Justia ERISA Opinion Summaries

Berkelhammer and Ruiz participated in the ADP TotalSource Retirement Savings Plan, an investment portfolio managed by NFP. They filed suit under section 502(a)(2) of the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132, for their own losses and derivatively on behalf of the Plan. The Plan’s contract with NFP contained an agreement to arbitrate disputes between the two entities. Berkelhammer and Ruiz argued that since they did not personally agree to arbitrate, the arbitration provision did not reach their claims. The district court disagreed, holding that Berkelhammer and Ruiz stand in the Plan’s contractual shoes and must accept the terms of the Plan’s contract.The Third Circuit affirmed. Civil actions under section 502(a)(2) “for breach of fiduciary duty [are] brought in a representative capacity on behalf of the plan as a whole” to “protect contractually defined benefits.” Because the plaintiffs’ claims belong to the Plan, the Plan’s consent to arbitrate controls. The presence or absence of the individual claimants’ consent to arbitration is irrelevant. View "Berkelhammer v. ADP TotalSource Group Inc." on Justia Law

Eligibility for disability payments from the Fund turns on how many credits an ironworker has accumulated (a credit is equal to 1,000 hours of work on union jobs in a given year); those with more than five but fewer than 15 credits are entitled to disability benefits if “totally and permanently disabled as the result of an accident sustained while on the job and employed by a Contributing Employer.” Lane, with nine credits as a union ironworker, applied for disability benefits. Lane was approved for Social Security Disability Insurance. The Fund’s Administrator requested information to connect Lane’s disability to an on-the-job injury. Lane explained that he suffered on-the-job injuries to his shoulder and knee and sent medical records, none of which connected his disability to the cited May 2014 accident. Lane admitted that his SSA award was determined by a combination of factors, not just the 2014 accident. A letter from Lane’s physician referred to several work-related injuries without identifying the work-related events or whether those injuries were the sole basis for the SSA’s disability award.After review by the Medical Review Institute of America concluded that the records did not establish that the SSA disability related to the 2014 accident, the Fund’s Trustees affirmed the denial of Lane’s Claim. The Seventh Circuit affirmed summary judgment in favor of the Fund under the Employee Retirement Income Security Act, 29 U.S.C. 1002, characterizing the denial as “not downright unreasonable.” View "Lane v. Structural Iron Workers Local No. 1 Pension Trust Fund" on Justia Law

Henry participated in an employee stock ownership plan (ESOP) sponsored by his employer. After the ESOP purchased stock at what Henry believed was an inflated price, Henry filed a lawsuit against the plan’s trustee and executives of his employer, alleging that the defendants breached fiduciary duties to the ESOP imposed by the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and engaged in transactions prohibited by ERISA. The defendants argued that an arbitration provision, added to the ESOP’s plan documents after Henry joined the ESOP, barred Henry from pursuing his claims in federal court. The district court denied their motion to dismiss, reasoning that all parties to an arbitration agreement must manifest assent to the agreement, and Henry did not manifest his assent to the addition of an arbitration provision to the ESOP plan document.The Third Circuit affirmed, first confirming its jurisdiction. The motion to dismiss was effectively a motion to compel arbitration, 9 U.S.C. 16(a) provides appellate jurisdiction to review the denial of that motion. The class action waiver (and, by extension, the arbitration provision as a whole) is not enforceable because it requires him to waive statutory rights and remedies guaranteed by ERISA. View "Henry v. Wilmington Trust NA" on Justia Law

Plaintiff sued Zurich American Life Insurance Company of New York∗ (“Zurich”) in district court challenging Zurich’s denial of long-term disability (“LTD”) benefits under the Employment Retirement Income Security Act of 1974 (“ERISA”). The parties cross-moved for judgment on the record, and the district court awarded judgment to Zurich. Plaintiff appealed.   The Fourth Circuit affirmed. The court held that Zurich’s decision to deny benefits followed a principled reasoning process and was supported by substantial evidence. The court explained that Plaintiff insists that Zurich abused its discretion by failing to evaluate his particular job responsibilities in determining his disability status. The court explained that Plaintiff misunderstands what the Plan requires. The Plan defines “Regular Occupation” as “the occupation [the employee is] routinely performing when [his] disability begins.” And the Plan explains that Zurich “will look at [the employee’s] occupation as it is normally performed in the national economy, instead of how the work tasks are performed for a specific employer or at a specific location.” Of note, Zurich completed and considered a “Physical Requirements and Job Demand Analysis” that evaluated Plaintiff’s job responsibilities. That analysis concluded that his writer/editor position was a sedentary one that required minimal physical exertion. Under the Plan, it was Plaintiff’s burden, not Zurich’s, to provide “written proof of [his] claim for disability benefits.” Thus, Zurich did not abuse its discretion by not obtaining additional vocational evidence, as neither the Plan nor case law affirmatively requires it to have done so. View "Kevin Geiger v. Zurich American Insurance Company" on Justia Law

