[00:00:00] Speaker 01:
Morning your honors, Robert Rosati for appellant.

[00:00:02] Speaker 01:
Sherry Yalilou, I would like to reserve two minutes for rebuttal.

[00:00:06] Speaker 01:
This is obviously a 12b6 appeal.

[00:00:09] Speaker 01:
The first amending complaint states or can be amended to state a complaint and therefore the judgment should be reversed.

[00:00:16] Speaker 01:
There are three issues raised in the... What amendment would you propose?

[00:00:22] Speaker 01:
If necessary, I would amend to add allegations regarding the issue of

[00:00:31] Speaker 01:
I raised two points of possible amendments in my briefing.

[00:00:36] Speaker 01:
I argued that I made two new arguments, legal arguments that weren't presented below, concerning who was the appropriate person to respond to.

[00:00:46] Speaker 00:
I'm not interested in your legal arguments.

[00:00:48] Speaker 00:
Tell me what objective

[00:00:51] Speaker 01:
Operative facts you would allege that you did not allege earlier I would allege that sherry yali lu could respond to the requirements under the single some option Start again that who?

[00:01:06] Speaker 01:
the plaintiff defense argues that they're obligated to provide information to the the recipient right and under the single some option under its express language the

[00:01:19] Speaker 01:
The recipient is the distributie who is Sheri Ali Lu.

[00:01:22] Speaker 01:
I could allege that she could respond to any additional questions that are needed to be responded to.

[00:01:29] Speaker 01:
Because that's what the law says, and that's actually what the plan says.

[00:01:33] Speaker 01:
So I could make that additional allegation because it's simply a legal allegation.

[00:01:39] Speaker 04:
I don't know what to say.

[00:01:41] Speaker 00:
It's not a matter whether she could respond, but the question is whether she did respond.

[00:01:47] Speaker 01:
No, she wasn't asked to respond.

[00:01:50] Speaker 01:
So the allegation would be what Kaiser argued below was that only the decedent can respond to these questions.

[00:02:00] Speaker 01:
But the regulation itself and the plan itself says the distributee could respond, can receive this information.

[00:02:09] Speaker 01:
So if the person who's

[00:02:12] Speaker 01:
The initial participant, Sherry's sister, is no longer alive.

[00:02:18] Speaker 01:
The question then becomes under the single sum option, if you have to give this information, who is it properly given to and who properly responds to it?

[00:02:26] Speaker 01:
The regulation and the plan expressly state that it can be the distributor who is Sherry.

[00:02:32] Speaker 01:
And did you make that proposal in the district court?

[00:02:36] Speaker 01:
No, I did not.

[00:02:37] Speaker 01:
And I point that out in my briefing.

[00:02:38] Speaker 01:
But this is de novo review.

[00:02:40] Speaker 01:
I can make it here.

[00:02:41] Speaker 01:
It's a legal argument.

[00:02:42] Speaker 04:
I have a procedural question about that because there's an odd wrinkle here in terms of allowing further amendment because below your client moved for summary decision.

[00:02:53] Speaker 04:
So it's not like you were just responding to a motion to dismiss.

[00:02:55] Speaker 04:
You affirmatively said we want a summary decision based on the existing pleadings.

[00:03:00] Speaker 04:
So given that procedure, why does it make sense to allow further amendment?

[00:03:03] Speaker 01:
The court didn't allow the summary proceeding to go forward.

[00:03:07] Speaker 04:
But you moved for it.

[00:03:08] Speaker 04:
So there was every indication that you were wanting to stand on the pleadings as existed.

[00:03:12] Speaker 01:
That's correct.

[00:03:14] Speaker 01:
Except the judge wouldn't let it go forward.

[00:03:16] Speaker 01:
So at this point, we're in a different procedural context.

[00:03:19] Speaker 04:
The context is- What do you mean that it didn't let it go forward, just denied it?

[00:03:23] Speaker 01:
No, no.

[00:03:24] Speaker 01:
Initially, I asked her clerk if I could file an opposition to the 12-6 motion and file a motion for summary judgment.

[00:03:31] Speaker 01:
She said yes.

[00:03:31] Speaker 01:
But then they filed a motion to just bifurcate and not go forward with the summary judgment motion.

[00:03:37] Speaker 01:
And therefore, it never went forward.

[00:03:39] Speaker 01:
The only issue that was adjudicated was the 12b6 motion.

[00:03:42] Speaker 04:
So in your motion for summary affirmance, you were trying to get an evidentiary, a decision based on evidence, not just pleadings.

[00:03:48] Speaker 01:
Yes.

