*2 ary Employee duties under the Retirement BOOCHEVER, Before FERGUSON and (ERISA), Security Income Act 29 U.S.C. Judges, SCHWARZER,* Circuit Dis §§ contract, seq., 1001 et breach Judge. trict

estoppel. Firestone moved to dismiss un- SCHWARZER, Judge. District 12(b)(1) 12(b)(6), der Fed.R.Civ.P. summary

alternatively judgment. It FACTS contended, among things, other jurisdic- court Thomas district lacked appeals judg- Menhorn from a tion because Menhorn’s claim did not upholding ment Tire & arise Firestone Rubber argued Company’s denial of under ERISA. It also that Men- horn had failed to state a claim for benefits Firestone’s re- because he plan. employed failed to tirement had exhaust his internal remedies Ohio, Akron, plant plan. at its Firestone from under Firestone’s motion for * Schwarzer, fornia, sitting by designation. William United Honorable W. States Judge District for the Northern District of Cali- statutory dec- supported scheme

summary judgment was did not contradict. which Menhorn larations determining Congress con- whether such actions ferred over granted Firestone’s The district courts, pur- first district consider we mer- summary judgment on the motion underlying pose policies ERISA. That Firestone, the adminis- its, holding that comprehensive and statute established a arbitrarily plan, had not acted trator *3 of rules nationally system uniform and refusing in credit Men- capriciously to or among things, other governing, standards service, and length his full horn with in the administra- the conduct fiduciaries to not entitled Menhorn was therefore employee plans. The Con- tion of benefit the not address The court did recover. Report Committee notes: ference jurisdiction. question agreement, civil Under conference appeal, legal positions On by participant brought actions con- reversed. Menhorn now parties are beneficiary benefits due or to recover jurisdic- lacked that the district court tends plan, clarify rights to under the re- to that, jurisdiction, even if it had and plan, under the ceive future benefits failing discretion in to dismiss its abused for relief from breach of re- remedies. to exhaust internal for failure courts sponsibility. The district are U.S. jurisdiction have with re- to exclusive involving actions breach of spect to fidu- DISCUSSION as ciary responsibility as well exclusive concerning question raises appeal This jurisdiction over actions to enforce other jurisdiction district over scope court clarify rights provided or benefit under under Menhorn’s claims asserted ERISA. I title remedial described [the brought U.S.C. is under 29 action below, now at 29 codified § 1132(e)(1), which vests §§ However, respect with 1021-1114]. by participants courts over actions district to suits enforce benefit plans equita- employee benefit to obtain plan or to recover benefits the Act. relief to redress violations of ble plan which do not involve allegations that He seeks relief based on they may provisions, title I fiduciary duties Firestone violated its brought district U.S. courts assuring him it denying him benefits after competent courts of but also State so. would not do jurisdiction. All actions in such Federal regarded or State courts are to be of action accrued cause arising under laws of the United when his claim for benefits brought in similar fashion to those States operative But acts formally denied. all the Labor-Manage- under section 301 of the Men- forming the basis for and omissions Relations ment Act of oc horn’s claim and Firestone’s denial Cong., H.R.Conf.Rep. No. 93d 2d January ERISA’s curred before (1974), reprinted Sess. U.S.Code ap effective date. narrow issue Cong. also & Ad.News 5109. See then, raises, accrual of peal whether the Cong.Rec. reprinted in 1974 S U.S. subsequent Menhorn’s cause (state- Cong. & Ad.News Code date is effective Williams). ment Sen. give jurisdic court district sufficient ERISA, adopted Congress action is numerous the action when that tion over occurring statutory provisions specifying, for exam- wholly on events based requirements report- not.1 ple, that it is for disclosure effective date. We hold facts, diversity provide would for party