Today marks the five-year anniversary from the very first ERISA Watch newsletter that I sent out on August 29, 2014.  If you’ve been a subscriber since the beginning, you have received over 250 ERISA Watch case summary emails from me over the past five years.  The number of subscribers has more than doubled to a current count of 487!

I want to take a moment to thank you all for being part of this forum that has entertained my musings of the litigation developments in our field over the past several years.  Staying on top of the recent decisions and getting out the newsletter on a weekly basis (with very few exceptions) has been quite the labor of love but I truly enjoy this work and hope that it brings something useful to all of your practices (even the defense attorneys!)

As a birthday present for ERISA Watch, I’d like to ask each of you to go through your rolodex and see if you can identify one or more colleagues who may be interested in receiving these weekly case updates and getting them to subscribe.  They can sign up by clicking here.

If you’re in the East Bay today and want to stop by for birthday cake, please do!  If not, please check out the recent case updates since Monday.  I’ll be back next week!

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

Breach of Fiduciary Duty

First Circuit

Governo v. Allied World Insurance Company, No. CV 17-11672-RGS, 2019 WL 4034810 (D. Mass. Aug. 27, 2019) (Judge Richard G. Stearns).  Plaintiffs, an attorney and law firm, allege that Allied World failed to provide a defense in an action brought against them in state court.  The court agreed with Allied World that the third counterclaim is not covered under the Policy.  “The third counterclaim – asserting an ERISA violation over plaintiffs’ purported failure to provide benefits owed under a defined benefit plan – does not constitute a legal services wrongful act because a benefit determination is not a service that a lawyer performs in the ordinary course of professional practice.”

Second Circuit

Conroy v. High Peaks Dental Professional Partnership, No. 818CV01308BKSCFH, 2019 WL 3997118 (N.D.N.Y. Aug. 23, 2019) (Judge Brenda K. Sannes). Plaintiff alleged that Defendants breached their fiduciary duty to him by failing to provide him with quarterly retirement plan statements.  The court granted Defendants’ motion for judgment on the pleadings.  The court explained that 29 U.S.C. § 1025(a)(1) only requires a plan administrator to furnish quarterly statements only where participants have the right to direct the investment of assets in their accounts.  The plan at issue here provides that a Trustee or another designated person or entity is responsible for the investment of all assets held by the Plan. Since Plaintiff was entitled to annual statements only, he has failed to state a claim based on Defendants’ alleged failure to furnish quarterly statements. 29 U.S.C. § 1025(a)(1)(A)(ii).  See, relatedly, Embezzler, paid restitution, gets jail time.

Disability Benefit Claims

Third Circuit

Noga v. Reliance Standard Life Insurance Company, No. CV 18-3455, 2019 WL 4034758 (E.D. Pa. Aug. 27, 2019) (Judge Schmehl).  The court determined that Reliance’s decision to terminate Plaintiff’s long-term disability benefits was arbitrary and capricious where Reliance rejected the opinions of its own nurses and claims manager regarding Plaintiff’s disability and rejected the opinion of Plaintiff’s treating physician and its nurses without explaining the justification.  Further, Reliance sent his claim out for paper reviews (both found him not disabled) after its nurses and a claims manager recommended reinstating benefits.  The court could “only infer that Reliance was seeking an opinion that would allow them to overturn the decision to reinstate Noga’s benefits.”  The court declined to consider an affidavit from the claims manager, Jamil Jackson, explaining why the decision was made to seek outside medical evidence only a day after Nurse Toth found Plaintiff to be disabled.  The court explained that it can only consider evidence that is part of the administrative record and there is nothing in the record justifying Reliance’s decision to seek additional medical reviews.