Plaintiff underwent bariatric surgery to lose weight. A few months later, Plaintiff began working for Zimmerman Transfer, Inc. and became a participant in its self-insured employee benefit plan. Zimmerman is the plan administrator, and Benefit Plan Administrators of Eau Claire, LLC (“BPA”) served as the third-party administrator until January 2020. After exhausting his administrative appeals, Plaintiff sued BPA and Zimmerman for benefits under Section 1132(a)(1)(B). He then moved for summary judgment against BPA and Zimmerman. Both Defendants filed cross-motions for summary judgment, which the district court granted.   The Eighth Circuit affirmed. The court explained that because Plaintiff’s plan specifically excludes coverage of treatment for complications of weight-reduction surgery, neither Iowa law nor the ACA requires that his treatment be covered. It is undisputed that Plaintiff’s treatment was due to a complication of his prior bariatric surgery. Thus, Iowa law and the ACA do not require that his treatment be covered. Further, the court wrote that imposing and enforcing coverage limitations, even if it results in a plan participant paying large medical bills, is not inconsistent with the plan’s goal because the plan must allocate limited resources among all plan participants. Accordingly, the court concluded that there was no abuse of discretion in denying Plaintiff’s claim for benefits because the interpretation of the plan was reasonable, and the decision to deny benefits was supported by substantial evidence. View "Darrin Shafer v. Zimmerman Transfer, Inc." on Justia Law

The Plan is an employee welfare benefit plan under the Employee Retirement Income Security Act (ERISA). W&S denied Laake’s claim for extended long-term disability (LTD) benefits, indicating that Plan limited LTD benefit to 24 months if the disabling condition is due to any mental, nervous, psychiatric condition or chronic pain.” The Plan refers to “chronic pain syndrome.” No medical doctor had ever diagnosed Laake with “Chronic Pain Syndrome.” Although the Plan fails to define “Chronic Pain Syndrome,” Schedule C—which lists conditions that are excluded from extended LTD benefits—explicitly incorporates the Diagnostic and Statistical Manual of Mental Disorders, which does not specifically include “Chronic Pain Syndrome,” but does detail the symptoms and features of “Pain Disorder.” W&S did not ask Laake’s physicians in its questionnaires about the Mental Illness exclusion or “Chronic Pain Syndrome.” None of her physicians indicated that there was any psychological basis for her pain.The district court determined that Laake was entitled to benefits, imposed penalties against W&S, and awarded Laake attorney’s fees and costs, 29 U.S.C. 1132(g)(1). The Sixth Circuit affirmed. In denying benefits without any explanation or supporting evidence, W&S acted arbitrarily and capriciously. Because W&S provided notice that implied one basis for its denial of benefits, but in its final decision included an entirely new basis, it failed to substantially comply with ERISA’s notice requirements. The court noted a finding that W&S engaged in particularly “egregious conduct throughout the course of this litigation.” View "Laake v. Western & Southern Financial Group Flexible Benefits Plan" on Justia Law

After gallbladder surgery, Tranbarger began suffering from multiple medical conditions, including physical pain and chronic fatigue. At work, Tranbarger continued as an accounts receivable manager, a primarily sedentary position. Her supervisor modified some of her responsibilities to accommodate her reduced capacity. Tranbarger resigned in July 2016, citing pain and fatigue.Through her employer, Tranbarger was enrolled in Lincoln's disability insurance plan. About 14 months after resigning, Tranbarger filed a claim for long-term disability benefits. Tranbarger was entitled to benefits if she could show “total disability” such that she was “unable to perform each of the [m]ain [d]uties” of an accounts receivable manager during a six-month “Elimination Period” following her resignation. Tranbarger presented a Social Security ruling in her favor, doctors’ notes, and statements from individuals otherwise familiar with her condition. Lincoln denied Tranbarger’s claim. She sued under the Employee Retirement Income Security Act (ERISA).The Sixth Circuit affirmed a judgment in favor of Lincoln. Tranbarger did not demonstrate a continuous inability to perform the main duties of an accounts receivable manager during the six months following her resignation. Although she provided diagnoses from the Mayo Clinic and established that she suffered pain and fatigue, there was little evidence about whether Tranbarger could perform her job functions. View "Tranbarger v. Lincoln Life & Annuity Co. of New York" on Justia Law