came either a basis forward with 1. Neither appeal, question independent sufficient the district or on of this action of federal diversity jurisdiction on the basis of jurisdiction. sustain citizenship. speculate We decline to whether §§ 1021-1031; ing, employee plans 29 U.S.C. minimum that had previously participation, vesting, standards for province been the exclusive of state law. §§ 1051-1086; funding, gov- and rules id. example, provision For no men- erning fiduciary liability, conduct and id. tions the circumstances under which a §§ among 1101-1114. Included the fiduci- participant beneficiary is entitled to re- ary provi- rules relevant to this action are disputed plan, cover benefits from a but governing, example, sions the form and § 1132(a)(1)(B) person authorizes such a plans, documentation of bring a civil action to recover benefits or to §§ 1102-1103; qualifications id. and bond- clarify rights enforce or past or future ing fiduciaries, requirements id. benefits under the plan. terms of a benefit §§ 1111-1112; prohibitions on certain A Congress’s Senate conferee noted “in- fiduciaries, by plan transactions id. body that a of Federal substantive ten[t] §§ 1106-1108; fiduciary liability, id. developed by law will be the courts to deal §§ 1104, 1109-1110. with issues involving rights obligations *4 Congress But realized that the bare private plans.” welfare and terms, detailed, statutory however of these Cong.Rec. (Aug. 22, 1974) S provisions would not be sufficient to estab- (statement Javits). of Sen. comprehensive lish a regulatory scheme. context, In this meaning of the con- accordingly empowered It the courts to de- gressional reference to 301 of the Labor- velop, light experience, of reason and Management leg- Relations Act in ERISA’s body a of governing federal common law above, history, quoted islative becomes plans. That federal com- clear. Section 301 has been treated as a First, mon law serves three related ends. congressional authorization for the federal supplements it statutory scheme in- develop courts to a federal common law Mishkin, terstitially. See The Variousness concerning the construction and enforce- Competence “Federal Law”: and Dis- of bargaining ment of agreements: collective cretion in the Choice National and Management The Labor Relations Act Decision, State Rules 105 U.Pa.L.Rev. expressly furnishes some substantive (1957). gen- 799-800 Second and more points parties may law. It out what the erally, ramify it develop serves to may or not do in certain situations. Oth- standards that the statute sets out problems penumbra er will lie in the general example, pro- terms. For express statutory mandates. Some will discharge vides that a is to express statutory lack sanction but will duties by looking policy be solved at the care, skill, prudence, with the and dili- legislation fashioning remedy that gence pre- under the circumstances then policy. range will effectuate that vailing prudent acting that a man in a judicial will be determined inventiveness capacity like and familiar with such mat- by problem. the nature of the Federal ters use in the conduct of an en- would interpretation gov- of the federal law will terprise of a like character and with like ern, law, not state law. But state if aims____ § 301, compatible purpose of with the § 1104(a)(1)(B). 29 U.S.C. The detailed con- to be resorted to order find application struction and of this standard rule that effectuate the federal will best Congress put in the hands of the federal applied, however, policy. Any state law by terms, authorizing general courts will be as federal law and will absorbed over, granting exclusive federal independent private not an source of by plan participants civil actions to obtain rights. relief for violations of the terms of the §§ Mills, 1132(a)(3); 1132(e)(1). Textile Workers Union v. Lincoln or of ERISA. Id. 448, 457, 912, 918, Third, Congress grant as a viewed ERISA (1957) (citations omitted). authority L.Ed.2d 972 develop princi- to the courts to ples governing regulating adoption law areas of the the context of its of a federal recognized that plans, But ERISA’s drafters regulate employee to

