It is a light and breezy week here in California and at Your ERISA Watch. So, we have no case of the week and just a few covered decisions.  Of note is an interesting attorneys’ fee decision from the Sixth Circuit, and two decision on petitions for interlocutory review under 28 U.S.C. § 1292(b), one granting the defendants’ petition in a pension annuitization case, and the other denying such a petition in a healthcare lawsuit bright by the former Seretary of Labor. 

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

Attorneys’ Fees

Sixth Circuit

Canter v. Blue Cross Blue Shield of Mass., Inc., No. 24-3926, __ F. App’x __, 2025 WL 2058997 (6th Cir. Jul. 23, 2025) (Before Circuit Judges Moore, Griffin, and Ritz). Plaintiff-appellant Keith Canter received health insurance through an ERISA-governed healthcare plan administered by Blue Cross Blue Shield of Massachusetts, Inc. In 2015, Mr. Canter underwent back surgery and submitted two claims for $41,034 and $43,988. Blue Cross denied coverage of both claims, which prompted Mr. Canter to sue under ERISA. Mr. Canter was successful in his lawsuit and the district court granted summary judgment in his favor. It then remanded the case to Blue Cross to reconsider the benefit decision. Blue Cross reversed its benefits decision on remand and awarded Mr. Canter $85,022 for the two claims that were previously denied. Mr. Canter moved to reopen the case following the remand decision and moved for an award of prejudgment interest and attorney’s fees. The court ultimately awarded Mr. Canter $15,267.01 in prejudgment interest, $622.75 in costs, and $204,771 in attorney’s fees for work in obtaining the remand, for a total of $220,660.76, which was in addition to the Blue Cross’s $85,022 payment. Mr. Canter then filed a second motion for attorney’s fees, seeking compensation for the work his lawyer performed after the administrative remand. The district court conducted a second fee analysis wherein it considered only the work done after the remand. It then denied post-remand fees. Mr. Canter appealed that order before the Sixth Circuit. The court of appeals affirmed the district court’s post-remand order denying fees in this decision. Before discussing Mr. Canter’s arguments, the appeals court stressed that it reviews a district court’s grant or denial of a fee award for abuse of discretion and that, in general, it will “defer to a district court’s determination of a fee award, given ‘the district court’s superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters.’” With that being said, the Sixth Circuit could find no abuse of discretion or error in the district court’s decision. Mr. Canter first challenged the district court’s use of the Sixth Circuit’s five King factors: (1) the degree of the opposing party’s culpability or bad faith; (2) the opposing party’s ability to satisfy an award of attorney’s fees; (3) the deterrent effect of an award on other persons under similar circumstances; (4) whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or resolve significant legal questions regarding ERISA; and (5) the relative merits of the parties’ positions. The Sixth Circuit took no issue with the lower court’s application of these factors or its decision to undertake the King analysis in the first place. The appellate court found no issue with the district court’s division of Mr. Canter’s attorney’s work into the work that contributed to obtaining a remand and the post-remand work, or its decision to limit the scope of the fee analysis to the second category of work. As a practical matter, the district court adopted this analytical framework as a way of differentiating the second fee motion from the first. Since Mr. Canter’s two fee motions presented a clear division between the pre- and post-remand work, the Sixth Circuit concluded that it was entirely appropriate for the district court to separate them when conducting its analysis. The Sixth Circuit held, that “the court conducted a full and detailed King analysis that clearly outlined its reasons for distinguishing the post-remand work and declining to grant fees for that work.” Next, Mr. Canter argued that he was entitled to fees for litigating against Blue Cross to obtain his original fee award. Though the court of appeals acknowledged that “fees for fees” are certainly recoverable, it nevertheless emphasized that “the district court was not required to separate out fees for this kind of work from the overall post-remand litigation, which extended beyond Canter’s claim to fees for fees.” Thus, the court of appeals declined to disturb the district court’s “reasoned analysis as to the appropriateness of attorney’s fees for post-remand work in this case.” Finally, the court of appeals briefly went through alleged factual errors Mr. Canter argued were present in the district court’s decision, including its characterization of his post-remand work and its assessment of the success he achieved, and explained why in its view these arguments failed. Accordingly, the Sixth Circuit affirmed the district court’s post-remand fee decision.

ERISA Preemption

Ninth Circuit

Kenyon v. Reliance Standard Life Ins. Co., No. CV 25-11-BLG-TJC, 2025 WL 2029919 (D. Mont. Jul. 18, 2025) (Judge Timothy J. Cavan). Plaintiff Anthony P. Kenyon worked from 2004 until 2020 as a pipefitter for an employer in Montana. Through his employment Mr. Kenyon became a member of the United Steel Workers Local 11-443 union. As a union member Mr. Kenyon became a participant in a long-term disability insurance policy through Reliance Standard Life Insurance Company. By January 2020, Mr. Kenyon had to stop working due to recurrent pneumonia and infections caused by an immunodeficiency. Although it took a bit of back and forth, Reliance eventually approved Mr. Kenyon’s claim for coverage under the policy. Then in July 2020, Mr. Kenyon elected to roll a portion of his pension into an individual retirement account and took the balance as a lump sum payment. This litigation stems from Reliance’s decision to offset Mr. Kenyon’s disability benefit payments by the value of the lump sum pension payment. After unsuccessfully appealing Reliance’s determination, Mr. Kenyon brought this action against Reliance in state court in Montana. In his complaint Mr. Kenyon asserts state law claims for declaratory judgment, breach of contract, and violation of Montana’s Unfair Trade Practices Act. Reliance removed the action to federal court invoking federal question jurisdiction. Before the court were Reliance’s motion to dismiss and Mr. Kenyon’s motion to remand. Both motions turned on the issue of ERISA preemption. The court addressed the motion to remand first. As an initial matter, the court disagreed with Mr. Kenyon that the disability policy fell under the “safe harbor” exemption to ERISA. Rather, the court found that there was ample evidence that the steel workers union endorsed the plan for the purposes of the safe harbor regulation and established and maintained the plan to bring the plan within the scope of ERISA. The court noted, among other things, that the union was designated as the plan administrator, that it had the right to modify or terminate the plan, and that it had designated duties and responsibilities under the policy including issuing a certificate of insurance to each insured, maintaining records, and paying all premiums to Reliance when due under the policy. The court therefore determined that the policy is governed by ERISA. It then considered whether Mr. Kenyon’s claims are completely preempted by the federal statute, and found that they were. The court agreed with Reliance that each of the three state law causes of action could be brought as claims under ERISA, and that none of them were based on any independent legal duties. Instead, as alleged in the complaint, the claims arise from Reliance’s obligations under the policy, its actions handling Mr. Kenyon’s benefits, and its benefit calculation decision as a plan fiduciary to offset the benefit amount by the pension rollover payment. Accordingly, the court held that Reliance met its burden of showing that removal of the action was proper based on federal question jurisdiction. The court therefore denied the motion to remand. Finally, as each state law claim in the complaint was found to be completely preempted by ERISA Section 502(a), the court determined that the complaint was subject to dismissal under Rule 12(b)(6). The court thus granted Reliance’s motion to dismiss. However, it stated that it would grant Mr. Kenyon leave to file an amended complaint to amend to state a federal cause of action under ERISA.

