
There is something for everyone in this edition of Your ERISA Watch, as the federal courts touched on seemingly every facet of ERISA in the past week.
There are decisions on the merits in cases seeking medical benefits (K.A. v. United Healthcare Ins. Co. and K.K. v. Premera Blue Cross), disability benefits (Smith v. Cox Enterprs.), and severance benefits (Hoff v. Amended & Restated Anadarko Petroleum Corp.).
There are cases regarding the sufficiency of breach of fiduciary duty allegations (Cure v. Factory Mut. Ins. Co. and Hoye v. CHA Gen. Servs., both out of the District of Massachusetts with similar results), and a case explicitly finding a breach of fiduciary duty (or, more accurately, theft, to the tune of $5.7 million in Snow Shoe Refractories LLC v. Jumper).
We also had a slew of procedural orders, including rulings on contractual limitation periods (Semper v. Massachusetts Gen. Brigham), the release of claims by severance agreement (Miller v. Campbell Soup Co. Ret. & Pension Plan Admin Comm.), attorney’s fees (Campbell v. United Healthcare Ins. Co.), who is a proper defendant under COBRA (Forbush v. NTI-CA Inc.), and a class certification ruling (Harmon v. Shell Oil Co.).
We even had cases involving the hot topics of when claims can be compelled into arbitration (Best v. James) and when a plan administrator’s use of forfeitures violates its fiduciary duties (Hutchins v. HP Inc.).
And of course, what edition of Your ERISA Watch would be complete without a good old preemption discussion (Rooney v. Leerink). We hope you find something educational or entertaining below. We’ll be back next week!
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Arbitration
Sixth Circuit
Best v. James, No. 3:20-cv-299-RGJ, 2025 WL 373451 (W.D. Ky. Feb. 3, 2025) (Judge Rebecca Grady Jennings). On behalf of a proposed class, plaintiffs Nathan Best, Matthew Chmielewski, and Jay Hicks initiated this ERISA action against defendants ISCO Industries, Inc., James Kirchdorfer, and Mark Kirchdorfer alleging claims of fiduciary breach and engaging in a prohibited transaction in connection with ISCO’s Employee Stock Ownership Plan (“ESOP”). Defendants responded to the complaint by moving to dismiss it and to compel individual arbitration. The court granted this motion on September 20, 2022, finding that plaintiffs signed valid individual arbitration agreements and ordered their claims to arbitration. In the years since the court’s decision, arbitration has become a big topic in the ERISA world. Relevant here, in 2024, the Sixth Circuit weighed in on the issue with Parker v. Tenneco, Inc., 114 F.4th 786. Plaintiffs moved for reconsideration of the court’s dismissal and arbitration decision in light of Parker. “Plaintiffs argue that the Sixth Circuit has issued binding precedent making ‘plain that the claims brought on behalf of an ERISA plan – like those here – cannot be forced into individual arbitration.’” The court agreed that Parker represents a change in controlling law which required it to reconsider its previous order. It held that under Parker, “the individual arbitration agreements in both the employment agreement and ESOP are unenforceable because if they were enforceable, they would bar effective vindication of statutory rights.” Accordingly, the court granted plaintiffs’ motion to reconsider and vacated its prior order granting dismissal and ordering arbitration of the claims. Briefly, the court also addressed defendants’ prior motion to dismiss for failure to state a claim, which it had not done previously in light of its arbitration decision. It concluded that plaintiffs’ complaint plausibly alleges both a prohibited transaction and fiduciary breaches, meeting all of the elements set forth for each claim. The court was thus confident that plaintiffs’ claims meet Rule 12(b)(6)’s plausibility standard and denied defendants’ motion to dismiss.
Attorneys’ Fees
Ninth Circuit
Campbell v. United Healthcare Ins. Co., No. 2:23-cv-08823-RGK-E, 2025 WL 409038 (C.D. Cal. Jan. 28, 2025) (Judge R. Gary Klausner). This is an ERISA healthcare case brought by plaintiff Leah Campbell against United Healthcare Insurance Company and Insperity Holdings, Inc. After the case proceeded to a court trial on the briefs, Ms. Campbell succeeded in part on her claim for failure to pay benefits, although her failure to provide plan documents claim was ultimately unsuccessful. The court accordingly remanded the claim back to defendants, who then reevaluated it and paid a much higher rate than the original payment. Both parties then moved for attorneys’ fees. On October 25, 2024, the court denied both motions. In that decision the court found that Ms. Campbell was entitled to fees but that she failed to provide reliable and legible billing records. “Specifically, the description of each time entry was redacted in its entirety, making it impossible to determine what tasks were completed, and numerous entries contained basic arithmetic errors. Accordingly, the Court ordered Plaintiff to file a renewed motion setting forth the number of hours expended and addressing these deficiencies.” Ms. Campbell filed a renewed motion for attorneys’ fees on November 8, 2024. Once again the court denied the renewed motion without prejudice, because although she removed many of the redactions and corrected the arithmetic errors, she appeared to have altered the descriptions of certain time entries without the court’s permission, which cast “doubt upon the accuracy and reliability of the billing records.” Ms. Campbell moved for reconsideration of that order. The court denied her motion for reconsideration here. The court did not seriously entertain Ms. Campbell’s arguments that reconsideration was warranted by a material difference in fact or law because she “‘did not understand that the Court would only accept the original timesheets in support of the motion, and there was no way from looking at the Court’s order to understand such a limitation and so ‘in the exercise of reasonable diligence could not have known’ that it was not complying with the Court’s order’ by submitting altered billing records.” Nor was it moved by her second argument that reconsideration was warranted due to the absence of any special circumstances warranting a denial of her fee motion which she contends represents a manifest showing of failure to consider material facts presented to the court. The court reminded Ms. Campbell of the well-established principle “that a party must provide reliable records to obtain attorneys’ fees, and failure to do so warrants outright denial.” Based on the foregoing, the court denied Ms. Campbell’s motion for reconsideration.
