Jordan v. Michigan Conference of Teamsters Welfare Fund, 207 F.3d 854 (6^th Cir. 2000); 2000 FED App. 0105P (6th Cir.)-This opinion addressed whether the "prohibited transaction" provision contained in 29 U.S.C. § 1106(a)(1) would prohibit a class of plaintiffs (fund participants) from remitting their attorneys' fee award pursuant to a settlement agreement to an alleged "party in interest."  The International Brotherhood of Teamsters (IBT), had supported the plaintiffs' suit.  The Fund did not challenge the amount or reasonableness of the fee award, but were apparently irked when Plaintiffs' affidavits disclosed the Teamsters' role in financing the litigation.  The district court agreed with Defendants that any payment ultimately remitted to the IBT would constitute a prohibited transaction under ERISA, and therefore held that the award could not include money that the IBT had advanced to Plaintiffs' counsel.

This court reversed, finding no evidence of a "prohibited transaction."  The court pointed out that the Congressional intent of section 29 U.S.C. § 1106(a)(1) was to prohibit transactions benefiting other parties to the plan’s detriment.  Here, IBT would not receive a "benefit" since the transaction was, in effect, merely a repayment of money IBT had spent in support of plaintiffs' suit.  "In recognizing that the IBT is a party in interest here, the proper focus of the analysis is whether there is intent to benefit the IBT.  We find . . . there is no such intent."

            This court also disagreed with the district court's interpretation of 29 U.S.C. § 1108(b).  This court stated that (even if plaintiff has proved a violation under 29 U.S.C. § 1106), 29 U.S.C. § 1108 "serves as an exception to the prohibitions set forth under § 406. [29 U.S.C. § 1106]"  The transaction at issue was thus permissible under 29 U.S.C. § 1108, since that section says that 29 U.S.C. § 1106 prohibitions will not apply to reasonable arrangements with a party in interest for legal services.