Navarro v. Wells Fargo & Co., No. 24-cv-3043 (LMP/DTS), 2025 WL 897717 (D. Minn. Mar. 24, 2025) (Judge Laura M. Provinzino)

We have been watching cases alleging that fiduciaries are mismanaging prescription drug benefit programs at Your ERISA Watch for several years now. These lawsuits contend that plan sponsors and fiduciaries of ERISA-governed healthcare plans are breaching their fiduciary duties by contracting with middlemen called pharmacy benefit managers (“PBMs”), with little oversight, in a way that harms plan participants.

The three big PBMs are CVS Caremark, Optum Rx, and as relevant here, Express Scripts, Inc. Employers hope that they are hiring a PBM to help them save money on prescription drugs, but these lawsuits contend that the reality is quite different and money may not be saved at all.

PBMs are conflicted. Part of the reason why is the way these publicly traded for-profit companies are molded. PBMs “generate profit through some mix of spread pricing, rebates they negotiate with pharmacies, administrative fees charged to the plans they serve, and ownership of their own pharmacies.”

Although there are differences between the lawsuits – including which PBM is at issue, and the particulars of the plan’s contracts with it – they share one fundamental allegation: participants are paying too much for prescription drugs. The PBM cases allege that because of their obvious conflicts of interest PBMs are actually driving costs up. One way they are doing this is by overcharging for drugs, sometimes to a staggering degree.

Four former employees of Wells Fargo & Company, who participated in the Wells Fargo &. Company Health Plan, allege in this action that Wells Fargo mismanaged its prescription drug benefits program with Express Scripts, resulting in plan participants paying substantially more in premiums and out-of-pocket costs for prescription drugs than they would have absent the alleged mismanagement. Plaintiffs maintain that Express Scripts charges the Wells Fargo Plan more than twice as much on average for prescription drugs. One reason why is that the agreement between the Plan and Express Scripts requires participants to acquire generic specialty drugs exclusively from its wholly owned pharmacy, Accredo. The plaintiffs alleged that in some particularly egregious examples, the markup of Accredo’s pricing is more than 2,000% over the cost of an uninsured person filling the same prescription at other retail pharmacies.

On top of drug markups, plaintiffs allege that the administrative fees Express Scripts charges to the Plan exceed, by more than twice as much, the fees paid by other large plan sponsors for substantially comparable or equivalent services. Plaintiffs allege that Wells Fargo should have wielded its power to negotiate better terms and get a better deal for the participants.

Plaintiffs asserted claims under ERISA Sections 502(a)(2) and (a)(3) alleging Wells Fargo breached its fiduciary duties and caused the Plan to engage in a prohibited transaction with a party in interest. Plaintiffs sought various forms of equitable and monetary relief, including recovery of plan losses, restitution, disgorgement, surcharge, and injunctive relief, including the removal of plan fiduciaries, the appointment of an independent plan fiduciary, and the replacement of Express Scripts as the Plan’s PBM.

Wells Fargo moved to dismiss plaintiffs’ complaint in its entirety under Federal Rules of Civil Procedure 12(b)(1) and (b)(6). In this decision the court did not even consider the motion to dismiss for failure to state a claim upon which relief may be granted, as it agreed with Wells Fargo that plaintiffs lacked Article III standing. It found plaintiffs were unable to show concrete individual harm, causation, and redressability.

Plaintiffs contended that (1) they were harmed in the form of high out-of-pocket costs, increased premiums for their healthcare coverage, and exorbitant fees to Express Scripts, (2) the harms are traceable to Wells Fargo’s fiduciary breaches, and (3) the relief requested will redress these harms. Wells Fargo responded by emphasizing that plaintiffs did not allege that they failed to receive the benefits to which they were entitled while they were members of the plan. It therefore argued that under the Supreme Court’s 2020 decision in Thole v. U.S. Bank,plaintiffs had not suffered an injury and thus had no standing.

The court did not wholly agree. It did not read Thole to hold, as a matter of law, that a plaintiff suing a fiduciary of an ERISA-governed defined-benefit health plan cannot ever establish standing on a theory of harm premised on excessive out-of-pocket costs and high premiums. The court agreed with plaintiffs that the type of individual harm they alleged could, under certain circumstances, constitute injury-in-fact for standing purposes. To find otherwise, the court worried, could result in fiduciaries of ERISA plans flagrantly violating the federal statute “while effectively enjoying immunity from any liability so long as participants receive the benefits to which they are entitled.”

Still, despite agreeing in theory with plaintiffs’ argument, the court nevertheless concluded that the actual facts plaintiffs alleged could not satisfy Article III’s standing requirements because their alleged harm was speculative and ultimately not redressable.

The court defined plaintiffs’ theory of harm as follows: “had Wells Fargo more closely monitored the Plan’s prescription drug costs and negotiated a better deal with ESI [Express Scripts, Inc.], replaced ESI with a different PBM, or adopted a different model altogether, the Plan would have paid less in administrative fees and other compensation to ESI, which would have resulted in lower participant contributions and out-of-pocket costs.” It said that this theory while “tempting at first blush…withers upon closer scrutiny.”

First, the court tackled the plan-wide theory of harm. The court found the connection between what the participants were required to pay in contributions and out-of-pocket costs, and the administrative fees the Plan was required to pay to Express Scripts, “tenuous at best.” The Plan terms not only vest Wells Fargo with the sole discretion to set participant contribution rates but also authorize Wells Fargo to require participants to fund all plan expenses, not just expenses related to their own individual benefits. Taken together, these terms led the court to believe it was speculative that the excessive fees the Plan paid to Express Scripts had any effect at all on plaintiffs’ contribution rates or out-of-pocket costs for prescriptions, particularly as participant contribution amounts may be affected by several other factors having nothing to do with prescription drugs.

According to the court, plaintiffs’ allegations regarding the markups of prescription drugs failed to alter this conclusion or establish a connection between plaintiffs’ increased costs and Express Scripts’ administrative fees. What the court was getting at was that there were “simply too many variables in how Plan participants’ contribution rates are calculated to make the inferential leaps necessary to elevate Plaintiffs’ allegations from merely speculative to plausible.”

The court’s fundamental point was this: even if plaintiffs prevailed in this case and received all the relief they requested, Wells Fargo could still increase their contribution amounts under the terms of the plan without violating ERISA. And the court was not convinced that it had the authority to alter the terms of the Plan to expressly require Wells Fargo to reduce participants’ contribution amounts. Thus, the court concluded plaintiffs’ theory of redressability could not overcome the fact that the plan grants Wells Fargo the sole discretion to set participant contribution rates. “Simply put, while Plaintiffs’ requested relief could result in lower contribution rates and out-of-pocket costs, there is no guarantee that it would, and ‘pleadings must be something more than an ingenious academic exercise in the conceivable’ to meet the standing threshold.” As a result, the court agreed with Wells Fargo that plaintiffs’ plan-wide theory of harm was rooted in speculation and conjecture and thus insufficient to confer Article III standing.

This left the court with plaintiffs’ individual claims. While these did not suffer from the same issues as their representative claims on behalf of the Plan, the court nevertheless determined that plaintiffs failed to establish standing for these claims too “both because they have not alleged concrete individual harm and because these Plaintiffs ‘have no concrete stake in the lawsuit’ regarding any prospective injunctive relief.”

In the end, the court was sympathetic to plaintiffs’ larger concern that prescription drug costs are too high. But the court’s sympathy could not overcome its view that plaintiffs’ allegations were insufficient to establish Article III standing. As a result, the court granted Wells Fargo’s motion to dismiss plaintiffs’ complaint pursuant to Rule 12(b)(1). Notably, the court’s dismissal was without prejudice, so it is possible plaintiffs may be able to amend their complaint to address the court’s standing concerns. If they ultimately cannot, that would raise some serious questions about the path forward for these types of PBM cases.

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

Attorneys’ Fees

Eleventh Circuit

Johnson v. Russell Invs. Tr. Co., No. 22-21735-Civ-Scola, 2025 WL 928853 (S.D. Fla. Mar. 27, 2025) (Judge Robert N. Scola, Jr.). Plaintiff Ann Johnson sued Royal Caribbean Cruises Ltd., the Royal Caribbean Cruises Investment Committee, and Russell Investment Trust Company under ERISA as the representative of a class of similarly situated participants in the Royal Caribbean Cruises Ltd Retirement Savings Plan for losses incurred as a result of a series of allegedly bad and self-interested investment decisions. On January 31, 2025, the court granted summary judgment in favor of defendants on all claims against them. (You can find our summary of that decision in Your ERISA Watch’s February 5, 2025 edition). As the prevailing parties, defendants moved for an award of various costs related to witness depositions under Federal Rule of Civil Procedure 54(d)(1). Ms. Johnson objected, in part. In this decision the court granted in part and denied in part the motions to tax costs. The Royal Caribbean defendants sought to recover $33,318.25 for a host of deposition-related costs, as well as an additional $80 in expert witness deposition attendance costs. Russell sought to recover $22,215.45 for deposition transcripts, deposition exhibits, and video recordings of depositions. First, the court awarded both defendants the costs associated with the transcriptions of the depositions, as Ms. Johnson did not dispute that they are entitled to these costs. The court awarded Royal Caribbean $22,205.15 and Russell $13,916.70 for the transcription services. Second, the court awarded defendants additional reimbursement for the amounts they paid for copies of the exhibits used in the thirteen depositions noticed by Ms. Johnson. Ms. Johnson did object to this aspect of the requested costs, stating that these exhibits should be excluded because they were documents the defendants had produced themselves in discovery and were purely for the convenience of counsel. The court ruled that “regardless of where the underlying documents originated from, it would seem to the Court that the exhibits introduced during the depositions, by Johnson – the deposing, nonprevailing party – would be essential components of creating an accurate record of the deposition testimony.” Thus, the court awarded Royal Caribbean $1,779.75 and Russell $1,666.75 for the costs they paid for copies of exhibits that accompanied the deposition testimony. Third, the court denied the request for reimbursement of the costs associated with video recordings of the depositions. The court agreed with Ms. Johnson that defendants could not establish why both the video recording and the transcript services were necessary, and that she should not bear the burden of paying for them both. Fourth, the court awarded Royal Caribbean its $80 for the appearance of its two expert witnesses for deposition, as 28 U.S.C. § 1920(3) clearly provides this is a taxable cost. Finally, the court denied Royal Caribbean’s remaining costs, tacked onto its motion, because the court found it had improperly sandbagged Ms. Johnson by waiting to raise arguments about these amounts and issues for the first time in reply. In sum, the court granted the motions in part and denied them in part, ultimately awarding Royal Caribbean $24,064.90 in costs and Russel $15,583.45 in costs, plus interest, to be paid by Ms. Johnson.

