Court Opinion

ID: 9377728
Source: CourtListenerOpinion
Date Created: 2023-03-08 17:00:37.386643+00
Date Added: 2024-06-11T17:17:16.029037
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

RACHAEL WRIGHT WINSOR,                    No. 21-16992
individually and on behalf of the
RingCentral, Inc. Welfare Benefits       D.C. No. 3:21-cv-
Plan, and on behalf of similarly            00227-JSC
situated persons; NICOLE BEICHLE,
individually and on behalf of the
RingCentral, Inc. Welfare Benefits          OPINION
Plan, and on behalf of similarly
situated person,
               Plaintiffs-Appellants,

 v.

SEQUOIA BENEFITS &
INSURANCE SERVICES, LLC;
GREGORY S. GOLUB,
          Defendants-Appellees.

       Appeal from the United States District Court
          for the Northern District of California
   Jacqueline Scott Corley, Magistrate Judge, Presiding

        Argued and Submitted December 9, 2022
               San Francisco, California

                   Filed March 8, 2023
2               WINSOR V. SEQUOIA BENEFITS & INS.

    Before: Daniel A. Bress and Lawrence VanDyke, Circuit
             Judges, and Jane A. Restani, * Judge.

                     Opinion by Judge Bress

                          SUMMARY **

                        ERISA / Standing

    The panel affirmed the district court’s dismissal, for lack
of Article III standing, of ERISA plan participants’ putative
class action alleging breach of fiduciary duty by the manager
of a Multiple Employer Welfare Arrangement, or MEWA.
    Plaintiffs, current and former employees of RingCentral,
participated in RingCentral’s employee welfare benefits
plan. The plan participated in the “Tech Benefits Program”
administered by Sequoia Benefits and Insurance Services,
LLC, a management and insurance brokerage company. The
Tech Benefits Program was a MEWA that pooled assets
from employer-sponsored plans into a trust fund for the
purpose of obtaining insurance benefits for employees at
large-group rates.
    Plaintiffs filed this putative class action on behalf of the
RingCentral plan and other Tech Benefits Program
participants, asserting that Sequoia owed fiduciary duties to

*
  The Honorable Jane A. Restani, Judge for the United States Court of
International Trade, sitting by designation.
**
   This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
               WINSOR V. SEQUOIA BENEFITS & INS.              3

the plan under ERISA because Sequoia allegedly exercised
control over plan assets through its operation of the Tech
Benefits Program. Plaintiffs alleged that Sequoia violated
its fiduciary duties by receiving and retaining commission
payments from insurers, which plaintiffs regarded as
kickbacks, and by negotiating allegedly excessive
administrative fees with insurers, leading to higher
commissions for Sequoia.
    The panel held that plaintiffs failed to establish Article
III standing as to either of their two theories of
injury. Plaintiffs’ first theory of injury was that Sequoia’s
actions allegedly caused them to pay higher contributions for
their insurance, and that eliminating Sequoia’s commissions
and reducing administrative fees would therefore have
lowered plaintiffs’ payments. The panel held, as to this out-
of-pocket-injury theory, that plaintiffs failed to establish the
injury in fact required for Article III standing because their
allegations did not demonstrate that they paid higher
contributions because of Sequoia’s allegedly wrongful
conduct. Plaintiffs thus also failed to plead causation, the
second element of Article III standing. And plaintiffs failed
to plead the third element, that their injury would likely be
redressed by judicial relief, either by the imposition of a
constructive trust on Sequoia’s ill-gotten profits or by the
award of damages to the RingCentral plan.
    Plaintiffs’ second theory of injury was that, as
beneficiaries, they retained an equitable ownership in the
Tech Benefits Program’s trust fund. The panel held that this
theory of standing was barred under Thole v. U.S. Bank N.A.,
140 S. Ct. 1615 (2020), which held that participants in a
defined-benefit pension plan lacked standing to bring an
ERISA claim alleging that the plan’s fiduciaries had violated
their duties of loyalty and prudence by poorly investing the
4              WINSOR V. SEQUOIA BENEFITS & INS.

plan’s assets. The plaintiffs in Thole received a fixed
monthly payment, which did not fluctuate based on the value
of the plan, and therefore suffered no monetary injury. The
panel held that the plaintiffs here did not establish that they
had some equitable interest in plan funds that the Thole
plaintiffs lacked, or that a comparison to trust law could
support their standing when such a comparison did not
prevail in Thole. Although the Tech Benefits Program was
not a defined-benefit pension plan, it similarly provided a
fixed set of benefits as promised in plan documents.

