No case of the week but we certainly have April showers if not a deluge of ERISA decisions.
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
K.D. v. Harvard Pilgrim Health Care, Inc., No. 20-11964-DPW, 2023 WL 2647103 (D. Mass. Mar. 27, 2023) (Judge Douglas P. Woodlock). Plaintiff K.D. filed suit to challenge defendant Harvard Pilgrim Health Care Inc.’s denial of her claim for out-of-network healthcare benefits. On December 12, 2022, the court remanded plaintiff’s claim and determined that she was eligible for an award of attorneys’ fees under ERISA Section 502(g)(1). K.D. has since submitted her motion for fees and costs. In this order the court assessed K.D.’s fee award. As an initial matter, the court determined that plaintiff was not only eligible for, but also entitled to an award of fees given her success on the merits. The court also concluded that under First Circuit precedent a successful ERISA litigant may receive a fee award even before a decision on remand has been reached, as awarding fees even while litigation is still in progress encourages “better access to skilled counsel for ERISA claimants.” The court then proceeded to evaluate K.D.’s lodestar. K.D. requested $81,047.00 in attorneys’ fees and $400.00 in costs, for 167.70 hours of work performed by K.D.’s counsel at Rosenfeld & Rafik, P.C. at hourly rates of $600 for attorney Ms. Rafik, who has 25 years of experience, $350 for attorney Ms. Burns, who has 12 years of experience, and $135 for paralegal Ms. MacKenzie. The court addressed the billed hours first and found them reasonable, well documented, and spent solely on the successful aspects of the litigation. Accordingly, the court did not reduce the fee award based on the billed hours. The court also found counsel Rafik’s hourly rate appropriate given that she is an experienced ERISA practitioner. However, the court slightly reduced the hourly rates of Ms. Burns and Ms. MacKenzie to $300 and $110 per hour respectively, which it felt were more in line with the market rates. Finally, the court declined to adjust the award beyond the lodestar calculation. The court wrote, “K.D.’s result… must be viewed within the context of ERISA benefits litigation, where ‘a remand for a second look at the merits of her benefits application is often the best outcome that a claimant can reasonably hope to achieve from the courts.’” In light of this, the court awarded full fees to “incentive” attorneys from taking on ERISA clients, and to “deter” plan administrators from conducting their claims handling policies and practices in ways that violate ERISA’s protections and regulations but declined to award an additional amount. Thus, the court calculated its lodestar and awarded attorneys’ fees of $79,122.00. Finally, K.D. was granted her requested $400 in costs to cover her filing fee.
Breach of Fiduciary Duty
Miller v. Packaging Corp. of Am., No. 1:22-cv-271, 2023 WL 2705818 (W.D. Mich. Mar. 30, 2023) (Judge Hala Y. Jarbou). Plaintiff Harvey Miller brings this putative class action on behalf of a class of participants and beneficiaries of the Packaging Corporation of America, Inc. 401(k) Plan for breaches of fiduciary duties. Mr. Miller asserted that defendants breached their duties by failing to keep the plan’s costs and fees under control and by investing in retail share classes rather than available and cheaper institutional share classes of the same funds. Defendants moved for dismissal. Their motion was granted in part and denied in part. First, the court held that Mr. Miller had standing to assert his fee and fund claims, finding defendants’ standing arguments “not persuasive.” However, the court granted the motion to dismiss the fee based claims. It agreed with defendants that Mr. Miller had not made “apples to apples” comparisons of the fees charged to the plan for the services received. However, the court declined to dismiss the share class and fund claims, holding, “Miller has stated a plausible claim insofar as he alleges that Defendants failed to comply with their duty of prudence in connection with the selection and monitoring of investment options.” Accordingly, this portion of Mr. Miller’s complaint and its accompanying derivative claims for failure to monitor were allowed to proceed past the pleading stage.
Jones v. Dish Network Corp., No. 22-cv-00167-CMA-STV, 2023 WL 2644081 (D. Colo. Mar. 27, 2023) (Judge Christine M. Arguello). Former employees of DISH Network Corporation and participants of the DISH Network Corporation 401(k) Plan filed this putative class action to challenge the plan’s management by its administrators and fiduciaries. In their complaint, plaintiffs alleged that defendants violated their duties of loyalty, prudence, and monitoring by allowing the plan to charge unreasonable expenses and investing in a costly and poorly performing active suite of funds to the benefit of the plan administrator, Fidelity. The fiduciaries moved to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The court referred the motion to dismiss to Magistrate Judge Scott T. Varholak. Magistrate Varholak issued a report and recommendation finding in favor of dismissal. Specifically, Judge Varholak concluded that the named plaintiffs did not have Article III standing to challenge the funds that they did not personally invest in. Additionally, the Magistrate held that plaintiffs could not state their claims because they had not provided apt comparisons for the plan’s challenged fees or funds to demonstrate that a prudent and loyal fiduciary would have made different decisions than those the defendants made. Moreover, Magistrate Varholak stated that the complaint did not contain any factual allegations that the defendants had acted for purposes of benefitting themselves or Fidelity and that plaintiffs therefore could not state a claim for breach of the fiduciary duty of loyalty. Finally, because Judge Varholak recommended dismissal of the two underlying fiduciary breach claims, he also recommended the court dismiss the derivative claims for failure to monitor fiduciaries, co-fiduciary liability, and knowing participation in a breach of trust. Plaintiffs timely objected to Judge Varholak’s report and recommendation. They argued that the Magistrate conflated Rule 23 class certification requirements with Article III standing requirements with regard to the investment options they did not personally invest in. In addition, plaintiffs objected that Magistrate Varholak’s approach to analyzing their complaint, complaining that the Magistrate improperly “parsed” their allegations piece by piece “to determine whether each allegation, in isolation, is probable.” More generally, plaintiffs argued that Magistrate Varholak resolved factual disputes at the pleading stage and drew inferences against them to conclude that defendants had not breached any fiduciary duty. In this decision, the district court judge reviewed Magistrate Varholak’s report de novo and overruled plaintiffs’ objections. The court agreed with the Magistrate’s logic and reasoning, and likewise applied Circuit precedent to understand that plaintiffs could not state their claims as currently pled. Accordingly, the court adopted the report and dismissed plaintiffs’ complaint without prejudice, with leave to amend to address the deficiencies outlined in both the Magistrate’s report and in this decision.
