trace[able] to particular
plans that withheld Skretvedt’s benefits for
funds or property in the defendant’s
several years and profited with respect to
possession,” Great-West, 534 U.S. at 213,
the withholding of those benefits. As did
the Supreme Court looked to Harris Trust
the fiduciaries in Harris Trust, Skretvedt
and Savings Bank v. Salomon Smith
has sufficiently identified specific funds
Barney, Inc., 530 U.S. 238 (2000). There,
traceable to the defendant ERISA plans
an ERISA pension plan fiduciary
that belong in good conscience to him.28
purchased interests in several motel
properties for $21 million from a non- 4. Proceedings on Remand
fiduciary party in interest (the “transferee”
In this context, we reverse the
of the plan’s assets). The transaction, the
Magistrate Judge’s determination that as a
Court assumed, was prohibited by statute.
matter of law Skretvedt cannot seek
The Court allowed an action under §
interest on the delayed payment of his
502(a)(3)(B) against the transferee “for
T&P benefits under § 502(a)(3)(B). We
restitution of the property (if not already
remand to the Magistrate Judge
disposed of) or disgorgement of proceeds
Skretvedt’s claim for interest with respect
(if already disposed of), and disgorgement
to the delayed payment of T&P benefits
of the third person’s profits derived
for that Court to determine in the first
therefrom,” id. at 250, where the transferee
instance whether, under Fotta II, “those
“had actual or constructive knowledge of
the circumstances that rendered the
transaction unlawful.” Id. at 251.
28
Indeed, as several circuit courts have
noted, the Senate Finance Committee, in
its report on ERISA , specifically
27
As a record has not been developed contemplated that “appropriate equitable
as to whether Skretvedt’s ERISA plans relief” under § 502(a)(3)(B) would
have, in fact, profited with respect to the include, “[f]or example, . . . a constructive
withholding of Skretvedt’s benefits during trust [to] be imposed on the plan assets. . .
the relevant time period, or whether those .” S. Rep. No. 93-383, reprinted in 1974
plans have retained funds from that period U.S.C.C.A.N. 4890, 4989; see Harsch v.
(as opposed to having, at least Eisenberg, 956 F.2d 651, 656 (7th Cir.
hypothetically speaking, transferred their 1992) (quoting the above language);
funds to a third party), we express no Novak v. Andersen Corp., 962 F.2d 757,
opinion as to the entit(ies) that would 760 (8th Cir. 1992) (same); Sokol v.
properly be the subject of a judgment Bernstein, 803 F.2d 532, 538 (9th Cir.
entered pursuant to § 502(a)(3)(B). 1986) (same).
28
benefits were wrongfully withheld or
wrongfully delayed, that is, . . . withheld or
delayed in violation of ERISA or an
in an award for the delayed payment of
ERISA plan.” 319 F.3d at 617.29 If
benefits under ERISA § 502(a)(3)(B) since
benefits were wrongfully withheld,
our prior holding in Holmes v. Pension
“interest is presumptively appropriate . . .
Plan of Bethlehem Steel Corp., 213 F.3d
unless exceptional or unusual
124, 131-34 (3d Cir. 2000). In Holmes,
circumstances exist making the award of
we held that a District Court did not abuse
interest inequitable [, such as] bad faith or
its discretion in awarding interest on the
dilatoriness by the claimant.” Id. at 618
delayed payment of pension benefits under
(internal quotation marks and citations
the Treasury Bill yield rate as calculated in
omitted). 30
28 U.S.C. § 1961 because, according to the
District Court in that case, requiring the
29
Our determination in Fotta II that a ERISA plan to disgorge its profits “would
district court must consider whether be essentially punitive in nature, and . . .
benefits were wrongfully withheld or punitive measures were inappropriate
wrongfully delayed was based on the fact where the delayed payment of benefits was
that § 502(a)(3)(B) “does not . . . authorize inadvertent rather than intentional.” Id. at
appropriate equitable relief at large, but 132 (internal quotation marks and citations
only ‘appropriate equitable relief’ for the omitted).
