Happy holidays to all our readers! It was a busy week in the federal courts, and as a result our gift to you is not just one, but two, cases of the week. Even better, both are published appellate decisions diving into the murky waters of arbitration. One of them (Aramark) even addresses a bonus issue: the evergreen topic of whether money damages can constitute appropriate equitable relief under ERISA. Don’t say we never got you anything!

The first decision is Williams v. Shapiro, No. 24-11192, __ F.4th __, 2025 WL 3625999 (11th Cir. Dec. 15, 2025) (Before Circuit Judges Jordan and Newsom, and District Judge Charlene Edwards Honeywell). This case involves the “effective vindication” doctrine, with which our readers are undoubtedly familiar by now. The doctrine is a legal principle that invalidates arbitration agreement provisions if they operate as a prospective waiver of a party’s substantive statutory rights and remedies.

This doctrine has been intermittently recognized by the Supreme Court, but the court has never actually applied it to invalidate any arbitration provisions. Nonetheless, the doctrine has found a home in recent years in the ERISA context, as plan sponsors have attempted to use arbitration agreements to avoid class action lawsuits for breach of fiduciary duty.

The conflict arises because ERISA authorizes plan participants to sue in a representative capacity on behalf of the entire plan to recover plan-wide losses, while many arbitration clauses require claims to be brought only in an individual capacity, barring any relief that would benefit anyone other than the claimant. Federal appellate courts have repeatedly ruled that such clauses are unenforceable under the effective vindication doctrine because they eliminate a substantive statutory right to pursue plan-wide remedies. (Your ERISA Watch has covered all of these decisions, from the Second, Third, Sixth, Seventh, Ninth, and Tenth Circuits.)

This leads us to our co-case of the week from the Eleventh Circuit. Would they agree with their sister courts or strike a bold new path?

The case involved a company called A360, Inc., which established a defined contribution employee stock ownership plan (ESOP). In 2019, A360 and its trustee sold the plan’s A360 shares to A360 Holdings, LLC for approximately $34.6 million. At the same time, it added an “ERISA Arbitration and Class Action Waiver” requiring all “Covered Claims,” including fiduciary breach claims, to be arbitrated individually and barring group/class/representative proceedings. Remedies were limited to relief solely for the claimant’s individual account and could not benefit others or bind plan fiduciaries as to others. The clause also provided non-severability: if any of its requirements were unenforceable, the entire arbitration section would be null and void.

Several ESOP participants were not happy. They filed suit in 2022, alleging that defendants violated several ERISA provisions with the sale. They contended that the plan lost $35.4 million because the true value of the stock was $70 million, and sought equitable relief on behalf of the plan as a whole, including disgorgement of profits, restitution for losses to the plan, reformation of the plan, and rescission of the stock purchase agreement.

Defendants filed a motion to compel arbitration, which the district court denied based on the effective vindication doctrine. The court ruled that the arbitration clause impermissibly barred ERISA-authorized plan-wide relief and was non-severable. (Your ERISA Watch covered this decision in our March 27, 2024 edition.) Defendants appealed.

The Eleventh Circuit admitted, “It is true that neither we nor the Supreme Court have applied the doctrine to strike down an otherwise enforceable arbitration provision.” However, “whether we think judge-made doctrines are generally appropriate or wise is of little importance when the United States Supreme Court repeatedly acknowledges a doctrine’s existence.”

Indeed, the Eleventh Circuit noted that its case law had already “recognize[d] the existence of the effective vindication doctrine.” Furthermore, the doctrine “has been applied to the waiver of ERISA statutory rights by six of our sister circuits in the last five years,” and “no circuits have rejected the doctrine.” As a result, the Eleventh Circuit felt it was in no position to buck the trend: “Thus, we elect to apply the doctrine in this case.”

Applying the doctrine, the court reached the expected result and found the A360 arbitration clause unenforceable. Plaintiffs brought their claims, as authorized under ERISA, in “a representative capacity on behalf of the plan as a whole.” However, “[t]he Arbitration Procedure here plainly disallows claims brought ‘in a representative capacity,’ as well as claims that ‘seek or receive any remedy which has the purpose or effect of providing additional benefits or monetary or other relief to any individual or entity other than the Claimant.’” Thus, the arbitration procedure “prevents the plaintiffs from effectively vindicating §§ 1109(a) and 1132(a)(2) in the arbitral forum.”

Only one issue remained: severability. Because the arbitration clause was expressly non-severable if its representative/relief limitations were held invalid, the Eleventh Circuit ruled that entire arbitration section was unenforceable.

As a result, the Eleventh Circuit affirmed the district court’s denial of defendants’ motion to compel arbitration in its entirety, and the effective vindication doctrine continues to steamroll its way through the federal courts.

Our second case of the week is Aramark Servs., Inc. Grp. Health Plan v. Aetna Life Ins. Co., No. 24-40323, __ F.4th __, 2025 WL 3676864 (5th Cir. Dec. 18, 2025) (Before Circuit Judges Higginbotham, Jones, and Southwick). This case addressed a different arbitration question: “whether the court or the arbitrator will decide arbitrability.” Also at issue was whether the relief sought by the plaintiffs qualified as equitable under ERISA.

Unusually, the case did not involve an arbitration agreement between a plan participant and an administrator, but between an administrator and a third party. Plaintiff Aramark Services, Inc., maintains group health plans for its employees, and hired defendant Aetna Life Insurance Company to provide the plans with administrative services. The contract between the two is governed by a master services agreement which contains an arbitration provision.

Aramark sued Aetna under ERISA for breach of fiduciary duties and prohibited transactions, claiming that Aetna improperly paid millions of dollars in provider claims, retained undisclosed fees, and engaged in misconduct related to claims processing.

Aetna responded with a motion to compel arbitration, which the district court denied, concluding that the parties had not clearly and unmistakably delegated the issue of arbitrability to the arbitrator. The court then ruled that Aramark’s claims under ERISA for monetary damages were equitable and not subject to mandatory arbitration under the arbitration provision. (Your ERISA Watch covered this decision in our May 8, 2024 edition – coincidentally, the same week the Second Circuit adopted the effective vindication doctrine.)

On the issue of arbitrability, the court began by noting that Aetna had to clear a high bar. “Courts should not assume that the parties agreed to arbitrate arbitrability unless there is ‘clear and unmistakable’ evidence that they did so.”

The arbitration clause at issue stated, “Any controversy or claim arising out of or relating to this Agreement or the breach, termination, or validity thereof, except for temporary, preliminary, or permanent injunctive relief or any other form of equitable relief, shall be settled by binding arbitration[.]” The dispute was whether the italicized carve-out language only prevented the arbitrator from awarding equitable relief, and did not prevent the arbitrator from deciding arbitrability (as Aetna argued), or whether the arbitrability of a dispute was entirely removed from the arbitrator’s hands if a party sought equitable relief (as Aramark argued).

