*3 PREGERSON, Before TANG and Circuit Judges, REAL,* Judge. District PREGERSON, Judge: Circuit
INTRODUCTION presents important ques This case four regarding scope application tions Employee Security Retirement Income §§ (ERISA) Act 29 U.S.C. 1001- (1982).1 Plaintiffs-appellants, who are employees defendants-ap retired former pellees, filed suit in the United States Dis trict Court for the Northern District of sought recovery California and for their employers’ alleged violations of ERISA and various California laws. The district court dismissed each claim for failure to state a upon granted. claim which relief could be below, expressed For the reasons we re rulings verse these and remand for further proceedings.
FACTS Kuntz, Caccavo, Jimmy Richard Dan Humes, McCord, Singh, John Gursewak (the plaintiffs) and Duane White Kuntz Capitol Companies worked Metals * Real, Judge, Hon. Manuel J. Chief United States amended ERISA in 1980. See Mul tiemployer Plan Court Pension Amendments Act of District nia, for the Central District of Califor- 96-364, (codified Pub.L. 94 Stat. 1208 sitting by designation. (1982)). scattered sections of 26 & 29 U.S.C. (the Companies)2 during periods various were causes claims state law of action over In 1970 and 1981. between the court could decline to exercise its plaintiffs against the jurisdiction. filed suit Com pendent panies, employed spon which had them and Next, defendants moved dismiss for fund, pension plan and trust sored ERISA, failure to state a against the successors-in-interest parts complaint, strike to re- (the Metals’ Reese Capitol assets defenda quire to make a more definite nts),3 pension plan. who administer the statement of the The district case. court short, In contend granted part. striking this motion in After lied Reese defendants about the plaintiffs’ prayer punitive of benefits would amount damages allegations and their of misrepre- get under the failed to comply sentation, gave plaintiffs district *4 requirements for disclosing days allege to amend to that Kuntz and pension plan documents. requests the others had written made documents, pension plan specify to the court, plaintiffs In the district Kuntz the purported of dates ERISA disclosure viola- and alleged Companies the the Reese tions, identify plan and to the administra- misrepresented to each defendants Kuntz tors involved in the misconduct. plaintiff, both at he the time interviewed job afterward, Compa- for his Later, the plaintiffs Kuntz filed their would immediately nies enroll each Kuntz first amended complaint. complaint This plaintiff pension plan. The Reese only stated federal claims under ERISA. plan defendants as described the “stan- again The Reese defendants moved to dis- “good.” dard” Plaintiffs further al- each miss count for failure to state a claim. that, leged response employees’ to re- They argued that the statute of limitations quests plan, information the about the the barred claim and moved to strike as Companies prom- and the defendants Reese immaterial fraud and misrepre- pertinent ised to send documents soon and allegations. granted sentation The court plaintiffs the Kuntz not worry. advised to entirety the motions in their without leave According original complaint, to the plaintiffs amend. The to then took n pension plan was neither standard nor appeal us. now before instead, good; plan discriminated in Finally, parties after the had briefed the of the highest-paid workers favor above, substantive issues outlined provide coverage any failed to other Reese defendants moved court to dis- workers. subject jurisdiction miss for lack of matter original complaint alleged The also plaintiffs because the Kuntz did not have Companies and the Reese defendants standing. falsely represented that, a firm when called disputed up now take each matter. Corp. purchased Co., Capitol Estell Metals employees new, would be covered ANALYSIS pension plan. retroactive Standing I. to Sue Reese The defendants moved to dismiss defendants, subject According jurisdiction. lack matter The to the Reese ERI- through standing dismissed the second does not sev- SA confer sue for original fiduciary duty enth claims for relief in com- breach nondisclosure apparently pension plaint, ground plan on the that these documents former em- Reese, Companies Capitol The Nat The include Metals Reese defendants include Dan- Narens, Inc.; Inc.; Eget, Capitol Sammy iel Capitol Danat Invest- Enterprises, Metals Co., Inc., pension Division; ments. Reese is the administrator. Metals Northern California brevity, Compa- For to both we often refer Corp.; Transport, Metals Gilbraltar and Metal nies and the as “the Reese defendants Reese Inc. defendants.”
