Good morning, ERISA Watchers! We have two notable decisions to report again this week, including one that is a firm victory. 

Let us start with the good news. The first notable decision, Katherine P. v. Humana Health Plan, Inc., No. 19-50276, __F.3d__, 2020 WL 2479687 (5th Cir. May 14, 2020), revives life into a claim by a young woman seeking mental health benefits for partial hospitalization treatment. Katherine received partial hospitalization treatment in 2012 for multiple mental health disorders including an eating disorder. Humana paid for the first 12 days of partial hospitalization treatment and then denied benefits, claiming such treatment was no longer medically necessary based on two Mihalik Criteria. The parties filed cross-motions for summary judgment and the magistrate judge recommended judgment for Humana. The district court accepted the recommendation. Katherine P. appealed. 

The Fifth Circuit considered the case under the framework set forth in Ariana M. v. Humana Health Plan of Texas, Inc., 884 F.3d 246 (5th Cir. 2018) (en banc), under a de novo review. Katherine P. argued that the district court erred in disregarding evidence that the Humana reviewers were conflicted and improperly used the Mihalik Criteria. The court specifically did not address those issues. Instead, the court found that summary judgment was improper because the administrative record showed a genuine dispute as to whether Katherine satisfied one of the Mihalik Criteria, ED.PM.4.2. 

The ED.PM.4.2 criteria requires a patient show “[t]reatment at a less intense level of care has been unsuccessful in controlling” her eating disorder. The court found there is evidence that Katherine P. satisfied that requirement, pointing to the declarations submitted during the administrative appeal by Katherine and her mother which describe Katherine’s history of failed treatment. Additionally, the court noted Katherine’s physician’s statement that Katherine was unable to follow a meal plan and abstain from eating disorder behaviors at a lower level of care. The court found the physician’s opinion to be competent summary judgment evidence. 

The court would not say that all evidence met the ED.PM.4.2 criteria but concluded that there is a dispute over the facts which might affect the outcome and thus remanded to the district court to weigh the evidence.

Katherine P. is represented by Lisa S. Kantor and Elizabeth Hopkins, Kantor & Kantor, LLP and Amar B. Raval (argued), Berg Plummer Johnson & Raval.

The Katherine P. summary was prepared by Kantor & Kantor partner, Elizabeth K. Green. Elizabeth is passionate about helping patients obtain health benefits for a range of health conditions and particularly for mental health disorders such as eating disorders, bipolar disorder, and schizophrenia. 

This week’s second notable decision, Ellis v. Liberty Life Assur. Co. of Boston, No. 19-1074, __ F.3d __, 2020 WL 2463044 (10th Cir. May 13, 2020), is a terrible ruling involving a disability policy’s choice of law provision and the application of Colorado’s discretionary ban.

Plaintiff Ellis sued Liberty Life Assurance Company of Boston (“Liberty Life”), challenging the denial of his claim for long-term disability (“LTD”) benefits under an employee benefit plan governed by ERISA and sponsored by his employer, Comcast. The district court originally reviewed Liberty Life’s decision for abuse of discretion and upheld it. However, on a motion for reconsideration, the district court held that Colorado law applied, voiding the policy language purporting to grant Liberty Life discretionary authority. Under the less deferential de novo standard of review, the district court changed its mind and ruled in Plaintiff’s favor, finding that Liberty Life’s decision was not supported by a preponderance of the evidence.

Liberty Life appealed, contending that the district court used the wrong standard of review. Liberty argued that Colorado’s ban on discretionary clauses did not apply because the policy contained a choice of law provision stating that it was governed by Pennsylvania law, which does not forbid discretionary clauses.

The Tenth Circuit agreed with Liberty Life. The court held that although federal law governs the outcome of suits for benefits under ERISA, federal law is silent as to whether and when discretionary clauses are enforceable, and thus federal courts should look to state law for a rule of decision. The court further found that the question of which state’s law to use should be guided by federal law, in this case the goals of ERISA.

