Justia ERISA Opinion Summaries

The case involves the United States Department of Labor (DOL) and Ascent Construction, Inc., its CEO Bradley Knowlton, and the Ascent Construction, Inc. Employee Stock Ownership Plan (the Plan). The DOL investigated Ascent and Knowlton for potential breaches of their fiduciary duties under the Employee Retirement Income Security Act (ERISA). The DOL found that Knowlton had deposited over $311,000 of the Plan’s cash into Ascent’s checking accounts and used it to pay Ascent’s business expenses. The DOL also discovered that a former Ascent employee had requested a distribution from his retirement account but never received it, even though the Plan’s custodian had issued a distribution check at Knowlton’s request.The DOL filed a lawsuit alleging that Knowlton and Ascent had violated ERISA’s fiduciary-duty standard and prohibited-transaction rules. The DOL sought a preliminary injunction to remove Knowlton and Ascent as Plan fiduciaries and appoint an independent fiduciary to prevent further ERISA violations and dissipation of the Plan’s assets. The district court granted the DOL’s motion, and the defendants filed an interlocutory appeal.While the appeal was pending, the case proceeded in the lower court. The DOL filed an amended complaint and discovery commenced. The district court later entered a default judgment against the defendants due to their willful failure to engage in the litigation process and comply with the court’s orders. The court also issued a permanent injunction that superseded the preliminary injunction, permanently barring Knowlton and Ascent from serving as trustee and administrator of the Plan.The United States Court of Appeals for the Tenth Circuit dismissed the defendants' appeal as moot. The court reasoned that the preliminary injunction dissolved automatically with the entry of the final judgment, regardless of whether the final judgment was issued on the merits or by way of default judgment. The court concluded that granting the defendants’ requested relief—vacatur of the preliminary injunction—would have no “effect in the real world.” View "Su v. Ascent Construction" on Justia Law

In a case involving the Employee Retirement Income Security Act of 1974 (ERISA), a plan participant, Ian C., sought coverage for his son, A.C., to receive treatment at Catalyst Residential Treatment for mental health and substance abuse issues. UnitedHealthcare Insurance Company (United), the claims fiduciary for the plan, initially covered the treatment but subsequently denied coverage. Ian C. appealed this denial internally, a process in which United upheld its original decision. Ian C. then took his case to federal district court, alleging that United's denial violated his right to a "full and fair review" of his claim under ERISA. The district court ruled in favor of United.On appeal to the United States Court of Appeals for the Tenth Circuit, the court held that United's denial of benefits was arbitrary and capricious, violating ERISA regulations guaranteeing a "full and fair review" of claims. In particular, the court found that United had failed to consider A.C.'s substance abuse as an independent ground for coverage in their decision to deny benefits, in violation of their fiduciary duties under ERISA. The court therefore reversed the district court's decision. View "C., et al. v. United Healthcare Insurance Company" on Justia Law

Plaintiff-Appellant E.W. was a participant in an employer-sponsored health insurance plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). E.W.’s daughter, Plaintiff-Appellant I.W., was a beneficiary of E.W.’s plan. From September 2016 through December 2017, I.W. received treatment in connection with mental health challenges and an eating disorder at Uinta Academy (“Uinta”), an adolescent residential treatment center in Utah. In January 2017, Defendants-Appellees Health Net Insurance Company and Health Net of Arizona, Inc. began covering I.W.’s treatment under E.W.’s ERISA plan (the “Plan”). Effective February 23, 2017, Health Net determined I.W.’s care at Uinta was no longer medically necessary, and it denied coverage from that day forward. In assessing whether to discontinue coverage, Health Net applied the McKesson InterQual Behavioral Health 2016.3 Child and Adolescent Psychiatry Criteria. Health Net determined I.W. did not satisfy the InterQual Criteria within the relevant period and notified Plaintiffs in a letter dated March 1, 2017. Plaintiffs allegedly did not receive Health Net’s March 2017 denial letter, and I.W. remained at Uinta until December 2017, when she was formally discharged. After receiving notice in May 2018 that Health Net had denied coverage effective February 23, 2017, Plaintiffs appealed the decision. Health Net again determined I.W. did not satisfy the InterQual Criteria during the relevant period and upheld its initial denial. Plaintiffs then appealed to an external reviewer, which upheld the decision to deny coverage. Health Net moved to dismiss plaintiffs' legal claims under ERISA and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”). The district court denied Plaintiffs’ motion and granted summary judgment to Health Net. After review, the Tenth Circuit affirmed the district court’s decision granting summary judgment to Health Net on Plaintiffs’ ERISA claim; the Court reversed the finding Plaintiffs failed to state a claim under MHPAEA; and the case was remanded for further proceedings. View "W., et al. v. Health Net Life Insurance Company, et al." on Justia Law

