Justia ERISA Opinion Summaries

At age 56, plaintiff left his position as a partner in a law firm and enrolled in school. Employees who depart at age 55 or older may withdraw money from the employer's retirement plan. They must pay income tax, but a 10 percent additional tax imposed on most withdrawals before age 59½ does not apply to distributions "made to an employee after separation from service after attainment of age 55," 26 U.S.C. 72(t)(1), (2)(A)(v). Plaintiff moved the funds from the plan to an individual retirement account then withdrew about $240,000. A rollover is not taxable 26 U.S.C. 402(c). Plaintiff paid income tax. The IRS claimed he owed the 10 percent additional tax, plus a penalty for substantial underpayment of taxes. The Tax Court held that he owed the tax on money not used for tuition. The Seventh Circuit affirmed; the distribution was made to an IRA, not to the employee. Section 6662 excuses the taxpayer if there was substantial authority for the tax return's treatment, but there was no authority for plaintiff's position. View "Kim v. Comm'r of Internal Revenue" on Justia Law

Plaintiffs claimed that the fiduciaries of their retirement plan violated the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., in ways that damaged their efforts to stockpile savings for their winter years. The court held that because plaintiffs have not pleaded facts establishing that defendants abused their discretion by following the Plan's directions, they have not stated a valid claim for breach of the duty of prudence. The court also held that plaintiffs have failed to state a viable breach of loyalty claim. Accordingly, the court affirmed the district court's dismissal of plaintiffs' third and last amended complaint. View "Lanfear, et al. v. Home Depot, Inc., et al." on Justia Law

A class of retirees who had worked under a collective bargaining agreement and their survivors and dependents obtained monetary damages and declaratory and injunctive relief requiring that defendants provide vested lifetime healthcare benefits to the class members depending on the relevant date of retirement (Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132(a)(1)(B); Labor-Management Relations Act, 29 U.S.C. 185). The Sixth Circuit affirmed, holding that defendant Newell Window is bound as a successor liable under earlier collective bargaining agreements to which it was not a party; that members of the plaintiff class had vested rights to company-paid health insurance and/or Medicare Part B premium reimbursements; and that the claims were not barred by the applicable six-year statute of limitations. View "Bender v. Newell Window Furnishings, Inc." on Justia Law

Plaintiff filed suit in state court pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., after Aetna terminated his long-term disability benefits under his employer-sponsored plan. Both parties moved for summary judgment, which the district court denied, concluding that relevant evidence had not been adequately addressed, and remanded the case. On appeal, the court held that the collateral order doctrine did not apply in this case and the court dismissed based on lack of subject matter jurisdiction because there was no final decision. View "Dickens v. Aetna Life Ins. Co." on Justia Law

Plaintiffs brought an enforcement suit against defendants under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001-1461. Plaintiffs alleged that defendants' practice of offering reimbursements for telephone services to retirees who lived outside of defendants' service region constituted a "pension plan" under ERISA. Judge Rodriquez was assigned to the claims at issue here and to Boos v. AT&T, a case involving similar claims. After ruling that the concession at issue in Boos was not a pension plan under ERISA, Judge Rodriquez reconsidered Judge Justice's interlocutory order with respect to plaintiffs' claims in this case. He concluded that the program of retirement benefits was not a pension plan under ERISA and he then entered a final judgment. Because the court concluded that Judge Rodriquez did not abuse his discretion by revising Judge Justice's interlocutory order, the court affirmed the judgment of the district court. View "Stoffels, et al. v. SBC Communications, Inc., et al." on Justia Law

Participants in an employer-sponsored 401(k) plan brought suit under the Employment Retirement Income Security Act of 1974, 29 U.S.C. 1001, and the Investment Company Act of 1940, 15 U.S.C. 80a-1, claiming excessive fees on annuity insurance contracts offered to plan participants. The district court dismissed the ICA claims because only those maintaining an ownership interest in the funds could sue under the derivative suit provision and the participants are no longer investors in the funds in question. As to the ERISA claims, the court dismissed because participants failed to make a pre-suit demand upon the plan trustees to take appropriate action and failed to join the trustees as parties. The Third Circuit affirmed with regards to the ICA claims, but vacated on the ERISA counts, holding that the statute does not require pre-suit demand or joinder of trustees. View "Santomenno v. John Hancock Life Ins. Co." on Justia Law

