Justia ERISA Opinion Summaries
Rozo v. Principal Life Insurance Co.
The Eighth Circuit reversed the district court's grant of summary judgment to Principal in an action brought under the Employee Retirement Income Security Act (ERISA). The court held that Principal is a fiduciary when its sets the Composite Crediting Rate (CCR) for its 401(k) retirement plan. Under the two-part test in Teets v. Great-West Life & Annuity Ins. Co., 921 F.3d 1200 (10th Cir. 2019), the court held that Principal's setting of the CCR does not conform to a specific term of its contract with the employer plan, and the plan sponsors here did not have the unimpeded ability to reject the service provider's action or terminate the relationship. Accordingly, the court reversed and remanded for further proceedings. View "Rozo v. Principal Life Insurance Co." on Justia Law
Martinez v. Sun Life Assurance Co. of Canada
The First Circuit affirmed the judgment of the district court in favor of Sun Life Assurance Company of Canada finding that Sun Life properly permitted an offset of Appellant's benefits under tis employer-sponsored long-term disability insurance policy (the Plan) by the amount of Appellant's service-connection disability compensation (Veterans' Benefits), holding that the district court did not err. Specifically, the First Circuit held (1) Appellant's Veterans' Benefits fell squarely within the definition of "Compulsory Benefit Act or Law"; (2) that the district court did not err by concluding as a matter of law that Veterans' Benefits unambiguously qualify as a form of "Other Income Benefit" covered by the Plan's offset provision; and (3) the district court did not err by rejecting as a matter of law Appellant's assertion that Sun Life's offset determination was motivated, at least in part, by Appellant's military service in violation of the Uniformed Services Employment and Reemployment Rights Act. View "Martinez v. Sun Life Assurance Co. of Canada" on Justia Law
Retirement Plans Committee of IBM v. Jander
In 2014, the Supreme Court held that a claim for breach of the duty of prudence imposed on plan fiduciaries by the Employee Retirement Income Security Act (ERISA) on the basis of inside information, must plausibly allege an alternative action that would have been consistent with securities laws and that a prudent fiduciary would not have viewed as more likely to harm the fund than to help it. The ERISA duty of prudence does not require a fiduciary to break the law and cannot require the fiduciary of an Employee Stock Ownership Plan (ESOP) “to perform an action—such as divesting the fund’s holdings of the employer’s stock on the basis of inside information—that would violate the securities laws.” In 2018, the Second Circuit reinstated a claim for breach of fiduciary duty under ERISA brought by participants in IBM’s 401(k) plan who suffered losses from their investment in IBM stock. The Supreme Court vacated and remanded, characterizing the question as what it takes to plausibly allege an alternative action “that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the fund than to help it” and whether that pleading standard can be satisfied by generalized allegations that the harm of an inevitable disclosure of an alleged fraud generally increases over time.” The Court concluded that the Second Circuit did not address those questions and noted that the views of the Securities and Exchange Commission might “well be relevant” to discerning the content of ERISA’s duty of prudence in this context. View "Retirement Plans Committee of IBM v. Jander" 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
Miller v. Hartford Life & Accident Insurance Co.
The Eighth Circuit affirmed the district court's dismissal of plaintiff's complaint against Hartford Life in an Employee Retirement Income Security Act (ERISA) action. The court held that the district court did not err by dismissing the complaint with prejudice, because substantial evidence supported Hartford Life's decision to terminate benefits based on exhaustion of mental illness benefits and the lack of a disabling physical condition. In this case, Hartford Life found no disabling physical condition or mental illness based on the medical evidence and the opinions of treating, examining, and reviewing physicians. View "Miller v. Hartford Life & Accident Insurance Co." on Justia Law
Jones v. Aetna Life Insurance Co.
