Justia ERISA Opinion Summaries

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

In this certified class action brought under the Employee Retirement Income Security Act of 1974 (ERISA), the district court correctly concluded that Plaintiffs failed to adduce evidence necessary to proceed to trial.Plaintiffs sued Fidelity Management Trust Company, the fiduciary for a fund in which Plaintiffs had invested, arguing that Fidelity breached its duties of loyalty and prudence in managing the fund. The district court granted summary judgment for Fidelity, finding that Plaintiffs’ arguments lacked the evidentiary support needed to survive summary judgment. The First Circuit affirmed, holding (1) the district court employed the correct legal test in its evaluation of the evidence; and (2) the district court correctly held that Plaintiffs had presented insufficient evidence to proceed to trial on their claims of disloyalty and imprudence. View "Ellis v. Fidelity Management Trust Co." on Justia Law

Dragus, who managed information technology for convention vendors, experienced severe neck pain for several years. He underwent a three-level cervical spine fusion, which failed to resolve his pain. Over the next two years, Dragus underwent physical therapy, steroid injections, and a surgical procedure that severs nerve roots in the spinal cord. Physicians also prescribed a pain medication, which caused memory impairment and hand tremors. Dragus went on short-term disability to participate in a full-time pain management program. Within two months of Dragus’s return to work, the pain returned, resulting in excessive absences. Dragus sought long-term disability benefits through a Reliance group policy and applied for Social Security Disability (SSDI) benefits. Reliance denied Dragus’ application, stating that reports by medical experts did not indicate a physical or mental condition at a level of severity that would make Dragus unable to perform the material duties of his regular occupation. Dragus requested reconsideration. Reliance obtained additional medical opinions and independent review by a psychiatrist and occupational medicine specialist. Dragus was allowed to correspond with the specialists. Reliance affirmed its denial. Dragus filed suit under ERISA, 29 U.S.C. 1132(a)(1)(B)). The court denied Dragus’s motions for discovery outside the claim file record and to supplement the claim record with a fully favorable SSDI decision and granted summary judgment in favor of Reliance. The Seventh Circuit affirmed. The policy grants Reliance discretionary review; Reliance’s decision was not arbitrary. View "Dragus v. Reliance Standard Life Insurance Co." on Justia Law

Dragus, who managed information technology for convention vendors, experienced severe neck pain for several years. He underwent a three-level cervical spine fusion, which failed to resolve his pain. Over the next two years, Dragus underwent physical therapy, steroid injections, and a surgical procedure that severs nerve roots in the spinal cord. Physicians also prescribed a pain medication, which caused memory impairment and hand tremors. Dragus went on short-term disability to participate in a full-time pain management program. Within two months of Dragus’s return to work, the pain returned, resulting in excessive absences. Dragus sought long-term disability benefits through a Reliance group policy and applied for Social Security Disability (SSDI) benefits. Reliance denied Dragus’ application, stating that reports by medical experts did not indicate a physical or mental condition at a level of severity that would make Dragus unable to perform the material duties of his regular occupation. Dragus requested reconsideration. Reliance obtained additional medical opinions and independent review by a psychiatrist and occupational medicine specialist. Dragus was allowed to correspond with the specialists. Reliance affirmed its denial. Dragus filed suit under ERISA, 29 U.S.C. 1132(a)(1)(B)). The court denied Dragus’s motions for discovery outside the claim file record and to supplement the claim record with a fully favorable SSDI decision and granted summary judgment in favor of Reliance. The Seventh Circuit affirmed. The policy grants Reliance discretionary review; Reliance’s decision was not arbitrary. View "Dragus v. Reliance Standard Life Insurance Co." on Justia Law

Caroline Burton and Brenda Olivar submitted claims for long-term disability benefits to insurance companies under employee-benefits plans set up by their employers (“the Plans”). The insurance companies denied Burton’s and Olivar’s claims. Burton and Olivar sued the Plans under the Employee Retirement Income Security Act (“ERISA”) for benefits due to them under the insurance policies. But neither served the Plans. Rather, they each served complaints on the United States Department of Labor Secretary, relying on an ERISA provision allowing such service when a plan hasn’t designated “an individual” as an agent for service of process. In both cases, the Labor Secretary never forwarded the complaint to the Plans’ designated agents for service of process, the Plans failed to answer, and Burton and Olivar obtained default judgments in their favor. Eventually, the Plans moved to set aside the default judgments for improper service, which the trial courts granted in both cases. Later, the Plans moved for summary judgment, arguing the insurers, which were obligated to make all eligibility determinations and payments under the Plans’ terms, were the only proper party defendants. The trial courts agreed, granting the Plans summary judgment. A division of the court of appeals affirmed. The issue presented to the Colorado Supreme Court for resolution centered on whether ERISA’s use of the term “individual” provided that service on the Labor Secretary was sufficient when a plan designates a corporation (instead of a natural person) as its administrator and agent for service of process. Finding no reversible error in the district court’s judgment, the Supreme Court affirmed. View "Burton v. Colorado Access & No." on Justia Law

