Milligan v. Merrill Lynch, Pierce, Fenner & Smith, Inc., No. 25-1385, __ F.4th __, 2026 WL 1041935 (4th Cir. Apr. 17, 2026) (Before Circuit Judges Wilkinson, Wynn, and Berner)
American employers, particularly large ones, offer all kinds of benefit and compensation packages to their employees. Parceling these arrangements out into legal categories usually is not difficult. For example, salary disputes are generally governed by state contract and employment laws, while disputes over pension benefits are generally federally governed by ERISA.
However, not all compensation is so easily sliced and diced. One type of arrangement that keeps popping up in litigation is the long-term incentive program. On one hand, these programs defer payment of a benefit, which sounds like an ERISA plan. On the other, the timing of the payments is often not tied to retirement, which sounds like a simple delayed bonus. Are these programs governed by ERISA or not?
In this week’s notable decision, the Fourth Circuit waded into the fray. The case involved Kelly Milligan, a former financial advisor at the venerable firm of Merrill Lynch, Pierce, Fenner & Smith, a subsidiary of Bank of America. Milligan worked at Merrill Lynch from 2000 to 2021, and during that time he was granted several WealthChoice Awards, which are part of Merrill Lynch’s compensation package designed to incentivize productivity and retention among its financial advisors.
WealthChoice Awards are annual awards which are contingent on an advisor meeting certain performance criteria and remaining employed with Merrill Lynch for a specified period, typically eight years. These awards are calculated based on the advisors’ production credits, which are tied to the revenue generated from their clients. A “notional account” is created whenever there is an award, but this account does not actually contain any money. Instead, the employee chooses an investment to serve as a benchmark, and the account value tracks that benchmark.
Crucially, WealthChoice Awards are not immediately payable. Instead, they vest over time, and the advisor must remain employed through the vesting date to earn them. If an advisor’s employment ends before the awards vest, the awards are generally canceled, although there are exceptions, such as for retirement, disability, or death. Once the award vests, it is immediately payable; the advisor cannot defer it.
In 2021, Milligan resigned his employment at Merrill Lynch to cofound a competitor investment firm. As a result, Merrill Lynch canceled the awards Milligan had earned that had not yet vested. This decision was consistent with the program’s rules, but Milligan contended that the program was illegal. He filed a putative class action alleging that the program qualified as an employee pension benefit plan under ERISA, and that it violated ERISA’s vesting and anti-forfeiture requirements. He further alleged that the plan administrator breached its fiduciary duties in implementing the plan.
Milligan did not get much traction with the district court, which granted summary judgment in favor of Merrill Lynch. The district court concluded that the WealthChoice Award program did not qualify as an ERISA-covered employee pension benefit plan, and instead was a “bonus plan exempt from ERISA.” Milligan appealed to the Fourth Circuit, and this published decision was the result.
The court began by examining ERISA, which defines an employee pension benefit plan as any plan that “provides retirement income to employees” or “results in a deferral of income by employees for periods extending to the termination of covered employment or beyond.” The court then examined Department of Labor (DOL) regulations interpreting ERISA which clarified that bonus payments for work performed do not qualify as pension plans unless they are “systematically deferred to the termination of covered employment or beyond, so as to provide retirement income to employees.”
Milligan began by attacking the DOL regulation on the ground that it was “inconsistent with the clear statutory language of ERISA” and thus should be rejected pursuant to the Supreme Court’s 2024 ruling in Loper Bright Enterprises v. Raimondo, which forbids courts from deferring to agency interpretations of ambiguous statutes.
The Fourth Circuit was unpersuaded, noting that Congress delegated authority to the Secretary of Labor to define terms and promulgate regulations under ERISA. Furthermore, the DOL had responsibly acted “in response to concerns raised immediately after ERISA was passed,” and reasonably concluded that bonus programs generally do not qualify as pension plans unless they systematically defer payments until after termination.
The Fourth Circuit noted that this interpretation was consistent with ERISA’s purpose of protecting employees from losing anticipated retirement benefits. After all, a bonus is a “‘premium paid in addition to what is due or expected,’ not a guaranteed benefit that employees reasonably forecast to be retirement income.” The court emphasized that the DOL had adopted this regulation less than one year after ERISA’s enactment, and Congress had not challenged it in the decades since, despite numerous amendments to ERISA.
The Fourth Circuit then examined three cases from other circuit courts (the Fifth, Eighth, and Tenth), and noted that “[o]ur peer circuits have consistently held that plans similar to the WealthChoice Award program are bonus payment plans” under the DOL regulation. From these cases the Fourth Circuit distilled a list of non-exhaustive factors that are “useful to consider when determining whether a plan is a bonus payment plan: (1) whether the plan contemplates universal employee participation or imposes heightened eligibility requirements, (2) whether the plan is funded with money that would otherwise be immediately payable to the employee, (3) whether the plan is actually funded or involves phantom investments, (4) whether employees can unilaterally postpone payments until termination or beyond, (5) whether the plan is presented as a vehicle for obtaining retirement income, and (6) whether firm performance impacts plan payments.”
Applying these factors, the court was “convinced that the WealthChoice Award program…comfortably qualifies as a bonus payment plan.” The court explained that (1) the program “has heightened eligibility requirements” that only allowed “high-performing Advisors” to qualify; (2) the program’s revenue threshold did not guarantee a benefit because of the vesting rules, and thus “the Program is not funded with money that employees would otherwise be immediately entitled to receive”; (3) the program did not actually set aside any money, and instead created an unfunded notional account that was unsecured and only represented a “‘contingent promise’ to pay its hypothetical value once the Advisor satisfies the other Program requirements”; (4) advisors had no power to defer payment of their awards because “vesting triggers automatic and mandatory payment,” which generally occurred during employment, not after termination; (5) the program was not promoted by Merrill Lynch as a pension plan; and (6) awards were calculated based on contribution to firm revenue, and thus were “at least somewhat correlated with the firm’s overall performance, another feature common to bonus plans.”
As a result, the Fourth Circuit agreed with the district court that the WealthChoice program was a bonus plan not governed by ERISA, and affirmed the judgment in Merrill Lynch’s favor.
Judge Wilkinson penned a concurrence, explaining, “I write separately to emphasize that any other conclusion would generate an avalanche of deleterious consequences.” According to Judge Wilkinson, Milligan’s interpretation of the relevant statute was “anything but a slam dunk” and “invites chaos which the courts in the absence of congressional clarity may not sanction.”
Specifically, Judge Wilkinson stated that Milligan’s interpretation was “reductive and destabilizing” because it “would treat every compensation scheme as a pension plan subject to ERISA so long as it results in any deferral of income to a period extending beyond a person’s employment.” Judge Wilkinson offered as an example paychecks that are issued after an employee dies, retires, or is terminated. Under Milligan’s interpretation, “a single incidental, or perhaps even accidental, deferral of income would create an ERISA pension plan… Can even the stray deferred penny now suffice to trigger Subsection (ii)?”
