The biannual Civil Justice Reform Act reporting deadline is well and truly upon us, as the federal courts hurried last week to get their decisions in by today. As a result, we have a cornucopia of cases to report, with something for everyone.

Highlights include:

• The result of a six-day bench trial challenging Trader Joe’s management of its 401(k) plan, with both sides coming away winners (and losers) (Stephan v. Trader Joe’s Co.);

• A decision allowing a putative class action to proceed against Blue Shield of California for its alleged “ghost networks” of mental health providers (Roiz v. Blue Shield);

• Three cases questioning the use of forfeitures of unvested retirement plan contributions (Stephan v. Trader Joe’s, Cortez v. Rithm Capital, and Lapko v. United Wholesale Mortgage – plaintiffs went 1-2);

• Four disability benefit cases, two involving the very unpleasant diagnosis of cyclic vomiting syndrome (Macpeak v. Unum, Klusmann v. AT&T, Oliver-Smith v. Lincoln, and Young v. Aetna – plaintiffs went 3-1);

• Yet another case holding that the No Surprises Act does not bestow a private right of action on providers to enforce dispute resolution awards under the Act (Cal Spine v. Microsoft);

• A case addressing whether a life insurance beneficiary can obtain equitable relief under ERISA in the form of monetary surcharge (Vigil v. Taos Ski Valley; spoiler: yes);

• A decision slamming United Healthcare for “completely ignoring” pandemic conditions in misclassifying emergency treatment (Saucedo v. UnitedHealthcare);

• And last, but certainly not least, a case that asks whether falling and hitting your head is an “accident” if it’s preceded by having a stroke (Tegu-Watkins v. Hartford; spoiler: no).

Next week will likely be another busy edition as pre-deadline cases continue to flow in. Stay tuned!

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

Arbitration

Fifth Circuit

Hawkins v. Wells Fargo Bank, N.A., No. 3:26-cv-00026, 2026 WL 2905988 (S.D. Tex. Sept. 28, 2026) (Magistrate Judge Andrew M. Edison). Patrick Sean Hawkins, proceeding pro se, sued Wells Fargo Bank, N.A., the Wells Fargo & Company Short Term Disability Plan, and Lincoln National Life Insurance Company over disputes arising from his employment and termination at Wells Fargo. As part of his onboarding in 2022, Hawkins signed the Wells Fargo Mutual Arbitration Agreement, which required arbitration of legal claims arising out of his application for employment, employment, or separation from employment, defined broadly to include discrimination, harassment, retaliation, wrongful discharge, and claims for violation of any federal statute. However, the agreement expressly carved out from arbitration workers’ compensation claims, unemployment compensation claims, and claims for benefits under ERISA. His operative complaint asserts seven counts: wrongful denial of benefits under ERISA § 502(a)(1)(B) (Count I); equitable relief under ERISA § 502(a)(3) (Count II, since dismissed for failure to state a claim, as we recounted in our July 1, 2026 edition); interference and retaliation under ERISA § 510 (Count III); disability discrimination under the ADA (Count IV); disability discrimination under § 504 of the Rehabilitation Act (Count V); retaliation under the Rehabilitation Act (Count VI); and a declaratory judgment claim on arbitrability (Count VII). Hawkins moved for a declaratory judgment that Counts III through VI were not arbitrable, while the Wells Fargo defendants moved to compel arbitration of those same counts. (Meanwhile, Lincoln stayed above the fray.) By the time of briefing, Hawkins had conceded that Counts IV, V, and VI must be arbitrated, and both sides agreed Count I fell within the ERISA-benefits carve-out and would remain in court. That left a single disputed question: whether Hawkins’s ERISA § 510 interference and retaliation claim, Count III, had to be arbitrated. Applying the Fifth Circuit’s two-step framework from Polyflow, LLC v. Specialty RTP, LLC, the magistrate judge considered “(1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement.” The parties stipulated to the agreement’s validity, leaving only the scope question. The court found that Count III fell squarely within the agreement’s broad “Covered Claims” language, which reached claims for discrimination, retaliation, and wrongful discharge, including violations of “any federal…statute.” The magistrate concluded that Hawkins’s allegations that Wells Fargo terminated him at least in part because of his pursuit of ERISA benefits and his communications with the Department of Labor described precisely the kind of retaliation and wrongful termination claim the agreement’s Covered Claims provision was written to reach. The court rejected Hawkins’s argument that the ERISA carve-out swept in his § 510 claim, explaining that the carve-out applied only to “claims for benefits” under ERISA, while a § 510 claim challenges the legality of an employer’s conduct and motivation rather than seeking benefits. The court observed that, “[t]ellingly, Hawkins cannot point to a single case holding that an ERISA § 510 claim is outside the scope of a similarly worded arbitration provision.” The court thus held that the arbitration agreement encompassed Count III. As for case management, the court exercised its discretion to lift the arbitration stay as to Count I while keeping Counts III through VI stayed pending arbitration.

Breach of Fiduciary Duty

First Circuit

Piercy v. AT&T Inc., No. 24-10608-NMG, 2026 WL 2905359 (D. Mass. Sept. 28, 2026) (Judge Nathaniel M. Gorton). The plaintiffs in this action are retired AT&T employees and former participants in the AT&T Pension Benefit Plan, a traditional defined benefit plan. AT&T engaged in a pension risk transfer (PRT) transaction that terminated the plan in exchange for group annuity contracts issued by Athene Annuity & Life Company and Athene Annuity & Life Assurance Company of New York, subsidiaries of Athene Holding Ltd. (collectively “Athene”). Because annuity contracts are not protected by ERISA, even though pension risk transfers are expressly permitted by the statute, plaintiffs alleged that the choice of annuity provider was crucial. AT&T delegated the fiduciary task of selecting that provider to State Street Global Advisors (SSGA), which chose Athene. Plaintiffs allege that Athene was a substandard insurer offering less valuable annuities than permitted by the Department of Labor (in Interpretive Bulletin 95-1), which “requires that the annuity provider selected be sufficiently competent to protect the participants’ investments.” Plaintiffs contend that AT&T and SSGA breached their fiduciary duties of loyalty and prudence by choosing Athene. Previously, defendants moved to dismiss, and in September of 2025, the court accepted and adopted Magistrate Judge Paul G. Levenson’s First Report and Recommendation (R&R), dismissing plaintiffs’ original complaint. (Your ERISA Watch covered the magistrate’s R&R in our September 10, 2025 edition.) Plaintiffs filed an amended complaint, and defendants again moved to dismiss. On this round, Magistrate Judge Levenson issued a Second R&R finding that the amended complaint contained no new material facts as to plaintiffs’ disloyalty and prohibited transaction theories, warranting dismissal of Counts I through III and V through X for the same reasons as before. However, the magistrate ruled that plaintiffs had cured the defects previously identified in Count IV, their duty of prudence claim against SSGA, with new factual allegations sufficient to survive dismissal. Both AT&T entities and SSGA defendants objected to the Second R&R on Article III standing grounds and, as to SSGA, on the sufficiency of the prudence allegations; plaintiffs separately objected to the recommendation that AT&T itself was not liable for the selection of Athene. Addressing standing first, the court held that the law of the case doctrine foreclosed revisiting the standing determination already made in the First R&R and adopted by the court. The court reiterated that “plaintiffs were directly harmed by receiving a riskier and less valuable financial product, an annuity, than they were entitled to,” that the inability to sell the annuities did not change that conclusion, and that “showing a loss of value is sufficient to establish standing; plaintiffs need not show that there is an imminent risk of the provider’s insolvency.” Turning to the duty of prudence claim against SSGA, the court declined at the pleading stage to resolve whether the “risk-based capital ratio” SSGA favored was the superior comparator metric to the five metrics plaintiffs used to compare Athene against other providers. The court likewise declined to limit the relevant comparator pool to “annuity providers that compete in multi-billion-dollar PRT transactions… Identifying other annuity providers available for the AT&T PRT and comparing those providers to Athene is a factual analysis best resolved at a later stage of the litigation.” The court also declined to wade in to the issue of whether Athene’s “separate account could provide additional protection of assets,” finding at the pleading stage that it “will take plaintiffs’ factual allegations regarding the riskiness of Athene’s separate account as true.” Having resolved defendants’ objections, the court turned to plaintiffs’. Plaintiffs objected to the Second R&R’s finding that AT&T was not liable for selecting Athene. The court applied the settlor-versus-administrator distinction from the Supreme Court’s 2007 ruling in Beck v. PACE Int’l Union, under which the decision to terminate a plan is “a settlor function immune from ERISA’s fiduciary obligations” while selecting an annuity provider is a fiduciary administrative function. The court found that AT&T had effectively delegated the selection function to SSGA and retained only the authority to purchase the annuities SSGA recommended. There were “no allegations that AT&T: meddled in the selection process, ignored red flags, or failed in their monitoring obligations, or even knew that SSGA had breached its fiduciary duty in purchasing the annuity contracts from Athene.” As a result, “Purchasing the annuity contracts offered by Athene at the direction of SSGA, without more, is not enough to support an inference that AT&T is liable for breach of its fiduciary duty.” The court thus accepted and adopted the Second R&R in its entirety. The case will proceed on Count IV only. (Disclosure: Kantor & Kantor is one of the firms representing plaintiffs in this matter.)

Stephan v. Trader Joe’s Co., No. 25-10212-WGY, 2026 WL 2905797 (D. Mass. Sept. 28, 2026) (Judge William G. Young). The plaintiffs in this case are current and former crew members of Trader Joe’s who brought this class action on behalf of participants in the company’s defined contribution 401(k) plan against the company, its board of directors, and the plan’s investment committee. Plaintiffs alleged that defendants breached their fiduciary duties of prudence and loyalty under ERISA in three ways: (1) by failing prudently to monitor and negotiate the recordkeeping fees paid to Capital Group Retirement Plan Services, the plan’s recordkeeper and trustee; (2) by imprudently and disloyally retaining the American Funds Growth Fund of America (GFA), an actively managed fund affiliated with Capital Group, on the plan’s investment menu; and (3) by disloyally allocating forfeited, non-vested company contributions to offset the company’s own contributions to the plan rather than for the exclusive benefit of participants. A derivative fourth count alleged that the company and the board failed to monitor the committee. In describing the relationship between the parties, the court observed that Trader Joe’s and Capital Group “enjoy a long standing, mutually beneficial, indeed rather cozy relationship,” given that the plan required offering a minimum of three Capital Group investment options. The court found this “problematic,” and if one of these options was “non-productive, the Committee would have an unswerving fiduciary duty to Trader Joe’s employees to get rid of such plan.” However, the court found that “no such conflict is remotely present in the instant case” and “cites the possibility only to emphasize the relationship.” The court recounted the history of the case, which involved a denied motion to dismiss in July 2025, after which the plaintiffs dropped a separate anti-inurement count, and the court certified a class. The parties then stipulated to narrow the scope of plaintiffs’ claims ahead of summary judgment, and the court denied summary judgment as to the recordkeeping and GFA claims while taking the forfeiture issue under advisement, later denying summary judgment on that issue as well. The case proceeded to a six-day bench trial in May of this year, during which the court granted the defendants judgment on partial findings as to the forfeiture claim but denied the remainder of the motion. This order represented the court’s post-trial findings of fact and rulings of law under Federal Rule of Civil Procedure 52. The court addressed forfeitures first, explaining that the plan designated the company, not the committee, as the body responsible for allocating forfeited funds, and that the committee’s role was limited to ensuring the company applied those forfeitures consistently with the plan’s terms. The evidence showed it did. Because the plaintiffs failed to show either that the committee obtained a benefit at the plan beneficiaries’ expense or that it failed to account for all relevant information, the court ruled for defendants without reaching loss or causation. On the GFA claim, the court reiterated that prudence turns on process rather than results, and found that the committee had conducted a “sufficiently robust process,” using more than the investment policy statement’s (IPS) two threshold review criteria, repeatedly placing the fund on and off a watch list, and considering manager tenure, expense ratios, risk-adjusted returns, and Morningstar ratings alongside its dual benchmarks. The court was unpersuaded by plaintiffs’ first expert, who evaluated only the two IPS criteria and admitted that once those criteria were satisfied, a fiduciary could, in his view, “turn the page, and go have a cup of coffee.” The court interpreted this as demonstrating the narrowness of his analysis rather than any deficiency in the committee’s broader process. In the end, “The Committee engaged in a sufficiently robust process in reviewing the GFA by taking into consideration several varied criteria as permitted by the IPS, and closely and consistently monitoring the GFA’s performance over the class period.” Trader Joe’s had less success with plaintiffs’ recordkeeping claim. The court found that the committee never conducted a genuine request for proposals or request for information, relying instead on a so-called “soft RFP” that was, in the court’s words, not “an industry-recognized term or process,” and that the one ($8-per-participant) fee reduction the plan obtained was volunteered by Capital Group rather than negotiated. The absence of any competitive market testing for a plan of Trader Joe’s size, the court held, “is what is the nail in the Defendants’ coffin,” establishing a breach of the duties of both prudence and loyalty. As for loss, the court ruled that plaintiffs “only needed to show that an alternative fee was a prudent alternative, and not the only prudent fee,” and that testimony from their second expert satisfied this low bar. On causation, the court held that defendants failed to show a hypothetical prudent fiduciary would have acted as they did, reasoning that “a notification from Capital Group informing the Committee of a reduced fee does not count as a negotiation.” Because the recordkeeping breach was established, the court held that the company and board also breached their derivative duty to monitor the Committee. In determining an appropriate equitable surcharge remedy, however, the court declined to use plaintiffs’ second expert’s $21-per-participant calculation. The court found that “Trader Joe’s has the better of the argument” that the expert’s methodology, while sufficient to establish liability, did not persuasively show that the $21 rate was actually attainable. Instead, relying on the “only actual price in evidence” – the $40 fee Capital Group extended without prompting – the court inferred that this rate should have been secured from the start of the class period, yielding $715,264 in overpaid recordkeeping fees. Applying Massachusetts’s 12% simple statutory interest rate, the court added prejudgment interest of $471,957, resulting in a judgment in plaintiffs’ favor of approximately $1.2 million.

