Waldron v. Unum Life Ins. Co. of Am., No. 3:24-CV-05193-TMC, 2025 WL 949028 (W.D. Wash. Mar. 28, 2025) (Judge Tiffany M. Cartwright)

This week Your ERISA Watch is engaging in a bit of shameless self-promotion as we highlight this Kantor & Kantor long-term disability benefit win. The case is worth emphasizing regardless of our involvement, however, as it addresses what promises to be a contentious issue for many years to come – how do we assess disability benefit claims made by insureds suffering from COVID-related illnesses?

The plaintiff in the case was Ryan Waldron, who managed a production line for James Hardie Industries, a building materials company. In May of 2021, after receiving a vaccine for COVID-19, he began suffering from headaches, chronic fatigue, brain fog, dizziness, sleep issues, and double vision. Waldron’s primary care physician referred him to numerous specialists, who were largely unable to help him, and eventually he consulted with the Mayo Clinic.

The Mayo Clinic concluded that Waldron’s “constellation of symptoms overlaps significantly with post-acute COVID syndrome (PACS),” but because he had not experienced a COVID infection, “he may have experienced an inappropriate immune response to the mRNA vaccine which is mimicking PACS.” (Complicating things, Waldron later tested positive for COVID antibodies.) The Mayo Clinic noted that Waldron had a “history of prior allergies requiring desensitization,” which suggested that he might have “a highly reactive immune system.”

Waldron continued treating with his primary care physician and other specialists, but his symptoms did not improve and his attempts to return to work failed, as he lacked the stamina to perform his job duties.

Waldron submitted claims for short-term and long-term disability benefits to the insurer of his employer’s disability benefit plan, defendant Unum Life Insurance Company of America. Unum approved Waldron’s short-term claim and paid it in full. However, when the short-term benefits ended, Unum declined to pay long-term benefits. Unum contended that Waldron had no formal diagnosis, many of his tests were normal, and his treatment intensity was “mild.”

Waldron appealed and submitted, among other records, EEG findings and the results of a neuropsychological examination, both of which supported his cognition issues. He also indicated he was “open to seeing any doctor or performing any test that Unum recommended to substantiate his disability claim.”

Unum, however, was unimpressed. It stated that there was no diagnosis to explain Waldron’s symptoms, did not order an independent medical examination, and denied his appeal. Unum explained that Waldron had not proven that he was disabled throughout the plan’s 180-day “elimination period,” i.e., the waiting period that begins after the date of disability. Waldron was left with no option other than to file suit, and the case proceeded to cross-motions for judgment under Federal Rule of Civil Procedure 52.

The court, employing de novo review, first addressed Waldron’s self-reported statements about the severity of his symptoms. The court observed that “many courts have held that it is unreasonable to reject a claimant’s self-reported evidence when the plan administrator has no basis for believing the reports are unreliable[.]” The court further recognized that such statements can cause problems for insurers, acknowledging the “challenges that ERISA plan administrators face in assessing employees who are disabled by a mysterious array of symptoms.” However, “the absence of objective test results and observable symptoms present equally frustrating challenges for employees who actually suffer from debilitating [similar] symptoms.”

For the court, this presented “a complicated dynamic” that it resolved by diving into Waldron’s medical records. The court noted that “doctors have run a multitude of tests on Waldron” which “have done little more than ‘rule out other diseases’ and have failed to establish the presence or absence of any one condition.”

However, the court also stated that “every provider that Waldron visited affirmed his symptoms. Though none could provide a clear diagnosis, many indicated that it seemed like an inappropriate immune response to the vaccine, which mirrored long-COVID, CFS, or Lyme Disease, and rendered him unable to work.” Furthermore, “Many of these providers explained that until the symptoms resolved, Waldron could not return to work full time… None concluded that the symptoms were fake, or that Waldron was malingering.” The court also cited the results of Waldron’s neuropsychological exam, which showed issues with processing speed and verbal fluency, and did not show signs of malingering or psychiatric illness.

The only exception was a report by one of Waldron’s doctors in which the doctor opined that Waldron was not disabled after a certain date. However, the court found that this statement was an outlier, especially since that doctor’s own records “indicate that Waldron was and would be disabled for an indeterminate amount of time[.]”

Given these facts, and the absence of an objective evidence requirement in the language of the benefit plan, the court “conclude[d] that it may consider subjective evidence in determining whether Waldron has met his burden to show that he could not work both during the elimination period and after under the policy.” Furthermore, Waldron’s physicians’ “subjective judgments are especially important in this case given the subjective nature of [his condition], the fact that its symptoms are sporadical inasmuch as they fluctuate in frequency and severity, and the fact that it can exist even though physical examinations may be within normal limits.”

The court next considered how it should evaluate medical assessments made after the 180-day elimination period. Unum contended that such assessments were irrelevant and that the court should focus solely on treatment that took place during the elimination period. The court disagreed, noting that “medical reports are inevitably rendered retrospectively and should not be disregarded solely on that basis,” and concluding that there is “no legal or factual reason to ignore” such evidence.

The court also addressed Unum’s argument that “Waldron has not met his burden of proving that he could not work on a part-time basis.” The court refused to even consider this contention because Unum was making it for the first time during litigation: “[N]owhere in the determinations process did Unum offer such reasoning to Waldron… The Court is barred from considering Unum’s new reasoning.”

Having discussed these preliminary issues, the court finally addressed the central merits of the case: was Waldron disabled and entitled to benefits? The court began with the nature of Waldron’s job. Waldron contended that his job was strenuous, and that he had to be “at the plant” for 60-70 hours per week and walk for 80% of the day. Unum disagreed, arguing that the plan did not insure Waldron’s inability to perform a specific job, but only “a similar job in the national economy,” which involved lighter duties.

Ultimately, this debate was moot because the court ruled that Waldron had “offered sufficient evidence to show that he could not perform even these lighter occupational demands.” The court found that Waldron “has provided ample evidence that he could not perform even minimal job tasks… If Waldron could not move for more than forty-five minutes per day without suffering a flare-up…suffered daily headaches…and could not use a computer…then Waldron could not be expected to perform his job even part-time during the elimination period.”

The court emphasized that this was the correct result even if Waldron had good days: “Courts have repeatedly held that patients who suffer chronic conditions may improve, but given the temporary nature of those good days, these swings do not materially alter their ability to work.” The key was whether he was able to reach a consistent baseline, which he could not: “Waldron was never able to sustain a return to work, as it caused significant flares that left him bedridden for weeks.”

The court also dismissed Unum’s argument that Waldron’s symptoms were subjective, as it found both Waldron and his physicians credible. Specifically, the court noted that no objective testing existed that could confirm several of Waldron’s symptoms, such as his vertigo and nausea, and thus he had no other way to prove them. Furthermore, “none of Waldron’s providers have ever even hinted that they thought Waldron was fabricating his symptoms,” and Waldron’s neuropsychological exam “found there was ‘no evidence of severe psychiatric illness, conversion disorder, or malingering.’”

In short, “A multitude of providers saw Waldron, observed his symptoms, and recounted them without question. They saw in real time the symptoms he described. And none contested it.” The court added that if Unum had thought Waldron was malingering, it could have conducted its own medical examination to confirm whether that was the case, but it chose not to do so.

As a result, the court ruled that Waldron had met his burden of demonstrating that he satisfied the benefit plan’s definition of disability. It granted his motion for judgment, denied Unum’s, ordered the parties to meet and confer regarding the amount of benefits owed, and allowed Waldron to file a motion for attorney’s fees.

(Plaintiff was represented by Brent Dorian Brehm and Glenn R. Kantor of Kantor & Kantor LLP, and Stacy Monahan Tucker of Monahan Tucker Law.)

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

Arbitration

Third Circuit

Barrett v. Konica Minolta Exec. Severance Plan, No. 24-cv-05067 (JXN)(JSA), 2025 WL 965707 (D.N.J. Mar. 31, 2025) (Judge Julien Xavier Neals). The former Corporate Vice President of Konica Minolta Business Solutions U.S.A., Inc., plaintiff John Barrett, sued his former employer in state court in New Jersey alleging that he was wrongly denied severance benefits that should have been paid to him under the Konica Minolta Executive Severance Plan. Konica removed the action to federal court because there is no dispute that the severance plan is governed by ERISA. Relying on the severance plan’s arbitration provision, Konica moved to stay the action and compel arbitration pursuant to the Federal Arbitration Act. Mr. Barrett opposed Konica’s motion and filed his own motion to remand the action back to state court. In addition, Mr. Barrett moved for attorneys’ fees and costs. At issue were two subsections of the severance plan. The first section mandates “any dispute, controversy or claim arising out of or related to the Plan shall be submitted to and decided by binding arbitration.” A later section of the plan requires any action or proceeding to be brought only in a state or federal court located in the state of New Jersey and submits the parties to the exclusive jurisdiction of such courts. Mr. Barrett argued that these two sections are in conflict and maintained that they could not be reconciled. The court disagreed with Mr. Barrett. It concluded there is a logical way to reconcile these two contradictory statements in the severance plan. It stated that Mr. Barrett conveniently left out an important detail about the second section at issue – it expressly provides that it is subject to the arbitration provision. Not only that, but the two sections serve distinct purposes. The first is the arbitration provision requiring arbitration of “claims arising out of the Plan,” while the second is a venue provision concerning the enforcement of plan provisions, including the arbitration provision itself. As this was Mr. Barrett’s sole argument, the court concluded that the arbitration provision is valid and enforceable and governs the claims in his complaint. As a result, the court granted Konica’s motion to compel arbitration and stay proceedings pending arbitration. The court then swiftly denied Mr. Barrett’s motions for remand and attorneys’ fees. Although Mr. Barrett is correct that Section 502(a)(1)(B) of ERISA provides for concurrent jurisdiction, the court said there is clear and consistent precedent that the existence of concurrent jurisdiction does not warrant remand of ERISA actions that have been properly removed to federal court.

