Stephen H. Bafford v. Northrop Grumman Corporation

Opinion

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1 O 2 3 4 5 6 7 United States District Court 8 9 Central District of California 10

11 STEPHEN H. BAFFORD, et al., Case № 2:18-cv-10219-ODW (Ex)

12 Plaintiffs, ORDER DECLINING 13 v. SUPPLEMENTAL JURISDICTION AND DISMISSING WITHOUT 14 NORTHROP GRUMMAN PREJUDICE CLAIMS AGAINST 15 CORPORATION, et al., ALIGHT; ORDER DENYING AS 16 MOOT ALIGHT’S MOTION TO Defendants. DISMISS [85] 17 19 Plaintiffs Stephen H. Bafford, Laura Bafford, and Evelyn L. Wilson bring a 20 putative class action against Defendants Northrop Grumman Corporation; 21 Administrative Committee of the Northrop Grumman Pension Plan; and Alight 22 Solutions LLC for damages arising from miscalculation of Plaintiffs’ retirement 23 benefits. The operative Third Amended Complaint, filed February 22, 2022, sets forth 24 a claim against the Administrative Committee for violations of the Employee 25 Retirement Income Security Act (“ERISA”) and state-law claims for negligence and 26 negligent misrepresentation against Alight. (Third Am. Compl. (“TAC”), ECF 27 No. 101.) 28 Case 2:18-cv-10219-ODW-E Document 111 Filed 04/04/22 Page 2 of 15 Page ID #:2874

1 The Court ordered the parties to show cause regarding supplemental jurisdiction, 2 and then regarding diversity jurisdiction, over the claims against Alight. (Order, ECF 3 No. 100; Order to Show Further Cause, ECF No. 109.) The Court has reviewed 4 Plaintiffs’ and Alight’s responses to these two Orders. (Suppl. Jurisdiction Mem., ECF 5 No. 102; Notice Non-Opp’n, ECF No. 103; Diversity Resp., ECF No. 110.) 6 As discussed below, the Court lacks subject matter jurisdiction over the claims 7 against Alight and accordingly dismisses those claims without prejudice. As a result, 8 Alight’s currently pending Motion to Dismiss, (ECF No. 85), is moot. 10 The Court recited the facts of this case in detail in its February 1, 2022 Order 11 dismissing the claims against the Administrative Committee. The Court incorporates 12 those facts herein by reference. (Order 2–4.) In brief, Plaintiffs are participants in 13 retirement plans sponsored by Northrop Grumman, their employer. An error on the part 14 of Alight, a servicer the Administrative Committee hired to assist with plan 15 administration, caused the estimates in Plaintiffs’ pension benefit statements in the 16 years leading up to their retirement to be significantly overstated. Both Mr. Bafford 17 and Ms. Wilson in fact received improperly inflated payments for several months of 18 their retirement before the Administrative Committee discovered the error and 19 contacted them about it. 20 On December 7, 2018, Plaintiffs sued Defendants in federal court. Plaintiffs 21 asserted the Court has federal question jurisdiction over the ERISA claims and 22 supplemental jurisdiction over the remaining claims, or, in the alternative, diversity 23 jurisdiction over the entire matter. (Compl. ¶ 1, ECF No. 1.) 24 In the Second Amended Complaint, Bafford had alleged that both the 25 Administrative Committee and Alight were liable for the estimation error under various 26 theories. (See Second Am. Compl., ECF No. 83.) The Administrative Committee 27 28

