Nishimoto v. Federman-Bachrach & Associates, FEDERMAN-BACHRACH

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Citation903 F.2d 709
Docket NumberFEDERMAN-BACHRACH,No. 88-6338,88-6338
Parties52 Fair Empl.Prac.Cas. 1729, 53 Empl. Prac. Dec. P 39,952, 12 Employee Benefits Ca 1794 Shizuko NISHIMOTO, Plaintiff-Appellant, v.& ASSOCIATES; Walter Federman & Company; Albert G. Ruben & Company, Inc., a Corporation; Richard A. Sierra, Defendants-Appellees.
Decision Date17 May 1990

Lee W. Landrum, Carlsbad, Cal., for plaintiff-appellant.

Ralph S. LaMontagne, Jr. and John T. McDowell, Bronson, Bronson & McKinnon, Los Angeles, Cal., for defendants-appellees.

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

Before FLETCHER and NELSON, Circuit Judges, and CARROLL, * District Judge.

NELSON, Circuit Judge:

Shizuko Nishimoto filed this action against her former employers and a former supervisor, alleging that she had been fired for two unlawful reasons: her age and the defendants' desire to deprive her of pension benefits. The action was filed in state court and was later removed to federal court. Nishimoto appeals from the district court's refusal to remand parts of the case to state court, and from the court's entry of summary judgment in favor of the defendants on all claims over which it exercised jurisdiction. We affirm.


Nishimoto was originally employed as a commercial insurance underwriter for Walter Federman & Company. During her employment with that firm, she participated in its pension plan. Walter Federman & Co. then became Federman-Bachrach & Associates, which was later bought out by Ruben & Co. In July 1987, Richard Sierra discharged Nishimoto from her underwriting job with Ruben & Co., shortly before "new" pension and health plans with better benefits were to become effective for Ruben & Co. employees.

In September 1987, Nishimoto filed a complaint in state court against Ruben & Co., Walter Federman & Co., Federman-Bachrach & Associates, and Sierra. She alleged state law claims for breach of contract, wrongful discharge, failure to pay for accrued vacation leave, and intentional tort, and stated she was terminated in part because the defendants wanted to prevent her from acquiring a "full 100% vested interest" in a retirement pension benefit plan. She did not specify whether she was referring to the "old" Walter Federman plan, or the "new" Ruben & Co. plan, but indicated she had participated in the plan since 1985.

Even though Walter Federman & Co. had long since ceased to exist, the Walter Federman pension plan was not terminated until December 30, 1987, and, despite her firing, Nishimoto remained a participant in the "old" plan until that date. 1

The defendants removed Nishimoto's suit to federal court, claiming that her allegation that she was fired to prevent her pension from vesting was preempted by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Secs. 1001-1461. In response, Nishimoto filed a motion to remand the action to state court. The district court determined that the preemption issue was "squarely covered" by this court's decision in Sorosky v. Burroughs Corp., 826 F.2d 794 (9th Cir.1987), and denied the remand motion. Nishimoto did not seek an interlocutory appeal from the denial.

The parties participated in discovery. In her deposition, Nishimoto indicated that in February 1988 she received a lump-sum payment covering all the benefits she was due under the "old" Walter Federman plan, and that she had no remaining claims against that plan. Rather, she asserted she was fired because of her age 2 and to prevent her participation in the "new" Ruben plan.

Defendants filed a motion for summary judgment or, in the alternative, summary adjudication of issues. Nishimoto's opposition to this motion asserted that triable issues of fact remained as to whether she was discharged because of her age. The district court filed an order on June 21, 1988 granting summary judgment in favor of Sierra on all claims and in favor of the remaining defendants on Nishimoto's breach of contract, wrongful discharge and intentional tort claims.

Thereafter, the parties lodged a stipulation providing that Nishimoto's only remaining claims were for termination in violation of ERISA and failure to pay accrued vacation pay. The document further stipulated that Nishimoto did not intend to pursue these claims in federal court and requested that the court allow her to "delete" them from her complaint and remand the matter to state court.