If Milligan’s interpretation were to be adopted, Judge Wilkinson feared that it would create an “explosion” in the number of ERISA-governed plans which would have “profound repercussions,” including increased and expensive compliance by employers, as well as “possible downstream consequences” such as reduction or removal of benefits. “The irony is thus that Milligan’s view may harm some of the exact individuals ERISA and the bonus regulation intended to protect.”
Finally, Judge Wilkinson argued for judicial restraint and deference to the legislative process, noting that Congress had not acted to change the DOL’s bonus regulation in the decades since its adoption. As a result, he was hesitant to “invite widespread tumult” and “initiate great social and economic change” by interpreting it in a way that would suddenly expand the scope of ERISA. Alluding to the major questions doctrine, he concluded that, until Congress says otherwise, “we are left to exercise restraint and find a path that respects the legislative process and prevents unwarranted disruption.”
* * *
As a footnote, two weeks ago we reported on Lahoud v. Merrill Lynch, a case that is also challenging the WealthChoice Awards plan on ERISA-related grounds. The court in that case granted Merrill Lynch’s motion to transfer the case from the District of New Jersey to the Western District of North Carolina. Because the latter district is in the Fourth Circuit, the case is now governed by this decision, and is likely doomed.
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Breach of Fiduciary Duty
Fourth Circuit
Fezer v. Lockheed Martin Corp., No. CV 25-0908-TDC, 2026 WL 1041276 (D. Md. Apr. 16, 2026) (Judge Theodore D. Chuang). The plaintiffs in this case are participants in three ERISA-governed retirement plans sponsored by Lockheed Martin Corporation; the plans are managed by Lockheed’s subsidiary, Lockheed Martin Investment Management Company (LMIMCo). Plaintiffs claim that the LMIMCo target date funds (TDFs), which were offered as investment options within the plans, were “chronic underperformers” compared to benchmarks and other comparable funds, and that management fees were unreasonably high. Plaintiffs also allege that Lockheed and LMIMCo engaged in prohibited transactions and failed to act in the best interests of the plan participants. Plaintiffs have asserted five claims: (1) breach of fiduciary duty based on the selection and retention of the LMIMCo TDFs as plan investments; (2) breach of fiduciary duty based on the selection of, failure to monitor, and retention of LMIMCo as plan manager; (3) breach of fiduciary duty based on unreasonable management fees; (4) prohibited transactions in violation of 29 U.S.C. § 1106(a)(1); and (5) prohibited transactions in violation of 29 U.S.C. § 1106(b). Defendants filed a motion to dismiss, which the court ruled on in this order. Defendants argued first that Lockheed “is not a fiduciary with respect to any of the conduct alleged in the fiduciary duty claims because it acted only as a settlor with respect to the appointment of LMIMCo and because it ‘had no fiduciary role in selecting, monitoring, or removing investment options.’” The court rejected this as to Count 2 because Lockheed had “the power to replace LMIMCo as the Plan Manager,” and rejected it as to Counts 1 and 3 because plaintiffs alleged Lockheed was liable as a co-fiduciary to LMIMCo. Turning to the underperformance allegations, the court denied the motion to dismiss Count 1, finding that plaintiffs adequately alleged underperformance of the LMIMCo TDFs and provided appropriate comparators. Defendants criticized these comparators on various grounds, but the court found that their demands were too “granular” and “are more appropriately addressed after more factual development, rather than at the motion-to-dismiss stage.” The court further noted that plaintiffs had alleged more than just underperformance; they “have alleged additional facts in support of a claim of imprudence, including that the underperforming LMIMCo TDFs were established and managed in-house, with potential financial benefits to Lockheed Martin.” The court also noted that plaintiffs relied on “a prior lawsuit that resulted in a $62 million settlement in 2015 and an internal review of the performance of the Plans’ funds in 2019.” However, the court reached a different conclusion on Count 3, determining that plaintiffs failed to provide meaningful comparators for their alleged too-high management fees. As for the duty of loyalty, the court denied the motion to dismiss as to Count 1 because plaintiffs plausibly alleged that defendants acted in their own interest by maintaining the underperforming TDFs. However, the court dismissed the duty of loyalty claim as to Count 3 because the allegations did not demonstrate that defendants failed to act solely in the interest of the plan participants: “the fact that the LMIMCo TDFs were in-house funds is insufficient[.]” As for the prohibited transaction claims in Counts 4 and 5, the court denied the motion to dismiss, finding that plaintiffs adequately alleged transactions between Lockheed, the plans, and LMIMCo that fell under 29 U.S.C. § 1106(a) and (b). The court noted that defendants might have persuasive affirmative defenses to justify the transactions at issue, but plaintiffs were not required to plead around them pursuant to the Supreme Court’s 2025 decision in Cunningham v. Cornell and thus their claims survived to fight another day. Finally, the court granted defendants’ request to strike plaintiffs’ demand for a jury trial, as the relief plaintiffs seek is equitable in nature, and ERISA does not confer a right to a jury trial for actions brought under 29 U.S.C. § 1132(a)(2) or (3). Thus, while Lockheed won some minor skirmishes, the war will continue.
