1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JIMMY LEE VERNON, JR., No. 2:23-cv-01829 DJC AC PS 12 Plaintiff, 13 v. FINDINGS AND RECOMMENDATIONS 14 METROPOLITAN LIFE INSURANCE COMPANY; KAITLYN CRAWFORD; 15 BRENDA KOLOGY; JOHN AND JANE DOES 1-5, 16 Defendants. 17

18 19 Plaintiff is a state prisoner proceeding in this matter pro se, and pre-trial proceedings are 20 accordingly referred to the undersigned pursuant to Local Rule 302(c)(21). The operative second 21 amended complaint is located at ECF No. 34. Defendants move to dismiss the case without 22 further leave to amend. ECF No. 36. Plaintiff opposed the motion. ECF No. 38. Defendants 23 filed a reply. ECF No. 39. For the reasons explained below, the undersigned recommends that 24 defendants’ motion to dismiss be GRANTED, and that this case be DISMISSED in its entirety. 25 I. Background 26 A. The Initial Dismissal and the Second Amended Complaint 27 Jimmy Lee Vernon, Jr., proceeding in pro se, filed a complaint in diversity jurisdiction (28

) on August 25, 2023. ECF Nos. 1, 9. Plaintiff asserted state law claims for breach 1 of contract, breach of fiduciary duties, breach of implied obligation/covenant of good faith and 2 fair dealing, breach of contractual duty to pay a covered claim, intentional misrepresentation, 3 concealment, and negligence, all arising from defendants’ alleged failure to pay life insurance 4 benefits to him from his deceased father’s policy. ECF No. 9 at 3-14. Plaintiff attached to his 5 first amended complaint a letter from General Motors Benefits and Service Center, letters from 6 Metropolitan Life Insurance Company (“MetLife”), and letter from United Auto Workers. ECF 7 No. 9 at 15-28. Defendants moved to dismiss on February 2, 2024, arguing that the complaint 8 fails to state a claim upon which relief can be granted because all plaintiff’s state law claims are 9 preempted by the Employee Retirement Income Security Act of 1974,

et seq. 10 (“ERISA”). ECF No. 18 at 2. The motion to dismiss was granted. ECF Nos. 28, 33. In 11 dismissing plaintiff’s prior complaint, which contained only state law claims, the court ruled that 12 those claims were preempted because the life insurance benefits Vernon seeks arise from an 13 employee benefit plan governed by the Employee Retirement Income Security Act of 1974, as 14 amended (“ERISA”),

, et seq.

Plaintiff was granted leave to amend. 15 Plaintiff filed the operative Second Amended Complaint (“SAC”) on June 24, 2024. ECF 16 No. 34. The SAC references various sections of ERISA and state law causes of action (e.g, 17 forgery, breach of contract, etc.) while maintaining the foundation of his first amended complaint: 18 that MetLife should have paid him out as the beneficiary of his father’s insurance plan, and that 19 MetLife’s assertion that he is not listed as the beneficiary of his father’s plan is false. ECF No. 35 20 at 4-11. Plaintiff alleges that plaintiff was his father’s only heir and child, and that MetLife 21 improperly told him that the policy had not been changed in a long time.

Though the SAC is 22 difficult to decipher, its gravamen is clearly that plaintiff was intended to be the beneficiary of his 23 father’s insurance plan, MetLife has incorrectly maintained that someone other than plaintiff was 24 the listed beneficiary, and MetLife improperly paid the other beneficiary instead of plaintiff.

25 Though the SAC presents several causes of action, each cause of action is based on this common 26 factual premise. 27 //// 28 //// 1 B. Motions to Dismiss 2 Defendants moved to dismiss the second amended complaint in its entirety for the 3 following reasons: (a) all state law claims are preempted by the Employee Retirement Income 4 Security Act of 1974,

et seq. (“ERISA”); (2) all claims under

1132(a)(2) fail because the SAC does not seek to redress losses on behalf of the Plan but seeks 6 only to recover alleged personal losses to plaintiff; (3) all claims under

(a)(3) 7 fail because that section only provides for equitable relief and the SAC seeks legal relief in 8 the form of money damages, which are not recoverable; (4) the claim under

9 fails because there are no facts alleged regarding that section; and (5) the SAC fails to state a 10 claim against individual defendants Kaitlyn Crawford and Brenda Kology because neither is a 11 properly named defendant with respect to the breach of fiduciary duty claims alleged. ECF No. 12 36 at 2. Defendants ask that plaintiff not be granted further leave to amend.

