Harrison v. Envision Mgmt. Holding, No. 22-1098, __ F. 4th __, 2023 WL 1830446 (10th Cir. Feb. 9, 2023) (Before Circuit Judges Bacharach, Briscoe, and Murphy)
Once again, arbitration is the topic of this week’s notable decision. ERISA plaintiffs have had a string of successes lately in their efforts to keep claims out of arbitration and in federal court, and this case is no exception.
The underlying merits of this suit involve an employee stock ownership plan (ESOP) that was formed in 2017 by the board of directors and owners of Envision Management Holding, Inc., a privately-held shell company that owns Envision Management, LLC, a company that provides diagnostic imaging. Together, the companies employ around 1,000 individuals, among whom was the plaintiff, Robert Harrison, who was employed by Envision for four years until 2020. As a result, he was an “eligible employee” and a participant in the ESOP.
Mr. Harrison’s suit alleges that the owners of Envision created the ESOP so that they could sell 100% of their stock in the privately-held companies for $163.7 million, while maintaining control over the companies through side agreements with the trustee that they selected for the ESOP. He further alleges that because the ESOP did not have enough money to purchase the stock, it borrowed $103,537,461 from the owners and an additional $50,822,524 from the company at an interest rate of 12%. What’s more, the trustees approved a sale of the stock in which the ESOP paid two different share prices for the same stock, buying the majority of stock at $1,770 per share and a significant but smaller amount of stock at $1,404 per share.
The suit claims that there was no sensible reason for the ESOP to pay two different prices for the stock, especially given that the company’s articles of incorporation indicated that there was only one class of stock and that it was set at par value. Mr. Harrison also claims that just a few weeks after the initial ESOP purchase of the stock, it was valued at $349 per share. Finally, he claims that the company used the contributions slated for the participant accounts to pay down the $154.4 million debt. In other words, Mr. Harrison alleges that the sellers, with the assistance of the trustee, financially benefited by selling the company to the ESOP for significantly more than it was worth, while maintaining control over the company. His suit seeks plan-wide relief on behalf of the ESOP.
Several months after the suit was filed, the defendants sought to compel arbitration and stay the court proceedings under a provision in the ESOP plan document entitled “ERISA Arbitration and Class Action Waiver.” Mr. Harrison opposed, arguing that enforcing the provision would impose a severe limitation on the substantive relief afforded under ERISA. The district court agreed, concluding that the arbitration provision conflicts with ERISA, and accordingly denied the motion to compel arbitration and to stay.
The Tenth Circuit affirmed the district court’s decision. The court began by acknowledging the Federal Arbitration Act’s “liberal federal policy favoring arbitration agreements.” The court also noted that arbitration agreements are contracts and therefore no party can be forced to arbitrate if they have not previously agreed to submit to arbitration.
Of most relevance here, the court noted that the Supreme Court has recognized an “effective vindication” exception to compelled arbitration, under which the “key question is whether ‘the prospective litigant effectively may vindicate its statutory cause of action in the arbitral forum.’” If not, the litigant cannot be forced to arbitrate a claim. However, the Tenth Circuit also pointed out that, although the Supreme Court has recognized this exception on numerous occasions, “it has, to date, declined to actually apply the exception to any case before it.”
With these background principles in mind, the court turned to the parties’ arguments with respect to the applicability of the “effective vindication” exception. The defendants argued that the exception did not apply because the arbitration clause did not preclude the availability of all relief in this suit, and that the Department of Labor could file suit seeking plan-wide relief. The Department of Labor, which had filed an amicus brief in support of Mr. Harrison, disagreed, noting that Mr. Harrison had brought claims as permitted under ERISA Section 502(a)(2) in a representative capacity on behalf of the plan, seeking to recover losses to the plan and to replace the trustee. Likewise, Mr. Harrison argued that the ESOP’s arbitration clause “impermissibly restricts remedies and abridges substantive rights” by precluding these expressly authorized plan-wide remedies.
To resolve this disagreement, the court identified the ERISA remedies being sought by Mr. Harrison in order to determine whether the arbitration provision would prevent him from obtaining them in arbitration. The court specifically looked to the section of the complaint helpfully entitled “PLAINTIFF SEEKS PLAN-WIDE RELIEF,” which set forth six causes of action, each with claims for relief.
The first two claims were for prohibited transactions, one seeking appropriate relief under ERISA Section 409 against plan fiduciaries and the other seeking equitable relief, including disgorgement of profits, against the non-fiduciary sellers. The third count was a claim for imprudence and disloyalty against the trustee and ESOP committee defendants for failure to investigate the terms of the ESOP transaction, as well as the financial projections and assumptions, which sought relief under ERISA Sections 502(a)(2), (a)(3) and 409(a). The fourth count was a claim for imprudence and disloyalty against the board of directors for failing to properly oversee the trustee, which sought the same type of relief under the same provisions as the third count. The fifth count was a claim for co-fiduciary liability under ERISA Section 405 against the board of directors, which sought to hold them liable for the ESOP’s losses. Finally, the sixth count alleged fiduciary breaches against all the defendants for adopting self-serving indemnification agreements, and sought to void those agreements.
Thus, the court noted that four of the six counts sought relief under ERISA Sections 502(a)(2) (and 409) and 502(a)(3). And, the court pointed out, the Supreme Court has long recognized that relief under Section 409, as enforced through Section 502(a)(2), provides remedies for the plan, even in the context of a defined contribution plan.
The court next reviewed the terms of the ESOP’s arbitration provision, concluding that the terms of the provision encompassed Mr. Harrison’s claims and expressly provided that such claims must be brought in an “individual capacity and not in a representative capacity or on a class, collective or group basis.” The court found the representative capacity provision more problematic than the prohibition on class actions, noting that the Supreme Court has blessed the latter. The court did not, however, decide the arbitration issue on that basis.
Instead, the court looked to the second sentence of the plan’s arbitration provision, which specified that the “Claimant may not seek or receive any remedy which has the purpose or effect of providing additional benefits or monetary or other relief to any Eligible employee, Participant or Beneficiary other than the Claimant.” In the court’s view, this clause prevented Mr. Harrison from obtaining in arbitration some of the forms of relief that he sought under Section 502(a)(2), including the recovery of plan losses, some of the declaratory and injunctive relief he sought, and disgorgement of profits. This was confirmed, in the court’s view, by the third sentence of the arbitration provision, which specified that claimants asserting claims under Sections 502(a)(2) and 409(a) could only recover their own losses or a pro-rated share of the plan’s losses or other relief that does not include any additional relief. Because the arbitration provision was written in a manner intended to foreclose the plan-wide relief that Mr. Harrison sought, the Tenth Circuit “conclude[d] that the effective vindication exception applies in this case.”