Ninth Circuit
Ang v. Franklin Resources, Inc., No. 25-CV-06130-VC, 2026 WL 1045698 (N.D. Cal. Apr. 17, 2026) (Judge Vince Chhabria). The plaintiffs in this putative class action are participants in an ERISA-governed 401(k) retirement plan sponsored by Franklin Resources, Inc. (better known as Franklin Templeton). They allege that prior to 2023 Franklin and related defendants breached their fiduciary duties under ERISA by including in the plan’s investment options Franklin-affiliated funds, which were costly and performed poorly. In 2023, the plan was amended to require the inclusion of certain affiliated funds, known as the “Flagship Funds,” and Gallagher Fiduciary Advisors, LLC was appointed as an independent fiduciary to monitor these funds. Plaintiffs allege that this change did not improve matters. They contend that the plan retained several poorly performing Franklin funds, and both before and after the 2023 amendment defendants prioritized Franklin’s interests over those of plan participants. This order ruled on motions to dismiss filed by Franklin and Gallagher. Franklin sought dismissal of the claims against them, arguing that their actions were not disloyal or imprudent. Gallagher sought dismissal of claims related to its actions before its appointment in 2023 and argued that it did not profit from the inclusion of the Flagship Funds. The court denied Franklin’s motion to dismiss, finding that plaintiffs plausibly alleged breaches of fiduciary duties under ERISA. The court noted that plaintiffs’ performance analysis was consistent with direction from the Ninth Circuit and used “meaningful benchmarks,” in one case using “Franklin’s own customized benchmark, as well as specific comparator funds with similar investment goals.” Furthermore, the court emphasized that plaintiffs’ underperformance allegations were combined with allegations that Franklin prioritized its financial interests over sound investment choices, which was “enough to raise the inference that the Franklin Defendants breached their fiduciary duties under ERISA.” As for Gallagher, its motion to dismiss was granted in part and denied in part. The court dismissed claims against Gallagher for actions prior to its 2023 appointment, as the complaint did “not plausibly allege that Gallagher had any relevant involvement with the Plan prior to its appointment as an independent fiduciary in 2023.” However, the court found that plaintiffs plausibly alleged breaches of fiduciary duties post-2023 because the “independent fiduciary structure” did not absolve Gallagher of its responsibilities under ERISA. The court emphasized that fiduciary duties under ERISA cannot be diminished by plan terms. It further noted that both Franklin and Gallagher were disclaiming fiduciary responsibility over monitoring the plan’s portfolio, which was concerning: “In light of these issues and the plaintiffs’ plausible allegations that at least some funds were improperly retained, the defendants’ argument that neither of them is responsible must be rejected.” The court also ruled that Franklin was not exempt from fiduciary liability as a plan settlor, because their conduct could be interpreted as “an attempt to circumvent fiduciary responsibilities under ERISA,” and because plaintiffs “don’t challenge the ‘act of amending.’… Rather, they allege that the structure, as well as the way the structure was implemented, resulted in a fiduciary review process that violated ERISA.” The court further ruled that because plaintiffs’ other claims survived, their derivative claim for violation of the duty to monitor also survived. Finally, the court addressed standing, ruling that plaintiffs had standing to challenge plan-wide mismanagement, even if they only invested in a subset of the funds. “[A]llegations of investment in a specific fund is not a prerequisite for standing to challenge plan-wide mismanagement so long as a plaintiff can plead injury to their own plan account.” With that, defendants’ motions were largely denied, although Gallagher escaped liability for its pre-2023 activities.
Class Actions
Eighth Circuit
Mehlberg v. Compass Grp. USA, Inc., No. 2:24-CV-04179 SRB, __ F. Supp. 3d __, 2026 WL 1021456 (W.D. Mo. Apr. 9, 2026) (Judge Stephen R. Bough). Richard L. Mehlberg and Angela R. Deibel brought this class action against their former employer, Compass Group USA, Inc., a Fortune 500 foodservice company, alleging that Compass’ employee health plan violated ERISA by imposing an unlawful tobacco surcharge on participants. Counts I and II of plaintiffs’ complaint allege that the tobacco surcharge violated statutory provisions under ERISA. Count III claims that Compass breached fiduciary duties owed to the plan under ERISA by collecting and retaining tobacco surcharges for its own benefit, while Count IV seeks individual relief for those breaches. Counts V and VI allege that Compass violated the terms of the plan by operating a discriminatory wellness program. Specifically, plaintiffs argue that Compass did not notify participants of an alternative way to avoid the surcharge, did not comply with ERISA’s “full reward” requirement, and breached its fiduciary duties by collecting the surcharge. At issue in this order was plaintiffs’ motion for class certification, seeking certification of four classes. Before tackling class certification requirements under Federal Rule of Civil Procedure 23, the court first addressed the nature of plaintiffs’ claims. The court ruled that (1) the plan did not provide “a reasonable alternative standard” because participants “could not receive a retroactive reimbursement to avoid the tobacco surcharge in its entirety,” (2) Compass did not provide adequate notice of an alternative reasonable standard, and instead simply informed participants that they would have to pay the surcharge if they used tobacco, and (3) the surcharge was not in the plan and instead was only described in supplemental documents. As for standing, the court ruled that (1) the named plaintiffs were no longer employees and thus could not seek prospective relief, and (2) plaintiffs had standing because their “payment of a fee that they had a ‘statutory right not to be charged’ counts as a concrete injury for standing purposes.” The court further ruled that plaintiffs’ claims were not time-barred because all of their claims fell within either the four-year federal catch-all statute of limitations or ERISA’s six-year statute of repose. Moving on to certification requirements, the court found that plaintiffs’ four proposed classes satisfied Rules 23(a) and (b). The court determined that the numerosity, commonality, typicality, and adequacy requirements were met for all four proposed classes. Compass challenged typicality and adequacy, arguing that the named plaintiffs never participated in a tobacco cessation program or sought a reasonable alternative standard. The court rejected these arguments, stating that “[e]ven if there are some factual differences to be resolved at a later stage,” the named plaintiffs’ claims were similar enough to those of the rest of the class because they were based on the same violations. The court further found that separate actions would create a risk of inconsistent adjudications, and that common questions predominated over individual questions, making class certification under Rule 23(b) appropriate. The court ruled that class certification was the superior method for adjudicating the claims, given the small monetary amounts involved and the efficiency of a class action. As a result, the court granted plaintiffs’ motion for class certification, limited to retrospective relief, and ordered the parties to meet and confer regarding proper notice procedures to class members.
Randall v. GreatBanc Trust Co., No. 22-CV-2354 (LMP/DJF), 2026 WL 1068035 (D. Minn. Apr. 20, 2026) (Judge Laura M. Provinzino). The plaintiffs in this case are former employees of Wells Fargo who participated in an employee stock ownership plan (ESOP) established by Wells Fargo. The plan in question was a “leveraged KSOP,” which combined a leveraged ESOP with a 401(k) defined contribution retirement plan. Wells Fargo made annual ten-year loans to the plan, which were used to purchase convertible preferred Wells Fargo stock. The preferred stock was held in a suspense account as collateral for the loans, and as the loans were repaid, the stock was released, converted into common stock, and “then allocated to Plan participants’ accounts up to the 6% cap for employer matching contributions under the Plan and any profit-sharing contributions under the Plan.” Plaintiffs filed suit, challenging these transactions under ERISA. On defendants’ motion to dismiss, the court ruled that plaintiffs lacked Article III standing to pursue their claim that the plan overpaid for the preferred stock. However, the court allowed plaintiffs to proceed under their alternate theory that the transactions violated ERISA because the released stock was improperly used to satisfy Wells Fargo’s matching contributions and profit-sharing contributions, instead of increasing the amount of common stock allocated to the plan. (Your ERISA Watch covered this ruling in our February 28, 2024 edition.) In January of 2025, the court granted plaintiffs’ unopposed motion for class certification, and the parties were subsequently able to reach a settlement under which Wells Fargo would deposit $84 million into a qualified settlement fund. In December of 2025 the court granted preliminary approval to this settlement, and in this order it gave final approval. The court found that the notice program satisfied the requirements of Rule 23 of the Federal Rules of Civil Procedure, the due process clause, and the Class Action Fairness Act. In assessing the settlement’s fairness, the court considered the Eighth Circuit’s Van Horn factors, including the merits of the case, defendants’ financial condition, the complexity and expense of further litigation, and the amount of opposition to the settlement. The court noted that plaintiffs’ likelihood of success was “in doubt” due to the complexity of ERISA and the novelty of their legal theories. Plaintiffs acknowledged that their theories were potentially undermined by recent case law relating to plan forfeitures, which led the court to characterize future litigation as an “uphill battle.” Thus, the court deemed the $84 million settlement reasonable because it provided a substantial remedy to class members without the risks and delays of continued litigation. (Plaintiffs noted that this settlement would be “the largest-ever class action settlement of ERISA claims arising from an employee stock ownership plan.”) The court also evaluated the Rule 23(e)(2) factors, finding that the class representatives and counsel adequately represented the class, the settlement was negotiated at arm’s length, and the relief provided was adequate and equitable. Next, the court approved the requested attorneys’ fees of $20,160,000, which represented 24% of the settlement fund, as reasonable based on several factors, including the benefit to the class, the risk to counsel, and the complexity of the case. The court also conducted a lodestar cross-check in which it found that hourly rates between $1,000 and $1,375 per hour for senior counsel were “perhaps slightly elevated hourly rates for litigation in this District,” but “are generally in line for attorneys involved in complex, national class-action litigation.” Additionally, the court awarded $173,995.58 in litigation expenses and $25,000 service awards to each of the three class representatives. The court also authorized payment for settlement administration expenses from the qualified settlement fund, which is being administered by Simpluris and will potentially exceed $400,000. With that, the settlement was approved and the case was dismissed with prejudice.
