Good morning, ERISA Watchers! Last week was quite a busy week. I spent four days in Spokane, Washington attending the Ninth Circuit Judicial Conference (and met Associate Justice Elena Kagan to boot!). Despite the flurry of activity, I continued to review all the recent ERISA decisions so that Your ERISA Watch wouldn’t miss a beat. The mid-week notable decision was from the Fourth Circuit. (Read about it here if you missed it.). Today’s notable decision is from the Fifth Circuit in Faciane v. Sun Life Assurance Co. of Canada, No. 18-30918, __F.3d__, 2019 WL 3334654 (5th Cir. July 25, 2019), where the court addresses the accrual of a limitations period applicable to a disability benefit miscalculation claim.
The relevant facts are as follows: Sun Life approved Faciane’s long-term disability (“LTD”) claim in March 2008. In a letter dated March 31, 2008, Sun Life informed Faciane that he was entitled to a benefit equal to 50% of his basic monthly earnings. Sun Life also informed Faciane that it calculated his basic monthly earnings as $5,3134.16 and due to various offsets, he was entitled to the plan minimum of $100/month. A Sun Life claim control log documenting a conversation with Faciane suggests that he received the letter. Faciane disputed that he was only entitled to 50% of his basic monthly earnings and convinced Sun Life by April 2011 that he was entitled to 66.67% under a “buy-up” plan. However, his net monthly benefit remained the same due to offsets. Sun Life’s letter explaining this also informed him of the appeal process and his right to sue under ERISA. Then six years later, Faciane appealed the benefit calculation. He argued his average monthly earnings were $8,118.52 and he challenged the way Sun Life offset his worker’s compensation settlement. The latter was resolved in his favor, but Sun Life stood by its original determination of his basic monthly earnings. Faciane filed suit in December 2017.
Sun Life moved to dismiss on the basis that the lawsuit was time-barred under the LTD plan’s three-year contractual limitations provision. Faciane claimed that he never received the initial March 31, 2008 letter and that his claim should accrue as of 2017 when Sun Life denied his appeal. The district court converted the motion to dismiss to a motion for summary judgment and ruled in Sun Life’s favor. Observing that the Fifth Circuit has not expressly stated an accrual rule for miscalculation claims, it followed the Second Circuit decision in Novella v. Westchester County, 661 F.3d 128, 147 (2nd Cir. 2011) (determining that accrual begins at the time there is enough information available to the participant to know or reasonably should know of the miscalculation) and the Third Circuit decision in Miller v. Fortis Benefits Ins. Co., 475 F.3d 516, 521 (3rd Cir. 2007) (ruling that an award of benefits could trigger accrual of a miscalculation claim if it constituted a repudiation of the beneficiary’s entitlement to greater benefits that is clear and made known to the beneficiary).
The Fifth Circuit affirmed the decision of the district court. Citing to Heimeshoff, the court noted that for Faciane to prevail he must show that the plan’s limitation provision would leave him an unreasonably short period to file suit from the time his claim accrued. Further, accrual may happen before any administrative review has started.
The question therefore is the accrual date of his miscalculation claim.
In answering this question, the court explained that accrual of ERISA claims is a question of federal common law. Where it’s not clear when a claim has been formally made and denied, circuit courts have applied a form of the standard federal discovery rule which provides that a claim accrues when a party has enough information to know or reasonably should know of the injury. In the ERISA benefit context, many courts apply the “clear repudiation” rule: the claim accrues when the plan clearly and directly repudiates a beneficiary’s claim to benefits. Though the court did not expressly adopt or reject this rule, it noted that its published decision in Kennedy v. Electricians Pension Plan, IBEW No. 995, 954 F.2d 1116 (5th Cir. 1992) is consistent with its approach. The bottom line: “information can trigger accrual, even in the absence of a formal application or denial of benefits, when it is clear and made known to the beneficiary.”
On the question of whether Faciane received the March 31, 2008 letter, the court found no genuine issue of material fact. The district court applied the “mailbox rule” based on a Sun Life affidavit from an administrative-review official at Sun Life who attested that the standard mailing practices were followed in this case. The notes in the claim control log also corroborated that the letter was mailed and Faciane received it.