Sixth Circuit

Davis v. Hartford Life & Accident Insurance Company, No. 3:14-CV-507-CHB, 2019 WL 4017238 (W.D. Ky. Aug. 26, 2019) (Judge Claria Horn Boom).  The court found that Hartford’s denial of Plaintiff’s “any occupation” disability benefits was not an abuse of discretion.  Plaintiff claimed disability due primarily to spinal complications related to his multiple myeloma.  The court determined that Hartford’s structural conflict of interest did not adversely affect the claims and appeals process.  Additionally, nothing in the record suggests that the independently hired physicians were incentivized to find Plaintiff not disabled.  The court did not find anything amiss with Hartford’s request for clarification from the IME doctor.  “Quite the opposite – Hartford Life went to great time and expense to ensure that the opinions it did receive were cogent and based upon sound medical evidence.”  The court found the following to be substantial evidence supporting Hartford’s decision:  1) Plaintiff’s primary care physician, who opined that Plaintiff could perform full-time work; 2) Dr. Philip J. Marion (“independent” reviewer) and Dr. Rosaline Vasquez (same) both opined that Plaintiff’s pain and conditions did not prohibit him from returning to full-time work; 3) Dr. Frederich P. Wener’s IME, which concluded that Plaintiff could carry out sedentary to light work with certain conditions; 4) Plaintiff’s oncologist provided conflicting reports throughout the entire claims process; 5) Plaintiff’s orthopedist referred Plaintiff to physical therapy to help with his pain management; and 6) Plaintiff’s neurologist concluded that Plaintiff could perform full-time work with certain restrictions and limitations. 

Seventh Circuit

Wilcox v. Aetna Life Insurance Company, No. 18-C-463, 2019 WL 4039127 (E.D. Wis. Aug. 26, 2019) (Judge William C. Griesbach).  The court found that Aetna’s decision to deny his long-term disability benefits was not arbitrary and capricious.  The court found that Aetna considered Plaintiff’s medical conditions and could seek objective evidence of physical limitations even though Plaintiff was disabled due to subjective pain symptoms.  The record does not include specific tests that objectively demonstrate Plaintiff’s limitations due to his pain.  The court also found that there is evidence that Plaintiff was “overmedicated.”  Aetna sufficiently explained why they were crediting their doctors’ opinions over Plaintiff’s treating physicians.  Aetna took adequate safeguards to minimize any conflict of interest by getting an independent medical review and vocational report.  An occupational medicine doctor who was not a pain management specialist was qualified to assess Plaintiff’s medical conditions.  The court also determined that the policy did not require Aetna to pay benefits based on increases in the Consumer Price Index, rather the policy has a provision for adjusted predisability earnings that factors in annual CPI increases.  The court found that the Coventry Vocational Report reasonably assessed Plaintiff’s transferable skills and possible other job positions that satisfied the Plan’s reasonable occupation provision; the use of a 100-mile radius when searching for potential positions was reasonable; and the use of 60% of Plaintiff’s adjusted predisability earnings rather than 80% was correct.


Tenth Circuit

Harper v. Aetna Life Insurance Company, No. 18-CV-668-CVE-JFJ, 2019 WL 4015891 (N.D. Okla. Aug. 26, 2019) (Magistrate Judge Jodi F. Jayne).  In this dispute over life insurance benefits, the court granted in part and denied in part Plaintiff’s motion to conduct discovery.  The court denied Plaintiff depositions of Salvatore Cavaliere (ALIC claims analyst), Kellie Greenleaf (Life Appeals Consultant assigned the appeal), Michael Corarito (nurse in ALIC’s medical underwriting department), and Douglas Burdick (Claims Appeal Specialist).  The court explained that “Plaintiff essentially seeks to explore why these ALIC employees did not conduct a better, different, or more thorough investigation of the claim,” but that this discovery is either irrelevant to the district court’s review or not proportional to the needs of the case under Rule 26(b)(1).  The court did permit a one-hour deposition of Defendant Donna Matlock, who Plaintiff alleges breached fiduciary duties to Plaintiff. The court explained that courts generally permit limited extra-record discovery on ERISA breach of fiduciary duty claims.  The court found that Matlock’s testimony regarding the details surrounding Plaintiff’s enrollment and Matlock’s “own lack of knowledge that the plan did not allow co-employee spouses to take out insurance on each other,” is relevant and within the scope of permissible discovery. 