[00:03:50] Speaker 01:
But I didn't get it.

[00:03:52] Speaker 01:
So in the context of this proceeding.

[00:03:54] Speaker 02:
Did you file a first amended complaint?

[00:03:57] Speaker 01:
Yes, I did.

[00:03:59] Speaker 02:
And a second amended complaint?

[00:04:00] Speaker 02:
No.

[00:04:00] Speaker 02:
Just a first?

[00:04:01] Speaker 02:
Just a first.

[00:04:02] Speaker 02:
And that was after a motion, after 12b6, or did you just decide to do it on your own?

[00:04:07] Speaker 02:
After 12b6.

[00:04:09] Speaker 02:
The first thing that happened was you filed your original complaint.

[00:04:13] Speaker 02:
They filed a motion to dismiss.

[00:04:15] Speaker 02:
You had an agreement to file a first amended complaint, and you did so.

[00:04:19] Speaker 02:
And this theory didn't occur to you at that time?

[00:04:21] Speaker 02:
It did not.

[00:04:23] Speaker 02:
Does it make any difference that Sherry Lou was not like her attorney in fact, or her

[00:04:30] Speaker 02:
She was just her sister.

[00:04:31] Speaker 02:
That doesn't mean she has all power for her sister.

[00:04:33] Speaker 01:
I don't believe it makes any difference.

[00:04:36] Speaker 01:
She was simply doing what her sister told her to do by submitting an online application.

[00:04:41] Speaker 01:
She didn't really complete the application, correct?

[00:04:44] Speaker 01:
They say she didn't.

[00:04:45] Speaker 01:
I believe she did.

[00:04:47] Speaker 02:
Well, but I don't know the plan says subject in a form.

[00:04:52] Speaker 02:
What is it in a form subject to the approval?

[00:04:55] Speaker 01:
It wasn't something like that, right?

[00:04:57] Speaker 01:
It's an electronic form that they submitted and she filled out.

[00:05:01] Speaker 01:
It's eight or ten pages.

[00:05:02] Speaker 01:
I don't know what else they expected.

[00:05:04] Speaker 02:
All I know is I have the form plan, but the plan gave that gave Kaiser considerable discretion, correct?

[00:05:10] Speaker 02:
Yes, it did.

[00:05:12] Speaker 02:
Neither the plan nor the summary plan description never set out what the steps would be, correct?

[00:05:27] Speaker 02:
It does not.

[00:05:28] Speaker 02:
It was just all to the discretion of the committee.

[00:05:32] Speaker 01:
No.

[00:05:33] Speaker 01:
No?

[00:05:34] Speaker 01:
The plan itself says that certain other statements

[00:05:40] Speaker 01:
It doesn't actually require it to be done by the participant.

[00:05:43] Speaker 01:
It requires it to be done by the plan.

[00:05:45] Speaker 01:
So what the plan has argued is their routine administrative practice can be incorporated into an actual, in effect, plan amendment.

[00:05:53] Speaker 01:
That's precisely what this court held in Blau versus... Let me ask you this follow-up question.

[00:05:59] Speaker 02:
You don't contend that there's a different standard of review that applies other than abusive discretion.

[00:06:04] Speaker 02:
Is that correct?

[00:06:06] Speaker 02:
Administratively correct.

[00:06:07] Speaker 02:
For the purposes of this hearing, it's de novo.

[00:06:10] Speaker 02:
No, but the question, but even if it is de novo, the question is, the ultimate question is, did the plan abuse its discretion in denying her these benefits?

[00:06:22] Speaker 02:
Correct.

[00:06:22] Speaker 02:
I agree.

[00:06:23] Speaker 02:
So it's abusive discretion.

[00:06:25] Speaker 02:
You didn't argue anything else, right?

[00:06:26] Speaker 02:
No, I did not.

[00:06:27] Speaker 02:
There's no basis to arguing anything else.

[00:06:29] Speaker 02:
Right.

[00:06:29] Speaker 02:
Okay.

[00:06:30] Speaker 02:
Why would it be an abuse of discretion under the circumstances here for Kaiser to want some verification about who's applying for benefits?

[00:06:38] Speaker 01:
It's not an abuse of discretion.

[00:06:40] Speaker 01:
But its abuse of discretion would add additional requirements to the obligation to get benefits.

[00:06:45] Speaker 02:
What the plan says is... What were the additional requirements that would amount to an abuse of discretion?

[00:06:53] Speaker 01:
Depends on which cause of action you're talking about.