Third Circuit

Koroly v. Federated Hermes Inc., No. 2:23-01563, 2026 WL 2855657 (W.D. Pa. Sept. 23, 2026) (Judge Robert J. Colville). Federated Hermes, Inc. (FHI) is a Pittsburgh-based publicly traded investment management company that sponsors and administers a defined contribution 401(k) plan for its employees. At the end of 2021 the plan had 1,814 participants and held approximately $660 million in assets. Nicholas Koroly, a former FHI employee, participated in the plan and held two of its investment options, the Mid-Cap Index Fund and the Kaufmann Large Cap Fund. Throughout the time period at issue, every designated investment option in the plan, aside from a lightly used self-directed brokerage window, was a fund managed by FHI or one of its subsidiaries. Koroly alleged that a prudent fiduciary would ordinarily draw on multiple outside managers rather than rely on a wholly proprietary lineup. He further alleged that most of the FHI funds were “chronic underperformers,” that outside investors had fled several of the funds even as plan assets kept flowing in, “leaving the Plan’s participants as captive base investors,” that newly launched funds with no track record were added to the lineup, and that the plan’s recordkeeping fees of $79 to $90 per participant substantially exceeded the $37.67 to $52.58 per participant paid by four comparably sized plans. Koroly sued FHI and related defendants on behalf of a class of plan participants, asserting a breach of fiduciary duty claim combining theories of imprudence in selecting and monitoring investments and charging recordkeeping fees, a duty of loyalty claim, two prohibited transaction claims under 29 U.S.C. § 1106(a) and (b), and a failure to monitor claim. Defendants moved to dismiss. First, the court rejected defendants’ jurisdictional argument that Koroly lacked standing because he “has no viable claim as to the two funds he held.” The court found that their argument “places the cart before the proverbial horse” by attempting to fold the merits of Koroly’s claim into a standing analysis. The court ruled that Koroly properly alleged losses in his two funds and thus had standing; “[w]hether Plaintiff can prove such losses is a merits question.” The court also held that Koroly could challenge the administration of the other funds in the plan in which he did not invest. His claims “speak to a single course of conduct respecting the Plan, rather than a series of decisions respecting individual funds. The funds held by Plaintiff are alleged to have been affected by this course of conduct.” As a result, the court rejected defendants’ standing arguments. Turning to the duty of prudence claim, the court declined defendants’ invitation to conduct a “piece-by-piece parsing” of the funds at issue, and instead took a “holistic approach” to determining whether Koroly had alleged a flawed fiduciary process. The court credited Koroly’s alleged pattern of an all-proprietary fund menu, chronic underperformance against fiduciary-selected benchmarks, continued investor attrition, and the addition of unproven newly launched funds as substantial circumstantial evidence supporting a fiduciary duty claim. The court rejected defendants’ argument that Koroly had not properly alleged a “meaningful benchmark” for two reasons. First, Koroly had alleged as comparators “funds that Plan fiduciaries had themselves identified as appropriate benchmarks.” Second, the Third Circuit has not endorsed a “meaningful benchmark” requirement (although the court noted that the Supreme Court had granted certiorari in Anderson v. Intel Corp. Investment Policy Committee to address the question). The court likewise sustained the recordkeeping fee theory, finding Koroly’s comparison to four similarly sized plans sufficient even though “some of Plaintiff’s comparisons are weak, even for the pleading stage.” The court declined to consider defendants’ competing Morningstar data, prospectuses, and Form 5500 filings at this time because they were outside the pleadings. The court also upheld the duty of loyalty claim, rejecting defendants’ argument that it merely recast the prudence claim, concluding that the alleged pattern of retaining underperforming proprietary funds supported an inference that defendants selected and retained FHI’s funds to benefit FHI rather than participants. As for the prohibited transaction claims, the court held that Koroly was not required to plead around any statutory or regulatory exemptions because exemptions are affirmative defenses that defendants are required to prove, not elements a plaintiff must negate. The court further found that Koroly satisfactorily alleged that “FHI, a fiduciary with discretionary authority over the Plan, used [its] authority to place Plan money in funds managed by itself or its subsidiaries, and then collected fees from those investments. Such an arrangement, if proven, is arguably classic self-dealing.” Finally, the court dismissed the failure to monitor claim, finding the complaint “alleges no facts about which Defendant made appointments or about the lack of an oversight procedure.” In the end, the court granted in part and denied in part defendants’ motion to dismiss, allowing Koroly leave to amend.

Fifth Circuit

Cortez v. Rithm Capital LLC, No. 3:25-CV-2462-K, 2026 WL 2839393 (N.D. Tex. Sept. 22, 2026) (Judge Ed Kinkeade). Rithm Capital LLC, an investment management company, sponsors and administers a defined contribution 401(k) plan for its employees. Samantha Cortez, a former Rithm employee, participated in the plan during her employment. Under the plan’s terms, a participant’s own contributions vest immediately, while Rithm’s matching employer contributions vest only after four years of employment; contributions forfeited by employees who leave before vesting are held in a forfeiture account until reallocated. From 2019 through 2024, Cortez alleges that Rithm used forfeited plan assets to offset its contributions rather than to defray the plan’s administrative expenses, which were charged to participants’ accounts. Cortez thus brought this putative class action, alleging that Rithm’s allocation choice violated ERISA because it “benefitted the employer rather than plan participants and did so without engaging in a prudent and loyal fiduciary decision-making process.” Her operative complaint asserted six counts: (1) breach of the duty to follow the plan document, (2) breach of the duty of loyalty, (3) breach of the duty of prudence, (4)-(5) two prohibited transaction and self-dealing claims under 29 U.S.C. § 1106(a) and (b), and (6) violation of ERISA’s anti-inurement provision. Rithm moved to dismiss all six counts for failure to state a claim. The court addressed all the claims in order, beginning with Count I, which Cortez abandoned during briefing. The court dismissed it without prejudice. On Count II (breach of the duty of loyalty), the court joined what it described as the “majority view” among courts, which have rejected the “novel legal theory under which it is a breach of fiduciary duty to allocate forfeited amounts to reduce employer contributions rather than to pay administrative costs.” The court explained that ERISA requires fiduciaries to deliver the benefits a plan actually promises rather than to maximize participants’ account values, and that Cortez did not allege she received less than the plan promised, only that her account “could have been larger.” The court further stated that both ERISA and the plan document expressly permitted Rithm to apply forfeitures either to administrative expenses or to offset its own contributions. Thus, “choosing among uses that ERISA and the Plan alike permit is not, without more, evidence of disloyalty.” Count II was dismissed without prejudice. By contrast, the court quickly found Cortez’s duty of prudence claim in Count III could proceed. That claim alleged there was a flawed fiduciary decision-making process, and that Rithm allowed forfeitures to remain unallocated at the end of plan years. Count VI (anti-inurement) was similarly upheld. As for the prohibited transaction claims in Counts IV and V, the court again followed the majority of courts, holding that Cortez failed to plausibly allege any specific prohibited transaction. “[W]hile Plaintiff does allege that Plan Fiduciaries authorized ‘tens of thousands of transactions,’…Plaintiff does not describe these transactions or plausibly explain why they are prohibited.” The court agreed with the majority view that a Section 406(b) self-dealing claim requires pleading a “transaction” even though the statutory text does not itself use that word: “the structure and purpose of Section 406 show that subsection (b) is aimed at a species of prohibited transactions: ones involving self-dealing… Plaintiff fails to plead such a transaction for her Section 406(b) claim.” As a result, the court granted in part and denied in part Rithm’s motion to dismiss, denying it as to Count III (duty of prudence) and Count VI (anti-inurement) and granting it as to Counts I, II, IV, and V, which were dismissed without prejudice. The court allowed amendment “[i]n light of the evolving law surrounding ERISA forfeiture claims.”

Sixth Circuit

Lapko v. United Wholesale Mortgage LLC, No. 2:25-cv-11216, 2026 WL 2861609 (E.D. Mich. Sept. 23, 2026) (Judge Susan K. DeClercq). United Wholesale Mortgage LLC (UWM), the largest mortgage lender in the United States, sponsors a defined contribution profit sharing plan for its employees that holds roughly $150 million in assets and has more than 7,000 participants. The plan is administered by a committee whose members are appointed by UWM’s board of directors. Participant accounts are funded by employee wage withholdings and UWM’s matching contributions, with full vesting of UWM’s contributions occurring after five years of credited service. When an employee leaves before vesting, the unvested portion of the account is forfeited. Under the plan’s terms, the Plan Committee “may” use annual forfeitures to pay administrative expenses, and any forfeitures not so used “shall” instead be applied to reduce UWM’s contributions. Former UWM employees and plan participants Kristopher Lapko, Alan Tucsok, and Becky Forbush alleged that from 2018 through 2023 UWM and the committee improperly used plan forfeitures to reduce UWM’s contribution obligations rather than to defray administrative expenses, allegedly costing participants tens of millions of dollars. They also alleged a structural conflict of interest because UWM functioned as both plan sponsor and, through its appointed committee, plan administrator. Plaintiffs sued individually and on behalf of a putative class of plan participants and beneficiaries, asserting breach of the duty of loyalty and breach of the duty of prudence against the committee, two prohibited transaction claims under 29 U.S.C. § 1106(a)(1)(D) and (b), and a derivative failure to monitor claim against UWM. Defendants moved to dismiss for failure to state a claim. Addressing the duty of loyalty claim first, the court held that the plan’s forfeiture provision was permissive, not mandatory, because it provided that forfeitures “may” be used to pay administrative expenses. “Plaintiffs are correct that this is a discretionary decision for the Plan Committee to make, but Plaintiffs’ reasoning would take this discretion away from the Plan Committee by requiring forfeitures to be used for administrative expenses.” The court found this “contrary to ERISA’s functions” because ERISA exists to protect the benefits a plan promises rather than maximize participants’ account values. “ERISA does not transform the Plan’s discretionary choice into a fiduciary breach merely because another permissible choice could have produced a greater economic benefit for participants.” On the duty of prudence claim, the court found plaintiffs had largely repackaged their loyalty theory and had not alleged facts showing that the committee’s chosen process was actually imprudent, as opposed to merely alleging that a different, permissible choice might have yielded a larger participant benefit. The court also rejected plaintiffs’ argument that UWM’s dual role as plan sponsor and, through its appointed committee, as administrator created a disqualifying conflict, noting that ERISA expressly permits an employer to serve as both plan sponsor and administrator. “Plaintiffs’ arguments about conflicts of interest do not identify a uniquely imprudent process by Defendants but rather insufficiently challenge the fundamental principles regarding who can be a plan administrator.” Turning to the prohibited transaction claims, the court held that transferring forfeiture funds to offset UWM’s own contributions was not the kind of commercial, insider-favoring “transaction” Section 1106 was designed to police. The transfers remained plan assets used to fund promised participant benefits rather than assets diverted outside the plan. “It seems contradictory to argue that using forfeitures to match employee contributions is to the Plan’s detriment when doing so keeps the Plan funded and fulfills its promise to Plan participants and beneficiaries.” The court further relied on Sixth Circuit precedent (Holliday v. Xerox Corp.) to find that “[a] transaction for the ‘benefit’ of an interested party does not include transferring plan assets among employee accounts under a legitimate retirement plan.” Any benefit to defendants from using forfeited funds to offset contribution obligations was merely an “incidental side effect.” The court acknowledged an active split among courts outside the Sixth Circuit on whether such reallocations constitute prohibited transactions at all, but stated, “this Court is not free to decline to follow the Sixth Circuit.” Thus, both prohibited transaction counts were dismissed. Finally, because plaintiffs’ underlying breach of fiduciary duty and prohibited transaction claims failed, their derivative failure to monitor claim failed as well. The court granted defendants’ motion to dismiss in its entirety.

