Home > Blog > Blog > Life Insurance > ERISA Watch – Post CIGNA Corp. v. Amara, Are Circuit Courts Split on Simultaneous Pleading of ERISA Claims for Benefits and Equitable Relief?

ERISA Watch – Post CIGNA Corp. v. Amara, Are Circuit Courts Split on Simultaneous Pleading of ERISA Claims for Benefits and Equitable Relief?

This week’s notable decision, Swenson v. United of Omaha Life Ins. Co., No. 17-30374, __F.3d__, 2017 WL 5988351 (5th Cir. Dec. 4, 2017), involves ERISA preemption and simultaneous pleading of ERISA Section 502(a)(1)(B) and 502(a)(3) claims.  It also highlights what appears to be a circuit split on the latter issue.

In this case, Swenson filed suit under Louisiana law in Louisiana state court seeking benefits from a life insurance policy after her husband passed away.  Specifically, Swenson’s complaint cited to Louisiana statutes imposing certain requirements on group life policies concerning the rights of a discharged employee to convert the employer-provided policy into individual life insurance.  See La. R.S. 22:942(7), (10).  United of Omaha removed the matter to federal court arguing it was completely preempted by ERISA.  Following removal, Swenson added a claim for equitable relief under ERISA.

The district court dismissed Swenson’s claims on the grounds that ERISA preempted the state law claims and that Swenson failed to exhaust administrative remedies.  With respect to the equitable relief claim, the court dismissed it with prejudice on the ground that equitable relief is not available when ERISA provides an adequate legal remedy such as the provision allowing judicial review of benefit denials.

Swenson appealed and argued that ERISA’s savings clause excludes from its carve out a plan established primarily for the purpose of providing death benefits.  Thus, the Louisiana statute that she cites in seeking to recover death benefits are within the scope of the savings clause and not preempted.  The Fifth Circuit disagreed:  the savings clause does not allow state law claims seeking recovery of ERISA benefits to escape preemption.  Instead, it only saves certain state laws from conflict preemption, which is a federal defense that can be asserted when a federal law conflicts with a state law.

With respect to the equitable relief claim, the Fifth Circuit explained that because ERISA’s civil enforcement provision provides a direct mechanism to address the injury for which Swenson seeks equitable relief, she cannot assert a separate ERISA claim for breach of fiduciary duty.

In light of the Fifth Circuit’s recent decision in Swenson, there appears to be a circuit split on the issue of simultaneous pleading of ERISA Section 502(a)(1)(B) and 502(a)(3) claims.  See Moyle v. Liberty Mut. Ret. Ben. Plan, 823 F.3d 948 (9th Cir. 2016), as amended on denial of reh’g and reh’g en banc (Aug. 18, 2016) (holding that Plaintiffs can simultaneously pursue, as alternate remedies under ERISA, both a claim for benefits and equitable claim for surcharge, estoppel, and restitution); Silva v. Metro. Life Ins. Co., 762 F.3d 711 (8th Cir. 2014) (holding that the beneficiary properly pleaded alternative theories of liability).  In Rochow v. Life Ins. Co. Of N. Am., 780 F.3d 364 (6th Cir. 2015), the Sixth Circuit prohibited the plaintiff from pursuing his Section 502(a)(3) claim because he had a remedy available under 502(a)(1)(B).  Rochow had already received his remedy under Section 502(a)(1)(B) and the court essentially enjoined his Section 502(a)(3) claim, because, if successful, it would result in a double recovery for the same injury.  Is it only a matter of time before the U.S. Supreme Court decides this issue?

On another topic, I want to share the ABA Employee Benefits Committee’s recent newsletter publication, especially since many of the contributing authors are ERISA Watchers.  As one of the editors of the newsletter, please reach out to me if there’s an issue you’d like to write about for our next issue.

