Your ERISA Watch was short-handed this week, so while we have the full complement of case summaries, we are forgoing our highlighted case of the week.

If you want a cheat sheet, the two most notable decisions (in your editor’s humble opinion) were (1) Central States v. McClain, in which the Seventh Circuit held that Arkansas’ latest attempts to regulate pharmacy benefit managers survived ERISA preemption (for now), and (2) Liu v. Kaiser, in which the Ninth Circuit held that the substantial compliance doctrine does not apply solely to changes of beneficiary designations – it extends to initial beneficiary designations as well. Both cases are discussed below.

Of course, there were even more decisions from both district and circuit courts covering the full gamut of ERISA issues, so read on to find something to pique your interest. We’ll be back next week!

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

Arbitration

Second Circuit

Larkin v. Caremark Rx, L.L.C., No. 25 Civ. 7307 (LLS), 2026 WL 2532300 (S.D.N.Y. Aug. 26, 2026) (Judge Louis L. Stanton). Dennis Larkin and Danielle Gosline are beneficiaries of ERISA-governed health plans for which CVS Caremark serves as pharmacy benefit manager. Both were prescribed the weight-management drug Zepbound and received coverage until CVS Caremark removed Zepbound from its formularies in 2025. Plaintiffs allege that CVS Caremark made that change after entering into a rebate agreement with Novo Nordisk, the manufacturer of Zepbound’s competitor Wegovy. Plaintiffs further contend that when plaintiffs sought continued coverage of Zepbound as medically necessary, CVS Caremark denied their claims through form letters offering Wegovy or Mounjaro as substitutes, neither of which plaintiffs allege is FDA-approved for their conditions. Plaintiffs sued on behalf of a putative class, asserting claims for violation of plan terms, breach of fiduciary duty, and prohibited transactions under ERISA. CVS Caremark’s corporate parent, Caremark Rx, L.L.C., moved to compel individual arbitration under the Federal Arbitration Act or, alternatively, to dismiss for lack of personal jurisdiction and failure to state a claim. The court addressed the motion to compel first and denied it. Although the arbitration provision at issue appeared only in the terms and conditions of the website and mobile app located at Caremark.com, and not in any plan document, the court found that Caremark Rx L.L.C., which was an affiliate of the contracting entity, could enforce it as a third-party beneficiary under New York law. However, the court held that plaintiffs’ claims did not fall within the scope of the arbitration provision. The terms and conditions defined “dispute” as claims “related in any way to this agreement” (i.e. the Caremark.com terms and conditions), but defendant inappropriately attempted to expand that scope to any dispute “aris[ing] out of any aspect of the relationship” between the parties. Plaintiffs’ claims arose from their plan rights and CVS Caremark’s coverage denials, not from their optional use of the Caremark.com website. The court noted that ruling otherwise “would…produce the absurd result that the instant claims could be brought only by plan members who did not register for Caremark.com accounts,” which was an “arbitrary” and unenforceable result. Turning to the merits, the court rejected defendant’s argument that it was the wrong corporate entity, ruling that a plaintiff is not required to “disentangle a corporate family’s internal structure, particularly where defendant created the confusing nomenclature and limited its identifying information in communications with plaintiffs.” The court also found that plaintiffs adequately pleaded that CVS Caremark violated plan terms by denying Zepbound as not medically necessary despite plan language allowing coverage of non-formulary drugs when the formulary alternative is not viable. The court also noted that CVS Caremark offered substitutes that were not FDA-approved for plaintiffs’ conditions. However, the court limited the scope of the class plaintiffs could represent on that claim to members of their particular plans. Plaintiffs’ breach of fiduciary duty claim fared differently depending on which duty was at issue. Their duty of care claim was dismissed as duplicative of their plan-terms claim because it was based on the same facts and sought the same relief. However, the duty of loyalty survived. The court found that plaintiffs plausibly alleged that CVS Caremark acted in a fiduciary capacity as claims administrator, and systematically denied Zepbound to capture rebates under its Novo Nordisk agreement. The court allowed plaintiffs to pursue this claim on behalf of the broader class as pleaded. The prohibited transaction claim, however, was dismissed. Plaintiffs conceded that CVS Caremark does not act as a fiduciary when making formulary decisions, and liability under 29 U.S.C. § 1106(b) applies only to fiduciary conduct. The court likewise dismissed plaintiffs’ separately pleaded requests for equitable relief as redundant because plaintiffs had already sought equitable relief under their other claims.

Attorneys’ Fees

Ninth Circuit

Metaxas v. Gateway Bank, F.S.B., No. 20-cv-01184-EMC, 2026 WL 2548615 (N.D. Cal. Aug. 28, 2026) (Judge Edward M. Chen). Poppi Metaxas served as president and CEO of Gateway Bank and was the sole participant in Gateway’s Supplemental Executive Retirement Plan (SERP), an ERISA-governed plan providing retirement, disability, and termination benefits. After the Office of Thrift Supervision found she had engaged in fraudulent transactions in 2010, Gateway’s board suspended her without pay, and she was later charged with conspiracy to commit bank fraud, pled guilty, and served an eighteen-month sentence. While the charges were pending, Metaxas submitted claims for disability and termination benefits under the SERP. After several years of administrative proceedings, Gateway’s SERP committees denied both claims in 2017, and Metaxas sued. In what the court called “Phase One” of the litigation, the court granted summary judgment for Metaxas on her termination benefit claim and for Gateway on her disability claim. However, the court did not award benefits; instead, it remanded to Gateway to determine Metaxas’ eligibility and any potential benefit amount. Metaxas then moved for fees under 29 U.S.C. § 1132(g), and the court awarded a reduced fee amount of $189,240 to reflect her limited success. (Your ERISA Watch covered this ruling in our November 23, 2022 edition.) On remand (“Phase Two”), Gateway found Metaxas eligible for termination benefits and calculated her monthly benefit at $9,252.95. Unsatisfied, Metaxas challenged the calculation, and in 2024 the court reopened the case to address post-remand issues. Two rounds of motions to dismiss pared her claims down to a single surviving theory regarding Gateway’s monthly benefit calculation. On cross-motions for summary judgment, the court held that Gateway reasonably interpreted the terms “salary rate” and “salary allowance” in the SERP, with no evidence of arbitrary decision-making or self-dealing, and granted judgment for Gateway. (We covered this decision in our March 18, 2026 edition.) Metaxas then moved for $569,505 in Phase Two attorney’s fees and prejudgment interest at a requested rate of 10%. In this order the court held Metaxas ineligible for essentially all of her requested Phase Two fees. The court explained that under ERISA a party must show “some degree of success on the merits” in order to be eligible for fees, but Metaxas achieved no success in Phase Two. Every Phase Two claim was either dismissed outright or lost on summary judgment. The court further held that fees for the administrative proceedings on remand were unrecoverable in any event because “ERISA does not allow for attorneys’ fees for the administrative phase of the claims process.” The court also rejected Metaxas’ argument that the award of prejudgment interest itself constituted further Phase Two success supporting fees, explaining that the termination benefits and associated interest were the result of her Phase One victory. The court did, however, allow Metaxas a narrow category of “fees on fees” tied to her earlier, successful first fee motion. The court accepted that Metaxas billed 3.1 hours of work after filing her reply on the first motion for fees, which reflected attending the fee-motion hearing, reviewing the resulting order, and communicating about payment. At counsel’s previously-approved $800 hourly rate, this yielded a fees-on-fees award of $2,480. On prejudgment interest, the court exercised its discretion to award it despite Metaxas’ fee ineligibility, reasoning that Gateway had withheld her termination benefits for more than a decade and that interest was necessary to compensate for the lost use of those funds. The court declined Metaxas’ request for a 10% compounded rate, however, finding that the equities of the case did not warrant departing from the federal rate under 28 U.S.C. § 1961(a). The court ordered the parties to jointly calculate and submit the amount under that lesser rate within thirty days.