The court found its conclusion bolstered by the Seventh Circuit’s decision in Smith v. Board of Directors of Triad Manufacturing, Inc., 13 F. 4th 613 (7th Cir. 2021), “a case with strikingly similar facts and claims.” (Your ERISA Watch covered the Smith decision in its September 15, 2021 issue.) In Smith, the Seventh Circuit concluded that a similar arbitration provision with a ban on representative actions and plan-wide remedies was unenforceable because “what the statute permits, the plan precludes.” The Tenth Circuit concluded that the same was true in this case.
Having so concluded, the court turned to and rejected each of the defendants’ remaining arguments for compelling arbitration. The court found that defendants’ argument that arbitration was required because ERISA requires that fiduciaries to act in accordance with plan terms flew in the face of the “effective vindication” exception that it had just addressed and found applicable.
The court likewise rejected the contention that its ruling meant that arbitration provisions of this type could never be enforced with respect to ERISA plans, noting that it would not bar arbitration in a case where an ERISA plaintiff was asserting a claim unique to that plaintiff.
The defendants next argued that the Supreme Court’s pro-arbitration decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), required arbitration because ERISA did not contain a clearly expressed intention to override the Federal Arbitration Act. The Tenth Circuit, however, pointed out that Epic did not involve the “effective vindication” exception and, in any event, supported, rather than undercut, the application of the exception in a case such as Harrison where the arbitration provision eliminated substantive forms of relief afforded to a plaintiff under a federal statute. For similar reasons, the court rejected defendants’ argument that the arbitration agreement had essentially waived remedies, finding that arbitration agreements can waive procedure but not substantive remedies.
As a final matter, the Tenth Circuit rejected defendants’ contention that the arbitration provision would not preclude plan-wide relief because the Department of Labor could seek such relief. The court wisely pointed out that “nothing in the statute requires the Secretary of the DOL to file any such suit, and it is unreasonable to assume that the DOL is capable of policing every employer-sponsored benefit plan in the country.”
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Breach of Fiduciary Duty
Probst v. Eli Lilly & Co., No. 1:22-cv-01106-JMS-MKK, 2023 WL 1782611 (S.D. Ind. Feb. 3, 2023) (Judge Jane Magnus-Stinson). Plaintiff Jennifer Probst, a participant of a mega defined contribution plan with over $8 billion in assets, the Lilly Employee 401(k) Plan, brought suit individually and on behalf of a putative class of plan participants and beneficiaries against her employer, the Eli Lilly & Co., the company’s board of directors, and the plan’s advisory and benefit committees for breaches of fiduciary duties of prudence, loyalty, and monitoring. In her complaint, Ms. Probst alleged that the Lilly defendants imprudently paid excessive amounts in recordkeeping and administrative fees, both directly and via revenue sharing, that the co-fiduciaries failed to adequately monitor the other fiduciaries and failed to regularly solicit bids or negotiate for lower fees, and that Eli Lilly & Co. engaged in a prohibited transaction, breaching its duty of loyalty, by paying itself millions of dollars in fees in addition to what the plan was paying to its administrator, essentially paying twice for the same services, enriching the company to the detriment of plan participants. Defendants moved to dismiss. At the outset of this lengthy decision, the court noted that, under Seventh Circuit precedent, it is only required to accept some of Ms. Probst’s allegations as true. “While the Court is cognizant of its general duty to accept Ms. Probst’s allegations as true when considering Lilly’s Motion to Dismiss, it is not required to accept legal conclusions or allegations that are conclusory or implausible.” In the end, most of her allegations were not viewed by the court in a favorable light, as the court perceived them to be conclusory, cherry-picked, and implausible. Although courts dismissing putative ERISA pension fee class actions are quick to point out that evaluating the sufficiency of the claims within them is a context-specific endeavor, this decision, while longer than some, read as materially indistinguishable from some of its companions. Here, as in most of these recent dismissals, the court focused on the differences among the comparators cited in Ms. Probst’s complaint to draw the conclusion that the higher costs paid by the plan were a reflection of the additional and differing services it was receiving, not a reflection of imprudence. The court held that failing to regularly solicit bids, paying for the services of two plan administrators, and engaging in revenue sharing did not violate ERISA, and allegations concerning these matters did not create an inference of any fiduciary wrongdoing. Accordingly, the court granted defendants’ motion to dismiss, dismissing Ms. Probst’s individual claims with prejudice, and her class claims without prejudice.
Beldock v. Microsoft Corp., No. C22-1082JLR, 2023 WL 1798171 (W.D. Wash. Feb. 7, 2023) (Judge James L. Robart). In this putative class action, three former employees of the Microsoft Corporation, participants in the Microsoft Corporation Savings Plus 401(k) Plan, allege the plan’s fiduciaries breached their duties to participants by investing in and retaining a suite of ten BlackRock LifePath Index target date funds despite the suite’s history of significant underperformance. Accordingly, plaintiffs allege these target date funds, which were the default investment option in the plan, were imprudent investments and that the fiduciaries employed a “fundamentally irrational decision-making process” by adding and maintaining them. In their complaint, plaintiffs noted that 24% of the Microsoft 401(k) “Plan’s assets totaling approximately $34.48 billion” were invested in the challenged target date funds. Defendants moved to dismiss. First, they challenged the standing of one of the named plaintiffs, Justin Beldock. All three of the named plaintiffs were invested in the suite of target date funds, but each was invested in a different glide path based on age. Defendants argued that Mr. Beldock could not personally show a concrete injury necessary to confer him with standing because the retirement vintage he invested in performed well throughout the relevant time period. The court agreed. It stated that a plaintiff can only seek plan-wide relief and sue on behalf of a plan if he or she is able to demonstrate individual Article III standing, and that plaintiffs’ contrary and more expansive view of “statutory standing” was therefore off target. The court further expressed that plaintiffs could not explain how Mr. Beldock was harmed, as his investment performed well, even when it was part of a complete suite which on the whole performed poorly. Thus, the court dismissed Mr. Beldock from the action for lack of standing. Defendants next argued that plaintiffs could not state a viable claim of imprudence because defendants had justifiable reasons for selecting the BlackRock target date funds. Defendants’ arguments were again persuasive to the court. It held that the allegations within plaintiffs’ complaint, even when assumed true, did not lead to an inference of any fiduciary breach. Although the fiduciaries could have selected other investment options, their actions here to invest in and not divest from the BlackRock suite was not per se inconsistent with their obligations to the plan and its participants under ERISA. Plaintiffs, the court wrote, “allege no facts…that would ‘tend to exclude the possibility’ that Defendants had reasons to retain the BlackRock TDFs that were consistent with their fiduciary duties.” The court thus granted defendants’ motion to dismiss the breach of duty of prudence claim. And it did the same for plaintiffs’ breach of duty of loyalty claim. There, it stated that plaintiffs’ complaint was even less plausible because they made no allegations that defendants “acted with intent to benefit themselves or a third party.” Finally, without sufficient allegations of these underlying fiduciary breaches, the court dismissed plaintiffs’ dependent claims of monitoring and co-fiduciary breaches. For these reasons, the court granted defendants’ motion to dismiss. Plaintiffs, however, were granted leave to amend their complaint to address the deficiencies identified by the court.
