Kevin McBRIDE, Plaintiff-Appellant, v. PLM INTERNATIONAL, INC., Defendant-Appellee ( 1998 )

Opinion by Judge BEEZER; Dissent by Judge TROTT.

BEEZER, Circuit Judge:

Kevin McBride (“McBride”) appeals the district' court’s order granting summary judgment in favor of PLM International, Inc. (“PLM”), and dismissing McBride’s complaint. McBride, a former employee of PLM, brought suit alleging that PLM’s termination of his employment violated § 1140 of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001-1461. McBride also brought various state law causes of action. The district court granted summary judgment in favor of PLM, holding that McBride lacked standing under ERISA. The district court dismissed the complaint for lack of subject matter jurisdiction and dismissed the pendent state law claims without prejudice to refiling in state court. We have jurisdiction, 28 U.S.C. § 1291, and affirm.

I

PLM hired McBride in March 1988. Until April 1994 McBride consistently received favorable performance evaluations. During this period PLM gave bonuses to McBride and circulated three memoranda commending him for his work performance. PLM also gave McBride increased job responsibilities throughout this period. In early April 1994 Robert Tidball, PLM’s president and chief executive officer, and Douglas Goodrich, McBride’s supervisor and a PLM senior vice president, told McBride that he might be promoted to director of operations. PLM instead hired Jeff Alpert as director of operations. McBride was not promoted.

On April 7, 1994, McBride submitted a request for payment of commissions earned three years previously. On April 14 Goodrich and McBride met to discuss the requested payments. Goodrich stated that he did not believe that McBride was entitled to the commissions, but that he would authorize payment if PLM’s legal department determined otherwise. McBride became angry and threatened to sue PLM if the commissions were not paid. Goodrich wrote a memorandum describing this meeting and had the memorandum placed in McBride’s personnel file. Soon thereafter McBride apologized to Goodrich for his inappropriate behavior at the meeting. Goodrich informed McBride that further insubordination would result in McBride’s termination. PLM paid McBride the requested commissions approximately a month after this incident.

Sometime later, Goodrich asked McBride to prepare two leasing reports (“the Leasing Reports”). McBride testified that he gave the Leasing Reports to Goodrich on July 26, 1994. Goodrich testified that McBride never gave him the reports.

On August 4, 1994, McBride met with Alpert, director of operations. At this meeting, McBride accused Alpert of inappropriately working on the personal affairs of another individual during business hours.

McBride was a participant in and beneficiary of the PLM Employers Profit Sharing and Tax Advantaged Savings Plan (“401-K Plan”) and the PLM Employee Stock Ownership Plan (“ESOP”) (collectively, “the Plans”). Both of the Plans qualified as ERISA employee benefit plans. See 29 U.S.C. § 1002(3). McBride was an active member of the Junior ESOP Committee (“the ESOP Committee”), an employee committee.

In spring 1994 PLM announced its intention to terminate the ESOP. Under the termination plan, each share of PLM. preferred stock held by the ESOP would be exchanged for one share of PLM common stock. McBride considered this exchange unfair because the common stock was less valuable than the preferred stock. McBride first voiced his concerns about the termination plan in a meeting during early April 1994 with Goodrich and Tidball. McBride also expressed his opposition to the termination at an employees’ informational meeting called by PLM during summer 1994. During that meeting Tidball responded to McBride’s comments with impatience and nonverbal hostility. Even though Tidball had opened the floor to employee questions, he cut off McBride’s questions. McBride also voiced his concerns during weekly departmental meetings led by Goodrich and in a meeting with Tidball.

On July 20,1994, McBride and other members of the ESOP Committee signed and delivered a letter to the United States Department of Labor (“DOL”) asking that the DOL make comments to the Internal Revenue Service about PLM’s planned termination of the ESOP. McBride and other members of the ESOP Committee provided information to the DOL about the ESOP and the effect of its termination on PLM employees.

Tidball and Steven Peary, PLM’s chief in-house counsel, were upset with the ESOP Committee’s decision to send the letter to the DOL. Tidball and Peary offered to pay for outside counsel to review the propriety of the ESOP termination if the ESOP Committee would withdraw its letter to the DOL. McBride was alone among the ESOP Committee members in opposing this offer. The ESOP Committee withdrew the letter.

McBride was terminated on August 9, 1994, less than three weeks after the letter was sent to the DOL. Goodrich wrote McBride a termination letter stating that McBride was being terminated because of his “explosive, threatening and insubordinate behavior to two different supervisors” and because of his failure to produce the Leasing Reports.

