Platt v. Sodexo, S.A., No. 23-55737, __ F.4th __, 2025 WL 2203415 (9th Cir. Aug. 4, 2025); Avecilla v. Live Nation Entertainment, Inc., No. 23-55725, __ F. App’x __, 2025 WL 2206153 (9th Cir. Aug. 4, 2025) (Before Circuit Judges Friedland and Desai, and District Judge Karen E. Schreier)

In these two cases the Ninth Circuit, like so many circuit courts before it, tackled the interplay between arbitration and ERISA. Both appeals addressed the same issues, and rather than write two nearly identical decisions, the court elected to issue a longer published opinion in Platt while referencing that ruling in a shorter companion memorandum in Avecilla. As a result, in order to simplify things, we’ll limit our analysis to the Platt decision.

The plaintiff was Robert Platt, an employee of Sodexo, Inc., the food services and facilities management company. He filed suit against Sodexo, alleging that its imposition of a monthly tobacco surcharge on his employee health insurance premiums violated ERISA. He brought class action claims under two provisions. First, Platt alleged that the plan violated § 502(a)(3) because it failed to provide a “reasonable alternative standard” for plan participants to avoid paying the surcharge, and did not provide notice of such a standard. Second, Platt asserted a class claim under § 502(a)(1)(B) for violating the plan in implementing the tobacco surcharge. Finally, Platt alleged a breach of fiduciary duty claim under § 502(a)(2) on behalf of the plan.

Sodexo moved to compel arbitration based on a provision that it had unilaterally added to the plan in 2021. The district court denied Sodexo’s motion on two grounds. First, it ruled that the plan did not allow Sodexo to unilaterally add the arbitration provision. Second, it ruled that Platt, who had become a plan participant in 2016, i.e., before the amendment, had never agreed to arbitration. In so ruling the district court dodged other arguments made by Platt, which included that the plan’s arbitration agreement was unenforceable because it violated the effective vindication doctrine and because parts of it were unconscionable. (Your ERISA Watch covered the district court’s ruling in our August 2, 2023 edition.)

Sodexo appealed. The Ninth Circuit agreed with some of the district court’s rulings, and disagreed with others, but the result was largely a win for Platt and his fellow employees.

First, the Ninth Circuit noted that in order to compel arbitration, there must be a valid agreement between the parties in which both sides consent to arbitration. Sodexo argued that consent was unnecessary because ERISA allows plan administrators the freedom to amend plans as they wish, including the addition of arbitration provisions. However, the Ninth Circuit ruled that ERISA does not address arbitration and thus refused to interpret ERISA in a way that would displace ordinary arbitration rules, including the necessity of consent.

Because consent was required, the Ninth Circuit next asked who the relevant consenting parties were. For Platt’s claims under § 502(a)(1)(B) and § 502(a)(3), the court ruled that Platt was the relevant party. After all, Platt had alleged that he and other plan participants had been forced to pay an illegal fee because of the plan’s unlawful tobacco surcharge provision, and thus they had been harmed and were required to give consent to arbitration.

The court further ruled that Platt had not agreed to arbitration. Sodexo contended that because Platt continued participating in the plan after Sodexo added the arbitration provision, Platt had effectively consented to the provision. However, Platt did not recall receiving notice of a 2021 summary of material modifications explaining the amendment, and Sodexo could not produce the email it claimed it had sent to Platt which included a copy of that summary. The best Sodexo could do was produce an email to Platt in 2022 which included a hyperlink to the new summary plan description which included the arbitration provision. However, the provision was buried on page 153 of a 170-page document.

The court ruled that these communications “did not provide sufficient notice of the arbitration provision… It is unreasonable to expect that Platt would notice a new arbitration provision hidden in a lengthy document.” Furthermore, “the 2022 email contained no express language that Sodexo was adding the new arbitration provision or that his continued participation in the Plan constituted consent or agreement to the new provision.” Even if Sodexo’s communications had been satisfactory, the court ruled there still was insufficient notice to establish consent. There was no evidence that Platt had given “some indication of assent to the contract.” As a result, “the arbitration provision is unenforceable as to his § 502(a)(1)(B) and § 502(a)(3) claims.”

The court’s analysis differed when it came to Platt’s § 502(a)(2) claim, however. On that claim, the court concluded that the plan was the relevant consenting party, not Platt. This was because Platt brought this claim in a representative capacity on behalf of the plan. In his claim he sought redress on behalf of the plan for losses the plan incurred from Sodexo’s alleged fiduciary breaches and for profits that Sodexo improperly obtained using plan assets. The court easily found that the plan had consented to arbitration: “Because the terms of the Plan expressly cede broad authority to Sodexo to amend its terms, a reasonable person would believe that the Plan consented to the arbitration provision that was added by Sodexo.”

However, Sodexo was not out of the woods. Platt argued that even if the plan consented to the arbitration provision, it was still invalid under the effective vindication doctrine. The court agreed. The Ninth Circuit noted that § 502(a)(2) authorizes plan participants to bring actions for relief on behalf of the plan. However, the plan’s arbitration provision contained a representative action waiver “which expressly precludes Platt from bringing claims in a representative capacity on the Plan’s behalf.” Because this provision precluded Platt from obtaining plan-wide relief explicitly authorized by ERISA, it prevented him from “effectively vindicating” his rights under ERISA, and thus it was unenforceable. The Ninth Circuit added that this conclusion was consistent with the decisions of other circuit courts which had applied the effective vindication doctrine. (For further background on the doctrine, feel free to read Your ERISA Watch’s analyses of similar decisions from the Sixth, Seventh, and Tenth Circuits.)

