James J. Thole v. U.S. Bank National Association

Named plaintiffs James Thole and Sherry Smith (collectively, “plaintiffs”)1

brought a putative class action against U.S. Bank, N.A. (“U.S. Bank”); U.S. Bancorp;

and multiple U.S. Bancorp directors (collectively, “defendants”),2 challenging the

defendants’ management of a defined benefit pension plan (“Plan” or “U.S. Bank

Pension Plan”) from September 30, 2007, to December 31, 2010. The plaintiffs

alleged that the defendants violated Sections 404, 405, and 406 of the Employee

Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1104–06, by

breaching their fiduciary obligations and causing the Plan to engage in prohibited

transactions with a U.S. Bank subsidiary, FAF Advisors, Inc. (FAF). The plaintiffs’

1The district court dismissed named plaintiffs Adetayo Adedipe and Marlene

Jackson per the parties’ stipulation.

2The district court dismissed defendant Nuveen Asset Management LLC

(“Nuveen”) on its motion.

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complaint asserts that these alleged ERISA violations caused significant losses to the

Plan’s assets in 2008 and resulted in the Plan being underfunded in 2008. The

plaintiffs sought to recover Plan losses, disgorgement of profits, injunctive relief, and

other remedial relief pursuant to ERISA Section 502(a)(2), 29 U.S.C. § 1132(a)(2),

and ERISA Section 409, 29 U.S.C. § 1109. They also sought equitable relief pursuant

to ERISA Section 502(a)(3), 29 U.S.C. § 1132(a)(3).

In response, the defendants moved to dismiss the plaintiffs’ consolidated

amended complaint with prejudice under Federal Rules of Civil Procedure 12(b)(1)

and 12(b)(6). Specifically, they argued that the plaintiffs lacked standing to bring the

suit, the ERISA claims were time-barred or had been released, and the pleading

otherwise failed to state a claim on which relief could be granted. Relevant to the

present appeal, the district court concluded that 3 the plaintiffs’ claim challenging the

Plan’s strategy of investing 100 percent of its assets in equities was barred by

ERISA’s six-year statute of repose. The court, however, permitted the plaintiffs to

proceed with their claim that the defendants engaged in a prohibited transaction by

investing the Plan’s assets in mutual funds that FAF managed.

During the litigation, the factual backdrop of the case changed. In 2014, the

Plan became overfunded; in other words, there was more money in the Plan than was

needed to meet its obligations. The defendants, alleging that the plaintiffs had not

suffered any financial loss upon which to base a damages claim, moved to dismiss the

remainder of the action for lack of standing pursuant to Rule 12(b)(1). Although the

district court concluded that standing was the wrong doctrine to apply, it granted the

motion to dismiss for lack of Article III jurisdiction based on the doctrine of

mootness. The court concluded that because the Plan is now overfunded, the plaintiffs

3The Honorable Joan N. Ericksen, United States District Judge for the District

of Minnesota.

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lack a concrete interest in any monetary relief that the court might award to the Plan

if the plaintiffs prevailed on the merits. The court 4 later denied the plaintiffs’ motion

for attorneys’ fees, determining that the plaintiffs had achieved no success on the

merits. The court concluded that the plaintiffs failed to show that the litigation had

acted as a catalyst for any contributions that U.S. Bancorp made to the Plan resulting

in its overfunded status.

On appeal, the plaintiffs argue that the district court erred by (1) dismissing the

case as moot; (2) dismissing the Equities Strategy claim on statute-of-limitations and

pleading grounds; and (3) denying their motion for attorneys’ fees and costs. We

affirm.

I. Background5

A. Overview of the U.S. Bank Pension Plan—A Defined Benefit Plan

The plaintiffs, both retirees of U.S. Bank, are participants in the U.S. Bank

Pension Plan. U.S. Bancorp is the Plan’s sponsor, while U.S. Bank (a wholly-owned

subsidiary of U.S. Bancorp) is the Plan’s trustee. Pursuant to the Plan document, the

Compensation Committee and Investment Committee had authority to manage the

Plan’s assets. The Compensation Committee was composed of U.S. Bancorp directors

and officers. The Compensation Committee designated FAF as the Investment

Manager with full discretionary investment authority over the Plan’s assets. During

the relevant time period, U.S. Bank was the parent of FAF.6

4As far as the record discloses, the Plan remains overfunded.

5We “accept[] as true all factual allegations in the complaint and draw[] all

reasonable inferences in favor of the nonmoving party.” Wieland v. U.S. Dep’t of

Health & Human Servs., 793 F.3d 949, 953 (8th Cir. 2015).

6Nuveen acquired FAF from U.S. Bank in November 2010.

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The Plan is a defined benefit plan regulated under ERISA. See 29 U.S.C. §§

1002(2)(A), 1002(35), 1003. “A defined benefit plan . . . consists of a general pool

of assets rather than individual dedicated accounts. Such a plan, ‘as its name implies,

is one where the employee, upon retirement, is entitled to a fixed periodic payment.’”

Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 439 (1999) (quoting Comm’r v.

