Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-04234/USCOURTS-cand-3_15-cv-04234-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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ORDER (No. 15-cv-04234-LB)

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

San Francisco Division

SHEET METAL WORKERS PENSION 

TRUST OF NORTHERN CALIFORNIA, et 

al.,

Plaintiffs,

v.

TRAYER ENGINEERING 

CORPORATION,

Defendant.

Case No.15-cv-04234-LB 

ORDER GRANTING

MOTION TO DISMISS

[Re: ECF No. 18]

INTRODUCTION

This is a lawsuit under the Employee Retirement Income Security Act (―ERISA‖), 29 U.S.C. 

§§ 1001-1461. The plaintiffs (whom the court calls the ―Trust Funds‖) are multiemployer 

employee-benefit plans; they have sued defendant Trayer Engineering Corporation for 

contributions that Trayer owed as an employer, but allegedly did not pay, to the plans. Trayer has 

counterclaimed for the refund of contributions that it allegedly paid by mistake. The plaintiffs now 

move under Rule 12(b)(6) to dismiss Counterclaim 2, for common-law restitution, and 

Counterclaim 3, which has morphed from a claim for civil penalties under 29 U.S.C. 

§ 1132(c)(1)(B) into a request for the attorney‘s fees and costs (of bringing this particular 

counterclaim) as ―equitable relief‖ under 29 U.S.C. § 1132(a)(11)(B). This motion can be decided 

without oral argument. See Civil L.R. 7-1(b). The court grants the plaintiffs‘ motion. The 

Case 3:15-cv-04234-LB Document 40 Filed 05/03/16 Page 1 of 11
ORDER (No. 15-cv-04234-LB) 2

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restitution counterclaim is dismissed with prejudice. The request for attorney‘s fees and costs is 

dismissed with leave to amend.1

STATEMENT

Because this is a Rule 12(b)(6) motion, the court accepts the defendant‘s counterclaim 

allegations as true and draws from them all reasonable inferences in the defendant‘s favor. See, 

e.g., Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); Moss v. United States Secret Serv., 

572 F.3d 962, 969 (9th Cir. 2009); Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 338-39 (9th Cir. 

1996).

The defendant‘s counterclaims revolve factually around two things: 1) its allegedly excessive 

contributions to the benefit plans; and 2) documents that it requested from the Trust Funds. First, 

the contributions. Trayer entered into a collective-bargaining agreement with Sheet Metal 

Workers‘ International Association effective July 1, 2010.2The bargaining agreement required 

Trayer to contribute to the Trust Funds for each hour worked by covered employees.3From July 

2010 through April 2012, Trayer made contributions based on hours paid rather than hours 

worked.4This mistake resulted in Trayer paying more than $90,000 in excess contributions.5The 

Trust Funds had a third party conduct ―payroll audits‖ in 2011 and 2013 and, through these audits, 

knew or should have known that Trayer had mistakenly contributed based on hours paid.

6 Neither 

the auditor nor the Trust Funds informed Trayer of the mistake.7The governing trust agreement 

allows the Trust Funds to return erroneous contributions.8In February 2015, Trayer asked the 

 

1 This case is related to Sheet Metal Workers of N. Cal. Pension Trust Fund et al v. Trayer Eng’g 

Corp., No. 16-cv-00872-LB (N.D. Cal.), which involves Trayer‘s alleged ―withdrawal liability‖ under 

ERISA.

2 Counterclaim – ECF No. 9 at 7 (¶ 9). Record citations are to material in the Electronic Case File 

(―ECF‖); pinpoint citations are to the ECF-generated page numbers at the top of documents.

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Id. (¶ 10).

4

Id. (¶ 11).

5

Id. at 9 (¶ 23).

6

Id. at 7-8 (¶¶ 12-14).

7

Id. at 7 (¶¶ 12-13).

