Drummond v. Southern Co. Servs., Inc., No. 24-12773, __ F.4th __, 2026 WL 1465861 (11th Cir. May 26, 2026) (Before Circuit Judges Rosenbaum, Grant, and Brasher)

It was a busy week for the federal appellate courts, as they issued no fewer than five published opinions on ERISA matters. However, because last week’s notable decision (the Supreme Court’s ruling in M&K Employee Solutions, LLC v. Trustees of the IAM Nat’l Pension Fund) was about actuarial calculations, we here at Your ERISA Watch are going to keep the streak alive and discuss the topic once again.

Wait! Don’t tap out yet! This time we are not conducting another deep dive into discount rates. Instead, we are focusing on the more prosaic issue of life expectancy. As Judge Rosenbaum reminds us in this week’s notable decision, the average life expectancy in the time of George Washington was about 36 years, but that statistic has now more than doubled. One would expect pension plans to use actuarial assumptions that keep up with the times, and take this progress into account when calculating benefits, but the plaintiffs in this case contend that their employer’s plan has failed to do just that.

First, a quick primer on how ERISA-regulated pension plans work. These are often called “defined benefit plans” because they pay a specific recurring benefit amount, as opposed to more modern “defined contribution plans,” such as 401(k)s, in which the benefit varies depending on how contributions to the plan are invested.

For unmarried participants, pensions are fairly simple. ERISA requires plans to offer unmarried participants a single life annuity (SLA), which pays a fixed amount until death.

For married participants, it gets more complicated. Plans must offer these participants a joint-and-survivor annuity (JSA), which pays out over the joint lives of the participant and his or her spouse. A JSA allows plans to pay one benefit starting at retirement, through the death of the participant, which is then followed by another benefit to the spouse, which must be at least 50% of the initial benefit. ERISA also requires plans to offer pre-retirement survivor annuities to married participants. This benefit allows for payments to the plan participant’s spouse if the participant dies before retiring.

Crucially, both JSAs and pre-retirement survivor annuities (which, if they qualify under ERISA’s requirements, are called QJSAs and QPSAs) have a statutorily imposed “actuarial equivalence” requirement. ERISA Section 1055 provides that (1) JSAs must be calculated in a way that makes them the “actuarial equivalent” of an SLA, and (2) QPSAs must be calculated in a way that makes them the “actuarial equivalent” of the survivor annuity payment under a JSA. Furthermore, both of these benefits, like SLAs, are protected under ERISA by anti-forfeiture and anti-cutback rules, which prohibit plan administrators from taking away or reducing a pension benefit once it is vested.

This brings us to the plaintiffs in the case, Richard Odom and William Drummond, who are vested participants in the Southern Company Pension Plan, which covers more than 56,000 participants with $16 billion in assets. Both plaintiffs worked for Southern Company and had vested pensions in the plan. (Odom selected a JSA with a 50% survivor annuity, while Drummond chose a 100% JSA.)

Both Odom and Drummond allege that the plan used outdated and unreasonable actuarial assumptions to calculate their retirement benefits. Both challenged (1) what they call the plan’s “QPSA charge,” which is the amount the plan charged them to account for the pre-retirement survivor annuity, and (2) the calculation of their JSAs. They contend that both calculations used outdated mortality assumptions. Specifically, Drummond challenged the plan’s use of the 1951 (!) Group Annuity Mortality Table to calculate his QPSA charge.

Odom and Drummond filed this action in 2023 against Southern Company, the plan, and the plan’s administration committee, asserting four causes of action: (1) violation of Section 1055’s “actuarial equivalence” requirement; (2) unlawful forfeiture under Section 1053; (3) excessive QPSA charges based on outdated actuarial assumptions, and (4) breach of the fiduciary duties of loyalty, prudence, and disclosure. They sought declaratory relief, reformation of the plan to increase annuity payments and decrease QPSA charges, disgorgement of profits, and restitution.

Defendants responded by filing a motion to dismiss for failure to state a claim, which the district court granted. Plaintiffs appealed, and several amici filed briefs on both sides, including the Department of Labor in favor of plaintiffs and the Chamber of Commerce in favor of defendants.

The Eleventh Circuit organized its discussion into three topics: (1) whether ERISA’s actuarial equivalence rule requires “reasonable” assumptions; (2) whether the JSA conversions amounted to forfeitures; and (3) whether the QPSA charges amounted to forfeitures.

On the first topic, the court held that ERISA’s “actuarial equivalence” provision required the use of “reasonable” actuarial assumptions, agreeing with the Sixth Circuit’s decision in March of this year in Reichert v. Kellogg. (Reichert was the case of the week in our March 25, 2026 edition.)

The court found that “ERISA’s definition of ‘present value,’ our past engagement with the same concept, and professional norms in the actuarial industry point in the same direction. Each source shows that actuarial equivalence connotes a degree of connection to empirical grounding and realistic expectations about the future.”

The court noted that ERISA defined “present value” as “the value adjusted to reflect anticipated events,” and that “anticipated events” contemplated “a connection to real-world data and realistic premises.” Furthermore, Department of Treasury regulations have interpreted the “actuarial equivalent” phrase “to require conversion from the plan’s ‘normal form of life annuity’ using ‘consistently applied reasonable actuarial factors.’” The court also invoked more generally ERISA’s purpose of protecting plan beneficiaries in imposing a “reasonableness” requirement.

The Eleventh Circuit stated that this conclusion was also supported by professional actuarial guidelines, which advised actuaries “to take ‘reasonable’ steps, make ‘reasonable’ inquiries, select ‘reasonable’ assumptions or methods, or otherwise exercise professional judgment to produce a ‘reasonable’ result when rendering actuarial services.” These guidelines also “direct[] actuaries to use actual-participant mortality data or ‘recently published relevant and generally available mortality tables’ rather than ‘mortality tables that substantially predate’ newer data.”

Defendants contended that “actuarial equivalence” only required “mathematical equivalency”; thus, any assumptions could be used so long as they were documented in the plan and employed in a uniform fashion. Indeed, defense counsel “agreed at oral argument that Section 1055(d) would even allow plans to use mortality data from 1789[.]” However, based on the above authorities, the court rejected this approach: “the meaning of ‘actuarial equivalent’ can’t support Defendants’ proffered ‘anything goes (as long as you wrote it down)’ interpretation of Section 1055(d).”

