While there was no notable decision this week, plenty of interesting issues percolated through the federal courts. Read on for the following: (1) the latest installment in the legal war between pharmacy benefit managers and the State of Arkansas over that state’s efforts to rein them in (Central States v. McClain); (2) the finalization of a $4.6 million class action settlement regarding Aetna’s allegedly unlawful imposition of administrative fees for chiropractic and physical therapy services (Peters v. Aetna); (3) a case addressing whether ERISA preempts claims by an insurer against a provider for fraudulent billing practices (Horizon v. Arsenis); (4) a case discussing whether a court has jurisdiction under ERISA over a benefits claim arising under the Railway Labor Act (Eldredge v. American Airlines); (5) two skirmishes in the ongoing battle over whether employers can off-load their pension obligations to retirement services company Athene (Piercy v. AT&T, Dow v. Lumen), and (6) a primer on nearly every issue that arises in provider vs. insurer health benefit litigation (CSMN v. Aetna).

Among these cases (and more) you will surely find something that tickles your fancy, and if not, we’ll be back next week.

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

Breach of Fiduciary Duty

First Circuit

Piercy v. AT&T Inc., No. 24-cv-10608-NMG, 2025 WL 2505660 (D. Mass. Aug. 29, 2025) (Magistrate Judge Paul G. Levenson). Plaintiffs in this putative class action are retired employees of AT&T Inc. who allege that their former employer, with the assistance of State Street Global Advisors Trust Company, breached their fiduciary duties and caused AT&T’s defined-benefit pension plan to engage in prohibited transactions with plan assets in the course of annuitizing approximately $8 billion in pension liabilities through the purchase of group annuity contracts from the insurer Athene Annuity & Life Assurance Company of New York. Defendants moved to dismiss the class action complaint. The District Judge referred the motions to Magistrate Judge Paul G. Levenson for report and recommendation. In this decision Judge Leveson recommended dismissal of all nine of plaintiffs’ claims. Before assessing the merits of the claims, however, the Magistrate first addressed the threshold issue of Article III standing. Although defendants argued otherwise, Judge Levenson was persuaded that plaintiffs alleged a concrete and particularized injury by asserting that they received a riskier annuity than they otherwise would have been entitled to receive but for defendants’ alleged violations of ERISA. The Magistrate fundamentally accepted the proposition “that an annuity recipient is immediately and concretely harmed if she receives an annuity with a ‘substantially increased risk’ of default than what she is entitled to.” Accordingly, the Magistrate did not recommend dismissal pursuant to Rule 12(b)(1). Nevertheless, on the broader question of whether plaintiffs adequately alleged justiciable claims that defendants violated ERISA by selecting the Athene annuities, instead of purchasing annuities offered by another insurer, Judge Levenson’s answer was no. Some of the key holdings Judge Levenson reached were: (1) AT&T’s decision to enter into the pension risk transfer with Athene was a settlor decision and not a fiduciary matter; (2) plaintiffs’ allegations of corporate/financial entanglements were insufficient to plausibly suggest disloyalty; (3) plaintiffs failed to wrestle with the fact that the annuities are fenced off in a separate account from Athene’s general portfolio; (4) the complaint fails to offer apt comparators to the challenged Athene annuities; (5) plaintiffs do not plausibly allege facts to support an inference that a prudent fiduciary could not have concluded that Athene was an appropriate annuity provider; (6) the allegations in plaintiffs’ prohibited transaction claims do not support their assertion that State Street and Athene were parties in interest; and finally (7) Section 1106(b) cannot categorically prohibit pension risk transfers because they are permitted by ERISA. For these reasons, along with some others, the Magistrate recommended dismissal of all of plaintiffs’ claims pursuant to Rule 12(b)(6).

Ninth Circuit

Wehner v. Genentech, Inc., No. 24-2630, __ F. App’x __, 2025 WL 2505672 (9th Cir. Sep. 2, 2025) (Before Circuit Judges Hurwitz, Koh, and Johnstone). Plaintiff-appellant Matthew Wehner appealed the district court’s dismissal of his breach of fiduciary duty action asserted against the fiduciaries of the Genentech, Inc. retirement plan. In this sparse, unpublished decision the Ninth Circuit affirmed, agreeing with the lower court that Mr. Wehner’s allegations and comparators failed to give rise to a plausible inference of breach of the duty of prudence. The court of appeals ruled that despite being labeled comparable, the plans Mr. Wehner selected to compare to the Genentech plan were actually dissimilar, and thus not meaningful benchmarks against which to evaluate the performance of the challenged funds. Likewise, the Ninth Circuit could not find the complaint’s allegations and theories of mismanagement plausible as opposed to merely possible. Because “ERISA requires prudence, not prescience,” the Ninth Circuit emphasized that mere underperformance is considered insufficient to state a plausible claim for fiduciary breach. Accordingly, the appellate court determined that the district court was right to dismiss both the underlying imprudence claim, as well as the derivative failure to monitor claim. Considering the “difficult tradeoffs” fiduciaries are forced to make, the Ninth Circuit was unwilling to too closely scrutinize the Genentech fiduciaries’ decision to retain the challenged funds, and therefore affirmed the dismissal of the lawsuit seeking to do just that.