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1 moved to dismiss.1 (Admin. Comm. Mot., ECF No. 84.) The takeaway from the 2 Court’s Order granting the Administrative Committee’s motion was that, to whatever 3 extent the Administrative Committee was responsible for the above-described error, the 4 Administrative Committee nevertheless could not be held liable for damages arising 5 from the errors in the benefit estimates and payments. The Court’s disposition was as 6 follows: 7 Plaintiffs’ ERISA claim is DISMISSED WITH PREJUDICE AND WITHOUT LEAVE TO AMEND to the extent Plaintiffs seek relief for 8 inaccuracies in their pension benefit statements. The ERISA claim is 9 otherwise DISMISSED WITH LEAVE TO AMEND to assert (1) a 10 claim for failure to provide an automatic triennial statement or an automatic annual notice of how to obtain a statement, as required by 29 11 U.S.C. §§ 1025(a)(1)(B)(i) and 1025(a)(3)(A); and/or (2) a claim for 12 failure to provide any benefit statement at all in response to Plaintiffs’ written requests, as required by § 1025(a)(1)(B)(ii). 13 14 (Order 15.) Plaintiffs availed themselves of the first prong of this leave to amend, and 15 in the now-operative Third Amended Complaint, they assert a single claim against the 16 Administrative Committee under 29 U.S.C. §§ 1025(a)(1)(B)(i) and 1025(a)(3)(A). 17 (See TAC ¶ 115 (“The Administrative Committee did not furnish Mr. Bafford with a 18 pension benefit statement every three years or an annual notice of the availability of a 19 pension benefit statement and how to obtain one.”). 20 In the TAC, Plaintiffs maintain their two claims for negligence and negligent 21 misrepresentation against Alight alone. The gravamen of these claims is that Alight 22 either committed negligence or made a negligent misrepresentation in miscalculating 23 Plaintiffs’ pension benefits in estimates before retirement and payments during 24 retirement. (See TAC ¶ 91 (alleging, for negligence, that Alight “breached its 25 professional duties by providing grossly inaccurate information to Plaintiffs and Class 26

1 Alight also moved to dismiss the Second Amended Complaint. (Alight Mot., ECF No. 85.) The 27 Court deferred ruling on Alight’s motion, which would have required substantive determinations 28 regarding Plaintiffs’ state-law claims, instead opening the inquiry into jurisdiction that the Court completes herein.

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1 members regarding the amount of their benefits under the Northrop Plan on numerous 2 occasions over at least a six-year period”); id. ¶ 97 (alleging, for negligent 3 misrepresentation, that Alight “intended that Plaintiffs and the Class members act in 4 reliance on its statements of their pension benefit for purposes of financial planning, 5 including because there is no purpose for a pension benefit statement other than to 6 assess the value of the pension benefits”).) 7 No single claim is asserted against both Defendants. 9 Federal courts have subject matter jurisdiction only as authorized by the 10 Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; see also Kokkonen v. 11 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Federal district courts have 12 original jurisdiction where an action arises under federal law, or where each plaintiff’s 13 citizenship is diverse from each defendant’s citizenship (the “complete diversity” 14 requirement) and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1331, 15 1332(a). 16 A complaint filed in federal court must contain only “a plausible allegation that 17 the amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee Basin 18 Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014); cf. Bey v. Geiser, No. EDCV 19 19-844 JGB (SHKx), 2019 WL 4422678, at *2 (C.D. Cal. July 24, 2019) (same, as to 20 complete diversity of citizenship). But where a party contests, or the court questions, 21 another party’s allegations concerning the diversity requirements, both sides submit 22 proof, and the court decides whether the party claiming jurisdiction has proven complete 23 diversity or the amount in controversy by a preponderance of the evidence. Dart 24 Cherokee Basin, 574 U.S. at 88–89; see Fed. R. Civ. P. 12(h)(3) (“If the court 25 determines at any time that it lacks subject-matter jurisdiction, the court must dismiss 26 the action.”). 27 Here, the Court informed the parties in its Order and Order to Show Further 28 Cause that this was “an inquiry into both the facial and the factual sufficiency of the

