As expected, we were inundated with cases as the federal courts finished cleaning up their dockets before the September 30 Civil Justice Reform Act deadline. As a result, this week’s edition is especially meaty, with more than 30 cases addressing the full spectrum of ERISA issues.

This week’s big news was not any of those cases, however. Instead, it was yesterday’s Supreme Court oral argument in Anderson v. Intel Corp. Investment Policy Committee. As you may recall, this is a case in which participants in two of Intel’s ERISA-governed retirement plans contend, among other things, that the plan fiduciaries breached their duty of prudence by investing plan assets in poorly performing and costly hedge funds and private equity funds.

The issue before the court is whether, in pleading such claims, plaintiffs are required to allege a “meaningful benchmark” for comparison in order to support allegations of underperformance. Circuit courts have divided on this question. For example, in Anderson, the Ninth Circuit imposed such a requirement, while the Sixth Circuit (in Johnson v. Parker-Hannifin) has declined to do so.

Anderson’s counsel went first, arguing that courts should take a “holistic” approach to whether a plaintiff has stated a prudence claim, and should not carve up allegations and apply discrete tests such as a “meaningful benchmark” requirement.

He got broad pushback across the bench. Some justices suggested that where prudence is based on underperformance, some type of comparison must be conducted. Others wondered whether this particular case even depended on the application of a “meaningful benchmark” test, because Anderson’s argument was not based solely on underperformance – he had also argued that Intel made imprudent decisions and used a deficient process.

The justices also debated whether the true question was not about whether there should be a “meaningful benchmark” test, but how to apply that test. Much of the discussion was about how to compare “apples to apples,” with amusing exchanges like this: “JUSTICE THOMAS: So do you agree that you can’t compare apples and oranges? MR. WESSLER: Yes, but I think the question is, what is an apple and what is an orange?”

Intel’s counsel, and the solicitor general’s office, which supported Intel, received a much more friendly reception. The justices’ questions were mostly focused on the question of “if you win, what should we say?” The justices seemed concerned with whether they should simply affirm by saying that a “meaningful benchmark” test is appropriate, or whether they should go further and detail the contours of such a test. Intel’s counsel largely demurred. He noted that a bare affirmance would at least “bring the Sixth Circuit in line,” but that if the court wanted to do more, the Ninth Circuit’s approach was satisfactory.

Some type of clarification is probably likely, as Chief Justice Roberts stated that any “meaningful ruling” in the case would have to do “meaningful work” in order to give “some substance” to a test. Justice Kagan appeared to agree, suggesting that guidance was probably necessary because some courts applying the “meaningful benchmark” test had gone too far, for example, by requiring the exact same asset allocations when comparing funds.

In the end, it was a good day for plan administrators, but of course we will have to wait to see what the court decides, and how far it wants to go in that decision. Stay tuned!

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

Arbitration

Fourth Circuit

Anthem Health Plans of Virginia v. AGS Health, No. 7:25-cv-00804, 2026 WL 2942234 (W.D. Va. Sept. 30, 2026) (Judge Robert S. Ballou). Recently here at Your ERISA Watch we have covered several cases rejecting attempts by healthcare providers to enforce awards issued in their favor against insurers pursuant to independent dispute resolution (IDR) proceedings under the No Surprises Act (NSA). (Indeed, just two weeks ago in our September 23, 2026 edition a Second Circuit decision on this issue was our case of the week.) In this case the tables have turned, and it is the insurer who is trying to obtain relief under the NSA. The plaintiffs are Anthem Health Plans of Virginia and Healthkeepers, and the defendants are two Schumacher Group entities, five affiliated emergency medicine provider groups, and AGS Health, their billing manager. Under the NSA, an out-of-network provider dissatisfied with an insurance payment may initiate negotiations and then IDR, in which a certified IDR entity (IDRE) makes a binding determination. That determination is not subject to judicial review except as provided by 9 U.S.C. § 10(a) of the Federal Arbitration Act (FAA). Plaintiffs alleged that defendants “submitted thousands of disputes that were plainly ineligible for the IDR process,” falsely attested to eligibility, flooded the process with negotiations and IDR initiations, and demanded inflated amounts. They claimed that “since 2024, nearly 60 percent of Defendants’ disputes that reached a determination were ineligible and Defendants have improperly secured millions of dollars in IDR awards[.]” The complaint pleaded ten counts, including under RICO and ERISA, and sought in the alternative vacatur of the IDR awards. Defendants moved to dismiss. The court first held that it lacked subject matter jurisdiction over every claim other than vacatur, including the RICO and ERISA claims. All of them rested on the same theory, i.e., that defendants obtained awards they should not have received, and so sought to invalidate or collaterally attack IDRE determinations. Because the NSA incorporates the FAA as the exclusive avenue for judicial review, a party “may not circumvent” those limits by repackaging an attack on an award as a RICO or ERISA claim. Plaintiffs argued that the NSA’s “no judicial review” provision “applies only to individual IDRE payment determinations and not to the fraudulent scheme alleged in this case,” contending that the NSA “addresses only payment determinations, not eligibility determinations.” The court disagreed for three reasons. First, whether an item or service is “qualified” is an eligibility question that an IDRE must answer before it can make a payment determination, so eligibility is part of the unreviewable determination. Second, plaintiffs’ reading would permit eligibility to be litigated in federal court after every IDR proceeding, “creating the very flood of lawsuits Congress intended to prevent.” Third, even if only payment determinations were shielded, the plaintiffs expressly sought “[r]elief from all improperly-obtained NSA IDR awards,” so a challenge to eligibility was necessarily a challenge to the resulting payment determination. On the remaining vacatur count, the court held that plaintiffs failed to state a claim under the FAA. The court assumed without deciding that fraud was plausibly alleged, although it noted that plaintiffs pleaded that over 40 percent of the disputes reaching a payment determination were eligible, and offered no facts suggesting bad faith as to the rest. However, plaintiffs’ alleged fraud was both discoverable and was discovered by plaintiffs, and thus they did not satisfy § 10(a)(1), which requires that “the fraud or corruption was…not discoverable upon the exercise of due diligence prior to the arbitration.” Plaintiffs had in fact objected as to the specific claims identified in the complaint, so they could not “credibly claim that the alleged fraud was not discoverable.” Vacatur under § 10(a)(4) (where an arbitrator “exceeds his powers”) also did not work. The court explained that IDREs are expressly authorized to determine eligibility under the NSA, so “an IDRE does not exceed its powers by performing a task that the regulations require and the statute presupposes.” The court thus granted defendants’ motions to dismiss, and because amendment would be futile, did so with prejudice.

Attorneys’ Fees

Third Circuit

Allied Painting & Decorating, Inc. v. International Painters & Allied Trades Industry Pension Fund, No. 21-13310 (RK) (TJB), 2026 WL 2983319 (D.N.J. Oct. 5, 2026) (Judge Robert Kirsch). Allied Painting & Decorating, Inc. contributed to the International Painters and Allied Trades Industry Pension Fund, a nationwide multiemployer plan, from 2001 to 2005. Allied withdrew during the 2005 plan year and incurred $427,195 in withdrawal liability, but the Fund did not send a demand letter until approximately twelve years later, in 2017. Allied objected that the Fund’s demand was barred by laches and by the requirement of 29 U.S.C. § 1399(b)(1) that a plan issue an assessment “[a]s soon as practicable.” At the time, many courts treated that requirement as coextensive with laches. The arbitrator found that the Fund had not acted “as soon as practicable” but ruled for it anyway because Allied had not shown prejudice from the delay. The district court granted Allied’s motion to vacate the award, and while the Fund’s appeal was pending, Allied moved for attorney’s fees, requesting $343,197 in fees and $8,862.49 in costs. In July of 2024, the Third Circuit affirmed, holding that § 1399(b)’s requirement “is not the same as a laches defense,” has no prejudice element, and therefore barred the Fund’s claim because no one had challenged the delay finding. (Your ERISA Watch reported on this decision in our July 17, 2024 edition.) On remand, Allied’s fee motion was reopened and the assigned magistrate judge issued a report and recommendation, recommending that the motion be denied. (We reported on this decision in our May 6, 2026 edition.) Allied objected, and in this order the court reviewed the report de novo. Allied first objected that the magistrate judge should have applied the five-factor test of Ursic v. Bethlehem Mines, which courts use for fee awards under the general fee provision of § 1132(g)(2), instead of Dorn’s Transportation, Inc. v. Teamsters Pension Trust Fund of Philadelphia & Vicinity. Allied argued that every circuit but the Third applies the same standard to both provisions. The court called the objection “self-defeating,” noting that Allied “curiously” did not dispute that Dorn’s sets the governing standard in this circuit, and that Allied’s real argument was that Dorn’s was wrong. Under Dorn’s, which governs fee awards to prevailing employers under § 1451(e), a court may award fees only if the plan’s assessment was “frivolous, unreasonable or without foundation.” Applying that rule, the magistrate’s report had found that the Fund could not have anticipated the Third Circuit’s “significant shift in the law,” because it was only that decision that made clear that “prejudice and, indeed the laches defense, have no place in the withdrawal liability calculus.” Allied’s objections did not challenge that finding, and the court independently agreed. Allied’s only alternative argument, developed in a one-paragraph reply brief without citation, was that the twelve-year delay was “patently prejudic[ial]” and the Fund’s claim “frivolous on its face.” The court said that this argument was arguably waived, but considered it anyway. It held that a finding of unreasonable delay does not make the assessment itself unreasonable, because § 1399(b) “sets no rigid timeframe” and, as the Third Circuit said in Allied, reflects “a deliberate legislative choice to afford some flexibility.” The court held in the alternative that under Ursic “the outcome here would not change,” and that Allied had forfeited any Ursic argument by failing to show “how the Ursic factors would support an award of fees in this case.” Under those factors, the Fund did not act in bad faith, and its position was no less meritorious than Allied’s merely because the law ultimately shifted. The court also saw “no beneficial deterrent effect in punishing a litigant for their failure to anticipate a significant shift in the law,” and held that the first three factors weighed strongly against fees regardless of the other two. Thus, the court adopted the magistrate judge’s report and recommendation and denied Allied’s motion for attorney’s fees.

Fifth Circuit

Krongold v. American Air Liquide Holdings, Inc., No. 4:23-cv-1971, 2026 WL 2925190 (S.D. Tex. Sept. 29, 2026) (Judge Keith P. Ellison). Martin Krongold sued American Air Liquide Holdings, Inc. under ERISA, alleging in Claim I that his projected pension benefit was improperly calculated because it omitted his car allowance, and in Claim II, under § 1132(a)(3), that Air Liquide miscalculated his benefits by refusing to consider his service with a former employer. The court granted Krongold summary judgment on Claim I in October 2024. A bench trial was held on Claim II, but even though the court found that Air Liquide made material misrepresentations, Krongold could not establish the remaining estoppel elements, and thus the court entered final judgment for Krongold on Claim I and for Air Liquide on Claim II. Krongold then sought $238,431.50 in fees, along with costs, prejudgment interest, and additional relief. The assigned magistrate judge recommended a reduced award of $33,105.24 (as we discussed in our August 12, 2026 edition), and Krongold objected. In this order the district court agreed with the magistrate that Krongold’s success was limited to Claim I, and that while his two claims were “interrelated” in arising from the same plan, the “burden of Plaintiff’s unsuccessful claim meaningfully outweighs his successful one.” It therefore upheld the magistrate judge’s lodestar calculation, limited to Claim I work before October 17, 2024. The court did sustain one objection, holding that because Krongold was awarded some fees, he was entitled to a partial award for time spent on the fee motion itself. However, the court rejected his request for additional costs, reasoning that § 1132(g)(1) is not a “blanket power to tax costs” and that costs like travel, postage, and courier fees fall outside 28 U.S.C. § 1920. It also denied prejudgment interest, since the unpaid benefits were never distributed and thus no use of funds required compensation. Furthermore, awarding interest as a response to Air Liquide’s misconduct “would turn the award into an improper penalty.” Finally, the court denied Krongold’s request for (1) a retroactive calculation, (2) “gross-ups” related to tax liability and Medicare premiums, and (3) statutory penalties, because none of these remedies had been awarded in the final judgment and thus could not be obtained on a fee motion.

Breach of Fiduciary Duty

Second Circuit

Bilodeau v. Verizon Communications, Inc., No. 25-cv-7057 (AS), 2026 WL 2936585 (S.D.N.Y. Sept. 30, 2026) (Judge Arun Subramanian). David Bilodeau and Elizabeth Dudley, participants in the Verizon Savings Plan for Management Employees, a defined contribution plan, challenged the plan’s use of forfeitures of unvested employer matching contributions. Section 4.04 of the plan provided that forfeitures “shall be applied” either “to reduce Company-Matching Contributions” or “to pay Plan expenses,” and § 10.11(d) provided that “[e]xpenses paid from the Trust shall be paid from forfeitures allocable under Section 4.04…and, to the extent not paid from such forfeitures, shall be paid from the Trust and allocated to some or all of the Funds on a pro rata basis.” The Verizon Employee Benefits Committee decided each year how to allocate any forfeitures. Plaintiffs alleged that from 2019 to 2023 the Committee used all or nearly all forfeitures to reduce Verizon’s matching obligations, while participants paid administrative expenses from their own accounts, including at least $23 annually in recordkeeping fees. In 2024, Verizon amended the plan to require forfeitures to offset contributions automatically, which plaintiffs did not challenge. Plaintiffs sued Verizon, its board of directors, and the Committee, asserting claims against the Committee for breach of the duties of loyalty and prudence and for engaging in prohibited transactions, and a failure to monitor claim against Verizon and the Board. Verizon moved to dismiss for failure to state a claim. The court noted that it was not the first to consider such a suit, that courts “come out different ways,” and that no circuit court had yet weighed in. “Suffice it to say, these are difficult issues, and the Court found the prior decisions on this issue to be very helpful in arriving at its conclusions.” The court first held that the Committee acted as a fiduciary and not a settlor because an employer wears its “fiduciary hat” when exercising discretion over plan assets and its settlor hat when deciding the “form or structure” of the plan. The court found that plaintiffs alleged a fiduciary function because they challenged how the plan was implemented, not how it was designed. The court acknowledged that this distinction might seem artificial, because Verizon could achieve the same result by amending the plan, but said it reflects “ERISA’s basic bargain”: employers choose the benefits, and participants are entitled to have the plan administered loyally and prudently. The court also clarified that plaintiffs were not claiming that using forfeitures to offset employer contributions was illegal per se, a theory the court agreed would be “difficult to justify,” but only that a discretionary choice must be made in accordance with fiduciary duties. As for plaintiffs’ specific claims, their loyalty claim survived. The court described Verizon’s choice as “a zero-sum game” in which the use of forfeitures to defray employer contributions benefits the company and their use for expenses benefits participants. Verizon argued that its conduct was authorized by the plan, but the court noted that fiduciary duties “trump[] the instructions of a plan document.” The legislative and regulatory history Verizon cited showed only that employers may structure plans to use forfeitures for contributions, not how fiduciaries must choose between options. Plaintiffs’ allegations that the Committee applied tens of millions of dollars in forfeitures to Verizon’s obligations while participants paid expenses, even though Verizon was “generating billions of dollars in annual profits,” were “more than enough.” The prudence claim also survived on two theories. The first was that the Committee reflexively applied forfeitures to Verizon’s benefit, without investigating whether doing so served participants. The second was that it let forfeitures roll over from year to year while participants paid expenses. The court further rejected Verizon’s argument that plaintiffs had not alleged an injury to the plan. It found that using forfeitures for contributions leaves the plan “stuck with the bill for expenses,” and it illustrated with a $1,000 plan how the same match and expenses left the plan $100 worse off. As for the failure to monitor claim, because it was derivative of the prior claims, it was allowed to proceed as well. However, plaintiffs’ prohibited transaction claim failed. The court ruled that “payment of benefits” is not a “transaction” under § 1106, which targets “commercial bargains” struck with plan insiders. The allocation of forfeitures involved no counterparty and only moved money within the plan, and “[i]f this counted as a ‘transaction,’ it’s hard to say what wouldn’t.” The court thus granted the motion to dismiss as to the prohibited transaction claims, which it dismissed with prejudice. However, the rest of plaintiffs’ claims survived, so the case will proceed.

Sixth Circuit

Gil v. Bridgestone Americas, Inc., No. 3:22-cv-00184, 2026 WL 2944487 (M.D. Tenn. Sept. 30, 2026) (Judge Eli Richardson). David Gil first worked for Bridgestone Retail Operations (BSRO) as a salaried manager trainee in 1996 and left in 2000 without a vested pension benefit. He returned in 2006 as an hourly employee when BSRO acquired his employer. The plan sponsor, Bridgestone Americas, Inc. (BSAM), “‘subsequently recognized later service with Bridgestone’ for vesting credit for employees, like Plaintiff, who were rehired as part of an acquisition.” In 2017, BSAM’s administrator, Willis Towers Watson (WTW), launched an online pension calculator, which Gil used repeatedly after acknowledging a disclaimer that its estimates might contain errors. The calculator apparently overestimated his benefit by crediting him with salaried service for years in which he was an hourly employee. When Gil initiated retirement in 2019, WTW realized the error and issued a retirement kit with the lower, correct benefit. The BSAM appeals board denied Gil’s appeal, and he kept working. Eventually, Gil sued both BSAM and BSRO in 2022. The court previously granted in part and denied in part defendants’ motion to dismiss, leaving a statutory penalties claim against BSAM under ERISA § 105 (Count I), and a breach of fiduciary duty claim against both defendants (Count II). (Your ERISA Watch covered this ruling in our August 28, 2024 edition.) The parties then cross-moved for summary judgment. On Count I, the court borrowed the one-year limitations period in Tenn. Code Ann. § 28-3-104(a)(1)(C), which applies to statutory penalties and which the parties agreed governed, while noting that federal law determines accrual, which occurs when the plaintiff “knows or has reason to know” of his injury. Defendants argued that Gil received a compliant pension benefit statement more than a year before he sued, alerting him to any prior miscalculation, and the court agreed. The 2019 retirement kit set out each component of Gil’s accrued benefit, the dollar amounts, and the employment and service data used to calculate them. Because the kit satisfied ERISA’s requirements from 2019 through the date of the complaint, any claim for noncompliance before the date of the kit was time-barred. BSAM was therefore entitled to summary judgment on Count I. On Count II, Gil’s theory that defendants breached fiduciary duties by failing to provide periodic benefit statements was unsuccessful because he cited no authority that such a failure independently supports a fiduciary claim, rather than only a claim for violation of Section 105. Gil’s second theory, that defendants ignored his inquiries, failed because his documented 2015 inquiry was in fact answered by defendants. On his remaining theory – that defendants misrepresented the amount of his pension through the calculator and failed to correct the overestimate once they learned of the error in July 2017 – the court skipped the questions of fiduciary status and materiality and resolved the claim on detrimental reliance. The only detriment Gil pleaded in his complaint was making an early election, but that occurred in 2016, before the 2017 and 2018 representations he challenged. Thus, there was no genuine dispute that Gil did not rely on the challenged representations in making the early election. The court therefore granted defendants’ motion for summary judgment and denied Gil’s.

Ninth Circuit

Foley v. Legacy Health, No. 3:25-cv-01041-AN, 2026 WL 2935341 (D. Or. Sept. 30, 2026) (Judge Adrienne Nelson). Four former employees of Legacy Health, a nonprofit health system in Oregon, participated in the company’s 403(b) and 401(a) retirement savings plans, both administered by the Legacy Health Retirement Committee. In this action they are challenging: (1) the 403(b) plan’s investment in the Lincoln Stable Value Separate Account (LSA GIC), a guaranteed investment contract that they alleged paid crediting rates 1.53 to 2.41 percentage points below the average of thirteen comparator stable value options from 2019 through 2023; (2) the plans’ investment in the TRP Growth Fund, which they alleged trailed its benchmark, the Russell 1000 Growth Index, and five peer funds; and (3) the use of forfeitures in the 401(a) plan to offset Legacy’s future contributions instead of plan expenses. The plan provided that remaining forfeitures “shall be applied to reduce future Employer contributions or to pay plan expenses,” and defendants allegedly applied more than $4.8 million to Legacy’s contributions from 2019 through 2023 and $0 to expenses, even though Legacy had enough cash to make its contributions. Their operative complaint asserts breach of the duty of prudence against the Committee, breach of the duty of loyalty against all defendants, and anti-inurement and failure to monitor claims against Legacy and its board of directors. Defendants moved to dismiss for failure to state a claim. Applying the Ninth Circuit’s decision in Anderson v. Intel Corp. Investment Policy Committee (argued before the Supreme Court yesterday, see above), the court explained that prudence is judged by the fiduciary’s methods and not its results. A plaintiff relying circumstantially on fund performance must compare it to “meaningful benchmarks,” since “[s]imply labeling funds as ‘comparable’ or ‘a peer’ is insufficient.” On the LSA GIC, plaintiffs pleaded no facts about defendants’ methods, having admitted that they lacked knowledge of the decision-making process. They argued that GICs are different from the mutual funds in Anderson. The court held that their process allegations (that the rate was reviewed semi-annually, that the market was “robust,” and that defendants had “considerable leverage”) were “too bare,” and that Anderson applies to GICs. The LSA GIC is a separate account GIC, riskier than a synthetic GIC and less risky than a general account GIC, according to plaintiffs’ own allegations. Plaintiffs alleged that two comparators were synthetic GICs and argued in their brief that a third was a separate account GIC, but defendants’ Form 5500s showed that each was a general account GIC. The court held that the Lincoln Financial Fixed Account was not a benchmark merely because Lincoln offered both. As for the TRP Growth Fund, that was “a closer question,” since plaintiffs alleged consistent underperformance against the benchmark index assigned to it by the investment policy. But the cases they cited involved underperformance combined with something more, such as proprietary funds, excessive fees, or a failure to follow the policy’s review requirements. The court held that underperformance alone does not suffice. Plaintiffs did not allege that defendants owned the fund, violated a policy requirement, or paid excessive fees, and they pleaded nothing about the five peer funds beyond names and returns. Sharing a benchmark “does not equate to sharing aims, risks, and potential rewards.” On forfeitures, the court observed that the plan expressly allowed either use and that defendants followed it. It noted that “reasonable courts have indeed disagreed on this issue, and it is not obvious that either view is necessarily correct,” and acknowledged that a fiduciary can breach its duties by acting out of self-interest even when the plan permits the choice. But the allegations here were “too sparse.” Many of plaintiffs’ allegations were conclusory, and only three were sufficiently specific: that Legacy could afford its contributions, that defendants did not investigate whether it could if forfeitures paid expenses, and that they consulted no independent decision maker. “Stripped of conclusory allegations,” the court said, plaintiffs’ theory amounted to a categorical rule that forfeitures must pay expenses whenever the company can afford to make contributions, which would create a benefit the plan does not provide. The anti-inurement claim failed because reallocating forfeitures within a plan does not violate § 1103(c)(1), and plaintiffs did not allege that any forfeitures left the plan or were used for anything other than participant benefits. Finally, the failure to monitor claim, being derivative of the prudence claims, fell with them. The court thus granted defendants’ motion and dismissed the case, although it gave plaintiffs leave to amend.

