SuperValu, Inc. v. United Food & Com. Workers Unions & Emps. Midwest Pension Fund, No. 24-2486, __ F. 4th __, 2025 WL 2860665 (7th Cir. Oct. 9, 2025) (Before Circuit Judges Brennan, Hamilton, and Scudder)

To an outside observer, ERISA’s imposition of “withdrawal liability” on a company that terminates its participation in a multiemployer pension plan may not make sense at first glance. Why do companies have to pay a fee to leave a plan?

The reason is that when a company leaves, the plan still remains liable for the pension benefits of that company’s employees. The cost of funding these pension obligations is thus transferred to the other companies who are still members of the plan. These companies may balk at the increased costs and also leave the plan. In a worst-case scenario, a death spiral is created in which employers flee for the exits as the cost of funding pensions goes higher and higher, and the plan ends up bankrupt.

Congress addressed this problem in the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”) by implementing withdrawal liability. The MPPAA requires a departing company to pay a fee to leave the plan in an amount that represents its fair share of the underfunding caused by its departure.

Of course, the devil is in the details. How much should a departing employer pay? Congress had to walk a fine line with the MPPAA. It needed to impose a fee high enough to avoid death spirals, but could not impose a fee so large that it deterred companies from joining multiemployer plans in the first place.

Congress determined in the MPPAA that a departing company’s fair share should be “based primarily upon the comparative number of that employer’s covered workers in each earlier year and the related level of that employer’s contributions.” The MPPAA provides a series of complex formulas for calculating liability, as well as equally complex formulas for devising a payment schedule for that liability.

But what if a departing company sells some of its business prior to its departure? Does that trigger withdrawal liability, and does it affect how much the employer owes? The MPPAA addresses these issues with its “safe harbor” provisions, which protect employers from withdrawal liability if the acquiring company continues to pay into the fund. The application and reach of these provisions were the subject of this week’s notable decision.

Plaintiff SuperValu, Inc., a supermarket chain, contributed to defendant The Union Food and Commercial Workers Unions and Employers Midwest Pension Fund for more than ten years under various collective bargaining agreements. In September of 2018 SuperValu sold some of its stores. Five of these stores employed workers covered by the Fund, and thus SuperValu was not immediately obligated to pay withdrawal liability under the MPPAA’s safe-harbor rules. However, several months later SuperValu closed its remaining stores, which did trigger withdrawal liability.

The question that arose was how to account for the five sold stores in calculating a payment schedule for SuperValu’s liability. The two primary numbers used in calculating a schedule are a company’s “contribution base units” (i.e., a measurement of employee work time) and its “highest contribution rate” (i.e., how much the company paid per unit). Both of these numbers use a default “lookback period” of ten years.

At the center of the dispute between SuperValu and the Fund was this lookback period. SuperValu argued that the Fund should have deducted the sold stores’ contribution base units through the entire ten-year period in calculating its liability. The Fund disagreed, and only used five years of that period.

SuperValu challenged the Fund’s calculations in arbitration and lost. The district court likewise sided with the Fund, and SuperValu appealed to the Seventh Circuit, which issued this published decision.

The Seventh Circuit rejected SuperValu’s contention that the MPPAA required a fund to “deduct contribution units for asset sales qualifying under safe-harbor § 4204 for the full ten-year lookback period.” In fact, the court observed that the MPPAA’s payment-schedule statute does not refer to the safe-harbor statute at all, and thus SuperValu could not smuggle those provisions in to reduce its payments.

In doing so, the court emphasized that the MPPAA is “an intricate statutory scheme with detailed calculations, all of which came about through the legislative process: a balance of competing interests, legislative compromise, and stakeholder input.” As a result, the court was required to “apply it as precisely as we can, rather than to make adjustments according to a sense of equities in a particular case.”

The court stressed that the payment-schedule statute contained several exceptions and references to other provisions, but the safe-harbor rules were conspicuously absent. As a result, “Congress likely intended the operative provision not to refer to safe-harbor § 4204.”

SuperValu pointed out that the Fund had made deductions based on the safe-harbor provision, and therefore it must apply in some way. The court disagreed, however. It noted that the Fund’s interpretation was not binding on it, and “not relevant to the meaning of the statutory text.” Indeed, the court stated that “the Fund incorrectly relied on safe-harbor § 4204 for its decision to deduct the Sold Stores’ contribution units for just some of the preceding ten years…the text of payment-schedule § 4219 does not require the Fund to deduct at all.”

SuperValu further contended that the safe-harbor provision must factor somehow into payment schedule calculations because the purpose of the safe harbor is to prevent funds from obtaining double recoveries. However, the court provided three responses to this.

