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ERISA Watch – July 30, 2015

Happy Thursday ERISA Watchers! This week’s notable decision is Laurent v. PricewaterhouseCoopers LLP, No. 14-1179, __F.3d___, 2015 WL 4477191 (2d Cir. July 23, 2015), where the Second Circuit held that a retirement plan’s definition of “normal retirement age” as five years of service violates ERISA. Plaintiffs alleged that the Plan’s definition of normal retirement age as five years of service denied them “whipsaw payments.” Whipsaw payments guarantee that plan participants who take distributions in the form of a lump sum when they terminate employment will receive the actuarial equivalent of the value of their accounts at retirement. (In 2006, the Pension Protection Act eliminated mandatory whipsaw payments and this case involves pre-PPA distributions). The Second Circuit held that the plan’s definition of “normal retirement age” as five years of service violates ERISA because five years of service bears no plausible relation to “normal retirement,” and is therefore inconsistent with the plain meaning of the statute. So if you thought you were retiring after five years put the bubbly away and get back to the grind.

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.

Second Circuit

Retirement plan’s definition of “normal retirement age” as five years of service violates ERISA. In Laurent v. PricewaterhouseCoopers LLP, No. 14-1179, __F.3d___, 2015 WL 4477191 (2d Cir. July 23, 2015), Plaintiffs, former employees of PricewaterhouseCoopers LLP (“PwC”), sued the company and its retirement plan, alleging that they were denied “whipsaw payments” because the plan defines “normal retirement age” as five years of service (which coincides with the time at which employees vest in the plan). Whipsaw payments guarantee that plan participants who take distributions in the form of a lump sum when they terminate employment will receive the actuarial equivalent of the value of their accounts at retirement. In 2006, Congress passed the Pension Protection Act, which provided that plans did not fail to satisfy ERISA solely because they did not provide actuarial equivalence for participants who terminated employment before normal retirement age and took a lump-sum payment, and thus eliminated mandatory whipsaw payments. The distributions at issue in this case predate the passage of the Pension Protection Act so the Act does not apply to this case. The district court denied Defendants’ motion to dismiss and held that the plan violated ERISA because (1) five years of service is not an “age” under ERISA, (2) the plan violated ERISA’s anti-backloading rules, and (3) the plan’s documents violated ERISA’s notice requirements. The Second Circuit held that the plan’s definition of “normal retirement age” as five years of service violates ERISA not because five years of service is not an “age,” but because it bears no plausible relation to “normal retirement,” and is therefore inconsistent with the plain meaning of the statute. ERISA defines “normal retirement age” as the earlier of “the time a plan participant attains normal retirement age under the plan” or the statutory default of age 65 or the fifth anniversary of plan participation. The court reasoned that the repetition of the phrase, “normal retirement age,” in § 3(24)(A) suggests that “the time” that a plan establishes as its normal retirement age must have some reasonable relationship to the age at which participants would normally retire. Giving the terms “normal” and “retirement” their ordinary meaning, “normal retirement” does not suggest anytime the employer wishes, or whenever an employee leaves a company after a few years on the job. The Second Circuit affirmed the district court without reaching the alternative reasons for denying the motion.

Sixth Circuit

Sedgwick abused its discretion in denying LTD claim by ignoring favorable treating physician evidence, relying heavily on physician consultants, and failing to get an in-person examination. In Shaw v. AT&T Umbrella Ben. Plan No. 1, No. 14-2224, 2015 WL 4548232 (6th Cir. July 29, 2015), the Sixth Circuit reversed the district court’s decision in favor of the AT & T Umbrella Benefit Plan on its denial of Plaintiff’s claim for long term disability benefits, finding that the Plan acted arbitrarily and capriciously in denying Plaintiff’s LTD benefits. With respect to the standard of review, Plaintiff argued that de novo review applies because there is insufficient evidence showing that the Plan gave Sedgwick discretionary authority. The court disagreed and found that the controlling agreement, the AT & T Midwest Disability Benefits Program, explicitly states that “[t]he Plan Administrator (or, in matters delegated to third parties, the third party that has been so delegated) will have sole discretion to interpret [the disability plan], including … determinations of coverage and eligibility for benefits.” The Plan identifies the IDSC as the claims administrator and the QRU as the appeals administrator and both are divisions within Sedgwick. Therefore, Sedgwick has “sole discretion to interpret the Program, including, but not limited to, interpretation of the terms of the Program, determinations of coverage and eligibility for benefits, and determination of all relevant factual matters.”

