
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT                              _________________________          No. 95-2244                                 WILLIAM DEGNAN, JR.,                                Plaintiff, Appellant,                                          v.                         PUBLICKER INDUSTRIES, INC., ET. AL.,                                Defendants, Appellees.                              __________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                       [Hon. Mark L. Wolf, U.S. District Judge]                                           ___________________                              _________________________                                        Before                            Selya and Cyr, Circuit Judges,                                           ______________                            and Gertner,* District Judge.                                          ______________                              _________________________               Sydelle Pittas for appellant.               ______________               Thomas E. Shirley,  with whom Liam T.  O'Connell and Choate,               _________________             __________________     _______          Hall & Stewart were on brief, for appellees.          ______________                              _________________________                                     May 1, 1996                              _________________________          ________________          *Of the District of Massachusetts, sitting by designation.                                                               SELYA, Circuit Judge.   William Degnan, Jr., the former                    SELYA, Circuit Judge.                           _____________          president of Fenwal Electronics,  Inc., a wholly owned subsidiary          of Publicker  Industries, Inc., initiated  this misrepresentation          action  in  a  Massachusetts   state  court  against  Fenwal  and          Publicker  on  November  14,  1994.    He  framed  his  complaint          exclusively in terms of state law, alleging in substance that the          defendants induced him to take early retirement at age fifty-five          by promising to revise a corporate  retirement plan so as to make          him  eligible for full retirement benefits at that age; and that,          after he retired  (giving up  lucrative employment  opportunities          elsewhere), the  defendants paid him  the agreed amount  for only          eighteen months before they breached their promise (claiming that          he did not  qualify for  full benefits under  the amended  plan).          The defendants removed the case to the federal district court and          sought dismissal on preemption grounds.                    On September 8, 1995, the district court found that the          Employee  Retirement  Income Security  Act  of  1974 (ERISA),  29          U.S.C.    1001 et seq.,  and in particular,  ERISA's broad-gauged                         __ ____          preemption clause, 29 U.S.C.   1144(a) (1994), preempted Degnan's          common law misrepresentation claims against the defendants.  Upon          reviewing the  matter de novo, see  Correa-Martinez v. Arrillaga-                                __ ____  ___  _______________    __________          Belendez, 903 F.2d  49, 52  (1st Cir.  1990), we  agree that  the          ________          common law claims were preempted and that the complaint as framed          courted  dismissal.   See Fed.  R. Civ. P.  12(b)(6) (authorizing                                ___          dismissal  for  the  pleader's  failure to  state  an  actionable          claim).                                          2                    We  need  not  dwell  upon the  rationale  for  finding          preemption.   Suffice it to say that,  in its order of dismissal,          the district court characterized  the instant case as "analogous"          in all material  respects to  a case previously  decided by  this          court, namely, Carlo v. Reed Rolled  Thread Die Co., 49 F.3d 790,                         _____    ___________________________          793-95 (1st Cir. 1995)  (ruling that ERISA preempted a  state-law          misrepresentation claim).   We readily agree  that Carlo controls                                                             _____          here, and add only that in his appellate briefs Degnan has failed          to advance any plausible basis  for distinguishing this case from          Carlo.          _____                    Under ordinary circumstances, this  would be the end of          the matter.  Where, as here, the plaintiff chooses not to ask the          trial court for permission to amend but stands upon his complaint          in the face of an  order dismissing it, and thereafter loses  the          ensuing  appeal, he  is  not entitled  to  a second  bite  of the          banana.   See, e.g., Royal Business Group, Inc. v. Realist, Inc.,                    ___  ____  __________________________    _____________          933 F.2d 1056, 1066 (1st Cir. 1991) (explaining that when a party          elects to appeal rather than attempt to amend a complaint, it ill          behooves that party to suggest at a later date that it could have          satisfied   the  district   court's  concerns  by   amending  the          complaint);  James v.  Watt,  716 F.2d  71,  78 (1st  Cir.  1983)                       _____     ____          (admonishing that courts should not routinely allow plaintiffs to          "pursue a  case to judgment and then, if they lose, to reopen the          case by amending their  complaint to take account of  the court's          decision"), cert. denied, 467 U.S. 1209 (1984).                      _____ ______                    The  rule,  however,  is   not  inflexible.    