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1 parties’ showing of subject matter jurisdiction.” (Order 16 (citing Leite v. Crane Co., 2 749 F.3d 1117, 1121–22 (9th Cir. 2014); Order to Show Further Cause 2 (same).) In 3 considering facial sufficiency, courts apply the standard under Federal Rule of Civil 4 Procedure 12(b)(1) or (b)(6), accepting the truth of the plaintiff’s allegations and 5 drawing all reasonable inferences in the plaintiff’s favor to determine whether the 6 allegations are sufficient as a legal matter to invoke federal jurisdiction. See Leite, 7 749 F.3d at 1121. 8 In contrast, a factual attack “contests the truth of the plaintiff’s factual 9 allegations.” Id. When the factual sufficiency of jurisdiction is questioned, “the 10 plaintiff must support [his or her] jurisdictional allegations with competent proof, under 11 the same evidentiary standard that governs in the summary judgment context.” Id. at 12 1121 (internal quotation marks and citation omitted). If there are disputed factual issues 13 going to subject matter jurisdiction, “the district court may resolve those factual disputes 14 itself,” unless “the issue of subject-matter jurisdiction is intertwined with an element of 15 the merits of the plaintiff’s claim.” Id. at 1121–22 & n.3. 16 A. Diversity Jurisdiction 17 The Supreme Court has consistently interpreted the diversity jurisdiction statute 18 as “requiring complete diversity: In a case with multiple plaintiffs and multiple 19 defendants, the presence in the action of a single plaintiff from the same State as a single 20 defendant deprives the district court of original diversity jurisdiction over the entire 21 action.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005); 22 Holden v. Fluent, Inc., No. 20-cv-03816-JCS, 2020 WL 6822914, at *1 n.3 (N.D. Cal. 23 Nov. 20, 2020). 24 The relevant citizenship rules are as follows. “[A] corporation shall be deemed 25 to be a citizen of every State . . . by which it has been incorporated and of the State . . . 26 where it has its principal place of business.” 3123 SMB LLC v. Horn, 880 F.3d 461, 27 462–63 (9th Cir. 2018) (quoting 28 U.S.C. § 1332(c)(1)). A limited liability company 28 (“LLC”), by contrast, “is a citizen of every state of which its owners/members are

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1 citizens.” Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2 2006). 3 A partnership is a citizen of each state of which its partners are citizens. Id. When 4 a limited partnership is at issue, courts generally consider the citizenship of both general 5 partners and limited partners. Nam Soon Jeon v. Island Colony Partners, 892 F. Supp. 6 2d 1234, 1239 (D. Haw. 2012) (looking to both general and limited partners to 7 determining the citizenship of a limited partnership); cf. EQT Prod. Co. v. Vorys, Sater, 8 Seymour & Pease, LLP, No. 6:15-CV-146-REW-EBA, 2018 WL 6790486, at *4 9 (E.D. Ky. Dec. 26, 2018) (looking to both equity and non-equity partners to determine 10 the citizenship of a law firm organized as an LLP). 11 The citizenship rules for unincorporated entities are “iterative” in that where a 12 member of an unincorporated entity is itself an unincorporated entity, “the citizenship 13 of [that entity’s] members (or partners, as the case may be) must then be considered.” 14 D.B. Zwirn Special Opportunities Fund, L.P. v. Mehrotra, 661 F.3d 124, 126–27 15 (1st Cir. 2011). The Court must “trac[e] through however many layers there may be” 16 to ensure it accounts for the citizenship of every partner or member. West v. Louisville 17 Gas & Elec. Co., 951 F.3d 827, 830 (7th Cir. 2020). 18 B. Federal Question Jurisdiction; Supplemental Jurisdiction 19 Typically, a claim brought under federal law gives rise to federal question 20 jurisdiction. See Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 808 (1986) 21 (“[T]he vast majority of cases brought under the general federal-question jurisdiction 22 of the federal courts are those in which federal law creates the cause of action.”). 23 Federal law “grants supplemental jurisdiction over state law claims ‘that are so 24 related to claims in the action within such original jurisdiction that they form part of the 25 same case or controversy under Article III of the United States Constitution.’” Campos 26 v. W. Dental Servs., Inc., 404 F. Supp. 2d 1164, 1167 (N.D. Cal. 2005) (quoting 27 28 U.S.C. § 1367(a)). However, even if supplemental jurisdiction exists under this rule, 28 district courts nevertheless possess discretion to decline to exercise supplemental

