Think of someone driving 17 miles per hour over the speed limit on an unpaved road.  What words initially come to mind?  If one of them is “crime” then you might agree with the outcome in this week’s notable decision, Caldwell v. Unum Life Insurance Company of America, No. 17-8078, __F.App’x__, 2019 WL 4463495 (10th Cir. Sept. 18, 2019).

Caldwell involves a dispute over accidental death and dismemberment (AD&D) benefits for the death of the insured who died “when he was thrown from the vehicle he was driving at 74 mph on an unpaved road.”  Unum Life Insurance Company of America denied payment of AD&D benefits based on an exclusion in its policy for losses “caused by, contributed to by, or resulting from … an attempt to commit or commission of a crime.”  The district court found that Unum’s interpretation of “crime” to include speeding (which is a misdemeanor under Wyoming law) was reasonable and made in good faith.  Caldwell v. Unum Life Ins. Co. of Am., 271 F. Supp. 3d 1252, 1264 (D. Wyo. 2017), aff’d, No. 17-8078, 2019 WL 4463495 (10th Cir. Sept. 18, 2019).  It explained that the term “crime” is not ambiguous; it is a violation of the law.  Even if some level of speeding is deemed normal in Wyoming, people understand speeding to be a crime.  The district court granted summary judgment to Unum.

The Tenth Circuit affirmed the district court’s judgment, though not on the basis that the term “crime” is unambiguous given an intervening Supreme Court decision.  See United States v. Stitt, 139 S. Ct. 399, 405 (2018) (“The word ‘burglary,’ like the word ‘crime’ itself, is ambiguous.”).  The district court’s decision rested on its decision that Unum’s interpretation of its policy was reasonable, not on its finding that crime is unambiguous.

The court rejected Plaintiffs’ argument that Unum’s claims manual would treat the speeding in this case as a traffic violation not encompassed by the crime exclusion.  The court found that the manual did not offer an answer for this situation and also judicial reliance on the manual would be problematic where there is no evidence it was available to the insured when the policy was purchased.  “If claims manuals are, in essence, treated as part of the insurance contract, they will be written with the technical precision so beloved by lawyers and defeat the purpose of providing general guidance to claims agents. We doubt that the interests of insureds would benefit from that process.”  

The court’s opinion is relatively succinct.  Judge Phillips issued a lengthy dissent.  He concluded that the term crime is ambiguous and that Unum’s policy manual says that the crime exclusion is not intended to apply to traffic offenses (except for driving while intoxicated).  Under Wyoming law, speeding is a traffic violation.  Thus, Judge Phillips would hold that Unum acted arbitrarily and capriciously in denying AD&D benefits under the crime exclusion.

I must side with Judge Phillips on this one.  Anyway, if you have AD&D coverage, make sure you keep a close eye on your speedometer.  

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

Attorneys’ Fees

Second Circuit

Montefiore Medical Center v. Local 272 Welfare Fund, et al., No. 09-CV-3096 (RA)(SN), 2019 WL 4565099 (S.D.N.Y. Sept. 19, 2019) (Judge Ronnie Abrams).  Plaintiff, a nonprofit hospital, previously succeeded on its ERISA claims for reimbursement of medical services provided to participants of the self-funded employee benefit plan.  The court granted Plaintiff’s motion for attorneys’ fees and costs in part.  The court approved the sought-after hourly rates ranging from $170 to $518 an hour for attorneys and $166 to $204 for paralegals.  The court applied a 75% reduction for fees and costs incurred up to and including the trial in the First Action, but otherwise adopted Plaintiff’s proposed reductions.  The court excluded 11.2 hours billed by three paralegals and imposed an additional 20% reduction on the total number of hours expended.

