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Click here for the full text of this decision FACTS:Michael Milofsky and Robert Walsh were pilots for Business Express (BEX) when the company was acquired by AMR Eagle Holding Corp., the parent company of American Eagle Inc. While employed with BEX, both pilots participated in BEX’s benefits plan. They were notified that their benefits would be transferred to a comparable American Eagle 401(k) plan called the “$uper $aver Plan.” Towers Perrin, a benefits consulting firm, sent the pilots notices of the transfer, which included information on certain blackout periods when access to their accounts would be unavailable. The transfer of the plan apparently took longer than was anticipated. Milofsky and Walsh sued American Airlines and Towers Perrin under ERISA 502, alleging the defendants violated their fiduciary duties in misrepresenting how and when their BEX accounts would be transferred to the $uper $aver Plan. The alleged that, because of the delayed transfer, their accounts languished in the BEX plan. They asked that actual damages be paid to the $uper $aver Plan, to be allocated among their individual accounts proportionately to their losses flowing from the alleged breach. The district court granted the defendants’ motion to dismiss, finding Milofsky and Walsh lacked standing under 502(a)(2), because they did not exhaust their administrative remedies. The district court also found that the pilots had not adequately established that Towers Perrin was a fiduciary under ERISA. HOLDING:Affirmed. The court upholds the district court’s finding on Towers Perrin. The transmission of notices and forms advising plan participants of their rights and options under a plan is nothing more than an administrative or ministerial service, which is insufficient to elevate Towers Perrin to the status of fiduciary under ERISA for this lawsuit. Then, examining the standing issue, the court rejects the pilots’ argument that their claim is one that, if they won, would benefit the plan as a whole. The court says that the suit concerns only individualized relief for particularized harm and does not seek to vindicate the rights or interests of the plan as a whole. Because the pilots’ claim does not otherwise seek to vindicate rights of the entire plan, the claim does not benefit the entire plan. The court says that the distinction between relief from the plan and relief for individuals is paramount in order to satisfy the U.S. Supreme Court’s holding in Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134 (1985) The court also notes that the fact that the total assets of the plan would increase as a result of a successful suit does not mean that recovery inures to the benefit of the entire plan. “We cannot adopt an interpretation that would allow a plaintiff, merely by praying that relief pass through the plan into individual accounts, to eviscerate the standing requirement imposed by 502(a)(2) by engaging in a legal fiction that the suit benefits the plan as whole.” The court rejects the pilots’ assertion that denying them standing in this instance will close off all claims by beneficiaries of individual account plans against fiduciaries for violations of the duties. Standing still exists, for instance, under ERISA 502(a)(3), where participants may directly seek equitable relief for any practice that violates terms of ERISA or a particular plan. OPINION:Smith, J.; King, C.J., Smith and Garza, JJ. CONCURRENCE AND DISSENT:King, Chief Judge. “The majority’s holding means that those participants in individual account plans who are unfortunate enough to be forced to litigate in the Fifth Circuit will be unable to recover monetary losses to the plans caused by fiduciary breaches when fewer than all plan participants would benefit from the litigation, thereby limiting recovery to the equitable relief available under 502(a)(3) of ERISA. To deprive plan participants in such circumstances of a 409 remedy for breach of fiduciary duty effectively nullifies Congress’s intent to provide a high level of protection to any and all plan participants from fiduciary abuse. The majority’s holding finds no support in the two cases it cites, and it squarely conflicts with the one other circuit court to have directly addressed this issue.”

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