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1 jurisdiction over a claim if, among other things, “the claim substantially predominates 2 over the claim or claims over which the district court has original jurisdiction.” 28 3 U.S.C. § 1367(c)(2). 4 In exercising this discretion, courts are to consider the values of “judicial 5 economy, convenience, fairness, and comity.” Bennett v. City of Kingman, 543 F. Supp. 6 3d 794, 812 (D. Ariz. 2021) (quoting Acri v. Varian Assocs., Inc., 114 F.3d 999, 1001 7 (9th Cir. 1997) (O’Scannlian, J., dissenting)), appeal filed, No. 21-16105 (9th Cir. 8 June 30, 2021). “Supplemental jurisdiction[] is ‘a doctrine of discretion, not of 9 plaintiff’s right[.] . . . [D]ecisions of state law should be avoided both as a matter of 10 comity and to promote justice between the parties, by procuring for them a surer-footed 11 reading of applicable law.’” Kurk v. Los Rios Classified Emps. Ass’n, 540 F. Supp. 3d 12 973, 983 (E.D. Cal. 2021) (quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 13 726 (1966)), appeal filed, No. 21-16257 (9th Cir. Aug. 2, 2021). 15 Plaintiffs’ demonstration of complete diversity of citizenship is insufficient, and 16 thus, the Court lacks diversity jurisdiction with respect to the claims against Alight. 17 Moreover, the claims against Alight, on one hand, and the claim against the 18 Administrative Committee, on the other hand, do not arise from a common nucleus of 19 operative facts, so the Court accordingly declines supplemental jurisdiction and 20 dismisses the claims against Alight without prejudice. As a result, Alight’s currently 21 pending Motion to Dismiss is moot. 22 A. Diversity Jurisdiction; Complete Diversity of Citizenship 23 The first issue is whether diversity provides a basis for jurisdiction over the two 24 claims against Alight for negligence and negligent misrepresentation. Here, Plaintiffs 25 fail to demonstrate complete diversity of citizenship. 26 1. Citizenship of Plaintiffs 27 Plaintiffs Stephen and Laura Bafford are citizens of the United States who have 28 lived in Ogden, Utah continuously since 1998 and who consider Utah their permanent

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1 home. (Decl. Teresa S. Renaker (“Renaker Decl.”) Ex. E (“Bafford Decl.”) ¶¶ 2–4, 2 ECF No. 110-6.) Plaintiff Evelyn Wilson is a citizen of the United States who has lived 3 in Rancho Palos Verdes, California continuously since 1998 and who considers 4 California her permanent home. (Renaker Decl. Ex. F (“Wilson Decl.”) ¶¶ 2–4, ECF 5 No. 110-7.) Both declarations also confirm that Plaintiffs are United States citizens. 6 The declarations are sufficient to demonstrate by a preponderance of the evidence that, 7 for the purpose of this jurisdictional inquiry, Plaintiffs are citizens of Utah and 8 California. 9 2. Citizenship of Administrative Committee; Romero exception 10 Under an exception to the complete-diversity rule, when a plaintiff asserts a 11 federal question claim against a non-diverse defendant, the presence of that defendant 12 does not defeat jurisdiction over state-law claims against otherwise diverse defendants. 13 Romero v. Int’l Terminal Operating Co., 358 U.S. 354, 381 (1959) (holding it was error 14 to dismiss claims against diverse respondents where federal law provided independent 15 basis of jurisdiction over non-diverse respondent), superseded in part by statute on 16 other grounds as stated in Miles v. Apex Marine Corp., 498 U.S. 19, 33 (1990). “The 17 Romero exception to the . . . complete diversity rule allows a court to ignore a particular 18 party for diversity purposes because that party is properly before the court on a separate 19 ground of original federal jurisdiction.” Palmer v. Hosp. Auth. of Randolph Cnty., 20 22 F.3d 1559, 1565 (11th Cir. 1994) (citing Romero, 358 U.S. at 381). “The reasoning 21 behind this exception is that plaintiffs should not be required to bring two suits in federal 22 court solely in order to avoid destroying complete diversity.” K.M.B. Warehouse 23 Distribs., Inc. v. Walker Mfg. Co., 61 F.3d 123, 130 (2d Cir. 1995); see Kauth v. 24 Hartford Ins. Co., 852 F.2d 951, 959 (7th Cir. 1988) (“If independent bases of federal 25 jurisdiction support separate claims, a plaintiff should not be required to bring those 26 claims in separate complaints.”). 27 Applying the Romero exception here, a separate basis for federal jurisdiction— 28 federal question jurisdiction under ERISA—supports Plaintiffs’ claims against the

