Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_03-cv-04743/USCOURTS-cand-4_03-cv-04743-11/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1104 Recovery of Benefits to Employee

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UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE JDS UNIPHASE CORPORATION Master File No. 03-04743 WWS

ERISA LITIGATION

This Document Relates to:

ORDER

ALL ACTIONS

_____________________________________/

Plaintiffs Douglas Pettit and Alice Hodges-Toby, on behalf of the JDS Uniphase

Corporation (JDSU) 401(K) Retirement Plan, the former OCLI 401(k) Retirement Plan, and a

class of similarly situated current and former participants, move to dismiss JDSU’s

counterclaims. JDSU argues that claim releases signed by Pettit, Hodges-Toby, and other

unnamed class members bar the plaintiffs’ ERISA breach of fiduciary duty claims. JDSU’s

counterclaims lack merit. 

Pettit and Hodges-Toby received severance packages from JDSU that included release

agreements. The agreements stated: “you completely release from and agree not to file, cause

to be filed, or otherwise pursue against the company, its affiliated, related, parent or subsidiary

corporations, and its present and former directors, officers, and employees any and all claims

you may now have or have ever had against the Company.” JDSU argues that the plaintiffs’

§§ 502(a)(2) and (a)(3) ERISA claims are covered by the releases. 

The releases signed by Pettit, Hodges-Toby, and other employees do not bar ERISA

fiduciary duty claims brought by plan beneficiaries on behalf of the plan. Bowles v. Reade,

Case 4:03-cv-04743-CW Document 146 Filed 09/11/06 Page 1 of 3
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 Ninth Circuit cases have recognized, in different contexts, the right of individual beneficiaries to

assert ERISA claims in their individual capacity. See Comer v. Micor, Inc., 436 F.3d 1098, 1103 (9th Cir.

2006) (arbitration agreement); Landwehr v. DuPree, 72 F.3d 726, 732 (9th Cir. 1995) (statute of

limitations); but see Kayes v. Pac. Lumber Co., 51 F.3d 1449, 1462 (9th Cir. 1995) (“ERISA grants no

private right of action by a beneficiary qua beneficiary; rather, it accords beneficiaries the right to sue on

behalf of the entire plan if a fiduciary breaches the plan's terms.” (citation omitted)). But neither case

diminishes the authority of Bowles with respect to the effect of individual releases on derivative ERISA

claims.

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198 F.3d 752, 759-61 (9th Cir. 1999), is in point. In Bowles, a plan beneficiary reached a

settlement agreement with a trustee regarding various breach of fiduciary duty claims. Id. at

756-57. Based on the settlement agreement, the defendant trustee sought to dismiss with

prejudice all of the beneficiary’s claims. Id. The district court, however, construed the

settlement agreement to release “only those claims legally brought by Plaintiff Bowles.” Id. at

757. The district court held that “Bowles [could not] and did not release the Plans’ claims

against Defendant Reade.” Id. at 757. The Ninth Circuit affirmed the district court’s treatment

of the settlement, holding that “[b]ecause Bowles’s [fiduciary duty] claims are not truly

individual, it was proper for the district court to conclude that Bowles could not settle them

without The Plans’ consent.”1 Id. at 760. The court held that the district court properly allowed

Bowles to remain “as a plaintiff in her representative capacity on behalf of the Plans and the

participants notwithstanding their release of her individual claims against Ms. Reade.” Id. at

761.

Here, as in Bowles, the plaintiffs seek the restoration of the plans’ losses. Compare

Second Amended Consolidated Complaint for Violations of ERISA (2d Am. Compl.) Prayer for

Relief C-G with Bowles, 198 F.3d at 759 n.3. Although the plaintiffs request that funds

recovered by the plans be proportionally allocated to individual accounts, see 2d Am. Compl.

Prayer for Relief F-G, the claims are not on behalf of individual beneficiaries. 

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A retirement plan, like the Plan at issue here, is nothing more than an

aggregation of its participant’s [sic] individual accounts, and therefore any loss to

the Plan will have caused a loss to some or all of the plan’s individual accounts. 

It follows that any recovery through a suit brought on behalf of a plan pursuant to

ERISA § 502(a)(2) and § 409(a) will redound to the ultimate benefit of those

participants’ individual accounts affected by the fiduciary’s breach.

DiFelice v. US Airways, Inc., 235 F.R.D. 70, 76 (E.D. Va. 2006) (citing In re Schering-Plough

Corp. 420 F.3d 231, 241 (3rd Cir. 2005)). Moreover, in alleging that the defendants failed to

disclose complete and truthful material information, the plaintiffs base their claim on conduct

directed at all plan beneficiaries, not particular individuals. See, e.g., 2d Am. Compl. ¶¶ 6, 141,

158. The plaintiffs allege plan-wide fiduciary wrongdoing and seek plan-wide relief. 

Employees’ individual releases, therefore, do not bar the present claims.

Accordingly plaintiffs’ motion to dismiss JDSU’s counterclaims is GRANTED.

IT IS SO ORDERED.

September ___, 2006 _______________________________________

WILLIAM W SCHWARZER

SENIOR UNITED STATES DISTRICT JUDGE

Case 4:03-cv-04743-CW Document 146 Filed 09/11/06 Page 3 of 3