Matula v. Wells Fargo & Co., No. 25-2441, __ F.4th __, 2026 WL 1293295 (8th Cir. May 12, 2026) (Before Circuit Judges Colloton, Gruender, and Kobes)

Class actions alleging the improper use of forfeited employer contributions to retirement plans have been all the rage for the last couple of years, with most going down in flames at the pleading stage. Those cases are now bubbling up to the appellate courts, and this published decision by the Eighth Circuit represented the first circuit court ruling on the topic. The decision did not tackle the full range of issues presented by forfeiture cases, and instead limited its discussion to standing, so it will have to serve merely as an appetizer to the main courses yet to come. (Coincidentally, oral argument in Hutchins v. HP, another such case, is taking place today in the Ninth Circuit.)

The plaintiff was Thomas Matula, Jr., who was previously employed by Wells Fargo & Company and was a participant in its defined contribution 401(k) plan. As is common in such plans, employees participating in the plan can make contributions that vest immediately, while Wells Fargo matches a certain percentage as an employee benefit. However, Wells Fargo’s contributions do not vest immediately; instead, they vest over time and do not fully vest until an employee has completed three years of employment. Employees who leave before three years forfeit any unvested matching contributions.

The question, as always in these cases, is what happens to those forfeited contributions? The plan gave Wells Fargo the discretion to use these forfeited funds in one of three ways: “(1) to offset its employer contributions, (2) ‘to pay the expenses of the Plan,’ or (3) ‘to make corrective adjustments to Accounts.’” Wells Fargo chose option number one, which benefited it because that option reduced the amount it needed to pay to meet its contribution obligations.

Matula challenged this practice in his complaint. He alleged that Wells Fargo’s use of forfeited funds to offset its matching contributions, rather than using them to pay plan expenses or make corrective adjustments, constituted a breach of fiduciary duty and self-dealing under ERISA. He contended that the plan did not authorize Wells Fargo to use forfeited funds in the manner it did, and that its misuse of funds harmed plan participants.

Wells Fargo filed a motion to dismiss, arguing that Matula lacked Article III standing because he failed to allege an injury in fact. The district court agreed, concluding that Matula had not demonstrated an actual injury to himself that was traceable to Wells Fargo’s use of forfeited funds, and dismissed Matula’s complaint with prejudice. (Your ERISA Watch covered this decision in our June 25, 2025 edition.)

Matula appealed, and the Eighth Circuit reviewed the case de novo because it involved jurisdictional issues. At the outset, the appellate court took a different approach from the district court. Wells Fargo acknowledged that it was making a facial attack on Matula’s standing, which involved (1) evaluating the allegations in the complaint as true, (2) “considering only the materials that are necessarily embraced by the pleadings,” and (3) assuming that Matula would be successful on the merits. The district court had deviated from this approach by adopting Wells Fargo’s interpretation of the plan rules and concluding that Matula lacked standing because he was not entitled to any forfeited funds under that interpretation. The Eighth Circuit “agree[d] with Matula that the district court’s analysis departed from our precedent.”

Unfortunately for Matula, this was insufficient to save the day. The court emphasized that to have standing Matula “must plead a ‘particularized injury that affects [him] in a personal and individual way’ and that is traceable to the violating act or acts allegedly taken by Wells Fargo.” However, Matula “candidly acknowledged that the complaint does not allege any actual injury to Matula’s Plan account stemming from Wells Fargo’s use of forfeited funds.” Instead, Matula emphasized “plan-level” harms.

This concession doomed his appeal. “Having reviewed the complaint and the materials encompassed by it, we agree with that assessment. Therefore, even after accepting Matula’s assertion that the Plan rules allowed Wells Fargo to use forfeited funds to ‘pay expenses of the Plan’ or ‘make corrective adjustments,’ we affirm that Matula failed to plead an injury in fact and thus lacked Article III standing.”

The Eighth Circuit did throw Matula a bone, however: “That said, we agree with Matula that the district court abused its discretion by dismissing his complaint with prejudice.” The court noted that dismissals for lack of jurisdiction should generally be without prejudice, and “[t]he stark circumstances that might justify departing from that general rule are not present here.” As a result, the appellate court affirmed the dismissal of Matula’s complaint for lack of Article III standing, but remanded the case to the district court to enter a dismissal without prejudice.

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

Arbitration

Ninth Circuit

Dixon v. MultiCare Health Sys., No. CV25-5414, 2026 WL 1295903 (W.D. Wash. May 12, 2026) (Judge Benjamin H. Settle). Ryan Adam Dixon was a registered nurse at MultiCare Good Samaritan Hospital. He alleges in this action that MultiCare violated his rights in a number of ways, including improperly automatically enrolling him in a 401(k) retirement account. In March, the court ordered that the case should go to arbitration pursuant to the 401(k) plan’s arbitration provision, and stayed Dixon’s ERISA claims. In doing so, the court rejected Dixon’s arguments that (1) the provision prevented him from “effectively vindicating” his rights, and (2) MultiCare waived its right to insist on arbitration. (The court also admonished Dixon, who was proceeding pro se, because he “repeatedly cites to nonexistent cases and to other cases that do not support the proposition for which they were offered.” Your ERISA Watch covered this ruling in our March 11, 2026 edition.) Dixon was not deterred, however, and filed a motion for reconsideration, which the court denied in this order. Dixon argued that (1) he never received notice of the 401(k) plan and thus “never consented to arbitrate,” (2) his “continued deferrals” did not qualify as “informed” or “voluntary” acceptance of the arbitration clause, and (3) the court “failed to fully analyze the enforceability of each part of the arbitration clause, including the ‘representative-action waiver,’ ‘fallback clause,’ ‘minimum-change necessary provision,’ ‘enforceability designation,’ and the ‘unenforceable-section fallback.’” The court made short work of these arguments, noting that Dixon had not previously disputed his consent to arbitrate in earlier filings and that reconsideration was not warranted based on arguments or evidence that could have been raised earlier. Furthermore, the court ruled that thanks to Dixon’s clarification of his arguments, “the Court concludes that his breach of fiduciary claim must be dismissed.” The court stated that a pro se litigant cannot litigate claims not personal to him, and thus Dixon could not assert the ERISA breach of fiduciary duty claims which he was purporting to bring on behalf of the plan. Finally, the Court declined to clarify which documents may be reviewed by the arbitrator, as it had already concluded that MultiCare produced all statutorily required documents. As a result, Dixon’s motion was denied, and the case will continue in arbitration.

Breach of Fiduciary Duty

Ninth Circuit

Chavez v. East Bay Drayage Drivers Security Fund Plan, No. 24-CV-03487-MMC, 2026 WL 1365807 (N.D. Cal. May 15, 2026) (Judge Maxine M. Chesney). Through her husband, Leah Chavez was a beneficiary under the ERISA-governed East Bay Drayage Drivers Security Fund Plan, which provides benefits to employees who are members of Teamsters Local 70 and their families. In 2023, Chavez’s benefits were terminated because the plan determined that her marriage had ended and thus her coverage had expired. Her appeal was denied, and thus she brought this action against the plan, its board of trustees, the plan administrators, and two of the plan’s lawyers. The two claims Chavez brought against the lawyers were for breach of fiduciary duty and interference with rights under ERISA. The parties filed cross-motions for summary judgment on these claims. On the breach of fiduciary duty claim, the court ruled that Chavez failed to raise a genuine issue of material fact regarding whether the lawyers “performed more than the usual professional services in advising their client in connection with plaintiff’s eligibility for benefits under the Plan.” The lawyers provided declarations stating their work involved reviewing documents and providing legal advice, which did not exceed traditional legal services. “Although plaintiff disagrees with the legal advice provided and criticizes the adequacy of the legal work done in advance thereof…such challenge does not constitute the type of showing necessary to support a finding of fiduciary status.” As for Chavez’s retaliation claim, she contended she was no longer pursuing it against the two lawyers. The court treated this attempted withdrawal as an amendment governed by Rule 16 of the Federal Rules of Civil Procedure, which requires a showing of “good cause.” Chavez did not provide good cause for the unilateral withdrawal of her retaliation claim, and thus the court granted the lawyers’ motion on this count as well. As a result, the lawyers’ motion for summary judgment was granted in full.

Discovery

Tenth Circuit

Mayor v. Metropolitan Life Ins. Co., No. 1:25-CV-00012, 2026 WL 1339911 (D. Utah May 14, 2026) (Judge David Barlow). Nicole Mayor brought this action against Metropolitan Life Insurance Company and two officers of Union Pacific Railroad, who were administrators of an ERISA-governed accidental death benefit plan under which her husband, Casey Mayor, was covered. Mr. Mayor died in May of 2023. After his death, Ms. Mayor requested a copy of the accidental death insurance policy but did not receive it. She also submitted a claim for benefits under the plan, but MetLife denied it, contending that benefits were not payable under a policy exclusion for deaths caused by the “voluntary” use of illicit drugs, as records suggested that Mr. Mayor’s death was due to fentanyl. Ms. Mayor then brought this suit, which included a claim under ERISA for statutory penalties due to Union Pacific’s failure to provide required information, and a claim for improper denial of benefits. At issue in this order was a discovery dispute. Ms. Mayor contended that the administrative record as produced by defendants was incomplete, and thus she filed an objection to the composition of the record, as well as a motion for discovery. In her discovery motion Ms. Mayor proposed seventeen document requests, which she divided into four categories: (1) documents regarding MetLife’s conflict of interest; (2) documents missing from the record; (3) documents referenced in the defendants’ pleadings; and (4) documents related to MetLife’s role in responding to plan information requests. To start, the court denied Ms. Mayor’s requests for discovery into MetLife’s conflict of interest, as she failed to justify the necessity of this discovery. The court noted that while MetLife’s dual role as claim administrator and payor presented a conflict of interest, Ms. Mayor did not substantively explain why her specific discovery requests were necessary. The court emphasized that ERISA cases are generally limited to the administrative record, and extra-record discovery is only appropriate “in ‘exceptional circumstances’ and ‘unusual cases.’” However, the court granted Ms. Mayor’s requests for documents that should have been included in the administrative record, such as the “actual” plan documents (the record only contained a summary plan description) and documents granting MetLife discretionary authority. The court noted that there might not be a master plan document, but “there is no question all plan documents MetLife compiled in the course of denying Ms. Mayor’s claim should be in the record,” and this included “all plan documents compiled in the course of denying the claim. If any documents are missing, the defendants must supplement the record accordingly.” This included any documents explicitly granting MetLife discretionary authority. Moving on, the court denied Ms. Mayor’s request for documents regarding MetLife’s alleged failure to consider Utah law regarding the proper interpretation of the policy term “voluntary,” as she had already failed to show that extra-record discovery was necessary. On this issue, “[t]he record is sufficient as it stands.” Next, the court granted Ms. Mayor’s requests for documents referenced in the defendants’ pleadings, but only to the extent they sought documents compiled by MetLife in the course of making its benefits decision. Finally, the court granted Ms. Mayor’s request for documents relating to her statutory penalty claim, specifically agreements between Union Pacific and MetLife regarding MetLife’s role in responding to information requests. The court found these documents relevant and necessary under Ms. Mayor’s theory of the claim, which was “premised on an agency relationship between Union Pacific and MetLife.” The court ordered defendants to supplement the administrative record with responsive documents, or provide verifications that the documents at issue did not exist.

