Full opinion text
MEMORANDUM OPINION BARRINGTON D. PARKER, Senior District Judge: This class action suit is brought against U.S. News & World Report magazine (“U.S. News” or “Company”) by a group of its former employees who terminated their employment during the period from 1974 through 1981. The litigation was triggered by the sale, in October 1984, of U.S. News to real estate magnate and developer Mortimer Zuckerman for approximately $176 million. Plaintiffs complain that the stock of the Company, which constituted the corpus of the employee profit-sharing plan, was wrongfully and grossly undervalued for a number of years prior to the sale and that employees who retired during the designated class period are owed unpaid benefits and entitled to damages under various legal theories. The parties have completed substantial pretrial discovery and have filed cross motions for summary judgment. The issues presented are set forth, infra at 1148— 1149. This Memorandum Opinion provides the Court’s ruling on those motions. BACKGROUND In 1962, U.S. News was reorganized to provide, consonant with the wishes of David Lawrence, the magazine’s founder and owner, that employees of the Company would share in its ownership and profits. Accordingly, Articles of Incorporation authorized the issuance of Class A and common stock, each having full and equal voting rights. The employees could not sell or transfer their interests during their employment and upon termination were required to offer them to the Company at values established through mutual agreement or by outside appraisers. The Profit-Sharing Plan of U.S. News (“Plan”), a non-contributory plan, was in existence when the Articles were adopted. By 1967, the Plan had acquired 50,000 shares of Class A stock, which it held throughout the class period. In addition, U.S. News was obligated to make contributions to the Plan. Over the years, the Plan acquired a modest portfolio of investment securities, which was of limited value as compared with the Class A stock. The Plan was managed by a Profit-Sharing Committee (“Plan Committee”), appointed by the Company’s Board of Directors, while its accounts were maintained by a trustee. Each plan participant was allotted an account balance, based upon his salary and term of service. Upon retirement, the participant received payment, either lump sum or periodic, as determined by the appraised value of the Class A stock held by the Plan. Beginning in 1963, a stock bonus plan was adopted which allotted to certain employees common stock known as bonus or anniversary stock. The employee could not sell or encumber the stock, absent Company approval. Upon retirement or termination, each employee was, at the option of U.S. News, required to sell back his shares of stock to the Company. Payments of bonus stock were made every five years, beginning with the fifth year after an employee joined the magazine. The number of shares allotted an employee was based upon his salary and length of service. Together with most of the common stock, the 50,000 shares of Class A stock held by the Plan were placed in a voting trust. This arrangement gave the voting trustees effective control over the management of U.S. News, and placed them in a position where they could elect themselves to the Board and then appoint themselves to the Plan Committee. While Board members were not entitled to participate in the stock bonus plan, beginning in 1968, the Board did award stock to its directors. This stock, carried on the corporate books as debt, represented a right to deferred compensation only, with no voting privileges. The plaintiffs have labeled the shares “phantom stock.” As noted, the amount of benefits that each employee received upon separation hinged upon the value of the Company’s stock. Since there was no market for the stock, U.S. News hired an independent appraiser, defendant American Appraisal Associates (“American Appraisal”), to arrive at a fair value for the shares. Plaintiffs challenge the validity of those appraisals, because, as they allege, U.S. News and American Appraisal worked together to eliminate from the calculation of the Company’s net worth, the value of several parcels of undeveloped real estate held by U.S. News, land which, upon sale of the magazine, added considerably to the price paid per share. The real estate was held by Madana Realty Company, a subsidiary of U.S. News. Plaintiffs also allege that American Appraisal improperly valued the stock in other ways, which are discussed in greater detail, infra at 1170-1173. The original complaint was filed in early 1984. Since then it has undergone several amendments. At this time the defendants are U.S. News and eight former members of its Board of Directors, the Profit-Sharing Plan, American Appraisal, and the Ma-dana Realty Company. To redress what wrongs they feel they suffered at the hands of those defendants, plaintiffs press a variety of statutory and common-law claims. In Count I of the recently filed Fifth Amended Class Action Complaint, U.S. News, the former directors, and American Appraisal are charged with violations of the Securities Exchange Act of 1934. Count II asserts claims for benefits and damages against U.S. News, the director-defendants, American Appraisal, and the Profit-Sharing Plan under various provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). In Counts III, IV, V and VI, U.S. News, the director-defendants, and American Appraisal are sued variously for common law and constructive fraud, breach of fiduciary duty, unjust enrichment, negligence and negligent misrepresentation. Plaintiffs have moved for partial summary judgment against all the defendants on the ERISA claims. The defendants, in turn, have moved for summary judgment on all counts, pleading that the relevant statutes of limitation bar most, if not all, the claims. In addition, U.S. News, the director-defendants, and American Appraisal press a variety of theories according to which they argue that each of the statutory and common-law claims are fatally flawed as a matter of law. Subsequent to the filing of their Fifth Amended Complaint, plaintiffs renewed in substance their earlier filed motion for partial summary judgment. U.S. News, the director-defendants and American Appraisal also filed additional motions for summary judgment directed to the new claims raised by the Fifth Amended Complaint. This Memorandum Opinion will discuss the issues presented by the parties’ several motions in the following order: Part I, pp. 7 to 26, discusses the motions of the defendants challenging the complaint on grounds that it was untimely filed and barred by the relevant statutes of limitations. In part II, pp. 26 to 42, the Court deals with defendants’ motion to dismiss plaintiffs’ securities law claims. Parts III and IV, pp. 43 to 71, are concerned with the parties’ pleadings and representations on the ERISA claims. Part III, pp. 43 to 57 considers defendants’ challenge to the plaintiffs’ claims under ERISA. Part IV, pp. 57 to 70, addresses plaintiffs’ motion for partial summary judgment on those claims. Part V, pp. 70 to 75, discusses ERISA’s preemptive effect on plaintiffs’ common-law claims and Section VI, pp. 75-84, is concerned with whether the defendants are entitled to summary judgment on those claims. ANALYSIS At this stage in the pretrial proceedings, it is not the Court’s task to attempt to resolve the factual issues raised, Rodway v. United