The court reviewed the approaches of three other circuits in resolving this issue—the Fifth, Sixth and Ninth—and rejected them “because they overlook the uniformity and efficiency objectives central to ERISA.” Because of these objectives, the court found that if the plan “has a legitimate connection to the state whose law is chosen…ERISA’s interest in efficiency and uniformity, as well as its recognition of the primacy of plan documents, compels the conclusion that the selected law should govern whether a discretion-granting provision is enforceable.” Comcast is headquartered in Pennsylvania, and thus the court held that the Pennsylvania choice of law provision was enforceable, and Liberty Life’s benefit denial decision was entitled to deference.

Because the district court had already reviewed the evidence once before under the abuse of discretion standard—before changing its mind—the Tenth Circuit chose not to remand. Instead, relying on the district court’s original findings, it went ahead and ruled on the merits of the case, upholding Liberty Life’s decision. In doing so, it relied on the opinions of Liberty Life’s reviewing physicians, including an independent neuropsychologist who examined Plaintiff. The court agreed that Plaintiff’s criticism of those opinions had some weight, but “a decision is not arbitrary and capricious just because some may be persuaded otherwise.” As a result, the court reversed with instructions to grant judgment to Liberty Life.

The above Ellis summary was prepared by Kantor & Kantor attorney, Peter Sessions. Peter has been practicing in the insurance and ERISA-related fields of law for more than 20 years and has special expertise in appellate litigation.

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

Breach of Fiduciary Duty

Second Circuit

May v. Palladino, No. 19-CV-890-JLS-HKS, 2020 WL 2468192 (W.D.N.Y. May 13, 2020) (Judge John L. Sinatra, Jr.). In this breach of fiduciary duty case, Plaintiffs, two Employer Trustees of a multiemployer pension and welfare trust, filed a motion for preliminary injunction and, in the alternative, for summary judgment against two Union Trustees on the issue of whether an amendment to the trust agreement, which added criteria for appointment of new trustees, required a unanimous vote. The court found the Trust agreement provision for amending how trustees are appointed is plain and unambiguous because it states any “change” to the “manner” in which trustees are appointed requires a unanimous vote. The court then concluded the amendment at issue did in fact change the manner for appointing new trustees and granted Plaintiffs’ motion for summary judgment and denied the preliminary injunction as moot.

Class Actions

Second Circuit

Snitzer v. The Board of Trustees of The American Federation of Musicians and Employers’ Pension Fund, et al., No. 17-CV-5361 (VEC), 2020 WL 2508849 (S.D.N.Y. May 14, 2020) (Judge Valerie Caproni). This case involves a class action settlement for $26,850,000 of ERISA breach of fiduciary duty claims.  The court granted preliminary approval of the class action settlement provisionally certifying the settlement class, directing notice, and scheduling a fairness hearing. The court revised the proposed order for preliminary approval and proposed notice of the class action settlement. The parties were ordered to either adopt the changes and file a final version or file a joint letter explaining the basis for any objections.  

Sixth Circuit

Stockwell v. Hamilton, No. CV 15-11609, 2020 WL 2319763 (E.D. Mich. May 11, 2020) (Judge Linda V. Parker). Plaintiffs brought this lawsuit in 2015 to collect legal fees advanced to Defendant from the Local 324 Pension Fund. The parties were before the court on motion to approve the settlement agreement. The court stated that the Settlement Agreement was a “byproduct of serious, informed, and non-collusive negotiations between the parties.” One union member raised several objections to the Settlement Agreement. The first was that the Settlement Funds should be used to reimburse the Pension Fund first, before any costs or fees. The court responded that it would be ideal if the Pension Fund were completely satisfied but that is not the nature of settlement. The parties would need to litigate the case to completion and the Pension Fund would have to win to obtain an optimal result. Instead the parties have avoided the added cost of trial and the uncertainty of a judicial ruling. The court ended by concluding that the Settlement Agreement was “prudent, fair, and reasonable.”

