ERISA Watch – October 2, 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.

Second Circuit

Statute of Limitations Accrued from Initial Final Denial and Not from Submission of New Evidence Several Years Later

In Ivanovic v. IBM Pers. Pension Plan, 12-CV-6021 RRM CLP, __F.Supp.3d___, 2014 WL 4700207 (E.D.N.Y. Sept. 22, 2014), the court granted the Plan’s motion to dismiss the plaintiff’s complaint for additional pension benefits on the ground that the action is timebarred under the six-year applicable statute of limitations for benefit claims under ERISA § 502(a)(1)(B). The plaintiff participated in the IBM Personal Pension Plan (“the Plan”), and, upon leaving IBM, he received a lump-sum pension payment of $2,121.32. IBM calculated this benefit based on its recorded hire date of January 8, 1990. Based on that date, the plaintiff lacked the requisite five years of employment necessary to trigger vesting in the Plan and thus to receive more extensive benefits. On July 1, 2004, the plaintiff filed a claim with IBM seeking to have his hire date modified to December 8, 1989, and, on that basis, to have the prior lump-sum pension payment voided and his pension benefits reinstated. In a letter dated July 30, 2004, IBM denied the plaintiff’s claim because he had not supplied documentation that he began working at IBM prior to January 8, 1990, and that, if he could provide such evidence, IBM would reconsider his request. IBM explained that even if he could prove he was hired on December 8, 1989, that new hire date would still not satisfy the five-year vesting requirement. On September 21, 2004, the plaintiff administratively appealed IBM’s denial of his claim, submitting time cards dating back to December 11, 1989. In a letter dated November 24, 2004, IBM granted the plaintiff’s request to receive additional service credit going back to December 11, 1989, but again rejected the plaintiff’s claim that he should be entitled to vesting under the Plan because his employment at IBM was less than five years. IBM advised the plaintiff of his right to sue under ERISA § 502(a). Nearly eight years later, by letter dated February 15, 2012, the plaintiff, through counsel, submitted new documentation to IBM. Those new materials included time sheets and an employment form appearing to reflect that IBM hired the plaintiff on November 6, 1989, which would extend the length of his employment beyond five years. IBM refused to reconsider its denial of the plaintiff’s claim. On December 6, 2012, the plaintiff filed suit. The court determined that the plaintiff had six years to file suit from when the Plan clearly repudiated his claim for benefits. The court noted a split among district courts in this Circuit as to whether a cause of action accrues when benefits are initially denied (before an administrative appeal) or when the administrative appeals process is finalized. However, it declined to take sides in that debate since even under the more lenient standard the plaintiff’s claim is timebarred. The court determined that IBM’s written communication to the plaintiff on November 24, 2004-expressly advising him that IBM had denied his appeal, and alerting him of his right to seek further redress by suing under ERISA-qualified as a “clear repudiation” that was made known to the plaintiff.

