Packaging Corp. of Am. Thrift Plan for Hourly Emps. v. Langdon, No. 25-1859, __ F.4th __, 2026 WL 262954 (7th Cir. Feb. 2, 2026) (Before Circuit Judges Brennan, Lee, and Kolar)
ERISA, like many statutory schemes, is one that attempts to balance competing interests. It is designed to protect plan participants, which means honoring their desires in managing their benefits. However, ERISA is also designed to simplify and streamline plan management by giving administrators uncomplicated rules to follow.
So, what happens when these principles collide? What happens, for example, if a participant makes a decision – such as a benefit election or a beneficiary designation – that does not fully comply with the plan’s procedures? Do we honor that participant’s intent, to the extent it can be discerned, or do we strictly apply the plan’s rules to negate the choice?
Federal courts have tried to strike their own balance on this issue by applying the “substantial compliance” doctrine. Under this doctrine, a participant’s decision will be upheld, even if it does not fully comply with plan procedures, if the participant “substantially complied” with those procedures.
Of course, the devil is in the details. How much compliance is “substantial” compliance? And is this doctrine even consistent with Supreme Court jurisprudence in the first place? The Seventh Circuit confronted these issues in this week’s notable decision.
The case revolves around Carl Kleinfeldt, who was an employee of the Packaging Corporation of America (PCA) and a participant in the company’s Thrift Plan for Hourly Employees, a retirement plan governed by ERISA. The plan stated, “You should keep your beneficiary designation and your beneficiary’s address up to date. To do so, contact the PCA Benefits Center at [a designated phone number] or you can update your beneficiaries online.”
Initially, Kleinfeldt designated his wife, Dená Langdon, as the primary beneficiary of his retirement account. However, after their divorce in September 2022, Kleinfeldt attempted to remove Langdon as the beneficiary by sending a fax to PCA’s benefits center requesting that the plan “remove [his] former spouse” from his “health, vision[,] and dental insurance and as a beneficiary from [his] 401k, pension[,] and life insurance accounts.” PCA complied with regard to Kleinfeldt’s health, vision, and dental insurance, and changed Langdon’s status from “spouse” to “ex-spouse.” However, it did not remove Langdon as the primary beneficiary under the plan.
Kleinfeldt died on January 16, 2023, and the plan indicated that it intended to pay Langdon as the designated beneficiary. However, Kleinfeldt’s estate intervened, contending this was improper, and the funds were frozen. The plan subsequently filed this interpleader action, naming Langdon and the estate as the competing claimant defendants. The district court subsequently added Kleinfeldt’s sister, Terry Scholz, as a defendant because she was a potential contingent beneficiary. (Scholz passed away before the case was decided, so her estate stepped in to represent her interest.)
After the plan deposited the funds at issue with the court, the court dismissed it. Langdon and the Kleinfeldt estate then filed cross-motions for summary judgment, but the district court denied them both. Instead, the district court granted summary judgment sua sponte in favor of Scholz’s estate. The court ruled that Kleinfeldt had substantially complied with the plan’s requirements to remove Langdon as the beneficiary, which meant that Scholz was the proper beneficiary under the plan’s contingent beneficiary rules. (Your ERISA Watch covered this decision in our May 7, 2025 edition.)
Langdon appealed, and the Seventh Circuit issued this published opinion. The court addressed the standard of review first, noting “there is some question as to whether the Plan’s initial decision to distribute the retirement funds to Langdon means we should apply the arbitrary and capricious standard when deciding the merits.”
The court chose to apply the de novo standard of review, however, noting that the plan never made a final decision (“the Plan threw its arms in the air and filed this interpleader action”), and, more importantly, the case involved the application of the substantial compliance doctrine, which was an issue of law that the court was required to review de novo.
Next, the court addressed Langdon’s argument that the substantial doctrine test had been weakened by the Supreme Court’s 2009 decision in Kennedy v. Plan Administrator for DuPont Savings & Investment Plan. The court stated, “we have long recognized the doctrine of substantial compliance in ERISA cases” as a matter of federal common law, and it doubted that it should change course because of Kennedy.
The court acknowledged that Kennedy emphasized the importance of acting in accordance with plan documents, but here the plan administrator did not exercise its discretion, and instead filed an interpleader action which “[left] it up to the court.” As a result, “the need for the straightforward administration of plans and the avoidance of potential double liability – while central to the Supreme Court’s decision in Kennedy, are not implicated.” However, giving away the game, the court stated, “we think Langdon prevails either way,” and thus “we will assume without deciding the continued viability of the substantial compliance doctrine here.”
Turning to the merits, the Seventh Circuit observed that the substantial compliance test requires that “the insured (1) evidenced his intent to make the change and (2) attempted to effectuate the change by undertaking positive action which is for all practical purposes similar to the action required by the change of beneficiary provisions of the policy.”
The court found that the first element was “undeniably met here: Kleinfeldt’s fax unequivocally evidences his intent to make a change of beneficiary.” The fax was “a clear expression that he wanted Langdon removed from all of his benefit plans, including his retirement plan.”
However, the question of whether the fax was a satisfactory “positive action” was “a closer question and requires a deeper dive into our prior application of the doctrine.” The court examined several cases applying the doctrine and noted that in the cases finding substantial compliance “the plan participants took pains to follow the procedures the plan required, including obtaining the appropriate forms and even completing them to the extent they were able.”
Kleinfeldt’s estate argued that his fax was “for all practical purposes similar to” the procedures set forth in the plan documents. The court was unconvinced: “Kleinfeldt did not even attempt to utilize the proper procedures. Nowhere in the plan documents is the participant allowed to request a beneficiary change via fax.” The court found that the fax was “a method that deviates materially from the Plan’s terms” and therefore it “falls short of being ‘for all practical purposes similar to’ the procedures required by the plan documents[.]”
The court further noted that in his fax Kleinfeldt requested that the plan “fax [him] any necessary paperwork…that [he] may need to complete” to effectuate his beneficiary change, which suggested that “he himself understood that further steps may have been required to do so. Rather than following up with PCA, however, Kleinfeldt did nothing more.”
In short, the Seventh Circuit ruled that “Kleinfeldt did not substantially comply with the plan’s beneficiary-change requirements.” It reversed and remanded with instructions to enter judgment for Langdon, serving as a warning to all plan participants: follow the rules in designating your beneficiaries.
