In re: Yellow Corp., No. 25-1421, __ F. 4th __, 2025 WL 2647752 (3rd Cir. Sep. 16, 2025) (Before Circuit Judges Shwartz, Montgomery-Reeves, and Ambro)

In response to the financial crisis caused by the COVID-19 pandemic, Congress enacted the American Rescue Plan Act of 2021 (“ARPA”). Part of this legislation was designed to shore up the nation’s struggling pension system and bolster the financial stability of stressed multiemployer pension plans. Through the Act, Congress appropriated special financial assistance funds to support these plans and help enable them to pay full pension benefits through at least 2051. “But the money came with a catch – Congress charged a federal agency, the Pension Benefit Guaranty Corporation (PBGC), with the task of promulgating regulations that would impose ‘reasonable conditions’ on how the pension plans would account for and use that money.”

The PBGC utilized this authority to issue two regulations: (1) the “Phase-In” regulation, which prohibited multiemployer plans from fully counting specific financial assistance funds as plan assets all at once; and (2) the “No-Receivables” regulation, which restricted the plans from recognizing as an asset any awarded special financial assistance money before the funds were paid to the plan.

One purpose of these regulations was to protect ARPA money from fully counting in calculating what withdrawing employers would owe to multiemployer plans upon untimely exits. Congress and the PBGC were wary of incentivizing a clever employer from exploiting this influx of cash as an opportunity to leave the plans it was contributing to at a withdrawal-liability discount. This litigation arises from one such employer’s efforts to do just that.

In July of 2023, Yellow Corporation, which was one of the nation’s largest trucking companies and a party to eleven multiemployer pension plans, shut down and filed for bankruptcy after it was unable to resolve a protracted labor dispute with the Teamsters union. The eleven plans responded by filing 174 proofs of claim in the bankruptcy case, seeking a combined $6.5 billion in withdrawal liability.

“For varied reasons all involving the challenged regulations, the pension plans did not include all the special financial assistance funding in their determinations of Yellow’s withdrawal liability.” In addition, Yellow’s withdrawal from the plans raised a separate question regarding how to calculate its liability under the statutory scheme – whether Yellow could be held to its agreement to pay withdrawal liability at 100% of the contribution rate (which it had agreed to in contracts with two of the funds) or whether the statutory language of the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”) required withdrawal liability to be calculated using the employer’s actual contribution rates for the time period before the withdrawal (which in the present matter was less – 25%).

In its ruling on the parties’ cross-motions for summary judgment, the bankruptcy court held that the Phase-In and No-Receivables regulations were valid exercises of the PBGC’s statutory authority and not otherwise arbitrary or capricious. The bankruptcy court further held that Yellow could be held to its agreement to pay withdrawal liability at 100% of the contribution rate “because the statutory formula for calculating withdrawal liability sets a floor on an exiting employer’s liability, not a ceiling.”

Yellow challenged these holdings by appealing to the Third Circuit Court of Appeals. In this decision the circuit court addressed the novel issue of the two regulations’ validity, and also considered the statutory withdrawal calculation issue. In the end, the appeals court affirmed both holdings of the bankruptcy court.

First, the Third Circuit agreed with the bankruptcy court that the challenged regulations were valid exercises of the PBGC’s authority and were neither arbitrary nor capricious. The court quoted from the bankruptcy court’s decision, stating, “Congress has expressly granted the PBGC the type of gap-filling authority that Loper Bright [v. Raimondo] described, both in ERISA as originally enacted in 1974 and again in the provisions of [ARPA] that are directly at issue here.”

The court of appeals, like the bankruptcy court, understood the specific ARPA provisions relating to the statutory formula for calculating a plan’s unfunded vested benefits (from which withdrawal liability is derived) to control over the general provisions of the MPPAA. Moreover, both courts observed that the notice-and-comment process for the regulations was comprehensive.

The Third Circuit also rejected the idea that this was an extraordinary case to which the “major questions doctrine” applied. “Congress created the PBGC to set regulations on withdrawal liability, made clear through ARPA it did not want special financial assistance to be used to subsidize withdrawal liability, and charged the PBGC specifically with the task to ‘impose, by regulation[,] … reasonable conditions’ related to ‘withdrawal liability’ on any ‘eligible multiemployer plan that receives special financial assistance.’ Far from a ‘transformative expansion,’ this is PBGC business as usual, transacted per ‘clear congressional authorization.’” For these reasons, the court upheld the bankruptcy court’s application of the PBGC’s two challenged regulations.

The Third Circuit then moved to the calculation issue and affirmed the bankruptcy court’s holdings there too. The appellate court agreed with the bankruptcy court that the relevant language in MPPAA permitted the two plans to enforce their contract with Yellow and demand liability at the contractually-bargained-for rate, despite that rate being higher than Yellow’s actual contributions at the time. “We know no convincing statutory case against holding Yellow to its end of the bargain. Seeking to reenter these pension plans, it bargained for a discount on its contributions by offering to pay full freight on its withdrawal liability if the time came. It is here.”

In sum, the court of appeals affirmed the bankruptcy court’s holdings that the PBGC’s Phase-In and No-Receivables regulations were valid exercises of its delegated authority under ARPA, and Yellow must pay the higher withdrawal liability contracted for with the New York and Western Pennsylvania Teamsters Funds. 

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

Arbitration

Ninth Circuit

Robertson v. Argent Trust Co., No. CV-21-01711-PHX-DWL, 2025 WL 2676091 (D. Ariz. Sep. 18, 2025) (Judge Dominic W. Lanza). Plaintiff Shana Robertson filed this action in October 2021 against Argent Trust Company and the selling shareholder trustees of an Employee Stock Ownership Plan (“ESOP”) alleging that they violated their fiduciary duties under ERISA. Argent filed a motion to compel arbitration, and in July of 2022, the court granted the motion and stayed the case pending resolution of the arbitration proceeding. On June 10, 2025, the arbitration panel issued an award in Ms. Robertson’s favor, and shortly thereafter also issued her an award of attorneys’ fees and costs. Those decisions prompted Ms. Robertson to move under the Federal Arbitration Act to confirm both awards, while defendants separately moved to vacate the awards. In addition, both parties filed motions to seal the arbitration details, as the ESOP requires them to request sealing of all the specifics related to the arbitration proceedings. Rather than rule on the merits of the pending motions to enforce/vacate the arbitration awards, the court denied them without prejudice as it found it currently lacks essential details discussing the nature of, or basis for, the underlying arbitration awards. The court further denied the parties’ sealing requests. It determined that the sealing requests lack merit as “the parties’ sole proffered reason for seeking to overcome the strong presumption in favor of public access is that they agreed with each other to maintain the confidentiality of any details related to their arbitration proceeding.” The mere fact they agreed to maintain the arbitration proceeding in confidence, the court said, is not enough to overcome the presumption in favor of public access. The court further explained that the public’s interest in understanding the basis for any decision that is ultimately reached would be severely undermined if the parties’ sealing request were approved. Accordingly, the court denied the motions to seal. However, it gave the parties the opportunity to propose newer, more narrow redactions, should they still wish to. As a result, the court’s ultimate decision to enforce or vacate the awards will have to wait for now.

