Justia ERISA Opinion Summaries

The defined-contribution pension plan allows participants to choose among 32 options, including 24 mutual funds that are open to the public. These funds are no-load vehicles that do not charge a fee to buy or sell shares. Purchases and sales occur at net asset value, calculated daily. A no-load fund covers its expenses by deducting them from the assets under management. Plan participants contend that administrators violated fiduciary duties under the Employee Retirement Income Security Act, 29 U.S.C. 1104(a), by offering retail mutual funds, in which participants get the same terms (and thus bear the same expenses) as the general public and by requiring participants to bear the those expenses themselves, rather than having the plan cover costs. Plaintiffs contend that there should be access to wholesale or institutional investment vehicles. The district court dismissed. The Seventh Circuit affirmed. The plan offers a menu of high-expense, high-risk, and potentially high-return funds, together with low-expense index funds that track the market, and low-expense, low-risk, modest-return bond funds; it leaves the choice to the people most interested in the outcome. The district court acted within its discretion in awarding about $42,000 in costs. View "Loomis v. Exelon Corp." on Justia Law

In attempting to enroll his infant daughter, a covered employee failed to complete parts of the form indicating whether the child resided with employee, was dependent upon employee for more than 50 percent support and maintenance, and whether the child qualified to be claimed as a tax exemption on employee's federal tax return. The plan made several inquiries before sending a notice that coverage was denied. The employee did not appeal. The plan sued under the Employee Retirement Income Security Act , 29 U.S.C. 1001, to recover $472,357.84 paid to the medical college and $1,199,538.58 paid to the hospital on behalf of the child. The district court dismissed. The Seventh Circuit affirmed dismissal of the ERISA claim. The plan reserves the right to recover against "covered persons" if it has paid them or any other party on their behalf. Neither the treating entities nor the child are covered persons. Because the plan is not implicated, state law claims were not preempted; the court reversed dismissal of those claims. Plaintiffs' position was not unreasonable; the district court abused its discretion in awarding attorney fees. View "Kolbe & Kolbe Health & Welfare Benefit Plan v. Med. Coll. of WI" on Justia Law

In 2007 employee retired when the steel plant, at which he had worked for 42 years, shut down. Under a plan negotiated by the union, his pension payment, without any offset, was $688.13 a month. Employee was told that payment of his pension would be deferred for more than 10 years because the plan required that employee pay back workers' compensation settlements that he had received after sustaining on-the-job injuries in 2005 and 2006. The plan refers to offset for payments for "disability in the nature of a permanent disability for which the Company is liable." The district court entered judgment for the employee. The Seventh Circuit reversed. The committee's decision was within its discretion; the plan's specific mention of workers' compensation supports its characterization. View "Frye v. Thompson Steel Co., Inc." on Justia Law

When an employee left the company in 1997, took a $47,850 lump sum distribution of his pension. He later believed that the payment should have included the present value of future cost of living adjustments that would have been included had he received his pension as an annuity. In 2002, he filed a class action suit. The district court granted summary judgment on liability in favor of the class and the Seventh Circuit affirmed, holding that a COLA is an accrued benefit, as defined in ERISA, 29 U.S.C. 1002(23)(A). Before the district court ruled, the parties reached a settlement that each early retiree would receive roughly 3.5% of her original lump sum, unless the COLA on a normal-retirement-age-based annuity outweighed her early-retirement subsidy, a rare situation. The district court approved the proposed settlement and awarded attorney's fees. Objectors were not allowed to opt out. The Seventh Circuit affirmed, upholding determinations that the settlement was reasonable; that class counsel had adequately represented the early retirees and that further subclasses were unnecessary; that opt-out should be denied; and concerning attorney fees. View "Adamski v. Rohm & Haas Pension Plan" on Justia Law

Patient, insured by defendant, diagnosed with end-stage renal disease, and received dialysis at plaintiff's center. Three months after diagnosis, she became entitled to Medicare benefits (42 U.S.C. 426-1). Her plan provided that coverage ceased at that time, because of her entitlement to Medicare, but the insurer continued to pay for two months. Under the 1980 Medicare Secondary Payer Act, a group health plan may not take into account that an individual is entitled to Medicare benefits due to end-stage renal disease during the first 30 months (42 U.S.C. 1395y(b)(1)(C)(i)), but the insurer terminated coverage. Plaintiff continued to treat and bill. The insurer declared that termination was retroactive and attempted to offset "overpayment" against amounts due on other patients' accounts. The outstanding balance after patient's death was $210,000. Medicare paid less than would have been received from the insurer. The center brought an ERISA claim, 29 U.S.C. 1132(a)(1)(B), and a claim for double damages under the 1980 Act. The district court granted plaintiff summary judgment on its ERISA claim but dismissed the other. The Sixth Circuit affirmed on the ERISA claim and reversed dismissal. A healthcare provider need not previously "demonstrate" a private insurer's responsibility to pay before bringing a lawsuit under the 1980 Act's private cause of action.View "Bio-Medical Applications of TN, Inc. v. Cent. States SE & SW Areas Health Plan" on Justia Law

