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In 2008, facing insolvency, Chrysler offered certain employees incentives to take early retirement, in addition to benefits they had earned under its Pension Plan. Pearce, then 60 years old, had worked for Chrysler for 33 years, and was eligible for the buyout plus the Plan’s 30-and-Out benefits--a monthly pension supplement “to help early retirees make ends meet until eligible for Social Security.” Chrysler provided Pearce with Pension Statements that repeatedly advised him to consult the Summary Plan Document (SPD). The SPD cautioned that “[i]f there is a conflict ... the Plan document and trust agreement will govern.” With respect to the 30-and-Out benefits, the SPD stated: “You do not need to be actively employed at retirement to be eligible ... you must retire and begin receiving pension benefits within five years of your last day of work for the Company.” Pearce believed that he could not lose his 30-and-Out benefits if he lost his job and declined the buyout offer. Chrysler terminated him that same day. Pearce was told that, because he had been terminated before retirement, he was ineligible for the 30-and-Out benefits; the SPD omitted a clause contained in the Plan, which said that an employee who was terminated was ineligible. Pearce sued under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The Sixth Circuit reversed the district court’s grant of summary judgment to the Plan on Pearce’s request for reformation, affirmed summary judgment rejecting Pearce’s request for equitable estoppel, and remanded. Analyzing Pearce’s request for reformation under contract law principles, the court should consider information asymmetry--Chrysler had access to the Plan while Pearce did not but repeatedly referred Pearce to the SPD--and other factors. View "Pearce v. Chrysler Group LLC Pension Plan" on Justia Law

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Linda worked for Children’s Hospital for 37 years, covered by its employer-funded Pension Plan. In 2015, Linda faced recurring cancer, and, at age 60, retired. The Plan describes a normal retirement pension, an early retirement pension, a deferred vested retirement pension, and a pre-retirement surviving-spouse death benefit. The surviving spouse benefit is available to a participant’s spouse when the participant dies “before the Participant’s annuity starting date.” No other benefit provides that it is available to beneficiaries if the participant dies before payments start. Early retirement pensions “commence with a payment due on the first day of the month next following” the date of termination and the election of benefits. A 10-year annuity is available and allows the participant to designate a beneficiary for the remainder of a 10-year period, but if the participant dies before distributions begin, the designated beneficiary will be a surviving spouse. Linda chose the early retirement pension, through a 10-year annuity. She designated her daughter, Kishunda, as her beneficiary. Linda retired on August 26. Her first pension payment was set to commence on September 1. She died on August 29. Kishunda was denied her mother’s pension and sued under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B). The Seventh Circuit affirmed summary judgment, upholding the administrator’s interpretation of the Plan as not arbitrary; only spouses are entitled to benefits under the Plan when a participant dies before the start of her pension. View "Estate of Jones v. Children's Hospital and Health System, Inc. Pension Plan" on Justia Law

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The Hospital filed suit against insurance companies and third party plan administrators, alleging various claims under the Employee Retirement Income Security Act (ERISA). The Fifth Circuit held that the hospital sufficiently pleaded its claims for ERISA plan benefits and state law breach of contract, and thus reversed the dismissal of these claims. The court remanded for the district court to consider these two claims, as well as the claim for attorneys' fees. The court affirmed the dismissal of the Hospital's ERISA claims under 29 U.S.C. 1132(a)(3) and the denial of leave to amend the complaint out of time. View "Innova Hospital San Antonio LP v. Blue Cross & Blue Shield of Georgia" on Justia Law

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Act 900, Arkansas Code Annotated 17-92-507, an amendment to the state's then-existing maximum allowable cost (MAC) law that governed the conduct of pharmacy benefits managers, was preempted by the Employee Retirement Income Security Act (ERISA) and Medicare Part D statutes. The Eighth Circuit affirmed the district court's ERISA ruling in this case, but reversed the Medicare Part D ruling. The court remanded for entry of judgment for PCMA. View "Pharmaceutical Care Management v. Rutledge" on Justia Law