scheme con- judge pre-ERISA intent. expressed has identical be unfair' Congress would na- directed formulate retrospectively The courts are standards. duct ERISA’s Quinn common law tionally uniform federal See, e.g., Country Club Soda gen- provisions and explicit supplement (1st Cir.1981); Ba- ERISA, referring to policies set out eral F.Supp. Wong, con law when guided principles state § 1144(b)(1) (N.D.Cal.1978). 29 U.S.C. federal governed but appropriate, provides preemp- therefore pur- To issue. effectuate policies § 1144(a) “shall of state law under courts Congress granted pose, respect any with of action cause exclusive, part con- jurisdiction, part arose, any or act or omission which which courts, fall- over matters with state current occurred, January 1, 1975.” The before explicit or ing within ERISA's (b)(1) preserve terms subsection plain law.2 supplementary common any state cause of law to governing law Determining the accruing before any occurring as to act or omission well clear, then, represents a It is that ERISA For that reason we must date. congressional for the creation mandate state preemptive whether fed- determine comprehensive and na- enforcement governs by look- eral law Menhorn’s action intend- tionally regulatory uniform scheme cause ing both the time when that regulation of supplant ed to diverse when the action accrued and the time 1144(a) Accordingly, 29 the field. the claim conduct that formed basis for that, “shall su- *5 provides generally, ERISA separate inquiries These are in- any ... re- occurred. persede and all State laws lating] any employee plan____” principles.3 formed different to right jurisdic- a Congress's the of to federal scheme vests course retains access enforcement 2. actions, governs irrespective types see ERISA of over most of ERISA civil forum actions 1132(a)-(c), diversity citizenship exclusively fed- of or in controver- amount §§ 29 there, 1132(e)(1). by filing sy, plaintiff 29 U.S.C. over § eral courts. Id. Jurisdiction removing, 1132(a)(1)(B) 1132(e)(1), brought id. to re- and defendant 28 § § actions under rights plan, cover benefits or enforce however, U.S.C. 1441. concurrently is vested in state dissent, rejecting that the notion "when 1132(e)(1). Congress’s federal courts. Id. arises a cause of action date, after ERISA’s effective jurisdiction class of choice to vest over one precluded is federal because ERISA civil actions in both the and federal pre-ERI- part of the of action is based on cause way is in with its intent courts no inconsistent omissions,” recognize acts or SA fails to comprehensive create a to scheme of cause of distinction. accruing It assumes that a action well as common law in the area. State as always will after ERISA’seffective date expositors law. federal courts be of (in invoke federal law to review the event 90, 103-05, See, e.g., McCurry, Allen v. 449 U.S. benefits) trig- denial of that 411, case Firestone’s 419-20, (1980); 66 L.Ed.2d 308 below, however, point gered we accrual. As out Lessee, Wheat.) (1 v. Martin Hunter's 14 U.S. preemption determining of the time Moreover, the effect of 304, 340-42, (1816). 4 Con- L.Ed. 97 accrual, determining preemption effect the gress's grant choice the concur- to state courts claim, pre-ERISA conduct material to the are of particular rent over this class of subject to different considera- different issues goals. squares legislative with its overall cases tions. benefits Actions recover or enforce the time accrual typically the will involve Determination of of reflects terms of general application principles principally notice of considerations of the of those fair litigants against plaintiffs (protecting unwary the have contract law with which state courts ERISA; through the experience their loss of benefits run- had substantial before the inadvertent limitations), judicial qualifies ning expertise rules of them evaluate these statute light policies economy (avoiding premature piecemeal apply feder- or liti- the of ERISA’s preemption Congress gation). the of simply increased Determination the ef- al common law. might which fect of conduct reflects number of forums to a claimant material cases, presumably principally fairness to defend- access in these both considerations of have (avoiding options retroactive of the and also to miti- ants remedi- increase claimant's principles degree in effect the time of gate to some the federal al at the burden on differing party resulting question). from ERISA. Either of conduct Because of courts