Trustees of The New York City District Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, and Apprenticeship, Journeyman Retraining, Educational and Industry Fund, et al., v. S&S Kings Corp., No. 19-CV-01052 (RA), 2019 WL 4412705 (S.D.N.Y. Sept. 16, 2019) (Judge Ronnie Abrams). Petitioners sought confirmation of an arbitration award against Respondent, which was unopposed. The court granted the petition, but reduced requested attorneys’ fees. The court found the hours billed to be reasonable, but reduced the hourly rate from $350 to $300 per hour for the “Of Counsel” attorney. The court noted that within the last year, it had declined this attorney’s request for a rate of $350 per hour, and instead granted fees at a rate of $300 per hour. The court stated that there was no meaningful distinction between his prior cases and this case so as to warrant granting a rate of $350 per hour. The court also reduced the rate of $275 per hour to $225 for an associate who graduated from law school in 2018 based on her limited experience. 

Breach of Fiduciary Duty

Second Circuit

Ferguson v. Ruane Cunniff & Goldfarb Inc., No. 17-CV-6685 (ALC), 2019 WL 4466714 (S.D.N.Y. Sept. 18, 2019) (Judge Andrew L. Carter, Jr.).  Plaintiffs allege that Ruane Cunniff & Goldfarb Inc. breached its fiduciary duties with respect to the Profit Sharing Account portion of the Plan by imprudently concentrating an enormous amount of the Plan assets in stock which caused the Plan to suffer over $100 million in losses.  Plaintiffs also claim that DST Systems, Inc, the Advisory Committee of the DST Systems, Inc. 401(k) Profit Sharing Plan, and the Compensation Committee of the Board of Directors of DST mismanaged the 401(k) portion of the Plan.  The court granted Defendants’ motion to dismiss the Second Amended Complaint because the SAC fails to state a claim that the DST Defendants breached their duty of loyalty by engaging in purposeful actions to benefit themselves or a third-party.  Plaintiffs did not state a breach of the duty of prudence claim because “Plaintiffs’ SAC only alleges that DST Defendants breached its duty of prudence by failing to include more affordable share classes within the Plan. However, there are many reasons to select certain share classes. Considering that it would be improper for the Court to ‘micromanage’ fiduciary investment choices, Plaintiffs were required to allege that DST Defendants’ share class selection process was flawed or that certain investments tainted the entire Plan.”  The court also did not consider the allegations related to the administrative fees as circumstantial factual allegations supporting their breach of the duty of prudence.  The poor performance of investment options is not enough to create a reasonable inference that plan administrators failed to conduct an adequate investigation.  “In sum, Plaintiffs failed to allege sufficient facts to suggest that a prudent fiduciary in like circumstances would have acted differently from DST Defendants.”

Reed, et al. v. Queens Village Committee for Mental Health for J-Cap, Inc., et al., No. 18CV3114AMDJO, 2019 WL 4452386 (E.D.N.Y. Sept. 17, 2019) (Judge Ann M. Donnelly). The court denied in part and granted in part the “Queens Village defendants” motion to dismiss and denied Principal’s motion to dismiss the co-fiduciary liability claim against it.  In so doing, the court held that there was no statute of limitations preclusion of a continuing violation by the named fiduciary in repeatedly failing to enforce the Plan’s right to receive contractually required contributions from the employer each year that it contributed to the Plan; that the CEO who controlled the failure to enforce the Plan’s right to payment was a fiduciary because she exercised authority and control over pension plan assets; that the COO and CFO who merely completed the annual Form 5500s are not fiduciaries; and that Principal, the directed trustee, could have co-fiduciary liability under ERISA § 405(a)(3) for knowing that the named fiduciary was not enforcing the Plan’s right to payment of the delinquent contributions.

Local 553, I.B.T. v. Local 803 Pension Fund, et al., No. 17-CV-5823 (JMF), 2019 WL 4392517 (S.D.N.Y. Sept. 13, 2019) (Judge Jesse M. Furman). Plaintiff brought suit under ERISA seeking declaratory judgment that two provisions (removal of trustee for “cause”, and eligibility for becoming a trustee – the “participation” provision) of the agreements that govern Defendant Funds violate ERISA and an order permanently enjoining Defendants from enforcing them. Plaintiff contended that the provisions unlawfully entrenched trustees, thereby interfering with the exercise of fiduciary duties. The court found that the “cause” provision violated ERISA because it limited trustee removal to narrowly delineated circumstances and did not allow for a trustee’s termination on reasonably short notice, as required by ERISA. The court also found that the “participation” provision violated ERISA because it would not permit the termination of the Funds’ fiduciaries’ services on reasonably short notice, considering the circumstances, so the plan would not become locked into an arrangement that may become disadvantageous to the benefit fund. 

