John Sender v. Franklin Resources, Inc.

MEMORANDUM

Plaintiff John B. Sender appeals the judgment of the district court in favor of defendant Franklin Resources, Inc. We reverse and remand for further proceedings.

Sender’s claim under Cal. Corp.Code § 419(b) was not preempted by ERISA. The duty under that statute to replace a lost stock certificate is placed on the corporation issuing the shares. Franklin does not dispute that the certificate should have been delivered to Sender. There is evidence that Franklin recognized Sender as the owner of the shares that were formerly in his Employee Stock Option Plan (“ESOP”) account. It issued to him and received back from him proxy cards in 1983 and 1984, and it also paid him dividends, at least in 1983. Like any shareholder, Sender can seek replacement of a lost certificate. That claim does not require any interpretation of plan terms. The duty of Cal. Corp.Code § 419(b) is independent from ERISA, and the claim under that statute is not preempted. See Aetna Health Inc. v. Davila, 542 U.S. 200, 210 , 124 S.Ct. 2488 , 159 L.Ed.2d 312 (2004). As long as there remains a claim under ERISA, however, the district court can exercise supplemental jurisdiction over the Cal. Corp.Code §…