Justia ERISA Opinion Summaries

Plaintiff sued Zurich American Life Insurance Company of New York∗ (“Zurich”) in district court challenging Zurich’s denial of long-term disability (“LTD”) benefits under the Employment Retirement Income Security Act of 1974 (“ERISA”). The parties cross-moved for judgment on the record, and the district court awarded judgment to Zurich. Plaintiff appealed.   The Fourth Circuit affirmed. The court held that Zurich’s decision to deny benefits followed a principled reasoning process and was supported by substantial evidence. The court explained that Plaintiff insists that Zurich abused its discretion by failing to evaluate his particular job responsibilities in determining his disability status. The court explained that Plaintiff misunderstands what the Plan requires. The Plan defines “Regular Occupation” as “the occupation [the employee is] routinely performing when [his] disability begins.” And the Plan explains that Zurich “will look at [the employee’s] occupation as it is normally performed in the national economy, instead of how the work tasks are performed for a specific employer or at a specific location.” Of note, Zurich completed and considered a “Physical Requirements and Job Demand Analysis” that evaluated Plaintiff’s job responsibilities. That analysis concluded that his writer/editor position was a sedentary one that required minimal physical exertion. Under the Plan, it was Plaintiff’s burden, not Zurich’s, to provide “written proof of [his] claim for disability benefits.” Thus, Zurich did not abuse its discretion by not obtaining additional vocational evidence, as neither the Plan nor case law affirmatively requires it to have done so. View "Kevin Geiger v. Zurich American Insurance Company" on Justia Law

Northrop laid off workers in 2012 and did not provide them all with severance benefits. Its Severance Plan provides that a laid-off employee regularly scheduled to work at least 20 hours a week will receive severance benefits if that employee “received a cover memo, signed by a Vice President of Human Resources.” The plaintiffs, who did not receive this “HR Memo,” filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001– 1461.The parties agreed to have a magistrate resolve the case, 28 U.S.C. 636(c). After the suit was certified as a class action, the district judge resumed control at Northrop's request, finding that the increased stakes constituted “good cause” for withdrawing the reference. The district court granted the defendants summary judgment, ruling that the Plan gives the HR Department discretion to choose who gets severance pay.The Seventh Circuit affirmed, first finding no abuse of discretion in the withdrawal of the reference order. The Plan makes the receipt of severance benefits contingent on the receipt of an HR Memo, which the class members did not get. Welfare-benefit plans under ERISA—unlike retirement plans—need not provide for vesting, and the terms of welfare-benefit plans are entirely in the control of the entities that establish them. When making design decisions, employers may act in their own interests and may include a discretionary component. Rights under ERISA are not subject to estoppel. The plan itself—not past practice—always controls. View "Carlson v. Northrop Grumman Severance Plan" on Justia Law

The trustees of three multi-employer benefit funds sued Pro Services under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and the Labor Management Relations Act (LMRA), 29 U.S.C. 141, to recover unpaid benefit contributions allegedly owed by Pro Services, an industrial contractor that supplies skilled trade workers in the construction and manufacturing industries. Under the terms of a collective bargaining agreement (CBA) and fund documents, Pro Services must contribute to the fringe benefit funds for work performed within the CBA’s Trade Jurisdiction. The Funds relied on audits conducted by a third-party firm to allege that nearly $8 million in contributions and damages arose from hours worked by 230 Full-Service Maintenance Technicians (FMTs) employed by Pro Services, from 2013-2019.The district court granted Pro Services summary judgment—it was undisputed that the FMTs worked in manufacturing, and the court concluded that the CBA covered workers in the construction industry based only on a caption in the CBA. The Sixth Circuit reversed. The standard form caption cannot be used to limit the application of the CBA’s substantive terms, without the court first finding those substantive provisions ambiguous; the CBA is unambiguous. View "Trustees of Sheet Metal Workers Local 7 v. Pro Services, Inc." on Justia Law