Breach of Fiduciary Duty
First Circuit
Cure v. Factory Mut. Ins. Co., No. 1:23-cv-12399-JEK, 2025 WL 360622 (D. Mass. Jan. 31, 2025) (Judge Julia E. Kobick). Two former employees of the insurance company Factory Mutual Insurance Company bring this action on behalf of a putative class of participants and beneficiaries of the FM Global 401(k) Savings Plan under ERISA alleging its fiduciaries have violated their duties of prudence and monitoring by improperly allowing the plan to pay excessive recordkeeping and administrative fees and imprudently selecting and retaining unperforming investments. Defendants moved to dismiss plaintiffs’ complaint. The court first addressed the fee claims. “The plaintiffs adequately state an imprudence claim against the Retirement Committee for excessive recordkeeping and administrative fees. According to the complaint, the Retirement Committee ‘could have obtained the materially same total [recordkeeping and administrative] services for less’ had it properly solicited bids from competing service providers or effectively leveraged its ‘massive size’ to negotiate lower fees. As a result, between 2017 and 2022, Plan participants allegedly paid an average annual recordkeeping and administrative fee of $120, while comparator plan participants paid approximately $46 each. This amounts to more than a 139% premium per Plan participant since October 17, 2017. These allegations are, as this Court has repeatedly held, sufficient to state a plausible claim.” The court rejected defendants’ argument that plaintiffs inaccurately calculated the plan’s fees, stating that questions over whether plaintiffs’ calculations are sound can only be addressed after discovery. Moreover, the court declined to adopt out-of-circuit principles regarding a requirement to allege meaningful benchmarks, agreeing instead with plaintiffs that it is inappropriate to do so at the pleading stage. Accordingly, the court denied the motion to dismiss with regard to the fee claims. It was more of a mixed picture when it came to the allegations of underperforming investments. Splitting plaintiffs’ allegations in two, the court separately addressed their fiduciary breach claims relating to the American Funds Europacific Growth Fund R6 and the suite of Fidelity Freeform target date funds. The court could not conclude that the inclusion and retention of the former was plausibly imprudent, but it found the allegations of imprudence around the latter plausible. The material difference to the court was plaintiffs’ failure to include any evidence of the American Funds Europacific Growth Fund’s underperformance during the class period or to provide any information that the Committee would have been aware of over this time to indicate imprudence “from the outset, without the benefit of hindsight.” In contrast, the complaint was full of these details with regard to the Fidelity Freeform Funds, and the court was therefore confident that plaintiffs adequately alleged that the offering and retention of this suite of funds was imprudent. As a result, the court granted the motion to dismiss with regard to the imprudence and failure to monitor claims relating to the American Funds Europacific Growth Fund but otherwise denied the motion to dismiss.
