Edwards v. Guardian Life Ins. of Am., No. 24-60381, __ F.4th __, 2025 WL 1718263 (5th Cir. June 20, 2025) (Before Circuit Judges King, Jones, and Oldham)

One recurring scenario in cases involving ERISA-governed life insurance is when a plan participant or employer pays premiums for the insurance, but the insurer of the plan later attempts to argue that the premium payments did not create coverage. Sometimes this argument works, but the courts have become increasingly skeptical of it, and this week’s notable decision from the Fifth Circuit follows the recent trend.

The plaintiff was James “Jimmy” Edwards, the husband of Pamela Edwards. Pamela owned and operated a beauty salon called Allure Salon and was diagnosed with cancer in 2019. Pamela underwent radiation, chemotherapy, and surgery to treat her cancer, but unfortunately, she eventually succumbed to the disease in May of 2022.

After Pamela’s death, Jimmy learned from Pamela’s insurance agent that Pamela had purchased a group life insurance policy for Allure from defendant Guardian Life Insurance Company. Jimmy requested a claim form from Guardian, but Guardian responded by informing him that the policy had been canceled before Pamela passed away. Guardian represented that in 2019 Allure dropped to just one employee – Pamela – and thus Guardian had the contractual right to cancel the policy.

In litigation, Guardian stated that in September of 2020 it “temporarily suspended its practice of terminating plans that had dropped to one participant due to the COVID 19 pandemic that was impacting the entire globe.” However, Guardian asserted that it had returned to its normal cancellation practices and thus terminated Pamela’s coverage in January of 2022, before she passed away. However, both Jimmy and the insurance agent contended they never received a notice of cancellation from Guardian.

Jimmy filed suit against Guardian and the case proceeded to summary judgment. The district court was not sympathetic to Jimmy and entered judgment for Guardian. It ruled that (a) ERISA preempted Jimmy’s state law claims because the Guardian policy covered Pamela’s employees, thus creating an employee benefit plan, (b) Guardian did not waive its right to cancel the policy, and (c) “the record overwhelmingly supports a presumption that Guardian mailed the cancellation notice.” (Your ERISA Watch covered this decision in our July 24, 2024 edition.)

Jimmy appealed. The Fifth Circuit began with the preemption issue, and agreed with the district court that the plan was governed by ERISA. The central dispute on appeal was whether Allure had “employees.” Jimmy contended that the beauticians working there were independent contractors, and thus ERISA did not apply because the Guardian policy only applied to Pamela, who was the owner and not an employee.

However, using “traditional agency law principles” under federal common law, the Fifth Circuit concluded that Pam “controlled where the technicians worked and their means of doing so,” “controlled when and how long they worked by setting salon hours,” and “paid their insurance premiums, which entitled it to favorable tax treatment.” The Fifth Circuit also noted that clients paid gross receipts to the salon, which were then used to pay the beauticians. Thus, “[c]onsidering ‘all of the incidents of the relationship’…we find that Allure’s workers were employees, so a plan exists and ERISA applies.”

The Fifth Circuit then turned to the merits. It noted that the policy gave Guardian the right to cancel when “less than two employees are insured,” and that Guardian had the discretionary authority under the policy to cancel the plan at any time and for any reason.

However, “insurers can waive their discretionary cancellation rights under ERISA.” The court noted that it had held before, in Pitts ex rel. Pitts v. Am. Sec. Life Ins. Co., 931 F.2d 351 (5th Cir. 1991), that an insurer that accepted premiums “after learning beyond all doubt that [Plaintiff] was the only employee remaining on the policy” waived its right to cancel. Under that precedent, the Fifth Circuit agreed with Jimmy that “Guardian waived its right to cancel Pam Edwards’s plan by continuing to accept premium payments from Allure for 26 months after its cancellation right vested.”

The court explained that although Guardian’s right to cancel vested in November of 2019, there was “a conspicuous 10-month gap between that date and when Guardian started ‘temporarily suspending’ plan cancellation in September 2020 due to COVID.” Furthermore, after its right to cancel vested, Guardian continued to accept 26 months’ worth of premiums. The court noted that Guardian’s delay “prejudiced Pam because she was unable to conduct business over the last ten months of her life due to her mental and physical deterioration.” In short, “Guardian cannot now avoid its obligation to Jimmy Edwards after accepting Allure’s premiums for 26 months.”

