Justia ERISA Opinion Summaries

GreatBanc, the fiduciary for Personal-Touch home-health-care employee stock ownership plan, facilitated a transaction in which the Plan purchased shares in the company from the company’s owners with a loan from the company itself. It is not clear whether GreatBanc obtained independent advice or a valuation. GreatBanc had been appointed as trustee by the owners. The value of the shares fell until they were worth much less than the Plan paid, leaving the Plan with no valuable assets and heavily indebted to the company’s principal shareholders. The Plan’s participants were liable for interest payments on the loan. Employees filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132. The district court dismissed. The Seventh Circuit reversed. The plaintiffs plausibly alleged both a prohibited transaction and a breach of fiduciary duty. View "Allen v. Greatbanc Trust Co." on Justia Law

Plaintiff filed suit against the Plan to recover payment for health care services provided to Plan policyholders. The trial court dismissed plaintiff's suit because the state law causes of action were preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court concluded that, notwithstanding procedural irregularies, plaintiff's due process rights were not violated where any error by the trial court was harmless; plaintiff's claims for breach of contract, quantum meruit, and promissory estoppel are not preempted by ERISA where these quasi-contract and contract causes of action do not address an area of exclusive federal concern; and plaintiff's claim for interference with contractual relations is preempted where this cause of action addresses an area of exclusive federal concern. View "Morris B. Silver M.D., Inc. v. Int'l Longshore & Warehouse Union" on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., seeking benefits for continued partial hospital treatment for her anorexia, which were denied on the ground that the level of care she sought was not medically necessary. On appeal, plaintiff challenged the district court's grant of summary judgment for Oxford. After careful consideration of the parties’ briefs, the record in the case, and with the benefit of oral argument presented to the court, the court concluded that the district court correctly decided that the record of the external review is properly before the district court in this ERISA case. However, the court concluded that the district court erred in holding that the adverse external review decision barred plaintiff from presenting her challenge to the adverse medical necessity determination. Because the external review process does not conflict with ERISA, it is not preempted. Accordingly, the court affirmed in part, reversed in part and remanded for further proceedings. View "Alexandra H. v. Oxford Health Ins." on Justia Law

Rabinak worked full‐time as a business representative for the Chicago Regional Council of Carpenters and, incidental to that position, served on the Council’s Executive Board. He received quarterly payments of $2,500 for his service on the Board, paid by checks separate from those for Rabinak’s weekly salary. When he retired, Rabinak qualified for a pension from the United Brotherhood of Carpenters Pension Fund, governed by ERISA. The compensation amount upon which the Fund calculated his annual retirement benefit did not include the $10,000 he had received each year from the Council. The Fund’s appeals committee denied an appeal. The Seventh Circuit affirmed. The plan’s definition of compensation includes only “salary,” and the $2,500 quarterly payments for Board service were paid separately from Rabinak’s weekly salary payments and coded differently as well. The conclusion that the payments at issue were not salary payments under his particular plan was not arbitrary and capricious. View "Rabinak v. United Bhd. of Carpenters Pension Fund" on Justia Law

In 1991 Cheney began working as an attorney at Kirkland. She became a partner in 1997. She suffered from a spinal disease that led her to seek ergonomic accommodations in 1994 and ultimately resulted in a three‐level anterior cervical discectomy and fusion and removal of her C5 vertebra. After making various accommodations, the firm approved a leave, from January 3, until July of 2012. Her last day of work was December 19, 2011. On April 17, 2012, Cheney's neurosurgeon advised her to complete a 12‐week intensive physical therapy program and receive cervical epidural injection therapy. After the program failed to improve Cheney’s condition, the neurosurgeon recommended cervical spinal fusion surgery, which Cheney received on August 27. Cheney submitted her claim for long‐term disability benefits on July 17, before the surgery. Kirkland’s insurer denied her claim, stating that her coverage had ended in March because she was able, through March, to perform her job. Cheney sued under the Employee Retirement Income Security Act, 29 U.S.C. 1132. The court found in favor of Cheney. The Seventh Circuit vacated, finding that the district court made unsupported factual findings and misinterpreted the governing documents relating to whether Cheney’s situation fell within allowable absences from “active work.” View "Cheney v. Standard Ins. Co." on Justia Law

