Justia ERISA Opinion Summaries

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Plaintiff filed suit against Aetna and its wholly-owned subsidiaries, seeking reimbursement from Aetna for performing two knee surgeries on a patient who was a member of an Aetna-administered health care plan that was governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The Second Circuit held that ERISA does not completely preempt an "out-of-network" health care provider's promissory-estoppel claim against a health insurer where the provider did not receive a valid assignment for payment under a health insurance plan and received an independent promise from the insurer that he would be paid for certain medical services provided to the insured. Accordingly, the court vacated the denial of plaintiff's motion to remand and the dismissal of his complaint. The Second Circuit remanded to the district court with instructions to remand to state court. View "McCulloch Orthopaedic Surgical Services v. Aetna" on Justia Law

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Seventh Circuit affirms award of permanent disability benefits for fibromyalgia. Kennedy was hired by Lilly in 1982 and became an executive director in Lilly’s human resources division, with a monthly salary of $25,011. In 2008, she quit work because of disabling symptoms of fibromyalgia. She was approved for monthly benefits of $18,972 under the company’s Extended Disability Benefits plan. Three and a half years later her benefits were terminated. Kennedy sued under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. The Seventh Circuit affirmed summary judgment in favor of Kennedy, with an award of $537,843.81 in past benefits and prejudgment interest and reinstatement of benefits. The court characterized Lilly’s evidence as “a hodgepodge” and noted that Lilly did not indicate what kind of work Kennedy would be able to perform. Kennedy’s general internist testified that she is permanently disabled, basing this opinion on his diagnoses of her nonarticular rheumatism (musculoskeletal aches and pains not traceable to joints), fibromyalgia, sleep disorder, depression, irritable bowel syndrome, restless leg syndrome, and her symptoms of pain and fatigue. Her rheumatologist concurred. The court noted the company’s conflict of interest, being both the initial adjudicator of an employee’s benefits claim and the payor of those benefits. View "Kennedy v. Lilly Extended Disability Plan" on Justia Law

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WestRock filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., challenging an action taken by the Pace Industry Union-Management Pension Fund's Board of Trustees. The district court agreed with the Fund that ERISA provided no cause of action and granted the Fund’s motion to dismiss the complaint. The Eleventh Circuit affirmed, holding that WestRock has not properly alleged that the Amendment (the Fund's rehabilitation plan) violates 29 U.S.C. 1085 in a manner sufficient to bring a cause of action under Subsection B of 29 U.S.C. 1132(a)(10). Furthermore, the text of 29 U.S.C. 1451(a) does not support WestRock's reading that the Amendment imposes an additional liability on WestRock if it withdraws and therefore section 1451(a) provides it with a cause of action to challenge the Amendment. View "WestRock RKT v. Pace Industry Union" on Justia Law

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California Insurance Code 10110.6(a) has voided provisions conferring discretionary authority to Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., plan administrators such as Aetna. Plaintiff challenged Aetna's decision to terminate her long-term disability benefits under a plan created by Boeing. The Ninth Circuit reversed and remanded the district court's holding that California's statute did not apply to Boeing's plan and upholding Aetna's denial of benefits to plaintiff. The Ninth Circuit held that section 10110.6(a) was saved from ERISA preemption because the statute is directed toward entities engaged in insurance and substantially affects the risk-pooling arrangement between the insurer and the insured. The Ninth Circuit also held that section 10110.6 applied in this case because Boeing's policy renewed after section 10110.6's effective date. View "Orzechowski v. The Boeing Company Non-Union Long-Term Disability Plan" on Justia Law

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Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., for denial of benefits and breach of fiduciary duty. The district court dismissed the fiduciary claim as duplicative of the denial-of-benefits claim, and granted summary judgment against plaintiff on the denial-of-benefits claim. The Eighth Circuit explained that this court's cases conflict about whether a participant or beneficiary bringing a section 1132(a)(1)(B) claim "to recover benefits due to him under the terms of his plan" may also bring a section 1132(a)(3) claim to obtain benefits. The Eighth Circuit held that Silva v. Metropolitan Life Insurance Co. was controlling in this case, where an (a)(1)(B) claimant may seek relief under (a)(3); because the two claims in this case assert different theories of liability, the court reversed as to the (a)(3) claim; Aetna's no-disability determination as to the (a)(1)(B) claim was reasonable and the court rejected plaintiff's arguments to the contrary; the district court correctly struck the Supplemental Administrative Record materials that were not before the plan administrator when it made its discretionary determination; and the court declined to consider plaintiff's remaining arguments. Accordingly, the Eighth Circuit affirmed in part, reversed in part, and remanded for further proceedings. View "Jones v. Aetna Life Insurance Co." on Justia Law

