Justia ERISA Opinion Summaries

The plaintiffs, former employees at Honeywell’s Boyne City, Michigan auto parts plant, were represented by the UAW while working. The collective bargaining agreement (CBA) between that union and Honeywell that became effective in 2011 and expired in 2016 stated: Retirees under age 65 who are covered under the BC/BS Preferred Medical Plan will continue to be covered under the Plan, until age 65, by payment of 16% of the retiree monthly premium costs ... as adjusted year to year,” Article 19.7.4. The plaintiffs took early retirement under the 2011 CBA and received Honeywell-sponsored healthcare, consistent with Article 19.7.4. Other Boyne City employees had retired before the 2011 CBA took effect, but were still eligible for benefits under Article 19.7.4. In 2015, Honeywell notified the UAW and the Boyne City retirees that it planned to terminate retiree medical benefits upon the 2011 CBA’s expiration. The plaintiffs, citing the Labor Management Relations Act, the Employment Retirement Income Security Act, and Michigan common law estoppel, obtained a preliminary injunction. The Sixth Circuit reversed, reasoning that the CBA did not clearly provide an alternative end date to the CBA’s general durational clause, so the plaintiffs have not shown a likelihood of success on the merits. View "Cooper v. Honeywell International, Inc." on Justia Law

Cincinnati ordinances provide guidelines for selecting the “lowest and best bidder” on Department of Sewers projects to “ensure efficient use of taxpayer dollars, minimize waste, and promote worker safety and fair treatment of workers” and for bids for “Greater Cincinnati Water Works and the stormwater management utility division,” to employ skilled contractors, committed to the city’s “safety, quality, time, and budgetary concerns.” Allied alleged that the Employee Retirement Income Security Act (ERISA) preempted: a requirement that the bidder certify whether it contributes to a health care plan for employees working on the project as part of the employee’s regular compensation; a requirement that the bidder similarly certify whether it contributes to an employee pension or retirement program; and imposition of an apprenticeship standard. Allied asserts that the only apprenticeship program that meets that requirement is the Union’s apprenticeship program, which is not available to non-Union contractors. The ordinances also require the winning contractor to pay $.10 per hour per worker into a city-managed pre-apprenticeship training fund, not to be taken from fringe benefits. The district court granted Allied summary judgment. The Sixth Circuit reversed. Where a state or municipality acts as a proprietor rather than a regulator, it is not subject to ERISA preemption. The city was a market participant here: the benefit-certification requirements and the apprenticeship requirements reflect its interests in the efficient procurement of goods and services. View "Allied Construction Industries v. City of Cincinnati" on Justia Law

Life Insurance Company of North America’s terminated plaintiff-appellant Carl Van Steen’s long-term disability benefits under Lockheed Martin’s ERISA Plan. Life Insurance Company of North America (LINA) appealed the district court’s finding that its decision to terminate Van Steen’s benefits was arbitrary and capricious. Van Steen, in turn, appealed the district court’s denial of his attorney’s fees request. Van Steen was physically assaulted during an altercation while walking his dog. The assault resulted in a mild traumatic brain injury (mTBI) that impacted Van Steen’s cognitive abilities that prevented him from returning to full time work; Van Steen was eventually allowed to return to part-time work on a daily basis roughly six weeks later. Even on a part-time schedule, Van Steen experienced cognitive fatigue and headaches that required him to frequently rest. Due to his inability to stay organized and keep track of deadlines after the assault, Van Steen received poor feedback on his job performance. Van Steen’s claim for partial long-term disability benefits was approved on March 30, 2012. Roughly a year later, LINA reviewed Van Steen’s file, contacted his doctors, and confirmed that Van Steen’s condition and restrictions were permanent as he was “not likely to improve.” Despite this prognosis, LINA sent Van Steen a letter one week later terminating his long-term disability benefits, explaining that “the medical documentation on file does not continue to support the current restrictions and limitations to preclude you from resuming a full-time work schedule.” Having exhausted his administrative appeals under the Plan, Van Steen next sought relief before the district court. The district court reversed LINA’s decision to terminate Van Steen’s partial long-term disability benefits on the grounds that it was arbitrary and capricious, but denied Van Steen’s request for attorney’s fees. The Tenth Circuit agreed with the district court’s reversal of LINA’s decision to terminate Van Steen’s coverage. The Court also found that Van Steen was not eligible for attorney fees: “Van Steen’s arguments fail to convince us that the district court’s decision was based on a clear error of judgment or exceeded the bounds of permissible choice.” View "Van Steen v. Life Insurance Company N.A." on Justia Law

The Employee Retirement Income Security Act of 1974 (ERISA), generally exempts from its requirements “church plans”: employee-benefit plans established and maintained by churches for their employees. ERISA also extends that church-plan exemption to "principal-purpose" organizations. Catholic Health Initiatives (CHI), a nonprofit organization created to carry out the Roman Catholic Church’s healing ministry, operates 92 hospitals and numerous other healthcare facilities in 18 states. CHI offers a retirement plan for its employees, with more than 90,000 participants and beneficiaries, and nearly $3 billion in plan assets. Janeen Medina, a CHI employee, filed a class action, alleging that CHI’s retirement plan failed to satisfy the statutory criteria for the church-plan exemption. She contended that, since the plan did not qualify for the exemption, CHI should have complied with the reporting and funding requirements of ERISA. Medina also argued the individual defendants who administered the plan breached their fiduciary duties by failing to comply with ERISA. And, Medina argued, even if the CHI plan did qualify as a church plan, the exemption violated the Establishment Clause of the United States Constitution. The district court held that CHI’s plan was a church plan that qualified for the ERISA exemption. On appeal, the Tenth Circuit agreed, concluding that CHI’s plan satisfied the statutory requirements for the church-plan exemption as a proper principal-purpose organization. The ERISA exemption, moreover, does not run afoul of the United States Constitution’s Establishment Clause. View "Medina v. Catholic Health Initiatives" on Justia Law