In re Sutter Health ERISA Litig., No. 1:20-cv-01007-JLT, 2023 WL 1868865 (E.D. Cal. Feb. 9, 2023) (Judge Jennifer L. Thurston). Former and current participants of the Sutter Health 403(b) Savings Plan, on behalf of the Plan and a class of its participants and beneficiaries, have sued the plan’s fiduciaries for mismanagement, which they claim constitutes breaches of the fiduciaries’ duties under ERISA. Plaintiffs brought their action under ERISA Sections 409 and 502. They allege that defendants violated their duties of prudence and loyalty by selecting and maintaining the Fidelity Freedom fund suite, a group of costly, actively-managed target date funds, along with three other challenged investment options with poor performance histories, “instead of offering more prudent alternative investments when such prudent investments were readily available.” They claim the cost of the funds at issue were not justified by their low returns, and that it was therefore improper for defendants to maintain these investment options in the plan. Plaintiffs further allege that defendants breached their fiduciary obligations by allowing and failing to eliminate unreasonable fees charged for the plan’s administration. According to their complaint, the plan’s total cost during the relevant period ranged from 0.56% to 0.64% of the net assets of the plan (with the plan’s assets totaling approximately $3.7 billion.) Defendants moved to dismiss for lack of standing and for insufficiently pleaded claims. In addition, defendants moved to strike plaintiffs’ jury demand. In this decision, the court denied in full defendants’ motion to dismiss, but granted their motion to strike. To start, the court declined to take judicial notice of “the more than 600 documents submitted” by defendants in their motion to dismiss. “Indeed, Defendants refer to these documents in their Motion almost exclusively to support their factual arguments contesting Plaintiffs’ claims, though as far as the Court could tell, none of the documents clearly disprove Plaintiffs’ factual allegations. However, the defense fails to cite specifically any particular portion of the documents to show that the plaintiffs’ allegations are untenable. The Court declines to cull through the 600 pages to find the factual nuggets that support the defendants’ motion.” Next, the court turned to evaluating whether plaintiffs have Article III standing to bring their class action. The court adopted, for the purpose of analyzing defendants’ challenge to plaintiffs’ jurisdiction, plaintiffs’ view of standing, understanding standing in the context of class actions to be satisfied when, as here, plaintiffs are suing on behalf of the plan even when they are not personally invested in each and every one of the challenged funds at issue. However, the court did note “that whether the named Plaintiffs may ultimately bring ERISA claims in a representative capacity on behalf of all Plan participants, is a question of class certification – rather than standing – which is not before the Court at this time.” The decision then addressed whether plaintiffs sufficiently stated plausible claims upon which relief could be granted. The court concluded they had. It expressed that an ERISA breach of fiduciary duty complaint need not contain factual allegations expressly referring to a “fiduciary’s knowledge, methods, or investigations at the relevant times” in order to state a viable claim challenging the fiduciaries’ management process. This is so, the court outlined, because plaintiffs lack these specific details at the pleading stage. Usually, at this stage of litigation, this information is within the “exclusive possession of the breaching fiduciary.” Defendants’ contrary positions, the court said, “largely misstate Plaintiffs’ claims or delve into factual disputes.” For these reasons, the court denied defendants’ motion to dismiss, making this decision a refreshing counterpart to many recent court orders taking the opposite route, including the Beldock case discussed above. This decision ended with the court granting defendants’ motion to strike plaintiffs’ jury request. The court held that the nature of the action here would have been historically handled by the courts of equity. Thus, it agreed with defendants that plaintiffs do not have the right to a jury trial in this matter.
Moon v. E.I. duPont de Nemours & Co., No. 19-cv-1856-SB, 2023 WL 1765565 (D. Del. Feb. 3, 2023) (Circuit Judge Bibas, sitting by designation). Retiree M.P. Moon filed this class action against his former employer DuPont, alleging that the company breached its fiduciary duty under ERISA to inform its employees that they were eligible for retirement benefits. DuPont denies that it violated its obligations under ERISA. However, despite the parties’ differing positions, the parties engaged in mediation and reached a settlement. They then brought the settlement, totaling $7 million, before the court for review. In a previous order, the court granted preliminary approval of the settlement, and found the settlement class certifiable under Rule 23. In this order, the settlement was granted final approval by the court which found it “fair, reasonable, and adequate for the whole class,” and the product of informed arms-length negotiations following the production of 20,000 pages of materials during discovery. Class counsel’s requested recovery of one-third of the total amount of recovery for fees, plus approximately $40,000 in expenses and $15,000 for the cost of administering the settlement, were also approved by the court which found the amounts reasonable, “unremarkable,” and adequate compensation for experienced ERISA practitioners. Finally, the court approved the requested $25,000 for a class representative incentive award, with the court commending Mr. Moon for his diligent and active job in participating and achieving an excellent result for the class, including both the substantial monetary and non-monetary relief.