Class Actions

Ninth Circuit

Schuster v. Swinerton Inc., No. 3:24-cv-04970-JSC, 2026 WL 2959699 (N.D. Cal. Oct. 1, 2026) (Judge Jacqueline Scott Corley). Michael Schuster and Juan Del Barco brought this breach of fiduciary duty action on behalf of a putative class of participants in Swinerton Inc.’s retirement savings plan. Plaintiffs asserted, among other things, that the plan’s recordkeeping and administrative fees were excessive. The parties notified the court in March of 2026 that they had reached a settlement, and plaintiffs moved for preliminary approval of a class action settlement. After a hearing, the court identified some issues with the proposal and ordered the parties to try again. (We covered this ruling in our August 19, 2026 edition.) The parties filed supplemental submissions, and in this order the court approved the motion. Under the settlement agreement, defendants will pay $497,500, from which the court was told that up to $50,000 in notice and administration costs, up to $25,000 in litigation expenses, attorneys’ fees of 25% of the fund ($124,375), the costs of an independent fiduciary, taxes, and service awards of up to $5,000 per class representative may be deducted. The balance will be allocated pro rata based on each class member’s plan account balance and the duration of those balances during the class period. Class members who do not exclude themselves release a broad range of claims relating to the selection and monitoring of plan fiduciaries and service providers and the fees and services at issue, though not claims to the value of their vested account balances. Because the class is a Rule 23(b)(1) class, members may object but may not opt out. The court preliminarily certified the class under Rule 23(a) and Rule 23(b)(1)(A). Approximately 6,000 participants made the class sufficiently numerous, and commonality was satisfied because the questions of whether the plan’s recordkeeping fees were excessive, whether defendants breached their fiduciary duties, and whether the plan suffered losses were common to all members. Typicality was met because plaintiffs challenged a single course of conduct, the management of the plan, and adequacy was met because there was no evidence of conflicts. The court noted that “[m]ost ERISA class action cases are certified under Rule 23(b)(1),” and held that individual suits by roughly 6,000 participants would risk “incompatible standards of conduct” for defendants, so it did not address Rule 23(b)(1)(B). Turning to the fairness of the settlement, the court noted that it followed a full-day mediation with an experienced ERISA mediator. The only preferential treatment was the requested service awards, on which the court deferred ruling until final approval. On the range of possible approval, plaintiffs estimated that the $497,500 fund represented 22.1% of total estimated losses, which they argued was consistent with or better than recoveries in comparable ERISA class actions. Based on a model of the pro rata distribution, the settlement administrator estimated that current participants would receive an average of $47.40 and a median of $16.17, ranging from $0.01 to $718.02, while former participants would receive an average of $80.34 and a median of $57.64, ranging from $25.02 to $434.19. The court had initially raised concerns, including about the release language and the notice, but found that plaintiffs’ supplemental submissions resolved them. As for fees, class counsel’s current lodestar of $150,190, with an estimated lodestar of $177,190 through final approval, meant that a 25% award would represent a negative multiplier. The court required a fee motion with declarations and detailed billing records so it could determine the appropriate lodestar and so class members could object. The court thus granted preliminary approval of the settlement and provisionally certified a settlement class of all persons who participated in the plan during the class period, with limited exceptions. A final approval hearing will be held in February of 2027.

Disability Benefit Claims

Eighth Circuit

Farley v. Hartford Life & Accident Ins. Co., No. 4:24-cv-00894-SEP, 2026 WL 2971836 (E.D. Mo. Sept. 30, 2026) (Judge Sarah E. Pitlyk). Krystal Farley, a nurse, last worked in 2020, when she was hospitalized for diabetic ketoacidosis and developed acute respiratory distress, pneumonia, and respiratory failure, ultimately losing part of her left lung. She was covered by her employer’s long-term disability plan, which was insured and administered by Hartford Life and Accident Insurance Company. The plan defined disability under an “Own Occupation” standard for the first 24 months and an “Any Occupation” standard thereafter, the latter requiring that the claimant be unable to perform any occupation “for which You are qualified by education, training or experience.” Hartford found Farley disabled through the end of the Own Occupation period but denied benefits under the Any Occupation standard. The denial relied on a physician reviewer, Dr. Rafid Fadul, who found Farley capable of sitting without restriction but of standing and walking only occasionally, for up to twenty minutes at a time and up to one hour per day, and on an employability analysis identifying four sedentary occupations that she could perform with “minimum training.” Farley appealed, but Hartford upheld its decision, although it did so after the regulatory deadline. (Hartford later argued that it did not receive Farley’s appeal in a timely fashion because Farley had mailed it to the wrong address and her counsel’s fax listed an incorrect claim number.) Farley thus brought this action, and the parties filed cross-motions for judgment. The court first held that Hartford’s decision would be reviewed de novo despite the plan’s grant of discretion. The court acknowledged that the Eighth Circuit had held (in McIntyre v. Reliance Standard Life Ins. Co.) that an administrator’s delay is “not a trigger for de novo review” but only a factor in abuse of discretion review. However, that ruling interpreted the 2002 amendments to the regulation; the 2016 amendments to the regulations require disability plans to “strictly adhere” to claims procedures. If they do not, the claim “is deemed denied on review without the exercise of discretion by an appropriate fiduciary,” subject only to a de minimis exception. The court found that the record documented Hartford’s receipt of the appeal by fax, that Farley had satisfied Hartford’s own instructions for appeals, and that Hartford’s letters confirmed receipt on that date. Even assuming Hartford’s lateness was de minimis, it failed the remaining prongs because Farley was likely prejudiced by the delay and Hartford identified no good cause, since its “attempts to blame Plaintiff for its own mistake cut against a finding of good cause.” The claim was therefore deemed denied when Hartford’s deadline expired, and the court did not consider Hartford’s ultimate denial or the employability analysis accompanying it. Reviewing the original denial de novo, the court overturned it for two reasons. First, the employability analysis relied on occupations Farley could perform with “minimum training,” but the plan’s Any Occupation definition imposed no retraining requirement, and the analysis never explained the extent of the training that would be needed. Second, Hartford’s conclusion that Farley could perform sedentary work ignored the limitations found by its own reviewer. Sedentary jobs require walking and standing only “occasionally,” meaning up to one third of an eight-hour day, or about two hours and forty minutes. Even reading Dr. Fadul’s report in Hartford’s favor as permitting one hour of standing and one hour of walking, Farley’s limit of two hours fell short. The court thus granted Farley’s motion for summary judgment and denied Hartford’s cross-motion. The court remanded, stating that if Hartford “cannot identify any occupation that Plaintiff may perform, Plaintiff is entitled to disability benefits under the Plan.”

Ninth Circuit

Whitlock v. Provident Life & Accident Ins. Co., No. 25-cv-0964-AGS-VET, 2026 WL 2966232 (S.D. Cal. Sept. 30, 2026) (Judge Andrew G. Schopler). While working for Lockton Companies, Suzanne Whitlock elected to participate in a voluntary “top-up” disability program that Lockton offered alongside its broader welfare benefit plan. The program was funded through individual policies issued by Provident Life and Accident Insurance Company and its parent, Unum Group. Premiums were deducted from employees’ paychecks, and after Whitlock left Lockton she kept the coverage, paid the premiums herself, and retained the discount Lockton had negotiated. In 2021, she was diagnosed with generalized anxiety disorder and major depressive disorder, and her psychiatrist recommended that she work no more than 40 hours per week, later lowering that to 32. She reduced her workload and took a substantial pay cut at her then-employer, HUB, and submitted a disability claim to Provident, which denied her claim and her subsequent appeal. Whitlock then brought this action (initially through counsel but transitioning to pro se), and the case proceeded to cross-motions for judgment. The court first held that ERISA governed the policy. The court found that Lockton had negotiated a discounted rate representing a 30% reduction from market premiums, along with portability and payroll deduction, and it received a single bill and remitted a lump sum to Provident. Whitlock argued that Lockton merely permitted insurer communications, facilitated payroll deductions, and transmitted enrollment data, but the court observed that such operational functions “would support ERISA coverage, not undercut it,” and that Lockton’s actions were more than “clerical or procedural duties.” The court also noted that Lockton had filed mandated ERISA disclosures, such as a Form 5500 and a summary annual report. Thus, there was no “post hoc ‘ERISA-IF-ICATION,’” as Whitlock asserted. The court next held that the plan did not qualify for the safe harbor in 29 C.F.R. § 2510.3-1(j), because the plan failed the endorsement and consideration prongs of the relevant four-part test. The plan failed the endorsement prong because Lockton negotiated reduced rates and offered the program with its broader welfare plan, and it failed the consideration prong because Lockton’s Form 5500 identified Lockton as receiving commissions and fees for the plan. As a result, because ERISA applied, Whitlock’s state law claims were preempted and dismissed. Next, Whitlock argued that Provident evaluated her under the “Total Disability” and “Residual Disability” definitions rather than the policy’s “Partial Disability” standard. The court agreed that the initial denial letter used the wrong terms but found the error immaterial. The court found that Provident’s reviewing physicians never applied policy language, the appeal decision cited the correct partial disability provisions, and under Ninth Circuit authority the only remedy for flagrant procedural violations is de novo review, which the court was applying anyway. On the merits, as mentioned, the court applied de novo review, presuming that the long-term disability plan, which contained no grant of discretion, was severable from Lockton’s welfare plan, which did. The court agreed that Whitlock showed a salary reduction of roughly 32.5%, satisfying the policy’s 20% loss of earnings requirement, but offered “virtually no evidence” on the remaining elements, and instead “fixated” on whether ERISA applied. Although Whitlock did not satisfy her burden, the court examined the record out of solicitation for her pro se status. It found that Whitlock’s treating psychiatrist rated her risk level “low” or “minimal,” noted that her symptoms improved after she left HUB, and attributed her condition to her work environment and “situational stressors,” while a reviewing psychiatrist found that the records “do not document severe and persistent symptoms” and that she was working 32 to 40 hours a week growing her own company. Because Whitlock had maintained and then increased her workload at her own company, she failed to show that she could not perform the material and substantial acts of her usual occupation. The court thus granted Provident’s motion for judgment and denied Whitlock’s.

Eleventh Circuit

Edwards v. Reliance Standard Life Ins. Co., No. 2:25-cv-00558-MHH, 2026 WL 2963512 (N.D. Ala. Sept. 30, 2026) (Judge Madeline Hughes Haikala). Plaintiff Lucille Edwards worked as a clinical nurse at Alameda Health System in California and was covered by its employee long-term disability benefit plan, which was insured by Reliance Standard Life Insurance Company. Edwards submitted a claim under the plan to Reliance, alleging disability due to anxiety and depression. Her therapist’s notes reflected severely impaired attention, concentration, and memory, and she attended counseling about twice per month during the 180-day elimination period. Edwards fractured her foot after the elimination period ended. Edwards filed a claim for benefits, but Reliance denied it after a file review by a licensed clinical social worker concluded that the evidence did not establish a functional impairment. On appeal, Reliance intended to conduct an in-person examination, but learned that Edwards had moved to Alabama, so commissioned a file review from Dr. Brandon Erdos instead. Reliance then upheld the denial. This action followed in which the parties cross-moved for summary judgment. The court applied the Eleventh Circuit’s idiosyncratic six-step ERISA benefits framework, beginning with whether Reliance’s decision was “de novo wrong.” At the outset, the court set the foot fracture aside because it post-dated the elimination period, leaving the psychiatric claim as the only basis for benefits. On that claim, the court found that the record lacked objective evidence of functional limitation. Dr. Erdos found no clinical findings supporting disabling severity and observed that Edwards’s treatment frequency was “not typical or consistent with” impairing symptoms. The treatment notes described a patient who was alert and oriented, with no suicidal or homicidal ideation, and the record contained no medication during the elimination period and no restrictions imposed by a treating provider. The court stated that “[t]he limited number of treatment sessions suggests a non-severe impairment,” and, as for the reported cognitive deficits, “[n]europsychological testing could have assisted in determining whether Ms. Edwards’s conditions were causing functional impairment. No such testing appears in the record.” The court explained that a plan administrator need not give greater weight to a treating provider’s opinion, particularly where the opinion rests on subjective complaints, and stated that “where the plan puts the burden on the claimant to prove that she is disabled, it is implicit in the requirement of proof that the evidence be objective.” The court rejected Edwards’s arguments regarding Reliance’s conflict of interest and its use of a file review. The court acknowledged that a structural conflict of interest is a factor to be weighed, but Edwards offered no evidence that Reliance’s dual role as insurer and administrator improperly influenced its decision. Reliance’s use of a file review rather than an in-person examination “does not, standing alone, render its decision incorrect.” As a result, because Reliance’s decision was not “de novo wrong,” the court ended its inquiry at step one and granted Reliance’s motion while denying Edwards’s.

Krambeck v. Unum Life Ins. Co. of Am., No. 8:24-cv-2102-TPB-NHA, 2026 WL 2935928 (M.D. Fla. Sept. 30, 2026) (Judge Tom Barber). Briana Krambeck, a Major Sales Assistant at a Costco store in Nebraska, became ill with COVID-19 in May 2020 and took medical leave. She later reported shortness of breath and dysphonia (hoarseness and difficulty speaking), among other symptoms. Unum Life Insurance Company of America, the claims administrator for Costco’s long-term disability plan, approved benefits in January 2021 based on her inability to perform her own job. After nine months, the policy required that she be “unable to perform the duties of any gainful occupation for which [the employee is] reasonably fitted by education, training or experience.” It was undisputed that an inability to speak for more than 30 minutes a day would meet that standard. In September 2021, Krambeck’s treating physician, Dr. Angela Law, told Unum that Krambeck could do full-time sedentary work but could speak for only 30 minutes a day, which ruled out a telephone job. Unum’s in-house physician spoke with Dr. Law and sent her a letter stating that she had agreed Krambeck could work in a sedentary occupation requiring speaking “occasionally,” meaning up to 2.5 hours a day, and inviting revisions. Dr. Law did not respond, and Unum terminated benefits. Two weeks later, Dr. Law sent a revised version of her response changing her answer on sedentary work from “Yes” to “No,” without mentioning the call or the letter. Unum reviewed the file again and, relying on two more physician reviews, again denied her claim and her appeal. Krambeck thus brought this action seeking reinstatement of benefits, while Unum counterclaimed to recover benefits already paid because she received Social Security disability benefits for the same condition. Both sides moved for summary judgment. The court applied the Eleventh Circuit’s idiosyncratic six-step framework for ERISA benefit cases, which the court noted was “likely unnecessarily complex.” The court questioned whether ordinary summary judgment principles could be set aside at the first step, which asks whether a decision was “de novo wrong.” The court determined that the conflicting opinions of the various doctors, together with credibility questions about the call and the correspondence, “would ordinarily present classic issues of fact for trial.” Because neither side had consented to a bench trial on the papers, the court, “in an abundance of caution,” declined to weigh the evidence and denied both motions on the benefits claim. The court then discussed the operative standard of review, noting that the policy expressly gave Unum discretionary authority. However, Krambeck argued that Washington law governed and barred discretionary clauses in disability policies. Unum argued that the Washington regulation took effect in 2009, after the policy’s 2001 effective date, and could not apply retroactively. The court found that the policy contained a 2020 amendment stating that “[t]he entire policy is replaced by the policy attached to this amendment,” effective January 1, 2020, so applying the regulation was not retroactive. As a result, Unum lacked discretion and review would be de novo. Finally, on Unum’s counterclaim, the court explained that Unum could seek only equitable relief under § 502(a)(3), meaning relief aimed at a specific fund in the defendant’s possession and not her general assets. Krambeck’s declaration stated that the benefits she received from Unum and the Social Security Administration, more than $24,000 retroactive to 2021, had been spent and were not traceable to identifiable assets. Unum offered no contrary evidence or argument, and thus its claim failed. Thus, while Krambeck prevailed on Unum’s counterclaim, both sides’ motions were denied in every other respect. The court declared it would schedule a bench trial by separate notice unless the parties filed a joint submission agreeing to an alternative procedure.

Discovery

Fourth Circuit

Craig M. v. Blue Cross & Blue Shield of N. Carolina, No. 1:25-CV-588, 2026 WL 2957939 (M.D.N.C. Oct. 1, 2026) (Magistrate Judge JoAnna Gibson McFadden). Craig M., suing on behalf of himself and his minor child, S.M., alleged that Blue Cross and Blue Shield of North Carolina (BCBS) wrongly denied coverage for S.M.’s treatment, asserting a claim for benefits under ERISA § 502(a)(1)(B) and a Mental Health Parity and Addiction Equity Act claim under § 502(a)(3). BCBS served written discovery on plaintiff, after which it moved to compel fuller responses and sought sanctions. Meanwhile, plaintiff asked to seal portions of BCBS’s briefing and more than ten exhibits. The first dispute turned on the parties’ agreement. In their joint Rule 26(f) report, they agreed that discovery on the ERISA claim was “limited to the full and complete pre-litigation appeal record,” but that either side could move by February 19, 2026, for additional discovery on the amount at issue or on exhaustion of administrative remedies. The court adopted that schedule. The deadline passed without a motion, BCBS served discovery the next day, Craig M. answered by pointing to the administrative record, and BCBS did not move to compel until June 29, 2026. The court held that BCBS’s motion to compel exhaustion discovery was “four months too late,” and denied it as to the exhaustion-related interrogatories and document requests, declining also to deem related requests for admission admitted. The damages discovery was treated differently. Because Craig M. had conceded that his out-of-pocket expenses were discoverable and had produced some information, the dispute concerned the sufficiency of his responses and not the need for discovery, so the deadline did not apply. BCBS argued that plaintiff’s responses were irreconcilable because his “responses show that the provider billed him $171,513 but he paid $273,189.33 or possibly $151,088.35.” The court rejected Craig M.’s belated objection that the requests sought “extra-record discovery” and ordered further responses that “clearly presents the precise information that BCBS requests” and explains any inconsistencies. The Parity Act claim produced a separate ruling. In response to interrogatories asking for the facts supporting his claims that a plan term and BCBS’s denial violated the Parity Act, Craig M. referred BCBS to his complaint and appeal letters, citing Rule 33(d). The court called him “mistaken,” as a complaint is not a business record under that rule and was not responsive. It ordered complete narrative responses. Finally, the court denied the motion to seal. Plaintiff cited “no law on the public’s right of access to the courts, the sealing standards, or the propriety of sealing the requested information,” and did not comply with local rules. The stipulated protective order did not relieve him of the burden to show that sealing was necessary. Furthermore, his descriptions of the exhibits were “vague and inaccurate,” as they did not reveal his family’s financial information or his child’s medical history. The court directed BCBS to file the exhibits at issue publicly, but with the family members’ full names redacted to their initials in accordance with the pseudonyms plaintiff were using.

Eighth Circuit

Gibson v. Unum Life Ins. Co. of Am., No. 25-2711 (JWB/JFD), 2026 WL 2983259 (D. Minn. Oct. 5, 2026) (Judge Jerry W. Blackwell). Tyronne Gibson sued Unum Life Insurance Company of America after it denied his claim for ERISA-governed long-term disability benefits. Count I seeks benefits under ERISA § 502(a)(1)(B), and Count II seeks equitable relief under § 502(a)(3) for alleged breaches of fiduciary duty in Unum’s handling of the claim. The dispute in this order concerned only Count II. Gibson filed a motion seeking discovery outside the administrative record about Unum’s claims-handling process, including a conversation between his treating physician and an Unum physician reviewer, whether the reviewer accurately reported it, and why Unum kept relying on the reviewer after Gibson raised concerns. Unum argued that Count II was “not meaningfully distinct from the benefits claim” and that, because benefits would be reviewed de novo, any challenge to claims administration was irrelevant. In January of this year the assigned magistrate judge granted Gibson’s motion, concluding that his separately pleaded fiduciary duty theory could involve facts outside the administrative record, while expressly declining to decide the merits or viability of Count II. (Your ERISA Watch reported on this ruling in our January 28, 2026 edition.) Unum objected and this order was the result. The court found support for the magistrate’s order in two Eighth Circuit decisions. In Silva v. Metropolitan Life Ins. Co., the court held that plaintiffs are not required to elect between § 502(a)(1)(B) and § 502(a)(3) remedies at the pleading stage. Jones v. Aetna Life Ins. Co. was “even more directly applicable.” There, a plaintiff pleaded a disability benefits claim and a fiduciary duty claim based on the claims-handling process, and the Eighth Circuit held that the counts rested on different theories even though they sought functionally identical relief, because § 502(a)(3) liability flowed from the allegedly improper process and not from the denial itself. The court further held that Unum’s reliance on de novo review did not change the result. The parties agreed that discovery on the benefits claim is limited to the administrative record, and the court accepted that process deficiencies do not determine whether Gibson was disabled. But the magistrate’s order did not expand the record on Count I, and whether process evidence is material to disability is a different question from whether it is relevant to a fiduciary theory. Unum’s argument under 29 C.F.R. § 2560.503-1(l)(2), that the remedy for a failure to provide a full and fair review is de novo review “misses the mark” because Count II also alleged factual misrepresentations about the treating physician conversation. The court deferred to the magistrate judge’s view that it was too soon to say the administrative record held everything relevant to Count II. The court closed by stressing the limits of its ruling. It would not comment on whether Count II would succeed or whether any recovery would duplicate relief under Count I, and Silva left open whether a plaintiff may later be required to elect a theory “once full discovery has been conducted.” “Affirmance does not authorize open-ended discovery,” and Rule 26’s relevance and proportionality requirements still applied. Finally, the court denied Gibson’s request for fees incurred in responding to the objections, because Unum’s objections raised “nonfrivolous questions” about the scope of discovery and the relationship between the two provisions.

