McKee Foods Corp. v. BFP Inc., No. 25-5416, __ F.4th __, 2026 WL 936759 (6th Cir. Apr. 7, 2026) (Before Circuit Judges McKeague, Readler, and Davis)

Pharmacy benefit managers (PBMs) play a pivotal role in American health care. They act as intermediaries between insurers, benefit plans, pharmacies, and manufacturers. Among the services they provide are administrative services, negotiating drug rebates, setting up pharmacy networks, and working with health plans to structure and manage benefits.

As the Sixth Circuit noted in this decision, PBMs have become “ubiquitous.” PBMs administer prescription drug benefits for around 270 million people, which is basically “everyone with a prescription drug benefit.” The three major nationwide PBMs are CVS Caremark, Express Scripts, and OptumRx, which together process about 80% of prescription claims.

Ideally, the expertise, volume, and exclusivity PBMs bring to the market enable lower prices for health plans and their beneficiaries. However, PBMs have their critics. Many PBMs are part of the ever-growing vertical integration of health care, which means they (or their corporate parents) own their own pharmacies. PBMs have been accused of giving their own pharmacies “preferred” status in their networks and “steering” customers to those pharmacies.

As a result, state and local governments have sought to regulate PBMs, alleging that these steering practices have led to the closure of smaller, rural, out-of-network pharmacies, thus limiting prescription drug access in the communities they serve.

Of course, because health care is often delivered through employee benefit plans, PBMs and their practices are deeply intertwined with ERISA. Recently, as governments have sought to tighten the reins on PBMs, one question keeps recurring: does ERISA preempt these regulations? This was the question faced by the Sixth Circuit in this week’s notable decision.

The case has an unusual origin. It did not begin, as you might think, as a dispute between a PBM and the government. Instead, it began as a dispute between a snack cake manufacturer and a local pharmacy based in Ooltewah, Tennessee.

The plaintiff was McKee Foods Corporation, which most people know through its bakery brands such as Little Debbie’s and Drake’s. McKee offered an ERISA-governed health benefit plan to its employees, which included a prescription drug program managed by the PBM MedImpact. In establishing the program, McKee also created a preferred pharmacy network.

Defendant BFP, Inc. (which does business as Thrifty MedPlus Pharmacy) used to be in McKee’s preferred pharmacy network. However, McKee kicked Thrifty Med out after an audit “revealed issues with its billing practices.” Thrifty Med contested this, and waged a multi-year campaign to get reinstated to the program.

Central to Thrifty Med’s efforts was the State of Tennessee’s enactment of Public Chapter 569 in 2021, followed by Public Chapter 1070 in 2023. These legislative initiatives were triggered by the Supreme Court’s 2020 decision in Rutledge v. PCMA, in which the high court ruled that certain Arkansas laws regulating the reimbursement rates PBMs offered to pharmacies were not preempted by ERISA. (This case was Your ERISA Watch’s notable decision in our December 16, 2020 edition.)

Rutledge emboldened Tennessee to take on PBMs by passing PC 569. Among other things, this statute “barred PBMs and covered entities from making participants pay higher or additional copays or coinsurance when obtaining prescriptions,” and “barred PBMs and covered entities from interfering with a patient’s choice of pharmacy” through the use of “inducement, steering, or offering financial or other incentives.”

Tennessee later amended these provisions by passing PC 1070. This new law “revised the prohibitions against PBMs and covered entities…to prevent interference with provider choice and restrict incentives that persuade patients to choose PBM-owned pharmacies.” It also “expanded the definitions of ‘pharmacy benefits manager’ and ‘covered entity’ to include plans governed by ERISA.” Finally, it “added language requiring PBMs to admit to their networks any willing pharmacy and precluding pharmacy favoritism.”

After PC 569 was enacted, Thrifty Med sought reinstatement to the McKee plan’s pharmacy network. McKee said no, which prompted three administrative complaints by Thrifty Med in 2021. (All three were eventually dismissed.)

McKee, annoyed by the onslaught, filed this action in 2021, seeking declaratory and injunctive relief. The State of Tennessee intervened as a party. McKee argued, among other things, that ERISA preempted Tennessee’s PBM laws. McKee sought a declaration to that effect, an injunction against the enforcement of the PBM laws, and an order preventing ThriftyMed from seeking reinstatement to McKee’s network.

The district court granted ThriftyMed’s motion to dismiss, finding that McKee’s claims were moot following the passage of PC 1070. However, on appeal the Sixth Circuit disagreed and sent the case back to the district court. (We covered this ruling in our March 27, 2024 edition.)