Life Insurance & AD&D Benefit Claims

Fourth Circuit

Metropolitan Life Ins. Co. v. Cooper, No. 1:25-CV-1161, 2026 WL 1346605 (M.D.N.C. May 14, 2026) (Magistrate Judge L. Patrick Auld). This case involves a dispute over $124,000 in life insurance proceeds following the death of Thomas Eugene Fisher III, an employee of Daimler Trucks North America, LLC, who was a participant in Daimler’s ERISA-governed life insurance benefit plan. The plan was insured through a group policy issued by Metropolitan Life Insurance Company. In 2018, Fisher designated his domestic partner, Monica Overcash, as the beneficiary of his life insurance. However, in 2022, Fisher changed the beneficiary to his sister, Diane Cooper. Fisher passed away in April of 2025 due to complications from diabetes. Cooper submitted a claim for the benefits, but Overcash contested this, claiming Fisher lacked the mental capacity to change his beneficiary due to his health condition. Meanwhile, Cooper assigned $6,030.65 of the insurance proceeds to Summersett Funeral Home to cover Fisher’s funeral expenses. MetLife then filed this interpleader action, naming Overcash, Cooper, and Summersett as defendants. Cooper and Summersett filed answers, but Overcash failed to respond to the complaint. MetLife then filed a motion to deposit the insurance proceeds with the court and be discharged from liability. MetLife requested that the court determine the rightful claimant to the proceeds, as well as reimbursement for attorney’s fees and costs. The assigned magistrate judge recommended granting MetLife’s motion in part and denying it in part. The court found that MetLife properly invoked interpleader under Federal Rule of Civil Procedure 22, as the parties were diverse, the amount in controversy exceeded $75,000, and a single fund was at issue. However, the court found it “questionable whether Overcash constitutes a viable claimant…the record contains only Overcash’s unsworn April 2025 letter, the veracity of which the other evidence in the record seriously undermines.” Furthermore, “the record does not indicate what, if anything, MetLife did to investigate Overcash’s letter and/or the validity of Decedent’s designation of Cooper as his beneficiary.” Nevertheless, the court determined that the potential for future claims justified the interpleader. The court thus recommended that MetLife be (1) allowed to deposit the proceeds into the court’s registry, (2) dismissed from the action, and (3) discharged from further liability. However, the court denied MetLife’s request for a permanent injunction against further claims, as MetLife failed to demonstrate irreparable harm or satisfy the standards for injunctive relief. Furthermore, the court denied MetLife’s request for $3,686.36 in attorney’s fees and costs. The court based its decision on the fact that (1) “the record contains neither an explanation of MetLife’s delay in bringing the interpleader action nor an indication that MetLife sought to resolve this matter without litigation,” (2) “Overcash’s unsworn letter constitutes an incredibly slim reed upon which to disregard Decedent’s 2022 designation of Cooper as his beneficiary,” (3) “the evidence before the Court suggests that MetLife pursued this interpleader action largely for its own benefit, to secure protection from suit for its handling of Decedent’s life insurance policy,” (4) “the record establishes that this matter constitutes a routine aspect of Plaintiff’s business,” citing the “significantly ‘discounted rate’” it had negotiated for its representation, as well as “the formulaic nature” of its pleadings, and (5) “MetLife’s litigation strategies increased the cost of this litigation, as MetLife opted to employ process servers…at a cost of more than $700…rather than utilizing a ‘designated delivery service’…or certified mail to serve Defendants[.]” Finally, the court recommended realigning the parties with Cooper and Summersett as plaintiffs and Overcash as the defendant, and entering default against Overcash due to her failure to participate in the action.

Provider Claims

Second Circuit

Emsurgcare v. Hager, No. 25-1975-CV, __ F. App’x __, 2026 WL 1378672 (2d Cir. May 18, 2026) (Before Circuit Judges Nardini, Lee, and Robinson). This is an action by emergency medical providers Emsurgcare and Emergency Surgical Assistant (Emsurgcare) against one of their patients, Avery Hager, and Hager’s insurer, Oxford Health Plans (NY), Inc. and Oxford Health Insurance (Oxford). Emsurgcare sought to recover an unpaid balance on medical care it provided to Hager; Emsurgcare billed Oxford $103,500 for the services, but Oxford paid only $3,475. Emsurgcare sued Hager and Oxford in California state court, asserting breach of contract and account stated claims against Hager. Against Oxford, Emsurgcare alleged ERISA violations, tortious interference with contractual relations, and tortious interference with prospective economic advantage. The case was removed to federal court, where the Central District of California dismissed Emsurgcare’s claims against Hager, ruling that the practice of “balance billing” is illegal under California law, rendering the contract unenforceable. The remaining claims against Oxford were transferred to the Southern District of New York due to a forum selection clause. (Your ERISA Watch covered this ruling in our August 21, 2024 edition.)  In New York, Emsurgcare conceded that its tortious interference claims could not proceed, leaving only the ERISA claim against Oxford. The district court dismissed this claim because Emsurgcare failed to allege that it was a beneficiary or proper assignee of Hager’s health plan. (This decision was covered in our June 18, 2025 edition.) Emsurgcare appealed the dismissals of both Hager and Oxford to the Second Circuit, and this decision was the result. “On appeal, Emsurgcare surprisingly does not present any arguments explaining why the decisions of either district court were wrong on the merits. It essentially argues that both decisions cannot be right, and so at least one of them must be wrong. Specifically, Emsurgcare argues that if the California district court was correct that it cannot sue Hager, and the New York district court was correct that it cannot sue Oxford, then it is left in a Catch-22 where it cannot sue anyone. Such a situation is intolerable, it argues, and contravenes California law mandating that medical providers should have ‘recourse’ in disputes over a balance stemming from emergency medical services.” The Second Circuit was not convinced. It noted that Emsurgcare’s argument regarding its claims against Hager relied on a footnote from the California Supreme Court’s 2009 decision in Prospect Medical Group v. Northridge Emergency Medical Group, but that decision “express[ed] no opinion” on situations where providers have no recourse against health plans. The court characterized Emsurgcare’s arguments as “remarkably scant,” and stated that it “references none of the complicated California statutes that were analyzed in Prospect,” and “makes no effort to answer the question upon which the California Supreme Court offered ‘no opinion.’” As a result, the Second Circuit “discern[ed] no basis to disturb the dismissal of the claim against Hager.” As for the ERISA claim against Oxford, “Emsurgcare does not contend that the district court erred in dismissing it. We therefore deem that claim abandoned.” The rulings below were therefore affirmed.

Third Circuit

The Regents of the Univ. of Cal. v. Horizon Blue Cross Blue Shield of N.J., No. 2:24-CV-7482 (BRM)(CF), 2026 WL 1329562 (D.N.J. May 13, 2026) (Judge Brian R. Martinotti). This is an action by the University of California Irvine Medical Center (UCI) against Horizon Blue Cross Blue Shield of New Jersey alleging underpayment of benefits for three patients who were treated by UCI and were beneficiaries of health plans administered by Horizon. UCI originally filed the action in New Jersey state court, alleging claims for breach of implied contract and quantum meruit. These claims were based on two contracts with third-party insurers, Blue Shield of California and Anthem Blue Cross, which, like Horizon, were part of the nationwide Blue Card Program, and allegedly required UCI to treat Horizon’s beneficiaries and accept payment at specified rates. Horizon removed the case to federal court and then moved to dismiss the complaint because it was preempted by ERISA. In a May 27, 2025 order the court granted Horizon’s motion but gave UCI leave to amend. (Your ERISA Watch covered this ruling in our June 4, 2025 edition.) UCI amended its complaint, adding more information about the nature of the third-party contracts, and Horizon once again moved to dismiss. In this order the court once again found that UCI’s claims were preempted by ERISA, despite the new information, citing to ERISA’s “extraordinary pre-emptive power.” Even though UCI was not “standing in the shoes” of its patients pursuant to an assignment of benefits, the court ruled that its claims were still preempted because they were “premised on” an ERISA plan. UCI’s “claims [are] predicated on the plan,” the plan was “a critical factor in establishing liability,” and the claims “involve construction of the plan…or require interpreting the plan’s terms.” The court further determined that UCI failed to allege facts sufficient to establish an implied contract independent of the ERISA plans. The court noted that UCI’s only cited source of obligation was the Blue Card Program, but the program was a provision of the ERISA plans. Any claim based on the Program would therefore require construction of the plans, and be preempted. The court also found that UCI did not allege a long-standing relationship or specific representations by Horizon that would support an implied contract. “Indeed, the Amended Complaint is clear that Horizon was never contacted by the UCI Medical Center directly.” The court found it unfair to “ascribe an intent to be bound onto Horizon without some allegation that Horizon knew and approved of being bound by the representations of a third party.” Finally, the court dismissed UCI’s quantum meruit claim, stating that such a claim cannot coexist with a breach of contract theory, and furthermore, “an insurance company ‘derives no benefit’ from services provided to an insured for purposes of a quantum meruit claim.” As a result, the court once again dismissed UCI’s claims, again without prejudice.

