Justia ERISA Opinion Summaries

The case involves Appvion, Inc., a Wisconsin-based paper company, which was sold to its employees through an Employee Stock Ownership Plan (ESOP) in 2001. The company declared bankruptcy in 2017. Grant Lyon, acting on behalf of the ESOP, filed a lawsuit against various individuals and corporations, alleging that they fraudulently inflated the price of Appvion in 2001 and that the price remained inflated until Appvion’s bankruptcy. The district court dismissed almost all the claims.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the dismissal of some claims and reversed and remanded others. The court affirmed the dismissal of claims related to actions before November 26, 2012, as they were time-barred under the Employee Retirement Income Security Act (ERISA). However, the court reversed the dismissal of claims related to actions after November 26, 2012, finding that the plaintiff had adequately alleged that the defendants breached their fiduciary duties under ERISA by failing to ensure that the company's valuations were sound. The court also reversed the dismissal of claims alleging that the defendants engaged in prohibited transactions and co-fiduciary liability. The court affirmed the dismissal of state-law claims against the defendants, finding them preempted by ERISA. View "Appvion, Inc. Retirement Savings and Employee Stock Ownership Plan v. Buth" on Justia Law

The case revolves around Dycom Industries, Inc. ("Dycom") and its predecessor, Midtown Express, LLC ("Midtown"), a cable contractor that installed, serviced, and disconnected telecommunications cables for Time Warner Cable Company customers in New York City and Bergen County, New Jersey. Midtown had collective bargaining agreements with Local Union No. 3 of the International Brotherhood of Electrical Workers, which required contributions to the Pension, Hospitalization & Benefit Plan of the Electrical Industry (the "Fund"), a multiemployer pension plan under ERISA. In 2016, Midtown ceased operations and contributions to the Fund, leading the Fund to assess withdrawal liability against Midtown and its successor, Dycom, under ERISA.Midtown demanded arbitration, arguing that its employees were performing work in the building and construction industry, and thus it was exempt from withdrawal liability under ERISA. The arbitrator determined that Midtown did not qualify for the exemption, concluding that Midtown's employees did not perform work in the building and construction industry. Dycom then filed a lawsuit to vacate the arbitrator's award, and the Fund filed a cross-motion to confirm the award. The district court adopted the magistrate judge's report and recommendation, denied Dycom's motion to vacate the award, and granted the Fund's cross-motion to confirm the award.The United States Court of Appeals for the Second Circuit affirmed the district court's judgment. The court concluded that the cable installation services at issue did not involve work in the "building and construction industry" under ERISA, and thus Dycom was not exempt from withdrawal liability. The court found that the arbitrator correctly determined that the work performed by Midtown was not work within the building and construction industry under ERISA, and thus the exemption did not apply. View "Dycom Indus., Inc. v. Pension, Hosp'n & Benefit Plan of the Elec. Indus." on Justia Law

The plaintiff, Ryan S., filed a class action lawsuit against UnitedHealth Group, Inc. and its subsidiaries (collectively, “UnitedHealthcare”) under the Employee Retirement Income Security Act of 1974 (“ERISA”). He alleged that UnitedHealthcare applies a more stringent review process to benefits claims for outpatient, out-of-network mental health and substance use disorder (“MH/SUD”) treatment than to otherwise comparable medical/surgical treatment. Ryan S. asserted that by doing so, UnitedHealthcare violated the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“Parity Act”), breached its fiduciary duty, and violated the terms of his plan.The district court granted UnitedHealthcare’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) based primarily on its conclusions that Ryan S. failed to allege that his claims had been “categorically” denied and insufficiently identified analogous medical/surgical claims that he had personally submitted and UnitedHealthcare had processed more favorably.The United States Court of Appeals for the Ninth Circuit reversed in part and affirmed in part the district court’s judgment. The panel concluded that Ryan S. adequately stated a claim for a violation of the Parity Act. The panel explained that an ERISA plan can violate the Parity Act in different ways, including by applying, as Ryan S. alleged here, a more stringent internal process to MH/SUD claims than to medical/surgical claims. The panel also concluded that Ryan S. alleged a breach of fiduciary duty. However, as Ryan S. failed to identify any specific plan terms that the alleged practices would violate, the panel affirmed the dismissal of his claims based on a violation of the terms of his plan. The case was remanded for further proceedings. View "Ryan S. v. UnitedHealth Group, Inc." on Justia Law

The United States Court of Appeals for the Seventh Circuit heard an appeal from Bulk Transport Corp. against Teamsters Union No. 142 Pension Fund and its Trustees. The dispute originated from two collective-bargaining agreements between Bulk Transport and Teamsters Local 142, active from 2003 to 2006. The Union insisted that Bulk Transport apply one such agreement, the Steel Mill Addendum, to non-steel mill work (LISCO work), which Bulk Transport initially did, subsequently making pension contributions on behalf of the LISCO workers. However, when Bulk Transport lost the LISCO contract, they ceased these contributions, leading to the Pension Fund assessing a withdrawal liability of about $2 million under the Multiemployer Pension Plan Amendments Act (MPPAA).After arbitration, Bulk Transport paid but demanded a review of the decision. The district court agreed with the arbitrator's ruling that Bulk Transport had adopted the Addendum by conduct, and thus the Pension Fund was entitled to the withdrawal liability. The district court also denied Bulk Transport's request for a refund.The Seventh Circuit, however, reversed the district court's decision. It held that the written agreement, not the practice or conduct, should dictate the terms of pension contributions to multi-employer plans. The written agreement in this case did not cover the LISCO work, and the court rejected the argument that Bulk Transport's conduct altered the substantive terms of the agreement. The court held that the writings were conclusive and that employers and unions could not opt-out of the requirements orally or through their course of conduct. The court affirmed the district court's denial of attorney's fees for the Pension Fund and remanded the case with instructions to order the Pension Fund to repay the withdrawal liability it collected from Bulk Transport. View "Bulk Transport, Corp. v. Teamsters Union Local 142" on Justia Law

In this case, the Plaintiff, Barbara M. Parmenter, had subscribed to a long-term care insurance policy offered by her employer, Tufts University, and underwritten by The Prudential Insurance Company of America. The policy was governed by the Employee Retirement Income Security Act of 1974. After Prudential twice increased Parmenter's premium rate payments for her policy, she sued Tufts and Prudential, alleging each breached their respective fiduciary duties owed to her when Prudential increased those rates. The defendants responded with motions to dismiss for failure to state a plausible claim. The district court granted each of their motions and Parmenter appealed.The United States Court of Appeals For the First Circuit found that the language in the policy stating that premium increases would be "subject to the approval of the Massachusetts Commissioner of Insurance" was ambiguous, and could not be definitively interpreted based solely on the pleadings and contract documents currently available. Therefore, the court reversed the district court's decision to dismiss the case against Prudential and remanded it for further proceedings.However, the court affirmed the dismissal of the case against Tufts, as Parmenter's allegations that Tufts failed to prevent the premium rate increases or monitor Prudential did not fall into one of the categories of co-fiduciary liability set forth in section 1105(a) of the Employee Retirement Income Security Act. View "Parmenter v. Prudential Ins. Co. of America" on Justia Law

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