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Minnesota Power and Affiliated Companies Retirement Plan A v. Guardian Trust Company: US District Court:APPELLATE PROCEDURE - certificate of appealability denied on ERISA jury trial Qr

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Minnesota Power and Affiliated Companies
Retirement Plan A; Minnesota Power and
Affiliated Companies Retirement Plan B;
Minnesota Power and Affiliated Companies
Master Pension Trust; ALLETE Employee
Benefit Plans Committee; ALLETE
Retirement Plans Investment Subcommittee;
ALLETE, Inc., successor in interest to
Minnesota Power and affiliated companies;
and U.S. Bank National Association,
MEMORANDUM OPINION
Plaintiffs, AND ORDER
Civil No. 07-3866 ADM/RLE
v.
Capital Guardian Trust Company,
Defendant.
______________________________________________________________________________
Lauren E. Lonergan, Esq., Briggs & Morgan, P.A., Minneapolis, MN, on behalf of Plaintiffs.
Diane M. Soubly, Esq., Seyfarth Shaw, LLP, Boston, MA, and Tracey L. Baubie, Esq., Kelly &
Berens, P.A., Minneapolis, MN, on behalf of Defendant.
______________________________________________________________________________
I. INTRODUCTION
On September 10, 2008, the undersigned United States District Judge heard oral
argument on Defendant Capital Guardian Trust Companys (Capital Guardian) Motion for
Certificate of Appealability [Docket No. 52]. Capital Guardian seeks an immediate appeal from
the Courts July 22, 2008, Order [Docket No. 49] denying Capital Guardians Motion to Strike.
For the reasons stated herein, Capital Guardians Motion is denied.
II. BACKGROUND
The underlying facts of this case are set forth in the Courts July 22, 2007, Order and are
incorporated by reference. On July 22, 2007, the Court denied Capital Guardians Motion to
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Strike the jury demand in the Amended Complaint [Docket No. 20] filed by Plaintiffs Minnesota
Power and Affiliated Companies Retirement Plan A; Minnesota Power and Affiliated Companies
Retirement Plan B; Minnesota Power and Affiliated Companies Master Pension Trust; ALLETE
Employee Benefit Plans Committee; ALLETE Retirement Plans Investment Subcommittee;
ALLETE, Inc., successor in interest to Minnesota Power and affiliated companies; and U.S.
Bank National Association (collectively Plaintiffs). In the same Order, the Court denied
Capital Guardians Motion to Dismiss finding Plaintiffs had set forth sufficient facts to state a
claim that Capital Guardian had acted as an ERISA fiduciary during the liquidation process. The
Court also found that Plaintiffs state law claims were preempted by ERISA but declined to
determine whether or how to construe Plaintiffs claims as ERISA claims because the parties had
failed to specifically address the issue. At this pre-discovery stage of the case, Plaintiffs claims
against a co-fiduciary for damages caused by breach of fiduciary duty assert a legal claim for
damages and entitle Plaintiffs to maintain a jury trial demand in their Amended Complaint.
III. DISCUSSION
Capital Guardian seeks to appeal the Courts ruling regarding Plaintiffs demand for a
jury trial. Capital Guardian asserts two grounds for its Motion: (1) that the Court should certify
the jury trial question for immediate appeal pursuant to the collateral order exception to 28
U.S.C. 1291, and (2) that the Court should certify the jury trial question for interlocutory
appeal pursuant to 28 U.S.C. 1292(b).
A. Collateral Order Exception to 28 U.S.C. 1291
To quality for immediate appeal under the collateral order doctrine, an order must
conclusively decide a question that is important and distinct from the cases merits, and the
3
decision must be effectively unreviewable on appeal from a final judgment. Kassuelke v.
Alliant Techsystems, Inc., 223 F.3d 929, 931 (8th Cir. 2000). Appellate courts use the collateral
order doctrine to assert jurisdiction over those district court decisions that are conclusive, that
resolve important questions completely separate from the merits, and that would render such
important questions effectively unreviewable on appeal from final judgment in the underlying
action. Digital Equipment Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867 (1994).
Accordingly, whether to allow an immediate appeal of a question under the collateral order
doctrine is left to the discretion of the appellate court, and not the district court. As such, the
Court will not rule on whether the question of jury trial entitlement is immediately appealable
under the collateral order doctrine.
B. 28 U.S.C. 1292(b)
Section 1292(b) establishes three criteria for certification: the district court must be of
the opinion that (1) the order involves a controlling question of law; (2) there is substantial
ground for difference of opinion; and (3) certification will materially advance the ultimate
termination of the litigation. White v. Nix, 43 F.3d 374, 377 (8th Cir. 1994). A controlling
question of law is a legal question and not a matter for the discretion of the trial court. Id.
Substantial grounds for difference of opinion exist if there are a sufficient number of conflicting
and contradictory opinions. Id. at 378. When litigation will be conducted in substantially the
same manner regardless of [the Eighth Circuits] decision, the appeal cannot be said to
materially advance the ultimate termination of the litigation. Id. at 378-79. A motion for
certification must be granted sparingly, and the movant bears the heavy burden of demonstrating
that the case is an exceptional one in which immediate appeal is warranted. Id. at 376. The
