Justia ERISA Opinion Summaries

Before accepting a transfer to a Bridgestone facility in North Carolina, Deschamps expressed concern about losing pension credit for his 10 years of employment with Bridgestone in Canada. After receiving assurances from Bridgestone’s management team that he would keep his pension credit, Deschamps accepted the position. For several years, Deschamps received written materials confirming that his date of service for pension purposes would be August 1983. He turned down employment with a competitor at a higher salary because of the purportedly higher pension benefits he would receive at Bridgestone. In 2010, Deschamps discovered that Bridgestone had changed his service date to August 1993, the date he began working at the American plant. After failed attempts to appeal this change through Bridgestone’s internal procedures, Deschamps filed suit, alleging equitable estoppel, breach of fiduciary duty, and an anti-cutback violation of ERISA, 29 U.S.C. 1054(g). The Sixth Circuit affirmed summary judgment for Deschamps on all three claims. The text of the plan “is at worst ambiguous, but at best, favors Deschamps’s argument that he was a covered employee in 1983” and, as a result of the change in the interpretation of this provision that excluded foreign employees from being classified as covered employees, Deschamps’s benefits were decreased. View "Deschamps v. Bridgestone Americas, Inc." on Justia Law

After the BP Stock Fund lost significant value, the affected investors filed suit alleging that the plan fiduciaries breached their duties of prudence and loyalty by allowing the Plans to acquire and hold overvalued BP stock; breached their duty to provide adequate investment information to plan participants; and breached their duty to monitor those responsible for managing the BP Stock Fund. The district court held that the stockholders had failed to overcome the Moench v. Robertson presumption and dismissed their claims. The stockholders appealed, and while their appeal was pending in this court, the Supreme Court issued Fifth Third Bancorp v. Dudenhoeffer, holding that there was no such “presumption of prudence” under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. On remand, the district court held that the stockholders had plausibly alleged that defendants had inside information; and the stockholders had plausibly alleged two alternative actions that defendants could have taken that met the Fifth Third standard: freezing, limiting, or restricting company stock purchases; and disclosing unfavorable information to the public. The district court granted the motion to amend with respect to pleading these alternative actions. It then certified defendants’ motion for interlocutory appeal. The court concluded, however, that the district court here erred when it altered the language of Fifth Third to reach its holding. Under the Supreme Court’s formulation, the plaintiff bears the significant burden of proposing an alternative course of action so clearly beneficial that a prudent fiduciary could not conclude that it would be more likely to harm the fund than to help it. In this case, the stockholders have failed to do so. Because the stockholders' amended complaint is insufficient and the district court erred in granting their motion to amend, the court reversed and remanded. View "Whitley v. BP, P.L.C." on Justia Law

This case concerns employee benefits plans sponsored by AIG or its affiliates under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. At issue is whether the Plans are "affiliates" of AIG for the purposes of a class action settlement agreement. The district court held that appellants are "affiliates" of AIG and thus ineligible for their own portion of a class settlement agreement with AIG. The court held that appellants have standing to appeal the district court's denial of the motion to direct and dismissed appellants' appeal as to the denial of their motion to intervene as moot. On the merits, the court held that because ERISA imposes important statutory limits on an employer’s control over the management and policies of an employee benefit plan, those plans do not fall within the ordinary meaning of "affiliate." Therefore, the court concluded that appellants are entitled to their own portion of the settlement and appellees will have a somewhat smaller portion. The court vacated the denial of the Plans' motion to direct. View "In re AIG Securities Litig." on Justia Law

