United States District Court, N.D. California
BRUCE E. WILSON, Plaintiff,
BANK OF AMERICA PENSION PLAN FOR LEGACY COMPANIES, et al., Defendants.
ORDER RE: MOTION FOR RECONSIDERATION AND PARTIAL
MOTION TO DISMISS SECOND AMENDED COMPLAINT RE: DKT. NOS. 50,
S. HIXSON, UNITED STATES MAGISTRATE JUDGE
case concerns a dispute over pension benefits Plaintiff Bruce
E. Wilson accrued while working for Bank of America
(“BOA”) from 1972 to 1988 and from 1999 to 2000.
In its order granting in part and denying in part
Fidelity’s first motion to dismiss, the Court denied
the motion with respect to the question of whether
Wilson’s state-law tort claims are preempted by ERISA.
ECF No. 33. Fidelity now asks the Court to reconsider its
findings on that issue. ECF No. 50. Wilson filed an
Opposition to the Motion for Reconsideration (ECF No. 58) and
Fidelity filed its Reply (ECF No. 60). For the reasons set
forth below, the Court GRANTS
Fidelity’s Motion for Reconsideration, and upon
reconsideration, GRANTS dismissal of
Wilsonâs state-law claims, claims five and six, on preemption
pending before the Court is Defendants’ Partial Motion
to Dismiss the Second Amended Complaint (“SAC”)
pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No.
51. Wilson filed an Opposition to that motion (ECF No. 59)
and Defendants filed a Reply (ECF No. 61). The Court finds
this matter suitable for disposition without oral argument
and VACATES the September 26, 2019 hearing.
See Civ. L.R. 7-1. The Court GRANTS
the motion to dismiss and dismisses claims two, three, and
request for judicial notice relevant to its motion to dismiss
is also before the Court. ECF Nos. 55. The request is
unopposed. The Court GRANTS the request.
order addressing Fidelity’s first motion to dismiss
(ECF No. 33) the Court detailed the background facts in this
case. The Court assumes familiarity with those facts and will
not repeat the full discussion here. Broadly, though, this
case concerns a dispute over pension benefit amounts Wilson
accrued under the Bank of America Pension Plan for Legacy
Companies (the “Plan”) while employed by BOA and
its predecessor. Central to that dispute is Wilson’s
allegation that Fidelity, while contracted with Plan
fiduciaries, provided Wilson Plan pension estimates that were
grossly exaggerated and inaccurate. Wilson brought against
Fidelity an ERISA claim for breach of fiduciary duty and two
state-law claims of professional negligence and negligent
misrepresentation. In its first motion to dismiss Fidelity
argued that the state-law claims were preempted by ERISA. The
Court found they were not. It did, however, dismiss with
leave to amend Wilson’s ERISA claim against Fidelity
and his negligent misrepresentation claim, though on
different grounds. In a second order the same day (ECF No.
34), the Court addressed a motion to dismiss filed by the
other Defendants (ECF No. 21) and dismissed with leave to
amend Wilson’s second and fourth claims for ERISA
filed a motion for leave to file a motion for reconsideration
on July 18, 2019, and the Court granted Fidelity leave to
file its motion, which it did August 9, 2019. The Motion for
Reconsideration is limited to the question of whether
Wilson’s professional negligence claim can survive
filed his SAC on July 19, 2019 asserting the same claims
against the same parties as in his First Amended Complaint
(“FAC”). Defendants together filed a motion to
dismiss claims two, three, four and six in the SAC on August
9, 2019, which Wilson has opposed.
courts have inherent power to reconsider, set aside, or amend
interlocutory orders at any time prior to entry of a final
judgment. Fed.R.Civ.P. 54(b). Motions for reconsideration are
disfavored and “should not be granted, absent highly
unusual circumstances, unless the district court is presented
with newly discovered evidence, committed clear error, or if
there is an intervening change in the controlling law.”
McDowell v. Calderon, 197 F.3d 1253, 1254 (9th Cir.
1999) (per curiam) (internal quotation and citation omitted).