Breach of Fiduciary Duty

Sixth Circuit

Keesler v. Tractor Supply Co., No. 3:25-cv-00715, 2026 WL 2532657 (M.D. Tenn. Aug. 27, 2026) (Judge Waverly D. Crenshaw, Jr.). Chelsea Harrison Keesler, a full-time Tractor Supply employee in Pennsylvania, participated in Tractor Supply’s ERISA-governed health plan, which requires employees to declare tobacco use and charges tobacco users an additional $30 per pay period (about $780 per year) as a “tobacco surcharge.” Keesler alleges that this “wellness program” violates ERISA’s bar on charging plan participants more based on a health-status factor unless the program offers a valid “reasonable alternative standard” (RAS), with notice, that lets tobacco users avoid the surcharge. She alleges that until 2023, the only alternative Tractor Supply offered was to quit tobacco for twelve months, which did not qualify as an RAS under Department of Labor (DOL) regulations. She further contends that even after Tractor Supply introduced a cessation-program alternative for the 2023 and 2024 plan years, participants who completed it received only prospective relief from the surcharge rather than reimbursement of surcharges already paid, which was not the “full award” required under RAS rules. She further alleges Tractor Supply failed to give participants required notice of the RAS and diverted some surcharge revenue for its own use rather than paying it into the plan. Keesler brought a putative class action, individually and on behalf of the plan, asserting seven ERISA counts: unlawful surcharge (Counts I-II), breach of fiduciary duty (Counts III-IV), violation of plan terms (Counts V-VI), and failure to furnish required plan materials (Count VII). Tractor Supply moved to dismiss Counts I through VI. The company’s central argument was that Keesler lacked standing and failed to state a claim on all six challenged counts because she never alleged she was medically eligible for an RAS. The company pointed to statutory language limiting the RAS requirement to individuals for whom the standard is “unreasonably difficult due to a medical condition” or “medically inadvisable” to meet. Tractor Supply acknowledged that a 2013 DOL regulation eliminated the medical-condition eligibility requirement for wellness programs like tobacco surcharges, but argued the regulation was inconsistent with ERISA’s unambiguous text and entitled to no deference under the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo. In evaluating Tractor Supply’s motion, the court noted that there was “a wave of ERISA litigation on the issues presented to this case across the country.” The court chose to adopt the reasoning of a “remarkably similar” case decided in the Eastern District of Pennsylvania in April of this year, Leslie v. Rentokil North America, Inc. (We covered that case in our April 15, 2026 edition.) That case upheld the 2013 DOL regulations as valid and found Article III standing satisfied by plausible allegations of a concrete injury. In short, paying the surcharge without receiving the required RAS notice was all that was required to demonstrate standing. The court also relied on a brand new decision from the same district, Fritsch v. Cracker Barrel Old Country Store, Inc. (which we covered last week). Tractor Supply’s motion to dismiss the RAS-based counts for lack of standing and failure to state a claim was thus denied. On Keesler’s fiduciary duty claims, Tractor Supply argued they were derivative of the RAS claims and independently deficient because Tractor Supply acted only as a plan settlor, not a fiduciary, and because Keesler’s “upon information and belief” allegation that it pocketed surcharge funds was conclusory. Again adopting Leslie’s reasoning, the court held Keesler plausibly alleged Tractor Supply acted in a fiduciary capacity and harmed the plan by withholding surcharge dollars from participants’ paychecks and using those funds to reduce its own funding obligations to the plan. The court further rejected Tractor Supply’s conclusory pleading argument, stating, “ERISA plaintiffs generally lack the inside information necessary to make out their claims in detail unless and until discovery commences.” On the plan-terms claims, Tractor Supply argued Keesler failed to plausibly allege any violation because the plan only stated an “intent” to comply with the Affordable Care Act rather than guaranteeing compliance, unlike other plan provisions that mandate compliance with specific statutes. The court found Keesler’s allegations sufficient at the pleading stage; because she plausibly alleged the tobacco surcharge violated the ACA, it followed that Tractor Supply did not, in fact, intend to administer the plan in conformity with the ACA as promised. The court denied dismissal of Counts V and VI on this ground. Finally, Tractor Supply argued that Counts I, II, V, and VI were time-barred to the extent they challenged surcharges predating 2021, asserting that these claims were governed by a three-year limitations period. The court held that a limitations defense is generally unsuitable for resolution on a motion to dismiss unless the complaint affirmatively shows a claim is time-barred. Because Keesler’s amended complaint spanned periods both before and after the 2023 plan year, and the burden was on Tractor Supply to show that Keesler’s claims had expired, the court declined to limit the pleadings at this stage. As a result, Tractor Supply’s motion to dismiss was denied in its entirety.

Disability Benefit Claims

Fifth Circuit

Grice v. Metropolitan Life Ins. Co., No. 25-50566, __ F. App’x __, 2026 WL 2519457 (5th Cir. Aug. 26, 2026) (Before Circuit Judges Richman, Duncan, and Oldham). Jason Grice, a Senior Solutions Consultant at Google, has Charcot-Marie-Tooth syndrome, a nerve disorder that deforms his right foot and ankle. Grice underwent reconstructive surgery in January of 2022, and his surgeon, Dr. Ebert, initially estimated he would be “incapacitated” until July of 2022. Grice received short-term disability benefits while he followed up with Dr. Ebert, began pain management treatment, and attended physical therapy. The records of this treatment showed generally steady improvement, including regaining a full range of motion and, at one point, Grice expressed concern about pain from an upcoming hiking trip. On July 6, 2022, Dr. Ebert confirmed Grice could return to full-time work without restrictions on July 20. Grice did not return, however, and on July 25 Dr. Ebert submitted a new form extending his return-to-work date to September 23. Grice then filed a claim for long-term disability benefits with MetLife, the plan’s claims administrator. A MetLife nurse consultant and an independent reviewing physician both concluded Dr. Ebert’s records supported only a temporary work absence through March 1, 2022. A vocational rehabilitation consultant agreed, and MetLife denied Grice’s claim on November 30, 2022. On appeal, Grice submitted additional records from a pain management specialist and his physical therapist, but a second independent reviewer agreed with the first that Grice could return to his sedentary desk job. MetLife upheld the denial, Grice sued under 29 U.S.C. § 1132(a)(1)(B), and at the district court MetLife prevailed, obtaining summary judgment. Grice appealed to the Fifth Circuit, which issued this unpublished per curiam decision. Before reaching the merits, the panel discussed the appropriate standard of review, which focused on “whether Grice’s MetLife plan contained a valid delegation clause.” Grice made four arguments for why the delegation clause in the plan did not support an abuse of discretion standard of review, but the court only examined his third, which was the following. Grice contended that Texas law bars delegation clauses in insurance contracts. He conceded that the plan had a choice-of-law provision selecting California, but that state also bans such delegations, so either way the provision was nullified. However, MetLife responded that the California ban only applies to California residents, which Grice was not. The court stated that “this puts Grice in a peculiar spot: Even though his home State (Texas) and the State selected by his insurance policy (California) both prohibit the use of delegation clauses, neither prohibition protects Grice.” The court stated that the result was that “Grice’s policy chose to be governed by no state law at all.” The court was not pleased with this, and if pressed, the court said it “doubt[ed] an ERISA plan can tell its insured that no state law applies to him.” However, the court was able to avoid the issue because it concluded that MetLife’s decision should be upheld even under more exacting de novo review. Under the plan, Grice needed to show he could not perform his usual occupation “with reasonable continuity” after the elimination period ran in July 2022. Google described Grice’s job as sedentary desk work involving occasional lifting of up to ten pounds and mostly sitting, with only brief walking or standing. Grice’s medical records showed he could perform those duties after July 2022, and thus the Fifth Circuit affirmed in favor of MetLife, leaving the delegation issue for another day.