Defendants offered two other arguments as well. First, they contended that other statutes in ERISA explicitly imposed a “reasonableness” requirement, but Section 1055 did not, suggesting that Congress did not intend one. The court disagreed, noting that these other statutes were enacted after Section 1055 and were “different from Section 1055(d) both linguistically and conceptually.”

Second, defendants advanced “purpose- and policy-based arguments,” contending that a reasonableness requirement “would impose unmanageable costs on plans, and that it’s better to leave actuarial assumptions up to negotiations in the labor market.” Furthermore, it would “open a costly ‘floodgate of litigation.’”

However, the court noted that ERISA was not a market-based statute, and that “Congress’s overarching ambition” was to “ensure that employees would receive the benefits they had earned… We don’t see how it serves this goal to let plans transform annuities into a form that is worth far less than the benefit a worker earned.” The court also noted that “reasonableness” was quite broad and “permits plans to use any of a range of reasonable mortality and interest-rate assumptions,” which would limit arguments against them..

Moving on to the second topic, the Eleventh Circuit found that Odom’s theory that defendants’ conversion of his SLA to a JSA constituted a “forfeiture” under Section 1053(a) was plausible. Defendants contended that ERISA’s anti-forfeiture provision only created a right to receive a benefit, and did not “guarantee a particular amount or a method for calculating” that benefit, relying on the Supreme Court’s 1981 decision in Alessi v. Raybestos-Manhattan, Inc.

The court disagreed. First, the court rejected defendants’ reliance on Alessi, explaining that Alessi focused on the initial calculation of a benefit, while this case focused on “what happens after the plan calculates his normal retirement benefit.”

Furthermore, the court cited a Seventh Circuit decision (Contilli v. Local 705 International Brotherhood of Teamsters Pension Fund) and Treasury regulations, which both supported the conclusion that “a reduction in the total value of all monthly benefits is a kind of forfeiture,” and that “[c]ertain adjustments to plan benefits such as adjustments in excess of reasonable actuarial reductions, can result in rights being forfeitable.” Thus, if a plan provides a participant “a benefit less valuable than his ‘normal retirement benefit’…this reduction in value compromises his unconditional claim to the value of his normal retirement benefit” and acts as a forfeiture.

As for the third topic, the court held that plaintiffs plausibly alleged that the QPSA charges also violated ERISA’s nonforfeiture rule. The court explained that ERISA allows plans to deduct charges for providing a preretirement survivor annuity, but under Treasury regulations these charges must “reasonably reflect[] the cost of providing the QPSA[.]” For the reasons already advanced by the court, calculation of these charges required “reasonable, realistic actuarial assumptions.”

Defendants challenged the assumptions proposed by plaintiffs in their complaint, but the court declined to wade in: “Defendants will have the opportunity to present evidence of their own at later stages of this litigation. Perhaps they will be able to establish that the Plan’s mortality assumptions were appropriate… But either way, that isn’t an issue to resolve on a motion to dismiss.”

As a result, plaintiffs are now 2-0 in the appellate courts in asserting that ERISA requires plans to use reasonable actuarial assumptions in calculating pension benefits. There are certainly district court cases in other circuits that have gone the other way (including a case from April in the Ninth Circuit), so we will keep you posted as to whether this trend continues.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Breach of Fiduciary Duty

First Circuit

Bowers v. Russell, No. 22-CV-10457-PBS, __ F. Supp. 3d __, 2026 WL 1506413 (D. Mass. May 29, 2026) (Judge Patti B. Saris). This 76-page order constituted the court’s findings of fact and conclusions of law following a twelve-day bench trial involving the termination of an employee stock ownership plan (ESOP) of a family business called Russelectric. The court began by quoting the HBO show Succession: “‘Family and business are dangerously close.’ This litigation exemplifies that lesson.” The ESOP was created by the company’s owner, Raymond Russell, and was terminated after his death by his son John, after which its shares were redeemed. Plan participants received payments for allocated shares but not for unallocated ones. Later, the company was sold to Siemens, which triggered clawback payments to plan participants, but only for allocated shares. In connection with this sale, bonuses were awarded to the Russell family (John and his sisters Suzanne and Lisa), as well as members of company management; these bonuses reduced the payments to participants. The plaintiffs in this action are former employees and ESOP participants who alleged violations of ERISA by Russell family members in connection with the redemption transaction and the clawback. “The crux of Plaintiffs’ claims is that Defendants should have included unallocated shares in the clawback provision, that all shares were undervalued in the redemption transaction, and that Defendants unlawfully reduced the clawback payments by awarding bonuses.” Ten of the claims were against John, and four were against Suzanne and Lisa for knowingly participating in, and benefitting from, the violations. The court addressed the affirmative defenses first, rejecting defendants’ arguments that plaintiffs’ claims were barred by the statute of limitations and that plaintiffs had released their claims. The court found that plaintiffs did not have actual knowledge of the alleged violations within the three-year “actual knowledge” timeframe and that the releases signed by the plaintiffs did not cover the claims at issue: “In the Court’s view, the severance agreements are best read as releasing claims only against previous Siemens directors,” not Russelectric directors. The court then turned to the four “buckets of claims” against John. The court ruled that (1) John was a fiduciary with respect to the clawback negotiation claims, but did not breach his fiduciary duties because he recused himself from the negotiations, and in any event “Plaintiffs have failed to show that excluding unallocated shares from the provision was imprudent or disloyal”; (2) John was a fiduciary regarding the redemption transaction claims, but “the redemption transaction was for adequate consideration and thus was compliant with fiduciary obligations and exempt from ERISA’s prohibited transaction provisions”; (3) ERISA governed the clawback administration claims even though the ESOP had been terminated, John was a functional fiduciary regarding the clawback payments, and John breached fiduciary duties by awarding excessive bonuses that reduced clawback payments to plan participants (for example, John awarded himself “a whopping $14 million for his bonus” even though his salary was approximately $160,000); and (4) John was entitled to judgment on the equitable claims related to the clawback negotiation and redemption transaction, as no breach of fiduciary duties occurred, but was liable in equity regarding the excessive bonuses. As for the claims against Suzanne and Lisa, the court issued similar rulings, finding that they were entitled to judgment on most of the claims, but also finding that they “had actual or constructive knowledge” of the unlawful bonuses, and thus “could be held liable as ‘nonfiduciary parties in interest.’” The court concluded by ordering supplemental briefing “regarding the exact calculation of damages in this complex case.”