On remand, McKee added the State of Tennessee and the Commissioner of the Tennessee Department of Commerce and Insurance as defendants. The district court dismissed the State on sovereign immunity grounds but allowed McKee’s claims against the Commissioner to proceed. On dispositive motions, the court granted McKee relief, finding that McKee had standing to bring a pre-enforcement challenge and that the PBM laws had an impermissible connection with ERISA plans, thus preempting them. (This ruling was covered in our April 9, 2025 edition.) By this point Thrifty Med had become an afterthought; the court dismissed the pharmacy because it had ceased efforts to join McKee’s network.

The Commissioner appealed and this published decision, featuring the same lineup of judges as in the prior appellate ruling, was the result.

First, the Commissioner raised various procedural issues, which the Sixth Circuit quickly swatted away. The Commissioner argued that McKee had no standing to bring its ERISA claims, but the court ruled that McKee was acting as both a sponsor and a plan fiduciary, which gave it standing to sue under ERISA. Furthermore, ERISA authorized McKee to seek declaratory relief as a fiduciary.

Next, the Commissioner argued that the federal courts did not have jurisdiction to hear the case. However, the court ruled that it had jurisdiction over McKee’s pre-enforcement challenge because McKee “intended to engage in a course of conduct arguably affected with a constitutional interest and proscribed by statute” by dictating which pharmacies could be included in its plan, thereby limiting beneficiary choice under Tennessee’s PBM regulations. Furthermore, there was a “credible threat of enforcement” because of (1) the prior challenges to McKee’s network by ThriftyMed, and (2) repeated comments by the Commissioner that “he and his Department will enforce the PBM laws against ERISA plans – going as far as to single them out in at least two letters and a response to public comments.”

The Commissioner’s final procedural argument was that he had sovereign immunity. The court rejected this, finding that McKee’s claims against the Commissioner met the Ex Parte Young conditions of (1) “the complaint alleges an ongoing violation of federal law,” and (2) it “seeks relief properly characterized as prospective.”

Having wolfed down the appetizers, the court arrived at the main course of its meal: were Tennessee’s PBM regulations preempted by ERISA? The court examined ERISA’s preemption clause, which states that ERISA “supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” The Supreme Court has held that a state law “relates to” an ERISA plan if it has “either an impermissible ‘connection with’ the plan or a ‘reference to’ it.” The district court focused on the “connection with” prong, and thus the Sixth Circuit did as well.

The court examined separately the “any-willing-provider” provisions and the “incentive provisions” of Tennessee’s PBM laws. The “any-willing-provider” provisions required plans to admit into their networks any pharmacy willing to accept the terms and conditions of the plans. The court found that these laws were preempted by ERISA because they mandated a specific benefit structure, governed a central matter of plan administration, and disrupted nationally uniform plan administration.

The court emphasized that one of the primary goals of using a PBM was to create a network of preferred pharmacies that generated cost savings; the Tennessee laws “seek to upend this structure” by giving all pharmacies the ability to become “preferred.” This approach “requires a plan to be designed in a particular way. ERISA prohibits this.” Furthermore, the PBM laws affected “the scope and extent of a plan’s pharmacy network,” and required plans “to tailor benefits in ways specific to Tennessee,” both of which interfered with uniform plan implementation.

The Sixth Circuit explained that this conclusion was consistent with the Supreme Court’s decision in Rutledge because the Arkansas regulations in Rutledge were solely aimed at costs while Tennessee’s laws “diminish, if not outright eliminate, a plan’s ability to design its network in a way most accommodating and beneficial to its participants.”

As for the “incentive provisions” of the PBM laws, the court explained that they generally prohibited PBMs from offering financial incentives to steer patients to certain pharmacies. However, these provisions “impede cost-sharing arrangements, an important facet of pharmacy network structure.” The laws effectively “divvy up the allocation of who bears what cost and include things like copays and coinsurance…The effect [] is to impose across-the-board, universal copays and other fees at every pharmacy in a given network.” This interference was too much for the Sixth Circuit: “These provisions disrupt uniformity in McKee’s Health Plan and impermissibly dictate its plan’s design.”

Having found both sets of provisions preempted, the Sixth Circuit then examined whether they might be spared by ERISA’s “savings” clause, which saves from preemption state laws regulating insurance. The court ruled that the Commissioner had waived this argument by not raising it below, and in any event, it was not meritorious because the McKee plan was self-funded, which meant that state insurance laws could not reach it pursuant to ERISA’s “deemer” clause.

As a result, the district court’s ruling that Tennessee’s PBM laws were preempted by ERISA was upheld by the Sixth Circuit: “States can enact laws looking to regulate health care and PBMs. But those laws cannot trespass into ERISA’s territory. Because the Tennessee laws McKee challenges have an impermissible connection with ERISA plans, they are preempted.”