                         COUNSEL

Brock J. Specht (argued), Paul J. Lukas, and Grace I. Chanin,
Nichols Kaster PLLP, Minneapolis, Minnesota; Matthew C.
Helland and Daniel S. Brome, Nichols Kaster LLP, San
Francisco, California; for Plaintiffs-Appellants.
Mark C. Nielsen (argued), David N. Levine, Sarah M.
Adams, Kara P. Wheatley, Paul J. Rinefierd, and Kalena R.
Kettering, Groom Law Group Chartered, Washington, D.C.;
Jeffrey S. Bosley and Andrew G. Row, Davis Wright
Tremaine LLP, San Francisco, California; for Defendants-
Appellees.
Jamie Bowers (argued), Trial Attorney; Thomas Tso,
Counsel for Appellate and Special Litigation; G. William
Scott, Associate Solicitor for Plan Benefits Security; Seema
Nanda, Solicitor of Labor; United States Department of
Labor, Office of the Solicitor, Plan Benefits Security
Division; Washington, D.C.; for Amicus Curiae Secretary of
Labor.
              WINSOR V. SEQUOIA BENEFITS & INS.            5

Meaghan VerGow and Alexander Reed, O’Melveny &
Myers LLP, Washington, D.C.; Janet Galeria and Paul
Lettow, United States Chamber Litigation Center,
Washington, D.C.; for Amicus Curiae Chamber of
Commerce of the United States of America.

                        OPINION

BRESS, Circuit Judge:

    Participants in an ERISA welfare benefits plan sued the
manager of a Multiple Employer Welfare Arrangement
(MEWA) for alleged breach of fiduciary duty. The question
is whether plaintiffs have Article III standing. We hold that
under the facts alleged, they do not. We affirm the dismissal
of plaintiffs’ complaint.
                              I
                             A
    Plaintiffs are current and former employees of
RingCentral, a technology company. Plaintiffs participated
in RingCentral’s employee welfare benefits plan, which is
governed by the Employee Retirement Income Security Act
of 1974 (ERISA). 29 U.S.C. § 1001, et seq. RingCentral
sponsored this plan to provide its employees with benefits
such as medical, dental, and vision insurance.
    From 2013 to 2019, the RingCentral plan participated in
the “Tech Benefits Program” administered by defendants
Sequoia Benefits and Insurance Services, LLC, and Gregory
S. Golub. We will refer to the defendants collectively as
“Sequoia.” The Tech Benefits Program is a Multiple
6              WINSOR V. SEQUOIA BENEFITS & INS.

Employer Welfare Arrangement (MEWA), see 29 U.S.C.
§ 1002(40)(A), that pools assets from more than 180
employer-sponsored plans into a trust fund for the purpose
of obtaining insurance benefits for employees at large-group
rates that may otherwise be unattainable for individual
employer plans.
    RingCentral’s ERISA plan was funded in part by
contributions from RingCentral and in part by employee
contributions. RingCentral determined which insurance
options to make available to its employees and how much, if
anything, employees were required to contribute for the
different benefits. Under the Tech Benefit Program’s
governing documents, RingCentral had broad discretion to
determine employee contributions. The program’s terms did
not set a formula for RingCentral to calculate employee
contributions, and RingCentral’s discretion was subject only
to an obligation to cover at least 75% of the cost for
employees who select single coverage and at least 50% for
employees who select a group health plan. As alleged in
plaintiffs’ complaint, when asked how it determined the
amount employees must contribute, RingCentral “did not
identify a specific formula or set of factors” and instead said
the decision was based on “various factors and discussion.”
The record reflects that in some instances, RingCentral paid
all the premium contributions for certain benefit options,
with participating employees paying nothing.
    Under the Tech Benefits Program, Sequoia selected the
insurance benefits that would be made available to
employers, negotiated the cost of any given benefit with the
insurance provider, and determined how much each
employer plan must contribute to the Tech Benefits
Program’s trust fund in exchange for the plan participants’
selected benefits. The insurance companies charged certain
              WINSOR V. SEQUOIA BENEFITS & INS.           7