We  have                                          3          recognized that, even if  the pleader has  elected to dig in  his          heels,  appealing  from  a  judgment  of  dismissal  rather  than          endeavoring to reframe his complaint, "an appellate court has the          power, in the interest of justice, to grant leave to amend if the          circumstances warrant."  Rivera-Gomez v. de Castro, 843 F.2d 631,                                   ____________    _________          636 (1st Cir. 1988).  This approach finds ample  support in other          appellate authority, see,  e.g., Bryan v.  Austin, 354 U.S.  933,                               ___   ____  _____     ______          933 (1957) (per  curiam); Whitelock v. Leatherman, 460  F.2d 507,                                    _________    __________          515 (10th Cir. 1972);  Moviecolor Ltd. v. Eastman Kodak  Co., 288                                 _______________    __________________          F.2d 80, 88 (2d Cir.), cert.  denied, 368 U.S. 821 (1961),  among                                 _____  ______          the commentators, see, e.g., 3 J. Moore, Moore's Federal Practice                            ___  ____              ________________________            15.11  at 15-109 (1983),  in the Code,  see, e.g., 28  U.S.C.                                                      ___  ____          2106  (1994)  ("[A] court  of appellate  jurisdiction  may .  . .          direct  the entry of  such appropriate judgment  . . .  as may be          just under  the circumstances."), and in the spirit that pervades          the Civil Rules,  see, e.g.,  Fed. R. Civ.  P. 15(a)  (counseling                            ___  ____          that  leave to  amend  "shall be  freely  given when  justice  so          requires").                    This is  a suitable  instance  in which  to invoke  the          exception  to  the general  rule.   The  appeal  is  in a  highly          idiosyncratic  posture.  On March 19, 1996, after the parties had          briefed  this  appeal but  two  weeks before  oral  argument, the          Supreme Court issued its opinion in Varity Corp. v. Howe, 116  S.                                              ____________    ____          Ct. 1065 (1996).   Varity shed new light  on the Court's  earlier                             ______          holding  in Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S.                      ________________________________    _______          134  (1985), and  indicated  that, in  certain circumstances,  an                                          4          individual plan participant or beneficiary may be able to  obtain          equitable relief under  the ERISA statute itself  for harm caused                           _______________________________          by an  employer's  breach  of  its fiduciary  obligations.    See                                                                        ___          Varity, 116  S. Ct.  at 1075-79;  see  also 29  U.S.C.    1132(a)          ______                            ___  ____          (1994) (enumerating equitable remedies  under ERISA).  Because we          deemed Varity to have possible applicability here, we immediately                 ______          called the opinion to the parties' attention and directed them to          be prepared  to discuss it.   We heard oral argument  on April 2,          1996.   We then ordered  the parties to  file supplemental briefs          addressing  the potential  applicability  (if any)  of Varity  to                                                                 ______          Degnan's situation.1                    We  have examined the record  in this case  in light of          Varity  and of  the parties'  supplemental briefs.   We  see both          ______          procedural  and  substantive  problems.   The  procedural problem          stems from the  fact that Degnan framed his suit  as a common law          cause of action for misrepresentation rather  than as a statutory          ERISA-based claim for breach  of a fiduciary duty.   The district          court  treated  the  claim  as  asserted  and,  under  our  Carlo                                                                      _____          precedent, correctly  found the  pleaded  cause of  action to  be          preempted.  The plaintiff neither asked the court to consider the          possibility of a statutorily based claim nor sought leave to file          an amended complaint.   As we have said, these failings  would be          fatal in the typical case.  See, e.g., Royal Business Group,  933                                      ___  ____  ____________________          F.2d at 1066.                                        ____________________               1Simultaneous with the filing of his supplemental brief, the          appellant also moved to enlarge the record on appeal.  In view of          our disposition today, the motion is moot.                                          5                    This case, however, is  atypical.  When Degnan eschewed          amendment  in the district court, Varity had not yet been decided                                            ______          and the state of the law was in flux.  We think it is appropriate          for  an  appellate   court  to  consider  granting  the  type  of          extraordinary  relief   that  the  plaintiff   requests  here              permitting an  amendment even  after affirmance  of  an order  of          dismissal     when an  important  new decision  intervenes.   See                                                                        ___          Dartmouth  Review v. Dartmouth College, 889 F.2d 13, 23 (1st Cir.          _________________    _________________          1989) (suggesting  that such  an amendment  should be  allowed if          "some  new  concept  has  surfaced,  making  workable  an  action          previously  in the doldrums"); Pross  v. Katz, 784  F.2d 455, 460                                         _____     ____          (2d  Cir.  1986) (similar).    That  scenario, broadly  speaking,          appears to exist here.                    We  find  added  impetus  for  applying  the  exception          because of the  nature of the case.  ERISA  is a remedial statute          designed to fashion anodynes  that protect the interests  of plan          participants  and  beneficiaries.     See  29  U.S.C.     1001(b)                                                ___          (articulating  policy  "to  protect  .   .  .  the  interests  of          participants in employee benefit  plans and their beneficiaries .          . . by  providing for appropriate remedies,  sanctions, and ready          access to the  Federal courts"); see also  Varity, 116 S.  Ct. at                                           ___ ____  ______          1078; Johnson v.  Watts Regulator  Co., 63 F.3d  1129, 1132  (1st                _______     ____________________          Cir. 1995).  Courts  should not hasten to employ  technical rules          of  pleading and practice to defeat that  goal.  In this respect,          Fitzgerald  v.  Codex Corp.,  882 F.2d  586  (1st Cir.  1989), is          __________      ___________          instructive.   There the  state law remedies  that the  plaintiff                                          6          sought were held  to have been entirely displaced  by ERISA.  See                                                                        ___          id. at  588.  Although the plaintiff had not attempted to state a          ___          federal claim in the district court, we nonetheless  proceeded to          inquire  whether his complaint could be read to contain a federal          claim  upon which  relief  might be  granted.   See  id. at  589.                                                          ___  ___          Answering that question in the affirmative, we reversed the order          of dismissal.  See id.                         ___ ___                    The  short of it is  that in Fitzgerald,  as in Rivera-                                                 __________         _______          Gomez, we departed from our usual praxis to avoid injustice.   We          _____          believe that, given the purport and timing of the Court's opinion          in  Varity, the same result  should obtain here.   The procedural              ______          barrier to permitting an amendment is, therefore, superable.                    The substantive problem is whether or not the plaintiff          can  state a claim  under Varity.2   At this  juncture, we simply                                    ______          cannot tell.  Because the plaintiff  has not yet tried to plead a          Varity claim, we  do not know  how well the  shoe fits, or if  it          ______          fits at  all.  Rather  than guessing at what  facts the plaintiff          conceivably could allege  in an amended complaint,  we think that          the course of prudence is to give the plaintiff an opportunity to          supplement  his  factual  allegations  with  whatever  additional          averments  he believes  would buttress  Varity-type  claims, and,                                                  ______          once  an amended complaint is filed, to permit the district court          to address the substantive problem, i.e., the  sufficiency of the                                        ____________________               2We  note  that  the  substantive  and  procedural  problems          interlock because leave to  file an amended complaint  should not          be granted  if it is clear  that the amendment would  be in vain.          See  Foman v. Davis,  371 U.S. 178,  182 (1962); Correa-Martinez,          ___  _____    _____                              _______________          903 F.2d at 59.                                          7          amended complaint, in the first instance.                    We  need go no further.   We remand  with directions to          grant  the  plaintiff permission  to  file  an amended  complaint          limited  to whatever  Varity-type  claims he  may envision  under                                ______          ERISA.  From that  point forward, the district court  can proceed          in the ordinary course.  For our part, we take no view of whether          the plaintiff's case fits the Varity mold from the perspective of                                        ______          either pleadings or proof.                    We affirm the dismissal of the complaint insofar as  it                    We affirm the dismissal of the complaint insofar as  it                    _______________________________________________________          purports to state claims based on the common law or on state law,          purports to state claims based on the common law or on state law,          _________________________________________________________________          and we  remand the  case to the  district court  with an  express          and we  remand the  case to the  district court  with an  express          _________________________________________________________________          direction  that  it permit  the  plaintiff  to  file  an  amended          direction  that  it permit  the  plaintiff  to  file  an  amended          _________________________________________________________________          complaint limited to his claim(s) under ERISA.  The parties shall          complaint limited to his claim(s) under ERISA.  The parties shall          _____________________________________________   _________________          bear their own costs.          bear their own costs.          ____________________                                          8
