ERISA-Ninth Circuit Rules That, Since The Plaintiff Has A Colorable Claim To Benefits, A District Court Has Subject Matter Jurisdiction Over The Suit And May Hear The Case

In Leeson v. Transamerica Disability Income Plan, No. 10-35380 (9th Cir. 2012), the plaintiff, Jack Leeson (“Leeson”), filed this case against the defendant, Transamerica Corporation (“Transamerica”), under ERISA to challenge the termination of his long-term disability (“LTD” ) benefits. The district court held that Leeson was not a plan participant, within the meaning of the plan in question due to a leave of absence from employment at the applicable time. Therefore, Leeson did not have standing to bring the suit, and the district court did not have subject matter jurisdiction over the case. As such, the district court dismissed the case. Leeson appealed.

In this appeal, Leeson argues that, because he alleged a colorable claim for benefits, the district court had subject matter jurisdiction, and it was error to dismiss the case. The Ninth Circuit Court of Appeals (the “Court”) agreed with Leeson. It concluded that an individual need not assert anything other than he or she has a colorable claim to benefits in order for the district court to have subject matter jurisdiction over the case. The individual need not be a “participant”, as defined in the plan or in ERISA (see 29 U.S.C. section 1002(7) for the ERISA definition), for the court to have such jurisdiction. The issue of whether the individual is actually a participant goes to the merits of the claim, not to the court’s jurisdiction. As such, the Court vacated the district court’s decision and remanded the case back to the district court.

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