Attorneys’ Fees

Third Circuit

Mundrati v. Unum Life Ins. Co. of Am., No. 23-1860, 2025 WL 2653588 (W.D. Pa. Sep. 16, 2025) (Magistrate Judge Patricia L. Dodge). In a memorandum opinion issued on March 24, 2025, the court granted summary judgment in favor of plaintiff Pooja Mundrati, finding that Unum’s denial of her claim for long-term disability benefits was arbitrary and capricious. (For a full summary of that decision you can read the coverage from our April 2, 2025 newsletter). Following her success, Dr. Mundrati moved for an award of attorneys’ fees and costs under Section 502(g)(1). Because Unum has filed a notice of appeal to the Third Circuit, Unum requested that the court stay resolution of Dr. Mundrati’s motion until the appeal is resolved. The court, however, denied Unum’s motion to stay and in this decision issued its ruling. As a starting point, the court analyzed the case under the Third Circuit’s five Ursic factors: (1) the offending parties’ culpability or bad faith; (2) the ability of the offending parties to satisfy an award of attorneys’ fees; (3) the deterrent effect of an award of attorneys’ fees against the offending parties; (4) the benefit conferred on members of the plan as a whole; and (5) the relative merits of the parties’ positions. The court determined that because Unum had acted arbitrarily and capriciously in denying the benefits, it acted culpably and the first Ursic factor favors awarding attorneys’ fees. Next, the court agreed with plaintiff that Unum’s behavior in the handling of her claim was not unique to this case and that it is entirely possible that an award of attorneys’ fees may have a deterrent effect on future disability claims. Thus, it found that this factor also supported awarding fees. Moreover, the court held that participants in Dr. Mundrati’s disability plan and similar plans will benefit from issues reached in this case. As for the relative merits of the parties’ positions, the court concluded that there could be no doubt that Dr. Mundrati had achieved success in nearly every position she raised in the case. Taken together, the court was confident that all five factors support an award of fees. As a result, the court proceeded to consider the fees requested. Dr. Mundrati sought $126,648.50 in attorney’s fees for 230.2 hours of work, consisting of the following: (1) $92,687.50, representing 148.3 hours by attorney Marc Snyder at $625 per hour; and (2) $33,988.50, which represented 81.93 hours by attorney Christopher Harris at $415 per hour. Unum challenged both the hourly rates and the number of hours spent. The court took a look at both. First, the court found that Mr. Snyder’s hourly rate was reasonable and appropriate given his 25 years of practice specializing in ERISA disability matters. The court thus declined to reduce this rate. With regard to Mr. Harris, however, the court chose to slightly reduce his rate to $400 per hour as he has only been practicing for seven years. The court then turned to defendant’s challenges to the hours expended. By and large, the court disagreed with Unum that the time entries were excessive or duplicative, given the large record in this case. The court only chose to reduce Mr. Snyder’s fees by six hours for the time he spent preparing for oral argument on a moot argument. The court reduced Mr. Harris’s hours slightly more, by 11 hours, to reflect time he spent on oral argument preparation and for his decision to attend mediation, when only one attorney was required. Applying these adjustments, the court was left with its ultimate grand revised total of $117,297.50 in fees. Finally, the court quickly addressed the $1,487.50 in costs Dr. Mundrati sought to recover, which were made up of the filing fee, the cost of Mr. Harris’s pro hac vice admission fee, and the cost of the mediator. The court found that all three were recoverable. Accordingly, it awarded Dr. Mundrati all of the costs she requested. Thus, the court granted plaintiff’s motion for attorneys’ fees and costs and awarded her fees subject to the slight adjustments referenced above.

Breach of Fiduciary Duty

Second Circuit

AutoExpo Ent. Inc. v. Elyahou, No. 23-cv-09249 (OEM) (ST), 2025 WL 2637493 (E.D.N.Y. Sep. 12, 2025) (Judge Orelia E. Merchant). Plaintiff AutoExpo Ent. Inc. is a car dealership operating in New York. In this lawsuit the dealership alleges that the fiduciaries of its ERISA defined contribution retirement plan violated ERISA Sections 502(a)(2) and 502(a)(3) through certain plan amendments and withdrawal transactions which AutoExpo did not authorize or permit. In addition, the company alleges that some of these same individuals violated the Defend Trade Secrets Act, committed fraud, and aided and abetted in fiduciary breaches. Defendants collectively moved to dismiss the action, claiming that the automotive dealership lacks standing to sue under ERISA and failed to state each of its claims. The court granted the motion in part and denied in part in this order. As an initial matter, the court assessed plaintiff’s standing to pursue its ERISA causes of action, and determined that to the extent it brings its claims on behalf of the plan, it has adequately alleged injuries-in-fact, traceable to the conduct at issue. Specifically, the court held that the complaint plausibly alleges that the plan suffered an injury-in-fact by way of an unauthorized withdrawal of plan funds, which is both fairly traceable to the breach of fiduciary duty and redressable by equitable damages paid to the plan. Moreover, the court determined that the complaint states plausible claims under Sections 502(a)(2) and 502(a)(3) against the fiduciary defendants and that these alleged breaches resulted in harm to the plan. The court found that the complaint describes how the challenged amendments to the plan and the allegedly improper withdrawals were in breach of the defendants’ fiduciary duties owed to the plan. Accordingly, the court denied the motion to dismiss any of the ERISA causes of action. However, the rest of plaintiff’s complaint was a different story. The court agreed with defendants that the complaint fails to state fraud or fiduciary breach claims, or a claim under the Defend Trade Secrets Act. The court concluded that the complaint lacks sufficient factual information to plausibly plead the existence of trade secrets protected by the Defend Trade Secrets Act, that its allegations of aiding and abetting a breach of fiduciary duty were conclusory, and that it does not meet the heightened pleading standard for fraud under Rule 9(b). Therefore, the court granted the motion to dismiss all of the non-ERISA claims in the complaint.

Fifth Circuit

Estay v. Ochsner Clinic Foundation, No. 25-507, 2025 WL 2644782 (E.D. La. Sep. 15, 2025) (Judge Jane Triche Milazzo). Two long-time employees of defendant Ochsner Clinic Foundation, plaintiffs Megan Estay and Francesca Messore, filed this putative class action alleging that Ochsner and the Retirement Benefits Committee of the foundation’s 401(k) plan have breached their duties under ERISA and engaged in prohibited transactions through their use of plan forfeitures. Defendants moved to dismiss plaintiffs’ action pursuant to Rule 12(b)(6). The court granted defendants’ motion to dismiss in this decision. First, the court agreed with Ochsner and the Benefits Committee that plaintiffs failed to state a claim for a breach of the fiduciary duty of loyalty because defendants’ decision to allocate the forfeitures to contributing matches rather than plan expenses is supported by both federal regulations and the language of the plan itself. The court noted that “at least a dozen other district courts have considered similar arguments and found them lacking.” The court went on to summarize the primary reasons these courts have dismissed similar allegations in forfeiture cases: “(1) ERISA does not require the fiduciary to maximize profits, only to ensure that participants receive their promised benefits; (2) both ERISA and the terms of the plans themselves authorize the use of forfeiture funds for employer contribution matching; and (3) the plaintiffs’ theory would effectively require forfeiture funds to be used for administrative expenses and would create an additional benefit to participants not contemplated in the plans.” The court emphasized that plaintiffs fail to allege they are being deprived of promised benefits. Instead, the court held that their theory of liability focuses on maximizing benefits, which ERISA does not require. Much like the duty of loyalty, the court dismissed the duty of prudence claim, finding it simply implausible. The court concluded that plaintiffs’ imprudence allegations rely on a mistaken implication “that because the fiduciaries chose to allocate the Forfeitures to matching contributions instead of administrative expenses, then they could not have undertaken a prudent decision-making process.” Further, it expressed that this theory is not limited to any specific facts regarding Ochsner’s actions, but instead seeks to categorically bar companies from using forfeitures to reduce their own contribution expenses. The court’s dismissal of plaintiffs’ underlying fiduciary breach claims doomed their derivative failure to monitor claim. It too was thus dismissed. The court then discussed the prohibited transaction claims. Defendants argued these claims could not succeed “because the inter-plan transfer of assets is not a transaction as contemplated by § 1106.” The court agreed. And because plaintiffs failed to allege a “transaction,” the court concluded that they did not state a claim for a prohibited transaction under any subsection of § 1106. Finally, the court addressed defendants’ argument that plaintiffs must exhaust their administrative remedies before bringing suit. Here, and only here, the court disagreed with defendants. Contrary to their assertions, it held that plaintiffs’ claims on behalf of a putative class of participants seeking disgorgement of profits secured by defendants “are not disguised claims for additional benefit, and exhaustion is therefore not required.” Nevertheless, as explained above, the court dismissed plaintiffs’ action for other reasons. However, because they have not yet been afforded the opportunity to amend their complaint, the court dismissed the claims without prejudice.

