Justia ERISA Opinion Summaries

The First Circuit vacated the judgment of the district court in part ruling in favor of Putnam Investments, LLC and other fiduciaries of Putnam’s defined-contribution 401(k) retirement plan on Plaintiffs’ lawsuit claiming that Defendants breached fiduciary duties to the plan's participants, clarifying several principles for the district court that should guide its subsequent rulings on remand.Plaintiffs, two former Putnam employees who participated in the Plan, brought this lawsuit on behalf of a now-certified class of other participants in the Plan and on behalf of the Plan itself pursuant to the civil enforcement provision of ERISA, see 29 U.S.C. 1132(a)(2), arguing that Defendants offered a range of mutual investments, including Putnam’s mutual funds, without regard to whether such funds were prudent investment options and that Defendants treated Plan participants worse than other investors in Putnam mutual funds. The district court ruled in favor of Defendants. The First Circuit (1) affirmed the district court’s dismissal of Plaintiffs’ prohibited transaction claim under 1106(a)(1)(C), breach of loyalty claim, and disgorgement claim; (2) vacated the court’s dismissal of Plaintiffs’ prohibited transaction claim under 1106(b)(3) and the finding that Plaintiffs failed as a matter of law to show loss; and (3) remanded for further proceedings. View "Brotherston v. Putnam Investments, LLC" on Justia Law

Plaintiff filed suit against Prudential and Turner for violations of the Employee Retirement Income Security Act of 1974 (ERISA) and state law. Prudential counterclaimed, seeking repayment of short term disability (STD) benefits it allegedly paid in error. The district court rejected plaintiff's claims and granted summary judgment for Prudential on its repayment counterclaim.The Fifth Circuit reversed and remanded the district court's dismissal of plaintiff's claims for fiduciary breach and failure to provide documents as to Turner and his claim for plan benefits and discrimination as to Prudential; reversed and remanded the grant of summary judgment to Prudential on its claim for reimbursement; affirmed the dismissal of plaintiff's fiduciary breach and failure to provide document claims against Prudential; affirmed the application of the abuse of discretion standard to plaintiff's claims for plan benefits; instructed the district court to consider anew any discovery requests related to plaintiff's surviving claims; and vacated the award of prejudgment interest to Prudential. View "Manuel v. Turner Industries Group, LLC" on Justia Law

Hennen worked as a sales specialist for NCR, 2010-2012, and was covered by long-term disability insurance under a group policy provided by MetLife. She sought treatment for a back injury. When physical therapy and surgery failed to resolve her injury, Hennen applied for long-term disability benefits. Acting as plan administrator, MetLife agreed that Hennen was disabled and paid benefits for two years. The plan has a two-year limit for neuromusculoskeletal disorders, subject to exceptions, including on for radiculopathy, a “Disease of the peripheral nerve roots supported by objective clinical findings of nerve pathology.” After MetLife terminated Hennen’s benefits, she sued under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001 (ERISA), arguing that MetLife’s determination that she did not have radiculopathy was arbitrary and capricious. The district court granted MetLife summary judgment. The Seventh Circuit reversed. MetLife acted arbitrarily when it discounted the opinions of four doctors who diagnosed Hennen with radiculopathy in favor of the opinion of one physician who ultimately disagreed, but only while recommending additional testing that MetLife declined to pursue. View "Hennen v. Metropolitan Life Insurance Co." on Justia Law

Plaintiff appealed the district court's summary judgment in favor of the trustees of two union-affiliated employee benefit plans on her claims for relief pursuant to the Employee Retirement Income Security Act (ERISA). The Second Circuit affirmed the district court's decision denying plaintiff's claim under section 502(a)(1)(B) of ERISA against the Pension Fund for benefits due, and held that the Pension Fund trustees correctly denied plaintiff's request for an augmented survivor benefit following her husband's death. In regard to plaintiff's section 502(a)(3) claim for breach of fiduciary duty, the court rejected the district court's reasoning that a plan administrator cannot be held liable for unintentional misrepresentations made about the plan's operation by its non‐fiduciary, "ministerial" agent. The court nonetheless affirmed the district court's denial of relief under section 502(a)(3) because the Pension Plan's summary plan description (SPD) adequately described the eligibility requirements for the benefits in question and thereby satisfied the trustees' fiduciary duty to provide complete and accurate information to plan participants and beneficiaries. Therefore, the court affirmed as to Case No. 16‐3549‐cv.The court reversed and remanded as to Case No. 16‐977‐cv, holding that there was an open question of material fact concerning whether the Welfare Fund trustees breached their fiduciary duty to provide plan participants with complete and accurate information about their benefits. View "In re: DeRogatis" on Justia Law