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

Arbitration

Eleventh Circuit

Snelling v. Coca Cola Beverages Florida, LLC, No. 8:25-CV-02444-JLB-LSG, 2026 WL 925652 (M.D. Fla. Apr. 6, 2026) (Judge John L. Badalamenti). Nicole M. Snelling worked for Coca Cola Beverages Florida, LLC and participated in its “P3 Connections Program.” This program is designed to be “the exclusive method through which Work-Related Issues will be resolved, with binding Arbitration being the final forum for any Work-Related Issue that is a Legal Dispute[.]” Snelling filed this action, which included, among other causes of action, two counts under ERISA alleging: “(1) that Defendant failed to properly provide Plaintiff with a timely and compliant COBRA election notice and (2) that Defendant breached its fiduciary duty by failing to ensure that Plaintiff received such COBRA notices and failed to administer and transition Plaintiff’s ‘HSA benefits.’” Coca Cola filed a motion to compel arbitration of the entire action based on the P3 Connections Program. The assigned magistrate judge issued a report and recommendation (R&R) in which she recommended granting the motion; Snelling objected to the recommendation, raising three arguments. First, Snelling argued that arbitration was premature because the parties had not yet mediated. However, the court noted that the Program included a mediation provision, and “[t]he parties need not mediate this case in federal court.” Second, Snelling argued that the P3 Program did not delegate decision-making regarding the arbitration’s scope to the arbitrator, but the R&R and the court disagreed: “The P3 Connection Program defines ‘Legal Dispute’ to include ‘any disagreement between an Employee and Coke Florida regarding the interpretation or scope of this Program.” Third, Snelling argued that her ERISA claims were not encompassed by the P3 Program’s arbitration provision. On this issue the court agreed, differing from the magistrate judge. “The P3 Connection Program exempts ‘an Employee’s claim for…any benefits under a plan governed by [ERISA]’ from its definition of ‘Work-Related Issue.’… [The ERISA] counts both concern benefits under a plan governed by ERISA… Accordingly, those two claims are not subject to arbitration under the plain language of the P3 Connections Program.” However, despite this conclusion, the court still adopted the R&R’s ruling that Snelling’s ERISA claims did not bar the court from compelling arbitration of Snelling’s other claims. The P3 Program provided that if only some of an employee’s claims are excluded from arbitration, “then the claims subject to arbitration shall proceed to arbitration and the claims excluded from arbitration will be stayed pending a final outcome of the arbitration proceedings.” Thus, the court stayed the case pending arbitration of Snelling’s non-ERISA claims.

Breach of Fiduciary Duty

Third Circuit

Chrupcala v. Firstrust Savings Bank, No. CV 25-6578, __ F. Supp. 3d __, 2026 WL 927226 (E.D. Pa. Apr. 6, 2026) (Judge Chad F. Kenney). Kyle Chrupcala was an employee of Firstrust Savings Bank and participated in the bank’s ERISA-governed 401(k) and Profit Sharing Plan. The plan has an atypical investment strategy; according to Chrupcala the bank “has sole control over how employer contributions are invested and does not permit participants to direct the investment of any employer contributions to their accounts.” Instead, the bank directs its contributions exclusively into its “proprietary certificates of deposit and savings accounts,” the Firstrust Fund. Chrupcala contends that this investment strategy, which focuses on capital preservation and reducing volatility risk, is inappropriate for long-term investment objectives and resulted in losses to the plan. He filed this putative class action against the bank, asserting two causes of action under ERISA: violation of 29 U.S.C. § 1104(a)(1) for breach of the fiduciary duties of prudence and loyalty (Count I), and violations of 29 U.S.C. §§ 1106(a) and 1106(b)(1) for engaging in prohibited transactions (Count II). The bank filed a motion to dismiss for failure to state a claim, which resulted in this published decision. On Count I, the court found that Chrupcala plausibly alleged a breach of the duty of prudence by showing that Firstrust’s investment strategy was outside a range of reasonableness, given the long-term investment objectives of the plan participants. The court noted that the earnings rate of Firstrust’s contributions was 2.27% from 2000 to 2024, which was well below the 4.2% rate of inflation. The court rejected Firstrust’s argument that compliance with plan requirements shielded it from liability, emphasizing that ERISA’s duty of prudence supersedes plan terms. As for the duty of loyalty, the court found that Chrupcala’s allegations that Firstrust benefited from the investment strategy and reduced its withdrawal risks were sufficient to suggest a breach. The court noted that discovery might reveal that Firstrust’s actions were consistent with its fiduciary duties, but at this stage Chrupcala’s allegations “just pass the bar of plausibility[.]” The court then turned to Count II, the prohibited transaction claim, ruling that Chrupcala plausibly alleged violations of 29 U.S.C. §§ 1106(a)(1)(D) and 1106(b)(1) by showing that Firstrust used plan assets for its own benefit. Firstrust asserted as a defense the exemption outlined in Section 1108(b)(4) (addressing investment of plan assets in bank deposits). The court noted that “[w]hether a Section 1106(b)(1) claim is subject to an ERISA exemption under Section 1108(b)(4) appears to be an issue of first impression in this Circuit.” Ultimately, the court agreed that it was a proper defense, but ruled that its applicability was not apparent from the face of the complaint: “Whether employer contributions were invested ‘in deposits which bear a reasonable interest rate’ is a question of fact that requires discovery before it can be resolved.” The court arrived at a similar conclusion regarding Firstrust’s statute of limitations argument, ruling that this defense could not be resolved without discovery into when Chrupcala had “actual knowledge” of the material facts. In doing so, the court rejected Firstrust’s argument that “Plaintiff had actual knowledge based simply on the fact that he participated in the Plan, ergo he must have known that employer contributions were being directed towards the Firstrust Fund since that information was available to him.” As a result, Firstrust’s defenses may yet win the day, but that day is not today; its motion to dismiss was denied in its entirety.

