Articles Posted in US Court of Appeals for the Ninth Circuit

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Current and former employees of the University of Southern California may not be compelled to arbitrate their collective claims for breach of fiduciary responsibility against USC in an action under the Employee Retirement Income Security Act (ERISA). The Ninth Circuit affirmed the district court's denial of USC's motion to compel arbitration of claims for breach of fiduciary duty in the administration of two ERISA plans. The panel held that the district court properly denied USC's motion to compel arbitration where the claims asserted on behalf of the Plans in this case fell outside the scope of the arbitration clauses in individual employees' general employment contracts. View "Munro v. University of Southern California" on Justia Law

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A company must assume the unpaid withdrawal liability of its predecessor to a multiemployer pension plan if it was on constructive notice of potential withdrawal liability. The Ninth Circuit reversed the district court's judgment for plaintiffs in an action under the Multiemployer Pension Plan Amendment Act (MPPAA). The panel held that congressional purpose, the liberal remedial construction of the MPPAA adopted in previous cases, the adoption of a constructive notice standard in other contexts, and the practical realities of asset purchases all support a conclusion that constructive notice of withdrawal liability is sufficient to trigger successor withdrawal liability under the MPPAA. Applying a constructive notice standard in this case, the panel held that Amstar had constructive notice because a reasonable purchaser would have discovered Ohana's withdrawal liability. View "Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan" on Justia Law

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The Ninth Circuit reversed the district court's judgment for MetLife in an Employee Retirement Income Security Act (ERISA) action. MetLife denied coverage because plaintiff's leg injury was complicated by his diabetes. The panel held, however, that plaintiff was entitled to coverage because his diabetes did not substantially cause his leg injury from an automobile accident nor did diabetes contribute to his injury. Accordingly, the panel remanded for further proceedings. View "Dowdy v. Metropolitan Life Insurance Co." on Justia Law

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The Ninth Circuit reversed the district court's judgment for MetLife in an Employee Retirement Income Security Act (ERISA) action. MetLife denied coverage because plaintiff's leg injury was complicated by his diabetes. The panel held, however, that plaintiff was entitled to coverage because his diabetes did not substantially cause his leg injury from an automobile accident nor did diabetes contribute to his injury. Accordingly, the panel remanded for further proceedings. View "Dowdy v. Metropolitan Life Insurance Co." on Justia Law

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The Ninth Circuit affirmed the district court's dismissal of an action under the Employee Retirement Income Security Act (ERISA). In this case, employee benefit trust funds sought unpaid contributions owed under the contracts governing the benefit plans that the trust funds managed for Accuracy Glass & Mirror Company. The panel held that plaintiffs' claims were foreclosed by Bos v. Bd. of Trustees (Bos I), 795 F.3d 1006 (9th Cir. 2015), which held that employers are not fiduciaries under ERISA as to unpaid contributions to ERISA benefit plans. View "Glazing Health & Welfare Fund v. Lamek" on Justia Law

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The Ninth Circuit affirmed the district court's dismissal of an action under the Employee Retirement Income Security Act (ERISA). In this case, employee benefit trust funds sought unpaid contributions owed under the contracts governing the benefit plans that the trust funds managed for Accuracy Glass & Mirror Company. The panel held that plaintiffs' claims were foreclosed by Bos v. Bd. of Trustees (Bos I), 795 F.3d 1006 (9th Cir. 2015), which held that employers are not fiduciaries under ERISA as to unpaid contributions to ERISA benefit plans. View "Glazing Health & Welfare Fund v. Lamek" on Justia Law

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A plan administrator is not an Employee Retirement Income Security Act (ERISA) fiduciary when negotiating its compensation with a prospective customer. The Ninth Circuit reversed the district court's order denying defendants' motion to dismiss an action alleging breach of fiduciary duties in connection with a retirement plan. The panel held that defendant was not a fiduciary with respect to its receipt of revenue sharing payments from investment managers because the payments were fully disclosed before the provider agreements were signed and did not come from plan assets. The panel agreed with other circuits and held that defendant also was not a fiduciary with respect to its withdrawal of preset fees from plan funds. The panel explained that when a service provider's definitively calculable and nondiscretionary compensation was clearly set forth in a contract with the fiduciary-employer, collection of fees out of plan funds in strict adherence to that contractual term was not a breach of the provider’s fiduciary duty. The panel vacated class certification orders and remanded with instructions to dismiss the complaint. View "Santomenno v. Transamerica Life Insurance Co." on Justia Law

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A plan administrator is not an Employee Retirement Income Security Act (ERISA) fiduciary when negotiating its compensation with a prospective customer. The Ninth Circuit reversed the district court's order denying defendants' motion to dismiss an action alleging breach of fiduciary duties in connection with a retirement plan. The panel held that defendant was not a fiduciary with respect to its receipt of revenue sharing payments from investment managers because the payments were fully disclosed before the provider agreements were signed and did not come from plan assets. The panel agreed with other circuits and held that defendant also was not a fiduciary with respect to its withdrawal of preset fees from plan funds. The panel explained that when a service provider's definitively calculable and nondiscretionary compensation was clearly set forth in a contract with the fiduciary-employer, collection of fees out of plan funds in strict adherence to that contractual term was not a breach of the provider’s fiduciary duty. The panel vacated class certification orders and remanded with instructions to dismiss the complaint. View "Santomenno v. Transamerica Life Insurance Co." on Justia Law

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The Ninth Circuit reversed the district court's denial of appellate attorney's fees under the Employee Retirement Income Security Act, 29 U.S.C. 1132(g)(1). The panel held that, pursuant to Sokol v. Bernstein, 812 F.2d 559, 561 (9th Cir. 1987), a court must consider the entire course of the litigation when analyzing a party's request for appellate attorney's fees within the Hummell v. S.E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980), rubric. Accordingly, the panel remanded to the district court for calculation of a reasonable award of fees and costs. View "Micha v. Sun Life Assurance of Canada" on Justia Law

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The Ninth Circuit reversed the district court's judgment in favor of MetLife in an action filed by plaintiff to seek life insurance benefits under a benefits plan governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The panel held that MetLife waived the evidence of insurability requirement because it did not ask plaintiff for a statement of health, even as it accepted her premiums for $250,000 in coverage. In this case, MetLife's purported ignorance of the facts did not negate its obligation to pay the entire $250,000 because, under agency law, the policyholder-employer's knowledge and conduct may be attributed to MetLife. View "Salyers v. Metropolitan Life Insurance Co." on Justia Law