Justia ERISA Opinion Summaries

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In a suit under the Employee Retirement Income Security Act (ERISA) 29 U.S.C. 1104(a)(1)(B), concerning the duty of prudence as applied to the investment options that a company offers to its employees for their 401(k) and other defined-contribution plans, plaintiffs (employees) argued: (1) that the employer, TriHealth, should not have offered its employees the option of investing their retirement money in actively managed funds, (2) that the performance of several funds was deficient at certain points, (3) that the overall fees charged for the investment options were too high, and (4) that even if a prudent investor might make available a wide range of valid investment decisions in a given year, only an imprudent financier would offer a more expensive share when he could offer a functionally identical share for less.The Sixth Circuit reversed, in part, the dismissal of the suit, rejecting the first three claims as foreclosed by recent precedent. However, the plaintiffs’ claim that TriHealth offered them more expensive mutual fund shares when shares with the same investment strategy, the same management team, and the same investments were available to their retirement plan at lower costs stated a plausible claim that TriHealth acted imprudently. View "Forman v. TriHealth, Inc." on Justia Law

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In December 2019, Coastline JX Holdings LLC (Coastline), assignee of a judgment creditor’s interest in a money judgment entered against Stephen Bennett, served on Seamount Financial Group, Inc. (Seamount) a notice of levy on Bennett’s assets in an individual retirement account and a profit-sharing plan. After the trial court ordered Seamount to liquidate Bennett’s interest in both assets and turn them over to the levying officer to be delivered to Coastline, Bennett moved for reconsideration of the trial court’s order under California Code of Civil Procedure section 1008. In his motion, Bennett first argued to the trial court that the profit-sharing plan was protected from levy because it qualified as a plan under the Employee Retirement Income Security Act of 1974 (ERISA). He also filed a motion to tax costs. The trial court denied Bennett’s motion, but informed the parties that, under its inherent authority, it would reconsider its prior order regarding the distribution of the profit-sharing plan only (not the individual retirement account) because the court previously had not considered the implications of it being an ERISA-compliant plan. After a hearing on the court’s own motion, the court reversed its prior decision and concluded the profit-sharing plan was exempt from levy due to preemption by ERISA. The court ordered Coastline to reimburse the profit-sharing plan any funds it had received under the court’s prior order. The trial court also denied Bennett’s motion to tax costs and the request for attorney fees that was included in his supplemental briefing. Coastline and Bennett each appealed. Finding no reversible error, the Court of Appeal affirmed the trial court’s order and rejected each of the parties’ arguments on appeal. View "Coastline JX Holdings LLC v. Bennett" on Justia Law

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The First Circuit reversed the judgment of the district court denying arbitration requested by two unions - the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and the United Steelworkers Local 12203 (collectively, Union) - on behalf of former two employees of the Boston Gas Company (Company) as to their claims for pension benefits, holding that this matter called for arbitration.The Union represented the two members in filing grievances regarding their underpaid pensions. The Union submitted the grievances to the Joint Pension Committee, which was unable to resolve the dispute. The Union subsequently sought arbitration over the grievances, but the Company refused to arbitrate. The First Circuit reversed, holding that it was up to an arbitrator, not a court, to determine the matters at issue in this case. View "United Steelworkers v. National Grid" on Justia Law

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Plaintiff’s spouse was a medical doctor employed by NCHMD, Inc., which is a subsidiary of NCH Healthcare System, Inc. NCHMD’s human resources staff helped the spouse complete enrollment paperwork for life insurance benefits through an ERISA plan. Plaintiff was the primary beneficiary under the plan, and NCH Healthcare was the named plan administrator. After Plaintiff’s spouse died, Plaintiff filed a claim for benefits with the plan’s insurance company. The insurance company refused to pay any supplemental benefits because it had never received the form. Plaintiff sued NCHMD and NCH Healthcare, asserting a claim under ERISA, 29 U.S.C. Section 1132(a)(1)(B). The district court granted Defendants’ motion to dismiss and denied Plaintiff leave to amend.   On appeal, the Eleventh Circuit reversed the district court’s ruling. The court wrote that at issue is whether Section 1132(a)(3) creates a cause of action for an ERISA beneficiary to recover monetary benefits lost due to a fiduciary’s breach of fiduciary duty in the plan enrollment process? The court answered “yes”, and explained that under the court’s precedents, a court may order typical forms of equitable relief under Section 1132(a)(3). As the Supreme Court and many sister circuits have recognized, courts in equity could traditionally order an “equitable surcharge”— that a fiduciary pay a beneficiary for losses caused by the fiduciary’s breach of fiduciary duty. Accordingly, the court held that a beneficiary of an ERISA plan can bring a lawsuit under Section 1132(a)(3) against a fiduciary to recover benefits that were lost due to the fiduciary’s breach of its duties. View "Raniero Gimeno v. NCHMD, Inc., et al." on Justia Law