The Ninth Circuit also ruled that Platt’s unconscionability arguments were viable. Sodexo contended that those arguments were rooted in California state law, and thus could not be used in an ERISA case, which of course is governed by federal law. However, the Ninth Circuit agreed with Platt that his unconscionability arguments were federal in nature. After all, the Federal Arbitration Act allows “generally applicable contract defenses, such as fraud, duress, or unconscionability” to invalidate arbitration agreements. Thus, Platt was free to allege such defenses under federal common law, “borrowing from state law where appropriate, and guided by the policies expressed in ERISA and other federal labor laws.” The court did not opine as to whether any of the provisions identified by Platt were unconscionable or not, or whether the unlawful representative action waiver could be severed from the rest of the arbitration provision, leaving that to the district court for further consideration.

As a result, the Ninth Circuit concluded that (a) “no arbitration agreement exists between Platt and Sodexo for the ERISA § 502(a)(1)(B) and § 502(a)(3) claims because Platt did not consent to arbitration,” (b) “a valid arbitration agreement may exist between the Plan and Sodexo for the ERISA § 502(a)(2) claim because the Plan consented,” (c) “Platt may raise unconscionability defenses to arbitration under federal common law,” and (d) “the representative action waiver in the arbitration agreement violates the effective vindication doctrine.” Having affirmed in part and reversed in part, the Ninth Circuit thus remanded the case to the district court to sort out the issues with its new instructions.

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

Attorneys’ Fees

First Circuit

Jackson v. New England Biolabs, Inc., No. 23-12208-RGS, 2025 WL 2256261 (D. Mass. Aug. 7, 2025) (Judge Richard G. Stearns). Plaintiffs Melissa Jackson and Marta Meda filed this class action against New England Biolabs, Inc. and the other fiduciaries of the company’s employee stock ownership plan, alleging that defendants violated ERISA in the valuation of the company’s stock and through a 2019 amendment that set new methods for establishing the price paid for New England Biolabs stock which allegedly did not reflect the stock’s fair market value. On April 3, 2024, the court “dismissed the claims challenging the 2019 amendment and allowed the claims challenging the valuation to proceed.” The court then directed the parties to begin mediation. In April of 2025, the parties reached a formal settlement agreement, agreeing to a settlement fund worth $7,150,000. The court preliminarily approved the terms of the settlement and scheduled a fairness hearing for August 6, 2025. Before the court here was plaintiffs’ motion for attorneys’ fees, costs, expenses, and service awards to the two class representatives. In this order the court granted the fee motion, but awarded fees that were lower than what plaintiffs requested. The court tackled the motion for attorneys’ fees first. Plaintiffs’ counsel sought an award of attorneys’ fees equivalent to 25% of the settlement fund, approximately $1,787,500. The court determined that “a fee of 20% of the settlement fund [i]s a reasonable percentage, translating into an award of $1,430,000.” The court took time to recognize the complexity of this litigation and the substantial benefit counsel achieved for the class. It also stated that it wished to encourage efforts to bring cases to a prompt and just conclusion through successful mediation. Nevertheless, the court determined that there were certain factors present which offset these positives, including its dismissal of the claims relating to the 2019 amendment and the fact that no formal discovery took place. It concluded these factors warranted a slight downward adjustment of the fee request, hence the decision to adjust the common-fund award down to 20%. The court then assessed plaintiffs’ request for reimbursement of $17,445.31 in litigation expenses and $5,356 in settlement administration expenses. The court awarded these requested amounts in full, as it found them reasonable and appropriately documented. Finally, the court discussed the motion for class representative service awards. Ms. Jackson and Ms. Meda requested service award payments of $20,000 each. The court awarded them $15,000 each instead. It applauded plaintiffs for the risks they undertook bringing this action and for the time and effort they each spent representing the class. However, the court found that because neither sat for a deposition or participated in any formal discovery, a slight downward adjustment was appropriate, and more in line with other awards granted in the First Circuit. For these reasons, the court granted plaintiffs’ motion for attorneys’ fees, expenses, and class representative service awards, but not in the full amounts plaintiffs had hoped for.

