Justia ERISA Opinion Summaries

Plaintiffs, salaried employees of Metal Container, participated in the Anheuser-Busch qualified defined-benefits pension plan under the Employee Retirement Income Security Act, 29 U.S.C. 1001-1461 (ERISA). The plan was amended in 2000 to add that upon a change in control, the retirement benefits of a participant “whose employment with the Controlled Group is involuntarily terminated within three (3) years after the Change in Control shall be determined by taking into account an additional five (5) years of Credited Service and ... an additional five (5) years of age.” The amendment followed management’s recognition that the plan was overfunded and might attract a potential acquirer. In 2008, InBev acquired Anheuser-Busch, including its subsidiary Metal Container, in a hostile takeover that was a “change in control” under the amendment. Plaintiffs continued working for Metal Container and remained employees of Anheuser-Busch’s Controlled Group until October 1, 2009, when InBev spun off Metal Container plants in a sale to Ball Corporation. Plaintiffs became employees of Ball. Plaintiffs sought recalculation of their future Anheuser-Busch retirement benefits, claiming that because their employment ended within three years of a change in control, they were entitled to enhanced benefits, regardless of the fact that Ball guaranteed them continued employment with substantially similar salary and benefits. Their claims were denied on the ground that they had not experienced unemployment. The district court dismissed their 29 U.S.C. 1132(a) claims of enhanced retirement benefits and breach of fiduciary duty. The Sixth Circuit reversed, finding the court’s reading of the 2000 amendment flawed. View "Adams v. Anheuser-Busch Co., Inc." on Justia Law

Alpine was an irrigation business owned by Robert from 1961 until it closed in 2009. Alpine was in arrears on pension fund payments to the Union. After a Joint Arbitration Board awarded it $56,269.97, the Union sought to compel the award under the Labor Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Security Act, 29 U.S.C. 1132(e)(1). During a deposition, Robert’s son, Jeffery, admitted his sole ownership of RWI and JV, which were established upon Alpine’s closing. Like Alpine, RWI services and installs lawn irrigation systems. JV’s sole business is leasing to RWI equipment that it purchased from Alpine. RWI operates out of Jeffery’s home, Alpine’s prior business address; all but one of RWI’s employees worked for Alpine. Almost all of RWI’s customers are former Alpine customers. The magistrate first denied the Union’s motion to impose judgment against RWI and JV as successors, but determined that the companies were successors under ERISA and that FRCP 25(c) provided an appropriate procedure and granted a motion to substitute. The Seventh Circuit affirmed, holding that the court properly applied the multifactor ERISA successorship test to find that an “interest” had been transferred within the meaning of FRCP 25(c) and properly resolved the motion without an evidentiary hearing.View "Sullivan v. Running Waters Irrigation, Inc." on Justia Law

Plaintiff filed suit against her former law firm alleging that decisions made by the firms' directors who administered the retirement plan breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The court concluded that ERISA's adoption of the common law's standard of fiduciary care in section 1104(a)(1)(B) permitted prudent fiduciaries making important decisions to rely on the advice of counsel in appropriate circumstances. Therefore, the court affirmed the district court's conclusion that the directors rightfully relied upon the advice of the plan's lawyer.View "Clark v. Feder Semo and Bard, P.C., et al." on Justia Law

The PAPER COMPANY's creditors successfully petitioned the Bankruptcy Court for relief under Chapter 7 of the Bankruptcy Code. The Bankruptcy Court then granted the PAPER COMPANY's motion to transform the Chapter 7 case into a Chapter 11 proceeding. While the Chapter 11 case was pending, the PBGC brought an action against the PAPER COMPANY. At issue on appeal was whether, under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., the trustee of a corporation that is a contributing sponsor and is in bankruptcy can maintain an action for the benefit of the bankruptcy estate and the estate's unsecured creditors against the corporation's former owner (as a former member of the controlled group) for liabilities arising from the termination of a pension plan. The court held that the answer is no. The court concluded that ERISA's funding requirements were put in place for the benefit of plan beneficiaries, not for the protection of a bankrupt plan sponsor's unsecured creditors. The trustee's complaint failed to state a claim for relief because it was brought for the benefit of the bankrupt's unsecured creditors. View "Durango-Georgia Paper Co., et al. v. H.G. Estate, LLC, et al." on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., alleging that LINA violated the disability insurance policy's terms and ERISA requirements - in part because LINA ignored the SSA process and the information it generated. The district court granted summary judgment in favor of LINA. Because LINA did not have the evidence presented to the SSA when it denied her last appeal - and in fact could not have had that evidence when it initially denied her claim - the court vacated the district court's judgment and remanded the case with instructions to remand plaintiff's claims to LINA for its consideration of the evidence presented to the SSA.View "Melech v. Life Ins. Co. of North America, et al." on Justia Law

