Justia ERISA Opinion Summaries

The company closed paper mills and eliminated a health-care subsidy for retirees. The union filed suit in Ohio under the Labor Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132. The company filed a declaratory judgment suit in Wisconsin; the district court dismissed for lack of jurisdiction. The Seventh Circuit vacated and remanded. Although the suit does not seek equitable relief as described in Sect. 502 of ERISA, Sect. 2201 does authorize declaratory relief. The court further reasoned that the district court acknowledged its jurisdiction over the LMRA suit and that the union's suit came within the 502 grant of jurisdiction, so this mirror-image suit by the plan’s sponsor also is within federal subject-matter jurisdiction. In dismissing the Wisconsin litigation, the district judge assumed that the controversy would be resolved in Ohio. That is no longer true because the union mistakenly named a parent company that was not a party to the collective bargaining agreements; the case has been dismissed. View "NewPage Wis. Sys., Inc., v. United Steel, Paper & Forestry, Rubber, Mfg,. Energy Allied Indus. & Servs. Workers Int'l Union" on Justia Law

This case stemmed from the collective bargaining agreement (CBA) between Volvo Group North America, LLC (Volvo) and the union representing workers at Volvo's New River Valley assembly plant (NRV). At issue was whether the CBA permitted Volvo to make unilateral changes to the health benefits of retirees from its NRV assembly plant after the agreement expired. The court held that Volvo was not permitted to make unilateral modifications to the retirees' health benefits after the expiration of the CBA unless it followed the mechanism agreed to by both parties in that agreement. Therefore, the court affirmed the judgment of the district court where Volvo could not employ that mechanism in this case. View "Quesenberry, et al. v. Volvo Trucks North America Retiree Healthcare Benefit Plan, et al." on Justia Law

Plaintiff filed an action against defendants (collectively, the Plan) for refusing to pay certain long-term disability benefits. At issue was whether the district court erred in granting summary judgment for defendants and dismissed plaintiff's claims without prejudice due to his failure to exhaust available administrative remedies under the Plan. The court held that the district court adopted the Plan's reading of ERISA, 29 C.F.R. 250.503-1(i) without the benefit of the Secretary of Labor's interpretation of that provision. Therefore, deferring to the Secretary's plausible approach, the court held that where a claimant sought review of his or her disability claims, the quarterly meeting rule was restricted to multiemployer plans. Accordingly, the Plan was required to render a decision within 90 days of plaintiff's administrative appeal and failed to do so. Consequently, plaintiff's claims must be deemed exhausted and the judgment was reversed and remanded. View "Barboza v. CA Assoc. of Prof'l Firefighters, et al." on Justia Law

Plaintiff challenged the denial of his claims for long-term disability benefits by defendant, who served as both the administrator of claims and the payor of benefits in the long-term disability plan in which defendant participated. At issue was whether there was a conflict of interest where defendant was both administrator and payor of benefits of the plan governed by ERISA, 29 U.S.C. 1001-1461. The court found that defendant considered the medical information submitted by plaintiff's doctors and relied upon the advice of several independent medical professionals to conclude that plaintiff failed to make a sufficient showing of disability under the plan and, even where plaintiff's own doctors offered different medical opinions than defendant's independent doctors, the plan administrator could give different weight to those opinions without acting arbitrarily or capriciously. Therefore, the court held that a reasonable basis supported defendant's benefits decisions and that the conflict of interest did not render the decisions arbitrary or capricious. View "Blankenship v. Metropolitan Life Ins. Co." on Justia Law

Defendant appealed from the district court's grant of summary judgment in favor of plaintiff, compelling arbitration of a dispute related to healthcare benefits under an expired collective bargaining agreement. At issue was whether the district court erred in granting plaintiff's motion for summary judgment and issuing an order compelling the arbitration. The court reversed and held that the district court erred in granting summary judgment and compelling arbitration where both parties vigorously disputed issues of both law and fact, including whether the 1994 agreement was ambiguous and whether the summary plan descriptions constituted an intrinsic or extrinsic evidence of the parties' intent. The parties also point to various other extrinsic evidence and vehemently disagree as to whether the bargained for fully-paid health insurance premiums for life or just for the term of the agreement. Under these circumstances, the court held that the question of whether the right to fully-paid premiums vested under the 1994 agreement was best decided in the first instance by the district court and therefore, remanded for further proceedings. View "Newspaper Guild of St. Louis v. St. Louis Post Dispatch, LLC" on Justia Law