. 13 II. Analysis 14 A. Legal Standards Governing Motions to Dismiss 15 “The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal 16 sufficiency of the complaint.” N. Star Int’l v. Ariz. Corp. Comm’n,

(9th Cir. 17 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of 18 sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t., 901

(9th Cir. 1990). 20 In order to survive dismissal for failure to state a claim, a complaint must contain more 21 than a “formulaic recitation of the elements of a cause of action;” it must contain factual 22 allegations sufficient to “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. 23 Twombly,

(2007). It is insufficient for the pleading to contain a statement of 24 facts that “merely creates a suspicion” that the pleader might have a legally cognizable right of 25 action.

(quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-35 26 (3d ed. 2004)). Rather, the complaint “must contain sufficient factual matter, accepted as true, to 27 ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,

(2009) 28 (quoting Twombly,

). “A claim has facial plausibility when the plaintiff pleads 1 factual content that allows the court to draw the reasonable inference that the defendant is liable 2 for the misconduct alleged.”

3 In reviewing a complaint under this standard, the court “must accept as true all of the 4 factual allegations contained in the complaint,” construe those allegations in the light most 5 favorable to the plaintiff, and resolve all doubts in the plaintiff’s favor. See Erickson v. Pardus, 6

(2007); Von Saher v. Norton Simon Museum of Art at Pasadena,

, 7 960 (9th Cir. 2010), cert. denied,

(2011); Hebbe v. Pliler,

(9th 8 Cir. 2010). However, the court need not accept as true legal conclusions cast in the form of 9 factual allegations, or allegations that contradict matters properly subject to judicial notice. See 10 Western Mining Council v. Watt,

(9th Cir. 1981); Sprewell v. Golden State 11 Warriors,

(9th Cir.), as amended,

(2001). 12 Pro se pleadings are held to a less stringent standard than those drafted by lawyers. 13 Haines v. Kerner,

(1972). Pro se complaints are construed liberally and may 14 only be dismissed if it appears beyond doubt that the plaintiff can prove no set of facts in support 15 of his claim which would entitle him to relief. Nordstrom v. Ryan,

(9th Cir. 16 2014). The court’s liberal interpretation of a pro se complaint, however, may not supply essential 17 elements of the claim that were not pled. Ivey v. Bd. of Regents of Univ. of Alaska,

(9th Cir. 1982); see also Pena v. Gardner,

(9th Cir. 1992). A pro se 19 litigant is entitled to notice of the deficiencies in the complaint and an opportunity to amend, 20 unless the complaint’s deficiencies could not be cured by amendment. See Noll v. Carlson, 809

, 1448 (9th Cir. 1987). 22 B. Judicial Notice 23 In general, district courts may not consider materials beyond the pleadings when assessing 24 the sufficiency of a complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Lee 25 v. City of Los Angeles,

(9th Cir. 2001). “There are two exceptions to this rule: 26 the incorporation-by-reference doctrine, and judicial notice under Federal Rule of Evidence 201. 27 Both of these procedures permit district courts to consider materials outside a complaint, but each 28 does so for different reasons and in different ways.” Khoja v. Orexigen Therapeutics, Inc., 899

. Incorporation by reference is a judicially created doctrine designed to allow courts 2 to treat certain documents referenced within a complaint as though they are fully included in the 3 complaint in order to prevent “plaintiffs from selecting only portions of documents that support 4 their claims, while omitting portions of those very documents that weaken — or doom — their 5 claims.” Khoja, 899 F.3d at 1002. It is proper to incorporate a document into a complaint when 6 the claims – not just the defenses – necessarily depend on it. Id. 7 Here, the SAC extensively references the insurance policy at issue. Senior Claim 8 Examiner Megan Vaccaro provided a declaration verifying copies of the Certificate of Insurance 9 (“Certificate”) for Group Policy No. 33600-G issued by MetLife to General Motors Corporation, 10 which funds the life insurance benefits of the GM Life and Disability Benefits Program (the 11 “Plan”) at Exhibit A and the Summary Plan Description (“SPD”) for the Plan at Exhibit. ECF 12 No. 36-1 at 4. The court accordingly takes judicial notice of these documents. 13 C. ERISA Preemption 14 Plaintiff’s SAC re-alleges multiple state law claims that the court already ruled were 15 preempted by ERISA, and these claims must again be dismissed. Congress enacted ERISA to 16 create “a comprehensive statute for the regulation of employee benefit plans.” Aetna Health Inc. 17 v. Davila,

