Justia ERISA Opinion Summaries

Articles Posted in Insurance Law
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The case involves two brothers, Levi and Benjamin Goldfarb, who sought payment of a $500,000 claim under an Accidental Death & Dismemberment insurance policy after their father, Dr. Alexander Goldfarb, died while mountain climbing in Pakistan. The insurer, Reliance Standard Life Insurance Company, denied the claim because the cause of Dr. Goldfarb’s death was unknown, and therefore, his beneficiaries could not show that he died by accident. The Goldfarb brothers challenged the denial in district court under the Employee Retirement Security Act.The district court ruled in favor of the Goldfarbs, stating that Dr. Goldfarb’s death was accidental and that Reliance Standard’s failure to pay the Accidental Death & Dismemberment claim was arbitrary and capricious. The court granted summary judgment to the Goldfarbs and denied Reliance Standard’s cross motion for summary judgment. Reliance Standard appealed this decision.The United States Court of Appeals for the Eleventh Circuit disagreed with the district court's decision. The appellate court found that Reliance Standard’s decision that Dr. Goldfarb’s death was not accidental under the insurance policy was supported by reasonable grounds, and the denial of the Goldfarbs’ claim for benefits was not arbitrary and capricious. Therefore, the court reversed the district court’s grant of summary judgment to the Goldfarbs and directed the court to enter judgment in Reliance Standard’s favor. View "Goldfarb v. Reliance Standard Life Insurance Co." on Justia Law

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The case involves Bristol SL Holdings, Inc., the successor-in-interest to Sure Haven, Inc., a defunct drug rehabilitation and mental health treatment center, and Cigna Health and Life Insurance Company and Cigna Behavioral Health, Inc. Bristol alleged that Sure Haven's calls to Cigna verifying out-of-network coverage and seeking authorization to provide health services created independent contractual obligations. Cigna, however, denied payment based on fee-forgiving, a practice prohibited by the health plans. Bristol brought state law claims for breach of contract and promissory estoppel against Cigna.The district court initially dismissed Bristol’s claims, but the Ninth Circuit Court of Appeals reversed the dismissal, holding that Bristol had derivative standing to sue for unpaid benefits as Sure Haven’s successor-in-interest. On remand, the district court granted Cigna’s motion for summary judgment, ruling that the Employee Retirement Income Security Act of 1974 (ERISA) preempted Bristol’s state law claims.On appeal, the Ninth Circuit Court of Appeals affirmed the district court's decision. The court held that Bristol’s state law claims were preempted by ERISA because they had both a “reference to” and an “impermissible connection with” the ERISA plans that Cigna administered. The court reasoned that Bristol’s claims were not independent of an ERISA plan because they concerned the denial of reimbursement to patients who were covered under such plans. The court also held that allowing liability on Bristol’s state law claims would interfere with nationally uniform plan administration, a central matter of plan administration. View "Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co." on Justia Law

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Donald Artz, an electric distribution controller at WEC Energy Group, retired due to multiple sclerosis (MS) and sought long-term disability benefits from a plan administered by Hartford Life and Accident Insurance Company. Hartford denied his claim, asserting that Artz was not "disabled" within the plan's definition. Artz filed a lawsuit under the Employee Retirement Income Security Act, alleging that Hartford's disability determination was arbitrary and capricious because it misconstrued the plan's terms and failed to provide a reasonable explanation for its decision.The case was initially heard in the United States District Court for the Eastern District of Wisconsin. The district court upheld the denial of benefits at summary judgment, concluding that Artz had placed too much emphasis on the duties of his specific position at WEC rather than the "essential duties" of his job in the general workplace as required by the company’s plan. The court also underscored the independent medical reviews commissioned by Hartford and found the medical evidence supported the conclusion that Artz’s MS did not prevent him from working a standard 40-hour week as a power-distribution engineer.The case was then appealed to the United States Court of Appeals for the Seventh Circuit. The appellate court affirmed the district court's decision, finding that Hartford had communicated rational reasons for its decision based on a fair reading of the plan and Artz’s medical records. The court concluded that the plan administrator provided sufficient process and that the Employee Retirement Income Security Act requires no more. The court noted that while Artz's condition was serious, the evidence did not show that the severity and persistency of his symptoms resulted in functional impairment as defined by the policy. View "Artz v. Hartford Life & Accident Insurance Company" on Justia Law