1501 Accrual of cause action. cause action.” Id. at 410. In such of accept proposition We eases, that post-effective date denial of ben- cause based a denial of bene trigger efits will accrual of the cause fits accrues at the time the benefits are action, while substantial conduct denied. This rule reflects a concern that forming the basis the action will have require would be burdensome and unfair to predated situation, ERISA. This in other lay participants and beneficiaries to be con words, satisfy will the “cause of action” stantly possible alert for errors or abuses § 1144(b)(1), clause but not the “act might give that rise to a claim and start the § 1144(b)(1) omission” clause. Because running. statute limitations It also precludes preemption ap- if either clause judicial seeks to avoid the burden on the plies, such governed actions will system actions, of multiple some of which state law prevailed at the time of the might premature. Morgan La relevant conduct. Thus in cases where a Fund, borers Pension Trust 433 F.Supp. formally claimant is denied benefits after (N.D.Cal.1977). 522 n. 5 See also Par ERISA’s pursuant effective date un- to an Plan, Sharing is v. 637 F.2d Profit ambiguous and nondiscretionary plan provi- (5th Cir.), denied, cert. adopted sion date, before the effective (1981); S.Ct. L.Ed.2d denial not reviewable under ERISA. Quinn Country Club Soda 639 See, e.g., v. Keystone Cowan Employee (1st Cir.1981); F.2d Winer v. Edi Fund, Sharing 586 F.2d Profit Plan, son Bros. Pension Stores 593 F.2d (1st Cir.1978) (state govern law held to (7th Cir.1979); Riley v. MEBA challenge post-effective date denial of Trust, (2d Pension benefits where necessary denial was result Cir.1977). of application nondiscretionary and self- applied for and was denied ben- executing plan adopted terms of ef- (if efits in any) 1980. His cause of action date). fective The result is the same where time, therefore accrued subsequent post-effective date formal denial is the effective date unequivocal pre-effec- inevitable result ERISA. interpretations tive date of or exercises of *6 plan.4 Quinn discretion under e.g., the See giving Conduct rise to the claim. § Country Club Soda 639 F.2d precludes But preemp also ERISA Cir.1981) (1st (state 840-41 gov- law held to respect pre-ERISA of state law with to challenge post-effective ern to date denial conduct. previously This court has dis § of where denial 1144(b)(1) benefits was “inexorable aspect cussed this of in Laffer consequence[ pre-effective Int’l, of numerous ty v. Solar Turbines 666 F.2d 408 ]” (9th Cir.1982) date to he curiam). stating communications claimant (per We acknowl edged participation was excluded in the there that ERISA would not from plan). preemption Jacques Orthopaed- where “the Freeman v. acts after the date Cf. merely Implant were of ic Joint adjunct Surgery formalities to a set & Medical Inc., (9th preemption Group, acts before the 721 F.2d date which Cir. 1983).5 were more substantially to related the stake, therefore, Freeman, post-ERISA employee at interests 5. a the In former who had ter- (i.e. triggering plaintiffs right event employment to sue ac- minated after ERISA's effective crual) (such may formality be a sought bring as an date to an action under on benefits), the official denial of while events ac- ground fraudulently the had been in- he tually litigation, having at issue in the occurred right participate to duced waive his to in his before, long judged must be under employer’s plan. benefit The former events sur- principles. In state-law these limited circum- rounding the had occurred waiver all stances, Congress provided governing neither date. ERISA’s effective This court found that law nor to a federal forum enforce it. had the district court had no to having plaintiff, entertain the action because case, course,

