Summary
In Paulsen v. CNF, Inc., No. C 03-03960 JW, 2003 WL 22971080, *3-4 (N.D.Cal. Nov. 24, 2003), the court held that the Plan's trustee (PBGC) had the sole power to bring a lawsuit on behalf of the plan to recover plan assets, not the individual beneficiaries of a class of beneficiaries.
Summary of this case from Naimoli v. Anchor Glass Container CorporationOpinion
NO. C 03-03960 JW
November 24, 2003
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
I. INTRODUCTION
This case involves claims subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). Named Plaintiffs are six former managers and officers with either CNF, Inc. ("CNF") or a separate entity, Consolidated Freightways Corp. ("CFC"). Plaintiff Thomas A. Paulsen retired from CFC in September 2002, after serving as President and Chief Operating Officer of CFC. Plaintiff Robert M. Bowden retired from CFC in December 1999, after serving as Manager of Pricing Services for CFC. Plaintiff Edward L. Frazee retired in July 1995 after 29 years of service with CNF entities. Plaintiff Chester Madison retired in August 2002, serving as Group Operations Manager at the time of his retirement. Plaintiff Robert Newell retired on December 31, 2000, serving as Vice-President of Pricing at the time of his retirement. Plaintiff Lloyd Michael O'Connell III retired in June 2001, serving as Northern California Division Manager for CFC.
Defendant CNF is supply chain management company that provides transportation services. Defendant CNF Service Company, Inc. is a wholly-owned subsidiary of CNF. Defendant Administrative Committee of the Consolidated Freightways Corporation Pension Plan ("Plan Committee") is alleged to be an entity constituted by the terms of the CFC Plan, pursuant to which the Plan Committee is the Plan Administrator of the Plan. Defendants Stephen D. Richards, James R. Tener, and Robert E. Wrightson (collectively, "Individual Defendants") were allegedly the CFC officers, who served as members of the Plan Committee and exercised the authority conferred on the Committee by the Plan. Plaintiff refers to Defendants CNF, CNF Service Co., Administrative Committee, Richards, Tener, and Wrightson collectively as "Fiduciary Defendants." Defendant Towers, Perrin, Forester Crosby, Inc. ("Towers"), provided actuarial valuation services to the CNF Plan and the CFC Plan.
II. FACTS
In December 1996, CNF made a business decision to spinoff CFC, a stand-alone trucking company. As part of the spinoff, a separate benefits plan was established pursuant to ERISA, the CFC Plan. CNF and CNF Service Company contend that they had no duty to the CFC Plan or its participants after the spinoff. CNF explains that from 1997 through 2002 CFC made no contributions to the CFC Plan, while CFC added significant liabilities favoring its highly compensated employees. See CNF Opposition, p. 3 (citing Complaint ¶¶ 48, 50-51, 54-55). CNF and CNF Service Company explain that one possible reason for the bankruptcy of the CFC Plan was failure of CFC to adequately fund the CFC Plan after CFC added additional benefits to its highly compensated employees. In addition, CNF and CNF Service Company explain that factors occurred in the world that had an impact on the CFC Plan, such as, the United States experiencing the most serious stock market decline since the Great Depression and the tragic events of September 11, 2001, which caused a significant impact on CFC's business sector, the transportation industry. Id. at p. 3.
Defendants state that the Plaintiff Paulsen was acting as President and Chief Operating Officer of CFC, the company he is now accusing of breaching its fiduciary duty, until September 2002, the month in which CFC filed for protection under Chapter 11 of the Bankruptcy Code. In January 2003, CFC informed Plan participants that the CFC Plan would not have sufficient funds to pay all vested accrued benefits to all participants and beneficiaries upon CFC Plan termination. In January 2003, CFC informed Plan participants that it estimated that approximately 8% of current retirees would have their benefit amounts reduced under the PBGC's maximum monthly benefit limits. Complaint ¶ 60. The CFC Plan was terminated pursuant to ERISA guidelines. In June 2003, PBGC assumed responsibility for administering the new Plan. As of June 2003, PBGC is the bankruptcy trustee of the PBGC Plan. A new plan was established after the CFC Plan terminated that the Court will refer to as the PBGC Plan. Plaintiffs brought their claims in this lawsuit after PBGC took over the CFC Plan as trustee in bankruptcy and significantly reduced the Plaintiffs' benefits they were receiving under the PBGC Plan. Plaintiffs seek class certification for the approximately eight percent of PBGC Plan Participants that had their benefits reduced by PBGC under ERISA guidelines.