Sometime after August, PLM terminated the ESOP and gave all participants, including McBride, a lump sum distribution of their benefits under the Plans. In November 1994 McBride began employment with Union Bank of California.

In August 1995 McBride filed suit in district court, alleging (1) violation of 29 U.S.C. § 1140 (ERISA’s whistleblower section); (2) wrongful termination in violation of public policy; (3) defamation; and (4) breach of the covenant of good faith and fair dealing. The district court entered an order dismissing certain of McBride’s claims. McBride filed a second amended complaint alleging (1) violation of 29 U.S.C. § 1140; (2) wrongful termination in violation of public policy; and (3) defamation. PLM moved for summary judgment on each of those causes of action, and McBride moved for reconsideration of the order dismissing the fourth claim of his original complaint.

The district court granted in part PLM’s motion for summary judgment. The district court held that McBride lacked standing to bring an action under ERISA because he was not a participant in an ERISA plan at the time he filed his complaint. The district court therefore dismissed the complaint for lack of subject matter jurisdiction, vacated its prior order dismissing certain of McBride’s claims and dismissed the complaint without prejudice to McBride’s pursuing his state law claims in state court. McBride filed a motion for reconsideration, which the district court denied. This timely appeal followed.

II

We review de novo the existence of subject matter jurisdiction in the district court. Schultz v. PLM Int’l, Inc., 127 F.3d 1139, 1141 (9th Cir.1997). We also review de novo a district court’s grant of summary judgment. Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir.1996).

III

The district court held that McBride lacked standing to bring a claim under ERISA because he was not, at the time of filing his complaint, a “participant,” “beneficiary” or “fiduciary” within the meaning of 29 U.S.C. § 1132(a), ERISA’s civil enforcement provision. We agree with the district court’s analysis.

A

McBride’s complaint alleges a violation of 29 U.S.C. § 1140. That section provides, in relevant part, that

[i]t shall be unlawful for any person to discharge ... or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan.... It shall be unlawful for any person to discharge, fine, suspend, expel, or discriminate against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this chapter_ The provisions of section 1132 of this title shall be applicable in the enforcement of this section.

29 U.S.C. § 1140. The last sentence of this section provides for enforcement exclusively through 29 U.S.C. § 1132, ERISA’s enforcement provision. Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 144, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990); see also McKinnon v. Blue Cross and Blue Shield of Ala., 935 F.2d 1187, 1193-94 (11th Cir.1991) (§ 1140 may be enforced only by .persons empowered to bring a cause of action under § 1132).

Because § 1140 may be enforced only through § 1132, McBride has standing to bring this action only if he is a plan participant, beneficiary or fiduciary. See Harris v. Provident Life and Accident Ins. Co., 26 F.3d 930, 933 (9th Cir.1994) (“[A] federal court has no jurisdiction to hear a civil action under ERISA that is brought by a person who is not a ‘participant, beneficiary, or fiduciary.’ ”) (quoting Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 27, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)).

McBride contends that he has standing because he was a plan participant at the time of the alleged violation of § 1140. A participant is defined as “any employee or former employee of an employer ... who is or may become eligible to receive a benefit of any type from an employee benefit plan.” 29 U.S.C. § 1002(7). At the time of his termination, McBride was eligible to receive a benefit under PLM’s ERISA plans and was therefore a “participant.” This fact, he claims, gives him standing to pursue this claim.

It is, however, the settled law of this court that a person’s standing as a plan participant “must be decided as of the time of the filing of the lawsuit.” Harris, 26 F.3d at 933 (citing Olson v. General Dynamics Corp., 960 F.2d 1418, 1422 (9th Cir.1991); Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 714 (9th Cir.1990)); see also Schultz, 127 F.3d at 1142 (participant status is determined at the time of filing of suit). McBride was a former employee of PLM when he filed suit. “A former employee is a plan participant only if he has ‘a reasonable expectation of returning to covered employment or [has] a colorable claim to vested benefits.’ ” Id. (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)). Where, before filing suit, a former employee has received all of the benefits owed under an ERISA plan, that person is no longer a participant and therefore lacks standing for purposes of ERISA. Kuntz v. Reese, 785 F.2d 1410, 1411 (9th Cir.1986).

Because the Plans had been terminated before this complaint was filed, McBride did not have a reasonable expectation of returning to covered employment. Nor did he have a colorable claim to vested benefits: McBride’s benefits under the Plans had already been distributed'to him. Because he had neither a reasonable expectation of returning to covered employment nor a color-able claim to vested benefits, McBride was not a participant in an ERISA plan at the time he filed suit. He therefore lacked standing to bring a claim under § 1132. .