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1 Administrative Committee. Thus, the Court disregards the citizenship of the 2 Administrative Committee in determining whether complete diversity exists. 3 3. Citizenship of Alight 4 The remaining issue is whether Plaintiffs, who are citizens of California and 5 Utah, are completely diverse from Alight. The evidence of Alight’s citizenship is found 6 in the Declaration of Kirsten Scott and attached exhibits. (Decl. Kirsten Scott (“Scott 7 Decl.”), ECF No. 102-1.) The Court notes at the outset that Scott is the attorney for 8 Plaintiffs and thus does not have or profess to have personal knowledge of the 9 citizenship of Alight. This means that the exhibits themselves must demonstrate by a 10 preponderance of the evidence that Alight is a citizen of a state or states that include 11 neither California nor Utah. 12 The exhibits fail in this regard. First, Exhibits C and D contradict one another as 13 to whether Alight has one member (Tempo Acquisition, LLC), as suggested by the 14 California Secretary of State filing, or three members (Tempo Acquisition, LLC plus 15 two individuals), as suggested by the Illinois Secretary of State filing. If the latter, the 16 Illinois filing fails to demonstrate the state of citizenship of the two individual members 17 by a preponderance of the evidence. The Illinois filing simply lists one address for all 18 three members, including the LLC. That may or may not be the address where the two 19 individuals live; moreover, citizenship concerns more than simply where a person lives. 20 Walters v. U.S. Bank, N.A., 203 F. Supp. 3d 1055, 1057 (C.D. Cal. 2016) (“[B]eing a 21 citizen in this context is more than just being a resident. To show state citizenship for 22 diversity purposes a party must be domiciled in the state. A person’s domicile is her 23 permanent home, where she resides with the intention to remain . . . .” (citations, 24 internal quotation marks, and ellipses removed).) 25 Even if the former (i.e., even if Alight has only one member), questions persist. 26 Alight’s purported sole member, Tempo Acquisition, LLC, has one manager, Master 27 Graphics, LLC. (Scott Decl. Ex. E (“Tempo Acquisition Illinois Filing”), ECF No. 102- 28 6.) Master Graphics, LLC, in turn, has three managers: two individuals and MG limited

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1 partnership. (Scott Decl. Ex. F (“Master Graphics Illinois Filing”), ECF No. 102-7.) 2 Attorney Scott declares that she found no information about the MG Limited 3 Partnership in the Illinois Secretary of State database, (Scott Decl. ¶ 8), and the 4 evidentiary showing ends there. 5 But the Master Graphics Illinois Filing does not demonstrate anyone’s 6 citizenship—either that of the two individuals or the limited partnership. This filing 7 simply lists one address for all three members, including the limited partnership. That 8 may or may not be the address where the two individuals live; moreover, citizenship 9 concerns more than simply where a person lives. Walters, 203 F. Supp. 3d at 1057. 10 The Court is accordingly left with no evidence of the citizenship of the two individuals. 11 Moreover, counsel’s declaration regarding MG Limited Partnership does not 12 adequately address the citizenship of the limited partnership. All partnerships, 13 including limited partnerships, have at least two partners, and the Court must consider 14 the citizenship of each in assessing complete diversity. See Second Measure, Inc. v. 15 Kim, 143 F. Supp. 3d 961, 971 (N.D. Cal. 2015) (“California law defines a partnership 16 as ‘the association of two or more persons . . . .’”). Here, the Court has no evidence 17 about the citizenship of the two or more members of MG Limited Partnership. 18 This leaves the citizenship of at least four, possibly six, and possibly more of 19 Alight’s constituent members, managers, entities, partners, and other persons unproven 20 and in substantial doubt. Plaintiffs fail to demonstrate by a preponderance of the 21 evidence that none of these constituent parts, which are of unknown form and number, 22 are citizens of California or Utah. Notably, in neither of Plaintiffs’ responses to the 23 Court’s Order and Order to Show Further Cause, respectively, did Plaintiffs request 24 additional time to conduct jurisdictional discovery. The Court is therefore secure in its 25 finding that complete diversity is not demonstrated and diversity accordingly fails as a 26 basis for subject matter jurisdiction. 27 “[W]here the district court has doubts about whether diversity exists, the district 28 court may insist that the jurisdictional facts be established or the case be dismissed, and