Plaintiffs' Complaint alleges seven claims against the Defendants. Plaintiffs allege that the Fiduciary Defendants breached their fiduciary duties in the following ways: Claim One, regarding their acts and omissions pertaining to the plan spinoff; Claim Three, regarding their ongoing administration of the CFC Plan; Claim Four, regarding the funding policy of the CFC Plan; and Claim Five, regarding failure to notify participants of their benefit obligations to the CFC Plan. Claim Two alleges a breach of fiduciary duty by CNF regarding an alleged breach of loyalty to the CNF plan participants.
Presently before the Court are two motions to dismiss. Defendants CNF and CNF Service Company bring a Motion to Dismiss Plaintiffs' entire Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
Defendant Towers filed a Motion to Dismiss Plaintiffs' Sixth and Seventh Claims that are asserted only against Towers. Plaintiffs' Sixth Claim alleges that while performing actuarial services Towers committed professional negligence in valuing CFC Plan obligations at Spinoff. Plaintiffs' Seventh Claim alleges that Towers committed professional negligence in valuing CFC Plan from 1997 through 2001. In both claims, Plaintiffs assert that Towers, acting as an actuary performing professional services, owes a duty of care to the intended beneficiaries. Plaintiffs base both of these state law claims on California Law.
III. STANDARDS
A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, tests the legal sufficiency of a claim. Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). In ruling on a motion to dismiss, the court must accept as true all allegations of material fact and must construe said allegations in the light most favorable to the non-moving party. Western Reserve Oil Gas Co. v. New, 765 F.2d 1428, 1430 (9th Cir. 1985). Any existing ambiguities must be resolved in favor of the pleading. Walling v. Beverly Enterprises, 476 F.2d 393, 396 (9th Cir. 1973).
A complaint maybe dismissed as a matter of law for two reasons: (1) lack of a cognizable legal theory or (2) insufficient facts stated under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir. 1984). In order to grant a motion to dismiss, it must appear to a certainty that a plaintiff would not be entitled to relief under any set of facts that could be proved. Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
IV. DISCUSSION
A. ERISA Claims Against Alleged Fiduciaries — Claims One through Five
Plaintiff asserts seven claims against the Defendants. Defendants contend that Plaintiffs lack standing under the plan termination process Congress provided for in ERISA, which grants PBGC, as the current PBGC Plan bankruptcy trustee, sole and exclusive authority to marshal the PBGC Plan assets. Plaintiffs respond that 29 U.S.C. § 1342(d)(1)(B) provides that a court-appointed trustee of a terminated ERISA plan "shall have the power . . . (iv) to commence, prosecute, or defend on behalf of the plan any suit or proceeding involving the plan." Plaintiffs' Sur-Reply, p. 2, line 11-12 (citing 29 U.S.C. § 1342(d)(1)(B)(iv)). Plaintiffs assert that "power" is not synonymous with "sole and exclusive authority" as Defendants contend.
Plaintiffs, as ERISA plan participants, are subject to the general rule that trustees control all of the assets of a trust. See Restatement 2d on Trusts § 175 (trustee has exclusive control of assets). A trustee has the power to enforce trust claims. Restatement 2d on Trusts § 177 (trustee has duty to enforce trust claims). The Plaintiffs do not bring an action against PBGC for failure to pursue claims against the Defendants in this lawsuit. As such, Plaintiffs' claims against Towers, and the other Defendants are not ripe for adjudication. In other words, until PBGC fails to perform its fiduciary duties as trustee and Plaintiffs bring a claim against PBGC pursuant to § 502(a)(2); Plaintiffs lack standing under ERISA to bring claims against the Defendants.
The Court finds that Congress vested the power "to commence, prosecute, or defend on behalf of the plan any suit or proceeding involving the plan" with the trustee under § 1342(d)(1)(B)(iv), not the individual beneficiaries or a class of beneficiaries. This avoids a situation where some beneficiaries obtain a judgment against an alleged wrongdoer before other members of the class.