Class Actions

Fourth Circuit

Peters v. Aetna, Inc., No. 1:15-cv-00109-MR, 2025 WL 2550531 (W.D.N.C. Sep. 4, 2025) (Judge Martin Reidinger). This class action litigation has been ongoing for nearly a decade and revolves around Aetna Inc. and OptumHealth Care Solutions, LLC’s practice of imposing on plans and plan members administrative fees for chiropractic and physical therapy healthcare claims contrary to the written terms of the ERISA plans. All along the litigation had three goals: (1) to stop defendants from imposing the challenged rate; (2) to require defendants to reimburse members and plans for their overpayments; and (3) to order defendants to separately pay plaintiffs’ attorneys’ fees pursuant to Section 502(g). After more than 8,000 hours of work by counsel at Zuckerman Spaeder LLP and The Van Winkle Law Firm, plaintiffs achieved these goals. In this decision the court granted final approval of class settlement, awarded counsel attorneys’ fees and costs, and awarded named plaintiff and class representative Sandra M. Peters a service award. The terms of the settlement require Aetna to pay $4.6 million for the benefit of the 256,219 class members, separate and apart from its $3.55 million payment to class counsel. The settlement also requires Optum to pay $200,000 for the benefit of the classes. All of the procedures of the Class Action Fairness Act have been satisfied, and the reaction of the class has been overwhelmingly positive. Thus, all that was left was the court’s final approval, which was granted here. First, the court approved the proposed settlement, which it found fair, reasonable, and adequate, and the result of informed, good-faith and arms-length negotiations. Rather than roll the dice on continued litigation, the settlement gives the class members “the certainty of a favorable outcome and the benefit of the time value of money,” the court said. Moreover, the court noted that class members are likely to recover an estimated 40% of their losses and all of the challenged rates they paid for the 2012-2017 period. The court further acknowledged the excellent and zealous representation of plaintiffs’ attorneys, who vigorously litigated the case “up until the eve of trial.” Speaking of the attorneys, the court awarded them all of the fees Aetna agreed to pay as part of the settlement. The court concluded that the agreement regarding attorneys’ fees was fair and reasonable given the extensive time and effort spent pursuing this litigation in the interest of class members who were unlikely to challenge this practice on their own. Additionally, the court acknowledged that the attorneys took the case on with the knowledge that they would not be paid unless the class prevailed in some manner. In the end, the court found that the class achieved a significant degree of success, achieving all three of plaintiffs’ main objectives. Finally, the court noted that Aetna’s separate payment of attorneys’ fees and expenses will not reduce the classes’ recovery in the least. Taken together, the court found that the relevant factors all support awarding counsel the entirety of the agreed-upon fee amount. The decision ended with the court awarding Ms. Peters $20,000 from the common fund as a service award to reflect her significant and important contributions to this case, including the over 200 hours she dedicated to it. For these reasons, the court granted in its entirety plaintiffs’ unopposed motion for final approval of settlement, attorneys’ fees and costs, and class representative service award.

Eighth Circuit

Adams v. U.S. Bancorp, No. 22-cv-509 (NEB/LIB), 2025 WL 2531025 (D. Minn. Aug. 26, 2025) (Magistrate Judge Leo I. Brisbois). The plaintiffs in this matter are former employees of U.S. Bancorp who retired early, before the age of 65. They initiated this putative class action on February 28, 2022 alleging that their former employer has excessively decreased the value of their pensions in the U.S. Bank Pension Plan in violation of ERISA by utilizing calculations that “resulted in reductions which were unreasonable, excessive, and punitive.” In an earlier order, the court denied plaintiffs’ motion for class certification. In this decision, Magistrate Judge Leo I. Brisbois recommended certifying a narrowed class of retirees. First, Judge Brisbois stated that the newly “narrowed class is ascertainable because the proposed class members can be identified by reference to objective criteria.” Similarly, the Magistrate concluded that plaintiffs’ proposed narrower class is not an impermissible fail-safe class. Judge Brisbois was also assured that the newly defined class of retirees meets the requirements of Rule 23(a) as the class is numerous with close to 2,000 members, there is a common question of law applicable to all class members about whether the plan’s early commencement calculations resulted in early retirement benefits that are actuarially equivalent to what class members would have received if they had retired at age 65, and the named plaintiffs have claims that are typical of the absent class members and they and their counsel at Izard, Kindall & Raabe, LLP and Motley Rice LLC are adequate representatives of the class. Finally, the Magistrate concluded that the narrower class is properly maintainable under Rule 23(b)(1)(A), as separate lawsuits by various plan participants regarding the calculations used by the plan could result in inconsistent and varying adjudications that would establish incompatible standards of conduct for the bank. Therefore, Judge Brisbois was of the opinion that the statutory requirements of Rule 23 are now satisfied under the new class definition, and thus recommended that the court grant the motion to certify the class.

Disability Benefit Claims

Third Circuit

Vartanian v. First Reliance Standard Life Ins. Co., No. 24-05096 (GC) (JBD), 2025 WL 2555712 (D.N.J. Sep. 5, 2025) (Judge Georgette Castner). Prior to becoming disabled, plaintiff Louise Vartanian was the Executive Director of Corporate/Procurement Services at Sumitomo Mitsui Banking Corporation. Ms. Vartanian stopped working in April of 2021 due to a combination of physical and cognitive symptoms that stemmed from neurological conditions, chronic fatigue syndrome, and long-haul post-COVID. In this litigation Ms. Vartanian asserts a single cause of action for wrongful termination of benefits against First Reliance Standard Life Insurance Company, seeking judicial review and reinstatement of her long-term disability and waiver of life insurance premiums benefits. The parties cross-moved for judgment under Rule 56. Upon consideration of the voluminous record, the court entered judgment in favor of Ms. Vartanian in this decision. Before it got there, however, it had to rule on the appropriate review standard. Ms. Vartanian did not dispute that the plan contains language necessary to confer discretion on First Reliance. Nevertheless, she argued that the insurer’s failure to strictly comply with ERISA’s 45-day window to issue a determination makes de novo review appropriate. The court was not convinced. Rather, relying on Third Circuit precedent, it concluded that the procedural violation did not warrant departing from a deferential review standard as it was not severe and did not prejudice Ms. Vartanian. However, even under First Reliance’s preferred standard of review, the court overturned its decision to terminate Ms. Vartanian’s benefits. First, the court found that “Defendant’s reversal of its decision to award benefits was arbitrary and capricious because the record does not include any new, meaningful evidence to support a change in position, and because Defendant’s decision is not supported by substantial evidence.” The court also held that First Reliance selectively reviewed the record to cherry-pick information that favored termination without acknowledging facts that supported an award of benefits. This behavior, the court stated, did not provide a “fulsome picture of Plaintiff’s disability,” and failed to consider her cognitive disability even though her claim for disability stemmed from both physical and cognitive issues. Moreover, based on the record before it, the court determined that First Reliance’s decision to accord greater weight to its own consultant non-treating physicians was arbitrary and capricious. Finally, the court concluded it was an abuse of discretion for First Reliance to arrive at the conclusion that Ms. Vartanian was not disabled without considering whether she could actually perform the duties of her job, especially the cognitive requirements of the work. The court thus found that despite the deferential review standard, the procedural irregularities and substantive shortcomings on the part of First Reliance compelled a finding that the benefit termination decision was an abuse of discretion. This left only the issue of the appropriate remedy. The court decided that because the benefits were unlawfully terminated, the only way to return to the status quo was to retroactively reinstate the benefits up until the date of the final denial of the appeal. However, because the court does not have any medical records beyond that date, the court concluded that the proper course of action is to remand to First Reliance for a determination as to whether Ms. Vartanian remained disabled after then.