Hoye v. CHA Gen. Servs., No. 23-13238-MJJ, 2025 WL 405081 (D. Mass. Feb. 5, 2025) (Judge Myong Jin Joun). Plaintiffs Susan J. Hoye and Leonardo Jimenez are former employees of Cambridge Health. In this putative fiduciary breach fee case plaintiffs allege that the fiduciaries of the Cambridge Health Alliance Partnership 403(b) Plan violated their duties under ERISA by mismanaging the plan. As a result of this alleged mismanagement plaintiffs contend that the participants of the plan paid exorbitant direct and indirect recordkeeping, administrative, revenue sharing, and investment fund fees which resulted in significant reductions in their retirement accounts. They bring their suit pursuant to ERISA Sections 409 and 502. Defendants moved to dismiss the complaint, challenging both plaintiffs’ standing and the sufficiency of their claims. Defendants’ motion to dismiss was denied by the court in this decision. To begin, the court disagreed with defendants’ argument that plaintiffs lacked standing because they did not invest in the challenged funds. The court quoted from another decision from the District of Massachusetts and agreed with its principle “that for the purpose of constitutional standing, a plaintiff need not have invested in each fund at issue but must merely plead an injury implicating defendants’ fund management practices.” It added, “the crux of the standing analysis is not whether the plaintiff invested in certain challenged funds, but whether the plan – in which the plaintiff has invested – suffered an injury implicating the defendant’s conduct in managing all the funds as a group.” Moreover, the allegations were not isolated to the challenged funds but take issue with fiduciary mismanagement more broadly. Accordingly, the court was confident that plaintiffs established constitutional standing to challenge the plan’s investments. The decision then assessed the recordkeeping fee claims. Once again, the court was unmoved by defendants’ reasons for dismissal. They argued that plaintiffs could not show that comparable plans received similar services that lower costs, and that the comparators they offered were not meaningful benchmarks. The court held that these were questions of fact which cannot be resolved at this stage, particularly as inferences must be drawn in favor of the nonmoving party. “I have no basis at this stage to doubt the plausibility of these allegations,” the court said. When it read the complaint as a whole, in the light most favorable to the plaintiffs, the court found that the plaintiffs had plausibly alleged that defendants breached their fiduciary duty of prudence relative to the plan’s recordkeeping fees. Finally, because the court declined to dismiss the underlying fiduciary breach claims, it likewise denied the motion to dismiss the derivative failure to monitor claim.
Third Circuit
Snow Shoe Refractories LLC v. Jumper, No. 4:16-CV-02116, 2025 WL 409665 (M.D. Pa. Feb. 5, 2025) (Judge Matthew W. Brann). Three separate cases developed after defendant John Jumper committed securities fraud by misappropriating approximately $5.7 million from an ERISA-governed employee pension plan. The first was a criminal action brought by the U.S. Attorney for the Middle District of Pennsylvania alleging counts of wire fraud, embezzlement, theft from an employee benefit pension plan, and false statement/concealment of facts in an employee benefit plan records and reports. The second was a Securities and Exchange Commission (“SEC”) lawsuit brought in the Western District of Tennessee alleging the same fraudulent activities. And the third is the present action brought by the administrator of the pension plan, plaintiff Snow Shoe Refractories LLC, alleging a claim for prohibited transaction under ERISA Section 1106(a)(1)(D), as well as state law causes of action for conversion and unjust enrichment. Snow Shoe Refractories moved for summary judgment on all three of its claims against Mr. Jumper. Mr. Jumper did not file a brief in opposition. As an initial matter, the court took judicial notice of the judgments entered against Mr. Jumper in both his criminal case and the SEC lawsuit against him. In the criminal action Mr. Jumper pled guilty to wire fraud. In the SEC case a final judgment was issued against him enjoining him from violating various subsections of the Securities Exchange Act of 1934 and holding him liable for disgorgement of $5.7 million, plus prejudgment interest in the amount of $726,758.79, representing the profits he gained as a result of the fraudulent conduct alleged. Given the outcomes of the two other actions, the court granted plaintiff’s motion for judgment against Mr. Jumper. The court began with the ERISA cause of action brought under Section 1106(a), which the court called a breach of fiduciary duty claim, rather than a prohibited transaction claim. The court concluded that Mr. Jumper acted as a de facto fiduciary by pretending to be one through fraudulent instruments and by exercising discretionary authority and control over the plan assets and directing the investments. “Having established that Jumper was a fiduciary notwithstanding that his transactions were solely accomplished through forgery and fraud, the remaining elements of the breach of fiduciary duty claim are simple to resolve. Jumper caused the [plan] to engage in several transactions using plan assets…These investments were for the benefit of Jumper, himself a party in interest due to his fiduciary status, because they transferred money to companies he held ownership interest in or owned outright…And as Jumper’s guilty plea demonstrates, he knew that he was using plan assets for his own benefit.” The court further observed that these “investments” were not discharged for the exclusive purpose of providing benefits to the participants and beneficiaries of the plan. The court accordingly entered summary judgment in favor of the plan on its ERISA claim against Mr. Jumper. It did so for the plan’s two state law claims as well, concluding that the undisputed facts satisfy the elements of each claim. Finally, the court deferred ruling on the issues of damages and attorneys’ fees until it has further briefing on each.