Seventh Circuit

Walther v. Wood, No. 1:23-CV-00294-GSL, 2025 WL 2675099 (N.D. Ind. Sep. 17, 2025) (Judge Gretchen S. Lund). Plaintiffs in this putative class action are current and former employees of the aluminum manufacturing company 80/20, Inc. In 2016, the founder of the company created an Employee Stock Ownership Plan (“ESOP”) to give his employees the opportunity to partake in 80/20’s ownership. At its creation, the ESOP purchased 10% of the company’s shares, with the founder retaining the remaining 90%. He set things up so that these shares would become available for purchase upon his death, with the ESOP having the exclusive right to make an offer for all or part of the shares for 180 days. In 2019, the founder died, at which time the shares came up for sale. For reasons that are contested and at issue in this litigation, the appointed trustee of the ESOP did not begin negotiations within the 180-day exclusive window, and in the end the company sold 100% of 80/20’s stock to a third-party buyer. This meant that not only did the ESOP not buy the founder’s share of the stock, but it was also forced to sell its 10% as part of the third-party transaction. Plaintiffs Martha Walther, Trent Kumfer, Jayme Lea, Megan Kelsey, Dave Lowe, Carol Whisler, and Michele Porter are challenging what took place in this lawsuit. In a previous order the court dismissed aspects of plaintiffs’ original complaint. Specifically, the court found that plaintiffs failed to state any plausible claims against defendants MPE Partners II, L.P., MPE Partners III, L.P., Rodney Strack, Patrick Buesching, Patrice Mauk, Pareto Efficient Solutions, LLC, and granted their motion to dismiss entirely, holding that plaintiffs’ claims rested on an assertion that the ESOP had a right to purchase the shares at issue, while the plain language of the codicil and Buy-Sell Agreement indicate they were only entitled to an offer to purchase them. For much the same reason, the court dismissed several claims against the trustee, defendant Brian Eagle, which rested on the same underlying assumption. However, the court permitted plaintiffs’ claim 29 U.S.C. 1104(a)(1) asserted against Mr. Eagle to proceed, holding that plaintiffs stated a valid claim against him for fiduciary breach related to his role as the trustee of the ESOP. (Your ERISA Watch covered this decision in our October 9, 2024 edition.) Another defendant, John Wood, never filed a motion to dismiss, and as such the claims against him remain. Eight months after the court issued its decision on the motions to dismiss, defendants Wood and Eagle filed motions for judgment on the pleadings. In this order the court denied both motions. As for Mr. Wood, the court agreed with plaintiffs that his motion failed to develop any argument, cite legal authority, or explain reasons why he believes dismissal is warranted on his behalf, except for pointing to the Court’s dismissal of Defendant Buesching. The court found all of this troubling and therefore denied the “insufficient and underdeveloped” motion. The court also took issue with Mr. Eagle’s motion. For one thing, the court disagreed with his assertion that the only remaining issue to be decided is whether he “breached his fiduciary duties in delaying negotiations with the Estate beyond the 180-day deadline in the Buy/Sell Agreement for [ESOP] to accept any offer made by the Estate for the purchase of Don [Wood]’s shares.” The court replied that it could not, and did not, pick and choose which of plaintiffs’ factual allegations made under Section 1104(a)(1) viable against Mr. Eagle. Moreover, the court determined that there remain genuine issues of material fact as to Mr. Eagle’s status as trustee during the relevant time period and that it would be contrary to law for the court to make a finding at this point in the proceedings. Accordingly, the court determined that Mr. Eagle failed to show that plaintiffs’ remaining fiduciary breach claim against him is not viable. For this reason, the court denied his motion for judgment on the pleadings.

Ninth Circuit

Armenta v. WillScot Mobile Mini Holdings Corp., No. CV-25-00407-PHX-MTL, 2025 WL 2645518 (D. Ariz. Sep. 15, 2025) (Judge Michael T Liburdi). Plaintiff Ariel Armenta brings this action individually and as a representative of similarly situated participants and beneficiaries of the WillScot Mobile Mini 401(k) Plan against the WillScot Mobile Mini Holdings Corporation, alleging the company is violating its fiduciary duties and engaging in transactions prohibited by ERISA through its use of forfeitures. Readers of Your ERISA Watch are undoubtedly aware that forfeiture cases such as this one have not been faring well in the district courts as of late. This decision ruling on WillScot’s motion to dismiss was no exception. In this order the court concluded that Ms. Armenta’s prohibited transaction and fiduciary breach allegations under § 1104(a)(1)(A) and § 1104(a)(1)(D) fail as a matter of law, and that her general allegations of imprudence under § 1104(a)(1)(B) fail to provide any specific facts about WillScot’s alleged flawed processes when making decisions to reallocate forfeitures. Importantly, the court noted that the plan terms permit the administrator to reallocate forfeitures to both administrative expenses and plan contributions, and the order in which this reallocation occurs is not defined in the Plan terms. Given this permissive plan language governing the use of forfeited employer contributions, the court determined that Ms. Armenta could not state a claim that WillScot breached its fiduciary duty to act in accordance with plan documents or that it breached its fiduciary duty of loyalty. As a result, the court dismissed these claims with prejudice. However, the court ruled that providing leave to amend for the imprudence claim was proper because it is possible that Ms. Armenta could plausibly amend her complaint to allege that one could “reasonably infer from the circumstantial factual allegations that the fiduciary’s decision-making process was flawed.” Thus, this aspect of Ms. Armenta’s complaint was dismissed without prejudice. The same was not true of her claims alleging prohibited transactions under Section 1106. Much like her disloyalty and failure to act in accordance with plan terms claims, the court determined that the prohibited transactions claims could not be cured through amendment because WillScot’s use of the forfeitures to offset its own contributions cannot be understood to be an unlawful transaction under § 1106 in light of the plan’s documents. Based on the foregoing, the court determined that the complaint does not state claims upon which relief can be granted and thus dismissed the action.