costs for the employee benefits, including general
administrative fees and premiums based on the coverage
provided. Sequoia paid those costs out of a trust account
maintained in the name of the Tech Benefits Program.
Participating employers like RingCentral funded this trust
account with plan assets which, as we have noted, included
some employee contributions. The document governing the
Tech Benefits Program provided that “[n]o assets of the
program will be used or diverted to purposes other than for
the exclusive benefit of [participating employees] and for
defraying the reasonable expenses of administering the
program.”
    Under this arrangement, Sequoia effectively operated as
an insurance broker between participating employer plans
and insurance companies. As compensation for these
services, the insurance companies paid Sequoia
commissions. These commissions were set as a portion of
the total fees and premiums paid to each insurance company.
Sequoia’s contracts with RingCentral did not specify the
amount of such commissions—a figure that was instead
negotiated by Sequoia and the insurance companies. But an
agreement between Sequoia and RingCentral did
acknowledge that Sequoia would receive commissions from
insurers. In the case of the Tech Benefits Program’s primary
medical benefit provider, the commission was 6% of the
total cost to the plans. These commissions paid to Sequoia
were not taken directly from the assets of the Tech Benefits
Program but were instead separately paid by the insurance
companies to Sequoia after Sequoia used the program’s
assets to pay for plaintiffs’ insurance benefits.
8              WINSOR V. SEQUOIA BENEFITS & INS.

                              B
    A few years after RingCentral began participating in the
Tech Benefits Program, plaintiffs filed this putative class
action on behalf of the RingCentral plan and other Tech
Benefits Program participants. RingCentral is not a party to
this case.
    In their complaint, plaintiffs asserted that Sequoia owed
fiduciary duties to the plan under ERISA because Sequoia
allegedly exercised control over plan assets through its
operation of the Tech Benefits Program. See 29 U.S.C.
§ 1002(21)(A) (defining who qualifies as a plan fiduciary).
Plaintiffs did not allege that they were deprived of any health
benefits, or that the health benefits they signed up for were
not fully insured.
    Instead, plaintiffs alleged that Sequoia violated its
fiduciary duties in two ways: (1) by receiving and retaining
commission payments from insurers, which plaintiffs regard
as kickbacks; and (2) by negotiating allegedly excessive
administrative fees with insurers, which led to higher
commissions for Sequoia. To some extent, plaintiffs may
believe it is improper for a company like Sequoia to receive
commissions at all, or at least through the arrangement as
designed here. In a way, their complaint thus purports to
challenge a business model for providing employee benefits
that we are told is common.
    The district court dismissed plaintiffs’ complaint for lack
of Article III standing, concluding that plaintiffs had not
alleged sufficient facts indicating that Sequoia’s conduct led
plaintiffs to pay higher contributions or to receive fewer
benefits. Plaintiffs were given leave to amend, and they
subsequently filed what is now the operative complaint.
               WINSOR V. SEQUOIA BENEFITS & INS.             9

    In their amended complaint, plaintiffs alleged that
Sequoia’s supposed breach of fiduciary duty injured them by
requiring plaintiffs to pay higher contributions toward their
benefits and by allegedly interfering with plaintiffs’
purported equitable ownership interest in the Tech Benefits
Program trust fund. Plaintiffs contended that these alleged
injuries could be redressed in either of two ways: (1) through
direct disgorgement to plaintiffs of Sequoia’s improper
profits, using an equitable remedy such as a constructive
trust; or (2) by forcing Sequoia to reimburse the RingCentral
plan. In this latter circumstance, plaintiffs claim that the
RingCentral plan would then likely refund the plaintiffs that
portion of their contributions attributable to Sequoia’s
alleged misconduct.
    The district court again dismissed for lack of standing,
this time without leave to amend. The court found that
plaintiffs had still provided “no allegations that support an
inference that had Defendants not charged commissions to
the insurers, or had they charged a lower commission,
Plaintiffs would have contributed less toward their health
benefits.” And the court held that plaintiffs’ theory of injury
based on an equitable ownership interest in the program’s
assets was foreclosed by Thole v. U.S. Bank N.A., 140 S. Ct.
1615, 1619 (2020). Plaintiffs thus had not established an
injury in fact. And even if they had, plaintiffs had not shown
that any injury they suffered would be redressed by a
favorable decision.
    Plaintiffs timely appealed. We review de novo the
district court’s dismissal of plaintiffs’ complaint for lack of
standing. Meland v. Weber, 2 F.4th 838, 843 (9th Cir. 2021).
And we construe all material factual allegations in the
complaint in plaintiffs’ favor. Id.
10             WINSOR V. SEQUOIA BENEFITS & INS.

