Justia ERISA Opinion Summaries

OTET appealed the district court's grant of summary judgment for Hillsboro Garbage, Robert Henderson, and the Estate of Darrol Jackson. The district court granted summary judgment in favor of defendants on (1) OTET’s breach of contract claims because the district court found those claims to be preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq.; and (2) OTET’s restitution and specific performance claims because the district court concluded that those claims were not cognizable under ERISA as they sought legal - not equitable - relief. The court concluded that the district court properly dismissed the common law breach of contract claims as preempted by ERISA; the district court properly dismissed the restitution and specific performance claims where recent circuit precedent does not support OTET's argument; and the district court did not abuse its discretion in denying OTET the right to file a third amended complaint where OTET was given two opportunities to amend its complaint and unilaterally decided to eliminate the fraud count and it does not contend that it acquired any knew knowledge or that any misconduct occurred. Accordingly, the court affirmed the judgment. View "OR Teamsters Emp'ers Trust v. Hillsboro Garbage Disposal" on Justia Law

In 1989, the Supreme Court held that courts should apply de novo review in suits challenging denials of employee benefits governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1), but if the benefit plan provided expressly for a different, more deferential standard of review, that specific provision would control over the default rule of de novo review. Insurance companies and plan sponsors began including such provisions in most benefit plans, typically saying the insurer or plan administrator would exercise discretionary judgment in interpreting a plan or deciding whether to pay benefits. Courts would then apply a deferential standard of review under which a denial would stand unless it was “arbitrary and capricious.” Later, state laws were adopted to protect employees and plan beneficiaries from abuse of such discretion. An Illinois insurance law, prohibited provisions “purporting to reserve discretion” to insurers to interpret health and disability insurance policies. The Seventh Circuit rejected a preemption challenge and applied the state law in a case involving a challenge to an insurance provider’s definition of “disability,” The court did not address whether the denial of benefits was arbitrary and capricious. View "Fontaine v. Metropolitan Life Ins. Co" on Justia Law

In 2009, Liu, a physician in a residency program, elected basic life insurance coverage from LINA through his employer’s ERISA plan and elected supplemental coverage in an amount four times his salary. Asked whether, within the last five years he had been diagnosed with “Cancer, Tumor, Leukemia, Hodgkin’s Disease, Polyps or Mole,” he answered “no.” One month after submitting his application, Liu received a cancer diagnosis. On March 1, 2010, the insurance became effective. On April 23, 2010, Liu died. LINA paid the basic benefit of $46,858.49, but reviewed Liu’s medical records, which revealed that Liu had been experiencing symptoms without a diagnosis before submitting his November 12 application. LINA then issued a denial, stating: While the form was completed accurately at the time ... a diagnosis of cancer prior to the coverage approval date was not disclosed … [the] Form states ... any changes in your health prior to the insurance effective date must be reported. His wife responded that Liu was told he would not have to provide evidence of good health, but did not identify the person who made the alleged representation. The court rejected the wife’s suit on summary judgment. The Eighth Circuit affirmed. Liu breached an application requirement by failing to notify LINA of a cancer diagnosis he received before a policy issued. View "Huang v. Life Ins. Co. of N. Am." on Justia Law

Michels is a member of the Pipe Line Contractors Association (PLCA), a trade association that negotiates collective bargaining agreements (CBAs) on behalf of its employer members with unions. In 2006, the PLCA and the Union entered into a CBA in “effect until January 31, 2011, and thereafter from year to year unless terminated at the option of either party after sixty (60) days’ notice.” The CBA required contributions to the Central States multiemployer pension plan, 29 U.S.C. 1000(2), (3), (37). In August 2010, the PLCA informed the Union that it intended to terminate the 2006 CBA on January 31, 2011, and begin negotiations for a new agreement; the parties signed eight extensions, the last ending November 15, 2011. Michels contributed to the pension plan throughout those extensions. The parties agreed that the employers would cease making contributions to the plan as of November 15, 2011; that they would make comparable payments to an escrow fund until a “mutually acceptable” fund was designated; and that they would otherwise extend the terms of the 2006 CBA until December 31, 2011. The fund claimed that the obligation to make contributions had not ended. The Seventh Circuit reversed the district court holding that this was not sufficient to end the duty to contribute. View "Michels Corp. v. Cent. States, SE & SW Areas Pension Fund" on Justia Law

The Iron Workers negotiated a contract that required JD Steel to make contributions, on behalf of its employees, to the pension funds for local unions in which the employees performed work, amounting $10.00 for every hour that a JD employee worked in the local union's territory. Later, the Iron Workers negotiated a similar contract with Davis Rebar, except that, rather than require contributions to the local unions’ pension funds, the contract required Davis to make identical contributions to the local unions’ defined-contribution plans, such as a 401(k) plan. In 2013, JD worked on a parking garage at Cleveland’s Fairview Hospital while Davis worked on a garage at University Hospital. Both jobs were within the territory of the Local 17 Iron Workers Union. Davis apparently used equipment bearing JD’s name and logo. The companies shared a foreman and supervisors. The pension plan sued under 29 U.S.C. 1132(a)(3), alleging that JD and Davis are actually the same company, so that Davis is bound by JD’s contract and must make additional payments. Each company has made all payments required by its individual contract. The Sixth Circuit affirmed dismissal. Reasoning that the same association of unions negotiated and signed both agreements, the court declined to set aside the association’s judgment regarding its members’ best interests. View "Bd. Trs. Local 17 Iron Workers Pension Fund v. Harris Davis Rebar LLC" on Justia Law

