United States District Court, D. Massachusetts
KEVIN MOITOSO, TIM LEWIS, MARY LEE TORLINE, and SHERYL ARNDT, individually and as representatives of a class of similarly situated persons, and on behalf of the FIDELITY RETIREMENT SAVINGS PLAN, Plaintiffs,
FMR LLC, FMR LLC FUNDED BENEFITS INVESTMENT COMMITTEE, FMR LLC RETIREMENT COMMITTEE, FIDELITY MANAGEMENT & RESEARCH COMPANY, FMR CO., INC., and FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC., Defendants.
MEMORANDUM AND ORDER
WILLIAM G. YOUNG DISTRICT JUDGE
civil justice system regularly relies on citizen juries to
decide intricate fact issues. Indeed, “[i]n the
fact-finding line, anything a judge can do a jury can do
better. The best sociological evidence confirms this
truth.” Marchan v. John Miller Farms, Inc.,
352 F.Supp.3d 938, 947 (D.N.D. 2018) (citing James
Surowiecki, The Wisdom of Crowds (2004)).
Nevertheless, the Seventh Amendment to the U.S. Constitution
does not endow parties with a right to a jury trial in all
civil cases but only “[i]n Suits at common law.”
the parties present the Court with a close call as to whether
their dispute includes a claim best characterized as a suit
at common law. The plaintiffs seek a money award on behalf of
a plan subject to the Employee Retirement Income Security Act
of 1974 (“ERISA”), Pub. L. No. 93-406, 88 Stat.
829 (1974), for the plan fiduciaries' alleged breaches of
fiduciary duty. Class Action Compl. 1-2, ECF No. 1. The plan
fiduciaries object to a jury trial and insist no such right
exists here notwithstanding the principle that “[m]oney
damages are, of course, the classic form of legal
relief.” See Mertens v. Hewitt Assocs., 508
U.S. 248, 255 (1993). After close study of historical
practice and ERISA's text, this Court concludes that a
money award, if any, that the plaintiffs might win would be
an equitable surcharge, not legal damages. As a result, the
Court rules that the Seventh Amendment does not require a
jury trial in this case.
plaintiffs, Kevin Moitoso, Tim Lewis, Mary Lee Torline, and
Sheryl Arndt, individually and as representatives of a class
of similarly situated persons, and on behalf of the Fidelity
Retirement Savings Plan (collectively, the
“Plaintiffs”), filed this suit against FMR LLC,
the FMR LLC Funded Benefits Investment Committee, the FMR LLC
Retirement Committee, Fidelity Management & Research
Company, FMR Co., Inc., and Fidelity Investments
Institutional Operations Company, Inc. (collectively,
“Fidelity”) on October 10, 2018. Class Action
Compl. 1. On October 19, 2018, the Plaintiffs filed a demand
for a jury trial. Demand Jury Trial, ECF No. 10. Thereafter,
the Plaintiffs amended their complaint thrice, once as of
right and twice with leave from the Court. Am. Compl., ECF
No. 31; Second Am. Compl., ECF No. 37; Third Am. Compl., ECF
No. 56. Five days after filing their second amended
complaint, on January 15, 2019, the Plaintiffs again demanded
a jury trial. Am. Demand Jury Trial, ECF No. 44. The
Plaintiffs reasserted their jury trial demand on April 4,
2019, after filing their third amended complaint. Second Am.
Demand Jury Trial (“Operative Demand”), ECF No.
April 17, 2019, Fidelity, for the first time, moved to strike
the Plaintiffs' jury demand. Defs.' Mot. Strike
Pls.' Demand Jury Trial, ECF No. 72; Defs.' Mem.
Supp. Mot. Strike Pls.' Demand Jury Trial
(“Defs.' Mem.”), ECF No. 73. The Plaintiffs
opposed the motion to strike on May 1, 2019. Br. Opp'n
Mot. Strike Jury Demand (“Opp'n”), ECF No.
75. On May 2, 2019, the Plaintiffs filed their fourth amended
complaint, with Fidelity's agreement. Fourth Am. Compl.
(“Operative Compl.”), ECF No. 77. The day before
the hearing on May 7, 2019, Fidelity filed a reply, ECF No.
Operative Demand requests a trial by jury on counts one
through four and count six of the Operative Complaint, which
seek an award of losses for Fidelity's alleged breaches
of fiduciary duty. Id. at 1. In the alternative, the
Plaintiffs request an advisory jury. Id. at 2.
