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Olson v. General Dynamics Corp.

filed: December 20, 1991; As Amended January 10, 1992.

ROGER OLSON, PLAINTIFF-APPELLANT,
v.
GENERAL DYNAMICS CORPORATION, A FOREIGN CORPORATION; ALLIED SIGNAL, INC., A FOREIGN CORPORATION; AMEX SYSTEMS CORPORATION, (A WHOLLY OWNED SUBSIDIARY OF ALLIED SIGNAL INC.); SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, A FOREIGN CORPORATION; SAIC RANGE SYSTEMS, A CALIFORNIA CORPORATION AND DOES 1 THROUGH 50 INCLUSIVE, DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Southern District of California. D.C. No. CV-89-0789-GT(M). Gordon Thompson, Jr., Chief District Judge, Presiding.

Before: Thomas Tang, Stephen Reinhardt and Charles Wiggins, Circuit Judges. Opinion by Judge Wiggins.

Author: Wiggins

WIGGINS, Circuit Judge:

Roger Olson appeals the district court order granting summary judgment in favor of General Dynamics, Allied-Signal, Science Applications International Corporation ("SAIC"), and SAIC Range Systems (collectively, "the appellees"). The district court ruled that Olson's state law fraud claim relates to an employee benefit plan, and is therefore preempted by § 514(a), 29 U.S.C. § 1144(a), of the Employee Retirement Income Security Act ("ERISA"). 29 U.S.C. §§ 1001 et seq. The court also refused to grant Olson declaratory relief under 28 U.S.C. § 2201, holding that to formulate a federal common law remedy would defeat the purpose of the scheme Congress created in ERISA. Olson challenges both of these rulings in this appeal. The district court had jurisdiction under 29 U.S.C. § 1132(e), and we have jurisdiction under 28 U.S.C. § 1291. We affirm.

BACKGROUND

Roger Olson was an employee with the Range Systems product line of General Dynamics from July 1955 until April 1986, at which time General Dynamics sold that line to Amex Systems, Inc., a subsidiary of Allied-Signal Inc. At the time of the sale, executives of both General Dynamics and Amex told Olson and the other Range Systems employees that they would be offered jobs with Amex, and General Dynamics promised Amex that it would not attempt to rehire any of those employees for a two-year period following the sale. This case is based upon the following statement made by the President of Amex to the Range System employees at the time of the sale (and before Olson decided to accept Amex' job offer): "I commit to you that in no way will you be injured. On the bottom line, you will be equal or better to [sic] your present position."

Olson accepted the job with Amex in April 1986. In January 1988, Amex sold the Range Systems product line to SAIC, where Olson worked until his retirement in June 1988. Olson participated in the employee benefit plan while he was employed by each of these three companies - General Dynamics, Amex and SAIC. Olson claims that the benefits he received upon retirement from SAIC were less than he would have received had he retired from General Dynamics.

Olson filed suit in state court against General Dynamics, Amex and SAIC, alleging that the level of benefits he would receive upon retirement was misrepresented to him at the time Range Systems was sold by General Dynamics to Amex. The defendants removed the case to federal court and moved for summary judgment on the first amended complaint. The district court granted the motion on the ground that Olson's fraud claim is preempted by ERISA. The district court order reads in part:

The court finds that plaintiff's fraud claim is preempted by ERISA. A state claim, in this case a claim of fraud, is preempted if it relates to the employee benefit plan. "The phrase 'relates to' [is] given its broad common-sense meaning, such that a state law 'relates to' a benefit plan in the normal sense of the phrase, if it has a connection with or reference to such a plan." Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S. Ct. 1549, 1553, 95 L. Ed. 2d 39 (1987).

ER ex. 39 at 2-3. After distinguishing two Ninth Circuit cases upon which Olson relies, the district judge wrote:

[Olson] is suing as a participant in the AMEX plan who doesn't like the level of benefits and believes that the level of benefits was misrepresented. Even if there was a misrepresentation, and the court does not find that there was one, his claim arises as a participant in both ERISA plans and consequently relates to those plans and is preempted.

Id. at 4. And in the portion of the order granting summary judgment on Olson's claim for declaratory relief, the judge ruled as follows:

The court sees no reason to grant Olson's request for declaratory relief under 28 U.S.C. 2201, which is in essence a request to the court to devise a special remedy for Olson's fraud claim. Since the court has ruled that the fraud claim is preempted by ERISA, the court's creation of a ...


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