Disability Benefit Claims

Second Circuit

Spears v. Liberty Life Assurance Co. of Bos., No. 3:11-CV-1807 (VLB), 2020 WL 2404973 (D. Conn. May 12, 2020) (Judge Vanessa L. Bryant). Plaintiff alleged that Defendants improperly denied her claim for Long Term Disability benefits under the Plan. The court entered judgment in favor of Plaintiff. Thereafter, the court concluded that Defendant may offset Plaintiff’s benefits in the amount of SSDI benefits, but not the money she allegedly spent on pursuing those benefits (the $6,000 statutory attorney’s fees deducted from her retroactive benefits). Insofar as pre-judgment interest, the parties’ sole disagreement was about the rate to be applied. The court held that Defendant’s 4.27% interest is more appropriate than the 10% requested by Plaintiff. Plaintiff also moved for attorney’s fees, which Defendant did not contest in general (neither time spent not the hourly rate), but argued that the fees should be reduced because her fiduciary duty claims were dismissed by the court, her vague times entries, and the disparity between the damages and attorney’s fees. Agreeing with the first two grounds for reduction, the court reduced attorney’s fees by 25%.

Ninth Circuit

Hints v. American Family Life Assurance Company of Columbus, No. 4:19-CV-03764-YGR, 2020 WL 2512234 (N.D. Cal. May 15, 2020) (Judge Yvonne Gonzalez Rogers). In this dispute over short-term disability benefits, the court granted Defendant’s motion for judgment on the pleadings. “It is undisputed by the parties that Hints has had one continuous and permanent disability due to Parkinson’s and Lewy Body Dementia since he stopped working in November 2017.” After receiving one year of benefits, which is the benefit maximum, Plaintiff claimed that Defendant informed him that if he continued to pay premiums and wait 180 days that he could apply for another year of benefits. When he applied, Defendant denied his claim because he received full payment for the same disability. The court agreed with Defendant that the express language of the policy entitles Plaintiff to only one benefit period. The “Successive Periods of Disability” provision does not permit another benefit period if he waits 180 days. It applies when a separate period of disability is caused by the same or a related condition and separated by less than 180 days. The court found that Plaintiff cannot show a successive period of disability because he has been continuously and permanently disabled since November 2017.

Discovery

Eighth Circuit

Moore v. Sedgwick Claims Management Services, Inc., et al., No. 4:19 CV 2513 CDP, 2020 WL 2494590 (E.D. Mo. May 14, 2020) (Judge Catherine D. Perry). In this dispute to recover long-term disability benefits under the Ascension Long-Term Disability Plan, the court granted Plaintiff’s request to engage in limited discovery outside the “administrative record” to show defendant Sedgwick Claims Management Services, Inc.’s (the Plan’s claims administrator) procedural irregularities in the claims review process. Specifically, the court permitted discovery into whether and what extent Sedgwick considered a severance agreement Plaintiff signed in its determination to deny Plaintiff’s claim for LTD benefits. The court denied conflict-of-interest discovery regarding whether a conflict existed to influence Sedgwick’s decision since she asserts no factual allegations in her complaint or motion showing that Sedgwick’s decision to deny her claim was wrongfully influenced in any way.

Ninth Circuit

Coffou v. Life Ins. Co. of N. Am., No. CV-19-03120-PHX-DLR, 2020 WL 1502104 (D. Ariz. Mar. 11, 2020) (Judge Douglas L. Rayes). If you remember the Jones v. Life Ins. Co. of N. Am., __ F. Supp. 3d __, 2020 WL 2126498 (D. Ariz. May 5, 2020) decision from ERISA Watch last week, we found another one. In both cases the plaintiff was represented by the same counsel, Scott Davis. In both cases the plaintiff filed suit for only LWOP benefits. In both cases plaintiff sought discovery into whether LINA’s third party vendors retained doctors, who made findings that plaintiff was able to work, were motivated by conflict of interest or bias. This time the plaintiff sought to explore the bias of LINA’s vocational expert, Glenna Taylor, M.Ed., CRC, of the third party vendors who supplied medical experts, (MCN, Dane Street, MCMC, Genex), and of the third-party vendor experts themselves (Joseph Rea, M.D., Kevin F. Smith, M.D., Ben Hur MOBO, M.D., Howard Grattan, M.D.). Again, the court recognized that “[t]he outcome of this case turns on the credibility of the experts. When the court is presented with diametrically opposed expert reports, bias or prejudice of the experts becomes highly relevant” and “where an expert or the third-party vendor who supplies that expert has a long-standing relationship with or receives substantial compensation income from performing examinations for a carrier or industry, and overwhelming renders opinions in their favor, such evidence may be important in accessing that expert’s bias and credibility.” The plaintiff and LINA offered the same arguments for and against discovery as discussed in last week’s Jones case. The court held: “The Court will require LINA to answer certain interrogatories that explore the history of its relationship, from 2014 through 2017, with the third-party vendors and the experts it employed here. LINA will be required to respond to interrogatories that delve into the number of times it retained and the amount of money it paid to third party vendors and medical reviewers utilized here, as well as the number of times its internal vocational assessor has conducted vocational assessments and concluded that a claimant could perform work. The Court finds that LINA has the resources to respond to the discovery requests and is the only party with access to the requested discovery. The Court further finds that the discovery ordered herein is relevant and proportional to the needs of the case and that the burden or expense of the discovery does not outweigh its likely benefit.”

