Justia ERISA Opinion Summaries

In 2013, Vercellino was injured in an accident while riding on an ATV operated by his friend, Kenney. Both were minors. Vercellino was a covered dependent on his mother’s insurance plan. The plan is self-funded, so ERISA, 29 U.S.C. 1001, preempted state law. The Insurer paid nearly $600,000 in medical expenses and did not exercise its right to seek recovery in subrogation from Kenney or Kenney’s parents during the applicable statutory period, nor did Vercellino’s mother ever file suit to recover medical expenses from the Kenneys. In 2019, Vercellino, then an adult, filed suit against the Kenneys seeking general damages and sought declaratory judgment that the Insurer would have no right of reimbursement from any proceeds recovered in that litigation. The Insurer counterclaimed, seeking declaratory judgment that it would be entitled to recover up to the full amount it paid for Vercellino’s medical expenses from any judgment or settlement Vercellino obtained.The Eighth Circuit affirmed summary judgment for the Insurer. The plain language of the plan at issue here is unambiguous: the Insurer is entitled to seek reimbursement for medical expenses arising out of the ATV accident paid on Vercellino’s behalf from any judgment or settlement he receives in his litigation with Kenney. View "Vercellino v. Optum Insight, Inc." on Justia Law

The First Circuit affirmed the decision of the district court granting Defendant's motion to dismiss as to count one of Plaintiffs' complaint and reversed the dismissal and remanded for further proceedings on counts two through four, holding that dismissal was improper as to the remaining three counts.Plaintiffs, S.R. and T.R. and their child N.R., brought this action against Raytheon Company, T.R.'s employer, after United Healthcare, which administered the company's health insurance plan, refused to pay for N.R.'s speech therapy, alleging various violations of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001, et seq. The district court granted Defendant's motion to dismiss in full. The First Circuit held (1) the district court properly dismissed count one of the complaint; but (2) the dismissal of Plaintiffs' remaining claims was improper. View "N.R. v. Raytheon Co." on Justia Law

Under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001–1461, when an employer withdraws from a multiemployer pension plan, the employer is required to pay for its share of unfunded benefits. Withdrawal liability may be paid in annual installments, calculated in part based on the “highest contribution rate” the employer was required to pay into the plan during a specified time period. When a multiemployer plan is underfunded and in critical status, the employer must pay a surcharge of five or 10 percent of the total amount of contributions the employer was required to make to the plan each year.The district court entered summary judgment in favor of the defendant in an action brought by a multiemployer pension plan, seeking a recalculation of the defendant’s annual withdrawal liability payments. The Ninth Circuit affirmed. For purposes of determining an employer’s annual withdrawal payment, a surcharge paid by the employer when a plan is in critical status is not included in the calculation of the “highest contribution rate.” The surcharge automatically imposed on an employer when a plan is in critical status does not increase the applicable contribution rate, which in this case is the dollar amount per compensable hours. View "Western States Office and Professional Employees Pension Fund v. Welfare & Pension Administration Service, Inc." on Justia Law

The Second Circuit affirmed the district court's judgment in an action brought by the Fund against C&S Wholesale Grocers under the Employee Retirement Income Security Act (ERISA). The court held that the district court did not err in dismissing the Fund's evade-or-avoid liability theory; the district court did not err in dismissing the Fund's common control liability; the district court did not err in finding that C&S was not an employer of the Union employees at the Syracuse warehouse; and successor liability can, as a matter of law, apply to withdrawal liability under ERISA. However, in this case, the district court did not err in granting C&S's motion for summary judgment because C&S did not substantially continue Penn Traffic's relevant business, and therefore was not subject to successor liability. View "NY State Teamsters Conference Pension and Retirement Fund v. C&S Wholesale Grocers, Inc." on Justia Law

Northwestern’s defined contribution retirement plans, governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, allowed participants to choose an individual investment mix from a menu of options selected by plan administrators. Participants claimed those administrators violated their duty of prudence by offering needlessly expensive investment options and paying excessive record-keeping fees. The Seventh Circuit affirmed the dismissal of those claims, finding that the plaintiffs’ preferred type of low-cost investments were available as plan options.The Supreme Court vacated. A categorical rule is inconsistent with the context-specific inquiry that ERISA requires and fails to take into account the duty of plan fiduciaries to monitor all plan investments and remove any imprudent ones. The Seventh Circuit erroneously focused on another component of the duty of prudence: the obligation to assemble a diverse menu of options. Provision of an adequate array of investment choices, including the lower cost investments plaintiffs wanted, does not excuse the allegedly imprudent decisions. Even if participants choose their investments, plan fiduciaries must conduct their own independent evaluation to determine which investments may be prudently included in the plan’s menu of options. If the fiduciaries fail to remove an imprudent investment from the plan within a reasonable time, they breach their duty. The Court remanded, “so that the Seventh Circuit may reevaluate the allegations as a whole, considering whether petitioners have plausibly alleged a violation of the duty of prudence,” which turns on the circumstances prevailing when the fiduciary acts. View "Hughes v. Northwestern University" on Justia Law

Through a bankruptcy proceeding, Bristol became the successor-in-interest to Haven, an accredited mental-health and substance-abuse treatment center that regularly serviced patients insured by Cigna. Bristol alleged that Cigna violated the Employee Retirement Income Security Act of 1974 (ERISA) and state law by denying Haven’s claims for reimbursement for services provided. Haven was out-of-network for Cigna’s insureds. The district court dismissed Bristol’s ERISA claim, as an assignee of a healthcare provider, for lack of derivative standing, or lack of authority to bring a claim under ERISA, 29 U.S.C. 1132(a)(1)(B).The Ninth Circuit reversed. Under ERISA, a non-participant health provider cannot bring claims for benefits on its own behalf but must do so derivatively, relying on its patients’ assignments of their benefits claims. Other assignees also may have derivative standing if extending standing would align with the goal of ERISA. Refusing to allow derivative standing for Bristol would create serious perverse incentives that would undermine the goal of ERISA. Denying derivative standing to health care providers would harm participants or beneficiaries because it would discourage providers from becoming assignees and possibly from helping beneficiaries who were unable to pay up-front. View "Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co." on Justia Law

Plaintiff filed suit against MasterCard for life insurance benefits under MasterCard's employee benefits plan, alleging breach of fiduciary duty under the Employee Retirement and Income Security Act (ERISA), breach of contract, and fraud.The Eighth Circuit reversed the district court's grant of summary judgment in favor of MasterCard on plaintiff's breach of fiduciary claim, concluding that plaintiff plausibly alleged that his wife elected a total amount of three times her salary in life insurance, for which MasterCard promised to pay premiums. The court explained that, if that proves true, MasterCard's failure to pay premiums would constitute a breach of the fiduciary duty it owed its employees participating in its ERISA-governed benefit plan. Furthermore, plaintiff plausibly alleged that, if his wife's election was in fact deficient for any reason, MasterCard's materially misleading statements caused her to reasonably believe that she had elected three times her salary in life insurance, premiums paid by her employer, and to rely upon that belief in declining to purchase additional life insurance as she was entitled to do. The court affirmed as to the remaining claims and concluded that amendment would be futile. View "Delker v. Mastercard International, Inc." on Justia Law

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