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1 for that purpose the court may demand that the party alleging jurisdiction justify [its] 2 allegations by a preponderance of evidence.” Harris v. Rand, 682 F.3d 846, 851 (9th 3 Cir. 2012) (internal quotation marks omitted). Here, after this Court’s insistence, 4 Plaintiffs fail in their burden of demonstrating complete diversity of citizenship. 5 Accordingly, the Court finds that it lacks diversity jurisdiction over this action. 6 B. Supplemental Jurisdiction 7 The remaining issue is whether the Court should exercise jurisdiction over the 8 claims against Alight as supplemental to the claim against the Administrative 9 Committee. The Court finds that it does not possess supplemental jurisdiction over the 10 claims against Alight. In the alternative, if the Court does possess supplemental 11 jurisdiction, it exercises its discretion to decline such jurisdiction under subdivision (2) 12 of 28 U.S.C. § 1367(c). 13 1. Existence of Supplemental Jurisdiction 14 The existence of supplemental jurisdiction in the first instance turns on the 15 question whether the claims over which the court has original jurisdiction, on one hand, 16 and the supplemental claims, on the other hand, form part of the same case or 17 controversy—that is, whether they “derive[] from a common nucleus of operative fact.” 18 Koumarian v. Chase Bank USA, N.A., No. C-08-4033 MMC, 2008 WL 5120053, at *3 19 (N.D. Cal. Dec. 3, 2008) (citing Gibbs, 383 U.S. at 725). The common-nucleus 20 standard is broader than the “same case or controversy” standard governing compulsory 21 counterclaims, Campos, 404 F. Supp. 2d at 1167–68, and district courts have articulated 22 the standard in various ways, Carne v. Stanislaus Cnty. Animal Servs. Agency, 445 F. 23 Supp. 3d 772, 775 (E.D. Cal. 2020). Some courts consider (1) whether “the facts are 24 related in time, space, origin or motivation”; (2) whether “the facts form a convenient 25 trial unit”; and (3) whether “treating the facts as a unit would conform to the parties’ 26 expectations.” St. Paul Mercury Ins. Co. v. Del Webb Cal. Corp., No. 16-cv-0209-PSG 27 (SPx), 2017 WL 7661491, at *3 (C.D. Cal. Nov. 7, 2017) (citing Apparel Art Int’l, Inc. 28 v. Amertex Enters. Ltd., 48 F.3d 576, 584 (1st Cir. 1995)). Other courts consider more

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1 generally “whether the claims arise from the same facts, or involve similar occurrences, 2 witnesses or evidence.” Landy v. Pettigrew Crewing, Inc., No. 2:19-cv-07474-RGK 3 (AFMx), 2019 WL 6245525, at *5 (C.D. Cal. Nov. 22, 2019) (quoting Hudson v. Delta 4 Air Lines, Inc., 90 F.3d 451, 455 (11th Cir. 1996)). For these courts, “[e]ven a ‘loose 5 factual connection between the claims is generally sufficient.’” U.S. Chess Fed’n, Inc. 6 v. Polgar, No. C 08-05126 MHP, 2009 WL 981257, at *3 (N.D. Cal. Apr. 13, 2009) 7 (quoting Ammerman v. Sween, 54 F.3d 423, 424 (7th Cir. 1995)). 8 Here, the Court finds that the ERISA claim against the Administrative Committee 9 as currently pleaded, on one hand, and the state-law claims against Alight, on the other 10 hand, do not derive from a common nucleus of operative facts, and that, to the extent 11 there are common facts between the two sets of claims, those facts are ancillary. 12 The first and most obvious observation in this regard is that the two sets of claims 13 are different claims against different defendants. This observation alone militates 14 against supplemental jurisdiction, because the separateness of the defendants and the 15 separateness of the sets of claims decreases the degree of commonality of operative 16 facts. Here, Plaintiffs’ ERISA claim against the Administrative Committee now 17 focuses on a narrow factual determination: whether the Administrative Committee 18 provided Plaintiffs with an automatic triennial pension benefit statement or an 19 automatic annual notice of how to obtain one. This is a statutory duty ERISA places on 20 the Administrative Committee, and it can discharge this duty in any number of ways. 21 It could have chosen to engage Alight to discharge this duty, or it could have engaged 22 a different entity to discharge this duty, or it could have discharged this duty itself, using 23 its own employees and resources. 24 Given these observations, the prove-up of the ERISA claim will involve 25 testimony from Plaintiffs about whether they received statements and testimony from 26 the Administrative Committee about their policies and practices for sending plan 27 participants statements. This may involve some inquiry into whether Alight sent 28 statements on the Committee’s behalf, but if it does, that inquiry will be limited to