The court agreed with Aramark and the district court, noting that while both parties offered reasonable interpretations, the language was ambiguous and thus under the rule of contra proferentem (ambiguous language should be construed against the drafter, which was Aetna), and the “clear and unmistakable” standard, the threshold arbitrability question was for the court, not an arbitrator, to decide.

This left the second question: were Aramark’s claims equitable or legal in nature? The Fifth Circuit agreed with the district court once again and ruled that they were equitable.

As background, the court revisited the Supreme Court jurisprudence in this area, including the cases of Mertens v. Hewitt Assocs., Great-West Life & Annuity Insurance Co. v. Knudson, Sereboff v. Mid Atlantic Medical Services, Inc., and CIGNA Corp. v. Amara. The Fifth Circuit stated that these cases emphasized that the identity of the defendant is important. The first three of these cases were against non-fiduciaries, and held that money damages could not be imposed against them.

However, the fourth case, Amara, involved a fiduciary defendant, and in that case the court explained that surcharge, a monetary equitable remedy, was available. The Fifth Circuit noted that it had already “course-corrected” its own jurisprudence in a subsequent decision (Gearlds v. Entergy Servs., Inc.) to align with Amara.

The Fifth Circuit acknowledged that the courts are not in agreement on this issue. Aetna cited to the Fourth Circuit’s contrary ruling in Rose v. PSA (the notable decision in our September 13, 2023 edition), which disclaimed any distinction between fiduciary and non-fiduciary defendants for the purpose of determining equitable relief under ERISA. But the Fifth Circuit was unconvinced, and “disagree[d] for the reasons just offered. We are not bound by our sister circuit’s precedent, and in any event, we already rejected Aetna’s position…by way of Gearlds.”

As a result, the court disagreed with Aetna that Aramark’s claims were legal simply because they sought monetary damages, holding that the nature of the relief sought was equitable under the circumstances. Aramark appropriately sought “make-whole relief” for a violation of a fiduciary duty, consistent with the principles established in Amara and Gearlds.

Writing separately, Judge Edith H. Jones concurred with the majority on the first issue of arbitrability, but dissented as to the second issue regarding equitable remedies. She argued that “[t]he majority’s perfunctory reliance on court precedent mistakenly reads both Supreme Court authority and the limits of ‘typical’ equitable remedies.”

Judge Jones interpreted Amara as causing “confusion,” arguing that its discussion of equitable surcharge was dicta and in tension with both other Supreme Court cases and the established principle that equitable relief under ERISA should be limited to what was typically available in equity. Judge Jones further suggested that the Fifth Circuit “should repudiate Gearlds.”

As a result, Judge Jones would have held that Aramark’s claims for compensatory money damages based on Aetna’s alleged fiduciary breaches did not constitute typical equitable relief and are therefore impermissible under ERISA.

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

Arbitration

Tenth Circuit

Schuller v. Compass Minerals Int’l, Inc., No. 25-2373-JWL, 2025 WL 3640220 (D. Kan. Dec. 16, 2025) (Judge John W. Lungstrum). Plaintiff George Schuller was hired by defendant Compass Minerals International, Inc. in 2019 as Senior Vice President and Chief Operating Officer. Compass terminated Schuller in February of 2024, purportedly for cause. Schuller filed a claim for benefits under the company’s ERISA-governed Amended and Restated Executive Severance Plan, administered by the Compensation Committee. However, Schuller’s claim was denied and the Committee upheld that decision on administrative appeal. Schuller filed an age discrimination charge with Kansas regulatory authorities and received a right-to-sue. He then filed this action, asserting three claims for relief: Count I for benefits under ERISA § 502(a)(1)(B); Count II for interference with benefits under ERISA § 510; and Count III for discrimination under the Age Discrimination in Employment Act (ADEA). Defendants responded by filing a motion to compel arbitration, which was decided in this order. Schuller argued that arbitration could not be compelled because defendants failed to submit evidence of his assent to the original severance plan. However, the court found the original plan irrelevant because the motion centered on the amended plan. Schuller also argued that he did not consent to the claims procedures in the amended plan (which contained the arbitration clause) because his consent form did not reference them. However, the court held the amended plan clearly incorporated the claims procedures by reference. Next, Schuller argued that there was a conflict between the forum-selection and arbitration clauses which demonstrated his lack of assent. However, the court “does not agree that the two provisions are necessarily in conflict.” The court found that “the provisions may easily be harmonized by construing the forum-selection clause to be referring to non-arbitrable matters, such as post-arbitration proceedings to confirm or enforce an award,” and thus there was no conflict with the arbitration clause, which required “any and all disputes under the Plan shall be settled by final and binding arbitration[.]” Finally, Schuller argued that “consideration is lacking because any promise by defendants to arbitrate was illusory in light of Section 6(b) the Plan, which gave the Administrator the right to amend or terminate the Plan, and which therefore gave the Administrator the right to remove the arbitration provision.” Relying on Tenth Circuit precedent, the court held that where the modification right is outside the arbitration provision and applies to the entire agreement, an illusory-promise challenge goes to the enforceability of the entire contract and is for the arbitrator, not the court. Furthermore, “the fact that one provision may be illusory does not render unenforceable the entire contract, which may be supported by other promises (such as, in this case, the promises to provide severance benefits).” Thus, the court concluded that the arbitration clause was enforceable, and next turned to the scope of the clause. The court ruled that Count I (for plan benefits) fell within the scope of the arbitration clause, which covered “any and all disputes under the Plan.” However, the court agreed with Schuller that Counts II (ERISA § 510) and III (ADEA) did not arise “under the Plan.” The court held that “plaintiff seeks to vindicate rights granted by particular statutes, ERISA and ADEA respectively, and therefore – applying the ordinary meaning of the word – those claims arise ‘under’ the statutes and not ‘under’ the Plan.” As a result, Count I was stayed pending the outcome of arbitration. As for Counts II and III, defendants requested a stay of those as well, “either because the resolution of Count I could be determinative of the other counts or because Count I predominates and is inextricably intertwined with the other counts.” However, the court noted that “Plaintiff has not had the opportunity to respond to this specific argument,” and thus invited supplemental briefing to address the issue.

