Justia ERISA Opinion Summaries

Plaintiffs brought a putative class action under the Employee Retirement Income Security Act, 29 U.S.C. 1001, to recover benefits under long-term disability benefit plans maintained by their former employers. The plans provide for reduction of benefits if the disabled employee also receives benefits under the Social Security Act, as both plaintiffs do. They dispute calculation of the reduction, claiming that the plans do not authorize inclusion in the offset of benefits paid to dependent children. Both plans require offsets for "loss of time disability" benefits. The district court dismissed. The Seventh Circuit affirmed, holding that children's Social Security disability benefits paid based on a parent's disability are "loss of time disability" benefits under the language of the plans. View "Schultz v. Aviall Inc. Long Term Disability Plan" on Justia Law

The employer sought an early withdrawal from its obligation to make pension contributions to a multiemployer pension fund; it entered into a new collective bargaining agreement, six weeks before expiration of the existing agreement, that abrogated its obligation to make payments to the fund. The fund sued under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1145. The district court entered summary judgment in favor of the fund. The Seventh Circuit affirmed, rejecting an argument that the agreement was ambiguous in providing that the employer could not “prospectively” change its obligation.View "Cent. States SE & SW Areas Pension Fund v. Waste Mgmt of MI, Inc." on Justia Law

Abbott created Hospira for its Hospital Products Division. Before the spin-off, HPD employees had access to Abbott's pension plan. Hospira did not offer a pension plan. The spin-off included reciprocal two-year no-hire policies. When HPD employees became Hospira employees, non-vested pension rights in the Abbott plan were eliminated. Retirement-eligible HPD employees were effectively prevented from retiring from Abbott then joining Hospira. A certified class of Hospira employees alleged that violation of the Employee Retirement Income Security Act, 29 U.S.C. 1140, by using the spin and no-hire policy to get rid of pension liability and deter HPD employees from exercising pension benefits before the spin. They alleged that Abbott breached its fiduciary duty by failing to disclose that Hospira would not offer pension benefits. The district court entered judgment for Abbott and Hospira on all counts. The Seventh Circuit affirmed. ERISA claims failed because Abbott and Hospira did not act with the requisite intent to interfere with plaintiffs' pension benefits. The breach-of-fiduciary-duty claim failed because Abbott had nothing to do with the Hospira benefits plan and because Abbott reported truthfully to HPD employees that benefits might change after the spin. View "Nauman v. Abbott Labs., Inc." on Justia Law

Under the Multiemployer Pension Plan Amendments Act of 1980, all "trades or businesses" under "common control" are treated as a single employer for purposes of determining withdrawal liability. 29 U.S.C. 1301(b)(1). SCOFBP incurred withdrawal liability for unfunded pension benefits in 2001 when it ceased operations and paying into a union pension fund. The district court held that the solvent MCRI and MCOF, which were part of a complex set of entities and trusts under control of a single businessman (who went through personal bankruptcy in 1999), were both trades or businesses that were under common control with insolvent SCOFBP at the relevant times, so that both are liable for SCOFBP's withdrawal liability. The Seventh Circuit affirmed, rejecting arguments that MCRI and MCOF were only passive investment vehicles rather than trades or businesses and that the businessman's personal bankruptcy disrupted what had been common control of the three entities. View "Central States SE and SW Areas Pension Plan v. SCOFBP, LLC, " on Justia Law

After being diagnosed with fibromyalgia, chronic pain, anxiety, and depression, plaintiff was awarded long-term disability benefits under an employee benefit plan issued and administered by defendant. Benefits were discontinued a little more than 24 months later, when defendant determined that plaintiff had received all to which she was entitled under the plan’s self-reported symptoms limitation. Because plaintiff had retroactively received social security benefits, defendant also sought to recoup equivalent overpayments as provided by the plan. On rehearing, the Seventh Circuit reversed the district court ruling in favor of defendant. The application of the self-reported symptoms clause was unreasonable under ERISA, 29 U.S.C. 1001; the disabling illness, fibromyalgia, is not primarily based on self-reported symptoms, but rather can be based on the verifiable evidence of its manifestations. The Social Security Act, 42 U.S.C. 407(a), does not preclude recovery of any overpayment that resulted from receipt of social security benefits. View "Weitzenkamp v. Unum Life Ins. Co. of Am." on Justia Law