Keystone Consol. Indus., Inc., 508 U.S. 152, 154 (1993)). According to the plaintiffs,

the Plan’s purpose “is to provide a monthly retirement income based on a U.S.

Bancorp employee’s pay and years of service.” In 2009, “Smith elected to receive her

Plan benefits in the form of a single life annuity in the amount of $42.26 per month,

and received a payment of the portion of her benefit accrued under a predecessor plan

. . . in the amount of $7,588.65.” In 2011, “Thole elected to receive his Plan benefits

in the form of a Estate Protection 50% Joint and Survivor Annuity in the amount of

$2,198.38 per month.” Under § 2.1.26 of the Plan, Smith and Thole are entitled to

receive their respective benefits for the rest of their lives. Thus far, the plaintiffs have

received all payments under the Plan to which they are entitled.

U.S. Bancorp and its subsidiaries make all Plan contributions. See Hughes, 525

U.S. at 439 (“The asset pool may be funded by employer or employee contributions,

or a combination of both.” (citing 29 U.S.C. § 1054(c))). Plan “members have a right

to a certain defined level of benefits, known as ‘accrued benefits.’” Id. at 440.

“Accrued benefit” for purposes of a defined benefit plan means “the individual’s

accrued benefit determined under the plan . . . expressed in the form of an annual

benefit commencing at normal retirement age.” 29 U.S.C. § 1002(23)(A).

A measurement called the Funding Target Attainment Percentage (FTAP)

determines whether a plan is on track to meet its benefit obligations to participants.

The FTAP is used to determine whether the plan sponsor must make a contribution

to the Plan in a particular year. See 29 U.S.C. § 1083(a), (d). A plan’s assets are less

than its liabilities if its FTAP is under 100 percent; if this occurs, then the plan

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sponsor must make a contribution. By contrast, if the FTAP is over 100 percent—i.e.,

the plan’s assets are greater than the liabilities—the plan sponsor is not required to

make a contribution. See 26 U.S.C. § 430(c).

Under the Plan (like all defined benefit plans), “the employer typically bears

the entire investment risk and—short of the consequences of plan termination—must

cover any underfunding as the result of a shortfall that may occur from the plan’s

investments.” Hughes, 525 U.S. at 439. But “if the defined benefit plan is overfunded,

the employer may reduce or suspend his contributions.” Id. at 440. The defined

benefit plan’s structure “reflects the risk borne by the employer.” Id. “Given the

employer’s obligation to make up any shortfall, no plan member has a claim to any

particular asset that composes a part of the plan’s general pool.” Id.

In summary, “[i]n a defined benefit plan, if plan assets are depleted but the

remaining pool of assets is more than adequate to pay all accrued or accumulated

benefits, then any loss is to plan surplus.” Harley v. Minn. Mining & Mfg. Co., 284

F.3d 901, 906 (8th Cir. 2002). “Plan beneficiaries have no claim or entitlement to its

surplus. If the Plan is overfunded, [the employer] may reduce or suspend its

contributions.” Id. Conversely, “[i]f the Plan’s surplus disappears, it is [the

employer]’s obligation to make up any underfunding with additional contributions.

If the Plan terminates with a surplus, the surplus may be distributed to [the

employer].” Id. “[T]he reality is that a relatively modest loss to Plan surplus is a loss

only to . . . the Plan’s sponsor.” Id.

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B. Complaint

In 2014, the plaintiffs filed the consolidated amended complaint7 setting forth

a putative class action against the defendants, challenging their management of the

Plan from September 30, 2007, to December 31, 2010. According to the plaintiffs, the

defendants violated ERISA Sections 404, 405, and 406, 29 U.S.C. §§ 1104–06.

The plaintiffs alleged that by 2007, FAF had invested the entire Plan portfolio

in equities—direct stock holdings or through mutual funds that FAF managed

(“Equities Strategy”). According to the plaintiffs, well-accepted principles of

diversification provide that a retirement portfolio should be invested in multiple asset

classes rather than in a single class. They alleged that diversification among the asset

classes reduces the risk of large losses and uncertainty because different asset classes

historically do not move up or down at the same time. The plaintiffs maintained that

because the Plan was significantly overfunded by 2007, it did not need to pursue such

a high-risk/high-reward investment strategy to meet its pension obligations. The

plaintiffs alleged that the defendants stood to benefit from the Equities Strategy;

specifically, they claimed that U.S. Bancorp and its Board members benefitted from

the Equities Strategy because it allowed U.S. Bancorp to increase its operating

income and avoid minimum employer contributions to the Plan. And they alleged that

the Equities Strategy benefitted the individual defendants holding stock options,

which were exercised and sold at a higher price because U.S. Bancorp’s reported

income (and resulting stock price) was increased by the excess pension income.

Because the defendants put all the Plan’s assets in a single higher-risk asset

class, the plaintiffs alleged, in 2008, the Plan suffered a loss of $1.1 billion. They

alleged that the Plan lost significantly more money in 2008 than it would have if the

defendants had properly diversified it. The $1.1 billion loss reduced the funding

7The plaintiffs filed their original complaint in 2013.

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status of the Plan—it went from being significantly overfunded in 2007 to being 84

percent underfunded in 2008.

