Stark v. Reliance Standard Life Ins. Co., No. 24-6137, __ F.4th __, 2025 WL 1872420 (10th Cir. July 8, 2025) (Before Circuit Judges Matheson, Ebel, and Carson)

Legal practitioners in the United States generally abide by the “American Rule” for attorney’s fees, which is that each party in a lawsuit is responsible for paying its own legal fees, regardless of who wins or loses.

There are exceptions, however, and one of them is found in ERISA. In an effort to encourage parties to vindicate their rights under this statutory scheme, Congress included a fee-shifting provision, 29 U.S.C. § 1132(g), which provides that “[i]n any action under this subchapter…by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” In this week’s notable decision, the Tenth Circuit discussed this provision and addressed what the phrase “in any action” means.

The plaintiff in the case was Nancy Stark, the mother and legal guardian of Jill Finley. Finley was only 31 years old when she “suffered a sudden death cardiac arrest resulting in a hypoxic brain injury” in 2007. As a result, Finley became unable to perform her job duties as a mortgage underwriter. She submitted a claim for benefits to defendant Reliance Standard Life Insurance Company, the insurer of her employer’s long-term disability benefit plan.

Reliance approved plaintiff’s claim, and recommended that she also file a claim for Social Security Disability (“SSD”) benefits. The plan contained an offset provision that allowed Reliance to deduct from her benefit any SSD benefits she received, or to “deduct an estimate of the amount of the SSD benefit that you may be eligible to receive[.]” In February of 2008, Reliance began deducting an estimate of plaintiff’s SSD benefits under this provision.

Plaintiff asked Reliance to waive this deduction because of financial hardship, and Reliance agreed to do so while her SSD claim was pending. Plaintiff’s SSD claim was successful. As a result, in 2010 Reliance reasserted the offset provision and began deducting from her benefits in order to recoup the overpayment that had resulted.

Reliance paid plaintiff benefits for several years, periodically reviewing her claim. However, in April of 2022, Reliance terminated her benefits, contending that recent testing did not support her continued disability.

Plaintiff hired counsel, who submitted an administrative appeal, contending that Reliance’s termination decision was unsupported. In January of 2023, Reliance agreed to reinstate plaintiff’s benefits.

In connection with this decision, plaintiff’s counsel made two requests. First, counsel requested that Reliance pay “attorney fee[s] and cost for having to pursue the re-instatement of her [long-term-disability] benefits.” Second, for financial hardship reasons, counsel requested that Reliance reimburse plaintiff for the SSD deductions it had taken since 2008.

Reliance rejected both requests. First, Reliance stated that it was not required to pay attorney’s fees. Second, it informed counsel that the SSD offset was “both correct and appropriate” and that Reliance was required to apply it under the policy, which “does not provide a provision which allows [it] to accommodate financial hardship requests.”

Plaintiff then filed suit, asserting three claims for relief under ERISA: (1) for benefits under 29 U.S.C. § 1132(a)(1)(B); (2) for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3) for “failing to administer the plan in accordance with applicable law”; and (3) for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3) for “failing to inform and providing misleading communications.” Plaintiff included in her requested remedies reimbursement of all attorney’s fees and costs incurred during her administrative appeal.

Reliance filed a motion to dismiss Plaintiff’s complaint, which the district court granted. Plaintiff then appealed, making three arguments: (1) she alleged plausible claims for equitable relief under 29 U.S.C. § 1132(a)(3) to recover the costs she incurred in successfully appealing Reliance’s denial and obtaining reinstatement of her benefits; (2) Reliance’s SSD offset “violated its own internal policies, the terms of her policy, and breached its fiduciary duties”; and (3) she plausibly alleged concrete harm arising from Reliance’s alleged breach of fiduciary duty.

The court addressed the issues in turn, spending the most time on the first issue. On this issue, Plaintiff contended that because she had alleged claims under 29 U.S.C. § 1132(a)(3), she was allowed to seek “appropriate equitable relief” under ERISA. This potential relief, she argued, included the traditional equitable remedy of surcharge, a monetary award which would compensate her for losses resulting from Reliance’s breach of fiduciary duty and make her whole. Plaintiff contended that this surcharge should allow her to recover the attorney’s fees she incurred during her successful administrative appeal.

The Tenth Circuit was unimpressed. It characterized ERISA’s fee-shifting provision as “limited” and noted that “several of our sister circuits have considered when attorney’s fees are recoverable in an ERISA action. All seven circuits to consider the issue have concluded that § 1132(g)(1) does not authorize awards for work done in pre-litigation administrative proceedings.” The Tenth Circuit agreed with these circuits that the word “action” in § 1132(g)(1) refers to “a suit brought in court” and does not include pre-litigation proceedings.

The court further contended that this interpretation promoted “the soundness and stability of plans with respect to adequate funds to pay promised benefits.” The court reasoned that if benefit plans and their insurers were potentially liable for attorney’s fees for pre-suit proceedings, this might “encourage[] plans to pay ‘questionable claims in order to avoid liability for attorneys’ fees,’ and this incentive could ‘reduce the [plans’] ‘soundness and stability.’”

Plaintiff, of course, was aware of this precedential history interpreting § 1132(g) and thus suggested an alternative. She argued that she was not seeking fees under § 1132(g) at all, and was instead seeking them under § 1132(a)(3) in the form of an equitable surcharge. Thus, while fees might be limited under the statutory command of § 1132(g), the court’s discretion under the expansive “appropriate equitable relief” provision in § 1132(a)(3) allowed it to award fees in a much broader fashion. Plaintiff cited a Ninth Circuit case, Castillo v. Metropolitan Life Ins. Co., 970 F.3d 1224 (9th Cir. 2020), in support.

However, the Tenth Circuit agreed with the Ninth Circuit’s ultimate decision in Castillo, which was that attorney’s fees are not available under § 1132(a)(3) as a form of equitable relief. The Tenth Circuit ruled that because ERISA explicitly addresses the availability of fees in § 1132(g), it is improper to apply other provisions in ERISA, such as § 1132(a)(3), to award the same relief.

Furthermore, “under the rules governing attorney’s fees, ‘Congress must provide a sufficiently ‘specific and explicit’ indication of its intent to overcome the American Rule’s presumption against fee shifting,’ and here, Congress omitted any reference to fees incurred in administrative proceedings.” The Tenth Circuit stated that ruling otherwise would “allow[] a backdoor route to pre-litigation attorney’s fees in the form of equitable relief,” a conclusion which “makes little sense” if ERISA’s fee-shifting provision excludes such fees.

The Tenth Circuit then moved on to the other two issues, which it quickly dispatched. The court rejected plaintiff’s claims regarding reimbursement of the SSD offset on the ground that they were “time-barred and waived.” Reliance had informed plaintiff of the offset in 2010, and she never requested a review of that decision until 2023, which was well past the 180-day appeal window under the plan. The court also ruled that several of plaintiff’s arguments on this issue were not properly raised before the district court and thus would not be entertained on appeal.

