Peacock v. Thomas, 516 U.S. 349 (1996)

Peacock v. Thomas

No. 94-1453

Argued November 6, 1995
Decided February 21, 1996
516 U.S. 349

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Syllabus

Respondent Thomas filed an Employee Retirement Income Security Act of 1974 (ERISA) class action against his former employer, Tru-Tech, Inc., and petitioner Peacock, a Tru-Tech officer and shareholder, alleging that they had breached their fiduciary duties to the class in administering Tru-Tech’s pension benefits plan, and seeking benefits due under the plan. The District Court entered a money judgment against Tru-Tech upon finding that it had breached its fiduciary duties, but ruled that Peacock was not a fiduciary. Thomas did not execute the judgment while the case was on appeal and, during that time, Peacock settled many of Tru-Tech’s accounts with favored creditors, including himself. After the Court of Appeals affirmed the judgment and attempts to collect it from Tru-Tech proved unsuccessful, Thomas sued Peacock in federal court, asserting, inter alia, a claim for "Piercing the Corporate Veil Under ERISA and Applicable Federal Law." The District Court ultimately agreed to pierce the corporate veil and entered judgment against Peacock in the amount of the judgment against Tru-Tech. The Court of Appeals affirmed, holding that the District Court properly exercised ancillary jurisdiction over Thomas’ suit.

Held: The District Court lacked jurisdiction over Thomas’ subsequent suit. Pp. 352-360.

(a) Neither ERISA’s jurisdictional provision, 29 U.S.C. § 1132(e)(1), nor 28 U.S.C. § 1331 supplied the District Court with subject matter jurisdiction over this suit. The Court rejects Thomas’ suggestion that the suit arose under 29 U.S.C. § 1132(a)(3), which authorizes civil actions for "appropriate equitable relief . . . to re-dress [any] violations . . . of [ERISA] or the terms of [an ERISA] plan." Because Thomas’ complaint in this lawsuit alleged no such violations, he failed to allege a claim for equitable relief. Even if ERISA permits a plaintiff to pierce the corporate veil, such piercing is not itself an independent ERISA cause of action and cannot independently support federal jurisdiction. The District Court erred in finding that he had properly stated such a claim, since ERISA does not provide for imposing liability for an extant ERISA judgment against a third party. Pp. 352-354.

(b) Federal courts do not 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. Although ancillary jurisdiction may be exercised (1) to permit disposition by a single court of factually interdependent claims, and (2) to enable a court to function successfully by effectuating its decrees, Thomas has not carried his burden of demonstrating that this suit falls within either category. First, because a federal court sitting in a subsequent lawsuit involving claims with no independent basis for jurisdiction lacks the threshold jurisdictional power that exists when ancillary claims are asserted in the same proceeding as the claims conferring federal jurisdiction, claims alleged to be factually interdependent with and, hence, ancillary to claims brought in the earlier suit will not support federal jurisdiction over the subsequent suit. In any event, there is insufficient factual or logical interdependence between the claims raised in Thomas’ first and second suits. Second, cases in which this Court has approved the exercise of ancillary enforcement jurisdiction over attachment, garnishment, and other supplementary proceedings involving third parties are inapposite. This case is governed by H. C. Cook Co. v. Beecher, 217 U.S. 497, in which the Court refused to authorize the exercise of ancillary jurisdiction in a subsequent lawsuit to impose an obligation to pay an existing federal judgment on a person not already liable for that judgment. As long as the Federal Rules of Civil Procedure sufficiently protect a judgment creditor’s ability to execute on a judgment, ancillary jurisdiction should not be exercised over proceedings, such as the present, that are new actions based on different theories of relief than the prior decree. Pp. 354-359.

39 F.3d 493, reversed.

THOMAS, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and O’CONNOR, SCALIA, KENNEDY, SOUTER, GINSBURG, and BREYER, JJ., joined. STEVENS, J., filed a dissenting opinion, post, p. 360.