States Dep’t of Agriculture, 482 F.2d 722, 727 (D.C.Cir.1973), but merely to determine whether there are indeed material factual issues that need be presented more fully to the ultimate trier of fact. While discovery in this case fills volumes, the Court may not, tempting as it may be to do so, remove the resolution of disputed issues of fact from the fact-finder, in an effort to whittle down the litigation as originally framed. PART I DO THE RELEVANT STATUTES OF LIMITATION BAR PLAINTIFFS’ CLAIMS? A threshold issue presented at this juncture is whether the applicable statutes of limitation bar any or all of plaintiffs’ claims relating to the undervaluation. All of the defendants seize upon this defense. As plaintiffs must concede, the applicable limitations periods would work to bar most or all of their claims unless they have been the victims of fraudulent concealment and were not otherwise on notice of their claims prior to filing suit. Yet because the questions of concealment and notice raise factual issues that vary as to each group of defendants, analysis of the limitations bar must consider the participation of each of the various defendants. Accordingly, the role of U.S. News, its directors and the Profit-Sharing Plan will first be addressed, followed by a consideration of the conduct of American Appraisal. A. AS TO U.S. NEWS, THE DIRECTORS, AND THE PROFIT-SHARING PLAN The Court has already visited the question concerning the extent to which the principals of the Company, its Profit-Sharing Plan, and the other centers of corporate control enjoyed overlapping jurisdictions. See 608 F.Supp. at 1336, 1344. Suffice it to say at this point that there is ample evidence in the record to support a finding that there are disputed issues of fact as to whether a pattern of fraudulent concealment engaged in by the directors may be imputed both to the magazine as a corporate entity and to the Plan. For the present discussion, then, it will be assumed that if the record reveals the presence of factual issues suggesting fraudulent concealment by the magazine’s principals, the statute of limitations will be tolled as to U.S. News and the Plan, as well. 1. Federal Law Claims Before analyzing the factual record, it might be well to set out briefly what is involved in a claim of fraudulent concealment. In a recent ruling on the doctrine, Judge Edwards of our Circuit Court spoke of two situations in which fraudulent concealment may toll the statute of limitations. The first is that in which acts of concealment in addition to the primary wrong are necessary to effect concealment. Hobson v. Wilson, 737 F.2d 1, 33 (D.C.Cir.1984). The second is that in which the concealment is implicit in the nature of the wrong. Id. In a ease in which the defendants have actively concealed the wrong, the statute is tolled until the wrong is actually discovered. Id. at 34 n. 103 (citing Tomera v. Galt, 511 F.2d 504, 510 (7th Cir.1975)). In such a situation, the plaintiff need not exercise due diligence to avail himself of the doctrine of equitable tolling. In the case of “self-concealing” wrongs, the court stresses that due diligence is essential. Id. (citing Wachovia Bank & Trust Co. v. Nat’l Student Marketing Corp., 650 F.2d 342, 349 (D.C.Cir.1980), cert. denied, 452 U.S. 954, 101 S.Ct. 3098, 69 L.Ed.2d 965 (1981)). It is not seriously alleged that any of the defendants engaged in any course of conduct — subsequent to the perpetration of the primary wrongs — designed to conceal those wrongs. The question then is whether the wrongs were indeed “self-concealing,” and not merely such as to innocently evade plaintiffs’ notice. Yet the doctrine of fraudulent concealment has no applicability at all if the plaintiff was on notice of the wrong complained of. Hobson, 737 F.2d at 35. Notice means one of two things. First, a plaintiff is on notice of a particular cause of action when he is apprised of facts unique to that cause of action. Second, a plaintiff will be considered on inquiry notice if he has not “exercise[d] due diligence in conducting [an] inquiry” upon knowledge of facts short of those that would give rise to a cause of action. Id. at 35 n. 107. In other words, while a prospective plaintiff does not have to file suit on a hunch, id. at 39, once his suspicions have been aroused, once he has perceived some degree of injury, he is put under a duty to exercise due diligence to inquire further as to a possible claim. As a final note before considering the factual record, it is recognized that a court should be wary of granting summary judgment where, as here, issues of fraud, notice, intent, and the like are present. See generally 10A Wright, Miller & Kane, Federal Practice and Procedure: Civil § 2730 at 246-55 (1983). It is also recognized that to sustain their burden, defendants must show that there is no genuine issue of material fact in dispute and that they are entitled to judgment as a matter of law, Perry v. Block, 684 F.2d 121, 126 (D.C.Cir.1982), even when the facts, and all inferences to be drawn therefrom, are seen in the light most favorable to the nonmoving party. Weisberg v. United States Dep’t of Justice, 627 F.2d 365, 368 (D.C.Cir.1980). With this in mind, two undisputed facts are noted at the outset. The first is that on each Voting Trust Certificate, was a written notice advising the holder of his right to demand a second appraisal of the U.S. News stock. Second, under Delaware corporation law the plaintiffs had access to the appraisal reports prepared by American Appraisal and filed with agencies of that state. Both of these facts go to the issue of whether plaintiffs were diligent in their efforts to uncover matters surrounding defendants’ alleged wrong-doing. But before assessing the plaintiffs’ diligence, it is necessary first to determine whether there are undisputed facts indicating either that plaintiffs were on actual notice of the alleged wrongful acts or at least were on inquiry notice. While plaintiffs contend that they did not know of facts surrounding any wrongful undervaluation of the U.S. News stock until May 1983 (when its value rose dramatically) or December 1983 (when it was announced that the magazine was to be sold), defendants argue that plaintiffs had long been on notice of the valuation techniques alleged to have been most wrongful — the minority-interest valuation of the stock and the low value placed on the real estate. Defendants also maintain that the appraisal reports, which plaintiffs claim were withheld and which contained essential information, were not critical to bringing the suit, since the plaintiffs did not have such reports or information even when they filed their complaint. What defendants overlook, however, is that prior to 1983, plaintiffs could only have garnered information that might have put them on notice of their claims from the reports, or from scattered remarks made by directors of the Company. The question that remains, then, is whether the plaintiffs learned or could have learned anything during the class period that would have put them on actual or inquiry notice as to any potential claim. Defendants adduce the transcript of the April 8, 1974, annual shareholder luncheon, PX 37, as a prime example of the kind of notice plaintiffs received regarding the valuation of U.S. News’ stock. At this luncheon, Chairman John Sweet described the way in which American Appraisal valued U.S. News’ stock, comparing the stock’s earnings