This week’s ERISA-related decisions run the gamut from individual benefit claims to class actions to unpaid employer contribution disputes and so much more!
Read on to learn about (1) an insurer’s creative lawsuit contending that medical providers are gaming the independent dispute resolution process of the No Surprises Act (Blue Cross Blue Shield of Georgia v. HaloMD), (2) two published appellate decisions involving multiemployer plan contributions (IAM Nat’l Pension Fund v. M&K, Board of Trustees v. Barnhart), (3) the final approval of a $3.3 million settlement regarding insurance coverage for minimally invasive sacroiliac joint fusion surgery (Nixon v. Elevance), (4) the rejection of a challenge to the management of Intermountain Healthcare’s retirement plans (Johnston v. Intermountain), (5) the dismissal of a case alleging inadequate notification regarding the conversion of a pension plan to a cash balance plan (Lorusso v. Northwell), (6) a reminder that a summary plan description is not the same as the plan itself (Strong v. MetLife), and last, but certainly not least, (7) a decision explaining that when you click “I agree” on terms and conditions including an arbitration agreement, off to arbitration you must go (Gluesing v. PrudentRx).
There are even more cases to check out below if these don’t float your boat. As usual, we’ll be back next week.
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Arbitration
First Circuit
Gluesing v. PrudentRx LLC, No. 24-CV-549-JJM-AEM, 2026 WL 1972065 (D.R.I. July 8, 2026) (Judge John J. McConnell, Jr.). Plaintiff Sheila Gluesing receives health insurance through Wellmark Health Plan of Iowa, which contracts with Caremark Rx LLC for pharmacy benefit manager services. Wellmark also participates in the PrudentRx Copay Program, which has partnered with Caremark and promises participants “they will enjoy a $0 copay for their qualifying specialty medications.” In this putative class action Gluesing alleges that PrudentRx and Caremark violated ERISA and the Racketeer Influenced and Corrupt Organizations (RICO) Act by “engag[ing] in a scheme to take copay assistance funds designed by drug manufacturers to help patients afford high-cost specialty prescription drugs and divert those funds to insurers rather than to the patients themselves, which resulted in the patients having to bear additional healthcare costs.” The merits of this claim will have to wait for another day, however, because defendants filed a motion to compel arbitration. As it turns out, Gluesing was required to purchase her prescription through CVS Specialty Pharmacy in order to be covered by her insurance, and the CVS Specialty online registration process includes agreeing to terms and conditions that contain a dispute resolution provision mandating arbitration. Gluesing opposed the motion, arguing that (1) no agreement to arbitrate was formed, (2) any agreement was invalid due to economic duress, and (3) defendants, as non-signatories, could not enforce the arbitration agreement. The court addressed each argument in order. First, the court found that Gluesing formed an agreement to arbitrate through a “clickwrap” agreement because she was required to click “I agree” to the terms and conditions, which included an arbitration provision. The court found that the CVS Specialty online registration page provided reasonably conspicuous notice of its terms, and Gluesing “unambiguously manifested assent” by clicking the “I agree” box and creating an account. Gluesing contended that she did not remember creating the account, but her lack of recall did not create a genuine dispute of material fact because defendants “submitted ample evidence to support the conclusion that Ms. Gluesing created the online account,” and her “version of events” – in which a provider must have created an account for her – “raise[d] implausibilities.” Second, the court ruled that the issue of economic duress was a question of contract validity, not formation, and thus was for an arbitrator to decide. The court noted that that the agreement incorporated the American Arbitration Association rules, which delegate questions of arbitrability to an arbitrator. Third, the court addressed Gluesing’s argument that defendants were non-signatories to the agreement. The court rejected defendants’ argument that this issue was also for the arbitrator to decide, but nevertheless decided it in defendants’ favor. The court agreed that Caremark and PrudentRx were “affiliates” and “vendors” under the agreement, and thus were entitled to invoke the arbitration provision under a third-party beneficiary theory. As a result, the court rejected all three of Gluesing’s arguments for avoiding arbitration, granted defendants’ motion to compel, and stayed the case pending arbitration.
Breach of Fiduciary Duty
Second Circuit
Lorusso v. Northwell Health Pension Plan, No. 24-CV-2785(JS)(AYS), 2026 WL 1998738 (E.D.N.Y. July 10, 2026) (Judge Joanna Seybert). The plaintiffs in this case are participants in the Northwell Health Pension Plan. They allege that the plan and associated defendants violated ERISA by failing “to properly and adequately notify plan participants before the conversion of North Shore University Hospital’s pension plan [] to a cash balance plan [] in 1999[.]” Plaintiffs’ first amended complaint (FAC) contains seven causes of action, including violations of 29 U.S.C. § 1054(h) for inadequate notice (Claims I and II), violations of 29 U.S.C. § 1022 for misleading disclosures (Claims III, V, and VI), a violation of 29 U.S.C. § 1025(a)(1)(B) for deficient quarterly benefits statements (Claim IV), and breach of fiduciary duty under 29 U.S.C. § 1104(a) (Claim VII). Defendants filed a motion to dismiss, which was referred to a magistrate judge for a report and recommendation (R&R). The R&R recommended granting the motion, finding that the claims were either untimely or failed on the merits. Plaintiffs filed six objections, and this ruling was the result. Taking the objections in order, the court first ruled that defendants provided adequate notice of the conversion as required by Section 204(h). The court noted that defendants’ communications, including a letter and a subsequent summary plan description (SPD), complied with statutory requirements by summarizing the amendment and its effective date. Second, the court determined that the SPD adequately informed participants under Section 102 of potential benefit reductions, including the possibility of a “shortfall” or “wear-away” effect. “Regardless of the specific terminology used, the SPD’s plain text clearly informed the average plan participant the new Cash Balance formula could result in less retirement benefits than the Prior Plan’s formula, had it continued.” Third, the court saw no breach of fiduciary duty, concluding that plaintiffs failed to allege that defendants made materially false or misleading statements about the plan conversion. The court found that the SPD and other communications did not “misle[a]d plan participants to believe they were better off under the new Cash Balance Plan.” Indeed, “the SPD clearly and repeatedly informed participants they were not guaranteed to accrue benefits that exceeded, or even met, those they would have earned under the Prior Plan, had it continued.” Fourth, under plaintiffs’ Section 105 claim, the court agreed with defendants that plaintiffs’ allegations were “conclusory” because they described “account statements purportedly received by unnamed putative class members, rather than factual allegations regarding account statements received by the Plaintiffs and how those statements were purportedly deficient.” The court emphasized that the FAC did not allege any plaintiff was entitled to a different benefit from what was reflected in their statements. Fifth, the court agreed with the R&R that all of plaintiffs’ claims were untimely because any ambiguity or confusion about the plan conversion arose at the time of disclosure in 1998 and 1999. Plaintiff argued for extension of the deadline because of “fraud and concealment,” but these allegations “are contradicted by the plain language of the SPD which repeatedly advises participants of a possible significant reduction in benefits.” Sixth, and finally, the court denied plaintiffs’ request for leave to amend, noting that they “have known, or should have known, about the deficiencies in the FAC since well before the R&R was filed[.]” The court also cited plaintiffs’ failure to comply with procedural rules for amending pleadings. As a result, all of plaintiffs’ objections were overruled, the R&R was upheld in its entirety, and defendants’ motion to dismiss was granted in full.