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ORDER (No. 15-cv-04234-LB) 3

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Trust Funds to return the overpaid contributions.9The Trust Funds did not refund the 

contributions.10

Second, the document request. In late June 2015, invoking 29 U.S.C. § 1021(k), Trayer 

requested certain documents from the Sheet Metal Workers Pension Plan of Northern California.11

The plan ―did not respond‖ to Trayer‘s request and did not provide the requested documents.12

According to the defendant‘s Rule 12(b)(6) brief, one week after Trayer filed its counterclaim, the 

Trust Funds gave Trayer the requested material.13

Trayer brings three counterclaims. Counterclaim 1 seeks a refund of the overpaid contributions 

under § 403(c)(2)(A) of ERISA, 29 U.S.C. § 1103(c)(2)(A).14 Counterclaim 2 seeks the same 

refund by way of a common-law claim for restitution.15 Counterclaim 3, as pleaded, seeks civil 

penalties of $110 per day for each day that the Trust Funds failed to furnish the requested 

documents.

16 Trayer now seems to accept that the statute under which it sought those penalties, 29 

U.S.C. § 1132(c)(1)(B), does not permit employers to bring such a claim.17 Furthermore, after 

Trayer filed its counterclaim, the Trust Funds gave Trayer the requested documents.18 In its Rule 

12(b)(6) opposition, Trayer has accordingly shifted ground. It now seeks attorney‘s fees and costs 

for having to bring Counterclaim 3; it seeks this as ―equitable relief‖ under 29 U.S.C. 

§ 1132(a)(11)(B).19 The plaintiffs‘ Rule 12(b)(6) motion seeks to dismiss Counterclaims 2 and 3.

 

8

Id. (¶¶ 16-17).

9

Id. (¶ 18.)

10 Id. at 9 (¶¶ 27-28).

11 Id. at 8 (¶ 19).

12 Id. at 8, 10 (¶¶ 20, 34).

13 ECF No. 32 at 7 n. 3.

14 Counterclaim – ECF No. 9 at 8-9 (¶¶ 21-28).

15 Id. at 9-10 (¶¶ 29-32).

16 Id. at 10 (¶¶ 33-35).

17 ECF No. 32 at 7 n. 2 (―Trayer acknowledges that the specific statute authorizing relief [related to the 

document request] was misstated in Trayer‘s complaint.‖).

18 See id. at 7 n. 3.

19 Id. at 7.

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ORDER (No. 15-cv-04234-LB) 4

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ANALYSIS

1. Rule 12(b)(6) Standard

A motion to dismiss under Rule 12(b)(6) ―tests the legal sufficiency of a claim.‖ Navarro v. 

Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal under Rule 12(b)(6) may be based either on 

the ―lack of a cognizable legal theory‖ or on ―the absence of sufficient facts alleged under a 

cognizable legal theory.‖ Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988); 

accord, e.g., Estrada v. Cal. Dep't of Corr., 2014 WL 3751941, *1 (C.D. Cal. July 28, 2014).

When evaluating a Rule 12(b)(6) motion, the court must accept all material allegations in the 

complaint as true, even if doubtful, and construe them in the light most favorable to the nonmoving party. See, e.g., Twombly, 550 U.S. at 555-56; Cahill, 80 F.3d at 339. This includes 

drawing ―all reasonable inferences‖ from the complaint‘s allegations. Navarro, 250 F.3d at 732 

(citing Cahill, 80 F.3d at 338). ―[C]onclusory allegations of law and unwarranted inferences,‖ 

however, ―are insufficient to defeat a motion to dismiss for failure to state a claim.‖ Epstein v. 

Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996). If a court dismisses a complaint, it should 

give leave to amend unless the ―pleading could not possibly be cured by the allegation of other 

facts.‖ Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 

1990).

2. Counterclaim 2 — Common-Law Restitution

Section 403(c)(2)(A) of ERISA permits multiemployer plans to return employer contributions 

that are made due to a mistake of fact or law. The Ninth Circuit has held that § 403 gives an 

employer an implied right of action to recoup mistaken contributions. Award Serv., Inc. v. N. Cal. 

Retail Clerks Unions & Food Emp’rs Joint Pension Trust Fund, 763 F.2d 1066, 1068 (9th Cir. 

