Parrott v. International Bancshares Corp., No. 25-50367, __ F.4th __, 2026 WL 364324 (5th Cir. Feb. 10, 2026) (Before Circuit Judges Elrod, Smith, and Wilson)

The last few years have seen a flood of attacks by plan participants against benefit plans that contain arbitration provisions. The targets of these attacks are provisions that contain language prohibiting plan participants from pursuing plan-wide remedies, even though Section 1132(a)(2) of ERISA explicitly gives participants the right to pursue such remedies.

Multiple circuit courts of appeal have ruled that such provisions are unenforceable because arbitration is intended to be an alternate vehicle to vindicate the parties’ rights, but the provisions do not allow the “effective vindication” of those rights because they strip away a statutory remedy. (Your ERISA Watch has covered all of these rulings, from the Second, Third, Sixth, Seventh, Ninth, Tenth, and Eleventh Circuits.)

In this week’s notable decision the effective vindication doctrine was squarely presented to the Fifth Circuit. That court is a bold outlier in many ways. Would it forge its own path on this issue as well?

The plaintiff was Paul Parrott, a former employee and participant in International Bancshares Corporation’s (IBC) retirement savings plan. He brought this putative class action alleging that IBC and related defendants breached their fiduciary duties under ERISA by failing to prudently invest plan assets for the exclusive benefit of plan participants. Parrott brought claims under Section 1132(a)(2) on behalf of the plan and under Section 1132(a)(3) individually.

When Parrott filed his complaint, he was immediately hit with a motion to compel arbitration by IBC pursuant to the Federal Arbitration Act (FAA). IBC contended that arbitration was required pursuant to a 2024 amendment to the plan. Parrott responded with two arguments. First, he explained that he retired from IBC in 2021 and received his distribution under the plan prior to 2024, so the clause could not apply to him because he received no consideration for the change. Second, he argued that the arbitration amendment was invalid under the effective vindication doctrine because it prohibited the exercise of statutory rights under ERISA by barring plan-wide relief and claims brought in a representative capacity on behalf of the plan.

The district court agreed with Parrott’s first argument and thus did not reach the second. The court ruled “there was no consideration under Texas law for the Amended Arbitration agreement because this was not a situation where an at-will employee received notice of an employer’s arbitration policy and continued working with knowledge of the policy.” As a result, the court denied IBC’s motion to compel as to all of Parrott’s claims. (Your ERISA Watch covered this decision in our April 30, 2025 edition.)

IBC appealed this decision, making two additional arguments not ruled on by the district court: (1) the effective vindication doctrine does not apply, and (2) the plan “does not unlawfully ‘water down’ the standard of review for fiduciary actions.”

The Fifth Circuit addressed all three issues, starting with the district court’s ruling. IBC argued that the arbitration provision was valid and enforceable because the plan itself, not individual participants, is the consenting party for amendments. According to IBC, the plan consented to the arbitration agreement when IBC, as the plan sponsor, amended the plan, and thus Parrott’s individual concerns were irrelevant.

Parrott countered that neither he nor the plan consented to arbitration, arguing that under ERISA Section 1132(a)(2) the right to sue “is conferred on the litigant, not the Plan.” He also claimed that a plan cannot consent to arbitration through a unilateral amendment by the sponsor.

The Fifth Circuit agreed with IBC that the plan is the relevant party for claims under Section 1132(a)(2), which allows a private right of action on behalf of the plan for violations of fiduciary duty under Section 1109. Citing the Third Circuit’s decision in Berkelhammer v. ADP (the case of the week in our July 19, 2023 edition), the Fifth Circuit stated that “the entire thrust of § 1109 is the vindication of injuries to the plan,” and thus “[b]ecause ERISA puts the plan at the center of the relevant provisions, it points ‘to the plan, not the participants, as the relevant contracting party.’”

Furthermore, the Fifth Circuit ruled that the plan had consented to arbitration in this case through its unilateral amendment provision, which ceded broad authority to the sponsor to amend its terms. To rule otherwise, the court stated, “would be to find that ERISA has a per se ban on unilateral amendment of arbitration provisions by plan sponsors, something foreign to the text of the FAA and the caselaw.”

However, this only took care of Parrott’s Section 1132(a)(2) claims on behalf of the plan. Regarding his individual claims under Section 1132(a)(3), “it is undisputed that he did not consent to the arbitration agreement personally.” IBC did not specifically contend otherwise, and simply lumped Parrott’s individual claims in with its Section 1132(a)(2) argument. Thus, “to the extent that IBC sought to challenge the district court’s rejection of the motion to compel arbitration as to Parrott’s individual claims, it failed to brief such a position adequately and thus forfeited the issue. Even if it were not forfeited, the result is unchanged, as ‘arbitration is a matter of consent’ and Parrott provided no such consent.”