Plaintiffs are trust funds and employee benefit plans for construction industry employees. MRS constructs commercial buildings. In 1997, MRS signed “me-too agreements” binding it to collective bargaining agreements (CBAs) bestowing rights on Plaintiffs. Under the agreement, MRS agreed to be bound by the 1997-2001 CBA in force between a multiemployer association and the union. According to Plaintiffs, MRS also agreed to be bound by later CBAs because the 1997 agreement contains an “evergreen clause” and MRS never gave the notice required to terminate the clause. MRS conceded that it never gave notice, but denied that the letter continuously granted bargaining rights. Under each CBA, employers had to make specified contributions to various Plaintiff funds and permit audits of records relevant to those obligations. Plaintiffs sent MRS requests for audits, believing that MRS had failed to make contributions required by the 2012-2015 CBA. When MRS did not comply, Plaintiffs sought post-audit relief under 29 U.S.C. 1145 for unpaid ERISA contributions and injunctive relief compelling MRS to comply with the 2012-2015 and subsequent CBAs. The Third Circuit reversed dismissal, rejecting an argument that all me-too agreements must satisfy two criteria in order to bind non-signatories to future CBAs. Absent that requirement, the plausibility of the complaint should be assessed under contract law principles and states a plausible claim for relief. View "Carpenters Health & Welfare Fund v. Mgmt. Res. Sys., Inc." on Justia Law

Brian O’Shea worked for UPS for thirty-seven years. As an employee of UPS, O’Shea participated in the UPS Retirement Plan. O’Shea became eligible for retirement in 2009 and decided to retire at the end of that year. In 2008, O’Shea was diagnosed with cancer. One week before his official retirement date but after his final day of work, O’Shea died. UPS Retirement Plan Administrative Committee informed O’Shea’s beneficiaries that, under the circumstances, they were deprived of ten years of payments under the annuity plan. O’Shea’s beneficiaries filed suit in district court seeking recovery of the ten years of annuity payments allegedly guaranteed under the UPS Retirement Plan. The district court granted summary judgment in favor of UPS. The First Circuit affirmed, holding (1) the district court did not err in concluding that UPS’s interpretation of the plan was not arbitrary or capricious; and (2) the district court did not err in dismissing the beneficiaries’ claim for equitable relief. View "O'Shea v. UPS Retirement Plan" on Justia Law

To stimulate economic development, Jersey City, New Jersey offers tax exemptions and abatements to private developers of projects in certain designated areas. Those tax benefits are conditioned on the developers’ entry into agreements with labor unions that bind the developers to specified labor practices. Employers and a trade group challenged that law, alleging that it is preempted by the National Labor Relations Act (NLRA) and Employee Retirement Income Security Act (ERISA) and barred by the dormant Commerce Clause of the U.S. Constitution. The district court dismissed the complaint, concluding that Jersey City acts as a market participant, not a regulator, when it enforces the law, so that NLRA, ERISA, and dormant Commerce Clause claims were not cognizable. The Third Circuit reversed, holding that Jersey City was acting as a regulator in this context. The city lacks a proprietary interest in Tax Abated Projects. The Supreme Court has recognized a government’s proprietary interest in a project when it “owns and manages property” subject to the project or it hires, pays, and directs contractors to complete the project; when it provides funding for the project; or when it purchases or sells goods or services. This case fits none of these categories. View "Assoc. Builders & Contractors, Inc. v. City of Jersey City" on Justia Law

Okuno was working as an art director with a clothing company when she developed symptoms including vertigo, extreme headaches, memory loss, and abdominal pain. Though she had previously been diagnosed with fibromyalgia and degenerative disc disease, Okuno contends that these maladies had been “stable and well-controlled” for years and did not prevent her from working. After visits to multiple specialists, numerous tests, and two visits to the emergency room, Okuno was eventually diagnosed with narcolepsy, Crohn’s disease, and Sjogren’s syndrome, an autoimmune disease. After diagnosis, she struggled with negative drug interactions and the side effects associated with her many treatments. Unable to continue working, Okuno went on short-term disability and applied for benefits under her employer’s long-term disability plan, issued and administrated by Reliance. Reliance denied the application on the basis that depression and anxiety contributed to Okuno’s disabling conditions. After exhausting her administrative appeals, Okuno brought a claim under the Employee Retirement Income Security Act (ERISA). 29 U.S.C. 1132(a)(1)(B). The district court found in favor of Reliance on cross-motions for judgment on the administrative record. The Sixth Circuit reversed, reasoning that her physical ailments, including Crohn’s disease, narcolepsy, and Sjogren’s syndrome, are disabling when considered apart from any mental component. View "Okuno v. Reliance Standard Life Ins. Co." on Justia Law