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Breach of Fiduciary Duty
Second Circuit
DeDyn v. Gintzler Graphics, Inc., No. 1:23-CV-1291-GWC, 2026 WL 221434 (W.D.N.Y. Jan. 28, 2026) (Judge Geoffrey W. Crawford). J. Patrick DeDyn, Jeffrey Erny, and Jeffrey Kasprzyk are current or former employees of Gintzler Graphics, Inc. who filed this putative class action against Gintzler and its parent company, Resource Label Group, challenging Gintzler’s pay practices and benefit plan administration. Plaintiffs alleged three causes of action, asserting violations of the Fair Labor Standards Act (FLSA), New York Labor Law § 191(1)(a), and ERISA. Plaintiffs moved for conditional certification of a FLSA collective action, defendants filed a motion to dismiss, and the assigned magistrate judge issued a report and recommendation (R&R) on both motions. The magistrate recommended that defendants’ motion be granted in full and plaintiffs’ motion be denied. Plaintiffs filed objections on which the court ruled in this order. The court adopted the R&R’s ruling that defendants’ changing of its pay schedule for manual workers from weekly to biweekly did not constitute a violation of the FLSA, and dismissed that claim with prejudice. However, it rejected the R&R’s ruling that plaintiffs improperly alleged a violation of Labor Law § 191(1)(a). That law requires employers to pay “manual workers” on a weekly basis. Defendants admitted that plaintiffs properly alleged they were “manual workers,” but contended there was no private right of action under the law. However, the court noted that after the R&R was issued, the New York legislature amended the law to add “new language [which] explicitly provides a private right of action for violations of § 191(1)(a)” and “explicitly applies to cases pending at the time of its enactment.” As a result, the court denied defendants’ motion to dismiss this claim. As for plaintiffs’ ERISA claim, they contended that defendants “violated §§ 404 and 406 of ERISA by failing to timely remit employees’ 401(k) contributions and improperly using those unremitted contributions to operate the business.” Defendants contended that this count was thinly pled and “cursory.” The court agreed with the R&R that plaintiffs “failed to allege sufficient factual matter to support their claims,” and upheld the dismissal of the ERISA count, but without prejudice, allowing plaintiffs to amend their complaint to plead their claim more specifically. The court also addressed defendants’ argument that the court should sever the ERISA claim from the other claims. Because the court was allowing the § 191(1)(a) claim to proceed, “it is not appropriate to sever the [ERISA] claim at this time.” However, the court ruled that defendants could “renew their request to sever the claims in a future motion.” Thus, the court granted defendants’ motion to dismiss in part, denied it in part, and denied plaintiffs’ motion for conditional certification as moot because of the dismissal of the FLSA claim.
Fourth Circuit
Carter v. Sentara Healthcare Fiduciary Committee, No. 2:25-CV-16, 2026 WL 252616 (E.D. Va. Jan. 30, 2026) (Judge Jamar K. Walker). Plaintiffs Tracey Carter and Bonny Davis are participants in the Sentara Health 403(b) Savings Plan, an ERISA-governed defined contribution retirement plan. In this action they allege that the Sentara Healthcare Fiduciary Committee and Sentara Health breached their fiduciary duties by imprudently managing a stable value option, the Guaranteed Interest Balance Contract (GIBC), in the plan. Defendants filed a motion for summary judgment and a motion seeking the exclusion of expert witness testimony. In its summary judgment motion, defendants argued that their conduct was prudent as a matter of law because they enlisted the services of an investment consultant, adopted the consultant’s recommendations, and held quarterly meetings. The court agreed that this “suggests that Sentara engaged in a generally prudent process” regarding the plan’s investments as a whole, but did not answer the question of whether the GIBC in particular was prudently managed. On the GIBC, plaintiffs contended that defendants did not regularly review its status, did not obtain requests for information or proposals from competitors, and “exclusively relied on a benchmark and peer group that fundamentally differed from the GIBC and were thus ‘ill-suited for meaningful evaluation[.]’” The court concluded that “genuine disputes remain regarding what a reasonably prudent monitoring process looks like for a stable value investment option like the GIBC,” “whether the conduct of the defendants satisfies that standard,” and “whether the defendants prudently followed [their monitoring] process for the GIBC.” As for defendants’ motion regarding plaintiffs’ experts, they challenged the qualifications of Matthew Eickman, arguing that he was not qualified to opine on appropriate benchmarks and peer groups for the GIBC. The court found that Eickman’s experience as a retirement plan investment advisor provided a sufficient basis for his opinions, and that any challenges to his credibility could be addressed through cross-examination. Defendants’ motion regarding Christian Toft, however, was partly successful. The court found that Toft was not qualified to render opinions on proper benchmarks and peer groups for the GIBC, as he lacked relevant experience and relied on Eickman’s opinions rather than his own analysis. The court thus limited Toft’s testimony to quantifying losses based on comparing the GIBC’s performance to competing products. Having ruled on defendants’ motions, the court then referred the parties to the assigned magistrate judge for a settlement conference, and ordered them to meet and confer to propose a trial schedule.
Peeler v. Bayada Home Health Care, Inc., No. 1:24-CV-00231-MR, 2026 WL 208630 (W.D.N.C. Jan. 27, 2026) (Judge Martin Reidinger). Donna Peeler and Kathleen Hanline are participants in Bayada Home Health Care, Inc.’s 401(k) plan. They filed this putative class action, individually and on behalf of the plan, alleging that Bayada and related defendants mismanaged the plan, resulting in financial losses due to excessive fees and investment underperformance. Plaintiffs asserted six causes of action: breach of fiduciary duty of prudence, breach of duty of loyalty, co-fiduciary liability, breach of duty to monitor, and two counts of engaging in prohibited transactions. Defendants filed a motion to dismiss. In this order the court granted the motion based on plaintiffs’ lack of standing and the implausibility of their claims. The court found that plaintiffs lacked standing to challenge the selection and monitoring of certain funds because they did not invest in those funds and failed to allege a non-speculative financial loss. Plaintiffs contended that they were not required to personally invest in each fund because suits brought under 29 U.S.C. § 1132(a)(2) are representative actions on behalf of the plan to recover losses suffered by the plan. However, the court, quoting the Supreme Court’s ruling in Thole v. U.S. Bank N.A., emphasized, “[t]here is no ERISA exception to Article III.” The court admitted that this case was different because it involved a defined contribution plan, not a defined benefit plan as in Thole, but cited the Second Circuit’s decision in Collins v. Northeast Grocery, Inc. (Your ERISA Watch’s case of the week in our August 27, 2025 edition), for the proposition that plaintiffs “must allege a non-speculative financial loss actually affecting, or imminently threatening to affect, their individual retirement accounts.” Plaintiffs could not do so here and thus they had no standing to assert breach of the fiduciary duty of prudence for “selection and monitoring.” The court also found that plaintiffs could not obtain equitable relief under this claim in any event because it was unclear how defendants had been “unjustly enriched” by their alleged conduct. As for plaintiffs’ recordkeeping fees claim, the court ruled that plaintiffs failed to state a plausible claim because the comparator plans they offered were not “meaningful” and their alleged similarity was belied by Form 5500s. The court also ruled that plaintiffs’ allegation that defendants “failed to solicit bids from other recordkeepers” was insufficient, by itself, to support a claim for imprudence. Plaintiffs’ claim based on advisory fees was rejected for the same reasons: “The Plaintiffs have failed to adequately allege that comparator plans offered similar services for less,” and thus could not “‘advance the [advisory fees] claim across the line from conceivable to plausible.’” The court further dismissed the claims for breach of fiduciary duty of loyalty and co-fiduciary liability, as they were not supported by independent facts beyond those alleged for imprudence. The breach of duty to monitor claim was dismissed because it was derivative of the dismissed imprudence claim. Finally, the court dismissed the prohibited transactions claims for lack of standing and failure to state a claim. The court found that “Plaintiffs’ allegations fail to draw a meaningful comparison between the advisory fees incurred by the Plan and the advisory fees incurred by the alleged comparator plans,” and furthermore, “the Plaintiffs nowhere allege that the value of their individual accounts declined because of these advisory fees.” The court also ruled that plaintiffs’ prohibited transactions allegations were “conclusory” because they “provided no factual basis to distinguish between ordinary compensation for services in the form of revenue-sharing payments and illicit kickbacks.” Thus, the court granted defendants’ motion to dismiss in full.
