Justia ERISA Opinion Summaries

In 2008 Schane suffered a job-related injury while working for YRC. He drew workers’ compensation benefits until he returned to work in 2009. Schane was medically cleared for light-duty work only, and with no light work available, he resumed workers’ compensation in 2010. YRC and its employees, including Schane, participate in a multi-employer benefit trust fund and an “employee pension benefit plan” within the meaning of 29 U.S.C. 1002(2). Schane submitted a pension application in July 2009, after returning from his first stint on workers’ compensation, but left blank the line on indicating his last day of work because the plan does not permit participants to take a pension while they are receiving workers’ compensation. The following March, Schane told the plan that his last day of work would be October 31, 2010. He later delayed his last day by a year. In September 2011, he delayed again. On December 21, he wrote that he would retire at the end of the year and that his pension should therefore be effective on January 1, 2012. Schane and the plan could not agree on the date that he “retired” for purposes of calculating benefits: August 2009 or December 2011. The district court rejected Schane’s argument. The Seventh Circuit reversed and remanded, noting the trustees’ flimsy defense of their interpretation on appeal. View "Schane v. Int'l Bh of Teamsters Union Local No. 710" on Justia Law

Plaintiff filed suit against Sun Life, alleging that Sun Life improperly denied him long-term disability benefits under a disability plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court concluded that it was reasonable for Sun Life to conclude that plaintiff's vitamin A supplements constituted a "medical treatment." The court held that Sun Life did not abuse its discretion in denying plaintiff's claim for benefits under the Plan, in light of an ordinary understanding of what constitutes a "medical treatment" and the purpose of the Pre-Existing Condition clause. Accordingly, the court reversed the district court's entry of summary judgment to plaintiff and remanded for entry of summary judgment to Sun Life. View "Kutten v. Sun Life Assurance Co." on Justia Law

ABA Retirement, a not‐for‐profit corporation created by the American Bar Association to provide its members and their employees with a retirement plan qualified to take advantage of income tax benefits, created master retirement plans for adoption by lawyers and law firms. In 1999 ABA Retirement hired State Street Bank to act as sole Plan trustee. ABA Retirement directors ceased to be trustees. ABA Retirement still maintained the IRS‐approved master tax‐qualified retirement plans and acted as Plan fiduciary, with authority to engage, monitor, and fire its trustee. It was responsible for Plan documents (ensuring that they were tax‐qualified), oversight of vendors, contract negotiations, and approval of State Street’s marketing plan. State Street had authority to engage and fire investment advisors, but was required to consult with ABA Retirement. The Plan paid ABA Retirement a fee for its services in connection with the Program based on a percentage of l invested assets. ABA Retirement received the interest on the funds. In 2000, 2001, and 2002, ABA Retirement reported gross income of $1,601,217 to $1,861,258. Its taxable income for those years was $384,972 to $672,098; it held assets worth $3.5 million. On tax returns ABA Retirement described itself as an employee benefit fund, and its product as retirement plans. In 2004 ABA retirement sought tax‐exempt status. In 2005, the IRS determined that ABA Retirement did not qualify for the exemption. ABA Retirement filed claims for refunds on taxes it paid from 2000-2002; those were denied. ABA Retirement filed suit, arguing that it was a tax‐exempt “business league” under 26 U.S.C. § 501(c)(6), from 2000 to 2002, and entitled to a refund. The district court granted summary judgment in favor of the government. The Seventh Circuit affirmed. View "ABA Ret. Funds v. United States" on Justia Law

The City of Quincy passed an ordinance demanding that bidders on municipal public works projects engage in a specific type of apprentice training program. Plaintiffs, a trade association of construction companies and two of its members, sued the City in federal district court asserting that the Employee Retirement Income Security Act (ERISA) preempted the ordinance’s apprentice training requirement. The district court granted summary judgment in favor of Plaintiffs and granted Plaintiffs’ motion for attorney fees under ERISA’s fee-shifting provision. The First Circuit affirmed the district court’s grant of summary judgment but reversed the fee award, holding (1) the reach of ERISA’s preemption provision extends to the ordinance at issue; and (2) because there was no appropriate “participant, beneficiary, or fiduciary” to whom fees could lawfully be awarded in this case, the fee award must be set aside. Remanded. View "Merit Constr. Alliance v. City of Quincy" on Justia Law

Plaintiffs, former employees of RBC who participated in a wealth accumulation plan (WAP), filed suit alleging that forfeitures of their plan amounted to violations of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The court reversed the district court's grant of RBC's motion for summary judgment, concluding that, under the plain language of the statute and the interpretations expressed in Murphy v. Inexco Oil Co. and Boos v. AT&T, WAP is an "employee pension benefit plan" under section 1002(2)(A)(ii) and nothing in section 2510.3-2(c) proves otherwise. View "Tolbert, et al. v. RBC Capital Markets Corp., et al." on Justia Law