ployees
pension plan
“participant”
any
benefits
term
whose vested
means
em-
[t]he
already
ployee
employee
employ-
have
or
distributed. Defendants
former
of an
been
er,
persons
any
or
plaintiffs,
reason
or former
that the Kuntz
as
member
member
distribution,
employee organization,
already
may
who
an
have
received a
who is or
eligible
become
to receive
longer “participants]”
no
under 29
a benefit of
any type
from
1002(7)
may
sue to collect
employees
employ-
which covers
their fair
such
share
trust fund.
er or
such organization,
members of
or
Because
the case
both
law and ERISA’s
whose beneficiaries
eligible
be
legislative history
argu-
undermine these
receive
such benefit.
ments,
reject
defendants’ novel inter-
§ 1002(7)(emphasis added).
29 U.S.C.
pretation
1002(7).
Reese defendants contend that
§ 1002(7)
Requirements
A.
because,
are not
Determining
whether
employees
former
whose vested benefits
have
standing
question
“threshold
already
been distribut
every federal case
[that] determines]
lump sum,
in a
ed
were
power of the court to entertain the suit.”
“eligible
benefit,”
likely
receive
490, 498,
Seldin,
Warth
U.S.
S.Ct.
eligible,
at
become
the time
filed
2197, 2204,
(1975).
4. The
Surgery
Group,
do not
that stand-
Medical
Joint
ing
(9th Cir.1983).
is
at the
determined
time that
file
F.2d
Jacques Orthopaedic
suit. See
Freeman
&
fiduciary relationship
does man is that a
is cru-
Nugent
citation of
But Freeman’s
§ 1002(7)’s
standing issue in the
dispose of the
cial to
definition of who is a
Freeman,
merely
In
participant
us.
fi-
case before
under ERISA. Because no
the Fifth Circuit “has
the fact that
stated
duciary relationship
poten-
exists toward
‘may
eligible’
become
held that ERISA’s
tial,
past, participants,
plain-
rather than
defining
participant ap-
who is a
language
(like
Freeman)
plaintiff
tiff
who has
employees.”
current
Free-
plies only to
signed up
pension
never
for a
fund does
man,
rely
at 655. We did not
721 F.2d
standing
misrepresenta-
not have
to sue for
support
holding in
our
this statement
fiduciary duty. Nothing
tion and
breach
Freeman,
express any agree-
nor did we
Freeman, however,
precludes the Kuntz
Therefore,
disagreement with it.
ment or
plaintiffs,
signed up
pension
for the
argument
defendants’ first
re-
the Reese
it,
fund and accrued vested benefits under
garding
inapposite.
is
Freeman
going
from
lawsuit.
forward with this
Moreover,
factually
distin-
Freeman
Second, the Reese defendants read
guishable
present
from the
case. Plaintiff
holding
Freeman as
that a claim for dam
possessed
time
had not at
Freeman
ages
misrepresentation
due to
does not
or maintained a
benefits
vested
employee “eligible
make a former
to re
employer
relationship with
meaning
ceive a benefit”
contrast,
within
By
administrator.
§ 1002(7).
Freeman,
In
ruled that
allege
accrued vested
plaintiff’s
pension plan,
under the
and there-
claim that he was misled about
benefits
by enjoyed fiduciary relationship
participation,
the cost of
consequently
employer
administrator.
In Free-
pension plan,
did not enroll in the
constitut
Freeman,
man,
employee,
former
damages,
ed
a tort
and therefore
brought
pursuant
action
any type”
was not “a
within the
§ 1132(a)(1)(B)
accounting
for “an
and dis- meaning
1002(7). Freeman,
721 F.2d
owing
of benefits claimed
tribution
Freeman).
