LOCATION: Rhode Island General Assembly
DOCKET NO.: 94-1453
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Fourth Circuit
CITATION: 516 US 349 (1996)
ARGUED: Nov 06, 1995
DECIDED: Feb 21, 1996
David L. Freeman - Argued the cause for the petitioner
J. Kendall Few - Argued the cause for the respondent
Richard P. Bress - Department of Justice, argued on behalf of the United States, as amicus curiae supporting the respondent
Facts of the case
In 1987, Jack L. Thomas filed an Employee Retirement Income Security Act of 1974 (ERISA) class action against his former employer Tru-Tech, Inc. and D. Grant Peacock, an officer and shareholder of Tru-Tech. Thomas alleged that they had breached their fiduciary duties to the class in administering Tru- Tech's pension benefits plan and sought the benefits due under the plan. The District Court ruled in Thomas's favor, but found that Peacock was not a fiduciary. After the Court of Appeals affirmed and attempts to collect from Tru-Tech failed, Thomas sued Peacock. The District Court, agreeing with Thomas to pierce the corporate veil, entered judgment against Peacock in the amount of the judgment against Tru-Tech. In affirming, the Court of Appeals held that the District Court properly exercised ancillary jurisdiction over Thomas' suit.
Do federal courts possess ancillary jurisdiction over new actions in which a federal judgment creditor seeks to impose liability for a money judgment on a person not otherwise liable for the judgment?
Media for Peacock v. ThomasAudio Transcription for Oral Argument - November 06, 1995 in Peacock v. Thomas
Audio Transcription for Opinion Announcement - February 21, 1996 in Peacock v. Thomas
William H. Rehnquist:
The opinion of the Court in No. 94-1453, Peacock against Thomas will be announced by Justice Thomas.
This is a case in which the successful plaintiff is left to ask what happened to my money.
In 1987, Jack Thomas, no relation, filed an ERISA class action in Federal Court against Tru-Tech, Inc, his former employer and D. Grant Peacock, an officer and shareholder of Tru-Tech. for the benefits due under the corporation's pension benefits plan.
He won the suit against Tru-Tech but lost against Peacock.
Thomas did not collect the judgment while the case was on appeal and Peacock apparently settled many of Tru-Tech's accounts with favored creditors not a lease of whom was himself.
After the appeal, Thomas was unable to collect the judgment from Tru-Tech there being no money, so he filed a new lawsuit against Peacock in Federal Court arguing among other things that the court should pierce the Corporate Veil and hold Peacock personally liable for the judgment that Thomas had won against Tru-Tech.
The District Court agreed with Thomas and the Court of Appeals affirmed.
We took this case decide whether the District Court had jurisdiction over Thomas' second lawsuit.
We hold that it did not.
Because Thomas allege no violation of the Employee Retirement Income Security Act Codiac or of Tru-Tech's long sense terminated plan, and because the ERISA recognizes no stand along cause of action for piercing the Corporate Veil, neither ERISA’s jurisdictional provision nor the general federal question statute supply the District Court with subject matter jurisdiction over the suit.
We also disagree with Thomas’ argument that this action is sufficiently related or ancillary to his original lawsuit.
Though we have approved the exercise of ancillary jurisdiction over a broad range of supplementary proceedings involving third parties to assist in protection and enforcement of federal judgment, we have never authorized the exercise of ancillary jurisdiction in a subsequent lawsuit to transfer liability for an existing federal judgment to a person not already liable for that judgment.
As long as the federal rules protect the judgment creditor's ability to execute on a judgment, the District Court's authority is adequately preserved.
An ancillary jurisdiction is not justified over a new lawsuit to impose liability for judgment on a third party.
Accordingly, the judgment of the Court of Appeals is reversed.
Justice Stevens has filed a dissenting opinion.