Breach of Fiduciary Duty

Fourth Circuit

Kelly v. Altria Client Servs., No. 3:23-cv-725-HEH, 2025 WL 918363 (E.D. Va. Mar. 26, 2025) (Judge Henry E. Hudson). This case arises from events that took place over a couple of weeks in November of 2020, right around the time of the U.S. presidential election. A month earlier, plaintiff Richard D. Kelly, in consultation with financial advisors at Goldman Sachs, decided he wanted to liquidate the funds from his ERISA-governed 401(k) account in the Altria Group Inc. Deferred Profit-Sharing Plan to take advantage of what he predicted would be post-election fluctuations in the stock market, giving him the opportunity to invest his cash assets to receive a high return, somewhere in the range between $259,931 and $349,625. On November 2, 2020, Mr. Kelly spoke to two representatives at Fidelity Workplace Services, LLC, which operates as the benefits center for the Altria Plan. Mr. Kelly told the representatives that he wanted to do two things: (1) transfer the non-Altria Group stock in-kind and (2) sell his Altria Group stock and index fund and rollover the resulting sales proceeds to his account at Goldman Sachs. He was told it was not possible to electronically transfer assets directly from the ERISA plan to his account at Goldman Sachs and that he could either receive a physical check in the mail or open two retail accounts with Fidelity, a personal IRA and a brokerage account, and transfer his plan assets into these two accounts before electronically transferring them to Goldman Sachs. Neither option was particularly speedy, and for Mr. Kelly, time was of the essence. When pressed, the representative stated that the second method would be the fastest way to give him access to the assets and explained that the sale of the Altria stock and index fund share would only take a couple of days to settle and rollover into the two Fidelity accounts. After the Fidelity representatives executed the sale of Mr. Kelly’s stock and created the two new Fidelity accounts, the process slowed and the information Mr. Kelly was given changed. On November 5, Mr. Kelly was eager to reinvest his money. He followed up with a new representative at Fidelity who explained that everything would take a bit longer, ultimately quoting a much more conversative timeline of ten business days. Fidelity did not explain to Mr. Kelly during any of its communications with him that all of his transactions were “connected at the hip” and that they were dependent on the completion of the entire transaction. Ultimately, the rollover was not completed until November 12, 2020, at which time Mr. Kelly says he was unable to take advantage of the stock market fluctuations to turn his desired profit. Mr. Kelly later began a formal claim process for benefits under his plan in which he argued that Fidelity misinformed him about the process and the timeline, he was not provided with the transcripts of the telephone calls, and that those transcripts support his assertion that he was misadvised. The benefits committee denied the claim and upheld the denial on appeal. It determined that Fidelity completed the rollover in the time frame its representative quoted in the November 5 phone call, and that Mr. Kelly had suffered no damages because even under his own account of the promises of the November 2 call, the soonest he would have had access to his funds was November 9, during which time the exchange-traded fund he relied on to provide his damages had actually decreased. Mr. Kelly disagreed with this decision. He sued Altria and Fidelity under ERISA asserting claims to enforce and clarify his benefits, a claim alleging fiduciary breach, and a claim seeking statutory penalties for failure to provide the plan’s Administrative Services Agreement with Fidelity after he requested it in writing. The parties all moved for summary judgment in their favor. In this decision the court entered judgment in favor of defendants on all claims. To begin, the court agreed with the Altria defendants that they did not abuse their discretion when they denied Mr. Kelly’s claim for benefits. Rather, the court held that Altria used a deliberate and principled reasoning process and its decision was reasonable, supported by substantial evidence, and not the result of any conflicts of interest. Moreover, the court was similarly persuaded that Mr. Kelly could not show he suffered any harm by Fidelity’s purported delay, and that this “lack of substantiated damage was rightly a strong factor in the MCEB’s decision.” For these reasons, the court upheld the administrator’s decision and granted summary judgment as to count one in favor of the Altria Defendants. Turning to the fiduciary breach claim, the court shared defendants’ reservations about whether Fidelity functioned in a fiduciary capacity at all. “Fidelity was not acting in any fiduciary capacity when it advised Plaintiff what mechanisms were available to send his assets from the DPS Plan to a Goldman Sachs account; instead, Fidelity was merely performing routine ministerial functions, which do not entail any fiduciary status.” But even putting that aside, the court did not believe that Fidelity breached any purported duty, as it corrected any false impressions it may have given Mr. Kelly about an expedited timeline and never implied among any of its varying estimates that the transactions would occur overnight. Thus, the court determined that Mr. Kelly failed to show there was any material breach of a fiduciary duty and entered judgment to defendants on count two as well. Finally, the court disagreed with Mr. Kelly that the Administrative Services Agreement in this instance qualifies as a document under 29 U.S.C. § 1024(b)(4) upon which the Deferred Profit-Sharing Plan was operated or established. The court therefore determined that Altria was under no obligation to provide the document to Mr. Kelly upon his request. As a result, the court granted Altria’s motion for summary judgment on the statutory penalties claim as well.

Fifth Circuit

Wagner v. Hess Corp., No. 6:24-CV-004-H, 2025 WL 888428 (N.D. Tex. Mar. 21, 2025) (Judge James Wesley Hendrix). Plaintiff Joshua Wagner has had a difficult time moving past the pleading stage in this putative class action asserting claims that defendants breached their fiduciary duties to the participants of the Hess Corporation Employees’ Savings Plan by selecting excessively expensive investment options. Despite the court previously granting defendants’ motions to dismiss the complaint, discovery has been ongoing, some of which has revealed relevant information. With this discovery in hand, Mr. Wagner moved for leave to file a third amended complaint to provide additional facts supporting his claim that defendants breached their duties by choosing investment options with higher fees than comparable alternatives. Defendants opposed Mr. Wagner’s motion and moved to dismiss his second amended complaint. Thanks to the court’s decision here, Mr. Wagner finally got past the pleading stage, at least in part. The court granted Mr. Wagner’s motion for leave to file his third amended complaint and granted in part and denied in part defendants’ motion to dismiss that complaint. Mr. Wagner’s complaint asserts three particular categories of investments which it alleges were overpriced and should have been replaced: (1) T. Rowe Price retail share class target-date mutual funds; (2) single asset class investment options (other mutual funds); and (3) Vanguard index funds that track a market index such as the S&P 500. The court permitted the share class claims of imprudence and failure to monitor go forward, but dismissed, this time with prejudice, the fiduciary breach claims relating to the other challenged investments, as well as the co-fiduciary breach claim. Before it got there, however, the court discussed Mr. Wagner’s standing to bring his suit. Defendants argued, and the court agreed, that Mr. Wagner does not have standing to pursue injunctive relief as there is no dispute that he is a former plan participant who took his last distribution from the plan and therefore faces no threat of an imminent prospective injury. Although defendants did not challenge any other aspect of Mr. Wagner’s standing, the court nevertheless confirmed that he otherwise has standing to pursue his claims because he alleges that the fiduciary breaches by the defendants caused him monetary harm in the form of diminution of the value of his retirement assets, and because he alleges that he was invested in each type of investment for which he alleges the defendants utilized an imprudent process in selecting, “so he has a personal interest in each variety of alleged breach.” Accordingly, the court determined that Mr. Wagner could pursue all of his claims, except his request for injunctive relief for lack of standing. Next, as stated above, the court granted Mr. Wagner’s motion for leave to amend under Federal Rules of Civil Procedure 16 and 15, finding good cause exists to permit the amendment. The court then stipulated that it would consider the motion to dismiss as applied to the third amended complaint. The court first tackled the retail class claims. It found that Mr. Wagner provided meaningful benchmarks for the target-date funds because he sufficiently alleged that the only meaningful difference between the retail mutual funds versus the institutional collective trusts were the costs associated with the two investments as the two options otherwise have “‘the same portfolio management team, glidepath, subasset-class exposure, tactical allocation overlay and underlying investments.’ Thus, the plaintiff asserts, the collective trusts and mutual funds are effectively ‘the same investment in a different wrapper’ with a lower expense ratio.” Accepting these allegations as true, the court found they were enough to plausibly infer defendants acted imprudently and failed to monitor the other fiduciaries. Mr. Wagner’s claims as they related to the other mutual funds and index funds met a different fate. The court stated several times that fiduciaries retain “considerable discretion” under ERISA and are given a wide latitude to make investment decisions. In fact, fiduciaries are not required to pick the lowest-cost fund of a certain time “where other factors counsel selecting a different fund.” Applying those principles here, the court found that plaintiffs’ allegations relating to the other mutual funds and the index funds simply contend that cheaper similar options existed which defendants did not invest in. To the court, these allegations failed to raise a plausible inference that a prudent fiduciary assessing the plan’s investment options would have determined that the plan’s mutual funds and index funds were unreasonably expensive and chosen Mr. Wagner’s preferred comparators instead. Thus, the court dismissed the fiduciary breach claims as they related to these other challenged investments. Finally, the court dismissed the claim for co-fiduciary liability. It said that this claim was nothing more than a bare recitation of the elements of the cause of action, supported by mere conclusory statements. Based on the foregoing, the court granted in part and denied in part the motion to dismiss the third amended complaint and this fiduciary breach action will finally proceed to the next phase.