Tenth Circuit
Johnston v. Intermountain Healthcare, Inc., No. 1:25-CV-00073-JNP-DAO, 2026 WL 1998490 (D. Utah July 10, 2026) (Judge Jill N. Parrish). The plaintiffs in this action are participants in defined contribution retirement plans sponsored by Intermountain Healthcare, Inc. In this putative class action they allege that Intermountain and associated entities breached their fiduciary duties under ERISA in mismanaging the plans. Plaintiffs alleged that the plans, which include a 401(k) plan and a 403(b) plan, had substantial assets and were thus “jumbo plans” with significant bargaining power regarding fees and expenses. The 401(k) plan included the Principal Stability Fund, a synthetic guaranteed investment contract (GIC), which plaintiffs claimed was underperforming and riskier compared to other available options. Plaintiffs asserted three main claims: (1) breach of the fiduciary duty of prudence by “failing to objectively and adequately review the Plans’ investment portfolio, initially and on an ongoing basis, with due care to ensure that each investment option was prudent, in terms of performance,” specifically citing the Principal GIC; (2) failure to monitor the committee responsible for managing the Plans; and (3) engaging in a prohibited transaction by excessively compensating T. Rowe Price Retirement Plan Services, Inc. (TRP) for recordkeeping and trustee services. Defendants filed a motion to dismiss for failure to state a claim. On plaintiffs’ first claim, the court found that they failed to provide a “meaningful benchmark” to support their claim that the Principal GIC was imprudent. Plaintiffs offered GIC comparators, but most were not synthetic GICs like the Principal GIC. To the extent plaintiffs’ comparators had similarities, “even if those similarities do indeed exist and are relevant, the characteristics identified by Defendants – investment strategy and risk profile – are necessary to identify meaningful comparators in this context.” The court emphasized that a meaningful comparison requires more than superficial similarities and must consider the structural differences affecting crediting rates. “Otherwise, a comparison will not be meaningful; it will be comparing apples to oranges.” Furthermore, the court faulted plaintiffs for emphasizing underperformance rather than process, even though prudence inquiries focus on the “decision-making process itself.” Plaintiffs’ second claim, breach of the duty to monitor, also failed because it was derivative of the duty of prudence claim. As for plaintiffs’ third claim, for prohibited transaction, the court did not accept defendants’ argument that it was time-barred because “the court must accept as true that Plaintiff only learned of all material facts shortly before this suit was filed.” The court further rejected defendants’ attempt to place a “more involved pleading standard” on plaintiffs, stating, “This court thus sees no reason to not take the Supreme Court at its word that ‘plaintiffs seeking to state a § 1106(a)(1)(C) claim must plausibly allege that a plan fiduciary engaged in a transaction proscribed therein, no more, no less.’” However, plaintiffs’ claim failed on the merits: “The most immediate issue is that Plaintiffs circularly allege that the alleged prohibited transaction they find fault with is the same transaction that caused TRP to be a party in interest. That cannot be so… When TRP contracted with the Plans to provide its recordkeeping services, it was not yet a party in interest.” Thus, there could be no prohibited transaction because there was no “prior relationship.” As a result, all of plaintiffs’ claims were non-starters, and the court thus granted defendants’ motion to dismiss.
Class Actions
Sixth Circuit
Nixon v. Elevance Health, Inc., No. 3:19-CV-00076-GFVT-EBA, 2026 WL 1990461 (E.D. Ky. July 9, 2026) (Judge Gregory F. Van Tatenhove). The plaintiffs in this action challenged insurance company Elevance Health’s medical policy of denying coverage for minimally invasive sacroiliac joint fusion surgery as “investigational” and “not medically necessary.” After the suit was filed, Elevance revised its policy to cover the procedure in certain instances, and the parties engaged in discovery and then successful settlement discussions. In December of 2025 the court granted preliminary approval of the parties’ settlement, and a fairness hearing was held on July 6. In this order the court granted final approval of the settlement and awarded attorney’s fees and service awards to the class representatives. The court found that all three steps of the Federal Rule of Civil Procedure 23 process were satisfied, as preliminary approval had been granted, class members were given notice and none objected, and a final fairness hearing had taken place. The court determined that the settlement met the standard for final approval based on the Sixth Circuit’s UAW v. GMC factors, which include the risk of fraud or collusion, the complexity and expense of litigation, the amount of discovery, the likelihood of success on the merits, the opinions of class counsel and representatives, the reaction of absent class members, and the public interest. The court noted that there was little risk of fraud or collusion, given the extensive litigation history and discovery conducted. The likelihood of success on the merits was uncertain, but the denial of defendants’ motions to dismiss and to strike class allegations suggested a possible favorable outcome for plaintiffs. The opinions of class counsel and representatives supported the settlement, as it provided substantial relief to class members. (The settlement is for $3.3 million and permits class members to “receive up to $15,000 to reimburse their out-of-pocket expenses used to pay for the procedure.”) The absence of objections from class members and the strong policy favoring settlement in class actions further supported approval. Regarding attorney’s fees and service awards, the court applied the “percentage of the fund” method, finding the requested fees of $825,000 to be reasonable, as they constituted 24.3% of the total settlement benefits. The court considered factors such as the value of the benefit to the class, society’s interest in rewarding attorneys for beneficial class actions, the contingency basis of the litigation, the complexity of the case, and the professional skill of counsel. The court also approved service awards of $17,500 for each class representative, noting their instrumental role in achieving relief for the class and finding the awards “in line with…other class action settlements in the Sixth Circuit.” The court thus dismissed the action and entered judgment.
