Howard Jarvis Taxpayers Ass’n v. California Secure Choice Ret. Sav. Program, No. 20-15591, 2021 WL 1805758, __ F.3d __ (9th Cir. May 6, 2021) (Before Circuit Judges Hurwitz and Bress and District Judge Clifton L. Corker (E.D. Tenn.)).

According to the Bureau of Labor Statistics, more than 30 percent of private industry workers do not have access to an employer-provided retirement plan, amounting to almost 40 million employees. To combat this problem, many states (and the City of Seattle) have adopted government-run auto-enrollment retirement programs.

In 2017, California enacted its version, called CalSavers, which is gradually being phased in. Generally, CalSavers applies to businesses with more than five employees that do not already have a retirement plan. The law is mandatory and requires businesses to perform three basic functions: (1) register with the CalSavers program, (2) provide the program with contact and identifying information for their eligible employees, and (3) set up a payroll deposit arrangement through which they remit employees’ contributions to the program (the default is 5%). Employees may opt out of contributing.

CalSavers is also notable for what it prohibits: it forbids employers from endorsing or restricting participation in the program; it forbids employers from advising employees regarding contributions; it forbids employers from contributing to their accounts; and employers are not fiduciaries of the program and have no responsibility or liability for the administration, investment, or performance of the program.

The Howard Jarvis Taxpayers Association, a conservative California public interest organization, sued the program, arguing that it was illegal because it was preempted by ERISA. The district court disagreed, upholding the program, and HJTA appealed.

The Ninth Circuit affirmed. At the outset, it dismissed the argument that Congress had already resolved the issue. HJTA argued that Congress had rejected a 2016 Department of Labor rule that sought to exempt CalSavers from ERISA under a safe harbor. However, the court held that this Congressional action only rejected the idea that CalSavers was automatically exempt from a preemption analysis, and did not actually answer the question of whether it was preempted. The court further noted that plans that do not meet safe harbor criteria are not necessarily ERISA plans, and thus a traditional preemption analysis was required.

Under that analysis, the court found that CalSavers was not preempted. The court first noted that the plan was created and run by the government, and was not “established or maintained” by an employer. California determines eligibility rules for the program, and acts as the sole fiduciary for it. To be sure, the program imposes requirements on employers, but the court found that these requirements were insufficient to constitute the “establishment or maintenance” of a plan by the employers. Instead, they were “essentially mechanical,” involving only registering for the program, providing the state with basic employee information, and processing payroll deductions according to a formula.

Second, the court found that CalSavers does not impermissibly “relate to” an ERISA plan. CalSavers specifically exempts employers who already have an ERISA-governed retirement plan, and thus it has no explicit effect or impact on such plans. The court found it irrelevant that CalSavers might “compete” with ERISA plans, or create incentives for employers in creating and structuring their own plans, because the effect was indirect and did not bind or force employers in making any particular choices.

The court closed by acknowledging the important policy debate about the wisdom of creating public retirement plans as an alternative to traditional ERISA plans, but stated, “[T]hese are issues for California’s lawmakers and those who elect them, or for Congress should it choose to take up this issue.” The court’s sole role was to determine if CalSavers was preempted by ERISA, and the answer was no.

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

Attorneys’ Fees

Second Circuit

Landry v. Metro. Life Ins. Co., 19 Civ. 3385 (KPF), 2021 WL 1731835  (S.D.N.Y. May. 3, 2021) (Judge Katherine Polk Failla). The court had previously denied both parties’ cross-motions for summary judgement in this ERISA matter seeking disability benefits. The court remanded the claim to the insurer for consideration of the plaintiff’s appeal.  The plaintiff asked for attorney’s fees, and the court denied the request without prejudice to future renewal.  Plaintiff moved for reconsideration and the court did not reverse its stance, finding that the plaintiff did not provide evidence that met the standard for reconsideration. The court held that attorney’s fees were awarded at its discretion, and that it would be premature to award to fees before learning how the insurer responded on appeal and how any future motion practice resolved.   

