Source: https://m.openjurist.org/87/f3d/1049/marx
Timestamp: 2018-07-17 04:02:09
Document Index: 410155850

Matched Legal Cases: ['§ 1132', '§ 1109', '§ 1102', '§ 1102', '§ 1102', '§ 1102', '§ 1476', '§ 1102', '§ 1102']

87 F. 3d 1049 - Marx
87 F3d 1049 Marx
87 F.3d 1049
35 Fed.R.Serv.3d 489, 20 Employee Benefits Cas. 1425,
96 Cal. Daily Op. Serv. 4589,
96 Daily Journal D.A.R. 7411,
Pens. Plan Guide P 23921D
Sol F. MARX; Harry F. Crooks; and Dallas D. Hann,
LORAL CORPORATION, a New York Corporation; Goodyear Tire &
Rubber Company, Inc., an Arizona Corporation;
Goodyear Aerospace Corporation, an
Arizona Corporation,
Sol F. MARX; Harry F. Crooks; and Dallas D. Hann, on
LORAL CORPORATION, a New York Corporation; Goodyear
Aerospace Corporation, an Arizona Corporation,
Concerning the claim for failure to provide benefits, the court stated that 29 U.S.C. § 1132(a)(1)(B) is the ERISA equivalent of a breach of contract action (citing Miller v. Pension Plan for Employees of Coastal Corp., 780 F.Supp. 768, 770 (D.Kan.1991), aff'd, Miller v. Coastal Corp., 978 F.2d 622 (10th Cir.1992), cert. denied, 507 U.S. 987, 113 S.Ct. 1586, 123 L.Ed.2d 152 (1993)). The Plan, however, expressly allowed the defendants to amend the Plan's provisions, thereby suggesting that no "breach" occurred when defendants decreased the plaintiffs' benefits. Moreover, neither oral nor written representations were sufficient to modify the terms of the Plan. The court noted that, as a result, the plaintiffs relied upon fraud and estoppel theories to support their claim.1 Neither theory, however, was sufficient to save the plaintiffs' claim. In Olson v. General Dynamics Corp., 960 F.2d 1418 (9th Cir.1991), cert. denied, 504 U.S. 986, 112 S.Ct. 2968, 119 L.Ed.2d 588 (1992), we held that fraud claims are preempted by ERISA's statutory scheme; and under Greany v. Western Farm Bureau Life Ins. Co., 973 F.2d 812, 821-22 (9th Cir.1992), equitable estoppel principles apply under ERISA only when the provisions of the plan are ambiguous, which they were not in this case.
The district court also concluded that judgment on the pleadings was appropriate on the plaintiffs' breach of fiduciary duty claim under 29 U.S.C. § 1109 because relief under that provision "is limited to relief protecting the integrity of the plan as a whole and does not extend to individual plan participants." (Quoting Williams v. Caterpillar, Inc., 944 F.2d 658, 665 (9th Cir.1991)). Because the plaintiffs sought recovery on their own behalf, rather than for the Plan as a whole, defendants were entitled to judgment.
Defendants opposed the motion, arguing that the plaintiffs' notice of appeal was untimely under Fed. R.App. P. 4(a)(1), and that any extension of time was therefore inappropriate. In reply, the plaintiffs acknowledged that their notice of appeal was untimely, explaining the late filing as follows:
Despite the late filing, the district court granted the plaintiffs' motion for extension of time on October 22, 1993, and allowed them "the full amount of time granted within Fed. R.App. P. 4(a)(5)." In its order, the district court relied upon Pioneer Inv., supra, in which the Supreme Court interpreted the standard for "excusable neglect" under Bankruptcy Rule 9006(b)(1). The district court concluded that, under the Pioneer Inv. standard, the difficulties the plaintiffs' counsel encountered in arranging a meeting with the class the plaintiffs amounted to excusable neglect.
A district court's order granting a party an extension of time in which to file a notice of appeal is reviewed for abuse of discretion. Pratt v. McCarthy, 850 F.2d 590, 591 (9th Cir.1988). This court reviews a district court's grant of judgment on the pleadings de novo. 3550 Stevens Creek Assocs. v. Barclays Bank, 915 F.2d 1355, 1357 (9th Cir.1990), cert. denied, 500 U.S. 917, 111 S.Ct. 2014, 114 L.Ed.2d 101 (1991).