Next, the court addressed the effective vindication doctrine, noting, “we have not had occasion to address the doctrine directly,” and acknowledging that other circuit courts had adopted it in the ERISA context.

IBC tried to convince the Fifth Circuit to buck the trend, arguing that the doctrine should not apply to ERISA claims. IBC noted that the Supreme Court had not applied it in any case, and the Fifth Circuit has found ERISA claims arbitrable. Second, IBC argued that the doctrine should not apply because Parrott could receive “all of the relief available to him under ERISA through individual arbitration.” Finally, IBC argued that the arbitration clause was severable.

Parrott responded with the argument that has been successful in other circuits: the arbitration clause conflicts with ERISA by forbidding representative actions, which are essential for Section 1132(a)(2) claims. He contended that the provision limiting relief to individual damages violates the effective vindication doctrine by waiving statutory remedies. Furthermore, he argued that the arbitration clause was not severable.

The Fifth Circuit joined its sister courts and sided with Parrott. The arbitration provision stated that “[a]ll Covered Claims must be brought solely in the Arbitration Claimant’s individual capacity and not in a representative capacity or on a class, collective, or group basis.” The court ruled that this requirement “is facially at odds with the statutory text of § 1109 and the remedy it provides.”

Section 1109’s remedy, enforced through Section 1132(a)(2), “gives the Secretary, plan participant, beneficiary, or fiduciary the authority to seek relief for any losses to the plan.” This broad scope “means that the remedy provided for in this instance is that a § 1132(a)(2) plan participant can seek to recover all losses and reclaim all profits that resulted from the breach of fiduciary duties.” Suits under Section 1132(a)(2) are “brought on behalf of the plan and thus in a representative capacity.”

As a result, “[b]ecause § 1132(a)(2) suits, by definition, must be brought in a representative capacity and plan participants are entitled to bring suit to recover all losses and profits, the anti-representative-action clause and remedy limitation are violative of the effective vindication doctrine.” The Fifth Circuit explained that “[t]his reading is supported by multiple circuits” and was consistent with the Supreme Court’s interpretation of Section 1132(a)(2) in LaRue v. DeWolff, Boberg & Assocs. Inc.

As for severability, the Fifth Circuit applied Texas law because “there is no evidence, nor does either party allege, that the FAA preempts Texas law when it comes to interpreting the severability clause.” Under Texas law, the court found the clause ambiguous, and chose to remand the issue to the district court for resolution in the first instance because interpretation of ambiguous contractual provisions is a factual issue.

Finally, the court addressed whether the arbitration provision contained exculpatory provisions unlawful under ERISA Section 1110(a). That statute voids any provision in a plan “which purports to relieve a fiduciary from responsibility or liability for any responsibility, obligation, or duty” under ERISA.

Parrott argued that the representative-action waiver, remedy limitation, and standard-of-review provisions were unlawful under Section 1110(a). The court limited its discussion to the standard-of-review provision because it had already invalidated the other two provisions under the effective vindication doctrine.

The court ruled, “Given that IBC asserts that it does not believe the provision reaches breach-of-fiduciary-duty claims, and further given that Parrott correctly suggests that changing to a more deferential standard of review would, by definition, relieve the Plan’s fiduciaries of liability, the standard-of-review provision is void to the extent that it expands beyond the reach of denial-of-benefits claims.”

As a result, the court reversed the district court’s denial of IBC’s motion to compel arbitration as to Parrott’s Section 1132(a)(2) claim because the plan’s unilateral amendment was lawful and applied to Parrott, but affirmed as to Parrott’s individual claims under Section 1132(a)(3) because he did not give consent. Furthermore, the court voided the standard of review provision “to the extent it purports to reach breach-of-fiduciary-duty claims,” and remanded “for further proceedings on whether provisions that violate the effective vindication doctrine can be severed.”

In short, even the Fifth Circuit is not immune to peer pressure. The effective vindication doctrine’s winning streak continues.

