Summary
affirming dismissal of amended complaint because "allegations . . . that [the defendant] could have chosen different vehicles for investment that performed better during the relevant period, or sought lower fees for administration of the fund" were insufficient to state a claim
Summary of this case from Patterson v. StanleyOpinion
No. 17-16208
11-13-2018
CHARLES E. WHITE, Jr.; et al., Plaintiffs-Appellants, v. CHEVRON CORPORATION and ESIP INVESTMENT COMMITTEE, Defendants-Appellees.
NOT FOR PUBLICATION
D.C. No. 4:16-cv-00793-PJH MEMORANDUM Appeal from the United States District Court for the Northern District of California
Phyllis J. Hamilton, Chief Judge, Presiding Argued and Submitted October 19, 2018 San Francisco, California Before: HAWKINS and HURWITZ, Circuit Judges, and EATON, Judge.
This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
Richard K. Eaton, Judge of the United States Court of International Trade, sitting by designation. --------
Appellants (collectively, "White") appeal the district court's Rule 12(b)(6) dismissal of their amended complaint for failure to state a claim. White sought relief under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. White maintains that the amended complaint alleged sufficient facts to support a reasonable inference that appellees (collectively, "Chevron") breached their fiduciary duties of loyalty and prudence to the beneficiaries of Chevron's retirement plan, and engaged in a prohibited transaction. We have jurisdiction under 28 U.S.C. § 1291, and affirm.
1. Dismissal of a complaint is appropriate if it fails to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). That is, "the complaint must allege 'factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" In re Century Aluminum Co. Securities Litig., 729 F.3d 1104, 1108 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Where there are "two possible explanations, only one of which can be true and only one of which results in liability, plaintiff[] cannot offer allegations that are 'merely consistent with' [its] favored explanation but are also consistent with the alternative explanation." In re Century Aluminum Co. Securities Litig., 729 F.3d at 1108 (quoting Iqbal, 556 U.S. at 678) (emphasis added). "Something more is needed, such as facts tending to exclude the possibility that the alternative explanation is true, . . . in order to render plaintiffs' allegations plausible within the meaning of Iqbal and Twombly." Id. (citing Twombly, 550 U.S. at 554).
2. Applying the plausibility standard here, the facts alleged, viewed in the light most favorable to White, were insufficient to support a plausible inference of breach of the duty of loyalty, breach of the duty of prudence, or that a prohibited transaction took place. Rather, as to each count, the allegations showed only that Chevron could have chosen different vehicles for investment that performed better during the relevant period, or sought lower fees for administration of the fund. None of the allegations made it more plausible than not that any breach of a fiduciary duty had occurred. See In re Century Aluminum Co. Securities Litig., 729 F.3d at 1108. Thus, we hold that White failed to state a claim for breach of fiduciary duty.
3. We also hold that the prohibited transaction claim was time-barred because the transaction alleged to have violated the statute—hiring Vanguard—is alleged to have occurred in 2002, and this action was not commenced until 2016. See 29 U.S.C. § 1113. In light of the foregoing, White's derivative cause of action alleging that Chevron failed to monitor third parties also fails.
AFFIRMED.