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ERISA Watch – November 6, 2014

Your reliable source for summaries of recent ERISA decisions

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

Fifth Circuit

Claims for Benefits Dismissed Where Administrator Followed Plan’s Express Terms and Claim for Breach of Fiduciary Duty Dismissed Where Plaintiff Had an Adequate Remedy under § 502(a)(1)(B)

In Hollingshead v. Aetna Health Inc., No. 14-20158, __Fed.Appx.___, 2014 WL 5560255 (5th Cir. Nov. 4, 2014), in a per curiam decision, the 5th Circuit Court of Appeals affirmed the district court’s dismissal of Plaintiff’s ERISA claims in matter where the Plaintiff brought a putative class action against Aetna Health Inc. (“Aetna”) alleging that Aetna violated ERISA by immediately denying medical claims pending receipt of no-fault insurance information. The plan under which benefits were denied contains a provision outlining the effect of No-Fault Auto Insurance vis-à-vis coverage under the Plan. First-party auto insurance coverage is considered primary and the Plan coordinates the benefits payable under the Plan with the first-party benefits that automobile insurance pays or would pay without regard to fault for the same covered expenses. The Plan also contains a provision that requires a claimant to furnish all information that may be required by the claims administrator or else the claim will be delayed or denied. When the plaintiff’s son was seriously injured in an automobile accident and hospitalized, the plaintiff submitted numerous medical claims for this treatment to Aetna and Aetna requested information from the plaintiff about the applicability of any no-fault insurance coverage. Aetna pended processing of the claims until it received this information. Rather than provide Aetna with any of the requested information about the applicability or not of no-fault insurance coverage, the plaintiff filed the instant putative class action lawsuit leveraging two ERISA claims against Aetna. First, he asserted claims under ERISA § 502(a)(1)(B) to “recover all unpaid, properly submitted medical expenses incurred under the clear terms of the plan or policy, and all statutory, equitable, or remedial relief as deemed appropriate.” Second, he brought a claim under ERISA § 502(a)(3) for equitable relief for breach of fiduciary duty. The district court dismissed these claims, finding that the breach of fiduciary duty claim could not be maintained given that the plaintiff had an adequate mechanism for redress of denied benefits under § 502(a)(1)(B). With respect to the § 502(a)(1)(B) for Aetna’s purportedly immediate “denial” of medical claims pending receipt of no-fault insurance information, the district court concluded that the plaintiff failed to state a claim under § 502(a)(1)(B) given that Aetna acted in accordance with the express terms of the Plan. Based on the “COB” provisions, Aetna acted in accordance with the terms of the Plan by requesting the PIP-coverage information before adjudicating the plaintiff’s claims. On de novo review, the court found no error in the district court’s dismissal of the plaintiff’s ERISA claims. The court explained that its decision in Tolson v. Avondale Indus. Inc., 141 F.3d 604 (5th Cir.1998) is fatal to the plaintiff’s claim because the fact that the plaintiff cannot prevail on his claim under § 502(a)(1) does not make his alternative claim under § 502(a)(3) viable. Lastly, the court perceived no error in the district court’s denial of the plaintiff’s motion for leave to file a second amended complaint.

Ninth Circuit

Healthcare Provider Has Article III Standing as Assignee of Plan Beneficiaries to Bring Claims for Payment of Benefits but not Claims for Breach of Fiduciary Duty and Non-Profit Association Lacked Associational Standing to Bring Suit against the Claims Administrator. Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc., No. 12-17604, __F.3d___, 2014 WL 5651325 (9th Cir. Nov. 5, 2014). In this putative class action against the nation’s largest health insurer, a physical therapy clinic, the Arizona Chiropractic Society (“ACS”), two individual patients sued United Health alleging systematic violations of ERISA and improper denial of benefits for physical therapy services. The United States District Court for the District of Arizona had agreed with the plaintiffs that United flagrantly and systematically violated ERISA and the requirements of the ERISA claims regulation, but nonetheless dismissed the entire lawsuit based on various technicalities, including article III standing, contractual limitations periods, and claimed failures to exhaust administrative appeals.

The Ninth Circuit agreed with the District Court that ACS lacked associational standing to prosecute its members’ claims because too much individualized member participation would be required. The Ninth Circuit also agreed that ERISA’s three-year statute of limitations had run as to the fiduciary breach claims of one of the individual patients.