Disability Benefit Claims

Ninth Circuit

Koehnke v. Unum Life Ins. Co. of Am., No. 6:23-cv-00819-AA, 2025 WL 2682390 (D. Or. Sep. 19, 2025) (Judge Ann Aiken). Plaintiff Debbie Koehnke filed this lawsuit to challenge Unum Life Insurance Company of America’s denial of her claim for long-term disability benefits under a policy established by her former employer, Morrow Equipment Company. Ms. Koehnke maintains that she cannot perform the material and substantial duties of her former work as a document control manager at Morrow due to a degenerative disc condition in her lower spine, a seizure disorder, fibromyalgia, and sedation from her prescribed medications. Unum disagrees. Unum argues that findings in the medical record contradict her position, and contends that she is exaggerating the severity of her medical condition. The parties each moved for judgment on the administrative record under a de novo standard of review. In this order the court found the opinions of Ms. Koehnke’s treating providers highly credible and persuasive, given their years of in-person treatment history and direct examinations of Ms. Koehnke. Conversely, the court found that defendants’ consultant physicians cherry-picked from the medical record, improperly discredited Ms. Koehnke’s subjective symptom testimony, and failed to “explain why long-term treatment for a degenerative condition that has not improved renders Plaintiff’s reported symptoms not credible.” Based upon an exhaustive review of the complete administrative record, the court found that Ms. Koehnke established by a preponderance of the evidence that she was disabled under the policy’s definition of disability and that Unum failed to convincingly rebut this. In particular, the court disagreed with Unum that Ms. Koehnke was not disabled simply because she traveled. “Evidence in the record is that Plaintiff had to obtain additional medication to travel and statements from her family was that Plaintiff experienced reduced activity when traveling, and that the family has had to adjust to her chronic pain management needs.” Moreover, the court highlighted the objective medical findings in the record which support Ms. Koehnke, including her spinal surgery, MRIs, x-rays, the functional capacity exam results, the opinions of her doctors, four witness statements, and intensive pain management through medications prescribed by her doctors. In fact, the “only medical providers who questioned the veracity or severity of Plaintiff’s symptoms are Defendant’s reviewers,” who never saw her in person. For these reasons, the court concluded that Ms. Koehnke met her burden to prove she is disabled under her long-term disability plan. Accordingly, the court entered judgment in her favor and awarded her benefits. However, the court agreed with Unum that the administrative record is not developed on the question of whether Ms. Koehnke is disabled under the “any occupation” definition of disability, and that a claim under this definition is not properly before the court at this time. Finally, the court instructed the parties to discuss the amount of benefits owed, and any interest, and informed Ms. Koehnke that any motion for attorneys’ fees and costs under Section 502(g) must be filed no later than 14 days after the entry of judgment.

Discovery

Seventh Circuit

Gaines v. United of Omaha Life Ins. Co., No. 1:25-cv-00167-HAB-ALT, 2025 WL 2675105 (N.D. Ind. Sep. 18, 2025) (Magistrate Judge Andrew L. Teel). On June 11, 2025, the court issued a scheduling order allowing plaintiff Brett Gaines discovery in his ERISA action against United of Omaha Life Insurance Company. Displeased with this decision, United of Omaha filed a motion to vacate the court’s order, contending that discovery is “not necessary or appropriate in this ERISA matter and is contrary to ERISA’s administrative and functional purposes.” The matter was referred to Magistrate Judge Andrew L. Teel. In this brief decision Judge Teel denied defendant’s motion. As an initial matter, he noted that while the motion was styled as a motion to vacate, it was, as a practical matter, a motion to reconsider. While motions to reconsider are permitted, they are disfavored, particularly when they rehash previously rejected arguments and fail to identify a clear error or change in controlling law. Judge Teel found United of Omaha’s motion suffered from these flaws, as it was replete with a “rehashing [of] previously rejected arguments…that could have been heard during the pendency of the previous motion.” Moreover, the Magistrate emphasized that the motion failed to acknowledge that the court is allotted discretion in allowing discovery. For these reasons, Judge Teel denied the motion to vacate. Relatedly, the Magistrate Judge denied United of Omaha’s alternative motion for a protective order, concluding that defendant had failed to specify which of the discovery requests should be restricted under its requested protective order. Judge Teel conveyed that United of Omaha’s motion contained little more than perfunctory statements and complaints, and these would “not suffice.” As a result, Judge Teel denied both of United of Omaha’s motions seeking to eliminate or limit the discovery in this action. 

ERISA Preemption

Second Circuit

Norman Maurice Rowe, M.D., M.H.A., L.L.C. v. Aetna Life Ins. Co., No. 23 Civ. 8297 (LGS), 2025 WL 2644190 (S.D.N.Y. Sep. 15, 2025) (Judge Lorna G. Schofield). Plaintiffs Norman Maurice Rose M.D., M.H.A., LLC and East Coast Plastic Surgery, P.C. are plastic surgery practices that have filed dozens of similar lawsuits in the Eastern and Southern Districts of New York against various insurers challenging reimbursement rates for medically necessary breast surgeries they provided to covered patients. In this particular action, the providers have sued Aetna Life Insurance Company seeking additional payments related to a breast surgery they performed on an Aetna patient. The providers asserted five state law causes of action: (1) breach of contract, (2) unjust enrichment, (3) promissory estoppel, (4) fraud and (5) conversion. Aetna moved for dismissal, relying upon the patient’s summary plan description. Because the plan is integral to the providers’ action, the court concluded the plan summary is properly considered on the motion to dismiss. Moreover, the court agreed with Aetna that the plan document makes clear that the plan is governed by ERISA. With this information, the court dismissed the amended complaint because all five causes of action arise under state law and are preempted by ERISA Section 514(a). “Plaintiffs, as valid assignees of A.V., assert claims for breach of contract, promissory estoppel, unjust enrichment, fraudulent inducement and conversion, which all arise under state law and seek payment in connection with medical services rendered to A.V. These claims ‘implicate coverage determinations under the relevant terms of the Plan, including denials of reimbursement’ and are thus ‘colorable claims for benefits pursuant to ERISA § 502(a)(1)(B).’ The Amended Complaint does not allege any ‘independent legal duty that is implicated by the defendant’s actions.’” The court added that any legal duty Aetna had to reimburse the providers arises from its obligations under the patient’s ERISA plan, not from any separate promise or agreement. For this reason, the court granted Aetna’s motion to dismiss. The court also explained that it would dismiss the action with prejudice because plaintiffs already amended their complaint and failed to add an ERISA claim. Further amendment of the state law claims, the court said, would obviously be futile as they would remain preempted for the reasons discussed. Accordingly, the lawsuit was dismissed with prejudice.

Third Circuit

Bowden v. Express Scripts, Inc., No. 3:25-cv-261, 2025 WL 2653582 (W.D. Pa. Sep. 16, 2025) (Judge Robert J. Colville). In this putative class action plaintiff Garrett Bowden is challenging defendants Express Scripts, Inc., Cigna Corporation, and Evernorth Health Services’ removal of a small and critical chain of pharmacies in rural Pennsylvania as in-network provider under health plans administered by Pennsylvania health insurance providers UPMC and Highmark. Plaintiff asserts that the putative class members face imminent loss of access to their medications and pharmacy services because of defendants’ decision to terminate the pharmacies from their provider networks. Mr. Bowden commenced his action in state court. Defendants removed the case to federal court, asserting ERISA preemption. Defendants further argue that removal is proper under the Class Action Fairness Act because this is a putative class action involving at least 100 putative class members, at least one defendant is diverse from at least one putative class member, and the alleged amount in controversy exceeds $5 million. Mr. Bowden moved to remand his action back to Pennsylvania state court. The court denied his remand motion in this decision. The court agreed with the removing defendants that the claims at issue are preempted by ERISA. “The status of Martella’s, or any pharmacy, as an in-network pharmacy under the putative class members’ health benefit plans is a benefit under the plans, and the putative class members clearly seek to enforce and/or clarify their rights under their plans in this lawsuit. Plaintiff’s claims implicate the administration of a health benefit plan, i.e., which pharmacies qualify as ‘in-network’ pharmacies. As such, Plaintiff could have brought this action under Section 502(a), and the first complete preemption requirement is met in this case.” The court went on to conclude that no other legal duty supports plaintiff’s state law claims. It found that the claims plainly seek enforcements of benefits owed under ERISA plans and/or clarification as to whether the manner and circumstances of the removal of the pharmacies as in-network providers was consistent with the terms of the benefit plans. Moreover, plaintiff’s desire to have the pharmacies reinstated as in-network appeared to the court to be a plain attempt to modify or control the scope of Express Script’s pharmacy network, which clearly implicates the administration of the health benefit plans. In conclusion, the court agreed with defendants that Mr. Bowden’s causes of action arise from the ERISA-governed healthcare plans and necessarily depend upon interpretation of the rights and benefits under the plans, and are thus completely  preempted by ERISA. The court denied the motion to remand on this basis. Given this holding, the court declined to offer any detailed analysis of the issue of removal under the Class Action Fairness Act, although it did state that it believes removal under the Class Action Fairness Act would be appropriate here. Regardless, the court denied the motion to remand, and instructed Mr. Bowden to file an amended complaint asserting a claim under ERISA.

