Justia ERISA Opinion Summaries

Winston R. Anderson, a former Intel employee, brought a putative class action under the Employee Retirement Income Security Act (ERISA) against the trustees of Intel Corporation’s proprietary retirement funds. Anderson alleged that the trustees breached their fiduciary duty of prudence by investing in hedge funds and private equity funds, and their duty of loyalty by steering retirement funds to companies in which Intel Capital had already invested.The United States District Court for the Northern District of California dismissed Anderson’s claims, concluding that he had not plausibly alleged a breach of either the duty of prudence or the duty of loyalty. The court found that Anderson failed to provide a meaningful benchmark to compare the performance of Intel’s funds and did not plausibly allege a real conflict of interest for the duty of loyalty claim. Anderson was granted leave to amend his complaint, but the district court dismissed the amended complaint with prejudice for the same reasons.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The court held that Anderson did not state a claim for breach of ERISA’s duty of prudence because he failed to provide a sound basis for comparison, as the funds he compared to Intel’s funds had different aims, risks, and potential rewards. The court also held that Anderson did not state a claim for breach of the duty of loyalty because he did not plausibly allege a real conflict of interest, only the potential for one. The court emphasized that ERISA requires prudence based on the methods employed by fiduciaries, not the results achieved, and that generalized attacks on hedge funds and private equity funds as a category are insufficient to state a claim. View "Anderson v. Intel Corporation Investment Policy Committee" on Justia Law

California Insurance Code 10110.6(a) has voided provisions conferring discretionary authority to Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., plan administrators such as Aetna. Plaintiff challenged Aetna's decision to terminate her long-term disability benefits under a plan created by Boeing. The Ninth Circuit reversed and remanded the district court's holding that California's statute did not apply to Boeing's plan and upholding Aetna's denial of benefits to plaintiff. The Ninth Circuit held that section 10110.6(a) was saved from ERISA preemption because the statute is directed toward entities engaged in insurance and substantially affects the risk-pooling arrangement between the insurer and the insured. The Ninth Circuit also held that section 10110.6 applied in this case because Boeing's policy renewed after section 10110.6's effective date. View "Orzechowski v. The Boeing Company Non-Union Long-Term Disability Plan" on Justia Law

Plaintiffs are health care providers who furnish medical services to subscribers of employee health benefits plans. Defendants are health insurers, plan administrators, and/or claims administrators for the relevant employee benefit plans. These two cases involved reimbursement disputes: In DB Healthcare, Blue Cross determined that certain blood tests were investigational and thus excluded from coverage; In Advanced Women's Health Center, Anthem determined that the Center used faulty practices to bill for the tests and so was not entitled to reimbursement. At issue was whether a health care provider designated to receive direct payment from a health plan administrator for medical services was authorized to bring suit in federal court under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court held before, and reiterated, that health care providers are not "beneficiaries" within the meaning of ERISA's enforcement provisions. Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc. emphasized this rule and held that a non-participant healthcare provider cannot bring claims for benefits on its own behalf but must do so derivatively. The court concluded that the providers in DB Healthcare lacked derivative standing because they do not hold valid assignments. The court also concluded that the Center lacked derivative authority because the claims fell outside the scope of those assigned rights. Accordingly, the court affirmed the judgment. View "DB Healthcare, LLC v. Blue Cross Blue Shield of Arizona, Inc." on Justia Law

Plan beneficiaries (Plaintiffs) filed claims against their employer and its benefits plan administrator (collectively, Defendants) alleging breach of fiduciary duty in the selection and retention of certain mutual funds for a benefit plan governed by ERISA. The district court concluded that Plaintiffs' claims regarding the selection of mutual funds in 1999 were time-barred under the six-year limit of 29 U.S.C. 1113(1). The court of appeals affirmed. The Supreme Court vacated the decision of the court of appeals, holding that federal law imposes on fiduciaries an ongoing duty to monitor investments even absent a change in circumstances. On remand, the Fourth Circuit vacated the district court’s decisions regarding funds added to the ERISA plan before 2001, holding (1) Plaintiffs did not forfeit the ongoing-duty-to-monitor argument either in the district court or on appeal; (2) only a “breach of violation” need occur within the six-year statutory period, and the initial investment need not be made within the statutory period; and (3) the duty of prudence required Defendants to reevaluate investments periodically and to take into account their power to obtain favorable investment products. Remanded. View "Tibble v. Edison International" on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., seeking judicial review of the denial of benefits under his long term disability policy sponsored by his employer and issued by Northwestern Mutual. The court held that the district court erred in denying plaintiff his long term disability benefits under the Plan where the administrative record plainly showed that plaintiff could not sit for more than four hours a day. Nonetheless, the district court upheld Northwestern Mutual’s determination that Armani could perform work at the “sedentary” level. The court agreed with other circuits and held that an employee who cannot sit for more than four hours in an eight-hour workday cannot perform “sedentary” work that requires “sitting most of the time.” Accordingly, the court vacated and remanded. View "Armani v. Northwestern Mutual Life Insurance Co." on Justia Law

