Split Of Authority Research Articles

ERISA Breach of Fiduciary Duty: Shifting the Burden Of Proving Causation To the Defendant

THE Employee Retirement Income Security Act of 1974 (ERISA) aimed to protect America's workers. It sought to decrease fraud and guard against harm to beneficiaries.1 Congress passed ERISA to protect beneficiaries from losing all they had saved because of wrongful actions of a fiduciary.2 According to U.S. Department of Labor, over half of people who worked in 2012 worked for employers sponsoring a retirement Over sixty-one million people participated in a plan in 2012.A split of authority currently exists whether beneficiary can shift burden of proving causation of losses to fiduciary. The Fourth,4 Fifth,5 and Eighth6 Circuits have held that plaintiff can shift this burden, but Second,7 Sixth,8 Ninth,9 and Eleventh10 * Circuits have held that a shift should not occur. The remaining Circuits have noted split, but they have declined to make a decision on issu* e. 1 * * * * *11 It is unclear if plaintiff must prove causation or can shift that burden to defendant. Recently, Supreme Court denied a certiorari petition on this issue.12 Consequently, circuits must determine for themselves whether and in what circumstances shifting burden to prove causation is appropriate.This article compiles status of this issue across country, analyzes arguments presented in favor of burdenshifting, and argues that burden of proof for causation should be shifted to fiduciary but only after beneficiary meets certain criteria. This shift is based on common law of trusts, which shifts burden to trustee once beneficiary proves duty, breach, and loss.13 Although trust law demands burden shift, this article also suggests shift is beneficial because defendant is in a better position to prove causation and promoting such a shift will benefit fiduciary relationships.I. BackgroundPrior to enactment of ERISA,14 employee retirement plans lacked adequate funds for plan participants.15 Participants could not easily access information about their plans, and there were many cases where fiduciaries were engaged in criminal behavior.16 While Congress attempted to address these issues with various acts of legislation, these problems persisted.17In addition to substantive problems with pension plans, there were also problems with litigation regarding pension plan fiduciary breaches.18 Benefit plans were subject to the crazy-quilt system of legal jurisdiction throughout various states governing non-collectively bargained plans.In 1962, President Kennedy appointed Committee on Corporate Pension Funds. The Committee conducted a study that concluded that prior legislation was not enough, sparking nine years of Congressional debate.20 These debates and investigations ultimately resulted in enactment of Employee Retirement Income Security Act (ERISA) in 1974.21ERISA governs most voluntarily established private-sector retirement plans.2 It requires disclosure of certain information to plan's beneficiaries and sets out standards for each plan.3 Managing each type of retirement plan requires a fiduciary.24 The Department of Labor defines role of a fiduciary as [ujsing discretion in administering and managing a plan or controlling plan's assets.25 Each plan must have at least one named fiduciary.26 This person must have control over plan's operations.27 Typically, a plan's fiduciaries will include trustee, investment advisers, all individuals exercising discretion in administration of plan, all members of a plan's administrative committee, and those who select committee officials. When a person is acting on behalf of plan, she establ ishes herself as a fiduciary.29ERISA defines a fiduciary as:Except as otherwise provided in subparagraph (B), a person is a fiduciary with respect to a plan to extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in administration of such plan. …

Pirates, Blackmailers — And Rule 20

In the war between digital pirates and copyright holders, one battle is being fought over adult content. Many copyright holders in this skirmish attempt to use mass litigation to, in effect, blackmail pirates into paying settlements in exchange for confidentiality. But rather than address the litigation dynamics at this basic level, the courtroom discourse focuses on the meaning of Rule 20 of the Federal Rules of Civil Procedure. A split of authority, both within and across circuits, demonstrates the inadequacy of this legal framework to address the reality of the fight. But there is an alternative. As some judges are beginning to put into practice, and as justice requires, these cases should be viewed skeptically through a potential abuse of process lens.

Where Credit is Due: Foreclosure Without the Note is a Remedy Without a Right

Can a party without the right to collect a secured debt nonetheless seize the collateral securing it? This Article asserts that it may not, and that in residential real estate finance, foreclosure of a property requires the right to collect the underlying secured debt. The two pillars of a mortgage are the promissory note and the security instrument. The promissory note evidences the debt and the security instrument secures the debt by conveying a security interest in the real property of the mortgagor. When the two instruments are held by different parties, it raises the question of whether the party that holds the security interest may foreclose upon it after a breach of the promissory note. This question has caused a split of authority to develop in the Northern District of Georgia, and is now before the Georgia Supreme Court. This Article demonstrates that the party holding the security interest cannot foreclose for the debt underlying the promissory note. The remedy of foreclosure is granted for the purpose of securing repayment of the debt to the party entitled to collect it in the first place — a security interest cannot create a remedy where there is no right.