Fourth Circuit

Peters v. Aetna Inc., et al., No. 1:15-CV-00109-MR, 2019 WL 4440200 (W.D.N.C. Sept. 16, 2019) (Judge Martin Reidinger). Plaintiff alleged that Defendants engaged in a fraudulent scheme whereby insureds were paying administrative fees because Defendants misrepresented such fees as medical expenses. The court held that Aetna acted in a manner consistent with the terms of the plan, that Plaintiff’s evidence did not show any specific misrepresentations by Aetna, and that Plaintiff and the plan actually saved money. The court also found that any administrative costs are internal to the actual providers, and as such, are not Aetna’s administrative costs. In sum, Plaintiff failed to show any injury to herself or to the plan, or show that Defendants violated any obligation, fiduciary or otherwise.

Class Actions

Sixth Circuit

Brown v. Nationwide Life Ins. Co., No. 2:17-CV-558, 2019 WL 4543538 (S.D. Ohio Sept. 19, 2019) (Judge Edmund A. Sargus, Jr.).  In this putative class action alleging excessive recordkeeping and administrative fees with respect to employee benefit plans, the court denied Plaintiffs’ motion to certify a plaintiff and defendant class.  The court found that the putative Defendant Class members do not share a juridical link because the alleged injury of excessive fees is not traceable to a specific provision in a shared contract.  There is also no evidence to suggest that Defendants acted in concert when investigating the terms of their proposed plan agreements. The court found that the parties did not standardize their conduct by contracting with Nationwide as part of a joint enterprise.  Because Plaintiff lacks standing to sue each Defendant, Rule 23 certification of the putative Defendant Class would be improper.  Because Plaintiff lacks standing to sue a class of defendants, her plaintiff class allegations on behalf of plans to which “she is a complete stranger” also fail.  The court denied as moot Defendants’ motion to strike the class allegations from the SAC.

ERISA Preemption

Second Circuit

Frankel, M.D. v. U.S. Healthcare, Inc., No. 18 CIV. 06378 (ER), 2019 WL 4450640 (S.D.N.Y. Sept. 17, 2019) (Judge Edgardo Ramos).  Plaintiffs allege that Defendants violated the law when it decided to stop paying for services at Mobile Clinics which were designed to reach members who would otherwise not access to cardiovascular care.  Specifically, Plaintiffs alleged, among other claims, the following:  Count I: Breach of the implied covenant of good faith and fair dealing; Count II: Violation of New York General Business Law § 349; Count III: Breach of contract; Count IV: Violation of the ACA and New York Public Health Law § 4406(1); Count V: Promissory estoppel; Count VI: Unjust enrichment; Count VII: Tortious interference with contract; and Count VIII: Violation of New York Insurance Law § 3224-a.  The court found that Plaintiffs alleged sufficient facts to overcome Defendants’ motion to dismiss as expressly preempted by ERISA because it is not obvious on the face of the complaint that all claims relate to services rendered under covered plans.  “[T]he Court cannot determine whether all the relevant Members’ plans, namely those belonging to Members employed by government agencies or churches, are governed by ERISA.”

Ninth Circuit

Wilson v. Bank of America Pension Plan for Legacy Companies, et al., No. 18-CV-07755-TSH, 2019 WL 4479677 (N.D. Cal. Sept. 18, 2019) (Magistrate Judge Thomas S. Hixson). This case involves a dispute over the amount of pension benefits. On reconsideration, the court found that Plaintiff’s state law claims were preempted by ERISA and dismissed them. The court stated that Plaintiff’s professional negligence and negligent misrepresentation claims alleging that Defendant Fidelity produced inaccurate benefits accrual information are preempted because the success of Plaintiff’s claims depends on the existence of an ERISA plan. Fidelity also moved to dismiss Plaintiff’s breach of fiduciary duty claim against it. The court granted the motion because Fidelity was not acting as a fiduciary when it provided pension estimates. The court also held that the allegation that BOA was not aware of a single error in one plan did not create an inference that it failed to prudently discharge its duties with respect to the plan, and thus there was no breach of fiduciary duty, if one even existed.

