Fifth Circuit Rules in Favor of Cigna in Dispute with Out-of-Network Provider Over Patients’ Coinsurance Obligations

By Peter Sessions on March 25, 2020

This week’s notable decision is North Cypress Med. Ctr. Operating Co., Ltd. v. Cigna Healthcare, No. 18-20576, __ F.3d __, 2020 WL 1291590 (5th Cir. Mar. 19, 2020), where the Fifth Circuit, in the case’s second trip to the Court of Appeals, ruled in favor of Cigna in its dispute with an out-of-network healthcare provider.

This is an action by a hospital against Cigna for the alleged underpayment of more than $40 million in benefit claims assigned to the hospital by Cigna insureds. The dispute revolved around North Cypress’ billing approach. In order to encourage prompt payment by its patients, the hospital offered to reduce the patients’ coinsurance obligations—even if their treatment was out-of-network—if they paid a certain amount of their bill within 120 days. Under this approach, out-of-network patients received a significant discount, North Cypress incurred lower collection costs, and meanwhile Cigna’s payment obligation remained the same.

When it learned of this approach, Cigna objected and invoked a plan provision that excluded from coverage any charges for which insureds were not billed or were not obligated to pay. Cigna contended that North Cypress’ payment plan “desensitized” patients to the higher price of out-of-network health care. Cigna informed North Cypress that it was changing its payment process for future claims from the hospital, and would operate under the assumption that North Cypress was only charging its patients $100 per claim, which was the average amount patients had reported paying during a Cigna investigation. Cigna would calculate any insurance payments based on this new assumed coinsurance rate unless North Cypress could demonstrate that patients actually paid the applicable out-of-network coinsurance amount. After Cigna denied several claims under this new protocol, North Cypress sued Cigna under state law, ERISA, and RICO.

The district court ruled that North Cypress did not have standing to bring its ERISA claims, and North Cypress appealed. The Fifth Circuit reversed, ruling in North Cypress’ favor, and remanded to the district court to decide the ERISA claims on the merits. 781 F.3d 182. After a bench trial, the district court found in Cigna’s favor, and North Cypress appealed to the Fifth Circuit once again.

This time, the Fifth Circuit ruled against North Cypress and affirmed. First, the Fifth Circuit found that the district court did not err by refusing to consider whether Cigna’s arguments were “legally correct” under the Fifth Circuit’s multi-step approach to deciding ERISA benefit cases because the district court was permitted to do so under controlling Fifth Circuit precedent. The Fifth Circuit also found that the district court was not obligated to consider whether Cigna had a conflict of interest or was acting in good faith, because prior cases interpreting the same plan language had already established that Cigna’s interpretation of that language was legally correct. North Cypress contended that those cases were distinguishable, but the Fifth Circuit found that they addressed the same core issue presented in this case: whether Cigna’s interpretation of the plan as requiring patients to be legally responsible for coinsurance payments was reasonable.

Finally, the Fifth Circuit rejected North Cypress’ arguments regarding exhaustion and attorney’s fees. North Cypress had argued that it was not required to exhaust its benefit claims because it would have been futile to do so, but the Fifth Circuit’s ruling that Cigna had acted reasonably mooted that argument. North Cypress had also argued that it was entitled to fees because it had achieved a reversal in its first appellate trip, but the Fifth Circuit ruled that this success was “temporary but fleeting” and insufficient to warrant fees when its claims were “totally rejected” after the subsequent trial.

This week’s notable decision summary was written by Kantor & Kantor attorney, Peter Sessions.

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

Attorneys’ Fees

Fifth Circuit

North Cypress Med. Ctr. Operating Co., Ltd. v. Cigna Healthcare, No. 18-20576, __ F.3d __, 2020 WL 1291590 (5th Cir. Mar. 19, 2020) (Before King, Jones, and Dennis, Circuit Judges). See Notable Decision summary above.