Fifth Circuit
Wilson v. Whole Food Market, Inc., No. 1:25-CV-00085-DAE, 2026 WL 196517 (W.D. Tex. Jan. 20, 2026) (Judge David Alan Ezra). The plaintiffs – Paul Wilson, Tyler Houston, and James Besterfield – are current and former Whole Foods employees who brought this class action against Whole Foods Market, Inc. and the Whole Foods Market, Inc. Benefits Administrative Committee, contending that Whole Foods’ imposition of a tobacco surcharge in its employee health plan violates ERISA. To avoid the surcharge, participants were allowed to enroll in a tobacco cessation program, but the surcharge was only removed prospectively, not retroactively. Plaintiffs allege that the wellness program is non-compliant with ERISA because it does not provide retroactive reimbursement and fails to provide proper notice to participants. They seek declaratory and injunctive relief, as well as other forms of equitable relief. Defendants filed a motion to dismiss, arguing that plaintiffs lacked standing and failed to state a claim. On the standing issue, defendants argued that the “alleged statutory violation underlying the Complaint is not the imposition of the tobacco surcharge, but rather that [Whole Foods] did not offer a retroactive refund of the surcharge once a participant completed the cessation program.” Thus, because plaintiffs did not actually participate in the program, they had not suffered an injury. The court disagreed, ruling that plaintiffs had standing because they alleged the surcharge is unlawful on its face due to non-compliance with regulatory requirements. It did not matter if they participated in the program; plaintiffs had “the right to not to be charged an illegal surcharge in the first instance.” The court rejected defendants’ standing argument regarding plaintiffs’ claim that they received insufficient notice on the same grounds: “Plaintiffs assert not that the failure to notify injured them but that the failure to notify in accordance with the statutory and regulatory requirements rendered the surcharge they paid unlawful. As already explained, Plaintiffs have standing to raise that challenge.” The court then turned to the merits. The court found that plaintiffs plausibly pled that the imposition of the tobacco surcharge violated ERISA because the plan did not provide a “full reward” for completing the wellness program. Instead, it only provided prospective relief in the form of lower future premiums. “The Court finds that to make available the ‘full reward’ to ‘all similarly situated individuals,’ a wellness program must provide retroactive reimbursements of all tobacco surcharges paid that Plan year.” This interpretation, the court ruled, was consistent with statutory and regulatory language. As for plaintiffs’ second claim, for breach of fiduciary duty, defendants contended that they were not acting as ERISA fiduciaries when they performed the challenged actions, and that plaintiffs did not allege a loss to the plan. Again, the court disagreed. The court noted that while decisions regarding the form or structure of a plan do not amount to fiduciary acts, plaintiffs’ allegations went beyond mere plan design by alleging that defendants engaged in discretionary decisions, such as depositing surcharge amounts into Whole Foods’ general account instead of in a plan trust account, failing to disclose information about the wellness program, and failing to supervise and monitor the plan to ensure compliance with ERISA. The court further ruled that plaintiffs alleged a cognizable loss to the plan by contending that defendants withheld surcharge amounts and deposited them into Whole Foods’ general accounts, earning interest and reducing their financial contributions to the plan. As a result, the court was satisfied that plaintiffs had properly alleged “at this stage of the case” that defendants’ conduct constituted a breach of fiduciary duty and prohibited transactions in violation of ERISA, and denied defendants’ motion in its entirety.
Seventh Circuit
Gardner-Keegan v. W.W. Grainger, Inc., No. 1:25-CV-5233, 2026 WL 194772 (N.D. Ill. Jan. 26, 2026) (Judge Mary M. Rowland). Plaintiffs Adrianne Gardner-Keegan, Scott A. Norman, and Alison Dela Riva, participants and beneficiaries of the W.W. Grainger, Inc. Retirement Savings Plan, filed this six-count action against Grainger and related defendants contending that they violated ERISA in their use of plan forfeitures. Like other similar plans, the Grainger plan is funded by wage withholding contributions from participants and employer profit-sharing contributions from Grainger, which vest over time. If a participant’s employment ends before vesting, Grainger’s contributions are forfeited. This plan differed from many others, however, because it specified that “Forfeiture Account amounts shall be utilized to pay reasonable administrative expenses of the Plan and to restore Accounts for a Plan Year, as directed by the Committee, and then (i) for Plan Years prior to the 2016 Plan Year, to increase the amount allocated as Company Profit Sharing Contributions for that Plan Year, (ii) beginning with the 2016 Plan Year, to offset Company Profit Sharing Contributions, and (iii) beginning with the 2021 Plan Year, to offset Company Contributions[.]” Plaintiffs alleged that from 2019 to 2023, “the Plan Committee did not utilize forfeitures to pay reasonable administrative expenses for the Plan but instead utilized forfeitures to offset Grainger’s profit-sharing contributions to the Plan,” thus violating the plan and breaching fiduciary duties to participants. Defendants filed a motion to dismiss in which it first argued that plaintiffs lacked standing because, under the plan, participants are responsible for administrative expenses. The court rejected this argument, agreeing with plaintiffs that the plan was unambiguous, and that the provision directing defendants to use forfeitures to pay reasonable administrative expenses governed over any other plan language suggesting the contrary. “By alleging that the Plan Committee disregarded this language – resulting in the Plan and its participants being stuck with the bill – Plaintiffs have sufficiently alleged an Article III injury.” On the merits, the court ruled that plaintiffs plausibly pled that the committee breached its fiduciary duty of loyalty by failing to abide by plan terms. The court acknowledged that many courts had ruled against plaintiffs on similar forfeiture claims, but stressed that this case was different because the operative plan language “does not give discretion as to how the Plan Committee can allocate forfeitures. It instead mandates the Plan Committee to utilize forfeitures to pay reasonable administrative expenses (Step 1) before offsetting employer contributions (Step 2).” The court noted that defendants’ interpretation might be “in some situations…in the best interests of Plan participants (and thus not a breach of loyalty),” but “[w]hether this situation occurred in the present case, however, is unfit for resolution at this stage in the proceedings.” The court further ruled that plaintiffs plausibly pled a breach of the duty of prudence by alleging that the committee used “an imprudent and flawed process in determining how forfeitures would be allocated,” and that plaintiffs had plausibly alleged that the committee’s breach harmed the plan because it “reduce[d] the funds available to participants for distribution and/or investing[.]” Plaintiffs’ winning streak ended with their prohibited transactions claims, however. The court agreed with defendants that plaintiffs “have not identified any ‘transaction’ within the meaning of 29 U.S.C. § 1106.” Instead, “forfeitures remained in the Plan and were simply shifted to other employees in the form of contributions… Movement of funds within a plan ‘does not fit neatly within the plain meaning of ‘transaction.’’” Indeed, the court stated that “Plaintiffs’ prohibited transaction theory yields absurd implications” because it “seems to classify any intra-plan transfer of funds to offset employer contributions – even if expressly permitted in a plan – as a violation of 29 U.S.C. § 1106. The broad reach of Plaintiffs’ theory is untenable.” As a result, the court granted defendants’ motion to dismiss the prohibited transaction claims. The remainder of plaintiffs’ claims survived, however, and the court set a status conference for February 4 to discuss next steps in the case.