(emphasis
at 656
But we did
*6
pension
profit sharing plan.”
and
[his]
not
in
base our decision
Freeman on the
Freeman,
C. 4639, 4838, News Although statutory language Representatives report neither the A House of made defining participant stronger who is a under an even statement: interpreting nor our case law the statute recognizes Committee absolute plaintiffs standing, nei- denies partici- safeguards need that precisely ther set of authorities states pants sufficiently adequate be and ef- Therefore, standing, either. have prevent inequi- the numerous fective legislative history light turn to the to shed plans ties to workers *7 in Congress’ regard. intent tragic hardship many. resulted in to so (em- legislative history H.R.Rep. Cong. indicates that No. 93d 2d Con- Sess. added), phasis gress reprinted intended the federal courts to effec- 1974 U.S.Code purposes Cong. the remedial tuate of the statute & Ad.News prema- plaintiffs apparently allege plaintiffs 5. The Kuntz that the the Reese defendants induced only turely they Reese defendants not misled them as to the to believe that had been enrolled in plan, plan cognizable of benefits due under the but amount also the ment, is also because the induce- proved, induced some of the Kuntz to believe if constitutes a form of fraud they participating plan infecting fiduciary relationship. that were before The Kuntz actually the Reese defendants enrolled them. plaintiffs contend that were misled into believing fiduciary relationship that a under Again, the Reese defendants contend that employ- time their ERISA existed from the precludes Again, these claims. dis- Freeman we however, Freeman, plaintiff er hired them. In agree. aware from the moment he was informed was The claim were mis- fiduciary relationship of the that a between cognizable led as to the amount of benefits is because, exist; Freeman, plaintiff him and the administrator did not plain- unlike the knowingly signed participation fiduciary relationship a waiver of here had a with the he tiffs Moreover, plan. plan administrator. the claim that history, of vested benefits legislative the amount light In of this defendants’ con to them. that the Reese been distributed we think standing provisions is of ERISA’s struction plain- Having concluded that the Kuntz the Reese defend unacceptable. Under ERISA, proceed tiffs sue statute, employer an who ants’ view the merits. administrator could defeat is also the Preemption Law II. and State Claims employee’s right to sue for breach a former fiduciary duty and for failure to distrib original complaint, In the Kuntz distributing simply by whatev ute benefits alleged claims for relief seven and then termini lump er sum he wishes arising law and ERI- under both California his former nating before benefits dismissed six claims SA. The district court however, Congress, did not file suit. can jurisdiction. The subject for lack of matter type inequitable result. intend this that all of the apparently court concluded arising claims under California law were response, In the Reese defendants over which it could decline state law claims statute, by prohibiting suggest pendent jurisdiction. its On to exercise discharges retaliatory under 29 U.S.C. plaintiffs contend that appeal, the Kuntz § 1140, employer adequately prevents the district court should have exercised its The statute does not disagree. abuse. We pendent jurisdiction and decided these us, cases, apply in such as the one before claims. employees discharged. not defendants’ con adopted If the Reese clause, preemption But ERISA’s broad standing has under ERI- struction of who § 1144(a), together its see U.S.C. SA, employer is also the sole ad jurisdiction provision, exclusive see id. pension plan ministrator of a could commit § 1132(e)(1),6 jur has eliminated state fiduciary duty, termi serious breaches of isdiction over actions related most em plan, the vested bene nate the distribute Therefore, ployee plans. if benefit ERISA fits, thereby immunize himself from plain preempts the state law claims that employees. former These are the suit assert, ques tiffs we need not decide the very types “jurisdictional procedural pendent jurisdiction. tion of In the case “hampered that have effective obstacles” us, include whether before the state issues fiduciary responsibilities.” enforcement preempts Cali Sess., Rep. Cong., No. 93d 2d re misrepresentation, fornia law Cong. Ad. printed in 1974 U.S.Code & so, and, provides if a claim whether ERISA 4838, 4871; see, e.g., Hager News Veco for relief. (BNA) 1827, Empl.Ben.Cas. Corp., Preemption A. (N.D.Ill.1979) employer de (permitting employees’ “participant” sta feat former Congress enacted ERISA as a com by distributing vested benefits would tus legislative prehensive scheme resolve intent). congressional contravene problems private employee plans stability, provide security, and to and uni We do believe formity in this area of the law. produce the statute to such an arbi drafted § 1001(a). To national uniform establish Therefore, trary result. we conclude that *8 Congress preemption ity, included a broad “partici Congress did not intend the term providing super ERISA “shall clause that interpreted narrowly that pant” to be so any sede and all laws insofar as standing un employees former are denied State any employ- hereafter relate to challenge the correctness of now or der ERISA Thus, 1132(e)(1) under, plan. grants the terms of the actions for federal district 6. Section 1109(a), statutory jurisdiction under and for the § over all ERISAac- relief courts exclusive tions, 1132(c), penalty except plan participant for nondisclosure under for a or benefi- benefits, jurisdiction ciary's the exclusive of the federal to recover to enforce his within action clarify right rights, his to future benefits courts. or to 934 plan.” 1144(a).7
ee
29
benefit
law that “has a connection with or refer
legislative history of
ERISA indicates
Shaw,
a-plan.”