When plaintiff, a 14-year employee, was terminated from his position he negotiated a severance package based, in part, on his belief that he would be receiving a pension in a certain amount from the company's pension plan. The administrator for the plan, who was also the company's human resources manager, miscalculated. After signing off on the severance agreement, plaintiff learned of the error and brought an estoppel claim against the plan. The Seventh Circuit affirmed summary judgment in favor of the plan. Plaintiff did not present the extraordinary circumstances necessary for the court to entertain a claim for estoppel against an ERISA Plan and there was no evidence of intentional misrepresentation or detrimental reliance. View "Pearson v. Voith Paper Rolls Inc." on Justia Law

Plaintiff appealed the district court's dismissal of her ERISA, 29 U.S.C. 1001 et seq., action against defendant as not timely filed. Plaintiff was employed by defendant as a stockbroker in 1979 and starting in 1982, plaintiff had been disabled periodically from her employment. Plaintiff applied for long-term disability benefits around January 15, 1987. The court held that plaintiff's claim did not accrue in 1990 with regard to the ERISA statute of limitations, as the district court found, but rather accrued when her claim was finally denied on January 14, 2004. Therefore, plaintiff's action, filed on February 16, 2006, commenced within the four-year statutory limitations period for ERISA claims. The court also held that the limitations provision in the policy here did not apply to disability cases in which the claimant contested the amount of benefits or claims that the benefits have been miscalculated. Accordingly, the court vacated the judgment of the district court and remanded for further proceedings. View "Withrow v. Bache Halsey Stuart Shield, Inc." on Justia Law

Retirees filed suit in district court contending that their retiree health benefits were vested and that defendant's intended modification would violate both the Labor Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). Retirees subsequently appealed the denial of their motion for a preliminary injunction seeking continuation of certain healthcare benefits. The court held that the district court issued a thorough and well-reasoned opinion explaining in detail that the retirees failed to establish a likelihood of success on the merits. Accordingly, the court affirmed the district court's denial of the motion for preliminary injunction. View "Dewhurst, et al. v. Century Aluminum Co., et al." on Justia Law

Representatives of a putative class of participants in a 401(k) sued under the Employment Retirement Income Security Act, 29 U.S.C. 1001, claiming breach of fiduciary duty. They alleged that defendants inadequately selected investment options to include in the plan. The district court dismissed Fidelity defendants, holding they were not fiduciaries, and dismissed others for failure to state a claim. The Third Circuit affirmed. Fidelity did not a function as a fiduciary with respect to selecting and maintaining the range of investment options; its status as a directed trustee does not subject it to liability for these activities. There was no claim that Fidelity knew the selection of investment options constituted a breach of fiduciary duty and Fidelity is not liable as a non-fiduciary. Plaintiffs did not state a plausible claim. An ERISA defined contribution plan should offer participants meaningful choices about how to invest retirement savings. The plan at issue contains a variety of investment options including company stock, commingled funds, and mutual funds, with 73 distinct investment options. Among the retail mutual funds specifically targeted in the complaint were funds with a variety of risk and fee profiles, including low-risk and low-fee options. View "Renfro v. Unisys Corp, l" on Justia Law

The company decided to voluntarily terminate its qualified plan under the Employment Retirement Income Security Act, 29 U.S.C. 1001, but after going through initial statutory steps, realized that it would be too expensive and formally withdrew from the process. During the process, the company amended its plan to provide that if the plan terminated, employees could keep working at the company while still receiving the annuities the company purchased for them. The amendment was made in anticipation of the final step of the statutory termination process, which requires the purchase of private annuities for plan beneficiaries. Employees sued. The district court found that plaintiffs’ ability to receive an annuity while still working is not a protected right under ERISA or the plan's own terms, which protect beneficiaries from amendments that decrease "accrued benefits." The Seventh Circuit affirmed. ERISA only protects certain benefits, and those relevant here are all tied to benefits available at retirement. In any event, the ability to receive an annuity while still working was contingent on the plan terminating, which did not occur. View "Carter v. Pension Plan of A. Finkl and Sons Co." on Justia Law