and dividend-paying capacities to those of publicly-traded companies in similar businesses. Defendants argue that this disclosure put plaintiffs on notice that U.S. News’ stock was being valued according to a minority interest, because it was being compared to that of companies whose stock necessarily was being valued (by the market) on a minority-interest basis. Mr. Sweet also mentioned at the time that the real estate was carried on the books at approximately one-third of its true value. PX 37, Q & A at 12. In response, plaintiffs contend that this was totally inadequate and insufficient: that (1) they cannot be charged with knowing the significance of comparisons between U.S. News’ stock with that of publicly-traded companies; that (2) in any case, Sweet’s remarks could not be interpreted to mean that the real estate was valued by American Appraisal at one-third of value, because American Appraisal issued no reports for the years 1971 through 1973 and because Sweet had no personal knowledge of the valuation techniques used by American Appraisal; and that (3) in those and subsequent years, American Appraisal was not kept informed of U.S. News’ real estate development plans. To be sure, Mr. Sweet’s personal knowledge of the appraisal methods utilized by American Appraisal is irrelevant to whether plaintiffs would have been put on notice of a potential claim if they had heard and absorbed what was said at the 1974 shareholder luncheon. Similarly, what American Appraisal knew with respect to U.S. News’ nascent plans for developing its real estate holdings says nothing about what plaintiffs knew. The issue is, rather, whether plaintiffs understood that American Appraisal was not using the true value of the real estate in valuing the U.S. News stock. Taking a somewhat broader view, it seems inappropriate on a motion for summary judgment to impute notice, on the basis of a few remarks made at a shareholder luncheon. What percentage of employees attended the luncheons is far from clear from the record; however, it is clear that attendance was limited to holders of anniversary stock, employees who had worked at the magazine for at least five years. It was not open to employees by virtue of their participation in the Plan. At least one deposed class representative testified that he attended only some of the luncheons. Theobald Deposition at 53-57. He further testified that he did not review prepared transcripts of those meetings, because he felt discouraged from doing so by the conditions under which they were to be viewed. Given such testimony, the Court is not prepared to hold that what defendants adduce as clear, undisputed evidence of notice stands out from the rest of the record with such clarity as to sweep aside other evidence to the contrary. What plaintiffs knew about the relationship between the valuation of the Company’s stock and the appreciation of its real estate is hardly illuminated by the fragmented deposition testimony cited by defendants. At one point in his August 10, 1984 deposition, class-plaintiff Edward Cas-tens testified that he was aware of a dramatic increase in the value of the real estate holdings, and that because of this appreciation, he believed he was not paid adequate retirement benefits. Id. at 18-19. However, it is not clear from context whether Mr. Castens is testifying that now, looking back upon the historic increase in land values in the area, he believes he was underpaid, or whether he knew then that the appreciation in the real estate was not reflected in the valuations performed by American Appraisal. The only seemingly clear testimony that defendants adduce to impute notice comes from plaintiff Richard Theobald: Q. [Y]ou had a question as to whether the value of the stock accurately reflected the value of the real estate? A. I did. Q. And you had that question when, in the ’60s and early ’70s? A. Yes, all those years when things [developments in the area] were happening. Theobald Deposition, August 10, 1984, at 41. Yet in the same deposition, Mr. Theo-bald testified that he did not know how the real estate was in fact valued and, hence, could not really know whether the U.S. News stock was undervalued as a result of any misappraisal. Id. at 45. It is precisely this kind of record that prompts caution in granting summary judgment when issues of notice are raised. Of course, ignorance of a potential claim is not enough to toll the Statute. Rather, plaintiffs’ ignorance must have been caused in some way by fraudulent activity on the part of defendants. While not clearly instances of concealment, information given out by U.S. News can, at least in certain circumstances, be said to fit plaintiff’s characterization of it as “disinformation.” One example of an ambiguous or misleading disclosure occurred at the 1981 annual shareholder luncheon, PX 42, when an employee asked whether the stock would be revalued once development was on track. Chairman Sweet answered that it would, PX 42, Q & A at 49-50, and in so doing may have given the impression that the stock value generally tracked the progression of U.S. News’ real estate development plans. Again in a 1980 memorandum to employees, Sweet mentioned the favorable impact that development would likely have on the employees’ Plan accounts, without revealing that a study conducted by the law firm of Arnold & Porter valued the real estate holdings at $37.5 million, PX 82 at 5, as opposed to American Appraisal’s figure of $4.6 million, PX 20 at 13; that a development contract was soon to be closed; and finally, that certain downward adjustments were made by American Appraisal to further lower the value attributed to the property. Other instances of apparent misconduct involved the 1978 and 1980 year-end appraisals, PX 17, 20. Plaintiffs allege in connection with the 1978 appraisal that a vice president of an American Appraisal division telephoned U.S. News in March of 1979, giving a per share value estimate prior to the performance of an appraisal for that year. A letter of April 13, 1979 confirms that conversation. That estimated value was then apparently given to the appraiser who later undertook the valuation of the U.S. News stock. The worksheets of the appraiser indicate, at that least upon initial examination, he worked backwards from the estimated value to arrive at an “appraised” value. When questioned about this procedure, the appraiser admitted that he worked backwards in this fashion, Marshall Deposition, August 7, 1984, at 440, and further testified that a figure that he arrived at using the normal appraisal methodology was not used, because the prior estimate had already been released. Id. at 191-92. The 1980 year-end appraisal raises similar questions. Notes taken by the appraiser during the course of an interview of U.S. News officials in connection with the appraisal seem to support plaintiffs’ allegation that U.S. News and American Appraisal fixed a range within which any valuation should fall. While it is unclear how awareness of this “negotiated” figure affected the subsequent appraisal, see Marshall Deposition at 585, such a collaboration between the defendants raises serious doubts as to the independence enjoyed by American Appraisal and the care with which it conducted the valuations of U.S. News’ stock. While the conduct of the two goes primarily to the merits of plaintiffs’ claims, such conduct also speaks to the issue of concealment. If the appraisals were