Life Insurance & AD&D Benefit Claims

Sixth Circuit

Demange v. Life Ins. Co. of N. Am., No. 3:18-CV-345, 2019 WL 4541818 (N.D. Ohio Sept. 19, 2019) (Judge Jeffrey J. Helmick).  In this dispute over payment of life insurance benefits, the court decided three motions made by Plaintiff.  First, the court determined that photos submitted by Plaintiff to LINA during the appeal process are part of the administrative record.  LINA did not oppose this motion.  Second, the court determined that this language contained within “Proof of Loss” is sufficient to confer discretionary authority: “[w]ritten or authorized electronic proof of loss satisfactory to Us…within 90 days of the loss for which [a] claim is made.”  Lastly, the court denied Plaintiff discovery without prejudice.  Though arbitrary and capricious review applies, the parties must make a good-faith effort to resolve any disputes under Local Rule 37.1(a).  

Seventh Circuit

Zartman v. Tame & Metropolitan Life Insurance Company, No. 1:18-CV-133-HAB, 2019 WL 4393681 (N.D. Ind. Sept. 12, 2019) (Judge Holly A. Brady).  The court determined that MetLife’s denial of Plaintiff’s claim for benefits as the beneficiary of his deceased mother’s life insurance policy was “downright unreasonable.”  The court found that his mother substantially complied with the beneficiary designation requirements and plainly evidenced her intent to remove her ex-husband as a beneficiary from all of her employer-provided benefits.  (MetLife paid the benefit to the ex-husband.)  She also clearly attempted to include the information required for her children, including their names, relationships, dates of birth, addresses, and share percentages.  The court found that MetLife’s reasons for rejecting the form – failure to provide demographic information for a typo and failure to comply with a direction on the form – “are both patently unreasonable and constitute deficiencies far more innocuous than those in comparable cases.” The court also chastised MetLife for not bringing to its attention the Sixth Circuit’s decision in Guinn v. General Motors, LLC, 766 Fed. Appx. 331 (6th Cir. 2019), a decision handed down less than six months ago involving the same employer and similar facts.  Indiana Rule of Professional Conduct 3.3 states that a lawyer shall not knowingly fail to disclose authority to the tribunal that is adverse to the position of the client.  The court awarded Plaintiff his designated share of the life insurance policy.

Tenth Circuit

Caldwell v. Unum Life Insurance Company of America, No. 17-8078, __F.App’x__, 2019 WL 4463495 (10th Cir. Sept. 18, 2019) (Before Hartz, Phillips, and Eid, Circuit Judges).  See Notable Decision summary.

Medical Benefit Claims

Tenth Circuit

Weiss v. Banner Health, No. 17-CV-00443-DDD-NYW, 2019 WL 4511632 (D. Colo. Sept. 19, 2019) (Judge Daniel D. Domenico).  The court determined that Defendant was not arbitrary and capricious when it denied Plaintiff’s request for pre-authorization of a procedure known as Autologous Chondrocyte Implantation (“ACI”) because it was not medically necessary.  The court found that it was reasonable for Defendant to rely on the Milliman Guidelines even though the Plan in this case does not specifically refer to the Guidelines as a basis for determining medical necessity.  The administrator acted within its discretion to use the Guidelines as reliable evidence that ACI is experimental within the meaning of the Plan.  The Guidelines were not the sole criteria considered by Defendant.  And, the external reviewer found that ACI was not medically necessary since there were no well-conducted randomized controlled studies.  The court granted Defendant’s motion for judgment.

