M&K Employee Solutions, LLC v. Trustees of the IAM Nat’l Pension Fund, No. 23-1209, 608 U.S. __, __ S. Ct. __, 2026 WL 1423319 (U.S. May 21, 2026) (9-0, opinion by Justice Jackson)

This case arises out of the statutory withdrawal liability regime Congress created for multiemployer pension plans when it amended ERISA by enacting the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA).

Before the passage of the MPPAA, a participating employer could simply leave a fund and force the other employers in the fund to shoulder the burden of the employer’s unfunded pension obligations. In a worst-case scenario, this could trigger other employers to leave as well due to the higher contribution rates, creating an irreversible death spiral.

The MPPAA was designed to counteract this, and ensure the long-term solvency of multiemployer plans, by imposing withdrawal liability on departing employers. This liability is essentially an exit fee that requires the employer to pay its proportional share of unfunded vested benefits (UVBs) so that the remaining fund participants are protected.

Of course, the devil is in the details. The relevant statute (29 U.S.C. § 1391) specifies methods funds can use in calculating withdrawal liability, and all contemplate that liability will be calculated based on the fund’s UVBs “as of” the last day of the plan year preceding the employer’s withdrawal.

But what does “as of” mean? Does a fund have to use the actuarial assumptions that were in place on the relevant date in the past? Or can a fund develop actuarial assumptions after that date and apply them retroactively to the date? Courts have differed on this issue, with the Second Circuit in 2020 favoring the first interpretation (in National Ret. Fund v. Metz Culinary Mgmt., Inc., 946 F.3d 146 (2d Cir. 2020)), and the D.C. Circuit in 2024 in this case favoring the second.

The Supreme Court granted certiorari in the D.C. Circuit case and resolved the circuit split in this decision.

The case begins in November of 2017, when the actuarial firm for the IAM National Pension Fund calculated the fund’s assets and liabilities for the 2016 plan year by using a discount rate of 7.5%, which valued the fund’s UVBs at almost $500 million. Two months later, in January of 2018, the firm met with the fund to determine what actuarial assumptions the fund should use for companies withdrawing in 2018. The firm’s calculations after this meeting used a lower 6.5% discount rate, which valued the fund’s UVBs at a markedly higher number – just over $3 billion.

In 2018, several employers, including M&K Employee Solutions, LLC, left the fund. Under the MPPAA, the “as of” measurement date for these companies was December 31, 2017. The fund used the new 2018 discount rate of 6.5% to calculate the employers’ withdrawal liability “as of” that date, which significantly increased their liability as compared to the 2017 actuarial assumptions. (M&K, for example, owed $6.2 million under the new assumptions in contrast to $1.8 million under the old assumptions.)

Four of the employers who left the fund, including M&K, challenged the fund’s assessments in separate arbitrations, arguing that the fund could not use actuarial assumptions adopted after the measurement date to compute UVBs “as of” that measurement date.

The employers found a friendly ear with the arbitrators, who all agreed that the fund had erred by applying actuarial assumptions that were adopted after December 31, 2017. According to the arbitrators, in doing so the fund did not calculate the withdrawal liability “as of” the measurement date. Instead, the fund was required to use the actuarial assumptions that were “in effect” on the measurement date, i.e., the 7.5% discount rate.

However, the fund challenged these decisions in federal court and prevailed. Contrary to the arbitrators, the reviewing district courts concluded that Section 1391 allowed the fund’s actuaries to use assumptions that were adopted after the measurement date. (The judge in the M&K case added insult to injury by awarding $2.7 million in fees and costs to the fund, blasting M&K for failing to comply with discovery obligations and court orders, and “hid[ing] behind a Potemkin corporate structure in a credulity-straining campaign to convince the court that it is judgment-proof.”) The D.C. Circuit Court of Appeals affirmed (as we detailed in our February 14, 2024 edition), and the Supreme Court granted certiorari.

In a unanimous decision authored by Justice Jackson, the Supreme Court affirmed. In doing so, the court examined both Section 1391 (which “lays out the various methods that plans can use to calculate withdrawal liability”) and Section 1393 (which “governs the use of actuarial assumptions for assessing withdrawal liability”).

Addressing Section 1391 first, the court noted that this section “does not mention actuarial assumptions at all.” Furthermore, the court rejected the employers’ argument that the words “as of” in the statute implicitly imposed a deadline for selecting actuarial assumptions.

The court reasoned that “as of” fixes the valuation date for the plan’s financial condition – i.e., the snapshot of the plan’s assets and benefit obligations at that time – but does not dictate when the actuary must choose the predictive tools used to translate that snapshot into a present-value figure. The court stressed that the employers’ interpretation of the statute was “based on a flawed understanding of actuarial assumptions.” The court explained that such assumptions are merely “tools” to calculate UVBs, and “are not observable facts about the plan that are ‘in effect’ on a particular date.” Because assumptions are not “hard data about the plan, they cannot be ‘frozen’ on the measurement date.” Section 1391 thus “has no bearing on when actuaries must select the tools, including assumptions, they use to calculate a plan’s UVBs.”

The employers had no luck with Section 1393 either. While this statute does specifically address what actuarial assumptions may be used to calculate withdrawal liability, it only requires that such assumptions be “reasonable (taking into account the experience of the plan and reasonable expectations),” and “offer the actuary’s best estimate of anticipated experience under the plan.” The court noted that Section 1393 does not require that assumptions be adopted by any particular date, and “[w]e generally do not read limitations into statutes that do not appear in their text.”