Stengl v. L3Harris Techs., No. 6:22-cv-572-PGB-LHP, 2023 WL 2633333 (M.D. Fla. Mar. 2, 2023) (Judge Paul G. Byron). Current and former employees of defense and aerospace contractor, L3Harris Technologies, Inc., filed this putative class action alleging breaches of fiduciary duties with respect to the company’s retirement savings benefit plan. L3’s defined contribution 401(k) plan has over $13.5 billion in assets and as many as 76,240 participants, making it a one of only around 100 plans of its size in the country. Plaintiffs allege that contrary to the plan’s investment policy statement requiring the selection and retention of funds and third-party service providers with reasonable fees, the plan’s fiduciaries acted in ways which resulted in unnecessarily high fees and expense ratios, thereby wasting the assets of the plan. Plaintiffs also alleged that several of the plan’s funds had lower cost institutional share classes available which the plan failed to take advantage of despite its size. Additionally, plaintiffs argued that the fiduciaries should have monitored the performance of the funds in the plan and replaced them with less costly and better performing versions through the use of “Modern Portfolio Theory.” Along these same lines, plaintiffs alleged defendants failed to sufficiently diversify the investment portfolio, “which created unnecessary additional concentration of risk of Plan participants.” Finally, plaintiffs maintained “that Defendants consistently favored actively managed funds when passive funds outperformed them by a significant margin.” In short, plaintiffs argued that the action of the fiduciaries ensured that the plan participants paid more but got less in their retirement accounts. Defendants moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). They argued that plaintiffs could not state their claims because their actions fell within the range of reasonable decisions that a fiduciary may make while overseeing the administration of a plan. The court did not agree. It concluded that the totality of plaintiffs’ allegations told a story which could give rise to an inference of fiduciary breaches of imprudence and failure to monitor. The court therefore held that plaintiffs stated claims which were plausible on their face. The court declined to slice plaintiffs’ allegations into many pieces and analyze each one against the fiduciaries’ defenses. “While the Court doubts that some of the individual allegations here by themselves are enough to state a claim, in sum total the Court finds it plausible that the Defendant Investment Committee’s process was flawed.” Accordingly, thanks to the court’s wholistic approach, this breach of fiduciary duty class action will proceed past the pleading stage.
Davis v. Magna Int’l of Am., No. 20-11060, 2023 WL 2646256 (E.D. Mich. Mar. 27, 2023) (Judge Nancy G. Edmunds). Two named plaintiffs, Melvin Davis and Dakota King, moved for class certification for their breach of fiduciary duty action involving the management and administration of the Magna Group Companies Retirement Savings 401(k) Plan. Defendants opposed certification. In particular, they argued that the two named plaintiffs were not adequate class representatives under Rule 23(a), as both Davis and King have had previous legal troubles, including, in the case of Mr. Davis, a conviction for conspiracy to commit wire fraud. In addition, defendants argued that neither of the named plaintiffs were sufficiently familiar with the class action or its allegations. As evidence of this, defendants pointed to deposition testimony where Mr. Davis admitted he didn’t know “whether he alleges that investment options were ‘imprudent’ and whether he is challenging record keeping fees.” In the end, the court agreed with defendants that neither Mr. Davis nor Mr. King were fit to “prosecute the action vigorously on behalf of the other class members.” While the court agreed with plaintiffs that ERISA fiduciary breach class actions are very complex in nature and it is unreasonable to expect named plaintiffs to have “extensive knowledge of the facts of the case in order to be an adequate representative,” the court held that there was “no case cited by Plaintiffs in which class representatives seemed less familiar with the claims or less prepared.” Accordingly, the court denied the motion to certify the class. Denial, however, was without prejudice and plaintiffs were granted 30 days to be allowed to name new plaintiffs. And beyond the court’s identified concerns about these two named representatives and their inability to represent the class, the remainder of the decision was far friendlier to the plaintiffs. The court was satisfied that the class met Rule 23(a)’s numerosity, commonality, and typicality requirements and that class counsel satisfied the requirements of Rule 23(g). However, because the court denied certification under Rule 23(a), it did not reach the issue of whether plaintiffs satisfied the criteria for certification under either Rule 23(b)(1)(B) or (b)(1)(A).
Disability Benefit Claims
O’Connell v. Hartford Life & Accident Ins. Co., No. 21-CV-10587-AK, 2023 WL 2633789 (D. Mass. Mar. 24, 2023) (Judge Angel Kelley). Plaintiff Diane O’Connell worked as in-house counsel for the accounting firm PricewaterhouseCoopers, LLC for ten years. Then, in December 2018, Ms. O’Connell stopped working and applied for short-term disability benefits as a result of a mental illness, generalized anxiety disorder. Hartford granted Ms. O’Connell’s benefit claim for both short-term and then for long-term disability benefits. However, on December 12, 2019, Hartford terminated Ms. O’Connell’s long-term disability benefits after its reviewing psychiatrist concluded that the “weight of the medical evidence in O’Connell’s claim file does not support psychiatric functional impairment… due to mental illness for the current timeframe.” Ms. O’Connell internally appealed Hartford’s decision, which ended with Hartford affirming its denial. Ms. O’Connell subsequently commenced this lawsuit. Parties have now cross-moved for judgment on the administrative record. In this decision the court denied both plaintiff’s and defendant’s motions under arbitrary and capricious review standard and remanded to Hartford for further proceedings. The court held that Hartford’s reviewing doctors did not meaningfully engage with the medical record or the opinions of Ms. O’Connell’s treating physicians and that they therefore provided insufficient explanations about why they ultimately disagreed with the medical evidence in the record. Thus, the court held that Hartford failed to satisfy ERISA’s requirement of explaining why it dismissed the opinions of the treating doctors and why it instead credited the opinions of its medical reviewers. The court expressed that “[u]pon a close examination, it appears (Hartford’s medical reviewer’s) engagement with (the submissions of the treating doctors) was somewhat superficial.” The court also found Hartford’s focus on a lack of objective evidence to be inappropriate, given that there was objective evidence in the record which supported a finding of disability and because Ms. O’Connell’s mental health conditions cannot fundamentally be assessed without evaluating subjective complaints. Finally, the court found that Hartford failed to evaluate Ms. O’Connell’s limitations and to weigh those limitations against the demands of her profession, writing that “Hartford’s initial termination letter make no mention of O’Connell’s occupational duties.” Thus, the court found Hartford’s failures rendered its termination of Ms. O’Connell’s benefits “unreasonable.” Nevertheless, the court declined to award benefits. It stated that although it found Hartford had abused its discretion by failing to adequately explain its decision to deny benefits, it had not concluded “that the determination was necessarily wrong.” Accordingly, the court held that Ms. O’Connell did not meet her burden of proving entitlement to continuing disability benefits and remanded to Hartford for a second chance at a meaningful review.
