There was no notable decision this week for us to highlight, but the courts were certainly still busy tackling the full spectrum of ERISA-related issues. Read on to learn about (1) another setback for plan participants challenging the transfer of their pensions to the allegedly risky annuity provider Athene (Bueno v. GE); (2) whether a health insurer’s on-site nursing requirement for residential treatment centers potentially violates federal mental health parity rules (Brady K. v. Health Care Service Corp.); (3) whether a health insurer’s alleged failure to provide information about its coverage network violated RICO (spoiler: no, although the ERISA claims will proceed) (Orrison v. Mayo Clinic); (4) whether a plan’s investment policy statement is a plan document that administrators must provide upon request (Phillips v. Cobham Advanced Electronic Solutions, Inc.); (5) an impressive $461,402.78 fee award in a disability benefit case (Rappaport v. Guardian); and last, but not least, (6) 36 disappointed grandchildren (Havlik v. University of Chicago).
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Breach of Fiduciary Duty
Second Circuit
Bueno v. General Electric Co., No. 1:24-CV-0822, 2025 WL 2719995 (N.D.N.Y. Sep. 24, 2025) (Judge Glenn T. Suddaby). In this putative class action lawsuit, participants of General Electric Company’s pension plan allege that General Electric Company, The Board of Directors of the General Electric Company, H. Lawrence Culp, Jr., the General Electric Company Pension Board, the Committee (the “GE Defendants”), Fiduciary Counselors, Inc. (“FCI”), and John Does 1-5 breached their fiduciary duties, knowingly participated in fiduciary breaches, and engaged in prohibited transactions by selecting Athene as the annuity provider for GE’s partial pension risk transfer (“PRT”) of over $1.7 billion of GE’s pension obligations. Plaintiffs allege that the challenged annuitizations were in violation of ERISA because they were unduly risky, self-serving, and not in the best interest of the transferees. Defendants moved to dismiss the action pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Additionally, with leave from the court both ERIC – the ERISA Industry Committee – and the Pension Rights Center filed amicus curiae briefs on opposite sides. In this lengthy decision the court granted the motion to dismiss, without prejudice, for lack of subject-matter jurisdiction under Rule 12(b)(1). Defendants argued that plaintiffs lack standing to assert their claims because they failed to allege facts plausibly suggesting any injury-in-fact. Defendants relied on the Supreme Court’s decision in Thole v. U.S. Bank N.A., 590 U.S. 538 (2020), to argue that “[plaintiffs] have not alleged, and cannot allege, that their fixed benefit payments under the annuity have been interrupted in a manner that has deprived them of any amount to which they are entitled, which is the only way in which they can show Article III standing given that beneficiaries of a defined benefit plan have no equitable or property interest in the assets of the plan itself, only the amount of the vested benefits that they are entitled to receive.” The court largely agreed, writing, “as to whether the PRT to the Athene annuity reduced the present value of Plaintiffs’ benefits so as to create an immediate, concrete injury, the Court finds Plaintiffs’ arguments unpersuasive.” The court was not persuaded that either loss of ERISA protections or insurance under the Pension Benefit Guaranty Corporation demonstrate immediate financial harm and instead held, “the mere action of engaging in a PRT does not cause a legally cognizable injury to establish standing for Plaintiffs’ claims.” As for plaintiffs’ argument that the transfer immediately diminished the value of their benefits, the court stated that “far from showing a ‘classic economic injury,’ Plaintiffs fail to explain how the value of their benefits was actually diminished.” Plaintiffs also argued that the transfer to the Athene annuity invaded their “legal right to be free from breaches of fiduciary misconduct,” which, by itself, represents a sufficient injury. Again, the court did not agree. Instead, it found the PRT choice was a settlor decision, rather than a fiduciary one, “and thus the alleged harm did not come about as the result of a breach of fiduciary duty.” Furthermore, the court noted that plaintiffs do not allege that there was any benefit to Defendant FCI related to the selection of Athene as the annuity provider, only that the GE Defendants received the benefit of that selection. Thus, the court determined that plaintiffs did not provide “any non-speculative allegations to plausibly suggest that Defendant FCI received some unjust or wrongful benefit as a result of the alleged breach of fiduciary duty that could constitute an injury to Plaintiffs under a constructive trust theory for the purposes of standing.” And regarding allegations regarding potential future injury due to an alleged high risk of default, the court found them to be “without merit,” explaining that future harm must be “actual or imminent, not speculative.” It added, “Plaintiffs have not alleged facts to plausibly suggest that Athene is at a substantial risk of defaulting on its obligation related to the annuity here in a manner that meets the imminence requirement. Although Plaintiffs identify a myriad of practices that might make Athene riskier than some other annuity providers, such fact does not make default a substantial risk from a constitutional standpoint (which, as noted above, requires that the risk essentially be ‘certainly impending’).” Based on the foregoing, the court concluded that plaintiffs failed to plausibly allege an injury-in-fact sufficient to establish Constitutional standing to pursue their ERISA claims. As a result, the court granted the motion to dismiss, albeit without prejudice.
Ninth Circuit
Su v. Alerus Financial NA, No. 1:23-cv-00537-DCN, 2025 WL 2712129 (D. Idaho Sep. 23, 2025) (Judge David C. Nye). In this action the United States Secretary of Labor alleges that the Chairman and CEO of Norco, Inc., James A. Kissler, violated ERISA by illegally manipulating a stock sale to the Norco Employee Stock Ownership Plan (“ESOP”), which caused the ESOP to substantially overpay for Mr. Kissler’s shares. The Secretary contends that Mr. Kissler breached fiduciary duties he owed to ESOP by failing to monitor ESOP trustee Alerus Financial N.A., and by knowingly participating in Alerus’s alleged breach of its fiduciary duties to the ESOP. (Alerus and Norco are both defendants in this action in addition to Mr. Kissler). Mr. Kissler moved to dismiss the claims asserted against him. In an earlier decision the court granted Mr. Kissler’s motion to dismiss pursuant to Rule 12(b)(6). In its order dismissing the three claims asserted against Mr. Kissler the court found that the Secretary failed to allege how Mr. Kissler’s procedures or processes for reviewing the transaction were deficient, and did not raise a reasonable inference that Mr. Kissler knew or should have known of Alerus’s misconduct. The Secretary responded to the court’s dismissal by filing a motion for reconsideration. The Secretary argued the court committed clear error by dismissing these claims. In this decision the court disagreed, and denied the motion for reconsideration. As for the failure to monitor claim, the court stated that “the Secretary cites no controlling authority which the Court misapplied or ignored by requiring her to plead facts regarding the monitoring process.” Moreover, the court held that even if it did find some of the district court cases cited by the Secretary persuasive, it nevertheless sees them as distinguishable. Thus, the court denied the motion for reconsideration as to the failure to monitor claim. It then discussed the two knowing participation claims. The court was not persuaded that its application of the general principles under Twombly and Iqbal to the Secretary’s complaint was “beyond the scope of reasonable judicial disagreement.” The Secretary alleged that Mr. Kissler must have known that Alerus’s investigation into the stock sale was rushed because it occurred over the course of only six weeks. She also averred that “the discrepancy between the ESOP purchase price and a valuation of Norco conducted four years prior should have put Kissler on notice that he was getting an illegally good deal.” The court was not convinced. Rather, the court said that these facts in isolation fail to create a reasonable inference that Mr. Kissler was on notice of Alerus’s alleged wrongdoing. The court stressed that although other district courts have found similar allegations sufficient, these decisions do not “create a well-established, categorical rule this Court violated.” In sum, the court viewed the Secretary’s motion as little more than disagreement over an adverse order. As a result, the court determined that the Secretary failed to meet the high burden of showing that it committed clear error in dismissing the claims against Mr. Kissler. For these reasons, the court denied the motion for reconsideration.