Breach of Fiduciary Duty

Sixth Circuit

Gibson v. Ford Motor Co., No. 3:18-CV-43-RGJ, 2020 WL 1317476 (W.D. Ky. Mar. 20, 2020) (Judge Rebecca Grady Jennings). In an ERISA suit with both § 1132(a)(1)(B) and (a)(3) claims, the court determined whether the breach of fiduciary duty claim was based on a separate injury from the breach of contract claim. The court adjudicated two alleged breaches of fiduciary duty (1) that Defendants failed to protect Plaintiff’s retirement assets after being informed by Plaintiff of a processing irregularity and (2) Defendants improperly circulated Plaintiff’s social security number. The court elected not to address the merits of a third issue, deferring it to an alternative motion. The court granted summary judgment on the first issue because the $10,000 in lost value flowed from the handling of a single transaction—the subject of the (a)(1)(B) claim—and no additional loss was experienced by the “many missteps” alleged to have happened in the weeks following the transaction. The court denied summary judgment on the second issue because the $35 per month “security protection program” Plaintiff enrolled in after finding out his company sent an internal email with his social security number was an injury separate from the denial of benefits injury.

Eighth Circuit

Davis v. Stadion Money Management, Inc., 8:19CV556, 2020 WL 1248580 (D. Neb. Mar. 16, 2020) (Judge Joseph F. Bataillon). Defendant Stadion Money Management, Inc. (“Stadion”) and United of Omaha (“Omaha”) moved to dismiss this purported class action case that alleges Stadion breached its fiduciary duties by choosing to invest participants’ retirement assets in United of Omaha’s group variable annuity contracts over other better performing investment alternatives because of its relationship with Omaha. Stadion argued the case should be dismissed because the statute of limitations had run. Plaintiffs argued they did not have actual knowledge of how Stadion selected investments and the court agreed. Stadion also argued it was not a fiduciary with regard to whether a product or agreement was an appropriate plan investment because the plan sponsor could negotiate or choose a different provider. The court disagreed finding the agreement between Stadion and the plan sponsor specifically granted Stadion discretionary authority for investments and that grant of discretion makes it a fiduciary. Stadion then argued the complaint failed to allege facts sufficient to state a claim it breached the duty of prudence or loyalty because the allegations are merely hindsight comparison of similar investments. The court disagreed stating that Plaintiffs generally lack the inside information to plead their claims in detail until discovery and the complaint alleged sufficient facts to survive the motion to dismiss. Finally, Stadion challenged Plaintiffs claim of loss, but the court found the allegations sufficient because the complaint alleges the investment was underperforming for years and Stadion continued to place the retirement assets in the investment. Omaha moved to dismiss arguing ERISA does not authorize claims against non-fiduciaries for knowing participation in a breach of fiduciary duty. The court found the complaint sufficiently alleges Omaha was a party-in-interest and knew or should have known Stadion was a fiduciary and Omaha was complicit in Stadion’s activity. The court will allow Plaintiffs discovery to determine the extent to which Omaha was aware of the breaches. Omaha also argued Plaintiffs’ remedy of restitution in the form of an accounting of Omaha’s profits and disgorgement of those profits was not appropriate equitable relief. Again, the court disagreed, stating the remedy sought was both appropriate and equitable in nature. Both motions to dismiss were denied.

Disability Benefit Claims

Ninth Circuit

W. v. Unum Life Ins. Co. of Am., No. 18-56039, __F.App’x__, 2020 WL 1277619 (9th Cir. Mar. 17, 2020) (Before Thomas, Chief Judge, Wardlaw and Nguyen). Plaintiff challenged the denial of his claim for Long Term Disability benefits at the district court (2018 WL 6071090) where Judge Walter found for defendant UNUM, based largely on the fact that objective neuropsychological evidence showed that Plaintiff was not cognitively impaired, and Plaintiff did not provide sufficient evidence to the contrary. Plaintiff appealed to the Ninth Circuit, arguing that the district court committed clear error by finding that Plaintiff was no longer disabled as of March 12, 2015. The Ninth Circuit found that the district court’s analysis was appropriately focused on whether Plaintiff was cognitively impaired, and it was not clear error for the district court to credit the opinions of UNUM’s doctors over those of Western’s physicians. The court also upheld the dismissal of Plaintiff’s breach of fiduciary duty claim, as it was based upon the premise that the UNUM denial was unreasonable.