Tenth Circuit

Vigil v. Taos Ski Valley, Inc., No. 1:25-cv-01323-KWR-JFR, 2026 WL 2883448 (D.N.M. Sept. 25, 2026) (Judge Kea W. Riggs). Anthony Vigil began working for Taos Ski Valley, Inc. in 1982 and was covered under two ERISA-governed group life insurance programs sponsored by Taos and insured by Lincoln National Life Insurance Company. The first was employer-paid Personal Life Insurance, and the second was employee-paid Voluntary Life Insurance. The latter was funded through withholdings from Vigil’s paycheck that Taos remitted to Lincoln. After Vigil was diagnosed with cancer in 2018, he continued working until 2022; after that date Taos paid him through unused vacation and sick leave, continued his Personal Life Insurance premiums, and withheld his Voluntary Life Insurance premiums for Lincoln. In March of 2023, Taos initiated a long-term disability claim on Vigil’s behalf, which Lincoln approved, and Vigil was terminated shortly thereafter. Vigil and his wife, Hilda, who was also the beneficiary of his life insurance coverage, emailed Taos that month asking about maintaining that coverage. Hilda alleged Taos never responded, although Taos attached to its answer a March 2023 email directing the Vigils to contact Lincoln directly. Vigil died in 2024, and Hilda filed a claim under both policies with Lincoln. Hilda alleged that Lincoln learned that coverage had not been ported or converted and offered to reinstate it if Taos paid the accrued back premiums. Hilda alleged that Taos told Lincoln its “client consult” had concluded Vigil had lost coverage when he went on disability, refused to pay the premiums, and never informed Hilda of this exchange. Lincoln subsequently denied her claim, and this action ensued. Hilda sued Taos under a single count for breach of fiduciary duty pursuant to ERISA § 502(a)(3), seeking equitable surcharge of the roughly $95,000 in lost life insurance proceeds plus interest, along with attorneys’ fees under § 1132(g)(1). Taos moved for judgment on the pleadings under Rule 12(c), arguing that Hilda’s requested remedy was “explicitly barred by Tenth Circuit precedent,” that Taos owed and breached no duty, and that Taos did not cause Hilda’s alleged injury. The court first addressed the issue of whether equitable surcharge is available under § 502(a)(3). Taos relied on the Tenth Circuit’s holding in Callery v. U.S. Life Insurance Co. that a beneficiary “may not be awarded compensatory damages as ‘appropriate equitable relief’” under that provision. The court found that Callery had been superseded by the Supreme Court’s later decision in CIGNA Corp. v. Amara, and noted that “the weight of the majority of other circuits persuades and unpublished 10th Circuit opinion marshal allowing make-whole monetary relief as an equitable remedy under § 502(a)(3).” The court observed that the Tenth Circuit has twice recently declined to resolve the question directly, by reserving it in Stark v. Reliance Standard Life Ins. and remanding it to the district court in Watson v. EMC Corp. (Stark was the case of the week in our July 16, 2025 edition, and Watson (in which Kantor & Kantor successfully represented the plaintiff) was the case of the week in our February 14, 2024 edition.) The court was “careful not to overread Watson,” but noted that Callery was not mentioned in the decision, which suggested that it no longer controlled. The court also rejected Taos’s alternative argument that surcharge requires an “identifiable fund” or “res,” explaining that the res requirement applies only to equitable liens, not to surcharge, and that Amara itself imposed no such limitation. Turning to the merits, the court agreed with Taos on one narrow point. Because Hilda did not dispute the authenticity of the March 2023 email exchange attached to Taos’s answer, and because that exhibit was central to her pleading, the court ruled that any claim against Taos could not be based on an allegation that Taos never responded to her March 2023 inquiry. However, this failure did not doom her claim, because the court found it was separately and adequately supported by the June 2024 nondisclosure allegations. The court, again citing Watson, held that Hilda plausibly alleged Taos acted as a functional fiduciary in administering Vigil’s coverage, remitting his premiums, assisting his disability claim, and communicating with Lincoln about reinstatement. Furthermore, Taos plausibly breached its duty by failing to disclose Lincoln’s material offer to reinstate coverage. Hilda also adequately alleged actual harm in the loss of the policy’s value, and adequately alleged causation notwithstanding Taos’s argument that any refusal to remit premiums could not, as Taos put it, “reverberate backward through time to cause the claims to be denied in the first place.” The court rejected this argument because “[d]espite what occurred in 2023, the lapse was curable as of June 2024, and Lincoln had offered the cure to Defendant. The distinct injury that Plaintiff alleges, and Defendant elides, is the lost opportunity.” Hilda “would have happily stepped in and paid the back premiums or reimbursed [Defendant] the less than $1,300 that would have resulted in her receiving $95,000.” As a result, the court denied Taos’s motion for judgment on the pleadings.

Class Actions

Sixth Circuit

Cumalander v. BlueCross BlueShield of Tenn., Inc., No. 1:24-cv-176, 2026 WL 2907477 (E.D. Tenn. Sept. 28, 2026) (Judge Travis R. McDonough). William Cumalander was a participant in an ERISA-governed health benefit plan administered by BlueCross BlueShield of Tennessee, Inc. (BCBST). After being diagnosed with prostate cancer in 2022, Cumalander sought proton beam radiation therapy (PBRT), which BCBST denied under his plan’s medical policy on the ground that PBRT was “investigational” for prostate cancer. Under the plan, “investigational” means treatment that fails to satisfy any of four criteria tied to regulatory approval, scientific evidence, net health outcomes, and attainability outside investigational settings. To be covered, treatment must be both medically necessary and not investigational. The PBRT medical policy designated PBRT as investigational for 21 specific conditions, including prostate cancer, unless “unique clinical circumstances” made the treatment medically appropriate for a particular member. Cumalander filed this putative class action in 2023 alleging that BCBST breached the terms of the plan and its fiduciary duties by designating PBRT as investigational for prostate cancer. He later moved to certify a class of all persons covered by ERISA-governed plans administered or insured by BCBST whose requests for PBRT to treat prostate cancer were denied within the applicable limitations period based on BCBST’s investigational determination. Addressing the Rule 23(a) prerequisites first, the court found numerosity satisfied because the parties agreed at least 74 class members existed and were geographically dispersed across eight states. The court held this would make joinder impractical and would impose “expense and delay that serve no useful purpose,” even though BCBST argued the members were “easily identifiable and most live in Tennessee.” On commonality, the court rejected BCBST’s argument that individualized “unique clinical circumstances” determinations defeated a common question, explaining that this framing “does not match how the PBRT Policy actually works.” The question of “whether the Plan incorrectly deemed PBRT for prostate cancer as ‘investigational’ instead of ‘medically necessary’… can be resolved on a class-wide basis, so Plaintiff has satisfied his burden on commonality.” The court found typicality and adequacy satisfied as well, noting that these inquiries “‘tend to merge’ with the commonality inquiry… The law and facts relating to the claims of the putative class members are nearly identical to and are fairly encompassed in Plaintiff’s claims.” The court thus turned to Rule 23(b), where Cumalander had less success. The court held that certification under both 23(b)(1)(A) and 23(b)(2) was inappropriate because the proposed class sought individualized monetary relief, including unpaid benefits and damages to be proven at trial, that was “more than ‘incidental to the injunctive and declaratory relief’ that a class seeks.” The court stated that sub-classes are necessary where monetary damages are at issue, resulting in “bifurcated certification: subrule (b)(2) certification for contract interpretation, and subrule (b)(3) certification of classes and subclasses for determining damages.” The court also noted that the inability of class members to opt out under either provision “raises due process concerns.” The court then addressed Rule 23(b)(3)’s predominance requirement, which it described as “even more demanding” than Rule 23(a)’s commonality standard. Although the court agreed that the common question of whether BCBST incorrectly designated PBRT as investigational predominated as to liability, it held that each putative class member’s damages would require highly individualized inquiries into PBRT treatment costs and other losses flowing from the denial of coverage, and that this individualization defeated predominance notwithstanding the existence of a genuinely common liability question. The court thus denied Cumalander’s motion for class certification under Rule 23(b)(3). (Disclosure: Kantor & Kantor is one of the firms representing Cumalander in this matter.)

Ninth Circuit

Platt v. Sodexo, S.A., No. 8:22-cv-02211-DOC-ADS, 2026 WL 2871269 (C.D. Cal. Sept. 21, 2026) (Judge David O. Carter). Robert Platt was an employee of Sodexo, S.A. and a participant in Sodexo’s ERISA-governed group health plan, which imposed a nicotine surcharge on covered employees. Platt alleged that Sodexo’s administration of the surcharge violated both ERISA’s statutory requirements and the terms of the plan document governing the surcharge program, and that Sodexo separately breached the fiduciary duties it owed to the plan. Platt sued Sodexo, S.A. (the French parent company) and Sodexo, Inc. (its American subsidiary) individually and on behalf of proposed classes of similarly situated plan participants who had been subjected to the surcharge. This case has already been up to the Ninth Circuit, which, in a published opinion last year, ruled on various arbitration issues. The appellate court determined that (a) Platt did not consent to arbitration on his individual claims, (b) a valid arbitration agreement between the plan and Sodexo might exist, but (c) Platt could raise unconscionability defenses to it, and (d) the representative action waiver in the arbitration agreement violated the effective vindication doctrine. (This decision was Your ERISA Watch’s case of the week in our August 13, 2025 edition.) Before the court here was Platt’s motion to certify three separate classes: a “Statutory Violations Class” and a “Plan Terms Violation Class,” both sought under Federal Rule of Civil Procedure 23(b)(3), and a “Plan Fiduciary Duty Class” sought under Rule 23(b)(1). The court briskly granted the motion. It first found that Platt satisfied all four threshold requirements of Rule 23(a) for each of the three proposed classes. It found numerosity readily satisfied given the size of the class, commonality satisfied because class members sought to litigate common questions regarding Sodexo’s potential violations of ERISA and its own plan policies, typicality satisfied because Platt, like other class members, was injured as a Sodexo employee subject to the nicotine surcharge, and adequacy satisfied because Platt had no interests adverse to or conflicting with other class members and had already demonstrated, through his time and effort litigating the case, a commitment to advocating vigorously on the class’s behalf. Turning to Rule 23(b), the court held that both the Statutory Violations Class and the Plan Terms Violation Class satisfied Rule 23(b)(3)’s predominance and superiority requirements. This was because resolution of the Statutory Violations Class’s claims turned on the single common question of whether Sodexo’s nicotine surcharge policy complied with ERISA, and resolution of the Plan Terms Violation Class’s claims turned on the common question of whether Sodexo adhered to its governing plan document. The court further found that a class action was the superior vehicle for both because the cost of individual litigation would likely exceed any individual class member’s potential damages. As for the Plan Fiduciary Duty Class, the court held that Rule 23(b)(1) certification was appropriate because permitting individual lawsuits over the same alleged breaches would risk inconsistent adjudications and incompatible standards of conduct for Sodexo, a risk a unified class action would eliminate. The court thus granted Platt’s motion for class certification as to all three proposed classes.