Disability Benefit Claims
Ninth Circuit
Wallace v. Hartford Life & Accident Ins. Co., No. 25-2716, __ F. App’x __, 2026 WL 1046667 (9th Cir. Apr. 17, 2026) (Before Circuit Judges Graber, Hurwitz, and Desai). Jeffery Wallace filed this action against Hartford Life and Accident Insurance Company, seeking reversal of Hartford’s determination that he was no longer entitled to benefits under an ERISA-governed long-term disability benefit plan. The district court, under the deferential abuse of discretion standard of review, sided with Hartford, ruling that nothing in the record showed that Hartford’s decision was unreasonable, illogical, implausible, or “without support in inferences that may be drawn from the facts in the record.” (Your ERISA Watch covered this decision in our April 9, 2025 issue). Wallace appealed, and the Ninth Circuit made short work of it in this four-paragraph memorandum disposition. The court affirmed, ruling that (1) the plan expressly granted Hartford discretionary authority to interpret its terms and determine eligibility for benefits, which justified the abuse of discretion standard of review; (2) although a structural conflict of interest existed because Hartford was both the administrator and insurer of the plan, this conflict was mitigated by the “thorough, neutral, and independent review process” conducted by Hartford; and (3) Hartford did not abuse its discretion because “[t]he updated medical records that Plaintiff submitted failed to support his continued eligibility for benefits,” yet Hartford still “developed facts to inform its determination by arranging for an independent medical examination and independent medical analyses of all relevant information,” and “engaged in a ‘meaningful dialogue’ with Plaintiff[.]” Thus, the district court’s judgment in favor of Hartford was upheld.
Eleventh Circuit
Dunham-Zemberi v. Lincoln Life Assur. Co. of Boston, No. 22-13316, __ F. App’x __, 2026 WL 1031851 (11th Cir. Apr. 16, 2026) (Before Circuit Judges Newsom, Branch, and Luck). Bryce Dunham-Zemberi was employed by Mattress Firm and was covered under its ERISA-governed long-term disability (LTD) insurance plan administered by Lincoln Life Assurance Company of Boston. His job as a store manager required him to lift up to 50 pounds. In November of 2019, Dunham-Zemberi suffered a spinal injury from a skiing accident, which led to spinal fusion surgery. Lincoln approved his claim for LTD benefits at first, but after a series of medical evaluations, including x-rays, a CT scan, and assessments by his orthopedic surgeon and a pain psychologist, Lincoln determined that there were no complications from the surgery, and his strength had returned. Dunham-Zemberi’s surgeon was “perplexed” by his condition and referred him to a pain psychologist, who reported “no pain behaviors observed” despite his complaints. As a result, Lincoln terminated Dunham-Zemberi’s benefits in February of 2021. Dunham-Zemberi appealed, providing the results of a functional capacity evaluation (FCE) which attested that he could only carry fifteen pounds for thirty feet using both his hands, which “represent[ed] his maximal, occasional, material handling ability.” Lincoln was not persuaded and upheld its decision on appeal, and this action followed in which Dunham-Zemberi sought reinstatement of his LTD benefits. Pursuant to cross-motions for judgment, the district court ruled in Lincoln’s favor, ruling that Dunham-Zemberi did not meet his burden of proving continued disability. Dunham-Zemberi appealed, and in this unpublished decision the Eleventh Circuit affirmed, upholding Lincoln’s decision to terminate benefits. The court applied its idiosyncratic multi-step framework to determine whether Lincoln’s decision was correct, and did not make it past step one, which asks whether the decision was “de novo correct.” The court found that it was because Dunham-Zemberi failed to provide objective medical evidence, as required by the plan, to prove his continued inability to lift up to fifty pounds. Indeed, the court found that “[t]he objective medical evidence showed the opposite,” citing his CT scan and the conclusions of his physicians. The court rejected Dunham-Zemberi’s argument that Lincoln misapplied the plan, noting that the plan had an objective evidence requirement, and his argument that the burden was on Lincoln to follow up with his medical provider, emphasizing that the plan placed the burden on Dunham-Zemberi to provide proof of continued disability. The court also found that the evidence Dunham-Zemberi provided, such as the FCE and a letter from his primary care physician, did not constitute objective medical evidence of his inability to lift fifty pounds. The FCE did not measure Dunham-Zemberi’s heart rate during the lifting test – only before – and the letter did not provide any new information, let alone objective information, to support his claim. As a result, the Eleventh Circuit affirmed.
