Schrader

ORDER GRANTING PLAINTIFF’S MOTION TO REMAND

I.

INTRODUCTION & FACTUAL BACKGROUND

On May 13, 1996, plaintiff Ottis J. Schrader filed this shareholder’s derivative action in the Los Angeles County Superior Court on behalf of Atlantic Richfield Co. (“ARCO”) against defendant Beverly L. Hamilton, and nominal defendant ARCO. Hamilton, ARCO’s Vice-President and Investment Officer and an administrator under the Employees Retirement and Income Security Act of 1974 (“ERISA”), allegedly made highly speculative investments and caused ARCO’s Money Market Plus Benefit Plan (the “MMP Fund” or “MMP Plan”), an ERISA employee investment plan, to lose $22.3 million. ARCO reimbursed the MMP Plan for the money it lost as a result of the bad investments, and Schrader filed this action to recover damages for the concomitant loss to shareholders. Schrader’s complaint asserts a single cause of action against the defendants for breach of their corporate fiduciary duties. Defendants timely removed the case to federal court, alleging jurisdiction under ERISA. Defendants contend that plaintiffs state law claims are preempted by ERISA.

The MMP Fund was marketed as a highly conservative investment vehicle…