Justia ERISA Opinion Summaries

Appellant was eligible for disability benefits through an employee welfare benefit plan underwritten by Aetna Life Insurance Company. Appellant successfully applied for long-term disability (LTD) benefits under his plan in 2009. Later that year, Appellant’s LTD benefits were terminated. Appellant brought this suit against Aetna under the Employee Retirement Income Security Act of 1974 alleging wrongful termination of benefits. The federal district court granted summary judgment for Aetna on the benefits-termination claim but applied a $5,000 penalty against Aetna for its failure to produce all relevant plan documents within the statutorily prescribed time. The First Circuit (1) vacated summary judgment with respect to the termination of disability benefits and remanded the issue for further consideration by the claims administrator, holding that Aetna’s decision to terminate Appellant’s LTD benefits was not a reasoned determination; and (2) affirmed the district court’s imposition of a $5,000 penalty for the belated production of a plan document, holding that the amount of the penalty imposed was within the district court’s discretion. View "McDonough v. Aetna Life Ins. Co." on Justia Law

This case arose out of a disability benefits dispute between Plaintiff, a retired firefighter for the City of Tracy, California, and the California Association of Professional Firefighters (CAPF), the manager of an employee welfare benefit plan. While a related action was ongoing, Plaintiff initiated a second lawsuit against CAPF, California Administration Insurance Services, Inc. (CAISI), and individual members of the board of directors for both CAPF and CAISI, alleging that Defendants had breached their fiduciary duties under ERISA in the management and administration of the plan. A panel of the Ninth Circuit affirmed in part and reversed in part the district court’s judgment, holding that the district court (1) correctly granted summary judgment for Defendants on a claim that they breached their duty to hold plan assets in trust; (2) erred in granting summary judgment for Defendants on a claim that they breached their fiduciary duties by engaging in unlawful self-dealing; and (3) erred in granting partial summary judgment for Plaintiff where Defendants did not breach their fiduciary duties by failing to distribute a summary annual report. Remanded. View "Barboza v. Cal. Ass’n of Prof’l Firefighters" on Justia Law

Plaintiff was a participant in a disability plan (Plan), which was insured and administered by Defendant under ERISA. The Plan limited long-term disability (LTD) benefits to twenty-four months for a disability caused or contributed to by mental disorders, substance abuse, or other limited conditions. Defendant terminated Plaintiff’s benefits after twenty-four months after applying this limited conditions provision. After his unsuccessful administrative appeal, Plaintiff filed suit against Defendant for unpaid benefits. Specifically, Plaintiff argued that he had been diagnosed with chronic Lyme disease, a physical illness allegedly not limited under the terms of the Plan. The district court granted summary judgment in favor of Defendant. The First Circuit affirmed, holding that even if Plaintiff was disabled as a result of chronic Lyme disease, the mental disorder limitation nonetheless applied because Plaintiff's mental disorders contributed to his disability as of June 1, 2011. View "Dutkewych v. Standard Ins. Co." on Justia Law

Home health care plaintiffs sought to prevent the Commissioner of the New York State Department of Health, from enforcing the Wage Parity Law, which sets the minimum amount of total compensation that employers must pay home care aides in order to receive Medicaid reimbursements for reimbursable care provided in New York City and Westchester, Suffolk, and Nassau Counties, N.Y. Pub. Health Law 3614‐c. Plaintiffs claim the Law was either preempted by the National Labor Relations 8 Act, 29 U.S.C. 151, or the Employee Retirement Income Security Act, 29 U.S.C. 1001, or was unconstitutional under the Due Process and Equal Protection Clauses. The Second Circuit affirmed the district court conclusion that the state law, except for one severable provision subdivision that singles out Taft‐Hartley plans for special treatment, is neither preempted nor unconstitutional. View "Concerned Home Care Providers, Inc. v. Cuomo" on Justia Law

Cottillion worked at United from 1960 until 1989; his benefits had vested under “the 1980 Plan.” Cottillion, then age 54, was among “terminated vested participants” (TVPs), distinct from Early Retirees, who retired at an age older than 59½ or 60, but younger than 65. United informed Cottillion that he could elect to have his monthly retirement benefit begin after October, 1995 (age 60), and that his monthly benefit would be $573.70 at age 60. The letter did not state that the amount depended on whether he elected to receive it at age 60 or later. In 2002, United amended the plan, to comply with Employee Retirement Income Security Act amendments, and receive favorable tax treatment. Later Plans included language, absent from the 1980 and 1987 Plans, stating that the benefits of TVPs who receive pensions before age 65 would be “actuarially reduced to reflect the earlier starting date.” In 2005, actuaries informed the plan that United had erroneously paid pensions that were not “actuarially reduced” to TVPs vested under the 1980 and 1987 Plans. Because deviations from the terms of ERISA-governed plans can jeopardize favorable tax treatment, United sought recoupment under the IRS’s voluntary correction program. Cottillion’s pension was eliminated, and he was told he should pay the Plan $14,475. The district court granted class certification and held that United’s actions violated ERISA's anti-cutback rule, 29 U.S.C. 1054(g). The Third Circuit affirmed. View "Cottillion v. United Ref. Co" on Justia Law

