Al Nieto, Clarence Valdez, Adrian Munenmann, Lester Olivera and Joana L. Gonzales v. Louis Ecker, and Roger Frommer

Defendant Roger Frommer is an attorney who rendered professional services to a group of employee retirement plans covered by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1381 (1982) (ERISA or Act). Plaintiffs claim that he performed these services improperly or fraudulently. We consider whether Frommer may be sued under ERISA for these alleged misdeeds.

Facts

Plaintiffs are members of Operative Plasterers’ and Cement Masons’ Locals No. 341 and 627, labor unions affiliated with the Cement Masons’ Negotiating Committee for Southern California (the Committee). The Committee, representing each of its constituent local unions, entered into agreements with various associations of employers in Southern California establishing health and welfare, pension, apprenticeship and vacation savings trust funds (the Funds) to be financed by mandatory employer contributions. The Funds are mul-tiemployer plans subject to ERISA, and plaintiffs are, by virtue of their membership in Locals 341 and 627, participants in the Funds.

On August 11, 1986, plaintiffs brought suit in federal district court against numerous defendants, including the Funds, their trustees and Frommer,…

concurring.

Judge Kozinski correctly finds that Frommer should be potentially liable for various violations of ERISA. He finds that Frommer is a “party in interest” under ERISA section 3(14)(B), 29 U.S.C. § 1002 (14)(B). ERISA plans may not engage in certain kinds of transactions with parties in interest. 29 U.S.C. § 1106 . Preliminarily, I note that the plaintiffs never pled a “party in interest” cause of action. Also, neither party pursued this theory on appeal. I would reject it simply on these grounds.

Of greater significance, however, is Judge Kozinski’s rejection of Frommer’s liability under section 409(a) of ERISA. 29 U.S.C. § 1109 (a). Every other case that has examined the issue has concluded that liability of non-fiduciaries as well as fiduciaries is reached by section 409. Brock v. Hendershott, 840 F.2d 339, 342 (6th Cir.1988); Lowen v. Tower Asset Management, Inc., 829 F.2d 1209, 1220-21 (2d Cir.1987); Fink v. National Sav. & Trust Co., 772 F.2d 951, 958 (D.C.Cir.1985); Thornton v. Evans, 692 F.2d 1064, 1078 (7th Cir.1982); Brock v. Gerace, 635 F.Supp. 563, 568 (D.N.J.1986); Donovan v. Schmoutey, 592 F.Supp. 1361, 1398-99 (D.Nev.1984); Donovan v. Bryans, 566 F.Supp.…

845 F.2d 868 56 USLW 2641 , 9 Employee Benefits Ca 2153 Al NIETO, Clarence Valdez, Adrian Munenmann, Lester Olivera and Joana L. Gonzales, Plaintiffs-Appellants, v. Louis ECKER, et al., Defendants, and Roger Frommer, Defendant-Appellee. No. 87-5598. United States Court of Appeals, Ninth Circuit. Argued and Submitted Nov. 5, 1987. Decided May 2, 1988. Paul M. Posner, Marina del Rey, Cal., for plaintiffs-appellants. Julius Reich, Reich, Adell & Crost, P.C., Los Angeles, Cal., for defendant-appellee. William W. Taylor, U.S. Dept. of Labor, for amicus. Appeal from the United States District Court for the Central District of California. Before TANG, WIGGINS and KOZINSKI, Circuit Judges. KOZINSKI, Circuit Judge: 1 Defendant Roger Frommer is an attorney who rendered professional services to a group of employee retirement plans covered by the Employee Retirement Income Security Act of 1974, 29 U.S.C. Secs. 1001-1381 (1982) (ERISA or Act). Plaintiffs claim that he performed these services improperly or fraudulently. We consider whether Frommer may be sued under ERISA for these alleged misdeeds. Facts 2 Plaintiffs are members of Operative Plasterers' and Cement Masons' Locals No. 341…