The court found that Sedgwick abused its discretion because it: (1) completely ignored favorable evidence from Shaw’s treating physicians; (2) relied on reviewing physicians who selectively reviewed treating physician evidence (the medical reviewers were Dr. Xico Roberto Garcia, a family-practice physician; Dr. Imad Shahhal, a neurosurgeon; and Dr. Jamie Lewis, a specialist in physical medicine and rehabilitation and pain medicine); (3) failed to conduct its own physical examinations, especially where the Plan’s physician advisors “second-guess[ed] [Shaw’s] treating physicians” and made “credibility determinations; and (4) relied heavily on physician consultants who may have a financial incentive to not find disability (the court noted that Dr. Lewis has been criticized by other courts). The court remanded this case to the district court to enter an order awarding Plaintiff LTD benefits.

Seventh Circuit

Notice of contingent withdrawal liability satisfies the successor liability notice requirement. In Tsareff v. ManWeb Servs., Inc., No. 14-1618, __F.3d__, 2015 WL 4508637 (7th Cir. July 27, 2015), a multiemployer pension fund trustee brought suit against an employer and its successor to collect on withdrawal liability allegedly owed by the employer. The district court granted in part the trustee’s motion for summary judgment and granted the successor’s motion for judgment as a matter of law. The Seventh Circuit held that the successor had sufficient pre-acquisition notice of the predecessor’s contingent withdrawal liability. Specifically, ManWeb had sufficient pre-acquisition notice of Tiernan & Hoover’s contingent withdrawal liability. Second, the court held that the district court erred as a matter of law in concluding that the plan had to establish that successor had notice that the predecessor failed to arbitrate. Notice is not required by the successor liability notice requirement nor supported by the policies underlying the imposition of successor liability in the context of the MPPAA. Lastly, the court held that the district court abused its discretion in finding no successor liability. Any dispute over withdrawal liability shall be arbitrated so the district court’s substantive review of the underlying withdrawal liability constitutes an error of law. The court reversed and remanded the case to the district court to consider the successor liability continuity requirement.

Tenth Circuit

Plan participant is not entitled to convert previously elected early retirement benefit into a disability claim under the unambiguous terms of defined benefit pension plan. In Martinez v. Plumbers & Pipefitters Nat. Pension Plan, No. 14-1315, __F.3d___, 2015 WL 4547570 (10th Cir. July 29, 2015), the Tenth Circuit affirmed the Fund’s denial of Plaintiff’s claim for disability benefits under a multiemployer defined benefit pension plan. Plaintiff had retired from plumbing in 2004 at age 56 and took advantage of the Plan’s early retirement pension. After a few years he resumed work and his pension was suspended during that time according to rules that prohibit retirement benefits during disqualifying employment. When he retired again in 2009, he requested the Fund to allow him to convert the pension benefits he previously elected from an early retirement pension to a disability pension-a change that would entitle him to higher monthly payments. The Fund denied the conversion and the district court upheld the denial. The Tenth Circuit agreed that the Plan language is unambiguous and allows Plan participants to apply for and receive only one type of pension benefit for life absent several clearly delineated exceptions, none of which apply to Plaintiff. With respect to the standard of review, the court declined to determine whether the Fund in fact violated ERISA’s procedural requirements or whether any of the alleged violations would be serious enough to warrant de novo review because, even considering the Fund’s denial of benefits de novo, the court would affirm. Plaintiff argued that the Fund was equitably estopped from denying his benefits because correspondence misled him into believing that he would be able to convert his retirement to a disability pension, including statements that he could “re-retire.” The court determined that because the Plan language is unambiguous and the representations cited by Plaintiff are not the type that rise to the requisite level of egregiousness, his equitable estoppel claim fails.

Select Slip Copy & Not Reported Decisions

Attorneys’ Fees

In Pactiv Corp. v. Sanchez, No. 13-CV-8182, 2015 WL 4508667 (N.D. Ill. July 23, 2015) (discussed again below), involving a subrogation plan by a health plan against a plan participant where the health plan prevailed on the merits, the court exercised its discretion to deny attorneys’ fees under the circumstances. The court found, most importantly, that there is no indication that Defendant took the position that it did in this litigation in bad faith or to harass Pactiv. Had the health plan asserted a Section 8(j) credit in the Workers; Compensation Proceeding for benefits that it already had paid on Defendant’s behalf, this action may well have been unnecessary. Moreover, Defendant’s waiver and preclusion arguments were not frivolous or patently unreasonable given Pactiv’s initial failure to assert its right to a credit. The court also found that ordering Defendant to pay any of Plaintiff’s attorneys’ fees might be burdensome and unrealistic.