Wanek v. Russell Investments Trust Co., No. 2:21-cv-00961-CDS-BNW, 2025 WL 2733654 (D. Nev. Sep. 25, 2025) (Judge Cristina D. Silva). In this certified class action, the participants of the Caesars Entertainment Corporation Savings & Retirement 401(k) Plan allege that Caesars, the plan’s committees, and the plan’s investment manager, Russell Investments Trusts Company, violated their fiduciary duties under ERISA. Specifically, they allege that Russell breached its duties of loyalty and prudence by replacing the plan’s investment options with inferior Russell funds, and that this swap was a self-serving decision, done in order to preserve its struggling funds. The plaintiffs also claim that the Caesar defendants breached their duty of prudence and failed to monitor Russell after appointing it as a fiduciary. The Caesars defendants and Russell both moved for summary judgment, arguing that plaintiffs failed to raise a triable issue of fact. In addition, Russell moved to seal documents filed in connection with the summary judgment motions. In this decision the court granted the Caesars defendants’ summary judgment motion, denied Russell’s summary judgment motion, and granted Russell’s motion to seal. With regard to the Caesars defendants, the court held that there was no genuine issue of material fact that they engaged in a prudent process for selecting, hiring, and overseeing Russell, and that the performance of the Russell funds is not dispositive, particularly as the plan only retained Russell as the plan’s asset manager and kept its funds as investment options in the plan for a relatively brief period of time. Therefore, the court granted the Caesars defendants’ motion for summary judgment. On the other hand, the court determined that there are disputed issues of material fact as to whether Russell breached its duties of loyalty and prudence. It stated that the evidence indicates genuine issues of material fact as to Russell’s reasons for selecting and retaining its own funds for the plan’s investment menu during the class period. Moreover, the court identified a genuine dispute over whether the Russell funds were objectively prudent investment options, as Russell argues they are, and whether Russell selected and monitored them with objectively prudent processes. “Rather, the evidence of Russell’s willingness (or lack thereof) to select non-Russell funds for the Plan is sufficient to preclude summary judgment.” Finally, the court granted Russell’s motion to seal documents filed in support of the summary judgment motions. The court determined that the sensitive business information contained within these documents creates a compelling reason to seal the material. Thus, the court sealed the documents as requested.
Class Actions
Second Circuit
Andrew-Berry v. Weiss, No. 3:23-cv-978 (OAW), 2025 WL 2687993 (D. Conn. Sep. 19, 2025) (Judge Omar A. Williams). Plaintiff Beth Andrew-Berry is the former head of human resources of the now bankrupt Connecticut hedge fund GWA, LLC, who filed this class action over two years ago alleging that her former employer and its owner violated ERISA by mismanaging the assets of the company’s retirement plan. Following bankruptcy litigation, discovery, and meditation, the parties reached a settlement agreement wherein defendants agreed to pay $7,900,000 into a fund. On May 30, 2025, the court granted preliminary approval of the proposed class action settlement, and on September 11, 2025, the court held a fairness hearing. (Your ERISA Watch covered the court’s preliminary approval decision in our June 11, 2025 newsletter). Very little has changed in the interim, except that the final number of class members is approximately 50% greater than anticipated at the time of preliminary certification, all but one class member received notice, and “not one member of this relatively engaged and sophisticated class objected to the settlement terms.” Given these facts, it is hardly surprising that the court breezed through its final approval of the certification of the settlement class and final approval of the proposed settlement. The court largely relied on its preliminary rulings, and reiterated that it continues to find that the class satisfies the requirements of Rule 23(a) and (b), and that the settlement is fair, reasonable, and adequate, and both procedurally and substantively fair. The court then discussed plaintiffs’ unopposed motion for attorneys’ fees, expense reimbursements, and class representative service award. First, the court noted that there was no objection to the litigation costs or administrative expenses requested. Nor did the court itself take issue with the amounts sought. Thus, the court approved payment of litigation costs in the amount of $193,368.37 (this figure included the cost of retaining bankruptcy attorneys) and administrative expenses in the amount of $43,497.57 (which accounted for the fees for the settlement administrator, escrow, recordkeeping, and the independent fiduciary). The court also noted that no objection was lodged with respect to the $45,000 service award to Ms. Andrew-Berry. Although high, the court concluded that this award was fair in this instance given Ms. Andrew-Berry’s active role throughout litigation which the court found “to be inordinate involvement for a named plaintiff, and essential involvement given the subsequent dissolution of the company.” As the court put it, “absent Plaintiff’s dedication, no one in the class would have gotten any relief.” Finally, the court discussed attorneys’ fees. Plaintiff sought fees for her counsel equaling one-third of the settlement fund, or $2,633,333.33. There was one objection to the amount of attorneys’ fees requested, but the court rejected many of the objector’s assertions. While the court acknowledged that the amount awarded in attorneys’ fees will “directly and negatively affects each class member’s recovery,” the court still found a one-third recovery entirely fair here, when factoring in the results achieved, the work done by counsel, their expertise in ERISA litigation, and the risk to class counsel bringing this relatively small, but important case. As to this last point, the court wrote it “appreciates the firm’s willingness to take on a case with relatively modest stakes (and thus relatively modest potential fees), and finds it in the interest of justice and the public interest to consider when awarding attorneys’ fees the importance of encouraging larger firms with specific expertise to take on cases that might not present a substantial money-making opportunity, but that stand to correct an injustice inflicted upon rank-and-file workers.” For these reasons, the court awarded the full requested sum of attorneys’ fees. Accordingly, the court granted plaintiffs’ unopposed motions in their entirety, and closed this case.