Lewis v. Unum Life Ins. Co. of Am., No. CV-18-02191-PHX-SMB, __ F. Supp. 3d __, 2020 WL 2049189 (D. Ariz. Mar. 31, 2020) (Judge Susan M. Brnovich). The court granted Plaintiff’s motion to supplement the record with addendum responses from his evaluating neuropsychologist. Plaintiff filed suit seeking LTD and LWOP benefits under plans insured by Unum. Prior to obtaining counsel, Plaintiff’s LTD claim was approved, terminated, appealed, and the termination upheld on appeal. The plan did not authorize further appeals. Plaintiff then obtained counsel and submitted an LWOP claim. When the LWOP claim was denied, Unum agreed to accept a voluntary LTD appeal along with the mandatory LWOP appeal. Unum determined both appeals did not alter its prior determinations. Despite requests from Plaintiff’s counsel that any reviewing physicians’ reports be disclosed during the appeals process, Unum did not provide the reports. Plaintiff sought to supplement the record with a response to the reports, arguing Unum’s failure to disclose the reports was a procedural error allowing him to do so because he had not received the full and fair review ERISA entitled him to receive. The court accepted Unum’s argument that voluntary appeals were not subject ERISA. Thus, the voluntary nature of Unum’s review of Plaintiff’s LTD claim did not obligate it to supply records that would otherwise be required during a first-level, ERISA-governed appeal. However, the LWOP appeal was a first-level, ERISA-governed appeal. Thus, the court held “Unum was required to provide Plaintiff the reviewing physicians’ reports prior to rendering their final decision on his [LWOP] claim. Accordingly, the Court will grant Plaintiff’s request to supplement the record.” 

Exhaustion of Administrative Remedies

Eleventh Circuit

Ferguson v. BBVA Compass Bancshares, Inc., No. 2:19-CV-01135-MHH, 2020 WL 2415584 (N.D. Ala. May 12, 2020) (Judge Madeline Hughes Haikala). Plaintiffs, two participants of a defined contribution plan, brought suit against the plan’s fiduciaries alleging breach of the duty of loyalty and prudence for overpaying for plan administrative services to the tune of $47,000,000. Defendants filed this motion to dismiss arguing Plaintiffs lack standing because they failed to exhaust the plan’s administrative remedies. The court looked to the language of the summary plan description on claims procedure and found it does not have mandatory language for filing a claim or appeal. Rather, the SPD uses language such as “may” appeal, or “has the right” to have a denial reviewed. The SPD also has a special provision for filing suit without exhausting administrative remedies if a fiduciary misuses plan assets. Defendants argued the “misuse of plan assets” does not apply to Plaintiffs’ claims. The court, quoting Merriam Webster dictionary, said the term “misuse” does not distinguish between intentional fraud and inadvertent squandering. Taken together with the other permissive but not mandatory claim procedure provisions, the court denied Defendants’ motion to dismiss.

Medical Benefit Claims

Fifth Circuit

Katherine P. v. Humana Health Plan, Inc., No. 19-50276, __F.3d__, 2020 WL 2479687 (5th Cir. May 14, 2020) (Before King, Cost, and Ho). See Notable Decision summary above.