Guardian acknowledged its delay in canceling the policy, but contended that this was because of its forbearance policy during the pandemic. Indeed, Guardian asked the Fifth Circuit “to recognize this ‘generous accommodation’ as ‘laudatory,’” and contended that “requiring Guardian to pay Jimmy’s claim ‘epitomizes the adage that ‘no good deed goes unpunished.’’” The court quickly dispatched this argument, concluding instead that a different adage applied: “Requiring Guardian to pay Jimmy’s claim after it pocketed 26 months of Allure’s premiums epitomizes a different adage: ‘You get what you pay for.’”

As a result, while the Fifth Circuit agreed with the district court that ERISA applied to the Guardian policy, it disagreed that Guardian had adequately canceled Allure’s coverage under that policy. The court thus reversed with instructions to enter judgment for Jimmy.

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

Breach of Fiduciary Duty

Eighth Circuit

Matula v. Wells Fargo & Co., No. 24-3703 (JRT/DJF), 2025 WL 1707878 (D. Minn. Jun. 18, 2025) (Judge John R. Tunheim). Plaintiff Thomas O. Matula, Jr. was previously employed by Wells Fargo & Company and was a participant in its 401(k) plan. Mr. Matula brought this action individually and on behalf of a putative class of plan participants and beneficiaries alleging that Wells Fargo and the other fiduciaries of the plan are breaching their duties under ERISA, engaging in prohibited transactions, and violating ERISA’s anti-inurement provision by spending forfeited employer contributions in ways that solely benefit Wells Fargo. Defendants moved to dismiss the complaint. In this decision the court concluded that a plain reading of the plan does not authorize Wells Fargo to use forfeitures to pay optional operating expenses and services of the plan or make corrective payments to participants’ individual accounts in the absence of any error to correct. The court found that Mr. Matula’s complaint relies on these two non-authorized uses of the forfeited funds to allege an injury-in-fact. Because it determined that “[n]either theory has merit here,” the court agreed with Wells Fargo that Mr. Matula lacks Article III standing, and the court lacks subject matter jurisdiction. Accordingly, the court granted the motion to dismiss and dismissed the complaint with prejudice. Because the court dismissed for lack of Article III standing, the court did not analyze whether the complaint plausibly states claims upon which relief may be granted, nor discuss Wells Fargo’s argument that Mr. Matula released his claims.

Ninth Circuit

Wright v. JPMorgan Chase & Co., No. 2:25-cv-00525-JLS-JC, 2025 WL 1683642 (C.D. Cal. Jun. 13, 2025) (Judge Josephine L. Staton). Plaintiff Daniel J. Wright sued JPMorgan Chase & Co. on behalf of its 401(k) plan alleging that the company is violating ERISA’s fiduciary duty standards, its anti-inurement provision, and its prohibition on prohibited transactions by spending forfeited employer contributions to reduce its own future contributions and the cost of the company’s share of plan expenses rather than spending the plan assets in a way that benefits its participants. JPMorgan moved to dismiss the complaint, arguing that Mr. Wright lacks Article III standing and that the complaint moreover fails to state plausible claims. The court granted the motion to dismiss in this decision, albeit only for failure to state a claim. Defendant’s standing arguments were flatly rejected by the court. Contrary to the bank’s assertion that Mr. Wright did not suffer any injury-in-fact through its chosen use of forfeitures, the court concluded that Mr. Wright alleged he experienced a concrete and redressable injury in the form of diminished account balances and reduced investment returns. JPMorgan’s challenge to Mr. Wright’s standing, the court clarified, “instead goes toward whether Plaintiff has plausibly stated his claims.” Although the court determined that Mr. Wright had adequately demonstrated Article III standing to bring his action, the court agreed with JPMorgan that he could not sustain any of his causes of action. First, the court held that the breach of fiduciary claims presented in the complaint here “seek to stretch the fiduciary duties of loyalty and prudence beyond what ERISA requires.” This was so, the court explained, because the participants received the benefits they were promised under the terms of the plan. Moreover, the court stated that as far as it was concerned, defendant’s challenged conduct has been seen as “entirely permissible” for decades. The court thus dismissed the breach of fiduciary duty claims. The court then concluded that Mr. Wright could not allege a claim under ERISA’s anti-inurement provision because “the forfeited assets at issue [n]ever left the Plan,” and were used only for the purpose of paying JPMorgan’s obligations to the plan’s beneficiaries. Further, the court found the fact that the plan explicitly permitted defendant’s “reallocation” of plan assets to offset its future costs doomed Mr. Wright’s prohibited transaction claim. The court wrote that a reallocation, like those at issue here, does “not constitute a prohibited transaction.” Finally, the court dismissed Mr. Wright’s failure to monitor claim because it is derivative of the fiduciary breach claims, which the court concluded were not plausible for the reasons stated above. The court then explained that its dismissal was with prejudice. “Ultimately, Plaintiff’s ERISA claims rest on a misinterpretation of the Plan’s terms and a novel legal theory that is unsupported by present law.” Given this posture, the court held that amendment would be futile.