Disability Benefit Claims

Third Circuit

Macpeak v. Unum Life Ins. Co. of America, No. 2:24-cv-01650-MKC, 2026 WL 2906206 (E.D. Pa. Sept. 28, 2026) (Judge Mary Kay Costello). Kathleen Macpeak is a securities lawyer at Morgan Lewis & Bockius LLP who suffers from, among other conditions, migraines and cyclic vomiting syndrome. She began her career there as an associate in 1999, left temporarily for in-house and other firm positions between 2002 and 2014, and returned in 2014. She practiced full-time until February 2015, when she reduced her schedule to 80 percent because of her health, and further reduced it to ten percent in September 2017; she continues to practice part-time. Unum Life Insurance Company of America paid Macpeak benefits under the firm’s ERISA-governed long-term disability plan from September 2017 through November 2023. The plan defined disability as being “limited from performing the material and substantial duties” of one’s “regular occupation.” Notably, the plan defined “regular occupation” differently for attorneys; it included the attorney’s “specialty in the practice of law” as part of the definition. At the time of her initial evaluation, Macpeak’s of counsel role was described as a specialized, high-level securities position involving research on regulatory law, drafting documents for mutual funds and investment products, client contact, and supervision of junior associates. However, Unum’s 2019 vocational review evaluated her occupation generically as “Attorney,” and, despite briefly noting her work “advising on various regulatory compliance and securities law issues,” went on to attribute to her “a broad array of general attorney duties that did not apply to Plaintiff’s specialty, such as performing trial work, conducting pretrial preparation, defending the organization in lawsuits, advising on tax matters, applying for patents and copyrights, examining advertising materials, settling labor disputes, and teaching college courses in law.” In November of 2023, relying on two physician reviews that assessed only the generic physical and cognitive demands of attorneys rather than Macpeak’s actual duties, Unum determined she was no longer limited from performing her regular occupation and terminated her benefits. On appeal, a third physician conducted the same generic analysis, and Unum upheld the termination in 2024. This suit followed under ERISA § 502(a)(1)(B). The parties agreed that the plan vested Unum with discretionary authority, so the court applied the abuse of discretion standard. The court began by stating that when a plan defines disability by reference to a claimant’s regular occupation, the administrator must evaluate the actual, material, and substantial duties the claimant routinely performed, and that while an administrator’s reasonable interpretation of ambiguous plan language ordinarily receives deference, that interpretation “may not conflict with the plain language of the plan.” It is therefore “unreasonable for an administrator to ignore an insured’s specialized duties and treat the claimant as a generalist.” The court found that Unum’s reliance on the generic duties of an attorney rather than Macpeak’s duties as a securities lawyer conflicted with the plan’s attorney-specific definition of regular occupation. The court rejected Unum’s argument that the 2019 vocational review adequately captured her specialty, finding that although the reviewer acknowledged some of Macpeak’s actual work in her introduction, “she then completely ignored it in her analysis and instead applied the general duties of an attorney.” Furthermore, Unum’s medical reviewers, at Unum’s request, “evaluated Plaintiff’s capabilities against the general duties of an attorney rather than the duties of a securities lawyer… In fact, the record is devoid of any indication that Defendant ever measured Plaintiff’s limitations against her actual duties.” Unum’s denial was thus an abuse of discretion because it “fail[ed]to adhere to the plain language of the Plan.” As for a remedy, the court ruled that because Unum had arbitrarily terminated already-approved benefits, retroactive reinstatement, rather than remand, was appropriate.

Sixth Circuit

Klusmann v. AT&T Umbrella Benefit Plan No. 1, No. 5:24-CV-1295, 2026 WL 2905335 (N.D. Ohio Sept. 28, 2026) (Judge Pamela A. Barker). Todd Klusmann worked for AT&T Services, Inc. as a Customer Service Specialist beginning in 2000, a physically demanding role rated at a heavy level of exertion that involved splicing and maintaining outside telephone plant equipment. In 2020, Klusmann suffered a bike accident that caused retrograde and antegrade amnesia, a brain hematoma later diagnosed as a cavernous angioma of the left temporal lobe, and a fractured elbow requiring eight surgeries. Klusmann began experiencing seizures, ultimately diagnosed as partial symptomatic epilepsy, and suffered another fall after a 2022 seizure. Klusmann’s claim for short-term disability benefits under AT&T’s disability benefit plan was approved by Sedgwick Claims Management Services, and continued through November of 2023. with interruptions including a brief return to sedentary work. Klusmann then applied for long-term disability benefits, which required “Objective Medical Evidence” that he could not engage in any occupation for which he was qualified. Relying on a return-to-work form from his treating neurologist permitting sedentary work with restrictions, and a Transferable Skills Analysis identifying three alternative sedentary occupations, Sedgwick denied the claim. Klusmann appealed, submitting (1) a functional capacity evaluation (FCE) showing physical and cognitive limitations that precluded sustained sedentary work, and (2) a neuropsychological evaluation diagnosing mild neurocognitive disorder, among other conditions, and opining that Klusmann should remain restricted from any form of work. Sedgwick then obtained an independent medical examination (IME), which concluded Klusmann could perform simple, seated, supervised office work. When Sedgwick did not issue a final decision by its deadline, Klusmann filed this suit against AT&T and Sedgwick; Sedgwick issued a decision upholding the denial the next day. The case proceeded to cross-motions for judgment. The parties disputed the standard of review, with Klusmann arguing that Sedgwick’s untimely decision forfeited deferential review and defendants arguing that arbitrary and capricious review still applied because the delay was tolled or, alternatively, should be excused as de minimis. The court held that the Sixth Circuit’s 1998 decision in Daniel v. Eaton Corp., which had applied deferential review even to untimely decisions, no longer controlled after passage of 2017 amendments to ERISA’s claims regulation. Those amendments provided that a claim deemed denied for procedural noncompliance is denied “without the exercise of discretion by an appropriate fiduciary.” As a result, an untimely decision triggers de novo review. The court found that Sedgwick’s decision was two days late, and rejected defendants’ tolling argument because the delay stemmed from Sedgwick’s own delay in scheduling the IME rather than any failure by Klusmann to submit information. The court acknowledged that a two-day delay could be de minimis under the regulations, but found that defendants had not shown good cause or that the delay was due to matters beyond their control. De novo review therefore applied. Turning to the merits, the court rejected defendants’ arguments that Klusmann’s appeal evidence did not qualify as “Objective Medical Evidence” under the plan. Functional capacity evaluations are generally reliable and objective absent a contrary medical opinion, and the neuropsychological test, which included validity measures, confirmed Klusmann’s “performance on measures of cognitive function should be considered a valid reflection of his current abilities.” The court further found that Klusmann’s treating neurologist had left open the possibility of disability from a psychological standpoint by stating that his current problem, non-epileptic seizures, should instead be documented by a psychologist or psychiatrist. That possibility was then addressed by Klusmann’s appeal evidence, which opined that Klusmann should remain out of work entirely, buttressed by the FCE. Defendants’ IME never addressed or refuted the appeals evidence. The court also noted, in assessing the timeline that led Sedgwick to a two-day-late decision, what it called the “apparent gamesmanship” of Sedgwick affording Klusmann’s counsel only one business day to respond to the IME report. As a result, the court found Klusmann had proven his entitlement to disability benefits. The court declined to remand to Sedgwick, explaining that remand would only give defendants “a second bite at the apple” to respond to evidence they already had but failed to address.

Oliver-Smith v. Lincoln National Life Ins. Co., No. 1:23-cv-276, 2026 WL 2905291 (S.D. Ohio Sept. 28, 2026) (Judge Jeffery P. Hopkins). Melinda Oliver-Smith worked for Duke Energy Corporation for nearly three decades, most recently as a Gas Systems Operator Mechanic, a safety-sensitive position involving maintaining, repairing, and operating natural gas equipment. Oliver-Smith participated in the ERISA-governed Duke Energy Long Term Disability Plan, insured and administered by Lincoln National Life Insurance Company. The plan required a claimant to satisfy an “Own Occupation” disability standard for the first 24 months of benefits before a more demanding “Any Occupation” standard applied. In February of 2021, Oliver-Smith stopped working, attributing her inability to perform her job to panic disorder, major depressive disorder, generalized anxiety disorder, and related symptoms. Lincoln approved six months of short-term disability benefits. It initially denied Oliver-Smith’s long-term disability claim, relying in part on an April 2021 progress report that actually belonged to a different patient. After Oliver-Smith submitted additional records, Lincoln reversed course and found impairment supported from July 2021 forward. A reviewing psychiatrist examined updated records in early 2022 and found no supported impairment, leading Lincoln to terminate benefits effective February 15, 2022. Oliver-Smith appealed, submitting additional records from her treating physician and two therapists along with a consultative psychological examination performed in connection with her Social Security claim. Lincoln’s reviewing psychiatrist conducted multiple rounds of file review before Lincoln issued its final decision on January 5, 2023 upholding the termination. The Social Security Administration, meanwhile, found Oliver-Smith disabled effective February 2, 2021. Oliver-Smith then brought this action under 29 U.S.C. § 1132(a)(1)(B), and the parties filed cross-motions for judgment. Addressing the standard of review, the court rejected each of Oliver-Smith’s arguments for de novo review. It ruled that her contention that the policy’s discretionary authority clause named only “Liberty,” not Lincoln, was “without merit and borders on being specious,” because Lincoln acquired Liberty’s discretionary authority through corporate mergers. The court also disagreed that Lincoln’s reliance on paid file reviewers forfeited deference, finding that “the record shows that Lincoln Insurance properly identified the Plan’s governing eligibility requirements, applied those requirements to Plaintiff’s claim, and summarized the medical records and other information from Plaintiff’s medical history used to support its final determination.” Finally, the court found no claims procedure violation sufficient to trigger de novo review, because Lincoln timely notified Oliver-Smith of its determinations and the record showed it had reviewed records Oliver-Smith argued were ignored. Arbitrary and capricious review therefore applied. Applying that deferential standard, the court nonetheless overturned Lincoln’s denial. It first held the mixed-up April 2021 report harmless, as the final decision did not depend on it. However, the court found Lincoln’s exclusive reliance on non-examining file reviewers, across three separate physicians, inadequate given that Oliver-Smith’s claimed impairment was purely psychiatric. An in-person examination, which was expressly authorized by the policy, “could have helped the plan administrator to better evaluate the severity” of her symptoms. The court emphasized the “very serious and potentially hazardous work” Oliver-Smith performed, “including operating, maintaining, and repairing gas-distribution equipment,” which meant that the stakes of an accurate functional assessment were high. The court also noted that Lincoln did not obtain meaningful follow-up from Oliver-Smith’s primary treating physician, and that Lincoln “did not meaningfully explain” why it reached the opposite conclusion from the Social Security Administration, even though the evidence was similar and Lincoln had required Oliver-Smith to pursue that award, and benefited from the resulting offset. As a result, the court found that Lincoln’s denial was arbitrary and capricious. The court held that remand, rather than an award of benefits, was the appropriate remedy because the record did not show that Oliver-Smith “was clearly entitled to LTD benefits for the entire disputed period[.]” It denied without prejudice her requests for past-due and future benefits, and other benefits-dependent relief.

