You will no doubt be relieved to learn that this week, unlike the last two weeks, we are not featuring a case of the week about actuarial calculations. In fact, it was a relatively light week in the federal courts for ERISA cases, with no decision standing out as meriting individual attention.

Still, there was plenty of action. Read on to learn about (1) two preliminary approvals of class action settlements – one arising from allegedly illegal tobacco surcharges in welfare plans (Bailey v. Sedgwick), and one arising from the alleged misuse of retirement plan forfeitures (Halter v. Providence); (2) a denial of a motion to decertify a class in a ten-year-old case, with trial scheduled for next month (Schuman v. Microchip); (3) the latest battle in the war between Envision Healthcare and United Healthcare (Envision v. United Healthcare); (4) an appellate court reversal finding that Cigna erred in denying a claim for artificial disc replacement surgery (Roggenkamp v. Morgan Stanley); and (5) three more cases concluding that the independent dispute resolution process established by the No Surprises Act does not give providers a private right of action in federal court (SpecialtyCare Inc. v. HCSC (IL, NM, TX)).

We’ll be back next week!

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

Class Actions

Sixth Circuit

Bailey v. Sedgwick Claims Mgmt. Servs., Inc., No. 2:24-CV-02749-TLP-TMP, 2026 WL 1649991 (W.D. Tenn. June 8, 2026) (Judge Thomas L. Parker). Plaintiff Korine Bailey filed this class action against Sedgwick Claims Management Services, Inc., alleging that the tobacco surcharge in Sedgwick’s welfare benefits plan violated ERISA’s anti-discrimination provisions, fiduciary duty provisions, and prohibited transaction provisions. Bailey further contended that Sedgwick impermissibly imposed higher premiums for life insurance benefits based on tobacco use, which violated ERISA’s anti-discrimination provisions. In September of 2025 the court allowed the case to proceed past the pleading stage, and the parties subsequently reached a settlement. Bailey filed an unopposed motion for preliminary approval of the settlement agreement, which the court granted in this brief order. The court confirmed it had jurisdiction over the matter and preliminarily found that the settlement class met the requirements of Federal Rule of Civil Procedure 23(a) because the class was ascertainable, with common questions of fact or law, and the claims of Bailey, who would adequately protect the interests of the class, were typical of the class. The court also found that the settlement class met the requirements of Federal Rule of Civil Procedure 23(b)(1), certifying a non-opt-out class which was defined to include plan participants or beneficiaries who paid a tobacco or nicotine surcharge without full reimbursement during the specified period. The court approved the terms of the settlement, finding that “(a) the proposed Settlement resulted from arm’s-length negotiations; (b) the Agreement was executed only after Class Counsel had researched and investigated multiple legal and factual issues pertaining to Plaintiff’s claims; (c) there is a genuine controversy between the Parties involving Defendant’s compliance with the requirements of ERISA; (d) the Settlement appears on its face to be fair, reasonable, and adequate; and (e) the Settlement is sufficiently fair, reasonable, and adequate to warrant sending notice to the Settlement Class.” The court further found the proposed plan of allocation to be “fair, reasonable, and adequate.” (The details were not set forth in the order, but the total settlement is $3 million). The court also approved the form and content of the settlement notice and outlined the process for class members to object to the settlement. The final approval hearing was scheduled for October 9, 2026.

Ninth Circuit

Halter v. Providence Health & Servs., No. 2:25-CV-00210-JNW, 2026 WL 1601689 (W.D. Wash. June 4, 2026) (Judge Jamal N. Whitehead). This is a class action in which participants of the Providence Health & Services 401(k) Savings Plan contend that Providence Health & Services and the Providence Health & Services Total Rewards Management Committee breached their fiduciary duties under ERISA by mismanaging the plan. Specifically, plaintiffs contended that defendants used forfeited employer contributions to reduce Providence’s contributions to the plan instead of using them to pay plan expenses in accordance with plan documents. In this brief order the court granted plaintiffs’ unopposed motion for preliminary approval of a class action settlement. The court found that the settlement was reached after plaintiffs received sufficient information from defendants to ensure that plaintiffs were informed and had a thorough understanding of the case, followed by arm’s-length negotiations overseen by a neutral mediator. The court emphasized that if the settlement had not been achieved, the class “faced the expense, risk, and uncertainty of protracted litigation,” and that the settlement amount – which was not mentioned in the order but apparently totals $42,724,532 – was “fair, reasonable, and adequate, taking into account the costs, risks, and delay of litigation, trial, and appeal.” The method of distributing the settlement funds was deemed efficient, as it relied on existing records and required no filing of claims. The court also preliminarily certified the class, finding that the class was sufficiently numerous that joinder of all members was impracticable, there were common issues of law and/or fact, the claims of the class representative were typical of the claims of the class, the class representative would fairly and adequately protect the interests of the class, and the prosecution of separate actions by individual members of the class would create a risk of inconsistent or varying adjudications. The court set a fairness hearing for October 20, 2026, to determine whether to grant final approval of the settlement and to address any motions for attorneys’ fees, costs, and service awards. Additionally, the court approved Analytics Consulting LLC as the settlement administrator to manage the settlement process.

