Justia ERISA Opinion Summaries

To stimulate economic development, Jersey City, New Jersey offers tax exemptions and abatements to private developers of projects in certain designated areas. Those tax benefits are conditioned on the developers’ entry into agreements with labor unions that bind the developers to specified labor practices. Employers and a trade group challenged that law, alleging that it is preempted by the National Labor Relations Act (NLRA) and Employee Retirement Income Security Act (ERISA) and barred by the dormant Commerce Clause of the U.S. Constitution. The district court dismissed the complaint, concluding that Jersey City acts as a market participant, not a regulator, when it enforces the law, so that NLRA, ERISA, and dormant Commerce Clause claims were not cognizable. The Third Circuit reversed, holding that Jersey City was acting as a regulator in this context. The city lacks a proprietary interest in Tax Abated Projects. The Supreme Court has recognized a government’s proprietary interest in a project when it “owns and manages property” subject to the project or it hires, pays, and directs contractors to complete the project; when it provides funding for the project; or when it purchases or sells goods or services. This case fits none of these categories. View "Assoc. Builders & Contractors, Inc. v. City of Jersey City" on Justia Law

Okuno was working as an art director with a clothing company when she developed symptoms including vertigo, extreme headaches, memory loss, and abdominal pain. Though she had previously been diagnosed with fibromyalgia and degenerative disc disease, Okuno contends that these maladies had been “stable and well-controlled” for years and did not prevent her from working. After visits to multiple specialists, numerous tests, and two visits to the emergency room, Okuno was eventually diagnosed with narcolepsy, Crohn’s disease, and Sjogren’s syndrome, an autoimmune disease. After diagnosis, she struggled with negative drug interactions and the side effects associated with her many treatments. Unable to continue working, Okuno went on short-term disability and applied for benefits under her employer’s long-term disability plan, issued and administrated by Reliance. Reliance denied the application on the basis that depression and anxiety contributed to Okuno’s disabling conditions. After exhausting her administrative appeals, Okuno brought a claim under the Employee Retirement Income Security Act (ERISA). 29 U.S.C. 1132(a)(1)(B). The district court found in favor of Reliance on cross-motions for judgment on the administrative record. The Sixth Circuit reversed, reasoning that her physical ailments, including Crohn’s disease, narcolepsy, and Sjogren’s syndrome, are disabling when considered apart from any mental component. View "Okuno v. Reliance Standard Life Ins. Co." on Justia Law

Plaintiff filed suit against his former employer, RSA, alleging retaliatory discharge claims under both state law and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. A jury awarded him lump-sum damages on his state law claims, and the district court then entered judgment in his favor on his ERISA claim. Even though, at plaintiff's request, the jury had been instructed to include front pay in its damages award, the district court granted plaintiff additional equitable remedies consisting of reinstatement as well as front pay until reinstatement occurred. RSA appeals these equitable remedies. Given the way in which the jury was instructed and the evidence presented at trial, the court concluded that the jury’s verdict encompassed an implicit factual determination as to the entire amount of front pay to which plaintiff was entitled on account of his retaliatory discharge. Therefore, the court held that the district court’s grant of an additional front pay remedy for the same harm disregarded that determination in violation of the Seventh Amendment right to a jury trial. The court also held that, although the reinstatement remedy does not necessarily conflict with factual findings implicit in the jury’s verdict, it is nevertheless improper because plaintiff waived that relief when he elected to seek the duplicative front pay remedy from the jury. Accordingly, the court reversed the equitable awards. View "Teutscher v. Woodson" on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., against the Plan and MetLife, claiming that MetLife, the claim administrator and insurer of the Plan, improperly denied his claim for long-term disability (LTD) benefits. The district court granted defendants' cross-motion for summary judgment. The court concluded that the abuse-of-discretion review should be tempered with some skepticism because plaintiff has offered evidence of a conflict of interest where the independent physician consultants (IPCs) have earned a substantial amount of money from MetLife and have performed a substantial number of reviews for the company as well. The court further concluded that, taking into account the totality of the circumstances, MetLife abused its discretion in denying plaintiff's claim. In this case, the evidence included the financial conflict of interest of the IPCs on whom MetLife relied; the substantial evidence of plaintiff's mental limitations due to pain medication and physical limitations; and the IPCs’ reviews of plaintiff's condition, without having examined him and without explaining why they rejected his credibility, particularly in regard to evidence corroborating his credibility (both medical and nonmedical). Accordingly, the court reversed and remanded with instructions to the district court to remand this case to MetLife so that it may re-evaluate the merits of plaintiff's LTD claim. View "Demer v. IBM Corp." on Justia Law

