Justia ERISA Opinion Summaries

Lorna Orabona, a high-earning mortgage development officer, was terminated by Santander Bank, N.A. for allegedly violating the company's Code of Conduct by forwarding company emails to her private email address. As a result, she was deemed ineligible for severance benefits under Santander's Employee Retirement Income Security Act (ERISA) Severance Policy. Orabona claimed that her termination was a pretext to avoid paying her severance benefits, especially since Santander was planning a large-scale layoff in her department shortly after her termination.The case was initially filed in Rhode Island Superior Court but was removed to the United States District Court for the District of Rhode Island. Santander moved to dismiss the case, arguing that Orabona's claims were preempted by ERISA. The district court allowed limited discovery to determine the applicability of the ERISA plan. After discovery, the district court granted summary judgment in favor of Santander, holding that all of Orabona's state law claims were preempted by ERISA because they related to the Severance Policy and required reference to it for determining liability and damages.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court's decision. The court held that Orabona's claims were preempted by ERISA under section 514(a) because they related to the Severance Policy. The court also found that her claims seeking relief for the denial of severance benefits conflicted with the remedial scheme established by ERISA section 502(a). The court emphasized that determining liability and damages for Orabona's claims would require interpreting the terms of the ERISA-regulated Severance Policy, thus necessitating preemption. View "Orabona v. Santander Bank, N.A." on Justia Law

Olayinka Oye, a director at PricewaterhouseCoopers, applied for long-term disability benefits through her employer's plan, administered by Hartford Life and Accident Insurance Company, due to fibromyalgia. Initially, Hartford denied her claim but later reversed its decision and awarded her benefits. In 2020, Hartford reevaluated her condition and terminated her benefits, concluding she was no longer disabled. Oye filed a lawsuit seeking to reinstate her benefits under the Employee Retirement Income Security Act (ERISA).The United States District Court for the Northern District of Illinois conducted a "paper trial" and found that Oye's fibromyalgia, while limiting, did not render her disabled under the plan. The court noted that consultative reports from Hartford's doctors, which were detailed and tied to Oye's medical records, outweighed the brief and conclusory letters from Oye's treating physicians. Additionally, the court found that Oye's mental health issues contributed significantly to her limitations, disqualifying her from additional benefits under the plan.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision, emphasizing that the district court owed no deference to Hartford's prior determination of disability. The appellate court found no clear error in the district court's findings, noting that the district court carefully considered the evidence and provided adequate reasoning for its decision. The court also addressed Oye's contention that the district court should have discussed a 2017 consultative report, concluding that the district court was not obligated to address every piece of evidence and had reasonably focused on more recent reports. The Seventh Circuit affirmed the district court's judgment in favor of Hartford. View "Oye v Hartford Life and Accident Insurance Company" on Justia Law

Nakul Karkare, a surgeon affiliated with AA Medical, P.C., brought an action against the International Association of Bridge, Structural, Ornamental & Reinforcing Iron Workers Local 580 (the Union) to recover unpaid benefits under section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA). Karkare, holding a power of attorney for Patient JN, claimed the Union failed to fully reimburse AA Medical for surgical services provided to Patient JN, a beneficiary under the Union’s self-funded insurance plan. The Union reimbursed only $1,095.92 of the $153,579.94 billed by AA Medical.The United States District Court for the Eastern District of New York dismissed the complaint sua sponte, concluding that a power of attorney did not permit Karkare to maintain an ERISA cause of action on behalf of Patient JN, as it was distinct from an assignment of claim. Karkare did not provide proof of a valid assignment but argued that the power of attorney was sufficient. The district court disagreed and dismissed the complaint, later denying Karkare’s motion for reconsideration.The United States Court of Appeals for the Second Circuit reviewed the case and concluded that Karkare lacked standing under Article III of the United States Constitution to bring the action. The court determined that Karkare was suing in his own name and not on behalf of Patient JN, despite holding a power of attorney. The court held that a power of attorney does not confer Article III standing to file suit in the attorney-in-fact’s own name. However, the court remanded the case to the district court to consider whether Patient JN should be permitted to be substituted into the action pursuant to Federal Rule of Civil Procedure 17. The judgment was affirmed in part, vacated in part, and remanded for further proceedings. View "Karkare v. International Ass'n of Bridge, Structural, Ornamental & Reinforcing" on Justia Law