The court concluded that the information in the March 31, 2008 letter was enough for Faciane’s miscalculation claim to accrue. Sun Life displayed the monthly earnings amount prominently on the first page. “Moreover, the alleged discrepancy is so large, and it concerns a matter so fundamental to any working person, that we conclude the letter clearly repudiated Faciane’s entitlement to greater benefits.” The court found that the information was clear and simple that he should have spotted the problem right away.
Lastly, the court found that the district court did not abuse its discretion by denying Faciane’s motion for reconsideration.
My thoughts about this decision. First, the decision does not purport to apply to cases where the issues are complex or obscure for a layperson to decipher without needing to apply complex law to complex facts. Second, for those of us who represent plan participants in disability claims, I believe the best practice is to evaluate the insurance company’s calculation of the monthly benefit at the outset, even if our clients do not appear to dispute it. If you wait to challenge a benefit calculation, your client may be SOL. And for claims administrators, they would best protect their interests if they clearly and simply lay out the benefit calculation and all factors they considered at the time they approve a claim for benefits. They should also give appeal rights with these written determinations.
That’s all for now. See you next week!
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Breach of Fiduciary Duty
Fourth Circuit
Dawson-Murdock v. Nat’l Counseling Grp., Inc., No. 18-1989, __F.3d__, 2019 WL 3308535 (4th Cir. July 24, 2019) (Before King, Diaz, and Quattlebaum, Circuit Judges). The court vacated and remanded the district court’s decision dismissing Plaintiff’s breach of fiduciary duty claim against the employer of her deceased husband who failed to inform him he was no longer qualified for life insurance coverage due to his part-time work status (but continued to accept his premiums for coverage) and whose VP of HR informed Plaintiff that the company would pay the benefit and she did not need to appeal the denial to Unum, who insured the life benefit. The court explained that “when a plan administrator is responsible for verifying employee eligibility for participation in an employee benefit plan, that administrator acts in a fiduciary capacity with regard to that obligation.” Further, the act of instructing Plaintiff not to appeal was a fiduciary activity. Thus, the court found that Plaintiff’s Complaint sufficiently alleges Defendant’s fiduciary status in relation to these claims.
Ninth Circuit
United Association of Journeyman and Apprentices of the Plumbing and Pipe Fitting Industry v. Maniglia Landscape, Inc., et al., No. 17-CV-03037-RS, 2019 WL 3292347 (N.D. Cal. July 22, 2019) (Judge Richard Seeborg). Plaintiff, a former member of Laborers Union affiliate Local 270, alleged a claim for relief that trustees of the Laborers Union’s fringe-benefit trust funds breached their fiduciary duties to him. The court found that Plaintiff has statutory standing because he was an active participant in the funds at the time of filing. However, Plaintiff does not have standing to pursue injunctive relief because the evidence does not establish sufficient risk of a future injury to support standing. Plaintiff is no longer a participant in the Laborers Trust Funds and he is highly unlikely to suffer any future injury as a result of the Laborers Trustees’ conduct. That he might possibly rejoin the Laborers Trust Funds is too speculative. The court also rejected Plaintiff’s argument that he should be permitted to remain in the action in order to obtain attorneys’ fees as they cite no authority which would permit a plaintiff to proceed to trial on a claim for the sole purpose of obtaining a discretionary award of attorneys’ fees.
Disability Benefit Claims
Fourth Circuit
Shupe v. Hartford Life and Accident Insurance Company, et al., No. 1:18-CV-860, 2019 WL 3268826 (E.D. Va. July 19, 2019) (Judge Claude M. Hilton). This is a dispute over long-term disability benefits for the plaintiff who had been disabled and paid benefits for over ten years. The court granted Defendants’ motion to strike a letter from Plaintiff’s treating doctor purporting to explain her opinion regarding Plaintiff’s functionality after she had responded to a letter from Hartford by checking a box that she agreed with FCE results. The court found that the letter does not repudiate the doctor’s agreement with the FCE results which show Plaintiff can work full-time in a sedentary capacity. Since it is not new evidence or required to resolve this matter, the court struck the letter. On de novo review, the court found that Plaintiff is not disabled. In determining the amount of money Plaintiff must be able to make to not be considered disabled, the court found “the industry standard of 60% of Plaintiff’s prior salary without inflation to provide a reliable earnings threshold in the absence of specific policy language.” Since Hartford’s Employment Analysis Report identified three alternate occupations he could perform and make 60% of his earnings (that he made back in 2004), the court determined that Hartford did not act erroneously when it terminated benefits.