Plaintiff filed suit against his former employer, RSA, alleging retaliatory discharge claims under both state law and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. A jury awarded him lump-sum damages on his state law claims, and the district court then entered judgment in his favor on his ERISA claim. Even though, at plaintiff's request, the jury had been instructed to include front pay in its damages award, the district court granted plaintiff additional equitable remedies consisting of reinstatement as well as front pay until reinstatement occurred. RSA appeals these equitable remedies. Given the way in which the jury was instructed and the evidence presented at trial, the court concluded that the jury’s verdict encompassed an implicit factual determination as to the entire amount of front pay to which plaintiff was entitled on account of his retaliatory discharge. Therefore, the court held that the district court’s grant of an additional front pay remedy for the same harm disregarded that determination in violation of the Seventh Amendment right to a jury trial. The court also held that, although the reinstatement remedy does not necessarily conflict with factual findings implicit in the jury’s verdict, it is nevertheless improper because plaintiff waived that relief when he elected to seek the duplicative front pay remedy from the jury. Accordingly, the court reversed the equitable awards. View "Teutscher v. Woodson" on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., against the Plan and MetLife, claiming that MetLife, the claim administrator and insurer of the Plan, improperly denied his claim for long-term disability (LTD) benefits. The district court granted defendants' cross-motion for summary judgment. The court concluded that the abuse-of-discretion review should be tempered with some skepticism because plaintiff has offered evidence of a conflict of interest where the independent physician consultants (IPCs) have earned a substantial amount of money from MetLife and have performed a substantial number of reviews for the company as well. The court further concluded that, taking into account the totality of the circumstances, MetLife abused its discretion in denying plaintiff's claim. In this case, the evidence included the financial conflict of interest of the IPCs on whom MetLife relied; the substantial evidence of plaintiff's mental limitations due to pain medication and physical limitations; and the IPCs’ reviews of plaintiff's condition, without having examined him and without explaining why they rejected his credibility, particularly in regard to evidence corroborating his credibility (both medical and nonmedical). Accordingly, the court reversed and remanded with instructions to the district court to remand this case to MetLife so that it may re-evaluate the merits of plaintiff's LTD claim. View "Demer v. IBM Corp." on Justia Law

Plaintiff filed a putative class action against her former employer, Dignity Health, alleging that the company has not maintained its pension plan in compliance with the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. Although Dignity Health concedes it has not complied with ERISA, it contends that the plan qualifies for ERISA’s church-plan exemption. The district court awarded partial summary judgment to plaintiff, ruling that Dignity Health’s pension plan must comply with ERISA. The court agreed with its sister circuits and held that a church plan must be established by a church or by a convention or association of churches, and maintained either by a church or by a principal-purpose organization. Accordingly, the court affirmed the judgment and remanded for further proceedings. View "Rollins v. Dignity Health" on Justia Law

After plaintiff's long term disability benefits were terminated, plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(c)(1), against his former employer, ING, seeking statutory penalties against ING for failing to timely produce documents he had requested. The district court granted summary judgment to plaintiff and imposed a penalty of $27,475. The court affirmed the district court's decision to impose a penalty on ING North America for its failure to timely produce the Plan Document; the court reversed the district court’s decision to impose a penalty based on ING North America’s failure to timely produce the emails at issue; the court joined its sister circuits and held that penalties under 29 U.S.C. 1132(c)(1) can only be assessed against “plan administrators” for failing to produce documents that they are required to produce as plan administrators; and 29 C.F.R. 2560.503-1(h)(2)(iii) does not impose any requirements on plan administrators, and so cannot form the basis for a penalty under 29 U.S.C. 1132(c)(1). Accordingly, the court vacated the penalty award and remanded to the district court to assess a penalty based solely on the failure to timely produce the Plan Document. View "Lee v. ING Groep" on Justia Law

Plaintiff filed claims alleging breach of contract and claims under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., against BAH and others. Under California law, a breach of a written contract must be brought within four years of the date of the alleged breach, Cal. Civ. Proc. Code 337. The court concluded that plaintiff's cause of action accrued in September 2003 and the filing of his complaint was untimely. Therefore, plaintiff's breach of contract claim is time barred. The court also concluded that the district court did not abuse its discretion by denying plaintiff a third opportunity to amend his complaint. Finally, the court held that the employer’s stock rights plan did not qualify as an employee pension benefit plan subject to ERISA under 29 U.S.C. 1002(2)(A) because its primary purpose was not to provide deferred compensation or other retirement benefits. Because, in this case, the stock rights plan was not designed or intended to provide retirement or deferred income, it is not covered by ERISA. Accordingly, the court affirmed the judgment. View "Rich v. Shrader" on Justia Law