Leslie v. Rentokil N. Am., Inc., No. 5:25-CV-01423-JLS, 2026 WL 950490 (E.D. Pa. Apr. 8, 2026) (Judge Jeffrey L. Schmehl). Kristin Leslie and Amy Ross are employees of Rentokil North America, Inc., the pest control company. They brought this putative class action alleging that they were required to pay a tobacco surcharge to maintain health insurance coverage under Rentokil’s employee health plan. Plaintiffs contend that the tobacco surcharge violates the non-discrimination provisions of ERISA, specifically 29 U.S.C. § 1182, because Rentokil did not offer a reasonable alternative standard to being tobacco-free, failed to provide proper notice of such a standard, and did not offer reimbursement of the surcharge paid prior to completing a smoking cessation program. They also allege that Rentokil breached its fiduciary duty under 29 U.S.C. §§ 1104 and 1106 by using plan assets to benefit itself at the expense of plan participants. Rentokil filed a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) and for failure to state a claim under Rule 12(b)(6). Rentokil argued that plaintiffs lacked standing because they “failed to allege that it would have been ‘unreasonably difficult due to a medical condition’ or ‘medically inadvisable’ for them to cease using tobacco products,” and did not request a waiver or alternative method of satisfying the plan’s requirements. Rentokil acknowledged that this argument was countered by 2013 regulations which “eliminated the ‘unreasonably difficult due to a medical condition’ or ‘medically inadvisable’ requirement that ERISA imposed on outcome-based programs,” but contended that the regulations were invalid because they conflicted with statutory language. The court disagreed, finding that the regulations did not conflict with ERISA and that Congress granted the relevant agencies the authority to promulgate such regulations. Furthermore, the court cited two cases disfavoring Rentokil’s argument, and noted that none supported Rentokil. The court further ruled that plaintiffs had standing because “Rentokil caused them a concrete injury when it imposed a tobacco surcharge that is traceable to Rentokil’s decision to impose tobacco surcharges under a discriminatory ERISA plan, which can be redressed with a refund of the surcharge which Plaintiffs seek in their Prayer for Relief.” On the merits, the court ruled that plaintiffs satisfactorily alleged that the plan did not offer “the full reward” as required by ERISA regulations because it did not provide retroactive reimbursement upon compliance with the wellness program procedures. The court found this understanding supported by the preamble to the 2013 regulations, which the court interpreted to mean that “[t]he term ‘full reward,’ then, must entail something more than merely the absence of the surcharge.” Rentokil also argued that plaintiffs’ interpretation of “full reward” conflicted with ERISA Section 702(b), which was designed to reward participants for adhering to health promotion programs. The court did not discern any conflict, concluding that the terms “adhere” and “full reward” are “actually distinct requirements.” Finally, the court found that Rentokil acted as a fiduciary, not a settlor, because Rentokil engaged in ongoing activity: “Rentokil withheld millions of dollars in tobacco surcharges from participants’ paychecks and used those funds to reduce its own financial obligations to the Plan.” To the extent Rentokil argued that it did not retain these funds, and they remained in the plan, the court ruled that this issue “can be fleshed out in discovery.” As a result, Rentokil’s motion was denied in its entirety.