Breach of Fiduciary Duty

In Huffman v. Prudential Ins. Co. of Am., No. 10-CV-5135, 2015 WL 4486676 (E.D. Pa. July 22, 2015), a putative class action challenging Prudential’s practice of investing death benefits due under ERISA-governed employee plans for Prudential’s own account, the court granted Plaintiffs’ Motion for Leave to File an Amended Complaint. The Amended Complaint asserts that insurance contracts purchased by employers are plan assets and asserts a new prohibited transaction theory under ERISA § 406(a) based on a new theory that Prudential is a “party in interest” of the plans whose fiduciaries have purchased a Prudential contract to provide benefits, and has received unreasonable compensation. The Amended Complaint also adds a common law cause of action for breach of fiduciary duty with respect to profiting from investment of funds backing the retained asset accounts to the extent ERISA does not govern this conduct. It withdraws the request for class certification under Rule 23(b)(1) and (2) and eliminates the request for injunctive relief. The court rejected Defendant’s argument that the amendment is futile, given the current state of the law governing use of retained asset accounts; and the request for leave to amend was unduly delayed and the amendment, if permitted, will prejudice Prudential.

In Perez v. Bar-K, Inc., No. C 14-05549 JSW, 2015 WL 4480359 (N.D. Cal. July 20, 2015), the court removed Defendant Bar-K, Inc. as a fiduciary to the Bar-K 401(k) Plan and ordered the Company to pay Plan losses in the amount of $1,320,252.16, including pre-judgment interest. The court appointed Receivership Management, Inc.as the Independent Fiduciary to the Plan who will be responsible for collecting, marshaling, paying out, and administering all of the Plan’s assets and taking further action with respect to the Plan as appropriate, including terminating the Plan when all of its assets are distributed to all eligible participants and beneficiaries and other responsibilities.

Disability Benefit Claims

Claimant wins! In Carrier v. Aetna Life Ins. Co., No. CV1403932BROFFMX, __F.Supp.3d___, 2015 WL 4511620 (C.D. Cal. July 24, 2015), on de novo review, the court found that Plaintiff, impaired by uterine cancer, neuropathy, and depression, was entitled to long term disability benefits and Aetna’s denial of her benefits was improper. The court declined to consider additional medical records that Plaintiff did not submit to Aetna during the claims and appeals process. The court remanded to Aetna to make a determination on Plaintiff’s entitlement to “any occupation” disability benefits. The reviewing physicians involved in this matter are Dr. Tamara Bowman, who specializes in Internal Medicine and Endocrinology and Dr. Malcolm McPhee, who specializes in pain management.

Claimant loses. In Realmuto v. Life Ins. Co. of N. Am., No. CIV.A. GLR-14-1386, 2015 WL 4528182 (D. Md. July 24, 2015), the court determined that after extensive review of the administrative record, including the surveillance video, the record does not support the subjectively reported severity of Plaintiff’s condition and the resulting physical limitations and restrictions. The surveillance showed Plaintiff engaging in various physical activities including pushing and pulling a lawn mower, trimming the edges of his lawn, using a leaf blower, riding his bike while simultaneously holding his dog’s leash, and playing a round of golf. The court found that the record supports the conclusion that he is able to perform the material duties of at least two occupations that would meet his Indexed Covered Earnings requirement and for which he is reasonably qualified. Accordingly, the court granted LINA’s Motion for Summary Judgment in part and denied LINA’s request for attorneys’ fees and costs.

Claimant loses. In McAlister v. Liberty Life Assur. Co. of Boston, No. CIV.A. 14-22-DLB-HAI, 2015 WL 4529297 (E.D. Ky. July 27, 2015), the court found that Liberty Life’s decision limiting Plaintiff’s long term disability benefits to 24 months under the Plan’s mental illness limitation was not arbitrary and capricious where Liberty Life determined that Plaintiff was not physically impaired from performing even her own occupation, and therefore was not entitled to additional benefits.

Claimant wins! In Wilson v. Walgreen Income Prot. Plan for Pharmacists & Registered Nurses, No. 6:13-CV-1840-ORL, 2015 WL 4528962 (M.D. Fla. July 27, 2015), the court adopted the Magistrate Judge’s report and recommendation and granted Plaintiff’s motion in part as follows: a. Sedgwick failed to follow the claim procedures established by the IPP and the regulations; no later than November 8, 2013, Plaintiff is deemed to have exhausted the administrative remedies available under the IPP; Plaintiffs appeal is deemed denied by operation of law on that date; and Plaintiff’s November 25, 2013 Complaint is ripe for review; the applicable standard of review is de novo; the denial of Plaintiff’s appeal is de novo wrong and Plaintiff is entitled to judgment as a matter of law; Plaintiff’s LTD benefits is reinstated from April 9, 2011 through November 25, 2013, the date the operative complaint was filed, with prejudgment interest on each monthly payment from the date due until the date paid; and the parties must meet and confer in a good faith attempt to resolve the Plaintiff’s claims for attorneys’ fees and costs.