The court stressed that this omission was “significant” because in another section of the MPPAA (Section 1399(c)(1)(A)(ii), addressing the amortization period for an employer’s withdrawal liability payments) Congress included an explicit deadline for selecting assumptions. “Congress imposed no similar limit for the actuarial assumptions used to calculate withdrawal liability; we presume this omission is intentional.”

The court also explained why, practically speaking, a rigid pre-measurement-date selection rule could conflict with 1393’s “best estimate” requirement. Assumptions should be “based on the plan’s past performance, changes in the market, and other relevant information,” and thus should “reflect the actuary’s knowledge as of the measurement date.” Preventing actuaries from using up-to-date information would therefore hinder them from providing their “best estimate.” This approach would also result in “mismatch” in which “actuaries must value a plan’s UVBs based on hard data as it stood on the measurement date while at the same time applying assumptions selected based on an older set of facts.”

Having dispensed with statutory interpretation, the court turned to the employers’ two remaining arguments. The first was based on “statutory context.” The employers argued that Section 1394 “prohibits plans from applying any new ‘plan rule or amendment’ to an employer’s withdrawal liability if the rule or amendment is adopted after the employer withdraws,” thereby suggesting an implicit anti-retroactivity principle.

However, the court found that “this section hurts rather than helps petitioners.” The presence of an anti-retroactivity rule in Section 1394 and its absence in Section 1393 “strongly suggests that actuarial assumptions are not subject to any such limitation… Inferring an antiretroactivity rule for the selection of actuarial assumptions would override Congress’s choice.”

Finally, the employers argued that “allowing plans to adopt actuarial assumptions after the measurement date will open the door to manipulation. Plans and their actuaries, petitioners worry, will retroactively select assumptions in order to increase withdrawing employers’ liability.” However, the court reminded the employers that statutory text controls over public policy, and in any event their interpretation “does nothing to address” their concern, because “[p]lans and actuaries could still select assumptions with an eye towards inflating withdrawal liability before the measurement date given the significant discretion they enjoy in selecting assumptions.”

As a result, the employers left the Supreme Court empty-handed in a victory for multiemployer pension funds. Under the court’s ruling, ERISA does not impose a statutory deadline for selecting actuarial assumptions, and any challenges to such assumptions must focus instead on whether they are “reasonable” and represent the actuary’s “best estimate.”

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

Arbitration

Fifth Circuit

Burge v. United Servs. Auto. Ass’n, No. 5:26-CV-00921-MA, 2026 WL 1413561 (W.D. Tex. May 19, 2026) (Judge Micaela Alvarez). This is an employment discrimination and reemployment rights dispute between Matthew Burge on one hand, and United Services Automobile Association (USAA) and its severance plan on the other. Plaintiff Matthew Burge alleges that he was denied promotions, underpaid, misclassified, and ultimately terminated by USAA rather than being properly reemployed following his military service in October 2023. He has asserted two main claims: “(1) violations of Uniformed Services Employment and Reemployment Rights Act of 1994 (‘USERRA’) and Texas military-leave and reemployment statutes through discriminatory adverse actions based on his military service, failure to restore him to his protected reemployment and seniority rights, unlawful discharge within the statutorily protected period, and wrongful denial of military leave benefits; and (2) breach of his employment contract by unilaterally reducing his pay, misclassifying his role, excluding military service from severance, benefits, and compensation calculations, and refusing to pay contingent compensation owed upon his return.” Defendants filed a motion to dismiss and compel arbitration, and Burge opposed, contending that (1) the Dispute Resolution Program Agreement (DRPA) on which defendants relied was “procedurally and substantively unconscionable and undermines the rights and remedies established in USERRA,” and (2) the severance plan could not compel arbitration because it was not a signatory to the DRPA. The court first found that the DRPA was not procedurally unconscionable. Texas law recognizes the enforceability of electronic signatures, and Plaintiff did not provide a substantive explanation of how being out-of-state when executing the DRPA created an authenticity issue. The court also found that the DRPA was not substantively unconscionable, as both the Fifth Circuit and the Texas Supreme Court allow employers to condition employment on acceptance of a binding arbitration agreement. Next, the court rejected Burge’s argument that arbitration under the DRPA would restrict USERRA protections. The Fifth Circuit “has explicitly held that USERRA’s purposes can be fully realized through arbitration,” and the court noted that the DRPA controlled the forum, “not the scope of available relief.” The court also found that the DRPA encompassed Burge’s claims against USAA because the DRPA expressly covered employment-related disputes, including those arising from employment or termination. Finally, Burge contended that the severance plan was an entity governed by ERISA and was not a signatory to the DRPA, and thus his claims against the plan could not be compelled into arbitration. The court agreed that the plan was not a party to the agreement, but still ruled against Burge. The court applied the doctrine of “intertwined claims estoppel,” finding that there was a “clear, close relationship” between USAA and the plan, and “[t]he central question of whether USAA and the Severance Plan deprived Plaintiff of rights and benefits because of his military service is inextricably tied to the employment relationship and the severance promises arising from that relationship.” The court concluded that because the arbitration agreement was mandatory and encompassed all litigable issues, there was “no reason for the Court to retain this case on its docket.” Defendants’ motion was thus granted, and the case was dismissed without prejudice.