purpose of ‘redress[ing any] violations or To the extent that Skretvedt seeks
enforc[ing] any provisions of ERISA or an on remand a constructive trust to disgorge
ERISA plan.” Fotta II, 319 F.3d at 616 the gain of his ERISA plans, it would
(quoting Fotta I, 165 F.3d at 213 (citing seem, in light of Great-West, that the
Mertens, 508 U.S. at 253)) (internal actual gain (if any) made on withheld
quotation marks omitted; emphasis in benefits would be an appropriate subject of
original). a constructive trust. See Dobbs § 4.3(2), at
Of course, to the extent that 592 (“The constructive trust has [an]
Skretvedt seeks prejudgment interest on especially important characteristic[:] . . .
his incapability benefits, which were under the rules for following property or
awarded by court judgment pursuant to money into its product, the plaintiff may
§ 502(a)(1)(B), wrongful withholding or obtain . . . gains received by the defendant
wrongful delay is not per se relevant, as from the property’s increase in value. . .
prejudgment interest in that context .”).
derives from § 502(a)(1)(B) and the However, the Eighth Circuit in
District Court’s exercise of discretion in Parke, applying the accounting for profits
awarding interest. See supra Section V-A. remedy, has noted that
[a] defendant . . .
30
Great-West may have changed the “gains” from the wrongful
nature of how “interest” is to be calculated
29
C. Postjudgment Interest
w i t h h o l d in g of the
28 U.S.C. § 1961 provides that
plaintiff’s benefits even if
“[i]nterest shall be allowed on any money
the plaintiff does not prove
judgment in a civil case recovered in a
specific financial profit. In
district court.” Id. Skretvedt seeks
particular, the defendant
postjudgment interest, presumably on any
receives a benefit from
award of interest and prejudgment interest
having control over the
he receives on remand from this opinion
money. See [Dobbs]
and to the extent DuPont delayed in paying
§ 3.6(2), at 344 n.22
incapability benefits after the Magistrate
(“[U]ntil the plaintiff is
Judge’s December 13, 2001, judgment.31
paid, the defendant has the
use of funds that ought to go With respect to Skretvedt’s
to the discharge of his
obligation of the plaintiff.
That is a benefit. The the use of money . . . to which the plaintiff
defendant may [choose] not was entitled” but “did not actually reap
[to] use the funds or collect interest or profits.” Dobbs § 3.6(2), at
interest on them. 344. This treatise indicates that the
Nevertheless, he has a “clearest case for [such interest] liability
benefit found in his power for unrealized gains occu rs with
to do so.”). fiduciaries who are under a duty to invest
Parke, ___ F.3d at ___, 2004 WL funds for the benefit of the plaintiff but
1144787, at *7 (third alteration in fail[] to do so.” Id. at 345.
original). Thus, while Parke suggested We need not, and cannot, address
that it may be possible to disgorge a today whether interest or actual gain is to
defendant’s actual gain if “specific be awarded to Skretvedt under §
financial profit” can be shown, the Court 502(a)(3)(B), however, as the Magistrate
concluded that “[i]n the particular context Judge could determine that Skretvedt is
of withheld benefits under ERISA, . . . not entitled to such an award under Fotta
[i]nterest is, in many respects, the only II and a record has not been developed as
way to account for this gain and therefore to the actual gain, if any, made by the
is an appropriate measure of the extent to relevant ERISA plans.
which [a defendant] was unjustly
31
enriched.” Id. In reaching that As noted supra, no judgment exists
conclusion, Parke relied on a section of with r e s p ec t to T & P bene fits .
Dobbs suggesting that interest, as opposed Accordingly, there is no basis for an award
to a defendant’s actual gain, is available as of postjudgment interest under § 1961 with
restitution where the defendant “has had respect to these benefits.