Third Circuit

Breach of Fiduciary Duty Claims Dismissed Against John Hancock In Excessive Fees Case. In Santomenno ex rel. John Hancock Trust v. John Hancock Life Ins. Co. (U.S.A), 13-3467, __F.3d___, 2014 WL 4783665 (3d Cir. Sept. 26, 2014), the 3^rd Circuit Court of Appeals affirmed the district court’s dismissal of the Participants’ claims against John Hancock for allegedly charging excessive fees in breach of fiduciary duty. The Participants were enrolled in 401(k) Plans which had a trustee, and the trustees contracted with John Hancock to provide a group variable annuity contract. As part of this product, John Hancock assembled for the Plans a variety of investment options into which Participants could direct their contributions. This collection of investment options was referred to as the “Big Menu,” and was composed primarily of John Hancock mutual funds, but also included independent funds offered by other companies. From the Big Menu created by John Hancock the trustees selected which investment options to offer to the Participants, known as the “Small Menu.” Participants could then select from the options on the Small Menu where to invest their 401(k) contributions. Rather than investing each Participant’s contributions directly into an investment option (for example, a mutual fund), John Hancock directed the Participants’ contributions into separate sub-accounts, each of which was correlated with an underlying investment option. John Hancock would pool the contributions in the sub-accounts, and then invest them in the corresponding investment option. Plan trustees could select for their Small Menus any option off the Big Menu, as well as investments offered by companies other than John Hancock. In deciding this case, the court framed the question as not whether John Hancock acted as a fiduciary to the Plans at some point and in some manner and then charged an excessive fee for that fiduciary service; rather, the question is whether John Hancock acted as a fiduciary to the Plans with respect to the fees that it set. The Participants identified three actions that purportedly made John Hancock a fiduciary: 1) it selected the investment options to be included in the Big Menu; 2) it monitored the performance of the funds on the Big Menu; and 3) because, under the terms of its contracts with the Plans, it had the authority to add, remove, or substitute the investment options that it offered to the Plans and to alter the fees it charged for its services. The court determined that the Participants’ first argument is foreclosed by the case law (Renfro v. Unisys Corp., 671 F.3d 314 (3d Cir. 2011); Hecker v. Deere & Co., 556 F.3d 575 (7th Cir. 2009); Leimkuehler v. American United Life Insurance Co., 713 F.3d 905 (7th Cir.2013), cert. denied, 134 S. Ct. 1280 (2014)). The Big Menu’s fund selections and expense ratios are “product design” features that do not give rise to a fiduciary duty and a service provider owes no fiduciary duty with respect to the negotiation of its fee compensation. The court also rejected the Participants’ second argument that John Hancock became a fiduciary by monitoring the performance of the investment options offered on the Big Menu since the trustees, who retain ultimate authority for selecting the funds to be included on the Small Menus, did not give John Hancock discretionary control over management of the Plans. Lastly, the court disagreed with the Participants’ third argument-that John Hancock became a fiduciary by retaining the authority to change the investment options offered on the Big Menu and alter the fees that it charged-because this activity lacks a nexus with the conduct complained of in the Complaint, but even assuming a nexus between the alleged breach and John Hancock’s ability to substitute funds, the Participants still failed to show that John Hancock exercised the discretion over plan management necessary to make it a fiduciary. Although John Hancock did have the contractual right to alter the Big Menu or change its fees, it could do so only after giving the trustee adequate notice and sufficient information to decide whether to accept or reject any changes that would be fiduciary decisions. If the trustee rejected the changes, he could terminate the Contract without penalty. Thus, ultimate authority still resided with the trustees, who had the choice whether to accept or reject John Hancock’s changes. For these reasons, the court determined that the Participants failed to establish that John Hancock acted as a fiduciary under subsection (i) of 29 U.S.C. § 1002(21)(A). The court also rejected the argument that John Hancock is an ERISA fiduciary because it has “render[ed] investment advice [to the Plans] for a fee or other compensation.” 29 U.S.C. § 1002(21)(A)(ii).

Where Plan Provides for External Review, Documents First Submitted by Participant to External Reviewer Are Part of the Court’s Record for Review. In Mirsky v. Horizon Blue Cross & Blue Shield of New Jersey, 13-4121, __Fed. Appx. ___, 2014 WL 4784385 (3d Cir. Sept. 26, 2014) (not for publication), the 3^rd Circuit Court of Appeals affirmed the district court’s grant of summary judgment in favor of a plan participant who was denied continuing inpatient treatment for bulimia after determining that the participant satisfied all of the requisite criteria for demonstrating that continued treatment was medically necessary. In determining the proper scope of the record, the court rejected Horizon’s contention that the District Court erred by considering documents that Permedion reviewed during the external appeal of the plaintiff’s benefit denial, but which Horizon had not had the opportunity to consider during its internal review. Horizon argued the scope of the record should be limited to the information Horizon reviewed during the plaintiff’s internal second level appeal. The court agreed with the District Court that although Permedion’s review was conducted by an external body, the District Court concluded that the external review was “part of Horizon’s clearly articulated review process,” and evidence introduced during that appeal was therefore part of the record. The disputed part of the record included letters from the plaintiff’s treating physicians and therapists, which the court deemed highly relevant to assessing whether the final decision to deny coverage for continued inpatient treatment was supported by substantial evidence. After denying the plaintiff coverage under the Plan, Horizon was required by regulation to provide for a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Plan provided for two internal appeals and one external review, during which the plaintiff was permitted to supplement the record with information that had not been before Horizon at the time of the initial coverage denial. Because the external review was the last appeal conducted prior to the filing of this action, information considered during that review was properly before the District Court and considered in the appeal.

