Justia ERISA Opinion Summaries
Sacerdote v. Cammack Larhette Advisors, LLC
This case arose from plaintiffs' action against NYU, alleging violations of the Employee Retirement Income Security Act (ERISA) in connection with two retirement plans sponsored by NYU (Sacerdote I). After the district court dismissed most, but not all of the causes of action, plaintiffs filed this action against affiliates of NYU and Cammack, an independent investment management company (Sacerdote II). The district court dismissed all claims against defendants. The Second Circuit dismissed the district court's judgment, holding that the district court erred by determining that Cammack and NYU were in privity such that the rule against duplicate litigation applied to bar recovery against Cammack in Sacerdote II. In this case, Cammack and NYU's interests were not sufficiently identical to support a finding of privity; the bases for liability for NYU and Cammack were not necessarily the same; and it was possible that one party could be found liable and the other not. Cammack and NYU had separate and distinct responsibilities as co-fiduciaries to the plans at issue, and could be found liable for plaintiffs' injuries for separate reasons. Finally, the court held that the representative suit exception to a plaintiff's right to sue each defendant separately did not apply here. View "Sacerdote v. Cammack Larhette Advisors, LLC" on Justia Law
Morehouse v. Steak N Shake
Rebecca, employed by SNS, enrolled herself and her husband in SNS’s health-benefits coverage. In 2013, Rebecca fell at work and injured her knee. Her injury was too severe to permit her to continue working. She signed a form requesting to open a workers’ compensation claim and to receive a leave of absence. The form did not mention the “Family and Medical Leave Act.” SNS sent a letter instructing her to complete paperwork for processing her absence under the FMLA. She did so. SNS approved her leave of absence as FMLA leave (rather than paid leave) for the first 12 weeks, but did not give her any other written notice of that designation. SNS deducted her insurance contributions from her workers’ compensation checks. SNS notified Rebecca when her FMLA leave expired, stating that, if her employment was terminated, she could continue health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Having received no premium payment weeks later, SNS notified Rebecca that the benefits had been discontinued. SNS terminated her employment. Rebecca sued, alleging that SNS failed to notify her of the right to temporarily continue health-benefit coverage under COBRA and breached its fiduciary duty under ERISA by failing to so notify her. The district court determined that a qualifying event occurred with the reduction in Rebecca’s work hours on the day after her injury, requiring notice. The Sixth Circuit reversed because the terms of Rebecca’s insurance coverage did not change upon her taking a leave of absence. No “qualifying event” occurred to trigger a COBRA notification obligation. View "Morehouse v. Steak N Shake" on Justia Law
Dialysis Newco, Inc. v. Community Health Systems Group Health Plan
In this Employee Retirement Income Security Act (ERISA) contract dispute, the district court determined that the provider had standing to bring this lawsuit because an anti-assignment provision in the plan was ambiguous or, in the alternative, because the anti-assignment provision was rendered unenforceable by a Tennessee statute. The Fifth Circuit held that the plan's anti-assignment clause unambiguously prohibits the beneficiary from assigning his or her right to sue under the plan to a third-party provider. The court also held that the Tennessee statute, Tenn. Code Ann. 56-7-120(a) (2012), was preempted by ERISA. Accordingly, the court reversed the district court's judgment on the issue of whether plaintiff had standing to bring this lawsuit; vacated the district court's subsequent judgments; and rendered judgment that the case shall be dismissed based on lack of jurisdiction. View "Dialysis Newco, Inc. v. Community Health Systems Group Health Plan" on Justia Law
Rudel v. Hawai’i Management Alliance Assoc.
The Ninth Circuit held that the district court properly exercised federal jurisdiction and correctly denied plaintiff's remand motion because his state law claims could have been brought as Employee Retirement Income Security Act (ERISA) claims. The panel also held that the district court correctly held that two Hawai'i statutes restricting health insurers' subrogation recovery rights are saved from preemption under ERISA section 514, were not subject to conflict preemption under section 502, and provided the relevant rule of decision in the removed action. Because the parties stipulated that HMAA had no valid lien if the Hawai'i Statutes provided the relevant rule of decision, the panel held that the district court properly entered a final judgment in plaintiff's favor View "Rudel v. Hawai'i Management Alliance Assoc." on Justia Law
Lavery v. Restoration Hardware Long Term Disability Benefits Plan
The First Circuit affirmed the judgment of the district court concluding that the denial of Plaintiff's disability benefits claim violated the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., holding that Aetna Life Insurance Company's decision to deny Plaintiff's benefits claim was arbitrary and capricious. Plaintiff employed for benefits under his employer's long-term disability benefits plan, which Aetna administered and funded, after Plaintiff was diagnosed with malignant melanoma. Aetna denied the application under the plan's exclusion for disabilities caused by pre-existing conditions. Plaintiff subsequently brought this action. The district court entered judgment for Plaintiff and awarded him back benefits, interest, fees, and costs. The First Circuit affirmed, holding that an unconflicted fiduciary would likely have found coverage. The Court remanded the case for any further proceedings that may be necessary. View "Lavery v. Restoration Hardware Long Term Disability Benefits Plan" on Justia Law
Sepulveda-Rodriguez v. Metropolitan Life Insurance Co.
