ERISA did not preempt claim seeking replacement of missing ESOP certificates

ERISA did not preempt a claim filed under a California statute by the owner of shares in an ESOP account asking that lost share certificates be replaced, the U.S. Court of Appeals in San Francisco (CA-9) has ruled.

Under Cal. Corp. Code §419(b), if a corporation refuses to issue a new share certificate to an owner who alleges the original has been lost, stolen or destroyed, the owner may file suit in state court to require the corporation to issue a new certificate.

The plaintiff sought to compel a corporation to replace lost certificates for shares that were formerly in his account in an ESOP no longer in existence. The corporation asserted that the stock certificates had been sent to the plaintiff. The district court granted judgment for the corporation.


The Ninth Circuit reversed and remanded the lower court’s ruling. ERISA did not preempt the state law claim. A request for a replacement of a lost certificate requires no interpretation of plan terms. The duty to replace lost certificates is placed on the corporation that issues the shares and is a duty independent of ERISA.

Proper defendant

The district court erred when it ruled that the corporation was not a proper defendant. The plaintiff asserted the corporation had been the plan administrator. Given the evidence at the pleadings stage of the litigation, it was not implausible to hold the corporation responsible as the plan administrator. And, even if the corporation was not the plan administrator, based on the alleged circumstances, the corporation was still a logical defendant.

Source: Sender v. Franklin Resources, Inc. (CA-9).

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