, (2004). “ERISA contains one of the broadest preemption clauses 18 ever enacted by Congress.” Joanou v. Coca–Cola Co.,

(9th Cir. 1994) (internal 19 quotation marks omitted). “Under § 514(a), ERISA broadly ‘preempts any and all State laws 20 insofar as they may now or hereafter relate to any [covered] employee benefit plan . . ..’ ” Fossen 21 v. Blue Cross & Blue Shield of Mont., Inc.,

(9th Cir. 2011) (alterations in 22 original) (quoting

(a)). “Therefore, any state-law cause of action that duplicates, 23 supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear 24 congressional intent to make the ERISA remedy exclusive and is therefore pre-empted.”

at 25 209. Specifically, ERISA’s preemption clause provides: 26 Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III shall supersede any and all State 27 laws insofar as they may now or hereafter relate to any employee benefit plan . . . 28 1

(a). Thus, Congress has made clear that where an employee welfare benefit plan 2 is concerned, ERISA governs and preempts any state law claims that relate to any such plan. Five 3 criteria determine whether a plan is governed by ERISA: (1) a “plan, fund, or program,” (2) 4 “established or maintained” (3) by “an employer,” (4) for the purpose of providing “benefits” (5) 5 to its “employees.” See

(2)(A). 6 As explained in the undersigned’s prior findings and recommendations, the Ninth Circuit 7 and district courts within this circuit have consistently held that ERISA preempts state law claims 8 such as those asserted in the complaint. See, e.g., Johnson v. Lucent Technologies Inc.,

Appx 406, 408 (9th Cir. 2016) (memorandum opinion; claim for intentional infliction of 10 emotional distress preempted); McBride v. PLM Int’l, Inc.,

(9th Cir. 1999) 11 (claim for breach of the implied covenant of good faith and fair dealing preempted); Kanne v. 12 Connecticut Gen. Life Ins. Co.,

(9th Cir. 1988) (claims under California statute 13 prohibiting unfair business practices preempted); Greaney v. Western Farm Bureau Life Ins., 973

(9th Cir. 1992) (intentional interference with contract claim preempted) (citing 15 Tingey v. Pixley-Richards W., Inc.,

, 1131 (9th Cir. 1992); Josef K. v. California 16 Physicians’ Service,

, at *3,

(N.D. Cal. Feb. 19, 17 2019) (tortious interference claim preempted); Powell v. Unum Life Ins. Co. of Am.,

8731383, at *3,

(E.D. Cal. Sept. 30, 2016) (causes of action for 19 breach of contract, breach of the covenant of good faith and fair dealing and breach of fiduciary 20 duty preempted); Finn v. United Healthcare Ins. Co.,

, at *2, 2013 U.S. Dist.

(S.D. Cal. March 20, 2013) (negligent misrepresentation claim preempted). 22 Further, because ERISA provides the exclusive remedial scheme for any claims that relate 23 to a plan, it also preempts any claims for extracontractual damages. See Bast v. Prudential Ins. 24 Co. of America,

(9th Cir. 1998), as amended (Aug. 3, 1998) 25 (“[e]xtracontractual, compensatory and punitive damages are not available under ERISA”). Once 26 again, plaintiff’s state law claims must be dismissed because they are preempted by ERISA. 27 D. Plaintiff’s ERISA References Do Not State a Claim 28 Plaintiff’s SAC asserts the following putative claims under ERISA: (1) Breach of 1 Contract, Forgery, Section 409(a),3

(a) (ECF No. 34 at 4); (2) Breach of 2 Fiduciary Duties,

(a), Forgery (ECF No. 34 at 5); (3) Fiduciary Breach of Plan, 3 Section 411,

(ECF No. 34 at 6); (4) Misrepresentation, Section 1132(a)(3) (ECF 4 No. 34 at 8); Misrepresentation, Section 1132(a) (ECF No. 34 at 9); (5) Forgery, Section 5 502(a)(2), 4 Section 409(a),