Disability Benefit Claims

Fifth Circuit

Lennix v. Amazon.com Services LLC, No. 23-1366, 2025 WL 1697135 (E.D. La. Jun. 17, 2025) (Judge Brandon S. Long). Pro se plaintiff Opal Jean Lennix worked at a warehouse for Amazon.com Services LLC in 2021. Just over a month after she was hired, Ms. Lennix suffered an on-the-job rotator-cuff injury. In this action against Amazon and The Hartford Life Insurance Company, Ms. Lennix seeks benefits under Amazon’s short-term and long-term disability benefit plans, and alleges tort claims against Amazon related to her on-the-job injury. Amazon moved to dismiss the complaint for failure to state a claim under Rule 12(b)(6). It argued that the tort claims are barred by the exclusive remedy provision of the Louisiana Workers Compensation Act (“LWCA”), and that she failed to state any claim for benefits under ERISA. The court granted the motion to dismiss as to the tort claims and any ERISA claims for long-term disability benefits as to Amazon, but denied the motion as to the ERISA claim for denial of short-term disability benefits. To begin, the court agreed with Amazon that the tort claims are barred by the LWCA and that they are also facially prescribed because the prescriptive period for torts is one year and the complaint was filed 23 months after the events at issue. The court also dismissed the claim for wrongful denial of long-term disability benefits because Amazon is not the proper party to those claims. Instead, it was clear that Hartford controls administration of the long-term disability policy. However, the court denied Amazon’s motion to dismiss as to the short-term disability benefit claim under ERISA. Amazon argued that Ms. Lennix failed to state a Section 502(a)(1)(B) claim for the denial of short-term disability benefits for two reasons: (1) she does not allege that she exhausted available remedies under the plan, and (2) she does not allege facts establishing that she meets the eligibility requirements for short-term disability benefits under the plan. The court rejected these arguments. It concluded that it was not clear from the face of the complaint that Ms. Lennix failed to exhaust available remedies under the short-term disability policy, and as a result it could not dismiss based on the affirmative defense of ERISA exhaustion. Moreover, the court found that the complaint includes enough facts to allow it to reasonably infer that Ms. Lennix was eligible for short-term disability benefits. In short, the court stated that Amazon’s arguments rely on evidence that it may not properly consider under Rule 12(b)(6) and that resolution of these issues is better suited for a motion for summary judgment.

Seventh Circuit

Ryan v. Hartford Life & Accident Ins. Co., No. 21-cv-592-wmc, 2025 WL 1707056 (W.D. Wis. Jun. 18, 2025) (Judge William M. Conley). Plaintiff Frances Ryan was 56 years old when she filed her claim for long-term disability benefits with Hartford Life & Accident Insurance Company, having worked as an internal medicine physician for 22 years. Dr. Ryan became disabled in 2018 after she suffered an injury to her head while on vacation. Dr. Ryan’s post-concussion symptoms caused her difficulties with complex decision-making, concentration, and memory, and left her dizzy, fatigued, and in pain. In August 2018, Hartford approved Dr. Ryan’s claim for benefits, and the following year the Social Security Administration approved her for disability insurance benefits. In 2020, Hartford terminated Dr. Ryan’s benefits, concluding that she had no cognitive limitations and could continue working in her own occupation. Dr. Ryan appealed that decision, but on May 11, 2021, Hartford affirmed its termination of benefits. Dr. Ryan takes issue with Hartford’s decision. She filed this lawsuit under ERISA Section 502(a)(1)(B) to subject the decision to judicial scrutiny. Dr. Ryan argued that the termination of her benefits was arbitrary and capricious because it did not grapple with her work as an internal medicine doctor or even discuss the essential duties of her profession. Moreover, she maintained that Hartford failed to properly account for the fact that she was awarded Social Security benefits under a more stringent standard than her plan’s “own occupation” disability definition, a standard which requires an inability to engage in any substantial gainful activity altogether. Assessing the parties’ cross-motions for summary judgment under the arbitrary and capricious standard of review, the court was persuaded by Dr. Ryan’s arguments. It agreed with her that Hartford was wrong not to consider the essential duties of her demanding work as a physician, noting that “none of the opinions that defendant relies upon considered plaintiff’s cognitive limitations in the context of her past performance as an internal medicine physician (or even that of a ‘normal’ physician).” Although the court acknowledged that under normal circumstances it is not the role of the court to second guess an administrator’s assessment of conflicting evidence under deferential review, the court nevertheless found this case to be atypical given Dr. Ryan’s “unusually demanding occupation and the shortage of medical opinions relied upon by Hartford specifically addressing her post-injury, cognitive limitations in the context of her past performance as an internal medicine physician.” Further, the court shared Dr. Ryan’s opinion that Hartford failed to adequately consider her award of Social Security benefits in terminating her disability claim. The court agreed with Dr. Ryan that the grant of Social Security benefits supports her position that she could not return to work as an internal medicine physician. The court also noted that Hartford has a structural conflict of interest given its dual role as decision maker and payor of the claim. Given the general lack of opinions considering whether Dr. Ryan was cognitively impaired in the context of her work practicing medicine, Hartford’s conflict of interest, and Dr. Ryan’s Social Security award, the court concluded that the proper course of action was to remand the case to Hartford for further consideration of Dr. Ryan’s present cognitive abilities and other symptoms in light of the necessary performance of a doctor in her field. Accordingly, the court granted Dr. Ryan’s motion for summary judgment and remanded to Hartford for further review consistent with this opinion.

