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ERISA Watch – December 28, 2015

Good morning, folks! Although ERISA Watch was scheduled to be down for the holidays, the force is strong with this past week’s cases. Today’s notable decision is out of the 11th Circuit Court of Appeals – Liebman v. Metro. Life Ins. Co., No. 14-13197, __F.3d___, 2015 WL 9259224 (11th Cir. Dec. 18, 2015), a case involving an ERISA interference claim. The Court held that the district court erred by finding that the plaintiff was not qualified for his position at MetLife where his replacement was younger than him and he had worked for MetLife for nearly three decades. The Court remanded to the district court to decide some evidentiary issues before reconsidering whether the plaintiff can establish a prima facie case of interference. It’s a rare case that a plaintiff prevails on a Section 510 claim so we’ll keep our eye on this one. Don’t forget that there is still time to take the ERISA Watch Charity Challenge. Thank you to the handful of people who have already donated! Donate $100 or more to any non-profit organization between now and December 31st in the name of ERISA Watch and I will send you your very own PDF compilation of all 2015 case summaries categorized by subject matter and jurisdiction. Enjoy this week’s short newsletter. Until next year!

Your reliable source for summaries of recent ERISA decisions

Below is Roberts Disability Law, P.C. summary of this past week’s notable ERISA decisions.

Ninth Circuit

Denial of long term disability benefits is an abuse of discretion where insurer committed a number of procedural irregularities in its review of the claim and appeal. Yancy v. United of Omaha Life Ins. Co., No. CV14-9803 PSG (PJWX), __F.Supp.3d___, 2015 WL 9311729 (C.D. Cal. Dec. 18, 2015) (Judge Philip S. Gutierrez). The court found that Defendant abused its discretion when it denied Plaintiff’s claim for long term disability benefits. Here, Plaintiff had submitted years of medical records showing that she suffers from some combination of systemic lupus erythematosus, fibromyalgia, migraines, and major depression. Regarding the standard of review and Defendant’s structural conflict of interest, the court found certain factors warranting increased skepticism: 1) Defendant provided inconsistent reasons for denial, at first claiming lack of proof of cognitive impairment and then later changing the reason to lack of evidence of physical impairment; 2) Defendant failed to adequately investigate Plaintiff’s claim or to ask Plaintiff for evidence it deemed necessary to render its decision; 3) Defendant failed to credit reliable evidence; and 4) Defendant chose a reviewing physician who did not believe in awarding disability benefits to claimants with fibromyalgia. The court also found that Defendant engaged in procedural error where it relied on a reviewing doctor’s report without affording Plaintiff an opportunity to view and respond to the report. Defendant also offered conflicting construction of plan provisions by its implicit requirement that Plaintiff submit objective evidence of her disability but such requirement is not stated in the LTD policy. The court also found that Defendant erred by failing to develop facts it deemed necessary to making its determination. In sum, the court concluded that there is no evidence which can provide a reasonable basis for Defendant’s denial when all of the circumstances of Plaintiff’s case are considered in the aggregate.

Eleventh Circuit

District court erred by finding that employee was not qualified for his position in determining that employee did not establish a prima facie case of ERISA interference. Liebman v. Metro. Life Ins. Co., No. 14-13197, __F.3d___, 2015 WL 9259224 (11th Cir. Dec. 18, 2015) (Before ED CARNES, Chief Judge, MARTIN, Circuit Judge, and THAPAR,* District Judge). The Eleventh Circuit vacated and remanded the district court’s grant of summary judgment in favor of MetLife on Liebman’s ERISA interference claim under 29 U.S.C. § 1140. To establish a prima facie ERISA case, an employee must show that he: (1) was entitled to ERISA protection; (2) was qualified for his position; and (3) was discharged under circumstances that give rise to an inference of discrimination. The district court held that Liebman was not qualified for his position at MetLife but the Eleventh Circuit disagreed. It held that the replacement employee was substantially younger than Liebman, and nine years in virtually same position, and nearly three decades with employer, was long enough to support inference that Liebman was qualified for his job. The district court did not address whether Liebman was discharged under circumstances that give rise to an inference of discrimination. The court noted that Liebman attested that his supervisor made several comments suggesting he was jealous of Liebman’s pension plan. Although MetLife contended his declaration contradicted his deposition testimony and had moved to strike a witness’s sworn affidavit, the district court did not rule on these issues. The Eleventh Circuit remanded the matter to district court to determine the admissibility of the declarations before determining whether Liebman can establish a prima facie case under ERISA.

Select Slip Copy & Not Reported Decisions

Disability Benefit Claims

First Circuit

Court granted MetLife’s motion to dismiss Plaintiff’s claim that it improperly reduced his LTD benefits under two separate disability plans by the amount received in SSDI benefits, effectively doubling the reduction. Canlas v. Metropolitan Life Insurance Company, No. CV DKC 15-0702, 2015 WL 9302936 (D. Md. Dec. 22, 2015) (Judge Deborah K. Chasanow).