When Aetna terminated plaintiff's disability benefits, she filed an Employee Retirement Income Security Act suit. The Eighth Circuit affirmed the district court's judgment on remand, holding that the district court did not err by determining that plaintiff failed to administratively exhaust her breach of fiduciary duty claim. View "Jones v. Aetna Life Insurance Co." on Justia Law
Lehman v. Nelson
The Ninth Circuit filed (1) an order granting a request for publication, withdrawing the panel's prior memorandum disposition, and directing the filing of an opinion; and (2) an opinion affirming the district court's grant of summary judgment in favor of plaintiffs in an Employee Retirement Income Security Act (ERISA) class action concerning pension contributions. Amendments 14 and 24 of the fund had the effect of withholding at least $1.00 per hour from all employer contributions. Plaintiff filed a class action against the trustees under ERISA. In a prior appeal, Lehman I, the panel held that the trustees could not keep the $1.00 hourly withholdings they had made pursuant to Amendment 14. The panel affirmed the district court's grant of summary judgment for plaintiff and awarded damages to the class. The panel then remanded for the district court to address Amendment 24. On remand, the district court again granted summary judgment in favor of the class. The panel affirmed the district court's determination that Amendment 24 violated the plain language of Article 5 of the Pacific Coast Pension Plan, which mandated that the Plan collect and transfer all contributions received on behalf of travelers. The panel explained that the trustee's interpretation of Amendment 24 with regard to travelers' contributions was inconsistent with the Plan's own definition of "contribution." View "Lehman v. Nelson" on Justia Law
Moore v. Estate of Moore
Defendant Beulah Jean James Moore ("Beulah") appealed the grant of summary judgment entered in favor of plaintiff Billy Edward Moore ("Billy"), individually and as executor of the estate of his brother and Beulah's husband, Jimmy Lee Moore ("Jimmy"), in an action filed by Billy seeking the enforcement of a prenuptial agreement. The Alabama Supreme Court concluded summary judgment was appropriate. Beulah argued that language in the prenup discussing "spousal consents or waivers" granted her the proceeds of Jimmy's 401(k) plan and the pension plan unless a spousal waiver was executed . However, the Court found agreement made clear that Jimmy and Beulah agreed that the separate property each brought into the marriage--including the 401(k) plan and the pension plan--would remain separate. Jimmy and Beulah further agreed that neither of them would "claim, demand, assert any right to, take or receive any part of the property of the other as described on Schedules 1 and 2," which included the 401(k) plan and the pension plan. The second clause of section 4.4 allowed the owner of "an IRA or other plan account" to "direct" the "distribution of benefits" to one through a "beneficiary designation." Under this clause, Jimmy was permitted to name Billy as the designated beneficiary of the 401(k) plan and the pension plan, which he had done before he married Beulah, who had, in turn, renounced her claim to the plans. "Nothing in section 4.4 suggests that the failure to execute a spousal consent or waiver changes the parties' clear intent throughout the entire prenuptial agreement to renounce claims to the other's property; instead, the purpose of the requirement is to ensure that the parties' desires to retain control over the distribution of their accounts through a beneficiary designation is accomplished." Under those circumstances, Beulah breached the prenuptial agreement by retaining the benefits from the 401(k) plan and the pension plan. Thus, the trial court properly entered a summary judgment in favor of Billy. View "Moore v. Estate of Moore" on Justia Law
Stone v. Signode Industrial Group LLC
Signode assumed an obligation to pay health-care benefits to a group of retired steelworkers and their families. Signode then exercised its right to terminate the underlying benefits agreement and also stopped providing the promised benefits to the retired steelworkers and their families, despite contractual language providing that benefits would not be “terminated … notwithstanding the expiration” of the underlying agreement. The retirees and the union filed suit under the Labor-Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132(a)(1)(B). The Seventh Circuit affirmed the district court’s entry of a permanent injunction, ordering Signode to reinstate the benefits. The agreement provided for vested benefits that would survive the agreement’s termination. While there is no longer a presumption in favor of lifetime vesting, the court applied ordinary contract law interpretation rules and concluded that the agreement unambiguously provided retirees with vested lifetime health-care benefits. Even if the agreement were ambiguous, industry usage and the behavior of the parties here provide enough evidence to support vesting such that resolution of any ambiguity in favor of the plaintiffs as a matter of law would still be correct. View "Stone v. Signode Industrial Group LLC" on Justia Law