Justia ERISA Opinion Summaries

Edmonson’s husband was insured under a Lincoln group life insurance policy, established under an Employee Retirement Income Security Act employee benefit plan. When her husband died, Edmonson was entitled to a $10,000 benefit. The policy states that benefits, “will be paid immediately after the Company receives complete proof of claim.” It does not state that Lincoln will pay benefits using a retained asset account. Edmonson submitted a Lincoln claim form that stated that Lincoln’s usual method of payment is to open a SecureLine Account in the beneficiary’s name. Lincoln set up an interest-bearing SecureLine Account in Edmonson’s name in the amount of $10,000, and sent her a checkbook. In using retained asset accounts, an insurance company does not deposit funds, but merely credits the account; when a beneficiary writes a check on the account, the insurer transfers funds to cover the check. Three months after Lincoln set up the account, Edmonson withdrew the full amount. Lincoln paid $52.33 in interest. Edmonson contends that the profit Lincoln earned from investing the retained assets was greater than that amount and that Lincoln made $5 million in profit in 2009 by investing retained assets. Edmonson brought an ERISA claim claiming violation of fiduciary duties, 29 U.S.C. 1002(21)(A). The district court granted Lincoln summary judgment, concluding Lincoln was not acting in a fiduciary capacity when it took the challenged actions. The Third Circuit affirmed. View "Edmonson v. Lincoln Nat'l Life Ins. Co." on Justia Law

Frazier, a sorter for Publishers Printing, was covered by Publishers’ employee benefit plan, which provided disability insurance. In 2009, at age 42, she left her job due to back pain that radiated down her legs, which she thought was caused by arthritis and a bulging disc, though she could not remember any fall or injury that initiated the pain. An MRI revealed mild disc dislocation. Her family physician diagnosed her with lower back pain and radiculopathy and in 2010 opined that Frazier was unable to return to work at regular capacity. Frazier participated in limited physical therapy. Another physician prescribed lumbar epidural injections and eventually permitted her to return to work. The plan denied Frazier’s claim for long-term disability benefits after reviewing medical evidence and job descriptions from Publishers and the U.S. Department of Labor. A Functional Capacity Evaluation indicated that Frazier “is currently functionally capable of meeting the lower demands for the Medium Physical Demand level on a 8 hour per day.” Frazier sued under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The district court granted judgment for the plan, reasoning that the administrator had discretion to deny Frazier’s claim, and that denial of benefits was not arbitrary. The Sixth Circuit affirmed. View "Frazier v. Life Ins. Co. of N. Am." on Justia Law

Reynolds acquired Pactiv in 2010 under an agreement that calls for severance pay to any non‐union employee terminated without cause, within a year, as a result of the acquisition. Pactiv established a severance‐pay plan with implementing terms, including a requirement that the departing worker execute a separation agreement in a form acceptable to the company, releasing all other claims against Pactiv. Within a year, Pactiv directed Rupert to relocate. He declined. Pactiv acknowledged entitlement to severance pay and sent him an agreement, which required that Rupert promise, for the next year, not to work for competitors in research and development, solicit sales of competing goods and services, or try to hire Pactiv employees. He had not previously been subject to a restrictive covenant and declined to sign. Pactiv withheld severance benefits. The district court held that Rupert was entitled to benefits because the formal plan, governed by ERISA, lacks any language conditioning benefits on signing a restrictive covenant; material terms must be in writing, 29 U.S.C.1102(a)(1). The Seventh Circuit vacated, noting that Rupert did not ask for benefits under Pactiv’s plan, but asked for benefits under the acquisition agreement, repeatedly asserting that the plan is irrelevant to his claim. The court remanded for consideration under that agreement. View "Pactiv Corp. v. Rupert" on Justia Law

Plaintiffs, insured under employer health plans, filed a proposed class action alleging that health-insurance companies violated Wisconsin law by requiring copayments for chiropractic care. The insurance code prohibits insurers from excluding coverage for chiropractic services if their policies cover the diagnosis and treatment of the same condition by a physician or osteopath. The policies at issue provide chiropractic coverage, although, like other services, it is subject to copayment requirements. The complaint cited provisions of the Employee Retirement Income Security Act for recovery of benefits due, 29 U.S.C. 1132(a)(1)(B) & 502(a)(3), and for breach of fiduciary duty, sections 1132(a)(3), 1104. The district court dismissed. The Seventh Circuit affirmed. Nothing in ERISA categorically precludes a benefits claim against an insurance company. The complaint alleges that the insurers decide all claims questions and owe the benefits; on these allegations the insurers are proper defendants on the 1132(a)(1)(B) claim. The complaint nonetheless fails to state a claim for breach of fiduciary duty; setting policy terms, including copayments, determines the content of the policy, and decisions about the content of a plan are not themselves fiduciary acts. View "Larson v. United Healthcare Ins. Co." on Justia Law