Finally, the Tenth Circuit agreed with the district court that plaintiff had suffered no concrete harm resulting from her allegations that Reliance breached its fiduciary duty by mishandling her administrative appeal. According to the court, this claim “is basically a reiteration of her other two claims.” As a result, because those other claims were unsuccessful on appeal, “reversing this claim’s dismissal when its substance is either a derivative or a rebrand of the two other dismissed claims makes little sense.”

In the end, while ERISA carves out an exception to the American Rule, that exception has its limits. The Tenth Circuit thus joined a host of other circuits in determining that pre-litigation legal work is not compensable under ERISA.

*          *          *

Before moving on to the rest of our cases this week, there were some very interesting recent ERISA developments that we’d like to bring to our readers’ attention. First, following an amicus curiae brief filed by the Solicitor General in May arguing that ERISA preempts an Oklahoma law aimed at pharmacy benefit managers, the Supreme Court on June 30, 2025, denied the State’s petition for certiorari in Mulready v. Pharmacy Care Management Association. (The Tenth Circuit’s decision was the case of the week in Your ERISA Watch’s August 23, 2023 edition.)

Speaking of amicus briefs, the Department of Labor just filed one in the Ninth Circuit in the first appeal in the recent spate of forfeiture cases, arguing in Hutchins v. HP, Inc. that HP’s use of employer contributions to a 401(k) plan that had not yet vested when employees left HP to defray HP’s employer match obligations did not violate ERISA. (Your ERISA Watch covered the district court’s decision in favor of HP in our February 12, 2025 edition.)

Finally, the Eleventh Circuit issued a fascinating arbitration decision this week vacating an award in favor of a plaintiff, which engendered a scathing dissent by Judge Tjoflat. We’re not covering it because it is mostly about arbitration and not ERISA, but we’ll drop this link here for further reading if arbitration is your jam: Nalco Co. LLC v. Bonday, No. 22-13546, __ F.4th__, 2025 WL 1903042 (11th Cir. July 10, 2025) (Before Circuit Judges Branch, Luck, and Tjoflat). We are out of the summer doldrums.  

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

Arbitration

Second Circuit

Shafer v. Morgan Stanley, Nos. 24-3141(L), 24-3271(XAP) , __ F. App’x __, 2025 WL 1890535 (2d Cir. Jul. 9, 2025) (Before Circuit Judges Lynch, Sullivan, and Menashi). A group of former financial advisors at Morgan Stanley sued their old employer in a putative ERISA class action alleging that the fiduciaries of Morgan Stanley’s deferred compensation programs were illegally forfeiting protected benefits. On November 21, 2023, the district court entered an order compelling individual arbitration of plaintiffs’ claims. (Your ERISA Watch summarized the decision in our November 29, 2023 newsletter). Although the decision was arguably favorable to the Morgan Stanley defendants, they nevertheless appealed the order to the Second Circuit contending that the district court improperly concluded that the deferred compensation plans at issue are indeed governed by ERISA. Plaintiffs then cross-appealed, contending that the district court erred in granting Morgan Stanley’s motion to compel arbitration. Additionally, Morgan Stanley petitioned for a writ of mandamus to nullify the portion of the district court’s opinion that concludes the plans are ERISA-governed. The Second Circuit dismissed both the appeal and cross-appeal and denied the petition for writ of mandamus in this brief unpublished decision. The court concluded that it lacked appellate jurisdiction to rule on either appeal or cross-appeal and that neither was properly before it given that the district court’s order compelling arbitration is not a final decision and not an appealable interlocutory order under the Federal Arbitration Act. Morgan Stanley argued that the district court’s order amounted to “an effective denial,” making it appealable under section 16(a)(1)(B) of the Federal Arbitration Act, but the court of appeals was not persuaded. “Morgan Stanley asks us to take the unprecedented step of holding that even when a self-titled motion to compel is granted, it may nevertheless be deemed a ‘den[ial]’ within the meaning of section 16(a)(1)(B) if the district court comments on the merits. As ‘statutes authorizing appeals are to be strictly construed,’ Perry Educ. Ass’n v. Perry Loc. Educators’ Ass’n, 460 U.S. 37, 43 (1983), we decline to broaden the reach of section 16 here.” In addition to dismissing the appeal and cross-appeal, the Second Circuit also denied the alternative petition for writ of mandamus, concluding that defendants could not meet the “onerous” requirements for a writ of mandamus. The Second Circuit stated that Morgan Stanley could not show that its right to issuance of the writ was either “clear” or “indisputable,” and in fact offered reasons why the district court needed to comment on whether the plans were governed by ERISA in order to reach a decision on the motion to compel arbitration. The appeals court further noted that the district court’s conclusion is not binding during the arbitration process, and that Morgan Stanley is free to argue before the arbitrator why it believes the plans fall outside of ERISA. Accordingly, the Second Circuit declined to issue the requested writ given these factors.