Breach of Fiduciary Duty

Fourth Circuit

Konya v. Lockheed Martin Corp., No. 24-750-BAH, 2025 WL 962066 (D. Md. Mar. 28, 2025) (Judge Brendan A. Hurson). In 2021 and 2022 defense contractor and aerospace company Lockheed Martin offloaded over $9 billion in pension obligations due under its two pension plans, the Lockheed Martin Salaried Employee Retirement Program and the Lockheed Martin Aerospace Hourly Pension Plan, by transferring its pension plan assets and liabilities to the annuity provider Athene Annuity & Life Assurance Company of New York (“Athene”). Thirty-one thousand participants of the plans were affected by the transactions. They lost their status as participants in the ERISA-governed plans, lost the financial protections of the Pension Benefit Guaranty Corporation, and were suddenly exposed to new risks. Athene is “a private equity controlled insurance company with a highly risky offshore structure.” Lawmakers and industry experts have voiced concerns that Athene shows hallmarks of the Executive Life Insurance Company, the notorious insurance company and pension annuity provider that collapsed in the early 1990s. Lockheed Martin’s pension risk transfer buyouts with Athene gave rise to this putative class action lawsuit under ERISA. Four retirees affected by the pension risk transfers allege that Lockheed violated its statutory and fiduciary duties under ERISA by transferring their pension benefits to Athene. They maintain that Lockheed acted disloyally and put its own financial interests above the employees’ interests in the security of their future retirement benefits. Plaintiffs allege that they face a significant risk of default, for which they were not compensated and which devalued their pensions. In their action plaintiffs assert claims for breach of fiduciary duty of loyalty, failure to monitor, and prohibited transactions. Lockheed filed a motion to dismiss. Its motion was denied by the court in this decision. To begin, the court concluded that plaintiffs have shown they have Article III standing. Lockheed characterized the alleged harm of future injury as an “inchoate fear” unsupported by facts. The court disagreed. It found that “the complaint alleges much more than a bare allegation that Athene might hypothetically fail.” Not only did plaintiffs convincingly point to the collapse of Executive Life Insurance Company, which in many ways echoes the present situation, but they buttressed their allegations with compelling evidence demonstrating why they have reason to worry. That evidence included a 2022 evaluation of the creditworthiness of pension risk transfer insurance providers that ranked Athene the worst option and referred to it as a “questionable candidate.” It also included facts about the credit risk of Athene’s private equity structure and offshore reinsurance businesses. Plaintiffs also worry about Athene’s “exceedingly small surplus” of just 1.2%, which is so low, they say, that only a small percentage of Athene’s underlying investments need to go south before the state is legally empowered to step in. Taken together, the court was persuaded that plaintiffs have adequately alleged that Lockheed’s transfer of the plan assets and liabilities to Athene represents mismanagement so egregious that it substantially increases the risk that future pension benefits will go unpaid. As a result, the court found plaintiffs had sufficient injury-in-fact to establish standing. Moreover, the court agreed with plaintiffs that Fourth Circuit precedent stands for the proposition that they “need not demonstrate individualized injury to proceed with their claims for injunctive relief under § [1132](a)(3); they may allege only violation of the fiduciary duty owed to them as a participant in and beneficiary of their respective ERISA plans.” The court also determined that the claims are ripe for resolution and that plaintiffs have statutory standing to bring claims under ERISA despite the fact they are no longer ERISA-plan participants in light of the challenged transactions. With these preliminary matters settled, the court addressed whether plaintiffs plausibly stated claims under Federal Rule of Civil Procedure 12(b)(6) for breach of fiduciary duty, failure to monitor, and prohibited transactions. The court determined that they did. It found plaintiffs alleged plausible fiduciary breach claims in connection with the challenged annuitizations. It rejected Lockheed’s argument that it did not serve as a fiduciary when it selected Athene or engaged in the transactions. Thus, the court found that the complaint plausibly alleges Lockheed breached its duties of loyalty and monitoring “when it transacted with Athene to increase its own profits.” The court also concluded that it could plausibly infer that Athene violated ERISA Section § 1106(b) when it used pension trust assets to purchase the Athene annuities, thereby dealing with the assets of the plans in its own interest. The court thus declined to dismiss the self-dealing prohibited transaction claim. For these reasons, the court denied Lockheed’s motion to dismiss in its entirety.

McDonald v. Laboratory Corp. of Am. Holdings, No. 1:22CV680, 2025 WL 951590 (M.D.N.C. Mar. 28, 2025) (Judge Loretta C. Biggs). Plaintiff Damian McDonald, on behalf of himself and a certified class of plan participants, alleges that defendant Laboratory Corporation of America Holdings (“LabCorp”) breached its fiduciary duty of prudence under ERISA by selecting and retaining imprudent investment options in the plan despite the availability of  lower-cost share class funds, and by failing to prudently manage and control the recordkeeping and float compensation paid throughout the period to Fidelity Workplace Services, LLC. Three motions filed by defendant were before the court here: (1) a motion to exclude portions of the expert opinion of plaintiff’s expert Al Otto; (2) a motion to exclude parts of the expert report of plaintiff’s expert Ty Minnich; and (3) a motion for summary judgment. The court first addressed LabCorp’s motions to exclude expert opinions. LabCorp did not contest that Mr. Otto or Mr. Minnich are qualified and that their opinions are relevant to the case. And the court agreed that both men are qualified and their opinions are relevant. Its focus was instead on whether the challenged opinions offered by each man were reliable. The court reached two different conclusions on whether they were. It found that Mr. Otto’s opinions regarding a reasonable recordkeeping fee and about how much float compensation Fidelity received from the plan were not supported by any scientific methodology nor by any appropriate validation and therefore not reliable. Specifically, the court noted that Mr. Otto’s reasonable recordkeeping fee amount was derived solely from a stipulation in a separate case in which Fidelity was involved, while the float compensation formula he used was based on estimated figures and not explained in any sufficient detail. As a result, the court granted LabCorp’s motion to exclude Mr. Otto’s testimony as to the contested opinions. In contrast, the court determined that Mr. Minnich’s opinions are reliable. Unlike Mr. Otto, Mr. Minnich reached his conclusions about plan fees by “analyzing a multitude of factors” including “multiple fee benchmarking studies to identify pricing comparators.” The court further determined that his opinions were based on a reliable methodology that he explained in his report. Further, Mr. Minnich ensured he used reasonable comparators in reaching his conclusion. Thus, the court denied the motion to exclude Mr. Minnich. Finally, the court discussed the motion for summary judgment. Because it found both parties’ experts hold competing opinions on whether LabCorp breached its fiduciary duties with respect to the fees and funds at issue, it determined that this battle of the experts should not be resolved on summary judgment. “In light of the competing expert opinions, this Court finds that a genuine issue remains as to whether LabCorp acted prudently.” The court therefore denied LabCorp’s motion for summary judgment.

Seventh Circuit

Rush v. GreatBanc Trust Co., No. 19-cv-00738, 2025 WL 975214 (N.D. Ill. Mar. 31, 2025) (Judge Andrea R. Wood). In 2016, after a drawn-out sales process, the direct-mail printing company Segerdahl Corporation sold all shares of its common stock to ICV Partners, LLC for $265 million. Prior to the sale, Segerdahl’s common stock was entirely owned by its Employee Stock Ownership Plan (“ESOP”). The vice president at Segerdahl, Bruce Rush, objected to this transaction and sued the players, alleging that the company could have sold for a significantly higher price, $320 million, which would have increased the post-sale distributions to the ESOP participants. He believed that the seller’s desire to increase the company’s liquidity was their primary concern and motivated the sale. Mr. Rush contends that this desire put the sellers’ interests at odds with those of the participants. In his breach of fiduciary duty and prohibited transaction lawsuit against the company, its board of directors, and its trustee, GreatBanc Trust Company, Mr. Rush alleges that defendants did at least nine things wrong: (1) failed to properly account for certain variables when valuing the company; (2) improperly marketed the company only to financial buyers; (3) leaked data to ICV which resulted in the buyer lowering its offer from $300 to $265, relatedly; (4) resumed negotiations with ICV after its revised offer; (5) decided to delay the real-estate sale leaseback until after the close of the sale to ICV; (6) turned over the ESOP’s valuation to ICV; (7) GreatBanc failed to participate in negotiations on behalf of the ESOP; (8) handed over control to JPMorgan and failed to review its engagement agreement; and (9) engaged in prohibited transactions through the purchase of ESOP shares in the wake of the sale to ICV. After certifying Mr. Rush’s proposed class of participants, the case proceeded to a 14-day bench trial. During the trial 20 witnesses testified and each side presented its interpretation of the events and the 406 exhibits in the record. After a careful and exhaustive consideration of the case, the court issued its findings of fact and conclusions of law under Rule 52. To the court none of the evidence indicated convincingly that something untoward happened. To the contrary, the court agreed with defendants that its actions reflected “experienced business judgment” and the “appropriate exercise of business discretion.” On the other hand, the court criticized Mr. Rush’s theory of the case. The court found he was wholly unable to corroborate his projected $320 million valuation of the company’s worth, or his most sensational claims of wrongdoing. The court found against Mr. Rush on all of his causes of action. It agreed with defendants that they largely did not function as fiduciaries during the conduct at issue, and that, to the extent they did, they did not breach any duties. In any event, the court further agreed with defendants that Mr. Rush could not prove damages. Finally, the court concluded that insofar as any prohibited transactions occurred, they were for adequate consideration and therefore exempted from liability. The court summed up its position that there was no breach of trust as follows: “Rush has not presented any meaningful evidence of self-dealing, price manipulation, or concealed information. Rather, there was a protracted negotiation among numerous sophisticated parties to sell a company for the highest price to which the one willing buyer would agree. To that end, the evidence shows that the realities of the market dictated the sale.” Accordingly, the court found in favor of defendants on all claims.

Ninth Circuit

Partida v. Schenker Inc., No. 22-cv-09192-AMO, 2025 WL 948123 (N.D. Cal. Mar. 28, 2025) (Judge Araceli Martinez-Olguin). Plaintiff Diego Partida filed this putative class action against Schenker, Inc., the company’s retirement plan committee, and Doe defendants on behalf of current and former employees, participants, and beneficiaries of the Schenker 401(k) Savings and Investment Plan seeking to recover losses for defendants’ alleged mismanagement of the plan. Mr. Partida alleges defendants breached their duties of prudence and monitoring by investing in underperforming funds, failing to opt for lower share classes, and paying excessively high recordkeeping and administrative fees. The court previously granted defendants’ motion to dismiss Mr. Partida’s complaint with leave to amend. In response to that decision Mr. Partida filed a second amended complaint. Defendants again moved to dismiss. In this decision the court granted the motion to dismiss, this time dismissing the action with prejudice. First, the court agreed with defendants that allegations relating to their process were conclusory and ultimately focused on underperformance, not selection decisions. The court also agreed with defendants that Mr. Partida failed to present meaningful benchmarks comparing funds with similar styles and strategies to his challenged investments in the plan. The court was further persuaded that defendants offered higher cost mutual fund share classes because the higher cost classes paid more in revenue sharing. “Here, Defendants have shown, and Partida does not contest, that the Plan’s share classes were less expensive due to revenue sharing.” Finally, the court determined that Mr. Partida failed to allege facts about what services were provided to the plan for the fees it paid or how fees paid for those services were excessive in relation to the specific services provided. Thus, the court held that Mr. Partida failed to show it was more plausible than not that defendants acted imprudently. Moreover, absent an underlying fiduciary breach, the court concluded that the dependent failure to monitor claim must be dismissed as well. Not only did the court grant the motion to dismiss, but, as mentioned above, it dismissed the case without leave to amend. The court found that amendment would be futile given the fact that Mr. Partida failed to cure the deficiencies it identified in earlier decisions.