                                II
    Plaintiffs bear the burden of establishing each of the
three “irreducible” elements of Article III standing. Lujan v.
Defs. of Wildlife, 504 U.S. 555, 560 (1992); Meland, 2 F.4th
at 843 (quotation omitted). They must sufficiently allege “(i)
that [they] suffered an injury in fact that is concrete,
particularized, and actual or imminent; (ii) that the injury
was likely caused by the defendant; and (iii) that the injury
would likely be redressed by judicial relief.” TransUnion
LLC v. Ramirez, 141 S. Ct. 2190, 2203 (2021) (citing Lujan,
504 U.S. at 560–61). At the pleading stage, plaintiffs must
“‘clearly . . . allege facts demonstrating’ each element.”
Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016) (alteration
in original) (quoting Warth v. Seldin, 422 U.S. 490, 518
(1975)). This case is a putative class action, but “even
named plaintiffs who represent a class ‘must allege and show
that they personally have been injured.’” Id. at 338 n.6
(quoting Simon v. Eastern Ky. Welfare Rights Org., 426 U.S.
26, 40 n.20 (1976)).
    In many ERISA cases, the plaintiffs are suing the ERISA
plan itself or their employer, parties who have a direct role
in designing and administering the plan. This case is less
typical because the plaintiffs are leapfrogging the
RingCentral plan and seeking to recover directly from
Sequoia, a management and insurance brokerage company
that is a step removed from the contributions plaintiffs pay
and the benefits they receive. As we will explain, this
structural feature of this case contributes to plaintiffs’ failure
to sufficiently allege Article III standing.
                               A
    We begin with the plaintiffs’ first theory of injury, which
is that Sequoia’s actions allegedly caused plaintiffs to pay
               WINSOR V. SEQUOIA BENEFITS & INS.            11

higher contributions for their insurance, and that eliminating
Sequoia’s commissions and reducing administrative fees
would therefore have lowered plaintiffs’ payments. This
theory applied to the allegations in the complaint fails to
satisfy the requirements for Article III standing.
    “To establish injury in fact, a plaintiff must show that he
or she suffered ‘an invasion of a legally protected interest’
that is ‘concrete and particularized’ and ‘actual or imminent,
not conjectural or hypothetical.’” Spokeo, 578 U.S. at 339
(quoting Lujan, 504 U.S. at 560). A “concrete” injury “must
actually exist,” and must be “real, and not abstract.” Id. at
340 (quotations omitted).
    Even assuming plaintiffs’ factual allegations are true,
plaintiffs have not “clearly . . . allege[d] facts
demonstrating” a concrete injury. Id. at 338 (ellipsis in
original) (quotation omitted). Plaintiffs’ out-of-pocket-
injury theory boils down to the following thesis: (1) Sequoia
failed adequately to negotiate administrative fees and
accepted improper commissions; (2) the RingCentral plan
therefore had to pay higher total premiums than it would
have absent the alleged misconduct; (3) and plaintiffs thus
paid higher contributions, and would have paid lower
contributions if Sequoia’s allegedly wrongful conduct had
never occurred.
    The problem with plaintiffs’ theory is that plaintiffs have
not pleaded facts tending to show that Sequoia’s alleged
breach of fiduciary duty led to plaintiffs paying higher
contributions. It is RingCentral, and not Sequoia, that sets
plaintiffs’ contribution amounts. It is likewise RingCentral
that decides which coverage options to make available to its
employees through the RingCentral plan. Plaintiffs have not
alleged that RingCentral has changed or would change
12            WINSOR V. SEQUOIA BENEFITS & INS.

