Justia ERISA Opinion Summaries

Four former employees of grocery store chains, who participated in a defined contribution 401(k) retirement plan, brought a putative class action under the Employee Retirement Income Security Act of 1974 (ERISA). They alleged that the plan’s fiduciaries mismanaged the plan by failing to prudently select and monitor investment options, failing to act solely in the interest of plan participants, and allowing excessive fees and improper compensation arrangements. The plaintiffs sought monetary and injunctive relief on behalf of themselves, the plan, and a proposed class of similarly situated participants.The United States District Court for the Northern District of New York dismissed several of the plaintiffs’ claims for lack of Article III standing, finding that the plaintiffs had not alleged any concrete injury to their individual accounts from the alleged mismanagement of certain investment options or from the plan’s compensation arrangements. The district court concluded that because the plaintiffs had not invested in the specific funds they challenged, or had not shown that the alleged breaches affected their own accounts, they lacked standing to pursue those claims. The court did find standing for some claims related to funds in which the plaintiffs had invested, but ultimately dismissed those claims for failure to state a claim and denied leave to amend.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s dismissal of the claims for lack of standing. The Second Circuit held that participants in a defined contribution plan must plausibly allege a concrete, individualized financial injury to establish Article III standing for monetary relief under ERISA. Because the plaintiffs did not allege that they suffered losses in their own accounts from the challenged conduct, they lacked both individual and class standing for those claims. The court affirmed in part and vacated in part the district court’s judgment, remanding for further proceedings consistent with its opinion. View "Collins v. Ne. Grocery, LLC" on Justia Law

The plaintiff, a former employee of a dental supply company, suffered a traumatic brain injury and later filed a claim for long-term disability (LTD) benefits under her employer’s LTD plan, which was insured and administered by an independent insurance company. After her claim was denied, she left her job and entered into a separation agreement with her employer. This agreement included a broad release of claims against the employer and its “parents, subsidiaries, related or affiliated entities,” as well as their agents, including claims under the Employee Retirement Income Security Act of 1974 (ERISA). Before signing, the plaintiff sought clarification from her employer about whether the release would affect her ability to pursue her LTD claim against the insurer. The employer’s representatives assured her that the insurer was a separate, independent entity and that the agreement would not impact her ability to appeal the denial of her LTD claim.After the insurer denied her appeal, the plaintiff sued the insurer in the United States District Court for the Southern District of New York, alleging violations of ERISA. The insurer moved for summary judgment, arguing that the release in the separation agreement barred her claims. The district court agreed, holding that the insurer was covered by the release and that the plaintiff knowingly and voluntarily waived her ERISA claims against it. The court granted summary judgment in favor of the insurer, and the plaintiff appealed.The United States Court of Appeals for the Second Circuit reviewed the case de novo. The court held that, based on the totality of the circumstances, the plaintiff did not knowingly and voluntarily release her ERISA claims against the insurer. The court emphasized the employer’s express assurances to the plaintiff that the release would not affect her LTD claim and found no evidence to create a genuine dispute on this point. The Second Circuit vacated the district court’s judgment and remanded the case for further proceedings. View "Schuyler v. Sun Life Assurance Company of Canada" on Justia Law

Two fiduciaries, who managed retirement and welfare funds for a New York City law enforcement union, were found to have improperly withdrawn over $500,000 from the union’s annuity fund. The withdrawals, which occurred over several years, were facilitated by one defendant preparing false authorization forms and the other signing and submitting them to the fund’s custodian. The funds were then transferred to the union’s operating account and used for unauthorized purposes, including personal enrichment and unrelated union expenses. The defendants misrepresented the nature of these withdrawals to both the fund’s custodian and union members, and they continued the scheme even after being warned by auditors that their actions were improper.The United States District Court for the Southern District of New York presided over a joint jury trial, where both defendants were convicted of wire fraud and conspiracy to commit wire fraud. One defendant was also convicted of conspiracy to defraud the United States and multiple counts of tax evasion. The district court denied motions to sever the trials, found the evidence sufficient to support the convictions, and imposed restitution and forfeiture orders. The court also addressed government discovery errors by granting a continuance and requiring early disclosure of materials, but declined to impose harsher sanctions.On appeal, the United States Court of Appeals for the Second Circuit reviewed claims of improper joinder, insufficient evidence, prosecutorial misconduct, ineffective assistance of counsel, and errors in restitution calculation. The court held that joinder was proper because the indictment sufficiently linked the fraud and tax offenses, the evidence was sufficient to support the convictions, and the attorney’s illness did not constitute per se ineffective assistance. The court also found no abuse of discretion in the district court’s handling of discovery issues or restitution calculation, and no reversible prosecutorial misconduct. The Second Circuit affirmed the district court’s judgment. View "United States v. Wynder" on Justia Law

