Jack Leeson v. Transamerica Disability Income
671 F.3d 969
| 9th Cir. | 2012Background
- Leeson, a former Transamerica employee, filed an ERISA §1132(a)(1)(B) suit challenging termination of LTD benefits.
- Benefits were administered by Prudential (initially) and later by Transamerica/AEGON; Leeson received LTD for years before termination (2001).
- District court dismissed for lack of subject-matter jurisdiction under Curtis, treating Leeson as not a plan participant.
- This court previously remanded to apply de novo review for termination under the 1997 Restatement Plan.
- On remand, Transamerica argued Leeson lacked standing as a plan participant based on new plan documents; Leeson contended Vaughn controls and participant status is merits-based.
- This decision holds participant status is a merits issue, not a jurisdictional prerequisite, vacates the earlier dismissal, and remands for de novo consideration under the applicable plan.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Leeson is a plan participant under ERISA §1002(7). | Leeson asserts colorable claim of eligibility; Vaughn controls. | Leeson was on unpaid leave; not a participant per plan language. | Participant status is a merits issue, not jurisdictional; remand for merits-based review. |
| Whether lack of participant status deprives federal subject-matter jurisdiction. | Leeson argues Vaughn governs; jurisdiction exists if colorable claim. | Curtis controls; dismissal for lack of standing. | Ruling: participant status affects merits, not jurisdiction; jurisdiction exists for merits-based review. |
| What standard of review applies on remand for termination of LTD benefits. | De novo review under the 1997 Restatement Plan. | Standard previously was abuse of discretion. | On remand, apply de novo review under the applicable plan. |
| Appropriate scope of remand and plan to apply on remand. | Apply 1997 Restatement Plan unless another plan governs. | May apply different plan as determined by district court. | Remand with instructions to apply 1997 Restatement Plan if that is governing. |
| Impact of Vaughn on preclusion of jurisdictional findings. | Vaughn supports merits-based determination of participant status. | Earlier precedents treated participant status as jurisdictional. | Agree: Vaughn controls; participant status is merits-based. |
Key Cases Cited
- Vaughn v. Bay Environmental Management, Inc., 567 F.3d 1021 (9th Cir. 2009) (statutory standing under ERISA is merits-based, not jurisdictional)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (Supreme Court 2006) (statutory limitations not jurisdictional if not labeled or placed in jurisdictional provision)
- Reed Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (Supreme Court 2010) (copyright registration precondition; not jurisdictional; claim-processing rule)
- Shinseki v. Carriers, (not provided) (Supreme Court 2011) (discipline on non-jurisdictional procedural rules (contextual))
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (Supreme Court 1989) (definition of participant and substantive review under ERISA)
- Curtis v. Nevada Bonding Corp., 53 F.3d 1027 (9th Cir. 1995) (standing prerequisite for ERISA jurisdiction (overruled))
- Bell v. Hood, 327 U.S. 678 (Supreme Court 1946) (federal-question jurisdiction cannot be defeated by procedural bar)