Payne v. Hormel Foods Corp., No. 24-cv-545 (SRN/SGE), 2026 WL 2948833 (D. Minn. Oct. 1, 2026) (Magistrate Judge Shannon G. Elkins). Scott Payne alleges in this putative class action that Hormel Foods Corp. and its board of directors imprudently administered two defined contribution plans in breach of their fiduciary duties under ERISA. Previously, the court denied defendants’ motion to dismiss (as we reported in our September 25, 2024 edition), and the case proceeded to discovery. Before the court here was a dispute over expert disclosure on plaintiffs’ class certification motion. Over Payne’s objection that “there is no rule or procedure that authorizes separate experts for class certification proceedings,” the court’s pretrial scheduling order (PTSO) set separate deadlines for class certification and merits experts. As amended, the PTSO allowed a party to designate the same expert for both stages, but required Payne to disclose class certification experts by November 3, 2025, and merits experts by June 1, 2026, with class certification briefing in between. Payne disclosed no class certification expert, and his April 2026 motion cited none. He then served the merits report of Christopher Tobe on June 1 and, on June 5, the day his class certification reply was due, served a “supplemental” Tobe report with hundreds of changes and filed it with a reply that relied heavily on it. Hormel moved to exclude the report or, alternatively, to file a sur-reply. The court evaluated whether Payne’s conduct violated the PTSO and whether exclusion was warranted under Federal Rules of Civil Procedure 16(f)(1)(C) and 37(c)(1). The court ruled that there was “no legitimate debate” that Payne violated the PTSO. His argument that the PTSO “places no limit on how a disclosed expert may be used,” so that he could disclose experts for any purpose by the merits deadline, was “a nonsensical argument that ignores the disclosure provisions in the PTSO and renders the class certification expert deadlines irrelevant.” Tobe’s opinions supported the class certification motion, and thus he was a class certification expert whatever the substance of his opinions. The court further found clear prejudice. Hormel could not depose Tobe, offer a rebuttal expert, address his opinions in its opposition, or bring a Daubert challenge, which was “exactly the kind of surprise that scheduling orders are designed to prevent.” A sur-reply would not cure the prejudice and further discovery would delay a case already more than two years old and undo the bifurcated schedule. Because Payne had opposed bifurcation from the outset, the court was also “hard-pressed to conclude that Mr. Payne’s conduct was not willful.” The court thus granted Hormel’s motion to exclude Tobe’s report in connection with Payne’s motion for class certification.

Ralston v. Lesser, No. 4:25-cv-01325-SEP, 2026 WL 2936281 (E.D. Mo. Sept. 30, 2026) (Judge Sarah E. Pitlyk). Heidi Ralston, a participant in the ARCO Holdings, Inc. employee stock ownership plan (ESOP), alleged that in a 2019 transaction Aegis Trust Company, LLC and Robert E. Lesser, the ESOP’s trustee, caused the ESOP to buy 100 percent of the voting stock of ARCO National Holdings, Inc. from the selling shareholder defendants for more than fair market value. She left her employment in 2022 and cashed out her shares in 2023. Her putative class action seeks the difference between the price the plan paid and fair market value. Four similar suits against ARCO entities were consolidated for pretrial purposes into this case. The shareholder and director defendants moved under Rule 12(b)(1) to dismiss Counts II and III for lack of Article III standing, attaching Ralston’s account statements to show that the per share price rose from $248 in 2019 to $331.24 in 2022, so that she enjoyed a net gain and suffered no financial injury. Because the statements were not referenced in the amended complaint, the court treated the motion as a factual attack. Ralston moved for limited jurisdictional discovery into whether the ESOP paid fair market value, seeking the transaction binder, the trustee’s valuation advisor’s report, any other advisors’ reports the trustee reviewed, and the fiduciary committee’s notes. The court explained that Rule 12(b)(1) motions, unlike Rule 12(b)(6) motions, “often raise factual issues that require the Court to look outside the pleadings,” and that “where issues arise as to jurisdiction or venue, discovery is available to ascertain the facts bearing on such issues.” Defendants argued that “no amount of discovery” could show injury because the share price rose. The court said this “ignores the crux” of Ralston’s argument, which was not that the price fell but that she received reduced appreciation because the plan overpaid in 2019. The court also rejected defendants’ claim that her request rested on speculation. She had identified specific reasons the documents could support her theory, including that the ESOP received no discount for lack of control or marketability, that synthetic equity granted to the sellers diluted participants’ shares, that the financial projections and comparable companies used in the valuation were unreasonable, and that the trustee did not challenge the valuation analysis. Requiring more would be unreasonable because “ERISA plaintiffs generally lack the inside information necessary to make out their claims in detail unless and until discovery commences.” The court found that Ralston’s request for discovery was “narrowly tailored to her needs and clearly defined,” and defendants had not argued that it was burdensome. As a result, Ralston’s motion for leave to conduct jurisdictional discovery was granted. Because the parties agreed that the other pending motions were “inextricably intertwined” with the discovery issue, and discovery might lead to an amended complaint, the court denied those motions without prejudice.

ERISA Preemption

Second Circuit

Fein v. Zottola, No. 25-CV-6889 (KMK), 2026 WL 2925966 (S.D.N.Y. Sept. 29, 2026) (Judge Kenneth M. Karas). Seth Fein sued his sister, her husband, and their two sons regarding the disposition of his mother Sandra Fein’s TIAA-CREF retirement account. After Sandra’s death in 2023, Fein alleged he learned that beginning in 2009 his sister had altered the beneficiary designations on Sandra’s account from an equal split between the siblings to an 80/20 division in her favor, and later to a five-way split. He alleged that his sister, who held Sandra’s power of attorney, sometimes acted on the account “pretending that she was” Sandra, and asserted state law claims for conversion, fraud, breach of fiduciary duty, identity theft, and unjust enrichment. Defendants moved to dismiss under Rule 12(b)(1), arguing that no federal question was presented; Fein countered that the claims arose under federal law because the account was ERISA-governed. Applying the Supreme Court’s two-part test from Aetna Health, Inc. v. Davila, the court held that Fein’s claims were not completely preempted by ERISA § 502(a)(1)(B) and thus it did not have jurisdiction. On the first prong, although Fein, as a beneficiary, was the type of party who could sue under § 502(a)(1)(B), his claims were not colorable claims for benefits, because the complaint targeted a fellow beneficiary’s alleged misconduct rather than the plan administrator’s benefit determinations. As the court put it, “[w]hile the Court in no way intends to undermine the seriousness of identity theft, such conduct does not imply the propriety of the plan administrator’s benefit determinations.” Defendants were also not proper § 502(a)(1)(B) defendants because the complaint did not allege that they were plan administrators, trustees, or otherwise had “total control over the plan claims process.” On the second prong, the court concluded that defendants’ duty not to take another’s property through fraud, conversion, or unjust enrichment was an independent legal duty, not “inextricably intertwined” with interpretation of plan coverage and benefits, and that the case concerned the “amount of payment” rather than the “right to payment.” “Whether Ms. Zottola engaged in deception when interacting with TIAA-CREF is not ‘inextricably intertwined with the interpretation of Plan coverage and benefits,’ rather, it has nothing to do with the terms of the Plan’s coverage.” As a result, because the claims did not arise under federal law, the court lacked subject matter jurisdiction and granted defendants’ motion to dismiss.

Millman v. Ethos Risk Services, LLC, No. 24-CV-4370 (KMK), 2026 WL 2925891 (S.D.N.Y. Sept. 29, 2026) (Judge Kenneth M. Karas). Jeffrey Millman suffered a cerebrospinal fluid leak in 2019 that left him with intracranial hypertension and chronic headaches and unable to work at BNY Mellon. He received long-term disability benefits under a BNY Mellon plan insured by The Lincoln National Life Insurance Company. In 2023, a new Lincoln claim specialist decided that an independent medical exam and surveillance were needed. Lincoln hired Emperion MCN f/k/a Genex Services (ECN) to arrange the exam, and ECN retained Dr. James A. Charles, whose first opinion concluded that Millman could not work an eight-hour day and that his complaints were substantiated. Lincoln also had Ethos Risk Services, LLC, a licensed private investigator, surveil Millman at his son’s Little League game, producing video footage and a report noting that he “was observed walking with a limp.” After ECN sent Dr. Charles the Ethos report and footage, he issued a second opinion reversing course and stating that Millman “can work in any capacity.” Lincoln denied benefits based on that second opinion. Millman alleged that his expert found the video had been selectively redacted, and that Lincoln’s claimed transmission of the second opinion to his doctors went to an outdated address. On appeal, a different Lincoln doctor found Millman disabled and his benefits were reinstated. Millman and his wife alleged severe emotional distress, a stay at the Mayo Clinic, lost earnings, and $31,000 in interest on loans taken to replace his lost income. The Millmans first sued Ethos, and then amended their complaint three times, adding Dr. Charles, Lincoln, and ECN as defendants. The operative complaint alleges numerous claims under state law. All four defendants moved to dismiss for failure to state a claim, but only Lincoln argued ERISA preemption, which the court treated as “a threshold question.” The court stated that complete preemption, a jurisdictional concept, was “irrelevant” because the Millmans had invoked diversity jurisdiction, leaving only the question of express preemption under ERISA § 514(a). The court held that all of plaintiffs’ claims were preempted because they impermissibly “related to” the benefit plan. First, the defamation claims rested on the doctored video, the Ethos reports, and Dr. Charles’s second opinion, all of which were used to terminate benefits and none of which was alleged to have been communicated to anyone other than Lincoln or those it retained to investigate the claim. The court reasoned that the claims were thus an “alternative remedy” for the benefits termination, and that state common law claims are preempted even when they seek remedies beyond the plan’s terms because ERISA provides the only permissible recourse. Pointing out that Millman “availed himself of the appeals procedure and successfully got his benefits reinstated,” the court concluded that “[t]o permit the Plaintiffs to bring state law claims premised, in function if not in form, on the wrongful benefits denial would be to impermissibly interfere with the administrative process for appeal and remedies contemplated by ERISA’s regulatory scheme.” The court found that the cost of analyzing the video, appeal legal fees, the wife’s lost earnings, loan interest, and increased pain, were still “damages for the consequences of the termination decision.” The remaining claims fared no better. The tort claims against Ethos and Dr. Charles concerned conduct “inextricably intertwined with the benefits analysis process,” because deciding whether it was wrongful would require the court to examine the claims process. The aiding and abetting claims, which targeted the same video, report, and exam, concerned “the conduct of a fiduciary and third parties in relation to the plan.” The intentional and negligent infliction of emotional distress claims were likewise premised on the improper investigation and processing of the disability claim. Finally, as for plaintiffs’ claim based on New York General Business Law § 74, the court noted that no case had addressed whether such a claim is preempted, but held that it was because it was premised on the denial of benefits. Because only Lincoln raised preemption, the court dismissed the claims against the remaining defendants sua sponte, concluding that because all of plaintiffs’ claims rested on the same facts concerning the processing of Millman’s claim, ERISA’s preemptive effect applied equally to all defendants. The court allowed plaintiffs to amend their complaint, although it warned that they would have to “allege facts pointing to wrongful conduct by the Defendants arising outside of the context of the disability benefits determination.”

Life Insurance & AD&D Benefit Claims

Sixth Circuit

Wright v. Hartford Life & Accident Ins. Co., No. 3:25-CV-297-CHB, 2026 WL 2925146 (W.D. Ky. Sept. 29, 2026) (Judge Claria Horn Boom). Debra Wright, an employee of Sazerac Distillers, LLC and Sazerac Company, Inc. (manufacturers of Buffalo Trace bourbon, among other spirits), elected dependent life insurance on her husband, Dannie Wright, under Sazerac’s ERISA-governed benefit plan, which was insured by a group policy issued by Hartford Life and Accident Insurance Company. The policy provided that dependent coverage ends “the date the Dependent no longer meets the definition of Dependent,” and it defined “Spouse” as a spouse who “is not legally separated or divorced from” the employee, unless coverage was “continued in accordance with” the policy’s continuation provisions. The couple divorced in 2023. Wright alleged that when she asked human resources and a benefits hotline what to do about her benefits, she was told that she could not stop her elections, that premiums would continue to be deducted until the next open enrollment in November 2024, and that the coverage would remain in force. Dannie Wright died on July 24, 2024, and Hartford denied the claim and her appeal because the two were divorced when he died. The Sazerac defendants refunded her premiums through her paycheck, and an HR employee acknowledged that employees or agents had made a mistake in what they told her. Wright thus brought this action, asserting a claim for benefits under ERISA § 502(a)(1)(B) against Hartford and the plan (Count I) and a claim under § 502(a)(3) against the Sazerac defendants for “breach of fiduciary duty and other equitable relief” (Count II). Hartford moved to dismiss Count I, and the Sazerac defendants moved to dismiss both counts. The court considered the policy and plan documents attached to the motions because the complaint referred to them and they were central to her claims. Count I failed on the plain language. The court held that the policy terms were unambiguous, since a policy is ambiguous only if susceptible to multiple reasonable interpretations, “not just because clever lawyers can disagree over the meaning of terms.” Wright did not dispute that coverage ended on divorce, but argued that it continued under § 5.8(C)(2) of the plan, which lets an employee revoke an election after a “Change in Status” such as divorce, and that she never revoked it. The court rejected this, finding that the section governs elections and does not provide for continuation of coverage. It also found that § 3.3, which addresses when an employee stops being eligible to participate in the plan, did not assist Wright because that section “governs an employee’s eligibility to participate in the Plan; it does not address an employee’s eligibility to receive specific elected benefits.” The court therefore dismissed Count I. The court resolved Count II on whether Wright had alleged entitlement to available equitable relief. It declined to treat her catch-all request for “equitable relief” as sufficient, holding that § 1132(a)(3) does not allow monetary relief from fiduciaries for losses caused by a breach. Wright said she did not seek “money damages,” but the court found that surcharge constitutes monetary compensation and thus her claim was barred pursuant to the Sixth Circuit’s interpretation of § 1132(a)(3) in Aldridge v. Regions Bank (the case of the week in our July 23, 2025 edition and currently pending cert review by the Supreme Court). On estoppel, the court applied the Sixth Circuit’s eight-element test. Wright did not allege intended deception or gross negligence amounting to constructive fraud, intent that she rely on the statement, or extraordinary circumstances such as affirmative misconduct or repeated assurances. As for reformation, that doctrine requires mutual mistake or fraud or inequitable conduct by the other party, but Wright alleged only a unilateral mistake, and did not allege that she lacked access to the plan documents or investigated and reasonably relied on the misstatement. Finally, unjust enrichment/restitution requires particular funds in the defendant’s possession, but Wright’s premiums had been refunded in full and her allegations that they were traceable to unspecified plan assets were too vague. As a result, the court granted the two motions to dismiss.

Medical Benefit Claims

Second Circuit

Doe v. Deloitte LLP Group Ins. Plan, No. 23 Civ. 4743 (JPC), 2026 WL 2925729 (S.D.N.Y. Sept. 29, 2026) (Judge John P. Cronan). John Doe is a participant in a health plan sponsored by his employer, Deloitte LLP, and administered by Aetna Life Insurance Company. In this action he seeks coverage for his ten-year-old son A.D.’s residential treatment at Sandhill Center, an out-of-network facility in New Mexico. After A.D.’s seventh hospitalization, his treatment team recommended long-term residential care. The plan states that “Out-of-Network care is not a covered expense,” but allows Aetna, in its “sole discretion,” to offer benefits for services that would not otherwise be covered. Aetna decides whether to approve out-of-network single case agreements using the “ALIC Criteria,” which the plan does not describe. Aetna initially suggested several in-network residential treatment centers, but Doe’s family and educational consultant rejected them. Aetna told the family before admission that Sandhill did not satisfy ALIC criteria because Sandhill lacked accreditation, round-the-clock licensed behavioral health staffing, weekly psychiatric treatment, and a psychiatrist as medical director. Regardless, A.D. was admitted to Sandhill, and Aetna denied the claim and two appeals with the explanation that the plan did not cover out-of-network care. Doe sued under ERISA § 502(a)(1)(B), and last year the court held that Aetna’s denial was arbitrary and capricious because Aetna merely denied on an “out-of-network” basis without ever addressing whether to authorize a single case agreement. The court remanded for a new review. (This decision was Your ERISA Watch’s case of the week in our March 5, 2025 edition.) On remand, Aetna denied the claim again. It concluded there was no network deficiency because there were suitable in-network options, and that Sandhill failed the ALIC Criteria in any event. The dispute returned to court and the parties again cross-moved for summary judgment. Doe argued for de novo review on the ground that the summary plan description (SPD), which contained a grant of discretionary authority, was not “the Plan.” The court acknowledged that SPDs “do not themselves constitute the terms of the plan,” but found that here the SPD “is the only document in the record describing Plaintiff’s coverage” and “[t]he parties agree that this document describes the Plan,” and thus, under Second Circuit precedent, the SPD “is the ‘plan’ for purposes of this action.” The court further explained that its earlier finding of arbitrary and capricious review did not now mandate de novo review. “Aetna’s failure to provide a full and fair explanation initially, which it rectified in the appeal on remand…is [] not a basis for rejecting deferential review.” Next, the court ruled that Aetna’s remand decisions gave Doe a full and fair review under 29 U.S.C. § 1133. Aetna had considered and rejected his single case agreement request and his arguments about the in-network facilities. On the merits, the court held that substantial evidence supported Aetna’s network deficiency finding. Doe’s objections to the in-network facilities fell into three groups: that they would not admit A.D., that admission would be unreasonably delayed, and that their treatment was inappropriate. The court rejected the first because contemporaneous notes, including those of Doe’s own consultant, showed that two facilities would take A.D. despite his age and diagnoses. On delay, it agreed that one facility was likely unavailable, but rejected Doe’s claim about another as “a misleading recitation of the record.” The court accepted that one facility was a “close[] call” on appropriateness, but the court did not need to resolve it, because substantial evidence supported Aetna’s conclusion that two of the facilities were suitable. Doe further relied on A.D.’s treatment providers, who had recommended Sandhill, but the court held that Aetna did not have to “afford ‘special deference’” to their opinions. The court also held that Aetna could rely on the ALIC Criteria, finding that ERISA does not bar external guidelines where the administrator has discretion. The criteria addressed the “appropriateness” and “efficacy” of a treatment “setting” and thus filled a gap in how Aetna exercised its discretion to offer out-of-network benefits without narrowing coverage. Finally, the court did not decide whether the ACA network adequacy regulation, 45 C.F.R. § 156.230, or N.Y. Insurance Law § 3241(a), applied to this self-funded plan. Even if either did, Aetna had explained why it would deny benefits regardless of network adequacy, and those conclusions were supported by substantial evidence. The court thus granted Aetna’s motion for summary judgment and denied Doe’s.

Third Circuit

Ahuja v. Aetna, Inc., No. 25-17642 (SDW) (CF), 2026 WL 2924483 (D.N.J. Sept. 29, 2026) (Judge Susan D. Wigenton). Amit Ahuja, a participant in an ERISA-governed health plan administered by Aetna Life Insurance Company, was hospitalized in Quito, Ecuador in 2022 and medically transported by air ambulance to a Florida hospital. His father, Sunil Ahuja, paid the air ambulance provider $47,990 by bank transfer before the flight. Aetna reimbursed some out-of-pocket expenses but denied coverage for the air ambulance as not medically necessary, and the denial was upheld after two appeals. Amit and Sunil sued for wrongful denial of benefits and breach of fiduciary duty, and Aetna moved to dismiss for lack of standing under Rule 12(b)(1). The court first held that Sunil lacked statutory standing because he was neither a “participant” nor a “beneficiary” under § 502(a). His status as the plan sponsor’s principal shareholder did not matter, and the regulation allowing an authorized representative to pursue claims and appeals, 29 C.F.R. § 2560.503-1(b)(4), “applies to internal submission of claims and appeals,” not federal lawsuits. As for Amit, who did have statutory standing, the court found no Article III injury in fact. Because the air ambulance provider, not Aetna, had demanded payment, and Sunil had already paid it in full, Amit’s alleged injury was neither concrete, since Amit faced no “ongoing exposure,” nor particularized, because it was Sunil who could not recover the $47,990. The court refused to credit plaintiffs’ assertion in their briefing that Amit faced an unreimbursed bill, noting that “a complaint may not be amended by the briefs in opposition to a motion to dismiss.” Ultimately, “[t]he unfortunate reality is that by making the initial payment to Advanced Air, Plaintiffs excluded themselves, albeit unknowingly, from the process and protections Congress made available to patients in situations precisely like Plaintiffs,’” referring to the cost-sharing and dispute resolution protections of the No Surprises Act. The court thus granted Aetna’s motion to dismiss for lack of subject matter jurisdiction.