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

Class Actions

Ninth Circuit

Chea v. Lite Star ESOP Committee, No. 1:23-CV-00647-SAB, 2026 WL 383318 (E.D. Cal. Feb. 11, 2026) (Magistrate Judge Stanley A. Boone). Linna Chea is a former employee of B-K Lighting, Inc. and a participant in the Lite Star Employee Stock Ownership Plan (ESOP). She filed this class action in 2024, alleging claims under ERISA for prohibited transactions, breach of fiduciary duties, failure to monitor, and co-fiduciary liability. Her allegations were based on a 2017 transaction in which B-K’s founder, Douglas W. Hagen, sold 100% of the company’s stock to the ESOP for $25.27 million, which was partially financed through a loan from Hagen to the ESOP. Chea alleged that this transaction exceeded the fair market value of the company and that the ESOP’s fiduciaries “failed to remedy the alleged fiduciary violations arising from the transaction, resulting in millions of dollars of losses to the ESOP and its participants.” After surviving a motion to dismiss, the parties negotiated a settlement. The court gave it preliminary approval in October of 2025, and in this order made it final. The court certified a class including all participants and beneficiaries of the ESOP from its inception until December 31, 2024, Chea was confirmed as the class representative, and law firms Feinberg, Jackson, Worthman & Wasow LLP and Cohen Milstein Sellers & Toll PLLC were confirmed as class counsel. The settlement provided $2.25 million in aggregate economic value to the ESOP and its participants, or about $11,000 per class member prior to deductions. This represented “approximately 45% of the estimated maximum damages.” The court found the settlement amount to be fair, reasonable, and adequate. The court noted that an independent fiduciary report had approved and authorized the settlement. The court further approved attorneys’ fees of $500,000, representing 22% of the common fund, which fell within “[t]he typical range of acceptable attorneys’ fees in the Ninth Circuit,” which is “20% to 33.3% of the total settlement value, with 25% considered a benchmark percentage.” Chea’s requested $5,000 service award was also approved. Finally, the court determined an appropriate cy pres recipient for any residual settlement funds. The parties both offered suggestions, and the court went with plaintiffs’ choice, the Pension Rights Center, “a nonprofit consumer organization dedicated to protecting and promoting the retirement security of workers and retirees.” The action was dismissed with prejudice, and the court retained jurisdiction for six months to oversee settlement administration.

Discovery

Second Circuit

Carfora v. TIAA, No. 21-08384 (KPF), 2026 WL 392039 (S.D.N.Y. Feb. 12, 2026) (Judge Katherine Polk Failla). We have reported on this five-year-old case several times. In fact, two rulings in it have been our case of the week: (1) the court’s September 28, 2022 grant of defendants’ motion to dismiss, and (2) the court’s May 31, 2024 order denying defendants’ motion to dismiss plaintiffs’ amended complaint. The plaintiffs are university professors and researchers of various institutions who are participants in benefit plans administered by Teachers Insurance and Annuity Association (TIAA). Generally, plaintiffs allege that TIAA violated ERISA by driving plan participants away from their investments and into TIAA-sponsored higher-fee proprietary offerings through “cross-selling.” Before the court here was a discovery dispute. Plaintiffs have issued subpoenas to various non-party institutions such as Harvard, CalTech, the University of Chicago, and Dartmouth to obtain “a representative cross-section of TIAA recordkept plans.” The subpoenas were designed “to determine what a diverse cross-section of institutional fiduciaries did and did not do in the face of TIAA’s alleged cross-selling to show what the fiduciary standard should be in this case.” The university respondents objected, contending that the discovery requests were overly burdensome. An agreement was reached on one request, but they could not agree on the second, which concerned “documents related to TIAA’s promotion and sale of its non-plan products and services to participants, followed by a list of documents that may be encompassed in that request.” The court sided with the respondents, stating that it “views the probative value of the information that may be produced…to be negligible, on both an individual and classwide basis. Conversely, Respondent Universities have shown that the burden on them would be steep… The Court does not believe it is appropriate, under Rule 26, to force the nonparty Universities to bear this burden for information of such limited relevance.” The court acknowledged that plaintiffs had suggested a narrowing of their request “to include only minutes and materials from fiduciary meetings where TIAA’s marketing and/or sale of non-plan products and services was discussed.” However, “the Court is unaware if this proposition was ever discussed with Respondent Universities. And by not raising it earlier, Plaintiffs have deprived Respondent Universities of the opportunity to respond to the Court on the issues of relevance and burden.” As a result, the court denied plaintiffs’ motion to compel, as it was “unpersuaded that the probative value of the materials would be proportionate to the burden of producing them.”