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1 whether and when Alight sent statements and reminders; it will have nothing at all to 2 do with the numbers and figures on those statements or reminders, nor will it have 3 anything to do with Alight’s direct statutory duty under ERISA, as Alight itself is not a 4 plan administrator. 5 The negligence and negligent misrepresentation claims, by contrast, are based on 6 a completely different set of operative facts: (1) the terms of the operative plans; (2) 7 how and to what extent the Committee delegated to Alight the duty to inform plan 8 participants of their pension benefits; (3) the nature of Alight’s error in miscalculating 9 Plaintiffs’ benefits; (4) the mathematical extent of that error; (5) Plaintiffs’ reliance on 10 that error, and whether that reliance was reasonable; and (6) the extent of damages 11 Plaintiffs suffered as a result of relying on the error. Not one of these operative facts is 12 common to the claim against the Administrative Committee. The prove-up of the 13 claims against Alight, unlike that of the claim against the Committee, will involve 14 testimony from Alight employees about the nature and extent of the calculation error 15 and testimony from Plaintiffs on how they acted in reliance (and nothing to do with the 16 frequency with which they received statutory statements). To the extent testimony from 17 the Administrative Committee will be required, if it is required at all, that testimony 18 will be ancillary to the key issues. 19 Based on these observations, the Court concludes that the ERISA claim, on one 20 hand, and the state-law claims, on the other hand, do not arise from a common nucleus 21 of operative fact. Accordingly, the Court is not permitted to exercise supplemental 22 jurisdiction over the state-law claims. 28 U.S.C. § 1367(a). 23 2. Discretion to Decline Supplemental Jurisdiction 24 In the alternative, even if 28 U.S.C. § 1367(a) grants the Court discretion to 25 exercise supplemental jurisdiction, the Court nevertheless declines to do so pursuant to 26 28 U.S.C. § 1367(c)(2), because the state-law claims would substantially predominate 27 over the ERISA claim. The ERISA claim is to be tried by bench on the narrow issue 28 whether the Administrative Committee provided notice in the statutorily required

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1 manner. The state law claims, by contrast, involve a much broader swath of issues, 2 including the nature and extent of the calculation error. Resolution of the state law 3 claims may also require individualized showings from each plan participant regarding 4 causation and the different retirement decisions each participant would have made had 5 the benefit estimates been accurate. These claims will all be tried by jury and stand to 6 substantially predominate over the narrower ERISA bench trial. 7 The Court also notes that, although the negligence claims have been pending 8 before this Court since 2018, and although the Ninth Circuit has already examined the 9 claims against Alight, ultimately, this Court is in no better position to adjudicate these 10 claims today than a state court would be were Plaintiffs to file them in state court 11 tomorrow. This Court has not made significant merits-based determinations regarding 12 the elements of the claims against Alight or Alight’s defenses thereto. The Ninth Circuit 13 opinion did no more than reverse this Court’s finding that ERISA pre-empted the state 14 law claims, and if anything, the Ninth Circuit’s reasoning only supports the conclusions 15 herein, because the Ninth Circuit’s finding of no preemption was based on its 16 conclusion that the claims against Alight do not have a “reference to or connection with” 17 an ERISA plan. Bafford v. Northrop Grumman Corp., 994 F.3d 1020, 1032 (9th Cir. 18 2021). 19 For these reasons, assuming the Court possesses supplemental jurisdiction over 20 the claims against Alight in the first instance, it nevertheless declines to exercise 21 supplemental jurisdiction. 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 ///

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1 Vv. CONCLUSION 2 For the foregoing reasons, the Court finds no basis for exercising subject matter 3 jurisdiction over the claims asserted against Alight. The Court accordingly 4 DISMISSES the claims against Alight WITHOUT PREJUDICE. Alight’s Motion to 5 Dismiss is correspondingly DENIED AS MOOT. (ECF No. 85.) Defendant Alight is 6 DISMISSED from this case. 10 April 4, 2022 N . 1 ae 12 Meike |

3 OTIS D. GHT, II 4 UNITED STATES DISTRICT JUDGE

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