Seventh Circuit

Christopher E. v. Health Care Service Corp., No. 24-cv-13175, 2026 WL 2936540 (N.D. Ill. Sept. 30, 2026) (Judge Steven C. Seeger). In early 2022, W.E. spent more than two months in Second Nature’s outdoor therapy program in Utah, which combines backpacking with therapy for young adults with mental health, behavioral, and substance abuse problems. The bill exceeded $50,000. W.E. was covered through his father, Christopher E., under the Discover Financial Services Welfare Benefits Plan, which was administered by Blue Cross and Blue Shield of Illinois. Blue Cross denied the claim, and after Christopher appealed, arguing that the treatment was covered and that the denial violated the Mental Health Parity and Addiction Equity Act, it upheld the denial, explaining that “[t]he plan does not cover any behavioral modification facilities. This includes wilderness programs.” Plaintiffs sued Blue Cross and the plan, asserting a claim for benefits under ERISA § 502(a)(1)(B) and a claim under the Parity Act. They alleged that Second Nature was a “Provider” offering “Covered Services” and that Blue Cross also committed procedural deficiencies in its review and denial letters. Defendants moved to dismiss for failure to state a claim. The court considered the plan’s benefits booklet, which defendants submitted, because plaintiffs referred to its terms and it was central to their claims. The court began with the principle of “[n]o coverage, no claim.” “Covered Services” was defined as “a service and supply specified in this benefit booklet for which benefits will be provided,” and it extends inpatient mental health benefits to residential treatment centers. But its definition of a residential treatment center excludes “wilderness programs,” it excludes services not specifically mentioned in the booklet, and it separately excludes behavioral health services provided at various facility types, including wilderness programs, except for covered services provided by appropriate providers. The booklet did not define “wilderness programs,” but the court was unpersuaded by plaintiffs’ characterization of Second Nature as a licensed and accredited “outdoor behavioral health program.” The court stated that it was located in Utah, and “[u]nless you’re in a parking lot of a Shake Shack, if you’re in Utah, you’re probably in the wilderness.” Furthermore, the program’s name and its backpacking activities suggested a wilderness program. Ultimately, the court acknowledged that it could not say at the pleading stage whether the term had a specialized meaning, but called plaintiffs’ relabeling “too cute by half.” In any event, this dispute did not matter, because showing that the wilderness exclusion did not apply did not mean the treatment was covered. Plaintiffs fell short on this issue: “Plaintiffs need a foothold in the booklet, but they don’t have a leg to stand on.” The booklet said nothing about an “outdoor behavioral health program,” and the complaint alleged that Second Nature “was not a residential treatment facility.” Plaintiffs also did not identify any other covered category the program fell within, such as a partial hospitalization or intensive outpatient program. Alleging that Second Nature was a “Provider,” or invoking mental health treatment generally, was not enough, as the booklet did not cover “the entire universe.” The court called the accreditation and licensure arguments “a side show,” and said that alleging that the program is not excluded is “no better than saying that it’s not not-covered.” On the Parity Act claim, the court noted that decisions on wilderness therapy are “all over the map” because of differences in plan language, so each case requires its own analysis. Plaintiffs pleaded two violations. The first was that Blue Cross automatically rejects claims submitted under the National Uniform Billing Committee’s revenue code for outdoor behavioral healthcare, which differs from the code for residential treatment centers. The court found it hard to decipher what plaintiffs alleged, because the complaint did not explain how the use of that code fits the Parity Act framework or what comparable medical or surgical code Blue Cross accepts, and it was not obvious that declining coverage under a billing code is a treatment limitation. The second theory, a disparity between mental health and substance abuse coverage, was withdrawn in plaintiffs’ response brief. As a result, the court granted defendants’ motion to dismiss, dismissing Count I for failure to state a claim for coverage under the plan and Count II as insufficiently pleaded. It granted plaintiffs leave to file an amended complaint.

M.P. v. BlueCross BlueShield of Ill., No. 24-cv-02599, 2026 WL 2927715 (N.D. Ill. Sept. 29, 2026) (Judge Andrea R. Wood). M.P. and his daughter, C.P., a beneficiary of the self-funded Arthur J. Gallagher & Co. Benefits Plan, alleged that BlueCross BlueShield of Illinois (BCBS), the plan’s claims administrator, wrongly denied coverage for C.P.’s mental health treatment at Cascade Academy, a Utah-licensed residential treatment center (RTC). BCBS denied the claims because Cascade did not meet the plan’s definition of an RTC, which requires “24 hour onsite nursing services.” Plaintiffs first sued in the District of Utah, asserting a claim for benefits under ERISA § 502(a)(1)(B), a Parity Act claim under § 502(a)(3), and a claim for statutory penalties under § 502(c)(1) for failure to produce plan documents. The Utah court dismissed all three claims, and plaintiffs filed an amended complaint. The court then granted a joint motion by the parties to transfer the case to the Northern District of Illinois, and defendants moved to dismiss once again. This order was the result. On the Parity Act claim, defendants argued that the plan applied the same 24-hour nursing requirement to RTCs and to their medical and surgical counterparts, skilled nursing facilities (SNFs) and inpatient rehabilitation facilities (IRFs). This argument had persuaded the Utah court, but this court was not sure that the Utah court had considered that “the 24-hour nursing requirement as to SNFs and IRFs was not expressly imposed by the Plan’s language but instead followed from the Plan’s requirement that those facilities be ‘duly licensed by the appropriate governmental authority.’” The court reasoned that this difference allowed a reasonable inference that the plan’s onsite requirement for RTCs is “more restrictive” than the limits on comparable medical and surgical care. Even if the regulations required identical onsite nursing at SNFs, the court held that the source of the requirement mattered. An RTC under the plan must be licensed and also provide 24-hour onsite nursing, while Cascade did not need onsite nursing to obtain its Utah license. The court called the argument that the two facilities are treated equally “a myopic focus on the fact of such requirement,” since onsite nursing is merely one condition of licensure for SNFs but an additional condition for RTCs. The court acknowledged that another case from the district had taken a different view, finding that “equal limitations arising from different sources do not create a disparity in limitations,” but “[r]espectfully,” it was more persuaded by the majority of other courts in the district which had ruled otherwise. The complaint also plausibly alleged a disparity “as applied,” because a licensed Utah RTC is less likely than a licensed SNF to provide onsite nursing, and “generally accepted standards of care” for RTCs do not call for it and only “a very small number” of Utah RTCs offer it. Turning to the benefits claim, the court upheld it, even though plaintiffs conceded that Cascade did not meet the plan’s 24-hour nursing requirement and did not argue that the requirement was ambiguous. The court held that the claim could proceed because it rested on enforcement of a plan term that plaintiffs plausibly alleged violated the Parity Act. On statutory penalties, plaintiffs abandoned their claim against BCBS and the plan, so that part of Count III was dismissed. Against the plan administrator, however, defendants did not dispute that the employer was the proper plan administrator or that the materials requested by plaintiffs fell within the scope of § 1132(c)(1). BCBS’s response to plaintiffs’ request “supports the inference that the document request reached the entities responsible for plan administration. Whether the Plan Admin did in fact receive and ignore the request is a factual question to be resolved at a later stage.” The court thus granted in part and denied in part defendants’ motion to dismiss, dismissing Count III with prejudice as to BCBS and the plan and denying the motion in all other respects.

Ninth Circuit

Jones v. United Behavioral Health, No. 19-CV-06999-RS, 2026 WL 2924591 (N.D. Cal. Sept. 29, 2026) (Judge Richard Seeborg). Mary Jones brought this certified class action against United Behavioral Health (UBH) challenging UBH’s 2017 Level of Care Guidelines, asserting denial of benefits and breach of fiduciary duty claims on behalf of a reprocessing subclass narrowed after the Ninth Circuit’s decision in Wit v. United Behavioral Health (covered in our August 30, 2023 edition). On cross-motions for summary judgment, the court rejected UBH’s several standing challenges to named plaintiff Jones, including its argument that she had assigned away her right to sue, finding that no implied or apparent authority supported the argument that the assignment signed by her mother was valid. The court also ruled that UBH did not meet its burden of showing that assignments to providers defeated class standing. On the merits, the court held that plaintiffs satisfied Wit’s two-prong reprocessing test of showing that (1) UBH’s denials were based on the wrong standard, and (2) they might be entitled to benefits under the proper standard. On the first prong, the narrowed class definition ensured denials were “based on” the 2017 Guidelines rather than other, unchallenged grounds. On the second prong, the court ruled that plaintiffs only needed to show they “might be entitled” to benefits under a proper standard, not prove individualized entitlement in advance as argued by UBH. “Not only would such a scheme be improper under Ninth Circuit law…but it would also decide the issues backwards and render reprocessing itself a useless formality.” On the fiduciary duty claim, the court held that UBH was collaterally estopped by the district court’s undisturbed factual findings in the Wit case. That court found that financial incentives infected UBH’s guideline development, and under the doctrine of offensive nonmutual collateral estoppel, they applied in this case as well. The court also excused exhaustion for most class members as futile, given UBH’s rigid application of the flawed guidelines. Plaintiffs did not prevail on every issue, however; the court granted summary judgment to UBH as to the subset of class members whose plans contractually required exhaustion and who never appealed. Remedies will be decided after further briefing.

Pension Benefit Claims

Tenth Circuit

Phillips v. Boilermaker-Blacksmith National Pension Trust, Nos. 25-3160 & 25-3171, __ F. 4th __, 2026 WL 2917230 (10th Cir. Sept. 29, 2026) (Before Circuit Judges Tymkovich, Bacharach, and Federico). The Boilermaker-Blacksmith National Pension Trust, a multi-employer plan, provides a pension at age 65, but to be considered retired earlier, a participant “must withdraw completely and refrain from employment or self-employment for an employer which performs work in an industry traditionally covered by a Collective Bargaining Agreement,” in a job of the type covered by a collective bargaining agreement or one that involves direct supervision of such jobs. Many boilermakers retired early and began receiving benefits, but some took other jobs, and the trustees concluded that they were no longer entitled to early-retirement benefits, reading the plan to require withdrawal from any work for a company that contributes to a multi-employer pension plan. The boilermakers sued the plan, six trustees, and the board of trustees, alleging improper denial of benefits, breach of fiduciary duty, and violations of procedural requirements. The district court granted the boilermakers partial summary judgment on the benefits claims and some of the fiduciary claims, but granted the defendants summary judgment on the fiduciary claims of other boilermakers as barred by the three-year limitations period. Defendants appealed, and 66 boilermakers cross-appealed. In this published opinion, the Tenth Circuit began with the standard of review. Because the plan gave the trustees “complete discretion to construe, interpret, and apply all terms and provisions of this Plan document,” arbitrary and capricious review applied, although an interpretation that conflicts with unambiguous plan language is by definition arbitrary and capricious. Because the district court had rejected the trustees’ position on three grounds (unambiguous language, late-raised ambiguity, and tax qualification not overriding the plain language), the defendants had to show that all three were wrong. First, the court held that the plan unambiguously refuted the trustees’ interpretation. It reasoned that “withdraw” is a transitive verb, so that the sentence would be “meaningless” without an object, as when “a soldier withdraws from battle or a student withdraws from school.” The plan supplied the object in its two subsections, which describe collective bargaining agreement jobs and their supervision. A boilermaker who quits and joins a sporting goods store, for example, is not disqualified unless that employer’s industry is traditionally covered by a collective bargaining agreement. The trustees suggested that “withdraw completely” was modified only by the introductory phrase about employers, but that ignored the subsections, and the court ruled that defendants’ interpretation “isn’t just unsupported; it’s also impossible to reconcile with the provision as a whole.” Second, the court upheld the district court’s ruling that the defendants had waived ambiguity by raising it for the first time in their reply brief. Third, because the language was not ambiguous in any event, the plan’s directive to preserve tax qualification, which the defendants conceded could matter only if the language were ambiguous, could not override it. On timeliness, the plan required suit within two years of an adverse decision. 29 C.F.R. § 2560.503-1(g)(1)(iv) requires a denial to disclose the claimant’s right to bring a civil action and the applicable time limits, but the plan administrator denied the initial claims of 69 boilermakers without the proper disclosure. Defendants argued that they cured the omissions by disclosing the period in the appeal denials, but the district court found those denials deficient in their own right, because they did not identify the pertinent plan section or adequately explain the reasons. In a footnote, the appellate court rejected the trustees’ concern that the notice could mislead claimants into skipping exhaustion, stating, “we can’t disregard the Department of Labor’s regulations just because we might disagree with them.” The court did not reach defendants’ remaining challenges under 29 U.S.C. § 1054(g) and (h) and § 1056(h)(2)(B), concerning reductions in earned benefits, notice of amendments, and recoupment of overpayments, because the boilermakers had conceded at oral argument that an affirmance on the plan’s meaning would moot them. On the cross-appeal, the Tenth Circuit held that the district court erred in treating the benefit denials as starting the three-year period for breach of fiduciary duty claims under 29 U.S.C. § 1113(2). The period begins only with “actual knowledge of the breach or violation,” and the alleged breach included “a series of misleading statements” and fraudulent concealment of the trustees’ new unwritten restriction. Because the record did not show when the boilermakers learned of that conduct, summary judgment was unwarranted and the court thus reversed. As a result, the appeal was a clean sweep for the boilermakers.

Pleading Issues & Procedure

Second Circuit

Barbieri v. Legg Mason, Inc., No. 21 Civ. 5231 (PGG), 2026 WL 2949368 (S.D.N.Y. Sept. 30, 2026) (Judge Paul G. Gardephe). Belinda Barbieri worked on the product marketing team at Legg Mason & Co., LLC from 2017 to 2020 under an offer letter that hired her “as a temporary employee,” called the assignment “temporary,” set an hourly rate of $85, and said she “may be eligible for certain Company benefits.” She alleged that she nevertheless performed tasks as a full-time permanent employee, was fully integrated into the team, and that managers promised to correct her misclassification. Legg Mason offered its full-time permanent employees a 401(k) plan, an employee stock purchase plan, a paid time off policy, a vacation leave policy, and a severance plan. After Franklin Resources, Inc. acquired Legg Mason in 2020, Barbieri asked for the same benefits as full-time employees, but her request was denied because she was classified as temporary. Her employment was terminated that month without severance. Barbieri thus filed this action, asserting six claims for relief. Defendants moved to dismiss, and during briefing Barbieri withdrew four of her claims, including a second ERISA misclassification claim and a fiduciary breach claim. That left Count II, a claim for denial of benefits under ERISA § 502(a)(1), and Count VI, a claim for wages and fringe benefits under Connecticut law. The court first resolved which plan documents it could consider. Barbieri conceded that the 401(k) plan and severance plan were integral to her complaint but said it was “impossible to tell” whether defendants’ offered copies were authentic. The court considered them, noting that “Plaintiff cannot both rely on these plan documents in the Complaint and in correspondence to the Court and argue that Defendants should be precluded from relying on these same plan documents.” The 401(k) plan excluded from “Covered Employee” status “any individual employed on a temporary, as needed, basis,” with examples such as summer interns and people hired for short-term projects or to fill in for absent employees. Barbieri argued that the phrase turned on the facts of the work, while the defendants said it referred to anyone classified as temporary in an employment contract. The court found that the plan was ambiguous as applied to Barbieri, that her reading was reasonable, and credited her allegations of three-and-a-half years of continuous work doing “everything a full-time permanent employee on the Product Marketing team did.” Defendants’ motion was thus denied as to the 401(k) plan. Barbieri’s claim for severance benefits was less successful. Section 2.8 of the severance plan excluded anyone who performed services on a temporary or contract basis, “including, but not limited to, any individual categorized by the Company as a temporary employee, seasonal worker, an intern or individual with an identified employment end date.” Barbieri argued that the “identified employment end date” clause modified every item in the list, but the court disagreed. The only reasonable interpretation excluded anyone categorized as a temporary employee, and the key employment documents did just that. Thus, Barbieri was not a participant, and her claim for severance benefits failed. As for the stock purchase plan, it excluded only employees working 20 hours or less per week or five months or less per year, and 5 percent stockholders, so it did not exclude temporary employees as the defendants claimed, and the court declined to consider their reply brief argument that she never formally applied. Barbieri likewise stated plausible claims under the paid time off and vacation leave policies, which no party had supplied and which the defendants had identified no provision excluding temporary employees from. Finally, the court rejected Barbieri’s claim for wages and fringe benefits under Connecticut law. The relevant law addresses only fringe benefits payable on termination, and the complaint did not allege that any policy except for the severance plan provided for such payment. (The court did not reach preemption but noted that the defendants’ preemption argument “completely contradicts” their assertion that the plans were not ERISA plans.) As a result, while defendants knocked out some of Barbieri’s claims, her ERISA benefits claim under the 401(k) plan, stock purchase plan, and the paid time off and vacation leave policies will proceed.

Kijewski v. TIAA, No. 25-CV-01779 (JAV), 2026 WL 2944364 (S.D.N.Y. Sept. 30, 2026) (Judge Jeannette A. Vargas). Peter K. Kijewski, proceeding pro se, sued Teachers Insurance and Annuity Association of America (TIAA), The Vanguard Group, Inc., BNY Pershing, and others over penalties the IRS allegedly imposed when he failed to take required minimum distributions (RMDs) from his retirement accounts. The accounts were caught up in a contentious New York divorce proceeding with Kijewski’s ex-wife, in which the state court entered restraining orders barring the parties from dissipating retirement accounts that were potential marital assets. (Pursuant to that action, TIAA froze his accounts and ceased distributions until it received a signed court order or a qualified domestic relations order, and in 2021 it released the hold and paid him the suspended RMDs after no such order arrived. Vanguard restricted his rollover IRA, and the state court later ordered it to issue his RMDs for 2018 through 2023.) Kijewski also sued his ex-wife and the two attorneys who represented her, alleging among other things “fraud” in their fee applications and a failure to steer their client toward a “prompt” settlement. Defendants moved to dismiss under Rules 8, 9, 12(b)(1), and 12(b)(6). Kijewski’s complaint asserted claims under ERISA, but they were difficult for the court to decipher. The court noted that the complaint “is 466 pages in length and consists of 747 paragraphs,” “contains no narrative account of events,” and “quotes at length from various documents, including court orders, court filings, correspondence, without providing any context. Many of the paragraphs are incomprehensible.” The court found that Kijewski violated Rule 8(a)(2), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief,” because it was not evident which acts by which defendants formed the basis of any of his claims. The next question was whether to grant leave to amend. Defendants argued futility under the domestic relations exception and abstention doctrines. The court held that the exception, which is limited to diversity cases that seek a divorce, support, or custody decree, did not deprive it of jurisdiction because Kijewski asserted claims under ERISA and thus presented a federal question. Abstention was potentially implicated, but the court could not conclude that the claims merely sought to redistribute marital assets or challenge state court orders, given that it lacked the state court orders and could not tell whether they required the account freezes or barred distributions throughout the relevant period. For the same reason, the court could not determine whether the Rooker-Feldman doctrine applied. As a result, the court allowed Kijewski to replead, but excluded his claims against his ex-wife’s attorneys, noting that “an attorney does not owe a duty of care to an adversary.” The claims against them were dismissed with prejudice.

Third Circuit

Clark v. DaVita Inc., No. 26-0023, 2026 WL 2958355 (E.D. Pa. Oct. 1, 2026) (Judge Karen S. Marston). Joy Lucretia Clark worked for DaVita Inc. as a Patient Care Technician and participated in its ERISA-governed employee benefits plan. After developing serious medical conditions, she took a medical leave of absence that DaVita approved as an Americans with Disabilities Act accommodation through December 31, 2025. She had not elected long-term disability coverage, so the leave was unpaid. Clark alleged that DaVita later “processed her employment as terminated” for failing to provide sufficient information about the expected length of her leave, but that the termination notice was returned as undeliverable and DaVita reinstated her, with a case manager writing that “the system views it as never having happened.” Clark also alleged that she had difficulty obtaining benefits records and information from DaVita, Prudential Insurance Company of America, which issued or administered group insurance benefits, and Alight Solutions LLC, which provided plan recordkeeping and administrative services. As of now, it appears Clark “has remained on approved unpaid ADA leave because of her medical condition and has not returned to work, and she has continued participating in the leave administration process.” Clark filed this pro se action against DaVita, Prudential, and Alight. In June of 2026, the court dismissed the original complaint on screening under 28 U.S.C. § 1915(e)(2)(B)(ii), dismissing Counts V and VI (sufficiency of review and equitable relief) with prejudice, and Counts I through IV without prejudice, and with leave to amend. The court also ordered Clark to show cause why she should not be enjoined from filing certain cases in the future, given that she had filed eleven civil actions in the Eastern District of Pennsylvania within fifteen months, none of which had survived screening. (We covered this ruling in our June 17, 2026 edition.) Clark responded to the order to show cause and filed an amended complaint asserting four counts: failure to disclose plan documents, a claim for a declaration of her rights to benefits, breach of fiduciary duty, and a request for equitable relief. The court remained unimpressed. On the disclosure claim in Count I, the court noted that Clark identified only one written request, and that DaVita’s production came less than thirty days later. “From her own list, it appears that DaVita produced everything that she asked for.” Count I was therefore dismissed with prejudice. Count II sought a “clarification of rights” under the plan without identifying any plan provision, any benefit determination by an administrator, or any basis for the claim. The court observed that Clark still had not alleged that she followed the appeal process for the plan, instead alleging that she “sought clarification.” However, “the statement that she ‘sought clarification’ is not the equivalent of exhaustion.” Nor did Clark plausibly plead futility. The court dismissed Count II without prejudice to Clark pursuing available remedies outside of court, but without leave to amend because further amendment would be futile. The breach of fiduciary duty claim in Count III failed because Clark did not allege facts about the plan’s provisions or the duty owed to her, did not identify the breach, and did not allege any loss to the plan. Count IV, for equitable relief, was a “repackaged version” of the count the court had previously dismissed with prejudice and was dismissed on that basis. As for the order to show cause, the court found exigent circumstances in Clark’s eleven “groundless” filings in fifteen months. The court noted that even though it had warned her in another case that continued abuse could lead to denial of in forma pauperis status, she subsequently filed four more cases in the space of two months. Her response to the show cause order, asserting that she “filed each action based upon a genuine belief that her legal rights have been affected,” did not sway the court. As a result, Clark was enjoined for two years “from filing new civil, non-Social Security or non-habeas matters on an in forma pauperis basis unless she includes with her complaint and in forma pauperis application (1) a certification indicating that the claims she seeks to present have arguable merit (2) that is signed by a licensed attorney, and (3) includes that attorney’s bar number and contact information.”