Third Circuit

Schaefer v. Unum Life Ins. Co. of America, No. 4:24-CV-00590, 2026 WL 396445 (M.D. Pa. Feb. 12, 2026) (Judge Matthew W. Brann). Barbara Schaefer filed this action against Unum Life Insurance Company of America, alleging that it improperly terminated her disability benefits. She brought six claims for relief, including “breach of contract, bad faith insurance practice, improper denial of benefits, and breach of fiduciary duties under ERISA.” Now the parties are embroiled in a discovery dispute. Schaefer served interrogatories and requests for production of documents on Unum, seeking information on topics such as employment information for claims adjusters, supervision of claims adjusters, compensation to medical reviewing company Dane Street, and governmental investigations into Unum. Unum objected, relying on a list of “general objections” in which it claimed that the requests were beyond the scope of the Federal Rules of Civil Procedure, overly broad, unduly burdensome, and protected by privilege, among others. Schaefer filed a motion to compel and for leave to serve additional interrogatories above and beyond the limit in the Federal Rules of Civil Procedure. The court deemed Unum’s general objections to be waived because they were “boilerplate” and attempted to “shift the burden of determining whether each and every interrogatory or request for production could be objectionable to this Court by invoking the entire realm of possible objections, even where certain objections are clearly inapplicable to specific interrogatories or requests for production of documents.” The court then addressed Schaefer’s specific requests. The court required Unum to provide information related to incentives, bonuses, or reward programs for employees involved in reviewing Schaefer’s disability claims, but not general compensation documents. The court denied Schaefer’s request for “batting average” information – i.e., the percentage of claims approved by Unum – as it was deemed to have minimal probative value and would impose an unacceptable burden on Unum. The court allowed discovery of Unum’s internal review procedures and supervisory structure, as they were relevant to Schaefer’s bad faith claim. However, the court limited the scope to procedures related to Schaefer’s claim denial; “Defendant need not produce documents or information surrounding policies that are far afield from the issue at hand.” Regarding medical reviewer Dane Street, the court allowed discovery of relevant information related to its compensation for, and role in, Schaefer’s claim denial, but denied the requests for all communications between Unum and Dane Street, as well as batting average information, as these requests were unduly burdensome. The court also denied Schaefer’s request for documentation of communications with state or federal agencies investigating Unum, as “it is clear that this request is too broad; indeed, it is vague, ambiguous, and overbroad in scope. As a large insurance company, Defendant will certainly have been the subject of agency investigations within the last ten years. Such a request would portend an immense obligation for Defendant, a burden that far outweighs the slight probative value.” Finally, the court denied Schaefer’s request for leave to serve additional interrogatories, as some of her requests had been rejected by the court, and thus she was still under the limit imposed by the Federal Rules.

Life Insurance & AD&D Benefit Claims

Fifth Circuit

Camardelle v. Metropolitan Life Ins. Co., No. CV 25-1382, 2026 WL 397166 (E.D. La. Feb. 12, 2026) (Judge Eldon E. Fallon). In our December 24, 2025 edition, we reported on the court’s ruling in this case granting Metropolitan Life Insurance Company’s motion to dismiss Ryan Camardelle’s complaint in which he sought ERISA-governed accident insurance benefits for the loss of vision in his right eye. Camardelle alleged that his vision loss was attributable to an injury in September of 2019, but that he did not become blind until 2023. In its ruling, the court determined that even if the 2019 incident constituted an “accident” under the plan, the loss of eyesight in October 2023 did not meet the plan’s requirements because the plan requires an insured’s physical loss to occur within 365 days of the accident. Here, the gap was more than four years. Camardelle filed a motion to vacate the dismissal, which the court denied in this order. Camardelle argued that the court “committed a manifest error of fact” because his physical loss “did occur within 365 days of the covered accident because he had three unsuccessful corneal transplants within 365 days of the accident.” The court stated that Camardelle “has not identified an intervening change in controlling law,” and “did not present any new evidence that was not previously available. Instead, Plaintiff points the Court to facts that it already considered in its original order and reasons. Thus, Plaintiff’s motion for reconsideration asks the Court to rehash arguments and evidence that it previously considered – an impermissible task under a Rule 59(e) analysis.” As a result, the court denied Camardelle’s motion.

Medical Benefit Claims

Fourth Circuit

Healey v. United Healthcare Ins. Co., No. 5:24-CV-312-BO-RN, 2026 WL 377119 (E.D.N.C. Feb. 10, 2026) (Judge Terrence W. Boyle). Kempton Healey is a beneficiary under an ERISA-governed employee health plan, administered by United Healthcare, who was diagnosed with lipedema in 2021. Conservative treatment was unsuccessful, so Healey’s doctors recommended, and she underwent, a series of suction-assisted lipectomies. However, United denied her claims for these procedures, contending that it received insufficient information to make a medical necessity decision. Healey’s doctor participated in a peer-to-peer conversation with United’s reviewer, but United denied again on the same grounds. Healey then pursued an administrative appeal, during which United discovered that it was missing some portions of her submission. It contacted Healey’s provider and requested a resubmission, but it did not wait for a response and denied her appeal almost immediately thereafter. Healey requested an external review, but the denial was again upheld. Thus, Healey brought this action alleging wrongful denial of benefits under ERISA, and the parties filed cross-motions for summary judgment. The court employed the abuse of discretion standard of review because the benefit plan gave United discretionary authority to make benefit determinations. The court considered several factors from the Fourth Circuit’s Booth v. Wal-Mart test to determine whether United abused its discretion. First, the court found that, although “neither party was particularly diligent in their communications,” United “knowingly decided the appeal on an incomplete set of materials.” The court further found that these missing materials were material because they included “detailed provider letters, treatment history, and symptom documentation, all supporting Healey’s claim… United should have considered the whole appeal.” Next, the court examined the entire record and determined that Healey satisfactorily showed that she suffered from lipedema and that her treatment should have been covered: “The complete record is replete with evidence satisfying the criteria. More to the point, the complete record shows that the liposuction satisfied the plan’s definition of ‘medically necessary.’ It treated lipedema, was not cosmetic, and arose only as a substitute for failed conservative treatment.” Furthermore, the court questioned United’s decision-making process, particularly its assignment of Healey’s appeal to a doctor not licensed in North Carolina and its failure to consider additional materials submitted during the external review. Finally, the court addressed United’s dual role as both the claim administrator and insurer; the court found that while this created a potential conflict of interest, there was no evidence that this affected the decision. As for a remedy, the court awarded Healey the out-of-pocket cost of her procedures, totaling $88,060. United argued that she should only be able to recover the in-network cost of the procedures, but the court disagreed: “United’s blanket denial of benefits prevented her from exploring in-network alternatives.” The court also found an award of attorneys’ fees to Healey was appropriate given United’s “willful blindness to the omitted portions of the appeal and failure to reconsider denial after it gained access to the complete record.” The court thus granted Healey’s motion for summary judgment and denied United’s. It deferred ruling on the amount of Healey’s fees, and the amount of prejudgment interest, until it received further submissions from the parties.