Disability Benefit Claims
Third Circuit
Magdalasov v. ByteDance Inc., No. CV 25-13824 (ES) (JBC), 2026 WL 2017269 (D.N.J. July 13, 2026) (Judge Esther Salas). Yakov Magdalasov was an employee of ByteDance and a participant in its ERISA-governed short-term disability plan, which was administered by Sedgwick Claims Management Services, Inc. He began a medical leave in March 2025 due to mental health conditions and submitted a claim for benefits under the plan. Sedgwick approved it, but only for about a month. Magdalasov unsuccessfully appealed and then brought this action. Magdalasov contends that the denial was retaliatory, influenced by employment-related considerations, and that he “received no meaningful response” from Sedgwick or ByteDance when seeking clarification. His pro se complaint contains three claims under ERISA: (1) denial of benefits under 29 U.S.C. § 1132(a)(1)(B), (2) retaliation in violation of 29 U.S.C. § 1140, and (3) a request for equitable relief under 29 U.S.C. § 1132(a)(3). Both defendants filed motions in response; ByteDance sought to dismiss the first claim for benefits and compel arbitration of any remaining claims, while Sedgwick moved to dismiss the complaint or compel arbitration. Starting with count one, the court dismissed it regarding both ByteDance and Sedgwick. The court found that Magdalasov failed to identify any specific provisions of the plan that entitled him to benefits beyond the termination date. “A plaintiff cannot plausibly allege that benefits are due under an ERISA plan merely by asserting that he should have received a different benefits determination… Rather, the complaint must identify the plan language that allegedly confers the claimed entitlement and explain how the administrator’s decision contravened that language.” Additionally, the court noted that Sedgwick was not a proper defendant for this claim because Magdalasov did not allege that Sedgwick “exercise[d] control over the administration of benefits,” a requirement for fiduciary status under ERISA. The court also dismissed Magdalasov’s second claim under ERISA § 502(a)(3), ruling that (a) he could not proceed against Sedgwick because it was not a fiduciary, and (b) the claim was duplicative of his first claim for plan benefits. The court noted that pleading in the alternative is allowed, but here Magdalasov’s claim was “premised on the same underlying conduct as his Section 502(a)(1)(B) claim,” and “identifies no distinct injury separate from the alleged denial of benefits[.]” Thus, it was functionally the same as his first claim and redundant. As for Magdalasov’ retaliation claim, the court dismissed it regarding Sedgwick because ERISA § 510 is limited to actions affecting the employer-employee relationship, and Sedgwick was not Magdalasov’s employer. For ByteDance, the court compelled arbitration of the retaliation claim, finding that it fell within the scope of the parties’ Mutual Agreement to Arbitrate (MAA). The court rejected Magdalasov’s arguments that (1) his claim was “part of the ERISA carve-out” and therefore “falls within ERISA’s remedial scheme and outside arbitration,” and (2) the MAA was unconscionable. The court found that the arbitration provision “appears to be rather broad, calling for arbitration of ‘any dispute arising out of or relating to’ claims under ERISA except for claims for benefits.” Furthermore, Magdalasov “makes no argument pertaining to the insufficiencies of the procedure afforded him with respect to the MAA,” and “the MAA does not limit Plaintiff’s substantive rights or remedies otherwise available to him[.]” As a result, the MAA was enforceable. The court thus granted both ByteDance’s and Sedgwick’s motions, and gave Magdalasov leave to amend due to his pro se status.
Sixth Circuit
Fitzgerald v. Metropolitan Life Ins. Co., No. 23-13169, 2026 WL 1990460 (E.D. Mich. July 9, 2026) (Judge David M. Lawson). Kirk Fitzgerald was as a production machine operator for Nexteer Automotive when he developed severe health problems in 2015. Fitzgerald primarily suffered from major depressive disorder, bipolar disorder, and general anxiety disorder, but also had physical issues such as pelvic floor dysfunction and back discomfort. He stopped working and applied for short-term and then long-term disability (LTD) benefits under Nexteer’s ERISA-governed employee disability plan, which was insured and administered by Metropolitan Life Insurance Company. MetLife approved Fitzgerald for both benefits, and continued paying LTD benefits through 2020, when it determined that Fitzgerald no longer met the definition of disability. Fitzgerald unsuccessfully appealed and then brought this action under ERISA Section 502(a)(1)(B), seeking to recover plan benefits. The case proceeded to cross-motions on the administrative record, where the court applied de novo review. At the outset, the court was required to decide which version of the plan applied: the 2011 version or the 2016 version. As the court explained, “the 2016 certificate [] sets out a definition of disability that is more generous to the plaintiff here,” because it allowed for benefits when a claimant is “‘unable to engage in any occupation for remuneration or profit covered under a collective bargaining agreement with’ Nexteer and must not be ‘working in an occupation for any other employer.’” However, “the 2016 certificate is more limiting on the duration of LTD benefits,” with a 60-month maximum benefit period. The court agreed with MetLife that the 2016 version governed Fitzgerald’s claim because it was the version in effect when he applied for and was granted LTD benefits. Turning to the evidence of disability, the court quickly determined that Fitzgerald’s claim was not supported by any physical condition. However, the court found that that MetLife improperly terminated Fitzgerald’s claim because the evidence showed that his psychiatric conditions continued to prevent him from working in a job for which he was qualified at Nexteer. The court emphasized that MetLife’s prior determinations, which found Fitzgerald unable to perform his job due to severe depression and anxiety, “remain relevant,” and that Fitzgerald continued to suffer from the same functional limitations during the relevant review period. The court stated that the Social Security Administration’s decision, which denied benefits, was relevant, but only in a limited fashion, because it predated MetLife’s review and evaluated Fitzgerald’s ability to perform jobs that “do not fall within the scope of the manufacturing positions encompassed by Fitzgerald’s Nexteer job class.” The court relied heavily on the opinion of Fitzgerald’s treating psychiatrist and was unconvinced by the reports of MetLife’s reviewing physicians. The court found that these reports were incomplete, emphasized marginally relevant facts, did not focus on key issues, “contained reasoning that effectively heightened the standard for disability,” and “relied on cherry-picked observations that lacked context[.]” Specifically, MetLife’s doctors did not “meaningfully address the central evidence supporting Fitzgerald’s disability, particularly his inability to regulate emotions and sustain concentration throughout a workday.” As a result, the court concluded that Fitzgerald was entitled to LTD benefits until October of 2021, when the 60-month maximum benefit period expired. The court found that remanding the case to MetLife “would serve no useful purpose,” as the record demonstrated Fitzgerald’s continued disability. The court ordered supplemental briefing regarding the benefit amount due.