D.C. Circuit

Camire v. Alcoa USA Corp., No. 24-1062 (LLA), 2025 WL 947526 (D.D.C. Mar. 28, 2025) (Judge Loren L. AliKhan). Four former employees of the publicly traded aluminum producer Alcoa USA Corporation brought this suit, individually and on behalf of a putative class of others similarly situated in the company’s pension plans, against Alcoa, its benefits committee, the consulting financial firm, Fiduciary Counselors, Inc., and individual members of the benefits committee alleging mismanagement of the plans. Plaintiffs aver that the Alcoa entities breached their fiduciary duties under ERISA when they decided to transfer their own pension risk to the private-equity controlled reinsurance companies Athene Annuity and Life Co. and Athene Annuity & Life Assurance Company of New York (collectively “Athene”) between August 2018 and August 2022, offloading approximately $2.79 billion of Alcoa’s pension liabilities to Athene through the purchase of several group annuities. Interpretative guidance from the Department of Labor instructs plan fiduciaries that they must take steps to obtain “the safest annuity available.” According to plaintiffs, Athene’s annuities were anything but. They argue that the fiduciaries should have concluded Athene was not the safest option because of its complex investment structure investing in risky assets, its focus on private equity, its use of “untrustworthy credit rating agencies,” and its reinsurance of annuities with offshore affiliates. Taken together, plaintiffs maintain that these known facts were clear evidence that Athene was substantially riskier than other traditional annuity providers and that defendants’ decisions placed them and the other retirees and beneficiaries at substantial risk of default. Notably, plaintiffs do not allege that they have missed any monthly benefit payments or that they have received less each month than what they are entitled to under the Alcoa pension plans. Defendants jumped on this detail and argued that plaintiffs lack standing to bring their claims because they have not sufficiently alleged an injury in fact. Defendants principally relied on the Supreme Court’s ruling in Thole v. U.S. Bank N.A., 590 U.S. 538 (2020). Plaintiffs responded that they sufficiently alleged both actual harm and a concrete risk of future injury due to a substantial risk of loss to their benefits. The court was not convinced. First, the court addressed plaintiffs’ arguments in support of their claim that they suffered actual harm because of the transfer of their pensions to Athene. Plaintiffs stated that the value of their benefits was degraded because of the transfer, that they suffered harm when defendants failed to purchase the annuity which would best promote their interests, and that defendants’ misuse of plan assets harmed the concrete interests ERISA protects, thereby entitling them to equitable forms of relief. The court agreed with defendants that each of these arguments was foreclosed by Thole and that plaintiffs failed to demonstrate they suffered concrete harm due to the annuitizations because their monthly payments have not yet been affected by them. Plaintiffs made more headway where they asserted standing based on a substantial risk of future injury. The court was convinced that this theory of harm was not foreclosed by Thole because of “some salient differences between Thole and the instant case for the purposes of considering an increased-risk-of-harm theory of standing.” These differences stemmed from the nature of the pension risk transfer and included the loss of protection by both ERISA and the Pension Benefit Guaranty Corporation. The court was also mindful of the fact that courts in the D.C. Circuit have frequently upheld claims of standing based on allegations of a substantial risk of a future injury. However, the court stressed that these risks must be imminent. “Moreover, ‘[a]lthough imminence is concededly a somewhat elastic concept, it cannot be stretched beyond its purpose, which is to ensure that the alleged injury is not too speculative for Article III purposes – that the injury is certainly impending.’” Here, the court concluded that plaintiffs failed to make the necessary allegations to show an imminent risk of harm. The court understood that several events would need to occur before plaintiffs experienced the harm they are concerned about. “First, Athene would need to fail, which means that it would have to (1) ‘suffer[] catastrophic losses;’ (2) ‘fail[] to sufficiently mitigate any such losses to preserve Plaintiffs’ benefits;’ and (3) fail ‘to secure alternative funding sources.’ Then, Plaintiffs would need to have benefits that actually exceed the amount that their SGAs cover, which is over $250,000 in most states. Finally, Athene’s accounts would need to be underfunded or insufficient to cover participants’ losses in the event of failure.” To the court these events were a “highly attenuated chain of possibilities” that could not persuade it plaintiffs’ harm was certainly impending. For these reasons, the court granted defendants’ motion to dismiss for lack of standing.

Class Actions

Sixth Circuit

Chavez v. Falcon Transport Co., No. 4:19-cv-958, 2025 WL 959219 (N.D. Ohio Mar. 31, 2025) (Judge J. Philip Calabrese). Four former employees of an Ohio trucking company filed a class action lawsuit against their former employer and its affiliates for violations of the Worker Adjustment and Retraining Notification Act (“WARN”) and ERISA alleging that they had accrued vacation time for which they were not paid, their health plans were improperly terminated, and they had business expenses that defendants failed to pay. After the parties had explored their claims and defenses through discovery, the court encouraged the parties to mediate. It instigated several medication conferences with the assigned magistrate judge. Mediation “proved to be time consuming but fruitful.” Ultimately, the parties agreed to settle their dispute for $400,000. The settlement provides for $128,000.00 in attorneys’ fees, $8,747.50 in litigation costs (including the case filing fee, service costs, postage, and mediation related fees), $19,080.48 to be paid to the settlement administrator, and $4,000 in service awards to each of the named plaintiffs. On January 9, 2025, the court granted preliminary approval to the settlement, conditionally certified the settlement class, appointed the class counsel and class representatives, approved the notice form, directed the process for notice, and scheduled a fairness hearing. Since then everything has gone off without a hitch. Unsurprisingly then the court did not hesitate to grant the parties’ joint motion for final approval of class action settlement. Choosing not to deviate from its preliminary order, the court was satisfied that the class meets the requirements of Rule 23(a) and accordingly certified the class. The court also formally adopted its class counsel and class representative appointments made in its preliminary decision. The settlement itself the court found fair, reasonable, and adequate and the result of informed arms-length negotiations. The court was further satisfied that the proposed distribution method was adequate and appropriate under the circumstances of the case. “In short, the structure of the settlement provides for a minimum payment for class members that overcomes any disincentive from the claim form for tier one claimants. Therefore, the Court finds that these procedures will likely capture legitimate claims and effectively distribute settlement checks.” The court also found that the requested attorneys’ fees “do not compromise the adequacy of relief.” In fact, the court concluded that the attorneys’ fee award was reasonable in light of the six years of work counsel invested in this litigation. The court further approved of the requested litigation expenses and settlement administration costs. Finally, because no class member voiced any objection to the proposed service fee awards, the court awarded the named plaintiffs $4,000 each. It did so notwithstanding the fact that the Sixth Circuit has remained conspicuously quiet about whether it approves or disapproves of the practice of service awards to class representatives. Accordingly, the court granted the motion for class certification, final approval of the settlement, and associated relief.

Seventh Circuit

Acosta v. Board of Trs. of UNITE HERE Health, No. 22 C 01458, 2025 WL 964876 (N.D. Ill. Mar. 31, 2025) (Judge Rebecca R. Pallmeyer). Plaintiffs Jose Luis Acosta, Armando Garcia, Maria Sanchez, Glynndana Shevlin, and Maria Buenrostro moved to certify a class of current and former plan participants of two units of the multiemployer healthcare plan UNITE HERE Health. In their action plaintiffs allege that the Board of Trustees of UNITE HERE have violated their fiduciary duties under ERISA by disproportionately distributing costs to their two unions and by taking on exorbitant fund-wide administrative costs. Concluding that the proposed class met the requirements of Rule 23, the court granted the motion to certify. It first discussed certification under Rule 23(a). The putative class consists of at least 7,513 individuals, and thus there was no dispute that the class met Rule 23(a)(1)’s numerosity requirement. Next, the court found that commonality was satisfied as plaintiff’s “claims arise from Defendant’s conduct in managing the fund in ways that affect all class members similarly.” Whether defendant’s conduct was reasonably justified or a breach of fiduciary duty is a question that does not turn on individual facts or circumstances. And because the Board of Trustees did not contest that the claims of the named plaintiffs arise from the same conduct that gives rise to all claims in the putative class, the court swiftly determined that Rule 23(a)(3)’s typicality requirement was met. The court took a little more time discussing the adequacy of representation. While it was unpersuaded that there are conflicts between the named plaintiffs and absent members or conflicts with plaintiffs’ counsel, the court noted that defendant presented a forceful argument that the named plaintiffs were not adequate representatives because they failed to demonstrate sufficient knowledge of the litigation. It was true, the court said, that the named plaintiffs had some pretty glaring holes in their knowledge of the case, as deposition testimony suggested some of them did not understand terms like “class representative.” Even though plaintiffs’ showing in the case “was modest at best,” the court was confident that “each Named Plaintiff demonstrated a clear understanding of what this case is about, explaining how their claims arose from the allocation of administrative expenses and unfair treatment between different Plan Units.” To the court, this was enough to meet the requirements of Rule 23(a)(4). Having found that the requirements of Rule 23(a) were satisfied, the court turned to the question of certification under Rule 23(b) and its various subsections. Plaintiffs argued that certification is warranted under either Rule 23(b)(1) or 23(b)(3). The court ultimately determined that certification under 23(b)(1) was not a good fit, however, because in addition to plan-wide relief under § 502(a)(2) plaintiffs also seek more individualized compensatory relief under ERISA § 502(a)(3). “Plaintiffs’ claims here are thus better understood as requests for individual monetary awards, thus properly analyzed under 23(b)(3).” But Rule 23(b)(3) proved to be a round hole for a round peg. It fit nicely, the court concluded, as common questions predominate and can be resolved for all members of the class in a single adjudication, and single class-wide adjudication would be superior to any other method of resolving the dispute. Though the court agreed with defendant that damages will involve individualized questions and calculations, the court addressed this problem by bifurcating the case into a liability phase and a damages phase. Accordingly, the court certified the proposed class and granted plaintiffs’ motion.