Ninth Circuit

Berkeley v. Intel Corp., No. 5:23-CV-00343-EJD, 2026 WL 948725 (N.D. Cal. Apr. 8, 2026) (Judge Edward J. Davila). This class action (certified by the court on June 27, 2025) involves participants in Intel Corporation’s Minimum Pension Plan (MPP). The MPP was designed as a supplement to Intel’s Retirement Contribution Plan (RCP), and ensures a minimum monthly annuity for participants, compensating for any shortfall from the RCP. MPP pension benefits are paid as a single life annuity (SLA) for non-married participants, and are converted to joint and survivor annuities (JSAs) for married participants. The MPP used actuarial assumptions to calculate the JSA conversion, specifically the “GAM-83 mortality table” and interest rates set by the Pension Benefit Guaranty Corporation (PBGC). Plaintiffs contend in this action that these assumptions are outdated and unreasonable, and that the plan’s JSA calculations are not “actuarially equivalent” to SLAs as required by ERISA. They allege that Intel and the MPP administrative committee have violated “(1) the joint and survivor annuity requirements in 29 U.S.C. § 1055; (2) the anti-forfeiture rules of 29 U.S.C. § 1053; and (3) the Administrative Committee’s fiduciary duty to the class.” Defendants filed a motion for judgment on the pleadings, or, alternatively, for summary judgment. The court agreed with defendants that the term “actuarially equivalent” in 29 U.S.C. § 1055 does not inherently require the use of “reasonable” actuarial assumptions. The court examined the ordinary meaning, Congressional intent, and a Department of Treasury regulation, concluding that there is no evidence that Congress intended to impose a reasonableness requirement. The court accepted defendants’ argument that “‘actuarial equivalence’ merely reflects a mathematical principle, devoid of an implied ‘reasonableness’ requirement.” Here, that requirement was satisfied because the GAM-83 mortality table and PBGC interest rates used such principles and were employed consistently throughout the plan. The court acknowledged that other courts disagreed with this interpretation – most prominently the Sixth Circuit in Reichert v. Kellogg, decided just last month – but emphasized that the record in this case was different because it contained the 1976 Society of Actuaries Report, which “sought to ‘standardize and clarify’ actuarial terms to ‘achiev[e] compliance’ with ERISA,” and omitted any reference to reasonableness. The court further stressed that Section 1055 did not use the word “reasonable,” while other sections of ERISA did, thereby suggesting that “if Congress intended to impose a similar requirement to SLA and JSA conversions, it would have done so.” The court then turned to plaintiffs’ Section 1053 anti-forfeiture claim, ruling that this claim was tied to the Section 1055 claim because both relied on the same theory of unreasonable actuarial assumptions. Because the court found no violation of Section 1055, it also granted summary judgment on the forfeiture claim. Finally, the court ruled that the administrative committee did not breach its fiduciary duty because the use of the GAM-83 mortality table and PBGC interest rates did not violate ERISA. Additionally, the court found no evidence that the MPP authorized the committee to change the actuarial assumptions, as the plan terms did not grant such authority. As a result, the court granted defendants’ motion for summary judgment. Given the Eighth Circuit’s contrary ruling in Reichert, an appeal to the Ninth Circuit seems likely.

Discovery

Eighth Circuit

Tripp v. Unum Life Ins. Co. of Am., No. 4:26-CIV-04003-CBK, 2026 WL 936072 (D.S.D. Apr. 7, 2026) (Judge Charles B. Kornmann). Kristy Tripp filed this action contending that Unum Life Insurance Company of America wrongfully denied her claim for ERISA-governed long-term disability benefits. The court ordered the parties to file a joint discovery report. In the report Unum claimed that “this matter is exempt from the initial disclosure under Fed. R. Civ. P. 26(a)(1)(B)(i) and from any discovery, contending that this matter is limited to review of the administrative record before the plan administrator, who is the defendant.” Tripp, on the other hand, contended that discovery was appropriate. Tripp argued that Unum hired an attorney to assist her in obtaining Social Security Disability Insurance (SSDI) benefits, which she argued “would implicate the defendant’s breach of its fiduciary duty to plaintiff in its determination whether she is entitled to disability benefits – such fact may imply a preference for insureds to seek and obtain SSDI in lieu of plan benefits.” The court acknowledged that “[p]roof of such an allegation would not be part of the administrative record.” As a result, the court ruled, “When there are allegations of procedural irregularity in the plan fiduciary’s denial of benefits, district courts may admit ‘supplemental evidence for the limited purpose of determining the proper standard of review.’… Compliance with Rule 26 preliminary disclosures and discovery is appropriate in this case.” The court thus ordered the parties to file a revised joint report.