Tenth Circuit

Cummings v. Hartford Life and Accident Insurance Company, No. 18-CV-03255-CMA-KMT, 2020 WL 1234894 (D. Colo. Mar. 13, 2020) (Judge Christine M. Arguello). The parties do not dispute Plaintiff’s diagnoses or that he is disabled. Instead, the chief dispute in this case is the extent to which Plaintiff’s chronic pain affects his functionality and, therefore, his ability to work. The court found that Hartford’s decision to terminate Plaintiff’s LTD benefits was predicated on a reasonable basis, and thus satisfies the arbitrary and capricious standard of review. The court found that Hartford reasonably challenged Plaintiff’s representations of his pain and functionality considering the surveillance footage and reasonably placed greater value on the conclusions of peer reviewers than the conclusions of the examining physicians. Finally, after review of the administrative record and Hartford’s thorough procedure, the court agreed that “[a]lthough Hartford did not include the monthly median wages…in the appeal determination letter, the appeal determination documentation show that Hartford reasonably and correctly considered the Any Occupation Definition’s wage requirement in assessing the vocational issues of the appeal review.” Hartford’s omission of monthly median wages from the appeal determination letter did not yield an arbitrary and capricious decision.

ERISA Preemption

Fifth Circuit

Anzaldua v. TitanLiner, Inc., No. 3:19-CV-01933-E, 2020 WL 1236466 (N.D. Tex. Mar. 13, 2020) (Judge Ada Brown). Plaintiff Anzaldua became ill due to alcoholism. She discussed with her employer, TitanLiner, entering a rehabilitation program. It was agreed she would voluntarily enter a substance abuse treatment program and her job would be held for her. Shortly after entering the rehabilitation program, Anzaldua was informed she was not covered by FMLA and she was fired for being absent from work. TitanLiner changed health insurers while Anzaldua was in treatment, and she was enrolled in a plan that did not pay any benefits to out-of-network facilities. Because her treatment was no longer covered by insurance, she was asked to leave the program. She sued her former employer for breach of contract, and in the alternative promissory estoppel because she relied on the information her employer provided when entering treatment. TitanLiner filed a motion to dismiss all claims, asserting that ERISA preempted Anzaldua’s claims. The Court found that Anzaldua had not pled enough facts to support either (1) a breach of contract claim because she had not identified the contract that had been breached, or (2) a promissory estoppel claim because she had not identified the representations that she had relied on to her detriment. The Court did not consider whether ERISA preempted the claims; instead, the Court dismissed all Plaintiff’s claims because the complaint did not plead facts supporting them. Anzualdua was granted leave to amend her complaint.

Medical Benefit Claims

Second Circuit

Semente, D.C., P.C. v. Empire Healthchoice Assurance, Inc., et al.¸14-cv-5823, 2020 WL 1244644 (E.D.N.Y. Mar. 16, 2020) (Senior District Judge Denis R. Hurley). Plaintiff Raymond A. Semente, D.C., P.C., a licensed chiropractor, brought this action on behalf of certain patients who assigned him their rights under the Employee Medical Health Plan of Suffolk County to obtain reimbursement for services provided to these patients. The court originally denied Empire’s motion to dismiss Semente’s complaint for lack of standing on the grounds that the applicable Empire plan had a valid anti-assignment provision that precluded Semtente bringing any claims against Empire. On Semente’s motion for summary judgment, the court denied Semente’s motion for summary judgment after conducting a review of “more factually analogous cases” involving similar anti-assignment provisions. The court held that its earlier determination on the motion to dismiss was wrong and that the anti-assignment provision in the applicable plan was enforceable. Judgment was entered in favor of Defendants.

