Justia ERISA Opinion Summaries
Articles Posted in ERISA
Mullins v. Consol Energy Inc Long Term Disability Plan
Timothy Mullins, a coal miner, suffered an ankle stress fracture in 2015 while working as a Section Supervisor at a coal mine owned by CONSOL Energy, Inc. He initially received long-term disability benefits under CONSOL's ERISA-governed Long-Term Disability Plan, administered by Lincoln Financial Group. However, his benefits were terminated in 2020 after Lincoln determined, based on medical evaluations and a vocational assessment, that Mullins did not demonstrate "total disability" as required under the Plan. Lincoln's decision was based on a vocational report that incorrectly listed Mullins's job as "Mine Superintendent" rather than Section Supervisor.The United States District Court for the Western District of Pennsylvania upheld Lincoln's decision to terminate Mullins's benefits, granting summary judgment in favor of the Plan. The District Court found that Lincoln's decision was supported by substantial medical and vocational evidence and was not arbitrary and capricious. Mullins appealed the decision, arguing that Lincoln's reliance on the incorrect job title in the vocational report led to an erroneous termination of his benefits.The United States Court of Appeals for the Third Circuit reviewed the case and found that Lincoln's reliance on the incorrect vocational report was arbitrary and capricious. The court noted that the error in the job title led to an incorrect assessment of Mullins's qualifications and experience, which in turn resulted in the wrongful termination of his benefits. The Third Circuit vacated the District Court's judgment and remanded the case for reinstatement of Mullins's long-term disability benefits. The court also instructed the District Court to consider Mullins's claim regarding the improper offset of benefits due to Social Security disability benefits. View "Mullins v. Consol Energy Inc Long Term Disability Plan" on Justia Law
State of Utah v. Su
A group of plaintiffs, including several states and corporations, challenged a Department of Labor rule that allowed ERISA fiduciaries to consider environmental, social, and governance (ESG) factors when making investment decisions if those factors equally serve the financial interests of the plan. This rule was issued following an executive order by President Biden, which counteracted a previous Trump-era rule that prohibited considering non-pecuniary factors in investment decisions.The United States District Court for the Northern District of Texas upheld the Department of Labor's rule, relying on the Chevron deference doctrine, which allows courts to defer to a federal agency's interpretation of ambiguous statutory language. The district court concluded that the rule was not "manifestly contrary to the statute" after affording the Department the deference due under Chevron.The United States Court of Appeals for the Fifth Circuit reviewed the case. During the appeal, the Supreme Court decided Loper Bright Enterprises v. Raimondo, which overruled Chevron, thus eliminating the deference previously given to agency interpretations. Given this significant change in the legal landscape, the Fifth Circuit vacated the district court's judgment and remanded the case for reconsideration in light of the new Supreme Court decision. The appellate court emphasized the importance of allowing the district court to reassess the merits without the Chevron framework, ensuring that the lower court's independent judgment is applied to the statutory interpretation of ERISA. View "State of Utah v. Su" on Justia Law
Allied Painting & Decorating Inc v. International Painters and Allied Trades Industry Pension
Allied Painting & Decorating, Inc. withdrew from the International Painters and Allied Trades Industry Pension Fund in 2005. Twelve years later, the Fund demanded $427,195 from Allied, claiming it was owed for the withdrawal. The key issue was whether the Fund's delay in sending the demand violated the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), which requires that such demands be made "as soon as practicable" after withdrawal.The United States District Court for the District of New Jersey reviewed the case after Allied contested the demand, arguing that the delay caused significant prejudice. The Arbitrator initially found that the Fund did not act "as soon as practicable" but concluded that Allied failed to prove severe prejudice, thus rejecting Allied's laches defense. The District Court, however, found that Allied was prejudiced by the delay and vacated the Arbitrator's Award.The United States Court of Appeals for the Third Circuit reviewed the case and affirmed the District Court's order vacating the Arbitrator's Award. The Third Circuit held that the Fund's failure to send the demand "as soon as practicable" after Allied's withdrawal violated the MPPAA. The court clarified that the "as soon as practicable" requirement is a statutory mandate independent of any laches defense, meaning that the Fund's delay alone was sufficient to invalidate the demand, regardless of whether Allied could prove prejudice. Consequently, the Fund could not recover the claimed withdrawal liability from Allied. View "Allied Painting & Decorating Inc v. International Painters and Allied Trades Industry Pension" on Justia Law
Goldfarb v. Reliance Standard Life Insurance Co.