The Fifth Circuit affirmed the district court's dismissal of a putative class action alleging that the RadioShack board of directors and plan administrative committee breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiffs alleged that defendants violated ERISA by allowing plan participants to invest in RadioShack stock despite the company's descent into bankruptcy. The court held that the complaint did not plausibly state any fiduciary claims with respect to the Plan and that plaintiffs did not have standing to bring claims regarding the Puerto Rico Plan. View "Singh v. RadioShack Corp." on Justia Law

The Fifth Circuit affirmed the district court's dismissal of a putative class action alleging that the RadioShack board of directors and plan administrative committee breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiffs alleged that defendants violated ERISA by allowing plan participants to invest in RadioShack stock despite the company's descent into bankruptcy. The court held that the complaint did not plausibly state any fiduciary claims with respect to the Plan and that plaintiffs did not have standing to bring claims regarding the Puerto Rico Plan. View "Singh v. RadioShack Corp." on Justia Law

Plaintiff-appellant Elizabeth Cates was a former patient of defendant-appellee Integris Health, Inc.’s medical facility and claimed defendant wrongfully billed her, and others like her, for services. She filed this action in state court, alleging state-law claims for breach of contract, violation of the Oklahoma Consumer Protection Act, and deceit. Defendant successfully moved to dismiss these claims on the ground that they were expressly preempted by the federal Employee Retirement Income Security Act. On appeal, the Oklahoma Supreme Court reversed and held that plaintiff’s claims were not preempted. The case was returned to the trial court for further proceedings. View "Cates v. Integris Health, Inc." on Justia Law

St. Peter’s, a non-profit healthcare entity, runs a hospital, employing over 2,800 people, with ties to a New Jersey Roman Catholic Diocese. The Bishop appoints most Board of Governors members and retains veto authority over Board actions. The hospital has daily Mass and Catholic devotional pictures throughout the building. In 1974, St. Peter’s established a non-contributory defined benefit retirement plan; operated the plan subject to the Employee Retirement Income Security Act (ERISA); and represented that it was complying with ERISA. In 2006 St. Peter’s sought a church plan exemption from ERISA, 26 U.S.C. 414(e); 29 U.S.C. 1002(33), continuing to pay ERISA-mandated insurance premiums while the application was pending. In 2013, Kaplan, who worked for St. Peter’s until 1999, filed a putative class action alleging that St. Peter’s did not provide ERISA-compliant summary plan descriptions or pension benefits statements, and that, as of 2011, the plan was underfunded by $70 million. While the lawsuit was pending, St. Peter’s received an IRS private letter ruling. affirming the plan’s status as an exempt church plan. The Third Circuit initially affirmed the denial of a motion to dismiss, concluding that St. Peter’s was not a church. The court reversed, following a June 5, 2017, order by the Supreme Court of the United States. View "Kaplan v. Saint Peter's Healthcare System" on Justia Law

Anka has a history of serious mental illness, including paranoid delusions, and has received mental health treatment. Anka killed her husband, Zeljko. The couple's child, M., was 13. The trial judge determined that the state established each element of first-degree murder beyond a reasonable doubt but that Anka established by clear and convincing evidence that she was insane at the time of the offense and found Anka not guilty by reason of insanity. Zeljko had worked as a union laborer and earned a vested pension; when a married participant dies before the benefit commences, the participant’s spouse receives a monthly annuity payable for the spouse’s life. Where the deceased does not have a surviving spouse, the individual’s minor child receives a monthly benefit until the child reaches age 21. After Zeljko’s death, both Anka and M. sought to recover Zeljko’s pension benefits. Neither the Fund’s documents nor the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001–1461, address whether a claimant who killed the participant can receive a benefit. The Illinois Probate Act’s “slayer statute,” provides that “[a] person who intentionally and unjustifiably causes the death of another shall not receive any property ... by reason of the death,” 755 ILCS 5/2‐6. The district court granted M.M. judgment on the pleadings. The Seventh Circuit affirmed. ERISA does not preempt the Illinois slayer statute, which bars even those found not guilty by reason of insanity from recovering from the deceased. View "Miscevic v. Estate of M.M." on Justia Law