Sixth Circuit

Duncan v. Minn. Life Ins. Co., No. 3:17-CV-00025, 2021 WL 1759634 (S.D. Ohio, May 4, 2021) (Judge Perry R. Staub, Jr.). Defendant filed a motion for award of attorney’s fees against life insurance plan participants who unsuccessfully pursued claims for benefits. The court analyzed the factors set forth in Sec’y of Dep’t of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985), and determined that plaintiffs’ claims were not frivolous or pursued in bad faith. The court determined the litigation was the type of case that warranted punishment of plaintiff; to the contrary, the court was concerned with how an award of attorney’s fees in this case might discourage proper ERISA claimants from bringing claims in good faith. Although the court understood defendant’s frustration and commended defendant for limiting its request for fees to specific categories, the court denied the motion and declined to award attorney’s fees.

Breach of Fiduciary Duty

Fourth Circuit

Conner v. Assoc. Radiologists, Inc. et al., No. 2:19-cv-00329, 2021 WL 1821308 (S.D. W.V. May 5, 2021) (Judge Thomas E. Johnston). Before the court were Cross-Motions for Summary Judgment and Plaintiff’s Motion for Summary Judgment on Counterclaim in a suit brought by a doctor who was a plan participant in a defined benefit pension plan sponsored by the radiology practice for which he worked. The court denied all the motions. With regard to plaintiff’s 502(a)(3) claim – the dispute was over a lump sum payment claimed by plaintiff – the Court addressed both plaintiff’s and defendants’ arguments together. Plaintiff claimed defendants’ termination of the ERISA plan at issue breached the fiduciary duty owed to him by Defendants. Plaintiff argued that a representation, made to him by defendants, that they would contribute a certain amount to the Plan in order for him to access his lump sum payout was a “tailored representation” and that this misrepresentation was material and a breach of its fiduciary duty. Defendants argued that there was no misrepresentation: they told plaintiff what amount was needed to overcome the shortfall, and the radiology practice contributed the required amount. Defendants argued that nothing they said or represented to plaintiff would relieve him of his obligations to the Plan as a shareholder of ARI. The court found that the record was not clear as to whether plaintiff was told by defendants that his obligations to the Plan were relieved following his retirement announcement and for this reason, there remain reasonable questions of fact, precluding summary judgment

Fifth Circuit

In Re: Vantage Benefits Administrators, Inc., et al. v. Matrix Trust Company, Matrix Settlement & Clearance Services, LLC, et al., No. 18-31351-SGJ-7, 2021 WL 1815065 (Bankr. N.D. Tex. May 5, 2021) (Bankruptcy Judge Stacey G.C. Jernigan). This Adversary Proceeding relates to the Chapter 7 bankruptcy case of Vantage Benefits Administrators, Inc. (“Vantage”). According to the complaint, Vantage was founded in or about 1997, and its primary business activity was providing a full spectrum of services as a “third-party administrator” (“TPA”) for numerous employee retirement benefit plans of several third-party companies. TPAs, like Vantage, contract with clients/companies to provide services such as record-keeping, processing of plan participants’ requests for distributions, and providing information to participants about their accounts. Vantage did not actually handle the retirement funds—rather it contracted out the custodial services for the retirement accounts to two entities referred to as the “Matrix Defendants”. An involuntary Chapter 7 bankruptcy petition was filed against Vantage by certain of its creditors on April 19, 2018. The involuntary petition was commenced approximately six months after Vantage’s headquarters were raided by the FBI on October 25, 2017, and its co-owners, Jeff and Wendy Richie (the “Richies”), husband and wife, were arrested for (and later pleaded guilty, in June 2020, to) a massive embezzlement scheme. The embezzlement scheme involved unauthorized distribution requests sent by the Richies to the Matrix Defendants, requesting transfers of funds from 13 different pension plans and 7 retirement plan accounts that Vantage administered, which occurred over several years, and resulted in the theft of millions of dollars. The Trustee argued that the Matrix Defendants’ overall way of doing business “made it easy” for the Richies to embezzle in the manner they did—the Matrix Defendants had exclusive control over plan assets, and they did not implement appropriate measures and controls. The Matrix Defendants sought to dismiss all claims brought against them based on lack of standing, the doctrine of in pari delicto, and failure to state a claim upon which relief can be granted. The court held that the Trustee has standing to sue for breach of a contract (i.e., the Service Agreement) to which both the Debtor and the Matrix Defendants were parties. This was a cause of action that might have been asserted by Vantage—as a party to the Services Agreement—and, thus, was inherited by the Trustee. The court nevertheless held that the Trustee failed to sufficiently plead statutory standing under ERISA or section 704(a)(11) of the Bankruptcy Code to bring the ERISA claims. The court also held that it appeared plausible that the Matrix Defendants could be deemed to be Vantage’s agent and this to owe fiduciary duties that covered transfers made by the Matrix Defendants that they knew or should have known were illegal and not in the best interest of the Debtor or the plan participants, as alleged by the Trustee, and granted the Trustee 14 days to amend to attempt to plead such standing.