ABA Section of Labor and Employment Law
Employee Benefits Committee Newsletter
Issue:  Fall 2017

Circuit Round Up

Richard Posner, ERISA, and Me

What Does de novo Review Mean Under ERISA? An en banc Fifth Circuit will answer that question for the 30+ million people laboring under its unique interpretation

A Rule in Flux

Seventh Circuit holds forum selection clause enforceable

Thoughts from the New Management Co-Chair, Russell Hirschhorn

Thoughts from the New Union Co-Chair, Ben Eisner

Dining with Sarah

As we go to e-Press

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

Breach of Fiduciary Duty

Seventh Circuit

Briscoe, et al. v. Health Care Service Corporation & Blue Cross and Blue Shield of Illinois, No. 16-CV-10294, 2017 WL 5989727 (N.D. Ill. Dec. 4, 2017) (Judge John Robert Blakey).  Plaintiff, on behalf of a proposed class, claims that Defendants breached their fiduciary duties under § 404 of ERISA by failing to fully cover out-of-network lactation services for plan participants who lacked access to in-network providers.  The court denied dismissal of this claim.  It held that Plaintiffs do allege plausible ACA violations.

Class Actions

Eighth Circuit

Wildman v. Am. Century Servs., LLC, No. 4:16-CV-00737-DGK, 2017 WL 6045487 (W.D. Mo. Dec. 6, 2017) (Judge Greg Kays).  In this putative class action alleging claims for breach of fiduciary duty and prohibited transactions, the court certified the following class under Rule 23(b)(1):  All participants and beneficiaries of the American Century Retirement Plan at the time on or after June 30, 2010, excluding Defendants, employees with responsibility for the Plan’s investment or administrative functions, and members of the American Century Services, LLC Board of Directors.  The court appointed the named Plaintiffs as class representatives and Nichols Kaster, PLLP, as class counsel and Brady and Associates, LLP, as local counsel.

Disability Benefit Claims

First Circuit

Tullie v. The Prudential Life Insurance Company of America, No. CV 16-662-JJM-PAS, 2017 WL 5997405 (D.R.I. Dec. 1, 2017) (Judge John J. McConnell).  The court determined that the 2014 Flex Plan came after Plaintiff’s claim was incurred and therefore it will not and cannot affect her already-filed claim.  The Plan that governs is the one in effect on the date she was found disabled, which is the 2005 Flex Plan 2000.  “The rules providing ERISA benefits cannot unilaterally change after a person files a claim and the language from the relevant Plan document mandates this principle.”  The governing plan does not convey discretionary authority to Prudential so de novo review applies.

Fourth Circuit

Evans v. Exel Inc., No. CV 1:15-4953-RMG, 2017 WL 6043960 (D.S.C. Dec. 6, 2017) (Judge Richard Mark Gergel).  The pro se plaintiff had accepted $10,000 in exchange for a release of any claims arising from or relating to his employment with Defendant.  The court granted Defendant’s motion for summary judgment and found that Plaintiff signed a release agreement which released any claim against Defendant for long term disability benefits.

Eighth Circuit

Johnson v. G&K Servs., Inc. Long Term Disability Plan & Reliastar Life Ins. Co., No. 15-CV-3789 (WMW/KMM), 2017 WL 6021292 (D. Minn. Dec. 5, 2017) (Judge Wilhelmina M. Wright).  The court overruled Plaintiff’s objections to the Magistrate Judge’s R&R recommending that the Court grant Defendants’ motion for summary judgment and deny Johnson’s cross-motion for summary judgment because Johnson failed to establish by a preponderance of the evidence that he was disabled under the terms of the Policy.   The court determined that Marolt v. Alliant Techsystems, Inc., 146 F.3d 617 (8th Cir. 1998) (affirming a district court’s determination that a plan administrator abused its discretion when it denied benefits without providing the claimant any rationale for its decision) does not apply here because of the de novo standard of review.

Ninth Circuit

Harder v. Bristol-Myers Squibb Company Long Term Disability Plan, No. CV 17-1426 PA (GJSX), 2017 WL 6033665 (C.D. Cal. Dec. 6, 2017) (Judge Percy Anderson).  “The Court concludes, after reviewing the Administrative Record, and considering the arguments and Trial Briefs submitted by the parties, that Plaintiff satisfied her burden to establish that she remained totally disabled as defined by the Plan beyond May 1, 2014, and that Aetna’s decision to terminate benefits as of May 2, 2014, was arbitrary and capricious.”

