Justia ERISA Opinion Summaries

In a previous decision of an appeal of a case brought under the Employees Retirement Income Security Act of 1974, the First Circuit Court of Appeals agreed with Plaintiff that the First Circuit should not longer apply the arbitrary and capricious standard of review to certain benefits actions. Because the Court found the record was inadequate to permit de novo review on Plaintiff’s entitlement to benefits, the Court remanded the case for further development of the evidence. Plaintiff subsequently filed a motion seeking an award of attorney’s fees and costs for the litigation in the district court and on appeal. The First Circuit remitted Plaintiff’s fee request to the district court for a determination in the first instance of the proper amount of the award, holding (1) the Court’s prior decision afforded Plaintiff a degree of success on the merits that qualified her for an award of fees; and (2) an award of fees is appropriate and properly ordered at this time. View "Gross v. Sun Life Assurance Co. of Canada" on Justia Law

DiGeronimo and other employers contributed to the Teamsters Local Union No. 293 Pension Plan, which is governed by the Employee Retirement Income Security Act, 29 U.S.C. 1001–1461. Defendants are trustees of the Plan and managed the Plan, including negotiating and ratifying contribution rates and overseeing the Plan’s investments and expenses. Defendants terminated the Plan in December 2009 because substantially all of the Plan’s contributing employers withdrew from paying contributions. Defendants assessed $1,755,733 in “withdrawal liability” to DiGeronimo, which represents its share of the $49,000,000 in unfunded, vested benefits that the contributing employers owed the Plan. DiGeronimo sued defendants under 29 U.S.C. 1451(a), alleging that defendants negligently managed the Plan’s assets, causing increased withdrawal liability. The district court dismissed holding, that there was no substantive basis for the negligence claim in any section of ERISA or under the federal common law. The Sixth Circuit affirmed: a contributing employer to a multiemployer pension plan has no cause of action against plan trustees for negligent management under the federal common law of ERISA pension plans. View "DiGeronimo Aggregates, LLC v. Zemla" on Justia Law

Plaintiff Lucrecia Carpio Holmes appealed a district court’s ruling that her claim for disability benefits under the Employee Retirement Income Security Act (ERISA) was barred due to her failure to exhaust administrative remedies. Finding no reversible error, the Tenth Circuit affirmed. View "Holmes v. Colorado Coalition" on Justia Law

Plaintiff filed suit against his deceased son's employer and the insurer, MetLife, under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq, after plaintiff was denied benefits of the son's life insurance policy. The court reversed the district court's grant of summary judgment to defendants on plaintiff's section 1132(a)(1)(B) claim where there were outstanding questions of material fact regarding whether MetLife abused its discretion when it denied benefits because the plan did not define evidence of insurability; reversed the denial of plaintiff's motion to add a claim under section 1132(a)(3); and remanded to the district court so that plaintiff has a full opportunity to litigate both his ERISA claims. View "Silva v. Metropolitan Life Ins. Co., et al." on Justia Law

As a Solvay employee Moyer participated in Solvay’s ERISA- governed Long Term Disability Plan. In 2005 MetLife initially approved Moyer’s claim for benefits. MetLife reversed its decision in 2007 after determining that Moyer retained the physical capacity to perform work other than his former job. In an administrative appeal, MetLife affirmed the revocation on June 20, 2008. Moyer’s adverse benefit determination letter included notice of the right to judicial review but failed to include notice that a three-year contractual time limit applied. The Summary Plan Description failed to provide notice of either Moyer’s right to judicial review or the applicable time limit. On February 20, 2012, Moyer sued MetLife, seeking recovery of unpaid plan benefits under 29 U.S.C. 1132(a)(1)(B). The district court held that the plan’s limitations period barred Moyer’s claim, noting that the plan documents—which were not sent to participants unless requested—stated that there was a three-year limitations period for filing suit, so that MetLife provided Moyer with constructive notice of the contractual time limit. The Sixth Circuit reversed. Exclusion of the judicial review time limits from the adverse benefit determination letter was inconsistent with ensuring a fair opportunity for review and rendered the letter not in substantial compliance. View "Moyer v. Metropolitan Life Ins. Co" on Justia Law

Plaintiffs, employed by defense contractor Qinetiq to work on a military base in Iraq, were enrolled in Qinetiq’s Basic Long Term Disability, Basic Life, and Accidental Death and Dismemberment insurance policies, governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, under a single contract with Prudential. Qinetiq paid the premiums. Plaintiffs also purchased, with their own funds, supplemental coverage under the same terms as the basic policies; there was a single summary plan description. An employee would file a single claim for basic and supplemental coverage benefits. The plan booklets provided that loss is not covered if it results from war, or any act of war, declared or undeclared. These exclusions applied to both the basic and supplemental policies. The plaintiffs were not otherwise uninsured for excluded injuries. Qinetiq obtained insurance required by the Defense Base Act, 42 U.S.C. 1651. After Prudential denied claims, the plaintiffs sued, alleging violations of the state consumer fraud acts and the Truth in Consumer Contract, Warranty, and Notice Act; breach of contract and breach of the implied covenant of good faith and fair dealing; and intentional or negligent misrepresentation or omission. They contended that Prudential fraudulently induced them to buy supplemental coverage knowing that any claim they filed would likely be subject to the war exclusions, rendering supplemental coverage effectively worthless. The district court dismissed, treating the basic and supplemental policies as components of a single plan, and holding that all state law claims were preempted by ERISA. The Third Circuit affirmed, holding that the supplemental coverage cannot be “unbundled” from ERISA coverage. View "Menkes v. Prudential Ins. Co. of Am." on Justia Law