Attorneys’ Fees

Fifth Circuit

Cloud v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, No. 25-10337, __ F.4th __, 2025 WL 3673303 (5th Cir. Dec. 18, 2025) (Before Circuit Judges Clement, Graves, and Ho). Longtime readers are familiar with this case in which, after extensive discovery into the inner workings of the Bert Bell/Pete Rozelle NFL Player Retirement Plan, and a multi-day bench trial, the district court issued a scathing decision in favor of former NFL running back Michael Cloud. The court determined that Cloud was not afforded a full and fair review by the plan’s fiduciaries, and was entitled to the highest level of disability benefits under the plan. (Your ERISA Watch named that decision one of the five best of 2022.) The court then awarded Cloud more than $1.2 million in attorneys’ fees, which included an upward enhancement of $200/hour. (Your ERISA Watch reported on this decision in our July 27, 2022 edition.) Cloud’s victory was short-lived, however, as it was reversed on appeal by the Fifth Circuit. That court “commend[ed]” the district court for “expos[ing] the disturbing lack of safeguards to ensure fair and meaningful review of disability claims brought by former players who suffered incapacitating on-the-field injuries, including severe head trauma” and for “chronicling a lopsided system aggressively stacked against disabled players.” However, despite the plan’s misconduct, the Fifth Circuit ruled that Cloud had failed to show “changed circumstances” to justify eligibility for the highest level of plan benefits. (This decision was our case of the week in our October 11, 2023 edition. The Fifth Circuit subsequently denied Cloud’s request for rehearing over a dissent from Judge Graves.) On remand, the district court revisited its fee award. The court noted that none of its findings of fact were overturned on appeal, and thus found that despite the reversal Cloud had still achieved “some degree of success on the merits” by “bringing to light Defendant’s mishandling of his case.” As a result, the court stood by its original fee award, and indeed tacked on even more for counsel’s appellate work. (We reported on this decision in our January 22, 2025 edition.) The plan unsurprisingly appealed once again, and in this concise published opinion the Fifth Circuit reversed for a second time. Cloud reiterated the district court’s ruling that he had demonstrated he was wrongly treated by the plan, but the Fifth Circuit characterized this as “a moral victory” which was “insufficient to justify an award of attorney’s fees.” In doing so, the court relied on the Supreme Court’s decision in Hewitt v. Helms, which denied fees where the plaintiff received no relief from the defendants because of the lawsuit, and instead only received “the moral satisfaction of knowing that a federal court concluded that his rights had been violated.” The Fifth Circuit acknowledged that Hewitt was decided under a “prevailing party” standard, and not the more lenient “some success on the merits” standard at play here, “[b]ut that difference does not affect our analysis” because both standards required a plaintiff to receive a “quantum of success,” which Cloud had not satisfied. Thus, “we are duty-bound to reach the same result here.” In the end, the Fifth Circuit recognized Cloud may have received “favorable factual findings,” an “important moral victory,” and a “public relations win.” However, “a moral victory is not a merits victory,” and favorable findings “are, at best, just one procedural step along the way” to success on the merits, which Cloud did not achieve. As a result, the Fifth Circuit reversed the district court’s fee award.

Breach of Fiduciary Duty

Fourth Circuit

Infrastructure & Energy Alternatives, Inc. v. Axim Fringe Solutions Group, LLC, No. CV DKC 24-1268, 2025 WL 3677007 (D. Md. Dec. 18, 2025) (Judge Deborah K. Chasanow). Infrastructure & Energy Alternatives, Inc. sponsors an ERISA-governed health benefit plan for its employees, and contracted with Axim Fringe Solution Group, LLC to provide fiduciary and administrative services, including managing trust accounts for plan contributions intended for paying benefits and expenses. This turned out to be an unfortunate choice, as Axim landed in hot water with the Department of Labor, which filed suit against Axim, its CEO, and its director of compliance accounting alleging various misconduct in the administration of “dozens of ERISA plans.” That case was resolved in May 2024 with a consent judgment that involved the Axim defendants paying over $4 million into a distribution account administered by a receiver. IEA joined the party with this separate action in April 2024, alleging that the same defendants misappropriated and improperly managed the IEA plan’s assets, failed to pay legitimate claims and expenses, and misled IEA about their actions. IEA’s complaint has four counts: breach of contract, injunctive relief, breach of fiduciary duty under ERISA, and fraudulent misrepresentation. Axim and the CEO were served with IEA’s complaint, but they failed to respond and defaulted. IEA filed a motion for default judgment, which was decided in this order. Under the breach of contract and fraudulent misrepresentation counts, the court noted that IEA did not provide sufficient factual details or attach the relevant agreements to support its claims. The court considered whether ERISA preempted these claims, but “[g]iven the factually thin complaint and the fact that the agreements themselves are not before the court,” the court could not resolve this issue. The court did not need to, however, because it ruled that IEA’s allegations in support of these two claims were insufficient “in both their state and federal forms” because they were far too conclusory. As for IEA’s ERISA claim for breach of fiduciary duty, the court again faulted IEA for inadequate pleading: “Plaintiff has not furnished the necessary factual content beyond conclusory allegations and threadbare recitals to discern a plausible breach by [defendants].” Finally, the court denied IEA’s request for injunctive relief as moot because IEA “has already effectively received such relief” under the consent judgment with the government. The receiver had stated that it had “fulfilled all its duties” regarding Axim’s accounts and “returned all of the[ ] funds…to the respective employer clients.” As a result, “it is not possible for Axim…to further dissipate the Plan assets because they no longer control them.” In the end, the court recognized the “alleged detailed, serious misconduct by Axim” but stated “that does not excuse Plaintiff’s burden in this case to allege specific facts regarding [defendants’] misconduct vis-à-vis IEA.” The court ordered IEA to show cause why the complaint should not be dismissed for failure to state a claim, which could be satisfied through a motion for leave to file an amended complaint.