Seventh Circuit

Dale v. NFP Corp., No. 20-cv-02942, 2025 WL 885690 (N.D. Ill. Mar. 21, 2025) (Judge John F. Kness). The Board of Trustees of the Northern Illinois Annuity Fund and Plan brought this action on behalf of the plan and its participants against the plan’s former administrators and investment advisors alleging they breached their fiduciary duties and engaged in prohibited transactions with parties in interest while servicing the plan by structuring investments to generate excessive direct and indirect compensation for themselves at the expense of the plan and its participants and by investing in imprudent and illiquid investments which were not in the best interest of the participants. Defendants answered and filed three counterclaims against plaintiff for indemnification, contribution, and attorneys’ fees. The Board of Trustees moved to dismiss the counterclaims, contending that defendants have no statutory basis to bring them. The court agreed and granted the motion to dismiss defendants’ asserted counterclaims with prejudice in this decision. At the outset, the court distinguished “statutory standing” and Constitutional standing under Article III. In this case, the court explained that defendants’ shortcoming was not a Constitutional standing issue, but simply that they do not have a cause of action under the statute to assert their counterclaims. The court elaborated that this distinction means plaintiff’s challenge is on the merits rather than one of a lack of subject matter jurisdiction and it would therefore treat it as such. The court then went on to discuss why it agreed with the Board of Trustees that the former fiduciaries “are not entitled to bring contribution and indemnification claims under ERISA’s definition of a fiduciary.” ERISA strictly limits the class of persons who may bring actions under it. Among that group are plan fiduciaries. The statute defines fiduciaries as any person or entity which exercises discretionary authority or control with respect to the management or administration of an employee benefit plan. In the present matter, defendants no longer meet this definition, the court held, because they are no longer in a position where they can exercise any discretionary authority over the plan. To the court, the relevant authorities on the topic “on balance, militate in favor of reading ERISA as authorizing suits only by current fiduciaries.” Accordingly, the court concurred with plaintiff that defendants have no statutory basis to sue under ERISA, and the counterclaims, therefore, must be dismissed. Last, because the court found that any amendment would be futile, it dismissed the counterclaims with prejudice.

Ninth Circuit

Dalton v. Freeman, No. 2:22-cv-00847-DJC-DB, 2025 WL 901127 (E.D. Cal. Mar. 24, 2025) (Judge Daniel J. Calabretta). Plaintiffs Connor Dalton and Anthony Samano, on behalf of themselves and a class of similarly situated participants of the O.C. Communications Employee Stock Ownership Plan (“ESOP”), bring this action under ERISA alleging fiduciary breaches. In December of 2011, the ESOP purchased shares of O.C. Communications stock for a price of $3.45 per share. Seven years later, in December of 2018, that same stock was worth $2.21 per share. In their complaint, plaintiffs allege that defendants failed to fulfill their fiduciary duties and enriched themselves through a transaction that took place in May of 2019. Less than a year after the participants were notified that shares were worth $2.21 per share, O.C. Communications sold almost all of its operating assets and liabilities to TAK Communications, CA. Inc. for $7.2 million. The $7.2 million sale price indicated that the shares were sold for $0.72 per share. According to plaintiffs no major business disruptions occurred between the 2018 appraisal and the 2019 transaction that would have caused anything like the discrepancy in valuation of the company’s assets. On December 31, 2020, O.C. Communications redeemed the ESOP’s 2,342,027 allocated shares for $750,000, which represented the lowest price yet at just $0.32 per share. In their action plaintiffs bring claims for breach of fiduciary duty under ERISA Section 404(a)(1) against the Committee members, the Board members, and the named trustee, Alerus Financial N.A., breach of co-fiduciary duty under Section 405(a)(1)-(3) against these same fiduciary defendants, and a statutory penalties claim for failure to provide information upon request in writing against the employer defendants O.C. Communications and TAK Communications. Two defendants moved to dismiss the claims against them: one of the Committee members, defendant Larry Wray, and Alerus Financial. In this decision the court granted Alerus’s motion to dismiss, granted in part Mr. Wray’s motion to dismiss, and granted plaintiffs leave to amend their complaint. The court discussed Alerus’s motion first. It agreed with Alerus that even taking plaintiffs’ factual allegations as true they were insufficient to state either a fiduciary breach or co-fiduciary breach claim as to the trustee, as the complaint fails to connect the challenged transactions to any specific failed fiduciary duty owed by Alerus and fails to establish Alerus had knowledge of the breach of another fiduciary. Nevertheless, the court noted that it is possible these shortcomings can be cured through amendment and thus permitted the participants to amend their allegations against Alerus. Next, the court discussed Mr. Wray’s motion to dismiss. Unlike with Alerus, the court found the complaint connected the challenged transactions to specific fiduciary duties owed by the members of the Committee and thus sufficiently alleged that defendant Wray breached a fiduciary duty he owed. Accordingly, the court denied Mr. Wray’s motion to dismiss the fiduciary breach claim. However, the court granted his motion to dismiss the co-fiduciary breach claim, without prejudice. Similar to its analysis of the co-fiduciary breach claim as asserted against Alerus, the court again found the co-fiduciary breach claim devoid of facts establishing that Mr. Wray had knowledge another fiduciary breached their fiduciary duty and that he failed to take reasonable efforts to remedy the breach of another fiduciary.

Class Actions

Sixth Circuit

In re AME Church Emp. Ret. Fund Litig., No. 1:22-md-03035-STA-jay, 2025 WL 900003 (W.D. Tenn. Mar. 24, 2025) (Judge S. Thomas Anderson). Clergy members and other employees of the African Methodist Episcopal Church (“AMEC”), who are participants and beneficiaries of the AMEC’s retirement plan, the Ministerial Annuity Plan of the African Methodist Episcopal Church, filed this putative class action under both Tennessee law and ERISA against the AMEC, its officials, the plan’s third-party service providers, and other fiduciaries for plan mismanagement, including embezzlement of plan funds by its former Executive Director, which resulted in at least $90 million in losses to the plan. Plaintiffs and the AMEC defendants jointly moved to dismiss the claims against defendants Bishop James Davis and Bishop Samuel Green, Sr., without prejudice, stating that they have agreed to a settlement in principle that resolves plaintiffs’ claims against the AMEC defendants. Plaintiffs have also filed a motion for preliminary approval of that settlement, which is still pending resolution. As a term of the settlement the AMEC defendants and the plan participant plaintiffs jointly agreed to move to dismiss the claims against Bishops Davis and Green. Until the court approves the settlement, plaintiffs request that dismissal be without prejudice. One of the trustee defendants, defendant Symetra, objected to the motion. Symetra stated it has concerns about certain emails that it has not yet had the time to review. Symetra’s concerns were insufficient to persuade the court that it will suffer prejudice if the Bishops are dismissed from this action, particularly as the AMEC defendants have assured the court that even if dismissed, Davis and Green will fulfil any outstanding discovery obligations. “Simply put, Symetra has presented no reason for the Court not to grant the motion.” Thus, the court granted the motion to dismiss plaintiffs’ claims as asserted against the two Bishops, without prejudice at this time.

Disability Benefit Claims

Third Circuit

Mundrati v. Unum Life Ins. Co. of Am., No. 23-1860, __ F. Supp. 3d __, 2025 WL 896594 (W.D. Pa. Mar. 24, 2025) (Magistrate Judge Patricia L. Dodge). Plaintiff Pooja Mundrati brought this action against Unum Life Insurance Company of America seeking judicial review of its denial of her claim for long-term disability benefits. Before the onset of her disability, Dr. Mundrati worked as an interventional spine physician, a type of physiatrist. She was eventually terminated from her employment and unable to continue practicing after the long-term effects of a traumatic brain injury caused by a car accident and serious issues involving her spinal cord left her with disabling physical and cognitive symptoms. The parties cross-moved for summary judgment. Dr. Mundrati argued that Unum’s decision to deny her long-term disability benefits was arbitrary and capricious because: (1) it wrongly classified her regular occupation as a physician, a light-duty position, rather than that of a physiatrist, a medium-duty position; (2) it focused on its initial denial rather than the denial of her appeal; (3) it refused to consider her vocational expert report and functional capacity examination as not “time relevant” even though no intervening event changed her condition since the end of the elimination period; (4) it failed to arrange for an independent medical examination even though the policy allowed for it; and (5) it selectively quoted from the record and ignored the opinions of treating physicians and other evidence supporting a finding of disability. Unum countered that under the deferential review standard its determination was a reasonable interpretation of the record. It therefore contended that the court should uphold its denial. In this decision the court concluded that Unum’s decision to deny benefits to Dr. Mundrati was arbitrary and capricious and therefore granted summary judgment in her favor. Agreeing with Dr. Mundrati, the court found Unum’s characterization of her position as a physician with light duty activities significant. Under the terms of the plan Unum was required to look at Dr. Mundrati’s medical specialty as it is normally performed. It was clear to the court that Unum did not do so and that this failure was an abuse of discretion. In addition, the court concurred with Dr. Mundrati that Unum abused its discretion by rejecting crucial pieces of evidence as “not time relevant” even though they related back to her original injury without any evidence of an intervening event. To the court, Unum could not justify its decision to exclude the vocational report and the FCE as not time-relevant. Nor could the court disagree with Dr. Mundrati that it was problematic Unum’s reviewing doctor ignored critical evidence, including the opinions of her treating physicians. While Unum was not required to accept the opinions of the treating physicians, the court found Unum’s “decision to rely on [its own doctor’s] unreasonable and selective paper review over [Dr. Mundrati’s] treating physicians is another factor to take into account in determining whether its review was arbitrary and capricious.” Finally, the court considered Unum’s decision not to order an independent medical exam, and found that coupled with everything else it further supported Dr. Mundrati’s contention that Unum’s denial of her appeal could not withstand even deferential scrutiny. For these reasons, the court granted Dr. Mundrati’s motion for summary judgment and denied Unum’s motion for summary judgment.