Eighth Circuit

Halloran v. Unum Life Ins. Co. of Am., No. 25-2550, __ F.4th __, 2026 WL 2545315 (8th Cir. Aug. 28, 2026) (Before Circuit Judges Colloton, Gruender, and Kobes). Andrew Halloran worked as a sheet metal fabricator, which was categorized as medium work requiring occasional lifting up to 50 pounds and frequent reaching. He injured his left shoulder in 2019 and underwent surgery, which his doctor expected to require about four months of recovery. The insurer of his employer’s disability benefit plan, Unum Life Insurance Company of America, approved short-term disability benefits, and then approved long-term benefits beginning in April 2020. Halloran’s plan initially defined “disabled” as being limited from performing his own regular occupation, but after 24 months the standard tightened to being unable to perform any gainful occupation for which he was reasonably suited. Starting in June of 2020, Halloran’s doctor repeatedly opined that Halloran could perform sedentary work (i.e., lighter than his prior medium work) and maintained that view through September and October of 2020 despite a reinjury. By December of 2020 Halloran’s doctor raised his lifting capacity to 20 pounds, in February of 2021 he raised the possibility that Halloran might need to change careers, and in June of 2021 he reiterated the same sedentary restrictions despite a third shoulder injury. Unum’s vocational consultant identified three sedentary jobs Halloran was qualified for, although all three required some reaching. In April of 2022 Unum terminated Halloran’s benefits, determining that he was no longer eligible for benefits because he did not meet the stricter “any gainful occupation” definition of disability. Halloran sought reconsideration in May of 2022 with new medical records, but Unum’s consultants still found that he had sedentary work capacity. When they asked Halloran’s doctor directly, he confirmed his restrictions had “remained as issued from 6/1/21 through 5/2/22,” i.e., sedentary work with a 20-pound limit. Halloran then underwent a functional capacity evaluation (FCE), which concluded he could not work at all. This altered Halloran’s doctor’s opinion; he now agreed with the FCE that Halloran could not perform sedentary work. However, the FCE did not alter Unum’s opinion. Unum upheld its denial on appeal, and this action followed under 29 U.S.C. § 1132(a)(1)(B). Because the benefit plan at issue did not give Unum discretionary authority, the district court reviewed Unum’s denial de novo. It concluded that Halloran had not shown by a preponderance of the evidence that he remained disabled after April of 2022 because he was capable of meaningful sedentary work. (Your ERISA Watch covered this ruling in our July 9, 2025 edition.) Halloran appealed, and the Eighth Circuit issued this published opinion. Halloran first contended “the district court legally erred by failing to consider relevant evidence.” Halloran argued that the district court should have discredited Unum because Unum failed to comply with its claims policy and a Regulatory Settlement Agreement it signed. The court found the district court had in fact considered and rejected Halloran’s arguments, and even if Halloran were correct, the appropriate remedy would be de novo review of his claim, “which is exactly what he got.” Next, Halloran argued that Unum violated the Eighth Circuit’s decision in King v. Hartford Life & Accident Insurance Co. by offering a “post hoc rationale” in litigation that was not raised in its denial letters. The court disagreed: “Here, Unum’s rationale has always been the same – Halloran was not disabled because he could perform some gainful occupation. And because the standard of review was de novo, the district court was ‘not limited to the fiduciary’s explanation of its denial.’” Finally, Halloran attacked the district court’s factual findings. This was also unsuccessful. The Eighth Circuit held the district court did not clearly err in crediting Halloran’s doctor’s years of consistent, contemporaneous sedentary-work assessments over his “attempt to walk back Halloran’s restrictions after-the-fact[.]” The Eighth Circuit this affirmed the judgment for Unum.

Eleventh Circuit

Dunn v. Life Ins. Co. of N. Am., No. 25-12108, __ F. App’x __, 2026 WL 2529506 (11th Cir. Aug. 27, 2026) (Before Circuit Judges Rosenbaum, Grant, and Luck). Marcy Dunn worked as a customer service associate at Lowe’s until osteoarthritis in her right hip, aggravated by hip surgery, and related leg and back pain led her to stop working and apply for benefits under Lowe’s ERISA-governed long-term disability plan, which was insured by Life Insurance Company of North America. The policy granted LINA discretionary authority to decide eligibility, and after the first 24 months required Dunn to prove she could not perform the material duties of any occupation for which she was reasonably qualified that paid at least 60 percent of her prior salary. LINA initially approved the claim, but terminated it at the 24-month mark after Dunn’s surgeon opined that Dunn could perform sedentary work, a medical reviewer for LINA reached the same conclusion, and a LINA vocational assessment identified two suitable, sufficiently paying sedentary occupations in her area. On appeal LINA commissioned a second vocational assessment and consulted three additional medical professionals, who all concluded Dunn could perform sedentary work in one of the identified occupations. Dunn thus brought this pro se action to recover the terminated benefits. LINA moved for judgment on the administrative record. Dunn argued that she could no longer drive or ride in a car for any distance, could not remain in one position or walk far, that LINA’s evaluating physicians only reviewed a paper record and were biased because LINA paid them, that her own therapist would disagree with LINA’s conclusions, and that LINA had “advocated” for her when she applied for Social Security disability benefits. The district court granted LINA’s motion, applying arbitrary and capricious review because the policy vested LINA with discretion, and finding the termination reasonable and unaffected by LINA’s structural conflict as both claims administrator and payor. Dunn appealed to the Eleventh Circuit, which affirmed in this unpublished per curiam decision. The appellate court applied its six-step Blankenship framework for reviewing ERISA benefits decisions, skipping directly to whether reasonable grounds supported LINA’s decision under arbitrary and capricious review. The court held it was reasonable for LINA to rely on the concurring conclusions of four medical professionals and two vocational assessments that Dunn could perform sedentary work. The court stated that LINA’s structural conflict of interest was, at most, only one factor in the analysis, and a minor one at that because LINA had submitted a declaration which “listed multiple steps” that it took “to ensure that claim assessments, including Dunn’s, were ‘independent’ and ‘not motivated by self interest[.]’” The court rejected each of Dunn’s six arguments. Her claimed inability to drive or sit in one position did not match the medical evidence, which showed she could drive short distances, and neither alternative job required prolonged walking or a single fixed position. LINA’s reliance on file reviews by paid, independent physicians rather than in-person examinations was not itself arbitrary and capricious “in the absence of other troubling evidence.” Her own therapist’s contrary opinion could not be considered because it never appeared in the administrative record. The clerical errors she identified in her records were immaterial and, in any event, understandable given that Dunn herself had made similar mistakes in discussing her medical treatment. Her Social Security disability award did not compel a contrary result: “[S]ince the statutory schemes have different standards, claims under ERISA and the Social Security Act are not coextensive… A disability finding under one scheme does not necessarily mean that a claimant is disabled under the other.” Finally, Dunn’s complaint that she had no opportunity to testify failed because under ERISA judicial review is confined to the administrative record. As a result, the judgment in LINA’s favor below was affirmed.

Discovery

Tenth Circuit

Macias v. Sisters of Charity of Leavenworth Health System, No. 1:23-cv-01496-DDD-SBP, 2026 WL 2517003 (D. Colo. Aug. 26, 2026) (Magistrate Judge Susan Prose). Iris Macias, Lorine Gumone, and Billie Milham are former employees of the faith-based nonprofit healthcare system SCL Health. They have brought this putative class action alleging that SCL Health, its board of directors, and its investment committee breached their ERISA fiduciary duties of prudence in administering three defined contribution retirement plans – a 401(k) Plan, a DC Plan (merged into the 401(k) Plan in 2021), and a 403(b) Plan (terminated the same year). Plaintiffs allege that defendants selected a “materially underperforming” series of JPMorgan SmartRetirement target-date funds for the plans and then failed to monitor or remove them despite ongoing underperformance, which “cost the Plans and [their] participants tens of millions of dollars.” Defendants have now filed a motion to bifurcate discovery into two phases: an initial phase addressing loss and causation of loss, which they argued involved limited fact discovery and was conducive to summary judgment proceedings, followed by a second phase addressing the “extremely fact-intensive” issue of breach, if necessary. Plaintiffs opposed bifurcation, arguing that breach and loss are inseparable under ERISA’s causation requirement and that bifurcating discovery would invite duplicative motion practice and further delay a case already pending since 2023. The assigned magistrate judge began her analysis with the issue of separability, which is a necessary but not sufficient condition for bifurcation. The magistrate agreed with plaintiffs that there was no way to adjudicate loss and causation without also examining defendants’ fiduciary processes. The magistrate rejected defendants’ characterization of the complaint as merely challenging fund performance rather than defendants’ fiduciary processes as a whole, noting that the presiding district court judge had already denied defendants’ motion to dismiss, which made similar arguments. On the remaining bifurcation factors of convenience, prejudice, and judicial economy, the magistrate ruled that defendants’ efficiency argument was “entirely speculative” because it assumed that defendants would ultimately prevail on a future summary judgment motion. If they did not, there would be “two rounds of discovery, with duplicative scheduling, drafting, and search efforts.” The magistrate also rejected defendants’ reliance on the Supreme Court’s decision last year in Cunningham v. Cornell (covered in our April 23, 2025 edition), concluding that the pleading issue in that case was different from the fact-intensive, totality-of-the-circumstances inquiry required here. As a result, defendants’ motion to bifurcate discovery was denied.

