Fernandez v. Brock

Decision Date23 May 1988
Docket NumberNo. 86-2033,86-2033
Citation840 F.2d 622
Parties, 9 Employee Benefits Ca 1776 Refugio FERNANDEZ; Maria Fernandez, individually and on behalf of others similarly situated; Maria Calderon, Plaintiffs-Appellants, v. William E. BROCK; Ford Barney Ford, Acting Secretary, in his capacity as Acting Secretary of Labor; Robert A.G. Monks, in his capacity as Administrator of the Office of Pensions and Welfare Benefit Programs; Donald Regan, in his capacity as Secretary of the Treasury; Roscoe L. Egger, Jr., in his capacity as Commissioner of the Internal Revenue Service; Teodoro Calderon, Defendants- Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Neal S. Dudovitz, Nat. Sr. Citizens Law Center, Los Angeles, Cal., for plaintiffs-appellants.

John P. Giraudo, Office of Legal Counsel, Dept. of Justice, Washington, D.C., for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before WALLACE and POOLE, Circuit Judges, and REA, * District Judge.

ORDER

The prior opinion in this case, filed July 20, 1987, 822 F.2d 865, is hereby withdrawn. The attached opinion is ordered filed in its place.

OPINION

WALLACE, Circuit Judge:

Four migrant farmworkers (farmworkers) appeal the district court's order granting summary judgment to the Secretary of the Treasury and other federal officials and agencies (collectively "Secretary"). The farmworkers sought an order compelling the Secretary to promulgate regulations under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Secs. 1001-1461, that would govern pension plans for seasonal workers. We have jurisdiction pursuant to 28 U.S.C Sec. 1291. We affirm in part and reverse and remand to dismiss in part.

I

The farmworkers have been employed for several summers as seasonal farmworkers by Kawahara, a strawberry grower. Kawahara maintains a pension plan for his employees. The farmworkers, however, have seldom been eligible to participate in the plan because they customarily were not employed at least 1,000 hours per year, the threshold set by Kawahara for participation. Moreover, the farmworkers accrued and vested few benefits because they rarely met the plan's thresholds for accrual and vesting.

ERISA does not require employers to provide employees with pension plans, but it does require employers with plans to meet ERISA's minimum standards for participating in the plan, accrual of benefits, and vesting of benefits. ERISA requires that an employee must be eligible to participate in a plan after "he completes 1 year of service," which, for ordinary workers, is defined as 1,000 hours of employment in a 12-month period. 29 U.S.C. Sec. 1052(a)(3)(A). Similarly, ERISA requires that an employee accrue benefits after a "year of participation," defined as 1,000 hours of employment in a 12-month period. 29 U.S.C. Sec. 1054(b)(3)(C). ERISA requires that benefits vest after a number of years of participation, according to varying formulas. 29 U.S.C. Sec. 1053.

The statute declares, however, that "[i]n case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendar year, the term 'year of service' shall be such period as may be determined under regulations prescribed by the [Secretary]." 29 U.S.C. Sec. 1052(a)(3)(B). The statute similarly provides for the promulgation of regulations governing the accrual and vesting periods for seasonal workers' benefits. See 29 U.S.C. Secs. 1053(b)(2)(C), 1054(b)(3)(D).

The farmworkers filed suit in district court seeking mandamus, declaratory, and injunctive relief. They contended that the Secretary has a duty to promulgate regulations under ERISA governing the participation, accrual, and vesting thresholds for seasonal workers. The Secretary moved for summary judgment on the grounds that the farmworkers lacked standing and that the statute did not obligate the Secretary to issue seasonal worker rules. The district court held that the farmworkers had standing but granted summary judgment after concluding that the Secretary's authority to issue the regulations was discretionary.