Interpreting a Plan Term in Incongruent Ways Constitutes Arbitrary and Capricious Decision Making. In Minervini v. Bd. of Trustees for the Pension Fund of Plumbers Local 14, 13-2457, __Fed. Appx. ___, 2014 WL 4700261 (3d Cir. Sept. 23, 2014) (not for publication), the plaintiff brought suit against the Board of Trustees for the Pension Fund of Plumbers Local 14 (the “Trustees”), alleging that the Trustees, who are the administrators of the Pension Fund of Local 14 Plan (the “Plan”), improperly denied his application for disability retirement benefits under the Plan. The district court granted the Trustees’ Motion for Summary Judgment, finding that the Trustees’ determination was neither arbitrary nor capricious. The plaintiff had in incurred a “Break-in-Service” and the gravamen of the dispute was whether the “Break-in-Service” caused the plaintiff to cease being a Participant under the Plan, and thus disqualifying him for Disability Pension Benefits. Relying on Section II(C) of the Plan, the Trustees determined, and the District Court agreed, that the Break-in-Service meant that the plaintiff was no longer a Plan Participant. The 3^rd Circuit Court of Appeals disagreed with this conclusion, finding that it is belied by the plain language of the Plan and SPD, which make clear that a Break-in-Service merely affects the calculation of pension benefits, not whether an employee is eligible. Because the plaintiff had accrued the requisite amount of credited service, he was entitled to “vested benefits”-a fact that the Trustees do not dispute. Thus, the court found that the plaintiff meets the definition of “Participant” pursuant to the Plan and SPD. Additionally, the Trustees conceded that the plaintiff is entitled to a Deferred Pension Benefit upon his 55th birthday, which under the Plan, is conditioned on an employee’s status as a Participant. The court found no reason for the plaintiff to be eligible for a Deferred Pension Benefit but not a Disability Retirement Benefit. The court explained that interpreting a single defined term-in this case “Participant”-in incongruent ways within the same ERISA Plan is the embodiment of arbitrary and capricious. The court reversed the judgment of the District Court and remanded to the District Court with instructions to enter an order denying the Trustees’ motion for summary judgment and granting the plaintiff’s motion for summary judgment, and for calculation of the benefits due.

Sixth Circuit

Wisconsin State Leave Law Requiring Payment of ERISA Plan Benefits Is Preempted by ERISA. In Sherfel v. Newson, 12-4285, __F.3d ___, 2014 WL 4812275 (6th Cir. Sept. 30, 2014), the 6^th Circuit Court of Appeals affirmed the District Court’s judgment for the fiduciaries of an employee benefit plan who brought a cause of action against Wisconsin state officials, seeking both a declaratory judgment that the “substitution” provision of the Wisconsin Family and Medical Leave Act (WFMLA) was preempted by ERISA and an injunction against continued enforcement of the provision. The Act’s “substitution provision” requires employers to allow an employee to substitute “paid or unpaid leave of any other type provided by the employer” for the unpaid leave provided by the statute. The terms of Nationwide’s plan, whose participants extend across 49 States, allow its administrator to pay short-term disability benefits only to Nationwide employees who qualify as short-term disabled as defined by the plan. But the Wisconsin Act requires the plan administrator to pay short-term disability benefits to certain beneficiaries who undisputedly are not short-term disabled as defined by the plan. As to those beneficiaries, therefore, the administrator has two choices: violate the Wisconsin Act, or violate ERISA. For example, a Nationwide employee could take the six weeks of paid maternity leave provided by the plan, and then substitute an additional three weeks of STD benefits for the unpaid leave provided by the Wisconsin Act-even if the employee is no longer short-term disabled as defined by the plan. The District Court held that, under the Supremacy Clause of the federal Constitution, the administrator was required to comply with ERISA rather than the Wisconsin Act and the 6^th Circuit agreed. Specifically, ERISA expressly preempts the WFMLA, the WFMLA is also impliedly preempted by ERISA, and the provision of ERISA which prohibits impairment of other federal laws did not save the WFMLA from preemption.

