Acosta v. Pacific Enterprises
| Decision Date | 23 January 1992 |
| Docket Number | No. 89-56170,89-56170 |
| Citation | 950 F.2d 611 |
| Parties | , 14 Employee Benefits Cas. 1981 Gerardo ACOSTA, Plaintiff-Appellant, v. PACIFIC ENTERPRISES, First Interstate Bank, Ltd., Southern California Gas Company, Thrifty Corporation, J. Foster Hames, Retirement Savings Plans of Pacific Enterprises and Southern California Gas Company, Pacific Enterprises Tax Credit Employee Stock Ownership Plan, Pacific Enterprises TRASOP, Pacific Enterprises PAYSOP, Thrifty Corporation Profit Sharing Plan and Trust, Thrifty Corporation Retirement Savings Plan, Jim Taylor, Charles E. Carlson, Stanley A. Ratzlaff, Charles F. Weiss, Ralph Todaro, individually and as members of Pacific Enterprises' Benefits Committee, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Appeal from the United States District Court for the Central District of California.
Richard G. McCracken, Andrew J. Kahn, Davis, Cowell & Bowe, San Francisco, Cal., for plaintiff-appellant.
John J. Swenson, Daniel M. Kolkey, Mark Erich Weber, Gibson, Dunn & Crutcher, Los Angeles, Cal., for defendants-appellees, Pacific Enterprises and J. Foster Hames.
Belinda K. Orem, John E. Porter, Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., for defendants-appellees First Interstate Bank of California, Southern California Gas Co., Retirement Sav. Plan and Pacific Enterprises Tax Credit Employee Stock Ownership Plan.
Before D.W. NELSON and REINHARDT, Circuit Judges, and PRICE, * Senior District Judge.
In this case, we consider the nature and scope of a plan trustee's duty to provide information to an individual participant regarding other participants' shareholdings under an employee benefit plan in the parent corporation. The specific question we must decide is whether a trustee of various employee benefit plans administered on behalf of a single parent company has a fiduciary duty under section 404(a) of ERISA to provide a list of the names, addresses, and shareholdings beneficially owned by each participant in those plans to an individual participant in one of those plans in order to allow him to solicit votes in the parent company's corporate directors election.
Gerardo Acosta is an employee of Southern California Gas Company ("SoCal Gas"), a wholly-owned subsidiary of Pacific Enterprises, and the president of Local 132 of the Utility Workers Union of America, AFL-CIO. 1 As a participant in the SoCal Gas Retirement Savings Plan ("SoCal Gas Plan"), Acosta beneficially owns common stock in Pacific Enterprises and, pursuant to the plan provisions, is entitled to vote the shares allocated to his plan account by instructing the plan's trustee, fiduciary and shareholder of record, First Interstate Bank. 2
On February 14, 1989, Acosta demanded that Pacific Enterprises and First Interstate Bank provide him with a list, on computer tape, of the names, addresses, and shareholdings of all participants in the various employee benefits plans maintained by Pacific Enterprises and its subsidiaries. 3 He sought to use the list to solicit, in person, plan participants' votes in favor of Sam Weinstein, Regional Director of the Utility Workers Union, who was seeking election to Pacific Enterprises' board of directors at its May 11, 1989, annual shareholders' meeting. 4 Pacific Enterprises' Secretary, J. Foster Hames, refused to comply with Acosta's demands. Hames stated that neither Pacific Enterprises nor First Interstate Bank was legally obligated to provide the requested information and that absent such a legal obligation Pacific Enterprises would respect the privacy of its employees.
Acosta brought this action under ERISA to compel the defendants to provide the list. He claimed that Pacific Enterprises and First Interstate, in refusing to do so, had breached their fiduciary duty, in violation of ERISA section 404(a), 29 U.S.C. § 1104(a) (1988), and engaged in self-dealing, in violation of ERISA section 406(b)(1), 29 U.S.C. § 1106(b)(1) (1988). Acosta sought both a permanent injunction and a preliminary injunction barring defendants from soliciting proxies or voting instructions until the court resolved the issue of whether he was entitled to the list.
On March 15, 1989, the district court denied Acosta's motion for a preliminary injunction. Approximately two months later, Pacific Enterprises held its annual shareholders' meeting and election of directors. Weinstein received less than 5% of the voting shares and therefore was not elected to the board of directors. Acosta subsequently appealed the district court's denial of his preliminary injunction motion. On July 31, 1989, the appeal was dismissed as moot.