Plaintiff filed suit alleging that DBG had discontinued its Employee Retirement Income Security Act (ERISA) health plan without notifying him, in violation of the Consolidated Omnibus Budget Recovery Act's (COBRA) notice requirements. The Fifth Circuit reversed the district court's dismissal of the COBRA claim and held that plaintiff adequately alleged that DBG did not fulfill its notice obligations under COBRA, and that DBG's letter was insufficient to support dismissal of his notice claim. The court held that the district court abused its discretion when it ruled that plaintiff was legally barred from obtaining a penalty award, and remanded the case to the district court to determine whether, in light of the foregoing analysis, to award a civil penalty, and if it did, the amount of such penalty. The court also remanded to the district court for it to determine whether attorneys fees were applicable in this case. View "Hager v. DBG Partners, Inc." on Justia Law

The First Circuit reversed in part, vacated in part, and remanded for further proceedings the district court’s denial of Plaintiff’s challenge of Harvard Pilgrim Health Care’s (HPHC) denial of coverage for the cost of Plaintiff’s uncovered care at a mental health residential treatment facility, holding that the administrative record upon which the district court based its findings should have been supplemented.HPHC, Plaintiff’s insurer, deemed a portion of the time Plaintiff spent at the residential facility not medically necessary under the health care benefits plan established by the employer of Plaintiff’s parent and therefore denied coverage for that portion of the treatment. Plaintiff brought suit under ERISA, 29 U.S.C. 1001-1461. The district court affirmed on de novo review, concluding that continued residential treatment was not medically necessary for Plaintiff. The First Circuit vacated the district court’s order granting summary judgment for HPHC and remanded for further proceedings, holding (1) when a district court examines the denial of ERISA benefits de novo, the court’s factual findings are reviewed only for clear error; and (2) such a deferential review cannot properly be conducted in this case on the administrative record. View "Doe v. Harvard Pilgrim Health Care, Inc." on Justia Law

Plaintiff filed suit against Whole Foods executives, alleging that they breached their fiduciary duties by allowing employees to continue to invest in Whole Foods stock while its value was artificially inflated due to a widespread overpricing scheme. The Fifth Circuit affirmed the district court's dismissal of the claims, holding that plaintiff failed to plausibly allege an alternative action that defendants could have taken that would have been consistent with the securities laws and that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the fund than to help it. View "Martone v. Robb" on Justia Law

Providers filed a class action in state court alleging that GHC violated the Washington Consumer Protection Act by using the Milliman Care Guidelines for mental healthcare coverage. After GHC removed to federal court, the district court denied Providers' motion to remand and granted a motion to dismiss in part. The district court then declined to exercise supplemental jurisdiction over Providers' claims as to GHC's administration of non-Employee Retirement Income Security Act (ERISA) plans, and remanded that part of the case back to Washington state court.The Ninth Circuit reversed, holding that Providers' claims did not fall within the scope of, and so were not completely preempted by, section 502(a)(1)(B) of ERISA. The panel reversed the district court's exercise of subject matter jurisdiction in dismissing these claims, and remanded with instructions for the district court to return the entirety of this action to the Washington superior court. View "Hansen v. Group Health Cooperative" on Justia Law

Nevada Senate Bill 223, which limits damages that can be collected from general contractors and imposed notification requirements on contractors and welfare benefit plans, was a legitimate exercise of Nevada's traditional state authority and was not preempted by the Employee Retirement Income Security Act (ERISA).The Ninth Circuit vacated the district court's grant of summary judgment to plaintiffs. Determining that the appeal was not moot, the panel held that SB 223 was not preempted because it did not intrude on any federally regulated field, conflict with ERISA's objectives, or otherwise impermissibly relate to ERISA plans. Rather, SB 223 targeted an area of traditional state concern—debt collection—and pared back a state-conferred entitlement to collect unpaid debts from third-party general contractors. Therefore, SB 223 was a legitimate exercise of Nevada's traditional state authority. View "Board of Trustees of the Glazing Health and Welfare Trust v. Chambers" on Justia Law

The Pension Benefit Guaranty Corporation (PBGC) insures uninterrupted payment of benefits under terminated private-sector pension and health plans subject to ERISA, 29 U.S.C. 1001–1461. PBGC is funded by insurance premiums paid by sponsoring companies and from assets acquired from terminated plans and recovered from underfunded plan sponsors in bankruptcy. The plan's sponsor and “trades or businesses” related to the sponsor through common ownership are jointly and severally liable for those liabilities. PBGC sued to collect $30 million in underfunded pension liabilities from Findlay Industries following its 2009 shutdown and looked to hold liable a trust started by Findlay’s founder, Philip Gardner, and to apply the federal-common-law doctrine of successor liability to hold Michael, Philip’s son, liable. Michael, a 45 percent shareholder and former CEO of Findlay, had purchased Findlay’s assets and started his own companies using the same land, hiring many of the same employees, and selling to Findlay’s largest customer. The district court ruled against PBGC. The Sixth Circuit reversed. An entity that owns land and leases it to an entity under common control should be considered, categorically, a “trade or business” under ERISA, to recognize the differences between ERISA and the tax code, satisfy the purposes of ERISA, and be consistent with other circuits. Refusing to apply successor liability here would allow Findlay to fail to uphold its promises to employees, then engage in clever financial transactions that leave PBGC to pay millions in pension liabilities. View "Pension Benefit Guaranty Corp. v. Findlay Industries, Inc." on Justia Law