Exhaustion of Administrative Remedies

Eleventh Circuit

Berry v. Bailey, No. 5:24-cv-522-CLM, 2025 WL 2678784 (N.D. Ala. Sep. 18, 2025) (Judge Corey L. Maze). Plaintiffs in this putative class action are former employees of the defense-contracting firm Radiance Technologies, and participants in the company’s Employee Stock Ownership Plan (“ESOP”). Additionally, some of the named plaintiffs hold stock appreciation rights. In their complaint plaintiffs allege that Radiance’s CEO, Radiance’s board of directors, the plan’s trustee, Argent Trust, and an Argent employee have breached their fiduciary duties under Alabama state law and ERISA by bungling, or in the case of the CEO allegedly sabotaging, the sale of the company in 2023 for self-interested reasons. Specifically, plaintiffs maintain that the CEO didn’t want the sale to go through because the five potential buyers looking to purchase Radiance would not have allowed him to stay on in that position. Moreover, plaintiffs allege that neither the board of directors nor the Argent defendants performed due diligence when the CEO made false and misleading assertions about the value of the company. According to plaintiffs it was apparently in defendants’ interests not to scrutinize the CEO’s assertions too closely and instead table the potential sale of Radiance because the board members were personally appointed by the CEO and compensated for their positions, and Argent generated fees as trustee of the ESOP. Plaintiffs also take issue with the fact that they were never provided information about the potential sale. Defendants moved to dismiss plaintiffs’ action. They asked the court to dismiss the claims against them for several reasons, including lack of standing, procedural deficiencies, and failure to state claims upon which relief may be granted. The court granted the motion to dismiss in this decision. The court identified three reasons which it concluded required dismissing plaintiffs’ claims. First, the court determined that plaintiffs lack standing to bring direct breach of fiduciary duty claims against the Radiance Defendants under Alabama law because the alleged harm affected all stockholders equally. Second, the court held that Plaintiffs’ remaining state law breach of fiduciary duty claims against all Defendants are preempted by ERISA. Third, and finally, the court determined that the ERISA fiduciary breach claims must be dismissed because plaintiffs failed to exhaust their administrative remedies. With regard to preemption, the court agreed with defendants that both prongs of the Davila complete preemption test are satisfied here because “(1) Plaintiffs, as ESOP participants, have the right to bring claims under § 502(a) to remedy breaches of fiduciary duties harming the ESOP and (2) there is no separate legal duty supporting Plaintiffs’ state-law claims.” The court added that all of the state law claims implicate defendants’ duties under the ESOP, because the only fiduciary duties they owe to plaintiffs, as beneficial stockholders in Radiance, arise from the ERISA-governed plan. On top of preemption under Section 502(a), the court concluded that defensive preemption under Section 514(a) applies as well for much the same reason. Accordingly, the court held that all of plaintiffs’ state law causes of action are barred due to ERISA preemption. The court then reached the issue of exhaustion under ERISA. Plaintiffs refute that exhaustion is required. They argue they did not need to exhaust any claims procedures before bringing a civil action because the ESOP’s administrative claims procedure is “non-mandatory,” the exhaustion mandate only applies to claims for benefits, not fiduciary breach claims like those at issue here, and exhaustion would have been futile. The court disagreed with all three arguments. It held that these arguments have all been undermined by previous Eleventh Circuit decisions, which “show that Plaintiffs’ claims were ‘claims for benefits’ and an ESOP’s administrative claims procedures must be exhausted even if (a) it uses permissive language, and (b) it is overseen by individuals alleged to have breached their fiduciary duties.” For these reasons, the court disagreed with plaintiffs that they could simply ignore ERISA’s exhaustion requirement. As a result, the court dismissed the ERISA causes of action too. Thus, as explained above, the court fully granted the motion to dismiss. However, it dismissed all claims without prejudice.

Medical Benefit Claims

Fourth Circuit

Swartzendruber v. Sentara RMH Med. Center, No. 5:22-cv-55, 2025 WL 2655986 (W.D. Va. Sep. 16, 2025) (Judge Michael F. Urbanski). In this action plaintiff Michael Swartzendruber alleges that he, and others like him, were improperly billed by his healthcare providers Sentara RMH Medical Center and RMH Medical Group, LLC, and improperly reimbursed by his health insurer, United Healthcare Insurance Company. His lawsuit arises from blood tests in 2019 and 2021. Each blood draw was done at an outpatient satellite location. Despite both blood draws physically taking place at these non-hospital locations, the blood samples were sent to a separate location, “Sentara RMH Medical Center’s main hospital location,” for testing. Because of this transfer, Mr. Swartzendruber was billed a much higher cost for his blood tests than he expected. Mr. Swartzentruber contests this billing. He also alleges a “number of misrepresentations arising out of this billing issue: first, that Sentara lied to United when it sent United claims for services rendered at 2010 Health Campus when the venipunctures physically took place elsewhere; second, that United lied on its website when plaintiff sought estimates for the blood tests; and third, that United lied on the phone when plaintiff called United to ask how much the service(s) would cost at SMHC.” In his operative complaint, Mr. Swartzendruber asserts three causes of action under ERISA: (1) a class claim under Section 502(a)(1)(B) against United that argues the insurer improperly billed for the blood draws under the plan; (2) an individual claim under Section 502(a)(3) alleging that Mr. Swartzendruber was misled by United about plan benefits due to its programming of its cost estimator tool and it training of its customer service representatives; and (3) a class claim under Section 502(a)(3) alleging that the Sentara defendants should be required to resubmit the claims correctly to United, and United should then reprocess the claims, and provide an explanation to each member of the class about the allowed amount for each treatment. Presently before the court were three motions. Mr. Swartzendruber filed a Daubert motion seeking to exclude the expert testimony of defendants’ expert Kristina Kahan, a registered nurse, certified professional coder, and senior managing director at Ankura Consulting with experience in the field of healthcare billing and processing practices. Also before the court were motions for summary judgment filed by United and the Sentara defendants. In a long but comprehensive decision the court denied plaintiff’s Daubert motion and granted defendants’ summary judgment motions. The court reviewed the Daubert motion first. Contrary to Mr. Swartzendruber’s assertions, the court concluded that Ms. Kahan’s testimony was relevant and helpful, and that she provided a sufficient basis on which to offer her opinions. The court found that it was better equipped to address the issues in dispute thanks to Ms. Kahan’s report. Accordingly, the court denied Mr. Swartzendruber’s motion to exclude her report. The court then considered defendants’ respective motions for summary judgment, starting with United’s motion. As for Count 1, the court concluded that United had exercised reasonable discretion in making its benefits determinations, and that plaintiff had not raised a genuine dispute of material fact as to issues raised in his Section 502(a)(1)(B) claim. Moreover, the court disagreed with Mr. Swartzendruber that United failed to reference adequate materials in making its determination or was otherwise willfully blind in its reading of the plan language. Thus, the court found that United’s decisions were reasonable and the claims were properly billed. The court therefore granted United’s motion for summary judgment as to Count 1. And because Count 3 works in tandem with Count 1, the court agreed with United that it was dependent on an underlying finding that the denial of benefits was improper. Therefore, because Mr. Swartzendruber failed to establish United’s liability under Count 1, the court concluded that he was not entitled to relief under Count 3. Finally, the court addressed Count 2 as asserted against United. This claim was predicated on allegations that United misprogrammed its cost estimate website and mistrained its agents. The court determined that United did not act as a fiduciary either when it provided cost estimates to Mr. Swartzendruber or when it checked the public credentials of network providers. The court therefore granted summary judgment to United on Count 2, without reaching plaintiff’s argument that a material issue of fact remains as to whether United committed a material misrepresentation, or United’s argument that plaintiff’s requested equitable relief is not available. Finally, the court turned to the Sentara defendants’ motion for summary judgment. Ultimately, the court held that Sentara could not be held liable as a non-fiduciary when the court found no breach of fiduciary duty by United. The court thus granted summary judgment to the providers on both ERISA claims asserted against it. For these reasons, the court entered judgment in favor of defendants and closed the case.