We have previously established a strict standard for demonstrating excusable neglect. The standard allows an extension of time only under extraordinary circumstances where injustice would otherwise result. Pratt, 850 F.2d at 592-93 (citing Alaska Limestone Corp. v. Hodel, 799 F.2d 1409, 1411 (9th Cir.1986) (per curiam); Islamic Republic of Iran v. Boeing Co., 739 F.2d 464, 465 (9th Cir.1984) (per curiam); and other Ninth Circuit cases). "Thus, we require both extraordinary circumstances preventing a timely filing and injustice resulting from denying the appeal." Pratt, 850 F.2d at 593 (emphasis in original). Inadvertence or mistake of counsel does not constitute excusable neglect. Alaska Limestone Corp., 799 F.2d at 1411.
Acknowledging this stringent standard, the district court nevertheless found that the plaintiffs' actions constituted "excusable neglect," as that term was defined by the Supreme Court in Pioneer Inv., 507 U.S. at 380, 113 S.Ct. at 1490. In Pioneer Inv., the Supreme Court held that, under Bankruptcy Rule 9006(b)(1), neglect "encompasses both simple, faultless omissions to act and, more commonly, omissions caused by carelessness." Id. at 388, 113 S.Ct. at 1495. Thus, excusable neglect includes "situations in which the failure to comply with a filing deadline is attributable to negligence." Id. at 394, 113 S.Ct. at 1497.
The Supreme Court concluded in Pioneer Inv. that the determination of whether neglect is "excusable" is ultimately an equitable one, taking into account all the relevant circumstances surrounding the party's omission. 507 U.S. at 395, 113 S.Ct. at 1498. These circumstances include the danger of prejudice to the non-movant, the length of the delay and its potential impact upon judicial proceedings, the reason for the delay and whether it was in the reasonable control of the movant, and whether the movant acted in good faith. Id.
Although Pioneer Inv. arose in the context of the Bankruptcy Rules, its rationale would seem to apply equally to the Federal Rules of Appellate Procedure. The Court noted in Pioneer Inv. that it granted certiorari "[b]ecause of the conflict in the courts of appeals over the meaning of 'excusable neglect,' " and then, in a footnote, stated that, in addition to a conflict with regard to its application in the bankruptcy context, "[t]he Courts of Appeals similarly have divided in their interpretations of 'excusable neglect' as found in Rule 4(a)(5) of the Federal Rules of Appellate Procedure." 507 U.S. at 387, 113 S.Ct. at 1494.
The Second Circuit has expressly held that, because the analysis in Pioneer Inv. rests upon the plain meaning of the words "excusable neglect" and draws upon the use of those words in federal rules other than the Bankruptcy Rules, it is directly applicable to Federal Appellate Rule 4. United States v. Hooper, 9 F.3d 257, 259 (2d Cir.1993).
More importantly, after the oral argument in this case, we held in Reynolds v. Wagner, 55 F.3d 1426, 1429 (9th Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 339, 133 L.Ed.2d 237 (1995), that although Pioneer Inv. arose in the context of the Bankruptcy Rules, its rationale applies equally to Fed. R.App. P. 4(a)(5).
The district court in this case concluded that, under Pioneer Inv.'s "flexible understanding" of excusable neglect, see 507 U.S. at 389, 113 S.Ct. at 1495, the plaintiffs should be excused from their failure to file a timely notice of appeal:
Under the abuse of discretion standard, however, this court cannot reverse the district court's ruling unless it has a definite and firm conviction that the lower court committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors. See Marchand v. Mercy Medical Center, 22 F.3d 933, 936 (9th Cir.1994). The district court's analysis of the Pioneer Inv. factors in this case, although considerably lenient to the plaintiffs, was not a clear error of judgment. Accordingly, we affirm the district court's order granting the plaintiffs an extension of time to file their second notice of appeal.
On appeal, the plaintiffs do not address the district court's ruling on their breach of fiduciary duty claims. However, they advance three arguments against the district court's ruling on the claim for failure to provide benefits: (1) The reduction of benefits under the Plan was invalid because the Plan did not provide a procedure for its amendment and for identifying those persons with authority to amend, as is required by 29 U.S.C. § 1102(b)(3); (2) the defendants' promises of vested health care benefits were enforceable contracts independent of ERISA; and (3) the defendants should be equitably estopped from denying the benefits at issue. Each of these arguments fails.
A. The Plaintiffs' 29 U.S.C. § 1102 Claim
Much of the plaintiffs' brief is devoted to their argument that the amendments to the Plan were invalid because the Plan did not contain, as is required by 29 U.S.C. § 1102(b)(3), a procedure for Plan amendment and for identifying the persons who have authority to amend the Plan. Defendants argue that this issue was not presented to the district court (and, indeed, was not alleged in either the plaintiffs' original or amended complaint) and therefore should not be considered by this court. Defendants are correct.
