Schuyler v. Sun Life Assurance Co. of Canada, No. 23-498, __ F.4th __, 2025 WL 2349010 (2d Cir. Aug. 14, 2025) (Before Circuit Judges Livingston, Chin, and Robinson)

ERISA generally does not prohibit employees from waiving welfare benefits to which they might otherwise be entitled. However, the courts will often examine such waivers closely given ERISA’s stated purpose of protecting employees and their right to benefits. As a result, the issue of whether a waiver should be enforced is one that arises quite often, and can lead to diverging opinions, as evidenced by this week’s notable decision.

The plaintiff was Kristen Schuyler, who worked at Benco, a dental supply company. In 2015 she fell and suffered a traumatic brain injury. Schuyler was able to keep working at Benco for several years, but the symptoms from her injury grew worse over time, and as a result she was forced to take medical leave in May of 2019. She filed a claim shortly thereafter under Benco’s employee long-term disability (LTD) benefit plan, which was insured by defendant Sun Life Assurance Company of Canada. Sun Life denied Schuyler’s claim in October of 2019.

Meanwhile, Schuyler and Benco decided to part ways. Schuyler entered into a Separation Agreement and Release with Benco in December of 2019. The agreement stated that it was between Schuyler and Benco, as well as its “officers, directors, trustees, shareholders, partners, parents, subsidiaries, and any related or affiliated entities, employees, agents, attorneys, representatives, successors, assigns, and parties-in-interest[.]”

In the agreement Schuyler released and discharged “Benco and any and all of its parents, subsidiaries, related or affiliated entities…of and from any and all known and unknown actions…arising out of or in any way connected with Employee’s employment with Benco…including, but not limited to, any and all matters arising out or in any way connected with Employee’s employment with Benco…including, but not limited to, any alleged violation of [a series of statutes, including ERISA][.]”

In exchange, Benco made a severance payment of $25,000 to Schuyler.

Before entering into this agreement, Schuyler contacted Benco to clarify what it meant and how it would affect her claim for LTD benefits. In one communication Schuyler asked whether, if she appealed the LTD denial, she would be eligible for employment with Benco again. Benco’s attorney responded, “[T]he decision as to whether to appeal the Sun Life Denial is yours and yours alone. Sun Life is a separate and independent third-party entity in charge of LTD.”

In a second communication, Schuyler asked Benco to cooperate with any requests from Sun Life or the Social Security Administration regarding her claims for benefits, and to agree that the release “will not affect [her] ability to appeal the SunLife LTD claim nor file SSDI.”

Benco’s counsel responded that Benco would agree to cooperate and supply any requested information. Counsel added that Benco was “solely a conduit and/or provider of documentary information. Benco does not make any decisions relative to the SunLife Long Term Disability and/or SSDI which is a governmental determination…I am sure your lawyer told you this as part of his/her advice to you, but this agreement should have absolutely no effect on your ability to appeal your LTD or to file for SSDI.”

In January of 2020, Schuyler completed her LTD appeal with Sun Life. In August of 2020, Sun Life upheld its denial.

Schuyler sued. In an amended answer, Sun Life contended for the first time that Schuyler had waived any legal claims for LTD benefits pursuant to her agreement with Benco. The parties litigated the issue on cross-motions for summary judgment, after which the district court ruled in Sun Life’s favor, holding that Schuyler’s release in the severance agreement was knowing and voluntary. The court further ruled that the agreement, even though it was with Benco, applied to Sun Life as well, concluding that Sun Life was “an ‘affiliated’ or ‘related’ entity” or a “party-in-interest” under the contract. (Your ERISA Watch covered this decision in our March 15, 2023 edition.)

Schuyler appealed, represented by Kantor & Kantor. Schuyler asserted two arguments: (1) she did not knowingly and voluntarily release her claims against Sun Life; and (2) the agreement with Benco did not bar her claims against Sun Life.

The Second Circuit determined that it did not need to reach the second issue because it ruled in Schuyler’s favor on the first issue, holding that “the undisputed evidence establishes as a matter of law that Schuyler did not knowingly and voluntarily release her ERISA claims against Sun Life.”

The court began its discussion by noting that while employees can waive ERISA claims, “a waiver of an ERISA claim ‘is subject to closer scrutiny than a waiver of general contract claims’” because “individuals releasing ERISA claims ‘are relinquishing a right that ERISA indicates a strong congressional purpose of preserving.’” As a result, courts will only uphold a waiver under a “totality of the circumstances inquiry.” This inquiry involves consideration of a number of factors, many of which were outlined by the court previously in Laniok v. Advisory Comm. of Brainerd Mfg. Co. Pension Plan, 935 F.2d 1360 (2d Cir. 1991).

The Second Circuit’s inquiry compelled it to agree with Schuyler: “The undisputed evidence that the only counterparty to the Agreement expressly communicated to Schuyler that she would not be waiving her LTD claim by signing the Agreement, and that Schuyler understood that to be true, weighs heavily against the conclusion that Schuyler voluntarily waived her ERISA claims against Sun Life.”

The court emphasized that Benco’s counsel had informed Schuyler that Sun Life was “a separate and independent third-party entity in charge of LTD,” that “Benco does not make any decisions relative to SunLife Long Term Disability,” and “this agreement should have absolutely no effect on your ability to appeal your LTD[.]”

Sun Life contended that these communications were irrelevant because they only related to Schuyler’s ability to appeal Sun Life’s denial through the insurer’s internal review process, and made no representations regarding her right to file a subsequent lawsuit. However, the Second Circuit noted that the agreement included within the scope of its waiver all “claims…contracts, agreements [and] promises,” which meant that Sun Life could not meaningfully distinguish between internal appeals and lawsuits. “Either the Agreement released Schuyler’s LTD claim altogether, in which case Schuyler could neither appeal it administratively with Sun Life nor pursue it in court, or it didn’t, in which case she could do both.”

In short, “the undisputed evidence of Schuyler’s reasonable understanding when she executed the Agreement, formed in reliance on the undisputed clear assurances from the counterparty’s (Benco’s) legal counsel, demonstrates as a matter of law that, regardless of the proper legal interpretation of the Agreement, she did not knowingly waive her LTD claim against Sun Life when she signed the Agreement.”

The Second Circuit also addressed two other arguments made by Sun Life. First, Sun Life argued that Benco’s assurances were irrelevant because it could not override the clarity of the severance agreement. While the court acknowledged that such an argument “might be persuasive” if the issue was whether Schuyler “knowingly and voluntarily entered into the Agreement with Benco, or whether she knowingly and voluntarily waived her ERISA claims against Benco.” However, the question presented was “whether Schuyler knowingly and voluntarily waived her ERISA claim as to Sun Life.” The answer to this question was no “because Sun Life is neither a party to nor expressly mentioned anywhere in the Agreement.”

Sun Life argued that it was a released party because the agreement defined released parties as including Benco’s “related or affiliated entities” and “agents.” However, the Second Circuit was not convinced. Sun Life was “clearly distinct from and independent of Benco,” as reaffirmed by Benco’s counsel, and “there is arguably insufficient evidence that Benco exercises control over Sun Life’s administration of the LTD Plan to render Sun Life an ‘agent’ of Benco.”