4. In either of the claimant would waiver, "participant” executed a was not a in rights may retain whatever he have had under standing plan had and thus no in state state law enforce them court. him from re- preclude credits and would within class The at bar falls action prior service. ceiving based on his benefits motion for granting Firestone’s cases. In subsequent denial of benefits district judgment, summary consequence” simply the “inexorable was events, Men- except that all relevant found years had taken position of the Firestone benefits, prior occurred request for horn’s before; of discretion it involved no exercise (ERISA’s effective January plan. interpretation Any of the or Men- date), denial of Firestone’s and that fiduciary duty of breach would claim ‘inex- merely the “was in 1980 horn’s claim ” on Firestone’s therefore have be based adoption prior its consequence’ orable in 1967. All of the con- actions relevant and its admo- policy break-in-service liability must on basis of which duct of his relocation the time nitions to him at having prior occurred assessed reviewing sum- While in to California. § 1144(b)(1) requires that the state necessarily we are not mary judgment of the conduct law in effect the time Heiniger see findings below, by the bound govern Menhorn’s claim. Phoenix, City Cir.1980), accept here in the them we as one at bar must Cases such See dispute. Fed.R.Civ.P. any distinguished absence from those in which benefits ac- 56(e).6 Although cause of signifi- denied as the result of a have been 1980, clearly the interpreta- until or tion did not accrue act of discretion under cant place giving rise it occurred at which took after acts tion of the substantial plan provision he effective date. A was told that the latest requiring interpretation does his discretion terminate service resignation would 1132(a). 6. observes that Menhorn’s com- bring Plaintiffs sole The dissent § to remedy suit under allegations arbitrary plaint the circumstances was state-law contained against upon al- denying whose action for fraud those capricious him Firestone leged misrepresentations plaintiff had relied. allegations might While those benefits ground As 721 F.2d at 656. an alternative the motion to been sufficient to withstand have dismiss, decision, Lafferty opinion relied on the stage, they are not sufficient at test, stating: having with no facts to come forward All of the facts fundamental Freeman’s allegations opposition to Fire- support those is not a case claim occurred in 1971. This judgment. summary stone's motion for in which substantial facts occurred after 56(e). Fed.R.Civ.P. ERISA, therefore, is ERISA’seffective date. question turns— on which proper not a basis for the claim. after Janu- relevant conduct occurred whether 721 F.2d at 656-57. clearly put ary in issue 1975—was distinguish The dissent seeks both Freeman moving summary judgment motion. Quinn, ground supra, on the that because summary judgment, presented the is- Firestone plaintiff participant both cases was not law, asserting that no material sue as one of plan, jurisdiction precluded op- dispute. no Menhorn offered facts were in 1132(a), question terms of scope position version the facts to Firestone’s 1132(e) properly was not reached. *7 supporting declarations. (cid:127)established in its ground Quinn and stand on different Freeman established, and the district respect, Those declarations this however. from one another found, participa- admittedly that acts relevant to loss Freeman had waived his all tion; 1975, January that waiver was an element essential benefits occurred before Quinn, hand, fraud claim. was merely on other con- the "inexorable that the denial was determination, challenging plan fiduciaries' prior sequence” events. long to him was in communicated before ERISA arbitrary proof on the issue of burden of The force, nonparticipant A of his status. claimant clearly by capricious Firestone nonparticipa- such as Freeman who admits his It was therefore Menhorn's obli- on Menhorn. tion failed to state substantial federal has gation opposing motion to come Firestone's ERISA, Hood, see Bell v. claim under that he could facts that showed forward with L,Ed. 678, 682-83, S.Ct. thereby proof trial and his burden of at meet (1946), seek law. A and must relief under other subject jurisdiction. matter also sustain federal on the claimant who has been denied relief so, having hardly is do it failed fiduciary’s interpretation, plan basis of now, proposes, appropriate as the dissent claim, hand, can an ERISA un- the other state complaint go appellate court to back precludes application of ERISA it less subject jurisdiction. find Quinn. did in deny not work to any provision individual benefits interpret federal law to specifically applied until to him. A enforce, denial there is no interest in providing a pursuant provision benefits to such a federal forum. Sections 1132 and 1144 operates thus simultaneously as both the together read congressional reflect no in- triggering event accrual of a cause of ac- tent to burden the federal courts with a tion and the substantial act resulting in new class of having actions nothing to do benefits, denial supra. see Lafferty, It Cohen, with federal law. The Broken Cf. would therefore not fall within either Compass: Requirement The that a Case § 1144(b)(1), clause of and would under “Directly” Law, Arise Under Federal § 1144(a) See, e.g., ERISA. (1967). U.Pa.L.Rev. Plan, Sharing Paris v. 637 F.2d Profit (5th Cir.) (ERISA 360-61 gov- held to legislative history, although not - post-effective ern date denial of benefits speaking directly question, to the similarly plan adopted date, before effective discloses no such intent. The Conference provision because relevant ambiguous so Report only Committee states that “[t]he that its was event most essen preemption provision ... will not affect claim), plaintiffs’ denied, tial to cert. 454 any causes of action that have arisen be- U.S. 70 L.Ed.2d 117 1, 1975, January fore and will not affect (1981); Winer v. Edison Bros. Stores Pen any act or omission which occurred before Plan, sion Cir. H.R.Conf.Rep., date.” supra, re- 1979) (ERISA govern held to enforceability printed in Cong. U.S.Code & Ad.News boy” of “bad forfeiture clause invoked af Though explicitly only concerned ter respect ERISA’s effective date with scope preemption, with the of ERISA alleged occurring misconduct before that implies statement pre-1975 actions and date, because forfeiture clause found to be conduct are to wholly by unaffected non-self-executing, and effective law, either preemp- substantive specifically applied plaintiffs). As we tion or jurisdiction. certainly It noted Gordon v. ILWU-PMA Benefit suggest does not preempt- that matters not Funds, (9th Cir.1980): 616 F.2d 433 “Since ed the new federal neverthe- law should duties did not become litigable less be in federal court. effective until a violation of those duties must amount to a breach of general The same can be said for the trust administration of the after legislative policy statement of found in 29 (emphasis added). that date.” Id. at 437 § 1001(b): Federal over Menhorn’s ac- hereby It declared policy to be the protect Act to interstate commerce Having gov- established that state law participants and the interests of in em- claim, erns Menhorn’s we arrive at the ployee plans and their beneficiar- question appeal: central to this Did Con- by establishing ies ... standards of con- that, gress intend even in cases where ERI- duct, responsibility, obligation for fi- by its own supplant SA terms does not plans, duciaries applicable law, otherwise a federal remedies, by providing appropriate open forum should be to enforce that state sanctions, ready access to the Feder- suggests law? statement of the issue al courts. *8 § Although its resolution. speaks 1144 again Here suggests the context a congres- only preemption, in terms of we think the sional intent to provide “ready access to that it conclusion inevitable also indicates the Federal courts” for the regarding construction legislative scope intent of the § and enforcement of 1132(e). newly jurisdiction conferred under See “estab- conduct, standards of responsibili- Martin v. Bankers Trust 565 F.2d lished] 1276, (4th Cir.1977). ty, obligation 1278-79 fiduciaries,” For without not for