(a) (ECF No. 34 at 10); and Forgery, Section 6 502(a)(2), Section 409(a),

(a) (ECF No. 34 at 11). Plaintiff’s Request for Relief 7 seeks “Equitable Relief 502(a)(3) (29 U.S.C. 1132(a)(1)(B)) in the amount of $500,000.” ECF 8 No. 34 at 12. Plaintiff’s claims can be categorized under the following sections of ERISA’s civil 9 enforcement scheme: (1) claims brought under Section 1132(a)(2) and Section 1109; (2) claims 10 brought under Section 1132(a)(3) for alleged breaches under Section 1104(a); and (3) a claim 11 brought under Section 1111. Each category of claims is addressed separately below. 12 a. Section 1132(a)(2) and Section 1109 13 ERISA authorizes plan participants and beneficiaries to sue a fiduciary on 14 behalf of the plan for “appropriate relief” under Section 1109.

(a)(2). Section 15 1109 establishes personal liability for an ERISA fiduciary who breaches duties that result in 16 losses to the plan. See

(a). Thus, to maintain a claim under Sections 1132(a)(2) 17 and 1109(a), the plaintiff must allege losses to the plan. See Massachusetts Mut. Life Ins. Co. v. 18 Russell,

(1985) (Section 1109 is concerned with “misuse of plan assets, and 19 with remedies that would protect the entire plan, rather than with the rights of an individual 20 beneficiary.”); Varity Corp. v. Howe,

(1996)(Section 1132(a)(2) “does not 21 provide a remedy for individual beneficiaries.”); Wise v. Verizon Comm’s, Inc.,

, 22 1189 (9th Cir. 2010) (“The claim for fiduciary breach [under § 1132(a)(2)] gives a remedy for 23 injuries to the ERISA plan as a whole, but not for injuries suffered by individual participants 24 as a result of a fiduciary breach.”). Because plaintiff seeks relief on his own behalf and seeks to 25 recover damages for himself, his putative claims under these ERISA sections cannot entitle him 26 to relief and must be dismissed. 27 b. Section 1132(a)(3) for Breaches Under Section 1104(a) 28 Plaintiff’s claims for relief under Section 1132(a)(3) and 1104(a)5 fail because the 1 remedies he seeks are legal (financial damages), not equitable. Section 1132(a)(3) authorizes a 2 participant, beneficiary or fiduciary to bring a civil action “(A) to enjoin any act or practice which 3 violates any provision of this subchapter or the terms of the plan, or (B) to obtain other 4 appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this 5 subchapter or the terms of the plan.”

(a)(3)(B). These remedies are equitable in 6 nature, meaning they require a party to take or refrain from specific actions, rather than requiring 7 payment of monetary damages. “To qualify as ‘equitable relief,’ both ‘(1) the basis for the 8 plaintiff’s claim and (2) the nature of the underlying remedies sought’ must be equitable rather 9 than legal.” Depot, Inc. v. Caring for Montanans, Inc.,

(9th Cir.), cert. denied, 10

(2019) (citation and internal quotation marks omitted). The Supreme Court has 11 also made clear that the language “appropriate equitable relief’” in the statute does not authorize 12 suits for money damages for breach of fiduciary duty. Mertens v. Hewitt Assocs.,

, 13 255 (1993). 14 Plaintiff seeks relief under ERISA (i.e.,

(a)(3)) “in the amount of 15 $500,000.” ECF 34 at p. 12, 44. Although plaintiff labels this a claim for equitable relief, the 16 request itself is plainly for monetary damages. The foundation of this lawsuit is plaintiff’s belief 17 that he is owed a payout as the intended beneficiary of his father’s plan, and the only relief sought 18 by way of the SAC is monetary relief, which by its very nature is legal. Mertens,

19 (“Money damages are, of course, the classic form of legal relief.”). Plaintiff’s claims under 20 Sections 1132(a)(3) and 1104(a) therefore fail as a matter of law and are subject to dismissal. See 21 Depot,

-6l5 (affirming dismissal of claims under Section 1132(a)(3) because such 22 claims asserted were legal, not equitable, “notwithstanding the[ir] labels”); LD v. United Behav. 23 Health,