However, the Ninth Circuit reversed the District Court and ruled for the Plaintiffs on most of the other issues raised on appeal, remanding the case for further proceedings. In particular, the Ninth Circuit held as follows:

  • Health providers with valid assignments of benefits have standing under Article III of the U.S. Constitution to prosecute claims for benefits under ERISA whether or not they have billed their patients for any balance owing on their accounts;
  • There is no requirement of administrative exhaustion as to claims for breach of fiduciary duty;
  • Contractual limitations periods that are not properly placed and disclosed in a plan’s Summary Plan Description (“SPD”) are unenforceable (noting that plan participants should not be required to read the entire SPD in order to determine the time limits for filing suit);
  • Its prior decision in Cyr v. Reliance Standard Life Ins. Co., 642 F.3d 1202 (9th Cir. 2011) (en banc) – a case involving the same plaintiffs’ attorneys – allows suits for benefits to be directed at claims administrators and de facto administrators and fiduciaries;
  • An administrator’s substantial compliance with the requirements of the Claims Regulation is not sufficient to avoid deemed exhaustion. Rather, anything beyond de minimis violations of the claims procedures yields deemed exhaustion and the participant can sue without further pursuing administrative remedies or appeals.

*Summary contributed by the Plaintiffs’ attorney in this case, Joseph Creitz of Creitz & Serebin LLP.

Breach of Fiduciary Duty Claims Against ESOP Fiduciaries Survive Rule 12(b)(6) Motion to Dismiss. In Harris v. Amgen, Inc., 10-56014, _F.3d__, 2014 WL 5471651 (9th Cir. Oct. 30, 2014), the 9th Circuit Court of Appeals reconsidered its decision to reverse and remand the district court’s dismissal of plaintiffs’ claims alleging that Amgen, Inc. and subsidiary Amgen Manufacturing, Limited (“AML”) breached their fiduciary duties under ERISA, in light of the Supreme Court’s holding in Fifth Third Bancorp v. Dudenhoeffer, 134 S.Ct. 2459 (2014) (holding in part that there is no presumption of prudence for ESOP fiduciaries beyond the statutory exemption from the otherwise applicable duty to diversify). Plaintiffs participated in two ESOPs that provided participants with several investment options, including the Amgen Common Stock Fund, which exclusively holds Amgen stock. Amgen’s stock price dropped thirty-three percent during the class period based on safety concerns associated with Amgen’s largest revenue generating drug. On reconsideration, the court held that the plaintiffs’ complaint contained a sufficient degree of plausibility to survive a Rule 12(b)(6) motion to dismiss and again reversed and remanded the district court’s dismissal of the case.

Duty of Care

Plaintiffs allege that defendants acted imprudently and thus violated their duty of care under 29 U.S.C. § 1104(a)(1)(B), by continuing to provide Amgen common stock as an investment option when they knew or should have known that the stock price was artificially inflated by the material misrepresentations, omissions, and illegal sales of the drug in question. Although Amgen was not experiencing severe financial difficulties during the class period and the company remains viable and profitable today, the court found that a company’s profitability and viability does not preclude a finding that the stock was artificially inflated; conversely, Amgen’s profits were based in large part on improper sales, the very reason that the stock was artificially inflated. The court also rejected the argument that the modest decline in stock price was insufficient to show an imprudent investment by the fiduciaries since the proper question is whether the fiduciary engaged in an appropriate process to investigate the merits of the transaction, not the actual results of the investment. Defendants argued that courts must consider the long-term horizon of retirement investing and that holding fiduciaries liable for continuing to offer the option to invest in declining stock would place them in an untenable position of having to predict the future of the company stock’s performance. The court rejected this argument because the fiduciaries continued to allow plan participants to invest in the fund even though they knew or should have known that Amgen stock was artificially inflated. Relatedly, defendants argued that removing the Amgen fund as an investment option based on nonpublic information about the company may have resulted in a drop in the stock price. The court found that defendants could have removed the Amgen Stock Fund from the investment options without causing undue harm to the plan participants, reasoning that only a minimal impact would have resulted based on the small number of shares that would not be purchased by plan participants as compared to the large number of actively traded shares. Further, while removing the Amgen Common Stock Fund as an investment option could have sent negative signals to investors if made public, several factors mitigated this outcome: (1) based on the efficient market hypothesis, the ultimate decline in price would not have been greater than the amount by which the price was artificially inflated; (2) plan participants would have been protected from making additional investments while the stock was artificially inflated; and (3) defendants’ were obligated to remove the fund as an investment option when they knew or should have known that the stock price was artificially inflated. Lastly, defendants argued that removing the Amgen Stock Fund based on undisclosed information was potentially illegal, but the court explained that disclosing material information, rather than making misrepresentations and omissions, would have allowed plan participants to make informed decisions about investing in the Amgen Common Stock Fund, satisfying both ERISA and federal securities laws. The court found that Fifth Third does not require a heightened pleading standard of particularity or plausibility and that the plaintiffs sufficiently alleged that defendants violated their duty of care under ERISA.

