Justia ERISA Opinion Summaries

Plaintiff brought a class action suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., alleging various breaches of fiduciary duty to plan participants. The district court dismissed the complaint for failure to state a claim. The court concluded that the district court correctly dismissed Counts I and IV of the amended complaint which alleged that Idearc Defendants breached their fiduciary duties by allowing plan participants to buy and hold Idearc stock when it was no longer prudent to do so where the amended complaint failed to allege sufficient facts to overcome the "presumption of prudence" the court adopted in Kirschbaum v. Reliant Energy Inc. The court also concluded that the district court correctly dismissed plaintiff's claim for inaccurate disclosures and nondisclosures (Count II) where plaintiff alleged no specific circumstance or specific injury mandating the Idearc Defendants disclose non-public information to plan participants and no general duty to disclose non-public information existed under ERISA or under the court's precedents. The court affirmed the district court's dismissal of plaintiff's remaining claims. View "Kopp v. Klein, et al." on Justia Law

After accumulating a fortune in the technology business, Patel became a hedge fund manager. He formed a fund, and Sitara to serve as the fund’s investment adviser, and named himself managing director of Sitara. His acquaintances purchased interests in the fund. After initial success, Patel invested $6.8 million, nearly all of the fund’s assets, in Freddie Mac common stock in 2008, after the beginning of the subprime mortgage crisis. The fund incurred devastating losses. Owners of limited partnership interests sued Patel and Sitara, claiming federal and state securities fraud, fraudulent misrepresentation, and fraudulent inducement. Their second amended complaint asserted only failure to register securities in violation of federal law, failure to register as an investment advisor under Illinois law, and breach of fiduciary duty under ERISA, 29 U.S.C. 1109(a). Plaintiffs sought to file a third amended complaint, based upon purported misrepresentations discovered while deposing Patel: an offering memorandum statement that Patel “intends to contribute no less than one hundred thousand dollars” and Patel’s oral statement that he was investing some of the $18 million from the sale of a former business at the inception of the fund. Patel did not invest any proceeds from the sale of his company at the inception. The district court denied the motion. The Seventh Circuit affirmed. The new claims suffered from deficiencies that rendered the proposed amendment futile. View "Shailja Gandhi Revocable Trust v. Sitara Capital Mgmt., LLC" on Justia Law

This case arose when plaintiff filed suit against Conoco for breach of the Offer Letter and breach of its obligations under a severance plan (the Plan). The court concluded that plaintiff waived any challenge to the Trustee's application of the common law presumption of integration or Texas's parol evidence rule; plaintiff's arguments regarding his change in title were unpersuasive; plaintiff's "at will" employment argument relied on outdated and out-of-context Texas authority and was unpersuasive; the waiver was not invalid and unenforceable on account of fraud in the inducement; plaintiff ratified an alleged fraud, thereby preserving the validity and enforceability of the waiver regardless by submitting a claim to Conoco Human Resources but then continuing to work at Conoco; the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B), civil enforcement provision "completely preempts" plaintiff's state law claims against Conoco and the district court did not err by denying plaintiff's first motion for remand; the district court correctly denied plaintiff's renewed motion for remand; plaintiff was not entitled to recover attorneys' fees; and plaintiff waived his claim for breach of the Offer Letter, pertaining to a substantial reduction in his post-merger job position and responsibilities, for failure to plead with specificity. Accordingly, the court affirmed the district court's grant of summary judgment against plaintiff. View "Clayton v. ConocoPhillips Co., et al" on Justia Law

Engleson, vice president of an Akron insurance agency, suffered from medical conditions, including Crohn’s disease and depression. He resigned in 2001 and sought long-term disability benefits from the company’s group plan, managed by Unum. Unum denied his claim weeks later, reasoning that Engleson’s clinical documentation did not establish that his symptoms were so debilitating that he was precluded from working. Unum denied an appeal in October, 2001 and a second appeal with additional supporting information in November, 2001. In 2007, Engleson returned to Ohio and to the agency, but in August, 2008, he filed another claim for disability benefits. Unum granted his request, with the date of disability denoted as August 5, 2008. Unum would not provide additional appeal review of the 2001 claim. Engleson filed suit in 2009, under 29 U.S.C. 1132(a)(1)(B) and the Employee Retirement Income Security Act, alleging that he was not afforded a full and fair review of his claim and that Unum breached its fiduciary duties. The district court held that the three-year contractual limitations period barred the suit with respect to his 2001 claim. The Sixth Circuit affirmed, holding that the untimely filing was not excusable. View "Engleson v. UNUM Life Ins. Co. of Am." on Justia Law

Employees of Solvay Chemicals, Inc. brought an ERISA claim against the company for what they contended was improper notice with regard to changes in the company retirement program. At one time the company offered a defined benefit plan, but changed it to a "cash balance" plan that required a defined contribution from the company (rather than defined payments to employees). While the Tenth Circuit held that the company violated its notice obligations with regard to preexisting early retirement subsidies, the notice was sufficient in all other respects. As remedy for the defective notice, employees asked that the company revert back to the abandoned defined benefit plan. The district court found that the company's notice failure was not "egregious" to grant the employees' requested relief. The employees appealed the district court's denial of their request. Agreeing that the employees were not entitled to their requested relief, the Tenth Circuit affirmed. View "Jensen, et al v. Solvay Chemicals, Inc., et al" on Justia Law