Breach of Fiduciary Duty

First Circuit

Waldner v. Natixis Invest. Managers, L.P., No. 21-10273-LTS, 2025 WL 1871290 (D. Mass. Jun. 26, 2025) (Judge Leo T. Sorokin). Plaintiff Brian Waldner filed this class action ERISA lawsuit to challenge the actions of the fiduciaries of the Natixis Investment Managers’ 401(k) Plan. He alleges that the fiduciaries favored proprietary funds offered by Natixis (which is an investment management firm) and by its affiliated firms to the detriment of the plan participants. Mr. Waldner maintains that defendants failed to adequately manage the funds offered by the plan and to timely remove the challenged investment options when they continued to perform poorly over extended periods of time. The court understood Mr. Waldner’s fiduciary breach claims as resting on two overarching theories: (1) a wholesale theory related to defendants’ overall management of the plan; and (2) a retail theory of breach relating to the five specific funds at issue in the litigation. Mr. Waldner asserted claims of disloyalty, imprudence, and failure to monitor co-fiduciaries. In previous decisions the court denied defendants’ motion to dismiss, certified Mr. Waldner’s class of participants, and denied summary judgment. The case then proceeded to a two-week bench trial in January and February of this year. This decision constituted the court’s findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). In its findings of fact, the court noted the extensive evidence documenting the shortcomings of the committee’s overall management of plan, including its failure to meet regularly for years, its failure to adopt a formal procedure for taking meeting minutes, which resulted in three meetings having no minutes, its failure to review the reports of the outside consultant, Mercer Investments LLC, its failure to conduct a structural review of the plan from 2009 and 2021, its delay in removing funds, and its failure to formally adopt an investment policy statement until 2018. The court further noted that most, but not all, of the investment options in the plan were proprietary funds, and that the committee members consistently selected proprietary funds when they did eventually replace underperforming funds. The findings of fact also documented the poor performance of the five funds at issue. Given these findings of fact, the conclusions of law were something of a surprise twist. The court even nodded its head to this fact by stating that this case is neither black or white “but shaded in grey and charcoal.” For pleading purposes, standing purposes, and class certification purposes, the court was adamant there was more than enough to give reasonable rise to suspicion of misconduct. Ultimately, however, the court found that the facts did not “carry the day at trial.” The court entered judgment in favor of defendants on all of the class’s claims. The court could not say at the end of the day that a prudent fiduciary would have acted differently than defendants, nor that the self-interested decision-making was not also in the best interest of the plan participants. Moreover, the court determined that the class failed to show that the committee’s selection of the funds was disloyally motivated, stating that even if “the Committee had an incentive to choose proprietary funds, it was at best a marginal incentive.” The court also recognized that the default investment options in the plan were non-proprietary Vanguard Target Date Funds, meaning if a plan participant took no action to invest his or her funds they would not be invested in the proprietary offerings. There was also evidence, the court stated, that the inclusion of the proprietary funds in the plan was the result of non-conflicted motives. “Certainly, there was a prevalence of proprietary funds on the Plan. But three factors convince the Court this was not the result of improper motives. First, a vocal contingent of Plan participants wanted proprietary funds on the Plan… Second, Committee members believed that Natixis-affiliated funds were the best funds and that adding those funds to the Plan menu was in the best interests of Plan participants… Third, there has been an array of non-proprietary funds on the Plan menu throughout the Class Period.” Not only did the court not buy plaintiff’s wholesale theory of disloyalty, but the court also found that the overall mismanagement of the plan did not amount to a breach of the duty of prudence. While there was certainly evidence demonstrating that defendants’ management was “not great,” the court concluded that the committee showed prudence in some key ways, and was never “asleep at the wheel at any point.” The court added that “[i]n any case, Plaintiffs have not shown that the Committee’s generalized shortcomings led to any specific breaches of the duty of prudence.” Finally, the court pulled apart plaintiff’s chosen comparators of the challenged funds, and explained why, in its view, they were not suitable benchmarks to demonstrate loss. Thus, under the totality of the circumstances, the court determined that defendants did not breach their duties of prudence or loyalty, nor their derivative duty to monitor, and accordingly entered judgment in their favor on all counts.

Fifth Circuit

Federation of Americans for Consumer Choice, Inc. v. U.S. Department of Labor, No. 3:22-CV-0243-K-BT, 2025 WL 1898668 (N.D. Tex. Jul. 9, 2025) (Judge Ed Kinkeade). Plaintiff Federation of Americans for Consumer Choice, Inc. is an organization made up of insurance agencies, insurance agents, and marketing entities. It filed this action against the United States Department of Labor to challenge the Labor Department’s recently (re)established Fiduciary Rule and new set of prohibited transaction exemptions. Plaintiff argued the Fiduciary Rule should be vacated as inconsistent with ERISA, the Internal Revenue Code, and the Administrative Procedure Act, and as an arbitrary and capricious agency action. On June 30, 2023, a Magistrate Judge issued a report and recommendation urging the court to deny the Department of Labor’s motion to dismiss for lack of jurisdiction, and to grant in part and deny in part plaintiff’s and defendant’s cross-motions for summary judgment. The parties responded by filing objections to the Magistrate’s report. Plaintiff also submitted a notice of supplemental authority regarding the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, 144 S.Ct. 2244 (2024), to which defendant responded. After conducting a de novo review of the proposed findings, conclusions, and recommendations to which objections were made, the court issued this strikingly sparse order overruling the objections and adopting the Magistrate Judge’s recommendations as the holdings of the court. The court then formally vacated the portions of the Rule’s text and preamble “that allow consideration of Title II investment advice relationships when determining Title I fiduciary status, including the New Interpretation’s (i) allowance of review that a single rollover ‘can be the beginning of an ongoing advice relationship’ to Title II plans, PTE 2020-02, 85 Fed. Reg. at 82806; (ii) inclusion of potential ‘future, ongoing relationships’ to Title II plans, id. at 82805; and (iii) conclusion that ‘an ongoing advisory relationship spanning both the Title I Plan and the IRA satisfies the regular basis prong.’” The court stated that these provisions exceeded the Department of Labor’s authority under ERISA and constituted an arbitrary and capricious interpretation of the five-part test to determine whether the financial providers were acting as investment advice fiduciaries.

Disability Benefit Claims

Tenth Circuit

J.J.H. v. Unum Life Ins. Co. of Am., No. 23-cv-02288-CNS-JPO, 2025 WL 1896456 (D. Colo. Jul. 9, 2025) (Judge Charlotte N. Sweeney). In January of 2022 plaintiff J.J.H. contracted the COVID-19 virus. Plaintiff’s COVID infection led to long-haul COVID and triggered an autoimmune response which caused fatigue, cognitive decline, brain fog, and the onset of postural orthostatic tachycardia syndrome (“POTS”). Plaintiff is a transactional attorney who was employed by an international law firm. At first she attempted to continue working from home on a reduced basis. However, in April 2022, she stopped working and submitted a claim for short-term disability benefits based on post-COVID fatigue and cognitive attention deficit. Her claim was approved and in June 2022, after she reached the maximum benefit period for short-term disability benefits, defendant Unum Life Insurance Company of America transitioned her claim to a long-term disability claim. This ERISA litigation stems from Unum’s denial of J.J.H.’s claim for long-term disability benefits. Unum rendered this decision after its reviewing medical professionals concluded that no restrictions were supported based on plaintiff’s medical records. The administrative record and merits briefs were submitted, and the parties jointly moved the court to decide whether Unum’s denial was arbitrary and capricious. In this order the court found that it was not, and affirmed the benefit determination. Plaintiff challenged the adverse benefit decision by raising five arguments before the court. First, she argued that the decision was not supported by substantial evidence and that Unum rejected out-of-hand the opinions of her treating doctors. Second, plaintiff argued that Unum improperly relied on the fact that she performed some work post-COVID to preclude a later finding of disability. Third, plaintiff maintained that Unum could not reconcile its contradictory positions for her short-term disability and her long-term disability benefit claims. Fourth, she contended that Unum did not engage in a meaningful dialogue with her on appeal as required by Tenth Circuit precedent. Finally, plaintiff argued that Unum has a conflict of interest and its failure to conduct an in-person medical examination highlights how this conflict adversely affected her claim. The court addressed each argument. To begin, it disagreed with J.J.H. that the benefit determination was not supported by substantial evidence. To the contrary, the court noted that the record reflects a lengthy medical review process conducted by Unum and the fact that the final decision came after six levels of review conducted by four medical professionals, all of whom determined that plaintiff’s restrictions and limitations were not supported by the record. Moreover, although Unum’s doctors disagreed with plaintiff’s physicians, the court stated that the record does not reflect that Unum rejected those opinions out of hand. Next, the court concluded that Unum’s medical reviewer’s consideration of plaintiff’s post-COVID work history “was merely one fact they considered,” and that it did not render the entire benefits decision arbitrary and capricious. As for the discrepancy between the approval of the short-term disability claim on the one hand and the denial of the long-term disability claim on the other, the court concluded that it was appropriate for Unum to conduct a more thorough review process at the long-term disability benefit stage. The court further stated that it was not persuaded by plaintiff’s argument that Unum failed to engage in a meaningful dialogue with her. In the court’s view the record showed that Unum communicated with J.J.H. throughout the administrative claims process and provided detailed reasons for its denial in language that was reasonably clear. Finally, the court declined to find the denial arbitrary and capricious based on Unum’s conflict of interest. It noted that the conflict was mitigated thanks to Unum’s decision to retain outside physicians to perform the medical reviews, and stated that Unum did not need to conduct an in-person exam as it was “unclear what a physical examination would have shown.” For these reasons, the court concluded that the denial of benefits was not an abuse of discretion and accordingly entered judgment affirming Unum’s decision.