ERISA Preemption

Sixth Circuit

Frindt v. Fascione, No. 1:25 CV 2226, 2026 WL 2561376 (N.D. Ohio Aug. 31, 2026) (Judge Patricia A. Gaughan). Jason Frindt and his former coworkers at Insight Behavioral Consulting, LLC, a now-defunct provider of in-school and after-school behavioral services, allege that the company failed to pay them full wages and overtime in 2025 and failed to remit funds withheld from their pay toward their retirement accounts. Frindt contends that the company’s owner, Jeremy Meduri, and his wife, Lindsey Fascione, diverted the money to “purchase a home worth over $1 million, purchase numerous luxury automobiles, take lavish vacations, and fund purchases for an affiliated company.” Frindt sued on behalf of a putative class, asserting a Fair Labor Standards Act (FLSA) wage claim against Insight Behavioral and Meduri, an ERISA claim against Meduri for failing to make plan contributions and premium payments, and Ohio Fraudulent Transfer Act and unjust enrichment claims against all defendants, including Fascione. Fascione moved for partial judgment on the pleadings, arguing that the fraudulent transfer and unjust enrichment claims against her were preempted by the FLSA and ERISA. The court began by noting that the complaint did not assert an FLSA or ERISA claim against Fascione at all. Frindt never alleged she was an “employer” under the FLSA or a “fiduciary” under ERISA, so there was no federal claim against Fascione that could be preempted. Even if such allegations existed, Fascione had denied employer and fiduciary status in her own pleadings and asserted it as an affirmative defense, meaning Frindt was entitled to bring his alternative state law claims. Furthermore, the court noted that it had previously held in other cases that the FLSA does not preempt fraudulent transfer and unjust enrichment claims, and these prior decisions were not vitiated by intervening Sixth Circuit precedent. As for ERISA, the court stated that even if the court credited Fascione’s preemption theory, ERISA could preempt Frindt’s state law claims only to the extent they sought recovery of unpaid plan contributions specifically. Because Frindt’s complaint plausibly alleged the fraudulent transfer and unjust enrichment claims also covered unpaid gap pay, minimum wages, and overtime, they could not be preempted in full. As a result, Fascione’s motion was denied.

Seventh Circuit

Central States, Southeast and Southwest Areas Health & Welfare Fund v. McClain, No. 25-2727, __ F.4th __, 2026 WL 2510865 (7th Cir. Aug. 26, 2026) (Before Circuit Judges Hamilton, Kirsch, and Kolar). Arkansas Insurance Department Rule 128 is a part of the State of Arkansas’ ongoing battle to regulate pharmacy benefit managers (PBMs). Rule 128 protects pharmacies from being paid below “fair and reasonable” rates for dispensing medications. The rule does so through two mechanisms: (1) a Dispensing Fee Requirement authorizing the Insurance Commissioner to order a health plan to pay additional dispensing fees to pharmacies if the plan’s payment program is not “fair and reasonable,” and (2) a Reporting Requirement mandating that plans submit compensation data to the Commissioner to make that determination. Central States, Southeast and Southwest Areas Health and Welfare Fund, a self-funded multiemployer plan covering roughly 500,000 participants nationwide, including in Arkansas, sued the Commissioner seeking a declaration that ERISA preempts both components of Rule 128. The district court granted the Commissioner’s motion to dismiss, as we discussed in our September 10, 2025 issue. The court agreed with the Commissioner on both prongs of the preemption analysis, which address whether a state law has both a “reference to” and an “impermissible connection” to an ERISA plan. The district court held that the Dispensing Fee Requirement was a permissible “cost regulation” under the Supreme Court’s 2020 decision in Rutledge v. Pharmaceutical Care Management Association, and that the Reporting Requirement was merely “incidental” to Rule 128’s cost-focused purpose rather than “fundamentally a reporting law.” The Fund appealed to the Seventh Circuit, where it abandoned its “reference to” theory and argued only that the Rule had an “impermissible connection” with ERISA plans. The appellate court began by stating, “The Fund’s two-part challenge to Rule 128 requires a straightforward application of one Supreme Court precedent, and a careful analysis of another.” On the Dispensing Fee Requirement, the Seventh Circuit found that Rule 128 was indistinguishable from the regulation found permissible by the Supreme Court in Rutledge. Just as the Supreme Court had upheld Arkansas’ earlier Act 900 as a permissible cost regulation that did not “bind plan administrators to any particular choice,” the court held that “the Fund has not alleged that the Dispensing Fee Requirement does anything more than increase the cost of pharmacy benefits to the Fund at the Commissioner’s discretion.” The Fund tried to compare Rule 128 to three post-Rutledge decisions striking down other states’ PBM laws, but the court distinguished all three as involving network-design mandates which went well beyond mere cost regulation. The Seventh Circuit held that Rule 128 imposed no comparable restriction on how PBMs structure networks or offer discounts. The Reporting Requirement presented what the court called “a closer call” because of the Supreme Court’s 2016 decision in Gobeille v. Liberty Mutual Ins. Co., which held that state-mandated reporting by ERISA plans is preempted because “reporting, disclosure, and recordkeeping are central to…the uniform system of plan administration contemplated by ERISA.” However, the Seventh Circuit held that Rule 128’s reporting obligation fit within Gobeille’s exception for state laws “the enforcement of which necessitates incidental reporting by ERISA plans.” The court rejected the Fund’s argument that this exception was limited to reporting tied to taxation, stating that Gobeille only cited taxes as an example, not a limit. The court held that the reporting required by Rule 128 was both incidental to and necessitated by the already upheld Dispensing Fee Requirement, and noted that the Fund had not alleged the reporting was more extensive or burdensome than necessary. The court borrowed, without fully endorsing, the Sixth Circuit’s 2014 framing in Self-Insurance Institute of America, Inc. v. Snyder, which distinguished “direct” regulation of plan administration from merely “peripheral” effects, observing that the subsequent decision in Gobeille did not provide a bright line test as to what “incidental” means: “We leave for another day the task of drawing the precise contours for what makes reporting ‘incidental.’” Finally, the court noted that just this year Congress has added a new ERISA § 726, which creates uniform federal reporting requirements for similar pharmacy-compensation data. The court stated that “these new requirements, once in effect, may change our preemption analysis for Rule 128’s Reporting Requirement[.]” But that will be another case for another day. For now, Rule 128 is not preempted by ERISA.