"Generally, an appellate court will not consider arguments not first raised before the district court unless there were exceptional circumstances." In re Professional Inv. Properties of America, 955 F.2d 623, 625 (9th Cir.1992) (citing Villar v. Crowley Maritime Corp., 782 F.2d 1478, 1483 (9th Cir.1986)), cert. denied, 506 U.S. 818, 113 S.Ct. 63, 121 L.Ed.2d 31 (1992). We have identified three instances in which exceptional circumstances exist: "(1) review is necessary to prevent a miscarriage of justice; (2) a new issue arises while an appeal is pending because of a change in the law and (3) 'the issue presented is purely one of law and either does not depend on the factual record developed below, or the pertinent record has been fully developed.' " Professional Inv. Properties, 955 F.2d at 625 (quoting Bolker v. C.I.R., 760 F.2d 1039, 1042 (9th Cir.1985)). None of these circumstances are present in this case. The plaintiffs therefore are precluded from asserting their § 1102 claim in this appeal. See, e.g., Flick v. Borg-Warner Corp., 892 F.2d 285, 288 (3rd Cir.1989) (ERISA plaintiff precluded from arguing on appeal that defendant could not revise its original plan because the plan did not contain a procedure for amendment when plaintiff failed to raise that issue in the district court).2
B. Waiver of Breach of Contract Claim
The plaintiffs, however, have waived this argument. Ninth Circuit authority clearly states that "[a]ll causes of action alleged in an original complaint which are not alleged in an amended complaint are waived." King v. Atiyeh, 814 F.2d 565, 567 (9th Cir.1987) (citing London v. Coopers & Lybrand, 644 F.2d 811, 814 (9th Cir.1981)). The rationale behind this rule is stated bluntly in Studio Carpenters Local Union No. 946 v. Loew's, Inc.: "If appellant desired to rely upon the original complaint, it should have refused to plead further." 182 F.2d 168, 170 (9th Cir.1950), cert. denied, 340 U.S. 828, 71 S.Ct. 64, 95 L.Ed. 608 (1950).
Other courts, as well as legal scholars, have criticized this Circuit's rule as "formalistic," "rigid," and "too mechanical." See Davis v. TXO Production Corp., 929 F.2d 1515, 1517 (10th Cir.1991); and 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1476 at 560-61 (2d ed.1990). As another panel of this court has noted, however: "We are well aware that other circuits do not look with favor upon this rule, ... but we as a panel are not at liberty to re-examine its validity." London, 644 F.2d at 814.
The plaintiffs' final argument on appeal is that, under this court's holding in Greany, 973 F.2d at 812, defendants should be equitably estopped from denying the plaintiffs benefits under the Plan. In Greany, this Court held that "[a] plaintiff cannot avail himself of a federal ERISA estoppel claim based upon statements of a plan employee which would enlarge his rights against the plan beyond what he could recover under the unambiguous language of the plan itself." 973 F.2d at 822. In other words, equitable estoppel principles are applicable under ERISA only when the terms of the plan are ambiguous.
Despite the plaintiffs' earlier attempt to distance themselves from Greany, the district court nevertheless addressed the merits of an equitable estoppel argument in its order granting judgment on the pleadings. The court concluded that, "[b]ecause the official plan documents unambiguously reserved to the Plaintiffs' employers the right to make changes in the Plan," Greany mandated judgment on the pleadings for the defendants.
The plaintiffs argue on appeal that the Plan is ambiguous because it provides no guidance or method on how the Plan is to be modified. As noted previously, however, the Supreme Court recently held in Curtiss-Wright Corp. that amendment language similar to that in the Plan in this case sets forth a sufficient amendment procedure for purposes of 29 U.S.C. § 1102(b)(3). --- U.S. ----, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995). Thus, even if this court were to conclude that the plaintiffs did not waive their equitable estoppel argument, that argument fails because the Plan provides a sufficient amendment procedure and is therefore not ambiguous. Because the Plan is not ambiguous, Greany forecloses any equitable estoppel claim.
Even if the plaintiffs were permitted to present this argument on appeal, they would not succeed on their claim. The plaintiffs rely extensively in the brief on the Third Circuit's holding in Schoonejongen v. Curtiss-Wright Corp., 18 F.3d 1034 (3rd Cir.1994), which held that a plan containing an amendment procedure virtually identical to that in the Plan at issue in this case failed to satisfy § 1102(b)(3). In a recent intervening unanimous opinion, however, the Supreme Court reversed the Third Circuit. See Curtiss-Wright Corp. v. Schoonejongen, --- U.S. ----, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995). The Supreme Court's opinion vitiates the position the plaintiffs take in their brief