United States District Court, S.D. Mississippi, Southern Division
THOMAS JONES, JOSEPH CHARLES LOHFINK, SUE BEAVERS, RODOLFOA REL, and HAZEL REED THOMAS, on behalf of themselves and others similarly situated PLAINTIFFS
KPMG LLP and TRANSAMERICA RETIREMENT SOLUTIONS CORP. DEFENDANTS and MARTHA EZELL LOWE, individually and on behalf of a class of similarly situated employees CONSOLIDATED PLAINTIFF
MEMORANDUM OPINION AND ORDER DENYING MOTION TO
GUIROLA, JR. UNITED STATES DISTRICT JUDGE.
THE COURT is the  Motion to Dismiss filed by Defendant
KPMG LLP. The plaintiff Martha Ezell Lowe has responded, and
KMPG has replied. After due consideration of the issues
presented and the relevant law, it is the Court's opinion
that the plaintiff has stated a viable claim against KPMG.
Accordingly, the Motion will be denied.
putative class action arose out of the alleged under-funding
of the Singing River Health System Employees' Retirement
Plan and Trust. Lowe has sued KPMG, the company that audited
the annual financial statements of Singing River Health
System (SRHS) and the Plan. Lowe alleges that KPMG was either
aware of the fact that SRHS had stopped contributing to the
Plan, or in the alternative, it recklessly disregarded the
fact that SRHS had made no contribution to the pension plan
since 2009. (Compl. 5, ECF No. 5.) Plaintiff alleges that
despite this knowledge, KPMG's audit report for 2011
attributed SRHS's growing pension liability to “a
downturn in investment returns and a change in actuarial
assumptions” rather than SRHS's failure to make the
required payments to the pension plan. (Id.) Lowe
also alleges that KPMG provided consulting services related
to the $70 million purchase of a new electronic record
retention system that allegedly contributed to SRHS's
inability to fund the Plan. (Id. at 6.) The sole
claim against KPMG is that it “knowingly participated
in and/or aided and abetted in a breach of fiduciary duty by
the Individual Trustees” in its 2010 and 2011 audit
reports by allowing or failing to correct misleading
statements that attributed the Trust's under-funding to
returns on investments and changed actuarial assumptions.
(Id. at 14.)
challenges the legal sufficiency of this claim, arguing that
1) no Mississippi court has ever recognized a claim of aiding
and abetting breach of fiduciary duty; 2) even if there were
such a claim, the plaintiff's allegations of KPMG's
inaction do not rise to the level of aiding and abetting
liability; and 3) in any event, the claim is barred by
Mississippi's three-year statute of limitations.
plaintiff responds that her claim should be construed as an
aiding and abetting breach of trust claim, which Mississippi
common law recognizes. She further argues that the applicable
limitations period for her claim is one year from her receipt
in November 2014 of a memo sent to plan participants, as set
out in the Mississippi Uniform Trust Code, Miss. Code Ann.
The Legal Standard
considering a motion to dismiss under Rule 12(b)(6), the
Court must accept all well-pleaded facts as true and view
those facts in the light most favorable to the plaintiff.
Bustos v. Martini Club Inc., 599 F.3d 458, 461 (5th
Cir. 2010). However, “[f]actual allegations must be
enough to raise a right to relief above the speculative
level.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007). “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Twombly, 550 U.S. at 570).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. Whether this standard
has been met is “a context-specific task that requires
the reviewing court to draw on its judicial experience and
common sense.” Id. at 679.
Aiding and Abetting
parties agree that no Mississippi court has recognized a
cause of action for aiding and abetting breach of fiduciary
duty. However, a federal district court made an Erie
guess that if presented with the question, Mississippi courts
would find that a claim of aiding and abetting fraud exists.
Dale v. Ala Acquisitions, Inc., 203 F.Supp.2d 694,
700-01 (S.D.Miss. 2002). The court reasoned that 1)
Mississippi has held a right of action exists for civil
conspiracy, which is a tort set out in the Restatement
(Second) of Torts § 876; and 2) a majority of
jurisdictions have recognized a claim for aiding and abetting
under § 876(b). Following the Dale decision,
another district court assumed without deciding that
Mississippi would recognize the tort of aiding and abetting
civil conspiracy under § 876(b). Fikes v. Wal-Mart
Stores, Inc., 813 F.Supp.2d 815, 822 (N.D. Miss. 2011).
Restatement provision at issue, § 876(b), concerns
giving substantial assistance or encouragement to
another's breach of duty. This describes the
plaintiff's common law claim, whether it is called aiding
and abetting breach of fiduciary duty or aiding and abetting
breach of trust. Accordingly, the Court will assume, as in
Dale, that Mississippi would recognize a cause of
action for breach of fiduciary duty under the Restatement
(Second) of Torts § 876(b).
The Statute of Limitations
argues that even if Mississippi would recognize
plaintiff's cause of action for aiding and abetting, the
claim was brought after the three-year statute of limitations
expired. The plaintiff filed her Complaint on
February 18, 2015. (ECF No. 5.) The allegation against KPMG