Fifth Circuit

Dukes v. Sun Life Assurance Co. of Canada, No. 25-623-EWD, 2026 WL 2963507 (M.D. La. Sept. 30, 2026) (Magistrate Judge Erin Wilder-Doomes). Kevin Dukes, who is incarcerated and proceeding pro se, sued Sun Life Assurance Company of Canada in Louisiana state court for long-term disability benefits under a policy issued by Sun Life to his former employer, IRISNDT Inc. His complaint did not mention ERISA and claimed $725,618 in damages, plus penalties and fees. Sun Life removed the case to federal court, asserting federal question jurisdiction based on ERISA, and, alternatively, diversity jurisdiction. Previously, the court denied Dukes’s motions to remand and for sanctions, and granted Sun Life’s motion to dismiss his state law claims as preempted by ERISA, without leave to amend. (We covered this ruling in our December 17, 2025 edition.) Dukes followed up with three motions: one styled as a motion for reconsideration and for leave to file a First Amended Complaint, which attached a proposed pleading asserting ERISA claims under § 502(a)(1)(B) and § 502(a)(3); a “Jurisdiction-First Motion for Determination of Subject-Matter Jurisdiction”; and a motion for limited jurisdictional discovery seeking the policy, plan description, and related documents. Sun Life opposed all three, arguing among other things that the proposed amendment recast Dukes’s state law contract claim, that the § 502(a)(3) claim was unsupported, and that Dukes was pursuing the amendment in bad faith or with a dilatory motive. The court quickly disposed of the jurisdictional motions. Whether ERISA applies was “irrelevant” because the court independently had diversity jurisdiction for the reasons given in its December ruling, and Dukes’s position was in any event inconsistent with his own motion to amend, which sought to assert claims under ERISA. Jurisdictional discovery was unnecessary because the court’s case management order already required Sun Life to file the plan, the summary plan description, and the administrative record. The court also found that Dukes did not truly seek reconsideration, as the December ruling barred only further amendment of the state law claims. As for leave to amend, the court allowed Dukes to plead a § 502(a)(1)(B) claim. The motion came less than a month after the dismissal ruling, no scheduling order deadlines were in place, Dukes had not previously amended, and Sun Life identified no undue prejudice, particularly because that claim was the basis of its own removal. The court gave little weight to Sun Life’s concern that Dukes was recasting his dismissed contract claims, and it rejected the argument that the forthcoming administrative record made amendment pointless. The court did observe that Dukes’s “motive for originally filing the Petition that fails to mention ERISA does seem like gamesmanship under the circumstances,” but because he now accepted that ERISA governs, it found no bad faith or dilatory motive. Dukes’ § 502(a)(3) claim did not fare as well. The court explained that § 502(a)(3) is a “catchall” provision that acts “as a safety net, offering appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy,” and is designed to prevent claimants from “repackag[ing]” benefit claims as breach of fiduciary duty claims. Here, Dukes’s proposed second cause of action alleged that Sun Life breached duties of loyalty and prudence by failing to provide a full and fair review, misapplying an “incarceration-related limitation or exclusion,” failing to consider his Social Security disability determination, and ignoring a written demand. The court found these allegations to be “exactly the type of attempt to repackage a denial of benefits claim as a breach of fiduciary duty claim courts have cautioned against.” Dukes’s request for an “equitable surcharge” did not change the result, as “the label used is not controlling”; a surcharge to compensate for losses caused by fiduciary breaches “would be the equivalent of compensating Plaintiff for the lost LTD benefits.” As a result, Dukes will be allowed to bring a claim under § 502(a)(1)(B), but all of his other arguments were rejected.

Provider Claims

Second Circuit

Jay Kripalani M.D., P.C. v. United HealthCare Group, No. 2:24-cv-5671 (NJC) (JMW), 2026 WL 2924534 (E.D.N.Y. Sept. 29, 2026) (Judge Nusrat J. Choudhury). Dr. Jay Kripalani, an out-of-network provider, performed emergency medical services on a patient identified as K.R., a Florida resident covered by a self-funded health plan maintained by K.R.’s employer and administered by United HealthCare Group. Kripalani billed usual and customary charges of $1,536,884. After several rounds of telephone negotiations, United Healthcare made what Kripalani called a “random and arbitrary payment” of $15,910.70, leaving Kripalani to seek the remainder in this action alleging both ERISA and state law claims. United moved to dismiss, and the court referred the motion to a magistrate judge, who recommended that the motion be granted. Both sides objected to portions of the report, and this order was the result. First, on Kripalani’s ERISA claim, the court held that it could consider the plan when evaluating United’s standing challenge because the complaint, which referenced the plan more than seven times and premised the claim on United’s status as administrator, made the plan integral to the pleading. That plan contained an anti-assignment provision stating that rights and benefits “cannot be assigned, sold, or transferred to a third party, including your health care provider,” that “[a]ny purported assignment of rights or benefits is void,” and that the claims administrator’s direct payment to a provider “does not create an assignment of benefits and it will not constitute a waiver” of the provision. Kripalani conceded that he was neither a participant nor a beneficiary, and thus his standing depended on holding a valid assignment from his patient and a waiver of the plan’s anti-assignment clause. The complaint alleged neither. Even crediting Kripalani’s argument that he told United he was an assignee and that United never objected, the court held that this did not plausibly allege a “clear and unmistakable” waiver. Kripalani’s ERISA claim was therefore dismissed under Rule 12(b)(1). Turning to Kripalani’s unjust enrichment claim, the court agreed with the magistrate that it could exercise diversity jurisdiction, given the parties’ diverse citizenship and the more than $1.5 million at stake, but concluded that ERISA preempted the claim. The claim, the court reasoned, “not only relates to the Plan but is rooted in it,” because the complaint alleged that K.R. was insured by a self-funded plan administered by United and that United “‘is wrongfully in possession of the Amounts Due’ because of its obligation to pay healthcare providers on behalf of plan beneficiaries.” In short, “Kripalani would not have a claim for unjust enrichment without the Plan.” The court also rejected Kripalani’s argument that a complaint cannot both fail to state an ERISA claim and be preempted by ERISA, pointing to cases from the district that had ruled in precisely that manner. Although the report recommended dismissal with prejudice, the court granted leave to amend under Rule 15(a)(2). It acknowledged that it was “not clear” that Kripalani could cure the lack of standing or plead an unjust enrichment claim untethered from the plan, but reasoned that courts should generally permit amendment at least once after articulating their substantive concerns. Kripalani was warned, however, that he “is unlikely to be afforded any further opportunity to amend absent unforeseen and extraordinary circumstances.”

Fifth Circuit

Methodist Healthcare Sys. of San Antonio, Ltd., LLP. v. Community Ins. Co., No. 3:25-cv-01615-E, 2026 WL 2969612 (N.D. Tex. Oct. 1, 2026) (Judge Reed O’Connor). A group of Texas acute care hospital systems, led by Methodist Healthcare System of San Antonio, have contracts with non-party Blue Cross and Blue Shield of Texas (BCBSTX). These contracts set the terms and rates for treating patients covered by Blue Cross and Blue Shield plans across the country, including patients insured by out-of-state Blue licensees through the BlueCard Program. Under that program, when a subscriber insured by a “Home Plan” in one state receives care in another state, the local “Host Plan” reviews the claim and prices it under its provider contract, and the Home Plan makes the final coverage determination and pays. Community Insurance Company d/b/a Anthem Blue Cross and Blue Shield (Anthem), the Blue licensee for Ohio, was the Home Plan for nine subscribers who received treatment at the Texas hospitals. The hospitals alleged that (1) Anthem is bound by the agreements as an affiliate of BCBSTX and through its participation in the BlueCard Program, (2) Anthem dealt directly with the hospitals rather than through BCBSTX, and (3) Anthem represented the hospitals as in-network providers on its website. The subscribers assigned their claims to the hospitals, which sued Anthem in the Northern District of Texas, asserting five counts under ERISA and state law. Anthem moved to dismiss under Federal Rule of Civil Procedure 12(b)(2), asserting lack of personal jurisdiction. The parties agreed that the court had nationwide personal jurisdiction over the ERISA count under 29 U.S.C. § 1132(e)(2), so the dispute concerned whether the court could exercise personal jurisdiction over the state law claims, either directly through specific jurisdiction or through pendent jurisdiction attached to the ERISA claim. The court acknowledged Fifth Circuit cases reflecting the rule that “[i]nsurance companies do not subject themselves to specific jurisdiction by simply participating in a national insurance program such as the [Blue Card Program] that pays hospitals when their insured gets treatment at an out-of-state hospital.” However, the court found these authorities distinguishable because the hospitals alleged that Anthem “insures and/or administers health plans that cover Texas residents” and that the Texas residents received care in Texas. Along with Anthem’s website listing of Texas hospitals as in-network, the court concluded that Anthem purposefully directed its activities at Texas, holding that parties who “reach out beyond one state and create continuing relationships and obligations with citizens of another state” are subject to regulation and sanctions there. In short, “When an insurance company takes on the continuing responsibility of insuring residents of another state, that state has specific jurisdiction over claims arising out of that contact.” As for pendent jurisdiction, the court explained that a state law claim must share a “common nucleus of operative fact” with the federal claim, and agreed with Anthem “in part” that the common thread among the claims, namely that all of the subscribers were insured by Anthem, was not enough. The court noted that plaintiffs’ claims involved four hospitals and nine subscribers, each with a separate health plan. The court reasoned that the hospitals could establish a common nucleus for state law claims assigned by the same subscriber who assigned the ERISA claim, because those claims would arise from the same patient, the same hospital, and the same treatment. The court would not exercise pendent jurisdiction over claims from subscribers who did not assign an ERISA claim, so any such claims would have to rest on independent specific jurisdiction. Finally, the court agreed with Anthem that the complaint was defective because it did not distinguish between claims arising under ERISA-governed plans and those arising under plans exempt from ERISA, or identify which subscribers were Texas residents. The court gave plaintiffs leave to amend, with instructions, for each claim, to allege whether jurisdiction rests on specific jurisdiction based on Anthem’s insuring of Texas residents or on pendent jurisdiction tied to a subscriber’s ERISA claim.

Retaliation Claims

Seventh Circuit

Alwin v. Gypsum Mgmt. Supply, Inc., No. 26-C-224, 2026 WL 2937515 (E.D. Wis. Sept. 30, 2026) (Judge William C. Griesbach). Gabriel Alwin, proceeding pro se, alleges that he underwent emergency surgery, was placed on Family and Medical Leave Act (FMLA) leave, and was approved for short-term disability benefits. Shortly after his short-term disability period ended and while he remained medically disabled and benefit-eligible, his employer terminated him under a “three-day no-call/no-show” policy, which he alleged was inconsistent with past practice because the company knew he was on medical leave and never tried to contact him. His union, Teamsters Local Union No. 200, declined to pursue his grievance. As a result, Alwin brought this action against his employer (through three entities: Gypsum Management Supply, Inc., Badgerland Supply, and Tamarack Materials) and the union, asserting a “hybrid § 301 claim” under the Labor Management Relations Act, an FMLA claim, a Wisconsin workers’ compensation retaliation claim, and, against the company defendants, a claim under ERISA § 510 for interfering with his benefits. Defendants moved to dismiss for failure to state a claim. On the ERISA claim, the court stated that a § 510 plaintiff “must establish more than a loss of benefits” and must demonstrate that the employer acted with the specific intent of preventing or retaliating for the use of benefits, meaning a “desire to frustrate attainment or enjoyment of benefit rights.” Alwin’s only allegations were that he was receiving short-term disability benefits and was eligible for long-term disability and continued health and retirement benefits, that defendants knew this, and that they “terminated Plaintiff for the purpose of interfering with his attainment of ERISA-protected benefits.” The court found these to be “bare legal conclusions,” with no factual allegations supporting an inference that defendants intended to deprive him of benefits. The court also noted that Alwin did not plead exhaustion of administrative remedies and did not respond to defendants’ exhaustion argument. However, it declined to decide whether exhaustion must be pleaded, citing a split among courts in the circuit, because the claim failed on the merits anyway. Plaintiffs’ other claims met the same fate. The hybrid § 301 claim was untimely under the six-month limitations period, because Alwin sued almost two years after the union’s letter and did not plausibly plead grounds for equitable tolling. The FMLA claim failed because he did not allege eligibility, his own allegations showed he could not return to work well beyond twelve weeks, and he was terminated at least three months after his leave would have been exhausted. The workers’ compensation claim was dismissed because Alwin did not oppose dismissal, seemingly accepting that such a claim is best pursued with the Wisconsin Department of Workforce Development. In the end, the court granted the motions to dismiss but, because Alwin was proceeding pro se, gave him 30 days to file an amended complaint.

Statute of Limitations

Fourth Circuit

David B. v. Anthem Blue Cross & Blue Shield, No. 1:24-cv-01551 (PTG/IDD), 2026 WL 2924511 (E.D. Va. Sept. 29, 2026) (Judge Patricia Tolliver Giles). David B. sued on his own behalf and for his minor daughter, R.B., challenging Anthem Blue Cross and Blue Shield’s denial of coverage for her residential mental health treatment in 2021. Anthem, the insurer and claims administrator of his ERISA-governed benefit coverage, denied the treatment as not medically necessary in letters dated February 15, March 2, and March 15, 2021, and denied his appeal in a final letter dated August 26, 2021. Each letter told him that he had the right to bring a civil action under § 502(a)(1)(B) “within one year, unless your plan provides for a longer period,” and to “[c]heck your benefits booklet or plan documents to see if you have more time.” David B. then sought external review through the Virginia Bureau of Insurance, which upheld the denial in a report dated January 27, 2022. He filed suit in the District of Utah on February 9, 2024, asserting a claim for benefits under ERISA § 502(a)(1)(B) and a Parity Act claim under § 502(a)(3). The case was transferred to the Eastern District of Virginia, which denied Anthem’s partial motion to dismiss, and the parties cross-moved for summary judgment. Review was for abuse of discretion because the policy gave Anthem “complete discretion” to administer benefits, including by determining medical necessity and construing the contract. The court first examined the threshold question of whether the claims were time-barred. Two provisions of the certificate were at issue. The “Legal Action” subsection of the general provisions barred any action brought “more than three years after the end of the 90-day period that proof of loss was required to be filed.” Meanwhile, the “Limitation of Actions” subsection of the appeal procedures provided that, for an ERISA plan, the member has “a right to bring a civil action under Section 502(a) of ERISA within one year of the appeal decision.” David B. argued that the two provisions conflicted, the certificate was therefore ambiguous, and contra proferentem required applying the three-year period. Anthem argued that both provisions applied because they are triggered by different events, so a plaintiff must satisfy both. The court agreed with Anthem, employing the Tenth Circuit’s approach in J.H. v. Anthem Blue Cross Life & Health Ins. Co., which construed nearly identical language. (Your ERISA Watch covered J.H. in our May 28, 2025 edition.) The three-year provision warns the insured to sue within three years of when proof of loss had to be furnished, and the one-year provision “simply adds another deadline,” so a suit is barred “[i]f the insured files suit after either deadline.” The court rejected the argument that only one limitations provision can govern a dispute, and held that the language was not ambiguous “just because the Plan imposes two conditions.” As the court put it, “the provision is meant to limit suits, not invite them. If the two limitations provisions were interpreted to give Plaintiff two different windows for filing suit, there would be no point in having a one-year limitations period, since the three-year provision would always supersede it.” The court added that the result would be the same even if the certificate were ambiguous. Contra proferentem does not apply where, as here, the plan gives the claims administrator discretion to interpret its terms and review is deferential. The one-year provision applies by its terms to § 502(a) actions and Anthem’s letters had pointed him to the one-year period and told him to consult his plan documents. In a footnote, the court rejected the argument that the letters mentioned only § 502(a)(1)(B), reasoning that the certificate covers all § 502(a) claims and that David B. did not argue he relied on the letters. In another, it held that even if the external reviewer’s 2022 report were treated as the final determination, the suit would still be untimely. Anthem’s motion for summary judgment was thus granted, and David B.’s was denied.

Fifth Circuit

Thomas v. Amazon.com Services, Inc., No. 4:21-CV-02997, 2026 WL 2934940 (S.D. Tex. Sept. 29, 2026) (Judge Drew B. Tipton). Michel Thomas worked as an associate at an Amazon warehouse near Houston and was covered by the AmazonTXCare Employee Injury Benefit Plan, for which Amazon was the plan administrator and Anchor Risk Management the claims administrator. He suffered three work injuries in 2019 and sought benefits for each. Anchor terminated his benefits for the first injury after an independent medical examination (IME) found age-related degeneration and no need for further treatment. It denied his second claim on the ground that he had only aggravated the first injury. It denied the third claim as untimely. Amazon fired Thomas in 2019 and he brought this pro se action in 2021, claiming benefits under ERISA § 502(a)(1)(B) and penalties under § 502(c) for failure to give him the plan or a summary plan description. The court held a bench trial and this order represented the court’s ruling. Amazon argued that the denial claims were barred by Article 6.13 of the plan, which required suit within one year of the final appeal decision. The court held that the one-year period was reasonable. However, it was unenforceable because Thomas’s claims were for disability benefits, and 29 C.F.R. § 2560.503-1(j)(4)(ii) requires final disability determinations to disclose the contractual limitations period and “the calendar date on which the contractual limitations period expires,” and the plan must “strictly adhere” to the claims rules. On the first injury, the record did not contain the final denial letter, so there was no evidence to show that it disclosed either the period or its expiration date, and the third injury letter disclosed neither. Thus, the court declined to enforce the period. The second injury was “narrower,” because that letter did state the one-year period but omitted the calendar date. No circuit had decided that question, but the regulation treated the two as “distinct requirements” and thus the court concluded that both must be included in order to be enforceable. Because the plan’s period was unenforceable, the court applied Texas’s four-year contract limitations period, under which Thomas’s suit was timely. On the merits, the court reviewed Amazon’s determinations for abuse of discretion. The termination of benefits for the first injury stood. The IME doctor’s report constituted “substantial evidence,” and Amazon could credit it over the contrary views of Thomas’s urgent care clinic. Thomas argued that the IME doctor was not an “Approved Provider,” but the plan lets the administrator approve providers and it was not unreasonable to read “care or treatment” to include the IME. The denial for the second injury was an abuse of discretion. It rested on the absence of a new “Accident,” but Articles 4.5 and 4.6 cover injuries from “an Accident, Occupational Disease and/or Cumulative Trauma,” and Anchor’s own adjuster described the condition as “more of a cumulative-type problem.” Treating the lack of an accident as dispositive effectively read one of the plan’s covered categories out of the plan. Thomas nevertheless recovered nothing on that claim, because he offered no evidence of unpaid medical expenses or of disability benefits beyond the short-term benefits he received. The denial for the third injury was upheld because Thomas’s own report said he was injured eleven days before he reported it, and Article 3.3 required reporting within three days. On the document claim, the court held that only Amazon, as the designated plan administrator, could be liable under § 1132(c). Thomas requested the plan in writing on July 8, 2019, and Anchor’s adjuster emailed it as an attachment on July 30, but the court credited Thomas’s testimony that he could not open the attachments. Under 29 C.F.R. § 2520.104b-1, administrators must use measures “reasonably calculated to ensure actual receipt.” Amazon did not mail the plan within thirty days or show that the email satisfied the electronic delivery safe harbor, and the adjuster used no safeguard and never followed up. The court declined to award a penalty for the summary plan description because Thomas never made a written request for it. Finding negligence but no bad faith, a substantial delay, and prejudice because the missing plan impaired his ability to challenge the second denial, the court awarded $6,050.

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

Highlights include:

  • The result of a six-day bench trial challenging Trader Joe’s management of its 401(k) plan, with both sides coming away winners (and losers) (Stephan v. Trader Joe’s Co.);
  • A decision allowing a putative class action to proceed against Blue Shield of California for its alleged “ghost networks” of mental health providers (Roiz v. Blue Shield);
  • Three cases questioning the use of forfeitures of unvested retirement plan contributions (Stephan v. Trader Joe’s, Cortez v. Rithm Capital, and Lapko v. United Wholesale Mortgage – plaintiffs went 1-2);
  • Four disability benefit cases, two involving the very unpleasant diagnosis of cyclic vomiting syndrome (Macpeak v. Unum, Klusmann v. AT&T, Oliver-Smith v. Lincoln, and Young v. Aetna – plaintiffs went 3-1);
  • Yet another case holding that the No Surprises Act does not bestow a private right of action on providers to enforce dispute resolution awards under the Act (Cal Spine v. Microsoft);
  • A case addressing whether a life insurance beneficiary can obtain equitable relief under ERISA in the form of monetary surcharge (Vigil v. Taos Ski Valley; spoiler: yes);
  • A decision slamming United Healthcare for “completely ignoring” pandemic conditions in misclassifying emergency treatment (Saucedo v. UnitedHealthcare);
  • And last, but certainly not least, a case that asks whether falling and hitting your head is an “accident” if it’s preceded by having a stroke (Tegu-Watkins v. Hartford; spoiler: no).

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

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

Arbitration

Fifth Circuit

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

Breach of Fiduciary Duty

First Circuit

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

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

Third Circuit

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

Fifth Circuit

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

Sixth Circuit

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

Tenth Circuit

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

Class Actions

Sixth Circuit

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

Ninth Circuit

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

Disability Benefit Claims

Third Circuit

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

Sixth Circuit

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

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

Eighth Circuit

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

Life Insurance & AD&D Benefit Claims

Sixth Circuit

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

Eleventh Circuit

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

Medical Benefit Claims

Eighth Circuit

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

Ninth Circuit

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

Tenth Circuit

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

Pension Benefit Claims

Sixth Circuit

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

Tenth Circuit

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

Provider Claims

Third Circuit

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

Ninth Circuit

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

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

Retaliation Claims

Sixth Circuit

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

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

Statute of Limitations

First Circuit

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

East Coast Advanced Plastic Surgery, LLC v. Cigna Health & Life Ins. Co., No. 25-2204, __ F.4th __, 2026 WL 2751786 (2d Cir. Sept. 17, 2026) (Before Circuit Judges Leval and Park, and District Court Judge Jed S. Rakoff)

This week’s notable decision is yet another in a recent line of cases addressing the No Surprises Act (NSA), which was enacted by Congress in 2020 and took effect for benefit plan years beginning in 2022. The NSA effected changes to three parts of the U.S. Code: (1) ERISA, (2) the Internal Revenue Code (IRC), and (3) the Public Health Service Act (PHSA).

The purpose of the law is to protect patients from large, unexpected medical bills which they might receive after undergoing emergency care, or treatment by an out-of-network provider at an in-network facility. In disputes over payment for such treatment, the NSA essentially takes the patient out of the equation. It prohibits providers from balance-billing patients, i.e., billing the patient for the difference between the charged fee and the amount paid for by insurance. Instead, it forces providers and insurers to negotiate the dispute, and failing that, requires binding independent dispute resolution (IDR) arbitration.

Currently, neither insurers nor providers are happy with this arrangement. Insurers complain that IDR arbitrators rule in favor of providers too often and their awards are too high. Providers have a different complaint, discussed by the Second Circuit in today’s highlighted decision: although IDR awards are supposed to be “binding,” and “must be paid” within 30 days, many insurers simply refuse to comply.

Insurers can get away with this because when providers file lawsuits, the majority of federal courts have held that the NSA does not give providers a private right of action to enforce their IDR awards. In 2025, the Fifth Circuit confirmed this interpretation of the statute in Guardian Flight, L.L.C. v. Health Care Serv. Corp. (The Supreme Court declined to grant certiorari in January of this year.) Would the Second Circuit agree?

The plaintiff was East Coast Advanced Plastic Surgery, LLC (ECAPS), which performs breast reconstruction surgery for cancer patients who have undergone mastectomies. ECAPS was out of network with Cigna Health and Life Insurance Company, but it did have a contract with MultiPlan, Inc. (MPI), which assembles provider networks and sells access to insurers such as Cigna.