Michael P. v. Blue Cross and Blue Shield of Texas, et al., No. 2:17-CV-00764, 2020 WL 2309584 (W.D. La. May 8, 2020) (Judge James D. Cain, Jr.). The lawsuit concerns denial of coverage for acute inpatient mental health treatment for Plaintiff’s daughter, M.P. Blue Cross provided coverage for 11 days of inpatient treatment and then denied further benefits as not medically necessary. The court considered cross-motions for summary judgment. Plaintiff challenged the administrative record as not complete because Blue Cross did not talk to the treating psychiatrists for all reviews and did not obtain medical records. The court considered the omission of not speaking with the treating psychiatrist in weighing credibility. The court found that the participant bore the burden of submitting information in support of the appeal. Plaintiff challenged the use of the Milliman Care Guidelines (“MCG”) as unreliable. The court found the MCG appear to have sufficient support. Plaintiff claims Menninger was covered as a residential treatment program and the MCG did not address this level of care. The court disagreed and found that Menninger is classified as an acute inpatient psychiatric facility and reviewed for a denial of benefits under that standard. As to the merits of Blue Cross’s decision to deny benefits, Plaintiff disputed Blue Cross’s findings that M.P. had sufficiently improved and points to her prior suicide attempts including an attempt just two days before her admission to inpatient treatment. Her treating physician wrote in appeal that M.P.’s treatment was medically necessary to prevent future harm. The court found some evidence supported Blue Cross’s determination that M.P. no longer posed an “imminent risk” of suicide but the court questioned whether there was a substantial amount of evidence to support denial. Blue Cross argued against “allowing M.P.’s history to guide the determination” because then M.P. “would remain in acute inpatient care for the rest of her life.” The court responded that Defendants “appear to forget” that her inpatient care did conclude less than six weeks later. The court found that while M.P. denied suicidal ideation and was adjusting to the program, she was still severely depressed and expressed ambivalence on her desire to live or die. The court found the Blue Cross reviewers “seem to have seized upon any indication that M.P. did not have active suicidal ideation” as justifying denial. The court found “clear signs” that she still required inpatient treatment, including her treating psychiatrist believing she posed an increased risk of completing suicide based on her history and substance abuse. The court granted Plaintiff’s motion for summary judgment and ordered briefing on remedies, prejudgment interest and attorney’s fees.

Pleading Issues & Procedure

Fifth Circuit

Guess v. Companion Life Ins. Co., No. CV 19-12289, 2020 WL 2495496 (E.D. La. May 14, 2020) (Judge Jay Zainey). Plaintiff filed suit against Defendant Companion Life when it denied her claim for Long Term Disability benefits. After Plaintiff filed the complaint, Companion failed to answer. Plaintiff then moved for default, which was granted. Companion found out about the lawsuit only after an order had been issued against it, as the Secretary of State had forwarded the complaint and summons to an out of date business address. Defendant then moved to set aside the default judgement. The court noted that the analysis of whether to grant a motion to set aside a default judgement includes three factors: 1) the extent of prejudice to the plaintiff, 2) the merit of Defendant’s asserted defendant, and 3) the culpability of Defendant’s conduct. The court noted that the first factor leans heavily toward defendant, as if the judgement would be set aside, evidence would not be lost nor would discovery be impacted, as an ERISA benefit dispute raises no such concerns. The court rejected Plaintiff’s argument that her benefits would be delayed, and she would thus be prejudiced, as it did not believe delayed ultimate recovery constituted prejudice. In regard to the second factor, the court noted that because the case was to be heard under an abuse of discretion standard, the deferential nature of the standard suggested that Companion had presented sufficient evidence to establish that it could present a meritorious defense. Finally, the court noted that “although the Court does not condone Companion’s inability to maintain its proper address with the Louisiana Secretary of State’s office, the Court finds that Companion’s error was not intentional or willful. Further, the court notes that companion acted promptly to obtain relief once it learned of the default judgement entered against it. As such, the court concluded that all three factors weigh in favor of setting aside the judgement against Companion.

