Justia ERISA Opinion Summaries

This case involved the interpretation of two provisions of the Multiemployer Pension Plan Amendments Act (“MPPAA”), part of the Employee Retirement Income Security Act of 1974 (“ERISA”). The appellants, M&K Employee Solutions, LLC and Ohio Magnetics, Inc., were employers that had withdrawn from the IAM National Pension Fund, a multiemployer pension plan (“MPP”). The issues before the United States Court of Appeals for the District of Columbia Circuit were: (1) whether the Fund’s actuary could set actuarial assumptions for calculating the employers' withdrawal liability after the measurement date based on information available as of the measurement date; and (2) for M&K, whether it was entitled to the "free-look" exception which allows an employer to withdraw from a plan within a specified period after joining without incurring withdrawal liability.On the first issue, the court affirmed the district court's rulings that the actuary could set actuarial assumptions after the measurement date, as long as the assumptions were based on the information available as of that date. The court held that this interpretation aligned with the best estimate of the plan’s anticipated experience as of the measurement date and was consistent with the policy of the MPPAA to protect multiemployer pension plans and their beneficiaries.On the second issue, the court held that M&K was entitled to the free-look exception. The court found that M&K had partially withdrawn from the Fund during the 2017 plan year, had an obligation of fewer than five years at the time of its partial withdrawal, and therefore met the requirements of the free-look exception. View "Trustees of the IAM National Pension Fund v. Ohio Magnetics, Inc." on Justia Law

In this case, the United States Court of Appeals for the Ninth Circuit reversed the district court's dismissal of an ERISA action brought by South Coast Specialty Surgery Center, Inc. against Blue Cross of California, d/b/a Anthem Blue Cross.South Coast, a healthcare provider, sought reimbursement from Blue Cross for the costs of medical services provided to its patients. South Coast argued that although it was not a plan participant or a beneficiary under ERISA, it had the right to enforce ERISA's protections directly because its patients had assigned it the right to sue for the non-payment of plan benefits via an "Assignment of Benefits" form. The district court disagreed and dismissed South Coast's suit, concluding that the form only conveyed the right to receive direct payment from Anthem, and not the right to sue for non-payment of plan benefits.The Ninth Circuit held that a healthcare provider can enforce ERISA's protections if it has received a valid assignment of rights. The court determined that South Coast's patients had effectuated a valid assignment through the "Assignment of Benefits" form. Therefore, South Coast had the right to seek payment of benefits and to sue for non-payment. The court reversed the lower court's decision and remanded the case for further proceedings. View "SOUTH COAST SPECIALTY SURGERY CENTER, INC. V. BLUE CROSS OF CALIFORNIA" on Justia Law

A married couple who owned a small dental practice, D.L. Markham DDS, MSD, Inc., established an employee pension benefit plan for their business. They hired Variable Annuity Life Insurance Company (VALIC) to maintain the plan. Dissatisfied with VALIC's services, they decided to terminate their contract and were informed by VALIC that they would be charged a 5% surrender fee on all of the plan’s assets. The couple sued, alleging VALIC violated the Employee Retirement Income Security Act of 1974 (ERISA) by breaching its fiduciary duties and engaging in a prohibited transaction. The United States Court of Appeals for the Fifth Circuit affirmed the district court's dismissal of their claims. The court held that VALIC did not act as a fiduciary when it collected the surrender fee, as it simply adhered to the contract by collecting the previously agreed-upon compensation. The court also found that VALIC was not a "party in interest" when it entered the contract, as it had not yet begun providing services to the plan. Finally, the court held that VALIC's collection of the surrender fee did not constitute a separate transaction under ERISA, as it was a payment in accordance with an existing agreement. The court also affirmed the district court’s denial of the plaintiffs’ request to amend their complaint due to undue delay and insufficient detail of their new allegations. View "Markham v. Variable Annuity Life" on Justia Law