The Boilermaker-Blacksmith National Pension Trust Board of Trustees (“Board”) denied Plaintiff’s application for disability pension benefits under a plan governed by the Employee Retirement Income Security Act (“ERISA”). Plaintiff argued the Board’s stated reason for denying his application was unreasonable and the Board violated its fiduciary duties. The district court granted the Board’s motion for summary judgment. Plaintiff appealed.   The Eighth Circuit affirmed. The court concluded that the Board did not breach its fiduciary duty when it did not notify Plaintiff the Notice of Decision he submitted on appeal was insufficient. The initial letter the Board sent to Plaintiff noting the absence of the document clearly stated Plaintiff needed to submit a “Notice of Award.” When the plain language of the Plan and the Board’s other communications are consistent, there is no obvious unfairness to Plaintiff if his claim is denied because he submitted the wrong document. Further, the court found that there is no evidence the Board knew silence would harm Plaintiff because, in the May 2018 phone call, Plaintiff himself asked about how waiting to receive the pension would affect the annuity amount and ultimately requested estimates for retirement at later ages. Moreover, Plaintiff has not identified anything that should have caused the Board to know he misunderstood his rights. Under these circumstances, Plaintiff failed to establish a violation of the duty of loyalty. View "Adam Ruessler v. Boilermaker-Blacksmith National Pension Trust" on Justia Law

Plaintiff is a former federal employee and participant in a health-insurance plan (“Plan”) that is governed by the Federal Employees Health Benefits Act (“FEHBA”). The Plan stems from a contract between the federal Office of Personnel Management (“OPM”) and Blue Cross Blue Shield Association and certain of its affiliates (together, “Blue Cross”). Blue Cross administers the Plan under OPM’s supervision. Plaintiff suffered from cancer, and she asked Blue Cross whether the Plan would cover the proton therapy that her physicians recommended. Blue Cross told her the Plan did not cover that treatment. So Plaintiff chose to receive a different type of radiation treatment, one that the Plan did cover. The second-choice treatment eliminated cancer, but it also caused devastating side effects. Plaintiff then sued OPM and Blue Cross, claiming that the Plan actually does cover proton therapy. As against OPM, she seeks the “benefits” that she wanted but did not receive, as well as an injunction directing OPM to compel Blue Cross to reform its internal processes by, among other things, covering proton therapy in the Plan going forward. As against Blue Cross, she seeks monetary damages under Texas common law. The district court dismissed Plaintiff’s suit.   The Fifth Circuit affirmed. The court held that neither the advance process nor the proton-therapy guideline poses an immediate threat of injury, so injunctive relief is therefore unavailable. Further, the court found that FEHBA preempts Plaintiff’s common-law claims against Blue Cross. Accordingly, the court held that no relief is available under the relevant statutory and regulatory regime. View "Gonzalez v. Blue Cross Blue Shield" on Justia Law

Plaintiffs brought a class action under the Employee Retirement Income Security Act of 1974 ("ERISA"), arguing that Defendant Colgate-Palmolive Co. miscalculated residual annuities based on an erroneous interpretation of its retirement income plan and improperly used a pre-retirement mortality discount to calculate residual annuities, thereby working an impermissible forfeiture of benefits under ERISA. The district court granted summary judgment to Plaintiffs on these claims. Colgate appealed that order and the final judgment of the district court.   The Second Circuit affirmed. The court concluded that the text of the RAA is unambiguous and requires Colgate to calculate a member's residual annuity by subtracting the AE of LS from that member's winning annuity under Appendix C Section 2(b). Further, the court wrote that Colgate's "same-benefit" argument does not disturb our conclusion that the RAA's language is unambiguous. Because "unambiguous language in an ERISA plan must be interpreted and enforced in accordance with its plain meaning," the court affirmed the district court's grant of summary judgment to the class Plaintiffs as to Error 1. View "McCutcheon v. Colgate-Palmolive Co." on Justia Law

Plaintiffs, current and former employees of RingCentral, participated in RingCentral’s employee welfare benefits plan. The plan participated in the “Tech Benefits Program” administered by Sequoia Benefits and Insurance Services, LLC, a management and insurance brokerage company. The Tech Benefits Program was a MEWA that pooled assets from employer-sponsored plans into a trust fund for the purpose of obtaining insurance benefits for employees at large-group rates. Plaintiffs filed this putative class action on behalf of the RingCentral plan and other Tech Benefits Program participants, asserting that Sequoia owed fiduciary duties to the plan under ERISA because Sequoia allegedly exercised control over plan assets through its operation of the Tech Benefits Program. Plaintiffs alleged that Sequoia violated its fiduciary duties by receiving and retaining commission payments from insurers, which Plaintiffs regarded as kickbacks, and by negotiating allegedly excessive administrative fees with insurers, leading to higher commissions for Sequoia.   The Ninth Circuit affirmed the district court’s dismissal for lack of Article III standing. The court held that Plaintiffs failed to establish Article III standing as to either of their two theories of injury. The panel held, as to the out-of-pocket-injury theory, Plaintiffs failed to establish the injury in fact required for Article III standing because their allegations did not demonstrate that they paid higher contributions because of Sequoia’s allegedly wrongful conduct. And Plaintiffs failed to plead the third element, that their injury would likely be redressed by judicial relief. View "RACHAEL WINSOR, ET AL V. SEQUOIA BENEFITS & INSURANCE, ET AL" on Justia Law