Eighth Circuit

Young v. Aetna Life Ins. Co., No. 24-CV-4611, 2026 WL 2874085 (D. Minn. Sept. 24, 2026) (Judge Patrick J. Schiltz). Maree Young worked for more than a decade as a Senior Business Management Specialist at TD Bank, N.A., a sedentary but demanding role in which she “led teams, solved problems, and juggled deadlines.” As a TD Bank employee, she was a participant in its ERISA-governed long-term disability benefit plan, which was administered by Aetna Life Insurance Company. In 2014, Young began experiencing debilitating episodes of vomiting that sometimes occurred up to ten times a day and once left her unable to retain food for 41 days. In 2016, she was hospitalized with kidney failure, and was diagnosed with Cyclic Vomiting Syndrome, a rare disease with no known cause or cure that also caused metabolic brain damage affecting her short-term memory, executive function, balance, and communication. Young stopped working in that year, and Aetna approved her claim for benefits. Over the next seven years, Aetna periodically requested updated proof of eligibility and continued paying benefits, but during a 2023 review it gathered office notes from Young’s treating providers, two days of surveillance footage, and an independent medical examination by Dr. Howard Jones (not that one), who found “no objective evidence at this point upon which to base need for any restrictions in any predictable sense” and characterized Young’s vomiting episodes as “intermittent” and “uncommon.” Based on this record, Aetna terminated Young’s benefits, explaining that there were “no signs, symptoms, restrictions, or limitations that would prevent work activities from a physical perspective” and that any cognitive impairment was “very difficult to discern.” Young appealed and submitted supplemental records, including updated opinions from her physicians and a vocational expert, all of whom maintained that her cognitive and gastrointestinal symptoms remained disabling. Aetna retained three physicians to review the appeal, each of whom concluded that Young’s symptoms were not objectively supported, and upheld the termination of benefits. Young thus brought this action to recover her discontinued benefits, and the parties filed cross-motions for summary judgment. Before reaching the merits, the court addressed Young’s argument that Maine insurance law stripped Aetna of the discretionary authority granted to it by the TD Bank plan. The court rejected this, noting that the statute applies only to a policy issued, continued, or renewed after its 2019 effective date. Aetna’s continued payment of benefits to Young after 2019 did not constitute a “continuation” or “renewal” of a policy that had already been triggered in 2016. “To apply the Maine statute in such a situation would be to retroactively change the terms of a bargain – to enforce the insurer’s obligation under a policy to pay claims, while depriving the insurer of something it received as consideration for that obligation (the absolute-discretion clause).” The court next addressed four arguments made by Young. First, the court gave Aetna’s structural conflict of interest as both administrator and payor only modest weight because Young could not show the conflict actually influenced the denial decision. Second, it gave the Social Security Administration’s 2018 disability determination limited weight given the passage of time between the award and Aetna’s 2023 decision. Third, it found Aetna’s seven years of prior payments did not estop a benefit termination because Aetna’s 2023 decision relied on a materially different and more extensive record than what existed in 2016. Fourth, it rejected Young’s contention that Aetna improperly favored its own physicians over her treating providers, explaining that Aetna and its consultants repeatedly solicited the treating providers’ input and were entitled to credit conflicting but reliable opinions so long as they did not arbitrarily ignore reliable evidence. Turning to the merits, the court found that substantial evidence supported Aetna’s conclusion that Young’s physical condition had “markedly improved” between 2016 and 2023. Young’s cognitive condition gave the court more pause, as three successive neuropsychological evaluations in 2016, 2017, and 2020 “all found that she had disabling cognitive impairments.” The court admitted that it “has some sympathy for Young’s argument, but the Court is required to review Aetna’s decision under the substantial-evidence standard, and that standard is highly deferential.” Under that standard, the court held that Aetna reasonably relied on the absence of any recent neuropsychological evaluation, on Dr. Jones’s in-person examination, and on its record review, all of which found no objective support for a disabling cognitive impairment. Young had not shown that these opinions were “demonstrably incorrect.” The court noted that Aetna had “put Young on notice” that it needed current information, but “Young chose to rely on information that was three to seven years old.” As a result, the court found that Aetna’s decision was supported by substantial evidence, granted Aetna’s motion for summary judgment, and denied Young’s.

Life Insurance & AD&D Benefit Claims

Sixth Circuit

Metropolitan Life Ins. Co. v. Palmer, No. 2:25-cv-10845, 2026 WL 2870402 (E.D. Mich. Sept. 23, 2026) (Judge Susan K. DeClercq). Rufus L. Palmer was a Ford Motor Company employee enrolled for $47,920.50 in basic life insurance under an ERISA-governed welfare benefit plan administered by Metropolitan Life Insurance Company. According to the most recent beneficiary designation in MetLife’s file, dated 2011, Rufus’s two sons, Timothy Palmer and Daryl Palmer, were each entitled to 50 percent of the proceeds. When Rufus died on May 17, 2024, MetLife sent condolence letters and claim forms to Timothy and Daryl, and both indicated an intent to claim benefits. MetLife also received documents from Rufus’s wife, Bernadine Palmer, including a handwritten, undated note stating that “Mr. Rufus would like to change his beneficiary to his wife Bernadine Palmer.” MetLife denied Bernadine’s claim on June 20, 2024 because she was not named in the 2011 designation. Bernadine appealed, asserting she held power of attorney for Rufus and submitted a marriage license and an April 2024 power-of-attorney document whose notary statement referred to a signer identified as “RUFFIE PALMER,” but curiously used “she/her” pronouns to refer to Rufus. Faced with conflicting claims to the proceeds, MetLife filed this interpleader action. MetLife served its complaint on Bernadine, Daryl, and Timothy in early April 2025, but none timely responded, leading to entries of default against all three. After Timothy and Daryl later filed an answer, MetLife withdrew its motion for default judgment as to them, leaving Bernadine as the only defendant still in default. Bernadine never personally appeared in the action. However, her daughter sent the court a series of faxes suggesting Bernadine had suffered multiple strokes affecting her memory and litigation capacity. The court ordered an evidentiary hearing to assess Bernadine’s competence and found her competent under the law of her domicile, Louisiana. When Kelly later submitted a letter purporting to be from a nurse practitioner questioning Bernadine’s competence, the court held a second evidentiary hearing, at which Bernadine introduced no evidence and no testimony was taken, leaving no basis to disturb the earlier competency finding. The court then ordered Bernadine to answer or otherwise appear by September 16, 2026. She did not do so, and MetLife moved for default judgment against her, seeking no monetary recovery but asking that Bernadine be barred from the interpleaded proceeds. The court applied the four-part test for default judgments: “(1) it has both subject-matter jurisdiction over the claim and personal jurisdiction over the defendant, (2) the defendant was properly served, (3) the defendant failed to appear and to defend, and (4) the plaintiff is entitled to the relief sought.” MetLife’s motion ticked all the boxes. The court found subject matter jurisdiction under 29 U.S.C. § 1132(e)(1), personal jurisdiction over Bernadine through ERISA’s nationwide service of process provision, proper service by certified mail that Bernadine signed for in April 2025, and a properly entered clerk’s default given her failure to plead or otherwise defend. As for entitlement to relief, the court walked through the equitable factors governing default judgment and found each favored entry of default: MetLife was prejudiced by being left unable to determine the proper payee of the plan proceeds; the complaint was sufficient and MetLife’s claims had merit; the amount at stake as to Bernadine was zero dollars, because MetLife sought only to bar her claim rather than recover funds from her; no material facts were genuinely disputed given Bernadine’s failure to engage despite ample opportunity, including nearly a year to obtain counsel; and although courts generally prefer resolution on the merits, that preference “must yield to the needs of litigants actually before them” when a trial on the merits is not attainable. The court thus granted MetLife’s motion for default judgment and ordered that Bernadine is barred from recovering Rufus’ life insurance proceeds.

Eleventh Circuit

Tegu-Watkins v. Hartford Life & Accident Ins. Co., No. 8:24-cv-2722-CEH-AAS, 2026 WL 2883359 (M.D. Fla. Sept. 25, 2026) (Judge Charlene E. Honeywell). Richard P. Watkins worked as a lead mechanic for Amentum Holdings, LLC, and as a benefit of his employment his wife, Valerie Tegu-Watkins, was the beneficiary of spousal coverage under the company’s ERISA-governed accidental death and dismemberment (AD&D) benefit plan, insured by Hartford Life and Accident Insurance Company. The policy paid benefits if a covered person died “as the result of one or more Covered Injuries sustained in an Accident,” and defined a “covered injury” as “bodily damage or harm that must be independent of Illness or any other cause.” In June of 2024, Watkins suffered a stroke in his dining room, fell, and struck his head on the floor; he died three days later. The autopsy listed the cause of death as a skull fracture with intracranial hemorrhage due to blunt impact to the head, identified a cerebrovascular accident as a contributory cause, and described the manner of death as an accident resulting from a “fall from standing height following acute stroke.” The death certificate similarly listed the skull fracture and hemorrhage as the cause of death and the stroke as a significant condition contributing to it. Tegu-Watkins submitted a claim, which Hartford denied. Her appeal, which included additional medical records showing Watkins had no stroke-related diagnoses, was also denied. Hartford stated, “While the information documents that Mr. Watkins fell, it is further reported that his fall from standing height followed an acute stroke, and therefore, his death was not the result of an Injury independent of illness.” Tegu-Watkins thus filed this two-count complaint against Hartford, asserting a claim to recover AD&D benefits under § 502(a)(1)(B) and a claim for breach of fiduciary duty under § 502(a)(3). Both sides moved for summary judgment. Applying the Eleventh Circuit’s six-step framework from Blankenship v. Metropolitan Life Ins. Co., the court began by asking whether Hartford’s decision was “de novo wrong.” Tegu-Watkins argued Hartford should have applied the Eleventh Circuit’s “substantially contributed” test, from Dixon v. Life Ins. Co. of N. Am., but the court disagreed, noting that that test included consideration of a pre-existing condition, which was not at issue here. The court also rejected Tegu-Watkins’ argument that the policy’s “independent of Illness” language did not govern her claim because it only appeared in the definition of “Injury.” The court held that an ERISA plan “must be construed as a whole” and that the benefits provision and the Injury definition had to be read together. The court ultimately found that Tegu-Watkins did not satisfy her burden of proving that “Mr. Watkins’ death was the direct result of an accident or independent of illness.” The autopsy report and death certificate both affirmatively identified the stroke as a contributory cause of death rather than establishing that the death was independent of it. Because Hartford’s decision was not de novo wrong, the court ended its analysis of count one there, ruling in Hartford’s favor. As for Tegu-Watkins’ second claim for breach of fiduciary duty, the court held that she had abandoned it by not raising it in her briefing. Hartford’s summary judgment motion was thus granted, and Tegu-Watkins’ was denied.

Medical Benefit Claims

Eighth Circuit

Saucedo v. UnitedHealthcare Ins. Co. of the River Valley, No. 5:23-CV-5214, 2026 WL 2826116 (W.D. Ark. Sept. 21, 2026) (Judge Timothy L. Brooks). Sergio Saucedo participated in an ERISA-governed health plan administered by UnitedHealthcare Insurance Company of the River Valley (UHC). In April of 2020 Saucedo was struck by a car and suffered a broken jaw, several missing and broken teeth, and facial lacerations. An ambulance took him to a hospital, where an attending physician ordered x-rays confirming multiple facial and jaw fractures, administered morphine and antibiotics, and sutured his lacerations. Saucedo needed oral surgery, but because the accident occurred at the outset of the COVID-19 pandemic, the hospital’s emergency room was overrun and understaffed, and it had no oral maxillofacial surgeon on call. The hospital concluded that the surgery would have to be done on an outpatient basis, but the oral surgery practice to which the hospital normally referred trauma cases had shut down for the pandemic. The hospital thus sent Saucedo home with pain medication and instructions to follow up. It took hospital staff two days to locate an oral surgeon, Dr. Bolding, who could perform the surgery. (Dr. Bolding had received special state permission to convert his office into an operating theater for trauma patients during the pandemic.) Saucedo saw Dr. Bolding for a pre-operative work-up eight days after the accident, and underwent surgery ten days after the accident. Saucedo’s treating physicians testified that this care would have been performed at the hospital immediately after the accident on an emergent basis but for the pandemic. Because the treatment occurred more than a week after the accident, however, UHC classified Dr. Bolding’s services as post-emergency follow-up care by an out-of-network physician, rather than as emergency services, which left Saucedo responsible for $33,827 in costs for his pre-op visit and $73,068 for his surgery. Saucedo sued UHC under 29 U.S.C. § 1132(a)(1)(B), or alternatively for equitable relief under § 1132(a)(3). A magistrate judge issued a report and recommendation (R&R) recommending that Saucedo’s motion for judgment be denied and the case dismissed. Saucedo objected to the R&R, and this order was the result. The court applied an abuse of discretion standard of review. The court began by noting that “[t]he facts surrounding this insurance coverage dispute took place during a ‘major disaster or epidemic’ as contemplated by the Plan. Nevertheless, UHC’s coverage decision completely ignored pandemic conditions.” UHC did not dispute that Saucedo’s injuries met the plan’s definition of “medical emergency” continuously from the date of the accident through his surgery. It also did not dispute that he had complied with the plan’s instruction to seek care at the most convenient facility when a physician was not immediately available. The dispute instead turned on UHC’s reading of Article 5.7.1 of the plan, which stated, “If it is determined that a Medical Emergency existed, or that the visit to the Hospital or other emergency facility was medically necessary, the initial visit will be covered. Follow-up care received in a Hospital or an emergency facility is not covered; the Member must arrange follow-up care with a Physician.” UHC construed this provision to mean that only the “initial visit” to a hospital is covered as an emergency service and that any later-provided care defaults to uncovered “follow-up care.” The court rejected that reading as “unreasonable” and “wrong” because it “renders meaningless” the plan provision that requires patients to seek “seek emergency care at the most convenient health care facility” when emergency services are unavailable. “It is beyond debate that Mr. Saucedo’s untreated facial fractures and associated dental injuries still constituted a medical emergency requiring emergency services…and that Mr. Saucedo sought emergency care at the most convenient health care facility available at the time[.]” The court thus rejected the R&R, granted Saucedo’s motion, reversed UHC’s coverage decision, entered judgment in Saucedo’s favor, and invited him to file a motion for attorney’s fees and costs.