employee contribution rates based on Sequoia’s alleged
breaches of fiduciary duty, or that employee contribution
rates are tied to overall premiums. Indeed, amicus the U.S.
Department of Labor—which supports plaintiffs (though
more heavily on their second theory of injury)—candidly
acknowledges that “Plaintiffs do not expressly allege that
they would pay lower contributions in the future if
Defendants’ commissions were eliminated.”
    Lacking express factual allegations, plaintiffs urge us to
infer this key premise. But several of plaintiffs’ allegations
directly undermine their argument. Plaintiffs in their
complaint allege that, under the RingCentral plan and Tech
Benefits Program, RingCentral alone determined the share
of employee contributions—if it required any contributions
in the first place.        In making such determinations,
RingCentral had broad discretion, restrained only by a clause
in the Tech Benefits Program agreement which required
RingCentral to contribute at least 75% of the cost for
employees who selected single insurance coverage or 50%
of the cost for family coverage. During the relevant period,
RingCentral also offered employees benefit options that
required no employee contribution at all. Perhaps most
significantly, plaintiffs allege in their complaint that when
they asked RingCentral how employee contributions were
determined, RingCentral “did not identify a specific formula
or set of factors.” Instead, RingCentral merely “cited
‘various factors and discussion.’”          These allegations
underscore the role that RingCentral played in setting
employee contributions and highlight plaintiffs’ failure to
plead facts indicating that RingCentral set those
contributions based on overall premium costs.
    Plaintiffs draw our attention to other allegations, which
they claim support the inference they wish us to draw.
               WINSOR V. SEQUOIA BENEFITS & INS.             13

Plaintiffs allege that RingCentral “contributes 80–90% of
the cost for employee medical benefits.” Plaintiffs further
allege that Sequoia “advise[s] employers that a ‘common
strateg[y]’ for determining the employee contribution is to
require [employers] to pay 90% of the required contribution
for [individual] coverage and 75% for family members.”
And plaintiffs allege that when the total insurance premium
for one participant’s vision plan decreased in 2019, her
contribution decreased in a roughly proportionate manner,
remaining at about 5% of the total premium.
    But these allegations are general in nature and do not
solve the variable of RingCentral’s discretion in setting
employee contribution rates. And even if these particular
allegations are broadly consistent with plaintiffs’ theory,
“[w]here a complaint pleads facts that are merely consistent
with a defendant’s liability, it stops short of the line between
possibility and plausibility of entitlement to relief.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quotations omitted).
Given RingCentral’s discretion in setting employee
contributions, and the fact that, as alleged, RingCentral
determined those contributions based not on a “specific
formula or set of factors,” but on “various factors and
discussion”—which in some instances resulted in employees
paying nothing—we lack a sufficient basis to draw the
inference that plaintiffs seek. The facts as pleaded are thus
insufficient to support plaintiffs’ assertion that “employee
contributions are calculated as a pro rata share of the total
benefits cost.” See Iqbal, 556 U.S. at 681 (“[T]he allegations
are conclusory and not entitled to be assumed true.”).
Plaintiffs’ allegations do not demonstrate that they paid
higher contributions because of Sequoia’s allegedly
wrongful conduct.
14             WINSOR V. SEQUOIA BENEFITS & INS.

    This deficiency in plaintiffs’ allegations can also be
understood as a failure to plead causation, the second
element of Article III standing. To establish causation,
plaintiffs must allege that their injuries are “fairly traceable”
to Sequoia’s conduct and “not the result of the independent
action of some third party not before the court.” Namisnak
v. Uber Techs., Inc., 971 F.3d 1088, 1094 (9th Cir. 2020)
(quoting Lujan, 504 U.S. at 560). Plaintiffs must thus allege
a “substantial probability” that Sequoia caused the harm they
claim to have suffered. City of Oakland v. Oakland Raiders,
20 F.4th 441, 452–53 (9th Cir. 2021) (quotation omitted).
Plaintiffs have not done so.
    Even assuming Sequoia’s alleged breach of fiduciary
duty resulted in higher total insurance costs for the
RingCentral plan (and that any increased costs were not
caused by other factors), plaintiffs’ chain of causation again
encounters the same issue: RingCentral’s discretion in
setting employee contributions, and the lack of factual
allegations tying RingCentral’s employee contribution
amounts to overall premium rates. Indeed, as discussed
above, the few facts plaintiffs have alleged on this score
contradict that inference. RingCentral’s lack of set formula
and its weighing of “various factors and discussion” in
setting employee contributions cannot be squared with
plaintiffs’ mechanistic assertion that RingCentral sets
contribution rates based on Sequoia’s premium rates.
RingCentral was always free to change the employee
contribution rates (subject to the minimum limitations of the
Tech Benefits Program); reducing Sequoia’s commissions
would not require RingCentral to change its plan design, and
plaintiffs do not plead facts suggesting RingCentral would
do so. Plaintiffs have not sufficiently alleged that any out-
               WINSOR V. SEQUOIA BENEFITS & INS.                15