Duty of Loyalty and Care

Plaintiffs allege that defendants violated their duty of loyalty and care under 29 U.S.C. §§ 1104(a)(1)(A) and (B) by failing to provide material information to plan participants about investment in the Amgen Common Stock Fund. Defendants argued that: (1) they have limited obligations under ERISA to disclose information to plan participants; (2) disclosure obligations under ERISA do not extend to information that is material under federal securities laws; (3) plaintiffs did not properly allege detrimental reliance by plan participants on the omissions or misrepresentations; and (4) any omissions or misrepresentations made to the SEC as required by federal securities laws were not made in a fiduciary capacity and cannot be considered in an ERISA fiduciary duty suit. First, the court made clear that there is no contradiction between defendants’ duty under the federal securities laws and ERISA. Second, the court reiterated their holding in Quan that “a fiduciary has an obligation to convey complete and accurate information material to the beneficiary’s circumstance, even when a beneficiary has not specifically asked for the information.” Third, the court held that ERISA plan participants may rely on the same “fraud-on-the-market” theory that a defrauded investor may rely on under Section 10(b) and need not show actual reliance on the omissions or misrepresentations of the defendant. Fourth, the court noted that defendants incorporated by reference Amgen’s SEC filings into the summary plan descriptions (“SPDs”) distributed to Plan participants as required under ERISA. The court held that the statements made in SEC filings and incorporated in the SPDs may be used under ERISA to show that the defendants knew or should have known that Amgen stock was artificially inflated and to show that plaintiffs detrimentally relied on the misrepresentations, reasoning that the SPDs are fiduciary communications to plan participants and that the incorporation by reference was done in a fiduciary capacity.

Properly Named Fiduciary

Amgen argued that it delegated its discretionary authority and thus is not a fiduciary under the Plan. However, the court noted that Amgen is the named fiduciary, administrator, and plan sponsor in the Amgen Plan, and that a named fiduciary has broad authority to “control and manage the operation and administration of the plan” under ERISA. 29 U.S.C. §1102(a)(1). While Amgen appointed a trustee, the Plan clearly indicated that the trustee did not have complete control over investment decisions. Thus, the court held that Amgen was in fact a fiduciary and that the Plan’s authorization of a Fiduciary Committee to take action on behalf of Amgen did not preclude fiduciary status for Amgen, reasoning that the Plan neither provides exclusive authority to the Committee, nor precludes Amgen from acting on its own behalf. The court further noted that a successful delegation of authority exists where the plan administrator is granted sole and absolute discretion to carry out various Plan duties. Thus, because the Amgen Plan did not contain a clear delegation of exclusive authority, the court reversed the district court’s dismissal of Amgen from the case as a non-fiduciary.

