Justia ERISA Opinion Summaries

HCSC is an Illinois not-for-profit corporation that offers Blue Cross and Blue Shield insurance through licensed affiliates in five states and contracts with outside affiliates for prescription drug services, claim payments, and other administrative work. HCSC owns or controls its affiliates and places its officers on their boards. HCSC does not disclose the extent of these ties to its insureds. Its policies state that the affiliates pay it rebates, but it does not share those rebates with its customers. Alleging that these arrangements violated Illinois law and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, Priddy and others filed a putative class. The district court certified four classes under Federal Rule of Civil Procedure 23(b)(3): employers who purchased HCSC plans for employees in any of the five states served by HCSC; beneficiaries of employer-furnished plans provided by HCSC in any of the five states; individuals who purchased insurance directly from HCSC in any of the five states; and Illinois insureds who were protected by Illinois insurance regulations. The four classes included approximately 10 million people. The Seventh Circuit vacated class certification. It is not clear that HCSC owed many class members any fiduciary duty. Three of the four classes certified include people whom HCSC does not insure and who do not pay it premiums. View "Priddy v. Health Care Service Corp." on Justia Law

Twin City filed suit seeking to recover unpaid fringe-benefit contributions allegedly due under a collective bargaining agreement (CBA). The district court granted summary judgment for the Association on the ground that WQS was precluded by a previous lawsuit from disputing liability for the contributions as an alter ego of a signatory of the agreement. The Eighth Circuit affirmed the district court's determination that WQS was liable for the unpaid fringe-benefit contributions where all of the elements required to apply issue preclusion were present. The court held that the Association has a right to collect contributions under the CBA, but that two categories of damages were not authorized by the Employee Retirement and Income Security Act, 29 U.S.C. 1132, 1145, and that the award should be reduced accordingly. The court also upheld the district court's grant of injunctive relief. The court remanded for the district court to exclude contributions due to the Working Fee and Industry Fund from the damages award, and to reduce the award of interest accordingly. View "Twin City Pipe Trades Service Assoc. v. Wenner Quality Services, Inc." on Justia Law

The Fund filed suit against defendants under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(3), alleging that it had a right to a portion of a negligence settlement attributable to medical expenses. The Eighth Circuit affirmed the district court's grant of summary judgment for the Fund, considering defendants' admissions that the settlement agreements included the claim for medical expenses. Therefore, the Fund was entitled to whatever was recovered for medical expenses in the settlement action. View "Mackey v. Johnson" on Justia Law

Plaintiff filed suit under Section 502(c)(1) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132(c)(1)(B), alleging that defendants failed to timely comply with her request for documents relating to her healthcare benefit plan. The Second Circuit affirmed the district court's dismissal of plaintiff's claim as time-barred. Because ERISA does not specify a statute of limitations for Section 502(c)(1) claims, the courts apply the state statute of limitations that is the nearest analogue. The court held that the most analogous statute of limitations in Connecticut was the one-year statute of limitations for actions to recover civil forfeitures. Applying the one-year limitation, the court held that plaintiff's claim was time-barred. View "Brown v. Rawlings Financial Services, LLC" on Justia Law

After Aetna determined that plaintiff was not disabled and terminated her benefits, she filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The district court applied de novo review and held that Aetna improperly denied plaintiff's claim. The Ninth Circuit vacated the district court's judgment, holding that the district court should have reviewed the denial only for abuse of discretion. The panel held that the plan contained a discretionary clause and thus called for abuse of discretion review; Aetna provided no sound reason to depart from the text of section 22 of the California Insurance Code, which brought within the scope of Cal. Ins. Code 10110.6 Boeing's self-funded STD plan; ERISA preempted application of section 10110.6 to Boeing's self-funded plan; and remand was necessary to permit the district court to properly apply the abuse of discretion standard. View "Williby v. Aetna Life Insurance Co." on Justia Law

Plaintiffs filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., to recover alleged overpayments of retirement benefits to certain employees of DAK who were participants in the Plan. The Fourth Circuit held that the written language of the Plan clearly and unambiguously provided the lump sum elected by the employees was the actuarial equivalent of the Accrued Benefit payable at the employee's Normal Retirement Date. Therefore, the court affirmed the district court's award of summary judgment to plaintiffs on their equitable restitution claim. The court also held that the doctrine of equitable estoppel could not be used to require the payment of benefits that conflict with the express, written terms of the Plan; the court assumed, without deciding, that the particular facts of this case could establish a finding that plaintiffs breached their fiduciary duty and turned instead to consider whether any of the employees established a triable issue of fact as to "actual harm" in connection with their claims for a surcharge remedy; and Rodney B. Smith was the only employee with a viable surcharge claim for purposes of summary judgment. Accordingly, the court vacated the judgment against Smith and remanded for further proceedings. View "Retirement Committee of DAK Americas v. Brewer" on Justia Law