Remedies

Second Circuit

Friedman v. Lippman, et al., Case No. 19-cv-226, 2020 WL 2489064 (S.D.N.Y. May 15, 2020) (Judge P. Kevin Castel). Plaintiff Steven Friedman left the employ of an advertising agency, Chiat/Day, in 1993. Chiat/Day ceased doing business in or about 1995 when its assets were purchased by defendant TBWA Worldwide Inc. (“TBWA”). Friedman had been a participant in Chiat/Day Holdings Inc.’s Employee Profit Sharing and 401(k) Plan and had no record of ever receiving any distributions under the Plan. Friedman brought this action pursuant to ERISA§1132(a)(1), alleging that he is owed $164,920 in unpaid benefits from the Plan. Friedman sued multiple defendants to recover the benefits he asserts he is owed, including: Colette Chestnut, then CFO of TBWA, in her representative capacity; the Plan itself; TBWA; National Union Fire Insurance Company of Pittsburgh, PA, which allegedly provided insurance to the Plan; and Plan trustees Michael Kooper and Stacey Lippman. Before the Court’s TBWA’s motion for summary judgment. The central issue before the court is the limitation on recovery in section 502(d)(2) of ERISA, which limits liability of an administrator sued in that capacity for non-payment of plan benefits to the assets of the plan. The court held that neither Chiat/Day nor its arguable successor, TBWA, has liability beyond the assets of the Plan and that the parties do not dispute that the Plan’s assets have been liquidated with no assets left to distribute. Based on the standing requirement of redressability under Article III, the court held that a judgment in Friedman’s favor would not redress his grievances and therefore TBWA’s motion for summary judgment was granted.

Retaliation Claims

Eighth Circuit

Van Dellen v. AON Service Corp., Case No. 19-cv-190, 2020 WL 2468759 (D. Minn. May 12, 2020) (Judge Nancy E. Brasel). Before the court was Defendant Aon Service Corporation’s motion for summary judgment on Plaintiff Henry Todd Van Dellen’s ERISA and Minnesota statutory claims. In this matter, Aon terminated Van Dellen from his position as Senior Vice President and Produce in 2017. Van Dellen alleged that his termination was age discrimination in violation of the Minnesota Human Rights Act, and that Aon deprived him of severance benefits in violation of ERISA § 510. The court held that (1) Van Dellen sufficiently raised a genuine issue of material fact as to whether Aons reason for terminating him was pretextual and that a jury must resolve what role, if any, Van Dellen’s age played in his termination; and (2) that Van Dellen failed to establish a connection between the decision to terminate him and his benefits, and therefore his ERISA § 510 claim is therefore dismissed. 

Standard of Review

Eighth Circuit

Blagg v. Eaton Corp., No. 4:19-CV-00049-KGB, 2020 WL 2449360 (E.D. Ark. May 12, 2020) (Judge Kristine Baker). Plaintiff filed suit against her employer after her claim for Long Term Disability benefits under its Plan was denied. Plaintiff argued that the proper standard of review was de novo, as Arkansas law forbids application of discretionary clauses in Plans renewed after 2020. The court rejected this argument, finding that the Plan’s Ohio of law provision supersedes the Arkansas discretionary clause ban, despite the language of the ban explicitly stating that no policy “offered or issued in this State . . . may. . . reserve discretion.” The court also dismissed Plaintiff’s argument that the absence of the provision from the more recently issued Summary Plan Description should trump the choice of law provision, finding that the SPD is “only a summary of the Plan’s ‘main features,’” and the Plan itself is determinative. The court rejected Plaintiff’s alternative argument that “thwarting the intent of the Arkansas Insurance Commissioner by applying Ohio law . . . would be fundamentally unfair and unreasonable, and the Court should not allow such an argument to prevail.” The court noted that the provision relied upon by Plaintiff does not apply to policies issued outside Arkansas, as this policy was. After concluding that abuse of discretion properly applied, the court determined that Eaton’s decision was supported by substantial evidence including an independent Medical examination, two peer reviews, and an FCE.

Tenth Circuit

Ellis v. Liberty Life Assur. Co. of Boston, No. 19-1074, __ F.3d __, 2020 WL 2463044 (10th Cir. May 13, 2020) (Before Hartz and Eid, Circuit Judges). See Notable Decision summary above.