Julie L. v. Excellus Health Plan, Inc., No. 6:18-CV-06753 EAW, 2020 WL 1307868 (W.D.N.Y. Mar. 19, 2020) (Judge Elizabeth A. Wolford). Plaintiffs brought suit on behalf of Q.M., their minor child, who has a long history of mental health issues. Q.M. received services from BlueFire Wilderness Therapy (“BlueFire”) and Boulder Creek Academy (“BCA”). Excellus denied Plaintiffs’ requests for coverage. Plaintiffs sought recovery of benefits under the Plan and alleged a violation of Mental Health Parity and Addiction Equity Act of 2008 (“Parity Act”). The court granted Defendants’ motion for summary judgment, holding that Defendants’ determinations that the services at BlueFire and BCA were not medically necessary were not arbitrary and capricious, and that there was no issue of material fact as to Plaintiffs’ Parity Act claim based on conclusory allegations. Excellus determined that BlueFire services were not medically necessary because 1) Q.M.’s psychiatric diagnosis could have been safely managed at home, and 2) there were no specific symptoms or behaviors indicating social risk factors in the month preceding treatment. The court noted that the reasonableness of this determination was supported by external reviews, which upheld denial of coverage. With respect to BCA, Defendant determined that a lower level of care would have been sufficient, such as partial hospitalization. The denial was confirmed by external reviewers. The court found that while Q.M. benefited from BlueFire and BCA services, there was no evidence demonstrating that they were medically necessary and that Q.M.’s diagnoses could not have been managed with a lower level of care.

Fifth Circuit

Cell Sci. Sys. Corp. v. La. Health Serv., No. 18-31034, __F.App’x__, 2020 WL 1285033 (5th Cir Mar. 17, 2020) (Before Davis, Ho, and Engelhardt, Circuit Judges). On August 20, 2018, the district court granted Blue Cross Blue Shield of Louisiana’s (BCBSLA) motion to dismiss Cell Science Systems Corporation’s lawsuit for failure to demonstrate standing in a dispute involving BCBSLA’s failure to pay for services rendered to its members by CSS, the developer of the ALCAT test, a blood test used by healthcare providers to identify food and chemical sensitivities in their patients. CSS was not a participating provider in BCBSLA’s network of providers. Because it had no contractual relationship with BCBSLA, CSS sought reimbursement for the ALCAT tests pursuant to purported assignments of benefits from the patients. Per curiam, the Court affirmed the district court’s ruling that CSS failed to meet its burden of proving, by a preponderance of the evidence, that it had obtained valid assignments and that BCBSLA was entitled to dismissal.

Eighth Circuit

Mitchell v. Blue Cross Blue Shield of N. Dakota, No. 18-2784, __F.3d__, 2020 WL 1313643 (8th Cir. Mar. 20, 2020) (Before: KELLY, Chief Judge, and COLLOTON and BEAM, Circuit Judges). Valley Med Flight (“VMF”) provided an air ambulance flight to Ms. Mitchell, who had health insurance coverage through an employer sponsored plan that was fully-insured by Blue Cross Blue Shield of North Dakota (“BCBSND”). The policy stated services from a non-network provider would be reimbursed based upon the Allowed amount for the service as determined by BCBSND. BCBSND had internally determined that the Allowable Amount for air ambulance services would be 150% of Medicare rates. This information was not communicated to plan members. VMF is not an in-network provider for BCBSND, and when an invoice for services was submitted by VMF to BCBSND, BCBSND paid 80% of the Allowed Amount which was based upon Medicare’s reimbursement rate. The district court determined, and the Eighth Circuit agreed, that under an abuse of discretion standard, BCBSND’s plan interpretation was not unreasonable. BCBSND has discretion to interpret the term “Allowed Charge”, and their interpretation was consistent, based on an external benchmark, and does not violate the terms of the plan. Summary judgment for Defendant BCBSND was affirmed.