Appellant American Federation of State, County and Municipal Employees, Council 3 (“Appellant”) filed suit against the State of Maryland alleging that the State breached a statutorily formed contract with current state employees to provide them with certain prescription drug benefits upon retirement. The district court agreed that Maryland law created a contract, it held that the contract was unilateral in nature and that the promised benefits do not vest until an employee retires with sufficient years of service. The district court determined that the current employees represented by Appellant had no vested contractual right to the retirement prescription drug benefits and dismissed the complaint.   The Fourth Circuit affirmed. However, the court did so because it found that the statutory language does not create a contract with state employees. The court explained that in reviewing the language of the statutes at issue, it concluded that they do not create a contract binding upon the State. While Section 2-508 does “entitle” retirees to a subsidy, it does not include any unmistakable contract language. Rather, it only “entitles” a retiree to the “same State subsidy allowed a State employee.” The court explained that nothing in Sections 2-508 or 2-509.1 leaves the court with an unmistakably “clear indication that the legislature intended to bind itself contractually.” Therefore, “all doubts must be resolved in favor of the continuance of the power” of the state legislature to modify or repeal enactments of a previous legislature. View "AFSCME Maryland Council 3 v. State of Maryland" on Justia Law

The employers agreed that for the duration of two collective bargaining agreements (CBAs), they would make pension contributions on behalf of covered employees to the Pension Fund. Both CBAs contained “evergreen clauses” that extended them a year at a time until either party provided timely written notice expressing an “intention to terminate.” Both were to expire in January 2019. After the window for timely notice of intention to terminate on that date, the employers and the union signed new CBAs requiring pension contributions to a different fund beginning in February 2019. The employers notified the Fund that they were ceasing contributions, relying on letters the union sent in November 2018.The Seventh Circuit reversed the dismissal of the Fund’s lawsuit. Those letters did not express the union’s intent to terminate the existing CBAs, so as to satisfy the evergreen clause's termination procedure. The letters did not mention termination. They noted the date that the CBAs would expire and expressed a desire to meet to negotiate new agreements; neither of these points communicated an intent to terminate the existing agreements. In the context of an evergreen clause, expiration and termination are distinct concepts. A desire to negotiate a new contract is quite consistent with a desire to leave the existing agreement in place until a new deal is reached. The old agreements renewed under the evergreen clauses; the employers remained obligated to contribute to the Fund for one more year. View "Central States Southeast & Southwest Areas Pension Fund v. Zenith Logistics, Inc." on Justia Law

Reliance Standard Life Insurance Company denied Plaintiff’s claim for long-term disability benefits after concluding that she was not “Totally Disabled” as defined by her disability insurance plan. Plaintiff brought an under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. Section 1132(a)(1)(B), arguing that the denial of benefits violated that Act. After conducting a bench trial under Federal Rule of Civil Procedure 52, the district court awarded judgment to Plaintiff. Reliance appealed, arguing that courts in the Fourth Circuit are required to resolve ERISA denial-of-benefits cases via summary judgment and that the district court erred in dispensing with this case through a bench trial. Reliance also argued that this Court must review the district court’s legal conclusions.   The Fourth Circuit affirmed. The court first held that because the plan at issue here did not require objective proof of disability, the court rejected Reliance’s contention that Plaintiff’s claim fails for the lack of such evidence. Further, the court wrote that the record supports the district court’s determination that Plaintiff’s disability was not limited to a “specific locale.” Accordingly, the court agreed that Plaintiff was “totally disabled” under the terms of the plan. View "Anita Tekmen v. Reliance Standard Life Ins." on Justia Law