Lewis v. First Unum Life Ins. Co. of Am., No. Civ. 3:21CV00529(SALM), 2023 WL 2687284 (D. Conn. Mar. 29, 2023) (Circuit Judge Sarah A. L. Merriam). Plaintiff Coralisa Lewis brought this action against First Unum Life Insurance Company of America seeking judicial review of its termination of her long-term disability benefits. Unum terminated the claim concluding that Ms. Lewis has received all of the benefits payable to her pursuant to the plan’s 24-month cap on benefits for disabilities due to mental illness, concluding that Ms. Lewis was not precluded from performing the duties of her work as a nurse due to any non-limited conditions, namely Ms. Lewis’s “neurocognitive disorders.” Following a bench trial, the parties presented their competing motions for judgment on the administrative record in their favor. In this decision, the court affirmed that First Unum’s “decision that no further benefits were payable to plaintiff under the Plan.” Under arbitrary and capricious review, the court held that Unum’s interpretation of the medical record was supported by substantial evidence and therefore could not be disturbed. The court further concluded that First Unum had not violated the Department of Labor’s ERISA claim regulations because it had internists, neurologists, a psychiatrist, and a neuropsychologist review the claims file and address all of Ms. Lewis’s symptoms including her visual and cognitive impairments. Accordingly, the court held that Ms. Lewis’s claim was afforded a full and fair review. Finally, the court held that nothing in the record established that First Unum arbitrarily refused to credit Ms. Lewis’s medical evidence. For these reasons, judgment was granted in favor of First Unum and against Ms. Lewis.
Radle v. Unum Life Ins. Co. of Am., No. 4:21CV1039 HEA, 2023 WL 2662876 (E.D. Mo. Mar. 28, 2023) (Judge Henry Edward Autrey). Plaintiff Michael Radle brought suit in August 2021 against Unum Life Insurance Company of America to challenge its termination of his long-term disability benefits. On January 12, 2022, the Social Security Administration notified Mr. Radle that it was overturning its previous decision denying his claim for SSDI benefits and that he was entitled to Social Security disability benefits retroactively beginning in February 2018. Mr. Radle was then issued a check from the Social Security Administration for over $90,000. Mr. Radle’s counsel later informed Unum about the notice of award of Social Security disability benefits, and the parties soon after mediated this case. Mediation however was unsuccessful. Unum has now moved for leave to file a counterclaim against Mr. Radle seeking to collect an overpayment amount of $70,366.50 under the plan’s Other Income Benefits provision, which it maintains entitles it to deduct the Social Security disability payments from the benefits it has paid Mr. Radle to date. Mr. Radle argued that Unum’s motion is untimely, and that Unum learned of the claim through confidential meditation. The court disagreed. It found Unum’s motion timely as it was “not until the Social Security Administration awarded Plaintiff disability coverage and Defendant discovered the award that the counterclaim matured.” Moreover, the court held that Unum properly established that it learned of the claim when Mr. Radle’s counsel advised it of the award prior to mediation and not through the meditation process. Accordingly, the court stated, “Defendant is entitled to file its subsequently matured counterclaim,” and therefore granted Unum’s motion.
Collins v. Life Ins. Co. of N. Am., No. 6:21-cv-1756-WWB-DCI, 2023 WL 2633309 (M.D. Fla. Mar. 24, 2023) (Judge Wendy W. Berger). Plaintiff Brandon Collins was employed as a dock worker, a very physical occupation requiring him to lift as much as a hundred pounds and to constantly move and handle materials. Mr. Collins stopped working in 2019 due to spinal, neck, and shoulder conditions which were caused by two automobile accidents. He subsequently applied for and was granted long-term disability benefits under his company’s group disability policy. However, defendant Life Insurance Company of North America (“LINA”) terminated Mr. Collins’ benefits after his policy’s definition of disability transitioned from the “own occupation” to the “any occupation” standard. Mr. Collins filed this action seeking judicial review of LINA’s determination. In this order the court ruled on the parties’ cross-motions for summary judgment and granted judgment in favor of LINA under an arbitrary and capricious review standard. Ultimately, the court agreed with LINA that substantial evidence within the administrative record supported its decision that Mr. Collins could work in a more sedentary position with his musculoskeletal and cognitive impairments, and that the decision to terminate Mr. Collins’ benefits therefore could not be disturbed or substituted with the judgment of the court.
Jacobs v. Reliance Standard Life Ins. Co., No. 21-323 (TSC), 2023 WL 2708581 (D.D.C. Mar. 30, 2023) (Judge Tanya S. Chutkan). Plaintiff Dr. Austin Jacobs objected to Magistrate Judge Michael Harvey’s June 6, 2022 report and recommendation, recommending the court issue judgment in favor of defendant Reliance Standard Life Insurance Company in this long-term disability benefits dispute. Magistrate Harvey concluded that the policy’s pre-existing conditions limitation barred Jr. Jacobs from receiving benefits because “they were casually related to a preexisting condition for which he received medical care during the three months preceding the effective date of his insurance… and Plaintiff was not exempt from the Limitation under another provision that applied if ‘an employee is an Eligible Person on the Effective Date of this Policy.’” Although the Magistrate agreed with Dr. Jacobs that there was ambiguity about what the effective date of the policy was, finding that it could plausibly be three different dates, the Magistrate nevertheless held that that ambiguity was immaterial because for other reasons Dr. Jacobs did not qualify as an “Eligible Person covered by the Reliance policy until, at earliest, July 1, 2018.” Upon review of the Magistrate’s report, Dr. Jacob’s objections, and the policy documents, the court in this decision agreed with Magistrate Harvey’s conclusions of law, including that Dr. Jacobs was not eligible to qualify for the exemption from the pre-existing conditions limitation. “As a result, the Limitation barred his claim for benefits.” Accordingly, the court adopted the report in full, and granted judgment in favor of Reliance Standard affirming its denial of Dr. Jacobs’ claim.
Randall v. GreatBanc Tr. Co., No. 22-cv-2354 (ECT/DJF), 2023 WL 2662676 (D. Minn. Mar. 28, 2023) (Magistrate Judge Dulce J. Foster). On behalf of the Wells Fargo & Company 401(k) Plan and a class of similarly situated participants of the plan, plaintiffs moved for leave to conduct jurisdictional discovery in anticipation of defendants’ planned motion for dismissal pursuant to Federal Rules of Civil Procedure 12(b)(1) for lack of Article III standing. Defendants’ standing argument asserts that plaintiffs have no injury since they received all matching contributions and common stock dividends to which they were entitled under the terms of the plan. In order to respond to the fiduciaries’ factual attack on standing, plaintiffs sought a deposition from defendants’ declarant on the topics she presented in her declaration, particularly questioning her about the allocation of dividends, the value of the preferred stock dividends, and about the fair market value reports that the plan’s trustee, GreatBanc, relied on for annual stock transactions. In this order the court granted plaintiffs’ discovery motion. It held that “[u]pon reviewing the Plan documentation, the Court finds that the Plan authorizes allocations over the six percent cap (the cap for matching common stock contributions) when there is unallocated Common Stock at year end, such that it is at least possible Plaintiffs received fewer Common Stock allocation than they otherwise might have received but for the alleged challenged conduct.” Accordingly, the court disagreed with defendants that jurisdictional discovery was irrelevant to the question of whether plaintiffs had suffered injuries-in-fact arising from Well Fargo’s allocation of the stock dividends, and that it was therefore unclear whether plaintiffs had received all matching stock contributions and dividends they were entitled to under the plan. In fact, the court held that the plan describes instances in which additional stock allocations to plan participants “are mandatory-not theoretical.” Thus, under the circumstances, the court was satisfied that plaintiffs demonstrated a sufficient basis warranting discovery “concerning whether the potential amount of unallocated Common Stock at year end was negatively impacted by Wells Fargo’s alleged decision to use Preferred Stock dividends to pay its mandatory Plan contributions, instead of using the dividends to pay down the ESOP loans.” Accordingly, plaintiffs were allowed to conduct their proposed jurisdictional discovery on this matter.