ence to
at
such
463 U.S.
Congress
that
the federal
wanted
courts
-,
Although
of
S.Ct. at
some
103
preemption
broadly.
construe the
clause
the claims for relief8 that the district
rejected
expressly
a more limited initially
pleaded
were
of
dismissed
terms
preemption
applied
that would
clause
statutory and breach of contract
California
only
relating
specific
to state
to the
laws
law, all the claims relate to the same al
subjects
covers.
that ERISA
See Shaw
leged
damage
plan
pension
that
harm:
Lines, Inc.,
85, 98-99,
Delta Air
463 U.S.
they misrepresen
caused when
fiduciaries
2900-01,
2890,
103 S.Ct.
Citing legislative history, this the Su- decided preme broadly preempts whether ERISA state Court has defined a law that to” an a plan benefit as tort action involving pension causes of “relate[s] pre- agreement obligating 7. ERISA exceptions plan contains several to the committee emption provision 1144(a), compliance require- §in none of to act with ERISA apply 1144(b). in this See case. 29 U.S.C. ments. (6) for breach employment An action agreement, allegation based on the following 8. The district court dismissed the six defendants, part the Reese claims: compensation, promised a (1) An action under Cal.Labor Code § 972 "good" pension but failed to deliver (West 1971), employ- which concerns an one. knowing misrepresentation er’s false prospective employee change induces a Supreme granted 9. The Court has certiorari location, allegation based on the only question on the permits whether ERISA misrepresented pen- Reese defendants damages punitive against court to award job sion at inter- improperly untimely processes views. — -, See claims. U.S. S.Ct. 105 (2) fraud, An action for willful based on the up 139. We take 84 L.Ed.2d related allegation that the Reese defendants question p. IV. in Section infra knowingly misrepresented the fact and quality coverage plan. 10. parallel further held Russell that no (3) Negligent misrepresentation, based on the federal claim relief exists under ERISA. (2). allegations same factual Russell v. Massachusetts Ins. F.2d Life (4) fiduciary duty An action for breach — (9th Cir.1983), granted, cert. U.S. fraud, allega- constructive on the based -, (1984). S.Ct. L.Ed.2d And relationship tion that a confidential exist- although preempted held ERISA also misrep- ed and that the Reese defendants’ compensatory Russell’s claim damages punitive resentations breached their duties under improper processing disabil her relationship. ity claim, we nonetheless found that her conten contract, (5) An action for breach of based on tion did a federal state claim under ERISA. *9 allegation Reese defendants F.2d at 490.- pension plan breached a clause of the
935 Nonetheless, viding comparable protections,” federal covers.11 that ERISA plans 488, Russell, plaintiffs’ action for 722 F.2d at we hold that find the Kuntz indistinguisha provides ERISA a federal of action logically cause misrepresentation allegations pension plan that we to consider that a from the state law tort claim ble fiduciary misrepresented has the fact Both claims have confronted Russell. plan coverage. quality to” a and/or connection with or reference bene “a covers, thus come fits that ERISA III. Statute Limitations preemption provision. within Under ERISA 2900; at-, Shaw, at 463 U.S. 103 S.Ct. the Kuntz The district dismissed Russell, 487-88; see also De 722 F.2d at plaintiffs’ complaint, amended which as- Brewing Corp., 653 pendahl v. Falstaff claims, only serted because the 1208, Cir.) (8th (holding F.2d 1215-16 state Apparently, statute of limitations had run. interfer common law action for tortious adopted the court the Reese defendants’ preempted), cert. de ence with contract argument provide did not that ERISA 512, 641, 968, 1084, nied, 454 102 S.Ct. U.S. period plaintiffs’ limitations for the Kuntz Therefore, 384, (1981). L.Ed.2d 619 70 therefore, claim, and, analogous Cali- preempts plain hold that