Justia ERISA Opinion Summaries

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

Before his retirement, Asa Williams, Sr. participated in various benefit programs (the Xerox Plans), which are subject to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. Asa married Carmen and designated Carmen as his beneficiary. After their divorce, Asa attempted to change his designated beneficiary from his ex-wife to his son (Asa, Jr.). After Asa, Sr.'s death, Carmen claimed to be the beneficiary under the Xerox Plans and Asa, Jr. likewise asserted the same claim. Carmen subsequently moved for summary judgment, asserting that because Asa, Sr. failed to fill out and to return the beneficiary designation forms, he did not properly designate Asa, Jr. as beneficiary in her place. The district court granted the motion. The court concluded that the district court erred in determining that Asa, Sr. was required to abide by the language contained in the forms - but not in the governing plan documents - to change his beneficiary from Carmen to Asa, Jr. Reviewing de novo whether Carmen or Asa, Jr. is entitled to plan benefits, the court concluded that based on the evidence, including Xerox's call log reflecting that Asa, Sr. called Xerox to change his beneficiary designation from Carmen to Asa, Jr., a reasonable trier of fact could determine that Asa, Sr. intended to change his beneficiary to Asa, Jr. and that his phone calls to Xerox constituted substantial compliance with the governing plan documents' requirements for changing his beneficiary designation. Accordingly, the court reversed and remanded. View "Mays-Williams v. Williams" on Justia Law

M&G purchased the Point Pleasant Polyester Plant in 2000 and entered a collective bargaining agreement and a related Pension, Insurance, and Service Award Agreement with the union, providing that certain retirees, surviving spouses, and dependents, would “receive a full Company contribution towards the cost of [health care] benefits”; that such benefits would be provided “for the duration of [the] Agreement”; and that the Agreement would be subject to renegotiation in three years. After the expiration, M&G announced that it would require retirees to contribute to the cost of their health care benefits. Retirees sued, alleging that the 2000 Agreement created a vested right to lifetime contribution-free health care benefits. On remand, the district court ruled in favor of the retirees; the Sixth Circuit affirmed. The Supreme Court vacated and remanded, noting that welfare benefits plans are exempt from the Employee Retirement Income Security Act, 29 U.S.C. 1051(1), 1053, 1081(a)(2), 1083, and applying ordinary principles of contract law. The Court stated that Sixth Circuit precedent distorts ordinary principles of contract law, which attempt to ascertain the intention of the parties, “by placing a thumb on the scale in favor of vested retiree benefits in all collective-bargaining agreements.” The Sixth Circuit did not consider the rules that courts should not construe ambiguous writings to create lifetime promises and that “contractual obligations will cease, in the ordinary course, upon termination of the bargaining agreement.” View "M&G Polymers USA, LLC v. Tackett" on Justia Law

John and Melissa married in 1984. John enrolled in his employer’s retirement plan and designated Melissa as the beneficiary of a qualified joint and survivor annuity. John retired in 1994. The survivor annuity irrevocably vested in Melissa; John began receiving benefits. In2002, they divorced, agreeing to a decree awarding John all “benefits existing by reason of [John’s] past, present, or future employment.” John remarried and sought to designate his new wife as the survivor annuity beneficiary. The plan advised John that this designation would be permissible if done by qualified domestic relations order (QDRO) that would not require the plan to increase benefits beyond actuarial estimates of John’s and Melissa’s life expectancies, 29 U.S.C. 1056(d)(3)(D). On John’s motion, a Texas court entered a purported QDRO divesting Melissa of all ownership interests in the survivor annuity. The employer terminated its pension plan. Pension Benefit Guaranty Corporation (PBGC) became the plan’s statutory trustee and determined that the supposed QDRO was invalid because it would require “a form of benefit, or [an] option, not otherwise provided under the plan” and because, unless waived in accordance with statutory procedures within 90 days, a spouse’s right to the survivor annuity irrevocably vests on the annuity start date. The district court upheld the determination and found John’s contract and unjust enrichment claims against Melissa preempted. The D.C. Circuit affirmed. View "Vanderkam v. Vanderkam" on Justia Law

