Justia ERISA Opinion Summaries

Northrop laid off workers in 2012 and did not provide them all with severance benefits. Its Severance Plan provides that a laid-off employee regularly scheduled to work at least 20 hours a week will receive severance benefits if that employee “received a cover memo, signed by a Vice President of Human Resources.” The plaintiffs, who did not receive this “HR Memo,” filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001– 1461.The parties agreed to have a magistrate resolve the case, 28 U.S.C. 636(c). After the suit was certified as a class action, the district judge resumed control at Northrop's request, finding that the increased stakes constituted “good cause” for withdrawing the reference. The district court granted the defendants summary judgment, ruling that the Plan gives the HR Department discretion to choose who gets severance pay.The Seventh Circuit affirmed, first finding no abuse of discretion in the withdrawal of the reference order. The Plan makes the receipt of severance benefits contingent on the receipt of an HR Memo, which the class members did not get. Welfare-benefit plans under ERISA—unlike retirement plans—need not provide for vesting, and the terms of welfare-benefit plans are entirely in the control of the entities that establish them. When making design decisions, employers may act in their own interests and may include a discretionary component. Rights under ERISA are not subject to estoppel. The plan itself—not past practice—always controls. View "Carlson v. Northrop Grumman Severance Plan" on Justia Law

The Supreme Court affirmed the judgment of the district court denying a request for a qualified domestic relations order (QDRO), holding that without a divorce or separate maintenance proceeding under Iowa Code chapter 598 Iowa district courts cannot enter QDROs for the sole purpose of transferring a plan covered by the Employee Retirement Income Security Act of 1974 (ERISA).Plaintiff sought to have her late husband's 401(k) profit-sharing plan, which was governed by ERISA, transferred into her name. To complete such a transfer, ERISA requires the parties to obtain a QDRO pursuant to Iowa domestic relations law, but at the time the petition was filed the parties were married and opposed to seeking a domestic relations order through divorce or separate maintenance proceedings. The district court refused to grant the order on the grounds that it lacked the authority to do so. The Supreme Court affirmed, holding that, in the absence of a domestic relations matter such as a divorce, married couples cannot obtain a QDRO for the sole purpose of moving funds in an ERISA plan to the non-participating spouse. View "Wallace v. Wildensee" on Justia Law

The First Circuit affirmed the judgment of the district court dismissing this action against Blue Cross Blue Shield of Massachusetts (BCBSMA) and dismissing the Massachusetts Laborers' Health and Welfare Fund's (Fund) three claims brought under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., holding that there was no error.For sixteen years, BCBSMA served under contract as a third-party administrator for a self-funded multi-employer group health plan administered by the Fund. In 2021, the Fund brought this suit alleging that, in violation of its contractual obligations, BCBSMA paid medical providers in amounts exceeding rates that BCBSMA negotiated with a network of medical providers. The district court dismissed the action under Fed. R. Civ. P. 12(b)(6) on the grounds that the Fund had failed plausibly to allege that BCBSMA was an ERISA fiduciary with respect to the actions subject to the Fund's complaint. The First Circuit affirmed, holding that the Fund's argument that BCBSMA was a fiduciary failed. View "Mass. Laborers' Health & Welfare Fund v. Blue Cross Blue Shield of Mass." on Justia Law

The trustees of three multi-employer benefit funds sued Pro Services under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and the Labor Management Relations Act (LMRA), 29 U.S.C. 141, to recover unpaid benefit contributions allegedly owed by Pro Services, an industrial contractor that supplies skilled trade workers in the construction and manufacturing industries. Under the terms of a collective bargaining agreement (CBA) and fund documents, Pro Services must contribute to the fringe benefit funds for work performed within the CBA’s Trade Jurisdiction. The Funds relied on audits conducted by a third-party firm to allege that nearly $8 million in contributions and damages arose from hours worked by 230 Full-Service Maintenance Technicians (FMTs) employed by Pro Services, from 2013-2019.The district court granted Pro Services summary judgment—it was undisputed that the FMTs worked in manufacturing, and the court concluded that the CBA covered workers in the construction industry based only on a caption in the CBA. The Sixth Circuit reversed. The standard form caption cannot be used to limit the application of the CBA’s substantive terms, without the court first finding those substantive provisions ambiguous; the CBA is unambiguous. View "Trustees of Sheet Metal Workers Local 7 v. Pro Services, Inc." on Justia Law