B

McBride contends that the analysis set out above does not apply to cases alleging violations of § 1140. He argues that § 1140 implicitly broadens the standing provisions of § 1132 to include persons who were participants at the time of the claimed violation. This approach is, he claims, consistent with our analysis of standing in Amalgamated Clothing & Textile Workers Union v. Murdock, 861 F.2d 1406 (9th Cir.1988). He further insists that a contrary result would permit violations of § 1140 to go unpunished, thereby contravening Congress’ intention to prohibit retaliation. These arguments are not persuasive.

1

McBride’s interpretation is not supported by the text of the statute. As noted above, § 1140 provides that “[t]he provisions of § 1132 of this title shall be applicable in the enforcement of this section.” Nothing in § 1132 suggests that its standing requirements are modified by § 1140. A' person claiming a violation of § 1140 must therefore have standing under § 1132. As set out above, under § 1132 standing is determined at the time of filing. See Schultz, 127 F.3d at 1142; Harris, 26 F.3d at 933. Under that standard McBride cannot establish standing.

2

McBride argues further that the district court’s approach is contrary to our analysis in Murdock, 861 F.2d 1406. Specifically, McBride contends that Murdock stands for the proposition that a person has standing under ERISA where a finding of standing would promote the purposes of ERISA. As a corollary, McBride argues that the district court’s approach frustrates Congress’ intent to prohibit retaliation against employees who speak out regarding their ERISA benefits.

Again we disagree. Murdock holds merely that “a constructive trust to recover ill-gotten gains qualifies as a ‘benefit of any type’ under ERISA.” Schultz, 127 F.3d at 1141; see also Murdock, 861 F.2d at 1419. A plaintiff who seeks to impose a constructive trust on a breaching fiduciary’s ill-gotten gains therefore has standing under ERISA. Murdock, 861 F.2d at 1419. In determining what constitutes a “benefit” for purposes of ERISA, we considered the goals of ERISA. See id. at 1411. But nothing in Murdock suggests that promotion of ERISA’s goals suffices in itself for a finding of standing.

McBride’s proposed test for standing recalls the “zone of interests” test for standing that we used in Fentron Indus., Inc. v. National Shopmen Pension Fund, 674 F.2d 1300, 1304-05 (9th Cir.1982). Under that test, we asked whether a plaintiffs alleged injuries fell “within the zone of interests that Congress intended to protect when it enacted ERISA.” Id. at 1305. As we recognized in Cripps v. Life Ins. Co. of North America, 980 F.2d 1261, 1265 (9th Cir.1992), Fentron’s “zone of interests” test was repudiated by Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985), and Franchise Tax Bd., 463 U.S. at 27, 103 S.Ct. 2841. We now apply the approach to standing set forth in Harris, 26 F.3d at 933. We see no reason to alter that analysis in the present case.

McBride’s argument from policy is also unpersuasive. ERISA empowers the Secretary of Labor to bring a civil action to address violations of § 1140. See 29 U.S.C. § 1132(a)(5); McKinnon, 935 F.2d at 1193-94. Because Congress chose to provide this means of redressing violations of § 1140, we will not imply an alternate remedy. See Massachusetts Mut. Life, 473 U.S. at 146, 105 S.Ct. 3085 (“The six carefully integrated civil enforcement provisions found in [§ 1132(a)] provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.”) (emphasis in original).

C

Our precedents mandate our decision in this case. A person has standing to bring an ERISA claim only if he or she is a participant, a beneficiary or a fiduciary of an ERISA plan. Harris, 26 F.3d at 933. Participant status, is determined at the time of filing. Id. A former employee who has received a distribution of all benefits owed by an ERISA plan is not a participant. Kuntz, 785 F.2d at 1411. Because McBride had received a distribution of all of his ERISA benefits before the filing of this action and could not return to covered employment, he lacked standing under ERISA.

rv

McBride’s ERISA claim was the only federal cause of action in this suit. His other claims were all state law claims. Having dismissed McBride’s sole federal claim for lack of jurisdiction, the district court could not assert pendent jurisdiction over his state law claims. See Harris, 26 F.3d at 934 (“[A] district court has no discretion to retain state law claims when the sole federal claim is dismissed for lack of jurisdiction.”). Similarly, because McBride lacks standing under ERISA, ERISA does not preempt his state law causes of action. See Curtis v. Nevada Bonding Corp., 53 F.3d 1023, 1027 (9th Cir.1995) (“[Wjithout standing to enforce ERISA, there can be no ERISA preemption.”) (citing Harris, 26 F.3d at 934). The district court did not err in dismissing McBride’s complaint without prejudice to pursuing his state law causes of action in state court.

V

The decision of the district court is

AFFIRMED.