Fritch v. United of Omaha Life Ins. Co., No. 16CV02448 JAH-BGS, 2017 WL 6043668 (S.D. Cal. Dec. 6, 2017) (Judge John A. Houston).  On de novo review, the court found that the medical evidence supports the functional capacity evaluation findings as to Plaintiff’s functional limitations.  The court also found that “Dr. Neuren’s and Nurse Theisen’s paper review reports which included no examination, observation or discussion with Plaintiff are not supported by the evidence of record and are less persuasive than the information provided by Plaintiff’s treating physicians and the function capacity evaluation.”  The court concluded that Plaintiff met his burden of demonstrating by a preponderance of the evidence he is disabled under the terms of the plan.

Turner v. Life Insurance Company of North America, No. C17-1 TSZ, 2017 WL 6000099 (W.D. Wash. Dec. 4, 2017) (Judge Thomas S. Zilly).  The court agreed with Plaintiff’s reading of the definition of “Disabled,” set forth in the WOP provision of the policy.  The court concluded that LINA was required to, but did not, make a showing that the occupations identified in its transferable skills analysis did not involve, as a material duty, working full-time. Thus, the record does not support LINA’s denial of WOP benefits and the court vacated LINA’s decision.


Second Circuit

Browe v. CTC Corporation, et al., No. 2:15-CV-267, 2017 WL 5992333 (D. Vt. Dec. 1, 2017) (Judge Christina Reiss).  Plaintiffs moved in limine to exclude the expert opinions of Timothy Voigt and James Herlihy that the Plan is a “top hat” plan because those opinions express impermissible legal conclusions that invade the role of the court.  The court granted the motion in part, “insofar as they opine that the Plan is a ‘top hat’ plan under ERISA and insofar as they seek to advise the court how to interpret the pleadings and deposition testimony in this case.”  Plaintiffs also moved to exclude the expert testimony of Arthur Wolfe because he was disclosed three months after the discovery deadline for submitting expert reports.  The court conditionally denied the motion as to Mr. Wolfe on the basis that Defendants must pay the costs of Plaintiffs’ preparation for and taking of his deposition.

ERISA Preemption

Second Circuit

Friedland v. UBS AG, No. 16 CIV. 687 (VMS), 2017 WL 6001769 (E.D.N.Y. Dec. 4, 2017) (Magistrate Judge Vera M. Scanlon).  The court determined that the pro se plaintiff’s claims concerning his pension benefits are preempted by ERISA.  Although resolution of the dispute may require reference to the agreements between Plaintiff and Defendant, it is only to the extent that the agreements clarify the Plan benefits to which Plaintiff is entitled.  The agreements are explicit that Plaintiff’s rights arise from and are governed by the Plan.  Plaintiff must amend his complaint to add ERISA claims or he may be barred from raising any legal claims as to his pension in the future.

Third Circuit

Wingo v. Trover Sols., Inc., No. 3:17-CV-00846, 2017 WL 5971841 (M.D. Pa. Dec. 1, 2017) (Judge A. Richard Caputo).  In this matter where Plaintiff seeks a declaration that Defendant has no right for recovery of reimbursement of disability benefits paid from the third-party tort proceeds is preempted by ERISA because Plaintiff seeks a judgment interpreting the rights of the parties under an ERISA-regulated welfare benefit plan.  Plaintiff’s motion to remand is denied.

Fifth Circuit

Swenson v. United of Omaha Life Ins. Co., No. 17-30374, __F.3d__, 2017 WL 5988351 (5th Cir. Dec. 4, 2017) (Before DAVIS, CLEMENT, and COSTA, Circuit Judges).  In this dispute over life insurance benefits, where United of Omaha denied benefits on the basis that the decedent was not a covered employee at the time of his death, the Fifth Circuit held that the civil enforcement action under ERISA was the widow’s exclusive remedy, and she could not assert separate equitable claim under ERISA for breach of fiduciary duty.  District court affirmed.

