Justia ERISA Opinion Summaries

Corey worked as a machine operator in Eaton’s Ohio factory. Corey has long suffered from cluster headaches— extremely painful attacks that strike several times per day for weeks on end. In 2014, Corey applied for short-term disability benefits under Eaton’s disability plan after a bout of headaches forced him to miss work. After granting a period of disability, the third party administering Eaton’s disability plan discontinued benefits because Corey failed to provide objective findings of disability. Under the plan, “[o]bjective findings include . . . [m]edications and/or treatment plan.” Corey’s physicians treated his headaches by prescribing prednisone, injecting Imitrex (a headache medication), administering oxygen therapy, and performing an occipital nerve block. The district court upheld the denial. The Sixth Circuit reversed, citing the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B). Corey’s medication and treatment plan satisfy the plan’s objective findings requirement. View "Corey v. Sedgwick Claims Management Services, Inc." on Justia Law

3M filed an insurance claim to recover losses incurred on a number of investments due to fraud perpetrated by its own investment advisors. The Eighth Circuit affirmed the district court's grant of summary judgment to the Insurers, holding that the ownership requirement of Endorsement 8 applies to the Employee Dishonesty provision. Therefore, 3M does not own the stolen earnings and cannot seek coverage for the earnings under the Policy. Until the earnings were distributed to the partners, the stolen earnings were property of WG Trading, not 3M. The court explained that it is fundamental that property acquired with partnership funds is partnership property, and individual partners do not own partnership assets until the winding up of the partnership. Finally, the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., does not alter general commercial property rights, but merely defines the nature and scope of the fiduciary duties owed to plan participants. View "3M v. National Union Fire Insurance" on Justia Law

Seventh Circuit affirms award of permanent disability benefits for fibromyalgia.Kennedy was hired by Lilly in 1982 and became an executive director in Lilly’s human resources division, with a monthly salary of $25,011. In 2008, she quit work because of disabling symptoms of fibromyalgia. She was approved for monthly benefits of $18,972 under the company’s Extended Disability Benefits plan. Three and a half years later her benefits were terminated. Kennedy sued under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. The Seventh Circuit affirmed summary judgment in favor of Kennedy, with an award of $537,843.81 in past benefits and prejudgment interest and reinstatement of benefits. The court characterized Lilly’s evidence as “a hodgepodge” and noted that Lilly did not indicate what kind of work Kennedy would be able to perform. Kennedy’s general internist testified that she is permanently disabled, basing this opinion on his diagnoses of her nonarticular rheumatism (musculoskeletal aches and pains not traceable to joints), fibromyalgia, sleep disorder, depression, irritable bowel syndrome, restless leg syndrome, and her symptoms of pain and fatigue. Her rheumatologist concurred. The court noted the company’s conflict of interest, being both the initial adjudicator of an employee’s benefits claim and the payor of those benefits. View "Kennedy v. Lilly Extended Disability Plan" on Justia Law

Prather, age 31, tore his Achilles tendon. His surgery to repair the injury was uneventful. He returned to work. Four days later he collapsed, went into cardiopulmonary arrest, and died as a result of a blood clot in the injured leg that had traveled to a lung. Prather’s widow applied for benefits under his Sun Life group insurance policy (29 U.S.C. 1132(a)(1)), which limited coverage to “bodily injuries ... that result directly from an accident and independently of all other causes.” Sun Life refused to pay. The Seventh Circuit ruled in favor of Prather’s widow, noting that deep vein thrombosis and pulmonary embolism are risks of surgery, but that even with conservative treatment, such as immobilization of the affected limb, the insured had an enhanced risk of a blood clot. The forensic pathologist who conducted a post-mortem examination of Prather did not attribute his death to the surgery. Prather’s widow then sought attorneys’ fees of $37,170 under ERISA, 29 U.S.C. 1132(g)(1). The Seventh Circuit awarded $30,380, stating that there is no doubt of Sun Life’s culpability or of its ability to pay without jeopardizing its existence; the award of attorneys’ fees is likely to give other insurance companies in comparable cases pause; and a comparison of the relative merits of the contending parties clearly favors the plaintiff. View "Prather v. Sun Life Financial Insurance Co." on Justia Law

As a nurse at the University of Louisville Hospital, Milby was covered by a long-term disability insurance policy. In 2011, Milby sought and received disability benefits for 17 months. During a subsequent eligibility review, the plan engaged MCMC, a third-party reviewer. MCMC opined that the “opinions of [Milby’s treating physicians] are not supported by the available medical documentation” and that she could perform sustained full-time work without restrictions as of 2/22/2013. Neither MCMC nor its agent was licensed to practice medicine in Kentucky. The plan terminated Milby’s benefits effective February 2013. Milby’s suit against her disability insurance provider remains pending. She also filed suit alleging negligence per se against MCMC for practicing medicine in Kentucky without appropriate licenses. MCMC removed the case to federal court, claiming complete preemption under the Employee Retirement Income Security Act (ERISA). The trial court denied Milby’s motion for remand to state court and dismissed. The Sixth Circuit affirmed. The state-law claim fits in the category of claims that are completely preempted by ERISA: it is in essence about the denial of benefits under an ERISA plan and the defendant does not owe an independent duty to the plaintiff because the defendants were not practicing medicine under the specified Kentucky law. View "Milby v. MCMC, LLC" on Justia Law