Peter Schuman and William Coplin, former employees of Atmel Corporation, were terminated without cause after Microchip Technology Inc. acquired Atmel. They were offered severance benefits significantly lower than those promised under Atmel's Employee Retirement Income Security Act (ERISA)-governed benefits plan, in exchange for signing a release of all potential claims. Schuman and Coplin signed the releases but later filed a class-action lawsuit on behalf of approximately 200 similarly situated former Atmel employees, alleging ERISA violations, including breach of fiduciary duty and denial of benefits, and challenging the enforceability of the releases.The United States District Court for the Northern District of California granted summary judgment in favor of Microchip against Schuman and Coplin, applying a six-part test to determine that the releases were signed knowingly and voluntarily. The court did not consider evidence of Microchip's alleged breach of fiduciary duties in its analysis. The district court denied summary judgment for the non-named plaintiffs, finding material disputes of fact regarding Microchip's knowledge of the Plan's intended interpretation. The court entered final judgment under Federal Rule of Civil Procedure 54(b) for Schuman and Coplin, certifying the question of the appropriate legal test for determining the enforceability of the releases.The United States Court of Appeals for the Ninth Circuit reversed the district court's summary judgment against Schuman and Coplin, holding that courts must evaluate the enforceability of ERISA releases by considering the totality of the circumstances, including any alleged improper conduct by the fiduciary. The court enumerated nine non-exhaustive factors for this evaluation. The case was remanded to the district court for further proceedings consistent with this opinion. The Ninth Circuit dismissed Microchip's cross-appeal for lack of jurisdiction, as the issue raised was not inextricably intertwined with the primary appeal. View "Schuman v. Microchip Technology Inc." on Justia Law

Winston R. Anderson, a former Intel employee, brought a putative class action under the Employee Retirement Income Security Act (ERISA) against the trustees of Intel Corporation’s proprietary retirement funds. Anderson alleged that the trustees breached their fiduciary duty of prudence by investing in hedge funds and private equity funds, and their duty of loyalty by steering retirement funds to companies in which Intel Capital had already invested.The United States District Court for the Northern District of California dismissed Anderson’s claims, concluding that he had not plausibly alleged a breach of either the duty of prudence or the duty of loyalty. The court found that Anderson failed to provide a meaningful benchmark to compare the performance of Intel’s funds and did not plausibly allege a real conflict of interest for the duty of loyalty claim. Anderson was granted leave to amend his complaint, but the district court dismissed the amended complaint with prejudice for the same reasons.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The court held that Anderson did not state a claim for breach of ERISA’s duty of prudence because he failed to provide a sound basis for comparison, as the funds he compared to Intel’s funds had different aims, risks, and potential rewards. The court also held that Anderson did not state a claim for breach of the duty of loyalty because he did not plausibly allege a real conflict of interest, only the potential for one. The court emphasized that ERISA requires prudence based on the methods employed by fiduciaries, not the results achieved, and that generalized attacks on hedge funds and private equity funds as a category are insufficient to state a claim. View "Anderson v. Intel Corporation Investment Policy Committee" on Justia Law

Tiara Yachts, Inc. hired Blue Cross Blue Shield of Michigan (BCBSM) to administer its self-funded healthcare benefits plan. Tiara Yachts alleges that BCBSM systematically overpaid certain claims, thereby squandering plan assets, and then profited from these overpayments through a program that clawed back the overpayments and kept a portion of the recovered funds. Tiara Yachts sued BCBSM under the Employee Retirement Income Security Act (ERISA), claiming breaches of fiduciary duty and self-dealing.The United States District Court for the Western District of Michigan granted BCBSM's motion to dismiss, holding that Tiara Yachts had not plausibly alleged that BCBSM acted as an ERISA fiduciary. The court also held that ERISA’s remedial provisions could not provide the relief Tiara Yachts sought.The United States Court of Appeals for the Sixth Circuit reviewed the case and reversed the district court's decision. The appellate court held that Tiara Yachts plausibly alleged that BCBSM acted as an ERISA fiduciary by exercising control over plan assets when it overpaid claims and by exercising discretion over its compensation through the Shared Savings Program (SSP). The court found that BCBSM’s control over the claims-processing apparatus and its ability to profit from overpayments through the SSP indicated fiduciary status.The Sixth Circuit also held that Tiara Yachts could seek recovery on behalf of the plan under 29 U.S.C. § 1132(a)(2) and could seek equitable relief, such as restitution and disgorgement, under 29 U.S.C. § 1132(a)(3). The court concluded that Tiara Yachts’ claims for restitution and disgorgement were equitable in nature and that the complaint plausibly alleged that BCBSM retained specific funds from the SSP, satisfying the traceability requirement for equitable relief. The case was remanded for further proceedings consistent with the appellate court's opinion. View "Tiara Yachts, Inc. v. Blue Cross Blue Shield of Michigan" on Justia Law

