MCCORKLE v. BANK OF AMERICA CO., NO. 14-1011
Decided: June 8, 2015
The Fourth Circuit held that the Plaintiffs had both statutory and Article III of the U.S. Constitution standing, and that the Plaintiffs claim was not time-barred. Consequently, the Court reversed and remanded the District Court’s dismissal of the Plaintiff’s case.
Plaintiff’s William Pender and David McCorkle, collectively with those similarly situated, elected to transfer their 401(k) account balances to a bank Pension Plan. The Internal Revenue Service (IRS) opened an audit of the Bank’s plans. In 2005, the IRS issued a technical advice memorandum, in which it concluded that the transfers of 401(k) Plan participants’ assets to the Pension Plan violated the Internal Revenue Code. In May 2008, the Bank and the IRS entered into a closing agreement. The Plaintiffs’ alleged a violation of ERISA § 204(g)(1), 29 U.S.C. § 1054(g)(1), which states that an ERISA-plan participant’s “accrued benefit” “may not be decreased by an amendment of the plan, unless specifically provided for in ERISA or regulations promulgated pursuant to ERISA. The Plaintiffs sought the profit the Bank made using their assets. The District Court dismissed the case on the basis that the Plaintiffs lacked standing.
On appeal, the Fourth Circuit found that the Plaintiffs had statutory standing under section 502(a)(3) to bring their claim. Plaintiffs incurred an injury in fact because they “suffered an individual loss.” The Court found that the Plaintiffs also have standing under Article III, because they satisfy the causation and redressability requirements. Additionally, the Court held that the Plaintiffs’ claims were not time-barred by the ten-year limitations period because the first of the transfers took place in 1998 and the Plaintiffs filled suit in 2004, leaving a full four years before the ten year statute of limitations would have run. Accordingly, the Court reversed and remanded the District Court’s order.