Discovery

Sixth Circuit

Cumalander v. Bluecross Blueshield of Tenn., Inc., No. 1:24-cv-00176-TRM-CHS, 2025 WL 1879532 (E.D. Tenn. Jul. 2, 2025) (Magistrate Judge Christopher H. Steger). After plaintiff William Cumalander was diagnosed with prostate cancer in 2022, his radiology oncologist recommended that he undergo proton beam radiation therapy to destroy the cancerous cells and stop the growth of the tumor. Mr. Cumalander had health insurance through defendant Bluecross Blueshield of Tennessee and requested approval of the use of proton beam radiation to treat his cancer. Bluecross denied the request for benefits, citing its policy classifying the treatment as “investigational.” In this putative class action Mr. Cumalander seeks to represent others who were also denied proton beam radiation therapy for the treatment of their prostate cancer by defendant. He asserts two causes of action under ERISA for wrongful denial of benefits and breach of fiduciary duty. Before the court was defendant’s motion to compel wherein Bluecross sought documents and interrogatory answers from Mr. Cumalander in order to help inform its defenses to his class allegations and to challenge the adequacy and typicality certification requirements under Rule 23(a). Among some other requests, defendant sought all of Mr. Cumalander’s medical information not currently in its possession, including all of his medical records from January 1, 2017 to the present. The court denied Bluecross’ motion to compel in this decision. As an initial matter, the court noted that discovery in ERISA cases is generally disfavored and limited, and concluded that this general rule should apply here although the dynamics are reversed given that the defendant is the party seeking discovery. Against that backdrop, the court considered whether defendant’s broad discovery requests are relevant to the adequacy and typicality requirements for Mr. Cumalander to serve as a class representative. It found they were not. With regard to Mr. Cumalander’s adequacy, the court concluded that the focus should be on whether the medical information and diagnosis he presented to Bluecross, which resulted in the denial of his claim for proton beam radiation, “created in him the same interest, and caused him to suffer the same injury, as other putative class members.” And whether Mr. Cumalander is typical of the absent class members, the court went on, should likewise be based upon the medical information Bluecross actually possessed before denying the treatment. Thus, the court agreed with Mr. Cumalander that his suitability as a class representative should not turn upon medical information that Bluecross never had, saw, or considered when it decided to deny his claim for proton beam radiation therapy, particularly as there is no evidence that Bluecross based its denial on anything other than its blanket policy to deem such treatment “investigational.” Therefore, the court decided against allowing discovery of this medical information, which as it noted “would increase expenses, intrude upon Plaintiff’s privacy, and introduce evidence that is not relevant to the claims and defenses in this case.” Defendant’s motion to compel plaintiff to respond to the challenged interrogatories and produce the challenged documents was accordingly denied.

ERISA Preemption

Fourth Circuit

South Atlantic Division, Inc. v. MultiPlan, Inc., No. 4:24-cv-05454-SAL, 2025 WL 1898965 (D.S.C. Jul. 9, 2025) (Judge Sherri A. Lydon). Two medical providers filed a state law action in South Carolina state court against MultiPlan, Inc., EBPA, LLC, and American Employers Alliance, Inc. seeking payment for medical care they provided to a patient named J.M. Defendants removed the action to federal court. They then moved to dismiss the complaint, arguing the claims are preempted by ERISA. The providers, meanwhile, moved to remand their action back to state court, arguing that their allegations do not concern the right to benefits under the patient’s ERISA-governed healthcare plan. The court first addressed the motion to remand. As a threshold matter, the court concluded that the ERISA-governed plan is implicated here as the record “contains clear evidence that J.M.’s plan is ERISA-governed.” It then applied the two-part Davila test to assess whether the state law claims are completely preempted by ERISA, and by extension whether it has jurisdiction over this action. The court concluded that both parts of the test demonstrate complete preemption under Section 502(a). First, the court found that the providers have standing to sue under ERISA as they have a valid assignment of benefits from the patient, and because their complaint, at least in part, rests on the assertion of rights derived from that assignment. Second, the court determined that the claims at issue fall within the scope of ERISA because their state law claims are “hybrid claims” implicating both the right-to-payment and the rate-of-payment. Third, the court concluded that the state law claims cannot be resolved without interpreting the terms of the ERISA plan. “Although they contend the rate of payment is governed by the Facility Agreement, Plaintiffs’ claims—particularly those brought under their assignment from J.M.—require the court to interpret whether J.M. was entitled to benefits under the Plan. This necessarily implicates the right to payment, which can be resolved only by interpreting the Plan’s terms regarding coverage, eligibility, and reimbursement.” In sum, the court concluded that the claims are completely preempted by ERISA and that the action should not be remanded back to state court. The court then assessed the motion to dismiss. Here, the court considered whether plaintiffs’ claims are conflict preempted under Section 514. It determined that they were, stating, “Plaintiffs’ complaint makes clear that the right to payment under the Facility Agreement is predicated in J.M.’s entitlement to benefits under the Plan. Accordingly, the court finds that Plaintiffs’ remaining state-law claims relate to an ERISA plan and are therefore conflict preempted under § 514.” Accordingly, the court granted the motion to dismiss the state law causes of action under Rule 12(b)(6) for failure to state a claim. However, the court gave plaintiffs leave to amend their complaint to assert new claims under ERISA in connection with the unpaid healthcare claims at issue.