Disability Benefit Claims

First Circuit

DeSilva v. The Guardian Life Ins. Co. of Am., No. 23-cv-12625-MRG, 2025 WL 999920 (D. Mass. Mar. 31, 2025) (Judge Margaret R. Guzman). On April 19, 2016, plaintiff Janath DeSilva was involved in a serious car accident. After the accident he underwent several surgeries. The accident and complications from the surgeries left Mr. DeSilva disabled. Prior to the accident, Mr. DeSilva worked as an independent financial advisor and the sole owner of his business. He reported that he could no longer work because of his physical injuries and submitted a claim for disability benefits under his employee welfare benefit plan administered by The Guardian Life Insurance Company of America. Guardian approved the claim, and paid Mr. DeSilva monthly long-term disability benefits for over four years. However, in February 2021, Guardian notified Mr. DeSilva that it was terminating his benefits because it discovered that he was in fact working and that he had exceeded the Maximum Allowable Disability Earnings under the plan. This action by Mr. DeSilva disputes that decision. The parties cross-moved for summary judgment. The court referred the motions to Magistrate Judge David H. Hennessy for a report and recommendation. Judge Hennessy furnished a 29-page report recommending the court grant summary judgment in favor of Guardian. Mr. DeSilva objected. Before addressing Mr. DeSilva’s five objections, the court tackled the threshold question of the standard of review. Guardian argued that the plan language indicating that Guardian applied plan terms to make conclusive and binding benefit determinations constituted a clear grant of discretionary authority. The court disagreed. It referred to similar language that the First Circuit found insufficiently clear to give notice to plan participants that the claims administrator enjoys discretionary decision-making authority. Accordingly, the court concluded that the default de novo standard of review should apply. As noted, Mr. DeSilva raised five objections to the Magistrate’s report: (1) the Magistrate improperly defined the term “working” and that definition could not be reconciled with Guardian’s interpretation of Mr. DeSilva’s conduct during the first four years of his claim; (2) under any definition, he met his burden of showing that he was not working; (3) the report made erroneous factual conclusions and inferences that were outside the scope of the administrative record; (4) Guardian’s failure to define the term “working” was prejudicial; and (5) Guardian’s financial conflict of interest should have been a relevant factor in the Magistrate’s analysis, but was not considered. Underpinning all of Mr. DeSilva’s objections was his overarching argument “that neither his ownership of his business and his interactions with it, nor his tax returns, support a finding that he was working.” The court overruled Mr. DeSilva’s objections one by one and rejected his central argument. First, the court concluded that Judge Hennessy’s definition of “working” to mean “engaged in activity regularly for wages or salary” was a good one. The court also said the definition was in line with the language of the plan and not inconsistent with Guardian’s previous interactions with Mr. DeSilva during the period when it approved and paid his claim. Second, the court agreed with the Magistrate that Mr. DeSilva did not carry his burden to show he was not working. Although the decision was a little coy about the specific work Mr. DeSilva was performing, it seemed that he was maintaining and overseeing the viability of his business despite his disability claim. Third, the court found that Judge Hennessy had not rejected the expert reports and had in fact appropriately weighed the administrative record to draw common sense and reasonable inferences from it. Fourth, the court agreed with Guardian that it was not legally obligated to define the unambiguous term “working,” and that not defining the word was not prejudicial to Mr. DeSilva. Finally, applying the de novo lens where courts “place no stock in the motivations of the actual plan administrator, whatever they may be,” the administrator’s conflict of interest is not a relevant factor that must be considered. For these reasons, the court overruled Mr. DeSilva’s objections, adopted the report and recommendation in full, and entered summary judgment in favor of Guardian.

Ninth Circuit

Wallace v. Hartford Life & Accident Ins. Co., No. CV-23-00071-TUC-JGZ, 2025 WL 963579 (D. Ariz. Mar. 31, 2025) (Judge Jennifer G Zipps). Plaintiff Jeffery Wallace filed this action against defendant Hartford Life and Accident Insurance Company seeking judicial review of its termination of his long-term disability benefits under ERISA. While he was employed, Mr. Wallace worked as a mining engineer. He stopped working in part because of fibromyalgia and in part because of the sedating side effects of the prescription medication he was on to treat his fibromyalgia pain. In fact, Mr. Wallace’s employer banned its employees from actively working in safety-sensitive positions, such as mining engineer, while taking controlled substances, including prescription medications. It was indeed after the mining company put in place this policy that Mr. Wallace stopped working and applied for disability benefits. This litigation stems from the second time Hartford terminated Mr. Wallace’s “any qualified occupation” long-term disability benefits. The parties filed competing motions for summary judgment. Applying deferential arbitrary and capricious standard of review, the court concluded that even when it factored in Hartford’s conflict of interest, nothing in the record showed that Hartford’s decision was unreasonable, illogical, implausible, or “without support in inferences that may be drawn from the facts in the record.” The court concluded that Mr. Wallace’s appeals were given a full and fair review by Hartford and that the insurance company appropriately handled his case. Although its ultimate decision conflicted with the opinions of Mr. Wallace’s treating providers and an administrative law judge of the Social Security Administration, the court nevertheless agreed with Hartford that it was permitted to disagree with them. Despite Mr. Wallace’s many arguments for why he believed that Hartford acted arbitrarily and capriciously and with bias, the court remained unconvinced. Accordingly, the court concluded that Mr. Wallace failed to show that Hartford abused its discretion in deciding to terminate his long-term disability benefits and entered summary judgment in favor of Hartford.

Discovery

Second Circuit

Ravarino v. Voya Financial, Inc., No. 3:21-cv-01658 (OAW), 2025 WL 969674 (D. Conn. Mar. 31, 2025) (Magistrate Judge Thomas O. Farrish). Plaintiffs are ten individuals who participate in the Voya Financial, Inc. 401(k) Plan. In this action they allege that Voya, four of its subsidiaries, and the plan’s administrative and investment committees have violated their fiduciary duties and engage in prohibited transactions under ERISA. The case has been narrowed somewhat from plaintiffs’ original complaint after the court granted in part defendants’ motion to dismiss the action. Following that decision plaintiffs have served interrogatories, requests for production, and deposition notices. Defendants have produced some documents but have largely objected to plaintiffs’ requests for production. Plaintiffs filed a motion seeking an order compelling defendants to produce all documents responsive to their requests for production, to complete answers to their interrogatories, and to produce witnesses in response to their seventeen deposition notices. The court assigned the discovery matter to Magistrate Judge Thomas O. Farrish. In this decision Judge Farrish granted in part and denied in part plaintiffs’ motion, tailoring their discovery to fit the court’s previous rulings. In a consistent theme throughout the decision Judge Farrish granted plaintiffs’ requests insofar as they aligned with the claims that remain following the court’s ruling on defendants’ motion to dismiss. To the extent Judge Farrish viewed plaintiffs’ requests as going beyond the confines of the court’s previous rulings, he limited or denied them. Judge Farrish also denied plaintiffs’ motion regarding any documents defendants have already produced. The Magistrate also stressed that litigants “have the right to discover non-privileged information that is proportional to the needs of the case and relevant to a live claim, Fed. R. Civ. P. 26(b)(1), and they do not lose this right just because their adversary thinks it has a compelling defense.” He therefore declined to limit the scope of discovery simply because defendants claimed to have already produced the documents they believe are necessary. Defendants were largely ordered to produce the documents plaintiffs requested. The Magistrate also ordered defendants to respond completely to three of the five interrogatories. As for the depositions, the Magistrate stated bluntly that “Plaintiffs have not yet shown an entitlement to eleven depositions, let alone seventeen.” Judge Farrish stated that plaintiffs failed to show that this number of depositions “would not be unreasonably cumulative or duplicative. The Court will therefore deny their motion to the extent that it seeks an order directing the Defendants to produce the seventeen witnesses as noticed. The denial is without prejudice to renewal after the Plaintiffs take their ten depositions.” Without getting bogged down in the hyper-specific details of the order, suffice it to say that plaintiffs didn’t get everything they wanted, but they got a lot of what they asked for and at least most of what they needed.

Third Circuit

Adirzone v. Thomas Jefferson Univ., No. 24-4086 (CPO/SAK), 2025 WL 972832 (D.N.J. Apr. 1, 2025) (Magistrate Judge Sharon A. King). Plaintiff Judith Adirzone is a breast cancer survivor who brought this action under ERISA to challenge her self-funded healthcare plan’s denial of her claim for an in-network exception for the breast reconstruction surgery that was performed by two out-of-network surgeons. Ms. Adirzone alleges that in doing so, the Jefferson Health and Welfare Plan and its plan sponsor, Thomas Jefferson University, violated the terms of the plan in contravention of Sections 502(a)(1)(B) and 502(a)(3). Moreover, she maintains that the failure to provide these benefits violated the Women’s Health Cancer Rights Act of 1998. Ms. Adirzone moved to compel the production of the Administrative Services Contract between the university and the plan’s third-party claims administrator, Aetna Life Insurance Company. The court denied her request in this decision. First, the court agreed with defendants that the clear language of the plan grants them discretionary authority, and thus the appropriate standard of review is abuse of discretion. Under this review standard, district courts in the Third Circuit only permit limited discovery beyond the administrative record, mostly relating to conflicts of interest. Ms. Adirzone argued that a conflict of interest may very well exist here between defendants and Aetna. But the court said that such “bald allegations of wrongdoing or alleged bias” without any specific facts suggesting the existence of procedural irregularities or bias in the handling of her claim are insufficient to entitle additional extra-record discovery. This was particularly so, the court found, because the plan is fully self-funded, which alters the calculus about any potential conflicts of interest with Aetna. Ms. Adirzone also argued that the Administrative Services Contract should be produced because it is a governing plan document upon which the plan operates. The court was not persuaded. It said that other courts in this district have found that these types of administrative services agreements are not plan documents under the statute. The court followed the same approach. For these reasons, the court denied the motion to supplement the administrative record with the Administrative Services Contract with Aetna.

