Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_16-cv-00948/USCOURTS-azd-2_16-cv-00948-0/pdf.json

Parties Involved:
GoDaddy.com LLC
Plaintiff
GoDaddy.com LLC Welfare Benefit Plan
Plaintiff
Dustin Monson
Defendant

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

GoDaddy.com LLC and GoDaddy.com LLC 

Welfare Benefit Plan, 

Plaintiffs, 

v. 

Dustin Monson, 

Defendant. 

No. CV-16-0948-PHX-DKD

ORDER

 Defendant Dustin Monson moves to dismiss the breach of contract claim brought 

in Count Two of the Complaint by Plaintiffs GoDaddy.com LLC and GoDaddy.com LLC 

Welfare Benefit Plan (“GoDaddy”). (Doc. 15) Monson argues that GoDaddy cannot 

maintain a state law cause of action because it is expressly preempted by the Employee 

Retirement Income Security Act of 1974 (“ERISA”). In response, GoDaddy argues that 

a breach of contract claim is permitted in these circumstances by a binding and valid 

Ninth Circuit case. (Doc. 16) The Court concludes that this case is distinguishable and 

finds that the breach of contract claim is a legal remedy that is not available under 

ERISA’s equitable recovery scheme. The Court will therefore grant Monson’s motion to 

dismiss. 

Factual and Procedural Background 

 The relevant background appears to be undisputed. (Docs. 15, 16, 17) Monson 

was injured in a motorcycle accident while he was a GoDaddy employee and covered by 

the GoDaddy Welfare Benefit Plan (“Plan”). He recovered tort damages for his injuries 

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when he settled his demands for the policy limit from the adverse driver and from his 

own underinsured motorist policy. Because the Plan had paid for Monson’s medical 

expenses, it demanded reimbursement from settlement proceeds pursuant to the Plan’s 

terms for subrogation and reimbursement. Monson did not comply and so GoDaddy 

initiated this action seeking legal and equitable relief. 

Analysis 

 ERISA permits civil actions 

by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates . . . 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 . . . the terms of the plan. 

29 U.S.C. § 1132(a)(3). By its plain terms, equitable relief is authorized. The question 

here is whether Section 1132(a)(3) permits legal relief such as the breach of contract 

claim asserted in Count Two. At the outset, the Court notes that the statute’s clear failure 

to reference legal relief would appear to doom any claims for breach of contract. Mertens 

v. Hewitt Associates, 508 U.S. 248, 255 (1993) (“Money damages are, of course, the 

classic form of legal relief.”). Providence Health Plan v. McDowell, 385 F.3d 1168, 

1174 (9th Cir. 2004) (quoting Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 

204, 214 (2002)) (“The basis for petitioners’ claim is . . . that petitioners are contractually 

entitled to some funds for benefits that they conferred. The kind of restitution that 

petitioners seek, therefore, is not equitable—the imposition of a constructive trust or 

equitable lien on particular property—but legal—the imposition of personal liability for 

the benefits that they conferred upon respondents.”) See also Oregon Teamster 

Employers Trust v. Hillsboro Garbage Disposal, Inc., 800 F.3d 1151, 1162 (9th Cir. 

2015) (W. Fletcher, J. concurring) (“[a]n ERISA fiduciary cannot bring a damages suit to 

enforce an ERISA plan; it can sue only for equitable relief. Nor can such a fiduciary 

bring a state-law breach of contract suit to enforce the terms of the ERISA plan, because 

such a suit would clearly “relate to an[ ] employee benefit plan” and thus be preempted. 

29 U.S.C. § 1144(a).”). (internal citation omitted). 

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 GoDaddy argues that its breach of contract claim survives because there is one 

case where the Ninth Circuit did not find that a Plan’s breach of contract claim was 

preempted. McDowell, 385 F.3d at 1173. In McDowell, a Plan sued insureds in state 

court to recover third-party settlement proceeds. Id. at 1171. Specifically, the Plan 

alleged two breach of contract claims: one alleging that the insureds had violated the 

Plan contract and another claim alleging that the insureds had a secondary contract 

between the insureds and their attorneys which “direct[ed] their attorney to reimburse 

[the Plan] for benefits paid in the event of any recovery from a third party.” Id. The 

insureds removed the case to federal court where the district “court held that it had 

removal jurisdiction and that ERISA preemption barred [the Plan’s] claims.” Id. On 

appeal, the Ninth Circuit concluded that the Plan’s breach of contract claim against 

McDowell was not preempted because “[a]djudication of [the Plan’s] claim does not 

require interpreting the plan” and “[b]ecause this is merely a claim for reimbursement 

based upon the third-party settlement, it does not ‘relate to’ the plan.” Id. at 1172.1

 The McDowell Court found that the breach of contract claim was not preempted 

and it also found that the claim was “not within ERISA’s civil enforcement provisions.” 