Class Actions

Sixth Circuit

Stark v. KeyCorp, et al., Case No. 1:20-CV-01254, 2021 WL 1758269 (N.D. Ohio May 4, 2021) (Judge Pamela A. Barker). Plaintiffs filed a putative class against defendants KeyCorp and the Trust Oversight Committee, alleging that defendants breached their duties under ERISA in relation to defendants’ 401(k) plan (the “Plan”). Plaintiffs alleged that defendants (1) breached their duties of prudence and loyalty with respect to the payment of excessive administrative fees, (2) breached their duty of prudence with respect to the payment of excessive managed account fees, and (3) breached their duties of prudence and loyalty with respect to the decision to retain the MaGIC Fund as the Plan’s stable value fund option. Defendants filed a motion to dismiss plaintiffs’ amended complaint. The court granted in part and denied in part. The court found that plaintiffs’ allegations were sufficient to state a claim for the breach of Defendants’ duty of prudence with respect to the Plan’s alleged payment of excessive administrative fees. In doing so, the court recognized that while a plaintiff must offer sufficient factual allegations to show that he or she is not merely engaged in a fishing expedition or strike suit, courts must also take account of their limited access to crucial information. However, the court held plaintiffs failed to allege facts supporting their claim for breach of the duty of loyalty. To state a claim for breach of the duty of loyalty, a plaintiff must allege facts that permit a plausible inference that the defendant engaged in transactions involving self-dealing or in transactions that otherwise involve or create a conflict between the trustee’s fiduciary duties and personal interests. The court found that the only allegations that supported plaintiffs’ claim independent of their allegations with respect to the excessiveness of the Plan’s administrative fees were that defendant KeyCorp and the plan administrator had a “close relationship” and that the plan administrator also administered KeyCorp’s pension plan, retiree medical plan, and online HR portal, all of which KeyCorp paid for independently of the Plan. The court held that even taking into account plaintiffs’ potential lack of access to inside information, to assume defendants engaged in self-dealing without additional factual allegations was too speculative. Accordingly, the court granted defendants’ motion to dismiss with respect to plaintiffs’ duty of loyalty claim. The court also granted defendants’ motion to dismiss as to the duty of prudence claim. The court found that plaintiffs’ self-selected stable value funds only outperformed the MaGIC Fund by half a percentage point over the last ten years and that such a small difference in performance did not support an inference that no reasonable fiduciary would have retained the MaGIC Fund, especially when the MaGIC Fund performed better than the comparator funds in only one of the relevant years. Moreover, plaintiffs did not allege that the MaGIC Fund underperformed any benchmark disclosed to Plan participants. The court held that plaintiffs failed to allege sufficient facts from which the court could infer that an adequate investigation would have revealed to a reasonable fiduciary that investment in the MaGIC Fund was improvident. Therefore, defendants’ motion to dismiss was granted with respect to plaintiffs’ prudence claim with regard to the Plan’s investment in the MaGIC Fund. Lastly, the court held that plaintiffs stated a plausible claim for failure to monitor as plaintiffs specifically alleged that defendant KeyCorp was responsible for appointing and removing members of the committee and breached its fiduciary monitoring duties in various ways.

Green, et al., v. FCA US LLC, No. 20-13079, 2021 WL 1750118 (E.D. Mich. May 4, 2021) (Judge George Caram Steeh). Plaintiff’s claim arose under ERISA, as amended by COBRA. The COBRA amendment ensures that employees who lose coverage under their company’s ERISA plan do not go without health insurance before they can find suitable replacement coverage. Plaintiffs alleged that the COBRA notices they received when they terminated employment were deficient because it failed to identify the name and contact information of the plan administrator and because it contained unnecessary warnings that confused and discouraged them from electing continued health care coverage. Instead of identifying defendant as the plan administrator, the notice references BenefitConnect as the “party responsible for COBRA administration under your plan.” According to plaintiffs, the notice was not “written in a manner calculated to be understood by the average plan participant” as required by 29 C.F.R. § 2590.606-4. The court held that although plaintiffs had standing to pursue their notice claim based upon allegedly confusing statements that discouraged them from electing coverage, they did not have standing to challenge the allegedly incorrect identification of the administrator of the plan. In addition, the court concluded that plaintiffs plausibly alleged that the COBRA notice was not written in a manner calculated to be understood by the average plan participant because it contained a misstatement of law. Accordingly, defendant’s motion was denied as to this claim.

