GEOFFREY MOYLE, an individual, on behalf of themselves; PAULINE ARWOOD, an individual, on behalf of themselves; THOMAS ROLLASON, an individual, on behalf of themselves; JEANNIE SANDERS, an individual, on behalf of themselves, Plaintiffs-Appellants/Cross-Appellees,
LIBERTY MUTUAL RETIREMENT BENEFIT PLAN; LIBERTY MUTUAL RETIREMENT PLAN RETIREMENT BOARD; LIBERTY MUTUAL INSURANCE COMPANY, a Massachusetts company; LIBERTY MUTUAL INSURANCE GROUP INC., a Massachusetts company, Defendants-Appellees/Cross-Appellants
and Submitted, Pasadena, California October 19, 2015.
from the United States District Court for the Southern
District of California. D.C. No. 3:10-cv-02179-GPC-MDD.
Gonzalo P. Curiel, District Judge, Presiding.
Retirement Income Security Act
panel affirmed in part and reversed in part the district
court's summary judgment in favor of the defendants in a
class action under the Employee Retirement Income Security
alleged that their new employer, which purchased their former
employer, told them that they would receive past service
credit, under the new employer's retirement plan, for the
time they worked with the former employer.
panel affirmed the district court's summary judgment on a
claim for benefits under 29 U.S.C. § 1132(a)(1)(B). The
panel held that the district court applied the correct abuse
of discretion standard of review, and the plaintiffs were not
entitled to past service credit under the plain terms of the
panel reversed the district court's summary judgment on
plaintiffs' claim for equitable relief under §
1132(a)(3). Agreeing with the Eighth Circuit, the panel held
that the plaintiffs were not barred from bringing
simultaneous claims under § 1132(a)(1)(B) and §
1132(a)(3). Courts have interpreted Varity Corp. v.
Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130
(1996), to mean that equitable relief under § 1132(a)(3)
is not available if § 1132(a)(1)(B) provides an adequate
remedy. But under CIGNA Corp. v. Amara, 563 U.S.
421, 131 S.Ct. 1866, 179 L.Ed.2d 843 (2011), §
1132(a)(3) authorizes equitable relief in the form of plan
reformation, even if plaintiffs also claim relief under
§ 1132(a)(1)(B). The panel concluded that in light of
Amara, prior Ninth Circuit case law to the contrary
was no longer binding. The panel remanded for determinations
of fact and equitable relief in the form of reformation and
panel affirmed the district court's summary judgment on a
claim that the new employer breached its fiduciary duty to
disclose information about past service retirement credit in
its Summary Plan Description. The panel held that the
plaintiffs did not prove harm or detrimental reliance.
defendants' cross-appeal, the panel held that class
certification was proper.
Butler (argued) and Michael Olinik, The Butler Firm, San
Diego, California; Jack Winters Jr., Winters & Associates,
San Diego, California; Craig Nicholas and Alex Tomasevic,
Nicholas & Tomasevic, LLP, San Diego, California, for
Abel (argued), Jackson Lewis P.C., Greenville, South
Carolina, for Defendants-Appellees/Cross-Appellants.
Harry Pregerson and Consuelo M. Callahan, Circuit Judges and
Stanley Allen Bastian,[*] District Judge.
Pregerson, Circuit Judge:
are former employees of Old Golden Eagle Insurance Company
(" Golden Eagle" ). Golden Eagle did not offer a
retirement plan to its employees. When Liberty Mutual
Insurance Company (" Liberty Mutual" ) purchased
Golden Eagle through a conservatorship sale, Appellants
became employees of Liberty Mutual. Appellants state that
while the sale was underway, Liberty Mutual told Appellants
that they would receive past service credit for the time they
worked with Golden Eagle under Liberty Mutual's
retirement plan. But, after Liberty Mutual purchased Golden
Eagle, Liberty Mutual denied Appellants' claims for past
service credit. Liberty Mutual argues that it never made any
representation to Appellants that they would receive past
service credit for their time with Golden Eagle. Liberty
Mutual also argues that under the terms of the retirement
plan, Appellants are entitled only to past service credit for
purposes of eligibility, vesting, early retirement, and
spousal benefits, and not for retirement benefits accrual.
