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Case Name:
Case Number: Date Filed:
98-55096 02/10/00

                                                     No. 98-55096
                                                     D.C. No.
                                                     CV-97-06153 SVW
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued and Submitted
September 13, 1999--Pasadena, California
Filed February 10, 2000
Before: Betty B. Fletcher and Harry Pregerson,
Circuit Judges, and Charles R. Weiner, 1
Senior District Judge.
Opinion by Judge B. Fletcher

1 Charles R. Weiner, Senior United States District Judge for the Eastern District of Pennsylvania, sitting by designation.

Edward A. Scallet, LeBoeuf, Lamb, Green & MacRae, Washington, D.C., for the plaintiff-appellant.
James B. Kropff, Girardi & Keese, Los Angeles, California,
for the defendant-appellee.
B. FLETCHER, Circuit Judge:
Reynolds Metals Company seeks reimbursement for payments it made to Robert Ellis because Ellis received a third party settlement from an accident in which he was injured.
We have previously held, in FMC Medical Plan v. Owens, 122 F.3d 1258, 1262 (9th Cir. 1997), that actions brought by fiduciaries under the Employee Retirement Income Security Act of 1974 ("ERISA") against beneficiaries to enforce reimbursement clauses (also known as "subrogation " clauses) contained in ERISA plans should be dismissed. This case is controlled by Owens. Therefore, we affirm the district court's dismissal of this action.

Robert Ellis, the defendant, was an employee of Reynolds Metals Company ("Reynolds Metals") and a beneficiary in its group medical plan. Ellis was involved in an auto accident in 1994 and was seriously injured. In the aftermath of the accident, the plan paid "no less than $561,145.21" in benefits to Ellis and his health care providers.
The plan contains a contractual reimbursement provision
which states: "If the Plans paid for health care services, supplies or treatment and you receive payment from a third party, you must reimburse the Plans, but not more than the amount of the third-party payment you received." The plan further specifies that reimbursement is required whether payments received are partly or entirely "for health care expenses as the result of a legal settlement or other action arising from an accident, injury or illness."
Sometime in 1997, Ellis settled a claim against the third parties responsible for the accident, receiving an amount in excess of the benefits paid to him by the plan. Since that time, he has refused to reimburse Reynolds Metals for any of the benefits paid to him.
On August 15, 1997, Reynolds Metals filed suit in federal district court seeking to enforce the contractual reimbursement provision pursuant to ERISA S 502(a)(3), 29 U.S.C. S 1132(a)(3). In lieu of answering the complaint, Ellis made a motion to dismiss the action and the district court granted the motion.
[1] ERISA provides for a federal cause of action for civil claims aimed at enforcing the provisions of an ERISA plan.
See 29 U.S.C. S 1132(e)(1). In order to make such a claim, however, a plaintiff must fall within one of ERISA's nine specific civil enforcement provisions, each of which details who may bring suit and what remedies are available. See 29 U.S.C. S 1132(a)(1)-(9). Reynolds Metals invokes the third of the

nine categories, which provides that a civil action may be
      (3) by a participant, beneficiary, or fiduciary (A) to
      enjoin any act or practice which violates any provi-
      sion of this subchapter or the terms of the plan, or
      (B) to obtain other appropriate equitable relief (i) to
      redress such violations or (ii) to enforce any provi-
      sions of this subchapter or the terms of the plan;
29 U.S.C. S 1132(a)(3).
[2] To prevail, Reynolds Metals must demonstrate (1) that
it is an ERISA fiduciary, and (2) that it is seeking equitable,
rather than legal, relief. See Administrative Comm. v. Gauf,
188 F.3d 767, 770 (7th Cir. 1999); Owens, 122 F.3d at 1260.
[3] Because there is no serious dispute regarding the status
of Reynolds Metals as a fiduciary, the sole issue is whether
the relief the plaintiff seeks -- namely, reimbursement under
the contractual reimbursement provisions of the ERISA plan
-- is properly characterized as "equitable" within the meaning
of S 1132(a)(3).
In Owens, FMC, an ERISA fiduciary, brought suit against
Jeffrey Owens, an FMC employee and beneficiary of the
ERISA plan, to enforce a contractual reimbursement provi-
sion. Owens was injured in an automobile accident. As a
result of the accident, FMC paid benefits to Owens totaling
roughly $50,000. Owens subsequently settled his claim
against the driver of the other car for $100,000. The FMC
plan included a contractual reimbursement provision. Prior to
paying benefits, FMC also required that Owens sign an addi-
tional agreement restating his reimbursement obligation. This
obligation notwithstanding, Owens refused to reimburse FMC
for the benefits he had received. FMC brought suit in federal
court seeking to obtain "equitable reimbursement. " Owens,
122 F.3d at 1259.