Breach of Fiduciary Duty

Ninth Circuit

Wit v. United Behavioral Health, No. 14-cv-02346-JCS, 2025 WL 2227681 (N.D. Cal. Aug. 5, 2025) (Magistrate Judge Joseph C. Spero). Readers of Your ERISA Watch, even casual ones, are likely at least somewhat familiar with this long-running class action alleging that United Behavioral Health violated ERISA through its design and implementation of its own internal mental health guidelines that plaintiffs claim were unreasonable and inconsistent with generally accepted standards of medical care. For those of you who aren’t familiar with this case, suffice it to say that both sides have had their victories and defeats over the past 11 years. Indeed, both sides experienced some success and some failure in this most recent decision too, which was issued on remand following the Ninth Circuit’s fourth ruling in this matter. As the district court presented it, there were two issues to address on remand: (1) identifying any surviving aspect of the breach of fiduciary duty claim that was not based on the district court’s erroneous interpretations of the plans, and (2) assuming some part of the fiduciary breach claim survives, answering the threshold question of whether the fiduciary duty claim is subject to the exhaustion requirement. The parties each presented their own “all-or-nothing positions” on these two issues. Plaintiffs asserted that the court had not relied on any misinterpretation of the plan in support of its judgment on the breach of fiduciary duty claim, and therefore the claim survives the Ninth Circuit’s decision in its entirety. Plaintiffs also argued that exhaustion is not required for fiduciary breach claims. United Behavioral Health asserted that the fiduciary breach claim is essentially identical to the denial of benefits claims and thus the court is required to enter judgment in its favor on the claim. Further, United Behavioral Health argued that plaintiffs were required to exhaust administrative remedies before bringing their fiduciary breach claim. The court found that both sides’ positions on the question of what exactly survives of the fiduciary breach claim “deviate from the Panel’s holdings in Wit III and Wit IV.” The court stressed that while it had “no doubt that the Panel reversed [its] judgment on the breach of fiduciary duty as to at least some portion of that claim,” it was nevertheless unpersuaded by United’s argument that it was required to enter judgment in its favor on the whole of the claim. It noted that the panel could have adopted United Behavioral Health’s position in Wit III and Wit IV and instructed the court to enter judgment on the fiduciary breach claim, as it did with to the denial of benefits claim, but it did not do so. Thus, the court was left to parse what exactly of the fiduciary breach claim survived. It found its answer by splitting the claim into two distinct types of breach of fiduciary duty: a breach claim based on the application of the guidelines to the class members’ claims and a breach of the duty of loyalty and care based on the separate conduct of adopting the guidelines in the first place, which was done in order to serve its own financial self-interest. The court additionally clarified that it had recognized in its summary judgment order that plaintiffs “satisfied the harm element of their breach of fiduciary duty claim based on two kinds of harm: ‘the denial of their rights to Guidelines that were developed for their benefit and to a fair adjudication of their claims.’” Reading the Ninth Circuit’s decisions closely, the court came to the conclusion that “because the breach of fiduciary duty claim based on failure to adhere to plan terms implicates the application of the Guidelines to class members’ individual claims for benefits, that portion of the breach of fiduciary duty claim is intertwined with the error that the Panel found required reversal as to the denial of benefits claim. Therefore, the Court finds that the judgment it entered on the breach of fiduciary duty claim has been reversed with respect to the alleged breach based on failure to adhere to plan terms. On the other hand, the Court’s findings as to the breach of the duty of care and the duty of loyalty are not intertwined with the erroneous interpretation of the Plans identified by the Panel and therefore, the Court’s judgment on the breach of fiduciary duty claim survives to the extent that it is based on those theories.” The court then discussed whether the fiduciary duty claim is subject to the exhaustion requirement. It agreed with plaintiffs that it is not. The court stated, “Plaintiffs’ breach of fiduciary duty claim is based on ‘willful and systematic’ conduct, namely, adoption of Guidelines – ostensibly to implement the plans’ common [generally accepted standards of care] precondition – that were overly restrictive and put profits before the interests of plan beneficiaries. This conduct affected plan beneficiaries across-the-board and violated statutory requirements of ERISA, namely, the duties of loyalty and care under 29 U.S.C. §§ 29 USC § 1104(a)(1)(A) & (B).” Based on this understanding, the court found that the portion of the fiduciary breach claim that survived Wit III and Wit IV is a statutory claim for breach of fiduciary duty under ERISA, and not a disguised claim for benefits that would be subject to exhaustion. In the alternative, the court also concluded that the exhaustion of the surviving portion of the breach of fiduciary duty claim is excused based on its finding of futility. It wrote, “exhaustion would have been futile because [defendant’s] administrative appeal process required that the same Guidelines be applied to the appeal as were used to deny benefits. In other words, Plaintiffs who pursued administrative remedies under the plan would not have been able to challenge the conduct upon which the breach of the duties of loyalty and care are based, namely, [United Behavioral Health’s] adoption of Guidelines based on its own financial interest and not solely in the interest of plan participants.” For these reasons, although neither party came out entirely victorious here, plaintiffs at least maintain their fiduciary breach claim in some form and no longer have the issue of exhaustion hanging over their heads. The decision concluded with the court ordering the parties to meet and confer regarding next steps in this case. Thus, while we observers might be at our wits’ end with this case, Wit itself is still not at an end.

Tenth Circuit

Middleton v. Amentum Parent Holdings, LLC, No. 23-CV-2456-EFM-BGS, 2025 WL 2229959 (D. Kan. Aug. 5, 2025) (Judge Eric F. Melgren). Plaintiffs Jay Middleton and George A. Lawrence bring this putative class action on behalf of themselves, a proposed class, and the Amentum 401(k) Retirement Plan and the DynCorp International Savings Plan alleging that the fiduciaries of the two retirement plans have breached their duties of prudence, loyalty, and monitoring, engaged in prohibited transactions, and violated ERISA’s anti-inurement provision. Plaintiffs’ allegations fall into two categories: one addressing the use of forfeited employer contributions, and the other pertaining to the selection and retention of costly and poorly performing investment options. Defendants moved to dismiss, asserting plaintiffs failed to state a claim. In this decision the court dismissed the forfeiture claims, but basically let the investment claims proceed. Contrary to defendants’ arguments, the court found that for the most part the complaint plausibly alleges “that Defendants (1) failed to utilize the lowest-cost share class versions of several of the funds offered by the Plan; (2) failed to replace certain T. Rowe Price mutual funds with substantially identical, but much less expensive, collective investment trust (‘CIT’) versions of the same funds; (3) selected and retained high-cost, single asset investment options that were more expensive than substantially similar alternative options; and (4) failed to replace index funds with less expensive versions of funds that track the same index.” The court was mostly satisfied that plaintiffs compared the challenged investment options to benchmarks that were similar in terms of investment strategy, design, and risk. The one exception to this holding involved the actively managed funds versus the passively managed funds. The court agreed with defendants that “actively managed funds cannot be meaningfully compared to the passively managed funds because they are fundamentally different.” Accordingly, the court granted the motion to dismiss this small subset of investment claims, but otherwise concluded that the claim was adequate. The forfeiture causes of action were a different story. The court rejected these claims across the board. Although it determined that plaintiffs were alleging fiduciary acts relating to the use of the forfeited funds, it nevertheless concluded that the use of the forfeitures satisfies ERISA’s fiduciary mandates, plaintiffs cannot create a new benefit for themselves out of thin air, and the claims “flout established law.” The court accordingly dismissed the fiduciary breach claims as they relate to the use of the forfeited contributions. As for the prohibited transaction claims, the court found that using the forfeited funds as a substitute for future employer contributions could not constitute a prohibited transaction because the funds remained in the plan, the plans remained funded, and the plan participants suffered no harm. Finally, the court brushed aside the notion that the defendants benefitted from their chosen use of the forfeitures, stressing instead that the participants continued to receive the benefits. The allegations plaintiffs made in their complaint, the court found, therefore could not state a claim that defendants violated ERISA’s anti-inurement provision. For these reasons, the court dismissed all claims relating to the defendants’ use of forfeitures. Finally, the court denied plaintiffs’ request for leave to amend their complaint, stating they did not “indicate how they would remedy any deficiencies and instead appear to seek an advisory ruling by the Court as to the shortcomings in their allegations.” Thus, as explained above, defendants’ motion to dismiss was granted in part and denied in part, and plaintiffs were left with their investment claims only.