J.H. participated in an employee welfare-benefit plan insured by Anthem Blue Cross Life and Health Insurance Company, with her son, A.H., as a beneficiary. After seeking benefits for A.H.'s yearlong stay at a mental-health treatment center, Anthem denied coverage, and Plaintiffs' appeal to Anthem was unsuccessful. Over a year after their final appeal through Anthem was decided, Plaintiffs filed a lawsuit to recover benefits under § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA).The United States District Court for the District of Utah dismissed the action, concluding it was time-barred under a provision of the Plan that required civil actions under ERISA § 502(a) to be brought within one year of the grievance or appeal decision. Plaintiffs argued that another sentence in the Plan set a three-year limitations period, creating an ambiguity that should be interpreted in their favor.The United States Court of Appeals for the Tenth Circuit reviewed the case and held that the two provisions were not inconsistent and both applied. The court explained that the one-year limitations period for § 502(a) actions and the three-year limitations period for other actions were distinct and could both be applicable. The court affirmed the district court's dismissal, concluding that Plaintiffs' action was time-barred as it was filed beyond the one-year limitations period specified in the Plan. View "J.H. v. Anthem Blue Cross Life and Health Insurance" on Justia Law

BlueCross BlueShield of Tennessee (BlueCross) is an insurer and fiduciary for an ERISA-governed group health insurance plan. A plan member in New Hampshire sought coverage for fertility treatments, which BlueCross denied as the plan did not cover such treatments. The Commissioner of the New Hampshire Insurance Department initiated an enforcement action against BlueCross, alleging that the denial violated New Hampshire law, which mandates coverage for fertility treatments. BlueCross sought to enjoin the state regulatory action, arguing it conflicted with its fiduciary duties under ERISA.The United States District Court for the Eastern District of Tennessee denied BlueCross's request for relief and granted summary judgment to the Commissioner. The court found that the Commissioner’s enforcement action was against BlueCross in its capacity as an insurer, not as a fiduciary, and thus was permissible under ERISA’s saving clause, which allows state insurance regulations to apply to insurers.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court’s decision. The Sixth Circuit held that the Commissioner’s action was indeed against BlueCross as an insurer, aiming to enforce New Hampshire’s insurance laws. The court noted that ERISA’s saving clause permits such state actions and that BlueCross could not use its fiduciary duties under ERISA to evade state insurance regulations. The court also referenced the Supreme Court’s decision in UNUM Life Insurance Co. of America v. Ward, which established that state insurance regulations are not preempted by ERISA when applied to insurers. Thus, the Sixth Circuit concluded that ERISA did not shield BlueCross from the New Hampshire regulatory action. View "BlueCross BlueShield of Tennessee v. Nicolopoulos" on Justia Law

Plaintiffs, current and former employees of DENSO International America, Inc., alleged that the company's 401(k) Plan overpaid for recordkeeping and administrative services, breaching the fiduciary duty of prudence under the Employee Retirement Income Security Act of 1974 (ERISA). They claimed that the Plan's fiduciaries failed to use their significant bargaining power to negotiate lower fees, resulting in excessive costs compared to similar plans.The United States District Court for the Eastern District of Michigan dismissed the plaintiffs' complaint, stating that it failed to provide the necessary "context specific" facts to support an ERISA overpayment-for-recordkeeping-services claim. The court found that the plaintiffs did not sufficiently detail the types and quality of services provided to the Plan compared to those provided to other plans.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's decision. The Sixth Circuit held that the plaintiffs did not plausibly allege a breach of the duty of prudence because they failed to provide specific details about the services received by the Plan and how they compared to those received by the comparator plans. The court emphasized that a meaningful benchmark is necessary to evaluate whether the fees were excessive relative to the services rendered. The court also noted that general allegations about the fungibility of recordkeeping services and the bargaining power of mega plans were insufficient without specific context.The Sixth Circuit concluded that the plaintiffs' complaint did not meet the required pleading standards and affirmed the district court's dismissal of the case. View "England v. DENSO International America, Inc." on Justia Law

The case involves the Board of Trustees of a multiemployer pension plan primarily benefitting unionized bakery drivers in New York City, which applied for Special Financial Assistance (SFA) in 2022. The Pension Benefit Guaranty Corporation (PBGC) denied the application, citing the plan's termination in 2016 as a disqualifying factor. The Fund, asserting it was in "critical and declining status," sued under the Administrative Procedure Act (APA).The United States District Court for the Eastern District of New York granted summary judgment in favor of the PBGC, agreeing that the plan's termination made it ineligible for SFA. The court also concluded that a terminated plan could not be restored under ERISA, thus affirming the PBGC's denial of the Fund's application.The United States Court of Appeals for the Second Circuit reviewed the case. The court held that the SFA statute does not exclude plans based solely on a prior termination. The court found that the statute's reference to "critical and declining status" incorporates the definition from 29 U.S.C. § 1085(b)(6) without importing limitations from other sections. Consequently, the court reversed the district court's judgment and remanded the case with instructions to enter summary judgment for the Fund, vacate the PBGC's denial of the SFA application, and remand to the PBGC for reconsideration. View "Bd. of Trs. of the Bakery Drivers Loc. 550 v. Pension Benefit Guaranty Corporation" on Justia Law