Discovery
Second Circuit
Mazzola v. Anthem Health Plans, Inc., No. 3:25-CV-1433 (OAW), 2026 WL 1045702 (D. Conn. Apr. 17, 2026) (Magistrate Judge Robert Richardson). Plaintiffs Michelle Mazzola, Guy Mazzola, Baby Doe, Amec, LLC, and Lisa Kuller filed this putative class action against defendants Anthem Health Plans, Inc., Carelon Behavioral Health, Inc., and Elevance Health, Inc. Plaintiffs, who purchased or enrolled in Anthem’s health insurance plans, allege that Anthem misrepresented that its behavioral health provider directory was “robust and accurate.” In fact, plaintiffs contend that Anthem’s directories were more like “ghost networks” in that “over 70% of doctors listed do not exist, are not actually in-network, do not accept new patients, or have other inaccurate information listed[.]” Plaintiffs alleged that these “ghost networks harm them because they force Plaintiffs to turn to out-of-network providers at significant costs, exacerbate behavioral health problems, and cause delays and/or abandonment of treatment.” Plaintiffs have alleged ten claims for relief, including breach of contract, bad faith, violation of the Connecticut Unfair Trade Practices Act (CUPTA), fraud, negligent misrepresentation, unjust enrichment, and violations of ERISA and the federal Mental Health Parity and Addiction Equity Act (MHPAEA). Defendants have filed a motion to dismiss, and while that motion is pending they have also filed a motion to stay discovery. In this order the assigned magistrate judge reviewed the motion to stay, considering three factors: the strength of the dispositive motion, the breadth of the discovery sought, and the prejudice a stay would have on plaintiffs. The magistrate found that defendants’ motion to dismiss is “lengthy and raises substantial arguments in favor of dismissal, including issues related to personal jurisdiction, ERISA preemption, standing, exhaustion of administrative remedies, and various other potential pleading deficiencies.” The court refused to predict the outcome of defendants’ motion, but ruled that because the motion “raises potentially meritorious grounds for dismissal,” and “resolution of the [motion] in favor of the Defendants may dispose of all claims, this factor weighs slightly in favor of a discovery stay.” The magistrate also agreed with defendants that the scope of discovery in this putative class action was “extensive and complex,” thereby “creat[ing] an unnecessary burden.” The magistrate noted that plaintiffs sought “certification of a class consisting of similarly situated individuals over the past seven years, plus five separate sub-classes.” Finally, the magistrate found that plaintiffs’ concerns about potential prejudice due to the passage of time were “too speculative to weigh in favor of a stay.” The magistrate stated that “it is well-settled that delay ‘cannot itself constitute prejudice sufficient to defeat a motion to stay discovery,’” and furthermore, “the potential risk that employees will have ‘moved on’ from Defendants’ control as time passes is an ordinary risk of litigation.” As a result, the magistrate concluded that there was good cause for a stay of discovery pending a decision on defendants’ motion to dismiss, and thus he granted defendants’ motion to stay discovery. However, the magistrate allowed for the possibility of lifting the stay if the motion to dismiss was not resolved by October 16, 2026.
Exhaustion of Administrative Remedies
Seventh Circuit
Cox v. United Parcel Service, Inc., No. 1:25-CV-05597, 2026 WL 986186 (N.D. Ill. Apr. 13, 2026) (Judge Edmond E. Chang). Janay Cox was a part-time unloader working for United Parcel Service and a member of Teamsters Local Union No. 705. During her initial job training, Cox disclosed that she had a disability, but maintained she could perform her duties without accommodations. Cox contended that after this disclosure, she encountered increased scrutiny, discipline, sexualized comments, and harassment from supervisors, including being written up for minor infractions and receiving off-the-clock safety violations. She reported these incidents to UPS’ human resources department and even filed a police report. She also attempted to contact Local 705 about her discrimination claims, but her union representatives allegedly failed to advocate for her. Later, Cox aggravated her disability, was placed on a “six-month ADA hold without pay,” and was then transferred to a non-union position where she allegedly faced further retaliation and harassment. Cox filed EEOC charges and subsequently filed two pro se lawsuits, which were consolidated into this action. In her complaints she alleged employment discrimination under federal and state law and violations of ERISA and NLRA. Her claims were brought under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA) against both UPS and Local 705, as well as claims under the Illinois Wage Payment and Collection Act, the Illinois Workers’ Compensation Act, the Illinois Whistleblower Act, and for intentional infliction of emotional distress. Both UPS and Local 705 filed motions to dismiss. The court found that Cox’s Title VII and ADA claims were time-barred because they were filed 91 days after the EEOC issued right-to-sue letters, exceeding the 90-day limit. The court found that Cox could not successfully argue for equitable tolling or the continuing-violation doctrine, but allowed her to amend to allege facts regarding what information she received from the EEOC and when. As for Cox’s ERISA claim, she alleged that UPS was liable for breach of fiduciary duty regarding its mishandling of her disability claims. UPS contended that Cox failed to exhaust her administrative remedies before filing suit, and the court agreed. The court noted that “Cox did not describe any steps she took to exhaust this claim before filing suit,” and did not respond to UPS’ arguments during briefing on this issue. The court explained that it “cannot fashion arguments for Cox (or any litigant), so the ERISA claim must be dismissed for failure to exhaust. Given the complete absence of any response argument from Cox on this claim, the dismissal of this claim is with prejudice.” Next, the court dismissed Cox’s workers compensation claim without prejudice, allowing Cox to replead if she could allege interference with her benefits. The Whistleblower Act claim was dismissed due to insufficient allegations and preemption by the Human Rights Act, but again the court allowed Cox to replead based on alleged safety violations. Cox’s emotional distress claim was dismissed as it was “inextricably linked” to her alleged employment discrimination and not “extreme and outrageous” enough to be independently actionable. The NLRA claim against Local 705 was dismissed for lack of jurisdiction, as the issues were identical to those presented to the NLRB. Thus, the only surviving claim was under the Illinois Wage Payment and Collection Act, as Cox sufficiently alleged an agreement for continued pay during her ADA hold. Cox was given until April 27, 2026 to file an amended complaint addressing the court’s concerns.
Thomason v. Southern Illinois Laborers’ and Employers’ Health & Welfare Trust Fund, No. 3:25-CV-01409-GCS, 2026 WL 1066997 (S.D. Ill. Apr. 20, 2026) (Magistrate Judge Gilbert C. Sison). Michael Thomason filed this action against the Southern Illinois Laborers’ and Employers’ Health & Welfare Trust Fund under ERISA § 502(a)(1)(B), alleging that the fund failed to pay $142,303.47 in medical benefits. The fund filed a combined motion to dismiss for failure to state a claim and to strike the jury demand. The fund argued that Thomason did not exhaust administrative remedies, did not adequately plead an exception to exhaustion, and that the damages he sought, which included “consequential damages and unspecified relief,” were not available under ERISA. Thomason opposed the motion, arguing that exhaustion should be excused due to futility or lack of an available administrative remedy. (His counsel admitted at a scheduling conference that Thomason had not exhausted his administrative remedies before filing suit.) The court ruled that “Plaintiff has not pled sufficient facts in his amended complaint to show he is entitled to excusal from exhaustion on either of the theories he advances.” The court found that Thomason “has not alleged specific, nonconclusory facts to indicate that the claims and appeals procedures could not redress his grievances. He simply claims that Defendant denied his claims.” As for “unavailability of the administrative process,” Thomason contended that “Defendant has made no showing that it created any procedures for review much less provided the Plaintiff with any statement of reasons for its denial of coverage.” However, Thomason only made this argument during briefing on the motion to dismiss. Thus, the court found that “[t]hese new allegations in the response to the motion to dismiss are inconsistent with the allegations in the Amended Complaint. A fair reading of the Amended Complaint reveals that the only allegations relating towards exhaustion are based on futility.” Despite these rulings, the court did not dismiss on this ground: “[R]elying on the discretion afforded to it, the Court is not going to dismiss this action, but instead sua sponte STAYS this matter and DIRECTS Plaintiff to exhaust the administrative remedies.” In the end, the court granted the fund’s motion only to the extent it struck Thomason’s jury demand. The court denied the motion on all other grounds, not even reaching the issue of appropriate damages/relief.
