Justia ERISA Opinion Summaries

Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B), claiming that Prudential wrongly denied him long term disability (LTD) benefits under a group policy sponsored by his former employer, Vertis. The court concluded that the district court correctly concluded that the plan language as confirmed by the Summary Plan Description explicitly granted Prudential discretion to interpret the plan and to determine eligibility for benefits. Prudential did not abuse its discretion in denying plaintiff long term disability benefits where Prudential provided plaintiff the required full and fair review before denying his first appeal. The court agreed with the district court that the subsequent medical evidence submitted with plaintiff's voluntary second appeal did not render Prudential's denial of his mandatory first appeal an abuse of discretion. Accordingly, the court denied plaintiff's motion to strike Prudential's separate appendix and Prudential's motion for leave to file a Sur-Reply Brief. View "Prezioso v. Prudential Ins. Co." on Justia Law

In the early 2000s, Raytheon underwent a major reorganization, including the sale of several business segments, including AIS, Optical, and Aerospace (segments at issue). As part of each sale, Raytheon retained the assets and liabilities of defined-benefit pension plans associated with the segments. Raytheon also calculated segment closing adjustments as required by CFR Cost Accounting Standards (CAS). Raytheon determined that some of its segments had pension surpluses, but the segments at issue had deficits. Although Raytheon paid the government its share of the surpluses, the government refused to pay its share of the deficits. Raytheon submitted certified claims for recovery of the deficits under the Contract Disputes Act, 41 U.S.C. 7103 (2011). The contracting officer issued final decisions denying these claims, reasoning that the adjustments were subject to the Federal Acquisition Regulation’s timely funding requirement, 48 CFR 31.205-6(j)(2)(i), and the deficits were therefore unallowable because Raytheon failed to fund the full amount of the pension deficits in the same year as the closings and that Raytheon’s segment closing calculations “do[] not comply with CAS 413[.]” The Claims Court awarded Raytheon $59.209,967 and rejected a claim for recovery with respect to one segment, finding that Raytheon applied the wrong asset allocation method in its adjustment calculation. The Federal Circuit affirmed.View "Raytheon Co. v. United States" on Justia Law

When Tyco Valves & Controls, L.P. decided to close one of its facilities located in Houston, Tyco offered certain employees retention agreements providing that, if the employees remained with the company through the facility’s closure, they would receive severance payments in the event they were not offered comparable employment with Tyco. After Tyco sold one of the production units located in the facility to another company, Plaintiffs, several former employees who had worked in that unit and been denied severance, filed a breach of contract action against Tyco. The trial court ruled in favor of the employees and awarded the severance pay. The court of appeals reversed. The Supreme Court affirmed, holding that the Employee Retirement Income and Security Act of 1974 preempted Plaintiffs’ breach-of-contract claims. View "Arsenio Colorado v. Tyco Valves & Controls, L.P." on Justia Law

In 2006 Finkl, a Chicago steel producer, initiated termination of its defined benefit pension plan under the Employment Retirement Income Security Act, apparently anticipating merger with another company. The Plan was amended in 2008, to include Section 11.6, a special provision for distributions in connection with the contemplated termination, to apply if a participant “ha[d] not begun to receive a benefit under the Plan at the time benefits are to be distributed on account of termination of the Plan.” In May 2008, Finkl decided not to terminate the Plan. Section 11.6 was deleted. Finkl notified the IRS that the Plan was not going to terminate. Seven Finkl employees sued, alleging that they were entitled to an immediate distribution of benefits while they were still working for Finkl and that repeal of Section 11.6 violated the anti-cutback terms of the Plan, I.R.C. 411(d)(6), and ERISA, 29 U.S.C. 1054(g). The IRS sent Finkl a favorable determination letter that the Plan had retained its tax qualified status. In 2011, the Seventh Circuit affirmed the district court’s award of summary judgment to Finkl. The employees then pursued a claim in the Tax Court, which ruled that they were collaterally estopped by the Seventh Circuit decision from challenging the 2009, determination letter, which concluded that the Plan had not been terminated and continued to qualify for favorable tax treatment. The Seventh Circuit affirmed. View "Carter v. Comm'r of Internal Revenue" on Justia Law

At issue in this case was whether ERISA preempted claims made under two Washington state laws designed to ensure that workers on public projects are paid for their work: chapters 39.08 and 60.28 RCW. When the Washington Supreme Court previously addressed this issue in 1994 and 2000, it held that ERISA preempted such claims. As a result of this conflict between Washington's rule and the rule followed by federal courts, the outcome of this type of case in Washington was entirely dependent on whether the lawsuit was filed in federal or state court. This has led to forum shopping, and created inconsistent and unjust results for parties in Washington. In light of the national shift in ERISA preemption jurisprudence and the persuasive reasoning underlying that shift, the Washington Court, through this opinion, joined courts across the country and held that this type of state law was not preempted by ERISA. View "W.G. Clark Constr. Co. v. Pac. Nw. Reg'l Council of Carpenters" on Justia Law

