Unreported / Non-Citable
Background
Sherry Yali Liu sued Kaiser’s pension plan and health plan after they denied benefits associated with her deceased sister. Before her death, Liu’s sister allegedly directed an online election of a lump-sum pension benefit and designated Liu as beneficiary.
Liu asserted several claims under the Employee Retirement Income Security Act (ERISA), the federal law governing most private employee benefit plans. This memorandum addressed dismissal of her theory based on the tax code’s definition of an eligible designated beneficiary and her request for equitable remedies. A separately filed opinion addressed whether the decedent substantially complied with the plan’s beneficiary procedures.
The Court’s Holding
The Ninth Circuit affirmed dismissal of the tax-code theory. The plan incorporated Internal Revenue Code section 401(a)(9) only where applicable, and the statutory definition Liu invoked governs required minimum-distribution rules rather than creating an independent right to a decedent’s plan benefit. Being within ten years of the participant’s age therefore did not itself make Liu entitled to payment under the plan.
The court also affirmed dismissal of Liu’s equitable-relief claim under ERISA section 502(a)(3). She forfeited reformation by not challenging its dismissal in her opening brief. Her requested surcharge duplicated the benefits remedy sought under section 502(a)(1)(B), and Ninth Circuit precedent foreclosed recovery of claimed tax losses caused by delayed payment. The court therefore left those theories dismissed while the related substantial-compliance issue proceeded under the companion disposition.
Key Takeaways
- Tax-code definitions used for required distributions do not automatically determine who is entitled to benefits under plan documents.
- ERISA plaintiffs may plead benefits and equitable claims together only when the remedies are genuinely distinct.
- A surcharge request that simply seeks the same unpaid benefit may be treated as duplicative.
- Issues omitted from an appellant’s opening brief can be forfeited even when they concern an alternative remedy.
- The memorandum is unpublished, so practitioners should rely on its cited precedents while using its reasoning as a practical guide.
Why It Matters
Benefit disputes often mix plan language, federal tax provisions, beneficiary forms, and equitable theories. This ruling cautions beneficiaries and plan counsel to identify exactly which provision creates the claimed entitlement and to avoid treating a tax qualification rule as a substitute for the plan’s designation requirements.
For ERISA litigators, remedy design matters at the pleading and appellate stages. Alternative counts should identify a separate injury or form of relief, and every theory intended for review must be squarely developed in the opening brief.