ERISA class action plaintiffs not entitled to jury.

Byline: Eric T. Berkman

Plaintiffs who brought a class action accusing their former employer of breaching its fiduciary duties by mismanaging its employee retirement plan were not entitled to a jury trial, a U.S. District Court judge has found.

The plaintiffs sought a monetary award against the defendant, Fidelity Investments, for allegedly managing their retirement plan in a manner that caused substantial losses. The plan is subject to the federal Employee Retirement Income Security Act of 1974.

In objecting to the plaintiffs' jury demand, Fidelity argued that the claim did not constitute a "suit at common law," and thus the plaintiffs had no right to a jury trial under the Seventh Amendment to the U.S. Constitution.

While calling it a "close call," Judge William G. Young agreed.

"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," Young wrote, granting Fidelity's motion to strike the plaintiffs' demand. "As a result, the Court rules that the Seventh Amendment does not require a jury trial in this case."

Nonetheless, citing the "vital role" of juries, Young ordered that an advisory jury be empaneled.

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Moitoso, et al. v. FMR LLC, et al., Lawyers Weekly No. 02-454-19 (24 pages)

THE ISSUE: Were plaintiffs who brought a class action accusing their former employer of breaching its fiduciary duties by mismanaging its employee retirement plan entitled to a jury trial?

DECISION: No (U.S. District Court)

LAWYERS: Carl F. Engstrom, James H. Kaster, Paul J. Lukas, Kai H. Richter, Jacob T. Schutz, Brock J. Specht and Mark E. Thomson, of Nicholas Kaster, Minneapolis; Jason M. Leviton and Jacob A. Walker, of Block & Leviton, Boston (plaintiffs)

Alison V. Douglass, John J. Falvey Jr., Paul E. Nemser, Benjamin S. Reilly, David Rosenberg, Christina L. Hennecken, Michael K. Isenman and M. William Jay, of Goodwin, Boston and Washington, D.C. (defense)[/box]

'Steep climb'

Lead plaintiffs' counsel, Kai H. Richter of Minneapolis, declined to comment. Attorneys for Fidelity, meanwhile, could not be reached for comment prior to deadline.

But Gavin G. McCarthy, a Portland, Maine, lawyer who defends ERISA class actions, said Young's ruling would not come as a surprise to plan administrators.

"A plaintiff suing under ERISA for breach of fiduciary duty will typically have a very...