Medical Benefit Claims
Ninth Circuit
Bertranou v. UnitedHealth Grp. Inc., No. 2:25-CV-03366-AB-E, 2026 WL 1046778 (C.D. Cal. Apr. 13, 2026) (Judge André Birotte Jr.). Patrick Bertranou was a participant in an ERISA-governed health insurance benefit plan administered by UnitedHealthcare Benefits Plan of California. In 2016, when he turned 65, Bertranou’s primary health insurer became Medicare; United dropped to secondary coverage. In 2019, Bertranou was diagnosed with stage-three bladder cancer and received treatment at UCLA Medical Center totaling $119,947.02. Medicare “conditionally” paid this amount. In 2024, Bertranou settled with UCLA for medical negligence related to his cancer treatment. This led Medicare to request reimbursement under the Medicare Secondary Payer law. Bertranou contends that after he filed this action against United, Medicare “reduced its demand for payment by ‘about $31,000’ but ‘did not pay’ the remaining $86,855.12 – $81,794.11 in principal and $5,061 in interest – for Plaintiff’s medical care because it is requiring Plaintiff to reimburse it from his settlement.” Bertranou contends in this action that United, as the secondary insurer, made a “contractual written pledge to pay” for his treatment if United’s benefit “totaled more than Medicare’s payment.” However, United “totally ignored Plaintiff’s demands[.]” Bertranou’s complaint asserts one cause of action: a claim for benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B). United filed a motion to dismiss for failure to state a claim, and in this order the court denied it, ruling that the plan’s terms were ambiguous. The court found that United did not identify any plan provisions that defined “health care expenses,” which was used in the definition of “allowable expenses,” as only those billed directly to Bertranou or the insurer. Nor did United identify any plan terms governing Medicare subrogation, leading to the conclusion that the plan was silent on these issues. The court noted that “[t]he parties’ filings discuss the Medicare Secondary Payer law at length,” but ultimately found no cases on point. As a result, “[t]his Court therefore looks to the terms of the plan. And because the plan’s terms are ambiguous, the Court concludes that resolution of this case on a motion to dismiss would be improper.” Thus, the court denied United’s motion.
Campbell v. UnitedHealthcare Ins. Co., No. 24-5736, __ App’x __, 2026 WL 982848 (9th Cir. Apr. 13, 2026) (Before Circuit Judges Tallman, VanDyke, and Tung). This case involves a claim for ERISA-governed health insurance benefits by Leah Campbell, who was treated by co-plaintiffs Emergency Surgical Assistants. Campbell submitted claims for her treatment to her health insurance plan administrator, UnitedHealthcare Insurance Company, which denied her claims in part because the services billed were “not documented as performed.” Campbell unsuccessfully appealed and then brought this action. The district court upheld one of United’s grounds for denial but remanded as to another. The court denied Campbell’s claim for statutory penalties for failure to produce certain documentation, and also denied her claim for attorney’s fees regarding her partial success. In this unpublished memorandum decision, the Ninth Circuit reversed. The appellate court agreed with the district court that abuse of discretion was the proper standard of review because the plan unambiguously granted discretionary authority to United to determine benefit eligibility. However, the Ninth Circuit ruled that United abused its discretion in denying Campbell’s claim because it did not engage in a “meaningful dialogue” with Campbell. Instead, it “repeat[ed] the same ambiguous – even misleading – rationale” in “a stream of cookie-cutter denial letters.” United’s letters repeatedly informed Campbell that the services were “not documented as performed” but did not explain further and “never provided Campbell with an understandable description of the additional material that it deemed necessary for her to perfect her claim.” The Ninth Circuit further noted that United had the information it needed to properly adjudicate Campbell’s claim the entire time, and “never produced any documents” when Campbell “repeatedly requested the ‘entire administrative record’ underlying United’s denial[.]” The court further found that the district court abused its discretion by denying Campbell’s motion for attorneys’ fees. The court noted that attorneys’ fees should only be denied to a successful plaintiff in an ERISA benefit case when “special circumstances would render such an award unjust,” and no such circumstances were present here. The district court had rejected Campbell’s motion because, after a resubmission by Campbell, the court was concerned with the “accuracy and reliability of the billing records.” But the Ninth Circuit found that even a “cursory comparison” showed there was “no basis to doubt the accuracy and reliability of the billing records as a whole.” Finally, the Ninth Circuit determined that the district court abused its discretion by declining to impose statutory penalties against United. United failed to produce the administrative record, including the governing plan document, for more than three years, even though Campbell requested “the entire administrative record” on “four separate occasions.” Furthermore, this failure was prejudicial to Campbell because it “impeded her ability to perfect and prevail” on her claim; without the plan, Campbell “lacked a reference point against which to evaluate the validity of United’s reasons for denying her claims.” As a result, the Ninth Circuit instructed the district court to award attorneys’ fees and impose statutory penalties consistent with its findings.
