This week’s notable decision comes out of the Ninth Circuit Court of Appeals in a matter involving employer contributions to a union pension plan, Lehman, et al. v. Nelson, et al., No.18-35321, __F.3d__, 2019 WL 6484254 (9th Cir. Dec. 3, 2019). The Court affirmed the district court’s holding that trustees of the IBEW Pacific Coast Pension Fund (“Pacific Coast Fund”) abused their discretion by interpreting Plan Amendment 24 (an attempted Rehabilitation Plan to right the ship of its underfunded, ‘critical status’ pension plan pursuant to the terms outlined in the Pension Protection Act of 2006 (“PPA”)) to apply to “pass-through” payments to be transferred to out-of-state plans. As part of the Pacific Coast Fund’s rehabilitation plan, the Fund’s trustees used Amendment 24 to the Plan to specifically create “non-benefit contributions” and excluded those from the definition of “contributions” for which contributions would need to be made to a traveler’s home fund.
Continue Reading Trustees Abuse Discretion by Interpreting Plan Amendment to Apply to “Pass-through” Payments Transferred to Out-of-State Plans
Court Permits Health Plan’s Equitable Lien Claim to Proceed Against Participant’s Attorneys
Good morning, ERISA Watchers! There weren’t any notable circuit court decisions this past week, so we want to highlight a district court decision involving a health plan’s attempt to seek an equitable lien on personal injury settlement proceeds. In Publix Super Markets, Inc. v. Figareau et. al., Case No. 8:19-cv-545, 2019 WL 6311160 (M.D. Fla. Nov. 25, 2019), Publix filed an ERISA action to obtain reimbursement for health benefits paid by its ERISA Plan. Publix is the sponsor and administrator of its Group Health Benefit Plan, which provides medical expense benefits to eligible employees and dependents. The Plan is self-funded, is not insured through commercial carrier health insurance, and includes a reimbursement provision.
Paul is a Publix employee and is enrolled in the Plan. Paul and Figareau are the parents of minor child L.P., who sustained an injury at birth. The Plan paid $88,846.39 in medical expense benefits related to her injury. Her parents retained Tejedor and the law firm Diez-Arguelles & Tejedor, P.A. (the “Attorney Defendants”) to bring a medical negligence action against the medical providers. The matter settled, and the funds were housed in a designated structured settlement account established by Paul and Figareau. There were additional funds that had been deducted from the gross settlement that either remained in the attorney Defendants’ trust account or are otherwise subject to the attorney Defendants’ possession and control.
Continue Reading Court Permits Health Plan’s Equitable Lien Claim to Proceed Against Participant’s Attorneys
Fifth Circuit Denies Attorneys’ Fees to Plaintiff for en banc Success Changing Judicial Standard of Review
This week’s notable decision is another terrible decision for ERISA plan participants out of the Fifth Circuit Court of Appeals: Ariana M. v. Humana Health Plan of Texas, Inc., No. 18-20700, __F.App’x__, 2019 WL 5866677 (5th Cir. Nov. 8, 2019) (“Ariana II”). This is a disappointing sequel in a case where the Fifth Circuit previously issued a plaintiff-friendly decision on the standard of review applied in ERISA cases. The case first reached the Fifth Circuit in Ariana M. v. Humana Health Plan of Texas, Inc., 884 F.3d 246 (5th Cir. 2018) (“Ariana I”) in which the court issued an en banc published decision overturning the longstanding position on standard of review in Pierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991). The court reversed and remanded the case to the district court for review under a de novo standard of review. (Read more about Ariana I in Brent Dorian Brehm’s Fall 2017 EBC Newsletter article: What Does de novo Review Mean Under ERISA?)
Continue Reading Fifth Circuit Denies Attorneys’ Fees to Plaintiff for en banc Success Changing Judicial Standard of Review