Justia ERISA Opinion Summaries

Like many Michigan municipalities, Pontiac has experienced significant economic difficulties, especially since 2008. Michigan’s Governor appointed Schimmel as Pontiac’s emergency manager. Acting under Michigan’s then-existing emergency manager law (Public Act 4), in 2011, Schimmel modified the collective bargaining agreements of Pontiac’s retired employees and modified severance benefits, including pension benefits, that Pontiac had given retirees not covered by collective bargaining agreements. The retired employees claim that Schimmel and Pontiac violated their rights under the Contracts Clause, the Due Process Clause, and the Bankruptcy Clause. The district court denied the retirees an injunction. The Sixth Circuit vacated and remanded for expedited consideration of state law issues. Michigan voters have since rejected Public Act 4 by referendum, which may have rendered Schimmel’s actions void.The court also questioned whether two-thirds of both houses of the Michigan Legislature voted to make Public Act 4 immediately effective. The court noted that similar issues face many Michigan municipalities. View "City of Pontiac Retired Emps. Ass'n v. Schimmel" on Justia Law

Plaintiff was a partner in a medical practice where she served as a staff anesthesiologist. When Plaintiff's dependence on opioids came to light, her employer had in force a group employee benefit plan, underwritten and administered by Union Security Insurance Company & Management Company for Merrimack Anesthesia Associates Long Term Disability Plan (USIC), which included long-term disability (LTD) benefits. When Plaintiff applied for those benefits, USIC refused to pay benefits past the point when Plaintiff was discharged from a treatment center, finding that Plaintiff's risk for relapse was not the same as a current disability. Plaintiff brought suit in the federal district court. The district court ultimately awarded Plaintiff LTD benefits for the maximum time available under the plan, concluding that categorically excluding the risk of drug abuse relapse was an unreasonable interpretation of the plan. The First Circuit Court of Appeals affirmed, holding that, in an addiction context, a risk of relapse can be so significant as to constitute a current disability. View "Colby v. Union Sec. Ins. Co." on Justia Law

Aetna Life Insurance Company, as the plan administrator, determined Sharon Wade was no longer disabled and stopped paying long-term disability benefits from Wade's former employer's welfare benefit plan. Wade sought judicial review of Aetna's decision by filing a civil action under ERISA. The district court granted summary judgment in favor of Aetna, concluding that Aetna did not abuse its discretion in terminating Wade's benefits because substantial evidence supported the decision. The Eighth Circuit Court of Appeals affirmed, holding that the district court (1) applied the appropriate standard of review; (2) gave appropriate weight to the Social Security Administration's grant of long-term disability benefits to Wade; and (3) did not abuse its discretion by determining substantial evidence supported Aetna's termination of benefits. View "Wade v. Aetna Life Ins. Co." on Justia Law

DIRECTV sold business segments. In 1997 it sold defense units to Raytheon, transferring $5,774,655,148 in pension assets and $3,310,028,559 in pension liabilities, a net transfer of $2,464,626,589 in surplus pension assets. In a 2000 sale of satellite business units to Boeing, DIRECTV transferred $1,843,930,981 in pension assets and $1,037,344,156 in liabilities, a net transfer of $806,586,825 in surplus assets. In both transactions, DIRECTV retained a small portion of surplus pension assets. The Government asserted noncompliance with Cost Accounting Standard 413.50(c)(12) (41 U.S.C. 422(f)(1)), which regulates assignment of actuarial gains and losses, valuation of assets of a pension fund, and allocation of pension costs to a contractor’s business segments, and demanded payments of $68,695,891 and of $12,197,704. The Court of Federal Claims granted DIRECTV summary judgment. The Federal Circuit affirmed. The claims court correctly determined that DIRECTV's segment closing obligations could be satisfied by cost savings realized by the Government in successor contracts. The court rejected arguments that the trial court erred by calculating segment closing adjustments based on assets and liabilities of the entire segment, rather than only assets and liabilities that DIRECTV retained and that the Federal Acquisition Regulation required DIRECTV itself to pay any amount due as a segment closing adjustment.View "DIRECTV Group, Inc. v. United States" on Justia Law

Plaintiff-Appellant Eugene S. appealed a district court's denial of his motion to strike and its entry of summary judgment in favor of Defendant-Appellee Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ). Plaintiff sought coverage for his son A.S.'s residential treatment costs from his employer's ERISA benefits insurer. Horizon's delegated plan administrator originally denied the claim. Having exhausted his administrative appeals, Plaintiff filed suit in district court challenging the denial of benefits. The parties filed cross-motions for summary judgment, but Horizon also filed a declaration that included the terms of Horizon's delegation of authority to the plan administrator to administer mental health claims in a Vendor Services Agreement. Plaintiff moved to strike that declaration as procedurally barred. The district court denied the motion and granted Horizon summary judgment, finding that neither Horizon nor its plan administrator acted in an arbitrary or capricious manner in denying the contested claim. Upon review, the Tenth Circuit found substantial evidence in the record that A.S. did not meet the criteria for residential treatment benefits under the plan, and as such, the plan administrator did not act in an arbitrary or capricious manner in denying Plaintiff's claim. The Court affirmed the district court's judgment. View "Eugene S. v. Horizon Blue Cross Blue Shield" on Justia Law

Appellant appealed the district court's grant of summary judgment in favor of Sun Life in an Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., benefits case. At issue was whether Sun Life was entitled to offset from appellant's employer-provided long-term disability benefits the amount that appellant received in Department of Veterans Affairs (VA) benefits each month. The court held that VA benefits, for a wartime service-related disability, as a matter of statutory construction, did not derive from an act that was "similar to" the SSA or RRA, which were both federal insurance programs based upon employment and the amount of an award under their terms depended upon how much had been paid in. Accordingly, the court reversed and remanded to the district court with directions to enter judgment in favor of appellant. View "Riley v. Sun Life and Health Ins., et al." on Justia Law