Ninth Circuit

Boykin v. Unum Life Ins. Co. of Am., No. 2:23-cv-01516-TLN-SCR, 2025 WL 1696169 (E.D. Cal. Jun. 17, 2025) (Judge Troy L. Nunley). Plaintiff Samual Boykin is a former maintenance specialist for Valero Services Inc. In 2016, Mr. Boykin applied for long-term disability benefits through his employer-sponsored disability plan insured by Unum Life Insurance Company. Mr. Boykin maintained that he could no longer work as a result of a physical spinal injury and due to various mental health issues. Unum denied his claim for benefits and upheld the denial on appeal. Mr. Boykin then filed a lawsuit under ERISA challenging Unum’s decision. On February 15, 2022, the court found that Mr. Boykin was precluded from performing the duties of his physically demanding occupation under the policy’s “regular occupation” definition of disability, which applied for the first 24 months of benefits. Because Unum had not had the opportunity to consider whether Mr. Boykin was disabled under the “any gainful occupation” definition of disability, the court remanded the remainder of Mr. Boykin’s claim for Unum to make that determination. On remand Unum determined that Mr. Boykin was not disabled from performing any gainful occupation. Mr. Boykin then sought judicial review of this determination. The parties filed cross-motions for judgment under Rule 52. The sole issue was whether Mr. Boykin was disabled from performing the duties of any gainful occupation as of January 14, 2019. In this decision the court found the preponderance of the evidence supported the conclusion that he was, and therefore entered summary judgment in favor of Mr. Boykin and awarded him benefits. Factoring in Mr. Boykin’s medical records and imaging, his self-reports of pain, the Administrative Law Judge’s conclusions during his application for Social Security disability benefits, and the opinions of his treating providers and hired vocational expert, the court concluded that Mr. Boykin’s chronic lower back pain, along with his cognitive and psychiatric symptoms, rendered him unable to perform any relevant work for which he was reasonably qualified. On the other hand, the court accorded less weight to Unum’s reviewing medical consultants and vocational expert, as it found that they provided only “scant analysis” and conclusory explanations for their opinions. Accordingly, the court found that Mr. Boykin was disabled within the meaning of his policy and entitled to continued benefits beyond the January 14, 2019 “own occupation” cutoff.