filed this class action against Liberty Mutual for violating
the Employee Retirement Income Security Act ("
ERISA" ). At the district court, Appellants asserted
four claims for relief: (1) Appellants are entitled to past
service credit under the terms of the retirement plan, under
29 U.S.C. § 1132(a)(1)(B); (2) Appellants are entitled
to equitable relief under 29 U.S.C. § 1132(a)(3); (3)
Liberty Mutual violated its duty to provide Appellants with
documents relevant to their claim; and (4) Liberty Mutual
violated its duty to disclose information about past service
retirement credit in its Summary Plan Descriptions.
Appellants seek the equitable remedies of reformation and
surcharge for both claims (2) and (4).
district court granted summary judgment in favor of Liberty
Mutual on all four claims. Appellants appealed on claims (1),
(2), and (4). Liberty Mutual cross-appealed, alleging that
Appellants' suit is time-barred and that class
certification was improper.
reverse the district court's ruling as to claim (2).
Appellants can seek equitable relief under 29 U.S.C. §
1132(a)(3). We affirm the district court's ruling as to
claims (1) and (4): Appellants are not entitled to past
service credit under the plain terms of the retirement plan,
and Appellants did not rely to their detriment on Liberty
Mutual's failure to disclose information about past
service credit in its Summary Plan Descriptions. We also find
that the suit is not time-barred and that class certification
Liberty Mutual's Bid for Golden Eagle
January 31, 1997, the California Department of Insurance
placed Golden Eagle into conservatorship with the San Diego
Superior Court. Seeing an opportunity to expand its insurance
business, Liberty Mutual took an immediate interest in
acquiring Golden Eagle, who had a large worker's
many Golden Eagle employees--worried that their jobs were in
jeopardy--began to look for different employment
opportunities. From January 1997 to the summer of that year,
nearly fifty percent of Golden Eagle employees left the
company, and their departure had already cost Golden Eagle
about a half million dollars.
April 1997, Liberty Mutual was in a bidding war with American
International Group, Inc. (" AIG" ) for the
acquisition of Golden Eagle. To win the bidding war, Liberty
Mutual needed to not only match AIG's bid, it also needed
to add enhancements to secure the Conservation Court's
approval. On April 6, 1997, Liberty Mutual submitted its
enhanced bid, which included improved employee benefits such
as a retirement plan, a benefit not offered by Golden Eagle.
Including improved employee benefits for Golden Eagle's
former employees served to benefit Liberty Mutual in two
ways: by retaining Golden Eagle's employees, and by
increasing the likelihood that the court would approve
Liberty Mutual's bid.
the bid was going on, several Golden Eagle employees
approached George Kaerth, Senior Vice President of
Underwriting at Golden Eagle, and asked him if they would get
past service credit for their time with Golden Eagle under
Liberty Mutual's retirement benefits program. Kaerth, in
turn, had about twenty conversations with David Long from
Liberty Mutual, and about ten to twelve conversations with
Tim Sweeney, also from Liberty Mutual, about the Liberty
Mutual benefits package for Appellants. Kaerth repeatedly
told Long and Sweeney that the Golden Eagle employees were
confused about past service credit. Kaerth asked Long and
Sweeney pointedly whether or not service with Golden Eagle
would count under the Liberty Mutual benefits program, and,
every time, Long and Sweeney separately responded that this
issue was still under negotiation.
29, 1997, the Conservation Court held an evidentiary hearing
to evaluate Liberty Mutual's and AIG's competing
bids. Among the exhibits that Liberty Mutual submitted to the
court, one exhibit expressly stated that the value that
Liberty Mutual added was to " increase employee benefits
(credit for prior year's of service and participation in
the benefits plan)." Liberty Mutual also told the
Conservation Court that Golden Eagle employees would have the
rights that Liberty Mutual employees had with " X years
of service." This representation was later repeatedly
made to Golden Eagle employees.