Seventh Circuit

Court Denies Plan’s Motion to Dismiss Claim Brought by Medical Services Provider for Lack of Standing and Failure to Exhaust, But Dismisses Claim for Interest under Illinois Law for ERISA Pre-emption. In OSF Healthcare Sys. v. Contech Constr. Products Inc. Grp. Comprehensive Health Care, 1:13-CV-01554-SLDJEH, 2014 WL 4724394 (C.D. Ill. Sept. 23, 2014), the plaintiff, OSF Health Care System (“OSF”) sued the self-funded health care plan (“Plan”) for compensation of medical services it rendered to the son and dependent of James Giordano, a Plan participant. OSF is an out-of-network provider. The Plan paid part of the bill for medical services but refused to pay the balance. OSF and Giordano sent written communications disputing the Plan’s failure to pay for the services but the Plan upheld its denial of benefits and the plaintiff brought suit. The Plan moved to dismiss on the following grounds: (1) OSF lacks standing to maintain this lawsuit under ERISA § 502(a)(1)(B); (2) OSF’s administrative appeal is untimely under the terms of the Plan; and (3) ERISA pre-empts application of Illinois law requiring payment of interest. The court determined that the language of the Plan does not clearly prohibit assignment and OSF alleged that it has received direct payment from the Plan. As such, OSF has met the low threshold for statutory standing as a beneficiary under ERISA at the motion to dismiss stage. With respect to exhaustion of administrative remedies, in its denial letter, the Plan indicated that it was not paying $12,155.77 of Giordano’s expenses on the grounds that they either exceeded the “usual, reasonable, and customary amounts” or were denied as “unbundled/unrelated/undocumented/ unidentified/duplicated or erroneous,” in both cases citing the basis for such determination solely as “the general exclusions in your SPD.” The court found that these vague and formulaic recitations do not identify the evidence considered by the administrator and the weight assigned, nor do they provide a sufficiently clear picture of the reasoning underlying the administrator’s decision to deny benefits. The court determined that the notice of benefits denial did not even substantially comply with the content requirements of § 2560.503-1(g)(l), thus, OSF is deemed to have exhausted its administrative remedies. Moreover, the court determined that OSF furnished sufficient material to constitute an appeal within the 180-day window because its letters to the Plan stated its refusal to accept the administrator’s decision, its intent to pursue full payment, and its reason. The SPD does not mandate that an appeal be labeled as such, but merely that it include the participant’s identification information, facts and theories supporting the claim for benefits, and any supporting material, and a statement in clear and concise terms of the reason or reasons for disagreement with the handling of the claim. Supplementing OSF’s notice was James Giordano’s expressly titled “appeal” letter of June 30, 2012-within 180 days of OSF’s likely receipt of the denial notice, by the Court’s count-which gave a detailed factual account of the circumstances surrounding his son’s treatment at St. Francis and the reasons OSF should receive full compensation. The court determined that Giordano’s letter shored up any possible gaps in OSF’s initial appeal. Lastly, the court determined that OSF’s prompt pay claim for interest under 215 ILCS 5/368a(c) is pre-empted by ERISA because it has an impermissible connection to an ERISA plan. Even if it could be “saved” under § 1144(b) as an insurance regulation, the Plan’s self-insured status means that application of 215 ILCS 5/368a(c) would fall within the Deemer Clause. The court dismissed OSF’s claim for interest under 215 ILCS 5/368a(c).