MetLife and Ford appealed the district court's award of benefits, costs and attorney fees in an Employee Retirement Income Security Act (ERISA) action. In this case, while MetLife paid plaintiff her husband's basic life insurance benefit, it denied payment of an optional life insurance (OLI) benefit. The Eighth Circuit affirmed in part and reversed in part, holding that the district court erred in finding that there was no substantial evidence supporting MetLife's denial of OLI benefits, because substantial evidence supported MetLife's assertion that the husband answered an online questionnaire averring that he had not been treated for high blood pressure, when in fact he had. The court also held that there was substantial evidence in the record to support MetLife's reliance upon the plan administrator's representations that the husband would not have been automatically enrolled in the OLI program if he had truthfully answered the high blood pressure question in the screening questionnaire; the OLI benefits could not have been awarded on an equitable estoppel theory; the district court did not abuse its discretion by denying statutory penalties for the delay in providing documents; and attorney fees and costs must be reversed and remanded. View "Sepulveda-Rodriguez v. Metropolitan Life Insurance Co." on Justia Law
Dorman v. The Charles Schwab Corp.
The Ninth Circuit reversed the district court's order denying Schwab's motion to compel arbitration in a class action brought by a former participant in an Employee Retirement Income Security Act (ERISA) retirement plan. Plaintiff alleged that defendants violated ERISA and breached their fiduciary duties by including Schwab-affiliated investment funds in the Plan—despite the funds' poor performance—to generate fees for Schwab and its affiliates. In light of the Supreme Court's intervening case law, the panel held that its holding in Amaro v. Continental Can Co., 724 F.2d 747 (9th Cir. 1984), that ERISA claims were not arbitrable, was no longer good law. The panel held that the holding in American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013), that federal statutory claims are generally arbitrable and arbitrators can competently interpret and apply federal statutes, was irreconcilable with Amaro. Accordingly, the court remanded. View "Dorman v. The Charles Schwab Corp." on Justia Law
32BJ North Pension Fund v. Nutrition Management Services, Co.
Plaintiffs filed suit under the Employee Retirement Income Security Act (ERISA), alleging that NMSC failed to make the required contributions from 2008 to 2015. The Second Circuit vacated the district court's final judgment in favor of plaintiffs. The court clarified, consistent with circuit and Supreme Court precedent, that an employer in an ERISA action for unpaid contributions is bound to the terms of an ERISA plan document (the Trust Agreement in this case) only if the employer objectively manifests an intent to be so bound, as evaluated under ordinary principles of contract interpretation. The court applied these principles here and held that NMSC did not bind itself to the Trust Agreement -- and the interest rate established under its Delinquency Policy -- until NMSC agreed to the Memorandum of Agreement modifying the collective bargaining agreement in 2014. The court also rejected the Fund's alternative argument that applying ERISA‐plan‐based interest provisions is so fundamental to the functioning of a fund that its trustees may unilaterally impose such provisions on a delinquent employer. View "32BJ North Pension Fund v. Nutrition Management Services, Co." on Justia Law
O’Rourke v. Northern California Electrical Workers Pension Plan
The Ninth Circuit affirmed the district court's grant of summary judgment in an Employee Retirement Income Security Act (ERISA) action challenging the denial of plaintiff's request for early retirement benefits. Plaintiff argued that the Board incorrectly interpreted the Plan to deny his application for benefits. The panel held that any procedural irregularities in the Board's actions were minor and, at most, the Board's actions weigh only slightly and weakly in favor of holding that an abuse of discretion occurred here. The panel also held that the Board did not abuse its discretion by interpreting "performance of services in any capacity in the Electrical Industry" to include working for the union. In this case, in light of Tapley v. Locals 302 & 612 of Int'l Union of Operating Eng'rs-Emp'rs Const. Indus. Ret. Plan, the panel held that the Board's interpretation did not clearly conflict with the Plan's language; did not render any other Plan provision nugatory; and did not lack a rational nexus to the Plan's purpose. Therefore, the Board's interpretation of the Plan was reasonable. View "O'Rourke v. Northern California Electrical Workers Pension Plan" on Justia Law
Bauwens v. Revcon Technology Group, Inc.
Unions set up a pension plan under the Employment Retirement Income Security Act, 29 U.S.C. 1001, with electrical contractors (Revcon) sharing ownership. Revcon withdrew from the plan in 2003. The Multiemployer Pension Plan Amendments Act, 29 U.S.C. 1381, requires employers who withdraw from underfunded pension plans to pay withdrawal liability. The trustees notified Revcon of $394,788 in withdrawal liability and demanded quarterly payments of $3,818. Revcon missed several payments. The trustees accelerated the outstanding liability (29 U.S.C. 1399(c)(5)) and filed suit. Revcon offered to cure its defaults and resume payments. The trustees agreed and voluntarily dismissed the suit under FED. R. CIV. P. 41(a). Revcon made some payments, then defaulted again. The trustees again sued. Revcon again promised to cure; the trustees again voluntarily dismissed. This cycle repeated in 2011, 2013, and 2015. In 2018, after another default, the trustees filed this case, which, unlike previous complaints, only the payments that Revcon had missed since the 2015 dismissal. Revcon argued claim preclusion because the previous complaints demanded the entire liability, which necessarily includes the defaulted payments at issue. The “two dismissal rule” of Rule 41(a)(1)(B) therefore barred any claims arising from that liability, and, because the trustees sought to collect the entire debt in 2008, the six-year limitations period had expired. The trustees countered that they revoked the 2008 acceleration with each dismissal and that the two dismissal rule did not apply because all parties consented to the previous dismissals. The Seventh Circuit found the case untimely, noting that the earlier complaints all stated the withdrawal liability was accelerated in 2008, contradicting an argument that acceleration had been revoked. The statute makes no mention of such a deceleration mechanism. View "Bauwens v. Revcon Technology Group, Inc." on Justia Law