ERISA Preemption

Ninth Circuit

Aanerud v. Northrop Grumman Corp., No. 2:25-CV-01167-MEMF-PVC, 2026 WL 928619 (C.D. Cal. Mar. 31, 2026) (Judge Maame Ewusi-Mensah Frimpong). Paul B. Aanerud was employed by Northrop Grumman for nearly 40 years, where he contributed to a 401(k) account under the ERISA-governed Northrop Grumman Savings Plan. He created the Aanerud Trust in 1994. In 2002 he married Sandra Overman-Aanerud, and in 2006 he designated the trust as the primary beneficiary of his 401(k) account. Overman-Aanerud executed a spousal consent form allowing this designation. In 2012, Aanerud allegedly submitted an electronic beneficiary designation changing his primary beneficiary to Overman-Aanerud. After Aanerud’s death, his son, Gary Aanerud, claimed that the 2012 designation was fraudulent and that the assets should be distributed to the Trust pursuant to the 2006 designation, but the plan denied his claim. Gary filed suit against the plan and Overman-Aanerud, asserting six causes of action: (1) claim for benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B), (2) constructive fraud, (3) undue influence, (4) negligence, (5) breach of fiduciary duty under 29 U.S.C. §§ 1104, 1132(a)(3), and (6) breach of fiduciary duty under 29 U.S.C. §§ 1104, 1132(a)(3), 1133. Only the second and third claims for constructive fraud and undue influence were asserted against Overman-Aanerud. Overman-Aanerud filed a motion to dismiss, arguing that Gary’s two claims against her were inadequately pleaded and both were preempted by ERISA. The court found that Gary’s constructive fraud claim was subject to Rule 9(b) pleading standards, which require particularity in alleging fraud.  Gary argued for a relaxed standard due to the circumstances being within Overman-Aanerud’s knowledge, and the court agreed, ruling that his allegations were sufficient under that standard.  The court determined that the complaint adequately alleged a confidential relationship and that Overman-Aanerud changed the beneficiary designation without Aanerud’s knowledge, satisfying the elements of constructive fraud. The court also applied Rule 9(b) standards to Gary’s undue influence claim, as it was intertwined with his fraud allegations. This claim was also sufficiently pled because Gary alleged undue influence by detailing Overman-Aanerud’s position of trust and Aanerud’s vulnerability due to age and cognitive impairment. Gary’s luck ran out on preemption, however. The court agreed with Overman-Aanerud that both claims were preempted by ERISA because the claims, “at their core, seek to invalidate the 2012 beneficiary designation determination made by the Administrative Committee.” Gary contended that through these claims he was not directly seeking benefits in the 401(k) account, but “the allegations explicitly assert that the 2012 beneficiary designation is invalid due to Overman-Aanerud’s fraud or undue influence which altered the primary beneficiary against Aanerud’s intentions.” As a result, because “Gary Aanerud appears to seek the invalidation of an ERISA beneficiary designation – the 2012 designation – its state law claims can reasonably be said to directly reference an or connect to an ERISA plan, thereby directly conflicting with 29 U.S.C. § 1132(a).” As a result, the court granted Overman-Aanerud’s motion to dismiss, without leave to amend, because Gary “has failed to identify how he could amend his claims to avoid ERISA preemption.”

Belz v. Wright, No. 25-CV-00517-DKW-RT, 2026 WL 937993 (D. Haw. Apr. 7, 2026) (Judge Derrick K. Watson). In 2018 Monica Belz was hired by Kauai Federal Credit Union (KFCU) as its president and CEO. In 2020 they entered into a Split Dollar Agreement (SDA), a retirement compensation benefit in which KFCU would fund premiums on a life insurance policy owned by Belz. The SDA allowed Belz to borrow against the policy starting in 2030 and 2040, or immediately if her employment was terminated due to disability. In June of 2024, Belz alleged she experienced severe health issues rendering her unable to work, and requested termination due to functional disability. Belz contends that in response KFCU stopped paying her salary and refused to classify her as disabled or pay her benefits, despite medical affirmations of her condition. Belz filed this action in state court, asserting seven state law claims against numerous defendants. The defendants removed the case to federal court and then filed this motion to dismiss, arguing that Belz’s state law claims were preempted by ERISA and inadequately pled. Belz moved to remand the case to state court, asserting that her claims were not governed by ERISA. The court noted that in the Ninth Circuit, “a relatively simple test has emerged to determine whether a plan is covered by ERISA: does the benefit package implicate an ongoing administrative scheme?” Belz argued that the SDA did not meet this test because there “is nothing discretionary about the determination of disability, or the timing, amount or form of the payment” under the SDA. The court disagreed: “The reality is far different. Analyzing the actual provisions of the SDA shows that a significant part of the agreement demands discretionary decisionmaking on the part of KFCU, including provisions which are central to Belz’s claims.” This included the definition of disability, whether there was “good reason” to terminate employment, and the “reasonableness” of the SDA’s annual borrowing cap. As a result, the SDA was an ERISA plan, giving the court jurisdiction over the case and requiring the denial of Belz’s motion to remand. The court then turned to Belz’s individual claims and determined that they were all preempted by the SDA plan because the existence of the SDA was a “critical factor” in each. Belz’s claims explicitly referred to the SDA and alleged she was denied benefits under it, thus enabling ERISA preemption. Belz contended there was an independent basis for her claims – her employment agreement – but the court noted that “[i]n cases involving both ERISA and non-ERISA contracts, the Ninth Circuit has found that where ‘at least some of the contracts at issue…are ERISA plans,’ a plaintiff’s claims may still be completely preempted by ERISA.” As a result, the court found that the SDA was an ERISA plan and that it preempted Belz’s claims. It thus denied her motion to remand and granted defendants’ motion to dismiss. The court gave Belz leave to amend.

