Justia ERISA Opinion Summaries

Under the Employment Retirement Income Security Act, 29 U.S.C. Section 1132(a)(1)(B), a plan administrator’s benefits decision is subject to plenary review in federal court unless the administrator is given discretion to determine eligibility or construe the terms of the plan. If the administrator has discretion, a court determines whether its benefits decision was arbitrary and capricious (i.e., whether it lacked a reasonable basis).   In this ERISA case, all parties agree that Lincoln’s denial of long-term disability benefits to Plaintiff triggered de novo review because the plan did not give Lincoln discretion. The district court, acknowledging that its review of the denial was plenary, ruled that Plaintiff could not submit evidence that had not been presented to Lincoln before it denied benefits.   The Eleventh Circuit reversed holding that the district court’s evidentiary ruling constituted error under Eleventh Circuit precedent. The court explained that Lincoln also argues that even under Moon and Kirwan an ERISA plaintiff does not have the unfettered right to introduce new evidence when challenging the denial of benefits under plenary review. However, the court explained it has never mentioned, a showing of good cause to present new evidence in ERISA benefit cases governed by the de novo standard. Further, although Lincoln that under plenary review the administrative record supports the denial of long-term disability benefits to Plaintiff, the court cannot, however, affirm on this basis. Accordingly, the district court erred by not considering Plaintiff's post-denial evidence, and Lincoln does not assert that this error was harmless. View "Virgil Harris v. The Lincoln National Life Insurance Company, et al" on Justia Law

The Board of Trustees of the Sheet Metal Workers’ National Pension Fund (“the Fund”) sought to recover a delinquent exit contribution from Four-C-Aire, Inc., a former participating employer, under Section 515 of the Employee Retirement Income Security Act of 1974 (“ERISA”). 29 U.S.C. Section 1145. The Fund claims Four-C-Aire’s obligation arose under a collective-bargaining agreement (“the CBA”) between the Sheet Metal Workers’ International Association Local Union No. 58 and the Central New York Sheet Metal Contractors Association, a multiemployer bargaining unit. According to the Fund, Four C-Aire signed on to this preexisting agreement while it was a member of the Contractors Association.   The Fourth Circuit affirmed, finding that Four-C-Aire adopted the agreement by its conduct. The court held that even if Four-C-Aire had preserved the issue, it’s meritless. The record contains several iterations of the written trust documents, including those imposing the exit-contribution requirement. And the Fund’s Director of Operations verified each version of the document in a declaration to the district court. Further, the court wrote there is no evidence the trust documents are invalid. In sum, Four-C-Aire offers no reason why the court shouldn’t enforce the plain terms of the agreement and trust documents, as ERISA requires. View "Board of Trustees v. Four-C-Aire, Inc." on Justia Law

The First Circuit affirmed the judgment of the district court in favor of an employee's widow in this insurance dispute, holding that the employee did not lose life insurance coverage under his employer's group policy after he developed a brain tumor that disrupted his usual work.Plaintiff, the employee's widow, submitted a statement to Insurer claiming approximately $1 under her late husband's life insurance policy. Insurer denied the claim. Plaintiff then sued, alleging wrongful denial of benefits under section 502(a) of ERISA, 29 U.S.C. 1132(a)(1)(B), (a)(3). The insurance company denied life insurance coverage on the grounds that the employee's coverage under the policy had lapsed. The district court granted summary judgment for Plaintiff. The First Circuit affirmed, holding (1) because the policy language invoked by Insurer in this case was less than clear the rule that ambiguous terms in an insurance policy should be read in favor of coverage applied; and (2) the employee was covered at the time of his demise. View "Ministeri v. Reliance Standard Life Insurance Co." on Justia Law