, at *7 (N.D. Cal. Aug. 26, 2020) (dismissing claims under section 24 1132(a)(3) because “the complaint is devoid of allegations that raise the inference that the basis 25 for the remedies that plaintiffs seek under Section 1132(a)(3) is equitable”). Because plaintiff’s 26 SAC makes it clear that he seeks only unavailable relief, the claims must be dismissed. 27 //// 28 //// 1 c. Section 1111 2 The allegations in the SAC cannot support any claim under Section 1111, which sets forth 3 persons who are prohibited from holding certain positions in an employee benefit plan. See 29

(“Persons prohibited from holding certain positions”). Not only is the SAC devoid 5 of any allegations that are relevant to this section, the cited portion of the statute cannot provide 6 the relief Vernon seeks—namely, benefits under the Plan. Claims under this section must be 7 dismissed. 8 E. Claims Against Individual Defendants 9 Although all of plaintiff’s claims fail for the reasons described above, the court notes 10 further that plaintiff cannot maintain claims against individual defendants Kology and Crawford 11 because they are not fiduciaries of the plan as defined by ERISA. As explained above, Sections 12 1132(a)(2) and (a)(3) permit a participant or beneficiary to seek relief for fiduciary breaches 13 under ERISA. Accordingly, claims lie only against fiduciaries. ERISA defines a fiduciary as 14 follows: 15 [A] person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control 16 respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he 17 renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, 18 or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the 19 administration of such plan. 20

(21)(A). 21 Here, there are no facts alleged that Kology or Crawford had any discretionary authority 22 with respect to the Plan’s administration. Rather, the Plan requires that upon the participant’s 23 death, the benefits are to be paid to the Beneficiary, defined as “the person or persons YOU 24 choose to receive any benefit payable because of YOUR death.” ECF No. 36-1 at 47). While 25 plaintiff alleges in conclusory fashion that Kology and Crawford made false representations that 26 prevented him from getting the benefits at issue (ECF No. 34 at 8-9), his SAC is devoid of 27 allegations showing that they were empowered with discretion or authority to alter the terms of 28 the Plan. Lacking any such allegations, his breach of fiduciary duty claims against the individual 1 defendants must be dismissed on this ground as well. See Fealy v. ISP2 Oakland, Inc.,

2988508, at *3,

(N.D. Cal. July 28, 2022) (dismissing a claim for 3 breach of fiduciary duty where allegations that the party had “informed Plaintiff that her health 4 insurance was not active” were insufficient to show discretionary authority or responsibility). 5 F. Plaintiff Should Not Receive Further Leave to Amend 6 A a pro se plaintiff is generally entitled to an opportunity to correct defects in a complaint 7 by amendment unless the defects cannot be cured. Noll, 809 F.2d at 1448. Plaintiff has had an 8 opportunity to amend, and the contents of the SAC make clear that further amendment is futile. 9 Plaintiff should not be granted the opportunity to file a third amended complaint. 10 III. Pro Se Plaintiff’s Summary 11 It is being recommended that your case be dismissed. Your state law claims must be 12 dismissed because they are preempted by ERISA. Your other claims must be dismissed because 13 you have not stated a legal basis for relief. ERISA does not provide for the money damages you 14 seek. It appears clear to the Magistrate Judge that you cannot win this case in federal court, so it 15 is being recommended that this case be dismissed without another chance to file an amended 16 complaint. If you disagree with this recommendation, you can file objections for the district 17 judge to consider within 21 days. 18 IV. Conclusion 19 For the reasons explained above, the undersigned recommends that the motion to dismiss 20 (ECF No. 36) be GRANTED and that this case be DISMISSED in its entirety without further 21 leave to amend. 22 These findings and recommendations are submitted to the United States District Judge 23 assigned to the case, pursuant to the provisions of

(b)(1). Within twenty-one days 24 after being served with these findings and recommendations, any party may file written 25 objections with the court and serve a copy on all parties. Id.; see also Local Rule 304(b). Such a 26 document should be captioned “Objections to Magistrate Judge’s Findings and 27 Recommendations.” Failure to file objections within the specified time may waive the right to 28 //// 1 || appeal the District Court’s order. Turner v. Duncan,

(9th Cir. 1998); Martinez 2 | v. Yist,

(9th Cir. 1991). 3 || DATED: August 22, 2024 ~ 4 ttt0n— ALLISON CLAIRE 5 UNITED STATES MAGISTRATE JUDGE 6 7 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1]