of-pocket financial injuries would be fairly traceable to
Sequoia’s alleged breach of fiduciary duty.
    Finally, plaintiffs fail to plead redressability for their out-
of-pocket-injury theory.          To establish redressability,
plaintiffs must allege that it is “likely, as opposed to merely
speculative,” that a favorable decision will redress their
injuries. Skyline Wesleyan Church v. Cal. Dep’t of Managed
Health Care, 968 F.3d 738, 749 (9th Cir. 2020) (quoting
Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC),
Inc., 528 U.S. 167, 181 (2000)); see also TransUnion, 141
S. Ct. at 2203. Plaintiffs argue that their injuries may be
redressed in two ways: (1) by imposing “a constructive trust
on [Sequoia’s] ill-gotten profits for the purpose of
distributing those funds to Plaintiffs”; and (2) by returning
money to the RingCentral plan, which would in turn,
plaintiffs maintain, apportion the recovery to the plan
participants. Both theories are deficient as pleaded.
    Plaintiffs’ theory that they could personally recover
funds directly from Sequoia lacks sufficient supporting
allegations for much the same reason we have already
explained. We will assume that, in this context, ERISA
permits this form of constructive-trust relief (as opposed to
recovery by the plan only). Even so, plaintiffs do not explain
how a court could place Sequoia’s “ill-gotten profits”
directly into plaintiffs’ pockets when plaintiffs have not
alleged how a court could identify the discrete “profits”
supposedly owed to them, given RingCentral’s discretion in
setting employee contribution amounts and the manner in
which RingCentral exercised this discretion. Tellingly, the
16               WINSOR V. SEQUOIA BENEFITS & INS.

Department of Labor devotes almost no attention to this
point, either. 1
    Plaintiffs’ second redressability theory—that awarding
damages to the RingCentral plan would redress their
injury—is more practicable, but it is foreclosed by our
decision in Glanton ex rel. ALCOA Prescription Drug
Plan v. AdvancePCS Inc., 465 F.3d 1123, 1125 (9th Cir.
2006). In Glanton, the plaintiffs claimed that a plan
fiduciary charged their employers’ health plans too much for
prescription drugs, which allegedly required the plans to
demand higher co-payments and contributions from
participants. Id. Part of the Glanton plaintiffs’ theory of
redressability was that awarding damages to their
employers’ plans would redress their injuries. Id. But we
held that the plaintiffs failed to plead redressability,
explaining that “any one-time award to the plans for past
overpayments [would not] inure to the benefit of
participants.” Id. This was so because the employers
“would be free to reduce their contributions or cease funding
the plans altogether until any such funds were exhausted.”

1
  Our decision in Amalgamated Clothing & Textile Workers Union, AFL-
CIO v. Murdock, 861 F.2d 1406 (9th Cir. 1988), on which plaintiffs rely,
does not change matters. Evaluating very different facts than those
before us, that case considered whether a constructive trust was
allowable under ERISA in the situation in which recovery to the plan
would be effectively pointless because, based on the machinations of the
fiduciary, the recovery would simply be re-routed to the wrongdoer
fiduciary itself. Id. at 1412. There are no analogous allegations here. In
any event, Murdock presented a question of statutory standing—whether
the plaintiffs had a recognized remedial right under ERISA. It did not
concern redressability under Article III. See Glanton ex rel. ALCOA
Prescription Drug Plan v. AdvancePCS Inc., 465 F.3d 1123, 1126 n.4
(9th Cir. 2006) (explaining that in Murdock “[t]he question was not
standing, but whether ERISA authorized a remedy”).
               WINSOR V. SEQUOIA BENEFITS & INS.             17