Plaintiffs brought this action against the Motion Picture Industry Health Plan (the “Plan”) and the Plan’s Board of Directors under Section 502(a)(1)(B) and § 502(a)(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”). Plaintiff is a participant in the Plan. The remaining co-Plaintiffs are covered dependents of Norman.   Plaintiff was a participant in the Plan. After his daughter, a covered dependent, was injured in a car accident, the Plan paid benefits to cover a portion of her medical expenses. Under the Plan’s terms, Plaintiff was liable to the Plan for the reimbursement of these benefits if the daughter recovered the money from the third party who caused her injuries. Although the daughter obtained such a recovery, she dissipated her settlement funds without reimbursing the Plan, and Plaintiff did not pay the reimbursement amount himself.   The Ninth Circuit reversed the district court’s summary judgment in favor of Plaintiffs in an action against the Motion Picture Industry Health Plan and the Plan’s Board of Directors, alleging violation of the Employee Retirement Income Security Act of 1974, and remanded with instructions for the district court to enter summary judgment in favor of the Plan.   Reversing, the court concluded that contractual defenses could not defeat the clear and unambiguous terms setting forth the Plan’s self-help remedy. Assuming without deciding that plaintiffs could invoke the equitable doctrines of illegality, impossibility of performance, and unconscionability, the panel concluded that these defenses could not override the terms of the Plan under the facts in this case. View "LENAI MULL V. MOTION PICTURE INDUSTRY HEALTH" on Justia Law

Plaintiffs, each a retiree of PPG Industries, Inc. (“PPG”), or the surviving spouse of such a retiree, initiated a putative class action— following the termination of Plaintiffs’ retiree life insurance coverage under the PPG Employee Life and Other Benefits Plan (the “Benefits Plan” or the “Plan”).   The district court awarded summary judgment to the PPG defendants on all claims, without ruling on the class certification issue. On appeal, Plaintiffs contested the summary judgment award as to three counts of the Complaint, that is, Counts I, VII, and VIII.   The Fourth Circuit identified a genuine dispute of material fact with respect to the Count I claim that retiree life insurance coverage was “vested” in eligible employees working for PPG during the 15-year period from 1969 to 1984 (the “vesting claim”). The court explained that it agrees with Plaintiffs that if their retiree life insurance coverage were ever a vested benefit, PPG could not rely on the later-added reservation of rights clause to terminate that coverage.Accordingly, the court vacated vacate the judgment as to the vesting claim and remanded for consideration of whether the termination of Plaintiffs’ retiree life insurance coverage contravened the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. Section 1001 et seq. View "Charles Bellon v. The PPG Employee Life and Other Benefits Plan" on Justia Law

In a suit under the Employee Retirement Income Security Act (ERISA) 29 U.S.C. 1104(a)(1)(B), concerning the duty of prudence as applied to the investment options that a company offers to its employees for their 401(k) and other defined-contribution plans, plaintiffs (employees) argued: (1) that the employer, TriHealth, should not have offered its employees the option of investing their retirement money in actively managed funds, (2) that the performance of several funds was deficient at certain points, (3) that the overall fees charged for the investment options were too high, and (4) that even if a prudent investor might make available a wide range of valid investment decisions in a given year, only an imprudent financier would offer a more expensive share when he could offer a functionally identical share for less.The Sixth Circuit reversed, in part, the dismissal of the suit, rejecting the first three claims as foreclosed by recent precedent. However, the plaintiffs’ claim that TriHealth offered them more expensive mutual fund shares when shares with the same investment strategy, the same management team, and the same investments were available to their retirement plan at lower costs stated a plausible claim that TriHealth acted imprudently. View "Forman v. TriHealth, Inc." on Justia Law

In December 2019, Coastline JX Holdings LLC (Coastline), assignee of a judgment creditor’s interest in a money judgment entered against Stephen Bennett, served on Seamount Financial Group, Inc. (Seamount) a notice of levy on Bennett’s assets in an individual retirement account and a profit-sharing plan. After the trial court ordered Seamount to liquidate Bennett’s interest in both assets and turn them over to the levying officer to be delivered to Coastline, Bennett moved for reconsideration of the trial court’s order under California Code of Civil Procedure section 1008. In his motion, Bennett first argued to the trial court that the profit-sharing plan was protected from levy because it qualified as a plan under the Employee Retirement Income Security Act of 1974 (ERISA). He also filed a motion to tax costs. The trial court denied Bennett’s motion, but informed the parties that, under its inherent authority, it would reconsider its prior order regarding the distribution of the profit-sharing plan only (not the individual retirement account) because the court previously had not considered the implications of it being an ERISA-compliant plan. After a hearing on the court’s own motion, the court reversed its prior decision and concluded the profit-sharing plan was exempt from levy due to preemption by ERISA. The court ordered Coastline to reimburse the profit-sharing plan any funds it had received under the court’s prior order. The trial court also denied Bennett’s motion to tax costs and the request for attorney fees that was included in his supplemental briefing. Coastline and Bennett each appealed. Finding no reversible error, the Court of Appeal affirmed the trial court’s order and rejected each of the parties’ arguments on appeal. View "Coastline JX Holdings LLC v. Bennett" on Justia Law