Claimant wins! In Horn v. Life Ins. Co. of N. Am., No. 5:14-CV-3699, 2015 WL 4477039 (E.D. Pa. July 22, 2015), Plaintiff, disabled by pain caused by cervicalgia and cervical facet arthropathy, challenged LINA’s denial of her claim for LTD benefits. Here, the parties agreed that the court should apply a de novo standard of review because the policy language requiring “proof satisfactory” to the insurance company does not change the standard of review from de novo. LINA had her claim reviewed by LINA’s Associated Medical Director Dr. R. Norton Hall, Medical Director Dr. Paul Seiferth, and Dr. Marcus J. Goldman (psychiatry). Defendant did not directly challenge the notion that Plaintiff was in pain, but rather contended that Plaintiff’s physicians failed to articulate how Plaintiff’s pain prevented her from performing her job. The court found that pain in itself may be disabling and her doctors each identified specific ways in which Plaintiff’s pain affected her ability to work. In view of this consistent and detailed evidence from Plaintiff’s treatment providers, and in the context of a de novo review, the court found that Plaintiff offered satisfactory proof of her disability pursuant to Defendant’s policy. The court also found that Plaintiff’s depression and drug addiction stemmed from a physical condition, namely her chronic and severe pain, which had already rendered her disabled, so the twenty-four month limitation did not apply. The court remanded the “any occupation” disability decision to LINA.

Claimant sort of wins. In Flynn v. Ascension Health Long Term Disability Plan, No. 4:13CV2449 HEA, 2015 WL 4429767 (E.D. Mo. July 20, 2015), where the Plan denied Plaintiff’s claim for long term disability benefits, the court denied the parties’ motions for summary judgment, finding that there was disputed issues of material fact concerning Plaintiff’s prednisone usage. Because the court found that it cannot adjudicate whether Defendants’ decision to deny Plaintiff’s claim for long term disability benefits was arbitrary and capricious, it remanded the case to Sedgwick with directions to reopen the administrative record to either determine the status of Plaintiff’s prednisone use as of December 5, 2012, and her treating gastroenterologist’s opinions thereon, or to request a revised report from Dr. Alan Altman (peer reviewer specializing in Gastroenterology) which does not rely on his previous assumption that Plaintiff was off of prednisone per Plaintiff’s doctor’s instructions as of December 5, 2012. Plaintiff’s disability stemmed from Crohn’s disease.


In Austin-Conrad v. Reliance Standard Life Ins. Co., No. CV 4:10CV-00127-JHM, 2015 WL 4464103 (W.D. Ky. July 21, 2015), a matter involving a denial of long term disability benefits, Plaintiff sought discovery related to bias in the evaluation process, including the following topics: (1) incentive, bonus, or reward programs or systems, formal or informal, for an employee involved in reviewing disability claims; (2) contractual connections between the conflicted administrator/payor and the vendors/reviewers utilized in plaintiff’s claim; (3) statistical data regarding the number of claims files sent to the vendors/reviewers and the number of denials which resulted; (4) statistical data concerning the number of times the vendors/reviewers found claimants unable to work in at least a sedentary occupation or found that the claimants were not disabled; and (5) documentation of administrative processes designed only to check the accuracy of grants or claims. The court permitted this discovery but limited number 3 and 4 to a 10-year period. Plaintiff also sought discovery of the claims manual and related internal policies, which the court granted. Plaintiff sought permission to issue subpoena duces tecum to independent medical examiners, seeking to discover: (1) the number of IMEs they perform in comparison to the number of non-IME patients they see, with particular emphasis on those relating to complaints of fibromyalgia, chronic fatigue syndrome, polyneuropathy and associated depression and anxiety; (2) the compensation they receive for conducting IMEs in comparison to what they receive in other aspects of their medical practices; (3) IRS 1099 forms for work for insurance companies or medical examination companies; (4) lists of publications related to IMEs; (5) lists of previous testimony; (6) their schedules for the week surrounding her IME; and (7) production of copies of IMEs on other patients, with redaction to protect patient privacy. The court denied numbers 4, 5, 6, and 7 for venturing “too far afield.” The court permitted the other topics but stated that the amount paid by Reliance to the physicians is more appropriately sought by interrogatory to Reliance than subpoena to a non-party.