Nakul Karkare, a surgeon affiliated with AA Medical, P.C., brought an action against the International Association of Bridge, Structural, Ornamental & Reinforcing Iron Workers Local 580 (the Union) to recover unpaid benefits under section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA). Karkare, holding a power of attorney for Patient JN, claimed the Union failed to fully reimburse AA Medical for surgical services provided to Patient JN, a beneficiary under the Union’s self-funded insurance plan. The Union reimbursed only $1,095.92 of the $153,579.94 billed by AA Medical.The United States District Court for the Eastern District of New York dismissed the complaint sua sponte, concluding that a power of attorney did not permit Karkare to maintain an ERISA cause of action on behalf of Patient JN, as it was distinct from an assignment of claim. Karkare did not provide proof of a valid assignment but argued that the power of attorney was sufficient. The district court disagreed and dismissed the complaint, later denying Karkare’s motion for reconsideration.The United States Court of Appeals for the Second Circuit reviewed the case and concluded that Karkare lacked standing under Article III of the United States Constitution to bring the action. The court determined that Karkare was suing in his own name and not on behalf of Patient JN, despite holding a power of attorney. The court held that a power of attorney does not confer Article III standing to file suit in the attorney-in-fact’s own name. However, the court remanded the case to the district court to consider whether Patient JN should be permitted to be substituted into the action pursuant to Federal Rule of Civil Procedure 17. The judgment was affirmed in part, vacated in part, and remanded for further proceedings. View "Karkare v. International Ass'n of Bridge, Structural, Ornamental & Reinforcing" on Justia Law

The case involves the Board of Trustees of a multiemployer pension plan primarily benefitting unionized bakery drivers in New York City, which applied for Special Financial Assistance (SFA) in 2022. The Pension Benefit Guaranty Corporation (PBGC) denied the application, citing the plan's termination in 2016 as a disqualifying factor. The Fund, asserting it was in "critical and declining status," sued under the Administrative Procedure Act (APA).The United States District Court for the Eastern District of New York granted summary judgment in favor of the PBGC, agreeing that the plan's termination made it ineligible for SFA. The court also concluded that a terminated plan could not be restored under ERISA, thus affirming the PBGC's denial of the Fund's application.The United States Court of Appeals for the Second Circuit reviewed the case. The court held that the SFA statute does not exclude plans based solely on a prior termination. The court found that the statute's reference to "critical and declining status" incorporates the definition from 29 U.S.C. § 1085(b)(6) without importing limitations from other sections. Consequently, the court reversed the district court's judgment and remanded the case with instructions to enter summary judgment for the Fund, vacate the PBGC's denial of the SFA application, and remand to the PBGC for reconsideration. View "Bd. of Trs. of the Bakery Drivers Loc. 550 v. Pension Benefit Guaranty Corporation" on Justia Law

Plaintiff filed suit against Aetna and its wholly-owned subsidiaries, seeking reimbursement from Aetna for performing two knee surgeries on a patient who was a member of an Aetna-administered health care plan that was governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The Second Circuit held that ERISA does not completely preempt an "out-of-network" health care provider's promissory-estoppel claim against a health insurer where the provider did not receive a valid assignment for payment under a health insurance plan and received an independent promise from the insurer that he would be paid for certain medical services provided to the insured. Accordingly, the court vacated the denial of plaintiff's motion to remand and the dismissal of his complaint. The Second Circuit remanded to the district court with instructions to remand to state court. View "McCulloch Orthopaedic Surgical Services v. Aetna" on Justia Law

Plaintiffs, trustees of an Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., pension fund, filed suit against its investment manager and principals alleging that defendants knew by 1998 that investing with Bernard L. Madoff Investment Securities LLC (BLMIS) was imprudent; that these defendants breached their fiduciary duty by failing to warn the fund of this fact; that if warned, the fund would have withdrawn the full sum appearing on its 1998 BLMIS account statements; and that prudent alternative investment of that sum would have earned more than the fund’s actual net withdrawals from its BLMIS account between 1999 and 2008. Plaintiffs also filed suit against Bank of New York Mellon Corporation, which acquired the investment manager in 2000, alleging that it knowingly participated as a non‐fiduciary in the fiduciary breach. The district court dismissed the complaint for failure to state a claim under Rule 12(b)(6) and for failure to allege an actual injury sufficient to establish Article III standing under Rule 12(b)(1). The court concluded that plaintiffs failed to allege facts sufficient to show Article III standing where plaintiffs have not plausibly alleged losses in excess of their profits; the increase in pension funds does not constitute a cognizable loss; the court rejected plaintiffs' claim of disgorgement of Simon and Wohl; and the complaint fails to state a claim against BNY Mellon for participation in a breach of fiduciary duty by Ivy, Simon, and Wohl. Accordingly, the court affirmed the judgment. View "Trustees of the Upstate New York Engineers Pension Fund v. Ivy Asset Management" on Justia Law

This case concerns employee benefits plans sponsored by AIG or its affiliates under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. At issue is whether the Plans are "affiliates" of AIG for the purposes of a class action settlement agreement. The district court held that appellants are "affiliates" of AIG and thus ineligible for their own portion of a class settlement agreement with AIG. The court held that appellants have standing to appeal the district court's denial of the motion to direct and dismissed appellants' appeal as to the denial of their motion to intervene as moot. On the merits, the court held that because ERISA imposes important statutory limits on an employer’s control over the management and policies of an employee benefit plan, those plans do not fall within the ordinary meaning of "affiliate." Therefore, the court concluded that appellants are entitled to their own portion of the settlement and appellees will have a somewhat smaller portion. The court vacated the denial of the Plans' motion to direct. View "In re AIG Securities Litig." on Justia Law

Plaintiffs, two individual psychiatrists and three professional associations of psychiatrists, filed suit against defendants, four health‐insurance companies, alleging that the health insurers’ reimbursement practices discriminate against patients with mental health and substance use disorders in violation of the Mental Health Parity and Addition Equity Act of 2008 (MHPAEA), 29 U.S.C. 1185(a), and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001-1461. The court concluded that, because the psychiatrists are not among those expressly authorized to sue, they lack a cause of action under ERISA. The court also concluded that the association plaintiffs lack constitutional standing to pursue their respective ERISA and MHPAEA claims because their members lack standing. Accordingly, the court affirmed the judgment. View "Am. Psychiatric Ass’n v. Anthem Health Plans, Inc." on Justia Law

Congress empowered the Department of Labor to issue rules and regulations governing claims procedures for employee benefit plans under Sections 503 and 505 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1133, 1135. The United States District Court for the District of Connecticut held that, when exercising discretionary authority to deny a claim for benefits, a plan’s failure to establish or follow reasonable claims procedures in accordance with the regulation entitles the claimant to de novo review of the claim in federal court, unless the plan “substantially complied” with the regulation, in which case an arbitrary and capricious standard applies to the federal court’s review of the claim. The district court further held that a plan’s failure to follow the Department’s regulation results in unspecified civil penalties. The court disagreed, holding that, when denying a claim for benefits, a plan’s failure to comply with the Department of Labor’s claims‐procedure regulation, 29 C.F.R. 2560.503‐1, will result in that claim being reviewed de novo in federal court, unless the plan has otherwise established procedures in full conformity with the regulation and can show that its failure to comply with the regulation in the processing of a particular claim was inadvertent and harmless; civil penalties are not available to a participant or beneficiary for a plan’s failure to comply with the claims‐procedure regulation; and a plan’s failure to comply with the claims‐procedure regulation may, in the district court’s discretion, constitute good cause warranting the introduction of additional evidence outside the administrative record. Accordingly, the court vacated and remanded. View "Halo v. Yale Health Plan" on Justia Law