Exhaustion of Administrative Remedies

Fourth Circuit

Young v. Western-Southern Agency, Inc., No. 2:23-cv-00764, 2025 WL 2080259 (S.D.W.V. Jul. 23, 2025) (Judge Thomas E. Johnston). Plaintiff Randy Young initially filed this lawsuit against defendant Western and Southern Life Insurance Company in state court in West Virginia. However, Western and Southern removed the case to federal court based on federal question jurisdiction. On September 20, 2024, the court determined that the Long-Term Incentive Retention plan at the center of the lawsuit is an ERISA-governed top-hat plan. Rather than dismiss Mr. Young’s action, the court permitted him to refile his complaint as an action under ERISA. Mr. Young did so. Western and Southern then filed a motion to dismiss the amended complaint. In support of its motion to dismiss, Western and Southern advanced three arguments: (1) Mr. Young’s claim for relief under ERISA is barred by his failure to exhaust administrative remedies; (2) his claim is also barred by his failure to timely file suit under the plan’s six-month deadline; and (3) Mr. Young is ineligible for the plan benefits because he was terminated for cause. In this decision the court agreed with defendant on all three points and therefore granted the motion to dismiss. First, the court stated that there was no dispute that Mr. Young failed to appeal his denial through the plan’s administrative channels. Mr. Young argued that exhausting the administrative remedies would have been futile because the same party who denied his claim would conduct the review. To this court, this “bare allegation” did not make a “clear and positive showing to warrant suspending the exhaustion requirement.” Thus, the court agreed with Western and Southern that Mr. Young’s complaint should be dismissed for failure to exhaust the internal administrative remedies. Second, the court held that the complaint should independently be dismissed for Mr. Young’s failure to timely file suit. The court noted that Mr. Young did not argue that the six-month period in the plan was unreasonable, nor did he provide an applicable statute of limitation that he believed would control. As the plan required that he file his action within six months of the final denial and because he did not commence his suit in that time, the court held that the action is time-barred. Finally, putting aside the issues of exhaustion and timeliness, the court determined that the uncontroverted evidence supports Western and Southern’s assertion that Mr. Young was ineligible for benefits under the plan because he was terminated for cause and Section 4.7 of the plan states that “[t]he contingent right of a participant or beneficiary to receive future payments hereunder with respect to both vested and nonvested performance units shall be forfeited . . . if the participant is involuntarily terminated from employment for cause by the company or any affiliate.” Mr. Young responded that the plan did not have the power to take away his vested and nonforfeitable benefits. However, the court held that ERISA’s strict vesting requirements do not apply to top-hat plans like the plan at issue. Thus, it said, “the funds do not rightfully belong to Plaintiff because they were forfeited under Section 4.7 of the LTIR plan, so unjust enrichment does not apply.” For these reasons, the court granted Western and Southern’s motion and dismissed the complaint.

Medical Benefit Claims

Second Circuit

Murphy Med. Associates, LLC v. Cigna Health and Life Ins. Co., No. 3:20-cv-1675 (VAB), 2025 WL 2022056 (D. Conn. Jul. 18, 2025) (Judge Victor A. Bolden). Plaintiffs Murphy Medical Associates, LLC, Diagnostic and Medical Specialists of Greenwich, LLC, North Stamford Medical Associates, LLC, Coastal Connecticut Medical Group, LLC, and Steven A.R. Murphy, M.D. are associated healthcare providers that operated COVID-19 testing sites. They have brought suit under ERISA and state law against Cigna Health and Life insurance Company and Connecticut General Life Insurance Company (collectively “Cigna or defendants”) to recover payment for COVID-19 testing and testing-related services that were denied reimbursement. Defendants countersued the providers for various claims related to alleged overpayments that they maintain plaintiffs collected. In previous orders the court granted in part and denied in part defendants’ motion to dismiss, and granted defendants’ motion for sanctions and precluded the plaintiffs from offering evidence in support of approximately 10,000 itemized claims. As a result of that last decision, plaintiffs were only permitted to introduce evidence to support the remaining 3,508 itemized claims. Plaintiffs moved for the court to reconsider its decision, but on September 20, 2024, the court declined to do so. Defendants subsequently moved for summary judgment on plaintiffs’ claims brought under ERISA, the Connecticut Unfair Trade Practices Act, and for tortious interference with beneficial or contractual relationships. In this decision the court granted in part and denied in part defendants’ motion for summary judgment. The court began with the ERISA claims. As an initial matter, the court agreed with defendants that in light of its order precluding plaintiffs from offering evidence as to the approximately 10,000 itemized claims, summary judgment in favor of Cigna was appropriate as to these claims. The court then focused on the remaining 3,508 itemized claims. It denied the motion to dismiss these ERISA claims. First, the court rejected defendants’ arguments challenging the validity of the assignments. It determined that the language of the assignment agreements could be interpreted to demonstrate the patients’ intent to assign any right to payment to the providers, and noted that courts in the District have found similar assignments sufficient to establish ERISA standing. Moreover, the court determined that plaintiffs’ representations to the patients that they would not seek payment from them insufficient to establish, as defendants argued, that the patients owed no debt to the providers for the medical services that could be recovered through their insurance. And while defendants argued that the assignment agreements only confer standing as to some of the providers, the court held that plaintiffs raised a genuine dispute of material fact as to the relationship between all of the providers, such that they could arguably be considered essentially a single healthcare provider. The court also declined to dismiss the ERISA claims for failure to exhaust administrative remedies owing to the fact defendants did not submit record evidence establishing that an administrative appeals process was available under the relevant plans for the itemized claims. Finally, the court concluded that dismissal of plaintiffs’ ERISA claims based on plaintiffs’ failure to post a cash price for the testing services was improper under the language of the CARES Act. For these reasons, the court denied defendants’ motion for summary judgment as to the itemized ERISA claims. However, the court granted summary judgment to Cigna on the two remaining state law causes of action. The court held that plaintiffs’ Connecticut Unfair Trade Practices Act failed because the Connecticut state legislature has not issued any statement that a violation of the COVID statutes, the FFCRA or the CARES Act, by a health plan is actionable under the Act. With regard to the tortious interference claim, the court agreed with defendants that plaintiffs presented no admissible evidence that Cigna made any defamatory statements about them. Accordingly, the motion to dismiss was granted in part and denied in part as explained above.

Sixth Circuit

Perrone v. BCBS Life Ins. Co., No. 1:24-cv-1313, 2025 WL 2027540 (W.D. Mich. Jul. 21, 2025) (Judge Hala Y. Jarbou). Plaintiff Jacob Perrone filed this action against Blue Cross Blue Shield of Michigan after the insurance company refused to cover the cost of his partial hospitalization program at an out-of-network residential mental health treatment facility during the months of March and April of 2021. Mr. Perrone asserts three causes of action in his complaint: (1) a claim for wrongful denial of benefits under Section 502(a)(1)(B); (2) a claim for equitable relief under Section 502(a)(3) based on an alleged violation of the Mental Health Parity and Addiction Equity Act; and (3) a state law claim for breach of contract. Blue Cross moved to dismiss the Parity Act violation and the breach of contract claims. The court in this order denied the motion to dismiss the claim under Section 502(a)(3), but granted the motion to dismiss the breach of contract claim. Blue Cross argued that the Parity Act violation must be dismissed because there is no private right of action available under the Mental Health Parity and Addiction Equity Act. The court, however, responded that this argument ignores the fact that Mr. Perrone explicitly invokes the Parity Act’s ERISA provision and the private right of action available to those denied plan benefits. As such, Blue Cross’s argument that Mr. Perrone lacks a remedial right to invoke the mental health parity requirement failed. The court did, however, agree with the insurer that the breach of contract claim was preempted by ERISA. The court determined that the claim self-evidently related to the benefit plan as it sought payment of benefits under the policy. As a consequence, the court found the state law breach of contract claim duplicative of ERISA’s enforcement mechanism for Mr. Perrone’s claim for recovery of benefits under the ERISA plan itself. The court therefore granted the motion to dismiss the breach of contract claim.