1504 (1913); 102, 179 101, L.Ed. 199, 58 concerning employee 34 S.Ct. all causes (1 Peggy, 5 U.S. v. United States plans.7 benefit (1801). In this Crunch) 2 L.Ed. 49 dif have taken a seem A few courts on Congress not silent case, not was ap Some problem. approach ferent retroactivity ERI- question of the ERI- perceive as they rely what pear to on law, explicit it statutory common SA’s common law” of a “federal creation SA’s § in order contrary in 1144 ly directed the concerning employ litigation all governing on standards imposing avoid irrespective of plans ee benefit Malone v. White pre-ERISA conduct. See See, e.g., place. took material events 1, 497, 98 Corp., 435 U.S. 499 n. Motor & Stewards Marine Cooks v. (1978). 1185, 1, 443 n. 55 L.Ed.2d 1187 Woodfork S.Ct. Cir.1981); 966, (5th Union, 969-74 642 F.2d of the statu explained in our discussion As 1266, Shannon, F.2d 581 Reiherzer v. above, Congress authorized tory scheme Cir.1978) (“federal common (7th 1269-72 preemptive federal develop a the courts to predi provide jurisdictional law” found only those matters governing common law accrued and § action that both cate for an 1144(b)(1), scope falling outside occurring ER on conduct was based preserves the effect of expressly which § date; men 1144 not ISA’s effective specified circumstances— in the state law § 1132 to tioned). has found applied, One is, common law that that a federal § jurisdiction to prospec grant 1144, a comprise according to the terms of under preempted not state law application where it is would tively only. Prospective § Glendenning Motor Landro v. that actions carry Congress’s intent 1144. out 1344, (8th Inc., regarded to be ways, brought F.2d ERISA “are 625 arising the laws of the United Cir.1980).8 brought to those in similar fashion States unpersuasive. find these cases We Labor-Manage 301 of the under section ef given retroactive will not be A statute 1947,” H.R.Conf. Relations Act of ment See, intent. legislative clear fect absent Rep., supra: Section 301 also authorized Indus. Security v. e.g., States United pro common law of a federal the creation 413, Bank, 70, 407, 74 103 S.Ct. 459 U.S. No. 17 Local Union only. spectively R. v. Pac. Co. (1982); Union L.Ed.2d 235 Co., 687, Hanger 691 v. Mason & Co., Yards Laramie Stock International Al Cir.1954); v. (2d Schatte Fund, Morgan 433 support v. Laborers Pension Trust purports for its to find 7. The dissent leading legisla (N.D.Cal.1977), distinguishable F.Supp. position a is in the statements of 518 issue, and en that ERISA's “substantive tive conferee inasmuch as the district court on this pre ... are intended to jurisdic- forcement independent basis for there found an ..., eliminating empt the threat of the field thus Labor-Management Re- tion under 302 regu conflicting and local or inconsistent State Act, U.S.C. 186. Id. at 524. Bacon lations Cong. employee plans.” lation of (N.D.Cal.1978), ap- Wong, F.Supp. 1189 (statement 1974) (Aug. of Sen. Rec. S 15737 Williams), plied law to a claim based on state Cong. reprinted in & Ad. U.S.Code considering whether the court without conduct simply 5188. Senator Williams was News jurisdiction to do so. had articulating proposition that the uncontroversial Terpinas v. reliance on The dissent's Seafarer’s relating plans any employee law state America, N. 722 F.2d 1445 Intern. Union of en with ERISA’s “substantive and inconsistent Cir.1984), misplaced. was based That action is provisions" preempted unen forcement pension plan based a denial of benefits on Airlines, Inc., See, e.g., Shaw v. Delta forceable. change post-1975 - U.S. -, S.Ct. 2904 n. disability deprive of a (1983); Raybestos-Man Alessi 77 L.Ed.2d hattan, the terms in Inc., had become vested under which U.S. 451 (1981). appear before 1975. It does issue effect This is different L.Ed.2d questioned presented in the case at bar: Pre is not the one from timing, type, not the emption likely turns on the as the here have been inasmuch that it would acts, plaintiffs concedes plainly claim. dissent post-1975 based on sub action was governing rules law break-in-service the state ject to ERISA. governs action. Thus the threat possible substantive conflict between law is not an issue here. *9 1505 FERGUSON, Stage Employees, liance Theatrical Judge, Circuit dissenting: of (9th Cir.), denied, F.2d cert. I majority dissent. The denies federal (1950). U.S. 71 S.Ct. 95 L.Ed. 608 employee court access to plan par- application provi- Retroactive of ERISA’s ticipants pension whose claims have been plain sions is thus forbidden terms or will be denied after ERISA’s effective If, hand, of the statute. on the other retro- date when their claims are denied because application active of “federal common law” of acts or prior omissions that occurred accomplished by way were of of 1975. contrary This result is to the law of rules, preexisting state law it would contra- circuit, this as to express provi- well Congress’s purpose achieving vene of ERISA, sions of congres- and frustrates nationally system uniform rules. sional intent providing ready access to incorporation differing Wholesale the federal courts to pension enforce states, by labeling laws of the various them claims. “federal,” legisla- is inconsistent with the 1132(a)(1)(B) Title section of the Unit- purpose “eliminating tive the threat of ed provides States Code that a civil action conflicting or inconsistent State and local may brought by a participant or benefi- regulation plans.” ciary “to recover benefits due to him under Williams, 7, supra. Statement of Sen. note plan, terms of his rights to enforce his Finally, whether such rules of decision under the plan, terms of the or clarify styled are state law or retroactive federal to future benefits under the law, application by common their federal plan.” terms of the Such an action diversity courts citizenship absent be- brought in either state or district court. 29 parties tween the raises a serious constitu- § 1132(e)(1). majority, The how- § III, question. tional Article of the Con- ever, express nullifies grant of concur- provides judicial power stitution that the jurisdiction rent federal preemption via the shall, the United States in matters not in- § 1144(b)(1). of 29 U.S.C. volving parties diversity certain of citi- majority’s attempt mistake is its zenship, extend to cases or controver- construe preemption provision “arising sies under” federal law. While coextensively jurisdiction. with federal grant the limits of this have never been preemption provision of section 1144 defined, clearly congressional grant of governs courts’ choice-of-law decisions jurisdiction federal state law pension claims. It does not define the validity. would be of doubtful See Associ jurisdiction bounds of federal and was nev- Westinghouse ation Employ Salaried er intended to. Westinghouse ees v. Corp., Electric 437, 442, 452-54, U.S. agree majority While I with that the 496-97, (1955); 99 L.Ed. 510 Key Cowan v. jurisdiction federal has no under ERI- Employee Fund, stone Sharing Profit SA to hear a claim which the (1st Cir.1978). F.2d We will prior cause of action arises Congress attribute to an intent to make so 1975, I cannot conclude that when a cause problematic jurisdictional grant of action arises after ERISA’s effective absence of clear evidence of such intent. date, precluded be- See, e.g., Hopkins Fed. Sav. & Loan Ass’n. cause the claim is denied on the basis Cleary, 315, 334-35, 56 S.Ct. A acts or omissions. cause of 235, 239-40, (1935). 80 L.Ed. 251 prior action that arises to ERISA’s effec- provides