In Owens, we concluded that the relief FMC sought was
not equitable within the meaning of S 1132(a)(3). See id. at
1262. In reaching this conclusion, we rejected several alterna-
tive interpretations of the remedy FMC sought. The opinion
begins by rejecting the notion that the remedy sought was
equivalent to the equitable remedy of subrogation, noting that
FMC was not "stepping into the shoes" of its beneficiary in
an effort to proceed directly against the third-party tortfeasor.
See id. at 1260. The opinion next distinguishes the requested
reimbursement remedy from restitution, explaining that resti-
tution requires the showing of fraud or wrong-doing. See id.
at 1261. Owens, in contrast, had rightfully received the bene-
fits to which he was entitled. Finally, we rejected the confla-
tion of reimbursement with the remedy of constructive trust.
See id. A constructive trust remedy is appropriate only where
there has been a breach of fiduciary duty and an "ill-gotten"
gain, neither of which is present in the typical action seeking
contractual reimbursement.
[4] Reynolds Metals admits that its appeal is effectively
indistinguishable from Owens in that it is an effort by an
ERISA fiduciary to enforce contractual reimbursement provi-
sions against beneficiaries. While it is true that the plaintiff
here couched its remedial prayers in equitable language, it is
clear that a court must look "to the substance of the remedy
sought, . . . rather than the label placed on that remedy." Id.
at 1261 (quoting Watkins v. Westinghouse Hanford Co., 12
F.3d 1517, 1528 n.5 (9th Cir. 1993)); see also Mertens v.
Hewitt Associates, 508 U.S. 248, 255 (1993) ("Although they
often dance around the word, what petitioners in fact seek is
nothing other than compensatory damages . . . ."). We
declined "to extend the interpretation of section 1132(a)(3) to
include a claim for reimbursement." Owens, 122 F.3d at 1262.2
2 Owens rests its dismissal on the lack of subject matter jurisdiction. But
see Cement Masons Health and Welfare Trust Fund for Northern Califor-
nia v. Stone, 197 F.3d 1003, 1008 (9th Cir. 1999) (reaffirming the substan-
tive holding in Owens but dismissing on the merits rather than on subject
matter jurisdiction). For our purposes, in evaluating the substantive hold-
ing of Owens requiring the dismissal of reimbursement claims for third
party settlements under ERISA, the dismissal could be based either on
lack of subject matter jurisdiction or on the merits.

The existence of such controlling Ninth Circuit precedent
should end the matter. See Roundy v. Commissioner, 122 F.3d
835, 837 (9th Cir. 1997) ("A three-judge panel is bound by a
prior judgment of this court unless the case is taken en banc
and the prior decision is overruled."). However, Reynolds
Metals contends that Owens was wrongly decided and urges
the panel to call for an initial hearing en banc. See Ninth Cir-
cuit General Rule 5.2.b.
Reynolds Metals contends that Owens directly conflicts
with both Supreme Court and Ninth Circuit authority. Taking
their lead from the Eleventh Circuit, Reynolds Metals attacks
Owens as based on an "unduly narrow reading of Mertens."
Blue Cross & Blue Shield v. Alabama, 138 F.3d 1347, 1353
n.5 (11th Cir. 1998). In Mertens, the question was whether
ERISA authorizes suits for money damages against nonfidu-
ciaries who knowingly participate in a fiduciary's breach of
duty. The parties focused on the propriety of the relief, rather
than the availability of an action under ERISA against a non-
fiduciary, leading the Supreme Court to limit its attention to
the phrase "other appropriate equitable relief " in S 1132(a)(3).
See Mertens, 508 U.S. at 254-55. The Court concluded that
"equitable relief" in the context of S 1132(a)(3) must be
understood to mean "those categories of relief that were
typically available in equity (such as injunction, mandamus,
and restitution, but not compensatory damages)." Id. at 256
(emphasis in original).
The panel in Owens relied heavily on Mertens, and there is
not a conflict between the two opinions. Reynolds Metals sug-
gests that Owens conflicts with Mertens  because Owens bars
all claims for monetary relief under S 1132(a)(3). This badly
mischaracterizes the Owens opinion -- the opinion accepts, as
does Mertens, that restitution and constructive trust remedies
may be appropriate under S 1132(a)(3), provided some fraud
or wrong-doing is shown. See Owens, 122 F.3d at 1261.
Reynolds Metals also suggests that Owens conflicts with
Verity Corp. v. Howe, 516 U.S. 489 (1996). In Verity, the

Supreme Court held that S 1132(a)(3) supports a cause of
action for individual beneficiaries who allege that a plan fidu-
ciary made material misrepresentations about their benefits.
Reynolds Metals views this holding as amounting to an
endorsement of tort damages under S 1132(a)(3) and abrogat-
ing the narrow reading of Mertens adopted by our court in
Owens. This argument is meritless. The remedy the Supreme
Court endorsed in Verity was reinstatement, a traditionally
equitable one. See id. at 495 (monetary relief not at issue).
Moreover, given that the beneficiaries' action was premised
on a breach of fiduciary duty, Verity involved a circumstance where fraud and "ill-gotten" gain figured prominently.
Reynolds Metals also claims that Owens represents an intra-circuit split with two other Ninth Circuit authorities.
This is not the case. The first decision Reynolds Metals relies on, Chitkin v. Lincoln Nat'l Life Ins. Co., 1993 WL 484720
(9th Cir. Nov. 24, 1993), is an unpublished memorandum dis-
position, and thus is not binding precedent.3 The second opin-
ion relied upon by Reynolds Metals, Pacificare, Inc. v.
Martin, 34 F.3d 834 (9th Cir. 1994), also creates no intra-circuit conflict. Although Pacificare involved a contractual reimbursement provision, we never reached the question of whether reimbursement was an "equitable" remedy under S 1132(a)(3). See id. at 838 ("Thus far, Pacificare has not pur-
sued a claim for equitable relief under section 1132(a)(3), and
neither party has developed the arguments to support or reject such a claim.").
[5] In summary, Reynolds Metals has failed to demonstrate that Owens conflicts with any binding Supreme Court or Ninth Circuit authority. This undercuts its claim that an initial hearing en banc is necessary.
3 The fact that the memorandum disposition was published as an appendix to the district court's opinion on remand does not transform the disposition into binding precedent.

[6] This case is controlled by Owens, which holds that actions by ERISA fiduciaries seeking to enforce an ERISA plan's contractual reimbursement provisions do not fall within S 1132(a)(3). Therefore, we affirm the district court's dismissal of Reynolds Metals' action. AFFIRMED.