Lawrence E. Moon Funeral Home v. Metro. Life Ins. Co., No. 22-10890, 2023 WL 2646255 (E.D. Mich. Mar. 27, 2023) (Judge Judith E. Levy). Decedent Bryan Crimes had an ERISA governed life insurance policy through his employer insured by defendant Metropolitan Life Insurance Company (“MetLife”). His minor children were the beneficiaries of the plan. Following Mr. Crimes’ death, the Lawrence E. Moon Funeral Home performed funeral and burial services for decedent. The funeral home then sought payment for the funerial services they provided from MetLife. When MetLife did not make any payments to the funeral home, it petitioned the Oakland County Probate Court for an order requiring MetLife to issue the payments from the proceeds of the ERISA plan to cover the funeral expenses. The state probate court entered the Funeral Home’s requested order. Nevertheless, MetLife continued to refuse to make any payments to the Funeral Home, arguing that such a payment would conflict with the terms of the ERISA plan, because the funeral home was not a named plan beneficiary. In response, the funeral home and the administrator of Mr. Crimes’ Estate filed this ERISA action seeking a court order requiring MetLife to issue the payments pursuant to the terms of the state court order. The court however dismissed plaintiffs’ complaint, concluding that it failed to establish federal question jurisdiction under ERISA as plaintiffs are not participants or beneficiaries of the plan and therefore could not make a claim under the plan. Since the dismissal, MetLife, which seems to have wanted the court to find the state probate order preempted, moved pursuant to Federal Rule of Civil Procedure 60(b)(1) for relief from judgment and for reconsideration. MetLife maintained that the court’s dismissal was made in error as it incorrectly applied ERISA preemption principals. MetLife argued that plaintiffs’ entitlement to plan benefits under the probate court order was an inappropriate application of state law “in contravention of the Plan documents.” The court disagreed. It found that, under complete preemption, plaintiffs had no colorable claim because they were not beneficiaries under the plan. Thus, the court held, “any statelaw claims properly brought by Plaintiffs would not be completely preempted under ERISA.” Accordingly, MetLife’s motion was denied.
McCammon v. The Dollywood Found., No. 3:22-CV-00385-DCLC-DCP, 2023 WL 2637411 (E.D. Tenn. Mar. 24, 2023) (Judge Clifton L. Corker). In November 2019, plaintiff Doreen McCammon learned from the Trust Company of Tennessee, the trustee of her ERISA retirement plan, that the funds from the retirement plan were no longer in her account and that her employer, the Dollywood Foundation “had obtained possession of them.” In this lawsuit, Ms. McCammon alleges that the Dollywood Foundation failed to satisfy its obligations and breached its fiduciary duties by withdrawing these funds from her retirement account and asserted claims under ERISA Section 502(a)(1)(B), and 502(a)(2), as well as state law claims of conversion, breach of contract, and breach of fiduciary duty. The Dollywood Foundation moved for dismissal of the state law causes of action under Federal Rule of Civil Procedure 12(b)(6), arguing they were preempted by ERISA. The court granted the motion to dismiss the state law claims in this order. It agreed with defendant that “the state-law claims are alternative enforcement mechanisms,” seeking the same relief based on the same conduct as the two ERISA causes of action and that they were therefore preempted. The fact the plan may be a “top hat plan,” the court held did not change the calculation of whether ERISA preempts the state law claims. Accordingly, the court dismissed the three state law claims with prejudice.
Wall v. Reliance Standard Life Ins. Co., No. 20-2075 (EGS/GMH), 2023 WL 2663031 (D.D.C. Mar. 27, 2023) (Judge Emmet G. Sullivan). Pro se plaintiff Lucas Wall brought this action against Reliance Standard Life Insurance Company and one of its reviewing doctors, Dr. Tajuddin Jiva, asserting several causes of action including, as relevant here, claims against Dr. Jiva of medical malpractice, negligence, and bad faith in connection with Dr. Jiva’s actions reviewing Mr. Wall’s medical record and Dr. Jiva’s conclusion that Mr. Wall’s symptoms were not disabling. The court previously dismissed Mr. Wall’s negligence and bad faith claims, finding them preempted by ERISA as resolution of those claims would supplement ERISA’s civil enforcement remedy. However, the court held that the medical malpractice claim was not preempted by ERISA and allowed the claim to proceed. Dr. Jiva then moved for judgment on the pleadings to dismiss the medical malpractice claim asserted against him. The court referred the matter to Magistrate Judge Harvey, who issued a report and recommendation recommending the court grant Dr. Jiva’s motion. The Magistrate found that New York law governed Mr. Wall’s claim because Dr. Jiva’s conduct, i.e., Dr. Jiva’s review of the papers of Mr. Wall’s medical records, took place in New York. With the choice of law determined, the Magistrate determined that there was “no physician-patient relationship between Mr. Wall and Dr. Jiva,” and that a medical malpractice claim could not be imposed in the absence of such a relationship. Accordingly, the Magistrate held that Dr. Jiva was entitled to judgment on the pleadings. Mr. Wall objected to the Magistrate’s report. In this order, the court overruled Mr. Wall’s objections and requests for reconsideration, and adopted the report, granting judgment to Dr. Jiva.