Eleventh Circuit

Strict Compliance with Formalities Not Required to Effectuate Employee Stock Bonus Plan Participant’s Exercise of “Put” Right to Sell Stock to Company. In Bacon v. Stiefel Labs., Inc., No. 13-13875, __Fed.Appx.___, 2014 WL 5487996 (11th Cir. Oct. 31, 2014), the 11th Circuit Court of Appeals reversed the judgment of the district court and sustained the decision of the Plan Administrator-that plaintiff did exercise his “put” right and did sell his shares of the Company stock. The Plan Administrator considered the single issue of whether the plaintiff exercised his right to put his 25.386449 shares of SLI common stock that he received as a distribution from the Employee Stock Bonus Plan (“ESBP”) to SLI. Plaintiff was a participant in the ESBP, was eligible to receive a distribution of the Company’s stock in his Plan account, and was eligible to exercise his “put” right to sell that stock to the Company. Plaintiff submitted the old distribution election form electing to have a distribution of his shares sent to his retirement account at Fidelity Investments. Plaintiff included with the form a handwritten note indicating that he wanted to exercise his put right. Plaintiff also sent an email to a Company employee the following day that asked her to confirm receipt of the paperwork he mailed for his “election.” The company subsequently purchased his shares and sent payment to the plaintiff. Prior to the plaintiff’s election, the Plan committee had established a procedure by which Plan participants could exercise their “put” rights. The procedure involved submission of a standardized Distribution Form which requested that the Plan distribute shares to the participant. The participant would then endorse and notarize the stock certificates, or otherwise indicate by an accompanying writing his intention to “put” the shares, and send them back to the Company. As of January 1, 2009, however, the committee rolled out a new procedure, using an Auto-Put Form that eliminated the need for mailing back and forth the stock certificates. The single form allowed a participant to simultaneously request both a distribution and a “put” or sale of his shares. Because the events relevant in this case occurred in January and February 2009, the Auto-Put procedures were applicable. The court found that although the plaintiff did not execute the Auto-Put Form which was being used at the time to accomplish a simultaneous distribution of Company stock to a participant and an exercise by the participant of his “put” right to sell the stock to the Company, the overwhelming evidence in the administrative record reflects that the substance of the actions contemplated by the Auto-Put Form did occur in this case. By executing and submitting the Distribution Form, plaintiff requested a distribution of the Company’s stock in his account. By submitting simultaneously his handwritten letter requesting that his stock be “put” for sale to the Company, plaintiff was in substance exercising his “put” right to sell the stock to the Company and authorizing the Plan Administrator to take the steps necessary to accomplish same. Following those instructions from the plaintiff, the Company implemented the sale of stock and made payment to him, which he accepted. The court rejected the plaintiff’s argument on appeal that the only way the “put” right could be exercised is by signing the Auto-Put Form since no provision of the Plan itself or of any authorized rules with respect to the Plan requires that the exercise of a “put” right be accomplished solely by executing the Auto-Put Form. Nor is there any other evidence in the record indicating that execution of the Auto-Put Form is the only way to exercise the “put” right. The court found that even if there were any ambiguity in that regard, the Plan Administrator had full discretion to interpret the terms and provisions of the Plan, and her decision interpreted the Plan not to require such strict compliance with formalities.

D.C. Circuit

Entry of Default Vacated Where Failure to Answer Was Not Willful, Plaintiffs Would Not be Prejudiced, and Defendant Presented a Meritorious Defense. Serv. Employees Int’l Union Nat’l Industry Pension Fund v. Bristol Manor Healthcare Ctr., Inc., No. CV 12-1904 (RC), __F. Supp. 3d___, 2014 WL 5470471 (D.D.C. Oct. 29, 2014) is a matter where the Fund and its Trustees brought suit under ERISA and the LMRA to collect unpaid contributions, interest, liquidated damages, and audit documents allegedly owed by Defendant, Bristol Manor Healthcare Center, Inc. (“Bristol Manor”), in violation of the applicable collective bargaining and trust agreements. The court denied the Fund’s motion for default judgment and vacated the second entry of default that Plaintiffs filed when Bristol Manor failed to respond to the amended complaint. Under Federal Rule of Civil Procedure 55(c), a district court has discretion to vacate the entry of default only for “good cause,” and courts in this Circuit consider three criteria when determining whether such cause exists: (1) if the default was willful; (2) if setting aside the default would prejudice the plaintiff; and (3) if the defendant has presented a meritorious defense.

Bristol Manor argued that it received no advanced notice that Plaintiffs would seek default judgment, that it responded immediately once it learned of Plaintiffs’ intentions, and that it was reasonable not to file an answer or otherwise respond sooner due to ongoing settlement negotiations between the parties and Plaintiffs’ failure to seek default judgment following the entry of default in the past. In addition, evidence provided by Plaintiffs suggests that they never gave Bristol Manor a deadline on which a response was required or they would move for default judgment. The court found that Plaintiffs’ past lack of diligence in pursuing default judgment while the parties were engaged in negotiations created a reasonable basis for Bristol Manor to wait before filing a response, even though doing so was clearly in violation of the Federal Rules of Civil Procedure. Further, Plaintiffs never provided Bristol Manor with a specific deadline by which it had to respond, and when Plaintiffs eventually did move for default judgment, Bristol Manor promptly took action to protect its rights by retaining local counsel and presenting a defense. As such, the court found no “willfulness” because Bristol Manor acted in “good faith” when it failed to file an answer in reliance on Plaintiffs’ past decision not to seek default judgment, as well as the ongoing settlement negotiations between the parties.

Plaintiffs argued that they will suffer prejudice in the form of being forced to spend more time and money on collecting the contributions and reports from Bristol Manor if default judgment is not entered. But, the court found that Plaintiffs bear responsibility for much of the resources already expended in this case given their failure to seek default judgment after the first entry of default, as well as their failure to move for default judgment in a timely manner following the second entry of default. Further, delay and legal costs are part and parcel of litigation and typically do not constitute prejudice for the purposes of Rule 55(c). Thus, the court found that Plaintiffs have failed to demonstrate that they will suffer any cognizable form of prejudice if the entry of default is set aside.