[00:06:55] Speaker 01:
So for the cause of action about the single sum option,

[00:06:59] Speaker 01:
All that, it says right in the plan that if in fact the participant dies before the distribution, then the additional information can be provided to the distributor who is, by definition, Sherry Alley-Lew.

[00:07:14] Speaker 01:
So what they said is, we're not going to authorize this distribution.

[00:07:19] Speaker 02:
Where is the definition that says that she, what's the definition that she meets to be described as a distributor?

[00:07:28] Speaker 02:
It's in...

[00:07:31] Speaker 02:
Because you seem to say that by an operation of law, or by an operation of contract, she's the distributee.

[00:07:37] Speaker 01:
Right.

[00:07:37] Speaker 01:
It's subparagraph H. It's on ER 147 and 148, directoral loads of lump sums or periodic payments.

[00:07:45] Speaker 01:
It says who is the distributee, and it can be somebody other than the participant.

[00:07:51] Speaker 01:
And it incorporates the statutory language that makes the distributee, by definition, Sherri Allee-Lew.

[00:07:57] Speaker 04:
But that person has to be designated.

[00:07:58] Speaker 04:
So this whole case comes down to

[00:08:00] Speaker 04:
Was she properly designated?

[00:08:02] Speaker 01:
Yes.

[00:08:03] Speaker 04:
So we don't even get to that definition without a designation, even if she met the technical requirement that she be not less than 10 years younger or something like that.

[00:08:14] Speaker 04:
But she has to be designated.

[00:08:15] Speaker 01:
The form submitted designated her.

[00:08:17] Speaker 04:
So this whole case comes down to that question.

[00:08:22] Speaker 04:
You don't have another path to say that she's the designee.

[00:08:24] Speaker 04:
You have to make sure that she's designated.

[00:08:26] Speaker 04:
through this form and approval process.

[00:08:28] Speaker 01:
I have to make sure she's designated for the first cause of action, not for the second claim.

[00:08:32] Speaker 01:
Second claim is a death benefit.

[00:08:33] Speaker 01:
It doesn't require a designation.

[00:08:35] Speaker 01:
It just requires an incorporation by reference of a statute.

[00:08:38] Speaker 04:
See, that's what I don't understand, because that statute says that typically it's the spouse, right?

[00:08:44] Speaker 04:
And then you have kind of an automatic thing.

[00:08:46] Speaker 04:
If you have a spouse, then your benefits are going to go there.

[00:08:49] Speaker 04:
But if you don't have a spouse, then you can have a qualified designated beneficiary.

[00:08:53] Speaker 04:
But you still have to have the person designated.

[00:08:55] Speaker 01:
That's not what the statute says.

[00:08:57] Speaker 01:
The argument is quite simple, and I'm running out of my time, but the argument is simple.

[00:09:01] Speaker 01:
The plan itself incorporates by reference 401A9, all of it, the entire paragraph.

[00:09:08] Speaker 01:
And the entire paragraph has a definition of

[00:09:11] Speaker 01:
who's a designated beneficiary, who's a qualified designated beneficiary.

[00:09:16] Speaker 01:
The incorporation by reference changes the plan.

[00:09:19] Speaker 02:
But that statute that you want to incorporate deals with defined benefit plans.

[00:09:23] Speaker 02:
No, it does not.

[00:09:25] Speaker 02:
I'm sorry, not defined.

[00:09:28] Speaker 02:
When you make a contribution, contributory plans.

[00:09:31] Speaker 01:
It deals with defined benefit plans.

[00:09:32] Speaker 01:
It expressly does not deal with contributory plans.

[00:09:35] Speaker 01:
Subparagraph H,

[00:09:36] Speaker 01:
has a provision that says these are separate provisions for contributory plans.

[00:09:41] Speaker 01:
It deals with defined benefit plans.

[00:09:44] Speaker 01:
I misspoke a minute ago.

[00:09:46] Speaker 01:
The reality is that incorporation by reference, just like this court's holding in this Cayeno, incorporated by reference the whole thing and changed the meaning of the plan.

[00:09:58] Speaker 01:
What's the other interpretation that's possible?

[00:10:00] Speaker 02:
Well, but I still think that, as I read that statute, it seems to be dealing with contributory plans.

[00:10:06] Speaker 01:
It does not.

[00:10:06] Speaker 01:
You should read it again.

[00:10:08] Speaker 02:
It goes to tax consequences and whatnot.

[00:10:11] Speaker 02:
If I'm not mistaken.

[00:10:13] Speaker 02:
And there's a difference between contributory plans and defined benefit plans.

[00:10:18] Speaker 01:
There is a difference.

[00:10:19] Speaker 01:
Subparagraph H says certain provisions only apply to contributory plans.