The First Circuit reversed the judgment of the district court denying arbitration requested by two unions - the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and the United Steelworkers Local 12203 (collectively, Union) - on behalf of former two employees of the Boston Gas Company (Company) as to their claims for pension benefits, holding that this matter called for arbitration.The Union represented the two members in filing grievances regarding their underpaid pensions. The Union submitted the grievances to the Joint Pension Committee, which was unable to resolve the dispute. The Union subsequently sought arbitration over the grievances, but the Company refused to arbitrate. The First Circuit reversed, holding that it was up to an arbitrator, not a court, to determine the matters at issue in this case. View "United Steelworkers v. National Grid" on Justia Law

Plaintiff’s spouse was a medical doctor employed by NCHMD, Inc., which is a subsidiary of NCH Healthcare System, Inc. NCHMD’s human resources staff helped the spouse complete enrollment paperwork for life insurance benefits through an ERISA plan. Plaintiff was the primary beneficiary under the plan, and NCH Healthcare was the named plan administrator. After Plaintiff’s spouse died, Plaintiff filed a claim for benefits with the plan’s insurance company. The insurance company refused to pay any supplemental benefits because it had never received the form. Plaintiff sued NCHMD and NCH Healthcare, asserting a claim under ERISA, 29 U.S.C. Section 1132(a)(1)(B). The district court granted Defendants’ motion to dismiss and denied Plaintiff leave to amend.   On appeal, the Eleventh Circuit reversed the district court’s ruling. The court wrote that at issue is whether Section 1132(a)(3) creates a cause of action for an ERISA beneficiary to recover monetary benefits lost due to a fiduciary’s breach of fiduciary duty in the plan enrollment process? The court answered “yes”, and explained that under the court’s precedents, a court may order typical forms of equitable relief under Section 1132(a)(3). As the Supreme Court and many sister circuits have recognized, courts in equity could traditionally order an “equitable surcharge”— that a fiduciary pay a beneficiary for losses caused by the fiduciary’s breach of fiduciary duty. Accordingly, the court held that a beneficiary of an ERISA plan can bring a lawsuit under Section 1132(a)(3) against a fiduciary to recover benefits that were lost due to the fiduciary’s breach of its duties. View "Raniero Gimeno v. NCHMD, Inc., et al." on Justia Law

Smith worked for CommonSpirit and participated in CommonSpirit’s defined-contribution 401(k) plan. CommonSpirit's administrative committee administers the plan, which serves more than 105,000 people and manages more than $3 billion in assets. It offers 28 different funds in which employees may invest their contributions, including several index funds with management fees as low as 0.02% and several actively managed funds with management fees as high as 0.82%. The actively managed Fidelity Freedom Funds are the default investment if employees do not choose to place their contributions in a different fund instead; they are “target date” funds and managers change the allocation of the underlying investments over time. Other target-date funds have lower costs. Smith sued CommonSpirit and the administrative committee under the Employee Retirement Income Security Act (ERISA) for breach of fiduciary duty. 29 U.S.C. 1132(a)(2), seeking to represent a proposed class of similarly situated plan participants and claiming that the plan should have offered a different mix of fund options. The Seventh Circuit affirmed the dismissal of her suit. ERISA does not give courts a broad license to second-guess the investment decisions of retirement plans. It supplies a cause of action only when retirement plan administrators breach a fiduciary duty by, for example, offering imprudent investment options. Smith has not alleged facts from which a jury could plausibly infer that CommonSpirit breached any such duty. View "Smith v. CommonSpirit Health" on Justia Law