Arning v. Aetna Life Insurance Company, No. 5:18-CV-00054-DSC, 2019 WL 3268837 (W.D.N.C. July 18, 2019) (Judge David S. Cayer). The court granted Aetna’s motion for summary judgment, finding that its decision to deny long-term disability benefits was not an abuse of discretion and was supported by substantial evidence. The court explained that “Plaintiff experienced a similar or identical degree of pain over a two to three year period. The only change in Plaintiff’s condition at the time of his claim was his termination from employment because of poor performance. Aetna’s physician reviewer considered all the medical records, Plaintiff’s affidavit, and the video surveillance evidence.” The surveillance showed that Plaintiff sat for up to thirty minutes at a time while driving and eating at a restaurant. The court found that this was inconsistent with the treating physician’s opinion that Plaintiff was unable to sit at a ninety-degree angle.
Ninth Circuit
Filarsky v. Life Insurance Company of North America, No. 17-CV-02476-JSW, 2019 WL 3334613 (N.D. Cal. Feb. 1, 2019) (Judge Jeffrey S. White). On de novo review, the court found that Plaintiff is entitled to long-term disability benefits. First, the court found that the definition of disability stated in the policy is the one that applies, not the different definition of disability cited in two letters from LINA. The court found that a two-day FCE was “highly probative and persuasive.” Plaintiff’s subjective complaints were supported by the available evidence, including MRI results and post-hip-surgery modifications to his household and habits to accommodate his physical condition. LINA suggests that Plaintiff is a malingerer but the court found that nothing in the record undermines Plaintiff’s credibility. The court gave less weight to the four physicians who reviewed Plaintiff’s file and the one doctor who evaluated him in person. “The five physicians that conducted reviews of Dr. Filarsky’s file for LINA could only have reached their collective conclusions by disregarding Dr. Filarsky’s self-reported symptoms. That they did so without evidence of malingering or evidence that tended to undermine his credibility corrodes the reliability of their conclusions.” The court found that surveillance video showed activity within Plaintiff’s operative work restrictions and described limitations. And, in any event, one unusually “active” day does not prove that Plaintiff is not disabled. Lastly, the court found that the equitable relief Plaintiff seeks under ERISA Section 502(a)(3) is redundant and denied this claim.
Tenth Circuit
Carlile v. Reliance Standard Insurance Company, et al., No. 2:17-CV-1049, 2019 WL 3358705 (D. Utah July 25, 2019) (Judge Robert J. Shelby). The court previously granted summary judgment to Plaintiff, finding that Plaintiff was an active, full-time employee at the time his disability arose and denying remand to Reliance since it admitted Plaintiff was disabled and did not raise the issue of his disability during the administrative process when it had ample opportunity to conduct a thorough investigation. The court denied Reliance’s motion to alter judgment, determining that the decision was not contrary to controlling Tenth Circuit precedent, nor in clear error in failing to apply the plain language of the policy. On the issue of remand, Defendants’ maintain that Plaintiff was not disabled beginning on April 14, 2017 because he was able to start a new job. The court found this evidence was previously available because Plaintiff applied for LTD benefits on October 16, 2016 and filed suit in September 2017. “Defendants had ample opportunity to assess whether Carlile satisfied the 90-day Elimination Period from the time he applied for benefits until the time he filed suit in September, 2017, and could have presented it as part of the administrative record, but chose not to do so. Defendants may not prolong litigation by making piecemeal denial of benefits.”