Ninth Circuit
Hutchins v. HP Inc., No. 5:23-cv-05875-BLF, 2025 WL 404594 (N.D. Cal. Feb. 5, 2025) (Judge Beth Labson Freeman). In this action plaintiff Paul Hutchins alleges that the technology company HP, Inc. has breached its fiduciary duties under ERISA and engaged in self-dealing when it decided to use forfeited employer contributions to reduce its ongoing employer contributions rather than to pay administrative costs. The court has already dismissed this action. (A summary of its June 17, 2024 order granting HP’s motion to dismiss without prejudice can be found in Your ERISA Watch’s June 26, 2024 edition.) Mr. Hutchins amended his complaint, and HP moved for dismissal again. The court granted the motion to dismiss the amended complaint, and this time did so without leave to amend. “Plaintiff’s theory,” the court wrote, “is that, in broadly stating that forfeitures could be used ‘to reduce employer contributions, to restore benefits previously forfeited, to pay Plan expenses, or for any other permitted use,’…HP effectively intended to create an additional benefit: that in any year in which there were forfeitures, those forfeitures would first be used to reduce administrative expenses for individual Plan participants.” In the court’s view the plan doesn’t require this “categorial increase in benefits provided under the Plan,” and ERISA doesn’t either. To the court, the basic problem with plaintiff’s amended complaint “is that the facts as alleged do not invite a plausible inference of wrongdoing on HP’s part.” Furthermore, the court agreed with HP that “Plaintiff’s arguments ignore ‘decades of settled law’ allowing defined contribution plans to use forfeitures exactly as HP did.” The court also noted the proposed rule from the Treasury Department blessing this use of forfeitures. While this proposed regulation is not in effect, the court stated that it “helps to illustrate the difficulty with Plaintiff’s theory: Plaintiff effectively asserts that the general fiduciary provision of ERISA abrogates these long-settled rules regarding the use of forfeitures in defined contribution plans.” Accordingly, the court concluded that it could not plausibly infer the alleged wrongdoing at the center of this litigation and therefore granted the motion to dismiss, with prejudice.
Class Actions
Fifth Circuit
Harmon v. Shell Oil Co., No. 3:20-cv-21, 2025 WL 366296 (S.D. Tex. Feb. 3, 2025) (Judge Jeffrey Vincent Brown). This class action involves allegations of fiduciary breaches and prohibited transactions brought by the participants of the Shell Oil Company’s 401(k) plan. The court assigned all pre-trial matters in the case to Magistrate Judge Andrew M. Edison. Judge Edison recommended the court certify plaintiffs’ proposed class of all participants and beneficiaries of the Shell Provident Fund 401(k) Plan, and that it deny both parties’ motions for summary judgment and instead resolve all disputes in a bench trial. Defendants opposed the Magistrate’s report and recommendation that the court grant plaintiffs’ motion to certify the class, as well as his recommendation that the court deny their motion for summary judgment. Plaintiffs meanwhile objected to Judge Edison’s summary judgment recommendation as to their cross-motion for partial summary judgment. The court reviewed the parties’ objections to the identified portions of the Magistrate’s report de novo and ultimately concluded that it agreed with the positions of the Magistrate. Accordingly, the court adopted the Magistrate’s report and recommendations as the opinions of the court. Therefore, the court formally certified the class, appointed the class representatives and class counsel, and denied each party’s motion for summary judgment.
Disability Benefit Claims
Fourth Circuit
Smith v. Cox Enters., No. 22-2173, __ F. 4th __, 2025 WL 379876 (4th Cir. Feb. 4, 2025) (Before Circuit Judges Wynn and Rushing, and District Judge Lewis). On September 30, 2022, the district court issued a written opinion granting summary judgment to the Cox Enterprises, Inc. Welfare Benefits Plan in this ERISA disability benefit action brought by plaintiff-appellant Jeremy Smith. In that decision the court held that the plan did not abuse its discretion because it provided Mr. Smith a full and fair review and its decision to terminate the benefits he had been receiving for the past seven years due to lower back radiculopathy was supported by substantial evidence within the administrative record. Mr. Smith appealed this unfavorable decision, and in this order the Fourth Circuit reversed and remanded. The court of appeals agreed with Mr. Smith that the plan violated ERISA’s requirement that plan administrators set forth their basis for disagreeing with a disability determination regarding the claimant made by the Social Security Administration. The Fourth Circuit found that the plan failed to discuss a doctor’s consultative evaluation report, which was part of Mr. Smith’s review for Social Security Disability Insurance. By turning a blind eye to this report and the views of the doctor, the appeals court held that Aetna did not include a sufficient “explanation of the basis for disagreeing…with [the] disability determination…made by the Social Security Administration.” The Fourth Circuit went on to note that it is not an outlier circuit in holding that failure to address evidence of a Social Security award of disability benefits can be an abuse of discretion, and cited cases from the Fifth, Sixth, Seventh, and Ninth Circuits stating the same. Not only did the Fourth Circuit find that the failure to discuss the doctor’s report was a violation of an applicable regulation, but it further stated that the administrator’s failure to address the consultative evaluation, which formed a critical basis for the Social Security Administration’s disability award decision, meant that Mr. Smith was denied a full and fair review and “Aetna did not engage in a deliberate, principled reasoning process.” The court of appeals therefore concluded that Aetna abused its discretion. However, referring to its own precedent that remand is the “most appropriate remedy ‘where the plan itself commits the [plan administrator] to consider relevant information which [it] failed to consider,” the Fourth Circuit determined that the proper remedy is to remand this case to the district court with instructions to remand the matter to Aetna. The remainder of Mr. Smith’s arguments were considered essentially moot by the Fourth Circuit in light of its decision to remand the matter to Aetna, and it declined to address any of them in great detail. The court of appeals also left the matter of attorneys’ fees and costs up to the district court.
