Browe v. CTC Corp., No. 19-677 (2d Cir. 2021)
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Plaintiffs filed suit under the Employee Retirement Income Security Act (ERISA) against a defunct photo‐finishing company and its former CEO, alleging various violations and breaches of fiduciary duties with respect to a deferred compensation plan.
The Second Circuit held that the district court correctly denied defendants' invocation of ERISA's three-year statute of limitations for fiduciary claims because defendants failed to prove that all plaintiffs had knowledge of the breaches more than three years prior to the commencement of this suit; defendants waived any reliance on ERISA's six‐year statute of repose by failing to assert it any time prior to their reply brief before the court; the Plan is not exempt from ERISA's funding, fiduciary, and vesting requirements because it was not offered to a qualitatively select group of employees; the district court's decision to limit damages on plaintiffs' fiduciary claims to the Plan's projected balance as of 2004 was error, and damages must be recalculated; the district court erred in failing to assess the scope of CTC's liability, if any, for the claims asserted against it; the CEO is liable for the entire amount of the restoration award, because liability under ERISA is joint and several; although the district court's conclusion that Plaintiff Launderville is liable in contribution is supported by sufficient evidence, that liability is to the CEO, not to the Plan; there is no basis to impose liability on Launderville for her failure to comply with ERISA's reporting requirements; the district court's entry of judgment for defendants on plaintiffs' wrongful denial of benefits claims was error; the district court's order that the restoration award be distributed on a per capita basis to Plan participants risks violating those participants' vested rights and is, in any case, inconsistent with ERISA; and defendants' evidentiary challenge is meritless. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings.
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