30
underlying incapability benefits award, determined that postjudgment interest
there was a delay between the Magistrate under § 1961 “properly runs from the date
Judge’s December 13, 2001, judgment of the entry of judgment.” Kaiser
awarding incapability benefits and DuPont Aluminum & Chem. Corp. v. Bonjorno,
having paid those benefits on March 6, 494 U.S. 827, 835 (1990). The fact that
2002, with further adjustments made on the December 13, 2001, judgment was not
April 15 and 16, 2002. Several circuit a final order for purposes of appeal would
courts have held that an award of not otherwise prevent postjudgment
postjudgment interest on benefits awarded interest from running under § 1961
pursuant to ERISA § 502(a)(1)(B) is pursuant to a timely request from
mandatory under 28 U.S.C. § 1961 if Skretvedt. We stated in In re Lower Lake
requested.32 The Supreme Court has Erie Iron Ore Antitrust Litigation, 998
F.2d 1144, 1177-78 (3d Cir. 1993), that
§ 1961 “does not, by its terms, mandate
32 that the judgment from which interest is
See, e.g., Cottrill v. Sparrow,
calculated must be a final judgment. Our
Johnson & Ursillo, Inc., 100 F.3d 220, 224
view is consistent with the statute’s
(1st Cir. 1996) (“ERISA provides for
philosophy of providing compensation
postjudgment interest to be calculated at
from a point at which the loss-causing
the federal rate, 28 U.S.C. § 1961(a)
defendant’s liability is entered on record.”
(1994)”); Quesinberry v. Life Ins. Co. of
North Am., 987 F.2d 1017, 1031 (4th Cir.
1993) (en banc) (“In contrast to the district
court’s discretion in the awarding of
pre-judgment interest, federa l law
mandates the awarding of post-judgment postjudgment interest statute allows
interest. 28 U.S.C. § 1961 (1988). While interest on “all money judgments,”
ERISA does not specifically address including those in ERISA cases.”)
post-judgment interest, it does provide that (internal citations and quotation marks
the statute is not to be construed to ‘alter, omitted); Mansker v. TMG Life Ins. Co.,
amend, modify, invalidate, impair, or 54 F.3d 1322, 1331 (8th Cir. 1995) (“28
supersede any law of the United States.’ U.S.C. § 1961 provides the proper measure
29 U.S.C. § 1144(d) (1988). Therefore, for determining rates of both prejudgment
the federal post-judgment interest statute, and postjudgment interest” in ERISA
28 U.S.C. § 1961 (1988), is applicable in cases); Carriers Container Council, Inc. v.
ERISA cases.”); Caffey v. UNUM Life Ins. Mobile S.S. Ass’n, Inc. et al., 948 F.2d
Co., 302 F.3d 576, 586 (6th Cir. 2002) 1219, 1226 (11th Cir. 1991) (upholding
(“The statute mandates the imposition of application of § 1961 to an ERISA award);
post-judgment interest, thus removing the I.A.M. Nat. Pension Fund, Plan A, A
award of such interest from the discretion Benefits v. Slyman Indus., Inc., 901 F.2d
of the District Court. The federal 127, 130 (D.C. Cir. 1990) (same).
31
Id.33 to pursue postjudgment interest with
respect to DuPont’s four month delay in
However, while postjudgment
paying incapability benefits.
interest can begin to accrue on a non-final
judgment under Iron Ore, the phrase “any With respect to postjudgment
money judgment” in § 1961(a) “requires interest on the Magistrate Judge’s award of
that the judgment at issue award a fixed any prejudgment interest for incapability
amount of fees to the prevailing party in benefits, postjudgment interest should be
order to trigger the post-judgment interest calculated based upon the underlying
period.” Eaves v. County of Cape May, judgment and award of prejudgment
239 F.3d 527, 534 (3d Cir. 2001). As we interest. See Sun Ship, Inc. v. Matson
have noted, however, the judgment entered Navigation Co., 785 F.2d 59, 63 (3d Cir.