Sixth Circuit

Owner’s Mgmt. Co. v. Arthur J. Gallagher & Co., No. 1:17CV881, 2017 WL 5971697 (N.D. Ohio Dec. 1, 2017) (Judge Christopher A. Boyko).  The court found that ERISA preemption does not apply to the state law claims against the defendant insurance broker related to advice for Plaintiff’s employee healthcare benefit needs since they are not attempts to enforce responsibilities governed by federal ERISA law.  The court dismissed Count V against Defendant because the court cannot draw a reasonable inference that Defendant is liable to the terminated Plan or to Plaintiff for breach of ERISA fiduciary duties.

Seventh Circuit

Buie v. Maul Excavating, Inc., No. 17-CV-1130-SMY-DGW, 2017 WL 6032954 (S.D. Ill. Dec. 6, 2017) (Judge Staci M. Yandle).  In this case, Plaintiff asserts that his now deceased wife was denied health benefits to which she was entitled under his union Plan because Defendants interfered with his contract.  The court determined that Plaintiff could have brought his state law tortious interference claims under ERISA’s civil enforcement provision and he does not allege the violation of any state or federal legal duty independent of ERISA or his union Plan.  The court denied Plaintiff’s motion to remand to state court.

Smith, et al., v. OSF Healthcare System, et al., No. 16-CV-467-SMY-RJD, 2017 WL 6021625 (S.D. Ill. Dec. 5, 2017) (Judge Staci M. Yandle).  The court exercised its discretion and dismissed the state law claims without prejudice for lack of subject matter jurisdiction.  The court determined that Plaintiffs’ state law claims are preempted because they seek to enforce OSF’s alleged duty to adequately fund the Plans and they could have been brought under the auspices of ERISA.  “Given the absolute conflict between complete preemption and supplemental jurisdiction, the state law claims are poisonous to federal subject-matter jurisdiction. Plaintiffs can either proceed on their state law claims or they can be in federal court, but not both.”

Ninth Circuit

Aton Center, Inc. v. Blue Cross Of California, No. 317CV00852BENMDD, 2017 WL 6027077 (S.D. Cal. Dec. 5, 2017) (Judge Roger T. Benitez).  The court determined that Plaintiff’s claims are not preempted under ERISA because they amount to claims by an independent entity claiming damages.  Plaintiff asserts independent state law claims related to Anthem’s alleged breach of an oral contract regarding the amount to be paid for its patients’ treatment.  Even if Plaintiff received some payments under an ERISA plan, such payments do not, ipso facto, revert Plaintiff’s independent contract claims into assignee claims.  The court found that The Meadows v. Employers Health Ins., 47 F.3d 1006 (9th Cir. 1995) controls.

Barr v. Ross Island Sand & Gravel Co., No. 3:17-CV-01225-MO, 2017 WL 6026669 (D. Or. Dec. 5, 2017) (Judge Michael W. Mosman).  In this ongoing dispute related to Defendant’s failure to send Plaintiffs’ health insurance premium withholdings to the Oregon Teamsters Employers Trust Fund, the court concluded that Plaintiffs’ conversion and intentional interference claims are completely preempted by ERISA.  The court determined that it has subject-matter jurisdiction over those claims and Defendant’s removal of this action to this Court was proper.  The court denied Plaintiffs’ motion to remand to state court.

John Muir Health v. Windsor Capital Group, Inc., No. 17-CV-05911-JST, 2017 WL 5991862 (N.D. Cal. Dec. 4, 2017) (Judge Jon S. Tigar).  Plaintiff alleges that it provided medically necessary, trauma services, supplies, and/or equipment to a patient who was covered by a health plan sponsored, administered and/or financed by Defendants, and asserts two causes of action under state law: quantum meruit and violation of California’s unfair competition law, Cal. Bus. & Prof. Code §§ 17200 et seq.  The court granted Plaintiff’s motion to remand to state court, finding that the Complaint is not completely preempted by ERISA because the claims do not depend on an ERISA plan.

Exhaustion of Administrative Remedies

Second Circuit

Peppiatt v. Aetna Life Insurance Company, et al., No. 217CV02444ADSAKT, 2017 WL 6034641 (E.D.N.Y. Dec. 4, 2017) (Judge Spatt).  Plaintiff asserted that Defendants violated ERISA § 502(a)(1)(B) and ERISA § 502(a)(3) seeking unpaid benefits and interest for Defendants refusal to cover a trial implantation of a neurostimulator pulse generator to treat the Plaintiff’s severe intractable supraorbital neuralgia.  Plaintiff did not appeal the series of EOBs explaining the denial of coverage, which was required by the Plan.  The court granted Plaintiff’s motion for judgment on the pleadings, dismissing the complaint pursuant to Rule 12(c) for failure to exhaust administrative remedies or demonstrate futility.