Lastly, Plaintiffs contend that PBGC operates under an inherent conflict of interest because of its dual roles as trustee and guarantor. Plaintiffs allege that PBGC's interest in preserving its own assets conflicts with what would otherwise be its fiduciary duty to maximize benefits to participants. Plaintiffs contend that PBGC's conflict arises out of its obligation to pay guaranteed (insured) benefits out its own assets to the extent that plan assets are insufficient to pay these benefits. See Plaintiffs' Sur-Reply, p. 3-4 (citing 29 U.S.C. § 1322(b)(3)).
Title 29 U.S.C. § 1322 addressing single-employer plan benefits guaranteed states in pertinent part that:
(a) Nonforfeitable benefits
Subject to the limitations contained in subsection (b) of this section, the corporation shall guarantee, in accordance with this section, the payment of all nonforfeitable benefits (other than benefits becoming nonforfeitable solely on account of the termination of a plan) under a single-employer plan which terminates at a time when this subchapter applies to it.
(b) Exceptions
(3) The amount of monthly benefits described in subsection (a) of this section provided by a plan, which are guaranteed under this section with respect to a participant, shall not have an actuarial value which exceeds the actuarial value of a monthly benefit in the form of a life annuity commencing at age 65 equal to the lesser of —
(A) his average monthly gross income from his employer during the 5 consecutive calendar year period (or, if less, during the number of calendar years in such period in which he actively participates in the plan) during which his gross income from that employer was greater than during any other such period with that employer determined by dividing 1/12 of the sum of all such gross income by the number of such calendar years in which he had such gross income, or
(B) $750 multiplied by a fraction, the numerator of which is the contribution and benefit base (determined under section 230 of the Social Security Act [ 42 U.S.C.A. § 430]) in effect at the time the plan terminates and the denominator of which is such contribution and benefit base in effect in calendar year 1974.
Plaintiffs contend that they and members of the proposed class have all had their benefits reduced as a result of the statutory limits on guaranteed benefits. For plans terminating in 2003, the PBGC guaranteed benefit is $3,664.77 per month for a single-life annuity commencing at age 65. See Plaintiffs' Sur-Reply, p. 4, (citing 29 C.F.R. Pt. 4011, App. B (maximum benefit amounts for plans terminating in 1995 though 2003)). Title 29 U.S.C. § 1344(a) establishes a priority system for allocation of plan assets. See Plaintiffs Sur-Reply, p. 4. Under the priority system, PBGC applies plan assets to benefits that it is required to pay, and only when those amounts are fully satisfied does it apply any amounts to non-guaranteed benefits. Id. Plaintiffs contend that plan participants interest lies in recovering non-guaranteed benefits because they are guaranteed the guaranteed benefits. Id.
Title 29 U.S.C. § 1344 states in pertinent part that:
(a) Order of priority of participants and beneficiaries
In the case of the termination of a single-employer plan, the plan administrator shall allocate the assets of the plan (available to provide benefits) among the participants and beneficiaries of the plan in the following order:
(1) First, to that portion of each individual's accrued benefit which is derived from the participant's contributions to the plan which were not mandatory contributions.
(2) Second, to that portion of each individual's accrued benefit which is derived from the participant's mandatory contributions.
The parties do not dispute that no PBGC Plan participant has suffered a loss as to his or her guaranteed benefits; the only loss is as to non-guaranteed benefits. Plaintiffs argue that PBGC has no incentive to seek to recover any amounts that would not be allocated to guaranteed benefits. Id. at p. 5. The Court disagrees. As stated previously, PBGC is the trustee of the CFC Plan. PBGC has the sole power to bring a lawsuit against the Defendants to recover trust assets. The Court finds that PBGC does not have a "conflict of interest." Like any Plaintiff to a lawsuit, PBGC must weigh the cost of litigation, against the likelihood of success on the merits of the lawsuit. Plaintiffs do not allege that they contacted PBGC and PBGC informed them that it would not to pursue a lawsuit against the named Defendants. Instead Plaintiffs contend that they served the Complaint in this lawsuit on the Secretary of Labor, who has ultimate responsibility for PBGC. The Court does not equate serving the Complaint on the Department of Labor as required under § 502(h) that does not name PBGC as a Defendant with a clear indication that PBGC will not pursue recovery of the alleged plan assets that allegedly should be recovered due to past alleged breaches of fiduciary duties. Moreover, Plaintiffs do not assert that PBGC breached its fiduciary duty by not filing a lawsuit against the alleged wrongdoers to recover trust assets.
