IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
July 22, 2011
MONTRY MCNALLY; RUBY BELL; AND KENNETH BALES, PLAINTIFFS,
PLAN, GWEN BROWN, AN INDIVIDUAL, AND DOES 1 THROUGH 50,
ORDER FOR SUPPLEMENTAL BRIEFING
AND VACATING PRETRIAL CONFERENCE AND TRIAL
EYE DOG FOUNDATION FOR THE
DATES BLIND, INC., EYE DOG
FOUNDATION PROFIT SHARING
In addition to claims brought under ERISA, Plaintiffs bring claims under California law for (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) fraud; (4); negligent misrepresentation; (5) violation of Business and Professions Code § 17200; and (6) intentional infliction of emotional distress.
While the parties have not addressed the issue, it appears to the Court that Plaintiffs' state law claims may be preempted under ERISA. ERISA § 514(a) preempts a state law claim if it "relates to" an employee benefit plan. See 29 U.S.C. § 1144(a). "In determining whether a state law relates to ERISA, a court must evaluate whether the state law 'has a connection with or reference to' employee benefit plans." Bast v. Prudential Ins. Co. of Am., 150 F.3d 1003, 1007 (9th Cir. 1998) (citation omitted).
"In evaluating whether a common law claim has 'reference to' a plan governed by ERISA, the focus is whether the claim is premised on the existence of an ERISA plan, and whether the existence of the plan is essential to the claim's survival. If so, a sufficient 'reference' exists to support preemption." Providence Health Plan v. McDowell, 385 F.3d 1168, 1172 (9th Cir. 2004) (citations omitted). "In determining whether a claim has a 'connection with' an employee benefit plan, courts in this circuit use a relationship test. Specifically, the emphasis is on the genuine impact that the action has on a relationship governed by ERISA, such as the relationship between the plan and a participant." Id. (citations omitted). Stated another way, where "the existence of [an ERISA] plan is a critical factor in establishing liability" under a state cause of action, the state law claim is preempted. Wise v. Verizon Commc'ns, Inc., 600 F.3d 1180, 1190 (9th Cir. 2010) (citation omitted). ERISA's preemption provision functions "even when the state action purport[s] to authorize a remedy unavailable under the federal provision." Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 144 (1990).
Accordingly, IT IS HEREBY ORDERED:
1. Within fourteen (14) days from the date of this order, the parties shall file supplemental briefing on the issue of whether Plaintiffs' state law claims are preempted under ERISA;
2. The parties may file a reply brief within seven (7) days of the filing of the opposing parties' brief; and
3. The August 5, 2011 Pretrial Conference and August 23, 2011 Trial dates are VACATED. The Court will set new dates for the Pretrial Conference and Trial after the Court issues a ruling on Plaintiffs' motion for summary judgment.
IT IS SO ORDERED.
CHIEF UNITED STATES DISTRICT JUDGE
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