II

A federal court's "judicial Power" extends to "Cases ... arising under ... the Laws of the United States." U.S. Constitution, art. III, sec. 2. It is not enough that a litigant claims that a violation of federal law has occurred; the litigant must have "standing" to invoke the power of a federal court. "Otherwise, the power 'is not judicial ... in the sense in which judicial power is granted by the Constitution to the courts of the United States.' " Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 471, 102 S.Ct. 752, 758, 70 L.Ed.2d 700 (1982) (Valley Forge ), quoting United States v. Ferreira, 54 U.S. (13 How.) 40, 48, 14 L.Ed. 42 (1852). In this case, we need only be concerned with those aspects of standing derived directly from the Constitution, although the doctrine of standing also encompasses several judicially imposed "prudential" requirements. See id. 454 U.S. at 471-72, 102 S.Ct. at 758. Standing for purposes of the Constitution is present when a plaintiff suffers actual or threatened " personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984) (Allen ).

The question of standing in this case was raised as part of the Secretary's motion for summary judgment. Ordinarily, a plaintiff opposing a motion for summary judgment on this issue would have to support, with affidavits or other evidence, the factual allegations underlying the assertion of standing because such allegations must ultimately be proven for a plaintiff to prevail. See Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 115 & n. 31, 99 S.Ct. 1601, 1615-16 & n. 31, 60 L.Ed.2d 66 (1979) (Gladstone ). For purposes of the present appeal, however, we will " 'accept as true all material allegations of the complaint ...' as standing was challenged largely on the basis of the pleadings." Id. at 109, 99 S.Ct. at 1613, quoting Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 2206, 45 L.Ed.2d 343 (1975). In reviewing a summary judgment, whether standing exists is a question of law we review de novo. Bruce v. United States, 759 F.2d 755, 758 (9th Cir.1985). The farmworkers argue that they have suffered two injuries traceable to the Secretary that will be redressed by ordering the Secretary to promulgate regulations. We consider each of these alleged injuries in turn.

A.

The first injury claimed by the farmworkers is the loss of pension benefits. This loss constitutes a personal economic injury sufficient to satisfy the first prong of the article III standing requirement. But this alone does not provide standing. Article III power to decide this case exists only if the second and third prongs of the test for standing are also satisfied: the injury must be fairly traceable to or caused by the Secretary's failure to promulgate regulations and must be likely to be redressed by compelling the promulgation of regulations. Allen, 468 U.S. at 751, 104 S.Ct. at 3324. For purposes of our disposition of this case, we will focus on the issue of redressability. See Allen, 468 U.S. at 753 n. 19, 104 S.Ct. at 3325 n. 19.

The farmworkers' line of reasoning demonstrates the difficulty of meeting the redressability prong for article III standing. Reduced to its simplest form, they contend that their injury will be redressed by the relief they seek because, if they prevail, the Secretary must issue some regulations. These regulations may require minimum eligibility thresholds for farmworkers that are lower than Kawahara's present 1,000-hour-per-year standard. If so, Kawahara would be required to comply with the regulations' more liberal standard if he chooses to maintain an employee benefit plan. If Kawahara does so choose and does implement a plan with a lower standard, the farmworkers may be able to qualify as participants in the plan. If the farmworkers qualify, they ultimately may accrue and vest retirement benefits.

We are guided in our evaluation of the farmworkers' argument by two Supreme Court cases. In the first, Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976) (Simon ), a group of indigents challenged the government's granting a tax exemption to certain hospitals. The indigents asserted that the government was required to demand that the hospitals provide greater services to indigents before the hospitals could become eligible for the tax exemption. The Court held that the plaintiffs did not have standing because it was "speculative" whether the remedy sought in the lawsuit would result in the greater availability of hospital services to indigents. Id. at 43, 96 S.Ct. at 1926. The hospitals might "elect to forgo favorable tax treatment to avoid the undetermined financial drain of an increase in the level of uncompensated services." Id. Furthermore, although the complaint alleged that the hospitals received "substantial donations deductible by the donors," it was "speculative at best" to infer that the hospitals were so financially dependent on the favorable tax exempt treatment that they would admit the indigents if required to do so as a condition of receiving the tax benefit. Id.

In a second case, Allen, the parents of black children brought suit alleging that the government failed to deny tax-exempt status to racially discriminatory private schools and thereby interfered with their children's opportunity to be educated in desegregated public schools. The Court concluded that standing did not exist after observing that it was ...

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