1985); British Motor Car Distribs., Ltd. v. San Francisco Auto. Indus. Welfare Fund, 882 F.2d 371, 

374 (9th Cir. 1989). ―The right to a refund is not automatic, however, even if the employer can 

demonstrate the requisite mistake of fact or law; the employer must also show that the equities 

favor restitution.‖ Alaska Trowel Trades Pension Fund v. Lopshire, 103 F.3d 881, 885 (9th Cir. 

1996).

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ORDER (No. 15-cv-04234-LB) 5

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The parties dispute whether, in addition to the statutory refund claim that Award Service

recognized under ERISA § 403, the defendant can also maintain a common-law claim for 

restitution of the overpayments. It cannot. The Ninth Circuit does not recognize such a claim. 

Counterclaim 2 thus must be dismissed as a matter of law. See British Motor Car, 882 F.2d at 377; 

Irirgaray Dairy v. Dairy Employees Local No. 17 Christian Labor Ass’n of the United States of 

Am. Pension Trust, 2015 WL 9319448, *23-25 (E.D. Cal. Dec. 23, 2015), appeal docketed, No. 

16-15107 (9th Cir. Jan. 25, 2016) (dismissing common-law restitution claim).

British Motor Car is conclusive on this point. The Ninth Circuit there held that an employer 

had no claim for common-law restitution to parallel its § 403 refund claim; the appeals court 

strongly indicated that this circuit recognizes no such common-law restitution claim. British Motor 

Car, 882 F.2d at 377. Because British Motor Car so directly addresses the parties‘ arguments, and 

so clearly requires dismissing the defendant‘s restitution claim, the court quotes from it at unusual 

length. After holding that the defendant employer had not shown a ―mistake of fact‖ to support a 

refund claim under § 403, British Motor Car, 882 F.2d at 375-77, the Ninth Circuit turned to the 

question of common-law restitution:

The Employers contend that even if relief is not available under section 

403(c)(2)(A)(ii), they are entitled to a refund under the federal common law of 

restitution. They cite several cases from other circuits for the theory that Congress, 

in enacting ERISA, authorized the evolution of a federal common law of pension 

plans and such authorization gives courts the power to order restitution in favor of 

employers to prevent unjust enrichment.

The Employers’ contention is meritless. They cite two circuit cases which they 

contend stand for the proposition that there is a federal common law cause of action 

for restitution for mistaken contributions by employers distinct from an action 

pursuant to section 403(c)(2)(A)(ii). Whitworth Bros. Storage Co. v. Cent. States,

794 F.2d 221, 236 (6th Cir.), cert. denied, 479 U.S. 1007 (1986); Airco Indus. 

Gases v. Teamsters Health & Welfare, 618 F. Supp. 943, 950 (D. Del. 1985). In both 

cases, however, the court first held that an employer had no implied right of action 

under section 403(c)(2)(A)(ii) and only then held that an employer had a right of 

action under federal common law.

. . . .

[T]his court has not recognized any such federal common law action for 

restitution in favor of employers. And there would appear to be no basis for such 

an action particularly where this court does allow employers to bring suit under 

ERISA for restitution of mistaken contributions.

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ORDER (No. 15-cv-04234-LB) 6

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British Motor Car, 882 F.2d at 377 (parallel citations omitted) (emphases added). The British 

Motor Car court‘s statement that there appears to be ―no basis for such an action‖ suggests that the 

common-law restitution claim is not cognizable in this circuit — and so must be dismissed.

Following British Motor Car, our sister court in the Eastern District of California recently held 

that an employer had no claim for common-law restitution. Irirgaray Dairy, 2015 WL 9319448 at 

*23-25. The Irirgaray Dairy court held that the § 403 claim under Award Service ―preempted‖ any 

common-law restitution claim. Id. at *24-25. The court thus dismissed the restitution claim on 

summary judgment. Id. This court thinks that the same basic result must obtain here.

