22-1783, August Term, 2023
Argued:
Decided:
THE TRUSTEES OF THE
—v.—
WHITE OAK GLOBAL
ADVISORS, LLC, Respondent-Appellant.
Before: LYNCH and PARK, Circuit Judges, and CLARKE,† District
Judge.
Respondent-Appellant White Oak Global Advisors, LLC appeals from a judgment of the United States District Court for the Southern District of New York (Kaplan, J.), entered in favor of Petitioner-Appellee Trustees of the New York State Nurses Association Pension Plan on their petition to confirm an arbitral award between the parties.
The award, resolving several ERISA fiduciary duty claims brought by the Trustees against White Oak, was rendered pursuant to an arbitration clause contained in the investment management agreement by which White Oak assumed its ERISA fiduciary relationship to the pension plan.
The Clerk of Court is respectfully directed to amend the caption.
On appeal, White Oak argues that the district court lacked jurisdiction to confirm the award after the Supreme Court’s decision in Badgerow, which held that federal courts cannot premise jurisdiction over a Federal Arbitration Act §§ 9-11 petition based on whether jurisdiction would have existed over the underlying dispute.
White Oak further contends that, even if jurisdiction existed, the court erroneously interpreted the award when it granted the Trustees preaward interest on the disgorgement of the Plan’s assets, return of the “Day One” fees collected by White Oak, and White Oak’s “profits,” as the award did not grant or was ambiguous regarding such relief. Finally, White Oak asserts that the district court abused its discretion in ordering, under its inherent authority, payment of the Trustees’ attorneys’ fees and costs for the entirety of the confirmation proceeding.
We conclude that the Trustees’ petition is cognizable under ERISA §502(a)(3), as the Trustees are a party authorized by that provision to sue; to enforce a right – the arbitration agreement – created by a plan document or term; and to request equitable relief against a co-fiduciary to the plan. Such suits, brought by a fiduciary on behalf of the beneficiaries to enforce a plan document or term against a co-fiduciary, seek relief traditionally equitable in nature. We therefore agree with the district court that it possessed jurisdiction to confirm the arbitral award.
Turning to the merits, we find that the award unambiguously granted disgorgement of prejudgment interest and the “Day One” fees, but that the award of profits is too ambiguous to enforce and must be remanded to the arbitrator for clarification.
Finally, we agree that the district court failed to make sufficiently specific findings tailored to White Oak’s conduct so as to justify the award of attorneys’ fees and costs for the entirety of the confirmation proceeding.
Accordingly, we AFFIRM the order confirming the arbitral award insofar as it grants disgorgement of pre-award interest and the “Day One” fees; VACATE and REMAND insofar as the court confirmed the disgorgement of “profits,” with instructions to the district court to remand this item of relief to the arbitrator for a determination of the existence and extent of profits; and VACATE and REMAND the order granting the Trustees their attorneys’ fees and costs on the action to confirm the arbitral award for the district court to make more specific findings justifying its sanction.
† Judge Jessica G. L. Clarke, of the United States District Court for the Southern District of New York, sitting by designation.
Click HERE to access the text of the Second Circuit 90 page opinion in this matter.