Justia ERISA Opinion Summaries

Respondents, on behalf of beneficiaries of the CIGNA Corporation's ("CIGNA") Pension Plan, challenged the new plan's adoption, claiming that CIGNA's notice of the changes was improper, particularly because the new plan in certain respects provided them with less generous benefits. At issue was whether the district court applied the correct legal standard, namely, a "likely harm" standard, in determining that CIGNA's notice violations caused its employees sufficient injury to warrant legal relief. The Court held that although section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1022(a), 1024(b), 1054(h), did not give the district court authority to reform CIGNA's plan, relief was authorized by section 502(a)(3), which allowed a participant, beneficiary, or fiduciary "to obtain other appropriate relief" to redress violations of ERISA "or the [plan's] terms." The Court also held that, because section 502(a)(3) authorized "appropriate equitable relief" for violations of ERISA, the relevant standard of harm would depend on the equitable theory by which the district court provided relief. Therefore, the Court vacated and remanded for further proceedings. View "CIGNA Corp. v. Amara et al." on Justia Law

In 1999 Brooks, an assembly-line operator for Prairie Packaging, was seriously injured on the job and lost his left hand, wrist, and forearm. He filed a workers’ compensation claim seeking recovery for permanent and total disability, which remains pending. Prairie treated Brooks as a disabled employee on a company-approved leave of absence, so that he continued to receive healthcare coverage. Pactiv acquired Prairie in 2007 and continued this arrangement. In 2010 Pactiv sent Brooks a letter instructing him to submit documents verifying his ability to return to work; failure to submit would mean termination of employment. Because his injury was totally disabling, Brooks did not submit verification and Pactiv fired him; he lost his healthcare coverage under the employee-benefits plan. Brooks sued Pactiv and Prairie under the Employee Retirement Income Security Act, 29 U.S.C. 1001–1461, for benefits due and breach of fiduciary duty and asserted an Illinois law claim for retaliatory discharge. The district court dismissed. The Seventh Circuit affirmed with respect to ERISA because Brooks did not allege that the employee-benefits plan promised him post-employment benefits. Pactiv acted as an employer, not as a fiduciary, in terminating Brooks’s employment and cancelling his health insurance. The court reinstated the state law claim. View "Brooks v. Pactiv Corp." on Justia Law

Laskin worked for Jefco from 1966-1974 and participated in the company pension plan, accumulating a fully vested retirement account balance of $5,976.09. Soon after she left the company Laskin contacted Siegel, a trustee of the pension plan, and asked whether she could withdraw the funds to buy real estate. Siegel sent Laskin a letter explaining that her account would accrue interest at the passbook rate and that the plan had been amended in 1975, raising the retirement eligibility age from 55 to 65. Over the next 10 years, Laskin received statements, indicating that she was receiving from 5% to 5.5% interest on her balance. In 1988, a statement indicated that her balance was $12,602.86. The pension plan dissolved on December 31, 1991. In 2008, Laskin contacted Siegel’s son (who had purchased his father’s interest in Jefco) and was told that pension funds had been completely disbursed and that she did not receive a payout because she could not be located. The district court dismissed her claims as barred by the limitations period in the Employee Retirement Income Security Act, 29 U.S.C. 1113. The Seventh Circuit affirmed. View "Laskin v. Siegel" on Justia Law

Laskin worked for Jefco from 1966-1974 and participated in the company pension plan, accumulating a fully vested retirement account balance of $5,976.09. Soon after she left the company Laskin contacted Siegel, a trustee of the pension plan, and asked whether she could withdraw the funds to buy real estate. Siegel sent Laskin a letter explaining that her account would accrue interest at the passbook rate and that the plan had been amended in 1975, raising the retirement eligibility age from 55 to 65. Over the next 10 years, Laskin received statements, indicating that she was receiving from 5% to 5.5% interest on her balance. In 1988, a statement indicated that her balance was $12,602.86. The pension plan dissolved on December 31, 1991. In 2008, Laskin contacted Siegel’s son (who had purchased his father’s interest in Jefco) and was told that pension funds had been completely disbursed and that she did not receive a payout because she could not be located. The district court dismissed her claims as barred by the limitations period in the Employee Retirement Income Security Act, 29 U.S.C. 1113. The Seventh Circuit affirmed. View "Laskin v. Siegel" on Justia Law