Eleventh Circuit

Pankey v. Aetna Life Ins. Co., No. 6:23-cv-1119-WWB-UAM, 2025 WL 938510 (M.D. Fla. Mar. 28, 2025) (Judge Wendy W. Berger). This case is a long-term disability benefits dispute between plaintiff Judson Pankey and defendant Aetna Life Insurance Company. Each party moved for summary judgment in their favor. Magistrate Judge Embry J. Kidd issued a report and recommendation in which he recommended the court enter summary judgment in favor of Mr. Pankey and against Aetna. “Magistrate Judge Kidd recommends that the Court find Defendant’s decision to terminate Plaintiff’s long-term disability (“LTD”) benefits was arbitrary and capricious because: (1) Defendant only had the authority to suspend or adjust Plaintiff’s benefits under the terms of the applicable employee welfare benefit plan (“Plan”), and (2) the decision to terminate Plaintiff’s LTD benefits was inconsistent with Defendant’s past practice and, therefore, unreasonable.” Aetna filed an objection to the Magistrate’s report, raising three objections. First, Aetna argued that the report misconstrues the terms of the plan, and fails to read relevant provisions of the plan as part of a whole. The court agreed. The court held that the Magistrate failed to consider all of the related terms of the relevant termination provision and therefore improperly interpreted the language to mean that Aetna lacked discretion to terminate benefits because of insufficient proof. Accordingly, the court sustained this objection. Next, Aetna argued that Judge Kidd misapplied the applicable legal standard under ERISA by failing to give deference to its decision to terminate Mr. Pankey’s benefits. The court again agreed. It concurred that the Magistrate had improperly substituted his own judgment for that of Aetna. Aetna’s interpretation of the plan to allow for the termination of benefits absent sufficient proof was found by the court to be within its discretion and entirely reasonable. The court therefore sustained this objection as well. It also sustained Aetna’s final objection to the Magistrate’s report – that the report mistakenly states Aetna never terminated Mr. Pankey’s benefits in the past for failure to provide personal tax returns. The court said the record belies this conclusion. The court’s rulings sustaining Aetna’s objections to the Magistrate’s report ultimately shaped its thinking on summary judgment answering the dispositive question of whether Aetna’s decision was arbitrary and capricious. Upon review, the court was convinced that Aetna’s interpretation that the plan required Mr. Pankey to demonstrate financial proof of disability, and its conclusion that he failed to provide the proof requested, were reasonable and not an abuse of discretion. The court accordingly affirmed Aetna’s decision and granted its motion for summary judgment. For these reasons, the court sustained Aetna’s objections, adopted the Magistrate’s report to the extent it was consistent with this order and rejected it in all other respects, denied Mr. Pankey’s motion for summary judgment, and granted Aetna’s motion for summary judgment.

Discovery

Second Circuit

Sacerdote v. Cammack Larhette Advisors, No. 24-CV-3129 (AT) (VF), 2025 WL 893720 (S.D.N.Y. Mar. 24, 2025) (Magistrate Judge Valerie Figueredo). Plaintiff Alan Sacerdote filed this fiduciary breach action in 2017 alleging that the individuals managing New York University’s ERISA-governed retirement plans violated their duties by recommending the plans include costly and poorly performing investment options “tainted by the financial interest” of TIAA-CREF and Vanguard, the plans’ two recordkeepers. In 2018, Mr. Sacerdote amended his complaint to add Cammack Larhette Advisors, LLC, as a defendant. On February 8, 2024, Cammack filed a motion for a protective order to preclude testimony on eight topics concerning its finances during a Rule 30(b)(6) deposition of the company. While that motion was pending, a former employee of Cammack, non-party Jeffrey Levy, sat for a deposition taken by counsel for Mr. Sacerdote. Less than an hour into Mr. Levy’s deposition, his attorney adjourned the deposition and stated that they were moving for a protective order after plaintiff’s counsel asked a question that Mr. Levy’s attorney contended was the subject of the pending motion for a protective order. That question was “who was in charge of Cammack Larhette Advisors?” Presently before the court was Mr. Levy’s motion for a protective order under Federal Rules of Civil Procedure 30 and 45 to terminate his deposition. The court denied the motion in this order. The court remained resolute in its position that the question asked of Mr. Levy was not asked in bad faith or to annoy, embarrass, or oppress him, and as such, did not meet any of the exceptions under Rule 30(d)(3) to terminate or limit the deposition. The normal practice under the circumstances, the court explained, is to allow the deposition to go forward and have the parties complete as much of it as possible. Mr. Levy’s attorney should have posed an objection, allowed him to answer the question, permitted Mr. Sacerdote’s counsel to ask additional questions, and after the completion of the deposition, move for the court to resolve any outstanding dispute to either compel answers or to enforce privileges and objections. Furthermore, the court disagreed with Mr. Levy that it would be unduly burdensome to allow his deposition to proceed now. Any hardship, the court stated, was a problem of his own making, the result of the improper termination of the deposition. “It would thus be unfair to now entertain complaints that reconvening creates an undue burden.” Accordingly, the court denied Mr. Levy’s motion for a protective order terminating his deposition.

ERISA Preemption

Second Circuit

Melito v. Royal Bank of Can., No. 24-CV-5061 (JGLC), 2025 WL 919639 (S.D.N.Y. Mar. 25, 2025) (Judge Jessica L. Clarke). Plaintiff Christopher Melito is a former employee of Royal Bank of Canada Capital Markets, LLC. In 2010, during his employment at the bank, Mr. Melito suffered from a series of health issues, ultimately culminating in a stroke while on a subway to work. Mr. Melito applied for short term disability benefits under his employer’s disability plan offered by Cigna and administered by Life Insurance Company of North America (“LINA”). On October 25, 2010, Mr. Melito’s disability claim was denied on grounds that he was not under the ongoing care of a medical doctor who determined that he was unable to perform the essential duties of his job. Of course many years have passed since that time. In the intervening decade and a half, Mr. Melito contends that he discovered that his former employer interfered with his potential business prospects during his job search between November 2022 and August 2023. He asserts that eight prospective employers he interviewed with abruptly terminated the application process after looking into circumstances concerning his tenure at and departure from the bank. This prompted Mr. Melito to investigate circumstances concerning the denial of his disability claim in 2010. Eventually Mr. Melito initiated this action in state court in New York against Royal Bank of Canada, LINA, and Cigna asserting claims of fraud and misrepresentation, conspiracy to commit fraud, aiding and abetting fraud, and tortious interference with prospective business advantage. Defendants removed the case to federal court and then filed a motion to dismiss the claims. Defendants argued that Mr. Melito’s fraud claims are preempted by ERISA and that any claim under ERISA is now time-barred. They also argued that he could not assert his tortious interference with a business relationship claim because it too is time-barred and he lacks standing to assert the claim. The court granted defendants’ motion to dismiss with respect to the fraud claims, agreeing that they relate to the processing and denial of his short-term disability benefits claim under an ERISA plan and are therefore preempted. Moreover, the court held that Mr. Melito cannot now bring a cause of action under ERISA related to the 2010 denial of his disability claim because each clear repudiation occurred more than ten years ago and thus was clearly outside the relevant statutes of limitation. However, the court found that the tortious interference claim was different. Unlike the fraud claims that directly relate to his claim for disability benefits under the plan, the court concluded the tortious interference claim does not relate directly to an ERISA-regulated activity and that it was therefore not preempted. And while the court dismissed the preempted fraud claims, it did not dismiss the tortious interference claim. Instead, the court declined to exercise supplemental jurisdiction over the one remaining state law cause of action and remanded the case back to state court.

Sixth Circuit

Muhammad v. Gap Inc., No. 2:24-cv-03676, 2025 WL 942432 (S.D. Ohio Mar. 28, 2025) (Judge Algenon L. Marbley). Proceeding pro se, plaintiff Haneef Muhammad sued his former employer, Gap, Inc., along with two disability occupational consultants, Elizabeth Weeden and Seth Vogelstein, Hartford Life and Accident Insurance Company, and Verisk Analytics in state court asserting claims for defamation, retaliation, discrimination, wrongful termination, and wrongful denial of long-term disability benefits. Defendants removed the lawsuit to federal court. Mr. Muhammad filed a motion to remand. In this decision the court set forth its reason for denying his motion: ERISA preemption. The court agreed with defendants that Mr. Muhammad’s long-term disability benefit related claims were all completely preempted by ERISA as there was no dispute that the long-term disability plan falls under ERISA’s definition of an employee welfare plan and the alleged wrongdoing underscoring Mr. Muhammad’s claims pertained to Hartford’s role reviewing, processing, and denying his claim for benefits under the plan. Moreover, the court said the “essence of Plaintiff’s claims is to recover damages based on the alleged improper processing of his LTD claim by Defendants.” The court added that the state law claims relating to the long-term disability policy do not allege a violation of any legal duty independent of ERISA or the terms of the policy. Making this point, the court said, “the defendants’ duty in this case existed solely due to, and within the context of, the benefits review mandated by the plan.” Accordingly, the court agreed with defendants that both prongs of the two-prong Davila preemption test are satisfied and there is federal subject matter jurisdiction over Mr. Muhammad’s causes of action regarding the denial of his long-term disability claim. The court also decided to exercise supplemental jurisdiction over the remaining interrelated state law causes of action, which “implicate his pursuit of his benefits under a plan governed by ERISA, and the subsequent alleged misconduct that occurred in pursuit of his benefits.”

Ninth Circuit

Dean v. Reliance Standard Life Ins. Co., No. 25-cv-341-RSH-BLM, 2025 WL 886960 (S.D. Cal. Mar. 20, 2025) (Judge Robert S. Huie). Sometimes issues of ERISA preemption are complex and the decisions applying preemption principles can be close calls. Other times, like in the present matter, weighing whether a state law claim is completely preempted by the statute requires little guesswork. Here, the wonderfully named plaintiff James Dean filed a complaint in California state court challenging Reliance Standard Life Insurance Company’s denial of his claim for long-term disability benefits under a group policy he purchased to cover himself and his employees. Reliance and its parent company, Tokio Marine Group, removed the action to federal court and moved to dismiss the state law claims as preempted by ERISA Section 502(a). Mr. Dean did not file an opposition brief by the date it was due. This alone, the court stated, would be sufficient grounds under the local rules of the court to grant the motion to dismiss. Nevertheless, the court engaged with the merits of the ERISA preemption arguments. To begin, the court took judicial notice of the group disability policy. The court was convinced that it meets the statutory definition of an ERISA-governed welfare plan as defined in 29 U.S.C. § 1002(1). The court then concluded that Mr. Dean’s claims for benefits under the policy at issue relate to an employee welfare benefit plan and conflict with ERISA’s regulatory scheme. It therefore agreed with defendants that ERISA’s preemption provision applies because each of the claims in the complaint relate to Reliance’s failure to pay benefits under the policy. The court thus granted the motion to dismiss the state law causes of action. However, it determined that Mr. Dean should be granted leave to amend his complaint to file an amended one that states federal claims under ERISA.