Ninth Circuit

Attorneys’ Fees and Costs Awarded to Prevailing Plaintiff. In Echague v. Metro. Life Ins. Co., 12-CV-00640-WHO, __ F. Supp. 3d ___, 2014 WL 4746115 (N.D. Cal. Sept. 24, 2014), the court considered a fee motion in connection with its previous grant of plaintiff’s motion for summary judgment against defendant TriNet, and denial of TriNet’s cross-motion; finding that defendant TriNet had breached its fiduciary duties under ERISA by failing to provide full and accurate information regarding the plaintiff’s wife’s life insurance policies. In that same order, the court denied the plaintiff’s motion for summary judgment against defendant MetLife, and granted MetLife’s cross-motion; and granted defendant PCBB’s motion for summary judgment. Plaintiff sought an award of $395,145 in attorneys’ fees, $16,852.32 in costs, as well as 10% prejudgment and postjudgment interest on the $440,000 award against TriNet, which TriNet opposed. PCBB also moved for an award of attorneys’ fees and costs against plaintiff, which plaintiff opposed. TriNet argued that reductions should be made for (1) the claims that plaintiff did not succeed on, and (2) the “frivolous claims” asserted against PCBB. TriNet also claimed that the hourly rate sought by plaintiff’s lead counsel is too high where she sought $650/hour for 18 years of experience and ERISA practice. After recognizing that fees are customarily awarded to a prevailing ERISA plaintiff, the court determined that the plaintiff’s successful and unsuccessful claims were sufficiently related. Given the structure of PCBB’s contract with TriNet to be the Plan Administrator and then TriNet’s appointment of MetLife as the Claims Administrator, discovery from PCBB was necessary and related to plaintiff’s ultimately successful argument against TriNet under Section 502 (a)(3). With respect to the time spent on the 502 (a)(1)(B) claim, although plaintiff was ultimately unsuccessful on that claim, the court found that the (a)(1)(B) claim and (a)(3) claim were adequately related in that they involved a common core of facts and were based on related, although distinct, legal theories. The factual and legal focus on both of the (a)(1)(B) and (a)(3) claims was that TriNet improperly interpreted the Plan terms, did not properly apply the Plan terms, and did not adequately communicate the Plan terms to plaintiff. The court found that $650 per hour is a reasonable rate given the attorney’s extensive ERISA experience and the testimony from ERISA specialists that $650 an hour is consistent with the prevailing rates for ERISA litigation specialists in the San Francisco Bay Area. However, the court exercised discretion by reducing the requested fee amount by 10%, but awarded the full amount of costs requested. TriNet argued that the plaintiff cannot seek an award for prejudgment interest in its motion for attorney’s fees, that he should have sought prejudgment interest through a motion to amend or alter the judgment under Federal Rule 59(e), and have made that motion within the 28 days following entry of judgment under Rule 59(e). The court declined to reach the question of whether the plaintiff may move for prejudgment interest because it found on the particular facts in this case that prejudgment interest is not warranted where ERISA benefits were not unlawfully withheld. The court determined that MetLife-the Claim Administrator responsible for paying out benefits-was not liable to plaintiff. Instead, the only liability was TriNet’s, as the Plan Administrator, for failure to provide full and accurate information regarding the terms of plaintiff’s wife’s life insurance policies. The court awarded post-judgment interest at the rate specified in 28 U.S.C. § 1961(a). Although PCBB ultimately withdrew its motion for fees, the court awarded the plaintiff some fees for opposing the motion.

Unreported Decisions

Disability Benefit Claims

MacDonald v. Anthem Life Ins. Co., 8:12-CV-2473-T-17TBM, 2014 WL 4809534 (M.D. Fla. Sept. 26, 2014) (finding that Wellpoint delegated discretion to Anthem Life to determine eligibility and claims for LTD benefits, and concluding that Defendant’s decision to deny LTD benefits under the “any occupation” definition of disability to Plaintiff was not “wrong” so the decision to deny further LTD benefits was reasonable).

Cabana v. Reliance Standard Life Ins. Co., ED CV 13-1741 GAF, 2014 WL 4793036 (C.D. Cal. Sept. 25, 2014) (on de novo review, finding that Plaintiff “can hardly be expected to spend a full work day seated at a desk or on her feet if she is unable to sit for the length of a single movie,” and under these circumstances, concluding that she cannot perform the material duties of any occupation that her education, training or experience will reasonably allow, and thus is totally disabled within the meaning of the LTD Plan).

Wong v. Aetna Life Ins. Co., 12-CV-2917-L MDD, 2014 WL 4792944 (S.D. Cal. Sept. 25, 2014) (finding that Aetna’s benefit termination letter and final appeal denial letter suffered from numerous defects that render its decision to terminate the plaintiff’s LTD benefits unreasonable and denying Aetna’s overpayment counterclaim resulting from the plaintiff’s retroactive SSDI award).

