Justia ERISA Opinion Summaries
Canter v. AT&T Umbrella Benefit Plan No.3
Canter worked as a premises technician, installing wires, lifting heavy loads, and climbing tall ladders. After he began to suffer from severe migraines, lightheadedness, and dizziness, Canter concluded that he no longer could perform that work. He applied for short-term disability benefits in February 2017 through an AT&T plan. The plan administrator granted benefits for a few months, but AT&T terminated benefits after an independent medical reviewer concluded that Canter’s medical tests were normal and that his symptoms had improved. After Canter unsuccessfully appealed this decision using AT&T’s internal processes, he sued under the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1132.The district court granted the defendants summary judgment in favor of the defendants. The Seventh Circuit affirmed the decision but reversed the court’s award of $181 in pro hac vice fees to the defendants as not taxable “costs” under 28 U.S.C. 1920. Extensive medical testing consistently yielded normal results, even though the medical providers and reviewers thought that a significant problem would have shown up in one or more concrete, physiological ways. Canter himself reported that he was experiencing improvement. View "Canter v. AT&T Umbrella Benefit Plan No.3" on Justia Law
Corey Skelton v. Reliance Standard Life Ins Co
Plaintiff sued Defendant insurance company for mishandling his wife’s enrollment for supplemental life insurance and then declaring her ineligible for coverage after she died. The district court determined Defendant violated ERISA, finding Defendant breached its fiduciary duty to ensure its system of administration did not allow it to collect premiums until coverage was actually effective. Defendant appealed.The Eighth Circuit affirmed. Defendant maintained its fiduciary duty despite the fact that the deceased's employer collected premium payments before forwarding them to Defendant. The plan in question gave Defendant discretion to approve benefits, which under ERISA is sufficient to create a fiduciary duty. Defendant violated its fiduciary duty by failing to maintain an effective enrollment system. Under ERISA, a fiduciary must discharge its duties with reasonable care, skill, prudence and diligence. The court held that a reasonably prudent insurer would use a system that avoids the employer and insurer having different lists of eligible, enrolled participants. Defendant's billing system breached the fiduciary duty it owed to the deceased. Thus, the court affirmed the district court's granting of summary judgment to Plaintiff. View "Corey Skelton v. Reliance Standard Life Ins Co" on Justia Law
RiverStone Group, Inc v. Midwest Operating Engineers Fringe Benefit Funds
RiverStone operates quarries in three midwestern states. Under a collective bargaining agreement (CBA), RiverStone contributed to the Fringe Benefit Funds for certain employees, based on hours worked by the members of the bargaining unit. The CBA expired in May 2016. Nothing in the agreement imposes on RiverStone an obligation to make contributions after the agreement. RiverStone sought a declaratory judgment that it had no obligation to make contributions to the employees’ pension fund on behalf of individuals hired after the CBA expired. The Funds filed a counterclaim.The district court granted RiverStone summary judgment, holding that RiverStone did not have a contractual duty to contribute to the Funds on behalf of the new employees and that it lacked jurisdiction to evaluate noncontractual sources of liability, such as the National Labor Relations Act (NLRA) so the dispute fell within the exclusive jurisdiction of the National Labor Relations Board. The Seventh Circuit affirmed. The dispute is over an obligation that does not arise under any contract. Once a CBA has expired, the Employee Retirement Income Security Act, 29 U.S.C. 1145, does not confer jurisdiction on the district court to determine whether the employer’s failure to make post-contract contributions violated the NLRA. View "RiverStone Group, Inc v. Midwest Operating Engineers Fringe Benefit Funds" on Justia Law
Hawkins v. Cintas Corp.