The plaintiffs claimed that the defendants failed to monitor the investment of

Plan assets and terminate the Equities Strategy. This failure, according to the

plaintiffs, (1) violated the defendants’ fiduciary duty of prudence under ERISA

because it exposed the Plan to unnecessary risk; (2) violated their fiduciary duty to

diversify plan assets under ERISA because investing an entire retirement portfolio in

a single asset class is non-diversified on its face; and (3) violated their fiduciary duty

of loyalty under ERISA because the Equities Strategy benefitted the defendants to the

detriment of the Plan and its participants.

The plaintiffs also alleged several violations of ERISA based on the purported

conflicts of interest associated with the Plan’s assets being heavily invested in U.S.

Bancorp’s own mutual funds (“FAF Funds”). By 2007, FAF had invested over 40

percent of the Plan’s assets in the FAF Funds despite their costing more than similar

alternative funds. By investing the Plan’s assets in U.S. Bancorp’s own propriety

mutual funds, the plaintiffs alleged, FAF and U.S. Bancorp received management fees

from the Plan, increased the total assets under management to $1.25 billion, and were

able to attract more investors. The plaintiffs claim that, as a result, the Plan paid too

much in management fees for the FAF Funds.

Allegedly, these ERISA violations caused significant losses to the Plan’s assets

in 2008 and resulted in the Plan’s underfunded status in 2008 through the

commencement of this suit in 2013. The plaintiffs sought to recover Plan losses,

disgorgement of profits, injunctive relief, and other remedial relief pursuant to ERISA

Section 502(a)(2), 29 U.S.C. § 1132(a)(2), and ERISA Section 409, 29 U.S.C. § 1109.

They also sought equitable relief pursuant to ERISA Section 502(a)(3), 29 U.S.C.

§ 1132(a)(3).

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C. Dismissal Orders

The defendants moved to dismiss the complaint on various grounds, including

that the plaintiffs lacked Article III standing, that their ERISA claims were timebarred,

and that their pleading failed to state a claim on which relief could be granted.

On November 21, 2014, the district court denied the motion to dismiss in part and

granted it in part. First, the district court determined 8 that the plaintiffs had statutory

and Article III standing to pursue all their claims. Adedipe v. U.S. Bank, Nat’l Ass’n

(Adedipe I), 62 F. Supp. 3d 879, 887–96 (D. Minn. 2014). In determining that the

plaintiffs had Article III standing, the district court noted that the plaintiffs did “not

allege that their benefit levels have actually decreased as a result of the Defendants’

alleged misconduct,” id. at 891; therefore, they had “no ‘claim to any particular asset

that composes a part of the [P]lan’s general asset pool,’” id. at 890 (quoting Hughes,

525 U.S. at 440). But the plaintiffs did allege that the defendants’ conduct caused the

Plan to become underfunded in 2008, and the Plan remained in that status through the

lawsuit’s commencement. Id. at 891.

Based on the Plan’s underfunded status, the plaintiffs alleged that they were

“injured by the increased risk of default that arose when the Plan’s liabilities

exceeded its assets as a result of the significant losses caused by the Defendants’

ERISA violations.” Id. at 894. The court agreed. It found relevant “ERISA’s

minimum funding standards.” Id. Measured by these standards, the court stated, “the

Plan lacked a surplus large enough to absorb the losses at issue.” Id. at 895. “In other

words, Plaintiffs’ injury in fact was that Defendants’ actions caused an ‘alleged

increased risk of default’ and ‘the concomitant increase in the risk that the

participants will not receive the level of benefits they have been promised due to the

8The district court granted summary judgment to the defendants on the

plaintiffs’ securities-lending claims and dismissed the claim that investing in FAF

funds violated the Plan document. The plaintiffs do not challenge these rulings on

appeal.

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Plan being inadequately funded at termination.’” Adedipe v. U.S. Bank, Nat’l Ass’n

(Adedipe II), No. CV 13-2687 (JNE/JJK), 2015 WL 11217175, at *3 (D. Minn. Dec.

29, 2015) (quoting Adedipe I, 62 F. Supp. 3d at 891). The court also determined that

the plaintiffs adequately alleged that the defendants’ ERISA violations caused the

increased risk of default and that the relief that the plaintiffs sought (“the restoration

to the Plan of the assets that were allegedly lost as a result of the Defendants’

misconduct”) would “remedy the underfunding that is at the root of their injury.” Id.

(quoting Adedipe I, 62 F. Supp. 3d at 896).

After concluding that the plaintiffs had standing, the court dismissed the

Equities Strategy claims on statute-of-limitations grounds, concluding that because

the Plan had become invested entirely in equities securities more than six years before

the commencement of the suit, the claims were time-barred under 29 U.S.C.

§ 1113(1)(A). Adedipe I, 62 F. Supp. 3d at 898–99. The court further determined that

the complaint did not plausibly allege a “significant” change in circumstances that

would “trigger an obligation for fiduciaries to investigate whether altering an

investment strategy previously decided upon would [be] in the best interests of the

plan.” Id. at 899. Finally, the court denied the defendants’ motion to dismiss the

plaintiffs’ FAF Funds claims based on the alleged conflicts of interest and prohibited

transactions. Id. at 900–02.