Ninth Circuit
Imber v. Lackey, No. 1:22-cv-00004-HBK, 2025 WL 2687358 (E.D. Cal. Sep. 19, 2025) (Magistrate Judge Helena M. Barch-Kuchta). Plaintiff Brandon Imber filed this putative class action on December 30, 2021, on behalf of himself and the other participants of an Employee Stock Ownership Plan (“ESOP”) alleging that the events surrounding a 2018 stock transaction were in violation of ERISA. Before the court was Mr. Imber’s unopposed motion for class certification and for preliminary settlement approval. The court granted preliminary approval in this decision. To begin, the court determined that the 200-member proposed settlement class of ESOP participants satisfies the requirements of Rule 23(a) and (b). Specifically, the court held that the proposed class is sufficiently numerous, there are multiple common questions of law and fact that are capable of resolution on a class-wide basis with regard to the challenged 2018 transaction, the claims of Mr. Imber and the unnamed class members all arise from the same course of conduct related to the ESOP as a whole, Mr. Imber are his counsel are adequate representatives of the class, and certification is appropriate under Rule 23(b)(1)(A) because separate lawsuits “have the potential for conflicting decisions that would make uniform administration of the Plan impossible.” The court then considered the details of the settlement itself. The settlement requires defendants to pay $485,000, plus any earnings and interest accrued thereon, into a cash settlement fund which will be distributed to class members in accordance with their ESOP accounts minus any court-approved deductions and expenses, including attorneys’ fees, the service award for the class representative, estimated taxes on income earned on the cash settlement fund, and costs. In addition, the settlement requires that the principal balance of the ESOP-related debt will be reduced by $1.4 million; and as a result of this loan modification, 115,000 shares of the stock held in the ESOP’s suspense account will be released and allocated to the ESOP accounts of class members pursuant to a court-approved plan of allocation. Having carefully examined the terms of the proposed settlement, the court determined that it appears to be fair, reasonable, and adequate as required by Rule 23(e). The court agreed with Mr. Imber that the settlement amount is “within the range reasonableness for possible approval both by percentage and per participant,” as it “compares favorably” to other ERISA class action settlements. And while the court was potentially worried about the settlement’s attorneys’ fees and costs provisions, it did not deny preliminary approval on that basis but rather reserved ruling on proposed class counsel’s attorneys’ fees until a motion for fees is filed. Next, the court recognized that the proposed settlement will treat each class member equitably as they will receive pro rata payment. Nor did the court feel that the requested service award to Mr. Imber would establish preferential treatment that would prevent preliminary approval. Finally, the court approved of the proposed notice, albeit with a slight modification in the wording, and of the method of notice. Accordingly, plaintiff’s unopposed motion for preliminary approval and certification was granted, and the final fairness hearing will take place this December.
Disability Benefit Claims
Second Circuit
Rappaport v. Guardian Life Ins. Co. of Am., No. 1:22-cv-08100 (JLR), 2025 WL 2694252 (S.D.N.Y. Sep. 22, 2025) (Judge Jennifer L. Rochon). This action arises from Guardian Life Insurance Company of America’s termination of plaintiff Jason Rappaport’s long-term disability benefits in January 2021. The central issue in this litigation was whether Guardian correctly determined that Mr. Rappaport no longer qualified for disability payments because he was capable of earning more than the maximum allowed while disabled. Following a bench trial in April of this year, the court found in favor of Mr. Rappaport. It held that the plan’s insured-earnings definition included K-1 earnings, and as a result Mr. Rappaport was not earning more than 80% of his indexed insured earnings. Accordingly, the court determined Guardian improperly terminated Mr. Rappaport’s benefits in January 2021 because of his earnings while on disability. In that same decision the court remanded to Guardian to determine Mr. Rappaport’s long-term disability benefits in accordance with its findings and determine if any set-off was appropriate. (A summary of the court’s April 21, 2025 order can be found in Your ERISA Watch’s April 30, 2025 newsletter). Following the remand, however, the parties could not reach an agreement as to whether there had been an overpayment (or underpayment) of the disability benefits. This dispute led to a second bench trial, which was held on September 3, 2025. In addition to the calculation dispute, Mr. Rappaport also filed a motion for attorneys’ fees and costs under Section 502(g)(1) based on his success at the first bench trial. In this decision the court concluded that Guardian’s calculations on remand were largely correct and that it had made an overpayment of $97,297.72 prior to the date on which it terminated Mr. Rappaport’s benefits. Specifically, the court agreed with Guardian’s methods of calculating “insured earnings,” its indexing of Mr. Rappaport’s earnings each year, and its calculations of benefits over specific months contested by Mr. Rappaport. The court therefore found that Guardian is entitled to offset future long-term disability benefits it pays to Mr. Rappaport by this amount. In addition to resolving the dispute over the benefit calculations, the court also granted Mr. Rappaport’s motion for attorneys’ fees and costs and awarded him $461,402.78 in fees and $402 in costs. As an initial matter, the court held that Mr. Rappaport had achieved success on the merits thanks to his success on the central issue of the case. The court further concluded that the Second Circuit’s Chambless factors favor an award because Guardian had some degree of culpability, an award will serve a deterrent effect, Guardian can satisfy a fee award, and Mr. Rappaport had greater success on the merits. For these reasons, the court agreed with Mr. Rappaport that he was eligible for fees under ERISA. The court then quickly assessed the reasonableness of the attorneys’ fees sought. In the end, the court awarded all of the fees Mr. Rappaport requested. It found both the hourly rates of the team at the law firm of Riemer Hess LLC (ranging from $300 per hour for a paralegal to $925 per hour for a founding partner experienced in ERISA litigation) and the number of hours spent reasonable, especially given the fact that the proposed fee award already incorporated a voluntary across-the-board reduction of 10%. The court pointed out that over the last three years, counsel litigated discovery disputes, briefed a motion for summary judgment, briefed Guardian’s affirmative defense based on the Supreme Court’s decision in Loper Bright, engaged in bench trial briefing, and participated in a bench trial. “Considering the complex legal issues involved, the number of motions, and the duration of this litigation, the Court finds the hours expended by Rappaport’s attorneys reasonable.” Thus, the court applied no reduction to the fee request, and instead awarded fees in full. This was not true as far as costs, however. Mr. Rappaport sought $3,144 for costs, including for the filing of the complaint, transcript fees for the first bench trial and depositions, and printers and messengers. The court only awarded $402 in costs to reflect the filing fee because Mr. Rappaport failed to submit invoices and receipts, or other documentary proof authenticating the other costs. Accordingly, the decision had something good in it for each party, and with these final decisions reached, the court closed the case.