Pension Benefit Claims

Second Circuit

Eaton & Van Winkle, LLP v. Yunling Ren, 17 Civ. 6118 (PGG), 2020 WL 1244135 (S.D.N.Y. Mar. 16, 2020) (Judge Paul G. Gardephe). Eaton & Van Winkle LLP 401(k) plan (“Plan”) brought an interpleader action to resolve a dispute between a participant’s current wife (Ms. Ren) and his former wife (Ms. Waldbaum), who claims she was assigned the account through a qualified domestic relations order (QDRO). Ms. Ren moved for reconsideration of the court’s denial of her motion for summary judgment and motion to dismiss and Ms. Waldbaum moved for summary judgment. The court denied Ms. Ren’s motion for reconsideration finding it was a rehash of arguments previously made and it advanced new arguments not appropriate for reconsideration. Ms. Waldbaum moved for summary judgment on her request for a declaration that she is entitled to a distribution of the funds immediately. The court, having found Mr. Ren does not have a right to the funds in the account, granted Ms. Waldbaum’s motion and directed the Plan to make an immediate distribution her.

Pleading Issues & Procedure

Sixth Circuit

Kanagy v. Midlands Millroom Supply, Inc., Case No. 5:19-cv-01726, 2020 WL 1275289 (N.D. Ohio Mar. 17, 2020) (Judge John R. Adams). The court granted Plaintiff’s motion for leave to amend the complaint. Plaintiff’s original complaint brought claims for breaches of fiduciary duties under ERISA alleging Defendants, her previous employers, deducted benefit contributions from her paycheck without properly remitting those withholdings to her elected retirement plan. Plaintiff sought to amend the complaint to add claims against the same defendant for unpaid wages. The court granted the motion because Plaintiff’s request to amend was filed prior to the initiation of discovery, because the new claims were against the same defendant and related to the conduct giving rise to the original claims, and because Defendants failed to articulate demonstrable prejudice it would experience should Plaintiff amend her complaint.

Oak Point Partners, LLC v. Blue Cross Blue Shield of Michigan, No. 19-10662, 2020 WL 1274988 (E.D. Mich. Mar. 17, 2020) (Judge David M. Lawson). The case follows a long line of actions brought against Blue Cross for concealment and self-dealing involving obfuscated administrative “hidden fees” charged to customers for whom Blue Cross administered self-funded benefit plans. Blue Cross brought a motion to dismiss claiming that plaintiff has not suffered injury in fact because the hidden fees did not belong to plaintiff who acquired the assets of the sponsors of bankrupt employee benefit plans. The court found that assuming there were valid causes of action available to the debtor entities, the plaintiff has adequately pleaded that it acquired those claims via its purchase of the assets in bankruptcy. The court also found that the bankruptcy trustee may be a fiduciary entitled to sue under ERISA for wrongly appropriated funds. The court found that plaintiff alleged sufficient facts to establish that it suffered an injury in fact traceable to the defendant and therefore the court has subject matter jurisdiction over the case and denied the motion to dismiss.

Ninth Circuit

Jozwiak v. Raytheon Missile Sys., et al., No. CV-20-00039-TUC-DCB, 2020 WL 1308007 (D. Ariz. Mar. 19, 2020) (Judge David C. Bury). In this dispute where Plaintiff alleges ERISA claims for breach of fiduciary duty, fraud and retaliatory discharge, and prohibited transactions, the court denied his application to proceed in forma pauperis under 28 U.S.C. § 1915 because his disability benefits exceed the poverty level set by the U.S. Census Bureau for 2020, which is $12,760 annually for a single person. The court found that the 89-page Complaint does not comply with Rule 8 and Plaintiff has leave to file a first amended complaint to correct the pleading deficiencies.

