United States District Court, W.D. Pennsylvania
R. ALEXANDER ACOSTA, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff,
WPN CORPORATION; RONALD LABOW; SEVERSTAL WHEELING, INC. RETIREMENT COMMITTEE; MICHAEL DICLEMENTE; DENNIS HALPIN; WHEELING CORRUGATING COMPANY RETIREMENT SECURITY PLAN; and SALARIED EMPLOYEES' PENSION PLAN OF SEVERSTAL WHEELING, INC., Defendants.
BARRY FISCHER SENIOR UNITED STATES DISTRICT JUDGE.
NOW, in accordance with the standard governing motions for
summary judgment and upon consideration of the motion for
summary judgment filed by Plaintiff R. Alexander Acosta,
Secretary of Labor, United States Department of Labor
(“DOL”) (Docket No. 178), its brief in support
thereof (Docket No. 185), its concise statement of material
facts with appendix (Docket Nos. 178, 186), and the lack of
response by Defendants Ronald LaBow (“LaBow”) and
WPN Corporation (“WPN”), for the reasons that
follow, IT IS HEREBY ORDERED that said Motion  is
judgment is appropriate when the moving party establishes
“that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a). A genuine dispute of material
fact is one that could affect the outcome of litigation.
Willis v. UPMC Children's Hosp. of Pittsburgh,
808 F.3d 638, 643 (3d Cir. 2015) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The
initial burden is on the moving party to adduce evidence
illustrating a lack of genuine triable issues. Hugh v.
Butler Cnty. Family YMCA, 418 F.3d 265, 267 (3d Cir.
2005) (citing Celotex Corp. v. Catrett, 477 U.S.
317, 323-24 (1986)). Once the moving party satisfies its
burden, the non-moving party must present sufficient evidence
of a genuine issue in rebuttal. Santini v. Fuentes,
795 F.3d 410, 416 (3d Cir. 2015) (citing Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986)). When considering the parties' arguments, the
court is required to view all facts and draw all inferences
in the light most favorable to the non-moving party.
Id. (citing United States v. Diebold, Inc.,
369 U.S. 654, 655 (1962)).
Rule of the United States District Court for the Western
District of Pennsylvania 56(C) requires that a party opposing
summary judgment file a response in opposition within thirty
days. LCvR 56(C). Defendants LaBow and WPN never responded to
the DOL's September 25, 2018 Motion. See (Docket
No. 178). However, where, as here, a party purposefully fails
to respond, Federal Rule of Civil Procedure 56(e)(3) still
requires that the court determine that there are no genuine
disputes of material fact and the movant is entitled to
judgment as a matter of law. See Fed. R. Civ. P.
56(e)(3); United States v. Floyd, Civ. Act. No.
12-1890, 2017 WL 5633203, at *2 (D. N.J. Nov. 21, 2017)
(citing Anchorage Assocs. v. Virgin Islands Bd. of Tax
Review, 922 F.2d 168, 174-78 (3d Cir. 1990)).
moves for summary judgment on the basis of nonmutual
collateral estoppel arguing that the United States District
Court for the Southern District of New York and the Court of
Appeals for the Second Circuit addressed the very issue
before the Court, whether WPN and LaBow breach their
fiduciary duties to the Severstal Trust in violation of
§ 404(a)(1)(A), (B). (Docket No. 185 at 3) (citing
Severstal Wheeling, Inc. Ret. Comm. v. WPN Corp.,
119 F.Supp.3d 240 (S.D.N.Y. 2015); aff'd, 659
Fed.Appx. 24 (2d Cir. 2016)). “[C]ollateral estoppel
applies when ‘(1) the issue sought to be precluded is
the same as that involved in the prior action; (2) that issue
was actually litigated; (3) it was determined by a final and
valid judgment; and (4) the determination was essential to
the prior judgment.'” United States ex rel. Doe
v. Heart Sol., PC, 923 F.3d 308, 316 (3d Cir. 2019)
(quoting In re Graham, 973 F.2d 1089, 1097 n.31 (3d
Cir. 1992)); see Doe v. Hesketh, 828 F.3d 159, 171
(3d Cir. 2016) (citing Paramount Aviation Corp. v.
Agusta, 178 F.3d 132, 145 (3d Cir. 1999)) (explaining a
court looks to federal law principles of collateral estoppel
in determining the preclusive effect of a prior federal court
Court's estimation, the Southern District of New York
addressed all three elements of a § 404(a) violation.
See Sweda v. Univ. of Pittsburgh, 923 F.3d 320,
327-28 (3d Cir. 2019). District Judge Swain found (1) that
WPN and LaBow were fiduciaries pursuant to 29 U.S.C. §
1002(21)(A)(ii); (2) that they breached their fiduciary
duties; and (3) that the Severstal
Plansexperienced a loss as a result of this
breach. Severstal Wheeling, Inc. Ret. Comm., 119
F.Supp.3d at 263-69. Judge Swain entered judgment in the
amount of $15, 016, 327.74 against WPN and LaBow.
Id. at 270. The Second Circuit affirmed, and WPN and
LaBow did not appeal. Severstal Wheeling, Inc., 659
Fed.Appx. 24. Therefore, because the issue sought to be
precluded was previously addressed by the Southern District
of New York and was actually litigated and essential to the
prior final valid judgment, non-mutual offensive collateral
estoppel applies. WPN and LaBow are, thus, precluded from
further litigating these claims. Consequently, the DOL is
entitled to judgment as a matter of law against LaBow and
contends that LaBow and WPN's breach caused between $6,
775, 243 and $7, 823, 373 in damages and seeks a judgment in
that range less any amounts LaBow and WPN already paid.
(Docket No. 185 at 11). The DOL explains that this amount is
less than the amount awarded before the Southern District of
New York because its expert used a more conservative
investment portfolio and it only seeks damages for the period
of November 1, 2008 until May 19, 2009 rather than from
November 3, 2008 until July 16, 2009. (Id.);
Severstal Wheeling, Inc. Ret. Comm., 119 F.Supp.3d
at 268. Given that the DOL has set forth a range of damages
and seeks that any judgment be offset by any unknown amount
already paid by LaBow and WPN, IT IS FURTHER ORDERED that the
DOL file a supplemental brief clearly establishing the legal
and factual basis for any award of damages no later than July
 Specifically, the District Court found
that they breached their duties by designating an
undiversified portfolio for transfer, failing to communicate
that fact to the Severstal Wheeling, Inc. Retirement
Committee, directing the transfer knowing no one would be
managing the assets, failing to liquidate the undiversified
portfolio quickly, and in failing to recommend and implement
a diversified portfolio after November 3, 2009. Severstal
Wheeling, Inc. Ret. Comm., 119 F.Supp.3d at
 The Severstal Plans consist of the
Wheeling Corrugating Company Retirement Security Plan and the
Salaried Employees Pension Plan of Severstal ...