Ortiz v. American Airlines, Inc., No. 20-10817 (5th Cir. 2021)Annotate this Case
Plaintiffs filed suit, on behalf of themselves and others similarly situated, alleging that defendants breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA). Plaintiffs asserted that AA and the PAAC breached their fiduciary duties of loyalty and prudence under 29 U.S.C. 1104(a)(1)(A)–(B) by failing to remove the FCU Option from the Plan (Count I); contended that FCU breached its fiduciary duty of loyalty under 29 U.S.C. 1106(b)(1) by dealing with plan assets held by the FCU Option for its own benefit (Count II); and averred that AA and the PAAC engaged in a "prohibited transaction" under 29 U.S.C. 106(a)(1) by offering the FCU Option. The district court ultimately granted summary judgment to defendants and denied approval of the settlement.
The Fifth Circuit concluded that the district court correctly determined that plaintiffs lacked standing as to Count I. The court also concluded that the district court erred in concluding that plaintiffs had standing with respect to their claim against FCU. The court explained that it is a settled rule that, in reviewing the decision of a lower court, it must be affirmed if the result is correct although the lower court relied upon a wrong ground or gave a wrong reason. Given the court lacked jurisdiction over these claims, the court did not reach the parties' arguments as to the merits. Finally, the court concluded that plaintiffs failed to demonstrate that the district court abused its discretion in denying approval of the settlement. Accordingly, the court affirmed in part, reversed part, and vacated in part. The court remanded with instructions to dismiss plaintiffs' claim against FCU.