The Second Circuit acknowledged that some district courts have held that employee benefit plans are “affiliates” and/or “related entities” under various release agreements. However, the court stressed that although such contractual interpretations “are thorny,” in this case “the question is not what the release in the Agreement means. The question is whether, notwithstanding Benco’s express assurance to Schuyler that the Release Provision did not extend to Sun Life, the Release Provision by its plain terms so clearly extends to Sun Life as to create a genuine dispute as to whether Schuyler knowingly and voluntarily relinquished her LTD claim against Sun Life. We conclude that it does not.”

The second argument by Sun Life related to the other Laniok factors. The court ruled that these factors do not “significantly move the needle in Sun Life’s direction.” The court admitted that Schuyler had significant education and business experience, had time to review the severance agreement, received legal advice, and participated in negotiating the agreement. However, none of these factors “would have undermined Schuyler’s confidence that she was not releasing her LTD claim against Sun Life.”

Furthermore, the court noted that one of the factors – the consideration paid by Benco for Schuyler’s release – weighed in her favor. After all, Schuyler’s potential LTD benefit payout was significant, and thus “it is unlikely that Schuyler would have knowingly relinquished her potential rights to these benefits for only $25,000.” Indeed, “[t]he fact that Benco, and only Benco, paid the agreed-upon severance payment to Schuyler reinforces the inference that Schuyler understood the Agreement to release only Schuyler’s claims against Benco and not any claims against Sun Life.”

As a result, the Second Circuit ruled that no reasonable jury “could conclude that Schuyler actually believed that she was waiving her claim for LTD benefits from Sun Life when she signed the agreement,” and thus she “didn’t knowingly and voluntarily waive her right to pursue her LTD against Sun Life.” The court therefore reversed the judgment below and remanded for further proceedings.

The panel was not unanimous, however. Chief Judge Debra Ann Livingston penned a dissent in which she criticized the majority for focusing on Schuyler’s “professed misunderstanding of an email exchange she had with Benco’s counsel prior to signing the Agreement” instead of on “the [Laniok] factors we ordinarily consider in cases like this[.]”

Judge Livingston concluded that the Laniok factors weighed against Schuyler because (a) Schuyler was “indisputably well-educated and has substantial practical business experience,” (b) she had 20 days to review the agreement, (c) Schuyler negotiated the terms of the agreement, (d) the release provision “is clear” because Sun Life was a “related or affiliated entity,” (e) she had an attorney review the agreement, and (f) the amount she received – $25,000 – was not insignificant because at the time she signed the agreement her LTD claim had been denied and thus there was no assurance that she would prevail.

Judge Livingston acknowledged Benco’s “assurances,” but emphasized that they were not repeated in the agreement. Furthermore, “There is a stark distinction between administratively appealing the denial of benefits with an insurance provider and filing a federal lawsuit under ERISA.” Thus, Judge Livingston concluded that Schuyler could waive one but not the other.

In short, Judge Livingston rejected “Schuyler’s self-serving and uncorroborated claim that she misunderstood” the scope of the agreement. “Every Laniok factor – as well as the totality of the circumstances, fairly considered – indicates Schuyler knew exactly the bargain she was making. I would therefore affirm the judgment in all respects.”

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

Attorneys’ Fees

Fourth Circuit

Kelly v. Altria Client Services, LLC, No. 3:23-cv-725-HEH, 2025 WL 2313210 (E.D. Va. Aug. 11, 2025) (Judge Henry E. Hudson). On March 26, 2025, the court granted summary judgment in favor of defendants Altria Client Service, LLC, the Altria deferred profit sharing plan for salaried employees, and Fidelity Workplace Services LLC in this individual ERISA suit brought by plaintiff Richard D. Kelly. (Your ERISA Watch covered that ruling in our April 2, 2025 edition.) The present motion before the court was one for attorneys’ fees filed by those same defendants. The Altria defendants requested an award of $124,045 while Fidelity separately requested an award of $98,090. In perhaps a first-of-its-kind post-Cunningham ruling (see Cunningham v. Cornell Univ., 145 S. Ct. 1020 (2025)), the district court awarded the defendants attorneys’ fees under Section 502(g)(1) specifically in order to “chill future plaintiffs from bringing (meritless) ERISA claims.” It is worth noting that the court had not found Mr. Kelly’s claims so meritless as to warrant dismissal at the pleadings. The court had instead allowed most of his causes of action to proceed, had allowed discovery into his allegations, and had ruled on summary judgment. Nevertheless, applying logic derived from the plaintiff-friendly Cunningham ruling (a decision clarifying the pleading requirements for prohibited transaction claims), the court concluded that a fee award was supported under the circumstances present in this lawsuit. The primary reason the court gave as its justification to award defendants attorneys’ fees was the fact that Mr. Kelly “neglected” to review and authenticate the transcripts of his phone calls with Fidelity. The court agreed with defendants that “a majority of this prolonged litigation could have been avoided” if Mr. Kelly had done so. Although the court recognized that Mr. Kelly did not have access to at least one of the call transcripts, it stated that this fact did not excuse his denial of the authenticity of the two transcripts he did have access to. Accordingly, the court said, “Plaintiff bears some culpability in unnecessarily protracting the length of litigation because he had access to the recordings of the November 2 calls prior to initiating the suit and he affirmed the transcripts’ accuracy in the earlier administrative appeal.” Other reasons the court chose to exercise its discretion to award defendants fees included the undisputed fact that Mr. Kelly could afford to pay a fee award and its opinion that cost shifting here will serve to deter similar illegitimate claims from being brought. Having decided to award attorneys’ fees, the court segued to assessing the amounts requested. It began with the Altria defendants. As an initial matter the court noted that Mr. Kelly’s action was only worth a few hundred thousand dollars in total and that the Altria defendants’ fee request alone amounts to nearly half of all of Mr. Kelly’s requested relief. Accordingly, the court sliced away at the fee amount. It took off $10,000 from the requested total that was tacked on for preparing the fee petition. It then deducted a further $29,455 for clerical work, work done on issues on which Altria was unsuccessful, and for time entries related to communication on motions to seal. In addition to these deductions, the court further reduced the requested amount by an additional 10% overall based on the Altria defendants’ degree of success. After applying these adjustments, the court awarded the Altria defendants a total of $76,131 in attorneys’ fees. The court then moved on to Fidelity’s fee request. Fidelity failed to provide an itemized list detailing the work done on the case. As a result, the court found that it could not award Fidelity attorneys’ fees in this order. However, the court gave Fidelity leave to renew its motion for attorneys’ fees “to file more particularized documentation,” presumably so that the court can award it fees too. Thus, Mr. Kelly will be on the hook for tens of thousands dollars – possibly over a hundred thousand – in attorneys’ fees to the parties he sued all because the court did not like his case and does not wish to see more like it.