Third Circuit
McDonald v. E.I. duPont de Nemours & Co. Total & Permanent Disability Plan, No. 23-1141-RGA, 2025 WL 2733637 (D. Del. Sep. 25, 2025) (Judge Richard G. Andrews). This disability benefits dispute was filed by plaintiff Melissa McDonald after her long-term disability benefits under the Corteva Agriscience, LLC Long Term Disability Plan were terminated by its claims administrator, The Hartford Life and Accident Insurance Company, in April of 2022. The parties filed cross-motions for summary judgment on the administrative record under an arbitrary and capricious standard of review. In this order, the court granted judgment in favor of the plan, as it determined that Ms. McDonald was provided a full and fair review under ERISA Section 503 and 29 C.F.R. § 2560.503-1, and that Hartford did not act arbitrarily and capriciously in terminating her long-term disability benefits. The court disagreed with Ms. McDonald that the plan had relied on new evidence to uphold the denial to which she was not privy and did not have the opportunity to respond to. The court also disagreed with her that the Plan does not provide “the right to review and respond to new or additional evidence.” To the contrary, the court stated that the plan expressly provides that right, in language closely mirroring 29 C.F.R. § 2560.503-1(h)(4)(i)-(ii). As for the termination decision itself, the court found that the reviewers considered the entire record and reached a conclusion that the evidence in the record seems to fairly support. Although The Hartford had previously awarded Ms. McDonald benefits under the “any occupation” definition of disability, the court agreed with defendant that there had been a significant enough change in Ms. McDonald’s condition between that time and the date of termination to justify deviating from that previous holding. In particular, the court noted that Ms. McDonald herself had considered returning to part-time work, and that her immunocompromised status had improved. Thus, the court said that the “information available to The Hartford in 2022 therefore ‘differ[ed] in [a] material aspect from the records submitted [previously] that [the plan] determined supported a disability finding.’” Moreover, the court did not find the fact that the consultant doctors reached a different conclusion from those of Ms. McDonald’s treating physicians to be significant, given that the doctors hired by The Hartford had ample experience in the field of neurology and explained their reasoning. Thus, the court determined that the plan’s decision was well-reasoned and supported by substantial evidence in the record. And given the deferential review standard, the court declined to substitute its own judgment for that of defendant’s. Finally, the court agreed with The Hartford that it was not required to defer to the Social Security Administration’s disability determination, given the substantial difference in the way the plan handles claims for disability benefits and the eligibility requirements for Social Security. For these reasons, the court affirmed the plan’s decision to terminate Ms. McDonald’s benefits, and entered judgment accordingly.
Sixth Circuit
Logan v. The Paul Revere Life Ins. Co., No. 1:24-cv-113, 2025 WL 2723542 (E.D. Tenn. Sep. 24, 2025) (Judge Charles E. Atchley, Jr.). Plaintiff John Robert Logan filed this action to challenge The Paul Revere Life Insurance Company’s termination of his long-term disability benefits. In this decision ruling on Mr. Logan’s motion for judgment under a de novo standard of review, the court concluded that Mr. Logan carried his burden of proof to show by a preponderance of the evidence that he meets the definition of having a “residual disability” as defined under his policy. Before the onset of his disabling heart conditions, Mr. Logan was the Chief Executive Officer at a software company based in Alberta, Canada. Mr. Logan persuaded the court that “the important duties of the average CEO include working sixty hours a week or more with frequent travel.” After careful review of the record, the court found that Unum and its reviewing physicians improperly evaluated Mr. Logan’s disabilities in the context of working a 40-hour work week in a sedentary position with minimal travel. “As such, all the medical evidence presented by Unum does not properly consider Plaintiff’s important job duties and, therefore, has limited weight.” When these demands were properly considered, the court found that the record reflects Mr. Logan was unable to perform the essential duties of his position. The court relied on the opinions of Mr. Logan’s treating physicians, as well as the results of his functional capacity exam to conclude that his cardiac conditions, as well as his symptoms following his open heart surgery, left him unable to continue working as a CEO. The court also rejected Unum’s attempt to call into question Mr. Logan’s credibility due to the hobbies and household activities he performs. Not only was there evidence that these hobbies were listed on a medical intake form as aspirational activities that Mr. Logan hoped to resume once he was recovered, but the court also stated that even assuming they were not aspirational they were not enough to disprove his disability. Finally, because the court found that Mr. Logan was disabled under his policy due to his cardiac conditions alone, the court declined to thoroughly review or discuss Mr. Logan’s other health conditions and the possibility that they too are independently, or cumulatively, disabling. Thus, after weighing all of the relevant evidence as it relates to Mr. Logan’s actual important job duties, the court determined that Mr. Logan carried his burden of proof and that he was entitled to judgment in his favor and the reinstatement of his disability benefits.
ERISA Preemption
Ninth Circuit
Fang v. Wells Fargo & Co., No. 25-cv-06355-SK, 2025 WL 2721816 (N.D. Cal. Sep. 24, 2025) (Magistrate Judge Sallie Kim). On June 25, 2025, plaintiff Lei Fang filed an action in small claims court in California against defendant Wells Fargo & Company alleging that Wells Fargo misrepresented health insurance premiums and eligibility during a qualified life event, which resulted in significant damages. Wells Fargo removed the case to federal court pursuant to ERISA preemption because the retiree plan at issue is governed by ERISA. Wells Fargo then filed a motion to dismiss Mr. Fang’s action on the grounds that Mr. Fang lacks standing to sue because he is neither a participant nor a beneficiary of the plan. Mr. Fang responded by filing a motion to remand. Both motions were before the court, and both turned on the issue of complete preemption under ERISA. Because the parties agree that Mr. Fang is neither a participant nor beneficiary under the ERISA plan, the court determined that the first prong of the Davila complete preemption test is not satisfied. “As Defendant explains, Plaintiff’s connection to Defendant is through Plaintiff’s spouse, who is a retired employee of Defendant. Additionally, Plaintiff’s spouse is not a participant. Plaintiff does not dispute that he lacks standing to sue under ERISA § 502(a) because he is not a participant or a beneficiary.” The court thus determined that Wells Fargo failed to meet its burden to show that Mr. Fang’s claims are completely preempted by ERISA. Accordingly, the court concluded that it lacks jurisdiction over this suit, and that it is therefore compelled to grant Mr. Fang’s motion to remand. Because the court does not have jurisdiction, it did not address Wells Fargo’s motion to dismiss. Instead, it simply denied the motion without prejudice to Wells Fargo raising conflict preemption arguments in state court.