In order to avoid a select group of plan participants usurping a potential benefit owed to all Plan Participants that obtain a non-guaranteed benefit, Congress has vested the sole power to initiate such lawsuits with PBGC. See 29 U.S.C. § 1342(d)(1)(B)(iv). For the reasons stated above, the Court grants CNF and CNF Service Company's Motion to Dismiss the entire complaint without prejudice as to all Defendants. The Court will now examine each Claim Separately to determine if an additional grounds for dismissing a particular claim exists.
B. Claim One
Plaintiffs first claim is against the alleged Fiduciary Defendants for a breach of fiduciary duty regarding their acts or omissions in not transferring sufficient funds at the inception of the CFC Plan. Title 29 U.S.C. § 1058 explains that in the event of a spin-off of assets and liabilities from a plan, each participant must receive a benefit immediately after the spin-off (if the plan then terminated), which is equal to or greater than the benefit he would have received immediately before the spin-off (if the plan had then terminated). See 29 U.S.C. § 1058.
On December 1996, CNF spun off its wholly owned subsidiary, CFC. As part of that spin-off, CNF transferred assets and liabilities from its ERISA defined benefit pension plan ("CNF Plan") to the defined benefit plan newly created by the independent CFC ("CFC Plan"). The CFC Plan remained properly funded for the next five years until 2002. The Court finds that CFC Plan Beneficiaries did obtain immediately after the spin-off a benefit that was equal to or greater than the benefit they would have received immediately before the spin-off in accordance with 29 U.S.C. § 1058. See Adams v. Ford Motor Co., 847 F. Supp. 1365 (E.D. Mich. 1994). Accordingly, the Court finds that there was no violation of a fiduciary duty by anyone regarding the creation of the CFC Plan. The Court grants CNF and CNF Service Company's Motion to Dismiss Plaintiffs' first claim with prejudice as to all Defendants.
C. Claim Against CNF — Claim Two
Plaintiffs allege in Count Two of their Complaint that CNF breached its fiduciary duty in violation of ERISA § 404(a)(1), 29 U.S.C. § 1104(a)(1). Plaintiffs contend that CNF breached its duty of loyalty to CNF Plan participants when it transferred them to the CFC Plan. CNF contends that Plaintiffs lack standing to sue them because CNF is not a fiduciary of the CFC Plan under 29 U.S.C. § 1002(21) as alleged by the Plaintiff. See Complaint ¶ 12. CNF contends that it never exercised any control with respect to the CFC Plan. Plaintiffs contend that they have standing to sue because CNF was in a fiduciary role to them when Plaintiffs were CNF Plan participants. Plaintiffs further contend that CNF was a fiduciary to the extent that CNF made an additional payment 30 days after the spinoff into the CFC Plan.
Title 29 U.S.C. § 1004(a) states in pertinent part that:
(1) Subject to sections 1103(c) and (d), 1342, and 1344 of this title, a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and —
(A) for the exclusive purpose of:
(I) providing benefits to participants and their beneficiaries; . . .
(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent [person] acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims. . . . 29 U.S.C. § 1104(a)(1) (emphasis added).
The fiduciary provisions of ERISA Title 1 are generally modeled on the common law of trusts, but there are several major exceptions. For the purposes of this case, the most significant ERISA deviation from the traditional trust law is the express statutory recognition that a company or its officers may serve as both plan fiduciaries and as company officers. Title 29 U.S.C. § 1108(c)(3), provides, "Nothing in section 1106 [which contains the ERISA conflict of interest provisions] shall be construed to prohibit any fiduciary from . . . serving as a fiduciary in addition to being an officer, employee, agent, or other representative of a party interest." 29 U.S.C. § 1108(c)(3).
In their Opposition, Plaintiffs allege that their Complaint explains that subsequent to implementing the spinoff decision, CNF exercised discretionary authority and, or in the alternative, control respecting the management of both Plans and, or in the alternative, disposition of the assets, not that the decision to spinoff CFC Plan was a fiduciary breach. See Opposition, p. 10, lines 3-7 (citing Complaint ¶¶ 12, 70). However, the Court does not find factual support for Plaintiffs' contention in their Complaint.