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The Eighth Circuit affirmed the dismissal of plaintiff's claims against Blue Cross in a suit filed under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., after Blue Cross denied round-the-clock in-home health coverage. The district court properly dismissed Count I and II, because these claims for round-the-clock in-home nursing services were contrary to the plain meaning of the private-duty nursing exclusions in the 2012 and 2013 policies. The district court properly dismissed Count VI because the policy plainly excluded extended hours skilled nursing care, and plaintiffs may not use an estoppel theory to enlarge benefits under a written plan. View "Spizman v. BCBSM, Inc." on Justia Law

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The court affirmed the district court's finding that, under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., a plan fiduciary's breach did not cause substantial losses to the retirement plan because a prudent fiduciary would have made the same divestment decision at the same time and in the same manner. The district court explained that a prudent fiduciary would have balanced the increased risk of loss that the Nabisco Funds brought to the Plan against the Funds' likely average returns. The court concluded that the district court's findings and analysis entirely accord with the efficient market hypothesis and Fifth Third Bancorp v. Dudenhoeffer. In this case, a prudent fiduciary would have concluded the Nabisco Funds' expected returns did not justify the increased risk of loss to the plan, especially because ERISA requires that a fiduciary diversify plan assets to minimize risk of loss. View "Tatum v. RJR Pension Investment" on Justia Law

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The Sixth Circuit affirmed the Bankruptcy Court’s order in Conco’s Chapter 11 bankruptcy, interpreting Conco’s Confirmed Plan to prohibit the sale of the Employee Stock Ownership Plan (ESOP)-held Conco stock (Equity Interests) and enjoining any such sale through December 31, 2018. The creditor’s committee had agreed to support the Plan, which provided both defined distributions and contingent distributions, to be funded by the operation of the Conco’s business, to continue through December 31, 2018. The Plan guaranteed the creditors a higher recovery than if the business were sold. ESOP participants sued Conco, its Board of Directors, the ESOP, and ESOP Trustees (ERISA Litigation) claiming breach of fiduciary duties by not evaluating and responding to offers by to purchase the Equity Security Interests. The Bankruptcy Court found, and the Sixth Circuit agreed, that the four corners of the Confirmed Plan, and the creditors’ abandonment of an objection under the absolute priority rule of 11 U.S.C. 1129(b)1 to the ESOP’s retention of the Equity Interests, evidenced an intent for the Equity Interests not to be sold through December 31, 2018. View "In re: Conco, Inc." on Justia Law

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Plaintiffs, CNH employees who retired between 1994 and 2004, filed suit in 2004, seeking a declaration that they were entitled to lifetime healthcare benefits without paying premiums, based on collective-bargaining agreements (CBAs), negotiated by UAW beginning in 1971. The case was remanded to the district court twice. While the second remand was pending, the Supreme Court (Tackett, 2015) abrogated Sixth Circuit precedent creating an inference in favor of employees in collective-bargaining cases. Initially, the district court ruled in favor of CNH, noting that it was “[c]onstrained by the Supreme Court’s decision” in Tackett. On reconsideration, the district court found not only that plaintiffs’ rights were vested even after Tackett, but also that CNH’s proposed changes were unreasonable. The Sixth Circuit affirmed as to vesting, noting that the CBA is ambiguous and extrinsic evidence indicated that parties intended for the healthcare benefits to vest for life. The court remanded because the court failed to properly weigh the costs and the benefits of the proposed plan, as previously instructed. “To find ambiguity in this case, partially from the silence as to the parties’ intentions, does not offend the Supreme Court’s mandate from Tackett that we not infer vesting from silence.” View "Reese v. CNH Industrial, N.V." on Justia Law

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Plaintiffs, Medicare-eligible retirees from Kelsey-Hayes' Detroit automotive plant, retired before the plant’s 2001 closing and were members of a UAW bargaining unit. The final (1998) collective bargaining agreement (CBA) provided for comprehensive healthcare for retirees. A Plant Closing Agreement stated that it did not extinguish pension or retiree healthcare obligations. Kelsey-Hayes continued to provide retiree healthcare coverage for 10 years, consistent with the 1998 CBA. In 2011, Kelsey-Hayes announced that it was replacing the retirees’ group-insurance plan with company-funded health reimbursement accounts (HRAs) from which retirees could purchase individual Medicare supplemental insurance plans. In 2012, Kelsey-Hayes contributed $15,000 to each participant’s HRA; in 2013 and 2014, it contributed $4,300 per year. Plaintiffs sued under the Labor Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. The Sixth Circuit stayed litigation pending the Supreme Court’s 2015 Tackett decision. The district court then granted the plaintiff-retirees partial summary judgment and ordered defendants to reinstate the group insurance plan. The Sixth Circuit affirmed, distinguishing the language and history of the Kelsey-Hayes CBAs from the language at issue in Tackett. Tackett explicitly overruled Sixth Circuit precedent and held that a presumption toward lifetime benefits violates basic principles of contract interpretation; however, pre-Tackett courts’ interpretation of language that parties subsequently agree to maintain can inform interpretation of their intent at the time they entered into the CBA. View "International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Kelsey-Hayes Co." on Justia Law