The defendant takes a different view. It first contends that the relevant language from British 

Motor Car is dicta. (ECF No. 32 at 2-3.) The court disagrees. The language just quoted was not a 

―stray remark on an issue not presented to‖ the appeals court. See Dodson v. Univ. of Ark. of Med. 

Scis., 601 F.3d 750, 755 (8th Cir. 2010). To the contrary: The British Motor Car defendants had 

argued that they could advance a common-law restitution claim apart from their § 403 claim. 

British Motor Car, 882 F.2d at 377. The Ninth Circuit‘s reasoning on, and rejection of, this 

contention was an operative part of its broader decision affirming the dismissal and finding that 

the employers had advanced no viable refund theory. See id. Even if it were technically dicta, 

though, it expresses clearly and forcefully the Ninth Circuit‘s view on the matter. It would be dicta

that this court could not ignore.

The defendant‘s other arguments are unavailing. It points to other circuits that permit commonlaw restitution claims to recoup overpayments. (ECF No. 32 at 3.) But — as British Motor Car

expressly reasoned — those circuits do not recognize a statutory refund claim under 

§ 403(c)(2)(A) and have allowed common-law restitution to essentially fill the gap. See British 

Motor Car, 882 F.2d at 377. There is no similar need for common-law restitution in this circuit, 

where the employer can proceed directly under § 403. Id. For this reason, again, both British 

Motor Car and Irigaray Dairy held that in this circuit there is no legally cognizable common-law 

restitution claim for the refund of mistaken contributions. See id.; Irigaray Dairy, 2015 WL 

9319448 at *23-25.

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ORDER (No. 15-cv-04234-LB) 7

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The defendant also cites two post-British Motor Car decisions from this circuit — FMC Med. 

Plan v. Owens, 122 F.3d 1258 (9th Cir. 1997) and Trs. ex rel. Teamsters Benefit Trust v. Doctors 

Med. Ctr. of Modesto, Inc., 286 F. Supp. 2d 1234 (N.D. Cal. 2003) — to support the idea that there 

can be such a restitution claim. (ECF No. 32 at 3.) The defendant‘s use of these cases is 

misguided. The courts in FMC and Doctors Medical addressed only the question of whether a 

plan‘s reimbursement claim was legal or equitable in nature. FMC, 122 F.3d at 1259-62 (holding 

that court lacked subject-matter jurisdiction over essentially legal claim seeking reimbursement 

under ERISA § 502(a)(3)); Doctors Medical, 286 F. Supp. 2d at 1235-40 (same). Neither case 

supports the proposition that an employer who has a § 403 refund claim can also maintain a 

separate claim for common-law restitution. In fact, in discussing the different issue before it, 

Doctors Medical made general points that cut against the defendant‘s position here. The Doctors 

Medical court observed that, ―the Ninth Circuit has construed the equitable jurisdiction of the 

federal courts under ERISA narrowly.‖ Doctors Medical, 286 F. Supp. 2d at 1239. ―Even under the 

broader view of equitable restitution to remedy unjust enrichment,‖ Doctors Medical continued, ―a 

claim of unjust enrichment lies only where the defendant has no legal claim to the overpayment.‖ 

Id. at 1240. But, again, in this case the defendant does have a legal refund claim. Or, in any case, a 

statutory refund claim (that already embraces equitable concerns). See, e.g., Lopshire, 103 F.3d at 

885 (refund claimants under § 403 ―must . . . show that the equities favor [statutory] restitution‖).

3. Counterclaim 3 — Document Request and Civil Penalties

3.1 Preliminary note

Counterclaim 3 has changed over the course of the parties‘ Rule 12(b)(6) briefing. As pleaded, 

Counterclaim 3 seeks civil penalties for the Trust Funds‘ failure to provide certain documents that 

Trayer requested; the claim is couched under ERISA § 502(c)(1)(B), 29 U.S.C. § 1132(c)(1)(B). 

(See ECF No. 9 at 10-11.) The parties now seem to agree that this claim is not open to Trayer. 

Only plan participants or beneficiaries can bring document-refusal claims under § 502(c)(1)(B). 