Life Insurance & AD&D Benefit Claims

Third Circuit

Huffman v. Prudential Ins. Co. of Am., No. 2:10-CV-05135, 2017 WL 6055225 (E.D. Pa. Dec. 7, 2017) (Judge Joseph F. Leeson, Jr.).  “This case hinges on a narrow but subtle question: when the terms of a life insurance policy included in an ERISA plan provide that payment shall be made to the beneficiary in ‘one sum,’ does the insurer violate ERISA by choosing to pay the beneficiary by giving him or her access to a retained asset account, which allows the insurer to retain funds and earn interest on them until the beneficiary withdraws them?”  “First, the Court finds that the unambiguous language of the plan documents required payment in ‘one sum,’ that payment by giving the beneficiary access to a bank account does not satisfy this requirement, and that Prudential breached its fiduciary duties by establishing the accounts. Therefore, the Court grants summary judgment on liability in favor of Plaintiffs with respect to the breach of fiduciary duty claims under ERISA. Second, because issues of fact remain as to whether Prudential’s arrangement violated ERISA’s prohibited transaction provisions, this Court denies both parties’ motions for summary judgment as to that claim. Third, the ERISA claim preempts the state law breach of fiduciary duty claims, and summary judgment is granted in favor of Prudential on that claim.”

Sixth Circuit

Guinn v. General Motors LLC, et al., No. 1:17CV197, 2017 WL 6055223 (N.D. Ohio Dec. 6, 2017) (Judge Christopher A. Boyko).  The court denied Plaintiff’s motion for clarification and/or reconsideration and reaffirmed its prior decision denying the parties’ request to supplement the Administrative Record with the sworn testimony of Plaintiff and of the non-party guardian for decedent in the form of affidavits executed more than two months after the Second Amended Complaint was filed, eight months after this case was originally instituted, and more than a year after MetLife denied Plaintiff’s claim for life insurance benefits.  The court noted that the request to supplement contravenes well-settled Sixth Circuit law for ERISA cases that the court’s review is “strictly limited” to the Administrative Record.

Medical Benefit Claims

Eighth Circuit

Ibson v. United Healthcare Servs., Inc., No. 16-3260, __F.3d__, 2017 WL 6030647 (8th Cir. Dec. 6, 2017) (Before WOLLMAN, BEAM, and SHEPHERD, Circuit Judges).  In this case involving denied group health plan benefits, the Eighth Circuit held that the plan beneficiary’s estate, rather than plan participant, was the proper party to bring claim for unpaid benefits; the participant could not recover in equity for unpaid benefits under the plan; the participant was not entitled to reformation of the plan; the participant’s restitution claim fell within scope of ERISA Section 502(a)(3); the insurer was not subject to civil penalties under ERISA; and ERISA preempted the participant’s breach of contract claim against the insurer.  The court remanded the case for further inquiry into Plaintiff’s equitable claim for premiums paid to Defendant.

Pension Benefit Claims

Third Circuit

Mckay v. Board Of Trustees Of The Bakery Drivers and Salesmen Local 194 Pension Fund, No. CV 2:17-02193, 2017 WL 6021859 (D.N.J. Dec. 5, 2017) (Judge William J. Martini).  On the standard of review, the court found that Defendant is conflicted against benefit recipients who undertake reemployment with “low wage paying, non-union companies” and that it must take this conflict into account in reviewing Defendant’s decision to suspend Plaintiff’s pension benefit.  The court held that Defendant is not entitled to summary judgment because there is a genuine dispute as to whether Plaintiff’s Kellogg employment “is or may be” under the jurisdiction of the union.  The court granted Plaintiff’s motion for summary judgment since there is no information in the record showing that Plaintiff was even delivering food for the Kellogg company.  The court concluded that Defendant abused its discretion in suspending Plaintiff’s pension benefit.

