Court Opinion

ID: 4280179
Source: CourtListenerOpinion
Date Created: 2018-05-31 20:00:35.184783+00
Date Added: 2024-06-11T14:34:44.086572
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        MAY 31 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

JIM MILLER,                                     No.    16-35717

                Plaintiff-Appellant,            D.C. No. 3:15-cv-00571-AC

 v.
                                                MEMORANDUM*
ERIC OLSEN, an individual, president of
the Board of Directors of Euterpe, Inc., and
administrator of the Euterpe, Inc. Emplyee
Equity Growth Plan; et al.,

                Defendants-Appellees.

                   Appeal from the United States District Court
                            for the District of Oregon
                   John V. Acosta, Magistrate Judge, Presiding

                       Argued and Submitted May 18, 2018
                                Portland, Oregon

Before: McKEOWN and PAEZ, Circuit Judges, and LASNIK,** District Judge.

      Plaintiff Jim Miller appeals the district court’s order granting defendants’

motion for summary judgment on Miller’s Employment Retirement Income

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable Robert S. Lasnik, United States District Judge for the
Western District of Washington, sitting by designation.
Security Act (“ERISA”) claims, on the basis that the Euterpe Employee Equity

Growth Plan (“EGP”) was not a defined contribution plan subject to ERISA. 29

U.S.C. § 1011-1461. We have jurisdiction under 28 U.S.C. § 1291, and we affirm

the district court.

       We recently explained that whether or not the primary purpose of a plan is to

provide deferred compensation or retirement income is the “paramount

consideration” in determining whether a compensation plan qualifies as an

employee pension benefit plan under ERISA. See Rich v. Shrader, 823 F.3d 1205,

1210 (9th Cir. 2016); see also 29 C.F.R. § 2510.3-2(c) (exempting “bonus

payments” from the definition of a “pension plan” “unless such payments are

systematically deferred to the termination of covered employment or beyond, or so

as to provide retirement income to employees”).

       The “primary purpose” of the EGP is not to provide retirement benefits or

deferred income, but rather to encourage longevity and provide increased

compensation to select Euterpe employees. Although the EGP provided

participants with shares that vested over twenty years, participants were allowed to

“retire” their shares prior to completing twenty years of service and prior to

retirement. Cf. Rich, 823 F.3d at 1208 (stating that an expectation that participants

hold their shares until leaving the firm did not mean that the primary purpose of the

plan was to provide retirement benefits or deferred income); see also id. at 1211

                                          2
(finding that a vesting schedule in the plan reinforces the conclusion that the plan

is not subject to ERISA). Given the option to retire shares early under the EGP,

there is no “systematic deferral” of redemption until retirement or termination. Id.

at 1210. Additionally, the selection of employees to participate in the EGP was at

the sole discretion of the Board of Directors of Euterpe, which further

demonstrates that the primary purpose of the EGP was not to provide retirement or

deferred income. Id.

      Defendants argue that we could also affirm the district court on the basis that

the EGP lacks a source of financing and that it does not have an ongoing

administrative scheme. As the EGP fails the primary purpose test, we need not

reach either of these issues. Id. Additionally, Miller argues that the “surrounding

circumstances” test adopted in Donovan v. Dillingham, 688 F.2d 1367 (11th Cir.

1982), applies, while defendants argue against applying that test. We need not

resolve whether to apply the test, as even considering all the surrounding

circumstances, a “reasonable person” could not conclude that the EGP passed the

“primary purpose” test. Id. at 1373.

      AFFIRMED.

                                          3