Sixth Circuit

Patterson v. Swagelok Co., Nos. 1:20-CV-566, 1:21-cv-470, 2026 WL 375529 (N.D. Ohio Feb. 11, 2026) (Judge J. Philip Calabrese). This case is a consolidation of two long-running cases by husband and wife Eric and Laura Patterson; both cases have been up to the Sixth Circuit and back. The couple was involved in separate motor vehicle accidents and both received medical treatment paid for by insurer United Healthcare under an ERISA-governed benefit plan sponsored by the Swagelok Company. Eric and Laura both received compensation from the other drivers in the form of settlements. United pursued reimbursement against both pursuant to a provision in the summary plan description. United was successful with Eric, but not with Laura, because Laura was able to demonstrate that the controlling benefit plan document did not contain a reimbursement provision. Both Pattersons then filed suit against United and Swagelok to challenge the handling of their claims. After the Sixth Circuit’s most recent decision, the district court made several rulings in January paring down the couple’s claims. In short, the court ruled that Eric could pursue certain claims under ERISA while Laura could proceed with certain state law claims. The couple filed a motion for reconsideration, but found no relief from the court in this order. The court noted at the outset that their motion did not comply with the court’s civil standing order, which limits motions for reconsideration to two pages. Furthermore, the court found that they did not meet the high bar for reconsideration, which required “clear error of law, newly discovered evidence, or an intervening change in controlling law or to prevent manifest injustice.” The court offered three reasons in support. First, Laura lacked Article III standing to pursue her ERISA claims because her claims “do not turn on aspects of the ERISA Plan or its application, but on the primary conduct of Defendants in pursuing recovery – that is, malicious prosecution, abuse of process, and tortious interference. These claims arise from Defendants’ non-fiduciary conduct.” Second, the couple could not rely on the Supreme Court’s decision in Cigna Corp. v. Amara to argue that Laura suffered monetary harm that was cognizable under ERISA. “Mrs. Patterson’s monetary harm does not result from Defendants’ wrongful ERISA conduct. Indeed, the claims are not claims about Mrs. Patterson’s entitlement to benefits that ‘originate[] with the ‘terms and conditions’ of the Plan.’” Third, the couple could not pursue claims on behalf of the plan. The court noted that the Sixth Circuit had previously determined that Eric lacked standing to seek relief on behalf of the plan, and Laura’s arguments failed for the same reason. “[T]he current state of the record and the amended complaint suffers from the same flaws recognized by the Sixth Circuit decision with respect to Mr. Patterson’s claims on behalf of the plan. Therefore, without more, reconsideration of Mrs. Patterson’s standing for her ERISA claims is not appropriate.” With that, the court denied the Pattersons’ motion for reconsideration.