Eleventh Circuit

Gomez v. Neighborhood Health Partnership, Inc., No. 1:22-cv-23823-KMW, __ F. App’x __, 2025 WL 2658881 (11th Cir. Sep. 17, 2025) (Before Circuit Judges Lagoa, Abudu, and Wilson). This litigation arises from nasal surgery plaintiff-appellant Abigail Gomez received in October of 2019. Prior to the relevant surgery, Ms. Gomez had undergone three other nasal surgeries to address breathing problems “and subsequent unsatisfactory cosmetic and physiological results.” Before undergoing her procedure, Ms. Gomez sought preauthorization from her healthcare plan with Neighborhood Health Partnership, Inc. The preauthorization form designated Dr. Richard Davis as the treating physician and specified very specific surgical procedures. However, after receiving preauthorization approval, Dr. Davis decided not to perform the procedures because, in his professional opinion, Ms. Gomez’s nose already had experienced a great deal of trauma, which made the risk of complications from cosmetic surgery higher than he was comfortable with. As a result, Dr. Davis referred Ms. Gomez to a colleague, Dr. Jeffrey Epstein. Dr. Epstein determined that he could perform surgery on Ms. Gomez, albeit different procedures from those Dr. Davis had originally contemplated and received preauthorization for. “Gomez never sought to amend the preauthorization form to designate Dr. Epstein as the treating physician, nor did she submit a completely new health services request. Nevertheless, in October 2019, Dr. Epstein performed a nasal surgery consisting of several procedures and then billed Neighborhood Health directly using a different set of procedure codes.” Ultimately, Neighborhood Health informed Ms. Gomez that Dr. Epstein’s operation was not covered because it was cosmetic and not medically necessary, unlike the previously approved procedures. Following an unsuccessful administrative appeal, Ms. Gomez pursued legal action under ERISA. Unfortunately for her, litigation proved just as frustrating, as the district court entered summary judgment in favor of Neighborhood Health. Under arbitrary and capricious review, the lower court found that the denial was reasonable as there were differences between the procedures Dr. Davis originally planned to perform and the ones that Dr. Epstein actually performed, the plan does not contemplate allowing a prior approval for specific health services to automatically transfer to an undesignated treating physician, and the reviewing doctors adequately explained why the surgical procedures performed were cosmetic rather than medically necessary. Ms. Gomez timely appealed. In this unpublished per curiam order the Eleventh Circuit panel affirmed, agreeing with the district court that upon careful review of the record it is clear there was a reasonable basis for the administrator’s decision. Among other things, the court of appeals noted that the “record shows that Neighborhood Health reviewed Gomez’s medical history and the documents she submitted in support of her administrative appeals,” and that both consultant doctors “provided detailed explanations for why the procedures Dr. Epstein performed were not medically necessary or otherwise covered by Gomez’s plan.” Moreover, the Eleventh Circuit emphasized that Ms. Gomez failed to receive preauthorization for the treating provider before undergoing the surgical procedures. It found that she could not rely on the approval Dr. Davis received to rectify this misstep. “There was, therefore, no basis for assuming that an authorization given to an in-network doctor for one procedure would carry over to a different out-of-network doctor for a different procedure.” The Eleventh Circuit was also unconvinced that the procedures Dr. Epstein performed were medically necessary simply because Ms. Gomez had previously suffered from symptoms which qualified her for other nasal surgeries. Nor did the appeals court find it was improper for Neighborhood Health to afford weight to the opinions of the two doctors who completed the appeals review, given the fact that they both considered the documentation provided by Ms. Gomez and explained the bases for their conclusions. Finally, the court rejected Ms. Gomez’s argument that the shifting bases Neighborhood Health provided for the denial of coverage suggested that the decision-making was arbitrary and capricious. Rather, the Eleventh Circuit concluded that Neighborhood Health simply identified multiple deficiencies with the claim, which provided multiple grounds upon which to deny the claim. Based on the foregoing, the appellate court concluded that the district court did not err in concluding that there is no genuine material issue of fact as to whether Neighborhood Health acted arbitrarily and capriciously. Thus, the Eleventh Circuit affirmed.

Pleading Issues & Procedure

Third Circuit

Akopian v. Inserra Supermarkets, No. 23-519, 2025 WL 2636420 (D.N.J. Sep. 12, 2025) (Judge Claire C. Cecchi). This action arises from Inserra Supermarkets’ termination of pro se plaintiff Andrei Akopian from his position as a clerk at the Hackensack, New Jersey ShopRite grocery store in January of 2022. In his complaint Mr. Akopian alleges that his former employer violated the Americans with Disabilities Act (“ADA”). In addition, Mr. Akopian maintains that his union, his former employer, and the fiduciaries of his ERISA-governed benefit plans committed several violations of ERISA. Defendants moved to dismiss Mr. Akopian’s action pursuant to Rule 12(b)(6). The court granted the motions to dismiss, without prejudice, in this order. To begin, the court dismissed the ADA claims against Inserra. The court concluded the ADA claims were insufficiently pled and that as a result, it could not infer that Mr. Akopian’s termination was discriminatory. Moreover, the court dismissed Mr. Akopian’s ADA claims for retaliation and failure to accommodate because he failed to exhaust administrative remedies with respect to these claims. The court then addressed the ERISA claims. Mr. Akopian alleged violations of ERISA against all defendants. He appeared to allege four categories of misconduct under ERISA: (1) that he should have, but did not, receive certain benefits under a healthcare plan offered to part-time ShopRite employees because he remained a part-time employee at a separate ShopRite after his termination from his full-time position at the Hackensack store; (2) that defendants breached their fiduciary duties and engaged in prohibited transactions by mismanaging their ERISA plans; (3) that he was not notified of his eligibility for COBRA benefits within the required period; and (4) that he was retaliated against in violation of Section 510 of ERISA. The court went through each of these categories and explained why Mr. Akopian’s allegations were insufficient at the pleading stage. First, the court said it was unclear from the complaint what benefits, if any, Mr. Akopian was actually denied under the healthcare plan available to part-time employees. Second, the court concluded that the claims of plan mismanagement fail as he does not allege any losses to any plan but instead asserts only individual harms. Third, the court dismissed the COBRA claim because it could not discern from the complaint which plan Mr. Akopian sought to extend through COBRA nor the identity of the plan administrator that allegedly failed to inform him of continued healthcare benefits. Fourth, and last, the court dismissed the Section 510 retaliation claim as it found that the complaint “never asserts that he sought to attain a right under any plan to which he was entitled, but was discharged, fined, suspended, expelled, disciplined, or discriminated against in retaliation.” Given Mr. Akopian’s pro se status, the court dismissed his complaint without prejudice, and allowed him 30 days from the date of its order to file an amended complaint addressing these deficiencies.