Thereafter, the defendants moved to dismiss the action for lack of standing,

renewing an argument raised in the previous motion to dismiss. Adedipe II, 2015 WL

11217175, at *1. The defendants based their motion “on the factual development that

the Plan is now overfunded.” Id. at *3. The district court concluded that standing was

the wrong doctrine to apply given the procedural posture of the case; instead, the

applicable doctrine was mootness. Id. The court identified the plaintiffs’ injury in fact

as “the increased risk of Plan default, or, put another way, the increased risk that Plan

beneficiaries will not receive the level of benefits they have been promised.” Id. at *4.

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The court concluded that because the Plan is now overfunded, the plaintiffs no longer

have a concrete interest in the monetary and equitable relief sought to remedy that

alleged injury. Id. at *5. The court dismissed the entire case as moot.

Shortly thereafter, the plaintiffs moved for attorneys’ fees and costs pursuant

to ERISA Section 502(g), 29 U.S.C. § 1132(g)(1). The plaintiffs argued that the

defendants’ voluntary contribution of millions of dollars to the Plan after the

commencement of the lawsuit constituted some success on the merits because the

contribution was motivated by the litigation. The defendants responded “that in 2014

they again made excess contributions in order to reduce the Plan’s insurance

premiums.” Adedipe v. U.S. Bank, Nat’l Ass’n (Adedipe III), No. CV 13-2687

(JNE/JJK), 2016 WL 7131574, at *3 (D. Minn. Mar. 18, 2016). The district court

denied the plaintiffs’ motion, finding “no evidence that Defendants’ 2014

contribution is an ‘outcome’ of the litigation, as opposed to an independent decision

that nonetheless affected the viability of Plaintiffs’ case.” Id. at *4.

II. Discussion

On appeal, the plaintiffs argue that the district court erred by (1) dismissing the

case as moot based on the Plan’s overfunded status; (2) dismissing the Equities

Strategy claim on statute-of-limitations and pleading grounds; and (3) denying their

motion for attorneys’ fees and costs.

A. Dismissal of ERISA Claims Based on Plan’s Overfunded Status

The plaintiffs argue that the district court erroneously conflated the doctrine

of mootness with the doctrine of standing in holding that the Plan’s overfunded status

mooted their case. The plaintiffs contend that Harley and its progeny provide that

whether a Plan is underfunded is a factual issue relevant only to the injury-in-fact

element of Article III standing. This issue, the plaintiffs contend, is determined at the

commencement of the lawsuit. Because the plaintiffs showed that the Plan was

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underfunded at the commencement of the suit, they maintain, they have satisfied the

Article III standing requirement and are not required to establish that standing again.

And, according to the plaintiffs, their case is not moot because they are capable of

receiving the various forms of relief sought in the complaint and authorized by

ERISA; that is, their lawsuit can remedy the Plan’s and their own injuries.

“We review de novo a district court’s grant of a motion to dismiss for lack of

jurisdiction.” Doe v. Nixon, 716 F.3d 1041, 1051 (8th Cir. 2013). “We may affirm ‘for

any reason supported by the record, even if different from the reasons given by the

district court.’” Robbins v. Becker, 794 F.3d 988, 992 (8th Cir. 2015) (quoting Bishop

v. Glazier, 723 F.3d 957, 961 (8th Cir. 2013)).

This case involves ERISA’s civil enforcement provision. We first address

29 U.S.C. § 1132(a)(2). Section 1132(a)(2) provides that a plan participant or

beneficiary may bring a civil action “for appropriate relief under section 1109 of this

title.” 29 U.S.C. § 1132(a)(2). Section 1109, in turn, provides:

(a) Any person who is a fiduciary with respect to a plan who breaches

any of the responsibilities, obligations, or duties imposed upon

fiduciaries by this subchapter shall be personally liable to make good to

such plan any losses to the plan resulting from each such breach, and to

restore to such plan any profits of such fiduciary which have been made

through use of assets of the plan by the fiduciary, and shall be subject to

such other equitable or remedial relief as the court may deem

appropriate, including removal of such fiduciary. A fiduciary may also

be removed for a violation of section 1111 of this title.

(b) No fiduciary shall be liable with respect to a breach of fiduciary duty

under this subchapter if such breach was committed before he became

a fiduciary or after he ceased to be a fiduciary.

29 U.S.C. § 1109.

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“In Harley, this court concluded that § 1132(a)(2) does not permit a participant

in a defined-benefit plan to bring suit claiming liability under § 1109 for alleged

breaches of fiduciary duties when the plan is overfunded.” McCullough v. AEGON

USA Inc., 585 F.3d 1082, 1084 (8th Cir. 2009) (citing Harley, 284 F.3d at 905–07).

The Harley plaintiffs alleged that the plan fiduciaries of the defined benefit plan in

which they participated breached their fiduciary duties by (1) inadequately

investigating and monitoring a $20 million investment in a hedge fund that resulted

in a total loss of the investment, and (2) permitting the plan to enter into a prohibited

transaction under 29 U.S.C. § 1106(b)(1) by paying a $1.17 million fee to the hedge

fund’s investment advisor. Harley, 284 F.3d at 903–04, 908.