Seventh Circuit

Downey v. ATI Holdings, LLC, No. 25-CV-5785, 2026 WL 371127 (N.D. Ill. Feb. 10, 2026) (Judge April M. Perry). Suzanne Downey was injured by a third party and received medical treatment from ATI Physical Therapy. ATI was an in-network provider with United Healthcare Insurance Company of Illinois (UHC), and submitted bills to UHC for Downey’s treatment. UHC, through its affiliate, Optum, allegedly only issued partial payments, so ATI imposed a lien on Downey’s settlement with the third-party tortfeasor. Downey disagreed with this decision, contending that ATI’s contract with UHC “prohibited ATI Holdings from collecting payments from UHC insureds outside of applicable deductibles or copays, or imposing liens on insureds’ tort recoveries, even if ATI Holdings disputed the amount due.” Downey filed this action in state court, asserting numerous state law claims for relief against ATI and related defendants. Later, she amended her complaint to add an “alternative” claim under ERISA to enforce or clarify her rights to benefits under an ERISA plan. ATI seized on the amendment to remove the case to federal court based on ERISA preemption, and filed a motion to dismiss. Simultaneously, Downey filed a motion to remand. ATI contended that Downey failed to state a plausible ERISA claim because “it is not a suable entity under ERISA, which provides liability only for plans, plan administrators, and any entity that has the obligation to pay benefits under a plan.” Downey did not put up much of a fight. She “basically agrees,” and contended that “she was duped into adding the ERISA claim by Defendants[.]” The court did not argue. It noted that ERISA “does not define the proper defendants,” and “[t]he Court has not found, and the parties have not cited, any binding precedent addressing whether third-party medical providers are properly suable under ERISA.” However, in this case, it was clear ATI was not a proper defendant for Downey’s ERISA claim. The plan did not “confer any rights or obligations on Plaintiff with respect to her relationship with Defendants…the Plan provisions cited by Plaintiff…do not include any reference to the reimbursement rights of (or limitations on) medical providers. To the contrary, Plaintiff’s entire theory of liability rests on the separate contract between Optum and ATI Holdings.” As for Downey’s state law claims, the court declined to exercise supplemental jurisdiction over them. The court found that remanding the case to state court was preferable, considering factors such as judicial economy, convenience, fairness, and comity. The court noted that state law issues would predominate in the litigation, and both Downey and ATI were Illinois residents, indicating “more state interests than federal ones.” Furthermore, the claims were not preempted by ERISA. Finally, the court declined to award ATI attorney’s fees under ERISA after applying the Seventh Circuit’s five-factor test. The court determined that Downey did not act in bad faith and “thus no deterrence is necessary.” Furthermore, “the question as to [] whether a medical provider could ever be a proper defendant under 29 U.S.C. § 1132(a)(1)(B) has not been definitively resolved by either Illinois courts or in the Seventh Circuit,” and thus Downey’s claim “was not baseless.” In the end, the court dismissed Downey’s ERISA claim and gave her one week “to file a notice regarding whether or not she intends to file an amended complaint to attempt to state a plausible ERISA claim.” If not, the court will remand the case back to state court.

Plan Status

Fifth Circuit

Aikens v. Colonial Life & Accident Ins. Co., No. CV 24-0580, 2026 WL 373862 (W.D. La. Feb. 10, 2026) (Judge S. Maurice Hicks, Jr.). In our December 17, 2025 edition we introduced you to a business curiously named “Just What You Expect.” Colonial Life & Accident Insurance Company issued four individual term life insurance policies, each worth $250,000, to individuals allegedly associated with the company, including Daniel Dewayne Aikens and Keelien Lewis, each of whom allegedly had a 25% ownership in the business, which was named as the beneficiary. Two months after the policy was issued, in 2017, Lewis did not get what he expected. He died suspiciously; his death was eventually ruled a homicide. Colonial Life investigated and learned that Aikens had been charged with several unrelated federal crimes (he was convicted and sentenced to sixteen years in prison for two Louisiana bombings), and that news articles indicated he was a suspect in Lewis’ death. Uncertain as to whether it should pay any benefits, or to whom, Colonial Life filed this interpleader action. In December, over Aikens’ objections, the court granted Colonial Life’s motion to be dismissed from the case after depositing the insurance proceeds. In that ruling the court determined that Aikens could not assert claims under ERISA against Colonial Life because the insurance policy was not governed by ERISA. Instead, it “was for the benefit of the business, not for the benefit of Lewis as an employee,” and “if the business was owned equally by four individuals…then Lewis was not an employee for whom the employer established an ERISA plan[.]” Aikens filed a motion for reconsideration, which the court quickly denied in this order. “Although Aikens disagrees with the Court’s interpretation of ERISA law and interpleader doctrine, such disagreement does not constitute an obvious legal error or extraordinary circumstance warranting relief. The Motion identifies no newly discovered evidence, no fraud, no void judgment, and no exceptional circumstance justifying reopening the case. Instead, it reiterates arguments that were previously considered and rejected. Accordingly, Rule 60(b) relief is not appropriate.”