Hayssen and its employees were parties to a Plant Closing Agreement that promised medical benefits upon retirement. In 1996, Bemis acquired Hayssen and assumed its obligations. Bemis reduced benefits under the Agreement: increasing co-pays and deductibles and eliminating its prescription drug program. Former employees sued under the Employee Retirement Income Security Act, 29 U.S.C. 1132, and the Labor-Management Relations Act, 29 U.S.C. 185(a). The court certified a class, but granted summary judgment to Bemis, reasoning that the Agreement did not establish a lifetime interest in a certain level of benefits. About a month later, Bemis eliminated all medical benefits under the Agreement. The Seventh Circuit reversed, concluding that the parties intended to provide lifetime medical coverage. On remand, the court granted a preliminary injunction forcing Bemis to restore the benefits eliminated in 2009 and provide a basic Medicare Part D drug benefit. The court awarded fees and costs, finding that the company’s position was not substantially justified. The judge struck billing entries that were vague or for time not reasonably expended on the case, concluded that the lawyers’ billing rates were reasonable, and calculated the lodestar amount to reach an award of $403,053.75, for four years of advocacy, including an appeal and trial preparation. The Seventh Circuit affirmed. View "Temme v. Bemis Co., Inc." on Justia Law

Plaintiff filed suit on behalf of himself and other participants in RJR's 401(k) retirement savings plan (collectively, "the participants"), alleging that RJR breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., when it liquidated two funds. The court affirmed the district court's holding that RJR breached its duty of procedural prudence and therefore bore the burden of proof as to causation. The court concluded, however, that the district court failed to apply the correct "would have" instead of "could have" legal standard in assessing RJR's liability. Accordingly, the court reversed and remanded for the district court to determine whether, under the correct legal standard, RJR's imprudence caused that loss. View "Tatum v. RJR Pension Investment Committee" on Justia Law

In 2011, Michigan passed the Health Insurance Claims Assessment Act, Mich. Comp. Laws 550.1731–1741, to generate revenue needed to fund its obligations under Medicaid. The Act functions by imposing a one-percent tax on all “paid claims” by “carriers” or “third party administrators” to healthcare providers for services rendered in Michigan for Michigan residents. “Carriers” include sponsors of “group health plan[s]” set up under the strictures of the Employee Retirement Income Security Act, 29 U.S.C. 1002–1461. On top of the tax, every carrier and third-party administrator paying the tax must submit quarterly returns with to the Michigan Department of the Treasury and “keep accurate and complete records and pertinent documents as required by the department.” Every carrier and third-party administrator must also “develop and implement a methodology by which it will collect the [tax]” subject to several conditions. SIIA sought a declaratory judgment that ERISA preempted the Act, and an injunction, to prevent implementation and enforcement of the Act against the ERISA-covered entities. The district court dismissed, concluding that the Act did not offend ERISA’s express preemption clause because the Act did not “relate to” an ERISA-governed benefit plan. The Sixth Circuit affirmed, finding that the statute escapes the preemptive reach of ERISA. View "Self-Ins. Inst. of Am., Inc. v. Snyder" on Justia Law

In 2010, plaintiffs and Tidyman’s Management Services Inc. (TMSI) filed a complaint against Michael A. Davis and John Maxwell in their capacities as officers and directors of TMSI and/or its subsidiary, Tidyman’s LLC, alleging breach of corporate duties arising out of a merger between TMSI and SuperValu, which created Tidyman’s LLC. Plaintiffs requested punitive damages and attorney fees. The merger at issue occurred despite advice from a financial advisor TMSI had retained that the company should be sold, and the complaint alleged that the directors and officers had misrepresented the merit of the transaction. TMSI is a Washington corporation with its principal place of business in Montana, and was a member of Tidyman’s LLC; employee shareholders owned TMSI. A corporate liability insurance policy was in place that purported to insure Davis and Maxwell against liability incurred in their positions as officers and directors of Tidyman’s LLC. The Policy was to provide a legal defense for Davis and Maxwell throughout the federal ERISA litigation. The issues this case presented to the Montana Supreme Court were: (1) whether the District Court was correct in concluding Montana law, rather than Washington law, applied in this case; (2) whether the District Court erred in concluding that the corporate liability insurer breached its duty to defend without analyzing coverage under the policy; (3) whether the District Court erred in denying the insurer a hearing and discovery on reasonableness and collusion related to the stipulated settlements; and (4) whether the District Court erred by awarding pre-judgment interest, or in its determination of when the interest began accruing. The Montana Court concluded that genuine issues of material fact regarding reasonableness precluded summary judgment on the amount of the stipulated settlements. Accordingly,the Court reversed judgment on the stipulated settlements and remanded this case for further proceedings. The Court affirmed on all other issues. View "Tidyman s et al. v. Davis et al." on Justia Law