Furthermore, “[a] motion for reconsideration ‘may
not be used to raise arguments or present evidence
for the first time when they could reasonably have been
raised earlier in the litigation.’” Marlyn
Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571
F.3d 873, 880 (9th Cir. 2009) (quoting Kona Enters., Inc.
v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000)).
Northern District of California has local rules governing
motions for reconsideration. Under Civil Local Rule 7-9, a
party must seek leave to file a motion for reconsideration
before judgment has been entered. Civ. L.R. 7-9(a). A motion
for reconsideration may be made on three grounds: (1) a
material difference in fact or law exists from that which was
presented to the court, which, in the exercise of reasonable
diligence, the moving party did not know at the time of the
order for which reconsideration is sought; (2) the emergence
of new material facts or a change of law; or (3) a manifest
failure by the court to consider material facts or
dispositive legal arguments. Civ. L.R. 7-9(b). The moving
party may not reargue any written or oral argument previously
asserted to the court. Civ. L.R. 7-9(c).
motion to dismiss under Rule 12(b)(6) tests the legal
sufficiency of claims alleged in the complaint.
Conservation Force v. Salazar, 646 F.3d 1240,
1241-42 (9th Cir. 2011) (citing Fed.R.Civ.P. 12(b)(6)). A
complaint must contain a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). Thus, to survive a Rule
12(b)(6) motion to dismiss, a complaint must plead
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). Plausibility does not
mean probability, but it requires “more than a sheer
possibility that a defendant has acted unlawfully.”
Ashcroft v. Iqbal, 556 U.S. 662, 687 (2009). A
complaint must provide a defendant with “fair
notice” of the claims against it and the grounds for
relief. Twombly, 550 U.S. at 555 (quotation marks
and citation omitted); Fed.R.Civ.P. 8(a)(2) (A complaint must
contain a “short and plain statement of the claim
showing that the pleader is entitled to relief.”). In
considering a motion to dismiss, the court accepts factual
allegations in the complaint as true and construes the
pleadings in the light most favorable to the nonmoving party.
Manzarek v. St. Paul Fire & Marine Ins. Co., 519
F.3d 1025, 1031 (9th Cir. 2008); Erickson v. Pardus,
551 U.S. 89, 93-94 (2007). However, “the tenet that a
court must accept a complaint’s allegations as true is
inapplicable to threadbare recitals of a cause of
action’s elements, supported by mere conclusory
statements.” Iqbal, 556 U.S. at 678.
Rule 12(b)(6) motion is granted, the “court should
grant leave to amend even if no request to amend the pleading
was made, unless it determines that the pleading could not
possibly be cured by the allegation of other facts.”
Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000)
(en banc) (citations and quotations omitted). However, the
Court may deny leave to amend for several reasons, including
“undue delay, bad faith or dilatory motive on the part
of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment, [and]
futility of amendment.” Eminence Capital, LLC v.
Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003)
(citing Foman v. Davis, 371 U.S. 178, 182 (1962)).
FIDELITY’S REQUEST FOR JUDICIAL NOTICE
request the Court take judicial notice of a portion of a
public record, to wit, a portion of the official court files
of the Los Angeles Superior Court in the matter of In re
Marriage of Bruce E. Wilson and Sheila Wilson, the
records from divorce proceedings to which Wilson was a party.
Wilson does not oppose the request.
Federal Rule of Evidence 201(b), the Court “may
judicially notice a fact that is not subject to reasonable
dispute because it . . . can be accurately and readily
determined from sources whose accuracy cannot reasonably be
questioned.” F.R.E. 201(b). The Court grants judicial
notice of these records, as they are records from a state
agency that are not subject to reasonable dispute. Parker
v. Dean Transp., Inc., 2013 U.S. Dist. LEXIS 184386, *10
(C.D. Cal. Oct. 15, 2013) (“[Defendants] ask the Court
to judicially notice the state court records from
Plaintiff[’s] divorce proceedings . . . . The Court
grants judicial notice as they are records from a state
agency, which are capable of accurate and ready determination
within the meaning of Rule 201(b)”).
