Justia ERISA Opinion Summaries
Sullivan-Mestecky v. Verizon Communications, Inc.
Plaintiff filed suit individually and as the beneficiary of the life insurance policy of her mother, Kathleen Sullivan, under the Employee Retirement Income Security Act of 1974 (ERISA), after the denial of Sullivan's life insurance benefits by Verizon and Prudential. The Second Circuit held that the district court did not err in dismissing plaintiff's ERISA section 502(a)(1)(B) claim against both defendants and her section 502(a)(3) claim against Prudential. In this case, the terms limiting Sullivan's death benefits to a percentage of her annual income were accurately stated in the plan and its description, and thus the generous benefits plaintiff seeks never vested under the terms of the plan. However, the court held that the district court erred in dismissing the section 502(a)(3) claim against Verizon, because plaintiff pleaded estoppel as "appropriate equitable relief;" the fiduciary breach is sufficient to support the equitable remedy of surcharge; and reforming the plan to accord with Sullivan's reasonable expectations is an appropriate equitable remedy. Finally, the court rejected Verizon's arguments supporting its denial that it committed a fiduciary breach. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Sullivan-Mestecky v. Verizon Communications, Inc." on Justia Law
Thole v. U. S. Bank N. A.
Plaintiffs are retired participants a defined-benefit retirement plan, which guarantees them a fixed payment each month regardless of the plan’s value or its fiduciaries’ investment decisions. Both have been paid all of their monthly pension benefits so far and are legally entitled to those payments for the rest of their lives. They filed a putative class-action suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, alleging violations of ERISA’s duties of loyalty and prudence by poorly investing the plan’s assets. They sought the repayment of approximately $750 million to the plan in losses suffered due to mismanagement; injunctive relief, including replacement of the plan’s fiduciaries; and attorney’s fees. The Eighth Circuit and the Supreme Court affirmed the dismissal of the case. Because the plaintiffs have no concrete stake in the lawsuit, they lack Article III standing. Win or lose, they will still receive the exact same monthly benefits they are entitled to receive. Participants in a defined-benefit plan are not similarly situated to the beneficiaries of a private trust or to participants in a defined-contribution plan; they possess no equitable or property interest in the plan. The plaintiffs cannot assert representative standing based on injuries to the plan where they themselves have not “suffered an injury in fact,” or been legally or contractually appointed to represent the plan. The fact that ERISA affords all participants—including defined-benefit plan participants—a cause of action to sue does not satisfy the injury-in-fact requirement. Article III standing requires a concrete injury even in the context of a statutory violation. The Court rejected an argument that meaningful regulation of plan fiduciaries is possible only if they may sue to target perceived fiduciary misconduct; defined-benefit plans are regulated and monitored in multiple ways. View "Thole v. U. S. Bank N. A." on Justia Law
Schweitzer v. Investment Committee of the Phillips 66 Savings Plan
Plaintiffs filed a putative class action against the Investment Committee of the Phillips 66's retirement plan for breach of fiduciary duties under the Employee Retirement Income Security Act (ERISA). The Fifth Circuit rejected plaintiffs' contention that defendants breached their duty to diversify under section 1104(a)(1)(C) of ERISA and their duty of prudence under section 1104(a)(1)(B) by failing to consider reducing their holdings in the ConocoPhillips Funds. Although plaintiffs have plausibly alleged that the ConocoPhillips Funds, by its resulting concentration of investment, became an imprudent investment with the spinoff, the court held that it does not follow that defendants were obligated to force plan participants to divest from the funds. Furthermore, by closing the ConocoPhillips Funds to new investments immediately after the spin-off, defendants also ensured that they were not offering participants an imprudent investment option. Finally, the court rejected plaintiffs' contention that the district court erred in dismissing their claim that defendants failed to comply with their duty "to follow a regular, appropriate, systematic procedure to evaluate the ConocoPhillips Funds as investments in the Plan." Therefore, the court affirmed the district court's grant of defendants' motion to dismiss for failure to state a claim. View "Schweitzer v. Investment Committee of the Phillips 66 Savings Plan" on Justia Law
Davis v. Washington University in St. Louis
Three retirement-plan participants field suit against WashU for breach of its fiduciary duties under the Employee Retirement Income Security Act (ERISA). The district court dismissed the complaint for failure to state a claim. The court held that plaintiffs sufficiently alleged that fees were too high and that WashU should have negotiated a better deal. The court held that a failure of effort or competence is enough to state a claim for breach of the duty of prudence. In this case, two inferences of mismanagement are plausible from the WashU's failure to offer more institutional shares. However, the court held that plaintiffs' claims that WashU had several underperforming investments in the plan for too long was properly dismissed, because the allegations failed to establish a meaningful benchmark for evaluating the challenged options. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Davis v. Washington University in St. Louis" on Justia Law
Katherine P. v. Humana Health Plan, Inc.
