Facts of the Case

In 1987, Jack L. Thomas filed an Employee Retirement Income Security Act of 1974 (ERISA) class action against his former employer Tru-Tech, Inc. and D. Grant Peacock, an officer and shareholder of Tru-Tech. Thomas alleged that they had breached their fiduciary duties to the class in administering Tru-Tech's pension benefits plan and sought the benefits due under the plan. The District Court ruled in Thomas's favor, but found that Peacock was not a fiduciary. After the Court of Appeals affirmed and attempts to collect from Tru-Tech failed, Thomas sued Peacock. The District Court, agreeing with Thomas to pierce the corporate veil, entered judgment against Peacock in the amount of the judgment against Tru-Tech. In affirming, the Court of Appeals held that the District Court properly exercised ancillary jurisdiction over Thomas' suit.

Question

Do federal courts possess ancillary jurisdiction over new actions in which a federal judgment creditor seeks to impose liability for a money judgment on a person not otherwise liable for the judgment?

Conclusion

No. In an 8-1 opinion delivered by Justice Clarence Thomas, the Court held that the District Court lacked jurisdiction over Thomas's subsequent suit. The Court found that neither ERISA's jurisdictional nor the general federal question jurisdictional provision supplied the District Court with subject matter jurisdiction over the suit against the corporate officer. The Court noted that is was unaware of any provision under ERISA for imposing liability under the circumstances for an extant ERISA judgment against a third party. Justice John Paul Stevens, in a dissent, argued that a federal court's jurisdiction encompasses a claim by a judgment creditor that a party in control of the judgment debtor has fraudulently exercised that control to defeat a judgment.