improperly conducted and if such impropriety was not apparent from the face of the appraisal reports, the misappraisals would constitute self-concealing wrongs. See Fink v. Nat’l Savings & Trust Co., 772 F.2d 951, 957-58 (D.C.Cir.1985); Hobson, 737 F.2d at 41. Finally, to support their allegations that the Company followed a policy of limited disclosure of information to its employees, plaintiffs adduce a December 10, 1980 memorandum written by Chairman Sweet to certain management personnel, PX 319. The memorandum was circulated as a cover sheet for the December 10, 1980 memorandum sent to employees notifying them that the Company’s real estate development plans might, at some time in the future, favorably affect their retirement benefits. The cover memorandum instructs the magazine’s managers not to discuss further with the employees any relationship between U.S. News’ real estate development plans and the valuation of its stock. While not dispositive, the memorandum certainly suggests behavior and an attitude on the part of senior U.S. News management consistent with fraudulent concealment. Still, the inquiry is not quite over. To the extent that plaintiffs complain of self-concealing wrongs, they were bound to exercise due diligence in trying to discover their causes of action as soon as was practicable. While most of the plaintiffs have been deposed as saying that they did not ask to see an appraisal report nor sought reappraisal, at least one plaintiff testified that he “likely” asked to see an appraisal report during the class period. Theobald Deposition at 60-61. From plaintiffs’ failure to ask for the reports, one might infer, not that plaintiffs were inattentive, but either (1) that plaintiffs were not on notice of any possible wrong-doing, or (2) that they believed that a request for such information would be unavailing. In view of the conflicting evidence in the record, the Court is compelled to find that there are material issues of fact as to whether plaintiffs exercised the requisite diligence. 2. Common-Law Claims Whether the common-law claims asserted by plaintiffs are time-barred is a question that must be resolved according to District of Columbia law. Preliminarily, those claims must be segregated into two classes: those predicated upon negligence and those presupposing intentional conduct. In the first class are the claims for negligence, negligent misrepresentation, and “constructive” fraud; in the second, claims for unjust enrichment, breach of fiduciary duty, and fraud. Those claims falling into the second category pose no special problem. While to be charged under District of Columbia law with fraudulent concealment a defendant must have engaged in some affirmative act to perfect that concealment, “any statement, word or act which tends to suppress the truth raises the suppression to that level.” William J. Davis, Inc. v. Young, 412 A.2d 1187, 1192 (D.C.App.1980) (citations omitted). A pattern of conduct that would “lull the plaintiff into inaction” would be sufficient to constitute such concealment. Id. at 1192 & n. 15. A pattern of such conduct may very well have prevented the plaintiffs in this case from filing suit earlier; as the Court’s discussion of equitable tolling as to the federal claims should make clear, the record is simply not unequivocal one way or the other. Those claims sounding in negligence appear at first to fall outside the doctrine of equitable tolling. It seems paradoxical to argue that an actor accused of negligent— inattentive — conduct could have engaged in that conduct in such a way as to intentionally conceal evidence of his negligence. Yet with regard to their negligence claims, plaintiffs may avail themselves of the “discovery” doctrine. That doctrine comes into play in situations in which plaintiff has relied upon the representations or expertise of one more knowledgeable and in which the plaintiff’s injury was such that it was not readily discernible. See Ehrenhaft v. Malcolm Price, Inc., 483 A.2d 1192, 1201-02 (D.C.App.1984). Ehrenhaft applied the doctrine to a case involving architectural malpractice; other cases have applied it to legal malpractice. See, e.g., Byers v. Burleson, 713 F.2d 856, 860 (D.C.Cir.1983) (applying District of Columbia law); Weisberg v. Williams, Connolly & Califano, 390 A.2d 992, 996 & n. 8 (D.C.App.1978). The instant case certainly raises issues of fact as to whether plaintiffs relied upon the judgments of the U.S. News management. That the resultant injury was latent rather than manifest is also hotly in dispute. In such a situation, summary judgment is not appropriate. Conclusion Given that material issues of fact are raised as to whether U.S. News, the director-defendants, and the Plan, through its principals, engaged in a pattern of fraudulent concealment, and as to whether plaintiffs were on actual or inquiry notice of potential claims and, if on inquiry notice, whether they exercised due diligence in following through on their suspicions, the Court will not grant these defendants summary judgment as to the statute of limitations with respect to any of the claims advanced by plaintiffs. Defendants, of course, are free to renew the issue at an appropriate time during the trial on the merits. B. AS TO AMERICAN APPRAISAL 1. Federal Law Claims Unlike the other defendants, American Appraisal engaged in conduct not so easily characterized as fraudulent. And if American Appraisal’s conduct does not amount to fraudulent concealment, no amount of fraudulent concealment on the part of any other actors will toll the Statute as to that defendant. “The purpose of the doctrine of fraudulent concealment is to prevent a party from profiting from his own wrong, so that one who conceals facts to prevent the timely commencement of a lawsuit is estopped from pleading that defense.” Greenfield v. Kanwit, 87 F.R.D. 129, 132 (S.D.N.Y.1980). Accord Powell v. Radkins, 506 F.2d 763, 765 n. 5 (5th Cir.1975), reh. denied, 509 F.2d 576, cert. denied, 423 U.S. 873, 96 S.Ct. 140, 46 L.Ed.2d 104 (1975); Cato v. So. Atlantic & Gulf Coast Dist. of Int’l Longshoremen’s Ass’n, 364 F.Supp. 489, 493 (S.D.Tex.1973), aff'd, 485 F.2d 583 (5th Cir.1973). Plaintiffs have maintained throughout— in both their pleadings and oral presentations — that U.S. News and American Appraisal engaged in a conspiracy of unspecified dimensions, as to both time and nature. To be sure, any concealment by U.S. News would also toll the statute as to American Appraisal, if indeed the concealment was effected in furtherance of a conspiracy. Greenfield, 87 F.R.D. at 132. While the care and precision with which American Appraisal performed its function may be open to question, the record does not reveal or suggest anything in the nature of a conspiracy between the two save with regard to the 1978 and 1980 appraisals. Accordingly, if the statute is to be tolled as to American Appraisal, it is because of its own acts of concealment. Except for those years, plaintiffs would be hard pressed to demonstrate that American Appraisal engaged in any acts of concealment. In the first place, it was not that company’s responsibility to see that its reports were distributed to the U.S. News employees. Its responsibility was ended when the reports were transmitted to the Board of Directors. More importantly, as conceded by counsel for the class at oral argument, American Appraisal consistently disclosed its appraisal methodology in its reports. Transcript of Motions Hearing of October 16, 1985, at 16. For every year that American Appraisal rendered appraisals, the reports indicated what weight, if any, was being given to the Company’s real estate holdings and that it was valuing the Company’s stock on a minority-interest basis, as well as discounting the stock’s value because of its non-marketability. As indicated previously, the appraisals conducted for the years 1978 and 1980 give the Court pause. It may well be that in those years, American Appraisal, acting together with U.S. News, intentionally undervalued the magazine’s stock to the detriment of the U.S. News employees. And as discussed above, such conduct, not revealed on the face of the appraisal reports, may indeed constitute a self-concealing wrong, so as to toll the statute. 