Medical Benefit Claims

Seventh Circuit

C.M. v. Health Care Serv. Corp., No. 24-cv-02122, 2025 WL 933847 (N.D. Ill. Mar. 27, 2025) (Judge Joan H. Lefkow). Plaintiffs C.M. and R.M. bring this lawsuit against Blue Cross and Blue Shield of Texas. C.M. incurred over $110,000 in medical expenses for R.M.’s treatment at two residential treatment centers – SUWS of the Carolinas and Vista Magna. The family maintains that Blue Cross should have paid for these medical expenses through their ERISA-governed health insurance plan. It did not. Blue Cross denied coverage at SUWS pursuant to the plan’s “wilderness exclusion.” Blue Cross denied preauthorization at Vista because the facility does not offer 24-hour onsite nursing services, which the plan requires. Plaintiffs assert that these two plan provisions violate the Mental Health Parity and Addiction Equity Act and ERISA. In their complaint the M. family assert claims for wrongful denial of benefits, violation of the Parity Act, and denial of a full and fair review. Blue Cross moved to dismiss the action. Although it is plaintiffs’ second cause of action, the court began with their Parity Act violation because plaintiffs’ claim for benefits stated under count one rests on their Parity Act claim. It agreed with plaintiffs that both the plan’s wilderness exclusion and its 24-hour onsite nursing requirement constitute a facial disparity in the plan between mental health/substance abuse benefits and medical/surgical benefits. The court therefore ruled that dismissal of the Parity Act claim was not warranted with respect to either allegation or either facility. Having found that plaintiffs plausibly alleged Parity Act violations with respect to Blue Cross’s denial of coverage at both treatment centers, the court concluded that their claim for those benefits under Section 502(a)(1)(B) survives the motion to dismiss as well, notwithstanding the fact that the existing plan terms do not confer benefits for R.M.’s treatments at either facility. As the court put it, “a contract provision that violates a statute is void.” The court accordingly denied the motion to dismiss this claim too. The decision was not completely favorable to plaintiffs, however. The court granted Blue Cross’s motion to dismiss plaintiffs’ claim alleging Blue Cross breached its fiduciary duties by failing to provide a full and fair review of their claims as required under the plan and ERISA. While there was no dispute that Blue Cross did in fact flout ERISA’s procedural requirements in § 1133 by not providing a written denial letter explaining its decision to deny preauthorization for R.M.’s treatment at Vista, the court agreed with Blue Cross that the family failed to allege they were concretely harmed by Blue Cross’s failure to comply with the procedural requirements set out in the plan and by the statute. “Plaintiffs did not allege that Blue Cross’s violation of procedural requirements impaired their ability to appeal or litigate the matter. While the court does not condone Blue Cross’s disregard for its obligations under ERISA to meaningfully engage in a dialogue with plan beneficiaries, plaintiffs have not stated a claim for relief under 29 U.S.C. §1133.” The court therefore granted the motion to dismiss this cause of action only, and dismissal of this claim was without prejudice.

Tenth Circuit

Thomas B. v. Aetna Life Ins. Co., No. 1:21-cv-00142-DBP, 2025 WL 895309 (D. Utah Mar. 24, 2025) (Magistrate Judge Dustin B. Pead). Two and a half months after his son T.B. was admitted to a residential treatment center for mental healthcare, plaintiff Thomas B. submitted a claim for benefits under his self-funded welfare plan, the Deutsche Bank Medical Plan, administered by Aetna Life Insurance Company. Aetna’s claims reviewer spoke on the phone with the admissions coordinator at the facility who confirmed that the treatment center did not have a behavioral health provider actively on duty 24 hours per day for 7 days a week. Later that same day Aetna denied coverage for T.B.’s stay at the residential treatment center. Its stated reason was straightforward: under the terms of the plan mental health residential treatment programs must have a behavioral health provider actively on duty all day, every day of the week, and the facility T.B. was being treated at did not meet this requirement. Therefore, Aetna concluded that the residential mental health treatment was not covered under the terms of the plan. Thomas appealed, arguing that coverage should be allowed because the facility had behavioral health professionals available on-call 24 hours a day and the plan did not define the term “actively on duty.” He therefore asserted that Aetna improperly interpreted the phrase actively on duty to mean on-site rather than on-call. Aetna upheld its denial, consistently maintaining that the care was not covered under the 24-hour actively on duty requirement. Eventually Thomas B. sued Aetna and the plan under ERISA. He asserted two claims: a claim for benefits and a claim for equitable relief for violation of the Mental Health Parity and Addiction Equity Act (“MHPAEA”). The parties filed cross-motions for summary judgment. Defendants also moved to exclude plaintiffs’ expert, Dr. Jeffrey Kovnick. Because the court granted summary judgment in favor of defendants, it denied as moot the motion to exclude the expert. As a preliminary matter, the court noted that the plan grants Aetna with discretionary authority sufficient to trigger the arbitrary and capricious review standard. Thus, the court stated that Aetna’s interpretation was entitled to deference under abuse of discretion review. With such deference Aetna’s interpretation of the 24-hour actively on duty language was easily affirmed. Indeed, even plaintiff acknowledged that the plan’s plain language denies coverage. Thomas B. put up more of a fight on his MHPAEA claim in which he argued that the requirement that the facility be staffed 24 hours a day with an on-site mental healthcare professional was both a facial and applied stricter nonquantitative treatment limitation on mental health benefits than the treatment limitations the plan applied to analogous medical and surgical benefits. However, the court was not convinced and found plaintiff failed to meet his burden to prove a Parity Act violation. For one thing, the court pointed out that the plan imposes functionally the exact same requirements on residential treatment facilities that it imposes on skilled nursing facilities, particularly as it relates to the 24/7 staffing requirement. The court described MHPAEA as not precluding Aetna and the plan from imposing additional quality control measures on residential treatment centers, so long as those requirements are on par with non-mental healthcare analogues. Nor was the court convinced by plaintiff’s expert that the requirements placed by the plan on residential treatment facilities violates MHPAEA because it does not reflect the generally accepted standard of care for these types of programs. “The Parties also agree that MHPAEA does not require any specific standard of care.” The fact that the plan imposes strikingly similar standards to both inpatient mental health and medical, surgical, and nursing facilities was enough for the court to establish that the plan was not in violation of the Mental Health Parity Act. Accordingly, the court entered summary judgment in favor of Aetna and the plan on both of plaintiff’s causes of action.

Elizabeth M. v. Premera Blue Cross, No. 4:25-cv-00021-AMA-PK, 2025 WL 934506 (D. Utah Mar. 27, 2025) (Magistrate Judge Paul Kohler), Katie M. v. Aetna Life Ins. Co., No. 4:24-cv-00053-AMA-PK, 2025 WL 934458 (D. Utah Mar. 27, 2025) (Magistrate Judge Paul Kohler), David M. v. HP, Inc., No. 4:25-cv-00013-PK, 2025 WL 934706 (D. Utah Mar. 27, 2025) (Magistrate Judge Paul Kohler), Christian G. v. Aetna Life Ins. Co., No. 4:25-cv-00023-AMA-PK, 2025 WL 934505 (D. Utah Mar. 27, 2025) (Magistrate Judge Paul Kohler), Andrew D. v. United Healthcare Ins. Co., No. 4:25-cv-00007-AMA-PK, 2025 WL 933872 (D. Utah Mar. 27, 2025) (Magistrate Judge Paul Kohler). In five separate but nearly identical decisions this week Magistrate Judge Paul Kohler granted motions to allow ERISA plaintiffs in medical benefit cases arising from denials of claims for the mental health treatment of minors to proceed anonymously. The cases are assigned to District Judge Ann Marie McIff Allen. In each case Magistrate Judge Kohler determined that privacy needs to protect the highly-sensitive and personal medical information of children outweigh any competing public interest in judicial openness. Moreover, the identities of the children and their parents are known to the defendants in all of the cases. Judge Kohler stressed that permitting minor anonymity extends even after the children age out of adolescence and that district courts should therefore permit anonymity for plaintiffs who were minors at claim accrual and whose struggles occurred before the age of 18. “Rule 5.2(a)(3) recognizes this public interest in safeguarding children by protecting minor anonymity. The spirit of Rule 5.2(a)(3) would be violated by making a minor’s personal information publicly available” By the same logic, the Magistrate determined that the parents acting as co-plaintiffs must be allowed to proceed anonymously as well, “because identifying a minor’s parents effectively disposes of minor anonymity.” Not only are medical records generally “highly sensitive and personal information,” statutorily protected by HIPAA, but these cases are of a deeply personal nature and involve graphic and detailed descriptions recounting the mental health struggles plaintiffs went through as children. In short, Judge Kohler concluded that the public has a strong interest in protecting minors and the individual patients and family members have a strong interest in privacy. Accordingly, Judge Kohler allowed the plaintiffs in all five cases to proceed anonymously.