First, the court stated that its interpretation of the payment-schedule statute would not in fact lead to double recoveries. “Our interpretation does not change the dollar amount SuperValu owed… changing the schedule for how SuperValu pays its withdrawal liability does not alter the total amount of that liability.” Second, even if there might be a double recovery, the court stated that this was simply the cost of having a rules-based, and not a standards-based, method of calculation. Strict rules might sometimes lead to “an inflexible equation that fails to account for fairness in its calculation,” but such rules are also easier to administer, and that was Congress’ choice to make. Third, the court ruled that fairness was beside the point. The court held that “we must still adhere to the statute’s text.” The court simply was not permitted to adapt its interpretation in accordance with the “policy-driven approach” proposed by SuperValu: “Courts must ‘read’ a statute ‘the way Congress wrote it.’”

In the end, the Seventh Circuit concluded that the safe-harbor provision was not relevant to calculating SuperValu’s withdrawal liability payment schedule. SuperValu’s policy arguments, regardless of how persuasive they were, were no match for the court’s strict textualist approach. Simply put, “The text of the operative provision in payment-schedule § 4219 prescribes a detailed calculation. That text does not reference safe-harbor § 4204.” As a result, the Seventh Circuit affirmed and the Fund’s calculations remained undisturbed.

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

Class Actions

First Circuit

Cure v. Factory Mutual Ins. Co., No. 1:23-cv-12399-JEK, 2025 WL 2881695 (D. Mass. Oct. 10, 2025) (Judge Julia E. Kobick). Plaintiffs Edward Cure and Jeffrey Cooper commenced this putative class action against the fiduciaries of the Factory Mutual Global 401(k) Savings Plan alleging that they breached their duties under ERISA by incurring excessive recordkeeping and administrative fees and by imprudently selecting and retaining underperforming investments. After discovery began the parties engaged in private meditation and agreed upon settlement terms. Pending before the court here was plaintiffs’ unopposed motion for preliminary certification of the settlement class and preliminary approval of class action settlement. The court began with class certification. It determined that for the purposes of settlement, plaintiffs sufficiently satisfied the requirements of Rules 23(a) and (b)(1)(B) to certify a class comprised of plan participants and their beneficiaries during the class period. The court held that numerosity is satisfied because joinder of the 6,000-member class is impracticable. In addition, the court agreed with plaintiffs that there are common questions of law and fact that apply across the class, including whether defendants breached their fiduciary duties to the plan and whether the plan suffered losses as a result of those breaches. Next, the court concluded that the claims and defenses of the class representatives are typical of those of the absent class members because they all concern defendants’ management and administration of the plan and arise from the same course of conduct. As for adequacy, the court found that the representative parties will fairly and adequately protect the interests of the class as there are no intra-class conflicts and class counsel are qualified and experienced ERISA litigators. Finally, the court determined that separate lawsuits by individual members of the class would have the practical effect of impacting the interests of the other members as well. The court added that this type of case is a classic example of an action appropriately certified under Rule 23(b)(1)(B). For these reasons, the court preliminarily certified the proposed settlement class, and appointed Walcheske & Luzi, LLC and Jonathan Feigenbaum as interim class counsel and the named plaintiffs as class representatives. The court then assessed the fairness of the proposed settlement of $750,000. It concluded that the settlement is the product of an informed arm’s length negotiation without any collusion between the parties and that it will provide adequate relief to the class, particularly when compared to the risk, cost, and delay of continued litigation. Furthermore, the court found the amount of the settlement, representing 37.5% of the demanded claims concerning the recordkeeping and administrative fees, reasonable even without assigning a value to the challenged investments and the claims related to them. Last, the court agreed with plaintiffs that the proposed settlement treats the class members equitably. Accordingly, the court granted plaintiffs’ unopposed motion for preliminary approval of their class action settlement. Finally, the court approved of the parties’ proposed notice and their plan for issuing it, and scheduled a final fairness hearing for March 12, 2026.