Schuman v. Microchip Technology Inc., No. 16-CV-05544-HSG, 2026 WL 1603305 (N.D. Cal. June 4, 2026); Schuman v. Microchip Technology Inc., No. 16-CV-05544-HSG, 2026 WL 1613729 (N.D. Cal. June 4, 2026) (Judge Haywood S. Gilliam, Jr.). These are the latest two orders in a ten-year-old class action against Microchip Technology Inc., Atmel Corporation, and the ERISA-governed Atmel Corporation U.S. Severance Guarantee Benefit Program in which plaintiffs contend that that they were entitled to benefits from the plan when Atmel was acquired by Microchip. The plan was set to terminate on November 1, 2015, unless an “Initial Triggering Event” occurred, which would extend the plan for 18 months. An agreement with Dialog Semiconductor in September 2015 was considered an Initial Triggering Event, but the merger with Dialog did not close because Microchip made a better offer, which led to an Atmel-Microchip merger in April 2016. The central dispute in the case is whether the Initial Triggering Event with Dialog extended the plan if Atmel never closed its merger deal with Dialog. Plaintiffs alleged that Atmel executives assured employees that the plan remained in place, but after the merger, Microchip’s CEO stated that the plan had expired and offered reduced severance benefits if employees signed a release. Most plaintiffs signed the release in exchange for partial benefits. The district court originally certified the class, but on summary judgment it agreed with defendants that the named plaintiffs (Peter Schuman and William Coplin) were precluded by the releases from suing and representing others who had signed releases. (Your ERISA Watch covered this ruling in our August 30, 2023 edition.) Plaintiffs appealed, and in June of 2025 the Ninth Circuit reversed, announcing a new nine-factor test for determining when releases of rights under ERISA should be enforced. (This decision was the case of the week in our June 11, 2025 edition.) On remand, defendants filed a motion to decertify the class, which the district court evaluated in the first order listed above. The court found that the requirements of Federal Rule of Civil Procedure 23(a) were still met, including numerosity, commonality, typicality, and adequacy of representation. Numerosity and adequacy were not disputed. On commonality, the court emphasized that common questions, such as whether Microchip violated its fiduciary duty by claiming the plan had expired, remained central to the case and could “generate common answers” for the class. The court rejected defendants’ argument that “the validity of the releases is a threshold, individual question that will ‘swamp[]’ any common question,” noting that the Ninth Circuit’s decision highlighted the importance of considering alleged improper conduct by the fiduciary in obtaining the releases. For similar reasons, the court also found typicality, noting that it had already rejected defendants’ similar arguments at the class certification stage, “and the Ninth Circuit’s recent decision simply underscores that the Court must consider a fiduciary’s alleged improper conduct when considering whether a waiver is knowing and voluntary.” The court also found Rule 23(b)(2) satisfied because the primary relief sought was injunctive, and the court had broad authority to invalidate claims releases that were not knowing and voluntary or violated public policy. The court disagreed with defendants’ assertion that the injunctive relief sought was merely a disguised request for monetary relief: “That an injunction may ultimately clear the way for the class to receive a monetary payment does not render the injunction a nullity or somehow transform Plaintiffs’ requested injunctive relief into one for monetary damages.” As for Rule 23(b)(3), the court found that common issues predominated over individual ones, particularly the central issue of whether defendants engaged in improper conduct in obtaining the releases. The court rejected defendants’ “attempt to leverage the tension in the Court’s prior class certification order and order granting summary judgment,” noting that the court did not have the benefit of the Ninth Circuit’s test on summary judgment, and thus “did not consider the class-wide communications allegedly misrepresenting the terms of the Plan as part of its evaluation of whether the releases were entered into knowingly and voluntarily.” The court also minimized defendants’ argument that individualized inquiries would need to be made as to the enforceability of each release, stating that “[t]he heart of Plaintiffs’ case is – and has always been – whether Defendants mischaracterized the Atmel Plan and thus misled employees about their rights under the Plan.” This central issue of “fiduciary misconduct could predominate over the other factors.” Finally, the court found that class treatment was superior to other methods of adjudicating the controversy, as “it would be spectacularly inefficient to have over 200 trials here when the most critical facts that the Ninth Circuit has indicated ‘warrant serious consideration’ and ‘may weigh particularly heavily’…overlap as to all of the class members.” As a result, defendants’ motion to decertify the class was denied. In the court’s second order, it considered defendants’ motion to amend the scheduling order to reopen discovery. Defendants contended that discovery was necessary because the Ninth Circuit’s opinion “transforms the nature of this case.” However, “As the Court already explained in denying the motion for decertification, the Court disagrees that the opinion has such sweeping implications.” The court noted that trial was set to begin on July 13, less than six weeks from the ruling, and thus “the breadth and burdensome nature of the discovery now sought by Defendants ensures that it could not possibly be completed or digested before trial.” Furthermore, the court “has some concern that Defendants’ request is a strategic choice to further delay this decade-old case.” The court noted that defendants could have sought their proposed discovery earlier but chose not to do so. Moreover, “even after the case was reopened following the Ninth Circuit appeal, Defendants still waited six months to file this motion… Defendants offer no real explanation for this delay.” As a result, the court ruled that defendants had not shown good cause to reopen discovery and denied their motion. However, the court left open the possibility of revisiting the issue if necessary, after “the common factual record regarding Defendants’ conduct in interpreting the Atmel Plan and communicating with class members” has been developed.

