Lucy Dunne v. Elton Corp

CourtCourt of Appeals for the Third Circuit
DecidedSeptember 18, 2024
Docket23-1499
StatusUnpublished

This text of Lucy Dunne v. Elton Corp (Lucy Dunne v. Elton Corp) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lucy Dunne v. Elton Corp, (3d Cir. 2024).

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Nos. 23-1499, 23-1501, 23-1503, 23-1511, 23-1518, 23-1526, 23-1546, 23-1868 & 23- 1869

LUCY DUNNE, REPRESENTATIVE FOR HELENA DUPONT WRIGHT; JAMES MILLS; JOSEPH WRIGHT; T. KIMBERLY WILLIAMS

v.

ELTON CORPORATION; GREGORY FIELDS; FIRST REPUBLIC TRUST COMPANY OF DELAWARE LLC; M.C. DUPONT CLARK EMPLOYEES PENSION TRUST

FIRST REPUBLIC TRUST COMPANY OF DELAWARE LLC; M.C. DUPONT CLARK EMPLOYEES PENSION TRUST

MARY MILLS ABEL SMITH; CHRISTOPHER T. DUPONT; MICHAEL DUPONT; JAMES B. WYETH, SOLELY AS EXECUTOR AND PERSONAL REPRESENTATIVE OF THE ESTATE OF PHYLLIS M. WYETH; KATHARINE D. GAHAGAN

JAMES B. WYETH, SOLELY AS EXECUTOR AND PERSONAL REPRESENTATIVE OF THE ESTATE OF PHYLLIS M. WYETH, Appellant in 23-1499

LUCY DUNNE, Appellant in 23-1501

MARY MILLS ABEL SMITH; KATHARINE D. GAHAGAN, Appellants in 23-1503

ELTON CORPORATION, Appellant in 23-1511 CHRISTOPHER T. DUPONT, Appellant in 23-1518

FIRST REPUBLIC TRUST COMPANY OF DELAWARE LLC, Appellant in 23-1526 & 23-1868

JAMES MILLS, Appellant in 23-1546

LUCY DUNNE, REPRESENTATIVE FOR HELENA DUPONT WRIGHT; JAMES MILLS; MARY MILLS ABEL SMITH; CHRISTOPHER T. DUPONT; JAMES B. WYETH, SOLELY AS EXECUTOR AND PERSONAL REPRESENTATIVE OF THE ESTATE OF PHYLLIS M. WYETH; KATHARINE D. GAHAGAN, Appellants in 23-1869

On Appeal from the United States District Court for the District of Delaware (D.C. Civil Action No. 1-17-cv-00286) District Judge: Honorable Joseph F. Bataillon

Argued July 9, 2024

Before: SHWARTZ, PHIPPS, and MONTGOMERY-REEVES, Circuit Judges.

(Opinion filed: September 18, 2024)

Margherita A. Capolino Caroline English Pascal F. Naples ArentFox Schiff 1717 K Street NW Washington, DC 20006 Counsel for Plaintiff-Appellee James Mills

Elizabeth Hopkins [ARGUED] Susan L. Meter Kantor & Kantor 9301 Corbin Avenue, Suite 1400 Northridge, CA 91324

2 Teresa Renaker Kristen G. Scott Renaker Scott 505 Montgomery Street, Suite 1125 San Francisco, CA 94111 Counsel for Plaintiff-Appellee T. Kimberly Williams

April C. Ishak AC Ishak Law 224 N Washington Street Havre de Grace, MD 21078 Counsel for Third Party-Appellee Lucy Dunne, representative for Helena duPont Wright

Curtis J. Crowther Robinson & Cole 1201 N Market Street, Suite 1406 Wilmington, DE 19801

Linda L. Morkan Robinson & Cole 280 Trumbull Street One Commercial Plaza Hartford, CT 06103

Timothy J. Snyder Young Conaway Stargatt & Taylor 1000 N King Street Rodney Square Wilmington, DE 19801 Counsel for Defendant-Appellee Elton Corp

Melissa D. Hill Morgan Lewis & Bockius 101 Park Avenue New York, NY 10178

Brian M. Killian [ARGUED] James D. Nelson Morgan Lewis & Bockius 1111 Pennsylvania Avenue NW, Suite 800 North Washington, DC 20004