After RSL denied plaintiff's claim for long-term disability benefits, plaintiff, a helicopter pilot with an amputated leg, filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). The district court held that the evidence supported RSL's determination that plaintiff's depression and PTSD contributed to his Total Disability. Therefore, RSL did not abuse its discretion by determining that the Exclusion Clause limited plaintiff's right to benefits. Declining to consider whether plaintiff carried his burden to show a right to benefits, the court held that RSL abused its discretion when it determined that plaintiff was not Totally Disabled where there was no evidence to show that he could earn a substantially similar salary in another position. Further, there is no rational connection between the fact that plaintiff can do sedentary work and the conclusion that he could earn a substantially similar salary in any alternative position. The court also held that RSL abused its discretion when it determined that the Exclusion Clause limited plaintiff's right to benefits, and when it affirmed RSL's determination on this basis. Accordingly, the court reversed and remanded, rendering judgment for plaintiff. View "George v. Reliance Standard Life Ins. Co." on Justia Law

From 1995-2009, Johnson worked for CRE. In the last three years, Johnson worked from home, 8 hours a day at a computer. Johnson was covered under CRE’s United disability insurance policy. In 1999, Johnson was diagnosed with fibromyalgia. In 2004, she underwent neck surgery for nerve injuries. On the day she resigned, Johnson visited MacDonald, her primary care physician, who diagnosed anxiety, depression, fibromyalgia, and chronic pain. Johnson completed a short-term disability form. MacDonald completed an Attending Physician’s Statement. United denied the application. Based on the recommendations of its doctor, United denied Johnson’s appeal. Johnson sought long-term disability benefits. MacDonald completed a Physician’s Statement that imposed multiple limitations. United denied the claim. Johnson appealed. United referred Johnson’s file and medical records to Boscardin, an orthopedic surgeon, who determined that, although Johnson experienced chronic pain in her neck and spine, Johnson’s complaints were not supported by “conclusive, objective evidence.” McClellan, Johnson’s surgeon, responded that he “[o]verall” agreed with Boscardin. United denied the appeal. Johnson sued under ERISA. The district court granted Johnson summary judgment, finding that United failed to consider Johnson’s condition as a whole. The Eighth Circuit reversed, finding the denial supported by substantial evidence. View "Johnson v. United of Omaha Life Ins. Co." on Justia Law

In 1988, Brake began working at Hutchinson. She was diagnosed with multiple sclerosis (MS) in 2000, but continued to work. Brake purchased disability insurance through Hutchinson’s plan in 1988. Hutchinson, as the plan administrator, ceded discretionary authority to Hartford to construe the plan and make eligibility determinations. In 2007, Brake purchased "buy-up" coverage that excluded a disability if medical treatment for that condition was rendered within 12 months prior to the effective date. The limitation ended after a year without a claim: if Brake was treated for MS between April 1, 2006, and April 1, 2007, and then became disabled as a result of MS before April 1, 2008, the exclusion would limit her benefits to core plan coverage. Brake began experiencing problems with her MS in 2007 and received benefits from a separate short-term disability plan. On March 25, 2008, she stopped working at Hutchinson. In May, she applied for LTD benefits, stating her onset of disability as July 27, 2007. Hartford informed her that her LTD benefits were approved, but not at the buy-up plan rate. Brake claimed that doctor visits during the 12 months were for a pap smear and a yearly routine MRI. Hartford cited the same records which indicated that Brake was increasingly less able to manage her MS conditions during the 12 months before her purchase of buy-up coverage. In Brake’s suit under ERISA, 29 U.S.C. 1001, the district court found that Hartford did not abuse its discretion. The Eighth Circuit affirmed summary judgment in favor of Hartford. View "Brake v. Hutchinson Tech., Inc.," on Justia Law

The class action suit, filed about 19 years ago, claimed that a defined‐contribution ERISA pension plan in which the employer matched contributions made by its employees was partially terminated, requiring vesting. After a previous remand, the district judge granted summary judgment in favor of the defendant and awarded $64,000 in costs. The Seventh Circuit affirmed. When a pension plan is terminated, the rights of the participants in the plan vest in full; none of the money contributed by the employer to the individual employees’ retirement accounts is returned to the employer. Full vesting is required in the case of partial as well as total terminations, 26 U.S.C. 411(d)(3)(A). The district judge had to decide whether the series of reductions in the number of plan participants should be considered a single partial termination. The judge determined that there was no plan; decisions to sell particular subsidiaries were made sequentially, based on economic conditions in the particular market in which each operated. View "Matz v. Household Int'l Tax Reduction Inv. Plan" on Justia Law