Pension Benefit Guaranty Corporation v. United Tool & Stamping Company Of North Carolina, Inc., No. 2:17-CV-3972, 2017 WL 6001490 (D.N.J. Dec. 4, 2017) (Judge Williams J. Martini).  The PBGC brought suit against UTS-NC for allegedly violating “the Reorganization Agreement” by discontinuing payments in 2008.  Defendant moved under Rule 12(b)(6) to dismiss the complaint for failure to state a claim upon which relief may granted.  The court denied the motion, holding that PBGC was an intended third-party beneficiary of the Agreement, with contractual standing to sue under its terms, and that UTS-NC breached the Agreement when it discontinued payments to the Plan.

Pleading Issues & Procedure

In re Epipen (Epinephrine Injection, USP) Employee Ret. Income Sec. Act (ERISA) Litig., No. MDL 2802, __F.Supp.3d__, 2017 WL 6031755 (U.S. Jud. Pan. Mult. Lit. Dec. 5, 2017).  For two actions which share common factual questions relating to allegations that defendants, all of which are pharmacy benefit managers, breached their fiduciary duty and conducted prohibited transactions under ERISA when they negotiated enhanced rebates from Mylan in exchange for favorable placement of its EpiPen products on their formularies, the court denied Plaintiffs’ motion for centralization pursuant to 28 U.S.C. § 1407.   The court agreed with Defendants that alternatives such as transfer pursuant to 28 U.S.C. § 1404(a) or informal coordination of discovery are preferable to centralization under Section 1407.

Provider Claims

Fourth Circuit

AvuTox, LLC, v. Cigna Health and Life Insurance Company, et al, No. 5:17-CV-250-BO, 2017 WL 6062257 (E.D.N.C. Dec. 7, 2017) (Judge Terrence W. Boyle).  In this suit against Cigna by an out-of-network drug testing and monitoring provider, the court held that Plaintiff failed to allege that it has received a valid assignment of benefits under ERISA, and its ERISA claims are thus properly dismissed for lack of statutory standing.  The court declined to consider Plaintiff’s remaining state law claims and dismissed those claims without prejudice.

Retaliation Claims

Sixth Circuit

Strulson v. Chegg, Inc., No. 3:15-CV-00828, 2017 WL 6003085 (W.D. Ky. Dec. 4, 2017) (Judge Thomas B. Russell).  The court reconsidered and reversed its previous ruling that Plaintiff did not articulate a plausible claim under ERISA Section 510.  Plaintiff alleges that she received health benefits from her employer, her medical conditions caused substantial medical bills to be incurred, Defendant shared the cost of Plaintiff’s health benefit plan, and “Plaintiff’s termination was due to her illness and motivated by Defendant’s expenditure of substantial medical expenses and/or by Defendant’s expectation that Plaintiff would continue to incur substantial medical expenses, and further motivated by Defendant’s fear of increased insurance premiums.”

Severance Benefit Claims

Eleventh Circuit

Stephens v. Time Customer Service, Inc., et al., No. 8:17-CV-1338-T-33AEP, 2017 WL 6042109 (M.D. Fla. Dec. 6, 2017).  In this lawsuit, Plaintiff seeks additional severance plan benefits following her execution of a release agreement and payment of about $34k in severance benefits.  The court denied Plaintiff’s motion to dismiss, finding that the Amended Counterclaim states a claim for equitable relief under § 1132(a)(3) and plausibly alleges that Plaintiff’s ERISA claims were waived under the release, and thus Plaintiff has breached the terms of the Plan by bringing her lawsuit.

Statute of Limitations

Fifth Circuit

Horton v. Hilton Retirement Plan et al., No. CV 17-9015, 2017 WL 5992096 (E.D. La. Dec. 4, 2017) (Judge Lance M. Africk).  The court found that Hilton’s 180-day limitations period is reasonable, especially in light of the Fifth Circuit decision in Dye v. Associates First Capital Corp. Long Term Disability Plan 504, 243 Fed. App’x 808 (5th Cir. 2007) upholding a 120-day limitations period.  Since Plaintiff’s complaint for retirement benefits was filed outside of the limitations period, the court dismissed the case with prejudice.




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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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