Berceanu v. UMR, Inc., No. 19-cv-568-wmc, 2023 WL 1927693 (W.D. Wis. Feb. 10, 2023) (Judge William M. Conley). In this decision, a district court decertified a class of health plan participants who were denied coverage for residential treatment for mental health and substance abuse disorders, and upheld the named plaintiffs’ denial of benefits, determining that defendant UMR, Inc.’s level-of-care guidelines need not define “medically necessary” as generally accepted standards of healthcare for the purpose of treating illness. To begin, the court addressed standing. Although the court agreed with plaintiffs that they suffered concrete injuries in fact traceable to UMR’s denials, the court stated that plaintiffs, at least on a class-wide basis, could not satisfy redressability. The court did not feel that reprocessing the denied claims for past residential mental healthcare treatment would necessarily redress the injuries of all of the members of the class, especially those whose particular health circumstances have changed or never paid out of pocket for their treatments. “[T]he evidence of record shows already that whether plaintiffs and class members could obtain effective relief from reprocessing, and thereby establishing standing, will require an individual, fact intensive injury and vary substantially among class members.” Accordingly, the court stated that plaintiffs could no longer satisfy Rule 23’s commonality requirement due to the particularized nature of each person’s circumstances, and so decertified the class. Nevertheless, the court was satisfied that the named plaintiffs had Article III standing, and so the second half of the decision focused on analyzing their denials under deferential review. As alluded to above, the court disregarded plaintiffs’ criticism of the guidelines. “These critiques of the guidelines are either contrary to the guidelines themselves, or they amount to disagreements over wording or level of detail insufficient to create an actual, factual conflict between the guidelines and generally accepted standards.” This was true, the court went on to say, because “UMR’s level-of-care guidelines are ultimately applied by experts with extensive experience in behavioral health…who obviously knew how to make level-of-care determinations and what patient-specific factors should be considered.” The court characterized plaintiffs’ action as hoping to define medically necessary in the mental healthcare context in a way that “would have resulted in better care for patients.” But the court wrote that under arbitrary and capricious review, it did not have the power to make that happen. “[T]his court is simply not empowered to disregard UMR’s interpretation of medical necessity…in favor of something ‘better’… Rather, UMR is entitled to deference under an abuse-of-discretion standard in interpreting…plan language.” Thus, the court found that UMR’s denials were based on reasonable interpretations of the plans and accordingly granted summary judgment in its favor.
Disability Benefit Claims
Haddad v. SMG Long Term Disability Plan, No. 21-16175, __ F. App’x __, 2023 WL 1879464 (9th Cir. Feb. 10, 2023) (Before Circuit Judges McKeown, Bybee, and Bumatay). Plaintiff-appellant Fadi Haddad is disabled and receiving long-term disability benefits from an ERISA disability plan insured by Hartford Life and Accident Insurance Company. Although Hartford approved Mr. Haddad’s claim for disability benefits, it has offset his benefit amount by the amount he received in an earlier personal injury settlement from Hilton Hotels. Hartford relied on the terms of the policy which allows disability benefits payments to be offset by “any payments that are made to You… pursuant to any… portion of a settlement of judgment, minus associated costs, of a lawsuit that represents or compensates for Your loss of earnings.” Mr. Haddad sued Hartford under ERISA, challenging its use of this offset. The district court entered judgment in favor of Hartford and Mr. Haddad appealed. In this decision, the Ninth Circuit affirmed. To begin, the court of appeals held that its ruling in Saltarelli v. Bob Baker Group Medical Trust, 35 F.3d 382 (9th Cir. 1994), which holds that coverage exclusions and limitations be “clear, plain, and conspicuous,” was inapplicable to this matter pertaining to offsets. The difference between limitations/exclusions and offsets, the circuit court wrote, is that while limitations and exclusions “carve out areas from the scope of an insurance policy’s coverage,” offsets instead “reduce the total amount owed for covered claims.” Offsets then, the court held, are not subject to the same requirements that exclusions and limitations are under Saltarelli. Therefore, the Ninth Circuit stated that it was not improper for the explanation of offsets to be hidden within the terms of the policy. The Ninth Circuit went on to say that this was especially true here because the terms of the policy governing offsets “is unambiguous.” Next, the court of appeals explained why it disagreed with Mr. Haddad’s argument that the settlement could not be offset from his disability benefit because it was unrelated to his current disability. Again, relying on the policy terms, the Ninth Circuit said this was not a problem because the “Plan does not limit offsets to settlements for ‘related’ injuries.” Regarding Hartford’s apportionment of the entire non-cost portion of the settlement as lost wages, the appeals court stated that the onus was on Mr. Haddad to explain the amount of the settlement attributable to the lost wages and his failure to do so, again under the policy’s language, allowed Hartford to “assume the entire sum to be for loss of income.” Finally, the court held that Hartford had provided the policy terms in full to Mr. Haddad, as it issued Mr. Haddad’s employer with certificates of insurance which explained the offset provisions, which the Ninth Circuit said was “enough to show the terms of the LTD Plan.” Thus, the lower court’s judgment was affirmed.
Allen v. First Unum Life Ins. Co., No. 2:18-cv-69-JES-KCD, 2023 WL 1781509 (M.D. Fla. Feb. 6, 2023) (Judge John E. Steele). Plaintiff Dr. Marcus Allen sued First Unum Life Insurance Company, Provident Life and Casualty Insurance Company, and Unum Group after the long-term disability benefits he was receiving pursuant to both individual policies and a group disability insurance policy were terminated. Dr. Allen argued in this complaint that his vision issues were disabling to his career as a diagnostic radiologist, and that he was therefore unable to practice in his field of medicine. Because Dr. Allen was covered under both individual and group policies, he asserted claims under both state law and ERISA. Dr. Allen’s breach of contract claim was tried before a jury last March. The jury returned a verdict finding in favor of the insurance companies, agreeing with them that a preponderance of the medical evidence supported their conclusion that Dr. Allen was no longer totally disabled within the meaning of the four individual policies. In this second portion of the case pertaining to Dr. Allen’s ERISA claim, the Unum defendants moved for summary judgment based on issue preclusion. Unum found success for a second time in this lawsuit, as its motion was granted by the court in this order. The court determined that the specific issued decided by the jury – “whether Dr. Allen was disabled because he was unable to perform the substantial and material duties of his own occupation as a diagnostic radiologist as of the date his disability benefits were terminated” – was a substantially identical issue to the one at stake here. Thus, the court stated that the jury’s verdict establishing that Dr. Allen was not totally disabled from performing the duties of his occupation precluded his ERISA claims on the same topic. In sum, the court agreed with the insurance providers’ assertion that the jury’s determination would be “necessarily, irreconcilably, and impermissibly” contradicted by the court if it were to conclude during the ERISA portion of the litigation that Dr. Allen was incapable of working in any gainful occupation for which he was qualified. Accordingly, the court held that Dr. Allen’s ERISA disability case was barred by issue preclusion, as the issue of whether Dr. Allen was totally disabled was actually litigated and determined during the jury trial, and that it could not “decide the issue anew.”