Appellants Cole Matney and Paul Watts (together, "Matney") participated in an employer-sponsored retirement plan (the Plan). They brought a putative class action suit against Appellees, Barrick Gold of North America, Inc. (Barrick Gold), Barrick Gold’s Board of Directors (Board), and the Barrick U.S. Subsidiaries Benefits Committee (Committee)—for breach of fiduciary duty and failure to monitor fiduciaries under sections 409 and 502 of the Employee Retirement Income Security Act (ERISA). Matney alleged the Committee breached the fiduciary duty of prudence by offering high-cost funds and charging high fees. He claimed Barrick Gold and the Board were responsible for failing to monitor the Committee’s actions. The district court dismissed the case with prejudice, concluding the first amended complaint did not plausibly allege any breach of fiduciary duty under ERISA. Finding no reversible error in this dismissal, the Tenth Circuit affirmed. View "Matney, et al. v. Barrick Gold of North America, et al." on Justia Law

In 2019, the Oklahoma legislature unanimously passed the Patient’s Right to Pharmacy Choice Act. In response to the Act’s passage, the Pharmaceutical Care Management Association (PCMA), a trade association representing PBMs, sued to invalidate the Act, alleging that the Employee Retirement Income Security Act of 1974 (ERISA), and Medicare Part D, preempted the Act. The district court ruled that ERISA did not preempt the Act but that Medicare Part D preempted six of the thirteen challenged provisions. PCMA appealed the court’s ERISA ruling on four provisions of the Act and the court’s Medicare Part D ruling on one provision. After its review, the Tenth Circuit determined ERISA and Medicare Part D preempted the four challenged provisions, and therefore reversed. View "Pharmaceutical Care v. Mulready, et al." on Justia Law

Plaintiffs David P. and his daughter L.P. sought to recover health care benefits under a medical plan David P. obtained through his employer. The district court awarded Plaintiffs benefits, determining that the manner in which Defendants processed Plaintiffs’ claims for coverage violated ERISA. The Tenth Circuit Court of Appeals agreed: Defendants’ deficient claims processing circumvented the dialogue ERISA mandates between plan participants claiming benefits and the plan administrators processing those benefits claims. The Court disagreed, however, with the district court as to the appropriate remedy for the violations of ERISA’s claims-processing requirements at issue here. "Rather than outright granting Plaintiffs their claimed benefits, we conclude, instead, that Plaintiffs’ claims for benefits should be remanded to Defendants for proper consideration." The case was remanded to the district court with directions to remand Plaintiffs’ benefits claims to Defendants. View "P., et al. v. United Healthcare Insurance, et al." on Justia Law

Middle schooler A.K. struggled with suicidal ideation for many years and attempted suicide numerous times, resulting in frequent emergency room visits and in-patient hospitalizations. A.K.’s physicians strongly recommended she enroll in a residential treatment facility to build the skills necessary to stabilize. Despite these recommendations and extensive evidence in the medical record, United Behavioral Health (“United”) denied coverage for A.K.’s stay at a residential treatment facility beyond an initial three month period. Her parents appealed United’s denial numerous times, requesting further clarification, and providing extensive medical evidence, yet United only replied with conclusory statements that did not address the evidence provided. As a result, A.K.’s parents brought this lawsuit contending United violated its fiduciary duties by failing to provide a “full and fair review” of their claim for medical benefits. Both sides moved for summary judgment, and the district court ruled against United. The issue this case presented for the Tenth Circuit's review was whether United arbitrarily and capriciously denied A.K. medical benefits and whether the district court abused its discretion in awarding A.K. benefits rather than remanding to United for further review. The Court ultimately concluded United did act arbitrarily and capriciously in not adequately engaging with the opinions of A.K.’s physicians and in not providing its reasoning for denials to A.K.’s parents. The Court also concluded the district court did not abuse its discretion by awarding A.K. benefits outright. View "D.K., et al. v. United Behavioral Health, et al." on Justia Law