Second Circuit

Humphries v. Mitsubishi Chemical Am., Inc., No. 1:23-CV-06214 (JLR), 2026 WL 1493504 (S.D.N.Y. May 28, 2026) (Judge Jennifer L. Rochon). Plaintiffs Robert Humphries and Dennis Mowry filed this putative class action against their former employer, Mitsubishi Chemical America, Inc., and the Administrative Committee of the Mitsubishi Chemical America Employees’ Savings Plan, alleging that defendants violated their fiduciary obligations under ERISA in administering the plan. Initially, the court dismissed the complaint for lack of standing and failure to state a claim but allowed Humphries to replead. (Your ERISA Watch covered this ruling in our November 13, 2024 edition.) After plaintiffs filed an amended complaint, the court partially granted and denied defendants’ motion to dismiss, allowing plaintiffs to proceed on the theory that defendants breached their fiduciary duty by offering more expensive mutual fund share classes when cheaper, identical share classes were available. (The court dismissed plaintiffs’ recordkeeping fees claims and their claims against the board of directors. We covered this decision in our August 27, 2025 edition.) Before the court here was plaintiffs’ motion to amend their complaint to add sixteen new defendants, each allegedly a member of the Administrative Committee and a fiduciary of the plan. Defendants opposed the motion, arguing that “(1) the Plan documents vest fiduciary authority only in the Administrative Committee, not in its Individual Members, and therefore only the Administrative Committee can be held liable for fiduciary decisions with respect to the Plan…and (2) Plaintiffs’ allegations as to the Individual Members’ conduct are insufficient to plead that they breached any fiduciary duties[.]” The court rejected both arguments. The court noted that fiduciary status does not hinge on whether a plan specifically grants fiduciary authority; rather, it includes anyone who exercises such authority. The court cited numerous cases from within the Second Circuit finding “plausible claims for breach of fiduciary duty against individual committee members despite their presence on a formal committee.” The court distinguished defendants’ cases, emphasizing that plaintiffs’ complaint passed muster because “the Individual Members are alleged to have discretionary authority over the Plan rather than mere decision-making capacity at Mitsubishi Chemical generally.” Defendants also argued that adding the individuals “would not…entitle[ ] [Plaintiffs] to any additional relief from the Individual Members beyond what they might recover from the existing [D]efendants for any alleged loss to the Plan.” However, the court noted that plaintiffs sought equitable relief, which might include removal of the individuals from the Committee, which in turn “requires naming the Individual Members as defendants.” Turning to the sufficiency of plaintiffs’ allegations, the court found that the proposed second amended complaint sufficiently alleged that the individual members engaged in conduct constituting a breach of fiduciary duties. The allegations tied the individual members’ purported fiduciary status to their function on the Administrative Committee, rather than their mere positions within Mitsubishi Chemical. The court also dismissed defendants’ argument that the complaint engaged in impermissible group pleading, noting that the allegations provided sufficient notice of the claims against each defendant. However, the court warned plaintiffs of its “expectation that Plaintiffs will move expeditiously to voluntarily dismiss Individual Members from this action if they learn, during discovery, facts suggesting that those Individual Members should not be subjected to liability.” Finally, the court determined that allowing the amendment would not unduly prejudice defendants. The court noted that adding the individual members enabled the plaintiffs to seek equitable relief that might otherwise be unavailable, and “complaints of ‘the time, effort and money expended in litigating the matter,’ without more, [do not] constitute prejudice sufficient to warrant denial of leave to amend.” Plaintiffs’ motion to amend was thus granted, and the lawsuit now has sixteen new defendants.

Disability Benefit Claims

First Circuit

Sargent v. Sun Life Assur. Co. of Canada, No. CV 24-11500-BEM, 2026 WL 1506531 (D. Mass. May 29, 2026) (Judge Brian E. Murphy). Mary Sargent was employed as a senior director of business development for Philips North America LLC until December 31, 2018, when she stopped working due to “significant pain, fatigue, a lack of endurance, and cognitive limitations stemming from a non-work-related shoulder injury.” Her conditions were later diagnosed as “fibromyalgia, bilateral occipital neuralgia, dysthymia, cervical degenerative disc disease, temporomandibular dysfunction, and trigeminal neuralgia.” Sargent applied for benefits under Philips’ ERISA-governed long-term disability plan, which was insured by Sun Life Assurance Company of Canada. Sun Life approved her claim beginning in July of 2019. However, in September of 2022 Sun Life terminated Sargent’s benefits, determining that she was no longer “unable to perform with reasonable continuity any Gainful Occupation for which [she is] or could become reasonably qualified for by education, training and experience.” Sargent unsuccessfully appealed and then filed this action, seeking reinstatement of her benefits. She claimed that Sun Life failed to apply the “reasonable continuity” component of the plan’s definition of disability and did not provide a sufficient explanation for terminating her benefits. Sargent also argued that Sun Life improperly dismissed the reports of her treating physicians and failed to credit the Social Security Administration’s (SSA) decision to award her disability benefits. The case proceeded to cross-motions for summary judgment, which were decided in this order. Because the plan granted Sun Life discretionary authority to determine benefits eligibility, the court employed the arbitrary and capricious standard of review. Addressing Sargent’s “reasonable continuity” argument first, the court found “no meaningful basis” to conclude that Sun Life failed to apply this provision, as Sun Life’s experts concluded that Sargent could work “full-time,” which in the court’s view was functionally equivalent. The court also determined that Sun Life provided a sufficient explanation for its decision: “The mere fact that Sun Life failed to repeatedly use the phrase ‘reasonable continuity’ throughout its explanation does not demonstrate that it failed to apply the correct standard.” The court then addressed three procedural issues raised by Sargent. First, the court acknowledged a structural conflict of interest in the plan because Sun Life both evaluated and paid claims, but the court stated that this conflict was “not an important factor” because Sun Life used independent physicians, a separate appeals unit, and made good-faith benefit payments during the appeal process. Second, the court found that Sun Life provided sufficient explanation for terminating Sargent’s benefits by detailing the claim history, policy terms, evidence considered, and opinions from both Sargent’s and Sun Life’s doctors. Sargent contended that she was not given an opportunity to respond to two doctors’ opinions, but the court concluded that Sargent did not identify “any new evidence or rationale in those final reports for which Sargent lacked the opportunity to respond.” Third, the court found that Sun Life’s decision was reasonable. The court concluded that Sun Life’s decision was supported by substantial evidence, including opinions from independent physicians and consultants who concluded that Sargent could work full-time. The court noted that administrators are not required to give special deference to treating physicians’ opinions and that Sun Life reasonably credited opinions based on objective evidence over those based on subjective symptom reports. The court further stated that SSA determinations “are not binding on disability insurers,” and furthermore, “there is limited value in the SSA’s benefits decision where it is based on an eligibility review that predates the termination of plan benefits.” In any event, the court found that Sun Life adequately explained its disagreement with the SSA’s determination, citing differences in criteria and reliance on updated records and opinions not available to the SSA. As a result, the court granted Sun Life’s motion for summary judgment, and denied Sargent’s, upholding the termination of her benefits.

