Vang v. Geil Enters.
| Decision Date | 27 April 2023 |
| Docket Number | 1:23-cv-00447-ADA-SKO |
| Parties | DAVID VANG, Plaintiff, v. GEIL ENTERPRISES INC. ADMINISTRATORS OF EMPLOYEE STOCK OWNERSHIP PLAN, et al., Defendants. |
| Court | U.S. District Court — Eastern District of California |
FIRST SCREENING ORDER (Doc. 1) THIRTY (30) DAY DEADLINE
On March 23, 2023, David Vang (“Plaintiff”), proceeding pro se, filed a complaint against Geil Enterprises Inc. Employee Stock Ownership Plan (“ESOP”), Principal Financial Group, and three individuals: Yvonne Chelberg, Melissa Skiles, and Lynn Dubois. (Doc. 1 (“Compl.”) at 2-3.) Plaintiff's claims arise out allegations that Defendants violated the Employee Retirement Income Security Act (“ERISA”) by “misrepresenting] the meaning” of laws as applied to the ESOP, underreporting his “contribution and vesting credits” for certain years, and interfering with his ability to obtain and refusing to provide required information about the ESOP. (See Compl. at 1520, 25-29.) Plaintiff also alleges a claim under California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200. (See id .at 20-24.)
Plaintiff filed an application to proceed in forma pauperis, which was granted on March 28, 2023. (Docs. 2 & 3.) Plaintiff's complaint is now before the Court for screening.
As discussed below, the Court concludes that the complaint fails to state cognizable claims under ERISA. Plaintiff has the following options as to how to proceed. Plaintiff may file an amended complaint, which the Court will screen in due course. Alternatively, Plaintiff may file a statement with the Court stating that he wants to stand on this complaint and have it reviewed by the presiding district judge, in which case the Court will issue findings and recommendations to the district judge consistent with this order. Lastly, Plaintiff may file a notice of voluntary dismissal. If Plaintiff does not file anything, the Court will recommend that the case be dismissed.
In cases where the plaintiff is proceeding in forma pauperis, the Court is required to screen each case and shall dismiss the case at any time if the Court determines the allegation of poverty is untrue, or the action is frivolous or malicious, fails to state a claim upon which relief may be granted, or seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. §
1915(e)(2). If the Court determines that a complaint fails to state a claim, leave to amend may be granted to the extent that the deficiencies of the complaint can be cured by amendment. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc).
The Court's screening of a complaint under 28 U.S.C. § 1915(e)(2) is governed by the following standards. A complaint may be dismissed as a matter of law for failure to state a claim for two reasons: (1) lack of a cognizable legal theory; or (2) insufficient facts under a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). Plaintiff must allege a minimum factual and legal basis for each claim that is sufficient to give each defendant fair notice of what plaintiff's claims are and the grounds upon which they rest. See, e.g., Brazil v. U.S. Dep't of the Navy, 66 F.3d 193, 199 (9th Cir. 1995); McKeever v. Block, 932 F.2d 795, 798 (9th Cir. 1991).
Plaintiff alleges he is a former employee of Geil Enterprises, Inc., and a current vested participant of its ESOP. (Compl. at 1.) He asserts that Defendants Chelberg and Skiles, as “trustees” of the ESOP, breached their fiduciary duties under ERISA by “misrepresenting” the period when Plaintiff would first be eligible to withdraw from his ESOP account and his “right to choose sum of payment.” (Id. at 17-18.) He alleges that Defendants ESOP “administrators and trustees” breached their ERISA fiduciary duties by not “thoroughly correcting [his] ESOP account” to add credits,” and that Defendant Dubois, who was “acting in the role of Plan Administrator,” breached her fiduciary duty by “interfering with [his] exercising of right to accurate information” under 29 U.S.C. § 1104(a)(1). (Id. at 19-20, 25-26.) Plaintiff further asserts Defendants failed to provide him “required [ESOP] information of the annual percentage of contributions” and “how contributions are made” under 29 U.S.C. § 1024(b)(4). (Id. at 28.) Finally, Plaintiff alleges that Defendants, including Principal Financial Group as the “Trust company who holds the trust of the” ESOP, violated California Unfair Competition Law, Bus. & Prof. Code § 17200, by withholding benefits and “back dating a notice required by law to be provided to [him]” regarding when he could withdraw from his ESOP account. (Id. at 3, 20-21.) Plaintiff requests that the Court order the adjustment of his ESOP balance, conversion of his ESOP account “according to market value of 2022 into cash,” return of “the amount withheld from distribution,” and to “relieve [Defendants] of their positions.” (Id. at 30.)