A Challenge employee consulted Dr. Mirza about back pain, agreed to undergo an endoscopic discectomy, and executed an assignment of her benefits under Challenge’s plan. Mizra completed the procedure and submitted a claim for $34,500, which was denied. Mirza submitted additional documents. The claim was denied again. Mirza went through internal review and, on August 12, 2010, received a letter denying his final appeal, indicating that the procedure was not covered because it was medically investigational, and notifying Mirza of his right to bring a civil action under the Employee Retirement Income Security Act, 29 U.S.C. 1001. Neither the letter nor the earlier denials mentioned that, under the plan, Mirza had one year from the final denial to seek judicial review. While the parties debate the substance of an earlier phone call, the first time Mirza received written notice of the one-year deadline was April 11, 2011. On March 8, 2012, Mirza sued. The district court granted defendants summary judgment. The Third Circuit vacated. Plan administrators must inform claimants of plan-imposed deadlines for judicial review in their notifications denying benefits. The appropriate remedy is to set aside the plan’s time limit and apply the limitations period from New Jersey’s six-year deadline for breach of contract claims. View "Mirza v. Ins. Admin. of Am., Inc" on Justia Law

The NEI Board administers a self-funded, multi-employer health plan covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. A Trust Agreement, executed by the participating companies and the Board, does not specify Plan details, but provides that “[t]he detailed basis on which payment of benefits is to be made … shall be set forth in the Plan of Welfare Benefits … subject to amendment by the Trustees.” The National Elevator Industry Health Benefit Plan Summary Plan Description, (SPD) provides the details and includes a subrogation provision: The Plan has the right to recover benefits advanced to a covered person for expenses or losses caused by another party. The Plan is only obligated to provide covered benefits resulting from that illness or injury that exceed amounts recovered from another party (regardless of whether designated to cover medical expenses). The Plan sought reimbursement for medical expenses paid on Moore’s behalf, following Moore’s settlement of a negligence action against entities responsible for injuries he suffered in an accident. Moore counterclaimed, alleging that the Board had violated its fiduciary duty by misrepresenting the Plan terms. The Sixth Circuit found that the SPD containing the subrogation provision set out the binding terms of the Plan and that the plain language of the provision required reimbursement. View "Bd. of Trustees v. Moore" on Justia Law

During his employment with a subsidiary of Santander Holdings, Stevens received treatment for ankylosing spondylitis, a chronic inflammatory disease, and participated in a short-term disability plan (STD) and a long-term disability plan (LTD). When Stevens’ condition worsened, Liberty Mutual, the administrator of Santander’s plans, initially awarded STD benefits to Stevens, then determined that Stevens no longer suffered from a qualifying disability and terminated his benefits. Stevens sued under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. The district court found that Liberty Mutual’s decision to terminate Stevens’s STD benefits was arbitrary and capricious and remanded with instructions to reinstate Stevens’s STD benefit payments retroactively and to determine his eligibility for LTD benefit payments. The Third Circuit dismissed an appeal for lack of jurisdiction, finding that the remand order to the plan administrator was not a “final decision” appealable pursuant to 28 U.S.C. 1291 at that time. The district court retained jurisdiction over the case and the order is not yet appealable. View "Stevens v. Santander Holdings USA Inc." on Justia Law

Plaintiffs filed suit against United, claiming that United had violated its fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B), (a)(3), and the terms of ERSIA-governed health insurance plans administered by United, and the Mental Health Parity and Addiction Equity Act of 2008 (the Parity Act), 29 U.S.C. 1185a(a)(3)(A). Plaintiffs also brought three additional counts under New York State law. The district court granted United's motion to dismiss. The court concluded that NYSPA has standing at this stage of the litigation and that Plaintiff Denbo’s claims, but not Plaintiff Dr. Menolascino’s claims, should be permitted to proceed. Therefore, the court affirmed in part and vacated in part, remanding for further proceedings. View "N.Y. State Psychiatric Ass’n v. UnitedHealth Grp." on Justia Law

Kevin and Lisa Nutt worked at Osceola Nursing Home. Funds were withheld from their paychecks as “pre-tax insurance.” After Kevin was injured, they learned that Osceola had not paid premiums. Their policy had lapsed; the Nutts owed $233,000 for medical services. The insurer told Lisa that it could reinstate the policy and pay the bills if Osceola made the delinquent premium payments. Osceola did not do so. Osceola then entered into a contract with Cooper, who specialized in turning around financially troubled nursing homes. Cooper’s company, Berryville, ultimately took title to the property. Before the closing, Cooper could assume management under a temporary lease. Cooper assigned this lease to OTLC, created for the project and owned by Hargis. Though OTLC was independent, Hargis regularly worked with Cooper in nursing-home ventures. OTLC operated the facility for Cooper and Berryville for three years. Nutt told Hargis about the outstanding bills. Days later, OTLC fired both Lisa and Kevin. They sued. The court entered default judgment against Osceola under the Employee Retirement Income Security Act, 29 U.S.C. 1001; found that they could not provide adequate relief; and, on a theory of successor liability, held OTLC liable. The Eighth Circuit reversed, stating that if successor liability required only subsequent operation, it would discourage the free transfer of assets to their most valuable uses. OTLC was not a party to the unlawful practices of Osceola and operated without significant connection to the culpable parties. View "Nutt v. Osceola Therapy & Living Cntr., Inc." on Justia Law