David S., et al. v. United Healthcare Insurance Company, No. 2:18-CV-803, 2019 WL 4393341 (D. Utah Sept. 13, 2019) (Judge Robert J. Shelby). Plaintiffs David S. and Veronica S. sought coverage for mental health, behavioral, and substance abuse residential treatment for their son S.S. Defendant moved to dismiss, alleging that Plaintiffs were members of a class action predating this suit, inadequately pled a claim under the Mental Health Party and Addiction Equity Act (“MHPAEA”), and that the parents lacked standing. The court granted Defendant’s motion in part, dismissing Veronica for lack of standing, but held that David had standing as a Plan participant. The court denied Defendant’s motion alleging that Plaintiffs were class members, holding that it was not clear that Plaintiffs were parties to the class action under the “operative class definition.” The court also denied Defendant’s motion pertaining to the MHPAEA, holding that Plaintiffs sufficiently alleged that Defendant violated it in applying the acute nonquantitative treatment limitations for mental health while using sub-acute nonquantitative treatment limitations for medical and surgical conditions. 

J.L., et al., v. Anthem Blue Cross & Northrup Grumman Health Plan, No. 2:18CV671, 2019 WL 4393318 (D. Utah Sept. 13, 2019) (Judge Dee Benson). Plaintiffs are all beneficiaries of an ERISA group health plan. Plaintiff A.L. was a minor with a long history of anxiety and depression. A.L. was admitted to a residential treatment center to address her mental health. Defendant covered A.L.’s first 50 days of treatment as “medically necessary.” Defendant then concluded further treatment was not medically necessary. Plaintiffs filed a lawsuit alleging, inter alia, violation of the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”). Both parties sought summary judgment on the MHPAEA claim. The court held that Plaintiffs’ MHPAEA claim was insufficient as a matter of law because they did not identify what processes, strategies, standards or other factors were applied more stringently to mental health claims, or provide any facts to show or even suggest that a particular process or standard was applied in a differential way. In addition, the court held that Plaintiffs failed to show good cause in their motion to amend the complaint which was filed two days after the deadline set forth in the scheduling order, stating that Plaintiffs have not learned any new facts that would justify the untimely proposed additions.

Pleading Issues & Procedure

Ninth Circuit

Talen Montana Ret. Plan v. PPL Corp., et al., No. CV-18-174-BLG-SPW, 2019 WL 4410347 (D. Mont. Sept. 16, 2019) (Judge Susan P. Watters).  The court granted Plaintiffs’ motion to remand the case to state court.  The court had to determine whether two-thirds of the member class are citizens of Montana to decide whether it has subject matter jurisdiction over the proposed class action under 28 U.S.C. § 1332(d).  The court rejected Defendants’ argument that the class cannot meet the two-thirds requirement because it cannot include participants in Talen Montana’s pension plan whose claims would be preempted by ERISA.  The proposed class here is defined as current and contingent creditors of Talen Montana.  CAFA states that subject matter jurisdiction depends on the class as proposed.  Even if the plan participants only have ERISA claims, “they would still be current or contingent creditors of Talen Montana and therefore members of the proposed class. Whether ERISA complicates or precludes certification of the class is a question for later down the road.”   

Eleventh Circuit

Sauls v. Rankin Sneed et al., No. 5:18-CV-1248-MHH, 2019 WL 4393033 (N.D. Ala. Sept. 13, 2019) (Judge Madeline Hughes Haikala). Plaintiff filed suit in state court seeking benefits from her deceased husband’s 401(k) plan. Two of the initial Defendants were citizens of Alabama. Plaintiff then added another Defendant against which she asserted an ERISA claim. That Defendant removed the case to federal court based on federal question jurisdiction and also based on diversity. Plaintiff and ERISA Defendant settled, and Plaintiff sought remand back to state court. The question before the court was whether Plaintiff’s suit may remain in federal court based on diversity jurisdiction if it precluded diversity removal initially. The court denied Plaintiff’s motion for remand because Plaintiff could not rely on the forum defendant rule in § 1441(b) in her motion (noting that the forum defendant rule is a waivable procedural defect), and, even if she had, she waited too long to file her remand motion.