Plaintiffs, salaried employees of Metal Container, participated in the Anheuser-Busch qualified defined-benefits pension plan under the Employee Retirement Income Security Act, 29 U.S.C. 1001-1461 (ERISA). The plan was amended in 2000 to add that upon a change in control, the retirement benefits of a participant “whose employment with the Controlled Group is involuntarily terminated within three (3) years after the Change in Control shall be determined by taking into account an additional five (5) years of Credited Service and ... an additional five (5) years of age.” The amendment followed management’s recognition that the plan was overfunded and might attract a potential acquirer. In 2008, InBev acquired Anheuser-Busch, including its subsidiary Metal Container, in a hostile takeover that was a “change in control” under the amendment. Plaintiffs continued working for Metal Container and remained employees of Anheuser-Busch’s Controlled Group until October 1, 2009, when InBev spun off Metal Container plants in a sale to Ball Corporation. Plaintiffs became employees of Ball. Plaintiffs sought recalculation of their future Anheuser-Busch retirement benefits, claiming that because their employment ended within three years of a change in control, they were entitled to enhanced benefits, regardless of the fact that Ball guaranteed them continued employment with substantially similar salary and benefits. Their claims were denied on the ground that they had not experienced unemployment. The district court dismissed their 29 U.S.C. 1132(a) claims of enhanced retirement benefits and breach of fiduciary duty. The Sixth Circuit reversed, finding the court’s reading of the 2000 amendment flawed. View "Adams v. Anheuser-Busch Co., Inc." on Justia Law

Alpine was an irrigation business owned by Robert from 1961 until it closed in 2009. Alpine was in arrears on pension fund payments to the Union. After a Joint Arbitration Board awarded it $56,269.97, the Union sought to compel the award under the Labor Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Security Act, 29 U.S.C. 1132(e)(1). During a deposition, Robert’s son, Jeffery, admitted his sole ownership of RWI and JV, which were established upon Alpine’s closing. Like Alpine, RWI services and installs lawn irrigation systems. JV’s sole business is leasing to RWI equipment that it purchased from Alpine. RWI operates out of Jeffery’s home, Alpine’s prior business address; all but one of RWI’s employees worked for Alpine. Almost all of RWI’s customers are former Alpine customers. The magistrate first denied the Union’s motion to impose judgment against RWI and JV as successors, but determined that the companies were successors under ERISA and that FRCP 25(c) provided an appropriate procedure and granted a motion to substitute. The Seventh Circuit affirmed, holding that the court properly applied the multifactor ERISA successorship test to find that an “interest” had been transferred within the meaning of FRCP 25(c) and properly resolved the motion without an evidentiary hearing.View "Sullivan v. Running Waters Irrigation, Inc." on Justia Law

Plaintiff filed suit against her former law firm alleging that decisions made by the firms' directors who administered the retirement plan breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The court concluded that ERISA's adoption of the common law's standard of fiduciary care in section 1104(a)(1)(B) permitted prudent fiduciaries making important decisions to rely on the advice of counsel in appropriate circumstances. Therefore, the court affirmed the district court's conclusion that the directors rightfully relied upon the advice of the plan's lawyer.View "Clark v. Feder Semo and Bard, P.C., et al." on Justia Law

The PAPER COMPANY's creditors successfully petitioned the Bankruptcy Court for relief under Chapter 7 of the Bankruptcy Code. The Bankruptcy Court then granted the PAPER COMPANY's motion to transform the Chapter 7 case into a Chapter 11 proceeding. While the Chapter 11 case was pending, the PBGC brought an action against the PAPER COMPANY. At issue on appeal was whether, under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., the trustee of a corporation that is a contributing sponsor and is in bankruptcy can maintain an action for the benefit of the bankruptcy estate and the estate's unsecured creditors against the corporation's former owner (as a former member of the controlled group) for liabilities arising from the termination of a pension plan. The court held that the answer is no. The court concluded that ERISA's funding requirements were put in place for the benefit of plan beneficiaries, not for the protection of a bankrupt plan sponsor's unsecured creditors. The trustee's complaint failed to state a claim for relief because it was brought for the benefit of the bankrupt's unsecured creditors. View "Durango-Georgia Paper Co., et al. v. H.G. Estate, LLC, et al." on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., alleging that LINA violated the disability insurance policy's terms and ERISA requirements - in part because LINA ignored the SSA process and the information it generated. The district court granted summary judgment in favor of LINA. Because LINA did not have the evidence presented to the SSA when it denied her last appeal - and in fact could not have had that evidence when it initially denied her claim - the court vacated the district court's judgment and remanded the case with instructions to remand plaintiff's claims to LINA for its consideration of the evidence presented to the SSA.View "Melech v. Life Ins. Co. of North America, et al." on Justia Law