Ninth Circuit

DuVaney v. Delta Airlines, Inc., No. 2:21-cv-02186-RFB-EJY, 2025 WL 973919 (D. Nev. Apr. 1, 2025) (Magistrate Judge Elayna J. Youchan). Plaintiff Marsha DuVaney, a former employee of Northwest Airlines and a participant in its pension plan, alleges that the plan’s current plan sponsor and Northwest’s corporate parent, Delta Airlines, Inc., is violating ERISA by paying joint-and-survivor annuity benefits that are not the actuarial equivalent of benefits that she would be entitled to under a single life annuity. Ms. DuVaney asserts her claims on behalf of a putative class of approximately 4,272 similarly situated individuals. Before the court here was Ms. DuVaney’s motion to compel the Delta defendants to respond fully to one of her interrogatories, Interrogatory 10, which requests defendants disclose the monthly amount of the single life annuity each retiree in the putative class could have received at their benefit commencement date, as well as the benefit commencement dates for each class member. Ms. DuVaney asserts that the single life annuity and benefit commencement date for each putative class member is essential for determining the central issue of whether they are receiving an actuarially equivalent joint-and-survivor annuity amount, as well as for determining the harm each putative class member suffered. Defendants maintain that they do not keep these data points on their system in a way that could be retrieved and exported simply and instead propose to engage their recordkeeper to manually retrieve the single life annuity and benefit commencement date information for a sample of 50 putative class members. They argue that manual retrieval of this information for all 4,272 putative class members is unduly burdensome and disproportionate to the needs of the case. Delta estimates that it would take approximately 355 hours and cost around $41,535 to comply with plaintiff’s request. Ms. DuVaney responded that defendants offered only “boilerplate objections,” and that her request is proportional under Federal Rule of Civil Procedure 26(a). She maintains that there is a strong public interest in retirement plans. Moreover, she says the estimated cost to produce the information is relatively low compared to the alleged amount in controversy, likely in the tens of millions. “Plaintiff further argues that any burden or expense on Defendants is a result of their own decision to outsource recordkeeping to a third-party, and that poor recordkeeping is no excuse to avoid discovery.” The court found most of Ms. DuVaney’s arguments unavailing. The court said there was little support for her argument regarding supposedly poor recordkeeping. And it was unconvinced that the production of all of the requested data was necessary at this stage, particularly as it is unduly burdensome for the defendants. The court therefore agreed that Delta should be required to produce data for a representative sample of the putative class in order to provide enough information to support class certification. However, the court did not like defendants’ proposed sample size. The court instead exercised its discretion to order defendants to provide the single life annuity and benefit commencement date data for 215 individuals, i.e., every twenty-fifth retiree. “The Court finds that the information provided by this sample will likely be sufficient to support a motion for class certification. If Plaintiff is successful in certifying the class, she will retain the right to the SLA at BCD values for each individual class member for purposes of calculating damages.”

ERISA Preemption

Sixth Circuit

McKee Foods Corp. v. BFP Inc., No. 1:21-cv-279, 2025 WL 968404 (E.D. Tenn. Mar. 31, 2025) (Judge Charles E Atchley, Jr.). This pre-enforcement action brought by a food product manufacturer in Tennessee, plaintiff McKee Foods Corporation, concerns whether recent amendments to several provisions of the Tennessee Code Annotated are preempted by ERISA. Specifically, McKee seeks a declaratory judgment that Public Chapters 569 and 1070, as embodied in Tenn. Code Ann. §§ 56-7-3120 and 56-7-3121, which allow patients to fill prescriptions at any willing pharmacy, require pharmacy benefit managers to cover any willing pharmacy in their networks, and prohibit financial incentives and deterrents for the use any specific pharmacy, are preempted by ERISA and therefore not enforceable against it or any other self-funded ERISA plan. The case has a long procedural history, including an appeal to the Sixth Circuit. (Your ERISA Watch has reported on previous rulings in the case in our March 27, 2024 newsletter and February 15, 2023 newsletter). Originally, the only defendant in this action was Thrifty Med Plus Pharmacy, a Tennessee pharmacy which was kept out of McKee Food’s pharmacy network. On remand, McKee Foods amended its complaint to add defendant Carter Lawrence in his official capacity as Commissioner of the Tennessee Department of Commerce and Insurance. Now all parties have a new round of dispositive motions. McKee Foods moved for summary judgment, Thrifty Med moved to dismiss, and the Commissioner moved for summary judgment. In this order the court granted in part and denied in part McKee’s motion for summary judgment, granted Thrifty Med’s motion to dismiss, and denied the Commissioner’s motion for summary judgment. The court began with McKee’s claims against the Commissioner. Not only did the Commissioner dispute the underlying preemption arguments, but he also argued that the court cannot reach the merits of that the claims against it because: (1) McKee lacks standing to sue him; (2) McKee failed to state a claim upon which relief can be granted; and (3) the court should decline to exercise jurisdiction under the Declaratory Judgment Act. The court disagreed on all three points. First, the court made sure to emphasize that McKee is a pre-enforcement plaintiff, meaning it must establish a credible threat of prosecution. The court found that it could do so as the Commissioner has consistently reiterated that the challenged laws will be enforced against self-funded ERISA plans, the precise kind of plan that McKee operates. In addition, McKee’s current conduct appears to violate the challenged laws. In particular, the plan not only contains a network of pharmacies its participants may use, but the company also owns and operates its own pharmacies and financially incentivizes its plan participants to use the company store. Thus, the court concluded that McKee has standing to sue the Commissioner. The court further concluded that McKee has stated a claim upon which relief can be granted under Section 502(a)(3). Because, again, this is a pre-enforcement challenge to an allegedly preempted set of state laws, the court said McKee has a colorable claim to challenge the laws before it is placed in the impossible position of either having to intentionally flout the laws or forego what it believes to be protected activity. The court also decided to exercise its jurisdiction under the Declaratory Judgment Act as it could not “identify a better or more effective remedy for determining whether state law is preempted by federal law than a declaratory judgment by a federal court.” With these preliminary matters resolved, the court turned to the central question before it – whether the state pharmacy benefit regulating laws are preempted by ERISA. The Commissioner argued that they are not and that they simply affect costs. The court did not agree. Although it agreed with the Commissioner that these laws affect costs, it stressed they won’t just affect costs, but will also affect plan design. By not allowing plan sponsors to choose which pharmacies they want to include in their networks, or whether they want to offer certain pharmacies incentivizing discounts, the challenged state statutes eliminate choices and direct regulation of benefit structure by forcing administrators to construct their plans in a particular way, eliminating their discretion to shape benefits as they see fit. Under Rutledge v. Pharmacy Care Management Association, 592 U.S. 80 (2020), the court concluded that these state laws are preempted since they clearly adopt a particular scheme of substantive coverage, govern a central matter of plan administration, and interfere with nationally uniform plan administration. As a result, the court concluded that Public Chapters 569 and 1070 – as embodied in Tenn. Code Ann. §§ 56-7-3120 and 56-7-3121 and affecting the scope of § 56-7-2359 – are preempted to the extent they purport to govern self-funded ERISA welfare plans. Accordingly, the court granted McKee’s motion for summary judgment as to its claims against the Commissioner, and denied the Commissioner’s motion for summary judgment. Having concluded the challenged laws are preempted, the court turned to evaluating whether McKee is entitled to an injunction against the Commissioner. The court found that it was. “As preemption is a constitutional issue… McKee would be irreparably harmed if it was required to comply with (or penalized for failing to comply with) the challenged laws.” The court therefore determined that the Commissioner must be permanently enjoined from enforcing the challenged laws against McKee. With this matter resolved, the only thing left for the court to address was McKee’s claims against Thrifty Med. In short order, the court stated that, while its resolution of the claims against the Commissioner effectively resolved the claims against Thrifty Med as well, Thrifty Med is nevertheless entitled to be dismissed from this action as it has voluntarily ceased its attempts to join the health plan’s pharmacy network, meaning there is no longer an active case or controversy between it and McKee. Thus, the court found that McKee’s claims against Thrifty Med have been rendered moot and consequently that Thrifty Med should be dismissed from this action.

Life Insurance and AD&D Benefit Claims

Tenth Circuit

Jensen v. Life Ins. Co. of N. Am., No. 24-4014, __ F. App’x __, 2025 WL 1013456 (10th Cir. Apr. 4, 2025) (Before Circuit Judges Moritz, Murphy, and Carson). Plaintiff Jill Jensen contends that defendant Life Insurance Company of North America erroneously denied her claim for ERISA-governed accidental death benefits after her husband passed away in his sleep from “oxycodone and clonazepam toxicity.” LINA denied Jensen’s claim on the ground that the benefit plan’s medical-treatment exclusion barred the payment of benefits. Under de novo review, the district court agreed with LINA, granting it summary judgment. (Your ERISA Watch summarized this decision in our January 10, 2024 edition.) Jensen appealed. Just as in the district court, the parties sparred over the appropriate standard of review. However, the Tenth Circuit took the same approach as the district court and ruled that the standard was irrelevant: “[W]e need not address or decide any of these matters because even if Jensen were to successfully evade application of the discretionary-authority provision, her appeal fails under de novo review.” The appeal turned on the language of the exclusion, which provided: “benefits will not be paid for” a covered loss that “is caused by or results from…[s]ickness, disease, bodily or mental infirmity, bacterial or viral infection or medical or surgical treatment thereof[.]” Jensen, relying on the “last antecedent” rule of interpretation, argued that the phrase “medical or surgical treatment thereof” applied only to the last item in the list, “bacterial or viral infection,” and because her husband did not die from bacterial or viral infection, she should prevail. The Tenth Circuit was unpersuaded. It observed that “the rule of the last antecedent ‘is not an absolute and can assuredly be overcome by other indicia of meaning,’” and “the context here cuts strongly against Jensen’s last-antecedent interpretation.” The court stated that accidental death insurance is designed “to provide benefits when death (or another covered loss) results solely from an accident; such insurance does not typically provide benefits for accidents that occur in the course of medical treatment.” The court also identified other provisions in the policy that “strongly indicate that AD&D benefits under the policy are only available for losses caused by an accident alone, with no sickness-related contributing causes.” The Tenth Circuit also rejected Jensen’s backup argument that the exclusion was ambiguous and thus should be construed in her favor under the doctrine of contra proferentem. The court found that Jensen’s interpretation was “not reasonable” and dismissed Jensen’s attempt to create ambiguity by comparing the medical-treatment exclusion with another exclusion (the voluntary-ingestion exclusion). As a result, the district court’s decision upholding LINA’s denial was affirmed in its entirety.