ERISA Preemption

Sixth Circuit

Envision Healthcare Operating, Inc. v. United Healthcare Servs., Inc., No. 3:22-CV-00693, 2026 WL 1623108 (M.D. Tenn. June 4, 2026) (Judge Eli Richardson). This case is part of a long-running dispute between plaintiff Envision Healthcare Operating, Inc., a provider of emergency medical services, and defendants United Healthcare Services, Inc. and United Healthcare Insurance Company. (In 2023 Envision obtained a $91 million arbitration award against UnitedHealthcare.) Envision alleges that after its network agreements with defendants expired in 2020, defendants denied or reduce payments for services Envision provided to defendants’ insureds. Envision contends that this was done fraudulently and was “part of a coercive campaign to force Envision to accept unfavorable contract terms and to suppress Plaintiff’s business in favor of Defendants’ subsidiary, Optum, Inc. (‘Optum’), a non-party in this case.” As part of their scheme, defendants allegedly “implemented several specific strategies to achieve their goals, including pre-payment review practices, claim denials and adjustments, and extended delays in claim processing.” Envision’s complaint contained eight counts: two under the Racketeer Influenced and Corrupt Organizations Act (RICO), one under a Tennessee Prompt Pay statute, and several state-law causes of action including fraud, civil conspiracy, unjust enrichment, breach of implied-in-fact contract, and quantum meruit. Defendants filed a motion to dismiss for failure to state a claim. Because this is Your ERISA Watch, we will start at the end of the order and discuss the court’s ruling on defendants’ argument that all of Envision’s state law claims were preempted by ERISA. Crucially, the court noted that defendants conceded that preemption only applied “[t]o the extent [that] these claims are based on an assignment of benefits by an individual covered under an ERISA-governed plan.” The court explained that complete preemption was “inapplicable here because the propriety of removal has never been at issue in this case (which was originally filed in this Court), and Defendants have made no challenge to subject-matter jurisdiction.” Thus, the only question was whether express preemption applied to Envision’s state law claims. The court agreed with Envision that “none of its claims are based at all on an assignment of benefits by an individual covered under an ERISA-governed plan, and that therefore Defendants’ argument for preemption… is simply inapplicable.” As for the merits of Envision’s claims, the court (1) dismissed the RICO claims, finding that Envision failed to adequately plead the existence of a distinct RICO enterprise; (2) dismissed the fraud claim for failing to allege specific details regarding the alleged misrepresentations, such as the speaker, time, place, and reliance; (3) dismissed the Prompt Pay claim, ruling that the statute does not provide a private right of action for healthcare providers; (4) dismissed the civil conspiracy claim, noting that it is not a standalone cause of action but a theory to extend tort liability; (5) dismissed the unjust enrichment and quantum meruit claims because Envision did not adequately allege that defendants received a benefit from the services provided; and (6) allowed the breach of implied-in-fact contract claim to proceed, finding that the complaint contained sufficient factual matter to plausibly suggest the existence of an implied contract. As a result, only Envision’s implied contract claim passed muster; the court granted defendants’ motion to dismiss the remaining claims.