On appeal, we affirmed the district court’s grant of summary judgment

dismissing the plaintiffs’ failure-to-investigate and monitor claims. Id. at 907. Our

“focus [was] on whether plaintiffs ha[d] standing to bring an action under

§ 1132(a)(2) to seek relief under § 1109 for this particular breach of duty, given the

unique features of a defined benefit plan.” Id. at 905–06. We held that § 1132(a)(2)

did not authorize the plaintiffs to bring suit because “the Plan’s surplus was

sufficiently large that the . . . investment loss did not cause actual injury to plaintiffs’

interests in the Plan.” Id. at 907. We explained that “a contrary construction [of

§ 1132(a)(2)] would raise serious Article III case or controversy concerns” given that

“the limits on judicial power imposed by Article III counsel against permitting

participants or beneficiaries who have suffered no injury in fact from suing to enforce

ERISA fiduciary duties on behalf of the Plan.” Id. at 906 (first and second emphases

added).

But “[t]he statutory holding of Harley did not rest solely on constitutional

avoidance.” McCullough, 585 F.3d at 1087. Another critical consideration for the

court was ERISA’s primary purpose—“the protection of individual pension rights.”

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Harley, 284 F.3d at 907 (quoting H.R. Rep. No. 93-533, at 1 (1974), as reprinted in

1974 U.S.C.C.A.N. 4639, 4639). We reasoned that the plan participants’ and

beneficiaries’ individual pension rights were fully protected; in fact, their “rights

would if anything be adversely affected by subjecting the Plan and its fiduciaries to

costly litigation brought by parties who have suffered no injury from a relatively

modest but allegedly imprudent investment.” Id.9 “[T]he purposes underlying

ERISA’s imposition of strict fiduciary duties,” we reasoned, “are not furthered by

granting plaintiffs standing to pursue these claims.” Id. “In addition to the Article III

constitutional limitations,” we also noted that “prudential principles bear on the

question of standing. One of those principles is to require that ‘plaintiff’s complaint

fall within the zone of interests to be protected or regulated by the statute . . . in

question.’” Id. (ellipsis in original) (quoting Valley Forge Christian Coll. v. Ams.

United for Separation of Church & State, Inc., 454 U.S. 464, 475 (1982)).

In Harley, we determined “that a breach of a fiduciary duty causes no harm to

a participant when the plan is overfunded, and that allowing costly litigation would

run counter to ERISA’s purpose of protecting individual pension rights. That logic

applies whether an action alleges a single breach or a series of breaches.”

McCullough, 585 F.3d at 1087. Additionally, even though Harley “addressed only

claims for monetary relief,” “[g]iven Harley’s holding that a participant suffers no

injury as long as the plan is substantially overfunded . . . we [have found] no basis to

construe § 1132(a)(2) to authorize an action against fiduciaries of an overfunded plan

for injunctive relief, but not for the monetary relief sought in Harley.” Id.

9 “Although the court did not identify the precise text of § 1132(a)(2) that it

was construing, we presume the court determined that the suit would not be one ‘for

appropriate relief’ under the circumstances.” McCullough, 585 F.3d at 1084–85.

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“Harley was decided on statutory grounds,” not on Article III standing. Id. at

1085 (emphasis added). We acknowledge that some references in Harley to standing

may have caused some confusion for both the parties and the district court. “The

Supreme Court has recently commented that it has observed confusion about the

concept of standing and has suggested that the use of that term in conjunction with

anything other than the ‘irreducible constitutional minimum of standing’ provided by

Article III should be disfavored.” Tovar v. Essentia Health, 857 F.3d 771, 774 (8th

Cir. 2017) (quoting Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct.

1377, 1386 (2014)). We have acknowledged the confusion that the “the term

‘statutory standing’” causes; nonetheless, “its purpose is clear: a plaintiff who seeks

relief for violation of a statute must ‘fall[] within the class of plaintiffs whom

Congress has authorized to sue’ under that statute.” Id. (alteration in original)

(quoting Lexmark, 134 S. Ct. at 1387). “Determining whether this requirement is

satisfied is ‘a straightforward question of statutory interpretation.’” Id. (quoting

Lexmark, 134 S. Ct. at 1388).

In summary, a careful reading of Harley shows that the issue it addressed was

whether the plaintiffs in that case fell within the class of plaintiffs whom Congress

has authorized under § 1132(a)(2) to bring suit claiming liability under § 1109 for

alleged breaches of fiduciary duties given that the plan was overfunded. McCullough,

585 F.3d at 1084 (citing Harley, 284 F.3d at 905–07). That issue was resolved on

statutory grounds, not Article III grounds, such as standing or mootness. Harley holds

(and McCullough affirms) that when a plan is overfunded, a participant in a defined

benefit plan no longer falls within the class of plaintiffs authorized under

§ 1132(a)(2) to bring suit claiming liability under § 1109 for alleged breaches of

fiduciary duties. Here, the Plan is overfunded; therefore, Harley is applicable, and the

plaintiffs no longer fall within the class of plaintiffs authorized to bring suit.