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In this case, the Plaintiff, Barbara M. Parmenter, had subscribed to a long-term care insurance policy offered by her employer, Tufts University, and underwritten by The Prudential Insurance Company of America. The policy was governed by the Employee Retirement Income Security Act of 1974. After Prudential twice increased Parmenter's premium rate payments for her policy, she sued Tufts and Prudential, alleging each breached their respective fiduciary duties owed to her when Prudential increased those rates. The defendants responded with motions to dismiss for failure to state a plausible claim. The district court granted each of their motions and Parmenter appealed.The United States Court of Appeals For the First Circuit found that the language in the policy stating that premium increases would be "subject to the approval of the Massachusetts Commissioner of Insurance" was ambiguous, and could not be definitively interpreted based solely on the pleadings and contract documents currently available. Therefore, the court reversed the district court's decision to dismiss the case against Prudential and remanded it for further proceedings.However, the court affirmed the dismissal of the case against Tufts, as Parmenter's allegations that Tufts failed to prevent the premium rate increases or monitor Prudential did not fall into one of the categories of co-fiduciary liability set forth in section 1105(a) of the Employee Retirement Income Security Act. View "Parmenter v. Prudential Ins. Co. of America" on Justia Law

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Plaintiff’s son had a rare heart condition. He died at the age of twenty-seven, awaiting a heart transplant, which Rose says that Defendants—who administered her son’s employer-based health benefits program—wrongfully denied. So she sued on behalf of his estate, seeking monetary relief under both Section 502(a)(1)(B) and Section 502(a)(3). The district court dismissed both claims. As to Plaintiff’s (a)(1)(B) claim, the court held that money was not one of the “benefits” that her son was owed “under the terms of his plan.” And, as to her (a)(3) claim, the court held that her requested monetary relief was too similar to money damages and was thus not “equitable.”   The Fourth Circuit affirmed in part and vacated in part. The court explained that the district court correctly held that money was not one of the “benefits” that Plaintiff’s son was “due” “under the terms of his plan.” So it was right to dismiss her (a)(1)(B) claim. But the court explained that it must vacate its complete dismissal of Plaintiff’s (a)(3) claim. The court explained that while the district court correctly noted that compensatory, “make-whole” monetary relief is unavailable under Section 502(a)(3), it did not consider whether Plaintiff plausibly alleged facts that would support relief “typically” available in equity. The court thus remanded for the district court to decide in the first instance whether Plaintiff can properly allege such a theory based on a Defendant’s unjust enrichment, including whether an unjust gain can be followed to “specifically identified funds that remain in Defendant’s possession” or to “traceable items that the defendant purchased with the funds.” View "Jody Rose v. PSA Airlines, Inc." on Justia Law

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Scanlon went on leave from his job as a Systems Administrator at McKesson. He requested accommodations to return to work; McKesson temporarily granted some, but not all, of them. Scanlon did not return to work but sought long-term disability insurance benefits under a McKesson group policy underwritten, insured, and administered by LINA. To meet the definition of “disabled” under the policy, an employee must be unable to perform the “material duties” of the employee’s regular occupation and earn 80% or more of the employee’s indexed earnings from working in the employee’s regular occupation. LINA denied Scanlon’s request and denied two administrative appeals after Scanlon supplied VA examination reports and letters and two residual functional capacity evaluations. LINA's medical examiners concluded that Scanlon was not entitled to benefitsIn a suit under ERISA, 29 U.S.C. 1132, the district court found that Scanlon, a veteran, suffered from myriad chronic orthopedic and sleep disorders that cause him pain and impact his daily life but found Scanlon ineligible for benefits, concluding Scanlon did not show that he cannot perform the material duties of his job. The Seventh Circuit vacated. The district court clearly erred when it failed to consider Scanlon’s inability to sit at his desk for eight hours a day as required by his occupation and his inability to perform the cognitive requirements of his job during regular work hours and in its treatment of certain medical records Scanlon provided. View "Scanlon v. Life Insurance Co. of North America" on Justia Law