ERISA Preemption
First Circuit
Rooney v. Leerink Partners, LLC, No. 1:24-CV-11165-AK, 2025 WL 417785 (D. Mass. Feb. 6, 2025) (Judge Angel Kelley). Plaintiff Mairin Rooney, an investment banker, brought suit against her former employer Leerink Partners and various individuals at Leerink, whom she claims induced her to leave her employment at Goldman Sachs and join Leerink by promising certain deferred compensation and minimum guaranteed bonuses. In addition to asserting a claim under ERISA for the deferred compensation, she asserted numerous state law claims – including for breach of contract, quantum meruit, fraud in the inducement and implied covenant of good faith and fair dealing – and a claim asserting violations of the Massachusetts Wage Act. Defendants moved to dismiss, claiming as relevant here that ERISA preempted all the state law claims and that the ERISA claim for benefits failed on plausibility grounds. In this decision, the court granted the motion in part and denied it in part. The court first addressed the deferred compensation, which Ms. Rooney claimed was an employee benefit plan subject to ERISA. The court agreed that “[i]t is a plan maintained by the employer that ‘results in a deferral of income by employees for periods extending to the termination of covered employment or beyond’” because the “primary purpose of the special deferred grant award is to provide deferred compensation by replacing a similar forfeited award from Rooney’s previous employer.” Moreover, the court reasoned that “to the extent that the state law claims” reference “the special deferred grant award [and] would require interpretation of the ERISA-governed deferred compensation plan,” they are preempted. The court then addressed the deferred guaranteed bonus claims, agreeing with Ms. Rooney that these claims were not subject to ERISA and were therefore not preempted under an exemption in 29 C.F.R. § 2510.3-2(c) for payments under a bonus plan that are not “systematically deferred” to the post-employment period. The court found it “evident” that the bonus payments at issue were only deferred for a “relatively short period of time” while Ms. Rooney was still “an active, full-time employee” and were intended to “incentivize retention and performance, not provide retirement income.” Furthermore, the court found that defendants’ argument that the bonus plan was an ERISA-covered top-hat plan was better suited for determination after discovery. Thus, the court concluded that “on the facts alleged and giving every favorable inference to the Plaintiff, Rooney plausibly states a claim that the minimum guaranteed bonuses fall under the bonus exemption and are thus not subject to ERISA preemption.” With respect to Count III – Plaintiff’s ERISA claim that Defendants improperly failed to pay her claim for deferred compensation – the court rejected defendants’ arguments that this claim should be dismissed based on Ms. Rooney’s failure to exhaust. Because Ms. Rooney plausibly alleged that she was not given notice of her appeal rights, the court concluded that she made a colorable claim that she was excused from exhaustion requirements on this basis. Moreover, the court also concluded that because Ms. Rooney plausibly alleged that two of the individual defendants shared the decision-making authority with the Committee defendant, she “alleged sufficient facts to withstand the individual Defendants’ motion to dismiss” regarding the ERISA benefit claim.
Medical Benefit Claims
Seventh Circuit
K.A. v. United Healthcare Ins. Co., No. 23 C 15739, 2025 WL 358954 (N.D. Ill. Jan. 31, 2025) (Judge Elaine E. Bucklo). Plaintiff K.A. brought this medical benefits suit on behalf of his minor child seeking reimbursement for a residential mental healthcare stay from the date defendant United Healthcare Insurance Company terminated benefits on October 11, 2021 through the date when the child departed the facility on August 4, 2022. Plaintiff argued that United’s claims handling denied him a full and fair review and that its denial was arbitrary and capricious. In this decision ruling on the parties’ cross-motions for summary judgment, the court agreed with plaintiff. The court emphasized that none of United’s communications, not its initial denial letters nor any of its letters during the internal appeals process, “cite to any portion of L.A.’s medical records.” Many of the child’s treating doctors supplied letters of support stating their view that L.A. could only get well through continued residential care given L.A.’s increasing depression and suicidal ideation despite regular outpatient therapy and medication, including intensive outpatient treatment. United did not grapple with the argument that lower levels of care were inadequate given the child’s risk of harm and history of significant mental health struggles. In fact, United argued that it should not consider L.A.’s medical history and instead should focus on L.A.’s acute condition starting on the date when it denied additional coverage. The court was unconvinced that medical history was irrelevant to the case. The court agreed with K.A. that United failed to substantially satisfy ERISA’s procedural requirement that he be afforded a full and fair review of the benefit denials. Despite L.A.’s medical providers stating their unequivocal views that L.A. continued to require residential treatment, United’s letters did not mention them, let alone “substantively respond to the concerns they raise.” Thus, the court found that United arbitrarily refused to credit reliable evidence that K.A. submitted on appeal. Moreover, the court highlighted the vague and general language United used in its letters, which it said “does not suffice to show that United considered the letters K.A. submitted.” To the court, this lack of engagement rendered United’s decision arbitrary and capricious, particularly as even United’s internal notes suggest that its reviewers did not seriously consider the evidence the family provided, which only underscored “United’s complete disregard of those competing views.” Therefore, the court held that United violated ERISA and granted summary judgment in favor of K.A. and against United. But the decision didn’t stop there. It then went on to award the family full benefits. It did so because this is a case “where benefits had initially been approved and later terminated under ‘defective procedures,” and the court said that precedent requires remedying those defective procedures through a reinstatement of benefits and restoring the status quo, which was the continuation of benefits.