Ninth Circuit

Women’s Recovery Ctr., LLC v. Anthem Blue Cross Life & Health Ins. Co., No. 8:20-CV-00102-JWH-ADS, 2026 WL 1288652 (C.D. Cal. May 7, 2026) (Judge John W. Holcomb). The plaintiffs in this case are a group of out-of-network substance use disorder treatment providers and clinical laboratories. They have filed a dozen actions, all consolidated here, against various health plan administrators, alleging that they provided medically necessary treatment and laboratory services to 1,691 individuals whose insurance was managed by the administrators, and that the administrators failed to pay or underpaid claims for the treatment and services. Defendants fired back with counterclaims, alleging that plaintiffs “engaged in an unlawful scheme…to defraud, interfere with, and undermine the [Counterclaimants] and the health plans they insure or administer,” thereby illegally enriching themselves to the tune of “millions of dollars.” Specifically, defendants alleged that plaintiffs submitted fraudulent claims, performed unnecessary medical services, and misrepresented billing records, among other activities. Defendants asserted claims for fraud, negligent misrepresentation, breach of contract as to non-ERISA plans, violation of unfair competition law, and equitable restitution under ERISA. Plaintiffs filed a motion to dismiss these counterclaims. Addressing ERISA preemption first, the court examined both express preemption and complete preemption arguments. The court found no express preemption because defendants’ state law claims “have only a ‘tenuous, remote, or peripheral connection with covered plans.’” The court acknowledged that “[a] determination of Counterclaimants’ obligations to pay will require a consultation with the Plans at issue. However, the counterclaims allege that Counterdefendants made fraudulent statements in the documents that they submitted to Counterclaimants. Those statements allegedly caused Counterclaimants to pay more than what was owed. Determining the veracity of those statements does not require significant interpretation of the ERISA plans. Therefore, the claims are not subject to conflict preemption under ERISA § 514(a).” As for complete preemption, the court applied the Ninth Circuit’s two-part test, derived from the Supreme Court’s ruling in Aetna Health Inc. v. Davila: “a state-law cause of action is completely preempted if (1) an individual…could have brought the claim under ERISA § 502(a)(1)(B), and (2) where there is no other independent legal duty that is implicated by a defendant’s actions.” The court jumped to the second prong first and stated that “the fraud and negligent misrepresentation state-law claims both involve violations of duties completely independent of ERISA.” The court ruled that the allegations regarding plaintiffs’ fraudulent activity and ordering of unnecessary treatment “would give rise to actionable claims resulting from a violation of a legal duty regardless of whether an ERISA plan was involved.” As a result, the court rejected plaintiffs’ argument that ERISA preempted defendants’ counterclaims. Regarding defendants’ claim for equitable relief pursuant to ERISA § 502(a)(3), the court dismissed the claim to the extent it sought the overpayment portion of a benefits distribution. Citing Ninth Circuit authority, the court ruled that “the overpayment is lacking in specificity because it is an undifferentiated component of a larger fund.” However, the court noted that defendants also sought payments “made…on the basis that the alleged misrepresentations rendered any payment improper under the terms of Counterclaimants’ Plan.” The court found that these claims could proceed “because the recovery sought is no longer an ‘undifferentiated component of a larger fund,’ but, rather, the entire payment.” The court further found that defendants had adequately alleged that the funds at issue were traceable to plaintiffs’ bank accounts. As for the remaining counterclaims, the court ruled that (1) the claims for fraud and negligent misrepresentation could continue because they provided sufficient details regarding the alleged fraudulent scheme; (2) defendants adequately pleaded a breach of contract claim because they alleged that plaintiffs, as assignees, were bound by the terms of the plans and breached them by waiving member responsibility amounts; and (3) defendants had standing under California’s Unfair Competition Law because they had a legally cognizable claim for the funds at issue. As a result, plaintiffs’ motion to dismiss was mostly a failure, and the court ordered them to file an answer to defendants’ counterclaims.

Retaliation Claims

Fourth Circuit

McClusky v. Allegis Grp. Inc., No. CV SAG-25-3891, 2026 WL 1378897 (D. Md. May 18, 2026) (Judge Stephanie A. Gallagher). Matthew McClusky worked for Allegis Group subsidiaries for approximately 20 years, most recently in Illinois as Director of Sales Operations for Actalent, Inc., Allegis’ engineering and sciences staffing company subsidiary. While at Allegis, McClusky participated in two ERISA-governed deferred compensation programs which included restrictive covenants such as 30-month non-compete and confidentiality provisions. In 2023, McClusky decided to relocate to Colorado to be closer to his family. He consulted with Allegis’ chief legal counsel about the restrictive covenants, who advised McClusky “that he would be ‘clean’ if he stayed away from the work he performed in Illinois or avoided engineering work altogether.” In Colorado McClusky started a new business, Industrial Talent Group, focusing on skilled trades staffing; this was an area handled by a different Allegis subsidiary (Aerotek, Inc.). Allegis initially paid McClusky $75,237 as the first installment of deferred compensation but later determined that he “had accessed internal documents and created a Colorado engineering market analysis while still employed, which the Committee deemed a confidentiality violation, and established Industrial Talent Group, which it found to be competitive activity.” As a result, Allegis terminated further payments, allegedly depriving him of more than $1.6 million, and indicated that it intended to recoup the first paid installment. McClusky filed this action, alleging two counts: wrongful denial of benefits, and retaliation in violation of ERISA’s anti-interference provision, 29 U.S.C. § 1140. McClusky’s retaliation claim was based on Allegis’ decision to recoup the initial payment. Allegis filed a motion to dismiss the retaliation claim. The court stated that McClusky’s claim “sounds in the standard for retaliation claims in an employment discrimination context and not ERISA’s distinct standard for interference with protected rights.” The court explained that “ERISA’s definition of interference requires specific prohibited conduct, which is ‘to discharge, fine, suspend, expel, discipline, or discriminate against a participant.’” The only possibility in this context was “discriminate,” but the court found that McClusky “has not alleged any facts to suggest discrimination, or that Plaintiff was treated differently from another similarly situated individual who had not exercised rights to which he was entitled under the [plans’] provisions.” Thus, McClusky “has not plausibly pleaded any facts that would suggest a plausible claim of discrimination in this context – that the recoupment occurred because he requested the review and not because he (in the Committee’s assessment, at least) had violated the restrictive covenants. Absent such facts, his § 1140 claim must be dismissed.” The dismissal was without prejudice.

Venue

Seventh Circuit

Braham v. Laboratory Corp. of Am. Holdings, No. 25 CV 15583, 2026 WL 1362509 (N.D. Ill. May 15, 2026) (Judge Jeffrey I. Cummings). The plaintiffs in this case are current or former employees of Laboratory Corporation of America Holdings (Labcorp). They were all participants in Labcorp’s Group Benefits Plan, which offered accident, critical illness, and hospital indemnity insurance. They allege that Labcorp and third-party advisor Willis Towers Watson, as fiduciaries of the plan, failed to exercise reasonable diligence in administering the plan, resulting in plaintiffs overpaying for insurance through excessive premiums. They claim Labcorp failed to select and monitor benefits offerings and providers diligently and did not ensure Willis Towers’ commissions were reasonable. Before the court here was defendants’ motion to transfer venue to the Middle District of North Carolina under 28 U.S.C. § 1404(a). The plaintiffs are residents of Illinois, North Carolina, Alabama, and Texas. Labcorp is based in Burlington, North Carolina, and while some of its employees are in Illinois, the majority work in North Carolina. Willis Towers is based in Virginia but has employees in both Illinois and North Carolina. The plan states that it is governed by North Carolina law. The court noted that the parties agreed that venue was proper in North Carolina, and thus it examined private and public interest factors to determine if transfer from Illinois to North Carolina was appropriate. On the private interest factors, the court ruled that (1) plaintiffs’ choice of forum was entitled to limited deference because the claims had weak ties to Illinois; only one of the four class representatives resided there, and it was a multi-state class action; (2) the situs of material events “strongly favored” transfer because the business decisions related to the plan were made in North Carolina; (3) the relative ease of access to sources of proof slightly favored transfer because most documents were located in North Carolina; (4) the convenience of the parties slightly favored transfer because evidence was required from Labcorp and Willis Towers employees, who were largely in North Carolina; and (5) the convenience of the witnesses favored transfer because key witnesses were located in North Carolina. On the public interest factors, the court found that (1) the court’s familiarity with the applicable law favored transfer because the plan was governed by North Carolina law, and the Middle District of North Carolina was more familiar with interpreting its own state’s laws; and (2) the desirability of resolving the controversy in North Carolina was more paramount because more putative class members resided in North Carolina, where Labcorp was headquartered, and the alleged unlawful activity took place there. As a result, “while there is no doubt that this Court could resolve the issues presented in this case, the Court finds in its discretion, taking both the private and public factors together, that defendants have made a sufficient showing warranting transfer of this case to the Middle District of North Carolina.” Defendants’ motion was thus granted.

Beard v. Lincoln Nat’l Life Ins. Co., No. 25-2950, __ F.4th __, 2026 WL 1279959 (8th Cir. May 11, 2026) (Before Circuit Judges Shepherd, Erickson, and Grasz)

This week’s notable decision represents the latest foray by the federal courts into the Serbonian Bog of “just what is an accident anyway?” The Eighth Circuit declined to wade in very far and instead deferred to the interpretation of the plan’s claim administrator. As a result, the rest of the case was a foregone conclusion.

The plaintiff was Tina D. Beard, who was married to Edward Beard. Mr. Beard was a participant in an ERISA-governed accidental death and dismemberment (AD&D) plan sponsored by his employer. At the time of his death Mr. Beard was suffering from stage IV pancreatic cancer. The cancer and his chemotherapy treatments caused side effects such as generalized weakness, chronic diarrhea, and an elevated risk of blood clots. To mitigate the risk of blood clotting, Mr. Beard took a blood thinner.

On December 16, 2022, Mr. Beard fell and hit his head while rushing to the bathroom. Although a CT scan conducted at the emergency room showed normal results, Mr. Beard became unresponsive the following morning, leading to a second CT scan that revealed a large subdural hematoma compressing his brain. He died the next day.

Mrs. Beard submitted a claim for benefits under the AD&D plan to the plan’s insurer and claim administrator, Lincoln National Life Insurance Company. The plan provided that benefits were payable when an insured “suffers a loss solely as the result of accidental Injury that occurs while covered.” “Injury” was defined as “bodily impairment resulting directly from an accident and independently of all other causes.” Furthermore, the plan excluded coverage “for any loss that is contributed to or caused by…disease, bodily or mental illness (or medical or surgical treatment thereof).”

Lincoln denied Mrs. Beard’s claim, contending that Mr. Beard “did not suffer a loss solely as the result of an accidental injury independently of all other causes,” and that coverage was excluded because the blood thinner Mr. Beard was taking “contributed to the subdural hematoma[.]” Lincoln supported these conclusions with reports from two physicians, who examined Mr. Beard’s medical records and determined that Mr. Beard’s “blood thinner usage contributed to the subdural hematoma that caused his death.”

Mrs. Beard then filed this action in the United States District Court for the Southern District of Iowa under ERISA Section 1132(a)(1)(B), seeking payment of the benefits at issue. Lincoln filed a motion for judgment, which was referred to a magistrate judge. The magistrate judge recommended that Lincoln’s motion be granted, and the assigned Article III judge (Hon. Rebecca Goodgame Ebinger) agreed, overruling Mrs. Beard’s objections.

Mrs. Beard then appealed to the Eighth Circuit, which issued this published opinion. The court reviewed Lincoln’s decision for abuse of discretion because the plan granted Lincoln discretion to construe its terms and determine benefit eligibility. Under this standard, the court explained that it was required to uphold Lincoln’s decision if it was reasonable and supported by substantial evidence.