In 2000, Rochow sold his interest in Universico to Gallagher and became President of Gallagher. As Gallagher employee, Rochow was covered under a LINA disability policy. In 2001, Rochow began to experience short term memory loss, chills, sweating, and stress. Gallagher demoted Rochow and forced Rochow to resign in January, 2002. In February 2002, Rochow experienced amnesia, was hospitalized, and was diagnosed with HSV-Encephalitis, a rare, severely debilitating brain infection. LINA repeatedly denied Rochow benefits stating that Rochow’s employment ended before his disability began. Rochow sued Cigna, LINA’s parent company, alleging breach of fiduciary duty under ERISA, 29 U.S.C. 1104(a). In 2007 the Sixth Circuit affirmed a decision that denial of Rochow’s claims was arbitrary and did not appear to have been made solely in the interest of the participants and beneficiaries or the exclusive purpose of providing benefits to participants and beneficiaries as required by ERISA. Rochow died in 2008. In 2009, the district court ordered an equitable accounting of profits and disgorgement of $3,797,867 under an equitable theory of unjust enrichment. The Sixth Circuit affirmed in 2013. Following rehearing en banc, the Sixth Circuit later vacated the disgorgement award and remanded the case to determine whether Rochow is entitled to prejudgment interest. View "Rochow v. Life Ins. Co. of North Am." on Justia Law

Plaintiffs-appellants represent a class of retirees formerly employed by Sprint-Nextel Corporation, Embarq Corporation (or a predecessor and/or subsidiary company of either Embarq or Sprint). Plaintiffs sued after Defendants altered or eliminated health and life insurance benefits for retirees. Plaintiffs asserted Defendants: (1) violated the Employee Retirement Income Security Act of 1974 (ERISA) by breaching their contractual obligation to provide vested health and life insurance benefits; (2) breached their fiduciary duty by, inter alia, misrepresenting the terms of multiple welfare benefit plans; and (3) violated the Age Discrimination in Employment Act (ADEA) and applicable state laws by reducing or eliminating the same benefits. Defendants moved for summary judgment on the breach of fiduciary duty claims, the ADEA claims, the state-law age discrimination claims, and some of the contractual vesting claims. The district court granted Defendants’ motions in part and Plaintiffs obtained a Rule 54(b) certification. The Tenth Circuit concluded Defendants did not contractually agree to provide Plaintiffs with lifetime health or life insurance benefits and thus affirmed in part the grant of summary judgment as to the contractual vesting claims. To the extent the district court granted summary judgment against class members whose contractual vesting claims arise, in whole or in part, from summary plan descriptions (other than those identified in Defendants’ motion), the Court reversed the grant of summary judgment against those class members. The Court reversed the district court’s dismissal of Plaintiffs’ breach of fiduciary duty claims brought pursuant to 29 U.S.C. 1132(a)(3) and reversed the dismissal of Plaintiffs’ remaining breach of fiduciary duty claims to the extent those claims were premised on a fraud theory. Finally, because Defendants’ decision to reduce or terminate the group life insurance benefit was based on a reasonable factor other than age, their actions did not violate the ADEA, and the Tenth Circuit affirmed the grant of summary judgment in favor of Defendants on those claims. View "Fulghum v. Embarq Corporation" on Justia Law

Plaintiff filed suit against PBGC, alleging claims under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., and seeking to correct PBGC's benefit determinations. The court concluded that PBGC properly interpreted the provisions of ERISA and did not act arbitrarily or capriciously in declining to provide shutdown benefits to plaintiff; PBGC properly interpreted ERISA and did not act arbitrarily or capriciously in failing to insure plaintiff's individual account; and, assuming arguendo that PBGC in fact amended the pension plan, plaintiff cannot identify a statutory provision that bars PBGC from doing so. Accordingly, the court affirmed the district court's grant of summary judgment to PBGC. View "Deppenbrook v. Pension Benefit Guaranty Corp." on Justia Law

National Retirement Fund sought to hold Mezz Lender and Oaktree Capital responsible for multiemployer pension fund withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. 1381. Oaktree, through Mezz Lender, provided financing for the acquisition of a hotel by Chicago H&S. When H&S defaulted, it was taken into bankruptcy and the hotel was liquidated. NRF contends that the sale of the hotel triggered withdrawal liability on the part of H&S and any other “trade or business” under common control with it, including bot Oaktree and Mezz Lender. Oaktree and Mezz Lender, argued that the claim of withdrawal liability was barred by the bankruptcy reorganization plan pursuant to which the hotel was sold. On motions for summary judgment, the court stated that having decided that Oaktree and Mezz were not jointly and severally liable for H&S’s withdrawal liability, "the Court need not address the parties’ arguments as to [the Oaktree parties’] motion" concerning the bankruptcy. The Seventh Circuit vacated. The court decided in the absence of a cross-motion for summary judgment on the issue that it found to be dispositive, and without first giving the unsuccessful movant notice that it was entertaining the possibility of entering summary judgment against it or the opportunity to respond. View "Hotel 71 Mezz Lender LLC v. National Retirement Fund" on Justia Law

The Chapter 7 bankruptcy trustee appealed the district court's holding that the bankruptcy court did not have jurisdiction to order that he and his retained professionals be compensated for their services using the assets of a 401(k) plan pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001 et seq. The court concluded that, in this case, no "arising under" jurisdiction exists and no "related to" jurisdiction exists. Accordingly, the court concluded that bankruptcy courts do not have jurisdiction to award compensation to the trustee in these circumstances and affirmed the judgment of the district court. View "Kirschenbaum v. U.S. Dept. of Labor" on Justia Law