Pleading Issues & Procedure

Fourth Circuit

Konya v. Lockheed Martin Corp., No. 24-750-BAH, 2025 WL 2050997 (D. Md. Jul. 22, 2025) (Judge Brendan Abell Hurson). Plaintiffs in this putative class action are four retirees of defendant Lockheed Martin Corporation who allege that the defense contractor has violated ERISA in the transfer of their defined benefit pension benefits to a private and allegedly high-risk annuity with Athene Annuity & Life Assurance Company of New York through a process known as a pension risk transfer. Plaintiffs allege that the pension risk transfer was in violation of Lockheed’s statutory and fiduciary duties, and resulted in a prohibited transaction under ERISA. On March 28, 2025, the court issued an order denying Lockheed’s motion to dismiss the action. The court disagreed with defendant’s reading of the Supreme Court’s decision in Thole v. U.S. Bank, 590 U.S. 538 (2020), and their associated argument that plaintiffs do not have standing to bring suit because they have been paid all of their benefits to date. Instead, the court concluded that plaintiffs adequately alleged that Lockheed’s transfer of the plan assets and liabilities to Athene represented mismanagement so egregious that it substantially increases the risk that future pension benefits will go unpaid.  This lawsuit does not exist in a vacuum, however. Other large defined pension plans in the country have also annuitized some of their pension liabilities with Athene, and retirees affected by those transfers have brought similar lawsuits concerned by the risk of future harm. On the same day this district court issued its denial of defendant’s motion to dismiss, Judge Loren AliKhan of the United States District Court for the District of Columbia granted a motion to dismiss filed by corporate defendants in a case with facts similar to the present case in Camire v. Alcoa USA Corp., No. CV 24-1062 (LLA), 2025 WL 947526 (D.D.C. Mar. 28, 2025). (Your ERISA Watch reported on both decisions in our April 9, 2025 issue.) Before the court here was Lockheed’s motion for an interlocutory appeal to address this “burgeoning split” on whether challenges to pension risk transfers involving Athene are viable in light of Thole. In this decision the court granted defendant’s motion and stayed the case pending appeal, holding that Lockheed presented a controlling question of law about which there is a substantial basis for difference of opinion among the district courts and that an order from an immediate appeal may materially advance this litigation. As to the controlling question of law, the court held that its ultimate decision rendered was a legal one “namely whether those facts, if true, represent ‘mismanagement . . . so egregious that it substantially increased the risk that [Plaintiffs’ retirement plan] would fail and be unable to pay the participants’ future pension benefits.’” Moreover, the court added that “the question is controlling in the sense that if a higher court decided the question differently, the case would not move forward in its present form.” In addition to finding that a controlling question of law exists, the court also agreed with Lockheed that there is a substantial basis for a difference of opinion on the question to be presented for appellate review, as evidenced by the two divergent district court opinions issued on the same day. It is clear, the court said that the “courts themselves disagree as to what the law is.”‘ Finally, the court determined that resolving the issue related to the application of Thole to the allegations at hand has the potential to ease future litigation by simplifying the trial and making discovery less costly and more straightforward. Accordingly, some guidance by the court of appeals, the court found, will help avoid unnecessary litigation here. For these reasons, the court found that the requirements for an interlocutory appeal under 28 U.S.C. § 1292(b) were met on the question proposed by Lockheed “namely ‘whether Plaintiffs have plausibly alleged a sufficient injury for purposes of Article III’ under the unique scenario presented here.”  For those readers not familiar with interlocutory appeals under § 1292(b), the district court’s order does is a necessary but not sufficient basis for the appeal. The Fourth Circuit must now decide whether it wishes to hear the appeal and has pretty much unfettered discretion in doing so, even if it agrees with the district court that the § 1292(b) criteria are met. Full disclosure: attorneys at Kantor & Kantor represent that plaintiffs in Konya, along with attorneys from several other law firms.  

Sixth Circuit

Shakespeare v. MetLife Legal Plans, Inc., No. 2:25-cv-02250-TLP-atc, 2025 WL 2051113 (W.D. Tenn. Jul. 22, 2025) (Judge Thomas L. Parker). While she was employed at Prime Therapeutics LLC pro se plaintiff Tan Yvette Shakespeare participated in a prepaid legal services plan insured by MetLife, which she alleges by its terms promised legal representation for family law matters, including divorce. But when Ms. Shakespeare requested a counsel to represent her in her divorce, she maintains that MetLife provided an attorney who did not represent her in an appropriate professional manner before abruptly withdrawing from representation in the middle of the divorce proceeding. Ms. Shakespeare says that losing her counsel caused the state court to enter default judgment against her resulting in financial harm and loss of property. In January 2025, Ms. Shakespeare sued MetLife and Prime Therapeutics in state court in connection with this experience, asserting state law claims for breach of contract, bad faith, and negligence. Defendants removed the case to federal court and then moved to dismiss the complaint. The court referred the matter to Magistrate Judge Annie T. Christoff. Judge Christoff entered a report and recommendation on April 30th recommending that the court deny defendants’ motion to dismiss. MetLife timely objected. In this decision the court found no error in the report’s analysis and adopted it in full, overriding MetLife’s objection and denying defendants’ motion to dismiss. To begin, the court agreed with Judge Christoff that without more facts about the legal services plan and more evidence about Prime Therapeutics’ conduct related to it, the court could not find that Prime endorsed the plan as a matter of law. As a result, the court agreed with the Magistrate Judge that it is too early to decide whether the plan meets ERISA’s safe harbor exemption requirements, and by extension too soon to decide the ERISA preemption issue. The court thus denied the motion to dismiss based on ERISA preemption. Moreover, the court agreed with Judge Christoff that Ms. Shakespeare’s complaint alleges enough facts supporting each element of her breach of contract, negligence, and bad faith denial of insurance claims. Accordingly, the court overruled the objections levied by MetLife. Instead, it adopted the report and recommendation, and denied the motion to dismiss.

Kraft Heinz Food Co. v. Fritz, No. 3:24 CV 1822, 2025 WL 2062250 (N.D. Ohio Jul. 23, 2025) (Judge James R. Knepp II). Decedent Larry Leo Fritz, II initially designated his two children, James E. Fritz and Larry Leo Fritz, III, as the beneficiaries of his benefits plan maintained under a Kraft Heinz savings account. However, just four days before he was involuntarily admitted to a psychiatric unit and six weeks before his death, Mr. Fritz’s online account was used to change the beneficiary of the plan to name his mother, Rita A. Fritz, as the sole beneficiary. Rita was caring for her son during this period preceding his death. One month after their father died the Fritz siblings filed a lawsuit in Huron County Probate Court in Ohio against their grandmother, Rita, to invalidate the designation, claiming incapacity or undue influence. Approximately three months later, Kraft Heinz Food Company filed this interpleader action against Rita and the siblings to facilitate payment of benefits under the plan. The Fritz siblings moved to dismiss or stay proceedings in this action under the Colorado River doctrine, claiming that the Huron County probate case is a parallel state proceeding that would resolve the underlying issue in this dispute. Kraft opposed the motion and argued that the federal court has exclusive jurisdiction over the claims at issue. The court disagreed with Kraft’s jurisdiction arguments. The court observed that under ERISA state courts “have concurrent jurisdiction of actions’ brought by a beneficiary to recover benefits, enforce rights under the plan, or clarify rights to future benefits.” It added, “[t]he Huron County Probate action is one where the Fritz Siblings are acting as beneficiaries to recover benefits under the Kraft Plan. As such, state courts have concurrent jurisdiction over the issue and a Colorado River analysis is proper.” The court then conducted an inquiry to ascertain whether abstention was appropriate under Colorado River. It concluded that it was. The court determined that the interpleader action and Huron County Probate action are parallel proceedings involving the same underlying dispute to resolve the same issues. Since the actions are parallel, the court  proceeded to consider “(1) whether federal or state law provides the basis for decision of the case; (2) whether either court has assumed jurisdiction over any res or property; (3) whether the federal forum is less convenient to the parties; (4) avoidance of piecemeal litigation; and (5) the order in which jurisdiction was obtained.” As to the first factor, the court noted that ERISA does not contain any provisions regulating the problem of beneficiary designations that are forged or the result of undue influence, and that courts look to principles of state law for guidance on these issues. With regard to the second factor, the court stated that neither party indicates any court has taken jurisdiction over the property at issue. The court also found that adjudication of the Kraft plan in federal court would lead to piecemeal concurrent litigation over the same dispute in both state and federal court, which would be inconvenient and problematic. Therefore, the court determined that ongoing federal and state court proceedings are not more convenient here than just the state court proceedings. Finally, the court acknowledged that the state court action was brought before Kraft filed its complaint in federal court. Weighing all of this, the court found that the Colorado River factors favor abstention in this case. However, rather than dismiss the case, the court decided the best course of action would be to stay proceedings pending adjudication of the underlying issues in the Huron County Probate Court. The court therefore granted the siblings’ motion to stay.