These consolidated appeals arose from a class action against ABB under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The district court entered judgment against the ABB defendants and the Fidelity defendants for breaching their fiduciary duties in violation of sections 1104, 1106, and 1109. The court affirmed the district court's judgment and award against the ABB fiduciaries with respect to recordkeeping; vacated the judgment and award on the participants' investment selection where the district court erroneously substituted its own de novo interpretation of the Plan, and mapping claims where the claims were timely; reversed the judgment against Fidelity where the district court erred in finding that Fidelity breached its fiduciary duty of loyalty by paying the expenses on the float accounts and distributing the remaining float to the investment options; vacated the attorney fee award as to all defendants; and remanded for further proceedings. View "Tussey, et al. v. ABB, Inc., et al." on Justia Law

Lewis was injured in an automobile accident and her health plan paid $180,000 for her medical treatment Lewis filed a tort suit against the driver (her son-in-law), represented by Georgia lawyer Lashgari, and obtained a $500,000 settlement. Lashgari knew the plan had a subrogation lien, but split the proceeds between himself and Lewis. He claimed that the plan was owed nothing. The plan filed suit under ERISA to enforce the lien, 29 U.S.C. 1132(a)(3). The defendants argued that because the settlement funds have been dissipated, the suit was actually for damages, not authorized by ERISA. The district judge ordered the defendants to place $180,000 in Lashgari’s trust account pending judgment. The defendants did not comply. A year later, the defendants having neither placed any money in a trust account nor produced any evidence of their inability to pay, the judge held them in civil contempt, ordered them to produce records that would establish their financial situations, and ordered Lashgari to documents relating to the contempt to the General Counsel of the State Bar for possible disciplinary proceedings against him. The defendants appealed the contempt order. The Seventh Circuit dismissed, characterizing the appeal as frivolous and the defendants’ conduct as outrageous. View "Cent. States, SE & SW Areas Health & Welfare Fund v. Lewis" on Justia Law

CareFirst, Inc., a nonstock, nonprofit Maryland corporation, is a holding company with two subsidiaries that provides health insurance for millions of Maryland residents. State law confers broad authority on the Maryland Insurance Commissioner to oversee its operation and adherence to its mission. This case arose from the termination of Leon Kaplan, a former executive of CareFirst. CareFirst declined to pay part of the post-termination compensation set forth in Kaplan's employment contract, reasoning that the compensation was not for "work actually performed," as that standard had been interpreted by the Commissioner. The Commissioner affirmed the decision not to pay the benefits, concluding that the payments would violate Md. Code Ann. Ins. 14-139. The Court of Appeals affirmed, holding (1) the Commissioner's determination was not preempted by ERISA; (2) the Commissioner's construction of the insurance code was legally correct; and (3) there was substantial evidence to support the Commissioner's determination in this case.View "Md. Ins. Comm'r. v. Kaplan" on Justia Law

Union-affiliated benefit funds (collectively, the Fund) sued Employer to recover unpaid employee-related remittances allegedly due under a collective bargaining agreement (CBA). The Fund also sought attorneys’ fees and costs pursuant to both the CBA and ERISA. The district judge awarded the Fund $26,897 in damages, and, in a separate judgment, awarded $18,000 in attorneys’ fees and $16,688 in expenses. Both parties appealed. The First Circuit Court of Appeals reversed the district court’s determination of damages, but the Supreme Court reversed, concluding that the First Circuit lacked jurisdiction to review the damage judgment. On remand, the First Circuit reinstated the cross-appeals challenging the separate judgment for fees and costs and affirmed the district court’s order awarding attorneys’ fees and expenses, holding that the award was not an abuse of the judge’s discretion. View "Int’l Union v. Ray Haluch Gravel Co." on Justia Law

In 2004, plaintiff appealed the denial of his long term disability (LTD) benefits under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Liberty moved for summary judgment. In a 2009 Report and Recommendation (R&R), the magistrate judge recommended denying Liberty's motion and granting summary judgment sua sponte to plaintiff. In 2012, the district court adopted the R&R and entered summary judgment for plaintiff, but denied his request for attorneys' fees. The court concluded that the district court did not err in granting summary judgment on plaintiff's claim for LTD benefits because Liberty's denial of LTD benefits was arbitrary and capricious where Liberty ignored substantial evidence from plaintiff's treating physician that he was incapable of performing his current occupation, while failing to offer any reliable evidence to the contrary; the court retained discretion to consider the Chambless v. Masters, Mates & Pilots Pension Plan factors, in determining whether to grant an eligible plaintiff's request for attorneys' fees, but must do so in a manner consistent with the court's case law, and could not selectively consider some factors while ignoring others; the district court misapplied the Chambliss framework, and therefore erred, in denying fees to a prevailing plaintiff primarily on the conclusion that Liberty had not acted in bad faith; and the record revealed no particular justification for denying plaintiff's attorneys' fees, and awarding fees in the circumstances presented here furthered the policy interest in vindicating the rights secured by ERISA. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Donachie v. Liberty Mutual Ins. Co., et al." on Justia Law