Lastly, in determining whether a defendant has a meritorious defense, likelihood of success is not the measure. To demonstrate a meritorious defense, Bristol Manor asserted that it has made regular monthly contributions and submitted the appropriate documents such that it does not owe the money and reports that Plaintiffs seek through the amended complaint. If Bristol Manor ultimately can prove that it has paid the missing contributions and supplied all the necessary paperwork, then that would constitute a complete and meritorious defense to Plaintiffs’ claim. Having found that all three criteria for setting aside the default weigh in favor of Bristol Manor, the Court exercised its discretion to vacate the entry of default for “good cause shown.”

Unreported Decisions

Attorneys’ Fees

Gesualdi v. Diversified Carting, Inc., No. CV 10-2561 SIL, 2014 WL 5475357 (E.D.N.Y. Oct. 29, 2014) (in matter where trustees of various employee benefit plans affiliated with the Teamsters Union asserted claims for unpaid contributions against Defendant, who conceded liability, awarding $122,144.81 in total unpaid contributions; $102,888.34 in interest through October 29, 2014, plus daily interest of $60.14 through the date of judgment; $102,888.34 as additional damages; $7,700.00 in audit costs; and $93,069.50 in attorneys’ fees and $2,547.34 in litigation costs).

Fastener Dimensions, Inc. v. Massachusetts Mut. Life Ins. Co., No. 12CV8918 DLC, 2014 WL 5455473 (S.D.N.Y. Oct. 28, 2014) (in fee award petition for 5-year attorney seeking award of $129,080, equal to 368.8 hours of work multiplied by an hourly rate of $350 (or 22% of the $600,000 to be paid to the Plan under the Settlement), awarding only $6,000 (or 1% of the Settlement amount) based on analysis of the six Goldberger factors).

Disability Benefit Claims

Schmitz v. Sun Life Assur. Co. of Canada, No. CIV. 13-622 JRT/FLN, 2014 WL 5511403 (D. Minn. Oct. 31, 2014) (finding that Sun Life’s decision to deny long term disability benefits to Plaintiff alleging disability from multiple sclerosis was not arbitrary or capricious and was based on substantial evidence where the record demonstrates that four reviewing physicians concluded that Plaintiff was not disabled, contemporaneous treating physicians did not describe Plaintiff as disabled, and Plaintiff continued to be employed in a relatively similar position following his termination of employment by the policyholder).

Schowalter v. Prudential Ins. Co. of Am., No. 1:13-CV-249-HJW, 2014 WL 5513710 (S.D. Ohio Oct. 31, 2014) (modifying the R&R and remanding to the Plan administrator for reconsideration (i.e., for expansion of the record and “full and fair review”) in matter involving denial of long term disability benefits where the Magistrate Judge observed that Sara Lee had previously determined that Plaintiff was disabled under the Plan, Plaintiff had presented objective evidence of ongoing heart problems from her treating physicians, that the medical evidence showed that Plaintiff’s condition was “stable” rather than “successfully treated” or “improved,” that Prudential had “cherry-picked” from Dr. Fritzhand’s report, and that Plaintiff was “presumptively” entitled to continuation of LTD benefits, and recommending that Prudential’s decision to terminate plaintiff’s LTD benefits was “arbitrary and capricious” and that a “retroactive award of LTD benefits wrongfully withheld and reinstatement of plaintiff’s LTD benefits is the appropriate remedy; granting Prudential’s objection that the Magistrate Judge: 1) improperly placed the burden on Prudential to show “improvement” in plaintiff’s condition before terminating her benefits; 2) did not adequately consider the two different definitions of disability under the Plan; and 3) should not have immediately awarded benefits instead of a remand to the Plan Administrator for further review and explanation).

Hyatt v. Prudential Ins. Co. of Am., No. 1:14-CV-00035-MR, 2014 WL 5530130 (W.D.N.C. Oct. 31, 2014) (holding that Plaintiff’s long term disability claim is barred by the three-year contractual limitations period and that Plaintiff’s short-term disability claim is barred by the three-year statutory limitations period).

Browdy v. Hartford Life & Acc. Ins. Co., No. CIV.A. 11-818-SDD, 2014 WL 5500392 (M.D. La. Oct. 30, 2014) (granting Hartford’s motion for summary judgment on Plaintiff’s breach of fiduciary duty claim for Hartford’s alleged misrepresentation to Plaintiff that she was ineligible for STD benefits when she was in fact eligible, and Hartford’s failure to timely approve the payment of these benefits, which resulted in Plaintiff’s early withdrawal of her Dow pension benefits, where Plaintiff sought equitable relief in the form of compensatory money damages for losses Plaintiff sustained).