Discovery

Third Circuit

Choi v. Unum Life Ins. Co. of Am., No. 24-06338-JKS-AME, 2025 WL 2234903 (D.N.J. Aug. 6, 2025) (Magistrate Judge Andre M. Espinosa). Plaintiff Katie Choi filed this action under Section 502(a)(1)(B) of ERISA to challenge Unum Life Insurance Company of America’s decision to terminate her long-term disability benefits in the summer of 2023. Before the court here was Ms. Choi’s motion to compel discovery wherein she sought broad production relating to Unum’s conflict of interest in the handling of her disability claim. “Among other things, the discovery requests seek to explore Unum’s compensation and performance evaluations of those benefits specialists, directors, and other individuals involved in her LTD benefits claim review; financial metrics, recovery and claim closing targets, and other claims administration data Unum maintains; and information concerning the file-reviewing physicians’ other work for Unum, in particular, their record of involvement with claims that are denied. Plaintiff also wishes to depose the Unum disability benefit specialist who denied her claim for LTD benefits, the director who oversaw that denial, and Dr. Greenstein.” The court was antagonistic to Ms. Choi’s discovery requests. She asserted that there was reasonable suspicion of Unum’s misconduct in the handling of her claim because Unum has a long and persistent history of biased claims administration, employs systems designed to promote its financial goals over fair evaluation of claims, and has an established pattern of exclusively relying on the opinions of its retained physicians. The court rejected each of these contentions in turn. To begin, the court held that Ms. Choi’s reliance on Unum’s longstanding practice of administering claims in an improper manner fell short of demonstrating that there was misconduct specifically in the administration of her claim. Moreover, the court conveyed that it viewed her “conclusions about persistent and systemic misconduct [as] wildly speculative” and “insufficient to permit conflict of interest discovery.” Similarly, the court rejected Ms. Choi’s claim that Unum maintains denial targets and improperly prioritizes profits by encouraging claims denials. Rather, the court saw Unum’s tracking of claims resolution data as unremarkable given its business model. And again, the court stressed that Ms. Choi could not concretely tie these accusations of misconduct to the denial of her own claim. Finally, the court considered Ms. Choi’s assertion that Unum employs a company-wide practice of deciding claims by exclusively relying on the opinions of the medical professionals it hires. The court noted that this argument was rooted in the administrative record of Ms. Choi’s claim, but stated that “the trouble with permitting discovery based on Plaintiff’s critique of the soundness of Dr. Greenstein’s report is that it appears to go to the merits of her ERISA claim, not to any alleged bias or conflict of interest that impacted Unum’s denial of Plaintiff’s claim for LTD benefits.” In sum, the court stressed that opening extra-record discovery in ERISA cases should be done only in very limited circumstances, and here Ms. Choi could not persuasively link some indication of bias or misconduct to the adverse outcome of her claim in a manner that justified granting her discovery requests. Accordingly, the court denied Ms. Choi’s motion to compel discovery.

ERISA Preemption

Sixth Circuit

Laurel Hill Management Services, Inc. v. La-Z-Boy Inc., No. 24-13230, 2025 WL 2231041 (E.D. Mich. Aug. 4, 2025) (Judge David M. Lawson). Plaintiffs are several medical providers that sued La-Z Boy, Inc. in California state court after La-Z Boy’s self-funded ERISA health benefit plan paid less than $1,600 toward their submitted claims totaling more than $342,000 for medical services they provided to a patient who was a beneficiary of the plan. As detailed in their complaint, plaintiffs allege that during pre-service communications with plan representatives they were assured that after the patient paid a $1,100 deductible, services would be covered at the usual and customary rate. Plaintiffs maintain that the amount they were paid came nowhere near usual and customary reimbursement rates. As a result, they initiated legal proceedings in state court asserting claims of negligent misrepresentation and promissory estoppel. Defendant removed the case to federal court on the ground that the state law claims are preempted by ERISA. The case was subsequently transferred to the Eastern District of Michigan. La-Z Boy then filed a motion to dismiss the state law claims, arguing they are expressly preempted by Section 514(a) of ERISA. Because the court agreed that the claims relate to La-Z Boy’s ERISA-governed welfare plan, the court granted the motion to dismiss and dismissed the action with prejudice. The court took note of the fact that the Sixth Circuit has repeatedly held that negligent representation, promissory estoppel, and breach of contract claims based on allegedly underpaid or unpaid benefits “are ‘at the very heart of issues within the scope of ERISA’s exclusive regulation,’ thus warranting preemption.” In essence, the court concluded that the providers’ claims that they were misled about the amounts and rates of payments they could expect for the medical care they provided to the beneficiary necessarily related to the medical benefit plan because “defendant could have no other obligation to pay for the cost of medical care for the employee otherwise.” The providers’ state law claims, the court found, come at the very heart of issues exclusively within the scope of ERISA and are therefore clearly preempted. In particular, the court noted that plaintiffs fail to allege the existence of any standalone agreement “but rather focus their grievance on the rate and method of calculating payment under the plan.” Accordingly, based on the allegations in the complaint, the court was left with “the inescapable conclusion” that plaintiffs’ causes of action conflict with ERISA, relate to the ERISA plan, and are preempted by ERISA. The court therefore ordered that the complaint be dismissed with prejudice.