The Cintas “defined contribution” retirement plan has a “menu” of investment options in which each participant can invest. Each Plan participant maintains an individual account, the value of which is based on the amount contributed, market performance, and associated fees. Under the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1102(a)(1), the Plan’s fiduciaries have the duty of loyalty—managing the plan for the best interests of its participants and beneficiaries—and a duty of prudence— managing the plan with the care and skill of a prudent person acting under like circumstances. Plaintiffs, two Plan participants, brought a putative class action, contending that Cintas breached both duties. Plaintiffs had entered into multiple employment agreements with Cintas; all contained similar arbitration provisions and a provision preventing class actions.The district court declined to compel arbitration, reasoning that the action was brought on behalf of the Plan, so that it was irrelevant that the two Plaintiffs had consented to arbitration through their employment agreements–the Plan itself did not consent. The Sixth Circuit affirmed. The weight of authority and the nature of ERISA section 502(a)(2) claims suggest that these claims belong to the Plan, not to individual plaintiffs. The actions of Cintas and the other defendants do not support a conclusion that the plan has consented to arbitration. View "Hawkins v. Cintas Corp." on Justia Law
Jacqueline Fisher v. Aetna Life Insurance Company
Plaintiff argued that the insurance contract between the parties was governed by a document provided on January 9, 2014, instead of February 19, 2014; that she is entitled to a judgment based on the insurance company’s miscalculation of her copay; and that even if the February 19 document controls, the Patient Protection and Affordable Care Act, 42 U.S.C. Section 18022(c)(1) (“ACA”), mandates that the insurance company must apply the individual out-of-pocket limit rather than the family out-of-pocket limit; and that the generic-brand cost differential Plaintiff paid for her name-brand medication should count toward her out-of-pocket limit. Plaintiff filed a breach of contract claim under ERISA, and the district court granted Defendant judgment on the breach of contract claims under ERISA. The Second Circuit affirmed the district court’s judgments. The court held that the February document governed the relationship between the parties because Plaintiff was on notice as to its terms. Further, Plaintiff is not entitled to a money judgment for her copay because Defendant agreed to pay Plaintiff the copay differential. The court also found that the ACA does not provide that the annual limitation on cost-sharing applies to all individuals regardless of whether the individual is covered under an individual “self-only” plan or is covered by a plan that is other than self-only for plans effective before 2016. Finally, the court held that the ACA nor the February document required Defendant to apply the brand-generic cost differential costs to Plaintiff’s out-of-pocket limit. View "Jacqueline Fisher v. Aetna Life Insurance Company" on Justia Law
Dorothy Garner v. Central States, Southeast and Southwest Areas
Plaintiff suffered from back and neck pain for years, and her doctor concluded that surgery would help her relieve her symptoms. After surgery, her insurance provider, Central States, denied her claim. Central States made this determination pursuant to a provision of the plan stating that covered individuals “shall not be entitled to payment of any charges for care, treatment, services, or supplies which are not medically necessary or are not generally accepted by the medical community as Standard Medical Care, Treatment, Services or Supplies.” Central States came to this conclusion based on an independent medical review (IMR) of Plaintiff’s claim, conducted by a physician board-certified in general surgery. Plaintiff filed suit under the Employee Retirement Income Security Act (“ERISA”), and Defendant appealed the district court’s ruling.The Fourth Circuit found that Central States failed to disclose to their IMR physician the medical records that would have been pertinent to his analysis. The court noted that it did not conclude that Central States acted in bad faith or deliberately withheld documentation. But intent aside, Central States owes plan participants a “deliberate, principled reasoning process.” Further, while plan trustees enjoy a good measure of discretion in determining what is “medically necessary” under the terms of the plan, they may not abuse that discretion by employing processes that lead to unreasoned conclusions or by affixing extratextual requirements. The court held that because Central States had ample chance to review Plaintiff’s claim, the district court did not abuse its discretion by awarding benefits outright. View "Dorothy Garner v. Central States, Southeast and Southwest Areas" on Justia Law
Chelf v. Prudential Insurance Co.
As a full-time Wal-Mart associate, Chelf purchased basic life insurance, an optional Prudential life insurance policy, and short-term and long-term disability insurance; premiums were deducted from his paycheck. Chelf obtained a leave of absence; his last workday was October 17, 2014. When his short-term benefits had maxed out, he obtained long-term disability benefits. Chelf was not required to pay premiums for his disability benefits while he was receiving those benefits. Nonetheless, Wal-Mart continued to charge him those premiums. Chelf paid life insurance premium payments during his leave. Chelf died in April 2016.After denial of her claims for benefits, Chelf’s widow filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1001–1461 (ERISA). She alleged Wal-Mart incorrectly treated the life insurance coverage as terminated before Chelf’s death and did not inform him that the policy had terminated; assessed certain premiums in error; failed to inform Chelf of that error; failed to remit premiums to Prudential; failed to inform Chelf that his accrued paid time off could cover his premiums; and failed to notify him of his right to convert his term life insurance policy.The district court dismissed, finding that Chelf’s allegations fell “outside the scope of ERISA’s fiduciary requirements or administrative functions.” The Sixth Circuit reversed with respect to allegations concerning the mishandling of premiums. The remaining allegations sought to impose liability for failure to disclose information that is not required to be disclosed under ERISA. View "Chelf v. Prudential Insurance Co." on Justia Law
Ten Pas v. Lincoln National Life Insurance Co.