Disability Benefit Claims

Seventh Circuit

Pasha v. Kohler Co., No. 24-cv-0836-bhl, 2025 WL 2840242 (E.D. Wis. Oct. 7, 2025) (Judge Brett H. Ludwig). Plaintiff Gabrielle Pasha filed this action to challenge defendant Kohler Co.’s decision to terminate her long-term disability benefits in 2023. In this decision the court entered summary judgment in favor of Kohler, concluding that Kohler’s actions did not deny Ms. Pasha a full and fair review of her claim and that the denial itself was not arbitrary and capricious. As an initial matter, the court agreed with Kohler that it did not need to include six emails communicating with the company’s attorney about Ms. Pasha’s disability claim in the administrative record, because the fiduciary exception does not apply to them. The court stated, “[b]y the time Kohler sought legal advice through the emails at issue here, the parties’ interests had already diverged,” and this placed “the communications squarely within the attorney-client privilege.” The court then discussed Ms. Pasha’s arguments challenging the termination of her benefits as arbitrary and capricious. She argued that Kohler failed to provide her a full and fair review by applying a shifting standard to its interpretation of the material and substantial duties of her occupation and by failing to provide her with new and additional information as required under 29 C.F.R. § 2560.503-1(h)(4)(i). The court disagreed on both points. It concluded that Kohler used a reasonably consistent description of Ms. Pasha’s job duties throughout the administration of her claim and that it did not deprive her of a reasonable opportunity for a full and fair review of her claim through the timing of its disclosures. Moreover, the court did not find Kohler’s decision to reverse its earlier grant of benefits problematic. Instead, it agreed with Kohler that it simply changed its mind and reversed its previous grant of long-term disability benefits after conducting a fuller review of Ms. Pasha’s medical records. Finally, the court concluded that Kohler’s reviewing doctors appropriately explained the reasons they rejected or disagreed with key pieces of evidence in the record, including the results of a functional capacity examination. In sum, the court determined that the circumstances did not show that Kohler acted unreasonably, or that its denial was an abuse of discretion. Accordingly, the court denied summary judgment for Ms. Pasha and instead granted judgment for Kohler.

Discovery

Second Circuit

Gannon v. Hartford Life & Accident Ins. Co., No. 3:24-cv-01955 (VAB), 2025 WL 2886648 (D. Conn. Oct. 3, 2025) (Judge Victor A. Bolden). Plaintiff Jennifer Gannon, M.D., moved to compel discovery from defendant Hartford Life and Accident Insurance Company. Dr. Gannon’s discovery requests fell into two categories: procedural irregularities and conflict of interest. The court reviewed each in this decision. To begin, the court held that Dr. Gannon is entitled to her requested discovery that specifically conforms with her entitlement to evidence under ERISA’s claims procedure regulation. As a result, the court permitted her discovery requests to the extent they are subject to disclosure under 29 C.F.R. §§ 2560.503-1(j)(3) and (m)(8). However, the court denied the remainder of Dr. Gannon’s motion, both as it related to alleged procedural irregularities and information regarding Hartford’s conflict of interest. The court determined that Dr. Gannon failed to make a good showing that her claim was unfairly handled or that Hartford’s structural conflict of interest adversely affected her. As a result, the court did not permit discovery into this extra-record evidence.

Ninth Circuit

Scentsy, Inc. v. Blue Cross of Idaho Health Service, Inc., No. 1:23-cv-00552-AKB, 2025 WL 2855395 (D. Idaho Oct. 8, 2025) (Judge Amanda K Brailsford). In early 2022 a participant of the Scentsy, Inc. health plan became seriously ill. That illness led to millions of dollars’ worth of medical bills. Defendant Blue Cross of Idaho served as the administrator of Scentsy’s self-insured health plan and also as its excess-loss insurer. Under the terms of the plan Blue Cross would pay claims exceeding $200,000. However, Blue Cross’s obligation to pay this excess amount was limited to services rendered, billed, and paid within a fixed fifteen-month period. In this lawsuit Scentsy alleges that Blue Cross intentionally delayed processing some of the plan participant’s claims until they were outside the fifteen-month fixed period for excess coverage in order to get out of paying the excess amount. In its complaint Scentsy, Inc. alleges claims for relief against Blue Cross for breach of fiduciary duties under Sections 502(a)(2) and (a)(3) of ERISA, and under Idaho common law for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and insurance bad faith. Pending before the court was Scentsy’s motion to compel in which it sought production of the patient’s billing records as well as documents supporting Blue Cross’s defense that ERISA is inapplicable. The court separated the two categories and addressed them individually, beginning with the plan participant’s billing records. Rather than produce the billing records, Blue Cross responded to the request for production with summaries of its handling of the patient’s claims. The court concluded that the requested documents are necessary to discover the reasons that Blue Cross may have treated some claims differently than others “despite that the claims were allegedly for the same Patient receiving the same services for the same illness at the same hospital and clinics in the same general timeframe.” Indeed, the court noted that Blue Cross had essentially conceded that the information is relevant by producing a summary of it. However, the court disagreed with Blue Cross that its production of a summary of the discovery documents was adequate or that Scentsy must rely on Blue Cross’s summary instead of receiving the documents themselves. Thus, the court held that the billing records were discoverable regardless of Blue Cross’s production of a summary of the same information. Accordingly, the court granted the motion to compel to the extent it sought production of all documents and communications concerning any and all billing records for the plan participant. The court then turned to the documents related to Blue Cross’s defense in support of its legal contention that its fiduciary duties under ERISA are inapplicable. These documents, the court stated, are ones Blue Cross is already obligated to produce under Rule 26 of the Federal Rules of Civil Procedure, as Rule 26 provides that a defendant must produce all documents it may use to support its defense “unless the use would be solely for impeachment” and that a defendant must timely supplement its disclosure. Because these documents must be produced under Rule 26(e) regardless of the request for production, the court declined to grant the motion to compel responses seeking the same. Consequently, the court granted in part and denied in part Scentsy’s motion to compel. Finally, the court ended its decision by requiring the parties to bear their own fees and costs related to the discovery motion.