Ninth Circuit
Forbush v. NTI-CA Inc., No. 22-cv-00141-H-RBB, 2025 WL 405696 (S.D. Cal. Feb. 5, 2025) (Judge Marilyn L. Huff). Plaintiff Michael J. Forbush worked as a full-time employee of NTI Ground Trans for one year from January 2020 to January 2021, at which time he was furloughed. At the time of the furlough, his supervisor promised that the company would continue to provide him with health insurance coverage under the group health plan. Mr. Forbush would come to learn otherwise after he suffered a heart attack in June, which required emergency surgery. Mr. Forbush was billed hundreds of thousands of dollars for the medical services he received. Then, on July 30, 2021, Mr. Forbush received a notice from NTI’s HR manager providing him a Consolidated Omnibus Budget Reconciliation Act (“COBRA”) notice. He never received a notification of his COBRA rights prior to this. On October 22, 2021, the claim administrator for the health plan formally denied the claim for medical bills related to the heart attack and surgery, stating that the coverage was being denied on the grounds that Mr. Forbush was not an eligible plan member at the time. After the plan affirmed its denial, Mr. Forbush filed this action against his former employer and former supervisor alleging claims for failure to provide notification of COBRA rights, failure to provide notification of California COBRA rights, breach of contract, negligence, negligent misrepresentation, intentional misrepresentation, and declaratory relief. Defendants have not appeared in this litigation. As a result, Mr. Forbush moved for default judgment against them. His motion was granted in part and denied in part in this decision. Confident of its jurisdiction and that Mr. Forbush provided proof of proper service to defendants, the court evaluated the ERISA COBRA claim first. Taking a look at the exhibits Mr. Forbush attached to his motion for default judgment the court identified a fundamental problem with his COBRA notice claim: neither defendant was the administrator of the health plan. “Because Anthem and EDIS – not NTI and Kindt – were the administrators of NTI’s health care plan, Plaintiff’s claims against Defendants NTI and Kindt for failure to provide him with notification of his COBRA rights in violation of 29 U.S.C. § 1166 is defective as a matter of law.” The court accordingly denied Mr. Forbush’s motion for default judgment on the COBRA claim, the dependent Cal-COBRA claim, and the request for declaratory relief based on the allegations that defendants failed to timely provide him with notice of his rights under COBRA and Cal-COBRA. The court also concluded that the complaint failed to sufficiently allege facts showing breach of oral contract and intentional misrepresentation. However, the court granted Mr. Forbush’s motion for default judgment against his employer with regard to his claims for negligence and negligent misrepresentation. The same was not true for these claims as alleged against the supervisor. In fact, the court denied plaintiff’s motion for default judgment altogether as to defendant Kindt. As for defendant NTI, the court entered default judgment against it on the claims for negligence and negligent misrepresentation and awarded Mr. Forbush compensatory damages matching his out-of-pocket medical expenses, $649.53 in costs, prejudgment interest of 7% per annum, and post-judgment interest according to the statutory rate in 28 U.S.C. § 1961(a).
K.K. v. Premera Blue Cross, No. 23-35480, __ F. App’x __, 2025 WL 415721 (9th Cir. Feb. 6, 2025) (Before Circuit Judges Thomas, Owens, and Collins). A plan participant, K.K., and her daughter I.B., sought medical benefits under the Columbia Banking System, Inc. Benefits Plan, covering I.B.’s stay and treatment in an inpatient psychiatric residential treatment center. Defendant Premera Blue Cross denied the treatment as not medically necessary, the district court agreed, and the Ninth Circuit affirmed in this short, unpublished decision. The appellate court first addressed the standard of review with regard to the benefit denial and concluded that the district court properly reviewed the denial under an abuse of discretion standard because both the plan and the administrative services contract between Premera and Columbia expressly conferred discretion on Columbia and delegated it to Premera. Moreover, because the plan “states that Premera has ‘adopted guidelines and medical policies that outline clinical criteria used to make medical necessity determinations…Premera’s use of the InterQual criteria to determine the medical necessity of I.B.’s treatment was not unreasonable.” Based on records from another residential facility that had treated I.B. shortly before she entered Eva Carlson Academy, the treatment facility at issue in this case – including treatment notes that stated that she had no suicidal ideation since starting treatment at the previous facility and that her depression had improved dramatically – the court held that Premera did not abuse its discretion in concluding “that I.B. did not meet the InterQual criteria for residential treatment at the time she was admitted to Eva Carlson Academy.” The court rejected plaintiffs’ two contrary arguments. First, with regard to plaintiffs’ contention that “Premera failed to specifically address letters of medical necessity from I.B.’s treating providers,” the court of appeals noted that plan administrators are not required to accord special weight to the opinions of treating physicians and, in any event, “the treating providers wrote their letters of medical necessity one year after I.B.’s admission to Eva Carlson Academy and did not base them on firsthand evaluations of I.B. around the time of her admission.” Similarly, with regard to plaintiffs’ argument that Premera failed to engage in a “meaningful dialogue” with plaintiffs regarding their claim, the court viewed any such failure as a procedural irregularity and stated that “even if we assume arguendo that such a procedural irregularity occurred, it does not change the outcome of this appeal” because this failure was not “wholesale and flagrant,” and thus did not amount to an abuse of discretion.