Breach of Fiduciary Duty

First Circuit

Kovanda v. Heitman LLC, No. CV 23-12139-NMG, 2026 WL 1441233 (D. Mass. May 21, 2026) (Judge Nathaniel M. Gorton). Karen Ann Kovanda participated in an ERISA-governed retirement savings plan sponsored by her employer, Heitman LLC. In 2002, she designated her parents as primary beneficiaries and her sister, Heidi Hallisey, as the contingent beneficiary of her account. In 2017, the same year Kovanda retired, Heitman transitioned to John Hancock Retirement Plan Services (JHRPS) for recordkeeping, which included electronic maintenance of beneficiary designations. JHRPS informed participants, including Kovanda, that they could update their beneficiary designations online. JHRPS also informed Kovanda that she had not designated a beneficiary through JHRPS, and sent statements to her indicating that she had “no beneficiaries elected.” In 2021, during estate planning, Kovanda apparently believed, due to JHRPS’s communications, that her account did not have a beneficiary and told her attorney that the proceeds would go to her estate. Kovanda also stated that she intended to name three of her siblings as beneficiaries of her accounts: Joe’l LaRose, Kevin Kovanda and Ross Kovanda. The attorney also submitted an affidavit in which she stated that “Kovanda also orally expressed her intent to leave her assets to those three siblings and to exclude her other three siblings (Hallisey, James Kovanda and Brian Kovanda).” Kovanda’s health deteriorated that same year and she died in May of 2021. The day before she died, she executed a will naming plaintiffs Ross Kovanda and LaRose as the co-trustees of the trust and as co-executors of her estate. Ross, Kevin, and LaRose were named as the beneficiaries of the trust. Plaintiffs submitted a written claim for the proceeds of Kovanda’s account, but Heitman rejected it, determining that it was required to distribute the funds in the account to Hallisey according to the 2002 designation. Plaintiffs thus filed this action, claiming that Heitman failed to properly manage the beneficiary designations and misrepresented the status of the account. Heitman filed a motion to dismiss, which the court mostly denied in 2024. (Your ERISA Watch covered this ruling in our August 28, 2024 edition.) Following discovery, Heitman moved for summary judgment. The court evaluated plaintiffs’ claims under ERISA Section 502(a)(3), determining that plaintiffs “must demonstrate that Kovanda reasonably relied on a misrepresentation, i.e. the JHRPS statements, to her detriment.” The court found a genuine dispute of material fact on the issue of causation, which turned on whether Kovanda had read and relied on JHRPS’ statements that she had no designated beneficiary. Plaintiffs presented evidence that Kovanda had read the statements, but Heitman presented evidence suggesting that perhaps Kovanda’s comments regarding having no beneficiary was a reference to a different retirement account (she had three at the time of her death). The parties also presented competing evidence as to whether Kovanda meant to exclude Hallisey from her inheritance. Regarding damages, the court rejected Heitman’s argument that Kovanda’s reliance was not detrimental because Hallisey would have inherited under intestacy law. The court emphasized that the issue was whether Kovanda detrimentally relied on the belief that the account would pass to her estate, excluding Hallisey. The court found evidence suggesting that the distribution to Hallisey was inconsistent with Kovanda’s intent, potentially causing harm to her estate. The court also addressed Heitman’s argument that “maintenance of beneficiary-designation forms and communication of the status of a plan participant’s beneficiary-designation are not fiduciary acts covered by ERISA.” The court flatly rejected this argument, stating, “plan administrators have fiduciary duties not to mislead beneficiaries about plan benefits and not to provide inaccurate information about a plan’s operation. That is apparently what occurred here… Accordingly, Heitman breached its fiduciary duty to convey complete and accurate information about the plan’s operation.” Heitman’s summary judgment motion was thus denied.

Third Circuit

In Re: Cigna ERISA Litig., No. 25-CV-2465-JMY, 2026 WL 1398620 (E.D. Pa. May 19, 2026) (Judge John Milton Younge). The plaintiffs in this case are current and former employees of Cigna and participants in the ERISA-governed Cigna Group 401(k) Plan. They brought this putative class action based on two factual theories: (1) defendants invested plan assets in the Cigna Fixed Income Fund, which underperformed compared to other available investment vehicles; and (2) defendants misused forfeitures by using them to offset employer contributions instead of paying plan administrative expenses. These theories supported seven claims for relief against various Cigna defendants, which included breach of the fiduciary duty of prudence, breach of the fiduciary duty of loyalty, breach of ERISA’s anti-inurement provision, failure to monitor fiduciaries, and prohibited transactions. Defendants responded with (1) a motion to stay the litigation because the Supreme Court has granted certiorari in Anderson v. Intel Corp. Investment Policy Committee, a case from the Ninth Circuit involving similar issues, and (2) a motion to dismiss. Last month the court denied the first motion, and in this order the court tackled the second motion. First, defendants argued that plaintiffs failed to provide meaningful benchmarks to establish that the Cigna Fixed Income Fund underperformed the market. The court noted that the Third Circuit “has not specifically adopted the requirement that a plaintiff must provide examples of meaningful benchmarks in his or her initial pleading as a prerequisite to establishing a claim,” although “it has endorsed the meaningful benchmark standard as a potential method for establishing a circumstantial claim based on the factual theory that a defendant selected an investment vehicle that produced poor returns.” Here, plaintiffs provided examples of stable value funds as comparators, which the court found sufficient to survive a motion to dismiss: “The differences and similarities between the comparator investment vehicles implicates disputed factual issues that the Court is not willing to resolve at this stage in the litigation without the benefit of a more developed factual record which only discovery can provide.” As for plaintiffs’ forfeiture claim, defendants contended that the January 2025 version of the plan “specifically provides them with the discretion to choose whether to spend forfeitures on administrative expenses or to reduce the amount of employer contributions.” The court ruled that this was insufficient, noting that discovery had not yet occurred, and defendants had not produced plan documents from before January 2025. The court declined to adopt “non-precedential authority from jurisdictions outside of Pennsylvania” on this issue and ruled it was premature to dismiss the forfeiture-related claims without a more developed factual record. Finally, defendants argued that plaintiffs were required to exhaust administrative remedies before bringing suit, but the court rejected this argument, stating that the Third Circuit does not require exhaustion for claims based on alleged breaches of fiduciary duty or other ERISA statutory violations. As a result, defendants’ motion was denied, making this one of the few forfeiture cases that has evaded dismissal at the pleading stage.

