Justia ERISA Opinion SummariesArticles Posted in US Court of Appeals for the Second Circuit
Browe v. CTC Corp.
Plaintiffs filed suit under the Employee Retirement Income Security Act (ERISA) against a defunct photo‐finishing company and its former CEO, alleging various violations and breaches of fiduciary duties with respect to a deferred compensation plan.The Second Circuit held that the district court correctly denied defendants' invocation of ERISA's three-year statute of limitations for fiduciary claims because defendants failed to prove that all plaintiffs had knowledge of the breaches more than three years prior to the commencement of this suit; defendants waived any reliance on ERISA's six‐year statute of repose by failing to assert it any time prior to their reply brief before the court; the Plan is not exempt from ERISA's funding, fiduciary, and vesting requirements because it was not offered to a qualitatively select group of employees; the district court's decision to limit damages on plaintiffs' fiduciary claims to the Plan's projected balance as of 2004 was error, and damages must be recalculated; the district court erred in failing to assess the scope of CTC's liability, if any, for the claims asserted against it; the CEO is liable for the entire amount of the restoration award, because liability under ERISA is joint and several; although the district court's conclusion that Plaintiff Launderville is liable in contribution is supported by sufficient evidence, that liability is to the CEO, not to the Plan; there is no basis to impose liability on Launderville for her failure to comply with ERISA's reporting requirements; the district court's entry of judgment for defendants on plaintiffs' wrongful denial of benefits claims was error; the district court's order that the restoration award be distributed on a per capita basis to Plan participants risks violating those participants' vested rights and is, in any case, inconsistent with ERISA; and defendants' evidentiary challenge is meritless. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Browe v. CTC Corp." on Justia Law
Sacerdote v. New York University
Plaintiffs, participants of retirement plans administered by NYU and NYU School of Medicine, filed suit against NYU in its capacity as the fiduciary of plaintiffs' retirement plans, alleging breaches of NYU's fiduciary duties under the Employee Retirement Income Security Act (ERISA).The Second Circuit vacated in part, concluding that the district court erred in dismissing the share-class claim because it was adequately pled and dismissal was not harmless. The court also vacated the denial of leave to amend and denial of the prejudiced post-trial motions because the district court erred in denying the motion to amend the complaint to add individual Committee members as defendants, an error that later prejudiced two of plaintiffs' post-trial motions.However, the court affirmed the judgment against plaintiffs regarding claims that they were entitled to a jury trial under the Seventh Amendment; the use of written declarations for all direct testimony violated the Federal Rules of Civil Procedure and denied them a fair trial; the district court's trial findings in NYU's favor on the recordkeeper-consolidation claim and the investment-retention claim were clearly erroneous; and Judge Forrest should have been disqualified from presiding over this case. View "Sacerdote v. New York University" on Justia Law
Division 1181 Amalgamated Transit Union v. New York City Department of Education
The Second Circuit held that the district court did not err in dismissing the Fund's amended complaint under Federal Rule of Civil Procedure 12(b)(6) with prejudice where the Fund failed to plausibly state a claim for delinquent contributions under the Employee Retirement Income Security Act of 1974 (ERISA). The court adopted in full the district court's reasoning. Specifically, the court held that the Fund failed to plausibly allege that the contractors had obligations to contribute to the Fund, as would be required for a delinquent contribution claim under ERISA; neither the contracts for school bus services nor the Fund's governing documents required the contractors to make the contributions demanded; and the Employee Protection Provision did not constitute either an ERISA pension plan or a collectively bargained agreement. Finally, the court agreed with the district court that the Fund failed to plausibly allege that defendants are liable under ERISA as fiduciaries or by participating in prohibited transactions. View "Division 1181 Amalgamated Transit Union v. New York City Department of Education" on Justia Law
Mayer v. Ringler Associates Inc. and Af.
The Second Circuit affirmed the district court's judgment sustaining the final determination of Hartford Life with respect to plaintiff's disability benefits under the terms of the long term disability plan.The court held that California Insurance Code 10110.6(a) applies only to the claims of California residents. It does not apply to plaintiff because he was a New York resident at all relevant times. The court also held that "full and fair review" under the Employee Retirement Income Security Act's (ERISA) claims-procedure regulations does not require the claims administrator to produce documents developed or considered during the appeal from the initial determination while the claim is still under review and before a final benefits determination. Therefore, plaintiff cannot establish that Hartford Life did not provide his claim a full and fair review. In this case, the district court correctly reviewed Hartford Life's determination under the arbitrary-and-capricious standard and correctly concluded that the final determination was reasonable and supported by substantial evidence in the record. View "Mayer v. Ringler Associates Inc. and Af." on Justia Law
Connecticut General Life Insurance Co. v. BioHealth Laboratories, Inc.
Plaintiffs filed suit against several laboratory testing companies, alleging that the companies violated federal and Connecticut law by submitting fraudulent or overstated claims for medical services purportedly provided to plaintiffs' plan members. The district court dismissed the complaint with prejudice after concluding that plaintiffs' claims are time-barred by Connecticut’s three-year statute of limitations applicable to tort claims.The Second Circuit found, under Connecticut law, that plaintiffs' equitable claims, which include their federal claims, are subject to no statute of limitations and are instead governed only by the doctrine of laches. Therefore, the court vacated the district court's decision in part. However, the court nonetheless affirmed the district court's dismissal of the state law claims, and specifically reject plaintiffs' argument that the limitations period applicable to those claims was tolled during the pendency of a prior action between the parties. The court explained that, although plaintiffs note that several sister circuits have tolled limitations periods applicable to compulsory counterclaims as a matter of federal law, the legal claims at issue here are all brought under state law, subject only to state law tolling rules, and provide no relief for plaintiffs. View "Connecticut General Life Insurance Co. v. BioHealth Laboratories, Inc." on Justia Law
American Federation of Musicians and Employers’ Pension Fund v. Neshoma Orchestra and Singers, Inc.
The Fund brought this action to collect $1.1 million in withdrawal liability under the Employee Retirement Income Security Act (ERISA). At issue was whether arbitration was properly initiated by Neshoma in response to the suit and whether Neshoma's third-party claim against its union was preempted by the National Labor Relations Act (NLRA).The Second Circuit held that the parties were bound by the Fund rules, which required Neshoma to initiate arbitration with the AAA by filing a formal request before the statutory deadline, and Neshoma failed to do so. The court also held that the district court did not err in dismissing Neshoma's third-party complaint against the Union on the pleadings as preempted by the NLRA. Accordingly, the court affirmed the judgment. View "American Federation of Musicians and Employers' Pension Fund v. Neshoma Orchestra and Singers, Inc." on Justia Law
Jander v. International Business Machines Corp.
The judgment the Second Circuit entered in its initial opinion in this appeal was vacated by the Supreme Court and remanded for reconsideration. The court reinstated the judgment.Plaintiffs, participants in IBM's employee stock option plain filed suit alleging that the plan's fiduciaries breached their duty of prudence under the Employee Retirement Income Security Act (ERISA). The district court granted defendants' motion to dismiss; this court reversed and remanded; and then the Supreme Court granted defendants' petition for certiorari, which presented the question whether a plaintiff can state a duty-of-prudence claim based on generalized allegations that the harm of an inevitable disclosure of an alleged fraud generally increases over time. The Supreme Court also granted the government's motion to participate in oral argument as an amicus curiae in support of neither party, so that it could present the views of the Department of Labor and the Securities and Exchange Commission. After oral argument, the Supreme Court vacated the judgment and remanded, explaining that defendants' and the government's post-certiorari arguments primarily addressed matters that fell beyond the question presented to the Supreme Court, and that had not been raised before this court.The court held that the arguments raised in the supplemental briefs either were previously considered by this court or were not properly raised. To the extent that the arguments were previously considered, the court will not revisit them. To the extent that they were not properly raised, they have been forfeited, and the court declined to entertain them. Accordingly, the court reversed the district court's judgment and remanded for further proceedings. View "Jander v. International Business Machines Corp." on Justia Law
Sullivan-Mestecky v. Verizon Communications, Inc.
Plaintiff filed suit individually and as the beneficiary of the life insurance policy of her mother, Kathleen Sullivan, under the Employee Retirement Income Security Act of 1974 (ERISA), after the denial of Sullivan's life insurance benefits by Verizon and Prudential.The Second Circuit held that the district court did not err in dismissing plaintiff's ERISA section 502(a)(1)(B) claim against both defendants and her section 502(a)(3) claim against Prudential. In this case, the terms limiting Sullivan's death benefits to a percentage of her annual income were accurately stated in the plan and its description, and thus the generous benefits plaintiff seeks never vested under the terms of the plan. However, the court held that the district court erred in dismissing the section 502(a)(3) claim against Verizon, because plaintiff pleaded estoppel as "appropriate equitable relief;" the fiduciary breach is sufficient to support the equitable remedy of surcharge; and reforming the plan to accord with Sullivan's reasonable expectations is an appropriate equitable remedy. Finally, the court rejected Verizon's arguments supporting its denial that it committed a fiduciary breach. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Sullivan-Mestecky v. Verizon Communications, Inc." on Justia Law
The National Retirement Fund v. Metz Culinary Management, Inc.
Metz appealed the district court's judgment vacating an arbitration award that held that interest rate assumptions for purposes of withdrawal from a multiemployer pension plan liability are those in effect on the last day of the year preceding the employer's withdrawal. The district court held, however, that section 4213 of the Employee Retirement Income Security Act (ERISA) does not require actuaries to calculate withdrawal liability based on interest rate assumptions used prior to an employer's withdrawal from a plan, and that interest rate assumptions must be affirmatively reached and may not roll over automatically from the preceding plan year.The Second Circuit vacated the district court's judgment, holding that interest rate assumptions for withdrawal liability purposes must be determined as of the last day of the year preceding the employer's withdrawal from a multiemployer pension plan. Furthermore, absent any change to the previous plan year's assumption made by the Measurement Date, the interest rate assumption in place from the previous plan year will roll over automatically. Accordingly, the court remanded with directions to enter judgment for Metz and to remand any remaining issues to the arbitrator. View "The National Retirement Fund v. Metz Culinary Management, Inc." on Justia Law
Laurent v. PricewaterhouseCoopers LLP
The Second Circuit vacated the district court's dismissal of plaintiffs' claims alleging that the terms of their employee retirement benefits plan violated the Employment Retirement Income Security Act (ERISA). In a prior appeal, the court affirmed the district court's holding that the plan violated the statue and remanded to the district court for consideration of the appropriate relief. On remand, defendants moved on the pleadings under Federal Rule of Civil Procedure 12(c), contending that the relief requested by plaintiffs was unavailable as a matter of law. The district court agreed and granted defendants' motion.The court held that section 502(a)(3) authorizes district courts to grant equitable relief ‐‐ including reformation ‐‐ to remedy violations of subsection I of ERISA, even in the absence of mistake, fraud, or other conduct traditionally considered to be inequitable. Furthermore, the district court is authorized to grant plaintiffs' proposed remedy of enforcement of the reformed plan under section 502(a)(1)(B). Accordingly, the court remanded for further proceedings. View "Laurent v. PricewaterhouseCoopers LLP" on Justia Law