Medical Benefit Claims
Seventh Circuit
Brady K. v. Health Care Service Corp., No. 1:25 C 759, 2025 WL 2734542 (N.D. Ill. Sep. 25, 2025) (Judge Matthew F. Kennelly). Plaintiff Brady K. brings this action to challenge Blue Cross Blue Shield of Texas’s denial of his claims for coverage for his son’s stays at two mental health and behavioral treatment facilities to treat autism spectrum disorder, ADHD, aggression, and age-inappropriate or undesirable behaviors. In Count 1 of his complaint, Brady alleges that Blue Cross violated its fiduciary duties under ERISA by denying coverage and failing to provide a full and fair review. In Count 2, he alleges that Blue Cross violated the Mental Health Parity and Addiction Equity Act by imposing more stringent criteria for mental health treatment (a 24-hour on-site nursing requirement) than for analogous medical/surgical benefits. Blue Cross moved to dismiss the complaint for failure to state a claim. Because Brady’s two causes of action are both dependent on a finding that the 24-hour on-site nursing requirement violates the Parity Act, and thus rise and fall together, the court spent the decision explaining why Brady plausibly alleges just that. Brady alleged the 24-hour on-site nursing requirement violates the Parity Act in three ways: (1) the plan facially violates the Parity Act by imposing a 24-hour on-site nursing requirement for residential treatment centers but not for analogous medical/surgical care such as skilled nursing facilities; (2) even if the terms at issue are facially neutral, the 24-hour on-site nursing requirement is not a part of generally accepted standards of care for residential treatment centers and was incorporated in the plan to significantly limit access to mental health coverage; and (3) the requirement creates a network disparity. The court was persuaded by each of these three theories. First, the court agreed that the plan facially violates the Parity Act as it requires residential treatment centers to have 24-hour on-site nursing and does not expressly require the same for analogous medical and surgical facilities. Blue Cross argued that the plan functionally imposes the same requirement on both because it requires skilled nursing facilities to meet state licensing or Medicare/Medicaid requirements, which in turn require 24-hour nursing, but the court did not agree. Not only was the court unwilling to adopt Blue Cross’s logic that “for purposes of the parity analysis, incorporating state and federal law is equivalent to writing those laws’ treatment limitations into the plan,” but the court also pointed out that “Medicare/Medicaid provisions do not clearly impose the same 24-hour on-site nursing requirement that the plan does.” Importantly, the state licensing requirements for skilled nursing facilities require they provide 24-hour licensed nursing service, without requiring that the service be on site. Thus, the court was convinced that Brady stated a viable facial Parity Act challenge. It was also convinced he stated both of his as-applied challenges as well. As the court understood it, the “alleged violation does not involve going beyond generally accepted standards of practice or state or federal law requirements. Rather, it involves imposing a set of requirements that operate together to effectively carve mental health treatment (but not other forms of treatment) out of the plan’s coverage.” The court was persuaded that the 24-hour on-site nursing requirement, combined with the medical necessity requirement, is more restrictive in operation for mental health treatment than for medical or surgical treatments. Moreover, the court was open to the idea that the requirement violates the Parity Act because the terms result in a lack of in-network residential treatment facilities, which supports a reasonable inference that Blue Cross added this language by design to restrict mental healthcare specifically. Based on the foregoing, the court concluded that the complaint plausibly alleges violations of the Parity Act, and by extension states its two causes of action. The court therefore denied Blue Cross’s motion to dismiss.
Eighth Circuit
Orrison v. Mayo Clinic, No. 24-CV-01124 (JMB/SGE), 2025 WL 2688798 (D. Minn. Sep. 19, 2025) (Judge Jeffrey M. Bryan). Plaintiff Sherry Orrison is an employee of the Mayo Clinic in Scottsdale, Arizona and a participant in her employer’s self-funded healthcare plan. Mayo is the plan’s administrator and MMSI, Inc. (“Medica”) is the claims administrator of the plan. Ms. Orrison’s action arises from her experiences attempting to obtain mental healthcare treatment for her teenage son in her hometown. Ms. Orrison alleges that the plan documents directed her to use an online search tool provided by Medica to look for available healthcare providers. According to her complaint, this search tool improperly omitted in-network providers. She argues this misrepresentation forced her to seek out-of-network providers for her son, which led to significant out-of-pocket healthcare costs that could have been avoided. In addition, Ms. Orrison alleges that defendants refused to provide information she sought regarding reimbursement calculations for out-of-network providers so that she could anticipate the costs of reimbursement. Finally, Ms. Orrison contends that defendants provided conflicting, and at times false, information as to her satisfied amounts for her deductibles and out-of-pocket maximums, which left her unable to make adequately informed decisions about the best coverage for her family. In her lawsuit, Ms. Orrison asserts the following nine causes of action against the two defendants: “violation of the Racketeering Influenced and Corrupt Organizations Act (RICO) (Count I); underpaid benefits (Count II); failure to provide accurate explanations of benefits (EOBs) (III); breach of fiduciary duties (Count IV); deprivation of a full and fair review (Count V); violation of the Mental Health Parity Act and Addiction Equity Act (Count VII); violation of the No Surprises Act (Count VIII); and additional claims for equitable relief (Counts VI, IX).” Defendants moved to dismiss all counts for failure to state a claim upon which relief may be granted. In this decision the court granted the motion without prejudice in part, granted the motion with prejudice in part, and denied the motion in part. First, the court granted the motion to dismiss the RICO claim without prejudice, as it agreed with defendants that Ms. Orrison’s allegations of mail and wire fraud fail to satisfy the pleading standard under Rule 9(b). Second, the court also dismissed the ERISA Section 502(a)(1)(B) claim without prejudice, as the court held that the complaint as currently alleged fails to identify any plan term which was allegedly violated. The court then turned to the fiduciary breach allegations. It declined to dismiss this claim, as it found that the complaint contains sufficient allegations that defendants breached a fiduciary duty when they failed to inform Orrison of material information, including the out-of-network pricing methods and methodology used to calculate reimbursement rates. The court stressed that “[m]aking materially misleading statements constitutes a breach of a fiduciary’s duty of prudence and loyalty.” Moreover, the court noted that the complaint details the efforts Ms. Orrison made to request this specific information, and how, rather than supply this information, defendants instead told her only that the allowed amounts were “negotiated on a claim-by-claim basis” and could “fluctuate throughout the year for the same provider and the same service.” Thus, the court allowed the fiduciary breach claim to proceed. For much the same reason, the court denied the motion to dismiss the full and fair review claim. Like the fiduciary breach claim, the court found that the plan’s failure to provide a basis for allowed amount calculations violates the requirement for a full and fair review, and as explained above the court was convinced the complaint adequately details the ways Ms. Orrison was deprived of relevant pricing information upon request. However, Ms. Orrison’s Mental Health Parity claim did not fare as well. The court dismissed this cause of action, without prejudice, holding that the complaint includes only general allegations of a disparity between mental health treatments and other types of healthcare coverage. “Orrison identifies no provision within the Plan which provides different criteria utilized to determine coverage, nor does she identify any mental health claim which was treated differently than a medical or surgical claim. These ‘threadbare’ allegations, without more, are insufficient.” The court then considered the No Surprises Act claim. The court allowed this claim to go forward insofar as it alleges defendants violated the database requirement of the Act, Section 1185i(a)(4), because the complaint contains plausible allegations that Medica’s provider search tool inaccurately omitted the in-network providers within fifty miles of Ms. Orrison’s home. Finally, the court dismissed Ms. Orrison’s three remaining claims for equitable relief. Defendants moved to dismiss these claims as duplicative of her other causes of action. Ms. Orrison failed to respond to defendants’ motion to dismiss these claims in her opposition. As a result, the court concluded that these last three causes of action were waived, and thus dismissed them with prejudice. Thus, as outlined above, the court reached a mixed decision on the motion to dismiss and the action will proceed.