Union members, working at Navistar’s Indianapolis engine-manufacturing plant, were represented by a union and were subject to a collective-bargaining agreement. They claim that on unidentified dates they were laid off, ostensibly for lack of work, but that Navistar actually subcontracted their work to nonunion plants in violation of the CBA and that Navistar failed to recall them as work became available. They claim to have filed hundreds of grievances that were diverted or stalled. In 2009, Navistar closed the Indianapolis plant. The union members sued. When union members sue their employer for breach of contract under the Labor Management Relations Act, 28 U.S.C. 185, they must also claim breach of their union’s duty of fair representation. The district court dismissed, finding that the plaintiffs had failed to adequately plead the prerequisite union breach of fair representation. A separate interference-with-benefits claim under the Employment Retirement Income Security Act, 29 U.S.C. 1001, was resolved by summary judgment in favor of Navistar. The 29 remaining plaintiffs appealed only the LMRA claim. The Seventh Circuit affirmed, stating that all of the allegations concerning the duty of fair representation were conclusory, so that the complaint lacked the required factual content. View "Yeftich v. Navistar, Inc." on Justia Law

In 1987, Kenseth underwent surgical gastric banding, covered by her insurer. About 18 years later Dr. Huepenbecker, advised another operation for severe acid reflux and other problems resulting from the first surgery. Her employer provided insurance through Dean, a physician-owned integrated healthcare system, specifically excluding coverage for “surgical treatment or hospitalization for the treatment of morbid obesity” and services related to a non-covered benefit or service. Plan literature refers coverage questions to the customer service department. Huepenbecker worked at a Dean-owned clinic, scheduled surgery at a Dean-affiliated hospital, and instructed Kenseth to call her insurer. Kenseth spoke with a customer service representative, who stated that Dean would cover the procedure. After the surgery, Dean declined coverage. Kenseth was readmitted for complications. Dean denied coverage for the second hospitalization. Kenseth pursued internal appeals to obtain payment of the $77,974 bill before filing suit under ERISA, 29 U.S.C. 1001, and Wisconsin law. The district court granted Dean summary judgment. The Seventh Circuit affirmed as to estoppel and pre-existing condition claims, but remanded concerning breach of fiduciary duty. After the district court again entered summary judgment for Dean, the Supreme Court decided Cigna v. Amara, clarifying relief available for a breach of fiduciary duty in an ERISA action. The Seventh Circuit remanded, stating that Kenseth has a viable claim for equitable relief. View "Kenseth v. Dean Health Plan, Inc." on Justia Law

Plaintiffs, current and former employees of Amgen and AML, participated in two employer-sponsored pension plans, the Amgen Plan and the AML Plan. The Plans were employee stock-ownership plans that qualified as "eligible individual account plans" (EIAPs) under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1107(d)(3)(A). Plaintiffs filed an ERISA class action against Amgen, AML, and others after the value of Amgen common stock fell, alleging that defendants breached their fiduciary duties under ERISA. The court concluded that defendants were not entitled to a presumption of prudence under Quan v. Computer Sciences Corp., that plaintiffs have stated claims under ERISA in Counts II through VI, and that Amgen was a properly named fiduciary under the Amgen Plan. Therefore, the court reversed the decision of the district court and remanded for further proceedings. View "Harris v. Amgen" on Justia Law

Hakim was an Accenture employee for nearly 10 years before being let go as part of a workforce reduction. During part of his tenure with the company, he participated in the company’s pension plan. In 1996, Accenture amended the plan to exclude a number of employees in various departments. In 1999, Hakim was promoted to a position in which he was no longer eligible to participate in the plan under the terms of the 1996 amendment. Upon his 2003 termination, at age 39, Hakim signed a release in exchange for separation benefits that waived all claims that arose prior to signing the release. In 2008, while employed elsewhere, Hakim sought additional pension benefits from Accenture, arguing that the notice of the 1996 amendment to the plan (which was emailed to employees) was insufficient and violated ERISA’s notice requirements, 29 U.S.C. 1054(h). His claim was denied by Accenture. The district court granted summary judgment in favor of Accenture, holding that Hakim knew or should have known about his claim when he signed the release, and thus waived his claim. The Seventh Circuit affirmed. View "Hakim v. Accenture U.S. Pension Plan" on Justia Law

Johnson, sole administrator of the Shirley T. Sherrod Benefit Pension Plan and Trust, sued the Plan’s custodian, Merrill Lynch, alleging that Merrill Lynch refused to abide by his instructions and has exercised control over Plan assets by refusing to make distribution to Sherrod. The Plan is a single-participant retirement account, exempt from garnishment under the anti-alienation provision of the Employment Retirement Income Security Act, 29 U.S.C. 1056(d). There is a freeze on the account, as a result of a Michigan state court order in a post-judgment collection proceeding. The district court dismissed for lack of subject-matter jurisdiction. The Seventh Circuit affirmed, holding that any harm is traceable to the state court order, not to Merrill Lynch. View "Johnson v. Merrill Lynch, Pierce, Fenner & Smith, Inc." on Justia Law