Ninth Circuit

Roiz v. Blue Shield of Cal. Life & Health Ins. Co., No. 25-cv-09978-WHO, 2026 WL 2859959 (N.D. Cal. Sept. 23, 2026) (Judge William H. Orrick). Blue Shield of California contracts with Magellan Health entities to administer mental health benefits for Blue Shield’s employer-sponsored and individual health plans. This includes distributing the provider directories members use to locate in-network therapists and psychiatrists. The four named plaintiffs in this case allege that these directories were riddled with “ghost networks,” i.e., listings for providers who were not actually accepting new patients, no longer practiced at the listed location, were not in-network at all, or could not be reached. Plaintiffs alleged that Blue Shield and Magellan knew or should have known the directories were inaccurate, yet continued marketing the size and adequacy of the network to sell and renew plans. They are suing on behalf of putative ERISA and non-ERISA subclasses, asserting thirteen causes of action sounding in ERISA benefit denial and fiduciary breach, the Mental Health Parity and Addiction Equity Act, breach of contract and the implied covenant of good faith and fair dealing, fraud, California’s Unfair Competition Law, negligent misrepresentation, and unjust enrichment. Defendants moved to dismiss. The court “divided plaintiffs’ causes of action into three groups – contract claims, ERISA claims, and other state law claims,” which it addressed in order. Under the contract claims, the court first addressed whether any plaintiff could sue as a third-party beneficiary of the Magellan-Blue Shield administrative services agreement. The court ruled they could not under the agreement’s exclusion-of-third-party-beneficiaries clause. The court reached the opposite conclusion as to the agreements between Blue Shield and the plaintiffs’ employers, holding that “an employer’s agreement with a health plan is negotiated primarily for the benefit of the employees,” so plaintiffs could proceed as third-party beneficiaries of those contracts. As for the merits, the court held that plaintiffs’ breach of contract claims against Blue Shield adequately alleged specific, identifiable promises (such as appointment-availability timeframes, geographic access to care, and a commitment to update directories) which were sufficient to survive dismissal. However, the court dismissed the accompanying breach of the implied covenant of good faith and fair dealing counts because there were no benefit denials and the claims were duplicative of the contract claims. Turning to ERISA, the court upheld all three theories plaintiffs advanced. The claim for benefits under 29 U.S.C. § 1132(a)(1)(B) adequately alleged that Blue Shield’s inaccurate directory functionally denied access to covered mental health benefits. The breach of fiduciary duty claim satisfied the elements identified in Bafford v. Northrop Grumman Corp. (Your ERISA Watch’s case of the week in our April 21, 2021 edition) because plaintiffs alleged that Blue Shield acted as a fiduciary in compiling and maintaining the directory and breached its duties of loyalty and prudence by allowing inaccuracies to persist. The Parity Act claim survived under guidance from the Ninth Circuit in Ryan S. v. UnitedHealth Group, Inc. The court found that plaintiffs adequately presented an “internal processes theory” of liability recognized by Ryan S. by alleging that Blue Shield’s inaccurate, unusable mental health directory operated as a more restrictive limitation on mental health benefits than on medical/surgical services. (Ryan S. was the case of the week in our April 17, 2024 edition. Coincidentally, both Bafford and Ryan S. were Kantor & Kantor victories.) The court then addressed the non-ERISA state law claims. It held these claims were not preempted because the contract and misrepresentation theories rested on independent legal duties rather than on the terms of an ERISA plan. On the merits, plaintiffs’ state law claims had mixed results. Rule 9(b)’s heightened pleading standard doomed the fraud claims against Magellan, but the same claims survived against Blue Shield because plaintiffs alleged direct knowledge of specific directory inaccuracies. The court was divided on plaintiffs’ Unfair Competition Law claim; the “unlawful” prong survived for the same reasons as the surviving contract and Parity Act theories, but the “unfair” prong was dismissed as a “bare bones” recitation lacking the requisite analysis. The court allowed plaintiffs to proceed with their intentional and negligent misrepresentation claims against Blue Shield, as well as their unjust enrichment claim. However, those claims were unsuccessful against Magellan due to thin pleading. In the end, the court granted Blue Shield’s motion to dismiss as to the Fourth and Fifth causes of action and granted Magellan’s motion to dismiss as to the Third, Sixth, Eighth, Ninth, and Tenth causes of action. The court granted plaintiffs leave to amend.

Tenth Circuit

Mike G. v. Premera Blue Cross, No. 2:24-cv-00236-DBB-CMR, 2026 WL 2905307 (D. Utah Sept. 28, 2026) (Judge David Barlow). Plaintiff Mike G. participated in an ERISA-governed health plan insured and administered by Premera Blue Cross; his daughter, S.G., was a beneficiary under the plan. S.G. had long struggled with obsessive-compulsive disorder, social anxiety, depression, dysmorphic dysregulation disorder, and attention-deficit/hyperactivity disorder. When her symptoms worsened, her parents admitted her to Cascade Academy, a residential mental health treatment center in Utah, where she remained from October 2021 to May 2022. Under Premera’s guidelines, a weekly psychiatric evaluation and at least three individual, group, or family therapy sessions per week were required to find medical necessity for benefits. Premera issued an initial denial terminating coverage after October 7, 2021, finding the records did not document weekly evaluations or sufficient therapy sessions, even though S.G.’s Cascade file in fact reflected several additional psychiatric evaluations and more than 30 therapy sessions. Plaintiffs submitted a 27-exhibit first-level appeal in April of 2022, including over 600 pages of Cascade records and two independent letters of medical necessity, but Premera never substantively responded. (Internal Premera records later revealed the appeal had been marked “voided.”) Instead, Premera sent plaintiffs eight explanations of benefits (EOBs) between February and June 2022 that inconsistently approved and denied coverage for different months, including one EOB approving October’s treatment while simultaneously imposing a prior-authorization penalty, and another approving April’s treatment while showing a $0 allowed amount. Plaintiffs submitted a second-level appeal in March of 2023 flagging the unanswered first-level appeal, challenging the EOBs’ inconsistencies, and attacking the $240 per-diem rate as too low under the plan’s out-of-network calculation, which used a “comparable provider” analysis. Premera responded with three denial letters in April of 2023, none of which indicated any review of the first-level appeal, one of which acknowledged that several claims had been “paid in error and should have been denied as not medically necessary,” a second explained that “[a] business decision was made not to have the claims reprocessed,” and the third denied coverage on essentially the same rationale as the original denial, supported by an independent medical review. Plaintiffs sued in 2024 for wrongful denial of benefits under ERISA and violation of the Mental Health Parity and Addiction Equity Act, and the parties cross-moved for summary judgment. Applying de novo review, which the parties agreed governed, the court held that Premera’s handling of plaintiffs’ claims and appeals was arbitrary and capricious in three independent respects. First, Premera never engaged with the first-level appeal at all, despite plaintiffs’ repeated follow-ups over nearly a year, in violation of the “meaningful dialogue” ERISA’s claims-processing regulations require. The court ruled that this was sufficient to justify reversal, even without any showing of prejudice, but plaintiffs showed prejudice regardless because Premera’s post-hoc litigation explanations could not cure denial letters that never addressed the medical evidence plaintiffs submitted. Second, the court found the confusing series of EOBs independently undermined meaningful dialogue by communicating inconsistent coverage determinations. Third, the court held that even the second-level appeal denial letters (Premera’s only substantive response), offered only conclusory statements that failed to engage with plaintiffs’ arguments about the per-diem rate or “comparable providers.” Throughout, the court emphasized that reviewers “cannot shut their eyes to readily available information that may confirm the beneficiary’s theory of entitlement,” and that Premera’s silence in the face of Plaintiffs’ first-level appeal was “the antithesis of the full and fair review that ERISA requires.” As for the appropriate remedy, the court explained that while remand is typically appropriate to cure inadequate findings or explanations, an award of benefits is proper where an administrator’s conduct was clearly arbitrary and capricious, particularly where remand would merely give the administrator another unwarranted “bite at the apple” or an opportunity “to retool a defective appeals system.” The court was not convinced that “Plaintiffs have demonstrated that S.G. is clearly entitled to benefits,” but it was sufficiently fed up with Premera: “an award of benefits is proper here given Premera’s significant, repeated violations of ERISA’s claim-processing requirements.” The court therefore awarded plaintiffs benefits for S.G.’s treatment at Cascade, while ordering a limited remand solely for Premera to determine the correct benefit amount, including proper consideration of plaintiffs’ “comparable provider” exhibits. Because benefits were awarded, the court did not reach the parties’ cross-motions on the Parity Act claim, which both sides agreed was rendered moot.

Pension Benefit Claims

Sixth Circuit

Brake v. Operative Plasterers & Cement Masons Local 109 Pension Plan, No. 5:25-CV-1399, 2026 WL 2858332 (N.D. Ohio Sept. 23, 2026) (Judge Benita Y. Pearson). Brian D. Brake was a participant in the Operative Plasterers and Cement Masons Local 109 Pension Plan, a multiemployer pension plan administered by its board of trustees and by third-party administrator Solxsys Administrative Solutions, LLC. In May of 2022, Brake applied to the plan for a Special Disability Benefit under Plan Section 5.7. That provision entitles a participant who (1) is eligible for an Early Retirement Benefit, (2) has applied for that benefit, and (3) has a pending Social Security disability claim, to receive a Permanent and Total Disability Benefit retroactive to his retirement application once Social Security approves the pending claim. On October 3, 2022, the Social Security Administration denied Brake’s disability application, finding he was “not disabled under our rules,” and two weeks later the plan denied his Special Disability Benefit application because Brake no longer had an application the Trustees considered “pending.” Brake did not appeal. Nearly two years later, in April of 2024, Social Security reversed course and found Brake disabled as of May 17, 2021; Brake forwarded that award to the plan and, in June of 2024, separately applied for a Permanent and Total Disability Benefit under Plan Section 5.1(A), which required an applicant to have “earned at least 800 Hours of Service in each of the two Plan Years immediately prior to the Plan Year in which the Participant is determined to be disabled by the Social Security Administration[.]” The plan denied that application because Brake fell short of the hours requirement in one of those two years. The board denied Brake’s appeal, explaining that “the situations of the participant history and social security disability award does not align with current plan document rules.” Brake thus sued the plan, the board, and Solxsys under 29 U.S.C. § 1132(a)(1)(B), and the case proceeded to cross-motions for judgment. The court applied an arbitrary and capricious standard of review because the plan vested the trustees with discretionary authority to determine eligibility and construe plan terms. The court noted at the outset that Brake did not challenge the Trustees’ 2024 denial (applying the 800-hour rule), so that decision was “uncontested and upheld.” Turning to the 2022 denial, the court rejected Brake’s central theory that the 2024 denial was, in substance, a renewed denial of his 2022 Special Disability Benefit application, observing that the two applications sought different benefits under different eligibility provisions and that Brake never once mentioned his 2022 application in his 2024 appeal. The court held that the Trustees’ interpretation that Social Security’s outright denial ended Brake’s “pending” application status under Section 5.7 was a reasonable and rational reading of the plan. The court further noted that Brake was ineligible in 2022 in any event because he was only 51 years old; Section 4.1(B) required a participant to be at least 55 to qualify for the Early Retirement Benefit. Brake complained that he was not adequately provided his appeal rights after the 2022 denial, but the court held that any error in this regard did not entitle him to a substantive award of benefits, especially where the decision was “reasonable and rational and was not arbitrary and capricious.” The court likewise rejected Brake’s request to remand his 2022 application for further plan consideration, holding that remand would be a “useless formality.” Finally, the court rejected Brake’s unsupported allegation that the Trustees operated under a conflict of interest, noting he offered no evidence that the Trustees had any financial incentive to deny his claims. Furthermore, “the Fund is a multi-employer benefit plan with no profit motive, and the individual trustees on the Board receive no personal financial benefit from approving or denying claims[.]” As a result, the court denied Brake’s motion for judgment, granted Defendants’, and entered judgment in favor of defendants.

