Ninth Circuit Affirms Defined-Benefit Plan Participant Lacks Standing to Bring Breach-of-Fiduciary-Duty Claims

The Ninth Circuit Court of Appeals recently decided an ERISA standing issue in Diaz v. Westco Chemicals, Inc., No. 22-55823, 2023 WL 3615663 (9th Cir. May 24, 2023). The district court granted summary judgment in favor of Westco Chemicals, Inc. in this purported class action brought by participants in Westco’s ERISA-governed defined benefit pension plan. Reviewing de novo the district court’s legal determination regarding standing, the Ninth Circuit affirmed the judgment and concluded that the participants lacked Article III standing to bring breach-of-fiduciary-duty claims against Westco arising from Westco’s defined-benefit pension plan.

The court ruled for Westco because the plaintiff “has received—and will continue to receive—all the monthly benefits to which she is entitled under Westco’s defined-benefit pension plan, and that Appellant Perez never applied for the death benefit to which she claims entitlement under the plan.” Citing to Thole v. U.S. Bank N.A., 140 S. Ct. 1615, 1622 (2020), the court explained that “misconduct by the administrators of a defined benefit plan will not affect an individual’s entitlement to a defined benefit unless it creates or enhances the risk of default by the entire plan.” Here, the plan is not at risk of default. The court also rejected the plaintiff’s “meaningful benefits” theory, since they have identified no injury to the plan itself which is necessary to prevail on their ERISA § 502(a)(2); 29 U.S.C. § 1132(a)(2) claim.