Ninth Circuit

Providence Mission Hosp. v. UFCW Unions & Food Employers Benefit Fund, No. 8:26-CV-00495-DOC-ADS, 2026 WL 1603910 (C.D. Cal. June 3, 2026) (Judge David O. Carter). The plaintiffs in this case are four related medical facilities which allege that they have a written healthcare services contract with Anthem Blue Cross which requires them to provide medical services to enrollees of Anthem and other payors, such as defendant UFCW Unions and Food Employers Benefit Fund, in exchange for reimbursement at rates specified in the contract. Although the fund is not a signatory to the contract, it is part of the Anthem network. Plaintiffs provided medical services to the fund’s participants and allege that they were not fully reimbursed by the fund for those services, resulting in an outstanding balance of $538,111.31. Plaintiffs filed this action in California state court asserting state law claims of breach of implied contract and quantum meruit. The fund removed the case to federal court, asserting ERISA preemption, and plaintiffs responded by filing a motion to remand, arguing that their claims were not preempted and arose independently from their contract with Anthem. The court applied the Supreme Court’s two-prong test from Aetna Health Inc. v. Davila to determine who should prevail. Under the first prong, the court found that plaintiffs could not have brought their claims under ERISA § 502(a)(1)(B) because the claims did not seek to recover benefits owed under an ERISA plan. Instead, the claims were based on an implied contract with the fund, independent of any ERISA plan. The fund contended that plaintiffs could bring suit as assignees of the plan participants, but the court was unimpressed with this hypothetical claim: “[T]he matter of assignment is irrelevant here since Plaintiffs’ claims to recover further payment from Defendant arise under Plaintiffs’ separate rate agreement contract with Anthem (which Defendant is contracted with).” The court also found that the second prong of the Davila test was not met because “the obligations arising from Defendant’s contract with Anthem Blue Cross would have existed regardless of the existence of the patients’ ERISA plans and arise from an independent legal duty.” The court ruled that “the claims brought by Plaintiffs…rely on an implied contract between a provider (themselves) and insurer (Defendant) and flow from this legal relationship rather than an ERISA plan… Therefore, their claims are based on legal duties independent of ERISA and the second prong of the Davila test is also not satisfied.” Because neither prong was satisfied, the court concluded that plaintiffs’ claims were not preempted by ERISA. The court thus determined that it lacked subject matter jurisdiction and granted plaintiffs’ motion to remand the case back to state court.