Ninth Circuit
Moran v. ESOP Committee of the Aluminum Precision Products, Inc. Employee Stock Ownership Plan, No. SACV 24-00642-MWF (ADSx), 2026 WL 235573 (C.D. Cal. Jan. 28, 2026) (Judge Michael W. Fitzgerald). The Aluminum Precision Products, Inc. (APP) Employee Stock Ownership Plan (ESOP) was established in 2009 to provide retirement benefits to employees. The ESOP holds primarily APP stock but also maintains an “Other Investments Account” (OIA) consisting of non-APP stock assets. The plan purchased APP stock via a loan in 2011 and 2012, which was paid off by 2017 using dividends and cash contributions. Since then, these contributions have accumulated in the OIA, which now represents about 20-25% of the plan’s total assets. In this action plaintiff Gustavo Moran alleges that from 2018 to 2021 the plan committee invested the OIA assets in a money market fund and a short-term U.S. Treasury bond fund, significantly reducing investment returns for the participants. Moran further contends that the committee intentionally kept the OIA balance liquid for self-serving reasons, as the company wanted to “use the OIA has a backup reserve to satisfy its long-term liability to repurchase shares from departing participants.” Moran brought two claims under ERISA: breach of the fiduciary duty of prudence in violation of 29 U.S.C. § 1104(a)(1), and a prohibited transaction in violation of 29 U.S.C. § 1106(a). The committee filed a motion for judgment on the pleadings, which the court ruled on in this order. The committee argued first that ERISA’s statutory exemption from diversification for ESOPs created a complete bar to the duty of prudence claim. However, the court noted that Moran was challenging the investment of the OIA assets within the ESOP, not the ESOP as a whole. The court observed that the issue of whether the statutory exemption applied to non-employer assets within an ESOP was one that the Ninth Circuit had not addressed, “and district courts appear to have reached divergent conclusions.” Ultimately, the court concluded that the “plain language of the statute” was “relatively clear” and held that ERISA “does not purport to exempt the management of other assets from prudence review simply because those assets are held within an ESOP.” As a result, the court turned to the merits of Moran’s claim, and ruled that his allegations were sufficiently specific: “Here, Plaintiff has done more than allege that Defendant should have pursued ‘higher returns’ or ‘riskier assets.’ Plaintiff alleges an objective ‘mismatch’ between the Plan’s assets and its purpose as a retirement plan.” Moran also “points to relevant comparators, alleging that the APP ESOP holds 100 times more cash equivalents than the median cash holdings of comparator ESOP plans[.]” The court ruled that this “vast disparity [between plans] supports a reasonable inference of a lack of prudence.” The committee argued that plan language gave it the authority to invest OIA assets as it saw fit, but the court ruled that this did not foreclose a prudence claim, and in any event “the duty of prudence trumps the instructions of a plan document.” As for Moran’s prohibited transaction claim, the committee argued that its investment strategy was not a “transaction,” and furthermore it was “not for an improper purpose.” The court ruled that Moran had sufficiently specified investment activity by the OIA, including “an alleged 2021 reallocation in which Defendant moved approximately half of the OIA from a money market fund into a short-term treasury fund…such affirmative purchases suffice to satisfy the ‘transaction’ component of a § 1106(a) claim[.]” Furthermore, Moran had identified an improper purpose, i.e., the “reallocation was for Defendant’s ‘use’ of the OIA for the benefit of APP and APP’s repurchase obligations.” The committee argued that repurchasing shares was not “prohibited” because, through repurchasing, the OIA funds would be used to pay benefits. However, the court ruled that this was not enough: “Plaintiff here has plausibly alleged that the primary purpose of the 2021 transaction was to serve APP’s interest in liquidity rather than the participants’ interest in long-term growth.” Thus, the problem was not that the plan had a liquid reserve or cash buffer, but that the committee “engage[d] in affirmative investment transactions to create an allegedly excessive buffer for the employer’s benefit. At this stage, those allegations are sufficient to state a claim under § 1106(a)(1)(D).” With that, the court denied the committee’s motion for judgment on the pleadings in its entirety.
Class Actions
Third Circuit
Bennett v. Schnader Harrison Segal & Lewis LLP, No. 2:24-CV-00592-JMY, 2026 WL 202548 (E.D. Pa. Jan. 22, 2026) (Judge John M. Younge). In this case Jo Bennett, an attorney, sued her defunct law firm on behalf of a class of employees, alleging numerous violations of ERISA in the firm’s administration of its 401(k) benefit plan. In Your ERISA Watch’s July 31, 2024 edition, we detailed the judge’s order in the case denying defendants’ motion to dismiss, and since then the parties have negotiated and reached a settlement which was presented to the court. Here, the court granted final approval of the class action settlement, which included certifying the class for settlement purposes, approving attorney’s fees and expenses, and granting a class representative service award. The court determined that the settlement, which included a monetary component of $675,000, representing approximately 68% of the maximum potential recovery, and non-monetary benefits, such as tax-favored treatment of distributions through a “Special SubTrust,” was fair, reasonable, and adequate. The court also considered the Third Circuit’s Girsh and Prudential factors, which include the complexity and duration of the litigation, the reaction of the class to the settlement, and the risks of establishing liability and damages. The court found that the settlement was reasonable given the complexity of ERISA litigation and the potential risks and costs of continued litigation. The plan of allocation was approved, providing for a pro rata distribution of the net settlement fund based on the losses in class members’ accounts. The court also approved the requested attorney’s fees, which were one-third of the settlement fund, and reimbursement of expenses totaling $7,650.11. A service award of $10,000 was granted to Bennett as class representative. The court thus entered judgment, ordered the case dismissed, and retained jurisdiction over the implementation and enforcement of the settlement agreement.
Tamburrino v. United Healthcare Ins. Co., No. 21-12766 (SDW) (LDW), 2026 WL 234155 (D.N.J. Jan. 28, 2026) (Judge Susan D. Wigenton). In 2018 plaintiff Barbara Williams underwent post-mastectomy delayed bilateral breast reconstruction with deep inferior epigastric perforator (“DIEP”) flap microsurgery. In this action Williams alleges that defendant United Healthcare Insurance Company denied her claim “because of its application of a denial policy that relies on inapplicable Medicare billing and coding guidelines. Specifically, Plaintiff contends that Defendant relied on Medicare billing and coding guidelines, rather than using HCPCS S2068, the billing code created for DIEP flap microsurgery.” Williams’ operative complaint alleges three claims under ERISA: one for wrongful denial of benefits under 29 U.S.C. § 1132(a)(1)(B), and two for equitable relief under 29 U.S.C. § 1132(a)(3). Williams filed a motion for class certification on which the court ruled in this order. The court evaluated the motion under Federal Rule of Civil Procedure 23, which imposes numerosity, commonality, typicality, and adequacy requirements. The court ruled that the numerosity requirement was met because United did not dispute that the potential number of plaintiffs exceeded 40. However, the court found that the commonality requirement was not satisfied because of variation in benefit plan language among the members of the proposed class. The court noted that some plan language required an abuse of discretion standard of review while some language would result in de novo review. As a result, “individualized, fact-specific” inquiries would be required, thus defeating her proposed class. “[T]he question of which standard of review applies to the members’ plan cannot be resolved on a class-wide basis and as such, Plaintiff fails to satisfy the commonality requirement.” As for typicality, the court noted that the variety of limitation periods in members’ plans could render some claims untimely. “Based on the sample claims and thousands of putative class members, it is likely that the numerous class members with untimely claims could render Plaintiff’s timely claims atypical.” Regarding adequacy, the court noted “significant concerns” about Williams’ ability to serve as a class representative, citing “sworn deposition testimony where Plaintiff expressed doubts or an unwillingness to serve as a class representative.” Furthermore, the remedy she sought, reprocessing of claims, “may be harmful to some class members as they could be worse off financially while providers may be better off financially.” The court did not make definitive rulings on these other elements, however, and relied on Williams’ failure to satisfy the commonality requirement to deny her motion for class certification.