Fifth Circuit

King v. Unum Life Ins. Co. of Am., No. CV H-25-1850, 2026 WL 1494238 (S.D. Tex. May 28, 2026) (Judge Lee H. Rosenthal). David King worked as a staff process engineer for the energy company Valero. He had a history of syncope (fainting symptoms) dating back to 2016, but was able to continue working after his diagnosis. However, in 2023, he reported worsening symptoms and stopped working, asserting he could not safely perform key job demands, particularly climbing and driving, because of the risk of losing consciousness. He sought long-term disability benefits under Valero’s ERISA-governed benefit plan, which was insured by Unum Life Insurance Company of America. Unum denied King’s claim, concluding that the medical evidence did not support restrictions or limitations that would prevent him from performing his occupation’s material and substantial duties. King’s appeal was unsuccessful, so he brought this action under ERISA Section 502(a)(1)(B) challenging Unum’s denial. The case proceeded to cross-motions for summary judgment; the parties agreed that the default de novo review standard of review applied. The court granted Unum’s motion, and denied King’s, for three reasons. First, the court stated that King’s long work history despite having the same diagnosis weakened his claims regarding the severity of his symptoms: “King’s significant post-diagnosis work regimen undercuts the claim that his illness prevents him from performing his job’s material and substantial duties.” Second, “King did not approach his illness and symptoms as if they were so debilitating that he could not work.” The court found that King’s “medical file is relatively sparse in comparison to the seriousness of the disability he claims,” noting no medical visits between 2016 and 2023. The court found it suspicious that King visited his doctor “after he submitted his claims for disability to Valero and just before he submitted his claim to Unum,” and never went to the emergency room despite his doctor’s “instruction to King to go to the emergency room if he experienced worsening symptoms.” He also did not visit a recommended neurologist, and his self-reported activity involved “inconsistent statements and allegedly rapid physical decline,” which “coincide[d] substantially with the progress of his claim and lack[ed] documented medical evidence[.]” Third, the court credited Unum’s medical reviewers, who “described ample bases for their conclusion.” Those doctors concluded that the evidence did not support restrictions or limitations precluding King’s ability to perform his work duties, highlighting (a) a lack of documented syncopal events during the relevant period, (b) generally normal examination findings, and (c) the view that King’s symptoms were manageable with medication. The court found that these opinions were more persuasive than King’s self-reports and supporting statements from family members. As a result, the court entered judgment in Unum’s favor.

Life Insurance & AD&D Benefit Claims

Fifth Circuit

Richards v. LifePoint Health Welfare Benefits Plan, No. 3:25-CV-03541-X, 2026 WL 1480796 (N.D. Tex. May 27, 2026) (Judge Brantley Starr). Dustin Richards began working for LifePoint on November 25, 2024, and enrolled in the company’s ERISA-governed life insurance benefit plan, naming his wife, Tiffany Richards, as his beneficiary. The policy had an “Eligibility Waiting Period,” which explained that participants had to be in “continuous…Active Employment in an eligible class to reach your Eligible Date,” which was defined as the “[f]irst of the month following 30 days of continuous, Active Employment.” “Active Employment” was defined as “a minimum of 30 regularly scheduled hours per week.” Dustin worked full-time until he collapsed on December 26, 2024, and did not return to work before his death on February 2, 2025. Tiffany filed a claim for the $480,000 life insurance benefit, which was denied by the plan’s insurer, Lincoln National Life Insurance Company, on the ground that Dustin did not satisfy the waiting period. According to Lincoln, Dustin had to be in “active employment” until January 1, 2025 in order to be eligible for coverage. Tiffany’s appeal was unsuccessful, so she filed this action under ERISA against the plan. LifePoint moved to dismiss for failure to state a claim, asserting that Dustin did not meet the eligibility requirements under the terms of the insuring policy. The court applied an abuse of discretion standard because the policy gave Lincoln the authority to determine eligibility and construe the policy’s terms. Under this standard, the court ruled, “It is not unreasonable to conclude that the Policy requires continuous Active Employment for the entire Eligibility Waiting Period under these terms. The Eligibility Waiting Period seemingly includes more days than just the 30 days of continuous, Active Employment. So the Court cannot conclude that Lincoln abused its discretion. To be sure, the Policy doesn’t expressly require this reading. And this reading may be low on the reasonableness scale. But the Court cannot find abuse of discretion on that basis.” However, the court mentioned that if Tiffany could show that Lincoln and LifePoint treated similarly situated claimants differently, it might “constitute an abuse of discretion. Or at least a pleading dispute that necessitates discovery.” As a result, the court granted LifePoint’s motion to dismiss, albeit without prejudice to Tiffany filing an amended complaint within 28 days.

