Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

The Ninth Circuit affirmed the district court's grant of summary judgment in an Employee Retirement Income Security Act (ERISA) action challenging the denial of plaintiff's request for early retirement benefits. Plaintiff argued that the Board incorrectly interpreted the Plan to deny his application for benefits.The panel held that any procedural irregularities in the Board's actions were minor and, at most, the Board's actions weigh only slightly and weakly in favor of holding that an abuse of discretion occurred here. The panel also held that the Board did not abuse its discretion by interpreting "performance of services in any capacity in the Electrical Industry" to include working for the union. In this case, in light of Tapley v. Locals 302 & 612 of Int'l Union of Operating Eng'rs-Emp'rs Const. Indus. Ret. Plan, the panel held that the Board's interpretation did not clearly conflict with the Plan's language; did not render any other Plan provision nugatory; and did not lack a rational nexus to the Plan's purpose. Therefore, the Board's interpretation of the Plan was reasonable. View "O'Rourke v. Northern California Electrical Workers Pension Plan" on Justia Law

The DOL brought suit under the Employee Retirement Income Security Act (ERISA) for breach of fiduciary duties and self-dealing by City National in administering City National's employee profit-sharing plan. The Ninth Circuit affirmed the district court's order as to liability and held that City National engaged in prohibited self-dealing under section 406(b) of ERISA by setting and approving its own fees from Plan assets for serving as its own recordkeeper. Furthermore, such conduct was not exempt under section 408(c)(2) as reasonable compensation for services provided by a fiduciary such as recordkeeping services.In regard to damages, the panel affirmed in part and reversed in part, holding that the loss associated with a prohibited transaction is at least the entire cost of the prohibited transaction. In cases where the fiduciary has engaged in self-dealing, the panel has previously held that the "entire cost" of the transaction is the total amount of the illegal compensation that the fiduciary paid itself. Therefore, the district court correctly determined that the expenses were City National's burden to prove and any doubts related to damages should be resolved in the DOL's favor. In this case, no reasonable jury could find in favor of City National given the paucity of the evidence demonstrating that the additional offsets represent expenses actually incurred by CNB in servicing the Plan. View "Acosta v. City National Corporation" on Justia Law

Three small employers in Montana filed suit against health insurance companies, alleging claims under the Employee Retirement Income Security Act of 1974 (ERISA), as well as state law claims based on defendants' representations. The Ninth Circuit affirmed the district court's dismissal of plaintiffs' ERISA claims and held that plaintiffs failed to state a claim for breach of fiduciary duty under 29 U.S.C. 1132(a)(2) where defendants did not exercise control over plan assets when charging or spending the allegedly excessive premiums.However, the panel reversed the district court's dismissal of plaintiffs' state law claims and held that ERISA did not expressly preempt state-law claims against an insurer that did not bear on an ERISA-regulated relationship. Furthermore, the state law claims were not barred by conflict preemption. The panel reversed the district court's dismissal with prejudice of the state-law claims so that plaintiffs may amend their complaint to state the fraud allegations with greater particularity. View "The Depot, Inc. v. Caring for Mountanans, Inc." on Justia Law

The Ninth Circuit affirmed the district court's judgment against Quad in an action brought under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA). In this case, after the last of Quad's employees voted to decertify the union as their bargaining representative, Quad completely withdrew from the fund. The panel held that the Fund correctly applied the partial withdrawal credit pursuant to 29 U.S.C. 1386(b) against Quad's complete withdrawal liability before calculating the twenty-year limitation on annual payments provided for in 29 U.S.C. 1399(c)(1)(B). View "GCIU-Employer Retirement Fund v. Quad/Graphics, Inc." on Justia Law

Scott Brain, a former trustee of the Trust Funds, and the Cook Defendants appealed the district court's entry of judgment against them in a civil enforcement action by the Secretary of the Department of Labor for violations of the Employee Retirement Income Security Act (ERISA).The Ninth Circuit affirmed in part and held that the district court did not err in concluding that Brain violated ERISA section 510 by retaliating against a whistleblower. The panel vacated and reversed in part and held that the district court erred in concluding that Brain breached his fiduciary duty in violation of ERISA section 404 by placing the whistleblower on administrative leave. The panel also held that the district court erred in basing the permanent injunction on ERISA section 409; ERISA section 502(a)(5) did not provide an alternative basis for the district court's permanent injunction; the district court did not err in determining that the Cook Defendants were not immune under the attorney immunity doctrine; and the Cook Defendants' remaining arguments were meritless. View "Acosta v. Brain" on Justia Law

