Justia ERISA Opinion SummariesArticles Posted in US Court of Appeals for the Tenth Circuit
M. v. Premera Blue Cross
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
Ellis v. Liberty Life Assurance Co
In 2014, Liberty Life Assurance Company of Boston rejected the claim for long-term disability benefits by plaintiff-appellee Michael Ellis. As part of its employee-benefit plan, Comcast Corporation, for whom Ellis worked in Colorado from 1994 until 2012, had obtained from Liberty in 2005 a Group Disability Income Policy (the Policy). Ellis sought review of Liberty’s denial of benefits in the United States District Court for the District of Colorado under the Employee Retirement Income Security Act of 1974 (ERISA). The district court, reviewing the denial de novo, ruled that Liberty’s denial was not supported by a preponderance of the evidence. Liberty appealed, contending the court should have reviewed its decision under an abuse-of-discretion standard but that it should prevail even under a de novo standard. Ellis defended the district court’s choice of a de novo standard but argued he should prevail under either standard of review. The Tenth Circuit determined a plan administrator’s denial of benefits was ordinarily reviewed by the court de novo; but if the policy gave the administrator discretion to interpret the plan and award benefits, judicial review was for abuse of discretion. The Policy at issue provided that it was governed by the law of Pennsylvania, which was where Comcast was incorporated and has its principal place of business. Among its terms was one that gave Liberty discretion in resolving claims for benefits. A Colorado statute enacted in 2008, however, forbade such grants of discretion in insurance policies. The parties disputed whether the statute applied to the Policy under Colorado law, and whether Colorado law governed. The Tenth Circuit held that in this dispute the law of Pennsylvania was controlling. Liberty’s denial of benefits was therefore properly reviewed for abuse of discretion. Under that standard the denial had to be upheld. View "Ellis v. Liberty Life Assurance Co" on Justia Law
Van Steen v. Life Insurance Company N.A.
Life Insurance Company of North America’s terminated plaintiff-appellant Carl Van Steen’s long-term disability benefits under Lockheed Martin’s ERISA Plan. Life Insurance Company of North America (LINA) appealed the district court’s finding that its decision to terminate Van Steen’s benefits was arbitrary and capricious. Van Steen, in turn, appealed the district court’s denial of his attorney’s fees request. Van Steen was physically assaulted during an altercation while walking his dog. The assault resulted in a mild traumatic brain injury (mTBI) that impacted Van Steen’s cognitive abilities that prevented him from returning to full time work; Van Steen was eventually allowed to return to part-time work on a daily basis roughly six weeks later. Even on a part-time schedule, Van Steen experienced cognitive fatigue and headaches that required him to frequently rest. Due to his inability to stay organized and keep track of deadlines after the assault, Van Steen received poor feedback on his job performance. Van Steen’s claim for partial long-term disability benefits was approved on March 30, 2012. Roughly a year later, LINA reviewed Van Steen’s file, contacted his doctors, and confirmed that Van Steen’s condition and restrictions were permanent as he was “not likely to improve.” Despite this prognosis, LINA sent Van Steen a letter one week later terminating his long-term disability benefits, explaining that “the medical documentation on file does not continue to support the current restrictions and limitations to preclude you from resuming a full-time work schedule.” Having exhausted his administrative appeals under the Plan, Van Steen next sought relief before the district court. The district court reversed LINA’s decision to terminate Van Steen’s partial long-term disability benefits on the grounds that it was arbitrary and capricious, but denied Van Steen’s request for attorney’s fees. The Tenth Circuit agreed with the district court’s reversal of LINA’s decision to terminate Van Steen’s coverage. The Court also found that Van Steen was not eligible for attorney fees: “Van Steen’s arguments fail to convince us that the district court’s decision was based on a clear error of judgment or exceeded the bounds of permissible choice.” View "Van Steen v. Life Insurance Company N.A." on Justia Law
Medina v. Catholic Health Initiatives
The Employee Retirement Income Security Act of 1974 (ERISA), generally exempts from its requirements “church plans”: employee-benefit plans established and maintained by churches for their employees. ERISA also extends that church-plan exemption to "principal-purpose" organizations. Catholic Health Initiatives (CHI), a nonprofit organization created to carry out the Roman Catholic Church’s healing ministry, operates 92 hospitals and numerous other healthcare facilities in 18 states. CHI offers a retirement plan for its employees, with more than 90,000 participants and beneficiaries, and nearly $3 billion in plan assets. Janeen Medina, a CHI employee, filed a class action, alleging that CHI’s retirement plan failed to satisfy the statutory criteria for the church-plan exemption. She contended that, since the plan did not qualify for the exemption, CHI should have complied with the reporting and funding requirements of ERISA. Medina also argued the individual defendants who administered the plan breached their fiduciary duties by failing to comply with ERISA. And, Medina argued, even if the CHI plan did qualify as a church plan, the exemption violated the Establishment Clause of the United States Constitution. The district court held that CHI’s plan was a church plan that qualified for the ERISA exemption. On appeal, the Tenth Circuit agreed, concluding that CHI’s plan satisfied the statutory requirements for the church-plan exemption as a proper principal-purpose organization. The ERISA exemption, moreover, does not run afoul of the United States Constitution’s Establishment Clause. View "Medina v. Catholic Health Initiatives" on Justia Law
Pioneer Centres Holding Co v. Alerus Financial, N.A.
The Pioneer Centres Holding Company Employee Stock Ownership Plan and Trust and its trustees sued Alerus Financial, N.A. for breach of fiduciary duty in connection with the failure of a proposed employee stock purchase. The district court granted summary judgment to Alerus after determining the evidence of causation did not rise above speculation. The Plan appealed, claiming the district court erred in placing the burden to prove causation on the Plan rather than shifting the burden to Alerus to disprove causation once the Plan made out its prima facie case. In the alternative, the Plan argued that even if the district court correctly assigned the burden of proof, the Plan established, or at the very least raised a genuine issue of material fact regarding, causation. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Pioneer Centres Holding Co v. Alerus Financial, N.A." on Justia Law