Justia ERISA Opinion Summaries

Plaintiffs filed suit, alleging that ESI is systematically denying payment of compound drug claims without adhering to the procedural requirements of the Employee Retirement Income Security Act's "Claims Regulation." 29 U.S.C. 1001 et seq. The court concluded that there is no need for injunctive relief under section 502(a)(3), or for equitable relief to enforce or clarify the beneficiary’s rights under the plan under section 502(a)(1)(B). In this case, the district court did not abuse its discretion in denying the preliminary injunction requested by plaintiffs as assignees of plan beneficiaries because plaintiffs have cited no reported decision, and the court has found none, where a circuit court has upheld a private plaintiff’s claim for injunctive relief mandating the future procedures an ERISA plan must follow to comply with the Claims Regulation. In the alternative, the court concluded that plaintiffs do not have standing under ERISA to assert harm to themselves because they are not ERISA beneficiaries. Accordingly, the court affirmed the judgment. View "Grasso Enter. v. Express Scripts" on Justia Law

McCaffree brought a class action suit on behalf of participating employees against Principal, the company with whom McCaffree had contracted to provide a retirement plan’s investment options, alleging that Principal had charged McCaffree’s employees excessive fees in breach of a fiduciary duty Principal owed to plan participants under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The court affirmed the district court's grant of Principal's motion to dismiss for failure to state a claim because McCaffree failed to demonstrate a valid claim under ERISA. In this case, McCaffree's first argument fails because Principal owed no duty to plan participants during its arms-length negotiations with McCaffree, and the remaining four arguments fail because McCaffree did not plead a connection between any fiduciary duty Principal may have owed and the excessive fees Principal allegedly charged. View "McCaffree Fin. Corp. v. Principal Life Ins. Co." on Justia Law

St. Peter’s, a non-profit healthcare entity, runs a hospital, and employs over 2,800 people. It is not a church, but has ties to a New Jersey Roman Catholic Diocese. The Bishop appoints most members of its Board of Governors and retains veto authority over Board actions. The hospital has daily Mass and Catholic devotional pictures and statues throughout the building. In 1974, St. Peter’s established a non-contributory defined benefit retirement plan; operated the plan subject to the Employee Retirement Income Security Act (ERISA); and represented that it was complying with ERISA. In 2006 St. Peter’s filed an IRS application, seeking a church plan exemption from ERISA, 26 U.S.C. 414(e); 29 U.S.C. 1002(33), continuing to pay ERISA-mandated insurance premiums while the application was pending. In 2013, Kaplan, who worked for St. Peter’s until 1999, filed a putative class action alleging that St. Peter’s did not provide ERISA-compliant summary plan descriptions or pension benefits statements, and that, as of 2011, the plan was underfunded by more than $70 million. While the lawsuit was pending, St. Peter’s received an IRS private letter ruling. affirming the plan’s status as an exempt church plan for tax purposes. The Third Circuit affirmed denial of a motion to dismiss, concluding that St. Peter’s could not establish an exempt church plan because it is not a church. View "Kaplan v. Saint Peter's Healthcare Sys." on Justia Law

Plaintiff filed suit against Aetna and Hewlett Packard to recover benefits as the beneficiary of her husband’s group life insurance plan under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). On appeal, plaintiff challenged the district court's final judgment affirming the decision of the ERISA plan administrator to deny benefits. The court concluded that plaintiff has not provided evidence that suggests that the method by which Aetna made its determination in her case was procedurally unreasonable; the court rejected plaintiff's claim that Aetna’s conflict should be given greater weight in the district court’s analysis because it has a history of biased claims administration; and evidence is sufficient to permit a reasonable mind to reach the conclusion that the husband's fall was due to or contributed to by illness. The court further stated that, even accounting for Aetna’s conflict of interest as both insurer and plan administrator, Aetna did not abuse its discretion in determining that the husband's fall was not a covered “accident” under the terms of the Policy, negating recovery under the Policy. Because Aetna's denial of plaintiff's claim was not an abuse of discretion, the court affirmed the judgment. View "Hagen v. Aetna Ins. Co." on Justia Law

Several multi-employer health and welfare funds filed this suit under the Employee Retirement Income Security Act seeking approximately $70,000 in alleged delinquent contributions. The assertedly delinquent employer, Con-Tech Carpentry, did not file an answer within the statutory period and was found in default. The district court subsequently entered a judgment in the funds’ favor and awarded damages. Con-Tech subsequently filed a Fed. R. Civ. P. 60(b) motion, which also invoked Fed. R. Civ. P. 55(c). The judge denied the Rule 60(b) motion. The Seventh Circuit affirmed, holding that because Con-Tech made a deliberate decision to disregard the pending suit, there was no reason for the district judge to excuse Con-Tech’s conduct in retrospect. View "Mid-Central Illinois Reg’l v. Con-Tech Carpentry, LLC" on Justia Law