The court examined both of Lincoln’s reasons for denying Mrs. Beard’s claim, declaring, “We agree with Lincoln Life on both issues.” First, the court stated that Mrs. Beard had the burden to prove that her claim should be covered, and thus she was obligated to show that Mr. Beard suffered a loss “solely as the result of accidental injury, independently of all other causes.” This meant that Mrs. Beard had to prove that “the injury that caused Mr. Beard’s death resulted directly from his fall.”

The Eighth Circuit agreed with the district court that Mrs. Beard did not meet her burden. Lincoln’s denial letter explained that Mr. Beard’s blood thinner usage contributed to his hematoma, Mrs. Beard “did not come forward with any contrary evidence while her claim was before Lincoln Life,” and she conceded in her appellate briefing that the blood thinner probably did contribute to the hematoma. As a result, “because Mrs. Beard did not show Mr. Beard’s hematoma was caused by his fall, independently of all other causes, her claim was not covered.”

As for the plan’s exclusion for “disease, bodily or mental illness,” the Eighth Circuit noted that the burden shifted to Lincoln on this issue because “’when the administrator of an ERISA plan denies a claim based on an exclusion, it ‘has the burden of proving that the exclusion applies.’”

The court noted that “Mrs. Beard states in her brief that she ‘has no objection’ to Lincoln Life interpreting ‘contribute’ as ‘to give or furnish along with others towards bringing about a result.’” As a result, the “the only thing left for us to decide is whether Lincoln Life supported its conclusion that Mr. Beard’s blood thinner usage contributed to his death with substantial evidence.”

The court concluded that Lincoln had met its burden. Lincoln had relied on reports from its two physicians, both of whom “expressly concluded Mr. Beard’s blood thinner usage contributed to his death.” These doctors noted that subdural hematomas “mainly occur” in people who use blood thinners “because blood clots less easily and any bleeding…is likely to be more severe.” In such scenarios, “the outcome is likely to be worse, the risk of death doubles, and the hematoma is more likely to expand.” As a result, the court found that “a reasonable mind might accept” these opinions “‘as adequate to support [Lincoln Life’s] conclusion’ that Mr. Beard’s blood thinner usage gave or furnished along with his fall toward bringing about his death.”

Mrs. Beard contended that Lincoln’s evidence “only showed Mr. Beard’s blood thinner usage contributed to his hematoma, not his death,” but the court found that this argument “misses the mark for two reasons.” First, even if the court was not employing a deferential review, Mrs. Beard’s argument “invites us to conflate contributed to with something like effective cause.”

Second, under deferential review “we can only review for abuse of discretion and ‘must defer to [Lincoln Life]’s interpretation of the plan so long as it is ‘reasonable,’ even if [we] would interpret the language differently as an original matter.’” Mrs. Beard “concedes Lincoln Life’s interpretation is reasonable. We are therefore bound to apply that definition, as we did above.”

As a result, the Eighth Circuit affirmed the district court’s judgment and upheld Lincoln’s denial of Mrs. Beard’s claim for AD&D benefits.

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

Attorneys’ Fees

Third Circuit

Barragan v. Honeywell Int’l Inc., No. 24-CV-4529 (EP) (JRA), 2026 WL 1229040 (D.N.J. May 5, 2026) (Judge Evelyn Padin). This is a putative class action in which Luciano Barragan, on behalf of the Honeywell International Inc. 401(k) Plan, contends that Honeywell and related defendants violated fiduciary duties and engaged in prohibited transactions under ERISA by using forfeited employer contributions to the plan to offset future employer contributions to the plan instead of defraying administrative costs. In August of 2025 the court granted defendants’ motion to dismiss the case. The court ruled that the plan participants received all the benefits to which they were entitled, and that defendants followed plan rules and did not violate any fiduciary duties under ERISA, which gives plan administrators freedom in designing and administering plans. (Your ERISA Watch covered this decision in our August 27, 2025 edition.) Barragan has appealed this decision to the Third Circuit Court of Appeals, and in the meantime, defendants filed a motion for attorney’s fees. The court noted that federal courts have “significant discretion to manage their dockets as they see fit,” and decided to exercise that discretion to “defer deciding Defendants’ Motion until Plaintiff’s Appeal is resolved.” The court stated that deciding the motion before the appeal could lead to unnecessary steps if the Third Circuit reverses the dismissal. The court further emphasized that a decision from the Third Circuit would provide clarity on the merits of defendants’ motion, particularly regarding the Ursic factors, which courts in the Third Circuit use to decide whether attorney’s fees should be awarded. These factors included the degree of Barragan’s culpability and the relative merits of the parties’ positions. The court was “mindful” that many other courts have ruled that a pending appeal is insufficient to delay adjudication of an attorney’s fees motion, but “[t]he Court finds this action distinguishable in several respects. Most notably, Plaintiff commenced this action only two years ago, and Plaintiff has not made it past the pleadings stage (i.e., there has been no trial).” Thus, “the Court is of the view that in this action, it makes most sense to decide the Motion once Plaintiff’s Appeal has been resolved. While the Court recognizes the decisions to the contrary by several District Courts in this Circuit, the Court respectfully disagrees with their reasoning and is of the view that such a deferral is appropriate here.” The court thus ordered defendants’ motion to be administratively terminated, and allowed them to refile their motion “upon the resolution of Plaintiffs’ Appeal.”

Sixth Circuit

Chalk v. Life Ins. Co. of N. Am., No. 3:25-CV-133-RGJ, 2026 WL 1252337 (W.D. Ky. May 7, 2026) (Judge Rebecca Grady Jennings). Jennifer Chalk filed this action against Life Insurance Company of North America (LINA), alleging wrongful denial of her claim for ERISA-governed long-term disability (LTD) benefits. In November of 2025 the court ruled that LINA failed to render a decision on her claim within 45 days in violation of 29 C.F.R. § 2560.503-1(f)(3). As a result, the court remanded to LINA, finding that this procedural violation prevented a full and fair review and resulted in an incomplete and insufficient administrative record. (Your ERISA Watch covered this ruling in our November 5, 2025 edition.) In its ruling, the court indicated it would entertain a motion for attorney’s fees, so Chalk filed one. In the meantime, LINA requested additional information from Chalk, including medical records and other documentation, which Chalk provided. LINA then asked Chalk to undergo an independent medical evaluation (IME), which Chalk refused, arguing that her claim was “no longer ‘pending,’” and instead was on appeal, due to LINA’s failure to make a timely decision. Chalk then filed a motion to reopen the case, contending that LINA’s deadline to decide had passed. LINA scheduled the IME for January of 2026, but Chalk did not attend. LINA eventually approved Chalk’s claim for three months but denied it thereafter, citing her failure to attend the IME and the opinion of its medical director that her restrictions were consistent with her occupation. As a result, the court faced two motions: one to reopen the case and one for attorney’s fees. LINA opposed the motion to reopen, arguing that the applicable ERISA deadlines were not violated because the remand required a full initial review, not an appeal. The court sided with LINA, ruling that LINA had acted in a timely fashion because “LINA never conducted an initial review and thus there was no initial claim determination for Chalk to appeal.” The court thus ruled that “Chalk’s LTD claim remains properly before LINA on administrative review, consistent with the terms of the LTD Policy and all applicable ERISA requirements. For the avoidance of doubt, Chalk must exhaust her administrative appeal before reopening this case. In the interest of fairness, however, the Court will permit Chalk 180 days from this Order to file her appeal, though she may of course proceed sooner.” As for attorney’s fees and costs, the court granted Chalk’s request for costs but denied her request for fees. The court agreed that Chalk had achieved “some success on the merits” by obtaining a remand. However, in applying the Sixth Circuit’s five-factor King test, the court found that LINA’s failure to comply with ERISA’s notice requirements was due to a procedural mistake, not bad faith. The court further determined that a fee award would not deter other plan administrators from making honest mistakes and that the remand did not resolve a significant legal question or confer a common benefit on other plan participants. As a result, Chalk’s motion to reopen was denied, her request for $20,921 in fees was also denied, and she walked away from the skirmish with only $450.37 in costs.

Breach of Fiduciary Duty

Eleventh Circuit

Ulch v. Southeastern Grocers LLC, No. 3:23-CV-1135-TJC-MCR, 2026 WL 1243069 (M.D. Fla. May 6, 2026) (Judge Timothy J. Corrigan). Joyce Ulch, an employee of Southeastern Grocers LLC (SEG), brought this putative class action against SEG, contending that it has mismanaged the recordkeeping fees of its ERISA-governed 401(k) retirement savings plan, in which she is a participant. The plan’s recordkeeper is Fidelity Investments Institutional, which has received both direct and indirect compensation for its services. Ulch claims that the direct compensation the plan paid Fidelity was excessive relative to the services provided, and that SEG could have obtained cheaper fees because the plan has over $1 billion in assets and more than 12,000 participants, making it a “mega” plan with significant bargaining power. Additionally, she claims that Fidelity received excessive indirect compensation through “float” on participant money and revenue sharing from investments in the plan. SEG filed a motion to dismiss. At the outset, the court addressed the exhibits attached to SEG’s motion, which included “an attorney declaration, overviews of the Plan, Form 5500 reports, and documents from the earlier administrative process.” Ulch objected to these, contending that SEG was “asking the Court to weigh evidence and make factual determinations about disputed facts and to decide those disputed facts in Defendant’s favor at the dismissal stage.” The court agreed, ruling that many of the facts in the exhibits were disputed, and that SEG was “improperly…attempting to expand the appropriate record before the Court[.]” On the merits, the court found Ulch’s allegations regarding direct compensation plausible, as she “provided five comparable benchmarks of similar retirement plans with substantially lower reported recordkeeping fees than the Plan at issue here. By doing so, she has pled factual content that allows the Court ‘to draw the reasonable inference’ that SEG breached its fiduciary duty under ERISA by allowing Fidelity to receive excessive direct compensation.” As for indirect compensation, the court stated, “Although SEG raises some important questions about the strength of Ulch’s indirect compensation arguments, these questions cannot be decided on a motion to dismiss.” The court emphasized that the duty of prudence under ERISA is context-specific and cannot be fully assessed without discovery. On the complaint before it, the court concluded that “it is plausible that SEG breached its duty of prudence by failing to monitor Fidelity’s float and revenue sharing income.” As a result, although the court “makes no prediction on how this case will ultimately be decided on the merits,” Ulch’s complaint was sufficient to get past SEG’s motion to dismiss, which was denied.