[00:10:26] Speaker 01:
But subparagraphs A through E apply to defined benefit plans, which this is, and states

[00:10:34] Speaker 01:
We're going to pay you pursuant to these terms with these defined terms.

[00:10:38] Speaker 01:
And the plan itself says this provision is incorporated by reference.

[00:10:44] Speaker 01:
This court held in a previous case, this Cayeno, you know the case.

[00:10:48] Speaker 02:
All right.

[00:10:48] Speaker 02:
Now you're starting to repeat yourself.

[00:10:50] Speaker 02:
I know.

[00:10:51] Speaker 01:
I got it.

[00:10:51] Speaker 04:
Thank you.

[00:10:55] Speaker 04:
We'll give you a little bit of time for rebuttal.

[00:10:56] Speaker 00:
Thank you.

[00:11:04] Speaker 03:
morning your honors may it please the court Clarissa kong from trucker hus representing appellees kaiser permanente employees pension plan for the uh... for the permanente medical group and kaiser foundation health planning this case is about rules and a pension plan has rules for distribution of benefits can i jump right in i want to feel i want to make sure that i understand

[00:11:35] Speaker 04:
the process that your client says wasn't completed.

[00:11:39] Speaker 04:
So I'm going to sketch out my understanding.

[00:11:41] Speaker 04:
You tell me if I'm wrong.

[00:11:43] Speaker 04:
So there was an online form that needed to be submitted with all kinds of information to indicate that you wanted a new beneficiary for your benefits.

[00:11:51] Speaker 04:
That would get submitted to the company.

[00:11:53] Speaker 04:
There would be some sort of a review process on the company end.

[00:11:56] Speaker 04:
And then the company would send back to the employee

[00:12:01] Speaker 04:
various notifications or disclosures that had to be confirmed, received, or something like that.

[00:12:06] Speaker 04:
And then a final approval decision was made.

[00:12:08] Speaker 04:
Do I have that roughly correct?

[00:12:10] Speaker 04:
Roughly correct, Your Honor.

[00:12:11] Speaker 04:
So then let me stop you there.

[00:12:12] Speaker 04:
Then does the company claim that that first step of filling out the form and getting it submitted in the first instance was insufficient, incomplete, the wrong form?

[00:12:24] Speaker 04:
Was there some sort of defect at that first step?

[00:12:29] Speaker 03:
No, Your Honor.

[00:12:30] Speaker 03:
There was no defect after that first step.

[00:12:35] Speaker 04:
So then for the next... Sorry, I keep cutting you off.

[00:12:37] Speaker 04:
I'll let you... I just want to make sure I understand.

[00:12:40] Speaker 04:
So if that first step was sufficient, what was left for the employee to do other than sort of confirm receipt of notices that the plan would issue?

[00:12:53] Speaker 03:
There was not just confirmation of receipt.

[00:12:57] Speaker 03:
A acknowledgement that the disclosures that are required under law and under the pension plan were read and acknowledged.

[00:13:07] Speaker 03:
There is a process by which that first online initiation is not just the designation of a beneficiary, but also that the form of benefit that is being elected is permissible under the terms of the plan.

[00:13:24] Speaker 03:
And in addition, who the beneficiary would be.

[00:13:28] Speaker 04:
So the thing that I'm trying to figure out in terms of the steps and where we are and what got done and what didn't get done is how to wrestle with the substantial compliance doctrine.

[00:13:37] Speaker 04:
So I know that there's an argument that it doesn't even apply in this context.

[00:13:40] Speaker 04:
We'll get to that, set that aside for a minute.

[00:13:41] Speaker 04:
Assuming it does apply, why wouldn't it be satisfied here if the first step of submitting the form and making the change and providing all the information that the company needs to see that change, if all of that was done properly,

[00:13:54] Speaker 04:
Why wouldn't, as a matter of equity, substantial compliance come in where the person died, like she can't do the next steps?

[00:14:02] Speaker 03:
As the court noted in my opponent's argument time, that there was a piece of fact that showed that Yasha, the decedent, had not actually filled out the online election.

[00:14:23] Speaker 03:
and that her sister did, and her sister at the time, did not have a power of attorney.

[00:14:28] Speaker 03:
That's one of the reasons why there is a process.

[00:14:31] Speaker 04:
So I'm getting back to, like, that's why I was asking.

[00:14:33] Speaker 04:
From the company's perspective, was there something the matter with step one in the submission of the form, and you said no.

[00:14:38] Speaker 04:
And now you're suggesting maybe there is a problem with that first step?