Discovery

Tenth Circuit

Parker v. TTEC Holdings, Inc., No. 24-cv-03148-DDD-CYC, 2025 WL 1676502 (D. Colo. Jun. 13, 2025) (Magistrate Judge Cyrus Y. Chung). This action involves the tobacco surcharge imposed on the employees of TTEC Holdings, Inc. who participate in the corporation’s health and welfare benefit plan and who use tobacco products. Plaintiff Shemia Parker brings this action on behalf of herself and a putative class, alleging that the tobacco surcharge in the plan violates various provisions of ERISA. Defendants have moved to dismiss the action under both Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). That motion is currently pending. Meanwhile, plaintiffs have served discovery requests on defendants. The defendants have requested that discovery proceedings be stayed until the court rules on the pending motion to dismiss. The matter was assigned to Magistrate Judge Cyrus Y. Chung. In this decision Judge Chung concluded that on balance a stay was warranted and thus granted defendants’ motion. As an initial matter, Judge Chung declined to consider plaintiff’s arguments regarding the merits of defendants’ motion to dismiss, as the motion to dismiss was not referred to him. The Magistrate therefore did not consider this factor in its analysis of whether to grant the stay. Instead, Judge Chung focused his attention on the five String Cheese factors: “(1) plaintiff’s interests in proceeding expeditiously with the civil action and the potential prejudice to plaintiff of a delay; (2) the burden on the defendant[]; (3) the convenience to the court; (4) the interests of persons not parties to the civil litigation; and (5) the public interest.” Beginning with the potential prejudice to Ms. Parker which could result from a delay, the court agreed with Ms. Parker that this factor weighed against a stay, but only slightly. More significant, according to the Magistrate, was the “significant” burden on the defendants if a stay is not granted. Additionally, Judge Chung found that a stay would serve the court’s interest “by avoiding the unnecessary expenditure of the Court’s time and resources while a motion is pending that could resolve this matter in its entirety.” Judge Chung determined that the interests of other parties were neutral, given the fact that the proposed class is not yet certified. Each party also argued that the public’s interest is implicated here. Ms. Parker maintained that the public has an interest in the enforcement of ERISA provisions, while defendants argued that there is a public interest in health-related issues. Judge Chung found both arguments “broad and unspecific.” But he offered his own view on the public’s interest in this case, which he concluded “is in an efficient and just resolution.” Based on this understanding of the public’s interest, the Magistrate Judge determined that this factor too weighed in favor of a stay. Accordingly, Judge Chung found that good cause exists to impose a stay of discovery at this time until the court rules on the pending motion to dismiss.

ERISA Preemption

First Circuit

Orabona v. Santander Bank, N.A., No. 24-1905, __ F. 4th __, 2025 WL 1682819 (1st Cir. Jun. 16, 2025) (Before Circuit Judges Gelpí, Lynch, and Thompson.) Plaintiff-appellant Lorna Orabona was a successful mortgage development officer working at Santander Bank, N.A. In 2022, the bank fired Ms. Orabona for allegedly violating its code of conduct by forwarding company email to her private email address. As a result of her termination, Ms. Orabona was deemed ineligible for severance benefits under Santander’s ERISA-governed severance plan. The gravamen of Ms. Orabona’s lawsuit is that a severance payout to her would have been significant and so the bank fraudulently advised her she was terminated for cause to deprive her of benefits. Ms. Orabona points to the fact that one week after she was terminated Santander announced large-scale layoffs. Notably, Ms. Orabona did not apply for benefits under the severance plan or pursue its administrative procedures. Nor did she sue under ERISA. Instead, Ms. Orabona asserted state law causes of action against her former employer. In response, the bank moved for summary judgment, arguing that all of her state law claims were preempted by ERISA because they could not be resolved without reference to the plan for determining liability and damages. The district court agreed and entered judgment in favor of Santander. Ms. Orabona appealed. The First Circuit agreed entirely with the district court’s preemption analysis. The First Circuit stressed that Ms. Orabona’s state law claims could not be addressed without consulting the severance policy and interpreting its terms. The court of appeals held that Ms. Orabona’s claims were preempted under both Section 514(a) and Section 502(a), as they related to the severance policy and sought relief for alleged interference and retaliation resulting in the denial of severance benefits that conflicts with the remedial scheme established by ERISA Section 510. In sum, the appeals court agreed with the district court that Ms. Orabona’s lawsuit attempted a workaround to ERISA preemption, which was not allowed because she sought benefits from the ERISA-governed plan and challenges the conduct of the fiduciary of the plan. “In short, Orabona could have, but chose not to, file a claim for benefits under the Severance Policy, appeal any denial of benefits, and file a legal claim under ERISA. She may not now file state law claims which ‘supplant[] the ERISA civil enforcement remedy.’” Thus, the First Circuit affirmed the decision of the district court.