Class Actions

Ninth Circuit

In re Sutter Health ERISA Litig., No. 1:20-CV-01007-LHR-BAM, 2026 WL 1283323 (E.D. Cal. May 11, 2026) (Judge Lee H. Rosenthal). In this class action, participants of the Sutter Health 403(b) Savings Plan alleged that plan fiduciaries violated their duties of prudence and loyalty by selecting and maintaining certain funds in the plan’s portfolio which had poor performance histories, and by charging participants unreasonable fees. Plaintiffs were able to dodge a motion to dismiss in 2023, and the parties subsequently reached a settlement. The court previously granted preliminary approval of the settlement, preliminary certification of the class for settlement purposes, and scheduled a fairness hearing. The court conducted that hearing in April, and in this brisk and efficient order the court granted final approval of the settlement agreement, finding it fair, reasonable, and adequate for the plan and the settlement class. The court certified the class under Federal Rules of Civil Procedure 23(a) and (b)(1), noting that the class was ascertainable, numerous, and had common questions of law or fact. The claims of the class representatives were typical of the class, and they were deemed capable of adequately protecting the class’s interests. The court also found that separate actions by individual class members could lead to inconsistent adjudications. As for the terms of the agreement, the court approved the settlement amount of $4,300,000, considering it fair and reasonable given the costs, risks, and potential delays of continued litigation. The settlement was negotiated at arm’s length with the assistance of a neutral mediator, and both parties had sufficient information to evaluate the settlement’s value. The court also approved the plan of allocation and found that the notice provided to the class was adequate and satisfied due process requirements. The court awarded $1,433,33.33 in attorneys’ fees to class counsel and $12,500 in compensatory awards to the class representatives, finding these amounts fair and reasonable based on the efforts and results achieved. The court dismissed the operative complaint with prejudice, entered judgment, and retained jurisdiction to resolve any disputes related to the settlement agreement.

ERISA Preemption

Seventh Circuit

Herbst v. Progress Rail Servs. Corp., No. 3:26-CV-145 DRL-SJF, 2026 WL 1238543 (N.D. Ind. May 4, 2026) (Judge Damon R. Leichty). Kody Herbst filed a lawsuit in state court against his former employer, Progress Rail Services Corporation, and a related entity, claiming that Progress Rail “misrepresented the date on which his employer-sponsored health coverage would end. In reliance on that representation, he incurred medical expenses that were not covered because his health plan terminated earlier.” Herbst brought claims for breach of contract, negligent misrepresentation, promissory estoppel, and equitable estoppel. Progress Rail removed the case to federal court on ERISA preemption grounds. Herbst moved to remand, arguing that the removal was untimely and the court lacked jurisdiction. Addressing timeliness first, Herbst argued that service was complete upon mailing the summons and complaint on December 31, 2025, under Indiana Trial Rule 5. However, the court clarified that Rule 5 applies to subsequent filings, not the original complaint. Service of the summons and original complaint is governed by Rule 4, which requires receipt for service to be effective. Service of these documents was deemed complete on January 5, 2026, making Progress Rail’s February 4, 2026 removal timely. As for jurisdiction, the court applied the two-part test from Aetna v. Davila to determine whether ERISA preemption applied. Apparently neither side applied this test in their briefing, so the court “treads lightly.” It found that Herbst’s negligent misrepresentation and estoppel claims were not preempted as they arose from “separate oral representations” and involved legal duties independent of ERISA. Mr. Herbst’s breach of contract claim was more complicated. The court stated that it was based on two theories. The first theory, alleging modification of the benefits arrangement, would likely be preempted by ERISA. The second theory, based on an enforceable employment agreement, would not necessarily depend on ERISA. Because federal law was only essential to only one theory, not both, the court determined that the contract claim was not completely preempted. Progress Rail argued in the alternative that Herbst’s claims constituted a “classic ERISA fiduciary-breach claim,” which would be preempted. However, the court found this argument “underdeveloped” because Progress Rail did not fully explain how it was a fiduciary or what its fiduciary duties were. The court noted that Progress Rail bore the burden of proving that removal was proper, and “doubts are resolved in favor of remand.” Finally, the court denied Herbst’s request for attorney fees, despite Progress Rail’s “underdeveloped” presentation of the removal issue: “§ 1447(c) isn’t a fee-shifting mechanism merely for unsuccessful advocacy, and the court cannot say the removal position was so clearly foreclosed as to be called objectively unreasonable.” Thus, Herbst obtained his requested remand, but he had to pay for the privilege.

Pension Benefit Claims

Seventh Circuit

Brya v. Pfizer Inc., No. 1:25-CV-06481, 2026 WL 1245461 (N.D. Ill. May 6, 2026) (Judge Sharon Johnson Coleman). In 2003, Thomas J. Brya was terminated by his employer, Pfizer Inc.  At that time, he received $427,230.16 in severance benefits in exchange for signing a release agreement that discharged Pfizer from any claims, including those under ERISA. In 2023 Brya received $548,514.14 in pension benefits. He contended that this number was miscalculated by Pfizer, but Pfizer denied his claim and subsequent appeal. As a result, in 2025 Brya filed this action against Pfizer and related defendants, alleging multiple violations of ERISA. His claims included: “(1) a breach of fiduciary duty claim for Defendants’ failure to provide accurate and comprehensive plan communications and for denying his pension claims without addressing substantive factual and legal considerations; (2) a claim for self-dealing and fraudulent nondisclosure stemming from Defendants’ use of administrative processes to deter participants from obtaining benefits; (3) violation of claims procedure for failing to provide Brya with a full and fair review on his benefits claim; (4) incorrect calculations and denial of pension benefits, (5) a claim for fiduciary misconduct against [a Pfizer manager] for transacting for her own benefit; (6) and a claim for breach of co-fiduciary duties against all Defendants.” Defendants moved to dismiss for failure to state a claim, arguing that (1) Brya’s claims were time-barred, (2) Brya’s claims were precluded by a decision in another case, Walker v. Monsanto, and (3) Brya released his claims in his severance agreement. The court agreed with all three arguments. First, the court found that Brya’s claims were barred by ERISA’s six-year statute of repose. The alleged miscalculation of Brya’s initial cash balance occurred in 1997, and the cessation of restoration credits to his plan account occurred in 2014, both outside the six-year period. Brya’s arguments for tolling the statute due to fraud and concealment were rejected because he was aware of the changes to his pension plan “long before filing suit.” Furthermore, Brya “has not pointed to any ‘steps taken by [the Committee] to cover their tracks’ or ‘to hide the fact of the breach.’” Second, the court determined that Brya’s claims were precluded by the ruling in the Walker class action, which addressed the same issues identified by Brya under the same plan provisions. The court noted that Brya was part of the class certified under Rule 23(b)(1) and (b)(2), which did not require notice or opt-out options for class members. Because Brya was a member of the class in Walker, and the Seventh Circuit ruled in favor of the plan in that case, his claims were barred by res judicata and collateral estoppel. Third and finally, the court concluded that Brya’s claims were barred by the release agreement he signed in 2003, which discharged Pfizer from any claims, including those under ERISA. The court further noted that Brya had not tendered back the severance payment, which was a condition precedent to challenging the validity of the release. As a result, Pfizer’s motion to dismiss was granted, with prejudice.

Pleading Issues & Procedure

Third Circuit

Aramark Services, Inc. v. QCC Ins. Co., No. CV 26-1664, 2026 WL 1284841 (E.D. Pa. May 11, 2026) (Judge Gerald J. Pappert). Aramark Services, Inc., along with its Group Health Plan, Uniform Services Health and Welfare Plan, and Benefits Compliance Review Committee initiated this action against QCC Insurance Company, Independence Blue Cross, and Independence Health Group, Inc. Aramark contends that defendants violated ERISA by breaching their fiduciary duties to Aramark’s plan and engaging in prohibited transactions, although the details of those allegations were not revealed in this order. Instead, this order evaluated QCC’s motion to seal parts of exhibits to Aramark’s complaint. Aramark asked for sealing relief first, although its request was more expansive; it wanted to file the entire complaint and three exhibits under seal. The court denied Aramark’s request, ruling that Aramark failed to overcome the federal courts’ presumption against sealing. In response, QCC moved to re-seal the three exhibits and file redacted versions on the public docket. The court acknowledged the public’s “presumptive right of access to judicial records,” which includes “pleadings and other materials submitted by litigants.” To overcome this presumption, the court stated that QCC had to show that “the material [sought to be sealed] is the kind of information that courts will protect and that disclosure will work a clearly defined and serious injury to the party seeking closure.” The information at issue was contained in the administrative services agreement (exhibit 1), network services contract (exhibit 2), and proposal for services (exhibit 3) between the parties, and included charges and fees as well as details about QCC’s cost reduction and savings program. QCC argued that this information was “not publicly available, is closely guarded by [QCC] in the ordinary course of business, and is disclosed to counterparties only subject to contractual confidential protections.” This was good enough for the court, which accepted that “the information might harm QCC’s competitive standing… Competitors could reverse-engineer its fees to undercut QCC’s competitive bids or replicate its cost-saving methods.” Furthermore, the redactions proposed by QCC “are limited to commercially sensitive information,” “minimally impact the public’s right to access,” and were “largely irrelevant” to the issues raised by the action. As a result, the court granted QCC’s motion.

Fourth Circuit

L.P. v. North Carolina Dental Soc’y, No. 1:26-CV-00104-MR, 2026 WL 1265748 (W.D.N.C. May 8, 2026) (Judge Martin Reidinger). L.P. is an employee enrolled in the ERISA-governed North Carolina Dental Society Healthcare Plan, and C.P. is L.P.’s dependent child and a beneficiary under the plan. From August 2024 through June 2025, C.P. received treatment at a residential facility for mental health issues. L.P. sought coverage for the treatment costs under the plan, but the claims administrator, Interactive Medical Systems Corporation (IMS), denied the claims. After exhausting the plan’s appeals, L.P. filed this action, asserting two claims for relief under ERISA: one for recovery of benefits under 29 U.S.C. § 1132(a)(1)(B), and the second for equitable relief under 29 U.S.C. § 1132(a)(3) for violation of the Mental Health Parity and Addiction Equity Act (MHPAEA), 29 U.S.C. § 1185a(a)(3)(A)(ii). Plaintiffs filed a motion to proceed anonymously, arguing that the case involves sensitive information about C.P.’s mental health challenges. (No defendant had yet appeared in the case so there was no opposition.) The court evaluated plaintiffs’ request using the Fourth Circuit’s five-factor test under James v. Jacobson. Under this test, the court denied plaintiffs’ motion. The court reasoned that (1) the core allegation – IMS’s denial of benefits for treatment – was not extraordinarily sensitive or personal, as it is a common assertion in ERISA actions; (2) plaintiffs acknowledged that there was no danger of direct retaliatory harm if they were not allowed to proceed anonymously; (3) although C.P. was a minor when the treatment began, C.P. had reached the age of majority by the time of the case was filed, and Federal Rule of Civil Procedure 5.2 does not require initials for adults; (4) the defendants were private companies, which weighed against allowing anonymity; and (5) plaintiffs were correct that there was no risk of harm to the defendants from the use of initials because defendants already possessed the relevant documents in unredacted form. Thus, only one factor weighed in favor of plaintiffs. In the end, “the Court must balance the Plaintiffs’ interest in anonymity against the public’s interest in openness… Here, the public has a strong interest in openness. To the extent these proceedings involve particularized, private, and sensitive information, redactions and filing under seal can limit access when needed without altogether concealing the identity of the litigants from the public.” Plaintiffs’ motion was thus denied, and the court directed them to file an amended complaint with their full names.

