Justia ERISA Opinion Summaries

The First Circuit affirmed the district court’s denial of Plaintiffs’ complaint alleging violations of the fiduciary duty of prudence under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001-1461, by the fiduciaries of an employer-sponsored retirement plan for failure to state a claim.Plaintiffs, three individuals who participated in an ERISA employee retirement plan that was sponsored by their employer, CVS Health Corporation (CVS), and administered by the Benefits Plan Committee of CVS (the Committee), alleged that CVS, the Committee, and Galliard Capital Management, Inc., which managed the fund, owed Plaintiffs a fiduciary duty of prudence under ERISA with respect to the plan’s investments in the fund and that each of the defendants breached that duty. The district court granted Defendants’ motion to dismiss the complaint for failure to state a claim under ERISA. The First Circuit affirmed, holding that Plaintiffs’ complaint failed to state a plausible claim against any of the defendants. View "Barchock v. CVS Health Corp." on Justia Law

The Ninth Circuit affirmed the district court's dismissal of an action under the Employee Retirement Income Security Act (ERISA). In this case, employee benefit trust funds sought unpaid contributions owed under the contracts governing the benefit plans that the trust funds managed for Accuracy Glass & Mirror Company. The panel held that plaintiffs' claims were foreclosed by Bos v. Bd. of Trustees (Bos I), 795 F.3d 1006 (9th Cir. 2015), which held that employers are not fiduciaries under ERISA as to unpaid contributions to ERISA benefit plans. View "Glazing Health & Welfare Fund v. Lamek" on Justia Law

The Ninth Circuit affirmed the district court's dismissal of an action under the Employee Retirement Income Security Act (ERISA). In this case, employee benefit trust funds sought unpaid contributions owed under the contracts governing the benefit plans that the trust funds managed for Accuracy Glass & Mirror Company. The panel held that plaintiffs' claims were foreclosed by Bos v. Bd. of Trustees (Bos I), 795 F.3d 1006 (9th Cir. 2015), which held that employers are not fiduciaries under ERISA as to unpaid contributions to ERISA benefit plans. View "Glazing Health & Welfare Fund v. Lamek" on Justia Law

The Tennessee Valley Authority (TVA) funds a retirement plan, administered by “the Board, and provides defined benefits to participants that includes a cost-of-living adjustment. In 2009, the Plan found that its liabilities exceeded its assets and it needed to make some changes to ensure its long-term stability. The Board temporarily lowered cost-of-living adjustments and increased the age at which certain participants would become eligible for cost-of-living adjustments. Plaintiffs, a class of participants, maintain that the Board failed to give proper notice to the TVA and Plan members before making the cuts and violated the Plan’s rules by paying their cost-of-living adjustments for certain years out of the wrong account. The district court rejected both claims on summary judgment. The Sixth Circuit affirmed in part, agreeing that the Board gave the required 30 days’ notice to the TVA and Plan members, after which the TVA may “veto any such proposed amendment” within the 30-day period, “in which event it shall not become effective.” The court vacated and remanded the accounting claim with instructions to dismiss it for lack of subject-matter jurisdiction. Plaintiffs have suffered no injury-in-fact, and have no standing. View "Duncan v. Muzyn" on Justia Law

Business groups challenged the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and the Internal Revenue Code, 26 U.S.C. 4975. The business groups alleged the Rule’s inconsistency with the governing statutes; DOL’s overreaching to regulate services and providers beyond its authority; DOL’s imposition of legally unauthorized contract terms to enforce the new regulations; First Amendment violations; and the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The Fifth CIrcuit vacated the district court’s rejection of all of those challenges. DOL’s interpretation of “investment advice fiduciary” relies too narrowly on a purely semantic construction of one isolated statutory provision and wrongly presupposes that the statutory provision is inherently ambiguous. Congress intended to incorporate the well-settled meaning’” of “fiduciary.” In addition, the Fiduciary Rule renders the second prong of ERISA’s fiduciary status definition in tension with its companion subsections. DOL therefore lacked statutory authority to promulgate the Rule with its overreaching definition of “investment advice fiduciary.” View "Chamber of Commerce of the USA v. United States Department of Labor" on Justia Law

In 2009, ManWeb, an Indianapolis industrial construction company, paid $259,360 for the assets of Frieje, a smaller Indianapolis construction company specializing in cold‐storage facilities. Freije was a party to a collective bargaining agreement (CBA); ManWeb was non‐union. Freije contributed to a multi-employer pension fund and was required to pay withdrawal liability of $661,978 when it ceased operations (Employee Retirement Income Security Act (ERISA); Multiemployer Pension Plan Amendments Act (MPPAA), 29 U.S.C. 1381). ManWeb did not contribute to the Fund after its purchase of Freije nor did it challenge the assessment. The Fund sued Freije and added ManWeb as a defendant based on successor liability. The Seventh Circuit concluded that ManWeb had notice of Freije’s contingent withdrawal liability, which was included in the Asset Purchase Agreement. On remand, the district court again granted ManWeb summary judgment. The Seventh Circuit vacated. MPPAA successor liability can apply when the purchaser had notice of the liability and there is continuity of business operations. In the totality of relevant circumstances, ManWeb’s purchase and use of Freije’s intangible assets (name, goodwill, trademarks, supplier and customer data, trade secrets, telephone numbers and websites) and its retention of Freije’s principals to promote ManWeb to existing and potential customers as carrying on the Freije business, weigh more heavily in favor of successor liability than the district court recognized. View "Indiana Electrical Workers Pension Benefit Fund v. ManWeb Services, Inc." on Justia Law

