Justia ERISA Opinion Summaries

The First Circuit affirmed the decision of the district court upholding Defendant National Union Fire Insurance Company of Pittsburg, PA's denial of accidental death insurance benefits to Plaintiff following her husband's death because he had committed suicide, holding that the district court did not err.Plaintiff enrolled in an accidental death and dismemberment insurance policy, an employer-sponsored welfare plan affording participants like Plaintiff rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. Plaintiff's husband was insured for a death benefit, with Plaintiff named as the beneficiary. After Plaintiff's husband fell nine stories from a hotel balcony and died, Plaintiff submitted a claim under the policy for accidental death benefits. Defendant denied benefits, concluding that Plaintiff's husband committed suicide, precluding benefits. Plaintiff filed suit under section 502(a)(1)(B) of ERISA seeking the benefits provided for under the policy. The district court granted summary judgment for Defendant. The First Circuit affirmed, holding that Defendant's denial of accidental death benefits was not arbitrary, capricious, or an abuse of discretion. View "Alexandre v. National Union Fire Insurance Co. of Pittsburgh" on Justia Law

After Allstate decided to stop paying premiums on retired employees' life insurance policies, two putative classes filed suit seeking declaratory and injunctive relief. The Turner retirees are made up of retired former Allstate employees to whom Allstate no longer provides life insurance. The Klaas retirees consist of individuals who took part in a special retirement opportunity with Allstate.The Eleventh Circuit affirmed the district court's judgment in favor of Allstate, concluding that Allstate had the authority under the summary plan descriptions to terminate the retiree life insurance benefits for both putative classes and did not violate Section 502(a)(1)(B) of the Employee Retirement Income Security Act (ERISA). The court also concluded that any claims for breach of fiduciary duty brought under section 502(a)(3) were time barred. View "Klaas v. Allstate Insurance Co." on Justia Law

After the termination of disability benefits under a long-term disability plan governed by the Employee Retirement Income Security Act (ERISA), plaintiff filed suit against the plan administrator, Sun Life, seeking reinstatement of long-term disability (LTD) benefits.The Eighth Circuit reversed the district court's grant of Sun Life's motion for judgment on the record, concluding that there is no substantial evidence in the joint administrative record to support Sun Life's termination decision. In this case, the plan relied on virtually the same medical records for a decade while it paid the benefits, and has pointed to no information available to it that altered in some significant way its decision to pay benefits. The court explained that Sun Life's about-face requires "relevant evidence" that a "reasonable mind might accept as adequate to support" its change in decision, which the evidence does not in this record. Accordingly, the court directed the district court to order the reinstatement of plaintiff's LTD benefits. View "Roehr v. Sun Life Assurance Co. of Canada" on Justia Law

Simpson's insurer, the Fund, paid Simpson’s medical costs ($16,225) arising from a car accident. Simpson hired the Firm to represent her in a personal injury suit. The Fund maintained a right of subrogation and reimbursement. Simpson settled her suit for $30,000. After depositing the settlement funds in a trust account, the Firm paid $9,817.33 to Simpson, $1,000.82 to other lienholders, and $10,152.67 to its own operating account for fees and expenses, offering the Fund $9,029.18. The Fund sued under the Employee Retirement Income Security Act (ERISA) section 502(a)(3), claiming an equitable lien of $16,225. The Firm issued a $9,029.18 check to the Fund, exhausting the settlement funds.The district court issued a TRO requiring the Firm to maintain $7,497.99 in its operating account. The Firm argued that the Fund sought a legal remedy because the Firm no longer possessed the settlement funds; ERISA 502(a)(3) only authorizes equitable remedies. The Fund argued that it sought an equitable remedy because the settlement funds were in the Firm’s possession pursuant to the TRO and cited the lowest intermediate balance test: a defendant fully dissipates a plaintiff’s claimed funds (by spending money from the commingled account to purchase untraceable items) only if the balance in the commingled account dipped to $0 between the date the defendant commingled the funds and the date the plaintiff asserted its right to the funds. The district court granted the Firm summary judgment, reasoning that the Firm dissipated the settlement funds before the TRO issued; the Fund could not point to specific recoverable funds held by the Firm and sought a legal remedy. The Sixth Circuit affirmed, concluding that no issues had been preserved for review. View "Sheet Metal Workers' Health & Welfare Fund of North Carolina v. Law Office of Michael A. DeMayo, LLP" on Justia Law