Eighth Circuit

Su v. BCBSM, Inc., No. 24-99 (JRT/DLM), 2025 WL 2043663 (D. Minn. Jul. 21, 2025) (Judge John R. Tunheim). Defendant BCBSM, Inc. is a third-party administrator for several self-funded ERISA healthcare plans in Minnesota. BCBSM provides these plans with access to the Blue Cross provider network and its negotiated rates. It then administers employee claims for coverage and decides whether to approve or deny claims. If BCBSM approves a claim, it pays the negotiated amount to the provider from its own funds and then the healthcare plans reimburse it. Former Acting Secretary of Labor Julie A. Su initiated this action against BCBSM alleging that it is in violation of its fiduciary duties by charging the ERISA welfare plans for the tax that Minnesota imposes on providers’ gross revenues. BCBSM moved to dismiss the lawsuit for lack of standing and for failure to state a claim. On August 22, 2024, the court denied the motion to dismiss. It determined that the Secretary’s alleged loss in the amount of $67 million sufficient to assert standing. The court also concluded that the Secretary had plausibly alleged that BCBSM was acting as a functional fiduciary when it passed on the tax liabilities to the plans because it was exercising authority over the plan’s assets. “The Court reasoned that when BCBMS paid a claim, plan funds were automatically encumbered, meaning BCBMS was exercising control over plan assets and thus owed duties as a functional fiduciary.” In response, BCBSM moved for the court to certify its order for immediate appeal. Specifically, it moved to certify the question of whether fiduciary duties should be imposed when a third-party administrator uses its own funds rather than plan money and is subsequently reimbursed. Noting that a “motion for certification must be granted sparingly,” when the movant demonstrates “that the case is an exceptional one in which immediate appeal is warranted,” the court applied heavy scrutiny to BCBSM’s motion. It ultimately determined that while BCBSM posed a controlling question of law, one which may materially advance the ultimately termination of this litigation, it nevertheless failed to demonstrate a substantial ground for difference of opinion. In fact, the court held that the “the only potential basis for a substantial ground for difference of opinion lies in the speculation of the First Circuit.” That speculation came from a line in a decision out of the First Circuit hypothesizing that a third-party administrator could avoid fiduciary liability by adopting a reimbursement scheme similar to BCBSM here. However, as the district court here noted, “the First Circuit was not presented with the question before the Court, and it specifically described its holding as narrow…Ultimately, Massachusetts Laborers’ provides nothing more than pure conjecture about how the First Circuit may decide an issue with which it has yet to be presented.” As such, the court determined that BCBSM failed to demonstrate a substantial ground for difference of opinion on the relevant question. Accordingly, the court denied BCBSM’s motion for immediate interlocutory appeal.

Aldridge v. Regions Bank, No. 24-5603, __ F. 4th __, 2025 WL 1983483 (6th Cir. Jul. 17, 2025) (Before Circuit Judges Gibbons, Larsen, and Murphy)

The bankruptcy of restaurant chain Ruby Tuesday and the loss of pension benefits under two “top hat” pension plans for Ruby Tuesday managers is the genesis of this week’s case of the week. The Sixth Circuit was called upon to answer two questions: (1) whether ERISA preempts the managers’ state law contract-based claims; and (2) whether ERISA Section 502(a)(3), 29 U.S.C. § 1132(a)(3), allows them to seek the value of their lost claims in the form of equitable surcharge. It answered yes to the former question and no to the latter.

Before we get to the court’s reasoning, a little background on “top hat” plans and the facts of the case is in order. As the court pointed out, to qualify for “top hat” status, a plan must cover only a “select group” of managers or highly compensated employees, and it must be “unfunded.” 29 U.S.C. § 1051(2). If the plan meets these requirements, ERISA exempts the plan from a number of its statutory requirements, including its fiduciary duty, funding, and vesting rules.

If a plan uses a device called a “rabbi trust” to put aside money for the plan, it is still considered to be unfunded for purposes of the top hat requirement. Under a rabbi trust, the funds must be used to pay benefits and not for general corporate purposes, but the assets are not the beneficial property of the plan participants, and they may still be used to pay creditors in the event of a bankruptcy. That is the structure that the Ruby Tuesday plans used, and the court held that this structure sufficed to make the plans top hat plans under ERISA. 

Regions Bank was appointed the trustee of the rabbi trusts and tasked with administering the plans under a written agreement with Ruby Tuesday dating back to 1992. The complaint alleges that Regions breached this agreement in several ways prior to the bankruptcy. First, plaintiffs allege that there was a change of control at the company in 2017, which triggered a requirement, which was not met, that the plans be funded up to the present actuarial value of all benefits. Second, plaintiffs allege that the plan was terminated in 2019, which triggered a right for participants to take a lump sum payout of benefits, but Regions failed to inform the participants of this right. Third, plaintiffs allege that Regions breached the trust agreement by acting pursuant to an oral instruction to cease all payments starting in August of 2020, when it was permitted to do so only pursuant to written instructions, which Regions did not receive until September 2020.

Because Regions itself recognized this latter problem, it filed an interpleader action asking a district court to decide who had the right to the funds from August and September. However, after Ruby Tuesday filed a bankruptcy petition in October 2020, and the bankruptcy court ordered that the money in the trust fund be transferred to the bankruptcy estate for the benefit of Ruby Tuesday’s creditors, Regions dismissed its interpleader action. The participants then settled with the bankruptcy estate, receiving some fees and fund assets in exchange for a waiver of their right to appeal the transfer of the funds’ assets to the bankruptcy estate.

Shortly thereafter, some of the participants sued Regions, alleging an ERISA claim for equitable relief in the form of “surcharge” pursuant to Section 502(a)(3), and also asserting state-law claims for breach of fiduciary duty, breach of trust, breach of contract and negligence. The district court “dismissed the state-law claims at the pleading stage on the ground that ERISA preempted them.” It later granted summary judgment to Regions on the ERISA claim, reasoning that plaintiffs’ “request for lost benefits did not qualify as the type of ‘equitable relief’ that the Participants may seek under 29 U.S.C. § 1132(a)(3).”

The Sixth Circuit first addressed Regions’ argument that ERISA’s “complete preemption” doctrine applies to the managers’ state-law claims. The court, however, declined to resolve the issue for three reasons. First, the court pointed out that the doctrine is primarily concerned with federal court jurisdiction, and because the district court had supplemental jurisdiction over the state-law claims, the case raises no jurisdictional issues. Second, the court reasoned that a finding that ERISA expressly preempts the claim would lead to the same result as a finding that ERISA completely preempts the claim because the plaintiffs forfeited any argument that they could restate their state-law claims as ERISA claims. Third, the court reasoned that because “express preemption” under ERISA applies more broadly than “complete preemption,” “judicial-economy concerns thus favor jumping to the broader express-preemption doctrine without first considering the narrow complete preemption issue.”

And so the court did, after taking brief detours to set out the history of Supreme Court decisions addressing ERISA’s express preemption and to explain that ERISA applies to the top hat plans at issue even though many of ERISA’s provisions do not. Looking to the state-law causes of actions asserted by plaintiffs, the court concluded that all four had a “connection with” the plans for purposes of ERISA preemption analysis.

The court found this “true for both procedural and substantive reasons.” As a procedural matter, the court found that plaintiffs’ state-law “claims all seek the same thing: the benefits allegedly due them under their ERISA-covered Plans.” Because ERISA itself contains a provision for seeking benefits, allowing “alternative enforcement methods” under state law would undermine the congressional policy choices embodied in ERISA.

As a substantive matter, the court saw plaintiffs’ state-law claims as an attempt to “impose additional duties on Regions on top of the duties that ERISA imposes.” Doing so “would undercut ERISA’s uniformity goals” by subjecting “plan administrators not just to ERISA’s fiduciary duties but also to the potentially conflicting standards of conduct of all 50 States.” This was true, in the court’s view, even though “ERISA exempts administrators of top-hat plans from its federal fiduciary duties,” because this decision was a deliberate congressional choice to impose a less-intrusive regime on plan sponsors with respect to top hat plans. Thus, as the court saw it, ERISA preempts not just the state-law remedies, but the substantive “right to state-law rules of fiduciary conduct.”