In Blaw Knox Retirement Income Plan v. White Consolidated Industries, Inc., 998 F.2d 1185 (3d Cir. 1993), the court held that an employer's decision to sell a group of unprofitable subsidiaries and their associated underfunded pensions plans was a corporate business decision outside the scope of ERISA's protected rules, and thus employer could not be held liable for an alleged breach of fiduciary duty in connection with sale. See id at 1190. However, the Court went on to explain that § 208 of ERISA imposes breach of fiduciary liability if the plan sponsor does not comply with the statutory funding obligations attendant upon a plan's merger, transfer or acquisition. See id at 1191 (citing 29 U.S.C. § 1058 (1982)). As previously mentioned, the Court finds that no Defendant violated § 208 of ERISA.
CNF made a business decision to create CFC. Creating CFC involved some employees of CNF being transferred to CFC. The Court finds that CNF made a business decision to create the CFC Plan that was a spinoff of the CNF Plan. The Court finds that CNF made a business decision to transfer appropriate CNF plan participants to the CFC Plan. The Court finds that CNF was acting in its corporate management role, and not in its role as plan administrator, with respect to the decision to transfer the pension plans. See Trenton v. Scott Paper Co., 832 F.2d 806, 809 (3d Cir. 1987) ("It defies common sense to suggest that a corporation must allow a retirement board to make personnel decisions such as determining which plants need fewer employees."), cert. denied, 485 U.S. 1022 (1988); Payonk v. HMW Indus., Inc., 883 F.2d 221, 227 (3d Cir. 1989) ("[T]he decision to terminate the HMW plan could only have been made and effectuated by HMW in its role as employer. No other party, including . . . HMW as administrator, had the authority to make that decision.").
CNF's compliance with ERISA's provisions for the funding of merged, transferred or acquired pension plans as set forth in 29 U.S.C. § 1058 precludes a finding that a fiduciary breach has occurred. See United Steelworkers of Am., Local 2116v. Cyclops Corp., 860 F.2d 189, 198-99 (6th Cir. 1988); Payonk, 883 F.2d at 227. For the reasons stated above, the Court grants CNF's Motion to Dismiss Claim Two with prejudice.
D. Claims Against CNF and CNF Service Company
Plaintiffs assert Claims One, Three, Four, and Five against CNF and CNF Service Company. CNF and CNF Service Company contend that all these claims including Claim Two against CNF are time barred by ERISA's applicable statute of limitations. On December 2, 1996 the CFC Plan was created. Over six years later, Plaintiffs assert claims against CNF and CNF Service Company.
1. Claim Three
Plaintiffs allege in Count Three of their Complaint that the Alleged Fiduciary Defendants breached their fiduciary duty as to the ongoing administration of the CFC Plan in violation of ERISA § 404(a)(1), 29 U.S.C. § 1104(a)(1). As previously stated, CNF is not a fiduciary of the CFC Plan. As a subsidiary of CNF and based on CNF Service Company's actions, the Court finds that CNF is also not a fiduciary of the CFC Plan. See Arizona State Carpenters Pension Trust Fund v. Citibank, (Arizona), 125 F.3d 715, 722 (9th Cir. 1997) (holding that provider of only ministerial duties on behalf of a plan was not a fiduciary with respect to that plan); Kyle Rys., Inc. v. Pacific Admin. Serv., Inc., 990 F.2d 513, 516-18 (9th Cir. 1993); see also 29 C.F.R. § 2509.75-8 (interpretive bulletin that articulates the distinction between discretionary functions, which are fiduciary in nature, and ministerial functions, which do not make the service provider a fiduciary). The Court grants CNF and CNF Service Company's Motion to Dismiss with prejudice Claim Three with respect to CNF and CNF Service Company. The Court does not make any determination with respect to the other alleged Fiduciary Defendants or whether they are indeed even fiduciaries.