In 2003, Shupe was an Executive Sous Chef for Hyatt when he began experiencing symptoms of osteomyelitis, an infection in his spinal cord. He was 37 years old. After rounds of antibiotics and surgery, he was unable to maintain his employment and left his position in July 2004 due to pain from chronic osteomyelitis, degenerative disc disease in the lumbar spine, and spinal stenosis that was so severe that he could not stand for an extended period of time. Hyatt’s long-term disability plan, a “qualified” plan under the Employee Retirement Income Security Act of 1974, paid Shupe disability benefit for 11 years. Hartford then terminated his benefits, finding that there were alternative occupations that Shupe could physically perform, was qualified for, and pay greater than 60% of his prior salary, so that he did not meet the plan’s definition of “disabled.”The district court rejected Shupe’s 29 U.S.C. 1132(a)(1)(B) suit on summary judgment. The Fourth Circuit reversed, in favor of Shupe. His post-termination evaluations, coupled with Shupe’s contemporaneous medical history, all uniformly conclude that Shupe was incapable of full-time sedentary employment. Hartford’s assessment was an “outlier.” View "Shupe v. Hartford Life & Accident Insurance Co." on Justia Law

The Employee Retirement Income Security Act (ERISA) prohibits any fiduciary of an employee benefit plan from causing the plan to engage in transactions with a “party in interest” when that party receives more than fair market value, 29 U.S.C. 1106(a)(1)(A),(D). A fiduciary who violates this prohibition is liable for the plan's resulting losses In 1993, Vinoskey, who founded Sentry Equipment, established an employee stock ownership plan (ESOP). By 2004, the ESOP owned 48% of Sentry, with Vinoskey owning the remaining 52%. Vinoskey served as an ESOP trustee. Around 2010, Vinoskey wanted to sell his remaining shares to the ESOP. To avoid a conflict of interest, Sentry engaged Evolve Bank as the ESOP’s independent fiduciary to review the transaction. The ESOP purchased the Vinoskey stock for $20,706,000, including an interest-bearing promissory note. Four years later, Vinoskey, forgave $4,639,467 of the ESOP’s debt.The Secretary of Labor sued Evolve and Vinoskey under ERISA. The district court concluded that Evolve’s due diligence was “rushed and cursory” and found that the fair market value of Sentry’s stock was $278.50 per share, not $406 per share. The court found Vinoskey jointly and severally liable with Evolve for $6,502,500 in damages and did not reduce the award by the amount of debt that Vinoskey forgave. The Fourth Circuit affirmed with respect to Vinoskey’s liability but reversed the district court’s legal conclusion concerning the damages award. View "Walsh v. Vinoskey" on Justia Law

Avenoso, a maintenance supervisor, had long-term disability insurance under a Reliance policy, governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). The policy provided two years of benefits if the claimant showed that he was unable to perform the material duties of his current occupation and provided continued benefits if the claimant showed that he was unable to perform the material duties of any occupation. Avenoso left his job due to lower-back pain and underwent back surgery. Reliance approved two years of benefits. At the end of the two years, Reliance informed Avenoso that it would discontinue benefits because Avenoso had not shown that he was unable to perform the material duties of any occupation.Avenoso had an MRI; the results appeared relatively mild. Avenoso sent Reliance a note from his physician, recommending that Avenoso “avoid lifting, bending and prolonged sitting” due to his lower back condition. He was receiving Social Security disability benefits. Following a “functional-capacity evaluation,” a physical therapist concluded Avenoso did not demonstrate an ability to tolerate an 8-hour workday. An independent medical evaluation concluded that Avenoso retained sedentary-work capacity and was “able to work 8 hours a day but was engaging in “symptom magnification.” A vocational-rehabilitation specialist identified five “viable sedentary occupational alternatives” consistent with Avenoso’s physical capacities. The Eighth Circuit affirmed summary judgment in favor of Avenoso. The district court’s finding that Avenoso lacks sedentary-work capacity was not clearly erroneous. View "Avenoso v. Reliance Standard Life Insurance Co" on Justia Law