Exhaustion of Administrative Remedies

Ninth Circuit

Gunnison v. Ingersoll Rand Retirement Savings Plan, No. 2:26-cv-0972 TLN AC PS, 2026 WL 2532101 (E.D. Cal. Aug. 26, 2026) (Magistrate Judge Allison Claire). Brian Gunnison, proceeding pro se, sued the Ingersoll Rand Retirement Savings Plan and its Benefits Committee, alleging that his contributions, which were deducted from his paychecks, were inexplicably changed to 0% around April 2021. He alleged that this occurred without any request or notice. He also alleged that during this time the online portal of third-party administrator Fidelity continued to show him contributing 10% of his gross pay. Defendants allegedly discovered the discrepancy in March of 2023, but did not correct it or tell Gunnison about it then. Instead, defendants waited until April of 2024, when they sent Gunnison a notice, and further stated that his Fidelity election record had been adjusted to match what was actually being withheld, and that “[n]o action is required,” but neglected to tell him what his actual contribution rate was. Gunnison relied on the “no action required” language and did nothing further until 2025. In September of that year defendants offered Gunnison a one-time make-up contribution covering 100% of the missed employer match and only 50% of the missed employee pre-tax contributions, and only for the period from April 2021 through April 2022, on the theory that Gunnison’s 2021 W-2 form would have alerted him to the shortfall by then. Gunnison demanded to be made whole for all missed contributions through 2025, but defendants rejected that demand, contending that Gunnison’s 90-day window to file a formal claim expired in 2024. Gunnison unsuccessfully appealed and then brought this action under ERISA seeking unpaid contributions, earnings, gains, prejudgment interest, and costs. Defendants moved to dismiss solely on exhaustion grounds, arguing that the plan’s 90-day appeal deadline began running with the April 2024 notice, and Gunnison did not appeal within that window. Gunnison responded that the notice’s “no action required” language misled him, and thus his 2025 demand should have counted as a timely claim. Defendants’ motion was referred to the assigned magistrate judge, who issued this recommendation. The magistrate was “troubled that the notice plaintiff received in April 2024 did not explicitly alert him that no retirement contributions had been made since 2021.” However, the magistrate concluded that the communication put Gunnison on sufficient notice. “A reasonable person receiving that information would have gone online or picked up the phone to find out whether the actual contributions being made were only slightly different from what the employee intended, or dramatically less than intended – or, as plaintiff could have learned in 2024 through reasonable diligence – not being made at all.” Furthermore, Gunnison’s pay stubs and W-2 forms had informed Gunnison all along that deductions were not being made appropriately. The court acknowledged Gunnison’s argument about “no action required,” but “that statement can only be understood as meaning that no action on plaintiff’s part was necessary in order to correct the Fidelity account information to match the deductions actually being taken as retirement contributions. The statement cannot reasonably be interpreted to mean that plaintiff was absolved of any responsibility for ensuring that his elections were as he wished them to be.” Indeed, the notice even alerted him as to how he could “view and adjust his election.” In the end, “The court is sympathetic to plaintiff’s personal circumstances, but they are not relevant to the legal question whether the 2024 notice triggered a duty of reasonable inquiry.” As a result, the magistrate recommended that defendants’ motion to dismiss be granted, without leave to amend.

Medical Benefit Claims

Eighth Circuit

Margaret W. v. Ascension Wisconsin, No. 4:26-cv-44-MAL, 2026 WL 2480854 (E.D. Mo. Aug. 25, 2026) (Judge Maria A. Lanahan). Margaret W., an Ascension Wisconsin employee, and her dependent, J.W., are the plaintiffs in the case. They were participants in the Ascension SmartHealth Medical Plan, an ERISA-governed health plan. Facing school suspensions, legal trouble, deficits in executive functioning, anger, anxiety, and depression, J.W. was referred to Elements Wilderness Program, a Utah-licensed outdoor youth treatment facility. There J.W. was diagnosed with major depressive disorder, cannabis use disorder, nicotine use disorder, ADHD, and dyslexia. J.W. received treatment at Elements from 2022-23 with reported improvement. However, Margaret W.’s claims for benefits for J.W.’s treatment were denied. Plaintiffs contend that the denials were based on shifting rationales. First, the plan “referenced vague phrases such as ‘Missing or invalid information,’ ‘Diagnosis code,’ and ‘Procedure code for services rendered,’” without citing any plan provisions. Then the plan asserted that the treatment was “NOT A COVERED EXPENSE.” Finally, after appeal to the SmartHealth Appeals Committee, the plan stated that an “Outdoor Youth Program is not listed as an accredited care facility for psychiatric services” under the plan. A further appeal was denied on the same ground. Plaintiffs sued to recover benefits under ERISA § 502(a)(1)(B) (Count I) and, in the alternative, for equitable relief under the Mental Health Parity and Addiction Equity Act under § 502(a)(3) (Count II). Defendants moved to dismiss for failure to state a claim. On the benefits claim, defendants argued that plaintiffs failed to plausibly allege that Elements qualified as an “Accredited Care Facility” under the plan. The plan defined that term as “a facility licensed, certified, or approved as a Psychiatric Treatment facility by the state or jurisdiction in which it is located, and which primarily provides psychiatric services for the diagnosis and treatment of mentally ill persons, by or under the supervision of a Physician.”  The court disagreed with defendants. The court found that Elements’ Utah licensure as an “outdoor youth program” plausibly qualified as licensure as a psychiatric treatment facility. It found J.W.’s DSM-5 diagnoses and referral for anxiety, sadness, and depression supported a reasonable inference that Elements primarily provided psychiatric services to mentally ill children. Furthermore, because Utah law generally restricts mental health therapy to licensed practitioners who would qualify as “physicians” under the plan’s broad definition, the court found it reasonable to conclude that J.W.’s treatment was provided “by or under the supervision” of a physician as required by the plan. Plaintiffs had less success with their Parity Act claim. The court explained that Parity Act claims generally take one of three forms – “(1) facial exclusion cases, (2) as-applied cases, and (3) internal process cases” – and ruled that plaintiffs’ complaint failed to adequately plead either of the (first) two theories it invoked. Their facial-exclusion theory “recites broad types of limitations that could give rise to a Parity Act violation,” but “fails to show that the Plan actually imposes such a limitation here.” The as-applied theory “fairs [sic] no better.” The court stated that it rested on “information and belief” assertions that defendants had not applied a “similar exclusion” to unspecified comparators like skilled nursing facilities, without specifying what exclusion was supposedly being compared. The court rejected plaintiffs’ argument that defendants’ failure to produce comparative analysis documents supported an inference of disparate treatment, and further rejected the argument that information-and-belief pleading should be excused simply because the relevant facts sit with the defendant. Plaintiffs were still required to present “some factual basis for the inference of liability or the reasonable belief that the information supporting such liability is in the sole possession of the defendant.” As a result, the court dismissed both Parity Act theories. Finally, the court agreed with defendants that Ascension Wisconsin was not a proper ERISA defendant. The complaint identified Ascension Wisconsin only as Margaret W.’s employer and did not allege that it controlled plan administration. As a result, the case will continue, but without the Parity Act theories, and without the employer defendant.

Tenth Circuit

M.Z. v. Blue Cross Blue Shield of Illinois, No. 1:20-cv-00184-RJS-CMR, 2026 WL 2566418 (D. Utah Aug. 31, 2026) (Judge Robert J. Shelby). M.Z. and her son N.H. sued Blue Cross Blue Shield of Illinois (BCBS) and the Boeing Company Consolidated Health and Welfare Benefit Plan under ERISA over the denial of coverage for N.H.’s residential mental health treatment, first at ViewPoint Center and then at Innercept. N.H. had a history of escalating behavioral crises including violence toward his mother, paranoid statements, and possible psychosis. The plan covers residential treatment only when medically necessary under the Milliman Care Guidelines (MCG), which require a showing of danger to self, danger to others, or daily moderately severe psychiatric symptoms with serious dysfunction in daily living. In a 2023 order, the court granted summary judgment for BCBS on the ViewPoint claim, finding the denial reasonable, but remanded the Innercept claim because BCBS never actually issued a final decision on it due to a mishandled appeal. (Your ERISA Watch covered this decision in our April 5, 2023 edition.) On remand, M.Z. resubmitted the Innercept appeal, this time invoking the Child and Adolescent Service Intensity Instrument (CASII) guidelines to argue N.H. required residential treatment, but BCBS denied the claim twice more in brief, conclusory letters that also mistakenly omitted roughly half of N.H.’s treatment period from the denied date range. The parties then filed cross-motions for summary judgment which were decided in this order. The court first addressed the missing-dates problem and declined to award benefits or alter the standard of review because plaintiffs did not demonstrate prejudice. The error “did not prevent Plaintiffs from submitting any materials or arguments in their two appeals” and plaintiffs did not contend that BCBS would have reached a different conclusion if the dates had been properly considered. As a result, the court proceeded to review BCBS’s denial under the deferential arbitrary and capricious standard. The court rejected plaintiffs’ argument that the court should use the CASII guidelines because the court had already held that the plan’s use of the MCG did not violate federal mental health parity rules, and furthermore plaintiffs did not “provide reliable expert foundation for the alternative standard.” Plaintiffs’ fortunes turned when the court considered the merits. The court found BCBS’ post-remand denials arbitrary and capricious on three independent grounds. First, the conclusory denial letters never cited any specific evidence in the administrative record to support their assertions that N.H. could “function day to day” and required no residential care. The court found this defect was similar to the one requiring reversal in the Tenth Circuit’s decision in D.K. v. United Behavioral Health (the case of the week in our May 24, 2023 edition), which held that medical benefit denials must be backed by reasoning and record citations. Second, BCBS entirely ignored contrary evidence from N.H.’s treating clinicians which plaintiffs had specifically cited in their appeals. Third, BCBS’ denial letters failed to engage with any of the substantive arguments plaintiffs raised in their appeals. The court thus turned to the proper remedy, which it considered to be “a close call.” Plaintiffs argued that benefits should be awarded because “[BCBS] wasted its post-remand opportunity to provide Plaintiffs with a full and fair review of N.H.’s claims.” However, the court opted for remand, determining that this case was not comparable to others where benefits were awarded. This was the first violation attributable to BCBS in the Innercept claims process; the earlier remand had resulted from procedural mishaps by others. Furthermore, the court had separately found BCBS’ ViewPoint denial reasonable. Also, the record did not clearly establish plaintiffs’ entitlement to benefits, and BCBS had not committed multiple violations warranting an award of benefits. The court thus remanded the Innercept claim for further review consistent with its order. Finally, the court granted plaintiffs’ request to submit future briefing on attorney’s fees, prejudgment interest, and costs under 29 U.S.C. § 1132(g). Defendants did not oppose further briefing, and the court specifically noted that “[a] decision to remand a claim back to the plan administrator for proper review may constitute sufficient success on the merits to warrant an award of attorney’s fees.”