Disability Benefit Claims

Sixth Circuit

Spry v. The Prudential Ins. Co. of Am., No. 3:24-CV-00889, 2025 WL 3646506 (M.D. Tenn. Dec. 16, 2025) (Judge Aleta A. Trauger). Baudi Spry worked in information technology at Community Health Systems and was a participant in CHS’ ERISA-governed employee long-term disability (LTD) benefit plan, insured by Prudential Insurance Company of America. Spry stopped working at CHS in January 2020 and submitted a claim for LTD benefits to Prudential, contending that she was disabled due to numerous health issues. “Her medical chart from a June 3, 2020 appointment, roughly two weeks after she submitted her application for LTD, for example, lists sixty-five ‘active problems.’” Primary among these was postural orthostatic tachycardia syndrome (“POTS”). Prudential denied her claim and subsequent appeals, relying on the opinions of independent reviewing physicians and vocational specialists. Spry thus filed this action against Prudential for plan benefits under ERISA. The parties filed cross-motions for judgment, which were decided in this order. The court reviewed the case under the abuse of discretion standard of review, which applied because the plan granted Prudential discretionary authority to determine eligibility for benefits. Under this standard, “the court assesses [Prudential’s] decision’s procedural and substantive reasonableness.” However, the court never even got to the substance of Prudential’s decision because it determined the decision was procedurally flawed. First, the court addressed Spry’s argument that Prudential did not consider all relevant evidence, particularly regarding her cognitive deficits. The court disagreed: “While Prudential may not have agreed with the conclusions Spry’s treating physicians reached regarding her cognitive function, the record does not support Spry’s contention that Prudential did not consider all relevant evidence – including evidence Spry submitted regarding her cognitive function.” Second, the court evaluated Prudential’s conflict of interest, as Prudential had the dual role of determining eligibility for benefits and paying them. The court determined that while this was a factor in evaluating procedural reasonableness, it would not give it much weight. The court spent most of its time evaluating and agreeing with Spry’s third argument, which was that Prudential deferred to the reports of its file reviewers over those of Spry’s treating physicians. The court noted that Prudential’s decision not to have a doctor evaluate Spry in person raised questions about the thoroughness and accuracy of its benefits determination. The court further found that “the record shows either that Prudential did not accept Spry’s symptoms or their severity, which would constitute an improper credibility determination without an in-person examination, or it ignored the recommendations of Spry’s treating physicians without explanation.” The court agreed with Prudential that “it need not accord special weight to the opinion of a treating physician ‘if it is not supported by the medical records,’” but here “the medical records, separate and apart from the opinions of Spry’s treating physicians provided during the claims process, contain extensive evidence of the POTS symptoms her treating physicians explain make her disabled.” As a result, “Prudential unreasonably ignored, without explanation, the opinions of Spry’s treating physicians without conducting its own evaluation of her.” The court also noted that Prudential improperly required objective evidence of disability, which the plan did not mandate. Finally, the court highlighted that Prudential’s reviewing physicians did not provide detailed explanations or cite specific documentation to support their opinions. As a result, the court concluded that Prudential’s denial of Spry’s claim was procedurally unreasonable due to these deficiencies in its decision-making process, and thus denied Prudential’s motion for judgment. However, the court also denied Spry’s motion, finding that “the record does not show that Spry is clearly entitled to the benefits she seeks.” Instead, the court opted to remand the case to Prudential “for further proceedings consistent with this opinion.”

Ninth Circuit

Reda v. Unum Life Ins. Co. of Am., No. 2:22-CV-00974-CDS-EJY, 2025 WL 3707429 (D. Nev. Dec. 19, 2025) (Judge Cristina D. Silva). Janis B. Reda was employed as a legal assistant at the venerable (but now defunct) Las Vegas law firm Lionel Sawyer & Collins. As a result, she was covered under the firm’s ERISA-governed long-term disability employee benefit plan insured by Unum Life Insurance Company of America. The plan had an unusual definition of disability which included a requirement that “a physician has certified that you are unable to perform two or more ADLs [activities of daily living] for a period of at least 90 days, or that you require substantial supervision by another individual to protect you and others from threats to health or safety due to Severe Cognitive Impairment.” After a failed surgical procedure, Reda submitted a claim for benefits under the plan. Unum initially approved her claim, but terminated benefits after two years, contending that Reda had provided insufficient information to support her claim under the ADL loss provision. Reda unsuccessfully appealed this decision with Unum, and then filed this action, which proceeded to briefing on the merits. The court applied an abuse of discretion standard, as the plan conferred discretionary authority on Unum to determine eligibility for benefits. After reviewing the record, the court concluded that it “contains adequate evidence to support Unum’s determination that Reda did not require assistance to complete two or more ADLs as required by the policy, so its determination was reasonable.” The court found that Unum’s decision was based on a thorough review of Reda’s medical records and assessments by multiple medical professionals, and that Reda’s doctors did not provide enough information to support her claim. Reda contended that Unum suffered from a conflict of interest, arguing, “it’s grade school logic that Unum would prefer not to part with its precious dollars and paying for homecare requires it to.” The court acknowledged that Unum had a structural conflict of interest as the claim payer and administrator, but held that Reda “has not provided sufficient support to show that Unum’s decision making was impacted by the structural conflict. She merely asserts ‘it’s not rocket science that insurance companies are in the business of making money, and paying claims does not make them money.’” As a result, the court denied Reda’s motion for judgment on the record and entered judgment in Unum’s favor.

Tenth Circuit

Cunha v. Unum Life Ins. Co. of Am., No. CIV-24-514-R, 2025 WL 3640392 (W.D. Okla. Dec. 16, 2025) (Judge David L. Russell). Plaintiff Darla Cunha was a registered nurse for HCA Hospitals and a participant in HCA’s ERISA-governed long-term disability benefit plan for employees. Cunha stopped working in 2007 due to medical issues related to her back and hips, which included multiple surgeries. She submitted a claim for benefits to the plan’s insurer and claim administrator, defendant Unum Life Insurance Company of America, which initially approved her claim in 2008. The plan defined disability in two stages: initially as being unable to perform one’s regular occupation, and after 24 months, as being unable to perform any gainful occupation for which one is reasonably fitted. Unum continued to pay benefits under the “any gainful occupation” standard until 2023, when it terminated her claim on the ground that she no longer met the plan definition of disability. This decision was based on medical records, a vocational review, and Cunha’s reported activities of gardening, driving, and other activities of daily living, which suggested to Unum that she could perform sedentary work. Cunha appealed the decision, but Unum upheld it, so Cunha filed this action which proceeded to a decision on the merits. The court applied the arbitrary and capricious standard of review to determine if Unum’s decision was “predicated on a reasonable basis.” Cunha argued that Unum ignored or selectively considered evidence, failed to obtain a complete medical record, and improperly dismissed her subjective reports of pain. She also contended that Unum’s decision was inconsistent with her Social Security Disability Insurance benefits awarded in 2009. Unum countered that its decision was based on substantial evidence, including recent medical records indicating improvement in Cunha’s condition. The court sided with Unum, ruling that its decision was not arbitrary and capricious. It noted that Unum had considered the available medical evidence, including records from Cunha’s pain management provider and her primary care visits, which did not document restrictions or limitations precluding sedentary work. The court also acknowledged Cunha’s contrary Social Security award, but stated that Unum had provided a reasoned explanation for disagreeing with it because it had relied on more recent medical information. The court also acknowledged that Unum’s reviewers all appeared to be employed by Unum, which was “relevant” to evaluating conflict of interest, but “the Court is not persuaded that this factor is enough to tip the scale given that Unum has offered a reasoned explanation for its decision and Ms. Cunha was given an opportunity to submit additional information regarding the disabling severity of her condition.” Finally, the court ruled that the benefits Unum did pay were correctly calculated because they were based on payroll records from Cunha’s employer. Thus, the court ruled that “Unum gave Ms. Cunha a full and fair opportunity to present her claim and did not act arbitrarily in denying her claim for continued long term disability benefits.” However, the court admitted, “This is not an easy case and, although the Court may have reached a different decision in the first instance, the Court is constrained by the applicable standard of review. That standard asks whether there is a reasoned basis for the decision, not whether the decision is the best or most logical one.” The court determined that Unum’s decision passed this lenient test and thus the court entered judgment in Unum’s favor.