Tedford v. Equitable Fin. Life Ins. Co., No. 25-CV-2180, 2026 WL 1398640 (D.N.J. May 19, 2026) (Judge Jamel K. Semper). Hollis Tedford was an employee of Equitable Financial Life Insurance Company and participated in the ERISA-governed Equitable 401(k) retirement plan. In this putative class action he contends that Equitable and two of its committees breached their fiduciary duty by selecting and maintaining certain guaranteed investment contracts (GICs) with lower credit ratings, specifically criticizing the choice to invest in the Equitable Fixed Income Fund, which allegedly led to lower rates of return and increased risk. Tedford also alleged that the plan’s recordkeeper, Alight Financial Solutions, received “millions of dollars in indirect compensation from investments within the Plan” in addition to direct fees paid by Equitable. The operative complaint asserted three counts under ERISA: (1) breaches of the fiduciary duty of prudence under 29 U.S.C. § 1104(a), (2) failure to adequately monitor other fiduciaries under 29 U.S.C. § 1104(a), and (3) prohibited transactions under 29 U.S.C. § 1106(a)(1). Defendants filed a motion to dismiss, and were supported by an amicus brief filed by the Stable Value Investment Association. The court stated that “[c]ourts do not determine prudence based on the results of an investment choice, ‘but on process,’” and “[w]hen a plaintiff does not have direct evidence of a defendant’s process in making investment decisions, convincing circumstantial evidence may suffice to establish an inference of imprudent process.” The court ruled that Tedford did allege such evidence in his complaint and his allegations of underperformance alone were insufficient to infer imprudence. The court also found that Tedford failed to provide meaningful benchmarks for comparison, as he did not provide sufficient information about his comparator GICs, instead relying on crediting rates and performance. “The Court agrees with Defendants that a greater analysis of the characteristics of the selected GICs and their specific characteristics and plan goals is necessary for the Court to determine they are ‘sufficiently similar’ for the purpose of being ‘meaningful benchmarks’ supporting an inference of imprudence.” Moving on to the breach of the duty to monitor claim, the court noted that this claim was derivative of Tedford’s duty of prudence claim and thus could not proceed. Finally, the court agreed with defendants that Tedford’s prohibited transactions claim addressing defendants’ arrangement with Alight should be dismissed because, under the Third Circuit’s ruling in Danza v. Fidelity, “a service provider is not a party in interest at the time it first contracts with a plan.” The court ruled that Danza “is on point and is still good law” even after the Supreme Court’s 2025 decision in Cunningham v. Cornell. Furthermore, the court held that “payments pursuant to a valid contract are not prohibited under ERISA.” Thus, defendants’ motion was successful, although the court’s dismissal was without prejudice.

Medical Benefit Claims

Second Circuit

Hamel v. BPAS LLC, No. 25-CV-3634 (NSR), 2026 WL 1399230 (S.D.N.Y. May 19, 2026) (Judge Nelson S. Román). Lisa Hamel is a retired employee of Marist College and was a participant in the Marist College Supplemental Health Coverage Plan. BPAS LLC served as the plan’s claims administrator. During her employment, she was a member of the Communications Workers of America, AFL-CIO. The contract between Marist and the union “provided that eligible retirees ‘may be reimbursed up to $5000 per fiscal year per household for the cost of premiums for the retiree health insurance coverage selected by the retired member that is allowed to be reimbursed under a VEBA.’” Hamel submitted a claim for reimbursement under this provision for premiums paid through a “plus one” policy under her husband’s employer-sponsored health plan. The premiums were deducted pre-tax from her husband’s payroll. BPAS denied Hamel’s claim on the ground that these premiums “could not be reimbursed under a qualified plan pursuant to guidance from the Internal Revenue Service… ‘[i]nsurance premiums deducted from an employee payroll check on a pre-tax basis[ ] are not eligible[.]’” Hamel unsuccessfully appealed and then brought this action, asserting one count under ERISA for payment of benefits under the plan. The parties cross-moved for summary judgment. The court noted that the parties disagreed as to the proper standard of review, but “the Court need not resolve that issue because Plaintiff’s claim fails under either standard. Even applying de novo review…she has not shown that the Plan required reimbursement of premiums paid or deducted on a pre-tax basis through her spouse’s employer-sponsored plan.” Hamel relied on Section 3.3 of the summary plan description, which defined an eligible health-care expense to include “premiums incurred by you or your Spouse or Dependents” for “medical, dental, prescription drug, or vision coverage[.]” However, the court noted that while Section 3.3 defines eligible health-care expenses, “[i]t does not make every medical premium reimbursable regardless of how the premium was paid or whether reimbursement would be consistent with the Plan’s tax-qualified structure.” The court cited other plan provisions, as well as the union contract, which supported the conclusion that the plan’s benefits were tied to Internal Revenue Code § 105(b), and that reimbursement was limited to premiums allowed under a VEBA, which excludes pre-tax premiums. In short, “Plaintiff seeks a tax-free reimbursement from the Marist Plan for premiums already paid through a pre-tax mechanism… That would give Plaintiff the benefit of a second tax exclusion for the same premium expense, and paying out amounts that fail § 105(b) would jeopardize the Plan’s tax-qualified status. BPAS reasonably concluded that the Plan did not permit that result.” The court also addressed Hamel’s procedural objections, noting that while BPAS failed to timely decide her administrative appeal, and its denial letters lacked specificity, both of which supported de novo review, these procedural issues “do not establish Plaintiff’s entitlement to benefits.” Moreover, in the end, “Plaintiff was not denied a meaningful opportunity to challenge the actual basis for the denial[.]” Thus, “the procedural shortcomings do not require reversal where the underlying determination was supported by substantial evidence.” Finally, the court rejected Hamel’s argument regarding the employee contribution portion of the premium, as there was no evidence that this portion was paid with after-tax dollars either. The court thus granted BPAS’ motion for summary judgment and denied Hamel’s.

