A South Carolina federal district court denied plaintiffs’ demand for a jury trial in an ERISA fiduciary-breach action.  The court held that, because federal courts in the Fourth Circuit and elsewhere have consistently held that ERISA claims are equitable in nature even when plaintiffs seek monetary relief, jury trials are unavailable.  The case is Williams et al. v. Centerra Grp., LLC et al., 1:20-cv-04220, 2022 WL 88586 (D.S.C. Jan. 7, 2022).

Plaintiffs were participants in Centerra’s 401(k) plan who alleged that the defendants breached their fiduciary duties in connection with the monitoring of various investment options that had excessive fees and underperformed.  The complaint included a demand for a jury trial under Fed. R. Civ. P. 39 and the U.S. Constitution, or, alternatively, for an advisory jury under Fed. R. Civ. P. 39(c)(1).

After denying the defendants’ motion to dismiss last fall, the court recently granted defendants’ motion to strike plaintiffs’ jury demand.  First, the court concluded that ERISA does not provide a statutory right to a jury trial because plaintiffs’ claims were equitable in nature; they were most akin to those actions traditionally adjudicated in a court of equity based on ERISA’s derivation from the equitable law of trusts.

Second, the court observed that the Seventh Amendment only provides a right to a jury trial for suits at common law, i.e., cases implicating legal, rather than equitable, rights.  To determine whether a claim is legal or equitable under the Seventh Amendment, courts examine (1) the nature of the issues involved and (2) the remedy sought.  Here, the court held that both prongs weighed in favor of striking plaintiffs’ jury demand.  In particular, plaintiffs sought an injunction and surcharge, both equitable remedies under ERISA § 502(a)(3).  While plaintiffs sought compensatory damages, a traditionally legal remedy, for their fiduciary-breach claims under ERISA § 502(a)(2), the court reasoned that monetary relief is considered equitable when sought from ERISA fiduciaries.

Finally, the court denied plaintiffs’ request to empanel an advisory jury to hear the case and issue an advisory ruling.  The court reasoned that while Fed. R. Civ. P. 39(c)(1) permits the court to try any issue by advisory jury in cases not triable by jury as of right, doing so in this case would prolong the proceedings and increase trial costs, provide little or no value to the court, and risk unfairness to defendants.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Sydney Juliano Sydney Juliano

Sydney L. Juliano is an associate in the Labor & Employment Department and a member of the Employee Benefits & Executive Compensation Group, where she focuses on ERISA Litigation.

Sydney works on a variety of ERISA litigation matters, including fee- and investment-related breach…

Sydney L. Juliano is an associate in the Labor & Employment Department and a member of the Employee Benefits & Executive Compensation Group, where she focuses on ERISA Litigation.

Sydney works on a variety of ERISA litigation matters, including fee- and investment-related breach of fiduciary duty claims, benefit claims, and claims by trustees of multiemployer plans for withdrawal liability and delinquent contributions. Sydney is also a frequent contributor to Proskauer’s Employee Benefits & Executive Compensation Blog.

Sydney maintains an active pro bono practice, including representing clients in immigration and family court matters.

Sydney received her J.D. from the University of Virginia School of Law, where she was an Articles Editor of the Journal of Law and Politics and Director of Coaching for the Extramural Moot Court team.  While at UVA, she worked at the U.S. Attorney’s office for the Southern District of Florida.

Photo of Russell Hirschhorn Russell Hirschhorn

Russell L. Hirschhorn, co-head of the ERISA Litigation Group, represents plan fiduciaries, trustees, sponsors and service providers on the full range of ERISA and state law benefit and fiduciary issues. From single plaintiff litigation and arbitration to complex class action litigation, he provides…

Russell L. Hirschhorn, co-head of the ERISA Litigation Group, represents plan fiduciaries, trustees, sponsors and service providers on the full range of ERISA and state law benefit and fiduciary issues. From single plaintiff litigation and arbitration to complex class action litigation, he provides practical guidance, develops unique litigation defense strategies and, when appropriate, mediates successful resolutions.

Russell represents clients across a wide array of publicly-held, multi-national companies and privately owned companies across a multitude of industries including, banking, finance and investments, pharmaceuticals, retail products and construction, to name just a few. In addition, he also counsels benefit plan clients on a host of compliance and federal and state government agency enforcement matters, including complex and lengthy investigations and audits by the U.S. Departments of Justice and Labor.

Russell is management co-chair of the American Bar Association Employee Benefits Committee as well as management co-chair of the Trial Institutes Committee of the American Bar Association’s Labor and Employment Law. He also writes on cutting-edge ERISA litigation issues, serving as a contributing author and a past chapter editor to Employee Benefits Law (BNA Third Edition).

Deeply dedicated to pro bono work, Russell was a principal drafter of several amicus briefs for the Innocence Project, a legal non-profit committed to exonerating wrongly convicted people. Russell has been recognized on several occasions for his commitment to pro bono work including by President George W. Bush in receiving the U.S. President’s Volunteer Service Award.