[00:14:41] Speaker 03:
The form itself did not have a problem.

[00:14:45] Speaker 03:
But after, through the administration.

[00:14:47] Speaker 00:
When you say the form itself, you mean what was filled out in answer to the form did not have a problem?

[00:14:52] Speaker 03:
Correct, Your Honor.

[00:14:54] Speaker 03:
But it was after the decedent had passed away where it was confirmed that her sister was the one who had signed the forms or had filled out the online forms and had not possessed a power of attorney at the time.

[00:15:11] Speaker 04:
Why wouldn't that be a question for a jury to look at in terms of assessing whether that was a valid step or not?

[00:15:21] Speaker 03:
Well, I think you're also talking about whether substantial compliance applies.

[00:15:26] Speaker 03:
I think you said that that would be a question that we would take up later, but there is a requirement under the plan that all of these steps need to be taken.

[00:15:35] Speaker 03:
The plan provides discretion to the administrative committee to set the rules regarding administration of the plan.

[00:15:45] Speaker 04:
Well, that goes to the argument of whether substantial compliance even can work in this context.

[00:15:49] Speaker 04:
And I guess my question there is, we have substantial compliance in the context of, at the plan level and at a statutory level, if you have a list of things that you must do to accomplish some sort of task, and you get most of them done, but not all of them, maybe as a matter of equity, this doctrine of substantial compliance will step in when the circumstances are such that you're just not going to be able to finish the rest of the checklist of things to do.

[00:16:13] Speaker 04:
Why would that be different in the plan context?

[00:16:15] Speaker 04:
I understand that the plan has discretion to set the requirements for doing this task, for changing your beneficiary, has discretion to pick the form and the process.

[00:16:24] Speaker 04:
That's fine.

[00:16:25] Speaker 04:
But once a plan does pick a process, why can't we measure whether the person substantially complied with that process?

[00:16:34] Speaker 04:
I mean, once a process is picked, it's not like the plan has discretion.

[00:16:38] Speaker 04:
Or maybe you're going to tell me it is.

[00:16:39] Speaker 04:
The plan has discretion to be like, nah, that's not the process we wanted.

[00:16:42] Speaker 04:
We're going to change it.

[00:16:43] Speaker 03:
Well, Your Honor, ERISA requires the fiduciaries of the plan to operate the plan in accordance with its terms.

[00:16:50] Speaker 03:
So the terms of the plan do set the rules.

[00:16:54] Speaker 03:
And in addition, ERISA requires a plan to be administered similarly to similarly situated participants.

[00:17:04] Speaker 03:
In that way, discretion is limited to uniform operations of the plan.

[00:17:12] Speaker 03:
In order to uniformly operate and administer this plan, you need to have set rules.

[00:17:18] Speaker 03:
If you are adjudicating claims based on whether someone gets close to meeting the rules, that causes issues with uniform administration, which is required of Orissa fiduciaries.

[00:17:31] Speaker 03:
And in the context of this plan, operating the plan in accordance with its terms.

[00:17:35] Speaker 02:
Let me ask you this.

[00:17:37] Speaker 02:
Somebody in the decedent's position that is, you know, she had a, it was not well, right?

[00:17:46] Speaker 02:
And let's assume that it was still mentally competent enough and said, hmm, I think I better make arrangements for whatever pension benefits I have.

[00:17:59] Speaker 02:
Is there some place like the summary plan description or the plan itself or,

[00:18:06] Speaker 02:
Some flyer that says, okay, this is what you need to do, and lays out all the steps.

[00:18:12] Speaker 03:
Your Honor, the record does not contain whether there's a flyer, but the record does contain in the appeal determination letter a statement where the decedent did call into the Kaiser Permanente Retirement Center in November before she passed away in March.

[00:18:33] Speaker 03:
Where she asked what was required and someone did tell her what was required and I believe that is The record and one one thing she was told was she should go online So this is at the excerpts of record at 90 and

[00:19:00] Speaker 03:
There was a question about how benefits could be started.

[00:19:08] Speaker 03:
And the representative said that she needed to terminate employment first.

[00:19:15] Speaker 03:
And it was explained that she had, I guess, a friend who had received a pension while still working.

[00:19:28] Speaker 03:
And I believe that that conversation was made personally by the decedent.

[00:19:34] Speaker 02:
So what I found, I tried to look for this when I was reviewing the record.

[00:19:44] Speaker 02:
You know, the steps that one would have to follow, like, so informally, okay, you've got to go online, you have to file an application, it's going to come to us, you fill it out, we'll review it, we'll make sure everything is in order, we'll get back to you, and then we'll review it again, and you have to do all this within 60 days of your retirement.