Tenth Circuit

Gibson v. Rocky Mountain UFCW Unions & Employers Retail & Meat Pension Plan, No. 25-cv-03581-MDB, 2026 WL 2905578 (D. Colo. Sept. 28, 2026) (Magistrate Judge Maritza Dominguez Braswell). Lisa C. Gibson has a qualified domestic relations order (QDRO), entered pursuant to her divorce decree, which entitles her to a share of her former spouse’s accrued benefit under the Rocky Mountain UFCW Unions & Employers Retail and Meat Pension Plan. Gibson made repeated requests to the plan for information about her interest, including copies of benefit statements, and ultimately sought a lump-sum distribution of her share. The plan denied the lump-sum request and, according to Gibson, never furnished several of the statements and disclosures she requested. She also took issue with the plan’s handling of the QDRO, contending its rejections of her proposed order language were arbitrary. Proceeding pro se, Gibson filed this action asserting six claims under ERISA. The plan moved to dismiss for failure to state a claim; the parties also disputed whether Zenith American Solutions, the Plan’s third-party administrator, should be joined as a defendant. The magistrate judge, sitting by consent, addressed Gibson’s claims in order. The court dismissed Claim 1, a claim under 29 U.S.C. § 1132(a)(1)(B) to recover the lump-sum benefit, as time-barred, holding that the plan had an enforceable 180-day contractual limitations provision which began running in 2021; Gibson’s suit was filed well outside that window. As for Claim 2, alleging disclosure failures under §§ 104(b)(4) and 105, the court let it partly proceed. Because an alternate payee is statutorily deemed a “beneficiary” under ERISA, the court held that Gibson plausibly alleged a failure to furnish her a § 105 benefit statement. Claim 3, a breach of fiduciary duty claim under § 404(a) tied to the same disclosure failures, fared worse. The court ruled that it pleaded only in conclusory terms and furthermore, furnishing benefit statements is a “ministerial reporting function” that does not itself give rise to fiduciary liability. Claim 4, asserting a denial of full and fair review under § 503, was dismissed because the plan’s denial letters, attached as exhibits and properly considered on the motion, directly contradicted Gibson’s characterization of the process she received. Claim 5, which was based on ERISA’s anti-cutback rule in § 204(g), was dismissed because Gibson never identified any plan amendment that reduced an accrued benefit. Finally, Claim 6, challenging the plan’s rejection of her proposed QDRO language under § 206(d)(3), was dismissed because “the Plan raised substantive shortcomings,” “not unreasonable, arbitrary, formatting requests; they were substantive requests tethered to ERISA.” The court addressed the parties’ dispute over adding Zenith American Solutions by directing them to confer on the issue and submit a status report. Thus, the plan’s motion was mostly granted, but the case will continue.

Provider Claims

Third Circuit

Rabinowitz v. United Healthcare Ins. Co., No. 23-CV-1996 (MEF)(SDA), 2026 WL 2836534 (D.N.J. Sept. 22, 2026) (Judge Michael E. Fabiarz). Dr. Sidney Rabinowitz performed chest surgery on a patient enrolled in an employer-sponsored health plan insured and administered by United Healthcare Insurance Company, although he was out-of-network with United. Dr. Rabinowitz billed $115,500 for the procedure, coded across CPT Codes 15734, 13101, 13102, and 99221. United ultimately paid $5,299.57 toward CPT Code 15734 and nothing toward the remaining codes. The original plaintiff, the patient, assigned her right to benefits to Dr. Rabinowitz, who was substituted in as plaintiff and brought this action to recover the balance of the billed charges. Dr. Rabinowitz advanced two theories: (1) a negotiated-rate agreement obligated United to pay a higher, previously proposed rate for CPT Code 15734; and (2) United’s payment determinations, including its reliance on a third-party pricing vendor, Data iSight, were arbitrary and capricious under ERISA. The parties cross-moved for summary judgment. The court first addressed United’s exhaustion defense. On CPT Code 15734, the court held that United failed to issue a timely determination on Dr. Rabinowitz’s appeal within the 60-day deadline set by 29 C.F.R. § 2560.503-1(i)(1)(i). As a result, the “deemed exhausted” rule in § 2560.503-1(l)(1) was triggered, prohibiting United from asserting a failure to exhaust defense. The court rejected United’s argument that it requested information from Dr. Rabinowitz within the 60-day period which should “count as the necessary response to the Plaintiff’s appeal,” ruling that the regulation calls for a final “determination.” The court also rejected United’s argument that its delay should be excused, stating that the appeal involved a “bread-and-butter dispute about a common-enough medical procedure.” However, regarding the remaining CPT Codes, Dr. Rabinowitz admitted he did not timely appeal, and thus United was entitled to summary judgment as to those three codes. Turning to the merits, the court first considered Dr. Rabinowitz’s negotiated-rate theory, which involved a proposal by a third party that Dr. Rabinowitz accept $92,400 to resolve the dispute. The proposal provided that it would become “null and void” absent United’s affirmative acceptance, and the court found no evidence that United ever accepted it. The court rejected Dr. Rabinowitz’s argument that the non-acceptance clause was “standard boilerplate” that could be disregarded, and separately rejected his argument that United’s partial payment constituted acceptance by partial performance. The court found that a payment inconsistent with, rather than matching, the proposed rate could not supply the mutual assent a contract requires. Because no contract was ever formed, the court granted United’s motion for summary judgment on the negotiated-rate theory. That left Dr. Rabinowitz’s alternative theory that United’s ultimate payment determination, which it made with the assistance of its third-party vendor, Data iSight, was “arbitrary and capricious” under ERISA for lack of adequate explanation. Specifically, Dr. Rabinowitz contended “(i) that the Defendant changed its mind at various points; (ii) the Defendant’s determination to pay $5,299.57 was not explained; and (iii) that the Defendant provided inconsistent explanations throughout the process.” The court appeared frustrated on this issue, as neither party satisfactorily explained to it how the plan’s pricing process worked: “[T]his is not much to go on. Nothing about the criteria used by Data iSight. The information it looked to. Or how Data iSight applied its criteria to the information it had.” The court thus stated that it “will need to understand what Data iSight did and why it did it,” and reserved that issue for later. As a result, the cross-motions were a mixed bag for both parties, and the case will proceed.

Ninth Circuit

California Spine & Neurosurgery Institute v. Microsoft Corp., No. 26-cv-04326-NC, 2026 WL 2868550 (N.D. Cal. Sept. 23, 2026) (Magistrate Judge Nathanael M. Cousins). California Spine and Neurosurgery Institute d/b/a San Jose Neurospine (SJN), is an out-of-network provider that performed spinal surgery on a patient covered under the self-funded Microsoft Corporation Welfare Plan. Blue Cross of California d/b/a Anthem Blue Cross handled claims processing and benefit determinations for the plan. SJN alleges that before treating the patient, it verified coverage with an Anthem representative and proceeded with surgery in reliance on that confirmation. However, after treatment, Anthem paid only $1,110.59 against $82,005 in billed charges. SJN initiated the No Surprises Act (NSA) dispute resolution process, which involves a mandatory negotiation period followed by independent dispute resolution (IDR). The IDR entity awarded SJN an additional $71,888.85 in September of 2025, with payment due within 30 days. However, as of the filing of SJN’s complaint, Anthem had not paid any portion of that award. SJN sued Microsoft and Anthem, asserting ten counts: two ERISA claims for benefits and breach of fiduciary duty (Counts 1 and 2), a petition to confirm the IDR award under Section 9 of the Federal Arbitration Act (FAA) (Count 3), two claims seeking to enforce the IDR determination directly under the NSA (Counts 4 and 5), and five state law claims for account stated, open account, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violation of California’s Unfair Competition Law (Counts 6 through 10). Anthem moved to dismiss all ten counts, and Microsoft, named only in Counts 1, 2, 9, and 10, incorporated Anthem’s arguments as to those counts. Addressing Counts 4 and 5 first, the court noted that “there is no binding precedent addressing this issue – neither the Ninth Circuit nor the Supreme Court have determined whether Congress implied a private right of action for non-payment of IDR payment determinations or to enforce IDR payment determinations under the NSA.” Conducting its own analysis, the court held that the NSA contains neither an express nor an implied private right of action to enforce IDR rulings. The court found that although the NSA’s mandatory payment language and the “binding” effect of IDR awards might suggest an individual right, the statute’s enforcement architecture dispelled any such conclusion. Congress vested enforcement of the NSA in three administrative agencies by allowing for HHS civil penalties, Department of Labor ERISA actions, and Treasury excise taxes, rather than by giving providers a judicial remedy. The court rejected SJN’s argument that the NSA’s bar on “judicial review” of IDR determinations was narrower than judicial enforcement, agreeing with the Fifth Circuit’s reasoning in Guardian Flight, LLC v. Health Care Service Corp. that the distinction is “a distinction without difference.” (In Your ERISA Watch’s notable decision from last week, East Coast Advanced Plastic Surgery, LLC v. Cigna Health & Life Ins. Co. (ECAPS), the Second Circuit agreed fully with Guardian Flight. The court here did not cite to ECAPS, however.) The court acknowledged SJN’s argument that regulatory enforcement was insufficient to vindicate NSA rights, but stated that “a decision by Congress may be ‘harsh and misguided,’ ‘odd,’ or ‘not wise,’ but that generally will not stop a court from enforcing it by its terms.” The court likewise dismissed Count 3, SJN’s petition to confirm the award under FAA Section 9, because Congress incorporated only Section 10 of the FAA into the NSA’s judicial-review carve-out. Furthermore, Section 9 requires a preexisting written agreement to arbitrate that SJN and Anthem never had because the IDR process is “statutorily compelled, not contractual.” Turning to the ERISA claims, the court held that SJN lacked Article III standing to pursue Counts 1 and 2 as the patient’s assignee, because the patient herself no longer had a concrete injury once the IDR process shifted the payment dispute exclusively to the provider and insurer. The court noted that there was “no binding precedent” on this issue either, and distinguished the Ninth Circuit’s pre-NSA decision in Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, which had found provider standing based on a patient assignment of benefits, on the ground that the IDR framework eliminated any standing that might have been created by an assignment. Instead, the court again followed Guardian Flight, characterizing the “denial of a patient’s bargain” as a mere “technical violation” that “does no actual harm to the patient[]” because the patient is not exposed to financial loss. Finally, the court dismissed Counts 6 through 10, holding that SJN’s state law claims were an impermissible attempt to use state common law to “circumvent the absence of a private right of action” under the NSA, as each claim ultimately sought nothing more than payment of the IDR award. The court thus granted defendants’ motions to dismiss in their entirety, with prejudice, finding that amendment would be futile.

Valley Children’s Hospital v. California Field Ironworkers Trust Fund, No. 1:24-cv-00819 JLT EGC, 2026 WL 2859571 (E.D. Cal. Sept. 23, 2026) (Judge Jennifer L. Thurston). Valley Children’s Hospital provided medical services, supplies, and equipment to a patient named B.P., who was enrolled as a beneficiary in a welfare benefit plan administered by the California Field Ironworkers Trust Fund. The hospital alleged that over the course of B.P.’s multi-month treatment it reached an agreement with the fund under which the fund “authorized and requested” the care, accepted the hospital’s “interim billing statements,” and agreed to pay the hospital’s “usual and customary billed charges” after subtracting a “specified discount,” with payment due within 30 to 45 business days of each bill. The hospital’s charges ultimately grew to more than $1.2 million, and although the fund eventually paid a principal sum of about $670,000, it did so only after a delay of several months and it refused to pay interest. Based on these allegations, the hospital sued the fund in state court, asserting a single cause of action for breach of implied contract under California law, seeking interest on the $670,000 principal under California Civil Code § 3289 at 10%, along with costs of suit. The fund removed the case to federal court, asserting ERISA preemption. The hospital moved to remand the action, and the fund separately moved to dismiss the complaint for failure to state a claim. The court applied the Ninth Circuit’s two-part preemption test from Marin General v. Modesto & Empire Traction Co., explaining that a state law claim is completely preempted, and thus grants federal courts jurisdiction, only if (1) an individual could have brought it under ERISA § 502(a)(1)(B), and (2) no other independent legal duty is implicated by the defendant’s conduct. The court proceeded directly to the second part of this test, noting that the test is conjunctive and thus if the second part failed there was no need to address the first. The court held that this was in fact the case: the hospital’s implied contract claim rested on an independent duty arising under California contract law rather than on any obligation created by the plan. The court stated that the allegations in this case were indistinguishable from Marin General, in which the Ninth Circuit held that a hospital’s breach of contract claim against an ERISA plan was not preempted because it rested on an alleged independent agreement to pay a specified percentage of billed charges rather than on the plan’s own coverage terms. The court noted that “the fund does not attempt to distinguish” Marin General; instead, the fund urged the court to follow the more recent Ninth Circuit decision in Bristol SL Holdings, Inc. v. Cigna Health & Life Ins. Co. (the case of the week in our June 5, 2024 edition). The court rejected that argument, explaining that Bristol addressed ERISA’s conflict preemption provision in Section 514, a doctrine the Supreme Court expressly distinguished from the principles governing complete preemption and removal jurisdiction. Furthermore, the Ninth Circuit’s opinion in Bristol neither cited nor purported to abrogate Marin General. As a result, the court held that Marin General remained binding and controlled the outcome, so the hospital’s claim created an independent state law obligation, and its claim was not preempted by ERISA. The court thus granted the hospital’s motion to remand, denied the fund’s motion to dismiss as moot, and remanded the action to state court.