A former employee and participant in Intel’s retirement plans sued the company for allegedly investing retirement funds in violation of ERISA section 1104. The district court dismissed the action as untimely, concluding that the employee had the requisite “actual knowledge” to trigger ERISA’s three-year limitations period, 29 U.S.C. 1113(2). The Ninth Circuit reversed. A two-step process is followed in determining whether a claim is barred by section 1113(2): the court isolates and defines the underlying violation on which the plaintiff’s claim is founded; the court then inquires whether the plaintiff had “actual knowledge” of the alleged breach or violation. Actual knowledge does not mean that a plaintiff had knowledge that the underlying action violated ERISA, nor does it merely mean that a plaintiff had knowledge that the underlying action occurred. The defendant must show that the plaintiff was actually aware of the nature of the alleged breach more than three years before the plaintiff’s action was filed. In an ERISA section 1104 case, the plaintiff must have been aware that the defendant had acted and that those acts were imprudent. Disputes of material fact as to the plaintiff’s actual knowledge precluded summary judgment. View "Sulyma v. Intel Corp. Investment Policy Committee" on Justia Law

Providers filed a class action in state court alleging that GHC violated the Washington Consumer Protection Act by using the Milliman Care Guidelines for mental healthcare coverage. After GHC removed to federal court, the district court denied Providers' motion to remand and granted a motion to dismiss in part. The district court then declined to exercise supplemental jurisdiction over Providers' claims as to GHC's administration of non-Employee Retirement Income Security Act (ERISA) plans, and remanded that part of the case back to Washington state court.The Ninth Circuit reversed, holding that Providers' claims did not fall within the scope of, and so were not completely preempted by, section 502(a)(1)(B) of ERISA. The panel reversed the district court's exercise of subject matter jurisdiction in dismissing these claims, and remanded with instructions for the district court to return the entirety of this action to the Washington superior court. View "Hansen v. Group Health Cooperative" on Justia Law

Nevada Senate Bill 223, which limits damages that can be collected from general contractors and imposed notification requirements on contractors and welfare benefit plans, was a legitimate exercise of Nevada's traditional state authority and was not preempted by the Employee Retirement Income Security Act (ERISA).The Ninth Circuit vacated the district court's grant of summary judgment to plaintiffs. Determining that the appeal was not moot, the panel held that SB 223 was not preempted because it did not intrude on any federally regulated field, conflict with ERISA's objectives, or otherwise impermissibly relate to ERISA plans. Rather, SB 223 targeted an area of traditional state concern—debt collection—and pared back a state-conferred entitlement to collect unpaid debts from third-party general contractors. Therefore, SB 223 was a legitimate exercise of Nevada's traditional state authority. View "Board of Trustees of the Glazing Health and Welfare Trust v. Chambers" on Justia Law

Current and former employees of the University of Southern California may not be compelled to arbitrate their collective claims for breach of fiduciary responsibility against USC in an action under the Employee Retirement Income Security Act (ERISA). The Ninth Circuit affirmed the district court's denial of USC's motion to compel arbitration of claims for breach of fiduciary duty in the administration of two ERISA plans. The panel held that the district court properly denied USC's motion to compel arbitration where the claims asserted on behalf of the Plans in this case fell outside the scope of the arbitration clauses in individual employees' general employment contracts. View "Munro v. University of Southern California" on Justia Law

A company must assume the unpaid withdrawal liability of its predecessor to a multiemployer pension plan if it was on constructive notice of potential withdrawal liability. The Ninth Circuit reversed the district court's judgment for plaintiffs in an action under the Multiemployer Pension Plan Amendment Act (MPPAA). The panel held that congressional purpose, the liberal remedial construction of the MPPAA adopted in previous cases, the adoption of a constructive notice standard in other contexts, and the practical realities of asset purchases all support a conclusion that constructive notice of withdrawal liability is sufficient to trigger successor withdrawal liability under the MPPAA. Applying a constructive notice standard in this case, the panel held that Amstar had constructive notice because a reasonable purchaser would have discovered Ohana's withdrawal liability. View "Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan" on Justia Law