Breach of Fiduciary Duty

First Circuit

Erban v. Tufts Med. Center Physicians Org., Inc., No. 22-cv-11193-PBS, __ F. Supp. 3d __, 2025 WL 2319055 (D. Mass. Aug. 12, 2025) (Judge Patti B. Saris). Plaintiff Lisa Erban is the widow of Dr. John Erban, an oncologist and hematologist who worked for over three decades with Tufts Medical Center. Dr. Erban’s career ended abruptly on August 14, 2019 after he went to the emergency room and was diagnosed with a malignant and highly aggressive brain tumor. He underwent surgery the next day and then took leave under the Family and Medical Leave Act. Dr. Erban’s illness prevented him from returning to his work. Because of this, Tufts terminated him on February 12, 2020. Sadly, Dr. Erban died from his illness on September 2, 2020, at the age of 65. This fiduciary breach lawsuit under ERISA stems from the denial of $801,000 worth of basic and supplemental life insurance benefits under Tufts’ policy with Hartford Life & Accident Insurance Company. Ms. Erban sued three defendants: her husband’s employer, Tufts Medical Center Physicians Organization, Inc., the named plan administrator, Tufts Medical Center Physicians Organization, and Tufts’ Director of Human Resources, Nicholas Martin, with whom the Erbans communicated about Dr. Erban’s benefits. Ms. Erban asserts two fiduciary breach claims under Section 502(a)(3). She advances two theories regarding defendants’ breach of fiduciary duty. First, she argues that they failed to inform her and her husband of the option to continue coverage under both the basic and supplemental life insurance policies by continuing premium payments to Hartford under the Continuation and Sickness or Injury provisions of the plan. Second, she alleges that defendants failed to adequately explain the conversion processes for converting the basic and supplemental life insurance policies to an individual policy under the conversion provision. Ms. Erban contends that she detrimentally relied on defendants’ omissions and material misrepresentations, entitling her to equitable estoppel. For relief, she seeks surcharge damages in the full amount of the policies, and relies on the Supreme Court’s decision in CIGNA Corp. v. Amara. The parties filed cross-motions for summary judgment, which the court ruled on in this decision. First, the court considered whether Ms. Erban showed that defendants acted as fiduciaries of the plan. It found she did. As an initial matter, it was undisputed that Tufts, as the named plan administrator, is a fiduciary of the plan. The court therefore focused on the contested question of whether Mr. Martin acted as a fiduciary. The court held that based on the record “no reasonable jury could find that Martin was acting in a purely ministerial capacity. Martin, as director of Tufts’ HR department, affirmatively assumed the role of guiding the Erbans through the benefits preservation process. He invited the Erbans to direct questions about Dr. Erban’s benefits to him and responded to detailed inquiries about the preservation of life insurance coverage. He provided forms, explained options, and made representations about what would happen when Dr. Erban’s employment ended.” This was particularly true as Mr. Martin was aware of Dr. Erban’s illness and his cognitive impairments. Given this knowledge and his role as the family’s point of contact for benefits communication and advice, the court concluded that Mr. Martin functioned as a fiduciary. Next, the court broke apart the two theories of fiduciary breach. It began with the continuation theory. Ms. Erban contended that defendants breached their fiduciary duties under ERISA by failing to inform her that she could continue her husband’s life insurance coverage after he stopped working due to illness because the plan allowed for continuation of coverage, even after termination under the Sickness or Injury provision, so long as premiums continued to be paid. The court agreed with Ms. Erban’s reading of the relevant provisions and determined that the plan unambiguously permits continuation of coverage for twelve months from the last day worked due to illness, regardless of whether an employee has been terminated. Moreover, the court agreed with Ms. Erban that because Mr. Martin never informed her and her husband “of the continuation option, including when Lisa Erban specifically asked Martin if she could ‘just private pay’ their current life insurance plan, Defendants breached their fiduciary duty to provide accurate and complete information.” Accordingly, the court entered judgment in favor of plaintiff on the continuation claim. The court then turned to the conversion claim as to the basic life insurance coverage. The record makes clear that Mr. Martin provided the family with written information conveying the conversion right, the conversion form, and the deadline to complete it. Because defendants provided the Erbans with accurate written materials informing them about conversion with regard to the basic life insurance policy, the court determined that defendants did not breach their duty in this regard. The court therefore entered summary judgment in favor of defendants with respect to the conversion claim for the basic life insurance. By contrast, the court entered judgment in favor of Ms. Erban as to the conversion claim for the supplemental life insurance policy as the undisputed facts demonstrate that defendants never clearly communicated to Ms. Erban either the existence of the supplemental life insurance or the need to convert that policy as well. Finally, the court pulled out its metaphorical machete to cut through the thorny issue of surcharge damages. The court wrote, “[t]he First Circuit has not addressed whether surcharge damages are available under § 502(a)(3), and other circuit courts are divided on the issue. The circuits that recognize surcharge as a form of relief under § 502(a)(3) rely on the Supreme Court’s decision in CIGNA Corp. v. Amara, 563 U.S. 421 (2011).” The court here also relied on Amara, which has never been overturned, to conclude that surcharge is an available form of equitable relief under (a)(3). Accordingly, the court held that Section 502(a)(3) permits ERISA plaintiffs to seek surcharge against a fiduciary and thus denied defendants’ motion for summary judgment on this point. For these reasons, Ms. Erban successfully convinced the court that defendants breached their fiduciary duties to her and her late husband regarding the continuation and supplemental life insurance conversion claims, and that surcharge damages in the full amount of the policies is available to her to remedy this harm. The court ended its decision by ordering the parties to brief the amount of damages to be awarded as equitable relief, so that the court may determine the appropriate amount.

Fourth Circuit

McDonald v. Laboratory Corp. of Am. Holdings, No. 1:22-CV-680, 2025 WL 2325016 (M.D.N.C. Aug. 12, 2025) (Judge Loretta C. Biggs). Plaintiff Damian McDonald sued defendant Laboratory Corporation of America Holdings (“LabCorp”) on behalf of himself and all others similarly situated alleging that LabCorp breached its fiduciary duty of prudence under ERISA by failing to control costs and selecting imprudent investments options in its retirement savings plan. The court held a bench trial on the matter over three days last May. This decision constitutes the court’s findings of fact and conclusions of law. The court ultimately concluded that the class failed to meet its burden to establish that LabCorp breached its duty of prudence. The court found “that LabCorp engaged in a prudent process in managing its recordkeeping fees and monitoring the Plan’s investment shares.” Accordingly, the court ruled in favor of LabCorp and against plaintiffs in this decision. Among other shortcomings, the court concluded that the trial testimony of plaintiff’s experts, Al Otto and Ty Minnich, were of “limited probative value” and “not persuasive to this Court.” In particular, the court viewed both experts as offering “sweeping statements about the price tendencies of recordkeeping fees,” and relying “on approximations, generalities, and personal examples rather than basing [their] conclusions on demonstrable data.” In contrast, the court found the testimony of defendant’s expert, Steven Gissiner, probative and persuasive, and more grounded in concrete formulations particular and specific to this case. The court then explained that in its view the record clearly demonstrated that LabCorp followed standard industry practices in overseeing the plan by taking actions like conducting benchmarking studies, hiring outside advisory firms, and meeting regularly to discuss recordkeeping and investment decisions. The court disagreed with plaintiffs that LabCorp fell short in its duties by failing to seek competitive bids for service providers. Instead, the court agreed with Mr. Gissiner that “there are other reasonable, appropriate methods to assess [fee] reasonableness” other than requests for proposals (“RFPs”). Mr. Gissiner testified that “the notion that you have to conduct an RFP to assess and determine whether fees are reasonable is…very much an outdated viewpoint of the market.” The court further highlighted the fact that LabCorp engaged in negotiations with its recordkeeper, Fidelity, twice during the class period following benchmarking studies. Thus, the court found that plaintiffs failed to prove that LabCorp breached its duty of prudence regarding the recordkeeping fee allegations. Moreover, the court determined that plaintiffs also could not establish damages and prove that the plan suffered losses due to the purported excessive recordkeeping fees. The bad news kept coming for plaintiffs when the court addressed their share class claims. There the court held that during the relevant period the committee adopted the lower-cost share classes. But the court stated that even assuming plaintiffs proved that LabCorp breached its duty of prudence, they again could not prove damages because their expert, Mr. Otto, based his damages calculation purely on his own experience. “The evidence presented by Plaintiffs’ – that the Plan lost millions because of alleged imprudent investment decisions – was not credible, and Plaintiffs failed to prove that the damage calculations are anything more than pure speculation.” Thus, the court ruled entirely in LabCorp’s favor and concluded that it acted prudently in its role as plan fiduciary.

