Justia ERISA Opinion Summaries

While Kwasny was managing partner at a now-dissolved law firm, the firm established a 401(k) profit-sharing plan for its employees. Kwasny was named as a trustee and fiduciary of the plan. Between September 2007 and November 2009, the plan sustained losses of $40,416.302 because plan contributions withdrawn from employees’ paychecks were commingled with the firm’s assets and were not deposited into the plan. In 2011, the Secretary of Labor received a substantiated complaint from a plan member; investigated; and filed suit to recover the lost funds, remove Kwasny as trustee and fiduciary of the plan, and enjoin Kwasny from acting as a plan fiduciary in the future. The Third Circuit affirmed summary judgment in favor of the Secretary, remanding for determination of whether the judgment should be offset by a previous Pennsylvania state court default judgment entered against Kwasny for the same misdirected employee contributions. The court rejected arguments based on res judicata and on the statute of limitations. There is no genuine issue of disputed fact regarding Kwasny’s violation of the Employee Retirement and Income Security Act. View "Secretary United States Department of Labor v. Kwasny" on Justia Law

Prather, age 31, tore his Achilles tendon. His surgery to repair the injury was uneventful. He returned to work. Four days later he collapsed, went into cardiopulmonary arrest, and died as a result of a blood clot in the injured leg that had traveled to a lung. Prather’s widow applied for benefits under his Sun Life group insurance policy (29 U.S.C. 1132(a)(1)), which limited coverage to “bodily injuries ... that result directly from an accident and independently of all other causes.” Sun Life refused to pay. The Seventh Circuit ruled in favor of Prather’s widow, noting that deep vein thrombosis and pulmonary embolism are risks of surgery, but that even with conservative treatment, such as immobilization of the affected limb, the insured had an enhanced risk of a blood clot. The forensic pathologist who conducted a post-mortem examination of Prather did not attribute his death to the surgery. Prather’s widow then sought attorneys’ fees of $37,170 under ERISA, 29 U.S.C. 1132(g)(1). The Seventh Circuit awarded $30,380, stating that there is no doubt of Sun Life’s culpability or of its ability to pay without jeopardizing its existence; the award of attorneys’ fees is likely to give other insurance companies in comparable cases pause; and a comparison of the relative merits of the contending parties clearly favors the plaintiff. View "Prather v. Sun Life Financial Insurance Co." on Justia Law

Plaintiff worked at a Maine law firm for more than twenty-five years and, for many years, was an equity partner. In 2012, Plaintiff filed a long term disability (LTD) claim with Defendant Standard Insurance Company, the claim administrator and insurer of the employee welfare benefit plan offered by Plaintiff’s law firm to its employees. The plan was insured by an LTD policy, also issued by Defendant and which covered Plaintiff. Defendant told Plaintiff that it would approve her claim and that it would use January 28, 2012 as the disability onset date. This appeal concerned only what disability onset year should be used to calculate Plaintiff’s monthly disability amount, Plaintiff arguing that the onset date was on November 2011. The district court entered judgment for Defendant. The First Circuit reversed, holding that Defendant’s decision to use the 2012 onset date was arbitrary and capricious. Remanded to the district court with direction to order Defendant to award Plaintiff retroactive benefits based on a disability onset date of no later than 2011. View "Doe v. Standard Insurance Co." on Justia Law

Plaintiff brought this case pursuant to the Employee Retirement Income Security Act (ERISA), seeking reimbursement for certain expenses connected with the treatment of her teenage son. The plan administrator, Blue Cross Blue Shield of Massachusetts HMO Blue, Inc. (BCBS) denied the portions of Plaintiff’s claim that were in dispute in this case. The district court upheld BCBS’s action. The First Circuit affirmed, holding that, applying the plain language of the ERISA plan, the clear weight of the evidence dictated a finding that the disputed charges were not medically necessary, as defined in the plan, and therefore were not covered. View "Stephanie C. v. Blue Cross Blue Shield of Massachusetts HMO Blue, Inc." on Justia Law

Plaintiffs are health care providers who furnish medical services to subscribers of employee health benefits plans. Defendants are health insurers, plan administrators, and/or claims administrators for the relevant employee benefit plans. These two cases involved reimbursement disputes: In DB Healthcare, Blue Cross determined that certain blood tests were investigational and thus excluded from coverage; In Advanced Women's Health Center, Anthem determined that the Center used faulty practices to bill for the tests and so was not entitled to reimbursement. At issue was whether a health care provider designated to receive direct payment from a health plan administrator for medical services was authorized to bring suit in federal court under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court held before, and reiterated, that health care providers are not "beneficiaries" within the meaning of ERISA's enforcement provisions. Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc. emphasized this rule and held that a non-participant healthcare provider cannot bring claims for benefits on its own behalf but must do so derivatively. The court concluded that the providers in DB Healthcare lacked derivative standing because they do not hold valid assignments. The court also concluded that the Center lacked derivative authority because the claims fell outside the scope of those assigned rights. Accordingly, the court affirmed the judgment. View "DB Healthcare, LLC v. Blue Cross Blue Shield of Arizona, Inc." on Justia Law