ECAPS’ contract with MPI obligated Cigna to pay ECAPS a “Contract Rate” equal to 85% of its billed charges for services to Cigna members. According to ECAPS, it “provided medical services to members of Cigna-administered plans but, in the ‘overwhelming majority’ of cases, Cigna paid ECAPS far less than the 85% Contract Rate.” ECAPS contends that it “invoked the IDR process and obtained IDR awards against Cigna in amounts exceeding $3 million,” but despite these awards, “Cigna has made no payments to ECAPS.” For its part, Cigna contends that “ECAPS engaged in fraudulent billing practices, causing Cigna to overpay by $8.5 million for certain ECAPS services.”

Both parties filed suit against each other, and the actions were consolidated. Cigna sued ECAPS under ERISA, the Declaratory Judgment Act, and Connecticut law for fraud, negligent misrepresentation, unjust enrichment, and conversion. Meanwhile, ECAPS sought a declaratory judgment that Cigna had violated its NSA obligation to pay the IDR determinations within 30 days, that Cigna owed ECAPS the full amount of those determinations, and that ECAPS was entitled to equitable and monetary relief.

The district court dismissed ECAPS’s complaint for failure to state a claim, holding that the NSA contains no express or implied private right of action to enforce IDR awards and that the Declaratory Judgment Act does not supply an independent cause of action to fill that gap. (Your ERISA Watch covered this ruling in our August 20, 2025 edition.) ECAPS appealed and this published decision from the Second Circuit was the result.

The appellate court began by noting that “Congress determines who may sue to enforce federal law,” and that when Congress does allow a private right of action to enforce its laws, “it usually does so expressly.” The Supreme Court has “strictly curtailed the authority of the courts to recognize implied rights of action”; such rights “are disfavored.”

Under those ground rules, the court examined the NSA to determine first whether its text “uses rights-creating language, meaning language that focuses on the individuals protected rather than the person regulated.” Second, it considered “whether the statute’s methods of enforcement manifest an intent to create a private remedy, as opposed to empowering agencies to enforce their regulations.”

The court found that while the NSA does have rights-creating language in the form of “shall pay” provisions, “that is not conclusive”: “it must also manifest an intent to provide for private enforcement.” The court emphasized that while the NSA incorporated the Federal Arbitration Act’s provision for vacating awards, it did not incorporate the FAA’s provision for confirming awards, unlike in other statutes. This omission “strongly suggests that Congress did not intend to create a private right of action to enforce IDR awards.”

The statutory scheme of the NSA also cut against a private right of action. The Second Circuit explained that the NSA has an “interlocking federal and state administrative scheme to enforce the NSA.” This scheme includes three federal agencies: the Department of Labor (under ERISA), the Treasury Department (under the IRC), and the Department of Health and Human Services (under the PHSA). These three agencies can sue or impose excise taxes on private employer-sponsored plans that violate the NSA and impose civil monetary penalties on non-compliant state and local governmental plans. States may also independently enforce the NSA against insurers.

According to the Second Circuit, this broad sweep of enforcement power “reflect[s] ‘Congress’s policy choice to enforce the [NSA] through administrative’ action, ‘not a private right of action.’” Quoting the Supreme Court, the court held that “[t]he express provision of one method of enforcing a substantive rule suggests that Congress intended to preclude others.”

The court quickly marched through each of ECAPS’s seven counterarguments and rejected them. First, ECAPS argued that the NSA does not expressly give the Labor or Treasury Departments enforcement power over private employer plans. However, the court found this irrelevant because “ERISA and the Internal Revenue Code, each of which the NSA amends, already authorize enforcement by those agencies.”

Second, ECAPS pointed to “minimal” efforts by the Department of Labor to enforce IDR awards. The court responded that “the relevant question is whether Congress authorizes agency enforcement, not how actively the agency exercises its authority.”

Third, ECAPS pointed to Treasury regulations that allow the department to waive enforcement, “[b]ut the fact that an agency may waive enforcement is not evidence of congressional intent to permit a private right of action.”

Fourth, ECAPS argued that Congress’ use of the term “binding” “is an[] indication of its intent to render them judicially enforceable by providers.” However, the Second Circuit stated that “this begs the question because the provision making the IDR determination ‘binding upon the parties involved’ says nothing about who may enforce it.”

Fifth, ECAPS attempted to draw analogies to the Tucker Act (which waives federal sovereign immunity for certain claims) and civil rights case law under 42 U.S.C. § 1983. The Second Circuit found both inapposite. It explained that Tucker Act cases turn on sovereign immunity and a “money-mandating inquiry,” which was not present here, and § 1983 plaintiffs “do not have the burden of showing an intent to create a private remedy because § 1983 generally supplies a remedy for the vindication of rights secured by federal statutes.”

Sixth, ECAPS contended that refusing to allow a private right of action “would ‘render the incorporation of section 10 [regarding vacatur] of the FAA superfluous and absurd.’” It argued there was no point in letting a losing party seek vacatur if no one could be forced to pay in the first place. The court disagreed, suggesting that both plans and providers might have incentives to seek vacatur in various circumstances.

Seventh, ECAPS argued that denying a private remedy “renders meaningless the entirety of the statutory IDR regime.” The court rejected this too, quoting the Fifth Circuit in Guardian Flight: “Agencies may enforce the IDR process, so the absence of a private right of action would not undermine the process. ‘Congress may have judged it better to have an administrative enforcement mechanism handle most award disputes instead of throwing open the floodgates of litigation.’”

Finally, having concluded that the NSA provides no implied cause of action, the court made quick work of ECAPS’s fallback theory that the Declaratory Judgment Act could independently support relief. The Second Circuit agreed with the district court that the Act “does not create an independent cause of action.”

As a result, the Second Circuit affirmed in full the dismissal of ECAPS’s complaint, dealing a blow to providers seeking judicial enforcement of their IDR awards. Now that two appellate courts have reached the same conclusion, it seems likely that enforcement pressure will shift back to the government. While the current dysfunctional Congress is one of the least productive in history, the relevant regulatory agencies have been active recently, issuing a final rule in June to overhaul the IDR process. Disputes over the NSA are likely to continue, however, and we will do our best to keep you updated on any relevant decisions.

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

Arbitration

Fourth Circuit

Wadood v. AT&T Technical Services Co., Inc., No. 1:25-cv-1512 (RDA/LRV), 2026 WL 2790270 (E.D. Va. Sept. 17, 2026) (Judge Rossie D. Alston, Jr.). Tameem Wadood, proceeding pro se, sued his former employer, AT&T Technical Services Co., Inc., alleging that after he was questioned by supervisors about his religion and national origin in 2023, he experienced disparate treatment, reassignment, exclusion from projects, downgraded evaluations, and eventual termination in 2025, with retaliation escalating after he filed human resources complaints in 2024. His operative complaint asserted claims for discrimination, retaliation, age discrimination, defamation, and interference with prospective employment. Wadood’s original complaint did not assert an ERISA claim. AT&T moved to compel arbitration, relying on a “Management Arbitration Agreement” (MAA) that Wadood had electronically signed as part of the company’s onboarding process. The MAA had carve-outs for certain claims, including ERISA claims. Wadood opposed AT&T’s motion and separately moved for leave to file an amended complaint, which would include a new claim under ERISA § 510. This claim alleged that “(i) he participated in Defendant’s 401(k) plan; (ii) he made contributions; (iii) ‘AT&T engaged in adverse actions timed to interfere with Plaintiffs attainment of benefits’; (iv) he was the subject of ‘[f]orced transfers, biased evaluations, and retaliatory documentation occurred near vesting milestones’; (v) Defendant failed to provide ‘accurate information regarding Plaintiffs retirement benefits upon separation’; and (vi) Defendant ‘acted with specific intent to interfere with his ERISA-protected benefits.’” AT&T opposed the motion, and the court resolved the motions from both sides in this order. The court quickly concluded that the MAA was a valid and enforceable contract under Virginia law, that it was not a contract of adhesion, that Wadood’s electronic signature bound him, and that the MAA’s broad arbitration clause covered all of the claims pleaded in the operative complaint. The court then turned to Wadood’s proposed amended complaint. First, the court found the proposed claim was based on facts that “were in his possession and are not newly discovered.” Furthermore, the amendment’s timing showed that it was calculated to manufacture an exception to arbitration: “Courts reject amendment where there is a purpose of avoiding arbitration.” Second, the court held that Wadood’s proposed § 510 claim was not plausible. His allegations that adverse employment actions were “timed to interfere” with his benefits and that AT&T acted with “specific intent” to interfere with his benefits were “vague and conclusory” and “not sufficient to meet Plaintiff’s burden” under the Supreme Court’s Twombly/Iqbal rules. The court thus denied Wadood’s motion for leave to amend and granted AT&T’s motion to compel arbitration, directing the parties to arbitrate under the MAA and staying the case pending the arbitrator’s decision. (In a footnote, the court apologized for the delay in its ruling, noting that “this Division has been inundated with hundreds of habeas applications each of which requires expeditious review and each of which involves an individual in custody who desires release. Indeed, to date, more than 3,000 civil cases have been filed in the Alexandria Division alone.”)

Breach of Fiduciary Duty

Eighth Circuit

O’Donnell v. Charter Communications, Inc., No. 4:25-CV-157-ZMB, 2026 WL 2694267 (E.D. Mo. Sept. 14, 2026) (Judge Zachary M. Bluestone). Telecom giant Charter Communications, Inc. sponsors a 401(k) Savings Plan funded by employee and employer contributions. The employee contributions vest immediately, but Charter’s matching contributions only vest after several years of service. When a participant leaves Charter before its matching contributions vest, the unvested contributions revert to a plan forfeiture account. From 2017 through 2024, the plan directed that “Assets in Accounts which are forfeited shall be used to pay Plan administrative expenses [before] reduc[ing] the Employer Contributions.” Despite that language, Charter instead prioritized the use of forfeited assets to offset its own matching contributions, using $189.5 million to reduce its contributions between 2020 and 2024 while plan participants were charged $40.9 million in administrative expenses. (In 2025, after this suit was filed, Charter amended the plan to permit forfeitures to offset employer contributions ahead of administrative expenses.) A group of former Charter employees and plan participants brought this putative class action on behalf of the plan to challenge Charter’s use of plan forfeitures. After consolidating two related suits and appointing interim class counsel, the case is finally at issue. Before the court was a complaint with six counts: three theories of breach of fiduciary duty, a violation of ERISA’s anti-inurement provision, and two prohibited transaction claims. The defendants are Charter as well as individual defendants Carolyn Wood and Paul Weber, who were identified as plan administrators. Defendants moved to dismiss for failure to state a claim. The court first dismissed the claims against the individual defendants without prejudice, holding that plaintiffs failed to allege any specific conduct, or even awareness, by Wood or Weber regarding the handling of forfeitures. Turning to the fiduciary duty claims against Charter, the court rejected Charter’s argument that they were a disguised denial-of-benefits action requiring administrative exhaustion. The court found that plaintiffs were not seeking individual benefits but instead sought plan-wide equitable relief under 29 U.S.C. § 1132(a)(3). On the merits, the court found that the plan unambiguously required forfeited assets to be applied to administrative expenses before offsetting Charter’s matching contributions, and that Charter’s contrary practice plausibly constituted a fiduciary breach of duty to act in accordance with the documents governing the plan. (The court reserved for later whether specific fees at issue, such as individual investment expenses, qualified as “administrative expenses” under the plan.) The court also allowed plaintiffs to proceed with their claims for breach of the duties of loyalty and prudence. It distinguished other cases dismissing forfeiture claims on the ground that the plans in those cases, unlike Charter’s, “either required or gave discretion to apply forfeitures to offset employer contributions in the first instance.” The court also rejected Charter’s argument that any resulting loss to the Plan was speculative, concluding that a shortfall in plan assets was a straightforward, non-speculative consequence of misapplying the forfeitures. The court reached a different result on plaintiffs’ anti-inurement and prohibited transaction claims, holding both failed “because Plaintiffs do not allege that the forfeited assets ever left the Plan.” The court acknowledged that some case law supported plaintiffs, but “the vast majority of courts to consider this issue have reached the opposite conclusion, at least where no assets have left the plan.” The court further held that the intra-plan reallocation of forfeitures did not constitute a “transaction” with a party in interest or a fiduciary under 29 U.S.C. § 1106, noting that if it were to accept plaintiffs’ theory, “any intra-plan transfer of funds to offset employer contributions – even if expressly permitted in a plan” would result in a prohibited transaction. The court thus granted in part and denied in part the motion to dismiss, and the case will continue.

Ninth Circuit

Perez v. Liberty Mutual Group, Inc., No. 25-cv-08775-HSG, 2026 WL 2724923 (N.D. Cal. Sept. 15, 2026) (Judge Haywood S. Gilliam, Jr.). Lester Anthony Perez was a participant in the Liberty Mutual 401K Plan, a defined-contribution individual account plan sponsored by Liberty Mutual Group, Inc. and administered through the Liberty Mutual Retirement Committee. The plan is funded by employee contributions, which vest immediately, and employer contributions, which vest 50 percent after one year of service and fully after two years. Unvested employer contributions are forfeited when a participant has a break in service before vesting. Perez alleges that from 2020-24 Liberty and the Committee used forfeited employer contributions to offset their future contributions to the plan, rather than using them to help pay plan expenses for the benefit of plan participants. Perez filed this putative class action against Liberty and the Committee, asserting claims for breach of fiduciary duty, violation of ERISA’s anti-inurement provision, violation of ERISA’s prohibited transaction provision, and failure to monitor fiduciaries. Defendants moved to dismiss for failure to state a claim. The court included the plan document in its consideration because Perez’s claims relied on its terms and its authenticity was undisputed. The court dismissed the breach of fiduciary duty claim for two reasons. First, the court explained that a breach of fiduciary duty can only occur if there is an exercise of discretionary authority or control, but Section 5.1 of the plan required forfeited employer contributions to be used for future contributions: “Application of Forfeitures. All forfeitures shall be applied towards satisfying the amount of the Company Contributions for the Plan Year for which such amounts are forfeited, and for subsequent Plan Years until exhausted” (emphasis added). As a result, defendants had no discretion over how to allocate the forfeitures and thus there could be no breach of fiduciary duty. Second, the court held that even if defendants’ conduct was fiduciary in nature, Perez failed to allege that their use of the forfeitures violated any plan term or deprived him of any promised benefit. The court agreed with other courts holding that “‘ERISA does no more than protect the benefits which are due to an employee under a plan’… It ‘does not create an exclusive duty to maximize pecuniary benefits.’” The court also dismissed Perez’s anti-inurement and prohibited transaction claims. The court reasoned that because the forfeited contributions remained plan assets before and after being redirected, defendants’ “incidental benefit” from reduced funding obligations did not cause plan assets to inure to their benefit. As for the prohibited transaction claim, the court held that ERISA targets arm’s-length dealings with plan insiders that risk underfunding a plan, not an intra-plan reallocation mandated by the plan’s own terms. Finally, the failure-to-monitor claim failed because Perez identified no person or entity to whom defendants had delegated fiduciary responsibility, and because it was derivative of the fiduciary duty claim the court had already rejected. As a result, the court granted defendants’ motion to dismiss in full. The court noted that it was “skeptical that Plaintiff can cure the defects discussed above” because Perez’s theory “appears to fail as a matter of law,” but it chose to dismiss without prejudice.

Class Actions

D.C. Circuit

Whetstone v. Howard Univ., No. 23-2409 (LLA), 2026 WL 2797972 (D.D.C. Sept. 18, 2026) (Judge Loren L. AliKhan). Howard University established a defined benefit retirement plan in 1976. The plan’s default form of benefit is a single life annuity (SLA), but married participants typically receive a joint and survivor annuity (JSA). Under ERISA Section 205(d), a qualified JSA must be the “actuarial equivalent” of the SLA. To perform the conversion from an SLA to a JSA, the plan uses the 1984 Unisex Pension Mortality Table and a 7% interest rate. Stephen G. Whetstone, a retired plan participant who elected a JSA, contends that these actuarial assumptions were “antiquated” and understated his true benefit. Applying the Treasury Department’s preferred assumptions instead, he contends he should be receiving $17.99 more per month in benefits. Whetstone filed this putative class action in which he asserted three claims against Howard and its Retirement Plan Committee: (1) violation of the JSA actuarial equivalence requirement under 29 U.S.C. § 1055(d); (2) violation of ERISA’s definitely determinable benefit rule under 29 U.S.C. § 1102(b)(4); and (3) breach of fiduciary duty under 29 U.S.C. § 1104(a)(1). In 2024, the court granted defendants’ motion to dismiss in part, dismissing Count 2 as time-barred but allowing Counts 1 and 3 to proceed. (Your ERISA Watch covered this ruling in our September 18, 2024 edition.) The case was referred to a magistrate judge for mediation, and in May of 2025 the parties reached a settlement. The parties then negotiated an agreement, followed by Whetstone filing an unopposed motion for leave to file a second amended complaint, for preliminary class certification, for preliminary approval of the parties’ proposed $1.3 million settlement, and for approval of the form and method of notice to class members. In this order the court began by granting leave to file the second amended complaint, which added Linda Hutchins as a named plaintiff representing a second subgroup and conformed the class period and claims to the settlement. Applying Federal Rule of Civil Procedure 23(a), the court found numerosity satisfied by the roughly 1,788-member class, commonality satisfied because all class members were subject to the same actuarial assumptions and conversion methodology, typicality satisfied because Whetstone and Hutchins each represent one of the settlement’s two subgroups and their claims arise from the same allegedly unlawful methodology, and adequacy satisfied given the named plaintiffs’ active participation in the litigation and class counsel’s experience in complex ERISA class actions. The court further held that the class satisfied Rule 23(b)(1) because under subsection (A) individual suits by more than 1,700 class members risked inconsistent adjudications imposing incompatible standards of conduct on defendants, and under subsection (B), individual adjudications concerning plan-wide actuarial methodology would be dispositive of other class members’ interests. Turning to preliminary approval under Rule 23(e), the court explained that the settlement would allocate 75% of the net settlement to Subgroup A (class members with annuity start dates after August 17, 2017), distributed pro rata by each member’s calculated underpayment, and 25% to Subgroup B (class members with earlier start dates) distributed by current benefit size. The settlement also involved monthly benefit increases, retroactive lump-sum payments, requested attorney’s fees of up to one-third of the settlement fund, and $5,000 case contribution awards for each named plaintiff. The court found the settlement was the product of arm’s-length negotiation, noting three years of litigation, a contested motion to dismiss, discovery, mediation before the magistrate judge, and continued negotiation over expert analyses and participant data. The court noted that actuarial equivalence is a “largely unsettled” area of ERISA, citing the Sixth Circuit’s decision earlier this year in Reichert v. Kellogg Co., and that trial would likely require a “costly ‘battle of the experts’” over “highly technical” issues. The court found the settlement’s estimated recovery rates of approximately 30.8% for Subgroup A and 18.2% for Subgroup B were consistent with comparable ERISA actuarial equivalence settlements, including the 17% recovery approved in January of this year in Franklin v. Duke University. The court also found the litigation sufficiently developed for informed settlement, deferred assessment of the class’ reaction pending notice, and credited the shared view of experienced counsel on both sides that the settlement was fair and reasonable. As a result, the court granted Whetstone’s unopposed motion in full. The court directed the settlement administrator to send a class notice and asked the parties to propose dates for a final fairness hearing on or after December 18, 2026.

Disability Benefit Claims

First Circuit

Germana v. Hartford Life and Accident Insurance Co., No. 23-30065-MGM, 2026 WL 2823567 (D. Mass. Sept. 21, 2026) (Judge Mark G. Mastroianni). Scott A. Germana worked as a registered nurse for Trinity Health Corporation, which provided long-term disability benefits to its employees under a policy issued and administered by Hartford Life and Accident Insurance Company. Germana stopped working in 2018 at age 54, reporting abdominal pain and later spine-related conditions including thoracic and lumbar spondylosis. The policy defined disability as the inability to perform one’s own occupation during an elimination period and the following 24 months, followed by inability to perform “Any Occupation” thereafter. Hartford approved Germana’s claim in 2019 after an independent physician found he retained substantial functional capacity but nonetheless supported some restrictions, and it later obtained a labor market survey identifying multiple sedentary occupations Germana could perform once the Any Occupation standard took effect in October 2020. When Germana’s treating pain-management physician did not respond to requests for updated records, Hartford terminated Germana’s benefits for failure to furnish proof of loss, then reinstated benefits under a reservation of rights after receiving new records and an attending physician statement from Germana’s primary care physician. Hartford referred Germana’s file to an independent orthopedic surgeon who, after reviewing the record and speaking with Germana’s primary care physician, opined that Germana could perform sedentary work full-time with specified restrictions on sitting, standing, walking, lifting, and driving. Based on that opinion and a vocational employability analysis identifying suitable sedentary occupations, Hartford terminated Germana’s LTD benefits in 2021. Germana appealed, submitting additional medical records and a reference to a Social Security disability award without the underlying decision. Hartford referred the appeal to independent gastroenterology and pain-medicine physicians, both of whom found no objective support for functional restrictions, and upheld the denial in 2022. Nine months later, Germana’s counsel submitted a psychiatric evaluation, which Hartford declined to consider as untimely and outside the administrative record. (A magistrate judge later struck references to that report from the summary judgment record, along with Germana’s argument that Hartford’s reviewing physicians engaged in the unlicensed practice of medicine by evaluating his file without a Massachusetts license. Your ERISA Watch covered that ruling in our July 24, 2024 edition.) Germana then brought this action under 29 U.S.C. § 1132(a)(1)(B), and the parties filed cross-motions for summary judgment. Because the policy vested Hartford with discretionary authority, the court applied the arbitrary and capricious standard of review. Addressing Germana’s argument that Hartford’s denial letter failed to adequately explain what he needed to submit on appeal, the court held the letter satisfied ERISA’s notice requirements under 29 U.S.C. § 1133(1) and 29 C.F.R. § 2560.503-1(g)(1)(iii), explaining that the regulation requires a plan to help a claimant “perfect,” not necessarily “win,” an appeal. According to the court, the letter identified the specific restrictions found on peer review, the sample occupations identified, and Germana’s right to submit additional records including Social Security materials. The court likewise rejected Germana’s “post-hoc rationalization” argument, finding that Hartford consistently relied on the same Any Occupation, lack-of-restriction rationale throughout the administrative process and litigation, rather than shifting to an entirely new basis for denial. The court also rejected Germana’s challenges to the merits of Hartford’s decision. It found no inconsistency between Dr. Morgenstein’s driving and sitting restrictions, reasoning that driving and desk-sitting do not allow for similar repositioning and thus are “very different experiences.” Furthermore, none of the identified Any Occupation positions required driving. It also held that Hartford did not abuse its discretion in declining to fully credit Germana’s subjective reports of pain and medication side effects, noting that requiring objective support for functional limitations is permissible. The record, including Germana’s own denials of medication side effects and his primary care physician’s view that he could perform sedentary work, further supported Hartford’s conclusion. The court upheld the magistrate’s prior exclusion of the post-appeal psychiatric evaluation because it was outside the administrative record’s temporal cutoff, as well as the rejection of Germana’s unlicensed-practice-of-medicine argument, agreeing with the magistrate that federal regulations do not require reviewing physicians to be licensed in the claimant’s state of residence, and that Massachusetts’s definition of the practice of medicine did not clearly extend to file-review evaluations. Finally, the court found no procedural unreasonableness or improper influence from Hartford’s structural conflict, crediting Hartford’s use of independent third-party vendors, continued payment of benefits under a reservation of rights, use of a separate appeals unit, and extensions granted to Germana’s counsel as active steps that diminished the weight of the conflict. As a result, the court granted Hartford’s motion for summary judgment, denied Germana’s, and entered judgment for Hartford.