Exhaustion of Administrative Remedies

Seventh Circuit

Waddles v. Metropolitan Life Ins. Co., No. 1:23-CV-00220-GSL, 2025 WL 1724454 (N.D. Ind. Jun. 20, 2025) (Judge Gretchen S. Lund). Plaintiff Ronald Waddles began receiving long-term disability benefits from defendant Metropolitan Life Insurance Company (“MetLife”) in May 2017, after a work injury left him disabled. In 2018, MetLife learned that Mr. Waddles had received retroactive Social Security Disability benefits and thus MetLife had overpaid him under the terms of the plan. It then started recouping the overpayment by reducing Mr. Waddles’ long-term disability payments. Additionally, MetLife sent Mr. Waddles a series of requests for updated information on his disability, and when he did not respond to any of them, rescinded his benefits. “In 2023, Plaintiff brought this action asserting that any overpayment he received from Defendant has been completely satisfied, that he is entitled to long-term disability payments, and that Defendant is wrongfully withholding an overpayment reimbursement. He requests that the Court determine (1) ‘the date under the disability contract that any overpayment has been paid in full,’ and (2) ‘that the overpayment under the contract was completely satisfied’ and that money is owed to him.” Mr. Waddles further argued that because MetLife’s medical consultants concluded that his limitations “should be expected to be permanent,” he no longer needed to submit continuing proof of disability, and by extension that the decision to terminate benefits was improper. Notably, Mr. Waddles did not contest the fact that he did not request an administrative appeal upon the termination of his benefits. Given this fact, MetLife moved for summary judgment, arguing in large part that Mr. Waddles failed to exhaust his administrative remedies, barring his lawsuit. The court agreed with MetLife that in the Seventh Circuit Mr. Waddles’ uncontested failure to exhaust administrative renders him unable to file his ERISA benefits suit. Even putting aside the exhaustion issue, however, the court expressed that “no case law or regulation” supports the proposition that the plan’s requirement for continued proof of disability is improper when the disability is likely permanent. The court further noted that Mr. Waddles did not argue that MetLife’s letters warning him his benefits would be terminated without such proof were in any way defective. “As for the overpayment issue, Plaintiff admits to Defendant’s calculation that Plaintiff owes $12,580.58 in overpayment, and he does not dispute that he signed an agreement to reimburse overpayments.” The court thus concluded that there were no genuine issues of material fact. For these reasons, the court granted MetLife’s motion for summary judgment and entered judgment against Mr. Waddles.

Medical Benefit Claims

Tenth Circuit

J.H. v. United Behavioral Health, No. 2:23-cv-00190-JNP-CMR, 2025 WL 1684350 (D. Utah Jun. 16, 2025) (Judge Jill N. Parrish). The plaintiffs in this action are the parents of a daughter who was suffering from mental health and substance use disorders during part of 2020 and 2021 and who have sued United Behavioral Health for its denial of their claims for reimbursement for their daughter’s treatment in a residential facility during that period. United’s denial letters, sent during a two-level internal appeals process, were largely incomprehensible, were internally inconsistent, and frustratingly ignored the family’s arguments. Dissatisfied by these letters, the parents pursued litigation under ERISA. The parties filed cross-motions for summary judgment under the arbitrary and capricious standard of review. In this decision the court granted the parents’ motion for summary judgment, but disagreed with them in part on the appropriate remedy. The court stated that “the record establishes that United’s decision to deny benefits was arbitrary and capricious. United failed to engage in anything resembling a meaningful dialogue in explaining its decisions, and no reasonable beneficiary in J.H.’s shoes could have been expected to understand its reasoning or decision-making process from its appeal-decision letters.” By way of example, the court noted that the level-one appeal denial letter did not specify which dates during the claim period were approved and which were denied, and by extension “provided the parents no practical way of knowing which reason applied to which claims – something they would have needed to know if they wanted to try to perfect their claims on second appeal.” United argued that it was the parents’ burden to seek clarification themselves and figure out which reasons were used to deny coverage for which dates. The court strongly disagreed. It stressed that ERISA required United to provide adequate notice in writing clearly setting forth the specific reasons for the denial so that the family could understand them. “That is, to satisfy its fiduciary obligations to the parents, the administrator had to put these details in the letter itself, which it did not do.” United’s argument, the court added, “essentially tells the parents to pick up United’s slack and do its work for it by poring through the record and figuring out why certain claims were denied – far from an easy task. Indulging the argument would turn ERISA’s principles upside down.” And although the level-two appeal denial letter listed the specific dates for which coverage decisions were either overturned or upheld, the court agreed with the family that it was otherwise not much improved from the earlier communications. Moreover, United entirely ignored the points the parents advanced in their letter. Taken together, the court found the deficiencies in United’s claims handling, resulting in communications that were not anything close to a meaningful dialogue, left the family to figure out for themselves how different policies applied to their claims and why United made the decisions it did. “Based on the dearth of reasoning in the appeal decision letters, plus the internal inconsistencies and erroneous assumptions contained in them, the court determines that United’s decision-making was arbitrary and capricious.” Accordingly, the court entered judgment in favor of the family. The court was then tasked with determining what remedy was appropriate. The family advocated for the court to award benefits outright for all claims from 2020 and to remand the claims from 2021 to United. Ultimately, the court concluded that despite the flaws in remanding, its hands were tied because the Tenth Circuit has held that remand is the appropriate remedy when the administrator fails to adequately explain the grounds for the decision – the exact flaw at issue here. “Ultimately, United’s error was that ‘in denying Plaintiffs benefits, … [it] failed to explain adequately why it denied Plaintiffs’ claims[] and failed to engage adequately with Plaintiffs.’ So, ‘the most appropriate remedy is to remand Plaintiffs’ claims to [United] for its further, and proper, consideration.’” Nevertheless, the court reminded United that it could not adopt any new grounds for denial on remand that it did not advance originally, and warned that it would treat any future failure to respond adequately and thoroughly to the family’s concerns and arguments during the remand process as grounds to grant all unpaid claims for benefits as a sanction for failure to follow its instructions.

