Koeplin v. Klotz
265 F. Supp. 3d 1039
N.D. Cal.2017Background
- Plaintiff Linda Koeplin sued under ERISA § 502(a) seeking benefits under the Bayside Solutions Long‑Term Incentive & 401(k) Restoration Plan (the Bayside Plan).
- Defendants (the Bayside Plan and Robert Klotz) filed an amended counterclaim under ERISA § 502(a)(3) seeking equitable relief (declaratory judgment, equitable lien, constructive trust) to enforce a forfeiture of $125,000 in employer contributions after Koeplin’s 2016 termination for cause.
- The Bayside Plan is an unfunded, nonqualified “top‑hat” deferred compensation plan for a select group of management/highly compensated employees; it contains a forfeiture-for‑misconduct clause and an Adoption Agreement designating certain administrative authority.
- Defendants alleged Klotz, as plan administrator, determined Koeplin’s misconduct and asserted he is a plan fiduciary able to sue under § 1132(a)(3); the Plan conceded it lacked standing.
- Koeplin moved to dismiss the counterclaim under Rule 12(b)(6) arguing neither the Plan nor Klotz has standing under § 1132(a)(3) because top‑hat plans and their administrators are exempt from ERISA fiduciary obligations.
- The court dismissed the amended counterclaim for lack of ERISA standing, holding Klotz is not a fiduciary for purposes of § 1132(a)(3) given the Plan’s top‑hat status, but granted leave to amend limited to alleging individual participant standing by September 15, 2017.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Bayside Plan has standing under § 1132(a)(3) | Plan lacks status as participant, beneficiary, or fiduciary; cannot sue | Plan argues counterclaim (conceded in brief) | Plan concedes and lacks standing; dismissed |
| Whether Klotz has standing as a plan fiduciary under § 1132(a)(3) | Klotz cannot be a fiduciary because top‑hat plans are exempt from ERISA fiduciary duties; cannot assert fiduciary status to sue | Klotz exercises discretionary authority and thus meets ERISA fiduciary definition | Court held top‑hat exemption precludes treating Klotz as an ERISA fiduciary for § 1132(a)(3); no standing |
| Whether Klotz may sue as plan administrator (non‑fiduciary) | Administrator status alone does not confer cause of action under § 1132(a)(3) | Defendants did not meaningfully argue administrator status creates standing | Court rejected any argument that administrator role alone permits suit under § 1132(a)(3) |
| Whether Klotz has individual (participant) standing | Koeplin notes no allegations of individual injury or redressability by Klotz | Klotz briefly argued participant standing in a footnote (not pleaded) | Court found constitutional standing lacking as pleaded but granted leave to amend to allege participant standing |
Key Cases Cited
- Gilliam v. Nevada Power Co., 488 F.3d 1189 (9th Cir. 2007) (describing top‑hat plans and ERISA exemptions)
- Duggan v. Hobbs, 99 F.3d 307 (9th Cir. 1996) (top‑hat administrators are exempt from fiduciary duties)
- Goldstein v. Johnson & Johnson, 251 F.3d 433 (3d Cir.) (top‑hat plan administrators are not fiduciaries under ERISA)
- Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261 (9th Cir. 1992) (ERISA grants causes of action only to participants, beneficiaries, or fiduciaries)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requires injury‑in‑fact, causation, redressability)
- Alexander v. Brigham & Women’s Physicians Org., Inc., 513 F.3d 37 (1st Cir. 2008) (Congress exempted high‑level employees via top‑hat regime to protect their bargaining autonomy)