Plaintiff filed suit against his former employer, Medtronic, alleging that the company improperly denied his claim for benefits under a long-term disability plan governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The court held that the district court did not abuse its discretion by admitting Medtronic's supplemental evidence for the limited purpose of determining the proper standard of review. The Plan provided Medtronic with complete and total discretionary authority to interpret and administer its provisions and this language is sufficient to trigger a deferential abuse-of-discretion standard of review and plaintiff failed to establish a procedural irregularity that would alter this standard or weigh in the court's consideration under it. Under this standard, the court agreed with the district court that Medtronic did not abuse its discretion in denying plaintiff's claim for "any occupation" long-term disability benefits. Accordingly, the court affirmed the judgment of the district court. View "Waldoch v. Medtronic, Inc." on Justia Law

Windstream filed suit against defendant and other retirees who challenged company authority to modify retiree benefits unilaterally. The court concluded that there was no evidence indicating that Windstream was required to obtain retiree consent. The court also concluded that the benefits were not permanently vested. Accordingly, the court affirmed the judgment in favor of Windstream. View "Windstream Corporation,., et al. v. Lee, et al." on Justia Law

Plaintiffs challenged an insurance company's use of "retained asset accounts" (RAAs) as a method of paying life insurance benefits in the ERISA context. They presented the district court with two basic questions: (1) whether the insurer's method of paying death benefits in the form of RAAs constitute self-dealing in plan assets in violation of ERISA section 406(b); and (2) whether this redemption method offended the insurer's duty of loyalty toward the class of beneficiaries in violation of ERISA section 404(a). The district court answered the first question in favor of the insurer and the second in favor of the plaintiff class. The court then awarded class-wide relief totaling more than $12,000,000. Both sides appealed. Upon review, the First Circuit Court of Appeals agreed with the district court that the insurer's use of RAAs in this case did not constitute self-dealing in plan assets. However, the Court disagreed with the district court's answer to the second question and held that the insurer's use of RAAs did not breach any duty of loyalty owed by the insurer to the plaintiff class. View "Merrimon, et al v. Unum Life Insurance Company" on Justia Law

Plaintiffs filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., against Xerox, the Plan, and the Plan Administrator. The Supreme Court reversed the court's most recent decision, holding that the court had erred in holding that, having found the Administrator's first interpretation of the retirement plan to be invalid, the district court properly refused to defer to the plan administrator's subsequent interpretation of the plan. On remand, the district court applied deferential review, holding that the Administrator's proposed offset was a reasonable interpretation of the retirement plan. The court held, however, that the proposed offset was an unreasonable interpretation of the retirement plan and that it violated ERISA's notice provisions. Although the court upheld the challenged discovery order, the court vacated the judgment and remanded for further proceedings.View "Frommert v. Conkright" on Justia Law

Plaintiff filed suit alleging that the International Plan denied him benefits to which he was entitled. The parties disputed whether plaintiff accrued enough credit under an earlier plan, the Local 963 Plan, which was later merged into the International Plan. On appeal, at issue was whether, because of the procedural irregularities in the administrator's handling of the claim, the district court should have applied a de novo standard of review. The court concluded that the district court applied the correct standard and affirmed the judgment, concluding that plaintiff had not alleged Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., violations that rose to a level requiring a more stringent standard of review.View "James v. Int'l Painters, et al." on Justia Law