Medicare Part C, 42 U.S.C. 1395w-21 et seq., permits enrollees to obtain Medicare-covered healthcare services from private healthcare organizations and their third-party contractors. The Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., regulates health plans offered by private employers to employees. At issue is whether continued inpatient treatment by Providers was medically necessary, and therefore compensable, for several MA Plan Members and ERISA Plan Members initially hospitalized for mental health evaluations or treatment. The court held that the administrative appeals process provided under the Medicare Act preempts arbitration of Medicare-related coverage disputes between private healthcare administrators and providers, even though arbitration would otherwise be required by the parties’ contracts and the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. In this case, Providers’ coverage claims are inextricably intertwined with claims for Medicare benefits, and they therefore are subject to the Medicare Act. The Act provides mandatory administrative review procedures for these disputes, which preempt arbitration. The court concluded, however, that the court of appeals erred by deciding that whether Aurora’s ERISA-related claims are arbitrable depends on whether Aurora has standing to assert this claim. The court of appeals should decide on remand whether this claim is arbitrable without considering the standing issue or whether any valid defenses to the claim exist. Therefore, the court remanded to the court of appeals to decide whether ERISA similarly preempts arbitration of ERISA-related coverage disputes. View "United Behavioral Health v. Maricopa Integrated Health Sys." on Justia Law

GreatBanc, the fiduciary for Personal-Touch home-health-care employee stock ownership plan, facilitated a transaction in which the Plan purchased shares in the company from the company’s owners with a loan from the company itself. It is not clear whether GreatBanc obtained independent advice or a valuation. GreatBanc had been appointed as trustee by the owners. The value of the shares fell until they were worth much less than the Plan paid, leaving the Plan with no valuable assets and heavily indebted to the company’s principal shareholders. The Plan’s participants were liable for interest payments on the loan. Employees filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132. The district court dismissed. The Seventh Circuit reversed. The plaintiffs plausibly alleged both a prohibited transaction and a breach of fiduciary duty. View "Allen v. Greatbanc Trust Co." on Justia Law

Plaintiff filed suit against the Plan to recover payment for health care services provided to Plan policyholders. The trial court dismissed plaintiff's suit because the state law causes of action were preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court concluded that, notwithstanding procedural irregularies, plaintiff's due process rights were not violated where any error by the trial court was harmless; plaintiff's claims for breach of contract, quantum meruit, and promissory estoppel are not preempted by ERISA where these quasi-contract and contract causes of action do not address an area of exclusive federal concern; and plaintiff's claim for interference with contractual relations is preempted where this cause of action addresses an area of exclusive federal concern. View "Morris B. Silver M.D., Inc. v. Int'l Longshore & Warehouse Union" on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., seeking benefits for continued partial hospital treatment for her anorexia, which were denied on the ground that the level of care she sought was not medically necessary. On appeal, plaintiff challenged the district court's grant of summary judgment for Oxford. After careful consideration of the parties’ briefs, the record in the case, and with the benefit of oral argument presented to the court, the court concluded that the district court correctly decided that the record of the external review is properly before the district court in this ERISA case. However, the court concluded that the district court erred in holding that the adverse external review decision barred plaintiff from presenting her challenge to the adverse medical necessity determination. Because the external review process does not conflict with ERISA, it is not preempted. Accordingly, the court affirmed in part, reversed in part and remanded for further proceedings. View "Alexandra H. v. Oxford Health Ins." on Justia Law

Rabinak worked full‐time as a business representative for the Chicago Regional Council of Carpenters and, incidental to that position, served on the Council’s Executive Board. He received quarterly payments of $2,500 for his service on the Board, paid by checks separate from those for Rabinak’s weekly salary. When he retired, Rabinak qualified for a pension from the United Brotherhood of Carpenters Pension Fund, governed by ERISA. The compensation amount upon which the Fund calculated his annual retirement benefit did not include the $10,000 he had received each year from the Council. The Fund’s appeals committee denied an appeal. The Seventh Circuit affirmed. The plan’s definition of compensation includes only “salary,” and the $2,500 quarterly payments for Board service were paid separately from Rabinak’s weekly salary payments and coded differently as well. The conclusion that the payments at issue were not salary payments under his particular plan was not arbitrary and capricious. View "Rabinak v. United Bhd. of Carpenters Pension Fund" on Justia Law

In 1991 Cheney began working as an attorney at Kirkland. She became a partner in 1997. She suffered from a spinal disease that led her to seek ergonomic accommodations in 1994 and ultimately resulted in a three‐level anterior cervical discectomy and fusion and removal of her C5 vertebra. After making various accommodations, the firm approved a leave, from January 3, until July of 2012. Her last day of work was December 19, 2011. On April 17, 2012, Cheney's neurosurgeon advised her to complete a 12‐week intensive physical therapy program and receive cervical epidural injection therapy. After the program failed to improve Cheney’s condition, the neurosurgeon recommended cervical spinal fusion surgery, which Cheney received on August 27. Cheney submitted her claim for long‐term disability benefits on July 17, before the surgery. Kirkland’s insurer denied her claim, stating that her coverage had ended in March because she was able, through March, to perform her job. Cheney sued under the Employee Retirement Income Security Act, 29 U.S.C. 1132. The court found in favor of Cheney. The Seventh Circuit vacated, finding that the district court made unsupported factual findings and misinterpreted the governing documents relating to whether Cheney’s situation fell within allowable absences from “active work.” View "Cheney v. Standard Ins. Co." on Justia Law