Pension Benefit Claims

Sixth Circuit

Bailey v. Sheet Metal, Air, Rail & Transportation Ass’n Local Union No. 33 Youngstown Dist. Pension Fund, No. 4:23-CV-0993, 2026 WL 1396541 (N.D. Ohio May 19, 2026) (Judge Benita Y. Pearson). John Bailey is a participant in the Sheet Metal, Air, Rail, and Transportation Association Local Union No. 33 Youngstown District Pension Fund. In 2020 he announced to the Fund that he was retiring, and submitted an application for retirement benefits to the Fund, attesting that he was not working in the sheet metal trade. However, at the time he was still working as a welder at Hickey Metal Fabrication, and admitted as much on his application. The Fund asked Bailey what his duties were at Hickey, and when he responded, the Fund determined that his work constituted “disqualifying employment” under the Fund’s rules and regulations, leading to the suspension of his pension benefits. The Fund also asked that Bailey return $4,533.80 in benefits that it had already paid to him. Bailey appealed the suspension, arguing that his work “did not constitute ‘disqualifying employment’ as it was not related to sheet metal work.” Bailey’s appeal was denied, and this action followed. The parties filed cross-motions for judgment, and in this order the court ruled in favor of the Fund under the deferential arbitrary and capricious standard of review. The court explained that the rules defined “disqualifying employment” in part as “(A) Employment in work of any type covered by the terms of the Collective Bargaining Agreement in effect between the Union and the Employers, or in any type of work normally performed by sheet metal workers,” or “(B) Employment as described in (a) above for an employer in the same or related business as any Contributing Employer[.]” Bailey had described his duties at Hickey as a “welder that welds parts for wrecker and semi wreckers such as: spade tubes, crossmembers, cylinder boxes, cable guides, hinge angles, L-Arms, and wheel grids.” The court ruled that the Fund’s interpretation of the Plan was reasonable because it could rationally conclude that welding is “work normally performed by sheet metal workers” and was therefore disqualifying under the Fund rules. The Fund’s decision was thus upheld, and judgment was issued in its favor.

Plan Status

Sixth Circuit

Shakespeare v. MetLife Legal Plans, Inc., No. 2:25-CV-02250-BCL-ATC, 2026 WL 1416632 (W.D. Tenn. May 20, 2026) (Judge Brian C. Lea). The entertainingly named Tan Yvette Shakespeare was a participant in a prepaid legal services plan offered by her former employer, Prime Therapeutics, LLC, and administered by MetLife Legal Plans, Inc. (MLP). She brought this action asserting violations of 42 U.S.C. § Section 1981, alleging racial discrimination, and challenging the enforceability of a release she executed upon termination of her employment with Prime. Defendants MLP and Prime filed a motion for summary judgment on the non-Section 1981 claims, and a motion to dismiss the Section 1981 claims. The assigned magistrate judge recommended that the motions be granted. Shakespeare objected, contending that the magistrate erred by (1) concluding that the safe harbor exception to ERISA did not apply to the plan, (2) ruling that the release was enforceable, and (3) dismissing her Section 1981 claims “because comparator witnesses exist and discovery was stayed.” First, the court agreed with the magistrate’s “impressionistic approach” that the safe harbor provision did not apply. Shakespeare argued that MetLife, not Prime, drafted the plan, but the court ruled that “[r]egardless of who drafted the document…we have a Summary Plan Description with Prime’s name on it, stating that Prime is the Plan Sponsor and Plan Administrator, and stating that the employee will have ERISA rights – all of which demonstrates endorsement.” Furthermore, Prime was involved in determining employee eligibility, providing input on the plan’s design, distributing enrollment materials, and communicating with MLP about employees enrolled in the plan. As a result, the plan did not qualify for the safe harbor exception and the plan was indeed governed by ERISA. Moving on, the court agreed with the magistrate that the release was enforceable. Shakespeare’s argument that she lacked capacity to contract was waived because it was not presented to the magistrate, and in any event the record did not support such a claim. The court also noted that under Minnesota law, a general release of all claims, known and unknown, is enforceable if the intent is clearly expressed. Finally, the court granted defendants’ motion to dismiss Shakespeare’s Section 1981 claims, agreeing with the magistrate that Shakespeare failed to plead facts showing that white colleagues were treated more favorably. Shakespeare’s argument that she should be entitled to conduct discovery to identify comparators was rejected because she had not met the pleading threshold of alleging a plausible claim. The court thus granted defendants’ motions and dismissed the matter with prejudice.