Id. We therefore held that “[t]here is no redressability, and
thus no standing, where (as is the case here) any prospective
benefits depend on an independent actor who retains broad
and legitimate discretion the courts cannot presume either to
control or to predict.” Id. (quotations omitted). That same
logic governs here.
    Plaintiffs contend that Glanton is factually
distinguishable on the theory that there, the plaintiffs did not
make contributions to their plan and thus did not contribute
to the disputed amounts that the plan had paid. But that is
not what Glanton says. Glanton repeatedly referenced the
fact that plaintiffs were alleging that defendants had “caused
the plans to demand higher co-payments and contributions
from participants.” Id. (emphasis added); see also id.
(“Plaintiffs claim that, if their suit is successful, the plans’
drug costs will decrease, and that the plans might then reduce
contributions or co-payments.”); Appellant’s Br., Glanton v.
AdvancePCS Health, L.P., No. 04-15328, 2004 WL
1533744, at *25–26 (9th Cir. June 2, 2004) (“The more the
Plan needs to be funded, the greater the direct employee
contributions, whether in the form of co-payments, co-
insurance, deductibles, or in the form of monthly
contributions to the Plan.” (emphasis added)).
     As Glanton held, if RingCentral were to receive
Sequoia’s “ill-gotten” gains, RingCentral would “be free to
reduce [its] contributions or cease funding the plan[]
altogether until any such funds were exhausted.” Id. By
using the funds to pay for plaintiffs’ health insurance,
RingCentral would still be using them for plaintiffs’ benefit.
Glanton indicates that this would remain true even if
RingCentral used the recovered funds to offset its own
contributions while making no reduction to the contributions
it required from plaintiffs. See id. There is thus no basis for
18             WINSOR V. SEQUOIA BENEFITS & INS.

plaintiffs’ assertion that, if the RingCentral plan received
money from Sequoia, the plan would “likely” remit that
money to plaintiffs. Plaintiffs have identified nothing in the
plan documents or in law that would require this or make it
probable.
     Plaintiffs rely instead on Department of Labor guidance
that supposedly recommends such offsetting. See U.S. Dep’t
of Labor, Emp. Benefits Sec. Admin., Technical Release No.
2011-04, at 1–2 (Dec. 2, 2011). But, as the Department of
Labor acknowledges, “the Technical Release is guidance for
group health plans rebates pursuant to the Medical Loss
Ratio Requirements of the Public Health Service Act.” The
Technical Release thus does not govern here. Neither
plaintiffs nor the Department of Labor cite any authority, or
anything in the governing plan documents, suggesting that
RingCentral would violate its fiduciary duties under ERISA
if it did not pass along to plaintiffs any money recovered
from Sequoia.
    For these reasons, plaintiffs’ out-of-pocket-injury theory
fails on each requirement of the Article III standing calculus.
                               B
    Plaintiffs’ second theory of injury is that they retained an
“equitable” ownership interest in the Tech Benefits
Program’s trust fund. They rely on a series of cases and
secondary sources for the proposition that “the harm of a
trustee engaging in self-dealing with trust assets traditionally
provide[s] a basis for a lawsuit on the part of the trust’s
beneficiaries.” Plaintiffs contend that their equitable interest
as beneficiaries of the Tech Benefits Program trust provides
them standing to pursue relief such as surcharge or
disgorgement, even if they suffered no tangible out-of-
pocket loss.
               WINSOR V. SEQUOIA BENEFITS & INS.              19

    This theory of standing runs aground under Thole v. U.S.
Bank N.A., 140 S. Ct. 1615 (2020). In Thole, the Supreme
Court held that participants in a defined-benefit pension plan
lacked standing to bring an ERISA claim alleging that the
plan’s fiduciaries had violated their duties of loyalty and
prudence by poorly investing the plan’s assets. Id. at 1618–
19. Under the defined-benefit plan at issue in Thole, the plan
participants received a fixed monthly payment, which did
not fluctuate based on the value of the plan. Id. at 1618. The
plaintiffs had therefore suffered no monetary injury because
they had received all the monthly payments they were owed,
and they were legally entitled to receive those same
payments for the rest of their lives. Id. at 1622.
    To get around this, the plaintiffs in Thole had pointed to
trust law principles and contended that “an ERISA defined-
benefit plan participant possesses an equitable or property
interest in the plan.” Id. at 1619. They asserted that “a plan
fiduciary’s breach of a trust-law duty of prudence or duty of
loyalty itself harms ERISA defined-benefit plan participants,
even if the participants themselves have not suffered (and
will not suffer) any monetary losses.” Id. at 1619. But the
Supreme Court rejected this theory of standing, explaining
that “plan participants possess no equitable or property
interest in the plan.” Id. at 1620 (first citing Hughes Aircraft
Co. v. Jacobson, 525 U.S. 432, 439–41 (1999); and then
citing LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S.
248, 254–56 (2008)).
    Just like the plaintiffs here, the Thole plaintiffs had
supported their theory of standing with an analogy to trust
law. But the Supreme Court was not persuaded. The Court
in Thole explained that the “basic flaw in the plaintiffs’ trust-
based theory of standing [was] that the participants in a
defined-benefit plan are not similarly situated to the
20             WINSOR V. SEQUOIA BENEFITS & INS.