Plaintiff Robert Harrison, a participant in a defined contribution retirement plan established by his former employer, filed suit under the Employee Retirement Income Security Act (ERISA) against the fiduciaries of the plan alleging that they breached their duties towards, and caused damages to, the plan. Harrison sought various forms of relief, including a declaration that Defendants breached their fiduciary duties, the removal of the current plan trustee, the appointment of a new fiduciary to manage the plan, an order directing the current trustee to restore all losses to the plan that resulted from the fiduciary breaches, and an order directing Defendants to disgorge the profits they obtained from their fiduciary breaches. Defendants moved to compel arbitration, citing a provision of the plan document. The district court denied that motion, concluding that enforcing the arbitration provision of the plan would prevent Harrison from effectively vindicating the statutory remedies sought in his complaint. The Tenth Circuit Court of Appeals found no reversible error in the district court’s ruling and affirmed. View "Harrison v. Envision Management Holding, Inc. Board, et al." on Justia Law

A class of employees who participated in Banner Health, Inc.’s 401(k) defined contribution savings plan accused Banner and other plan fiduciaries of breaching duties owed under the Employee Retirement Income Security Act (ERISA). A district court agreed in part, concluding that Banner had breached its fiduciary duty to plan participants by failing to monitor its recordkeeping service agreement with Fidelity Management Trust Company: this failure to monitor resulted in years of overpayment to Fidelity and corresponding losses to plan participants. During the bench trial, the employees’ expert witness testified the plan participants had incurred over $19 million in losses stemming from the breach. But having determined the expert evidence on losses was not reliable, the court fashioned its own measure of damages for the breach. Also, despite finding that Banner breached its fiduciary duty, the district court entered judgment for Banner on several of the class’s other claims: the court found that Banner’s breach of duty did not warrant injunctive relief and that Banner had not engaged in a “prohibited transaction” with Fidelity as defined by ERISA. The class appealed, arguing the district court adopted an improper method for calculating damages and prejudgment interest, abused its discretion by denying injunctive relief, and erred in entering judgment for Banner on the prohibited transaction claim. Finding no abuse of discretion or other reversible error, the Tenth Circuit affirmed the district court in each instance. View "Ramos v. Banner Health" on Justia Law

The parents of a teenage girl (L.M.) sued Premera Blue Cross under the Employee Retirement Income Security Act (ERISA), claiming improper denial of medical benefits. L.M. experienced mental illness since she was a young girl. L.M. was eventually placed in Eva Carlston Academy, where she obtained long-term psychiatric residential treatment. For this treatment, the parents submitted a claim to Premera under the ERISA plan’s coverage for psychiatric residential treatment. Premera denied the claim ten days into L.M.’s stay. But Premera agreed to cover the first eleven days of L.M.’s treatment, explaining the temporary coverage as a "courtesy." The parents appealed the denial of subsequent coverage, and Premera affirmed the denial based on a physician's medical opinion. The parents filed a claim for reimbursement of over $80,000 in out-of-pocket expenses for L.M.’s residential treatment at the Academy. Both parties moved for summary judgment, and the district court granted summary judgment to Premera based on two conclusions: (1) Premera’s decision was subject to the arbitrary-and- capricious standard of review; and (2) Premera had not acted arbitrarily or capriciously in determining that L.M.’s residential treatment was medically unnecessary. The district court granted summary judgment to Premera, and the parents appealed. After review, the Tenth Circuit concluded the district court erred by applying the arbitrary-and-capricious standard and in concluding Premera had properly applied its criteria for medical necessity. Given these conclusions, the Court reversed and remanded the matter back to the district court for de novo reevaluation of the parents’ claim. View "M. v. Premera Blue Cross" on Justia Law