Foster Rich v. Ralph Shrader
823 F.3d 1205
| 9th Cir. | 2016Background
- Foster Rich worked at Booz Allen Hamilton (BAH) from 1987 and received a negative performance assessment in September 2003 recommending voluntary retirement; he retired March 31, 2005.
- Rich participated in BAH’s Stock Rights Plan (SRP), accumulating 30,500 shares; BAH repurchased his shares in 2007 for $147.80 per share; BAH later sold part of the firm in 2008 for $763 per share, and Rich received nothing from that transaction.
- Rich sued BAH and individual defendants in 2009 asserting claims including breach of contract and, in a later amended pleading, ERISA claims based on the SRP; the district court dismissed the ERISA claims and held the breach-of-contract claim time-barred.
- Rich sought to recharacterize his breach claim as a wrongful termination claim and requested leave to amend multiple times; the district court denied further amendment and granted summary judgment for defendants on the breach claim.
- The Ninth Circuit reviewed accrual and ERISA coverage de novo and denial of leave to amend for abuse of discretion, and affirmed the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Accrual of breach-of-contract claim | Rich: claim accrues at last day of employment (Mar 31, 2005) because claim is effectively wrongful termination | BAH: claim accrued when the allegedly-breaching assessment occurred (Sept 2003); suit filed April 1, 2009 is untimely | Accrual occurred in Sept 2003; breach claim is time-barred |
| Tolling / delayed-discovery | Rich: delayed-discovery might toll limitations | BAH: plaintiff knew facts sufficient to discover claim earlier | Court rejected tolling on these facts; claim remains untimely |
| Leave to amend to assert wrongful termination | Rich: should be allowed to replead as wrongful termination; underlying facts unchanged | BAH: plaintiff had multiple chances and unduly delayed; unfair to permit new theory late | Denial of further leave to amend was not an abuse of discretion |
| ERISA coverage of SRP | Rich: SRP qualifies as an employee pension benefit plan (deferred/retirement income) | BAH: SRP is an incentive/ownership/capital program, discretionary, not designed to provide retirement income or deferred compensation | SRP is not an ERISA pension plan; ERISA claims fail |
Key Cases Cited
- Hernandez v. Spacelabs Med., Inc., 343 F.3d 1107 (9th Cir. 2003) (statute-of-limitations accrual review standard)
- Paulsen v. CNF Inc., 559 F.3d 1061 (9th Cir. 2009) (ERISA plan coverage standard review)
- Mullins v. Rockwell Int’l Corp., 15 Cal.4th 731 (Cal. 1997) (wrongful-termination accrual rule)
- Romano v. Rockwell Int’l, Inc., 14 Cal.4th 479 (Cal. 1996) (wrongful-termination accrual rule)
- Murphy v. Inexco Oil Co., 611 F.2d 570 (5th Cir. 1980) (focus on primary purpose of plan for ERISA coverage)
- Oatway v. Am. Int’l Grp., Inc., 325 F.3d 184 (3d Cir. 2003) (stock/incentive plans not ERISA where purpose is bonus/incentive)
- Emmenegger v. Bull Moose Tube Co., 197 F.3d 929 (8th Cir. 1999) (purpose-driven ERISA analysis for stock plans)
- Tolbert v. RBC Capital Mkts. Corp., 758 F.3d 619 (5th Cir. 2014) (deferred compensation plan analysis; not dispositive absent primary purpose to defer compensation)
- Heay v. Phillips, 201 F.2d 220 (9th Cir. 1952) (leave-to-amend principles)
- Allen v. City of Beverly Hills, 911 F.2d 367 (9th Cir. 1990) (broad discretion to deny leave after prior amendments)
- Mir v. Fosburg, 646 F.2d 342 (9th Cir. 1981) (disfavoring late-theory amendments after prolonged proceedings)
- Kaplan v. Rose, 49 F.3d 1363 (9th Cir. 1994) (late amendments asserting known theories not favored)