13 F.4th 717
9th Cir.2021Background
- NetApp created the NetApp Executive Medical Retirement Plan in 2005 to provide retiree medical benefits to senior executives.
- PowerPoint summaries and SEC disclosures repeatedly stated the Plan provided retiree medical benefits "for the retiree’s lifetime."
- Annual insurer certificates of coverage (Cigna, later UnitedHealthcare) contained ERISA disclosures stating NetApp reserved the right to amend or terminate the Plan at any time.
- In 2016 NetApp amended and then terminated the Plan (benefit reimbursements 2017–19, lump-sum termination Dec. 31, 2019); retirees sued.
- Plaintiffs asserted (1) a benefits claim under 29 U.S.C. § 1132(a)(1)(B) that the PowerPoints vested lifetime benefits, and (2) an alternative § 1132(a)(3) fiduciary claim alleging misrepresentations in the PowerPoints.
- The district court granted summary judgment for NetApp on both claims; Ninth Circuit affirmed the benefits claim, vacated the § 1132(a)(3) ruling, and remanded the fiduciary-claim issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the PowerPoint presentations are "plan documents"/a §1102(a) written instrument that vested lifetime benefits (§1132(a)(1)(B)). | PowerPoints expressly promised lifetime benefits and thus created vested rights. | Formal insurer certificates were the plan's written instrument and reserved amendment/termination; PowerPoints were not the controlling plan document. | Affirmed for NetApp: PowerPoints not shown to satisfy §1102(b) written-instrument criteria; plaintiff waived any §1102(b) showing; insurer certificates control. |
| Whether fiduciary misrepresentations in the PowerPoints can constitute a remediable wrong under §1132(a)(3) (breach of §1104 duty). | NetApp misled participants by promising lifetime benefits; fiduciary breach can be found without proof of intent to deceive. | No remediable wrong: statements reflected NetApp’s honest present intent; participants could have reviewed the certificates. | Reversed district court on this issue: a triable dispute exists whether PowerPoints were materially misleading; scienter not required; remand for further proceedings. |
| Whether reservation-of-rights language in the certificates shields NetApp from fiduciary liability. | Reservation of rights does not automatically bar equitable fiduciary claims based on misleading statements. | Availability of certificates defeats the fiduciary claim. | Rejected as a categorical defense: reservation does not automatically insulate fiduciary; factual issues remain. |
| Whether and what equitable remedies under §1132(a)(3) (reformation, estoppel, surcharge, injunction) are appropriate. | Seeks injunctive relief, reformation, estoppel, surcharge. | District court did not resolve remedies; NetApp argued remedies should defeat claim. | Vacated as to remedy; Ninth Circuit remanded for the district court to consider appropriate equitable relief in the first instance. |
Key Cases Cited
- Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 (employers generally free to adopt, modify, or terminate welfare plans)
- Cinelli v. Sec. Pac. Corp., 61 F.3d 1437 (benefit vesting requires a written instrument meeting §1102(b))
- Varity Corp. v. Howe, 516 U.S. 489 (fiduciary liability for knowingly deceptive conduct toward beneficiaries)
- CIGNA Corp. v. Amara, 563 U.S. 421 (equitable remedies available under §1132(a)(3))
- Mathews v. Chevron Corp., 362 F.3d 1172 (no scienter requirement to prove fiduciary misrepresentation under Ninth Circuit law)
- James v. Pirelli Armstrong Tire Corp., 305 F.3d 439 (company breached fiduciary duty by providing materially misleading information about benefits)
- King v. Blue Cross & Blue Shield of Illinois, 871 F.3d 730 (fiduciary duty to disclose; misleading plan materials can violate §1104)
- Donovan v. Dillingham, 688 F.2d 1367 (de facto plan can be found where no formal written instrument exists)