Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_08-cv-00534/USCOURTS-cand-4_08-cv-00534-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1132 E.R.I.S.A.

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JENNIFER OSBELT,

Plaintiff, No. C 08-0534 PJH

v. ORDER GRANTING MOTION

TO REMAND AND DENYING

DAVID D. MCDONALD, et al., FEES AND COSTS

Defendants.

_______________________________/

Plaintiff’s motion to remand the complaint came on for hearing before this court on

May 21, 2008. Plaintiff, Jennifer Osbelt (“plaintiff”), appeared through her counsel, Ara R.

Jabagchourian and Sean E. Ponist. Defendants David D. McDonald and Donna K.

McDonald (collectively “defendants”), appeared through their counsel, William J. Goines

and Cindy Hamilton. Having read the parties’ papers and carefully considered their

arguments and the relevant legal authority, and good cause appearing, the court hereby

GRANTS plaintiffs’ motion to remand, and DENIES plaintiff’s corresponding motion for fees

and costs, for the reasons stated at the hearing, and summarized as follows.

1. Defendants have failed to establish that a valid basis for removability exists

due to complete ERISA preemption. The gravamen of plaintiff’s first amended complaint is

a partnership dispute, and the complaint’s allegations do not even mention plaintiff’s 401(k)

plan – the ERISA plan on which defendants base their motion. See generally Declaration

of Ara Jabagchourian ISO Remand Motion (“Jabagchourian Decl.”), Ex. A. Moreover, all

twelve of plaintiff’s claims for relief are state law claims premised on underlying allegations

that generally revolve around defendants’ breach of the partnership operating agreement,

and subsequent actions allegedly taken to misappropriate plaintiff’s and the partnership’s

Case 4:08-cv-00534-PJH Document 37 Filed 05/21/08 Page 1 of 2
United States District Court

For the Northern District of California

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assets, among other things. See id. generally. 

Defendants argue that, despite the presence of state law claims in her complaint,

plaintiff’s true claim is one that alleges mismanagement of plaintiff’s 401(k) plan – an

ERISA plan. Specifically, defendants rely on plaintiff’s January 2008 deposition, at which

plaintiff stated that it was her belief that defendants had inappropriately and unlawfully

taken her money and put it in the company’s 401(k) and pension profit sharing plan without

her permission. See Declaration of Cindy Hamilton (“Hamilton Decl.”), Ex A. However,

while it is possible in appropriate circumstances for deposition testimony to establish

grounds for removability, see Karambelas v. Hughes Aircraft Co., 992 F.2d 971, 974 (9th

Cir. 1993), this is not the case here. For plaintiff’s deposition testimony does not expressly

implicate an ERISA claim. Rather, plaintiff’s testimony supports plaintiff’s allegation of a

misappropriation claim based on defendants’ improper taking of plaintiff’s money and its

placement into a 401(k) fund. This is distinguishable from a claim based on defendants’

mismanagement of 401(k) funds once in the 401(k) plan – which would more likely lend

itself to ERISA preemption. 

In sum, the court concludes that neither plaintiff’s first amended complaint, nor

plaintiff’s January 2008 deposition testimony, support removability based on ERISA

preemption. 

2. Plaintiff’s corresponding motion for fees and costs is DENIED. While the

court has concluded that no grounds for removability are present, the court is not

convinced that defendants’ counsel was objectively unreasonable in seeking to remove the

present action. 

IT IS SO ORDERED.

Dated: May 21, 2008 ______________________________

PHYLLIS J. HAMILTON

United States District Judge

Case 4:08-cv-00534-PJH Document 37 Filed 05/21/08 Page 2 of 2