Under the Employee Retirement Income Security Act, 29 U.S.C. 1001, plan fiduciaries have a duty of prudence that generally requires diversification. To “solve the dual problems of securing capital funds for necessary capital growth and of bringing about stock ownership by all corporate employees,” Employee Stock Ownership Plans (ESOPs) are permitted to invest primarily in qualifying employer securities, rather than diversifying across securities of many companies. In 1995, the Third and Sixth Circuits adopted a presumption that an ESOP fiduciary’s decision to remain invested in employer securities is prudent. In 2008, GM faced severe business problems that resulted in its bankruptcy. GM employees, invested in the GM ESOP, sued State Bank, the fiduciary of the GM Common Stock Plan. That Plan lost money in 2008, but State declined to stop buying GM stock until November, 2008, and did not sell GM stock until March, 2009. In 2010, the district court dismissed, applying the presumption of prudence. In 2012, the Sixth Circuit remanded. After class certification, the district court, applying the presumption, granted State summary judgment. In the meantime, the Supreme Court abrogated the presumption altogether. The Sixth Circuit affirmed summary judgment, noting that during the relevant period, State’s managers repeatedly discussed whether to continue the GM investments, engaging in a “prudent process.” View "Pfeil v. State St. Bank & Trust Co." on Justia Law

In 2007, Durand filed an Employee Retirement Income Security Act, 29 U.S.C. 1001–1461 (ERISA) class action against her former employer and the pension plan it sponsors, challenging the projection rate used by the Plan to calculate the lump-sum payment Durand elected to receive after ending her employment at the Company in 2003. The Plan then used a 401(k)-style investment menu to determine the interest earned by members’ hypothetical accounts. Durand alleged that it impermissibly used the 30-year Treasury bond rate instead of the projected rate of return on her investment selections in the “whipsaw” calculation required under pre-2006 law. The Sixth CIrcuit reversed dismissal for failure to exhaust administrative remedies. Defendants then answered the complaint and raised defenses, including that the claims of putative class members “who received lump-sum distributions after December 31, 2003” were barred due to an amendment to the Plan that took effect after that date. Plaintiffs argued that the 2004 Amendment was an illegal reduction or “cutback” in benefits. The Sixth Circuit affirmed that the “cutback” claims were time-barred and did not relate back to the “whipsaw” claim asserted in the original class complaint. View "Durand v. Hanover Ins. Group, Inc." on Justia Law

UEBT is a healthcare employee benefits trust governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and pays healthcare providers directly from its own funds for the services provided to enrollees in its health plans. UEBT contracted with a “network vendor,” Blue Shield, to obtain access to Blue Shield’s provider network at the rates Blue Shield had separately negotiated, and certain administrative services. One of Blue Shield’s preexisting provider contracts was with Sutter, a group of health care providers in Northern California. UEBT sued Sutter, on behalf of a putative class of all California self-funded payors, alleging that Sutter’s contracts with network vendors, such as Blue Shield, contain anticompetitive terms that insulate Sutter from competition and drive up the cost of healthcare. UEBT sought damages, restitution, and injunctive relief under the Cartwright Act (Bus. & Prof. Code 16720) and California’s unfair competition law (section 17200). Sutter moved to compel arbitration, relying on an arbitration clause in the provider contract signed by Sutter and Blue Shield. The trial court denied Sutter’s motion, concluding that UEBT was not bound to arbitrate its claims pursuant to an agreement it had not signed or even seen. The court of appeal affirmed. View "UFCW & Employers Benefit Trust v. Sutter Health" on Justia Law

Plaintiff, the executrix of her husband's estate, along with her husband's former business, Federal City, filed suit against Life Investors for conversion and tortious interference with a contract. On appeal, plaintiffs challenged the district court's dismissal of the complaint. The court concluded that this action is not barred by claim preclusion because the claims brought are not based upon the same cause of action as the prior suit. In this case, plaintiffs allege claims for conversion and tortious interference with contract against Life Investors because Life Investors removed over $400,000 from certain accounts to cover expenses above the alleged debt plaintiffs owed Life Investors. Life Investors removed these funds after the decision in the Maryland district court. The Maryland court never determined that plaintiffs lacked any interest in the assets in the accounts. Instead, it decided that plaintiffs were time-barred from bringing claims from a 2000 request for withdrawal of the assets and that the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., claims were either time-barred or failed to allege a violation of ERISA law. Similarly, the claim is not barred by issue preclusion. Accordingly, the court reversed and remanded. View "Corrado v. Life Investors Ins. Co." on Justia Law

Life Investors filed suit against defendants, alleging breach of a settlement agreement that required defendants to repay advances of monies defendants received from Life Investors. On appeal, defendants challenged the district court's grant of summary judgment to Life Investors. The court affirmed, concluding that defendants' laches defense failed because they cannot show unreasonable delay on the part of Life Investors in bringing this suit nor can defendants show that they were prejudiced; even if the alleged inconsistencies were material, defendants chose not to investigate further and thus the determination that they ratified the Settlement Agreement was correct; the district court correctly granted summary judgment on the question of ratification of the Settlement Agreement after certifying that question to the Iowa Supreme Court and receiving its answer; and defendants' attempt to argue an Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., violation as a defense in this action is barred as a matter of issue preclusion. View "Life Investors Ins. Co. v. Federal City Region" on Justia Law