With respect to the plaintiffs’ assertions of contractual rights, the court held that plaintiffs must seek to enforce any such rights through “the vehicle that ERISA provides: a suit to enforce the terms of a plan under § 1132(a)(1)(B).” This was true even though plaintiffs asserted that they sought to enforce not the terms of the plans themselves, but the terms of the rabbi trust. The court reasoned that it “must look through the ‘label’ of the Participants’ state-law claim and consider its substance: a claim against a plan administrator for plan benefits based on its alleged misconduct.” Because “Regions would have had fiduciary duties under ERISA if it had managed ordinary plans rather than top-hat plans,” it “qualifies as ‘a traditional ERISA plan entity,’” meaning that plaintiffs “may bring their claims against the bank only under ERISA’s regime.”           

So, with that, the court turned at last to plaintiffs’ ERISA claim for equitable relief under Section 502(a)(3). Noting that the term “equitable” in ERISA “recalls the time in our history when governments divided their benches into distinct courts of equity and courts of law,” the court stated that “compensatory damages” are the “classic form of legal relief” that courts of law would grant and injunctions are the “classic form of equitable relief” that “equity courts would grant.”

Then, more directly addressing the issue at hand, the court noted that the phrase “equitable relief” in Section 502(a)(3) could convey either a “broad idea or a narrow one” with respect to remedies. “Thankfully,” the court concluded, it did not need to “independently choose between these broad and narrow readings” because “[f]or decades, the Supreme Court has held that Congress chose the narrower view of ‘equitable relief.’” The Sixth Circuit read these decisions as holding that “a request for ‘compensatory damages’ – that is, a request for ‘monetary relief’ measured by the plaintiff’s ‘losses’ – falls on the nonactionable legal side of the divide.” The Sixth Circuit also pointed out that courts apply more “nuanced rules when a party requests money” as a matter of “restitution,” requiring the tracing of “specific” plan funds.

“Before addressing that remedies question” at issue in this case, the court started “with a liability disclaimer: it is ‘far from clear’ that the Participants’ allegations suffice to hold Regions liable under § 1132(a)(3).” This was because plaintiffs “have identified no plan terms that Regions violated” and in fact argued that Regions violated not the plan, but only the trust agreement. But because neither party addressed the predicate question of liability, the court moved on to the remedies issue.

The court “immediately rule[d] out” that plaintiffs were seeking “equitable restitution” because “Regions turned over the Plans’ assets to the bankruptcy court and no longer possesses them.” The court then turned to the actual remedial issue in the case, whether the plaintiffs’ request for “equitable surcharge” is a request for available equitable relief under Section 502(a)(3). The plaintiffs, of course, rested their argument that it does on the Supreme Court decision in Cigna Corp. v. Amara, which the Sixth Circuit read as “suggest[ing] that equity courts could grant a beneficiary “monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty.”

The Sixth Circuit noted that “several courts relied on that decision to conclude that ERISA plan participants may seek this type of monetary award against ERISA fiduciaries under § 1132(a)(3).” “Yet,” the court noted, “the Fourth Circuit has since disagreed” in Rose v. PSA Airlines, Inc. The Sixth Circuit read the Rose decision as holding that “an ‘equitable surcharge’ for a beneficiary’s losses qualifies as a damages remedy that Mertens does not permit ERISA plaintiffs to recover under § 1132(a)(3).”

“For four reasons,” the court “side[d] with the Fourth Circuit.” First, the Sixth Circuit held that the Supreme Court’s discussion of surcharge in Amara was unessential to its holding and thus dicta.

Second, the Sixth Circuit held that the Amara court’s dicta about surcharge conflicted with the holding of the Supreme Court in Mertens v. Hewitt Associates. The Sixth Circuit rejected the Supreme Court’s attempt in Amara to distinguish Mertens on the grounds that the Mertens’ rejection of damages was not directed at a recovery from a breaching fiduciary, holding that this distinction did not make a difference. 

Third, the Sixth Circuit pointed out that its own (pre-Amara) precedent rejected a surcharge remedy against a breaching fiduciary as constituting impermissible legal damages under Mertens. Although the court noted that “some of our unpublished cases have mentioned surcharge in passing as a potential remedy after Amara,” the court nevertheless noted that it should “refuse to follow the Supreme Court’s dicta if we have a ‘substantial reason’ for the refusal – such as ‘subsequent statements’ by the Court ‘undermining’ the ‘rationale’ of its earlier dicta.”

Fourth, the Sixth Circuit found such statements in the Supreme Court’s decision in Montanile v. Bd. of Tr. of Nat’l Elevator Indus. Health Plan, which the court read as “distanc[ing] itself from Amara’s dicta.”

Finally, the court refused to fashion a new cause of action as plaintiffs requested, noting that its general federal common law authority did not give it license to do so.  The court thus affirmed the district court’s decision with respect to both preemption and remedies.

Your ERISA Watch editors see a remedies showdown looming.  As always, we will be there for you when it happens.

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

Breach of Fiduciary Duty

Seventh Circuit

Bangalore v. Froedtert Health, Inc., No. 20-cv-893-pp, 2025 WL 1927534 (E.D. Wis. Jul. 14, 2025) (Judge Pamela Pepper). Plaintiff Nitish Bangalore participated in defendant Froedtert Health, Inc.’s 403(b) retirement plan. In this putative class action Mr. Bangalore alleges that the fiduciaries of the plan have violated their duties of prudence and monitoring by incurring excessive recordkeeping and administrative fees and by offering funds in the plan that were “needlessly expensive.” The pleading standard for these types of ERISA fee cases was in flux in the Seventh Circuit after the Supreme Court weighed in in Hughes v. Northwestern University, 595 U.S. 170 (2022). However, in subsequent decisions, including in its own decision in the Hughes case, the Seventh Circuit fleshed out what types of allegations in these cases are sufficient for a district court to infer fiduciary misconduct. Now that the contours of what a plaintiff must plead have been more concretely defined in the circuit, this district court was ready to weigh in on defendants’ motion to dismiss plaintiff’s second amended complaint. First, the court declined to dismiss the claims of imprudence and monitoring related to allegations of excessive recordkeeping fees. The court found that at this stage of the litigation the plans plaintiff chose as comparators were sufficiently similar to the “mega” plan at issue. “The comparator plans listed in the second amended complaint are sufficiently comparable in terms of both participant size and assets under management, especially given the plaintiff’s allegations in the second amended complaint that in 2021, the defendants’ plan was larger than 99.91% of all defined contribution plans in the United States. Taking that allegation as true (as the court must at the pleadings stage), it would be relatively difficult to find plans even closer in size and assets under management to the defendants’ plan. The complaint sufficiently identifies comparable plans with lower recordkeeping fees than the defendants’ plan.” Moreover, the court was unwilling to pull apart plaintiff’s calculation of the recordkeeping fees, stating that it would not be appropriate to do so at the motion to dismiss stage as it “would equate to the court considering the truth of the allegations in the second amended complaint.” Instead, accepting the allegations and calculations as true and accurate, the court concluded that it could infer imprudence based on recordkeeping fees that were between 2.3 and 4.4 times higher than every comparator fund. This was especially true, the court noted, because plaintiff alleges that recordkeeping services are fungible and all recordkeepers offer services of a materially identical level and quality. Thus, the court was satisfied that plaintiff sufficiently pled his claim that defendants paid higher fees for the same services. The court therefore denied the motion to dismiss the imprudence claim, and the derivative failure to monitor claim related to the excessive recordkeeping fees. The claims related to the excessive investment management fees was a different story, however. With regard to the fund-related claims, the court agreed with defendants that plaintiff failed to identify more than one lower-cost fund to demonstrate that the fiduciaries chose excessively expensive investment funds. Likewise, the court held that the complaint failed to plead facts that the comparator funds had similar investment strategies, management styles, or risk profiles as the challenged funds to allow it to determine that they truly were comparable. Without this level of detail, the court found that the complaint did not have enough to state a violation of the duty of prudence based on excessive investment management fees, and therefore granted the motion to dismiss both the underlying fiduciary breach claim and the derivative failure to monitor claims related to the challenged funds. Finally, defendants moved to dismiss plaintiff’s request for injunctive relief, arguing that he faces no risk of ongoing harm as a former employee. Mr. Bangalore stated at oral argument that he was not pursuing injunctive relief because he is a past participant. As a result, the court granted the motion to dismiss the request for injunctive relief from the second amended complaint. For these reasons, the court granted in part and denied in part defendants’ motion to dismiss. To the extent claims were dismissed, the court stated that its dismissal was with prejudice.

