United States District Court, D. Idaho
THOMAS E. PEREZ, Secretary of the United States Department of Labor, Plaintiff,
MATTHEW D. HUTCHESON, HUTCHESON WALKER ADVISORS LLC, GREEN VALLEY HOLDINGS LLC, and the RETIREMENT SECURITY PLAN AND TRUST, f/k/a PENSION LIQUIDITY PLAN AND TRUST. Defendants.
ORDER GRANTING SUMMARY JUDGMENT, PERMANENT INJUNCTION
AND DENYING DEFENDANT'S MOTION FOR DECLARATORY
J. Lodge United States District Judge
Secretary of the United States Department of Labor (the
"Secretary") has moved for summary judgment and a
permanent injunction permanently barring Matthew D. Hutcheson
from acting as a fiduciary or service provider under the
Employee Retirement Income Security Act of 1974, 29 U.S.C.
§§ 1001, et seq. ("ERISA") and ordering
Jeanne B. Bryant of Receivership Management, Inc. to continue
to serve as the independent fiduciary to RSPT and the
ERISA-covered plans that RSPT and Hutcheson managed (the
"Plans") (Dkt. 91). Hutcheson was granted an
extension of time to respond and he filed his response on
June 29, 2016. The Secretary filed his reply brief on July
14, 2016. Hutcheson filed a Motion for Declaratory Relief
(Dkt. 105) on July 11, 2016 and that motion is also ripe for
this Court's review.
interest of avoiding further delay, and because the Court
conclusively finds that the decisional process would not be
significantly aided by oral argument, this motion shall be
decided on the record before this Court without oral
argument. Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). Based on
the following findings of facts and conclusions of law, the
Court finds as follows:
Summary Judgment and Permanent Injunction Standard:
legal standards for summary judgment are well-established.
Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477
U.S. 317, 324 (1986); Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247-48 (1986); Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
Secretary has authority to seek relief from breaching
fiduciaries and those who knowingly participate in their
breaches under ERISA sections 409(a) and 502(a)(2) & (5),
29 U.S.C. §§ 1109(a) and 1132(a)(2) & (5), to
restore plan losses, to recover unjust profits and to obtain
other remedial and equitable relief as the court may deem
appropriate. See Herman v. S. Carolina Nat. Bank,
140 F.3d 1413, 1425-26 (11th Cir. 1998); Solis v.
Couturier, No. 08-2732, 2009 WL 1748724 (E.D. Cal. June
19, 2009). Courts have repeatedly found that, under
ERISA's broad remedial provisions, injunctive relief is
appropriate. See, e.g., Donovan v. Mazzola, 716 F.2d
1226, 1238-39 (9th Cir. 1983), cert. denied, 464
U.S. 1040 (1984). Appropriate injunctive relief includes
removing existing plan fiduciaries and appointing independent
fiduciaries to carry out the proper administration and
management of benefit plans. Mazzola, 716 F.2d at
1238-39; Solis v. Vigilance, Inc., No. C-08-05083,
2009 WL 2031767, at *3 (N.D. Cal. July 9, 2009); Chao v.
Zoltrix, No. C-07-00610, 2007 WL 2990429, at *3 (N.D.
Cal. Oct. 11, 2007). It also includes permanent enjoining
breaching fiduciaries from ever serving as fiduciaries or
service providers to ERISA plans. See Chao v.
Malkani, 452 F.3d 290, 293-94 (4th Cir.2006) (breaching
fiduciaries removed from all positions of authority);
Reich v. Lancaster, 55 F.3d 1034, 1054 (5th Cir.
1995); Martin v. Feilen, 965 F.2d 660 (8th Cir.
1992) (finding an abuse of discretion for district court not
to issue injunction barring individuals from providing
fiduciary or other services to ERISA plans); Beck v.
Levering, 947 F.2d 639, 641 (2d Cir. 1991);
Delgrosso v. Spang & Co., 769 F.2d 928, 937 (3d
Findings of Fact:
on the records in this case, the Court finds as follows:
Court has jurisdiction and venue is proper. Hutcheson resides
in Idaho. ERISA § 502(e)(1) & (2), 29 U.S.C.
§§ 1132(e)(1) & (2).
April 10, 2012, Matthew D. Hutcheson was indicted by the
Attorney General of the United States in this Court on wire
fraud theft from employee pension benefit plans.
Shortly before the indictment, Hutcheson and Hutcheson Walker
Advisors LLC ("HWA") had admitted, on an annual
return that ERISA requires to be submitted to the United
States (a document called a "Form 5500"), to having
taken part in a prohibited transaction in violation of ERISA
section 406, 29 U.S.C. § 1106.
Between April 3, 2013, and April 15, 2013, Hutcheson was
tried by a criminal jury in this Court. United States v.
Hutcheson, 1:12-cr-00093-WFN (D. Idaho). In its
case-in-chief, the Attorney General presented 25 witnesses
and over 200 exhibits.
April 15, 2013, the jury returned a verdict finding Hutcheson
guilty beyond a reasonable doubt of 17 felony counts,
including five counts of wire fraud respecting RSPT.
July 31, 2013, the Court sentenced Hutcheson to 210 months of
incarceration and three years of supervised release, during
which time Hutcheson "shall not be employed in any
capacity related to fiduciary duties or financial
transactions nor shall defendant perform any unpaid or
volunteer activities in this area during the term of
supervised release without the permission of the probation
officer." SOF ¶ 11. Hutcheson was also ordered to
repay RSPT (through the Independent Fiduciary) $3, 276, 000.
August 7, 2013, Hutcheson filed a notice of appeal to the
U.S. Court of Appeals for the Ninth Circuit. United
States v. Hutcheson, No. 13-30218 (9th Cir.). Crim. Dkt.
148. Following briefing, on May 7, 2015, the Ninth Circuit
heard oral argument on the appeal. On May 15, 2015, the Ninth
Circuit affirmed this Court's judgment and sentencing. On
June 1, 2015, Hutcheson moved for rehearing. On July 9, 2015,
the Ninth Circuit denied rehearing. App. Dkt. 62. On July 23,
2015, the Ninth Circuit issued its mandate to this Court.
Although Hutcheson continues to maintain in this civil action
there was legal error regarding rulings in his criminal case,
such arguments are not relevant to this civil proceeding and
are rejected based upon the Ninth Circuit's affirmation
of his convictions and sentence. There is no indication in
the record that a writ of certiorari, if requested, was ever
granted so the Court finds all direct appeals have concluded.
Court notes that Hutcheson filed a 28 U.S.C. Section 2255
writ of habeas corpus motion on October 3, 2016.,
Hutcheson v United States, 1:16cv442 (D. Idaho). The
Court does not find the filing of a writ of habeas corpus
does not justify continuing the stay in this matter and the
Court will lift the stay previously entered.
Meanwhile, on November 14, 2013, Green Valley Holdings LLC
("GVH") was administratively dissolved, and, on