In a case involving the Employee Retirement Income Security Act of 1974 (ERISA), a plan participant, Ian C., sought coverage for his son, A.C., to receive treatment at Catalyst Residential Treatment for mental health and substance abuse issues. UnitedHealthcare Insurance Company (United), the claims fiduciary for the plan, initially covered the treatment but subsequently denied coverage. Ian C. appealed this denial internally, a process in which United upheld its original decision. Ian C. then took his case to federal district court, alleging that United's denial violated his right to a "full and fair review" of his claim under ERISA. The district court ruled in favor of United.On appeal to the United States Court of Appeals for the Tenth Circuit, the court held that United's denial of benefits was arbitrary and capricious, violating ERISA regulations guaranteeing a "full and fair review" of claims. In particular, the court found that United had failed to consider A.C.'s substance abuse as an independent ground for coverage in their decision to deny benefits, in violation of their fiduciary duties under ERISA. The court therefore reversed the district court's decision. View "C., et al. v. United Healthcare Insurance Company" on Justia Law

Plaintiff-Appellant E.W. was a participant in an employer-sponsored health insurance plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). E.W.’s daughter, Plaintiff-Appellant I.W., was a beneficiary of E.W.’s plan. From September 2016 through December 2017, I.W. received treatment in connection with mental health challenges and an eating disorder at Uinta Academy (“Uinta”), an adolescent residential treatment center in Utah. In January 2017, Defendants-Appellees Health Net Insurance Company and Health Net of Arizona, Inc. began covering I.W.’s treatment under E.W.’s ERISA plan (the “Plan”). Effective February 23, 2017, Health Net determined I.W.’s care at Uinta was no longer medically necessary, and it denied coverage from that day forward. In assessing whether to discontinue coverage, Health Net applied the McKesson InterQual Behavioral Health 2016.3 Child and Adolescent Psychiatry Criteria. Health Net determined I.W. did not satisfy the InterQual Criteria within the relevant period and notified Plaintiffs in a letter dated March 1, 2017. Plaintiffs allegedly did not receive Health Net’s March 2017 denial letter, and I.W. remained at Uinta until December 2017, when she was formally discharged. After receiving notice in May 2018 that Health Net had denied coverage effective February 23, 2017, Plaintiffs appealed the decision. Health Net again determined I.W. did not satisfy the InterQual Criteria during the relevant period and upheld its initial denial. Plaintiffs then appealed to an external reviewer, which upheld the decision to deny coverage. Health Net moved to dismiss plaintiffs' legal claims under ERISA and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”). The district court denied Plaintiffs’ motion and granted summary judgment to Health Net. After review, the Tenth Circuit affirmed the district court’s decision granting summary judgment to Health Net on Plaintiffs’ ERISA claim; the Court reversed the finding Plaintiffs failed to state a claim under MHPAEA; and the case was remanded for further proceedings. View "W., et al. v. Health Net Life Insurance Company, et al." on Justia Law

Plaintiff class participates in “403(b)” retirement plans administered by Cornell University (“Cornell”). Plaintiffs brought this suit against Cornell and its appointed fiduciaries alleging a number of breaches of their fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”). Plaintiffs appealed from entry of judgment in Defendants’ favor on all but one claim, which was settled by the parties. On appeal, Plaintiffs challenged: (1) the dismissal of their claim that Cornell entered into a “prohibited transaction” by paying the plans’ recordkeepers unreasonable compensation, (2) the “parsing” of a single count alleging a breach of fiduciary duty into separate sub-claims at the motion to dismiss stage, (3) the award of summary judgment against Plaintiffs for failure to show loss on their claim that Defendants breached their duty of prudence by failing to monitor and control recordkeeping costs, and (4) the award of summary judgment to Defendants on Plaintiffs’ claims that Cornell breached its duty of prudence by failing to remove underperforming investment options and by offering higher-cost retail share classes of mutual funds, rather than lower-cost institutional shares.   The Second Circuit affirmed. The court concluded that the district court correctly dismissed Plaintiffs’ prohibited transactions claim and certain duty-of-prudence allegations for failure to state a claim and did not err in granting partial summary judgment to Defendants on the remaining duty-of-prudence claims. In so doing, the court held as a matter of first impression that to state a claim for a prohibited transaction pursuant to 29 U.S.C. Section 1106(a)(1)(C), it is not enough to allege that a fiduciary caused the plan to compensate a service provider for its services. View "Cunningham v. Cornell University" on Justia Law