FIDELITY’S MOTION FOR RECONSIDERATION
order addressing Fidelity’s first motion to dismiss,
the Court based its ERISA preemption holding on Paulsen
v. CNF, Inc., 559 F.3d 1061 (9th Cir. 2009), which it
found controlling on the issue of whether Wilson’s
state-law claims were preempted. Fidelity argues that the
Court failed to recognize the ways in which Paulsen
is distinguishable from this case. It points to Wise v
Verizon Comms., Inc., 600 F.3d 1180, 1190 (9th Cir.
2010), a case where the Ninth Circuit found ERISA preemption
of various state-law claims, as being more analogous to this
case. It argues that Paulsen has been
recognized by courts within this Circuit as fact-specific and
as not articulating broad principals against preemption. It
cites to several decisions post-Paulsen in which
state-law negligence claims were held preempted by ERISA and
argues those cases are more like this matter. The Court
recognizes now that it may have overlooked certain relevant
caselaw and accordingly will reconsider the preemption issue.
Court discussed in its earlier order, ERISA preemption can be
predicated on either an impermissible “connection
with” or “reference” to an ERISA-covered
plan. In Paulsen, the Ninth Circuit found that the
plaintiff’s professional negligence claims had no
forbidden “reference to” an ERISA plan because
the claims were “based on common law negligence
principles and California Civil Code §§ 1708 and
1714(a).” Those laws, the court wrote, “do not
act ‘immediately and exclusively’ on ERISA plans,
and the existence of an ERISA plan is not essential to those
laws’ operation.” 559 F.3d at 1082. That finding
was essential to this Court’s holding that
Wilson’s claims were not preempted by a forbidden
‘reference to’ Wilson’s pension Plan.
However, as Fidelity points out, not long after
Paulsen (and before) the Ninth Circuit said of the
‘reference to’ inquiry that “[s]tated
another way,” it means that “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, 600
F.3d at 1190 (citing Ingersoll-Rand Co. v.
McClendon, 498 U.S. 133, 136, 139-140 (1990)). It added,
“ERISA’s preemption provision functions
‘even when the state action purports to authorize a
remedy unavailable under the federal provision.’”
Wise, 600 F.3d at 1190 (quoting Ingersoll,
498 U.S. at 144). The Ninth Circuit found the
plaintiff’s state-law claims were preempted because her
complaint “necessarily reference[d]” an ERISA
plan. “The state law theories of fraud,
misrepresentation, and negligence all depend on the existence
of an ERISA-covered plan to demonstrate that Wise suffered
damages: the loss of insurance benefits.” Id.
Wise, it is clearer that Wilson’s professional
negligence and negligent misrepresentation claims are
preempted. The basis of those claims is that Fidelity
allegedly produced Plan pension benefit estimates with
grossly inaccurate benefits accrual information, and that
Wilson’s reliance on that information caused him harm.
While neither professional negligence nor negligent
misrepresentation act immediately or exclusively upon ERISA
plans- they are common law torts-the success of
Wilson’s claims depends on the existence of an
ERISA-covered plan. See, e.g., Reichert v. Time
Inc., 2011 U.S. Dist. LEXIS 127398, *13 (N.D. Cal. Nov.
3, 2011) (“At the root of this claim is the allegation
that Fidelity’s inaccurate estimates related to the
Plan, and for this reason plaintiffs claim for professional
negligence is preempted by ERISA.”). If Wilson had
received the pension benefits Fidelity’s estimates told
him he would get, he would not be suing. Put another way, but
for the dispute over benefits under the Plan, Wilson would
have no state-law claims to bring. See, e.g.,
Josef K. v. Cal. Physicians’ Serv., 2019 U.S.
Dist. LEXIS 92730, *9 (N.D. Cal. June 3, 2019) (“[T]he
FAC alleges that Maximus violated these state laws in the
course of its review of plaintiffs’ ERISA plan. . . .
[B]ut for the . . . ERISA plan, plaintiffs would not have
suffered the harm alleged with respect to the interference
with contract claim.”); Pizza v. Fin. Indus.
Regulatory Auth., 2013 U.S. Dist. LEXIS 64521, *10-11
(N.D. Cal. May 6, 2013) (plaintiff’s fraud claims
preempted because they “‘relate[d] to’ an
ERISA plan, as the alleged misrepresentation pertains ...