Eleventh Circuit
Marrow v. E.R. Carpenter Co., No. 8:23-cv-02959-KKM-LSG, 2025 WL 385570 (M.D. Fla. Feb. 4, 2025) (Judge Kathryn Kimball Mizelle). On behalf of a putative class, plaintiff Saroya Marrow sued her former employer, E.R. Carpenter Company, alleging that it violated ERISA as amended by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) by failing to provide sufficient notice of continuing healthcare coverage. Carpenter moved to dismiss Ms. Marrow’s complaint, arguing that she lacks standing and fails to state a claim upon which relief may be granted. The court did not agree and in this decision denied Carpenter’s motion to dismiss. It began by addressing standing. The court agreed with Ms. Marrow that she suffered an injury-in-fact fairly traceable to the allegedly deficient COBRA notice. Specifically, the court accepted as true Ms. Marrow’s allegation that because of the insufficient notice she elected not to continue her health insurance coverage, lost insurance, and incurred medical expenses. “This alleged pocketbook injury qualifies as an injury-in-fact.” The court then determined that the complaint states a claim for relief because it plausibly alleges that the COBRA notice sent by defendant (1) omitted the specific date by which Ms. Marrow had to elect coverage; (2) told her that the sixty-day election period ran from the date of her termination rather than the date of the election notice; (3) contained contradictory statements regarding the due date of the first payment, one of which violated federal law by requiring first payment with the election form; and (4) may not have been written in a manner calculated to be understood by the average plan participant, Ms. Marrow included. The court accepted these allegations, which were supported by the attached COBRA notice, and therefore denied Carpenter’s motion to dismiss.
Pension Benefit Claims
Third Circuit
Miller v. Campbell Soup Co. Ret. & Pension Plan Admin Comm., No. 24-1812, __ F. App’x __, 2025 WL 416090 (3d Cir. Feb. 6, 2025) (Before Circuit Judges Krause, Phipps, and Roth). Plaintiff-appellant Sherry Miller worked for the Campbell Soup Company for almost 30 years, but there was a break in her service. Before the break in 2001, Ms. Miller accrued pension benefits under a traditional pension formula. But after the break, she accrued them under a cash balance formula. In 2015, Ms. Miller retired. At the time she signed a waiver releasing claims against appellee Campbell Soup Company Retirement & Pension Plan Administrative Committee in exchange for 101 weeks of severance pay and medical coverage. Ms. Miller claims she was misinformed about her pension benefits and alleged that she was entitled to over 28 years of benefits under the pension formula instead of only 15 years. Ms. Miller sued the Committee, alleging claims for benefits, misrepresentation, and estoppel. The benefit claim was dismissed at the pleading stage. The parties then filed cross-motions for summary judgment. In the end the district court determined that Ms. Miller’s remaining claims were barred by the release she signed when she retired. Accordingly, it entered judgment in favor of the Committee. Ms. Miller appealed. In this unpublished per curiam order the Third Circuit affirmed. Ms. Miller argued that her claims were not covered by the release because the release did not cover claims arising after it was signed and, she argued, her claim did not accrue until she discovered the misrepresentations in 2017. The court of appeals disagreed. Relying on past precedent holding “that a claim for a breach of fiduciary duty based on misrepresentation was completed and accrued on the date the employee relied on the misrepresentations to her detriment,” the court concluded that the claim the Committee misrepresented her benefits did not arise two years after the release was signed but instead “when Miller signed the release and retired allegedly in reliance on the expected benefits.” The release also expressly mentions that claims of misrepresentation and equitable estoppel are covered by the agreement. To the Third Circuit there was no real question that Ms. Miller’s release was knowing and voluntary based on “the totality of the circumstances.” This was especially true because the release informed Ms. Miller that she would be releasing “any and all claims that you have or may have,” indicating the release relates to claims “that the parties had but may discover later.” For these reasons, the Third Circuit declined to disturb the lower court’s holdings and as such affirmed its judgment.
