Tao et al v. Wu et al
Filing
76
ORDER by Judge Hamilton Granting in Part and Denying in Part 66 Motion to Dismiss (pjhlc2, COURT STAFF) (Filed on 4/2/2012)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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MINNA TAO, et al.,
Plaintiffs,
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v.
DEBBY WU, et al.,
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For the Northern District of California
United States District Court
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No. C 11-3248 PJH
ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO
DISMISS
Defendants.
_______________________________/
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Defendant’s motion to dismiss came on for hearing on March 14, 2012 before this
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court. Plaintiffs Brandon and Erin Banks (“plaintiffs” or “the Banks”) appeared through their
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counsel, Kirk Wolden, Michael Ram, and Ryan Lutz. Defendant Nissan North America, Inc.
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(“Nissan” or “defendant”) appeared through its counsel, G. Charles Nierlich, and Rachel
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Flipse. Having read all the papers submitted and carefully considered the relevant legal
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authority, the court hereby GRANTS defendant’s motion in part and DENIES it in part, for
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the reasons stated at the hearing, and summarized as follows:
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1.
Plaintiffs’ state law claims alleging breach of fiduciary duty and negligence are
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preempted, since plaintiffs’ allegations sufficiently “relate to” an ERISA plan, such that
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preemption results. Plaintiffs have clearly alleged that they participated in the DCP II plan,
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that the DCP II plan was wrongfully designated as “exempt” from ERISA, and that they are
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seeking relief under ERISA for benefits due under the DCP II plan. See SAC, ¶¶ 29, 33-
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35. The general gravamen of plaintiffs’ complaint is thus premised on treatment of the DCP
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II plan as an ERISA plan, and can be read to state that the plan required defendants to
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comply with certain ERISA regulations, and that defendants did not do so. In addition, the
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actual DCP II plan submitted by plaintiffs itself contains the following provision: “The Plan is
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intended to be an unfunded deferred compensation plan for a select group of executives
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and highly compensated employees within the meaning of ERISA sections 201(2),
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301(a)(3) and 401(a)(1).” See Lee Decl., Ex. A at § 11.10. Accordingly, and in sum,
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plaintiffs’ state law claims “relate to” an ERISA plan, and the claims are thus preempted.
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Defendants’ motion to dismiss on this ground is GRANTED.
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2.
Defendants’ motion to dismiss plaintiffs’ first claim for relief alleging breach of
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fiduciary duty under ERISA § 502(a), is without merit. Defendants contend that the DCP II
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is a “top hat” plan and ERISA’s fiduciary provisions do not apply to top hat plans. However,
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plaintiffs have alleged to the contrary. They have alleged that the DCP II plan was “wrongly
designated” a top hat plan; that it was not a top hat plan because it was “not limited” to a
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For the Northern District of California
United States District Court
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select group of management or highly compensated employees; and that it was not a top
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hat plan because plaintiffs funded the plan by deferring their monthly salaries in advance.
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See SAC, ¶¶ 35-36. The question of whether, in practice, the DCP II plan functioned as a
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top hat plan – and therefor was, in fact a top hat plan – is fundamentally a factual one, and
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it must be resolved with a proper factual and evidentiary record. See Credit Managers
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Ass'n v. Kennesaw Life & Acc. Ins. Co., 809 F.2d 617, 625 (9th Cir.1987)(“[T]he existence
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of an ERISA plan is a question of fact, to be answered in the light of all the surrounding
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circumstances from the point of view of a reasonable person”). Accordingly, defendants’
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motion is DENIED.
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3.
Defendants’ motion for dismissal of plaintiffs’ second claim for relief seeking
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recovery of benefits due under ERISA is GRANTED in part and DENIED in part. The
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motion is GRANTED, to the extent defendants seek dismissal on grounds that defendants
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cannot be held personally liable for plan benefits, and are not proper defendants. While
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“potential defendants in actions brought under § 1132(a)(1)(B) should not be limited to
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plans and plan administrators,” proper defendants are limited to defendants with actual
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responsibilities under ERISA that were purportedly breached. Cyr v. Reliance Standard
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Life Ins. Co., 642 F.3d 1202, 1206 (9th Cir. 2011). And here, although plaintiffs have
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alleged that each defendant was a member of the Plan Administration Committee (or the
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Compensation Committee), plaintiffs have alleged nothing about any actual and specific
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obligations and duties that were purportedly delegated to each defendant, and which each
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defendant breached. Similarly, defendants’ motion is furthermore GRANTED to the extent
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that defendants contend that plaintiffs’ complaint does not adequately set forth plausible
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allegations against each defendant, as understood by Twombly and Iqbal. See Bell Atlantic
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Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct.
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1937, 1950 (2009). Plaintiffs fail to allege that the defendants were fiduciaries of the DCP
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II, or to allege that defendants had any “insider” knowledge about the status of the Bank’s
financial health, such that plaintiffs’ claims of breach of fiduciary duties are plausible.
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For the Northern District of California
United States District Court
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Leave to amend is granted with respect to the two foregoing grounds, so that plaintiffs may
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attempt to cure the deficiencies noted herein.
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To the extent, however, that defendants move to dismiss plaintiffs’ claim on grounds
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that plaintiffs have failed to exhaust administrative remedies, as required by the claim
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procedures stated in the DCP II; and on grounds that the underlying Plan was in fact
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administered in accordance with its terms, defendants’ motion is DENIED.
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4.
Finally, to the extent defendants seek to strike plaintiffs’ request for a jury
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trial, defendants’ motion is well-taken. The Ninth Circuit has ruled that ERISA actions are
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not tried to the jury. See Blau v. Del Monte Corp., 748 F.2d 1348 (9th Cir. 1984),
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abrogation on other grounds recognized by Abatie v. Alta Health & Life Ins. Co., 458 F.3d
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955 (9th Cir. 2006); see also In re Vorpahl, 695 F.2d 318 (8th Cir. 1982).
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IT IS SO ORDERED.
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Dated: April 2, 2012
______________________________
PHYLLIS J. HAMILTON
United States District Judge
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