Eighth Circuit

Owens v. Life Ins. Co. of N. Am., No. 4:24-CV-792 HEA, 2025 WL 1952487 (E.D. Mo. Jul. 16, 2025) (Judge Henry Edward Autrey). Plaintiff Audrey Owens became an employee of the defense contractor Leidos, Inc. in May of 2018 when Leidos took over operations of another defense contractor that employed her. Prior to the Leidos takeover, Ms. Owens was enrolled in a welfare plan that provided long-term disability benefits. Ms. Owens alleges that as an employee of Leidos, she was a vested participant in a group insurance policy issued by Cigna that provided long-term disability benefits. About a month after Ms. Owens became an employee of Leidos she became disabled due to gastrointestinal issues, degenerative neck and spine conditions, and issues with her gallbladder. On June 27, 2018, she underwent surgery to remove her gallbladder. Despite the surgical intervention her symptoms never abated, and she was unable to continue working. Accordingly, Ms. Owens made a claim for benefits under the long-term disability benefit plan. On February 1, 2019, Cigna denied the claim. The basis for the denial was that Ms. Owens was not covered under the plan at the time she became disabled. In this ERISA action Ms. Owens is suing the Employee Benefit Committee of Leidos alleging that it breached its fiduciary duties to her and failed to provide plan documents upon written request. Ms. Owens seeks unpaid past benefits, reinstatement under the long-term disability plan, an order requiring Cigna to begin future long-term disability benefits, statutory penalties under § 1332(c), and attorneys’ fees and costs. Defendant Benefits Committee moved to dismiss the claims asserted against it. It argued that the fiduciary breach claim is untimely, and that all factual allegations in the amended complaint fail as a matter of law. The court denied the motion to dismiss in this decision. As an initial matter, the court found that it was not clear from the record when the last day the Benefits Committee could have cured its alleged breach and enrolled Ms. Owens in the Plan. The court stated, “Benefits Committee is raising the defense of timeliness, and it has not shown, based on the allegations in Amended Complaint, that the latest date on which it could have cured the alleged breach or violation was prior to June 6, 2018. Therefore, the Court finds Benefits Committee has not established that Plaintiff’s claim for breach of fiduciary duty is untimely, and the motion to dismiss is denied as to this issue.” The court then turned to whether the complaint states a claim for breach of fiduciary duty against the Benefits Committee. Ms. Owens alleges that the Committee violated its duties under ERISA by failing to give her proper and adequate information about enrolling in the plan. Alternatively, she alleges that the plan was a continuation of the prior plan in which she was enrolled, and that the long-term disability plan grandfathered in claims under the prior benefit plan. The Benefits Committee argued that, contrary to Ms. Owens’ allegations, it provided her with all of the required information regarding the plan in accordance with the governing regulations. In support of this assertion, it attached email correspondence it allegedly sent to Ms. Owens to its motion to dismiss. The court held that these emails were not embraced by the pleadings, and instead were provided “in opposition to the pleadings.” Because the emails were offered as a way to discredit and refute Ms. Owens’ allegations, the court concluded that they could not be considered on a Rule 12(b)(6) motion to dismiss. Moreover, the court was unwilling to convert the motion to dismiss as one for summary judgment under Rule 56, as there are open questions about whether the emails were sent to Ms. Owens’ personal email address or only to her work address and work computer, which she did not have access to while on medical leave. Moreover, the emails contained links to the relevant information, and the court could not say whether these links worked, and even assuming they did, whether they could only be accessed by employees at work through Leidos’ secure network. Thus, the court “demur[ed] considering the email exhibits without a more fully developed record following discovery” and instead decided the motion to dismiss based on the allegations in the complaint itself. Accepting Ms. Owens’ allegations, the court found that she sufficiently stated a fiduciary breach claim against the Committee, and therefore denied the motion to dismiss the claim. The court further denied the motion to dismiss the claim for penalties for failure to provide plan documents, as defendant’s arguments rested on the court finding that Ms. Owens was not a plan participant with a colorable claim for benefits, which the court would not do at this stage of the litigation. The Benefits Committee’s motion to dismiss was therefore denied in whole.

Ninth Circuit

Smith v. Recreational Equipment Inc., No. 3:24-cv-06032-TMC, 2025 WL 1953042 (W.D. Wash. Jul. 16, 2025) (Judge Tiffany M. Cartwright). In its defined contribution retirement plan defendant Recreational Equipment Inc. (“REI”) has a policy of charging recordkeeping and administrative fees only to participant accounts with balances of at least $5,000. Plaintiffs Macy Smith and Sally Johnson are two such participants of the plan who are challenging this policy in this putative class action ERISA lawsuit. They contend that REI, its Board of Directors, and the Retirement Plan Committee are breaching their duties of loyalty, prudence, and monitoring under ERISA by imposing fees in this way. Defendants moved to dismiss. They argued that the settlor doctrine bars plaintiffs’ claims because the $5,000 threshold is written into the terms of the retirement plan. Additionally, defendants contend that even if the claims are not barred by the settlor doctrine, the complaint nevertheless fails to plausibly allege a breach of fiduciary duty. The court took up the issue of the settlor doctrine first. The court agreed with defendants that one section of the plan, “read in isolation,” does impose an unambiguous and mandatory requirement that participant accounts with at least $5,000 must be charged recordkeeping and administrative fees. However, a different section of the plan allows the Plan Committee to not only exempt certain accounts from per capita charges based on a threshold set by the Committee that is greater or less than $5,000, but also to set separate thresholds for different types of per capita charges. If this second section didn’t exist, the court expressed that it would likely conclude that the plan’s allocation of expenses is a plan design decision encompassed by the settlor doctrine. But because it does, the court held that the plan does not forbid the Committee from setting the balance threshold for fees to whatever amount it choses, which amounts to discretionary authority, triggering fiduciary obligations. Accordingly, the court determined that the settlor doctrine does not preclude plaintiffs’ claims. In any case, the court’s analysis did not stop with this holding. Rather, the court assessed the legal theory undergirding plaintiffs’ allegations and found it wanting. In essence, plaintiffs take issue with the fact that participants with less plan assets are being subsidized by participants with more money in their accounts. But the court concluded there is nothing inherently wrong with this practice. To the contrary, the Department of Labor has blessed the pro rata method of allocating expenses, and essentially what REI is doing here is no different. The court agreed with defendants that there is no fiduciary duty “to ensure participants pay a proportionately equal share of plan expenses.” Plaintiffs are not alleging that the recordkeeping and administrative fees are overall unreasonable, instead they claim that they are unreasonably distributed. The court determined that “this legal theory ignores the obvious fact that every method of allocating RKA fees could be described as resulting in some plan participants subsidizing the costs of administration for others. In the pro rata method, participants with higher balances could be said to subsidize administration fees for those with lower balances. In the universal per capita method – which Plaintiffs seem to advocate in their complaint – participants with lower balances could be said to subsidize those with higher balances, since a participant with only $500 in their account would pay the same fee (but a far greater portion of their assets) as a participant with $500,000. There is nothing unique or even avoidable about the result of Defendants’ hybrid method, where RKA fees are assessed per capita, but only for accounts with a balance above a certain threshold.” The court added that assessing fees to participants with larger balances is within the range of reasonable judgments a fiduciary can make, and the decision to do so was not self-serving or disloyal. Accordingly, the court granted the motion to dismiss the claims of imprudence and disloyalty, as well as the derivative failure to monitor claim. As a final note, the court agreed with defendants that plaintiffs cannot sue under Section 502(a)(2) of ERISA because they are seeking to recover individual losses, rather than losses to the plan. It stated, “the relief sought is one based not on a loss to the whole Plan or any Plan assets, but to individual participants of the Plan. This is particularly evident because if the Court granted the relief Plaintiffs seek, other Plan participants with account balances less than $5,000 be required to pay higher annual fees. Since Plaintiffs seek only ‘a remedy for individual injuries distinct from plan injuries,’ their claims under Section 1132(a)(2) must also be dismissed on this basis.” Finally, the court stipulated that its dismissal was with prejudice, as it found that plaintiffs could not cure these shortcomings in the complaint through any amendment.