Plaintiffs are former Fidelity employees who participated in
the Fidelity Retirement Savings Plan (the
“Plan”). Operative Compl. ¶¶ 18-20.
They allege that Fidelity breached its fiduciary duties in
managing the Plan. Id. ¶¶ 127-154. The
Plaintiffs request, among other things, that Fidelity restore
to the Plan the losses that the Plan suffered as a
consequence of Fidelity's alleged breaches of fiduciary
duty. Id. at 64. The Plaintiffs state that, because
they are former employees, they immediately may withdraw a
proportional share of the loss award from the Plan if and
when the Court enters judgment in their favor. Opp'n 15.
party demands a jury trial on any issue under Rule 38 of the
Federal Rules of Civil Procedure, then the Court puts any
such issue to the jury unless the Court “on motion or
on its own, finds that on some or all of those issues there
is no federal right to a jury trial.” Fed.R.Civ.P.
39(a). Even if no jury trial right exists in a case, the
Court may still empanel an advisory jury. Fed.R.Civ.P.
of the existence of a jury right, the Court intends to
empanel an advisory jury here. See Fed.R.Civ.P.
39(c); see also Marchan, 352 F.Supp.3d at 947-49
(explaining that juries can calculate monetary relief even
better than judges). The Court endeavors to explain below why
it concludes that the Seventh Amendment does not require a
jury to resolve the factual issues that the Plaintiffs raise
in counts one through four and count six of the operative
Seventh Amendment Jury Trial Clause guarantees that
“[i]n Suits at common law, where the value in
controversy shall exceed twenty dollars, the right of jury
trial shall be preserved.” “[A]t common
law” refers to legal, as opposed to equitable, claims.
Curtis v. Loether, 415 U.S. 189, 193 (1974) (quoting
Parson v. Bedford, 28 U.S. (3 Pet.) 433, 446-47
(1830)). Further, the Jury Trial Clause requires a jury to
resolve discrete claims to which a jury trial historically
attached even if the complaint also contains nonjury claims.
Ross v. Bernhard, 396 U.S. 531, 538-40 (1970).
Court weighs two factors to determine whether this suit
involves legal or equitable issues. See Full Spectrum
Software, Inc, v. Forte Automation Sys., Inc., 858 F.3d
666, 675 (1st Cir. 2017). First, this Court resolves
“whether the current action is ‘analogous to
common-law causes of action ordinarily decided in English law
courts in the late 18th century.'” Id.
(quoting Braunstein v. McCabe, 571 F.3d 108, 118
(1st Cir. 2009)). Second, and “more important, ”
the Court decides whether the requested remedy is legal or
equitable. Id. (quoting Granfianciera, S.A. v.
Nordberg, 492 U.S. 33, 42 (1989)). If, on balance,
these two factors indicate that the complaint presents only
equitable issues, then the jury trial right does not attach.
Cf. Braunstein, 571 F.3d at 122 (analyzing second
issue even after ruling that the first disfavored a jury
the two factors above, this Court GRANTS Fidelity's
motion to strike the Plaintiffs' jury demand. First, the
chancery courts of old traditionally heard claims for breach
of fiduciary duty, which militates against a jury trial
right. Second, ERISA's drafters provided for the
equitable remedy of surcharge, not the legal remedy of
damages, for breach of fiduciary duty. The damages question
is a close one, however, because the Court must reconcile
apparently contradictory Supreme Court pronouncements and
ERISA's express invocation of equitable remedies with the
absence of an explicit grant of discretion to the presiding
judge in awarding monetary relief. Ultimately, this Court
concludes that these apparent contradictions are not
contradictions at all because ERISA's drafters meant to
incorporate the equity-based doctrines of trust law for
actions that beneficiaries bring against fiduciaries.
Consequently, the jury trial right does not attach to the
Equity Courts Traditionally Heard Breach of Fiduciary Duty
Court construes the Plaintiffs' suit as most closely
analogous to a trust beneficiary's cause of action
against a trustee for breach of fiduciary duty. ERISA
fiduciary duty claims draw directly from trust law and thus
fall within “the bailiwick of the courts of
equity.” CIGNA Corp. v. Amara, 563 U.S. 421,
439-40 (2011) (quoting 4 Austin Wakeman Scott et
al., Scott and Ascher on Trusts § 24.1, at
1654 (5th ed. 2007)). Though this tradition ...