Retaliation Claims

Sixth Circuit

Kinser v. Gray & White, PLLC, No. 3:25-cv-744-RGJ, 2026 WL 2874414 (W.D. Ky. Sept. 24, 2026) (Judge Rebecca Grady Jennings). Plaintiff Kimberly Kinser was a paralegal and legal assistant for defendants Gray & White, PLLC and its principal, Matthew L. White, until her termination on August 29, 2025. Kinser alleged that during her employment an associate attorney at the firm routinely commented that he wanted younger staff, that defendants paid younger employees more for the same work, and that defendants refused to recognize bereavement leave and other benefits for her while extending those benefits to younger employees. Kinser alleged that she was ultimately terminated because of her age, replaced by a younger employee, and wrongfully denied her profit-sharing benefits. Defendants countered that Kinser was actually terminated because she failed to report to work and remain on-site when requested, was caught sleeping on the job, overstated her hours worked, and failed to perform basic requested tasks. Kinser’s operative complaint asserted four counts: (1) breach of contract, (2) wrongful termination and age discrimination under Kentucky and federal law, (3) negligence, and (4) discrimination under ERISA. Defendants moved to dismiss, and because their motion relied on matters outside the pleadings, the court converted the motion to one for summary judgment, giving Kinser an opportunity to respond with her own evidence and, if needed, to seek additional discovery. Kinser filed an opposition and supporting affidavit but did not seek additional discovery. The court granted summary judgment on the breach of contract and negligence counts because (1) Kinser was as an undisputed at-will employee, and under Kentucky law, an at-will employee is not in a contractual relationship with her employer, and (2) Kinser failed to respond to defendants’ argument that “‘[n]egligence is not a cause of action available under Kentucky law to an ‘at-will’ employee’ because negligence is not one of the public policy exceptions to the at-will employment doctrine.” On the wrongful termination and age discrimination count, the court found defendants had shown, through White’s uncontroverted affidavit, that defendants never employed the minimum number of workers required to qualify as a statutory employer under the Kentucky Civil Rights Act, Title VII, or the Age Discrimination in Employment Act. Kinser argued in response that her common law wrongful termination claim could survive independent of those statutes under Kentucky’s public policy exception to at-will employment, relying on Kentucky’s statutory age discrimination prohibition. However, the court rejected that theory as foreclosed by a 1985 Kentucky Supreme Court decision which held that a statute simultaneously creating a public policy and structuring its own remedial scheme “not only creates the public policy but preempts the field of its application,” so a plaintiff cannot bootstrap a common law claim onto a statutory prohibition she cannot otherwise enforce. Turning to the ERISA discrimination claim, the court applied the McDonnell Douglas burden-shifting framework governing both retaliation and interference claims under 29 U.S.C. § 1140. On retaliation, the court found it unnecessary to resolve whether Kinser established a prima facie case because defendants had produced a legitimate, non-discriminatory explanation for the termination: Kinser’s failure to report to and remain at work, being caught sleeping on the job, overstating her hours, and failing to complete basic tasks. Kinser’s affidavit did not dispute any of these performance allegations or otherwise show pretext. As for the interference claim, the court found that Kinser had not identified any ERISA-governed benefit beyond the firm’s profit-sharing plan, and defendants’ unrebutted evidence showed she had in fact cashed out of that plan. Because Kinser could not show defendants engaged in any prohibited conduct depriving her of an ERISA benefit, she failed to establish a prima facie interference claim. The court thus granted defendants’ motion in its entirety and issued judgment in their favor.

Russell v. One Power Co., No. 3:25-cv-643, 2026 WL 2905253 (N.D. Ohio Sept. 28, 2026) (Judge Jeffrey J. Helmick). Thomas Russell was the CFO of One Power Company from January to October of 2024. Working with CEO Jereme Kent and another employee, Russell was helping to build a financial model for the company, which Russell and Kent agreed needed accounting corrections. Around the same time, Russell alleges that he became aware that, at Kent’s direction, One Power was not fully funding employee 401(k) accounts in order to preserve cash for other purposes. Russell complained about this practice through an internal message on September 26, 2024, warning that Kent’s directive was illegal, and separately told the company’s Chief Regulatory Officer and a board member that “the failure to fund the accounts was illegal and potentially constituted a felony.” On October 4, 2024, Kent and the Board terminated Russell. Russell alleges that Kent told him only later that the decision rested on errors in the financial model, even though no one else involved in the model was disciplined. Russell thus brought this action asserting an ERISA retaliation claim under 29 U.S.C. § 1140 (Count I), a claim under the Ohio Whistleblower Protection Act (Count II), Ohio common-law wrongful discharge in violation of public policy (Count III), and an ADEA age discrimination claim (Count IV). One Power moved to dismiss for failure to state a claim. (After receiving right-to-sue letters from the EEOC and the Ohio Civil Rights Commission, Russell also moved for leave to file an amended complaint adding Title VII and Ohio Revised Code § 4112.02 claims for sex discrimination and a § 4112.02 claim for age discrimination; One Power did not oppose that motion.) The court granted the motion to dismiss in full. On Count I, the ERISA retaliation claim, it held that Russell’s internal, unsolicited complaints did not constitute the kind of “giving information…in an inquiry or proceeding” that § 1140 protects, applying the Sixth Circuit’s 2014 ruling in Sexton v. Panel Processing, Inc. that Congress’s intent in enacting § 1140 was “to prevent interference with inquiries and proceedings,” not to protect employees who merely “oppose, report, or complain about unlawful practices.” The court acknowledged a circuit split on this issue, noting that the Fifth, Seventh, and Ninth Circuits have read § 1140 more broadly to protect internal reporting; however, the court was bound by Sexton’s narrower rule. Turning to the state law claims, the court found that both were preempted by ERISA because Russell’s whistleblower and wrongful discharge theories were directly premised on One Power’s alleged failure to fund the 401(k) plan and would require construing an employee benefit plan. The court reasoned that “if there were no plan, there would be no state anti-retaliation claim to advance,” and dismissed Counts II and III with prejudice. As for Count IV, the ADEA claim, the court found that Russell’s only proposed comparator, Kent, was not similarly situated, as Kent was the company’s founder and CEO with unilateral authority to terminate Russell. The court further held that Russell’s bare assertion that unnamed “similarly situated substantially younger employees” were treated more favorably was a legal conclusion rather than a factual allegation. Count IV was thus dismissed as well. On the unopposed motion for leave to amend, the court denied leave as to the proposed Ohio age discrimination claim for futility reasons. The court stated that Ohio age discrimination claims are analyzed under the same framework as the ADEA and would fail for the same pleading deficiencies. But it granted leave as to the proposed Title VII and Ohio sex discrimination claims, finding that Russell’s new allegations that he was qualified, meeting expectations, and replaced by a female employee supported a plausible inference of sex-based termination, and that nothing in the record showed undue delay, bad faith, or prejudice to One Power, which had not opposed the motion.

Statute of Limitations

First Circuit

Ioannidis v. Benefit Program for Mass General Brigham, No. 25-12197-FDS, __ F. Supp. 3d __, 2026 WL 2874084 (D. Mass. Sept. 24, 2026) (Judge F. Dennis Saylor IV). Maria Ioannidis is an employee of Mass General Brigham, Inc. (MGB) and a participant in its various ERISA-governed employee benefit programs, including its health plan. However, she is not the plaintiff in this case; the plaintiff is her ex-husband, Dimitrios Ioannidis (not that one). While the two were married, Dimitrios had health coverage through Maria’s insurance. When they divorced in 2018, their separation agreement required Maria to continue providing Dimitrios health insurance for “[a]s long as Wife remains employed and has health insurance available through her employer.” Under the MGB plan terms, however, Dimitrios’s eligibility as a dependent ended upon divorce. MGB later acknowledged it had mistakenly continued his coverage (and other ex-spouses’ coverage). In 2021, MGB attempted to fix the situation by “grandfathering” certain former spouses with finalized divorce decrees, but conditioned continued coverage on the covered employee updating the couple’s status in MGB’s online HR system by January 1, 2022. Maria never did so. As a result, in May of 2023 MGB sent Maria a letter explaining that, because she had not timely updated Dimitrios’s status to “former spouse,” he had been “inadvertently covered as a dependent,” and his coverage would terminate as of August 31, 2023. Dimitrios offered a different story. He contended that he and Maria repeatedly supplied MGB with dependent-verification documents between 2023 and 2024, that MGB did not adequately respond, and that he did not actually receive the termination letters until January of 2025. Dimitrios thus brought this action pro se (although he is a Massachusetts-barred attorney), asserting seven counts: a claim to recover benefits and clarify his continued beneficiary status under 29 U.S.C. § 1132(c)(1)(B); a claim for failure to furnish plan documents under § 1024(b)(4) and § 1132(c)(1); a breach of fiduciary duty claim under § 1132(a)(3); and, in the alternative, four state law counts for breach of common-law fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing, and negligence. Defendants moved to dismiss. As a threshold matter, the court held it could properly consider the administrative record submitted with the motion. Dimitrios contended that “defendants produced ‘contrived,’ ‘suspect,’ and ‘false’ documents,” but the court found that substantively his objections went only to their characterization, not their authenticity. Addressing Article III standing first, the court rejected defendants’ argument that Dimitrios had no cognizable injury because he was not a valid plan dependent after his divorce. The court found that MGB’s grandfathering process “at a minimum, created a conditional entitlement for former spouses such as plaintiff.” Turning to the merits of Counts 1 and 3, the court held both were time-barred under Section 7.12 of the plan, which required “any Judicial Claim” to be filed within 24 months of the date the claimant “knew or should have known the principal facts” underlying it. The court found that MGB’s May 2023 letter to Maria, explaining why Dimitrios had become an ineligible dependent, put Dimitrios on constructive notice of the facts underlying his claims as of that date, since his eligibility was entirely derivative of Maria’s compliance. Because Dimitrios filed suit more than two years later, in August 2025, both counts fell outside the contractual limitations period. The court rejected Dimitrios’s argument that the letter was procedurally deficient for lacking appeal-rights language, explaining that 29 C.F.R. § 2560.503-1(g)(iv) only requires such language when a plan issues an “adverse benefit determination.” Here, “defendant was not providing Maria or Dimitrios notification of an adverse benefit determination. Instead, it was informing Maria that she had not complied with requirements to maintain coverage for her former husband, which rendered Dimitrios ineligible for continuing benefits.” The court further held that Dimitrios had failed to exhaust his administrative remedies and had not shown that exhaustion would be futile. Next, the court dismissed Count 2 because Dimitrios, having lost his dependent status, was neither a participant nor a beneficiary entitled to plan documents under 29 U.S.C. § 1024(b)(4). Finally, the court dismissed Dimitrios’ state law claims, Counts 4 through 7, as completely preempted by ERISA. The court ruled that each of these claims necessarily required the court to interpret the terms of the ERISA-governed plan to determine liability, squarely satisfying the “connection with or reference to” test articulated by First Circuit authority. Because it dismissed Counts 1 and 3 on limitations and exhaustion grounds, the court did not need to reach defendants’ separate arguments regarding statutory standing or Maria’s status as a required party under Rule 19. The court noted, “It may be the case that Maria breached her obligations under the divorce agreement by not maintaining his health-care coverage. But if that is so, that is a claim that plaintiff must assert against Maria, not against defendants, and that is a matter for the state courts, not this court, to resolve.” The court thus granted defendants’ motion to dismiss.