Pension Benefit Claims

Ninth Circuit

Bennett v. Kaiser Permanente S. Cal. Emps. Pension Plan Supplement to the Kaiser Permanente Ret. Plan for S. Cal. Permanente Med. Grp., No. 24-cv-00215-HSG, 2025 WL 895207 (N.D. Cal. Mar. 24, 2025) (Judge Haywood S. Gilliam, Jr.). Sharon Walker was placed on leave from her long-time employment with Southern California Permanente Medical Group in July 2015 due to plasma cell leukemia. Ms. Walker and her brother, Victor, were concerned about her retirement and medical retirement benefits from the retirement plan. Victor spoke to representatives who arranged for Sharon’s employment to be terminated. Although there is a dispute about whether Victor had the authority to terminate his sister’s employment, it is undisputed that Sharon’s employment was terminated on December 4, 2015. Three days later, Sharon died. The paperwork was not yet complete and the retirement benefits were not paid to Sharon. Sharon’s son, plaintiff Errol Bennet, filed a claim for death benefits as a qualified dependent under the plan. However, because his mother’s employment had terminated three days before her death on December 7, his claim was denied because a qualified dependent is only entitled to death benefits under the plan if the participant dies while she is still employed. Mr. Bennett attempted to have his mother’s termination date changed. When the employer refused to do so, Mr. Bennett initiated this action under ERISA bringing claims for breach of fiduciary duty under Section 502(a)(3) and benefits under Section 502(a)(1)(B). Defendants moved to dismiss. The court granted their motion, with leave to amend, in this decision. To begin, the court agreed with defendants that the complaint fails to sufficiently allege that Southern California Permanente Medical Group, through its representative, breached its fiduciary duty when it rejected Mr. Bennett’s request to change his mother’s employment termination date. The court stated that the complaint fails to explain how the representative’s conduct meets the definition of a functional fiduciary. “In every case charging breach of ERISA fiduciary duty, then, the threshold question is not whether the actions of some person employed to provide services under a plan adversely affected a plan beneficiary’s interest, but whether that person was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint.” The court therefore granted the motion to dismiss the breach of fiduciary duty claim. The court then also granted the motion to dismiss the claim for benefits, as even Mr. Bennett acknowledged that “there currently is no viable section 1132(a)(1)(B) claim for benefits under the terms of the Kaiser Plan.” However, the court could not say that amendment of either claim would be futile and therefore granted the motion to dismiss without prejudice should Mr. Bennett wish to file an amended complaint. 

Plan Status

First Circuit

Universitas Educ. v. Robinson, No. 15-cv-11848-DJC, 2025 WL 889377 (D. Mass. Mar. 21, 2025) (Judge Denise J. Casper). This case is one of many brought by plaintiff Universitas Education, LLC pursuing recovery of $30 million in insurance proceeds allegedly owed to it since 2008. In this particular action plaintiff sued Jack E. Robinson for violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), aiding and abetting fraud, breach of fiduciary duty, negligent misrepresentation and negligent opinion, aiding and abetting a breach of fiduciary duty, civil conspiracy to commit fraud and breach of fiduciary duty, and unjust enrichment. In broad strokes, the complaint alleges that Mr. Robinson worked alongside Daniel Carpenter in a scheme selling stranger-originate life insurance policies which they misrepresented and concealed were intended for resale. Daniel Carpenter was later convicted of numerous felonies for fraud and related charges. The $30 million death benefit proceeds were never paid to Universitas and instead were transferred among numerous entities controlled directly or indirectly by Mr. Carpenter. Since the filing of this lawsuit the defendant has been substituted as Lillian Granderson as successor in interest to Mr. Robinson. Ms. Granderson moved to dismiss the action. Both parties also moved for summary judgment. The court first assessed the motion to dismiss. The motion to dismiss was relevant to our purposes at Your ERISA Watch given Ms. Granderson’s assertion that the welfare benefit plan is covered by ERISA and plaintiff’s claims are, by extension, preempted by ERISA. The court was not convinced. “Granderson insists in a conclusory matter that the COT Welfare Benefit Plan is covered by ERISA, and suggests Holding Capital is the employer providing benefits, but does not suggest that the purpose of the COT was ‘to provide benefits [to employees] on a regular and long term basis’… Moreover, Granderson herself concedes that the COT itself is not an ‘ERISA Plan,’ and Nova, for which Robinson served as a corporate officer and corporate representative, conceded the same at the Arbitration.” Because Ms. Granderson could provide no contrary evidence, the court concluded that ERISA preemption does not apply. The court further held that the claims against Mr. Robinson were not barred by res judicata and the applicable statutes of limitations do not bar Universitas’s claims. Accordingly, the court denied the motion to dismiss. The court then turned to the parties’ competing motions for summary judgment and determined that there were no genuine disputes of fact that Mr. Robinson was liable for violating RICO, for negligent misrepresentation and negligent opinion, civil conspiracy to commit fraud and fiduciary breach, and for breaching his fiduciary duties owed to Universitas, aiding and abetting others in their breach of fiduciary duty to Universitas, and aiding and abetting fraud. As a result, the court entered summary judgment in favor of Universitas on all of these causes of action. The only claim on which the court denied Universitas’s motion for summary judgment was its claim of unjust enrichment, as the court found that it has an adequate remedy at law. Universitas was therefore successful in its non-ERISA action against Mr. Robinson seeking to recover the death benefit proceeds.

Fourth Circuit

Moore v. Unum Life Ins. Co. of Am., No. 5:24-CV-00141-KDB-DCK, 2025 WL 928826 (W.D.N.C. Mar. 27, 2025) (Judge Kenneth D. Bell). Plaintiff Christopher Moore is a former employee of Dr. Pepper/Seven Up who became disabled. He stopped working and sought short-term disability benefit payments through his employer. The plan delegated authority to decide claims to Unum Life Insurance Company. Unum approved Mr. Moore’s claim and paid benefits, but only for sixteen weeks. Thereafter, Unum denied further benefits. Accordingly, Mr. Moore sued Unum and his former employer in North Carolina state court alleging breach of contract and violation of the North Carolina Wage and Hour act against the employer and violation of the North Carolina Unfair and Deceptive Trade Practices Act and breach of contract against Unum. Defendants moved to dismiss Mr. Moore’s claim and to strike his jury demand. They argued that the plan is governed by ERISA and that the state law claims are preempted by ERISA. Additionally, defendants argue that Mr. Moore is not entitled to a jury trial under ERISA. In response, Mr. Moore asserts that the short-term disability plan is a payroll practice, exempt from ERISA. To start, the court said there’s little doubt the plan was established and maintained by an employer as contemplated in ERISA. However, even where an established or maintained plan exists, that plan can still fall within the Department of Labor’s carved out exemption for welfare benefit plans, “whereby ‘payroll practices’ are excluded.” Here, the court concluded that the short-term disability plan at issue fit comfortably within the payroll practice exemption. The court said it “readily concludes that Plaintiff’s STD payments were a temporary substitute for his normal compensation as an active employee, even where, as is the case here, the payment was only a percentage of the employee’s weekly earnings.” Further, the short-term disability plan is 100% funded from the company’s general assets. The court rejected defendants’ suggestion that the plan could not fall into the payroll exemption because use of the short-term disability plan “is contingent upon the plan remaining in effect.” Adopting this position, the court found, would lead to absurd results, whereby a plan that fits squarely into the Department of Labor’s payroll exemption from ERISA would morph into an ERISA-governed plan simply through an employer’s discretion to cancel the plan. In addition, the court rejected defendants’ argument that the short-term disability plan is governed by ERISA because it is a component of a larger Wrap Plan, comprising many different benefits. Under the circumstances, the court considered the short-term disability plan to be separate and independent from the Wrap Plan because each component of the Wrap Plan is elected separately by employees at various times throughout employment. “Importantly, analyzing the plan as suggested by Defendants could quickly become a recipe for avoidance; employers could easily attribute a plan to ERISA (or circumvent it entirely) simply by creating an ‘umbrella’ program, such as the Wrap Plan, and listing desired plans under it.” Based on the foregoing, the court found that the short-term disability plan is a payroll practice exempt from ERISA. By the same logic, the court found the state law claims not to be preempted by ERISA. The court also denied the motion to strike the jury demand, which too was dependent on a finding that the plan was governed by ERISA. Finally, the court decided against exercising supplemental jurisdiction over the remaining state law claims and therefore remanded the case back to state court.

Eighth Circuit

Thompson v. Pioneer Bank & Tr., No. 5:24-CV-05067-RAL, 2025 WL 888894 (D.S.D. Mar. 21, 2025) (Judge Roberto A. Lange). Plaintiff Andrew Taylor Thompson filed this lawsuit against his former employer, Pioneer Bank & Trust, after he was compelled to resign in August of 2024. Among claims for breach of the employment agreement and for declaratory judgment related to the parties’ employment agreement and Mr. Thompson’s resignation, Mr. Thompson also asserts two claims under ERISA in connection with the Pioneer Bank & Trust Salary Continuation Agreement, which he asserts is an ERISA-governed employee benefits plan meant to provide him with various retirement, disability, and other employment benefits. Mr. Thompson asserts a claim to clarify his right to benefits under Section 502(a)(1)(B) as well as a claim alleging Pioneer interfered with his rights to benefits under Section 510. Pioneer moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that the court lacks subject matter jurisdiction because the parties never entered into the Salary Continuation agreement, which Mr. Thompson alleges is the ERISA-governed plan. Pioneer added that the absence of the Salary Continuation Agreement means no ERISA plan, and by extension, no federal question jurisdiction, exists. The court disagreed. It relied on precedent set in the Eighth Circuit in 2020 in Sanzone v. Mercy Health, 954 F.3d 1031 (8th Cir. 2020), which concluded that “whether a plan is an ERISA plan is an element of the plaintiff’s case and not a jurisdiction inquiry.” Under Sanzone, the court agreed with Mr. Thompson that he need not prove by a preponderance of the evidence that the Salary Continuation Agreement was an ERISA plan binding the parties in order for the court to exercise jurisdiction over his ERISA claim. Nor, as Pioneer argued, did Mr. Thompson need to prove that he was a plan participant at this stage of the proceedings. Indeed, the court found that Mr. Thompson asserted colorable claims under ERISA on the record and factual allegations presented in his complaint, and because a federal question is presented on the face of the complaint, the court determined that it has federal question jurisdiction under 28 U.S.C. § 1331. Finally, the court stated that it has supplemental jurisdiction over the remaining causes of action as they involve the same parties, underlying facts, and employment relationship as the ERISA claims. For these reasons, the court denied Pioneer’s motion to dismiss for lack of jurisdiction.