Provider Claims

Fifth Circuit

Abira Medical Laboratories, LLC v. Healthy Blue, Civ. No. 24-1039-SDD-SDJ, 2026 WL 1276441 (M.D. La. May 8, 2026) (Judge Shelly D. Dick). Abira Medical Laboratories, LLC, doing business as Genesis Diagnostics, is a provider of medical laboratory testing services and a frequent litigant asserting claims against insurers and benefit plans. In this action it sued a managed care organization called Healthy Blue, alleging that Healthy Blue refused to pay for out-of-network services provided by Abira. Abira contends that the requisitions for testing services that it submitted on behalf of Healthy Blue’s enrollees conferred third-party beneficiary status on it and allowed it to sue Healthy Blue under federal and state law. Specifically, Abira asserted claims for (1) violation of ERISA, (2) breach of third-party beneficiary contract, (3) breach of third-party bad faith, (4) quantum meruit/unjust enrichment, and (5) negligence. Healthy Blue filed a motion to dismiss, which the court converted into one for summary judgment. Abira failed to file a response, and thus the outcome was no surprise. The court granted Healthy Blue’s motion, dismissing all of Abira’s claims with prejudice. The court found that Abira had entered into a participating provider agreement with Healthy Blue in 2018, making it a participating provider in Healthy Blue’s network. This meant that the only viable claim Abira could have asserted was a breach of the agreement for failing to reimburse amounts due under the agreement, which was not alleged in the complaint. As a result, the court (1) dismissed the ERISA claim because Healthy Blue “does not issue, fund, underwrite, or administer employee health benefits plans, and does not issue, fund, underwrite, or administer commercial health insurance policies,” (2) ruled that Abira failed to provide evidence of any contract conferring third-party beneficiary status, (3) ruled there was no third-party bad faith for the same reason, (4) dismissed Abira’s quantum meruit claim because providing healthcare services to an insurance policy participant does not confer a benefit on the insurer, and (5) ruled that Abira’s claims were governed by the Medicaid framework and the parties’ agreement, and thus its negligence claim was not viable.

Standard of Review

Ninth Circuit

Farris v. Life Ins. Co. of N. Am., No. 25-CV-04164-RS, 2026 WL 1270071 (N.D. Cal. May 8, 2026) (Judge Richard Seeborg). Heather Farris lives in California and was employed by Lowe’s Companies, Inc., which is incorporated in North Carolina. Farris was a participant in Lowe’s ERISA-governed long-term disability employee benefit plan, which was insured by Life Insurance Company of North America (LINA). The policy insuring the plan was issued to Lowe’s in North Carolina, effective September 1, 2013, and includes a provision stating it is governed by North Carolina law. Farris submitted a claim for benefits to LINA under the plan, but LINA denied it, so Farris subsequently brought this action. Before the court here was LINA’s motion regarding choice of law and the applicable standard of review. The court treated the motion as one for partial summary judgment under Federal Rule of Civil Procedure 56 because LINA attached declarations and plan documents to its motion. Farris opposed the motion, contending that the plan was governed by California Insurance Code Section 10110.6, which became effective January 1, 2012, and provides that if a disability insurance policy is “offered, issued, delivered, or renewed, whether or not in California…that reserves discretionary authority to the insurer…to determine eligibility for benefits or coverage [or] to interpret the terms of the policy…that provision is void and unenforceable.” The court found first that the North Carolina choice of law provision was valid. Farris argued that the policy contained notices for residents of other states which vitiated the provision, but the court disagreed: “The statement, on the cover page of the Policy, that the Policy ‘shall be governed by [North Carolina’s] laws’ unambiguously reflects a choice of North Carolina law.” The court then ruled that the choice of law provision was enforceable. The court stated that choice of law provisions are enforceable under federal law so long as they are “not unreasonable or fundamentally unfair.” The court noted that various courts in the Northern District of California have upheld non-California choice of law provisions, even when they do not provide the protections intended by California Insurance Code § 10110.6. The court found “no persuasive reason to break from those cases.” (Your ERISA Watch covered the most recent of these cases, Moorhead v. Unum, in our April 8, 2026 edition.) The court ruled that “North Carolina choice of law is fair and reasonable for similar reasons as in those cases. Lowe’s is headquartered in North Carolina with hundreds of thousands of employees in states across the country, and so uniform application of North Carolina law to each dispute arising under the LTD policy is reasonable… Accordingly, the North Carolina Provision is enforceable as a choice of law provision, and the Discretionary Review Provisions are not voided by Section 10110.6.” The court thus granted LINA’s motion, and Farris’ claims will be decided under the abuse of discretion standard of review.

Aramark Servs., Inc. Grp. Health Plan v. Aetna Life Ins. Co., No. 24-40323, __ F.4th __, 2026 WL 1154313 (5th Cir. Apr. 28, 2026)

This week’s notable decision is not a decision at all. Instead, it’s a two-paragraph order in which the Fifth Circuit vacated its December 18, 2025 published opinion in this case and agreed to rehear it en banc.

In its December ruling (which Your ERISA Watch covered as one of our cases of the week in our December 24, 2025 edition), a three-judge panel of the Fifth Circuit examined an arbitration provision in an agreement between an employee health plan sponsored by Aramark Services, Inc. and the third-party administrator of the plan, Aetna Life Insurance Company. Aramark had sued Aetna, contending that Aetna was liable for breach of fiduciary duties and prohibited transactions under ERISA based on Aetna’s improper payment of provider claims, retaining undisclosed fees, and engaging in claims-handling misconduct.

Aetna filed a motion to compel arbitration, but the district court denied it. The district court ruled that (1) the parties had not clearly and unmistakably delegated the issue of arbitrability to the arbitrator, and thus it was the court’s job to decide the issue, and (2) Aramark’s claims were equitable in nature and thus not subject to arbitration, because the arbitration clause exempted “temporary, preliminary, or permanent injunctive relief or any other form of equitable relief.”

The Fifth Circuit panel affirmed, ruling that the arbitration provision was ambiguous and thus, under the rule of contra proferentem (ambiguous language should be construed against the drafter, i.e., Aetna), the issue of arbitrability was for the court to decide. The Fifth Circuit further ruled that the relief requested by Aramark, even though it was monetary, was equitable in nature and could be sought pursuant to the Supreme Court’s 2011 guidance in Cigna Corp v. Amara and the Fifth Circuit’s 2013 decision interpreting Amara in Gearlds v. Entergy Servs., Inc.

The decision was not unanimous. Judge Edith H. Jones agreed with the first part of the decision regarding arbitrability, but wrote a vigorous dissent in which she accused Amara of causing “confusion,” characterized its discussion of equitable surcharge as dicta, and contended that the dicta was at odds with the holdings of other Supreme Court cases. As a result, she contended that the Fifth Circuit “should repudiate Gearlds” and rule that the monetary remedy sought by Aramark did not constitute “equitable relief.”

This week’s order does not explain which part of the panel’s decision attracted the interest of the full court, but the smart money is obviously on the second part which antagonized Judge Jones. Will the Fifth Circuit jettison Gearlds and follow the path blazed by the Fourth Circuit (in Rose v. PSA Airlines, Inc. (2023)) and Sixth Circuit (in Aldridge v. Regions Bank (2025))? Or will it stick to its guns and deepen a circuit split? We will of course keep you in the loop.

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

Attorneys’ Fees

Third Circuit

Allied Painting & Decorating, Inc. v. International Painters & Allied Trades Indus. Pension Fund, No. CV 21-13310 (RK), 2026 WL 1168178 (D.N.J. Apr. 29, 2026) (Magistrate Judge Tonianne J. Bongiovanni). This is a withdrawal liability case under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) in which the International Painters and Allied Trades Industry Pension Fund contended that Allied Painting & Decorating, Inc. owed the fund $427,195 based on Allied’s withdrawal from the fund in 2005, even though the fund did not pursue payment until 2017. An arbitrator found that the fund did not act “as soon as practicable” in issuing a notice and demand to Allied, but still ruled in the fund’s favor because Allied was not prejudiced by this delay, thereby dooming its laches defense. However, the district court vacated this award, citing “‘a reasonable appearance of bias against Allied,’ which resulted in the ‘deprivation of a fair hearing.’” The fund appealed to the Third Circuit, which affirmed in July of 2024. The appellate court ruled that Allied did not even need to raise its laches defense, let alone prevail on it. Instead, the duty to provide notice of withdrawal liability assessment and demand payment “as soon as practicable” was a statutory prerequisite to obtaining relief, and the fund flunked this requirement with its twelve-year delay. (Your ERISA Watch reported on this decision in our July 17, 2024 edition.) Fresh off this victory, Allied renewed its motion for attorney’s fees, which the district court assessed in this order. The parties agreed that in withdrawal liability cases fees may be awarded to a prevailing party under 29 U.S.C. § 1451(e). However, the parties disagreed over what standard to apply under that statute. Allied contended that the court should use the Third Circuit’s five-factor test as set forth in Ursic v. Bethlehem Mines, while the fund contended that the court should use the standard set forth in the Third Circuit case of Dorn’s Transp., Inc. v. Teamsters Pension Tr. Fund of Philadelphia & Vicinity. The court noted that “the MPPAA was not at issue in the Ursic matter, which instead involved a request for attorney’s fees based on an employee’s successful claim under § 510 of ERISA to recover past and future pension benefits.” Dorn’s, on the other hand, was an MPPAA case, and thus “Dorn remains the applicable Third Circuit precedent for determining whether to award attorneys’ fees and expenses to a prevailing employer under the fee shifting provisions of the MPPAA.” Under Dorn’s, a prevailing employer “is entitled to attorneys’ fees only if the Plan’s assessment of withdrawal liability was frivolous, unreasonable or without foundation.” Under this demanding standard the court denied Allied’s motion for attorney’s fees. The court noted that prior to the Third Circuit’s decision in this case, it was “generally understood” that “even where there was a delay in a fund asserting a payment demand, an employer would still have to raise a laches objection” and establish prejudice. However, the Third Circuit clarified in its ruling that “prejudice and, indeed the laches defense, have no place in the withdrawal liability calculus[.]” This ruling “represents a significant shift in the law that could not have been reasonably anticipated or foreseen by the Fund.” Thus, “while the Fund ultimately did not prevail, under the circumstances presented, the Court finds that the Fund’s assessment of withdrawal liability was not frivolous, unreasonable or without foundation. As a result, Allied’s motion for attorney fees and expenses is DENIED.”