2. Claim Four
Plaintiffs allege in Count Four of their Complaint that the Alleged Fiduciary Defendants breached their fiduciary duty by failing to establish and, or in the alternative, to follow funding policy in violation of ERISA §§ 404(a)(1), 405, 409, and 502(a). For the reasons stated above, the Court finds that CNF and CNF Service Company did not have a fiduciary duty to the CFC Plan participants with respect to following a funding policy. Even if CNF and CNF Service Company are construed as fiduciaries their obligations with the respect to the spinoff are defined by ERISA § 208. As previously determined, CNF and CNF Service Company, as well as the other Defendants, complied with their obligations under ERISA § 208. The Court grants CNF and CNF Service Company's Motion to Dismiss Claim Four with prejudice with respect to these two Defendants. The Court does not make any determination with respect to the other alleged Fiduciary Defendants or whether they are indeed even fiduciaries.
3. Claim Five
Plaintiffs allege in Count Five of their Complaint that the Alleged Fiduciary Defendants breached their fiduciary duty by failing to properly notify CNF Plan participants that were transferred to the CFC Plan participants and beneficiaries, in connection with the spinoff, that their benefits were also transferred. Complaint ¶ 92-93 (Claim Five Heading). At oral argument, Plaintiffs clarified that Claim Five is directed at the lack of notification during the spinoff in December 1996 not the CFC plan termination in 2003. The Complaint ambiguously alleges that the lack of notification caused the Plaintiffs to suffer some injury. At oral argument, Plaintiffs explained that they were not aware of Defendants breaches of their fiduciary duties until the Plaintiffs' benefits were decreased in 2003. In Claim Five, Plaintiffs rely on 29 U.S.C. § 1022(a) and § 1022(b) to establish that the "plan administrator" has a fiduciary duty to the Plaintiffs. Sections 1022(a) and 1022(b) explain the notification requirements of a plan administrator. Plaintiffs' contend that Defendant Administrative Committee of the Consolidated Freightways Corporation Pension Plan ("Plan Committee") is alleged to be an entity constituted by the terms of the CFC Plan, pursuant to which the Plan Committee is the Plan Administrator of the CFC Plan. See Complaint ¶ 14. However, Plaintiffs do not allege nor does the Court find support in the Complaint or other papers filed with the Court that either CNF or CNF Service Company were the `Plan Administrator' of the CNF Plan. The Plaintiffs' Complaint only identifies Consolidated Freightways Corporation Pension Plan as the CFC Plan Administrator, but Claim Five deals only with an alleged breach of fiduciary duty of the CNF Plan Administrator. Based upon the moving papers and the facts alleged in the Complaint, the Court finds that Plaintiffs have not properly named any Defendant that has any responsibility to notify the plan participants transferred from the CNF Plan and the CFC Plan.
Title 29 U.S.C. § 1022 states that:
(a) A summary plan description of any employee benefit plan shall be furnished to participants and beneficiaries as provided in section 1024(b) of this title. The summary plan description shall include the information described in subsection (b) of this section, shall be written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan. A summary of any material modification in the terms of the plan and any change in the information required under subsection (b) of this section shall be written in a manner calculated to be understood by the average plan participant and shall be furnished in accordance with section 1024(b)(1) of this title.
(b) The summary plan description shall contain the following information: The name and type of administration of the plan; in the case of a group health plan (as defined in section 1191b(a)(1) of this title), whether a health insurance issuer (as defined in section 1191b(b)(2) of this title) is responsible for the financing or administration (including payment of claims) of the plan and (if so) the name and address of such issuer; the name and address of the person designated as agent for the service of legal process, if such person is not the administrator; the name and address of the administrator; names, titles, and addresses of any trustee or trustees (if they are persons different from the administrator); a description of the relevant provisions of any applicable collective bargaining agreement; the plan's requirements respecting eligibility for participation and benefits; a description of the provisions providing for nonforfeitable pension benefits; circumstances which may result in disqualification, ineligibility, or denial or loss of benefits; the source of financing of the plan and the identity of any organization through which benefits are provided; the date of the end of the plan year and whether the records of the plan are kept on a calendar, policy, or fiscal year basis; the procedures to be followed in presenting claims for benefits under the plan including the office at the Department of Labor through which participants and beneficiaries may seek assistance or information regarding their rights under this chapter and the Health Insurance Portability and Accountability Act of 1996 with respect to health benefits that are offered through a group health plan (as defined in section 1191 b(a)(1) of this title) and the remedies available under the plan for the redress of claims which are denied in whole or in part (including procedures required under section 1133 of this title).