Fifth Circuit

Cina v. Cemex, Inc., No. 4:23-cv-00117, 2025 WL 2294331 (S.D. Tex. Aug. 8, 2025) (Magistrate Judge Andrew M. Edison). Plaintiff James Cina is a participant in the Cemex, Inc. Savings Plan. Mr. Cina brings this putative class action against Cemex, Inc. on behalf of the more than 9,000 Cemex employees who participated in the plan at any time between January 3, 2017 and the present alleging that Cemex violated its fiduciary duties under ERISA by failing to monitor, negotiate, or reduce the amount of direct and indirect compensation paid to the plan’s recordkeeper, Fidelity Investments International. Cemex moved to dismiss the case. It argued that Mr. Cina based his claims on pure speculation and unsupported statements, and that he failed to offer meaningful benchmarks against which to compare the challenged costs. In this decision the court disagreed and denied the motion to dismiss. As an initial matter, the court noted that the Fifth Circuit is not among the circuit courts that have adopted a “meaningful benchmark” pleading standard in ERISA fiduciary breach cases. Nevertheless, even assuming that a plaintiff must meet this standard to state a plausible fiduciary breach claim, the court concluded that Mr. Cina had done so here by comparing the fees the Cemex Savings Plan paid to two other plans which had selected the same services, were similar in terms of asset size and their number of participants, and had also employed Fidelity as their recordkeeper. The court found that these two plans offered like-for-like comparisons to the Cemex plan and provided strong support for the allegations that Cemex failed in its fiduciary obligations. Accordingly, the court concluded that the allegations here were “more robust than in other cases where district courts granted motions to dismiss breach of fiduciary duty claims for failure to provide meaningful benchmarks.” Moreover, the court disagreed with Cemex that Mr. Cina’s failure to allege a specific amount of indirect fees Fidelity received through float compensation and revenue sharing amounted to a fatal flaw mandating dismissal. To the contrary, it held that because Mr. Cina does not have access to these figures, he does not need to plead details about them, particularly as his complaint when read as a whole tells a plausible and compelling story from which fiduciary misconduct can be inferred. In sum, the court found that Mr. Cina “painted a picture that supports a plausible inference that Cemex imprudently allowed the Plan to pay an unreasonable amount in recordkeeping fees to Fidelity.” As a result, the court determined that Mr. Cima stated plausible claims and so denied Cemex’s motion to dismiss.

Seventh Circuit

Case v. Generac Power Sys., Inc., No. 21-cv-1100-pp, 2025 WL 2336859 (E.D. Wis. Aug. 13, 2025) (Judge Pamela Pepper). Plaintiff Dereck Case sued Great Power Systems, Inc. and the benefit committee of its 401(k) plan on behalf of himself and a class of similarly situated individuals alleging that defendants breached their fiduciary duties of prudence and monitoring under ERISA by failing to control plan costs. Defendants moved to dismiss the complaint for failure to state a claim. They advanced four arguments in favor of dismissal: “(1) the comparator plans identified in the complaint are not sufficiently comparable in size and assets to the defendants’ plan to create a meaningful benchmark of reasonable fees; (2) the plaintiff uses the plan’s average fees over eight years as a benchmark, without acknowledging that the plan’s fees decreased significantly during that period; (3) the complaint compares only a subset of fees charged by the comparator plans to the total fees charged by the defendants’ plan; and (4) the defendant did not err by failing to conduct competitive bidding for RKA services because there is no requirement to do so under ERISA.” The court was persuaded by defendants’ arguments and granted their motion, dismissing the case with prejudice. In particular, the court agreed with defendants that it is not possible to infer they paid excessive recordkeeping fees based on plaintiff’s allegations because his complaint compared defendants’ average fees over the class period to annual fees correlating with specific years for each of the comparator plans. The court therefore felt that these comparisons did not create a meaningful benchmark, and without a meaningful benchmark Mr. Case’s allegations of fiduciary misconduct were not plausible. The court then explained that it would dismiss the case with prejudice because the operative complaint was Mr. Case’s fourth version, meaning he had already had several opportunities to fine-tune his pleadings.

Class Actions

Eighth Circuit

Kloss v. Argent Trust Co., No. 23-301 (DWF/SGE), 2025 WL 2374070 (D. Minn. Aug. 15, 2025) (Judge Donovan W. Frank). Plaintiff Jessica Kloss, as a representative of a class of similarly situated individuals, and on behalf of the TPI Hospitality, Inc. Employee Stock Ownership Plan, moved for preliminary approval of class action settlement under Rule 23. The court granted Ms. Kloss’s motion without any unnecessary hassle or embellishment. The decision was so bare that even the terms of the agreed-upon settlement were not discussed. Instead, the court stated simply that for preliminary purposes it found the settlement to fall within the range of reasonableness and to be “fair, reasonable, and adequate, subject to further consideration at the Fairness Hearing.” The court then quickly gave preliminary certification to the proposed settlement class of participants and beneficiaries of the plan during the relevant period, and for settlement purposes appointed Ms. Kloss as class representative, and the law firms Feinberg Jackson Worthman & Wasow LLP and Nichols Kaster, PLLP as class counsel. The appointment of Simpluris as settlement administrator was also approved by the court. The court set the fairness hearing for November 21, 2025, and instructed class members that any objections must be filed 21 days before that date. It then approved the form and substance of the proposed class notice and noted that defendants sent the required Class Action Fairness Act notice. Finally, class counsel was advised that their application for attorneys’ fees, expenses, and class representative service award should be filed no later than 45 days prior to the date of the fairness hearing. Thus, with no fuss and no muss, the court granted plaintiffs’ motion and preliminarily blessed the settlement.