Statutory Penalties

Ninth Circuit

Raya v. Calbiotech, No. 18-CV-2643-WQH-BGS, 2020 WL 2394925 (S.D. Cal. May 12, 2020) (Judge Hayes). Plaintiff brings one claim against Calbiotech for failing to provide him with a Summary Plan Description of Calbiotech’s 401(k) profit sharing plan within thirty days of Raya’s written request in violation of ERISA. He seeks statutory penalties of $110 per day for the period of January 26, 2016 to December 14, 2018. Defendant counterclaimed against Plaintiff for breach of contract under California state law. Calbiotech seeks relief on its Counterclaim including a $12,500 judgment against Raya. Calbiotech does not include any “statement of the grounds for the court’s jurisdiction” in its Counterclaim. The court does not have federal question or diversity jurisdiction over the Counterclaim. Calbiotech has not demonstrated that the court has, and should exercise, supplemental jurisdiction over the Counterclaim. The court denied Calbiotech’s Motion for Summary Judgment. The court concluded, however, that Calbiotech is entitled to summary judgment in its favor on Raya’s ERISA claim for statutory penalties based on Raya’s requests for Plan information on July 26, 2016, August 8, 2016, November 30, 2016, December 7, 2016, and December 13, 2016. Calbiotech is not entitled to summary judgment in its favor on Raya’s ERISA claim for statutory penalties based on Raya’s requests for Plan information on February 6, 2018, and February 23, 2018 because it did not comply with Plaintiff’s request.

Withdrawal Liability & Unpaid Contributions

Seventh Circuit

Teamsters Local Union No. 727 Health & Welfare Fund v. Illinois State Toll Highway Auth., No. 19-CV-5839, 2020 WL 2324135 (N.D. Ill. May 11, 2020) (Judge Sharon Johnson Coleman). Tollway entered into participation agreements with Plaintiffs for Tollway’s employees to enroll in the Health and Welfare Plan. The agreements expired in March 2019, with a grace period for negotiations of a new CBA after the expiration. The parties negotiated to create a new Collective Bargaining Agreement, but one was never finalized and approved by both parties. Defendant Tollway decided to open its own employee benefit health and welfare plan in May 2019—arguably after the Participation Agreements expired and the grace period had elapsed—and leave the Health and Welfare Plan. Plaintiffs brought this lawsuit seeking to enforce the language of the plan and collect unpaid contributions from Tollway. Tollway filed a motion to dismiss. The court determined that by the plain language of the plan, the original CBA and Participation Agreements were still in effect and denied Tollway’s motion with respect to the declaratory judgment and unpaid contributions.

Ninth Circuit

Bd. of Trustees of Pac. Coast Roofers Pension Plan v. Petersen-Dean, Inc., No. 18-CV-06824-NC, 2020 WL 2404613 (N.D. Cal. May 12, 2020) (Magistrate Judge Nathanael M. Cousins). In this dispute over withdrawal liability payments, the court granted the Plan’s motion for summary judgment, finding no basis to apply an “equitable exception” to the general “pay now, dispute later” rule under existing Ninth Circuit law.

Nw. Administrators, Inc. v. Columbia Ford Hyundai, Inc., No. C19-0101-JCC, 2020 WL 2410461 (W.D. Wash. May 12, 2020) (Judge John C. Coughenour). The court granted Plaintiff’s motion for summary judgment, finding Plaintiff entitled to judgment in its favor and to an award of $28,600.00 in delinquent contributions, $5,720.00 in liquidated damages, $8,677.07 in interest accrued as of March 1, 2020, and its reasonable attorney fees and costs.

Carpenters Health & Sec. Tr. of W. Washington v. GHL Architectural Millwork, LLC, No. 19-CV-01030-RAJ, 2020 WL 2333784 (W.D. Wash. May 11, 2020) (Judge Richard A. Jones). In this dispute over fringe benefit contributions, the court denied Plaintiffs’ motion for default judgment without prejudice to refiling with corrections, including establishing their entitlement to a specific amount of contributions and audit claim expenses. Plaintiffs must also support their breach of fiduciary duty claim with relevant statutes, case law, and factual allegations.

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