Medical Benefit Claims

Sixth Circuit

T.E. v. Anthem Blue Cross and Blue Shield, No. 3:22-cv-202-DJH-LLK, 2025 WL 952486 (W.D. Ky. Mar. 29, 2025) (Judge David J. Hale). Plaintiff T.E., individually and on behalf of his minor son, C.E., sued Anthem Blue Cross and Blue Shield, Stoll Keenon Ogden, and the Stoll Keenon Ogden PLLC Benefit Plan asserting claims for wrongful denial of benefits and a violation of the Mental Health Parity and Addiction Equity Act after Anthem denied reimbursement for continued care of C.E.’s stay at a residential treatment center. Each party moved for summary judgment. Under the extremely deferential arbitrary and capricious standard, the court affirmed the denial of benefits. Contrary to T.E.’s arguments, the court concluded that Anthem’s decision was neither procedurally nor substantively arbitrary and capricious. The court noted that Anthem did not “totally ignore” the records, but in fact cited the opinions of T.E.’s providers in its denial letters, along with other evidence in the record favorable to T.E. Furthermore, the court disagreed with T.E. that Anthem had selectively reviewed the evidence. The court stated that the denial made no statements that were contradicted by the medical record, and in fact the objective evidence in the record could be read to back up the conclusion that 24-hour inpatient care was not medically necessary. The court acknowledged that C.E. engaged in head-banging, a form of self-harm, on at least two instances during the relevant period. However, the court did not read the medical record to suggest “that any thoughts of self-harm were not manageable at an outpatient treatment facility.” Based on the information available to them, at least three reviewing doctors concluded that residential treatment was no longer medically necessary because there was no evidence of suicidal or homicidal ideation, no psychosis or hallucinations, and because C.E. was improving and exhibited cooperative behavior and a more stable mood. The court expressed that T.E.’s position could also easily be supported by the evidence in the record. However, that is not the standard. Because the plan grants Anthem discretionary authority, it can only be found to have abused that discretion if its decision was unsupported by the record. Therefore, the court held that the plan’s denial of coverage was not arbitrary and capricious. The court also issued judgment to defendants on the Parity Act claim. The court agreed with defendants that T.E. failed to plausibly allege a disparity between the treatment limitations on mental health benefits as compared to those placed on analogous medical benefits. There was simply no evidence, the court said, that Anthem misapplied its guidelines or violated the Parity Act. Accordingly, the court denied T.E.’s motion for summary judgment and granted defendants’ motion for summary judgment.

Ninth Circuit

Kisting-Leung v. Cigna Corp., No. 2:23-cv-01477-DAD-CSK, 2025 WL 958389 (E.D. Cal. Mar. 31, 2025) (Judge Dale A. Drozd). Plaintiffs Suzanne Kisting-Leung, Samantha Dababneh, Randall Rentsch, Christina Thornhill, Amanda Bredlow, and Abdulhussein Abbas filed a class action complaint against Cigna Corporation and Cigna Health and Life Insurance Company alleging that it is violating ERISA and California law through its use of an algorithm called PxDx which allows it to reject healthcare claims on medical necessity grounds without ever opening a patient file. According to reporting done by ProPublica in 2023, Cigna doctors spent an average of 1.2 seconds “reviewing” each case. In fact, it was this same reporting that prompted the instant litigation. Plaintiffs claimed they learned for the first time about the use of the algorithm, a fact “Cigna routinely fails to disclose,” through the ProPublica article. In their complaint plaintiffs assert three causes of action: (1) wrongful denial of benefits under Section 502(a)(1)(B); (2) breach of fiduciary duty under Section 502(a)(3); and (3) violation of California’s Unfair Competition Law (“UCL”). The Cigna defendants moved to dismiss the case pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). In this kitchen-sink decision the court granted in part and denied in part the motion to dismiss. The decision kicked off with a discussion on standing. Defendants supplied an affidavit from a medical officer in their Clinical Performance and Quality Department to support their contention that plaintiffs Kisting-Leung, Thornhill, and Bredlow did not have their claims denied through PxDx review. The three plaintiffs challenged this, arguing that it is an issue of fact inappropriately raised by Cigna in a motion to dismiss. Moreover, plaintiffs took issue with the declaration’s use of equivocal language. But the court said the main point – that these three plaintiff’s claims were not reviewed using PxDx review – was asserted without equivocation. While the court noted that plaintiffs do aver that Cigna routinely fails to disclose the use of its algorithm, it concluded that they “present no evidence for this assertion. Nor do plaintiffs present any other countervailing evidence.” Accordingly, based upon the sworn declaration, the court found that there was no genuine dispute of fact that the claims of plaintiffs Kisting-Leung, Thornhill, and Bredlow were not subjected to PxDx review. As a result, the court agreed with Cigna that these three plaintiffs lacked Article III standing to proceed with their fiduciary breach and UCL claims, because these two causes of action assert violations of these statutes by using the PxDx algorithm to review the claims. Nevertheless, the court agreed with plaintiffs that their wrongful denial of benefits claims were not dependent on the algorithm and there were no standing issues for the claim under Section 502(a)(1)(B). Notwithstanding this conclusion, the claim for benefits faced other issues. The court agreed with defendants that the wrongful denial of benefits claim had too tenuous a connection to the language of the plan to demonstrate that defendants breached plan terms. Instead, plaintiffs had tied their allegations to Cigna’s external “Medical Coverage Policy,” which the court found separate from the plan itself. The court stated that the closest plaintiffs got to satisfying pleading requirements under Section 502(a)(1)(B) were their allegations that plan documents require Cigna to provide benefits for covered medically necessary health services. The court concluded that this language was “too ‘general’ to demonstrate that defendants breached the plan terms.” Accordingly, the court dismissed the ERISA benefits claim. The court then assessed the fiduciary breach claim under Section 502(a)(3). At this point the decision shifted and plaintiffs started making some headway. Defendant’s argument that medical doctors had in fact made the medical necessity decisions by using the algorithm was a bridge too far for the court. The court found “defendants’ interpretation of the plan provision requiring determinations of medical necessity be made by a medical director – as allowing an algorithm to make the decision so long as a medical director pushes the button – conflicts with the plain language of the plan and constitutes an abuse of discretion.” Therefore, the court found that plaintiffs adequately alleged that defendants violated the plan terms when they entrusted medical necessity decisions to PxDx, and by extension that they had plausibly pled a breach of fiduciary duty. Additionally, the court disagreed with defendants that plaintiffs’ claims under Section 502(a)(1)(B) and (a)(3) were duplicative. On the contrary, the court was persuaded that the two causes of action were distinct and can proceed simultaneously because they seek different remedies: recovery of benefits and equitable forms of relief respectively. Thus, the court denied the motion to dismiss the fiduciary breach claim, except as to plaintiffs Kisting-Leung, Thornhill, and Bredlow. The same was true of plaintiffs’ Unfair Competition Law claim. Again, the court rejected defendant’s overreaching argument that the PxDx process allows its medical doctors to review claims and either approve or deny them. For the same reasons as before, the court was not persuaded by this argument. Moreover, the court agreed with plaintiffs that their state law claim was not preempted by ERISA because the savings clause applies. Like the fiduciary breach claim, the court denied the motion to dismiss the UCL claim, except as to plaintiffs Kisting-Leung, Thornhill, and Bredlow. Finally, to the extent Cigna’s motion to dismiss was granted, the court granted plaintiffs leave to amend their complaint.

Plan Status

First Circuit

Peterson v. The Lincoln Natl. Life Ins. Co., No. 4:23-CV-40097-MRG, 2025 WL 1000689 (D. Mass. Mar. 31, 2025) (Judge Margaret R. Guzman). Plaintiff Deborah Peterson has a history of spinal conditions dating back to childhood. In 2017, she was hired as the coordinator of rehabilitative services at Notre Dame Health Care Center, Inc. Notre Dame Health is a non-profit which owns and operates health care facilities and nursing homes, and is affiliated with the Roman Catholic Church. Although her spinal disease was longstanding, it allegedly progressed, ruining her employment. Over time, Ms. Peterson attests that she became unable to fulfill the duties of her occupation and ceased working. She submitted a claim for long-term disability benefits to The Lincoln National Life Insurance Company under her employer’s group policy. Ms. Peterson believes that the group policy is a “church plan” exempt from ERISA. Operating under this assumption, she filed her lawsuit seeking entitlement to benefits under the plan in state court in Massachusetts alleging state law claims. Lincoln removed the action to federal court. It disputes that the plan is an exempted church plan, and contends that Ms. Peterson’s state law causes of action are preempted by ERISA. The parties filed cross-motions for summary judgment on the issue of plan status. At the outset the court explained its four-stop road map of its decisional analysis. Step one: decide which party bears the burden of showing that the plan is or is not subject to ERISA. Step two: decide whether the plan is governed by ERISA or whether it fits within the statutory definition of a church plan such that it is exempt from ERISA. Step three: if the court finds the church plan exemption does not apply, address whether the state law claims are preempted. Step four: if the claims are found to be preempted, decide whether they must be dismissed, and if so, whether dismissal should be with or without prejudice. With its route plotted, the court resolved the issues before it. To begin, the court concluded that the defendant who removed the case has the burden to show federal question jurisdiction exists, which includes establishing that the plan is not a church plan. Next, though no party disputed this fact, the court concluded that if the plan does not fall within the church plan exemption it is clearly otherwise an ERISA-governed employee welfare benefit plan. The court then resolved the heart of the dispute. Ms. Peterson argued that the plan fits the statutory definition of a “church plan” as her former employer is a religiously-affiliated non-profit. Lincoln countered that church plans do not extend to all entities merely associated with a church, but are plans run by either churches or so-called principal purpose organizations. “Defendant contends that Plaintiff has “reverse-engineered” the text of § 1002(33)(C)(ii) and § 1002(33)(C)(iii) to generate a result that was not intentional (i.e., allowing the employee welfare benefits plans of all entities merely associated with a church to fall within the statutory definition of church plan).” The court sided with Lincoln. “After careful review, the undersigned finds that the statutory provisions at issue are not ambiguous since they do not permit ‘more than one reasonable interpretation.’… Indeed, the plain text only permits one reasonable interpretation, namely that there are only two types of organizations that can qualify for the ERISA church-plan exemption: (1) churches, and (2) principal-purpose organizations…Nowhere does the plain text expand the definition of church plan to encompass all entities or organizations that are merely associated with a church.” Ms. Peterson’s interpretation, the court said, would require “textual gymnastics.” The court was therefore unwilling to so drastically expand the definition of a church plan beyond Congress’s intent. And to the extent other courts have faced the same or similar questions over the scope of the church plan exemption, they have interpreted the statute similarly. Accordingly, the court agreed with Lincoln that the long-term disability insurance policy is governed by ERISA. Moreover, as Ms. Peterson’s state law claims seek benefits under that plan, the court determined that the claims are preempted by ERISA and must be dismissed. However, the court decided in the last section of its decision to dismiss the claims without prejudice so Ms. Peterson can file a new complaint asserting her claims under ERISA.

