Case: 13-15155 Date Filed: 04/17/2014 Page: 1 of 4
[DO NOT PUBLISH]
CORRECTED OPINION
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-15155
Non-Argument Calendar
________________________
D.C. Docket No. 1:04-cv-02592-ODE
DENNIS SMITH,
Individually and on behalf of all others similarly
situated,
Plaintiff - Appellant,
JACKLIN TOMA,
Consol. Plaintiff,
IVONNE BERMUDEZ,
Intervenor Plaintiff,
versus
DELTA AIR LINES INC.,
GERALD GRINSTEIN,
LEON PIPER,
ADMINISTRATIVE COMMITTEE OF DELTA AIR LINES, INC.,
BENEFIT FUND INVESTMENT COMMITTEE, et al.,
Case: 13-15155 Date Filed: 04/17/2014 Page: 2 of 4
Defendants - Appellees,
PERSONNEL & COMPENSATION COMMITTEE, et al.,
Defendants.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(April 17, 2014)
Before HULL, MARCUS and DUBINA, Circuit Judges.
PER CURIAM:
This appeal involves a putative class action brought under the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.,
against defendants Delta Air Lines, Inc. and the fiduciaries of a benefit plan
offered by Delta to its employees that provided for investment in Delta stock.
Dennis Smith, the class representative, is a former Delta employee who
participated in the Plan and lost money when the price of Delta stock declined
between 2000 and 2004.
In March 2006, the district court dismissed Smith’s complaint for failure to
state a claim. While an appeal of that decision was pending, this court decided
Lanfear v. Home Depot, Inc., 679 F.3d 1267 (11th Cir. 2012), which clarified the
legal standard for evaluating ERISA claims against plan fiduciaries arising out of
2
Case: 13-15155 Date Filed: 04/17/2014 Page: 3 of 4
investments in employer stock as envisioned in an employee stock ownership
program (“ESOP”). Because the district court did not have the benefit of Lanfear
when it issued its order, we remanded the case with instructions to apply Lanfear
to Smith’s complaint. The district court complied with our mandate and applied
Lanfear to the allegations in Smith’s complaint and once again concluded that
Smith had failed to state a claim. It is from that order of dismissal that Smith
perfects this appeal.
The district court’s grant of a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6) is reviewed de novo. See Edwards v. Prime, Inc. 602 F.3d
1276, 1291 (11th Cir. 2010). The allegations in the complaint must be taken as
true and construed in the light most favorable to the plaintiff. Id. Dismissal for
failure to state a claim is proper if the factual allegations are not “enough to raise a
right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555, 127 S. Ct. 1955, 1965 (2007). “[O]nly a complaint that states a
plausible claim for relief survives a motion to dismiss.” Ashcroft v. Iqbal, 556 U.S.
662,679, 129 S. Ct. 1937, 1950 (2009).
After reviewing the record and reading the parties briefs, we conclude that
the district court correctly applied the highly deferential abuse of discretion
standard as set forth in Lanfear to the allegations contained in Smith’s complaint.
Lanfear, 679 F.3d at 1279. The Lanfear standard applies to fiduciaries of ESOP
3
Case: 13-15155 Date Filed: 04/17/2014 Page: 4 of 4
plans as well as other ERISA plans that “encourage or require investment in
employer stock.” Id. at 1278 n.14. Here, the Plan required defendants to offer a
Delta Common Stock Fund as an investment option for participants’ voluntary
contributions and required that company matching contributions be made in Delta
stock. We agree with defendants that at the very least, the Plan’s many provisions
addressing investments in Delta stock made clear that defendants were
“encouraged” to offer employer stock as an investment option for participants.
That is all that is required to bring this case within the scope of Lanfear.
Although it is uncontroverted that during the period in question Delta faced
business challenges, the Plan required defendants to offer participants investments
in Delta stock, and defendants continued to abide by those provisions. Smith
contends that with the benefit of hindsight, defendants should have known Delta’s
turnaround efforts would fail. But that was not at all obvious at the time, as
underscored by market movements during the class period. Because a reasonable
fiduciary could have concluded that investments in Delta stock during the class
period remained appropriate, Smith’s prudence claim fails.
Accordingly, for the reasons stated above, as well as those contained in the
district court’s well-reasoned order filed on November 1, 2013, we affirm the
judgment of dismissal.
AFFIRMED.
4