E.H. Oftedal Sons

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United States Court of Appeals, Ninth CircuitDec 14, 2009
356 Fed. Appx. 945 (9th Cir. 2009)

No. 08-35800.

Argued and Submitted October 16, 2009.

Filed December 14, 2009.

Philip Bradford Condra, Esquire, Perry Joel Schneider, Milodragovich, Dale, Steinbrenner Nygren P.C., Missoula, MT, for Plaintiff-Appellant.

Shane P. Coleman, Esquire, Jason S. Ritchie, Esquire, Holland Hart, LLP, Billings, MT, for Defendants-Appellees.

Appeal from the United States District Court for the District of Montana, Richard F. Cebull, Chief District Judge, Presiding. D.C. No. 1:07-cv-00076-RFC.

Before: RAWLINSON and CALLAHAN, Circuit Judges, and BURNS, District Judge.

The Honorable Larry A. Burns, United States District Court Judge for the Southern District of California, sitting by designation.


This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.

Appellant Matthew Q. Rippentrop (Rippentrop) challenges the district court's summary judgment in favor of Appellees E.H. Oftedal Sons, Inc. Employee Stock Ownership Plan (Plan) and E.H. Oftedal Sons, Inc. (Oftedal). The district court rejected Rippentrop's challenge to Oftedal's denial of his benefits claim pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq.

Because the Plan conferred discretionary authority upon Oftedal to determine eligibility for benefits, Oftedal's decision to deny benefits is reviewed for an abuse of discretion. See Nolan v. Heald Coll., 551 F.3d 1148, 1153 (9th Cir. 2009). Contrary to Rippentrop's assertion, Oftedal's structural conflict of interest does not compel application of a de novo review standard. See Abatie v. Alta Health Life Ins. Co., 458 F.3d 955, 965 (9th Cir. 2006) (en banc) ("Abuse of discretion review applies to a discretion-granting plan even if the administrator has a conflict of interest") (emphasis added) (footnote reference omitted). Rather, Oftedal's conflict of interest is weighed as a factor in the abuse of discretion analysis. See id. at 966-69. In this case, the district court properly "temper[ed] the abuse of discretion standard with skepticism commensurate with the conflict." Nolan, 551 F.3d at 1153 (citation and internal quotation marks omitted).

The governing regulations provide that "a plan shall determine hours of service from records of hours worked and hours for which payment is made or due . . ." 29 C.F.R. § 2530.200b-3(a) (emphasis added). Alternatively, a plan may use "an equivalency" method to determine hours of service. Id. Equivalency methods may be used even if records of hours are maintained, provided that the plan sets forth the equivalency method to be used. See 29 C.F.R. § 2530.200b-3(c)(1). Accordingly, the district court did not err when it concluded that applying the 45-Hour equivalency method to calculate Rippentrop's hours of service was reasonably within Oftedal's discretion.


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