In this Employee Retirement Security Act (ERISA) dispute, the Employer Trustees filed suit alleging that the Union Trustees breached their fiduciary duties under ERISA when they passed, by simple majority, two amendments to the trust agreements governing the Funds (the Trust Agreements). The district court granted summary judgment in favor of the Employer Trustees and concluded that the Union Trustees had breached their fiduciary duties under Section 404(a)(1)(D), because – under the terms of the Trust Agreements – the amendments were required to be passed by a unanimous vote of the Trustees.Although the Second Circuit agreed with the district court that, under the terms of the trust agreements, the Union Trustees' amendments were required to be passed by a unanimous vote, the court nevertheless concluded that the district court erred in granting summary judgment to the Employer Trustees because the Union Trustees were not acting in a fiduciary capacity when they passed those amendments. Accordingly, the court vacated the district court's grant of summary judgment; dismissed the Employer Trustees' cross-appeal and appeals as moot; and remanded for further proceedings. View "Massaro v. Palladino" on Justia Law

A plan participant sued under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B), claiming that an insurance-company fiduciary wrongfully terminated his benefits. The participant enrolled in his former employer’s welfare benefit plan, which provided long-term disability and life insurance benefits through group insurance policies. When his health deteriorated and he could no longer do his job, the participant claimed benefits. The insurance company, which funded and administered those policies, authorized benefits. Its in-house medical professionals reaffirmed that conclusion for two years. Then, with no recent change to the participant’s medical condition, the company used a third-party vendor to retain an outside physician to evaluate the participant. After an in-person examination, that physician concluded that the participant was not totally disabled. The company terminated benefits. The participant administratively appealed, and the cycle repeated. The company’s multiple requests for additional outside medical reviews were irregular in their timing and prompting.The Third Circuit affirmed summary judgment in favor of the participant. The insurance company performed two functions that are in financial tension: it determined eligibility for benefits and funded benefits. That creates a structural conflict of interest, which, combined with significant deviation from normal eligibility-review processes, influenced its fiduciary decision-making. The company abused its discretion in terminating the participant’s benefits. The court properly ordered their retroactive reinstatement. View "Noga v. Fulton Financial Corp Employee Benefit Plan" on Justia Law

PCMA filed suit to enjoin the enforcement of several North Dakota statutory provisions, claiming that they were preempted by the Employee Retirement Income Security Act of 1974 (ERISA), and the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Medicare Part D). The district court concluded that ERISA preempted none of the challenged provisions and that Medicare Part D preempted only one; the Eighth Circuit reversed on the issue of ERISA preemption; and the Supreme Court vacated the judgment and remanded in light of Rutledge v. Pharmaceutical Care Management Association, 592 U.S. ---, 141 S. Ct. 474 (2020).On remand from the Supreme Court, the Eighth Circuit concluded that Sections 16.1(11) and 16.2(4), as well as Sections 16.1(10) and 16.2(2), do not meet the connection-with standard. The court explained that none of the challenged provisions has an impermissible connection with ERISA plans and are therefore not preempted. The court also concluded that state laws are preempted as applied to Medicare Part D plans if and only if they either (1) regulate the same subject matter as a federal Medicare Part D standard (in which case they are expressly preempted), or (2) otherwise frustrate the purpose of a federal Medicare Part D standard (in which case they are impliedly preempted). In this case, a provision requiring plans to disclose certain information to patients or prohibiting plans from prohibiting pharmacies from disclosing certain information are preempted, as well as provisions regarding collection of retroactive fees from pharmacies. Accordingly, the court affirmed in part and reversed in part. View "Pharmaceutical Care Management Ass'n v. Wehbi" on Justia Law