Plaintiffs filed suit against their former employer seeking deferred compensation payments. The district court held that plaintiffs' deferred compensation arrangements in their Employment Agreement contracts with the employer constituted a plan under the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Because plaintiffs' deferred compensation arrangements did not necessitate an ongoing administrative scheme, there was no ERISA plan. Accordingly, the court reversed and remanded, concluding that plaintiffs' state law claims were not preempted by ERISA. View "Cantrell, et al. v. Briggs & Veselka Co." on Justia Law

Debtor was required to make contributions to the Carpenters Pension Trust Fund pursuant to a multiemployer bargaining agreement (the Agreement). When the Agreement expired, debtor no longer was a signatory to a collective bargaining agreement and stopped making payments. The Fund subsequently filed suit because debtor was still doing work covered by the Agreement and was subject to withdrawal liability under 29 U.S.C. 1381. Debtor then filed for bankruptcy and sought a discharge of his debt to the Fund. The Fund filed a complaint under 11 U.S.C. 523(c) to prevent discharge, seeking to establish that the debt qualified as one created via defalcation by a fiduciary under section 523(a)(4). The court concluded that the Bankruptcy Court had jurisdiction to adjudicate the dischargeability of the Fund's claim against debtor; debtor was not a fiduciary of the Fund because the unpaid withdrawal liability was not an asset of the Fund; and debtor's failure to challenge the withdrawal liability amount in arbitration did not act as a waiver of his right to discharge the debt. Accordingly, the court affirmed the judgment. View "Carpenters Pension Trust Fund v. Moxley" on Justia Law

Appellant was placed on disability leave from work. Appellant was covered under a long term disability (LTD) policy that her employer obtained from Medical Group Insurance Services (MGIS). The policy was written by Sun Life Assurance Company (Sun Life). After leaving her job, Appellant filed a claim with MGIS seeing long term disability benefits. Sun Life denied Appellant's request for benefits. Appellant filed an action against Sun Life, asserting various state law claims. The federal district court dismissed the action based on ERISA preemption. Appellant then amended her complaint to add ERISA claims and asked the district court to apply de novo review in its evaluation of her ERISA claims. The court denied the motion and granted summary judgment for Sun Life, concluding that Sun Life's decision to deny benefits was not arbitrary and capricious, and thus complied with ERISA's requirements. The First Circuit Court of Appeals vacated the judgment, holding (1) the safe harbor exception to ERISA did not apply to the policy covering Appellant, and therefore, Appellant's state law claims were preempted; but (2) the benefits denial was subject to a de novo review, rather than the highly deferential "arbitrary and capricious" review prescribed for certain ERISA benefits decisions. Remanded. View "Gross v. Sun Life Assurance Co. of Canada" on Justia Law

Retirees, dependents of retirees, and the union filed a class action suit against the retirees’ former employer, M&G, after M&G announced that they would be required to make health care contributions. The district court found M&G liable for violating a labor agreement and an employee welfare benefit plan and ordered reinstatement of the plaintiffs to the current versions of the benefits plans they were enrolled in until 2007, to receive health care for life without contributions. The Sixth Circuit affirmed. The district court properly concluded that the retirees’ right to lifetime healthcare vested upon retirement after concluding that documents, indicating agreement between the union and the employers to “cap” health benefits and several “side” letters were not a part of the applicable labor agreements. View "Tackett v. M&G Polymers USA, LLC," on Justia Law

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

Findlay sought relief from a withdrawal liability payment it allegedly owed the pension fund under the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. 1381-1461. Findlay had ceased making contributions to a pension plan administered by the fund as the result of a labor dispute. About three months after the strike began, the fund demanded Findlay pay withdrawal liability of more than $10 million. Findlay contended that withdrawal liability was improper because withdrawal occurred as the result of a labor dispute; that despite the Act’s arbitration requirement, it should not be forced to arbitrate the dispute because the withdrawal was “union-mandated;” and that despite the Act’s interim payment requirement, it should not be forced to make interim payments because doing so would cause it to suffer irreparable harm. The district court dismissed, holding that the Act required the dispute be arbitrated, and enjoined the fund from collecting withdrawal liability payments pending arbitration. The Sixth Circuit affirmed the dismissal, but reversed the injunction, stating that creating an exception to interim payments for employers that would suffer irreparable harm would contradict the congressional purpose of protecting funds from undercapitalized or financially precarious employers. View "Findlay Truck Line, Inc. v. Cen. States SE & SW Areas Pension Fund" on Justia Law