Justia ERISA Opinion Summaries

A group of affiliated truck dealerships in the Midwest operated through a complex structure of multiple limited liability companies. Each dealership location had a “Sales” company that owned assets and an “Employee Solutions” (ES) company that hired employees and leased them to the Sales company. The ES companies entered collective-bargaining agreements requiring pension contributions to a union fund. Over time, the ES companies stopped contributing and employing workers, transferring employees to newly created entities. One of the companies, ES Alsip, incurred withdrawal liability for ceasing contributions. The pension fund assessed over $6 million in liability, which was disputed and partially paid following an arbitration that substantially reduced the amount. Ultimately, higher courts reinstated the original liability.The United States District Court for the District of Columbia granted summary judgment to the pension fund, holding that ES Summit was liable for delinquent contributions for work performed at another dealership, ES Alsip’s withdrawal liability was properly calculated and subject to an increased interest rate, and that multiple affiliated entities and individuals were jointly and severally liable for the obligations. The court also imposed liability on successors and individual owners, the Bouchers, based on their house-flipping activities.On review, the United States Court of Appeals for the District of Columbia Circuit affirmed in part, reversed in part, and remanded. The court held that the delinquent-contribution claim against ES Summit was not adequately pleaded and reversed summary judgment on that issue. It affirmed the allocation of a partial payment to interest rather than principal, but reversed the application of an increased interest rate retroactively. The court affirmed the finding that each Sales entity was a single employer with its corresponding ES entity and upheld successor liability against Laborforce and ESI. However, it found genuine disputes of fact regarding the personal liability of the Bouchers and remanded that issue. View "Trustees of the IAM National Pension Fund v. M & K Employee Solutions" on Justia Law

Plaintiff, on behalf of herself and others similarly situated, filed suit against Evercore under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1109(a), 1132(a)(2)-(3). Plaintiff is a former J.C. Penney employee and investor in a J.C. Penney employee stock ownership plan (ESOP) managed by Evercore. Plaintiff claims that Evercore breached its fiduciary duties of prudence and loyalty when it failed to take preventative action as the value of J.C. Penney common stock tumbled between 2012 and 2013, thereby causing significant losses. Applying Fifth Third Bancorp v. Dudenhoeffer, the court concluded that plaintiff's complaint was properly dismissed because she failed to allege additional allegations of "special circumstances." In this case plaintiff failed to allege that the market on which J.C. Penney stock traded was inefficient. Accordingly, the court affirmed the judgment. View "Coburn v. Evercore Trust Company, N.A." on Justia Law

Kelly Foster filed suit against Appellees under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a), to enforce her rights under short-term and long-term disability benefit plans that had been adopted by her employer, Sun Trust Bank. The district court granted summary judgment to Appellees and dismissed Foster's complaint. The district court then denied Foster's motion for reconsideration. The court affirmed the district court's finding that the short-term disability plan is an ERISA-exempt “payroll practice” under Department of Labor regulations; held that the district court appropriately applied a deferential standard of review to the administrator’s denial of benefits under the long-term disability plan because the terms of the plan unambiguously granted the administrator, and the administrator alone, the power to construe critical terms of the plan and to decide an employee’s eligibility for benefits; and held that the district court did not abuse its discretion in denying Foster's motion for reconsideration. View "Foster v. Sedgwick Claims Management Services, Inc." on Justia Law