In 2009, ManWeb, an Indianapolis industrial construction company, paid $259,360 for the assets of Frieje, a smaller Indianapolis construction company specializing in cold‐storage facilities. Freije was a party to a collective bargaining agreement (CBA); ManWeb was non‐union. Freije contributed to a multi-employer pension fund and was required to pay withdrawal liability of $661,978 when it ceased operations (Employee Retirement Income Security Act (ERISA); Multiemployer Pension Plan Amendments Act (MPPAA), 29 U.S.C. 1381). ManWeb did not contribute to the Fund after its purchase of Freije nor did it challenge the assessment. The Fund sued Freije and added ManWeb as a defendant based on successor liability. The Seventh Circuit concluded that ManWeb had notice of Freije’s contingent withdrawal liability, which was included in the Asset Purchase Agreement. On remand, the district court again granted ManWeb summary judgment. The Seventh Circuit vacated. MPPAA successor liability can apply when the purchaser had notice of the liability and there is continuity of business operations. In the totality of relevant circumstances, ManWeb’s purchase and use of Freije’s intangible assets (name, goodwill, trademarks, supplier and customer data, trade secrets, telephone numbers and websites) and its retention of Freije’s principals to promote ManWeb to existing and potential customers as carrying on the Freije business, weigh more heavily in favor of successor liability than the district court recognized. View "Indiana Electrical Workers Pension Benefit Fund v. ManWeb Services, Inc." on Justia Law

The plaintiffs, former employees at Honeywell’s Boyne City, Michigan auto parts plant, were represented by the UAW while working. The collective bargaining agreement (CBA) between that union and Honeywell that became effective in 2011 and expired in 2016 stated: Retirees under age 65 who are covered under the BC/BS Preferred Medical Plan will continue to be covered under the Plan, until age 65, by payment of 16% of the retiree monthly premium costs ... as adjusted year to year,” Article 19.7.4. The plaintiffs took early retirement under the 2011 CBA and received Honeywell-sponsored healthcare, consistent with Article 19.7.4. Other Boyne City employees had retired before the 2011 CBA took effect, but were still eligible for benefits under Article 19.7.4. In 2015, Honeywell notified the UAW and the Boyne City retirees that it planned to terminate retiree medical benefits upon the 2011 CBA’s expiration. The plaintiffs, citing the Labor Management Relations Act, the Employment Retirement Income Security Act, and Michigan common law estoppel, obtained a preliminary injunction. The Sixth Circuit reversed, reasoning that the CBA did not clearly provide an alternative end date to the CBA’s general durational clause, so the plaintiffs have not shown a likelihood of success on the merits. View "Cooper v. Honeywell International, Inc." on Justia Law

The Fifth Circuit granted en banc review of this case to reconsider Pierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991), and to determine the default standard of review that applies when a beneficiary challenges a plan denial based on a factual determination of ineligibility. The court held that the Texas insurance code provision only renders discretionary clauses unenforceable, but does not attempt to prescribe the standard of review for federal courts deciding Employee Retirement Income Security Act (ERISA) cases. The court overruled Pierre and held that Firestone Tire & Rubber Co. v. Bruch's, 489 U.S. 101, 115 (1989), default de novo standard applied when the denial was based on a factual determination. The court held that Vega v. National Life Insurance Services, Inc., 188 F.3d 287 (5th Cir. 1999), will continue to provide the guiding principles on the scope of the record for future cases that apply de novo review to fact-based benefit denials. Therefore, the court vacated and remanded for the district court to apply the de novo standard of review. View "Ariana M. v. Humana Health Plan of Texas, Inc." on Justia Law

A plan administrator is not an Employee Retirement Income Security Act (ERISA) fiduciary when negotiating its compensation with a prospective customer. The Ninth Circuit reversed the district court's order denying defendants' motion to dismiss an action alleging breach of fiduciary duties in connection with a retirement plan. The panel held that defendant was not a fiduciary with respect to its receipt of revenue sharing payments from investment managers because the payments were fully disclosed before the provider agreements were signed and did not come from plan assets. The panel agreed with other circuits and held that defendant also was not a fiduciary with respect to its withdrawal of preset fees from plan funds. The panel explained that when a service provider's definitively calculable and nondiscretionary compensation was clearly set forth in a contract with the fiduciary-employer, collection of fees out of plan funds in strict adherence to that contractual term was not a breach of the provider’s fiduciary duty. The panel vacated class certification orders and remanded with instructions to dismiss the complaint. View "Santomenno v. Transamerica Life Insurance Co." on Justia Law