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

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

The Ninth Circuit reversed the district court's judgment for MetLife in an Employee Retirement Income Security Act (ERISA) action. MetLife denied coverage because plaintiff's leg injury was complicated by his diabetes. The panel held, however, that plaintiff was entitled to coverage because his diabetes did not substantially cause his leg injury from an automobile accident nor did diabetes contribute to his injury. Accordingly, the panel remanded for further proceedings. View "Dowdy v. Metropolitan Life Insurance Co." on Justia Law

The Ninth Circuit affirmed the district court's dismissal of an action under the Employee Retirement Income Security Act (ERISA). In this case, employee benefit trust funds sought unpaid contributions owed under the contracts governing the benefit plans that the trust funds managed for Accuracy Glass & Mirror Company. The panel held that plaintiffs' claims were foreclosed by Bos v. Bd. of Trustees (Bos I), 795 F.3d 1006 (9th Cir. 2015), which held that employers are not fiduciaries under ERISA as to unpaid contributions to ERISA benefit plans. View "Glazing Health & Welfare Fund v. Lamek" on Justia Law

A plan administrator is not an Employee Retirement Income Security Act (ERISA) fiduciary when negotiating its compensation with a prospective customer. The Ninth Circuit reversed the district court's order denying defendants' motion to dismiss an action alleging breach of fiduciary duties in connection with a retirement plan. The panel held that defendant was not a fiduciary with respect to its receipt of revenue sharing payments from investment managers because the payments were fully disclosed before the provider agreements were signed and did not come from plan assets. The panel agreed with other circuits and held that defendant also was not a fiduciary with respect to its withdrawal of preset fees from plan funds. The panel explained that when a service provider's definitively calculable and nondiscretionary compensation was clearly set forth in a contract with the fiduciary-employer, collection of fees out of plan funds in strict adherence to that contractual term was not a breach of the provider’s fiduciary duty. The panel vacated class certification orders and remanded with instructions to dismiss the complaint. View "Santomenno v. Transamerica Life Insurance Co." on Justia Law

The Ninth Circuit reversed the district court's denial of appellate attorney's fees under the Employee Retirement Income Security Act, 29 U.S.C. 1132(g)(1). The panel held that, pursuant to Sokol v. Bernstein, 812 F.2d 559, 561 (9th Cir. 1987), a court must consider the entire course of the litigation when analyzing a party's request for appellate attorney's fees within the Hummell v. S.E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980), rubric. Accordingly, the panel remanded to the district court for calculation of a reasonable award of fees and costs. View "Micha v. Sun Life Assurance of Canada" on Justia Law