We conclude no ba- tive date does not “arise a federal under” thus, diversity, sis over Menhorn’s statute and absent there is Const, entry Ill, judg- jurisdiction. action. The district court’s no federal U.S. art. 1; case, ment is vacated and the action is remanded cl. 28 U.S.C. 1331. however, to the district court with directions to dis- Menhorn’s cause of action arose jurisdiction. year applied miss for lack of which he *10 1506 preemption and pension Par construction ERISA’s benefits. See was denied etc., Plan, correctly 637 Sharing F.2d has been jurisdictional

is v. Profit Cir.), denied, 357, (5th 454 U.S. cert. In by 361 other Landro v. applied courts. 140, (1981); 117 836, 70 L.Ed.2d Inc., 625 F.2d Glendenning Motorways, Pension Edison Bros. Stores v. (8th Cir.1980), brought Winer participants 1344 Cir.1979); 307, (8th Plan, 312 F.2d 593 provision under civil enforcement suit Fund, Trust Morgan v. Laborers Pension The of ERISA. court assumed 518, (N.D.Cal.1977). F.Supp. 522 n. 5 433 jurisdiction, applied state law to but of action thus arose cause Menhorn’s propriety pre-ERISA acts evaluate statute, and district court had a federal Similarly, in omissions. Bacon v. jurisdiction. See subject matter (N.D.Cal. F.Supp. 445 1192-93 Wong, (“It Cong. Ad.News 5188 is intend & Code 1978), jurisdic the district court assumed brought suit to recover benefits ed that [a cause of action tion under ERISA when the regarded plan] of a will be the terms January applied after but arose arising of the United under the laws as acts and pre-ERISA law omis California States.”) (comment Harrison of Senator pursuant preemption ex sions Williams). ceptions. court had no holding In district Thus, examining in Firestone’s denial of over Menhorn’s claim because pension in claim section denied Firestone on it was basis retroactively precludes apply- 1144 us from act, majority expressly disre- pre-1975 prohibition against ing ERISA’s break-in- the law of this circuit that ERISA gards rules, 1053, to see U.S.C. Fire- service interpret pension federal courts to permits pre-ERISA plan. fiduciary stone’s pre-ERISA light state plans law of Firestone as trustee 1980 is conduct rights irrespective of when the material light that in evaluated of the fact 1967 it concerning place. took events the claim law permissible under state for an Terpinas v. Intern. Union Seafarer’s pension to lose his benefits be- America, (9th Cir.1984), N. F.2d 1445 in service. We are not cause of break held that: we law; are enforcing state rather we evaluat- legislative history indi of ERISA of a trustee under ing the conduct § 1132(a)(1)(B) cates [29 ] judging “without the conduct of body Congress intended to create a persons by affected standards different governing federal common law they applied which act- from those augment rights rights which would F.Supp. at Wong, ed.” Bacon v. 1192. provi created ERISA’s substantive Plan, etc., Sharing Paris See Profit sions. Marine Cooks & Woodfork (“The 1,1975, January F.2d at 360 effective Union, Stewards § 1144 means of 29 U.S.C.A. that the date Cir.1981). body This of federal com cannot held liable dam- defendants “interpret mon law allows a arising committed ages from acts pension plan’s light of a work terms long comported those with state so as acts pre-ERISA rights.” er’s law existed.”). as it then law Accordingly, Woodfork, supra, at 973. plaintiff] may Extending assert his substantive over Men- federal [the plan pursuant cause of does not horn’s furnish a part judicially law “as of a California enforcing forum state law. body governing created of federal law majority opinion, supra, pension entitlement.” Id. expressed by III The Article concerns only in majority have discussed been those at 1447. The court held that Id. Woodfork providing a cases concerned with arising January of action after “a cause forum to a cause of action which arose though is an ERISA claim even prior to ERISA’s enactment. Those con- occur- part be founded on earlier when, here, F.2d at 970. This cerns do cause Woodfork, rences.” of action arises after ERISA’s claim plan, effective for benefits under the or if he did, “Providing date. a federal forum for caus- when it was made. Nor does the court arising es of action after 1975 state when alleged Freeman discovered the *11 implications, Thus, raised fewer constitutional fraud. absolutely there is finding no though possible by even it was still the cause the court that Freeman’s cause of action might primarily be on events occur- based arose after ERISA’s effective date. Fur- ther, ring 1975.” admittedly Marine Freeman partici- was not a Woodfork Union, pant 642 F.2d at 972 in Cooks & Stewards the pension plan, defendant thus, n. 6. the district court lacked juris- ERISA diction over his claim. Rather than follow this common-sense interpretation preemption approach The by majority taken the ERISA, majority Quinn the holds that certain the First Circuit in is inconsist- may “acts or in- omissions” ent with express grant ERISA’s of concur- preclude juris- jurisdiction stead federal rent to the federal courts to Only opinion claims, diction. one circuit pension cited enforce 29 U.S.C. however, majority, actually 1132(e)(1), the holds that and at odds with the Act’s stated, when purpose a cause of action arises after of “providing ready ... ac- jurisdiction may ERISA 1001(b). nonethe- cess to the Federal courts.” Id. by pre-1975 less ignores be barred acts or omis- It also congressional intent that the Quinn Country exceptions sions. See Club Soda to preemption provi- Co., Inc., (1st Cir.1981). 