ERISA Preemption

In Kennedy Krieger Inst., Inc. v. Brundage Mgmt. Co., No. 5:15-CV-162-DAE, 2015 WL 4528885 (W.D. Tex. July 27, 2015), Plaintiffs filed suit in the District of Maryland against Brundage, the Brundage Plan, BMA, and Inetico for promissory estoppel, breach of contract, fraud (asserted only against Brundage), and violation of the Texas Insurance Code in connection with the denial of inpatient care for a developmentally disabled child who is covered by a self-funded health plan. The court found that the promissory estoppel claim is not preempted by ERISA based on the Fifth Circuit’s decision in Access Mediquip, L.L.C. v. UnitedHealthcare Insurance Co. However, Plaintiffs’ breach of contract claim is preempted. The court found that Plaintiffs’ claim under the Texas Insurance Code fails to provide notice of the nature of their claim such that the court is unable to determine whether the claim is preempted by ERISA. The court dismissed without prejudice Plaintiffs’ claim under the Texas Insurance Code. With respect to the Brundage Plan, the court found that there was no authority and certainly no “express statutory language,” suggesting that actions against an ERISA plan are limited to those brought under ERISA. As such, the Brundage Plan is not entitled to judgment on the pleadings on this basis, and the dismissal of Plaintiffs’ claims against the Brundage Plan for promissory estoppel and under the Texas Insurance Code is without prejudice.

Exhaustion of Administrative Remedies

In Wright v. Hartford Life & Acc. Ins. Co., No. 5:14-CV-00126-RLV, 2015 WL 4488656 (W.D.N.C. July 23, 2015), Hartford stopped paying Plaintiff long term disability benefits because she did not reimburse Hartford for an alleged overpayment. By the terms of 29 C.F.R. § 2560.503-1(m)(4) an adverse benefit determination is broader than a denial of benefits and includes a reduction in monthly benefit payments. Hartford was reducing Plaintiff’s benefits by the amount of her Social Security Benefits and then reducing her benefits until she repaid the alleged overpayment. The court found that the plain language of § 2560.503-1(m)(4) encompasses Hartford’s reduction of Plaintiff’s benefits and the reduction constitutes an adverse benefit determination subject to the notification requirements of § 2560.503-1(g). Because Plaintiff did not receive written notice of an adverse benefit determination consistent with § 2560.503-1(g), the court found that she is deemed to have exhausted her remedies under § 2560.503-1(I).

Medical Benefit Claims

In Lesnick-Oakes v. Am. Airlines, Inc., No. 15-10777, __Fed.Appx.___, 2015 WL 4488499 (11th Cir. July 24, 2015), the Eleventh Circuit affirmed the district court’s grant of summary judgment in favor of Defendant, finding that based on the claims record, the Plan was not “de novo wrong” in refusing to refund Plaintiff medical insurance premiums for her daughter. The Plan guidelines required Plaintiff to file a life event requesting that her daughter’s medical coverage be waived within 60 days of Plaintiff’s return to work. Plaintiff returned to work in 2010 and the benefits she had in place prior to her 2006 leave-of-absence, which included medical coverage for herself and her daughter, were automatically reinstated. The guidelines provide that benefit elections made during a leave-of-absence only apply for the duration of the leave-of-absence. Although Plaintiff waived medical coverage in February 2011, that waiver only applied to the duration of her January 2011 leave-of-absence; when she returned to work in March 2011, the benefits that she had in place prior to her January 2011 leave-of-absence were automatically reinstated.

Pension Benefit Claims

In Frisky-Watson v. Ford Motor Co., No. 1:15-CV-00083, 2015 WL 4496291 (N.D. Ohio July 23, 2015), the court granted Defendant’s motion for judgment on the administrative record on Plaintiff’s claim for surviving spouse benefits. At the time that the deceased spouse retired from the Ford Motor Company he was not married, and therefore did not elect surviving spouse benefits. He did contact Ford’s National Employee Services Center, a call center run by Ford and separate from the Defendant Board, to inform Ford of his marriage, and indicated a desire to add survivor benefits for Plaintiff. The call center representative gave him the Board’s telephone number and the UAW Retiree Medical Benefits Trust’s telephone number but there is no indication that the he ever called either of these numbers or completed a survivor benefits election form. The most relevant Plan language is as follows: “No election provided hereunder shall become effective under any circumstance for any retired employee whose completed election form is received by the Board …. On or after October 1, 1999, such election must have been received by the Board before the first day of the month in which the retiree has been married 18 months.” The court determined that the Board reasonably interpreted the Plan to require a completed election form to elect survivor benefits.