Discovery
Eighth Circuit
Rightchoice Managed Care, Inc., et al. v. Hospital Partners, Inc., et al., No. 4:18-CV-06037-DGK, 2019 WL 3291570 (W.D. Mo. July 22, 2019) (Judge Greg Kays). The court ordered “the Discovery Defendants to (1) produce within seven days a ‘hit report’ of the seventeen suggested search terms for Plaintiffs’ review and then confer with them to narrow the production of documents; (2) file a brief by July 26 setting forth their argument that personal financial records are not discoverable in the face of an ERISA § 502(a)(3) claim; (3) produce by July 31 all relevant text messages contained on the business phones of key employees, where the messages are the sole source of relevant information; (4) answer within seven days and as if posed by interrogatories the deposition questions that their counsel instructed them not to answer; (5) limit the stated basis for objecting during depositions to a single word or short phrase; (6) stop instructing deponents to respond to questions only if they know the answer.”
Eleventh Circuit
Elia v. Cox Enterprises, Inc., et al., 1:19-cv-01102-WMR (N.D. Ga. July 25, 2019) (Judge William M. Ray, II). This is a minute order for proceedings held in chambers regarding Plaintiff’s request to conduct discovery directed toward Aetna, who was acting as third party administrator for the self-funded Cox, Inc. plan. Because Aetna is not the payor under this Plan, Plaintiff did not characterize this is as “conflict discovery” in the usual sense. Instead, he sought discovery going to two issues: (1) ensuring the “administrative record” includes all the acts known to Aetna, including those Aetna usually tries to keep out. This line of discovery explores Aetna’s financial relationship with Reliable Review Services (RRS) and whether RRS routinely provides reports undermining disability claims; and (2) discovery going to whether procedural irregularities existed sufficient to eliminate the high level deference usually accorded to claims administrators who are not payors. (Plaintiff’s brief is here.) According to Plaintiff’s attorney, Jeffrey Warncke, at the hearing, Judge Ray indicated that, even if the standard of review is arbitrary and capricious (“A&C”) review, Plaintiff gets discovery on the extent of Aetna’s relationship with RRS, and on its consultants’ history. Judge Ray stated that in his view, bias is always relevant, regardless of the standard of review. It goes to the reasonableness of relying on a consultant. Jude Ray also held that even if the standard of review is pure A&C, Plaintiff still gets to discover Aetna’s documents demonstrating “administrative processes and safeguards designed to ensure and to verify that benefit claim determinations are made in accordance with governing plan documents and that, where appropriate, the plan provisions have been applied consistently with respect to similarly situated claimants” within the meaning of 29 C.F.R. § 2560.503–1.
ERISA Preemption
Sixth Circuit
Progressive Insurance Company v. Blue Cross Blue Shield of Michigan et al., No. 19-CV-10177, 2019 WL 3342922 (E.D. Mich. July 25, 2019) (Judge Gershwin A. Drain). The court found that the auto insurance company’s claim under Mich. Comp. Laws Ann. § 500.3109a against the ERISA health plan insurance company is preempted by ERISA. The statute requires an insured’s qualified health coverage to cover injuries that occur as a result of a motor vehicle accident. Progressive paid a health care provider for treatment expenses it alleges it should have been covered by Blue Cross. The court found that resolving this dispute would require interpretation of the ERISA plan. The court has jurisdiction over the ERISA claim, but it dismissed the complaint because Progressive does not have standing as a participant or beneficiary and did not exhaust administrative remedies.
Van Horn v. Securian Life Ins. Co., et al., No. 1:19 CV 1315, 2019 WL 3346404 (N.D. Ohio July 25, 2019) (Judge Dan Aaron Polster). Plaintiff, the next of kin entitled to life insurance proceeds from the death of her father, brought suit against defendants, including a funeral home, who received direct payment from the insurance company along with Plaintiff’s grandmother who was not entitled to the benefit. The court found that Plaintiff’s negligence claim against the funeral home is not preempted by ERISA and denied its motion to dismiss. The court relied on the reasoning in Penny/Ohlmann/Neimann, Inc. v. Miami Valley Pension Corp., 399 F.3d 692 (6th Cir. 2005) for the proposition that the state law-based claim could be maintained against a non-fiduciary service provider. Here, the funeral home is not a traditional ERISA plan entity.