Id. at 1173. Accordingly, the Court concluded that the claim did not meet the two part 

test for removal jurisdiction and remanded the contract claims to state court. Id. 

 Since then, parties—and Courts—have struggled to harmonize McDowell’s 

conclusion that adjudicating a breach of contract claim does not require interpretation of 

the plan with preexisting Ninth Circuit precedent like Bui v. American Telephone & 

Telegraph Co. Inc., 310 F.3d 1143, 1152 (9th Cir. 2002) (“ERISA preempts [the 

insured’s] contract claims. These claims do not merely reference the ERISA plan, they 

require its construction because the contract allegedly breached is the ERISA plan itself. 

Accordingly, ERISA preempts the contract claims.”) (internal citations omitted). Judge 

 

1

 The Ninth Circuit reached this question because the U.S. Supreme Court explicitly left open the question of “whether a direct action by petitioners against respondents asserting state-law claims such as breach of contract would [be] preempted by ERISA.” Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 220 (2002). 

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William Fletcher’s above-cited concurrence in Oregon Teamster Employers Trust also 

comments on the tension that exists between the ERISA preemption and the Ninth 

Circuit’s holding in McDowell:

McDowell and this case can be distinguished in two ways, but neither finds significant support in ERISA. The result in 

McDowell depends on the panel’s claim that ‘[a]djudication of (the fiduciary’s) claim does not require interpreting the 

plan or dictate any sort of distribution of benefits.’ 

[McDowell, 385 F.3d at 1172]. In this case, by contrast, as the panel opinion explains, OTET’s breach of contract claim both 

requires interpreting the plan and turns on a provision that dictates the distribution of benefits. See Op. at 1156. But the first distinction is entirely illusory, and the second is a distinction without a difference. 

Oregon Teamster Employers Trust, 800 F.3d at 1162. But apart from this fair criticism of 

the rationale of McDowell, there remains a basis to conclude that McDowell still requires 

dismissal of the contract claim where the claim only asserts a breach of the plan itself. 

This is because the McDowell Court addressed two independent breach of contract claims 

but did not distinguish between them in its analysis.2 (Docs. 15, 17) In contrast to 

McDowell where the contract claim also sought to enforce the secondary contract 

between the insureds and their attorneys, GoDaddy’s claim asserts only a breach of the 

plan itself. Thus the claim has reference to an ERISA plan, which necessarily requires 

interpretation of the Plan. In such a case the state claim is properly preempted. Oregon 

Teamster Employers Trust, 800 F.3d at 1156. 

 Nor is there a basis to conclude that the relief sought in Count Two fits within the 

traditional realm of permissible ERISA equitable relief which the Supreme Court 

described at length in Sereboff v. Mid Atlantic Medical Services, 547 U.S. 356, 126 S.Ct. 

1869 (2006). 

 Finally, it may not be necessary to distinguish McDowell. The procedural posture 

of McDowell presented a question of removal jurisdiction which the Ninth Circuit 

 

2

 This Court notes that the Plan was not a party to the secondary contract and that the secondary contract could not have been “enforced without reference to the employee benefit plan.” Providence Health Plan v. McDowell, 3:01-cv-01704-JE, Doc. 13 

(Opinion and Order at 4, n.1) 

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resolved in the negative. In other words, the McDowell breach of contract claim was not 

preempted by ERISA but it could not remain in federal court. 385 F.3d at 1173. 

GoDaddy’s complaint alleges that this Court has removal jurisdiction under 28 U.S.C. § 

1441(c) (“Removal of civil actions; joinder of Federal law claims and State law claims”). 

(Doc. 1 at ¶10) However, GoDaddy does not explain how to distinguish this case from 

McDowell in a way that would allow this Court to retain jurisdiction over the state law 

claim of breach of contract. 

Conclusion 

 Either this case is different from McDowell because GoDaddy’s breach of contract 

claim does require interpretation of the ERISA plan and, as a result, the claim is 

preempted. Or this case is similar to McDowell because the breach of contract claim is 

not within the scope of Section 1132(a) and, therefore, the Court does not have removal 

jurisdiction. Either way, the conclusion is the same and the breach of contract claim 

should not stand in federal court. 

IT IS THEREFORE ORDERED granting Defendant Monson’s Motion to 

Dismiss Count Two of Plaintiff’s Complaint (Doc. 15). 

 Dated this 20th day of September, 2016. 

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