Seventh Circuit

Moratz v. Reliance Standard Life Ins. Co., No. 24-2825, __ F. 4th __, 2025 WL 2505760 (7th Cir. Sep. 2, 2025) (Before Circuit Judges Easterbrook, Kolar, and Maldonado). Plaintiff-appellant Karen Moratz had been the principal flutist for the Indianapolis Symphony Orchestra since the late 1980s when, in mid-March 2020, the orchestra shut down in the face of the global COVID-19 pandemic. As a result of the shutdown, Ms. Moratz and her colleagues were placed on furlough. In December of 2020, Ms. Moratz and her husband got sick with COVID. At first, she had the same symptoms as everyone else – a cough, fever, pain, fatigue – but then her symptoms took their own path, and she began experiencing ear pain, dizziness, and tinnitus, a continued ringing in her ears. In September 2021, the orchestra rehired its musicians and began to prepare for the upcoming season. Ms. Moratz returned to work but found that the music exacerbated her dizziness and that she could not hear the others performing due to the ringing in her ears. On September 15, 2021, the Indianapolis Symphony Orchestra placed her on sick leave. This litigation stems from Ms. Moratz’s application for long-term disability benefits from Reliance Standard Life Insurance Company under the orchestra’s ERISA-governed disability policy in February of 2022. In her application, Ms. Moratz reported that the last day she had worked before her disability was March 13, 2020 and that she had not returned to work since then, although she noted that she had been furloughed due to the pandemic. She also gave December 11, 2020 as the first date she could not work on a full-time basis. Because Ms. Moratz was not working at the time of her reported onset of disability, Reliance denied her claim. With the help of counsel Ms. Moratz used the appeals procedures available to her to ask Reliance to reconsider her claim. In her appeal she submitted information demonstrating that she had been rehired in September of 2021, but that her continued illness made it impossible for her to perform. Reliance affirmed its denial. It determined that the new information of the dates when Ms. Moratz worked constituted a fundamentally different request for benefits and took the position that she needed to file a whole new claim and begin the process anew. Ms. Moratz did not see things the same way. Rather, she maintained that she was attempting to perfect her claim. Upon this belief, she took to the courts. Unfortunately for her, the district court did not see things similarly. Instead, it held that while the ERISA plan was required to consider additional or corrected information on appeal, it was under no obligation to consider wholly inconsistent information. Agreeing with Reliance that Ms. Moratz’s new information changed the nature of her claim such that she needed to submit a new application for benefits, the district court entered summary judgment in its favor. Ms. Moratz appealed. However, the Seventh Circuit was of the same mind as the district court on the question at the heart of the dispute: “when does supplemental information create a new claim for benefits?” Much like the district court, the appeals court concluded that the information Ms. Moratz provided did not “shed light on her initial claim,” but “tried to complete a 180 and change the date she claimed she was last able to work. That is not a ‘new’ fact, it is a contrary fact.” In sum, the Seventh Circuit held that the two coverage dates represented separate losses because the relevant facts were fundamentally different in September 2021 than in December 2020. As the court put it, “[s]he submitted information that in effect requested coverage for a different loss, and that meant she was submitting a new claim.” Moreover, the appeals court concluded that Ms. Moratz needs to exhaust her administrative remedies on the September 2021 claim before she can file suit under ERISA to enforce the terms of the plan or challenge any adverse decision. The Seventh Circuit determined that Ms. Moratz provided no reason why she could not file new paperwork on the September 2021 claim or that doing so would be futile. Accordingly, the court determined that she should not be excused from doing so. Thus, on the record before it, the court of appeals agreed with Reliance that Ms. Moratz was not eligible for benefits in December of 2020 under the terms of the policy and that the additional information she supplied on appeal constituted information about a separate loss that constituted a new claim for benefits, requiring her to complete a separate claim process. Therefore, the court of appeals affirmed the district court’s entry of judgment in favor of Reliance.

Eighth Circuit

Jones v. Lincoln National Life Ins. Co., No. 25-1049, __ F. App’x __, 2025 WL 2555988 (8th Cir. Sep. 5, 2025) (Before Circuit Judges Gruender, Benton, and Kobes). Plaintiff-appellant Monty Jones appealed the district court’s grant of summary judgment in favor of Lincoln National Life Insurance Company in this ERISA action challenging Lincoln’s denial of his claim for short-term disability benefits under the Wells Fargo & Company Short-Term Disability Plan. In what boiled down to a two-sentence, per curiam decision the Eighth Circuit affirmed. Like the district court, it held that Lincoln had not abused its discretion by relying on the opinions of its consultant nurses over the opinions of Mr. Jones’ treating provider. Additionally, the appellate court agreed with the lower court that Lincoln was not required to provide an independent medical examination of Mr. Jones before deciding his claim. Finally, contrary to Mr. Jones’ assertion, the Eighth Circuit held that Lincoln considered the combination of his medical conditions, as reflected in its denial letters and its thorough review of his medical records.

