The opinion of the court was delivered by: ZIEGLER
In their original complaint, plaintiffs allege that Equibank breached certain fiduciary obligations subsequent to the effective date of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq., in the following particulars: (1) improvidently purchasing and disposing of numerous securities; (2) failing to employ appropriate and reasonable investment techniques; (3) failing to fully disclose the nature of its acts; (4) failing to properly account to the plans; and (5) imprudently acquiring and disposing of various long-term securities. Jurisdiction under the original complaint is predicated on section 502 of ERISA, 29 U.S.C. § 1132 (1974).
On January 4, 1980, plaintiffs amended their complaints to allege that Equibank breached its fiduciary obligations to each plan prior to the effective date of ERISA in the precise manner as outlined above.
Jurisdiction over the pre-ERISA or state claims is predicated on pendent jurisdiction.
Presently before the court is the motion of Equibank to dismiss the pre-ERISA claims for want of subject matter jurisdiction. Equibank contends that (1) the court lacks the constitutional power to adjudicate these claims, and (2) assuming such power to exist, the court should exercise its discretion and decline to accept jurisdiction. For the reasons set forth herein, the motion will be denied.
It is undisputed that, pursuant to 29 U.S.C. §§ 1132 and 1144, a federal district court has "exclusive jurisdiction" over all causes of action relating to any employee benefit plan covered by ERISA and which accrue subsequent to January 1, 1975. Cowan v. Keystone Employee Profit Sharing Fund, 586 F.2d 888 (1st Cir.1978); Martin v. Bankers Trust Co., 565 F.2d 1276 (4th Cir.1977). Thus, "§ 1144 . . . precludes federal jurisdiction over any cause of action arising from an "independent, actionable, event' . . . that occurred prior to January 1, 1975." Cowan v. Keystone Employee Profit Sharing Fund, supra at 894.
Plaintiffs urge, however, that this court should adjudicate the pre-ERISA claims under the doctrine of pendent jurisdiction since that doctrine enables a federal court to "hear a jurisdictionally insufficient claim which is linked to a jurisdictionally sufficient claim." Lentino v. Fringe Employee Plans, Inc., 611 F.2d 474, 478 (3d Cir.1979). Pendent jurisdiction springs from the interest of the federal judiciary and the litigants in disposing of federal and state claims in one suit. Rosado v. Wyman, 397 U.S. 397, 405, 90 S. Ct. 1207, 1214, 25 L. Ed. 2d 442 (1970).
In United Mine Workers v. Gibbs, 383 U.S. 715, 86 S. Ct. 1130, 16 L. Ed. 2d 218 (1966), the Supreme Court described those situations in which a federal court possesses the constitutional power to exercise pendent jurisdiction, and the Court of Appeals for the Third Circuit ably summarized the test in Lentino v. Fringe Employee Plans, Inc., supra :
Federal courts have the constitutional power to exercise pendent jurisdiction when the state and federal claims derive from a common nucleus of operative fact, such that the plaintiff would ordinarily be expected to try them all in one judicial proceeding, and when the federal claim has sufficient substance to confer subject matter jurisdiction on the court.
611 F.2d at 478. (Emphasis in original.) It is plain that, even if our power to exercise such jurisdiction is extant, our inquiry does not end as "pendent jurisdiction is a doctrine of discretion, not of plaintiff's right." United Mine Workers v. Gibbs, supra, 383 U.S. at 726, 86 S. Ct. at 1139.
The constitutional power to adjudicate pendent claims must be determined by reference to the pleadings, and not by facts that may be established. Lentino v. Fringe Employee Plans, Inc., supra at 478. The test is two-pronged: (1) Has the plaintiff alleged a substantial federal claim? and (2) Do the state and federal claims derive from a common nucleus of operative fact, so that a plaintiff would ordinarily be expected to try both claims in one proceeding?
In the instant case, plaintiffs have alleged a substantial federal claim. Section 3(21)(A) of ERISA defines a fiduciary as a person who "exercises any discretionary authority or discretionary responsibility" in the management or administration of a plan. 29 U.S.C. § 1002(21)(A) (1976). Section 409 of the Act creates liability for breach of a fiduciary duty. 29 U.S.C. § 1109. Section 404 defines the standard of care which a fiduciary must exercise "with respect to a plan." 29 U.S.C. § 1104. The original complaint charges that Equibank is a fiduciary and breached its obligations to the respective plans in a number of particulars. Clearly, it cannot be said ...