McGhee v. Aetna Life Ins. Co., No. 3:13-CV-00481-MOC, 2014 WL 5475042 (W.D.N.C. Oct. 29, 2014) (finding that Plaintiff did not waive his claim for short-term disability benefits when he executed a General Release & Program Agreement in exchange for a severance package with Bank of America upon leaving the company, which provided that “I understand that for benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) and equity or similar awards granted or assumed by the Company, my eligibility for benefits will be determined in accordance with the terms of the applicable plan or other governing documents. Nothing in this Agreement shall impair, diminish or interfere with any rights, privileges or benefits I have with respect to ERISA plans, equity award agreements or similar governing documents;” but finding that Aetna did not abuse its discretion in denying Plaintiff STD benefits).

Gay v. Nat’l Rural Elec. Coop. Ass’n Grp. Benefits Program, No. 2:14-CV-253, 2014 WL 5475284 (S.D. Ohio Oct. 29, 2014) (denying Defendant’s motion to dismiss or, alternatively, for remand, finding that Defendant’s failure to render a decision on Plaintiff’s long term disability claim within the 90-day deadline was not excused based on a “tolling” of the deadline, rejecting Defendant’s argument that Plaintiff never “responded” to its request for information with accurate information since a claimant “responds” to a plan administrator’s request for information (so as to end the tolling period set forth in § 2560.503-1(i)(4)) at the time he or she actually responds to the request, without regard to whether he or she produces accurate (or any) information at that time).

Oliver v. Aetna Life Ins. Co., No. 4:13-CV-1947-VEH, 2014 WL 5460855 (N.D. Ala. Oct. 27, 2014) (in upholding denial of LTD benefits under self-funded plan, finding: 1) the SPD effectively bestowed Aetna with discretionary authority to decide claims under the plan; 2) the Plan’s decision to deny benefits was de novo correct, where the court found that the plaintiff failed to objectively establish that the vocational ramifications caused by his impairments satisfied the plan’s requirements; 3) because of the significant differences between SSA’s test for disability and the plan’s requirements for disability, the plaintiff’s SSDI award does not demonstrate that Aetna committed de novo error; and 4) Plan was entitled to offset amount of SSDI award which went to pay attorneys’ fees because plaintiff did not counter Defendants’ offset position).

ERISA Preemption

La Ley Recovery Sys.-OB, Inc. v. Blue Cross & Blue Shield of Florida, Inc., No. 14-23522-CIV, 2014 WL 5523506 (S.D. Fla. Oct. 31, 2014) (finding as completely preempted by ERISA an action brought by a collection company against several insurance companies and involving self-funded ERISA plans’ alleged failure to pay for chiropractic and/or other services to patients of a doctor to whom the plan participants assigned rights; staying the case to allow Plaintiff to properly pursue any administrative remedies under ERISA).

Dierker v. ACF Indus., No. A-13-CV-1043-SS, 2014 WL 5461797 (W.D. Tex. Oct. 27, 2014) (in matter involving allegation that Defendant failed to pay monies due to Plaintiffs under a retirement plan, finding that the retirement plan is subject to ERISA and all claims based on Texas common law (breach of contract, breach of implied-in-fact contract, breach of implied covenant of good faith and fair dealing, promissory estoppel, and intentional infliction of emotional distress) are pre-empted by ERISA; granting summary judgment for Defendant).

Life Insurance & AD&D Benefit Claims

Chanthavong v. Union Sec. Ins. Co., No. 3:13CV2666, 2014 WL 5642113 (M.D. Pa. Nov. 4, 2014) (granting summary judgment in favor of Plaintiffs in dispute over the interpretation of a life insurance policy with an accidental death benefit, finding that a policy exclusion – providing that no benefit will be paid when an accidental death is caused, directly or indirectly, by a disease – does not apply where the decedent accidentally drowned in his bathtub, where the Defendant maintained that the death was caused in part, indirectly or directly, by a seizure disorder).

Young v. UnitedHealth Grp. Life Ins. Plan, No. 2:13-CV-1738-VEH, 2014 WL 5519974 (N.D. Ala. Oct. 31, 2014) (where AD&D policy provides benefits for the death of an insured who sustained a bodily injury resulting directly from an accident and independently of all other causes, finding that the plaintiff provided no evidence that her husband’s death was due to an accident that was independent of all other causes, including alcohol, and that she produced no evidence to counter all of the evidence which established that alcohol was a contributing cause).