Fourth Circuit
Alford v. The NFL Player Disability & Survivor Benefit Plan, No. 1:23-CV-00358-JRR, 2026 WL 216349 (D. Md. Jan. 28, 2026) (Judge Julie R. Rubin). In this closely watched case, former players of the National Football League have brought numerous claims under ERISA against the league’s disability benefit plan and its review board alleging wrongful denial of benefits, failure to provide adequate notice of denial, denial of the right to a full and fair review, and breaches of fiduciary duties. The players argue that defendants “have rigged the claims process against those in whose best interests they are supposed to be administering the Plan” by engaging in practices that unfairly disadvantage applicants for disability benefits, including failing to consider all evidence, misinforming applicants, and employing financially conflicted physicians. (The players’ claims are supported in large part by the findings made by the district court in Cloud v. Bert Bell/Pete Rozelle NFL Player Ret. Plan. In that case the plan eventually prevailed at the Fifth Circuit, although that court “commend[ed]” the district court for “expos[ing] the disturbing lack of safeguards to ensure fair and meaningful review of disability claims brought by former players who suffered incapacitating on-the-field injuries, including severe head trauma,” and for “chronicling a lopsided system aggressively stacked against disabled players.”) The players survived defendants’ motion to dismiss in March of 2024 (as we detailed in our March 27, 2024 edition), and in September of 2024 the players filed a motion for class certification. The players sought to certify a class of all plan participants who filed applications for disability benefits between August 1, 1970, and the date of class certification, and proposed five subclasses based on different types of disability benefits and adverse determinations. In this ruling the court denied the players’ motion. As in every class action, the court focused on whether plaintiffs met Federal Rule of Civil Procedure 23’s requirements of numerosity, commonality, typicality, and adequacy of representation, and concluded that plaintiffs could not satisfy the Rule’s commonality and typicality requirements. On commonality, the court noted that in the Fourth Circuit, “[a]llegations of generalized policies are not usually sufficient for the purposes of class certification,” and thus courts “are skeptical” when plaintiffs “rely on nebulous references to ‘systemic failures’ or ‘systemic deficiencies’ to satisfy commonality.” The players admitted that any particular plaintiff might be “unaffected by one or more of the policies and practices at issue,” but contended that “Defendants’ panoply of practices and policies steeply tilted the playing field against benefits applicants and amounted, in their totality, to objectively unreasonable conduct.” This was not enough for the court, which agreed with defendants that the players had not alleged “a uniformly-applied or well-defined common practice that affected (or affects) each member of the proposed class[.]” The court stated that each player’s claim would ordinarily involve “a highly individualized assessment,” and thus the class could not proceed without “some common thread or ‘glue’ (such as a uniform or common application of a policy) to tie ‘those decisions together in a way that suggests that they can productively be litigated all at once.’” The court also noted that the proposed class reached back to 1970 and thus raised questions about how common the players’ claims could be given the various plan changes and legal precedents that occurred during that lengthy time period. As for Rule 23’s typicality requirement, the court held that the players “fail to show that their claims are typical of putative class members’ claims” because “Plaintiffs have not persuaded the court that their claims arising from this overarching policy are typical of the claims of class members from decades ago, asserting their own unique medical conditions and applications, under different Plan terms.” The court was further unconvinced that the players’ claims “‘arise from the same factual nexus and are based on the same legal theories as’ those of the proposed class members.” As a result, the court denied the players’ motion for class certification.
Franklin v. Duke Univ., No. 1:23-CV-833, 2026 WL 191142 (M.D.N.C. Jan. 26, 2026) (Judge Catherine C. Eagles). This is a class action brought by Joy G. Franklin alleging that Duke University and related defendants violated ERISA by using outdated and unreasonable actuarial equivalency formulas which resulted in reduced benefits for participants in Duke’s pension plan. Specifically, Franklin claimed that this conduct violated ERISA’s actuarial equivalence requirement and anti-forfeiture rules, and breached fiduciary duties. Defendants responded with a motion in which it sought to dismiss Franklin’s Section 1132(a)(3) claim and/or compel arbitration of both her individual and class claims. As Your ERISA Watch detailed in our March 13, 2024 edition, the district court denied defendants’ motion, ruling that Franklin had standing to bring her claim and that the unilaterally added arbitration provision in the plan was unenforceable. (The district court subsequently denied defendants’ motion to dismiss Franklin’s Section 1132(a)(2) claim as well.) Defendants appealed to the Fourth Circuit on the arbitration issue, and in September of 2025, while that appeal was pending, the parties reached a settlement. The Fourth Circuit agreed to remand the case back to the district court for settlement approval proceedings. Notice was given to the class, and no objections were raised. A final fairness hearing was held on January 21, 2026, and in this order the court granted final approval of the settlement. The settlement class was defined as participants and beneficiaries of Duke’s retirement plan who began receiving benefits between September 29, 2017, and July 1, 2023, and were receiving certain types of annuities. The proposed settlement awarded the class roughly 17% of the calculated class-wide damages, which the court admitted was “marginally lower than similar ERISA cases[.]” However, the court also acknowledged that “the plaintiff here faces unusually strong headwinds if litigation continues” because recent precedent “may have altered the analysis of the arbitration provision at issue in the defendants’ pending appeal.” Furthermore, “plaintiff could not be certain of success on the merits, given the complex and expert-dependent nature of ERISA cases in general and actuarial equivalence cases in particular.” The court noted that an independent fiduciary had reviewed and approved the settlement terms. The court marched throughout the requirements of Federal Rule of Civil Procedure 23, including numerosity, commonality, typicality, and adequacy of representation, and found all were satisfied. The court found the settlement fair and reasonable, and noted that it was reached through arm’s length negotiations with the assistance of an experienced ERISA mediator. The court thus granted final certification of the class and approval of the class action settlement, finding it in the best interests of the class members. The court retained jurisdiction over the settlement and dismissed the operative complaint with prejudice.
Disability Benefit Claims
Sixth Circuit
Robinette v. Appalachian Regional Healthcare, Inc., No. 6:26-CV-22-REW-EBA, 2026 WL 252992 (E.D. Ky. Jan. 30, 2026) (Judge Robert E. Wier). Dayna Suzanne Robinette stopped working as a ward clerk for Appalachian Regional Healthcare, Inc. (ARH) in 2023 due to chronic pain from congenital left hip dysplasia and degenerative lumbar spine disease. She applied for disability retirement benefits under ARH’s pension plan, supported by a letter from her treating provider. The provider stated that Robinette “was born with congenital hip dysplasia, was born without a hip, and had surgery when she was eight years old to try to help build a hip.” The provider further attested that Robinette had “progressive left hip joint pain and lower back pain due to a marked lower extremity deformity,” and “faces ‘ongoing pain’ that is ‘progressively worse.’” The plan’s first medical reviewer “acknowledged Robinette’s severe hip deformity and osteoarthritis but concluded that she was not ‘Totally Disabled’ under the Plan, suggesting she could work with restrictions.” On appeal, the plan arranged an independent medical examination (IME) which concluded that Robinette “could work in a sedentary position with adequate pain control.” As a result, the plan denied Robinette’s claim and she initiated this action for unlawful denial of benefits under ERISA. Robinette filed a motion for judgment which was the subject of this order. The court began with the standard of review; both parties agreed that the plan granted discretionary authority to the review committee, so the court employed the arbitrary and capricious standard. Robinette advanced three arguments in support of her motion: “First, she argues that the Committee applied an incorrect standard of disability in making the disability determination… Second, she claims the Committee’s reliance on [the IME] opinion in reaching its decision to deny benefits was arbitrary and capricious… Third, she contends that the medical evidence provides compelling support that she is ‘Totally Disabled’ as provided in the Plan.” Addressing the first argument, the court ruled that the committee reasonably interpreted the plan definition of disability, and that Robinette’s contention that the definition was ambiguous was defeated by the standard of review, which gave the committee discretion to interpret the provision. On her second and third arguments, the court agreed, however. The court found that the IME reviewer “plainly did not review or have access to the full record,” conditioned his conclusion on “adequate pain management,” which was not reflected in the record, and his report “has glaring internal inconsistence and a stark logic deficit.” The court faulted the reviewer’s reference to potential hip replacement because “that prospective possibility hardly speaks to Robinette’s condition at the time of the claim or denial,” and furthermore he “denies any reference to such surgery in any of the medical records ‘available.’” These contradictions, according to the court, “will not do, even in the forgiving arbitrary and capricious world.” The court also criticized the medical reviewer supporting the committee’s initial decision, which was a “documents-only review” that “ultimately lands on a work ability unsupported by the record and cites only a job that plainly involves duties (e.g., bending) that exceed Robinette’s capacities[.]” As a result, the court granted Robinette’s motion, and chose to award her benefits rather than remand because she was “clearly entitled to benefits.” The court further authorized Robinette to seek “reasonable attorney’s fees and costs under 29 U.S.C. § 1132(g) by timely post-judgment motion[.]”