The case involves two brothers, Levi and Benjamin Goldfarb, who sought payment of a $500,000 claim under an Accidental Death & Dismemberment insurance policy after their father, Dr. Alexander Goldfarb, died while mountain climbing in Pakistan. The insurer, Reliance Standard Life Insurance Company, denied the claim because the cause of Dr. Goldfarb’s death was unknown, and therefore, his beneficiaries could not show that he died by accident. The Goldfarb brothers challenged the denial in district court under the Employee Retirement Security Act.The district court ruled in favor of the Goldfarbs, stating that Dr. Goldfarb’s death was accidental and that Reliance Standard’s failure to pay the Accidental Death & Dismemberment claim was arbitrary and capricious. The court granted summary judgment to the Goldfarbs and denied Reliance Standard’s cross motion for summary judgment. Reliance Standard appealed this decision.The United States Court of Appeals for the Eleventh Circuit disagreed with the district court's decision. The appellate court found that Reliance Standard’s decision that Dr. Goldfarb’s death was not accidental under the insurance policy was supported by reasonable grounds, and the denial of the Goldfarbs’ claim for benefits was not arbitrary and capricious. Therefore, the court reversed the district court’s grant of summary judgment to the Goldfarbs and directed the court to enter judgment in Reliance Standard’s favor. View "Goldfarb v. Reliance Standard Life Insurance Co." on Justia Law
Su v. Ascent Construction
The case involves the United States Department of Labor (DOL) and Ascent Construction, Inc., its CEO Bradley Knowlton, and the Ascent Construction, Inc. Employee Stock Ownership Plan (the Plan). The DOL investigated Ascent and Knowlton for potential breaches of their fiduciary duties under the Employee Retirement Income Security Act (ERISA). The DOL found that Knowlton had deposited over $311,000 of the Plan’s cash into Ascent’s checking accounts and used it to pay Ascent’s business expenses. The DOL also discovered that a former Ascent employee had requested a distribution from his retirement account but never received it, even though the Plan’s custodian had issued a distribution check at Knowlton’s request.The DOL filed a lawsuit alleging that Knowlton and Ascent had violated ERISA’s fiduciary-duty standard and prohibited-transaction rules. The DOL sought a preliminary injunction to remove Knowlton and Ascent as Plan fiduciaries and appoint an independent fiduciary to prevent further ERISA violations and dissipation of the Plan’s assets. The district court granted the DOL’s motion, and the defendants filed an interlocutory appeal.While the appeal was pending, the case proceeded in the lower court. The DOL filed an amended complaint and discovery commenced. The district court later entered a default judgment against the defendants due to their willful failure to engage in the litigation process and comply with the court’s orders. The court also issued a permanent injunction that superseded the preliminary injunction, permanently barring Knowlton and Ascent from serving as trustee and administrator of the Plan.The United States Court of Appeals for the Tenth Circuit dismissed the defendants' appeal as moot. The court reasoned that the preliminary injunction dissolved automatically with the entry of the final judgment, regardless of whether the final judgment was issued on the merits or by way of default judgment. The court concluded that granting the defendants’ requested relief—vacatur of the preliminary injunction—would have no “effect in the real world.” View "Su v. Ascent Construction" on Justia Law
Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co.
The case involves Bristol SL Holdings, Inc., the successor-in-interest to Sure Haven, Inc., a defunct drug rehabilitation and mental health treatment center, and Cigna Health and Life Insurance Company and Cigna Behavioral Health, Inc. Bristol alleged that Sure Haven's calls to Cigna verifying out-of-network coverage and seeking authorization to provide health services created independent contractual obligations. Cigna, however, denied payment based on fee-forgiving, a practice prohibited by the health plans. Bristol brought state law claims for breach of contract and promissory estoppel against Cigna.The district court initially dismissed Bristol’s claims, but the Ninth Circuit Court of Appeals reversed the dismissal, holding that Bristol had derivative standing to sue for unpaid benefits as Sure Haven’s successor-in-interest. On remand, the district court granted Cigna’s motion for summary judgment, ruling that the Employee Retirement Income Security Act of 1974 (ERISA) preempted Bristol’s state law claims.On appeal, the Ninth Circuit Court of Appeals affirmed the district court's decision. The court held that Bristol’s state law claims were preempted by ERISA because they had both a “reference to” and an “impermissible connection with” the ERISA plans that Cigna administered. The court reasoned that Bristol’s claims were not independent of an ERISA plan because they concerned the denial of reimbursement to patients who were covered under such plans. The court also held that allowing liability on Bristol’s state law claims would interfere with nationally uniform plan administration, a central matter of plan administration. View "Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co." on Justia Law
UBS Financial Services Inc. v. Estate of Jose Nazario Serrano
The case revolves around the Employees Retirement System of the Government of the Commonwealth of Puerto Rico (ERS), which was established in 1951 as the Commonwealth's pension program for public employees. The appellants are seven individual beneficiaries of pensions paid by ERS. They had been litigating claims against UBS Financial Services Inc. (UBS) in the Commonwealth Court of First Instance related to UBS's role in issuing ERS pension funding bonds in 2008. Meanwhile, in January 2022, as part of its broad authority to promulgate orders necessary to carry out the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), the district court confirmed the Modified Eighth Amended Title III Joint Plan of Adjustment (the Plan).The district court had previously confirmed the Plan, which implemented several changes related to ERS and its pension plan payments to retired Commonwealth employees. The Plan replaced the Committee with the Avoidance Action Trustee as the plaintiff with exclusive power to prosecute the Underwriter Action and recover damages that ERS incurred. The Plan also ordered the immediate dissolution of ERS.UBS filed a motion to enforce the Plan, requesting that the district court enjoin the ERS Beneficiaries from pursuing the Commonwealth Action. The district court granted UBS's motion and enjoined the ERS Beneficiaries from pursuing the Commonwealth Action. The district court concluded that the ERS Beneficiaries' Commonwealth Action claims were rooted in a generalized injury and were derivative of ERS's right to recover on its own behalf. The district court further rejected the ERS Beneficiaries' arguments that they were entitled to recover for non-derivative general tort claims against UBS under various Commonwealth statutes.The United States Court of Appeals for the First Circuit affirmed the district court's decision, concluding that the ERS Beneficiaries sought to raise derivative claims that belong exclusively to the Trustee or the Commonwealth. The court held that continued litigation of the FAC's derivative claims violates the terms of the Plan and PROMESA. View "UBS Financial Services Inc. v. Estate of Jose Nazario Serrano" on Justia Law
Trustees of the NYSNAPP v. White Oak Glob. Adv.