Second Circuit

Schuyler v. Sun Life Assurance Co. of Canada, No. 20-CV-10905 (RA), 2026 WL 2823712 (S.D.N.Y. Sept. 18, 2026) (Judge Ronnie Abrams). Kristen Schuyler worked as a sales representative for Benco Dental beginning in 2011, a role that required extensive driving as well as air travel, conference attendance, and administrative work. In 2015, Schuyler suffered a severe traumatic brain injury after falling down a flight of stairs during a weekend trip, suffering bleeding in her brain, a skull fracture, and other injuries that required emergency hospitalization and extensive follow-up care. Although Schuyler continued working at Benco for nearly four more years, and her earnings improved during that period, her symptoms, which included cognitive and memory deficits confirmed by neuroimaging, worsened over time. In 2019, she was eventually forced to stop working. Schuyler submitted a claim under Benco’s ERISA-governed long-term disability benefit plan to the plan’s insurer, Sun Life Assurance Company of Canada. Sun Life denied Schuyler’s claim, as well as her appeal, contending that she had not shown an inability to perform the duties of her “Regular Occupation.” (This meant that Sun Life never reached the question of whether Schuyler was disabled after 24 months, which required disability from “Any Occupation.”) While her claim was pending, Schuyler applied for and was awarded Social Security disability benefits based on two 2022 evaluations diagnosing mild neurocognitive disorder and significant neurocognitive deficits. This evidence post-dated the administrative record and thus Sun Life did not consider it when it denied Schuyler’s claim. Schuyler filed this action in 2020, but the case was not initially decided on the merits. Instead, the district court ruled for Sun Life on the ground that Schuyler had waived her right to sue as part of a separation agreement with Benco. On appeal the Second Circuit reversed this ruling, holding that Schuyler did not knowingly and voluntarily release her ERISA claims. (This decision was Your ERISA Watch’s case of the week in our August 20, 2025 edition. Disclosure: Kantor & Kantor represented Ms. Schuyler in that appeal.) On remand, the parties renewed their cross-motions for summary judgment, which the court resolved in this ruling. The court first addressed which standard of review governed Sun Life’s denial. Although the plan’s grant of discretionary authority would ordinarily trigger arbitrary and capricious review, the court found that Sun Life forfeited any deference by violating ERISA’s claims-procedure regulation, 29 C.F.R. § 2560.503-1. Specifically, the court observed that in its initial review, Sun Life’s vocational expert, Timothy Andenmatten, classified Schuyler’s occupation as requiring standing or walking “to a significant degree,” or six hours in an eight-hour day, consistent with the regulatory definition of “light work.” On appeal, however, a second Sun Life vocational expert, Julie Finnegan, reclassified the same occupation as requiring only “occasional” standing and walking, or roughly two-and-a-half hours per day, which was equivalent to “sedentary work.” Sun Life’s appeal denial letter “appears to acknowledge that the two occupational analyses reached different conclusions as to the role’s standing and walking requirements, but nowhere explains why Sun Life credited Finnegan’s assessment over Andenmatten’s.” This error “was not harmless as it may well have had a substantial impact on the viability of Schuyler’s ‘Regular Occupation’ disability claim,” and “Schuyler had no opportunity to respond.” The court thus applied de novo review, and under that standard the court found the record presented material factual disputes, including conflicting evidence on the extent of Schuyler’s functional limitations and her credibility, that precluded summary judgment for either side. Although the parties had stipulated that the court could resolve disputed facts by conducting a “bench trial on the papers,” the court noted that “both parties acknowledged at oral argument…[that] the Court need not conduct such a procedure and may instead remand the claim to the plan administrator for a renewed determination in view of the full record.” Given the procedural violation, the incomplete record, and significant new evidence that had never been before Sun Life, including Schuyler’s favorable Social Security disability determination and the underlying expert evaluations, Sun Life’s evidence of Schuyler’s subsequent work as a real estate agent, and a disputed nurse consultant report Schuyler claimed was never properly disclosed to her, the court determined that “remand to Sun Life is the appropriate course of action.” The court also noted that remand would allow Sun Life to reach the Any Occupation disability question it had never addressed. The court thus denied both cross-motions for summary judgment and stayed the case pending Sun Life’s decision on remand.

Sixth Circuit

DiGeronimo v. Unum Life Ins. Co. of America, No. 1:22-cv-00773, 2026 WL 2718210 (N.D. Ohio Sept. 14, 2026) (Judge David A. Ruiz). Donald DiGeronimo worked for Independence Excavating, Inc. for nineteen years, eventually acquiring the awesome title of “Vice President of Demolition.” DiGeronimo was covered under two long-term disability policies: a Unum Life Insurance Company of America policy for officers, directors, and senior managers, and a Provident Life and Accident Insurance Company policy for employees. (Unum acquired Provident in 1999.) Earlier in this litigation, the parties disputed whether the Unum policy was governed by ERISA; in September of 2023 the court held that it was because it did not meet the Department of Labor’s “safe harbor” requirements. (Your ERISA Watch covered this decision in our October 4, 2023 edition.) DiGeronimo had a decades-long history of temporal lobe epilepsy, including two lobectomies, and continued to experience primarily nocturnal seizures that he and his longtime treating neurologist, Dr Nancy Foldvary-Schaefer, attributed to stress and sleep deprivation, which resulted in daytime cognitive impairment. He applied for long-term disability benefits in July 2020, alleging an onset date of June 5, 2020, citing an inability to stay alert or maintain the cognitive sharpness his job required. Unum’s reviewing consultants found that the contemporaneous medical record, which included stable brain MRIs, unremarkable neurological examinations, and a Karnofsky Performance Status score of 90, did not support functional impairment precluding full-time work. Unum thus denied the claim in November of 2020. DiGeronimo appealed with a letter from Dr. Foldvary-Schaefer, a vocational report from Kathleen Reis, and additional medical records, but Unum again concluded the evidence did not support his claimed restrictions, and Unum denied the appeal in March 2022. DiGeronimo sued under 29 U.S.C. § 1132(a)(1)(B) to recover benefits under both the Unum and Provident policies. After the court denied DiGeronimo’s request for discovery regarding Unum’s medical reviewers and their denial rates (an order covered in our September 3, 2025 edition), the parties filed cross-motions for judgment. Because both plans vested Unum with discretionary authority to determine eligibility, the court applied the Sixth Circuit’s two-part framework which asks whether the administrator “engaged in reasoned decisionmaking” and whether the ultimate decision was “supported by substantial evidence in the administrative record.” Addressing DiGeronimo’s procedural challenges, the court found that Dr. Foldvary-Schaefer’s successive opinions were either conclusory or unexplained, and that Unum’s response “more than adequately” answered those opinions by pointing to unremarkable examinations, stable imaging, and DiGeronimo’s Karnofsky score. The court rejected DiGeronimo’s argument that Unum engaged in “cherry-picking,” finding that DiGeronimo did not identify material evidence that Unum overlooked, and that Unum offered a reasoned explanation for crediting its reviewers over Dr. Foldvary-Schaefer. The court likewise found no procedural defect in Unum’s treatment of Reis’s vocational opinions, as her disability conclusion was predicated on Dr. Foldvary-Schaefer’s restrictions. Turning to DiGeronimo’s structural conflict argument, the court acknowledged that Unum’s dual role as administrator and payor created an inherent conflict but explained that such a conflict warrants weight only where a claimant shows it “materialized in a concrete way” to influence the decision. The court rejected as conclusory DiGeronimo’s arguments regarding Unum’s denials in other cases, and disagreed that Unum was required to conduct an in-person examination, especially because DiGeronimo’s treating neuro-oncologist had examined him in person after the alleged onset date and found him neurologically intact. Finally, the court rejected DiGeronimo’s contentions that Unum was obligated to produce its reviewers’ curriculum vitae and that its reviewers lacked adequate qualifications. The court reiterated its earlier discovery ruling that the CVs were not part of the administrative record because they were not relied upon in making the benefit determination, and explained that ERISA does not require administrators to retain “the narrowest of specialists,” particularly where a board-certified neurologist had independently reviewed DiGeronimo’s file. The court thus granted defendants’ motion for judgment on the administrative record and denied DiGeronimo’s cross-motion.

Ninth Circuit

Bachand v. Reliance Standard Life Ins. Co., No. 25-cv-02061-MMC, 2026 WL 2723471 (N.D. Cal. Sept. 15, 2026) (Judge Maxine M. Chesney). Anna Bachand was a research and development engineer for Medtronic, Inc. and a participant in Medtronic’s ERISA-governed group long-term disability benefit plan, which was insured by Reliance Standard Life Insurance Company. In 2022, at the age of 27, Bachand was hospitalized and diagnosed with acute autoimmune hepatitis, for which she was prescribed prednisone and later the immunosuppressant Myfortic. Bachand was treated in part by immunologist Dr. Sam Ahn. She stopped working in May of 2022 and filed a claim for benefits under the plan. After a “major flare” in her condition in May 2023, Reliance approved Bachand’s claim and began paying benefits retroactive to her first day of eligibility. By early 2024, however, Bachand’s liver enzyme levels had stabilized, she had been weaned entirely off prednisone, and her treating physicians described her as “doing well.” Relying on this improvement, Reliance informed Bachand in April of 2024 that it believed she was capable of sedentary work and terminated further benefits. Bachand appealed, submitting evidence that she continued to experience fatigue, tinnitus, and other symptoms that she and Dr. Ahn attributed to the long-term side effects of Myfortic rather than to active liver disease. Reliance retained an independent physician, Dr. Christian Jackson, to review the file; after repeated unanswered attempts to reach Dr. Ahn by phone, Dr. Jackson concluded the medical records did not document restrictions or limitations attributable to Bachand’s condition or its treatment. Reliance thus denied Bachand’s appeal, and after considering supplemental submissions from Dr. Ahn, issued a final denial in November of 2024. Bachand filed this action under ERISA § 502(a)(1)(B) and the parties stipulated to de novo review. The case was tried to the court on cross-motions for judgment under Federal Rule of Civil Procedure 52. As a threshold matter, the court addressed Bachand’s request to supplement the administrative record with three of Dr. Ahn’s clinical summaries that Reliance did not have when it denied her appeal. The court admitted the two summaries that predated the close of the administrative appeal, concluding that they were needed to evaluate the weight of Dr. Ahn’s later opinions and Bachand’s self-reported symptoms, but excluded the third, which post-dated the appeal period. Turning to the merits, the court found that while “Reliance’s relatively succinct explanation for its decision is by no means an exemplar for others to follow, it has satisfied ERISA’s requirement that it provide a ‘specific’ reason for its decision, namely, that Bachand’s medical records did not support a finding of total disability.” That decision involved “an implicit rejection of Dr. Ahn’s and Bachand’s statements that her symptoms were so severe as to prevent full-time work[.]” The court agreed with Reliance, finding that Dr. Ahn’s treatment notes through mid-2024 repeatedly described Bachand as improving, with only vague references to “some fatigue and muscle aches.” The court further found that Dr. Ahn’s newly-admitted September 2024 letter and October 2024 questionnaire – which first attributed Bachand’s limitations to Myfortic’s side effects – introduced numerous symptoms, including dizziness, headaches, and racing heartbeat, that did not appear in his contemporaneous records. The court also noted that Dr. Ahn’s repeated failure to return Dr. Jackson’s calls undercut the reliability of his after-the-fact opinion. The court stated that Reliance’s vocational specialist had identified sedentary occupations, including biomedical engineer, for which Bachand remained qualified. The court acknowledged Bachand’s personal account of her difficulties, but was unpersuaded “for essentially the same reasons as set forth with respect to Dr. Ahn’s opinions, namely, an absence in her medical records of either her reporting or a physician’s recording of any symptom being of such severity as to support a finding she was unable to perform suitable work[.]” The court explained that it was “sympathetic to Bachand’s predicament and what will surely be a difficult, life-long battle to keep the symptoms of her condition at bay and maintain a healthy life.” However, the court was “constrained by the record before it, and, on those facts, Bachand has not carried her burden to show she is Totally Disabled.” As a result, Reliance’s motion for judgment was granted and Bachand’s was denied.

Syed v. Unum Life Ins. Co. of Am., No. CV 25-01052-MWF (CTSx), 2026 WL 2807048 (C.D. Cal. Sept. 18, 2026) (Judge Michael W. Fitzgerald). Maha Syed, a corporate associate attorney at Cooley LLP, was covered by Cooley’s ERISA-governed long-term disability plan, which was insured by Unum Life Insurance Company of America. Beginning in 2023, Syed reported a constellation of symptoms, including nausea, dizziness, racing heart, difficulty concentrating, low mood, and anxiety, which she attributed to major depressive disorder and generalized anxiety disorder diagnosed by her therapist. She took a leave of absence from Cooley in May of 2023 and submitted a claim to Unum in August. After reviewing an attending physician statement, treatment records, and a call with Syed describing her symptoms, Unum approved her claim in October. Soon after, Syed’s psychiatric nurse practitioner began reporting improving symptoms and normal mental status examinations, a trend that continued into early 2024 alongside reports that her depression and anxiety were “stable and manageable.” Around that time, Syed also began cardiology evaluation for possible dysautonomia, though an initial stress test was inconclusive. In early 2024, Unum referred Syed’s file to two reviewing psychiatrists, who concluded that medical records did not support continued work-preclusive impairment. Unum thus terminated Syed’s benefits effective April 12, 2024. Syed appealed, submitting a new independent evaluation from a neurologist who diagnosed her, based on telehealth examination   and a tilt table test, with postural orthostatic tachycardia syndrome (“POTS”) and chronic fatigue syndrome, along with supporting opinions from her cardiologist, primary care physician, and mental health providers, and narrative statements from herself, her sister, and a friend. After two further physician reviewers again concluded the record did not support disability, Unum upheld its denial. This action followed and proceeded to cross-motions for judgment under Federal Rule of Civil Procedure 52. The parties stipulated to de novo review. As a threshold matter, the court denied Syed’s motion to exclude defense arguments she characterized as improper post hoc rationales under the Ninth Circuit’s decision in Collier v. Lincoln Life Assurance Co. of Boston. (That case, in which the plaintiff was represented by Kantor & Kantor, ruled that “a district court ‘clearly errs by adopting a newly presented rationale’ when reviewing a denial of benefits that the insurer did not raise during its administrative processes.”) The court stated that “[t]he arguments and evidence on which the Court relies – as discussed below, the lack of substantiated functional restrictions, the largely unremarkable test results, the documented improvement in psychological symptoms, and the degree to which Plaintiff’s later opinions depend on subjective reports – were either identified explicitly in Defendant’s denial letters or are fairly considered subsidiary to the same rationales so identified.” As a result, they were not “new” within the meaning of Collier. On the merits, the court found the medical evidence closest in time to the benefit termination to be most persuasive, and that this contemporaneous record reflected a predominantly behavioral impairment that was stabilizing and improving by early 2024. Early complaints of nausea were attributed to medication side effects rather than an independent physical condition. The court found that Syed’s treating providers’ later opinions were unsupported by their own contemporaneous clinical findings. Her nurse practitioner’s mental status examinations undercut her later opinion that Syed could not work, and her therapist offered no functional assessment corroborating a work-preclusive condition. The court likewise gave limited weight to Syed’s later dysautonomia- and POTS-based theory of disability, explaining that a diagnosis alone does not establish disability. Furthermore, Syed’s neurologist’s opinion was undermined by underlying tilt table results “at the upper limit of normal,” and “there is no indication that he reviewed or considered the contemporaneous evidence…which suggested that Plaintiff’s medical leave was the result of a particular mental health episode.” Syed’s cardiologist’s opinion suffered from similar issues. The court also declined to credit Syed’s lay narrative statements as sufficient, standing alone, to establish functional impairment, noting that they must be “weighed against a medical record of unremarkable exam results and a lack of specific medical observations.” The court also rejected Syed’s argument that Unum’s reviewers’ references to “Plaintiff’s potential ability to work a less demanding job than corporate practice at Cooley” undermined the denial. The court found that the Policy’s “usual occupation” standard turned on the substantial and material acts she performed at Cooley, not her capacity for other work, and “the record does not establish by a preponderance of the evidence” that she was disabled from her position at Cooley. The court thus affirmed Unum’s termination of Syed’s benefits and entered judgment in Unum’s favor.

Zayn v. Unum Life Ins. Co. of America, No. 3:25-cv-01190-JR, 2026 WL 2719813 (D. Or. Sept. 15, 2026) (Magistrate Judge Jolie A. Russo). Nur Zayn worked as a product manager for CVS Health and was a participant in CVS Health’s ERISA-governed long-term disability benefit plan, which was administered by Unum Life Insurance Company of America. In October of 2019, when she was 37, Zayn was diagnosed with Young-Onset Parkinson’s Disease and began treatment with neurologist Dr. Elise Anderson. Over the following two years Zayn continued working while experiencing progressively worsening tremor, rigidity, brain fog, and difficulty with word-finding and multitasking, which she and Dr. Anderson attributed to her disease. Zayn stopped working in June of 2021 and submitted a claim to Unum for benefits. Unum approved Zayn’s claim under the plan’s “own-occupation” definition of disability, which after 24 months shifted to require her to be unable to perform “any gainful occupation” for which she was reasonably fitted by education, training, or experience. The Social Security Administration separately found Zayn disabled as of November 1, 2022. Unum continued paying benefits through mid-2024, including a July 2024 determination that improvement was “not expected.” However, after discovering that Zayn maintained an Instagram account and website promoting a small astrology-reading side business, and obtaining surveillance footage showing her performing brief yard work, Unum denied her claim after referring the file for review by several consulting physicians. Two of these physicians mistakenly relied on information drawn from another claimant’s file. On appeal, Zayn provided statements from herself, her partner, a longtime friend, and three treating providers, including Dr. Anderson, who all maintained that Zayn’s progressive, incurable disease left her unable to perform full-time work. Unum disagreed and upheld its denial; this action followed. The parties stipulated that de novo review governed and that the dispute would be resolved on cross-motions for judgment under Federal Rule of Civil Procedure 52. After weighing the extensive record, the court credited the opinions of Dr. Anderson, who authored five separate disability opinions over the course of the claim, examined Zayn regularly for more than five years, and whose chart notes documented both subjective and objective findings corroborating the progression of her symptoms. The court explained, “‘This evidence alone is persuasive evidence [that plaintiff] is totally disabled,’ especially given the consistency of plaintiff’s symptom reporting and the fact that there is otherwise nothing in the record to suggest plaintiff has overstated her symptoms or is not credible.” The court also found that the largely consistent opinions of Zayn’s other treating providers also supported her claim. In contrast, the court found Unum’s consulting physicians less reliable, noting that none had personally examined Zayn, that two had relied in part on information mistakenly drawn from another claimant’s file, and that one review only addressed a neuropsychological evaluation performed nearly three years before Unum terminated benefits. The court also concluded that Unum overstated the significance of Zayn’s activities. The court conducted “an independent review of the record” which “reveals that these activities were relatively minimal, not transferrable to sustained employment, and consistent with the medical record and plaintiff’s other self-reports.” The court also found the corroborating statements from Zayn’s partner and friend to be persuasive evidence of disability, and treated the Social Security Administration’s disability determination as probative, especially because Unum “wholly fails to meaningfully reconcile” that award with its denial. In sum, the court concluded that “plaintiff suffers from a chronic, degenerative condition that results in cognitive impairments and fatigue which prevent plaintiff from attending work on a reliable and consistent basis, and, when at work, concentrating on her duties.” The court thus granted Zayn’s motion for judgment and denied Unum’s. The court awarded retroactive benefits and directed the parties to meet and confer regarding the appropriate amount of back benefits, interest, and reasonable attorney’s fees and costs.