McKee Foods Corp. v. State, No. 1:21-cv-279, 2023 WL 1768321 (E.D. Tenn. Feb. 3, 2023) (Judge Charles E. Atchley Jr.). A fiduciary and sponsor of an ERISA-governed self-funded health plan, McKee Foods, brought this lawsuit against an out-of-network pharmacy, defendant Thrifty Med, and the State of Tennessee seeking a declaration from the court that a Tennessee law addressing prescription drug programs is preempted by ERISA and that the legislation itself does not require McKee Foods to include Thrifty Med in its network of pharmacies. Additionally, McKee Foods requested that the court issue an order enjoining Thrifty Med from pursuing legal action attempting to require McKee Foods to include it in the pharmacy network. While the case was ongoing, the Governor of Tennessee signed into law new legislation that amended Tennessee’s Any Willing Pharmacy and Anti-Steering statutes, specifically expanding them to include ERISA-governed plans, including self-insured ones like McKee’s. The new legislation further creates “a new structural scheme for preferred and nonpreferred pharmacy networks.” Following the enactment of the new amendments to the Tennessee pharmacy legislation, the State of Tennessee moved to dismiss McKee’s lawsuit for lack of jurisdiction. The court held oral argument on the topic last November, and in this order granted the motion to dismiss, agreeing that it lacks subject matter jurisdiction over the action. The court agreed with the state that the passage and ratification of the updated legislation “effectively [nullified] the actual controversy that supported the origination of this case.” Accordingly, the court concluded that the alleged harm McKee faced when it brought suit has now been removed.
Life Insurance & AD&D Benefit Claims
Staropoli v. Metro. Life Ins. Co., No. 21-2500, __ F. App’x __, 2023 WL 1793884 (3d Cir. Feb. 7, 2023) (Before Circuit Judges Jordan, Scirica, and Rendell). Appellant Susan Staropoli, an executive of JPMorgan Chase, elected life insurance for her then-husband Charles Staropoli as part of her employee benefits package, with their children as the beneficiaries. Later, when the Staropolis divorced, Mr. Staropoli became ineligible for coverage under the language of the plan, which allowed for coverage only of spouses, not ex-spouses. Ms. Staropoli, unaware of this fact, reenrolled Mr. Staropoli in the policy after the divorce and increased the coverage amount by $250,000. She then went on to pay more than $2,000 in premiums for the coverage. Mr. Staropoli died a few years later, after which Ms. Staropoli submitted a claim for benefits to MetLife. Her claim was denied thanks to the language disallowing ex-spouses for coverage. Following an unsuccessful administrative appeal, Ms. Staropoli commenced legal action suing MetLife and JPMorgan Chase for benefits and breaches of fiduciary duties under ERISA. Ms. Staropoli focused on the plan’s incontestability clause and argued that MetLife could not deny her coverage as it had been accepting her premiums on the upgraded coverage for more than twos years. Ms. Staropoli’s lawsuit was dismissed at the pleading stage for failure to state a claim. The district court held that the benefits executive of the plan, not JPMorgan, was responsible for plan administration and thus JPMorgan was an improper defendant. It also dismissed Ms. Staropoli’s Section 502(a)(1)(B) claim for benefits as the unambiguous plan language made Mr. Staropoli ineligible for coverage, and under deferential review MetLife’s interpretation of that language was reasonable. Finally, the district court decided that Ms. Staropoli had failed to state a claim for breach of fiduciary duties against MetLife, holding that Ms. Staropoli’s reliance on defendants’ representations, which included accepting premiums and listing Mr. Staropoli as a covered dependent on statements, was not reasonable. Because defendants sent Ms. Staropoli official disclosures informing her that ex-spouses were not eligible as dependents and because Ms. Staropoli certified that she was responsible for understanding and following the policy’s rules, the court concluded that she could not state a viable claim for a breach of a fiduciary duty. Following the dismissal, Ms. Staropoli filed a second amended complaint, asserting a new breach of fiduciary duty claim against the benefits executive. The new breach of fiduciary duty claim would also be unsuccessful. The district court granted summary judgment to the new defendants, concluding that they had not breached any duty “either through omission or misrepresentation.” Ms. Staropoli then appealed. “Finding no error” in the district court’s rejection of Ms. Staropoli’s claims, the Third Circuit affirmed. The court of appeals agreed with the lower court that Ms. Staropoli did not have a viable claim for benefits given the clear language of the policy which did not permit the elected coverage following the divorce. Furthermore, the circuit court rejected Ms. Staropoli’s arguments that a breach of fiduciary duty could occur through omissions. It also held that it was not reasonable for Ms. Staropoli to be misled into inaccurately believing the coverage on her ex-husband was viable regardless of defendants’ actions. Lastly, the Third Circuit stated that because Ms. Staropoli’s underlying ERISA violations were not viable, her claim for equitable estoppel was also appropriately dismissed.