The Boilermaker-Blacksmith National Pension Trust Board of Trustees (“Board”) denied Plaintiff’s application for disability pension benefits under a plan governed by the Employee Retirement Income Security Act (“ERISA”). Plaintiff argued the Board’s stated reason for denying his application was unreasonable and the Board violated its fiduciary duties. The district court granted the Board’s motion for summary judgment. Plaintiff appealed.   The Eighth Circuit affirmed. The court concluded that the Board did not breach its fiduciary duty when it did not notify Plaintiff the Notice of Decision he submitted on appeal was insufficient. The initial letter the Board sent to Plaintiff noting the absence of the document clearly stated Plaintiff needed to submit a “Notice of Award.” When the plain language of the Plan and the Board’s other communications are consistent, there is no obvious unfairness to Plaintiff if his claim is denied because he submitted the wrong document. Further, the court found that there is no evidence the Board knew silence would harm Plaintiff because, in the May 2018 phone call, Plaintiff himself asked about how waiting to receive the pension would affect the annuity amount and ultimately requested estimates for retirement at later ages. Moreover, Plaintiff has not identified anything that should have caused the Board to know he misunderstood his rights. Under these circumstances, Plaintiff failed to establish a violation of the duty of loyalty. View "Adam Ruessler v. Boilermaker-Blacksmith National Pension Trust" on Justia Law

Participating employees can contribute a portion of their salary to their Retirement Plan account and Northwestern makes a matching contribution. Employees participating in the Voluntary Savings Plan also contribute a portion of their salary, but Northwestern does not make a matching contribution. Both plans allow participants to choose the investments for their accounts from options assembled by the plans’ fiduciaries. Northwestern is the administrator and designated fiduciary of both plans. The plaintiffs sued Northwestern under the Employee Retirement Income Security Act, 29 U.S.C. 1001 (ERISA).The Seventh Circuit affirmed the dismissal of the suit in 2020. The Supreme Court rejected the Seventh Circuit's reliance on a “categorical rule” that providing some low-cost options eliminates concerns about other investment options being imprudent. On remand, the Seventh Circuit reinstated claims that Northwestern failed to monitor and incurred excessive recordkeeping fees and failed to swap out retail shares for cheaper but otherwise identical institutional shares. The court again affirmed the dismissal of other claims, including a claim that Northwestern retained duplicative funds. View "Divane v. Northwestern University" on Justia Law

Plaintiff is a former federal employee and participant in a health-insurance plan (“Plan”) that is governed by the Federal Employees Health Benefits Act (“FEHBA”). The Plan stems from a contract between the federal Office of Personnel Management (“OPM”) and Blue Cross Blue Shield Association and certain of its affiliates (together, “Blue Cross”). Blue Cross administers the Plan under OPM’s supervision. Plaintiff suffered from cancer, and she asked Blue Cross whether the Plan would cover the proton therapy that her physicians recommended. Blue Cross told her the Plan did not cover that treatment. So Plaintiff chose to receive a different type of radiation treatment, one that the Plan did cover. The second-choice treatment eliminated cancer, but it also caused devastating side effects. Plaintiff then sued OPM and Blue Cross, claiming that the Plan actually does cover proton therapy. As against OPM, she seeks the “benefits” that she wanted but did not receive, as well as an injunction directing OPM to compel Blue Cross to reform its internal processes by, among other things, covering proton therapy in the Plan going forward. As against Blue Cross, she seeks monetary damages under Texas common law. The district court dismissed Plaintiff’s suit.   The Fifth Circuit affirmed. The court held that neither the advance process nor the proton-therapy guideline poses an immediate threat of injury, so injunctive relief is therefore unavailable. Further, the court found that FEHBA preempts Plaintiff’s common-law claims against Blue Cross. Accordingly, the court held that no relief is available under the relevant statutory and regulatory regime. View "Gonzalez v. Blue Cross Blue Shield" on Justia Law