Discovery

First Circuit

Radoncic v. National Union Fire Ins. Co. of Pittsburgh, PA, No. 2:25-CV-00138-LEW, 2025 WL 3687521 (D. Me. Dec. 19, 2025) (Magistrate Judge John C. Nivison). Two weeks ago, we reported on a discovery order in this accident insurance benefit case in which the magistrate judge ordered defendant National Union Fire Insurance Company of Pittsburgh, PA to submit certain documents for in camera review. These documents included pre-denial emails, litigation hold notices, file copy requests, a coverage letter, and redacted claims notes. National Union contended that the documents were protected from disclosure by the attorney-client privilege, while plaintiff Skender Radoncic argued that the documents were not protected because the fiduciary exception to the privilege applied. The magistrate judge reviewed the submitted documents and promptly turned out this brief order, which turned exclusively on the timing of the documents. The court explained, “Some of the documents were generated as Defendant assessed and decided Plaintiff’s claim during the administrative process. The Court discerns nothing in the documents to suggest that the attorney-client communications are the product of Defendant’s attempt to ‘defend itself against’ Plaintiff’s claim… Instead, a review of the documents reveals that the communications relate to the assessment of Plaintiff’s administrative appeal.” As a result, the fiduciary exception applied to these documents and they were not privileged. However, the court noted that some of the documents were generated after National Union’s final decision on Radoncic’s claim. The court ruled that these documents “would be within the attorney-client privilege as the communications were designed to defend against Plaintiff’s challenge in this Court to Defendant’s decision.” As a result, the court ordered National Union to produce the non-protected documents to Radoncic and supplement the administrative record with them.

ERISA Preemption

Second Circuit

Stern v. Gozinsky, No. 24-CV-6962-SJB-LGD, 2025 WL 3674288 (E.D.N.Y. Dec. 18, 2025) (Judge Sanket J. Bulsara). Plaintiff Sharone Stern alleges in this action that defendant Andrew P. Gozinsky, an insurance broker, secured disability income policies for Stern’s podiatry practices, which operated through four separate business entities. The policies were intended to cover Stern’s “annual earnings from all practices.” Stern subsequently became disabled and filed a claim under the policies. However, even though the insurer, First Reliance Standard Life Insurance Company, approved his claim, it only calculated benefits based on his income from one of his practices instead of all four. Stern contends that this was because “no entities were listed on the policy document in the place where subsidiaries or affiliates are to be named.” Stern asked Gozinsky to fix this problem, but he was unable to, and Stern’s appeals to Reliance were denied. As a result, Stern filed suit against Gozinsky and First Reliance in state court alleging state law claims for relief. Defendants removed the case to federal court based on ERISA preemption, and Stern settled with First Reliance, leaving only state law claims against Gozinsky. Gozinsky filed a motion to dismiss based on ERISA preemption. The court applied the Supreme Court’s preemption test from Aetna Health Inc. v. Davila in which it evaluated whether “(1) ‘an individual, at some point in time, could have brought his or her claim under ERISA § 502(a)(1)(B);’ and (2) ‘no other independent legal duty … is implicated by a defendant’s actions.’” The court held that, “Even assuming that Davila’s first prong is satisfied, the second is not, because these claims implicate Gozinsky’s ‘independent legal dut[ies].’” The court ruled that the duties and obligations in question arose from Gozinsky’s role as an insurance broker, not from the terms of the ERISA-governed plan. Stern’s claims “do not implicate the precise terms of the plan, or dispute what Stern is owed under the plan, but rather, they concentrate on Gozinsky’s dealings with Stern and what Stern should receive from Gozinsky’s alleged misconduct.” As a result, the court concluded that Stern’s state law claims were not preempted by ERISA, and because the parties were not diverse, the court lacked subject matter jurisdiction. The court thus remanded the case back to state court.

Fourth Circuit

Redwine v. Unum Life Ins. Co. of Am., No. 3:25-CV-00029, 2025 WL 3677653 (W.D. Va. Dec. 16, 2025) (Judge Norman K. Moon). Plaintiff Michael Redwine was employed by the University of Virginia (UVA). After contracting COVID-19 and developing long COVID, along with severe depression, anxiety, PTSD, and agoraphobia, Redwine applied for short-term and long-term disability benefits with the administrator and insurer of UVA’s employee disability benefit plan, Unum Life Insurance Company of America. Although Unum initially approved short-term disability payments, it denied his application for long-term benefits. Redwine filed this pro se suit against Unum under ERISA, and Unum responded by filing a motion to dismiss, contending that Redwine failed to state a claim under ERISA because UVA’s disability benefit plan was a governmental plan and thus exempt from ERISA. In this brief decision the court agreed with Unum, finding that the plan was indeed a governmental plan because it was established and maintained by UVA, an agency of the Commonwealth of Virginia. Redwine attempted to counter this argument by claiming that (1) Unum should have disclosed the plan’s exempt status from the outset, (2) the plan’s reference to ERISA procedures implied it should be covered by ERISA, and (3) because Unum – not UVA – maintained and administered the plan, it should not be considered a governmental plan. The court rejected these arguments, ruling that (1) there is no statutory requirement for a plan to specify its exempt status, (2) the plan’s reference to ERISA “directly contemplates that ERISA might not apply to all plans and plan-holders,” and (3) a private insurer’s involvement in administering the plan does not affect its status as a governmental plan if it was established and maintained by a state agency. As a result, the court granted Unum’s motion to dismiss.

Ninth Circuit

California Spine & Neurosurgery Inst. v. United Healthcare Servs., Inc., No. 2:25-CV-07866-AB-MBK, 2025 WL 3649270 (C.D. Cal. Dec. 16, 2025) (Judge André Birotte Jr.). California Spine and Neurosurgery Institute, a frequent player in litigation between medical providers and insurers, filed this action against United Healthcare Services, Inc. arising from United’s alleged underpayment for services California Spine provided to one of United’s insureds. California Spine alleged the following: its representative had a conversation with United’s representative to clarify the payment terms, including whether the payment would be based on “usual, customary, and reasonable” (UCR) rates and not on a Medicare fee schedule. United confirmed that it would pay the UCR rate. Relying on this representation, California Spine provided the services and subsequently billed United $85,000. However, United paid only $1,184.30, which was significantly less than the UCR rate. California Spine filed suit in state court asserting two state law causes of action – negligent misrepresentation and promissory estoppel – seeking to recover the value of the services. United removed the case to federal court based on ERISA preemption, and California Spine responded by filing a motion for remand. In this order the court applied the two-part test from the Supreme Court’s decision in Aetna Health Inc. v. Davila to determine if ERISA completely preempted California Spine’s claims. The test requires that: (1) the plaintiff could have brought their asserted claims under ERISA, and (2) there is no other independent legal duty implicated by the defendant’s actions. The court found that neither prong of the Davila test was satisfied. While California Spine could have brought a claim under ERISA because it had an assignment of benefits, the court ruled that “the fact that a provider could have asserted a claim under § 502(a)(1)(B) ‘d[oes] not automatically mean that [the provider] could not bring some other suit against the insurer] based on some other legal obligation.’” Here, “Plaintiff could not have brought its claims for negligent misrepresentation and for promissory estoppel under ERISA.” Second, California Spine’s claims arose from alleged misrepresentations made during a phone call, and thus there was an independent legal duty under state law based on those representations. As a result, because the Davila test was not met, there was no ERISA preemption and the court granted California Spine’s motion to remand to state court. However, the court declined to award California Spine attorney’s fees for United’s allegedly improper removal. The court noted that California Spine had included extraneous and confusing allegations regarding ERISA in its complaint, and United’s “arguments were made in good faith and were not wholly unreasonable.”

