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ERISA Exempt Plans: 1st Circuit

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  • ERISA Exempt Plans: 1st Circuit

    In a recent case from the 1st Cir., the court wrestles with the ramifications of an ERISA exempt "church plan." Plaintiffs originally brought the suit in federal court, claiming federal subject matter jurisdiction under ERISA. The court granted summary judgement for the Defendants on the basis of the "church plan" exception, and the Plaintiff's took no further action for the next five years.
    On November 24, 2014, Torres and Bonilla filed a motion in the district court to set aside the 2009 judgment, invoking the court's authority to vacate a judgment procured by "fraud on the court." Although such an action is recognized in the rules, Fed. R. Civ. P. 60(d)(3), the power of federal courts, both trial and appellate, to set aside or alter prior judgments obtained by fraud antedates the rules' adoption in 1938 and is a long-settled equitable power of the federal courts not constrained by any statute of limitations, Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 244-45 (1944).
    The court very quickly reasons that the Plaintiffs' claim of fraud does not have merit. Ultimately finding:
    Plaintiffs' mainly contend that Banco Popular de Puerto Rico and Bella Vista and their agents committed perjury by denying the existence of an ERISA-covered 401(k) plan and covered up the transfer of funds between the liquidated employee benefits plan and the 401(k) plan. Even assuming the truth of these allegations, "perjury alone . . . has never been sufficient" to constitute "fraud upon the court." George P. Reintjes Co., 71 F.3d at 49. Sorry though one may be about the plight of the plaintiffs, the fraud on the court claim is hopeless. The 2006 litigation is at an end.
    The entire opinion is attached below.
    Attached Files
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