Disability Benefit Claims

Fifth Circuit

Bellace v. Hartford Life & Accident Co., No. 3:24-CV-00136-K, 2025 WL 2345157 (N.D. Tex. Aug. 13, 2025) (Judge Ed Kinkeade). Plaintiff Kimberly Bellace is a 34-year-old former mechanical engineer who was approved for long-term disability benefits by the insurer of her employer’s disability benefit plan, Hartford Life and Accident Insurance Company, after she underwent spinal surgery in July of 2016. This action stems from Hartford’s termination of Ms. Bellace’s disability benefits in May of 2020, when Hartford concluded that despite her pains Ms. Bellace could nonetheless work six-hour days in a sedentary role with modest limitations, and therefore could earn 60% of her pre-disability earnings, such that she no longer qualified for benefits under the policy. Ms. Bellace challenges that decision in this lawsuit. Before the court were the parties’ cross-motions for judgment on the administrative record under Rule 52. The court concluded in this decision, applying de novo review of the administrative record, that Ms. Bellace could not establish by a preponderance of the evidence that her spinal conditions prevented her from working in any reasonable occupation for which she was fitted due to illness or injury as required by the policy. The court took particular note of the fact that two independent physicians assessed that despite Ms. Bellace’s pain she could perform sedentary work with some modest accommodations. Conversely, the court viewed the contradictory opinion of Ms. Bellace’s orthopedic surgeon skeptically, writing that his “assertions about Ms. Bellace’s pain-related limitations [are] conclusory rather than well-supported.” The court thus afforded the surgeon’s assessment of Ms. Bellace’s condition little weight. Moreover, the court highlighted the fact that Ms. Bellace’s pain management specialist did not opine that Ms. Bellace was unable to work. The court therefore found that as of the date of the termination Ms. Bellace could find work in an occupation she is reasonably qualified to perform with her education and background and that she could perform regular, albeit part-time work, despite her medical conditions. Therefore, the court agreed with Hartford that as of May 2020, Ms. Bellace was ineligible for continued coverage under the policy. Accordingly, the court entered judgment in favor of Hartford.

Sixth Circuit

Engweiler v. Howmet Aerospace Inc., No. 1:24-cv-975, 2025 WL 2318464 (W.D. Mich. Aug. 12, 2025) (Judge Hala Y. Jarbou). Plaintiff Adam Engweiler filed this action against Howmet Aerospace, Inc. under ERISA Section 502(a)(1)(B) in response to the termination of his long-term disability benefits in December 2023 under the “any gainful occupation” definition of disability for beneficiaries out of work for longer than twenty-four months. Before his back pain worsened to the point that he felt he could no longer work a full-time job, Mr. Engweiler was employed as an engineer at Howmet. But in 2021 he stopped working after his spinal problems intensified and a surgical intervention failed to alleviate his symptoms. Interestingly, just months before Mr. Engweiler’s disability benefits were terminated, the Social Security Administration deemed him disabled from all occupations for which he was qualified, including sedentary ones. Perhaps recognizing the sensitivity of this timing, the administrator of Howmet’s disability plan, Hartford Life and Accident Insurance Company, acknowledged in the denial letter sent to Mr. Engweiler that he was recently awarded Social Security disability benefits, but noted that the Social Security Administration has different criteria from its own and is required to give full deference to his treating physicians. By contrast, Hartford relied on the opinions of the doctor who performed an independent examination on Mr. Engweiler as well as the opinions of its own file-reviewing doctor, which were premised in part on that examination. Relying on these opinions over the opinions of Mr. Engweiler’s doctors, Hartford concluded that Mr. Engweiler could perform certain sedentary occupations for which he was reasonably suited. Mr. Engweiler challenged that decision in this action and moved for judgment on the administrative record. In this order the court found that Hartford did not act arbitrarily or capriciously in terminating Mr. Engweiler’s benefits. It therefore denied his motion for judgment and dismissed the case. The court held that Hartford had considered all of the medical evidence before it and reached a conclusion supported by that evidence. It said that “[n]either during the administrative process nor in his briefing in this Court does Engweiler point to any evidence of his disability that Hartford completely ignored.” Rather, the court found that Hartford could point to substantial evidence in the medical record in support of its decision, and therefore concluded that it was reasonable for Hartford to regard the opinions of Mr. Engweiler’s treating providers as less convincing than the opinions of its own reviewing doctors. Furthermore, the court determined that Hartford had offered clear explanations as to why “it found its contract physicians’ assessments of the functional limitations imposed by Engweiler’s back pain more credible than those of his medical providers.” Finally, the court held that Hartford’s termination of Mr. Engweiler’s benefits so shortly after the Social Security Administration ruled in his favor was not capricious because Hartford devoted considerable time in its denial letter explaining why it did not regard the SSA’s conclusions as decisive. For these reasons, the court found that Hartford’s decision was reasonable, supported by substantial evidence, and not marred by any indicia of arbitrariness. The court therefore denied Mr. Engweiler’s motion for judgment on the administrative record and ordered that the action be dismissed.

McIntyre v. First Unum Life Ins. Co., No. 1:22-CV-265-KAC-CHS, 2025 WL 2375389 (E.D. Tenn. Aug. 15, 2025) (Judge Katherine A Crytzer). Before the court was plaintiff Brooke McIntyre’s objections to Magistrate Judge Christopher H. Steger’s report and recommendation recommending the court grant judgment on the administrative record in favor of defendants First Unum Life Insurance Company and Unum Group Corp. in this ERISA action challenging Unum’s denial of Ms. McIntyre’s claims for long-term disability and life insurance without premiums benefits. Ms. McIntyre applied for these benefits after she began experiencing post-concussion symptoms related to a 2020 car accident. The Magistrate Judge concluded that defendants considered the totality of the medical evidence and correctly concluded that it did not support a finding of disability under the policies because there was evidence of improvement in the medical records which demonstrated that Ms. McIntyre was not continuously disabled throughout the 180-day elimination period. The court overruled Ms. McIntyre’s objections to the report, adopted it in full, and granted judgment in favor of the Unum defendants in this decision. Contrary to Ms. McIntyre’s assertions, the court found that the report correctly concluded that defendants fulfilled their fiduciary obligations to provide a full and fair review of Ms. McIntyre’s claim and that Ms. McIntyre could not show that she was continuously disabled throughout the elimination period based on the objective medical evidence presented. The court therefore overruled her objections and, as the Magistrate Judge recommended, affirmed Unum’s denial of benefits.

