McClean v. Solano/Napa Counties Electrical Workers Profit Sharing Plan

Background

This Employee Retirement Income Security Act (ERISA) benefits action involved two motions to dismiss, one filed by the Local 180 Defendants and one filed by the Local 6 Defendants. Each group also requested that the court take judicial notice of submitted materials.

The court had previously dismissed claims two through six against the Local 180 Defendants. Those claims alleged various breaches of fiduciary duty, including failures of loyalty, prudence, and compliance with plan documents; failure to maintain and provide records; failure to monitor; and co-fiduciary liability. The court had explained that the complaint grouped different legal theories and alleged misconduct together without identifying which facts supported which fiduciary duty. It also found that the allegations did not plausibly show self-dealing, a breach of the duty of prudence, or a violation of plan documents. The allegations invoking ERISA’s notice-and-review provision did not clarify what conduct was actionable or whether the provision was asserted as an independent claim.

Local 180 Defendants

The second amended complaint continued to organize the claims by the parties sued and the remedies sought rather than by specific alleged misconduct. The court found that claims two through six remained insufficiently pleaded.

The court separately considered the allegations that an unknown person or persons had taken approximately $200,000 from McClean’s plan account through allegedly unauthorized hardship-withdrawal requests. The Local 180 Defendants submitted account records reflecting distributions and a 2011 statement showing a zero balance. In opposing dismissal, McClean stated that he had made some hardship withdrawals years earlier and had later forgotten about the plan, while disputing other signatures, handwriting, and identifying information on the withdrawal documents. The court found that these allegations did not plausibly state a theft claim as pleaded. It stated that any renewed version would need to identify which withdrawals McClean made and which were allegedly unauthorized.

Because claims four and five—failure to monitor and co-fiduciary liability—were derivative of the underlying fiduciary-duty claims, the court dismissed them as well. Claims two through six were DISMISSED WITHOUT LEAVE TO AMEND. The court did not reach arguments about whether Mrs. McClean could assert the claims, whether the claims were time-barred, or whether the materials submitted with the Local 180 Defendants’ request for judicial notice were properly before the court. The court therefore DENIED AS MOOT that request for judicial notice.

Local 6 Defendants

The only claim asserted against the Local 6 Defendants was for breach of fiduciary duty based on failure to maintain and provide records. The court had previously dismissed that claim because McClean had not plausibly alleged that he was a participant or beneficiary of the Local 6 Pension Plan, which ERISA requires for the type of relief he sought.

In the second amended complaint, McClean alleged that he had performed work within the jurisdiction of International Brotherhood of Electrical Workers Local 6, that employers had sent pension contributions to the Local 6 Pension Plan, and that he had completed paperwork for those contributions and related service credits to be transferred to the Local 180 Pension Plan. The Local 180 Plan allegedly had no record of receiving the contributions. The court concluded that these allegations made any current entitlement to benefits from Local 6 implausible because McClean alleged that the contributions and service credits should have been transferred to Local 180. The court also found that allegations concerning assurances from a Local 6 trustee about non-forfeited service credits did not change that conclusion.

The court GRANTED the Local 6 Defendants’ motion to dismiss WITHOUT LEAVE TO AMEND without reaching their remaining arguments. It DENIED AS MOOT the Local 6 Defendants’ request for judicial notice because the claim failed independently of the submitted materials.

Ruling

Judge Araceli Martinez-Olguin dismissed claims two through six against the Local 180 Defendants without leave to amend, granted the Local 6 Defendants’ motion to dismiss without leave to amend, and denied both judicial-notice requests as moot.