ERISA Preemption

Second Circuit

Jeffrey Farkas, M.D., LLC v. United Healthcare Ins. Co., No. 23-CV-9015 (EK)(AYS), 2025 WL 2822686 (E.D.N.Y. Oct. 3, 2025) (Judge Eric Komitee). Plaintiff Jeffrey Farkas, M.D., LLC is a medical practice made up of a team of neurologists. This litigation stems from brain surgery Farkas physicians performed on a patient insured by United Healthcare in June 2019. Farkas alleges that United underpaid its billed claims for the surgery based on a promise it made on August 16, 2019 authorizing an in-network gap exception. In the operative third amended complaint, plaintiff asserts two state law claims for promissory estoppel and tortious interference with contract. United moved to dismiss both causes of action. In this order the court granted the motion to dismiss, and dismissed the complaint without further leave to amend. To begin, the court addressed the issue of ERISA preemption. The court concluded that the tortious interference claim was subject to express preemption under Section 514(a), while the promissory estoppel claim was not. As far as the promissory estoppel claim was concerned, the court agreed with Farkas that it relied on a promise by United subsidiary Oxford Health Insurance that it would be paid according to industry custom, and that such a claim is not preempted because it does not implicate the plan. The court held that “the determination of both liability and damages on a promissory estoppel claim would proceed independently of the plan’s terms,” and that in the end this was “simply a suit between a third-party provider and an insurer based on the insurer’s independent promise.” Regarding the tortious interference claim, however, the court concluded that the patient’s ERISA-governed health plan would be “front and center in the determination of whether [United] had a ‘lawful purpose’ for describing the patient’s financial obligations as it did in the ‘explanation of benefits’ letter. In this vein, the Court would need to determine whether plan terms were ‘properly applied’ to determine liability.” However, the fact that one of Farkas’s claims survived the preemption analysis did not ultimately help it, as the court concluded that regardless of preemption both claims failed on the merits. One problem was that the promise on which Farkas claims to have relied post-dated the surgery. Thus, the court held that the timeline of events as pled does not adequately allege reasonable reliance on defendant’s communications because the provider could not have changed its position as a consequence of the promise. Moreover, the court stated the complaint failed to plead a sufficiently clear and unambiguous promise, and that this too doomed the promissory estoppel claim. As for the tortious interference claim, in addition to being preempted by ERISA, the court identified three further flaws with it: (1) Farkas failed to plausibly plead that it entered into a contract with the patient; (2) it did not adequately allege that any interference was intentional or improper; and (3) the complaint included no allegation that a breach would not have occurred but for United’s representations. Taken together, the court agreed with United that the complaint failed to state plausible claims upon which relief may be granted. It thus granted the motion to dismiss, and because Farkas has already had several opportunities to amend, did so with prejudice.