Mutual's representations at the May 29 hearing were
shared with Golden Eagle employees. At the time of the
hearing, Golden Eagle employees preferred Liberty
Mutual's proposal because it was perceived that Liberty
Mutual would treat its employees better than AIG. On May 30,
1997, the Conservation Court approved Liberty Mutual's
Golden Eagle Transitions to Liberty Mutual
the approval of Liberty Mutual's bid, Liberty Mutual
drafted a Rehabilitation Agreement, which was meant to settle
any outstanding claims with policyholders, creditors, and
shareholders of Golden Eagle. Notably, Article 5 of the
Rehabilitation Agreement states that Golden Eagle
employees' past service credit would count for the
purposes of eligibility, vesting, and early retirement
subsidies under Liberty Mutual's retirement benefit plan,
but past service credit would not be credited for the purpose
of benefits accrual. The Rehabilitation Agreement is the only
document that explicitly states that past service credit with
Golden Eagle would not count for benefits accrual, and this
language does not appear anywhere else during the time of
transition or in any of the communications with Golden Eagle
Sayles, Liberty Mutual's Senior Vice President of Human
Resources and Administration, oversaw the development of
Article 5 as well as all Summary Plan Descriptions ("
SPD" ). Sayles testified that it was "
important to be explicit at each agreement, including this
one, what people got and what people didn't get."
Conservator in charge of the transition of Golden Eagle to
Liberty Mutual was not required to send notification of the
Rehabilitation Agreement to Golden Eagle employees. Liberty
Mutual never provided a copy of the Rehabilitation Agreement
to Golden Eagle employees.
August 1997, Liberty Mutual hosted a series of benefits
enrollment meetings so that Golden Eagle employees could
discuss and obtain information about the transition to
Liberty Mutual. Liberty Mutual developed a uniform "
Facilitator Guide" that presenters used as a script at
these meetings to convey information about the terms and
conditions of employee benefits, including retirement
benefits. There was no mention in the Facilitator Guide that
past service credit with Golden Eagle would not be credited
for benefit accrual, or that benefit accrual would begin on
the plan entry date of October 1, 1997.
the enrollment meetings, Liberty Mutual failed to indicate
that there were any limitations to the treatment of past
service credit. Paula Tonsky, who organized new hire
orientations, testified that her understanding from attending
some of these meetings was that " previous years with
Golden Eagle would count towards . . . service with Liberty
Eagle employees Geoffrey Moyle, Pauline Arwood, Thomas
Rollason, and Jeannie Sanders also testified that this was
their understanding after attending the meetings, as well as
the understanding of other Golden Eagle employees. When asked
if his understanding was that he would get past service
credit for his time with Golden Eagle for all purposes under
the Liberty Mutual retirement plan, Moyle stated, " I
know that was my understanding, because everybody was quite
happy after the meeting, that [sic] what they were going to
receive." Similarly, Sanders testified, " [B]ecause
of the meeting . . . we all were told that our years of
service with Golden Eagle would be counted towards our
retirement benefit, meaning that our check we would receive,
the money, the years we worked for Golden Eagle, would be
calculated for that."
testified that the question of past service credit was asked
at least three times during one meeting. She then stated,
" [W]e specifically asked and were told that our prior
years with Golden Eagle would apply to our retirement plan,
which we were all very excited about, because some of us were
getting ready to retire in a few years . . . I mean,
everybody was there. Basically, . . . that was the impression
we were given. That is why everybody stayed with the
testified that Mike Plavnicky from Liberty Mutual told Golden
Eagle employees during an enrollment meeting that "
[y]ou accrue, this, that." Rollason went on to state,
" Plavnicky came out and said, yes, you will get
pension, pension for your Golden Eagle time through Liberty
Mutual. He said it point blank range." Rollason
testified that he was looking for another job at that time:
" [T]hen they said that we would get ...