On remand, the district court granted summary judgment for the defendants with respect to both statutory claims and denied Acosta's request for a permanent injunction. In a memorandum opinion, the district court determined that Acosta did not have standing to challenge decisions affecting plans (or participants of plans) in which he did not participate. As to the plan in which he was a participant, the court held that an ERISA fiduciary's duty to disclose information relating to an ERISA plan is limited to those items expressly listed in the statute and that ERISA does not incorporate broad principles of state trust law requiring disclosure. Accordingly, the court concluded that "Section 1104(a) does not require disclosure by a plan's fiduciaries of a list of plan participants to a plan participant." Mem. op. at 10. The court also stated that "whatever the precise duties of a plan's fiduciaries under Section 1104(a), [the duty to disclose lists of all plan participants to an individual participant] would be unrelated to the purposes of Section 1104(a), viz, paying benefits, defraying expenses and making prudent investments." Id. The district court also rejected Acosta's claim of self-dealing, finding that a shareholdings list is not a plan asset.
We review de novo a district court's grant of a motion for summary judgment. The reviewing court must determine whether there are any genuine issues of material fact and whether the district court applied the relevant substantive law, viewing the evidence in the light most favorable to the nonmoving party. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989).
Appellees raise two justiciability arguments in regards to Acosta's claims. We find only one persuasive. First, appellees contend that Acosta's principal claim is now moot because the May 11, 1989, election for which he sought the list has passed. The general rule is that an actual controversy must exist at all stages of federal court proceedings. Golden v. Zwickler, 394 U.S. 103, 108-10, 89 S.Ct. 956, 959-60, 22 L.Ed.2d 113 (1969). We must dismiss an appeal as moot " 'when the issues presented are no longer "live" or the parties lack a legally cognizable interest in the outcome.' " United States Parole Comm'n v. Geraghty, 445 U.S. 388, 396, 100 S.Ct. 1202, 1208, 63 L.Ed.2d 479 (1980) (quoting Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 1950, 23 L.Ed.2d 491 (1969)); see also United States v. Geophysical Corp. of Alaska, 732 F.2d 693, 698 (9th Cir.1984) ().
We may nonetheless review claims that implicate practices that are "capable of repetition, yet evading review." Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515, 31 S.Ct. 279, 283, 55 L.Ed. 310 (1911). See International Organization of Masters, Mates & Pilots [IOMM & P] v. Brown, --- U.S. ----, 111 S.Ct. 880, 112 L.Ed.2d 991 (1991); Lodge 1380, Bhd. of Ry., Airline & Steamship Clerks v. Dennis, 625 F.2d 819 (9th Cir.1980). Even though Pacific Enterprises has held its May 11, 1989, corporate directors election and even though the candidate whom Acosta supported was unsuccessful in his bid for directorship, this case is not moot. Acosta has stated that he intends to support candidates in future elections and to seek the support of other participants regarding voting on non-election issues, and that, in connection with these activities, he will seek a list of all participants of any plan maintained by Pacific Enterprises or its subsidiaries. The likelihood that Pacific Enterprises and First Interstate will again deny him access to the requested list "makes this controversy sufficiently capable of repetition to preserve our jurisdiction." IOMM & P v. Brown, 111 S.Ct. at 885. In addition, because Pacific Enterprises' annual election proceedings typically last two to three months while litigation can consume years, the issue is virtually certain to evade review if it is deemed moot. See, e.g., First Nat'l Bank of Boston v. Bellotti, 435 U.S. 765, 774, 98 S.Ct. 1407, 1414-15, 55 L.Ed.2d 707 (1978); Baldwin v. Redwood City, 540 F.2d 1360, 1365 (9th Cir.1976), cert. denied sub nom. Leipzig v. Baldwin, 431 U.S. 913, 97 S.Ct. 2173, 53 L.Ed.2d 223 (1977).
Appellees also argue that Acosta lacks standing to challenge decisions affecting ERISA plans in which he does not participate. We agree. Although he participates in only one plan--the SoCal Gas Plan--Acosta seeks a list of all participants in all plans maintained by Pacific Enterprises or its subsidiaries. ERISA permits only the Secretary of Labor or a participant, beneficiary, or fiduciary of a plan to bring a civil action for breach of fiduciary duty in connection with the administration of that plan. See 29 U.S.C. § 1132(a)(2) (1988); Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 957-58, 103 L.Ed.2d 80 (1989). With respect to the plans in which he does not participate, Acosta does not claim that he specifically qualifies as one of the expressly designated persons permitted to sue a fiduciary for breach of duty. He nevertheless contends that he has standing to challenge...
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