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Mealey's ERISA

  • June 26, 2019

    Panel Remands Widow’s Survivor Annuity Claim, Says Plan Abused Its Discretion

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on June 20 reversed and remanded a district court’s ruling in favor of a pension plan after determining that the plan’s failure to disclose an audit conducted by an employer to a widow challenging the calculation of the plan’s survivor annuity benefit was an abuse of discretion (Veda M. Odle v. UMWA 1974 Pension Plan, et al., No. 18-1398, 4th Cir., 2019 U.S. App. LEXIS 18515).

  • June 26, 2019

    Disability Insurer Abused Its Discretion In Terminating Benefits, Panel Says

    RICHMOND, Va. — A disability insurer abused its discretion in terminating a claimant’s long-term disability (LTD) benefits because a wealth of medical evidence supports a finding that the claimant was not capable of working in a sedentary position and was totally disabled under the terms of the disability plan, the Fourth Circuit U.S. Court of Appeals said  June 20 (Fredrick E. Smith, et al. v. Reliance Standard Life Insurance Co., No. 18-2225, 4th Cir., 2019 U.S. App. LEXIS 18518).

  • June 26, 2019

    Substantial Compliance Doctrine Does Not Apply To Deadlines Imposed By ERISA

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on June 25 vacated and remanded a district court’s ruling in favor of a disability insurer after determining that the district court erred in applying the doctrine of substantial compliance to excuse the insurer’s failure to issue an administrative appeal decision by the imposed deadline and to justify the use of the arbitrary and capricious standard of review because the substantial compliance doctrine does not apply to regulatory deadlines imposed by the Employee Retirement Income Security Act (Donald Fessenden v. Reliance Standard Life Insurance Co., et al., No. 18-1346, 7th Cir., 2019 U.S. App. LEXIS 18885).

  • June 26, 2019

    ERISA Defendant Prevails In Nebraska On Fiduciary, Loyalty Breach Claims

    OMAHA, Neb. — Allegations by a former employee of National Indemnity Co. that the insurer breached its fiduciary duties by continuing to offer an underperforming mutual fund in a defined contribution employee retirement plan were rejected June 18 by a federal judge in Nebraska (Marc J. Muri v. National Indemnity Company, No. 17-178, D. Neb., 2019 U.S. Dist. LEXIS 101540).

  • June 26, 2019

    Denial Of Disability Benefits Was Not Wrong, 11th Circuit Panel Says

    ATLANTA — A district court did not err in granting a disability insurer’s motion for judgment on the pleadings because the disability claimant did not exhaust all administrative remedies under the long-term disability (LTD) plan and the disability claimant was not entitled to short-term disability (STD) benefits as he already was receiving workers’ compensation benefits, the 11th Circuit U.S. Court of Appeals said June 24 (Lionel Garcon v. United Mutual of Omaha Insurance Co., No. 18-12220, 11th Cir., 2019 U.S. App. LEXIS 18713).

  • June 24, 2019

    9th Circuit Affirms Ruling, Says Plan Amendment Violates Plan Terms On Contributions

    SEATTLE — A Ninth Circuit U.S. Court of Appeals panel on June 12 affirmed a district court’s summary judgment ruling in favor of the plaintiffs in an Employee Retirement Income Security Act class action after determining that an amendment to the pension plan violates the plain terms of the plan regarding employer contributions received on behalf of electricians who travel within the electrical construction industry (Richard Lehman, et al. v. Warner Nelson, et al., No. 18-35321, 9th Cir., 2019 U.S. App. LEXIS 17570).

  • June 24, 2019

    Cornell’s Appeal Of Class Certification In ERISA Suit Denied By 2nd Circuit

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on June 19 denied a petition for permission to appeal class certification filed by Cornell University and others in a breach of fiduciary duty lawsuit (Cornell University, et al. v. Casey Cunningham, et al., No. 19-324, 2nd Cir.).

  • June 24, 2019

    Plaintiffs Seek Preliminary Approval Of Settlement In ERISA Class Action Suit

    BOSTON — Plaintiffs in a class action suit filed in Massachusetts federal court and alleging that a retirement plan was mismanaged urge the court in a June 14 motion to preliminarily approve a proposed $6.8 million settlement between the parties (Melissa Velazquez, et al. v. Massachusetts Financial Services Co., d/b/a MFS Investment Management, et al., No. 17-11249, D. Mass.).

  • June 20, 2019

    Pennsylvania High Court Finds ERISA Does Not Preempt Property Settlement Agreement

    HARRISBURG, Pa. — The Pennsylvania Supreme Court on June 18 found that the Employee Retirement Income Security Act does not preempt the terms of a property settlement agreement (PSA) filed as part of divorce proceedings that occurred before the man died in which the parties agreed to retain their respective pension benefits, explaining that PSAs are contracts under Pennsylvania law (In re:  Estate of Michael J. Easterday, Nos. 15 MAP 2018, 16 MAP 2018, Pa. Sup., 2019 Pa. LEXIS 3305).

  • June 18, 2019

    Insured Claims Financial Conflict Of Interest In Denial Of ERISA Benefits

    BOSTON — An insured alleges in a June 14 complaint filed in a Massachusetts federal court that two insurers who are parties to an administration agreement and a reinsurance agreement engaged in a financial conflict of interest with regard to the denial of his long-term disability benefits under the Employee Retirement Income Security Act (Gary D. Powers v. Northwestern Mutual Life Insurance Co., et al., No. 19-11335, D. Mass.).