Employers cannot. See 29 U.S.C. § 1132(c)(1)(B) (discussing remedy available to ―a participant or 

beneficiary‖). The facts underlying Counterclaim 3 have also changed: One week after Trayer 

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ORDER (No. 15-cv-04234-LB) 8

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filed its counterclaim, the Trust Funds gave Trayer the requested material. (See ECF No. 32 at 7 n. 

3.)

This has prompted Trayer to change its request. Trayer now asks that it be awarded attorney‘s 

fees and costs for having to file Counterclaim 3; it frames this as ―appropriate equitable relief‖ 

under ERISA § 502(a)(11), 29 U.S.C. § 1132(a)(11)(B). (ECF No. 32 at 7.)

Insofar as Counterclaim 3 seeks civil penalties under ERISA § 502(c)(1)(B), it is dismissed 

with prejudice. As for the new request for attorney‘s fees and costs, strictly speaking, it is not 

contained in Trayer‘s counterclaim pleading. But Trayer could almost certainly amend its 

counterclaim to rectify this problem — and Trayer has asked that it be allowed to make that 

amendment. (ECF No. 32 at 7 n. 2.) Both because the court construes allegations in the nonmovant Trayer‘s favor, and because the parties have joined the issue, the court addresses the 

§ 502(a)(11) request for ―equitable relief.‖

3.2 Discussion

There seems to be no dispute that 29 U.S.C. § 1021(k) obligated the Trust Funds to provide 

Trayer with the documents that the latter requested. There is thus no dispute that, for as long as 

they did not give Trayer the requested material, the Trust Funds were out of compliance with 

§ 1021(k). The parties disagree over Trayer‘s right to recover attorney‘s fees and costs for filing 

Counterclaim 3 as ―equitable relief‖ under § 502(a)(11). Their precise dispute is over the nature of 

the fees and costs: Does a claim for attorney‘s fees and costs seek equitable relief under 

502(a)(11)? Or is it effectively a legal claim for money damages that can‘t be roped into 

502(a)(11)?

Section 502(a)(11) of ERISA in part provides:

A civil action may be brought . . . in the case of a multiemployer plan, by . . . any 

employer that has an obligation to contribute to the plan, (A) to enjoin any act or 

practice which violates . . . [29 U.S.C. § 1021(k) — the document-provision statute 

that the Trust Funds allegedly violated] . . . , or (B) to obtain appropriate equitable 

relief . . . to redress such violation . . . .

29 U.S.C. § 1132(a)(11).

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ORDER (No. 15-cv-04234-LB) 9

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The Trust Funds acknowledge that failing to provide requested documents can give rise to a 

claim for ―appropriate equitable relief‖ under § 502(a)(11). They deny, however, that the requested 

fees and costs constitute equitable relief. Rather, in the Trust Funds‘ view, fees and costs are in the 

nature of legal damages. They argue that legal damages cannot be awarded under § 502(a)(11) 

and, to support this position, they point to the Ninth Circuit‘s decisions in FMC and Doctors 

Medical as well as to the Supreme Court‘s recent decision in Montanile v. Bd. of Trs. of Nat’l 

Elevator Indus. Health Benefit Plan, 136 S.Ct. 651 (2016).

This court agrees. Claims for money damages do not seem to be recognized under ERISA 

sections that provide for equitable relief. See FMC, 122 F.3d at 1260-62; Doctors Medical, 286 F. 

Supp. 2d at 1236-40. If these fees and costs could be recovered under § 502(a)(11), they would 

have to be in the nature of a claim for equitable restitution. But the fees and costs that Trayer seeks 

are not in the nature of a restitutionary remedy at all — equitable or legal — because Trayer seeks 

neither the return of ―particular property‖ to which it can ―assert title‖ (equitable restitution) nor 

the recovery of ―money to pay for some benefit‖ that it bestowed on the Trust Funds (legal 

restitution). See Doctors Medical, 286 F. Supp. 2d at 1237 (quoting Great-West Life & Annuity Ins. 

