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

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

Retired steelworkers and their families have something to be thankful for this week.  And no, it’s not turkey.  This week’s notable decision is Stone v. Signode Industrial Group LLC, No. 19-1601, __ F.3d __, 2019 WL 6139680 (7th Cir. Nov. 20, 2019), where the Seventh Circuit held that Signode Industrial Group LLC’s successors were obligated to continue to provide benefits to retirees even after the employer’s termination of the underlying collective bargaining agreement.  

Defendant Signode was the sponsor of a health care benefit plan for retired steelworkers, the terms of which it had negotiated with a union. Defendant terminated the underlying benefits agreement and ceased paying benefits to the retirees and their families. Plaintiffs initiated a class action under both ERISA and the Labor-Management Relations Act contending that benefits under the plan were vested and thus could not be terminated. On cross-motions for summary judgment, the district court (Judge Thomas M. Durkin, N.D. Ill.) granted Plaintiffs’ motion and denied Defendants’ motion, holding that Defendant did not have the right to terminate benefits. The district court entered a permanent injunction against Defendants, who appealed. Continue Reading Seventh Circuit Holds Employer to Promise of Lifetime Health-care Benefits for Retirees