ERISA Preemption

Sixth Circuit

Klaiss v. Steel Tool & Engineering Co., No. CV 18-12053, 2019 WL 4010458 (E.D. Mich. Aug. 26, 2019) (Judge Linda V. Parker).  The court determined that Plaintiff’s claims for unjust enrichment under Michigan law and marital discrimination in violation of Michigan’s Elliott-Larsen Civil Rights Act are preempted by ERISA.  Plaintiff’s unjust enrichment claim relates to money his employer deducted from his wages as contributions to the cost of his coverage under the employer’s welfare benefit plan.  The court determined that Plaintiff’s unjust enrichment claim is “tantamount to an action seeking return of contributions made under the terms of the plan and for restitution of any overpayments under [ERISA’s civil enforcement provision].” Plaintiff’s marital discrimination claim is based on the assertion that married employees paid a higher financial penalty for tardiness and absences that those who were single.  Because the penalty at issue is the contribution employees are required to make for their insurance coverage under the welfare benefit plan, Plaintiff is essentially alleging discrimination in the provision of employee benefits pursuant to an ERISA plan.  Since the alleged discrimination is not also prohibited by federal law, the state law claim is preempted by ERISA.

Life Insurance & AD&D Benefit Claims

Seventh Circuit

Wildy v. The Prudential Insurance Company of America, No. 18 C 8247, 2019 WL 4014251 (N.D. Ill. Aug. 26, 2019) (Judge John Z. Lee).  The court dismissed Plaintiff’s claim for life insurance benefits on the life of his deceased wife, because although he paid the premiums for the coverage and his employer’s system did not alert him that outstanding information was required, he did not submit evidence of insurability for the amount above the “Non-medical Limit” of $20,000.  The court enforced the Plan as written; it required Plaintiff to fulfill certain conditions to obtain spousal life-insurance coverage and he did not do so.  The court also dismissed his negligent misrepresentation claim, which Plaintiff re-casted as estoppel, because he failed to allege facts indicative of “extreme circumstances.”

Tenth Circuit

Hartford Life and Accident Insurance Company v. Jones-Atchison, No. CIV-17-654-D, 2019 WL 4007218 (W.D. Okla. Aug. 23, 2019) (Judge Timothy D. DeGuisti).  The court determined that the life insurance policy at issue is governed by ERISA, where the policy itself states that the plan administrator is the decedent’s employer, it is established for the benefit of the employees, and it is an employee welfare benefit plan subject to ERISA.  The court granted Hartford’s motion to dismiss the Children’s state law claims for breach of contract and fiduciary duty since they are preempted by ERISA.  The Children assert that Hartford violated ERISA by failing to pay the benefits to the intended beneficiary.  The court determined that ERISA does not impose a duty on Hartford to investigate the decedent’s father’s sworn statements that decedent did not have any children or investigate the claim for benefits by searching non-plan documents to identify other potential beneficiaries.  The court granted Hartford’s motion to dismiss the intervenor’s amended counterclaim.

Pension Benefit Claims

Second Circuit

Latronica v. Local 1430 International Brotherhood of Electrical Workers Pension Fund, No. 17-CV-00550 (NSR), 2019 WL 3997989 (S.D.N.Y. Aug. 23, 2019) (Judge Nelson S. Roman).  The Fund denied Plaintiff pension service credit for his employment from 1979 to August 1995 on the basis that he became a supervisor effective January 1, 1981, and therefore was no longer an “eligible participant” under the Plan.  The Fund also determined that, other than the duration of his employment with the New Jersey Sports and Exposition Authority, Plaintiff was not engaged in “covered employment.” The Fund calculated his pension based on 16 years and 7 months of pension service credit rather than the maximum of 30 years of credit pension service to which he claimed entitlement.  On the standard of review, the court found that there was “clearly a conflict of interest because the Plan is jointly administered by both employer and union appointees.”  Evidence of conflict included that “the Trustees were made acutely aware of the financial stakes before deciding whether to grant Plaintiff full pension benefits, never investigated his income discrepancy, and never mentioned this to Plaintiff as a factor supporting their conclusion.”  The court also found the Fund’s decisionmaking suffered from several deficiencies and proof that the Fund’s conflict of interest affected its decision.  The court gave the conflict of interest significant weight.  The court declined to consider an affidavit put forward by the Fund since there is no good cause for the court to consider its substantive analysis regarding the Fund’s decision to deny the claim.  The court determined that the Trustees’ construction of the Plan as excluding supervisors from entitlement to pension benefits was arbitrary and capricious.  The court also determined that the Trustees abused their discretion in concluding that Plaintiff was a supervisor from 1981 to 1995 and not a bargaining unit member.  The court ordered the Fund to pay Plaintiff the full benefits to which he is entitled under the Plan (retroactive and prospective), as well as prejudgment interest at the rate of 9% pursuant to N.Y. C.P.L.R. § 5004.15.