Birmelin v. Verizon Pension Plan for Associates, No. 3:24-cv-1369, 2025 WL 2656067 (M.D. Pa. Sep. 16, 2025) (Judge Julia K. Munley). Plaintiff Kelly Birmelin filed a lawsuit in Pennsylvania state court against Verizon and the Verizon Pension Plan for Associates alleging that as the surviving spouse of a former Verizon employee she is entitled to 100% survivor pension benefits under the pension plan. In her action Ms. Birmelin seeks a recalculation of her husband’s time of employment and a declaration that 100% of benefits must be paid under the terms of the plan. Additionally, Ms. Birmelin alleges that defendants breached their contractual requirements of the plan, entitling her to 100% benefits. Ms. Birmelin maintains that she served defendants in the state law action but that they failed to respond to her complaint. As a result, she moved for an entry of default judgment, which the state court entered against Verizon and its pension plan. Ms. Birmelin says she then served the default judgment on defendants by mail. The Verizon defendants, however, have a markedly different narrative. They contend that neither was ever served with the complaint or any other filings in the state court action, and that the service was therefore invalid. Once they learned of the default judgment against them, defendants undertook three actions in short succession. First, they filed a petition to strike the default judgment in state court. Second, before the state court issued any ruling regarding the default judgment, defendants removed the matter to federal court, arguing that the action is completely preempted by ERISA. Finally, they moved to dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(6). Although the court agreed with defendants that this action is governed by and subject to ERISA because it seeks benefits under an ERISA pension plan, it nevertheless deferred ruling on the motion to dismiss given the unusual procedural posture of this case. “After careful consideration of the issues, the court cannot resolve the pending motion to dismiss until it addresses the existence of the state court default judgment. Defendant’s state court petition to strike or open the default judgment is not properly before the court.” Rather, the court held that defendants must file a motion to set aside the state court’s default judgment under Federal Rule of Civil Procedure 60(b). Because defendants have not yet filed an appropriate motion under the Federal Rules of Civil Procedures, the court held off ruling on the motion to dismiss. Instead, it took this opportunity to provide defendants with a 20-day deadline to file the appropriate motion under Rule 60(b).

Fourth Circuit

Estate of Richard Jenkins v. American Funds Distributors, Inc., No. 21-cv-03098-LKG, 2025 WL 2653151 (D. Md. Sep. 15, 2025) (Judge Lydia Kay Griggsby). This action arises from a dispute regarding the proceeds of decedent Richard Jenkins’ two life insurance policies and his 401(k) plan. Mr. Jenkins’ estate and his two daughters allege that defendant American Funds Distributors’ payment of the proceeds from these plans to Jenkins’ widow constituted a breach of contract in that it failed to pay the insurance proceeds to his intended beneficiaries. Plaintiffs pointed to the fact that Mr. Jenkins and his surviving spouse executed a prenuptial agreement, in which she renounced and waived any right or interest in Mr. Jenkins’ property and affirmed that no property would be considered marital property. American Funds Distributors moved for summary judgment on this claim. It argued that the breach of contract claim is preempted by Sections 502(a) and 514(a) of ERISA, and that plaintiffs cannot sustain a viable ERISA claim because they failed to exhaust their administrative remedies. Moreover, American Funds Distributors argued that it is not the plan administrator for the plans and thus is not the proper defendant for any potential ERISA claim for benefits under Section 502(a). The court agreed entirely, and for these reasons granted summary judgment in favor of defendant on the breach of contract claim and dismissed the complaint. The court discussed preemption first. It held that the undisputed material facts in this case show that the breach of contract claim is preempted by ERISA as it relates to employee benefit plans, seeks benefits and rights under those plans, and is not capable of resolution without consulting the plans. The court then concluded that even if the breach of contract claim were recast as a claim for benefits under ERISA, the claim would still fail because American Funds Distributors is not a proper defendant under Section 502(a), and plaintiffs clearly failed to exhaust their administrative remedies or even submit a written claim regarding the benefits at issue to the plan administrator before commencing this action. Based on the foregoing, the court concluded there could be no doubt that American Funds Distributors is entitled to summary judgment on plaintiffs’ claim, be it under state law or ERISA.

Eighth Circuit

Metropolitan Life Ins. Co. v. Mundahl, No. 3:24-CV-03029-RAL, 2025 WL 2682509 (D.S.D. Sep. 19, 2025) (Judge Roberto A. Lange). Joye M. Braun was an employee of Indigenous Environmental Network and a member of the Cheyenne River Sioux Tribe. Through her employment Joye was a participant in group insurance plans including a life insurance and accidental death and dismemberment plan sponsored by TriNet HR XI, Inc. Metropolitan Life Insurance Company (“MetLife”) was the claim administrator and provider of benefits under the plan. Joyce died on November 13, 2022 from cardiac arrest due to a COVID-19 infection. Following her death, her two children, Durin Mundahl and Morgan Brings Plenty (and her husband Floyd Braun, whom she was in the process of divorcing), filed competing claims for the life insurance benefits. Despite Joye’s recent designation of her children as her intended beneficiaries, the plan paid benefits to Mr. Braun. In response, the two children sued MetLife and TriNet in Cheyenne River Sioux Tribal Court asserting various common law non-ERISA claims in connection with the plan. MetLife and TriNet then filed this lawsuit in federal court requesting that the court exercise jurisdiction over the disputes because they involve benefits under an ERISA-governed plan. In addition, plaintiffs asked the federal district court to declare the rights and obligations of these parties regarding the benefits at issue, and to enjoin defendants from attempting to assert jurisdiction over them and proceeding with the case in Cheyenne River Sioux Tribal Court. Plaintiffs moved for a preliminary injunction to prevent Joye’s children from proceeding with their action in tribal court during the pendency of this case. The children, on the other hand, wish to proceed with their case in tribal court and to have this federal case dismissed or stayed. As the court explained, “[t]he motions, briefing and hearing in this case presented issues of whether ERISA governs and preempts the common law claims, whether there is tribal court subject matter and personal jurisdiction over the Plaintiffs, whether this Court should defer to the tribal court to make decisions on ERISA preemption and tribal court jurisdiction, and whether the Dataphase factors merit entering a preliminary injunction.” The court discussed each of these issues in this decision, and ultimately granted plaintiffs’ motion for a preliminary injunction and denied defendants’ motion to dismiss or stay this action. To begin, the court agreed with MetLife and TriNet that the life insurance plan is governed by ERISA and that it is not a governmental plan. Next, the court determined that federal courts do not need to defer to a tribal court to adjudicate claims under an ERISA-governed plan. The court said that “[a]llowing a tribal court to adjudicate an ERISA-governed claim defeats the congressional intent to provide an option for a federal forum for all ERISA claims.” Moreover, the court stated that the fact that the children’s tribal court complaint does not plead an ERISA cause of action does not alter this analysis because the state law claims arise from the ERISA plan and are therefore preempted by ERISA. In addition, the court determined that tribal jurisdiction does not exist under Montana v. United States. “This is not a compelling case for tribal court jurisdiction under Montana to justify deference to the Cheyenne River Sioux Tribal Court, particularly under these circumstances where the claims relate to a life insurance benefit under an ERISA-governed plan.” Accordingly, while the principles of comity and tribal exhaustion would generally require the court to abstain from ruling on a pending action in tribal court, the court concluded that these principles did not apply because “the proceeding would be patently violative of express jurisdictional prohibitions.” The court then considered the motion for preliminary injunction under the Dataphase factors. It concluded that each factor supported plaintiffs. First, the court found that plaintiffs have shown a likelihood of success on the merits to the extent they seek declaratory and injunctive relief, as the claims relate to an ERISA-governed plan and are preempted, and because it is proper for the federal district court to consider the case under the scheme Congress established under ERISA. The court, however, offered no comment on the merits of who should receive the life insurance benefits. Next, the court agreed with plaintiffs that they would be harmed by being forced to litigate in the tribal court because that court lacks jurisdiction over the claim brought before it. The court also found that the balance of equities favors plaintiffs, because defendants will not be harmed since they will be able to pursue claims under ERISA in federal court. Finally, the court held that the public interest favors the “uniform regulatory regime over employee benefit plans.” For these reasons, the court found plaintiffs established entitlement to a preliminary injunction because all the Dataphase factors weigh in their favor. The court then imposed a bond equaling the amount of the life insurance policy in dispute. Thus, as explained above, the court denied defendants’ motion to stay or dismiss this action, granted plaintiffs’ motion for preliminary injunction enjoining defendants from pursuing their action in tribal court, and ordered plaintiffs to provide a $40,000 bond as security for the preliminary injunction.