Plaintiff brings his first, second, and fourth causes of action for breach of fiduciary duty, citing 29 U.S.C. § 1104(a). (Compl. at 15, 25.) Title 29 U.S.C. § 1104 provides the “[p]rudent man standard of care” by which retirement benefit plan fiduciaries must abide. 29 U.S.C. § 1104(a). It does not, however, independently provide for a civil claim. Instead, 29 U.S.C. § 1132(a) is the only provision that establishes a private right of action under ERISA. See Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 144 (1990) (); Pilot Life Ins. v. Dedeaux, 481 U.S. 41, 52, 107 S.Ct. 1549, 1555 (1987).
Title 29 U.S.C. § 1132(a)(1)(B) authorizes a civil action to be brought “by a participant or beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(2) authorizes a participant or beneficiary to bring a civil action “for appropriate relief under [29 U.S.C. § 1109],” which provides:
Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this title shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary . . . .
29 U.S.C. § 1109(a). Title 29 U.S.C. § 1132(a)(3) authorizes a participant or beneficiary to bring a civil action “(A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan.”
Subdivision (a)(2) differs from subdivision (a)(3) in that subdivision (a)(2) “gives a remedy for injuries to the ERISA plan as a whole, but not for injuries suffered by individual participants as a result of a fiduciary breach.” Wise v. Verizon Commc'ns, Inc., 600 F.3d 1180, 1189 (9th Cir. 2010) (citing LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 254, 256 (2008)). By contrast, subdivision (a)(3) allows a plaintiff to bring an individual claim for breach of fiduciary duty. See Paulsen v. CNF Inc., 559 F.3d 1061, 1075 (9th Cir. 2009) (“Unlike 29 U.S.C. § 1132(a)(2), which requires that relief sought must be on behalf of the entire plan, the Supreme Court has held that a participant or beneficiary has standing pursuant to section 1132(a)(3) to seek individual recovery in the form of appropriate equitable relief.”) (internal quotation marks omitted). Subdivision (a)(3) is a “catchall provision[ ] [that] act[s] as a safety net, offering appropriate equitable relief for injuries caused by violations that [§ 1132] does not elsewhere adequately remedy.” Moyle v. Liberty Mut. Retirement Benefit Plan, 823 F.3d 948, 959 (9th Cir. 2016) (alterations in original) (quotation omitted).
Here Plaintiff alleges that Defendants “violated 29 U.S.C. [§] 1104 of ERISA . . .” but does not specify any claim under §1132(a)(1)(B), (a)(2), or (a)(3) in the body of the complaint. The footer of the complaint generically references “ERISA 29 U.S.C. [§] 1132(a)” at the bottom of every page. (See generally Compl.) The title of the complaint indicates it is brought “per 29 U.S.C [§] 1132(a)(3)” (see id. at 1), but that section does not permit a suit for monetary damages. See Mertens v. HewittAssocs., 508 U.S. 248, 257-58 (1993); see also Varity Corp. v. Howe, 516 U.S. 489 (1996) (); McLeod v. Oregon Lithoprint, Inc., 102 F.3d 376, 378 (9th Cir.1 996) ( that money damages do not qualify as ‘equitable relief' within the meaning of Section 1132(a)(3)). As currently pleaded, at least some of the relief sought by Plaintiff appears to be monetary in nature, which he cannot recover under Section 1132(a)(3). See, e.g., Est. of Hirata v. Ida, No. CIV. 10-00084 LEK, 2010 WL 2179812, at *8 (D. Haw. May 28, 2010) (). Moreover, “[a] claimant may not bring a claim for denial of benefits under § 1132(a)(3) when a claim under § 1132(a)(1)(B) will afford...
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