ERISA Preemption
Second Circuit
Doolittle v. Hartford Fin. Servs. Grp., Inc., No. 1:25-CV-00148 (BKS/TWD), 2026 WL 266009 (N.D.N.Y. Feb. 2, 2026) (Judge Brenda K. Sannes). Micky R. Doolittle brought this pro se action against Hartford Life and Accident Insurance Company alleging that Hartford unlawfully underpaid his long-term disability benefits. The dispute stems from Doolittle’s Social Security disability benefit award. Before he received that award, Doolittle agreed to receive unreduced benefits from Hartford with the understanding that the award was an offset under Hartford’s policy and he would have to pay Hartford back if he received the award. Doolittle subsequently received a retroactive Social Security disability check for $31,000, and Hartford requested reimbursement. Doolittle contends that he entered into a verbal agreement with a Hartford representative in which he would pay $10,000 to settle the overpayment, and subsequently sent a check for $10,000, which Hartford cashed. However, Hartford allegedly stopped paying benefits anyway, presumably to recover the remainder of the overpayment. Doolittle filed a complaint in state court alleging two state law causes of action, and last year Hartford moved to dismiss. As we chronicled in our September 17, 2025 issue, the court granted Hartford’s motion, ruling that Doolittle’s two claims were preempted by ERISA. Doolittle amended his complaint, and Hartford moved to dismiss again. In this order, the court granted Hartford’s motion again for the very same reasons. Doolittle asserted the same two state law causes of action in his new complaint – breach of contract and bad faith – and thus the court again ruled that these claims were preempted. However, the court ruled that due to the limited facts before it, it “cannot conclude as a matter of law that Plaintiff does not have a cause of action under Section 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B).” As a result, the court granted Hartford’s motion to dismiss Doolittle’s state law claims, but allowed him to pursue a federal claim under Section 502(a)(1)(B).
Third Circuit
Kirmser v. Unity Bancorp, Inc., No. 24-10663 (MAS) (TJB), 2026 WL 265476 (D.N.J. Feb. 2, 2026) (Judge Michael A. Shipp). Michelle S. Kirmser was employed by Unity Bank and was a participant in the Bank’s Executive Life Insurance Plan. The plan stated that a participant’s rights would cease if terminated for cause, if employment ended before early retirement age for reasons other than disability, or if the participant became gainfully employed elsewhere after terminating due to disability. Kirmser alleges she became disabled in 2023 and that her employment was terminated after reaching early retirement age due to disability, not for cause, and thus she was entitled to continued coverage under the life insurance plan. Kirmser also challenges her payments under the Bank’s executive long-term disability (LTD) benefit plan. Kirmser contends the Bank informed her that her premiums were paid in a manner that would not subject her benefits to taxation. However, after becoming disabled and receiving LTD benefits, Kirmser discovered the income was reported as taxable. Kirmser thus filed this action against three related Bank defendants, alleging (1) declaratory judgment under ERISA, (2) breach of contract, (3) breach of the covenant of good faith and fair dealing, (4) promissory estoppel, and (5) misrepresentation. Defendants moved to dismiss. First, defendants argued that the Bank’s holding company was an improper defendant because it did not play any role in controlling the plan or its administration. The court agreed and dismissed the holding company. The court then addressed the merits of Kirmser’s claims. In her first claim, Kirmser sought a declaratory judgment that she was a participant in the life insurance plan, but the court dismissed this claim sua sponte for lack of subject matter jurisdiction because Kirmser did not demonstrate a “real and immediate” threat of future harm. The court acknowledged that although Kirmser “alleges a theoretical future harm – that her beneficiaries would not recover any money upon a claim made after her death – Plaintiff has not otherwise alleged that she or her beneficiaries face an immediate threat of this occurring absent a declaration from this Court or that any purported limitations period is set to expire.” The court allowed Kirmser an opportunity to amend her complaint “to bolster allegations related to the threat of imminent harm she may face.” As for Kirmser’s state law claims, which all addressed the taxability of her benefits under the LTD plan, the court ruled that they were preempted by ERISA. Kirmser contended that these claims “do not seek benefits under any ERISA plan,” but instead “ask only that the Court require [Unity] to make good on various representations that were made to [P]laintiff[.]” However, the court ruled that her claims “clearly require an analysis of the EX LTD Plan itself, and its administration, to discern the responsibility for paying premiums for coverage, and thus, whether Plaintiff should be taxed on the EX LTD Benefits as she receives them.” Thus, these claims were preempted and dismissed. As a result, the court granted defendants’ motion to dismiss in its entirety.
Exhaustion of Administrative Remedies
Eleventh Circuit
Bolton v. Inland Fresh Seafood Corp. of Am., Inc., No. 24-10084, __ F.4th __, 2026 WL 205635 (11th Cir. Jan. 27, 2026). In our October 22, 2025 edition we reported on the Eleventh Circuit’s published opinion in this case in which that court once again adhered to its 40-year-old rule that plaintiffs must “exhaust,” i.e., fully appeal, all their ERISA claims – even statutory claims, such as breach of fiduciary duty or prohibited transactions – before they can file a civil action in federal court. As the court admitted, its rule is at odds with seven other circuits, which have all held there is no exhaustion requirement under ERISA for statutory claims. (Only the Seventh Circuit agrees, and its rule is more forgiving.) The judges on the panel were clearly not thrilled with Circuit precedent, so two of them (Adalberto Jordan and Jill Pryor) issued a concurrence in which they “propose[d] that we convene en banc to consider overruling” the Circuit’s outlier rule. Lo and behold, three months later the full court issued this order granting their wish and vacating the panel’s October decision. The Circuit will now reconsider the case and decide whether to jettison its idiosyncratic exhaustion rule.