Eleventh Circuit

Smith v. Blue Cross Blue Shield of South Carolina, et al., No. 3:18-CV-960-J-JRK, 2020 WL 1288650 (M.D. Fla. Mar. 18, 2020) (Judge James Klindt). In this action for wrongful denial of mental health benefits, the parties brought cross motions for summary judgment. The issue is whether the defendant, Blue Cross, or the employer, Nelson Mullins (not a party), was the Plan Administrator and whether Blue Cross is a proper party. The court found that Nelson Mullins is designated as the Plan Administrator, and the plan documents and ASA do not convey a clear express grant of full and final discretionary authority to Defendants. The court found that Nelson Mullins retains the right to make final determinations and assumed all liability for claims. Therefore, the court held the matter is to be dismissed without prejudice because Plaintiff failed to sue the proper defendant, Nelson Mullins. Plaintiff is not prejudiced by the dismissal because the statute of limitations for Plaintiff to sue Nelson Mullins does not expire until 2022.

Provider Claims

Fifth Circuit

Statutory Penalties

Sixth Circuit

Gibson v. Ford Motor Co., No. 3:18-CV-43-RGJ, 2020 WL 1317476 (W.D. Ky. Mar. 20, 2020) (Judge Rebecca Grady Jennings). A court “cannot award civil penalties…stemming from Defendants’ failure to produce a document that does not exist.” A holding so tautological it is remarkable it even needed to be said. The court repeated this rule after Plaintiff filed a statutory penalties claim against Ford that was not based on Ford’s failure to provide any particular document, but based on the fact the Plan documents it did provide “did not explain why the transactions were not sequential.” “The real issue is whether Ford can be liable for a statutory penalty for failing to inform the Gibsons that a document did not exist. Misleading communications to plan participants will support an ERISA breach of fiduciary duty claim, [] but the Court has not found authority for this conduct supporting a statutory penalty claim under § 1132(c).”

Subrogation/Reimbursement Claims

Eleventh Circuit

Publix Super Markets, Inc. v. Figareau, No. 8:19-CV-545-T-27AEP, 2020 WL 1271236 (M.D. Fla. Mar. 17, 2020) (J. James D. Whittemore). This is an action filed by the Publix grocery store chain against one of its employees and her attorneys to obtain reimbursement of benefits paid under an ERISA-governed medical benefit plan. The plan paid benefits for treatment received by the employee’s minor child, who subsequently settled a medical negligence action. Publix sought to obtain a constructive trust or equitable lien on the proceeds from that action. Three motions were at issue in this order: (1) Publix’s motion to strike three affirmative defenses raised by Defendants; (2) Defendants’ motion to remand the case to state court because of ongoing probate proceedings; and (3) Publix’s motion for sanctions. The court granted Publix’s motion to strike as to Defendants’ waiver and estoppel affirmative defense, finding that Publix had not abandoned its arguments and in fact had pursued its arguments in the probate proceedings. The court also granted Publix’s motion to strike Defendants’ argument regarding jurisdiction, finding that the probate proceedings did not affect the federal court’s ability to adjudicate ERISA-related issues. For the same reason, the court denied Defendants’ motion to remand, finding that the probate proceedings did not bar concurrent litigation in federal court. However, the court denied Publix’s motion to strike Defendants’ argument that Publix’s requested relief was not available under ERISA. The court found that Defendants were entitled to argue that the settlement fund was not identifiable, traceable, and within Defendants’ control. Finally, the court denied Publix’s request for sanctions, finding that the request was procedurally improper, and that defendants’ arguments were non-frivolous.