Ninth Circuit

Black v. Unum Life Ins. Co. of Am., No. 22-cv-04378-AMO, 2025 WL 2337091 (N.D. Cal. Aug. 13, 2025) (Judge Araceli Martínez-Olguín). On January 29, 2020, plaintiff Leslie Black fell, injured her neck, shoulder, and collarbone, and hit her head. She then initiated a claim for short-term disability benefits with Unum Life Insurance Company of America, which Unum approved. When the short-term disability benefits were ending, Unum commenced an investigation into Ms. Black’s long-term disability eligibility. Because Ms. Black’s claimed disability arose within the first year of her coverage under the policy, Unum evaluated whether the claimed disabling conditions were excluded, either in whole or in part, under the policy’s pre-existing conditions limitation. It found they were and denied Ms. Black’s claim for benefits. After exhausting her administrative remedies, Ms. Black sued Unum under ERISA to challenge its adverse determination. The parties each moved for judgment in their favor under Federal Rule of Civil Procedure 52. The court issued judgment in favor of Unum in this decision. It concluded that Ms. Black’s disabling conditions were diagnosed and treated during the look-back period and that she took prescribed medicines for these issues. During the relevant period, the court noted that Ms. Black was diagnosed with cervical radiculopathy, left shoulder adhesive capsulitis, Ehlers-Danlos Syndrome, scoliosis, and chronic pain, stiffness, and weakness of the shoulder and neck. The court further found that the disability for which Ms. Black seeks benefits was “‘caused by, contributed to by, or result[ed] from’ these pre-existing conditions. The effect of these conditions on Blac’’s neck and shoulder cannot be dismissed ‘as merely related to the injury’ she suffered as a result of the fall in January 2020. Rather, they are a ‘substantial catalyst’ for the exacerbation and recurrence of conditions she has suffered from during the relevant look back periods and even decades prior. These conditions therefore substantially contributed to the neck and shoulder issues that ground Black’s LTD claim.” Accordingly, the court determined that “the record establishes, more likely than not, that those conditions would have persisted even if she had not suffered a fall in January 2020” and as a result Unum appropriately declined to award long-term disability benefits under the plan based on the policy’s pre-existing conditions limitation. For these reasons, the court granted Unum’s motion for judgment and denied Ms. Black’s motion for judgment.

Eleventh Circuit

Walker v. Life Ins. Co. of N. Am., No. 24-13066, __ F. App’x __, 2025 WL 2327989 (11th Cir. Aug. 13, 2025) (Before Circuit Judges Lagoa, Abudu, and Anderson). Plaintiff-appellant Alana Walker filed an appeal with the Eleventh Circuit Court of Appeals after the district court concluded that defendant Life Insurance Company of North America’s (“LINA”) decision to terminate her long-term disability benefits was not de novo wrong and granted judgment on the administrative record in its favor. “On appeal, Walker argues that the district court erred because she had presented objective evidence of her disability and the district court discounted that evidence, that the opinions of the consulting doctors were insufficient to undermine the evidence she presented of her disability, that there are no jobs in the national economy that she could perform that would meet the salary requirements set in the policy, and that the award of Social Security benefits was persuasive evidence of disability.” The court of appeals rejected each of these arguments in turn in this unpublished per curiam decision. First, the court of appeals stated that the district court did not commit clear error when it found LINA’s assessment of Ms. Walker’s disability more persuasive than Ms. Walker’s doctors and the results of her functional capacity exam. The Eleventh Circuit noted that the three physicians hired by LINA examined all of Ms. Walker’s medical records thoroughly, explained the reasons they drew the conclusions they did, and relied on the results of the independent medical exam LINA conducted which conflicted with the results of the functional capacity exam. And while all of LINA’s consulting doctors recognized that Ms. Walker’s physical conditions subject her to some restrictions, the court of appeals determined that the district court acted appropriately in finding that these restrictions would not preclude Ms. Walker from performing the sedentary job of a financial manager, a job LINA’s vocational expert identified as one that Ms. Walker could perform. Speaking of that position, the appeals court further determined that the lower court had not erred when it found that Ms. Walker was qualified for this job and that it met the requirements set out in the policy. Finally, the Eleventh Circuit held that the district court provided sound and cogent reasons for discounting the persuasiveness of the Social Security Administration’s decision. On these grounds the court of appeals affirmed the district court’s decision.

ERISA Preemption

Seventh Circuit

Northwestern Memorial Healthcare v. Anthem Blue Cross of Cal., No. 1:24-CV-02941, 2025 WL 2306814 (N.D. Ill. Aug. 11, 2025) (Judge Edmond E. Chang). When plaintiff Northwestern Memorial Healthcare received payments that were roughly half the amount it billed to Anthem Blue Cross of California for medical treatment it provided to nine Blue Cross-insured patients, Northwestern Memorial sued Anthem. In its lawsuit the provider claims that Anthem breached their implied contract and unjustly benefitted from the care Northwestern provided to these patients. Anthem moved to dismiss the action for failure to state a claim for relief. The court granted in part and denied in part the motion to dismiss. Before assessing the implied contract and quantum meruit claims, the court addressed the threshold issue of ERISA preemption. It concluded that Northwestern’s state law claims do not require the court to interpret the terms of the health insurance plans. The court reasoned that before Northwestern Memorial “treated the nine Anthem patients, Northwestern sought pre-authorization from Anthem for all of the planned care. And Anthem provided that authorization, thereby confirming that all of the expected treatment was medically necessary and covered by the patients’ Anthem health insurance plans. That means that there is no remaining question about whether the provided treatment was within the scope of the patients’ insurance plans. That question has already been answered by the parties’ conduct – at least as alleged by Northwestern and as the premise of its specific claims. Thus, there is no need for the Court to independently dig into the Anthem plans’ terms to make a determination about treatment coverage. So deciding Northwestern’s state-law claims would not require interpretation or application of the terms of the ERISA plans.” Based on this rationale that preauthorization resolved the medical necessity question and removed the need to examine plan terms, the court concluded that the two state law claims do not relate to ERISA and are therefore not preempted by the federal statute. However, Northwestern was not entirely out of the woods after the court came to this conclusion. The court still needed to assess the two state law claims. Ultimately, it concluded that Northwestern’s breach of implied contract claim could not survive because Northwestern Memorial already had a pre-existing contractual duty to treat Anthem’s patients. That being said, the court denied Anthem’s motion to dismiss the quantum meruit claim. Regarding that claim, the court found that there was no written contract directly between the parties and that the complaint plausibly lays out the ways that Northwestern conferred several benefits upon Anthem. As a result, the court ordered discovery to commence as to the quantum meruit claim. 

Ninth Circuit

Beach Dist. Surgery Center v. Computacenter U.S. Inc., No. CV 25-5221-E, 2025 WL 2294329 (C.D. Cal. Aug. 8, 2025) (Magistrate Judge Charles F. Eick). Plaintiff Beach District Surgery Center is a medical provider in Los Angeles, California. On May 7, 2025, the surgery center filed a complaint in California state court against the plan administrator of an ERISA-governed health plan, defendant Computacenter U.S. Inc., alleging claims of negligent misrepresentation and promissory estoppel after the plan made a payment of just $2,260.48 on a bill for $61,760.00, which it alleges was not in keeping with telephonic promises made regarding the rate of payment for the medical services it rendered. Defendant removed the action, asserting that ERISA completely preempts the state law causes of action. Beach District Surgery Center disagreed and filed a motion to remand its action back to state court. The court granted the motion to remand in this decision. It concluded that plaintiff’s action was on all fours with the Ninth Circuit’s decision in Marin General Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941 (9th Cir. 2009). “The present case is legally indistinguishable from the Ninth Circuit’s decision in Marin. There, as here, the plaintiff pled only state law claims arising from the defendant’s alleged telephonic promise regarding the rate to be paid for medical services rendered by the plaintiff to a patient covered by an ERISA plan. In ruling that complete preemption did not apply, the Marin Court reasoned that, under the first prong of the Davila test, that plaintiff’s state law claims could not have been brought under ERISA because such claims arose ‘out of the telephone conversation’ and were based on an ‘alleged oral contract’ between the plaintiff and the defendant. The Marin Court also reasoned that, under the second prong of the Davila test, the plaintiff’s claims were based on an ‘independent’ legal duty under state law arising out of the same telephone conversation.” The court therefore concluded that the reasoning in Marin applied neatly here and required the same finding. Accordingly, the court agreed with plaintiff that its action must be remanded to state court.