Caudill v. Hartford Life & Acc. Ins. Co., 1:13-CV-17-HJW, 2014 WL 4805132 (S.D. Ohio Sept. 26, 2014) (adopting Magistrate Judge’s report and recommendation that Hartford’s LTD benefit decision was arbitrary and capricious, where Hartford relied on a limited “file review” of the plaintiff’s medical records, remanding the claim to the plan administrator for further development of the record, but sustaining Hartford’s objection that on remand Hartford should not be required to further develop the record in a particular manner, including by obtaining in-person evaluations).

Bourland v. Hartford Life & Acc. Ins. Co., C13-6056 BHS, 2014 WL 4748218 (W.D. Wash. Sept. 24, 2014) (denying motion for leave to conduct conflict of interest discovery because of de novo review standard but ordering supplemental briefing on Hartford’s burden of producing statistical data going to the credibility of Hartford’s witnesses).

Wiseman v. Prudential Ins. Co. of Am., 1:12-CV-01337-SEB, 2014 WL 4753692 (S.D. Ind. Sept. 24, 2014) (finding that Prudential provided the claimant a full and fair review of her claim and that its decision terminating her STD benefits and denying her LTD claim for benefits was not arbitrary and capricious).

Mayes v. Standard Ins. Co., 13-2111-JAR, 2014 WL 4725452 (D. Kan. Sept. 24, 2014) (rejecting claimant’s contention that Standard had an affirmative duty to harness further evidence in support of disability claim and finding that Standard’s LTD benefit determination was not arbitrary and capricious).

Bistany v. Reliance Standard Life Ins. Co., CIV.A. H-13-2776, 2014 WL 4735130 (S.D. Tex. Sept. 23, 2014) (finding that Reliance did not abuse its discretion when it terminated the claimant’s LTD benefits on the ground that a mental or nervous disorder contributed to any disability she may have, where the claimant alleged impairment resulting from Lyme disease, Chronic Fatigue Syndrome, and Fibromyalgia ).

Boxell v. Plan for Grp. Ins. of Verizon Commc’ns, Inc., 1:13-CV-89 JD, 2014 WL 4772659 (N.D. Ind. Sept. 22, 2014) (finding in favor of LTD claimant disabled by fibromyalgia, where Plan’s claim decisions were inconsistent and self-contradictory and denied the claimant a full and fair review, but finding in favor of the Plan on the overpayment counterclaim resulting from the claimant’s SSDI award).

Life Insurance & AD&D Benefit Claims

Estate of Jennings ex rel. Jennings v. Metro. Life Ins. Co., CIV.A. 13-5376 JBS, 2014 WL 4723147 (D.N.J. Sept. 22, 2014) (granting summary judgment to MetLife in disputed life insurance matter where the employer cancelled the life insurance coverage and stopped paying premiums to MetLife six months before the participant’s death, but declining to determine the liabilities of unnamed third parties for the alleged mistakes in cancelling the coverage).

Graham v. Aetna Life Ins. Co., CA 7:13-1093-TMC, 2014 WL 4716473 (D.S.C. Sept. 22, 2014) (finding that Aetna did not abuse its discretion in denying claim for accidental death benefits).

Pension Benefit Claims

Box v. Goodyear Tire & Rubber Co., 4:11-CV-02829-MHH, 2014 WL 4793428 (N.D. Ala. Sept. 25, 2014) (in matter where surviving spouse had killed her husband, holding that under either the Alabama slayer statute or federal common law, the spouse is ineligible for the plan’s spousal benefits and since under the terms of the plan, the spouse is the only QPSA beneficiary and the plan does not identify a contingent beneficiary, there is no beneficiary to whom the plan must pay the spousal benefit).

ERISA Preemption

Searls v. Sandia Corp., 1:14CV578 JCC/TCB, 2014 WL 4793491 (E.D. Va. Sept. 25, 2014) (dismissing breach of contract, unjust enrichment, fraudulent inducement, and constructive fraud causes of action concerning the Plaintiffs’ pension benefits as preempted by ERISA).

John Muir Health v. Cement Masons Health & Welfare Trust Fund for N. California, 14-CV-03115-TEH, 2014 WL 4756236 (N.D. Cal. Sept. 24, 2014) (finding that service provider’s state-law claims of quantum meruit and breach of statutory duties not preempted by ERISA where the claims, seeking payment of the amount of services allegedly authorized by the Plan, do not meet both prongs articulated in Davila).