Eighth Circuit

Kleinsteuber v. Metropolitan Life Ins. Co., No. 25-2860, __ F.4th __, 2026 WL 1502873 (8th Cir. May 29, 2026) (Before Circuit Judges Shepherd, Erickson, and Grasz). This case involves the tragic death of Dana Kleinsteuber, who suffered from end-stage renal disease (ESRD). In January of 2022, when administering her own at-home dialysis treatment, she failed to close the chest port, which resulted in severe blood loss, cardiac arrest, and then death. Her husband, Charles Kleinsteuber, submitted claims for life insurance and accidental death benefits under an ERISA-governed plan administered by Metropolitan Life Insurance Company. MetLife paid the life insurance claim, but denied the accidental death claim, contending that (1) Mrs. Kleinsteuber’s death was not an accident because it resulted from natural causes, citing the death certificate, and (2) the claim was barred by the policy’s exclusion for “any loss caused or contributed to by…physical or mental illness or infirmity, or the diagnosis or treatment of such illness or infirmity.” On appeal, MetLife abandoned the argument that Mrs. Kleinsteuber’s death was not an accident, but upheld its denial based on the exclusion: “Mrs. Kleinsteuber’s home dialysis, which she used to treat her ESRD, ‘caused or contributed’ to her death.” Mr. Kleinsteuber thus brought this action, but the district court agreed with MetLife and upheld the denial of his claim. (Your ERISA Watch covered this decision in our August 27, 2025 edition.) Mr. Kleinsteuber appealed, raising four issues, which the Eighth Circuit took in turn in this published decision. First, the appellate court found that MetLife provided a full and fair review of the claim. The court faulted Mr. Kleinsteuber for “zero[ing] in on MetLife’s denial letter” because “[w]e consider all the plan administrator’s communications to the insured in deciding whether it satisfied ERISA’s notice requirements, not just its initial letter.” The court found that MetLife “adequately informed Mr. Kleinsteuber that it denied his claim based on the exclusion[.]” Furthermore, MetLife could not be blamed for not “provid[ing] a description of any additional material or information necessary for [him] to perfect his claim,” because “MetLife denied Mr. Kleinsteuber’s claim based on its application of the exclusion’s language to the undisputed facts of this case, rather than on missing information.” Second, the court evaluated MetLife’s conflict of interest, noting that Mr. Kleinsteuber supported his argument by identifying ten problems with MetLife’s handling of his claim. The court acknowledged that a conflict existed, because MetLife both determined eligibility and paid benefits, but agreed with the district court that this conflict should be given “minor to moderate weight” because Mr. Kleinsteuber “did not identify any evidence tying the problems he perceived with its investigation to its decision denying his claim.” Specifically, the court stated that while “Mr. Kleinsteuber suggests MetLife needed to expressly address all the arguments and evidence he submitted with his administrative appeal,” this was incorrect because “ERISA’s regulations only require a plan administrator to ‘take[] into account’ the information a claimant submits…  They ‘do[] not require the plan administrator to discuss specific evidence submitted by the claimant.’” Third, the court examined the interpretation of the plan exclusion. It noted that “we would ordinarily review MetLife’s interpretation of the exclusion for abuse of discretion,” but stated “there is a problem” because MetLife “did not explain how it interpreted the exclusion’s terms.” Thus, even though the parties had agreed that abuse of discretion review applied in interpreting the exclusion, the Eighth Circuit applied de novo review: “when the plan administrator chooses not to exercise its discretion to interpret a term, as was the case here, we must decide what the term means de novo.” After consulting popular dictionaries, the court concluded that “the exclusion applied if either Mrs. Kleinsteuber’s ESRD or home dialysis brought about or was one of the reasons for her death.” This led to the decisive fourth argument, which was whether substantial evidence supported MetLife’s decision to deny benefits under that interpretation. The court concluded that MetLife did not abuse its discretion. Examining the medical reports, and statements indicating that Mrs. Kleinsteuber’s failure to close her dialysis port led to the blood loss causing her death, the court concluded that a reasonable mind could accept this evidence as adequate to support MetLife’s determination that “Mrs. Kleinsteuber’s home dialysis caused or contributed to her death.” Mr. Kleinsteuber argued that “closing a chest port is not part of dialysis, that the exclusion does not apply because Mrs. Kleinsteuber’s dialysis only contributed to her accident, rather than her death, and that MetLife wrongly weighed some of the evidence in the record.” However, the Eighth Circuit disagreed, stating that (1) “closing a chest port is the final step of dialysis treatment,” (2) “substantial evidence supports MetLife’s conclusion that Mrs. Kleinsteuber’s home dialysis contributed to her death, as her failure to close her port necessarily led to the blood loss that caused her death,” and (3) “it is well settled that we cannot substitute our own weighing of the evidence for MetLife’s.” As a result, the Eighth Circuit affirmed the judgment below in MetLife’s favor.

Plan Status

Fifth Circuit

Principal Life Ins. Co. v. Jones, No. 3:25-CV-00221, 2026 WL 1480286 (S.D. Tex. May 27, 2026) (Magistrate Judge Andrew M. Edison). Kenneth N. Ellis purchased a $2 million life insurance policy from Principal Life Insurance Company, naming his wife, Kathleen Anne Jones, as the sole beneficiary. Ellis and Jones later initiated divorce proceedings, and on May 14, 2025, they entered into a binding informal settlement agreement, which included a stipulation that each party would retain his or her own life insurance policies and release all claims against the other. Ellis died less than two weeks later, on May 27, 2025, before the divorce was final. Jones then attempted to revoke the agreement and claim the insurance proceeds. The administrator of Ellis’ estate informed Principal of the divorce agreement and objected to any payment to Jones. Principal responded by filing this interpleader action, naming Jones and Ellis’ estate as defendants. Principal deposited the contested funds into the court’s registry and was dismissed, after which the defendants filed cross-motions for summary judgment, each asserting entitlement to the benefits. The motions were referred to the assigned magistrate judge, who issued this report and recommendation. The magistrate’s first job was to determine whether the policy was governed by ERISA; Jones contended that it was while the estate argued that it was not. The court agreed with the estate, finding that Ellis was the sole owner of the policy, and that it did not cover any other employees, and thus “the Policy is excluded from ERISA.” Jones pointed to premium payments made by Ellis’ company for his coverage, arguing that this brought the policy within ERISA’s ambit. However, “this argument fails to move the needle. Without another employee-participant in the Policy, the Policy covers only Ellis and fails to qualify as an ERISA plan.” The court thus applied Texas law to determine who was entitled to the benefits. The court determined that the agreement between Ellis and Jones was enforceable and irrevocable under Texas Family Code § 6.604, which governs whether agreements between divorcing spouses are binding. The magistrate found that the agreement met the statutory requirements, including being signed by both parties and Ellis’ attorney. The agreement was thus effective immediately, and because it stated it was “not subject to revocation,” Jones was stuck with it. The court further found that the agreement divested Jones of her status as the policy’s beneficiary, as it included a mutual release of claims and awarded all life insurance policies to the respective policyholders. As a result, the magistrate recommended that the estate’s motion be granted, and Jones’ motion denied.