Life Insurance & AD&D Benefit Claims
Unum Life Ins. Co. of Am. v. Allard, No. 20-cv-619-SM, 2023 WL 2665394 (D.N.H. Mar. 28, 2023) (Judge Steven J. McAuliffe). Unum Life Insurance Company brought this action in interpleader seeking a court order determining which claimant was entitled to life insurance benefits from an ERISA policy belonging to decedent Steven Allard. Defendant LuAnn Allard is Steven’s ex-wife and the only named beneficiary of the plan. Defendant Tiffany Allard is Steven’s widow, who claimed she was entitled to the benefits pursuant to the terms of LuAnn and Steven’s divorce decree which stated that Steven and LuAnn were each “awarded any life insurance policies in his or her own name, free and clear of any interest of the other.” Tiffany Allard therefore argued that she is entitled to the benefits as Steven’s spouse at the time of his death. Last August, defendant LuAnn filed a motion for the benefits. In response, defendant Tiffany Allard filed her own competing motion for the benefits. After filing her motion however, LuAnn was then conspicuously absent in this litigation, failing to respond to Tiffany’s motion, to appear in the court ordered mediation, or in any further way participate in this action. Given LuAnn’s absence, the court concluded that she was disqualified from an award of benefits “because her claim has been abandoned and dismissed for failure to prosecute.” Under the circumstances, the court concluded that the appropriate outcome was to award benefits to Tiffany. Accordingly, Tiffany Allard’s motion was granted, and she was awarded the benefits that Unum deposited in the court registry.
Lightner v. Lincoln Life Assurance Co. of Bos., No. 3:21-cv-00652-FDW-DSC, 2023 WL 2672829 (W.D.N.C. Mar. 28, 2023) (Judge Frank D. Whitney). On April 10, 2017, defendant Dionte Long stabbed and killed decedent Marcella Thrash. In the subsequent criminal case, Mr. Long was adjudicated not guilty by reason of insanity. Ms. Thrash’s will was probated on April 18, 2017, and her estate was bequeathed to Mr. Long. Two civil actions then took place to determine who was entitled to Ms. Trash’s ERISA life insurance, accidental death and dismemberment insurance, and 401(k) plan proceeds. In the first lawsuit, the insurance company plaintiff sought a declaratory judgment to declare Mr. Long ineligible as Ms. Thrash’s slayer. The court issued an opinion determining that Mr. Long was not a slayer under North Carolina’s slayer statute because he was found not guilty by reason of insanity in the criminal case. That case settled prior the court’s ruling on a motion for summary judgment and a trial. This action followed. Here, plaintiffs are Ms. Trash’s family members. They brought this action seeking a declaratory judgment that Long is not entitled to any of Ms. Trash’s ERISA benefits due to the federal common law doctrine that no person should be permitted to profit from his wrong. Mr. Long moved to dismiss the action. The plaintiffs, in turn moved for partial summary judgment seeking the court issue a declaratory judgment that Mr. Long “cannot profit from his victim’s insurance benefits as a matter of law.” The court began by addressing Mr. Long’s motion to dismiss. First, the court held that it had subject matter jurisdiction over this ERISA action and that the case pertains to the disbursement of funds under ERISA plans deposited with the court, meaning the case “falls outside the Probate Exception.” The court also concluded that plaintiffs, all but one of whom were not named beneficiaries of any of the plans, had standing as prospective heirs to Ms. Trash who may be entitled to her benefits if Mr. Long is found ineligible. Finally, the court disagreed with Mr. Long that this action was barred by the doctrine of res judicata, due to the first action Midland National Life Ins. V. Long. To the contrary, the court found the two cases presented different issues and had different parties. Additionally, because the first case ended in settlement, the court held that there was no final judgment on the merits. For these reasons, the court denied Mr. Long’s motion to dismiss. The court subsequently turned to plaintiffs’ motion for judgment. Their motion was granted. The court concluded that the uncontroverted record establishes that Mr. Long killed Ms. Trash. Applying applicable Fourth Circuit precedent, the court found that federal common law was an alternative theory to the slayer statute, and the application of the common law principal here precludes Mr. Long from receiving the ERISA proceeds, despite being a named beneficiary. Thus, the court held that judgment on this issue in favor of the Ms. Trash’s heirs was appropriate and there was no material fact in dispute.
Medical Benefit Claims
T.E. v. Shield, No. 3:22-cv-202-DJH-LLK, 2023 WL 2634059 (W.D. Ky. Mar. 24, 2023) (Judge David J. Hale). Plaintiff T.E., on behalf of minor son C.E., sued Anthem Health Plans of Kentucky, Inc., Stoll Keenon Ogden PLLC, and Stoll Keenon Ogden’s self-funded employee welfare benefit plan after Anthem denied plaintiff’s claims for payment of C.E.’s extended stay at a sub-acute level residential treatment facility. T.E. asserted two causes of action against defendants, a claim for benefits pursuant to ERISA Section 502(a)(1)(B), and a claim for an as-applied violation of the Mental Health Parity and Addiction Equity Act of 2008. Specifically, plaintiff alleged that defendants violated the Parity Act by requiring continued mental healthcare treatment only for patients who were a danger to themselves or others. T.E. argued that the criteria Anthem applied was a requirement for acute level care and that it was thus “not appropriate to require individuals receiving subacute residential treatment care to manifest these types of symptoms,” particularly because Anthem does not restrict comparable medical/surgical services including at nursing, hospice, and physical rehabilitation centers, in this same manner. Anthem moved to dismiss the Parity Act violation. The court denied the partial motion to dismiss. It would not apply the more rigid pleading standard to state a Parity Act claim that Anthem argued in favor of, because of the inherent discrepancy in information belonging to each of the parties prior to the benefits of discovery. The court was satisfied that plaintiff alleged a specific treatment limitation for mental healthcare, analogous medical and surgical care, and a discrepancy between the two. Accordingly, the court found T.E. stated a plausible violation of the Parity Act and as such would not dismiss that claim at the pleadings.
M.Z. v. Blue Cross Blue Shield of Ill., No. 1:20-cv-00184-RJS-CMR, 2023 WL 2634240 (D. Utah Mar. 24, 2023) (Judge Robert J. Shelby). Plaintiffs, mother and son M.Z. and N.H., filed this lawsuit against defendants Blue Cross Blue Shield of Illinois and the Boeing Company Consolidated Health and Welfare Plan after defendants denied coverage for N.H.’s residential mental healthcare treatment. Plaintiffs asserted a claim for benefits under ERISA Section 502(a)(1)(B), as well as a claim for violation of the Mental Health Parity and Addiction Equity Act based on Blue Cross’s use of the Milliman Care Guidelines which plaintiffs aver impose more stringent acute-level symptoms and criteria to determine medical necessity for residential behavioral healthcare than for analogous medical or surgical residential treatment facilities. The parties filed cross-motions for summary judgment. The court began by addressing the denial of benefits and by determining the proper standard of review. Parties agreed that the plan afforded Blue Cross with discretionary authority. Plaintiffs however argued that Blue Cross should not be afforded deferential review because it failed to comply with ERISA’ procedural requirements. The court agreed in part, although rather than apply de novo review, it opted to remand. The court split its review in two for each of the two treatment centers that N.H. stayed at. With regard to the first, ViewPoint, the court found that defendants did not commit any procedural error and accordingly applied arbitrary and capricious review to the denial. Upon deferential review, the court upheld the denial, agreeing with defendants that N.H. did not meet the medical necessity criteria under the Milliman Care Guidelines as he was not a danger to himself or others and because he was not suffering from a severe psychiatric disorder with daily symptoms which interfered with his day to day living. Accordingly, the court granted summary judgment to defendants for the claim for benefits for the stay at ViewPoint. However, with regard to N.H.’s stay at the second residential treatment center, Innercept, the court found defendants failed to respond to plaintiffs’ appeal, and that this procedural failure warranted a remand. The court declined to award either party summary judgment on this claim for benefits, concluding that the administrative record was simply incomplete and inconclusive. Thus, the court remanded this claim to allow defendants to make a benefit determination on the merits and to create a more complete record for judicial review. Finally, with regard to plaintiffs’ Parity Act claim, the court granted summary judgment to defendants. The court concluded that the Plan, which uses the Milliman Care Guidelines for both medical/surgical care and mental healthcare, was not applying more restrictive acute-level restrictions on coverage for psychiatric health treatments than it was applying to analogous medical or surgical care.