beneficiaries of a private trust or to the participants in a
defined-contribution plan,” such as a 401(k). Id. at 1619.
“In the private trust context, the value of the trust property
and the ultimate amount of money received by the
beneficiaries will typically depend on how well the trust is
managed, so every penny of gain or loss is at the
beneficiaries’ risk.” Id. But in a defined-benefit plan, which
“is more in the nature of a contract,” the participants’
benefits “will not change, regardless of how well or poorly
the plan is managed.” Id. at 1620. Moreover, the employer
gets to keep any surplus and must make up for any shortfall.
Id. The plaintiffs’ trust law analogy therefore “d[id] not fit
th[at] case and d[id] not support Article III standing for
plaintiffs who allege mismanagement of a defined-benefit
plan.” Id.
    Here, plaintiffs have not established that they have some
equitable interest in plan funds that the Thole plaintiffs
lacked, or that the comparison to trust law can have purchase
here when it did not in Thole. Although the Tech Benefits
Program is not a defined-benefit pension plan, it similarly
provides a fixed set of benefits as promised in plan
documents. Like the plan in Thole, the Tech Benefits
Program differs from a private trust. The program is a large
pool of money that is not divided into individual accounts.
Plaintiffs do not own beneficial interests that increase or
decrease depending on the management of trust assets. Once
employer plans have paid into the program, the program
provides a set level of agreed-upon benefits. See Smith v.
Med. Benefit Adm’rs Grp., Inc., 639 F.3d 277, 283 (7th Cir.
2011) (describing a group health insurance plan as “the kind
of defined benefit plan . . . which typically holds no assets in
trust for any individual participant”). Unlike private trust
beneficiaries, plaintiffs have not alleged that they are entitled
                 WINSOR V. SEQUOIA BENEFITS & INS.                   21

to receive the funds held by the program. Instead, plaintiffs
were contractually entitled to the insurance benefits that
Sequoia agreed to purchase for them with the program’s
funds—benefits that plaintiffs have received. 2
    Plaintiffs’ attempts to avoid the import of Thole are
unpersuasive. Plaintiffs (but not the Department of Labor)
rely on the Fourth Circuit’s decision in Peters v. Aetna, Inc.,
2 F.4th 199 (4th Cir. 2021), to support their theory of injury
premised on a purported equitable interest in the Tech
Benefits Program funds. Peters considered the Article III
standing of ERISA plan participants based in part on the
participants’ alleged equitable interest in their plans. Yet
even though Thole was decided a year before Peters—and
was flagged for the Peters court in supplemental authority
letters while Peters was still pending—the Fourth Circuit in
Peters did not address Thole. See Peters, 2 F.4th at 217–21.
Peters also independently found Article III standing based
on the plaintiffs’ “financial” injury, Id. at 218–19, and
plaintiffs here have not explained how that fact-specific
holding is relevant to this case.
    Plaintiffs also attempt to distinguish Thole on the facts,
arguing that they have a concrete interest because Sequoia’s
alleged mismanagement increased their insurance costs. But
in so arguing, plaintiffs effectively revert to their out-of-
pocket-injury theory, which we have already held is
insufficiently pleaded. In short, here, as in Thole, plaintiffs

2
  The record does not support plaintiffs’ assertions that Sequoia
“diverted” assets from plan funds. Sequoia’s commissions were not
taken from the program’s assets but were instead separately paid by
insurance companies after Sequoia used the program’s assets to purchase
insurance. There is no well-pleaded allegation that Sequoia has pocketed
assets directly out of the trust.
22             WINSOR V. SEQUOIA BENEFITS & INS.

argue that they had an equitable interest in funds used for
ERISA benefits. Here, as in Thole, plaintiffs argue that
defendants breached their fiduciary duties of prudence and
loyalty with respect to those funds. And here, as in Thole,
plaintiffs have not alleged how this claimed breach
concretely affected them.
                      *       *       *
    We hold that plaintiffs have failed to plead the
requirements for Article III standing. Like the district court,
we therefore do not reach Sequoia’s argument that it is not
an ERISA fiduciary.
     AFFIRMED.