Pleading Issues & Procedure

Sixth Circuit

Hacker v. Arcelormittal Tubular Prods. U.S. LLC, No. 1:24-CV-00341, 2025 WL 918482 (N.D. Ohio Mar. 26, 2025) (Judge Bridget Meehan Brennan). Husband and wife Ronald and Jinny Hacker allege in this ERISA action that Mr. Hacker’s employer, ArcelorMittal Tubular Products USA, LLC, improperly terminated his medical benefits at a time when his stage IV cancer treatments necessitated extended absences from work. The Hackers’ complaint names three defendants, ArcelorMittal, the benefits committee, and Highmark Blue Cross Blue Shield, and asserts six claims: “(1) violation of ERISA for failure to provide notice of adverse benefits determination (against all Defendants); (2) wrongful termination of healthcare coverage (against all Defendants); (3) discrimination under ERISA Section 510 (against ArcelorMittal); (4) failure to provide COBRA notice to Mr. Hacker under ERISA (against ArcelorMittal and/or Benefits Committee); (5) failure to provide COBRA notice to Mrs. Hacker under ERISA (against ArcelorMittal and/or Benefits Committee); and (6) violation of ERISA for a deficient Summary Plan Description (“SPD”) (against ArcelorMittal and/or Benefits Committee).” Defendants moved to dismiss the complaint. The court granted in part and denied in part the motion to dismiss in this order. To begin, the court concluded that ArcelorMittal is a proper defendant, not only to the Section 510 claim, but also to the remaining claims because plaintiffs plead that ArcelorMittal acted as a de facto plan administrator, which the court found sufficient to overcome the employer’s motion to dismiss it as a named defendant. Next, the court declined to dismiss counts one and two for failure to exhaust administrative remedies. At this stage, the court stated that it could not determine what administrative procedures defendants allege the family was required to follow and if those procedures were in fact followed. However, the court agreed with defendants that the Hackers failed to state some of their claims. Specifically, the court dismissed the two COBRA claims. “By their own complaint allegations, plaintiffs can plead themselves out of federal court.” The court went on to say this was so because even if there is some question as to the family’s receipt of a copy of a termination of coverage notice, the Hackers did not dispute that such a notice existed and was provided to their designee and to their attorney within the applicable notice period. Counts four and five were accordingly dismissed. The remainder of the couple’s causes of actions, however, were allowed to proceed, as the court determined that the remaining allegations in the complaint state plausible claims upon which relief may be granted. Accordingly, the court denied the motion to dismiss as to the claims for failure to provide notice of adverse benefit determination, wrongful termination of healthcare coverage, discrimination under Section 510, and for violation of ERISA for a deficient summary plan description.

Kelly v. Valeo N. Am., Inc., No. 2:24-CV-11066-TGB-KGA, 2025 WL 933943 (E.D. Mich. Mar. 27, 2025) (Judge Terrence G. Berg). Plaintiff Thomas Kelly brings this ERISA and state law action against his former employer, Valeo North America, Inc., for wrongful denial of benefits, breach of fiduciary duty, failure to furnish plan materials upon request, breach of contract, and declaratory relief alleging various issues with pension vesting and benefit calculations. Broadly, Mr. Kelly claims he suffered losses because Valeo used 14.1 “benefit service” years, instead of 23.1 “accredited service” years as a benchmark for calculating his pension benefits, and in not recognizing his eligibility for early retirement at age 58. He seeks monetary, declaratory, and equitable relief to make him whole. Valeo moved to dismiss all but Mr. Kelly’s claim for benefits under Section 502(a)(1)(B), which would be subject to review under the abuse of discretion standard. In addition, Valeo proposed a truncated briefing scheduling and requested the court adopt the proposed schedule it provided. The court granted in part and denied in part the motion to dismiss, and denied Valeo’s request for a truncated briefing schedule. The court took up two procedural matters first. To begin, the court agreed with Mr. Kelly that Valeo’s counsel did not seek concurrence or attempt to confer with his counsel, in violation of the local rules. Though the court declined to strike the motion for failure to comply with the local rules and guidelines, it did “admonish Valeo’s counsel for failure to comply with Local Rule 7.1(a)” and directed counsel to review all relevant Local Rules going forward and to strictly comply with them in the future. Next, the court discussed whether it would consider the documents attached to Valeo’s motion and Mr. Kelly’s response. The court held that the four documents Valeo attached to its motion to dismiss – (1) Valeo Lighting Salaried Pension Plan; (2) January 4, 2019 Letter to Kelly; (3) 2013 Summary Plan Description; and (4) Actuarial Early Deferred Vest Reduction Factors table – are referred to in the complaint and central to Mr. Kelly’s claims, and thus could be properly considered part of the pleadings. The court therefore stated that it would consider these documents on the motion to dismiss. However, the court did not permit Mr. Kelly’s declaration that he attached to his response brief. Unlike the exhibits Valeo attached to its motion, the court found that Mr. Kelly’s declaration was an improper attempt to amend his complaint by adding factual allegations as a part of an opposition to a motion to dismiss. It therefore declined to consider his attached declaration. With these matters settled, the court carried on with assessing the sufficiency of the claims. Mr. Kelly himself stipulated to dismissing his state law breach of contract anticipatory repudiation claim. Accordingly, the court granted the motion to dismiss the claim. The court also dismissed Mr. Kelly’s claim for breach of fiduciary duty under Section 502(a)(3). It agreed with defendant that this claim relied on the same injury as the claim for benefits under Section 502(a)(1)(B), and that Section 502(a)(1)(B) provides adequate relief for his only alleged injury. Because the fiduciary breach claim was not based on an injury separate and distinct from the denial of benefits, the court granted the motion to dismiss it. Relatedly, the court dismissed Mr. Kelly’s claim for declaratory relief asserted under the Declaratory Judgment Act. Not only did the court note that the Declaratory Judgment Act does not provide an independent cause of action, as declaratory judgment is a remedy, not an independent claim, but the court also agreed that this “cause of action” suffered from the same problem as the claim for equitable relief under ERISA – that relief is afforded under Section 502(a)(1)(B). The court, however, denied the motion to dismiss Mr. Kelly’s claim under § 1132(c) seeking statutory penalties for failure to provide documents he requested. The court found that Mr. Kelly plausibly alleged that Valeo failed to produce the 2011 Plan Document despite the fact Mr. Kelly requested all pension plan documents from Valeo within its possession from 2011 through 2019. As for Valeo’s request for a truncated scheduling order, the court replied that it would instead issue its own ERISA scheduling order which will govern all proceedings in this case, including any procedural challenges. For these reasons, the court granted in part Valeo’s motion to dismiss portions of Mr. Kelly’s complaint, and denied its request for a condensed briefing schedule.

Provider Claims

Seventh Circuit

St. Bernadine Med. Ctr. v. Health Care Serv. Corp., No. 24-cv-02906, 2025 WL 933804 (N.D. Ill. Mar. 27, 2025) (Judge Martha M. Pacold). Plaintiff St. Bernardine Medical Center sued Health Care Service Corporation in state court in Illinois for breach of implied contract and quantum meruit arising from its alleged failure to reimburse the provider for medically necessary healthcare it provided to three patients. The insurance company removed the case to federal court and subsequently filed a motion to dismiss. Meanwhile, St. Bernadine moved to remand its case to state court. The court denied the motion to remand. It concluded that the claims relating to the first patient were completely preempted by ERISA. The provider asked the court to reconsider its decision. First, it argued that recent authority on the issue supports remand. The court was not persuaded. “To the extent there is a split of authority, it predates the court’s decision.” Next, St. Bernadine argued that the court’s ruling made a manifest error in fact when it determined that no preauthorization had occurred as to Patient 1. Again, the court was not convinced in light of the evidence plaintiff provided. In fact the evidence suggested that the only call that occurred between the parties regarding the first patient occurred on May 31, 2022, not May 28, and on June 1, one day after that call, Health Care Service Corporation sent a letter denying preauthorization, not rescinding it. Because the court was not convinced that it made any manifest error of law or fact in its ruling denying St. Bernadine’s motion to remand, the court denied its motion for reconsideration. The court then turned to defendant’s motion to dismiss. Contrary to defendant’s assertion, the court stated that complete preemption “does not imply conflict preemption.” Rather, the court said it was required to recharacterize the preempted claim as arising under ERISA and to assess whether it could exist in its federal form. Unfortunately for the provider, the court concluded that it could not. “Here, construing the implied contract and quantum meruit claims as a denial of benefits claim under ERISA § 502(a), SBMC fails to state a claim as to Patient 1.” The complaint, the court noted, failed to allege what medical services were provided to the patient and to tie the claims for the services to terms of the healthcare plan. Given these critical omissions, the court held the complaint failed to plausibly allege that the patient was entitled to benefits under the terms of the employee benefits plan. Accordingly, the court granted the motion to dismiss the ERISA claim as to Patient 1, without prejudice. Regardless, the court denied the motion to dismiss the implied contract and quantum meruit claims as to Patients 2 and 3. The court has not determined that these claims are completely preempted, and the court stated that it would not exercise supplemental jurisdiction over them. However, the court clarified that it would not consider whether to remand these claims to state court “unless and until SBMC files an amended complaint and the court determines whether it states a plausible federal claim.”