Pension Benefit Claims
Thomas v. N. Miss. Health Servs., No. 3:21-cv-260-SA-RP, 2023 WL 2704009 (N.D. Miss. Mar. 29, 2023) (Judge Sharion Aycock). Following the death of his wife, Becky, plaintiff Mark Thomas applied to receive benefits under Becky’s retirement plan administered by her former employer, defendant North Mississippi Health Services, Inc (“NMHS”). NMHS determined that Mr. Thomas was entitled to benefits under the plan in the form of a Qualified Joint and Survivor Annuity. Mr. Thomas appealed this determination, arguing that the plan language entitled him to elect distributions in the form of a lump sum payment, as Becky had died prior to drawing from the plan and therefore did not have an annuity starting date. NMHS affirmed its prior position during the internal appeal process. Mr. Thomas then commenced this action. Although the parties did not dispute that Mr. Thomas is entitled to benefits under the plan, they remain at odds over whether Mr. Thomas is entitled to a lump sum distribution and over whether Mr. Thomas is at least entitled to have his entire interest distributed to him within the next five years. The parties also agreed that the plan grants NMHS with discretionary authority. Therefore, the court evaluated the parties’ competing motions for judgment in their favor under abuse of discretion review. The court understood its role here as determining “whether the administrator’s interpretation is consistent with a fair reading of the plan.” The court’s answer in this decision was yes. The court concluded that NMHS’s interpretation was a straightforward and fair reading of the relevant provisions. The relevant language requires mandatory benefits “payable to a Participant who retires or terminates Service shall be paid in the form of a Qualified Joint and Survivor Annuity,” unless the participant follows certain plan mandated procedures to waive the annuity and elect a lump sum benefit. Because the uncontroverted evidence showed that Becky never waived the annuity, the court understood the annuity starting date to be the first date on which an amount is payable regardless of whether a participant actively selects a starting date. Thus, as Becky died prior to “to the Annuity Starting Date, the Plan mandates that the Eligible Spouse be paid a QPSA (qualified preretirement survivor annuity).” Therefore, satisfied that NMHS’s interpretation of the plan was “legally correct,” the court held that the administrator had not abused its discretion and as such granted judgment in its favor.
Overby v. Tacony Corp., No. 4:21 CV 1374 CDP, 2023 WL 2707438 (E.D. Mo. Mar. 30, 2023) (Judge Catherine D. Perry). Plaintiff Bradley Overby sued his former employer, the Tacony Corporation, after he was paid a lump sum payment under the Tacony Stock Appreciation Plan which he believed was improperly calculated based on the wrong calendar year stock valuation and because of that was a payment less than he was entitled to under the unambiguous terms of the plan. Tacony Corp. moved for summary judgment. It argued that its calculation of benefits was a reasonable interpretation of the plan language and that it is therefore entitled to judgment under deferential review. The court did not agree. It found that first that Tacony Corporation applied the wrong date when Mr. Overby’s employment was terminated. The termination of employment date Tacony used, December 14, 2020, was “erroneously based on the date Tacony received Overby’s letter of resignation,” but was not the date when Mr. Overby stopped working, that date was January 5, 2021, which was his last paid date of employment. This difference of the date of termination of employment was significant because under the clear terms of the plan the stock valuation applied to calculate benefits hinges on the given year’s stock “Book Value.” Accordingly, the court agreed with Mr. Overby that Tacony used the wrong stock valuation based on the wrong date when his employment terminated, and that the calculation was therefore incorrect under the clear language of the plan. The court stated that under the plain langue of the plan, the committee was required to use the book value of the Tacony’s share on December 31, 2020, to value Mr. Overby’s units. Thus, the court held that Tacony had abused its discretion by using the December 31, 2019, stock valuation to calculate Mr. Overby’s benefits, and so denied Tacony’s motion for summary judgment.
Cashman v. GreyOrange, Inc., No. 1:22-CV-02069-JPB, 2023 WL 2652789 (N.D. Ga. Mar. 27, 2023) (Judge J.P. Boulee). Plaintiff Jeff Cashman is the former Senior Vice President and Global Chief Operating Officer of GreyOrange, Inc., a global technology company. Mr. Cashman filed this action under ERISA and state law after he was terminated on March 30, 2022. Mr. Cashman alleges that his employer terminated him in bad faith to avoid paying him contractually obligation bonuses and to prevent the vesting of his stock in the company’s stock option plan, which he claims were losses of more than $1 million. Defendants moved to dismiss Mr. Cashman’s claims pursuant to Federal Rule of Civil Procedure 12(b)(1). They argued that Mr. Cashman could not assert his ERISA causes of action because the stock option plan is not governed by ERISA. Mr. Cashman maintained that the plan is an ERISA-governed Employee Stock Ownership Plan (ESOP). To analyze whether it had subject-matter jurisdiction over Mr. Cashman’s claims, the court began by answering the question of whether it was plausible that the GreyOrange stock plan qualifies as an ESOP. The court answered in the negative. It found the terms of the plan unequivocally demonstrate that it operates not as an ESOP but as a traditional stock option plan, with the intent of rewarding and incentivizing employees during their years of active employment. “Further,” the court wrote, “there is no indication that the GreyOrange Plan, by its express terms or by surrounding circumstances, systematically defers income to a time after employment is terminated. Although the GreyOrange Plan contemplates scenarios where stock options can be exercised after termination, retirement or other employment separation events, the GreyOrange Plan specifically contains provisions addressing the exercise of stock options during employment as well.” Accordingly, the court was not convinced that the plan was plausibly governed by ERISA. Finally, the court held that even operating under the premise that the GreyOrange Plan qualified as an ERISA plan, it “would nevertheless fall under (ERISA’s) bonus exception.” Based on these findings, the court concluded that it lacked jurisdiction over this action and accordingly granted defendants’ motion and dismissed Mr. Cashman’s complaint, without prejudice.