Life Insurance & AD&D Benefit Claims

Fifth Circuit

Camardelle v. Metropolitan Life Ins. Co., No. CV 25-1382, 2025 WL 3687691 (E.D. La. Dec. 19, 2025) (Judge Eldon E. Fallon). Plaintiff Ryan Camardelle was employed by Entergy Louisiana, LLC, and covered by the company’s ERISA-governed accidental death and dismemberment employee benefit plan, which was insured by Metropolitan Life Insurance Company. Camardelle alleged that he suffered an accident in September 2019 which caused a corneal scratch in his right eye, which ultimately led to permanent blindness. Camardelle submitted a claim to MetLife for benefits in 2023, more than four years later. MetLife denied his claim, and thus he filed this action for plan benefits under ERISA. Metlife responded with a motion to dismiss, arguing that Camardelle’s claim was time-barred by the plan terms. The plan required that Camardelle’s physical loss occur within 365 days of his accident, and his claim be filed within 90 days of the loss. It also had a three-year contractual limitation period for filing a civil action. MetLife contended that the latest Camardelle’s loss could have occurred in order to be covered was September 4, 2020 (i.e., one year after his accident), and the claim thus should have been filed no later than December 3, 2020. Because Camardelle did not file his suit until July 3, 2025, MetLife argued it was untimely. In his opposition Camardelle asserted that he did not become blind until October 2023, and he filed the necessary documents within 90 days of this date. He argued that he could not have filed a claim earlier because he did not meet the plan’s definition of loss until 2023. Camardelle also accused MetLife of delaying the claims process to allow the contractual period to lapse. The court explained that under ERISA parties are allowed to agree to a contractual limitations period, and the three-year limitation in this case was reasonable. However, this provision did not drive the outcome of MetLife’s motion. Instead, the court noted that the plan required the accident and resulting loss to occur within 365 days of each other, which Camardelle “fails to address in his briefing.” Thus, the court concluded that even if the September 2019 incident constituted an “accident” under the plan, the loss of eyesight in October 2023 did not meet the plan’s requirements and thus no benefits were payable. As a result, the court granted MetLife’s motion to dismiss.

Medical Benefit Claims

Seventh Circuit

Curtis C. v. Health Care Serv. Corp., No. 25 C 884, 2025 WL 3678426 (N.D. Ill. Dec. 18, 2025) (Judge Virginia M. Kendall). Plaintiff Curtis C. was a participant in an employee health benefit plan administered by defendant Health Care Service Corporation (HCSC). His child R.C. was a covered beneficiary. R.C. was admitted to Dragonfly Transitions, a licensed in-patient treatment program for adolescents with mental health, behavioral health, and substance abuse problems, in January 2022 and stayed for approximately nine months, incurring medical expenses exceeding $420,000. Dragonfly submitted claims to HCSC, which were denied on the ground that Dragonfly was not a covered “residential treatment center” (RTC) but rather a facility licensed to care for homeless and runaways, and because of a lack of prior authorization. Curtis appealed, contending that Dragonfly was not an excluded facility under the plan, but HCSC upheld its decision, maintaining that Dragonfly was “supervised living,” which was not covered under the plan. Curtis then filed this action, alleging two claims for relief: one for plan benefits under ERISA and another for violation of the Mental Health Parity and Addiction Equity Act of 2008 (Parity Act). HCSC moved to dismiss both claims. On Curtis’ benefits claim, HCSC argued to the court that Dragonfly was a “supervised living” facility, excluded from the definition of an RTC. Curtis conceded that Dragonfly was not an RTC but argued that other plan provisions could cover R.C.’s treatment. Specifically, Curtis pointed to language in the plan that provided for reimbursement of expenses incurred from receiving mental health care from a “behavioral health practitioner.” R.C. received services from licensed professionals at Dragonfly, which Curtis argued should be covered under this provision. HCSC contended that the services “were all billed under a supervised living code by the facility itself, not the provider,” but the court rejected this argument: “The Court has not identified any provision in the plan – nor has HCSC pointed to one – that establishes reimbursement eligibility is determined by how services are billed. To the contrary, courts have easily concluded that it is ‘not the billing codes that determine eligibility for coverage, but the Plan language and the governing statutes that are read into it.’” Under Count II, the Parity Act claim, Curtis argued that the plan imposed more restrictive treatment limitations on mental health services than on medical and surgical benefits. The court agreed, finding that the “primarily supportive” exclusion on which HSCS relied was more restrictive than the analogous custodial care exclusion for skilled nursing facilities, which lacked similar language. The court thus concluded that Curtis plausibly alleged a Parity Act violation. As a result, the court denied HSCS’s motion to dismiss in its entirety.

Stephanie R. v. Blue Cross & Blue Shield of Ill., No. 24-CV-13112, 2025 WL 3648709 (N.D. Ill. Dec. 16, 2025) (Judge Andrea R. Wood). Plaintiff Stephanie R. was an employee of The Boeing Company and insured through Boeing’s medical benefit plan administered by Blue Cross Blue Shield of Illinois (BCBS). Her minor son, A.W., suffered from mental health and substance abuse issues and underwent treatment at Wingate Wilderness Therapy, an outdoor behavioral health treatment facility in Utah. BCBS denied Stephanie’s claim for benefits for this treatment, citing the plan’s exclusion for “wilderness programs,” a term not defined in the plan documents. Stephanie and A.W. thus brought this action alleging two claims for relief: one for benefits under ERISA and a second for violation of the Mental Health Parity and Addiction Equity Act. Defendants filed a motion to dismiss which was adjudicated in this order. The court granted the motion to dismiss the ERISA claim, finding that BCBS’s decision to deny coverage was not arbitrary and capricious. The court noted that the plan grants BCBS discretionary authority to determine eligibility for benefits, and to interpret ambiguous terms such as “wilderness programs.” The court found that BCBS reasonably interpreted the term to include Wingate’s services. The court found that the decision was not “completely unreasonable” given Wingate’s “outdoor component” and its licensing as an outdoor youth program in Utah. The court also cited the decisions of “[n]umerous other district courts” which had arrived at similar conclusions. However, the court denied defendants’ motion to dismiss the Parity Act claim. Plaintiffs argued that the wilderness-programs exclusion imposed a nonquantitative limitation on mental health and substance abuse disorder treatment that did not apply to analogous medical or surgical services. The court found that plaintiffs had plausibly alleged that the exclusion was more restrictive for mental health and substance abuse treatments than for comparable medical or surgical treatments. The court noted that the exclusion’s facial neutrality did not defeat the Parity Act claim, as the relevant inquiry was whether the plan applied more restrictive criteria to mental health and substance abuse services than to medical/surgical services. Plaintiffs argued, and the court accepted, that they could do this by showing that the exclusion was applied disproportionately to mental health treatment. The court thus concluded that plaintiffs adequately stated a Parity Act claim and allowed it to proceed.