Medical Benefit Claims

Ninth Circuit

Roggenkamp v. Morgan Stanley Med. Plan, No. 24-7864, __ F. App’x __, 2026 WL 1625357 (9th Cir. June 5, 2026) (Before Circuit Judges Lee, Bumatay, and Sung). Marc Roggenkamp brought this action against the Morgan Stanley Medical Plan to recover ERISA-governed medical benefits. Cigna, the administrator of the plan, denied Roggenkamp’s pre-authorization request for a two-level artificial disc replacement (ADR) surgery. Cigna’s denial was based on its internal guidance, Medical Coverage Policy No. 0104 (MCP), which “categorically excludes two-level ADR as ‘experimental.’” The district court ruled in the plan’s favor, and Roggenkamp appealed to the Ninth Circuit. First, the appellate court affirmed the district court’s conclusion that Cigna did not operate under a conflict of interest. The parties agreed that the plan granted discretionary authority to Cigna, but “Roggenkamp has provided no evidence of a financial conflict, as he cannot show that Cigna both determines eligibility and pays for benefits.” Furthermore, the court found no conflict in Roggenkamp’s “allegations that Cigna delayed during the administrative and legal process, repeated the same conclusory language in its denial letters, and interrupted Roggenkamp’s physician in a peer-to-peer phone call[.]” The court rejected the idea that Cigna’s actions were attributable to the plan, noting its conclusion in Salyers v. Metropolitan Life Ins. Co. that “[o]ur holding in this case does not mean that a policy-holder employer is always an agent of the insurer in every aspect of plan administration in which it participates.” However, the court agreed with Roggenkamp that the district court erred in upholding the denial of his claim. ERISA regulations require a notice of claim denial to contain specific reasons and references to plan provisions, but Cigna’s denial letters cited only the MCP, not the governing summary plan description (SPD), which “does not categorically exclude two-level ADR.” The district court’s reliance on the SPD’s definition of “experimental, investigational or unproven” services was a “‘post-hoc rationalization[] that [was] not presented to the claimant…during the administrative process,’ and thus, an improper basis for affirming the denial of benefits.” Cigna only relied on the MCP, and thus “the district court could not construe Cigna’s denial as impliedly relying on the SPD because the plan administrator must ‘specific[ally] reference [] the plan provisions that form the basis of the denial,’ and the MCP and SPD are meaningfully different.” Finally, the court ruled that the district court erred in concluding that Cigna did not abuse its discretion in denying Roggenkamp’s claim. The court agreed with Roggenkamp that he did not receive a “full and fair review” as required by ERISA because Cigna’s denial letters did not reference the SPD’s definition of “experimental, investigational or unproven” services or explain how two-level ADR qualified under that definition. “Thus, Cigna did not ‘interpret’ the SPD at all, much less interpret it reasonably.” Furthermore, the court ruled that “Cigna abused its discretion by failing to meaningfully address the information Roggenkamp provided in his appeals.” As a result, “we reverse and remand with directions to remand to Cigna for reevaluation of the merits of Roggenkamp’s claim under the SPD definition, not the MCP definition.”

Pleading Issues & Procedure

Fourth Circuit

Vickers v. Cigna, No. 25-CV-17425 (MEF)(LDW), 2026 WL 1590595 (D.N.J. June 1, 2026) (Judge Michael E. Farbiarz). Stanley Vickers was enrolled in the multi-employer MILA National Health Plan, which is self-funded by the MILA Managed Case Health Care Trust Fund. Vickers’ specific benefits were administered by Cigna. Vickers brought this action against multiple Cigna entities, which responded by filing a motion to dismiss, contending that they are not proper parties to the action. In support of their argument they provided a declaration and a copy of the benefit plan. However, the court ruled that “from the get-go, there is a threshold problem with the Defendants’ argument – it relies on materials that are outside of the pleadings… The complaint here does not mention MILA. Let alone its funding structure. Or its relationship with any of the Defendants. Indeed, for their factual account of all of this (MILA, etc.), the Defendants rely on a declaration… But the declaration is an outside-of-the-pleadings item. It is plainly out of bounds for now. It cannot be considered here, at the motion-to-dismiss stage.” Defendants argued that the court could at least consider the plan because it was integral to Vickers’ allegations, but the court stated that “the fact that a plan document can be considered does not mean that this plan document can be considered. And without the Defendants’ outside-of-the-pleadings assertions as to MILA, there is no way to know whether the operative ERISA plan here is the MILA plan document or some other plan document.” The court thus determined that it could not rule on defendants’ motion as presented, and instead converted it into a motion for summary judgment. The court also ruled that “the parties will be permitted to now conduct rapid and highly targeted discovery, as to: MILA; MILA’s relationship to the Plaintiff; MILA’s relationship to the Defendants; and any closely related subject, all in the discretion of the United States Magistrate Judge.” The court stated that it would revisit defendants’ proper-party arguments after the completion of this discovery. The court also allowed Vickers to amend his complaint to add claims against two MILA defendants.

