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Buster v. Greisen

filed: January 16, 1997.

JACK B. BUSTER, PLAINTIFF-APPELLANT, A. LEE PETERSEN, APPELLANT,
v.
RONALD E. GREISEN; HENRY P. HEAD; AND DAVID L. RATCHYE, DEFENDANTS-APPELLEES.



Appeals from the United States District Court for the District of Alaska. D.C. No. CV-94-00475-JKS. James K. Singleton, District Judge, Presiding.

Before: Eugene A. Wright, Melvin Brunetti and Diarmuid F. O'Scannlain, Circuit Judges. Opinion by Judge Wright.

Author: Wright

WRIGHT, Circuit Judge:

Appellant Jack Buster initiated this state law misrepresentation action in Alaska Superior Court. Asserting that the suit was an impermissible collateral attack on a prior federal judgment, Appellees Ronald Greisen, Henry Head and David Ratchye removed the case to federal district court, which granted their motions for summary judgment and sanctions. Buster challenges the district court's exercise of subject matter jurisdiction, grant of summary judgment and, with his attorney, A. Lee Petersen, the imposition of sanctions. We have jurisdiction under 28 U.S.C. § 1291. We vacate the judgment for want of jurisdiction and affirm the award of sanctions.*fn1

BACKGROUND

Greisen, Head and Ratchye were trustees of the Thomas, Head & Greisen Employees Trust, an employee trust fund subject to the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq. In 1986 the Trust purchased deeds of trust secured by real property from Northern Financial, a general partnership comprised of Jack Buster and Terry Parks.

In 1989 the Trust sued Buster, Parks and Northern Financial, alleging that they had made material misrepresentations in the sale of three notes and claiming breach of fiduciary duty under ERISA. The district court ruled that Northern, Buster and Parks were fiduciaries to the Trust and that they had breached their fiduciary duty. The court awarded damages to the Trust in excess of $142,000, and we affirmed. Thomas, Head & Greisen Employees Trust v. Buster, 24 F.3d 1114 (9th Cir. 1994), cert. denied, 130 L. Ed. 2d 881, 115 S. Ct. 935 (1995).*fn2

Buster then instituted this suit in Alaska Superior Court, alleging that the Trustees had failed to disclose information that would have put him on notice that he was a fiduciary to the Trust. Contending that either ERISA's "complete preemption" doctrine or the district court's "ancillary jurisdiction" conferred federal question jurisdiction over Buster's complaint under 28 U.S.C. § 1331, the Trustees removed the case to federal court under 28 U.S.C. § 1441. After denying Buster's motion to remand, the court granted the Trustees' motions for summary judgment and sanctions.

Discussion

A. Subject Matter Jurisdiction

We review de novo questions of federal subject matter jurisdiction. Kruse v. State of Hawaii, 68 F.3d 331, 333 (9th Cir. 1995).

1. Complete Preemption

"[A] cause of action arises under federal law only when the plaintiff's well-pleaded complaint raises issues of federal law." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987); Felton v. Unisource Corp., 940 F.2d 503, 506 (9th Cir. 1991). A corollary to this requirement provides "that Congress may so completely preempt a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Taylor, 481 U.S. at 63-64; Felton, 940 F.2d at 507. ERISA "completely preempts" a state law claim only when it both preempts the claim under 29 U.S.C. § 1144(a) and displaces the claim with its civil enforcement provision, 29 U.S.C. § 1132(a). Taylor, 481 U.S. at 66; Harris v. Provident Life and Accident Ins. Co., 26 F.3d 930, 934 (9th Cir. 1994). The Trustees' complete preemption argument fails because section 1132(a) does not displace Buster's claim.

Buster's complaint asserts only a claim for state law misrepresentation by nondisclosure. Under section 1132(a), which authorizes suits by plan participants, beneficiaries, or fiduciaries, he ...


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