Tenth Circuit

Hubsmith v. Securian Life Ins. Co., No. 2:25-cv-00423-TC, 2025 WL 1880485 (D. Utah Jul. 8, 2025) (Judge Tena Campbell). This action arises from an accident that occurred when plaintiff Shan Hubsmith was operating a radial saw while working on home improvement projects. Mr. Hubsmith cut off four fingers on his left hand and lacerated his thumb. Surgeons were able to reattach two of the fingers completely, but two others were partially amputated. Mr. Hubsmith is an employee of Home Depot, USA, Inc. and through his employment he is insured under a dismemberment policy issued by Securian Life Insurance Company and Securian Financial Services, Inc. Although Mr. Hubsmith’s complaint is somewhat muddled, it does allege that the policy provides that “if a thumb and finger of one hand are lost, 25% of the total policy amount will be disbursed.” Mr. Hubsmith presumably did not receive a disbursement from the policy as he did not completely sever his thumb. Nevertheless, Mr. Hubsmith alleges that he was told by an unidentified sales associate that cutting off a single finger or multiple fingers would be recoverable as a loss under the policy. The complaint does not identify whether the sales associate was employed by Home Depot or by Securian. Mr. Hubsmith filed his action on May 2, 2025 in state court in Utah alleging claims for breach of contract, fraudulent misrepresentation, and breach of the implied covenant of good faith and fair dealing. In the caption he only named the Securian defendants, but in the body of the complaint he named Home Depot as the sole defendant. The Securian defendants promptly removed the action to federal court and then filed a motion to dismiss, arguing the state law claims are preempted by ERISA. The court agreed, and in this decision, granted the motion and dismissed the state law claims with prejudice. The court held that all of Mr. Hubsmith’s state law claims relate to the availability of benefits under the relevant dismemberment policy or about representations made about those benefits, and that these claims can only be asserted as causes of action under ERISA. Although Home Depot is not formally named as a defendant, the court added that the state law claims that Mr. Hubsmith intended to bring against Home Depot would likewise be preempted by ERISA. Accordingly, the court dismissed the state law claims from this action with prejudice. The court did note, however, that Mr. Hubsmith is not precluded from filing an appropriate action under ERISA. 

Life Insurance & AD&D Benefit Claims

Fifth Circuit

Metropolitan Life Ins. Co. v. Lewis, No. 3:24-cv-00313, 2025 WL 1866300 (S.D. Tex. Jul. 7, 2025) (Magistrate Judge Andrew M. Edison). Reva Garrison Lewis died on July 13, 2023, from multiple gunshot wounds. She was shot by her husband Gregory Lewis’s girlfriend, Jaila Stanley. Ms. Stanley has been arrested and charged with Ms. Lewis’s murder. No charges have been brought against Mr. Lewis, though he was present at the time of the murder and Ms. Lewis’s family insists that he was involved in the murder. An investigator with the Houston Sheriff’s Department states that the murder case is open and ongoing, but declined to comment on whether Mr. Lewis will be charged with any crime related to his wife’s death. Because of this, Metropolitan Life Insurance Company (“MetLife”) has delayed paying Mr. Lewis his designated share of his wife’s basic life insurance, supplemental life insurance, and accidental death benefits. On July 26, 2023, MetLife received an irrevocable assignment, assigning $22,511.25 of Mr. Lewis’s share of the plan benefits to a funeral home for his wife’s funeral expenses. The funeral home then assigned the benefits to Claim-Pro, LLC (Claim-Pro is one of the two defendants in this action alongside Mr. Lewis). MetLife subsequently filed this interpleader action, requesting the court adjudicate who is the proper beneficiary (or beneficiaries) of the insurance benefits that are designated to go to Mr. Lewis. In this decision the court addressed two pending motions: (1) Claim-Pro’s motion for leave to file a first amended pleading; and (2) MetLife’s Rule 12(b)(6) motion to dismiss Claim-Pro’s counterclaims. To begin, the court denied the motion for leave. It held that Claim-Pro failed to demonstrate good cause for its motion, as it provided no explanation for its failure to amend its pleadings before the deadline to do so had passed. The court wrote, “I will not close my eyes to Claim-Pro’s complete disregard for the deadlines imposed by the Docket Control Order.” The court then turned to MetLife’s motion to dismiss. Claim-Pro has asserted three counterclaims: (1) a claim for benefits under ERISA Section 502(a)(1)(B); (2) a claim for equitable relief under ERISA Section 502(a)(3); and (3) a claim for breach of the Texas Prompt Payment of Claims Act. The court denied the motion to dismiss the claim under Section 502(a)(1)(B), concluding that the well-pleaded facts in the complaint plausibly state a claim under Section 502(a)(1)(B) for the accidental death benefits. The court further noted that Claim-Pro may seek prejudgment interest, in addition to the benefits, as well as pursue a claim for attorneys’ fees under Section 502(g)(1). However, the court agreed with MetLife that Claim-Pro was not seeking any equitable form of relief, and thus its claim under Section 502(a)(3) should be dismissed. The court also dismissed Claim-Pro’s claim under the Texas Prompt Payment of Claims Act, since that claim is based on the failure to timely distribute plan benefits, which is naturally preempted by ERISA.

Medical Benefit Claims

Ninth Circuit

Fred G. v. Anthem Blue Cross Life and Health Ins. Co., No. 2:22-cv-05710-FLA (Ex), 2025 WL 1865017 (C.D. Cal. Jul. 7, 2025) (Judge Fernando L. Aenlle-Rocha). Plaintiff Fred G. is a participant in the Director’s Guild of America – Producer Health Plan, and his son J.G. is a beneficiary of the Plan. This action arises from the Plan’s denial of one year of residential mental health treatment J.G. received from 2020 to 2021 for the treatment of several long-standing mental health conditions, including substance use disorder. After approving J.G.’s claim as medically necessary for less than three weeks, the benefits committee ultimately denied further treatment under the MCG Residential Behavioral Health Level of Care guidelines for children and adolescents. This case went to a bench trial on December 6, 2024. Upon consideration of the evidence and the parties’ competing arguments, the court issued this decision under Federal Rule of Civil Procedure 52(a) constituting its findings of fact and conclusions of law. As an initial matter, the parties disputed the appropriate standard of review. While it is true that the Plan allows the board of trustees to allocate and delegate discretionary authority to the benefits committee, such delegation must be in writing and “by resolution duly adopted.” During the trial, defendant did not admit any record evidence to establish that the board vested the benefits committee with requisite discretionary authority. Accordingly, the court found that the denial of benefits was subject to de novo review. The court then concluded that “Plaintiff has met his burden to prove the residential treatment at issue was medically necessary with credible, persuasive evidence.” Under the relevant MCG guidelines, discharge from residential treatment initially found to be medically necessary is only appropriate when there is adequate evidence of patient stabilization or improvement. The court determined that none of the reviewing doctors discussed how J.G. met the factors for discharge and in fact indicated in their assessments that J.G.’s chronic conditions would not be expected to improve with short-term, less intense interventions, and by extension, “that discharge based on adequate patient stabilization or improvement was not warranted, and continued residential treatment was medically necessary, because J.G.’s medical needs were not manageable at an available lower level of care.” Additionally, the court agreed with Fred G. that the benefits committee failed to provide a full and fair review of his claim due to a fundamental failure to explain that the Plan required attempting lower levels of care before residential treatment, rendering the denial procedurally deficient, as well as substantively improper. “Defendant’s inadequate notice deprived Plaintiff of the opportunity to ‘answer[] in time’ the Plan’s questions about lower levels of care, engage in ‘meaningful dialogue’ on the issue of medical necessity, and receive a ‘full and fair’ review of the denial of his claim. Defendant’s subsequent letters to Plaintiff were similarly deficient and failed to provide Plaintiff a ‘full and fair’ review.” For these reasons, the court concluded that defendant wrongly determined that J.G.’s continued residential treatment was not medically necessary and incorrectly denied coverage for the continued care. The court accordingly entered judgment in favor of plaintiff on his claim for benefits and determined that the family is entitled to a full award of the benefits, prejudgment interest, and reasonable attorneys’ fees under Section 502(g)(1). However, the court denied Fred G.’s second cause of action for breach of fiduciary duty under Section 502(a)(3). Plaintiff sought equitable relief to enjoin the Plan from “using level of care guidelines that fall below reasonable standards in the medical community, either as written or as applied, or both,” in addition to his request to recover the full amount of benefits that were denied. But the court determined that plaintiff did not demonstrate that either he or his son are likely to have future claims denied based on the level of care guidelines here, or that any other form of equitable relief is warranted for the non-party beneficiaries of the Plan. The court thus held that plaintiff is not entitled to equitable relief under Section 502(a)(3).