Disability Benefit Claims

Ninth Circuit

O’Connor v. Life Ins. Co. of N. Am., No. 24-3928, __ F. App’x __, 2025 WL 1937085 (9th Cir. Jul. 15, 2025) (Before Circuit Judges Thomas and De Alba and District Judge Rakoff). Plaintiff-appellant Francesca O’Connor filed this action to challenge a denial of benefits under a long-term disability policy administered by Life Insurance Company of North America (“LINA”). At issue was whether the operative policy’s pre-existing conditions limitation was valid and enforceable under Delaware law (the policy was issued in Delaware and subject to Delaware law). In a technical and short decision, the Ninth Circuit concluded that it was, and thus Ms. O’Connor cannot prevail on her claim. The Ninth Circuit wrote, “Section 3517(b) of the Delaware Insurance Code requires pre-existing condition limitations to ‘only apply to a disease or physical condition for which medical advice or treatment was received by the person during the 12 months prior to the effective date’ of coverage. O’Connor’s argument that the [pre-existing conditions limitation] is ‘wholly unenforceable’ under the doctrine of reasonable expectations is without merit because the [limitation] is ‘clear, plain, and conspicuous.’” Though the Ninth Circuit recognized that the pre-existing conditions limitation does conflict with Delaware law insofar as it purports to exclude conditions “for which a reasonable person would have consulted a Physician,” it nevertheless noted that this unenforceable clause within the limitation was not the basis on which LINA rejected Ms. O’Connor’s claim for benefits. Therefore, the Ninth Circuit held that the district court properly concluded that the pre-existing conditions limitation, as applied to Ms. O’Connor’s claim for benefits, was enforceable, and that this dispositive ruling foreclosed her claim for benefits. On this basis, the Ninth Circuit affirmed.

Discovery

Eighth Circuit

Jones v. Zander Grp. Holdings, Inc., No. 8:24CV428, 2025 WL 1918834 (D. Neb. Jul. 11, 2025) (Judge Joseph F. Bataillon). Plaintiff William “Chip” Jones, II filed this putative class action in the Middle District of Tennessee alleging that his former employer and some related entities have violated ERISA in connection with their actions rolling over funds in his employee stock ownership plan account into a 401(k) account after his employment with defendants ended. During discovery defendants issued document and deposition subpoenas to attorneys Mr. Jones consulted with at a law firm in Omaha, Nebraska prior to, and during, the rollover of the funds. Though the case is taking place in Tennessee, Mr. Jones filed a motion to quash the subpoenas directed at the lawyers and at their law firm in the District of Nebraska. On May 27, 2025, magistrate judge Michael D. Nelson granted Mr. Jones’ motion. (Your ERISA Watch reported on the decision in our June 4, 2025 newsletter). Defendants responded to the decision by filing objections to the magistrate judge’s order. The court overruled the objections in this brief decision. As an initial matter, the court noted that magistrate judges are afforded broad discretion in the resolution of non-dispositive discovery disputes, such that a district court may set aside a part of the magistrate judge’s order only if it finds it “clearly erroneous or contrary to law.” Having reviewed the matter, the court could not find anything in Judge Nelson’s order clearly erroneous or contrary to law. To the contrary, the court determined that he had correctly determined that the information defendants were seeking was both irrelevant to the underlying lawsuit, and protected by attorney-client and work-product privileges. Accordingly, the court declined to overturn any aspect of the magistrate’s order and affirmed its decision to grant Mr. Jones’ motion to quash the subpoenas.

Life Insurance & AD&D Benefit Claims

Fifth Circuit

The Prudential Ins. Co. of Am. v. Richardson, No. 4:24-CV-04979, 2025 WL 1918745 (S.D. Tex. Jul. 10, 2025) (Judge Kenneth M. Hoyt). Prudential Insurance Company of America filed this lawsuit in interpleader against defendants Tatjana Richardson and Kinberly Richardson-Whitfield seeking court involvement in the dispute over the proper beneficiary of decedent Russell W. Richardson. Since filing this action, Prudential has deposited the proceeds of Mr. Richardson’s life insurance benefits with the registry of the court and has been dismissed from this action. Plaintiff Kimberly Richardson-Whitfield moved for judgment under Rule 12(c) on Tatjana Richardson’s claim for the insurance proceeds. Ms. Richardson-Whitfield is Mr. Richardson’s ex-wife. Ms. Richardson is Mr. Richardson’s surviving spouse. The court granted Ms. Richardson-Whitfield’s motion for judgment on the pleadings in this order. The court held that the undisputed evidence shows that Kimberly Richardson-Whitfield remained the named beneficiary of the life insurance policy even after the couple’s divorce, and that under federal law “control of beneficiary designations remains in the hands of the insured who has the sole authority to change the beneficiary designation.” Thus, despite the terms of the former couple’s divorce decree stating that the husband would retain entitlement to all of his own employment benefits, the court concluded that the beneficiary designation nevertheless controls. Accordingly, the court agreed with Ms. Richardson-Whitfield that there is no dispute she is entitled to the funds as the designated beneficiary of her ex-husband’s policy, and is thus entitled to judgment in her favor.

Medical Benefit Claims

Sixth Circuit

Gipson v. Med. Mutual of Ohio, No. 1:24-cv-00103, 2025 WL 1921431 (M.D. Tenn. Jul. 11, 2025) (Judge William L. Campbell, Jr.). Plaintiffs in this action were participants in insurance plans issued by defendant Reserve National. During the time period at issue, Reserve National went from being a subsidiary of defendant United Insurance Company of America (which in turn was a subsidiary of defendant Kemper Corporation), to being acquired by defendant Medical Mutual. The healthcare plans plaintiffs were enrolled in included a portability provision that allowed the insureds to port their coverage so they could continue receiving benefits despite a change in employment or cancellation of the underlying group policy. The plans also included supplemental coverage for cancer treatment. “Plaintiffs had each secured continuing coverage through the portability provision and were receiving benefits for cancer treatment when, in December 2022, they were notified that their ‘Cancer coverage has terminated effective 2.28.2023.’” The cancellation letters were sent from Kemper Corporation. In their complaint plaintiffs allege that as part of the Medical Mutual acquisition defendants Kemper, United Insurance, and Medical Mutual collectively executed a plan to terminate substantially all of the ported group supplemental coverage Reserve National had on its books in order to reduce the liabilities acquired by Medical Mutual and to make the sale of Reserve National more attractive. After their insurance was cancelled, plaintiffs filed this ERISA lawsuit challenging defendants’ actions, including Medical Mutual’s refusal to pay for their continuing cancer treatments. Plaintiffs bring claims for declaratory and injunctive relief and for breach of fiduciary duty. Kemper and United Insurance moved to dismiss all of the claims against them. They argued that the policy termination took place after United sold Reserve National to Medical Mutual meaning that at the time of the allegedly improper conduct neither of them had a relationship to plaintiffs and that they cannot be held liable for the actions of Reserve National or Medical Mutual that took place following the sale. The court denied the motion to dismiss in this decision holding that at this stage of the litigation, “Plaintiffs have adequately alleged that Kemper and United Insurance were involved in the decision to terminate the policies at issue and were involved in the administration of claims before and after the termination such that dismissal of claims against them is not appropriate at this juncture.”