Withdrawal Liability & Unpaid Contributions

Second Circuit

Finkel v. Firequench, Inc., No. 20-CV-0010 (BMC), 2020 WL 1323017 (E.D.N.Y. Mar. 20, 2020) (Judge Cogan). In this suit to collect delinquent contributions, the court granted Plaintiff’s motion for default judgment and awarded Plaintiff $237,022.64 in damages and $6,257.10 in attorneys’ fees and costs, for a total of $243,279.74.

Salgo, et al. v. New York Concrete Corporation, et al., No. 18 CIV. 2791 (PAE), 2020 WL 1322789 (S.D.N.Y. Mar. 20, 2020) (Judge Paul A. Engelmayer). The court granted summary judgment to Defendants, finding that the record does not establish that NYCC and New Leaf are alter egos. “Viewed in the light most favorable to plaintiffs, the evidence only supports one factor that affirmatively favors finding an alter ego relationship between NYCC and New Leaf: their shared business purpose of working in concrete construction in the New York City area. For the reasons stated, this factor alone cannot support a finding of an alter ego relationship between two entities. None of the other factors affirmatively support finding such a relationship here. For several factors, like management and supervision, plaintiffs have adduced evidence of a degree of commonality—for example, identifying individuals who left NYCC to later work at New Leaf, but plaintiffs have not shown any overlapping employment of personnel, or instances where employees left NYCC to work for New Leaf for a short period and then returned to NYCC. For other factors, including those relating to operations, equipment, and ownership, plaintiffs have not adduced any evidence of overlap of any kind. Plaintiffs have not adduced sufficient evidence on which a reasonable jury, other than by speculation and supposition, could find that an alter ego relationship exists, or has existed, between NYCC and New Leaf.”

New York State Teamsters Conference Pension And Retirement Fund v. C&S Wholesale Grocers, Inc., No. 5:16-CV-84 (FJS/ATB), 2020 WL 1285749 (N.D.N.Y. Mar. 18, 2020) (Judge Frederick J. Scullin, Jr.). “[T]he Court finds that Defendant did not substantially continue Penn Traffic’s business after the 2008 transaction. Therefore the Court need not determine whether Defendant was on notice of Penn Traffic’s pension obligations, nor must it analyze Defendant’s relationship with the work that the union employees completed. Based on the Court’s finding, Defendant cannot be held responsible for Penn Traffic’s withdrawal liability under the doctrine of successor liability. As such, the Court finds Plaintiff’s remaining arguments are without merit.” The court granted Defendant’s motion for summary judgment and denied Plaintiff’s cross-motion. The court denied Defendant’s motion for partial judgment on the pleadings.

Sixth Circuit

Iron Workers’ Local No. 25 Pension Fund v. Keys, No. 18-CV-10547, 2020 WL 1249280 (E.D. Mich. Mar. 16, 2020) (Judge Bernard A. Friedman). In this case where the plaintiff trustees seek to hold Defendants liable for a $90,570 judgment entered in March 2018 against Skyhorse Steel Corp. (“Skyhorse”) for unpaid fringe benefit contributions, the court denied both parties’ motions for summary judgment. “Having carefully reviewed the parties’ extensive filings, the Court finds that factual disputes exist regarding the liability of defendants as to the Skyhorse judgment, specifically (1) who at Skyhorse had control and authority over the contributions/plan assets, and (2) whether Seal Weld is an alter ego of Skyhorse. The individual defendants dispute that they are fiduciaries and present conflicting narratives supported by deposition testimony and affidavits regarding their involvement in Skyhorse’s operations. Seal Weld’s liability presents additional factual disputes because plaintiffs and Seal Weld reach different conclusions as to whether Seal Weld and Skyhorse are substantially similar in certain respects.”

Your ERISA Watch is made possible by the collaboration of the following Kantor & Kantor attorneys: Brent Dorian Brehm, Beth Davis, Sarah Demers, Elizabeth Green, Andrew Kantor, Monica Lienke, Susan Meter, Michelle Roberts, Tim Rozelle, Peter Sessions, and Zoya Yarnykh.