Pension Benefit Claims

Ninth Circuit

Scott v. AT&T Inc., No. 20-cv-07094-JD, 2025 WL 1892819 (N.D. Cal. Jul. 9, 2025) (Judge James Donato), Scott v. AT&T Inc., No. 20-cv-07094-JD, 2025 WL 1903673 (N.D. Cal. Jul. 9, 2025) (Judge James Donato).This putative ERISA class action against defendants AT&T Inc., the AT&T Defined Benefit Plan, and AT&T Services, Inc. centers around the mortality assumptions the plan used to calculate joint and survivor annuity benefits and alleges that these factors were unreasonable and resulted in benefits that were not actuarially equivalent to single life annuities. Plaintiffs allege that the challenged actuarial factors were “fifty years out of date,” which resulted in the payment of benefits that were less than what the putative class members were entitled to and in violation of ERISA. The operative complaint asserts four claims: “Counts I and III allege that the failure to ensure actuarial equivalence violated 29 U.S.C. §§ 1054(c)(3), 1055(d)(1)(B); Count II alleges an unlawful forfeiture of vested benefits in violation of 29 U.S.C. § 1053(a); and Count IV alleges that AT&T Services breached its fiduciary duties in violation of 29 U.S.C. §§ 1104(a)(1)(A).” This week the court issued two orders ruling on two pending motions filed by the defendants. In the first decision the court denied defendants’ motion to exclude the opinions of plaintiffs’ expert witness, Ian Altman, under Federal Rule of Evidence 702. In the second decision, the court denied “in main part,” defendants’ motion for summary judgment on all claims. Beginning with the expert witness motion, the court broadly held that Mr. Altman’s work was scientifically sound, based on decades of experience and reliable evidence about industry practice, and grounded in sound actuarial methods. Defendants’ objections, the court determined, were based on experts’ competing interpretations of the evidence and go to weight, not admissibility. Accordingly, the court denied the motion to exclude Mr. Altman’s opinions and instead instructed defendants to put their energy towards “vigorous cross examination at trial.” The court’s summary judgment decision was much lengthier and more involved. It began with counts one and three with respect to the requirements of actuarial equivalence. As an initial matter, AT&T’s argument that, as a matter of law, there is no requirement to use reasonable assumptions in Sections 1054 and 1055, was a bridge too far for the court. Rather, the court found that plaintiffs’ make a good point that “actuarial equivalent’ would be understood by an actuary skilled in the art to connote the necessity of using reasonable assumptions.” And to that end, the court acknowledged that plaintiffs have adduced evidence from which a reasonable factfinder could conclude that the actuarial factors used by the plan were unreasonable. In fact, plaintiffs presented evidence indicating that AT&T’s own actuaries voiced concerns that their conversion factors were out of date. Given this evidence, the court held that AT&T failed to demonstrate that a reasonable factfinder could not credit plaintiffs’ version of the facts. As there are material factual disputes, the court denied summary judgment to defendants on counts one and three. The court also denied defendants’ motion for summary judgment on the nonforfeiture claim, count two. Defendants argued that the nonforfeiture protection does not apply to early retirees, but the court did not agree. “Insofar as AT&T means to say that individuals who retire early are simply never afforded nonforfeiture protection under ERISA because they retiredearly, the plain text of Section 1053 makes the trigger for nonforfeiture protections the employee’s ‘attainment of normal retirement age’ not his ‘[retiring at] normal retirement age.’” The one sour note for plaintiffs came from the court’s fiduciary breach ruling. The court granted summary judgment in favor of defendants on the breach of fiduciary duty claim as it determined that AT&T was not acting as a fiduciary under ERISA either when it established the challenged conversion factors, nor when it decided not to change them. The court held that “[t]he oversight and control of plan terms with which plaintiffs take issue are more analogous to the actions of ‘the settlors of a trust.’” Plaintiffs also argued that defendants acted with fiduciary discretion by applying the factors to calculate the benefits. But this did not move the needle. The court disagreed with the notion that “following clear and mandatory Plan terms for the calculation of benefits is an act which involves the exercise of discretionary authority or control, as is required to be acting as a fiduciary under ERISA.” The court stated that in its view the Supreme Court’s mention of section 1104(a)(1)(D) in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 420-21 (2014), which requires plan administrators to follow governing plan documents insofar as they are consistent with ERISA, “does not support the reading plaintiffs presently advance.” Finally, the court rejected defendants’ standing and statute of limitations challenges. It held that the named plaintiffs who are currently working at AT&T have demonstrated a “substantial risk of injury” which resulted in concrete standing. As for the statute of limitations, the court was unwilling to adopt AT&T’s proposition that plaintiffs had actual knowledge of the operative facts of their complaint because the plan lists the conversion factors used for calculating joint and survivor benefits. The court noted that the plan does not disclose the assumptions on which the factors were based, and ERISA does not require plan participants to reverse-engineer the possible assumptions or piece together complicated actuarial information like forensic analysts. Accordingly, except for the breach of fiduciary duty claim, the court denied defendants’ motion for summary judgment.