Provider Claims

Seventh Circuit

SpecialtyCare Inc. v. Health Care Serv. Corp. d/b/a Blue Cross Blue Shield of Illinois, No. 25 CV 12935, 2026 WL 1556442 (N.D. Ill. June 2, 2026); SpecialtyCare Inc. v. Health Care Serv. Corp. d/b/a Blue Cross Blue Shield of New Mexico, No. 25 CV 12902, 2026 WL 1556244 (N.D. Ill. June 2, 2026); SpecialtyCare Inc. v. Health Care Serv. Corp. d/b/a Blue Cross Blue Shield of Texas, No. 25 CV 12945, 2026 WL 1556346 (N.D. Ill. June 2, 2026) (Judge Manish S. Shah). These three cases were brought by medical providers SpecialtyCare Inc., Remote Neuromonitoring Physicians, and Sentient Physicians against three different Blue Cross Blue Shield entities. Plaintiffs contend that they treated certain patients who assigned their entitlement to ERISA-governed benefits to plaintiffs, but those benefits were underpaid by defendants. The parties engaged in the independent dispute resolution (IDR) process established by the No Surprises Act, 42 U.S.C. § 300gg-111 et seq., in which plaintiffs prevailed. However, they allege that all three defendants failed to comply with the IDR award (which involved paying $274,434 (BCBS Illinois), $42,312 (BCBS New Mexico), and $1,864,562 (BCBS Texas)). Plaintiffs thus brought this action; defendants responded by moving to dismiss for lack of subject-matter jurisdiction and failure to state a claim. Addressing plaintiffs’ ERISA claims first, the court agreed that plaintiffs, as assignees of plan participants, were considered “beneficiaries” under the statute. However, “plaintiffs do not allege that payment was denied, rather, they allege that they were underpaid for their services… There is a difference between a claim that implicates the rate of payment, and one that implicates the right to payment.” The court ruled that “[t]he ‘right to payment’ falls within ERISA’s ‘zone of interests’ because an outright denial of payment is a denial of benefits, but the ‘rate of payment’ does not, because the rate depends on terms outside the plans themselves (here, the [IDR] process).” The patients were not and could not have been parties to the IDR process, so there was no assigned right the providers could assert as an ERISA plan beneficiary: “While the ultimate effect on [plaintiffs] may be the same (i.e., nonpayment), [plaintiffs’] grievance with Blue Cross is uniquely its own; it is not derivative of [plaintiffs’] patients.” Turning to plaintiffs’ claims under the Federal Arbitration Act (FAA), the court dismissed them, reasoning that the FAA requires an arbitration agreement between the parties, which was absent in this case. The IDR process was statutory, not contractual, and thus Section 9 of the FAA did not apply. Furthermore, the No Surprises Act did not incorporate Section 9. The court also found no implied private right of action under the No Surprises Act. It noted that private rights of action must be created by Congress, and there was no express right of action detailed in the Act. The Act’s enforcement mechanism, which allows the Department of Health and Human Services to assess penalties against non-compliant insurers, suggested that Congress did not intend to create a private remedy for providers. Finally, the court dismissed plaintiffs’ state law claims without prejudice, declining to exercise supplemental jurisdiction because “there are no federal claims remaining and there is no complete diversity between the parties.” Defendants’ motions were thus granted and all three cases were terminated.