Remedies

Fifth Circuit

Soileau & Associates, LLC, et al. v. Louisiana Health Service & Indemnity Company, No. CV 18-710-WBV-JCW, 2019 WL 4521167 (E.D. La. Sept. 19, 2019) (Judge Wendy B. Vitter).  Plaintiffs bring various causes of action against Defendant for failing to pay for medical services for a beneficiary of an ERISA-governed health plan.  The court dismissed Plaintiffs’ § 502(a)(2) and § 502(a)(3) claims for equitable relief because “‘[i]t is settled law in this circuit that a potential beneficiary may not sue for breach of fiduciary duty if he has a pending claim under section 1132(a)(1)(B) for benefits allegedly owed.’ This is true regardless of whether the § 502(a)(1)(B) claim is successful.”  The court also dismissed Plaintiffs’ § 503 claim for “full and fair” review because in the Fifth Circuit the ERISA plan is the proper defendant, not Blue Cross who is alleged to be the plan administrator and plan fiduciary.  Similarly, the court found that Blue Cross is not the proper party for Plaintiffs’ § 502(c)(1) claim.  The court dismissed that claim and the claims premised upon the § 502(c)(1) claim, including Plaintiffs’ claims for injunctive relief under § 502(a)(3) and damages and penalties under La. R.S. 22:1821(D).

Retaliation Claims

Third Circuit

Bowen v. Nationwide Mutual Insurance Company & Benefits Administrative Committee, et al., No. 1:19-CV-00017, 2019 WL 4412805 (M.D. Pa. Sept. 16, 2019) (Judge Yvette Kane). Plaintiff worked for Nationwide for 30 years and consistently received positive feedback and favorable performance evaluations. After Plaintiff was terminated, she filed for severance benefits, which were denied. Plaintiff then filed a lawsuit alleging, inter alia, that Defendants retaliated against her by wrongfully terminating her under false pretenses for participating in a statutorily protected activity (i.e. her filing for severance benefits). The court agreed with Defendants and held that Plaintiff failed to allege facts suggesting that her statutorily protected activity is causally connected to her termination, since the activity occurred after her termination. However, the court agreed that Plaintiff alleged sufficient facts to state a claim under ERISA interference, in that Defendants interfered with the attainment of her ERISA rights by terminating her under false pretenses in order to prevent her from obtaining severance benefits, enhanced salary, and retirement benefits.

Statute of Limitations

Second Circuit

Rapp, et al. v. Henkel Of America, et al., No. 3:18-CV-01656 (JCH), 2019 WL 4509095 (D. Conn. Sept. 18, 2019) (Judge Janet C. Hall). Plaintiffs asserted claims for wrongful denial of pension benefits and breach of fiduciary duty. Defendants filed a motion on the pleadings on the theory that both claims were time barred. Plaintiffs argued that Henkel waived the right to invoke the statute of limitations defense by failing to assert it in the claim and appeal denial letters. The court held that Defendant asserted the statute of limitations defense to a judicial action, which “one would hardly expect a plan administrator to assert in the context of administrative action.” (internal citations omitted.) Pursuant to Conn. Gen. Stat. § 52-57(a), the statute of limitations was six years. The court held that Plaintiffs’ claim did not accrue upon retirement in 2006 after no pension benefits were paid because the plan did not require collection of benefits on any date, but instead was worded in strictly permissive terms. Plaintiffs plausibly alleged that they did not have notice of a clear repudiation until the claim denial in 2017. With respect to the breach of fiduciary duty claim, given the specific limitations provision contained in ERISA, the court declined to adopt the continuing violation theory advanced by Plaintiffs because there were no specific allegations indicating separate, repeating violations of fiduciary duty. Defendants argued next that Plaintiffs’ breach of fiduciary duty claim was impermissibly duplicative of their claim for benefits. The court disagreed, holding that, to the extent Plaintiffs sought the equitable remedy of estoppel, it was not clear that this estoppel claim was duplicative of their claim for monetary relief. Finally, the court concluded that the doctrine of laches did not bar Plaintiffs’ claims because it was not yet possible to determine if the Plaintiffs intentionally slept on their rights.