Pleading Issues & Procedure

Fourth Circuit

Messer v. Garrison Inv. Grp., LP, No. 25-1657, __ F.4th __, 2026 WL 1465139 (4th Cir. May 26, 2026) (Before Circuit Judges King, Gregory, and Thacker). The plaintiffs in this case are former employees of Bristol Compressors International, LLC (BCI) who brought a class action against BCI for violating the Worker Adjustment and Retraining Notification Act (WARN Act) and ERISA. The conduct at issue occurred in 2018 when BCI announced its closure, which led to employment terminations without sufficient notice and termination of the company’s severance plan. Plaintiffs initially included Garrison Investment Group, LP as a defendant in the case, claiming it was a jointly liable alter ego and successor of BCI because it had a financial interest in BCI and “participated in or directed” its closure operations. However, during the litigation plaintiffs voluntarily dismissed Garrison to focus on BCI. Plaintiffs prevailed on their WARN Act claim but not on their ERISA claim; the district court ruled that although the plan was governed by ERISA, BCI did not violate ERISA in terminating it. On appeal, the Fourth Circuit reversed, ruling that BCI did not properly terminate the plan. On remand, plaintiffs successfully moved for summary judgment on their claims. (Due to its insolvency, BCI “did not appear or file a response.”) As one might expect, plaintiffs had a difficult time collecting on their judgment against BCI. As a result, they filed this new action in which they sought to hold Garrison liable based on alter ego and veil piercing theories. However, the district court dismissed the case for lack of subject matter jurisdiction, explaining that plaintiffs improperly sought to enforce a previous judgment against a party not found liable in the original case. The court also considered whether ancillary jurisdiction could apply but concluded it did not extend to new actions seeking to impose liability on parties not previously liable. (Your ERISA Watch covered this decision in our May 21, 2025 edition.) Plaintiffs appealed, and this published opinion from the Fourth Circuit was the result. The appellate court noted, “There are two relevant avenues that could provide federal jurisdiction over this lawsuit. The first is 28 U.S.C. § 1331 which provides federal question jurisdiction. And the second is federal common law ancillary jurisdiction.” Addressing Section 1331 first, the court found that it did not apply because plaintiffs did not allege any new violations of ERISA or the WARN Act beyond those in the original case. The court relied heavily on the Supreme Court’s 1996 decision in Peacock v. Thomas, which held that federal jurisdiction requires an underlying violation of the statute, and piercing the corporate veil is not an independent cause of action under ERISA. As for the WARN Act, the court held that it does not allow for alternative theories of liability like veil piercing because the Act provides exclusive remedies for violations. Furthermore, Department of Labor regulations indicate that veil-piercing and alter ego theories are already “factors to be considered” when determining liability, and thus plaintiffs’ arguments were “redundant.” As for ancillary jurisdiction, the court acknowledged that a federal court “may exercise ancillary jurisdiction to enforce its judgments” even where subject matter jurisdiction is lacking. However, “Although federal courts have the authority to exercise this power, the Supreme Court has nonetheless outlined certain types of enforcement proceedings that do not fall within the ambit of ancillary jurisdiction – one of which is the circumstance we face in this case.” Citing Peacock again, the Fourth Circuit explained that “ancillary jurisdiction does not extend to ‘new actions in which a federal judgment creditor seeks to impose liability for a money judgment on a person not otherwise liable for the judgment.’” In other words, “subsequent suits to enforce judgments entered in prior federal actions must have their own source of federal jurisdiction when they involve new theories of liability, such as fraudulent conveyances or piercing the corporate veil.” In the end, the Fourth Circuit endorsed Garrison’s attorney’s characterization of the case: “this is ‘not a case of Garrison…not being willing to face the music. It’s a case of the plaintiffs not doing their job.” The appellate court thus affirmed, ruling that it had no jurisdiction to entertain plaintiffs’ claims against Garrison.

Provider Claims

Third Circuit

Abira Medical Laboratories, LLC v. Blue Cross Blue Shield of Alabama, No. CV 23-5132, 2026 WL 1483479 (E.D. Pa. May 27, 2026) (Judge Kelley B. Hodge). Frequent litigant Abira Medical Laboratories, LLC, doing business as Genesis Diagnostics, was a Pennsylvania medical testing laboratory service. At issue in this case are 155 patients who purportedly assigned their benefits to Abira to submit claims and pursue remedies under the patients’ health plans, six of which were governed by ERISA. Abira alleged that Blue Cross and Blue Shield of Alabama (BCBSAL), the administrator of these plans, failed to respond to claims or refused to make payments. Abira’s operative second amended complaint alleged (1) a claim under ERISA for unpaid benefits related to the six ERISA plans, (2) a breach of contract claim for the remaining 149 non-ERISA plans, and (3) a quantum meruit/unjust enrichment claim for the non-ERISA plans. BCBSAL moved to dismiss, contending that (1) Abira lacked derivative standing to sue under ERISA due to anti-assignment provisions in the ERISA plans, (2) Abira failed to exhaust administrative remedies under its ERISA claims, (3) claims under the Blue Advantage Plan were preempted by the Medicare Act, and (4) the breach of contract and unjust enrichment claims were not adequately pled. Addressing the ERISA claims first, the court found that Abira lacked derivative standing for claims under two of the ERISA plans due to enforceable anti-assignment provisions. Abira attempted to distinguish “between an anti-assignment provision related to payments only as opposed to an anti-assignment provision for litigation of wrongful denial of claims,” but the court found this “perplexing given that Abira’s Second Amended Complaint asserts that Abira is rightfully entitled to payments because of these assignments. Abira is not seeking to vindicate some other right it claims to have been assigned. The anti-assignment provision explicitly prevents the assignment that Abira seeks to rely on. Abira cannot have it both ways.” The court further found that BCBSAL did not waive the anti-assignment provisions through its “routine” claim processing. For three other ERISA plans the court ruled that Abira failed to plead that it exhausted its appeals under those plans, and further failed to allege a “clear and positive showing” that the administrative process would be futile. (The court did not rule on the sixth ERISA plan because the plan documents were not in the record.) As for the non-ERISA plans, the court dismissed claims under the Blue Advantage Plan because they were preempted by the Medicare Act and Abira failed to exhaust the mandatory administrative remedies. The court also dismissed the breach of contract claim because Abira did not adequately allege the existence of a contract, as it relied on unexecuted assignments of benefits. The court rejected Abira’s argument for an implied contract based on conduct, as the complaint did not allege such a basis other than non-payment. Finally, the court dismissed Abira’s unjust enrichment claim, ruling that Abira did not adequately allege that BCBSAL’s retention of benefits was inequitable. The court noted that allegations of a deceptive campaign by BCBSAL could not be based on non-payment alone. Thus, BCBSAL’s motion was almost completely granted; the only exception was a single claim based on a single ERISA plan. The dismissal was without prejudice.