Pension Benefit Claims

Sixth Circuit

Kelly v. Valeo North America, Inc., No. 2:24-cv-11066-TGB-KGA, 2026 WL 2566210 (E.D. Mich. Aug. 31, 2026) (Judge Terrence G. Berg). Thomas Kelly worked for Siemens from 1985 to 1993 and then for Valeo North America, Inc. from 1997 until he resigned in July 2012 at age 51. Valeo agreed Kelly was entitled to pension benefits under the Valeo Lighting Salaried Pension Plan, but the parties did not agree as to what he should get. Valeo maintained Kelly qualified only for a Deferred Vested Pension, actuarially reduced, while Kelly insisted he was entitled to an unreduced Early Retirement Service Pension. For years before he resigned, Valeo had told Kelly in writing that leaving before age 55 would limit him to a reduced Deferred Vested benefit. In 2019 a Valeo Administrative Committee appeal decision partly ruled for Kelly. It agreed with him regarding his years of accredited and benefit service, but held that because he terminated employment at 51 rather than 55 or older, he could not “Retire” into a Service Pension under the plan’s terms. Kelly thus brought this action, and the case proceeded to cross-motions for judgment on the administrative record regarding two claims: wrongful denial of benefits under 29 U.S.C. § 1132(a)(1)(B), and failure to produce plan documents under 29 U.S.C. §§ 1024(b)(4), 1132(c). Applying arbitrary and capricious review because of the plan’s grant of discretionary authority, the court sided with Valeo on all of the presented issues. The plan defined a “Member” as eligible for a Service Pension only if the Member had “attained age 55” at the time he “Retire[d],” and Kelly indisputably stopped working at Valeo at age 51. This decision thus triggered a Deferred Vested Pension treatment instead. The court likewise upheld Valeo’s actuarial reduction as applied to that benefit because it was a reasonable application of the plan’s early-commencement reduction table. The court rejected Kelly’s arguments that (1) Valeo miscalculated his years of service, (2) the reduction table was “fictitious,” (3) he was misled into declining a 2016 lump-sum offer, and (4) post-termination deferred compensation under a separate nonqualified plan mean that he was still an “Employee” after his termination. Kelly also pressed a claim for benefits under a smaller, separate plan, the Valeo Sylvania Pension Preservation Plan (PPP), which required benefits to commence at age 55 in a form depending on the participant’s marital status as of that date. The court ruled that because Kelly never appealed any PPP determination or otherwise engaged in the PPP’s claims procedure, and offered nothing beyond conclusory assertions to show futility, he had failed to exhaust administrative remedies, and the claim was thus dismissed. On the plan documents claim, the court ruled for Valeo on three independent grounds. First, the court held that Kelly brought his claim after the expiration of Michigan’s analogous two-year statute of limitations for statutory penalty actions. Second, Kelly’s request for “[a]ll Pension Plan documents…from 2011 through 2019,” spanning eight years with no specification of which documents he wanted, failed the Sixth Circuit’s “clear notice” requirement. Third, even if Kelly had provided clear notice, Valeo had already given Kelly everything it was obligated to produce, which included the governing 2011 Plan, its summary plan description, and the relevant actuarial reduction table. Other documents requested by Kelly fell outside § 1024(b)(4)’s scope. Furthermore, Kelly showed no prejudice from his non-receipt of any documents. The court thus granted Valeo’s motion for judgment and denied Kelly’s cross-motion. In a footnote, the court stated that Kelly’s briefing “repeatedly cites to quotations from several cases that are not contained in the actual opinions[.]” The court noted this was “not acceptable and could be considered a violation of Plaintiff’s counsel’s obligations to the Court under Rule 11… If it happens again, sanctions will be necessary.”

Ninth Circuit

Liu v. Kaiser Permanente Employees Pension Plan for the Permanente Medical Group, Inc., No. 24-4303, __ F.4th __, 2026 WL 2562029 (9th Cir. Aug. 31, 2026); Liu v. Kaiser Permanente Employees Pension Plan for the Permanente Medical Group, Inc., No. 24-4303, __ F. App’x __, 2026 WL 2568624 (9th Cir. Aug. 31, 2026) (Before Circuit Judges Paez, Bea, and Forrest). Sherry Yali Liu sued the Kaiser Permanente Employees Pension Plan for the Permanente Medical Group, Inc., and Kaiser Foundation Health Plan, Inc. after Kaiser denied her claim for her deceased sister Ya-Xia Liu’s $676,980.77 pension benefit. In 2022 Ya-Xia was hospitalized and required 24-hour care after a cancer diagnosis. During this time a benefit election form was submitted online at her request, electing a lump-sum rollover into an E*TRADE account and designating Liu as beneficiary. Ya-Xia died three days later. However, Kaiser’s Appeals Subcommittee denied Liu’s subsequent claim on the ground that Ya-Xia had only initiated, not finalized, her election. Kaiser contended that Ya-Xia had not completed the finalization step of the process – a step “not made publicly available to participants” – in which she was supposed to “confirm her elections and personal information and acknowledge notices[.]” Kaiser “also rejected Liu’s argument that she was entitled to Ya-Xia’s benefits because Ya-Xia substantially complied with the Plan’s requirements, reasoning that ERISA does not permit a fiduciary to grant benefits based on substantial compliance with plan requirements.” Liu thus filed this action, to which Kaiser responded by moving to dismiss. The district court agreed with Kaiser, concluding that “the Complaint failed to plausibly allege that Liu was entitled to benefits under a substantial compliance theory.” (We covered this ruling in our July 3, 2024 edition.) On appeal, the Ninth Circuit issued the two above companion dispositions on the same day resolving different claims from the same appeal: a published opinion reversing dismissal of the core benefits claim, and an unpublished memorandum affirming dismissal of two subsidiary claims. In the published opinion, the panel held the district court erred as a matter of law in concluding that Liu could not make a substantial compliance argument. Kaiser argued that the substantial compliance doctrine has only applied thus far to changes of beneficiary designations, and should not apply to initial beneficiary elections. The Ninth Circuit disagreed, extending its beneficiary-designation precedent in Becker v. Williams to the benefit-election context. Kaiser attempted to distinguish Becker on the ground that its plan, unlike the plan in Becker, set forth a “very specific process.” However, the court pointed out that neither Kaiser’s plan nor its summary plan description specified that Kaiser’s second-step confirmation and notice-acknowledgment practice was required to complete a valid election. Furthermore, the court explained that Kaiser’s “formalistic, overly technical” interpretation could lead to forfeitures because it would prevent any benefit designation at all, as opposed to merely voiding a beneficiary change. The Ninth Circuit also clarified that the Supreme Court’s 2009 decision in Kennedy v. Plan Administrator for DuPont Savings & Investment Plan did not abrogate the substantial compliance doctrine because Kennedy addressed only a beneficiary’s attempt to effectuate a change through an “external document” (a divorce-decree waiver), as opposed to Ya-Xia’s undisputed use of Kaiser’s official form. Finally, the court found that Liu’s complaint adequately alleged that Ya-Xia substantially complied with the plan’s requirements: “The Complaint states that Ya-Xia was hospitalized, requiring 24-hour care, when Kaiser’s election form was properly completed and submitted at her request. She died of cancer three days later. She was not alive to acknowledge any subsequent notices or to submit any re-confirmations. It is hard to imagine what more a dying cancer patient could ‘reasonably’ do ‘under the circumstances’ to make an election.” The court thus reversed and remanded Liu’s § 1132(a)(1)(B) benefits claim for further proceedings. The companion unpublished memorandum, issued the same day by the same panel, affirmed dismissal of Liu’s two remaining claims. First, the panel rejected Liu’s argument that the plan’s incorporation of 26 U.S.C. § 401(a)(9) entitled her to death benefits as an “eligible designated beneficiary” under § 401(a)(9)(E)(ii) (which covers beneficiaries no more than ten years younger than the employee), holding that provision inapplicable to the Kaiser plan. Second, the panel affirmed dismissal of Liu’s § 1132(a)(3) claim for a tax gross-up, surcharge, and reformation for three reasons. The court held that (1) Liu forfeited her reformation theory by not challenging its dismissal in her opening brief; (2) her surcharge claim for the same lump-sum benefit did not seek a remedy distinct from her § 1132(a)(1)(B) claim; and (3) Ninth Circuit precedent forecloses recovery of tax-benefit losses under § 1132(a)(3).