Sosa v. 28Freight LLC, No. 4:24-CV-40064-MRG, 2025 WL 959201 (D. Mass. Mar. 31, 2025) (Magistrate Judge Margaret R. Guzman). Plaintiffs Claudio Sosa, Luis Aguilar, and Cristian Lamarque are current and former truck drivers working for 28Freight LLC, a Massachusetts company specializing in transporting biotech and life sciences cargo. Plaintiffs sued 28Freight and its sole manager and president, Richard Marks, on behalf of themselves and a putative class, alleging defendants have misclassified them as independent contractors in order to deprive them of benefits they would have otherwise been entitled to as employees. In addition, the workers maintain that defendants are violating Massachusetts wage laws by failing to timely pay drivers and for unlawfully deducting business expenses from their earned wages. They also allege that 28Freight failed to pay its drivers minimum wage and that it is violating various provisions of the Department of Transportation’s Truth-in-Leasing regulations. Defendants moved for partial dismissal of the complaint. They argued that plaintiffs’ claim for entitlement to employee benefits under the Massachusetts Wage Act is preempted by ERISA, that the claim for untimely wage payments is not sufficiently pled, and that the improper deductions claims are preempted by the Truth-in-Leasing regulations. Magistrate Judge Margaret R. Guzman agreed in part, but not as to ERISA. Defendants supported their argument of ERISA preemption by offering excerpts from the benefits policies section of its employee handbook. Defendants asserted that the employee handbook makes it clear that its medical, dental, vision, short-term and long-term disability insurance, life insurance, and 401(k) retirement plan are all covered by ERISA. While Judge Guzman found the booklet to be strong evidence suggesting that the employer has adopted ERISA-regulated plans, it did not find the booklet determinative, particularly as the employee handbook does not reference ERISA nor provide a summary plan description. “Based on the information properly before the Court, the Court finds that Defendants have failed to show to a certitude that the plan at issue is an ‘employee benefit plan’ and thus that ERISA preempts Plaintiffs’ claims.” Nevertheless, the court did grant defendants’ motion to dismiss plaintiffs’ claims relating to the allegedly improper deductions, as it agreed with defendants that these claims were preempted by the Truth-in-Leasing regulations. The Magistrate Judge therefore recommended the court grant in part and deny in part the motion to dismiss to reflect these positions.

Seventh Circuit

Barnett v. Waste Management Inc., No. 24 C 6436, 2025 WL 962959 (N.D. Ill. Mar. 31, 2025) (Judge LaShonda A. Hunt). In 1988, plaintiff Enid Barnett’s late husband, Eugene Barnett, entered into a Retirement Benefits Agreement with his then-employer, The Brand Companies, Inc. The Agreement granted Mr. Barnett an annual retirement benefit, an additional retirement benefit, retiree medical coverage for him and his wife, and a 50% survivor benefit for Ms. Barnett. The Agreement also includes an arbitration provision that requires any dispute over the document to be handled by arbitration. Eugene died in October 2022. As his surviving spouse Ms. Barnett believed she was entitled to medical and dental insurance coverage as well as the survivor benefit. Defendant Waste Management, Inc. acquired The Brand Companies. It has provided Ms. Barnett with the medical and dental insurance coverage but not with the lifetime surviving spouse benefit payments. Accordingly, Ms. Barnett initiated arbitration proceedings with the American Arbitration Association, as required by the agreement. Defendant has not participated in these proceedings Ms. Barnett initiated. As a result, she filed suit in state court against the company to compel arbitration under the Illinois Uniform Arbitration Act. Defendant removed the action and subsequently moved to dismiss the claim as preempted by ERISA. Its motion was granted by the court in this decision. The parties contested whether the Agreement is an ERISA-governed plan. Ms. Barnett argued it is not because it does not require an ongoing administrative program and it does not contain reasonably ascertainable terms. However, because the Agreement requires ongoing and indefinite payments and determinations about payments, creating the need for financial coordination and control, the court agreed with Waste Management, Inc. that the Agreement contains the “hallmarks” of an ongoing administrative program. Ms. Barnett was incorrect, the court stated, that the payments to her and her husband are predetermined and require only arithmetic computation. She was also wrong, the court found, that a reasonable person could not ascertain the terms of the Agreement. To the contrary, the Agreement makes clear the intended beneficiaries, the intended benefits, the amount of those benefits, the source of its financing, and that defendant serves in a fiduciary capacity administering the plan, although it does not use those express terms. “[U]ltimately the Court finds that the Agreement meets the criteria required for a plan to be governed under ERISA. Consequently, Plaintiff’s petition under state law is preempted.” The court therefore granted defendant’s motion to dismiss the claim to compel arbitration under the Illinois Uniform Arbitration Act. That being said, the court also granted Ms. Barnett leave to amend her complaint to assert a federal claim to compel arbitration should she wish to.

Ninth Circuit

Roberts v. IFS Topco, LLC, No. 24-CV-2433-BEN-BLM, 2025 WL 999704 (S.D. Cal. Apr. 3, 2025) (Judge Roger T. Benitez). Plaintiff Jeffrey Roberts sued his former employer, IFS Topco, LLC, in state court asserting five state law causes of action. One of those claims is a claim for breach of contract based on an alleged failure to pay severance benefits under an individual severance agreement. Defendant removed the action to federal court. Its removal was based solely on ERISA preemption of the breach of contract claim. The employer asserts that the severance agreement is an ERISA-governed plan. Mr. Roberts moved to remand his action back to California state court. The court granted his motion to remand in this decision. The court agreed with Mr. Roberts that the individual severance agreement at issue “lacks ERISA’s defining features” because the severance terms “were predetermined, required no discretion, and involved only a finite series of fixed payments.” The employer does maintain a broader ERISA plan for other employees, but the court said that Mr. Roberts’ legal claim arises solely from his individual severance agreement, not the other severance plan offered by IFS Topco. Accordingly, the court concluded that Mr. Roberts could not have brought his claim under ERISA Section 502(a). Nevertheless, for the sake of completeness, the court added that even if his claim bore a tangential relationship to an ERISA plan, it would still not be wholly preempted because independent legal duties underlie the claim. “As in Damon v. Korn/Ferry Int’l, No. CV 15-2640-R, 2015 WL 2452809, at *3 (C.D. Cal. May 19, 2015), where the plaintiff’s breach of contract and UCL claims were rooted in an employment agreement independent of an ERISA plan, Plaintiff’s claims rely solely on state law. They do not require the interpretation of an ERISA plan and therefore stem from an independent legal duty.” Thus, the court determined that the breach of contract claim does not arise from duties that originate under ERISA nor require enforcement under its civil enforcement scheme and as a result removal based on federal question jurisdiction was improper. Thus, the court remanded the action back to state court.

Pleading Issues & Procedure

Second Circuit

McCutcheon v. Colgate-Palmolive Co., No. 24-1419, __ F. App’x __, 2025 WL 1009539 (2d Cir. Apr. 4, 2025) (Before Circuit Judges Sack, Robinson, and Pérez). This decision likely represents the culmination of decade-long litigation over the way Colgate-Palmolive and related defendants calculated benefits for employees participating in Colgate’s employee retirement benefit plan. Below the district court granted summary judgment to plaintiffs on several of their claims. Defendants appealed, but last year the Second Circuit affirmed. (Your ERISA Watch covered this ruling as our case of the week in our March 22, 2023 edition). On remand two issues remained: what interest rate were defendants required to use, and whether defendants had to apply a pre-retirement mortality discount (“PRMD”). The district court ruled in favor of plaintiffs on both issues (as we detailed in our April 3, 2024 edition), and defendants appealed once again. Unfortunately for defendants, they fared no better this time around in this succinct decision from the Second Circuit. The appellate court resolved the PRMD issue first, ruling against defendants on procedural grounds. It stated that defendants could not assert any arguments regarding a PRMD because that issue had already been decided by the first district court decision and subsequent appeal. Thus, the district court was “barred ‘from reopening the issue on remand’…and it properly declined to do so.” As for the proper interest rate, defendants’ argument “suffers from the same flaw.” The Second Circuit ruled that “Defendants have raised this new argument too late. This contention was squarely ‘ripe for review’ when this Court considered Defendants’ sophisticated arguments concerning the applicable projection rate the first time around, and we are not inclined to entertain it now.” As a result, defendants were not entitled to “a second bite at the projection-rate apple,” and thus the Second Circuit affirmed the district court’s decision in its entirety.

Ninth Circuit

Sabana v. CoreLogic, Inc., No. 8:23-cv-00965-HDV-JDE, __ F. App’x __, 2025 WL 985111 (9th Cir. Apr. 2, 2025) (Before Circuit Judges Rawlinson and Smith and District Judge Jed S. Rakoff). Plaintiff Danny Sabana sued his former employer, CoreLogic, Inc., and the committee of its 401(k) Plan under ERISA alleging mismanagement of the plan. Mr. Sabana argues that defendants breached their fiduciary duties to participants by: (1) causing the participants to pay excessive recordkeeping fees; (2) retaining high cost share class investment options despite available lower fee options; and (3) retaining underperforming investment options. Defendants moved to dismiss the complaint. The district court granted defendants’ motion and dismissed the action with prejudice and without leave to amend. It concluded that Mr. Sabana does not have Article III standing and that amendment would be futile. Mr. Sabana appealed the district court’s dismissal to the Ninth Circuit. In this no-nonsense decision the Ninth Circuit reversed and remanded with instructions to permit Mr. Sabana an opportunity to amend. It said the district court’s dismissal with prejudice under Rule 12(b)(1) was in error, “because jurisdictional dismissals pursuant to Fed. R. Civ. P. 12(b)(1) must be entered without prejudice.” The Ninth Circuit was persuaded that there is a possibility Mr. Sabana could amend his complaint to show that he suffered an injury in fact, especially as he alleges that the overall reduction in recordkeeping fees would proportionally reduce every participant’s fee allocation. “Plaintiff’s theory of standing is not futile on its face and therefore leave to amend should have been granted to allow him to amend the complaint.” Moreover, the court of appeals stressed its long-held stance that leave to amend should be “freely given when justice so requires.” That preference for permissive grant of leave to amend, it added, “is particularly strong where, as here, plaintiff was never given any opportunity to amend his complaint.” The Ninth Circuit therefore reversed and instructed the lower court to allow Mr. Sabana the opportunity to amend his complaint to attempt to establish he has standing to sue.