Hartford Life & Accident Ins. Co. v. Kowalski, No. 21-cv-06469-RS, 2023 WL 1769261 (N.D. Cal. Feb. 3, 2023) (Judge Richard Seeborg). Hartford Life and Accident Insurance Company brought this interpleader action to determine the proper beneficiary of an ERISA-governed life insurance policy after two individuals submitted claims for benefits. Those two individuals, defendants Haili Kowalski and Marilyne Valois, each filed cross-claims against the other. Ms. Valois believes she is the proper beneficiary of decedent Marc Kowalski’s policy, while Ms. Kowalski believes her minor son is entitled to the proceeds. Ms. Valois is the named beneficiary of the plan. Ms. Kowalski, however, is Mr. Kowalski’s ex-wife, and she asserts that the terms of their divorce decree, which she claims is a Qualified Domestic Relations Order (“QDRO”), required Mr. Kowalski to maintain a life insurance policy with the couple’s minor son as the sole beneficiary. Thus, Ms. Kowalski submitted a claim for benefits on behalf of the son. In the alternative, Ms. Kowalski additionally argued that Ms. Valois exerted undue influence over Mr. Kowalski and that she was improperly named the beneficiary. In addition to her claim seeking declaratory judgment in her favor, Ms. Kowalski also brought a cross-claim for relief for conversion. Ms. Valois’s cross-claim seeks judgment that she is entitled to the life insurance benefits as the named beneficiary, along with judgment finding the divorce decree to not be a QDRO. Ms. Valois moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss Ms. Kowalski’s cross-claims. Ms. Valois provided three grounds for dismissal; (1) the divorce decree is not a QDRO; the alternative theory of undue influence was insufficiently pled; and (3) the conversion claim is preempted by ERISA. In addition to moving for dismissal, Ms. Valois also moved to strike portions of Ms. Kowalski’s cross-claims, which she alleged were an attack on her character. The motion to dismiss was granted in part, and the motion to strike was denied. First, the court stated that resolution of whether the decree is a QDRO is not properly addressed at the pleading stage nor a ground for dismissal. Although the court would not decide the issue, it nevertheless stressed that “it appears likely the [legal separation agreement] is a QDRO, and Kowalski has thus stated a claim upon which relief can be granted.” However, the court agreed with Ms. Valois that Ms. Kowalski failed to state a claim for her alternative assertion that Ms. Valois exerted undue influence over Mr. Kowalski. Not only did the court find the claim speculative, but it also held that the claim failed “to identify the manner in which Valois allegedly exerted undue influence,” or include information upon which to infer that Mr. Kowalski was susceptible to any undue influence when he made the designation naming Ms. Valois. Accordingly, the motion to dismiss the alternative claim of undue influence was granted. Lastly, the court addressed whether the claim for conversion was preempted by ERISA. Given the expansive reach of ERISA’s preemption, as well as Ms. Kowalski’s failure to “justify why this general prohibition should not apply,” the court agreed with Ms. Valois that Ms. Kowalski had failed to state a claim for conversion and so granted the motion to dismiss it. Finally, insofar as the motion to dismiss was granted, dismissal was without prejudice.
Medical Benefit Claims
Henkel of Am., Inc. v. ReliaStar Life Ins. Co., No. 3:18-cv-965 (JAM), 2023 WL 1801923 (D. Conn. Feb. 7, 2023) (Judge Jeffrey Alker Meyer). A chemical manufacturer, plaintiff Henkel of America, provides a self-funded healthcare plan for its employees. To help protect its self-insured plan from huge losses, Henkel has stop-loss insurance provided by defendant ReliaStar Life Insurance Company. And helping to run the plan is a pharmacy benefits manager, defendant Express Scripts Inc., whose job it is to process employees’ prescription drug claims. This suit arises from two of the plan participants’ use of “ultra-expensive prescription drugs.” Henkel sued ReliaStar and Express Scripts, arguing that Express Scripts wrongly approved the costly prescriptions, and ReliaStar improperly refused to pay for the $50 million they cost. Against ReliaStar, Henkel asserted state law claims of breach of insurance contract, violations of a Connecticut insurance law, and a claim for violation of the Connecticut Unfair Trade Practices Act. As for Express Scripts, Henkel asserted claims of breach of contract and breach of fiduciary duty under ERISA. All three parties moved for summary judgment. In this order the court denied Express Scripts’ motion and granted in part and denied in part both ReliaStar’s and Henkel’s respective motions. Beginning with Express Scripts’ summary judgment motion, the court held that genuine issues of material fact about whether Express Scripts was right to approve the costly medications existed which preclude granting summary judgment at this juncture, especially as a reasonable factfinder could find that Express Scripts was wrong to go ahead and approve the cost of the drugs. The court then moved on to addressing Henkel’s summary judgment motion wherein it sought judgment that Express Scripts is a fiduciary of the healthcare plan, and judgment about the standard of review governing Express Scripts’ decisions. On the first point, the court articulated that “with one uncontested exception,” a factfinder could determine that Express Scripts ‘duties were purely ministerial and that it was accordingly not a fiduciary under ERISA. The one exception had to do with the only adverse benefits determination that Express Scripts made for one of the medications. In this instance, the court stated that Express Scripts was undoubtedly a fiduciary exercising discretionary authority. Thus, regarding the one medication that Express Scripts rejected coverage of initially prior to approving, the court held that it was a fiduciary. For the other five medications, Express Scripts’ fiduciary status remained undetermined as a matter of law. The court then evaluated the appropriate review standard. Here the court agreed with Henkel that deferential review applies given the plan’s discretionary clause. Thus, the court stated that the jury or factfinder should review the approval of the drugs under arbitrary and capricious review, meaning so “long as Henkel did not abuse its discretion in approving the drugs, then ReliaStar must pay, even if approval was not the absolute best decision.” Finally, ReliaStar’s summary judgment motion was granted in part to the extent that it challenged some of Henkel’s claims as redundant. However, in most other respects, its motion was denied, as once again the court concluded there were genuine disputes of material fact appropriate for resolution following a trial.
Pension Benefit Claims
Munger v. Intel Corp., No. 3:22-cv-00263-HZ, 2023 WL 1796430 (D. Or. Feb. 6, 2023) (Judge Marco A. Hernandez). In November 2021, defendant Tracy Lampron Cloud was convicted of second-degree murder in connection with the death of her husband Philip Cloud. The judge in that case sentenced Ms. Cloud to life in prison. Following Ms. Cloud’s conviction and sentencing, plaintiff Ruth Ann Munger filed this ERISA action, individually and in her capacity as representative of the Estate of Philip Cloud, seeking payments of Mr. Cloud’s retirement and pension plan benefits as his secondary beneficiary on the basis that Ms. Cloud is Mr. Cloud’s “slayer” under Oregon’s slayer statue and therefore not entitled to any benefits despite being the named primary beneficiary. Ms. Cloud for her part maintains that she was wrongfully convicted of murdering her husband, and therefore opposes payment of the retirement funds to Mr. Cloud’s estate. Ms. Cloud, who is appealing the judgment in the criminal case, has moved to dismiss this lawsuit, or in the alternative to put it in abeyance. Her motion was granted in this order to the extent that the court stayed the matter, pending resolution of Ms. Cloud’s appeal of her criminal conviction. The court expressed that it has the authority and discretion to permit a stay of this federal case pending resolution of the state case, as ERISA claims for benefits are not under exclusion federal jurisdiction and therefore not barred by the Ninth Circuit’s Colorado River doctrine. Furthermore, the court concluded that a stay was warranted, as “the desirability of avoiding piecemeal litigation is particularly relevant here because a decision by this Court regarding entitlement to the Plan benefits would, as a matter of law, require a determination whether Cloud is a slayer under federal common law. The resolution of that determination would require the Court to evaluate whether Cloud feloniously and intentionally killed Philip Cloud.” For these reasons, the court felt a stay was appropriate.