Provider Claims

Ninth Circuit

Fortitude Surgery Center LLC v. Aetna Health Inc., No. CV-24-02650-PHX-KML, 2025 WL 2645516 (D. Ariz. Sep. 15, 2025) (Judge Krissa M. Lanham). Plaintiff Fortitude Surgery Center LLC provided medical services to individuals covered under healthcare plans insured or administered by Aetna Health, Inc. and Aetna Life Insurance Company. In this action the provider alleges that despite Aetna’s representations that it would cover the services Fortitude planned to provide, Aetna serially denied payment on Fortitude’s submitted bills without warning or explanation, in violation of ERISA and state law. Last May, the court dismissed Fortitude’s lawsuit, concluding that it had provided only scant information supporting its claims. The court permitted Fortitude to amend its complaint, instructing it to provide details about the ERISA and the non-ERISA plans at issue, the plan terms covering the services Fortitude provided to the Aetna-members, and the services that Fortitude provided to those patients. Fortitude went on to amend its complaint, but it “largely ignored those instructions” and provided little additional information in its first amended complaint. Because the court once again found that the ERISA claims lack specificity sufficient to survive a motion to dismiss, the court again dismissed them. Specifically, the court noted the absence of plan-specific information and the very limited information provided regarding the plans and treatments at issue. Nevertheless, the court acknowledged that the amended complaint had moved slightly in the right direction by including a list of ERISA members and the cost of services rendered. Given this slight process, the court exercised its discretion to grant the provider one final opportunity to amend its claims under ERISA, and in fact ordered Aetna to provide the relevant plans, since it indicated it was willing to do so. The court also dismissed the state law claims. It declined to exercise supplemental jurisdiction over them because it was dismissing the federal causes of action, and diversity jurisdiction has not been alleged. However, the court also took the opportunity to point out some obvious flaws it observed in these claims, including that “Fortitude has not pleaded the contracts’ language or relevant provisions, any particular promised rate of reimbursement, or the services Fortitude rendered and the dates on which it did so.” The court therefore dismissed the entire action, with leave to amend.

Tenth Circuit

Abira Medical Laboratories LLC v. Blue Cross Blue Shield Okla., No. CIV-24-1365-D, 2025 WL 2654917 (W.D. Okla. Sep. 16, 2025) (Judge Timothy D. DeGiusti). Plaintiff Abira Medical Laboratories LLC is a healthcare provider of clinical lab testing services. In this action, and many others like it, the provider alleges that its claims for benefits were improperly denied and underpaid in violation of ERISA and state law. Defendant Blue Cross Blue Shield of Oklahoma moved to dismiss the complaint for failure to state a claim and for untimeliness under various statutes of limitations. The court granted in part and denied in part the motion to dismiss. To begin, the court found that the complaint sufficiently alleges each of the elements for breach of contract in Oklahoma, as well as plausible claims for ERISA benefits. The court further agreed with Abira that “it would be unduly burdensome to require Plaintiff to allege violations of specific contract language that is most appropriately found in Defendant’s possession.” Moreover, the court concluded that the discovery process will prove illuminating, and will help clarify which claims are governed by ERISA and which by state law. For these reasons, the court denied the motion to dismiss the breach of contract and ERISA causes of action. Next, the court granted the motion to dismiss the implied covenant of good faith claim, stating that a plaintiff “cannot recover for a separate tort arising out of violating the contracts’ implied covenants of good faith.” Because Oklahoma law prohibits the assignment of a tort claim, the court dismissed this claim with prejudice. Finally, the court addressed the timeliness of the negligent/fraudulent misrepresentation, estoppel, and unjust enrichment/quantum meruit claims. It agreed with Blue Cross that it is evident from the complaint that these claims are time-barred under the relevant two-year limitation period. In addition, the court dismissed any alleged contract or ERISA claims that are premised on actions occurring before December 27, 2019, as those claims are time-barred under the applicable five-year statute of limitations. Therefore, as explained above, the court granted in part and denied in part Blue Cross’s motion to dismiss.

Eleventh Circuit

Abira Medical Laboratories, LLC v. Blue Cross Blue Shield of Florida, Inc., No. 3:23-cv-1092-TJC-SJH, 2025 WL 2644763 (M.D. Fla. Sep. 15, 2025) (Judge Timothy J. Corrigan). In this and many other actions of its kind plaintiff Abira Medical Laboratories, LLC alleges that various health insurance providers and healthcare plans have violated ERISA and state law by failing to reimburse it, either in whole or in part, for medically necessary laboratory diagnostic testing it performed on insured patients. This particular case is brought against Blue Cross Blue Shield of Florida, Inc. In a previous decision the court granted Blue Cross’s motion to dismiss Abira’s complaint, but did so without prejudice. In this order the court dismissed Abira’s amended complaint in its entirety, this time with prejudice. The court first began with the ERISA claim. The court’s earlier decision dismissing Abira’s original ERISA claim explained that the complaint provided no specific information or identified “how many of its patients participated in ERISA plans (or even that any did), the terms and conditions of any ERISA plan, what benefits are allegedly due under an ERISA plan, or whether Abira exhausted administrative remedies.” Abira’s amended complaint, the court determined, suffered from all these same defects. In fact, the court stated, “there is hardly any new information at all.” In light of this, the court dismissed the ERISA claim. It then tackled the state law breach of contract, bad faith, quantum meruit, unjust enrichment, and negligence claims. The court found that each one failed as the complaint does not contain allegations that the medical services were covered under any contract, that Abira complied with the statutory pre-notice requirements to bring a statutory bad faith claim, or that quantum meruit, unjust enrichment, and negligence claims are viable under Florida law. Finally, because Abira already had opportunities to amend its pleadings, the court dismissed the action with prejudice.