Plaintiffs brought a class action under the Employee Retirement Income Security Act of 1974 ("ERISA"), arguing that Defendant Colgate-Palmolive Co. miscalculated residual annuities based on an erroneous interpretation of its retirement income plan and improperly used a pre-retirement mortality discount to calculate residual annuities, thereby working an impermissible forfeiture of benefits under ERISA. The district court granted summary judgment to Plaintiffs on these claims. Colgate appealed that order and the final judgment of the district court.   The Second Circuit affirmed. The court concluded that the text of the RAA is unambiguous and requires Colgate to calculate a member's residual annuity by subtracting the AE of LS from that member's winning annuity under Appendix C Section 2(b). Further, the court wrote that Colgate's "same-benefit" argument does not disturb our conclusion that the RAA's language is unambiguous. Because "unambiguous language in an ERISA plan must be interpreted and enforced in accordance with its plain meaning," the court affirmed the district court's grant of summary judgment to the class Plaintiffs as to Error 1. View "McCutcheon v. Colgate-Palmolive Co." on Justia Law

Plaintiffs, current and former employees of RingCentral, participated in RingCentral’s employee welfare benefits plan. The plan participated in the “Tech Benefits Program” administered by Sequoia Benefits and Insurance Services, LLC, a management and insurance brokerage company. The Tech Benefits Program was a MEWA that pooled assets from employer-sponsored plans into a trust fund for the purpose of obtaining insurance benefits for employees at large-group rates. Plaintiffs filed this putative class action on behalf of the RingCentral plan and other Tech Benefits Program participants, asserting that Sequoia owed fiduciary duties to the plan under ERISA because Sequoia allegedly exercised control over plan assets through its operation of the Tech Benefits Program. Plaintiffs alleged that Sequoia violated its fiduciary duties by receiving and retaining commission payments from insurers, which Plaintiffs regarded as kickbacks, and by negotiating allegedly excessive administrative fees with insurers, leading to higher commissions for Sequoia.   The Ninth Circuit affirmed the district court’s dismissal for lack of Article III standing. The court held that Plaintiffs failed to establish Article III standing as to either of their two theories of injury. The panel held, as to the out-of-pocket-injury theory, Plaintiffs failed to establish the injury in fact required for Article III standing because their allegations did not demonstrate that they paid higher contributions because of Sequoia’s allegedly wrongful conduct. And Plaintiffs failed to plead the third element, that their injury would likely be redressed by judicial relief. View "RACHAEL WINSOR, ET AL V. SEQUOIA BENEFITS & INSURANCE, ET AL" on Justia Law

After the decedent died, Plaintiff, his surviving spouse, filed suit seeking relief under a provision of the Employee Retirement Income Security Act allowing “a participant or beneficiary” of an employee benefit plan “to recover benefits due” “under the terms of [the] plan.” The parties submitted a joint stipulation of facts and an administrative record and cross-moved for judgment based on those undisputed materials. The district court entered judgment for Prudential. The court concluded Prudential “reasonably denied Plaintiff’s request for benefits” because “decedent received timely notice of his conversion rights” and “did not convert his life insurance to an individual policy during the conversion period.” The district court also rejected Plaintiff’s request to “apply the doctrine of equitable tolling and find that Plaintiff is entitled to the life insurance benefits she seeks.”   The Fourth Circuit affirmed. The court wrote that it agreed with the district court that the plan administrator did not abuse its discretion in concluding Plaintiff was not entitled to benefits under the terms of the plan. The court explained that “Employers have large leeway to design [employee benefit] plans as they see fit,” but “once a plan is established, the administrator’s duty is to see that the plan is maintained pursuant to that written instrument.” Here, Prudential did not abuse its discretion by fulfilling its duty here, and the district court correctly resolved the single claim before it based on the agreed-on facts and consistent with well-established law. View "Kathy Hayes v. Prudential Insurance Company of America" on Justia Law