Fleet Owners Fund is a multi-employer “welfare benefit plan” under the Employee Retirement Security Act (ERISA), 29 U.S.C. 1001, and a “group health plan” under the Patient Protection and Affordable Care Act (ACA), 26 U.S.C. 5000A. Superior Dairy contracted with Fleet for employee medical insurance; the Participation Agreement incorporated by reference a 2002 Agreement. In a purported class action, Superior and its employee alleged that, before entering into the Agreement, it received assurances from Fleet Owners and plan trustees, that the plan would comply in all respects with federal law, including ERISA and the ACA. Plaintiffs claim that, notwithstanding the ACA’s statutory requirement that all group health plans eliminate per-participant and per-beneficiary pecuniary caps for both annual and lifetime benefits, the plan maintains such restrictions and that Superior purchased supplemental health insurance benefits to fully cover its employees. Fleet argued that the plan is exempt from such requirements as a “grandfathered” plan. The district court dismissed the seven-count complaint. The Sixth Circuit affirmed, concluding that plaintiffs lacked standing to bring claims under ERISA and ACA, having failed to allege concrete injury, and did not allege specific false statements. View "Soehnlen v. Fleet Owners Insurance Fund" on Justia Law

While working at a subsidiary of General Dynamics Corporation (GDC), Plaintiff participated in GDC’s long-term disability (LTD) plan, which was funded and administered by Aetna Life Insurance Company. Plaintiff became disabled in 2003 and applied for plan benefits. Aetna approved her claim until 2010, when it began offsetting Plaintiff’s monthly LTD benefits by her gross Social Security income. Plaintiff sued Aetna and GDC, alleging that Aetna breached its fiduciary duty and seeking a declaration that her past and future LTD benefits should be offset against the Social Security Disability Insurance (SSDI) benefits she was awarded minus any income taxes she was assessed on those benefits. The district court granted summary judgment in favor of Defendants, thus affirming Aetna’s interpretation of the plan’s offset provision. The First Circuit affirmed, holding (1) the plan permits Aetna to offset LTD benefits by the gross amount of SSDI benefits; and (2) the district court did not err in denying discovery. View "Troiano v. Aetna Life Insurance Co." on Justia Law

Okuno was working as an art director with a clothing company when she developed symptoms including vertigo, extreme headaches, memory loss, and abdominal pain. Though she had previously been diagnosed with fibromyalgia and degenerative disc disease, Okuno contends that these maladies had been “stable and well-controlled” for years and did not prevent her from working. After visits to multiple specialists, numerous tests, and two visits to the emergency room, Okuno was eventually diagnosed with narcolepsy, Crohn’s disease, and Sjogren’s syndrome, an autoimmune disease. After diagnosis, she struggled with negative drug interactions and the side effects associated with her many treatments. Unable to continue working, Okuno went on short-term disability and applied for benefits under her employer’s long-term disability plan, issued and administrated by Reliance. Reliance denied the application on the basis that depression and anxiety contributed to Okuno’s disabling conditions. After exhausting her administrative appeals, Okuno brought a claim under the Employee Retirement Income Security Act (ERISA). 29 U.S.C. 1132(a)(1)(B). The district court found in favor of Reliance on cross-motions for judgment on the administrative record. The Sixth Circuit reversed, reasoning that her physical ailments, including Crohn’s disease, narcolepsy, and Sjogren’s syndrome, are disabling when considered apart from any mental component. View "Okuno v. Reliance Standard Life Ins. Co." on Justia Law

In 1991 Cheney began working as an attorney at Kirkland. She became a partner in 1997. She suffered from a spinal disease that led her to seek ergonomic accommodations in 1994 and ultimately resulted in a three‐level anterior cervical discectomy and fusion and removal of her C5 vertebra. After making various accommodations, the firm approved a leave, from January 3, until July of 2012. Her last day of work was December 19, 2011. On April 17, 2012, Cheney's neurosurgeon advised her to complete a 12‐week intensive physical therapy program and receive cervical epidural injection therapy. After the program failed to improve Cheney’s condition, the neurosurgeon recommended cervical spinal fusion surgery, which Cheney received on August 27. Cheney submitted her claim for long‐term disability benefits on July 17, before the surgery. Kirkland’s insurer denied her claim, stating that her coverage had ended in March because she was able, through March, to perform her job. Cheney sued under the Employee Retirement Income Security Act, 29 U.S.C. 1132. The court found in favor of Cheney. The Seventh Circuit vacated, finding that the district court made unsupported factual findings and misinterpreted the governing documents relating to whether Cheney’s situation fell within allowable absences from “active work.” View "Cheney v. Standard Ins. Co." on Justia Law

Harrogate, a healthcare provider, participates in Blue Cross networks. Harrogate’s patients sign an “Assignment of Benefits,” allowing Harrogate to bill Blue Cross directly for services. The Provider Agreement allows Blue Cross to perform post-payment audits and recoup overpayments from Harrogate. Blue Cross paid Harrogate's claims for antigen leukocyte cellular antibody (ALCAT) tests, which purport to identify certain food allergies. Blue Cross claims that these tests have “little or no scientific rationale.” Investigational treatments are not “covered, compensable services” under Blue Cross’s Manual, which is incorporated by reference into the Provider Agreement. That Agreement also specifies that Harrogate may not “back-bill” patients for un-reimbursed, investigational treatments unless, before rendering such services, “the Provider has entered into a procedure-specific written agreement with the Member, which has advised the Member of his/her payment responsibilities.” Blue Cross began recouping ALCAT payments. Harrogate filed suit under the Employee Retirement Income Security Act. The district court dismissed, holding that Harrogate did not meet the statutory definition of “beneficiary” and had not received a valid assignment for the purpose of conferring derivative standing to bring suit under ERISA. The Seventh Circuit affirmed. While Harrogate had derivative standing through an assignment of benefits, its claim regarding recoupments falls outside the scope of that assignment. View "Brown v. BlueCross BlueShield of Tenn., Inc." on Justia Law