[00:20:06] Speaker 02:
But I couldn't find anything.

[00:20:08] Speaker 02:
All it just says is subject to the form approved by the committee.

[00:20:16] Speaker 03:
Your Honor, the plan isn't able to have every single detail, every single step of administration.

[00:20:23] Speaker 03:
Instead, the plan does say that the benefit election has to be in written form, in the form prescribed, and in a form acceptable to the plan administrator.

[00:20:35] Speaker 03:
The plan then says that the administrator is empowered to administer the plan and create rules to administer the plan as it deems appropriate.

[00:20:47] Speaker 03:
That was acknowledged in the First Amendment complaint filed by plaintiff.

[00:20:52] Speaker 02:
Let me ask you this.

[00:20:53] Speaker 02:
How do you know that the sister actually filled out the form when it called for a signature put in?

[00:21:01] Speaker 02:
Her sister's name, the decedent's name.

[00:21:03] Speaker 03:
It was stated, I believe, in the appellant's declaration under penalty of perjury that was submitted in connection with.

[00:21:12] Speaker 04:
What do we do with that when we're reviewing a 12b6 ruling?

[00:21:18] Speaker 03:
Your Honor, the court did look at the documents, the correspondence, including that declaration.

[00:21:27] Speaker 03:
As incorporated by reference, it was confirmed at the hearing

[00:21:31] Speaker 03:
by plaintiff that that incorporation could occur on a 12b6.

[00:21:36] Speaker 03:
I wanted to also note that in the hearing transcript that is included in the excerpts of record, there was a question from the court whether there would be any additional facts that the plaintiff could raise, and it was confirmed at the time that there were no additional facts and that the court could make

[00:21:55] Speaker 03:
a ruling, and that's the hearing transcript is at, and that particular pin site is at the record at 031.

[00:22:03] Speaker 04:
So coming back to this question about whether substantial compliance can work in this context, the Pimentel case from California

[00:22:13] Speaker 04:
has a statement in that case that suggests that it would apply.

[00:22:16] Speaker 04:
I want to read that statement to you and give you an opportunity to tell me your position on whether Pimentel doesn't apply here or what to make of it.

[00:22:23] Speaker 04:
So this is the statement in Pimentel that I think is important.

[00:22:27] Speaker 04:
Quote, if insured has pursued the course pointed out by the laws of the association and has done all in his power to change the beneficiary, but before the new certificate is actually issued, he dies, a court of equity will treat such certificate as having been made.

[00:22:44] Speaker 04:
It's a little bit old-fashioned language, because I think the case is from the 30s.

[00:22:48] Speaker 04:
But the same idea was going on there as is going on here, of the person had taken some steps to accomplish this task of changing the beneficiary, and then they died before the process was done.

[00:22:58] Speaker 04:
And the court said, as a matter of equity, in that context, we will come in to make sure that the intention of the person gets fulfilled.

[00:23:07] Speaker 03:
Why wouldn't we apply that in this context?

[00:23:10] Speaker 03:
There was no change of beneficiary in our case.

[00:23:13] Speaker 03:
It was election to retire to terminate employment and retire.

[00:23:18] Speaker 03:
That is a different case.

[00:23:20] Speaker 03:
I think there is acknowledgement that I don't understand that.

[00:23:24] Speaker 03:
She didn't elect to stop working.

[00:23:26] Speaker 03:
She died.

[00:23:27] Speaker 03:
She did.

[00:23:28] Speaker 03:
But there is a requirement when you elect a benefit to actually terminate employment, retire and get a benefit from the plan.

[00:23:39] Speaker 03:
This plan provides if you die while still employed before you complete that election process, only certain kinds of individuals are eligible for a death benefit.

[00:23:51] Speaker 03:
And in this case, a death benefit would have been paid if the decedent were married, had a domestic partner, or a qualified dependent.

[00:24:01] Speaker 04:
But the actual form, am I correct?

[00:24:02] Speaker 04:
The actual form that was submitted is not in the record.

[00:24:07] Speaker 02:
The online form.

[00:24:08] Speaker 04:
The online form, yeah.

[00:24:11] Speaker 03:
It's not in the excerpts of record.

[00:24:13] Speaker 03:
I believe it is in the record attached to Mr. Rosati's declaration.

[00:24:19] Speaker 03:
It is not included in the excerpts of records.

[00:24:22] Speaker 04:
Is your position that that form... I haven't had a chance to look at it, so we'll go and look at the district court record and see if we can find it.