ERISA Preemption

Third Circuit

Horizon Blue Cross Blue Shield of N.J. v. Arsenis, No. 24-2009, __ F. App’x __, 2025 WL 2504824 (3rd Cir. Sep. 2, 2025) (Before Circuit Judges Krause, Phipps, and Roth). Horizon Blue Cross Blue Shield of New Jersey filed a complaint in New Jersey state court against defendant Chryssoula Arsenis and her company, Speech and Language Center, alleging that they engaged in fraudulent billing practices. The litigation resulted in a settlement agreement. Horizon then moved to enforce its rights under the settlement agreement, which the state court granted. Shortly after, Ms. Arsenis removed the case to federal court citing 28 U.S.C. § 1441(b) and § 1443. Horizon moved to remand the action, arguing that the removal was untimely, and that the district court moreover lacked jurisdiction. Horizon also moved for sanctions, as this was Ms. Arsenis’ second attempt at removal. Ms. Arsenis moved to strike the state court judge’s order as well as defamatory statements allegedly made by Horizon. The district court granted Horizon’s motion to remand, concluding that it lacked subject matter jurisdiction and that the removal was indeed untimely. Given this conclusion, the district court also determined that it could not consider Ms. Arsenis’ motion to strike. Finally, the district court considered the motion for sanctions and directed Ms. Arsenis to show cause as to why she shouldn’t be enjoined from removing the instant action and similar actions to federal court in the future. Ms. Arsenis appealed the district court’s holdings before the Third Circuit. In this unpublished per curiam order the court of appeals concluded that it lacked jurisdiction over the show cause order, but that it had jurisdiction to consider the district court’s decision to grant Horizon’s motion to remand. As for the merits of that decision, the Third Circuit found that the district court’s ruling was proper. For our purposes here at Your ERISA Watch, the Third Circuit’s discussion of federal question jurisdiction under 28 U.S.C. § 1331 was the most noteworthy part of the decision. In that portion of the decision the court of appeals held that the complete ERISA preemption doctrine does not apply to cases such as this one “where a healthcare provider sought to recover for payment of inflated or fraudulent bills.” Moreover, though Ms. Arsenis argued that enforcement of the settlement agreement violates her federal constitutional and statutory rights, the Third Circuit concluded that this is a federal defense, insufficient to warrant removal to federal court. The court further determined that Ms. Arsenis failed to satisfy the requirements for removal under § 1443. Finally, the court held that diversity jurisdiction does not apply here. Thus, to the extent the court of appeals determined it had jurisdiction over this matter, it decided to affirm the judgment of the district court.

Seventh Circuit

Central States, Southeast and Southwest Areas Health & Welfare Fund v. McClain, No. 25 CV 3938, 2025 WL 2522621 (N.D. Ill. Sep. 2, 2025) (Judge Jeremy C. Daniel). A self-funded multiemployer ERISA welfare benefit plan and its trustee and fiduciary filed this action against the Insurance Commissioner of Arkansas seeking declaratory judgment that a recently enacted Arkansas Insurance Department Rule (“Rule 128”) requiring fair and reasonable pharmacy reimbursements is preempted by ERISA. Rule 128 broadly applies to all health benefit plans and allows the Commissioner to review the compensation programs of Pharmacy Benefit Managers (“PBMs”) “from a health benefit plan to ensure that the reimbursement for pharmacist services paid to a pharmacist or pharmacy is ‘fair and reasonable.’” In furtherance of this goal, Rule 128 includes a reporting obligation that requires healthcare plans to submit certain pharmacy compensation information to the Commissioner to review to confirm whether payments to Arkansas pharmacists and pharmacies are fair and reasonable. Should the Commissioner determine that a health benefit plan is paying amounts that are fair and reasonable, no further action or adjustment is needed. If, on the other hand, the Commissioner is not satisfied with the pharmacy compensation program of a certain plan, the Commissioner can require the plan to pay an additional pharmacy dispensing cost. This is referred to as the dispensing fee requirement. Plaintiffs challenge both the reporting and dispensing fee requirements of Rule 128, and argue that both aspects of the Rule are preempted by ERISA because they have an impermissible reference to and connection with ERISA plans. The Commissioner moved to dismiss the action, arguing that Rule 128 is not preempted by ERISA. The court agreed and granted the motion to terminate this case. At the outset, the court determined that Rule 128 does not act exclusively on ERISA plans and that the existence of an ERISA plan is not essential to its operation. As a result, the court disagreed with plaintiffs that the reporting and dispensing fee requirements refer to ERISA plans. Plaintiffs also allege that both the reporting requirement and the dispensing requirement have an impermissible connection with ERISA health plans, but again, the court did not agree. First, the court found that the reporting requirement is not central, but rather an incidental component of Rule 128. The court noted that the Rule itself states that it was issued related to cost processes and designed “to help ensure the subject of network adequacy or reasonably sustainable network adequacy of pharmacy services for health benefit plans.” Because the Rule was enacted to ensure reimbursement for pharmacist services, the court was satisfied that it is not fundamentally a reporting law, and as a result, the Rule’s reporting requirement cannot be considered preempted by ERISA. As for the dispensing requirement, the court also agreed with the Commissioner that it is not preempted, and that this finding is consistent with the Supreme Court’s precedent in Rutledge v. Pharmaceutical Care Management Association. Specifically, the court seized on the fact that the “provision merely requires plans to adhere to their own terms, and it does not prevent plans from increasing co-pays, coinsurance or deductibles to account for any increased dispensing fee they are required to pay.” Under this structure, the court agreed with the Commissioner that the potential fee he may impose on healthcare plans which are found not to be providing reasonable compensation does not force them to adopt any particular scheme of coverage. At bottom, the court concluded that this indirect economic influence does not create an impermissible connection. Based on the foregoing, the court was confident that the Rule is not preempted by ERISA. And because absent ERISA preemption, plaintiffs’ action falls apart, the court granted the Commissioner’s motion to dismiss.

Eighth Circuit

George v. United Healthcare Service, Inc., No. 3:25-cv-71, 2025 WL 2576437 (D.N.D. Sep. 5, 2025) (Judge Peter D. Welte). This is a heart-wrenching case. In the fall of 2020, Brook and Christopher George took their two-year-old son to the emergency room and discovered a brain mass through MRI testing. The child immediately started cancer treatments, including surgery. Dealing with this would presumably be enough on its own, but in addition to the stresses of their child’s condition United Healthcare Service, Inc. has repeatedly refused to approve MRI claims that have been ordered by the boy’s treating physicians. Despite the insurer’s refusal to cover the treatment, the family has proceeded with the MRIs, which the doctors insist are medically necessary in order to detect new tumors. Sadly, in the fall of 2021, this guidance proved prescient, and two new tumors were revealed. The parents allege that because of United’s actions, they have suffered consequential damages and emotional distress, and as a result, they sued their insurer in state court bringing claims of breach of contract and bad faith. However, because the healthcare plan at issue is an employer-sponsored plan governed by ERISA, United removed the case to federal court. It then moved to dismiss the action. In this straightforward ERISA preemption decision, the court agreed with United that the state law claims relate to the employee benefit plan established and maintained by Christopher’s employer and that preemption applies to both claims. The Georges requested that the court allow them to state an ERISA claim. However, the court felt that allowing amendment would involve substantial change to the complaint, as it would involve an entirely new cause of action and potentially different facts. The court was also concerned about the issue of exhaustion. Given these concerns, the court decided that it would grant the motion to dismiss, but dismiss the complaint without prejudice so as not to “preclude the Georges from filing an ERISA claim, clearly stating their exhaustion of any internal administrative remedies, so that the case can be resolved on its merits.”