Pleading Issues & Procedure

Third Circuit

In Re: Cigna ERISA Litigation, No. 25-CV-2465-JMY, 2026 WL 949101 (E.D. Pa. Apr. 8, 2026) (Judge John Milton Younge). The plaintiffs in this case are current and former employees of Cigna and participants in the Cigna Group 401(k) Plan. They allege that Cigna and various related defendants violated ERISA by investing plan funds into the Cigna Fixed Income Fund, which underperformed compared to other available investment vehicles on the market. Plaintiffs also challenge the plan’s use of forfeitures, contending that forfeitures should have been used to pay the plan’s administrative expenses rather than offset the cost of Cigna’s matching contributions. Defendants filed a motion to stay the proceedings, which the court considered in this order. Defendants argued that in January the Supreme Court granted certiorari to review the Ninth Circuit’s decision last year in Anderson v. Intel Corp. Investment Policy Committee (which we covered in our May 28, 2025 edition), and that the issues in that case were “directly relevant to the resolution of one of the issues asserted by Defendants in their motion to dismiss – that is the question about whether a plaintiff must plausibly plead a ‘meaningful benchmark’ that can be compared to the challenged underperforming investment vehicle to be able to establish an ERISA claim based on a legal theory of fiduciary imprudence.” The court denied defendants’ motion. The court reasoned that a stay would not serve judicial economy or be fair to the plaintiffs: “a stay would unnecessarily delay disposition of this litigation when resolution of issues in Anderson will not dispose of all theories of liability asserted by Plaintiffs…  Entry of a stay would mean staying the progress of Plaintiffs’ allegations regarding Defendants’ allocation of forfeitures, a central factual theory encompassing all seven counts in the Complaint. In contrast, forfeiture related claims are not at issue in Anderson.” The court further found that a stay would be “inappropriate because the impact of the potential decision in Anderson on ERISA litigation is too tentative and uncertain to warrant staying this matter in its current procedural posture.” The court noted that there were “factual distinctions and subtle nuances between this case and Anderson” that “limit the potential impact that Anderson might have on contested matters in this case.” Furthermore, it was impossible to predict “whether the United States Supreme Court will render a dispositive ruling or establish a consistent pleading standard for all ERISA cases,” or when that would even occur. As a result, the court determined that a stay was not warranted, and the case will proceed as usual.