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Smith worked for CommonSpirit and participated in CommonSpirit’s defined-contribution 401(k) plan. CommonSpirit's administrative committee administers the plan, which serves more than 105,000 people and manages more than $3 billion in assets. It offers 28 different funds in which employees may invest their contributions, including several index funds with management fees as low as 0.02% and several actively managed funds with management fees as high as 0.82%. The actively managed Fidelity Freedom Funds are the default investment if employees do not choose to place their contributions in a different fund instead; they are “target date” funds and managers change the allocation of the underlying investments over time. Other target-date funds have lower costs. Smith sued CommonSpirit and the administrative committee under the Employee Retirement Income Security Act (ERISA) for breach of fiduciary duty. 29 U.S.C. 1132(a)(2), seeking to represent a proposed class of similarly situated plan participants and claiming that the plan should have offered a different mix of fund options. The Seventh Circuit affirmed the dismissal of her suit. ERISA does not give courts a broad license to second-guess the investment decisions of retirement plans. It supplies a cause of action only when retirement plan administrators breach a fiduciary duty by, for example, offering imprudent investment options. Smith has not alleged facts from which a jury could plausibly infer that CommonSpirit breached any such duty. View "Smith v. CommonSpirit Health" on Justia Law

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Plaintiff discovered she had a brain tumor and underwent radiation. Plaintiff was later hired by Situs Group. Situs maintained a disability plan covered by the Employment Retirement Income Security Act (“ERISA”) that provided long-term disability benefits to eligible current and former employees. The plan’s insurance was provided by Dearborn National Life Insurance., Plaintiff attended a benefits meeting led by Situs’s Benefits Coordinator, where she was told participants could receive benefits regardless of pre-existing conditions and that they would not be questioned about their pre-existing conditions when the company was determining eligibility.Plaintiff’s employer denied her claim for long-term disability benefits under ERISA. The claim was denied because of the application of a preexisting condition exclusion in the insurance contract. Plaintiff raised several points of error on appeal, but the Fifth Circuit affirmed the district court’s ruling.The court agreed with the district court that Dearborn substantially complied with ERISA procedures and was entitled to extend the deadline to respond to Plaintiff’s claim. Further, there is no question that Defendants waived their right to assert the pre-existing condition exclusion as a defense to Plaintiff’s claim for the initial, shorter-term benefits. That waiver does not compel the conclusion that Defendants also intended to waive their right to enforce the exclusion when it came to Plaintiff’s application for LTD benefits. Finally, here neither the magistrate judge nor the district court appeared to consider itself limited to certain categories of evidence. The magistrate judge specifically noted that certain evidence would be relevant to her estoppel or waiver claims but need not be in the administrative record itself. View "Bunner v. Dearborn Natl Life" on Justia Law