Morrone participates in a ʺdefined benefit planʺ offered by the Pension Fund. From 1970-1996, Morrone earned benefits under the Plan; in 1997, he stopped working union jobs. Under the Plan, a participant is entitled to the accrual rates ʺin effect at the time [he] ultimately separates from Covered Employment.ʺ In 1994, the Plan was amended to allow a worker who took a hiatus to bridge the gap by working five years. In 1999, the Plan removed the Five Year Rule and reinstated the Parity Rule, under which a worker with a break in Covered Employment of two or more years could bridge that gap and reactivate pension credits earned pre-hiatus by working for at least as many years after the break as the length of the break. Morrone returned to Covered Employment in 2012 and requested an estimate of the benefits he would receive should he retire in 2017. The estimate applied the Parity Rule: Pension credits that he earned pre-hiatus were assigned the 1996 rate; those earned since 2012 were valued at the current rate. Because Morrone had taken a 15‐year hiatus and would have returned to Covered Employment for only six years as of 2017, he was not entitled to the current accrual rate for his pre-hiatus pension credits. Applying the Five Year Rule would give Morrone an extra $705 per month. The Second Circuit affirmed summary judgment, in favor of the Fund, finding that the 1999 Amendment did not decrease Morroneʹs accrued benefits in violation of ERISAʹs anti‐cutback rule, 29 U.S.C. 1054(g). The higher benefit accrual rates that Morrone demands are not a ʺretirement‐type subsidyʺ but would constitute his normal retirement benefit if he satisfied the conditions to receiving them: the Parity Rule. View "Morrone v. Pension Fund of Local Number One, I.A.T.S.E." on Justia Law

From 1978-1997, Mathias worked for Caterpillar in York, Pennsylvania. In 1997 he experienced serious health issues; the Social Security Administration declared him disabled. Caterpillar covered his health insurance as an employee on long-term disability, billing him for his portion of the premium. In 2012 Mathias retired retroactively, effective October 2009. Caterpillar failed to change Mathias’s status and did not realize its mistake until 2013 when it notified Mathias that he owed $9,500 in past-due premiums, the difference between the rate for a long-term disabled employee and the rate for a retired employee. When Mathias did not pay, Caterpillar terminated his benefits. Mathias sued in the Eastern District of Pennsylvania. The plan documents require suit in the Central District of Illinois, so Caterpillar moved to transfer the case under 28 U.S.C. 1404(a). Mathias argued that the forum-selection clause was invalid in light of ERISA’s venue provision, 29 U.S.C. 1132(e)(2). The district court rejected that argument, relying primarily on Sixth Circuit precedent, holding that forum-selection clauses in ERISA plans are enforceable and not inconsistent with the text of ERISA’s venue provision. The case was transferred. Mathias petitioned for mandamus relief in the Seventh Circuit, which affirmed, holding that ERISA’s venue provision does not invalidate a forum-selection clause contained in plan documents. View "Mathias v. Mihm" on Justia Law

From 1978-1997, Mathias worked for Caterpillar in York, Pennsylvania. In 1997 he experienced serious health issues; the Social Security Administration declared him disabled. Caterpillar covered his health insurance as an employee on long-term disability, billing him for his portion of the premium. In 2012 Mathias retired retroactively, effective October 2009. Caterpillar failed to change Mathias’s status and did not realize its mistake until 2013 when it notified Mathias that he owed $9,500 in past-due premiums, the difference between the rate for a long-term disabled employee and the rate for a retired employee. When Mathias did not pay, Caterpillar terminated his benefits. Mathias sued in the Eastern District of Pennsylvania. The plan documents require suit in the Central District of Illinois, so Caterpillar moved to transfer the case under 28 U.S.C. 1404(a). Mathias argued that the forum-selection clause was invalid in light of ERISA’s venue provision, 29 U.S.C. 1132(e)(2). The district court rejected that argument, relying primarily on Sixth Circuit precedent, holding that forum-selection clauses in ERISA plans are enforceable and not inconsistent with the text of ERISA’s venue provision. The case was transferred. Mathias petitioned for mandamus relief in the Seventh Circuit, which affirmed, holding that ERISA’s venue provision does not invalidate a forum-selection clause contained in plan documents. View "Mathias v. Mihm" on Justia Law

Studer worked at Katherine Shaw Bethea Hospital, a not‐for‐profit Dixon, Illinois healthcare provider, as an occupational therapist. After she resigned, she filed a small‐claims state court complaint, alleging that the hospital violated the Illinois Wage Payment and Collection Act (IWPCA) by failing to pay her money that she had accrued under the hospital’s Paid Days Leave policy. The hospital removed the suit to federal court, claiming that Studer’s claim was preempted by the Employee Retirement Income Security Act (ERISA). The district court denied Studer’s motion to remand, holding that it had federal‐question jurisdiction because ERISA completely preempted the state‐law claim, and granted the hospital summary judgment, holding that Studer had failed to name the welfare benefit plan as a defendant, which ERISA requires in most instances. Instead of filing an amended complaint, Studer filed a Rule 59(e) motion to amend the judgment, again arguing that ERISA did not preempt her claim. The district court denied that motion. The Seventh Circuit affirmed, noting ERISA’s “expansive” preemptive power, 29 U.S.C. 1144(a). The hospital’s benefit plan was an employee welfare benefit plan under ERISA, in which Studer participated; ERISA section 502(a)(1)(B) empowered Studer to bring a federal court action “to recover benefits due.” Studer’s IWPCA claim was not “entirely independent of” ERISA. View "Studer v. Katherine Shaw Bethea Hospital" on Justia Law