Venue

Fourth Circuit

Int’l Painters & Allied Trades Indus. Pension Fund v. McCormick Painting Co., No. ELH-24-2621, 2025 WL 895391 (D. Md. Mar. 24, 2025) (Judge Ellen Lipton Hollander). The International Painters and Allied Trades Industry Pension Fund, the International Painters and Allied Trades Annuity Plan, and the Southern Painters Welfare Fund, along with each plans’ trustees, bring this action under ERISA against two contributing employers, McCormick Painting Company, Inc. and McCormick Industrial Abatement Services, Inc., seeking hundreds of thousands of dollars in unpaid contributions. The companies moved to dismiss the complaint against them, asserting improper venue under Federal Rule of Civil Procedure 12(b)(3). In the alternative, defendants moved to transfer the case to the Eastern District of Arkansas, as they are citizens of Arkansas. The court in this order took up defendants’ alternative option and transferred the case to the District Court for the Eastern District of Arkansas. As an initial matter, the court noted how even the employers concede that venue is technically appropriate in the District of Maryland as to the International Painters and Allied Trades Industry plaintiffs. But the court agreed with the companies that nothing in ERISA permits the Southern Painters plaintiffs to bring their claims in Maryland simply because the International Painters defendants can properly assert venue in Maryland. “Despite the commonality and similarity of the factual allegations and the defendants, venue in this District is improper as to plaintiffs Welfare Fund; FTI Council 10; Canning; and Wohl. Simply put, the SP Funds are not administered in Maryland, no breach is alleged to have occurred in Maryland, and defendants do not reside in Maryland. Although plaintiffs’ concern as to judicial economy is certainly not specious, that concern does not create venue in Maryland.” This left the court in an awkward spot. There was no ground to dismiss the suit as to the International Painters plaintiffs, which prompted the question of what to do regarding the claims of the Southern Painters plaintiffs. Although the court said it had several options it could take, including severing the case, it determined that the simplest and best solution was to transfer the case, as to avoid two separate civil cases. And because the court agreed with defendants that the entire case could have been brought in the Eastern District of Arkansas, it decided that was the appropriate district to transfer the case to. Thus, in the interests of justice, convenience, and efficiency, the court ordered the case to be transferred to the Eastern District of Arkansas. 

Tenth Circuit

Johnny H. v. UnitedHealthcare Ins. Co., No. 2:24-cv-00389 JNP, 2025 WL 917954 (D. Utah Mar. 26, 2025) (Judge Jill N. Parrish). This case concerns a claim for mental health residential treatment at a Utah-based facility. The plaintiffs Johnny H. and J.H. live in Walker County, Texas and their fully insured ERISA welfare plan sponsored by Precision Machining & Fabrication, LLC is located in Louisiana. In addition to the family residing out of state and the plan being administered out of state, the plan’s administrators UnitedHealthcare and United Behavioral Health are also incorporated out of state. Thus, the only connection to Utah is the location of the treatment at issue. Defendants accordingly challenged the family’s chosen forum and moved to transfer venue to the Southern District of Texas pursuant to 28 U.S.C. § 1404(a). First, the court addressed the threshold injury of whether the action could have originally been brought in the proposed transferee district. As plaintiffs reside in the district there was no dispute that the action could have been brought there. Thus, the sole issue before the court was whether the Southern District of Texas or the District of Utah was a more appropriate forum. “In this case, J.H.’s treatment in Utah provides the only connection to this forum. None of the parties reside in Utah. The Plan was not administered in Utah. The alleged breaches did not occur in Utah. The decision to deny benefits was not made in Utah.” Assessing the practical consideration of the facts, the court found that the Southern District of Texas, where plaintiffs reside and the breach occurred, had a greater connection to this case than the District of Utah and was therefore the most appropriate forum to dispose of it. Under these circumstances, the court exercised its broad discretion to grant the motion to change venue.

Pamela P. v. Indep. Blue Cross, No. 2:24-cv-00112 JNP, 2025 WL 918076 (D. Utah Mar. 26, 2025) (Judge Jill N. Parrish). After Independence Blue Cross failed to pay for plaintiff C.Z.’s treatment at a residential treatment facility located in Utah, she and her mother sued the insurance company under ERISA to challenge that decision. Mother and daughter are residents of Colorado and New York, respectively. Their only connection to their chosen forum was the location of C.Z.’s treatment. As the Plan is located and administered in the Eastern District of Pennsylvania, Independence Blue Cross moved to transfer venue there. In line with a series of similar decisions, the court exercised its discretion to transfer the case. Because none of the parties reside in Utah, the plan was not administered in Utah, and the only connection to the forum was the location of the residential treatment center at issue, the court found that the family’s choice of forum was entitled to little weight and not controlling. Other factors like the locations of the relevant witnesses and documents, the cost of making necessary proof, and other practical considerations supported transferring the case. Accordingly, the court was persuaded that resolution of this dispute in the Eastern District of Pennsylvania will be more convenient and otherwise superior to handling the case in Utah. The court thus held that the interests of justice weigh in favor of transfer and accordingly ordered the case be transferred across the country. 

Withdrawal Liability & Unpaid Contributions

Third Circuit

Central States, Se. & Sw. Areas Pension Fund v. Dairy, No. 23-3206, __ F. 4th __, 2025 WL 923761 (3d Cir. Mar. 27, 2025) (Before Circuit Judges Krause, Bibas, and Ambro). MPPAA, the Multiemployer Pension Plan Amendments Act, sets out the costs for an employer withdrawing from a multiemployer pension plan, including the liability, interest, and penalties incurred by the withdrawal. Plaintiff in this action is one such multiemployer plan: the Central States, Southeast and Southwest Areas Pension Fund. The Fund initially sought payment from two withdrawing employers, Borden Dairy Company of Ohio, LLC and Borden Transport Company of Ohio, LLC. The Borden Ohio entities took issue with the $41.6 withdrawal liability the Fund assessed they were responsible for and demanded from them. That dispute ended in a settlement agreement entered during the pendency of an arbitration proceeding. The arbitrator never entered an award. Since that time, however, the Borden Ohio entities have gone bankrupt and ceased making withdrawal liability payments. Here, the Central States, Southeast and Southwest Areas Pension Fund seeks to collect withdrawal liability payment from related employers which are allegedly commonly controlled with the Borden Ohio entities. MPPAA permits companies under common control to be held jointly and severally liable for withdrawal payments. The related employer defendants challenged the lawsuit against them and moved to dismiss it under Rule 12(b)(6). The district court found their arguments persuasive, ruling that “‘the MPPAA does not provide a statutory cause of action to enforce a private settlement agreement.’ More specifically, ‘the action under § 1401(b) is available only in cases where the arbitration proceeding has not been initiated within the statutory period or has been completed. It is not available where the arbitration proceeding has been initiated, but not completed, as is true here.’” The district court also concluded that “the Fund failed to meet the procedural requirements for notice and demand outlined in 29 U.S.C. § 1399(b)(2).” The district court thus granted the motion to dismiss. Central States appealed. The Third Circuit noted that this case presents an interesting set of circumstances and poses the question of what happens “if the parties settle during an arbitration, meaning both that arbitration began and that no arbitral award issued?” In other words, this case asks, is the settlement agreement properly understood under MPPAA as a revised withdrawal liability assessment? Although the Circuit Judges were not unanimous in their position, the majority’s answer was yes. The Third Circuit stated that the purpose of MPPAA is to ensure the solvency of multiemployer plans, and thus there is a need to interpret the statute liberally in order to protect this goal and to protect the solvency of these plans. Addressing the weird gap between subsections 1399(b)(1) and 1401(b)(1), the court of appeals determined that Section 1399(b)(1) of MPPAA supplies the procedural requirements for notice and demand, while Section 1401(b)(1) of the statute supplies the Fund’s cause of action to enforce the award. While it’s true that disputes under MPPAA must be decided by an arbitrator in the first instance, the Third Circuit noted that “the time period for invoking arbitration has now run, so we must resolve the dispute.” The court of appeals expressly held that the related employers were free to seek arbitration as to the settlement agreement. The problem for them here was they did not do so. In the present matter, because no employer began an arbitration with respect to the revised assessment following the arbitration proceeding, the Third Circuit concluded that the Fund could sue the related employers under § 1401(b)(1). As the Third Circuit put it, defendants “slept on their rights and cannot overcome that failure by asking us now to decide what should have been decided by an arbitrator in the first instance.” Additionally, the court of appeals was satisfied that the Fund complied with the procedural requirements in Section 1399(b), notwithstanding the fact that the settlement agreement itself did not meet the formal notice-and-demand requirements of § 1399(b)(2)(B). The court explained that Section 1399(b)(1) instead applies because the settlement agreement is properly understood as a revision of the withdrawal liability assessment and again the related employer failed to file an arbitration proceeding with respect to that revised assessment. Further, the court added that the settlement agreement outlined an amount owed, a payment schedule, and a demand for payment, and thus satisfied all the requirements of the notice-and-demand requirements of the provision, albeit informally. The Third Circuit thus disagreed with the defendants that relying on Section 1399(b)(1) makes little sense because that section applies to an initial assessment and (b)(2)(B) to a revised assessment. For these reasons, the appeals court reversed the lower court’s order dismissing the Fund’s suit. Notably, the panel of judges was not unanimous. Dissenting, Circuit Judge Bibas read the statute differently. To him, the statutory language provided a clear answer, and that answer was inconsistent with the position adopted by his colleagues. In his eyes, the majority’s opinion relied “on abstract statutory purpose, atextual precedents from other courts, and a non-binding opinion from an agency,” and in so doing “reshapes ERISA’s text to help a pension fund and retirees.” Judge Bibas stated he could see the public policy benefits of the court’s ruling, but not how ERISA and MPPAA could be read to get there. Congress, Judge Bibas stated, made specific choices about how multiemployer plans could pursue withdrawal liability, which the courts are not permitted to tweak to their liking. He stated that the statute creates two paths if an employer objects to a withdrawal liability assessment: (1) arbitrate disputes, have an arbitrator enter an award, and sue to enforce or change that award; or (2) forgo arbitration, letting the fund sue to enforce its payment schedule. Judge Bibas found the two paths to be mutually exclusive. Here, the parties chose path 1, regardless of the fact the arbitrator did not enter an award and the dispute settled, Judge Bibas said the fact remains that the parties are still in the middle of that path. Simply put, Judge Bibas rejected what he sees as a judicially created “path 3,” and therefore objected to the position of his fellow judges. He therefore stated, “[t]hough I see the benefits of getting the fund its funding, I cannot agree to bypassing ERISA’s text to do so. I respectfully dissent.”