This dispute arose from Humana's denial of coverage for plaintiff's hospital stay as not "medically necessary" for treatment of an eating disorder. The Fifth Circuit reviewed Employee Retirement Income Security Act (ERISA) claims such as this one under the framework set forth in Ariana M. v. Humana Health Plan of Texas, Inc., 884 F.3d 246 (5th Cir. 2018) (en banc). The court limited its review of the coverage decision to the administrative record and applied de novo review. The court held that there is a genuine dispute of material fact regarding whether plaintiff met the Mihalik Criteria (ED.PM.4.2 sub-criteria) which precluded summary judgment. Accordingly, the court vacated and remanded for further proceedings. View "Katherine P. v. Humana Health Plan, Inc." on Justia Law
Ellis v. Liberty Life Assurance Co
In 2014, Liberty Life Assurance Company of Boston rejected the claim for long-term disability benefits by plaintiff-appellee Michael Ellis. As part of its employee-benefit plan, Comcast Corporation, for whom Ellis worked in Colorado from 1994 until 2012, had obtained from Liberty in 2005 a Group Disability Income Policy (the Policy). Ellis sought review of Liberty’s denial of benefits in the United States District Court for the District of Colorado under the Employee Retirement Income Security Act of 1974 (ERISA). The district court, reviewing the denial de novo, ruled that Liberty’s denial was not supported by a preponderance of the evidence. Liberty appealed, contending the court should have reviewed its decision under an abuse-of-discretion standard but that it should prevail even under a de novo standard. Ellis defended the district court’s choice of a de novo standard but argued he should prevail under either standard of review. The Tenth Circuit determined a plan administrator’s denial of benefits was ordinarily reviewed by the court de novo; but if the policy gave the administrator discretion to interpret the plan and award benefits, judicial review was for abuse of discretion. The Policy at issue provided that it was governed by the law of Pennsylvania, which was where Comcast was incorporated and has its principal place of business. Among its terms was one that gave Liberty discretion in resolving claims for benefits. A Colorado statute enacted in 2008, however, forbade such grants of discretion in insurance policies. The parties disputed whether the statute applied to the Policy under Colorado law, and whether Colorado law governed. The Tenth Circuit held that in this dispute the law of Pennsylvania was controlling. Liberty’s denial of benefits was therefore properly reviewed for abuse of discretion. Under that standard the denial had to be upheld. View "Ellis v. Liberty Life Assurance Co" on Justia Law
FMS Nephrology Partners North Central Indiana Dialysis Centers, LLC v. Meritain Health, Inc.
The Supreme Court vacated the trial court's grant of summary judgment for Defendants, holding that the trial court erred by entering summary judgment for defendant health-insurance plans, which were governed by the Employee Retirement Income Security Act of 1974 (ERISA), based on ERISA preemption. Plaintiff, a health-care provider, contracted with two third-party networks. Defendants and its affiliated employee health-insurance plans contacted with both health networks. Seven patients received treatments from Plaintiff, and the patients were covered under Defendants' plans. Plaintiff sued Defendants, alleging that they failed to pay agreed reimbursement rates for covered services under their plans. The trial court granted summary judgment against Plaintiff, concluding that Plaintiff's claims were preempted under ERISA's conflict-preemption provision, 29 U.S.C. 1144(a). The Supreme Court vacated the judgment, holding that genuine issues of disputed fact existed concerning the central issue of whether the provider's claims were denied coverage under the plans or whether the provider's claims necessitated interpreting the plan documents. View "FMS Nephrology Partners North Central Indiana Dialysis Centers, LLC v. Meritain Health, Inc." on Justia Law
Coffey v. New Hampshire Judicial Retirement Plan
The First Circuit held that the New Hampshire Judicial Retirement Plan (Plan) does not allow a former judge who resigned with sufficient years of creditable service, but before reaching the minimum retirement age, to receive a Service Retirement Allowance (SRA) upon later reaching the retirement age. Plaintiff was fifty-four years old when she resigned from her position as a superior court justice for the state of New Hampshire. Plaintiff served in that position for sixteen-and-a-half years. At the age of sixty-one, Plaintiff applied for an SRA. The Board of Trustees of the Board of Trustees (Board) of the Plan denied her application. Plaintiff filed suit against the Plan seeking a declaratory judgment that she was eligible for an SRA. The district court granted summary judgment in favor of the Plan as to Plaintiff's claim for violation of N.H. Rev. Stat. 100-C, 5, concluding that the plain language of the statute requires a judge to be in active service when she elects to retire and claim a service retirement allowance. The First Circuit affirmed, holding that, under the circumstances of this case, Plaintiff was not eligible to receive an SRA on her application. View "Coffey v. New Hampshire Judicial Retirement Plan" on Justia Law
Wallace v. Oakwood Healthcare, Inc.
Wallace participated in Oakwood’s employee welfare benefit plan, which provided long-term disability (LTD) benefits, subject to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001. Effective January 1, 2013, Oakwood switched the insurer responsible for that plan from Hartford to Reliance. Wallace took medical leave in October 2012, returning to work in April 2013. Wallace took medical leave again in May 2013 and has not returned to work. Reliance denied her claim for LTD benefits citing the pre-existing condition provision of its plan document and describing the review process, including that “failure to request a review within 180 days … may constitute a failure to exhaust the administrative remedies … and may affect ability to bring a civil action.” The plan document did not describe the review process or an exhaustion requirement. After discussions with Reliance, Wallace submitted an unsuccessful claim to Hartford. Wallace filed suit under ERISA. The district court granted Wallace judgment against Reliance based on the administrative record. The Sixth Circuit affirmed the denial of Reliance’s motion to dismiss on the basis of exhaustion. A plan document must detail claims review procedures and remedies. The court vacated the judgment on the record; further fact-finding is necessary to determine whether Wallace was eligible for LTD benefits and in what amount. Wallace may have been covered under transfer of insurance and pre-existing conditions limitation credit provisions, but the record does not permit a definitive finding. View "Wallace v. Oakwood Healthcare, Inc." on Justia Law
Williamson v. Travelport, LP
Plaintiff filed a class action against Travelport and the Galileo & Worldspan U.S. Legacy Pension Plan under the Employee Retirement Income Security Act of 1974, alleging claims for improperly withheld pension benefits, document-disclosure penalties, and breach of fiduciary duties. The district court dismissed all claims. With respect to plaintiff's claim for benefits, the Eleventh Circuit reversed and remanded for the district court to review her claim anew after Travelport has certified and submitted the complete and accurate administrative record. The court reversed the district court's award of attorney's fees, but otherwise affirmed the district court's judgment. View "Williamson v. Travelport, LP" on Justia Law