Pleading Issues & Procedure

In Jones v. Aetna Life Ins. Co., No. 4:15CV338 JCH, 2015 WL 4526027 (E.D. Mo. July 27, 2015), Plaintiff sought disability benefits under 29 U.S.C. § 1132(a)(1)(B) (Count I); alleged a breach of fiduciary duty under ERISA (Count II); and alleged a claim for statutory penalties under 29 U.S.C. §§ 1022(a), 1024(b), and 1132(c), for failure timely to provide the Summary Plan Description and/or the administrative record. The court found that Plaintiffs’ allegations are insufficient to meet the pleading requirements of Rule 8. For example, Plaintiff did not properly allege the specific roles and functions undertaken by each Defendant, nor did she delineate the sequence of events leading to the allegedly improper denial of benefits. The court granted Defendants’ Motion to Dismiss, but granted Plaintiff leave to file an Amended Complaint in which she specifies the alleged duties and failures of each Defendant. The court rejected Defendant’s argument that the breach of fiduciary duty claim was simply a repackaged claim for benefits. Plaintiff here makes a claim similar to that in Silva v. Metropolitan Life Ins. Co., 762 F.3d 711 (8th Cir.2014), seeking equitable relief, in the form of restitution or a surcharge, under 29 U.S.C. § 1132(a)(3). The court granted Plaintiff leave to file an Amended Complaint, in which she asserts her claim for equitable relief under the correct provision of ERISA.

In Bedwell v. Aetna, Inc., No. 3:14-CV-00081-RLY, 2015 WL 4507211 (S.D. Ind. July 23, 2015), the court dismissed Plaintiff’s lawsuit seeking an order requiring the health plan to pay for medical expenses incurred by Plaintiff. Plaintiff named the claims administrator as defendant but the court found that the proper defendant in this case is the Plan itself. The court gave Plaintiff the opportunity to seek leave to file an amended complaint.


In Wright v. Hartford Life & Acc. Ins. Co., No. 5:14-CV-00126-RLV, 2015 WL 4488656 (W.D.N.C. July 23, 2015), Plaintiff brought both a § 502(a)(1)(B) claim and a § 502(a)(3) against Defendant in connection with the handling of her long term disability claim. Plaintiff sought equitable relief in the form of an injunction against Defendant from engaging in further violations of ERISA but the court found that this is equitable relief pursued with the ultimate aim of securing the remedies afforded by § 1132(a)(1)(B). The court found that Plaintiff’s claim for equitable relief arises out of Hartford’s handling of the LTD benefit claim and monetary relief under § 502(a)(1)(B) would adequately remedy Plaintiff’s injury such that an additional claim under § 502(a)(3) is duplicative and unnecessary. The court granted Defendant’s Motion to Dismiss Plaintiff’s claim for equitable relief.

In Shelby Cnty. Health Care Corp. v. Genesis Furniture Indus., Inc., No. 3:13-CV-00245-SA-SAA, 2015 WL 4477666 (N.D. Miss. July 22, 2015), a suit filed by a provider of medical services, the court initially remanded the claim to Defendant to make a benefit determination. On remand, Defendant admitted that Plaintiff is entitled to $15,000 under the terms of the Plan. With respect to Plaintiff’s motion for prejudgment interest, the court explained that courts consulting Mississippi law have held a prejudgment rate of 8% compounding annually to be appropriate in ERISA cases. As Plaintiff lost the use of funds that Defendant now acknowledges have been due under the terms of the plan for over four years, the court found an award of prejudgment interest at the rate of 8%, compounding annually, to be appropriate.

Retaliation Claims

In Seal v. Maverick Claims, LLC, No. CIV.A. 14-245, 2015 WL 4509629 (E.D. La. July 24, 2015), in Defendants’ motion for summary judgment, they argued that Plaintiff’s wrongful termination claim was preempted under ERISA. In his response, Plaintiff contended that the claim is not preempted because ERISA prohibits discharge of an employee in retaliation for exercising his rights under the statute. In their reply, Defendants averred that any 29 U.S.C. § 1140 claim fails because (1) it is untimely, (2) Plaintiff was terminated for being ineffective in his position, not in retaliation for exercising his rights under the plan, and (3) the manager who terminated Plaintiff did not know of Plaintiff’s requests for documents when he decided to terminate Plaintiff; therefore, Plaintiff cannot show discriminatory intent. The court agreed with Defendants and found that Louisiana’s one-year prescriptive period for wrongful termination is applicable to this claim and it is untimely. The court rejected Plaintiff’s argument that Defendants’ statute of limitations defense has been waived under the Federal Rules of Civil Procedure due to the fact that Defendants failed to raise it as an affirmative defense in their Answer.