Ninth Circuit

Solis v. T-Mobile US, Inc., No. 24-2412, __ F. App’x __, 2025 WL 1937089 (9th Cir. Jul. 15, 2025) (Before Circuit Judges Murguia, Nelson, and Sung). Two participants in the T-Mobile healthcare plan, Jannet Solis and Michael Ortega, challenged denials of their benefit claims by United Healthcare, the claims administrator, for out-of-network hiatal hernia repair and gastric sleeve surgery. On March 14, 2024, the district court entered an order finding United’s explanations for the denials deficient under ERISA, but nevertheless determined that United did not abuse its discretion in denying the claims and so entered judgment in their favor. Plaintiffs appealed that order. In this decision the Ninth Circuit overturned the district court’s decision and remanded to it to either retry the case after proper augmentation of the administrative record, or alternatively to remand the case back to United to reevaluate the merits of the healthcare claims. Although the Ninth Circuit concluded that the district court correctly identified the standard of review, it found that the lower court “committed legal error by not allowing for augmentation of the administrative record despite finding United’s initial claims denial explanations deficient under ERISA.” The court of appeals agreed with the district court that United’s unilluminating denials were insufficient under ERISA as they did not cite any specific plan provision, provide any specific explanation, or permit plaintiffs to adequately respond during the administrative claims process in an effort to perfect their claims. In fact, the Ninth Circuit pointed out that the district court itself needed post-trial briefing from United to understand the basis for the denials. Accordingly, the court of appeals agreed with appellants that they did not receive adequate notice of United’s denial explanations. The court of appeals determined that the district court had “erroneously concluded that United’s procedural violations amounted to harmless error that did not affect the administrative review.” As a result, the Ninth Circuit found that the district court improperly denied plaintiffs’ request to submit supplemental evidence after bench trial and that the declarations they sought to add “contained direct responses to United’s claims denial explanations advanced during litigation.” These declarations, it went on, are the type of extra-record material that the Ninth Circuit requires district courts consider in order to remedy procedural irregularities and to essentially recreate what the administrative record would have been if United had not violated ERISA. Accordingly, the Ninth Circuit vacated the district court’s judgment in favor of defendants and remanded to it for further factfinding and review.

Pleading Issues & Procedure

Third Circuit

Cockerill v. Corteva, Inc., No. 21-3966, 2025 WL 1921645 (E.D. Pa. Jul. 11, 2025) (Judge Michael M. Baylson). This class action litigation was filed by DuPont employees and retirees in 2021. Plaintiffs alleged that when their employer split into three companies – DuPont de Nemours & Company, Dow Inc., and Corteva, Inc. – they were misled about early retirement benefits and improperly denied optional retirement benefits. Although plaintiffs were employees of the old DuPont and continued to work at the new company with the DuPont name, they lost their ability to obtain these retirement benefits because the pension plan had been moved into the new Corteva entity. In 2024, the court held a six-day bench trial, and on December 18, 2024 issued a ruling finding against defendants on Counts II, IV, and VI, the majority of plaintiffs’ claims. (Your ERISA Watch reported on this decision in our first newsletter of the year.) The court held that defendants’ interpretation of the plan regarding optional retirement benefits for the over-50 class members was arbitrary and capricious, that they breached their fiduciary duties based on affirmatively misleading statements about how the spin-off would affect the pension benefits, and that defendants violated ERISA’s anti-cutback provisions because their arbitrary and capricious interpretation had the effect of amending the plan to cut back optional retirement class members’ benefits. Then, in this year, the court conducted a further bench trial on the issue of remedies and in May awarded exclusively equitable relief and entered final judgment in favor of plaintiffs. On June 25, 2025, defendants filed a notice of appeal and a motion to stay enforcement of the court’s judgment pending resolution of the appeal. Plaintiffs opposed, arguing that defendants could not demonstrate likelihood of success on the merits or irreparable harm such that the “rarely granted” and “extraordinary remedy” was warranted here. The court agreed with plaintiffs, “particularly since the judgment is equitable in nature.” The court took the majority of its time discussing defendants’ likelihood of success on the merits. It rejected defendants’ arguments about standing, detrimental reliance, alleged errors in its fiduciary breach analysis, an argument that knowledge is necessary for liability on the fiduciary breach claim, that the court applied the wrong standard of review, and that plaintiffs failed to prove the challenged conduct caused them to forgo applying for benefits. In sum, the court concluded that “Defendants have not demonstrated a sufficient likelihood of success on appeal as to any of the issues raised.” It then held that defendants could not demonstrate they would suffer irreparable harm if the judgment is enforced during the appeal. Rather, it found defendants will only suffer “a purely economic injury,” which in the Third Circuit is insufficient to satisfy the irreparable injury requirement unless it is so great that it threatens the existence of their business. Such was not the case here, and defendants did not argue it was. “Defendants make no attempt to argue that paying these benefits threatens the solvency of the Plan or the viability of their multi-billion-dollar entities.” Accordingly, the court agreed with plaintiffs that defendants could not meet the Third Circuit’s heavy threshold to award a stay. However, instead of denying the motion outright, the court granted a stay for ten days in order to provide defendants with an opportunity to seek immediate relief in the court of appeal. Defendants chose to do so. The court of appeals speedily denied defendants’ motion on July 17, 2025. Accordingly, defendants will not be able to halt the judgment against them while they challenge the court’s verdict on appeal. (Disclosure: Kantor & Kantor attorneys represent the plaintiffs in this action.)

Provider Claims

Second Circuit

Rowe Plastic Surgery of N.J., LLC v. Aetna Life Ins. Co., No. 23-CV-3632-SJB-LKE, 2025 WL 1940325 (E.D.N.Y. Jul. 15, 2025) (Judge Sanket J. Bulsara). Plaintiffs Rowe Plastic Surgery of New Jersey, LLC and East Coast Plastic Surgery, P.C. filed this action against Aetna Life Insurance Company challenging the reimbursement rate the insurer paid for surgery the plaintiffs performed on a patient. If this case sounds like déjà vu all over again to any readers, that’s because it is one of more than 30 similar cases filed by the same plaintiffs against health insurance companies. In fact, last week Your ERISA Watch reported on a nearly identical lawsuit, and indeed a nearly identical decision from the court. The two lawsuits, both brought by Rowe and East Coast Plastic Surgery against Aetna, were stayed pending resolution of plaintiffs’ appeals of dismissals of two of their actions before the Second Circuit. In both cases, the Second Circuit affirmed the dismissals and agreed with the district courts that plaintiffs failed to state their claims because the state law causes of action were either preempted by ERISA, insufficient under state law, or both. Now that those appeals have been decided, plaintiffs moved for leave to amend their complaint. Like the decision from last week, the court denied the motion to amend and ordered the parties to proceed to summary judgment. The court wrote that, “[t]his case, and the approximately 30 other similar lawsuits, are based on the same theory: phone calls confirmed that the insurance company would pay at least 80% (in some instances 90%) of a reasonable and customary fee, and the conversations created enforceable contracts that were breached.” That assumption, the court said, is flawed and misunderstands preemption under ERISA, as well as state contract law. As in plaintiffs’ other cases, the court concluded that the state law claims in both the original complaint and in the proposed amended complaint are both preempted by ERISA and fail as a matter of state law. Regardless of how plaintiffs frame their allegations or what language they use, the court was clear that the only reason the providers called Aetna in the first place was to ascertain that payments would be made to them under the plan. At its core, the court determined that this lawsuit “[n]o matter how much this is dressed up in state law garb and additional facts, the claims grow out of what was (not) paid under an ERISA plan.” Thus, the court concluded that the proposed amended complaint still presupposes the existence of the relationship between the insurer and the insured through an ERISA healthcare plan, and accordingly, the state law claims are preempted by the federal statute. Putting aside the issue of preemption, however, the court also found flaws with each of the state law claims because the oral conversations at issue are insufficient to be considered a promise to pay on which the providers reasonably relied for their contract or contract-related claims. For these reasons, the court would not allow the providers to amend their complaint and instead ordered the case to proceed to summary judgment.

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.