Pension Benefit Claims
Sixth Circuit
Gragg v. UPS Pension Plan, No. 2:20-cv-5708, 2025 WL 2696453 (S.D. Ohio Sep. 22, 2025) (Judge Algenon L. Marbley). When he was planning his retirement from UPS in 2010, plaintiff Ralph Gragg considered every benefit option available to him under UPS’s two ERISA-governed plans: the UPS Retirement Plan and the UPS Pension Plan. On June 28, 2010, Mr. Gragg submitted his retirement paperwork and elected the “Social Security Leveling Option – Age 65” under both plans. Each plan began issuing Mr. Gragg monthly payments on August 1, 2010. This litigation stems from the plans’ reductions of Mr. Gragg’s benefits after he began receiving Social Security payments in February of 2018. Mr. Gragg believed that his payments were improperly being reduced by twice the amount of his Social Security benefit, because each plan was reducing his payments by the full amount of his Social Security benefit. As a result, his monthly benefit payments dropped significantly. On November 2, 2020, Mr. Gragg filed this action, seeking to recover benefits due to him under the terms of the plans, to enforce his rights, and to clarify his rights to future benefits. Approximately three years after litigation began, the parties each moved for judgment in their favor. “When resolving the motions, this Court acknowledged that Plaintiff alleged the Plan miscalculated his benefits by treating him as if he received two Social Security retirement checks – one per pension plan – when in fact he received only one. It also recognized that Plaintiff’s expectation of a single, leveled benefit was not unreasonable given the information provided at retirement. This Court further noted that offering a Social Security Leveling Option – Age 65 benefit in the amount Plaintiff seeks would cause the total to exceed the actuarial equivalent of the Qualified Joint & Survivor Annuity benefit options. The Internal Revenue Code, however, prohibits any optional form of benefit from exceeding those amounts. Accordingly, this Court, unconvinced by an all-or-nothing approach, denied the motions and remanded Plaintiff’s claim to the Plan for recalculation in a manner that would provide Gragg with a leveling benefit without violating any provisions of the Internal Revenue Code.” On remand, UPS came up with new calculations and an approach where “from 2024 through 2028, Plaintiff’s monthly benefit under the UPS Retirement Plan would be increased to $750 – over $300 more than he would have received under the original Social Security Leveling Option. Approximately $450 of that monthly amount would be applied toward recouping the overpayment. Beginning in 2029, when Plaintiff would be 78 years old, the monthly benefit would be reduced to $250, thereby completing the recovery of the prior overpayment.” Mr. Gragg took issue with defendant’s decision and requested that the court instead recalculate his monthly benefit as if, at the time of his retirement, all of his accrued benefit were payable to him from the single, merged Plan and as if it were payable to him under the Social Security leveling option. He argued that this calculation would accurately represent the amount he should have received since his retirement and the amount he should continue to receive going forward. In this decision the court resolved the parties’ calculation dispute, and under an arbitrary and capricious standard of review, sided with defendant. The court found that the pension plan articulated a reasoned and legally supportable basis for its calculation decision, and that its approach is consistent with the terms of the plan. It added that not only does the plan’s approach address Mr. Gragg’s core concern regarding double counting, but it also complies with the court’s directive to prorate his Social Security benefit in accordance with IRS regulations governing joint and survivor annuities. Accordingly, the court concluded that defendant’s recalculation was neither arbitrary nor capricious. The court therefore granted judgment in favor of the UPS Pension Plan.
Seventh Circuit
Havlik v. University of Chicago, No. 1:23-CV-02342, 2025 WL 2720677 (N.D. Ill. Sep. 24, 2025) (Judge Edmond E. Chang). Edward S. Lyon worked at the University of Chicago and participated in the University’s contributory- and supplemental-retirement plans from 1960 until 1996. On November 22, 2019, Edward submitted to the plan’s recordkeeper, the Teachers Insurance and Annuity Association (“TIAA”), a beneficiary-designation form in which he sought to name as beneficiaries his 36 grandchildren. In addition to his designation form, Mr. Lyon attached his wife Valerie’s executed power of attorney authorizing Daniel Davies “to transfer … assets of any type over which [Valerie] ha[d] an ownership interest in” and “[t]o name or change the beneficiary or beneficiaries under any … assets, accounts, or interests in which [Valerie] ha[d] the right to name or change.” Mr. Davies waived Valerie’s right to any preretirement survivor death benefit under the plans. Edward died shortly after, on December 15, 2019. His accounts under the University’s plans totaled $1,210,950.16 at the time. TIAA rejected Edward’s designation form. Then, a year later, on December 20, 2020, Valerie died. Following Valerie’s death, the Trustees of the Edward S. Lyon Trust submitted a claim with the University seeking the distribution of benefits from the plans to the grandchildren per the 2019 designation. The University, however, rejected the Trustee’s claim. It concluded that Valerie’s spousal waiver was ineffective because her underlying power of attorney lacked a grant of specific authority required under Wisconsin law. The Trustees appealed the University’s determination, but the University denied their appeal. In this litigation the Trustees allege that TIAA and the University violated ERISA by erroneously rejecting Edward’s attempt to designate his 36 grandchildren as his beneficiaries. Specifically, they assert three causes of action: first, a claim against the University and TIAA for the benefits due under Edward’s plans; second, a claim that the University and TIAA breached their fiduciary duty; and third, a claim of negligence against TIAA for its alleged errors in the month before and years after Edward passed. The parties each moved for summary judgment. In this decision the court held that the University’s interpretation of Wisconsin law governing the scope of powers of attorney was correct, and thus entered judgment in favor of defendants. The Wisconsin provision at issue requires the principal to “expressly grant[]” his agent certain authorities; among them are the power to “[w]aive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan.” Because this case clearly concerns a survivor benefit under a retirement plan, the court agreed with the University that the law required Valerie to expressly grant Mr. Davies the power to waive her right to the benefits at issue. But even putting aside the Wisconsin law, the court concluded defendants are entitled to summary judgment on the Trustees’ claim for benefits under Edward’s plans under ERISA. The court determined this was so because ERISA § 1055 required Valerie to waive her right to a joint-and-survivor annuity to designate a different beneficiary, and she did not do so. The court stressed that there can be no disputing the fact that Valerie’s power of attorney never expressly granted Mr. Davies power of attorney regarding the right to an annuity at issue here. “The Trustees do not offer any competing account that the plans were not joint-and-survivor annuities by default, and they provide no argument that the plans fall under some exception to § 1055’s broad reach. There thus is no genuine dispute of material fact: the Trustees are not entitled to effectuate the distribution of benefits directly to the 36 grandchildren.” Finally, the court found that neither the fiduciary breach claim nor the negligence claim had merit, as defendants’ interpretations of the plans and Wisconsin law were correct, and because they committed no other plausible breach of fiduciary duty. Accordingly, the court denied the Trustees’ motion for summary judgment, granted the University and TIAA’s motions for summary judgment, and dismissed the case.