Ninth Circuit

Andrew P. v. Blue Cross of Cal., No. 5:25-CV-02158-BLF, 2025 WL 3637030 (N.D. Cal. Dec. 15, 2025) (Judge Beth Labson Freeman). Plaintiff Andrew P. is a participant in an ERISA-governed employee medical benefit plan insured by defendant Blue Cross of California. The plan covers mental health treatment, but has limitations. The plan states that a mental health facility “must be licensed, accredited, registered or approved,” and it excludes coverage for “Wilderness or other outdoor camps and/or programs.” The exclusion “does not apply to Medically Necessary treatment of Mental Health and Substance Use disorder as required by state law.” Andrew P.’s child, L.P., received treatment at Open Sky Wilderness Therapy, a behavioral health treatment center in Colorado, in 2022. Plaintiffs did not seek preauthorization for L.P.’s treatment, and instead submitted a request for post-service review. Blue Cross denied the claim, contending that benefits were unavailable due to the plan’s wilderness exclusion. Plaintiffs appealed. On appeal, Blue Cross upheld the denial, informing plaintiffs that Open Sky did not qualify under the plan as a “Residential Treatment Center,” and it was not properly accredited. Plaintiffs then filed this action, asserting two claims under ERISA: one for payment of plan benefits under 29 U.S.C. § 1132(a)(1)(B), and one for violation of the Mental Health Parity and Addiction Equity Act (Parity Act) under 29 U.S.C. § 1132(a)(3). Blue Cross moved to dismiss. On their first claim, plaintiffs contended that “the Plan covers medically necessary treatment of mental health and substance use disorders and does not limit such treatment to residential treatment centers,” but the court disagreed. The court stated that the plan does not cover inpatient/residential treatment unless it is provided in enumerated “Facilities” (e.g., hospitals, skilled nursing facilities, residential treatment centers) and all “Facilities” must be accredited; plaintiffs did not allege Open Sky met the accreditation requirement. Plaintiffs’ argument that licensure sufficed to qualify as a “Facility” failed because “Facility” is a defined, capitalized term in the plan that incorporates the accreditation requirement. As for the Parity Act claim, plaintiffs alleged a facial violation based on purported limitations tied to geographic location, facility type, or provider specialty, and asserted Blue Cross withheld information needed for parity analysis. The court found plaintiffs failed to identify with specificity any plan limitation more restrictive for mental health benefits. Furthermore, plaintiffs did not dispute that the wilderness exclusion, accreditation requirement, and residential coverage limitations apply equally to medical and behavioral health. As a result, plaintiffs had not pled a facial violation. As for an as-applied claim, the court found that plaintiffs’ allegations were “formulaic recitations of the law” and conclusory. “Because Plaintiffs fail to specifically allege a disparity between mental health benefits and medical or surgical benefits, they fail to state an as-applied Parity Act claim.” Thus, the court granted Blue Cross’ motion to dismiss as to both claims. However, the Court exercised its discretion to dismiss the Parity Act claim without prejudice and gave plaintiffs leave to amend “with the information requested from Defendant to conduct a parity analysis.”

Pension Benefit Claims

Seventh Circuit

O’Moore v. Electrical Contractors Ass’n & Loc. Union 134, I.B.E.W. Joint Pension Tr. of Chicago, No. 25 CV 2192, 2025 WL 3653666 (N.D. Ill. Dec. 17, 2025) (Judge Lindsay C. Jenkins). David O’Moore began receiving early retirement pension benefits in February 2023 due to his participation in a pension fund sponsored by Local Union 134, International Brotherhood of Electrical Workers. However, in October 2024 the fund learned that O’Moore had worked for a signatory to a pension plan with another local union, Local Union 364, from January 2022 to September 2024. Local Union 364 had signed a reciprocity agreement with Local Union 134, and thus had contributed to the Local Union 134 fund for O’Moore’s work. As a result, the fund declared that O’Moore had engaged in prohibited “Industry Employment” under the terms of the plan and suspended his benefits retroactive to their onset. O’Moore filed this action pro se to challenge the fund’s decision. The fund responded with a motion for summary judgment, which the court granted in this decision. The plan gave the fund discretionary authority to interpret the plan and determine eligibility for benefits, and thus the court employed the arbitrary and capricious standard of review, “a high hurdle.” O’Moore contended that his work for Local Union 364 should not be considered “Industry Employment” under the Local Union 134 plan because the plan defined the term as “employment…within the trade and geographic jurisdiction” of Local Union 134. The court admitted that O’Moore’s argument “has some purchase.” However, the court ruled that the fund had the better argument due to its reciprocity agreement: “Reciprocity agreements essentially treat the Local Union 134 member working outside the Union’s jurisdiction as if he was working within the jurisdiction of the Union by transferring any contribution made to a different fund on behalf of the Local Union 134 member to the Fund… That is exactly what happened with O’Moore.” The court stated that this interpretation aligned with the plan’s purpose of preventing retirees from competing with active union members for jobs. The court acknowledged that the plan’s language could have been clearer but concluded that the fund’s interpretation was not arbitrary and capricious, and thus it granted the fund’s motion for summary judgment and upheld the suspension of O’Moore’s pension benefits.