ERISA Preemption

Sixth Circuit

Commonwealth of Kentucky ex rel. Coleman v. Express Scripts, Inc., No. 25-5866, __ F. 4th __, 2026 WL 2796078 (6th Cir. Sept. 18, 2026) (Before Circuit Judges Sutton, Gibbons, and Davis). The Commonwealth of Kentucky brought this action against several health care companies, including two pharmacy benefit managers (PBMs), Express Scripts, Inc. and Optum. Kentucky contends that these companies contributed to the state’s opioid crisis by negotiating with drug manufacturers to give opioids preferred placement on national drug formularies in exchange for rebates and fees, in violation of state consumer protection and nuisance laws. The PBMs administer prescription drug benefits for a mix of federal and commercial health plans. (For example, Express Scripts serves federal employee plans under the Federal Employees Health Benefits Act and provides pharmacy benefit and mail-order services for the Department of Defense’s TRICARE program, while Optum administers pharmacy benefits for the Veterans Health Administration.) The PBMs removed the case to federal court under the federal officer removal statute, 28 U.S.C. § 1442(a)(1), and Kentucky moved to remand, arguing that “its complaint effectively disclaimed liability for any conduct the firms undertook at the behest of a federal officer.” The district court agreed with Kentucky and granted the motion. However, shortly afterward, earlier this year, the Sixth Circuit decided Ohio ex rel. Yost v. Ascent Health Services, LLC. In that case the appellate court “rejected Ohio’s similar effort to avoid federal jurisdiction by disclaiming its intent to hold the PBMs liable for federally controlled conduct.” Relying on Yost, the Sixth Circuit reversed in this published opinion, finding federal jurisdiction was appropriate. The court noted that the federal officer removal statute “permits removal if the defendant establishes that: (1) he is a federal officer or a person ‘acting under’ a federal officer, (2) the lawsuit targets conduct ‘for or relating to any act under color of [federal] office,’ and (3) the lawsuit ‘involves a colorable federal defense.’” The court held that all three elements were met. First, the PBMs “acted under an officer of the United States” because their negotiations with drug manufacturers on behalf of federal plan sponsors are performed under the contractual control and oversight of the federal government. Second, Kentucky’s claims “relate to” that federally supervised conduct, because the PBMs negotiate rebates and set formulary placement through a unitary negotiation with drug manufacturers: “As the PBMs point out, there is little to no daylight between their federal and non-federal conduct as it pertains to negotiations with drug manufacturers.” Thus, the PBMs’ federal conduct was “indivisible” from its non-federal conduct, and Kentucky could not separate them for jurisdictional purposes. Third, the PBMs raised colorable federal defenses, including government-contractor immunity and preemption law under the FEHBA and TRICARE statutes. Where is ERISA in all this, you may wonder? Well, Optum contended that it had a colorable argument that ERISA preempts Kentucky’s claims, and the Sixth Circuit agreed: “[A] colorable argument exists that ERISA preempts Kentucky’s claims because they take aim at how Optum structures its ‘standard formulary offerings’ for ERISA plans.” The court cited Pharmaceutical Care Mgmt. Ass’n v. Mulready (the case of the week in our August 23, 2023 edition) in support, noting that there the Tenth Circuit held that Oklahoma’s PBM regulations were preempted by ERISA. The court also explained that five other circuits had examined similar issues, and “concluded that a complaint targeting PBM services performed holistically for federal and non-federal clients necessarily targets federal conduct.” Two of those circuits – the Second and Eighth – “have embraced all of these conclusions in precisely today’s setting: government lawsuits arising from the opioid crisis that target the PBMs’ indivisible rebate negotiations and formulary placement practices.” In its briefing, Kentucky did not have much to work with because of Yost. It only argued that the case should be remanded to the district court for that court to apply Yost in the first instance. The Sixth Circuit saw no point, stating that “where the dispute turns ‘principally [on] a question of legal theory rather than historical fact’…there is little benefit to sending the case back to a factfinder when no material facts remain to be found.” The court noted that “Kentucky remains free (with the district court’s leave) to excise from its complaint any claims giving rise to federal jurisdiction…[b]ut as it stands, Kentucky’s current complaint targets conduct that supports removal jurisdiction as to each of the relevant claims.” The court thus reversed the district court’s remand order and the case will proceed below.

Life Insurance & AD&D Benefit Claims

Fourth Circuit

Hughes v. Truist Bank, No. 3:26-CV-00510-KDB-MTO, 2026 WL 2823411 (W.D.N.C. Sept. 21, 2026) (Judge Kenneth D. Bell). Anthony Hughes was employed by Truist Bank and participated in the Truist Financial Corporation Employee Benefit Plan. The plan was an ERISA-governed welfare benefit plan for which Hartford Life and Accident Insurance Company served as the insurer and claims administrator. Hughes enrolled in accidental death and dismemberment (AD&D) coverage and elected the maximum available amount, ten times his annual salary, or $830,000, which the plan defines as the “Principal Sum.” Hughes alleged that he was led to believe this amount applied equally to the death of a spouse, and that he was not adequately informed that spousal AD&D coverage was limited to 50% of his elected amount. Instead, that limitation was “buried several layers deep in non-obvious hyperlinks” on the benefits portal or, at times, absent from the portal altogether. He further alleged that “Truist’s Benefits Administration Manager admitted that such information was ‘NOT easy to locate’ and the manager ‘could see how’ the language could be misleading.” (Hughes alleged that Truist “subsequently modified the portal to ‘make the limitation more visible.’”) Sadly, Hughes’s wife died in an accident in 2024. Hughes submitted a claim under the plan for the full $830,000 Principal Sum, but, citing the plan’s spousal limitation, Hartford approved only half of that, or $415,000. Hughes’s appeal was unsuccessful so he brought this action against Truist and Hartford asserting a claim for benefits under 29 U.S.C. § 1132(a)(1)(B) (Count I), a bundle of claims in Count II alleging breach of the duties of loyalty and prudence, failure to make disclosures required by 29 C.F.R. §§ 2520.102-2 and 2520.102-3, and a request for equitable relief reforming the plan’s communications, under 29 U.S.C. § 1132(a)(3), and a state law claim for misrepresentation and concealment (Count III). The case was transferred from the Northern District of Georgia (as we recounted in our July 1, 2026 edition), after which defendants moved to dismiss. As a threshold matter, the court declined to dismiss the complaint as an impermissible “shotgun pleading,” finding that, while not a model of clarity, it provided fair notice of the claims when read together with the parties’ briefing. The court also addressed which extrinsic documents it could consider on a motion to dismiss without converting it to one for summary judgment, holding that the plan document and summary plan description (SPD) were integral to the complaint and could be considered. The court declined to consider Hughes’ administrative appeal and adverse benefit notice because the other documents were sufficient to resolve the motions. On Count I, the court held that the SPD’s chart specifying that a spouse is covered at 50% and each dependent child at 15% of the Principal Sum unambiguously resolved the dispute in defendants’ favor. The court found this interpretation “plain and ordinary” and that it “unambiguously limit Hughes’s benefits for his spouse’s untimely passing.” Turning to the fiduciary duty claim, the court held that neither Truist nor Hartford was acting as a fiduciary when it came to the design of the benefits portal because the design of a portal’s layout and hyperlinks is a ministerial, not discretionary, function. Treating website design choices as fiduciary conduct “would risk expanding fiduciary duties well beyond the text of ERISA and its common law roots in trusts.” The court further held that, even if defendants had been acting as fiduciaries, Hughes’ allegations did not plausibly allege a breach, because “ERISA does not impose a general duty requiring ERISA fiduciaries to ascertain on an individual basis whether each beneficiary understands the collateral consequences of his or her particular election.” On the disclosure claim, the court found that neither 29 C.F.R. § 2520.102-2 nor § 2520.102-3 imposes any requirement that a plan maintain a participant portal, let alone one structured in a particular way. It also discounted Hughes’ allegations regarding the admission by Truist’s benefits manager, noting that Hughes’ “misunderstanding was not motivated by his conversation with the Truist employee,” as well as his allegations regarding Truist’s modification of the portal, stating that “subsequent remedial measures do not establish wrongdoing.” As for equitable relief, the court held that § 1132(a)(3) functions as a “catchall” available only for injuries not adequately redressed elsewhere in ERISA’s remedial scheme, and that Hughes could not use it as an “end around” for his failure to state a claim under § 1132(a)(1)(B). Finally, the court held that Hughes’ state law misrepresentation and concealment claims were preempted, explaining that they rested on the same allegations underlying his ERISA claims and constituted an impermissible alternative enforcement mechanism. The alleged misconduct was undertaken pursuant to defendants’ purported fiduciary duties and tied throughout to the plan, its coverage, and Hughes’ benefit election, and thus ERISA controlled. The court thus granted both motions to dismiss.

Medical Benefit Claims

Ninth Circuit

Doe v. The Signature Benefits Plan & the Disney Severance Pay Plan, No. SA CV 24-2230 DMG (DFMx), 2026 WL 2790684 (C.D. Cal. Sept. 17, 2026) (Judge Dolly M. Gee). In this action plaintiff Jane Doe sought reimbursement under an ERISA-governed, self-funded welfare benefit plan sponsored by The Walt Disney Company for residential treatment received by her minor dependent, S.J. Sadly, S.J. has a longstanding history of “major depressive disorder, generalized anxiety disorder, suicidal ideation, and past suicide attempts.” Between April 2023 and February 2024, S.J. was hospitalized three times for suicidal ideation and self-harm, and following the third hospitalization S.J.’s treating psychiatrist gave his “unequivocal recommendation” that S.J. should attend a residential treatment center (RTC). The doctor identified Compass Behavioral Health, an out-of-network provider, as the only local program suited to S.J.’s needs. The plan delegated claims administration for medical benefits to Cigna, which in turn used Evernorth Behavioral Health (EBH) to make medical necessity determinations under the plan’s medical criteria, the MCG Behavioral Criteria Guidelines. EBH initially identified partial hospitalization (PHP) as the appropriate level of care. When Compass sought authorization for higher-level RTC treatment, EBH’s peer reviewer, Dr. Peter Volpe, denied the request as not medically necessary. In doing so Dr. Volpe relied principally on a peer-to-peer conversation he had conducted several weeks earlier with one of S.J.’s psychiatrists, before S.J.’s condition worsened. S.J. was nonetheless admitted to Compass’s RTC program. Doe pursued an expedited internal appeal, which EBH’s Dr. Devinalini Misir denied on largely the same grounds as Dr. Volpe. An external reviewer (MCMC Services, LLC) then upheld the denial, although it did so using a definition of “medical necessity” that appeared nowhere in the plan documents. S.J. later stepped down to PHP-level care at Compass. Doe filed this suit under 29 U.S.C. § 1132(a)(1)(B), and the court held a half-day bench trial, ordering supplemental briefing on the scope of the administrative record before issuing findings of fact and conclusions of law under Federal Rule of Civil Procedure 52. First, the court tackled the standard of review. The court held that de novo review governed, because although the plan gave Disney “full discretion” to interpret plan terms and determine eligibility, nothing in the plan unambiguously delegated that discretionary authority to Cigna or EBH. The court explained that merely assigning Cigna the task of “determining medical necessity” fell short of an unambiguous grant of interpretive authority. The court further held that, because the plan made the external reviewer’s decision “final and binding” on Disney, the administrative record properly included the materials Doe submitted in connection with the MCMC external review, not just those considered by EBH. As for the merits, the court found that S.J.’s RTC treatment at Compass “was medically necessary under the MCG Guidelines,” i.e., Doe “has proven by a preponderance of the evidence that residential treatment was necessary, appropriate, and not feasible at a lower level of care.” The court credited the consistent, substantially corroborated opinions of S.J.’s treating providers over the opinions of EBH’s non-treating reviewers and the external reviewer. The court found Dr. Volpe’s denial unreliable because it rested on a peer-to-peer review that predated a material deterioration in S.J.’s condition and ignored a more recent, more informed recommendation from S.J.’s physicians. The court also found Dr. Misir’s appeal denial unsupported because it invoked criteria – such as impairment “across multiple settings” and a need for “24 hour psychiatric intervention” – that do not appear in the MCG Guidelines. The MCMC external reviewer’s decision was also entitled to little weight because it applied a medical necessity definition drawn from nowhere in the plan and relied on journal articles that were neither included in the record nor explained. As a result, the court granted Doe’s motion for judgment and denied Disney’s cross-motion. The court further held that Doe was entitled to benefits and reimbursement of her out-of-pocket costs for S.J.’s treatment under the plan’s single-case agreement provision, with interest. The court directed the parties to confer on the amount due and submit a proposed judgment, with Doe permitted to move for attorneys’ fees. (Disclosure: Doe was represented by former Kantor & Kantor attorney and friend of the newsletter Elizabeth K. Green.)

Pleading Issues & Procedure

Sixth Circuit

Montgomery v. Smith, No. 3:23-cv-00275, 2026 WL 2720533 (M.D. Tenn. Sept. 15, 2026) (Judge Aleta A. Trauger). Gary Montgomery brought this pro se action against twelve defendants over the division of assets in his divorce from Leslie Burnett Montgomery, presided over by state court judge Philip E. Smith, who passed away in 2022. Gary is currently incarcerated. (For more on his very serious legal troubles, check out this summary from 2021.) Judge Smith’s final decree found that two parcels – the Lakeview Property and the Donna Hill Property – were marital property. The Lakeview Property had originally been purchased solely by Gary and titled to a solo 401(k) plan of which he was trustee (entertainingly titled the “Bzbzbzboy Inc. 401k plan”), but Judge Smith found it had been funded in part with proceeds from a loan against Leslie’s own 401(k) account. His decree ordered the Lakeview Property sold, directed that an approximately $40,000 IRS debt attributed to Gary and an HVAC loan be paid from the sale proceeds, and split the remainder between the parties, with Gary’s share held in a court-controlled escrow account pending finality. When Gary, from custody, resisted cooperating with the sale, Judge Smith entered further orders in 2021 and 2022 removing him and appointing Leslie as trustee and plan administrator of the 401(k) plan for the limited purpose of consummating the sale. Gary’s operative complaint in this action alleges that Judge Smith’s orders “destroyed” the plan and “unreasonably debased [his] retirement account and its ability to earn/grow in the future.” He further alleges that Leslie, once given control of the Donna Hill Property’s rental income, breached a fiduciary duty to the plan by commingling that income with her personal funds. Gary’s complaint also alleges a number of other claims, including federal civil rights violations against Judge Smith, violation of the Real Estate Settlement Procedures Act (RESPA) by a group of real estate professionals involved in the Lakeview Property sale, and various state-law theories. Nine of the twelve defendants (the other three, including Leslie, have not yet appeared due to service issues) moved to dismiss. In a 2024 report and recommendation (R&R), a magistrate judge recommended that all four pending motions be granted, largely based on the Rooker-Feldman doctrine (described in more detail below). Gary did not timely object, and the court accepted the R&R. After Gary represented that he had never received the R&R, the court reopened the case in 2026 for the limited purpose of allowing Gary to object; his objections were addressed in this ruling. The court agreed with the magistrate that Gary’s claims against Judge Smith were barred by judicial immunity, as all of the challenged conduct occurred in Judge Smith’s judicial capacity while presiding over the divorce, and his official-capacity claims were barred by Eleventh Amendment sovereign immunity. As for the real estate agents, brokers, and title companies, Gary’s claims against them were barred by Rooker-Feldman and, in any event, his “broad and non-specific allegations” failed to explain what defendants had done in any detail. Because of these rulings, the only remaining basis for federal jurisdiction was Gary’s ERISA claims against Leslie. Because Leslie had not made an appearance (indeed, had not even been served), the court addressed those claims sua sponte, which it was allowed to do because Gary’s complaint raised a jurisdictional issue under Rooker-Feldman. Rooker-Feldman applies in “[(1)] cases brought by state-court losers [(2)] complaining of injuries caused by state-court judgments [(3)] rendered before the district court proceedings commenced [(4)] and inviting district court review and rejection of those judgments.” The court held that each item of relief Gary sought against Leslie under ERISA – an injunction undoing the Lakeview Property sale and restoring him as plan trustee and administrator, an order requiring Leslie to pay over rental income collected since 2016, and an order requiring her to repay amounts used toward the IRS and HVAC debts – would necessarily require undoing some portion of Judge Smith’s final decree or the orders implementing it. The court found this true even though Gary did not expressly ask it to vacate the final decree: “the plaintiff ‘can only prevail’ on his claims against [Leslie] for injunctive relief ‘if the state court were wrong,’ making it clear that the Final Decree and subsequent orders are ‘the source of the injury.’” Furthermore, to the extent Gary sought damages rather than equitable relief, “the only source of his alleged injury is the above-referenced wrongs, and an award of damages for actions taken in accordance with the Final Decree would likewise require setting aside Smith’s division of assets in the divorce.” As a result, Rooker-Feldman barred Gary’s ERISA claims against Leslie. Gary did not respond to the magistrate’s Rooker-Feldman analysis in his objection, which did not help. Having dismissed every claim over which it possessed original jurisdiction, the court declined to exercise supplemental jurisdiction over the remaining state law claims, as to all defendants, and dismissed them without prejudice.

Provider Claims

Seventh Circuit

Marion HealthCare, LLC v. Aisin Manufacturing Illinois, LLC, No. 3:25-CV-1719-NJR, 2026 WL 2718233 (S.D. Ill. Sept. 15, 2026) (Judge Nancy J. Rosenstengel). Marion HealthCare, LLC and Marion Anesthesia Company, LLC are Illinois healthcare providers. They rendered medical services to 65 employees of Aisin Manufacturing Illinois, LLC, who were covered under Aisin’s self-funded, ERISA-governed group health plan, administered by Anthem Blue Cross and Blue Shield. Before receiving services, each patient allegedly verified coverage with Anthem by phone or online and attempted to assign their benefits, claims, and causes of action under the plan to plaintiffs. Across all 65 patients, total charges were $895,454.77, but the plan only reimbursed $183,684.29. Plaintiffs exhausted their administrative appeal rights and this action followed against Aisin and Anthem, asserting two ERISA counts along with four state-law claims for fraud and promissory estoppel, seeking the unpaid balances, fees, and damages. Aisin and Anthem separately moved to dismiss the operative complaint, each arguing principally that the court lacked subject matter jurisdiction because plaintiffs lacked standing, and alternatively raising venue, preemption, and pleading deficiencies. The court began and ended its discussion of the motions with standing. The court explained that civil actions to recover plan benefits may be brought only by plan participants or beneficiaries, and thus plaintiffs, as healthcare providers, could sue only if they had derivative standing through a valid assignment from their patients. Because the parties had submitted both a 2015 and a 2024 version of the plan without clarifying which governed, the court analyzed standing under both, observing that each contained “an express anti-assignment or nonalienation provision” that voided any attempt to assign, transfer, or encumber rights under the plan. Plaintiffs raised three arguments for why this provision was inapplicable, but the court rejected them. First, it found no support for reading the 2015 plan’s anti-alienation clause as limited to situations involving bankruptcy or creditors simply because an adjacent subsection addressed bankruptcy. Second, the court rejected plaintiffs’ contention that provisions authorizing direct payment to providers superseded the anti-alienation clauses. The court held that under “the canon of harmonious reading,” a plan can “allow[] direct payment to service providers and, simultaneously, expressly prohibit[] assignment of Benefits to service providers.” The court cited numerous cases supporting its conclusion, which “emphasized the increasing trend of district and circuit courts holding that anti-assignment provisions in ERISA plans may preclude a provider from bringing actions under the Act.” Third, the court rejected plaintiffs’ argument that defendants’ acceptance of administrative appeals from plaintiffs constituted a waiver of their standing defense. The court held that permitting a provider to pursue internal appeals as an authorized representative does not confer standing to pursue a civil action, and further noted that the 2015 plan contained an express no-waiver clause. Having concluded that both the 2015 and 2024 plans validly barred assignment of participants’ claims to plaintiffs, the court thus held that plaintiffs lacked statutory standing to pursue their ERISA counts and that the court lacked subject matter jurisdiction over them. The court declined to exercise supplemental jurisdiction over the four remaining state-law fraud and promissory estoppel claims. As a result, the court granted defendants’ motions in full and dismissed the complaint without prejudice.

Withdrawal Liability & Unpaid Contributions

Seventh Circuit

Consumers Concrete Corp. v. Central States, Se. & Sw. Areas Pension Fund, Nos. 25-1765 & 25-1766, __ F. 4th __, 2026 WL 2752196 (7th Cir. Sept. 17, 2026) (Before Circuit Judges Easterbrook, Ripple, and Lee). Consumers Concrete Corporation participated in a multiemployer pension plan administered by Central States, Southeast and Southwest Areas Pension Fund. Consumers partially withdrew from the plan in 2017 and completely withdrew in 2019, triggering the Multiemployer Pension Plan Amendments Act’s (MPPAA) withdrawal liability rules. Those rules involve determining “the allocable amount of unfunded vested benefits,” which is then adjusted in a four-step process. The parties agreed that Consumers’ allocable share of unfunded vested benefits for its 2019 complete withdrawal was $23,272,103.41 and that its resulting annual payment, before any credit for its 2017 withdrawal liability, was $607,344.90. They disputed only how to apply the 2017 credit. Consumers argued the credit should be subtracted only after all four steps were complete, including the twenty-year cap on annual payments in step three, which would reduce the present value of its liability to $9,306,831.24 or, if the credit exceeded that figure, to zero. The Fund argued the credit should be applied earlier, at step two, before the cap was applied, and thus Consumers was required to pay $9,306,831.24 over the next 20 years. The parties arbitrated the dispute, and the arbitrator ruled in favor of the Fund. Both sides sought review in the district court, which consolidated the two cases. The district court vacated the arbitration award, agreeing with Consumers that its credit should be applied only after all four steps had been completed. The Fund appealed, and the court invited the Pension Benefit Guaranty Corporation (PBGC) to weigh in as an amicus; the Chamber of Commerce also filed an amicus brief in support of Consumers. The Seventh Circuit acknowledged that the MPPAA was “an intricate statutory scheme with detailed calculations,” that this was “a tough case,” and “[t]here are reasonable arguments on both sides.” However, the appellate court ultimately sided with Consumers. It reasoned that § 1381(b) (which outlines the four-step process) defines “withdrawal liability” as the amount that results only after all four adjustment steps are applied, and that § 1386(b)(1), which directs that a partial withdrawal credit “shall be reduced” from “any withdrawal liability…in a subsequent plan year,” operates on that fully adjusted figure rather than on an intermediate amount calculated during the process. The Fund argued that step two’s invocation of § 1386 meant that the credit had to be applied before proceeding to step three, but the Seventh Circuit disagreed. The court read § 1381(b)(1)(B)’s cross-reference to § 1386 as “forward-looking, not back-looking.” In other words, when an employer undertakes a partial withdrawal, the plan sponsor calculates that withdrawal’s liability under § 1386(a) and records it as a credit to be applied against a later, subsequent withdrawal once that later withdrawal’s liability is itself fully calculated. “To put it another way, § 1386(b)(1) focuses on the time that the partial withdrawal liability is first calculated, not when the subsequent liability (whether complete or partial) is determined – which could be any number of years later.” The court found support for this reading in the PBGC’s longstanding interpretation of the statute, which was reiterated by the PBGC in its amicus brief, that “withdrawal liability ‘shall be reduced’ is best understood to operate on the fully-adjusted amount of withdrawal liability determined under § 1381(b)(1), rather than on intermediate figures in the calculation process.” In reaching this result, the Seventh Circuit expressly acknowledged that it was creating a circuit split, respectfully disagreeing with decisions from the Ninth and Eleventh Circuits on this issue. Both of those decisions authorized funds to apply the credit at the step-two stage. The panel noted, “Because this opinion disagrees with Eleventh and Ninth Circuits, we have circulated it to all judges of this court in regular active service in accordance with Circuit Rule 40(e). No judge requested to rehear this case en banc.” Either this was a slam-dunk for the other Circuit judges or withdrawal liability is simply too boring to get worked up about.