Remedies

Seventh Circuit

Appvion, Inc. Retirement Savings & Employee Stock Ownership Plan v. State St. Bank & Trust Co., No. 18-C-1861, 2026 WL 1623068 (E.D. Wis. June 5, 2026) (Judge William C. Griesbach). Appvion, Inc. was a Wisconsin-based paper company that established an employee stock ownership plan (ESOP) in 2001, fell on hard times, and went bankrupt in 2017. The bankruptcy court appointed Grant Lyon to act on behalf of the plan and help the ESOP participants recover some of their losses. As a result, he brought this wide-ranging action in which the ESOP asserted 37 causes of action against seven entities and 19 individuals. The claims included breach of fiduciary duty under 29 U.S.C. § 1104, co-fiduciary liability under 29 U.S.C. § 1105, and prohibited transactions under 29 U.S.C. § 1106. (For more details, check out our summary of the Seventh Circuit’s 2024 opinion, which revived the case after most of it was dismissed by the district court.) Lyon eventually settled with former Appvion directors and officers, and also settled a related state law case against one of Appvion’s pre-bankruptcy accounting firms. As a result, Lyon has at this point obtained almost $16 million in settlement proceeds. He has already distributed $10 million of these proceeds to himself, his lawyers, and his expert witnesses, and intends to distribute the remaining $6 million to ESOP participants. Before the court here was a motion by defendants State Street Bank & Trust Company and Argent Trust Company “to Establish Due Process and Fairness Protections Related to Settlement Funds.” These defendants wanted the court to enter an order “either (1) directing Lyon to submit to the court a detailed procedure to protect the due process interests of the ESOP and its participants or (2) establishing a constructive trust with terms acceptable to the court over the settlement proceeds pending final judgment or other resolution of the case.” In the event this request is denied, defendants requested in the alternative that “disbursement be preceded by procedural safeguards of due process and fairness, such as giving notice to ESOP participants and other stakeholders of the settlement terms and proposed allocation of the settlement proceeds, an opportunity for ESOP participants or other stakeholders to file objections to the planned allocation of settlement proceeds, and a fairness hearing before the court.” At the outset, the court partially granted related motions from both sides to restrict public access to certain documents. The court concluded that “the public does not have to know which parties settled and how much was paid by them or on their behalf. It is enough that the total amount of the settlement proceeds and how it is to be disbursed are disclosed.” As for defendants’ “due process” motion, the court denied it. The court reasoned that no statute or rule required or allowed it to impose such protections, as this was not a class action or derivative claim, and Federal Rules of Civil Procedure 23 and 23.1 did not apply. Additionally, the court found that Lyon’s and his counsel’s fees were consistent with the bankruptcy court’s confirmation order and similar contingency fees approved in other cases. The court emphasized that Lyon, as a fiduciary, had an exclusive duty of loyalty to act solely in the interest of the ESOP beneficiaries, and participants had remedies against him if he failed to do so, “[b]ut that would be a separate case.” The court further noted that “neither State Street nor Argent have been found liable in this case. Should they be found liable at trial and seek an offset against any damages or attorneys’ fees they are ordered to pay for any amounts already paid by settling co-defendants, they are free to raise the issue at that time.” With that, the court denied defendants’ motion.

Ninth Circuit

Brian W. v. Premera Blue Cross of Wash., No. C24-0154-KKE, 2026 WL 1552524 (W.D. Wash. June 2, 2026) (Judge Kymberly K. Evanson). Brian W. brought this action arising from residential mental health treatment his son, A.W., received at two facilities: Cherry Gulch and Heritage School. Brian W. paid for A.W.’s treatment out of pocket and then submitted claims under his ERISA-governed health benefit plan. However, the plan’s administrator, Premera Blue Cross of Washington, denied his claims. Brian W. then brought this action and prevailed in March of this year on cross-motions for judgment. (Your ERISA Watch covered this decision in our March 18, 2026 edition.) In this order the court addressed several post-judgment issues. First, Brian W. argued he was entitled to reimbursement for the Heritage School charges at the higher in-network rate (90%) under a plan provision allowing in-network reimbursement for out-of-network care when a covered service is “not available from an in-network provider.” The court disagreed, noting that that the plan stated that “[i]f a covered service is not available from an in-network provider…you must request this before you get the care.” Brian W. did not do so and thus he was only entitled to “the out-of-network rate: 50% of billed costs after any annual deductibles.” Next, the court addressed Premera’s motion to seal its list of in-network residential treatment providers, which it submitted in support of its argument that in-network alternatives were available to A.W. Because the court had just ruled that the out-of-network rate applied, the court denied Premera’s motion as moot and struck the list from the docket. The court then moved on to Brian W.’s motion to strike documents offered by Premera suggesting that it had made partial payments on some of A.W.’s claims. He contended that Premera did not disclose these documents during litigation, and furthermore, these documents would have undermined Premera’s earlier position that the claims were not payable at all. The court acknowledged that “Brian W.’s point is well taken,” but noted that Premera had not requested any offsets for prior payments in its proposed judgment and thus denied Brian W.’s motion as moot. Finally, the judge addressed the appropriate prejudgment interest rate. The court stated that under Ninth Circuit precedent, the default prejudgment interest rate in ERISA cases is “the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding,” pursuant to 28 U.S.C. § 1961, and “substantial evidence” is required to deviate from this rate, which the parties agreed was 3.66%. The parties originally agreed on this rate but Brian W. changed course and argued for Washington’s 12% statutory interest rate instead, submitting a declaration stating he had made “early withdrawals from [his] retirement and brokerage accounts” to fund treatment, and that his “investments have generally tracked the S&P 500 index,” which since 2016 “has averaged approximately 11.3%” according to a “very basic web search[.]” This was not good enough for the court, which found that his “generic statement” “does not specify how much he withdrew from his retirement or brokerage accounts; nor does he present evidence supporting the rates of return for either account.” As a result, the court ruled that 3.66% was the appropriate interest rate. As for the accrual date, the parties had originally agreed to a “‘midpoint accrual approach’ based on the midpoint of the relevant period when Brian W. was paying for A.W.’s care.” However, this time it was Premera which changed its mind; it argued interest should only begin accruing from the dates it actually received Brian W.’s claims. The court rejected this proposal because it was “unworkable and unfair in this case.” Premera’s administrative failures, which included losing submissions, forcing resubmission, and making contradictory determinations about when claims were received, made it impractical to reliably identify submission dates. Furthermore, the court reasoned that “the purpose of prejudgment interest in the ERISA context…is to fully compensate the plaintiff for ‘losses incurred as a result of [the defendant’s] nonpayment of benefits,’” and thus it was disinclined to reward Premera for its deficient claim administration. The court thus adopted the originally agreed-upon midpoint date. The parties were ordered to submit a proposed judgment conforming with this ruling.

