M. Todd Jenks v. DLA Piper LLP (US) et al
Filing
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ORDER by Judge Vince Chhabria granting Motion to Stay and denying 11 Motion to Dismiss without prejudice. (knm, COURT STAFF) (Filed on 6/3/2015)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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M. TODD JENKS,
Case No. 15-cv-00254-VC
Plaintiff,
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v.
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DLA PIPER LLP (US), et al.,
Defendants.
United States District Court
Northern District of California
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ORDER GRANTING MOTION TO
STAY AND DENYING WITHOUT
PREJUDICE THE REMAINING
MOTIONS
Re: Dkt. No. 11
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In this lawsuit, Jenks alleges that DLA Piper violated ERISA by, among other things,
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misclassifying him under the firm's 2005 UNUM long term disability policy. DLA Piper has
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moved to dismiss on the ground that Jenks "waived" the ERISA claims because he asked an
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arbitrator to decide them and because she decided them adversely to him. DLA Piper alternatively
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moves to dismiss for failure to state a claim. As a third alternative, DLA Piper moves to stay the
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case pending the outcome of Jenks' appeal in a prior related case. Finally, it moves to join UNUM
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as a necessary party. As discussed below, the motion to stay the case is granted, and the
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remaining motions are dismissed without prejudice to refiling them when the stay is lifted.
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1. In the prior related case, Jenks petitioned this Court to set aside the arbitrator's ruling on
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the ground that she misapplied ERISA. Among his arguments in the prior case was that the
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arbitrator misapplied ERISA when she denied his request for a declaration of his rights under the
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2005 UNUM policy. This Court dismissed the petition for lack of subject matter jurisdiction,
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concluding that Jenks' allegations that the arbitrator manifestly disregarded federal law were, on
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the face of the petition, patently without merit. If it turns out, contrary to this Court's ruling in the
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prior case, that there is federal jurisdiction over the petition to set aside the arbitration, the issues
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presented by that petition and by this lawsuit will be best adjudicated together.
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Furthermore, the Ninth Circuit's upcoming ruling on this Court's dismissal of the prior case
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could have an impact on this case. As mentioned above, in the first lawsuit this Court concluded
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that Jenks' allegations that the arbitrator manifestly disregarded ERISA law were, on the face of
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the petition, patently without merit. In that case, the Court (and the parties) neglected to focus on
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the possibility that the arbitrator should be deemed not to have ruled on the ERISA issues relating
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to the UNUM policy. But now that DLA Piper has made a "waiver" argument in this case, Jenks
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contends that the arbitrator did not actually decide the ERISA issues relating to the UNUM policy.
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He might be right about that, although the arbitrator's ruling is unclear on the point. If the
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arbitrator's ruling is best understood as not having decided the ERISA issues relating to the
UNUM policy, presumably this would have been an additional reason to dismiss the petition to set
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United States District Court
Northern District of California
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aside the arbitration for lack of jurisdiction, at least to the extent the allegations of manifest
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disregard of federal law related to the UNUM policy.
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The central ERISA dispute in the current case is whether Jenks is properly classified under
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the UNUM policy. That dispute will only have significant practical consequences if the plan
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administrator determines that Jenks is no longer disabled from performing "any occupation," but
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that he continues to be unable to perform his "own occupation." If the plan administrator makes
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such a determination, Jenks may file a motion to lift the stay, even if the Ninth Circuit has not yet
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decided his appeal in the prior case.
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2. The motion to dismiss the complaint on the "waiver" grounds is denied without
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prejudice to raising the issue again after the stay is lifted. As mentioned above and as discussed
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more extensively at the hearing, there is a reasonable argument that the arbitrator didn't rule on
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these claims. If that is correct, DLA Piper would not have an argument that Jenks "waived" his
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claims in this lawsuit by presenting them to the arbitrator and receiving an adverse ruling on them.
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But since this case is being stayed, it is better to defer this question until after the Ninth Circuit
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issues its ruling in the prior case.
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It bears noting that doctrines other than "arbitration waiver" could warrant dismissal of this
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lawsuit based on Jenks' prior litigation conduct, even if it is ultimately determined that the
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arbitrator did not rule on the ERISA claims relating to the UNUM policy. For example, as
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discussed above, in his prior action to set aside the arbitrator's ruling, Jenks asserted that the
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arbitrator manifestly disregarded federal law in ruling against him on claims relating to the UNUM
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policy. It seems strange that Jenks could, after making such an argument, turn around and file a
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new lawsuit based on the premise that the arbitrator didn't decide those issues. It also may be that,
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if the arbitrator truly failed to rule on the UNUM claims, Jenks was required to raise this failure in
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state court. But DLA Piper's motion to dismiss this lawsuit on procedural grounds is limited to the
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argument that Jenks "waived" his claims relating to the UNUM policy because he had previously
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submitted them to the arbitrator and lost.
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United States District Court
Northern District of California
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3. The motion to dismiss for failure to state a claim is denied without prejudice to
renewing it after the stay is lifted.
4. The motion to join UNUM as a necessary party is denied without prejudice to renewing
it after the stay is lifted.
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IT IS SO ORDERED.
Dated: June 3, 2015
______________________________________
VINCE CHHABRIA
United States District Judge
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