Before his death, the orthodontist designated his sons as beneficiaries of a pension plan he had established for his business. Because the Employee Retirement Income Security Act, 29 U.S.C. 1001. The Plan moved for summary judgment.guarantees surviving spouses certain benefits, his wife signed a written consent form. After her husband died, wife claimed her consent was invalid because it was not witnessed, as required by ERISA. The pension plan denied her claim for benefits. The district court upheld that decision, invoking the substantial-compliance doctrine. The Seventh Circuit affirmed, but held that the substantial-compliance doctrine did not apply because ERISA is not silent on the issue of witnessing. The plan was within its discretion to deny the claim. Although no witness signed the consent form as a witness, it is clear that the orthodontist, then the plan representative, witnessed his wife's written consent to the waiver, as required by ERISA.View "Burns v. Orthotek, Inc." on Justia Law

The defined-contribution pension plan allows participants to choose among 32 options, including 24 mutual funds that are open to the public. These funds are no-load vehicles that do not charge a fee to buy or sell shares. Purchases and sales occur at net asset value, calculated daily. A no-load fund covers its expenses by deducting them from the assets under management. Plan participants contend that administrators violated fiduciary duties under the Employee Retirement Income Security Act, 29 U.S.C. 1104(a), by offering retail mutual funds, in which participants get the same terms (and thus bear the same expenses) as the general public and by requiring participants to bear the those expenses themselves, rather than having the plan cover costs. Plaintiffs contend that there should be access to wholesale or institutional investment vehicles. The district court dismissed. The Seventh Circuit affirmed. The plan offers a menu of high-expense, high-risk, and potentially high-return funds, together with low-expense index funds that track the market, and low-expense, low-risk, modest-return bond funds; it leaves the choice to the people most interested in the outcome. The district court acted within its discretion in awarding about $42,000 in costs. View "Loomis v. Exelon Corp." on Justia Law

In attempting to enroll his infant daughter, a covered employee failed to complete parts of the form indicating whether the child resided with employee, was dependent upon employee for more than 50 percent support and maintenance, and whether the child qualified to be claimed as a tax exemption on employee's federal tax return. The plan made several inquiries before sending a notice that coverage was denied. The employee did not appeal. The plan sued under the Employee Retirement Income Security Act , 29 U.S.C. 1001, to recover $472,357.84 paid to the medical college and $1,199,538.58 paid to the hospital on behalf of the child. The district court dismissed. The Seventh Circuit affirmed dismissal of the ERISA claim. The plan reserves the right to recover against "covered persons" if it has paid them or any other party on their behalf. Neither the treating entities nor the child are covered persons. Because the plan is not implicated, state law claims were not preempted; the court reversed dismissal of those claims. Plaintiffs' position was not unreasonable; the district court abused its discretion in awarding attorney fees. View "Kolbe & Kolbe Health & Welfare Benefit Plan v. Med. Coll. of WI" on Justia Law

In 2007 employee retired when the steel plant, at which he had worked for 42 years, shut down. Under a plan negotiated by the union, his pension payment, without any offset, was $688.13 a month. Employee was told that payment of his pension would be deferred for more than 10 years because the plan required that employee pay back workers' compensation settlements that he had received after sustaining on-the-job injuries in 2005 and 2006. The plan refers to offset for payments for "disability in the nature of a permanent disability for which the Company is liable." The district court entered judgment for the employee. The Seventh Circuit reversed. The committee's decision was within its discretion; the plan's specific mention of workers' compensation supports its characterization. View "Frye v. Thompson Steel Co., Inc." on Justia Law

When an employee left the company in 1997, took a $47,850 lump sum distribution of his pension. He later believed that the payment should have included the present value of future cost of living adjustments that would have been included had he received his pension as an annuity. In 2002, he filed a class action suit. The district court granted summary judgment on liability in favor of the class and the Seventh Circuit affirmed, holding that a COLA is an accrued benefit, as defined in ERISA, 29 U.S.C. 1002(23)(A). Before the district court ruled, the parties reached a settlement that each early retiree would receive roughly 3.5% of her original lump sum, unless the COLA on a normal-retirement-age-based annuity outweighed her early-retirement subsidy, a rare situation. The district court approved the proposed settlement and awarded attorney's fees. Objectors were not allowed to opt out. The Seventh Circuit affirmed, upholding determinations that the settlement was reasonable; that class counsel had adequately represented the early retirees and that further subclasses were unnecessary; that opt-out should be denied; and concerning attorney fees. View "Adamski v. Rohm & Haas Pension Plan" on Justia Law