3 Counsel for Defendant-Appellee First Republic Trust Co of Delaware LLC

Myra Benjamin Nixon Peabody 799 9th Street NW, Suite 500 Washington, DC 20001

Charles M. Dyke Nixon Peabody One Embarcadero Center, 32nd Floor San Francisco, CA 94111

David G. Holmes Christopher P. Simon Michael L. Vild Cross & Simon 1105 N Market Street, Suite 901 Wilmington, DE 19899 Counsel for Third Party-Appellees Mary Mills Abel-Smith and Katherine D. Gahagan

Russell L. Hirschhorn Proskauer Rose 11 Times Square New York, NY 10036

John E. Roberts Proskauer Rose One International Place Boston, MA 02110

Jennifer C. Wasson Potter Anderson & Corroon 1313 N Market Street, 6th Floor Wilmington, DE 19801 Counsel for Christopher T. duPont

Anthony F. Shelley [ARGUED] Theresa S. Gee Miller & Chevalier 900 16th Street NW, Suite 900 Washington, DC 20006

4 C. Scott Reese Cooch & Taylor 1007 N Orange Street The Nemours Building, Suite 1120 Wilmington, DE 19801 Counsel for James B. Wyeth, solely as executor and personal representative of the estate of Phyllis M. Wyeth

OPINION

 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent.

5 MONTGOMERY-REEVES, Circuit Judge.

Generosity can be costly. In the 1940s, the matriarch of the duPont family, Mary

Chichester duPont,1 established a trust (the “Trust”) to pay pensions to certain domestic

employees who worked for Mary, her children, or her grandchildren. Mary funded the

Trust with a sizeable grant of stock. But the cost of paying the pensions has ballooned

over the decades, and the Trust is now severely underfunded.

In 2016, T. Kimberly Williams—an employee of Helena duPont Wright, one of

the Grandchildren2—filed a lawsuit alleging that the Trust is an employee benefit plan

covered by the Employee Retirement and Income Security Act of 1974 (“ERISA”).

Among other things, Williams alleged that the current trustee, First Republic Trust

Company of Delaware, LLC (“First Republic”); the former trustee, Elton Corporation

(“Elton Corp.”); and the Grandchildren (collectively, “Appellants”) are liable under

ERISA for the Trust’s underfunding.

Appellants fought every aspect of the lawsuit, including Williams’s constitutional

standing to sue and whether ERISA applies to the Trust. At summary judgment, the

1 For clarity, this Opinion refers to Mary Chichester duPont using her first name. We mean no disrespect. 2 “Grandchildren” refers to the six grandchildren of Mary who are parties to these consolidated appeals: Wright, substituted and represented by her attorney-in-fact, Lucy Dunne; James Mills; Mary Mills Abel-Smith; Christopher T. duPont; the estate of Phyllis M. Wyeth, represented by its executor, James B. Wyeth; and Katharine D. Gahagan.

For clarity, this Opinion refers to Christopher T. duPont using his first name. Again, we mean no disrespect.

6 District Court held that Williams has Article III standing and that the Trust is an

employee benefit plan covered by ERISA. Following a bench trial, the District Court

determined that Appellants violated ERISA; found them jointly and severally liable for

the Trust’s underfunding; and appointed a special master to serve as trustee. This appeal

followed.

For the reasons explained below, we hold that the District Court correctly

determined that Williams has Article III standing, but the District Court erred in holding

that ERISA’s coverage provision is triggered on the facts of this case. Thus, we will

(1) affirm-in-part and reverse-in-part the District Court’s judgment and (2) vacate the

District Court’s order appointing a special master.

I. BACKGROUND

A. The Trust

In 1947, Mary established the Trust to pay pensions to certain employees who

worked for Mary, her children, or her grandchildren.3 Eligible employees were entitled

to an annuity equal to a percentage of the annual compensation that they earned upon

reaching the age of 65 or otherwise becoming eligible for a benefit. Mary funded the

Trust with shares of stock in a holding company that ultimately merged into the

eponymous duPont Company.

3 The Grandchildren were minor children—or not yet born—when Mary established the Trust.

7 Mary recorded her intent in a trust document (the “Trust Document”). Among

other things, the Trust Document named three of Mary’s children as the initial trustees

and empowered the current trustees (or trustee) to pick their successors (or successor).

The Trust Document also vested the trustees (or trustee) with exclusive powers over the

Trust and its assets.

The Trust—which is irrevocable—automatically terminates upon the earlier of

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Lucy Dunne v. Elton Corp, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lucy-dunne-v-elton-corp-ca3-2024.