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Pierce v. Wells Fargo Bank

July 18, 2008


The opinion of the court was delivered by: Jeremy Fogel United States District Judge


Plaintiff Patrick Pierce ("Pierce") originally filed the instant action in the Santa Clara Superior Court seeking severance benefits that his former employers, Greater Bay Bancorp ("GBB") and Wells Fargo Bank ("WFB"), allegedly promised but failed to provide.*fn2 The case was removed to this Court on March 20, 2008. On March 27, 2008, WFB filed the instant motion to dismiss. On April 4, 2008, Pierce filed the instant motion to remand the case to the superior court. For the reasons set forth below, the motion to remand will be denied, and the motion to dismiss will be granted with leave to amend his complaint in a manner consistent with this order.


Pierce alleges the following: GBB first hired Pierce in 1999, and by early 2007 Pierce held the position of Senior Vice President and Director of Special Assets. On or about May 4, 2007, GBB and WFB announced a merger agreement in which WFB would acquire GBB. Shortly thereafter, GBB replaced its existing "Change of Control Plan" with a modified program (hereinafter "the CIC Program" or "the Plan") that would provide severance benefits to any employee who was terminated or denied a comparable position as a result of the merger.*fn3 The CIC Program defined "comparable position" as one that provided the same base salary rate as the employee's prior position and did not require the employee to increase his commute by more than thirty-five miles each way. Pierce understood the CIC Program to grant severance benefits after the merger regardless of whether or not an employee took a full-time position with WFB.

Pierce alleges that on June 22, 2007, September 10, 2007, and at other times before the merger went into effect, GBB and WFB promised and represented that if he would continue to work for WFB after the merger, he: (a) would not be forced to take a position that he did not want; and (b) would be entitled to severance benefits under GBB's CIC Program if he elected not to take a full time position at WFB. Pierce alleges that acting in reliance on these promises, as well as the expectation that he would receive severance benefits if he declined to work for WFB, he did not pursue other employment opportunities and continued to work for GBB.

The merger took effect on October 1, 2007. WFB claims that it met repeatedly with Pierce to discuss a position at WFB after the merger, but that at each meeting Pierce stated that he had no desire to work for WFB. WFB also claims that it formally offered Pierce a comparable, full-time position on November 1, 2007, but that instead Pierce accepted a temporary position. In a series of letters to WFB management during the fall of 2007, Pierce asserted that his post-merger position was not of comparable status and that he was entitled to severance benefits under the CIC Program.

In a letter to Plan Committee members dated February 4, 2008, Pierce formally requested benefits under the CIC Program. On the same day, he filed the present action in the superior court seeking relief against WFB and GBB for breach of contract, promissory estoppel, fraud and negligent misrepresentation. Pierce's claim for benefits was denied by the Plan Administrator on April 24, 2008. The Plan Administrator explained that Pierce had been neither actually nor constructively terminated by the merger and thus was not eligible for benefits. Pierce resigned from WFB on March 24, 2008.

On March 20, 2008, WFB removed the present action to this Court on the basis of federal question jurisdiction, asserting that the case is governed by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001, et seq.


A. Removal

Pursuant to 28 U.S.C. § 1441(a), a defendant may remove an action to federal court if the plaintiff initially could have filed the action in federal court. See Ethridge v. Harbor House Restaurant, 861 F.2d 1389, 1393 (9th Cir. 1988). A party may file an action in federal court if there is diversity of citizenship among the parties or if the action raises a substantial federal question. Ethridge, 861 F.2d at 1393. The party invoking the removal statute bears the burden of establishing federal jurisdiction. Id. The removal statute is strictly construed against removal. Id. The matter therefore should be remanded if there is any doubt as to the existence of federal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

In order to evaluate the instant remand motion, the Court must resolve the "question of whether a party may assert a claim under ERISA" in this case. Miller v. Rite Aid Corp., 504 F.3d 1102, 1105 (9th Cir. 2007). The ERISA statute defines an "employee benefit plan" as one established by an employer for the purpose of providing employees with severance benefits and other insurances. 29 U.S.C. § 1002(1). Pierce does not challenge WFB's assertion that the CIC Program qualifies as an ERISA plan. In his complaint, Pierce states that the CIC Program was established to provide "severance benefits for eligible employees of GBB whose employment terminated [sic] in connection with the merger, or who were constructively terminated by not being offered comparable positions with WFB." Complaint ¶ 6.

However, the parties dispute whether Pierce qualifies as a beneficiary of or participant in the Plan. The ERISA statute defines "participant" in an ERISA plan as follows:

The term 'participant' means any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit. 29 U.S.C.A. § 1002(7). The Supreme Court has interpreted this language to include an employee currently in a covered position or one who has a "'colorable claim' to vested benefits" in that "(1) he or she will prevail in a suit for benefits, or that (2) eligibility requirements will be fulfilled in the future." Firestone Tire & Rubber Co. v. Brunch, 489 U.S. 101, 117-18 (1989) (internal citations omitted). ...

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