Plan fiduciaries who have already prevailed on most claims in an excessive fee suit have now won their motion on denying plaintiffs a jury trial.
In a curt ruling (Troudt v. Oracle Corp., D. Colo., No. 1:16-cv-00175-REB-SKC, 5/30/19), Judge Robert E. Blackburn of the U.S. District Court for the District of Colorado, having earlier this year dismissed with prejudice most of the claims brought against Oracle Corp. in a 2016 lawsuit, quickly rebuffed plaintiff Deborah Troudt’s petition to have her case heard before a jury.
In doing so, he turned to a recent ruling in another suit filed by Schlichter Bogard & Denton LLP, (Ramos v. Banner Health, D. Colo., No. 1:15-cv-02556-WJM-NRN, 4/23/19), which he observed “were addressed little more than a month ago by my colleague in a case implicating nearly identical claims,” and thus, he noted “I see little reason to present an overly festooned reiteration of that thorough and cogent analysis here.”
Blackburn cited a two-part test used to determine whether a party has a right to a jury trial when that right is not explicitly granted by statute – and then noted that the plaintiffs “do not even address the first prong – whether their claims are legal or equitable in nature” – not that it seemed to matter. He noted that the claims were clearly equitable, according to existing Supreme Court and Tenth Circuit precedent. As to whether the remedies plaintiffs seek are legal or equitable – “the second prong of the apposite test,” Judge Blackburn was unpersuaded of any argument or precedent cited by the plaintiffs that “undermines the long-established and often-reaffirmed position in this circuit that ERISA remedies are inherently equitable in nature.”
He went on to write that the precedents cited by the plaintiffs “…are not directly (or even very obliquely) on point, and the dicta on which plaintiffs here rely thus presents no “compelling reason to depart from precedent and the great weight of authority in other circuits” in this regard” – and thus concluded that the plaintiffs were “not entitled to a jury trial on their remaining claims in this lawsuit.”
Judge Blackburn’s ruling is hardly an outlier in such cases. Bloomberg Law notes that similar requests have been denied in cases involving Anthem Inc., BB&T Corp., Duke University and Columbia University. However, the report notes that last year in a pending ERISA case against Cornell University, a federal judge held that parts of that lawsuit could be heard by a jury.
What it Means
The jury decision here turns on whether the relief sought by the plaintiffs is considered to be “legal” or equitable. Legal claims generally involve seeking money – and can be tried by jury. On the other hand, equitable claims, which generally seek to either prompt or stop a specific action, including changing plan procedures, or disgorging profits, can’t.
The rejection of motions for jury trials have, thus far, been pretty consistently rebuffed. However, the frequency of request is picking up, and this one, as in several of the others, is by the Schlichter law firm – and so you can bet that this request won’t be the last. It may even result in a change in what claims are alleged, since juries might well be seen as being more favorable to plaintiffs’ claims.