This case concerned the withdrawal liability for a pro rata share of unfunded vested benefits to a multiemployer pension fund of Scott Brass, Inc. (SBI), a bankrupt company. SBI had withdrawal pension obligations to the multiemployer pension fund (TPF), which sought to impose the obligations on two private equity funds (Plaintiffs). Plaintiffs asserted they were passive investors that indirectly controlled SBI and sought a declaratory judgment against the TPF. The TPF counterclaimed and sought payment of the withdrawal liability at issue. The district court entered summary judgment for Plaintiffs. The First Circuit Court of Appeals affirmed in part, reversed in part, and vacated in part, holding (1) at least one of the private equity funds that operated SBI sufficiently operated and was advantaged by its relationship with SBI, and further factual development was necessary as to the other equity fund; (2) the district court erred in entering summary judgment for Plaintiffs under the "trades or businesses" aspect of a two-part "control group" test under 29 U.S.C. 1301(b)(1); and (3) the district court correctly entered summary judgment for Plaintiffs on TPF's claim of liability on the ground that the funds had engaged in a transaction to evade or avoid withdrawal liability. Remanded. View "Sun Capital Partners III, LP v. New England Teamsters & Trucking Indus. Pension Fund" on Justia Law

The plant’s union and TRW negotiated collective bargaining agreements, which included provisions for healthcare benefits for retirees. The last CBA became effective in 1993 and was scheduled to expire in 1996. The plant closed in 1997. TRW and the union entered into a termination agreement that provided that any beneficiary, who is receiving or entitled to receive any payment and/or benefit under the CBA, “shall continue to receive or be entitled to receive such payment and/or benefit as though the CBA and Pension Plan had remained in effect.” In 2011, TRW terminated prescription drug coverage for Medicare-eligible retirees, replacing it with an annual contribution to a health reimbursement account. Plaintiffs claimed that this change modified their benefits in violation of TRW’s contractual obligation and filed a purported class action under the Labor Management Relations Act, 29 U.S.C. 185(a), and a claim for benefits under the Employment Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B). The district court granted TRW’s motion to compel arbitration. The Sixth Circuit affirmed as to the two named Plaintiffs, declining to address the rights of hypothetical plaintiffs. View "VanPamel v. TRW Vehicle Safety Sys., Inc." on Justia Law

Appellant a former pilot for US Airways, sought benefits from a collectively-bargained pilot disability plan under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. On appeal, appellant challenged the district court's dismissal of his claim for lack of jurisdiction. The court affirmed the district court's dismissal because section 204 of the Railway Labor Act (RLA), 45 U.S.C. 151 et seq., vested in the "applicable adjustment board" exclusive jurisdiction over appellant's claim because it was grounded in the application and interpretation of a collective bargaining agreement. View "Oakey v. US Airways Pilots Disability Income Plan" on Justia Law

The Fund is a multi-employer trust fund under the Taft-Hartley Act, 29 U.S.C. 186, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. Blue Cross is a Michigan non-profit corporation; its enabling statute authorizes the State Insurance Commissioner to require it to pay a cost transfer of one percent of its “earned subscription income” to the state for use to pay costs beyond what Medicare covers. In 2002 the Fund converted to a self-funded plan, and entered into an Administrative Services Contract with Blue Cross, which states that Blue Cross is not the Plan Administrator, Plan Sponsor, or fiduciary under ERISA; its obligations are limited to processing and paying claims. In 2004 the Fund sued, claiming that Blue Cross breached ERISA fiduciary duties by imposing and failing to disclose a cost transfer subsidy fee to subsidize coverage for non-group clients. The fee was regularly collected from group clients. Self-insured clients were not always required to pay it. Following a first remand, the district court granted class certification and granted the Fund summary judgment. On a second remand, the court again granted judgment on the fee imposition claim and awarded damages of $284,970.84 plus $106,960.78 in prejudgment interest. The Sixth Circuit affirmed. View "Pipefitters Local 636 Ins. Fund v. Blue Cross & Blue Shield of MI" on Justia Law

Plaintiffs, former Lehman employees, filed suit alleging that defendants, members of the Benefits Committee, and the company's Directors, breached their duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. In regards to plaintiffs' claims that the Benefits Committee Defendants breached their duty of prudence in managing the company's employee stock ownership plan (ESOP), the court concluded that plaintiffs have not rebutted the Moench v. Robertson presumption because they failed to allege facts sufficient to show that the Benefits Committee Defendants knew or should have known that Lehman was in a "dire situation" based on information that was publicly available during the class period. In regards to plaintiffs' claims that the Benefits Committee Defendants breached their duty of disclosure, the publicly-known information available to defendants did not give rise to an independent duty to investigate Lehman's SEC filings prior to incorporating their content into a summary plan description issued to plan-participants. The court affirmed the district court's dismissal of plaintiffs' remaining claims. View "In Re: Lehman Bros. ERISA Litig." on Justia Law

Parents appealed from the district court's grant of summary judgment in favor of defendant, arguing that the district court erred in concluding that the antenuptial agreement between their son and his then-wife, Kathy L. Cox, was ineffective to waive Kathy's right to the funds in Michael's 401(k) plan. The son died before his divorce from Kathy was finalized. The parties agreed that the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., governed the distribution of the funds in the plan. The court concluded that the son's designation of his Parents as beneficiaries of the plan must yield to Kathy's rights as a surviving spouse, agreeing with the district court that Kathy's consent did not satisfy the acknowledgment requirement of section 1055(c)(2)(A)(iii). View "MidAmerican v. Cox, Sr., et al." on Justia Law