Therefore, although the district court dismissed the case on mootness, the dismissal

(as far as it concerns relief under § 1132(a)(2)) was nonetheless proper, as we may

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affirm the dismissal for any reason supported by the record. See Robbins, 794 F.3d

at 992.10

We did not address whether “a plan participant may seek injunctive relief under

§ 1132(a)(3)” in either Harley or McCullough. McCullough, 585 F.3d at 1087.

“[C]ases from other circuits [have] conclud[ed] that a plan participant may seek

injunctive relief under § 1132(a)(3) [against fiduciaries of an overfunded plan].” Id.

(citing Loren v. Blue Cross & Blue Shield of Mich., 505 F.3d 598, 607–10 (6th Cir.

2007); Horvath v. Keystone Health Plan E., Inc., 333 F.3d 450, 455–56 (3d Cir.

2003)).

Section 1132(a)(3) provides that a plan participant or beneficiary may bring a

civil action “(A) to enjoin any act or practice which violates any provision of this

subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief

(I) to redress such violations or (ii) to enforce any provisions of this subchapter or the

terms of the plan.” 29 U.S.C. § 1132(a)(3). Section “1132(a)(3) is a ‘catch-all’

10The plaintiffs also argue that if we hold that Harley and its progeny require

that the Plan be underfunded at the commencement of the lawsuit and at every

moment throughout the litigation, we must reconsider Harley in light of the Supreme

Court’s recent standing decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549

(2016) (“In determining whether an intangible harm constitutes injury in fact, both

history and the judgment of Congress play important roles. Because the doctrine of

standing derives from the case-or-controversy requirement, and because that

requirement in turn is grounded in historical practice, it is instructive to consider

whether an alleged intangible harm has a close relationship to a harm that has

traditionally been regarded as providing a basis for a lawsuit in English or American

courts.”). As we have explained, however, “Harley was decided on statutory

grounds,” not on Article III standing. McCullough, 585 F.3d at 1085. Furthermore,

“[t]he statutory holding of Harley did not rest solely on constitutional avoidance” but

also on “advanc[ing] ERISA’s primary purpose of protecting individual pension

rights.” Id. at 1087.

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provision that ‘act[s] as a safety net, offering appropriate equitable relief for injuries

caused by violations that [§ 1132] does not elsewhere adequately remedy.’” Soehnlen

v. Fleet Owners Ins. Fund, 844 F.3d 576, 583 (6th Cir. 2016) (alterations in original)

(quoting Varity Corp. v. Howe, 516 U.S. 489, 512 (1996)). Here, in addition to relief

under § 1132(a)(2), the plaintiffs sought “any injunctive relief that the Court deems

appropriate” pursuant to § 1132(a)(3). The Sixth Circuit recently rejected plan

participants’ argument that “they need not show individual injury to obtain injunctive

relief for a breach of fiduciary duty” pursuant to § 1132(a)(3). Soehnlen, 844 F.3d at

584. In doing so, the Sixth Circuit examined its prior opinion in Loren and then

observed:

We recognize that misconduct by the administrators of a benefit plan

can create an injury if “it creates or enhances a risk of default by the

entire plan.” LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S.

248, 255, 128 S. Ct. 1020, 169 L. Ed. 2d 847 (2008). But Plaintiffs make

no showing of actual or imminent injury to the Plan itself. Plaintiffs

concede this point by pleading that the actions of the fiduciaries expose

the Plan to prospective liability in the amount of $15,000,000. To the

extent that Plaintiffs argue that the risk of an enforcement action is itself

sufficient to constitute an injury, we find in the absence of any evidence

that penalties have been levied, paid, or even contemplated that “these

risk-based theories of standing [are] unpersuasive, not least because they

rest on a highly speculative foundation lacking any discernible limiting

principle.” David v. Alphin, 704 F.3d 327, 338 (4th Cir. 2013). We

therefore affirm the district court’s finding that Plaintiffs[] lack standing

to bring this claim.

Id. at 585 (first emphasis added) (first alteration in original).

While Soehnlen is phrased in terms of Article III standing, the Sixth Circuit’s

recognition that the plaintiffs must “make [a] showing of actual or imminent injury

to the Plan itself,” id. (emphasis added), under § 1132(a)(3) is similar to our holding

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in Harley that § 1132(a)(2) does not authorize plaintiffs to bring suit when “the Plan’s

surplus [is] sufficiently large that the . . . investment loss did not cause actual injury

to plaintiffs’ interests in the Plan,” Harley, 284 F.3d at 907 (emphasis added).

Under both § 1132(a)(2) and (a)(3), the plaintiffs must show actual injury—to

the plaintiffs’ interest in the Plan under (a)(2) and to the Plan itself under (a)(3)—to

fall within the class of plaintiffs whom Congress has authorized to sue under the

statute. Given that the Plan is overfunded, there is no “actual or imminent injury to

the Plan itself” that caused injury to the plaintiffs’ interests in the Plan. Soehnlen, 844

F.3d at 585. For that reason, as in Harley and McCullough, the plaintiffs’ suit is not one for

appropriate relief, and we hold that dismissal of the plaintiffs’ claims for relief under

§ 1132(a)(3) was also proper.11

B. Attorneys’ Fees and Costs

The plaintiffs next argue that if we affirm the district court’s dismissal of their

claims based on the Plan’s overfunded status, then they are entitled to fees pursuant

to ERISA Section 502(g)(1), which permits “the court in its discretion [to] allow a

reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1).