Under the Multiemployer Pension Plan Amendments Act, part of ERISA, a construction industry employer who withdraws from a multiemployer pension plan owes liability to that plan if the employer conducts work “in the jurisdiction of the collective bargaining agreement (CBA) of the type for which contributions were previously required,” 29 U.S.C. 1383(b)(2)(B)(i). The Iron Workers Local 17 Pension Fund assessed pension liability against Stevens Engineers claiming that Stevens’s activities on a certain construction project involved such work within the jurisdiction of their previous CBA. An arbitrator, the district court, and the Sixth Circuit found that Stevens did not owe pension liability to the Fund because the work identified by Local 17 did not fall within the jurisdiction of the relevant CBA, and did not otherwise require contributions by Stevens. The CBA instead allowed Stevens to assign jobs like the ones at issue to other trade unions, and a job did not trigger pension liability to the Fund if, as here, it was properly assigned to a different union. View "Stevens Engineers & Constructors, Inc. v. Local 17 Iron Workers Pension Fund" on Justia Law

This case arose out of an underlying action to enforce the health benefits provisions of two court-approved settlement agreements. The Fourth Circuit affirmed the district court's denial of plaintiffs' motion for a preliminary injunction. The court held that a motion for preliminary injunction filed before the act to be enjoined has occurred, and subsequently intended to restore the status quo once it has been disturbed, was not moot. The court also held that the district court had jurisdiction over plaintiffs' claim pursuant to Section 502(a)(1)(B) of the Employee Retirement Income Security Act (ERISA). On the merits, the court held that the district court did not abuse its discretion in finding that plaintiffs failed to demonstrate a likelihood of success on the merits; that they were likely to suffer irreparable harm without a preliminary injunction; and that the balance of the equities and the public interest favor an injunction. View "Di Biase v. SPX Corp." on Justia Law

Plaintiffs, retired officers of Booz Allen, filed suit alleging that they were improperly denied compensation when, after their retirement, Booz Allen sold one of its divisions in the Carlyle Transaction. The Second Circuit affirmed the district court's dismissal of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., claims on the ground that Booz Allen's stock-distribution program was not a pension plan within the meaning of ERISA, and denial as futile leave to amend to "augment" the ERISA claims with new allegations; affirmed the dismissal of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., claims on the ground that they were barred by the Private Securities Litigation Reform Act of 1995 (PSLRA), 18 U.S.C. 1964(c); but vacated the district court's judgment to the extent it denied Plaintiff Kocourek leave to amend to add securities-fraud causes of action. The court remanded for the district court to consider his claims. View "Pasternack v. Shrader" on Justia Law

Former employees of World Airways challenged the dismissal of their complaint seeking damages for fraud, breach of contract and violation of an employee benefit plan. The Second Circuit agreed with the district court that plaintiffs' state law claims arose under the Railway Labor Act (RLA), 45 U.S.C. 151 et seq., and were thus preempted. Because those claims bear a close resemblance to claims brought pursuant to the Employee Retirement Income Securities Act (ERISA), 29 U.S.C. 1001 et seq., the court found it appropriate to borrow and apply the three‐year statute of limitations set forth in Section 1113 of ERISA rather than the six‐month limitations period the district court borrowed from Section 10(b) of the National Labor Relations Act (NLRA), 29 U.S.C.160(b). Accordingly, the court vacated the dismissal of the RLA claims and remanded for further consideration. The court affirmed in all other respects. View "Pruter v. Local 210’s Pension Trust Fund" on Justia Law

The Pioneer Centres Holding Company Employee Stock Ownership Plan and Trust and its trustees sued Alerus Financial, N.A. for breach of fiduciary duty in connection with the failure of a proposed employee stock purchase. The district court granted summary judgment to Alerus after determining the evidence of causation did not rise above speculation. The Plan appealed, claiming the district court erred in placing the burden to prove causation on the Plan rather than shifting the burden to Alerus to disprove causation once the Plan made out its prima facie case. In the alternative, the Plan argued that even if the district court correctly assigned the burden of proof, the Plan established, or at the very least raised a genuine issue of material fact regarding, causation. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Pioneer Centres Holding Co v. Alerus Financial, N.A." on Justia Law

Plaintiffs, CNH employees who retired between 1994 and 2004, filed suit in 2004, seeking a declaration that they were entitled to lifetime healthcare benefits without paying premiums, based on collective-bargaining agreements (CBAs), negotiated by UAW beginning in 1971. The case was remanded to the district court twice. While the second remand was pending, the Supreme Court (Tackett, 2015) abrogated Sixth Circuit precedent creating an inference in favor of employees in collective-bargaining cases. Initially, the district court ruled in favor of CNH, noting that it was “[c]onstrained by the Supreme Court’s decision” in Tackett. On reconsideration, the district court found not only that plaintiffs’ rights were vested even after Tackett, but also that CNH’s proposed changes were unreasonable. The Sixth Circuit affirmed as to vesting, noting that the CBA is ambiguous and extrinsic evidence indicated that parties intended for the healthcare benefits to vest for life. The court remanded because the court failed to properly weigh the costs and the benefits of the proposed plan, as previously instructed. “To find ambiguity in this case, partially from the silence as to the parties’ intentions, does not offend the Supreme Court’s mandate from Tackett that we not infer vesting from silence.” View "Reese v. CNH Industrial, N.V." on Justia Law