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ERISA Watch – May 8, 2014

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


On May 5, 2014, the U.S. Supreme Court announced that it will take up the issue of retiree health benefits, when it granted review of a 6th Circuit Court of Appeal decision upholding a permanent injunction reinstating certain M&G Polymers USA retirees in the company’s health plan (M&G Polymers USA, LLC v. Tackett, U.S., No. 13-1010, cert. granted 5/5/14 ). The 6th Circuit found that certain retirees’ benefits had vested under the terms of the plan and that certain side agreements did not apply to the plant that employed the plaintiff retirees. The Supreme Court limited its review to M&G Polymers’ first question presented: whether courts construing collective bargaining agreements in Labor Management Relations Act (“LMRA”) cases should presume that silence concerning the duration of retiree health benefits means that the parties intended for those benefits to vest for life. The Supreme Court declined review of the second question presented: whether different rules of construction should apply when determining whether health benefits have vested in pure ERISA-governed plans, as opposed to collectively bargained plans.

10thCircuit Affirms LTD Benefit Denial.

In Rall v. Aetna Life Ins. Co., No. 13-1213, 2014 WL 1778146 (10th Cir. May 6, 2014), the 10th Circuit found that Aetna did not abuse its discretion in denying Rall’s LTD benefits because there was substantial evidence supporting non-disability. The 10th Circuit rejected Rall’s argument that Aetna’s disregard of its previous finding of disability and the opinion of a reviewing doctor it hired in the past should increase the weight afforded to the conflict of interest factor. The 10th Circuit also found that it was reasonable for Aetna to rely on the opinion of a doctor who only conducted a paper review of Rall’s claim.

Same-Sex Spousal Benefits. In Roe v. Empire Blue Cross Blue Shield, 12-CV-04788 NSR, 2014 WL 1760343 (S.D.N.Y. May 1, 2014), the Court dismissed a class-action ERISA Section 510 claim brought against Blue Cross for excluding benefits to a same-sex spouse. Section 502(a)(3) of ERISA allows a plan participant “to enjoin any act or practice which violates any provision of this subchapter” or “to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter[.]” 29 U.S.C. § 1332(a)(3). Section 510 states, in relevant part,

It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan … or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan ….

29 U.S.C. § 1140. The Court reasoned that Section 510 has consistently been excluded from application to allegedly discriminatory plan terms, especially by courts in the 2ndCircuit. The “discrimination” proscribed by that section was not intended to conflict with the strong policy under ERISA that has long been held to allow plans to provide benefits under terms as it sees fit. Relying on Inter-Modal Rail Emps. Ass’n v. Atchison, Topeka and Santa Fe. Ry. Co., 520 U.S. 510, 515 (1997), the Court noted that an employer enjoys the flexibility to amend or eliminate its welfare plan, and may, for example, choose not to provide benefits to spouses at all. As such, the Court determined that Jane Roe suffered no adverse employment action in this case as she remains employed by St. Joseph’s.

Conflict-of-Interest Discovery. Although the 4th Circuit has yet to weigh in on discovery following the U.S. Supreme Court’s decision in Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S.Ct. 2343 (2008), a district court in Bruce v. Hartford, 1:14CV18 JCC/TRJ, 2014 WL 1744827 (E.D. Va. May 1, 2014) held that discovery was permissible. The district court refused to follow a pre-Glenn case disallowing conflict-of-interest discovery of third party vendors. The Court rejected the argument that the discovery judge did not scrutinize the record to find that conflict was an issue in this case and rejected the argument that the ultimate disposition of the case (whether it is remanded back to Hartford) disposes of the need for discovery.

Statutory Damages. In Spiewacki v. Ford Motor Co.-UAW Ret. Bd. of Admin., 1:13-CV-01972, 2014 WL 1761955 (N.D. Ohio May 1, 2014), the district court declined to award the plan participant statutory damages under 29 U.S.C. § 1132(c)(1) of $100 per day due to the Board’s failure to provide his file and the plan documents within thirty days. Section 1132(c)(1) provides that: Any administrator … who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the control of the administrator) by mailing the material requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court’s discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper. The court reasoned that when deciding whether a penalty is appropriate, courts often look for evidence of bad faith or resulting prejudice, and in this case the administrator did not act in bad faith, and the plaintiff was not prejudiced by the delay because he had ample time to review the documents before filing the lawsuit. The plaintiff requested the documents on December 21, 2012 and they were mailed out in full on February 12, 2013. The court found that the administrator did not “fail or refuse” to furnish the requested material. Additionally, the court noted that the plaintiff mailed the request during the holiday season.

* 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 attorney 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 Parkway, 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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