Third Circuit

The Plastic Surgery Center, P.A. v. United Healthcare Ins. Co., No. 24-10033 (MAS) (TJB), 2025 WL 2830531 (D.N.J. Oct. 6, 2025) (Judge Michael A. Shipp), The Plastic Surgery Center, P.A. v. United Healthcare Ins. Co., No. 24-10036 (MAS) (TJB), 2025 WL 2841134 (D.N.J. Oct. 7, 2025) (Judge Michael A. Shipp). This week the court issued two nearly identical decisions in lawsuits brought by The Plastic Surgery Center, P.A. against United Healthcare Insurance Company seeking the outstanding balances of medical bills for care it provided to two individual patients, S.K. and J.O., insured under medical benefit plans administered by United. In each lawsuit the provider includes three counts against United for breach of contract, promissory estoppel, and negligent misrepresentation. United moved to dismiss all three causes of action in both lawsuits. It argued in its motions to dismiss that the factual allegations supporting the purported contracts are refuted by the transcripts of the calls at issue and by the other correspondence between the parties, that the state law claims are expressly preempted by ERISA, and that the complaints fail to state claims upon which relief can be granted. The court found in each action that the factual allegations in the complaints were not refuted by the pre-authorization communications, that ERISA does not preempt the claims, and that the provider sufficiently pled claims for breach of contract and promissory estoppel but not for negligent misrepresentation. Regarding ERISA preemption, the court concluded that the claims at issue neither make reference to the ERISA-governed healthcare plans nor have an impermissible connection with them. The court agreed with plaintiff that its claims won’t require construction of the plans or the interpretations of their terms, because they don’t arise from the plans, but rather from independent single case rate agreements that the parties allegedly entered into over the phone. “Since Plaintiff’s claims are predicated on an independent contractual or quasi-contractual duty, and not on the Plan itself, § 514 does not preempt Plaintiff’s state law claims.” Thus, under the facts and circumstances of the two cases, the court concluded that the state law claims are not preempted by ERISA. The court further determined that in each of the two lawsuits, The Plastic Surgery Center adequately alleged each of the elements of its breach of contract and promissory estoppel claims under New Jersey law. Accordingly, the court denied United’s motions to dismiss these causes of action in both lawsuits. However, the court found that neither negligent misrepresentation claim could proceed because plaintiff’s allegations stem directly from United’s performance under the contracts and are therefore barred by the economic loss doctrine. Thus, in both actions, the court granted United’s motions to dismiss insofar as they applied to the negligent misrepresentation claims, but otherwise denied the motions.

Rabinowitz v. Cigna Health & Life Ins. Co., No. 2:24-cv-9492 (BRM) (CF), 2025 WL 2886365 (D.N.J. Oct. 10, 2025) (Judge Brian R. Martinotti). In this action Dr. Sidney Rabinowitz, M.D., is challenging Cigna Health and Life Insurance Company’s rate of payment for medically necessary breast reconstructive surgery he performed on an insured patient in 2021. In his one-count complaint alleging a single claim for promissory estoppel, Dr. Rabinowitz maintains that Cigna made a clear and definite promise to reimburse him at either the out-of-network billed rate or, alternatively, at an agreed-upon rate of compensation during a pre-authorization phone call he made seeking approval of a “gap exception” prior to the procedure. Cigna filed a motion to dismiss the claim. It argued that the state law cause of action is expressly preempted by Section 514 of ERISA and that the complaint fails to allege a cognizable promissory estoppel claim. The court disagreed on both points. First, the court found that the promissory estoppel claim is not preempted under Section 514 because it neither refers to nor connects with the ERISA plan, but is instead based on a promise that is separate and apart from the plan. Second, the court found that at least for the purposes of defeating a motion to dismiss under Rule 12(b)(6), the complaint sufficiently alleges a clear and definite promise made during the preauthorization call wherein Cigna guaranteed to pay Dr. Rabinowitz at either the out-of-network billed rate or, alternatively, at an agreed-upon rate of compensation. Therefore, having concluded that ERISA does not preempt Dr. Rabinowitz’s claim and the complaint plausibly alleges the promissory estoppel claim, the court denied the motion to dismiss.

Ninth Circuit

Wagoner v. JPMorgan Chase & Co., No. CV-25-02826-PHX-DWL, 2025 WL 2837422 (D. Ariz. Oct. 7, 2025) (Judge Dominic W. Lanza). Pro se plaintiff Gary L. Wagoner is a licensed physician who has filed an array of lawsuits in Arizona small claims court against sponsors of healthcare benefit plans to challenge their benefit payments. In this particular action, Mr. Wagoner has sued JPMorgan Chase & Company as an assignee of his patient alleging various state law causes of action for improperly denied benefit claims. JPMorgan Chase removed the lawsuit to federal court, arguing that the state law claims are completely preempted by ERISA. Plaintiff moved to remand the action. In keeping with decisions issued by other district courts overseeing Mr. Wagoner’s lawsuits, the court here denied the remand request because it determined that at least one of the causes of action, the unjust enrichment claim, is completely preempted by ERISA. Applying the two-prong Davila test, the court found that the unjust enrichment claim could have been brought under Section 502(a)(1)(B) of ERISA because plaintiff is suing in his capacity as an assignee of his patient and no independent legal duty is implicated by defendant’s actions because the alleged legal violations in the complaint are predicated on JPMorgan’s wrongful denial of reimbursement under the ERISA-governed health-related benefit plan. Accordingly, the court concluded that removal was proper and remanding to state court was not.