Ninth Circuit
Blakney v. Prasad, M.D., et al., No. 3:18-CV-00098-TMB, 2019 WL 3253961 (D. Alaska July 19, 2019) (Judge Timothy M. Burgess). In this declaratory judgment action alleging preemption of an Alaska state law by ERISA and by the terms of an ERISA plan, the court granted Plaintiff’s motion for reconsideration and dismissed his claims for lack of subject matter jurisdiction. “Blakney cannot demonstrate that he could have brought his underlying medical malpractice lawsuit under subsection (a)(1)(B). Blakney’s underlying state-law action concerns a medical malpractice claim, which—but for Defendants’ reliance on AS 09.55.548(b) as an affirmative defense and Plaintiff’s subsequent argument that the terms of the Plan and ERISA preempt that state statute—is unrelated to ERISA.” The court also found that Plaintiff does not and cannot satisfy the requirements of Section 502(a)(3) because the underlying medical malpractice claim is for monetary damages and the declaratory judgment is legal in substance. Further, the court found that the medical state tort claims arise independently of ERISA and the terms of the Plan. Thus, subject matter jurisdiction does not exist under § 1144(a).
Eleventh Circuit
Am. Funeral Fin., LLC v. UPS Supply Chain Sols., Inc., No. 1:17-CV-05475, 2019 WL 3252402 (N.D. Ga. July 19, 2019) (Judge Michael L. Brown). Plaintiff brought negligence and misrepresentation claims in state court against Defendant for misrepresenting that the deceased was covered under the ERISA-governed life insurance policy before it agreed to pay for the deceased’s funeral in exchange for the husband’s assignment of benefits. “[T]he essence of Plaintiff’s claim is that the ERISA plan did not provide coverage and the insurance company was correct in refusing to pay the benefit. That is because Plaintiff seeks damages from Defendant for falsely (whether negligently or recklessly) telling Plaintiff that there was coverage, causing Plaintiff to pay Mrs. Maness’s funeral and burial expenses. Plaintiff brought its state law claims precisely because there was never ERISA coverage and Defendant falsely said there was.” The court granted Plaintiff’s motion to remand because the claims are not preempted by ERISA and there is no federal jurisdiction. Both Davila prongs are not met here where Plaintiff could not have asserted its claim under § 502(a) and Plaintiff’s claims are supported by legal duties independent of those arising under ERISA.
Medical Benefit Claims
First Circuit
Brent S. v. Blue Cross Blue Shield of Massachusetts, Inc., No. 17-CV-11569-ADB, 2019 WL 3253357 (D. Mass. July 19, 2019) (Judge Allison D. Burroughs). In this putative class action challenging Defendant’s denial of claims for residential treatment of mental disorders in adolescents with an educational component, the court denied Defendant’s motion to dismiss. On the Section 502(a)(1)(B) claim, the court decided that it can not adjudicate the claim without the full record because it needs to dig deeper into whether Ashcreek Ranch qualifies as a covered residential treatment provider or not. On the Section 502(a)(3) claim alleging breach of fiduciary duty, the court found it premature to dismiss this claim as duplicative before determining whether Plaintiffs will be able to recover under Section 502(a)(1)(B).
Tenth Circuit
Robert O. v. Harvard Pilgrim Health Care, Inc., No. 2:17-CV-1251-TC, 2019 WL 3358706 (D. Utah July 25, 2019) (Judge Tena Campbell). The court determined that treatment at Uinta Academy in Utah was not covered by the Plan because Plaintiffs did not obtain preauthorization for coverage of Uinta’s out-of-network services, and additionally, the treatment was not medically necessary. The denial was supported by two separate and independent psychiatrists’ evaluations on the record which were not substantively refuted.