The Trustees of the New York State Nurses Association Pension Plan (the Trustees) and White Oak Global Advisors, LLC (White Oak) entered into an investment management agreement, which included an arbitration clause. The Trustees later brought several fiduciary duty claims against White Oak under the Employee Retirement Income Security Act (ERISA), which were resolved through arbitration. The arbitrator issued an award in favor of the Trustees, which the Trustees sought to confirm in the United States District Court for the Southern District of New York.White Oak appealed the confirmation, arguing that the district court lacked jurisdiction and that the court erroneously interpreted the award. The United States Court of Appeals for the Second Circuit affirmed the district court's jurisdiction, finding that the Trustees' petition to confirm the award was cognizable under ERISA § 502(a)(3). The court also affirmed the district court's interpretation of the award regarding the disgorgement of pre-award interest and the "Day One" fees. However, the court vacated and remanded the district court's confirmation of the disgorgement of White Oak's "profits," finding the award too ambiguous to enforce. The court also vacated and remanded the district court's order for White Oak to pay the Trustees' attorneys' fees and costs, finding the district court's findings insufficiently specific. View "Trustees of the NYSNAPP v. White Oak Glob. Adv." on Justia Law
Mator v. Wesco Distribution Inc
The case involves plaintiffs Nancy Mator and Robert Mator, who are participants in the Wesco Distribution, Inc. Retirement Savings Plan. They sued Wesco Distribution, Inc., its fiduciaries, and the Plan, alleging that they violated fiduciary duties imposed by the Employee Retirement Income Security Act of 1974 (ERISA) by paying excessive recordkeeping fees and failing to monitor the Plan. The District Court dismissed the complaint with prejudice.The plaintiffs appealed to the United States Court of Appeals for the Third Circuit. They argued that the District Court erred in dismissing their complaint, which alleged that Wesco breached its fiduciary duties under ERISA by causing the Plan to pay excessive recordkeeping fees, offering retail-class shares of mutual funds, and failing to monitor those responsible for the Plan.The Court of Appeals agreed with the plaintiffs. It found that the plaintiffs' allegations were sufficient to state a claim for breach of fiduciary duty. The Court noted that the plaintiffs provided specific plan comparators and plausibly alleged that the services purchased were sufficiently similar to render the comparisons valid. The Court also found that the plaintiffs adequately alleged a fiduciary breach based on the Plan’s offerings of retail-class mutual fund shares.The Court of Appeals vacated the District Court's dismissal of the complaint and remanded the case for further proceedings. View "Mator v. Wesco Distribution Inc" on Justia Law
BAFFORD V. ADMINISTRATIVE CMTE. OF THE NORTHROP GRUMMAN PLAN
The case involves pension plan participants, Evelyn Wilson and Stephen Bafford, who alleged that the plan administrator, the Administrative Committee of the Northrop Grumman Pension Plan, violated the Employee Retirement Income Security Act (ERISA) by not providing pension benefit statements automatically or on request, and by providing inaccurate pension benefit statements prior to their retirements. The district court initially dismissed the case, but on appeal, the Ninth Circuit Court of Appeals affirmed in part and vacated in part the dismissal, allowing the plaintiffs to file amended complaints.Upon remand, the plaintiffs filed amended complaints, but the district court dismissed their claims again. The plaintiffs appealed once more to the Ninth Circuit Court of Appeals. The Ninth Circuit held that the lower court's prior mandate did not preclude the plaintiffs from pleading their claim for violation of ERISA on remand. The court also held that the plaintiffs stated a viable claim under ERISA by alleging that the plan administrator provided substantially inaccurate pension benefit statements.The court rejected the administrator’s argument that there were no remedies available for the ERISA violations the plaintiffs alleged. As a result, the Ninth Circuit reversed the district court’s dismissal of the plaintiffs’ claims and remanded the case for further proceedings. View "BAFFORD V. ADMINISTRATIVE CMTE. OF THE NORTHROP GRUMMAN PLAN" on Justia Law