Eleventh Circuit
Wang v. Metropolitan Life Ins. Co., No. 25-11527, __ F. App’x __, 2026 WL 1960673 (11th Cir. July 7, 2026) (Before Circuit Judges Rosenbaum, Jill Pryor, and Branch). Yu Wang was an Engineering Technical Leader for General Electric and a participant in GE’s ERISA-governed long-term disability benefit plan, which was insured by Metropolitan Life Insurance Company. Wang stopped working in 2022 due to shortness of breath, chest pain, and arrhythmia. He applied for benefits under the plan, claiming disability due to a stress-related heart condition. However, the plan’s third-party administrator, Sedgwick Claims Management Services, denied Wang’s claim, contending that his condition was “relatively benign,” with “no evidence of heart disease or risk of cardiac arrest.” Wang appealed twice to MetLife, submitting updated evidence of an anxiety condition, but MetLife upheld the denial. MetLife “reaffirmed the prior finding that Wang’s cardiac condition did not result in restrictions or limitations,” and addressed Wang’s “alleged anxiety and/or depression,” finding “there is no available evidence documenting a severe psychiatric disorder.” Wang thus filed this pro se action for plan benefits against MetLife, contending that MetLife “failed to review his conditions holistically, that it arbitrarily disregarded his mental-health claims, that the claims process was plagued by procedural deficiencies, and that MetLife’s decisions were tainted by bias, conflicts of interest, and impartiality.” The district court was unconvinced and granted MetLife’s motion for judgment on the administrative record. Wang appealed, and this per curiam decision from the Eleventh Circuit was the result. Addressing the standard of review first, the court acknowledged Wang’s argument that the plan language did not confer discretionary authority on MetLife. The court even thought “he might be right about that,” but it did not matter because the district court employed de novo review, and “[w]e also agree with the court that MetLife’s decision was not de novo wrong, for the reasons we explain in more detail below[.]” Next, the court declined to consider four new pieces of evidence offered by Wang, ruling that they were not submitted to the district court below and were not especially probative in any event. Turning to the merits, the Eleventh Circuit agreed with the district court that MetLife’s decision to deny Wang’s claim was de novo correct. Although some doctors opined that Wang was unable to work due to symptomatic premature ventricular contractions, “objective testing…failed to show that Wang’s PVCs were anything more than a ‘benign condition’ that likely did not cause his symptoms of chest pain, tightness, and shortness of breath.” Indeed, Wang’s own doctors ultimately agreed with MetLife’s reviewing physician that “Wang’s symptoms were likely caused by anxiety, not by a cardiac condition.” The court also found no evidence of treatment for anxiety or depression that would render Wang unable to perform his job duties. The court noted that references to anxiety and panic disorder in the records were not supported by diagnosis or treatment. The court further rejected Wang’s allegations of procedural defects, concluding that MetLife conducted a full and fair review of his claim. The court stated that the denial letters consistently outlined the plan’s definition of “total disability” and explained why Wang’s medical records did not meet this standard. The court also dismissed Wang’s allegations of bias and conflicts of interest as unfounded, as well as his claims regarding litigation misconduct, noting that MetLife had abided by court deadlines and kept him reasonably informed. As a result, the Eleventh Circuit affirmed the judgment in MetLife’s favor in its entirety.
Discovery
Second Circuit
Rakhmanchik v. Cigna-Evernorth Servs., Inc., No. 26-CV-01339 (JAV), 2026 WL 1974075 (S.D.N.Y. July 8, 2026) (Judge Annette A. Vargas). Aleksandr Rakhmanchik alleges various violations of ERISA in this action arising from his termination by Cigna-Evernorth Services, Inc. Specifically, his complaint asserts “(1) violation of Plaintiff’s rights guaranteed by ERISA, (2) promissory estoppel under ERISA Section 502, 29 U.S.C. § 1132(a)(1)(B), (3) wrongful discharge under ERISA Section 510, 29 U.S.C. § 1140, and (4) unjust enrichment.” During his employment, Rakhmanchik signed a Voluntary Arbitration Agreement, which “applies to any dispute, past, present or future, arising out of or related to [Plaintiff’s] employment or relationship with Cigna.” Thus, Cigna filed a motion to dismiss and a motion to compel arbitration, arguing that Rakhmanchik’s claims under ERISA Sections 502 and 510 failed to state a claim and that his unjust enrichment claim should be compelled to arbitration. (Cigna did not move for arbitration of Rakhmanchik’s ERISA claims because the arbitration agreement contained a carveout exempting “claims for employee benefits under any benefit plan sponsored by Cigna…covered by [ERISA].”) However, these motions were not decided in this order. Instead, the court ruled on a third motion by Cigna, to stay discovery pending the resolution of its first two motions. Cigna contended that discovery related to the unjust enrichment claim should be stayed due to arbitration and that discovery related to the ERISA claims should be stayed “due to both a lack of merit and central factual issues that overlap” with the unjust enrichment claim. The court agreed with Cigna. The court explained that ordinarily it applies a three-factor test in evaluating stay requests, which involves assessing whether the defendant has made a strong showing that the plaintiff’s claim is unmeritorious, the breadth and burden of discovery, and the risk of unfair prejudice to the opposing party. However, in cases involving a motion to compel arbitration, courts in the Second Circuit typically do not apply the test and simply grant a stay “absent compelling reasons to deny it.” Furthermore, the court ruled that “Defendant has made a substantial showing that the plaintiff’s ERISA claims are unmeritorious. In particular, Defendant in its moving papers contends that Plaintiff not only failed to plead that he met the criteria to recover benefits under the Severance Plan, his own allegations make clear that he did not qualify, as he was not employed at Cigna on the relevant dates.” In his briefing, Rakhmanchik “does not aver that he satisfies the plan criteria.” As a result, the court was clearly skeptical of Rakhmanchik’s claims and granted Cigna’s motion to stay discovery until the court could rule on Cigna’s other two motions.