We review for an abuse of discretion a district court’s denial of an award for

attorneys’ fees and costs. McDowell v. Price, 731 F.3d 775, 783–84 (8th Cir. 2013).

But, as a threshold matter, “a fees claimant must show ‘some degree of success on the

merits’ before a court may award attorney’s fees under § 1132(g)(1).” Hardt v.

Reliance Standard Life Ins. Co., 560 U.S. 242, 255 (2010) (quoting Ruckelshaus v.

Sierra Club, 463 U.S. 680, 694 (1983)). This standard is not satisfied “by achieving

‘trivial success on the merits’ or a ‘purely procedural victor[y].’” Id. (alteration in

Because we conclude that all of 11 the plaintiffs’ claims were properly dismissed

based on the Plan’s overfunded status, we need not address whether the district court

erred in dismissing the Equities Strategy claim on statute-of-limitations and pleading

grounds.

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original) (quoting Ruckelshaus, 463 U.S. at 688 n.9). But the standard is satisfied “if

the court can fairly call the outcome of the litigation some success on the merits

without conducting a ‘lengthy inquir[y] into the question whether a particular party’s

success was ‘substantial’ or occurred on a ‘central issue.’” Id. (alteration in original)

(quoting Ruckelshaus, 463 U.S. at 688 n.9).

Before the district court, the plaintiffs argued that they had achieved some

success on the merits because after they filed suit, the defendants, in 2014, made $311

million in voluntary excess contributions to the Plan. Adedipe III, 2016 WL 7131574,

at *4. According to the plaintiffs, “their litigation served as a catalyst for Defendants’

$311 million contribution.” Id. The district court found this a flawed argument

because no evidence existed that the defendants’ 2014 contribution was “an

‘outcome’ of the litigation, as opposed to an independent decision that nonetheless

affected the viability of Plaintiffs’ case.” Id. According to the defendants, they made

the 2014 contribution “to reduce the Plan’s insurance premiums.” Id. at *3. The

district court found the defendants’ explanation for this excess contribution “to be

supported by the record” and recounted the record evidence as follows:

In 2012, Defendants voluntarily made a $35 million contribution.

Hansen Decl. ¶ 6, Dkt. No. 264; see also Dkt. No. 108–1, Ex. E at 2–1

(showing September 11, 2012 contribution of $35 million). As

explained in a sworn declaration by U.S. Bancorp’s Senior Vice

President of Benefits Design, David Hansen, the contribution was made

in order to reduce the expensive variable insurance premiums the Plan

would otherwise have been required to pay for Plan Year 2011. Hansen

Decl. ¶ 6. In 2013, before Plaintiffs filed suit, Defendants made $163

million of the total of $290 million in voluntary excess contributions

that year, again to reduce premiums, as well as for other reasons

unrelated to the litigation. Id. ¶¶ 7–8. Defendants explain that in 2014

they again made excess contributions in order to reduce the Plan’s

insurance premiums. Id. ¶ 9. They note that the excess contributions in

2013 and 2014 brought the Plan’s “PBGC ratio,” which is used to

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calculate the required insurance premiums, almost exactly to the ratio

that would minimize premium costs, thus corroborating this explanation

for Defendants’ decisions to make the contributions. Id. ¶¶ 8–9.

Id. (footnote omitted). According to the court, the plaintiffs offered no evidence

beyond mere speculation that the “litigation caused the contributions to the Plan.” Id.

Additionally, the district court noted that “no court order spurred Defendants’

actions, nor did [the district] [c]ourt ever state that it was likely to grant summary

judgment to Plaintiffs.” Id. at *4; cf. Hardt, 560 U.S. at 256 (holding that plaintiff,

whose claim for benefits was denied by insurer, achieved some success on the merits

of her ERISA claim when, although the plaintiff “failed to win summary judgment on

her benefits claim, the [d]istrict [c]ourt nevertheless found ‘compelling evidence’”

that supported her case and stated that it was inclined to grant her summary judgment

but first ordered the insurer to reconsider her claim and the insurer, during its “courtordered

review,” awarded the plaintiff the claimed benefits). In fact, the “case was

still in the pleadings stage when the [c]ourt dismissed it.” Adedipe III, 2016 WL

7131574, at *4.

“Courts within the Eighth Circuit and elsewhere have found that an award of

attorney’s fees in an ERISA case may be proper when a plaintiff’s suit operated as a

catalyst to bring about a voluntary change in the defendant’s conduct.” Greater St.

Louis Constr. Laborers Welfare Fund v. X–L Contracting, Inc., No.

4:14-CV-946-SPM, 2016 WL 6432768, at *11 (E.D. Mo. Oct. 31, 2016) (citing Boyle

v. Int’l Bhd. of Teamsters Local 863 Welfare Fund, 579 F. App’x 72, 77–78 (3d Cir.