Discharging Fiduciary Debts in Bankruptcy

Under section 523(a)(4) of the Bankruptcy Code, a debt is not dischargeable if it results from “fraud or defalcation” while the debtor is acting in a “fiduciary capacity.” Although this provision has existed in various incarnations in the bankruptcy law since 1841, the meaning of both the terms “defalcation” and “fiduciary capacity” is subject to confusion and disagreement among the courts. This piece explores the meaning of these terms from the nineteenth century for today, and demonstrates that the best meaning of “defalcation” while acting in a “fiduciary capacity” is the failure of one who holds the funds of another in a trust-like situation to account for those funds. A split of authority among the circuit courts has existed for years regarding these issues, but the Supreme Court has recently granted certiorari to decide these issues in the case of Bullock v. Bankchampaign.

Solving the Chapter 12 Tax Conundrum: How Congress Should Clarify the Bankruptcy Code

Before the BAPCPA amendments, many farm-debtors struggled to have bankruptcy plans confirmed due to significant tax claims arising from proposed Chapter 12 reorganizations. Therefore, in 2005, Congress amended the Bankruptcy Code, making “claims owed to government units” unsecured. However, as debtors attempted to use this provision to reduce tax liabilities in bankruptcy plans, the ambiguities and shortcomings of the amendment came to light. The I.R.S. objected to debtor’s classification of taxes arising from ordinary operations and post-petition sales as unsecured, as well as the debtor’s method of allocation between secured and unsecured claims. The legal battles over these objections have created a split of authority between the Eighth and Ninth Circuits, and the Tenth Circuit is in the process of addressing the same issue. The debate of the proper interpretation is based on how the Internal Revenue Code should influence this bankruptcy provision and how courts should use the Bankruptcy Code’s plain language and Congress’s legislative history. Congress should clarify the Bankruptcy Code and effectuate the original legislative intent by classifying taxes arising from dispositions associated with reorganization from both pre-petition and post-petition sales as unsecured, while officially adopting the “proration method” in allocating secured and unsecured claims.

The Anticipated Resolution of the Blakely Split of Authority in the States

The Anticipated Resolution of the Blakely Split of Authority in the States

Absolute Pollution: Exclusion Update

This article reviews court decisions from 2001 and 2002 discussing the absolute pollution exclusion in the context of property damage, bodily injury claims, and other types of harm. In recent cases, courts have consistently found the absolute pollution exclusion to be clear and unambiguous, excluding coverage for “environmental” and other types of property damage claims. However, there is a split of authority and inconsistency in how courts analyze and interpret the absolute pollution exclusion when bodily injury claims are at issue. The analysis and court rulings are often determined by the specific policy language as applied to the facts in the cases.

Faith In Justice: Fiduciaries, Malpractice & Sexual Abuse by Clergy

Faith in Justice: Fiduciaries, Malpractice & Sexual Abuse by Clergy addresses in depth the subject of sexual misconduct by religious clerics. Several courts have addressed the issue of malpractice, none explicitly recognizing it as a cause of action. Many courts have also addressed clergy sexual misconduct and have contemplated the appropriate cause of action for such situations. Among these courts, there is a split of authority regarding whether these actions are permissible under the First Amendment. The outcomes of the respective jurisdictions are dependent on whether the court determines that the appropriate cause of action is one for breach of fiduciary duty or is for malpractice. Thus, this article first turns to the doctrinal area of tort, focusing on a comparison of malpractice and breach of fiduciary duty and their respective capacities for compliance with First Amendment prohibitions. This article examines the interpretations and general applications of the religion clauses of the First Amendment with particular focus on prohibitions against sexual misconduct. It engages in a comparison of the judicial treatment of sexual harassment by clergy under Title VII as guidance for treatment of sexual misconduct by clergy. An analogy of religious organizations to families, with regard to a general theory of state intervention in the affairs of religious organizations, further illuminates the importance of this topic. The ultimate purposes of this article are both to find a means of redress for victims of sexual abuse and to assist religious institutions in avoiding becoming an inadvertent refuge for sexual predators.

Supreme Court Strikes Middle Ground on Exactions Test

Abstract In the u.s. Supreme Court case of Dolan v. City of Tigard, the Court focused on what has been for more than three de-cades, a split of authority among the state courts on the rule applicable to exactions.