Exhaustion of Administrative Remedies
Third Circuit
Sparks v. Teva Pharmaceuticals USA, Inc., No. CV 25-630 (MAS) (TJB), 2026 WL 1959349 (D.N.J. June 29, 2026) (Judge Michael A. Shipp). Corey Sparks was hired by Teva Pharmaceuticals USA, Inc. in 2019 and was promoted in 2021 to Vice President, Regional Finance Director, U.S. In November of 2022 Sparks attended a conference where he allegedly made aggressive comments and exhibited inappropriate behavior, including claims of intoxication and making others uncomfortable. Teva conducted an investigation, after which it terminated Sparks in December of 2022, finding that that he was ineligible for benefits under Teva’s Separation Benefits Plan due to his misconduct. Sparks subsequently filed this action against Teva and one of its subsidiaries (Anda Inc.), asserting ten counts: (1) violation of the New Jersey Law Against Discrimination (NJLAD), (2) breach of employment contract, (3) breach of the implied covenant of good faith and fair dealing, (4) declaratory judgment, (5) violation of the Conscientious Employee Protection Act (CEPA), (6) tortious interference with business relations, (7) a second claim for breach of employment contract, (8) negligence, (9) piercing the corporate veil/alter ego liability, and crucially for our purposes, (10) failure to pay severance benefits under ERISA. Three of Sparks’ claims were dismissed in state court (counts four through six) before the case was removed to federal court. Defendants filed a motion for summary judgment on all of Sparks’ remaining claims. The court first found that Sparks failed to establish a prima facie case of discriminatory discharge under the NJLAD because he did not provide evidence that Teva “sought similarly qualified individuals to fill his role after his termination… [T]he Court’s review of the record has not revealed any evidence – to show that Teva sought any individuals to fill his role, let alone individuals that were similarly qualified.” The court further dismissed counts two, three, seven, and eight because these common law claims were based on the same factual predicate as his NJLAD claim and sought the same relief. “Because Plaintiff ha[s] merely repackaged [his] NJLAD claim into [common law claims here], the NJLAD preempts the [common law] claim[s].” Even if not preempted, the claims failed on their merits. For breach of contract, Sparks’ employment was at-will, and he failed to demonstrate any enforceable contract. For breach of the implied covenant of good faith and fair dealing, no contract existed due to the at-will employment status. The negligence claim was barred by the New Jersey Workers’ Compensation Act. As for Sparks’ “Reverse-Veil Piercing and Alter Ego Liability Claim,” the court dismissed this claim because New Jersey does not recognize reverse veil piercing, and even if it did, Sparks failed to provide evidence to support such a claim. Finally, on Sparks’ ERISA-governed severance claim, the court ruled that Sparks failed to exhaust his administrative remedies before filing suit, as required by the plan: “[participants] must use and exhaust the Plan’s administrative claims and appeals procedure before bringing suit in either state or federal court[.]” Sparks relied on a demand letter from his counsel, but the court found that this letter did not constitute a formal appeal because it did not follow the instructions in the plan. Sparks also argued that “any pursuit of administrative remedies ha[s] been and will continue to be futile.” The court disagreed, noting that Sparks did not even allege his ERISA claim until his third amended complaint, “failed to set forth [any] evidence that the policy of denial was fixed such that the appeal would be automatically denied,” did not identify anything in the record “evidencing that Defendants or Plan Administrators failed to comply with their own policies in denying his claim,” and “has presented no testimony of plan administrators noting that administrative appeal would be futile.” Sparks’ only evidence was the letter from his counsel, which was insufficient because it “only broadly claimed that Plaintiff’s termination ‘resulted in significant repercussions’ including ‘the loss of benefits[.]’” As a result, defendants’ summary judgment motion was granted in its entirety.
Sixth Circuit
Strong v. Metropolitan Life Ins. Co., No. 25-12693, 2026 WL 1971254 (E.D. Mich. July 8, 2026) (Judge F. Kay Behm). This case revolves around Nicole C. Strong, who was employed by Ford Motor Company and was a participant in Ford’s ERISA-governed accidental death and dismemberment employee benefit plan. She died in 2023. Her death certificate indicated that her death was an “accident” due to “medication abuse,” described as “Diphenhydramine Toxicity.” Nicole’s husband, Ondrea Strong, submitted a claim to the plan’s insurer and claim administrator, Metropolitan Life Insurance Company, which denied it. MetLife found that Nicole ingested a lethal dose of Benadryl, and thus her death fell within an exclusion that “bar[s] coverage when loss results from a ‘voluntary’ ingestion of a medicine other than as prescribed by a physician.” MetLife rejected Ondrea’s argument that Nicole’s “blood levels…were not even toxic, much less lethal,” as well as his contention that its denial “was based on a demonstrable, mathematical error or a disregard of medical/scientific data.” Ondrea filed this action, and in this order the court addressed two issues that it had ordered the parties to brief after a status conference: (1) whether the case should be dismissed due to failure to exhaust administrative remedies; and (2) whether discovery was warranted. On the first issue, MetLife contended that “Plaintiff did not follow the claim exhaustion procedure set forth in the Summary Plan Description (SPD)[.]” However, the court noted that “the appeal process described in the SPD is not contained in the Plan documents contained in the Administrative Record.” Relying on the Sixth Circuit’s 2020 decision in Wallace v. Oakwood Healthcare, Inc., the court noted that “for a plan fiduciary to avail itself of this Court’s exhaustion requirement, its underlying plan document must – at minimum – detail its required internal appeal procedures.” Because Ondrea followed the plan’s claims procedure, the SPD did not control: “The fact that the claims review process on which Defendant relies is contained in the SPD does not render it applicable under the circumstances of this case because statements in the SPD are not plan terms.” Thus, MetLife’s exhaustion argument was rejected. As for Ondrea’s request for discovery, the court denied it, stating, “Discovery generally is not permitted in an ERISA case and a district court may ordinarily review only the administrative record.” The court recognized that exceptions existed in cases where there was a procedural challenge to the administrator’s decision, such as bias or lack of due process. However, here “the real focus of Plaintiff’s discovery request is on conducting depositions of the Administrator and the Macomb County Medical Examiner, both of whom Plaintiff alleges misread or misunderstood the testing data[.]” This was not connected to a “procedural challenge of an inherent conflict of interest,” and thus discovery on this topic was impermissible. The court finished by remanding the case to MetLife so Ondrea could pursue an administrative appeal. Meanwhile, the case will be stayed.