Medical Benefit Claims

Tenth Circuit

S.J. v. Aetna Life Ins. Co., No. 2:24-cv-00693-TS-CMR, 2025 WL 2506888 (D. Utah Sep. 2, 2025) (Judge Ted Stewart). Plaintiff Marc S.J. was a participant in the MITRE Corporation’s health insurance plan. M.S.J. is his dependent child and a beneficiary under the plan. Aetna Life Insurance Company is the plan’s claims administrator. In this action plaintiff seeks judicial review of Aetna’s denial of M.S.J.’s treatment at blueFire Wilderness Therapy, a therapeutic wilderness therapy program in Idaho licensed to provide behavioral and mental health treatments to children. Plaintiff asserts two causes of action against the plan and its administrator: (1) a claim for wrongful denial of benefits under ERISA Section 502(a)(1)(B) and (2) a claim for equitable relief based on an alleged violation of the Mental Health Parity and Addiction Equity Act under ERISA Section 502(a)(3). Defendants moved to dismiss both claims. The court granted the motion in part and denied it in part in this decision. To begin, the court dismissed the claim for benefits. Under the plain language of the plan, coverage is entirely excluded for wilderness therapy programs like blueFire. Plaintiff argued that blueFire nevertheless meets the definition of behavioral health provider, which is a covered service, but the court disagreed. Though the plan does cover treatment by a behavioral health provider, it clearly defines the term to mean a person. Accordingly, the court wrote that as “a licensed Children’s Therapeutic Outdoor Program, blueFire cannot be a health professional under the terms of the Plan because it is not a person. Therefore, Plaintiff’s request for benefits for treatment at blueFire must be rejected.” Nevertheless, the court denied the motion to dismiss the separately alleged Parity Act claim. The court noted that the plan only specifically excludes wilderness programs from the definition of residential treatment facilities for mental health and substance abuse and that there is no similar exclusion under the definition of skilled nursing facilities. Under the circumstances, the court concluded that it is plausible that the plan sets different standards for medical/surgical care than it does for mental health/behavioral care. As a result, the court agreed with plaintiffs that they have both a viable facial and as-applied challenge under the Parity Act. Accordingly, the court declined to dismiss the claim for equitable relief.

Pleading Issues & Procedure

Sixth Circuit

Ulmes v. Matheson Tri-Gas, Inc., No. 3:24-cv-1679, 2025 WL 2521133 (N.D. Ohio Sep. 2, 2025) (Judge Jeffrey J. Helmick). Plaintiff Tamara R. Ulmes and defendant Ronald M. Toland were married in 1987 and divorced in 2010. During the divorce proceedings the two entered into a separation and property agreement, which in pertinent part dictated that Ms. Ulmes would receive 33.5% of the value of Mr. Toland’s 401(k) portfolio with his employer, Valley National Gasses WV LLC. This was later formalized in a Qualified Domestic Relations Order (“QDRO”). The QDRO required that Ms. Ulmes’ portion of Mr. Toland’s 401(k) account be segregated and separately maintained from his account. Around the time of the divorce proceedings, defendant Matheson Tri-Gas, Inc. purchased Valley National Gasses. In this lawsuit, Ms. Ulmes alleges that despite Matheson Tri-Gas receiving notice of the QDRO this segregation did not happen and that in failing to segregate the account, Matheson was negligent and violated its fiduciary duties to her under ERISA. She also alleges that her ex-husband was unjustly enriched because he retained the funds that she was entitled to pursuant to the terms of the QDRO. Two motions were before the court. First, Mr. Toland filed an unopposed motion to sever the unjust enrichment claim and remand that claim to state court. Second, Matheson Tri-Gas moved to dismiss the two claims asserted against it. The court granted both motions in this decision. To begin, the court agreed with Mr. Toland that the unjust enrichment claim must be severed and remanded because (1) that claim does not arise under federal law, and (2) there is no diversity of citizenship as both he and Ms. Ulmes are residents of Ohio. The court therefore granted the motion to sever the cause of action asserted against Mr. Toland pursuant to § 1441(c) and remanded that claim to state court in Ohio. The court then turned to the motion to dismiss. It considered the negligence claim first. Matheson Tri-Gas argued that this claim is completely preempted by ERISA and satisfies both prongs of the Davila test. The court agreed. As Ms. Ulmes asserted that Matheson was negligent in the performance of its duties as plan administrator by not segregating the 401(k) account pursuant to the QDRO, the court concluded that the negligence claim plainly satisfies the two-prong Davila test and is preempted. The court accordingly granted Matheson Tri-Gas’s motion to dismiss that claim. Next, the court granted the motion to dismiss the fiduciary breach claim asserted pursuant to ERISA. It agreed with Matheson that Ms. Ulmes has made statements which call into question whether Valley National Gasses or Matheson received the QDRO. Without clear knowledge that the employer received the QDRO, the court determined that the claim is based only on speculation, meaning “her assertion that Matheson did receive the QDRO and, by extension, that a fiduciary relationship was created between herself and Matheson, is no more than ‘a legal conclusion couched as a factual allegation,’ one that is not entitled to a presumption of truth.” The court therefore concluded that the fiduciary breach claim is not plausible and so granted the motion to dismiss it. For these reasons, the court granted the entirety of both motions before it.