2014) (determining that the plaintiffs had achieved some success on the merits and

could receive an award of attorneys’ fees under the catalyst theory where the

defendants voluntarily reinstated the plaintiffs’ benefits but did so only after the

plaintiffs filed suit); Broadbent v. Citigroup Long Term Disability Plan, No. CIV

13–4081–LLP, 2015 WL 1189565, at *4–5 (D.S.D. Mar. 16, 2015) (determining that

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the plaintiff had achieved some degree of success on the merits where the lawsuit

“served as a catalyst to cause [the defendant] to provide her with substantially all of

the relief she sought in her complaint”); Greenwald v. Liberty Life Assurance Co.,

No. 4:12–CV–3034, 2013 WL 3716416, at *3 (D. Neb. July 12, 2013) (determining

that a plaintiff can obtain fees under ERISA pursuant to the catalyst theory even

though the litigation did not result in a favorable judgment, if “the pressure of the

lawsuit was a material contributing factor in bringing about extrajudicial relief,” and

explaining that “an award of attorney fees under § 1132(g) does not require the fee

claimant to achieve prevailing party status” and that “ERISA is remedial legislation,

and should be interpreted to advance Congress’ goals of protecting employee rights

and securing effective access to federal courts” (internal quotation marks omitted)).

Here, the record supports the district court’s conclusion that the plaintiffs failed

to produce evidence that their lawsuit was a material contributing factor in the

defendants’ making the 2014 contribution resulting in the Plan’s overfunded status

and any relief that the plaintiffs sought in their complaint. Accordingly, we hold that

the district court did not abuse its discretion in denying the plaintiffs’ motion for

attorneys’ fees and costs.

III. Conclusion

Accordingly, we affirm the judgment of the district court.

KELLY, Circuit Judge, concurring in part and dissenting in part.

I agree with the court’s conclusion that—under Harley and McCullough—the

plaintiffs lack authorization to sue under 29 U.S.C. § 1132(a)(2). However, I

respectfully dissent from the court’s holding that the plaintiffs lack authority to bring

their claims for injunctive relief under 29 U.S.C. § 1132(a)(3). As relevant,

§ 1132(a)(3) authorizes civil actions “by a participant, beneficiary, or fiduciary (A)

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to enjoin any act or practice which violates any provision of [29 U.S.C.

§§ 1104–1106], or (B) to obtain other appropriate equitable relief (i) to redress such

violations or (ii) to enforce [§§ 1104–1106].” In light of this unambiguous statutory

text and in the absence of any dispute that the plaintiffs are participants in and

beneficiaries of the Plan, I believe that the plaintiffs’ complaint—which seeks to

enjoin the defendants from breaching their fiduciary duties under §§ 1104–1106 in

relation to their management of the Plan—falls within “the zone of interests to be

protected or regulated” by ERISA. See Harley, 284 F.3d at 907 (quoting Valley

Forge, 454 U.S. at 475).

I also believe that—accepting as true all factual allegations in the plaintiffs’

complaint and drawing all reasonable inferences in their favor, as we must—the

plaintiffs have shown an actual or imminent injury. Cf. Soehnlen, 844 F.3d at 585

(concluding plaintiffs who made “no showing of actual or imminent injury to the Plan

itself” lacked standing). More specifically, the plaintiffs allege that the defendants

invested the entirety of the Plan’s assets in high-risk/high-reward equities, in

violation of their fiduciary duties under §§ 1104–1106, and that as a result, the Plan

suffered a loss of $1.1 billion, causing the Plan to fall from being significantly

overfunded in 2007 to being 84 percent underfunded in 2008. See Harley, 284 F.3d

at 905 (recognizing that investment losses were cognizable losses to the ERISA plan

because they reduced the pool of plan assets). The relief sought is not monetary, but

injunctive, and the injury alleged is not speculative. Moreover, the complaint alleges

that at least some of the defendants continue to serve as Plan fiduciaries and remain

positioned to resume their alleged ERISA violations. Cf. Soehnlen, 844 F.3d at 585

(finding risk of a potential enforcement action too speculative to satisfy requirement

of actual or imminent injury “in the absence of any evidence that penalties had been

levied, paid, or even contemplated”). Finally, I do not believe that Harley or

McCullough controls our decision in this case as to whether plaintiffs have authority

under § 1132(a)(3) to sue for injunctive relief. See McCullough, 585 F.3d at 1087

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(applying Harley as controlling circuit precedent on the plaintiff’s claim for

injunctive relief under § 1132(a)(2), and specifically noting that the plaintiff had not

relied on § 1132(a)(3)).

For these reasons, I believe that the plaintiffs are authorized to sue for

injunctive relief under § 1132(a)(3). I would therefore affirm the district court’s

dismissal of the plaintiffs’ claims under § 1132(a)(2), reverse the dismissal of their

claims for injunctive relief under § 1132(a)(3), and remand this matter to the district

court for further proceedings, including reconsideration of the issue of attorney’s fees

and costs upon final resolution of the case.

Accordingly, we affirm the judgment of the district court.