Middle schooler A.K. struggled with suicidal ideation for many years and attempted suicide numerous times, resulting in frequent emergency room visits and in-patient hospitalizations. A.K.’s physicians strongly recommended she enroll in a residential treatment facility to build the skills necessary to stabilize. Despite these recommendations and extensive evidence in the medical record, United Behavioral Health (“United”) denied coverage for A.K.’s stay at a residential treatment facility beyond an initial three month period. Her parents appealed United’s denial numerous times, requesting further clarification, and providing extensive medical evidence, yet United only replied with conclusory statements that did not address the evidence provided. As a result, A.K.’s parents brought this lawsuit contending United violated its fiduciary duties by failing to provide a “full and fair review” of their claim for medical benefits. Both sides moved for summary judgment, and the district court ruled against United. The issue this case presented for the Tenth Circuit's review was whether United arbitrarily and capriciously denied A.K. medical benefits and whether the district court abused its discretion in awarding A.K. benefits rather than remanding to United for further review. The Court ultimately concluded United did act arbitrarily and capriciously in not adequately engaging with the opinions of A.K.’s physicians and in not providing its reasoning for denials to A.K.’s parents. The Court also concluded the district court did not abuse its discretion by awarding A.K. benefits outright. View "D.K., et al. v. United Behavioral Health, et al." on Justia Law

Sherrod and Johnson were fiduciaries of a retirement plan that Sherrod had set up for herself and other employees of her medical practice. The Secretary of Labor brought this civil enforcement action alleging that both had breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. The district court granted the Secretary summary judgment and entered a permanent injunction removing the defendants as fiduciaries.The Seventh Circuit affirmed. Both defendants breached their fiduciary duties of loyalty and prudence under ERISA. Hundreds of thousands of dollars of plan assets were used for Sherrod’s personal benefit but were accounted for as plan expenses or losses rather than as distributions of retirement benefits. The permanent injunction was within the scope of reasonable responses to the breaches. Even giving Sherrod the benefit of her assertions of good faith, since the district court imposed the injunction based on a summary judgment decision, good faith is not a defense for one breach of fiduciary duty, let alone repeated breaches. Many of Sherrod’s payments to herself from plan assets from 2012-2017 were also prohibited as self-dealing. “Given the gravity and frequency of defendants’ breaches of their fiduciary duties, they are fortunate that the relief against them has thus far been relatively modest.” View "Su v. Sherrod" on Justia Law

Northrop laid off workers in 2012 and did not provide them all with severance benefits. Its Severance Plan provides that a laid-off employee regularly scheduled to work at least 20 hours a week will receive severance benefits if that employee “received a cover memo, signed by a Vice President of Human Resources.” The plaintiffs, who did not receive this “HR Memo,” filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001– 1461.The parties agreed to have a magistrate resolve the case, 28 U.S.C. 636(c). After the suit was certified as a class action, the district judge resumed control at Northrop's request, finding that the increased stakes constituted “good cause” for withdrawing the reference. The district court granted the defendants summary judgment, ruling that the Plan gives the HR Department discretion to choose who gets severance pay.The Seventh Circuit affirmed, first finding no abuse of discretion in the withdrawal of the reference order. The Plan makes the receipt of severance benefits contingent on the receipt of an HR Memo, which the class members did not get. Welfare-benefit plans under ERISA—unlike retirement plans—need not provide for vesting, and the terms of welfare-benefit plans are entirely in the control of the entities that establish them. When making design decisions, employers may act in their own interests and may include a discretionary component. Rights under ERISA are not subject to estoppel. The plan itself—not past practice—always controls. View "Carlson v. Northrop Grumman Severance Plan" on Justia Law