Seventh Circuit

Ryan v. Hartford Life & Accident Ins. Co., No. 21-CV-592-WMC, 2026 WL 1146274 (W.D. Wis. Apr. 28, 2026) (Judge William M. Conley). Plaintiff Frances Ryan was an internal medicine physician who was a participant in an ERISA-governed long-term disability benefit plan insured by Hartford Life & Accident Insurance Company. She became disabled in 2018 after she suffered an injury to her head on vacation which caused post-concussion symptoms. Hartford initially approved Ryan’s claim in 2018, but in 2020 it terminated her benefits, contending she had no cognitive limitations and could return to work in her own occupation. Ryan unsuccessfully appealed and then brought this action. In June of 2025 the court ruled on cross-motions for summary judgment that Hartford abused its discretion in denying her claim and remanded to Hartford for further review. (Your ERISA Watch covered this decision in our June 25, 2025 edition.) On remand, Hartford caved and reinstated Ryan’s benefits. The only remaining item before the court was Ryan’s motion for attorney’s fees and costs under 29 U.S.C. § 1132(g)(1), which the court granted in this order. First, the court determined that Ryan met the threshold requirement of “some success on the merits” for fee eligibility under ERISA. Hartford argued that the court’s remand was a “purely procedural” victory and did not meet this standard. However, the court found this argument “baseless” because Ryan’s benefits were ultimately reinstated pursuant to the order. Moving on to entitlement, “the Seventh Circuit employs two tests – a five-factor test and the ‘substantially justified’ test.” Both tests yielded the same result, favoring an award. The court found that Hartford’s position was not substantially justified, it had “ample means” to satisfy an award, and an award would “deter similar conduct in the future.” Next, the court calculated the reasonableness of Ryan’s fees by using the lodestar test of multiplying reasonable hours spent by a reasonable hourly rate. Hartford did not dispute the hourly rate (sadly not mentioned in the order) claimed by Ryan’s counsel, William T. Reynolds IV, and instead argued that the total amount should be reduced for (1) lack of success on the merits, (2) work on undecided motions, (3) administrative tasks, and (4) excessive hours. The court declined to reduce fees based on lack of success on the merits, as Ryan’s victory was “essentially complete.” The court also awarded full fees for work on the undecided motions, noting that “counsel’s time is dedicated more to the litigation as a whole, rather than a discrete series of claims, meaning district courts ‘should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended.’” The court further found that counsel did not spend excessive time on certain tasks identified by Hartford. However, the court did exclude fees for clerical tasks and costs related to mediation, which were not recoverable under 28 U.S.C. § 1920. As a result, Ryan’s motion was granted nearly in full, resulting in an award of $151,612.50 in fees and $402 in costs.

Breach of Fiduciary Duty

Fourth Circuit

Nolan v. Sonic Automotive, Inc., No. 3:25-CV-00474-KDB-WCM, 2026 WL 1195596 (W.D.N.C. May 1, 2026) (Judge Kenneth D. Bell). Joseph Nolan III was an employee of Sonic Automotive, Inc. and a participant in one of Sonic’s ERISA-governed 401(k) retirement plans. Nolan alleges that he and other participants suffered financial losses due to the mismanagement of his plan and another plan, the “California plan,” also sponsored by Sonic. He sued Sonic and related defendants, alleging (1) breach of fiduciary duties of prudence and loyalty to the plans (Counts I and II), (2) breach of co-fiduciary duties (Count III), (3) breach of fiduciary duty of prudence by Sonic for failing to monitor the plans’ benefit committee (Count IV), (4) engaging in prohibited transactions in violation of 29 U.S.C. § 1106(a) (Count V), and (5) failing to act in accordance with the governing plan documents in violation of 29 U.S.C. § 1104(a)(1)(D) (Count VI). Specifically, Nolan focused on four funds, contending that the plans selected and retained these “higher cost, lower-performing investment options,” failed to follow the investment policy statement (IPS), did not conduct periodic reviews, and paid unreasonable fees to the plans’ investment advisor. Defendants moved to dismiss for failure to state a claim. Addressing standing first, the court found that Nolan lacked standing to bring claims under the California Plan because he did not participate in it. Nolan contended that he had standing to obtain relief under that plan “because both Plans are ‘sponsored, maintained, and administered by Sonic and share the same fiduciaries,’ and because the alleged injuries are traceable ‘to the same challenged conduct.’” However, this was not good enough because of the “narrow scope of Article III standing,” under which Nolan could not “demonstrate a concrete, real-world injury stemming from the alleged violation.” As for the duty of prudence, the court found that claims related to the initial selection of funds were time-barred under ERISA’s six-year statute of limitations. On the merits, the court concluded that Nolan did not plausibly allege a breach. The court noted that the duty of prudence is “process-oriented, not results-oriented,” and Nolan failed to allege facts suggesting a flawed decision-making process by the fiduciaries. Furthermore, regarding Sonic’s growth fund, the court found that (1) Nolan chose an inappropriate benchmark by using a passively-managed index fund to compare to Sonic’s active fund, (2) Nolan relied too heavily on the fund’s information ratio, which had variable results at any rate, and (3) Sonic was not required to choose a fund with the lowest expense ratio, and the fund had minimal underperformance in any event. Regarding Sonic’s value fund, the court found that the S&P 500 index was not a good comparator and there was insufficient underperformance. For the remaining two funds, Nolan contended that lower cost share classes were available, but the court noted that it was not clear that the Sonic plans were eligible for those classes, and in any event plans are not required to always select the cheapest share class. The court also rejected Nolan’s excessive fees claim because he “attempt[ed] to repurpose the methodology for calculating reasonable attorney’s fees as a framework for evaluating the compensation paid to a financial-services firm.” Moving on to Nolan’s breach of the fiduciary duty of loyalty claim, the court dismissed this claim, stating that it impermissibly “piggybacked” on the prudence claim without independent facts suggesting a disloyal motive or self-interested conduct by defendants. The court also dismissed Nolan’s breach of co-fiduciary duty claim, and his prudence claim against Sonic, because they were derivative of his other already rejected claims. As for the prohibited transactions claim, the court again found that the claims related to the inclusion and retention of funds were time-barred, and the allegations of excessive advisory fees did not constitute a prohibited transaction. Finally, the court dismissed Nolan’s claim for failure to act in accordance with plan documents, ruling it duplicative of the breach of fiduciary duty claim and noting that the IPS was not a binding plan document. As a result, defendants’ motion to dismiss was granted in full.

Fifth Circuit

Eibensteiner v. EssilorLuxottica USA Inc., No. 3:25-CV-2443-X, 2026 WL 1140895 (N.D. Tex. Apr. 27, 2026) (Judge Brantley Starr). This case involves a dispute over the management of EssilorLuxottica USA’s ERISA-governed defined contribution retirement plan. The plan offered various investment options, including a stable value fund known as the Prudential Guaranteed Income Fund, which was backed by Prudential Retirement Insurance and Annuity Company.  Plaintiffs, who are employee participants in the plan, allege that “the Prudential Fund provided significantly lower crediting rates than comparable investments which EssilorLuxottica could have made available to plan participants. Additionally, Plaintiffs allege that Prudential improperly benefited from plan participants being invested in the Prudential Fund because the assets invested in it were held by Prudential, who kept the difference between the amount earned on the investments and the amount paid to Plan members (the ‘spread’).” Plaintiffs sued EssilorLuxottica and its benefits committee alleging that they failed to adequately monitor the Prudential Fund, investigate alternatives, or negotiate better terms, and that Prudential’s compensation structure constituted prohibited transactions under ERISA. Defendants moved to dismiss for failure to state a claim. Addressing the duty of prudence first, the court acknowledged that plaintiffs had offered examples of investments that were allegedly comparable to the Prudential Fund, but ruled that none provided a “meaningful benchmark” for comparison. The court stated that “the allegations regarding the comparators’ characteristics remain largely high-level and are wanting for substantial factual detail concerning their underlying structure, contractual terms, or specific risk exposures.” The court was also unimpressed by allegations regarding Prudential’s risky financial condition, faulting plaintiffs because they “do not allege whether these conditions were atypical within the industry, materially different from those of insurers offering the comparator products, or how those factors would have affected a prudent fiduciary’s decision-making.” Turning to the prohibited transactions claim, the court found that plaintiffs failed to allege that Prudential was a party in interest at the time of the relevant transaction: “The amended complaint does not identify whether Prudential was already providing services to the Plan or its committee at the time the relevant contract was entered. Absent such allegations, Plaintiffs fail to plausibly plead that EssilorLuxottica caused the Plan to engage in a prohibited transaction with a party in interest.” Finally, the court ruled that plaintiffs’ derivative claim for failure to monitor fiduciaries failed because the underlying breach of fiduciary duty claims were not plausibly alleged. The court thus granted defendants’ motion to dismiss, but gave plaintiffs leave to amend.

Disability Benefit Claims

First Circuit

Shortill v. Reliance Standard Life Ins. Co., No. 2:25-CV-00264-JAW, 2026 WL 1179948 (D. Me. Apr. 30, 2026) (Magistrate Judge John C. Nivison). In 2021 Susan Shortill began working at TRISTAR, a third-party insurance administrator, as a claims supervisor, a position classified as sedentary. Pursuant to her employment she was a participant in TRISTAR’s ERISA-governed long-term disability (LTD) plan, which was insured by Reliance Standard Life Insurance Company. In July of 2023, Shortill suffered a traumatic injury at home, resulting in a broken neck, shoulder pain, back pain, bruising, and a concussion. Shortill received short-term disability benefits until late January 2024, returned to work part-time in February and March 2024, and was eventually terminated as part of a layoff on March 15, 2024. At the same time, Shortill applied for LTD benefits with Reliance. Reliance determined that Shortill was disabled through April 19, 2024 due to her injury and recovery, which included surgery, but could have returned to work after that date. Shortill unsuccessfully appealed, and this action followed in which Shortill sought benefits pursuant to ERISA Section 1132(a)(1)(B). The case proceeded to cross-motions for judgment on the administrative record. The assigned magistrate judge used the arbitrary and capricious standard of review because the plan gave Reliance discretionary authority to determine benefit eligibility. Shortill contended that Reliance had a structural conflict of interest, but the court ruled that this did not change the standard of review. “[T]he record reflects that Defendant took steps to insulate the claims determination process from its financial interests by, for example, employing third party peer reviewers and an independent appeal unit,” and “Plaintiff has not cited any evidence to suggest that the structural conflict influenced Defendant’s decision in some way[.]” Thus, “the conflict is entitled to little, if any, weight in the overall analysis.” On the merits, the court found that Reliance considered Shortill’s mental health condition, including her depression, but found no evidence that it precluded her from working as a claims supervisor. The court noted that Shortill did not assert her mental health as a basis for disability in her application. As for Shortill’s physical condition, the court ruled that Reliance’s decision was supported by medical records and expert opinions, noting that Reliance reasonably considered the combined effects of her injuries and focused on the appropriate time periods in making its decision. The court also found that Reliance conducted a reasonable vocational assessment by accounting for the requirements of Shortill’s sedentary occupation as it is normally performed in the national economy. As a result, the magistrate judge concluded that Reliance’s decision was supported by substantial evidence and was not arbitrary and capricious, and thus recommended that Reliance’s motion for judgment should be granted.