Kotok v. A360 Media, LLC, No. 22-4159 (SDW) (JRA), 2023 WL 1860595 (D.N.J. Feb. 9, 2023) (Judge Susan D. Wigenton). In February 2022, A360 Media, LLC acquired Bauer Media Group USA, LLC. Shortly after the acquisition, plaintiff Steven Kotok, the CEO and president of Bauer Media, was informed by A360’s president “that his employment would be terminated without cause effective March 31, 2022.” Shortly before the termination was set to go into effect, A360 gave Mr. Kotok a proposed separation agreement. This proposed agreement did not include the severance benefits that were included in the employee agreement Mr. Kotok signed when he was hired by Bauer Media Group. Accordingly, Mr. Kotok found A360’s proposed severance benefits package to be a material breach of his employment agreement, and so notified A360 in writing that he was terminating his employment per the terms of his employment agreement for breach of obligations of the terms of the agreement. Mr. Kotok’s last day of employment was March 31, 2022, the date named by A360. Defendants, A360 and Bauer Media, have not paid Mr. Kotok the severance benefits outlined in the employment agreement. On May 18, 2022, Mr. Kotok took legal action, suing defendants in state court in New Jersey asserting state law claims of breach of contract and violation of New Jersey’s wage act. Defendants removed the suit to federal court based on federal question jurisdiction and diversity jurisdiction. Defendants subsequently moved to dismiss. The companies argued that Mr. Kotok’s state law claims are preempted by ERISA, as provisions outlining the severance benefits in the employment agreement constitute an employee benefit plan under ERISA. The court agreed. “The Agreement states that the employing ‘Company,’ A360, agreed to pay Plaintiff, as the intended beneficiary ‘Employee,’ specific benefits upon his termination, and outlined the timeline and procedures for providing those benefits. Thus, it falls within the broad definition of an ERISA employee benefit plan.” The court emphasized that “the payment of severance benefits was not triggered automatically – the plan required A360 to determine whether Plaintiff is entitled to them by assessing the circumstances of his termination and whether he meets all of the criteria for eligibility detailed in the plan.” Given these facts, the court concluded that the employment agreement was an ERISA plan, and that Mr. Kotok’s state law claims, which naturally relate to and rely upon the terms of the agreement, are expressly preempted by ERISA. The court also held that Mr. Kotok’s breach of contract claim seeking payment of severance benefits was preempted because he could have brought the claim as a claim for benefits under Section 502(a)(1)(B). Having established the claims were preempted by ERISA, the court granted the motion to dismiss under Rule 12(b)(6). Nevertheless, the court permitted Mr. Kotok to replead his complaint to assert new causes of action under ERISA.
Pleading Issues & Procedure
Liberty Wellness Chiropractic v. Empire HealthChoice HMO Inc., No. 21 civ. 2132 (CM), 2023 WL 1927828 (S.D.N.Y. Feb. 10, 2023) (Judge Colleen McMahon). A chiropractic practice, plaintiff Liberty Wellness Chiropractic, brought this suit against Empire HealthChoice HMO, Inc. for improperly denying and in some instances improperly underpaying claims for covered services provided to plan participants, which it alleges caused total monetary damage of more than $1 million. The provider asserted claims under ERISA and state law, including tortious interference, breach of contract, and unjust enrichment. Empire moved to dismiss, challenging the sufficiency of plaintiff’s claims. The court converted Empire’s motion into one for summary judgment. It stated that it could not analyze a submitted claims chart Empire included in its motion, which “presents substantial factual information about the 1842 claims listed in Plaintiff’s claims list that is highly relevant to whether this case can go forward,” without converting the motion to dismiss into one for summary judgment. However, before ruling on summary judgment, the court granted Liberty Wellness 120 days to conduct discovery into the governing healthcare plans, including whether any of the plans include anti-assignment provisions that would affect its standing or whether they contain time limitations making the lawsuit untimely. It further instructed plaintiffs to scrutinize the contents of the aforementioned claims chart, so that it could have the “opportunity to oppose the motion for summary judgment by identifying, on a claim by claim basis, whether it contests Defendants’ assertion that any particular claim should be dismissed from this action.” Finally, the court directed plaintiff to conduct discovery on the topic of exhaustion. The decision also took the opportunity to clarify that plaintiff’s state law claims, insofar as they relate to ERISA-governed plans, are preempted by ERISA. After the discovery window is closed, the court stated that it would then consider the merits of each of the party’s positions.
Diagnostic Affiliates of Northeast Houston v. Aetna, No. 2:22-CV-00127, 2023 WL 1772197 (S.D. Tex. Feb. 1, 2023) (Judge Nelva Gonzales Ramos). Plaintiff Diagnostic Affiliates of Northeast Houston, LLC, sued a group of Aetna health insurance defendants, along with employer-sponsored healthcare plans administered by the Aetna defendants, for failure to reimburse charges for COVID-19 diagnostic tests the lab provided to insured patients throughout the pandemic. Diagnostic Affiliates brought claims under the CARES Act and the Families First Coronavirus Response Act, as well as asserting several related state law claims. According to the decision, the provider did not assert claims under ERISA. Defendants moved to dismiss both for lack of personal jurisdiction and for failure to state claims. Regarding jurisdiction, the court granted the motion in part and denied in part. It held that Diagnostic Affiliates met its burden of demonstrating general personal jurisdiction over defendants Aetna Better Health of Texas, Inc., Aetna Health Inc., and First Health Life & Health Insurance Company. However, six other Aetna entities were dismissed from the case, as were all of the employer plans, as the court concluded the provider had not satisfied pleading requirements to support personal jurisdiction of these defendants. Specifically, the court ruled that plaintiff could not use ERISA as a “tacitly-acknowledged national minimum contacts test” for the purposes of determining personal jurisdiction. The court then segued to analyzing whether the lab sufficiently stated its claims. Drawing the same conclusion as many other district courts, the court began by finding that the Families First Coronavirus Response Act and the CARES Act do not include an implied private right of action to sue to enforce their terms. Thus, Diagnostic Affiliates’ federal causes of action were dismissed by the court. Left with only the state law causes of action, the court declined to exercise supplemental jurisdiction over them, which it felt was appropriate given the early stage of the case. Accordingly, the case was dismissed without prejudice.