Disability Benefit Claims

Ninth Circuit

Alves v. Hewlett Packard Enter. Comprehensive Welfare Benefits Plan, No. 2-16-CV-09136-RGK-JEM, 2021 WL 1788398 (C.D. Cal. May 4, 2021) (Judge R. Gary Klausner). Previously the court found that Sedgwick, a third-party administrator, had not abused its discretion in its denial of short term (STD) and long term disability (LTD) benefits to plaintiff. Plaintiff appealed. The Ninth Circuit upheld the denial of STD benefits but remanded on the LTD benefits claim, instructing Sedgwick to redo its LTD evaluation. Sedgwick performed another review and again denied benefits. Plaintiff again sought the court’s review of Sedgwick’s denial. Plaintiff argued three reasons why Sedgwick improperly denied him LTD benefits: (1) Plaintiff cannot sit for more than four hours in an eight-hour day and was therefore disabled as a matter of law; (2) Sedgwick did not adequately explain why it deviated from the SSA’s decision that plaintiff was disabled; and (3) Sedgwick ignored stress and plaintiff’s leg edema. The court rejected the first argument because it identified a competing, plausible interpretation of a reviewing doctor’s assessment of plaintiff’s sitting limitation that was compatible with sedentary work. The court rejected the second argument because the key reason for the SSA’s conclusion was that an SSA regulation, Medical-Vocational Rule 201.06—one that Sedgwick was not subject to—required the SSA to find plaintiff disabled. The court rejected the third argument because Sedgwick had evaluated plaintiff’s medical condition from a global perspective, even if the analysis of some specific conditions seemed to be in passing. 


Fourth Circuit

Conner v. Assoc. Radiologists, Inc et al., No. 2:19-cv-00329, 2021 WL 1792531 (S.D. W.V. May 5, 2021) (Judge Thomas E. Johnston). On July 18, 2019, the Court entered a scheduling order which established a deadline for expert witness disclosures. Plaintiff met the deadline. Defendants filed a timely disclosure naming their expert but did not include his report. Defendants filed the report after the deadline. Plaintiff moved to strike Defendants’ disclosure and the Court granted that motion. Defendants moved for reconsideration on several grounds, none of which the court found persuasive. Accordingly, the court denied defendants’ motion.

ERISA Preemption

Eleventh Circuit

Am. Gen. Life Ins. Co. v. Collum, No. 8:20-cv-2754-WFJ-CPT, 2021 WL 1788650 (M.D. Fla. May. 5, 2021) (Judge William F. Jung). The insurer filed a declaratory relief and interpleader action to determine the proper beneficiary for pension benefits under an annuity.  The deceased insured had three survivors: his second wife Valerie Collum, whom he married in 1994 and left in 1995 but never divorced; his third partner Toni Jean Brown, whom he moved in with in 1995 but never married, and left in 2017; and his daughter Laura Lynn Scott. The insured failed to obtain Valerie Collum’s permission when he designated Ms. Brown his beneficiary in 2008.  He then submitted a change form in 2017 changing the beneficiary to Ms. Scott, his daughter. Mrs. Collum filed a counterclaim against the insurer pro se, alleging that the insurer failed to investigate public records regarding the insured marital status when it changed the beneficiary. The court held that this counterclaim was preempted by ERISA, and also failed to allege a cause of action under Florida law. 