Pleading Issues & Procedure

Sixth Circuit

Williams v. Unum Life Ins. Co. of Am., No. 1:25-CV-61, 2026 WL 1412607 (E.D. Tenn. May 19, 2026) (Judge Curtis L. Collier). In November of 2025 Randal Williams and Unum Life Insurance Company of America participated in voluntary mediation and reached mutually agreeable terms to settle their dispute. The mediator emailed a term sheet outlining the settlement terms and next steps, which included (1) Unum sending Williams the standard settlement terms and release, (2) Williams reviewing, signing, and returning the release, and (3) Unum sending payment. Williams later emailed Unum payment instructions and filed a notice of settlement with the court indicating that “the matter had settled and the paperwork was being finalized.” However, Williams refused to sign the settlement agreement and even filed a regulatory complaint. Williams’ counsel informed Unum that they were having “difficulty communicating” with Williams, and when they finally reached him he informed them that “he finds the non-disclosure and confidentiality provisions to be too restricting.” Defendant then filed a motion to enforce the settlement and sought attorney’s fees and costs associated with enforcement. Williams responded by arguing that “not all material provisions were agreed upon and there was no acceptance or execution of the settlement agreement.” The court ruled in favor of Unum, finding that a valid, binding settlement agreement was created during the mediation. The court concluded that the parties had agreed on all material terms, and the actions and representations of the parties indicated a meeting of the minds and mutual assent to the settlement. The court noted that Williams’ counsel “had apparent authority to negotiate and execute a settlement, and there was no reason for Defendant to doubt it.” The court emphasized that Williams’ actions, such as filing a notice of settlement and providing payment instructions, objectively manifested an intent to be bound by the settlement agreement. The court acknowledged that there was no written agreement, as contemplated by the mediation term sheet, but “the remaining terms were not material or essential to the greater settlement agreement.” The term sheet “does not contemplate ongoing negotiation; it is in the context of a finalized agreement that merely requires memorialization in writing.” As for attorney’s fees, the court employed the Sixth Circuit’s five-factor test for ERISA benefit cases and determined that Unum was entitled to reasonable attorney’s fees incurred in enforcing the settlement agreement. The court found that Williams acted in bad faith by reversing course after indicating that the case had settled, causing a misunderstanding and substantial delay. The court also noted the deterrent effect of awarding attorney’s fees to “disincentivize future litigants from reneging on settlement agreements.” The court directed Unum “to file with the court a ledger of work performed related exclusively to enforcement of the settlement agreement” to support its fee request.

Seventh Circuit

Board of Trustees of the United Food & Commercial Workers Unions & Employers Pension Plan v. Pension Benefit Guar. Corp., No. 25-CV-1291-BHL, 2026 WL 1430541 (E.D. Wis. May 21, 2026) (Judge Brett H. Ludwig). The plaintiff in this case is the board of trustees for a multiemployer pension plan which is seeking special financial assistance funds under the American Rescue Plan Act of 2021 (ARPA). In 2009 the plan entered “critical status” under 29 U.S.C. § 1085(b), and remained in that status through 2020. In 2018, the plan entered “critical and declining status,” which continued through plan years 2019 and 2020. Due to its financial woes, compounded by COVID-19, the plan applied for $74.4 million in ARPA special financial assistance in 2023. However, the Pension Benefit Guaranty Corporation (PBGC) “advised that the application would be denied because it did not meet one of the Critical Status Entry Tests in plan year 2020.” The parties continued to discuss the matter, and in January of 2025, “after instituting various changes to cause the Plan to meet one of the Critical Status Entry Tests in plan year 2020, the Plan submitted a revised application for $54.3 million in special financial assistance.” Unfortunately for the plan, this did not work either. In May of 2025 the PBGC “denied the Plan’s application, because it determined the Plan was not in critical and declining status in plan year 2020.” This action followed, in which the plan accused the PBGC of violating ERISA (29 U.S.C. § 1432) and the Administrative Procedure Act (5 U.S.C. § 706(2)). Before the court here was a motion by the plan to supplement the administrative record. The plan argued that the record was incomplete and requested the inclusion of “two additional sets of documents: (1) internal documents concerning Defendant’s position that the application was denied because the plan needed to meet one of the four ‘Critical Status Entry Tests’ in the plan year 2020 to qualify for special financial assistance; and (2) a letter and attachments sent from Plaintiff to Defendant after Defendant denied the application.” Regarding the first category, the court ordered the PBGC “to produce any non-privileged decisional documents in its possession explaining why the Plan did not meet Critical Status Entry Tests for plan year 2020.” The court explained that “Defendant does not maintain that no such documents exist but rather unreasonably insists Plaintiff cannot request them unless it can identify a specific responsive document… This would place an impossible burden on Plaintiff. Plaintiff cannot know of the specific internal documents in Defendant’s possession until they are produced. Plaintiff has adequately described the requested materials and has even given Defendant examples of the types of documents it seeks – minutes, notes, memoranda, and e-mails. Defendant’s admission that communication existed, coupled with its failure to produce any documents supporting its position, are sufficient to overcome the presumption that the administrative record is complete.” The court noted that the PBGC’s production could exclude privileged materials. As for the second category, the court denied the plan’s request to include the letter and attachments sent after the application was denied. The court emphasized that “[t]he administrative record must include materials ‘that were before the agency at the time the decision was made.’… There is no dispute that the letter at issue here was not in Defendant’s possession when the challenged decision was made. The letter came after that decision. That it was sent before this litigation started does not make it a proper part of the administrative record.” As a result, the plan’s motion was only partially successful. The court ordered the parties to meet and confer to propose a schedule for the supplementation of the record and for merits briefing.