Provider Claims

Second Circuit

Cooperman v. Empire HealthChoice HMO, Inc., No. 1:24-cv-00866 (JLR), 2025 WL 950675 (S.D.N.Y. Mar. 28, 2025) (Judge Jennifer L. Rochon). In this provider case Dr. Ross Cooperman and the entity through which he practices, Ross Cooperman M.D., LLC, seek higher reimbursement for medically necessary breast reconstruction surgery Dr. Cooperman provided to a patient covered by one of Anthem’s health benefit plans. Dr. Cooperman alleges that Anthem paid only a tiny fraction of what the practice was entitled to for the services rendered to the patient. Dr. Cooperman and his practice assert a claim under Section 502(a)(1)(B) of ERISA, as well as two state law claims for breach of implied-in-fact contract and unjust enrichment. The Anthem defendants moved to dismiss the complaint for failure to state a claim. Anthem argued that Dr. Cooperman lacks statutory standing to sue under ERISA in light of the plan’s anti-assignment provision. Additionally, Anthem maintains that the two state law causes of action are expressly preempted by ERISA. The court agreed as to both matters. First, the court found that the plan incorporates a clear, not contradictory, and unambiguous anti-assignment provision. The practice argued that its claim falls squarely within the surprise bill exception to the anti-assignment provision, but the court did not agree. Instead, it held that the complaint’s allegations clearly foreclose the application of this exception. Dr. Cooper and his practice also argued that Anthem waived its right to enforce the anti-assignment provision. To the extent plaintiffs relied on Anthem’s direct payment to the practice to argue waiver, the court flat-out rejected this argument, particularly as the terms of the plan authorize the administrator to make direct payments to the provider, and because Anthem continued to correspond directly with the patient. Plaintiffs insisted that the facts it alleges about the administrator’s course of conduct here went beyond direct payments. Even so, the court found that nothing about the pleaded course of dealing between Anthem and the practice raised a plausible inference of waiver, as nothing cited in the correspondence between the parties was in any way abnormal. “Indeed, courts in this District have routinely found similar conduct insufficient to give rise to a plausible inference of waiver even at the motion to dismiss stage.” Moreover, the court concluded that the lack of extraordinary circumstances alleged in the complaint was insufficient to plausibly infer that Anthem is estopped from enforcing the plan’s anti-assignment provision. For all these reasons, the court found that the plan’s provision banning assignment is enforceable and granted the motion to dismiss the ERISA claim. The court then looked at the two state law claims. It agreed with Anthem that both claims are expressly preempted by ERISA, as they are intertwined with the terms of the plan. Plaintiffs argued that their case is a classic “rate of payment” dispute, and therefore falls outside the umbrella of ERISA preemption. But the court was not convinced. It said that the benefit conferred is a benefit under the plan and that the parties dispute the “right to full payment under the terms of the ERISA plan.” The court therefore concluded that this case goes beyond a simple analysis of rate calculation and requires the interpretation of the terms of the plan. Thus, the court determined that neither the implied-in-fact contract claim nor the unjust enrichment claim could be resolved independent of the ERISA-governed plan and that both are therefore expressly preempted by the statute. Finally, the court made clear that it would grant Dr. Cooperman and his practice leave to file an amended complaint as this case is in a relatively early stage, there has been no undue delay by plaintiffs, and there is no apparent unfair prejudice to Anthem.

Remedies

Ninth Circuit

Ehrlich v. Hartford Life and Accident Ins. Co., No. 20-cv-02284-JST, 2025 WL 948127 (N.D. Cal. Mar. 28, 2025) (Judge Jon S. Tigar). Plaintiff Steven Ehrlich filed this action to challenge defendants Hartford Life and Accident Insurance Company and Aetna Life Insurance Company’s termination of his long-term disability benefits. On August 8, 2024, the court found that defendants abused their discretion in terminating Mr. Ehrlich’s benefits. The court also found that the administrative record contained ample reliable evidence that Mr. Ehrlich was physically impaired and that his physical impairments were the result of a range of physical conditions and not a mental illness. (Your ERISA Watch covered the court’s order entering summary judgment in favor of Mr. Ehrlich on his claim for benefits in our August 21, 2024 issue). In that decision the court declined to order a remedy because the parties had not briefed the issue. It ordered the parties to meet and confer regarding the appropriate remedy for Mr. Ehrlich’s claim for benefits and to submit briefing setting forth their respective positions on the matter. The parties did so. Mr. Ehrlich argued that the appropriate remedy is an order requiring defendants to pay him retroactive benefits from the date when his benefits were terminated through the date of judgment in this action. Defendants argued that the appropriate remedy is a remand to them for further administrative review. In this decision the court ordered defendants to reinstate the benefits from the date of termination through the date of judgment. The court determined that this remedy was appropriate under the Ninth Circuit’s decision in Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154 (9th Cir. 2001), in which the court held that retroactive reinstatement of benefits through the date of judgment is the appropriate, “equitable” remedy for a claim for benefits under ERISA where, “but for [the insurer’s] arbitrary and capricious conduct, [the insured] would have continued to receive the benefits or where there [was] no evidence in the record to support a termination or denial of benefits.” Such was the case here. As noted, the court concluded last August that defendants abused their discretion in terminating the long-term disability benefits and found that Mr. Ehrlich would have continued to receive his benefits based on a variety of disabling physical conditions absent the arbitrary and capricious conduct by the defendants. The court noted that it had not found that defendants abused their discretion by misconstruing the terms of the policy or by applying the wrong standard in making a benefit determination. Accordingly, the court agreed with Mr. Ehrlich that under Grosz-Salomon it was required to order the reinstatement of benefits under any standard of review. The court found defendants’ arguments to the contrary unpersuasive and foreclosed by Grosz-Salomon.

Retaliation Claims

Eighth Circuit

Covington v. Bi-State Dev. Agency of the Mo.-Ill. Metro. District, No. 4:23 CV 1581 RWS, 2025 WL 1000575 (E.D. Mo. Apr. 3, 2025) (Judge Rodney W. Sippel). This case is a wrongful termination action brought by a former employee of the interstate transit agency Bi-State Development Agency of the Missouri-Illinois Metropolitan District. Most of the facts of the case are undisputed. Plaintiff Troy Covington worked for Bi-State as a transit service manager and dispatcher. The job required her to have regular, reliable, and predictable attendance. But Ms. Covington was not well. A series of gastrointestinal issues resulted in 140 absences over 18 months. Ms. Covington requested an accommodation for frequent bathroom breaks, which Bi-State provided. The last day Ms. Covington reported to work was October 9, 2022. That same week, she applied for long-term disability benefits from her employer’s group disability policy. She represented in her claim that she would not ever be able to work. On October 26, 2022, Bi-State terminated Ms. Covington. To date she receives long-term disability benefits and has not been employed. In her action against Bi-State Ms. Covington maintains that the agency wrongfully terminated her due to disability and failed to engage in an interactive process regarding accommodations in violation of the Americans with Disabilities Act (“ADA”). In addition, Ms. Covington alleges that Bi-State terminated her in retaliation for use of the ERISA-governed disability plan in violation of Section 510. Bi-State moved for summary judgment on both claims. The court granted its motion here. First, the court agreed with the agency that Ms. Covington was not a “qualified individual” under the ADA because she could not perform the essential job function of attendance. Putting that aside, the court also agreed with Bi-State that it did make accommodations for Ms. Covington upon request and that it terminated her for non-discriminatory reasons, namely the excessive unexcused absences and the failure to maintain communications with management while taking paid time off. The court thus granted summary judgment in favor of Bi-State on the claim under the ADA. It did so with regard to Ms. Covington’s ERISA retaliation claim as well. The court found that Ms. Covington’s allegations that she was terminated in retaliation for applying for disability benefits simply had no support in the record. Rather, the facts showed that Ms. Covington is receiving disability benefits to this day. Regardless, the court also referred to its earlier stated opinion that Bi-State fired Ms. Covington for a legitimate and non-discriminatory reason. As a result, the court found that Bi-State had not violated ERISA and entered judgment in its favor on the Section 510 claim. Finally, as this decision disposed of all of Ms. Covington’s claims, the court ordered the case to be dismissed with prejudice.

Statute of Limitations

Second Circuit

Knight v. IBM Pers. Pension Plan, No. 24-1281, __ F. App’x __, 2025 WL 1009175 (2d Cir. Apr. 3, 2025) (Before Circuit Judges Carney, Park, and Kahn). This is a putative class action by participants of the International Business Machines Corporation (“IBM”) Personal Pension Plan who allege that IBM and related defendants violated ERISA’s anti-forfeiture, actuarial equivalence, and joint and survivor annuity rules by using inappropriate mortality tables. In April of 2024 the district court granted defendants’ motion to dismiss, with prejudice, ruling that all of plaintiffs’ claims were time-barred. The district court concluded that plaintiffs’ clocks started running when they were provided with Pension Projection Statements which set forth the mortality tables defendants were using. (Your ERISA Watch covered this ruling in our April 10, 2024 edition.) Plaintiffs appealed, and in this very brief decision the Second Circuit reversed. The appellate court noted that plaintiffs did not specifically plead the dates the statements were provided to them. This by itself did not require reversal; the court agreed that the district court “was permitted to find that the pension projection statements were incorporated by reference” and could identify the dates that way. However, the Second Circuit ruled that the district court went too far by “relying on the accuracy of the dates in those statements without providing the parties with the opportunity to submit additional materials.” In short, while the district court could accept that a pension projection statement existed, it was “inappropriate to treat the contents of that document as true” at the motion to dismiss stage. As a result, the appellate court sent the case back to the district court, ruling that “the better course would have been for the district court to ‘convert the motion to one for summary judgment’ and allow the parties an opportunity ‘to conduct appropriate discovery and submit the additional supporting material contemplated by Rule 56.’”