Subscribers who bought health insurance filed a class action against Blue Cross, alleging that it violated the Sherman Antitrust Act by restricting the member plans’ ability to compete. At issue is whether the district court abused its discretion in approving a settlement agreement for a multi-district antitrust class action against the Blue Cross Blue Shield Association and its member plans.   The Eleventh Circuit affirmed. The court explained that the self-funded claimants were represented by their own counsel and class representatives in the settlement negotiations and received some compensation from the settlement. Although the settlement agreement’s allocation is facially unequal, it is not facially unfair. Further, the court held that the record supports the conclusion that the self-funded claimants and the fully insured claimants had at least potentially adverse interests. The district court did not abuse its discretion in dividing them into subclasses. Moreover, the court found that the district court also correctly applied the percentage-ofthe-fund doctrine. View "In Re: Blue Cross Blue Shield Antitrust Litigation" on Justia Law

This ERISA case concerns the National Football League’s retirement plan, which provides disability pay to hobbled NFL veterans whose playing days are over but who are still living with debilitating, often degenerative injuries to brains and bodies, including neurotrauma. The claimant, former NFL running back Michael Cloud, suffered multiple concussions during his eight-year career, leaving him physically, neurologically, and psychologically debilitated. After the Social Security Administration found him entitled to disability benefits, Cloud went back to the NFL Plan and sought reclassification to a higher tier of benefits. Cloud was awarded a higher tier but not the highest tier. Cloud again filed a claim to be reclassified at the most generous level of disability pay. The NFL Plan denied reclassification on several grounds. Cloud sued the NFL Plan. The district court ordered a near doubling of Cloud’s annual disability benefits. The district court awarded top-level benefits under the Plan instead of remanding for another round at the administrative.   The Fifth Circuit reversed and remanded. The court wrote that it is compelled to hold that the district court erred in awarding top-level benefits to Cloud. Although the NFL Plan’s review board may well have denied Cloud a full and fair review, and although Cloud is probably entitled to the highest level of disability pay, he is not entitled to reclassification to that top tier because he cannot show changed circumstances between his 2014 claim for reclassification and his 2016 claim for reclassification—which was denied and which he did not appeal. View "Cloud v. NFL Player Retirement Plan" on Justia Law

The First Circuit affirmed the decision of the district court entering summary judgment for Sheet Metal Workers' National Pension Fund (Fund) in this suit brought by David Field for plan benefits pursuant to ERISA section 502(a)(1)(B), 29 U.S.C. 1132(a)(1)(B), holding that Field was not entitled to relief on his allegations of error.Field brought suit for plan benefits arguing that the Fund wrongfully terminated his previously granted disability benefit payments based on findings made by the Appeals Committee of the Board of Trustees of the Fund that Field had engaged in disqualifying employment and had not completed sufficient hours of covered employment to become eligible for the benefit. The district court granted summary judgment for the Fund, concluding that the Appeals Committee did not abuse its discretion and was not arbitrary or capricious in terminating Field's disability benefit payments. The First Circuit affirmed, holding that the Committee acted reasonably and with support by substantial evidence on the record as a whole. View "Field v. Sheet Metal Workers' Nat'l Pension Fund" on Justia Law

The Employee Retirement Income Security Act’s Section 502(a)(1)(B) allows a beneficiary to “recover benefits due to him under the terms of his plan.” And ERISA’s Section 502(a)(3) allows a beneficiary to sue for “other appropriate equitable relief.” This case requires us to answer when—and under what conditions—a plaintiff may seek monetary relief under one of those provisions. Plaintiff’s son had a rare heart condition. He died at the age of twenty-seven, awaiting a heart transplant, which Plaintiff says that Defendants—who administered her son’s employer-based health benefits program—wrongfully denied. So she sued on behalf of his estate, seeking monetary relief under both Section 502(a)(1)(B) and 502(a)(3). The district court dismissed both claims. As to Plaintiff’s (a)(1)(B) claim, the court held that money was not one of the “benefits” that her son was owed “under the terms of his plan.” And, as to her (a)(3) claim, the court held that her requested monetary relief was too similar to money damages and was thus not “equitable.”   The Fourth Circuit affirmed in part and vacated in part. The court explained that the district court correctly held that money was not one of the “benefits” that Plaintiff’s son was “due” “under the terms of his plan.” So it was right to dismiss her (a)(1)(B) claim. However, the court explained that it must vacate its complete dismissal of Plaintiff’s (a)(3) claim. While the district court correctly noted that compensatory, “make-whole” monetary relief is unavailable under Section 502(a)(3), it did not consider whether Plaintiff plausibly alleged facts that would support relief “typically” available in equity. View "Jody Rose v. PSA Airlines, Inc." on Justia Law