May 8, 2015, Argued and Submitted, Portland, Oregon
Appeal from the United States District Court for the District of Oregon. D.C. No. 3:11-cv-01487-ST. Michael H. Simon, District Judge, Presiding.
Employee Retirement Income Security Act
The panel affirmed the district court's summary judgment in favor of Hillsboro Garbage Disposal in an action brought against a subscribing employer by a health and benefit plan that was governed by the Employee Retirement Income Security Act.
The plan provided health and welfare benefits to workers pursuant to a collective bargaining agreement between a union and the employer, Hillsboro Garbage Disposal. Non-bargaining unit workers were eligible to participate in the plan if they were bona fide employees of Hillsboro Garbage. Hillsboro Garbage, however, made unauthorized plan contributions on behalf of two workers who were employed by a separate company.
The panel held that the ERISA plan's common law claims for breach of contract were preempted by ERISA because the claims " related to" the plan. Distinguishing Providence Health Plan v. McDowell, 385 F.3d 1168 (9th Cir. 2004), which allowed a contract claim to enforce a reimbursement provision on the basis that plan interpretation was not required, the panel stated that this case turned on whether the two workers were eligible plan participants, and thus required analysis of the ERISA plan terms. The panel rejected the argument that it must interpret ERISA to be consistent with the Labor Management Relations Act and ensure that the plan was not in violation of the LMRA due to the unauthorized contributions and benefits payments.
The panel affirmed the district court's grant of summary judgment on the plan's claims for specific performance and restitution under ERISA § 502(a)(3). The panel held that these claims were not authorized equitable claims under ERISA because specific performance is typically a legal remedy, and the reimbursement provision of the plan did not amount to an equitable lien by agreement.
Concurring, Judge W. Fletcher wrote that this case should be taken en banc to reverse McDowell because McDowell is contrary to ERISA's enforcement scheme and broad preemption clause in allowing a contract claim to enforce the terms of an ERISA plan.
Michael J. Morris (argued) and Linda J. Larkin, Bennett, Hartman, Morris & Kaplan, LLP, Portland, Oregon, for Plaintiff-Appellant.
Iris K. Tilley (argued) and Edwin A. Harnden, Barran Liebman LLP, Portland, Oregon, for Defendants-Appellants.
Before: William A. Fletcher and Andrew D. Hurwitz, Circuit Judges, and Michael M. Baylson,[*]
Senior District Judge. Concurrence by Judge W. Fletcher.
Michael M. Baylson,
Oregon Teamster Employers Trust (" OTET" ) appeals the grant of summary judgment in favor of Defendants Hillsboro Garbage Disposal, Inc. (" Hillsboro Garbage" ), Robert Henderson (" Henderson" ), and the Estate of Darrol Jackson (" Jackson" ). The district court, adopting the findings of a magistrate judge, granted summary judgment in favor of Defendants on (1) OTET's breach of contract claims because the court found those claims to be preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (" ERISA" ); and (2) OTET's restitution and specific performance claims because the court concluded that those claims were not cognizable under ERISA as they sought legal--not equitable--relief.
The issues presented are:
1. Whether OTET, an Employer Health and Benefit Plan, governed by ERISA, can recover damages, on a breach of contract claim, against a business which received health care benefits for two ineligible employees.
2. Whether OTET's claims for restitution and specific performance are permitted.
3. Whether the district court abused its discretion in refusing to allow OTET to amend its complaint to allege fraud.
We affirm the district court's judgment.
I. Facts & Procedural History
OTET is an Employer Health and Benefit Plan governed by ERISA. OTET provides health and welfare benefits to the employees whose employers have entered into collective bargaining agreements with Joint Council No. 37 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, and local union affiliates.
In September 2003, Hillsboro Garbage and Teamsters Local Union No. 305 (" Union" ) entered into a collective bargaining agreement (" CBA" ) which made Hillsboro Garbage a subscriber to OTET, effective March 1, 2003, through February 28, 2007. The CBA was ...