Life Insurance & AD&D Benefit Claims

Fifth Circuit

Hirschey v. Hartford Life & Accident Ins. Co., No. CV H-20-2935, 2021 WL 1783546 (S.D. Tex. May 5, 2021) (Judge Lynn N. Hughes). At issue was $100,000 in accidental death benefits. Plaintiff’s wife, Colleen, died after falling in her home. Plaintiff, based on the report of Colleen’s oncologist, said that the fall caused acute muscle injuries which led to rhabdomyolysis and fasciitis. He argued that these led to renal and then heart failure, which were the ultimate causes of her death. Hartford said Colleen was septic before the fall. It argued she was immunocompromised from chemotherapy and that caused her sepsis. The sepsis caused necrotizing fasciitis—which led to her death. The court found the oncologist’s report included “speculation” that Colleen would have survived if she had not fallen—including winning her battle with cancer and chemotherapy. The court opined that the fall was not the sole cause of her death. Her pre-existing illnesses – including cancer, chronic back pain, and morbid obesity – caused her to not be able to get up or call for help on the ground. Her inability to get help, at least in part, caused her death, so the loss resulted from her sickness and diseases. Under the policy, the court ruled her death was not the result of an injury from the fall – which precluded Plaintiff from receiving the benefits. The court then strayed from the merits to offer the following advocacy advice: “If Hirschey had spent more effort in his pleadings arguing the facts and the record rather than pontificating on the law, his arguments might have been more persuasive. Attempting also to attack Hartford by referring to conclusions in cases – some being 12 years old – from district courts across the country without the facts to compare is fundamentally unsound to argue one’s case.”

Pension Benefit Claims

Third Circuit

In re Quest Diagnostics Inc. ERISA Litigation, No. 20-07936, 2021 WL 1783274 (D.N.J. May 4, 2021) (Judge Susan D. Wigenton). Defendants moved to dismiss allegations of breach of fiduciary duty for mismanagement of the plan in selecting and failing to monitor investment options that were significantly underperforming compared to their respective benchmarks. They also moved to dismiss allegations that the plan was overpaying for recordkeeping costs. The court denied the motion, finding the allegations sufficient to state the claims. The court noted that one of the investment options underperformed by 427 basis points and another underperformed by 801 basis points compared to their benchmarks, from which is could be inferred that the repeat underperformance potentially reflects an imprudent choice.

Ninth Circuit

Gamino v. KPC Healthcare Holdings, Inc., No. 5:20-CV-01126-SB-SHK, 2021 WL 1729689 (C.D. Cal. Apr. 30, 2021) (Judge Shashi Kewalramani). Gamino is a plan participant in the KPC Healthcare, Inc. Employee Stock Ownership Plan (“ESOP”). In preparation for a motion for class certification, plaintiffs served written discovery on defendants. Defendants objected to plaintiffs’ request that they produce the names and contact information for all participants in the ESOP. The court denied defendants’ request to allow them to refuse to respond to plaintiffs’ request for production, reasoning that the Ninth circuit has favored allowing class contact information discovery. The information was deemed relevant to the class certification motion, and the court concluded that plaintiffs were not seeking the information for an improper purpose. The ESOP was ordered to respond to plaintiffs’ request for production of the contact information of the ESOP participants because they are putative class members.  

Pleading Issues & Procedure

Second Circuit

Brown and Lipscomb, individually and on behalf of others similarly situated v. Daikin America, Inc. et al, No. 18-cv-11091, 2021 WL 1758898, (S.D.N.Y. May 4, 2021) (Judge Paul A. Crotty).  Plaintiffs individually and on behalf of a class of participants in the Daikin America, Inc. 401(k) Savings and Retirement Plan (the “Plan”) filed a putative class action against Daikin America and a group of individual fiduciaries (collectively “Daikin”) for breach of fiduciary duties related to the mismanagement of the Plan’s investment portfolio. Before the court was Daikin’s motion to dismiss, which asserted that plaintiffs lacked Article III standing and failed to state claims upon which relief could be granted. The court held that plaintiffs had Article III standing as the nature of the lawsuit was derivative, not personal, and plaintiffs’ interests are within the zone of interests that ERISA was intended to protect. Daikin also argued, anticipating that derivative standing may exist, that plaintiffs’ alleged injuries do not actually affect the Plan as a whole, but were personal injuries that abrogate the derivative nature. The court disagreed, explaining that the mere fact that plaintiffs stand to recover in their individual capacities as investors does not abrogate the nature of their lawsuit. As to the failure to state claims upon which relief can be granted, the court found in favor of Daikin for the following reasons: (1) plaintiffs’ breach of the duty of loyalty claim did not allege plausible facts that Daikin selected the funds to benefit anyone other than the participants or beneficiaries; and (2) plaintiffs’ breach of prudence claim did not demonstrate flaws in Daikin’s knowledge, methods or investigation in arriving at the investment decisions.  The court therefore granted Daikin’s motion to dismiss with prejudice and terminated the case.