2. Common-Law Claims For the most part, what has been said with regard to the common-law claims brought against the other defendants applies as well to American Appraisal. Those claims, such as that for common-law fraud, predicated upon intentional conduct survive by virtue of the doctrine of equitable tolling as it exists in the District of Columbia. Because no claim for negligence or negligent misrepresentation may be brought against American Appraisal, see discussion infra, the Court need not reach the issue of whether those claims are time barred. Conclusion The question then arises as to what claims, absent evidence of fraudulent concealment, are barred. For those claims founded upon breach of fiduciary duty, such as the claims advanced against American Appraisal, ERISA provides for a six-year limitations period, except that a three-year period applies when the plaintiff has actual notice. ERISA § 413, 29 U.S.C. § 1113. Accordingly, since plaintiffs were not on notice of any potential claim against American Appraisal, even though the latter was guilty of no fraudulent concealment, as to any years other than 1978 and 1980, no claim accruing prior to February 28, 1978 may be brought against that defendant under Section 502(a)(3) of ERISA. Since the applicable limitations period for the securities law claims is two years, no such claim may be brought against American Appraisal, except for those accruing in 1978 and 1980. Finally, with respect to the common-law counts, claims may be brought against American Appraisal for fraud, but only with respect to the 1978 and 1980 appraisals. PART II ARE DEFENDANTS ENTITLED TO SUMMARY JUDGMENT ON PLAINTIFFS’ SECURITIES LAW CLAIMS? Since their initial February 1984 complaint, plaintiffs have charged U.S. News, the directors and American Appraisal with violations of Section 10(b) of the Securities Exchange Act of 1934 (“Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 of the Securities and Exchange Commission (“SEC”), 17 C.F.R. § 240.10b-5 (“Rule”). They maintain that U.S. News and its directors intentionally and fraudulently depressed the value of the magazine’s stock and, through misstatements and omissions in communications with U.S. News employees, concealed material facts underlying that undervaluation. That course of conduct, argue plaintiffs, resulted in significant loss to their interests in both the Profit-Sharing and stock bonus plans. Further, American Appraisal, having allegedly assisted U.S. News in undervaluing the magazine’s stock, is charged with aiding and abetting the other defendants in their commission of securities fraud. In their motions for summary judgment, all defendants contend that plaintiffs’ interests in the Profit-Sharing Plan were not “securities” within the meaning of the Act and the Rule. Even if those interests, along with the stock bonus interests, could be termed “securities,” defendants maintain that there was no causal nexus between their conduct and plaintiffs’ alleged injuries. Finally, American Appraisal insists that it cannot be held liable as an aider and abettor and that, consequently, the securities count must be dismissed as to it. A. CLAIMS AGAINST U.S. NEWS AND THE DIRECTOR-DEFENDANTS 1. Application of Securities Law to the Profit-Sharing Plan Defendants assert, as a threshold matter, that plaintiffs’ interests in the Profit-Sharing Plan were not “securities” within the meaning of the Act and the Rule. Section 3(a)(10) of the Act, 15 U.S.C. § 78c(a)(10), defines “security” to include “any ... certificate of interest or participation in any profit-sharing agreement or ... investment contract_” While plaintiffs maintain that their former interests in the Plan were “interest[s] ... in [a] profit-sharing agreement,” and hence fall squarely within the definitional language of the Act, defendants counter that interests in the Plan can only be characterized as interests in an “investment contract.” Even under the latter characterization, argue defendants, plaintiffs’ Plan interests failed to qualify as “securities” under the test enunciated by the Supreme Court in International Bhd. of Teamsters v. Daniel, 439 U.S. 551, 99 S.Ct. 790, 58 L.Ed.2d 808 (1979). In Daniel, the Supreme Court had occasion to examine the possible coverage under the securities laws of the type of employee profit-sharing plan at issue here. In analyzing the plan presented in Daniel, the Court began by noting that a “certificate of interest ... in [a] profit-sharing agreement” is essentially the equivalent of an “investment contract.” 439 U.S. at 558 n. 11, 99 S.Ct. at 796 n. 11. See also Tanuggi v. Grolier, Inc., 471 F.Supp. 1209, 1213 n. 5 (S.D.N.Y.1979); SEC Release No. 33-6188, 45 Fed.Reg. 8960, 8963 (1980). And since such a plan is an “investment contract,” interest in the plan will be deemed securities only if “the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others.” 439 U.S. at 558, 99 S.Ct. at 795 (applying the test of Securities and Exchange Commission v. W.J. Howey Co., 328 U.S. 293, 301, 66 S.Ct. 1100, 1104, 90 L.Ed. 1244 (1946)). In applying the Howey test to the plan at issue there, the Court in Daniel found that neither the “investment” nor “expectation of profits” prongs of that test were met. The U.S. News Plan fares no better. To be deemed an investor, one must “cho[ose] to give up a specific consideration in return for a separable financial interest with the characteristics of a security.” 439 U.S. at 559, 99 S.Ct. at 796 (citations omitted). In holding that no such investment had been made in Daniel, the Court found that the employees there were “selling [their] labor primarily to obtain a livelihood, not making an investment.” Id. at 560, 99 S.Ct. at 797. In other words, because the employees received, in return for their labor, an “indivisible compensation package,” part of which included pension benefits, they could not be said to have made an investment, for neither did the compensation package as a whole exhibit “the characteristics of a security,” nor did the employees’ individual decisions “to accept and retain covered employment” have any direct relationship “to perceived possibilities of a future pension.” Id. The analysis mandated by Daniel compels a similar finding here. The U.S. News employees simply did not “invest” in the Plan when they began service with the Company. Receipt of Plan benefits — as measured by the value of the Plan assets— was merely an incident of employment. Moreover, participants in the Plan could be said to have “chosen” Plan participation only to the extent that they could have forgone receipt of benefits entirely. Such a “choice” lacks the element of voluntariness characteristic of an investment decision. See SEC Release No. 33-6188, 45 Fed.Reg. at 8964 & n. 44. Taking its cue from Daniel, the SEC has issued a number of interpretive pronouncements limiting the coverage under the securities laws of employee pension plans. First, no plan in which participation is not voluntary and to which employees do not contribute is covered under the securities laws. SEC Release No. 33-6188, 45 Fed. Reg. at 8961. “[T]he determination of whether a plan is a voluntary, contributory one rests solely on whether the participating employees can decide at some point whether or not to contribute their own funds to the plan.” SEC Release No. 33-6281, 46 Fed.Reg. 8446, 8447 (1981). In no way can it be said that plaintiffs contributed to the Plan, much less that any contribution was voluntary. Even if one were to conclude that plaintiffs somehow “invested” in the Plan, they did not do so with any expectation of profits “derived from the entrepreneurial or managerial efforts of others,” as required by Daniel. 