AmerisourceBergen Corp. v. Roden

495 F.3d 1143, 41 Employee Benefits Cas. (BNA) 1706, 26 I.E.R. Cas. (BNA) 752, 2007 U.S. App. LEXIS 19179, 2007 WL 2296775
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 13, 2007
Docket05-55349
StatusPublished
Cited by141 cases

This text of 495 F.3d 1143 (AmerisourceBergen Corp. v. Roden) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AmerisourceBergen Corp. v. Roden, 495 F.3d 1143, 41 Employee Benefits Cas. (BNA) 1706, 26 I.E.R. Cas. (BNA) 752, 2007 U.S. App. LEXIS 19179, 2007 WL 2296775 (9th Cir. 2007).

Opinions

Opinion by Judge HAWKINS; Concurrence by Judge FERGUSON.

MICHAEL DALY HAWKINS, Circuit Judge:

We explore once again the sometimes complex relationship between state and federal civil proceedings when parties in the midst of litigation on one side of the divide file factually related proceedings on the other. Understandably concerned with judicial economy and respect for ongoing state proceedings, the district court dismissed the federal suit under the Younger abstention doctrine. Determining that abstention was not required, we return the [1145]*1145matter to district court to allow appellant’s diversity action to proceed.

FACTS AND PROCEDURAL HISTORY

In 1995, Donald R. Roden (“Roden”) was hired as President and Chief Operating Officer of Bergen Brunswig Corporation (“BBC”), the predecessor company to Am-erisourceBergen Corporation (“ABC”). At this time, Roden and BBC entered into an employment agreement (the “Agreement”) providing that Roden would have his employment with BBC consistently extended monthly on a rolling three-year basis1 and would not be fired except for “cause,” as defined in the Agreement. Additionally, the Agreement provided that Roden was entitled to participate in BBC’s ERISA-governed 2 Supplemental Executive Retirement Plan (the “SERP”), as well as its interest-free loan program (the “Loan Program”).

Four years after he was hired and two years after being promoted to Chief Executive Officer (“CEO”), Roden was given written notice of BBC’s intention to terminate his employment for a reason that apparently did not qualify as “cause” under the Agreement and on terms that may have conflicted with those provided for in the Agreement. Roden thereafter filed a complaint against BBC in the Superior Court in Orange County, California (the “California Superior Court”) claiming that BBC breached the Agreement and that Roden was therefore entitled to his full salary for three years past his termination date and was, in all other respects, entitled to be treated as BBC’s CEO until that date.3

Specifically, Roden claimed that he was entitled to “estimated future benefits under the SERP ... of no less than $8,970,000” and a due date (and interest-accrual start-date) based on a November 30, 2002 termination date for the $337,500 loan he took out under the Loan Program.4

Shortly thereafter, Roden and BBC entered into a Settlement Agreement, and a judgment incorporating its terms was entered on July 27, 2000 (“the Judgment”), as follows:

1. In favor of [Roden] in the amount of $5,000,000, less legally required deductions;
2. Continuation of the benefits provided in Sections 5(d) [which includes participation in the SERP], (e) and (i) [which includes participation in the Loan Program] of [Roden’s] employment contract; and
3. Reasonable attorney’s fees and costs in an amount to be determined by the Court.

Believing BBC had not fully complied with this Judgment, Roden sought to force compliance in California Superior Court. After briefing and argument, that court ordered implementation of the Judgment (“First Order”) finding, in relevant part, that Roden’s entitlement to benefits under the SERP had “vested” and that “Roden’s $337,500 loan was not absolved by the Judgment” but would not become due until November 30, 2002. The First Order continued (emphasis added):

[1146]*1146[BBC] is required to accord Roden the same treatment as the other senior officers of [BBC] who received loans from this November 1998 loan program ... with respect to ... any forgiveness, extensions, payment of interest and the like.

BBC appealed the First Order to the California Court of Appeal, which unanimously affirmed. 107 Cal.App.4th 620, 132 Cal.Rptr.2d 549 (2003).

When Roden attempted to enforce the First Order and collect his SERP benefits, BBC opposed his request, claiming that Roden was entitled to a lesser sum under the SERP plan than he had alleged. Ro-den appealed this determination pursuant to company policy, and the final administrative review of the matter yielded a decision that Roden was entitled to $1,898,066 in SERP benefits. Apparently with an aim of pursuing his rights under ERISA— which allows an ERISA plan beneficiary to pursue court action if he is dissatisfied with an administrative determination of his ERISA benefits, 29 U.S.C. §§ 1132(a), 1133 — Roden requested discovery from ABC (which, by this point, had stepped into BBC’s shoes) regarding the amount of benefits he was entitled to receive under the SERP.

At this point, ABC sought to remove Roden v. BBC from the California courts to federal court claiming that Roden’s discovery request had “transformed” the case into an ERISA action, which is removable to federal court at the defendant’s request. See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). The district court rejected this argument and remanded the case back to the California courts.5

Undeterred, ABC filed its own action in federal district court, requesting both a judgment that Roden breached his contract with ABC by failing to repay his $337,500 loan (“Count I”), as well as a declaration of ABC’s duties and obligations to Roden under the SERP — namely, for a proper calculation of Roden’s SERP benefits (“Count II”). The district court dismissed ABC’s two claims,6 relying on the basic premise that resolving ABC’s claims at the federal level would interfere with ongoing state court proceedings regarding almost-entirely overlapping issues.7 ABC appealed to this court, arguing that the district court erred in dismissing its claims.

Shortly before oral argument took place in this case, the California Superior Court entered a second order implementing the Judgment (“Second Order”). The Second Order declared that Roden was entitled to $14,432,141.74 in SERP benefits but was not entitled to any forgiveness of the loans [1147]*1147he had taken from ABC under the Loan Program. Both parties have appealed the Second Order to the California Court of Appeal.

In light of these recent developments— which ABC agrees will squarely resolve the issue of Roden’s entitlement under the SERP—ABC concedes that the district court was within its discretion to decline to entertain Count II. See 28 U.S.C. § 2201 (“In a case of actual controversy within its jurisdiction, ... any court of the United States ... may declare the rights and other legal relations of any interested par-ty_” (emphasis added)); Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir.1998) (en banc) (“If there are parallel state proceedings involving the same issues and parties pending at the time the federal declaratory action is filed, there is a presumption that the entire suit should be heard in state court.”). We are thus called upon to decide only whether the district court properly dismissed Count I.

DISCUSSION

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495 F.3d 1143, 41 Employee Benefits Cas. (BNA) 1706, 26 I.E.R. Cas. (BNA) 752, 2007 U.S. App. LEXIS 19179, 2007 WL 2296775, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amerisourcebergen-corp-v-roden-ca9-2007.