Pleading Issues & Procedure

Second Circuit

Lloyd v. Argent Trust Co., No. 22cv4129 (DLC), 2025 WL 1904250 (S.D.N.Y. Jul. 10, 2025) (Judge Denise L. Cote). In this action former employees of WBBQ Holdings, Inc. allege that the fiduciaries of the company’s Employee Stock Ownership Plan (“ESOP”) caused the ESOP to overpay for WBBQ stock. In April of 2023, plaintiffs served the seller defendants a set of requests for production of documents related to asset tracing, seeking information related to financial accounts containing the ESOP proceeds, any comingling of ESOP proceeds with other assets, or any transfers of the ESOP proceeds to other parties. The defendants categorically opposed the asset tracing discovery that plaintiffs sought. What followed was a two-year delay in obtaining this discovery, the result of both defendants’ resistance to providing it, as well as an extended stay of this action pending the Supreme Court’s decision in Coinbase, Inc. v. Bielski, 599 U.S. 736 (2023). Eventually though, the court ordered defendants to produce this information, at which time plaintiffs learned that two of the seller defendants, Herbert and Gregor Wetanson, had transferred their proceeds from the ESOP transaction to trusts under their control (together “the Wetanson Trusts”). Plaintiffs subsequently moved for leave to file a second amended complaint that seeks recovery from the Wetanson Trusts by adding the Wetanson Trusts and their trustees and beneficiaries as defendants and asserting a new claim under the New York Uniform Voidable Transaction Act. The court concluded that plaintiffs made the showing of good cause required to modify the schedule and amend their pleading. It found plaintiffs were diligent in seeking the asset tracing discovery that revealed that the proceeds from the sale of the WBBQ stock had been transferred to the Wetanson Trusts, that adding the new claims and new defendants is not futile, and that allowing plaintiffs to amend will not significantly prejudgment defendants. Accordingly, the court granted plaintiffs’ motion for leave to amend the complaint.

Eighth Circuit

Rivera v. Sedgwick Claims Management Services, No. 24-cv-3247 (LMP/SGE), 2025 WL 1866179 (D. Minn. Jul. 7, 2025) (Judge Laura M. Provinzino). This lawsuit is the fourth filed by pro se plaintiff Ezequiel Rivera in connection with an on-the-job injury he suffered while working at defendant Nestle USA. Inc.’s production facility in Wisconsin. In the present action, Mr. Rivera alleges that Nestle and defendants Ace Fire Underwriters Insurance Company and Sedgwick Claims Management Services, Inc. conspired to deny him benefits after the workplace injury. Mr. Rivera asserts claims under ERISA, Title VII of the Civil Rights Act, and the Americans with Disabilities Act (“ADA”). Defendants moved to dismiss. “Because Rivera fails to state an ERISA claim, and this Court is otherwise an improper venue for Rivera’s ADA and Title VII claims, the Court grants Defendants’ motions.” The court first addressed Mr. Rivera’s ERISA claims. Quite simply, the court concluded that these claims failed because Mr. Rivera does not allege the existence of an ERISA plan anywhere in his complaint. Without an ERISA plan, the court held that Mr. Rivera necessarily fails to state a claim under the statute. The court further concluded that venue is not proper in Minnesota, as the allegations in the complaint make clear that the worker’s compensation benefits process and any unlawful employment practices occurred exclusively in Wisconsin, where Mr. Rivera worked. Rather than transfer the case to Wisconsin, where Mr. Rivera has already filed multiple federal lawsuits that were all dismissed, the court decided to dismiss this action in its entirety. Accordingly, the court granted in whole defendants’ motion to dismiss.

Provider Claims

Second Circuit

Rowe Plastic Surgery of N.J., LLC v. Aetna Life Ins. Co., No. 23-CV-3636-SJB-LKE, 2025 WL 1907005 (E.D.N.Y. Jul. 10, 2025) (Judge Sanket J. Bulsara). This lawsuit is one of dozens of similar cases filed by plaintiffs Rowe Plastic Surgery of New Jersey, LLC and East Coast Plastic Surgery, P.C. seeking reimbursement from health insurance companies for surgeries performed. Two of plaintiffs’ other actions were dismissed by district courts. This action against Aetna Life Insurance Company was stayed pending the resolution of the appeals of those dismissals before the Second Circuit. In both cases, the Second Circuit affirmed, agreeing with the lower courts that the state law claims failed because they were either preempted by ERISA, insufficient under state law, or both. Now that those appeals have been decided, the court reopened this action. Plaintiffs subsequently moved to amend their complaint to attempt to cure the deficiencies identified in those decisions. The court denied the motion to amend and ordered the parties to directly proceed to summary judgment briefing in this order. As in the other similar cases, the court concluded that the claims in the proposed amended complaint are futile as they are preempted by ERISA and fail under New York law. As far as ERISA preemption goes, the court found that despite plaintiffs’ framing, the core allegations in the complaint rely on the ERISA-governed plan to establish liability. The court stressed that the only reason plaintiffs called Aetna in the first instance was to ascertain payments that would be made under the plan. Accordingly, the court held that all of the state law contract and tort claims “grow out of what was (not) paid under an ERISA plan,” and the relationship between the parties would not exist but for the presence of the healthcare plan, making it a critical factor in establishing liability. Thus, the court found that the claims relate to ERISA and are preempted under Section 514. The court then explained that even if some or all of the claims were not preempted by ERISA, they would nevertheless fail as a matter of state law “primarily for the reason that the oral conversation(s) alleged to have occurred cannot be considered a promise to pay on which Plaintiffs reasonably relied for any contract, or contract-related, claim.” The court largely adopted the position of the Second Circuit in its rulings affirming the dismissal of plaintiffs’ other cases. Accordingly, the court denied plaintiffs’ motion to amend and directed the parties to proceed directly to summary judgment. The court noted that, in all likelihood, and for many of the same reasons stated in this decision, it will not find in favor of the providers. It therefore also suggested to plaintiffs that they should strongly consider stipulating to dismissal with prejudice and pursuing any appeal, if appropriate.

Third Circuit

The Plastic Surgery Center, P.A. v. Cigna Health & Life Ins. Co., No. 24-10217 (GC) (JTQ), 2025 WL 1874886 (D.N.J. Jul. 8, 2025) (Judge Georgette Castner). The Plastic Surgery Center, P.A. is a New Jersey medical practice specializing in plastic and reconstructive surgery. It is an out-of-network provider with defendant Cigna Health and Life Insurance Company. This action stems from an alleged oral agreement on March 13, 2023, which the surgery center maintains that it relied on to perform the patient’s medically necessary breast reconstruction surgery. Although Cigna promised to pay in-network rates for the procedure, it only reimbursed The Plastic Surgery Center $824.21 of the $100,498 medical bill. In its complaint against Cigna, the provider seeks to recoup the unpaid balance of the patient’s surgery. The Plastic Surgery Center asserts three state law causes of action: breach of contract, promissory estoppel, and negligent misrepresentation. Cigna moved to dismiss the claims. It argued that they were each preempted by ERISA, and that the complaint alternatively fails to allege facts sufficient to plausibly state them. The court addressed each argument, and explained why it disagreed. To begin, the court held that the state law claims are not preempted by ERISA because they seek to enforce obligations independent of the ERISA-governed plan, and because they require nothing more than a cursory review of the plan in order to establish the in-network rate for the services. The court said, “drawing all inferences in [plaintiff’s] favor, the Court finds that the March 13, 2023 Agreement defines the scope of Cigna’s duty, and therefore [plaintiff] has sufficiently pled the existence of an agreement separate from [the patient’s] plan. The claims based on this Agreement as pled ‘are not for benefits due under the plans. Nor are the claims otherwise impermissibly predicated on the plan or plan administration.’” Thus, the court found that the state law claims are not expressly preempted under Section 514. Moreover, the court concluded that the complaint plausibly alleges each of the three state law claims and sufficiently pleads the elements necessary to state them. As a result, the court determined that at this stage of the proceedings The Plastic Surgery Center has sufficiently stated claims upon which relief may be granted based on the allegations in its complaint, and thus denied Cigna’s motion seeking to dismiss them.