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Plaintiff appealed the dismissal of his lawsuit seeking long-term disability benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”) from Hartford Life and Accident Insurance Company. The district court concluded that Plaintiff had failed to exhaust his disability plan’s administrative remedies. Plaintiff asserted that his administrative remedies should have been deemed exhausted because Hartford, in violation of the applicable ERISA regulation, failed to provide a final decision on his benefits within 45 days of his administrative appeal.   The Second Circuit reversed the district court’s dismissal of Plaintiff’s. The dispositive question on appeal was whether a valid benefit determination on review must determine whether a claimant is entitled to benefits. Based on the regulation’s plain language, structure, and purpose, the court held that it must. The court further held that, because Hartford did not extend the benefit determination period, duty to exhaust had ceased by the 46th day, the day he filed his federal case.The court further explained that the text of the Sec 503-1 supports Plaintiff’s argument that he did not receive a timely benefit determination on review. Finally, Section 503-1’s text, structure, history, and purpose are fully consistent. A “benefit determination on review” must finally decide the claimant’s benefits within 45 days, assuming the absence of special circumstances that require an extension. By the 46th day after his appeal, Hartford had not determined Plaintiff’s benefits nor extended its review time. So, Plaintiff was deemed to have exhausted his plan remedies and could bring suit in federal court. View "McQuillin v. Hartford Life and Accident Insurance Co." on Justia Law

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Tymoc died in a single-car accident. At the time of the accident, Tymoc was traveling between 80-100 miles per hour; the speed limit was 60 miles per hour speed. As Tymoc attempted to pass multiple cars, the gap between a car in the right lane and a box truck in the left lane closed. Tymoc veered to the right, causing his vehicle to drive off the road, roll down an embankment, striking multiple trees, and flip over several times.Through his employer, Tymoc was covered by Unum life insurance; the policy provided both basic life insurance coverage and an additional accidental death benefit. Unum approved a $100,000 payment of group life insurance benefits but withheld $100,000 in accidental death benefits, explaining that Tymoc’s conduct—speeding and reckless driving—caused his death, thereby triggering the policy’s crime exclusion. In a suit under the Employee Retirement Income Security Act, 29 U.S.C. 1001– 1191d, the district court entered in Fulkerson’s favor as to the accidental death benefits. The Sixth Circuit reversed. Reckless driving falls within the unambiguous plain meaning of crime. View "Fulkerson v. Unum Life Insurance Co. of America" on Justia Law

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The Universal Health Services Retirement Savings Plan is a defined contribution retirement plan. Qualified employees can participate and invest a portion of their paycheck in selected investment options, chosen and ratified by the UHS Retirement Plans Investment Committee, which is appointed and overseen by Universal. Named plaintiffs, on behalf of themselves and all other Plan participants, sued Universal under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(2)3 and 1109, alleging that Universal breached its fiduciary duty by including the Fidelity Freedom Fund suite in the plan, charging excessive record-keeping and administrative fees, and employing a flawed process for selecting and monitoring the Plan’s investment options, resulting in the selection of expensive investment options instead of readily-available lower-cost alternatives. They also alleged certain Universal defendants breached their fiduciary duty by failing to monitor the Committee.The Third Circuit affirmed class certification, rejecting an argument that the class did not satisfy the typicality requirement of Federal Rule of Civil Procedure 23(a), given that the class representatives did not invest in each of the Plan’s available investment options. Because the class representatives allege actions or a course of conduct by ERISA fiduciaries that affected multiple funds in the same way, their claims are typical of those of the class. View "Boley v. Universal Health Services Inc" on Justia Law

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Canter worked as a premises technician, installing wires, lifting heavy loads, and climbing tall ladders. After he began to suffer from severe migraines, lightheadedness, and dizziness, Canter concluded that he no longer could perform that work. He applied for short-term disability benefits in February 2017 through an AT&T plan. The plan administrator granted benefits for a few months, but AT&T terminated benefits after an independent medical reviewer concluded that Canter’s medical tests were normal and that his symptoms had improved. After Canter unsuccessfully appealed this decision using AT&T’s internal processes, he sued under the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1132.The district court granted the defendants summary judgment in favor of the defendants. The Seventh Circuit affirmed the decision but reversed the court’s award of $181 in pro hac vice fees to the defendants as not taxable “costs” under 28 U.S.C. 1920. Extensive medical testing consistently yielded normal results, even though the medical providers and reviewers thought that a significant problem would have shown up in one or more concrete, physiological ways. Canter himself reported that he was experiencing improvement. View "Canter v. AT&T Umbrella Benefit Plan No.3" on Justia Law