Plan Status
Eighth Circuit
Thompson v. Pioneer Bank & Trust, No. 5:24-CV-05067-RAL, 2026 WL 1045620 (D.S.D. Apr. 17, 2026); Thompson v. Pioneer Bank & Trust, No. 5:26-CV-05002-RAL, 2026 WL 1045757 (D.S.D. Apr. 17, 2026) (Judge Roberto A. Lange). These two related orders close the books on one case while allowing a second to continue. The two cases address the same dispute between financial advisor Andrew Taylor Thompson and his former employer, Pioneer Bank & Trust. Thompson contended that in 2024 Pioneer forced him to resign, after which he was entitled to benefits under a salary continuation agreement (SCA). Pioneer refused to pay up, and Thompson brought this suit, alleging among other things that the SCA was governed by ERISA. In his response during summary judgment briefing Thompson advanced a new theory, which was that he was entitled to benefits under a profit sharing and 401(k) plan, not just under the SCA. However, this was too little too late for the district court, which noted that Thompson’s pleading was focused on the SCA and never mentioned his alternate theory. The court ultimately ruled that the SCA was in fact a draft proposal, and had never been executed, and thus could not be an ERISA plan. As a result, the court had no subject matter jurisdiction over the case and dismissed it without prejudice. (Your ERISA Watch covered this ruling in our January 7, 2026 edition.) Thompson then (1) filed a new lawsuit with the same claims, but focused on the profit-sharing plan, not the SCA, and (2) filed motions under Federal Rule of Civil Procedure 59 to alter or amend the judgment in the first suit and amend/correct the complaint. Meanwhile, Pioneer filed a motion to dismiss the second suit. In these two orders everyone won something. The court denied Thompson’s motion to reopen the first case, reiterating that the SCA was not an ERISA plan and did not represent an agreement between the parties. The court further explained that in its prior order it “reviewed extensively why the Complaint did not give fair notice to Pioneer that Thompson intended to rely on any other document other than the SCA in its Opinion.” The court further denied Thompson’s motion to amend his complaint, noting that it was filed well after the deadline set in the scheduling order, and that to the extent Thompson sought relief under an agreement other than the SCA, he was already pursuing such relief in his second suit. As for that second suit, the court denied Pioneer’s motion to dismiss it. The court ruled: (1) res judicata did not apply to the new 2026 suit because the 2024 case was dismissed without prejudice, which is not a final judgment on the merits; (2) it had federal question jurisdiction over the ERISA claim; (3) Pioneer’s waiver argument failed because there were factual disputes over “Thompson’s knowledge and prior possession of the Plan,” (4) Thompson’s allegations were sufficient to survive a motion to dismiss for failure to exhaust administrative remedies at this stage because the exhaustion requirement is “not absolute,” potentially did not apply to Thompson’s Section 510 claim, and Thompson sufficiently alleged that exhaustion was “unnecessary, inapplicable, and futile”; and (5) Thompson’s allegations were sufficient to state a claim under Section 510 of ERISA, as he alleged that Pioneer interfered with his ERISA-governed rights and he was “constructively terminated by Pioneer because Pioneer created intolerable working conditions.” The court further ruled that because Thompson’s ERISA claim survived, it retained supplemental jurisdiction over his state law claims. Finally, the court addressed Pioneer’s argument regarding standing, concluding that Thompson had established Article III standing by alleging an actual injury to his plan account, a causal connection to Pioneer’s conduct, and that the injury could be redressed by a favorable judgment. The court acknowledged that Pioneer raised a statutory standing issue – whether Thompson was actually a plan participant entitled to sue under ERISA – in its reply brief, but declined to consider it because Thompson’s status was “beyond the four corners of the Complaint” and because Pioneer raised the issue for the first time on reply. As a result, Pioneer’s motion was denied, and while Thompson’s first suit is dead, his second will continue.
Pleading Issues & Procedure
Eighth Circuit
Martin v. NFL Disability Plan, No. 4:25-CV-00100-RK, 2026 WL 1008961 (W.D. Mo. Apr. 14, 2026) (Judge Roseann A. Ketchmark). Christopher Martin filed this pro se action against the NFL Disability & Survivor Benefit Plan, the Bert Bell/Pete Rozelle NFL Player Retirement Plan, Michael B. Miller, Gabriella Brown, and Tammy Parrott. Martin’s claims centered on the wrongful denial of his 2008 claim for total and permanent disability benefits under the NFL’s ERISA-governed retirement plan. Defendants moved to dismiss, and the court granted their motions in August of 2025, ruling that Martin did not administratively exhaust his claim and his claim was time-barred. Subsequently, Martin filed a motion to alter or amend the judgment pursuant to Federal Rule of Civil Procedure 59(e), which was denied in September of 2025. Martin then filed a notice of appeal to the Eighth Circuit and was awarded Social Security disability benefits. Martin alleged that the Social Security Administration (SSA) determined that he was disabled under SSA rules as of January 5, 2005. Before the court here were three motions for relief by Martin under Rule 60(b)(2). Martin argued that the SSA’s determination constituted “newly discovered evidence” supporting his contention that the NFL plan’s denial of his 2008 claim was erroneous. The court did not agree. It ruled that the SSA determination was not in existence at the time judgment was entered and thus could not constitute grounds for relief under Rule 60(b)(2). Furthermore, even if the SSA’s decision had pre-dated the judgment, it would not have produced a different result because Martin’s claims remained “unexhausted, time-barred, and meritless.” The court noted that “the plan expressly precludes total and permanent benefits in Plaintiff’s situation,” and furthermore, “SSA determinations are not binding on plan administrators under ERISA.” As a result, Martin will have to try his luck with the Eighth Circuit.
Tenth Circuit
Estate of Victor Harold Forsman v. Barnes, No. 2:25-CV-00283-JNP-CMR, 2026 WL 1068064 (D. Utah Apr. 20, 2026) (Judge Jill N. Parrish). This case is a battle over $750,000 in proceeds from a 401(k) plan account belonging to the late Victor Harold Forsman. The plan was managed by Empower Retirement, which believed Rory Jake Barnes was Forsman’s beneficiary and thus transferred the funds to him in 2022. The representative of Forsman’s estate challenged this distribution and brought this action asserting a claim under ERISA against Empower, and a state law claim against Barnes for wrongful conversion. Empower moved to dismiss, contending that it was not a fiduciary under the plan, and in January of 2026 the court agreed. (Your ERISA Watch covered this decision in our January 21, 2026 edition.) This left only the wrongful conversion claim against Barnes. The court issued an order to show cause why the case should not be dismissed because the court no longer had federal question jurisdiction over the case, and the representative responded, arguing that he “could have solely brought his suit in [f]ederal court under 29 U.S.C. § 1132(a)(1)(B) to recover benefits due [to] him under the terms of his plan and/or to enforce his rights under the terms of the plan.” The court rejected this, stating that he had no colorable claim under ERISA against the only remaining defendant, Barnes: “Barnes has no connection to the plan at all beyond applying for and receiving benefits.” The representative also argued that his “conversion claim under Utah law implicates a federal issue that is “(1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.” However, the court found that “the only federal issue identified by Plaintiff is whether Empower complied with ERISA when it paid benefits to Barnes,” and his claim against Barnes “appears fully capable of resolution without determining whether Empower complied with its obligations under ERISA.” Indeed, Barnes had filed a motion to dismiss which did not even mention ERISA, suggesting that no federal issues were implicated. Finally, the court rejected the representative’s invocation of discretionary supplemental jurisdiction, noting that courts “should normally dismiss supplemental state law claims after all federal claims have been dismissed, particularly when the federal claims are dismissed before trial.” As a result, Forsman’s estate could not overcome the court’s order to show cause, and the court thus dismissed the case for lack of subject matter jurisdiction.
