United States District Court, N.D. California
PUBLIC/REDACTED VERSION ORDER GRANTING
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT, AND DENYING AS
MOOT PLAINTIFFS’ MOTION FOR SUMMARY ADJUDICATION Docket
Nos. 259, 268
M. CHEN UNITED STATES DISTRICT JUDGE
in this case are individuals who are members of a local
union, more specifically, Local 3 in the International Union
of Operating Engineers (“IUOE”). Plaintiffs are
participants in a Pension Fund established by the union. At
present, there are only two claims remaining in this case.
The claims are for violations of ERISA and have been asserted
against current or former members of the Board of Trustees
for the Pension Fund, based on their decision, as Trustees,
 to invest
$100 million in an investment fund known as the Longview or
Ultra Fund. Ultimately, only $90 million was actually
invested. Plaintiffs contend that Defendants breached their
fiduciary duties (e.g., the duty of prudence and the
duty of loyalty) by investing in the Longview Fund.
pending before the Court are two motions for summary
adjudication and/or judgment. In their pending motion for
summary adjudication, Plaintiffs have moved against 7 out of
the 10 defendants - i.e., all Defendants except Mr.
Figueiredo, Mr. Ingersoll, and Mr. Albanese. Plaintiffs ask
the Court to adjudicate in their favor that these 7
defendants violated their duty of prudence by investing in
the Longview Fund. See generally 29 U.S.C. §
1104(a)(1)(B) (“[A] fiduciary shall discharge his
duties with respect to a plan solely in the interest of the
participants and beneficiaries . . . with the care, skill,
prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.”).
As for the other pending motion, it is brought by all
Defendants except Mr. Figueiredo and Mr. Ingersoll, and is
one for summary judgment or adjudication based on, inter
alia, standing, the statute of limitations, and the duty
considered the parties’ briefs and accompanying
submissions, the Court hereby GRANTS Defendants’ motion
for summary judgment. More specifically, the Court concludes
that there is no genuine dispute of material fact that
Plaintiffs’ ERISA claims (whether based on the duty of
prudence or the duty of loyalty) are time barred. Because the
claims are time barred, the Court need not address the
remaining arguments made in Defendants’ motion.
Furthermore, Plaintiffs’ motion for summary
adjudication is DENIED as moot.
FACTUAL & PROCEDURAL BACKGROUND
following facts are undisputed.
Bank (“AB”) is the investment manager for an
investment fund known as the Longview or Ultra Fund.
The objective of the [Longview] Fund [was] to provide
construction loans, generally requiring a term of one to two
years and mini-permanent loans generally not exceeding two
years from the completion of construction for all types of
new construction and substantial remodeling of buildings to
be built with 100% union labor. [The] Fund Strategy [was] to
provide a high yielding investment alternative while
minimizing interest rate risk by lending to short-term
Docket No. 272 (Wasnock Decl., Ex. 2) (comparative analysis)
mid-2007, Patty Wagoner, a vice-president of AB, spoke to Mr.
Burns, a defendant and one of the union-side Trustees for the
Pension Fund, about the Fund investing in Longview.
Apparently, Ms. Waggoner’s son was, during this time,
dating the daughter of Mr. Goff, another defendant and
union-side Trustee for the Pension Fund. Mr. Burns directed
Ms. Waggoner to the Pension Fund’s investment
consultant at the time, Scott Whalen of Wurts &
Associates, Inc. (“Wurts”).
about June 2007, Mr. Whalen met with Debbie Nisson, an AB
employee and co-manager of the Longview Fund, to talk about
Longview. At about this time, Mr. Whalen also talked to
another Wurts employee, John Wasnock, about an investigation
that Mr. Wasnock previously did on the Longview Fund for a
different Wurts client (also a pension fund).
13, 2007, the Pension Fund’s Investment Oversight
Committee (“IOC”) held a meeting during which,
inter alia, AB gave a presentation on the Longview
Fund. The role of the IOC is to advise the Board of Trustees
in investments. During the IOC meeting, Mr. Whalen also
presented his analysis and recommendation of the Longview
Fund. The IOC voted unanimously to recommend a $100 million
investment with AB in the Longview Fund.
August 16, 2007, the IOC met again. For this meeting, the
Pension Fund’s attorney, Dick Johnson, circulated a
memo which addressed documents concerning the Longview Fund
and which identified risks with the investment.
August 20, 2007, the full Board held a meeting during which,
inter alia, it approved the Longview investment,
contingent on a follow-up by Mr. Whalen. All moving
defendants, except for Mr. Holsman and Mr. Albanese, were
present at this Board meeting. Mr. Whalen (of Wurts) and Mr.
Johnson (legal counsel) were also present at the meeting.
September 4, 2007, Mr. Whalen communicated the results of his
follow-up to Mr. Johnson and to the IOC co-chairs at the time
(one of which was Mr. Piombo, a defendant).
October 22, 2007, the Pension Fund entered into an Investment
Management Agreement (“IMA”) with AB, with
respect to the Longview Fund.
in October 2007, AB made capital calls on the Pension Fund
for the Longview investment. Altogether, AB made six capital
calls. The Pension Fund provided capital on all calls except
last capital call was made in or about February 2009. At that
time, IPS - the Pension Fund’s investment consultant,
hired after Wurts was terminated, see note 3 -
recommended that the capital call not be met. IPS made this
recommendation because the Longview Fund “fell within
the Pension Fund’s fixed income asset class, and
because the Pension Fund was overweighted in fixed income
investments.” Docket No. 274 (Sichel Decl. ¶ 15).
The question of whether the Pension Fund could refuse to make
the capital call was referred to the Pension Fund’s
legal counsel, Mr. Johnson. Apparently, Mr. Johnson opined
that the Pension Fund did not have to meet the last capital
call, but his reasoning as to why is not entirely
e-mail written by Mr. Johnson during the relevant time period
states as follows: