Justia ERISA Opinion Summaries

As a full-time Wal-Mart associate, Chelf purchased basic life insurance, an optional Prudential life insurance policy, and short-term and long-term disability insurance; premiums were deducted from his paycheck. Chelf obtained a leave of absence; his last workday was October 17, 2014. When his short-term benefits had maxed out, he obtained long-term disability benefits. Chelf was not required to pay premiums for his disability benefits while he was receiving those benefits. Nonetheless, Wal-Mart continued to charge him those premiums. Chelf paid life insurance premium payments during his leave. Chelf died in April 2016.After denial of her claims for benefits, Chelf’s widow filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1001–1461 (ERISA). She alleged Wal-Mart incorrectly treated the life insurance coverage as terminated before Chelf’s death and did not inform him that the policy had terminated; assessed certain premiums in error; failed to inform Chelf of that error; failed to remit premiums to Prudential; failed to inform Chelf that his accrued paid time off could cover his premiums; and failed to notify him of his right to convert his term life insurance policy.The district court dismissed, finding that Chelf’s allegations fell “outside the scope of ERISA’s fiduciary requirements or administrative functions.” The Sixth Circuit reversed with respect to allegations concerning the mishandling of premiums. The remaining allegations sought to impose liability for failure to disclose information that is not required to be disclosed under ERISA. View "Chelf v. Prudential Insurance Co." on Justia Law

After more than a decade of employment, a seizure disorder ended Dr. Autran’s career as a P&G research scientist. Autran received total-disability benefits under P&G’s Health and Long-Term Disability Plan in 2012-2018. The Committee terminated those benefits after concluding that Autran no longer qualified as totally disabled within the meaning of the Plan, and awarded him his remaining 19 weeks of partial disability benefits. Autran sued under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). He died while the suit was pending.The Sixth Circuit upheld summary judgment in favor of the Committee. Because the Plan delegates discretionary authority to the Committee to decide benefits claims, the court applied the deferential arbitrary-and-capricious test. The Committee had rational reasons to depart from the earlier total-disability finding. Among other new evidence, a doctor who performed many objective tests on Autran for over six hours found no basis to conclude that he suffered from a debilitating condition. Thorough medical opinions gave the Committee a firm foundation to conclude that Autran did not, in the Plan’s words, suffer from a “mental or physical condition” that the “medical profession” would consider “totally disabling.” View "Autran v. P&G Health & Long Term Disability Benefit Plan" on Justia Law

Simpson's insurer, the Fund, paid Simpson’s medical costs ($16,225) arising from a car accident. Simpson hired the Firm to represent her in a personal injury suit. The Fund maintained a right of subrogation and reimbursement. Simpson settled her suit for $30,000. After depositing the settlement funds in a trust account, the Firm paid $9,817.33 to Simpson, $1,000.82 to other lienholders, and $10,152.67 to its own operating account for fees and expenses, offering the Fund $9,029.18. The Fund sued under the Employee Retirement Income Security Act (ERISA) section 502(a)(3), claiming an equitable lien of $16,225. The Firm issued a $9,029.18 check to the Fund, exhausting the settlement funds.The district court issued a TRO requiring the Firm to maintain $7,497.99 in its operating account. The Firm argued that the Fund sought a legal remedy because the Firm no longer possessed the settlement funds; ERISA 502(a)(3) only authorizes equitable remedies. The Fund argued that it sought an equitable remedy because the settlement funds were in the Firm’s possession pursuant to the TRO and cited the lowest intermediate balance test: a defendant fully dissipates a plaintiff’s claimed funds (by spending money from the commingled account to purchase untraceable items) only if the balance in the commingled account dipped to $0 between the date the defendant commingled the funds and the date the plaintiff asserted its right to the funds. The district court granted the Firm summary judgment, reasoning that the Firm dissipated the settlement funds before the TRO issued; the Fund could not point to specific recoverable funds held by the Firm and sought a legal remedy. The Sixth Circuit affirmed, concluding that no issues had been preserved for review. View "Sheet Metal Workers' Health & Welfare Fund of North Carolina v. Law Office of Michael A. DeMayo, LLP" on Justia Law

Card was diagnosed with “chronic lymphocytic leukemia,” which can cause fatigue. Card alleges her worsening fatigue left her unable to perform her job as a night-shift nurse. She applied for disability benefits under an Employee Retirement Income Security Act (ERISA) plan administered by Principal, which denied her requests for short-term, long-term, and total disability benefits. Card sued. The district court granted Principal summary judgment. The Sixth Circuit reversed and remanded the case to Principal for further proceedings. Principal granted Card short-term disability benefits but requested additional information for her other claims. Card then filed motions in the district court, seeking attorney’s fees and asking the court to reopen the case because Principal had not reached a benefits decision for her other claims within the 45 days allegedly required by ERISA . The district court issued a “virtual order” on its docket, denying the motions for lack of jurisdiction.The Sixth Circuit first held that it had jurisdiction to review that order then vacated and remanded to the district court. A district court retains jurisdiction over a beneficiary’s ERISA suit during the remand. "As in every other ERISA case in this procedural posture," the prior decision remanded to the district for it to retain jurisdiction while Principal engaged in the new benefits determination. View "Card v. Principal Life Insurance Co." on Justia Law

Sofco terminated its collective bargaining agreement (CBA) with a local union. The Ohio Operating Engineers Pension Fund then assessed almost a million dollars in withdrawal liability against Sofco under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1002(41. Sofco challenged the assessment in ERISA-mandated arbitration. The arbitrator upheld the assessment. The district court affirmed in part and reversed in part.The Sixth Circuit affirmed in part. The Fund’s actuary used a 7.25% growth rate on assets for minimum funding purposes but for withdrawal-liability purposes, used the “Segal Blend,” which violated ERISA’s mandate that the interest rate for withdrawal liability calculations be based on the “anticipated experience under the plan.” The court vacated the district court’s decision upholding the Fund’s assessment of partial-withdrawal liability for 2011-2013 and remanded. A construction-industry employer is liable for a partial withdrawal when its contributions decline to an “insubstantial portion of its work in the craft and area jurisdiction of the collective bargaining agreement of the type for which contributions are required.” The CBA clearly establishes the union’s jurisdiction over forklift work and Sofco’s obligations to contribute to the fund for that work. The district court did not err by concluding that the Fund properly included forklift work in the withdrawal liability calculation. View "Sofco Erectors, Inc. v. Trustees of the Ohio Operating Engineers Pension Fund" on Justia Law

The Labor Management Relations Act forbids employers from directly giving money to unions, 29 U.S.C. 186(a); an exception allows an employer and a union to operate a trust fund for the benefit of employees. Section 186(c)(5)(B) requires the trust agreement to provide that an arbitrator will resolve any “deadlock on the administration of such fund.” Several construction companies and one union established a trust fund to subsidize employee vacations. Six trustees oversaw the fund, which is a tax-exempt entity under ERISA 26 U.S.C. 501(c)(9). A disagreement arose over whether the trust needed to amend a tax return. Three trustees, those selected by the companies, filed suit, seeking authority to amend the tax return. The three union-appointed trustees intervened, arguing that the dispute belongs in arbitration.The court agreed and dismissed the complaint. The Sixth Circuit affirmed. While ERISA plan participants or beneficiaries may sue for a breach of statutory fiduciary duty in federal court without exhausting internal remedial procedures, this complaint did not allege a breach of fiduciary duties but rather alleges that the employer trustees’ own fiduciary duties compelled them to file the action to maintain the trust’s compliance with tax laws. These claims were “not directly adversarial to the [union trustees] or to the Fund.” View "Baker v. Iron Workers Local 25" on Justia Law

In 2002, Nolan’s employer, DTE, created a cash balance pension plan and invited its existing employees to transfer from their traditional defined benefit plan to the new plan. Nolan accepted. When she retired in 2017, DTE told Nolan that her monthly pension benefit would be what she had accrued as of 2002 under the old plan, despite her participation in the new cash balance plan. Nolan brought a class action under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001(a)–(b), alleging that DTE made misleading promises and failed to explain the new plan’s risks. The district court dismissed. The Sixth Circuit affirmed in part, finding Nolan’s procedural claim untimely. Even accepting Nolan’s allegations as true, Nolan failed to state a claim under ERISA section 204(h); DTE satisfied the requirement to make a good faith effort to comply even though the notice provided to employees was ultimately inadequate under ERISA section 102. Reversing in part, the court found that Nolan stated a plausible claim that DTE’s notice was defective under section 102 because it failed to describe the plan in a manner understandable to the average participant that employees transferring to the new plan would not actually receive any new benefits if the benefit accrued under the new plan did not catch up to their frozen traditional plan benefit or the effect that interest rates could have on depreciating the already-earned benefits during conversion. View "Nolan v. Detroit Edison Co." on Justia Law

Davis, insured under a Hartford long-term disability policy, began missing work due to chronic back pain, neuropathy, and fatigue caused by multiple myeloma. Relying on the opinion of Davis’s oncologist, Dr. Reddy, Hartford approved Davis’s claim for short-term disability benefits through April 17, 2012. In June, Hartford approved Davis for long-term disability benefits, retroactive to April, for 24 months. Davis could continue to receive benefits beyond that time if he was unable to perform one or more of the essential duties of “Any Occupation” for which he was qualified by education, training, or experience and that has comparable “earnings potential.” Reddy's subsequent reports were inconsistent. An investigator found “discrepancies" based on surveillance. Davis’s primary care physician and neurologist both concluded that Davis could work full-time under described conditions. Reddy disagreed, but would not answer follow-up questions. An orthopedic surgeon conducted an independent review and performed an examination, and reported that Davis was physically capable of “light duty or sedentary work” within certain restrictions. Other doctors agreed. Hartford notified Davis that he would be ineligible for benefits after April 17, 2014.Davis filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a). The Sixth Circuit affirmed summary judgment in favor of Hartford. Hartford reasonably concluded that Davis could work full-time, under certain limitations; the decision was not arbitrary. View "Davis v. Hartford Life & Accident Insurance Co." on Justia Law

Donna’s former husband, Carl, retired from Ford in 1998 and participated in Ford’s retirement plan. “In the event of an error” in calculating a pension, the plan requires a beneficiary to return the overpayment “without limitation.” A committee runs the plan, with “discretionary authority" to reduce the repayment. Carl and Donna divorced in 2009. Donna received half of the marital portion of Carl’s pension. Donna agreed to postpone drawing the pension. In 2013, Ford offered a lump sum payment in place of future monthly benefits and a $351,690 retroactive payment for the postponed monthly benefits. After paying taxes, Donna invested some of the money and gave some to her children. Ford audited Donna’s benefits. It discovered that the retroactive pension payment mistakenly included benefits from 1998, when Carl retired, instead of 2009. The payment should have been $108,500. Ford requested repayment; the committee invited Donna to apply for a hardship reduction. The application required disclosure of her finances, including her other substantial retirement funds and an inheritance. Donna did not apply; she sued.The Sixth Circuit affirmed summary judgment for Ford. The committee’s actions were neither wrong nor arbitrary. Donna did not establish that Ford’s inclusion of an incorrect retroactive-payment amount constituted constructive fraud. She knew that the retroactive payment was too high when she got it, the plan put her on notice that Ford could demand repayment, and she has the capacity to return the money. View "Zirbel v. Ford Motor Co." on Justia Law

Beginning in‌ ‌‌2017,‌ ‌DaVita‌ ‌provided‌ ‌dialysis‌ ‌treatment‌ ‌to‌ ‌Patient‌ ‌A,‌ ‌who was ‌diagnosed‌ ‌ with‌ ‌end-stage‌ ‌renal‌ ‌disease‌ ‌(ESRD).‌ ‌‌Patient‌ ‌A‌ assigned his‌ ‌insurance‌ ‌rights‌ ‌to‌ ‌DaVita.‌ ‌Through‌ August‌ ‌2018,‌ ‌the‌ ‌costs‌ ‌of‌ ‌Patient‌ ‌A’s‌ ‌dialysis‌ ‌were‌ ‌reimbursed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Health‌ ‌Benefit‌ ‌Plan,‌ ‌governed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Retirement‌ ‌Income‌ ‌Security‌ ‌Act‌ ‌(ERISA), ‌at‌ ‌its‌ ‌bottom‌ ‌tier,‌ ‌which‌ ‌applied‌ ‌to‌ ‌providers‌ ‌who‌ ‌are‌ ‌“out-of-network.”‌ ‌All‌ ‌dialysis‌ ‌providers‌ were‌ ‌out-of-network.‌ ‌While‌ ‌most‌ ‌out-of-network‌ ‌providers‌ ‌are‌ ‌reimbursed‌ ‌in‌ ‌the‌ ‌bottom‌ ‌tier‌ ‌based‌ ‌on‌ ‌a‌ ‌“reasonable‌ ‌and‌ ‌customary”‌ ‌fee‌ ‌as‌ ‌understood‌ ‌in‌ ‌the‌ ‌healthcare‌ ‌industry,‌ ‌dialysis‌ ‌providers‌ ‌are‌ ‌subject‌ ‌to‌ ‌an‌ ‌“alternative‌ ‌basis‌ ‌for‌ ‌payment”;‌‌‌ ‌the‌ ‌Plan‌ ‌reimburses‌ ‌at‌ 87.5%‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌rate.‌ ‌Patient‌ ‌A‌ ‌was exposed‌ ‌to‌ ‌higher‌ ‌copayments,‌ ‌coinsurance‌ ‌amounts,‌ ‌and‌ ‌deductibles and ‌was‌ ‌allegedly‌ ‌at‌ ‌risk‌ ‌of‌ ‌liability‌ ‌for‌ ‌the‌ ‌balance‌ ‌of‌ ‌what‌ ‌was‌ ‌not‌ ‌reimbursed‌ .‌ ‌The‌ ‌Plan‌ ‌identified‌ ‌dialysis‌ ‌as‌ ‌subject‌ ‌to‌ ‌heightened‌ ‌scrutiny,‌ ‌ ‌which‌ ‌allegedly‌ ‌incentivizes‌ ‌dialysis‌ ‌patients‌ ‌to‌ ‌switch‌ ‌to‌ ‌Medicare. Patient‌ ‌A‌ ‌switched‌ ‌to‌ ‌Medicare.‌ ‌DaVita‌ ‌and‌ ‌Patient‌ ‌A‌ ‌sued,‌ ‌alleging‌ ‌that‌ ‌the‌ ‌Plan‌ ‌treats‌ ‌dialysis‌ ‌providers‌ ‌differently‌ ‌from‌ ‌other‌ ‌medical‌ ‌providers‌ ‌in‌ ‌violation‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌Secondary‌ ‌Payer‌ ‌Act‌ ‌(MSPA)‌ ‌and‌ ‌ERISA.‌ ‌ ‌ ‌ The‌ ‌Sixth‌ ‌Circuit‌ ‌reversed,‌ ‌in‌ ‌part,‌ ‌the‌ ‌dismissal‌ ‌of‌ ‌the‌ ‌claims.‌ ‌A‌ ‌conditional‌ ‌payment‌ ‌by‌ ‌Medicare‌ ‌is‌ ‌required‌ ‌as‌ ‌a‌ ‌precondition‌ ‌to‌ ‌suing‌ ‌under‌ ‌the‌ ‌MSPA’s‌ ‌private‌ ‌cause‌ ‌of‌ ‌action;‌ ‌the‌ ‌complaint‌ ‌sufficiently alleges ‌such‌ ‌a‌ ‌payment‌.‌ ‌DaVita‌ ‌plausibly‌ ‌alleged‌ ‌that‌ ‌the‌ ‌Plan‌ ‌violates‌ ‌the‌ ‌nondifferentiation‌ ‌provision‌ ‌of‌ ‌the‌ ‌MSPA,‌ ‌resulting‌ ‌in‌‌ ‌denials‌ ‌of‌ ‌benefits‌ ‌and‌ ‌unlawful‌ ‌discrimination‌ ‌under‌ ‌ERISA.‌ ‌ View "DaVita, Inc. v. Marietta Memorial Hospital Employee Health Benefit Plan" on Justia Law