Life Insurance & AD&D Benefit Claims

Second Circuit

Daus v. Janover LLC Cafeteria Plan, No. 19-CV-6341, 2025 WL 2229929; Daus v. Janover LLC Cafeteria Plan, No. 19-CV-6341, 2025 WL 2229928 (E.D.N.Y. Aug. 5, 2025) (Judge Frederic Block). Plaintiff Paul Daus has been a public accountant since 1996. From 2011 until 2016 Mr. Daus worked for Janover, LLC as a senior tax manager. He lost that position after he became disabled from a medical condition and was terminated. Following his termination from Janover Mr. Daus filed a charge with the Equal Employment Opportunity Commission (“EEOC”) alleging disability discrimination and retaliation by his employer. On January 9, 2018, Mr. Daus, along with his counsel, participated in an EEOC mediation session with Janover during which the parties signed a settlement agreement wherein Janover paid Mr. Daus a small sum in exchange for a general release. That release expressly provided that Mr. Daus was executing the release on his own behalf and behalf of his heirs, executors, successors and beneficiaries, and that he waived all claims for alleged lost wages and benefits, including claims under ERISA. The settlement agreement also provided that Mr. Daus could consider the agreement for 21 days and that he had 7 days to revoke it after signing. Mr. Daus did not do so, and he was paid the agreed-upon amount. Later, Mr. Daus lost his life insurance coverage under Janover’s group policy. He alleges that Janover failed to notify him that he had the right to convert his coverage under the group policy to an individual policy, for which no premiums would be due because he was totally disabled. Mr. Daus, along with his wife, Traci Daus, then initiated this litigation against Janover asserting breach of fiduciary claims under ERISA in connection with the lost life insurance benefits. Janover and the Dauses cross-moved for summary judgment. On April 22, 2025, the court issued its summary judgment decision. The central question before the court was whether plaintiffs’ claims under ERISA were waived in the EEOC settlement agreement. The court found they were. Accordingly, the court granted Janover’s motion for summary judgment and denied plaintiffs’ motion. To get there, the court considered the Second Circuit’s six Laniok-Bormann factors to determine the knowledge and voluntariness of the waiver. First, the court concluded that Mr. Daus, a savvy senior tax manager, had the requisite sophistication and business experience to enter into the contract knowingly. Second, the court found that the amount of time he had to review the agreement, coupled with the period he had after the agreement to revoke it, meant that Mr. Daus signed the agreement only after giving it due consideration. Third, the court agreed with Janover that Mr. Daus and his counsel played at least some role in negotiating and deciding the terms of the agreement. Fourth, the court concluded that the terms of the agreement were clear and specific, and that these terms expressly announced that Mr. Daus agreed to waive claims under ERISA. Fifth, there was no question that Mr. Daus was represented by legal counsel. The only factor that complicated the picture somewhat was the sixth and final one – whether the consideration given in exchange for the waiver exceeded employee benefits to which the employee was already entitled by contract or law. Here, there was no question that the settlement payment was meager relative to the right of the couple to $500,000 in life insurance benefits at no premium cost. Nevertheless, the court determined that this factor did not strongly disfavor enforcement when considered in tandem with the others. Thus, the court held that Mr. Daus knowingly and voluntarily waived ERISA claims against Janover. The court then took a moment to consider Mr. Daus’s most substantial argument against enforcement – that on the day of the mediation he was in serious pain, recovering from spinal surgeries, and that his doctor had changed his prescription medication just one day before. Although the court acknowledged that Mr. Daus recounted serious pain, stress, and discomfort on the day of the settlement, even accepting this account, it simply felt that the proffered evidence was insufficient to overcome the presumption of his competency because the symptoms he described are “not of the sort that suggests he was unable to willingly and voluntarily enter into the Settlement Agreement.” Finally, the court agreed with Janover that Traci Daus’s claims would ultimately fail as well as they were encompassed by the waiver. For these reasons, the court found that all of the couple’s ERISA claims were validly encompassed by the EEOC settlement agreement provisions that released Janover from liability from all claims under ERISA in connection with Mr. Daus’s termination. Thus, the court entered judgment in favor of Janover. Plaintiffs responded to the court’s summary judgment decision with a motion for reconsideration. They additionally requested that the court seal the summary judgment decision, or alternatively, to redact portions of it pertaining to the EEOC settlement amount and Mr. Daus’s private health information. The court this week denied the motion for reconsideration, granted the motion to redact portions of the summary judgment decision, and reissued the summary judgment order in its redacted form. The crux of plaintiffs’ motion for consideration was an argument that Traci Daus has independent standing to maintain the claims at issue by virtue of her status as the intended beneficiary of the policy. “Plaintiffs argue, even if Paul Daus waived claims against the Defendants under ERISA, the Court must permit the case to proceed because his wife’s status as his beneficiary entitles her to bring the identical ERISA claims herself.” The court disagreed with plaintiffs on this point. The court found the cases plaintiffs relied on in support of their argument distinguishable as “[b]oth cases… surfaced a concern that employers may be able to dodge ERISA liability where a plaintiff’s lack of standing flowed from the employer’s own misrepresentations.” In the present action, there is no allegation that defendants’ fraudulent misrepresentations caused Ms. Daus to voluntarily relinquish her beneficiary status, rather the scenario here is one “in which a beneficiary seeks to assert standing to pursue ERISA claims derived from her spouse’s status as a plan participant, which has long since ended and has no reasonable possibility of revival.” Accordingly, the court maintained its prior view that Ms. Daus is without standing to pursue the claims set forth in the complaint. The court thus denied the motion for reconsideration. Finally, the court concluded that while sealing the entirety of the summary judgment decision would be inappropriate, limited redactions to address plaintiffs’ privacy concerns around Mr. Daus’s medical information and the precise amount paid under the terms of the EEOC settlement agreement are justified. As a result, the court granted the motion to seal in part and reissued its summary judgment decision to reflect these changes.