Plaintiff filed a putative class action against her former employer, Dignity Health, alleging that the company has not maintained its pension plan in compliance with the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. Although Dignity Health concedes it has not complied with ERISA, it contends that the plan qualifies for ERISA’s church-plan exemption. The district court awarded partial summary judgment to plaintiff, ruling that Dignity Health’s pension plan must comply with ERISA. The court agreed with its sister circuits and held that a church plan must be established by a church or by a convention or association of churches, and maintained either by a church or by a principal-purpose organization. Accordingly, the court affirmed the judgment and remanded for further proceedings. View "Rollins v. Dignity Health" on Justia Law

After plaintiff's long term disability benefits were terminated, plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(c)(1), against his former employer, ING, seeking statutory penalties against ING for failing to timely produce documents he had requested. The district court granted summary judgment to plaintiff and imposed a penalty of $27,475. The court affirmed the district court's decision to impose a penalty on ING North America for its failure to timely produce the Plan Document; the court reversed the district court’s decision to impose a penalty based on ING North America’s failure to timely produce the emails at issue; the court joined its sister circuits and held that penalties under 29 U.S.C. 1132(c)(1) can only be assessed against “plan administrators” for failing to produce documents that they are required to produce as plan administrators; and 29 C.F.R. 2560.503-1(h)(2)(iii) does not impose any requirements on plan administrators, and so cannot form the basis for a penalty under 29 U.S.C. 1132(c)(1). Accordingly, the court vacated the penalty award and remanded to the district court to assess a penalty based solely on the failure to timely produce the Plan Document. View "Lee v. ING Groep" on Justia Law

Trachte, a Wisconsin manufacturer, established an employee stock ownership plan (ESOP) in the mid-1980s. In the late 1990s, Fenkell and his company, Alliance, began buying ESOP-owned, closely-held companies with limited marketability. Typically, Fenkell would merge the acquired company's ESOP into Alliance’s ESOP, hold the company for a few years with its management in place, and then spin it off at a profit. Alliance acquired Trachte in 2002 for $24 million and folded its ESOP into Alliance’s ESOP. Trachte’s profits, however, were flat and its growth stalled, so Fenkell arranged a complicated leveraged buyout involving creation of a new Trachte ESOP managed by trustees beholden to Fenkell. The accounts in the Alliance ESOP were spun off to the new Trachte ESOP, which used the employees’ accounts as collateral to purchase Trachte’s equity back from Alliance, Trachte and its new ESOP paid $45 million for Trachte’s stock and incurred $36 million in debt. The purchase price was inflated; the debt load was unsustainable. By the end of 2008, Trachte’s stock was worthless. The employee participants in the new ESOP sued Alliance, Fenkell, and trustees, alleging breach of fiduciary duty in violation of the Employee Retirement Income Security Act. The district court found the defendants liable, crafted a remedial order to make the class whole, awarded attorney’s fees, and approved settlements among some of the parties. Fenkell conceded liability. The Seventh Circuit​ affirmed the order requiring him to indemnify his cofiduciaries. View "Chesemore v. Fenkell" on Justia Law

Plaintiffs, retirement-plan participants and one plan administrator, filed a putative class action on behalf of the plans themselves, contending that the plans were being cheated of certain plan assets. Specifically, Plaintiffs alleged that Defendants, various Fidelity entities that had trust agreements with the plans, were dealing with plan assets in breach of fiduciary duties imposed by the Employee Retirement Income Security Act. The district court dismissed the complaint for failure to state a claim. The First Circuit affirmed, holding that the district court did not err in its judgment. View "Kelley v. Fidelity Mgmt. Trust Co." on Justia Law

The issue this case presented for the Tenth Circuit's review involved claims under the Employee Retirement Income Security Act of 1974 (ERISA). Trent Lebahn and his wife claimed that a pension-plan consultant breached a fiduciary duty by misstating the amount of the monthly pension payments that Mr. Lebahn would receive if he were to retire. The Tenth Circuit found that under ERISA, the plan consultant could be considered a fiduciary only if she exercised discretionary authority over the plan’s administration. The Tenth Circuit addressed whether a consultant exercises discretionary authority in administering the plan simply by making a calculation of benefits at the request of a plan participant Finding that a consultant does not exercise discretionary authority under these circumstances, the Tenth Circuit affirmed judgment in favor of the pension plan and its consultant. View "Lebahn v. National Farmers Union" on Justia Law