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United Behavioral Health (“UBH”) appeals from the district court’s judgment finding it liable to classes of Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001 et seq. (“ERISA”) Plaintiffs under 29 U.S.C. Sections 1132(a)(1)(B) and (a)(3), as well as several pre- and posttrial orders, including class certification, summary judgment, and a remedies order. UBH contends on appeal that Plaintiffs lack Article III standing and that the district court erred at class certification and trial in several respect.   The Ninth Circuit reversed in part. The panel held that Plaintiffs had Article III standing to bring their claims. Plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits. Plaintiffs also alleged a concrete injury as to the denial of benefits claim. Further, plaintiffs alleged a particularized injury as to both claims because UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making medical necessity or coverage determinations materially affected each Plaintiff. And Plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct. The panel held that the district court did not err in certifying the three classes to pursue the fiduciary duty claim, but the panel reversed the district court’s certification of the denial of benefits classes. The panel held that, on the merits, the district court erred to the extent it determined that the ERISA plans required the Guidelines to be coextensive with generally accepted standards of care. View "DAVID WIT, ET AL V. UNITED BEHAVIORAL HEALTH" on Justia Law

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United provided Patterson's medical insurance under a plan subject to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1101. Patterson received a summary plan description, an ERISA-mandated synopsis of important plan terms but was not given a plan document with all of a plan’s governing language. The summary said that if a beneficiary recovered from a third party for an insured incident, the plan had a right to reimbursement. Patterson was injured in a traffic accident. United covered his medical expenses and notified Patterson it would invoke the reimbursement right. Patterson sued the other driver in state court and joined the plan, seeking a declaratory judgment that it had no reimbursement right. United’s lawyers claimed that no plan document existed. Patterson recovered and settled with the plan for $25,000. Months later, Patterson’s wife suffered injuries in another traffic accident. United paid her medical expenses. Patterson’s wife sued the driver in state court. She obtained a declaratory judgment after the plan's lawyers produced a plan document, stating that it took precedence over the summary and not including a reimbursement right.Patterson then filed a purported class action under ERISA, seeking the return of the $25,000. The district court dismissed the complaint. The Sixth Circuit affirmed in part. Patterson had standing to sue only on his own behalf but has cognizable claims for breach of fiduciary duty and engagement in prohibited transactions. View "Patterson v. United Healthcare Insurance Co." on Justia Law

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Plaintiff sued Reliance Standard Life Insurance Company under 29 U.S.C. Section 1132(a)(1)(B), seeking to recover long-term disability benefits. The district court granted Plaintiff’s motion for summary judgment and denied Reliance’s cross-motion. Reliance appealed, and the Eighth Circuit reversed.   The court explained that the cases cited do not demonstrate that Reliance has a history of biased claims administration. Nor do they show some other systemic flaw in its claims review process that affected Reliance’s review of Plaintiff’s claim. On the other hand, Reliance does not argue that it maintained structural separations to minimize its conflict of interest. Therefore, the conflict of interest, in this case, deserves “some weight,” but the court concluded that it does not indicate that Reliance abused its discretion. The court wrote that substantial evidence supports Reliance’s decision, and neither the decisional delay in this case nor the purported conflict of interest leads us to conclude that Reliance abused its discretion. View "Melissa McIntyre v. Reliance Standard Life" on Justia Law

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Plaintiff underwent bariatric surgery to lose weight. A few months later, Plaintiff began working for Zimmerman Transfer, Inc. and became a participant in its self-insured employee benefit plan. Zimmerman is the plan administrator, and Benefit Plan Administrators of Eau Claire, LLC (“BPA”) served as the third-party administrator until January 2020. After exhausting his administrative appeals, Plaintiff sued BPA and Zimmerman for benefits under Section 1132(a)(1)(B). He then moved for summary judgment against BPA and Zimmerman. Both Defendants filed cross-motions for summary judgment, which the district court granted.   The Eighth Circuit affirmed. The court explained that because Plaintiff’s plan specifically excludes coverage of treatment for complications of weight-reduction surgery, neither Iowa law nor the ACA requires that his treatment be covered. It is undisputed that Plaintiff’s treatment was due to a complication of his prior bariatric surgery. Thus, Iowa law and the ACA do not require that his treatment be covered. Further, the court wrote that imposing and enforcing coverage limitations, even if it results in a plan participant paying large medical bills, is not inconsistent with the plan’s goal because the plan must allocate limited resources among all plan participants. Accordingly, the court concluded that there was no abuse of discretion in denying Plaintiff’s claim for benefits because the interpretation of the plan was reasonable, and the decision to deny benefits was supported by substantial evidence. View "Darrin Shafer v. Zimmerman Transfer, Inc." on Justia Law