Medical Benefit Claims
Ninth Circuit
R.R. v. California Physicians’ Service, No. 24-6337, __ F. App’x __, 2026 WL 207507 (9th Cir. Jan. 27, 2026) (Before Circuit Judges Paez, Bea, and Forrest). Plaintiffs R.R. and his minor son E.R. brought this action challenging defendant Blue Shield of California’s denials of their claims for reimbursement for E.R.’s treatment at a mental health residential treatment center. Although the ERISA-governed plan insured and administered by Blue Shield covered residential treatment, Blue Shield denied plaintiffs’ claims because it concluded that E.R.’s residential treatment was not medically necessary under its clinical guidelines. Plaintiffs thus filed this action under 29 U.S.C. § 1132(a)(1)(B) seeking recovery of benefits, and the case was decided on summary judgment proceedings. The district court acknowledged that there “is no doubt that E.R. has a serious psychiatric condition and has suffered substantially from it, as has his family,” but in the end granted summary judgment to Blue Shield, ruling that its decision was not an abuse of discretion. (Your ERISA Watch covered this ruling in our August 21, 2024 edition.) Plaintiffs appealed, and in this unpublished decision the Ninth Circuit affirmed. The court agreed with the district court that the proper standard of review was abuse of discretion because the plan authorized Blue Shield to interpret its provisions and determine eligibility for benefits. The court nominally tempered this deference with skepticism because Blue Shield “acts as both the administrator that decides claims and the insurer that pays benefits” and thus “has a conflict of interest.” However, plaintiffs did not offer evidence that this conflict of interest affected the benefits decision. Thus, Blue Shield’s use of an independent physician reviewer, “combined with Plaintiffs’ failure to meet their burden of production, makes Blue Shield’s conflict ‘less important’ to our analysis, ‘perhaps to the vanishing point.’” The court then turned to the merits, determining that Blue Shield did not abuse its discretion in determining that E.R.’s residential treatment was not “medically necessary” under the terms of the plan. The court ruled that Blue Shield properly used its Magellan Care Guidelines in interpreting medical necessity because they are “nationally recognized” and “widely used.” The court further ruled that Blue Shield did not abuse its discretion in determining that E.R. did not meet specific criteria under these guidelines. Plaintiffs argued against Blue Shield’s reliance on the treatment center’s records, claiming they were based on E.R.’s self-reports, which were not credible. However, the court found it was not an abuse of discretion for Blue Shield to consider these records, as “they were the most contemporaneous reports of E.R.’s mental state” and “reflect the judgment of independent clinicians.” Plaintiffs also contended that Blue Shield failed to explain why it reached a different conclusion from E.R.’s treating physicians and parents, but the court noted that administrators are not required to accord special weight to the opinions of a claimant’s physician, and furthermore those entreaties post-dated E.R.’s admission and did not address the guidelines at issue. The court further found that Blue Shield complied with ERISA’s procedural rules and that it did not “present a new rationale to the district court that was not presented to the claimant…during the administrative process.” Instead, the court stated, “There is a difference between offering a new rationale,” which is forbidden, and “offering new evidence to bolster an existing rationale,” which is what Blue Shield did: “[A]n administrator may cite evidence in litigation that it had not cited during the administrative process, so long as that evidence supports the same underlying legal theory.” As a result, the Ninth Circuit affirmed the decision below in its entirety. Judge Richard A. Paez dissented, arguing that the majority misapplied the standard of review because Blue Shield’s conflict of interest required more skepticism. Judge Paez further argued that Blue Shield failed to credit plaintiffs’ reliable evidence and did not engage in a meaningful dialogue with plaintiffs. Specifically, Blue Shield did not engage with the arguments or evidence presented by plaintiffs; “Indeed, the final denial letter either misstated or ignored the contents of Plaintiffs’ internal appeal.” In short, Judge Paez concluded that Blue Shield was entitled to less deference because of its conduct, and thus he “would hold that Blue Shield abused its discretion. At minimum, I would remand to the district court to reconsider Plaintiffs’ claim for benefits under a less-deferential standard of review.”
Pension Benefit Claims
Ninth Circuit
Woo v. Kaiser Foundation Health Plan Inc., No. 23-CV-05063-RFL, 2026 WL 194578 (N.D. Cal. Jan. 26, 2026) (Judge Rita F. Lin). Plaintiff Sarah Woo has been employed by Kaiser Foundation Hospitals since 2002. In 2009, Woo transferred from Kaiser’s Southern Region to its Northern Region. Upon transfer, she received confirmation of her eligibility to participate in Kaiser’s Supplemental Retirement Plan, an after-tax component of the Kaiser Permanente Employees Pension Plan Supplement. Woo enrolled, and over the next decade made voluntary contributions from her paychecks. During this time Kaiser confirmed her eligibility multiple times in both phone calls and letters. However, in December 2020, Kaiser informed Woo that it had made a mistake. Woo was in fact ineligible to participate in the plan because “her transfer to Northern California had brought her outside the Plan’s definition of Eligible Employee.” Woo’s internal appeals were unsuccessful, and thus she brought this action, seeking equitable relief pursuant to ERISA Section 1132(a)(3) under an estoppel theory. The parties filed cross-motions for judgment which were decided in this order. The court noted that estoppel claims under ERISA require “(1) a material misrepresentation; (2) reasonable and detrimental reliance on the representation; (3) extraordinary circumstances; (4) the provisions of the plan at issue are ambiguous, such that reasonable persons could disagree as to their meaning or effect; and (5) the representations must have been made to the beneficiary involving a spoken or written interpretation of the plan.” The court ruled that Woo satisfied all five elements. The court found that Kaiser “materially misrepresented Woo’s eligibility to participate in the SRIP and the KPEPP for over a decade,” either directly to her or through its agents. The court acknowledged that some of these communications included disclaimers, but others, such as the initial eligibility letter, did not, and thus the multiple misrepresentations over several years were sufficiently misleading. The court further found that Woo reasonably relied on Kaiser’s representations because continuing participation in the plan was “a high priority” for her when deciding to transfer to the Northern Region. Woo “engaged in years of financial planning – as reflected by her numerous calls to KPRC regarding her retirement benefits – under the assumption she would be able to count on receiving retirement benefits through the SRIP and the KPEPP.” The court further ruled that “extraordinary circumstances” existed due to Kaiser’s repeated misrepresentations over time: “This pattern of repeated misrepresentation is a prototypical example of extraordinary circumstances that support an equitable estoppel claim under ERISA.” The court also found that the plan provisions were ambiguous because, while it was clear that Woo was not an “Eligible Employee,” “[t]he Plan is ambiguous as to what happens when KFH, the Participating Company, makes an error in the eligibility determination.” The court concluded that “[o]ne could reasonably read the Plan as treating KFH’s eligibility determination as conclusive and binding…even if it was an erroneous application of the eligibility criteria[.]” Finally, the court found that the fifth element was met because the representations made to Woo involved interpretations of the plan, and thus “Woo has established all the elements of her equitable estoppel claim under ERISA.” The court granted her motion for judgment, denied Kaiser’s, and ordered the parties to meet and confer to prepare a proposed judgment.
Provider Claims
Third Circuit
Samra Plastic & Reconstructive Surgery v. UnitedHealthcare Ins. Co., No. CV 25-6001 (MAS) (JTQ), 2026 WL 266754 (D.N.J. Feb. 2, 2026) (Judge Michael A. Shipp). Samra Plastic and Reconstructive Surgery, a healthcare services provider, performed surgical services on a patient insured by UnitedHealthcare Insurance Company. Samra alleges that it obtained prior authorization from United, which “explained to Plaintiffs that the out-of-network benefit to be paid by Defendant was the FAIRHealth Benchmark at the 75th percentile.” However, Samra alleges that United only paid a fraction of the billed amount, leaving a significant outstanding balance. Samra and the patient filed this suit in state court alleging six causes of action: breach of contract, promissory estoppel, account stated, failure to pay benefits under ERISA, breach of fiduciary duty and co-fiduciary duty under ERISA, and failure to provide a summary plan description in accordance with ERISA. The state law claims were asserted by Samra, while the ERISA claims were asserted by the patient. United moved to dismiss Samra’s claims on preemption grounds, and all claims for failure to state a claim. The court first addressed United’s preemption argument, ruling that Samra’s claims were not preempted by ERISA because they did not require an “impermissible reference” to the patient’s ERISA-governed plan and were based on a separate agreement between Samra and United. The court acknowledged that some reference to the plan might be necessary, but such a reference would be nothing more than “a cursory examination,” which “is ‘not the sort of exacting, tedious, or duplicative inquiry that the preemption doctrine is intended to bar.’” The court then examined Samra’s state law claims and found they were all properly pleaded. The court ruled that Samra had alleged claims for (1) breach of contract based on United’s “multiple representations” that it would pay the patient’s claim at a certain rate, (2) promissory estoppel based on those same representations, as well as Samra’s detrimental reliance, and (3) account stated because Samra had sent a bill to United for a precise amount which United had accepted and did not dispute. However, the patient had less luck with her ERISA claims. The court found that the patient’s allegations supporting her claim for benefits were too vague and that she did not identify a specific plan provision that entitled her to benefits. The court also dismissed the patient’s claim for breach of fiduciary duty under ERISA, concluding that the relief sought was legal rather than equitable, and that she had merely relabeled her claim for benefits. As for the alleged failure to produce plan documents, it was dismissed as well because the patient did not allege that United was a plan administrator, a necessary element under Section 1132(c)(1)(B). As a result, the court denied United’s motion as to Samra’s state law claims but granted it as to the patient’s ERISA claims.
