ERISA-Ninth Circuit Finds No Breach Of ERISA Fiduciary Duty Stemming From Failure To File Form 990 (TEO’s Tax Return)

In Barboza v. Cal. Ass’n. of Prof. Firefighters, No. 11-15472 (9th Cir. Apr. 7, 2015), plaintiff David Barboza, seeking disability benefits, challenged (among other matters) the district court’s grant of summary judgment to the defendants on Barboza’s claim that they breached their fiduciary duties by failing to file Internal Revenue Service (IRS) Form 990 (a tax-exempt organization’s tax return) on the advice of their counsel and accountant.

The Ninth Circuit Court of Appeals upheld the summary judgment, stating that Barboza has not provided any evidence that, when the defendants failed to file Form 990, the defendants did not: (1) investigate the expert’s qualifications-the experts being defendant’s legal counsel and accountant, (2) provide the experts with complete and accurate information, and (3) make certain that reliance on the expert’s advice is reasonably justified under the circumstances, in violation of ERISAs prudent man standard of care.