Opinion
Case No. 3:02CV7548
November 4, 2003
ORDER
This is a suit by trustees an ERISA plan against the plan's former investment advisor, Provident Investment Counsel. The trustees contends that Provident breached duties owed to the plan, and, as a result, the plan's assets lost substantial value during the recent decline in the stock market.
Provident filed a third-party suit against Midwest Continental Company and one of its employees, Jeffrey Barefoot, for contribution. In addition, Provident asserted a counterclaim for contribution against the plan's trustees and asserted, as well, affirmative defenses.
Summary judgment was granted in favor of the trustees and Midwest and Barefoot and against Provident on Provident's claims for contribution. In addition, Provident's affirmative defenses were dismissed
Pending is Provident's motion for certification of those rulings, which are final as to those parties, for interlocutory appeal pursuant to Fed.R.Civ.P. 54(b) and 28 U.S.C. § 1292(b). For the reasons that follow, that motion shall be granted.
To grant Provident's motion for certification, I must determine whether there is any just reason to delay final judgment, which is a matter left to my sound discretion. Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 8 (1980). Among the factors to consider are:
1. The relationship between the adjudicated and unadjudicated claims;
2. The possibility that the need for review might or might not be mooted by future developments in this court;
3. The possibility that the reviewing court might be obliged to consider the same issue a second time; and
4. Miscellaneous factors such as judicial economy, final resolution of the litigation, time, and expense.See generally Gen. Acquisition, Inc. v. Gencorp, Inc., 23 F.3d 1022, 1030 (6th Cir. 1994); Corrosioneering, Inc. v. Thyssen Envtl. Sys., Inc., 807 F.2d 1279, 1283 (6th Cir. 1986).
The contribution claims asserted by Provident are distinct from the claims asserted by the trustees against Provident. In essence, Provident seeks, if it is found liable on the trustees' claims, to have them and Midwest and Barefoot likewise held accountable for their alleged breaches of their fiduciary duties to the plan and its beneficiaries. My order rejecting Provident's third-party complaint and affirmative defenses is bottomed on the proposition that ERISA does not allow for contribution among co-fiduciaries. Other circuits are split on this issue. The Sixth Circuit has not addressed it.
These issues are distinct from the issues that remain in this case: namely, whether Provident, as the trustees allege, breached its obligations to the plan, and, if so, the extent to which, if any, the plan thereby incurred losses.
Further developments in the case as now structured (i.e., as a claim solely by the trustees against Provident on the issue of Provident's breach of duty and resultant damages) will not moot the issues which Provident seeks to raise in its interlocutory appeal. There is, as well, no likelihood that, if the Sixth Circuit resolved the issue of whether co-fiduciaries can be sued for contribution under ERISA, that that issue would resurface in a later appeal.
The principal reason not to grant Provident's motion for certification is that, if there is an interlocutory appeal, final resolution of this case will not be reached for at least three years — computing about two years for resolution of the interlocutory appeal and another year for further proceedings in this court.
That contention overlooks the fact that the finality of any resolution that might be reached were certification not granted would be in substantial doubt until the merits of Provident's contentions were finally resolved. Though both parties confidently predict that co-fiduciary contribution issue will, when once resolved, be resolved in their favor, no such prediction, in my view, is sound. As noted, the other circuits have split, and the Sixth Circuit has been silent on the issue.
Were my decision to be reversed, this case would go back to square one — or close to it. Contrary to the trustees' contentions, any decision on Provident's liability and resultant damages that might have been reached (were certification not granted) would be non-binding and largely, if not entirely meaningless. Much discovery would have either to be undertaken or redone, given the absence in the interim of Midwest and Barefoot. Were Provident allowed to proceed on its affirmative defenses, not even a finding as to its liability would have any effect.
Finally, though not noted by the parties, the issue of co-fiduciary contribution goes beyond their immediate interests. Earlier, rather than later resolution of the issues can more quickly provide guidance for the planning, negotiations, and other aspects of the relationships between other co-fiduciaries.
For the same reasons, I conclude that certification under § 1292(b) of the issues raised by the dismissal of Provident's affirmative defenses is proper. There are substantial grounds, as required by that provision, for difference of opinion as to my ruling. An immediate appeal will "materially advance the ultimate termination of this litigation." Id. To certify only the co-fiduciary contribution issue, but not the issues raised by dismissal of Provident's affirmative defenses, would leave the job half done. Most importantly, to do so would leave the issue of Provident's liability in doubt to the extent that its affirmative defenses would, if allowed and found meritorious, defeat the trustees' claims.
I conclude, accordingly, that Provident's Motion for Entry of Final Judgment and Certification for Immediate Interlocutory Appeal (Doc. 61) should be granted.
It is, therefore,
ORDERED THAT:
1. Provident Investment Counsel, Inc.'s Motion for Entry of Final Judgment and Certification for Immediate Interlocutory Appeal (Doc. 61) be, and the same hereby is granted;
2. There is no just reason for delay of the entry of final judgment on this Court's Order of August 15, 2003 (Doc. 60), granting plaintiff's' motion to dismiss Provident's counterclaim and third-party defendants' motion to dismiss Provident's third-party complaint, and denying Provident's motion to amend its answer, counterclaim and third-party complaint;
3. The Clerk shall enter separate final judgment in this action based on the Order of August 15, 2003; and
4. Within ten days from the date of entry of this order, Provident may apply, pursuant to Rule 5 of the Federal Rules of Appellate Procedure, to the United States Court of Appeals for the Sixth Circuit for permission to appeal the Court's Order of August 15, 2003, granting, in part, Plaintiff's motion to strike Provident's affirmative defenses.
So ordered.