Plaintiffs sued defendants, former directors of a retirees association of former unionized transportation workers, alleging, among other things, that defendants breached their fiduciary duty to the retirees association and its members by buying and maintaining a health insurance policy with premiums that far outstripped the benefits received by members. When defendants prevailed on all counts, defendants appealed the district court's denial of their fees motion. At issue was whether the district court erred in denying the fees motion in light of the recent Supreme Court decision, Hardt v. Reliance Standard Life Insurance Co. The court affirmed and held that the district court did not abuse its discretion in denying fees where, although the district court did not have the benefit of Hardt in reaching its decision, nothing in the district court's opinion contradicted Hardt or suggested that the district court would have decided the matter differently in light of Hardt. Accordingly, Hardt did not require the court to reverse or remand. The court also held that, when determining whether attorney's fees should be awarded to defendants, the court focused on whether plaintiffs brought the complaint in good faith. View "Toussaint, et al. v. Mahoney" on Justia Law

Defendants, the chairman and chief executive officer of Lunde Electric Company ("company"), appealed convictions stemming from the misappropriation of employee 401(k) contributions to pay the company's operating expenses. At issue was whether there was sufficient evidence to support defendants' convictions under 18 U.S.C. 664, for embezzlement or conversion of elective deferrals, and 18 U.S.C. 1027, for false or misleading statements in a required Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C 1001 et seq., document. The court held that there was sufficient evidence to support defendants' convictions on Counts 17 and 18 under section 664 where there was sufficient evidence for the jury to conclude that the 1991 Profit Sharing Plan had been restated before defendants retained their employees' elective deferrals in the company's general account; where defendants commingled their employees' contributions with the company's assets to prop up their failing business and therefore, intentionally used their employees' assets for an unauthorized purpose; where they sent participants account statements showing 401(k) balances which were in fact non-existent; where defendants' decision to deviate was the wilful criminal misappropriation punished by section 664; and where defendants were alerted repeatedly about their obligation to remit the deferrals and defendants hid their actions from employees. The court also held that there was sufficient evidence to support defendants' convictions on Count 21 under section 1027 where defendants' initial decision to mislead their own employees about the solvency of their retirement plans by filing false account statements and false Form 5500s were the behaviors targeted by section 1027.

Plaintiff sued defendant alleging breach of fiduciary duty and sought damages under the "other appropriate equitable relief" provision of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. 1132(a)(3), where defendant denied plaintiff's life insurance coverage claims for her deceased daughter on the grounds that her daughter did not qualify for coverage under the plan's "eligible dependent children" provision. At issue was whether section 1132(a)(3) allowed the remedy of surcharge, which would permit recovery of the life insurance proceeds lost by plaintiff because of defendant's breach of fiduciary duty. Also at issue was whether the court should recognize equitable estoppel as part of the common law of ERISA. Further at issue was whether the district court erred in granting plaintiff's motion for summary judgment. The court held that the remedy of surcharge was not available under section 1132(a)(3) and that the district court did not err in limiting plaintiff's damages to the premiums withheld by defendant where plaintiff sought a legal, not equitable, remedy, and that, to the extent plaintiff sought to sanction defendant, this remedy was also not allowed under ERISA. The court also declined to use estoppel principles to modify the unambiguous terms of an ERISA plan. The court further held that the district court did not err in granting plaintiff's motion for summary judgment where defendant lacked standing to prosecute its cross-appeal where defendant was not aggrieved by a judgment requiring it to pay an amount that it always agreed that it owed and where defendant already refunded the premiums.

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.

The employee failed to provide information requested to supplement his request for leave under the Family and Medical Leave Act (FMLA), exhausted his vacation time, was discharged for insubordination, and applied for benefits through a plan covered by the Employee Retirement Income Security Act, 29 U.S.C. 1001. The administrator denied the claim because the plan specifically excludes discharge for insubordination. A review committee affirmed. The district court entered summary judgment upholding the denial. The Sixth Circuit affirmed, holding that the administrator was not required to go beyond the language of the plan and determine whether the termination violated FMLA. The administrator did not have the ability to resolve the FMLA claim between the employee and employer and it is irrelevant that the review committee made some effort to consider the FMLA issue.