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parties do not dispute that the Courts Order involves a controlling question of law.
Accordingly, review is limited to the second and third factors.
1. Substantial Ground for Difference of Opinion
Capital Guardian asserts that the Courts Order creates a conflict within the Eighth
Circuit and with Eighth Circuit decisions, and that very conflict demonstrates the requisite
difference of opinion for certification under 28 U.S.C. 1292(b). Defs. Mem. in Supp. of Mot.
for Certificate of Appealability [Docket No. 54] at 13. Plaintiffs respond that [a]lthough the
Eighth Circuit has yet to address this jury issue with these specific ERISA provisions, substantial
ground for difference of opinion does not exist merely because there is a dearth of cases. Pls.
Mem. in Oppn to Mot. for Certificate of Appealability [Docket No. 62] (internal quotation
omitted).
There is no Eighth Circuit opinion squarely addressing the issue presented in this case.
Defendants are correct that there is no right to a jury trial in typical ERISA litigation between a
plan and a plan beneficiary, Houghton v. SIPCO, Inc., 38 F.3d 953 (8th Cir. 1994); however, the
Eighth Circuit has yet to address whether the Seventh Amendment affords a plaintiff with the
right to a jury trial in circumstances similar to this case which is a conflict between fiduciaries.
It appears that district courts within the Eighth Circuit that have addressed this issue have
reached different results. Compare Utilicorp United Inc. v. Kemper Fin. Servs., Inc., 741 F.
Supp. 1363 (W.D. Mo. 1989) (holding that employer who asserted a breach of fiduciary duty
claim under ERISA 502(a)(2) against the investment manager for failing to timely liquidate
assets as instructed was entitled to a jury trial), with Kahnke v. Herter, 579 F. Supp. 1523, 1528
5
(D. Minn. 1984) (holding that there is no [S]eventh [A]mendment right to a jury trial in ERISA
actions brought under 502(a)(2)).
Identification of a sufficient number of conflicting and contradictory opinions would
provide substantial ground for disagreement. White, 43 F.3d at 378 (quoting Oyster v. Johns-
Manville Corp., 568 F. Supp. 83, 88 (E.D. Pa. 1983)). Many of the cases cited by Capital
Guardian are factually distinguishable or do not address whether the Seventh Amendment
provides a right to a jury trial for claims brought under 502(a)(2). Whether the conflicting
district court opinions comprise a sufficient number, need not be resolved here because Capital
Guardians request for exceptional review clearly fails to meet the third requirement.
2. Materially Advance the Ultimate Termination of the Litigation
Capital Guardians main argument regarding the third factor in the 1292 analysis is that
an immediate appeal will reduce the amount of money and time expended on this matter. Capital
Guardian contends that preparation for a jury trial requires more time and money than required
to prepare for a bench trial. Even assuming bench trials are less costly to prepare than jury trials,
the cost of an interlocutory appeal may well consume the difference in the cost. Capital
Guardian maintains it will appeal any jury verdict should the case proceed to trial before a jury,
and that were the Eighth Circuit to reverse the Courts decision to allow the case to go to a jury,
the Court and the parties would be exposed to two costly and time-consuming trials. Defs.
Mem. in Supp. of Mot. for Certificate of Appealability at 15. This argument is premised on at
least four questionable presumptions: (1) that the case will not get resolved on a dispositive
motion after discovery; (2) that Plaintiffs would not waive the right to a jury trial before the case
is heard; (3) that Capital Guardian would lose a jury trial; and (4) that even if the case were tried
6
to a jury the Court would not make findings of fact and conclusions of law despite having heard
the same evidence presented to the jury.
Plaintiffs assert that Capital Guardian has failed to establish how avoiding the added
costs they anticipate would materially advance the ultimate termination of the litigation. If this
Court were to grant Capital Guardians Motion and the Eighth Circuit were to reverse the
Courts decision, doing so would not advance the termination of this case because the parties
would still have to engage in discovery, take depositions, file and respond to motions, and
conduct a trial.
Resolution of this case concerns facts surrounding a single transaction. It is hard for the
Court to imagine how the trial could not be tried in a couple of days. Capital Guardian has failed
to demonstrate how an immediate appeal would either advance the termination of this litigation
or impact, in any way, the manner in which the parties proceed. As the Eighth Circuit has
explained, [w]hen litigation will be conducted in substantially the same manner regardless of
[its] decision, the appeal cannot be said to materially advance the ultimate termination of the
litigation. White, 43 F.3d at 378-79. Further, the procedural posture of this case allows Capital
Guardian to renew its objection regarding the propriety of a jury demand at a later stage.
Accordingly, Capital Guardian has failed to demonstrate that an immediate appeal will advance
the termination of the litigation and thus its Motion is denied.
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IV. CONCLUSION
Based upon the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Defendant Capital Guardian Trust Companys Motion for
Certificate of Appealability [Docket No. 52] is DENIED.
BY THE COURT:
s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT JUDGE
Dated: September 15, 2008.
 

 
 
 

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