Ninth Circuit

Eldredge v. American Airlines Inc., No. CV-25-00823-PHX-SMB, 2025 WL 2549405 (D. Ariz. Sep. 4, 2025) (Judge Susan M. Brnovich). Plaintiff Russ Eldredge was a pilot for American Airlines, Inc. and a member of the Allied Pilots Association. American Airlines and the pilots union had a collective bargaining agreement, known as the Joint Collective Bargaining Agreement (the “JCBA”), which incorporates the long-term disability (“LTD”) benefit plan at the center of this ERISA case. Mr. Eldredge stopped working after he was diagnosed with substance use disorder. Thereafter, he filed a claim for disability benefits under the ERISA LTD plan. American Airlines denied his claim, finding that he was not an active employee at the time he incurred his disability “and that the disability was otherwise the product of criminal activity.” Mr. Eldredge exhausted his administrative procedures under the plan to no avail. After American Airlines affirmed the denial twice, he was notified that he had the right to file a civil action under Section 502(a) of ERISA. Of course, Mr. Eldredge did just that. Since sending the right to sue letter, defendant has taken a different position. It moved to dismiss Mr. Eldredge’s complaint pursuant to Rule 12(b)(1), arguing that the court lacks subject matter jurisdiction over the case under the Railway Labor Act (“RLA”). At issue was whether Mr. Eldredge’s claim was a “minor dispute” under the RLA. The court agreed with defendant that it was. A claim constitutes a minor dispute under the RLA if it seeks purely to vindicate a right or duty created by the collective bargaining agreement itself. Such disputes are subject to the jurisdiction of a system board of adjustment set up by the collective bargaining agreement. Here, the court determined, “[b]ecause Plaintiff’s ERISA claim is predicated on an alleged violation of the Plan, which is inextricably intertwined with the JCBA, Plaintiff’s claim is grounded in the JCBA. Accordingly, his claim is a minor dispute under the RLA. Thus, under the RLA, the Court lacks subject-matter jurisdiction to hear Plaintiff’s claim.” As a result, the court granted the motion to dismiss, and because no amendment could possibly cure this defect, the court closed the case rather than allow Mr. Eldredge the opportunity to amend.

Provider Claims

Second Circuit

The Central Orthopedic Group, LLP v. Aetna Life Ins. Co., No. 24-cv-7014 (BMC), 2025 WL 2549995 (E.D.N.Y. Sep. 4, 2025) (Judge Brian M. Cogan). The Central Orthopedic Group, LLP is a healthcare provider that rendered medical and surgical services to patients insured by Aetna Life Insurance Company. In this action, one of eight related cases, Central Orthopedic alleges that Aetna is obligated to pay for the services rendered at its out-of-network rate and that it has failed to do so. Plaintiff brings claims under ERISA and state law. In this decision the court dismissed the ERISA claims and ordered the parties to present arguments as to whether it should retain supplemental jurisdiction over the state law claims. To begin, the court held that the provider could not assert a claim under ERISA because each of the healthcare policies at issue contains a valid and unambiguous anti-assignment provision that renders the assignment of rights from the patients ineffective. Plaintiff argued that Aetna waived its right to enforce the anti-assignment clauses, but the court did not agree. “Plaintiff’s conclusory assertions in the complaint that typical communications between it and Aetna regarding the claims constitute a waiver of the anti-assignment clauses are legally insufficient to plausibly plead waiver.” The court added that several decisions out of both the Eastern and Southern Districts of New York have rejected waiver arguments premised on “indistinguishable facts” from those alleged here. Like its sister courts, the court here rejected the “foundational theory that the normal and typical participation by an insurer in the claims resolution process gives rise to a waiver.” The court then considered whether to permit the provider leave to amend. It decided against it, concluding that the problems the provider has are legal insufficiencies that could not be cured by amendment. Accordingly, the ERISA claims were dismissed with prejudice. As for the remaining state law claims, the court determined that they are not completely preempted by ERISA given the lack of valid assignments, which meant that the provider could not have brought its state law claims under ERISA. Because the court concluded that the first prong of the Supreme Court’s Davila test is not met and the claims are not preempted under Section 502(a), the court determined that it lacks subject-matter jurisdiction over this case. The court indicated that it was not inclined to exercise supplemental jurisdiction over the state law claims, but because neither side has addressed the issue, the court decided that it would allow them the opportunity to do so before ruling decisively on the matter.

Seventh Circuit

Abira Med. Laboratories, LLC v. Golden Rule Ins. Co., No. 1:24-cv-01407-JPH-MKK, 2025 WL 2550131 (S.D. Ind. Sep. 4, 2025) (Judge James Patrick Hanlon). Hardly a week goes by here at Your ERISA Watch where we don’t report on a case brought by Abira Medical Laboratories. In each of these actions, brought against various insurance companies (in this instance it’s a United Healthcare subsidiary called Golden Rule Insurance Company), Abira alleges that it was underpaid for laboratory testing services it provided to insureds. The claims Abira asserts in its actions vary. Sometimes it pleads claims under state law, sometimes under ERISA, sometimes both. This particular action involved only state law claims. Abira alleged claims of breach of contract, breach of implied covenant of good faith and fair dealing, fraudulent and negligent misrepresentation, equitable and promissory estoppel, and quantum meruit and unjust enrichment. Golden Rule moved to dismiss. As a preliminary matter, the court held that Abira has plausibly established standing to pursue its claims because it alleges that it was deprived of thousands of dollars through Golden Rule’s refusal to process and pay its testing claims for the services it provided to Golden Rule’s insureds. “Abira has therefore alleged an injury in fact that is fairly traceable to Golden Rule’s challenged conduct and could be redressed by a damages award. That is enough for standing. To the extent that Golden Rule contends that the assignments are not valid and enforceable, that argument goes to the merits of Abira’s claims and does not implicate standing.” With the issue of standing out of the way, the court proceeded to analyze the motion to dismiss pursuant to Rule 12(b)(6). First, the court held that it cannot currently rule on the issue of ERISA preemption because the complaint is silent as to whether any of the insurance plans are subject to ERISA. However, the court noted that to the extent Abira’s state law claims are found to be preempted by ERISA, “Abira’s claims would not be dismissed but would be ‘recharacterize[ed]…as ones arising under ERISA.’” Therefore, Golden Rule’s motion to dismiss based on ERISA preemption was denied. As for the state law claims themselves, the court analyzed each in turn and found some of them sufficient and some of them deficient as currently pled. Based on its findings, the court granted the motion to dismiss as to the fraudulent and negligent misrepresentation, equitable and promissory estoppel, and quantum meruit and unjust enrichment claims, and denied the motion as to the breach of contract and breach of implied covenant of good faith and fair dealing claims.

