Breach of Fiduciary Duty

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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

This week’s notable decision is from the putative class action case, Moura v. Kaiser Foundation Health Plan, Inc., No. C 17-02475 JSW, 2018 WL 1569812 (N.D. Cal. Mar. 30, 2018), which challenges Kaiser’s alleged pattern and practice of denying treatment for eating disorders in violation of ERISA and the California and Federal Health Parity Acts.  The court previously granted Kaiser’s motion to dismiss the original complaint on the basis that Moura failed to allege that he exhausted his administrative remedies for the denial of his claim for treatment of anorexia nervosa.  Moura then filed a first amended complaint alleging only a claim pursuant to 29 U.S.C. Section 1132(a)(3) for breach of fiduciary duty against the plan administrators. 
Continue Reading Kaiser Must Defend ERISA Breach of Fiduciary Duty Claim Challenging Its Treatment of Eating Disorders