ERISA governed. fornia statute of limitations state law claims. tiffs’ three-year limi- district court held that the B. ERISA Claim § Relief 338(1) (West tation Cal.Civ.Proc.Code 1982) precluded plaintiffs’ com- Although Cal pensatory damage is claim. The court also misrepresentation claim for ifornia law one-year held that the limitation in must still decide whether Cal.Civ. preempted, we § 340(1)(West 1982) allegations state a claim for Proc.Code barred their federal prayer statutory penalties ERI- This too is an issue of relief under ERISA. The Kuntz assert that impression in our court.12 SA. now first the district court erred when it failed to misrepresenta- alleged think that the six-year period apply the limitations tions, proved, if would constitute a breach § Congress provided in 1113 for actions Congress type fiduciary duty arising fiduciary duty out of breach govern. intended ERISA to Under under ERISA. § 1104(a), “discharge must his controversy plan solely appeal, On over stat- respect duties to a §in provision of limitations 1113 raises participants and benefi- ute interest of first, separate issues: whether the purpose of three ciaries and ... for the exclusive all; us at sec- question properly before providing ... benefits ond, period the limitations whether beneficiaries.” 29 brought applies to actions un- 1104(a)(l)(A)(i). The 1113 even actions § 1104(a) duty solely (fiduciary’s to act allegedly took would der Reese defendants § 1109(a) participants) be interest of duty. Because would breach “[i]t personal liability for breach of pro- (fiduciary’s if eliminated the anomolous third, 1113, fiduciary duty); and whether pro- tections offered state law without circuit, however, decided, however, court in our has whether ERISA 12. A district 11. We have regulatory misrepresentation preempts schemes. various state that an action for decided See, e.g., Employee Retire Comm. under ERISA. See Provi does not state a claim Benefits Pasco, Sys. Fund, Tel. Co. v. 679 ment Hawaiian F.Supp. Valley Trust 509 ence v. Clerks (9th Cir.1982) (holding com workers’ F.2d 1319 388, (E.D.Cal.1981). Ogden see v. But 391-392 preempted); Carpenters pensation Pen statute Co., 520, Michigan F.Supp. Bell Tel. 571 523 Kronschnabel, S. v. 632 F.2d sion Trust (E.D.Mich.1983) (holding misrep for Calif. that action for (9th 1980) (holding community property Cir. 745 laws not ERISA); resentation does state claim under Gor denied, preempted), U.S. cert. F.Supp. don v. Matthew Bender & (1981). L.Ed.2d 1004 But 101 S.Ct. cf. (N.D.Ill.1983) (casting validity doubt on Fund, Valley Clerks Trust Provience Provience). (E.D.Cal.1981) (holding F.Supp. cause state preempted). fraud not of action for willful *10 936 § “part”
if
that
1113 refers
4
applicable,
plaintiffs’
bars the Kuntz
to is Part
I,
claims.
Subchapter
Subtitle B of the
of
statute.
§§
(enacting
29
1101-1114
U.S.C.
rules
See
Appeal
A. Propriety of
§1113
fiduciary responsibility).
pro-
of
ERISA
Regarding
no statute of
vides
limitations
actions
The Reese defendants contend that the
brought
of
parts
to attack violations
other
properly
did not
raise in
of ERISA.
the
district
the issue whether the
federal
of
out in
statute
limitations set
When a federal
a
statute creates
§
Pointing
applies
1113
to this case.
to the
relief,
specify
claim for
but does not
a
court,
papers
filed
district
the Reese
limitations,
period of
the district court
argu-
note
defendants
the
of this
absence
apply
analogous
should
the most
state stat
ment in the Kuntz
response of
Railway
ute
limitations.
Johnson
the Reese
motion to
on
defendants’
dismiss
Inc.,
Express
454, 462,
Agency,
421 U.S.
95
question.
of
statute
limitations
1716, 1721,
(1975).
44
S.Ct.
L.Ed.2d 295
Generally,
party may
a
But the Kuntz
assert
that
appeal. Taylor
raise new issues on
v. Sen
§
period
limitations
apply
1113 should
652,
try
Insurance
729 F.2d
655-
Life
they may bring
because
ERISA
(9th Cir.1984)
curiam).
