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This week’s notable decision, Hurtado et al. v. Rainbow Disposal Co., No. 8:17-CV-01605-JLS-DFM, 2018 WL 3372752 (C.D. Cal. July 9, 2018), is a victory for ESOP plan participants, one that you don’t see too often these days.

This putative ERISA class action concerns a 2014 transaction in which waste management giant Republic Services bought Rainbow for $112 million in cash plus other consideration, according to documents filed with the SEC.  Yet according to separate documents filed with the DOL and IRS, the ESOP (which had owned 100% of Rainbow before the sale) received either $50.8 million or $48.8 million for its Rainbow stock. Of the $50.8 million or $48.8 million initially received, the ESOP did not initially distribute approximately $15 million which was held for nearly three years invested in treasuries yielding virtually no investment returns.
Continue Reading Plaintiffs Fully Defeat Five Motions To Dismiss ESOP Class Action

Good morning, ERISA Watchers!  Today’s newsletter is ERISA Watch-lite since I just returned from Hawaii this weekend and am slowly readjusting to life on the mainland.  Below are a small handful of the appellate decisions that came out over the past couple of weeks.  A case I want to highlight is one you may have already read by now, but since it’s SO good, it is this week’s notable decision – Nichols v. Reliance Standard Life Ins. Co., No. 3:17-CV-42-CWR-FKB, 2018 WL 3213618 (S.D. Miss. June 29, 2018).

In Nichols, Judge Carlton Reeves found that Reliance Standard Insurance Company abused its discretion in denying Nichols’ claim for long-term disability benefits.  Though it’s a tale as old as time, what makes this decision stand out is the Court’s analysis of Reliance Standard’s “decades-long pattern of arbitrary claim denials and other misdeeds.” 
Continue Reading Court Examines Two Decades of Reliance Standard Life Insurance Company’s Abuse of Discretion in Disability Benefit Claims

I’m pleased to report that this week’s notable decision is a Kantor & Kantor victory in the matter of Sangha v. Cigna Life Ins. Co. of New York, No. 17-CV-05158-HSG, __F.Supp.3d__, 2018 WL 3023514 (N.D. Cal. June 18, 2018), involving a termination of long-term disability benefits.  Sangha sought long-term disability (“LTD”) benefits relating to chronic pain secondary to cervical degenerative disc disease and C4 to C7 spinal fusion surgery.  Under the governing LTD policy, Sangha was entitled to benefits if she is “unable to perform the material duties of any occupation for which he or she may reasonably become qualified based on education, training or experience,” and if “solely due to Injury or Sickness…she is unable to earn more than 60% of…her Indexed Covered Earnings.”  Cigna paid Sangha for several years, though during the course of that time it denied her claim on three occasions and required her to go without benefits while she appealed those denials.  On its most recent denial, however, after the Social Security Administration found Sangha disabled, and she reimbursed Cigna for overpaid LTD benefits, Cigna refused to reinstate her claim.  That is, until now.
Continue Reading Firm Victory in Long-Term Disability Dispute Against Cigna Life Insurance Company of New York