Exhaustion of Administrative Remedies

Sixth Circuit

Marshall v. Blake, No. 3: 25-cv-00090, 2025 WL 2881161 (M.D. Tenn. Oct. 9, 2025) (Magistrate Judge Jeffrey S. Frensley). Pro se plaintiff Mary E. Marshall brings this action against her former employer, United Parcel Service (“UPS”) and her former supervisor, Matthew Blake, alleging violations of ERISA and breach of oral contract stemming from her pension election and subsequent retirement. Defendants moved to dismiss the complaint. They argued that the breach of oral contract claim is expressly preempted by ERISA, that Ms. Marshall cannot pursue her claim for benefits because she failed to exhaust her administrative remedies, and that she fails to adequately allege any fiduciary breach. Defendants’ motion was referred to Magistrate Judge Jeffrey S. Frensley. In this report and recommendation Judge Frensley recommended that the court grant the motion to dismiss and dismiss the action with prejudice. To begin, the Magistrate Judge agreed with the UPS defendants that the state law claim is expressly preempted by ERISA as it relates to UPS’s purported denial, interruption, or stoppage of her pension benefits under her ERISA-governed plan. Next, Judge Frensley determined that the complaint should be barred for failure to exhaust administrative remedies. “Plaintiff’s complaint demonstrates she did not pursue or attempt to pursue administrative remedies prior to filing suit. Nor does she allege any facts demonstrating exhaustion or justifying any exception to the exhaustion requirement. The undersigned is unwilling to assume futility. Plaintiff’s response fails to address defendants’ argument concerning exhaustion nor does it include documentation that she pursued administrative remedies. The undersigned therefore recommends Plaintiff’s claims be dismissed as barred for failure to exhaust administrative remedies.” Finally, the Magistrate stated that he does not construe the complaint as alleging any plausible claims for breach of fiduciary duty as it makes no specific factual allegations in support of such claims. Consistent with these holdings, Judge Frensley recommended that the complaint be dismissed with prejudice.

Life Insurance & AD&D Benefit Claims

Sixth Circuit

Stacy v. Hartford Life and Accident Ins. Co., No. 4:25-cv-6, 2025 WL 2860049 (E.D. Tenn. Oct. 9, 2025) (Judge Travis R. McDonough). Quentin Stacy and Steven Henley were the designated beneficiaries of a life insurance policy issued to Savannah Johnson. In 2022, Mr. Henley shot and killed Mr. Stacy. The following year, Ms. Johnson died of natural causes. After Ms. Johnson’s death, Amanda Stacy, as the executor of Quentin Stacy’s estate, brought this action in Tennessee state court to collect the insurance proceeds that Mr. Henley may claim under Ms. Johnson’s policy. Because the life insurance policy is governed by ERISA, Hartford Life and Accident Insurance Company removed the action to federal court. It then asserted an interpleader crossclaim and counterclaim against Ms. Stacy and Mr. Henley. In this decision the court ruled on two unopposed motions before it: (1) Hartford’s interpleader motion to deposit funds and for dismissal, and (2) Ms. Stacy’s motion for judgment on the pleadings. First, the court granted Hartford’s motion. The court concluded that Hartford properly invoked interpleader under Rule 22, that it did not act in bad faith, and that there is no reason why Hartford should be prevented from depositing the funds and be dismissed from these proceedings. Next, the court discussed Ms. Stacy’s motion for judgment on the pleadings. She argued that the court should award her any portion of the proceeds due to Mr. Henley under the policy because he is precluded from recovering under Tennessee’s slayer statute as the killer of the other beneficiary of the policy. Mr. Henley waived any opposition to this assertion. As a result, the court held that his “admission that he is barred from the Policy’s proceeds and failure to oppose Stacy’s motion for judgment on the pleadings constitute sufficient grounds to grant Stacy’s motion.” The court therefore granted Ms. Stacy’s motion for judgment and ordered the benefits be paid to her.