Provider Claims
Seventh Circuit
Abira Medical Laboratories LLC v. Managed Health Servs. Ins. Corp., No. 24-CV-962, 2026 WL 1005154 (E.D. Wis. Apr. 14, 2026) (Judge Lynn Adelman). Abira Medical Laboratories, LLC, doing business as Genesis Diagnostics, is back at it again in this action, which was originally filed in New Jersey state court but was removed to federal court and then transferred to the Eastern District of Wisconsin. Abira provided medical laboratory tests for patients covered by Managed Health Services Insurance Corporation (MHS). Abira attempted to collect payment from MHS pursuant to assignments from 21 patients, but MHS “refused for various (allegedly) pretextual reasons or simply did not respond… MHS has not made payment, or has made only partial payments, toward certain claims totaling more than $58,069.00.” The court has already granted one motion to dismiss by MHS. Abira amended its complaint, and this order constituted the court’s ruling on MHS’ renewed motion to dismiss. The court noted that it did not have diversity jurisdiction because the amount at issue was insufficient, but Abira’s new complaint contained a federal claim under ERISA, which conferred subject matter jurisdiction. The complaint alleged claims for (1) unpaid ERISA plan benefits pursuant to 29 U.S.C. § 1132(a), (2) breach of contract in the alternative for any of the reimbursement claims not governed by ERISA, (3) breach of the duty of good faith and fair dealing, (4) promissory estoppel, and (5) quantum meruit/unjust enrichment. On Abira’s first claim for violation of ERISA, the court found that Abira’s amended complaint plausibly alleged that MHS issued employee benefit plans covering laboratory testing services and that MHS failed to pay according to those plans. MHS complained that Abira did identify which of its claims were governed by ERISA and which were not, and that Abira did not cite specific plan language entitling it to relief. However, the court ruled that Abira was allowed to plead in the alternative regarding claims that might be governed by federal or state law, and that it was not required by the Supreme Court’s Twombly/Iqbal rules to set forth specific plan language. As for Abira’s non-ERISA claims, the court ruled that (1) Abira plausibly alleged valid assignments of benefits from patients, which was sufficient to state a breach of contract claim, and that any defenses based on plan language could be raised by MHS later; (2) the complaint did not state a claim for bad faith because it did not plausibly allege bad faith conduct separate and independent from the underlying breach; (3) Abira could not bring its promissory estoppel claim because its allegations were incompatible and did not support a reasonable inference of reliance; and (4) the complaint did not state a claim for quantum meruit because the benefit conferred to the insured patients was not a direct benefit to MHS under Wisconsin law. Finally, MHS argued that 9 of the 21 claims at issue were untimely under Wisconsin’s six-year statute of limitations for contract claims. The court denied MHS’ motion on this ground, explaining that at this point it was unclear which claims were governed by ERISA and which were not, which would affect the applicable limitation period. (Given the length of time at issue, in some cases dating back to 2016, MHS will likely assert this defense again on summary judgment.) As a result, the court granted MHS’s motion only in part, dismissing all of Abira’s claims except its primary claims for benefits under ERISA and for breach of contract.
Remedies
Ninth Circuit
Woo v. Kaiser Foundation Health Plan Inc., No. 23-CV-05063-RFL, 2026 WL 980241 (N.D. Cal. Apr. 10, 2026) (Judge Rita F. Lin). In our February 4, 2026 edition, we detailed the court’s findings of fact and conclusions of law in this case, in which Sarah Woo contended that she was entitled to eligibility in a Kaiser Foundation pension plan pursuant to the doctrine of equitable estoppel. The court ruled for Woo and ordered the parties to meet and confer to prepare a proposed judgment. Unfortunately, the parties were unable to agree, which led them to submit separate proposals. In this two-paragraph order the court adopted defendants’ proposal. The court noted that it did “not conclude that Woo was, in fact, eligible to participate in the Plan, nor did it authorize perpetual participation in the Plan in contravention of the Plan’s eligibility requirements.” Instead, the court clarified that defendants were prohibited “from declaring Woo ineligible to participate in the Plan for the time period during which it was ambiguous whether she was eligible to participate in the Plan and she had detrimentally relied upon their representations that she was eligible.” Defendants, in their proposed judgment, offered “to provide Woo with a lump-sum payment in the amount equal to her pension benefits,” and for the court this offer “constitutes the sort of make-whole equitable relief that section 1132(a)(3) contemplates.” Woo provided no persuasive evidence to the contrary, and thus the court agreed with defendants “detailed explanation,” which was “sufficient to support Defendants’ proposed judgment.”
Statute of Limitations
Sixth Circuit
Armstrong v. Western & Southern Financial Grp., No. 1:24-CV-00424, 2026 WL 982712 (S.D. Ohio Apr. 13, 2026) (Judge Jeffery P. Hopkins). Barbara Armstrong worked as an insurance sales representative for Western & Southern Financial Group for eighteen years. While there, she participated in Western & Southern’s Long Term Incentive and Retention Plan. In early 2022 Armstrong informed Western & Southern of her intention to retire, and elected to commence receiving plan benefits in May of 2022. However, on February 17, 2022, Western & Southern “suspended Armstrong’s employment after notifying her that it was investigating allegations of potential sales practices policy violations.” It terminated her on April 28, 2022, “just days before Armstrong had elected to commence receiving Plan benefits,” alleging breaches of multiple company policies, and also denying her claim for benefits under the plan. Armstrong filed this action, asserting violations of ERISA Sections 510 and Section 502(a)(3), claiming that Western & Southern terminated her employment with the specific intent to interfere with her attainment and receipt of benefits under the plan and retaliated against her for seeking benefits. Western & Southern moved to dismiss, arguing that Armstrong’s claims were barred by both a contractual statute of limitations and the applicable Ohio statute of limitations. The court first discussed whether Armstrong had properly characterized her claims, or whether she had intentionally mispled them in an effort to avoid the applicable limitation period. The court agreed with Western & Southern that “Plaintiff’s claim is a benefits claim and 29 U.S.C. § 1132(a)(1)(B) is sufficient to provide a remedy.” As a result, Armstrong could not “repackage” her claim as one under Section 502(a)(3), which only provides a “safety net” for injuries not adequately remedied elsewhere in ERISA. Next, the court ruled that Armstrong failed to plausibly allege violations of Sections 510 and 502(a)(3). Armstrong contended that the denial of her claim was “pretextual and fabricated,” and a “scheme,” that involved “actively hid[ing] information from Plaintiff, such as the information about the allegations against her.” This was insufficient for the court because these allegations were not detailed enough to “permit a reasonable inference that Western & Southern was motivated to deny Plaintiff’s benefits because of her decision to retire” and did not demonstrate “specific intent of violating ERISA.” Finally, the court concluded that because Armstrong’s claim was one for benefits under Section 502(a)(1)(B), her claims were governed by the plan’s six-month contractual limitation period, which was enforceable because it was not “unreasonably short.” The plan’s final decision was issued on December 8, 2022, which meant that Armstrong had to file by June 8, 2023; however, she waited until August 12, 2024, which was too late. The court thus granted Western & Southern’s motion and dismissed Armstrong’s case with prejudice.