Koble v. United Health Care, Inc., 14-CV-0391-CVE-PJC, 2014 WL 4748609 (N.D. Okla. Sept. 23, 2014) (dismissing Participant’s state law claims of breach of contract and bad faith and finding claim involving life insurance benefits as preempted by ERISA; rejecting Participant’s argument that she can seek equitable relief that is in the nature of remedies available under state law).

Windmill & E., LLC v. Shakib, 2:11-CV-01082-LDG, 2014 WL 4754700 (D. Nev. Sept. 24, 2014) (rejecting Defendants argument that a defined benefit plan is subject to ERISA where the only participants in the pension plan were the owners of the company).

Wausau Supply Co. v. Murphy, 13-CV-698-WMC, 2014 WL 4717068 (W.D. Wis. Sept. 22, 2014) (finding that because stop loss insurance does not strip the benefit plan of its otherwise self-funded status, the Plan’s subrogation claims are preempted by ERISA and equitable defenses, such as the “make whole doctrine,” are inapplicable if at odds with plan terms).

Hall v. BNSF Ry. Co., C13-2160 RSM, 2014 WL 4719007 (W.D. Wash. Sept. 22, 2014) (declining to dismiss based on ERISA preemption the Plaintiffs’ claim under Washington’s Law Against Discrimination grounded on Defendant’s failure to provide healthcare coverage to same sex spouses because they met their initial burden of making plausible Title VII and EPA claims).

Bar-David v. Econ. Concepts, Inc., CIV. 2:13-5885 KM, 2014 WL 4724898 (D.N.J. Sept. 22, 2014) (finding Plaintiff’s claim that Defendants fraudulently induced him to set up and continue to fund a defined benefit pension plan by misrepresenting and omitting material facts about the legal status of such a plan is not preempted by ERISA because he is not suing as a beneficiary of an ERISA plan and does not seek to enforce any rights under any potential ERISA plan; instead, Plaintiff seeks to enforce duties that Defendants allegedly owe based on attorney-client and fiduciary relationships that existed outside of the plan).

Pleading Issues

In re UBS ERISA Litig., 08-CV-6696 RJS, 2014 WL 4812387 (S.D.N.Y. Sept. 29, 2014) (in matter alleging breach of the duties of prudence, loyalty, and to monitor pension plan investment options, finding that Plaintiff lacks standing to sue under ERISA because she has not alleged the existence of a constitutionally cognizable injury and dismissing claims).

Mackey v. Johnson, CIV. 14-2024 PAM/LIB, 2014 WL 4794973 (D. Minn. Sept. 25, 2014) (denying Plaintiff’s motion to dismiss health plan’s claim seeking to recover healthcare expenditures from money paid to the plan beneficiary’s heirs under Minnesota’s wrongful-death statute).

Marquez v. Flextronics Am., LLC, 12-61520-CIV, 2014 WL 4792997 (S.D. Fla. Sept. 25, 2014) (dismissing ERISA claims in third amended complaint where the plaintiff alleged that he was involuntarily terminated or constructively discharged and entitled to severance plan benefits even though he took another job which disqualified him for the benefits under the terms of the plan).

Coil v. Rightchoice Managed Care, Inc., 2:14-CV-04098-NKL, 2014 WL 4792934 (W.D. Mo. Sept. 25, 2014) (denying Defendant’s motion to dismiss without prejudice and giving the plaintiff leave to amend to show he has derivative standing to sue under § 1132 to sue for unpaid health services rendered to his now deceased wife, and that he has exhausted remedies under the plan or that exhaustion would be futile).

Searls v. Sandia Corp., 1:14CV578 JCC/TCB, 2014 WL 4793491 (E.D. Va. Sept. 25, 2014) (denying Defendant’s motion to dismiss Plaintiff’s § 502(a)(3) claim against the company because Plaintiff sufficiently alleged that it exercised a requisite level of control over the Plan and its administration; striking the jury demand as to the Plaintiff’s equitable claim for relief under ERISA).

* 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.