On July 28, 1988, the district court filed findings of fact and conclusions of law in support of its previous order. The court reiterated its grant of summary judgment, allowed Nishimoto to withdraw her ERISA claim, and remanded her vacation pay claim to state court. Nishimoto timely appeals.


Removal is a question of federal subject matter jurisdiction, reviewable de novo. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1194 (9th Cir.1988). 3

The district court's decision whether to adjudicate pendent state claims following final disposition of all federal claims is reviewed for abuse of discretion. See Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 771 (9th Cir.1986); Anderson v. Allstate Ins. Co., 630 F.2d 677, 681 n. 3 (9th Cir.1980); see also United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966).

A grant of summary judgment is reviewed de novo to determine, viewing the evidence in the light most favorable to the nonmoving party, whether there exist any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989).


Nishimoto urges three grounds for reversing the district court's decision to adjudicate most of her claims rather than remanding them to state court. She also contends that the district court erred in granting summary judgment on those claims.

A. Refusal to Remand at Outset
1. Existence of ERISA Claim

Nishimoto's first argument is that her original complaint did not state a claim under ERISA. Therefore, she claims, the case was improvidently removed and the district court erred in denying her very first motion to remand. Our consideration of such an argument at this late juncture is limited.

[W]here after removal a case is tried on the merits without objection and the federal court enters judgment, the issue in subsequent proceedings on appeal is not whether the case was properly removed, but whether the federal district court would have had original jurisdiction of the case had it been filed in that court.

Grubbs v. General Elec. Credit Corp., 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d 612 (1972); Sorosky v. Burroughs Corp., 826 F.2d 794, 798 (9th Cir.1987). 4 Although a litigant may "object" to removal by moving to remand the action to state court, this objection is not preserved unless an interlocutory appeal is filed challenging the district court's order denying remand. Sorosky, 826 F.2d at 798-99.

Here, although Nishimoto moved to remand her action to state court, she failed to seek an interlocutory appeal following denial of the motion. 5 Thus, we need only determine whether the district court would have had jurisdiction had this action been originally filed in that court.

Civil claims preempted by ERISA and redressable under 29 U.S.C. Sec. 1132(a) provide federal question jurisdiction because Congress has "so completely" preempted this area "that any civil complaint raising [section 1132(a) ] claims is necessarily federal in character." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 107 S.Ct. 1542, 1546-1547, 95 L.Ed.2d 55 (1987).

ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by the statute. 29 U.S.C. Sec. 1144(a). 6 The phrase "State laws" includes state common law causes of action. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47, 107 S.Ct. 1549, 1553, 95 L.Ed.2d 39 (1987); Ethridge v. Harbor House Restaurant, 861 F.2d 1389, 1404 (9th Cir.1988). The words "relate to" were intended by Congress to be interpreted broadly. Pilot Life, 481 U.S. at 47, 107 S.Ct. at 1553. Causes of action "relate to" an employee benefit plan if they "arise out of the administration of a covered plan," id., or if they have "a connection with or reference to such a plan." Shaw v. Delta Air Lines, 463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983). 7

Nishimoto's complaint included four claims for relief. In her second claim, for wrongful discharge, she alleged that her discharge was

an attempt to prevent the plaintiff from acquiring a full 100% vested interest in and to the retirement and pension plan of the defendants, as well as maintaining the required seniority to take advantage of the insurance benefits including medical and life insurance provided through the benefit program and pension program of the defendants.

In substance, Nishimoto alleges that she was fired to prevent her from receiving pension and insurance benefits. This claim refers to, and is connected with, an ERISA-covered plan, and is therefore preempted by ERISA. See Sorosky, 826 F.2d at 800. 8

ERISA confers on all plan participants a right to noninterference with benefits, 9 and authorizes civil actions to redress violations. 10 Federal district courts have exclusive jurisdiction over these actions. 29 U.S.C. Sec. 1132(e)(1). 11 Further, a district court may exercise pendent jurisdiction over state law claims arising from a nucleus of operative fact common to both the state law claims and the ERISA claim. See Sorosky, 826 F.2d at 800-01; see also United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). Because Nishimoto's state law claims derive from the same nucleus of operative fact as the ERISA claim--her dismissal by Ruben & Co.--they are pendent to...

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