Ninth Circuit
McClean v. Solano/Napa Counties Elec. Workers Profit Sharing Plan, No. 23-cv-01054-AMO, 2025 WL 2710573 (N.D. Cal. Sep. 23, 2025) (Judge Araceli Martínez-Olguín). Plaintiff Rodney McClean worked as an International Brotherhood of Electrical Workers union electrician from 1974 until 2009. After 31 years of credited service in the industry, Mr. McClean sought to take disability retirement following a diagnosis of a rare degenerative disease. Mr. McClean encountered problems obtaining these benefits, which eventually led to this action. Mr. McClean alleges that his retirement plan, his union, and the fiduciaries of the retirement plan have committed numerous violations of ERISA. Before the court here were two motions to dismiss, each filed by a different set of defendants – the Local 180 defendants and the Local 6 defendants. In this order the court granted the motions to dismiss without leave to amend. The court began with the five claims asserted against the Local 180 defendants. In a previous dismissal order the court explained that it found the allegations in the complaint fail to state claims of fiduciary breach against the Local 180 defendants. The court ruled that the complaint failed to put forth facts of self-dealing to plausibly allege a claim of disloyalty, and did not allege how these defendants violated prudence standards. Nor could the court see from the complaint how defendants’ actions were contrary to the governing plan documents and instruments. The court further found that the claim alleging breach of the duty to maintain and provide records also failed. Moreover, the court viewed the complaint’s allegations of theft implausible considering Mr. McClean’s admission that he took hardship withdrawals from his account. Finally, the court dismissed the derivative failure to monitor and co-fiduciary breach claims because these causes of action are dependent on an underlying breach of fiduciary duty. In this order, the court concluded that all these deficiencies, and more, persisted in Mr. McClean’s amended complaint. As a result, the court deferred to its earlier holdings, and again granted the Local 180 defendants’ motion to dismiss, this time with prejudice. The court then discussed the Local 6 defendants’ motion to dismiss. The court dismissed the only cause of action asserted against these defendants (a claim for breach of fiduciary duty for failure to maintain and provide records) for the simple reason that the allegations in the operative complaint fail to show that Mr. McClean was a participant or beneficiary of the Local 6 Pension Plan. In fact, it seemed to the court that he was not, and that any work he performed for the Local 6 union was reciprocated by contributions to the Local 180 plan. For this reason, the court found “any entitlement by Mr. McClean to any benefits from Local 6 is implausible in light of his own allegations that any contributions would have or should have been reciprocated.” Thus, the court granted the second motion to dismiss as well. The Local 6 claims, like the Local 180 claims, were dismissed with prejudice because Mr. McClean failed to cure his allegations from his prior complaint.
Pleading Issues & Procedure
First Circuit
Torres v. The Home Depot Puerto Rico, Inc., No. 24-01058 (MAJ), 2025 WL 2712432 (D.P.R. Sep. 23, 2025) (Judge Maria Antongiorgi-Jordan). Plaintiff Evelyn Llanos Torres filed this action seeking disability benefits under an ERISA-governed plan. Ms. Llanos Torres has sued Home Depot Puerto Rico, Inc., Home Depot USA, Inc., the Home Depot Welfare Benefit Plan, The Hartford, Aetna, and the Home Depot Group Benefit Plan, the Administrative Committee of the Home Depot Welfare Benefit Plan and Home Depot Group Benefit Plan, and Scott Smith as the sole member of the Administrative Committee. In addition to a claim for benefits under Section 502(a)(1)(B), Ms. Llanos Torres also asserts claims of fiduciary breach under Sections 502(a)(2) and (3). Before the court was a motion to dismiss filed by the Home Depot defendants, the Administrative Committee, and Mr. Smith. In their motion, the defendants argued that they are not proper parties to the claim for benefits, and that any remaining claims against them were waived pursuant to a settlement agreement and general release Ms. Llanos Torres entered into with the Home Depot on October 13, 2022. The court agreed with both points, and granted the motion to dismiss with prejudice. As to the first point, the court found that the undisputed evidence demonstrates that Aetna and The Hartford are the proper defendants to the claim for benefits, as they are the entities who control the administration of the disability plan and make all benefit decisions regarding disability claims. Thus, the court agreed with the moving defendants that Ms. Llanos Torres failed to state a plausible claim that they are proper parties to her claim for benefits under Section 502(a)(1)(B). Regarding waiver, the court agreed that the claims for breach of fiduciary duty were released pursuant to the terms of the settlement agreement, as the events and circumstances surrounding these claims predate the signing of the agreement and are encompassed by it, and no exceptions apply. Because the court found that the complaint fails to allege any facts which could plausibly support an inference that the claims for breach of fiduciary duty were not waived by the settlement agreement, the court dismissed the claims under Section 502(a)(2) and (3) against the moving defendants. Thus, the court granted the motion to dismiss in its entirety, and dismissed the claims without the opportunity for further amendment.
Ninth Circuit
Phillips v. Cobham Advanced Electronic Solutions, Inc., No. 23-cv-03785-EKL, 2025 WL 2689268 (N.D. Cal. Sep. 19, 2025) (Judge Eumi K. Lee). Plaintiffs in this putative class action are participants of the Cobham Advanced Electronic Solutions, Inc. 401(k) retirement plan. In their operative complaint, plaintiffs allege that the fiduciaries of the plan violated ERISA by imprudently including the American Century Target Date Series of funds in the Plan and by failing to provide the Plan’s Investment Policy Statement (“IPS”) in violation of § 104. Defendants moved to dismiss. In this order the court granted the motion to dismiss the imprudence and failure to monitor claims, with prejudice, and denied the motion to dismiss the failure to furnish documents claim. At bottom, the court held that plaintiffs’ allegations of imprudence were fundamentally insufficient to state a viable claim. “Taken as a whole, at most, the complaint alleges that the American Century TDFs yielded lower returns than other investments at times, but also frequently performed above median – particularly during market downturns. These outcomes were consistent with the American Century TDFs’ risk mitigation strategy and investment objectives. Plaintiffs have not alleged any facts to suggest that the Committee’s investment strategy was beyond the ‘range of reasonable judgments a fiduciary may make based on her experience and expertise.’ Although Plaintiffs might have preferred taking on more risk to chase higher potential returns, ‘ERISA fiduciaries are not required to adopt a riskier strategy simply because that strategy may increase returns.’” Accordingly, the court dismissed the claim of imprudence, as well as a derivative failure to monitor claim. And because plaintiffs have had several opportunities to amend their complaint and have repeatedly failed to cure the pleading deficiencies identified by the court, the court dismissed the fiduciary breach causes of action with prejudice. That being said, the court denied the motion to dismiss the third cause of action for failure to furnish documents in violation of 29 U.S.C. § 1024(b)(4). The court was persuaded that a plan’s IPS is “a document that restricts or governs the Plan’s operation,” and that as such it is an instrument under which the plan is operated and ERISA § 104(b)(4) requires its disclosure. Accordingly, the court found plaintiffs plausibly stated a claim under § 104(b)(4), and this aspect of their litigation will continue.