Peter E. v. United Healthcare Services, Inc., No. 2:17-CV-00435-DN, 2019 WL 3253787 (D. Utah July 19, 2019) (Judge David Nuffer). In this dispute over the payment of residential treatment for the beneficiary of a plan participant, the court granted Defendants’ motion to dismiss in part. The court denied dismissal of the plan participant’s ERISA Section 502(a)(1)(B) claim, finding that he has statutory and constitutional standing to bring this claim since he paid in excess of $60k for his son’s treatment and alleges those expenses should have been paid by the plan. The court did dismiss the claim under the Parity Act because Plaintiffs fail to identify any express limitation in the Plan’s language or process that could constitute a Parity Act violation. “Plaintiffs quote statutory language identifying types of limitation criteria, but they do not allege the criteria Defendants applied to deny coverage for Eric E.’s treatment, or how those criteria were more stringently applied than criteria for analogous medical or surgical treatment. The conclusory allegation that limitation criteria for medically necessary care of medical or surgical conditions are not applied ‘in the manner’ that Defendants excluded coverage for Eric E.’s treatment does not suffice.”
Pension Benefit Claims
Third Circuit
Hansen v. International Union of Painters & Allied Trades Industry Pension Plan, No. 18-2921, __F.App’x__, 2019 WL 3318141 (3d Cir. July 24, 2019) (Before: Hardiman, Krause, and Porter, Circuit Judges). The court affirmed the summary judgment in favor of the International Union of Painters & Allied Trades (IUPAT) Industry Pension Plan and the Plan’s Board of Trustees on Plaintiff’s claim for entitlement of more hours of service to be eligible for a disability pension. The court agreed with the district court that there is no requirement in the CBA that Plaintiff’s employers make contributions to the Pension Plan for workers’ compensation and unemployment benefits payments. The CBA confirms that these payments do not qualify as “Covered Employment” and the Board correctly declined to count them as equivalent benefit hours. The Board also did not act arbitrarily or capriciously when it found that Plaintiff’s vacation pay does not count as benefit hours under the Plan since Plaintiff’s interpretation counts every hour worked twice. This is because he seeks credit for each hour worked and then again for the one-dollar contribution as a vacation hour.
Fifth Circuit
Ketchum v. Saint-Gobain Corp., No. 2-18-CV-00562, 2019 WL 3311204 (W.D. La. July 22, 2019) (Judge James D. Cain, Jr.). Plaintiff claimed entitlement to retroactive disability retirement benefits going back to the first day of the month following the date he was last credited with an Hour of Service. Defendant claimed that he was not entitled to retroactive benefits more than 90 days from his date of application. The court found that Defendant did not abuse its discretion by treating similarly situated Plan participants differently because there was not sufficient facts regarding Plaintiff’s “co-worker to make a comparative analysis, and even if the circumstances were exactly the same, the Court finds that an alleged mistaken payment of benefits should not be deemed a gateway to retroactive disability benefits for all future participants.” The court did find that the language in the Plan was ambiguous and that the Committee did not give a fair reading of the Plan. “Had the author of the Plan intended to make ‘filing a written application’ an eligibility requirement for disability benefits, it could have done so by adding that requirement in § 4.3, in the proper place.” The Committee abused its discretion by interpreting the Plan to require the filing of a written application as a requirement for eligibility.
Plan Status
Sixth Circuit
Boden, et al. v. St. Elizabeth Medical Center, Inc., et al., No. CV 16-49-DLB-CJS, 2019 WL 3338850 (E.D. Ky. July 25, 2019) (Judge David L. Bunning). The court determined that the defined-benefit plan at issue is a “church plan” and is exempt from ERISA. In coming to this conclusion, the court determined that St. Elizabeth is associated with the Catholic Church. The court also found that the St. Elizabeth Medical Center Employees’ Pension Plan Administrative Committee meets the requirements necessary for an entity to be an “organization” within the scope of the ERISA exemption. Based on guidance from other courts and common sense, the court found that the Committee is maintaining the plan in this case. In addition, the Committee is a principal-purpose organization that is associated with the Catholic Church. The court dismissed the ERISA claims and dismissed the pending state-law claims pursuant to 28 U.S.C. § 1367(c)(3).