Plaintiffs are 225 current or former employees of steel mills that have changed ownership many times. Calculation of retirement benefits changed with the changes in ownership. The employees claim that their union, employer, and plan administrator violated the Employee Retirement Income Security Act, 29 U.S.C. 1001-1461, and Ohio common law by intentionally misleading them regarding how pension benefits would be calculated, inducing some to retire early. The district court dismissed, concluding that certain ERISA claims were time-barred, that the others failed to state a claim for relief, and that the common-law claims were preempted by federal law. The Sixth Circuit affirmed. The district court properly applied a three-year limitations period to promises allegedly made in 2003. Plaintiffs did not adequately allege fraud underlying breach of fiduciary duty, nor did they establish that the union was a fiduciary. The court rejected a variety of equitable theories. View "Cataldo v. U.S. Steel Corp." on Justia Law

Northwest and the Pilots Association filed a complaint seeking a declaratory judgment that their post-bankruptcy retirement benefit plan (MP3) complied with the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1001-1461. Appellants (older Pilots) counterclaimed arguing that the MP3 retirement benefit plan violated ERISA, the Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621-634, and several state laws prohibiting age discrimination. Under the MP3, the contributions of all of the pilots were based on their protected final average earnings, which could not be calculated without the use of age. However, that did not mean that the older Pilots' contributions have been reduced because of their age. There were several factors in the MP3 that could reduce an older pilots' projected final average earnings. While promotions and pay increases were correlated with age, they were analytically distinct and therefore not reductions in contributions because of age. Service ration and the frozen Pension Plan offset also both contributed to potential differences in contribution. Finally, the court rejected older Pilots' argument that the district court improperly disregarded the declaration of their expert witness. Therefore, the court held that the MP3 did not reduce the older Pilots' benefits because of age and therefore affirmed the judgment of the district court. View "Northwest Airlines, Inc., et al. v. Phillips, et al." on Justia Law

ACS and FKI appealed the district court's decision to dismiss their suit for equitable relief under section 502(a)(3) of the Employee Retirement Income and Security Act of 1974 (ERISA), 29 U.S.C. 1132(a)(3)(B), for lack of jurisdiction. ACS and FKI argued that the district court: (1) erroneously interpreted two Supreme Court cases as requiring dismissal of their claims; (2) abused its discretion in denying their motion for a default judgment against one of the defendants; (3) should have concluded that Chapter 142 of the Texas Property Code was preempted by ERISA; and (4) should have deferred to the FKI Plan administrator's determination of liability. Pursuant to the three-part test in Bombardier Aerospace Emp. Welfare Benefit Plan v. Ferrer, Poirot, & Wansbrough, the court affirmed the district court's decision to dismiss the ERISA claims against Larry Griffin, Judith Griffith, Willie Earl Griffin (the Trustee), and the Larry Griffin Special Needs Trust for lack of jurisdiction. Accordingly, the court found it unnecessary to address the remaining arguments. View "ACS Recovery Services, Inc., et al. v. Griffin, et al." on Justia Law

In 2005, the Secretary of Labor filed suit for breach of fiduciary duty, alleging that defendants had established a health benefit plan that was a multi-employer welfare arrangement governed by the Employee Retirement Income Security Act. Defendants had retained, as compensation, a substantial portion of payments made by businesses to enroll their employees. The complaint alleged improper diversion of funds and that defendants were required by ERISA to use the assets only for the defraying reasonable plan expenses for the benefit of plan participants. The district court ruled in favor of defendants. The Third Circuit vacated, characterizing the scheme appearing to be "an aggressively marketed, but inadequately funded health benefit plan masquerading as an ERISA-exempt plan in order to evade the solvency controls imposed by state insurance regulation."View "Sec'y of Labor v. Doyle" on Justia Law