Eleventh Circuit
Taylor v. University Health Services, Inc., No. CV 124-019, 2025 WL 2734564 (S.D. Ga. Sep. 25, 2025) (Judge J. Randal Hall). The 215 plaintiffs in this ERISA lawsuit are former employees of defendant University Health Services. “Each Plaintiff employed by University was told by management that if they were employed before January 1, 2005 and had thirty or more years of continuous service, when he or she reached Medicare eligibility age, a Medicare Supplement or Medigap policy would be provided to them through United Healthcare free of charge for life (the ‘Alleged Benefit’).” The gravamen of this litigation stems from Piedmont Healthcare, Inc.’s takeover of University Health Services. After Piedmont took over operations of the hospital and assumed the University’s obligations under ERISA to current and former employees, the Alleged Benefit was suddenly called into doubt. It became unclear whether the employer would continue to honor its prior promises and provide the benefit at issue. Given this uncertainty, plaintiffs sued in order to clarify their rights to future benefits and hold their employer to its alleged promises. In their action, plaintiffs assert three claims against defendants: (1) a claim for vested benefits and clarify their rights to future benefits under Section 502(a)(1)(B); (2) a claim for breach of fiduciary duty and equitable relief under Section 502(a)(3); and (3) a claim for violation of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). Defendants moved to dismiss the complaint in its entirety under Federal Rule of Civil Procedure 12(b)(6). The court granted in part and denied in part in this order. To begin, the court denied the motion to dismiss Count 1. The court found plaintiffs’ allegation that the University told its employees they would be given free, for life, a Medicare Supplement Policy through United Healthcare, sufficient to plausibly state a claim under Section 502(a)(1)(B), notwithstanding the fact that plaintiffs have not currently attached a document providing evidence of express language in a provision of a plan to support this allegation. “Plaintiffs’ allegations, accepted as true, provide that Defendants offered the Alleged Benefit, and whether there is a writing and clear express language supporting this claim will be determined at a later point.” While the court denied the motion to dismiss plaintiffs’ first cause of action, it nevertheless granted the motion to dismiss the other two. The court dismissed the breach of fiduciary duty claim under Section 502(a)(3), as it agreed with defendants that this cause of action is duplicative of the surviving claim for benefits under Section 502(a)(1)(B). The court also dismissed the COBRA violation claim because plaintiffs failed to allege a qualifying COBRA event as defined by § 1163. The court agreed with defendants that the change in insurance carriers and switching of coverage does not fall under any of the six enumerated qualifying events, so no COBRA notice was required. Accordingly, the court left plaintiffs’ claim under Section 502(a)(1)(B) intact, but otherwise granted the motion to dismiss.
Statutory Penalties
Ninth Circuit
Zavislak v. Netflix, Inc., No. 24-4156, __ F. App’x __, 2025 WL 2717422 (9th Cir. Sep. 24, 2025) (Before Circuit Judges Smith and Bumatay, and District Judge J. Campbell Barker). In early January 2021, plaintiff Mark Zavislak sent a letter to Netflix’s corporate headquarters requesting various documents related to the company’s health plan, of which he was a beneficiary. At this time most of Netflix’s employees were working remotely due to the COVID-19 pandemic, and the letter sat unopened without reaching Netflix’s benefits manager. Having not heard from Netflix, Mr. Zavislak sent a follow-up email a few weeks later, indicating he was a beneficiary of the plan and that he was requesting plan documents pursuant to ERISA Section 104. Netflix subsequently responded, and before the end of February provided Mr. Zavislak seven summary documents, which it stated were the governing plan documents. “Netflix did not provide Zavislak with its four claims administration agreements (CAAs) with Collective Health Administrators, LLC (Collective Health), Anthem Blue Cross Life & Health Insurance (Anthem), Delta Dental of California (Delta Dental), and Vision Service Plan (VSP), or nine other internal documents (the Ancillary Documents).” Mr. Zavislak then filed suit against Netflix in the Northern District of California requesting penalties for Netflix’s refusal to furnish the CAAs and Ancillary Documents, penalties for the delay in providing the other governing documents upon written request, injunctive relief compelling Netflix to produce those documents, and injunctive relief to compel Netflix to maintain its Plan according to a written instrument, to the extent that the Plan was not in writing. The court ultimately denied Mr. Zavislak’s request for an injunction mandating Netflix disclose the CAAs and Ancillary Documents pursuant to Section 104 of ERISA, but awarded $765 in statutory penalties to Mr. Zavislak for Netflix’s delayed disclosure of the seven summary plan documents. (Your ERISA Watch covered this decision in our June 19, 2024 edition, musing, “One can only wonder how much time and money has been expended in the three years this case has been pending, all for $765.”). Mr. Zavislak was dissatisfied and appealed to the Ninth Circuit; Netflix responded with a cross-appeal. In an unpublished decision that broke no new ground, the court of appeals affirmed the district court’s conclusion that Netflix did not need to disclose any additional documents. The Ninth Circuit wrote that its “precedents call for a narrow interpretation of Section 104 in line with the district court’s holding.” Specifically, the appeals court outlined that Section 104(b)(4) calls for the disclosure only of documents “that provide individual participants with information about the plan and benefits.” The court of appeals agreed with the lower court that the CAAs do not fall within the scope of Section 104 because they govern only the relationship between Netflix and its third-party service providers, “not the actual benefits to which Plan participants are entitled or the processes Plan participants must undergo to obtain those benefits.” As for the Ancillary Documents, the appellate court disagreed with Mr. Zavislak that they were instruments under which the plan was established or operated. To the contrary, it concluded that these documents were either already available to Mr. Zavislak or were internal documents which did not address his standing with the Plan. As a result, the Ninth Circuit affirmed the district court’s holding with regard to Netflix’s decision not to produce the CAAs and the Ancillary Documents. However, the Ninth Circuit reversed the district court’s award of $765 in penalties against Netflix. It determined that the district court had abused its discretion by awarding this penalty because the Department of Labor had suspended deadlines contained in Title 1 of ERISA during this time period due to the COVID-19 crisis. In particular, the Ninth Circuit concluded that there was insufficient support in the record for statutory penalties given the fact that “Netflix disclosed all required documents as soon as administratively practicable ahead of the March 1, 2021, disaster order deadline and did not act in bad faith, especially in light of the COVID-19 pandemic.” Accordingly, the court of appeals disagreed with the lower court that there had been a violation of Section 104, and thus there was no basis for penalties. Therefore, the court of appeals vacated this aspect of the district court’s decision. Consequently, its decision was a complete victory for Netflix.