Tenth Circuit

Servicios Medicos Para Todos SA de CV v. Blue Cross & Blue Shield of Kansas, Inc., No. CV 25-4094-KHV, 2026 WL 1469792 (D. Kan. May 26, 2026) (Judge Kathryn H. Vratil). Servicios Medicos Para Todos SA de CV, d/b/a Hospital Quirurgica Del Sur, is a Mexican hospital that treated Catarina Rziha in its emergency room in 2022, where she racked up charges of $130,073.41. Rziha was covered under an ERISA-governed health plan insured and administered by Blue Cross and Blue Shield of Kansas, Inc. (BCBS). Rziha’s guardian executed an assignment of benefits in favor of the hospital, which purported to transfer to the hospital the right to receive payment and “all medical benefits and/or insurance reimbursement” otherwise payable for the services rendered. The hospital alleged that it contacted BCBS to verify eligibility and that BCBS did so. However, BCBS later took the position that the services were excluded from coverage and paid only a small portion because the provider was “out of network.” The hospital’s appeals were unsuccessful, so it brought this action in state court, asserting one claim for plan benefits under ERISA against BCBS, and three state law claims against Rziha. BCBS removed the case to federal court and filed a motion for judgment on the pleadings, contending that the benefit plan contained an anti-assignment provision, thus barring the hospital’s claims. The hospital responded that “the anti-assignment provision should not be enforced, that BCBS waived that provision and that BCBS is equitably estopped from invoking the anti-assignment clause.” The court noted that the specific anti-assignment language – “However, an Insured’s rights accrued hereunder or under applicable state or federal law (including but not limited to ERISA) are not assignable to any person or entity” – was not in dispute. Thus, the issue was how to interpret this provision. The court held: “Though the plan states that the rights ‘are not assignable to any person or entity,’ it is ambiguous as to what rights are not assignable – all rights under the plan or appeal rights arising under the plan or ERISA. The provision’s use of ‘hereunder’ is likewise ambiguous, since it could refer to the rights described in the ‘Appeal Procedures’ section or the rights described in the entirety of the plan. Moreover, since the provision in question begins with ‘however,’ it could be interpreted that the parties intended to modify the preceding sentence, and therefore the anti-assignment provision only deals with BCBS’s policy to ‘afford Insureds a full and fair review.’ The plan also defines ‘Appeal’ to mean a review of an adverse decision submitted to BCBS, not a court of law. None of the stated definitions implicate the assignability of the right to sue for benefits, which is the right at issue here. Therefore, the Court finds that the plan language before the Court is ambiguous and declines to enforce it on a motion for judgment on the pleadings.” As a result, the court denied BCBS’ motion.

Retaliation Claims

Third Circuit

Fernandez v. Famiglio, No. 26-CV-0105, 2026 WL 1529246 (E.D. Pa. May 29, 2026) (Judge Chad F. Kenney). Sacha Fernandez alleges in this action that she was employed by Peter Famiglio from 2014 to 2020 and was a participant in a 401(k) plan established by Famiglio. Fernandez contends she discovered illegal billing practices, including misleading patients about insurance coverage. Fernandez reported these practices after the end of her employment, at which time Famiglio’s brother, an attorney, allegedly threatened to sue her and withhold her 401(k) funds if she spoke out. She further alleged that Famiglio “retaliated against her by withholding her 401(k) contributions and/or vested benefits, refusing to provide her with required plan documents, and concealing information Plaintiff needed to understand her rights relating to the 401(k) plan.” Fernandez brought this pro se action asserting three claims for relief: (1) violation of ERISA’s anti-retaliation provision, 29 U.S.C. § 1140, (2) failure to provide plan documents under ERISA, 29 U.S.C. §§ 1024, 1132(c), and (3) whistleblower retaliation under 31 U.S.C. § 3730(h). Famiglio filed a motion to dismiss all three claims. On the first claim, the court found that Fernandez failed to allege any “prohibited employer conduct” under ERISA § 510. The alleged retaliatory actions occurred after Fernandez’s employment ended, and “the Third Circuit has held that the term ‘discriminate’ in ERISA § 510 is ‘limited to actions affecting the employer-employee relationship.’” Because Fernandez was not employed by Famiglio at the time of the alleged retaliation, she could not show that the relationship was affected. As for Fernandez’s second claim for failure to provide plan documents, the court ruled that it was time-barred. Because ERISA does not specify a statute of limitations for § 502(c) actions, the court applied Pennsylvania’s two-year statute of limitations for civil penalty or forfeiture actions.   Fernandez’s claim accrued by 2020 at the latest, but she did not file this action until 2026, well beyond the limitations period. The court rejected Fernandez’s arguments for extending the deadline due to the continuing violations and equitable tolling doctrines, finding no ongoing policy or extraordinary circumstances that prevented timely filing. Finally, the court dismissed Fernandez’s third claim for whistleblower retaliation because she was not employed by Famiglio at the time of the alleged protected conduct, which occurred after her employment ended.   Therefore, she could not show that she was “discriminated against in the terms and conditions of employment” as required by 31 U.S.C. § 3730(h). Furthermore, Fernandez failed to provide sufficient details about her protected conduct, such as to whom she reported the practices or whether it was in furtherance of a False Claims Act suit. Famiglio also argued that this third claim was preempted by ERISA, but the court chose not to reach that issue because Fernandez had not stated a viable claim. The court thus granted Famiglio’s motion and dismissed Fernandez’s action without prejudice.