Fourth Circuit

New v. Metropolitan Life Ins. Co., No. 1:24-00212, 2025 WL 2263007 (S.D.W.V. Aug. 7, 2025) (Judge David A. Faber). Before his death on June 29, 2023, Troy New was on total disability workers’ compensation and leave from his employment as a continuous miner operator with Cleveland-Cliffs Princeton Coal, Inc. Troy had injured himself the year before on April 1, 2022, and had been receiving workers’ compensation benefits ever since. Through his employment with Cleveland-Cliffs Troy was a participant of a basic group life and accidental death and dismemberment policy. His son, plaintiff Tyler Dwayne New, was the beneficiary of the policy. However, following his father’s death, Tyler was denied benefits under the plan by the policy’s insurer, MetLife. MetLife explained in the denial letter that the policy only continues to cover employees on leave for six months, “[t]he Policy does not allow coverage to continue while an employee is not actively at work due to injury or sickness for a period greater than six months.” After MetLife affirmed its decision on appeal, Tyler New brought this lawsuit. In his complaint, Tyler alleges a single claim for wrongful denial of benefits against MetLife under Section 502(a)(1)(B). The parties filed competing motions for summary judgment. In this order the court granted MetLife’s motion for summary judgment and denied plaintiff’s motion. It is undisputed that Troy New never received written notice of his right to convert the group plan into an individual one and that Cleveland-Cliffs continued to pay premiums for his coverage until his death. Tyler New argued, in support of his summary judgment motion, that the failure to provide notice of the right to convert the group policy to an individual policy resulted in his father failing to have life insurance at the time of his death. Alternatively, Tyler argued that the coverage never lapsed in the first place. MetLife countered that Tyler’s claim regarding his father’s entitlement to written notice of his right to convert the policy should be brought as a breach of fiduciary duty claim, not as a claim for benefits. Moreover, MetLife contended that under the plain and unambiguous language of the plan, the coverage had lapsed, and the court must defer to its reasonable interpretation of the policy under arbitrary and capricious review. The court first considered the threshold question of whether the coverage lapsed under the terms of the policy. It found that it had. Contrary to Tyler New’s arguments, the court determined that the relevant provision stating that coverage can only be extended for “up to six months” is unambiguous. Additionally, the court disagreed with Tyler that Cleveland-Cliffs was prohibited from terminating his father’s life insurance coverage while he collected workers’ compensation benefits under West Virginia law. The law Tyler pointed to, the court found, applies only to health insurance, not life insurance policies. Having determined that the coverage had indeed lapsed, the court turned to Tyler’s claim that he is entitled to the life insurance benefits because MetLife was required to send written notice to his father about his conversion rights. The court agreed with MetLife that this claim should have been brought as a fiduciary breach claim, rather than as a claim for benefits. But even assuming that MetLife owed a duty to provide a written notice of the right to convert, the court concluded that there was no evidence that MetLife knew Troy’s employment had ended under the terms of the policy, which is the triggering event for any potential notice requirement. Accordingly, the court determined that there were no genuine issues of material fact as to whether MetLife breached its fiduciary duty to Mr. New. The court therefore entered judgment in favor of MetLife. Finally, in a last note at the end of the decision, the court afforded Tyler the opportunity, should he wish to, to amend his complaint to assert a fiduciary breach claim against Cleveland-Cliffs relating to its failure to provide his father written notice of the right to convert.

Medical Benefit Claims

Ninth Circuit

Emsurgcare v. Oxford Health Insurance, Inc., No. 2:24-cv-04612-SVW, 2025 WL 2206114 (C.D. Cal. Jul. 31, 2025) (Judge Stephen V. Wilson). This lawsuit arises from an emergency colectomy surgery performed on a patient in 2021 to treat his life-threatening appendicitis. The two surgeons who performed the surgery, Drs. Feiz and Rim, initiated this ERISA action seeking to challenge benefit determinations made under an ERISA insurance plan administered and insured by defendant Oxford Health Insurance. In the case of Dr. Feiz’s claim for reimbursement, Oxford denied the claim outright and paid nothing. In Dr. Rim’s case, Oxford paid $2,691.36 of the $71,500 he billed. The court held a bench trial in this action on July 15, 2025. In this decision the court provided its findings of fact and conclusions of law and entered judgment in part for both parties. Before the court analyzed whether Oxford’s denials of the surgeons’ claims violated ERISA, it determined what standard of review to apply. As an initial matter, the court noted that the plan unambiguously confers discretion on Oxford such that the court must apply an abuse of discretion standard absent wholesale or flagrant violations of the procedural requirements of ERISA. Nevertheless, the court agreed with the providers that defendant “committed numerous procedural violations when adjudicating both Dr. Feiz and Dr. Rim’s claims.” These included its failure to engage in a meaningful dialogue, its failure to provide specific reasons for denying the claims, its failure to provide Dr. Feiz with adequate opportunity to respond to its stated rationale for denying his appeal, its changing rationales for denial, and its failure to adequately respond to Dr. Feiz’s request for documents it relied on when denying his claim. Nonetheless, the court viewed these failings as not “serious enough to justify de novo review,” and instead caused the court merely to temper its abuse of discretion analysis. Further supporting the need to apply skepticism to the denials was Oxford’s conflict of interest in the case, particularly regarding Dr. Feiz’s claim. The court concluded there were “multiple reasons to find that a conflict of interest impacted Defendant’s decision to deny Dr. Feiz’s claim,” such as the fact it never asked Dr. Feiz to correct the operative report by providing his signature, as well as its decision to not consider the signed operative report once Dr. Feiz provided it on appeal. Moreover, the court observed that Oxford paid the facility where the surgeons performed the colectomy. In a telling statement, the court wrote, “[t]his partial payment raises serious questions about Defendant’s justification for denying Dr. Feiz’s claim. By reimbursing the Hospital for services related to the same colectomy, Defendant effectively acknowledged that the procedure occurred. Yet in denying Dr. Feiz’s claim, Defendant cited an allegedly deficient operative report as grounds for being unable to ‘verify the validity and accuracy of the service provided.’ Those two positions cannot be squared. Either the colectomy happened, or it did not.” Thus, while not determinative in and of itself, the court found that Oxford’s conflict of interest affected its decision-making and that it needed to be taken into account. The court then turned to the dispositive questions: whether Oxford abused its discretion in denying Dr. Feiz’s claim in full and whether it abused its discretion when it denied Dr. Rim’s claim in part? The court gave different answers for each claim. It tackled Dr. Feiz’s claim first. The court concluded that with regard to Dr. Feiz Oxford acted arbitrarily and capriciously by denying his claim on the basis that the signature on his operative report was not proper. “Put simply, Defendant’s decision to deny Dr. Feiz’s claim and subsequent appeal was ‘implausible.’ Review of the administrative record shows that Defendant did not actually hold concerns about the validity and accuracy of Plaintiff’s colectomy, but rather used the lack of proper signature on Dr. Feiz’s operative report as a pretext to deny benefits. Denial of benefits on such a basis is an abuse of discretion.” Accordingly, the court entered judgment in favor of plaintiffs on Dr. Feiz’s ERISA claim and remanded to Oxford for proper adjudication and payment of his claim according to the terms of the plan. Conversely, the court held that Oxford did not abuse its discretion when it paid only a small fraction of Dr. Rim’s claim for reimbursement. For one thing, the court agreed with Oxford that Dr. Rim failed to exhaust the internal administrative appeal procedures before appearing in court. Even putting that issue aside, the court ultimately concluded that Oxford acted reasonably in executing the terms of the plan and calculating the rate of reimbursement. “Certainly, $2,691.36 is a very small portion of the $71,500 billed. But it appears to nonetheless fall within the terms of the Plan. The Plan simply requires that Defendant pay ‘an amount permitted by law.’ Plaintiffs have not identified any law that does not permit Defendant to pay Dr. Rim $2,691.36 of his $71,500 billed. Given that Plaintiffs hold the burden of proof in this case, this is a fatal deficiency.” As a result, the court entered judgment in favor of Oxford with respect to Dr. Rim’s claim.