Armstrong v. Hartford Life & Accident Ins. Co., No. 2:12-CV-02227-MCE, 2014 WL 5514183 (E.D. Cal. Oct. 30, 2014) (finding that Hartford met its burden of demonstrating that Plaintiff’s lawsuit seeking payment of $250,000 in benefits under an ERISA-governed accidental death and dismemberment policy was time-barred under the Plan’s enforceable three-year contractual statute of limitations, rejecting Plaintiff’s arguments that the three-year limitations period runs from the final claim denial and that Hartford waived its right to enforce the contractual limitations).

Medical Benefit Claims

Gillette v. Wilson Sonsini Grp. Welfare Ben. Plan, No. 3:14-CV-00222-BR, 2014 WL 5511337 (D. Or. Oct. 31, 2014) (granting Defendants’ Motion to Dismiss Plaintiff’s claims for breach of fiduciary duty for charging Plaintiff’s son excessive COBRA premiums because of untimeliness and denying pro see Plaintiff leave to file an amended complaint).

Pension Benefit Claims

Harrison v. Bert Bell/Pete Rozelle NFL Ret. Plan, No. 14-40366, 2014 WL 5510992 (5th Cir. Nov. 3, 2014) (affirming district court’s grant of summary judgment in favor of the plan administrator and holding that denial of certain retirement benefits was barred by collateral estoppel and that, in the alternative, the administrator did not abuse its discretion in denying benefits; denying a request to grant relief under Federal Rule of Civil Procedure 60(b) regarding a previous suit by Plaintiff).

Koerner v. Copenhaver, No. 12-1091, 2014 WL 5544051 (C.D. Ill. Nov. 3, 2014) (in action alleging that the six individual Defendants breached fiduciary duties to the W.M. Putnam Company’s ESOP by engaging in or approving a prohibited transaction, granting Plaintiffs’ Unopposed Motion for Preliminary Approval of Settlement where the Settlement Agreement provides for a payment of $650,000, inclusive of attorneys’ fees for Plaintiff’s Counsel, on the condition that $650,000 is available within the $1.0 million coverage limits under the relevant insurance policy, but if less than $650,000 is available within the coverage limit, the settlement consideration is to be the larger of $640,000 or the funds remaining within Defendants’ insurance policy; Plaintiffs’ counsel may apply for an award of attorneys’ fees and costs from the Settlement Fund, with fees not to exceed $197,994, costs not to exceed $55,422, and an incentive award for Plaintiffs not to exceed $7,500 in the aggregate).

Cranston v. PJM Interconnection LLC, No. CIV.A. 13-04916, 2014 WL 5503151 (E.D. Pa. Oct. 31, 2014) (denying summary judgment to Plaintiff seeking additional payment of benefits at retirement; applying Amara and determining that even if a “FAQ document” was an SPD, it would have no bearing on Plaintiff’s ability to recover the unpaid benefits he seeks pursuant to § 502(a)(1)(B) because it is the terms of the Plan document that control and nowhere in the terms of the Plan that was in effect at the time Plaintiff elected Phased-In Retirement does the calculation method contemplated in the FAQ exist).

Keiser v. Conagra Foods, Inc., No. 4:13-CV-00159, 2014 WL 5463868 (M.D. Pa. Oct. 27, 2014) (granting Defendant’s Motion for Summary Judgment in claim for retirement benefits under ERISA § 502(a)(1)(B) where Plaintiff argued for benefits based on language in the SPD that are not explicitly granted by the plan, finding that the Plan language controls and conflicting, contradictory, or misleading terms in an SPD (or other summary document) cannot be incorporated into the terms of the Plan itself).

Smith v. Conagra Foods, Inc., No. 4:13-CV-00165, 2014 WL 5463872 (M.D. Pa. Oct. 27, 2014) (same as Keiser above).

Pleading Issues & Procedure

Shields v. JPMorgan Chase Bank, NA, No. 14-2060-JAR, 2014 WL 5488440 (D. Kan. Oct. 29, 2014) (granting Prudential’s motion to amend its answer to assert a counterclaim for an overpayment of benefits based on plaintiff’s and his minor children’s receipt of Social Security benefits, finding that Prudential’s amendment is not the result of undue delay, bad faith, or dilatory tactics because it discovered the overpayment of benefits well after it filed its answer to plaintiff’s amended complaint and brought it to the court’s attention at the August 28, 2014 scheduling conference, nor will the amendment result in prejudice because discovery has not closed and discovery is not needed to determine whether plaintiff has been overpaid).