Fifth Circuit

Abira Med. Labs. LLC v. UMR Ins. Co., No. 5:24-CV-00777-JKP, 2025 WL 1886681 (W.D. Tex. Jul. 7, 2025) (Judge Jason Pulliam). In this action plaintiff Abira Medical Laboratories, LLC has sued UMR Insurance Company under ERISA and state law for allegedly refusing to pay it for laboratory testing services it provided to UMR’s members and subscribers. Abira alleges that UMR regularly refused to pay or underpaid claims for services, or simply failed to respond to claims it submitted, to the tune of $4.2 million. Before the court was UMR’s motion to dismiss. The court granted it in part and denied it in part in this decision. To begin, the court refused to dismiss the action due to any statute of limitations as it found that there are factual disputes regarding the accrual date of Abira’s claims, especially as many of the claims have no outright denial. Next, the court assessed UMR’s argument that Abira cannot state causes of action for violations of ERISA or breach of contract because it fails to identify the underlying policy or plans that it allegedly breached. The court mentioned that as a general rule an ERISA plaintiff must provide the court with enough factual details to determine whether the services were indeed covered under the plan. However, the Fifth Circuit has cautioned that “ERISA plaintiffs should not be held to an excessively burdensome pleading standard that requires them to identify particular plan provisions in ERISA contexts when it may be extremely difficult for them to access such plan provisions.” The Fifth Circuit further stipulated that this holding should be applied with respect to state law breach of contract causes of action regarding plan provisions that are not governed by ERISA as well. Here, the court concluded that the relevant plan information is in the control and possession of the defendant, and Abira should not be required to provide this information in its complaint. Instead, the court determined that the factual allegations Abira does allege are such that it can draw the reasonable inference that UMR is liable for the misconduct alleged. Accordingly, the court concluded that the complaint sufficiently states claims under ERISA and also sufficiently states a cause of action for breach of contract. Thus, the court denied the motion to dismiss these claims. On the other hand, the court did dismiss plaintiff’s quantum meruit and unjust enrichment causes of action. Not only may Abira pursue recovery through its breach of contract claim which generally renders recovery under equitable theories unavailable, but the court also stated that under Texas law courts refuse to recognize an unjust enrichment or quantum meruit cause of action against an insurer based on healthcare services provided to a patient who is a participant or beneficiary of a healthcare policy.

ER Addison, LLC v. Aetna Health Inc., No. 3:24-CV-1816-D, 2025 WL 1869591 (N.D. Tex. Jul. 3, 2025) (Judge Sidney A. Fitzwater). Plaintiff ER Addison, LLC (“ER”) operates several freestanding emergency centers in North Texas. In this action asserted against Aetna Health Inc., Aetna Management, LLC, and Aetna Life Insurance Company, ER seeks to recover payments from the Aetna defendants for emergency services it provided to insured patients. ER asserts a claim under ERISA for recovery of benefits, as well as state law claims for breach of contract, negligent misrepresentation, and unjust enrichment. Aetna moved to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6). The court began with Aetna’s 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Aetna argued, and the court agreed, that the healthcare provider lacked derivative standing to assert the ERISA claims of Aetna’s insureds. As an initial matter, the court held that ER’s allegations in the complaint do not support the premise that it obtained assignment of benefits from Aetna’s insureds. Regardless, the court added that even if it were to assume that the patients assigned their benefits to ER, the plans at issue contain valid and unambiguous anti-assignment provisions. ER did not dispute this fact. Instead, it argued that Aetna is estopped from relying on the anti-assignment provisions, and in any event, anti-assignment provisions are unenforceable as a matter of Texas law. The court disagreed with both points. It stated that ER “adduced no evidence in support of its estoppel argument,” and “the Texas law on which ER relies – Tex. Ins. Code Ann. § 1204.053 (West 2005) – is preempted by ERISA.” Accordingly, the court granted Aetna’s motion to dismiss the ERISA claim for lack of subject matter jurisdiction. It then declined to exercise supplemental jurisdiction over the remaining state law causes of action and dismissed them without prejudice.

Venue

Fifth Circuit

Lone Star 24 HR ER Facility, LLC v. Blue Cross and Blue Shield of Tex., No. SA-22-CV-01090-JKP, 2025 WL 1889622 (W.D. Tex. Jul. 3, 2025) (Judge Jason Pulliam). Plaintiff Lone Star 24 HR ER Facility, LLC is a healthcare company that operates a freestanding emergency care facility in Texas. Lone Star filed this action on behalf of itself and patients it treated at its facility who are insured by Blue Cross and Blue Shield of Texas or other insurers who are members of the BlueCard Program, including as relevant here defendants CareFirst of Maryland, Inc. and Group Hospitalization and Medical Services, Inc. (collectively ‘the CareFirst defendants’). Lone Star asserts claims under ERISA and under state law seeking compensation for emergency medical services it provided. The CareFirst defendants moved to dismiss the claims asserted against them pursuant to Federal Rule of Civil Procedure 12(b)(2). They argued that dismissal is appropriate based on insufficient allegations of venue under the ERISA provision § 1132(e)(2). In opposition, Lone Star countered, “[v]enue is proper and appropriately established in this Court under 28 USC § 1391(b)(2), as the named defendant has members that reside in this Federal District and Defendant[s] conduct business in this District. A substantial part of the events, acts or omissions that give rise to the claims herein occurred in the Western District of Texas… Venue is proper is this district pursuant to 28 U.S.C. § 1391(b)(1) and 29 U.S.C. 1132(e)(2), because this is the District in which the plans were administered and claims were processed, where the breach took place, or where the defendant resides or may be found.” The court agreed with plaintiff, “[b]ecause Lone Star’s allegations are sufficient under the general venue statute, the Care-First Defendants’ Motion to Dismiss will be denied on this basis.” The CareFirst defendants alternatively requested the court sever them from this case and transfer venue to Maryland for CareFirst of Maryland, Inc. and the District of Columbia for Group Hospitalization and Medical Services, Inc. The court declined to do so. It found that transferring venues “would only shift inconvenience from one party to another.” Accordingly, the CareFirst defendants were not dismissed from this action and the claims against them will remain part of the larger lawsuit in the Western District of Texas.