Hello, ERISA Watchers! I’m bringing you this mid-week report to share yesterday’s stunning decision from the Seventh Circuit Court of Appeals in Fessenden v. Reliance Standard Life Ins. Co., No. 18-1346, __F.3d__, 2019 WL 2589122 (7th Cir. June 25, 2019). Circuit Judge Barrett, authoring the panel opinion, explained that Reliance Standard could not enjoy deferential review because it blew its deadline to decide Fessenden’s appeal for long-term disability benefits. This is significant because some circuits allow plan administrators to claim “substantial compliance” when not meeting their deadlines to decide claims or appeals and invoke little or no penalty for these transgressions. The Seventh Circuit has made it clear to plan administrators: substantial compliance does not apply to ERISA’s regulatory deadlines. Make a decision on time or be subject to de novo review.
Continue Reading Seventh Circuit Holds that “Substantial Compliance” Does Not Apply to Blown Deadlines
Fourth Circuit Enforces the Right to a Full and Fair Review under ERISA
Happy Sunday, ERISA Watchers! This week I want to highlight two unpublished decisions from the Fourth Circuit Court of Appeals, both of which are plan participant friendly. The first case, Odle v. UMWA 1974 Pension Plan, No. 18-1398, __F.App’x__, 2019 WL 2539260 (4th Cir. June 20, 2019), involves a dispute over the amount of a survivor’s annuity benefit award under the United Mine Workers of America 1974 Pension Plan. The court reversed the grant of summary judgment for the Plan and remanded for further proceedings. The court found that the Plan erred by denying Plaintiff the opportunity to review the Dale Coal audit during the administrative process because it prejudiced her ability to pursue further investigation and argument in support of her claim. The audit documented potentially fraudulent underreporting of classified hours and Plaintiff must be given the opportunity to contest the Plan’s denial based on a full disclosure of documents relevant to her claim. The court explained that “procedural guidelines including the right to a full and fair review ‘are at the foundation of ERISA.’”
Continue Reading Fourth Circuit Enforces the Right to a Full and Fair Review under ERISA
Second and Eighth Circuits Affirm Dismissal of Imprudent Investment Lawsuits Involving SunEdison Stock
Good morning, ERISA Watchers! It’s been a beautiful sunny weekend here in San Francisco. Unfortunately, it hasn’t been so sunny for participants investing in SunEdison stock. This week’s notable decision is Usenko v. MEMC LLC, No. 18-1626, __F.3d__, 2019 WL 2344827 (8th Cir. June 4, 2019), where the Eighth Circuit affirmed the district court’s dismissal of this putative class action alleging that Defendants breached their duty of prudence with respect to keeping SunEdison stock in the defined-contribution retirement savings plan. Plaintiffs alleged that Defendants knew, or should have known, that between July 20, 2015 and April 21, 2016 that SunEdison was in poor financial condition and they should have removed SunEdison stock from the plan’s assets.
Continue Reading Second and Eighth Circuits Affirm Dismissal of Imprudent Investment Lawsuits Involving SunEdison Stock