Pension Benefit Claims
Seventh Circuit
Dumke v. Chicago & Vicinity Laborers’ Dist. Council Pension Fund, No. 25 C 50328, 2026 WL 2017297 (N.D. Ill. July 13, 2026) (Judge Rebecca R. Pallmeyer). Jeffrey Dumke was a participant in a multiemployer pension plan administered by the Chicago & Vicinity Laborers’ District Council Pension Fund. He married the plaintiff in this case, Kristen Dumke, in 2005, and they divorced in 2015. The settlement agreement from their divorce, incorporated into the divorce judgment, awarded Kristen “50% of the portion of Jeff’s pension that was accrued during the course of the marriage with the Laborer’s Pension Fund pursuant to a QDRO to be prepared and entered by Jeff within 60 days.” Both Jeffrey and Kristen contacted the Fund about complying with its QDRO process, but the required documentation was never submitted. Later, Jeffrey married Elizabeth Fischer, and then died in March of 2024. After his death Kristen submitted to the Fund a draft QDRO, which she thought had already been submitted by Jeffrey’s attorney. In May of 2024 a state court entered the order nunc pro tunc to the date of divorce. The Fund, however, determined that this order was not a valid QDRO under ERISA and began paying benefits to Fischer. Kristen thus filed this action in state court against the Fund, Fischer, and Jeffrey’s estate, asserting four claims: “Counts I and II, against Jeffrey’s Estate, allege breaches of the Marital Settlement Agreement. Count III, against the Fund, asks the court for an injunction reversing the Fund’s determination that Kristen is not entitled to a portion of Jeffrey’s pension fund. Count IV, against Elizabeth, asks for imposition of a constructive trust on pension benefits to which Kristen believes she is entitled.” The Fund removed the case to federal court based on ERISA preemption, and both Kristen and the Fund filed cross-motions for summary judgment on Count III. The court ruled that the Fund’s refusal to treat the divorce order as a valid QDRO was mistaken. The court explained that Kristen had an equitable interest in a portion of Jeffrey’s pension benefits due to the marital settlement agreement, which was not negated by the absence of a pre-death QDRO. The court stated that ERISA does not require a QDRO to be in place before benefits become payable and that a QDRO can be obtained after a participant’s death. The court distinguished the Fund’s authorities by noting that Kristen “does not seek to establish ownership rights via a newly ordered QDRO; she seeks only to enforce rights she had already won in a court determination.” Furthermore, the Fund was on notice of Kristen’s interest shortly after Jeffrey’s death and should have segregated the disputed funds while the QDRO’s status was determined. As a result, the court granted Kristen’s motion and ordered the Fund to qualify her DRO and pay her the appropriate share of the benefits at issue. The remaining state-law claims were dismissed without prejudice to renewal in state court.
Pleading Issues & Procedure
First Circuit
Morales-Álvarez v. Intelvox LLC, No. CV 26-1256 (FAB), __ F. Supp. 3d __, 2026 WL 1983483 (D.P.R. July 1, 2026) (Judge Francisco A. Besosa). Erick Iván Morales-Álvarez was the Chief Financial Officer of Intelvox LLC from 2019 to 2026. After he was terminated, he initiated this action in Puerto Rico court, alleging claims for unjust dismissal under Puerto Rico Law 80, age discrimination under Puerto Rico Law 100, failure to compensate for accrued vacation pay and unpaid wages under Puerto Rico Law 180, and failure to authorize the release of his ERISA-governed 401(k) benefits. Intelvox removed the case to federal court, and, as we chronicled in our June 17, 2026 edition, was unsuccessful in moving to strike Morales’ jury trial demand regarding his Puerto Rico-based claims. (It was successful regarding his ERISA claim.) Now Morales seeks to amend his complaint to add claims against two new defendants, Erick Juan Morales-Díaz and Sila Margarita Otero-Tavarez. According to Morales, these two “obstructed Morales’s access to his 401(k) retirement savings account by refusing to sign an authorization releasing funds after Morales was fired.” He contends that “this interference entitles him to relief under Sections 502 and 510 of ERISA.” Morales also sought to increase the amount he requested for mental pain and suffering from $50,000 to $1 million. In response, Intelvox argued that Morales’ proposed amendments were unnecessary, futile, and that the increase in damages sought was “baseless and prejudicial.” Intelvox argued that the amendment would be futile because Morales-Díaz and Otero were not properly alleged to be plan administrators under ERISA. However, even though Morales cited ERISA Section 510, “the Court reads his allegations as fitting better under ERISA section 502(a)(1)(B),” which represented “a relatively straightforward denial of benefits to a plan participant.” Under this provision, the court found that Morales plausibly stated a claim for relief because the alleged refusal of Morales-Díaz and Otero to sign an authorization was interpreted as “exercising control over the administration of the benefits,” i.e., effectively denying his claim. As for Morales’ increase in claimed emotional damages, the court found that it “does not alter Intelvox’s defenses or litigation strategy enough to create substantial prejudice.” The court saw no danger of what Intelvox called “tactical prejudice,” and did not agree with Intelvox that Morales was required to buttress his increased demand with “supporting factual development… Federal notice pleading standards do not require a complaint to plead evidence.” As a result, the court granted Morales’ motion and he was allowed to file his first amended complaint.