Pension Benefit Claims

Ninth Circuit

Liao v. Fisher Asset Management, LLC, No. 24-cv-02036-JST, 2025 WL 1696556 (N.D. Cal. Jun. 16, 2025) (Judge Jon S. Tigar). Plaintiff Frank Liao worked for Fisher Asset Management LLC for two years and was a participant in Fisher’s 401(k) Plan. Because he did not work at the company for very long, Fisher’s matching contributions had not yet vested when Mr. Liao left. At the time he left in July 2011, the amount of Fisher’s contribution totaled about $26,000. Strangely though, it was not until December 2023 that Fisher directed Schwab to liquidate the unvested employer contributions and their earnings from Mr. Liao’s account, which had increased over time to $245,000. In this action Mr. Liao contends that the withdrawal of the post-July 2011 earnings on the unvested employer contributions violated the terms of the plan and ERISA. He asserts claims for benefits, breach of fiduciary duty, and prohibited transaction. The court previously granted Fisher’s motion to dismiss all of Mr. Liao’s claims. He then amended his complaint. Fisher then moved to dismiss the amended complaint. The court granted that motion and dismissed all claims without leave to amend in this order. First, the court dismissed the claim for benefits under Section 502(a)(1)(B), agreeing with Fisher that none of the sections of the plan cited by Mr. Liao gave him any retained interest in the forfeited funds. By not identifying any provision of the plan, or any other authority, that entitles him to the post-2011 earnings on the unvested funds, the court dismissed the claim for benefits. Likewise, the court dismissed the fiduciary breach claims under Sections 502(a)(2) and (a)(3), which were similarly premised on a violation of the terms of the plan by forfeiting funds in excess of what the plan unambiguously authorized. Mr. Liao’s prohibited transaction claim fared no better. The court concluded that the complaint failed to plausibly allege any prohibited transaction because it claimed Fisher used the forfeitures to defray plan expenses, which courts have found not to be a prohibited transaction under 1106(a). Based on the foregoing, the court granted the motion to dismiss, this time dismissing the claims with prejudice.

Pleading Issues & Procedure

Third Circuit

Batista v. AT&T Inc., No. 24-cv-8503 (JXN)(MAH), 2025 WL 1693893 (D.N.J. Jun. 17, 2025) (Judge Julien Xavier Neals). Pro se plaintiff Joshua Batista is a former employee of AT&T’s mobility department and a participant in its various retirement savings plans. In his complaint Mr. Batista alleges that the company has unjustly enriched itself by mishandling his accounts receivable and improperly crediting dividend payments to his account each month. Mr. Batista asserts claims of breach of contract, breach of fiduciary duty (under both state law and ERISA), and eight causes of action under numerous federal criminal statutes including claims of forced labor and slavery, money laundering, transportation of stolen securities, and securities and commodities fraud. AT&T moved to dismiss the complaint for lack of personal jurisdiction and for failure to state a claim. Its motion was granted by the court in this decision. As an initial matter, the court agreed with AT&T that the complaint fails to adequately allege facts establishing the court’s jurisdiction over AT&T. Notwithstanding the court’s lack of personal jurisdiction over AT&T, the court also considered whether Mr. Batista set forth any viable claims. It agreed with AT&T that he did not. First, the court dismissed the breach of contract claim because the complaint fails to identify any contract or contractual provision that would require AT&T to accept an endorsed remittance coupon as legal tender. The court dismissed the breach of contract claim without prejudice. With regard to the breach of fiduciary duty claim, the court agreed with AT&T that the complaint fails to adequately allege facts demonstrating a fiduciary relationship between Mr. Batista and AT&T. Further, to the extent Mr. Batista attempted to assert a breach of fiduciary duty claim under ERISA, the court held that the complaint could not survive the motion to dismiss because the complaint does not identify any specific plan provisions entitling payment of benefits. “Without specifying any terms of the plan that were purportedly violated, the claim fails.” Like the breach of contract claim, the breach of fiduciary duty claim was dismissed without prejudice. Finally, the court dismissed the claims under the federal criminal statutes. The court dismissed the claims of money laundering, transportation of stolen securities, and securities and commodities fraud with prejudice as these statutes do not provide for a private right of action and must be brought by the United States in a criminal action. The remaining claims of peonage, enticement into slavery, sale into involuntary servitude, and forced labor were dismissed without prejudice. The court stated that to the extent a private right of action exists under these statutes, the complaint does not allege facts sufficient to state plausible claims under them because it does not allege facts sufficient to establish that AT&T subjected Mr. Batista to any type of compulsory service. For these reasons, the court granted AT&T’s motion to dismiss in its entirety.