Fifth Circuit
Abira Med. Laboratories LLC v. Blue Cross Blue Shield of Texas, No. 3:24-CV-2001-B, 2026 WL 252097 (N.D. Tex. Jan. 30, 2026) (Judge Jane J. Boyle). Abira Medical Laboratories LLC, d/b/a Genesis Diagnostics, brought this action against Blue Cross Blue Shield of Texas seeking $7.1 million in reimbursement for laboratory testing Genesis provided to BCBS’ insureds. Genesis initiated arbitration proceedings against BCBS in 2022, contending that BCBS failed to pay both in-network and out-of-network claims. In 2023, the out-of-network claims were severed from the arbitration, leading Genesis to file this separate lawsuit in state court. In its complaint Genesis asserted claims for account stated, breach of contract, and quantum meruit. BCBS removed the case to federal court and moved to dismiss. The court granted the motion, dismissing Genesis’ quantum meruit claim with prejudice, and the breach of contract and account stated claims without prejudice. Genesis then filed an amended complaint asserting ERISA, breach of contract, and account stated claims. BCBS again moved to dismiss the amended complaint, and the court issued this decision. BCBS first argued that “Genesis failed to sufficiently allege it has standing to bring an ERISA claim because the requisition excerpts it relies upon only contain an authorization for direct payment, not an assignment.” The court agreed, ruling that the requisition excerpts did not contain an assignment: “For starters, the word ‘assign’ is absent. Moreover, the requisition excerpts contain no manifestation of an intent to vest in Genesis the right to enforce the members’ insurance plans against BCBSTX… Instead, the requisition excerpts merely authorize Genesis to receive payment and, in some instances, release the members’ medical information.” As for Genesis’ state law claims, the court ruled that (1) Genesis’ breach of contract claim failed for the same reason as its ERISA claims, i.e., lack of assignment; and (2) Genesis failed to state a claim for account stated because it did not “sufficiently allege an express or implied agreement between it and BCBSTX that fixed the amount due.” The court thus granted BCBS’ motion in its entirety. The court granted leave to amend the ERISA and breach of contract claims, but dismissed the account stated claim with prejudice because Genesis had already had two chances to plead that claim.
Withdrawal Liability & Unpaid Contributions
Fourth Circuit
International Painters & Allied Trades Indus. Pension Fund v. Florida Glass of Tampa Bay, Inc., No. 25-1312, __ F.4th __, 2026 WL 191344 (4th Cir. Jan. 26, 2026) (Before Circuit Judges Wilkinson, Wynn, and Keenan). Florida Glass of Tampa Bay stopped paying into the International Painters & Allied Trades Industry Pension Fund in 2015, and subsequently filed for bankruptcy in 2016. During the bankruptcy proceedings, International Painters submitted a proof of claim for withdrawal liability, requesting $1,577,168. However, International Painters was uncertain as to whether Florida Glass had in fact withdrawn, due to the inconsistent start-and-stop nature of the building and construction industry (BCI), and thus labeled the proof of claim “contingent.” Ultimately, the claim was not objected to and was deemed allowed, resulting in a distribution of $48,349 to International Painters. In 2021, during one of its annual reviews, International Painters identified Florida Glass as one of its participating employers that had not contributed to the plan for five years and began investigating. It determined that Florida Glass and its control group satisfied the plan conditions for withdrawal in 2015, and in 2022 it assessed withdrawal liability of $1,577,168, sending a notice and demand letter. Defendants contested the notice but did not seek arbitration within the statutory 180-day window, and thus International Painters brought this action to collect the withdrawal liability. On summary judgment, defendants contended that International Painters’ statute of limitations had expired because the 2016 bankruptcy claim constituted a notice and demand and request for acceleration under ERISA, as amended by the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), which started a six-year limitations clock. The district court disagreed, ruling that the claim was not a notice and demand, and alternatively ruled that defendants waived their statute of limitations defense by failing to initiate arbitration. Defendants appealed, and the Fourth Circuit issued this published opinion. The court noted that the case “presents two important questions for our circuit, both of which concern what happens when a multiemployer pension plan submits a proof of claim for withdrawal liability in the bankruptcy of a contributing employer. First, does the proof of claim operate as a notice and demand under 29 U.S.C. § 1399(b)(1)? Second, does it operate as an acceleration under 29 U.S.C. § 1399(c)(5)?” The court held that the answer to both questions “may in some cases be ‘yes’,” but in this case, the answer was “no.” The court explained that the MPPAA and the bankruptcy laws are “an imperfect fit,” and thus rejected defendants’ contention that “every proof of claim operates as a notice and demand as a matter of law.” Indeed, the court noted that defendants’ argument “would seriously undermine the optionality the MPPAA was designed to provide pension plans,” observing that the MPPAA “bespeaks a deliberate legislative choice to afford some flexibility” to plans and “purposely ‘place[s] the running of the statute of limitations in the control of the fund’” by giving them discretion as to when to start the collection process. “Forcing a pension plan’s protective, contingent filing against a BCI employer to operate as a notice and demand would turn this concept on its head by handing the stopwatch to the bankrupt employer.” Furthermore, defendants’ argument “would also constrain the ability of pension plans to recover withdrawal liability from BCI employers at all” because it, in combination with the MPPAA’s industry-specific rules for identifying BCI withdrawals, which provide a five-year window, would place plans on an unfairly shortened clock. As a result, the Fourth Circuit concluded that “the better rule – the rule that leaves the stopwatch in the hands of the pension plan and provides it the flexibility to protect its assets, as Congress directed – is that a proof of claim operates as a notice and demand only when it clearly satisfies the MPPAA’s requirements… Ambiguity should be resolved by concluding that the proof of claim is not a notice and demand.” Here, International Painters’ notice and demand letter clearly satisfied the MPPAA’s requirements, but its bankruptcy claim, which did not even use the word “demand” and was labeled as “contingent,” did not. The Fourth Circuit acknowledged that International Painters accepted some money from its bankruptcy claim, but ruled that defendants could not “transform the filing into a clear notice and demand” simply by not objecting to it. Instead, the district court appropriately treated the distribution as a set-off from the plan’s award in this action. Finally, the Fourth Circuit declined to rule on the alternative waiver holding by the district court, stating that it was unnecessary to do so because the appellate court had “fully resolved the case on the basis of the notice and demand question.” Thus, the Fourth Circuit affirmed the ruling in International Painters’ favor, concluding that defendants could not “use a quirk of bankruptcy law to avoid paying what it owes[.]” The court ordered defendants to pay the withdrawal liability, minus the amount already recovered through bankruptcy, along with interest, liquidated damages, attorney’s fees, and costs.