Sixth Circuit
Azab v. General Motors LLC, No. 2:25-CV-12915, 2026 WL 1962580 (E.D. Mich. July 7, 2026) (Magistrate Judge Judge Curtis Ivy, Jr.). Plaintiff Mohammad Azab, proceeding pro se, brought this action against his former employer, General Motors LLC, alleging various violations of state and federal law. Azab was employed by GM from 2021 to 2024 as a senior software engineer. He contends that GM “made misrepresentations about the position that was offered to him, which induced him to leave his previous job and forfeit benefits.” These promised benefits included “$80,000 in unvested equity and long-term career stability.” Azab’s complaint includes claims for Title VII retaliation, retaliation under Michigan civil rights law, and wrongful discharge. Now he has moved to amend his complaint to add claims for violations of interference under ERISA Section 510 and the WARN Act, and to “clarify ‘chronology and dates.’” Meanwhile, GM has moved to dismiss, contending that Azab’s claims are barred by a separation agreement he signed when he left the company. The assigned magistrate judge examined whether Azab’s claims were barred by the separation agreement and whether his proposed amendments were futile. Addressing the agreement first, the court applied the Sixth Circuit’s five-part test from Adams v. Philip Morris, Inc. to determine if it was “knowingly and voluntarily executed.” The court found that the first four factors were met, but under the fifth factor, “the totality of the circumstances,” the court accepted Azab’s allegations that a material part of the contract was misrepresented, i.e., that “Defendant misrepresented the date through which it agreed to pay Plaintiff’s compensation and/or benefits through.” As a result, the release did not bar Azab’s claims. Next, the court turned to Azab’s proposed amendments. It found his ERISA Section 510 claim plausible, as he alleged that GM “intentionally chose an earlier separation date to prevent Plaintiff’s 401(k) from vesting and in doing so reduced his bonus.” GM did not address these allegations in its briefing, and thus the court ruled that Azab “has plausibly stated a claim upon which relief can be granted[.]” Similarly, the court found Azab’s WARN Act claim plausible, as he alleged that he did not receive the full value of wages and benefits promised. The court thus granted Azab’s motion for leave to amend his complaint and denied GM’s motion to dismiss as moot.
Eleventh Circuit
Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. v. HaloMD, Inc., No. 1:25-CV-2919-TWT, 2026 WL 2017291 (N.D. Ga. July 10, 2026) (Judge Thomas W. Thrash, Jr.). This is an unusual ERISA case in that a health insurer is the plaintiff. Blue Cross Blue Shield Healthcare Plan of Georgia, Inc., alleges that defendants, including HaloMD, Inc. and other medical providers, “conspired to defraud the Plaintiff through abuse of the [No Surprises Act (NSA)] Independent Dispute Resolution [(IDR)] process.” BCBS claims that defendants submitted “thousands of ineligible IDR disputes,” made false attestations of IDR eligibility, and manipulated the IDR process to overwhelm BCBS and IDR entities (IDREs), resulting in erroneous payments. BCBS specifically targeted HaloMD, which it claims solicited providers, used artificial intelligence to prepare claims, and then “flooded the IDR system with fraudulent disputes.” BCBS contends HaloMD was incentivized to do this because of its commission-based model, incentivizing it to maximize financial gains regardless of the merits of its claims. BCBS alleged both federal and state law claims in its complaint, including relief under the Racketeer Influenced and Corrupt Organizations Act (RICO) and ERISA, 29 U.S.C. § 1132(a)(3). Defendants moved to dismiss on various grounds, but the court started with jurisdiction. First, the court found that BCBS possessed Article III standing because it alleged financial injury caused by defendants. However, the court agreed with defendants that BCBS’ claims largely amounted to collateral attacks on IDR awards, which are not subject to judicial review under the NSA except in four specific circumstances outlined in the Federal Arbitration Act (FAA). The court concluded that BCBS’ claims were essentially end-runs around the IDR process, the results of which are statutorily protected from examination by the courts. These claims included the ERISA claim (which the NSA was incorporated within). The court noted that district courts have consistently concluded that the NSA does not provide a right to equitable injunctive or declaratory relief, regardless of ERISA’s civil enforcement scheme. The court found it “irrelevant” that ERISA provides a general private right of action because the NSA, which was enacted afterward, controls with its more specific language regarding challenging IDR awards. As a result, BCBS’ “only avenue to challenge the IDRE determination” was through vacatur. Next, the court ruled that it lacked personal jurisdiction over HaloMD because BCBS failed to establish that HaloMD “purposefully initiated contact with Georgia for the purpose of engaging in business in Georgia.” The court noted that HaloMD did not solicit business in Georgia or have significant contacts with the state. On the merits of BCBS’ vacatur claim, the court dismissed it because BCBS failed to meet the heightened pleading standards for “fraud and undue means.” The court determined that BCBS did not provide specific details about defendants’ alleged misrepresentations or how they misled the IDREs. Additionally, the court concluded that the IDREs did not exceed their authority, as they were empowered to make eligibility determinations under federal regulations. Finally, the court denied BCBS’ request for leave to amend the complaint, concluding that amendment would be futile: “[J]ustice is not served by prolonging the inevitable.”