Pension Benefit Claims

Third Circuit

Carr v. Jefferson Defined Benefit Plan, No. 24-2574, __ F. App’x __, 2025 WL 2888014 (3rd Cir. Oct. 10, 2025) (Before Circuit Judges Hardiman, Krause, and Chung). Plaintiff-appellant Alice Carr worked at Abington Memorial Hospital as a part-time employee from 1997 to 2013. As an employee she participated in Abington’s pension plan. Under the plan, a participant would vest after completing 1,000 or more hours of qualifying work in a calendar year for at least five years. Ms. Carr was denied pension benefits under the plan because the plan administrator determined that she did not have enough service hours for one of the five years. This litigation followed. Ms. Carr asserted three causes of action: (1) a claim for pension benefits; (2) a claim for statutory penalties for failure to provide a pension benefit statement upon written request; and (3) a claim for breach of fiduciary duty seeking the equitable relief of surcharge. The district court dismissed the breach of fiduciary duty claim, reasoning that Ms. Carr’s fiduciary breach claim was really “a claim for her pension benefits dressed in the cloak of equity.” Twenty-eight days later Ms. Carr filed a motion to alter or amend that judgment under Rule 59(e), but the district court denied her motion, concluding that it was untimely because it was actually a motion for reconsideration governed by the fourteen-day filing deadline under Local Rule 7.1(g). The parties then filed cross-motions for summary judgment as to counts one and two. The court entered summary judgment in favor of defendants on the pension benefits claim, but awarded Ms. Carr a $4,070 monetary penalty because the administrator provided her pension benefit statement thirty-seven days late. (Your ERISA Watch covered this decision in our August 14, 2024 edition.) Ms. Carr subsequently appealed. In this unpublished decision the Third Circuit affirmed all aspects of the district court’s decisions. To begin, the appeals court determined that the district court appropriately dismissed the equitable claim for breach of fiduciary duty because it did not truly seek relief that was separate and distinct from that of count one. The Third Circuit agreed with the lower court that in both counts Ms. Carr “sought the same thing using different words.” It declined to consider two hot-button issues that are the subject of splits among the Circuits: (1) whether a surcharge may be an appropriate equitable remedy, and (2) whether ERISA plaintiffs may plead alternative claims under ERISA §§ 502(a)(1) and (a)(3). The panel stated that this appeal does not require it to reach either of these controversial issues because, as the district court had found, the use of the term “surcharge” here is nothing more than an artful pleading intended to reframe the request for maximum retirement benefits as an equitable claim. “And this sort of ‘lawyerly inventiveness’ cannot pass muster under ERISA § 502(a)(3).” Thus, the Third Circuit affirmed the dismissal of the fiduciary breach claim. Moreover, the court disagreed with Ms. Carr that the district court erred in dismissing this claim without allowing her to amend her complaint, stating, “there is no requirement that district courts sua sponte grant leave to amend before dismissing a claim.” Additionally, the court of appeals agreed with the district court’s decision to construe Ms. Carr’s purported Rule 59(e) motion as a motion for reconsideration. Nor did the court agree with Ms. Carr that the district court had erred in holding that the requested personnel and wage records were outside the scope of ERISA § 105(a). The remainder of Ms. Carr’s arguments were similarly unpersuasive. Accordingly, the Third Circuit affirmed the district court’s orders and judgment.

Pleading Issues & Procedure

Eighth Circuit

Meilstrup v. Standing Rock Sioux Tribe, No. 1:25-cv-162, 2025 WL 2877904 (D.N.D. Oct. 9, 2025) (Judge Daniel L. Hovlan). Plaintiff Jay Meilstrup is a former employee of a casino owned and operated by the Standing Rock Sioux Tribe. On February 27, 2025, Mr. Meilstrup’s wife was admitted to a hospital in Pennsylvania for cancer treatment. The next day, Mr. Meilstrup met with the Tribe’s director of human resources and the Tribe’s Vice Chair to discuss options for taking leave while his wife completed her tests and procedures. These individuals agreed to allow Mr. Meilstrup to take unpaid leave until April 1, 2025. However, the Tribe disagreed and concluded that the two men did not have the authority to approve the leave. While Mr. Meilstrup was away in Pennsylvania taking care of his wife, the Tribe held a council meeting to decide what to do. At the meeting the Tribe voted to terminate Mr. Meilstrup for cause due to breach of contract for failure to follow tribal policies due to his extended work absence. Making matters worse, on April 7 Mr. Meilstrup and his wife learned through hospital staff that their health insurance had been terminated as of March 31. As a result, upcoming procedures had to be postponed. Mr. Meilstrup contacted the HR director, who informed him that his health insurance coverage ended in March due to his termination. Mr. Meilstrup then contacted a Paycom representative to sign up for Consolidated Omnibus Budget Reconciliation Act (“COBRA”) coverage, and was later notified that his COBRA coverage was denied because he had been terminated for “gross misconduct.” Mr. Meilstrup alleges the Tribe’s actions in misrepresenting and mishandling his termination caused delays and disruptions to his wife’s medical care. On July 8, 2025, he initiated this action under ERISA and state common law to challenge the Tribe’s conduct. Defendants moved to dismiss the complaint for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. The court granted in part and denied in part the motion to dismiss. To begin, the court rejected defendants’ contention that Mr. Meilstrup did not plead an ERISA claim. “The complaint alleges that the Defendants improperly canceled Meilstrup’s health insurance coverage prior to his notice of termination and denied COBRA coverage that he was entitled to following his termination. Meilstrup alleges that he incurred medical bills and his wife’s cancer treatment was significantly disrupted and delayed. At this early stage of the case, the Court finds Meilstrup has pled sufficient facts in his complaint to support an ERISA claim.” Additionally, the court agreed with Mr. Meilstrup that Congress’ 2006 amendments to ERISA constitute an unequivocal waiver of sovereign immunity for tribal employee plans that perform commercial functions. Because this case involves the Tribe’s plan for its casino employees, the court held that ERISA applies to Mr. Meilstrup’s health insurance plan, as the casino undoubtedly performs a commercial function. Thus, as a matter of law, the court concluded that defendants’ operation of a non-governmental plan waived their sovereign immunity as to Mr. Meilstrup’s ERISA claim. Furthermore, the court found that the tribal court does not have jurisdiction over the ERISA claim and that jurisdiction over the ERISA claim lies with it. The court stressed that the text of ERISA does not give tribal courts concurrent jurisdiction, and stated that there is every indication to suggest Congress intended to provide a federal forum to handle all ERISA claims. Accordingly, the court denied defendants’ motion to dismiss Mr. Meilstrup’s ERISA claim. However, the court found the common law claims a different matter. In contrast to the ERISA claim, the court held that these claims required Mr. Meilstrup to plead waiver of sovereign immunity, which he failed to do, and that the tribal court has jurisdiction over them under Montana v. United States, 450 U.S. 544 (1981). Thus, the court agreed with defendants that these claims must be dismissed. Accordingly, the court granted the motion to dismiss the common law causes of action but denied the motion as to the ERISA claim.