Plaintiff filed suit against his former employer, RSA, alleging retaliatory discharge claims under both state law and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. A jury awarded him lump-sum damages on his state law claims, and the district court then entered judgment in his favor on his ERISA claim. Even though, at plaintiff's request, the jury had been instructed to include front pay in its damages award, the district court granted plaintiff additional equitable remedies consisting of reinstatement as well as front pay until reinstatement occurred. RSA appeals these equitable remedies. Given the way in which the jury was instructed and the evidence presented at trial, the court concluded that the jury’s verdict encompassed an implicit factual determination as to the entire amount of front pay to which plaintiff was entitled on account of his retaliatory discharge. Therefore, the court held that the district court’s grant of an additional front pay remedy for the same harm disregarded that determination in violation of the Seventh Amendment right to a jury trial. The court also held that, although the reinstatement remedy does not necessarily conflict with factual findings implicit in the jury’s verdict, it is nevertheless improper because plaintiff waived that relief when he elected to seek the duplicative front pay remedy from the jury. Accordingly, the court reversed the equitable awards. View "Teutscher v. Woodson" on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., against the Plan and MetLife, claiming that MetLife, the claim administrator and insurer of the Plan, improperly denied his claim for long-term disability (LTD) benefits. The district court granted defendants' cross-motion for summary judgment. The court concluded that the abuse-of-discretion review should be tempered with some skepticism because plaintiff has offered evidence of a conflict of interest where the independent physician consultants (IPCs) have earned a substantial amount of money from MetLife and have performed a substantial number of reviews for the company as well. The court further concluded that, taking into account the totality of the circumstances, MetLife abused its discretion in denying plaintiff's claim. In this case, the evidence included the financial conflict of interest of the IPCs on whom MetLife relied; the substantial evidence of plaintiff's mental limitations due to pain medication and physical limitations; and the IPCs’ reviews of plaintiff's condition, without having examined him and without explaining why they rejected his credibility, particularly in regard to evidence corroborating his credibility (both medical and nonmedical). Accordingly, the court reversed and remanded with instructions to the district court to remand this case to MetLife so that it may re-evaluate the merits of plaintiff's LTD claim. View "Demer v. IBM Corp." on Justia Law

Medicare Part C, 42 U.S.C. 1395w-21 et seq., permits enrollees to obtain Medicare-covered healthcare services from private healthcare organizations and their third-party contractors. The Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., regulates health plans offered by private employers to employees. At issue is whether continued inpatient treatment by Providers was medically necessary, and therefore compensable, for several MA Plan Members and ERISA Plan Members initially hospitalized for mental health evaluations or treatment. The court held that the administrative appeals process provided under the Medicare Act preempts arbitration of Medicare-related coverage disputes between private healthcare administrators and providers, even though arbitration would otherwise be required by the parties’ contracts and the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. In this case, Providers’ coverage claims are inextricably intertwined with claims for Medicare benefits, and they therefore are subject to the Medicare Act. The Act provides mandatory administrative review procedures for these disputes, which preempt arbitration. The court concluded, however, that the court of appeals erred by deciding that whether Aurora’s ERISA-related claims are arbitrable depends on whether Aurora has standing to assert this claim. The court of appeals should decide on remand whether this claim is arbitrable without considering the standing issue or whether any valid defenses to the claim exist. Therefore, the court remanded to the court of appeals to decide whether ERISA similarly preempts arbitration of ERISA-related coverage disputes. View "United Behavioral Health v. Maricopa Integrated Health Sys." on Justia Law