439 U.S. at 561, 99 S.Ct. at 797. The Daniel Court compared the amount of income derived from the investment of the plan assets with the amount represented by employer contributions. Id. at 562, 99 S.Ct. at 797. The latter amount ($153 million) was sufficiently larger than the former ($31 million) to support a finding that the success of the plan was largely due, not to the efforts of the plan managers, but to sources of income “over which the plan itself ha[d] no control....” Id. Further, enjoyment of plan benefits was dependent upon an “employee’s effort to meet the vesting requirements, rather than the fund’s investment success.” Id. To that extent, the participating employee could not be said to have been looking to the plan for a “return” on “some hypothetical investment.” Id. An application of the “expectation of profits” prong of the Daniel analysis also leads the Court to conclude that plaintiffs’ Plan interests were not securities. The health of the Plan was in no wise due to the entrepreneurial skill of its managers. First, the Plan managers were not free to trade the U.S. News stock held by the Plan. Even if they were, any appreciation in the value of the stock would have been due, not to their efforts, but to the success of the Company as a whole. While the Plan did maintain a portfolio of investment securities, income from these — no matter how well managed — was not a great enough factor in the Plan’s overall financial health to satisfy Daniel. Finally, just as in Daniel, a vesting period prevented an employee from obtaining any immediate or direct return on his investment. See O’Neill v. Marriott Corp., 538 F.Supp. 1026, 1031 (D.Md.1982). To clear up any doubt that the securities laws were not meant to cover a pension or profit-sharing plan such as the one here, the Daniel ruling noted that, in enacting ERISA, Congress was filling what it thought to be a regulatory void. 439 U.S. at 569-70, 99 S.Ct. at 801-02. If the securities laws had already extended their coverage to employee benefit plans, the enactment of large portions of ERISA would have been otiose. 2. Application of Securities Law to the Stock Bonus Plan It is problematic whether the same analysis that compelled a finding that plaintiffs’ interests in the Profit-Sharing Plan were not securities applies as well to their bonus stock holdings. At least one post-Daniel decision casts doubt upon whether interests in any employee stock option plan may be considered securities. Bauman v. Bish, 571 F.Supp. 1054, 1064 (N.D.W.Va.1983). Bauman however, is not controlling, and this Court declines to follow its reasoning. In examining whether a securities claim could be pressed in connection with an Employee Stock Ownership Plan (“ESOP”), the Bau-man court found that the plan was more “a method of deferring income” than an arrangement whereby employees invested in employer securities. Id. Moreover, because the plan was covered by ERISA, the court felt compelled by the Daniel decision to hold that the plan was consequently not covered by the securities laws. Id. at 1064-65. The U.S. News stock bonus plan, in contrast, is not an ERISA plan, so that extension to it of coverage under the securities laws would do violence to no Congressional purpose. And to the extent that the U.S. News plan is not designed as “a method of deferring income,” it can be argued that the bonus stock was awarded upon “the giving up [of] some tangible and definable consideration,” id., within the meaning of the Howey test. More importantly, the Howey test was designed to determine whether a particular financial arrangement is an “investment contract” within the meaning of Section 3(a)(10) of the Act, 15 U.S.C. § 78c(a)(10). Daniel, 439 U.S. at 558, 99 S.Ct. at 795. It is not argued that the stock bonus plan is an investment contract, and hence invocation of the Howey test to preclude a securities claim with respect to that plan is inap-posite. What a participant in the stock bonus plan had were voting trust certificates which were redeemable as stock at the termination of the participant’s employment, should the magazine decline its option to repurchase the stock represented by the certificates. In that eventuality, the participant would hold a stock certificate, with which he could do as he wished. Looking then at the plain language of the statute, Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 756, 95 S.Ct. 1917, 1935, 44 L.Ed.2d 539 (1975), cited in Daniel, 439 U.S. at 558, 99 S.Ct. at 795, it would appear that interests in the U.S. News stock bonus plan represent either “stock” or “voting-trust certificates” within the meaning of the securities laws. 3. Presence of an “Investment Decision” as to the Resale of Bonus Stock Even if plaintiffs’ bonus stock interests are securities, a claim under the Act or the Rule can only be maintained if some action or inaction on defendants’ part influenced the resale of the stock. Simply stated, defendants contend that, because plaintiffs were required, upon retirement, to offer their holdings to the magazine, any wrongs that defendants may have committed were either not “material” to or not “in connection with” a sale or purchase of securities within the purview of the securities laws. Defendants are correct, of course, in stressing that, to survive dismissal, plaintiffs must demonstrate a causal connection between their resale of bonus stock and defendants’ allegedly deceptive practices. Securities and Exchange Commission v. Savoy Industries, Inc., 587 F.2d 1149, 1171 (D.C.Cir.1978), cert. denied sub nom. Zimmerman v. SEC, 440 U.S. 913, 99 S.Ct. 1227, 59 L.Ed.2d 462 (1979); Chemical Bank v. Arthur Andersen & Co., 726 F.2d 930, 943 & n. 23 (2d Cir.1984); Securities and Exchange Commission v. Wall Street Pub. Instit., Inc., 591 F.Supp. 1070, 1088 (D.D.C.1984); Coons v. Kidder, Peabody & Co., Inc., 539 F.Supp. 1145, 1147 (S.D.N.Y.1982). Defendants argue that such a link cannot be demonstrated where a plaintiff employee is required to offer his shares back to his employer, citing Coons, 539 F.Supp. at 1148; Ryan v. J. Walter Thompson Co., 322 F.Supp. 307, 313 (S.D.N.Y.), aff'd, 453 F.2d 444 (2d Cir.1971) (per curiam), cert. denied, 406 U.S. 907, 92 S.Ct. 1611, 31 L.Ed.2d 817 (1972). Plaintiffs reply that, even though the magazine had an option to buy back each employee’s stock, each employee nevertheless made an “investment decision” in