Pleading Issues & Procedure

Third Circuit

Akopian v. Inserra Supermarkets, Inc., No. 23-519, 2026 WL 2529643 (D.N.J. Aug. 27, 2026) (Judge Claire C. Cecchi). Andrei Akopian worked for 21 years at a New Jersey ShopRite owned by Inserra Supermarkets, Inc., represented throughout by United Food and Commercial Workers Local 1262, until he was terminated in 2022. In his pro se pleadings Akopian has alleged a range of problems with his health and pension benefits administered through three employee benefit funds, which he has called the “ShopRite Welfare Fund,” the “Employers Pension Fund,” and the “Employers Health & Welfare Fund.” In his operative Fourth Amended Complaint Akopian has named a sprawling list of defendants, including Inserra, the union, individual officers and trustees, and the funds themselves, asserting twenty ERISA counts as well as claims under the FMLA and ADA. (Your ERISA Watch has covered two prior dismissals of Akopian’s complaints, in our December 4, 2024 and September 24, 2025 editions.) Nine separate defendant groups moved once again to dismiss Akopian’s Fourth Amended Complaint. We will cut to the chase by reporting that the court grouped Akopian’s twenty ERISA counts into six categories and dismissed all of them, largely for the same recurring defect the court had already highlighted in dismissing his prior complaints: conclusory, factually unsupported allegations. Akopian’s withdrawal liability counts failed because he never explained how Inserra supposedly “fractionalized” its operations, what assets were transferred, or any facts suggesting Inserra acted with the “principal purpose of escaping withdrawal liability.” His anti-cutback claim failed because, even accepting that a benefits transfer could constitute a plan amendment, he never identified what specific accrued benefit to which he might be entitled was actually reduced. Akopian’s three ERISA Section 510 interference subcounts – in which he alleged that his benefits were improperly “transferred,” that he was treated “differently,” and that a waiver form was sent on fraudulent letterhead – failed because none of his alleged facts suggested the requisite “specific intent” to interfere with his benefits as required under Third Circuit precedent. Akopian’s remaining ERISA theories fared no better. The COBRA notice claim failed because Akopian still did not clearly specify which plan coverage he sought to continue or which defendant served as the responsible plan administrator for that coverage. His ten breach of fiduciary duty, co-fiduciary, self-dealing, and prohibited transaction counts failed because none alleged a cognizable “loss to the plan” as a whole, as required under Mator v. Wesco Distribution, Inc. Akopian’s theory that his own termination deprived the plan of his future contributions was, at most, a personal grievance, not an injury to the plan, and his self-dealing allegations amounted to unsupported assertions that various defendants “controlled” unspecified plan assets to their advantage. Finally, his claims for failure to produce plan documents under ERISA Section 1024(b)(4) failed because he never alleged that he made a written request for any specific document. As for Akopian’s non-ERISA claims, they likewise met an unpleasant end – with one exception. Five of his six ADA counts were dismissed for failure to exhaust administrative remedies, but his core disability discrimination claim survived based on new allegations tying a post-termination remark to a company decisionmaker. (Akopian cited comments from individuals at both Inserra and his union suggesting that his mental health status “may have been discussed at the meeting and may have played a role in Inserra’s decision to fire Plaintiff.”) In the end, because Akopian had already filed five complaints without curing deficiencies identified by the court across three prior dismissals, the court held further leave to amend would be futile and dismissed all of the remaining counts, including all of the ERISA claims, with prejudice. As a result, this ruling likely ends our coverage of Akopian’s case.

Fifth Circuit

Taylor v. Vayyar Imaging U.S. Inc., No. 3:25-CV-0052-K, 2026 WL 2497345 (N.D. Tex. Aug. 25, 2026) (Judge Ed Kinkeade). William Taylor began working for Dele Health Care Tech, Inc. in 2021 and enrolled himself and his family in the company’s ERISA-governed health plan, insured by Blue Cross and Blue Shield of Texas. After Vayyar Imaging U.S. Inc. acquired Dele Health, Vayyar hired Total Administrative Service Corporation (TASC) to administer the plan, collect premium payments, and remit them to Blue Cross. When Vayyar terminated Taylor’s employment on September 11, 2023, Taylor elected to continue his coverage under COBRA and kept paying his monthly premiums to TASC, which accepted the payments and forwarded them to Blue Cross. In March of 2024, Taylor discovered Blue Cross no longer covered him. TASC confirmed it had received his payments but allegedly “did not disclose where the funds went.” TASC then allegedly requested that Blue Cross reinstate Taylor, but Blue Cross declined. Vayyar also told Taylor he and his family would be placed back on the plan, but in fact TASC had retroactively terminated his coverage effective November 15, 2023, without ever disclosing the termination or its retroactive effect. Meanwhile, TASC kept accepting his premiums. Taylor contends he is now owed $31,750 in medical expenses that should have been covered. Taylor sued Vayyar and Blue Cross, asserting a claim against Vayyar for interference with benefits under 29 U.S.C. § 1140 and claims against both defendants for violations of 29 U.S.C. § 1132(a)(1)(B) and COBRA’s notice provisions, 29 U.S.C. §§ 1161-66. Vayyar was never served and was later dismissed without prejudice. Blue Cross moved to dismiss for failure to state a claim, and to strike Taylor’s damages and jury trial demands. Taylor failed to respond to the motion, even with an extension. In March of this year the court warned Taylor that “Defendant Blue Cross’s arguments are well-taken” and advised him to amend his complaint. The court further warned Taylor that if he did not amend, and Blue Cross’ motion was granted, he would not be given leave to amend. Taylor did nothing in response, so the court proceeded to rule on Blue Cross’ motion. On the benefits claim, Blue Cross argued Taylor never identified any specific plan terms or benefit determinations at issue. The court agreed, ruling that Taylor’s complaint offered nothing beyond bare assertions that his coverage lapsed despite continued payments, that Blue Cross refused reinstatement, that Vayyar lied about reinstating him, and that he is owed a specific dollar figure in medical expenses. “Plaintiff provides no exhibits or additional detail in support of these allegations… He does not attempt to explain why Blue Cross chose not to reinstate his coverage when requested, nor does he attempt to detail the medical expenses he claims to now owe or the services those expenses relate to. Further, Plaintiff fails to allege that he attempted to gain access to Plan terms or documents.” As a result, Taylor’s claim failed to clear the plausibility bar and his benefit claim was dismissed. The COBRA claim also failed. The court explained that COBRA’s notice obligations run only against plan administrators, which in this case was TASC, not Blue Cross. Taylor’s complaint stated in “no uncertain terms” that TASC was the plan administrator and that Vayyar had retained TASC as its “Benefits Administrator.” Thus, Taylor’s own allegations foreclosed any COBRA claim against Blue Cross as a matter of law. The court thus granted Blue Cross’ motion to dismiss, and true to its earlier word, did so with prejudice. The court denied Blue Cross’ alternative motion to strike as moot.