Eighth Circuit

Keith Feder, M.D., Inc. v. U.S. Bancorp, No. 24-cv-4236 (LMP/SGE), 2025 WL 2522601 (D. Minn. Sep. 2, 2025) (Judge Laura M. Provinzino). Plaintiff Kevin Feder, M.D., Inc. is a healthcare provider that treated a patient who is a beneficiary of U.S. Bancorp’s Medical and Wellness Plan, an employer-sponsored healthcare plan governed by ERISA. Dr. Feder billed U.S Bancorp for nearly $550,000 in medical services for the patient, including surgery, injections, and physical therapy. Along with the bills, Dr. Feder sent a copy of the assignment his practice received from the patient. The third-party claims administrator of the plan, United Healthcare Services, Inc. (“UHS”), reimbursed the provider only $30,000 for the patient’s medical expenses. Dr. Feder sent numerous appeal letters disputing the payment amount for the claims. UHS never informed him that the plan contains an anti-assignment provision. After he was informed that the payment decisions were final, Dr. Feder filed suit under ERISA against U.S. Bancorp to challenge them. Because of the presence of the anti-assignment clause, U.S. Bancorp moved to dismiss Dr. Feder’s original complaint, arguing that he lacked standing to sue under Section 502(a)(1)(B). “Specifically, U.S. Bancorp argued that it could not have waived enforcement of the Plan’s anti-assignment provision because Feder only communicated with UHS – not U.S. Bancorp – during the claims process.” The court agreed and granted the motion to dismiss, but dismissed the complaint without prejudice and granted Dr. Feder leave to amend the complaint to allege either that U.S. Bancorp engaged in actions that demonstrate waiver or that UHS was U.S. Bancorp’s agent. Dr. Feder amended his complaint to assert the latter. U.S. Bancorp again moved for dismissal. The court granted its motion, this time with prejudice. The court agreed that under Minnesota law Dr. Feder could not demonstrate one crucial element of an agency relationship – control. “Feder argues that U.S. Bancorp has the right to control UHS, but the amended complaint pleads the exact opposite. The amended complaint alleges that U.S. Bancorp ‘delegated authority and discretion to decide internal claims and appeals relating to ERISA claims for benefits’ to UHS. UHS, therefore, ‘decide[s] on behalf of [U.S. Bancorp] if payment will be made directly to a medical provider’ and ‘whether or not to accept [an] assignment.’ Importantly, the amended complaint never alleges that U.S. Bancorp has any role – let alone a role of authoritative control – in processing the claims of R.M. or any other beneficiary of the Plan. Quite the opposite: UHS ‘decide[s]’ based on its ‘delegated authority and discretion’ whether to approve a particular claim and whether to accept an assignment. Because UHS, not U.S. Bancorp, ‘decides how [UHS] must go about’ processing claims, an agency relationship does not exist between U.S. Bancorp and UHS.” The court thus agreed with U.S. Bancorp that UHS did not function as its agent for the purposes of processing the claims and appeals at issue and that the complaint therefore does not show that U.S. Bancorp waived enforcement of the plan’s valid and unambiguous anti-assignment provision through UHS’s actions. The court accordingly held that the anti-assignment provision divests Dr. Feder of statutory standing to sue for his patient’s benefits, and that the complaint must be dismissed. Finally, the court decided to dismiss the action with prejudice because it is not likely that further amendment could plausibly allege the control element necessary to establish an agency relationship between UHS and U.S. Bancorp.

Tenth Circuit

CSMN Operations LLC v. Aetna Life Ins. Co., No. 24-cv-00368-NYW-RTG, 2025 WL 2513588 (D. Colo. Sep. 2, 2025) (Judge Nina Y. Wang). Plaintiffs are affiliated healthcare providers and patients who allege that defendant Aetna Life Insurance Company administered numerous ERISA-governed welfare benefit plans in a manner that systematically denied payment for mental health and substance abuse treatment in violation of the Mental Health Parity and Addiction Equity Act and ERISA. In this complicated action involving the claims of 42 patients, plaintiffs seek both equitable relief and payment of benefits, as well as interest and attorneys’ fees. Aetna and the welfare benefit plans moved to dismiss the action. Given the mix of the parties, the varying terms of the plans, and the scope of the lawsuit, the court’s decision ruling on the motions to dismiss was itself complex and varied. In short, the motions were granted in part and denied in part. As an initial matter, the court granted the motion to dismiss the claims related to three patients who are covered by plans not subject to ERISA. The court then considered whether claims related to a patient whose claims have been fully paid have been rendered moot. It agreed with the providers that benefits claims related to this patient should go forward as to plaintiffs’ requests for pre- and post-judgment interest and attorneys’ fees, and ruled accordingly. Next, the court turned to the main issue presented – whether the patients validly assigned the right to bring this action to the provider plaintiffs, such that they may sue under ERISA. Defendants asserted several grounds upon which to challenge the assignment of benefits. First, they argued that most of the assignments are invalidated because of anti-assignment provisions in the respective plan documents. For 20 of the patients, the court denied the motion to dismiss because those patients’ plans allow benefit assignments for in-network providers and the complaint is silent as to whether the providers are in or out of network. For the remaining patients, the court agreed with defendants that their plans contain unambiguous anti-assignment clauses. As a result, the court proceeded to consider whether Colorado law overrides these provisions in the fully insured plans, and also whether Aetna waived enforcement of the provisions through its actions with the providers. As to the first matter, the court agreed with plaintiffs that the applicable Colorado law regulating insurance falls within ERISA’s savings clause and that it requires insurers to both allow and honor assignments to providers. Accordingly, the court denied the motion to dismiss the benefit claims relating to the patients covered under fully insured plans. Turning to the issue of waiver, the court disagreed with plaintiffs’ suggestion that Aetna’s failure to assert the anti-assignment provisions, coupled with payment for some patients, amounts to waiver. Rather, it held that there is an element missing in these allegations, namely whether Aetna had notice of the patients’ assignments. In light of this silence, the court granted the motion to dismiss the provider’s claims for the remaining patients because they are barred by the anti-assignment provisions. Nevertheless, this dismissal was without prejudice to amend. With the anti-assignment provisions settled, the court proceeded to analyze defendants’ broader critiques of the assignments themselves. Defendants attacked the assignments with three arguments: (1) they only pertain to the named provider and not all of the affiliated entities; (2) they do not authorize the providers to sue; and (3) even assuming the providers can assert benefit claims in court, the assignments do not assign the patients’ other statutory rights under ERISA, so the providers cannot assert a violation of the Parity Act. The court took each of these points in turn. First, the court ruled that defendants are correct that the assignments only apply to the named legal entity and do not cover all of the provider plaintiffs. Second, the court disagreed with defendants that the assignments do not grant the right to sue for payments. Third, the court found that the assignments fail to expressly grant the providers the right to bring an equitable relief claim under ERISA. Thus, the court granted the motions to dismiss the providers’ Parity Act claim, and also dismissed the providers not named under the assignments. The court then took a moment to acknowledge that all of these holdings pertain only to the provider plaintiffs, not to the patient plaintiffs. However, the court stated that the complaint currently violates the Federal Rules of Civil Procedure because it does not identify the 42 patients by name. “Plaintiffs’ failure to properly name these Patients as the real parties in interest renders those Patients’ claims defective.” To rectify this, the court granted plaintiffs the opportunity to amend their complaint to include the patients as real parties in interest. Finally, the court had one last wrinkle to iron out. Defendants argued that the complaint suffers from misjoinder because the claims related to each patient turn on different facts, contracts, and legal issues. The court respectfully disagreed. It concluded that the claims arise out of a common nucleus of law and fact and out of the same series of transactions, such that considering them in a single action is entirely permissible. Accordingly, the motions to dismiss were denied to the extent they sought severance or dismissal of individual patients or plan defendants. For these reasons, the court granted in part and denied in part defendants’ motions to dismiss as outlined above.