639 F.2d 838 narrowly The sions be construed: support remainder of the decisions lend no It should be stressed that with the majority approach to the they because ei- exceptions specified bill, narrow in the uphold jurisdiction ther ERISA or bar fed- the substantive provi- and enforcement eral because the cause ac- sions preempt ... are intended to the prior tion arose to 1975. regulations, field for Federal thus elimi- nating conflicting the threat of or incon- Quinn distinguishable is from the sistent regulation State and local em- present Quinn case because was neither a ployee plans. participant in beneficiary nor a of the de- pension plan, Cong. fendant 1974 U.S.Code & fact of which he Ad.News (comments Williams). repeatedly consistently of Senator informed. See 639 F.2d at 841. ERISA Presumably, employment had Menhorn’s private over civil actions to enforce ERISA terminated, majority approach pension rights participants extends to deny right would also Menhorn his to a plan. beneficiaries of a 29 U.S.C. clarify rights federal forum to § 1132(a)(1)(B). dispute There is no that pension plan if Firestone’s the clarification participant Menhorn was a in Firestone’s sought he was what effect his 1967 break- and, pension plan such, standing he had pension rights. would have on his in-service bring an ERISA action to enforce his' Such a construction is at odds with ERI- plan. under the express provision SA’s of a federal forum clarify participant’s right to future Nor does this circuit’s recent in decision pension benefits. 29 U.S.C. Jacques Orthopaedic Freeman v. Joint& § 1132(a)(1)(B). Implant (9th Cir.1983) Surg., 721 F.2d 654 provide support Further, majority holding. for the proceed if Menhorn chooses to challenged court, validity Freeman of his in required that court will be right participate pen- waiver of the in a evaluate Firestone’s conduct in plan, alleging sion that the waiver had been Menhorn’s claim I was denied. assume procurred through misrepresen- majority fraudulent dispute that the does not that regarding tations ruling post-1974 conduct, made the cost of on Firestone’s participation plan. opinion does federal standards of ERISA must ap- Thus, plied. not indicate Freeman ever made a majority whether commits to the plan fective date and to determine how duty apply federal law state courts the majori- break in service. ruling Menhorn's claim. treated Menhorn's 1967 however, ty, ironically alleged denies determination same power capri- courts arbitrary and made Firestone was body regulation. allegation may support an Such an cious. claim. trustee’s denial of bene- ERISA A theory of ERI- majority’s Even under the pre- plan fits an on a based however, opinion errs jurisdiction, SA arbitrary ERISA break service cause ac- concluding that Menhorn’s capricious if, example, the trustee wholly occurring on events based ambiguity into reads alleges date. Menhorn before the effective is not relating to break service that *12 that Firestone violated the duties apparent plan. on the face the ERISA, 29 see established Titus, F.Supp. Snyder v. 513 at 935. disposition 1104(a)(1), handling and pro- in his Firestone’s conduct claim. alleging that Firestone’s In addition cessing subject 1980 is claim in Menhorn’s policy the break-in-service fiduciary to ERISA’s standards. See Rus- fiduciary Menhorn’s claim was a breach of Co., sell v. Mutual Ins. Massachusetts Life alleged Menhorn that Fire- duty, further Cir.1983) (“ERISA 482, (9th F.2d 722 488 past application of stone in the had waived in regulates fiduciary conduct ... the han- Men- the rule others. break-in-service claims.”); dling disposition and Paris v. alleged that: complaint horn’s Plan, etc., 637 F.2d 360- Sharing Profit Company past has in the restored the (“The plaintiffs protest, the 61 non-exempt for sal- credited service dates review, one is the we must trustee’s plaintiff, personnel, such as said aried interpretation Sharing Profit 1975 employees having been terminated other Only did it Plan. with that decision become in periods days, of four such for excess plaintiffs clear that would denied Accordingly, plaintiff plaintiff here. omitted); benefits.”) (footnote Gordon v. thereupon asserts that the believes 433, Fund, 616 F.2d ILWU-PMA Benefits Company’s Plan Adminis- decision (“The (9th Cir.1980) trustees’ denial grant credited refusing trator in after estate’s claim occurred Janu capri- arbitrary date service was ary 1975; therefore, time at the of the ____ cious denial, subject to the trustees’ actions were Therefore, alleged Fire- Menhorn standards.”). When of his claim involved an exer- stone’s denial in applied for benefits his ap- cise discretion—the choice to waive governed by claim the version of the plication of the rule—and break-in-service plan pension then effect. See Hicks waiving Menhorn’s not break Association, 567 F.2d Maritime Pacific service, arbitrary Firestone’s actions were (9th Cir.1978); Budwig 357 v. Natel allegations These chal- son’s, capricious. Retirement, 576 Sharing Inc. Profit (D.Neb.1982), lenged “substantial acts” Firestone F.Supp. 661, aff'd, date, Cir.1983) effective curiam); after ERISA’s (per Sny F.2d 977 subject (E.D.Va. provide a for federal Titus, thus basis F.Supp. der v. 1981). majori- jurisdiction matter even required Firestone was 1980 to adopted ty’s interpret a after ERISA’s ef- construction.1 assertion, required Contrary majority’s supra, to reassert the issue to the see was Menhorn summary judgment. repeat opposing the p. motion 1502 n. Menhorn's failure nonmoving party genuine allegation opposing has the motion for sum When the raised evidentiary mary jurisdic and the matter judgment does defeat federal issue of material fact not dismiss, summary judgment support To it is of motion tion. avoid motion to genuine necessary pleadings absence demon does not establish the that Menhorn’s issue, nonmoving support finding jurisdic party required facts which strate evidentiary present opposing material. See Ad Societe de Hunter En tion. Conditionnement (9th Cir.1981). gineering, Nor v. S.H. Kress & ickes court had sub- I believe that the district

ject matter over of action arises

claim. Menhorn’s cause to en- federal statute. He seeks

under a participant in an ERI- his as a

force challenges the fiduci- pension plan and

SA in 1980 when

ary conduct of the trustees That is suf- was denied. claim

ficient to confer the federal court.

ASPEN HIGHLANDS SKIING CORPO-

RATION, Corporation, a Delaware Cross-Appellant,

Plaintiff-Appellee, COMPANY, a

ASPEN SKIING Colorado Partnership, De- Substituted

General Cross-Appellee.

fendant-Appellant, 82-1407,

Nos. 82-1424. Appeals, Court of

United States

Tenth Circuit.

July employees. policy (1970); to other Upjohn break-in-service Dalke v. Cir.1977). summary required respond Firestone’s motion Menhorn therefore was not allegation address Menhorn’s judgment preserve did not that issue. in order application had waived that Firestone