Eleventh Circuit

Taylor v. Piedmont Healthcare, Inc., No. CV 124-019, 2026 WL 2476367 (S.D. Ga. Aug. 24, 2026) (Judge J. Randal Hall). Robert M. Taylor, III and a large group of current and former employees sued Piedmont Healthcare, Inc. and University Health Services, Inc. under ERISA, alleging that they were promised a Medicare Supplement or Medigap policy free of charge for life. The court’s previous orders dismissed Counts II and III of plaintiffs’ second amended complaint, leaving only Count I, a claim for vested benefits under 29 U.S.C. § 1132(a)(1)(B). (Your ERISA Watch covered this in our October 1, 2025 edition.) Plaintiffs then moved for permissive joinder to add additional individuals as plaintiffs, representing to the court that they were “not seeking to change their basic complaint but to add certain additional parties.” The assigned magistrate judge granted plaintiffs’ motion and allowed them leave to amend their complaint. However, plaintiffs then filed what they styled an “amended and recast” second amended complaint that added new factual allegations and exhibits, added a request for monetary damages under Count I, and resurrected a Count II for breach of fiduciary duty and equitable relief under 29 U.S.C. § 1132(a)(3). Defendants moved under Rules 12(f) and 12(b)(6) to strike the unauthorized new material and dismiss Count II outright. In this order the court granted their motion. On Count I, the court held that plaintiffs’ new allegations, new exhibits, and new damages demand exceeded the scope of the leave the court had granted. The court found “no explanation” was needed for its expectation that plaintiffs would act within the scope of the magistrate’s prior order. Although striking allegations from a pleading is a “drastic remedy” only employed when “required for the purpose[s] of justice,” the court found that standard met here and struck the new material from Count I. Count II fared no better because the court ruled that plaintiffs had no authorization to replead it. The court had already held that plaintiffs could not pursue “any claim, under an ERISA § 502(a)(3) theory of recovery,” and the joinder order did not disturb that ruling. Plaintiffs argued that the earlier order lacked a Rule 54(b) determination and therefore was not preclusive, but the court found this argument “immaterial.” The issue was not whether plaintiffs could achieve relief under a certain claim, but whether they could allege it at all, and here they did not have the court’s permission. The court thus dismissed Count II in its entirety and struck the allegations pleaded in support of it. The court ordered plaintiffs to file a conforming amended complaint reflecting its rulings as a standalone docket entry, which will then become the operative pleading.

Provider Claims

Third Circuit

Hudson Hospital OPCO, LLC v. Cigna Health & Life Ins. Co., No. 24-2830, __ F. App’x __, 2026 WL 2511311 (3d Cir. Aug. 26, 2026) (Before Circuit Judges Shwartz, Freeman, and Rendell). In July we reported on the Third Circuit’s unpublished opinion in this appeal. This is an amended reissuance of that decision, which is identical in every respect to the July decision with the exception of a single clarifying tweak to the final footnote. That tweak changes “the Hospitals do not appeal the District Court’s disposition of the state law claims, those claims are deemed abandoned” to “the Hospitals do not challenge the District Court’s disposition of the state law claims, those claims are deemed abandoned for purposes of this appeal.” For more information on the case, which involves three New Jersey-based hospitals attempting to recover underpayments for medical treatment, please check out our earlier coverage.

Ninth Circuit

Quickmed Diagnostic, Inc. v. Anthem Blue Cross Life & Health Ins. Co., No. 25-cv-2902-BAS-JAC, 2026 WL 2518005 (S.D. Cal. Aug. 25, 2026); Quickmed Diagnostic, Inc. v. Cigna Health Corp., No. 25-cv-3114-BAS-JAC, 2026 WL 2523416 (S.D. Cal. Aug. 26, 2026); Quickmed Diagnostic, Inc. v. United Healthcare Services, Inc., No. 25-cv-3132-BAS-JAC, 2026 WL 2556434 (S.D. Cal. Aug. 27, 2026); Quickmed Diagnostic, Inc. v. Aetna Health & Life Ins. Co., No. 25-cv-3131-BAS-JAC, 2026 WL 2556442 (S.D. Cal. Aug. 28, 2026) (Judge Cynthia Bashant). Quickmed Diagnostic, Inc. provided laboratory services during the COVID-19 pandemic. Quickmed administered tests to individuals covered by ERISA-governed health plans and by Medicare Advantage plans, and required each patient to sign an assignment of benefits before testing. As an out-of-network provider, Quickmed contends the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) obligated health plans to cover COVID-19 testing and to reimburse at the provider’s publicly listed cash price absent a negotiated rate. However, because the Ninth Circuit has ruled that providers do not have a private right of action directly under the CARES Act or FFCRA, Quickmed instead brought suit in these four cases as an ERISA assignee, asserting fourteen causes of action (including ERISA benefits and fiduciary duty claims, as well as an assortment of California state law theories) against various insurers for either underpaying or failing to pay benefit claims. In the lead action against Anthem Blue Cross, the court granted in part and denied in part defendants’ motion to dismiss. On standing, the court held Quickmed plausibly pled derivative standing through its patients’ assignments of benefits, rejecting Anthem’s reliance on anti-assignment clauses found in plan documents produced informally during earlier proceedings. Those documents differed from the exemplar plans identified by Quickmed in its complaint and in any event they could not be considered on a motion to dismiss. The court also rejected defendants’ exhaustion argument, finding that Quickmed’s allegations regarding the unpaid and underpaid claims were sufficient to show either exhaustion or futility. Quickmed’s benefits claim under 29 U.S.C. § 1132(a)(1)(B) presented an unusual question. Ordinarily a plaintiff must identify the plan provisions entitling it to benefits, but Quickmed identified no such language, relying instead on the FFCRA’s testing-coverage mandate and the CARES Act’s reimbursement formula. The court held that this was sufficient because these provisions were effectively incorporated into the plans by Congress. Quickmed’s fiduciary duty claim fared worse; the assignment language, by its terms, transferred only “insurance plan benefits,” not the broader right to sue for breach of fiduciary duty, so that claim was dismissed with leave to amend. The stand-alone FFCRA/CARES Act claim was dismissed without leave to amend because, as mentioned above, those statutes do not confer a private right of action. Quickmed’s state law claims were all held preempted under ERISA because each sought the same relief as the ERISA benefits claim, i.e., reimbursement at Quickmed’s cash rate. The court distinguished the Ninth Circuit’s recent decision in Healthcare Ally Management of California, LLC v. WSP USA, Inc., which allowed a negligent misrepresentation claim to survive preemption, because Quickmed’s claims were simply alternative mechanisms to collect the same benefits ERISA already provides a remedy for. As for Quickmed’s claims related to Medicare Advantage plans, the court held that those claims were “inextricably intertwined” with claims for Medicare benefits and therefore required administrative exhaustion, which Quickmed had not pled. The court thus dismissed those claims for lack of subject-matter jurisdiction, with leave to amend. Because the ERISA benefits claim survived, the court also allowed Quickmed’s request for declaratory relief to proceed. The Cigna ruling, issued the next day, incorporated the Anthem order’s reasoning wholesale and reached the identical claim-by-claim disposition, addressing only three Cigna-specific arguments. The court rejected Cigna’s contention that Quickmed failed to adequately identify the plans and claims at issue, holding that identifying a class of claimants over a defined period suffices at the pleading stage. It also rejected Cigna’s argument that the assignment clause did not name Quickmed because the clause covered the referring service’s “partner laboratories,” which included Quickmed. Finally, the court rejected Quickmed’s argument that Cigna had waived any Medicare-exhaustion defense by not briefing it, explaining that Medicare exhaustion is jurisdictional and thus can be considered by the court at any time. The pattern repeated in Quickmed’s two remaining related actions against Aetna and United Healthcare. In the Aetna case, the court again incorporated the Anthem order’s reasoning wholesale, and rejected two arguments made by Aetna that were the same as the first two made by Cigna. The United ruling was essentially identical to the Aetna ruling. As a result, all four cases will proceed, albeit in a pared-down fashion.