Eighth Circuit

Huntsman v. 3M Co., No. CV 19-02 (PAM/DTS), 2019 WL 4015158 (D. Minn. Aug. 26, 2019) (Judge Paul A. Magnuson).  Plaintiff seeks to force his former employer to stop giving a portion of his pension proceeds to his ex-wife and has brought 18 state-court appeals over the past 19 years.  The original QDRO was modified to give his ex-wife an extra $1,000/month due to him being in arrears in his spousal maintenance obligations and because of the attorneys’ fees she incurred due to defending the QDRO in various fora.  The court rejected Plaintiff’s claim that the administrator had to put the entire QDRO amount, rather than the extra $1,000/month, in an escrow account (due to the instant lawsuit) since the Minnesota Court of Appeals affirmed the original QDRO.  The court also found that the administrator correctly determined that the modified QDRO complied with ERISA and there was no breach of fiduciary duty.


Fourth Circuit

Kinsinger v. Smartcore, LLC, No. 317CV00643FDWDCK, 2019 WL 4026257 (W.D.N.C. Aug. 27, 2019) (Judge Frank D. Whitney).  The court determined that Plaintiffs can recover prejudgment interest on the denied claim for payment for a hysterectomy and related treatment.  The court explained that these benefits should have been paid and Defendants’ positions against non-payment were untenable.  Defendant paid the balance on Plaintiff’s claim the day before trial, but the court found that any payments made more than three years later do not fully compensate Plaintiffs. “Furthermore, because of the time value of money, denying prejudgment interest would create a windfall for Defendants by allowing Defendants to use the money that should have been paid, interest free, for three years. . . . The Court declines to create a perverse incentive for ERISA fiduciaries to delay paying appropriate benefits to beneficiaries on time.”  The court found the date which Plaintiff’s medical treatment should have been paid for under the Plan to be the appropriate starting date for accrual of prejudgment interest.  The court also found that Plaintiffs are entitled to prejudgment interest at a rate of eight percent as provided in N.C. Gen. Stat. § 24-1. 

Retaliation Claims

Second Circuit

Conroy v. High Peaks Dental Professional Partnership, No. 818CV01308BKSCFH, 2019 WL 3997118 (N.D.N.Y. Aug. 23, 2019) (Judge Brenda K. Sannes). The court determined that Plaintiff has not alleged that Defendants engaged in any conduct prohibited under ERISA Section 510, where Plaintiff alleges that he sought to obtain quarterly-pension statements from Defendants on multiple occasions, but Defendants repeatedly failed to provide said statements.  There is no allegation that Defendants discharged, disciplined or discriminated against him for requesting quarterly statements or engaging in any other ERISA-protected activity. 

Statute of Limitations

Second Circuit

Kunsman, et al. v. Conkright, et al., No. 08-CV-6080, 2019 WL 4016592 (W.D.N.Y. Aug. 26, 2019) (Judge David G. Larimer).  The court lifted the stay and denied Plaintiff McNeil’s motion for summary judgment.  The court found that the Second Circuit’s decision in Testa v. Becker, 910 F.3d 677 (2d Cir. 2018) is controlling on the statute of limitations issue.  The court concluded that the “1998 SPD fully and adequately disclosed the details of the phantom account offset, and that the limitations clock began ticking upon plaintiffs’ receipt of that SPD.”  Since the lawsuit was not filed until 2008, well past the expiration of the six-year limitations period for denial-of-benefits claims, the lawsuit is untimely.  The court found no basis for equitable tolling.