Pension Benefit Claims

Ninth Circuit

Nilsen v. Teachers Ins. and Annuity Association of Am., No. 24-cv-08306-BLF, 2025 WL 2337123 (N.D. Cal. Aug. 13, 2025) (Judge Beth Labson Freeman). Plaintiff Karina Nilsen sued Teachers Insurance and Annuity Association of America (“TIAA”), College Retirement Equities Fund (“CREF”), and TIAA-CREF Individual and Institutional Services, Inc. (collectively, “TIAA-CREF”), along with her late husband Robert Moffat’s ex-wife Ruth Taka, seeking to recover past and future benefits under two annuity contracts obtained by Mr. Moffat pursuant to an ERISA pension plan maintained by his former employer, Stanford University. The benefits that Ms. Nilsen believes she is entitled to are being paid to Ms. Taka, who was married to Mr. Moffat at the time of his retirement from Stanford in 1993, and is the named beneficiary of the joint and survivor benefits. Ms. Nilsen maintains that her husband received a Qualified Domestic Relations Order (“QDRO”) in 2010 wherein the state court designated her as the alternate payee of the annuities at issue. Ms. Nilsen argues that Ms. Taka waived all rights to the annuity contracts when she and Mr. Moffat divorced. In her complaint, Ms. Nilsen asserts three causes of action: a claim for benefits and clarification of rights, a claim for breach of fiduciary duty, and a claim for declaratory relief. The TIAA-CREF defendants moved to dismiss all three claims. First, TIAA-CREF argued that Ms. Nilsen’s claim for benefits and clarification of rights under Section 502(a)(1)(B) is foreclosed by the Ninth Circuit’s decision in Carmona v. Carmona, 603 F.3d 1041 (9th Cir. 2010). In Carmona the Ninth Circuit held that “the surviving spouse benefits irrevocably vest in the current spouse when the plan participant retires.” The court agreed with defendants that it is clear on the face of the complaint that Mr. Moffat and Ms. Taka were married on the annuity start date, making her the surviving spouse entitled to the qualified joint and survivor annuity benefits at issue. Moreover, the complaint does not allege that Ms. Taka waived her entitlement to the joint and survivor annuity benefits in writing before the annuity start date. As for the QDRO issued after Mr. Moffat’s retirement, the court again agreed with TIAA-CREF that under Carmona “a QDRO issued after the participant’s retirement may not alter or assign the surviving spouse’s interest to a subsequent spouse.” Accordingly, the court granted the motion to dismiss the first cause of action. The court also dismissed the breach of fiduciary duty claim under ERISA, reasoning that because Ms. Nilsen is not the payee of the annuities, she “is a stranger to the annuity contracts and thus is not owed any fiduciary duties by TIAA-CREF.” Finally, the court dismissed the derivative claim seeking declaratory relief. For these reasons, the court granted the motion to dismiss. It ended its decision by clarifying that the dismissal was without leave to amend, as the Ninth Circuit’s holding in Carmona makes it impossible for Ms. Nilsen to amend her pleading to allege a viable ERISA claim grounded in TIAA-CREF’s failure to pay her the annuity benefits.

Pleading Issues & Procedure

Second Circuit

East Coast Advanced Plastic Surgery, LLC v. Cigna Health & Life Ins. Co., Nos. 25 Civ. 1686 and 25 Civ. 255 (PAE), 2025 WL 2371537 (S.D.N.Y. Aug. 14, 2025) (Judge Paul A. Engelmayer). This decision ruled on parallel motions to dismiss in two related healthcare cases. The first action was filed by Cigna Health and Life Insurance Company against East Coast Advanced Plastic Surgery, LLC, a New-Jersey based medical practice that specializes in post-mastectomy breast reconstruction surgery. In its lawsuit Cigna alleges that the provider has engaged in fraudulent billing practices which include fee forgiveness, fraudulent claim bundling, duplicative billing for claims, and billing for services that are medically unnecessary. Cigna maintains that its internal investigation of East Coast Advanced Plastic Surgery’s billing practices has revealed the provider’s allegedly unlawful actions have caused at least $8,564,795.58 in losses to Cigna and the Cigna Plans between January 1, 2025 to the present. Cigna brings claims under both ERISA and state law. The second action was filed by East Coast Advanced Plastic Surgery along with Marcella Livolsi, a participant in a Cigna-administered ERISA healthcare plan who received breast reconstruction surgery at East Coast Advanced Plastic Surgery’s facility. These parties sued both Cigna and the health insurance intermediary Multiplan, Inc. asserting claims under ERISA, the federal No Surprises Act, and under state law. As noted, the parties each moved for dismissal of the other’s lawsuit. The court granted in part and denied in part the provider’s motion to dismiss Cigna’s complaint and granted in full Cigna and Multiplan’s motions to dismiss East Coast Advanced Plastic Surgery and Ms. Livolsi’s action. The court tackled the motion to dismiss the Cigna case first. As an initial matter, the court found that Cigna has standing to bring its ERISA claim for equitable relief as well as its state law causes of action because it alleges not only that the ERISA plans were harmed, but that it was harmed directly by the provider’s allegedly fraudulent billing practices. The court then discussed whether to dismiss any of the causes of action for failure to state a claim. It declined to dismiss the claim under ERISA. The court determined that Cigna plausibly pleads it is an ERISA fiduciary for each of the plans at issue and that the provider’s alleged fee forgiving practices are in violation of the terms of the plans. Moreover, the court determined that Cigna is seeking appropriate equitable relief under Section 502(a)(3) and that its complaint properly pleads each element required to pursue this relief. In addition to denying the motion to dismiss the ERISA claim, the court also denied the motion to dismiss the fraud, negligent misrepresentation, and unjust enrichment claims. The court concluded that the complaint meets Rule 9(b)’s heightened pleading standard for fraud claims, and that the unjust enrichment claim can go ahead for now as an alternative theory. However, the court granted the provider’s motion to dismiss Cigna’s conversion, Connecticut General Theft Act, and Connecticut Unfair Trade Practices Act claims, as well as a claim under the Declaratory Judgment Act. The court then turned to Cigna and Multiplan’s motions to dismiss Ms. Livolsi and East Coast Advanced Plastic Surgery’s complaint. To begin, the court agreed with Cigna that although Ms. Livolsi framed her ERISA claim as a breach of fiduciary duty claim, the relief she seeks, namely restitution, is not truly equitable in nature. “Thus, despite Livolsi’s efforts to ‘couch the nature of her claim in equitable terms to allow relief under§ 502(a)(3),’ the ‘gravamen of this action remains a claim for monetary compensation and that, above all else, dictates the relief available.’” Having determined that the relief Ms. Livolsi sought was unavailable under Section 502(a)(3), the court dismissed the claim. It then dismissed East Coast Advanced Plastic Surgery’s claims under the No Surprises Act. Quite simply, the court held that the No Surprises Act contains no private right of action, either express or implied, to enforce independent dispute resolution awards. Further, the court stated that the provider’s request for a declaration that Cigna violated the No Surprises Act was also not viable because the Declaratory Judgment Act does not provide an independent cause of action. Finally, the court declined to exercise supplemental jurisdiction over plaintiffs’ state law causes of action. For these reasons, the court granted in part and denied in part the motion to dismiss the Cigna action and granted in whole the motion to dismiss the provider’s lawsuit. Every claim that was dismissed was dismissed without prejudice.