Ten Pas worked as a tax partner at the McGladrey accounting firm until he suffered a cluster of cardiovascular events in 2014. He receives total disability benefits under McGladrey’s group long-term disability insurance policy, administered by Lincoln National. Ten Pas, arguing that he is entitled to a larger monthly benefit under the policy, filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). The policy calculates benefits based on a percentage of an employee’s salary on “the last day worked just prior to the date the Disability begins.” Lincoln used Ten Pas’s salary as of August 31, 2014, the date of his heart attack and the first of several consecutive hospital stays. Ten Pas argues that his determination date came on or after September 1. The short difference matters because Ten Pas received a substantial raise from McGladrey on that date.The district judge granted Ten Pas summary judgment. The Seventh Circuit reversed. Lincoln’s benefits determination cannot be disturbed unless Ten Pas can show that it was arbitrary or capricious. He has not met this demanding standard. The decision rests on a reasonable construction of the contract and an evaluation of Ten Pas’s medical records. View "Ten Pas v. Lincoln National Life Insurance Co." on Justia Law
J Supor & Son Trucking & Rigging Co., Inc. v. Trucking Employees of North Jersey Welfare Fund
Supor, a construction contractor, got a job on New Jersey’s American Dream Project, a large retail development, and agreed to use truck drivers exclusively from one union and to contribute to the union drivers’ multiemployer pension fund. The project stalled. Supor stopped working with the union drivers and pulled out of the fund. The fund demanded $766,878, more than twice what Supor had earned on the project, as a withdrawal penalty for ending its pension payments without covering its share, citing the 1980 Multiemployer Pension Plan Amendments Act (MPPAA), amending ERISA, 29 U.S.C. 1381. Under the MPPAA, employers who pull out early must pay a “withdrawal liability” based on unfunded vested benefits. Supor claimed the union had promised that it would not have to pay any penalty. The Fund argued that the statute requires “employer[s]” to arbitrate such disputes. Supor argued that it was not an employer under the Act.The district court sent the parties to arbitration, finding that an “employer” includes any entity obligated to contribute to a pension plan either as a direct employer or in the interest of an employer of the plan’s participants. The Third Circuit affirmed, finding the definition plausible, protective of the statutory scheme, and supported by three decades of consensus. View "J Supor & Son Trucking & Rigging Co., Inc. v. Trucking Employees of North Jersey Welfare Fund" on Justia Law
Autran v. P&G Health & Long Term Disability Benefit Plan
After more than a decade of employment, a seizure disorder ended Dr. Autran’s career as a P&G research scientist. Autran received total-disability benefits under P&G’s Health and Long-Term Disability Plan in 2012-2018. The Committee terminated those benefits after concluding that Autran no longer qualified as totally disabled within the meaning of the Plan, and awarded him his remaining 19 weeks of partial disability benefits. Autran sued under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). He died while the suit was pending.The Sixth Circuit upheld summary judgment in favor of the Committee. Because the Plan delegates discretionary authority to the Committee to decide benefits claims, the court applied the deferential arbitrary-and-capricious test. The Committee had rational reasons to depart from the earlier total-disability finding. Among other new evidence, a doctor who performed many objective tests on Autran for over six hours found no basis to conclude that he suffered from a debilitating condition. Thorough medical opinions gave the Committee a firm foundation to conclude that Autran did not, in the Plan’s words, suffer from a “mental or physical condition” that the “medical profession” would consider “totally disabling.” View "Autran v. P&G Health & Long Term Disability Benefit Plan" on Justia Law