Eleventh Circuit

Stewart v. Hartford Life & Acc. Ins. Co., No. 2:17-CV-01423-KOB, 2021 WL 1816961 (N.D. Ala. May 6, 2021) (Judge Karon Bowdre). Hartford denied Stewart’s claims for life insurance waiver of premium and long-term disability (LTD) benefits. After discovery, both parties filed motions for summary judgment, and Stewart filed a motion to strike. The court noted that Stewart had no basis for filing the motion to strike. Under the applicable abuse of discretion standard of review, ERISA cases are decided based on the facts known to the administrator. Stewart did not contest that the facts to be struck were known to Hartford; instead, she argued about the conclusions Hartford drew from the facts. The court determined the proper place for these arguments was in the responsive brief, and that it was not obligated to consider them. Stewart’s motions for summary judgment on her benefit claims were denied under the abuse of discretion standard. Her LTD claim was denied based on the policy’s exclusion for claimants already receiving disability benefits under a prior policy. Her life waiver of premium claim was denied because an adverse medical exam found her to be not disabled. The court determined neither decision was an abuse of Hartford’s discretion.  


Third Circuit

Wilson v. Aerotek, Inc., No. 20-1678, 2021 WL 1828428 (3rd Cir., May 7, 2021) (Before Hardiman and Roth, Circuit Judges, and Pratter, District Judge). Wilson sued his former employer and supervisor alleging violations of the Family and Medical Leave Act and that he had been defamed. His employer, Aerotek counterclaimed under ERISA, alleging Wilson violated the non-compete provision of the investment plan, seeking ERISA equitable disgorgement. Wilson argued that he not knowingly violate the terms of his investment plan and should not be subject to ERISA equitable disgorgement. However, the Third Circuit determined that Wilson had waived any argument regarding his state of mind because the parties’ joint motion had stipulated that there were “no triable disputes of fact on the remaining claims in this case.” Wilson also argued that the investment plan did not authorize disgorgement, but the court explained that there is no requirement that relief available under ERISA must be explicitly stated in the plan.

Standard of Review

Second Circuit

Tyll v. Stanley Black & Decker Life Ins. Program, No. 20-1060, 2021 WL 1748474 (2d Cir. May 4, 2021) (Circuit Judges Robert D. Sack, Richard C. Wesley, and Steven J. Menashi). The appellant, a beneficiary under a life insurance plan who sought benefits after the death of her husband, argued the district court committed reversible error by reviewing Aetna’s benefit decision under an abuse of discretion, instead of a de novo, standard of review. The court found the district court correctly concluded the plan delegated discretionary authority to Aetna. The court read the plan language that the insurance company will decide claims and appeals “in accordance with its reasonable claims practices” to indicate a subjective standard because there is a broad range of choices within which Aetna may resolve claims. The court found that Aetna created processes to determine eligibility which indicates it exercises discretionary authority. The court also relied on similar language found in other cases. The court found that Tyll did not timely raise the argument that de novo review applied because she was not provided the claims guidelines. The court further found that plaintiff did not identify case specific conduct demonstrating Aetna’s conflict of interest affected its decision. Finally, the court found that even under a de novo review, appellees would still prevail because plaintiff’s husband’s death was not an accident within the meaning of the policy. 

Withdrawal Liability & Unpaid Contributions

Tenth Circuit

Regional Local Union Nos. 846 & 847 v. Mile High Rodbusters, Inc., No. 1:20-CV-00673-SKC, 2021 WL 1837650 (D. Colo. May 7, 2021) (Mag. J. S. Kato Crews). This is an action by a group of multi-employer ERISA benefit funds against a participating employer and various other defendants for the employer’s alleged failure to contribute to the funds as required under a collective bargaining agreement. The funds had previously obtained a default judgment against the employer, but were unable to collect on it, and thus brought this action against the employer and alleged alter egos of the employer. The defendants filed a motion to dismiss, arguing that res judicata and collateral estoppel barred the action, and that they were not alter egos of the defaulting employer. The court agreed that res judicata barred the new claims against the employer because they either were brought or could have been brought in the first litigation. However, the court allowed the funds’ claims against the alter ego defendants, finding that the funds’ complaint contained allegations that the new company and its owners performed the same type of work, worked for the same contractors, and used the same bank, insurance providers, and suppliers. These allegations were sufficient to pierce the corporate veil and support an alter ego claim.