Ninth Circuit

McGeathy v. Reinalt-Thomas Corp., No. CV-25-01439-PHX-DLR, 2026 WL 1429257 (D. Ariz. May 21, 2026) (Judge Douglas L. Rayes). This is a putative class action against The Reinalt-Thomas Corporation (the company behind Discount Tire) and its board of directors, alleging that they breached their fiduciary duties in managing the company’s ERISA-governed profit-sharing retirement plan. In particular, plaintiffs attacked the American Century Target Fund Suite, which they allege is “one of the worst-performing investment suites in the entire market.” Defendants filed a motion to dismiss, and as we chronicled in our March 11, 2026 edition, the district court denied it, ruling that plaintiffs provided meaningful comparators in their complaint and had plausibly alleged significant and sustained underperformance of the specified funds. Defendants responded by filing a motion to stay the proceedings. The rationale for their motion was that the Supreme Court has granted certiorari in Anderson v. Intel Corp. Investment Policy Committee, a case from the Ninth Circuit involving similar issues. As mentioned above, and examined in our April 15, 2026 edition, this strategy did not work in the In Re: Cigna ERISA Litigation matter currently pending before Judge Younge in the Eastern District of Pennsylvania, who refused to grant a stay in that case. However, defendants had more luck here with Judge Rayes. In evaluating the motion, the court weighed the Ninth Circuit’s three discretionary stay factors: “(1) the possible damage caused by a stay, (2) the hardship to the parties if the suit is allowed to go forward, and (3) the orderly course of justice measured in terms of the simplifying or complicating of issues from a stay.” The court found that all three factors weighed in favor of a stay. First, the court found no appreciable harm to plaintiffs. The court acknowledged that one of the plaintiffs was a current participant in the plan and claimed ongoing harm, but the court noted that any harm was monetary and “monetary recovery cannot serve as the foundation to deny a stay.” The court also considered the duration of the stay, presumably less than a year, to be reasonable. Second, the court agreed with plaintiffs that “being required to defend a suit does not constitute a hardship.” However, because plaintiffs did not establish that they would be damaged by the stay, the court stated that it “may consider Defendants’ litigation burden,” which it accepted would include “extensive and expensive discovery that will be borne disproportionately by Defendants.” Finally, the court determined that a stay “will simplify the issues in this case.” Plaintiffs contended that “if the Supreme Court affirms it is irrelevant to this case because the Court has already decided that Plaintiffs pled a meaningful benchmark and if the Supreme Court reverses it is irrelevant because then Plaintiffs need not have pled a meaningful benchmark.” However, the court was “not as confident. The requirement for a meaningful benchmark, and what constitutes a meaningful benchmark, was central to the dispute regarding Defendants’ motion to dismiss and the Court’s order. Anderson may clarify not only if a plaintiff must plead a meaningful benchmark but more importantly the requirements for a benchmark to be meaningful. Such an outcome could affect Plaintiffs’ complaint and the course of discovery.” As a result, the court granted defendants’ motion, stayed the case, and instructed the parties to notify the court within seven days of the Supreme Court’s decision in Anderson.

Tenth Circuit

Kirsten W. v. California Physicians’ Service d/b/a Blue Shield of Cal., No. 25-4029, __ F. App’x __, 2026 WL 1433128 (10th Cir. May 21, 2026) (Before Circuit Judges Bacharach, Ebel, and Federico). Kirsten W. filed this action on behalf of herself and her minor son, C.W., after their ERISA-governed self-funded health benefits plan, sponsored by Trinet Group, Inc., denied claims for medical expenses related to C.W.’s treatment at two behavioral health facilities. Blue Shield of California, the plan’s claim administrator, determined that C.W.’s treatment at these residential facilities was not medically necessary, asserting that he could have been treated in an outpatient setting. Kirsten thus filed this action against Blue Shield and Trinet, alleging that they violated ERISA and the Mental Health Parity & Addiction Equity Act of 2008 (the Parity Act). Kirsten claimed that Blue Shield’s decision was arbitrary and capricious under ERISA, and that the criteria used to deny benefits for mental health care were more restrictive than those for comparable medical or surgical care, violating the Parity Act. The parties filed cross-motions for summary judgment on which Kirsten partially prevailed. The court denied Kirsten summary judgment on the Parity Act claim, and as to Trinet on both claims, but agreed that Blue Shield’s benefit denials were arbitrary and capricious and found that remand was the appropriate remedy. Kirsten appealed this ruling to the Tenth Circuit, which flagged the appeal for “a possible jurisdictional defect.” The appellate court requested briefing on the issue and then issued this order. The court stressed that although it “applies a ‘case-by-case approach’ to determining the finality of ERISA remand orders…they ‘will not be considered final where there are still issues to be resolved on remand and the parties’ legal arguments can be considered in a future appeal after these issues are resolved.’” The court further noted that “a judgment that fails to ‘specify a sum certain’ for damages is generally non-final, no less so in the ERISA context.” Under these rules, “the district court’s decision here was not final for the purposes of appellate jurisdiction.” The district court’s order contemplated further action in the form of a remand, did not include “a sum certain,” and furthermore, the district court noted that “[a]ny liability attributable to Trinet could only arise in the future” if Blue Shield either arbitrarily and capriciously denied benefits or defendants refused to pay after an approval. The court acknowledged that Kirsten had alleged error in the district court’s ruling, but claims of error “cannot alone confer jurisdiction.” Furthermore, “that claimed error will not be rendered unreviewable, as Kirsten asserts, by requiring her to await final judgment to appeal.” The court also rejected Kirsten’s argument based on “practical finality,” emphasizing, “We have simultaneously and repeatedly observed…that this doctrine has limited force in the ERISA context, should be narrowly construed, and has rarely (if ever) been successfully applied to an ERISA remand order in this circuit.” Finally, the court reminded the parties that “the district court retains jurisdiction over the case during the remand process,” and thus “[a]fter the remand process is completed, Kirsten may by motion seek judicial review in the district court in the first instance. Then, once the district court disposes of any post-remand motion(s) filed by the parties in a manner that leaves no room for further proceedings, a party may appeal to this court.” With that, the Tenth Circuit dismissed the appeal for lack of jurisdiction.