56
(per
None
for nondisclosure of
an
documents as
theless,
purely
when the issue involves a
fiduciary
action for
of
duty
breach
matter,
legal
question
such as a
of statu
§
§
1104(a)
1109(a),
and
which
found
tory
central
construction that is
to the case
1104(a)(1)imposes
gener
Part
Section
a
important
public, may
to the
exer
obligation
plan fiduciary
al
on a
act
Corp.
cise our discretion to hear it. Abex
Inc.,
solely in
interest
Enterprises,
v. Ski’s
748 F.2d
(9th Cir.1984).
1109(a),
importance
companion
Due
beneficiaries. Section
question
law,
of this
of
light
of
provision,
a fiduciary personally
holds
lia
parties
presented
fact
that
damages
that he
ble
causes
breach
fully developed
otherwise
record to us on ing
fiduciary
his
duty.
plain
The Kuntz
Howell,
appeal, see In re
731 F.2d
argue
a fiduciary’s
tiffs
that
nondisclosure
—
(9th
U.S. -,
Cir.),
denied,
cert.
documents constitutes a
breach
(1984),
S.Ct.
this
inadequacy
existing
citing
Moreover,
and
district
proper.”
deems
Id.
Congress
plans,
governing these
per-
standards
court
hold the
administrator
allege
The failure to
request
a written
prejudice only
with
after the court dismissed the
plan documents is not fatal
plain-
to the Kuntz
action as to the Reese defendants and the Com-
claim,
tiffs’
at
least
29 U.S.C.
panies.
1022(a)(1)
1024(b)(1),
§§
which do not re-
Taking
position
plaintiffs’
that the Kuntz
fer
requests.
to written
stipulation completely terminated its involve-
case,
ment in the
Estell now contends that it
is
Before the district court ruled on the amend-
proper
party
appeal.
to this
complaint,
ed
agreed by
argument
This
parties
is
stipulation
plain-
meritless. The
to extend
Corp.’s
defendant Estell
ly
put
intended to
respond
Corporation
Estell
time to
interrogatories.
to
complaint
position
same
as
other
defendants
The Kuntz
with re-
stipu-
also
gard
litigation.
result,
to
lated
As a
voluntarily
would
our decision
dismiss Estell
judgment
to reverse
accordance
Companies
order of
to the
the court that
favored the
and the
other
Reese
plain-
defendants.
defendants
The Kuntz
should have the same
tiffs, therefore, stipulated
dismissing
effect on
Estell.
Estell
Orthopaedic & Joint
Jacques
Freeman
legisla
comprehensive
to enact a
decided
Inc.,
Group,
Medical
Implant Surgery
problems and to
remedy
tive scheme
Cir.1983);
(9th
Nugent v. Jes-
under the RE judgment REVERSE consistent proceedings further
MAND *13 opinion.15
with this
REAL, dissenting: Judge, District America, UNITED STATES
I dissent. Plaintiff-Appellee general attempt to turn a majority’s The provisions of interpret admonition com- broadly interstate “protect Royal TERRY, Stafford
merce and interests Defendant-Appellant. and their benefi-
employee plans No. 84-1048. by providing appropriate ciaries ... remedies, sanctions, ready access United States Court of Appeals, § 1001(b), courts,” 29 U.S.C. the Federal Ninth Circuit. short “participant,” falls into definition is defined “Participant” mark. Jan. 1985. Argued and Submitted § 1002(7) “any as em- language in clear May Decided employer, of an ployee employee or former of an or former member any or member 2, 1985. As July Amended organization may is or be- a benefit of eligible to receive come added). (emphasis (emphasis
type ...” employee or former
No here is an plaintiff eligible
employee “who or become That any type.” a benefit receive eligi- speaks present or future
definition were language. Plaintiffs’ benefits
bility them be-
already vested distributed plaintiffs can- brought suit.
fore au- “participants” qualify therefore suit, under 29 bring either
thorized to 1132(a)(2). 1132(a)(1)(A)
U.S.C. Instead, 1132(g), to 29 Pursuant sets of both upon will consider the matter parties request attorney’s appeal. properly-supported Meanwhile, application. fees requests decline to review their at this time. according the mandate shall issue to our rules.