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Plaintiffs, retirees who worked at Honeywell’s Greenville, Ohio plant, were members of a bargaining unit. The final collective bargaining agreement (CBA) did not expire until May 2014. Honeywell sold the plant in 2011 but continued to provide healthcare benefits for retirees after the CBA expired. The 2011 CBA stated that “[u]pon the death of a retiree, the Company will continue coverage for the spouse and dependent children for their lifetime.” In December 2015, Honeywell sent a letter stating that it intended to terminate the retiree medical and prescription drug coverage on December 31, 2016. Plaintiffs filed suit on behalf of themselves and similarly situated retirees and eligible dependents under the Labor Management Relations Act (LMRA), 29 U.S.C. 185, and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132, claiming that Honeywell was obligated to provide retirees with lifetime healthcare benefits. Honeywell argued that the CBA’s general durational clause, which stated that the agreement remained in effect until May 22, 2014, governed its duty to provide those benefits. The Sixth Circuit held that the CBAs were unambiguous and do not vest retiree healthcare benefits for life. A CBA’s general durational clause applies to healthcare benefits unless it contains clear, affirmative language indicating the contrary. Retirees are not entitled to lifetime benefits; only the dependents of retirees who died while the CBA was in effect are entitled to lifetime benefits. View "Fletcher v. Honeywell International, Inc." on Justia Law

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State law causes of action seeking to recover unpaid benefits under a welfare benefit plan regulated under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., are generally conflict preempted. The Court of Appeal affirmed the trial court's grant of summary judgment for defendants in an action filed by Port Medical seeking payments for health care services provided to persons eligible for benefits under the Plan. The court held that Port Medical's claims for breach of implied-in-fact contract, intentional misrepresentation and quantum meruit—each of which sought payment for services covered under the Plan—were conflict preempted under section 514 of ERISA. The court held that Port Medical's two remaining claims for unfair competition and intentional interference with prospective economic advantage were not preempted because they were predicated on the theory that the Plan and Connecticut General conspired to force Port Medical out of business in order to benefit a competitor, rather than strictly on a claim for benefits under the Plan. The court held, nonetheless, that Port Medical failed to demonstrate there was a dispute of material fact with respect to those claims. View "Port Medical Wellness, Inc. v. Connecticut General Life Insurance Co." on Justia Law

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A company must assume the unpaid withdrawal liability of its predecessor to a multiemployer pension plan if it was on constructive notice of potential withdrawal liability. The Ninth Circuit reversed the district court's judgment for plaintiffs in an action under the Multiemployer Pension Plan Amendment Act (MPPAA). The panel held that congressional purpose, the liberal remedial construction of the MPPAA adopted in previous cases, the adoption of a constructive notice standard in other contexts, and the practical realities of asset purchases all support a conclusion that constructive notice of withdrawal liability is sufficient to trigger successor withdrawal liability under the MPPAA. Applying a constructive notice standard in this case, the panel held that Amstar had constructive notice because a reasonable purchaser would have discovered Ohana's withdrawal liability. View "Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan" on Justia Law

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The Ninth Circuit reversed the district court's judgment for MetLife in an Employee Retirement Income Security Act (ERISA) action. MetLife denied coverage because plaintiff's leg injury was complicated by his diabetes. The panel held, however, that plaintiff was entitled to coverage because his diabetes did not substantially cause his leg injury from an automobile accident nor did diabetes contribute to his injury. Accordingly, the panel remanded for further proceedings. View "Dowdy v. Metropolitan Life Insurance Co." on Justia Law

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The Ninth Circuit reversed the district court's judgment for MetLife in an Employee Retirement Income Security Act (ERISA) action. MetLife denied coverage because plaintiff's leg injury was complicated by his diabetes. The panel held, however, that plaintiff was entitled to coverage because his diabetes did not substantially cause his leg injury from an automobile accident nor did diabetes contribute to his injury. Accordingly, the panel remanded for further proceedings. View "Dowdy v. Metropolitan Life Insurance Co." on Justia Law

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Sports Medicine performed shoulder surgery on “Joshua,” who was covered by a health insurance plan, and charged Joshua for the procedure. Because it did not participate in the insurers’ network, Sports Medicine was not limited to the insurer’s fee schedule and charged Joshua $58,400, submitting a claim in that amount to the insurers on Joshua’s behalf. The claim form indicated that Joshua had “authorize[d] payment of medical benefits.” The insurer processed Joshua’s claim according to its out-of-network cap of $2,633, applying his deductible of $2,000 and his 50% coinsurance of $316, issuing him a reimbursement check for the remaining $316, and informing him that he would still owe Sports Medicine the remaining $58,083. Sports Medicine appealed through the insurers’ internal administrative process and had Joshua sign an “Assignment of Benefits & Ltd. Power of Attorney.” Sports Medicine later sued for violations of the Employee Retirement Income Security Act (ERISA), and breach of contract, citing public policy. The district court dismissed for lack of standing because Joshua’s insurance plan included an anti-assignment clause. The Third Circuit affirmed, holding that the anti-assignment clause is not inconsistent with ERISA and is enforceable. View "American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield" on Justia Law