Plaintiffs were Cumberland University employees, participating in its 403(b) defined contribution pension plan. In 2009, the University adopted a five percent matching contribution. In 2014, the University amended the Plan to replace the five percent match: the University would determine the amount of its matching contribution on a yearly basis, retroactive to 2013. The University announced that its matching contribution for the 2013–14 and 2014-2015 years would be zero percent. The Plan stated: An Employer cannot amend the Plan to take away or reduce protected benefits under the Plan and that “all Plan Participants shall be entitled to . . . [o]btain, upon request to the Employer, copies of documents governing the operations of the Plan.” As of January 2017, the University had not produced a summary plan description after the 2009 Summary Plan Description, despite repeated requests, nor did it provide formal written notice of the amendment within a reasonable period. Plaintiffs filed a class action complaint, alleging violations of the Employee Retirement Income Security Act, 29 U.S.C. 1001, by wrongful denial of benefits, cutbacks, failure to provide notice, and breach of fiduciary duty. The district court dismissed without prejudice for failure to administratively exhaust the claims. The Sixth Circuit reversed, holding, as a matter of first impression, that plan participants need not exhaust administrative remedies before proceeding to federal court when they assert statutory violations under ERISA. View "Hitchcock v. Cumberland University 403(b) DC Plan" on Justia Law

Plaintiffs, a class of employees who participated in ABB's retirement plans, filed suit alleging that ABB and its fiduciaries managed the plans for their own benefit, rather than for the participants. In an earlier appeal, the court directed the district court to "reevaluate" how the participants might have been injured if the ABB fiduciaries breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., when they changed the investment options for the plans. The district court misunderstood the court's direction for a definitive ruling on how to measure plan losses and thus entered judgment for the ABB fiduciaries even though the district court found that they breached their duties. Therefore, the court vacated the judgment on that claim and remanded for further consideration regarding whether the participants can prove losses to the plans. The court also vacated and remanded the district court's award of attorney fees because the court reopened one of the participant's substantive claims. View "Tussey v. ABB, Inc." on Justia Law

On her last day of work with Mova Pharmaceutical Corporation, Nilda Rodriguez-Lopez (Rodriguez) began experiencing symptoms. Rodriguez was diagnosed with several physical and mental conditions and filed a claim for long-term disability (LTD) benefits under Mova’s employee welfare benefits plan (the Plan). Triple-S Vida, Inc. denied Rodriguez’s application for LTD benefits, finding she did not meet the Plan’s definition of disabled. After she exhausted her administrative remedies, Rodriguez filed suit. The district court granted Triple-S’s motion for summary judgment, concluding that Triple-S’s denial of LTD benefits was neither arbitrary nor capricious. Rodriguez appealed, claiming that the Plan did not reflect a clear grant of discretionary authority to Defendant, and therefore, Triple-S’s determination to deny her LTD benefits was subject to the de novo standard of review. The First Circuit vacated the judgment, holding that the Plan did not confer discretionary authority upon Triple-S, and therefore, de novo review applied. Remanded. View "Rodriguez-Lopez v. Triple-S Vida, Inc." on Justia Law

Steven Williams alleged that his former employer, FedEx Corporate Services, violated the Americans with Disabilities Act (ADA) by discriminating against him based on his actual and perceived disabilities, and by requiring his enrollment in the company’s substance abuse and drug testing program. Williams further alleges that Aetna Life Insurance Company, the administrator of FedEx’s short-term disability plan, breached its fiduciary duty under the Employee Retirement Income and Security Act (ERISA) when it reported to FedEx that Williams filed a disability claim for substance abuse. Both FedEx and Aetna filed motions for summary judgment, which the district court granted. After review, the Tenth Circuit affirmed in part, and reversed and remanded. An employer is liable for an improper medical examination or inquiry, “unless such examination or inquiry is shown to be job-related and consistent with business necessity.” FedEx argued that it satisfied the business necessity exception because its employee testing program “ensure[] that employees who seek assistance for drug abuse or dependencies are no longer abusing the drug if they return to FedEx.” The Tenth Circuit found that the district court did not address this argument. As a result, the Court did not have an adequate record from which it could decide this issue on appeal. The Court reversed for the district court to decide that issue, and affirmed in all other respects. View "Williams v. FedEx Corporate" on Justia Law

Plaintiff and eight others filed a class action against Anheuser-Busch under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiffs are participants in the Anheuser-Busch salaried employee pension plan and claim that they are entitled to enhanced pension benefits. At issue is the interpretation of Section 19.11(f) of the plan. Determining that it has jurisdiction over the appeal, the court concluded that Section 19.11(f) is unambiguous and agreed with the district court's adoption of the reasoning in the Sixth Circuit's case, Adams v. Anheuser-Busch Cos., that Section 19.11(f) entitled plaintiffs to enhanced benefits. Although the court affirmed on the merits, the court agreed with plaintiffs that the decision still must be reversed and remanded because the district court failed to make individual calculations of enhanced benefits owed to individual members of the class. Therefore, the court reversed and remanded with instructions to reconsider plaintiffs' prayer for relief and, to the extent requested and provable, calculate and award the benefits owed to plaintiffs by applying Section 19.11(f). The court noted that, upon remand, the district court may reconsider whether certain records will assist in its calculation of the requested benefits. View "Knowlton v. Anheuser-Busch" on Justia Law