Pension Benefit Claims

Sixth Circuit

Oakman v. International United Automobile Aerospace and Agricultural Workers, No. 1:23-CV-00026-GNS-HBB, 2025 WL 2242764 (W.D. Ky. Aug. 6, 2025) (Judge Greg N. Stivers). Plaintiff Gary Oakman brought this action against the General Motors Hourly Rate Employees Pension Plan, and its administrator, Fidelity Investments, after he was denied credited years of service under the plan for the six years he worked for American Sunroof Corporation before the company merged with General Motors in 1995. Mr. Oakman sought judicial review of the pension committee’s decision to deny him these additional benefits, bringing a single cause of action for recovery of denied benefits under Section 502(a)(1)(B). The plan moved for judgment on the administrative record. Mr. Oakman responded and filed a cross-motion for judgment on the administrative record, although importantly, his motion was filed late pursuant to the court’s scheduling orders. The court addressed the parties’ motions in this decision. As an initial matter, the court applied the arbitrary and capricious standard of review as both parties agreed that the plan grants GM and the pension committee discretionary authority to make benefit decisions. The court noted that the plan contains two seemingly contradictory provisions. “First, Article III, Section 1(a)(1) sets forth the main provision for determining years of credited service, stating that ‘[c]redited service shall be computed for each calendar year for each employee on the basis of total hours compensated by any plant or Division of General Motors LLC during such calendar year while the employee has unbroken seniority.’ Second, Article III, Section 1(k) states that ‘Notwithstanding any other Section of this Article III, . . . the employee’s credited service for the period prior to January 1, 1996[,] shall not be less than the employee’s seniority as of December 31, 1995.’” The Plan argued that its determination not to credit the years of service at American Sunroof Corp, was supported by the plain language of the plan. The court disagreed. “In the current case, it is clear that The Plan’s interpretation of the determination of benefits was not ‘the result of a deliberate, principled reasoning process’ because its decision expressly contradicts the terms of The Plan. The Plan bases its decision on the language of Section 1(a)(1) without acknowledging that Section 1(k) begins with ‘[n]otwithstanding any other Section of this Article III . . . .’” The use of the word “notwithstanding” the court determined, makes clear that the language of Section 1(k) overrides the calculation of credited services under Section 1(a)(1), because “Section (1)(k) applies ‘without prevention or obstruction’ by any other provision of Article III.” As a result, the court determined that Mr. Oakman is entitled to a calculation of credited service consistent with his seniority status, and there is no dispute that Mr. Oakman’s date of seniority was September 27, 1989, or the date of his initial employment with American Sunroof. Accordingly, the court held that the plan’s decision to deny Mr. Oakman’s request for additional benefits was arbitrary and capricious because it did not comport with the clear language of the plan. The court therefore denied the plan’s motion for judgment on the administrative record. However, the court did not enter judgment in favor of Mr. Oakman, despite its determination that he should be entitled to credited service under the plan equal to his seniority status. The court concluded that it could not enter judgment in favor of Mr. Oakman because he not only failed to file a timely dispositive motion for judgment on the administrative record, but also failed to provide any explanation why the deadline could not have been met. The court therefore “reluctantly” decided that Mr. Oakman’s cross-motion for judgment had to be denied as untimely and that his claims against the plan and Fidelity must be dismissed.