Venue

Ninth Circuit

Ventura v. Lithia Motors, Inc., No. 2:26-CV-01786-HDV-RAO, 2026 WL 1625362 (C.D. Cal. June 2, 2026) (Judge Hernán D. Vera). David Ventura is a California resident who was employed at the California automobile dealership Lexus of Valencia, which was owned by Lithia Motors, Inc., from May 2023 to May 2025. Lithia Motors is headquartered in Medford, Oregon, and operates more than 450 dealerships, including several in California. While employed by Lithia, Ventura participated in the company’s ERISA-governed 401(k) plan, which is administered by a committee of seven senior Lithia employees, four of whom are based in Oregon. The committee meets quarterly at Lithia’s headquarters in Oregon where it receives investment advice from Deschutes Investment Consulting, LLC, which is also based in Oregon. Ventura contends in this action that Lithia breached its fiduciary duties under ERISA by, “among other things, using forfeited Plan assets to offset employer contributions rather than to reduce administrative fees, charging excessive administrative fees, and offering imprudent collective investment trust options… He seeks relief on behalf of a putative nationwide class of Plan participants.” Lithia filed a motion to transfer venue from the Central District of California to the District of Oregon pursuant to 28 U.S.C. § 1404(a). The court conducted a two-step process, determining first if the action could have been brought in the transferee district, and second, whether convenience, fairness, and justice considerations militated in favor of transfer. The court agreed that the action could have been brought in Oregon because Lithia is headquartered there and the plan was administered there. However, venue was also proper in California because “the breach occurs where the Plan participant expects to receive benefits.” The court then addressed plaintiff’s choice of forum, which the court found was “entitled to reduced – but not minimal – deference” because he was bringing a nationwide class action in which he “purports to represent class members located across multiple districts.” As for the convenience of witnesses, Lithia argued that most of the key witnesses were in Oregon, but the court found this factor “insufficient to tip the balance decisively toward transfer” because Lithia identified only one non-party witness, Deschutes, and did not provide evidence that witnesses from Deschutes were unwilling to testify in California. The court highlighted “the modern litigation environment where remote and video testimony are widely available and accepted.” The court also stated that Lithia’s witnesses in Oregon could be compelled to testify due to their employment relationship with Lithia, and that “Ventura and his California-based witnesses, including his former supervisors, are relevant to establishing the circumstances of his Plan participation and the claims as they relate to California-based employees.” As a result, “the witness convenience factor is, at best, neutral.” Finally, the court considered the interests of justice, noting that Lithia did not establish that litigation costs would be significantly cheaper in Oregon or that the Central District of California’s caseloads, even if higher than Oregon’s, would impede efficient case management. “In sum, transfer under § 1404(a) is not designed to shift inconvenience from one party to the other. Lithia has not demonstrated that Ventura’s choice of forum and California’s connections to the case are outweighed substantially by the convenience of adjudicating this case in Oregon.” Defendants’ motion to transfer venue was thus denied.