Pleading Issues & Procedure

Second Circuit

Moody v. Sedgwick Claims Mgmt. Servs., Inc., Nos. 25 Civ. 8671 (JHR), 25 Civ. 9787 (JHR), 25 CIV. 10720 (JHR), 2026 WL 370332 (S.D.N.Y. Feb. 10, 2026) (Judge Jennifer H. Rearden). You may remember Amari Moody from previous editions of Your ERISA Watch. As the court explained, Moody, “proceeding pro se, has brought seventeen actions in this District since October 2025, including the four before this Court concerning a sinus surgery and related benefits disputes.” These include cases against Sedgwick Claims Management Services, Inc., Unum Group, and Cigna Health and Life Insurance Company. In this order the court addressed the many “overlapping” motions filed by Moody in each case. First, the court denied Moody’s request to have the matters reassigned to a different judge. The court noted that it had promptly ruled on Moody’s emergency motions, and that dissatisfaction with a judge is not grounds for reassignment. Next, the court denied Moody’s emergency motions, which fell into three categories. First, Moody sought “preservation of records,” but the court noted that the defendants were already required to preserve records, and “[i]n any event, emergency relief or a preservation order are not ‘necessary’ at this stage.” Second, Moody sought to compel the production of documents on an emergency basis. The court ruled that this was improper; Moody could not “make an end run around the rules of discovery…by framing what is essentially a request to compel discovery as a motion for a temporary restraining order.” Third, Moody demanded relief on the merits of his benefit claims. The court ruled that Moody was not entitled to such a “drastic remedy” because he did “not demonstrate (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in h[is] favor.” Next, the court discussed Moody’s “other applications,” which included motions for “clarification,” “Article III supervisory intervention,” and a “motion for judicial notice of structural defects, retaliatory litigation conduct, and ADA Title II access violations.” The court found that its previous rulings covered most of these motions as well, and that Moody had consented to electronic service of documents and had not requested any Title II accommodations. Having addressed Moody’s sixteen pending motions, the court issued him a stern warning, informing him that his motions were “improper and delays the Court’s resolution of the case[s].” Thus, if Moody files any additional frivolous motions, “the Court will direct him to show cause why the Court should not bar him from filing any future submissions without leave of Court… Plaintiff is on notice that continued abuse of the judicial process could lead to sanctions” (emphasis in original).

Ninth Circuit

Saloojas, Inc. v. United States Dep’t of Health & Human Servs., No. 25-CV-04735-EMC, 2026 WL 406040 (N.D. Cal. Feb. 12, 2026) (Judge Edward M. Chen). Saloojas, Inc., is a medical testing business that contends “it is owed more than $18 million for tens of thousands of COVID-19 diagnostic tests that it provided to the public.” As readers of Your ERISA Watch know, in the last few years Saloojas has initiated multiple actions against health insurers to obtain reimbursement. The courts have generally thwarted these efforts, ruling that health care providers like Saloojas do not have a private right of action under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as incorporated into ERISA. Saloojas reportedly went bankrupt and is now trying to recoup from its patients, who are not happy. Saloojas also has a new legal strategy; instead of suing insurers, it has sued the federal government. In this action Saloojas seeks to compel the Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury, along with their respective Secretaries, to enforce reimbursement provisions under the FFCRA and CARES Act. Saloojas argues that these agencies “unlawfully withheld or unreasonably delayed enforcement action under the Administrative Procedure Act (‘APA’)[.]” Saloojas also asserted a claim under the Mandamus Act and a Fifth Amendment takings claim. The government moved to dismiss. The court examined the FFCRA and CARES Act and noted that they authorize the Secretaries of HHS, Labor, and Treasury to implement these provisions through guidance or other means. The court further noted that under the APA, agency enforcement decisions are generally committed to agency discretion and are presumptively non-reviewable unless Congress “imposes meaningful standards constraining the agency’s discretion.” The court found that the FFCRA and CARES Act do not mandate specific enforcement actions by the Secretaries, thus leaving enforcement to agency discretion. Saloojas argued that the laws imposed “a mandatory, ministerial duty on the Secretaries to initiate enforcement actions wherever insurers allegedly fail to reimburse providers in accordance with the FFCRA,” but the court ruled that this interpretation “does not account for the statutory context.” The FFCRA and CARES “do[] not direct Secretaries to take any particular enforcement action.” Thus, the court ruled that it did not have jurisdiction over Saloojas’ APA claim. The court dismissed the Mandamus Act claim for the same reasons, as that act requires a “clear and certain” claim, a ministerial duty “so plainly prescribed as to be free from doubt,” and no other adequate remedy. The court found no ministerial duty because, again, enforcement authority was committed to agency discretion. Finally, the court dispensed with Saloojas’ Fifth Amendment takings claim. The court ruled that there was no vested entitlement to reimbursement enforceable against the federal government because “[t]he reimbursement obligations run from insurers to providers. The statutes do not obligate the federal government to pay providers in lieu of insurers, nor do they guarantee reimbursement in the event insurers fail to comply, as the statutes do not obligate the government to pay providers in lieu of insurers.” Furthermore, “only affirmative conduct by the government can give rise to a viable takings claim. A failure to act does not generally constitute a taking.” In the end, the court explained that it was “sympathetic to the frustration faced by Saloojas who responded to public need and provided services with a fair expectation of payment. But the law under the APA is clear. The Court is without power to review the Secretaries’ action or inaction with respect to federal enforcement of the statutes at issue.”