with respect to incapability benefits on 1986); see generally Caffey v. UNUM Life
December 13, 2001, did not quantify a Ins. Co., 302 F.3d 576, 586 (6th Cir. 2002)
mon etary amou nt. Ac cord ingly, (“postjudgment interest should be awarded
postjudgment interest under § 1961 did not on the entire amount of the judgment,
begin to accrue on that date because no including any prejudgment interest”)
“money judgment” had been entered. (noting agreement among the Fourth,
Absent the existence of a “money Ninth, Tenth, and Eleventh Circuit
judgment,” Skretvedt is, therefore, unable Courts). Accordingly, Skretvedt could
receive postjudgment interest on any
award of prejudgment interest under
33
A circuit split has developed on this ERISA § 502(a)(1)(B) with respect to
issue, however. The Ninth Circuit, incapability benefits, should the Magistrate
looking to “practical considerations,” has Judge award prejudgment interest in
determined that postjudgment interest exercising her discretion, as discussed
under § 1961 begins to run only where a above in Section V-A.
final, appealable judgment has been
There is some question, however, as
entered. See Dishman v. UNUM Life Ins.
to whether § 1961 applies to a judgment
Co. of Am., 269 F.3d 974, 990-91 (9th Cir.
obtained pursuant to an equitable
2001) (“‘judgment’ within the meaning of
remedy,34 which would affect the
28 U.S.C. § 1961 means ‘final, appealable
order’”). The Sixth Circuit, implicitly
agreeing with Iron Ore, has determined
34
that “the better rule is for plaintiffs to be We expressed this concern in Brock
entitled to post-judgment interest from the v. Richardson, 812 F.2d 121 (3d Cir.
date of entry of the initial, partial judgment 1987):
. . . , even though that judgment was not In Perkins v. Fourniquet, 55
yet appealable.” Skalka v. Fernald Envtl. U.S. (14 How.) 328, 330, 14
Restoration Mgmt. Corp., 178 F.3d 414, L.Ed. 441 (1853), the
429 (6th Cir. 1999).
32
availability of post-judgment interest on an delayed payment of T&P benefits; and (3)
award of interest for the delayed payment postjudgment interest on both of those
o f T & P benefits under E R I S A awards. We remand for the M agistrate
§ 502(a)(3)(B). We need not address this Judge to reconsider in the first instance
issue today, as the Magistrate Judge might whether Skretvedt is entitled in light of
determine that Skretvedt is not entitled to this opinion to prejudgment interest on the
a constructive trust for interest under Fotta award of incapability benefits and/or
II because there was not a wrongful interest on the delayed payment of T&P
withholding of or delay in paying T&P benefits, without prejudice to Skretvedt’s
benefits. ability to file a timely motion for
postjudgment interest on any resulting
Conclusion
award of prejudgment interest (with
We reverse the Magistrate Judge’s respect to incapability benefits) or interest
August 21, 2002, and November 12, 2002, (with respect to T&P benefits). The
orders only with respect to their denial of: appeal is dismissed otherwise to the extent
(1) prejudgment interest on the award of it seeks to address claims raised in the
incapability benefits; (2) interest on the complaint other than Counts I and V for
incap ability and T &P bene fits,
respectively.
Supreme Court held that the
pre decessor statute to
section 1961[] did not apply
to equitable decrees, relying
on the use of the word
“judg m e n t”, as
distinguished from “decree”,
the equitable counterpart.
Chief Justice Taney
explained that, “[the statute]
is confined, in plain terms,
to judgments at law.” Id.
Id. at 125-26 (noting a “hesitancy” to
interpre t § 19 61 as man dati ng
postjudgment interest on back-pay awards
under the Fair Labor Standards Act when
those awards are procured under a section
of that Act arguably providing for relief
that is equitable in nature, but nonetheless
allowing for postjudgment interest on
other grounds) (footnote omitted).
33