Ninth Circuit

Rushing v. Life Ins. Co. of N. Am., No. CV 24-10088-JFW(RAOX), 2026 WL 1162757 (C.D. Cal. Apr. 28, 2026) (Judge John F. Walter). Candace Rushing was employed by Peet’s Coffee & Tea and was a participant in Peet’s ERISA-governed long-term disability benefit plan, which was insured by Life Insurance Company of North America (LINA). Rushing suffered a knee injury in 2010 and became disabled. She submitted a benefit claim to LINA, which approved it. In doing so LINA initially calculated Rushing’s benefit based on her hourly base rate without accounting for commissions. After some discussion, LINA included commissions in its calculations and paid Rushing benefits until 2020, when it terminated her claim for failure to provide proof of loss. On appeal, LINA reinstated her benefits, but again the parties could not agree on how to calculate Rushing’s benefits, disputing how to account for commissions and overtime pay. Rushing exhausted her appeals and then filed this action. She claimed that LINA incorrectly calculated her commission income, failed to include her overtime pay at 1.5 times her regular pay rate, and incorrectly offset her benefits. The case proceeded to Rule 52 briefing; this order represented the court’s findings of fact and conclusions of law. At the outset, the court addressed the standard of review. LINA contended that a document titled “Employee Welfare Benefit Plan: Appointment of Claim Fiduciary” (ACF) gave it discretionary authority, thus entitling it to abuse of discretion review, but Rushing argued that the ACF was not a plan document and thus could not support deferential review. (LINA did not produce the ACF until litigation.) The court noted that “there is a split of authority over whether LINA’s ACF (or virtually indistinguishable ACF) is an enforceable Plan document sufficient to provide LINA with the requisite discretion.” The court sided with LINA, noting that “[a]n ERISA Plan may be made up of multiple documents and ‘there is no requirement that documents claimed to collectively form the employee benefit plan be formally labeled as such.’” The ACF contained the name of the plan and the plan administrator, was signed by the plan and LINA, and stated that it was effective along with the policy. Under these circumstances, “it is difficult to see how it could be anything other than a plan document.” The court thus applied abuse of discretion review, noting that even though LINA had a conflict of interest, it would view LINA’s decision with “a low level of skepticism” because “the record generally reflects that LINA engaged in an ongoing, good faith exchange of information and updated Plaintiff’s benefits following an interactive process triggered by Plaintiff providing new information.” Under this deferential standard of review, the court ruled that LINA did not abuse its discretion in calculating Rushing’s commissions, as the policy did not exclude months with no commissions and did not authorize selectively averaging only higher-earning months. However, the court found that LINA abused its discretion in calculating Rushing’s five hours per week of “overtime” by using her base rate of pay instead of her regular rate of pay. The court stated that if LINA was going to include all 45 hours per week in calculating benefits, it had to use the regular rate of pay for all 45 hours. LINA did not, however, have to use a 1.5 rate for those hours as argued by Rushing. Moving on, the court concluded that LINA did not abuse its discretion when determining Rushing’s date of disability or calculating offsets for her benefits, as these issues were either already resolved or abandoned by Rushing. Finally, the court determined that LINA paid the correct amount of interest on delayed benefits, but owed additional interest due to the miscalculation of “overtime” pay. The court ruled that ten percent was an appropriate interest rate because Rushing “endured enormous hardships,” including “paying interest on credit cards and ruining her credit, selling possessions to pay for basic necessities, relying on food banks, borrowing money from friends and family to buy food and pay her rent, declaring bankruptcy in 2021, and paying extra income tax[.]” The court ordered the parties to agree on the amount of benefits and interest owed, and in the “unlikely event” they could not agree, the court indicated it would remand to LINA for recalculation.

Pleading Issues & Procedure

Seventh Circuit

Greer v. Greer, No. 25-CV-1897-JPS, 2026 WL 1180166 (E.D. Wis. Apr. 30, 2026) (Judge J.P. Stadtmueller). Angela Greer contends that she initiated divorce proceedings against her then-husband, Shawn Greer, in 2022, which resulted in a default judgment of divorce in 2023. The divorce judgment apparently contemplated the issuance of a qualified domestic relations order (QDRO) which “required a division of [Shawn’s] retirement account at Bradley Corporation,” with Angela entitled to 65% of the account, valued at approximately $350,000. Shawn moved to reopen the divorce judgment, but before the state court could adjudicate the couple’s disputes he passed away. Angela alleged that she repeatedly provided the divorce decree to Bradley to prevent it from distributing any funds from Shawn’s retirement account while she obtained a QDRO. However, Bradley allegedly paid the funds out to the couple’s three children anyway. Angela thus filed this action against the children and Bradley, alleging breach of fiduciary duty by Bradley in connection with the plan payout. Bradley removed the case to federal court, asserting that Angela’s claims were governed by ERISA. Angela moved to remand the case back to state court, arguing that her claims did not rely on ERISA and that state and federal courts had concurrent jurisdiction. The court agreed that removal was proper because “Angela’s breach of fiduciary duty claim relies, at least in part, on ERISA, which is enough to bring this case to federal court.” Furthermore, “While Angela stylizes her claim as one for breach of fiduciary duty, it is obvious that she seeks to recover or otherwise enforce her rights under the plan.” As a result, the court construed her action as a claim for benefits under ERISA Section 1132(a)(1)(B), which meant that “state and federal courts share concurrent jurisdiction over this case.” However, even though jurisdiction was proper in federal court, the court granted the motion to remand because the removal was procedurally defective. Bradley “concedes that it did not obtain the written consent of any of the Children prior to removal,” even though at least two of the children had been served with the complaint. The court found that, “[d]ue to Bradley’s lack of reasonable diligence in determining whether the Children had been served, there is no basis to excuse Bradley’s defective notice of removal. As such, remand to the Circuit Court of Milwaukee County is required and the Court need not address the parties’ remaining arguments.” The case will thus proceed in state court.

Retaliation Claims

Seventh Circuit

Thompson v. Ascension Med. Grp. Southeast Wisconsin, Inc., No. 25-CV-1964, 2026 WL 1180165 (E.D. Wis. Apr. 30, 2026) (Magistrate Judge William E. Duffin). Melanie Thompson filed this action against Ascension Medical Group Southeast Wisconsin, Inc., Columbia St. Mary’s Hospital of Milwaukee, Inc., and Columbia St. Mary’s medical director Stephanie Momper, alleging thirteen claims for relief arising from her employment and eventual termination. Among her claims was one for violation of ERISA Section 510. Thompson signed a “Physician Employment Agreement” in 2010 to work part-time as a family medicine physician at Columbia St. Mary’s clinics and hospitals, which were operated by Ascension. The agreement specified a part-time schedule “subject to Clinic’s operational needs,” but Thompson claims that the agreement defined “part-time” as 20 hours per week, and she was assured that she would always be scheduled for 20 hours. However, over the years, Thompson’s scheduled hours varied, and she alleged that her hours were reduced significantly after 2019, leading to her constructive termination in 2024. Defendants filed a motion to dismiss, which the court ruled on in this order. The court denied the motion as to some counts (e.g. breach of contract, bad faith, Age Discrimination in Employment Act), but granted it as to others (e.g. promissory estoppel, reformation of contract, tortious interference with contract). As for Thompson’s ERISA claim, she contended that Ascension violated Section 510 because it “constructively terminated [her] employment contract prematurely in April 2024 (as it remains valid through September 30, 2026) by among others: refusing to schedule her for work a minimum of 20 hours per week, by terminating her malpractice insurance coverage, by terminating her State patient compensation fund contributions, by terminating her retirement benefits, by terminating her continuing medical education benefits and further, by attempting to claw back paid compensation before her employment contract termination date.” Thompson argued that “[t]he reasonable inference of this allegation is that Ascension intentionally refused to provide [her] with any hours from April 22, 2024 through the end of her contract, among others, for the purpose of preventing her from receiving future retirement benefits.” This was insufficient for the court, which stated that “Thompson made no allegation in her complaint that the defendants intended to interfere with her benefits.” Thompson’s termination may have led to the loss of benefits, “[b]ut any consequential loss of benefits does not give rise to a claim under § 510 every time an employee is terminated.” As a result, the court granted Ascension’s motion to dismiss Thompson’s ERISA claim, without prejudice.

Venue

Tenth Circuit

Peter T. v. Oxford Health Ins., Inc., No. 2:24-CV-00189-TC-DAO, 2026 WL 1211766 (D. Utah May 4, 2026) (Judge Tena Campbell). The plaintiffs in this action, Peter T., Maura K., and M.T., are seeking benefits for treatment that occurred at a facility called BlueFire Wilderness Therapy. The defendant is Oxford Health Insurance, Inc., the insurer of their ERISA-governed employee health benefit plan. Plaintiffs live in Connecticut, the employer sponsoring the plan is in Connecticut, Oxford is a New York corporation with its principal place of business in Connecticut, and BlueFire is in Idaho. Plaintiffs filed this action in the District of Utah, so you can guess what happened next: Oxford filed a motion to transfer venue, contending that the case should be transferred to the District of Connecticut pursuant to 28 U.S.C. § 1404(a) (“a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented”). Plaintiffs sensibly did not oppose the motion. The court noted that plaintiffs alleged that “certain appeals related to coverage…‘were written by a company located in Salt Lake City, Utah,’” but the complaint “contains no further details about this allegation and Oxford counters that ‘none of the decisions at issue in this case were issued in Utah.’” As a result, the court was “uncertain whether venue is appropriate in the District of Utah: no parties reside in or may be found in Utah, and it does not appear that the plan was administered (or potentially breached) in Utah.” On the other hand, “Defendant has its principal place of business in Connecticut, where the Plaintiffs also reside, and it appears that the plan was administered in Connecticut. The court therefore finds that the District of Connecticut is an appropriate venue for this action.” The court noted that ordinarily it would run through the Tenth Circuit’s six-factor test for determining whether transfer was appropriate, but it dispensed with the test here: “Because the Plaintiffs did not file an opposition, the court does not address each of these factors in depth. But the court has carefully considered the reasons stated in Oxford’s motion and agrees that these factors taken as whole – and especially the location of potential witnesses – weigh in favor of transfer.” With that, the court granted Oxford’s motion, and the case will proceed in the District of Connecticut.