Marx v. Loral Corp.

87 F.3d 1049, 1996 WL 350800
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 24, 1996
DocketNos. 93-17078, 93-17213
StatusPublished
Cited by113 cases

This text of 87 F.3d 1049 (Marx v. Loral Corp.) 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
Marx v. Loral Corp., 87 F.3d 1049, 1996 WL 350800 (9th Cir. 1996).

Opinion

MICHAEL DALY HAWKINS, Circuit Judge:

We consider here separate appeals from the district court, one concerning the merits of the litigation and the other an important procedural point concerning the timeliness of instituting an appeal. The merits appeal concerns whether oral and written representations made by the administrator of an employee benefit plan governed by ERISA bind the employer when the representations contradict the unambiguous terms of the plan. The procedural issue concerns the standard for determining “excusable neglect” under Federal Rule of Appellate Procedure 4(a)(5). Particularly, the appeal addresses whether this Circuit’s long-established, strict standard for proving “excusable neglect” has been overruled by the Supreme Court’s definition of “excusable neglect” in Pioneer Inv. Serus. Co. v. Brunswick Assocs. Ltd,., 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993), and whether, under either standard, excusable neglect was demonstrated in connection with the plaintiffs’ failure to timely file notice of their appeal.

FACTS

The plaintiffs are members of a class comprised of former employees and surviving spouses of former employees of Goodyear Aerospace Corporation (“GAC”). GAC established and maintained an employee benefit plan (the “Plan”) under the Employee Retirement Income Security Act of 1974 (“ERISA”). GAC was a wholly-owned subsidiary of Goodyear Tire & Rubber Company (“Goodyear”) when the Plan was established, and Goodyear served as the Plan administrator and fiduciary. Goodyear sold GAC to Loral Corporation (“Loral”) in March 1987, after which Loral became the Plan administrator and fiduciary.

The Goodyear Plan provided:

[t]he establishment of this Program shall not be deemed to impose upon the Employer any contractual obligation to continue its coverage and the Employer reserves the right in its sole discretion to modify or terminate the Program at any time.

The first page of the summary plan description provided that “[t]he Company reserves the right to modify or terminate these plans within the limits prescribed by law.”

Shortly before Goodyear sold GAC to Loral, Goodyear representatives informed the plaintiffs that, if they remained with GAC, their benefits with Loral would be equal to or better than they had been with Goodyear. These representations were made both orally and in writing.

The summary plan description issued by Loral after it purchased GAC stated:

Loral Systems Group hopes to continue these Plans indefinitely, but reserves the right to terminate, suspend, withdraw, amend or modify the Plans at any time. Any change or termination of benefits (a) will be based solely on the decision of Loral Systems Group and (b) may apply to active employees, future retirees and current retirees as either separate groups, or as one group. If this should happen, you will be notified.

Loral later informed the plaintiffs that their benefits would be subject to change unless they chose to retire before January 21, 1989. If they opted to retire, their benefits would be “locked in” as of the date of retirement. These representations were made both orally and in writing. The plain[1052]*1052tiffs opted to retire, thereby foregoing further employment, certain accrued benefits, and future increased pension benefits.

Despite its representations, Loral amended the plaintiffs’ benefits under the Plan in July 1990. Specifically, Loral eliminated reimbursement for basic monthly premiums for supplemental Medicare coverage and increased participant co-pay contributions for prescription drugs. This lawsuit followed.

PROCEDURAL HISTORY

A. The Complaint and the Amended Complaint

The plaintiffs filed their complaint against Loral, GAC and Goodyear in March 1991, alleging failure to provide benefits in violation of 29 U.S.C. § 1132(a)(1)(B), breach of fiduciary duty in violation of 29 U.S.C. §§ 1109 and 1132(a)(2), promissory estoppel, fraud, and an allegation against Loral of failure to provide Plan information upon request in violation of 29 -U.S.C. § 1132(c).

Loral and Goodyear moved to dismiss the complaint. In an order from the bench, the district court dismissed all of the plaintiffs’ claims except for the statutory penalty claim for failure to provide plan information. The court reasoned that the plaintiffs’ state law contract and fraud claims were preempted by ERISA. It also concluded that the plaintiffs’ claim for failure to provide benefits failed to state a claim because the Plan expressly reserved the defendants’ right to modify the Plan’s terms, and that their claim for breach of fiduciary duty failed to plead the allegations of fraud with the requisite specificity. The court granted the plaintiffs leave to amend their complaint.

The plaintiffs filed their amended complaint in August 1991. This three-count complaint again alleged failure to provide benefits, breach of fiduciary duty, and failure to provide Plan information upon request.

B. Judgment on the Pleadings

After an unsuccessful attempt to have the failure to provide benefits and breach of fiduciary duty claims once again dismissed for failure to state a claim, the defendants moved for judgment on the pleadings on those two counts. The district court granted the defendants’ motion.

Concerning the claim for failure to provide benefits, the court stated that 29 U.S.C. § 1132(a)(1)(B) is the ERISA equivalent of a breach of contract action (citing Miller v. Pension Plan for Employees of Coastal Corp., 780 F.Supp. 768, 770 (D.Kan.1991), aff'd, Miller v. Coastal Corp., 978 F.2d 622 (10th Cir.1992), cert. denied, 507 U.S. 987, 113 S.Ct. 1586, 123 L.Ed.2d 152 (1993)). The Plan, however, expressly allowed the defendants to amend the Plan’s provisions, thereby suggesting that no “breach” occurred when defendants decreased the plaintiffs’ benefits. Moreover, neither oral nor written representations were sufficient to modify the terms of the Plan. The court noted that, as a result, the plaintiffs relied upon fraud and estoppel theories to support their claim.1 Neither theory, however, was sufficient to save the plaintiffs’ claim. In Olson v. General Dynamics Corp., 960 F.2d 1418 (9th Cir.1991), cert. denied, 504 U.S. 986, 112 S.Ct. 2968, 119 L.Ed.2d 588 (1992), we held that fraud claims are preempted by ERISA’s statutory scheme; and under Greany v. Western Farm Bureau Life Ins. Co., 973 F.2d 812

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Cite This Page — Counsel Stack

Bluebook (online)
87 F.3d 1049, 1996 WL 350800, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marx-v-loral-corp-ca9-1996.