Third Circuit

Genesis Lab. Management LLC v. United Healthcare Services, Inc., No. 21cv12 057 (EP) (JSA), 2025 WL 2308528 (D.N.J. Aug. 11, 2025) (Judge Evelyn Padin). Plaintiff Genesis Laboratory Management LLC filed this action against defendants United HealthCare Services, Inc. and Oxford Health Plans, Inc. for alleged failure to fully reimburse it for COVID-19 testing and other medical services it provided to defendants’ insureds, plan members, and beneficiaries. Genesis’s complaint alleged claims under ERISA and state law, including contract claims, tort claims, and claims alleging violations of New Jersey’s insurance regulating statutes. Defendants moved to dismiss. The court granted their motion in part and denied it in part, dismissing all state law claims and allowing the ERISA claims to proceed only as to plans from United members whose assignments of benefits were effective at the time the lawsuit commenced. Genesis moved for reconsideration. In this brief decision the court denied its motion, concluding that it failed to set forth a valid basis for reconsideration. First, the court declined to reverse its finding that assignments of benefits executed after the commencement of litigation cannot retroactively confer standing under ERISA. The court stated that Genesis offered no controlling decision of law that it had overlooked nor any intervening change in controlling law in support of its arguments, and instead was using its motion for reconsideration as a vehicle to recapitulate arguments the court already considered and rejected before rendering its decision. Next, the court refused to disturb its previous findings as to the state law causes of action. Again, the court was of the opinion that Genesis failed to “show more than a disagreement with the Court’s decision.” Finally, the court exercised its discretion to decline to enter partial final judgment as to the dismissed claims. Accordingly, the court denied Genesis’s motion and the status quo in the case remained unchanged.

In re: JC USA. v. H.I.G. Capital Management LLC, No. 23-10585 (JKS), 2025 WL 2354184 (D. Del. Aug. 13, 2025) (Judge J. Kate Stickles). Plaintiffs in this action are former employees of the weight loss company Jenny Craig. In May of 2023, Jenny Craig closed all of its locations and subsequently filed for Chapter 7 bankruptcy. Its workers were not warned about the mass layoff beforehand. The workers allege that in addition to having no advance warning of their layoffs, they were not paid outstanding wages and benefits for their last pay period and their employer did not reserve enough cash to pay these outstanding amounts. Additionally, plaintiffs contend that Jenny Craig’s private equity owner, H.I.G. Capital Management, LLC, failed to provide them with COBRA notices and breached their contract as to their medical insurance benefits. These employment problems, and more, led the frustrated former employees to sue H.I.G. Capital Management. Defendant responded to the lawsuit by moving to dismiss. In this order the court granted the motion to dismiss, but allowed leave for plaintiffs to amend their complaint. One overarching problem the court identified was the complaint’s failure to adequately plead that H.I.G. Capital Management was their employer. As the court noted, all of plaintiffs’ causes of action are premised on an employer-employee relationship. However, the court noted that plaintiffs may be able to overcome this deficiency by amending their complaint. The court then pulled apart further problems with each of plaintiffs’ causes of action. First, the court found that the complaint does not plausibly allege a claim under the WARN Act as it fails to allege that H.I.G. ordered any layoff or termination. The court next dismissed the labor violation and wage claims for failure to plead sufficient factual support. Turning to the COBRA notice claim, the court found that plaintiffs failed to allege that H.I.G. was the plan administrator. Finally, the court determined that plaintiffs’ breach of contract claim regarding the medical insurance benefits was completely preempted by ERISA. The court wrote, “[t]he Complaint alleges H.I.G. breached the employment contract it had with the Plaintiffs because it made deductions from the Plaintiffs’ monthly paychecks and subsequently failed to provide continued health insurance. The case law makes clear that state law cause of action based on such allegations are pre-empted by ERISA. The Court will therefore grant the Motion to Dismiss as to the breach of contract claim.” Despite identifying a myriad of issues with the complaint as is, the court nevertheless disagreed with H.I.G. Capital Management that there are no additional facts which could save the complaint. Therefore, the court granted plaintiffs leave to amend their complaint to try and remedy the issues identified in this decision.

Seventh Circuit

Cella v. Lilly USA, LLC, No. 1:24-cv-00814-TWP-MKK, 2025 WL 2314732 (S.D. Ind. Aug. 11, 2025) (Judge Tanya Walton Pratt). Plaintiff Daniel Cella initiated this lawsuit in May of 2024 after he was terminated from Lilly USA LLC. In his complaint Mr. Cella asserted two causes of action. Count I sought to recover benefits under Section 502(a)(1)(B) of ERISA, while count II alleged that Lilly interfered with his benefit rights under Section 510 of ERISA. Lilly and the Lilly Severance Plan timely moved to dismiss the interference claim but neglected to file an answer to the claim for benefits. Despite having never filed an answer to count I, the case proceeded and the parties continued to litigate. They engaged in discovery, and on February 11, 2025, the court granted defendants’ motion to dismiss count II. The parties then filed a joint notice requesting the case be set for a bench trial on the Section 502(a)(1)(B) claim. Then, on May 13, 2025, Mr. Cella filed a motion for entry of default against defendants for failure to defend against count I. Defendants responded by filing a motion for leave to file an answer to count I and an opposition to Mr. Cella’s motion for entry of default. They argued that their failure to timely file an answer to count I was because the paralegal assigned to the case did not enter the deadline in counsel’s calendar. While certainly not ideal, the court determined that defendants’ failure to timely file an answer to count I was the result of excusable neglect. The court noted that Mr. Cella was not prejudiced by the omission, that the failure had no impact on the proceedings as the parties carried on litigating the case as if count I was still in dispute, and that the cited reason for the mistake appears to be “mere negligence rather than Defendant’s willful disregard of the Court’s deadlines.” Finally, the court found no evidence that Lilly or the plan acted in bad faith. Thus, the court concluded that the error was harmless and excusable, and that it does not justify entering default against defendants. Accordingly, the court wished to resolve the case on the merits. It therefore granted defendants’ motion for leave and denied as moot Mr. Cella’s motion for entry of default.