Pleading Issues & Procedure
Hoeffner v. D’amato, No. 09-CV-3160 (PKC) (CLP), 2023 WL 2632501 (E.D.N.Y. Mar. 24, 2023) (Judge Pamela K. Chen). Four asphalt plant workers employed by the College Point Asphalt Corporation brought this action against the Trustees of the Sand, Gravel, Crushed Stone, Ashes and Material Yard Workers Local 1175 Pension and Welfare Fund seeking a court order requiring defendants to transfer their aliquot share of assets to the pension and welfare funds of their new union, the United Plant and Production Workers Local 175. The Trustees previously “gambled that the Court would agree with their interpretation of Thole,” and find that the workers lacked Article III Standing. That gamble, “did not pay off.” The court issued an order on June 2, 2022, denying defendants’ motion to dismiss for lack of Article III standing. The Trustees then moved for reconsideration. In this decision the court denied defendants’ motion for reconsideration. The court concluded that the Trustees were confusing the injury-in-fact prong of Article III standing “with the separate question of whether a litigant has a cause of action under which to bring the lawsuit.” Furthermore, the court held that plaintiffs have a concrete injury-in-fact as they have clearly identified the pool assets upon which they assert their claims and as their injury is based upon “harm they already suffered from decreased benefits and lower wages.” Finally, the court found that its order did not result in manifest injustice or prejudice to the defendants. To the contrary, the court held that defendants’ prejudice was entirely self-inflicted and the result of their judicial strategy. Accordingly, the court found that the Trustees had not meet their burden to justify the use of the extraordinary remedy of reconsideration and so maintained the status quo.
Transamerica Life Ins. Co. v. Douglas, No. 3:21-cv-00194, 2023 WL 2656527 (M.D. Tenn. Mar. 27, 2023) (Judge Eli Richardson). Plaintiff Transamerica Life Insurance Company filed this interpleader action to determine the proper beneficiaries of the proceeds from four benefits plans – a pension plan, a 401(k) plan, a basic life insurance plan, and a supplemental life insurance plan – held by decedent Jerome Edward Douglas Sr. The four named defendants, the potential beneficiaries, are Mr. Douglas’s wife, Jingbin Douglas, his adult daughter, Penny Grace Judd, his adult son, Jed Douglas, and his brother, Daniel Douglas. Defendant Jed Douglas asserted four crossclaims against defendant Jingbin Douglas, who in turn asserted three crossclaims against Jed Douglas. Jingbin moved to dismiss Jed’s crossclaims and for declaratory judgment. Her motion was granted in part and denied in part in this decision. There are questions in this action regarding the validity of Jingbin and Jerry’s marriage and the validity of the signature purportedly belonging to Jerry on his will. The court held that the domestic relations exception, a doctrine of federal law precluding federal courts from exercising jurisdiction over claims which involve “the issuance of divorce, alimony, or child custody decree,” applied to some of the declarations Jed’s sought as part of his declaratory judgment claim. Specifically, the court dismissed the declarations which required the court to issue a declaration determining whether Jingbin and Jerry were or were not legally married based on enforcing the relevant Chinese divorce decree and the Tennessee marriage certificate. However, the court noted that “because the domestic relations exception does not apply to the bulk of the pending claims in this case, the effect of this ruling is limited.” For the purposes of deciding the remaining claims the court did not consider the argument of the validity of Jingbin and Jerry’s marriage or “any related evidentiary questions that may arise in the course of considering such argument.” Finally, the court declined to dismiss Jed’s claims based on issues relating to an unresolved pending Probate Court case involving these same parties. Thus, most of the disputes of this case were left unresolved, to be analyzed later on based on their merits.
Gamache v. Hogue, No. 1:19-CV-21 (LAG), 2023 WL 2658033 (M.D. Ga. Mar. 27, 2023) (Judge Leslie A. Gardner). In this Employee Stock Ownership Plan (“ESOP”) class action, plaintiffs identified and retained Jeffrey Krenzel, an employee benefits lawyer with over two decades of experience specializing in ESOP transactions involving stock of non-public companies, as an expert witness. Mr. Krenzel has offered opinions regarding the industry standards for fiduciary processes with regard to ESOP transactions, relevant to plaintiffs’ claims for breaches of fiduciary duties and prohibited transactions. Defendants filed a Daubert motion to exclude Mr. Krenzel’s testimony and expert report. They argued that Mr. Krenzel was not qualified to offer his opinions, that his opinions were unreliable, and that his opinions were neither relevant nor helpful. The court disagreed on all of these topics. It held that Mr. Krenzel’s “proffered opinion falls within the reasonable confines of his area of expertise,” that Mr. Krenzel drew those opinions directly from his review of the record, and that “a comparison of the processes and procedures employed in the transactions at issue to the standard processes and procedures employed in such transactions is relevant to all Counts of the Amended Complaint.” For these reasons, defendants’ motion to exclude Mr. Krenzel’s testimony and report was denied.
Gamache v. Hogue, No. 1:19-CV-21 (LAG), 2023 WL 2687552 (M.D. Ga. Mar. 28, 2023) (Judge Leslie A. Gardner). In the second decision this week in the Gamache ESOP class action, Judge Gardner ruled on defendants’ second motion to exclude the expert testimony and report of another of plaintiffs’ experts, Steven J. Sherman. Mr. Sherman is “a certified public accountant and managing director at Loop Capital Financial Consulting Services,” with over thirty years of stock valuation experiences and related expertise on ESOPs, acquisitions, tax planning, and corporate restructurings. Once again, the court denied defendants’ motion to exclude. The court concluded that Mr. Sherman, like Mr. Krenzel, satisfied the requirements of the Federal Rule of Evidence 702. The court held that Mr. Sherman was qualified to opine on topics related to his areas of financial expertise, particularly as Mr. Sherman “has been hired approximately 12 times by the U.S. Department of Labor to review valuations performed by other parties for ESOP transactions.” Additionally, the court found that Mr. Sherman’s opinions and report were useful, relevant, and reliable. Thus, under Rule 702, Mr. Sherman’s expertise and testimony was found to be admissible.
Jackson v. Pressley, No. 5:22-cv-00311-TES, 2023 WL 2695099 (M.D. Ga. Mar. 29, 2023) (Judge Tilman E. Self, III). Parties in this benefits dispute sought a court order deterring whether this action is governed by ERISA and whether the case should be remanded to state court. In a brief decision light on specifics, the court held that the relevant divorce decree in the case did not qualify as a Qualified Domestic Relations Order (“QDRO”) under ERISA’s requirements. Specifically, the court found the text of the divorce decree speaks of the existence of a separate document to that it considers to be a QDRO. This reference to a soon to filed Qualified Domestic Relations Order led the court to believe that the parties did not consider the divorce decree itself to be a QDRO. Moreover, the decree, the court found, did not meet the ERISA’s QDRO requirements as it did not clearly specify the plan to which it applied, failed to reference any plan currently in place at the time of the decree, mentioning instead only future plans, and failed to specify the name and mailing addresses “of each alternate payee covered by the order.” The court therefore held that the order did not qualify as a QDRO. Accordingly, the court found that Georgia state law governed the dispute between the parties, and therefore granted the motion to remand the action to the state court.