[00:24:28] Speaker 04:
Is your position that that form only made an election of type of benefit and it was not also doing some work in terms of who the beneficiary was going to be?

[00:24:37] Speaker 04:
It was doing both, Your Honor.

[00:24:38] Speaker 04:
It was doing both.

[00:24:39] Speaker 04:
So then I come back to this quote from Pimentel.

[00:24:41] Speaker 04:
If it was doing both and she was trying to indicate who should get her benefits when she died, because she knew that that was forthcoming,

[00:24:49] Speaker 04:
Why wouldn't we apply that principle from Pimentel here?

[00:24:52] Speaker 03:
Well, in order to designate a beneficiary, you actually need to elect to retire in the form of benefit.

[00:24:59] Speaker 03:
And that then requires her to have gone through this administrative process to confirm all of the elections and that the plan had some confirmation that indeed the person intended to retire and it wasn't, you know, that it was done either by their sister or somebody who had power to do that.

[00:25:19] Speaker 03:
It wasn't just that there was a benefit to be paid and there was a change in a designation of a beneficiary.

[00:25:28] Speaker 03:
The first question is whether any benefit would be paid.

[00:25:32] Speaker 03:
And under this plan, there is no benefit paid in a context where a participant dies while still employed and does not have a spouse, domestic partner, or a qualified dependent.

[00:25:45] Speaker 02:
So let me ask you one last thing.

[00:25:49] Speaker 02:
Eric, counsel argued that the plan incorporated another provision, that the result of that would be that the sister was it, designee.

[00:26:02] Speaker 02:
Can you respond to his argument on that point?

[00:26:04] Speaker 03:
Yes, your honor.

[00:26:06] Speaker 03:
The distributie is a defined term under the plan, but distributie only comes into play if you've got

[00:26:17] Speaker 03:
Benefit to distribute the required notices under the plan this is under section 8-e Subsection D is in dog that requires the Notices to be sent to the participant with the capital P defined in the plan it does not permit disclosure of those notices to a distributor

[00:26:46] Speaker 03:
The section that my opposing council has cited with regard to Distribute E, that's found in 8EH.

[00:26:56] Speaker 03:
And that has to do with the mechanism of rolling the benefit out of the plan into, say, an IRA or another qualified plan.

[00:27:07] Speaker 03:
That mechanism doesn't come into play until there is a benefit election of a particular form.

[00:27:15] Speaker 03:
You know, that section of the plan doesn't come into play unless there is a benefit election under C and the notice is under D to the participant.

[00:27:26] Speaker 00:
What if the insured is incapable of making a notification of termination of her employment for retirement?

[00:27:37] Speaker 00:
Does that mean that if she's incapable of doing that, she's also incapable of naming a beneficiary?

[00:27:46] Speaker 03:
It's possible, Your Honor.

[00:27:47] Speaker 03:
The plan does not have any sort of a judgment drafted into the plan.

[00:27:54] Speaker 03:
But it could have been a reason why there is an administrative process to assure that the benefit election that is online is confirmed by the person that is owed the benefit and that there are required distributions.

[00:28:08] Speaker 03:
There's proof of age and identity.

[00:28:16] Speaker 03:
One would think that a big pension plan such as this one needs to have rules that make sure that the administration is proper and that you can rely on something like an online benefit election.

[00:28:30] Speaker 03:
And this is the process that under the plan,

[00:28:34] Speaker 03:
the administrative committee has the discretion to implement and to create.

[00:28:39] Speaker 00:
What happens if the employee is unable to fill out the plan?

[00:28:46] Speaker 00:
Can't she authorize somebody to do it for her without a power of attorney?

[00:28:54] Speaker 03:
It's possible if there's assurance.

[00:28:56] Speaker 00:
It's not a question for substantial compliance then.

[00:28:58] Speaker 03:
Well, it is, but Your Honor, there also needs to be assurance that the

[00:29:05] Speaker 03:
The decedent did actually make that direction to question a fact, right?

[00:29:12] Speaker 00:
Well, all it has to be for 12b6 issue is that it'd be alleged.

[00:29:18] Speaker 03:
But it also taking into account all of the record, including the correspondence that stated that the plan had said she didn't have a power of attorney.

[00:29:31] Speaker 03:
It incorporates by reference the declaration from

[00:29:35] Speaker 03:
the appellant stating that she did not have a power of attorney.

[00:29:39] Speaker 03:
So it isn't a question of fact that is for a trier of fact.

[00:29:44] Speaker 03:
It could be fairly adjudicated on a 12b6 where the plan correspondence was incorporated by reference.