Pleading Issues & Procedure
Seventh Circuit
Griffin, M.D. v. Seven Corners, Inc., No. 4:18-CV-7-TLS, 2019 WL 3252111 (N.D. Ind. July 18, 2019) (Judge Theresa L. Springmann). The court, following the reasoning in Gatling v. Nickel, 275 F.R.D. 495 (E.D. Wis. June 28, 2011), invoked Rule 41(a)(2) to dismiss individual claims—but not the entire action—pursuant to a stipulation of the parties.
Provider Claims
Eighth Circuit
Air Evac EMS, Inc. v. USAble Mut. Ins. Co., No. 18-2264, __F.3d__, 2019 WL 3295077 (8th Cir. July 23, 2019) (Before Benton, Melloy, and Kelly, Circuit Judges). The court affirmed the dismissal of the complaint brought by an air ambulance service provider who alleged, among other things, that the health insurer’s limits on reimbursement for emergency air ambulance services violated ERISA. With respect to the ERISA claim, the court held that the insureds did not convey to the provider the right to sue the plan for equitable relief under ERISA Section 502(a)(3) where the assignment was only for “all rights any benefit claims and/or payments due from any third-party payor as reimbursement or payment for the Services, including but not limited to the rights to pursue administrative claims, request documents, receive payment and pursue litigation in order to obtain payment.”
Remedies
Ninth Circuit
Kerns v. Wenner, No. 18-56048, __F.App’x__, 2019 WL 3322390 (9th Cir. July 24, 2019) (Before: Schroeder, Silverman, and Clifton, Circuit Judges). The court affirmed the district court’s grant of summary judgment to Defendant because the pro se plaintiff “seeks only punitive damages, and ERISA does not allow recovery of punitive damages.” See Bast v. Prudential Ins. Co. of Am., 150 F.3d 1003, 1009 (9th Cir. 1998).
Statute of Limitations
Fifth Circuit
Faciane v. Sun Life Assurance Co. of Canada, No. 18-30918, __F.3d__, 2019 WL 3334654 (5th Cir. July 25, 2019) (Before Owen, Southwick, and Higginson, Circuit Judges). See Notable Decision summary above.
Subrogation/Reimbursement Claims
Seventh Circuit
Central States, Southeast and Southwest Areas Health and Welfare Fund v. Haynes, No. 17 C 6275, 2019 WL 3252231 (N.D. Ill. July 19, 2019) (Judge Virginia M. Kendall). The court granted the Fund’s motion for summary judgment on its claim for an equitable lien on third-party settlement money in the amount of related medical expenses ($312,286.50) that it paid for Defendant, a plan beneficiary. The court found that Defendant is contractually bound to the plan’s subrogation clause, rejecting her argument that she did not have notice of the plan’s terms or that as a third-party beneficiary she is not contractually bound by the terms. The court also found that the law firm holding Defendant’s settlement money in trust is a proper defendant. Regarding the lien amount, the court determined that the common fund doctrine does not override the plan’s term abrogating the common fund doctrine. The attorney’s lien is not superior to the Fund’s subrogation lien. The court also rejected Defendants’ request to reduce the lien amount because of a delay in receiving notice of the lien. The court imposed a constructive trust over the settlement fund.
Ninth Circuit
Interstate Realty Management Company Voluntary Employee Benefit Plan v. Wood, No. 218CV03038MCECKD, 2019 WL 3318724 (E.D. Cal. July 24, 2019) (Judge ). The court denied the plan participant’s motion to dismiss the self-funded plan’s lawsuit seeking equitable restitution to enforce its claim for reimbursement of $79,914.14 in treatment costs that it paid from a third-party settlement achieved by the plan participant. The court disagreed with Defendant that her out-of-pocket payment obligation limits any requirement that she reimburse the Plan. The court explained that the out-of-pocket limit relates to deductibles, copayments, and payment percentages that a member must pay as part of the Plan’s cost sharing but the Plan’s reimbursement lien relates to the amounts the Plan has paid and will pay for an injury. The former refers to the maximum a member must pay before the Plan’s obligation to cover expenses begins whereas the latter refers to the circumstances in which the member must reimburse the Plan after it begins to pay the medical bills. The court also noted this argument was already considered and rejected in Aetna Life Ins. Co. ex rel. Lehman Bros. Holdings v. Kohler, 2011 WL 5321005 (N.D. Cal. Nov. 2, 2011).