deciding when to retire. Accordingly, they place great reliance upon Ayres v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 538 F.2d 532 (3d Cir.), cert. denied, 429 U.S. 1010, 97 S.Ct. 542, 50 L.Ed.2d 619 (1976). In Ayres, the court held that, because he alleged that he would have postponed retirement had he known of certain facts, the plaintiff’s case was distinguishable from that of Ryan. 538 F.2d at 537. In response, defendants argue that Ayres has been widely criticized and maintain that none of the Foltz plaintiffs has asserted that he would not have retired when he did had he known of the facts at the basis of the present suit. As to defendants’ factual premise, the record is to the contrary. Some plaintiffs were asked, in the course of their respective depositions, only to state why they left the magazine, not whether they would have stayed on if they had known additional facts. Others were asked whether, knowing at the time of their retirement what they know now, they would have altered their plans; at least some responses were in the affirmative. Defendants’ legal premise, that Ayres is not good law, is equally dubious. Two cases cited by defendants as criticizing Ayres do so without analysis. Ayres has, in fact, been cited with approval by a number of courts. See, e.g., Trecker v. Scag, 679 F.2d 703, 709 & n. 13 (7th Cir.1982) (plaintiffs, had they known of certain facts, could have sued for redemption of shares under buy-back provision); Grigsby v. CMI Corp., 590 F.Supp. 826, 830-31 (N.D.Cal.1984). Moreover, as the dissent in Ayres notes, the defendant there had an unfettered option to repurchase plaintiff’s stock for any reason upon 90-days’ notice, not only upon plaintiff’s retirement. 538 F.2d at 540 (dissenting opinion). In the instant case, U.S. News had no greater option than that focused upon by the majority in Ayres —an option to repurchase an employee’s stock upon his retirement. While the Ayres court may have erred in reaching the conclusion it did based upon the facts before it, which error has occasioned all the criticism, the principle for which Ayres stands is still perfectly good law. Accordingly, this Court holds that a plaintiff, who asserts that he would have deferred retirement pending a hoped-for increase in the value of his stock holdings, makes out a claim under Section 10(b) of the 1934 Act. B. CLAIMS AGAINST AMERICAN APPRAISAL Plaintiffs charge American Appraisal with securities law violations by asserting that the company aided and abetted the primary violations committed by U.S. News. There are three elements essential to liability under this theory: (1) commission by another of a primary violation; (2) scienter, or a “general awareness” on the part of the accused “that his role was part of an overall activity that was improper”; and (3) knowing and substantial assistance in the commission of the primary violation. Investors Research Corp. v. Securities and Exchange Commission, 628 F.2d 168, 178 (D.C.Cir.), cert. denied, 449 U.S. 919, 101 S.Ct. 317, 66 L.Ed.2d 146 (1980). The first of these elements has already been considered; plaintiffs have successfully stated a claim against U.S. News for violation of Section 10(b) of the 1934 Act as to the stock bonus plan. Still remaining, then, are questions of scienter and substantial assistance. The precise contours of plaintiffs’ claims against American Appraisal are not as clear as they might be. The other defendants have been variously charged with misrepresenting or failing to disclose (1) the market value of the U.S. News real estate holdings; (2) the use of a minority-interest valuation and marketability discount; (3) the awards of phantom stock; and (4) the plaintiffs’ right to seek reappraisal. Even with a generous view of the pleadings, it is hard to see how American Appraisal could have aided U.S. News and the director-defendants in such allegedly broad-based schemes to defraud plaintiffs. In light of the Court’s analysis of the statute of limitations issue, it should be clear that the last two charges of misrepresentation and nondisclosure had nothing to do with the work performed by American Appraisal and cannot form the predicate of an aiding and abetting charge. As to the first two, the Court has examined the appraisal reports prepared during the class period and has discovered, contrary to plaintiffs’ assertions, that all the improprieties complained of by plaintiffs — if, indeed, any part of American Appraisal’s methodology could be said to be improper — were adequately disclosed in the appraisal reports, with the exception of those involving the years 1973 and 1974, when detailed reports were not prepared. The degree to which the information contained in the appraisal reports was further disseminated to the U.S. News employees was simply not American Appraisal’s responsibility. And as discussed infra, the possibly inadequate disclosure in some years of certain information does not, as a matter of law, amount to the type of fraudulent conduct proscribed by Section 10(b) and Rule 10b-5. To the extent that it adequately disclosed the information surrounding the appraisal process and real estate valuation, American Appraisal is for the most part immunized from Rule 10b-5 liability. The lower court opinions in Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1977), opinions which were not disturbed on review by the Supreme Court, support this conclusion. Both the trial and appellate courts in Santa Fe found that the appraiser could not be held liable under the Rule, since its role was limited to preparing an appraisal report and did not involve any participation in the underlying wrong. 391 F.Supp. 849, 854 (S.D.N.Y.1975); 533 F.2d 1283, 1291-94 (2d Cir.1976). Whether American Appraisal is guilty of wrongdoing in connection with the preparation of any of its reports depends upon what level of scienter will support an aiding and abetting charge. Where the party charged as an aider and abettor owes the plaintiff a fiduciary duty, the standard of scienter has been held to be one of “recklessness.” Frankel v. Wyllie & Thornhill, Inc., 537 F.Supp. 730, 743 (W.D.Va.1982) (citing Woodward v. Metro Bank of Dallas, 522 F.2d 84, 97 (5th Cir.1975); Sundstrand Corp. v. Sun Chemical Corp., 553 F.2d 1033, 1044-45 (7th Cir.1977); IIT v. Cornfeld, 619 F.2d 909, 923 (2d Cir.1980)). Pointing to the Appraisers’ Code of Ethics, plaintiffs urge the court to find that a general fiduciary duty is imposed on appraisers in the performance of their duties. In so doing, plaintiffs seem to be suggesting that the court ignore the prior case law cited supra, as well as applicable Department of Labor regulations defining a fiduciary under ERISA. See 29 C.F.R. §§ 2509.75-5, 2510.3-21(c)(1)(ii) (1984). Absent a fiduciary duty running from the party to be charged with aiding and abetting and the party so charging, the assistance rendered the primary violator must have been both “substantial” and “knowing.” Investors Research Corp., 628 F.2d at 178. Accord Woodward, 522 F.2d at 95; Frankel, 537 F.Supp. at 744. Undaunted, plaintiffs valiantly attempt to bootstrap into that standard a duty of care premised only upon negligence. Since American Appraisal “knew” that its reports were deficient, the argument runs, it “knowingly” aided and abetted the other defendants in perpetrating their allegedly fraudulent schemes. Regardless of the validity of the premise — that the reports were deficient and