Statutory Damages & Notice Violations

In Seal v. Maverick Claims, LLC, No. CIV.A. 14-245, 2015 WL 4509629 (E.D. La. July 24, 2015), the court rejected Defendant’s argument that document penalties pursuant to § 1132(c) should only be assessed from the date Plaintiff became eligible to enroll in Defendant’s 401(k) Plan to the date of Plaintiff’s termination. The court explained that there was no case law to support a finding that the penalty ceases to accrue upon termination. The administrator failed to produce plan documents to Plaintiff on four occasions and did not produce them when the request was made by Plaintiff’s attorney. The court found that there was no justifiable reason for the repeated lack of response, and based on these facts, penalties are appropriate here. The court was not convinced that Plaintiff’s claim is mooted by Defendants’ offer of judgment in the amount of $15,620. Nevertheless, the court did not find that summary judgment is appropriate on the matter of penalties due to the fact that the record does not clearly establish the appropriate date on which Defendants produced the required materials.

Subrogation/Reimbursement Claims

In Pactiv Corp. v. Sanchez, No. 13-CV-8182, 2015 WL 4508667 (N.D. Ill. July 23, 2015), Pactiv’s Health and Welfare Benefit Plan excludes coverage for medical care where benefits are available under Workers’ Compensation laws and obligates Defendant to refund the Plan the amounts that it paid where another party is responsible for medical expenses. Defendant did not dispute Pactiv’s interpretation of the Plan, rather, he argued that waiver, issue preclusion, and claim preclusion bar the claim. The court found that Pactiv seeks equitable relief available under ERISA § 502(a)(3). In requesting a set-off, Pactiv also is seeking reimbursement from a particular fund-the State Court Judgment that has been entered against it. The court rejected Defendant’s argument that Pactiv waived its right to set-off or to reimbursement by failing to assert a Section 8(j) credit in the Workers’ Compensation proceeding. With respect to issue preclusion, the court found that the issue litigated in state court is distinct from the central liability question here, which is whether Defendant must reimburse Pactiv for benefit payments under the terms of the Plan. With respect to claim preclusion, the court found that Plaintiff could not have asserted its ERISA rights under the Plan in the Workers’ Compensation proceeding as federal courts have exclusive jurisdiction over § 502(a)(3) claims. The court declined to offset Plaintiff’s relief against any attorneys’ fees or costs Defendant incurred.


In Schuett v. FedEx Corporation Retirement Appeals Comm., No. 15-CV-0189-PJH, 2015 WL 4484153 (N.D. Cal. July 22, 2015), where Plaintiff filed a lawsuit for a claim for benefits and for breach of fiduciary duty related to a denial of spousal death benefits for her same-sex spouse, Defendants filed a motion pursuant to 28 U.S.C. § 1404(a) to transfer the action to the Western District of Tennessee for convenience of the parties and witnesses. Plaintiff resides in the Northern District of California. Defendant FedEx is headquartered in Memphis, Tennessee and is the named Plan Administrator for the defendant benefit plan. FedEx delegated the plan administration to the FedEx Retirement Service Center in Deerfield, Illinois, and the appeals package was assembled by Aon Claims Management in Lincolnshire, Illinois. Defendant RAC is an internal committee consisting of FedEx employees who work in Memphis and the relevant committee members reside in Tennessee or Northern Mississippi. The records pertaining to Plaintiff’s claim for benefits are maintained in Illinois, with copies in Memphis, Tennessee. Judge Phyllis Hamilton denied Defendants’ motion, finding that: (1) Plaintiff’s choice of forum weighs strongly against transfer, especially where Plaintiff has chosen to file suit in her home forum and has significant ties to this forum; (2) with regard to the convenience of parties and witnesses, Defendants did not show that it will be more inconvenient for any of their witnesses to travel to California than it would be for Plaintiff and her witness to travel to Tennessee; (3) with regard to ease of access to evidence, defendants did not identify any other relevant documents apart from those that would be part of the administrative record; (4) with regard to the familiarity of each forum with the applicable law, this factor does not favor either side because all federal courts have equal familiarity with the governing law; (5) with regard to the local interest in the controversy, Plaintiff is a long-time resident of this judicial district, was married here to the Plan participant, and California has an interest in ensuring that its citizens receive any benefits to which they are entitled; and (6) with regard to the relative congestion and time to trial in each forum, there is not a strong disparity between the two jurisdictions (383 cases per judge in N.D. Cal. and 326 per judge in W.D. Tenn).