Statute of Limitations

Fourth Circuit

Johns v. Morris, No. 5:23-CV-324-D, 2025, __ F. Supp. 3d __, WL 2840311 (E.D.N.C. Sep. 29, 2025) (Judge James C. Dever III). Plaintiff Bryan J. Johns initiated this action on June 16, 2023 against the fiduciaries of the Morris and Associates Employee Stock Ownership Plan (“ESOP”), alleging breaches of fiduciary duty for (1) undervaluing the ESOP’s stock, (2) allowing excessive use of corporate assets for personal benefit and excessive compensation, and (3) managing the ESOP and the Company for the benefit of the Company’s Chief Executive Officer and the Chairman of its Board of Directors, William F. Morris, III, and his family at the expense of the ESOP and its participants. Defendants moved to exclude the opinions of Mr. Johns’ experts and also filed a motion for summary judgment. In their summary judgment motion defendants argued that the claims are time-barred, that Mr. Johns lacks Article III standing, that he has insufficient support in the record for his claims, and that as a former plan fiduciary himself Mr. Johns has unclear hands or acted in pari delicto. In this decision the court granted defendants’ motion for summary judgement and denied as moot the Daubert motions. The court first addressed the statute of limitations. Under ERISA, breach of fiduciary duty claims are subject to a three-year statute of limitations when the plaintiff has actual knowledge of the breach or violation. In order to trigger the three-year statute in the Fourth Circuit, defendants were required to show that Mr. Johns had actual knowledge of the essential facts that constituted a breach of fiduciary duty. The court found they were able to do so. The court concluded that no later than September 2019, Mr. Johns knew the essential facts giving rise to his claim relating to the company’s valuation practices. Because he did not file his action until June 16, 2023, the court agreed that his first claim was filed after the three-year statute of limitations expired. So too for counts two and three. Mr. Johns alleged in those counts that defendants breached their fiduciary duty of prudence by allowing the use of company assets for personal benefit and excessive compensation. But the court agreed with defendants that Mr. Johns knew about the company’s compensation structure, pay practices, and charitable contribution policies throughout his fifteen-year employment at the company and during his tenure as a plan trustee and company president. Thus, the court held that Mr. Johns “long knew about that which he now complains, and he cannot avoid the three-year statute of limitations.” Alternatively, the court agreed with defendants that Mr. Johns lacks standing to pursue his three claims regarding the ESOP valuations and dividends as he is not entitled to a distribution from the plan until the end of 2028, and that distribution will be based on an annual valuation of fair market value conducted that same year. As a result, the court determined that his claim that he will be paid less than fair market value because of defendants’ conduct “is necessarily speculative.” Because of these holdings, the court did not address the parties’ remaining arguments about the sufficiency of the claims or defendants’ in pari delicto defense, nor did it discuss defendants’ motions to exclude the expert testimony. Instead, the court entered summary judgment in favor of defendants on all claims.