Murphy Med. Assocs. v. United Med. Res., No. 3:22cv83(JBA), 2023 WL 2687466 (D. Conn. Mar. 29, 2023) (Judge Janet Bond Arterton). Your ERISA Watch has been covering decisions in several related lawsuits brought by plaintiff Murphy Medical Associates, LLC seeking reimbursement of COVID-19 diagnostic testing. In this lawsuit, the healthcare provider has sued United Medical Resources, Inc. In all of its actions, Murphy Medical asserted causes of action under the Families First Coronavirus Response Act (“FFCRA”), the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), the Affordable Care Act (“ACA”), ERISA, and several state laws including breach of contract, unjust enrichment, and two Connecticut insurance laws. United Medical Resources moved to dismiss the complaint entirely. In this decision the court granted in part and denied in part defendants’ motion to dismiss. Specifically, the court dismissed Murphy Medical’s claims asserted under FFCRA, the CARES Act, and the ACA concluding none of the Acts create a private right of action for healthcare providers. This holding was in line with the majority of other circuit court decisions ruling on the issue. However, the court denied the motion to dismiss Murphy Medical’s wrongful denial of benefits claim under ERISA Section 502(a)(1)(B). The court found that Murphy Medical had standing, as it pled that it was assigned benefits from the insured patients. The court further held that that United Medical Resources was a proper defendant under Second Circuit precedent which holds that “when a claims administrator exercises total control over claims for benefits under the terms of the plan, that administrator is a logical defendant in the type of suit contemplated by § 502(a)(1)(B).” Finally, and most significantly, the court found Murphy Medical stated a plausible ERISA claim based on the reimbursement obligation derived from the Coronavirus Legislation “which effectively modified the terms of ERISA plans to provide SARS-CoV-2 tests at no cost to a patient. Thus, the relevant plans imposed UMR’s obligation to reimburse COVID-19 diagnostic testing in accordance with federal law and specific plan language or the individual assignor-beneficiaries is not required.” For these reasons the court allowed Murphy Medical to proceed with its claims for benefits under ERISA. Murphy Medical’s ERISA Section 502(a)(3) claim was dismissed though, as the court found it had a viable avenue to proceed under Section 502(a)(1)(B), making its ERISA declaratory and injunctive relief claim redundant. Lastly, the court dismissed the state law claims insofar as they sought benefits under ERISA plans. To the extent that Murphy Medical sought reimbursement from claims under non-ERISA plans, dismissal of the state law causes of action with without prejudice to amend to specifically identify those plans. Accordingly, this decision bucks the trend Your ERISA Watch has seen lately with courts wholly dismissing healthcare provider actions seeking reimbursement of COVID-19 tests under the COVID congressional legislation.
Gooden v. Joseph P. Addabbo Family Health Ctr., No. 21-CV-6313 (RPK) (SJB), 2023 WL 2709735 (E.D.N.Y. Mar. 30, 2023) (Judge Rachel P. Kovner). Pro se plaintiff Aurelio Gooden brought this complaint against his former employer, Joseph P. Addabbo Family Health Center, Inc., for discrimination, retaliation, and wrongful termination. Mr. Gooden asserted claims under Title VII, New York state human rights laws, ERISA Section 510, and the anti-retaliation provision of the Taxpayer First Act. Defendant moved to dismiss for failure to state a claim. In this order the court granted the motion to dismiss. The court held that Mr. Gooden had not alleged facts sufficient to plead claims of retaliation or discrimination under either state law or Title VII of the Civil Rights Act because he did not allege facts that his protected status was a motivating factor in his termination, or that his employer knew of his possible intent to testify in another former employee’s discrimination lawsuit against it. Further, the court maintained that even if defendants knew of Mr. Gooden’s intent to testify in support of the other employee, his complaint failed because it did not “plausibly allege a causal connection between his protected activity and his firing.” Regarding Mr. Gooden’s ERISA claim, the court similarly concluded that the allegation his complaint could not be viewed as putting forward any evidence establishing even a causal link between his termination and his protected activity raising a concern to his employers about delays in forwarding pension contributions. To the contrary, the court found the evidence seemed to indicate that Mr. Gooden followed his bosses’ instructions not to disclose any information about late pension contributions and as a result “suffered no adverse consequences for raising his concerns.” Mr. Gooden’s Section 510 claim was accordingly dismissed. Finally, the court dismissed Mr. Gooden’s claim under the Taxpayer First Act because he failed to file a complaint with the Secretary of Labor before bringing his whistleblower claim as required under the statute. As a result, the court dismissed the claim for lack of subject matter jurisdiction. However, the court’s dismissal was without prejudice, and Mr. Gooden was given an opportunity to replead his claims to address these deficiencies.
Withdrawal Liability & Unpaid Contributions
Holland v. Murray, No. 21-567 (TJK), 2023 WL 2645708 (D.D.C. Mar. 27, 2023) (Judge Timothy J. Kelly). Trustees of the United Mine Workers of America 1974 Pension Trust, a defined benefit Taft-Hartley pension plan, sued a group of individuals and corporate entities with ties to a large privately owned coal company, Murray Holdings, which withdrew from the plan. In this action, the Trustees argue that defendants owe the trust approximately $6.5 billion in an unpaid withdrawal liability. They seek a court order finding the defendants part of the Murray Controlled Group and therefore a single employer under ERISA and MPPAA and as such jointly and severally liable for Murray Energy’s withdrawal. Defendants moved to dismiss the complaint. They argued that plaintiffs lacked standing to assert their claims, “because the plan has no unremedied, concrete injury.” In addition, defendants maintained that any injury which does exist is not traceable to them “but is instead self-inflicted,” because of bankruptcy proceedings. The court disagreed and denied the motion to dismiss. First, the court held that Congressional backstops guaranteeing financial solvency of Taft-Hartley plans do not address plaintiffs’ injury or otherwise remedy it. The court also expressly stated that defendants’ allegedly unlawful conduct caused the Trustees’ injury, and that plaintiffs therefore satisfied “the basic principles of traceability.” Defendants’ theories of why plaintiffs’ injury was not traceable to them based on Murray Holdings’ filing for Chapter 11 bankruptcy were also rejected by the court, which held that “nothing that happened during the bankruptcy proceedings can deprive Plaintiffs of standing here.” For these reasons, the court denied defendants’ motion to dismiss.