Honolulu Joint Apprenticeship & Training Committee of United Ass'n Local Union No. 675 v. Foster

332 F.3d 1234, 2003 WL 21403714
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 19, 2003
DocketNos. 01-16596, 01-16641
StatusPublished
Cited by10 cases

This text of 332 F.3d 1234 (Honolulu Joint Apprenticeship & Training Committee of United Ass'n Local Union No. 675 v. Foster) 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
Honolulu Joint Apprenticeship & Training Committee of United Ass'n Local Union No. 675 v. Foster, 332 F.3d 1234, 2003 WL 21403714 (9th Cir. 2003).

Opinion

SCHROEDER, Chief Judge.

This appeal arises from a union’s action to recover the costs of training James H. Foster, III as an apprentice in the plumbing and pipefitting industry. Honolulu Joint Apprenticeship and Training Committee of United Association Local Union No. 675 (“HJA”) trained Foster for four- and-a-half years on the condition that he work for a union employer upon completion of his apprenticeship. Foster breached his end of the deal by working for a non-union employer and failing to repay the $13,183.92 that HJA expended in training him. HJA brought this action under ERISA, 29 U.S.C. § 1132(a)(3), to recover those costs.

[1236]*1236The primary question on appeal is whether HJA’s action to enforce the terms of its agreement with Foster constitutes “appropriate equitable relief’ under § 1132(a)(3). Applying the Supreme Court’s recent decision in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002), we hold that it does not, and we therefore affirm the summary judgment in favor of Foster. Foster also seeks attorney’s fees in defending this action. We hold that the district court properly denied his fee request, so we also affirm the denial of fees.

Facts and Procedural History

HJA operates an apprenticeship training program funded by contributions from employers who are signatories to local labor management agreements. Foster was enrolled in the apprenticeship program from 1994 until 1998. His apprenticeship was subject to a scholarship loan agreement that required him to repay the costs of his training either by in-kind credit — obtained by working for a participating union employer — or by monetary payment, if he chose to work for a non-union employer. The relevant terms of the agreement are as follows:

5.Covenants of the Apprentices. Upon receipt of any training provided pursuant to this agreement, the Apprentice will neither seek nor accept any work as an employee or independent contractor from an employer engaged in nor become an employer engaged in any general mechanical, plumbing or pipefit-ting work or any other work covered by the Constitution of the United Association of Journeymen and Apprentices of the Plumbing & Pipefitting Industry of the United States and Canada, AFL-CIO, unless such employment is performed under the terms of a collective bargaining agreement that provides for the payment of contributions by such employer to the Committee or like joint apprenticeship committee. Apprentice shall provide Committee with income tax returns and other information requested by the Committee from time to time to verify whether Apprentice is in compliance with this covenant.
6. Breach of Agreement. An immediate breach of this Agreement will result if the Apprentice fails to comply with covenants in paragraph 5 above.
7. Repayment by Credits. An Apprentice who is not in breach of the Agreement will receive a credit for such employment to reduce the balance of the Scholarship Loan in accordance with the Repayment Schedule in the Note.
8. Consequences of Breach. If the Apprentice breaches this Agreement, all amounts due and owing on the Scholarship Loan(s), reduced by any credit received by the Apprentice pursuant to Paragraph 7 hereof, or by any cash payments made, will become immediately due and payable, together with interest at 12% per annum from the date of this Agreement, .and all costs of collection hereof, including reasonable attorneys’ fees and court costs.

On September 23, 1999, Foster notified HJA that he was working for a non-union employer, in breach of paragraph 5 of the loan agreement. HJA brought suit against Foster in state court, but the suit was dismissed on preemption grounds. HJA then filed this action in federal district court.1 On June 19, 2001, the district court denied HJA’s motion for summary judgment and granted Foster’s cross-motion for summary judgment. The court [1237]*1237found that HJA was not entitled to the relief it sought under ERISA and that Foster was not entitled to an award of attorney’s fees. Foster then filed a motion for partial reconsideration with respect to the fee award. The court denied Foster’s motion on November 2, 2001. HJA appealed, and Foster cross-appealed.

Discussion

HJA argues that Foster was unjustly enriched by the apprenticeship training he received and that, as the traditional remedy for unjust enrichment, restitution is available as “appropriate equitable relief’ under ERISA, 29 U.S.C. § 1132(a)(3). That subsection provides:

A civil action may be brought ... by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this sub-chapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.

Id. It is undisputed that HJA is a fiduciary, that Foster is a beneficiary, and that the apprenticeship program is a “welfare benefit plan” under ERISA, 29 U.S.C. § 1002(1)(A). The question is whether the restitution sought by HJA is legal or equitable in nature: only the latter is allowed under § 1132(a)(3). See Great-West Life, 534 U.S. at 218, 122 S.Ct. 708.

The Supreme Court cases interpreting § 1132(a)(3) mark a steadily shrinking field of “appropriate equitable relief’ available to plan fiduciaries. In Mertens v. Dewitt Assocs., 508 U.S. 248, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993), the Supreme Court held that the “equitable relief’ available under that subsection includes only “those categories of relief that were typically available in equity (such as injunction, mandamus, and restitution, but not compensatory damages).” Id. at 256 (emphasis in original). Applying Mertens, we have twice rejected claims by ERISA fiduciaries to recover under the plan’s contractual reimbursement provisions. In FMC Medical Plan v. Owens, 122 F.3d 1258 (9th Cir.1997), the beneficiary had agreed to reimburse the plan for any benefits paid by the plan and later recovered from a third party. We held that the plan’s action for reimbursement was one at law for breach of contract, and thus not allowed under § 1132(a)(3). Id. at 1262. We reached the same conclusion on similar facts in Reynolds Metals Co. v. Ellis, 202 F.3d 1246, 1249 (9th Cir.2000). Despite eliminating reimbursement as an available remedy, however, both Ellis and Owens left intact the availability of restitution as appropriate equitable relief. See Ellis, 202 F.3d at 1248; Owens, 122 F.3d at 1262.

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