Withdrawal Liability & Unpaid Contributions
Third Circuit
Board of Trustees of Cement Masons’ Local 526 Combined Funds, Inc. v. R & B Contracting & Excavation, Inc., et al., No. CV 17-1432, 2019 WL 3307067 (W.D. Pa. July 22, 2019) (Magistrate Judge Dodge). “The Trustees contend that as Rogers is the sole shareholder and owner of R & B, he is an ERISA plan fiduciary who is personally liable for R & B’s delinquent fringe benefits (Count II of the Complaint) and that he committed the tort of conversion (Count III).” The court granted Plaintiff Board of Trustees of Cement Masons’ Local 526 Combined Funds, Inc.’s motion for summary judgment against Defendant William Rogers.
Fourth Circuit
International Painters and Allied Trades Industry Pension Fund, et al. v. Paper Master LLC, No. TDC-19-81, 2019 WL 3296716 (D. Md. July 22, 2019) (Magistrate Judge Stephanie A. Gallagher). The court recommended granting Plaintiffs’ Motion for Judgment by Default and awarding Plaintiffs, against Defendant, a total judgment of $62,312.80, along with the other relief requested in Plaintiffs’ proposed “Judgment by Default.”
Sixth Circuit
Directors of The Ohio Conference of Plasterers and Cement Masons Combined Funds, Inc. v. Meerkat Construction, Inc., No. 3:18-CV-00122, 2019 WL 3358598 (S.D. Ohio July 19, 2019) (Judge Walter H. Rice). The court sustained Plaintiff’s motion for summary judgment and ordered Defendant to submit to a payroll audit of its records and books for the period of April 2016 through the present, not later than the close of business on Friday, August 16, 2019. The court entered Judgment in favor of Plaintiffs and against Defendant for all unpaid and delinquent contributions, liquidated damages and interest, as defined by the CBAs, Trust Agreements, and the Collection Policy, for the period of April 2016 through the present, in an amount to be determined following the audit; and a hearing on damages will be held following the audit’s completion.
Seventh Circuit
Knowles v. Dodds Masonry Construction Company, Inc., No. 119CV00443SEBMPB, 2019 WL 3342084 (S.D. Ind. July 24, 2019) (Judge Sarah Evans Barker). The court denied Defendants’ motion to dismiss Plaintiff’s ERISA lawsuit seeking relief for Defendant’s failure to contribute to the Funds according to the terms of a CBA with the Union.
Eighth Circuit
Iron Workers St. Louis District Council Pension Trust, et al. v. Bumpy’s Steel Erection, LLC, No. 4:18CV2032 HEA, 2019 WL 3343358 (E.D. Mo. July 25, 2019) (Judge Henry Edward Autrey). The court denied Defendant’s motion to dismiss Plaintiff’s complaint alleging that Defendant is delinquent in paying contributions to Plaintiffs’ retirement funds on behalf of employees working in several Iron Workers Local Unions’ jurisdictions.
Ninth Circuit
Rossman v. Iniguez, et al., No. 19-CV-00391-RS, 2019 WL 3292348 (N.D. Cal. July 22, 2019) (Judge Richard Seeborg). The court denied Plaintiff’s motion for a preliminary injunction prohibiting Iniguez and Hernandez from prosecuting their claims in United Association of Journeyman & Apprentices of the Plumbing and Pipe Fitting Industry, Underground Utility/Landscape Local Union No. 355 v. Maniglia Landscape, Inc., No. 17-cv-3037-RS, retaining legal counsel to pursue legal actions, or acting as ERISA trustees in any way other than as part of the Board of Trustees. The court found that she makes a strong showing on the likelihood of success on the merits, but she fails to carry her burden with respect to irreparable harm.