Provider Claims

Third Circuit

Prime Healthcare Servs. – St. Michael’s, LLC v. Cigna Health & Life Ins. Co., No. CV 23-01791 (JXN)(JRA), 2026 WL 1398670 (D.N.J. May 19, 2026) (Judge Julien Xavier Neals). Prime Healthcare Services – St. Michael’s LLC (d/b/a St. Michael’s Medical Center) brought this action against Cigna Health and Life Insurance Company and related defendants, alleging that Cigna underpaid or refused to pay for emergency and post-stabilization services provided to certain patients between 2017 and 2021. Prime originally filed this case in New Jersey state court, alleging claims for fraudulent inducement, breach of the implied covenant of good faith and fair dealing, quantum meruit, and violations of the New Jersey Health Claims Authorization, Processing and Payment Act (HCAPPA). Cigna removed the case to federal court on ERISA preemption grounds, and Prime responded by filing a motion to remand. The assigned magistrate judge issued a report and recommendation (R&R) recommending that the court grant Prime’s motion, but deny Prime’s request for attorneys’ fees and costs. Cigna objected to the R&R, and this order from the district court judge was the result. Discussing preemption first, the court agreed with the magistrate that Cigna failed to demonstrate that Prime’s claims were colorable under ERISA § 502(a). Applying the Third Circuit’s two-prong Pascack Valley test, the court found, and the parties agreed, that under prong one Prime “is the ‘type of party’ that can bring a Section 502(a) claim” because the patients assigned their benefits to Prime. However, under the second prong, the court found that “Prime’s claims concern Cigna’s alleged underpayment and/or failure to pay on time, rather than Prime’s right to payment under an ERISA plan, which is consistent with Third Circuit and District Court rulings that Section 502(a) ‘does not preempt a dispute over the amount of payment to the provider.’” Cigna argued that the right to payment/rate of payment dichotomy was irrelevant in this case because Prime was not a network provider, but the court disagreed, ruling that Prime’s out-of-network status was irrelevant. The court then examined Prime’s state law claims and ruled that because they did “not challenge ‘the type, scope or provision of benefits under’ an ERISA healthcare plan, its disputes over the amount of reimbursement are not preempted by ERISA.” As for Prime’s request for attorney’s fees and costs, the court agreed with the magistrate that Cigna’s removal, although ultimately unsuccessful, did not rise to the level of bad faith conduct. The court emphasized that fees are only appropriate when the removing party lacks an objectively reasonable basis for removal, which was not the case here. As a result, the magistrate’s R&R was upheld in full, and the case was remanded back to state court.

Retaliation Claims

Sixth Circuit

Evans-Gray v. Koch Foods, No. 1:26-CV-52, 2026 WL 1452412 (E.D. Tenn. May 22, 2026) (Judge Travis R. McDonough). Barbara A. Evans-Gray alleges in this pro se action that her employer, Koch Foods, unlawfully discriminated and retaliated against her. The complaint asserts claims under various statutes, including the Civil Rights Act, the Americans with Disabilities Act (ADA), the Affordable Care Act, and ERISA. Specifically, under ERISA, Evans-Gray alleges that she was retaliated against, was not provided plan documents, and was given improper COBRA notification. Because Evans-Gray moved to proceed in forma pauperis, her complaint was referred to a magistrate judge for an initial screening. The magistrate found the complaint insufficient and allowed Evans-Gray to amend. On a second screening the magistrate found that Evans-Gray “failed to allege any facts that suggested she was discriminated against due to her race or gender,” “did not allege facts that suggested Defendant retaliated against her due to a disability,” and “insufficiently alleged a failure-to-accommodate claim because she did not allege that she requested a reasonable accommodation.” On Evans-Gray’s ERISA claims, the magistrate found that she (1) failed to state a claim for statutory penalties “because she did ‘not allege that Defendant is the plan administrator’ and because her requests for information were not sufficiently clear to ‘give notice to Defendant to provide specific documents’”; (2) “insufficiently alleged a claim that ‘Defendant retaliated against her in violation of ERISA after she contacted the [Department of Labor]’ because she failed to allege that Defendant ‘was even aware of Plaintiff’s contact with the DOL or the fact that the DOL sent Plaintiff benefits information’”; and (3) “insufficiently alleged her remaining ERISA claims because she did not allege that she experienced a ‘qualifying event’ that would have required Defendant to provide her with COBRA information.” Evans-Gray objected to the magistrate judge’s report and recommendation, and in this order the assigned district judge largely overruled her objections. The court accepted and adopted the recommendation to dismiss Evans-Gray’s ERISA and ADA claims with prejudice. The court found that Evans-Gray failed to allege facts suggesting discrimination based on race or gender, retaliation due to a disability, or a failure-to-accommodate under the ADA. Furthermore, Evans-Gray did not allege that defendant was the plan administrator under ERISA, nor did she provide clear requests for information. Additionally, she did not allege a qualifying event that would require COBRA information. Despite these findings, the court granted Evans-Gray a final opportunity to amend her complaint. The court noted that her new factual allegations, although not properly presented, “suggest she may be able to state a claim for racial discrimination.” The court found that “the interests of justice dictate that Plaintiff be provided with one more opportunity” given her “pro se status.”