Retaliation Claims

Seventh Circuit

Horwitz v. Learjet, Inc., No. 24-CV-2709, 2026 WL 395632 (N.D. Ill. Feb. 12, 2026) (Judge John Robert Blakey). David Horwitz worked as a quality control inspector for Learjet, Inc. for thirteen years. He has unfortunately had two bouts with different cancers (lung and colorectal). In 2023, while at work, Horwitz felt extremely tired and uncomfortable, which he attributed to side effects from his cancer. He alleged that he “rested his head in his hand while he contemplated whether he should work through the pain, go to the hospital, or go home.” Later that day, Horwitz was terminated for sleeping on the job. Horwitz alleges that this occurred even though he explained to Learjet his “medical condition and the side effects.” Horwitz filed this action, alleging violations under the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and ERISA. Learjet filed a motion to dismiss. On Horwitz’s ADEA and ADA claims, the court found that Horwitz “offers no factual connection between the adverse employment action and his membership in any protected class under either the ADEA or ADA.” The court noted that Horwitz admitted to resting his head on his desk, which was perceived as sleeping, and offered no evidence that his age or disability was the real cause, or even a factor, in his termination. Thus, the court dismissed these claims due to a lack of causation. As for Horwitz’s ERISA claim, he contended that his termination violated § 510 of ERISA by “‘abruptly’ terminating” his and his wife’s healthcare coverage. The court noted that to establish a prima facie case under § 510, a plaintiff must demonstrate a specific intent to interfere with benefit rights. However, Horwitz “offers nothing beyond his own conclusory assertions that he and his wife incurred high medical costs and his belief that the ‘sleeping on the job’ reason for his termination was ‘a pretext to fire Plaintiff.’” The court found that Horwitz had not offered any “evidence (direct or indirect) to show that Defendant’s decision to terminate him was motivated by the desire to cease paying Plaintiff’s medical bills.” The court acknowledged that while Horwitz was not required to “prove his claim” at the pleading stage, “he must assert some facts showing the specific intent § 510 requires.” Because he did not, the court dismissed this claim as well. As a result, the court granted Learjet’s motion to dismiss in its entirety, although it allowed Horwitz an opportunity to amend his complaint.

Standard of Review

Ninth Circuit

Hildebrandt v. Unum Life Ins. Co. of Am., No. 8:23-CV-02297-ODW (JDEX), 2026 WL 413748 (C.D. Cal. Feb. 13, 2026) (Judge Otis D. Wright, II). Peter Hildebrandt was an employee of The Boston Consulting Group, Inc. (BCG) and a participant in BCG’s ERISA-governed long-term disability (LTD) plan, insured by Unum Life Insurance Company of America. Hildebrandt worked for BCG in California as a partner and is a current resident of that state. BCG employs thousands of employees across the United States and internationally, and is based in Boston, Massachusetts. The Unum group policy insuring the plan has a choice of law clause providing that Massachusetts law governs the agreement. The policy grants Unum discretionary authority to make all benefit determinations on LTD claims. After Unum denied Hildebrandt’s claim for LTD benefits, he initiated this action. At issue before the court in this order were the parties’ cross-motions regarding the applicable standard of review. Unum argued for the abuse of discretion standard of review because the policy granted it discretionary authority. Hildebrandt sought de novo review, arguing that California Insurance Code Section 10110.6, which prohibits discretionary clauses in disability insurance policies for California residents, invalidated the grant of discretionary authority. The court held that it “must start with the ‘threshold question’ of ‘what law applies to interpret the terms of an ERISA insurance policy.’” The court held that the answer to that question in this case was Massachusetts law because of the policy’s choice of law provision, and thus California’s ban on discretionary clauses did not apply. The court further stated that “federal choice of law rules require that, ‘[w]here a choice of law is made by an ERISA contract, it should be followed, if not unreasonable or fundamentally unfair.’” The court determined that the choice made here was not unfair because, “in light of BCG’s global reach, electing a uniform choice of law for the plan promotes Unum’s uniform administration regardless of the location of a particular participant.” The court stated that without this uniformity, “[t]he plan’s administrative costs and reserves for litigation expenses would necessarily have to account for greater risk and uncertainty [of a] plan [that is] subject to the choice of law doctrine of every state in which it might be sued, and whatever substantive law that doctrine might import.” Thus, according to the court, enforcing the choice of law provision ultimately helps beneficiaries (although Hildebrandt might disagree) by contributing to “the ‘soundness and stability of plans,’ an explicit statutory objective of ERISA.” The court acknowledged Hildebrandt’s arguments regarding the public policy benefits of enforcing California’s law, but ultimately concluded that the choice of law analysis took precedence. “The requisite choice of law analysis ‘requires the Court to first determine which state’s law should apply to a dispute, and only then to examine the substance of a state’s law.’” Because Massachusetts does not ban discretionary clauses, and its law controlled, “the proper standard of judicial review in this case is abuse of discretion.” The court thus granted Unum’s motion and denied Hildebrandt’s. (Disclosure: Kantor & Kantor LLP represents Mr. Hildebrandt in this action.)