Withdrawal Liability & Unpaid Contributions

Seventh Circuit

Penske Truck Leasing, LP v. Central States Se. & Sw. Areas Pension Plan, No. 25-1738, __ F.4th __, 2026 WL 1502200 (7th Cir. May 29, 2026) (Before Circuit Judges Hamilton, St. Eve, and Pryor). Penske Truck Leasing, L.P. was a participating employer in the Central States, Southeast and Southwest Areas Pension Plan, a multiemployer pension plan serving union members of the International Brotherhood of Teamsters. Penske made contributions to the plan under ten separate collective-bargaining agreements, including one with Local 745 in Dallas, Texas. The collective-bargaining agreement with Local 745 was set to expire on March 1, 2021, but was extended to March 1, 2022, contingent upon Central States’ approval. Central States rejected this extension, prompting Penske and Local 745 to renegotiate. Central States was concerned that Penske was aligning the expiration dates of all its agreements to effect a complete withdrawal in 2022, which would minimize its withdrawal liability. Central States proposed that any withdrawal of Local 745 in 2022 be treated as a 2021 withdrawal, which Penske did not accept. Consequently, Central States decided to terminate Local 745’s participation effective December 25, 2021, unless Penske agreed to the proposal. Penske responded with this lawsuit, seeking a declaratory judgment that Central States had no authority under the Trust Agreement to expel Local 745. The district court granted summary judgment to Central States, concluding that it had the authority to expel Local 745 and that the decision was not arbitrary or capricious. The court also dismissed Central States’ counterclaim regarding Local 745’s effective withdrawal date, ruling that this claim had to be arbitrated under 29 U.S.C. § 1401. In this published decision, the Seventh Circuit affirmed. At the outset, the court determined the appropriate standard of review, ruling that deferential review was appropriate because the Central States Trust Agreement gave the trustees the discretion to interpret disputed terms in the agreement and other plan documents. The court noted that “[w]e have exercised Firestone deference most often in disputes over benefit denials,” but saw no reason why the same approach would not apply in this dispute: “Though our dispute in this case arises from the LMRA’s breach-of-contract provision, that difference provides no reason to change tack.” Under this deferential standard, “We see no reason to disturb the Trustees’ reasonable interpretation finding that they had authority to expel Local 745 without expelling all other Penske’s bargaining units.” The court admitted that “the Expulsion Provision is not a model of clarity on this point,” but under deferential review, the court found the trustees’ decision reasonable because “The Trust Agreement contemplates the expulsion of a single bargaining unit and suggests that Central States need not formally terminate an entire agreement to expel just one bargaining unit.” The court further ruled that the expulsion of Local 745 was not arbitrary and capricious. The court characterized Penske’s complaints about the Trustees’ investigation and decision-making process as “minor quibbles” that did not meet the high bar required for reversal on deferential review. The court noted that Central States had no fiduciary duty to Penske and was not obligated to let Penske minimize its withdrawal liability. Finally, the court addressed Central States’ counterclaim regarding the effective withdrawal date. It agreed with the district court that disputes over withdrawal liability, including the date of withdrawal, must be arbitrated before proceeding in federal court. The court rejected Central States’ argument that the absence of a finalized determination of withdrawal liability exempted it from arbitration, stating that “[t]his reading of the statute’s text would threaten to hollow out the arbitration requirement altogether.” As a result, the entire judgment was affirmed, and any further disputes must be handled in arbitration.

Eighth Circuit

General Elec. Co. v. Boilermaker-Blacksmith Nat’l Pension Trust, No. 25-1442, __ F.4th __, 2026 WL 1466654 (8th Cir. May 26, 2026) (Before Circuit Judges Gruender, Kelly, and Erickson). In this action the Boilermaker-Blacksmith National Pension Trust (the Fund) seeks to impose withdrawal liability on General Electric Company (GE) pursuant to the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA). The Fund asserted two withdrawal claims against GE. The first “was based on the Fund’s assertion that GE experienced a 70% decline in contribution base units (CBUs) in three consecutive years when compared to the average of the two highest years in the preceding five-year period.” The Fund asserted that this resulted in a partial withdrawal which meant GE owed $205 million in withdrawal liability. The second assessment, totaling $22 million, “was a ‘bargaining-out’ partial withdrawal based on GE’s closure of a manufacturing facility in Chattanooga, Tennessee[.]” GE contested these decisions, arguing that it was not liable because it qualified under the MPPAA’s “building and construction industry” (BCI) exemption. (This exemption applies if “substantially all the employees with respect to whom the employer has an obligation to contribute under the plan perform work in the building and construction industry[.]” 29 U.S.C. § 1383(b)(1)(A).) The parties proceeded to arbitration, where GE prevailed on its BCI exemption argument. The district court upheld this ruling, and the Fund appealed to the Eighth Circuit, which issued this published decision. The court noted that the entire case turned on how to interpret the term “substantially all” as it is used in the BCI exemption definition: “More specifically, is ‘substantially all’ determined by using a monthly headcount [as argued by the Fund] or a cumulative headcount [favored by GE]? The parties agree that the answer to this question resolves both the 70% Decline Claim and the Chattanooga Claim.” The court found that the statute was ambiguous, and thus “we must ‘independently interpret the statute.’” It concluded, “Neither the monthly headcount method nor the cumulative headcount method is a precise fit for determining eligibility for the BCI. Nevertheless, we conclude that, of the two options, the cumulative headcount method is more consistent with the purpose of the statute and hews more closely to congressional intent.” The court found that this method “is better able to accommodate natural fluctuations inherent in building and construction employment,” as it considers the total number of employees over the entire lookback period rather than a month-by-month snapshot. The court stressed that the MPPAA aims to protect the solvency of multiemployer plans, and that interpreting the BCI exemption over a longer time period better accounts for the “mobility of both employers and employe[e]s and the intermittent nature of employment” in the BCI. The court noted that “[a] different set of facts may warrant a different result,” but in this case, “of the two options presented, GE’s preferred method is less arbitrary and more faithful to the statute and the congressional intent behind it.” The Eighth Circuit thus ruled in GE’s favor and affirmed.