Second Circuit

Insurer did not abuse discretion denying long term disability benefits to aircraft engineer who worked full-time during the Elimination Period and was not incapable of performing at least some of his material duties. Sobhani v. Reliance Standard Life Ins. Co., No. 14-3430-CV, __Fed.Appx.___, 2015 WL 9245104 (2d Cir. Dec. 18, 2015) (Present JOSÉ A. CABRANES, BARRINGTON D. PARKER, RAYMOND J. LOHIER, JR., Circuit Judges).

Eighth Circuit

Aetna abused its discretion in denying Plaintiff’s LTD claim by finding own occupation to be “sedentary” based on its vocational reviewer on appeal and heavily relying on the conclusions of its three independent reviewers. Plaintiff is entitled to award of attorneys’ fees. Jalowiec v. Aetna Life Ins. Co., No. CV 14-4332 (DWF/LIB), 2015 WL 9294269 (D. Minn. Dec. 21, 2015) (Judge Donovan W. Frank).

ERISA Preemption

Fourth Circuit

State law claims against employer related to termination of spouse’s life insurance coverage is completely preempted by ERISA. Prince v. Sears Holding Corp., No. 1:15-CV-6, 2015 WL 9307292 (N.D.W. Va. Dec. 21, 2015) (Judge John Preston Bailey).

Pension Benefit Claims

Third Circuit

A divorce decree, entered well before either ex-spouse filed a bankruptcy petition, is sufficient to exclude ERISA-plan proceeds from the bankruptcy estate. Crawford v. Hertzberg, et al., No. CV 15-240, 2015 WL 9304509 (W.D. Pa. Dec. 22, 2015) (Judge Cathy Bissoon).

Plan that is unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees is a top hat plan exempt from the substantive provisions of ERISA. Sikora v. UPMC, et al., No. 2:12-CV-01860, 2015 WL 9288174 (W.D. Pa. Dec. 22, 2015) (Judge Mark R. Hornak).

Pleading Issues & Procedure

Ninth Circuit

Court grants motion to compel arbitration of participant’s ERISA claim against Aetna California challenging “benefits cap” for treatment of autism as violation of California’s Mental Health Parity Act. Sanzone-Ortiz v. Aetna Health of California, Inc., No. 15-CV-03334-WHO, 2015 WL 9303993 (N.D. Cal. Dec. 22, 2015) (Judge William H. Orrick).

Default judgment against Defendants on Plaintiff’s claim for denied medical benefits affirmed, where Defendants sporadically participated in the litigation and frequently failed to appear (including a mandatory status conference). The district court did not abuse its discretion in declining to grant the defendants a hearing on damages and awarding Plaintiff $200,000 in lifetime benefits available under the Plan and attorneys’ fees. Lasheen v. Embassy of The Arab Republic of Egypt, No. 13-17143, __Fed.Appx.___, 2015 WL 9264053 (9th Cir. Dec. 18, 2015) (KOZINSKI, BYBEE, and CHRISTEN, Circuit Judges).

Retaliation Claims

Third Circuit

At motion to dismiss stage, whether Plaintiff can prove that all seven Defendants acted with the specific intent to deny her ERISA protected benefits is not the issue at this juncture. Plaintiff sufficiently alleged that Defendants terminated her with the intent to deny her ERISA protected benefits to which she was entitled. Connearney v. Main Line Hospitals, Inc., et al., No. 15-02730, 2015 WL 9302912 (E.D. Pa. Dec. 22, 2015) (Judge Gerald J. Pappert).


Seventh Circuit

Sale of operative policy from an office in Chicago is sufficient to establish specific jurisdiction over Plaintiff’s ERISA claims and proper venue. Nagle v. The Hartford Life & Accident Ins. Co., No. 15-CV-6073, 2015 WL 9268420 (N.D. Ill. Dec. 21, 2015) (Judge Thomas M. Durkin).

* Please note that these are only case summaries of decisions as they are reported and do not constitute legal advice. These summaries are not updated to note any subsequent change in status, including whether a decision is reconsidered or vacated. The cases reported above were handled by other law firms but if you have questions about how the developing law impacts your ERISA benefit claim, the attorneys at Roberts Disability Law, P.C. may be able to advise you so please contact us. Case summaries authored by Michelle L. Roberts, Partner, Roberts Disability Law, P.C., 1050 Marina Village Pkwy., Ste. 105, Alameda, CA 94501; Tel: 510-230-2090.


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*Please note that this blog is a summary of a reported legal decision and does not constitute legal advice. This blog has not been updated to note any subsequent change in status, including whether a decision is reconsidered or vacated. The case above was handled by other law firms, but if you have questions about how the developing law impacts your ERISA benefit claim, the attorneys at Roberts Disability Law, P.C. may be able to advise you so please contact us.

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