Severance Benefit Claims
Tenth Circuit
Hoff v. Amended & Restated Anadarko Petroleum Corp., No. 23-1361, __ F. App’x __, 2025 WL 400517 (10th Cir. Feb. 4, 2025) (Before Circuit Judges Tymkovich, McHugh, and Rossman). An ERISA-governed change in control severance plan appealed a district court decision finding in favor of the plaintiff on his claim for benefits to the Tenth Circuit. In this unpublished decision the court of appeals affirmed the award of benefits. Arriving at its decision, the district court made two findings which were challenged on appeal here. First, it concluded that de novo review applied to the administrator’s interpretation of the “Good Reason” clause because the plan only provided for arbitrary and capricious review of any interpretation of ambiguous or unclear terms and neither party argued that the Good Reason clause was ambiguous or unclear. Second, the district court found that plaintiff David Hoff’s job duties had been “materially” and “adversely” diminished after the acquisition as they were starkly reduced from what they were prior to the change in control. By way of example, the court compared the projects he was assigned to pre- and post-acquisition. Before the acquisition, Mr. Hoff’s project had a budget of $450 million, he managed a team of over 300 people, and his position required minimum engineering and project management experience of 10 years. Immediately after the acquisition, Mr. Hoff was assigned to a project with a budget of $600,000, managing a team of less than two dozen people, in a position that required only a year or two of project managing experience. Based on these findings, the district court concluded that the plan wrongfully withheld severance benefits to Mr. Hoff. The Tenth Circuit agreed in this decision. The Tenth Circuit stated that the default standard of review in ERISA cases is de novo “unless the parties have agreed to an arbitrary and capricious standard of review for certain issues.” Here, the court of appeals determined that the plan only provided the company the discretion to interpret or construe “ambiguous, unclear or implied (but omitted) terms,” and that the “Good Reason” clause at issue here was none of those things. Thus, the Tenth Circuit affirmed the lower court’s application of de novo review. Then, applying the plain meanings of the words “material” and “adverse,” material meaning “significant; essential,” and adverse meaning “having an opposing or contrary interest, concern, or position,” the Tenth Circuit affirmed the lower court’s view that the diminishment in Mr. Hoff’s job duties following the acquisition was “significant’ and ‘opposed to’ his interests as a Project Manager of a large company.” The court of appeals therefore upheld the conclusions of the district court, inclding its award of benefits and grant of judgment to Mr. Hoff.
Statute of Limitations
First Circuit
Semper v. Massachusetts Gen. Brigham, No. 1:24-cv-11405-JEK, 2025 WL 360624 (D. Mass. Jan. 31, 2025) (Judge Julia E. Kobick). Pro se plaintiff Christiana Semper alleges that her former employer Massachusetts General Brigham, Inc. and its senior manager on the retirement claims and appeal committee violated ERISA by improperly decreasing its employer contributions to her under the Mass General Brigham and Member Organizations cash balance plan, and by failing to adequately inform her of that change. Defendants moved to dismiss Ms. Semper’s complaint. They argued that her claims are time-barred and that she failed to state a plausible claim. In particular, defendants argued that Ms. Semper’s action was untimely as it was brought after the plan’s two-year contractual limitation period had already expired. Based on the facts alleged in Ms. Semper’s complaint, the court agreed with defendants that her claims are contractually time-barred and therefore granted the motion to dismiss. The court noted that the First Circuit had previously concluded that a two-year contractual limitation period like the one here is reasonable. Thus, the court held that the “contractual limitations period and claim accrual provisions in the Plan are…enforceable.” To the court, it appeared from the complaint that Ms. Semper’s claims accrued on January 1, 2022, i.e., the date on which she alleges she first began to receive the lower employer contributions to her plan. Thus, the court interpreted this as the first date on which she knew or should have known the principal facts on which her claims are based. As a result, the end of the contractual limitation period was January 1, 2024. Because Ms. Semper did not file this lawsuit until May 28, 2024, the court agreed with defendants that her action was filed more than five months after the limitations period expired. Based on these facts, the court determined that both Ms. Semper’s claims for recovery of plan benefits and violation of ERISA’s notice provision under Section 1054(h) seem to be time-barred under the contract. Defendants’ motion to dismiss was accordingly granted by the court. However, the court was not certain with its analysis because Ms. Semper asserted additional facts at the motion hearing which the court agreed may alter the accrual date for her claims, such that they may indeed be timely. “At the motion hearing and in opposition to the motion to dismiss, Semper further contended that the accrual date for her ERISA claims should be January 1, 2023 rather than January 1, 2022. That is so, she argued, because employer contributions to the Plan are deposited for the prior year each January, so she could not have known, or had reason to know, of the change in employer contributions from 15% to 9% of her annual salary until January 2023. Thus, she contends that, under Section 17.12 of the Plan, her claims accrued in January 2023, making the limitations period run until January 2025, and rendering her claims timely.” The court therefore granted Ms. Semper leave to file an amended complaint to try to address this issue and argue that her action is not in fact time-barred.