*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 violatiоns 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.Nеws 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 benеficiary 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 irresрective 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 thе 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 prinсipally 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 prеcludes 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
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
requеst
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
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)
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(а)(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
crеated
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
thе 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
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