[00:29:54] Speaker 03:
It is referred to in the First Amendment complaint, the district court fairly incorporated by reference for the purposes of a 12b6.

[00:30:07] Speaker 04:
I don't think there are further questions.

[00:30:09] Speaker 04:
Thank you.

[00:30:09] Speaker 04:
Thank you.

[00:30:10] Speaker 04:
All right.

[00:30:11] Speaker 04:
We'll put two minutes on the clock for rebuttal.

[00:30:17] Speaker 01:
Thank you, Your Honor.

[00:30:18] Speaker 01:
There's two possible benefits here.

[00:30:20] Speaker 01:
One is the rollover benefit.

[00:30:23] Speaker 01:
Once the sister elected the rollover, she filled out the form.

[00:30:28] Speaker 01:
The form is like 10 or 12 pages.

[00:30:30] Speaker 01:
It's an electronic form that they gave her.

[00:30:32] Speaker 01:
She had her sister submit it because, as I do all the time, I have staff submit things online all the time.

[00:30:37] Speaker 01:
I don't know how to do it.

[00:30:39] Speaker 01:
Presumably Sherry's sister was not physically capable of doing it, or maybe she just wanted her sister to do it, but it was done.

[00:30:46] Speaker 01:
They knew Sherry was the beneficiary.

[00:30:48] Speaker 01:
They paid over $600,000 to her on the other benefit.

[00:30:51] Speaker 01:
There was another pension benefit, which they paid to Sherry.

[00:30:54] Speaker 01:
They knew that Sherry was a designated beneficiary.

[00:30:57] Speaker 01:
They note that in the letter to her.

[00:30:59] Speaker 01:
So the issue is on the single sum option, that's a benefit that can be paid after death.

[00:31:05] Speaker 01:
And after death, the notices that they're talking about by the terms of the plan can be answered by Sherry.

[00:31:13] Speaker 01:
All that has to be done is Sherry elects, roll it over, or the sister elects, roll it over into an IRA.

[00:31:21] Speaker 01:
And then, if they need more information about, we notify you about this, the plan itself says the distributor can respond.

[00:31:30] Speaker 01:
That can be paid after Sherry is dead, or after the sister is dead.

[00:31:35] Speaker 01:
The other option

[00:31:37] Speaker 01:
is the death benefit.

[00:31:39] Speaker 01:
If she doesn't get the first benefit, she's not asking for both.

[00:31:43] Speaker 01:
If she doesn't get the first benefit, there's no designation for the second benefit.

[00:31:47] Speaker 01:
The designation would be what the plan says.

[00:31:51] Speaker 01:
And what the plan says is it incorporates by reference

[00:31:55] Speaker 01:
401A9, the whole thing.

[00:31:57] Speaker 01:
And that includes categories of people who are eligible for this benefit, which by definition defines sharing.

[00:32:05] Speaker 01:
It says right in 401A9A sub 2, we're going to pay it pursuant to these terms.

[00:32:13] Speaker 01:
So that means we have a different standard for defining who's an eligible beneficiary.

[00:32:18] Speaker 01:
We have a different standard.

[00:32:19] Speaker 01:
We have a standard for eligible qualified beneficiary.

[00:32:22] Speaker 01:
And Sherry fits the criteria.

[00:32:24] Speaker 01:
It knocks out.

[00:32:26] Speaker 01:
I mean, it's just they incorporated by reference this legitimate argument.

[00:32:31] Speaker 01:
That's the argument.

[00:32:32] Speaker 01:
That's clearly what happened here.

[00:32:33] Speaker 04:
The quote that I read from the Pimentel case is not really discussed in the briefs.

[00:32:37] Speaker 04:
Do you think that that case applies here, the principle that I'm talking about?

[00:32:40] Speaker 01:
I think I cited it in the letter I wrote them in the appeal.

[00:32:43] Speaker 04:
Yeah, the case is cited, but the principle that I quoted is not discussed.

[00:32:47] Speaker 04:
So I'm trying to figure out your position of you think that that applies and that there aren't.

[00:32:52] Speaker 04:
I mean, your friend across the aisle is saying that there are material differences between what was going on in that case and what's going on in this case.

[00:32:58] Speaker 01:
I don't see any, because this court is how the California law applies.

[00:33:02] Speaker 01:
That's what California law says.

[00:33:04] Speaker 04:
All right, any further questions?

[00:33:06] Speaker 04:
All right, thank you, Council.

[00:33:08] Speaker 04:
The matter of Liu versus Kaiser Permanente employee pension plan is submitted.

[00:33:15] Speaker 04:
And that completes our arguments for this morning.