Retaliation Claims

Third Circuit

Myers v. Preston Management, Inc., No. 1:25-CV-00028-RAL, 2025 WL 2533300 (W.D. Pa. Sep. 3, 2025) (Magistrate Judge Richard A. Lanzillo). Husband and wife Roger and Jennifer Myers bring this action against their former employer, Preston Management Inc., alleging that Preston violated Section 510 of ERISA by terminating their employment in retaliation for Mrs. Myers’ complaints about the company’s failure to timely remit employee contributions to their 401(k) accounts. Preston moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). The court denied the motion to dismiss in this decision. It held that Mr. Myers had both constitutional and statutory standing to pursue his claim, and that the complaint plausibly alleges that the employer’s stated reasons for terminating Mr. and Mrs. Myers were pretextual. “In the present case, the Complaint fairly posits that Preston terminated both Mrs. and Mr. Myers in retaliation for Mrs. Myers’ exercising her right to Preston’s timely remittance of employee contributions to the Plan and to frustrate their right to such timely remittances under the Plan and applicable regulations.” The court rejected Preston’s argument that its belated remittance of the contributions negates the couple’s claims. It stated that, “among other things, Preston’s termination of the Plaintiffs eliminated their rights to timely remittances of 401(k) Contributions withheld from their paychecks. It also removed Mrs. Myers from a position from which she could monitor and insist on the company’s compliance with its obligations under the Plan and applicable regulations.” Accordingly, the court held that the factual allegations in the complaint and inferences that can reasonably be drawn from them are sufficient to state a claim for violation of Section 510.

Venue

Tenth Circuit

Dow v. Lumen Technologies Inc., No. 24-cv-02434-PAB-TPO, 2025 WL 2530659 (D. Colo. Sep. 3, 2025) (Judge Philip A. Brimmer). Plaintiffs Dolly Dow and Virginia Sakal are retirees of the telecommunications company now known as Lumen Technologies, Inc. Plaintiffs began receiving pension payments under the Lumen Combined Pension Plan upon their retirements in 2014 and 2015 respectively. This ERISA litigation arises from Lumen’s transfer of over $1.4 billion of its pension obligations to Athene Annuity and Life Co. and Athene Annuity & Life Assurance Company of New York in the fall of 2021, which affected tens of thousands of Lumen retirees and their beneficiaries, including plaintiffs. Although ERISA does not prohibit an employer from transferring pension obligations to an insurance company, it requires that fiduciaries obtain “the safest annuity available.” Athene, plaintiffs allege, is “a highly risky private equity-controlled insurance company with a complex and opaque structure,” and because of this, they maintain that the purchase of the Athene annuities was unsafe and therefore a violation of ERISA. Accordingly, on behalf of a putative class of similarly situated individuals, plaintiffs have sued Lumen, Athene, and State Street Global Advisors Trust Co. alleging the defendants committed fiduciary breaches and prohibited transactions under § 1104 and § 1106 of ERISA. The matter before the court here was a motion to transfer venue to the Western District of Louisiana pursuant to a forum selection clause found within the Lumen Combined Pension Plan. The clause at issue mandates that all claims “relating to” and “arising under” the plan be litigated in the Western District of Louisiana. However, the plaintiffs persuasively argued to the court that their claims neither relate to nor arise from the plan in which they no longer participate. The court agreed that plaintiffs’ injuries here do not arise from the plan, and noted that the parties are in agreement that plaintiffs received all the benefits to which they are entitled under the plan. “Instead, plaintiffs’ claimed injury arises from the fact that their pension benefits are not as secure as they should be under ERISA because their pension obligations were not transferred to the safest annuity available. The mechanism of their injury was not the creation or implementation of the Plan, but was the transfer of pension benefits to a third party, which would not have occurred if defendants had met their fiduciary obligations. Therefore, the Court finds that plaintiffs’ claims do not sufficiently relate to the Plan to be governed by the forum selection clause.” Moreover, the court agreed with plaintiffs that their claims do not seek to interpret or enforce the plan, but instead seek to enforce statutory rights under ERISA. The court stated that the nature of the relief plaintiffs seek in their complaint makes clear that they are not trying to enforce the plan, but instead attempts to disgorge any ill-gotten gains defendants received via the alleged fiduciary breaches and prohibited transactions. Additionally, the court rejected defendants’ assertion that plaintiffs’ claims require the court to interpret the plan to resolve the dispute. The court found that the claims instead require it to consider whether defendants’ conduct violated the fiduciary obligations ERISA imposes. For the foregoing reasons, the court concluded that plaintiffs’ claims fall outside the scope of the forum selection clause, making it inapplicable to this case. Accordingly, the court denied the motion to transfer and the case will continue to proceed in the District of Colorado.