Withdrawal Liability & Unpaid Benefit Contributions

In Demopoulos v. Anchor Tank Lines, LLC, No. 14 CIV. 7107 LGS, 2015 WL 4529315 (S.D.N.Y. July 27, 2015), the latest in what is now an eight-year saga of lawsuits, the court dismissed Plaintiff’s complaint seeking damages from Defendants Anchor Tank Lines LLC, Tank Acquisition Company LLC, Leonard Baldari, Robert Baldari and Michael David Hiller in connection with payments that were required but not made to International Brotherhood of Teamsters Local 553’s benefit funds.

In Trustees of the Local 7 Tile Indus. Welfare Fund v. Titan Interiors, LLC, No. 12-CV-135 JG SMG, 2015 WL 4509061 (E.D.N.Y. July 24, 2015), the court granted the Trustees summary judgment in the amount of $258,871.58, consisting of a principal deficiency of $67,304.36, interest of $91,828.61, liquidated damages of $91,828.61, and audit costs of $7,910, plus additional interest and attorney’s fees and costs.

In Mason Tenders Dist. Council of Greater New York v. Fortune Interiors Dismantling Corp., No. 12 CIV. 4253 PAC, 2015 WL 4503630 (S.D.N.Y. July 23, 2015), Plaintiffs moved for summary judgment on the grounds that Silver and Fortune are either alter egos or single employers as a matter of law, and accordingly Silver is liable for Fortune’s debt. Defendants opposed and cross-moved for summary judgment that Silver is not liable for Fortune’s delinquent payments. The court found that genuine issues of material fact remain, and it cannot be said as a matter of law that any differences between the companies are mere technical changes made to avoid Fortune’s contractual and statutory obligations to the Plaintiffs.

In Trustees of New York City Dist. Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, & Apprenticeship, Journeyman Retraining, Educ. & Indus. Fund v. Jalt Concrete Corp., No. 15-CV-3812 PKC, 2015 WL 4503531 (S.D.N.Y. July 23, 2015), the court granted the petition to confirm the Arbitration Award, awarding the Funds $457,460.80 in unpaid contributions, $86,270.93 in interest on unpaid contributions, $91,492.16 in liquidated damages, $2,364.40 to the petitioners’ Promotional Fund, $400 in court costs, $1,500 in attorneys’ fees, $500 in arbitrator fees, and interest in the amount of 5.25% per annum on the total sum of the Award, accruing from the date of the Award. The court also awarded the Funds $3,067.50 in attorneys’ fees and costs.

In Trustees of New York City Dist. Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, Apprenticeship, Journeyman Retraining, Educ. & Indus. Fund, Charity Fund v. Dedicated Indus. LLC, No. 14-CV-7610 RA, 2015 WL 4503695 (S.D.N.Y. July 23, 2015), the court granted the petition to confirm the arbitral Award and directed the Clerk of Court to enter judgment in favor of Petitioners and against Respondent in the amount of $66,893.61, plus interest at the rate of 5.25% from June 17, 2014, through the date of judgment, together with attorney’s fees and costs in the amount of $656.98.

In Burns v. Romero Gen. Constr., No. 13-CV-05647-JSC, 2015 WL 4498197 (N.D. Cal. July 23, 2015), after Defendants failure to make payments as set forth in the Stipulation for Entry of Judgment and upon Plaintiff’s motion, the court entered judgment in Plaintiffs’ favor and against Defendants in the total amount of $101,888.15, allocated as follows: (1) $49,289.48 in unpaid principal installment payments and interest; (2) $45,121.26 in liquidated damages; (3) $24.00 in interest and $1,752.52 on the late-paid April 2015 contribution to the Trust Funds; and (4) $5,701.70 in post-settlement attorneys’ fees and costs.

In Wisconsin Elec. Employees Health & Welfare Plan v. KMS Elec., LLC, No. 14-CV-521, 2015 WL 4487072 (E.D. Wis. July 23, 2015), the Funds filed a motion for summary judgment on its claim that Defendant failed to make contributions to employee retirement accounts. Grandow, in his capacity as “owner” of KMS signed the Letter of Assent. The court denied the motion, finding that the Funds did not show that Grandow had actual or apparent authority to act on behalf of KMS to consent to the CBA when he signed the Letter of Assent or that KMS’s conduct establishes its acceptance of the CBA.

In Iron Workers St. Louis Dist. Council Annuity Trust v. Innovative Concrete, LLC, No. 4:14CV02066 AGF, 2015 WL 4506623 (E.D. Mo. July 23, 2015), the court granted default judgment to Plaintiff for $2,331.19 in contributions for the period of June 1, 2014, through December 31, 2014, $233.12 in liquidated damages, and $206.42 in interest. The court also awarded attorneys’ fees of $2,000.00, court costs of $466.57, and accounting costs of $610.00.

* 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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