that American Appraisal knew as much — the syllogism constructed here by plaintiffs does not support the conclusion reached. “Knowing assistance” means just that: that the party charged (1) has knowingly undertaken certain actions, (2) which it knows will provide (3) assistance to the party committing the primary violation. To hold otherwise would emasculate the standard, see Investors Research Corp., 628 F.2d at 177, by confusing a general awareness of one’s actions with purposive conduct. Even if American Appraisal prepared its reports negligently, it cannot be held to have participated in a fraud upon retiring employees of U.S. News. Nevertheless, there are two instances in which American Appraisal might be said to have knowingly assisted in a violation of the securities laws. The Court has already observed that, with respect to the 1978 and 1980 year-end appraisals, there are present material issues of fact as to whether that defendant engaged in purposive conduct that would form the predicate of a cause of action sounding in fraud. And since fraudulent conduct forms the kernel of a Rule 10b-5 violation, it follows that plaintiffs should be able to assert at trial an aiding and abetting claim against American Appraisal in connection with reports prepared for those years. Conclusion For the foregoing reasons, plaintiffs will be able to assert a securities claim against U.S. News and the director-defendants insofar as it relates to undervaluation of plaintiffs’ bonus stock holdings. In addition, an aiding and abetting claim properly lies against American Appraisal in connection with the stock bonus plan, but only as it arises out of the 1978 and 1980 year-end appraisals. PART III ARE DEFENDANTS ENTITLED TO SUMMARY JUDGMENT ON PLAINTIFFS’ ERISA CLAIMS? Plaintiffs have asserted claims arising under ERISA against the Profit-Sharing Plan, U.S. News, the director-defendants and American Appraisal. Their claim against the Plan is limited, as it must be, to recovery of benefits due. Against the remaining defendants plaintiffs seek compensatory and punitive damages for what they charge were breaches of fiduciary duty, imposed by ERISA, in connection with the alleged undervaluation of the Company’s stock. In voicing their opposition to plaintiffs’ claims, defendants underscore two issues involving the application of ERISA to this litigation. The first presented is whether the stock bonus plan is a “pension plan” within the meaning of ERISA. The second requires a determination as to whether the Supreme Court’s recent decision in Massachusetts Mutual Life Ins. Co. v. Russell, — U.S.-, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985), bars plaintiffs’ claim for damages under Section 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3), for defendants’ alleged breaches of fiduciary duty. In addition, American Appraisal contends that, even if Russell does not bar a suit against fiduciaries for damages under § 502(a)(3), it is not a fiduciary within the meaning of ERISA, nor can an action be maintained against it as a non-fiduciary. A. COVERAGE UNDER ERISA OF THE STOCK BONUS PLAN U.S. News, the director-defendants, and American Appraisal all argue that ERISA offers plaintiffs no relief for alleged wrongs committed in connection with the stock bonus plan, because the Act simply does not cover such plans. In particular, defendants note that the stock bonus plan does not fit within ERISA’s definitional framework. The plan quite clearly is not an “employee welfare benefit plan,” ERISA § 3(1), 29 U.S.C. § 1002(1), nor does it seem to be an “employee pension plan.” Under ERISA, § 3(2), 29 U.S.C. § 1002(2), an “employee pension plan” is defined as one that (i) provides retirement income to employees, or (ii) results in a deferral of income by employees extending to the termination of covered employment or beyond, regardless of the method of calculating the contributions made to the plan, the method of calculating the benefits under the plan or the method of distributing benefits from the plan. The applicable Department of Labor regulations offer further clarification: [T]he terms “employee pension benefit plan” and “pension plan” shall not include payments made by an employer to some or all of its employees as bonuses for work performed, unless such payments are systematically deferred to the termination of covered employment or beyond, or so as to provide retirement income to employees. 29 C.F.R. § 2510.3-2(e) (1984) (emphasis added). In support of their argument that the stock bonus plan is covered by ERISA, plaintiffs assert that the U.S. News plan does defer the income to its employees and that such deferral is effected by the requirement that the bonus stock be redeemed only upon retirement or separation. In response, defendants argue first that, since the stock awards were made to employees at regular intervals and were based upon services rendered by the employees, they were essentially current compensation and, hence, not the kind of deferred or retirement income contemplated by ERISA. In support of that proposition, defendants cite Murphy v. Inexco Oil Co., 611 F.2d 570, 575 (5th Cir.1980), a case involving a plan in which employees received discretionary awards of royalties from the employer’s oil and gas revenues. In holding that the royalties were not pension benefits, the Inexco court stressed that the payments were made annually to the employees as the company received revenues. 611 F.2d at 575. The difference between that plan and the U.S. News plan, of course, is that U.S. News paid its employees in stock, redeemable only upon separation. But cf. Jervis v. Elerding, 504 F.Supp. 606 (C.D.Cal.1980) (in-kind payments not covered by ERISA). In arguing that the resale restrictions placed on the bonus stock are not sufficient to qualify the plan for ERISA coverage, defendants note that the stock awards were taxable to the employees upon receipt. Hence, they contend the awards could not have been a form of deferred compensation. Whether the tax treatment of the plan is controlling is unclear, but defendants urge the court’s reliance upon it in the absence of other controlling precedent. Conclusion From analysis of the authorities advanced by the parties and after consideration of the statutory definitions and regulations, the Court accepts defendants’ position that the stock bonus plan is not covered by ERISA. B. AVAILABILITY OF SECTION 502(a)(3) AS A REMEDY 1. Liability of U.S. News and the Director-Defendants While not relied upon in their initial and earlier complaints, Section 502(a)(3) of ERISA plays a dominant role in plaintiffs’ Fifth Amended Complaint and in their summary judgment memoranda. Not deterred by the ruling in Russell that plan beneficiaries cannot recover “extracontractual” damages from fiduciaries under Section 409, 29 U.S.C. § 1109, plaintiffs seize upon the Court’s failure to indicate whether the recovery of “extracontractual” damages was similarly barred under Section 502(a)(3). In this connection, the Court’s opinion in Russell merits fuller discussion. Essentially, the Court' ruled in Russell that extracontractual recovery could not be secured because any recovery, at least under Section 409(a), necessarily inured to the plan itself, and not to any beneficiaries of the plan. — U.S. at-,-, 105 S.Ct. at 3089-90, 3092. In other words, because a beneficiary cannot recover damages for a fiduciary’s derelictions under that section, a b