Co. v. Knudsen, 534 U.S. 204, 214 (2002)). The fees and costs that Trayer requests are wholly in 

the nature of a penalty — or, more accurately, damages. ―Although . . . [it] dance[s] around the 

word, what [Trayer] in fact seek[s] is nothing other than compensatory damages — monetary 

relief for . . . losses [it] suffered as a result of the [Trust Funds‘] alleged breach of [statutory] 

duties. Money damages are, of course, the classic form of legal relief.‖ Mertens v. Hewitt Assocs., 

508 U.S. 248, 255 (1993) (emphases in original). What Counterclaim 3 seeks, in sum, is 

essentially a legal remedy. And that cannot be had under the ―equitable relief‖ term of ERISA 

§ 502(a)(11).

The Supreme Court‘s recent decision in Montanile confirms this. The Trust Funds‘ description 

of Montanile, and its application to this case, is entirely correct and the court effectively adopts it. 

(See ECF No. 33 at 9.) Montanile dealt with the ―equitable relief‖ term of ERISA § 502(a)(3), 

rather than the identical term of § 502(a)(11), which is involved in this case, but the court sees no 

reason that Montanile’s reasoning should not apply equally here. The Montanile Court explained 

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that ―equitable relief‖ under ERISA § 502(a)(3) ―is limited to  ̳those categories of relief that were 

 ̳typically available in equity‘‖ before the law and equity courts merged in 1938. Montanile, 136 

S.Ct. at 657 (quoting Mertens, 508 U.S. at 256) (emphasis removed). ―Equitable remedies are, as a 

general rule, directed against a specific thing‖ — such as ―specifically identified funds‖ — so that 

―they give or enforce a right to or over some particular thing . . . rather than a right to recover a 

sum of money generally out of the defendant‘s assets.‖ Montanile, 136 S.Ct. at 657-59 (quotation 

omitted) (discussing authorities). A claim for money judgment ―against the defendant‘s general 

assets . . . [seeks] a legal remedy.‖ Id. at 658 (emphasis in original). Montanile thus held that a 

plan administrator‘s claim was not equitable in nature if it was not directed at specific funds still in 

the defendant‘s possession. Id. at 657-59. Here, too, Trayer is not seeking ―particular‖ and 

―specifically identified funds‖; it asks for relief from the Trust Funds‘ general assets to 

recompense its outlays for Counterclaim 3. That is an essentially legal remedy that cannot be 

folded into the ―equitable relief‖ term of ERISA § 502(a)(11)(B). The Ninth Circuit‘s decision in 

FMC, supra, suggests, not only that Trayer‘s request fails to state a claim on which relief can be 

granted, but also, because it is not cognizable under § 502(a)(11)‘s ―equitable relief‖ term, that it is 

a request over which this court lacks subject-matter jurisdiction. See FMC, 122 F.3d at 1235-62.

It is possible that Trayer could amend its Counterclaim 3 to state a viable claim for the 

attorney‘s fees and costs associated with litigating its document request. The theory supporting 

such relief would have to look quite different from the one that Trayer has so far advanced; but, 

given the material before it, the court cannot say that a salvaging amendment is impossible. The 

court therefore dismisses Counterclaim 3 with leave to amend.

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CONCLUSION

The Ninth Circuit does not recognize a common-law claim for restitution that mirrors, and is 

additional to, the statutory claim for a refund of overpaid contributions under ERISA 

§ 403(c)(2)(A). Counterclaim 2 is therefore dismissed with prejudice. Counterclaim 3, as 

originally pleaded, is also dismissed with prejudice. The request for attorney‘s fees and costs that 

now populates Counterclaim 3 seeks an essentially legal remedy that cannot be pursued as 

―equitable relief‖ under ERISA § 502(a)(11). Counterclaim 3 is therefore dismissed with leave to 

amend.

This disposes of ECF No. 18.

IT IS SO ORDERED.

Dated: May 3, 2016

______________________________________

LAUREL BEELER

United States Magistrate Judge

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