Justia ERISA Opinion Summaries
Howard Jarvis Taxpayers Ass’n v. California Secure Choice Retirement Savings Program
The federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001, et seq., does not preempt a California law that creates a state-managed individual retirement account (IRA) program.The Ninth Circuit concluded that CalSavers is not an ERISA plan because it is established and maintained by the State, not employers; it does not require employers to operate their own ERISA plans; and it does not have an impermissible reference to or connection with ERISA. Furthermore, CalSavers does not interfere with ERISA's core purposes. Therefore, ERISA does not preclude California's endeavor to encourage personal retirement savings by requiring employers who do not offer retirement plans to participate in CalSavers. The panel affirmed the district court's judgment. View "Howard Jarvis Taxpayers Ass'n v. California Secure Choice Retirement Savings Program" on Justia Law
Fisher v. Pension Benefit Guaranty Corp.
The DC Circuit affirmed the district court's grant of summary judgment to PBGC, concluding that 29 C.F.R. 4044.4(b) is valid and that the PBGC Appeals Board reasonably applied section 4044.4(b) to deny appellant's lumpsum request. The court also concluded that, because fiduciaries must act in accordance with the terms of plan documents only "insofar as such documents and instruments are consistent with the provisions of" the Employee Retirement Income Security Act of 1974 (ERISA), Penn Traffic fulfilled its fiduciary duties by denying appellant's request in compliance with section 4044.4(b). Therefore, the court need not address appellant's contentions that Penn Traffic's handling of his lumpsum request was inconsistent with the Plan's terms. View "Fisher v. Pension Benefit Guaranty Corp." on Justia Law
Wilson v. Craver
The Ninth Circuit affirmed the district court's dismissal of plaintiff's action against defendants, two Edison Executives, alleging breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA) in managing the plan's assets. Defendants are fiduciaries of Edison's 401(k) employee stock ownership plan (ESOP). Plaintiff claimed that Defendant Fiduciary Boada breached his duty of prudence by allowing employees to continue to invest in Edison stock after he learned that the Edison stock was artificially inflated.The panel concluded that the district court properly determined that plaintiff failed plausibly to plead that a prudent fiduciary in defendants' position could not have concluded that plaintiff's proposed alternative action of issuing a corrective disclosure would do more harm than good. In this case, the second amended complaint relies solely on general economic theories and is devoid of context-specific allegations explaining why an earlier disclosure was so clearly beneficial that a prudent fiduciary could not conclude that disclosure would be more likely to harm the fund than to help it. Accordingly, plaintiff failed to state a claim for breach of the duty of prudence consistent with the standard announced in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 428 (2014). Consequently, the derivative monitoring claim alleged against Defendant Craver also fails. View "Wilson v. Craver" on Justia Law
Bafford v. Northrop Grumman Corp.
Plaintiffs filed suit alleging that Hewitt, the Committee, and Northrop had breached their fiduciary duties and that the Committee failed to provide required Employee Retirement Income Security Act (ERISA) benefit information. In the alternative, plaintiffs asserted state-law professional negligence and negligent misrepresentation claims against Hewitt. Plaintiffs' claims stemmed from statements mailed by Hewitt that grossly overestimated the benefits to which each plaintiff would be entitled. The district court granted defendants' motion to dismiss.The Ninth Circuit affirmed the district court's dismissal of plaintiffs' fiduciary duty claims against Northrop and the Committee, concluding that Northrop and the Committee did not breach a fiduciary duty by failing to ensure that Hewitt correctly calculated plaintiffs' benefits. The panel agreed with the First Circuit and held that calculation of pension benefits is a ministerial function that does not have a fiduciary duty attached to it. Likewise, plaintiffs' claim that Hewitt breached its fiduciary duties failed. The panel also concluded that plaintiffs did not adequately plead that they submitted written requests for pension benefit statements as required to state a claim for violation of 29 U.S.C. 1025(a)(1)(B)(ii). However, because plaintiffs could plead facts adequate to allege they made written requests, the panel directed the district court to permit plaintiffs to file an amended complaint. Finally, the panel concluded that state-law professional negligence and negligent misrepresentation claims are not preempted by ERISA because they do not have a "reference to or connection with" an ERISA plan. Accordingly, the panel vacated the dismissal of the state-law claims and remanded for further proceedings. View "Bafford v. Northrop Grumman Corp." on Justia Law
Sullivan v. Liberty Life Assurance Company of Boston
The Eleventh Circuit held that the Employment Retirement Income Security Act's (ERISA) fee-shifting provision, 29 U.S.C. 1132(g)(1), cannot support a fee award against a party's counsel. The court explained that the function of this statute is not to sanction attorney misconduct. Rather, that role belongs to other provisions, such as 28 U.S.C. 1927 and Federal Rule of Civil Procedure 11(c).In this case, the district court relied exclusively on Section 1132(g)(1) when awarding fees. Therefore, the court reversed and vacated the district court's fee award. The court did not address Liberty Life's argument that the district court should have imposed fees against Theresa E. Peer's counsel, Paul Sullivan. On remand, the district court may consider whether a fee award is appropriate against Peer under ERISA or against Peer or Sullivan under another statute, rule, or the district court's inherent authority. View "Sullivan v. Liberty Life Assurance Company of Boston" on Justia Law
Bernard v. Kansas City Life Insurance Co.
