Schultz

Opinion by Judge CHOY; Dissent by Judge ALDISERT.

Plaintiff-appellant James F. Schultz (“Schultz”) appeals the district court’s Fed. R.Civ.P. 12(b)(1) dismissal of his Employee Retirement Income Security Act (“ERISA”) claim against his former employer, PLM International, Inc. (“PLM”). 1 In this appeal, Schultz makes two main arguments. First, he claims that the district court erred in concluding that he lacked standing to pursue his ERISA action because he did not maintain his status as a participant in PLM’s Employee Stock Ownership Plan (“ESOP”) throughout the duration of the litigation. Second, Schultz asserts that the district court erred in deciding that he lacked standing because he did not present a colorable claim for benefits. We have jurisdiction under 28 U.S.C. § 1291 , and we reverse the decision of the district court. We hold that because Schultz was a participant at the time that he filed his lawsuit, he had standing to maintain his ERISA action.

Factual and Procedural Background

Schultz is a former employee of PLM. In 1989, PLM instituted an ESOP under ERISA. Participants in the ESOP accrued retirement benefits, which included shares of preferred stock in PLM.…

dissenting:

I disagree with the selected major premise of the basic categorical syllogism that under-girds the majority’s view:

Maj. Op. at 1142 (emphasis added).

For the conclusion to stand the content of the premises must be true. 1 Here the major premise of Appellant’s argument, which was accepted by the majority-that the January 1996 payment to Schultz was a “benefit” to which he was entitled at the time he filed his lawsuit-is not true. What he received after filing suit was not “benefits”, but mere “residual assets.” Borst v. Chevron Corp., 36 F.3d 1308, 1311 (5th Cir.1994). The distinction between “benefits” and “residual assets” set forth in Borst has been accepted by this court. Jacobson v. Hughes Aircraft Co., 105 F.3d 1288, 1294 (9th Cir.1997).

I.

A brief reference to the facts in this case is now necessary in order to apply the foregoing precepts. PLM borrowed over $63 million in 1989 and lent it to the ESOP, which in turn purchased PLM stock. The ESOP began to repay the loan to PLM with PLM’s contributions to the ESOP or dividends on the stock. As the loan was repaid, shares of stock were allocated to a trust fund made up of the individual accounts of the…