Moreover, the Court has already determined that no violation occurred of ERISA § 208 with respect to the creation of the CFC plan. Also, in the next five subsequent years following the creation of the CNF Plan, there was no decrease in CFC Plan participants' benefits or lack of funding as demonstrated by publically available CFC Plan annual reports. The Court finds that the alleged failure to notify certain employees and possibly former employees who had been switched over to the CFC plan did not create any cognizable injury.
Alternatively, the Court finds that Plaintiffs' Fifth Claim is time barred by ERISA Statute of Limitations. See ERISA § 413, 29 U.S.C. § 1113 (1992).
Title 29 U.S.C. § 1113 states that:
No action may be commenced under this subchapter with respect to a fiduciary's breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of
(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have cured the breach or violation, or (2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation; except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.
For the reasons stated above, the Court grants CNF and CNF Service Company's Motion to Dismiss Claim Five with prejudice as to all Defendants.
E. Claims Against Tower — Claims Six and Seven (State Law Claims)
Plaintiffs' contend that Towers is an actuary and as an actuary California Civil Code § 1708 requires Towers "to abstain from injuring the person or property of another, or infringing upon any of his rights." Complaint ¶ 115 (quoting Cal. Civ. Code § 1708). Also, Plaintiffs contend that as an actuary, Towers, in the absence of privity of contract is "responsible, not only for the result of his willful acts, but also for an injury occasioned to another by his want of ordinary care or skill in the management of his property or person . . ." Complaint ¶ 116 (quoting Cal. Civ. Code § 1714(a)).
California Civil Code § 1708 (1998) addressing injuring a person or property of another, or infringing upon any of his or her rights states that:
Every person is bound, without contract, to abstain from injuring the person or property of another, or infringing upon any of his or her rights.
California Civil Code § 1714(a) (1998) states that:
Every one is responsible, not only for the result of his or her willful acts, but also for an injury occasioned to another by his or her want of ordinary care or skill in the management of his or her property or person, except so far as the latter has, willfully or by want of ordinary care, brought the injury upon himself or herself. The design, distribution, or marketing of firearms and ammunition is not exempt from the duty to use ordinary care and skill that is required by this section. The extent of liability in these cases is defined by the Title on Compensatory Relief.
Towers contends that Plaintiffs lack standing to bring Claims Six and Seven because Towers Perrin provided services to the plan and thus owed no legal duty to the individual participants. Towers relies on Bily v. Arthur Young Co., 3 Cal.4th 370 (1992) holding that the limitations in Bily apply widely to those who supply or evaluate information to limit their liability to even foreseeable third parties who have an interest in their work product. In its Opposition, Plaintiffs contend that the concerns of the Bily court are inapplicable to this case. The Court finds that Plaintiffs were not Towers' clients.
Plaintiffs contend that even if Plaintiffs are not viewed as Towers' clients, Towers still owed them a duty of care because the Baikanja v. Irving, 49 Cal.2d 647 (1958) factors weigh in favor of imposing liability. After reviewing and applying the Baikanja factors, the Court finds that Towers owed Plaintiffs no duty of care. See Glen K. Jackson Inc. v. Roe, 273 F.3d 1192, 1199 (9th Cir. 2001).
In addition, Plaintiffs contend that their professional negligence claims were pled broadly enough to constitute claims not only under California law but also Washington and Oregon law. In its Complaint, Plaintiff clearly rely on California Civil Code § 1708 and § 1714(a) in Claims Six and Seven. See Plaintiffs' Complaint, Headings for Claim Six and Seven. The Court finds that under California law Towers owed no duty to Plaintiffs and Plaintiffs were not Towers' clients. For the reasons stated above, the Court grants Towers Motion to Dismiss Claims Six and Seven with prejudice.
V. CONCLUSION
For the reasons stated above, the grants CNF's and CNF Service Company's motion to dismiss the entire Complaint. In addition, the Court grants Towers motion to dismiss Plaintiffs' Claims Six and Seven. Accordingly, Plaintiffs' Claims One, Two, Five, Six and Seven are dismissed with prejudice as to all Defendants. Plaintiffs' Claims Three and Four are dismissed with prejudice with respect to CNF and CNF Service Company, and without prejudice as to Defendants Richards, Tener, Wrightson, and the Adminstrative Committee.