Ninth Circuit

Karim v. International Alliance of Theatrical Stage Employees, No. 2:25-CV-11929-SPG-PD, 2026 WL 930227 (C.D. Cal. Mar. 31, 2026) (Judge Sherilyn Peace Garnett). Audra Karim is a wardrobe, dresser, and sewing professional who has been a member of IATSE Local 768 since 2008. She alleges that in 2024 she filed internal charges against the former secretary-treasurer of Local 768 for commingling of funds, and against two other former board members “for conduct she perceived to be threatening and retaliatory.” She contends that she was mistreated and intimidated during the proceedings, which concluded in a finding that her charges were “specious.” Karim alleges that IATSE then fined her $17,000, which she could not pay within 30 days, and thus she was suspended from the union. She has subsequently been threatened with expulsion; her appeal is apparently pending. In this pro se action she has alleged twelve causes of action against IATSE, Local 768, and various individuals, including, for our purposes, “failure to remit required contributions to benefit plans under ERISA[.]” Three motions were before the court in this order: Karim’s motion for a temporary restraining order (TRO), IATSE defendants’ motion to dismiss, and Local 768 defendants’ motion to dismiss or to join the IATSE motion. The court denied the Local 768 motion to dismiss under Rule 12(b)(5), finding that Karim’s service was sufficient under Federal Rule of Civil Procedure 4. As for the merits of the parties’ arguments, the court granted in part and denied in part the IATSE motion to dismiss on various grounds. It also denied Karim’s TRO motion because she did not demonstrate irreparable harm, as her alleged harms were compensable by monetary damages or not imminent. As for Karim’s ERISA claim in particular, defendants contended that Karim did not specify which defendants she was targeting, and furthermore she did not plead that they were fiduciaries or how they breached any fiduciary duty. The court agreed, ruling that “Plaintiff does not identify any relevant ERISA plan and alleges no facts suggesting that any of the named Defendants have the discretionary authority required for such a designation. Moreover, as Defendants argue, the [complaint] is not entirely clear which Defendants are alleged to violate which ERISA provisions.” The court further ruled that “Plaintiff’s references to §§ 1104, 1106, and 1132 each raise different claims, with different elements that need to be separately alleged.” Regarding Karim’s claim for benefits under § 1132(a)(1)(B), the court ruled that her complaint was “devoid of any allegations identifying the provisions of any applicable ERISA plan and demonstrating how Defendants’ actions violated those provisions.” As a result, Karim’s ERISA claim was dismissed, although the court gave her leave to amend.

Provider Claims

Fifth Circuit

ER Addison, LLC v. Aetna Health, Inc., No. 3:25-CV-2861-D, 2026 WL 948511 (N.D. Tex. Apr. 8, 2026) (Judge Sidney A. Fitzwater). Four free-standing emergency centers in Texas (“ER”) brought this action against Aetna Health Inc. and its affiliates alleging that Aetna underpaid them for emergency healthcare services they provided on an out-of-network basis to Aetna’s insureds. In a prior lawsuit, ER sued Aetna under ERISA and Texas law, but the court dismissed the suit, ruling that ER lacked standing to assert the ERISA claims of Aetna’s insureds, and declining to hear ER’s supplemental state law claims. (Your ERISA Watch covered this ruling in our July 16, 2025 edition.) Subsequently, ER re-filed their claims in state court, claiming that the Fifth Circuit’s 2025 decision in Angelina Emergency Medicine Associates PA v. Blue Cross & Blue Shield of Alabama constituted a “change in intervening law,” giving them a second chance. (We covered Angelina in our October 29, 2025 issue.) Aetna removed the case to federal court and filed a motion to dismiss, which was decided in this order by the same judge as in the first case. The court granted Aetna’s motion to dismiss in part and denied it in part. The court dismissed the negligent misrepresentation claim, agreeing with Aetna that ER failed to plausibly allege reliance or harm, as the alleged misrepresentations occurred after ER submitted claims to Aetna. The court also dismissed ER’s unjust enrichment claim, finding it duplicative of ER’s state-law contract claim. (Under Texas law, “quasi-contractual claims are unavailable when a valid, express contract governing the subject matter of the dispute exists.”) The court declined to dismiss ER’s breach of contract claim for pre-2020 services, ruling that the Texas Emergency Care Statutes (which create a mandatory binding arbitration process) did not apply to services rendered before January 1, 2020. The court further found that ER’s allegations focused on Aetna’s payment obligations under its own plans, and not on violations of the statute. However, the court dismissed ER’s breach of contract claim for services provided after January 1, 2020 due to lack of standing. The court found that Aetna’s insureds did not suffer a concrete injury because the Texas Emergency Care Statutes (like the No Surprises Act (NSA)) shielded them from liability for out-of-network coverage costs, and thus ER had no derivative standing to sue. As for ER’s ERISA claim, the court denied Aetna’s motion to dismiss this claim for lack of standing under the NSA because that law took effect on January 1, 2022, and ER agreed to dismiss all claims involving treatment after that date. The court also found that ER’s allegations regarding underpayment were plausible and that it was not required to exhaust administrative remedies because doing so would have been futile. The court further found that ERISA completely preempted ER’s state-law breach of contract claim “to the extent that this claim is based on the denial of benefits under an ERISA-regulated benefit plan[.]” Finally, the court denied Aetna’s motion to dismiss claims for Texas Teachers Retirement System plan benefits on sovereign immunity grounds, as Aetna did not meet its burden to prove it was an arm of the state. Thus, in sum, the court dismissed ER’s claims for negligent misrepresentation, unjust enrichment, and breach of contract for post-2019 services, while allowing other claims to proceed.