Withdrawal Liability & Unpaid Contributions
Eighth Circuit
Board of Trustees of Iron Workers St. Louis Dist. Council Pension Fund Trust v. Barnhart Crane & Rigging Co., No. 25-1497, __ F.4th __, 2026 WL 2016237 (8th Cir. July 13, 2026) (Before Circuit Judges Colloton, Shepherd, and Erickson). The plaintiffs in this case are local iron workers unions and union fund trustees who allege that Barnhart Crane & Rigging Co. failed to make required contributions to the funds for work performed by its employees within the funds’ territorial jurisdiction. Plaintiffs alleged claims under ERISA and the Labor Management Relations Act (LMRA). Barnhart moved for summary judgment on Count 3, which related to Local 321, contending that it was not a signatory to the collective bargaining agreement with Local 321 and thus was not obligated to make contributions to any funds associated with Local 321. Barnhart also filed a motion to exclude the testimony of Bradley Soderstrom, a witness for the plaintiffs, “asserting Plaintiffs were attempting to use him as an expert witness despite not having disclosed him as such and arguing his opinions were based on unreliable methodology.” The district court granted Barnhart’s motion for partial summary judgment on Count 3. It also granted Barnhart’s motion to exclude Soderstrom’s testimony in part, noting that “excluding evidence is a harsh remedy” but finding it “warranted based on Plaintiffs’ reasons for failing to disclose Soderstrom and the prejudicial effect on Barnhart.” This ruling devastated plaintiffs’ case, and resulted in the court granting Barnhart summary judgment on the other three counts due to the lack of admissible evidence regarding plaintiffs’ damages. Plaintiffs appealed, challenging the exclusion of Soderstrom’s testimony and the grant of summary judgment. Addressing Soderstrom first, the Eighth Circuit affirmed the exclusion of his testimony. The appellate court noted that although the district court’s exclusion order “was based both on the fact that Plaintiffs failed to disclose him as an expert witness and the fact that his damages model was speculative,” plaintiffs only argued the disclosure issue on appeal. Plaintiffs appeal “does not offer any challenge to the district court’s conclusion regarding Soderstrom’s methodology. Accordingly, we affirm…on this basis alone[.]” Next, plaintiffs argued that Soderstrom’s testimony was unnecessary, and they could prove their damages without it, specifically pointing to Barnhart’s business records. The Eighth Circuit disagreed and concluded that plaintiffs failed to provide evidence from which damages could be assessed without expert testimony. Barnhart’s business records contained “voluminous data, in spreadsheet and remittance report form, that needs explanation for a jury to be able to discern whether it proves Plaintiffs’ entitlement to damages.” Thus, the court upheld the district court’s entry of summary judgment in Barnhart’s favor. Finally, plaintiffs challenged the district court’s award of attorneys’ fees to Barnhart, arguing that “the facts and procedural history of this case did not warrant an award of fees.” However, plaintiffs conceded in their briefing that the issue was not yet ripe for appeal because the district court had not set an amount for the fee award. Thus, the Eighth Circuit determined that the award was not a final and appealable order, and it lacked jurisdiction over the issue. Judge Erickson penned a concurrence in which he explained that even if the court had reached the issue of Soderstrom’s testimony, he would still affirm. Judge Erickson agreed with the district court that plaintiffs failed to disclose Soderstrom as an expert, his testimony was based on specialized knowledge, and “Plaintiffs’ failure to disclose him as an expert was neither harmless nor substantially justified.” As a result, “[t]he district court was within its discretion to exclude Soderstrom’s expert testimony and reports.”
D.C. Circuit
IAM Nat’l Pension Fund v. M&K Employee Solutions, LLC, No. 23-7146, __ F.4th __, 2026 WL 1958520 (D.C. Cir. July 7, 2026) (Before Circuit Judges Katsas, Rao, and Randolph). You may recall that this case resulted in the sole ERISA-related opinion by the Supreme Court in the just-finished October 2025 term. In that decision, the high court unanimously ruled that ERISA does not impose a statutory deadline for selecting actuarial assumptions when calculating withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA). In doing so, the court allowed the IAM National Pension Fund to use a discount rate determined in 2018 in assessing 2017 withdrawal liability for M&K Employee Solutions, LLC, a family of 28 truck dealerships. (For more details, read our summary of the decision in our May 27, 2026 edition.) This was not the only issue in the case, however. The parties filed cross-motions for summary judgment on several other issues, and the fund prevailed in a September 2023 decision, pursuant to which the district court awarded $13 million to the fund, representing principal, interest, and liquidated damages. In this appeal to the D.C. Circuit Court of Appeals, M&K challenged (1) the conclusion that one of its subsidiaries (ES Summit) owed certain delinquent contribution obligations, (2) the outstanding balance of another subsidiary’s (ES Alsip) withdrawal liability, and (3) the district court’s joint-and-several liability ruling. On the first issue, the appellate court reversed, finding that the fund’s complaint did not adequately plead the necessary elements to treat ES Summit as a “single employer” when combined with another M&K subsidiary, ES Northern Illinois. The court cited the National Labor Relations Board (NLRB) test, which considers whether two entities have “interrelated operations, common management, centralized control of labor relations, and common ownership.” The court expressed “doubts about whether the NLRB test is the right one here” because “the Board lacks any such authority over ERISA,” but “assume[d] without deciding that the NLRB standard applies.” Even under this relaxed standard, however, M&K prevailed because the two companies were “formally separate companies” and the fund only alleged one element of the NLRB test, common ownership. As for M&K’s second issue on appeal, the court affirmed the district court’s decision to allocate a $1.8 million partial payment to interest rather than principal, applying the default common-law United States Rule, which allows creditors to allocate payments to interest first unless otherwise agreed. M&K argued that “ERISA displaces the United States Rule,” citing three statutory provisions, but the court “fail[ed] to see how these provisions speak at all to the question whether a partial payment should be allocated to the withdrawal liability itself rather than to interest, much less speak with the requisite clarity to overcome a longstanding, settled background common-law rule.” However, the court reversed the district court’s decision to apply an increased interest rate retroactively, ruling that the trust agreement did not expressly authorize imposing new liabilities after the collective-bargaining agreement’s termination. The court emphasized, “Collective-bargaining agreements do not create obligations that outlive the agreement unless their terms expressly indicate otherwise.” The appellate court agreed with the district court that ES Alsip’s liability obligations continued post-termination, but the new interest rate “constituted a new liability impermissibly imposed after the collective-bargaining agreement had expired.” Finally, the court addressed joint-and- several liability. The court rejected the fund’s argument that this issue was moot because the judgment had been paid in full, noting that it was unclear who had paid what and thus allocation remained an issue. The court upheld some of the district court’s rulings on this issue, but reversed as to the two owners of ES Alsip, Chad and Jodi Boucher. The appellate court found genuine factual disputes regarding whether the Bouchers’ house-flipping operation constituted “a trade or business under common control with ES Alsip.” Thus, summary judgment was reversed as to their personal liability. The court thus affirmed in part and reversed in part, ensuring that this case will continue.