Gay v. Nat’l Rural Elec. Coop. Ass’n Grp. Benefits Program, No. 2:14-CV-253, 2014 WL 5475284 (S.D. Ohio Oct. 29, 2014) (finding that exhaustion is an affirmative defense, Plaintiff is not required to plead facts negating an affirmative defense, and a court may grant a Rule 12(b)(6) motion on the basis of an affirmative defense only if the defense appears on the face of the pleadings, which the court did not find in this case).

Griffith v. MetLife Grp., Inc., No. CA 3:14-2088-MBS, 2014 WL 5488421 (D.S.C. Oct. 29, 2014) (where ERISA-governed dental policy at issue advises the participants that claims for benefits may be brought in state court, finding that neither the policy language nor ERISA deprives MetLife of its right to remove the action to federal court).

Bauer v. S. Cmty. Fin. Corp., No. 1:13CV345, 2014 WL 5465334 (M.D.N.C. Oct. 28, 2014) (denying Defendants’ Motion to Dismiss as moot and finding that the court lacks subject matter jurisdiction because the Change in Control benefits and Termination Without Cause benefits of the Employment Agreements and Salary Continuation Agreements do not require an ongoing administrative scheme for their execution, and, thus, do not constitute employee welfare benefit plans under ERISA).

Farm Bureau Gen. Ins. Co. v. Melton, No. 1:14-CV-997, 2014 WL 5460725 (W.D. Mich. Oct. 27, 2014) (in action brought by no-fault auto insurer against insured seeking a declaration that the insurer is not responsible for indemnifying insured for any lien that may be asserted by insured’s primary ERISA-governed health plan, granting insurer’s motion to remand to state court and finding that although the insurer’s obligations under its policy are contingent on the validity of the health plan’s lien, the insurer’s obligations do not present a question of federal law).

Subrogation/Reimbursement Claims

Daily v. Hewlett Packard Co., No. 13-CV-02502-CMA-CBS, 2014 WL 5489085 (D. Colo. Oct. 29, 2014) (where Plaintiff suffered disabling injuries in a car accident, received short- and long term disability benefits from her employee benefit plan, and subsequently received disability benefits from the Social Security Administration, as well as a $750,000 settlement from the third-party tortfeasor for these same injuries, granting Defendants’ Motion for Summary Judgment on its reimbursement claim because the employee benefits plan provides that employees cannot “double recover” and Plaintiff signed a “Right of Reimbursement” form, which provided that: “… In return for payment of these benefits, if the payments for the same illness or injury are received, I acknowledge I am obligated to reimburse the plan… The requirement to reimburse the plan applies no matter how the recovery is characterized…. I understand that my employer or the plan’s Claims Processor has the right to collect overpayment as specified in the plan, including but not limited to, the right to reduce future benefit payments.”).

Withdrawal Liability

Laborers’ Pension Fund v. W.R. Weis Co., Inc., No. 13 C 6698, 2014 WL 5488387 (N.D. Ill. Oct. 30, 2014) (granting summary judgment to the Fund, holding that a prospective increase in the amount of installment payments is within the ambit of the “pay now, dispute later” rule, which makes clear that payment must begin immediately and is not suspended during a challenge to the payments via arbitration).

Bd. of Trustees of the Auto. Mechanics’ Local No. 701 Union & Industry Welfare Fund v. Beland & Wiegers Enterprises, Inc., No. 13 CV 1611, 2014 WL 5475291 (N.D. Ill. Oct. 29, 2014) (noting Seventh Circuit rule that where an individual (1) owns the property on which a withdrawing employer conducts its operations, (2) leases the property to the withdrawing employer, and (3) owns the withdrawing employer, then that individual is personally liable for the payment of withdrawal liability incurred by the withdrawing employer; granting Plaintiff’s Motion for Reconsideration denying summary judgment against one individual defendant who (1) owns the property on which B & W conducted its operations, (2) leased the property to B & W, and (3) owns B & W).

Miller v. JanLab, Inc., No. 1:13-CV-282, 2014 WL 5465448 (N.D. Ind. Oct. 28, 2014) (in matter by Fund and its Trustees against JanLab to recover withdrawal liability, denying Motion to Intervene filed under FRCP 24(a)(2) and (b) by Longe Enterprises Corporation, who purchased JanLab’s assets in September 2012, because it met only one of the four criteria required under Rule 24(a)(2) for intervention of right).

* 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 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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