D.C. Circuit

Gilfillan v. Pension Benefit Guaranty Corp., No. 25-CV-1411 (TSC), 2025 WL 3653505 (D.D.C. Dec. 17, 2025) (Judge Tanya S. Chutkan). Frances S. Gilfillan, proceeding pro se, filed this action against the Pension Benefit Guaranty Corporation (PBGC), alleging that the PBGC wrongfully denied her surviving spouse benefits under her late husband’s pension plan and misled her about her coverage prior to his death. The husband, Richard Gilfillan, was an employee of Lukens Steel Company and a participant in Bethlehem Steel Corporation’s Pension Plan. (This plan was taken over by the PBGC in 2002 due to dwindling assets.) Richard retired in 1991, receiving benefits in the form of a Joint and 50% Survivor Annuity, with his then-wife Mary as the beneficiary. After Mary’s death in 2003, Richard married Frances and reported this to the PBGC, which informed him that Frances was ineligible for benefits. Richard appealed this decision to no avail. In 2005, Richard received letters from the PBGC, and in 2017 he had a conversation with the PBGC, both of which he interpreted as meaning Frances would be entitled to surviving spouse benefits. However, after Richard’s death in 2019, the PBGC informed Frances that she was not in fact entitled to those benefits. She filed this suit to challenge the PBGC’s decision, and the PBGC responded by filing a motion to dismiss. The court ruled that Frances’ complaint did not plausibly state a claim for equitable relief, as she failed to provide factual content supporting her entitlement to benefits: “Plaintiff’s filings do not ‘quote, cite, or summarize’ any of the actual terms of the Plan… Plaintiff does not allege that she was named as a new beneficiary of Richard’s Plan, nor does she allege that she became the de facto beneficiary under his Plan when she married him.” Furthermore, the court noted that under ERISA and PBGC regulations, once a benefit starts, the benefit form cannot be changed, and thus the survivor annuity irrevocably vested in Mary at the time of Richard’s retirement. Therefore, Frances could not be retroactively designated as the spousal beneficiary, even if Mary had passed away. Frances also argued for equitable estoppel, claiming reliance on PBGC’s erroneous communications. However, the court determined that she did not demonstrate “affirmative misconduct” by the PBGC, which was the operative standard. “The court agrees with Defendant that, at most, Plaintiff has alleged that the PBGC acted negligently, which is insufficient to satisfy the ‘high’ bar required to equitably estop the Government.” As a result, the court concluded that, “while the court is deeply sympathetic to Plaintiff’s plight, it finds that she has failed to state a claim upon which relief may be granted.” The court thus granted the PBGC’s motion to dismiss, albeit without prejudice.

Plan Status

Ninth Circuit

Koo v. Unum Grp., No. 2:25-CV-05797-JFW-BFMX, __ F. Supp. 3d __, 2025 WL 3687545 (C.D. Cal. Dec. 16, 2025) (Judge John F. Walter). Jason T. Koo was employed as an executive partner in the financial and insurance services division of New York Life Insurance Company. During his employment, he was offered the opportunity to purchase an individual disability insurance policy issued by Provident Life and Accident Insurance Company through a licensed insurance broker. The policy was marketed as a personal, state-regulated contract, and Koo personally paid all premiums without any contribution from New York Life. The enrollment kit “described the product as ‘Supplemental Individual Disability Insurance (IDI)’ and emphasized that it was ‘Individually owned,’ ‘Non-cancellable,’ ‘pa[id] with post-tax dollars,’ and ‘a fully portable benefit’ that ‘belongs to you, even if you change employers.’” The kit further stated purchase was “completely voluntary,” and that “New York Life does not sponsor, contribute to or endorse this program and it is not a plan subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA).” Koo applied for and received coverage, and paid all premiums. New York Life did not contribute, nor did it subsidize or reimburse Koo. In 2017, Koo became disabled and submitted a claim under the policy, which was approved and paid for several years. In 2024, however, defendants terminated his benefits and Koo filed this action, alleging state law claims for relief. The question addressed by the court in this published decision was whether Koo’s policy was an employee benefit plan governed by ERISA. The court answered this question in the negative. The court noted that the insurance coverage “does not identify a named fiduciary, does not provide a procedure for amending the plan, and does not identify any person who has authority to amend the plan.” Furthermore, “the Policy lacks an employer administrative scheme or program that would be subject to ERISA.” New York Life’s involvement was limited to relaying information and processing payroll deductions, which did not constitute the operation of a benefit plan. Next, the court addressed the Department of Labor’s “safe harbor” regulation, which excludes certain group insurance programs from ERISA preemption. The court ruled that the policy met all four criteria of the safe harbor regulation: (1) no employer contributions (“Plaintiff paid all premiums personally,” and the group discount he received was not because of any action by New York Life); (2) voluntary participation (New York Life informed employees the insurance was “completely voluntary”); (3) no employer endorsement (New York Life stated that the insurance was available through a third-party insurance broker and was “not a benefit plan or arrangement sponsored or endorsed by New York Life”); and (4) no employer consideration. As a result, under the “totality of the circumstances,” the court ruled that Koo’s individual disability income policy was not governed by ERISA and therefore Koo’s state law claims were not preempted by ERISA. Defendants’ affirmative defenses based on ERISA were stricken.

Pleading Issues & Procedure

Ninth Circuit

Sabana v. CoreLogic, Inc., No. 8:23-CV-00965-HDV-JDE, 2025 WL 3691841 (C.D. Cal. Dec. 11, 2025) (Judge Hernán D. Vera). This is a putative class action in which plaintiff Danny Sabana alleges that his former employer, CoreLogic, Inc., and the committee of its 401(k) plan violated ERISA by mismanaging the plan. Sabana argues that defendants breached their fiduciary duties to participants by: (1) causing the participants to pay excessive recordkeeping fees; (2) retaining high cost share class investment options despite available lower fee options; and (3) retaining underperforming investment options. The district court initially granted defendants’ motion to dismiss, with prejudice, ruling that Sabana did not have Article III standing. The Ninth Circuit reversed, however, and remanded with instructions to give Sabana an opportunity to amend “because jurisdictional dismissals pursuant to Fed. R. Civ. P. 12(b)(1) must be entered without prejudice.” Furthermore, Sabana’s theory of standing was not futile. (Your ERISA Watch reported on this decision in our April 9, 2025 edition.) Since then, Sabana has prepared an amended complaint and filed a motion with the district court for leave to file it. The new complaint “(1) adds factual allegations regarding the recordkeeping fees, (2) adds a new claim for a prohibited transaction, and (3) adds two additional named plaintiffs.” Defendants did not quibble with the first two changes, but objected to the third, contending that Sabana “must establish his own standing before he can add additional plaintiffs.” The court disagreed, noting that “the Ninth Circuit’s memorandum opinion in this case does not foreclose the possibility that Plaintiff might amend his complaint to add additional plaintiffs.” Furthermore, the court rejected defendants’ argument that “if the original plaintiff in a putative class action lacks standing, the suit must be dismissed and cannot be saved by adding plaintiffs.” The court found defendants’ cited authorities inapposite because they involved cases where classes had already been certified. The court also stated that “Defendants’ argument runs into several well-established principles regarding standing, amendment, joinder, and class actions.” The court observed that “[l]eave to amend ‘shall be freely given when justice so requires,’ and this direction should be ‘applied liberally.’… That liberality extends to amendments that add parties.” Also, only one named plaintiff needs to have standing to maintain a class action, and “standing is determined on the basis of the operative pleading, not necessarily the first one.” And finally, “joining or severing parties can cure jurisdictional defects.” As a result, the court ruled that “these principles militate strongly in favor of allowing an amendment joining additional plaintiffs here. Defendants will have a full opportunity to challenge Sabana’s standing, as well as the purported standing of the additional parties.” Sabana’s motion for leave to file a first amended complaint was thus granted.