After plaintiff admitted to using fentanyl at work, he was terminated from his position as a certified nurse anesthetist at Mid-Missouri. Plaintiff then submitted claims for short- and long-term disability benefits to Kansas City Life, which issued disability insurance policies to Mid-Missouri as part of its employee benefit plan.The Eighth Circuit affirmed the the district court's conclusion that Kansas City Life had abused its discretion in denying plaintiff benefits under the Employee Income Security Act of 1974 (ERISA). The court concluded that Kansas City Life's denial of benefits is not supported by substantial evidence where reasonable minds could not reconcile Kansas City Life's position that plaintiff was unable to safely administer anesthesia on October 6, 2017, with its position that he had safely administered anesthesia while under the influence of fentanyl during the time period between his relapse and termination. Therefore, the evidence that plaintiff made no medical errors and did not seek treatment until after he was terminated, as well as the fact that the record does not disclose his exact date of disability, could not support Kansas City Life's conclusion that plaintiff was not disabled before his insurance coverage ended. View "Bernard v. Kansas City Life Insurance Co." on Justia Law
Boyer v. Schneider Electric Holdings, Inc.
Plaintiff sought life and accidental death benefits under her brother's insurance plan after he died in a single-vehicle crash. Unum Life paid plaintiff life insurance benefits, but denied her claim for accidental death benefits. Plaintiff filed suit under the Employee Retirement Income Security Act of 1974 (ERISA).The Eighth Circuit reversed the district court's grant of summary judgment for plaintiff, concluding that the administrator's decision was supported by substantial evidence. The court explained that the evidence is sufficient to support a reasonable finding that the brother's speeding and improper passing contributed to the crash; the crime exclusion applies to "accidental losses;" and Unum Life's interpretation of the "crime" exclusion was reasonable because the brother's conduct constituted a crime under Missouri law. In this case, the brother was driving more than twice the legal speed limit and passing vehicles in a no-passing zone on a two-lane road in icy road conditions. Furthermore, Missouri's classification of improper passing and speeding as misdemeanor offenses reinforces the reasonableness of Unum Life's determination. View "Boyer v. Schneider Electric Holdings, Inc." on Justia Law
In re Becker
The Ninth Circuit denied a petition for a writ of mandamus challenging the district court's order transferring an action under the Employee Retirement Income Security Act (ERISA) from the Northern District of California to Minnesota federal court pursuant to a forum selection clause in a retirement plan. The panel held that mandamus relief was not warranted because the district court did not clearly err in transferring the case. The panel explained that courts are in near universal agreement: ERISA does not bar forum selection clauses. Therefore, the panel found no reason to disagree with their well-reasoned conclusion. In this case, the plan contained a forum selection clause and the district court properly enforced that clause. View "In re Becker" on Justia Law
Roebuck v. USAble Life
The Eighth Circuit affirmed the district court's order holding USAble Life did not abuse its discretion in denying plaintiff's claim for disability benefits under the Employee Retirement Income Security Act. The court rejected plaintiff's claim that the court cannot use an abuse of discretion standard in reviewing the denial of her claim because an Arkansas regulation (Rule 101) prohibits the inclusion of discretionary clauses in insurance contracts. Rather, the court concluded that an abuse of discretion is the appropriate standard of review or USAble Life's denial of plaintiff's claim.The court also rejected plaintiff's arguments that the insurer had a conflict of interest or breached its fiduciary duty. The court concluded that USAble Life did not abuse its discretion in its interpretation of the policy or use of an in-house nurse to review, and that substantial evidence supports USAble Life's denial of plaintiff's claim. Finally, there is no support in the record for plaintiff's position that a radiculopathy diagnosis, absent a finding of disability, entitles her to benefits under the policy. View "Roebuck v. USAble Life" on Justia Law
Nolan v. Detroit Edison Co.
In 2002, Nolan’s employer, DTE, created a cash balance pension plan and invited its existing employees to transfer from their traditional defined benefit plan to the new plan. Nolan accepted. When she retired in 2017, DTE told Nolan that her monthly pension benefit would be what she had accrued as of 2002 under the old plan, despite her participation in the new cash balance plan. Nolan brought a class action under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001(a)–(b), alleging that DTE made misleading promises and failed to explain the new plan’s risks. The district court dismissed. The Sixth Circuit affirmed in part, finding Nolan’s procedural claim untimely. Even accepting Nolan’s allegations as true, Nolan failed to state a claim under ERISA section 204(h); DTE satisfied the requirement to make a good faith effort to comply even though the notice provided to employees was ultimately inadequate under ERISA section 102. Reversing in part, the court found that Nolan stated a plausible claim that DTE’s notice was defective under section 102 because it failed to describe the plan in a manner understandable to the average participant that employees transferring to the new plan would not actually receive any new benefits if the benefit accrued under the new plan did not catch up to their frozen traditional plan benefit or the effect that interest rates could have on depreciating the already-earned benefits during conversion. View "Nolan v. Detroit Edison Co." on Justia Law