Statute of Limitations

Second Circuit

Prestige Institute for Plastic Surgery v. Aetna Life Ins. Co., No. 3:23-cv-0940 (VAB), 2025 WL 1720473 (D. Conn. Jun. 20, 2025) (Judge Victor A. Bolden). This lawsuit was originally filed by a plastic surgery center seeking payment from Aetna Life Insurance Company for two reconstructive breast surgeries that its providers performed on the patient, Jennifer Reese. However, on September 30, 2024, the court dismissed all claims filed by the plastic surgery institute with prejudice, and allowed the patient, Ms. Reese, to move for leave to amend to the extent she could bring ERISA claims directly in substitution for the provider. On October 24, 2024, Ms. Reese filed a motion for leave to amend with a proposed amended complaint asserting three claims: (1) a claim for benefits under Section 502(a)(1)(B); (2) a claim for breach of fiduciary duty under ERISA; and (3) failure to establish a summary plan description that complies with the requirements of ERISA. Defendants opposed the motion for leave to amend. They argued that Ms. Reese’s proposed amendments are futile because the claims are time-barred under the plan’s three-year statute of limitations, and because the amended complaint does not relate back to the original complaint under Federal Rule of Civil Procedure 15(c)(1). At this time the court did not decide whether the amended complaint relates back to the original complaint. Instead, it focused its discussion on whether the claims are time-barred under the plan. Ultimately, the court did not conclusively say one way or the other. As an initial matter, the court agreed with defendants that the breach of fiduciary duty claim is really a claim for benefits in disguise and therefore not subject to ERISA’s six-year statute of limitations for fiduciary breach claims. The question then became whether the plan’s limitation period was enforceable. Ms. Reese argued that it was not because it was not properly disclosed to her. In the end, the court concluded that discovery is needed to resolve the issue of notice, and by extension whether any of Ms. Reese’s claims are precluded. “As a result, leave to amend the Complaint, limited discovery on this critical issue, i.e., the deposition on this issue alone of Ms. Reese and any key person or persons responsible for, or with sufficient knowledge about, the distribution of the relevant plan documents to her, and, if appropriate, leave to file an early summary judgment motion, can and should be permitted.” In the meantime, the court granted Ms. Reese’s motion for leave to amend, and instructed the parties to engage in limited discovery consistent with this ruling.

Venue

Tenth Circuit

Daniel F. v. United Healthcare Ins. Co., No. 2:24-cv-00764-TC-DBP, 2025 WL 1684356 (D. Utah Jun. 17, 2025) (Judge Tena Campbell). Plaintiffs Daniel and Kristy F. seek an award of benefits under an employer-sponsored healthcare plan and damages under the Mental Health Parity and Addiction Equity Act in connection with United Healthcare’s denial of coverage for their child’s mental healthcare treatment at residential facilities located in Colorado and Arizona. Plaintiffs’ only connection to Utah is their attorney. The family lives in the State of Washington, United is incorporated in Connecticut, and the plan is administered in Texas. Given the very tangential connection to the District of Utah, United moved to transfer the case to the Western District of Washington. Plaintiffs did not oppose. In this brief order the court granted the motion to transfer, agreeing that Washington is a superior forum to handle this dispute and more convenient for the parties. In sum, the court found the interest of justice is served by transferring this case to the district in which the family resides, and therefore granted the unopposed motion seeking to do so.