Pleading Issues & Procedure

Sixth Circuit

R.S. v. Medical Mutual Servs., LLC, No. 1:23-cv-01127, 2025 WL 2195363 (N.D. Ohio Aug. 1, 2025) (Judge David A. Ruiz). Plaintiff R.S. sued her health benefit plan, defendant Case Western Reserve University Benefits Plan, its administrator, defendant Case Western Reserve University, and its third-party administrator, defendant Medical Mutual Services, LLC, on behalf of herself and her son, I.R., to challenge defendants’ denial of the family’s claim for I.R.’s residential mental health treatment at a facility in Utah. R.S.’s complaint raises three causes of action: (1) a claim for recovery of benefits under Section 502(a)(1)(B); (2) a claim for equitable relief based on an alleged violation of the Mental Health Parity and Addiction Equity Act (“MHPAEA”) under Section 502(a)(3); and (3) a claim for statutory penalties under Sections 502(a)(1)(A) and (c). Defendants Case Western Reserve University and Case Western Reserve University Benefits Plan moved to dismiss the second cause of action. Defendant Medical Mutual Services moved for partial judgement on the pleadings regarding R.S.’s second and third causes of action. Plaintiff opposed both motions. In this order the court denied the motions as they pertain to count two and granted Medical Mutual Services’ motion as to count three. The court began with the MHPAEA violation claim. It disagreed with defendants that the 502(a)(3) claim was duplicative of the claim for benefits under Section 502(a)(1)(B). The court held that plaintiff is permitted to plead the two claims in the alternative, and noted that although they both revolve around the denial of benefits they present distinct theories and focus on distinct remedies. “In Count I, Plaintiff pleaded that the terms of the Plan were wrongly applied to her claim, resulting in a wrongful denial of benefits. In Count II, Plaintiff makes a different allegation – the Plan as written violates the MHPAEA. This claim asserts that even if the terms of the Plan are found to have been correctly applied to her benefits claims, foreclosing recovery under Count I, Plaintiff still has a case against Defendants. So, while Defendants are correct that it would be improper for Plaintiff to also allege that the terms of the Plan were improperly applied under § 1132(a)(3), that is not what Plaintiff has pleaded. The difference between the two claims is that Plaintiff is bringing the MHPAEA claim to challenge the plan as written, not as applied.” Further, R.S. can only possibly amend the terms of the plan through an equitable claim, as the Supreme Court has made clear that the terms of an ERISA plan cannot be changed under Section 502(a)(1)(B). At this stage of the proceedings, the court determined that it is simply too early to determine whether R.S.’s injury can be remedied under Section 502(a)(1)(B). The court therefore denied both motions seeking dismissal of count two. The court then discussed Medical Mutual Services’ motion for judgment on the statutory penalties claim. Put simply, the court agreed with Medical Mutual Services that it cannot be liable to R.S. for unanswered document requests because it is not the administrator of the plan. Therefore, the court granted Medical Mutual Services’ motion for judgment on the pleadings as to this claim against it.

Provider Claims

Fifth Circuit

Angelina Emergency Medicine Associates PA v. Blue Cross & Blue Shield of Ala., No. 24-10306, __ F. 4th __, 2025 WL 2268126 (5th Cir. Aug. 8, 2025) (Before Circuit Judges Smith, Higginson, and Douglas). Plaintiff-appellants in this ERISA action are fifty-six Texas emergency medicine physician groups. They filed suit against twenty-four Blue Cross Blue Shield-affiliated plans from outside of Texas alleging that the Blue Plans underpaid them for 290,000 claims for reimbursement. After a settlement with some of the defendants, more than 75% of the claims were dismissed. The district court later granted summary judgment in favor of defendants on the remaining claims. The district court identified five issues with plaintiffs’ claims: (1) the physician groups were not named in the assignments; (2) the assignments did not include a right to sue; (3) the assignments themselves were not produced; (4) the underlying plans contained valid anti-assignment clauses; and (5) the physician groups failed to exhaust administrative remedies under the applicable plans before filing suit. (Your ERISA Watch covered this decision in its January 17, 2024 edition.) Plaintiffs appealed. The Fifth Circuit revived nearly all of their claims in this decision, affirming the district court’s decision only as to the claims where no written assignment was produced. As to the remaining claims, the Fifth Circuit identified several issues that require further examination. First, the Fifth Circuit held that the lower court was wrong to dismiss the provider’s claims for lack of standing because the assignments were made to “health care providers” rather than naming the physician groups themselves. The court of appeals agreed with plaintiffs that the term “provider” is ambiguous and subject to two or more reasonable interpretations. At a minimum, the Fifth Circuit held that the lower court should have allowed the parties to introduce evidence of the intended scope of the assignments, and its grant of summary judgment was accordingly premature. Next, the Fifth Circuit rejected the district court’s holding that the assignments provided only a right to administrative relief rather than the right to seek legal relief. The appeals court stressed that the assignments assign “all rights.” It wrote, “there is no basis in the law for requiring that an assignment specifically state it provides a right to sue when it assigns ‘all rights.’ The district court erred in finding that claims assigning rights or insurance benefits did not assign a right to sue.” The Fifth Circuit then turned to the claims where the physician groups do not have written assignments. The court of appeals affirmed the dismissal of these claims and concluded that the district court acted reasonably in doing so. In addition to finding issues with the assignments, the district court had also dismissed claims where the underlying plans contained anti-assignment provisions. The Fifth Circuit reversed this basis for dismissal. It concluded that there were genuine issues and open questions about whether the Blue Plans were estopped from enforcing the anti-assignment clauses. It stated that the matter of estoppel “is a fact issue that the district court must determine as to each claim.” Finally, the Fifth Circuit held that the district court was too quick to dismiss claims for failure to exhaust administrative remedies. “At bottom, the Physician Groups argue that they made all possible efforts to obtain the underlying plans and understand alternative appeals processes, while still following the publicly available appeals process, but were not given copies of the plan. We have previously held that a claimant’s efforts, or lack thereof, to obtain the plan can be a key fact in finding whether the claimant has cleared the hurdle of ERISA exhaustion. At a minimum, there is a factual dispute as to whether the Physician Groups could have discovered the member appeals process without action by [Blue Cross], and whether it would have been reasonable to require the Physician Groups to undertake that separate process when they were already being partially paid by [the Blue Plans].” Based on the foregoing, the Fifth Circuit vacated summary judgment as to all claims except those with no written assignment in evidence. Accordingly, the physician groups’ action has been resurrected, and they may yet receive further compensation for some or all of the remaining claims at issue.