Saloojas, Inc. v. CIGNA Healthcare of Cal., No. 22-cv-03270-CRB, 2023 WL 1768117 (N.D. Cal. Feb. 3, 2023) (Judge Charles R. Breyer). The standoff between health insurance companies and healthcare providers of COVID-19 diagnostic testing services continues. This action was brought by one such provider, plaintiff Saloojas, Inc., against CIGNA Healthcare of California. In it, Saloojas alleges that Cigna failed to comply with the CARES Act and California’s state COVID emergency bill, SB 510, by intentionally disregarding their reimbursement requirements and provisions entitling providers of COVID tests full reimbursement. Saloojas asserted claims under ERISA, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the CARES Act, and California’s Unfair Competition Law. On October 6, 2022, the court granted CIGNA’s motion to dismiss Saloojas’ complaint. (Your ERISA Watch covered that decision in its October 12, 2022 edition.) There, the court held that the CARES Act does not provide a private right of action for healthcare providers. It also determined that Saloojas could not sue under ERISA for benefits as it did not have assignments of benefits and thus lacked standing. Finally, the court concluded that the provider did not meet the heighted pleading requirements for its allegations of fraud and racketeering. Following dismissal, Saloojas amended its complaint, renewing its previous ERISA, RICO, and California Unfair Competition claims and adding an additional claim of insurance bad faith and fraud. Once again, CIGNA moved to dismiss. CIGNA’s motion to dismiss was granted for a second time in this order, this time without leave to amend. The court reiterated its previous findings, holding that none of the deficiencies it outlined in Saloojas’ original complaint were sufficiently rectified in the amended complaint. Additionally, Saloojas’ new bad faith claim was also dismissed, as adding it impermissibly exceeded the scope of the leave to amend. However, the court stated that even if the bad faith claim had not exceeded the scope of leave to amend, it would also have been dismissed for failure to state a claim. Thus, once again, the entirety of Saloojas’ action seeking reimbursement of government-mandated COVID tests it provided was dismissed.
Hrdlicka v. General Motors, LLC, No. 22-1328, __ F. 4th __, 2023 WL 1794255 (6th Cir. Feb. 7, 2023) (Before Circuit Judges Siler, Gilman, and Nalbandian). Last March, a district court in the Eastern District of Michigan granted summary judgment in favor of defendant General Motors in this wrongful termination and retaliation lawsuit brought by former employee plaintiff Haley Hrdlicka. (You can read a summary of that decision in Your ERISA Watch’s April 6, 2022 issue.) Ms. Hrdlicka appealed. In this decision, the Sixth Circuit affirmed the judgment of the district court under de novo review, agreeing that General Motors fired Ms. Hrdlicka for the non-discriminatory reason of excessive absenteeism. The Sixth Circuit pointed to the fact “that Hrdlicka was never diagnosed with any medical condition until after her termination…and she never sought medical help for any symptoms or conditions from which she was suffering while employed” as support that Ms. Hrdlicka was not discriminated against due to any disability. The medical condition at issue was a brain tumor which was diagnosed and surgically removed immediately following Ms. Hrdlicka’s firing, and it was her assertion that the effects of the tumor were the cause of her tardiness and declining job performance at the end of her time working for General Motors. Ms. Hrdlicka maintained that she had been complaining to people at work that she was experiencing symptoms of depression and feeling generally unwell. These arguments were ultimately unpersuasive on appeal. The Sixth Circuit did not agree with Ms. Hrdlicka that General Motors was sufficiently on notice that Ms. Hrdlicka was suffering from a disability. Specifically, in relation to Ms. Hrdlicka’s ERISA Section 510 retaliation claim, the court of appeals again focused on the fact that Ms. Hrdlicka’s diagnosis was post-termination and therefore was not a motivating fact for General Motors at the time it made its decision to terminate her employment. The Sixth Circuit concluded, “Hrdlicka’s post-termination diagnoses of serious health conditions are indeed unfortunate, but, for the reasons discussed above, they do not create a genuine dispute of material fact that would justify denying General Motors’s motion for summary judgment. We therefore affirm the judgment of the district court.”
McWilliams v. Geisinger Health Plan, No. 4:20-CV-01236, 2023 WL 1819164 (M.D. Pa. Feb. 8, 2023) (Judge Matthew W. Brann). Plaintiff Kaylee McWilliams sued her health insurance plan, the Geisinger Health Plan, and its subrogation agent, Socrates, Inc., demanding defendants return the money she paid to them under protest after they put a lien on a personal injury recovery she received in their effort to enforce the plan’s Group Subscription Certificate and its subrogation clause. Defendants previously moved to dismiss Ms. McWilliams’ ERISA action. On November 16, 2022, the court converted that motion to one for summary judgment and granted it, “dismissing all claims except McWilliams’ demand for monetary damages contain in Count VII.” Defendants subsequently moved for summary judgment on the final remaining cause of action. Their motion was granted by the court in this order. The court rejected Ms. McWilliams’ argument that it had previously erred by not applying the common-fund doctrine. Ms. McWilliams stated the common-fund doctrine applies differently to cases involving liens rather than class actions. “The Court disagrees with her distinction on how the common-fund doctrine applies in the class-action context as opposed to the lien context. The doctrine is a way to compensate attorneys for recovering money for third parties who did not financially contribute to the attorneys’ efforts to litigate the case. That can be accomplished through awarding fees from a class recovery or by reducing a lien on a plaintiff’s recovery in favor of a third party who did not financially contribute to obtaining the recovery.” Ms. McWilliams’ second argument fared no better. There she argued that defendants violated ERISA by failing to identify the J.M. Smucker Master Health Plan, rather than the Group Subscription Certificate, as the basis of their reimbursement demand. She argued that the Certificate’s terms expressly state that they control in this matter and that defendants therefore violated ERISA by failing to cite the health plan as the legal basis for their reimbursement arguments. The court reiterated that it had previously addressed and rejected these arguments in its opinion last November. Nevertheless, it rejected them again here, stating that there is no inconsistency between the Certificate and the Master Health Plan. “When a party’s rights are expressed in multiple documents – as is the case here – there is no inconsistency when one document grants a party more rights than the other. Indeed, such a conclusion would be a novel definition of the term ‘inconsistency.’” Moreover, the court held that defendants did not violate ERISA Section 503(1) by not identifying the plan provision upon which they relied because this was not a case of an adverse benefit determination. “Having addressed all of McWilliams’ arguments,” the court granted defendants’ summary judgment motion on Ms. McWilliams’ final remaining claim.