Third Circuit

Anderson v. Gen. Motors LLC, No. CV 18-621-LPS, 2019 WL 4393177 (D. Del. Sept. 13, 2019) (Judge Leonard P. Stark). As a former employee of Defendant, Plaintiff alleged that he had seniority rights and was entitled to pension benefits under an ERISA plan sponsored and administered by Defendant. Defendant moved for judgment on the pleadings. The court granted the motion because Plaintiff failed to file his complaint within the statute of limitations, and as such, it was time-barred. In reaching this determination, the court ruled that Plaintiff’s claim accrued on January 27, 2016 when Defendant advised him that he never acquired seniority rights, and that it considered the matter closed. On February 13, 2018, in response to query by Plaintiff, Defendant sent the same letter again. The court ruled that the February cover letter added nothing to the January 2016 denial letter. Plaintiff did not file his complaint within a year of January 2016 when the statute began to run.  (The court applied the one-year statute of limitations found at 10 Del. C. § 8111 since it is most applicable to recovery of benefits under an ERISA plan.)  Even if the claim were not time-barred, Plaintiff has litigated his seniority rights against Defendant on multiple prior occasions and therefore, he was prohibited from relitigating the issue under the doctrine of collateral estoppel.

Withdrawal Liability & Unpaid Contributions

Fourth Circuit

Trustees of The Iron Workers Local Union No. 5 and Iron Workers Employers Association, Employee Pension Trust, et al. v. Moxy Misc. Metals, LLC, No. PWG-17-3285, 2019 WL 4536514 (D. Md. Sept. 19, 2019).  The court entered judgment against “Defendant Moxy Misc. Metals, LLC in favor of Plaintiffs in the amount of $101,328.25, representing $100,000.00 due pursuant to the Release and $1,328.25 in attorney’s fees, which is awarded to Plaintiffs.”

Sixth Circuit

Operating Engineers Local 324 Pension Fund v. Waterland Trucking Services, Inc., No. 2:18-CV-12638, 2019 WL 4511674 (E.D. Mich. Sept. 19, 2019) (Judge Stephen J. Murphy, III).  The court granted Plaintiff’s motion for summary judgment because “[i]t is undisputed that (1) Plaintiff made a demand for withdrawal liability, (2) Defendant disputes the claim and filed a request for arbitration, and (3) Defendant has failed to pay any of its withdrawal payments during the pendency of the arbitration on the underlying claim. Under the MPPAA’s ‘pay now, dispute  later’ principle, Defendant must pay interim withdrawal payments during a pending arbitration even if it disputes the underlying claim and alleges that it will suffer irreparable harm.” 

Eighth Circuit

St. Louis-Kansas City Carpenters Reg’l Council v. Pace Constr. Co., LLC, No. 4:19 CV 1509 CDP, 2019 WL 4451251 (E.D. Mo. Sept. 17, 2019) (Judge Catherine D. Perry).  The court denied Defendant’s motion to dismiss Plaintiffs’ claims for delinquent contributions because “[w]hether plaintiffs can prove that defendant owes all of the claimed delinquent contributions or whether certain employees or work performed outside the geographical scope of the collective bargaining agreement may be exempt from defendant’s contribution obligations are not issues properly before me at this time, but instead are issues to be determined on a full factual record.”

Ninth Circuit

Boards of Trustees of the AGC-Operating Engineer Health And Welfare Fund v. K.F. Jacobsen & Co., Inc., No. 3:19-CV-0621-SI, 2019 WL 4567578 (D. Or. Sept. 20, 2019) (Judge Michael H. Simon).  The court granted Plaintiffs’ motion for default judgment. “For violations from February 2019 to June 2019, Defendant is ordered to pay $24,263.80 for unpaid contributions, $2,088.14 in liquidated damages, $706.37 in interest, $1,237.50 in attorney’s fees, and $535.00 in costs.”