  • June 18, 2019

    Parties Square Off In New York Federal Court Over Mortality Tables

    NEW YORK — In a June 13 memorandum of law in support of their motion to dismiss, the Metropolitan Life Insurance Company Employee Benefits Committee and its individual members (defendants, collectively) assert that an amended complaint by two retirees fails to state a claim for relief because the use of an older mortality assumption “actually works to the benefit of many participants” (William Masten, et al. v. Metropolitan Life Insurance Company, et al., No. 18-11229, S.D. N.Y.).

  • June 17, 2019

    Parity Act Allegations In ERISA Suit May Proceed, Judge Says

    SALT LAKE CITY — Allegations that a health insurer covers subacute care in surgical settings but denies coverage in mental health settings provides a basis for a couple’s Parity Act claim under the Employee Retirement Income Security Act, a federal judge in Utah said June 14 (Timothy D., et al. v. Aetna Health and Life Insurance Co., et al., No. 18-753, D. Utah, 2019 U.S. Dist. LEXIS 100388).

  • June 17, 2019

    High Court Denies Review Of ERISA Disgorgement Ruling

    WASHINGTON, D.C. — The U.S. Supreme Court on June 17 denied review of a District of Columbia Circuit U.S. Court of Appeals’ ruling that 29 U.S. Code Section 1344(c) precludes pension plan participants from recovering from the Pension Benefit Guaranty Corp. (PBGC) any post-termination increase in the value of plan assets as a remedy for alleged breach of fiduciary duty (K. Wendell Lewis, et al. v. Pension Benefit Guaranty Corp., No. 18-1279, U.S. Sup.).

  • June 14, 2019

    Narrowed Class Certified In Suit Over Excessive Fees For JPMorgan Retirement Plan

    NEW YORK — A federal judge in New York on June 11 certified a class of participants in JPMorgan Chase Bank N.A.’s 401(k) plan suing over allegedly excessive fees for certain options after narrowing the definition to exclude participants who invested only when there were reasonable fees or no fees at all (Terre Beach, et al. v. JPMorgan Chase Bank, National Association, et al., No. 17-563, S.D. N.Y., 2019 U.S. Dist. LEXIS 97946).

  • June 13, 2019

    Disability Insurer Failed To Properly Address Claimant’s Mental Limitations, Panel Says

    CHICAGO — The Seventh Circuit U.S. Court of Appeals on June 12 reversed a district court’s ruling in favor of a disability insurer after determining that the court and the insurer failed to properly address the disability claimant’s mental limitations and failed to properly classify her occupation under the Dictionary of Occupational Titles (DOT) (Shirley Lacko v. United of Omaha Life Insurance Co., No. 18-2155, 7th Cir., 2019 U.S. App. LEXIS 17518).

  • June 12, 2019

    Pre-Existing Condition Exclusion Does Not Apply To Bar LTD Benefits, Panel Says

    NEW ORLEANS — A disability insurer’s denial of long-term disability (LTD) benefits was arbitrary and capricious because the claimant’s treatment for a symptom that later turned out to be caused by ovarian cancer cannot be considered the condition that caused her disability, the Fifth Circuit U.S. Court of Appeals said June 11 in rejecting the insurer’s argument that the plan’s pre-existing condition exclusion barred the claim for LTD benefits (Marcia L. Smith v. United of Omaha Life Insurance Co., et al., No. 18-60753, 5th Cir., 2019 U.S. App. LEXIS 17367).

  • June 12, 2019

    5th Circuit Affirms Dismissal Of ERISA Suit Against SunEdison Directors, Committee

    NEW YORK — The Fifth Circuit U.S. Court of Appeals on June 7 affirmed a lower federal court’s dismissal of a breach of fiduciary duty and loyalty lawsuit brought by SunEdison Inc.’s board of directors and investment by former employees who participated in the company’s defined contribution retirement plan (Eric O’Day, et al. v Ahmad Chatila, et al., Nos. 18-2621 and 18-2632, 2nd Cir., 2019 U.S. App. LEXIS 17199).

  • June 11, 2019

    Judge Rejects Insurer’s ‘Ludicrous’ Surprise Bill Argument, Motion To Dismiss

    NEW YORK — An insurer’s contention that an out-of-network provider never alleges that a stroke sufferer inquired into the availability of in-network emergency surgery is “ludicrous and offensive,” and the procedure clearly falls within the policy’s surprise bill exception to the anti-assignment provision, a federal judge in New York held May 15 in denying a motion to dismiss (Jeffrey Farkas, M.D. LLC v. Group Health Inc., No. 18-8535, S.D. N.Y., 2019 U.S. Dist. LEXIS 83096).

  • June 11, 2019

    Settlement Preliminarily Approved In Prohibited Transactions Dispute

    OAKLAND, Calif. — A California federal judge on June 3 granted a motion for preliminary approval of an almost $14 million class action settlement in a suit alleging that an employer and its retirement plan investment committee violated the Employee Retirement Income Security Act by charging 401(k) plan participants excessive fees and engaging in prohibited transactions (Marlon H. Cryer, et al. v. Franklin Resources, Inc., et al., No. 16-4265, c/w No. 17-6409, N.D. Calif.).

  • June 10, 2019

    Preliminary Approval Of $14.5M Settlement Granted In Vanderbilt Retirement Dispute

    NASHVILLE, Tenn. — A Tennessee federal judge on May 30 granted a motion for preliminary approval of a $14.5 million settlement of a plan participants’ lawsuit accusing Vanderbilt University, the oversight committee and members of the committee of mismanaging the employee retirement plan in violation of the Employee Income Retirement Security Act (Loren L. Cassell, et al. v. Vanderbilt University, et al., No. 16-2086, M.D. Tenn.).

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